NVIDIA 2005 Annual Report Download - page 69

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NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)
For the purpose of the pro forma calculation the fair value of shares purchased under our Employee Stock Purchase Plan, or the
Purchase Plan, has been estimated at the date of purchase using the Black−Scholes option pricing model with the following
assumptions:
Year Ended Year Ended Year Ended
January 30, January 25, January 26,
2005 2004 2003
Weighted average expected life (in months) 20 9 10
Risk free interest rate 1.9% 1.7% 3.7%
Volatility 80% 80% 88%
Dividend yield −− −− −−
For the purpose of the pro forma calculation, the weighted−average fair value of shares purchased under the Purchase Plan during the
year ended January 30, 2005, January 25, 2004 and January 26, 2003 was approximately $5.28, $3.76 and $14.27, respectively.
Net Income Per Share
Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted
net income per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding
during the period, using the treasury stock method. Under the treasury stock method, the effect of stock options outstanding is not
included in the computation of diluted net income per share for periods when their effect is anti−dilutive. The following is a
reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods
presented:
Year Ended Year Ended Year Ended
January 30, January 25, January 26,
2005 2004 2003
(In thousands, except per share data)
Numerator:
Numerator for basic and diluted net income per share $ 100,356 $ 74,419 $ 90,799
Denominator:
Denominator for basic net income per share, weighted average shares 166,062 160,924 153,513
Effect of dilutive securities:
Stock options outstanding 10,496 11,783 14,880
Denominator for diluted net income per share, weighted average shares 176,558 172,707 168,393
Net income per share:
Basic net income per share $ 0.60 $ 0.46 $ 0.59
Diluted net income per share $ 0.57 $ 0.43 $ 0.54
Diluted net income per share does not include the effect of the following anti−dilutive common equivalent shares:
Year Ended Year Ended Year Ended
January 30, January 25, January 26,
2005 2004 2003
(In thousands)
Stock options outstanding 13,740 7,906 5,892
Convertible subordinated debentures (equivalent common shares upon
assumed conversion) −− −− 6,472
13,740 7,906 12,364
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