Family Dollar 2009 Annual Report Download - page 64

12. Earnings per Share:
Basic net income per common share is computed by dividing net income by the weighted average number of
shares outstanding during each period. Diluted net income per common share gives effect to all securities
representing potential common shares that were dilutive and outstanding during the period. Certain stock options
and performance share rights were excluded from the calculation of diluted net income per common share
because their effects were antidilutive (1.7 million, 4.2 million and 2.4 million shares for fiscal 2009, fiscal 2008
and fiscal 2007, respectively). In the calculation of diluted net income per common share, the denominator
includes the number of additional common shares that would have been outstanding if the Company’s
outstanding dilutive stock options and performance share rights had been exercised.
The following table sets forth the computation of basic and diluted net income per common share:
(in thousands, except per share amounts) 2009 2008 2007
Basic Net Income Per Share:
Net income ..................................................... $291,266 $233,073 $242,854
Weighted average number of shares outstanding ........................ 139,894 140,193 149,141
Net income per common share—basic ............................... $ 2.08 $ 1.66 $ 1.63
Diluted Net Income Per share:
Net income ..................................................... $291,266 $233,073 $242,854
Weighted average number of shares outstanding ........................ 139,894 140,193 149,141
Effect of dilutive securities—stock options ............................ 262 47 318
Effect of dilutive securities—performance share rights .................. 366 254 140
Weighted average shares—diluted ................................... 140,522 140,494 149,599
Net income per common share—diluted .............................. $ 2.07 $ 1.66 $ 1.62
13. Other Comprehensive Income:
As of August 29, 2009, the Company recorded unrealized losses related to its auction rate securities, as discussed
in Note 2 and Note 3. The unrealized losses are shown net of tax in the comprehensive income table below.
Years Ended
(in thousands) August 29, 2009 August 30, 2008 September 1, 2007
Net income .............................. $291,266 $233,073 $242,854
Other comprehensive income (loss):
Unrealized gains (losses) on investment
securities .......................... (4,626) (4,862) —
Reclassification adjustment for (gains)
losses realized in net income .......... 528 — —
Comprehensive income .................... $287,168 $228,211 $242,854
14. Segment Information:
The Company operates a chain of more than 6,600 general merchandise retail discount stores in 44 states, serving
the basic needs of customers primarily in the low to middle income brackets. The stores are supported by nine
distribution centers and one corporate headquarters. All of the stores operate under the Family Dollar name and
are substantially the same in terms of size, merchandise, customers, distribution and operations. The Company
has no franchised locations, foreign operations or other lines of business. The Company manages the business on
the basis of one operating segment and therefore, has only one reportable segment. The following information
56