LeapFrog 2005 Annual Report Download - page 104

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LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share and percent data)
The following table sets forth the computation of basic and diluted net income (loss) per share.
Year Ended December 31,
2005 2004 2003
Numerator:
Net income (loss) ................................ $17,500 $ (6,528) $72,675
Denominator—weighted average shares:
Class A and B—shares ............................ 61,917 59,992 57,246
Less: shares of unvested stock ...................... (136) (16) —
Denominator for basic net income (loss) per Class A and
B share ...................................... 61,781 59,976 57,246
Effect of dilutive securities:
Employee stock options ........................... 467 — 3,302
Restricted stock and stock units ..................... 81 — —
Denominator for diluted net income (loss) per Class A
and B share ................................... 62,329 59,976 60,548
Net income (loss) per Class A and B share: ............
Basic ...................................... $ 0.28 $ (0.11) $ 1.27
Diluted .................................... $ 0.28 $ (0.11) $ 1.20
If the Company had reported net income for the year ended December 31, 2004, the calculation of diluted
net income (loss) per Class A and B share would have included an additional 1,582 common equivalent shares
related to outstanding stock options and unvested stock (determined using the treasury stock method).
19. Commitments and Contingencies
The Company leases office and warehouse space under noncancelable operating leases having initial terms
in excess of one year and expiring in various years between 2005 and 2016. The Company also has several
noncancelable office equipment leases with initial terms in excess of one year and which expire in various years
between 2005 and 2007, and certain of these leases contain rent escalation clauses. Generally, these have initial
lease periods of three to ten years, and contain provisions for renewal options of five years at market rates.
Rent expense for the years ended December 31, 2005, 2004 and 2003 was $3,707, $5,088 and $3,656,
respectively. Future minimum annual payments under the Company’s lease commitments for the years ended
December 31 are:
Year Commitments
2006 .......................................................... $ 7,844
2007 .......................................................... 6,623
2008 .......................................................... 5,358
2009 .......................................................... 5,121
2010 .......................................................... 4,912
Thereafter ...................................................... 13,485
Total .......................................................... $43,343
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