O'Reilly Auto Parts 2000 Annual Report Download - page 32

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2000 AR
30
NOTE 11 – STOCK OPTION PLANS
continued
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting
restrictions and are fully transferable. In addition, option valuation
models require the input of highly subjective assumptions, including
the expected stock price volatility. Because the Company’s stock
options have characteristics significantly different from those of traded
options and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management’s
opinion, the existing model does not necessarily provide a reliable
single measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options’ vesting period.
The effects of applying SFAS No. 123 for pro forma disclosures are
not likely to be representative of the effects on reported net
income or losses for future years. The Company’s pro forma informa-
tion follows:
(In thousands, except per share data)
2000 1999 1998
Pro forma net income $ 48,177 $ 43,501 $ 29,242
Pro forma basic net
income per share $ 0.94 $ 0.89 $ 0.69
Pro forma net income
per share – assuming
dilution $ 0.93 $ 0.88 $ 0.67
NOTE 12 – INCOME PER COMMON SHARE
The following table sets forth the computation of basic and diluted
income per common share:
(In thousands, except per share data)
Years ended December 31, 2000 1999 1998
Numerator (basic and
diluted):
Net income $ 51,708 $ 45,639 $ 30,772
Denominator:
Denominator for basic
income per common
share – weighted-
average shares 51,168 48,674 42,476
Effect of stock
options (Note 11) 560 1,041 728
Denominator for diluted
income per common
share – Adjusted
weighted-average
shares and assumed
conversion 51,728 49,715 43,204
Basic net income
per common share $ 1.01 $ 0.94 $ 0.72
Net income per common
share – assuming
dilution $ 1.00 $ 0.92 $ 0.71
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS continued …
O’REILLY AUTOMOTIVE