CarMax 2000 Annual Report Download - page 42

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CIRCUIT CITY STORES, INC. 2000 ANNUAL REPORT
40
(Amounts in thousands Years Ended February 29 or 28
except per share data) 2000 1999 1998
Circuit City Group:
Earnings from continuing operations:
As reported.................................. $327,574 $216,927 $132,710
Pro forma .................................... 319,337 211,025 128,035
Net earnings:
As reported.................................. $197,334 $148,381 $112,074
Pro forma .................................... 189,097 142,479 107,399
Earnings per share from continuing
operations:
Basic
—
as reported....................... $ 1.63 $ 1.09 $ 0.68
Basic
—
pro forma......................... 1.59 1.06 0.65
Diluted
—
as reported ................... $ 1.60 $ 1.08 $ 0.67
Diluted
—
pro forma ..................... 1.56 1.05 0.65
Net earnings per share:
Basic
—
as reported....................... $ 0.98 $ 0.75 $ 0.57
Basic
—
pro forma......................... 0.94 0.72 0.55
Diluted
—
as reported ................... $ 0.96 $ 0.74 $ 0.57
Diluted
—
pro forma ..................... 0.93 0.71 0.54
CarMax Group:
Net earnings (loss):
As reported.................................. $ 256 $ (5,457) $ (7,763)
Pro forma .................................... 75 (5,537) (7,824)
Net earnings (loss) per share:
Basic
—
as reported....................... $ 0.01 $ (0.24) $ (0.35)
Basic
—
pro forma......................... 0.00 (0.24) (0.36)
Diluted
—
as reported ................... $ 0.01 $ (0.24) $ (0.35)
Diluted
—
pro forma ..................... 0.00 (0.24) (0.36)
For the purpose of computing the pro forma amounts indicated above,
the fair value of each option on the date of grant is estimated using the
Black-Scholes option-pricing model. The weighted average assumptions
used in the model are as follows:
2000 1999 1998
Circuit City Group:
Expected dividend yield ............................ 0.2% 0.4% 0.4%
Expected stock volatility............................ 38% 33% 33%
Risk-free interest rates............................... 6% 6% 6%
Expected lives (in years)............................ 5 5 4
CarMax Group:
Expected dividend yield ............................ – – –
Expected stock volatility............................ 62% 50% 50%
Risk-free interest rates............................... 6% 6% 6%
Expected lives (in years)............................ 4 3 3
Using these assumptions in the Black-Scholes model,the weighted aver-
age fair value of options granted for the Circuit City Group is $17 in fiscal
2000,$8 in fiscal 1999 and $7 in fiscal 1998; and for the CarMax Group, $3
in fiscal 2000, $3 in fiscal 1999 and $6 in fiscal 1998.
8. NET EARNINGS (LOSS) PER SHARE
Reconciliations of the numerator and denominator of basic and diluted
net earnings (loss) per share are presented below.
(Amounts in thousands Years Ended February 29 or 28
except per share data) 2000 1999 1998
Circuit City Group:
Weighted average common shares.... 201,345 198,304 196,054
Dilutive potential common shares:
Options........................................ 2,145 1,700 1,684
Restricted stock........................... 831 808 670
Weighted average common shares
and dilutive potential common
shares ......................................... 204,321 200,812 198,408
Earnings from continuing operations
available to common
shareholders................................. $327,574 $216,927 $132,710
Basic earnings per share from
continuing operations................. $ 1.63 $ 1.09 $ 0.68
Diluted earnings per share from
continuing operations................. $ 1.60 $ 1.08 $ 0.67
CarMax Group:
Weighted average common shares..... 23,778 22,604 22,001
Dilutive potential common shares:
Options........................................ 1,814 – –
Restricted stock........................... 196 – –
Weighted average common shares
and dilutive potential
common shares............................ 25,788 22,604 22,001
Net earnings (loss) available to
common shareholders................. $ 256 $ (5,457) $ (7,763)
Basic net earnings (loss) per share.... $ 0.01 $ (0.24) $ (0.35)
Diluted net earnings (loss) per share... $ 0.01 $ (0.24) $ (0.35)
Certain options were not included in the computation of diluted net earn-
ings per share because the options’ exercise prices were greater than the
average market price of the common shares. Options to purchase 2,900
shares of Circuit City Group Stock ranging from $43.03 to $47.53 per
share were outstanding and not included in the calculation at the end of
fiscal 2000; 2,000,000 shares at $29.50 per share at the end of fiscal 1999;
and 3,020,000 shares ranging from $17.74 to $29.50 per share at the end
of fiscal 1998. Options to purchase 1,685,400 shares of CarMax Group
Stock ranging from $3.90 to $16.31 per share were outstanding and not