Dollar Tree 2004 Annual Report Download - page 42

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38 DOLLAR TREE STORES, INC. • 2004 ANNUAL REPORT
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities
are classified on the accompanying consolidated balance sheets based on the classification of the underlying asset or
liability. Significant components of the Company’s net deferred tax assets (liabilities) follows:
Year Ended Year Ended
January 29, January 31,
2005 2004
Deferred tax assets:
Accrued expenses and other liabilities principally due to
differences in the timing of deductions for reserves $ 14,744 $ 16,836
Other 169 1,092
Total deferred tax assets 14,913 17,928
Deferred tax liabilities:
Intangible assets due to differences in amortization methods and lives (6,963) (6,169)
Deferred compensation primarily due to timing of contributions to the profit sharing plan (855) (1,087)
Property and equipment due to difference in depreciation and amortization methods and lives (39,435) (27,864)
Other (1,663) (809)
Total deferred tax liabilities (48,916) (35,929)
Net deferred tax liability $ (34,003) $(18,001)
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that
some portion or all of the deferred taxes will not be realized. Based upon the availability of carrybacks of future
deductible amounts to the past two years’taxable income and management’s projections for future taxable income over
the periods in which the deferred tax assets are deductible, management believes it is more likely than not the existing
deductible temporary differences will reverse during periods in which carrybacks are available or in which the Company
generates net taxable income. However, there can be no assurance that the Company will generate any income or any
specific level of continuing income in future years.
The above future minimum lease payments include
amounts for leases that were signed prior to January 29,
2005 for stores that were not open as of January 29, 2005.
Minimum rental payments for operating leases do not
include contingent rentals that may be paid under certain
store leases based on a percentage of sales in excess of
stipulated amounts. Future minimum lease payments have
not been reduced by expected future minimum sublease
rentals of $1,239 under operating leases.
NOTE 4 – COMMITMENTS AND
CONTINGENCIES
Operating Lease Commitments
Future minimum lease payments under noncancelable
store, distribution center and former corporate head-
quarters operating leases (including leases with related
parties) are as follows:
2005 $216,874
2006 188,638
2007 156,280
2008 119,189
2009 83,555
Thereafter 150,413
Total minimum lease payments $914,949
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)