Dollar Tree 2004 Annual Report Download - page 41

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DOLLAR TREE STORES, INC. • 2004 ANNUAL REPORT 37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 3 – INCOME TAXES
Total income taxes were allocated as follows:
Year Ended Year Ended Month Ended Year Ended
January 29, January 31, February 1, December 31,
2005 2004 2003 2002
Income (loss) from continuing operations $ 107,920 $111,169 $(3,279) $96,812
Cumulative effect of a change in accounting principle —— (3,309) —
Accumulated other comprehensive (income) loss,
marking derivative financial instruments to fair value 424 192 61 (633)
Stockholders’equity, tax benefit on exercise of stock options (2,144) (5,620) (65) (10,696)
$ 106,200 $105,741 $(6,592) $85,483
The provision for income taxes consists of the following:
Year Ended Year Ended Month Ended Year Ended
January 29, January 31, February 1, December 31,
2005 2004 2003 2002
Federal - current $ 75,785 $ 76,017 $(3,778) $69,003
Federal - deferred 15,861 19,465 956 14,141
State - current 16,557 15,471 (611) 11,373
State - deferred (283) 216 154 2,295
$ 107,920 $111,169 $(3,279) $96,812
A reconciliation of the statutory federal income tax rate and the effective rate follows:
Year Ended Year Ended Month Ended Year Ended
January 29, January 31, February 1, December 31,
2005 2004 2003 2002
Statutory tax rate 35.0% 35.0% 35.0% 35.0%
Effect of:
State and local income taxes,
net of federal income tax benefit 3.6 3.5 3.5 3.5
Other, net (1.1) — — —
Effective tax rate 37.5% 38.5% 38.5% 38.5%
The rate reduction in “Other, net”in the above table consists primarily of a one-time tax benefit for the resolution of
a tax uncertainty in 2004.