Dollar Tree 2010 Annual Report Download - page 49

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Notes to Consolidated Financial Statements
Employee Stock Purchase Plan
Under the Dollar Tree, Inc. Employee Stock Purchase
Plan (ESPP), the Company is authorized to issue
up to 2,639,063 shares of common stock to eligible
employees. Under the terms of the ESPP, employees can
choose to have up to 10% of their annual base earnings
withheld to purchase the Company’s common stock.
The purchase price of the stock is 85% of the lower of
the price at the beginning or the end of the quarterly
offering period. Under the ESPP, the Company has sold
2,135,177 shares as of January 29, 2011.
The fair value of the employees’ purchase rights is
estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted
average assumptions:
Fiscal
2010
Fiscal
2009
Fiscal
2008
Expected term 3 months 3 months 3 months
Expected volatility 13.2% 17.4 % 25.6 %
Annual dividend yield — — —
Risk free interest rate 0.1% 1.8% 3.8%
The weighted average per share fair value of those
purchase rights granted in 2010, 2009 and 2008 was
$6.59, $5.19 and $3.93, respectively. Total expense
recognized for these purchase rights was $0.9 million,
$0.9 million and $0.8 million in 2010, 2009 and 2008,
respectively.
NOTE 10 – ACQUISITION
On November 15, 2010, the Company completed its
acquisition of 86 Dollar Giant stores, located in the
Canadian provinces of British Columbia, Ontario,
Alberta and Saskatchewan. These stores offer a wide
assortment of quality general merchandise, contem-
porary seasonal goods and everyday consumables, all
priced at $1.25 (CAD) or less. This is the Company’s
fi rst expansion of its retail operations outside of the
United States and provides the Company with a
proven management team and distribution network
as well as additional potential store growth in a new
market.
The Company paid approximately $51.3 million
including the assumption of certain liabilities. The
results of Dollar Giant store operations are included in
the Company’s fi nancial statements since the acquisi-
tion date and did not have a signifi cant impact on the
Company’s operating results in 2010. This acquisition
is immaterial to the Company’s operations as a whole
and therefore no proforma disclosure of fi nancial
information has been presented. The following table
summarizes the preliminary allocation of the purchase
price to the fair value of the assets acquired and
liabilities assumed based on the exchange rate in effect
at the date of purchase.
(in millions)
Cash $ 1.9
Inventory 22.8
Other current assets 3.4
Property and equipment 10.1
Goodwill 39.5
Other intangibles 3.9
Debt (13.8)
Ac counts payable and accrued liabilities (16.5)
$ 51.3
Goodwill related to this acquisition is presented
in the consolidated balance sheet at the exchange rate
in effect at January 29, 2011; however, the opening
balance sheet and resulting goodwill and acquired
intangible assets are recorded based on the exchange
rate in effect at the acquisition date.
DOLLAR TREE, INC. ♦ 2010 Annual Report 47