Dollar Tree 2007 Annual Report Download - page 22

20 DOLLAR TREE, INC. • 2007 ANNUAL REPORT
Management’s Discussion & Analysis of Financial Condition and Results of Operations
In December 2006, we entered into two agree-
ments with a third party to repurchase approximately
$100.0 million of our common shares under an
Accelerated Share Repurchase Agreement.
The first $50.0 million was executed in an “uncol-
lared” agreement. In this transaction we initially
received 1.7 million shares based on the market price
of our stock of $30.19 as of the trade date (December
8, 2006). A weighted average price of $32.17 was cal-
culated using stock prices from December 16, 2006 –
March 8, 2007. This represented the calculation peri-
od for the weighted average price. Based on this
weighted average price, we paid the third party an
additional $3.3 million on March 8, 2007 for the 1.7
million shares delivered under this agreement.
The remaining $50.0 million was executed under
a “collared” agreement. Under this agreement, we ini-
tially received 1.5 million shares through December
15, 2006, representing the minimum number of shares
to be received based on a calculation using the “cap”
or high-end of the price range of the collar. The num-
ber of shares received under the agreement was deter-
mined based on the weighted average market price of
our common stock, net of a predetermined discount,
during the time after the initial execution date
through March 8, 2007. The calculated weighted aver-
age market price through March 8, 2007, net of a pre-
determined discount, as defined in the “collared”
agreement, was $31.97. Therefore, on March 8, 2007,
we received an additional 0.1 million shares under the
“collared” agreement resulting in 1.6 million total
shares being repurchased under this agreement.
On March 29, 2007, we entered into an agree-
ment with a third party to repurchase $150.0 million
of our common shares under an Accelerated Share
Repurchase Agreement. The entire $150.0 million was
executed under a “collared” agreement. Under this
agreement, we initially received 3.6 million shares
through April 12, 2007, representing the minimum
number of shares to be received based on a calculation
using the “cap” or high-end of the price range of the
collar. The number of shares was determined based on
the weighted average market price of our common
stock during the four months after the initial execu-
tion date. The calculated weighted average market
price through July 30, 2007, net of a predetermined
discount, as defined in the “collared” agreement, was
$40.78. Therefore, on July 30, 2007, we received an
additional 0.1 million shares under the “collared”
agreement resulting in 3.7 million total shares being
repurchased under this agreement.
On August 30, 2007, we entered into an agree-
ment with a third party to repurchase $100.0 million
of our common shares under an Accelerated Share
Repurchase Agreement. The entire $100.0 million was
executed under a “collared” agreement. Under this
agreement, we initially received 2.1 million shares
through September 10, 2007, representing the mini-
mum number of shares to be received based on a
calculation using the “cap” or high-end of the price
range of the collar. The number of shares received
under the agreement was determined based on the
weighted average market price of our common stock,
net of a predetermined discount, during the time after
the initial execution date through a period of up to
four and one half months. The contract terminated on
October 22, 2007 and the weighted average price
through that date was $41.16. Therefore, on October
22, 2007, we received an additional 0.3 million shares
resulting in 2.4 million total shares repurchased under
this agreement.
We repurchased approximately 12.8 million
shares for approximately $473.0 million in fiscal 2007,
approximately 8.8 million shares for approximately
$248.2 million in fiscal 2006 and approximately 7.0
million shares for approximately $180.4 million in
fiscal 2005. At February 2, 2008, the Company had
approximately $453.7 million remaining under Board
authorization.
Funding Requirements
Overview
We expect our cash needs for opening new stores and
expanding existing stores in fiscal 2008 to total
approximately $176.0 million, which includes capital
expenditures, initial inventory and pre-opening costs.
Our estimated capital expenditures for fiscal 2008 are
between $155.0 and $165.0 million, including
planned expenditures for our new and expanded
stores, the addition of freezers and coolers to approxi-
mately 150 stores and completion of the expansion to
our home office and data center in Chesapeake, VA.
We believe that we can adequately fund our working
capital requirements and planned capital expenditures
for the next few years from net cash provided by
operations and potential borrowings under our exist-
ing credit facility.