1、2010 Annual ReportRUNNING ON ALL CYLINDERSPLANNING.EXECUTION.RESULTS.?Tractor Supply Company is the largest operator of retail farm and ranch stores in the United States.At December 25,2010,Tractor Supply Company operated 1,001 stores in 44 states and an e-commerce website at TractorS.We are a growt
2、h company,and our research indicates we have an opportunity to grow to 1,800 domestic Tractor Supply Company store locations.?Our focus is on supplying the lifestyle needs of recreational farmers and ranchers and serving the maintenance needs of those who enjoy the rural lifestyle as well as tradesm
3、en and small businesses.Tractor Supply Company customers are home,land,and pet owners that are likely to have above average incomes with below average costs of living.?Our stores are located in towns outlying major metropolitan markets and in rural communities.Our store format has an average store s
4、ize of 16,600 square feet inside and 18,000 square feet of outside selling space.By opening 74 stores in 2010,we surpassed the 1,000 store milestone.We expect to open 80 to 85 stores in 2011 and continue to believe that we are well-positioned to reach our long-term target of 1,800 stores.Our six dis
5、tribution centers have serviced our existing store base very well and we recently broke ground on a new distribution center in Franklin,Kentucky to support our expanding footprint.When we open this facility in the fourth quarter of 2011,it will be our largest distribution center.?As we are serving a
6、 very specific niche,we offer a comprehensive,yet tailored,assortment of products:Equine,pet and small animal products,including items necessary for their health,care,growth and containment Hardware,truck,towing and tool products Seasonal products,including lawn and garden items,power equipment,gift
7、s and toys Maintenance products for agricultural and rural use Work/recreational clothing and footwear?$2,3700607$2,70308$3,00809$3,20710$3,638$1.150607$1.2408$1.4409$1.6310$2.25?2010 marked another year of record growth for Tractor Supply Company as we began the new decade with great momentum.We in
8、creased our revenue nearly 14 percent to$3.64 billion and grew net income 40 percent to$168.0 million,or$2.25 per diluted share1.These results reflect a 7 percent same-store sales increase,store growth of approximately 8 percent,gross margin expansion and SG&A leverage.?!?#?$?Tractor Supply Company
9、is the largest operator of retail farm and ranch stores in the United States.Much of our success is because we have followed the road map provided by our Retail Engine pictured above.Our company works under an overarching commitment to Values,Ethics,Trust,Risk Taking,Collaboration,Hard Work and Pass
10、ion.This is who we are,what we do and how we do it.?%?The first of the four flywheels is Team Member Loyalty.We hire hard and we hire great people.We want to teach and develop our team,acknowledge them for the things they do well and retain them over a long period so that everyone learns more.Our ma
11、nager turnover and hourly team member turnover were at record lows in 2010.Our teams foresight,experience and cross-functional collaboration have enabled us to plan effectively and to execute efficiently.THE RETAIL ENGINECulture of:Values|Ethics|Trust|Risk Taking|Collaboration|Hard Work|PassionLow C
12、ost|EfficiencySalesProfitSuccessRetentionLearningRecognitionTeam MemberLoyaltyPremiumRepeatReferShare of SpendCustomerLoyaltyDifferentiationSpeed to MarketLower Total CostsVendorLoyaltyLong Term ViewDown Quarter SupportCompounding Value CreationShareholderLoyalty 1All references to per-share amounts
13、 reflect a two-for-one stock split that was effective on September 2,2010.Copyright 2004 Tractor Supply Co.of Texas,LP.?%?We believe in developing Loyal Customers because we know that truly loyal customers become more valuable to us over time,and this is the focus of our second flywheel.These custom
14、ers shop our stores more frequently,they refer their friends and relatives more often and they buy our private label products more consistently because they trust our brands.We are passionate about supporting the rural lifestyle.We have a deep understanding of our customers needs and we continue to
15、refine our products and stores accordingly.As a result,Tractor Supply Company has become a meaningful part of their everyday lives.The Customer Flywheel is spinning,and our customer loyalty scores are high and growing.Throughout the recession,we leveraged our knowledge and anticipated that our custo
16、mers would continue to shop on a needs-and value-driven basis.However,we knew that their focus on high-quality merchandise would remain unchanged.We increased our commitment to core consumable,usable and edible(C.U.E.)products,which are the basic items our customers use most frequently.In 2010,C.U.E
17、.merchandise continued to be a key sales driver and traffic generator.In particular,we increased sales of national brand large animal feeds and launched a new private pet food brand,4health.Our multi-year strategy to grow the animal and pet business continued to produce results in 2010.This category
18、 represented 39 percent of our 2010 sales compared to 33 percent in 2007.At the same time,we have continued our highly disciplined approach to our marketing program.We once again improved the efficiency of our print and direct marketing programs.Through enhanced customer relationship management(CRM)
19、and customer segmentation,we continue to develop our capability to market to the right household with the right product and promotion.These marketing enhancements contributed to the increase in our transaction count in 2010 and our increase in gross margin dollars net of advertising spend.&?%?We als
20、o believe in Vendor Loyalty.Loyal vendors develop a relationship that is profitable for both the vendor and Tractor Supply Company.Through long-term partnerships,loyal vendors deliver high-quality goods at low costs.67606077640885509930101,001?We recognize the importance of anticipating our customer
21、s interests and we work with our vendors to ensure we are offering the right products at the right time in the right location.Our inventory management and execution is simply the best that it has ever been.We reduced the dependency on certain big-ticket,more discretionary products and expanded our f
22、ocus to the top 300 SKUs within the top 30 categories in 2010.We maintained solid in-stock positions throughout 2010,entered each season very well-stocked,managed our markdown cadence effectively,and exited seasons cleanly.We also achieved record inventory turnover of 3.1 times compared to 2.9 times
23、 in 2009the first time in the Companys history that we exceeded three turns.%?$?!?We believe that the foundation of our successes is Low Cost and Efficiency.Our commitment to this foundation supports everything we do.The Tractor Value System,which is our continuous improvement program,is now an inte
24、gral part of our culture and our team members have become relentless about eliminating waste and reducing cost.In 2010,we once again made progress on our goals to operate as a lean,efficient organization as we achieved great outcomes while applying the minimum steps and capital to get the job done.D
25、uring 2010,we also benefited from technology enhancements as we completed rolling out our point-of-sale system and upgrading our enterprise resource planning system.We have begun to move forward on our price optimization program with a more systemic approach,and we expect to benefit from this implem
26、entation in the second half of 2011.We are also adding automation to our distribution network with a warehouse management system and conveyors to help drive further efficiencies.?%?All of these accomplishments helped us to generate broad-based strength across the business and drive share-holder valu
27、e.Our final flywheel is Shareholder Loyalty.We want to have shareholders who take a long-term view,who are patient and allow our strategies to become fully implemented to produce great and sustainable results over time.In turn,we believe this enables us to deliver the best long-term shareholder valu
28、e.In 2010,we initiated a quarterly cash dividend program and continued our share repurchasing program.These actions in addition to our September 2010 2-for-1 stock split have benefited our shareholders and increased the attractiveness of our stock to a broader range of investors.?$?Our track record
29、of success and relentless dissatisfaction with the status quo has provided us with confidence that we will continue to achieve exceptional results and deliver shareholder value.Throughout the past several years,we have bene fited from our Retail Engine and we believe that the consistency of our resu
30、lts reinforce that our performance is sustainable.We have used a balanced approach to grow and improve our business.This strategy has produced compounded annual growth rates of 17%for sales and 26%for earnings over the past 10 years.At the same time,we intend to leverage the strength of our balance
31、sheet to continue investing in the business and returning value to shareholders.Tractor Supply Company would not be the outstanding company that it is today without the loyal support of our team members,customers,vendors and shareholders.We appreciate the relationships we have built with all of our
32、stakeholders and the powerful Retail Engine that we have created together.Our company is running on all cylinders.We have a lot to celebrate and even more to achieve as we look forward to 2011 and the years ahead.($in millions,except per share and store count data)20062007200820092010Sales2,369.62,7
33、03.23,007.93,206.93,638.3Income Before Taxes151.4160.2176.2189.9264.9Net Income94.799.5108.0119.7168.0Net Income Per Share(basic)$1.18$1.27$1.47$1.66$2.31Net Income Per Share(diluted)$1.15$1.24$1.44$1.63$2.25Number of Stores6767648559301,001?(?Jim WrightChairman and Chief Executive Officer March 201
34、1UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON,D.C.20549 FORM 10-K(Mark One)?ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 25,2010 or?TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT
35、 OF 1934 For the transition period from _ to _.Commission file number 000-23314TRACTOR SUPPLY COMPANY(Exact name of registrant as specified in its charter)Delaware 13-3139732(State or Other Jurisdiction of (I.R.S.Employer Identification No.)Incorporation or Organization)200 Powell Place,Brentwood,Te
36、nnessee 37027(Address of Principal Executive Offices)(Zip Code)Registrants Telephone Number,Including Area Code:(615)440-4000 Securities Registered Pursuant to Section 12(b)of the Act:Title of each class Name of each exchange on which registered Common Stock,$.008 par value NASDAQ Global Select Mark
37、et Securities Registered Pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.YES?NO?Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15
38、(d)of the Act.YES?NO?Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange 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
39、subject to such filing requirements for the past 90 days.YES?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 thi
40、s chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files).YES?NO?Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not be contained,to the best of
41、 registrant s knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.?Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller repor
42、ting company.See the definitions of“large accelerated file,”“accelerated filer”and“smaller reporting company”in Rule12b-2 of the Exchange Act:Large accelerated filer?Accelerated filer?Non-accelerated filer?(Do not check if a smaller reporting company)Smaller reporting company?Indicate by check mark
43、whether the registrant is a shell company(as defined in Rule 12b-2 of the Act.)YES?NO?The aggregate market value of the Common Stock held by non-affiliates of the registrant,based on the closing price of the Common Stock on The NASDAQ Global Select Market on June 25,2010,the last business day of the
44、 registrant s most recently completed second fiscal quarter,was$2,037,338,136.For purposes of this response,the registrant has assumed that its directors,executive officers,and beneficial owners of 5%or more of its Common Stock are the affiliates of the registrant.Indicate the number of shares outst
45、anding of each of the registrant s classes of common stock as of the latest practicable date.Class Outstanding at January 22,2011 Common Stock,$.008 par value 72,805,868 Documents Incorporated by Reference:Portions of the Registrant s definitive Proxy Statement for its 2011 Annual Meeting of Shareho
46、lders are incorporated by reference into Part III hereof.iTRACTOR SUPPLY COMPANY INDEX Form 10-K Report Item no.PageForward-Looking Statements ii PART I1 1.Business 1 1A.Risk Factors 7 1B.Unresolved Staff Comments 11 2.Properties 11 3.Legal Proceedings 12 4.Removed and Reserved 12 PART II 13 5.Marke
47、t for Registrant s Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 13 6.Selected Financial Data 16 7.Management s Discussion and Analysis of Financial Condition and Results of Operations 18 7A.Quantitative and Qualitative Disclosures About Market Risk 32 8.Financi
48、al Statements and Supplementary Data 33 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 55 9A.Controls and Procedures 55 9B.Other Information 56 PART III 57 10.Directors,Executive Officers and Corporate Governance 57 11.Executive Compensation 57 12.Security Own
49、ership of Certain Beneficial Owners and Management and Related Stockholder Matters 57 13.Certain Relationships and Related Transactions,and Director Independence 58 14.Principal Accountant Fees and Services 58 PART IV 58 15.Exhibits,Financial Statement Schedules 58 ii FORWARD-LOOKING STATEMENTS OR I
50、NFORMATION This Form 10-K and statements included or incorporated by reference in this Form 10-K include certain historical and forward-looking information.The forward-looking statements included are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995(
51、the“Act”).All statements,other than statements of historical facts,which address activities,events or developments that we expect or anticipate will or may occur in the future,including such things as future capital expenditures(including their amount and nature),business strategy,expansion and grow
52、th of the business operations and other such matters are forward-looking statements.To take advantage of the safe harbor provided by the Act,we are identifying certain factors that could cause actual results to differ materially from those expressed in any forward-looking statements,whether oral or
53、written.These factors include,without limitation,general economic conditions affecting consumer spending,the timing and acceptance of new products in the stores,the mix of goods sold,purchase price volatility(including inflationary and deflationary pressures),the ability to increase sales at existin
54、g stores,the ability to manage growth and identify suitable locations and negotiate favorable lease agreements on new and relocated stores,the ability to manage expenses,the availability of favorable credit sources,capital market conditions in general,failure to open new stores in the manner current
55、ly contemplated,the impact of new stores on our business,competition,weather conditions,the seasonal nature of our business,effective merchandising initiatives and marketing emphasis,the ability to retain vendors,reliance on foreign suppliers,the ability to attract,train and retain qualified employe
56、es,product liability and other claims,on-going and potential legal or regulatory proceedings,management of our information systems,effective tax rate changes and results of examination by taxing authorities,the ability to maintain an effective system of internal control over financial reporting and
57、those described in Item 1A.“Risk Factors.”Forward-looking statements are based on currently available information and are based on our current expectations and projections about future events.We undertake no obligation to release publicly any revisions to these forward-looking statements to reflect
58、events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.1PART IItem 1.BusinessOverviewTractor Supply Company is the largest operator of retail farm and ranch stores in the United States and is focused on supplying the lifestyle needs of recreational farmers
59、 and ranchers and those who enjoy the rural lifestyle,as well as tradesmen and small businesses.We operate retail stores under the names Tractor Supply Company and Dels Farm Supply and operate a website under the name TractorS.Our stores are located in towns outlying major metropolitan markets and i
60、n rural communities,and they offer the following comprehensive selection of merchandise:Equine,pet and small animal products,including items necessary for their health,care,growth and containment;Hardware,truck,towing and tool products;Seasonal products,including lawn and garden items,power equipmen
61、t,gifts and toys;Maintenance products for agricultural and rural use;and Work/recreational clothing and footwear.Our Tractor Supply stores typically range in size from 15,500 to 18,500 square feet of inside selling space and additional outside selling space.We use a standard 15,500 square foot proto
62、type for most new purpose-built locations.For new stores located in existing buildings,one of several layout formats is utilized.Our wholly-owned subsidiary,Del s Farm Supply,LLC(“Del s”),operated 26 stores as of December 25,2010 in Washington,Oregon,Idaho and Hawaii.Del s stores currently range in
63、size from approximately 2,000 to 6,000 square feet of inside selling space plus additional outside and covered/sheltered selling space.Tractor Supply Company has one reportable industry segment farm and ranch retail sales,both at our retail locations and online.At December 25,2010,we operated 1,001
64、retail farm and ranch stores in 44 states.Seasonality and Weather Our business is highly seasonal.Historically,our sales and profits have been the highest in the second and fourth fiscal quarters due to the sale of seasonal products.Unseasonable weather,excessive precipitation,drought,and early or l
65、ate frosts may also affect our sales.We believe,however,that the impact of extreme weather conditions is somewhat mitigated by the geographic dispersion of our stores.We experience our highest inventory and accounts payable balances during the first fiscal quarter for purchases of seasonal products
66、in anticipation of the spring selling season and again during the third fiscal quarter in anticipation of the winter selling season.Business Strategy We believe our sales and earnings growth is a result of executing our business strategy,which includes the following key components:Market Niche We ha
67、ve identified a specialized market niche:supplying the lifestyle needs of recreational farmers and ranchers and those who enjoy the rural lifestyle(which we refer to as the“Out Here”lifestyle),as well as tradesmen and small businesses.By focusing our product mix on these core customers,we believe we
68、 are differentiated from general merchandise,home center and other specialty retailers.2Customer Service We are committed to providing our customers a high level of in-store service through our motivated,well-trained store team members.We believe the ability of our store team members to provide frie
69、ndly,responsive and seasoned advice helps to promote strong customer loyalty and repeat shopping.As such,we seek to provide our store team members with decision-making authority,product knowledge and training to enable them to meet our customers needs.We endeavor to staff our stores with courteous,h
70、ighly motivated team members and devote considerable resources to training store team members,often in cooperation with our vendors.Our training programs include(i)a full management training program which covers all aspects of our operations,(ii)product knowledge modules produced in conjunction with
71、 key vendors,(iii)frequent management skills training classes,(iv)semi-annual store manager meetings with vendor product presentations,(v)vendor sponsored in-store training programs and(vi)ongoing product information updates from our management headquarters,the Store Support Center.We seek to hire a
72、nd train store team members with farming and ranching backgrounds,with particular emphasis on general maintenance,equine and welding.Our online shopping site is TractorS.The availability of certain of our products online provides our customers the ability to purchase products and have them shipped t
73、o one of our retail stores,their homes or offices.We believe this capability further enhances customer service and extends our market to areas where our retail stores are not currently located.We offer proprietary,private label credit cards for individuals and business customers.In addition,we accep
74、t cash,checks,debit cards,Visa,MasterCard,American Express and Discover credit cards and gift cards.Store Environment Our stores are designed and managed to make shopping an enjoyable experience and to maximize sales and operating efficiencies.Stores utilize several layouts,designed to provide an op
75、en environment,optimal product placement and visual display locations.In addition,these layouts allow for departmental space to be easily reallocated and visual displays to be easily changed for seasonal products and promotions.Display and product placement information is sent to stores weekly to en
76、sure quality and uniformity among the stores.Informative signs are located throughout each store to assist customers with purchasing decisions and merchandise location.These signs provide customers with a comparison of product qualities,clear pricing and useful information regarding product benefits
77、 and suggestions for appropriate accessories.The general uniformity of our store layouts and visual displays afford our customers a feeling of familiarity and enhances the shopping experience.To further enhance the shopping experience,all of our store team members wear highly visible red vests,apron
78、s or smocks and nametags,and our customer service and checkout counters are conveniently located.MerchandisingWe offer a differentiated assortment of products for our customers.Our broad product assortment is tailored to meet the regional and geographic needs of our markets,as well as the physical s
79、tore size.Our full line of product offerings is supported by a strong in-stock inventory position with an average of 15,500 to 19,000 unique products per store.No one product accounted for more than 10%of our sales during 2010.Our stores carry a wide selection of high quality,nationally recognized,n
80、ame brand merchandise.We also market a growing list of products under our“private-label programs,”i.e.products manufactured for us by a number of vendors.The trademarks in the private label brand names are owned by us.Our private label brands include:Producers Pride and Dumor(livestock feed)Retrieve
81、r,Paws n Claws,and 4health(pet foods)Huskee(outdoor power equipment)C.E.Schmidt(apparel and footwear)3Countyline(livestock,farm and ranch equipment)Royal Wing(bird feeding supplies)Traveller(truck/automotive products)Masterhand and JobSmart(tools and tool chests)Groundwork(lawn and garden supplies)B
82、it&Bridle(apparel)Red Shed(gifts and collectibles)We believe that the availability of high quality private label products at compelling prices provides superior value for our customers,a strategic advantage for us,and positions us as a destination store.The following chart indicates the average perc
83、entages of sales represented by each of our major product categories during fiscal 2010,2009 and 2008.Percent of SalesProduct Category 20102009(a)2008(a)Livestock and Pet 39%39%37%Hardware,Tools and Truck 23 23 24 Seasonal,Gift and Toy Products 22 22 23 Clothing and Footwear 10 10 9 Agriculture 6 6
84、7 100%100%100%(a)Reclassified to conform to current year presentation.Purchasing We offer a differentiated assortment of products that are sourced through domestic and international vendors for those seeking to enjoy the“Out Here”lifestyle.Our business is not dependent upon any one vendor or particu
85、lar group of vendors.We purchase our products from a core group of approximately 700 vendors,with no one vendor representing more than 10%of our purchases during fiscal 2010.Approximately 250 vendors accounted for approximately 90%of our purchases during fiscal 2010.We have not experienced any signi
86、ficant difficulty in obtaining satisfactory alternative sources of supply for our products,and we believe that adequate sources of supply exist at substantially similar costs for nearly all of our products.We have no material long-term contractual commitments with any of our vendors.We maintain a de
87、dicated inventory management team to focus exclusively on all forecasting and replenishment functions.This centralized direction permits our buying teams to focus more strategic attention toward vendor line reviews,assortment planning and testing of new products and programs.Through the combined eff
88、orts of these teams,we have improved our overall inventory productivity and in-stock position.Over 98%of our purchase orders are transmitted through an electronic data interchange(EDI)system,and approximately 95%of merchandise vendor invoices are transmitted through EDI.We are expanding the percenta
89、ge of vendors who electronically transmit invoices and increasing the amount of sales history transmitted.DistributionWe currently operate a distribution network for supplying our stores with merchandise,and in fiscal 2010 our stores received approximately 67%of our merchandise through this network.
90、Our six distribution centers are located in Indiana,Georgia,Maryland,Texas,Nebraska,and Washington,representing total distribution capacity of 2.9 million square feet.In 2011 we have begun construction on our seventh distribution center,a new 834,000 square foot facility in Kentucky to be operationa
91、l during the fourth quarter of fiscal 2011.4We manage our inbound and outbound transportation activity in-house through the use of a web-based transportation management system.We utilize several common carriers for store deliveries.We manage our transportation costs through carrier negotiations,the
92、monitoring of transportation routes,and the scheduling of deliveries.MarketingWe utilize an everyday value prices strategy to consistently offer our products at competitive prices complemented by promotions primarily implemented during peak selling seasons.We regularly monitor prices at competing st
93、ores and adjust our prices as appropriate.To generate store traffic and position ourselves as a destination store,we promote broad selections of merchandise with newspaper circulars,customer targeted direct mail and internet offerings.Vendors frequently support these specific programs by offering te
94、mporary cost reductions,honoring coupons and funding gift card rebate programs.Due to the relatively small size of our stores,increased traffic in the store ensures increased exposure to our products.Our vendors are committed to helping us promote our brand and position ourselves as a destination st
95、ore.Our vendors provide assistance with product presentation and rack design,brochures,point-of-purchase materials for customers education and product education for our team members.We also receive funding through contributions and incentives on purchases to promote new stores and earn rebates from
96、vendors on product purchases based on volume.CompetitionWe operate in a competitive retail industry.The principal competitive factors include location of stores,price and quality of merchandise,in-stock consistency,merchandise assortment and presentation,and customer service.We compete with general
97、merchandise retailers,home center retailers and other specialty and discount retailers,as well as independently owned retail farm and ranch stores,numerous privately-held regional farm store chains and farm cooperatives.Some of these competitors are units of national or regional chains and may have
98、substantially greater resources and financial capacities than we do.However,we believe we have successfully differentiated ourselves from these entities by focusing on our specialized market niche for customers living the rural lifestyle.Management and Team MembersAs of December 25,2010,we employed
99、approximately 7,900 full-time and approximately 6,800 part-time team members.We also employ additional part-time team members during peak periods.We are not party to any collective bargaining agreements.Our store operations are organized into nine regions,including Del s.Each region is led by a regi
100、onal manager and the region is further organized into districts,which are led by a district manager or area manager.Our regional managers,district managers,area managers,store managers and other distribution and support personnel have contributed significantly to our performance.We have internal adv
101、isory boards,one comprised of store managers and the other comprised of district managers.These groups bring a grassroots perspective to operational initiatives and generate chain-wide endorsement of proposed“best-practice”solutions.We are committed to a continuous improvement program called Tractor
102、 Value System(“TVS”).TVS is a business management system that emphasizes,through team member engagement,a focus on continuous improvement.Utilizing the TVS system,we improve processes by embracing change of current practices to reduce cost,shorten lead times,and drive innovation.We have implemented
103、numerous continuous improvement project teams(comprised of team members from all areas of our operations)to evaluate key operations and implement process changes that will improve efficiency,reduce costs and strengthen processes.Our management encourages the participation of all team members in deci
104、sion-making,regularly solicits input and suggestions from our team members and incorporates suggestions into our improvement activities.5All of our team members participate in one of various incentive programs,which provide the opportunity to receive additional compensation based upon team and/or Co
105、mpany performance.We also provide our team members the opportunity to participate in an employee stock purchase plan and a 401(k)retirement savings plan(we contribute to the 401(k)savings plan solely through a cash match).Additionally,we share in the cost of health insurance provided to our team mem
106、bers,and team members receive a discount on merchandise purchased at our stores.We encourage a“promote from within”environment when internal resources permit.We also provide internal leadership development programs designed to mentor our high potential team members for continued progress and believe
107、 we have satisfactory relationships with our team members.Our district managers,area managers,and store managers have an average length of service of approximately five years.Management believes internal promotions,coupled with the hiring of individuals with previous retail experience,will provide t
108、he management structure necessary to support our planned store growth.Management Information and Control Systems We have invested considerable resources in our management information and control systems to ensure superior customer service,manage the purchase and distribution of our merchandise and i
109、mprove our operating efficiencies.Our management information and control systems include a point-of-sale system,a supply chain management and replenishment system,a radio frequency and voice picking system in the distribution centers,a vendor purchase order control system and a merchandise presentat
110、ion system.These systems are integrated through an enterprise resource planning(“ERP”)system.This ERP system tracks merchandise from initial order through ultimate sale and interfaces with our financial systems.We continue to evaluate and improve the functionality of our systems to maximize their ef
111、fectiveness.Such efforts include ongoing hardware and software evaluations and upgrades to support optimal software configurations and application performance.We plan to upgrade our information technology and implement other efficiency-driving system enhancements(including the rollout of a new wareh
112、ouse management system to distribution centers,implementation of price optimization software,point-of-sale system upgrades,and store and support center hardware refreshes)in 2011.In addition,we will continue to strengthen the security of our information systems and support the areas of store and dis
113、tribution center expansion.These efforts are directed toward constantly improving the overall business processes and achieving the most efficient and effective use of the systems to manage our operations while ensuring a secure and reliable environment.Growth Strategy Our current and long-term growt
114、h strategy is to:(1)expand geographic market presence through opening new retail stores,(2)enhance financial performance through same-store sales increases,achieved through targeted merchandising programs with an“everyday value prices”philosophy and supported by strong customer service,(3)enhance pr
115、oduct margin through assortment management,vendor management,global sourcing,and optimization of transportation and distribution costs,(4)leverage operating costs,especially advertising,distribution and corporate overhead,(5)expand market opportunities via internet sales,and(6)expand through selecti
116、ve acquisition,as such opportunities arise,to enhance penetration into new and existing markets as a complementary strategy to organic growth.We have experienced considerable sales growth over the past five years,with a compounded annual growth rate of approximately 12.0%.We project an increase of 8
117、0 to 85 new stores in 2011,an increase of approximately 8%.We opened 74 new stores in 2010 and 76 new stores in 2009,an increase of approximately 8%and 9%,respectively.We operated 1,001 retail farm and ranch stores in 44 states as of December 25,2010.We have developed a proven method for selecting s
118、tore sites and have identified over 800 potential additional markets for new Tractor Supply stores in the United States.6Executive Officers of the Registrant Pursuant to General Instruction G(3)of Form 10-K,the following list is included as an unnumbered item in Part I of this Report in lieu of bein
119、g included in the Proxy Statement for the Annual Meeting of Stockholders to be held on April 28,2011.The following is a list of the names and ages of all executive officers of the registrant,indicating all positions and officeswith the registrant held by each such person and each person s principal
120、occupations and employment during at least the past five years:Name Position AgeJames F.Wright Chairman of the Board and Chief Executive Officer 61 Gregory A.Sandfort President and Chief Merchandising Officer 55 Stanley L.Ruta Executive Vice President and Chief Operating Officer 59 Anthony F.Crudele
121、 Executive Vice President-Chief Financial Officer and Treasurer 54 Kimberly D.Vella Senior Vice President and Chief People Officer 44 _ James F.Wright has served as Chairman of the Board and Chief Executive Officer of the Company since February 2009,and prior to that time served as Chairman of the B
122、oard,President and Chief Executive Officer from November 2007 to February 2009,and as President and Chief Executive Officer of the Company from October 2004 to November 2007.Mr.Wright previously served as President and Chief Operating Officer of the Company from October 2000 to October 2004.Mr.Wrigh
123、t has served as a director of the Company since 2002.Gregory A.Sandfort has served as President and Chief Merchandising Officer of the Company since February 2009,and prior to that time served as Executive Vice President-Chief Merchandising Officer of the Company since November 2007.Mr.Sandfort prev
124、iously served as President and Chief Operating Officer at Michaels Stores,Inc.from March 2006 to August 2007 and as Vice President General Merchandise Manager at Michaels Stores,Inc.from January 2004 to February 2006.Mr.Sandfort served as Vice Chairman and Co-Chief Executive Officer of Kleinert s In
125、c.(d/b/a Buster Brown)from 2002 to 2003 and as a Vice President,General Merchandise Manager for Sears,Roebuck and Co.from 1998 to 2002.Stanley L.Ruta has served as Executive Vice President and Chief Operating Officer of the Company since February 2009,and prior to that time served as Executive Vice
126、President-Store Operations since January 2007,after having served as Senior Vice President-Store Operations since June 2000 and as Vice President-Store Operations of the Company since 1994.Anthony F.Crudele has served as Executive Vice President-Chief Financial Officer and Treasurer since January 20
127、07,after having served as Senior Vice President-Chief Financial Officer and Treasurer of the Company since November 2005.Mr.Crudele previously served as Chief Financial Officer at Gibson Guitar from August 2003 to September 2005,as Chief Financial Officer of Xcelerate Corp.from 2000 to January 2003,
128、and at The Sports Authority from 1989 through 1999(serving as Chief Financial Officer from 1996 through 1999).Kimberly D.Vella has served as Senior Vice President and Chief People Officer since July 2010,and prior to that time served as Senior Vice President-Human Resources of the Company since Janu
129、ary 2007,after having served as Vice President-Human Resources of the Company since October 2001.Additional Information We file reports with the Securities and Exchange Commission(“SEC”),including Annual Reports on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K and other report
130、s as required.The public may read and copy any materials the Company files with the SEC at the SEC s Public Reference Room at 100 F Street,NE,Washington,DC 20549.The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.We are an electronic
131、filer and the SEC maintains an Internet site at sec.gov that contains the reports,proxy and information statements,and other information filed electronically.7We make available free of charge through our Internet website,TractorS,our Annual Report on Form 10-K,quarterly reports on Form 10-Q,current
132、reports on Form 8-K,and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.The information provided on our website is not part of this report,and is therefore not incorporated by reference unless such information
133、 is otherwise specifically referenced elsewhere in this report.Our code of ethics,which is applicable to all of our team members,including our Chief Executive Officer,Chief Financial Officer and Controller,along with our Corporate Governance Guidelines and the charters of our Audit,Compensation,Nomi
134、nating and Corporate Governance Committees of our Board of Directors,is posted on our website.Item 1A.Risk FactorsOur business faces many risks.Those risks which we are currently aware and we deem to be material are described below.If any of the events or circumstances described in the following ris
135、k factors occur,our business,financial condition or results of operations may significantly suffer,and the trading price of our common stock could decline.These risk factors should be read in conjunction with the other information in this Form 10-K.General economic conditions may adversely affect ou
136、r financial performance.Our results of operations may be sensitive to changes in overall economic conditions that impact consumer spending,including discretionary spending.Economic conditions affecting disposable consumer income such as employment levels,business conditions,interest rates,tax rates,
137、fuel and energy costs,higher labor and healthcare costs,the impact ofnatural disasters or acts of terrorism,and other matters could reduce consumer spending or cause consumers to shift their spending to lower-priced competitors.A general reduction in the level of discretionary spending or shifts in
138、consumer discretionary spending to our competitors could adversely affect our growth and profitability.Additionally,changes in the mix of products sold to a mix with a lower overall gross margin or other increased cost of sales,along with slower inventory turnover and greater markdowns on inventory,
139、could adversely affect our operations and operating results.Purchase price volatility,including inflationary and deflationary pressures,may adversely affect our financial performance.Although we cannot determine the full effect of inflation and deflation on our operations,we believe our sales and re
140、sults of operations are affected by both.We are subject to market risk with respect to the pricing of certain products and services,which include,among other items,steel,grain,petroleum,corn,soybean and other commodities as well as transportation services.Therefore,we may experience both inflationar
141、y and deflationary pressure on product cost,which may impact consumer demand and,as a result,sales and gross margin.Our strategy is to reduce or mitigate the effects of purchase price volatility principally by taking advantage of vendor incentive programs,economies of scale from increased volume of
142、purchases,adjusting retail prices and selectively buying from the most competitive vendors without sacrificing quality.Due to the competitive environment,such conditions have and may continue to adversely impact our financial performance.There is no assurance that we will be able to continue to incr
143、ease sales at our existing stores.We experience fluctuations in our same-store sales,which are defined as stores which have completed twelve months of sales.Our success depends,in part,upon our ability to improve sales at our existing stores.Various factors affect same-store sales,including the gene
144、ral retail sales environment,our ability to efficiently source and distribute products,changes in our merchandise mix,competition,current economic conditions,the timing of release of new merchandise and promotional events,the success of marketing programs and weather conditions.These factors may cau
145、se our same-store sales results to differ materially from prior periods and from expectations.Past same-store sales are not necessarily an indication of future results,and there can be no assurance that our same-store sales will not decrease in the future.Our failure to effectively manage growth cou
146、ld impair our business.Even if we are able to implement,to a significant degree,our key business strategy of expanding our store base,we may experience managerial or operational problems,which may prevent any expected increase in profitability or negatively impact our cash flow.To manage our planned
147、 expansion,we must ensure the continuing adequacy of our existing systems,controls and procedures,including product distribution facilities,store management,financial controls and information systems.There can be no assurance that we will be able to achieve our planned expansion,that the new stores
148、will be effectively integrated into our existing operations or that such stores will be profitable.8Capital requirements for growth may not be available.The construction and opening or acquisition of new stores and the development of new production and distribution facilities,along with the remodeli
149、ng and renovation of existing stores,require significant amounts of capital.In the past,our growth has been funded primarily through bank borrowings and internally generated cash flow.Disruptions in the capital and credit markets could adversely affect the ability of the banks to meet their commitme
150、nts.Our access to funds under the credit facility is dependent on the ability of the banks that are parties to the facility to meettheir funding commitments.Those banks may not be able to meet their funding commitments to us if they experience shortages of capital and liquidity or if they experience
151、 excessive volumes of borrowing requests within a short period of time.In addition,tighter lending practices have made it more challenging for our real estate developers to obtain financing under reasonable loan terms and conditions.Unfavorable lending trends could impact the timing of our store ope
152、nings and materially adversely affect our ability to open new purpose-built stores in desirable locations.Longer term disruptions in the capital and credit markets as a result of uncertainty,changing or increased regulation,reduced alternatives,or failures of significant financial institutions could
153、 adversely affect our access to liquidity needed for our business.Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged.Such measures could include deferring capit
154、al expenditures,and reducing or eliminating future share repurchases or other discretionary uses of cash.Failure to open new stores in the manner currently contemplated could adversely affect our financial performance.An integral part of our business strategy includes the expansion of our base of st
155、ores by opening new stores.This expansion strategy is dependent on our ability to find suitable locations,and we face competition from many retailers for such sites.If we are unable to implement this strategy,our ability to increase our sales,profitability,and cash flow couldbe impaired significantl
156、y.To the extent that we are unable to open new stores in the manner we anticipate(due to,among other reasons,site approval or unforeseen delays in construction),our sales growth may be impeded.New stores may negatively impact our results.There can be no assurance that our new store openings will be
157、successful or result in greater sales and profitability for the Company.New stores build their sales volumes and refine their merchandise selection over time and,as a result,generally have lower gross margins and higher operating expenses as a percentage of sales than our more mature stores.As we co
158、ntinue to open new stores,there may be a negative impact on our results from a lower contribution margin of these new stores until their sales levels ramp to chain average,if at all,as well as from the impact of related pre-opening costs.Competition in our industry may hinder our ability to execute
159、our business strategy and adversely affect our operations.We operate in a very competitive market.The principal competitive factors include location of stores,price and quality of merchandise,in-stock consistency,merchandise assortment and presentation,and customer service.We believe we have success
160、fully differentiated ourselves from general merchandise retailers,home center retailers and other specialty and discount retailers by focusing on our specialized market niche.However,we do face competition from these entities,as well as competition from independently-owned retail farm and ranch stor
161、es,privately-held regional farm store chains and farm cooperatives.Some of our competitors are units of national or regional chains that have substantially greater financial and other resources.Weather conditions may have a significant impact on our financial results.Historically,weather conditions
162、have had a significant impact on our operating results.Weather conditions affect the demand for,and in some cases the supply of,products,which in turn has an impact on prices.In past years,we have experienced extreme weather conditions,including snow and ice storms,flood and wind damage,hurricanes,t
163、ornadoes and droughts in some states.Weather conditions also directly affect the demand for seasonal products,particularly during the winter heating season.Accordingly,the weather can have a material effect on our financial condition and results of operations.There are certain risks associated with
164、the seasonal nature of our business.Our working capital needs and borrowings(if necessary)generally peak in our first and third fiscal quarters because lower sales are generated while expenses are incurred and inventory is increased in preparation for the spring and winter selling seasons.If cash on
165、 hand and borrowings under existing credit facilities are insufficient to meet the seasonal needs or if cash flow generated during the spring and winter is insufficient to repay associated borrowings on a timely basis,this seasonality could have a material adverse effect on our business.9There is no
166、 assurance that our merchandising initiatives and marketing emphasis will provide expected results.We believe our past performance has been based on,and future success will depend upon,in part,the ability to develop and execute merchandising initiatives with effective marketing.There is no assurance
167、 that we will be successful,or that new initiatives will be executed in a timely manner to satisfy our customers needs or expectations.Failure to execute and promote such initiatives in a timely manner could harm our ability to grow the business and could have a material adverse effect on our result
168、s of operations and financial condition.Additionally,our success depends on our ability to anticipate and respond in a timely manner to changing customer demand and preferences for merchandise.If we misjudge the market,we may significantly overstock unpopular products and be forced to take significa
169、nt inventory markdowns.Shortages of key items could also have a materially adverse impact on operating results.We face risks associated with vendors from whom our products are sourced.The products we sell are sourced from a variety of domestic and international vendors.As a general rule,we have agre
170、ements with our vendors in which the vendors agree to comply with applicable laws,including labor and environmental laws,and to indemnify us against certain liabilities and costs.Our ability to recover liabilities and costs under these vendor agreements is dependent upon the financial condition and
171、integrity of the vendors.We rely on foreign manufacturers for various products that we sell.In addition,many of our domestic suppliers purchase a portion of their products from foreign sources.We rely on long-term relationships with our suppliers but have no long-term contracts with such suppliers.O
172、ur future success will depend in large measure upon our ability to maintain our existing supplier relationships or to develop new ones.This reliance increases the risk of inadequate and untimely supplies of various products due to local political,economic,social,or environmental conditions,transport
173、ation delays,restrictive actions by foreign governments,or changes in United States laws and regulations affecting imports or domestic distribution.Our vendors may be forced to reduce their production,shut down their operations or file for bankruptcy protection,which in some cases would make it diff
174、icult for us to serve the market s needs and could have a material adverse effect on our business.As an importer,our business is subject to the risks generally associated with doing business abroad,such as foreign governmental regulations,economic disruptions,delays in shipments,transportation capac
175、ity and costs,currency exchange rates and changes in political or economic conditions in countries from which we purchase products.If any such factors were to render the conduct of business in particular countries undesirable or impractical or if additional United States quotas,duties,taxes or other
176、 charges or restrictions were imposed upon the importation of our products in the future,our financial condition and results of operations could be materially adversely affected.Our failure to attract and retain qualified team members could adversely affect our financial performance.Our ability to c
177、ontinue expanding operations depends on our ability to attract and retain a large and growing number of qualified team members.Our ability to meet labor needs while controlling wage and related labor costs is subject to numerous external factors,including the availability of a sufficient number of q
178、ualified persons in the work force,unemployment levels,prevailing wage rates,changing demographics,health and other insurance costs and changes in employment legislation.If we are unable to locate,attract or retain qualified personnel,or if costs of labor or related costs increase significantly,our
179、financial performance could be adversely affected.We may be subject to product liability and other claims in the ordinary course of business.Our business involves a risk of product liability and other claims in the ordinary course of business.We maintain general liability insurance with a deductible
180、 for each occurrence and a$36,000,000 aggregate retention applicable to all general liability and workers compensation claims.We also maintain umbrella limits above the primary general liability and product liability cover.In many cases,we have indemnification rights against the manufacturers of the
181、 products and their products liability insurance.Our ability to recover under such insurance or indemnification arrangements is subject to the financial viability of the insurers and manufacturers and the specific allegations of a claim.No assurance can be given that our insurance coverage or the ma
182、nufacturers indemnity will be available or sufficient in any claims brought against us.Our costs of doing business could increase as a result of changes in federal,state or local regulations.Changes in the federal,state or local minimum wage or living wage requirements or changes in other wage or wo
183、rkplace regulations could increase our costs of doing business.In addition,changes in federal,state or local regulations governing the sale of some of our products or tax regulations could increase our costs of doing business.10 Because we are subject to numerous laws and governmental regulations,we
184、 could incur substantial judgments,fines,legal fees and other costs.We are subject to numerous federal,state and local laws and governmental regulations relating to environmental protection,consumer product safety,building,land use and zoning requirements,workplace regulations,wage and hour,privacy
185、and information security and employment law matters.If we fail to comply with existing or future laws or regulations,or if these laws or regulations are violated by importers,manufacturers or distributers,we may be subject to governmental or judicial fines or sanctions,while incurring substantial le
186、gal fees and costs.In addition,our capital expenditures could increase due to remediation measures that may be required if we are found to be noncompliant with any existing or future laws or regulations.A privacy breach could result in negative publicity and adversely affect the Companys business.Th
187、e protection of customer,employee and company data is critical to the Company.The regulatory environment surrounding information security and privacy is increasingly demanding,with the frequent imposition of new and constantly changing requirements.In connection with credit card sales,we transmit co
188、nfidential credit card information.Third parties may have the technology or know-how to breach the security of this customer information,and our security measures and those of our technology vendors may not effectively preclude others from obtaining improper access to this information.Any security b
189、reach could expose us to risks of data loss,litigation and liability and could seriously disrupt our operations and any resulting negative publicity could significantly harm our reputation.In addition,states and the federal government are increasingly enacting laws and regulations to protect consume
190、rs against identity theft.We collect personal information from consumers in the course of doing business.These laws will likely increase the costs of doing business and,if we fail to comply with these laws and regulations or to implement appropriate safeguards or to detect and provide prompt notice
191、of unauthorized access as required by some of these new laws,we could be subject to potential claims for damages and other remedies,which could harm our business.Legal proceedings could materially impact our results.From time to time,we are party to legal proceedings including matters involving pers
192、onnel and employment issues,personal injury,intellectual property,and other proceedings arising in the ordinary course of business.Our results could be materially impacted by the decisions and expenses related to pending or future proceedings.If we experience difficulties with our management informa
193、tion systems,our financial performance may be adversely affected.We depend on management information systems for many aspects of our business.We could be materially adversely affected if our management information systems are disrupted or if we are unable to improve,upgrade,maintain and expand syste
194、ms,particularly in light of the contemplated continued store growth.Many of our information systems contain confidential customer,Company or employee data.If we fail to adequately restrict access to this information,our results of operations could be adversely affected.Effective tax rate changes and
195、 results of examinations by taxing authorities could materially impact our results.Our future effective tax rates could be adversely affected by the earnings mix being lower than historical results in states where we have lower statutory rates and higher than historical results in states where we ha
196、ve higher statutory rates,by changes in the measurement of our deferred tax assets and liabilities,or by changes in tax laws or interpretations thereof.In addition,we are subject to periodic audits and examinations by the Internal Revenue Service(IRS)and other state and local taxing authorities.A po
197、rtion of our sales are to tax-exempt customers.The business activities of our customers and the intended use of the unique products sold by us create a challenging and complex compliance environment.These circumstances create risk that we could be challenged as to the propriety of our sales tax comp
198、liance.Our results could be materially impacted by the determinations and expenses related to these and other proceedings by the IRS and other state and local taxing authorities.Failure to maintain an effective system of internal control over financial reporting could materially impact our business
199、and results.The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting.An internal control system,no matter how well designed and operated,can provide only reasonable,not absolute,assurance that the objectives of the control system are
200、met.Further,the design of a control system must reflect the fact that there are resource constraints,and the benefits of controls must be considered relative to their costs.Because of the inherent limitations in all internal control systems,internal control over financial reporting may not prevent o
201、r detect misstatements.Any failure to maintain an effective system of internal control over financial reporting could limit 11 our ability to report our financial results accurately and timely or to detect and prevent fraud,and could expose us to litigation or adversely affect the market price of ou
202、r common stock.Changes in accounting standards and subjective assumptions,estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition.Generally accepted accounting principles and related accounting pronouncements
203、,implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business,such as revenue recognition,asset impairment,inventories,lease obligations,self-insurance,tax matters and litigation,are highly complex and involve many subjective assumptions,esti
204、mates or judgments.Changes in these rules or their interpretation or changes in underlying assumptions,estimates or judgments could significantly change our reported or expected financial performance or financial condition.Item 1B.Unresolved Staff CommentsNone.Item 2.PropertiesAt December 25,2010,we
205、 operated 1,001 stores in 44 states.We lease more than 94%of our stores,two of our six distribution centers and our management headquarters.Store leases typically have initial terms of between 10 and 15 years,with two to four renewal periods of five years each,exercisable at our option.No single lea
206、se is material to our operations.Following is a count of our store locations by state:StateNumberof Stores StateNumber of StoresTexas 121 Wisconsin 15 Ohio 69 Kansas 12 Michigan 63 Nebraska 12 Pennsylvania 60 Maine 10 New York 58 Mississippi 10 Tennessee 57 New Hampshire 10 North Carolina 43 New Jer
207、sey 10 Georgia 40 Maryland 9 Indiana 38 Iowa 8 Kentucky 38 Minnesota 8 Florida 37 Connecticut 7 Virginia 33 North Dakota 7 Alabama 25 Massachusetts 6 Oklahoma 23 South Dakota 6 South Carolina 22 Vermont 5 Louisiana 21 Delaware 3 California 20 Hawaii 3 Washington 19 Oregon 3 West Virginia 18 Montana
208、2 Illinois 16 New Mexico 2 Arkansas 15 Idaho 1 Missouri 15 Rhode Island 1 1,00112 Item 3.Legal ProceedingsThe Company received and responded to a Request for Information from the United States Environmental Protection Agency(“EPA”)relating to certain recreational vehicles and non-road spark ignition
209、 engines sold by the Company.In the first quarter of fiscal 2011,the Environmental Enforcement Section of the Department of Justice(“DOJ”),on behalf of the EPA,informed the Company that it believed the Company had violated the Clean Air Act by importing or causing the importation of certain engines
210、not covered by certificates of conformity issued by the EPA,and that unless the DOJ and the Company were able to reach a settlement,the DOJ was prepared to commence a civil action.The Company is currently engaged in settlement discussions with the DOJ that would call for the payment of a civil penal
211、ty and certain injunctive relief.The engines were purchased by the Company pursuant to agreements with vendors under which the vendors represented that their products complied with all applicable laws and regulations and under which the vendors agreed to indemnify the Company for any liabilities or
212、costs relating to,among other matters,the noncompliance or alleged noncompliance of their products.The Company has notified these vendors of the EPA s position and expects to be reimbursed for any liabilities or costs relating to this matter.The Company does not expect the resolution of this matter
213、to have a material adverse effect on its financial condition or results of operations.We are also involved in various litigation matters arising in the ordinary course of business.We expect these matters will be resolved without material adverse effect on our consolidated financial position or resul
214、ts of operations.We believe that any estimated loss related to such matters has been adequately provided in accrued liabilities to the extent probable and reasonably estimable.It is possible,however,that future results of operations for any particular quarterly or annual period could be materially a
215、ffected by changes in circumstances relating to these proceedings.Item 4.Removed and Reserved13 PART IIItem 5.Market for Registrant s Common Equity,Related Stockholder Matters and Issuer Purchases of Equity SecuritiesTractor Supply Company s common stock trades on The Nasdaq Global Select Market und
216、er the symbol“TSCO”.The table below sets forth the high and low sales prices of our common stock as reported by The Nasdaq Global Select market for each fiscal quarter of the periods indicated:Price Range(split adjusted)2010 2009High Low High LowFirst Quarter$30.29$24.56$18.99$14.34 Second Quarter$3
217、5.93$28.91$21.86$17.09 Third Quarter$39.14$29.55$24.50$19.84 Fourth Quarter$48.79$38.35$27.25$22.17 As of January 31,2011,the approximate number of record holders of our common stock was 120(excluding individual participants in nominee security position listings),and the estimated number of benefici
218、al holders of our common stock was 37,000.Issuer Purchases of Equity Securities We have a Board-approved share repurchase program which provides for the repurchase of up to$400 million of common stock,exclusive of any fees,commissions,or other expenses related to such repurchases,through December 20
219、11.Stock repurchase activity during fiscal 2010 is set forth in the table below:PeriodTotal Number of Shares Purchased(a)Average Price Paid Per Share(a)Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Dollar Value of Shares That May Yet Be Purchased Under thePl
220、ans or ProgramsFirst Quarter(b)172,182$25.90 146,200$177,152,538 Second Quarter 298,622 33.13 298,622 167,264,053 Third Quarter 273,400 33.64 273,400 158,071,329 Fourth Quarter:9/26/10 10/23/10 -158,071,329 10/24/10 11/20/10(b)292,999 40.52 290,000 146,324,048 11/21/10 12/25/10 83,800 42.04 83,800 1
221、42,800,349 376,799 40.89 373,800 142,800,349 As of December 25,2010 1,121,003$34.75 1,092,022$142,800,349(a)The number of shares purchased and the average price paid per share shown in the table above have been adjusted to reflect the effect of a two-for-one stock split for all shares purchased prio
222、r to the stock split record date.Actual shares of 73,100,149,311,and 230,100 were added to treasury in the first,second and third quarters of fiscal 2010,respectively,as the number of shares held in treasury was not adjusted for the two-for-one stock split as stated in Note 1 Significant Accounting
223、Policies in Part II Item 8 of this Form 10-K.(b)We withheld 25,982(split adjusted)shares during the first quarter and 2,999 shares during the fourth quarter to satisfy employee tax obligations on the vesting of restricted stock units in the amounts of$0.7 million in the first quarter and$0.1 million
224、 in the fourth quarter at an average price of$25.30 and$42.00,respectively.For further discussion,see Note 2 Share-Based Compensation in Part II,Item 8 of this Form 10-K.We expect to implement the balance of the repurchase program through purchases made from time to time either in the open market or
225、 through private transactions,in accordance with regulations of the SEC.The timing and amount of any shares repurchased under the program will depend on a variety of factors,including price,corporate and regulatory requirements,capital availability,and other market conditions.14 Any additional share
226、 repurchase programs will be subject to the discretion of our Board of Directors and subject to our results of operations,financial condition,cash requirements and other factors deemed relevant by our Board of Directors.The program may be limited or terminated at any time without prior notice.Common
227、 Stock Dividends During 2010,the Board of Directors declared the following dividends:Date DeclaredDividend Amount Per Share(split adjusted)Stockholders of Record Date Date PaidMarch 1,2010$0.07 March 15,2010 March 29,2010 May 3,2010 0.07 May 17,2010 June 2,2010 July 29,2010 0.07 August 16,2010 Augus
228、t 31,2010 October 28,2010 0.07 November 15,2010 November 30,2010 It is the present intention of the Board of Directors to continue to pay this quarterly cash dividend;however,the declaration and payment of future dividends will be determined by the Board of Directors in its sole discretion and will
229、depend upon the earnings,financial condition,and capital needs of the Company and other factors which the Board of Directors deems relevant.There were no dividends declared during fiscal 2009.On February 4,2011,we announced that our Board of Directors declared a quarterly cash dividend of$0.07 per s
230、hare of the Company s common stock.The dividend will be paid on March 8,2011 to stockholders of record as of the close of business on February 22,2011.15 STOCK PERFORMANCE GRAPHThis performance graph shall not be deemed“filed”for purposes of Section 18 of the Securities Exchange Act of 1934,as amend
231、ed(the“Exchange Act”)or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Tractor Supply Company under the Securities Act of 1933,as amended,or the Exchange Act.The following graph compares the cumulative total stockhol
232、der return on our Common Stock from December 31,2005 to December 25,2010(the Companys fiscal year-end)with the cumulative total returns of the S&P 500 Index and the S&P Retail Index over the same period.The comparison assumes that$100 was invested on December 31,2005 in our Common Stock and in each
233、of the foregoing indices.The historical stock price performance shown on this graph is not necessarily indicative of future performance.507090110130150170190200520062007200820092010Tractor SupplyCompanyS&P 500S&P Retail12/31/05 12/30/06 12/29/07 12/27/08 12/26/09 12/25/10 Tractor Supply Company$100.
234、00$84.45$66.79$65.21$102.06$182.85 S&P 500$100.00$113.62$118.44$69.92$90.24$100.68 S&P Retail Index$100.00$109.36$89.85$59.45$91.47$112.13 16 Item 6.Selected Financial DataFIVE YEAR SELECTED FINANCIAL AND OPERATING HIGHLIGHTS The following selected financial data are derived from the consolidated fi
235、nancial statements of Tractor Supply Company.Our fiscal year includes 52 or 53 weeks and ends on the last Saturday of the calendar year.References to fiscal year mean the year in which that fiscal year ended.All fiscal years presented below consist of 52 weeks.Effective December 25,2010,the Company
236、elected to change its method of accounting for inventories from the lower of cost,as determined by the last-in,first-out(“LIFO”)method,or market to the lower of cost,as determined by average cost method,or market.The following table provides summary historical financial information adjusted for the
237、change in accounting for inventory for the periods ended and as of the dates indicated(in thousands,except per share amounts and selected operating data):20102009(a)2008(a)2007(a)2006(a)Operating Results:Net sales$3,638,336$3,206,937$3,007,949$2,703,212$2,369,612Gross margin 1,203,6651,041,889955,05
238、5 857,940 752,237Selling,general and administrative expenses 867,644784,066715,961 641,603 555,834Depreciation and amortization 69,79766,25860,731 51,064 42,292Operating income 266,224191,565178,363 165,273 154,111Interest expense,net 1,2841,6442,133 5,037 2,688Income before income taxes 264,940189,
239、921176,230 160,236 151,423Income tax provision 96,96870,17668,237 60,777 56,677Net income$167,972$119,745$107,993$99,459$94,746Net income per share basic(b)(c)$2.31$1.66$1.47$1.27$1.18Net income per share assuming dilution(b)(c)$2.25$1.63$1.44$1.24$1.15Adjusted weighted average shares for dilutive e
240、arnings per share(c)74,68673,29774,927 80,200 82,119Operating Data(percent of net sales):Gross margin 33.1%32.5%31.8%31.7%31.7%Selling,general and administrative expenses 23.9%24.4%23.8%23.7%23.5%Operating income 7.3%6.0%5.9%6.1%6.5%Net income 4.6%3.7%3.6%3.7%4.0%Number of Stores:Beginning of year 9
241、30855764 676 595New stores opened 747691 89 82Closed/sold stores(3)(1)-(1)(1)End of year 1,001930855 764 676Number of stores relocated during year-21 12 15Number of stores remodeled(d)163 1 3Capital expenditures(e)$96,511$73,974$91,759$83,986$90,565Same-store sales increase(decrease)(f)7.0%(1.1%)1.4
242、%3.4%1.6%Average sales per store(000 s)(g)$3,781$3,586$3,703$3,762$3,699Average transaction value$42.07$42.06$44.55$43.60$43.12Average number of daily transactions per store 249236230 239 238Total team members 14,70013,30012,800 11,600 9,800Balance Sheet Data(at end of period):Working capital$617,15
243、3$475,847$337,225$340,405$340,522Total assets 1,463,4741,276,5801,143,301 1,083,185 1,010,639Long-term debt,less current portion(h)1,3161,4071,797 2,351 2,808Stockholders equity 933,242779,151651,799 580,943 611,292_ 17(a)As discussed in Note 1 Significant Accounting Policies in Part II Item 8 of th
244、is Form 10-K regarding our change in accounting for inventories from last-in,first-out(LIFO)method to the average cost method,selected financial data has been retrospectively adjusted.Retrospective adjustments relating to fiscal 2009 and 2008 have been provided in Note 1 Significant Accounting Polic
245、ies in Part II Item 8 of this Form 10-K:2007 2006As Previously ReportedAs AdjustedAs Previously ReportedAs AdjustedOperating Results:Net sales$2,703,212$2,703,212$2,369,612$2,369,612 Gross margin 852,708 857,940 746,146 752,237 Selling,general and administrative expenses 641,603 641,603 555,834 555,
246、834 Depreciation and amortization 51,06451,06442,292 42,292 Operating income 160,041 165,273 148,020 154,111 Interest expense,net 5,037 5,037 2,688 2,688 Income before income taxes 155,004 160,236 145,332 151,423 Income tax provision 58,76360,77754,324 56,677 Net income$96,241$99,459$91,008$94,746Ne
247、t income per share basic(b)(c)$1.23$1.27$1.14$1.18 Net income per share assuming dilution(b)(c)$1.20$1.24$1.11$1.15Adjusted weighted average shares for dilutive earnings per share(c)80,200 80,200 82,119 82,119Operating Data(percent of net Gross margin 31.5%31.7%31.5%31.7%Selling,general and administ
248、rative expenses 23.7%23.7%23.5%23.5%Operating income 5.9%6.1%6.2%6.5%Net income 3.6%3.7%3.8%4.0%2008 2007 2006As Previously ReportedAs AdjustedAs Previously ReportedAs AdjustedAs Previously ReportedAs AdjustedBalance Sheet Data(at end of period):Working capital$295,518$337,225$324,799$340,405$328,13
249、4$340,522Total assets 1,075,997 1,143,301 1,057,971 1,083,185 998,258 1,010,639 Long-term debt,less current portion(h)1,797 1,797 57,351 57,351 2,808 2,808 Stockholders equity 610,130 651,799 565,337 580,943 598,904 611,292 (b)Basic net income per share is calculated based on the weighted average nu
250、mber of common shares outstanding applied to net income.Diluted net income per share is calculated using the treasury stock method for stock options and restricted stock units.(c)Adjusted to reflect two-for-one stock split that was effective September 2,2010.(d)Reflects remodelings costing more than
251、$150,000.(e)Includes assets acquired through capital leases.(f)Same-store sales increases(decreases)are calculated on an annual basis,including relocations in 2010,2009 and 2008 and excluding relocations in 2007 and 2006,using all stores open at least one year.(g)Average sales per store is calculate
252、d based on total sales divided by the weighted average number of stores open in the year.(h)Long-term debt includes borrowings under the Companys revolving credit agreement and amounts outstanding under its capital lease obligations,excluding the current portion.18 Item 7.Management s Discussion and
253、 Analysis of Financial Condition and Results of OperationsOverviewTractor Supply Company is the largest operator of retail farm and ranch stores in the United States and is focused on supplying the lifestyle needs of recreational farmers and ranchers and of those who enjoy the rural lifestyle,as wel
254、l as tradesmen and small businesses.We operate retail stores under the names Tractor Supply Company and Dels Farm Supply and operate a website under the name TractorS.Our stores are located in towns outlying major metropolitan markets and in rural communities,and they offer the following comprehensi
255、ve selection of merchandise:Equine,pet and small animal products,including items necessary for their health,care,growth and containment;Hardware,truck,towing and tool products;Seasonal products,including lawn and garden items,power equipment,gifts and toys;Maintenance products for agricultural and r
256、ural use;and Work/recreational clothing and footwear.Our Tractor Supply stores typically range in size from 15,500 to 18,500 square feet of inside selling space and additional outside selling space.We use a standard 15,500 square foot prototype for new purpose-built locations.For new stores located
257、in existing buildings,one of several layout formats is utilized.Our wholly-owned subsidiary,Del s,operated 26 stores as of December 25,2010 in Washington,Oregon,Idaho and Hawaii.Del s stores currently range in size from approximately 2,000 to 6,000 square feet of inside selling space plus additional
258、 outside and covered/sheltered selling space.Our current and long-term growth strategy is to:(1)expand geographic market presence through opening new retail stores,(2)enhance financial performance through same-store sales increases,achieved through targeted merchandising programs with an“everyday va
259、lue prices”philosophy and supported by strong customer service,(3)enhance product margin through assortment management,vendor management,sourcing and optimization of transportation and distribution costs,(4)leverage operating costs,especially advertising,distribution and corporate overhead,(5)expand
260、 market opportunities via internet sales,and(6)expand through selective acquisition,as such opportunities arise,to enhance penetration into new and existing markets as a complimentary strategy to organic growth.We have experienced considerable sales growth over the past five years,with a compounded
261、annual growth rate of approximately 12.0%.We project an increase of 80 to 85 new stores in 2011,an increase of approximately 8%.We opened 74 new stores in 2010 and 76 new stores in 2009,an increase of approximately 8%and 9%,respectively.We operated 1,001 retail farm and ranch stores in 44 states as
262、of December 25,2010.We have developed a proven method for selecting store sites and have identified over 800 potential additional markets for new Tractor Supply stores in the United States.The average cash investment for new leased stores opened in 2010 was$1.2 million for retrofit stores and$0.9 mi
263、llion for prototype stores.A majority of the cash outlay was for initial acquisition of inventory and capital expenditures(principally leasehold improvements,fixtures and equipment),and approximately$92,000 for pre-opening costs.We have placed significant emphasis on our merchandising programs,evalu
264、ating the sales and profitability of our products through detailed line reviews,review of vendor performance measures and modification of the overall product offerings.We believe these efforts,coupled with a strong marketing program and in-depth product knowledge training of our store team members,h
265、ave enhanced our sales and financial performance.Change in Accounting Method Effective December 25,2010,the Company elected to change its method of accounting for inventories from the lower of cost,as determined by the last-in,first-out(“LIFO”)method,or market to the lower of cost,as determined by t
266、he average cost method,or market.The Company believes the change is preferable as the average cost method better reflects the current value of inventory on the consolidated balance sheets,provides a better reflection of periodic income and improves comparability with our peers.19 The Company has app
267、lied this change in method of inventory costing retrospectively to all prior periods presented herein in accordance with accounting principles relating to accounting changes.All financial information in Item 8 of this 10-K has been retrospectively adjusted.See Note 1,Significant Accounting Policies,
268、to the Notes to Consolidated Financial Statements,included in Item 8,Financial Statements and Supplementary Data,of this Annual Report on Form 10-K,for a complete discussion of our change in accounting method.Stock Split On July 29,2010,our Board of Directors announced a two-for-one split of our out
269、standing shares of common stock to be effected in the form of a stock dividend.On September 2,2010,stockholders of record at the close of business on August 19,2010,were issued one additional share of common stock for each share owned by such stockholder.The stock split increased the number of share
270、s of common stock outstanding from approximately 36.3 million to approximately 72.7 million.Share and per-share amounts(including stock options and restricted stock units)shown in this Form 10-K reflect the split.The total number of authorized common shares and the par value thereof was not changed
271、by the split.The number of shares held in treasury was not adjusted for the split.Seasonality and Weather Our business is highly seasonal.Historically,our sales and profits have been the highest in the second and fourth fiscal quarters due to the sale of seasonal products.Unseasonable weather,excess
272、ive precipitation,drought,and early or late frosts may also affect our sales.We believe,however,that the impact of extreme weather conditions is somewhat mitigated by the geographic dispersion of our stores.We experience our highest inventory and accounts payable levels during our first fiscal quart
273、er for purchases of seasonal product in anticipation of the spring selling season and again during our third fiscal quarter in anticipation of the winter selling season.Purchase Price Volatility Although we cannot determine the full effect of inflation and deflation on our operations,we believe our
274、sales and results of operations are affected by both.We are subject to market risk with respect to the pricing of certain products and services,which include,among other items,steel,grain,petroleum,corn,soybean and other commodities as well as transportation services.Therefore,we may experience both
275、 inflationary and deflationary pressure on product cost,which may impact consumer demand and,as a result,sales and gross margin.Our strategy is to reduce or mitigate the effects of purchase price volatility principally by taking advantage of vendor incentive programs,economies of scale from increase
276、d volume of purchases,adjusting retail prices and selectively buying from the most competitive vendors without sacrificing quality.Due to the competitive environment,such conditions have and may continue to adversely impact our financial performance.Significant Accounting Policies and Estimates Mana
277、gement s discussion and analysis of our financial position and results of operations are based upon our consolidated financial statements,which have been prepared in accordance with United States generally accepted accounting principles.The preparation of these financial statements requires manageme
278、nt to make informed estimates and judgments that affect the reported amounts of assets,liabilities,revenues and expenses and related disclosure of contingent assets and liabilities.Our financial position and/or results of operations may be materially different when reported under different condition
279、s or when using different assumptions in the application of such policies.In the event estimates or assumptions prove to be different from actual amounts,adjustments are made in subsequent periods to reflect more current information.Our significant accounting policies are disclosed in Note 1 to our
280、Consolidated Financial Statements.The following discussion addresses our most critical accounting policies,which are those that are both important to the portrayal of our financial condition and results of operations and that require significant judgment or use of complex estimates.20 Description Ju
281、dgments and UncertaintiesEffect if Actual Results Differ From AssumptionsRevenue Recognition and Sales Returns:We recognize revenue at the time the customer takes possession of merchandise or receives services.If we receive payment before the customer has taken possession of the merchandise(as per o
282、ur special order and layaway programs),the revenue is deferred until the sale is complete.Revenues from the sale of gift cards are deferred and recognized when the gift card or merchandise return card is redeemed by the customer.Income is recognized when the likelihood of the gift card or merchandis
283、e return card being redeemed by the customer is remote(referred to as“breakage”).We estimate a liability for sales returns based on a rolling average of historical return trends,and we believe that our estimate for sales returns is an accurate reflection of future returns associated with past sales.
284、Our estimation methodologies have been consistently applied from year to year;however,as with any estimate,refund activity may vary from estimated amounts.The gift card and merchandise return card breakage rate is based upon historical redemption patterns and a benefit is recognized for estimated un
285、redeemed gift cards and merchandise return cards in proportion to those historical redemption patterns.We have not made any material changes in the accounting methodology used to recognize sales returns or breakage in the financial periods presented.We do not believe there is a reasonable likelihood
286、 that there will be a material change in the future estimates or assumptions we use to calculate sales returns or gift card and merchandise return card breakage.However,if actual consumer return or gift card and merchandise return card redemption patterns are not consistent with our estimates or ass
287、umptions,we may be exposed to losses or gains that could be material.A 50 basis point change in our sales return rate at December 25,2010,would have affected net income byapproximately$170,000 in fiscal 2010.A 50 basis point change in our gift card and merchandise return card breakage rate would hav
288、e affected net income byapproximately$340,000 in fiscal 2010.Inventory Valuation:Inventory Impairment Risk We identify potentially excess and slow-moving inventory by evaluating turn rates,historical and expected future sales trends,age of merchandise,overall inventory levels,current cost of invento
289、ry and other benchmarks.The estimated inventory valuation reserve to recognize any impairment in value(i.e.,an inability to realize the full carrying value)is based on our aggregate assessment of these valuation indicators under prevailing market conditions and current merchandising strategies.We do
290、 not believe our merchandise inventories are subject to significant risk of obsolescence in the near term.However,changes in market conditions or consumer purchasing patterns could result in the need for additional reserves.Our impairment reserve contains uncertainties because the calculation requir
291、es management to make assumptions and to apply judgment regarding forecasted customer demand,and the promotional environment.We have not made any material changes in the accounting methodology used to recognize inventory impairment reserves in the financial periods presented.We do not believe there
292、is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to calculate impairment.However,if assumptions regarding consumer demand or clearance potential for certain products are inaccurate,we may be exposed to losses or gains that could be materia
293、l.A 10%change in our impairment reserve at December 25,2010,would have affected net income byapproximately$490,000 in fiscal 2010.21 Description Judgments and UncertaintiesEffect if Actual Results Differ From Assumptions Shrinkage We perform physical inventories at each store at least once a year,an
294、d we have established reserves for estimating inventory shrinkage between physical inventory counts.The reserve is established by assessing the chain-wide average shrinkage experience rate,applied to the related periods sales volumes.Such assessments are updated on a regular basis for the most recen
295、t individual store experiences.The estimated store inventory shrink rate is based on historical experience.We believe historical rates are a reasonably accurate reflection of future trends.Our shrinkage reserve contains uncertainties because the calculation requires management to make assumptions an
296、d to apply judgment regarding future shrinkage trends and the effect of loss prevention measures and new merchandising strategies.We have not made any material changes in the methodology used to recognize shrinkage in the financial periods presented.We do not believe there is a reasonable likelihood
297、 that there will be a material change in the future estimates or assumptions we use to calculate our shrinkage reserve.However,if our estimates regarding inventory losses are inaccurate,we may be exposed to losses or gains that could be material.A 10%change in our shrinkage reserve at December 25,20
298、10,would have affected net income by approximately$815,000 in fiscal 2010.Vendor Support We receive funding from substantially all of our significant merchandise vendors for the promotion of our brand as well as the sale of their products through a variety of programs and arrangements,including guar
299、anteed funding and volume rebate programs.The amounts received are subject to terms of vendor agreements,which have varying expiration dates ranging in duration from several months to a few years.Many agreements are negotiated annually and are based on expected annual purchases of the vendor s produ
300、ct.Vendor funding is initially deferred as a reduction of the purchase price of inventory and then recognized as a reduction of cost of merchandise as the related inventory is sold.During interim periods,the amount of expected funding is estimated based upon initial guaranteed commitments,as well as
301、 anticipated purchase levels with applicable vendors.The estimated purchase volume and related vendor funding is based on our current knowledge of inventory levels,sales trends and expected customer demand,as well as planned new store openings and relocations.Although we believe we can reasonably es
302、timate purchase volume and related vendor funding at interim periods,it is possible that actual year-end results could significantly differ from previously estimated amounts.Our allocation methodology contains uncertainties because the calculation requires management to make assumptions and to apply
303、 judgment regarding customer demand,purchasing activity,target thresholds,vendor attrition and collectibility.At the end of each fiscal year,a significant portion of the actual purchase activity is known.Thus,we do not believe there is a reasonable likelihood that there will be a material change in
304、the amounts recorded as vendor support.We do not believe there is a significant collectibility risk related to vendor support amounts due us at the end of fiscal 2010.If a 10%reserve had been applied against our outstanding vendor support due as of December 25,2010,net income would have been affecte
305、d by approximately$1.6 million.Although it is unlikely that there will be any significant reduction in historical levels of vendor support,if such a reduction were to occur in future periods,the Company could experience a higher inventory balance and higher cost of sales.Freight We incur various typ
306、es of transportation and delivery costs in connection with inventory purchases and distribution.Such costs are included as a component of the overall cost of inventories(on an aggregate basis)and recognized as a component of cost of merchandise sold as the related inventory is sold.We allocate freig
307、ht as a component of total cost of sales without regard to inventory mix or unique freight burden of certain categories.This assumption has been consistently applied for all years presented.If a 10%increase or decrease had been applied against our current inventory capitalized freight balance,net in
308、comewould have been affected by approximately$3.4 million.22 Description Judgments and UncertaintiesEffect if Actual Results Differ From AssumptionsShare-Based Compensation:We have share-based compensation plans,which include incentive and non-qualified stock options,restricted stock units,and an em
309、ployee stock purchase plan.See Note 1,Significant Accounting Policies,and Note 2,Share-Based Compensation,to the Notes to Consolidated Financial Statements,included in Item 8,Financial Statements and Supplementary Data,of this Annual Report on Form 10-K,for a complete discussion of our share-based c
310、ompensation programs.We estimate the fair value of our stock option awards at the date of grant utilizing a Black-Scholes option pricing model.We estimate the fair value of our market-based restricted stock units at the date of grant utilizing average market price of our stock on the date of the rel
311、ated award.Option-pricing models and generally accepted valuation techniques require management to make subjective assumptions and to apply judgment to determine the fair value of our awards.These assumptions and judgments include estimating the future volatility of our stock price,expected dividend
312、 yield,future employee turnover rates and future employee stock option exercise behaviors.In addition to the key assumptions used to estimate the fair value,the estimated forfeiture rate of the awarded options is a critical assumption,as it reduces expense ratably over the vesting period.Changes in
313、these assumptions can materially affect the fair value estimateand the amount of share-basedcompensation recognized.While we update our assumptions annually,we do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to determ
314、ine share-based compensation expense.However,if actual results are not consistent with our estimates or assumptions,we may be exposed to changes in share-based compensation expense that could be material.The reported share-based compensation expense may not be representative of the actual economic c
315、ost of the share-based compensation.A 10%change in our share-based compensation expense for the year ended December 25,2010,would have affected net income by approximately$750,000.Self-Insurance Reserves:We self-insure a significant portion of our employee medical insurance,workers compensation and
316、general liability insurance plans.We have stop-loss insurance policies to protect from individual losses over specified dollar values.When estimating our self-insured liabilities,we consider a number of factors,including historical claims experience,demographic factors and severity factors.The full
317、extent of certain claims,especially workers compensation and general liability claims,may not become fully determined for several years.Our self-insured liabilities contain uncertainties because management is required to make assumptions and to apply judgment to estimate the ultimate cost to settle
318、reported claims and claims incurred but not reported as of the balance sheet date.We have not made any material changes in the accounting methodology used to establish our self-insurance reserves in the financial periods presented.We do not believe there is a reasonable likelihood that there will be
319、 a material change in the assumptions we use to calculate insurance reserves.However,if we experience a significant increase in the number of claims or the cost associated with these claims,we may be exposed to losses that could be material.A 10%change in our self-insurance reserves at December 25,2
320、010,would have affected net income byapproximately$1.8 million in fiscal 2010.23 Description Judgments and UncertaintiesEffect if Actual Results Differ From AssumptionsSales Tax Audit Reserve:A portion of our sales are to tax-exempt customers.We obtain exemption information as a necessary part of ea
321、ch tax-exempt transaction.Many of the states in which we conduct business will perform audits to verify our compliance with applicable sales tax laws.The business activities of our customers and the intended use of the unique products sold by us create a challenging and complex compliance environmen
322、t.These circumstances also create some risk that we could be challenged as to thepropriety of our sales tax compliance.While we believe we reasonably enforce sales tax compliance with our customers and endeavor to fully comply with all applicable sales tax regulations,there can be no assurance that
323、we,upon final completion of such audits,would not have a significant liability for disallowed exemptions.We review our past audit experience and assessments with applicable states to determine if we have potential exposure for non-compliance.Any estimated liability is based on an initial assessment
324、of compliance risk and our to-date experience with each audit.As each audit progresses,we quantify the exposure based on preliminary assessments made by the state auditors,adjusted for additional documentation that may be provided to reduce the assessment.Our sales tax audit reserve contains uncerta
325、inties because management is required to make assumptions and to apply judgment regarding the regulatory support for the complexity ofagricultural-based exemptions,the ambiguity in state tax regulations,the number of ongoing audits,and the length of time required to settle with the state taxing auth
326、orities.We have not made any material changes in the methodology used to establish the sales tax audit reserve in the financial periods presented.We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to calculate the sal
327、es tax liability reserve for current audits.However,if our estimates regarding the ultimate sales tax liability are inaccurate,we may be exposed to losses or gains that could be material.A 10%change in our sales tax liability reserve at December 25,2010,would have affected net income byapproximately
328、$470,000 in fiscal 2010.Tax Contingencies:Our income tax returns are periodically audited by U.S.federal and state tax authorities.These audits include questions regarding our tax filing positions,including the timing and amount of deductions and the allocation of income among various tax jurisdicti
329、ons.At any time,multiple tax years are subject to audit by the various tax authorities.In evaluating the exposures associated with our various tax filing positions,we record reserves for probable exposures.A number of years may elapse before a particular matter,for which we have established a reserv
330、e,is audited and fully resolved or clarified.We adjust our tax contingencies reserve and income tax provision in the period in which actual results of a settlement with tax authorities differs from our established reserve,the statute of limitations expires for the relevant tax authority to examine t
331、he tax position or when more information becomes available.We recognize a liability for certain tax benefits that do not meet the minimum requirements for recognition in the financial statements.Our tax contingencies reserve contains uncertainties because management is required to make assumptions a
332、nd to apply judgment to estimate the exposures associated with our various filing positions and whether or not the minimum requirements for recognition of tax benefits have been met.Our effective income tax rate is also affected by changes in tax law,the tax jurisdiction of new stores or business ve
333、ntures,the level of earnings and the results of tax audits.We do not believe there is a reasonable likelihood that there will be a material change in the reserves established for tax benefits not recognized.Although management believes that the judgments and estimates discussed herein are reasonable,actual results could differ,and we may be exposed to losses or gains that could be material.To the
0731-84720580
sgpjbg002
工作日 9:30 - 18:00
研報
新質生產力
DeepSeek?
低空經濟
大模型
AI Agent
AI Infra
具身智能
自動駕駛
寵物
銀發經濟
人形機器人
企業出海
算力
微短劇
薪酬
白皮書
創新藥
人工智能
AI產業
信息科技
互聯網
消費經濟
汽車交通
電商零售
傳媒娛樂
醫藥健康
投資金融
能源環境
地產建筑
傳統產業
英文報告
其它
最新報告
中英對照
全文搜索
報告精選
PDF上傳翻譯
多格式文檔互轉
入駐&報告售賣
會員權益
機構報告
券商研報
財報庫
專題合集
英文報告
數據圖表
會議報告
其他資源
行業聚焦
芯片產業
熱點概念
全球咨詢智庫
人工智能
500強
新質生產力
會議峰會
新能源汽車
企業年報
互聯網
公司研究
行業綜觀
消費教育
科技通信
醫藥健康
人力資源
投資金融
汽車產業
物流地產
電子商務
傳統產業
傳媒營銷
其它
2025低空經濟/低空產業報告合集（共49套打包）
2025年智算中心/AIDC/AI數據中心研究報告合集（共37套打包）
AI、科技與通信
廣告、傳媒與營銷
消費、零售與支付
HR、文化與旅游
金融、保險與投資
能源、環境與工業
醫療制藥與大健康
物流、地產與建筑
其他行業
AI ? 科技 ? 通信
數字化
金融財經
智能制造
電商傳媒
地產建筑
醫療醫學
能源化工
其他行業
收藏
下載
2025-05-20
AI查數
行業數據
政策法規
商業模式
產業鏈
競爭格局
市場規模
產業概述
其它
2025年
AI讀財報
年報
一季報
半年報
三季報
IPO招股書
社會責任報告
A股
IPO申報
港股
美股&全球
新三板
掃碼登錄
手機快捷登錄
賬號登錄
