Big Lots 2009 Annual Report Download - page 174

58
BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
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 non-vested restricted stock awards. At the end of 2009, 2008, and 2007, stock options
outstanding of 2.9 million, 2.0 million, and 1.4 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 non-vested restricted stock that
were antidilutive, as determined under the treasury stock method, is immaterial for all years presented.
A reconciliation of the number of weighted-average common shares outstanding used in the basic and diluted
earnings per share computations is as follows:
2009 2008 2007
(In thousands)
Weighted-average common shares outstanding:
Basic......................................................... 81,619 81,111 101,393
Dilutive effect of stock options and restricted common shares . . . . . . . . . . . . 1,062 965 1,149
Diluted ....................................................... 82,681 82,076 102,542
Share Repurchase Programs
On December 4, 2009, we announced that our Board of Directors authorized the repurchase of up to $150.0 million
of our common shares, which commenced immediately and will continue until exhausted. The purchases may
be made from time to time in the open market and/or in privately negotiated transactions at our discretion,
subject to market conditions and other factors. No shares were repurchased under this program in 2009. See note
14, “Subsequent Events” for a discussion of the March 2, 2010 increase in the 2010 Repurchase Program from
$150.0 million to $400.0 million and the March 10, 2010 $150.0 million accelerated share repurchase transaction.
On March 9, 2007, we announced that our Board of Directors authorized a $600.0 million share repurchase
program (“March 2007 Repurchase Program”). On November 30, 2007, we announced that our Board of
Directors authorized the $150.0 million November 2007 share repurchase program commencing with the
completion of the March 2007 Repurchase Program, which we completed on December 3, 2007. As part of
the March 2007 Repurchase Program, we received 2.8 million of our outstanding common shares during the
first fiscal 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 fiscal quarter of 2007, we received 0.4 million additional
common shares from the counterparty in settlement of the GSR. 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 share
repurchase program.
Note 6 — Shareholders’ Equity