Quarterly report pursuant to Section 13 or 15(d)

ACQUISTION

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ACQUISTION
 6 Months Ended
Jul. 30, 2016
Business Combinations [Abstract]  
ACQUISITION
ACQUISITION
No adjustments to the fair values of the identifiable assets acquired and liabilities assumed as of the Acquisition Date of July 6, 2015 were recorded in the 26 weeks ended July 30, 2016.
Goodwill is calculated as the excess of the purchase price over the net assets acquired. The goodwill recognized is attributable to growth opportunities and expected synergies of at least $300 million annually, which is expected to be achieved by the third year following the Acquisition Date. Expected sources of synergies include the following:
•
Savings from sourcing and procurement of merchandise and non-merchandise goods and services driven by leveraging the combined volume of the Dollar Tree and Family Dollar banners, among other things;
•
Rebannering to optimize store formats;
•
A reduction in overhead and corporate selling, general and administrative expenses by eliminating redundant positions and optimizing processes; and
•
Savings resulting from the optimization of distribution and logistics networks.
The following unaudited consolidated pro forma summary has been prepared by adjusting the Company's historical data to give effect to the Acquisition as if it had occurred on February 2, 2014:
 
 
Pro Forma - Unaudited
 
 
13 Weeks Ended
 
26 Weeks Ended
(in millions, except per share data)
 
August 1, 2015
 
August 1, 2015
Net sales
 
$
4,802.0

 
$
9,599.9

Net income
 
$
81.3

 
$
231.1

Basic net income per share
 
$
0.35

 
$
0.98

Diluted net income per share
 
$
0.34

 
$
0.98


The unaudited consolidated pro forma financial information was prepared in accordance with existing standards and is not necessarily indicative of the results of operations that would have occurred if the Acquisition had been completed on the date indicated, nor is it indicative of the future operating results of the Company.
The unaudited pro forma results do not reflect events that either have occurred or may occur after the Acquisition, including, but not limited to, the anticipated realization of ongoing savings from operating synergies in subsequent periods. They also do not give effect to certain charges that the Company incurred in connection with the Acquisition, including, but not limited to, additional professional fees, employee integration, retention and severance costs, potential asset impairments, or product rationalization charges. Material non-recurring adjustments excluded from the pro forma financial information above consist of the effects of the divested stores and the step-up of Family Dollar inventory to its fair value. Acquisition expenses totaled $17.6 million and $28.0 million in the 13 and 26 weeks ended August 1, 2015, respectively.
For more detailed discussions of the Acquisition, please see "Note 2 - Acquisition" of "Item 8. Financial Statements and Supplementary Data" and the "Acquisition” section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K filed March 28, 2016.