UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q
(Mark One)
(X)
Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
For the quarterly period ended April 29, 2017
OR
( )
Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Commission File Number: 0-25464
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DOLLAR TREE, INC.
(Exact name of registrant as specified in its charter)

Virginia
 
26-2018846
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)

500 Volvo Parkway
Chesapeake, Virginia 23320
(Address of principal executive offices)

Telephone Number (757) 321-5000
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes (X)
No ( )

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes (X)
No ( )

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.        
Large accelerated filer (X)
Accelerated filer ( )
Non-accelerated filer ( ) (Do not check if a smaller reporting company)
Smaller reporting company ( )
Emerging growth company ( )
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ( )


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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ( )
No (X)

As of May 22, 2017, there were 236,688,547 shares of the Registrant's Common Stock outstanding.

2



DOLLAR TREE, INC.
INDEX
 
 
Page
 
PART I - FINANCIAL INFORMATION
 
 
 
 
Item 1.
Financial Statements:
 
 
 
 
 
Unaudited Condensed Consolidated Income Statements for the 13 Weeks Ended April 29, 2017 and April 30, 2016
 
 
 
 
Unaudited Condensed Consolidated Statements of Comprehensive Income for the 13 Weeks Ended April 29, 2017 and April 30, 2016
 
 
 
 
Unaudited Condensed Consolidated Balance Sheets as of April 29, 2017, January 28, 2017 and April 30, 2016
 
 
 
 
Unaudited Condensed Consolidated Statements of Cash Flows for the 13 Weeks Ended April 29, 2017 and April 30, 2016
 
 
 
 
Notes to Unaudited Condensed Consolidated Financial Statements
 
 
 
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
 
 
 
Item 4.
Controls and Procedures
 
 
 
 
PART II - OTHER INFORMATION
 
 
 
 
Item 1.
Legal Proceedings
 
 
 
Item 1A.
Risk Factors
 
 
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 
 
 
Item 3.
Defaults Upon Senior Securities
 
 
 
Item 4.
Mine Safety Disclosures
 
 
 
Item 5.
Other Information
 
 
 
Item 6.
Exhibits
 
 
 
 
Signatures

3



Part I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

DOLLAR TREE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
 
 
13 Weeks Ended
 
 
April 29,
 
April 30,
(in millions, except per share data)
 
2017
 
2016
Net sales
 
$
5,287.1

 
$
5,085.8

Cost of sales
 
3,660.0

 
3,531.2

Gross profit
 
1,627.1

 
1,554.6

Selling, general and administrative expenses,
   excluding Receivable impairment
 
1,187.4

 
1,135.9

Receivable impairment
 
50.9

 

Selling, general and administrative expenses
 
1,238.3

 
1,135.9

Operating income
 
388.8

 
418.7

Interest expense, net
 
74.7

 
87.3

Other (income) expense, net
 
0.3

 
(0.2
)
Income before income taxes
 
313.8

 
331.6

Income tax expense
 
113.3

 
98.9

Net income
 
$
200.5

 
$
232.7

Basic net income per share
 
$
0.85

 
$
0.99

Diluted net income per share
 
$
0.85

 
$
0.98

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.


4



DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
 
13 Weeks Ended
 
 
April 29,
 
April 30,
(in millions)
 
2017
 
2016
Net income
 
$
200.5

 
$
232.7

 
 
 
 
 
Foreign currency translation adjustments
 
(3.0
)
 
8.9

 
 
 
 
 
Total comprehensive income
 
$
197.5

 
$
241.6


See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.



5



DOLLAR TREE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions)
 
April 29, 2017
 
January 28, 2017
 
April 30, 2016
ASSETS
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
1,154.9

 
$
866.4

 
$
929.7

Short-term investments
 
4.0

 
4.0

 
4.0

Merchandise inventories, net
 
2,878.4

 
2,865.8

 
2,929.5

Other current assets
 
240.8

 
201.8

 
308.9

Total current assets
 
4,278.1

 
3,938.0

 
4,172.1

Property, plant and equipment, net of accumulated depreciation
   of $2,814.5, $2,694.5 and $2,306.4, respectively
 
3,093.9

 
3,115.8

 
3,153.2

Assets available for sale
 
10.6

 
9.0

 
11.7

Goodwill
 
5,022.4

 
5,023.5

 
5,024.9

Favorable lease rights, net of accumulated amortization of
   $180.8, $159.3 and $86.3, respectively
 
443.4

 
468.6

 
543.9

Tradename intangible asset
 
3,100.0

 
3,100.0

 
3,100.0

Other intangible assets, net
 
5.0

 
5.1

 
5.6

Other assets
 
41.3

 
41.6

 
49.5

Total assets
 
$
15,994.7

 
$
15,701.6

 
$
16,060.9

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

Current portion of long-term debt
 
$
165.9

 
$
152.1

 
$
120.5

Accounts payable
 
1,223.9

 
1,119.6

 
1,260.3

Other current liabilities
 
629.5

 
744.2

 
622.1

Income taxes payable
 
221.3

 
90.0

 
46.2

Total current liabilities
 
2,240.6

 
2,105.9

 
2,049.1

Long-term debt, net, excluding current portion
 
6,131.7

 
6,169.7

 
7,209.8

Unfavorable lease rights, net of accumulated amortization of
   $45.3, $39.6 and $21.1, respectively
 
117.6

 
124.0

 
142.9

Deferred tax liabilities, net
 
1,433.6

 
1,458.9

 
1,566.2

Income taxes payable, long-term
 
71.8

 
71.2

 
71.1

Other liabilities
 
390.4

 
382.4

 
352.2

Total liabilities
 
10,385.7

 
10,312.1

 
11,391.3

Commitments and contingencies
 
 
 
 
 
 
Shareholders' equity
 
5,609.0

 
5,389.5

 
4,669.6

Total liabilities and shareholders' equity
 
$
15,994.7

 
$
15,701.6

 
$
16,060.9

 
 
 
 
 
 
 
Common shares outstanding
 
236.7

 
236.1

 
235.6

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.



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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
13 Weeks Ended
 
 
April 29,
 
April 30,
(in millions)
 
2017
 
2016
Cash flows from operating activities:
 
 
 
 
Net income
 
$
200.5

 
$
232.7

Adjustments to reconcile net income to net cash provided by operating activities:
 
 

 
 

Depreciation and amortization
 
153.9

 
162.3

Provision for deferred taxes
 
(23.0
)
 
(20.4
)
Amortization of debt discount and debt-issuance costs
 
3.6

 
4.7

Receivable impairment
 
50.9

 

Other non-cash adjustments to net income
 
32.9

 
27.7

Changes in operating assets and liabilities
 
11.9

 
(96.0
)
Net cash provided by operating activities
 
430.7

 
311.0

Cash flows from investing activities:
 
 

 
 

Capital expenditures
 
(110.3
)
 
(175.9
)
Purchase of restricted investments
 

 
(36.1
)
Proceeds from sale of restricted investments
 

 
118.1

Proceeds from fixed asset disposition
 
2.2

 
1.1

Net cash used in investing activities
 
(108.1
)
 
(92.8
)
Cash flows from financing activities:
 
 

 
 

Principal payments for long-term debt
 
(27.8
)
 
(20.8
)
Proceeds from stock issued pursuant to stock-based compensation plans
 
11.8

 
14.4

Cash paid for taxes on exercises/vesting of stock-based compensation
 
(17.6
)
 
(18.4
)
Net cash used in financing activities
 
(33.6
)
 
(24.8
)
Effect of exchange rate changes on cash and cash equivalents
 
(0.5
)
 
0.2

Net increase in cash and cash equivalents
 
288.5

 
193.6

Cash and cash equivalents at beginning of period
 
866.4

 
736.1

Cash and cash equivalents at end of period
 
$
1,154.9

 
$
929.7

Supplemental disclosure of cash flow information:
 
 

 
 

Cash paid for:
 
 

 
 

Interest, net of amounts capitalized
 
$
121.0

 
$
131.8

Income taxes
 
$
7.3

 
$
85.5

Non-cash transactions:
 
 
 
 
Accrued capital expenditures
 
$
43.2

 
$
73.0

 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.


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DOLLAR TREE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of Dollar Tree, Inc. and its wholly-owned subsidiaries (the "Company") have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended January 28, 2017 contained in the Company's Annual Report on Form 10-K filed March 28, 2017. The results of operations for the 13 weeks ended April 29, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending February 3, 2018.
In the Company's opinion, the unaudited condensed consolidated financial statements included herein contain all adjustments (including those of a normal recurring nature) considered necessary for a fair presentation of its financial position as of April 29, 2017 and April 30, 2016 and the results of its operations and cash flows for the periods presented. The January 28, 2017 balance sheet information was derived from the audited consolidated financial statements as of that date.
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." This update will replace existing revenue recognition guidance in GAAP and requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In July 2015, the FASB deferred the effective date of the new standard to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, but not before the original effective date for public business entities (interim and annual reporting periods beginning after December 15, 2016). ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. The Company does not expect the adoption of this pronouncement to have a material impact on its financial statements.
In February 2016, the FASB issued ASU No. 2016-02, "Leases." This update will replace existing lease guidance in GAAP and will require lessees to recognize lease assets and lease liabilities on the balance sheet for all leases and disclose key information about leasing arrangements, such as information about variable lease payments and options to renew and terminate leases. When implemented, lessees and lessors will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The update is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company has engaged a third party to assist in its preparation for implementation and its evaluation of the impact of the new pronouncement on its consolidated financial statements. The Company expects the adoption of this pronouncement to result in a material increase in the assets and liabilities on its consolidated balance sheets and to not have a material impact on its consolidated income statements.
2. LONG-TERM DEBT
Acquisition Notes
The Company's $750.0 million aggregate principal amount of 5.25% senior notes due 2020 (the "2020 Notes") and $2.5 billion aggregate principal amount of 5.75% senior notes due 2023 (the "2023 Notes," and together with the 2020 Notes, the "Acquisition Notes") were issued pursuant to indentures, which contain covenants that, among other things, limit the ability of the Company to declare or pay dividends. The restriction in the indentures on the Company's ability to pay dividends is subject to certain significant exceptions, including an exception that permits the Company to pay dividends and make other distributions regardless of dollar amount so long as, after giving pro forma effect thereto, the Company would have a consolidated total net leverage ratio, as defined under the indentures, no greater than 3.50 to 1.00. As of April 29, 2017, the Company's consolidated total net leverage ratio, as defined in the indentures, was below 3.50 to 1.00. So long as the Company's consolidated total net leverage ratio remains below 3.50 to 1.00, the indentures do not restrict the ability of the Company to pay dividends.
Credit Facility and Term Loans
The Company's New Senior Secured Credit Facilities, consisting of its $1.25 billion revolving credit facility and term loan facilities, contain covenants that, among other things, limit the ability of the Company to declare or pay dividends. The restriction in the New Senior Secured Credit Facilities on the Company's ability to pay dividends is subject to certain significant exceptions, including an exception that permits the Company to pay dividends and make other restricted payments regardless of dollar amount so long as, after giving pro forma effect thereto, the Company would have a consolidated total net leverage ratio, as defined under the New Senior Secured Credit Facilities, no greater than 3.50 to 1.00. As of April 29, 2017, the Company's consolidated total net leverage ratio, as defined in the New Senior Secured Credit Facilities, was below 3.50 to 1.00. So long as the Company's consolidated

8



total net leverage ratio remains below 3.50 to 1.00, the New Senior Secured Credit Facilities do not restrict the ability of the Company to pay dividends.
Debt Covenants
As of April 29, 2017, the Company was in compliance with its debt covenants.
3. INCOME TAXES
The Company's effective tax rate was 36.1% for the 13 weeks ended April 29, 2017 compared with 29.8% for the 13 weeks ended April 30, 2016. The 2016 tax rate includes a one-time benefit for an election allowing the Family Dollar acquisition to be treated as an asset purchase for certain state tax purposes for the quarter ended April 30, 2016.
4. LEGAL PROCEEDINGS
The Company is a defendant in legal proceedings including those described below and will vigorously defend itself in these matters. The Company does not believe that any of these matters will, individually or in the aggregate, have a material effect on its business or financial condition. The Company cannot give assurance, however, that one or more of these matters will not have a material effect on its results of operations for the quarter or year in which they are resolved.
The Company assesses its legal proceedings and reserves are established if a loss is probable and the amount of such loss can be reasonably estimated. Many if not substantially all of the contingencies described below 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 the Company has determined that a loss is reasonably possible but not probable, the Company is 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. The Company’s 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 the Company 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
In April 2015, a distribution center employee filed a class action in California state court with allegations concerning wages, meal and rest breaks, recovery periods, wage statements and timely termination pay. The employee filed an amended complaint in which he abandoned his attempt to certify a nation-wide class of non-exempt distribution center employees for alleged improper calculation of overtime compensation. The Company removed this lawsuit to federal court. The court is now considering the employee’s motion to certify the case as a state-wide class action.
In April 2015, a former store manager filed a class action along with Private Attorney General Act ("PAGA") claims in California state court alleging store managers were improperly classified as exempt employees and, among other things on behalf of all California store employees, did not receive overtime compensation and meal and rest periods. The former employee also brought class action claims asserting the Company failed to make wage statements readily available to employees who did not receive paper checks. The Company removed the case to federal court where the Court denied certification of the classification issue and related claims but has not ruled on the PAGA claims. The Court did certify a wage statement class.
In April 2016, the Company was served with a putative class action in Florida state court brought by a former store employee asserting the Company violated the Fair Credit Reporting Act in the way it handled background checks. Specifically, the former employee alleged the Company used disclosure forms that did not meet the statute’s requirements and failed to provide notices accompanied by background reports prior to taking adverse actions against prospective and existing employees based on information in the background reports. The plaintiff is seeking statutory damages of $100 to $1,000 per violation.
In April 2016, a former store manager filed a lawsuit in California state court alleging individual claims of pregnancy and disability discrimination in addition to asserting PAGA claims on behalf of herself and other store managers alleging they were improperly classified as exempt and therefore, among other things, did not receive overtime compensation and meal and rest periods. The classification claims have been stayed pending the outcome of other lawsuits which were previously filed alleging similar PAGA claims.
In July 2016, a former non-exempt sales associate filed in federal court in Arkansas a putative nationwide collective action alleging the Company forced sales associates and assistant store managers to work off the clock while clocked out for meal breaks

9



and, as a result, underpaid regular and overtime pay. In September 2016, the court granted the Company’s motion to compel arbitration. To date, the former associate has not initiated any arbitration proceedings.
In March 2017, a former store manager filed suit in a state court in Florida, seeking to represent a collective, alleging failure to pay non-exempt employees minimum wage for all time worked and overtime in violation of the Fair Labor Standards Act, and, individually, alleging race discrimination and retaliation in violation of federal and state civil rights laws. Pursuant to Court order, the case has been sent to arbitration.
Family Dollar Active Matters
In 2008, a complaint was filed alleging discriminatory practices with respect to the pay of Family Dollar's female store managers. Among other things, the plaintiffs seek recovery of back pay, monetary and punitive remedies, interest, attorneys' fees, and equitable relief. In June 2016, the United States District Court in North Carolina ordered that the case be continued for merits discovery. The court also certified the case as a class action of approximately 30,000 current and former female store managers employed as far back as July 2002. A preliminary settlement has been reached in this case and has been properly recorded by the Company. Other aspects of the settlement agreement are still being finalized.
In 2014, a putative class action was filed in a California Federal Court by a former employee alleging that the Company had a policy of requiring employee bag checks while the employees were not clocked in for work. As a result of those actions, the employee alleges the Company violated California law by failing to provide meal periods and rest breaks, failing to pay regular and overtime wages for work performed off the clock, failing to provide accurate wage statements, failing to timely pay all final wages and by engaging in unfair competition. He has also alleged PAGA claims. The former employee dismissed his individual claims after the court ruled that the claims were subject to arbitration. The court ruled that the PAGA claims may proceed.
In January 2017, a customer filed a class action in federal court in Illinois alleging the Company violated various state consumer fraud laws as well as express and implied warranties by selling a product that purported to contain aloe when it did not. The requested class is limited to the state of Illinois. The Company believes that it is fully indemnified by the entities that supplied it with the product.
Family Dollar Resolved Matters
In 2015, former employees filed a nationwide class action in federal court in Connecticut alleging the Company had violated ERISA by overcharging employees who purchased supplemental life insurance through a Company sponsored plan. In March 2016, the district court dismissed the lawsuit. The Second Circuit Court of Appeals affirmed the dismissal of the lawsuit.
5. RECEIVABLE IMPAIRMENT
In connection with its acquisition of Family Dollar, The Company was required to divest 330 stores and partially support these stores through a transition services agreement. Under the transition services agreement, the Company provides merchandise and services and the buyer reimburses the Company.
In the first quarter of 2017, the Company evaluated the collectability of its divestiture-related receivable. Based on information available, the Company determined that the outstanding balance of $50.9 million was not recoverable and recorded an impairment charge to write down the receivable to zero. The charge is recorded as “Receivable impairment” in the accompanying condensed consolidated income statements.
6. FAIR VALUE MEASUREMENTS
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. The Company's 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.
The following table sets forth the Company's financial assets and liabilities that are disclosed at fair value on a recurring basis:

10



(in millions)
 
April 29,
2017
 
January 28,
2017
 
April 30,
2016
Level 1
 
 
 
 
 
 
Short-term investments
 
$
4.0

 
$
4.0

 
$
4.0

Long-term debt - Secured Senior Notes and Acquisition Notes
 
3,745.0

 
3,740.3

 
3,759.6

Level 2
 
 
 
 
 
 
Long-term debt - term loans
 
2,817.7

 
2,828.2

 
3,890.3

The Company's cash and cash equivalents are valued at cost, which approximates fair value, due to the short-term maturities of these instruments.
The fair values of the Company's Secured Senior Notes and Acquisition Notes were determined using Level 1 inputs as quoted prices in active markets for identical assets or liabilities are available. The fair values of the Company's term loans were determined using Level 2 inputs as quoted prices are readily available from pricing services, but the prices are not published. The carrying values of the Company's Tranche A Revolving Credit Facility at April 29, 2017 and January 28, 2017 and the Company's Revolving Credit Facility at April 30, 2016, approximated their fair values because the interest rates vary with market interest rates.
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). The Company did not record any significant impairment charges during the 13 weeks ended April 29, 2017.
7. NET INCOME PER SHARE
The following table sets forth the calculations of basic and diluted net income per share:
 
 
13 Weeks Ended
 
 
April 29,
 
April 30,
(in millions, except per share data)
 
2017
 
2016
Basic net income per share:
 
 
 
 
Net income
 
$
200.5

 
$
232.7

Weighted average number of shares outstanding
 
236.3

 
235.3

Basic net income per share
 
$
0.85

 
$
0.99

Diluted net income per share:
 
 
 
 
Net income
 
$
200.5

 
$
232.7

Weighted average number of shares outstanding
 
236.3

 
235.3

Dilutive effect of stock options and restricted stock (as determined by
applying the treasury stock method)
 
1.0

 
1.1

Weighted average number of shares and dilutive potential shares
outstanding
 
237.3

 
236.4

Diluted net income per share
 
$
0.85

 
$
0.98

For the 13 weeks ended April 29, 2017 and April 30, 2016, substantially all of the stock options outstanding were included in the calculation of the weighted average number of shares and dilutive potential shares outstanding.
8. STOCK-BASED COMPENSATION
The Company's stock-based compensation expense primarily includes the fair value of restricted stock units (RSUs) and employees' purchase rights under the Company's Employee Stock Purchase Plan. Stock-based compensation expense was $27.6 million and $24.8 million during the 13 weeks ended April 29, 2017 and April 30, 2016, respectively.
The Company granted approximately 0.5 million service-based RSUs from the Omnibus Incentive Plan (Omnibus Plan) to employees and officers in the 13 weeks ended April 29, 2017. The estimated $41.5 million fair value of these RSUs is being expensed ratably over the three-year vesting periods, or shorter periods based on the retirement eligibility of certain grantees. The fair value was determined using the Company's closing stock price on the date of grant. The Company recognized $5.6 million of expense related to these RSUs during the 13 weeks ended April 29, 2017.
In the 13 weeks ended April 29, 2017, the Company granted 0.2 million RSUs with a fair value of $18.4 million from the Omnibus Plan to certain officers of the Company, contingent on the Company meeting certain performance targets in fiscal 2017. If the Company meets these performance targets in fiscal 2017, the RSUs will vest ratably over three years. The estimated fair value of these RSUs is being expensed ratably over the three-year vesting periods, or shorter periods based on the retirement eligibility of certain grantees. The Company recognized $10.7 million of expense related to these RSUs in the 13 weeks ended April 29, 2017.
In the 13 weeks ended April 29, 2017, the Company granted RSUs with a fair value of $4.1 million from the Omnibus Plan to certain officers of the Company, contingent on the Company meeting certain performance targets for the period beginning on January 29, 2017 and ending on February 1, 2020. Provided the vesting conditions are satisfied, the awards will vest at the end

11



of the performance period. The estimated fair value of these RSUs is being expensed ratably over the three-year vesting period, or shorter periods based on the retirement eligibility of certain grantees. The Company recognized $1.7 million of expense related to these RSUs in the 13 weeks ended April 29, 2017.
The Company recognized $8.3 million of expense related to RSUs granted prior to fiscal 2017 in the 13 weeks ended April 29, 2017. For the 13 weeks ended April 30, 2016, the Company recognized $8.1 million of expense related to these RSU's.
The Company recognized $0.1 million of expense related to options granted prior to fiscal 2017 in the 13 weeks ended April 29, 2017.
In the 13 weeks ended April 29, 2017, approximately 0.6 million RSUs vested and approximately 0.4 million shares, net of taxes, were issued. During the 13 weeks ended April 30, 2016, approximately 0.6 million RSUs vested and approximately 0.4 million shares, net of taxes, were issued.
In connection with the Family Dollar acquisition, the Company converted approximately 1.5 million Family Dollar vested and unvested options into equivalent options to purchase Dollar Tree Common Stock at the date of the acquisition and recognized $0.4 million of expense related to these options during the 13 weeks ended April 29, 2017. The Company recognized $0.7 million of expense related to these options during the 13 weeks ended April 30, 2016. Stock options are valued using the Black-Scholes option-pricing model and compensation cost is recognized on a straight-line basis over the requisite service period.
9. SEGMENTS
The Company operates a chain of more than 14,400 retail discount stores in 48 states and five Canadian provinces. The Company's operations are conducted in two reporting business segments: Dollar Tree and Family Dollar. The Company defines its segments as those operations whose results its 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 at the fixed price of $1.00. The Dollar Tree segment includes the Company's operations under the "Dollar Tree" and "Dollar Tree Canada" brands, 11 distribution centers in the United States, two distribution centers in Canada and a Store Support Center in Chesapeake, Virginia.
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 the Company's operations under the "Family Dollar" brand, 11 distribution centers and a Store Support Center in Matthews, North Carolina.
The Company measures the results of its segments using, among other measures, each segment's net sales, gross profit and operating income. The Company may revise the measurement of each segment's operating income, including the allocation of distribution center and Store Support Center costs, as determined by the information regularly reviewed by the CODM. When the measurement of a segment changes, previous period amounts and balances are reclassified to be comparable to the current period's presentation.
Net sales by segment are as follows:
 
 
13 Weeks Ended
 
 
April 29,
 
April 30,
(in millions)
 
2017
 
2016
Net sales:
 
 
 
 
     Dollar Tree
 
$
2,571.7

 
$
2,384.5

Family Dollar
 
2,715.4

 
2,701.3

Total net sales
 
$
5,287.1

 
$
5,085.8


12



Gross profit by segment is as follows:
 
 
13 Weeks Ended
 
 
April 29,
 
April 30,
(in millions)
 
2017
 
2016
Gross profit:
 
 
 
 
     Dollar Tree
 
$
896.6

 
$
820.8

Family Dollar
 
730.5

 
733.8

Total gross profit
 
$
1,627.1

 
$
1,554.6

Depreciation and amortization expense by segment is as follows:
 
 
13 Weeks Ended
 
 
April 29,
 
April 30,
(in millions)
 
2017
 
2016
Depreciation and amortization expense:
 
 
 
 
     Dollar Tree
 
$
61.5

 
$
57.5

Family Dollar
 
92.4

 
104.9

Total depreciation and amortization expense
 
$
153.9

 
$
162.4

Operating income by segment is as follows:
 
 
13 Weeks Ended
 
 
April 29,
 
April 30,
(in millions)
 
2017
 
2016
Operating income:
 
 
 
 
     Dollar Tree
 
$
315.4

 
$
280.7

Family Dollar
 
73.4

 
138.0

Total operating income
 
$
388.8

 
$
418.7

Total assets by segment are as follows:
 
 
As of
 
 
April 29,
 
January 28,
 
April 30,
(in millions)
 
2017
 
2017
 
2016
Total assets:
 
 
 
 
 
 
     Dollar Tree
 
$
3,906.4

 
$
3,705.5

 
$
3,612.3

Family Dollar
 
12,088.3

 
11,996.1

 
12,448.6

Total assets
 
$
15,994.7

 
$
15,701.6

 
$
16,060.9


13



Total goodwill by segment is as follows:
 
 
As of
 
 
April 29,
 
January 28,
 
April 30,
(in millions)
 
2017
 
2017
 
2016
Total goodwill:
 
 
 
 
 
 
     Dollar Tree
 
$
344.3

 
$
345.4

 
$
286.9

Family Dollar
 
4,678.1

 
4,678.1

 
4,738.0

Total goodwill
 
$
5,022.4

 
$
5,023.5

 
$
5,024.9

Goodwill is reassigned between segments when stores are rebannered between segments. There were no stores rebannered between segments in the 13 weeks ended April 29, 2017. In the 13 weeks ended April 30, 2016, the Company reassigned $0.1 million of goodwill from Family Dollar to Dollar Tree as a result of rebannering.
10. CONDENSED CONSOLIDATING FINANCIAL INFORMATION
At April 29, 2017, the Company had outstanding $750.0 million principal amount of 5.25% Acquisition Notes due March 1, 2020 and $2,500.0 million principal amount of 5.75% Acquisition Notes due March 1, 2023, which are unsecured obligations of the Company and are also fully, unconditionally, jointly and severally guaranteed on an unsecured, unsubordinated basis, subject to certain exceptions, by certain of the Company's direct or indirect wholly-owned U.S. subsidiaries, including Family Dollar and certain of its subsidiaries. All of the subsidiaries, guarantor and non-guarantor are 100% owned by the parent. Supplemental condensed consolidated financial information of the Company, including such information for the Guarantors, is presented below. The information is presented in accordance with the requirements of Rule 3-10 under Regulation S-X of the Securities and Exchange Commission (the "SEC"). The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the guarantor or the non-guarantor subsidiaries operated as independent entities. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial statements of the Guarantors are not provided as the condensed consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups. The Company completed the exchange of the Acquisition Notes for registered notes with substantially identical terms on August 1, 2016.

14



Condensed Consolidating Statements of Comprehensive Income
 
 
13 Weeks Ended April 29, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
5,247.4

 
$
68.7

 
$
(29.0
)
 
$
5,287.1

Cost of sales
 

 
3,631.7

 
39.1

 
(10.8
)
 
3,660.0

Gross profit
 

 
1,615.7

 
29.6

 
(18.2
)
 
1,627.1

Selling, general and administrative
   expenses
 
1.4

 
1,222.0

 
33.0

 
(18.1
)
 
1,238.3

Operating income (loss)
 
(1.4
)
 
393.7

 
(3.4
)
 
(0.1
)
 
388.8

Interest expense (income), net
 
57.5

 
19.1

 
(1.9
)
 

 
74.7

Other (income) expense, net
 

 

 
0.3

 

 
0.3

Income (loss) before income taxes
 
(58.9
)
 
374.6

 
(1.8
)
 
(0.1
)
 
313.8

Income tax expense (benefit)
 
(27.4
)
 
140.2

 
0.5

 

 
113.3

Equity in earnings of subsidiaries
 
(232.0
)
 
0.1

 

 
231.9

 

Net income
 
200.5

 
234.3

 
(2.3
)
 
(232.0
)
 
200.5

Other comprehensive loss
 
(3.0
)
 
(0.9
)
 
(3.0
)
 
3.9

 
(3.0
)
Comprehensive income
 
$
197.5

 
$
233.4

 
$
(5.3
)
 
$
(228.1
)
 
$
197.5

 
 
13 Weeks Ended April 30, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
5,033.4

 
$
184.8

 
$
(132.4
)
 
$
5,085.8

Cost of sales
 

 
3,489.8

 
160.6

 
(119.2
)
 
3,531.2

Gross profit
 

 
1,543.6

 
24.2

 
(13.2
)
 
1,554.6

Selling, general and administrative
   expenses
 
2.0

 
1,138.0

 
14.6

 
(18.7
)
 
1,135.9

Operating income (loss)
 
(2.0
)
 
405.6

 
9.6

 
5.5

 
418.7

Interest expense (income), net
 
72.9

 
16.3

 
(1.9
)
 

 
87.3

Other income, net
 
(5.7
)
 
(0.3
)
 
(0.1
)
 
5.9

 
(0.2
)
Income (loss) before income taxes
 
(69.2
)
 
389.6

 
11.6

 
(0.4
)
 
331.6

Income tax expense (benefit)
 
(33.7
)
 
129.2

 
3.5

 
(0.1
)
 
98.9

Equity in earnings of subsidiaries
 
(268.5
)
 
(6.9
)
 

 
275.4

 

Net income
 
233.0

 
267.3

 
8.1

 
(275.7
)
 
232.7

Other comprehensive income
 
8.9

 
2.7

 
8.9

 
(11.6
)
 
8.9

Comprehensive income
 
$
241.9

 
$
270.0

 
$
17.0

 
$
(287.3
)
 
$
241.6



15



Condensed Consolidating Balance Sheets
 
 
April 29, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
468.4

 
$
519.1

 
$
167.4

 
$

 
$
1,154.9

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
2,838.8

 
41.2

 
(1.6
)
 
2,878.4

Current deferred tax assets, net
 

 
(8.2
)
 
8.2

 

 

Due from intercompany, net
 
90.2

 
1,081.6

 
18.2

 
(1,190.0
)
 

Other current assets
 
0.7

 
234.1

 
4.3

 
1.7

 
240.8

Total current assets
 
559.3

 
4,665.4

 
243.3

 
(1,189.9
)
 
4,278.1

Property, plant and equipment, net
 

 
3,066.6

 
27.3

 

 
3,093.9

Assets available for sale
 

 
10.6

 

 

 
10.6

Goodwill
 

 
4,993.1

 
29.3

 

 
5,022.4

Favorable lease rights, net
 

 
443.4

 

 

 
443.4

Tradename intangible asset
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.0

 

 

 
5.0

Investment in subsidiaries
 
8,873.4

 
105.4

 

 
(8,978.8
)
 

Intercompany note receivable
 
1,926.4

 

 
188.8

 
(2,115.2
)
 

Due from intercompany, net
 
1,215.9

 

 

 
(1,215.9
)
 

Other assets
 

 
41.1

 
3.2

 
(3.0
)
 
41.3

Total assets
 
$
12,575.0

 
$
16,430.6

 
$
491.9

 
$
(13,502.8
)
 
$
15,994.7

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
165.9

 
$

 
$

 
$

 
$
165.9

Accounts payable
 

 
1,213.9

 
10.0

 

 
1,223.9

Due to intercompany, net
 
878.7

 
277.6

 
33.7

 
(1,190.0
)
 

Other current liabilities
 
13.1

 
405.1

 
211.3

 

 
629.5

Income taxes payable
 
90.5

 
130.6

 
0.2

 

 
221.3

Total current liabilities
 
1,148.2

 
2,027.2

 
255.2

 
(1,190.0
)
 
2,240.6

Long-term debt, net, excluding
   current portion
 
5,815.9

 
315.8

 

 

 
6,131.7

Unfavorable lease rights, net
 

 
117.6

 

 

 
117.6

Deferred tax liabilities, net
 
1.9

 
1,431.7

 

 

 
1,433.6

Income taxes payable, long-term
 

 
71.8

 

 

 
71.8

Due to intercompany, net
 

 
1,215.9

 

 
(1,215.9
)
 

Intercompany note payable
 

 
2,115.2

 

 
(2,115.2
)
 

Other liabilities
 

 
385.5

 
7.8

 
(2.9
)
 
390.4

Total liabilities
 
6,966.0

 
7,680.7

 
263.0

 
(4,524.0
)
 
10,385.7

Shareholders' equity
 
5,609.0

 
8,749.9

 
228.9

 
(8,978.8
)
 
5,609.0

Total liabilities and equity
 
$
12,575.0

 
$
16,430.6

 
$
491.9

 
$
(13,502.8
)
 
$
15,994.7


16



Condensed Consolidating Balance Sheets (Continued)
 
 
January 28, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
562.4

 
$
139.2

 
$
164.8

 
$

 
$
866.4

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
2,826.3

 
41.2

 
(1.7
)
 
2,865.8

Current deferred tax assets, net
 

 
(9.3
)
 
9.3

 

 

Due from intercompany, net
 
58.7

 
1,041.5

 
42.8

 
(1,143.0
)
 

Other current assets
 
0.5

 
198.7

 
2.3

 
0.3

 
201.8

Total current assets
 
621.6

 
4,196.4

 
264.4

 
(1,144.4
)
 
3,938.0

Property, plant and equipment, net
 

 
3,085.3

 
30.5

 

 
3,115.8

Assets available for sale
 

 
9.0

 

 

 
9.0

Goodwill
 

 
4,993.1

 
30.4

 

 
5,023.5

Favorable lease rights, net
 

 
468.6

 

 

 
468.6

Tradename intangible asset
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.1

 

 

 
5.1

Investment in subsidiaries
 
8,640.1

 
106.6

 

 
(8,746.7
)
 

Intercompany note receivable
 
1,926.4

 

 
188.8

 
(2,115.2
)
 

Due from intercompany, net
 
1,243.8

 

 

 
(1,243.8
)
 

Other assets
 

 
41.3

 
3.3

 
(3.0
)
 
41.6

Total assets
 
$
12,431.9

 
$
16,005.4

 
$
517.4

 
$
(13,253.1
)
 
$
15,701.6

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
152.1

 
$

 
$

 
$

 
$
152.1

Accounts payable
 

 
1,105.9

 
14.7

 
(1.0
)
 
1,119.6

Due to intercompany, net
 
969.6

 
121.5

 
51.9

 
(1,143.0
)
 

Other current liabilities
 
66.4

 
470.5

 
207.3

 

 
744.2

Income taxes payable
 
(1.9
)
 
91.0

 
0.9

 

 
90.0

Total current liabilities
 
1,186.2

 
1,788.9

 
274.8

 
(1,144.0
)
 
2,105.9

Long-term debt, net, excluding
   current portion
 
5,853.9

 
315.8

 

 

 
6,169.7

Unfavorable lease rights, net
 

 
124.0

 

 

 
124.0

Deferred tax liabilities, net
 
2.0

 
1,456.9

 

 

 
1,458.9

Income taxes payable, long-term
 

 
71.2

 

 

 
71.2

Due to intercompany, net
 

 
1,243.8

 

 
(1,243.8
)
 

Intercompany note payable
 

 
2,115.2

 

 
(2,115.2
)
 

Other liabilities
 

 
377.5

 
8.1

 
(3.2
)
 
382.4

Total liabilities
 
7,042.1

 
7,493.3

 
282.9

 
(4,506.2
)
 
10,312.1

Shareholders' equity
 
5,389.8

 
8,512.1

 
234.5

 
(8,746.9
)
 
5,389.5

Total liabilities and equity
 
$
12,431.9

 
$
16,005.4

 
$
517.4

 
$
(13,253.1
)
 
$
15,701.6


17



Condensed Consolidating Balance Sheets (Continued)
 
 
April 30, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
783.6

 
$
151.0

 
$
(4.9
)
 
$
929.7

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
2,872.0

 
49.9

 
7.6

 
2,929.5

Current deferred tax assets, net
 

 

 
8.1

 
(8.1
)
 

Due from intercompany, net
 
38.8

 
505.3

 
102.8

 
(646.9
)
 

Other current assets
 
0.4

 
313.2

 

 
(4.7
)
 
308.9

Total current assets
 
39.2

 
4,474.1

 
315.8

 
(657.0
)
 
4,172.1

Property, plant and equipment, net
 

 
3,114.9

 
38.3

 

 
3,153.2

Assets available for sale
 

 
11.7

 

 

 
11.7

Goodwill
 

 
4,993.1

 
31.8

 

 
5,024.9

Deferred tax assets, net
 
0.6

 

 

 
(0.6
)
 

Favorable lease rights, net
 

 
543.9

 

 

 
543.9

Tradename intangible asset
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.4

 
0.2

 

 
5.6

Investment in subsidiaries
 
8,667.9

 
104.0

 

 
(8,771.9
)
 

Intercompany note receivable
 
1,526.4

 

 
188.8

 
(1,715.2
)
 

Due from intercompany, net
 
1,923.4

 

 

 
(1,923.4
)
 

Other assets
 

 
49.3

 
4.5

 
(4.3
)
 
49.5

Total assets
 
$
12,157.5

 
$
16,396.4

 
$
579.4

 
$
(13,072.4
)
 
$
16,060.9

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
120.5

 
$

 
$

 
$

 
$
120.5

Accounts payable
 
4.8

 
1,180.4

 
72.2

 
2.9

 
1,260.3

Due to intercompany, net
 
402.7

 
207.7

 
36.5

 
(646.9
)
 

Other current liabilities
 
34.6

 
387.9

 
204.7

 
(5.1
)
 
622.1

Income taxes payable
 
32.7

 
4.4

 
9.1

 

 
46.2

Total current liabilities
 
595.3

 
1,780.4

 
322.5

 
(649.1
)
 
2,049.1

Long-term debt, net, excluding
   current portion
 
6,892.6

 
317.2

 

 

 
7,209.8

Unfavorable lease rights, net
 

 
142.9

 

 

 
142.9

Deferred tax liabilities, net
 

 
1,574.8

 

 
(8.6
)
 
1,566.2

Income taxes payable, long-term
 

 
71.1

 

 

 
71.1

Due to intercompany, net
 

 
1,923.4

 

 
(1,923.4
)
 

Intercompany note payable
 

 
1,715.2

 

 
(1,715.2
)
 

Other liabilities
 

 
347.5

 
8.9

 
(4.2
)
 
352.2

Total liabilities
 
7,487.9

 
7,872.5

 
331.4

 
(4,300.5
)
 
11,391.3

Shareholders' equity
 
4,669.6

 
8,523.9

 
248.0

 
(8,771.9
)
 
4,669.6

Total liabilities and equity
 
$
12,157.5

 
$
16,396.4

 
$
579.4

 
$
(13,072.4
)
 
$
16,060.9



18



Condensed Consolidating Statements of Cash Flows
 
 
13 Weeks Ended April 29, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net cash provided by (used in) operating
   activities
 
$
(60.4
)
 
$
515.5

 
$
3.4

 
$
(27.8
)
 
$
430.7

Cash flows from investing activities:
 
 

 
 

 
 
 
 
 
 
Capital expenditures
 

 
(110.0
)
 
(0.3
)
 

 
(110.3
)
Other
 

 
2.2

 

 

 
2.2

Net cash used in investing activities
 

 
(107.8
)
 
(0.3
)
 

 
(108.1
)
Cash flows from financing activities:
 
 

 
 

 
 
 
 
 
 
Principal payments for long-term debt
 
(27.8
)
 

 

 

 
(27.8
)
Dividends paid
 

 
(27.8
)
 

 
27.8

 

Proceeds from stock issued pursuant to
   stock-based compensation plans
 
11.8

 

 

 

 
11.8

Cash paid for taxes on exercises/vesting of
   stock-based compensation
 
(17.6
)
 

 

 

 
(17.6
)
Net cash provided by (used in)
   financing activities
 
(33.6
)
 
(27.8
)
 

 
27.8

 
(33.6
)
Effect of exchange rate changes on cash and
   cash equivalents
 

 

 
(0.5
)
 


 
(0.5
)
Net (decrease) increase in cash and cash
   equivalents
 
(94.0
)
 
379.9

 
2.6

 

 
288.5

Cash and cash equivalents at beginning of
   period
 
562.4

 
139.2

 
164.8

 

 
866.4

Cash and cash equivalents at end of period
 
$
468.4

 
$
519.1

 
$
167.4

 
$

 
$
1,154.9


19



Condensed Consolidating Statements of Cash Flows (continued)
 
 
13 Weeks Ended April 30, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net cash provided by operating activities
 
$
24.8

 
$
238.9

 
$
34.9

 
$
12.4

 
$
311.0

Cash flows from investing activities:
 
 

 
 

 
 
 
 
 
 
Capital expenditures
 

 
(175.3
)
 
(0.6
)
 

 
(175.9
)
Purchase of restricted investments
 

 
(36.1
)
 

 

 
(36.1
)
Proceeds from sale of restricted
   investments
 

 
118.1

 

 

 
118.1

Other
 

 
1.1

 

 

 
1.1

Net cash used in investing activities
 

 
(92.2
)
 
(0.6
)
 

 
(92.8
)
Cash flows from financing activities:
 
 

 
 

 
 
 
 
 
 
Principal payments for long-term debt
 
(20.8
)
 

 

 

 
(20.8
)
Other
 
(4.0
)