Sears 2010 Annual Report Download - page 79

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
NOTE 8—EARNINGS PER SHARE
The following tables set forth the components used to calculate basic and diluted earnings per share.
millions except earnings per share 2010 2009 2008
Basic weighted average shares ................................. 111.5 117.8 127.0
Dilutive effect of restricted stock and stock options ................ 0.2 0.1 —
Diluted weighted average shares ............................... 111.7 117.9 127.0
Net income attributable to Holdings’ shareholders ................. $ 133 $ 235 $ 53
Earnings per share attributable to Holdings’ shareholders
Basic ................................................. $ 1.19 $ 1.99 $ 0.42
Diluted ............................................... $ 1.19 $ 1.99 $ 0.42
NOTE 9—EQUITY
Stock-based Compensation
We account for stock-based compensation using the fair value method in accordance with accounting
standards regarding share-based payment transactions. We recorded $9 million, $10 million, and $1 million in
total compensation expense relative to stock-based compensation arrangements during 2010, 2009, and 2008,
respectively. At January 29, 2011, we had $13 million in total compensation cost related to nonvested awards,
which is expected to be recognized over approximately the next 3 years.
We do not currently have an employee stock option plan and at January 29, 2011, there are no outstanding
options. Changes in employee stock options for 2009 and 2008 were as follows:
2009 2008
(Shares in thousands) Shares
Weighted-
Average
Exercise
Price Shares
Weighted-
Average
Exercise
Price
Beginning of year balance .......................... 350 $112.90 350 $112.90
Granted ......................................... — — — —
Exercised ....................................... (150) 88.62 — —
Cancelled/Forfeited ............................... (200) 131.11 — —
End of year balance ........................... — $ — 350 $112.90
Exercisable ...................................... 350 $112.90
Fair value of options granted during the year ........... $ —
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