Staples 2006 Annual Report Download - page 125

STAPLES, INC. AND SUBSIDIARIES
Notes To Consolidated Financial Statements (Continued)
C-21
NOTE H Employee Benefit Plans (Continued)
In connection with these plans, Staples included approximately $14.8 million, $14.6 million and $13.4 million in
expense for fiscal years 2006, 2005 and 2004.
NOTE I Stockholders’ Equity
In 2006, the Company repurchased 30.3 million shares of the Company’s common stock for a total purchase price
(including commissions) of $749.9 million under the Company’s share repurchase program, which was announced in
2004 and amended in the third quarter of 2005. In 2005, the Company repurchased 30.1 million shares of the Company’s
common stock for a total purchase price (including commissions) of $649.6 million. Under the original program, the
Company was authorized to repurchase up to $1.0 billion of Staples common stock during fiscal years 2004 and 2005.
Under the new program, the Board of Directors authorized the Company to repurchase up to an additional $1.5 billion
of Staples common stock through February 2, 2008 following the completion of the Company’s $1.0 billion repurchase
program. In 2004, the Company repurchased 26.1 million shares of the Company’s common stock for a total purchase
price (including commissions) of $502.7 million.
At February 3, 2007, 60.6 million shares of common stock were reserved for issuance under Staples’ 2004 Plan,
401(k) Plan and employee stock purchase plans.
NOTE J Computation of Earnings per Common Share
Earning per share has been presented below for Staples common stock for fiscal years 2006, 2005 and 2004
(amounts in thousands, except per share data):
2006 2005 2004
Numerator:
Net income .............................................................. $ 973,677 $ 784,117 $ 664,575
Denominator:
Weighted-average common shares outstanding............................... 720,528 731,622 741,878
Effect of dilutive securities:
Employee stock options and restricted stock.................................. 19,150 18,794 20,328
Weighted-average shares assuming dilution.................................... 739,678 750,416 762,206
Basic earnings per common share............................................. $ 1.35 $ 1.07 $ 0.90
Diluted earnings per common share........................................... $ 1.32 $ 1.04 $ 0.87
Options to purchase shares of common stock are excluded from the calculation of diluted earnings per share when
their inclusion would have an anti-dilutive effect on the calculation. Options to purchase 0.1 million shares, 0.2 million
shares and 0.4 million shares of Staples common stock were excluded from the calculation of diluted earnings per share
for fiscal 2006, 2005 and 2004, respectively.
NOTE K Segment Reporting
Staples has three reportable segments: North American Retail, North American Delivery and International
Operations. Staples’ North American Retail segment consists of the U.S and Canadian business units that operate office
supply stores. The North American Delivery segment consists of the U.S. and Canadian business units that sell and
deliver office products and services directly to customers, and includes Staples Business Delivery, Quill and Staples’
Contract operations (Staples National Advantage and Staples Business Advantage). The International Operations
segment consists of operating units that operate office supply stores and that sell and deliver office products and services
directly to customers in 19 countries in Europe, South America and Asia.
Staples evaluates performance and allocates resources based on profit or loss from operations before interest and
income taxes, the impact of changes in accounting principles and non-recurring items (“business unit income”). The