Big Lots 2007 Annual Report Download - page 145

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 6 — Shareholders’ Equity
Earnings per Share
There were no adjustments required to be made to weighted-average common shares outstanding for purposes
of computing basic and diluted earnings per share and there were no securities outstanding in any year
presented, which were excluded from the computation of earnings per share other than antidilutive employee
and director stock options and nonvested restricted stock awards.
A reconciliation of the number of weighted-average common shares outstanding used in the basic and diluted
earnings per share computations is as follows:
2007 2006 2005
(In thousands)
Weighted-average common shares outstanding:
Basic .......................................................... 101,393 110,336 113,240
Dilutive effect of stock options and restricted common shares ............. 1,149 1,594 437
Diluted ........................................................ 102,542 111,930 113,677
At the end of 2007, 2006, and 2005, stock options outstanding of 1.4 million, 1.1 million, and 5.0 million,
respectively, were excluded from the diluted share calculation because their impact was antidilutive. Antidilutive
options are excluded from the calculation because they decrease the number of diluted shares outstanding under
the treasury stock method. Antidilutive options are generally outstanding options where the exercise price per
share is greater than the weighted-average market price per share for our common shares for each period. The
number of shares of nonvested restricted stock that were antidilutive, as determined under the treasury stock
method, is immaterial for all years presented.
On March 9, 2007, we announced that our Board of Directors authorized the $600.0 million March 2007
Repurchase Program. Common shares acquired through the March 2007 Repurchase Program are held in
treasury and are available to meet obligations under equity compensation plans and for general corporate
purposes. As part of the March 2007 Repurchase Program, we received 2.8 million of our outstanding
common shares during the first quarter of 2007, representing the minimum number of shares purchased under
a $100.0 million guaranteed share repurchase transaction (“GSR”). Upon receipt, the 2.8 million shares were
removed from our basic and diluted weighted-average common shares outstanding. The GSR included a forward
contract indexed to the average market price of our common shares that subjected the GSR to a future share
settlement based on the average share price between the contractually specified price inception date of the
GSR and the final settlement date. The forward contract effectively placed a collar around the minimum and
maximum number of our common shares that we purchased under the GSR. We were not required to make any
additional payments to the counterparty under the GSR. In the fourth quarter of 2007, we received 0.4 million
additional common shares from the counterparty in settlement of the GSR.
On November 30, 2007, we announced that our Board of Directors authorized the $150.0 million November
2007 Repurchase Program commencing with the completion of the March 2007 Repurchase Program. On
December 3, 2007, we completed the March 2007 Repurchase Program. Common shares acquired through
the November Repurchase Program are available to meet obligations under equity compensation plans and for
general corporate purposes.
In addition to the GSR, we repurchased approximately 26.8 million of our outstanding common shares in 2007
in open market transactions at an aggregate cost of $612.5 million under the March 2007 Repurchase Program
and the November 2007 Repurchase Program.
On February 22, 2006, we announced that our Board of Directors authorized the repurchase of up to $150.0
million of our common shares. In accordance with this repurchase program, in 2006 we purchased 9.4 million
common shares having an aggregate cost of $150.0 million with an average price per share of $15.90.