Dollar Tree, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Jan. 28, 2012

Income Tax Expense (Benefit), Intraperiod Tax Allocation Table

Total income taxes were allocated as follows:

	Year Ended
	January 28,			January 29,			January 30,
	2012			2011			2010
(in millions)

Income from continuing operations	$	291.2		$	232.6		$	187.1
Accumulated other comprehensive income (loss)
marking derivative financial instruments
to fair value		(0.1	)		1.3			0.1
Stockholders' equity, tax benefit on
exercises/vesting of equity-based
compensation		(13.8	)		(7.8	)		(3.9	)
	$	277.3		$	226.1		$	183.3

Income tax provision (benefit) Table

The provision for income taxes consists of the following:

	Year Ended
	January 28,			January 29,			January 30,
(in millions)	2012			2011			2010
Federal - current	$	240.4		$	215.7		$	160.2
State - current		39.4			31.3			27.5
Foreign - current		0.3			-			-
Total current		280.1			247.0			187.7

Federal - deferred		14.9			(10.0	)		(0.4	)
State - deferred		0.1			(4.4	)		(0.2	)
Foreign - deferred		(3.9	)		-			-
Total deferred		11.1			(14.4	)		(0.6	)

Federal statutory tax rate reconciliation Table

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

	Year Ended
	January 28,			January 29,			January 30,
	2012			2011			2010

Statutory tax rate		35.0	%		35.0	%		35.0	%
Effect of:
State and local income taxes,
net of federal income tax
benefit		3.4			3.4			3.3
Other, net		(1.0	)		(1.5	)		(1.4	)
Effective tax rate		37.4	%		36.9	%		36.9	%

Components of Deferred Tax Assets and Liabilities Table

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. Deferred tax assets and liabilities are classified on the accompanying consolidated balance sheets based on the classification of the underlying asset or liability. Significant components of the Company's net deferred tax assets (liabilities) follow:

	January 28,			January 29,
	2012			2011
(in millions)
Deferred tax assets:
Deferred rent	$	31.5		$	31.4
Accrued expenses		31.4			25.4
Net operating losses and credit
carryforwards		9.1			6.4
Accrued compensation expense		27.0			22.5
Other		1.5			1.9
Total deferred tax assets		100.5			87.6
Valuation allowance		(3.5	)		(4.8	)
Deferred tax assets, net		97.0			82.8

Deferred tax liabilities:
Property and equipment		(34.0	)		(4.6	)
Goodwill		(15.1	)		(15.8	)
Prepaid expenses		(0.4	)		(3.8	)
Inventory		(4.5	)		(4.3	)
Total deferred tax liabilities		(54.0	)		(28.5	)

Net deferred tax asset	$	43.0		$	54.3

Reconciliation of Unrecognized Tax Benefits Table

The balance for unrecognized tax benefits at January 28, 2012, was $15.5 million. The total amount of unrecognized tax benefits at January 28, 2012, that, if recognized, would affect the effective tax rate was $10.2 million (net of the federal tax benefit). The following is a reconciliation of the Company’s total gross unrecognized tax benefits for the year ended January 28, 2012:

	(in millions)
Balance at January 29, 2011	$	15.2
Additions, based on tax positions related to current year		0.8
Additions for tax positions of prior years		0.6
Reductions for tax positions of prior years		-
Settlements		-
Lapses in statutes of limitation		(1.1	)
Balance at January 28, 2012	$	15.5