Ross 2006 Annual Report Download - page 55

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37
Total stock-based compensation recognized in the Company’s consolidated Statements of Earnings for fiscal 2006, 2005 and
2004 is as follows (in $000):
Statements of Earnings Classification 2006 2005 2004
Cost of good sold $ 11,475 $ 7,984 $ 6,727
Selling, general and administrative 15,205 8,684 7,318
Total $ 26,680 $ 16,668 $ 14,045
Prior to fiscal 2006, the Company had accounted for share-based compensation costs in accordance with APB No. 25, as
permitted by SFAS No. 123. Had compensation costs for the Company’s stock option plans been determined based on the fair
value at the grant dates for awards under those plans consistent with the methods of SFAS No. 123, the Company’s net earnings
and earnings per share would have been reduced to the pro forma amounts indicated below:
($000, except per share data) 2005 2004
Net earnings $ 199,632 $ 169,902
As reported
Add: Stock-based employee compensation expense
included in reported net earnings, net of tax 10,134 8,553
Deduct: Stock-based employee compensation
expense determined under the fair value based
method for all awards, net of tax (19,793) (17,214)
Net earnings
Pro forma $ 189,973 $ 161,241
Basic earnings per share
As reported $ 1.38 $ 1.15
Pro forma $ 1.32 $ 1.09
Diluted earnings per share
As reported $ 1.36 $ 1.13
Pro forma $ 1.30 $ 1.08
The weighted average fair values per share of stock options granted during fiscal 2006, 2005 and 2004 were $8.52, $7.85 and
$7.49, respectively. The weighted average fair values of the fiscal 2006, 2005 and 2004 employee stock purchase awards were
$7.72, $7.97 and $7.30 per share, respectively.
Note D: Debt
Bank credit facilities. In July 2006, the Company amended its existing $600.0 million revolving credit facility with its banks,
extending the expiration date to July 2011, extending the standby letter of credit sublimit to 50% of the revolving credit, and
changing the interest rate to LIBOR plus 45 basis points. This facility contains a $300.0 million sublimit for issuance of standby
letters of credit, of which $233.6 million was available at February 3, 2007. Interest is payable upon borrowing maturity but no
less than quarterly. Borrowing under this credit facility is subject to the Company maintaining certain interest coverage and
leverage ratios. The Company had no borrowings outstanding under this facility as of February 3, 2007 and was in compliance
with the covenants.