Ross 2015 Annual Report Download - page 52

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50
Taxes on earnings. The Company accounts for income taxes in accordance with Accounting Standards Codification
(“ASC”) 740, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the Company's consolidated financial statements
or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than
changes in the tax law or tax rates. ASC 740 clarifies the criteria that an individual tax position must satisfy for some or all of
the benefits of that position to be recognized in a company’s consolidated financial statements. ASC 740 prescribes a
recognition threshold of more-likely-than-not, and a measurement standard for all tax positions taken or expected to be taken
on a tax return, in order for those tax positions to be recognized in the consolidated financial statements. See Note F.
Treasury stock. The Company records treasury stock at cost. Treasury stock includes shares purchased from employees
for tax withholding purposes related to vesting of restricted stock grants.
Earnings per share (“EPS”). The Company computes and reports both basic EPS and diluted EPS. Basic EPS is
computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted
EPS is computed by dividing net earnings by the sum of the weighted average number of common shares and dilutive
common stock equivalents outstanding during the period. Diluted EPS reflects the total potential dilution that could occur
from outstanding equity plan awards, including unexercised stock options and unvested shares of both performance and
non-performance based awards of restricted stock and restricted stock units.
In fiscal 2015, 2014, and 2013 there were 25,000, 5,100, and 5,700 weighted average shares, respectively, that were
excluded from the calculation of diluted EPS because their effect would have been anti-dilutive for those years.
The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations:
Shares in (000s)
Basic EPS
Effect of dilutive
common stock
equivalents
Diluted EPS
2015
Shares
403,034
3,371
406,405
Amount
$ 2.53
$ (0.02
)
$ 2.51
2014
Shares
413,553
4,524
418,077
Amount
$ 2.24
$ (0.03
)
$ 2.21
2013
Shares
425,761
5,849
431,610
Amount
$ 1.97
$ (0.03
)
$ 1.94