Dollar Tree 2006 Annual Report Download - page 38

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NOTE 3 – INCOME TAXES
Total income taxes were allocated as follows:
Year Ended Year Ended Year Ended
February 3, January 28, January 29,
2007 2006 2005
Income from continuing operations $110.9 $101.3 $107.9
Accumulated other comprehensive income,
marking derivative financial instruments to fair value —0.2 0.4
Stockholders’ equity, tax benefit on exercise of stock options (5.6) (1.2) (2.1)
$105.3 $100.3 $106.2
The provision for income taxes consists of the following:
Year Ended Year Ended Year Ended
February 3, January 28, January 29,
2007 2006 2005
Federal – current $116.2 $108.1 $75.8
State – current 16.6 14.7 16.5
Total current 132.8 122.8 92.3
Federal – deferred (19.1) (20.6) 15.9
State – deferred (2.8) (0.9) (0.3)
Total deferred (21.9) (21.5) 15.6
Provision for income taxes $110.9 $101.3 $107.9
by letters of credit and surety bonds. These invest-
ments consist primarily of government-sponsored
municipal bonds and auction rate securities, similar
to our short-term investments. These investments are
classified as available for sale and are recorded at fair
value, which approximates cost.
Other Current Liabilities
Other current liabilities as of February 3, 2007 and
January 28, 2006 consist of accrued expenses for
the following:
February 3, January 28,
(in millions) 2007 2006
Compensation and benefits $ 43.5 $22.2
Taxes (other than
income taxes) 19.5 15.8
Insurance 26.8 28.1
Other 42.2 33.1
Total other current
liabilities $132.0 $99.2
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents,
other current assets, accounts payable and other cur-
rent liabilities approximate fair value because of the
short maturity of these instruments. The carrying val-
ues of other long-term financial assets and liabilities,
excluding restricted investments, approximate fair
value because they are recorded using discounted
future cash flows or quoted market rates. Short-term
investments and restricted investments are carried at
fair value, which approximates cost, in accordance
with SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities.
The carrying value of the Company’s long-term
debt approximates its fair value because the debt’s
interest rates vary with market interest rates.
It is not practicable to estimate the fair value of
the Company’s outstanding commitments for letters
of credit and surety bonds without unreasonable cost.
36 DOLLAR TREE STORES, INC. • 2006 ANNUAL REPORT