Dollar Tree 2008 Annual Report Download - page 44

42 DOLLAR TREE, INC. • 2008 ANNUAL REPORT
Notes to Consolidated Financial Statements continued
NOTE 7 - SHAREHOLDERS’ EQUITY
Preferred Stock
The Company is authorized to issue 10,000,000 shares of Preferred Stock, $0.01 par value per share. No preferred
shares are issued and outstanding at January 31, 2009 and February 2, 2008.
Net Income Per Share
The following table sets forth the calculation of basic and diluted net income per share:
Year Ended Year Ended Year Ended
January 31, February 2, February 3,
(in millions, except per share data) 2009 2008 2007
Basic net income per share:
Net income $229.5 $201.3 $192.0
Weighted average number of shares outstanding 90.3 95.9 103.2
Basic net income per share $2.54 $2.10 $1.86
Diluted net income per share:
Net income $229.5 $201.3 $192.0
Weighted average number of shares outstanding 90.3 95.9 103.2
Dilutive effect of stock options and restricted stock
(as determined by applying the treasury stock method) 0.5 0.5 0.6
Weighted average number of shares and
dilutive potential shares outstanding 90.8 96.4 103.8
Diluted net income per share $2.53 $ 2.09 $ 1.85
At January 31, 2009, February 2, 2008, and February 3, 2007, 0.5 million, 0.4 million, and 1.5 million stock
options, respectively are not included in the calculation of the weighted average number of shares and dilutive
potential shares outstanding because their effect would be anti-dilutive.
Share Repurchase Programs
In December 2006, the Company entered into two
agreements with a third party to repurchase approxi-
mately $100.0 million of the Company’s common
shares under an Accelerated Share Repurchase
Agreement.
The first $50.0 million was executed in an
“uncollared” agreement. In this transaction the
Company initially received 1.7 million shares based on
the market price of the Company’s stock of $30.19 as
of the trade date (December 8, 2006). A weighted
average price of $32.17 was calculated using stock
prices from December 16, 2006 – March 8, 2007. This
represented the calculation period for the weighted
average price. Based on this weighted average price,
the Company paid the third party an additional $3.3
million on March 8, 2007 for the 1.7 million shares
delivered under this agreement.
The remaining $50.0 million was executed under
a “collared” agreement. Under this agreement, the
Company initially received 1.5 million shares through
December 15, 2006, representing the minimum num-
ber of shares to be received based on a calculation
using the “cap” or high-end of the price range of the
collar. The number of shares received under the agree-
ment was determined based on the weighted average
market price of the Company’s common stock, net of
a predetermined discount, during the time after the
initial execution date through March 8, 2007. The cal-
culated weighted average market price through March
8, 2007, net of a predetermined discount, as defined in
the “collared” agreement, was $31.97. Therefore, on
March 8, 2007, the Company received an additional
0.1 million shares under the “collared” agreement
resulting in 1.6 million total shares being repurchased
under this agreement.
On March 29, 2007, the Company entered into
an agreement with a third party to repurchase $150.0
million of the Company’s common shares under an
Accelerated Share Repurchase Agreement. The entire
$150.0 million was executed under a “collared” agree-
ment. Under this agreement, the Company initially