8-KOther Events

DOLLAR TREE, INC. 8-K Report (Mar 18, 2003)

Filed March 18, 2003For Securities:DLTR

Summary

Dollar Tree, Inc. (DLTR) filed this 8-K on March 18, 2003, primarily to report on two key developments: its fiscal year 2002 results and the impact of adopting FASB Interpretation No. 46 regarding the consolidation of a synthetic lease facility. The company has shifted its fiscal year to end on the Saturday closest to January 31, with Fiscal Year 2002 now covering February 1, 2002, to February 1, 2003. The adoption of FASB Interpretation No. 46 requires Dollar Tree to consolidate a variable interest entity related to its synthetic lease facility, impacting its financial statements by increasing net property and equipment, long-term debt, and depreciation and interest expenses, while also decreasing rent expense.

Key Highlights

  • 1Dollar Tree's fiscal year has changed to end on the Saturday closest to January 31, with Fiscal Year 2002 concluding on February 1, 2003.
  • 2The company is consolidating a $165.0 million synthetic lease facility due to the adoption of FASB Interpretation No. 46 (FIN 46).
  • 3Consolidation of the synthetic lease will increase net property and equipment by $128.8 million and long-term debt by $140.6 million.
  • 4Expected annual financial impacts from the consolidation include a $7.6 million increase in depreciation expense and a $4.5 million increase in interest expense.
  • 5Conversely, rent expense is expected to decrease by $3.5 million annually due to the accounting change.
  • 6The filing includes financial statements for the quarter and fiscal year ended February 1, 2003, as Exhibit 99.1.
  • 7Dollar Tree also announced its participation in the upcoming Merrill Lynch Retailing Leaders Conference.

Frequently Asked Questions

This 8-K filing is primarily to report on Dollar Tree's fiscal year 2002 results and to disclose the impact of adopting FASB Interpretation No. 46, which requires the consolidation of a synthetic lease facility into the company's financial statements.

The consolidation increases net property and equipment by $128.8 million, other assets by $1.0 million, and long-term debt by $140.6 million. It also results in decreases in current liabilities and long-term liabilities related to lease accounting adjustments.

Dollar Tree anticipates an annual increase in depreciation expense of $7.6 million and an increase in interest expense of $4.5 million. Rent expense is expected to decrease by $3.5 million annually as a net effect of reclassifying certain lease payments.

Yes, Dollar Tree has changed its fiscal year from a calendar year to a retail fiscal year ending on the Saturday closest to January 31. Fiscal Year 2002 concluded on February 1, 2003.