Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Note F – Earnings Per Share

The following table represents the calculation of net earnings (loss) per common share:

	First Quarter
(In thousands, except per share amounts)	2012		2011
Basic Earnings Per Share
Numerator:
Income (loss) available to common shareholders	$	41,287	$	(14,627)
Assumed distribution to participating securities		(2,331)		—
Assumed undistributed earnings available to common stock		38,956		(14,627)
Denominator:
Weighted-average shares outstanding		278,552		276,986
Basic earnings (loss) per common share	$	0.14	$	(0.05)
Diluted Earnings Per Share
Numerator:
Net earnings (loss) attributable to Office Depot, Inc.	$	49,503	$	(5,414)
Denominator:
Weighted-average shares outstanding		278,552		276,986
Effect of dilutive securities:
Stock options and restricted stock		4,765		6,556
Redeemable preferred stock		75,546		73,703
Diluted weighted-average shares outstanding		358,863		357,245
Diluted earnings per common share	$	0.14		N/A

Basic earnings per share is computed after consideration of preferred stock dividends. Shares of the redeemable preferred stock have equal dividend participation rights with common stock. The company has never paid a dividend on common stock, but the participation provisions require application of the two-class method for computing earnings per share. In periods of sufficient earnings, this method assumes an allocation of undistributed earnings to both participating stock classes. For the first quarter of 2012, Basic EPS for common shares is $0.14, all undistributed. Basic EPS for the redeemable preferred shares is also $0.14, composed of $0.11 distributed and $0.03 assumed distributed under the two-class method.

The diluted EPS calculation under the two-class method includes two tests to determine the most dilutive. These tests, and the diluted EPS calculation which includes the dilutive impact of stock options and restricted stock under the treasury stock method and redeemable preferred stock under the if-converted method, result in diluted EPS for the first quarter of 2012 of $0.14. The diluted EPS calculation for the first quarter of 2011 was antidulitive. The share amounts for that period have been presented for informational purposes.

Awards of options and nonvested shares representing approximately 12 million additional shares of common stock were outstanding for the first quarter of 2012, and 10 million for the first quarter of 2011, but were not included in the computation of diluted earnings per share because their effect would have been antidilutive. For purposes of calculating weighted average shares, no tax benefits have been assumed in jurisdictions where deferred tax valuation allowances have been recorded.