Dollar Tree 2004 Annual Report Download - page 34

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30 DOLLAR TREE STORES, INC. • 2004 ANNUAL REPORT
Year Ended Year Ended Month Ended Year Ended
January 29, January 31, February 1, December 31,
(In thousands) 2005 2004 2003 2002
Cash flows from operating activities:
Net income (loss) $ 180,250 $177,583 $(10,525) $154,647
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 129,291 107,088 7,625 75,633
Loss on disposal of property and equipment 2,797 4,015 107 1,599
Cumulative effective of change in accounting principle —— 5,285 —
Change in fair value of non-hedging interest rate swaps (1,057) (889) (239) 1,469
Provision for deferred income taxes 15,578 19,681 1,110 16,436
Tax benefit of stock option exercises 2,144 5,620 65 10,696
Other non-cash adjustments to net income 2,113 1,965 59 316
Changes in assets and liabilities increasing
(decreasing) cash and cash equivalents:
Merchandise inventories (89,840) (61,166) (80,774) (61,192)
Prepaid expenses and other current assets (395) (428) (3,689) 6,707
Other assets 929 (1,424) (679) (999)
Accounts payable 9,223 (29,135) 78,217 1,361
Income taxes payable (3,366) 16,910 (4,493) (10,807)
Other current liabilities 15,320 4,655 (12,225) 16,317
Other liabilities 13,502 (745) (3,185) 2,011
Net cash provided by (used in) operating activities 276,489 243,730 (23,341) 214,194
Cash flows from investing activities:
Capital expenditures (181,782) (236,761) (12,243) (143,444)
Purchase of Greenbacks, Inc., net of cash acquired of $1,250 —(100,523) — —
Purchase of short-term investments (465,815) (150,640) (21,745) (246,580)
Proceeds from sales of short-term investments 339,035 208,570 2,000 220,765
Acquisition of favorable lease rights (6,845) (105) — (813)
Investment in Ollie’s Holdings, Inc. —(4,000) — —
Proceeds from the sale of property and equipment —35 — 216
Settlement of merger-related contingencies —1,021 — 6,686
Net cash used in investing activities (315,407) (282,403) (31,988) (163,170)
Cash flows from financing activities:
Proceeds from long-term debt, net of
facility fees of $1,094 in 2004 248,906 39,700 — —
Repayment of long-term debt (148,568) (51,367) — (6,025)
Principal payments under capital lease obligations (5,572) (7,994) (335) (3,971)
Payments for share repurchases (48,611) (38,053) — —
Proceeds from stock issued pursuant to stock-based
compensation plans 15,105 22,175 774 32,476
Net cash provided by (used in) financing activities 61,260 (35,539) 439 22,480
Net increase (decrease) in cash and cash equivalents 22,342 (74,212) (54,890) 73,504
Cash and cash equivalents at beginning of period 84,190 158,402 213,292 139,788
Cash and cash equivalents at end of period $ 106,532 $ 84,190 $158,402 $213,292
Supplemental disclosure of cash flow information:
Cash paid for:
Interest, net of amount capitalized $ 8,117 $ 7,252 $ 195 $ 3,685
Income taxes $ 93,395 $ 70,172 $ 110 $ 82,420
Supplemental disclosure of non-cash investing and financing activities:
The Company purchased equipment under capital lease obligations amounting to $484, $2,134 and $2,177 in the years ended January 29, 2005, January 31,
2004 and December 31, 2002, respectively. The Company did not purchase any equipment under capital leases in the month ended February 1, 2003.
As described in Note 10, the Company acquired Greenbacks, Inc. in 2003. In conjunction with the acquisition, the Company assumed liabilities of $17,886.
As described in Note 12, the Company consolidated its variable-interest entity effective January 1, 2003. As a result, the Company recorded the following on
January 1, 2003: an increase of $128,791 in net property and equipment; an increase of $970 for deferred financing costs in other assets; and an increase of
$140,628 in long-term debt. The cumulative effect of a change in accounting principle represents, net of the tax effect of $3,309, the historical depreciation
related to the distribution center assets and, the historical amortization of the deferred financing costs recognized previously by the variable-interest entity
and the write-off of a deferred rent liability related to the lease.
See accompanying Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS