Staples 2004 Annual Report Download - page 116

STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
NOTE J Stockholders’ Equity
Staples repurchased approximately $502.7 million of common stock in 2004 under the Company’s share repurchase
program, which was announced in March 2004.
On June 4, 2003, the Company issued and sold 13,800,000 shares of its common stock in a public offering for a
purchase price of $18.89 per share, including 1,800,000 shares related to an over-allotment option that was granted to the
underwriters. Upon closing, the Company received net proceeds of $253.0 million. The offering proceeds were used for
working capital and general corporate purposes.
At January 29, 2005, 26.6 million shares of common stock were reserved for issuance under Staples’ 2004 Plan,
401(k) Plan and employee stock purchase plans.
NOTE K Computation of Earnings per Common Share
Earnings per share has been presented below for Staples common stock for the fiscal years ended January 29, 2005,
January 31, 2004 and February 1, 2003 (amounts in thousands, except per share data):
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
January 29, January 31, February 1,
2005 2004 2003
Numerator:
Net income ...................................... $708,388 $490,211 $446,100
Denominator:
Weighted-average common shares outstanding ............. 494,585 483,966 466,768
Effect of dilutive securities:
Employee stock options and restricted stock .............. 11,237 9,525 5,927
Weighted-average shares assuming dilution ................. 505,822 493,491 472,695
Basic earnings per common share ........................ $ 1.43 $ 1.01 $ 0.96
Diluted earnings per common share ...................... $ 1.40 $ 0.99 $ 0.94
Options to purchase shares of common stock are excluded from the calculation of diluted earnings per share when
their inclusion would have an anti-dilutive effect on the calculation. Options to purchase 0.3 million shares, 3.7 million
shares and 15.6 million shares of Staples common stock were excluded from the calculation of diluted earnings per share
for the fiscal years ended January 29, 2005, January 31, 2004 and February 1, 2003, respectively.
NOTE L Segment Reporting
Staples has three reportable segments: North American Retail, North American Delivery and International
Operations, formerly referred to as European Operations. Staples’ North American Retail segment consists of the U.S
and Canadian business units that operate office supply stores. The North American Delivery segment consists of the U.S.
and Canadian business units that sell and deliver office products and services directly to customers, and includes Staples
Business Delivery, Quill and Staples’ Contract operations (Staples National Advantage and Staples Business Advantage).
The International Operations segment consists of operating units that operate office supply stores and that sell and
deliver office products and services directly to customers in 18 countries in Europe and South America.
Staples evaluates performance and allocates resources based on profit or loss from operations before interest and
income taxes, the impact of changes in accounting principles and non-recurring items (‘‘business unit income’’). The
accounting policies of the reportable segments are the same as those described in the summary of significant accounting
policies. Intersegment sales and transfers are recorded at Staples’ cost; therefore, there is no intercompany profit or loss
recognized on these transactions.
Staples’ North American Retail and North American Delivery segments are managed separately because the way
they market products is different, the classes of customers they service may be different, and the distribution methods
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