Staples 2007 Annual Report Download - page 128

STAPLES, INC. AND SUBSIDIARIES
Notes To Consolidated Financial Statements (Continued)
NOTE H Employee Benefit Plans (Continued)
Employees’ 401(k) Savings Plan
Staples’ Employees’ 401(k) Savings Plan (the ‘‘401(k) Plan’’) is available to all United States based employees of
Staples who meet minimum age and length of service requirements. Company contributions are based upon a matching
formula applied to employee contributions that are made in the form of Company common stock and vest ratably over a
five year period. The Supplemental Executive Retirement Plan (the ‘‘SERP Plan’’), which is similar in many respects to
the 401(k) Plan, is available to certain Company executives and other highly compensated employees, whose contribu-
tions to the 401(k) Plan are limited, and allows such individuals to supplement their contributions to the 401(k) Plan by
making pre-tax contributions to the SERP Plan. Company contributions to the SERP Plan are based on a similar
matching formula and vesting period; however, beginning in October 2004, such contributions were made in cash rather
than in Company common stock.
At February 2, 2008, 52.4 million shares of common stock were reserved for issuance under Staples’ 2004 Plan,
401(k) Plan and employee stock purchase plans.
NOTE I Stockholders’ Equity
In fiscal 2007, the Company repurchased 31.6 million shares of the Company’s common stock for a total purchase
price (including commissions) of $750.0 million under the Company’s 2005 and 2007 share repurchase programs. The
2007 share repurchase program replaced the 2005 $1.5 billion share repurchase program (the ‘‘2005 Share Repurchase
Program’’) and went into effect during the second quarter of 2007. The 2007 share repurchase program allows for the
repurchase of $1.5 billion of Staples common stock and has no expiration date. 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.
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.
NOTE J Computation of Earnings per Common Share
Earnings per share has been presented below for Staples common stock for fiscal years 2007, 2006 and 2005
(amounts in thousands, except per share data):
2007 2006 2005
Numerator:
Net income ................................................... $995,670 $973,677 $784,117
Denominator:
Weighted-average common shares outstanding .......................... 704,828 720,528 731,622
Effect of dilutive securities:
Employee stock options and restricted shares .......................... 15,374 19,150 18,794
Weighted-average shares assuming dilution .............................. 720,202 739,678 750,416
Basic earnings per common share ..................................... $ 1.41 $ 1.35 $ 1.07
Diluted earnings per common share ................................... $ 1.38 $ 1.32 $ 1.04
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 9.8 million shares, 0.1 million
shares and 0.2 million shares of Staples common stock were excluded from the calculation of diluted earnings per share
for fiscal 2007, 2006 and 2005, 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
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