Dollar Tree 2009 Annual Report Download - page 21

Management’s Discussion And Analysis Of Financial Condition
And Results Of Operations
decreased฀in฀2008฀resulting฀from฀the฀liquidation฀of฀our฀
short-term฀investments฀early฀in฀2008฀due฀to฀market฀
conditions. These amounts were primarily invested
in cash equivalent money market accounts. Partially
offsetting the decrease in net proceeds from the sales of
short-term investments was higher capital expenditures
($57.7฀million฀higher)฀in฀2007฀due฀to฀the฀expansions฀
of the Briar Creek distribution center and corporate
headquarters.
In฀2009,฀net฀cash฀used฀in฀nancing฀activities฀was฀
$161.3฀million฀as฀a฀result฀of฀share฀repurchases฀of฀$190.7฀
million partially offset by stock option exercises and
employee฀stock฀plan฀purchases.฀In฀the฀prior฀year,฀net฀
cash฀provided฀by฀nancing฀activities฀was฀$22.7฀million.฀
This was the result of stock option exercises and
employee stock plan purchases.
In฀scal฀2008,฀nancing฀activities฀provided฀cash฀of฀
$22.7฀million฀as฀a฀result฀of฀stock฀option฀exercises฀and฀
employee฀stock฀plan฀purchases.฀In฀2007,฀net฀cash฀used฀
in฀nancing฀activities฀was฀$389.0฀million.฀This฀was฀the฀
result฀of฀share฀repurchases฀of฀$473.0฀million฀for฀scal฀
2007,฀partially฀offset฀by฀stock฀option฀exercises฀resulting฀
from฀the฀Company’s฀stock฀price฀in฀2008฀being฀higher฀
than it had been in the prior several years.
At฀January฀30,฀2010,฀our฀long-term฀borrowings฀
were฀$267.5฀million฀and฀our฀capital฀lease฀commitments฀
were฀$0.3฀million.฀We฀also฀have฀$121.5฀million฀and฀
$50.0฀million฀Letter฀of฀Credit฀Reimbursement฀and฀
Security Agreements, under which approximately
$101.8฀million฀were฀committed฀to฀letters฀of฀credit฀
issued for routine purchases of imported merchandise
at฀January฀30,฀2010.฀
On฀February฀20,฀2008,฀we฀entered฀into฀a฀ve-year฀
$550.0฀million฀unsecured฀Credit฀Agreement฀(the฀
Agreement).฀The฀Agreement฀provides฀for฀a฀$300.0฀
million฀revolving฀line฀of฀credit,฀including฀up฀to฀$150.0฀
million฀in฀available฀letters฀of฀credit,฀and฀a฀$250.0฀
Net cash provided by operating activities increased
$177.9฀million฀in฀2009฀compared฀to฀2008฀due฀to฀
increased earnings before income taxes, depreciation
and฀amortization฀in฀the฀current฀year.฀Also฀providing฀
more฀cash฀at฀January฀30,฀2010฀was฀better฀inventory฀
management resulting in lower inventory balances per
store and higher accounts payable balances due to the
timing of payments and increased incentive compensa-
tion accruals.
Net cash provided by operating activities increased
$35.8฀million฀in฀2008฀compared฀to฀2007฀due฀to฀
increased earnings before income taxes, depreciation
and฀amortization฀in฀2008฀and฀lower฀prepaid฀rent฀
amounts฀at฀the฀end฀of฀January฀2009.฀February฀2008฀rent฀
payments฀were฀made฀prior฀to฀the฀end฀of฀scal฀2007฀
which฀resulted฀in฀a฀prepaid฀asset฀in฀scal฀2007฀whereas฀
February฀2009฀rent฀was฀paid฀in฀scal฀2009.฀
Net฀cash฀used฀in฀investing฀activities฀increased฀$110.5฀
million in the current year primarily due to short-term
investment activity and increased capital expenditures
in฀2009.฀In฀2008฀we฀liquidated฀our฀short-term฀invest-
ments due to market conditions. The net proceeds
from฀this฀liquidation฀of฀$40.5฀million฀were฀put฀into฀
cash฀equivalent฀money฀market฀accounts.฀In฀2009฀we฀
also฀purchased฀$27.8฀million฀of฀short-term฀investments฀
late in the year. Capital expenditures increased $33.5
million฀in฀2009฀primarily฀due฀to฀the฀purchase฀of฀our฀
new฀distribution฀center฀in฀San฀Bernardino,฀CA.฀We฀
have฀spent฀approximately฀$31.0฀million฀on฀this฀project฀
through฀the฀end฀of฀scal฀2009฀and฀expect฀to฀spend฀
approximately฀$6.0฀million฀in฀the฀rst฀quarter฀of฀2010฀
to฀complete฀the฀project.
Net cash used in investing activities increased
$79.3฀million฀in฀scal฀2008฀compared฀to฀scal฀2007.฀
Net proceeds from the sale of short-term invest-
ments฀were฀higher฀in฀2007฀in฀order฀to฀fund฀share฀
repurchases. Overall, short-term investment activity
The฀following฀table฀compares฀cash-ow฀related฀information฀for฀the฀years฀ended฀January฀30,฀2010,฀January฀31,฀2009,฀
and฀February฀2,฀2008:
(in millions)
Year Ended
January 30, 2010
Year฀Ended฀
January฀31,฀2009
Year฀Ended฀
February฀2,฀2008
Net cash provided by (used in):
Operating activities $ 581.0 $ 403.1฀ $ 367.3฀
฀ Investing฀activities (212.5) (102.0) (22.7)
Financing activities (161.3) ฀22.7฀ (389.0)
฀฀฀DOLLAR฀TREE,฀INC.฀•฀2009฀Annual฀Report฀฀฀19