Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q
(Mark One)
(X)☒Quarterly report pursuant to SectionQUARTERLY REPORT PURSUANT TO SECTION 13 orOR 15(d) of the Securities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 28, 2017April 30, 2022
ORor
( )☐Transition report pursuant to SectionTRANSITION REPORT PURSUANT TO SECTION 13 orOR 15(d) of the Securities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-25464
dltr-20220430_g1.gif
DOLLAR TREE, INC.
(Exact name of registrant as specified in its charter)

Virginia26-2018846
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
500 Volvo Parkway Chesapeake, Virginia23320
Chesapeake,Virginia23320
(Address of principal executive offices)(Zip Code)


(757) 321-5000
(Registrant'sRegistrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per shareDLTRNASDAQ Global Select Market
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 ( )☐



Table of Contents
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.        
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
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. ( )


☐
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 November 16, 2017,May 24, 2022, there were 237,096,516224,556,036 shares of the Registrant's Common Stockregistrant’s common stock outstanding.



2

DOLLAR TREE, INC.
INDEXFORM 10-Q
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2022
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1.Page
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements:
Unaudited
Condensed Consolidated Income Statements for the 13 and 39 Weeks Ended October 28, 2017 and October 29, 2016
4
Unaudited
Condensed Consolidated Statements of Comprehensive Income for the 13 and 39 Weeks Ended October 28, 2017 and October 29, 2016
5
Unaudited
Condensed Consolidated Balance Sheets as of October 28, 2017, January 28, 2017 and October 29, 2016
6
Condensed Consolidated Statements of Shareholders’ Equity
7
Unaudited
Condensed Consolidated Statements of Cash Flows for the 39 Weeks Ended October 28, 2017 and October 29, 2016
78
Notes to Unaudited Condensed Consolidated Financial Statements
89
Item 2.Management's
2316
Item 3.
3225
Item 4.
3225
PART II - OTHER INFORMATION
Item 1.
3327
Item 1A.
3327
Item 2.
3327
Item 3.
3327
Item 4.
3327
Item 5.
3328
Item 6.Exhibits
28
Signatures
3529



3
Part
Table of Contents
PART I - FINANCIAL INFORMATION


Item 1. FINANCIAL STATEMENTS.Financial Statements.


DOLLAR TREE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
 13 Weeks Ended 39 Weeks Ended 13 Weeks Ended
 October 28, October 29, October 28, October 29, April 30,May 1,
(in millions, except per share data) 2017 2016 2017 2016(in millions, except per share data)20222021
Net sales $5,316.6
 $5,001.6
 $15,884.9
 $15,083.7
Net sales$6,900.1 $6,476.8 
Other revenueOther revenue2.5 2.9 
Total revenueTotal revenue6,902.6 6,479.7 
Cost of sales 3,650.6
 3,481.1
 10,964.0
 10,496.3
Cost of sales4,559.6 4,512.7 
Gross profit 1,666.0
 1,520.5
 4,920.9
 4,587.4
Selling, general and administrative expenses,
excluding Receivable impairment
 1,240.8
 1,178.1
 3,633.9
 3,469.1
Receivable impairment —
 —
 53.5
 —
Selling, general and administrative expenses 1,240.8
 1,178.1
 3,687.4
 3,469.1
Selling, general and administrative expenses1,611.5 1,447.1 
Operating income 425.2
 342.4
 1,233.5
 1,118.3
Operating income731.5 519.9 
Interest expense, net 69.7
 112.1
 220.2
 286.7
Interest expense, net34.0 33.0 
Other (income) expense, net 0.4
 0.1
 0.8
 (0.1)
Income before income taxes 355.1
 230.2
 1,012.5
 831.7
Income before income taxes697.5 486.9 
Income tax expense 115.2
 58.6
 338.3
 257.3
Provision for income taxesProvision for income taxes161.1 112.4 
Net income $239.9
 $171.6
 $674.2
 $574.4
Net income$536.4 $374.5 
Basic net income per share $1.01
 $0.73
 $2.85
 $2.44
Basic net income per share$2.38 $1.61 
Diluted net income per share $1.01
 $0.72
 $2.84
 $2.43
Diluted net income per share$2.37 $1.60 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.




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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 13 Weeks Ended 39 Weeks Ended13 Weeks Ended
 October 28, October 29, October 28, October 29,April 30,May 1,
(in millions) 2017 2016 2017 2016(in millions)20222021
Net income $239.9
 $171.6
 $674.2
 $574.4
Net income$536.4 $374.5 
        
Foreign currency translation adjustments (2.7) (2.4) 2.3
 4.2
Foreign currency translation adjustments(0.1)5.0 
        
Total comprehensive income $237.2
 $169.2
 $676.5
 $578.6
Total comprehensive income$536.3 $379.5 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.






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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions) October 28, 2017 January 28, 2017 October 29, 2016(in millions)April 30, 2022January 29, 2022May 1, 2021
ASSETS      ASSETS  
Current assets:      Current assets:  
Cash and cash equivalents $400.1
 $866.4
 $733.8
Cash and cash equivalents$1,218.5 $984.9 $1,473.9 
Short-term investments —
 4.0
 4.0
Merchandise inventories, net 3,397.8
 2,865.8
 3,273.9
Merchandise inventoriesMerchandise inventories4,801.1 4,367.3 3,604.6 
Other current assets 174.7
 201.8
 330.7
Other current assets262.7 257.0 226.4 
Total current assets 3,972.6
 3,938.0
 4,342.4
Total current assets6,282.3 5,609.2 5,304.9 
Property, plant and equipment, net of accumulated depreciation
of $3,060.1, $2,694.5 and $2,567.3, respectively
 3,178.9
 3,115.8
 3,176.3
Assets available for sale 8.6
 9.0
 11.6
Property, plant and equipment, net of accumulated depreciation
of $5,525.9, $5,363.8 and $4,917.2, respectively
Property, plant and equipment, net of accumulated depreciation
of $5,525.9, $5,363.8 and $4,917.2, respectively
4,514.0 4,477.3 4,182.4 
Restricted cashRestricted cash53.4 53.4 46.9 
Operating lease right-of-use assetsOperating lease right-of-use assets6,364.9 6,425.3 6,356.5 
Goodwill 5,024.3
 5,023.5
 5,022.9
Goodwill1,984.3 1,984.4 1,985.6 
Favorable lease rights, net of accumulated amortization of
$224.7, $159.3 and $135.4, respectively
 398.0
 468.6
 493.8
Tradename intangible asset 3,100.0
 3,100.0
 3,100.0
Other intangible assets, net 4.9
 5.1
 5.2
Trade name intangible assetTrade name intangible asset3,100.0 3,100.0 3,100.0 
Deferred tax assetDeferred tax asset19.3 20.3 24.4 
Other assets 42.9
 41.6
 42.8
Other assets54.1 51.9 50.0 
Total assets $15,730.2
 $15,701.6
 $16,195.0
Total assets$22,372.3 $21,721.8 $21,050.7 
LIABILITIES AND SHAREHOLDERS' EQUITY  
  
  
LIABILITIES AND SHAREHOLDERS’ EQUITYLIABILITIES AND SHAREHOLDERS’ EQUITY   
Current liabilities:  
  
  
Current liabilities:   
Current portion of long-term debt $165.9
 $152.1
 $145.8
Current portion of operating lease liabilitiesCurrent portion of operating lease liabilities$1,406.7 $1,407.8 $1,355.6 
Accounts payable 1,181.3
 1,119.6
 1,266.4
Accounts payable1,794.1 1,884.2 1,520.7 
Income taxes payableIncome taxes payable162.8 82.6 169.5 
Other current liabilities 692.7
 744.2
 722.0
Other current liabilities926.3 802.0 856.4 
Income taxes payable —
 90.0
 —
Total current liabilities 2,039.9
 2,105.9
 2,134.2
Total current liabilities4,289.9 4,176.6 3,902.2 
Long-term debt, net, excluding current portion 5,557.0
 6,169.7
 6,938.0
Unfavorable lease rights, net of accumulated amortization of
$57.0, $39.6 and $33.4, respectively
 105.7
 124.0
 130.2
Deferred tax liabilities, net 1,472.4
 1,458.9
 1,495.5
Long-term debt, netLong-term debt, net3,418.1 3,417.0 3,227.8 
Operating lease liabilities, long-termOperating lease liabilities, long-term5,087.9 5,145.5 5,099.2 
Deferred income taxes, netDeferred income taxes, net1,060.7 987.2 1,035.7 
Income taxes payable, long-term 45.1
 71.2
 72.3
Income taxes payable, long-term21.2 20.9 23.7 
Other liabilities 393.6
 382.4
 377.1
Other liabilities253.0 256.1 350.8 
Total liabilities 9,613.7
 10,312.1
 11,147.3
Total liabilities14,130.8 14,003.3 13,639.4 
Commitments and contingencies      
Shareholders' equity 6,116.5
 5,389.5
 5,047.7
Total liabilities and shareholders' equity $15,730.2
 $15,701.6
 $16,195.0
Commitments and contingencies (Note 2)Commitments and contingencies (Note 2)000
Shareholders’ equityShareholders’ equity8,241.5 7,718.5 7,411.3 
Total liabilities and shareholders’ equityTotal liabilities and shareholders’ equity$22,372.3 $21,721.8 $21,050.7 
      
Common shares outstanding 237.1
 236.1
 236.0
Common shares outstanding225.5 225.1 231.8 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.






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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
13 Weeks Ended April 30, 2022
(in millions)Common
Stock
Shares		Common
Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Shareholders'
Equity
Balance at January 29, 2022225.1 $2.2 $1,243.9 $(35.2)$6,507.6 $7,718.5 
Net income— — — — 536.4 536.4 
Total other comprehensive loss— — — (0.1)— (0.1)
Issuance of stock under Employee Stock
    Purchase Plan		— — 2.9 — — 2.9 
Stock-based compensation, net0.5 — (2.0)— — (2.0)
Repurchase of stock(0.1)— (14.2)— — (14.2)
Balance at April 30, 2022225.5 $2.2 $1,230.6 $(35.3)$7,044.0 $8,241.5 
13 Weeks Ended May 1, 2021
(in millions)Common
Stock
Shares		Common
Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Shareholders'
Equity
Balance at January 30, 2021233.4 $2.3 $2,138.5 $(35.2)$5,179.7 $7,285.3 
Net income— — — — 374.5 374.5 
Total other comprehensive income— — — 5.0 — 5.0 
Issuance of stock under Employee Stock
    Purchase Plan		0.1 — 3.8 — — 3.8 
Exercise of stock options— — 0.2 — — 0.2 
Stock-based compensation, net0.5 — (7.5)— — (7.5)
Repurchase of stock(2.2)— (250.0)— — (250.0)
Balance at May 1, 2021231.8 $2.3 $1,885.0 $(30.2)$5,554.2 $7,411.3 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 39 Weeks Ended 13 Weeks Ended
 October 28, October 29, April 30,May 1,
(in millions) 2017 2016(in millions)20222021
Cash flows from operating activities:    Cash flows from operating activities:  
Net income $674.2
 $574.4
Net income$536.4 $374.5 
Adjustments to reconcile net income to net cash provided by operating activities:  
  
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization 454.6
 481.8
Depreciation and amortization188.9 172.7 
Provision for deferred taxes 15.8
 (91.1)
Provision for deferred income taxesProvision for deferred income taxes74.3 22.0 
Stock-based compensation expenseStock-based compensation expense35.8 31.8 
Amortization of debt discount and debt-issuance costs 12.0
 39.5
Amortization of debt discount and debt-issuance costs1.1 1.6 
Receivable impairment 53.5
 —
Other non-cash adjustments to net income 61.6
 58.6
Other non-cash adjustments to net income15.7 1.2 
Changes in operating assets and liabilities (679.1) (407.9)Changes in operating assets and liabilities(313.7)(47.6)
Net cash provided by operating activities 592.6
 655.3
Net cash provided by operating activities538.5 556.2 
Cash flows from investing activities:  
  
Cash flows from investing activities:  
Capital expenditures (449.4) (451.5)Capital expenditures(253.4)(224.9)
Purchase of restricted investments —
 (36.1)
Proceeds from sale of restricted and unrestricted investments 4.0
 118.1
Proceeds from (payments for) fixed asset disposition (0.1) 1.2
Proceeds from governmental grantProceeds from governmental grant— 2.3 
Payments for fixed asset dispositionPayments for fixed asset disposition(2.9)(0.2)
Net cash used in investing activities (445.5) (368.3)Net cash used in investing activities(256.3)(222.8)
Cash flows from financing activities:  
  
Cash flows from financing activities:  
Principal payments for long-term debt (610.8) (3,258.5)
Proceeds from long-term debt, net of discount —
 2,962.5
Debt-issuance costs —
 (6.1)
Repayments of revolving credit facility —
 (140.0)
Proceeds from revolving credit facility —
 140.0
Proceeds from stock issued pursuant to stock-based compensation plans 24.4
 33.3
Proceeds from stock issued pursuant to stock-based compensation plans2.9 4.0 
Cash paid for taxes on exercises/vesting of stock-based compensation (27.2) (21.2)Cash paid for taxes on exercises/vesting of stock-based compensation(37.8)(39.3)
Payments for repurchase of stockPayments for repurchase of stock(14.2)(241.3)
Net cash used in financing activities (613.6) (290.0)Net cash used in financing activities(49.1)(276.6)
Effect of exchange rate changes on cash and cash equivalents 0.2
 0.7
Net decrease in cash and cash equivalents (466.3) (2.3)
Cash and cash equivalents at beginning of period 866.4
 736.1
Cash and cash equivalents at end of period $400.1
 $733.8
Effect of exchange rate changes on cash, cash equivalents and restricted cashEffect of exchange rate changes on cash, cash equivalents and restricted cash0.5 0.4 
Net increase in cash, cash equivalents and restricted cashNet increase in cash, cash equivalents and restricted cash233.6 57.2 
Cash, cash equivalents and restricted cash at beginning of periodCash, cash equivalents and restricted cash at beginning of period1,038.3 1,463.6 
Cash, cash equivalents and restricted cash at end of periodCash, cash equivalents and restricted cash at end of period$1,271.9 $1,520.8 
Supplemental disclosure of cash flow information:  
  
Supplemental disclosure of cash flow information:  
Cash paid for:  
  
Cash paid for:  
Interest, net of amounts capitalized $261.3
 $302.8
Interest, net of amounts capitalized$— $0.3 
Income taxes $454.6
 $399.1
Income taxes$6.6 $6.3 
Non-cash transactions:    Non-cash transactions:
Right-of-use assets obtained in exchange for new operating lease liabilitiesRight-of-use assets obtained in exchange for new operating lease liabilities$297.3 $368.3 
Accrued capital expenditures $53.5
 $71.5
Accrued capital expenditures$45.2 $51.1 
 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 PRESENTATIONNote 1 - Basis of Presentation
TheUnless otherwise stated, references to “we,” “us,” and “our” in this quarterly report on Form 10-Q refer to Dollar Tree, Inc. and its direct and indirect subsidiaries on a consolidated basis. We have prepared 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 withpursuant to 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“Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations” contained in our Annual Report on Form 10-K for the year ended January 28, 2017 contained in the Company's Annual Report on Form 10-K filed March 28, 2017.29, 2022.The results of operations for the 13 and 39 weeks ended October 28, 2017April 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending February 3, 2018.January 28, 2023.
In the Company'sour 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 itsour financial position as of October 28, 2017April 30, 2022 and October 29, 2016May 1, 2021 and the results of itsour operations and cash flows for the periods presented. The January 28, 201729, 2022 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 will adopt the standard in the first quarter of fiscal 2018 with a cumulative adjustment to retained earnings and does not expect the adoption of the standard to have a material impact on its consolidated 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. The Company is in the process of implementing software to assist in the quantification of the expected impact on the consolidated balance sheets and to facilitate the calculations of the related accounting entries and disclosures.Note 2 - Contingencies
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 October 28, 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 October 28, 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 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.
During the second quarter ended July 29, 2017, the Company prepaid $500.0 million of the $2.2 billion remaining outstanding under its Term Loan A-1.
Debt Covenants
As of October 28, 2017, the Company was in compliance with its debt covenants.
3. INCOME TAXES
The Company's effective tax rate was 32.4% for the 13 weeks ended October 28, 2017 compared with 25.5% for the 13 weeks ended October 29, 2016 and 33.4% for the 39 weeks ended October 28, 2017 compared with 30.9% for the 39 weeks ended October 29, 2016.
The tax rate for the 13 weeks ended October 28, 2017 includes the effect of a reduction of $5.6 million in the reserve for uncertain tax positions resulting from statute expirations, the reduction of interest accrued on method changes, a decrease in the state tax rate and an increase in work opportunity tax credits in relation to income. The tax rate for the 13 weeks ended October 29, 2016 includes the effect of a reduction in the corporate income tax rate in the state of North Carolina from 4% to 3% for tax years beginning on or after January 1, 2017. This change in North Carolina’s statutory rate significantly decreased the deferred tax liability related to the trade name intangible asset and resulted in an approximate $21.4 million decrease in tax expense in the 13 weeks ended October 29, 2016.
The tax rate for the 39 weeks ended October 28, 2017 includes the effect of a reduction of $5.6 million in the reserve for uncertain tax positions resulting from statute expirations, the reduction of interest accrued on method changes and the effect of a reduction in the statutory rate for North Carolina which resulted in a decrease in the deferred tax liability related to the trade name intangible asset and a $9.9 million decrease in tax expense. 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 in the quarter ended April 30, 2016 and the $21.4 million decrease in tax expense resulting from the reduction in the corporate income tax rate in the state of North Carolina.
4. LEGAL PROCEEDINGS
The Company is a defendantWe are defendants in legal proceedings including thosethe class, collective, representative and large cases described below andas well as individual claims in arbitration. We will vigorously defend itselfourselves in these matters. The Company doesWe do not believe that any of these matters will, individually or in the aggregate, have a material effect on itsour business or financial condition. The CompanyWe cannot give assurance, however, that one or more of these matters will not have a material effect on itsour results of operations for the quarter or year in which they are resolved.
The Company assesses itsWe 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 the contingencies described belowour 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 the Company haswe have determined that a loss is reasonably possible but not probable, the Company iswe 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. The Company’sOur 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 Companyus 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 actionThe 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 has asked us to make certain additional improvements, which we are addressing.
Actual or threatened California state court with allegations concerning wages, meal and rest breaks, recovery periods, wage statements and timely termination pay. The employeelawsuits have been 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 in California federal court alleging, among other things, that the Company failed to make wage statements readily available to employees who did not receive paper checks. On November 7, 2017, the jury found in favor of the Company. The time for plaintiff to appeal that verdict has not yet run.
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. The plaintiff is seeking statutory damages of $100 to $1,000 per violation for the disclosure form claims.
In June 2017,against Dollar Tree and Family Dollar filed suit in chancery court in Delaware against Sycamore Partners and Dollar Express LLC alleging, among other things, fraud, fraudulent transfer, breach of contract, and unjust enrichment. The Company is seeking in excess of $52.0 million for similar employment-related claims brought under the failure of Dollar Express to pay the Company for goods and services the Company provided to Sycamore’s Dollar Express stores. The Company is also seeking substantial damages for the unauthorized use of its marks. Sycamore and Dollar Express responded in part by denying liability and filing a counterclaim against the Company alleging the Company had successfully engaged in a scheme to put Dollar Express out of business, seeking more than $500 million in damages.
In July 2017, two former employees filed suit in federal court in California, seeking to represent a class of current and former non-exempt employees alleging that the Company’s dress code required them to purchasePrivate Attorney General Act (“PAGA”). These cases may allege violations such distinctive clothing that it constituted a uniform and the Company’sas failure to reimburse them for the clothing violated California law. The formerprovide employees seek restitution, damages, penalties and injunctive relief.
In August 2017, 43 current and former employees filed suit against the Company in state court in California alleging improper classification as exempt employees which they allege resulted in, among other things, their failure to receive overtime compensation,with compliant rest and meal periods,breaks, suitable seating and overtime pay, reimburse business expenses, pay minimum wages for all time worked, provide accurate wage statements, and finaltimely pay upon termination of employment. The Company has removed the case to federal court.wages as well as other off-the-clock and potential labor code violations.
In August 2017, a former employee brought suit in California state court on a Private Attorney General Act ("PAGA") representative basis alleging the Company failed to provide him and all other California store associates with suitable seating when they were performing cashier functions.    
In November 2017, a current employee filed a PAGA representative action in California state court alleging the Company failed to make wage statements readily available to California store employees who do not receive paper checks.
Several recentNaN personal injury lawsuits were filedare pending against Dollar Tree and 1 against Family Dollar and their vendors alleging that personal powdercertain talc products that were sold in the past caused cancer. The Company doescancer, 1 of which is set for trial this year. 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 believe the products it sold caused the illnesses. The Company believes these lawsuits are insuredknown but may be material, and it is seekinguncertain whether our costs will be covered by insurance. In addition, although we have indemnification from third parties.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 April 2016, a former store manager filed a lawsuit in California state court alleging individual claims
9
Table 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 parties have reached a settlement as to all claims.Contents
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 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
On February 11, 2022, the FDA issued Form 483 observations primarily regarding rodent infestation at our West Memphis, Arkansas distribution center (“DC 202”) and the related sale and distribution of adulterated product, as well as other processes and procedures that require remediation. In 2008,connection therewith, we initiated a complaint was filed alleging discriminatory practices with respectvoluntary 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”), closed DC 202 for extensive cleaning, temporarily closed the affected stores to permit the removal and destruction of inventory subject to the payRecall, ceased sales of Family Dollar's female store managers. Amongrelevant inventory subject to the Recall, ceased the shipment of FDA-regulated products from DC 202, and initiated corrective actions. We are taking this matter extremely seriously and are responding to all observations made in the Form 483. The circumstances leading to the Recall (and/or the Recall itself) may have other things, the plaintiffs seek recoverynegative 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 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 aoperations and/or financial condition.
Since February 22, 2022, we have received 13 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 agreementcomplaints primarily related to issues associated with DC 202 described above. The lawsuits are still being finalized.


In January 2017, a customer filed a class action in federal court in Illinois allegingMississippi, Virginia, Arkansas, Louisiana, Tennessee, Alabama, and Missouri and allege violations of the Company violated various stateMississippi, Arkansas, Louisiana, Tennessee, Alabama and Missouri consumer fraudprotection laws, as well as expressbreach of warranty, and implied warranties by selling a product that purported to contain aloe when it did not. The requested class is limitedunjust enrichment related to the statesale of Illinois. The Company believesproducts that itmay be contaminated by virtue of rodent infestation and other unsanitary conditions. 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. A hearing is fully indemnifiedscheduled in late May to determine whether these cases should proceed using the federal court’s multidistrict litigation process.
On March 1, 2022, a federal grand jury subpoena was issued to us by the entities that supplied itEastern District of Arkansas requesting the production of information, documents and records pertaining to pests, sanitation, compliance with law, and the issues described above. We intend to cooperate fully with the product.subpoena and any related investigation, however, no assurance can be given as to the timing or outcome of this matter.
InOn April 2017, a former store employee28, 2022, the State of Arkansas filed a lawsuitcomplaint in California state court alleging off the clock work primarily for bag checks, failure to pay overtime, failure to provide rest and meal breaks, failure to pay wages timely during and upon termination of employment and failure to provide accurate wage statements. The court granted the Company’s motion to compel arbitration and stayed the case pending the outcomeviolations of the arbitration proceedings. Subsequently,Arkansas Deceptive Trade Practices Act, gross negligence and negligence, strict liability in tort, unjust enrichment and civil conspiracy related to the court allowed plaintiffsale of products that may have been contaminated by virtue of rodent infestation and other unsanitary conditions. The State of Arkansas is seeking injunctive relief, restitution, disgorgement, damages, civil penalties, punitive damages and suspension or revocation of our authorization to amend her complaint to include PAGA claims, on behalf of herself and others, which are not subject to arbitration. However, those claims remain stayed pending the outcome of the arbitration proceeding.do business in Arkansas.
In June 2017, a former store employeeJanuary, April, and September 2021, state-wide consumer class actions were filed suitagainst us by the same law firm in California state court assertingGeorgia, 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 PAGA claims on behalf of herselflawsuits and other allegedly aggrieved employees alleging the Company willfully caused their work time to go under reported so they failed to receive pay for time worked, rest and meal breaks, minimum wage and overtime compensation, final pay in a timely manner, and accurate wage statements.one talc lawsuit against Family Dollar.
Family Dollar Resolved Matters
In 2014,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 putative class action was filed in a California Federal Court by a former employee alleging thatsmoking process but rather acquire their smoky taste through the Company had a policyuse of requiring employee bag checks while the employees were not clocked in for work. As a resultsmoked flavoring. Both actions alleged violation of those actions, the employee alleged the Company violated California law by failing to provide meal periodsconsumer protection laws, negligent misrepresentation, breach of warranties, fraud 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 also alleged PAGA claims. In July 2017, the Court granted the Company’s motion for summary judgment as to all claims andunjust enrichment. Both have been dismissed the lawsuit with prejudice.
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 has now 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 provided merchandise and services and the buyer was required to reimburse the Company.
In the 13 weeks ended April 29, 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. An additional $2.6 million was recorded as a receivable and impaired subsequent to the first quarter of 2017. The impairment charges are included in “Receivable impairment” in the accompanying condensed consolidated income statements.
6. FAIR VALUE MEASUREMENTSNote 3 - 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'sOur 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 assetsAssets and liabilities that are disclosedLiabilities Measured at fair valueFair Value on a recurring basis:
(in millions) October 28,
2017		 January 28,
2017		 October 29,
2016
Level 1      
Short-term investments $—
 $4.0
 $4.0
Long-term debt - Secured Senior Notes and Acquisition Notes 3,713.4
 3,740.3
 3,754.4
Level 2      
Long-term debt - term loans 2,230.7
 2,828.2
 3,617.6


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 approximated their fair values because the interest rates vary with market interest rates.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). As described in Note 5,We did not record any material impairment charges during the Company recorded receivable impairments totaling $53.5 million13 weeks ended April 30, 2022 or May 1, 2021.

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Fair Value of Financial Instruments
The carrying amounts of Cash and cash equivalents, Restricted cash and Accounts payable as reported in the 39 weeks ended October 28, 2017.accompanying unaudited condensed 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:
7. NET INCOME PER SHARE
April 30, 2022January 29, 2022May 1, 2021
(in millions)Fair ValueCarrying ValueFair ValueCarrying ValueFair ValueCarrying Value
Level 1  
Senior Notes$3,232.7 $3,424.2 $3,558.5 $3,423.4 $3,581.9 $3,232.5 
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 4 - Net Income Per Share
The following table sets forth the calculations of basic and diluted net income per share:
13 Weeks Ended
April 30,May 1,
(in millions, except per share data)20222021
Basic net income per share:
Net income$536.4 $374.5 
Weighted average number of shares outstanding225.3 233.2 
Basic net income per share$2.38 $1.61 
Diluted net income per share:
Net income$536.4 $374.5 
Weighted average number of shares outstanding225.3 233.2 
Dilutive effect of stock options and restricted stock (as
   determined by applying the treasury stock method)		1.1 1.2 
Weighted average number of shares and dilutive potential
   shares outstanding		226.4 234.4 
Diluted net income per share$2.37 $1.60 
  13 Weeks Ended 39 Weeks Ended
  October 28, October 29, October 28, October 29,
(in millions, except per share data) 2017 2016 2017 2016
Basic net income per share:        
Net income $239.9
 $171.6
 $674.2
 $574.4
Weighted average number of shares outstanding 236.9
 235.8
 236.7
 235.6
Basic net income per share $1.01
 $0.73
 $2.85
 $2.44
Diluted net income per share:        
Net income $239.9
 $171.6
 $674.2
 $574.4
Weighted average number of shares outstanding 236.9
 235.8
 236.7
 235.6
Dilutive effect of stock options and restricted stock (as
determined by applying the treasury stock method)		 0.9
 1.1
 0.8
 1.1
Weighted average number of shares and dilutive potential shares
outstanding		 237.8
 236.9
 237.5
 236.7
Diluted net income per share $1.01
 $0.72
 $2.84
 $2.43
For the 13Stock options and 39 weeks ended October 28, 2017, 0.5other stock-based awards of 2.9 million shares and 0.40.7 million options outstandingshares were included inexcluded from the calculation of the weighted average number of shares and dilutive potential shares outstanding. Fordiluted net income per share for the 13 and 39 weeks ended October 29, 2016, substantially allApril 30, 2022 and May 1, 2021, respectively, because their inclusion would be anti-dilutive.
Note 5 - Stock-Based Compensation
For a discussion 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'sour stock-based compensation expense primarily includesplans, refer to “Note 10 - Stock-Based Compensation Plans” of our Annual Report on Form 10-K for the fair value of restricted stock units (RSUs) and employees' purchase rights under the Company's Employee Stock Purchase Plan.year ended January 29, 2022. Stock-based compensation expense was $11.7$35.8 million and $51.8$31.8 million during the 13 and 39 weeks ended October 28, 2017, respectively. Stock-based compensation expense was $11.4 millionApril 30, 2022 and $48.7 million during the 13 and 39 weeks ended October 29, 2016,May 1, 2021, respectively.
The Company granted approximately 0.5 millionRestricted Stock
We issue service-based RSUs from the Omnibus Incentive Plan (Omnibus Plan) to employees and officers inand issue PSUs to certain of our officers. We recognize expense based on the 39 weeks ended October 28, 2017. The estimated $42.5 million fair value of thesethe RSUs is being expensed ratablyor PSUs granted over the three-year vesting periods,requisite service period, which is generally three years, on a straight-line basis or a shorter periodsperiod based on the retirement eligibility of certain grantees.the grantee. The fair value wasof RSUs and PSUs is determined using the Company'sbased on our closing stock price on the dategrant date.

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Service-Based RSUs
The Company recognized $3.2 millionfollowing table summarizes the status of service-based RSUs as of April 30, 2022 and $12.6 million of expense related to these RSUschanges during the 13 and 39 weeks ended October 28, 2017, respectively.then ended:
In the 39 weeks ended October 28, 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 $0.5 million and $11.9 million of expense related to these RSUs in the 13 and 39 weeks ended October 28, 2017, respectively.
Number of SharesWeighted Average
Grant Date
Fair Value
Nonvested at January 29, 20221,096,066 $94.16 
Granted416,729 159.34 
Vested(510,042)92.86 
Forfeited(40,005)111.77 
Nonvested at April 30, 2022962,748 $122.32 


In the 39 weeks ended October 28, 2017, the Company granted RSUs with a fair value of $4.6 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 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 $0.5 million and $2.4 million of expense related to these RSUs in the 13 and 39 weeks ended October 28, 2017, respectively.PSUs
The Company recognized $5.7 millionfollowing table summarizes the status of PSUs as of April 30, 2022 and $20.3 million of expense related to RSUs granted prior to fiscal 2017 in the 13 and 39 weeks ended October 28, 2017, respectively. For the 13 and 39 weeks ended October 29, 2016, the Company recognized $11.0 million and $47.4 million, respectively, of expense related to RSUs granted in fiscal 2016 and prior.
The Company recognized $0.3 million and $1.0 million of expense related to options granted prior to fiscal 2017 in the 13 and 39 weeks ended October 28, 2017, respectively.
In the 39 weeks ended October 28, 2017, approximately 0.9 million RSUs vested and approximately 0.5 million shares, net of taxes, were issued. During the 39 weeks ended October 29, 2016, approximately 0.6 million RSUs vested and approximately 0.4 million shares, net of taxes, were issued. Inchanges during the 13 weeks ended October 28, 2017, 0.1 million RSUs vested and less than 0.1 million shares, net of taxes, were issued. Less than 0.1 million RSUs vested in the 13 weeks ended October 29, 2016.then ended:
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
Number of SharesWeighted Average
Grant Date
Fair Value
Nonvested at January 29, 2022584,972 $91.86 
Granted198,718 158.47 
Vested(273,454)89.19 
Forfeited(100,229)114.41 
Nonvested at April 30, 2022410,007 $119.50 
Stock at the date of the acquisition and recognized $0.4 million and $1.1 million of expense related to these options during the 13 and 39 weeks ended October 28, 2017, respectively. The Company recognized $1.1 million and $2.1 million of expense related to these options during the 13 and 39 weeks ended October 29, 2016, respectively. Options
Stock options are valued using the Black-Scholes option-pricingoption pricing model and compensation costexpense is recognized on a straight-line basis over the requisite service period.
On March 19, 2022, we granted a one-time award of options to purchase 2,252,587 shares of our common stock with a fair value of $135.6 million to the Executive Chairman of the Board. The grant of options was subject to the terms and conditions of a five-year Executive Agreement with the Executive Chairman. The option award has a ten-year term and is scheduled to vest in equal installments on each of the first five anniversaries of the grant date, subject to the Executive Chairman’s continued employment with the company through each vesting date. The assumptions used in the Black-Scholes option pricing model for this award are as follows:
9. SEGMENTS
Expected term (in years)6.5
Expected stock price volatility34.1 %
Dividend yield— %
Risk-free interest rate2.15 %
The Company operatessimplified method was used to estimate the expected term of the options due to our lack of historical option exercise experience and the “plain vanilla” characteristics of the option award. The simplified method results in an expected term equal to the average of the weighted average time-to-vesting and the contractual life of the options. The expected stock price volatility is based on the historical volatility of our common stock over a period matching the expected term of the options granted. The dividend yield reflects that we have never paid cash dividends. The risk-free interest rate represents the yield curve in effect at the time of grant for U.S. Treasury zero-coupon securities with maturities that approximate the expected term of the options.

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The following table summarizes information about options outstanding at April 30, 2022 and changes during the 13 weeks then ended:
 Number of SharesWeighted Average Per Share Exercise PriceWeighted Average Remaining Term (Years)Aggregate Intrinsic Value
(in millions)
Outstanding at January 29, 202224,541 $90.38   
Granted2,252,587 157.17   
Exercised(370)76.97   
Outstanding at April 30, 20222,276,758 $156.46 9.8$13.6 
Exercisable at April 30, 202224,171 $90.59 4.5$1.7 
Note 6 - Shareholders’ Equity
We repurchased 89,779 shares of common stock on the open market for $14.2 million during the 13 weeks ended April 30, 2022. We repurchased 2,150,572 shares of common stock on the open market for $250.0 million during the 13 weeks ended May 1, 2021. Of the shares repurchased during the 13 weeks ended May 1, 2021, approximately $8.7 million had not settled as of May 1, 2021. This amount was accrued and is reflected in “Other current liabilities” within the accompanying unaudited condensed consolidated balance sheet as of May 1, 2021. At April 30, 2022, we had $2.5 billion remaining under Board repurchase authorization.
Note 7 - Segments and Disaggregated Revenue
We operate a chain of more than 14,70016,100 retail discount stores in 48 states and five5 Canadian provinces. The Company'sOur operations are conducted in two2 reporting business segments: Dollar Tree and Family Dollar. The Company defines itsWe define our segments as those operations whose results itsour chief operating decision maker ("CODM"(“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 $1.00.$1.25. The Dollar Tree segment includes the Company'sour operations under the "Dollar Tree"“Dollar Tree” and "Dollar“Dollar Tree Canada"Canada” brands, 1115 distribution centers in the United States twoand 2 distribution centers in Canada and a Store Support Center in Chesapeake, Virginia.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 the Company'sour operations under the "Family Dollar"“Family Dollar” brand and 11 distribution centers andcenters. The Family Dollar segment Operating income includes advertising revenue, which is a Store Support Centercomponent of Other revenue in Matthews, North Carolina.the accompanying unaudited condensed consolidated income statements.
The Company measuresWe measure the results of itsour segments using, among other measures, each segment'ssegment’s net sales, gross profit and operating income. The CompanyCODM reviews these metrics for each of our reporting segments. We may revise the measurement of each segment'ssegment’s operating income, including the allocation of distribution center and Store Support Center costs, as determined by the information regularly reviewed by the CODM. If the measurement of a segment changes, prior period amounts and balances would beare reclassified to be comparable to the current period'speriod’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 2 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.
Net sales by segment areInformation for our segments, as follows:
  13 Weeks Ended 39 Weeks Ended
  October 28, October 29, October 28, October 29,
(in millions) 2017 2016 2017 2016
Net sales:        
     Dollar Tree $2,685.0
 $2,466.9
 $7,843.6
 $7,238.9
Family Dollar 2,631.6
 2,534.7
 8,041.3
 7,844.8
Total net sales $5,316.6
 $5,001.6
 $15,884.9
 $15,083.7


Gross profit by segmentwell as for Corporate, support and Other, including the reconciliation to Income before income taxes, is as follows:
 13 Weeks Ended
 April 30,May 1,
(in millions)20222021
Condensed Consolidated Income Statement Data:
Net sales:
Dollar Tree$3,781.8 $3,321.3 
Family Dollar3,118.3 3,155.5 
Consolidated Net sales$6,900.1 $6,476.8 
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 13 Weeks Ended 39 Weeks Ended 13 Weeks Ended
 October 28, October 29, October 28, October 29, April 30,May 1,
(in millions) 2017 2016 2017 2016(in millions)20222021
Condensed Consolidated Income Statement Data:Condensed Consolidated Income Statement Data:
Gross profit:        Gross profit:
Dollar Tree $942.6
 $857.3
 $2,735.0
 $2,496.2
Dollar Tree$1,534.7 $1,118.3 
Family Dollar 723.4
 663.2
 2,185.9
 2,091.2
Family Dollar805.8 845.8 
Total gross profit $1,666.0
 $1,520.5
 $4,920.9
 $4,587.4
Consolidated Gross profitConsolidated Gross profit$2,340.5 $1,964.1 
Operating income (loss):Operating income (loss):
Dollar TreeDollar Tree$764.2 $400.3 
Family DollarFamily Dollar89.5 211.4 
Corporate, support and OtherCorporate, support and Other(122.2)(91.8)
Consolidated Operating incomeConsolidated Operating income731.5 519.9 
Interest expense, netInterest expense, net34.0 33.0 
Income before income taxesIncome before income taxes$697.5 $486.9 
Depreciation and amortization expense by segment is as follows:
 As of
 April 30,January 29,May 1,
(in millions)202220222021
Condensed Consolidated Balance Sheet Data:
Goodwill:
Dollar Tree$424.8 $424.9 $426.1 
Family Dollar1,559.5 1,559.5 1,559.5 
Consolidated Goodwill$1,984.3 $1,984.4 $1,985.6 
Total assets:
Dollar Tree$9,801.9 $9,358.4 $8,963.8 
Family Dollar12,065.9 11,871.8 11,611.0 
Corporate, support and Other504.5 491.6 475.9 
Consolidated Total assets$22,372.3 $21,721.8 $21,050.7 

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  13 Weeks Ended 39 Weeks Ended
  October 28, October 29, October 28, October 29,
(in millions) 2017 2016 2017 2016
Depreciation and amortization expense:        
     Dollar Tree $62.5
 $61.3
 $186.8
 $178.1
Family Dollar 86.9
 96.5
 268.0
 304.2
Total depreciation and amortization expense $149.4
 $157.8
 $454.8
 $482.3
Disaggregated Revenue
Operating incomeThe following table summarizes net sales by segment is as follows:merchandise category for our segments:
 13 Weeks Ended
 April 30,May 1,
(in millions)20222021
Dollar Tree segment net sales by
    merchandise category:
Consumable$1,747.2 46.2 %$1,584.3 47.7 %
Variety1,864.4 49.3 %1,627.4 49.0 %
Seasonal170.2 4.5 %109.6 3.3 %
Total Dollar Tree segment net sales$3,781.8 100.0 %$3,321.3 100.0 %
Family Dollar segment net sales by
    merchandise category:
Consumable$2,435.1 78.1 %$2,373.5 75.2 %
Home products248.1 7.9 %301.0 9.5 %
Apparel and accessories167.4 5.4 %205.2 6.5 %
Seasonal and electronics267.7 8.6 %275.8 8.8 %
Total Family Dollar segment net sales$3,118.3 100.0 %$3,155.5 100.0 %

15
  13 Weeks Ended 39 Weeks Ended
  October 28, October 29, October 28, October 29,
(in millions) 2017 2016 2017 2016
Operating income:        
     Dollar Tree $317.3
 $286.0
 $921.9
 $829.2
Family Dollar 107.9
 56.4
 311.6
 289.1
Total operating income $425.2
 $342.4
 $1,233.5
 $1,118.3
Total assets by segment are as follows:
Table of Contents
  As of
  October 28, January 28, October 29,
(in millions) 2017 2017 2016
Total assets:      
     Dollar Tree $3,665.8
 $3,705.5
 $3,932.2
Family Dollar 12,064.4
 11,996.1
 12,262.8
Total assets $15,730.2
 $15,701.6
 $16,195.0


Total goodwill by segment is as follows:
  As of
  October 28, January 28, October 29,
(in millions) 2017 2017 2016
Total goodwill:      
     Dollar Tree $346.2
 $345.4
 $340.1
Family Dollar 4,678.1
 4,678.1
 4,682.8
Total goodwill $5,024.3
 $5,023.5
 $5,022.9
Goodwill is reassigned between segments when stores are rebannered between segments. There were no stores rebannered between segments in the 39 weeks ended October 28, 2017. In the 39 weeks ended October 29, 2016, the Company reassigned $55.3 million of goodwill from Family Dollar to Dollar Tree as a result of rebannering.
10. CONDENSED CONSOLIDATING FINANCIAL INFORMATION
At October 28, 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.


Condensed Consolidating Statements of Comprehensive Income
  13 Weeks Ended October 28, 2017
    Guarantor Non-Guarantor Consolidation Consolidated
(in millions) Parent Subsidiaries Subsidiaries Adjustments Company
Net sales $—
 $5,275.8
 $77.9
 $(37.1) $5,316.6
Cost of sales —
 3,626.0
 43.3
 (18.7) 3,650.6
Gross profit —
 1,649.8
 34.6
 (18.4) 1,666.0
Selling, general and administrative
   expenses
 1.4
 1,224.8
 33.1
 (18.5) 1,240.8
Operating income (loss) (1.4) 425.0
 1.5
 0.1
 425.2
Interest expense (income), net 55.0
 16.6
 (1.9) —
 69.7
Other expense, net —
 0.1
 0.2
 0.1
 0.4
Income (loss) before income taxes (56.4) 408.3
 3.2
 —
 355.1
Income tax expense (benefit) (36.7) 151.0
 0.9
 —
 115.2
Equity in earnings of subsidiaries (259.6) (1.8) —
 261.4
 —
Net income 239.9
 259.1
 2.3
 (261.4) 239.9
Other comprehensive loss (2.7) (0.8) (2.8) 3.6
 (2.7)
Comprehensive income (loss) $237.2
 $258.3
 $(0.5) $(257.8) $237.2
  13 Weeks Ended October 29, 2016
    Guarantor Non-Guarantor Consolidation Consolidated
(in millions) Parent Subsidiaries Subsidiaries Adjustments Company
Net sales $—
 $4,931.4
 $223.3
 $(153.1) $5,001.6
Cost of sales —
 3,427.3
 153.2
 (99.4) 3,481.1
Gross profit —
 1,504.1
 70.1
 (53.7) 1,520.5
Selling, general and administrative
   expenses
 2.0
 1,160.2
 65.2
 (49.3) 1,178.1
Operating income (loss) (2.0) 343.9
 4.9
 (4.4) 342.4
Interest expense (income), net 96.9
 17.2
 (1.9) (0.1) 112.1
Other (income) expense, net 4.6
 (0.2) 0.3
 (4.6) 0.1
Income (loss) before income taxes (103.5) 326.9
 6.5
 0.3
 230.2
Income tax expense (benefit) (53.1) 111.0
 0.8
 (0.1) 58.6
Equity in earnings of subsidiaries (222.0) (2.7) —
 224.7
 —
Net income 171.6
 218.6
 5.7
 (224.3) 171.6
Other comprehensive loss (2.4) (0.7) (2.5) 3.2
 (2.4)
Comprehensive income $169.2
 $217.9
 $3.2
 $(221.1) $169.2



Condensed Consolidating Statements of Comprehensive Income (Continued)
  39 Weeks Ended October 28, 2017
    Guarantor Non-Guarantor Consolidation Consolidated
(in millions) Parent Subsidiaries Subsidiaries Adjustments Company
Net sales $—
 $15,760.3
 $220.2
 $(95.6) $15,884.9
Cost of sales —
 10,881.4
 123.6
 (41.0) 10,964.0
Gross profit —
 4,878.9
 96.6
 (54.6) 4,920.9
Selling, general and administrative
   expenses
 4.8
 3,649.9
 87.3
 (54.6) 3,687.4
Operating income (loss) (4.8) 1,229.0
 9.3
 —
 1,233.5
Interest expense (income), net 171.4
 54.6
 (5.8) —
 220.2
Other (income) expense, net (0.1) 0.2
 0.7
 —
 0.8
Income (loss) before income taxes (176.1) 1,174.2
 14.4
 —
 1,012.5
Income tax expense (benefit) (85.6) 417.7
 6.2
 —
 338.3
Equity in earnings of subsidiaries (764.7) (10.3) —
 775.0
 —
Net income 674.2
 766.8
 8.2
 (775.0) 674.2
Other comprehensive income 2.3
 0.7
 2.3
 (3.0) 2.3
Comprehensive income $676.5
 $767.5
 $10.5
 $(778.0) $676.5
  39 Weeks Ended October 29, 2016
    Guarantor Non-Guarantor Consolidation Consolidated
(in millions) Parent Subsidiaries Subsidiaries Adjustments Company
Net sales $—
 $14,916.6
 $638.4
 $(471.3) $15,083.7
Cost of sales —
 10,385.9
 524.0
 (413.6) 10,496.3
Gross profit —
 4,530.7
 114.4
 (57.7) 4,587.4
Selling, general and administrative
   expenses
 5.9
 3,423.3
 96.0
 (56.1) 3,469.1
Operating income (loss) (5.9) 1,107.4
 18.4
 (1.6) 1,118.3
Interest expense (income), net 242.5
 50.0
 (5.7) (0.1) 286.7
Other (income) expense, net 1.5
 (0.5) 0.5
 (1.6) (0.1)
Income (loss) before income taxes (249.9) 1,057.9
 23.6
 0.1
 831.7
Income tax expense (benefit) (117.2) 369.9
 4.6
 —
 257.3
Equity in earnings of subsidiaries (707.1) (11.5) —
 718.6
 —
Net income 574.4
 699.5
 19.0
 (718.5) 574.4
Other comprehensive income 4.2
 1.3
 4.2
 (5.5) 4.2
Comprehensive income $578.6
 $700.8
 $23.2
 $(724.0) $578.6


Condensed Consolidating Balance Sheets
  October 28, 2017
    Guarantor Non-Guarantor Consolidating Consolidated
(in millions) Parent Subsidiaries Subsidiaries Adjustments Company
ASSETS          
Current assets:          
Cash and cash equivalents $86.9
 $188.0
 $125.2
 $—
 $400.1
Merchandise inventories, net —
 3,350.6
 48.9
 (1.7) 3,397.8
Current deferred tax assets, net —
 (10.5) 10.5
 —
 —
Due from intercompany, net 135.2
 580.0
 4.8
 (720.0) —
Other current assets 9.2
 163.6
 1.6
 0.3
 174.7
Total current assets 231.3
 4,271.7
 191.0
 (721.4) 3,972.6
Property, plant and equipment, net —
 3,152.7
 26.2
 —
 3,178.9
Assets available for sale —
 8.6
 —
 —
 8.6
Goodwill —
 4,993.1
 31.2
 —
 5,024.3
Favorable lease rights, net —
 398.0
 —
 —
 398.0
Tradename intangible asset —
 3,100.0
 —
 —
 3,100.0
Other intangible assets, net —
 4.9
 —
 —
 4.9
Investment in subsidiaries 8,771.8
 103.5
 —
 (8,875.3) —
Intercompany note receivable 1,801.4
 —
 188.8
 (1,990.2) —
Due from intercompany, net 1,244.5
 —
 —
 (1,244.5) —
Other assets —
 42.9
 3.1
 (3.1) 42.9
Total assets $12,049.0
 $16,075.4
 $440.3
 $(12,834.5) $15,730.2
LIABILITIES AND EQUITY  
  
  
  
  
Current liabilities:  
  
  
  
  
Current portion of long-term debt $165.9
 $—
 $—
 $—
 $165.9
Accounts payable —
 1,170.7
 12.0
 (1.4) 1,181.3
Due to intercompany, net 593.6
 104.7
 21.7
 (720.0) —
Other current liabilities (0.8) 484.5
 209.0
 

 692.7
Income taxes payable (69.7) 68.1
 1.6
 —
 —
Total current liabilities 689.0
 1,828.0
 244.3
 (721.4) 2,039.9
Long-term debt, net, excluding
   current portion
 5,241.4
 315.6
 —
 —
 5,557.0
Unfavorable lease rights, net —
 105.7
 —
 —
 105.7
Deferred tax liabilities, net 1.8
 1,470.6
 —
 —
 1,472.4
Income taxes payable, long-term —
 45.1
 —
 —
 45.1
Due to intercompany, net —
 1,244.5
 —
 (1,244.5) —
Intercompany note payable —
 1,990.2
 —
 (1,990.2) —
Other liabilities 0.3
 388.3
 8.1
 (3.1) 393.6
Total liabilities 5,932.5
 7,388.0
 252.4
 (3,959.2) 9,613.7
Shareholders' equity 6,116.5
 8,687.4
 187.9
 (8,875.3) 6,116.5
Total liabilities and equity $12,049.0
 $16,075.4
 $440.3
 $(12,834.5) $15,730.2


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 0.3
 377.5
 8.0
 (3.4) 382.4
Total liabilities 7,042.4
 7,493.3
 282.8
 (4,506.4) 10,312.1
Shareholders' equity 5,389.5
 8,512.1
 234.6
 (8,746.7) 5,389.5
Total liabilities and equity $12,431.9
 $16,005.4
 $517.4
 $(13,253.1) $15,701.6


Condensed Consolidating Balance Sheets (Continued)
  October 29, 2016
    Guarantor Non-Guarantor Consolidating Consolidated
(in millions) Parent Subsidiaries Subsidiaries Adjustments Company
ASSETS          
Current assets:          
Cash and cash equivalents $—
 $930.4
 $129.0
 $(325.6) $733.8
Short-term investments —
 —
 4.0
 —
 4.0
Merchandise inventories, net —
 3,222.3
 47.4
 4.2
 3,273.9
Current deferred tax assets, net —
 (10.6) 10.6
 —
 —
Due from intercompany, net 67.9
 674.9
 116.7
 (859.5) —
Other current assets 117.3
 209.3
 5.7
 (1.6) 330.7
Total current assets 185.2
 5,026.3
 313.4
 (1,182.5) 4,342.4
Property, plant and equipment, net —
 3,143.5
 32.8
 —
 3,176.3
Assets available for sale —
 11.6
 —
 —
 11.6
Goodwill —
 4,993.1
 29.8
 —
 5,022.9
Favorable lease rights, net —
 493.8
 —
 —
 493.8
Tradename intangible asset —
 3,100.0
 —
 —
 3,100.0
Other intangible assets, net —
 5.2
 —
 —
 5.2
Investment in subsidiaries 9,107.7
 102.1
 —
 (9,209.8) —
Intercompany note receivable 1,526.4
 —
 188.8
 (1,715.2) —
Due from intercompany, net 1,699.1
 —
 —
 (1,699.1) —
Other assets —
 42.4
 4.0
 (3.6) 42.8
Total assets $12,518.4
 $16,918.0
 $568.8
 $(13,810.2) $16,195.0
LIABILITIES AND EQUITY  
  
  
  
  
Current liabilities:  
  
  
  
  
Current portion of long-term debt $145.8
 $—
 $—
 $—
 $145.8
Accounts payable 325.7
 1,211.7
 52.1
 (323.1) 1,266.4
Due to intercompany, net 343.2
 451.7
 64.6
 (859.5) —
Other current liabilities 28.8
 485.6
 207.6
 —
 722.0
Income taxes payable 3.5
 (9.0) 5.5
 —
 —
Total current liabilities 847.0
 2,140.0
 329.8
 (1,182.6) 2,134.2
Long-term debt, net, excluding
   current portion
 6,621.7
 316.3
 —
 —
 6,938.0
Unfavorable lease rights, net —
 130.2
 —
 —
 130.2
Deferred tax liabilities, net 1.9
 1,493.6
 —
 —
 1,495.5
Income taxes payable, long-term —
 72.3
 —
 —
 72.3
Due to intercompany, net —
 1,699.1
 —
 (1,699.1) —
Intercompany note payable —
 1,715.2
 —
 (1,715.2) —
Other liabilities 0.1
 372.3
 8.2
 (3.5) 377.1
Total liabilities 7,470.7
 7,939.0
 338.0
 (4,600.4) 11,147.3
Shareholders' equity 5,047.7
 8,979.0
 230.8
 (9,209.8) 5,047.7
Total liabilities and equity $12,518.4
 $16,918.0
 $568.8
 $(13,810.2) $16,195.0



Condensed Consolidating Statements of Cash Flows
  39 Weeks Ended October 28, 2017
    Guarantor Non-Guarantor Consolidating Consolidated
(in millions) Parent Subsidiaries Subsidiaries Adjustments Company
Net cash provided by operating activities $138.1
 $1,108.2
 $14.1
 $(667.8) $592.6
Cash flows from investing activities:  
  
      
Capital expenditures —
 (448.5) (0.9) —
 (449.4)
Proceeds from sale of restricted and
   unrestricted investments
 —
 —
 4.0
 —
 4.0
Other —
 (0.1) —
 —
 (0.1)
Net cash provided by (used in)
   investing activities
 —
 (448.6) 3.1
 —
 (445.5)
Cash flows from financing activities:  
  
      
Principal payments for long-term debt (610.8) —
 —
 —
 (610.8)
Dividends paid —
 (610.8) (57.0) 667.8
 —
Proceeds from stock issued pursuant to
   stock-based compensation plans
 24.4
 —
 —
 —
 24.4
Cash paid for taxes on exercises/vesting of
   stock-based compensation
 (27.2) —
 —
 —
 (27.2)
Net cash used in financing activities (613.6) (610.8) (57.0) 667.8
 (613.6)
Effect of exchange rate changes on cash and
   cash equivalents
 —
 —
 0.2
 —
 0.2
Net (decrease) increase in cash and cash
   equivalents
 (475.5) 48.8
 (39.6) —
 (466.3)
Cash and cash equivalents at beginning of
   period
 562.4
 139.2
 164.8
 —
 866.4
Cash and cash equivalents at end of period $86.9
 $188.0
 $125.2
 $—
 $400.1


Condensed Consolidating Statements of Cash Flows (continued)
  39 Weeks Ended October 29, 2016
    Guarantor Non-Guarantor Consolidating Consolidated
(in millions) Parent Subsidiaries Subsidiaries Adjustments Company
Net cash provided by operating activities $290.0
 $660.5
 $36.1
 $(331.3) $655.3
Cash flows from investing activities:  
  
      
Capital expenditures —
 (450.2) (1.3) —
 (451.5)
Purchase of restricted investments —
 (36.1) —
 —
 (36.1)
Proceeds from sale of restricted
   investments
 —
 118.1
 —
 —
 118.1
Other —
 1.2
 —
 —
 1.2
Net cash used in investing activities —
 (367.0) (1.3) —
 (368.3)
Cash flows from financing activities:  
  
      
Principal payments for long-term debt (3,258.5) —
 —
 —
 (3,258.5)
Proceeds from long-term debt, net of
   discount
 2,962.5
 —
 —
 —
 2,962.5
Repayments of revolving credit facility (140.0) —
 —
 —
 (140.0)
Proceeds from revolving credit facility 140.0
 —
 —
 —
 140.0
Dividends paid —
 —
 (23.0) 23.0
 —
Proceeds from stock issued pursuant to
   stock-based compensation plans
 33.3
 —
 —
 —
 33.3
Cash paid for taxes on exercises/vesting of
   stock-based compensation
 (21.2) —
 —
 —
 (21.2)
Other (6.1) —
 —
 —
 (6.1)
Net cash used in financing activities (290.0) —
 (23.0) 23.0
 (290.0)
Effect of exchange rate changes on cash and
   cash equivalents
 —
 —
 0.7
 —
 0.7
Net (decrease) increase in cash and cash
   equivalents
 —
 293.5
 12.5
 (308.3) (2.3)
Cash and cash equivalents at beginning of
   period
 —
 636.9
 116.5
 (17.3) 736.1
Cash and cash equivalents at end of period $—
 $930.4
 $129.0
 $(325.6) $733.8
11. SUBSEQUENT EVENTS
In 2012, the Company entered into a promissory note with the state of Connecticut under which the state loaned the Company $7.0 million in connection with the Company’s acquisition, construction and installation of land, building, machinery and equipment for the Company’s distribution facility in Windsor, Connecticut. Under this agreement, if certain performance targets were met, the loan and related interest would be forgiven. Subsequent to October 28, 2017, the Company received notice from the state of Connecticut that the performance targets have been met and the loan has been forgiven. To reflect the loan being forgiven, the Company will record a $7.4 million non-operating gain in "Other (income) expense, net" in the Company’s Consolidated Income Statement in the fourth quarter of 2017.


Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
INTRODUCTORY NOTE: Unless otherwise stated, references to "we," "our" and "us" generally refer to Dollar Tree, Inc. and its direct and indirect subsidiaries on a consolidated basis.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS:Cautionary Note Regarding Forward-Looking Statements: This document contains "forward-looking statements"“forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments and results. Theyresults and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by or including words such as "believe," "anticipate," "expect," "intend," "plan," "view,"“believe,” “anticipate,” “expect,” “intend,” “plan,” “view,” “target” or "estimate."“estimate,” “may,” “will,” “should,” “predict,” “possible,” “potential,” “continue,” “strategy,” and similar expressions. For example, our forward-looking statements include, without limitation, statements regarding:
the benefits, results and effects•The impact of the Family Dollar acquisition and integration and the combined Company’s plans, objectives, expectations (financial or otherwise), including synergies, the cost to achieve synergies and the effectdelays in receiving imported merchandise from Asia on earnings per share;
the collection of amounts owed to Family Dollar by Dollar Express and Sycamore Partners (which receivable has been impaired) and the outcome of related litigation including the counterclaim by Dollar Express against the Company for $500 million;
the ability to retain key personnel at Family Dollar and Dollar Tree;
our anticipated sales, including comparable store net sales, net sales growth and earnings growth;
the potential effect of future law changes, including border-adjustment taxes and tariffs, the Fair Labor Standards Act as it relates to the qualification of our managers for exempt status, minimum wage, and health care law;
the outcome and costs of pending or potential litigation or governmental investigations;
our growth plans, including our plans to add, rebanner, expand or relocate stores, our anticipated square footage increase, and our ability to renew leases at existing store locations;
the average size of our stores and their performance compared with other store sizes;
the effect on merchandiseproduct availability, product mix, of consumables and the increase in the number of our stores with freezers and coolers on Dollar Tree's gross profit margin and sales;
the effect of the Family Dollar renovation initiative and other initiatives on Family Dollar's sales;
the net sales per square foot, net sales and operating income of our stores;merchandise margin;
the potential effect of inflation•Our expectations regarding higher oceanic shipping and other economic changes on ourdomestic freight and fuel costs, and profitability, including the potential effect of future changes in minimum wage rates and overtime regulations and our plans to addressmanage these changes, shipping rates, domesticcost increases;
•Our expectations regarding increased expenses for higher wages and import freight costs, fuel costsbonuses paid to associates, including increases in the minimum wage by States and wagelocalities and benefit costs;potential federal legislation increasing the minimum wage;
•The potential effect of general business or economic conditions on our gross profit margin, earnings, inventorybusiness, including the effects of inflation, consumer spending levels, and ability to leverage selling, generallabor shortages and administrativecosts in our markets;
•The uncertainty of the impact of the COVID-19 pandemic and public health measures on our business, results of operations, customers and suppliers, including uncertainties surrounding shipping delays and other fixed costs;
disruptions in our seasonal sales patterns including those relating to the length of the holiday selling seasons;
the capabilities of our inventory supply chain technology and other systems;or sources of supply;
the•The reliability of, and cost associated with, our sources of supply, particularly imported goods such as those sourced from China;China and higher cost domestic goods;
•The expected impact of labor disagreements and potential work disruptions or strikes, including at ports located in California, Oregon, and Washington, on shipping delays and the capacity, performanceavailability and cost of merchandise;
•The expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, other legal proceedings or governmental investigations (including U.S. Food and Drug Administration matters);
•Our plans to renovate existing Family Dollar stores and build new stores in the H2 store format, and the performance of that format on our distribution centers;results of operations;
•Our plans and expectations relating to the introduction of additional price points above $1 in our cash needs,Dollar Tree stores, including the impact on our abilitygross margins;
•Our plans and expectations relating to fundnew store openings and new store concepts such as Dollar Tree Plus and our future capital expendituresCombination Store format;
•Our plans and working capital requirements;
our expectations regarding competitionfuture strategic investments and growth inthe uncertainty with respect to the amount, timing and impact of those investments on our retail sector;business and results of operations; and
management's estimates•Our expectations regarding higher commodity and other costs associated with our critical accounting policies, including inventory valuation, accrued expenses, the Family Dollar purchase price allocationbuild-out of new stores and income taxes.the renovation of existing stores, and construction, permitting and inspection delays related to new store openings.


ForA forward-looking statement is neither a discussionprediction nor a guarantee of future results, events or circumstances. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Our forward-looking statements are all based on currently available operating, financial and business information. The outcome of the events described in these forward-looking statements is subject to a variety of factors, including, but not limited to, the risks uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the risk factorsuncertainties summarized below and the more detailed discussions in the "Risk“Risk Factors” and “Business”“Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Annual Report on Form 10-K filed March 28, 2017.for the fiscal year ended January 29, 2022, and in this Quarterly Report on Form 10-Q. The following risks could have a material adverse impact on our sales, costs, profitability, financial performance or implementation of strategic initiatives:
•Our profitability is vulnerable to cost increases.increases in oceanic shipping costs, domestic freight and fuel costs, wage and benefit costs and other operating costs.
•We are experiencing higher costs and disruptions in our distribution network, which have had and could have an adverse impact on our sales, margins and profitability.
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•We may stop selling or recall certain products for safety-related or other issues.
•Our business and results of operations could be materially harmed if we experience a decline in consumer confidence and spending as a result of consumer concerns about the quality and safety of our products.
•Inflation or other adverse change or downturn in economic conditions could impact our sales or profitability.
•If the COVID-19 pandemic and associated disruptions worsen or continue longer than expected, there could be a material adverse impact on our business and results of operations.
•Risks associated with our domestic and foreign suppliers including, among others, increased taxes, duties, tariffs or other restrictions on trade, could adversely affect our financial performance.
Integrating Family Dollar's operations with ours•Our supply chain may be more difficult, costly or time consuming than expected and the anticipated benefits, synergies and cost savings of the acquisition may not be realized.disrupted by changes in United States trade policy with China.
A downturn in economic conditions could impact our sales.
A significant disruption in our computer and technology systems could adversely affect our results of operation or business.
If we are unable to secure our customers' credit card and confidential information, or other private data relating to our associates, suppliers or our business, we could be subject to negative publicity, costly government enforcement actions or private litigation, which could damage our business reputation and adversely affect our results of operation or business.
•Our growth is dependent on our ability to increase sales in existing stores and to expand our square footage profitably.
We could encounter disruptions in our distribution network or additional costs in distributing merchandise.
•Our profitability is affected by the mix of products we sell.
•Pressure from competitors may reduce our sales and profits.
Litigation may adversely affect our business, financial condition and results of operations. For example, litigation is subject to significant risks and we cannot assure you of the outcome of any litigation including the litigation with Dollar Express and Sycamore Partners. For a discussion of current legal proceedings, see "Note 4. Legal Proceedings," included in "Part I. Financial Information, Item 1. Financial Statements" of this Form 10-Q.
Changes in federal, state or local law, or our failure to comply with such laws, could increase our expenses and expose us to legal risks.
•Our business could be adversely affected if we fail to attract and retain qualified associates and key personnel.
Certain provisions•We may not be successful in implementing or in anticipating the impact of important strategic initiatives, and our plans for implementing such initiatives may be altered or delayed due to various factors, which may have an adverse impact on our business and financial results.
•We could incur losses due to impairment of long-lived assets, goodwill and intangible assets.
•We rely on computer and technology systems in our Articlesoperations, and any material failure, inadequacy, interruption or security failure of Incorporationthose systems including because of a cyber-attack could harm our ability to effectively operate and Bylawsgrow our business and could delayadversely affect our financial results.
•The potential unauthorized access to customer information may violate privacy laws and could damage our business reputation, subject us to negative publicity, litigation and costs, and adversely affect our results of operations or discourage a changebusiness.
•Litigation, arbitration and government proceedings may adversely affect our business, financial condition and/or results of control transaction that may beoperations.
•Changes in a shareholder's best interest.laws and government regulations, or our failure to adequately estimate the impact of such changes, could increase our expenses, expose us to legal risks or otherwise adversely affect us.
•Our substantial indebtedness could adversely affect our financial condition, limit our ability to obtain additional financing, restrict our operations and make us more vulnerable to economic downturns and competitive pressures.
We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
•The terms of the agreements governing our indebtedness may restrict our current and future operations, particularly our ability to respond to changes or to pursue our business strategies, and could adversely affect our capital resources, financial condition and liquidity.
•Our variable-rate indebtedness subjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly.
•Our business or the value of our common stock could be negatively affected as a result of actions by shareholders.
•The price of our common stock is subject to market and other conditions and may be volatile.
•Certain provisions in our Articles of Incorporation and By-Laws could delay or discourage a change of control transaction that may be in a shareholder’s best interest.
We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could be wrong in light of these risks, uncertainties and assumptions. The future events, developments or resultsdiffer materially from those described in this reportthe forward-looking statements. Moreover, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could turn out to be materially different. have an impact on our forward-looking statements.
We have no obligationdo not undertake to publicly update or revise ourany forward-looking statements after the date of this quarterly report and you should not expect us to do so.Form 10-Q, whether as a result of new information, future events, or otherwise.
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Investors should also be aware that while we do, from time to time, communicate with securities analysts and others, it is against our policy to selectively disclose to them any material, nonpublic information or other confidential commercial information. Accordingly, shareholders should not assume that we agree with any statement or report issued by any securities analyst regardless


of the content of the statement or report asreport. Furthermore, we have a policy against confirming informationprojections, forecasts or opinions issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.
Overview
We are a leading operator of more than 14,70016,100 retail discount stores and we conduct our operations in two reporting segments. Our Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the fixed price of $1.00.$1.25. Our Family Dollar segment operates general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores.
Our net sales are derived from the sale of merchandise. Two major factors tend to affect our net sales trends. First is our success at opening new stores or adding new stores through mergers or acquisitions.stores. Second is the performance of stores once they are open. Sales vary at our existing stores from one year to the next. We refer to this as a change in comparable store net sales, because we include only those stores that are open throughout both of the periods being compared, beginning after the first fifteen months of operation. We include sales from stores expanded or remodeled during the period in the calculation of comparable store net sales, which has the effect of increasing our comparable store net sales. The term 'expanded'‘expanded’ also includes stores that are relocated. Stores that have been re-bannered are considered to be new stores and are not included in the calculation of the comparable store net sales change until after the first fifteen months of operation under the new banner. Both our Dollar Tree stores and our acquired Family Dollar stores are included in the comparable store net sales calculations for the 13 and 39 weeks ended October 28, 2017.brand.
At October 28, 2017,April 30, 2022, we operated stores in 48 states and the District of Columbia, as well as stores in five Canadian provinces. A breakdown of store counts and square footage by segment for the 3913 weeks ended October 28, 2017April 30, 2022 and October 29, 2016May 1, 2021 is as follows:
39 Weeks Ended13 Weeks Ended
October 28, 2017 October 29, 2016April 30, 2022May 1, 2021
Dollar Tree Family Dollar Total Dollar Tree Family Dollar TotalDollar TreeFamily DollarTotalDollar TreeFamily DollarTotal
Store Count:           Store Count:
Beginning6,360
 7,974
 14,334
 5,954
 7,897
 13,851
Beginning8,061 8,016 16,077 7,805 7,880 15,685 
New stores264
 202
 466
 312
 168
 480
New stores42 70 112 65 41 106 
Rebannered stores—
 —
 —
 83
 (84) (1)
Re-bannered storesRe-bannered stores(2)5 3 — — — 
Closings(20) (36) (56) (29) (17) (46)Closings(13)(17)(30)(3)(16)(19)
Ending6,604
 8,140
 14,744
 6,320
 7,964
 14,284
Ending8,088 8,074 16,162 7,867 7,905 15,772 
Relocations78
 27
 105
 58
 99
 157
Relocations12 21 33 18 18 36 
           
Selling Square Feet (in millions):Selling Square Feet (in millions):          Selling Square Feet (in millions):
Beginning54.7
 57.7
 112.4
 51.3
 57.1
 108.4
Beginning69.7 59.2 128.9 67.4 57.7 125.1 
New stores2.2
 1.4
 3.6
 2.5
 1.2
 3.7
New stores0.4 0.6 1.0 0.5 0.4 0.9 
Rebannered stores—
 —
 —
 0.6
 (0.6) —
Closings(0.2) (0.2) (0.4) (0.1) (0.2) (0.3)Closings(0.1)(0.1)(0.2)— (0.1)(0.1)
Relocations0.2
 —
 0.2
 0.1
 0.1
 0.2
Relocations— 0.1 0.1 — — — 
Ending56.9
 58.9
 115.8
 54.4
 57.6
 112.0
Ending70.0 59.8 129.8 67.9 58.0 125.9 
Stores are included as rebannersre-banners when they close or open, respectively. Comparable store net sales for Dollar Tree may be negatively affected when a Family Dollar store is rebannered near an existing Dollar Tree store.
The average size of stores opened during the 3913 weeks ended October 28, 2017April 30, 2022 was approximately 8,1708,580 selling square feet for the Dollar Tree segment and 7,1208,800 selling square feet for the Family Dollar segment. We believe that these size stores are in the ranges of our optimal sizes operationally and give our customers a shopping environment which invites them to shop longer, buy more and make return visits, which increases our customer traffic.visits.
For
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The percentage change in comparable store net sales on a constant currency basis for the 13 weeks ended October 28, 2017, comparable store net sales increased 3.2% on a constant currency basis. April 30, 2022, as compared with the preceding year, is as follows:
13 Weeks Ended April 30, 2022
Sales GrowthChange in
Customer Traffic		Change in
Average Ticket
Consolidated4.4 %(3.6)%8.4 %
Dollar Tree Segment11.2 %(3.6)%15.4 %
Family Dollar Segment(2.8)%(3.7)%1.0 %
Constant currency basis refers to the calculation excluding the impact of currency exchange rate fluctuations. We calculated the constant


currency basis increasechange by translating the current year quarter’syear’s comparable store net sales in Canada using the prior year third quarter’syear’s currency exchange rates. We believe that the constant currency basis provides a more accurate measure of comparable store net sales performance. Including the impact of currency, comparable store net sales increased 3.3% due to increased customer count and average ticket. On a constant currency basis, comparable store net sales increased 5.0% in the Dollar Tree segment and increased 1.5% in the Family Dollar segment for the 13 weeks ended October 28, 2017. Comparable store net sales in the Dollar Tree segment increased 5.2% when adjusted for the impact of Canadian currency fluctuations. Comparable store net sales are positively affected by our expanded and relocated stores, which we include in the calculation, and are negatively affected when we open new stores, rebannerre-banner stores or expand stores near existing stores.
Dollar Tree Initiatives
In September 2021, we announced our new $1.25 price point initiative and we completed the rollout of this initiative to all Dollar Tree stores during the first quarter of fiscal 2022, increasing the price point on a majority of our $1 merchandise to $1.25. To date, the increase in the price point has more than offset the decline in the number of units sold. We expect to see a greater lift in gross margin in the first half of fiscal 2022 as we sell through our existing inventory. During fiscal 2022, we have begun investing in new products and modifying existing products to provide greater value for our customers and increase customer traffic and store productivity.
We are also continuing to implement our Dollar Tree Plus initiative which introduces products priced at the $3 and $5 price points and provides our customers with extraordinary value in discretionary categories. As of April 30, 2022, we have approximately 1,470 Dollar Tree Plus stores and we expect to implement the concept in a total of 1,500 stores during fiscal 2022.
After a successful launch of the Instacart platform in the Family Dollar segment, we began testing the online service delivery at Dollar Tree stores in the third quarter of fiscal 2021. As of April 30, 2022, the Instacart platform covers nearly 7,000 Dollar Tree stores. This enables our customers to shop online and receive same-day delivery without having to visit a store.
We believe that our Dollar Tree initiatives have and will continue to positively affect our comparable store net sales and earnings.
Family Dollar Initiatives
We are executing several initiatives in our Family Dollar stores to increase sales. In March 2021, we announced the development of a new combination store format, which we refer to as a Combo Store, that leverages the strengths of the Dollar Tree and Family Dollar brands under one roof to serve small towns across the country. We are taking Family Dollar’s great value and assortment and blending in select Dollar Tree merchandise categories, creating a new store format targeted for small towns and rural communities with populations of 3,000 to 4,000 residents. As of April 30, 2022, we operated more than 330 Combo Stores.
We are also continuing to execute our store optimization programs. Our H2 stores have significantly improved merchandise offerings throughout the store, including the addition of Dollar Tree $1.25 merchandise items and establishing a minimum number of freezer and cooler doors. These stores have higher customer traffic and provide a higher average comparable store net sales lift, when compared to non-renovated stores, in the first year following renovation. H2 stores perform well in a variety of locations and especially in locations where our Family Dollar stores have been most challenged in the past. As of April 30, 2022, we have approximately 3,985 H2 stores.
Based on the success of the Combo Store and H2 store formats, in fiscal 2022, we anticipate adding 400 new or relocated Combo Stores in total and plan to complete 800 renovations into either the Combo Store format or the H2 store format in total.
After a successful pilot program in 2020, we entered into a partnership with Instacart in February 2021, which covers more than 6,000 Family Dollar stores across the United States as of April 30, 2022.
In addition, we added adult beverage to approximately 80 stores in the first quarter of fiscal 2022. We believe the addition of adult beverage to our assortment will drive traffic to our stores.

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Additional Considerations
The following trends or uncertainties have already impacted or could impact our business or results of operations during 2022 or in the future:
•Product Availability. We rely heavily on Trans-Pacific shipping to acquire merchandise for our stores, and we are experiencing significant shipping delays as a result of the shipping capacity shortage which has negatively impacted our sales and the availability of product in the stores. We are also experiencing issues with port congestion and pandemic-related port closings and ship diversions, as well as increased costs for available merchandise. These supply chain issues have been exacerbated by the factory shutdowns that began in China in the first quarter of 2022 due to the imposition of lockdowns in certain Chinese localities to address a worsening outbreak of COVID-19. In addition, the union collective bargaining agreement that governs the wages and benefits of a large number of longshoremen at ports in California, Oregon, and Washington is scheduled to expire on July 1, 2022, and if the parties are unable to agree on a new or extended collective bargaining agreement, there could be work stoppages or strikes that result in additional shipping delays and disruptions which could adversely affect the availability of imported merchandise and increase our costs. If these shipping delays and other supply chain issues do not improve, we believe they will continue to have a material adverse impact on product availability and product mix, and on our sales and merchandise margin. We could also experience higher markdowns. Sales could be positivelynegatively impacted if imported goods do not arrive in time to stock our stores, including the timely delivery of adequate levels of seasonal and holiday merchandise. If higher cost domestic goods are substituted for delayed imports, our merchandise margin could be adversely impacted. To address delays in shipments, we are prioritizing product categories for shipment in an effort to obtain seasonal assortments in advance of holiday seasons, adding and evaluating the use of long-term and short-term chartered vessels, and adding alternative sources of supply from North American factories.
•Freight Costs. We are experiencing significantly higher international and domestic freight costs as a result of disruptions in the global supply chain. This trend, which accelerated in the second half of fiscal 2021, is likely to continue during fiscal 2022. The combination of increased demand and limited availability of Trans-Pacific shipping capacity has caused spot market prices to increase substantially. We are a large importer of merchandise from Asia and particularly sensitive to freight costs. Due to these trends, in the first half of fiscal 2022, we expect import and domestic freight to present relatively higher cost pressure as compared to the first half of fiscal 2021. In addition, diesel fuel prices are and are expected to remain significantly higher in fiscal 2022 and may increase further because of international tensions. We are working to reduce our freight costs by using chartered vessels, evaluating and securing long-term contracts with our carriers for vessels dedicated in large part to our needs, and adding alternative sources of supply that do not rely on Trans-Pacific shipping.
•Labor Shortage and Wage Increases. We are experiencing a shortage of associates and applicants to fill staffing requirements at our stores and distribution centers due to the current labor shortage affecting businesses. This has adversely affected by a numberour stores operations, the operating efficiency of our Dollar Tree initiatives, as debitdistribution centers and credit card penetration continuedour ability to transport merchandise from our distribution centers to our stores. The steps we have taken to address the labor shortage include hosting national hiring events, paying sign-on bonuses in our distribution centers, offering enhanced wages in select competitive markets, and paying tuition reimbursement. In 2022, the minimum wage has increased in certain States and localities. In addition, the federal minimum wage may increase depending on the outcome of legislation proposed in Congress. Minimum wage increases in States and localities and wage investments in certain markets are expected to increase our costs by more than $195.0 million in 2022.
•Build-out and Construction Costs and Delays. We have experienced higher commodity and other costs associated with the build-out of new stores and the renovation of existing stores. In addition, we have experienced delays in new store openings due to inspection, permitting and contractor delays. We anticipate these increased costs and delays may continue for the foreseeable future.
•Impact of COVID-19. The future course of the COVID-19 pandemic, the timing and impact of any governmental responses to future outbreaks and the effectiveness of health measures such as vaccines remains uncertain. As a result, it is challenging for us to predict the future impact of COVID-19 on our business, financial results, customers, suppliers and the broader economies in the locations that we operate as well as the future impact on our supply chain and the global supply chain.
•West Memphis Distribution Center. On February 11, 2022, the Food and Drug Administration 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. During the first quarter of fiscal 2022, we incurred costs totaling $0.13 per diluted share related to the product recall, remediation efforts and asset impairment. In the second quarter of fiscal 2022, we announced plans to close DC 202 and we expect to incur an estimated $0.22 per diluted share for lost sales, freight, merchandise disposal, payroll and legal costs associated with the remediation and closure of the facility.
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•Strategic Investments. Building on our current initiatives, we are currently developing plans to make additional multi-year strategic investments across both banners to further position the company for long-term sustained growth. We anticipate that that these investments will relate to four key areas of our business: our associates, our distribution center network and supply chain, our product pricing and value proposition, and our technology infrastructure. Within these areas, the focus of these investments is expected to be on associate wages, improved store execution, enhanced safety and working conditions, increased supply chain efficiencies, competitive pricing at Family Dollar, and enhancements to our systems infrastructure. However, our plans have not been finalized at this time, and there is uncertainty regarding the amount and timing of these investments and the impact of such investments on our future business and results of operations.
Results of Operations
Our results of operations and period-over-period changes are discussed in the following section. Note that gross profit margin is calculated as gross profit (i.e., net sales less cost of sales) divided by net sales. The selling, general and administrative expense rate and operating income margin are calculated by dividing the applicable amount by total revenue.
Net Sales
13 Weeks Ended
April 30,May 1,Percentage
Change
(dollars in millions)20222021
Net sales$6,900.1 $6,476.8 6.5 %
Comparable store net sales change,
    on a constant currency basis		4.4 %0.8 %
The increase in net sales in the 13 weeks ended October 28, 2017,April 30, 2022 was a result of sales of $185.5 million at new stores, and we continued the roll-out of frozen and refrigerated merchandise to more of our Dollar Tree stores. At October 28, 2017,a comparable store net sales increase in the Dollar Tree segment, had frozen and refrigerated merchandise in approximately 5,135 stores compared to 4,710 stores at October 29, 2016. We believe that this has and will continue to enable us to increase sales and earningspartially offset by increasing the number of shopping trips made by our customers.
We believe our initiatives at Family Dollar are positively affecting thea comparable store net sales performance. Among these isdecrease in the Family Dollar segment.
Enterprise comparable store net sales increased 4.4% on a store renovation initiative. Duringconstant currency basis in the 13 weeks ended October 28, 2017, we completed approximately 190 Family Dollar renovations. These renovations have focused on creating an exciting and more productive Family Dollar shopping experience. Renovations bring some of the oldest stores to our brand standard, including, more productive end-caps, highlighting more relevant and prominent seasonal offerings, assortment expansions in beverage and snacks, hair care, and food in coolers and freezers. Category adjacencies and updating our front-end checkout are also part of the renovation program. We are making a number of improvements to the conditions of our stores to provide our customers with a consistent and improved shopping experience. In addition, we have focused on re-branding our private brand labels in our stores. These private brands are being developed to provide national brand comparable quality and great values for our customers, as part of our Compare and Save marketing program.
In the first quarter of 2017, we evaluated the collectability of the divestiture-related receivable from Dollar Express. Based on information available, we determined that the outstanding balance of $50.9 million was not recoverable and recorded an impairment charge to write down the receivable to zero. Subsequent to the first quarter, an additional $2.6 million was recordedApril 30, 2022, as a receivable and impaired. The $53.5 millionresult of an 8.4% increase in impairment charges for the 39 weeks ended October 28, 2017 is recorded as “Receivable impairment”average ticket, partially offset by a 3.6% decrease in the accompanying condensed consolidated income statements. We plan to take all appropriate actions to enforce the Company's rights and we do not expect any additional amounts to become impaired.
Results of Operations
13 Weeks Ended October 28, 2017 Compared to the 13 Weeks Ended October 29, 2016
Net Sales. Net sales increased $315.0 million, or 6.3%, compared with last year's third quarter, resulting from sales in new Dollar Tree and Family Dollar stores and increased comparable store net sales.customer traffic. Comparable store net sales increased 3.2% on a constant currency basis as a result of increases in average ticket and customer count. On a constant currency basis, comparable store net sales increased 5.0% in the Dollar Tree segment and increased 1.5% in the Family Dollar segment for the 13 weeks ended October 28, 2017. Comparable store net sales are positively affected by our expanded and relocated stores, which we include in the calculation, and are negatively affected when we open new stores, rebanner stores or expand stores near existing stores.
Gross Profit. Gross profit increased by $145.5 million or 9.6%, to $1,666.0 million in the third quarter of 2017 compared to $1,520.5 million in the third quarter of 2016. Gross profit margin increased to 31.3% in the current quarter from 30.4% in the same quarter last year. Our gross profit margin improvement was the result of lower merchandise costs, markdowns and occupancy costs as a percentage of sales in the current quarter.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $1,240.8 million in the third quarter of 2017 from $1,178.1 million in the same quarter last year, an increase of $62.7 million or 5.3%. As a percentage of sales, selling, general and administrative expenses decreased to 23.3% in the third quarter of 2017 from 23.6% in the same quarter last year. The decrease is the result of the net of the following:
•lower depreciation costs;
lower store operating costs resulting primarily from lower utility costs as a percentage of sales;
higher operating and corporate expenses resulting from higher advertising and store supplies costs and increased legal fees; and,
higher payroll costs resulting from higher incentive compensation expense and store hourly wages, partially offset by lower health insurance costs.


Operating Income. Operating income for the current quarter increased to $425.2 million compared with $342.4 million in the same period last year and operating income margin increased to 8.0% in the current quarter from 6.8% in last year's quarter.
Interest expense, net. Interest expense, net was $69.7 million in the third quarter of 2017 compared to $112.1 million in the prior year quarter. The decrease is due to lower debt outstanding in the current quarter as a result of $990.1 million in prepayments in the third and fourth quarters of 2016, as well as the $500.0 million prepayment in the second quarter of 2017. Last year's third quarter included accelerated expensing of $26.6 million of amortizable non-cash deferred financing costs and $2.6 million in fees associated with the refinancing of the New Secured Credit agreement.
Income Taxes. Our effective tax rate for the 13 weeks ended October 28, 2017 was 32.4% compared to 25.5% for the 13 weeks ended October 29, 2016. The increase is primarily attributable to a decrease to the statutory rate for North Carolina announced in 2016 which significantly decreased the deferred tax liability related to the trade name intangible asset and resulted in a $21.4 million decrease in tax expense in 2016. The 2017 rate reflects a reduction of approximately $5.6 million in the reserve for uncertain tax positions resulting from statute expirations, the reduction of interest accrued on method changes, a decrease in the state tax rate and an increase in work opportunity tax credits in relation to income.
39 Weeks Ended October 28, 2017 Compared to the 39 Weeks Ended October 29, 2016
Net Sales. Net sales in the 39 weeks ended October 28, 2017 increased $801.2 million, or 5.3%, compared with the same period last year, resulting from sales in new Dollar Tree and Family Dollar stores and increased comparable store net sales. Comparable store net sales increased 1.8% on a constant currency basis due to increased customer count and average ticket. Comparable store net sales also increased 1.8%4.4% when adjusted forincluding the impact of Canadian currency fluctuations. On a constant currency basis, comparable store net sales increased 3.5%11.2% in the Dollar Tree segment and increased 0.3%decreased 2.8% in the Family Dollar segment forsegment.
Gross Profit
13 Weeks Ended
April 30,May 1,Percentage
Change
(dollars in millions)20222021
Gross profit$2,340.5 $1,964.1 19.2 %
Gross profit margin33.9 %30.3 %3.6 %
The increase in gross profit margin in the 3913 weeks ended October 28, 2017. ComparableApril 30, 2022 was a result of the net of the following:
•Merchandise cost, including freight, decreased 365 basis points resulting primarily from higher initial mark-on on both segments and increased sales of higher margin discretionary merchandise on the Dollar Tree segment, partially offset by higher freight costs and increased sales of lower margin consumable merchandise on the Family Dollar segment.
•Distribution costs decreased 35 basis points due to leverage from the comparable store net sales are positively affectedincrease on the Dollar Tree segment and higher capitalized amounts due to increases in inventory levels on both segments, partially offset by our expanded and relocated stores, which we includehigher hourly wages.
•Occupancy costs decreased 15 basis points due to leverage from the comparable store net sales increase.
•Shrink costs increased 10 basis points in the calculation, and are negatively affected when we open new stores, rebanner stores or expand stores near existing stores.
Gross Profit. Gross profit increased by $333.5 million or 7.3%,current year quarter resulting from more favorable inventory results in relation to $4,920.9 millionaccruals in the 39 weeks ended October 28, 2017 comparedprior year quarter.
•Markdown costs increased 45 basis points due to $4,587.4 million forhigher clearance markdowns resulting from a move to a higher value assortment at the 39 weeks ended October 29, 2016. Gross profit margin increased to 31.0% in$1.25 price point on the first nine months of 2017 from 30.4% in the first nine months of 2016. Our gross profit margin improvement was primarily theDollar Tree segment and as a result of lowershipping delays of seasonal merchandise costs as a percentageand slow moving inventory items on the Family Dollar segment.
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Table of sales resulting from improved mark-on in the first nine months of 2017.Contents
Selling, General and Administrative Expenses. Selling,
13 Weeks Ended
April 30,May 1,Percentage
Change
(dollars in millions)20222021
Selling, general and administrative
   expenses		$1,611.5 $1,447.1 11.4 %
Selling, general and administrative
   expense rate		23.3 %22.3 %1.0 %
The increase in the selling, general and administrative expenses increased to $3,687.4 millionexpense rate in the 3913 weeks ended October 28, 2017 from $3,469.1 million inApril 30, 2022 was the same period last year, an increaseresult of $218.3 million or 6.3%. As a percentage of sales,the following:
•Other selling, general and administrative expenses increased to 23.2% in the 39 weeks ended October 28, 2017 from 23.0% in the same period last year. The increase is the result of the $53.5 million receivable impairment. Excluding the receivable impairment, selling, general and administrative expenses decreased to 22.9% due to the net of the following:
lower depreciation costs;
lower store operating costs as a percentage of sales;
higher operating and corporate expenses70 basis points primarily due to long-lived asset impairments at the Family Dollar West Memphis, Arkansas distribution center, higher advertising costs;legal fees, including costs related to the reconstitution of the Board of Directors, and higher store supplies expense.
higher•Store facility costs increased 15 basis points primarily due to costs associated with the removal of product from certain Family Dollar stores in connection with the voluntary retail-level product recall.
•Payroll expenses increased 10 basis points primarily due to minimum wage increases and other investments in store payroll costs resulting fromand higher incentive compensation expenses, offset partially by leverage from the comparable store net sales increase.
•Depreciation and amortization expense increased 5 basis points primarily due to capital expenditures related to store renovations and improvements, partially offset by leverage from the comparable store hourly wages.net sales increase.
Operating Income
Operating Income.
13 Weeks Ended
April 30,May 1,Percentage
Change
(dollars in millions)20222021
Operating income$731.5 $519.9 40.7 %
Operating income margin10.6 %8.0 %2.6 %
Operating income margin increased to 10.6% for the 3913 weeks ended October 28, 2017 increasedApril 30, 2022 compared to $1,233.5 million compared with $1,118.3 million in8.0% for the same period last year and operating income margin increased to 7.8%resulting from the increase in the first nine months of 2017 from 7.4% in the first nine months of 2016. Excluding the receivable impairment, operating income increased to $1,287.0 million and operating income margin increased to 8.1% as a result of the increased gross profit margin, and lowerpartially offset by the increase in the selling, general and administrative expensesexpense rate, as described above.
Interest Expense, Net
13 Weeks Ended
April 30,May 1,Percentage
Change
(dollars in millions)20222021
Interest expense, net$34.0 $33.0 3.0 %
Interest expense, net increased $1.0 million in the 13 weeks ended April 30, 2022 compared to the same period last year.
Provision for Income Taxes
13 Weeks Ended
April 30,May 1,Percentage
Change
(dollars in millions)20222021
Provision for income taxes$161.1 $112.4 43.3 %
Effective tax rate23.1 %23.1 %— %
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The effective tax rate was 23.1% for both the 13 weeks ended April 30, 2022 and the comparable prior year period. Higher state tax rates and lower Work Opportunity Tax credits as a percentage of sales.
Interest expense, net. Interest expense, net was $220.2 million in the first nine months of 2017 compared to $286.7 million in the first nine months of the prior year. The decrease is due to lower debt outstandingpre-tax income in the current year as a result of $990.1 million in prepayments in the third and fourth quarters of 2016 as well as the $500.0 million prepayment in the second quarter of 2017. The 39 weeks ended October 29, 2016 also includes the expensing of $26.6 million of amortizable non-cash deferred financing costs and $2.6 million in fees associated with the refinancing of the New Secured Credit agreement.
Income Taxes. Our effectivewere offset by higher tax rate for the 39 weeks ended October 28, 2017 was 33.4% compared to 30.9% for the 39 weeks ended October 29, 2016. The increase is primarily attributable to a one-time benefit for an election allowing the Family Dollar acquisition to be treated as an asset purchase for certain state tax purposes in 2016 and a decrease in the statutory rate for North Carolina announced in 2016 which decreased the deferred tax liabilitydeductions related to the trade name intangible asset and resultedrestricted stock vesting.


in a $21.4 million decrease in tax expense in 2016. In 2017, North Carolina announced a further reduction to the statutory tax rate which resulted in a further decrease in the deferred tax liability related to the trade name intangible asset and a $9.9 million decrease in tax expense. The 2017 rate also includes a reduction of approximately $5.6 million in the reserve for uncertain tax positions resulting from statute expirations and the reduction of interest accrued on method changes.
Segment Information
We operate a chain of more than 14,700 retail discount stores in 48 states and five Canadian provinces. Our operations are conducted in two reporting business segments:operating results for the Dollar Tree and Family Dollar. We define ourDollar 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 at the fixed price of $1.00. The Dollar Tree segment includes our operations under the "Dollar Tree" and "Dollar Tree Canada" brands, 11 distribution centersperiod-over-period changes are discussed in the United States, two distribution centers in Canada and a Store Support Center in Chesapeake, Virginia.following sections.
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, 11 distribution centers and a Store Support Center in Matthews, North Carolina.
We measure the results of our segments using, among other measures, each segment's net sales, gross profit and operating income. We 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. If the measurement of a segment changes, prior period amounts and balances would be reclassified to be comparable to the current period's presentation.
Dollar Tree
The following table summarizes the operating results of the Dollar Tree segment:
13 Weeks Ended
April 30,May 1,Percentage
Change
(dollars in millions)20222021
Net sales$3,781.8 $3,321.3 13.9 %
Gross profit1,534.7 1,118.3 37.2 %
Gross profit margin40.6 %33.7 %6.9 %
Operating income$764.2 $400.3 90.9 %
Operating income margin20.2 %12.1 %8.1 %
  13 Weeks Ended 39 Weeks Ended
  October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016
(in millions) $ % of Sales $ % of Sales $ % of Sales $ % of Sales
Net sales $2,685.0
   $2,466.9
   $7,843.6
   $7,238.9
  
Gross profit 942.6
 35.1% 857.3
 34.8% 2,735.0
 34.9% 2,496.2
 34.5%
Operating income 317.3
 11.8% 286.0
 11.6% 921.9
 11.8% 829.2
 11.5%
Net sales for the Dollar Tree segment increased 8.8% and 8.4% for the 13 and 39 weeks ended October 28, 2017, respectively, as compared to the same periods last year. The increases were due to sales from new stores and comparable store net sales increases of 5.0% and 3.5% on a constant currency basis for the 13 and 39 weeks ended October 28, 2017, respectively, resulting from increases in customer count and average ticket.
Gross profit margin for Dollar Tree increased to 35.1%$460.5 million, or 13.9%, for the 13 weeks ended October 28, 2017April 30, 2022 compared to 34.8% for the same period last year. The increase iswas due to an increase in comparable store net sales of 11.2% and $111.1 million of new store sales. Average ticket increased 15.4% and customer traffic decreased 3.6%. During the 13 weeks ended April 30, 2022, we completed the rollout of our $1.25 price point initiative which increased the selling price of the majority of our $1 merchandise to $1.25. The increase in price point more than offset the decline in the number of units sold during the quarter.
    Gross profit margin for the Dollar Tree segment increased to 40.6% for the 13 weeks ended April 30, 2022 compared to 33.7% for the same period last year as a result of the net of the following:
lower merchandise•Merchandise cost, including freight, decreased 590 basis points primarily due primarily to higher initial mark-on and increased sales of higher margin variety items and improved mark-on; and,
lower occupancy costs resulting from the leverage from the higher comparable store net sales in the quarter.
Gross profit margin for Dollar Tree for the 39 weeks ended October 28, 2017 increased to 34.9% from 34.5% for the same period last year. The increase is due to the following:
lowerdiscretionary merchandise, cost, including freight, due primarily to improved mark-on and lower freight costs; and,
lower shrink expense resulting from improved physical inventory results in the current year.
Operating income margin for Dollar Tree increased to 11.8% for the 13 weeks ended October 28, 2017 as compared to 11.6% for the same period last year. The increase in operating income margin in the 13 weeks ended October 28, 2017 was the result of higher gross profit margin, partially offset by higher selling, general and administrative expenses as a percentage of sales. The increase in selling, general and administrative expense as a percentage of sales isfreight costs.
•Occupancy costs decreased 80 basis points primarily due to the net of the following:


higher payroll costs, resulting primarily from higher incentive compensation expense and higher store hourly wages;
higher operating and corporate expenses; and,
lower depreciation costs and utility costs as a percentage of sales resulting from the leverage from the comparable store net sales increase.
Operating income margin for Dollar Tree increased to 11.8% for the 39 weeks ended October 28, 2017 as compared to 11.5% for the same period last year. The increase in operating income margin in the 39 weeks ended October 28, 2017 was the result of higher gross profit margin, partially offset by higher selling, general and administrative expenses. The increase in selling, general and administrative expense as a percentage of sales is•Distribution costs decreased 50 basis points due to the net of the following:
higher payroll costs, resulting primarily from higher store hourly wages and higher incentive compensation expense; and,
lower depreciation costs and utility costs as a percentage of sales resulting from the leverage from the comparable store net sales increase.increase and higher capitalized balances resulting from increases in inventory levels in the current quarter, partially offset by higher hourly wages.
•Markdown costs increased 30 basis points resulting primarily from markdowns for clearance items as we move to a higher value assortment at the $1.25 price point.
Operating income margin for the Dollar Tree segment increased to 20.2% for the 13 weeks ended April 30, 2022 from 12.1% for the same period last year as a result of the gross profit margin increase noted above and a decrease in the selling, general and administrative expense rate. The selling, general and administrative expense rate decreased to 20.4% in the 13 weeks ended April 30, 2022 compared to 21.6% for the same period last year as a result of the net of the following:
•Payroll expenses decreased 100 basis points primarily due to leverage from the comparable store net sales increase, partially offset by minimum wage increases and other investments in store payroll as well as higher incentive compensation expenses.
•Store facility costs decreased 25 basis points primarily due to leverage from the comparable store net sales increase.
•Depreciation and amortization expense decreased 10 basis points primarily due to leverage from the comparable store net sales increase.
•Other selling, general and administrative expenses increased 10 basis points primarily due to higher store supplies expense in connection with the $1.25 price point initiative as well as higher costs for supplies.
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Family Dollar
The following table summarizes the operating results of the Family Dollar segment:
13 Weeks Ended
April 30,May 1,Percentage
Change
(dollars in millions)20222021
Net sales$3,118.3 $3,155.5 (1.2)%
Gross profit805.8 845.8 (4.7)%
Gross profit margin25.8 %26.8 %(1.0)%
Operating income$89.5 $211.4 (57.7)%
Operating income margin2.9 %6.7 %(3.8)%
  13 Weeks Ended 39 Weeks Ended
  October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016
(in millions) $ % of Sales $ % of Sales $ % of Sales $ % of Sales
Net sales $2,631.6
   $2,534.7
   $8,041.3
   $7,844.8
  
Gross profit 723.4
 27.5% 663.2
 26.2% 2,185.9
 27.2% 2,091.2
 26.7%
Operating income 107.9
 4.1% 56.4
 2.2% 311.6
 3.9% 289.1
 3.7%
Net sales for the Family Dollar increased $96.9segment decreased $37.2 million, or 3.8% and $196.5 million or 2.5% for the 13 and 39 weeks ended October 28, 2017, respectively, compared to the same periods last year. The increases were primarily due to sales from new stores and comparable store net sales increases of 1.5% and 0.3% in the 13 weeks and 39 weeks ended October 28, 2017, respectively. The comparable store net sales increases in the 13 and 39 weeks ended October 28, 2017 were primarily the result of increases in average ticket.
Gross profit increased $60.2 million or 9.1%1.2%, for the 13 weeks ended October 28, 2017,April 30, 2022 compared to the same period last year. The grossdecrease was due to a comparable store net sales decrease of 2.8%, partially offset by $74.4 million of new store sales. For the 13 weeks ended April 30, 2022, average ticket increased 1.0% and customer traffic declined 3.7%. Customers received significant government stimulus dollars in the prior year quarter. In addition, during the 13 weeks ended April 30, 2022, approximately 400 stores serviced by the West Memphis, Arkansas distribution center were temporarily closed in connection with the voluntary retail-level product recall. The Family Dollar comparable store net sales decrease was 0.8% when excluding the effect of the store closures.
Gross profit margin for the Family Dollar segment decreased to 25.8% for the 13 weeks ended October 28, 2017 increased to 27.5%April 30, 2022 compared to 26.2%26.8% for the same period in the prior year. The increase is due to the following:
lower markdown expense resulting from lower promotional markdowns due to the improved sales performance;
lower merchandise cost, including freight resulting from higher initial mark-on; and,
lower distribution costs.
Gross profit increased $94.7 million or 4.5% for the 39 weeks ended October 28, 2017, compared to the same period last year. The gross profit margin for the 39 weeks ended October 28, 2017 increased to 27.2% compared to 26.7% for the same period in the prior year. The increasedecrease is due to the net of the following:
•lowerMarkdown costs increased 75 basis points primarily due to higher clearance markdowns related to the shipping delays in seasonal merchandise and slow moving inventory items.
•Occupancy costs increased 45 basis points primarily due to loss of leverage from the comparable store net sales decrease and higher real estate tax expenses.
•Shrink expense increased 25 basis points in the current year quarter resulting from more favorable inventory results in relation to accruals in the prior year quarter.
•Distribution costs decreased 15 basis points due to higher capitalized balances resulting from increases in inventory levels in the current quarter, partially offset by higher hourly wages.
•Merchandise cost, including freight, resultingdecreased 35 basis points primarily fromdue to higher initial mark-on;
mark-on, partially offset by higher freight costs and higher sales of lower markdown expense resulting from lower promotional markdowns due to the improved sales performance;
higher shrink expense; and,
higher store occupancy costs.margin consumable merchandise.
Operating income margin for the Family Dollar increasedsegment decreased to 4.1%2.9% for the 13 weeks ended October 28, 2017 asApril 30, 2022 from 6.7% for the same period last year resulting from the gross profit margin decrease noted above and an increase in the selling, general and administrative expense rate. The selling, general and administrative expense rate was 23.0% in the 13 weeks ended April 30, 2022 compared to 2.2%20.2% for the same period last year. The current quarter increase in the 13 weeks ended October 28, 2017 isselling, general and administrative expense rate was due to the gross profit increase noted abovefollowing:
•Payroll expenses increased 90 basis points primarily due to minimum wage increases and decreasedother investments in store payroll as well as loss of leverage from the decrease in comparable store net sales.
•Other selling, general and administrative expenses as a percentage of sales. Selling, general and administrative expenses


decreased to 23.4% as a percentage of sales in the 13 weeks ended October 28, 2017 compared to 24.0% for the same period last year. This decrease as a percentage of sales isincreased 85 basis points primarily due to long-lived asset impairments at the West Memphis, Arkansas distribution center, loss of leverage from the decrease in comparable store net sales, higher store supplies expense related to store projects as well as higher cost of the following:
•lower depreciation costs;
lower payroll-related costs, including workers' compensationsupplies, and health insurance, partially offset by higher incentive compensation;
lower store operating costs, resulting from lower utility costs partially offset by higher repairs and maintenance costs; and,
higher operating and corporate expenses resulting from higher advertising and store supply costs and increased legal fees.
Operating income margin for Family Dollar for the 39 weeks ended October 28, 2017•Store facility costs increased to 3.9% compared to 3.7% for the same period last year. Operating income was impacted by the $53.5 million receivable impairment in the 39 weeks ended October 28, 2017. Operating income margin excluding the receivable impairment increased to 4.5% for the 39 weeks ended October 28, 2017 as compared to 3.7% for the same period last year. The increase in the 39 weeks ended October 28, 2017, excluding the receivable impairment, is65 basis points primarily due to costs associated with the gross profit margin increase noted aboveremoval of product from certain stores in connection with the voluntary retail-level product recall and decreased selling, general and administrative expenses, as a percentageloss of sales. Theleverage from the decrease in selling, generalcomparable store net sales.
•Depreciation and administrative expenses as a percentage of sales, excluding the receivable impairment, was amortization expense increased 40 basis points primarily due to loss of leverage from the decrease in comparable store net sales and capital expenditures related to store renovations and improvements.
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Table of the following:Contents
•lower depreciation costs;
•lower utility costs;
•lower payroll-related costs; and,
higher operating and corporate expenses resulting from higher advertising costs and store supply costs.
Liquidity and Capital Resources
Our business requires capital to build and open new stores, expand and renovate existing stores, expand our distribution network and operate and expand our existing stores. Our working capital requirements for existing stores are seasonal in nature and typically reach their peak in the months of September and October. Historically, we have satisfied our seasonal working capital requirements for existing stores and have funded our store opening and distribution network expansion programs from internally generated funds and borrowings under our credit facilities.
The following table compares cash-flow relatedcash flow-related information for the 3913 weeks ended October 28, 2017April 30, 2022 and October 29, 2016:May 1, 2021:
 39 Weeks Ended 13 Weeks Ended
 October 28, October 29, April 30,May 1,
(in millions) 2017 2016(in millions)20222021
Net cash provided by (used in):    Net cash provided by (used in):
Operating activities $592.6
 $655.3
Operating activities$538.5 $556.2 
Investing activities (445.5) (368.3)Investing activities(256.3)(222.8)
Financing activities (613.6) (290.0)Financing activities(49.1)(276.6)
Net cash provided by operating activities decreased $62.7$17.7 million primarily due primarily to an increase inhigher inventory levels and taxes paid,decreased trade payables, partially offset by an increase inhigher current year earnings, net income in 2017.of non-cash items and higher accrued liability balances.
Net cash used in investing activities increased $77.2$33.5 million primarily due to net restricted cash proceedshigher capital expenditures in 2016.the current year quarter.
Net cash used in financing activities increased $323.6decreased $227.5 million primarily due to $14.2 million of cash paid for stock repurchases in the current year quarter compared withto $241.3 million in the prior year primarily due to debt payments, including the $500 million pre-payment of debt in 2017. In the prior year, we refinanced a portion of our debt and debt payments exceeded the proceeds from long-term debt by $296.0 million.quarter.
At October 28, 2017,April 30, 2022, our totallong-term borrowings were $5,781.2 million$3.45 billion and we had $1,091.8 million$1.5 billion available under our revolvingRevolving Credit Facility, less amounts outstanding for standby letters of credit facility.totaling $45.9 million. We also have $330.0$425.0 million in Letter of Credit Reimbursement and Security Agreements with various financial


institutions, under which approximately $184.5$330.6 million was committed to letters of credit issued for routine purchases of imported merchandise as of October 28, 2017.April 30, 2022.
During the second quarterWe repurchased 89,779 shares of 2017, we prepaid $500.0 million of the $2.2 billion remaining outstanding under our Term Loan A-1.
In 2012, we entered into a promissory note with the state of Connecticut under which the state loaned us $7.0 million in connection with our acquisition, construction and installation of land, building, machinery and equipment for our distribution facility in Windsor, Connecticut. Under this agreement, if certain performance targets were met, the loan and related interest would be forgiven. Subsequent to October 28, 2017, we received notice from the state of Connecticut that the performance targets have been met and the loan has been forgiven. To reflect the loan being forgiven, we will record a $7.4 million non-operating gain in "Other (income) expense, net" in our Consolidated Income Statement in the fourth quarter of 2017.
There were no shares repurchasedcommon stock on the open market for $14.2 million during the 3913 weeks ended October 28, 2017April 30, 2022. We repurchased 2,150,572 shares of common stock on the open market for $250.0 million during the 13 weeks ended May 1, 2021. Of the shares repurchased during the 13 weeks ended May 1, 2021, approximately $8.7 million had not settled as of May 1, 2021 and October 29, 2016. Asthis amount was accrued in the accompanying unaudited condensed consolidated balance sheet as of October 28, 2017,May 1, 2021. At April 30, 2022, we had $1.0$2.5 billion remaining under Board repurchase authorization.
Recent Accounting Pronouncements
See note 1, Basis of Presentation, to the unaudited condensed consolidated financial statements included in Item 1 of Part I of this Form 10-Q, for a detailed description of recent accounting pronouncements.


Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to various types of market risk in the normal course of our business, including the impact of interest rate changes and diesel fuel cost changes. We may enter into interest rate or diesel fuel swaps to manage exposure to interest rate and diesel fuel price changes. We do not enter into derivative instruments for any purpose other than cash flow hedging and we do not hold derivative instruments for trading purposes.
Interest Rate Risk
At October 28, 2017, we had $1.6 billion in borrowings subjectOur exposure to interest rate fluctuations, representing approximately 27% ofrisk relates to our total debt. BorrowingsRevolving Credit Facility, as borrowings under the Term Loan A-1Revolving Credit Facility bear interest based on LIBORat SOFR, reset periodically, plus 0.10%, plus 0.875% to 1.50% to 2.25%,as determined based onby our secured netcredit ratings and leverage ratio. As of October 28, 2017, Term Loan A-1 bore interest at LIBOR plus 1.75%. A 50 basis point increase inAt April 30, 2022, there were no borrowings outstanding under the variable interest rate tied to our secured net leverage ratio would result in an annual increase in interest expense of $7.9 million.Revolving Credit Facility.
Item 4. CONTROLS AND PROCEDURES.Controls and Procedures.
Our management has carried out, with the participation of the Company'sour Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the Company'sour disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this report. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of October 28, 2017, the Company'sApril 30, 2022, our disclosure controls and procedures were designed and functioning effectively to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.
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There have been no changes in our internal control over financial reporting during the fiscal quarter ended October 28, 2017April 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Table of Contents
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.Legal Proceedings.
From time to time, we are defendants in ordinary, routine litigation or proceedings incidental to our business, including allegations regarding:
•employment-related matters;
•infringement of intellectual property rights;
•personal injury/wrongful death claims;
•real estate matters;
•environmental and safety issues; and
•product safety matters, which may include product recalls in cooperation with the Consumer Products Safety Commission or other jurisdictions;regulatory matters.
•real estate matters related to store leases; and
•environmental and safety issues.
In addition, we are currently defendants in national and state employment-relatedproceedings and responding to the regulatory matters described in Note 2 to our unaudited condensed consolidated financial statements. These include several proposed class and collective actions, litigation concerning injury from products and litigationaction complaints that have been filed against, as well as regulatory requests issued to, Family Dollar related to issues associated with Dollar Express and Sycamore Partners. For a discussion of these proceedings, please refer to “Note 4. Legal Proceedings,” included in “Part I. Financial Information, Item 1. Financial Statements” of this Form 10-Q.our West Memphis, Arkansas distribution center as well as Talc litigation.
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 lawsuitsmatters will not have a material effect on our results of operations for the period or year in which they are reserved or resolved. Based on the information available, including the amount of time remaining before trial, the results of discovery and the judgment of internal and external counsel, we aremay be unable to express an opinion as to the outcome of those matters which are not settledclose to being resolved and cannotmay be unable to estimate a loss or potential range of loss except as specified in Note 4. When a range is expressed, we are currently unable to determine the probability of loss within that range.loss.
Item 1A. RISK FACTORS.Risk Factors.
There have been no material changes to the risk factors described in "Item“Item 1A. Risk Factors" in the Company'sFactors” of our Annual Report on Form 10-K filed withfor the Securitiesfiscal year ended January 29, 2022, other than as set forth in the discussion of certain items that have impacted or could impact our business or results of operations during 2022 or in the future as disclosed in the “Additional Considerations” section within “Item 2. Management’s Discussion and Exchange Commission on March 28, 2017.Analysis of Financial Condition and Results of Operations” of this Form 10-Q.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.Unregistered Sales of Equity Securities and Use of Proceeds.
DuringThe following table presents our share repurchase activity during the 13 weeks ended October 28, 2017 the Company did not repurchase any sharesfirst quarter of common stock on the open market. 2022:
Fiscal PeriodTotal number of shares purchasedAverage price paid per shareTotal number of shares purchased as part of publicly announced plans or programsApproximate dollar value of shares that may yet be purchased under the plans or programs (in millions)
January 30, 2022 - February 26, 2022— $— — $2,500.0 
February 27, 2022 - April 2, 2022— — — 2,500.0 
April 3, 2022 - April 30, 202289,779 157.74 89,779 2,485.8 
Total89,779 $157.74 89,779 $2,485.8 
As of October 28, 2017,April 30, 2022, we had $1.0$2.5 billion remaining under Board repurchase authorization.
Item 3. DEFAULTS UPON SENIOR SECURITIES.Defaults Upon Senior Securities.
None.
Item 4. MINE SAFETY DISCLOSURES.Mine Safety Disclosures.
None.
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Item 5. OTHER INFORMATION.Other Information.
None.


Item 6. EXHIBITS.Exhibits.
Incorporated by Reference
ExhibitExhibit DescriptionFormExhibitFiling DateFiled Herewith
3.18-K3.16/21/2013
3.28-K3.14/6/2022
10.1*8-K10.13/21/2022
10.2*8-K10.23/21/2022
31.1X
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101The following financial statements from our Form 10-Q for the fiscal quarter ended April 30, 2022, formatted in Inline XBRL: (i) Condensed Consolidated Income Statements, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Shareholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to Unaudited Condensed Consolidated Financial StatementsX
104The cover page from our Form 10-Q for the fiscal quarter ended April 30, 2022, formatted in Inline XBRL and contained in Exhibit 101X
*Management contract or compensatory plan or arrangement
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    Incorporated by Reference  
Exhibit Exhibit Description Form Exhibit Filing Date Filed Herewith
3.1 
Amended Articles of Incorporation of Dollar Tree, Inc., effective June 20, 2013
 8-K 3.1 6/21/2013  
3.2 
Amended Bylaws of Dollar Tree, Inc., effective September 18, 2017
 8-K 3.1 9/18/2017  
31.1 
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
       X
31.2 
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
       X
32.1 
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
       X
32.2 
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
       X
101 The following financial statements from the Company's 10-Q for the fiscal quarter ended October 28, 2017, formatted in XBRL: (i) Condensed Consolidated Income Statements, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements       X
           
 

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DOLLAR TREE, INC.
Date:May 26, 2022By:DOLLAR TREE, INC.
Date:November 21, 2017By:/s/ Kevin S. Wampler
Kevin S. Wampler
Chief Financial Officer
(principal financial officer)



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