Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 185)			40
Consolidated Income Statements			42
Consolidated Statements of Comprehensive Income			43
Consolidated Balance Sheets			44
Consolidated Statements of Shareholders’ Equity			45
Consolidated Statements of Cash Flows			46
Notes to Consolidated Financial Statements			47
Note 1 - Summary of Significant Accounting Policies			47
Note 2 - Supplemental Balance Sheet Information			51
Note 3 - Income Taxes			52
Note 4 - Commitments and Contingencies			54
Note 5 - Long-Term Debt			57
Note 6 - Leases			59
Note 7 - Fair Value Measurements			60
Note 8 - Shareholders’ Equity			61
Note 9 - Employee Benefit Plans			61
Note 10 - Stock-Based Compensation Plans			62
Note 11 - Segments and Disaggregated Revenue			64

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Dollar Tree, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Dollar Tree, Inc. and subsidiaries (the Company) as of January 29, 2022 and January 30, 2021, the related consolidated income statements, and statements of comprehensive income, shareholders’ equity, and cash flows for each of the years in the three‑year period ended January 29, 2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of January 29, 2022 and January 30, 2021, and the results of its operations and its cash flows for each of the years in the three‑year period ended January 29, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 29, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 15, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Estimated self‑insurance liability

As discussed in Note 1 to the consolidated financial statements, the Company considers actuarial assumptions to estimate its self‑insurance liability. As of January 29, 2022, the Company recorded an estimated liability of $317 million.

We identified the evaluation of the estimated self‑insurance liability as a critical audit matter. The estimation process involves auditor judgment and actuarial expertise to evaluate the actuarial methods and assumptions that are used to estimate future claim payments. Specifically, the evaluation includes the assumptions related to the loss development factors and expected loss rates which are primarily driven by historical claims paid and incurred data.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s self‑insurance liability estimation process. This included controls related to (1) the selection of the actuarial methods, and the development of the loss development factors and expected loss rates used to calculate the liability, and (2) the completeness and accuracy of historical claims paid and incurred data. We assessed the Company’s estimate of the liability by testing a selection of certain data, including claims data, utilized by the Company’s actuary by comparing it to relevant documentation. We involved actuarial professionals with specialized skills and knowledge, who assisted in:

• assessing the Company’s actuarial methods by comparing them to generally accepted actuarial methodologies; and

• evaluating the Company’s actuarial estimates and assumptions related to the loss development factors and expected loss rates, by comparing them to generally accepted actuarial methodologies and the Company’s historical data and trends.

/s/ KPMG LLP

We have served as the Company’s auditor since 1987.

Norfolk, Virginia

March 15, 2022

DOLLAR TREE, INC.

CONSOLIDATED INCOME STATEMENTS

						Year Ended
						January 29,						January 30,						February 1,
(in millions, except per share data)						2022						2021						2020
Net sales						$	26,309.8					$	25,508.4					$	23,610.8
Other revenue						11.4						0.9						—
Total revenue						26,321.2						25,509.3						23,610.8
Cost of sales						18,583.9						17,721.0						16,570.1
Selling, general and administrative expenses, excluding Goodwill impairment						5,925.9						5,900.4						5,465.5
Goodwill impairment						—						—						313.0
Selling, general and administrative expenses						5,925.9						5,900.4						5,778.5
Operating income						1,811.4						1,887.9						1,262.2
Interest expense, net						178.9						147.3						162.1
Other expense, net						0.3						0.8						1.4
Income before income taxes						1,632.2						1,739.8						1,098.7
Provision for income taxes						304.3						397.9						271.7
Net income						$	1,327.9					$	1,341.9					$	827.0
Basic net income per share						$	5.83					$	5.68					$	3.49
Diluted net income per share						$	5.80					$	5.65					$	3.47

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

						Year Ended
						January 29,						January 30,						February 1,
(in millions)						2022						2021						2020
Net income						$	1,327.9					$	1,341.9					$	827.0
Foreign currency translation adjustments						—						4.6						(1.5)
Total comprehensive income						$	1,327.9					$	1,346.5					$	825.5

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)						January 29, 2022						January 30, 2021
ASSETS
Current assets:
Cash and cash equivalents						$	984.9					$	1,416.7
Merchandise inventories						4,367.3						3,427.0
Other current assets						257.0						207.1
Total current assets						5,609.2						5,050.8
Property, plant and equipment, net of accumulated depreciation of $5,363.8 and $4,765.0, respectively						4,477.3						4,116.3
Restricted cash						53.4						46.9
Operating lease right-of-use assets						6,425.3						6,324.1
Goodwill						1,984.4						1,984.4
Trade name intangible asset						3,100.0						3,100.0
Deferred tax asset						20.3						23.2
Other assets						51.9						50.3
Total assets						$	21,721.8					$	20,696.0
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of operating lease liabilities						$	1,407.8					$	1,348.2
Accounts payable						1,884.2						1,480.5
Income taxes payable						82.6						86.3
Other current liabilities						802.0						815.3
Total current liabilities						4,176.6						3,730.3
Long-term debt, net						3,417.0						3,226.2
Operating lease liabilities, long-term						5,145.5						5,065.5
Deferred income taxes, net						987.2						1,013.5
Income taxes payable, long-term						20.9						22.6
Other liabilities						256.1						352.6
Total liabilities						14,003.3						13,410.7
Commitments and contingencies (Note 4)
Shareholders’ equity:
Common stock, par value $0.01; 600,000,000 shares authorized, 225,100,198 and 233,383,199 shares issued and outstanding at January 29, 2022 and January 30, 2021, respectively						2.2						2.3
Additional paid-in capital						1,243.9						2,138.5
Accumulated other comprehensive loss						(35.2)						(35.2)
Retained earnings						6,507.6						5,179.7
Total shareholders’ equity						7,718.5						7,285.3
Total liabilities and shareholders’ equity						$	21,721.8					$	20,696.0

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

YEARS ENDED JANUARY 29, 2022, JANUARY 30, 2021, AND FEBRUARY 1, 2020

(in millions)						Common Stock Shares						Common Stock						Additional Paid-in Capital						Accumulated Other Comprehensive Loss						Retained Earnings						Shareholders’ Equity
Balance at February 2, 2019						238.1						$	2.4					$	2,602.7					$	(38.3)					$	3,076.1					$	5,642.9
Cumulative effect of adopted accounting standards, net						—						—						—						—						(65.3)						(65.3)
Net income						—						—						—						—						827.0						827.0
Total other comprehensive loss						—						—						—						(1.5)						—						(1.5)
Issuance of stock under Employee Stock Purchase Plan						0.1						—						9.4						—						—						9.4
Exercise of stock options						—						—						5.8						—						—						5.8
Stock-based compensation, net						0.4						—						36.5						—						—						36.5
Repurchase of stock						(1.9)						—						(200.0)						—						—						(200.0)
Balance at February 1, 2020						236.7						2.4						2,454.4						(39.8)						3,837.8						6,254.8
Net income						—						—						—						—						1,341.9						1,341.9
Total other comprehensive income						—						—						—						4.6						—						4.6
Issuance of stock under Employee Stock Purchase Plan						0.2						—						10.0						—						—						10.0
Exercise of stock options						0.1						—						7.0						—						—						7.0
Stock-based compensation, net						0.4						—						67.0						—						—						67.0
Repurchase of stock						(4.0)						(0.1)						(399.9)						—						—						(400.0)
Balance at January 30, 2021						233.4						2.3						2,138.5						(35.2)						5,179.7						7,285.3
Net income						—						—						—						—						1,327.9						1,327.9
Issuance of stock under Employee Stock Purchase Plan						0.1						—						10.4						—						—						10.4
Exercise of stock options						0.1						—						7.4						—						—						7.4
Stock-based compensation, net						0.7						—						37.5						—						—						37.5
Repurchase of stock						(9.2)						(0.1)						(949.9)						—						—						(950.0)
Balance at January 29, 2022						225.1						$	2.2					$	1,243.9					$	(35.2)					$	6,507.6					$	7,718.5

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

						Year Ended
						January 29,						January 30,						February 1,
(in millions)						2022						2021						2020
Cash flows from operating activities:
Net income						$	1,327.9					$	1,341.9					$	827.0
Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill impairment						—						—						313.0
Depreciation and amortization						716.0						686.6						645.4
Provision for deferred income taxes						(23.2)						30.7						9.1
Stock-based compensation expense						79.9						83.9						61.4
Amortization of debt discount and debt-issuance costs						8.9						4.0						6.9
Other non-cash adjustments to net income						11.2						19.0						24.5
Loss on debt extinguishment						43.8						—						—
Changes in operating assets and liabilities:
Merchandise inventories						(940.4)						97.1						13.6
Other current assets						(49.9)						1.7						(8.4)
Other assets						(2.6)						(7.0)						8.2
Accounts payable						403.8						142.6						(79.8)
Income taxes payable						(3.7)						23.6						2.7
Other current liabilities						(36.5)						203.4						24.3
Other liabilities						(98.2)						88.2						(14.6)
Operating lease right-of-use assets and liabilities, net						(5.5)						0.6						36.5
Net cash provided by operating activities						1,431.5						2,716.3						1,869.8
Cash flows from investing activities:
Capital expenditures						(1,021.2)						(898.8)						(1,034.8)
Proceeds from governmental grant						2.9						—						16.5
Proceeds from (payments for) fixed asset disposition						(1.6)						9.1						(1.9)
Net cash used in investing activities						(1,019.9)						(889.7)						(1,020.2)
Cash flows from financing activities:
Proceeds from long-term debt, net of discount						1,197.4						—						—
Principal payments for long-term debt						(1,000.0)						(550.0)						(500.0)
Debt-issuance and debt extinguishment costs						(59.3)						—						—
Proceeds from revolving credit facility						—						750.0						—
Repayments of revolving credit facility						—						(750.0)						—
Proceeds from stock issued pursuant to stock-based compensation plans						17.8						17.0						15.2
Cash paid for taxes on exercises/vesting of stock-based compensation						(42.4)						(16.9)						(25.0)
Payments for repurchase of stock						(950.0)						(400.0)						(200.0)
Net cash used in financing activities						(836.5)						(949.9)						(709.8)
Effect of exchange rate changes on cash, cash equivalents and restricted cash						(0.4)						0.9						(0.5)
Net increase (decrease) in cash, cash equivalents and restricted cash						(425.3)						877.6						139.3
Cash, cash equivalents and restricted cash at beginning of year						1,463.6						586.0						446.7
Cash, cash equivalents and restricted cash at end of year						$	1,038.3					$	1,463.6					$	586.0
Supplemental disclosure of cash flow information:
Cash paid for:
Interest, net of amounts capitalized						$	176.1					$	152.9					$	170.2
Income taxes						$	363.4					$	357.7					$	266.8
Non-cash transactions:
Right-of-use assets obtained in exchange for new operating lease liabilities						$	1,495.3					$	1,440.2					$	1,286.1
Accrued capital expenditures						$	68.3					$	44.9					$	51.1

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies

Description of Business

Unless otherwise stated, references to “we,” “us,” and “our” in this annual report on Form 10-K refer to Dollar Tree, Inc. and its direct and indirect subsidiaries on a consolidated basis.

We are a leading operator of discount retail stores in the United States and Canada. Below are those accounting policies that we consider to be significant.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the financial statements of Dollar Tree, Inc., and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation.

Segment Information

At January 29, 2022, we operate more than 16,000 retail discount stores in 48 states and five Canadian provinces. Our operations are conducted in two reporting business segments: Dollar Tree and Family Dollar. We define our segments as those operations whose results our chief operating decision maker (“CODM”) regularly reviews to analyze performance and allocate resources.

The Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the fixed price point of $1.25. The Dollar Tree segment includes our operations under the “Dollar Tree” and “Dollar Tree Canada” brands, 15 distribution centers in the United States and two distribution centers in Canada.

The Family Dollar segment operates a chain of general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores. The Family Dollar segment consists of our operations under the “Family Dollar” brand and 11 distribution centers.

Refer to Note 11 for additional information regarding our operating segments.

Foreign Currency

The functional currencies of certain of our international subsidiaries are the local currencies of the countries in which the subsidiaries are located. Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the consolidated balance sheet date. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component of shareholders’ equity in accumulated other comprehensive loss. Gains and losses from foreign currency transactions, which are included in “Other expense, net” have not been significant.

Fiscal Year

Our fiscal year is a 52-week or 53-week period ending on the Saturday closest to January 31. References to “2021” or “fiscal 2021,” “2020” or “fiscal 2020,” and “2019” or “fiscal 2019” relate to the 52-week fiscal years ended January 29, 2022, January 30, 2021, and February 1, 2020, respectively.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents at January 29, 2022 and January 30, 2021 includes $680.6 million and $1,135.0 million, respectively, of investments primarily in money market securities which are valued at cost, which approximates fair value. We consider all highly-liquid debt instruments with original maturities of three months or less to be cash equivalents. The majority of payments due from financial institutions for the settlement of debit card and credit card transactions process within three business days, and therefore are classified as cash and cash equivalents.

Merchandise Inventories

Merchandise inventories at our distribution centers are stated at the lower of cost or net realizable value, determined on a weighted-average cost basis. Cost is assigned to store inventories using the retail inventory method on a weighted-average basis. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are computed by applying a calculated cost-to-retail ratio to the retail value of inventories.

Costs directly associated with warehousing and distribution are capitalized as merchandise inventories. Total warehousing and distribution costs capitalized into inventory amounted to $203.2 million and $172.7 million at January 29, 2022 and January 30, 2021, respectively.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets as follows:

Buildings			39 to 40 years
Furniture, fixtures and equipment			3 to 15 years

Leasehold improvements are amortized over the shorter of the estimated useful lives of the respective assets or the related lease terms. Amortization is included in “Selling, general and administrative expenses” in the accompanying consolidated income statements.

Costs incurred related to software developed for internal use are capitalized and amortized, generally over three years.

Capitalized Interest

We capitalize interest on borrowed funds during the construction of certain property and equipment. We capitalized $1.1 million, $3.2 million and $2.4 million of interest costs in the years ended January 29, 2022, January 30, 2021 and February 1, 2020, respectively.

Insurance Reserves and Restricted Cash

We utilize a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks, including workers’ compensation, general liability and automobile liability. Liabilities associated with the risks that are retained by us are not discounted and are estimated, in part, by considering claims experience, exposure and severity factors and other actuarial assumptions.

Dollar Tree Insurance, Inc., a South Carolina-based wholly-owned captive insurance subsidiary of ours, charges the operating subsidiary companies premiums to insure the retained workers’ compensation, general liability and automobile liability exposures. Pursuant to South Carolina insurance regulations, Dollar Tree Insurance, Inc. maintains certain levels of cash and cash equivalents related to its self-insured exposures.

We also maintain certain cash balances related to our insurance programs, which are held in trust and restricted as to withdrawal or use. These amounts are reflected in “Restricted cash” in the accompanying consolidated balance sheets.

Lease Accounting

In the first quarter of fiscal 2019, we adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” and subsequent amendments, using the optional effective date transition method provided by accounting pronouncement, ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” and recorded a cumulative effect adjustment to beginning retained earnings. Adoption of the standard resulted in the recognition of Operating lease right-of-use assets and Operating lease liabilities of $6.2 billion and $6.1 billion, respectively, and a reduction to Retained earnings of $65.3 million, net of tax, as of February 3, 2019. For fiscal 2019, the adoption of the standard did not have a material impact on our consolidated income statements or consolidated statements of cash flows.

Our lease portfolio primarily consists of leases for our retail store locations and we also lease vehicles and trailers, as well as distribution center space and equipment. We determine if an arrangement is a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether we obtain substantially all of the economic benefits from and have the ability to direct the use of the asset. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. We recognize expense for these leases on a straight-line basis over the lease term. For leases with an initial term in excess of 12 months, operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments over the committed lease term at the lease commencement date.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of future lease payments. Inputs to the calculation of our incremental borrowing rate include the valuations and yields of our outstanding senior notes and their credit spreads over comparable U.S. Treasury rates, adjusted to a collateralized basis by estimating the credit spread improvement that would result from an upgrade of one ratings classification. Most leases include one or more options to renew and the exercise of renewal options is at our sole discretion. We do not include renewal options in our determination of the lease term unless the renewals are deemed to be reasonably certain. Operating lease expense for lease payments not yet paid is recognized on a straight-line basis over the lease term. The operating lease right-of-use asset is reduced by lease incentives, which has the effect of lowering the operating lease expense. Operating lease right-of-use assets are periodically reviewed for impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, “Property, Plant, and Equipment - Overall,” to determine whether a right-of-use asset is impaired, and if so, the amount of the impairment loss to recognize.

We have real estate leases that typically include payments related to non-lease components, such as common area maintenance, as well as payments for real estate taxes and insurance which are not considered components of the lease. These payments are generally variable and based on actual costs incurred by the lessor. These costs are expensed as incurred as variable lease costs and excluded for the purpose of calculating the right-of-use asset and lease liability. A smaller number of real estate leases contain fixed payments for common area maintenance, real estate taxes and insurance. These fixed payments are considered part of the lease payment and included in the right-of-use asset and lease liability. In addition, certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. These payments are expensed as incurred as variable lease costs. Our lease agreements do not contain any material residual value guarantees or material restrictive financial covenants.

Purchased leases with terms which were either favorable or unfavorable as compared to prevailing market rates at the date of acquisition are amortized over the remaining lease terms, including, in some cases, an assumed renewal. Amortization expense, net of $38.5 million, $48.1 million and $52.9 million was recognized in “Selling, general and administrative expenses” in 2021, 2020 and 2019, respectively, related to these lease rights.

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of

We review our long-lived assets and certain identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets based on discounted cash flows or other readily available evidence of fair value, if any. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. In fiscal 2021, 2020 and 2019, we recorded charges of $4.4 million, $4.6 million and $9.1 million, respectively, to write down certain assets, including $3.9 million, $3.8 million and $8.5 million in fiscal 2021, 2020 and 2019, respectively, to write down Operating lease right-of-use assets. These charges are recorded as a component of “Selling, general and administrative expenses” in the accompanying consolidated income statements.

Goodwill and Nonamortizing Intangible Assets

Goodwill and nonamortizing intangible assets, including the Family Dollar trade name, are not amortized, but rather tested for impairment at least annually. In addition, goodwill and nonamortizing intangible assets will be tested on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred.

We perform a qualitative assessment to determine whether it is more likely than not that the Family Dollar trade name is impaired. If we determine that it is more likely than not that an impairment exists, we evaluate the Family Dollar trade name for impairment by comparing its fair value, based on an income approach using the relief-from-royalty method, to its carrying value. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized in an amount equal to that excess.

Subsequent to the evaluation of the Family Dollar trade name for impairment, we perform a goodwill impairment evaluation. In the event that a qualitative assessment of the fair value of a reporting unit indicates it is more likely than not that the fair value is less than the carrying amount, we then estimate the fair value of the reporting unit using a combination of a market multiple method and a discounted cash flow method. We recognize goodwill impairment for the amount by which the reporting unit’s carrying amount exceeds its estimated fair value, not to exceed the total carrying amount of goodwill allocated to the reporting unit.

Our reporting units are determined in accordance with the provisions of ASC Topic 350, “Intangibles - Goodwill and Other.” We perform our annual impairment testing of goodwill and nonamortizing intangible assets during the fourth quarter of each year.

The annual goodwill impairment evaluations in 2021 and 2020 did not result in impairment. The 2019 goodwill impairment evaluation indicated that the fair value of the Family Dollar reporting unit was lower than its carrying value resulting in a $313.0 million non-cash pre-tax and after-tax goodwill impairment charge in the fourth quarter of fiscal 2019, which was recorded as a

component of “Selling, general and administrative expenses” in the accompanying consolidated income statements. We have recorded cumulative goodwill impairment charges totaling $3,040.0 million, all of which relate to the Family Dollar reporting unit.

Our annual impairment evaluation of the Family Dollar trade name did not result in impairment charges during fiscal 2021, 2020 or 2019.

Revenue Recognition

We recognize sales revenue, net of estimated returns and sales tax, at the time the customer tenders payment for and takes control of the merchandise.

Taxes Collected

We report taxes assessed by a governmental authority that are directly imposed on revenue-producing transactions (i.e., sales tax) on a net (excluded from revenue) basis.

Cost of Sales

We include the cost of merchandise, warehousing and distribution costs, and certain occupancy costs in cost of sales.

Vendor Allowances

We receive vendor support in the form of cash payments or allowances through a variety of reimbursements such as purchase discounts, cooperative advertising, markdowns, scandowns and volume rebates. We have agreements with vendors setting forth the specific conditions for each allowance or payment. We either recognize the allowance as a reduction of current costs or defer the payment over the period the related merchandise is sold. If the payment is a reimbursement for costs incurred, it is offset against those related costs; otherwise, it is treated as a reduction to the cost of merchandise.

Pre-Opening Costs

We expense pre-opening costs for new, expanded, relocated and re-bannered stores and for distribution centers, as incurred.

Advertising Costs

We expense advertising costs as they are incurred and they are included in “Selling, general and administrative expenses” within the accompanying consolidated income statements. Advertising costs, net of co-op recoveries from vendors, were $93.9 million, $80.8 million and $102.9 million in fiscal 2021, 2020 and 2019, respectively.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change.

We recognize a financial statement benefit for a tax position if we determine that it is more likely than not that the position will be sustained upon examination.

We include interest and penalties in the provision for income tax expense and income taxes payable. We do not provide for any penalties associated with tax contingencies unless they are considered probable of assessment.

Stock-Based Compensation

We recognize expense for all share-based payments to employees and non-employee directors based on their fair values. Total stock-based compensation expense for 2021, 2020 and 2019 was $79.9 million, $83.9 million and $61.4 million, respectively.

We recognize expense related to the fair value of restricted stock units (RSUs) and stock options over the requisite service period on a straight-line basis or a shorter period based on the retirement eligibility of the grantee. The fair value of RSUs is determined using the closing price of our common stock on the date of grant. The fair value of stock option grants is estimated on the date of grant using the Black-Scholes option pricing model. We account for forfeitures when they occur.

Net Income Per Share

Basic net income per share has been computed by dividing net income by the weighted average number of shares outstanding. Diluted net income per share reflects the potential dilution that could occur assuming the inclusion of dilutive potential shares and has been computed by dividing net income by the weighted average number of shares and dilutive potential shares outstanding. Dilutive potential shares include all outstanding stock options and unvested RSUs after applying the treasury stock method.

Note 2 - Supplemental Balance Sheet Information

Property, Plant and Equipment, Net

Property, plant and equipment, net, as of January 29, 2022 and January 30, 2021 consists of the following:

						January 29,						January 30,
(in millions)						2022						2021
Land						$	239.7					$	238.7
Buildings						1,568.2						1,524.0
Leasehold improvements						2,840.1						2,631.7
Furniture, fixtures and equipment						4,704.1						4,229.4
Construction in progress						489.0						257.5
Total property, plant and equipment						9,841.1						8,881.3
Less: accumulated depreciation						5,363.8						4,765.0
Total property, plant and equipment, net						$	4,477.3					$	4,116.3

Depreciation expense was $672.0 million, $631.1 million, and $581.9 million for the years ended January 29, 2022, January 30, 2021, and February 1, 2020, respectively.

Other Current Liabilities

Other current liabilities as of January 29, 2022 and January 30, 2021 consist of the following:

						January 29,						January 30,
(in millions)						2022						2021
Taxes (other than income taxes)						$	313.5					$	305.0
Compensation and benefits						123.8						162.8
Insurance						121.5						115.4
Accrued construction costs						68.3						44.9
Accrued supplies						27.4						25.2
Other						147.5						162.0
Total other current liabilities						$	802.0					$	815.3

Note 3 - Income Taxes

The provision for income taxes consists of the following:

						Year Ended
						January 29,						January 30,						February 1,
(in millions)						2022						2021						2020
Current taxes:
Federal						$	271.1					$	279.5					$	210.1
State						56.3						87.4						52.5
Foreign						0.1						0.2						0.1
Total current taxes						327.5						367.1						262.7
Deferred taxes:
Federal						50.3						32.6						39.2
State						(76.5)						(3.8)						(5.6)
Foreign						3.0						2.0						(24.6)
Total deferred taxes						(23.2)						30.8						9.0
Provision for income taxes						$	304.3					$	397.9					$	271.7

A reconciliation of the statutory U.S. federal income tax rate and the effective tax rate follows:

						Year Ended
						January 29, 2022						January 30, 2021						February 1, 2020
Statutory U.S. federal income tax rate						21.0		%				21.0		%				21.0		%
Effect of:
State and local income taxes, net of federal income tax benefit						3.7						3.2						3.7
Non-deductible executive compensation						0.4						0.4						—
State tax reserve release						(0.4)						(0.5)						—
Incremental tax expense (benefit) of exercises/vesting of equity-based compensation						(0.5)						0.2						(0.4)
Work Opportunity Tax Credit						(1.8)						(1.6)						(2.7)
Deferred tax rate change						(3.8)						—						0.1
Goodwill impairment						—						—						6.0
Change in valuation allowance						—						—						(2.2)
Other, net						—						0.2						(0.8)
Effective tax rate						18.6		%				22.9		%				24.7		%

Goodwill Impairment

In the fourth quarter of 2019, we recorded a goodwill impairment charge of $313.0 million related to the Family Dollar goodwill, as further discussed in Note 1 under the caption “Goodwill and Nonamortizing Intangible Assets.” As the purchase of Family Dollar was a stock acquisition, carryover basis applied for tax purposes. The impairment charge is not deductible for federal or state tax purposes and therefore there is no tax benefit related to the impairment.

Foreign Taxes

United States income taxes have not been provided on accumulated but undistributed earnings of our foreign subsidiaries as we intend to permanently reinvest earnings. We do not consider the tax on the mandatory deemed repatriation of undistributed foreign earnings and profits to be material.

Deferred Income Taxes

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.

Significant components of our net deferred tax assets (liabilities) follow:

(in millions)						January 29, 2022						January 30, 2021
Deferred tax assets:
Operating lease liabilities						$	1,647.3					$	1,658.4
Net operating losses, interest expense and credit carryforwards						91.5						95.5
Accrued expenses						50.7						72.9
Accrued compensation expense						34.9						47.2
Inventory						24.4						—
State tax election						15.8						17.4
Other						2.4						3.2
Total deferred tax assets						1,867.0						1,894.6
Valuation allowance						(13.0)						(16.8)
Deferred tax assets, net						1,854.0						1,877.8
Deferred tax liabilities:
Operating lease right-of-use assets						(1,578.4)						(1,587.2)
Other intangibles						(780.9)						(840.4)
Property and equipment						(435.6)						(410.5)
Prepaids						(26.0)						(25.2)
Inventory						—						(4.8)
Total deferred tax liabilities						(2,820.9)						(2,868.1)
Deferred income taxes, net						$	(966.9)					$	(990.3)

At January 29, 2022, we had certain state tax credit carryforwards, net operating loss carryforwards and capital loss carryforwards totaling $91.5 million. Some of these carryforwards will expire, if not utilized, beginning in 2022 through 2041.

A valuation allowance of $13.0 million, net of federal tax benefits, has been provided principally for certain state credit carryforwards and net operating loss carryforwards. Since January 30, 2021, the valuation allowance has been decreased to reflect state credits and net operating losses expected to be utilized over the carryforward period. In assessing the realizability of deferred tax assets, we consider 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 and our projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not the remaining existing deductible temporary differences will reverse during periods in which carrybacks are available or in which we generate net taxable income.

Uncertain Tax Positions

We are participating in the IRS Compliance Assurance Program (“CAP”) for fiscal 2021 and we have been accepted into the program for fiscal 2022. This program accelerates the examination of key transactions with the goal of resolving any issues before the tax return is filed. Our federal tax returns have been examined and all issues have been settled through the fiscal 2019 tax year. Several states completed their examinations during fiscal 2021. In general, fiscal 2018 and forward are within the statute of limitations for state tax purposes. The statute of limitations is still open prior to fiscal 2018 for some states. In fiscal 2020, we participated in the CAP under the IRS’s bridge year program and as a result, the IRS will not be completing an audit on the 2020 tax return.

The balance for unrecognized tax benefits at January 29, 2022 was $20.9 million. The total amount of unrecognized tax benefits at January 29, 2022 that, if recognized, would affect the effective tax rate was $16.5 million (net of the federal tax benefit).

The following is a reconciliation of our total gross unrecognized tax benefits:

(in millions)						January 29, 2022						January 30, 2021
Beginning Balance						$	22.6					$	28.9
Additions for tax positions of prior years						4.6						3.4
Additions, based on tax positions related to current year						2.7						1.2
Lapses in statutes of limitation						(9.0)						(10.9)
Ending balance						$	20.9					$	22.6

We believe it is reasonably possible that $8.5 million to $9.5 million of the reserve for uncertain tax positions may be reduced during the next 12 months principally as a result of the effective settlement of outstanding issues. It is also possible that state tax reserves will be reduced for audit settlements and statute expirations within the next 12 months. At this point it is not possible to estimate a range associated with the resolution of these audits. We do not expect any change to have a material impact to our consolidated financial statements.

As of January 29, 2022, we have recorded a liability for potential interest and penalties of $2.1 million.

Note 4 – Commitments and Contingencies

Purchase Obligations

At January 29, 2022, we have commitments totaling $229.6 million related to ocean shipping contracts and commitments of $266.0 million related to agreements for software licenses and support, telecommunication services and store technology assets and maintenance for our stores.

Letters of Credit

We have $425.0 million in Letter of Credit Reimbursement and Security Agreements with various financial institutions, under which $257.9 million was committed to these letters of credit issued for routine purchases of imported merchandise at January 29, 2022.

At January 29, 2022, we also have $46.0 million in standby letters of credit that serve as collateral for our large-deductible insurance programs and expire in fiscal 2022.

Surety Bonds

We have issued various surety bonds that primarily serve as collateral for utility payments at our stores and self-insured insurance programs. These bonds total $118.6 million and are committed through various dates through fiscal 2025.

Contingencies

We are defendants in legal proceedings including the class, collective, representative and large cases described below as well as individual claims in arbitration. We will vigorously defend ourselves in these matters. We do not believe that any of these matters will, individually or in the aggregate, have a material effect on our business or financial condition. We cannot give assurance, however, that one or more of these matters will not have a material effect on our results of operations for the quarter or year in which they are resolved.

We assess our legal proceedings monthly and reserves are established if a loss is probable and the amount of such loss can be reasonably estimated. For matters that have settled, we reserve the estimated settlement amount even if the settlement has not been approved by the court. Many, if not substantially all, of our legal proceedings are subject to significant uncertainties and, therefore, determining the likelihood of a loss and the measurement of any loss can be complex and subject to judgment. With respect to legal proceedings where we have determined that a loss is reasonably possible but not probable, we are unable to estimate the amount or range of the reasonably possible loss due to the inherent difficulty of predicting the outcome of and uncertainties regarding legal proceedings. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Management’s assessment of legal proceedings could change because of future determinations or the discovery of facts which are not presently known. Accordingly, the ultimate costs of resolving these proceedings may be substantially higher or lower than currently estimated.

Dollar Tree Active Matters

The Food and Drug Administration (“FDA”) has alleged that we improperly sold certain topically applied, over the counter (“OTC”) products manufactured by certain Chinese factories that were on an import “alert” restriction issued by the FDA. We believe we have made significant improvements in our processes, and the FDA believes we have certain additional improvements to make, which we are addressing.

Actual or threatened California state court lawsuits have been filed against Dollar Tree and Family Dollar for similar employment-related claims brought under the Private Attorney General Act (“PAGA”). These cases may allege violations such as failure to provide employees with compliant rest and meal breaks, suitable seating and overtime pay, reimburse business expenses, pay minimum wages for all time worked, provide accurate wage statements, and timely pay wages as well as other off-the-clock and potential labor code violations.

Three personal injury lawsuits are pending against us and our vendors alleging that certain talc products that were sold by the company in the past caused cancer. Although we have been able to resolve previous talc lawsuits against us without material loss to the company, given the inherent uncertainties of litigation there can be no assurances regarding the outcome of pending or future cases. Future costs to litigate these cases are not known but may be significant, and it is uncertain whether our costs will be covered by insurance. In addition, although we have indemnification rights against our vendors in several of these cases, it is uncertain whether the vendors will have the financial ability to carry out their obligations.

Dollar Tree Resolved Matters

In December 2020, a former store manager brought a class action in California state court alleging we failed to reimburse employees for business expenses and in so failing, engaged in unfair competition. The case has been resolved.

Family Dollar Active Matters

On February 11, 2022, the FDA issued Form 483 observations primarily regarding rodent infestation at our West Memphis, Arkansas distribution center (“DC 202”), as well as other items that require remediation. In connection therewith, we initiated a voluntary retail-level product recall of FDA and U.S. Department of Agriculture-regulated products stored and shipped from DC 202 from January 1, 2021 through February 18, 2022 (the “Recall”), temporarily closed DC 202 for extensive cleaning, temporarily closed the affected stores to permit the removal and destruction of inventory subject to the Recall, ceased sales of relevant inventory subject to the Recall, committed to the FDA to continue to cease the shipment of FDA-regulated products from DC 202 until FDA approval is received, and initiated corrective actions at DC 202 intended to ensure that these issues will not recur when shipment of FDA-regulated products recommences. We are taking this matter extremely seriously, and are responding to all observations made in the Form 483. We are cooperating fully with the FDA, and intend to cooperate fully with any other applicable regulatory body. We recorded total charges of approximately $34.1 million in the fourth quarter of our 2021 fiscal year in connection with the Recall, primarily attributable to inventory markdowns and related costs. The circumstances leading to the Recall (and/or the Recall itself) may have other negative impacts, which could include reputational damage, lost sales, further or additional governmental investigations and/or enforcement actions, and/or private litigation (see below), which could have a material adverse effect, individually or collectively, on our business, results of operations and/or financial condition.

We have received the following class action complaints related to issues associated with DC 202 (and anticipate additional lawsuits of a similar nature):

On February 22, 2022, a proposed class action complaint was filed in the Circuit Court of Pope County, Arkansas, alleging various causes of action on behalf of the citizens of Arkansas who purchased “contaminated products” covered by the Recall from January 1, 2021 through the date of such Recall. Plaintiffs seek restitution, disgorgement, damages, attorney fees, costs and expenses, punitive damages and such further relief (in each case in unspecified amounts), as the Court deems just and proper.

On February 23, 2022, a proposed class action complaint was filed in the U.S. District Court for the Southern District of Mississippi, Northern Division, alleging various causes of action related to the sale of products that may be contaminated by virtue of a rodent infestation and other unsanitary conditions in stores throughout Mississippi, Arkansas, Louisiana, Alabama, Missouri and Tennessee. Plaintiffs seek damages, attorney fees and costs, punitive damages and the replacement of, or refund of money paid to purchase the relevant products, and any other legal relief available for their claims (in each case in unspecified amounts), including equitable and injunctive relief.

On February 25, 2022, a proposed class action complaint was filed in the U.S. District Court for the Eastern District of Virginia, on behalf of all persons who purchased products subject to the Recall (with a subclass for all persons residing in the State of Tennessee who purchased products subject to the Recall), alleging breach of the implied warranty of merchantability and unjust enrichment. Plaintiffs seek restitution, damages, interest, punitive damages, attorney fees, costs and expenses, and such further relief (in each case in unspecified amounts), as the Court deems just and equitable.

On March 2, 2022, a proposed class action complaint was filed in the U.S. District Court for the Western District of Louisiana, alleging various causes of action related to the sale of products that may be contaminated by virtue of rodent infestation and other unsanitary conditions in stores throughout Louisiana, Mississippi, Arkansas, Alabama, Missouri and Tennessee. Plaintiffs seek damages, attorney fees and costs, punitive damages and the replacement of, or refund of money paid to purchase the relevant products, and any other legal relief available for their claims (in each case in unspecified amounts), including equitable and injunctive relief.

On March 4, 2022, a proposed class action complaint was filed in the U.S. District Court for the Western District of Tennessee, alleging various causes of action related to the sale of products that may be contaminated by virtue of rodent infestation and other unsanitary conditions in stores throughout Tennessee, Louisiana, Mississippi, Arkansas, Alabama, and Missouri. Plaintiffs seek damages, attorney fees and costs, punitive damages and the replacement of, or refund of money paid to purchase the relevant products, and any other legal relief available for their claims (in each case in unspecified amounts), including equitable and injunctive relief.

On March 7, 2022, a proposed class action complaint was filed in the U.S. District Court for the Southern District of Alabama, alleging various causes of action related to the sale of products that may be contaminated by virtue of rodent infestation and other unsanitary conditions in stores throughout Alabama, Louisiana, Mississippi, Arkansas, Tennessee, and Missouri. Plaintiffs seek damages, attorney fees and costs, punitive damages and the replacement of, or refund of money paid to purchase the relevant products, and any other legal relief available for their claims (in each case in unspecified amounts), including equitable and injunctive relief.

On March 8, 2022, a proposed class action complaint was filed in the U.S. District Court for the Western District of Missouri, alleging various causes of action related to the sale of products that may be contaminated by virtue of rodent infestation and other unsanitary conditions in stores throughout Missouri, Arkansas, Louisiana, Mississippi, Alabama and Tennessee. Plaintiffs seek damages, attorney fees and costs, punitive damages and the replacement of, or refund of money paid to purchase the relevant products, and any other legal relief available for their claims (in each case in unspecified amounts), including equitable and injunctive relief.

On March 10, 2022, a proposed class action complaint was filed in the U.S. District Court for the Eastern District of Arkansas, Delta Division, alleging various causes of action related to the sale of products that may be contaminated by virtue of rodent infestation and other unsanitary conditions in stores throughout Arkansas, Louisiana, Mississippi, Alabama, Tennessee and Missouri. Plaintiffs seek damages, attorney fees and costs, punitive damages and the replacement of, or refund of money paid to purchase the relevant products, and any other legal relief available for their claims (in each case in unspecified amounts), including equitable and injunctive relief.

On March 10, 2022, a proposed class action complaint was filed in the U.S. District Court for the Western District of Tennessee, Memphis Division, on behalf of all persons who purchased products subject to the Recall (with a subclass for all persons residing in the State of Tennessee who purchased products subject to the Recall), alleging breach of the implied warranty of merchantability, violation of the Tennessee Consumer Protection Act, and unjust enrichment. Plaintiffs seek refunds of unjust benefits, damages, interest, punitive damages, attorney fees, costs and expenses, and such further relief (in each case in unspecified amounts), as the Court deems just and equitable.

On March 1, 2022, a federal grand jury subpoena was issued to us by the Eastern District of Arkansas requesting the production of information, documents and records pertaining to pests, sanitation and compliance with law regarding certain of our procedures and products. We intend to cooperate fully with the subpoena and any related investigation, however, no assurance can be given as to the timing or outcome of this matter.

In August 2020 and July 2021, consumer class actions were filed against us in New York and Illinois, respectively, alleging Smoked Almonds sold by us are mislabeled because the almonds do not go through a smoking process but rather acquire their smoky taste through the use of smoked flavoring. The legal claims include consumer protection laws, negligent misrepresentations, breach of warranties, fraud and unjust enrichment.

In January, April, and September 2021, state-wide consumer class actions were filed against us by the same law firm in Georgia, Alabama and Florida, respectively, for breach of warranty based on the allegation that the coffee we sold was mislabeled because the canisters did not contain enough coffee to make the number of cups of coffee stated on the label.

Please see the description above for talc and PAGA lawsuits against Family Dollar.

Family Dollar Resolved Matters

In late 2019 and early 2020, personal injury and consumer class actions were filed alleging that we sold Zantac containing a probable carcinogen. After the lawsuits were dismissed in June 2021, plaintiffs filed an appeal.

Note 5 - Long-Term Debt

Long-term debt at January 29, 2022 and January 30, 2021 consists of the following:

						January 29, 2022												January 30, 2021
(in millions)						Principal						Unamortized Debt Discount and Issuance Costs						Principal						Unamortized Debt Discount and Issuance Costs
$1.5 billion Revolving Credit Facility, interest payable at 1.28% at January 29, 2022						$	—					$	6.4					$	—					$	—
$1.25 billion Revolving Credit Facility						—						—						—						5.3
3.70% Senior Notes, due 2023						—						—						1,000.0						4.2
4.00% Senior Notes, due 2025						1,000.0						4.0						1,000.0						5.1
4.20% Senior Notes, due 2028						1,250.0						8.1						1,250.0						9.2
2.65% Senior Notes, due 2031						800.0						9.5						—						—
3.375% Senior Notes, due 2051						400.0						5.0						—						—
Total						$	3,450.0					$	33.0					$	3,250.0					$	23.8

Maturities of long-term debt are as follows (in millions):

2022			2023			2024			2025			2026			Thereafter
$	—		$	—		$	—		$	1,000.0		$	—		$	2,450.0

Revolving Credit Facility

On December 8, 2021, we entered into a credit agreement (the “Credit Agreement”), with JPMorgan Chase Bank, N.A., as agent, and the financial institutions from time to time party thereto, providing for a $1.5 billion revolving credit facility (the “Revolving Credit Facility”), of which up to $350.0 million is available for letters of credit. The Revolving Credit Facility matures on December 8, 2026, subject to extensions permitted under the Credit Agreement.

Loans under the Revolving Credit Facility bear interest at the Adjusted Term SOFR Rate (as defined in the Credit Agreement) plus 1.125%, subject to adjustment based on (i) our public debt rating and (ii) our leverage ratio. At January 29, 2022, the Revolving Credit Facility bore interest at 1.28%. We pay certain commitment fees in connection with the Revolving Credit Facility. The Revolving Credit Facility allows voluntary repayment of outstanding loans at any time without premium or penalty, other than customary “breakage” costs with respect to Secured Overnight Financing Rate (“SOFR”) loans. There is no required amortization under the Revolving Credit Facility.

The Revolving Credit Facility contains a number of affirmative and negative covenants that, among other things, and subject to certain significant baskets and exceptions, restrict our ability to incur subsidiary indebtedness, incur liens, sell all or substantially all of our (including our subsidiaries’) assets and consummate certain fundamental changes. The Revolving Credit Facility also contains a maximum leverage ratio covenant and a minimum fixed charge coverage ratio covenant. The Credit Agreement provides for certain events of default which, if any of them occurs, would permit or require the loans under the Revolving Credit Facility to be declared due and payable and the commitments thereunder to be terminated.

In connection with entry into the Credit Agreement, we terminated all commitments and fulfilled all obligations under our existing credit agreement dated April 19, 2018. Under the previous credit agreement, in the first quarter of fiscal 2020, we preemptively drew $750.0 million on our $1.25 billion revolving credit facility to reduce our exposure to potential short-term liquidity risk in the banking system as a result of the COVID-19 pandemic, all of which was repaid by the end of the third quarter of fiscal 2020.

Senior Notes

Fiscal 2018 Offering

On April 19, 2018, we completed the registered offering of $750.0 million aggregate principal amount of Senior Floating Rate Notes due 2020 (the “Floating Rate Notes”), $1.0 billion aggregate principal amount of 3.70% Senior Notes due 2023 (the “2023 Notes”), $1.0 billion aggregate principal amount of 4.00% Senior Notes due 2025 (the “2025 Notes”) and $1.25 billion aggregate principal amount of 4.20% Senior Notes due 2028 (the “2028 Notes” and together with the 2023 Notes and the 2025 Notes, the “Fixed Rate Notes”; and the Fixed Rate Notes together with the Floating Rate Notes, the “Notes”).

The Notes were issued pursuant to an indenture, dated as of April 2, 2018 (the “Indenture”), between us and U.S. Bank National Association, as trustee, as supplemented by the First Supplemental Indenture dated as of April 19, 2018 (the “First Supplemental Indenture”).

The Notes are unsecured, unsubordinated obligations of ours and rank equal in right of payment to all of our existing and future debt and other obligations that are not, by their terms, expressly subordinated in right of payment to the Notes.

The Floating Rate Notes matured on April 17, 2020 and bore interest at a floating rate, reset quarterly, equal to LIBOR plus 70 basis points. We were required to pay interest on the Floating Rate Notes quarterly, in arrears, on January 17, April 17, July 17 and October 17 of each year to holders of record on the preceding January 3, April 3, July 3 and October 3, respectively. The 2023 Notes were scheduled to mature on May 15, 2023 and bore interest at the rate of 3.70% annually. The 2025 Notes mature on May 15, 2025 and bear interest at the rate of 4.00% annually. The 2028 Notes mature on May 15, 2028 and bear interest at the rate of 4.20% annually. We are required to pay interest on the Fixed Rate Notes semiannually, in arrears, on May 15 and November 15 of each year to holders of record on the preceding May 1 and November 1, respectively.

We may redeem (or may have redeemed) the Fixed Rate Notes of each series in whole or in part, at our option, at any time and from time to time prior to (i) in the case of the 2023 Notes, April 15, 2023, (ii) in the case of the 2025 Notes, March 15, 2025 and (iii) in the case of the 2028 Notes, February 15, 2028 (the date with respect to each such series, the “Applicable Par Call Date”), in each case, at a “make-whole” price described in the First Supplemental Indenture plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, on or after the Applicable Par Call Date, we may redeem the Fixed Rate Notes of the applicable series, at any time in whole or from time to time in part, at a redemption price equal to 100% of the principal amount thereof.

In the event of a Change of Control Triggering Event, as defined in the Indenture, with respect to any series, the holders of the Notes of such series may require us to purchase for cash all or a portion of their Notes of such series at a purchase price equal to 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. The Indenture limits our ability and that of our subsidiaries, subject to significant baskets and exceptions, to incur certain secured debt. The First Supplemental Indenture also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Notes to become or to be declared due and payable, as applicable.

Fiscal 2021 Offering

On December 1, 2021, we completed the registered offering of $800.0 million aggregate principal amount of 2.65% Senior Notes due 2031 (the “2031 Notes”) and $400.0 million aggregate principal amount of 3.375% Senior Notes due 2051 (the “2051 Notes” and, together with the 2031 Notes, the “New Notes”).

The New Notes were issued pursuant to the Indenture, as supplemented by the Second Supplemental Indenture dated as of December 1, 2021 (the “Second Supplemental Indenture”).

The New Notes are unsecured, unsubordinated obligations of ours and rank equally in right of payment to all of our existing and future debt and other obligations that are not, by their terms, expressly subordinated in right of payment to the New Notes.

The 2031 Notes mature on December 1, 2031 and bear interest at the rate of 2.650% per annum. The 2051 Notes mature on December 1, 2051 and bear interest at the rate of 3.375% per annum. We are required to pay interest on the New Notes semi-annually, in arrears, on June 1 and December 1 of each year, beginning on June 1, 2022, to holders of record on the preceding May 15 and November 15, respectively.

We may redeem the New Notes of each series in whole or in part at any time and from time to time prior to (i) in the case of the 2031 Notes, September 1, 2031, and (ii) in the case of the 2051 Notes, June 1, 2051 (the date with respect to each such series, the “Applicable Par Call Date”), in each case, at a “make-whole” price described in the Second Supplemental Indenture plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, on or after the Applicable Par Call Date, we may redeem the New Notes of the applicable series, at any time in whole or from time to time in part, at a redemption price equal to 100% of the principal amount thereof.

In the event of a Change of Control Triggering Event (as defined in the Second Supplemental Indenture) with respect to any series, the holders of the New Notes of such series may require us to purchase for cash all or a portion of their New Notes of such series at a purchase price equal to 101% of the principal amount of such New Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. The Indenture limits our ability and that of our subsidiaries, subject to significant baskets and exceptions, to incur certain secured debt. The Indenture also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the New Notes to become or to be declared due and payable, as applicable.

Repayments of Long-term Debt

In the fourth quarter of 2019, we prepaid $500.0 million of our $750.0 million Floating Rate Notes and we repaid the remaining $250.0 million outstanding in the first quarter of 2020.

In the fourth quarter of 2020, we repaid the $300.0 million 5.00% Senior Notes that we assumed upon the acquisition of Family Dollar in 2015.

In the fourth quarter of 2021, we used the proceeds from the offering of the New Notes discussed above to redeem the $1.0 billion 2023 Notes. We incurred a redemption premium of $43.8 million in connection with the early redemption of the 2023 Notes and accelerated the expensing of $2.7 million of amortizable non-cash deferred financing and original issue discount costs, which are reflected in “Interest expense, net” within the accompanying consolidated income statements for the year ended January 29, 2022.

Debt Covenants

As of January 29, 2022, we were in compliance with our debt covenants.

Note 6 - Leases

The lease cost for operating leases that was recognized in the accompanying consolidated income statements was as follows:

						Year Ended
(in millions)						January 29, 2022						January 30, 2021						February 1, 2020
Operating lease cost						$	1,602.8					$	1,551.2					$	1,520.5
Variable lease cost						417.8						391.4						375.9
Short-term lease cost						5.6						9.7						14.8
Total lease cost*						$	2,026.2					$	1,952.3					$	1,911.2
*Excludes sublease income, which is immaterial

As of January 29, 2022, maturities of lease liabilities were as follows:

						(in millions)
2022						$	1,522.9
2023						1,408.9
2024						1,194.2
2025						964.3
2026						721.5
Thereafter						1,435.3
Total undiscounted lease payments						7,247.1
Less interest						693.8
Present value of lease liabilities						$	6,553.3

The future lease payments above exclude $446.0 million of legally binding minimum lease payments for leases signed but not yet commenced as of January 29, 2022.

Information regarding the weighted-average remaining lease term and the weighted-average discount rate for operating leases is as follows:

						January 29, 2022						January 30, 2021						February 1, 2020
Weighted-average remaining lease term (years)						5.9						6.1						6.4
Weighted-average discount rate						3.4		%				3.9		%				4.3		%

The following represents supplemental information pertaining to our operating lease arrangements:

						Year Ended
(in millions)						January 29, 2022						January 30, 2021						February 1, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	1,579.8					$	1,519.4					$	1,433.4

Distribution Center Lease and Related Bonds

In May 2017, we entered into a long-term property lease (“Missouri Lease”) which includes land and the construction of a 1.2 million square foot distribution center in Warrensburg, Missouri (“Distribution Center Project”). The Distribution Center Project was completed in 2018 and our investment in the project of $91.0 million as of January 29, 2022 is reflected in “Property, plant and equipment, net.” The Missouri Lease commenced upon its execution in May 2017 and expires on December 1, 2032. We have two options to extend the Missouri Lease term for up to a combined additional ten years. Following the expiration of the lease, the property reverts back to us.

In addition to being a party to the Missouri Lease, we are also the owner of bonds which were issued in May 2017, are secured by the Missouri Lease and expire December 1, 2032 (“Missouri Bonds”). The Missouri Bonds are debt issued by the lessor in the Missouri Lease. Therefore, we hold the debt instrument pertaining to our Missouri Lease obligation. Because a legal right of offset exists, we are accounting for the Missouri Bonds as a reduction of our Missouri Lease obligation in the accompanying consolidated balance sheets.

Note 7 - Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a fair value hierarchy has been established that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities;

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and

Level 3 - Unobservable inputs in which there is little or no market data which require the reporting entity to develop its own assumptions.

As required, financial assets and liabilities are classified in the fair value hierarchy in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). We review certain store assets for evidence of impairment. The fair values are determined based on the income approach, in which we utilize internal cash flow projections over the life of the underlying lease agreements discounted based on our risk-adjusted rate. These measures of fair value, and related inputs, are considered a Level 3 approach under the fair value hierarchy. Refer to Note 1 under the caption “Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of” for information regarding the impairment charges recorded in fiscal 2021, 2020 and 2019.

Our indefinite-lived intangible assets are recorded at carrying value, and, if impaired, are adjusted to fair value using Level 3 inputs. Refer to Note 1 under the caption “Goodwill and Nonamortizing Intangible Assets” for further information regarding the process of determining the fair value of these assets.

Fair Value of Financial Instruments

The carrying amounts of Cash and cash equivalents, Restricted cash and Accounts payable as reported in the accompanying consolidated balance sheets approximate fair value due to their short-term maturities.

The aggregate fair values and carrying values of our long-term borrowings were as follows:

						January 29, 2022												January 30, 2021
(in millions)						Fair Value						Carrying Value						Fair Value						Carrying Value
Level 1
Senior Notes						$	3,558.5					$	3,423.4					$	3,654.4					$	3,231.5

The fair values of our Senior Notes were determined using Level 1 inputs as quoted prices in active markets for identical assets or liabilities are available. The carrying value of our Revolving Credit Facility approximates its fair value because the interest rates vary with market interest rates.

Note 8 - Shareholders’ Equity

Preferred Stock

We are authorized to issue 10,000,000 shares of Preferred Stock, $0.01 par value per share. No preferred shares are issued and outstanding at January 29, 2022 and January 30, 2021.

Net Income Per Share

The following table sets forth the calculations of basic and diluted net income per share:

						Year Ended
						January 29,						January 30,						February 1,
(in millions, except per share data)						2022						2021						2020
Basic net income per share:
Net income						$	1,327.9					$	1,341.9					$	827.0
Weighted average number of shares outstanding						227.9						236.4						237.2
Basic net income per share						$	5.83					$	5.68					$	3.49
Diluted net income per share:
Net income						$	1,327.9					$	1,341.9					$	827.0
Weighted average number of shares outstanding						227.9						236.4						237.2
Dilutive effect of stock options and restricted stock (as determined by applying the treasury stock method)						1.1						0.9						1.1
Weighted average number of shares and dilutive potential shares outstanding						229.0						237.3						238.3
Diluted net income per share						$	5.80					$	5.65					$	3.47

At January 29, 2022, January 30, 2021 and February 1, 2020, substantially all of the stock options outstanding were included in the calculation of the weighted average number of shares and dilutive potential shares outstanding.

Share Repurchase Programs

We repurchased 9,156,898, 3,982,478 and 1,967,355 shares of common stock on the open market in fiscal 2021, fiscal 2020 and fiscal 2019, respectively, for $950.0 million, $400.0 million and $200.0 million, respectively. At January 29, 2022, we had $2.5 billion remaining under Board repurchase authorization.

Note 9 – Employee Benefit Plans

Dollar Tree Retirement Savings Plan

We maintain a 401(k) plan which is available to all full-time, United States-based employees over 21 years of age. Eligible employees may make elective salary deferrals. We may make contributions, at our discretion, to eligible employees who have completed one year of service in which they have worked at least 1,000 hours.

Contributions to and reimbursements by us of expenses of the plan were recorded in the accompanying consolidated income statements as follows:

						Year Ended
						January 29,						January 30,						February 1,
(in millions)						2022						2021						2020
Cost of sales						$	8.2					$	7.4					$	8.1
Selling, general and administrative expenses						20.6						19.0						17.0
Total						$	28.8					$	26.4					$	25.1

All eligible employees are immediately vested in any company match contributions under the 401(k) plan.

Note 10 - Stock-Based Compensation Plans

Fixed Stock-Based Compensation Plans

The 2011 Omnibus Incentive Plan permitted us to grant to our employees, consultants and directors up to 4.0 million shares of our Common Stock plus any shares available under former plans which were previously approved by the shareholders. The plan permitted us to grant equity awards in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), performance bonuses, performance share units (“PSUs”), non-employee director stock options and other equity-related awards. As of March 17, 2021, the plan was no longer available for new grants of awards, but all outstanding awards that were granted under the plan prior to March 17, 2021 continue to be governed by the terms and conditions of the plan and applicable award agreements. Effective June 10, 2021, the 2011 Omnibus Incentive Plan was replaced and superseded by the 2021 Omnibus Incentive Plan (“Omnibus Plan”). The Omnibus Plan permits us to grant up to 6.5 million shares of our Common Stock to our employees, consultants and directors. The form of equity awards authorized for grant under the Omnibus Plan are substantially the same as those permitted by the predecessor plan.

Stock appreciation rights may be awarded alone or in tandem with stock options. When the stock appreciation rights are exercisable, the holder may surrender all or a portion of the unexercised stock appreciation right and receive in exchange an amount equal to the excess of the fair market value at the date of exercise over the fair market value at the date of the grant. No stock appreciation rights have been granted to date.

Any restricted stock, RSUs or PSUs awarded are subject to certain general restrictions. The restricted stock shares or units may not be sold, transferred, pledged or disposed of until the restrictions on the shares or units have lapsed or have been removed under the provisions of the plan. In addition, if a holder of restricted shares or units ceases to be employed by us, any shares or units in which the restrictions have not lapsed will be forfeited.

The 2013 Director Deferred Compensation Plan permits any of our directors who receive a retainer or other fees for Board or Board committee service to defer all or a portion of such fees until a future date, at which time they may be paid in cash or shares of our common stock, or receive all or a portion of such fees in non-statutory stock options. Deferred fees that are paid out in cash will earn interest at the 30-year Treasury Bond Rate. If a director elects to be paid in common stock, the number of shares will be determined by dividing the deferred fee amount by the closing market price of a share of our common stock on the date of deferral. The number of options issued to a director will equal the deferred fee amount divided by 33% of the price of a share of our common stock. The exercise price will equal the fair market value of our common stock at the date the option is issued. The options are fully vested when issued and have a term of 10 years.

In conjunction with the acquisition of Family Dollar in 2015, we assumed the Family Dollar Stores, Inc. 2006 Incentive Plan (the “2006 Plan”). The 2006 Plan permitted the granting of a variety of compensatory award types, including stock options and performance share rights.

Total stock-based compensation expense was recorded in the accompanying consolidated income statements as follows:

						Year Ended
						January 29,						January 30,						February 1,
(in millions)						2022						2021						2020
Cost of sales						$	18.3					$	15.4					$	12.9
Selling, general and administrative expenses						61.6						68.5						48.5
Total stock-based compensation expense						$	79.9					$	83.9					$	61.4
Excess tax benefit (deficit) on stock-based compensation recognized in the Provision for income taxes						$	8.5					$	(2.8)					$	3.8

Restricted Stock

We issue service-based RSUs to employees and officers and issue PSUs to certain of our officers. We recognize expense based on the estimated fair value of the RSUs or PSUs granted over the requisite service period, which is generally three years, on a straight-line basis or a shorter period based on the retirement eligibility of the grantee. The fair value of RSUs and PSUs is determined using our closing stock price on the date of grant.

Service-Based RSUs

The following table summarizes the status of service-based RSUs as of January 29, 2022 and changes during the year then ended:

						Number of Shares						Weighted Average Grant Date Fair Value
Nonvested at January 30, 2021						1,265,216						$	83.16
Granted						634,118						109.01
Vested						(649,374)						87.54
Forfeited						(153,894)						92.88
Nonvested at January 29, 2022						1,096,066						$	94.16

The total fair value of the service-based restricted shares vested during the years ended January 29, 2022, January 30, 2021 and February 1, 2020 was $56.8 million, $48.5 million and $55.5 million, respectively. The weighted average grant date fair value of the RSUs granted in 2021, 2020 and 2019 was $109.01, $73.24 and $103.55, respectively. As of January 29, 2022, there was $54.5 million of total unrecognized compensation expense related to these RSUs which is expected to be recognized over a weighted-average period of 1.3 years.

PSUs

The following table summarizes the status of PSUs as of January 29, 2022 and changes during the year then ended:

						Number of Shares						Weighted Average Grant Date Fair Value
Nonvested at January 30, 2021						423,272						$	82.67
Granted						422,524						95.04
Vested						(218,232)						79.44
Forfeited						(42,592)						95.66
Nonvested at January 29, 2022						584,972						$	91.86

The total fair value of the PSUs vested during the years ended January 29, 2022, January 30, 2021 and February 1, 2020 was $17.3 million, $19.6 million and $3.3 million, respectively. The weighted average grant date fair value of the PSUs granted in 2021, 2020 and 2019 was $95.04, $74.46 and $103.71, respectively. As of January 29, 2022, there was $20.7 million of total unrecognized compensation expense related to these RSUs which is expected to be recognized over a weighted-average period of 0.7 years.

Stock Options

Stock options are valued using the Black-Scholes option pricing model and compensation expense is recognized on a straight-line basis over the requisite service period. Options granted in 2021, 2020 and 2019 are immaterial.

Certain of our directors elected to defer their compensation into stock options under the 2013 Director Deferred Compensation Plan. These options vest immediately and are expensed on the grant date.

The following tables summarize information about options outstanding at January 29, 2022 and changes during the year then ended:

						Number of Shares						Weighted Average Per Share Exercise Price						Weighted Average Remaining Term (Years)						Aggregate Intrinsic Value (in millions)
Outstanding, beginning of period						117,057						$	79.75
Granted						1,078						140.52
Exercised						(93,594)						77.67
Outstanding, end of period						24,541						$	90.38					4.8						$	0.9
Options vested and exercisable at January 29, 2022						24,541						$	90.38					4.8						$	0.9

The intrinsic value of options exercised during 2021, 2020 and 2019 was $5.6 million, $0.9 million and $1.6 million, respectively.

Note 11 – Segments and Disaggregated Revenue

We operate a chain of more than 16,000 retail discount stores in 48 states and five Canadian provinces. Our operations are conducted in two reporting business segments: Dollar Tree and Family Dollar. We define our segments as those operations whose results our CODM regularly reviews to analyze performance and allocate resources.

We measure the results of our segments using, among other measures, each segment’s net sales, gross profit and operating income. The CODM reviews these metrics for each of our reporting segments. We may revise the measurement of each segment’s operating income, as determined by the information regularly reviewed by the CODM. If the measurement of a segment changes, prior period amounts and balances are reclassified to be comparable to the current period’s presentation. Corporate, support and Other consists primarily of store support center costs that are considered shared services and therefore these selling, general and administrative costs are excluded from our two reporting business segments. These costs include operating expenses for our store support center and the results of operations for our Summit Pointe property in Chesapeake, Virginia. The Family Dollar segment Operating income includes advertising revenue, which is a component of Other revenue in the accompanying consolidated income statements.

Information for our segments, as well as for Corporate, support and Other, including the reconciliation to Income before income taxes, is as follows:

						Year Ended
						January 29,						January 30,						February 1,
(in millions)						2022						2021						2020
Consolidated Income Statement Data:
Net sales:
Dollar Tree						$	13,922.1					$	13,265.0					$	12,507.9
Family Dollar						12,387.7						12,243.4						11,102.9
Consolidated Net sales						$	26,309.8					$	25,508.4					$	23,610.8
Gross profit:
Dollar Tree						$	4,603.6					$	4,543.8					$	4,342.9
Family Dollar						3,122.3						3,243.6						2,697.8
Consolidated Gross profit						$	7,725.9					$	7,787.4					$	7,040.7

						Year Ended
						January 29,						January 30,						February 1,
(in millions)						2022						2021						2020
Operating income (loss):
Dollar Tree						$	1,607.0					$	1,598.0					$	1,670.2
Family Dollar						543.1						655.6						(74.9)
Corporate, support and Other						(338.7)						(365.7)						(333.1)
Consolidated Operating income						1,811.4						1,887.9						1,262.2
Interest expense, net						178.9						147.3						162.1
Other expense, net						0.3						0.8						1.4
Income before income taxes						$	1,632.2					$	1,739.8					$	1,098.7
Depreciation and amortization expense:
Dollar Tree						$	316.0					$	302.3					$	277.7
Family Dollar						369.8						352.6						337.9
Corporate, support and Other						30.2						31.8						30.1
Consolidated depreciation and amortization expense						$	716.0					$	686.7					$	645.7

						As of
						January 29,						January 30,
(in millions)						2022						2021
Consolidated Balance Sheet Data:
Goodwill:
Dollar Tree						$	424.9					$	424.9
Family Dollar						1,559.5						1,559.5
Consolidated Goodwill						$	1,984.4					$	1,984.4
Total assets:
Dollar Tree						$	9,358.4					$	8,669.3
Family Dollar						11,871.8						11,562.2
Corporate, support and Other						491.6						464.5
Consolidated Total assets						$	21,721.8					$	20,696.0
Additions to property, plant and equipment:
Dollar Tree						$	477.1					$	470.4
Family Dollar						498.9						362.1
Corporate, support and Other						45.2						66.3
Consolidated additions to property, plant and equipment						$	1,021.2					$	898.8

Disaggregated Revenue

The following table summarizes net sales by merchandise category for our segments:

						Year Ended
						January 29,												January 30,												February 1,
(in millions)						2022												2021												2020
Dollar Tree segment net sales by merchandise category:
Consumable						$	6,334.5					45.5		%				$	6,407.0					48.3		%				$	6,155.3					49.2		%
Variety						6,794.0						48.8		%				6,194.8						46.7		%				5,732.1						45.8		%
Seasonal						793.6						5.7		%				663.2						5.0		%				620.5						5.0		%
Total Dollar Tree segment net sales						$	13,922.1					100.0		%				$	13,265.0					100.0		%				$	12,507.9					100.0		%
Family Dollar segment net sales by merchandise category:
Consumable						$	9,446.5					76.3		%				$	9,367.8					76.5		%				$	8,604.7					77.5		%
Home products						1,033.9						8.3		%				1,078.1						8.8		%				866.0						7.8		%
Apparel and accessories						781.5						6.3		%				690.1						5.6		%				644.0						5.8		%
Seasonal and electronics						1,125.8						9.1		%				1,107.4						9.1		%				988.2						8.9		%
Total Family Dollar segment net sales						$	12,387.7					100.0		%				$	12,243.4					100.0		%				$	11,102.9					100.0		%