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APPENDIX B
STAPLES B-3
STAPLES, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and
Results of Operations (continued)
52 Weeks Ended
February 1, 2014
GAAP
Restructuring
charges Non-GAAP
Operating income $1,177,501 $64,085 $1,241,586
Interest and other expense, net (114,696) — (114,696)
Income from continuing operations before income taxes 1,062,805 64,085 1,126,890
Income tax expense 355,801 10,481 366,282
Income from continuing operations $707,004 $53,604 $760,608
Effective tax rate 33.5% 32.5%
Diluted earnings per common share from continuing operations $1.07 $1.16
53 Weeks Ended
February 2, 2013
GAAP
Impairment
of goodwill
& long-lived
assets
Restructuring
charges
Accelerated
trade-name
amortization
Loss on early
extinguishment
of debt
Termination
of JV
arrangement
in India Non-GAAP
Operating income $510,065 $810,996 $207,016 $20,049 $— $— $1,548,126
Interest and other expense, net (244,642) — — — 56,958 26,211 (161,473)
Income from continuing
operations before income taxes 265,423 1,386,653
Income taxes 426,270 426,270
Adjustments — 24,390
Adjusted income taxes 426,270 450,660
(Loss) income from
continuing operations (160,847) 935,993
Loss attributed to
noncontrolling interests (119) (119)
(Loss) income from
continuing operations
attributed to Staples, Inc. $(160,728) $936,112
Effective tax rate 160.6% 32.5%
Per share (loss) income
from continuing operations
attributed to Staples, Inc:
Basic earnings per
common share $(0.24) $1.40
Diluted earnings per
common share $(0.24) $1.39
Weighted average common
shares outstanding 669,479 669,479
Effect of dilutive securities — 6,526
Weighted average common
shares outstanding
assuming dilution 669,479 676,005
CONSOLIDATED PERFORMANCE
2014 Compared with 2013
Sales: Sales for 2014 were $22.49 billion, a decrease of
2.7% from 2013. The decrease reflects a 4% decline in
comparable store sales in North America, a $309.7 million
unfavorable impact from changes in foreign exchange rates,
an approximate 1% negative impact from store closures in
North America, and to a lesser extent, ongoing weakness in
our European businesses. These declines were partly offset
by a 2.8% sales increase in North American Commercial and