1、2 20 00 01 1 A ANNNNUUA AL L R RE EP POOR RT TOUR SALES TEAM:A FARMER,AN EQUINE ENTHUSIAST,AND A WELDEROUR SALES TEAM:A FARMER,AN EQUINE ENTHUSIAST,AND A WELDER2THIS IS TRACTOR SUPPLY COMPANYTractor Supply Company began as a tractor parts mail-order catalog business in Chicago in 1938 and hasgrown t
2、o be the largest operator of retail farm and ranch stores in the United States.Stores are locatedin the outlying towns of major metropolitan markets and in rural communities.Tractor Supply operates323 stores in 28 states focusing on supplying products for the lifestyle needs of hobby and part-time f
3、armersand ranchers.The Company also serves the maintenance needs of suburban customers,contractors and trades-men.Over the past six decades,many aspects of our business have changed including the size of our stores and themerchandise assortment.But one thing has not changed-our commitment to our cus
4、tomers.Superior cus-tomer service is the key to sales success,profit growth and store growth.And the most important componentin providing superior customer service-outstanding team members with great attitudes!Our number one asset at Tractor Supply is our employees-from our store teams,to our suppor
5、t personnel,toour leadership-everyone works hard to provide our customers with a great shopping experience.After all,thisattitude is what has made us the largest farm and ranch store chain in America!Our Mission To work hard,have fun and make money by providing legendary service and great products a
6、t everyday low prices.323 stores in28 states.and GROWING!TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT(1)(1)(10)(2)MD(7)(4)(6)(1)(5)(10)(9)(1)(3)(1)(8)(13)(15)(38)(20)(23)(8)(19)(31)(8)(5)(62)(6)(6)TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT3Letter To Shareholders4-5Financial Highlights 6Wal#Mart Moved-Tr
7、actor Supply Did,Too 7Jesse Guzman does the Texas two-stepCOVER STORYA Farmer,an Equine Enthusiast and a Welder8Larry,Gina and Sean provide the knowledge base for success in Meadville,PAGloria Ussery Trains Horses10She also leads peopleBenefits and Bonuses-Alignment of Interests11 Kim Vella tells ho
8、w what s good for team members is also good for shareholdersPromotions,Promotions,Promotions.12We promoted power equipment and women swork wear.We promoted Tom Parrish,too!IT,POS,SSC,SAP,ERP,ATM,DC,RF.What Do All These Letters Mean?13Sanjay Zachariah takes the mysteryout of the latest technology dev
9、elopmentsFINANCIAL INFORMATIONSelected Financial And Operating Highlights For 5 Years 14Managements Discussion And Analysis15Financial Statements23Cover Story:Page 8Gloria Ussery:Page 10Tom Parrish:Page 12TABLE OF CONTENTSTRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT4TO OUR SHAREHOLDERSDear Shareholders
10、:Our Business-Tractor Supply dominates a special andunique niche in the retail marketplace.Wefocus on the rural lifestyle with particularemphasis on customers who describe theselvesas recreational farmers and ranchers.Our cus-tomers value the outdoors,family independenceand self-reliance and,like th
11、e rest of us,demand good selection,greatvalue and solid customerservice,which is exactlywhat they find at our stores.The Tractor Supplymerchandise assortment isgeared directly to the lifestyleneeds of our customers.Theproducts found at TractorSupply stores can seldom befound elsewhere under oneroof.
12、We win with ourcustomers by offering a broadselection of products selectedspecifically for their needs.The unique merchandiseselection at Tractor Supply is akey advantage;however themajor point of differentiation is the shoppingexperience-handy locations,easy access in andout,superior product knowle
13、dge,everyday lowprices and quick checkout.Knowledgeable andenthusiastic team members work diligently tomake every shopping experience a good one.We even know our regular customers by name.Our Results-Same-store sales in 2001 rose 3.8%and totalsales increased 12%.Net income rose 29%,yielding earnings
14、 of$2.33 per share up from$1.87 a share the previous year.The accelerated effort to build a still betterteam of store and district managers is producingsolid results.The entireprocess of recruiting,training,and developing themanagement team has beenrebuilt.The quality of theteam is improving andturn
15、over is declining.Tractor Supply has alsomade tremendous stridesimproving management ofthe inventory.We operatedthe entire year with at least97%in stock at stores on the450 driver items.”At thesame time,average storeinventories were down 9%.We beat our aggressiveinventory plans all yearyielding subs
16、tantiallyimproved inventory turn and reduced borrow-ings.We successfully opened 18 new stores andremodeled and relocated five more.We continueto improve our demographic models,yieldingstill stronger performance from new stores.Initialplans call for at least 25 new stores this year andrenovation or r
17、elocation of about 10 older storesin growth markets.Joe ScarlettChairman of the Board andChief Executive Officer(Continued)TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT5TO OUR SHAREHOLDERS Our support functions continue to excel.Theinvestments made in computer systems over thelast several years are cont
18、ributing to operatingefficiencies and improved inventory turn.Thedistribution facility investments are also key contributors.The other support functions-human resources,accounting,real estate,etc.areall working in concert to provide store supportand drive profits.The Opportunity-At the beginning of
19、2002,Tractor Supply added 87 newstores from the bankruptcy ofa major competitor.The newstores are located in the Eastand Midwest,in previouslyresearched and targetedgrowth markets and are inaddition to the 25 new storesmentioned previously.Afterothers have liquidated themerchandise,we will quicklyre
20、configure the fixtures,stockthe stores and start servingour new customers.We havealready hired many of their best store managers,district managers,sales people,and support pro-fessionals.This is a once-in-a-business-lifetime growthopportunity for Tractor Supply Company.Mostof the new locations will
21、be open before mid-year.We have aggressive timelines and comprehensive operational plans.We will strengthen our purchasing power,broaden our marketing,leverage virtually everyexpense category,and benefit from the elimina-tion of our largest direct competitor.We are inthe midst of our greatest challe
22、nge ever,and ourteam has stepped up like never before.The Future-We know our customers,know our merchan-dise,know our demographics,and provide our customerswith a superb shoppingexperience.We say withgreat confidence that theleadership team at the top andthroughout the organization isthe strongest,m
23、ost aligned,and most aggressive in thecompanys history.The future for Tractor Supplyis very bright.We dominatea special niche in the retailmarket and are committed tonever ending sales and profitgrowth.Joe ScarlettChairman of the Board andChief Executive OfficerJim WrightPresident and Chief Operatin
24、g OfficerJim WrightPresident and Chief Operating OfficerFINANCIAL HIGHLIGHTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT6(in thousands,except where noted)PercentFiscal YearIncrease2001 2000(Decrease)Operating Results:Net sales$849,799$759,03712.0%Income before income taxes36,52627,59632.4Net income25,
25、77416,39057.3Net income per share-basic ($)2.921.8756.1Net income per share-assuming dilution ($)2.851.8752.4Financial Position:Total assets338,482332,2961.6Cash and short-term investments8,9279,145(2.4)Stockholders equity181,296155,03616.4Long-term debt to equity (%)12.840.6Statistics:Number of sto
26、res (#)3233055.9Square footage at year-end4,1643,9056.6Average sales per store ($)2,6992,6033.7 Net sales per square foot ($)2092042.5GRAPHSNet Sales for Total Number of Stores1997-2001(in millions)for 1997-2001(at Year-End)2001$849.820013232000$759.020003051999*$688.119992731998$600.719982431997$50
27、9.11997228*53-week fiscal year.As with any business,all phases of the Companys operations are subject to influences outside its control.This report contains certain forward-looking statements.These statements include reference to certain factors,any one,or a combination,of which could materially aff
28、ect the results ofthe Companys operations.These factors include general economic cycles affecting consumer spending,weather factors,operating factors affectingcustomer satisfaction,consumer debt levels,pricing and other competitive factors,the ability to attract,train and retain highly qualified ass
29、ociates,the ability to identify suitable locations and negotiate favorable lease agreements on new and relocated stores,the timing and acceptance of new products in the stores,the mix of goods sold,the continued availability of favorable credit sources,capital market conditions in general and the se
30、asonality of the Companys business.Forward-looking statements made by or on behalf of the Company are based on a knowledge of its businessand the environment in which it operates,but because of the factors listed above,actual results could differ materially from those reflected by anyforward-looking
31、 statements.Consequently,all of the forward-looking statements made are qualified by these cautionary statements and there can beno assurance that the actual results or developments anticipated by the Company will be realized or,even if substantially realized,that they will havethe expected conseque
32、nces to or effects on the Company or its business and operations.90080070060050040030020010001997 1998 1999*2000 2001Net Sales for 1997-2001(in millions)3503002502001505001997 1998 1999*2000 2001Number of Stores for 1997-2001(at year end)*53-week fiscal year7TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT
33、Retail sales growthin the Waco,Texasmarket resulted inWal#Mart expanding to a“Supercenter”.TractorSupply had also experi-enced significant salesgrowth in our Waco store.We often find that ourgrowth and Wal#Martsgrowth go hand-in-hand.As a result,over the lastfive years we have locatedTractor Supply
34、stores in aportion of over 30 formerWal#Mart stores.Waco is one more example of a growth retailmarket where people livethe rural lifestyle.So thispast summer,Store ManagerJesse Guzman and his teamdid the“Texas two-step”.Step one was to turn26,000 square feet of the former Wal#Mart into anew generati
35、on Tractor Supply store.Step two was tomove the existing store to the new facilities.No,thiswasnt a dance,but the Waco store team and theircustomers are dancing for joy at the new expandedfacility that is easier to shop and easier to operate.Jesse has been managing a Tractor Supply store inWaco sinc
36、e 1987 and led a previous successful relo-cation back in the late 80s.The new Waco facilityhas a bigger sales floor,a larger side lot,a new frontentrance and a much larger parking area.The response from our customers has beentremendous,said Jesse.They have rewarded uswith their compliments and their
37、 business.Otherstores,which have been relocated in this manner,have proven to be very profitable.And I expect thesame from Waco.Tractor Supply is committed to renovating,enlarg-ing and relocating older profitable stores in growthmarkets.Significant improvements were made lastyear in Burleson,Texas;E
38、lizabethtown,Kentucky;Warrenton,Virginia;and St.Joseph,Missouri.Salesfloors were expanded,side lots were enlarged,newfront entrances were added and parking lots wereexpanded.Other stores have been selected for futuresimilar renovations and relocations.Wal#Mart Moved-Tractor Supply Did,TooJesse Guzma
39、n does the Texas two-stepWaco,Texas Store Manager Jesse Guzman proudly stands in front of his new store.In the small town of Meadville,Pennsylvania,Larry,Gina andSean go about their day at thelocal Tractor Supply store provid-ing an intangible service to theircustomers-expert product knowledge.This
40、knowledge basehas helped make the Meadvillestore very successful.Tractor Supply stores offer aunique assortment of specializedproducts geared to the specificneeds of our customers.Substantial knowledge is oftenrequired to explain product features and benefits.Team members who know the productsand th
41、e customers are the mostimportant components of successin our stores.No other farm andranch retail chain offers moreproduct knowledge than TractorSupply;thats what differentiatesus.Building The Team is a mission of every store manager.The message is clear-the higherthe quality of people on the team,
42、the more successful the store.Thestaffing goal for each store is tohave a farmer/rancher,a welder,and an equine enthusiast on theteam.In Meadville,Larry Crom is ourexpert farmer/rancher.Larry is asemi-retired farmer himself andknows many of his customers byname.He uses his experienced-based product
43、knowledge about thecore work of our traditional customer all the time and is constantly sharing that knowledgewith his fellow team members.Gina Roberts lives on a 23-acrefarm just outside of Meadville andowns two horses and a mule.Shehas a passion for these beautifulA Farmer,an Equine ELarry,Gina,an
44、d Sean provide the knowledge base for TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT8Meadville,Pennsylvania Equine Expert Gina Roberts assists her customer in selecting a bridle.COVER STORY TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT9nthusiast and a Welder success in Meadville,Pennsylvaniadaily health and
45、grooming needs.About one third of TractorSupplys customers own horses,so who better to help equestriancustomers at the Meadville TractorSupply store than Gina.Customersreally appreciate Ginas advice onfeed,health maintenance andgrooming products for their animals.Sean Coulter is called Mr.Mechanic i
46、n Meadville because ofhis love for car restoration.Hisunderstanding of welding productsand other tools has made him agreat asset to his team.He is aconfident and competent welderand an all-around handyman whotruly understands his customersneeds.If you have a mechanicalquestion,you can trust Sean for
47、the answer.At Tractor Supply,we arealways seeking to improve our levels of product knowledge.Inaddition to the knowledge sharedby our experts,we also conducttraining classes on many key product lines such as power equipment,animal feed,animalmedicines,welders,air compressors,and work clothing.After
48、all,its the job of each teammember to provide legendary customer service.The success of every TractorSupply store depends on theknowledge and attitude of eachteam member.It is everyonesongoing job to keep learning aboutthe products.The more knowledgewe can share with our customers,the better the sho
49、pping experience.Superior customer service is jobnumber one.Our goal is to makeevery shopping experience a greatshopping experience.By using her knowledge of horses,Gina helps her customers daily with their equine needs.LEADERSHIP AT WORKGloria Ussery Trains Horses-She Also Leads PeopleA lady from P
50、ennsylvania improves business south of NashvilleWhat do training horsesand leading people havein common?Bothrequire strength,patience,determination,creativity and hardwork.Gloria Ussery has thoseexact qualities.Thats what makesher a great District Manager atTractor Supply Company.Gloria began her ca
51、reer withTractor Supply in 2000 after relocating from Pennsylvania.Shehelped open 10 new stores inFlorida before moving toTennessee to become DistrictManager over 11 stores just southof Nashville.Her leadership hascatapulted this district to the topthird in the Company.Just as Gloria trains her thre
52、ehorses to run successful field trials,Tractor Supply trains itsleaders to provide well thought-out plans and consistent messagesthrough semi-annual LeadersMeetings.Tractor Supply actively seeksthose leaders who mirror thephilosophies of the Company.Ibelieve in our Companys mission,values and core b
53、eliefs,statedGloria.This foundation hashelped our Company through 63years of challenge,change andgrowth.My goal,as a leader,is toinstill the same values in my teammembers.Tractor Supply encourages itsleaders to surround themselveswith the right team members.Wehave heard over and over againthat the m
54、ost important decisionwe ever make as leaders is theselection of the people that com-prise our teams,said Gloria.Another important aspect of theleaders job is listening to theirteam members.We encourage ourteam members to listen to theircustomers,Gloria added.Asleaders,we must also listen to our tea
55、ms because the best ideasabout driving our business usuallycome from those closest to the customer.Ive always believed that devel-oping team members into stars isone of the most rewarding aspectsof my job,Gloria stated.If I canencourage initiative,teach,andcoach effectively,then thosearound me will
56、be successful andultimately Tractor Supply will beeven more successful.TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT10District Manager Gloria Ussery travels to the stores in her district weekly to visit withher managers and team members.11ALIGNMENT OF INTERESTSBenefits And BonusesKim Vella tells how wha
57、ts good for employees is also good for shareholdersOur goal at TractorSupply Company is toexceed our customersexpectations,stated Kim Vella,newly promoted Vice President ofHuman Resources.Its good forthe customer,good for business,good for the team members andgood for the shareholders.According to K
58、im,the HumanResources Department has thesame goal-to take care of theircustomers-the team members.Our underlying goal is for ourteam members to value their benefit plans and more closelybond to the organization,Kimadded.Reduced employeeturnover and the ability to attractthe right people lowers expen
59、ses,which is good for shareholders.In early 2000,the HumanResources Department conducted a survey of our team members todetermine the most valued bene-fits.After receiving solid feedbackfrom a cross-functional group,Benefits Manager Betsy Hatcherand her team researched the bestway to redesign the be
60、nefit plansto meet team member needs in themost cost-effective manner.The team developed two newmedical plan options,both with an added wellness benefit and prescription drug card;supplemen-tal and dependent life insurance;company-sponsored life insurance;flexible spending accounts;and along-term di
61、sability plan forexempt team members.This wasall accomplished within targetedcost goals.The response has been over-whelmingly positive.But theHuman Resources Department didnt stop there.The next mission:bonus plans.Jim Wright,Cal Massmann andKim Vella reviewed the variousbonus plans and discovered t
62、herewas opportunity to better alignemployee and shareholder inter-ests.It is important that we areall focused on our profit plan,said Kim.We need to ensure thatour incentive plans are alignedwith our goals.After collaborating with alldepartment heads,the CompanysBoard of Directors and an outsidecons
63、ulting group,the new bonusplans were rolled out with targetstied to Company goals.TractorSupply is proud to have everyteam member participate in abonus plan.Mission Accomplished!Responsive benefit plans together with solid incentive bonusplans lead to motivated team members,which in turn,lead toimpr
64、oved shareholder value!TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTBetsy Hatcher,Leslie Holt,Kim Vella,Nancy Bickel and Brandi Cox-Williamswork hard to provide a benefits package that is mutually beneficial to team members and Tractor Supply.12Promoting Power EquipmentPower equipment-primarilyriding la
65、wn mowers-continues to be a dominantcategory producing significantsales volume and positioningTractor Supply as an industryleader.Buyer Robert Bolyard said,We,along with our manufacturingpartner MTD,select the featuresand benefits for each of our riders.We relentlessly promote this product line in p
66、rint,and on radioand television with spokesmanGeorge Strait.As a result of ourpromotional efforts,total unit salesin 2001 exceeded our record year2000 sales in spite of softer totaldemand.”Power equipment promotionisnt over.In 2002,for the firsttime ever,Tractor Supply willcarry the Cub Cadet line o
67、f thevery highest quality riding mowersin America.Prior to this year,CubCadet and other premium ridershave only been available throughtraditional independent dealers.Senior Vice President Jerry Brasesaid We are thrilled to be the firstmass retailer in America to offer atruly premium rider line to ou
68、rcustomers.We will aggressivelypromote this product line in 2002.Promoting Womens Work WearOur customer base has changedand evolved over the years.Today,50%of our customers are women-so what could be more logical thanpromoting womens work wear?Tractor Supply Company has beenexperimenting with variou
69、s pilotassortments of womens work wearfor more than three years.Theresults of all those pilot programs:a complete line that was rolled outlate last summer.Aggressive sales promotion,along with a greatproduct assortment,has made thewomens work clothing program anoverwhelming success.Promoting from wi
70、thin.Another promotion in 2001.Tom Parrish.Tom grew up in theorganization and was recently pro-moted to Vice President-DivisionalMerchandise Manager.He beganhis career with Tractor Supply in1993 as an Assistant Buyer in merchandising.He was promotedto Buyer in 1995.While a Buyer,Tom successfully fin
71、e-tuned hisproduct assortments improvingturnover and margins.Over the years,Toms merchan-dise responsibilities have includedbuying virtually all products forthe health,care,growth and containment of equine,livestockand pets,as well as a broad selection of agricultural products,mens work clothing,and
72、 lawn andgarden power equipment.Tom and his merchandise teamare committed to further drivingsales,improving gross margins andcontinuing the tremendousimprovement in the managementof inventory.With strengthenedleadership and new,innovativeproduct lines,Tractor Supply willcontinue to expand its domina
73、tionof the farm and ranch store business.TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTPromotions,Promotions,Promotions.Promotions,Promotions,Promotions.We promoted power equipment andwomens work wear.We promoted Tom Parrish too!We promoted power equipment andwomens work wear.We promoted Tom Parrish too!
74、13TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTAlthough technology may bedifficult for many peopleto understand,it doesnthave to be like a foreign language.At Tractor Supply Company(TSC),the use of technology is avery important part of our compet-itive advantage.TSCs Information Technology(IT)Department
75、 recently upgradedseveral of its most important systems including the Point-of-Sale(POS)cash register system.The new hardware platform forPOS performs most processes 30-50%faster than the previous sys-tem and provides new opportuni-ties to gain efficiencies.The store POS systems are connected to sys
76、tems at the StoreSupport Center(SSC)that includea Sales Audit System,a DataWarehouse,Email and an SAPEnterprise Resource Planning(ERP)System.This connection ismade possible via an ATM(Asynchronous Transfer Mode)/Frame Relay connection,whichprovides an always-on connection to all stores allowingconti
77、nuous data transmissionbetween the Support Centerand the stores.Sanjay Zachariah,recentlypromoted Director of EnterpriseSystems Development,demysti-fies these systems for us.All ofthe sales transactions come intoour Sales Audit system where webalance each stores cash,creditand check transactions,the
78、n theyare transmitted to our DataWarehouse,which provides actionable and flexible reporting tovirtually all of the different depart-ments in the Company.Finally,the sales and receiving informationis posted in our SAP ERP systemwhere we manage our merchandiseassortments,replenishment,andaccounting pr
79、ocesses,said Sanjay.Tractor Supply successfullyimplemented SAP in 1999 and justcompleted a four-month upgrade toSAPs most current softwarerelease,version 4.6c,which pro-vides a platform for future growth.So whats next?Were working right now on a project toautomate all of the processes at ourPendleto
80、n,Indiana DistributionCenter(DC)for implementationlater this year,commented Sanjay.Through the use of radio frequency(RF)and voice-activatedmobile terminals,we will improvethe efficiency and accuracy of ourinventory management processes,resulting in faster response timeand lower required inventory l
81、evels.So the next time you hear some-one say,The IT Departmentupgraded the POS system that utilizes an ATM/Frame RelayConnection to the SAP ERPsystem at the SSC;it wont be amystery.You will know thatTractor Supply Company has up-to-date store and support centersystems that provide the information an
82、d controls to effectively manage our business.IT,POS,SSC,SAP,ERP,ATM,DC,RF.What Do All TheseLetters Mean?Sanjay Zachariah takes the mystery out of the latest technology developmentsSanjay Zachariah displays the new hardwareplatform for the POS system.14TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTFIVE Y
83、EAR SELECTED FINANCIAL AND OPERATING HIGHLIGHTS Fiscal Year Ended(in thousands,except per share and operating data)December 29,December 30,January 1,December 26,December 27,200120002000*19981997Operating Results:Net sales$849,799$759,037$688,082$600,677$509,052Gross margin228,344200,407181,251154,63
84、8131,542Selling,general and administrative expenses 178,243156,535139,725120,734104,661Depreciation and amortization11,2549,8897,3115,3424,509Income from operations38,84733,98334,21528,56222,372Interest expense,net4,4946,3874,1043,2702,439Unusual item:gain on life insurance2,173-Income before income
85、 taxes36,52627,59630,11125,29219,933Income tax provision10,752 11,20612,23710,4928,172Net income$25,774$16,390$17,874$14,800$11,761Net income per share-basic(a)$2.92$1.87$2.04$1.69$1.34Net income per share-assuming dilution(a)$2.85$1.87$2.02$1.68$1.34Dividends declared per share-Operating Data:Gross
86、 margin26.9%26.4%26.3%25.7%25.8%Selling,general and administrative expenses 21.0%20.6%20.3%20.1%20.5%Income from operations4.6%4.5%5.0%4.7%4.4%Net income3.0%2.2%2.6%2.5%2.3%Number of stores:Beginning of year305273243228208New stores1835311522Closed stores-(3)(1)-(2)End of year323305273243228Number o
87、f relocated stores11111Number of remodeled stores(b)4-Total selling square footage at period end(c)4,164,1903,904,9583,448,3473,014,1962,806,864Average sales per store(in thousands)(d)$2,699$2,603$2,682$2,542$2,300Net sales per square foot of selling space$209$204$214$206$187Comparable store sales i
88、ncrease(e)3.8%.4%4.4%10.9%3.1%Balance Sheet Data(at end of period):Working capital$122,309$133,731$117,306$95,530$82,869Total assets338,482332,296302,630264,649224,080Long-term debt,less current portion(f)23,15762,95054,68337,13231,134Stockholders equity181,296155,036138,305119,976104,889*53-week fi
89、scal year(a)Basic net income per share is calculated based on the weighted average number of common shares outstanding applied to net income.Diluted net income per shareis calculated using the treasury stock method for options and warrants.(b)Includes remodelings costing more than$150,000.(c)Total s
90、elling square footage includes normal selling space and excludes office,stockroom,receiving space and outside selling space.(d)Average sales per store is calculated based on the weighted average number of days open in the applicable period.(e)Comparable store sales increases are calculated on a 52-w
91、eek basis,excluding relocations,using all stores open at least one year.(f)Long-term debt includes borrowings under the Companys principal revolving credit agreements,term loan agreements and amounts outstanding under its capital lease obligations,excluding the current portions of each.15TRACTOR SUP
92、PLY COMPANY 2001 ANNUAL REPORTMANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis describes certain factors affecting Tractor Supply Companys(the Company)results of operations for the three fiscal years ended December 29,2001 and
93、 its liquidity and capital resources.This discussion should be read inconjunction with the financial statements and notes thereto included elsewhere in this Annual Report.The following discussion andanalysis also contains certain historical and forward-looking information.The forward-looking stateme
94、nts are made pursuant to thesafe harbor provisions of the Private Securities Litigation Reform Act of 1995(the Act).All statements,other than statements of historical facts,which address activities,events or developments that the Company expects or anticipates will or may occur in thefuture,includin
95、g such things as future capital expenditures(including the amount and nature thereof),business strategy,expansion andgrowth of the Companys business operations and other such matters are forward-looking statements.To take advantage of the safeharbor provided by the Act,the Company is identifying cer
96、tain factors that could cause actual results to differ materially from thoseexpressed in any forward-looking statements,whether oral or written,made by or on behalf of the Company.All phases of the Companys operations are subject to influences outside its control.Any one,or a combination,of these fa
97、ctors couldmaterially affect the results of the Companys operations.These factors include general economic cycles affecting consumer spending,weather factors,operating factors affecting customer satisfaction,consumer debt levels,pricing and other competitive factors,the ability to attract,train and
98、retain highly qualified associates,the ability to identify suitable locations and negotiate favorable lease agreements on new and relocated stores,the timing and acceptance of new products in the stores,the mix of goods sold,the continuedavailability of favorable credit sources,capital market condit
99、ions in general and the seasonality of the Companys business.Forward-looking statements made by or on behalf of the Company are based on a knowledge of its business and the environment in which itoperates,but because of the factors listed above,actual results could differ materially from those refle
100、cted by any forward-lookingstatements.Consequently,all of the forward-looking statements made are qualified by these cautionary statements and there can be noassurance that the actual results or developments anticipated by the Company will be realized or,even if substantially realized,thatthey will
101、have the expected consequences to or effects on the Company or its business and operations.The Companys fiscal year ends on the Saturday closest to December 31.Fiscal years 2001 and 2000 consist of 52 weeks,while fiscal year 1999 consists of 53 weeks.OverviewSince its founding as a mail order tracto
102、r parts business in 1938,the Company has grown to be the largest operator of retail farm andranch stores in the United States.The Company supplies the daily farming and maintenance needs of its target customers:hobby,part-time and full-time farmers and ranchers,as well as rural customers,contractors
103、 and tradesmen.The Companys stores typicallyrange in size from 12,000 to 15,000 square feet of inside selling space and utilize at least as many square feet of outside selling space.An average store displays a comprehensive selection of 12,000 to 14,000 different products including farm maintenance
104、products(fencing,tractor parts and accessories,agricultural spraying equipment and tillage parts);animal and pet products(specialty feeds,supplements,medicines,veterinary supplies and livestock feeders);general maintenance products(air compressors,welders,generators,pumps,plumbing and tools);lawn an
105、d garden products(riding mowers,tillers and fertilizers);light truck equipment;andwork clothing.The stores are located in the outlying towns of major metropolitan markets and in rural communities.The Companys current and long-term growth strategy is built on a combination of(1)expanded geographic ma
106、rket presence,achievedthrough the opening of new retail stores at an approximate annualized rate of 8%to 10%unit growth and(2)enhanced financial performance through comparable store sales increases,achieved through aggressive merchandising programs with an everyday lowprices philosophy,supported by
107、strong customer service.Over the past eight fiscal years since the Companys initial public offering in February 1994(the Offering),the Company has opened177 new retail stores:13 in fiscal 1994,20 in fiscal 1995,23 in fiscal 1996,22 in fiscal 1997,15 in fiscal 1998,31 in fiscal 1999,35in fiscal 2000
108、and 18 in fiscal 2001.These new stores have increased the Companys market presence in the Southwest,primarily inTexas,and in the Southeast,primarily in Tennessee,Kentucky,North Carolina and Florida.This expansion brings the Companys totalstore count to 323(in 28 states)as of December 29,2001.The Com
109、pany has a base plan to open 25 stores in fiscal 2002(an approximate 8%unit growth rate)and,with the acquisition of certain real estate properties and lease rights from Quality Stores,Inc.,an additional 87 stores.Approximately 13 new stores are scheduled to open in the first quarter of fiscal 2002 w
110、ith an additional 94 storeopenings planned by the middle of the year.In total over the past eight fiscal years since the Offering,the Company has opened,relocated or remodeled 205 stores.16TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTMANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT
111、S OF OPERATIONSAdditionally,the Company has placed significant emphasis on its merchandising programs,evaluating the sales and profitability of itsproducts through detailed line reviews,vendor performance measures and modification of the overall product offerings.These efforts,coupled with a strong
112、marketing program and in-depth product knowledge training of store associates,have enhanced sales,improvedgross margins and generated improved overall financial performance.Seasonality and WeatherThe Companys business is highly seasonal.Historically,the Companys sales and profits have been the highe
113、st in the second andfourth fiscal quarters of each year due to the sale of seasonal products.The Company typically operates at a net loss in the first fiscalquarter of each year.Unseasonable weather,excessive rain,drought,and early or late frosts may also affect the Companys sales.TheCompany believe
114、s,however,that the impact of adverse weather conditions is somewhat mitigated by the geographic dispersion of itsstores.The Company experiences a buildup of inventory and accounts payable during its first fiscal quarter each year for purchases of seasonal product in anticipation of the April through
115、 June selling season and again during its third fiscal quarter in anticipation of theOctober through December selling season.The Companys unaudited quarterly operating results for each fiscal quarter of 2001 and 2000 are shown below(dollars in thousands,except per share amounts):FirstSecondThirdFour
116、thQuarterQuarterQuarterQuarterTotal2001Net sales$162,517$267,490$199,435$220,357$849,799Gross margin42,09571,79353,97260,484228,344Income(loss)from operations(1,565)23,4554,93312,02438,847Net income(loss)(1,849)15,6442,4259,55425,774Net income(loss)per share-basic(.21)1.78.281.082.92Net income(loss)
117、per share-assuming dilution$(.21)$1.76$.27$1.03$2.85FirstSecondThirdFourthQuarterQuarterQuarterQuarterTotal2000Net sales$147,482$232,341$175,478$203,736$759,037Gross margin37,60461,58545,11756,101200,407Income(loss)from operations(338)19,0623,61911,64033,983Net income(loss)(975)10,5461,1235,69616,39
118、0Net income(loss)per share-basic(.11)1.20.13.651.87Net income(loss)per share-assuming dilution$(.11)$1.20$.13$.65$1.8717TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTMANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSResults of OperationsThe following table sets forth,fo
119、r the periods indicated,certain items in the Companys Statements of Income expressed as a percentage of net sales:Fiscal Year EndedDecember 29,December 30,January 1,December 26,December 27,20012000200019981997Net sales100.0%100.0%100.0%100.0%100.0%Cost of merchandise sold73.173.673.774.374.2Gross ma
120、rgin26.926.426.325.725.8Selling,general and administrativeexpenses21.020.620.320.120.5Depreciation and amortization1.31.31.00.90.9Income from operations4.64.55.04.74.4Interest expense,net0.50.80.60.50.5Unusual item:gain on life insurance0.2-Income before income taxes4.33.74.44.23.9Income tax provisi
121、on1.31.51.81.71.6Net income3.0%2.2%2.6%2.5%2.3%Fiscal 2001 Compared to Fiscal 2000Net sales increased 12.0%to$849.8 million in fiscal 2001 from$759.0 million in fiscal 2000.This increase resulted from the opening of new stores as well as comparable store sales(calculated on a 52-week basis,excluding
122、 relocations,using all stores open atleast one year),which increased 3.8%for fiscal 2001.The increase in comparable store sales for fiscal 2001 was a result of new merchandising programs and reduced competition in certain markets,offset by general economic challenges in 2001 and the warmerweather pa
123、tterns in the fourth quarter of fiscal 2001.The Company opened 18 new stores and relocated one store in fiscal 2001.TheCompany opened 35 new stores,closed three stores and relocated one store in fiscal 2000.At December 29,2001,the Company operated 323 stores compared to 305 stores at the end of the
124、prior fiscal year.In fiscal 2002,the Company has a base plan to open 25 stores(an approximate 8%unit growth)and,with the acquisition of certainreal estate properties and lease rights from Quality Stores,Inc.,an additional 87 stores.Additionally,the Company plans to relocate10 to 12 stores in fiscal
125、2002,primarily in the third and fourth quarters.The gross margin rate increased 0.5 percentage point to 26.9%of sales in fiscal 2001 from 26.4%in fiscal 2000.This gross marginimprovement resulted from a reduction in product costs achieved through detailed product line reviews,improved product assort
126、mentsand other merchandising initiatives.As a percent of sales,selling,general and administrative expenses increased 0.4 percentage point to 21.0%for fiscal 2001 from 20.6%for fiscal 2000.On an absolute basis,selling,general and administrative expenses increased 13.9%to$178.2 million for fiscal 2001
127、from$156.5 million in fiscal 2000.The increase in expenses on a percentage-of-sales basis is primarily a result of increased investment in store level expenses(primarily payroll and training),higher incentive accruals,offset,in part,by greater leverage fromsame-store sales performance.The increase i
128、n absolute dollars is primarily attributable to costs associated with new store openings(new stores have higher occupancy costs,primarily rent,than the existing store base),as well as increased investment in store payroll,training,and higher incentive accruals.During fiscal 2001,the Company continue
129、d its major media advertising program which includes a national television campaign featuring a celebrity spokesperson,significantly expanded use of radio promotions and increased print advertising.This program ispartially funded each year through the support of the Companys vendor partners.TRACTOR
130、SUPPLY COMPANY 2001 ANNUAL REPORT18MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSDepreciation and amortization expense increased 13.8%over the prior year due mainly to costs associated with new and relocatedstores and remodeled existing stores.Net interest expe
131、nse decreased 29.6%in fiscal 2001 from fiscal 2000.The decrease in interest expense reflects reduced borrowingsunder the senior credit facility,primarily attributable to lower average inventory balances and improved same-store sales performance,as well as reduced short-term borrowing rates during th
132、e period.Exclusive of the non-taxable$2.1 million gain on the proceeds of life insurance and the$2.5 million reduction of previously accruedincome taxes,the Companys effective tax rate decreased to 38.6%for fiscal 2001 compared to 40.6%for fiscal 2000.The effectivetax rate decreased primarily due to
133、 a reduction in state income taxes.The Company reevaluated its tax exposure during the quarterended December 29,2001;as a result of the favorable resolution of certain tax issues,along with the closing of open tax years,theCompany reduced previously accrued income tax liabilities by$2.5 million.As a
134、 result of the foregoing factors,net income increased 57.3%to$25.8 million in fiscal 2001 from$16.4 million in fiscal 2000.Asa percent of sales,net income increased 0.8 percentage point to 3.0%of sales in fiscal 2001 from 2.2%of sales in fiscal 2000.Fiscal 2000 Compared to Fiscal 1999Net sales incre
135、ased 10.3%to$759.0 million in fiscal 2000 from$688.1 million in fiscal 1999.This increase resulted primarily fromnew store openings and relocations,and,to a lesser extent,a comparable store sales increase of.4%(calculated on a 52-week basis,excluding relocations,using all stores open at least one ye
136、ar),while impacted by the inclusion of an additional week of operations infiscal 1999(due to the Companys fiscal year-end policy).Comparable store sales performance was significantly affected by the saleof generators and other Y2K-related products in fiscal 1999.The Company substantially mitigated t
137、his impact through the successfulpromotion of special purchase merchandise selected for the maintenance needs of core customers.Also,the Company benefited fromfavorable cold weather in November and December,which prompted improved sales of winter workwear and heating products.Excluding the effect of
138、 generator and other Y2K-related sales,comparable store sales increased 2.9%over fiscal 1999.The Companyopened 35 new stores,closed three stores and relocated one store in fiscal 2000.The Company opened 31 new stores,closed one storeand relocated one store in fiscal 1999.At December 30,2000,the Comp
139、any operated 305 retail farm stores versus 273 stores at theend of the prior fiscal year.The gross margin rate increased 0.1 percentage point to 26.4%of sales in fiscal 2000 from 26.3%in fiscal 1999.In 1999,the Companyexperienced a significant change in the year-end mix of certain inventory items an
140、d achieved lower purchase costs for other inventoryitems.These factors contributed to a reduction in the expected LIFO provision and had the effect of increasing the 1999 gross marginrate by 0.3 percentage point.Exclusive of the favorable LIFO effect in 1999,the year 2000 gross margin improvement of
141、 0.4%resulted from a reduction in product costs achieved through detailed product line reviews as well as improved product assortmentsaccomplished through significant remerchandising efforts.As a percent of sales,selling,general and administrative expenses increased 0.3 percentage point to 20.6%for
142、fiscal 2000 from 20.3%for fiscal 1999.On an absolute basis,selling,general and administrative expenses increased 12.0%to$156.5 million for fiscal 2000from$139.7 million in fiscal 1999.The increase in expenses on a percentage-of-sales basis is primarily a result of costs associatedwith new stores as
143、well as the leverage loss attributable to the lower than anticipated comparable store sales performance.The increasein absolute dollars is primarily due to costs associated with new store openings(new stores have higher occupancy costs,primarilyrent,than the existing store base),as well as increased
144、 costs associated with the Companys expanded infrastructure(primarily largerdistribution facilities and store support service capacity).These increases were offset,to some extent,by lower incentive accruals,one less week of operating expenses(fiscal 2000 reflects 52 weeks of operations compared to f
145、iscal 1999 which is comprisedof 53 weeks)and a non-recurring expense of approximately$1 million in fiscal 1999 relating to the Companys relocation of two of itsdistribution centers.During fiscal 2000,the Company continued its major media advertising program,which includes a national television campa
146、ign featuring a celebrity spokesperson,significantly expanded use of radio promotions and increased print advertising.This program ispartially funded each year through the support of the Companys vendor partners.TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT19MANAGEMENT S DISCUSSION AND ANALYSIS OF FINAN
147、CIAL CONDITION AND RESULTS OF OPERATIONSDepreciation and amortization expense increased 35.3%over the prior year due mainly to costs associated with new and relocatedstores and increased investment in infrastructure(mainly the merchandise and warehouse management system).Net interest expense increas
148、ed 55.6%in fiscal 2000 from fiscal 1999.The increase in interest expense reflects additional borrowingsunder the senior credit facility to fund the Companys growth and expansion plans,resulting in a higher average outstanding debt balance in fiscal 2000 compared to fiscal 1999.The Companys effective
149、 tax rate remained unchanged at 40.6%for both fiscal 2000 and fiscal 1999.As a result of the foregoing factors,net income decreased 8.3%to$16.4 million in fiscal 2000 from$17.9 million in fiscal 1999.Asa percent of sales,net income decreased 0.4 percentage point to 2.2%of sales in fiscal 2000 from 2
150、.6%of sales in fiscal 1999.Liquidity and Capital ResourcesIn addition to normal operating expenses,the Companys primary ongoing cash requirements are those necessary for the Companysexpansion,remodeling and relocation programs,including inventory purchases and capital expenditures.The Companys prima
151、ryongoing sources of liquidity are funds provided from operations,commitments available under its credit agreements and short-termtrade credit.The Companys inventory and accounts payable levels typically build in the first and again in the third fiscal quarters inanticipation of the spring and fall
152、selling seasons.At December 29,2001,the Companys inventories had decreased$0.5 million to$222.0 million from$222.5 million at December 30,2000.This decrease was primarily attributable to improvements in inventory management achieved through an enhanced replenishment system(a 5.8%reduction in average
153、 inventory per store compared to December 30,2000).Short-term trade credit,which represents a source of financing for inventory,increased$10.7 million to$81.0 million at December 29,2001 from$70.3 million at December 30,2000.Trade credit arises from the Companys vendors granting extended payment ter
154、ms for inventory purchases.Payment terms vary from 30 days to 180 days depending on the inventory product.At December 29,2001,the Company had working capital of$122.3 million,which represented a$11.4 million decrease fromDecember 30,2000.This decrease resulted primarily from a decrease in inventory(
155、attributable mainly to the factors described above)with an increase in accounts payable and an increase in accrued expenses(mainly due to timing of payments,as well as higher incentive and insurance accruals),offset by an increase in prepaid expenses and other current assets(mainly construction-in-p
156、rogresscosts pertaining to planned sale/leaseback transactions respecting certain 2001 and 2002 new stores)and a decrease in current deferredincome taxes.At December 30,2000,the Company had working capital of$133.7 million,which represented a$16.4 million increasefrom January 1,2000.This increase re
157、sulted primarily from an increase in inventory without a corresponding increase in accountspayable,an increase in prepaid expenses and other current assets(mainly construction-in-progress costs pertaining to plannedsale/leaseback transactions respecting certain 2000 and 2001 new stores),an increase
158、in cash and cash equivalents,a decrease in incometaxes payable and a decrease in current deferred income taxes.In November 2000,the Company entered into a three-year unsecured senior revolving credit facility with Bank of America,N.A.,asagent for a lender group,(the Senior Credit Facility)whereby th
159、e Company may borrow up to$125 million.This credit facility wasused to refinance all outstanding indebtedness under the existing revolving credit agreement.(The Company amended its then exist-ing credit agreement in November 1999 to increase the maximum total commitments to$75 million.)At December 2
160、9,2001,theCompany had$15.1 million of borrowings outstanding under the Senior Credit Facility.The Company expects to continue borrowingamounts under the Senior Credit Facility from time to time to fund its growth and expansion programs and as a source of seasonalworking capital.After the close of fi
161、scal year 2001,the United States Bankruptcy Court approved a transaction for the sale of certain assets of QualityStores,Inc.,the Companys single largest national competitor.The Company purchased the real property for 24 stores,the lease rightsto 76 stores and the furniture and fixtures from 100 sto
162、res.Total consideration,including estimated transaction costs,was approximately$35 million.The Company may sell and leaseback 20 of the real properties and sell four properties with expected proceeds of approximately$23 million.Alternatively,the Company may mortgage the related properties or otherwi
163、se obtain long-termfinancing.The Company plans to open 87 of the locations as new Tractor Supply stores by the middle of fiscal 2002 and to relocateexisting Tractor Supply stores in nine other locations later in the same year.Capital expenditures to convert the stores to the TractorTRACTOR SUPPLY CO
164、MPANY 2001 ANNUAL REPORT20MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSSupply format are expected to be$12 to$13 million and inventories for the converted stores are expected to total between$55 and$60million.The Company believes that its cash flow from operat
165、ions,borrowings available under its Senior Credit Facility and short-termtrade credit will be sufficient to fund this expansion.With this transaction,the Company has committed to a store growth plan in fiscal 2002 which is approximately four times the historical unit store growth plan for a single y
166、ear.However,the Company has avoided the potential pitfalls of acquiring redundantheadquarters and information systems.Further,the Company did not acquire any inventory,thus avoiding the challenges of integrating similar product with dissimilar packaging into its existing stock,as well as avoiding th
167、e challenge of liquidating other products which conflicts with the Companys existing product offerings.Rather,the Company has selected only the geographic markets that it believes have the greatest potential(many of which were part of the Companys previously established near-term growthplan)and the
168、Company has already hired many store managers and district managers to operate these new stores.With this experienced retail workforce,the Company has developed an accelerated training program to complete the transition.Further,theCompany believes it has the needed distribution capacity at its prima
169、ry distribution center in Indiana to accommodate this increasedvolume.Organizational meetings with the Companys key vendor partners have been held,confirming a strong source of support andproduct supply,with extended payment terms and additional discounts.Enhancements to the Companys information sys
170、tems that havebeen made over the last three years should provide the necessary systems support for this aggressive growth.Finally,the required additions to other functional areas(e.g.merchandising,human resources and accounting)that are needed to maintain the appropriateinfrastructure for support ar
171、e also substantially in place.This aggressive expansion will occur in a more compressed timeframe than the Companys historical store growth.The Companyexpects to start receiving physical possession of the facilities in early March,with activities to renovate the facilities,train the personnel and st
172、ock the stores taking place at a very rapid pace.However,the Company has deployed numerous store set-up teamsto achieve the state of readiness required to enable all such stores to be opened by July 1,2002.The Company expects to incur nomore than the typical level of per-store training and pre-openi
173、ng costs associated with any store opening;however,due the more concentrated timeline of the pre-opening activity(approximately four months),the operating results are expected to be slightly dilutive for the full year.The timing of the completion of improvements to the new locations may make a signi
174、ficant difference in theresults of operations for the first half and full year.Operations provided net cash of$46.8 million in fiscal 2001,provided net cash of$10.2 million in fiscal 2000 and used net cash of$7.7 million in fiscal 1999.The generation of cash in fiscal 2001 resulted primarily from ne
175、t income as well as inventories decreasing at a faster rate than accounts payable compared to the prior year.The generation of cash in fiscal 2000 resulted primarilyfrom net income offset,in part,by inventories increasing at a faster rate than accounts payable compared to the prior year.Cash used in
176、 investing activities of$10.7 million,$16.7 million and$19.6 million for fiscal 2001,2000 and 1999,respectively,resulted primarily from capital expenditures for new,relocated and remodeled stores and for new merchandise and warehouse management systems,partially offset by proceeds from the sale of c
177、ertain properties(primarily land and buildings)and the liquidationof certain life insurance policies(in fiscal 2001).Financing activities in fiscal 2001 used$36.3 million in cash,which represented a$45.0 million decrease from the$8.7 million in cashprovided in fiscal 2000.This decrease resulted prim
178、arily from net repayments of$34.9 million under the revolving credit agreementin fiscal 2001 compared to net borrowings of approximately$11.9 million in fiscal 2000,as well as repayments of long-term debt of$5.6 million in fiscal 2001 compared to$3.0 million in fiscal 2000.This decrease was offset,i
179、n part,by net proceeds from life insurance benefits of$2.5 million in fiscal 2001 and$1.9 million in proceeds from issuance of common stock in fiscal 2001.Financingactivities in fiscal 2000 provided$8.7 million in cash,which represented a$7.4 million decrease from the$16.1 million in cash provided i
180、n fiscal 1999.This decrease resulted primarily from net borrowings of$11.9 million under the revolving credit agreementin fiscal 2000 compared to net borrowings of$19.1 million in 1999.The Companys capital additions were$13.6 million,$17.4 million and$20.4 million in fiscal 2001,2000 and 1999,respec
181、tively.Themajority of the capital additions were for store fixtures,equipment and leasehold improvements for new stores and remodeling of existing stores as well as the merchandise and warehouse management system.The Company expects that its capital expenditures forfiscal 2002 will be approximately$
182、18 million to$20 million for the base store openings plan of 25 new stores.Additionally,theCompany has spent approximately$35 million(including transaction costs)for certain assets and lease rights for certain retail storesTRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT21MANAGEMENT S DISCUSSION AND ANALYS
183、IS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSformerly operated by Quality Stores,Inc.(The Company has received a waiver of the applicable restrictive loan covenants from itsbank group for the transaction).This planned spending is predicated on the successful implementation of the Companys grow
184、th strategy through approximately 112 planned new store openings and ten to twelve relocations of existing stores.However,theCompany cannot predict with certainty the amount of such expenditures because such new stores may be constructed,leased oracquired from others.The estimated cash required to o
185、pen a new store is approximately$0.8 to$1.0 million,the majority of which isfor the initial acquisition of inventory and capital expenditures,principally leasehold improvements,fixtures and equipment,and thebalance of which is for store opening expenses.The Company believes that its cash flow from o
186、perations,borrowings available under the Senior Credit Facility and short-term tradecredit will be sufficient to fund the Companys operations and its capital expenditure plans,including store openings and renovations,over the next several years.LitigationThe Company is involved in various litigation
187、 arising in the ordinary course of business.In the opinion of management,after consultation with legal counsel,these matters will be resolved without material adverse effect on the Companys consolidated financialposition or results of operations.It is possible,however,that future results of operatio
188、ns for any particular quarterly or annual periodcould be materially affected by changes in circumstances relating to these proceedings.Market RisksThe Company is exposed to changes in interest rates primarily from its variable-rate,long-term debt arrangements.Under its currentpolicies,the Company us
189、es interest rate swaps to manage exposure to interest rate changes for a portion of its debt arrangements.Taking into account the effects of interest rate swaps designated as hedges,a hypothetical 100 basis point adverse move(decrease)ininterest rates along the entire interest rate yield curve would
190、 result in approximately$300,000 of additional interest expense and wouldnot impact the fair market value of the long-term debt.Although the Company cannot accurately determine the precise effect of inflation on its operations,it does not believe its sales orresults of operations have been materiall
191、y affected by inflation.The Company has been successful,in many cases,in reducing or mitigating the effects of inflation principally by taking advantage of vendor incentive programs,economies of scale from increasedvolume of purchases and selective buying from the most competitive vendors without sa
192、crificing quality.Recent SEC Disclosure GuidanceIn December 2001 and January 2002,the Securities and Exchange Commission issued financial reporting releases,FR-60,CautionaryAdvice Regarding Disclosure About Critical Accounting Policies and FR-61,Commission Statement about Management Discussionand An
193、alysis(MD&A)of Financial Condition and Results of Operations,respectively.FR-60 focuses on the need for more discussion about critical accounting policies.FR-61 focuses on additional disclosure relating to liquidity and capital resources,including off-balance sheet arrangements and related party tra
194、nsactions.The extent of the Companys off-balance sheet arrangementsare limited to letters of credit,operating leases for buildings and equipment for retail stores,distribution centers and offices(see Notes2 and 4 to the accompanying financial statements).The Companys only related party transactions
195、are capital lease arrangements onsix retail stores entered into in 1986(see Note 9 to accompanying financial statements).The Companys critical accounting policiesare disclosed in Note 1 to the accompanying financial statements.TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTMANAGEMENT S DISCUSSION AND ANAL
196、YSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS22Recent Accounting PronouncementsIn June 2001,the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No.142,Goodwill andOther Intangible Assets(SFAS 142).Under SFAS 142,goodwill amortization ceases when the ne
197、w standard is adopted.The newrule also requires an initial goodwill impairment assessment in the year of adoption and annual impairment tests thereafter.TheCompany adopted this Statement effective December 30,2001.At December 29,2001 the Company had unamortized negative goodwill of$175,000.Applicati
198、on of this Statement will result in the write-off of the remaining negative goodwill,increasing incomebefore income taxes by$175,000 in the first quarter of fiscal 2002.In August 2001,the Financial Accounting Standards Board issued Statement of Financial Standards No.144 Accounting for theImpairment
199、 or Disposal of Long-Lived Assets(SFAS 144)which provides clarifications of certain implementation issues withinSFAS 121,along with additional guidance on the accounting for the impairment or disposal of long-lived assets.SFAS 144 supersedesSFA 121 and applies to all long-lived assets(including disc
200、ontinued operations)and consequently amended APB 30 Reporting theEffects of Disposal of a Segment of a Business.SFAS 144 develops one accounting model(based on the model in SFAS 121)forlong-lived assets that are to be disposed of by sale,as well as addresses the principal implementation issues.SFAS
201、144 is effective forfinancial statements issued for fiscal years beginning after December 15,2001.The Company believes the adoption of this standardwill not have a material effect on the Companys financial position or results of operations.REPORT OF INDEPENDENT AUDITORSBoard of Directors and Stockho
202、ldersTractor Supply CompanyWe have audited the consolidated balance sheet of Tractor Supply Company as of December 29,2001,and the related consolidatedstatement of income,stockholders equity,and cash flows for the year then ended.These financial statements are the responsibility ofthe Companys manag
203、ement.Our responsibility is to express an opinion on these financial statements based on our audit.The consolidated balance sheet of Tractor Supply Company as of December 30,2000,and the related consolidated statements of income,stockholders equity,and cash flows for each of the two years in the per
204、iod ended December 30,2000,were audited by other auditorswhose report dated,January 24,2001,expressed an unqualified opinion on those statements.We conducted our audit in accordance with auditing standards generally accepted in the United States.Those standards require that weplan and perform the au
205、dit to obtain reasonable assurance about whether the financial statements are free of material misstatement.Anaudit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements.An audit alsoincludes assessing the accounting principles used and signif
206、icant estimates made by management,as well as evaluating the overallfinancial statement presentation.We believe that our audit provides a reasonable basis for our opinion.In our opinion,the 2001 consolidated financial statements referred to above present fairly,in all material respects,the consolida
207、tedfinancial position of Tractor Supply Company at December 29,2001,and the consolidated results of its operations and its cash flowsfor the year then ended in conformity with accounting principles generally accepted in the United States.Nashville,TennesseeJanuary 18,2002TRACTOR SUPPLY COMPANY 2001
208、ANNUAL REPORT23CONSOLIDATED STATEMENTS OF INCOME(in thousands,except per share amounts)For the fiscal year endedDecember 29,December 30,January 1,200120002000Net sales$849,799$759,037$688,082Cost of merchandise sold621,455558,63006,831Gross profit228,344200,407181,251Selling,general and administrati
209、ve expenses178,243156,535139,725Depreciation and amortization11,2549,8897,311Income from operations38,84733,98334,215Interest expense,net4,4946,3874,104Unusual item:gain on life insurance2,173-Income before income taxes36,52627,59630,111Income tax provision10,75211,20612,237Net income$25,774$16,390$
210、17,874Net income per share-basic$2.92$1.87$2.04Net income per share-assuming dilution$2.85$1.87$2.02The accompanying notes are an integral part of this statement.TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT24CONSOLIDATED BALANCE SHEETS(in thousands,except share amounts)December 29,December 30,20012000A
211、SSETSCurrent assets:Cash and cash equivalents$8,927$9,145Accounts receivable,net6,5167,683Inventories221,979222,535Prepaid expenses and other current assets14,5407,870Total current assets251,962247,233Land6,3656,449Buildings and improvements72,68267,985Machinery and equipment53,25049,304Construction
212、 in progress5,6991,605137,996125,343Accumulated depreciation and amortization(56,008)(44,855)Property and equipment,net81,98880,488Deferred income taxes2,7411,112Other assets1,7913,463Total assets$338,482$332,296LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable$80,974$70,294Acc
213、rued expenses42,94333,929Current maturities of long-term debt2,1423,145Current portion of capital lease obligations309279Income taxes currently payable3,1111,643Deferred income taxes1744,212Total current liabilities129,653113,502Revolving credit loan15,11750,007Other long-term debt5,53710,131Capital
214、 lease obligations2,5032,812Other long-term liabilities4,376808Total liabilities157,186177,260Commitments and contingenciesStockholders equity:Common stock,100,000,000 shares authorized;$.008 par value;8,937,651 and8,792,527 shares issued and outstanding in 2001and 2000,respectivelY7170Additional pa
215、id-in capital44,91643,009Retained earnings137,731111,957Accumulated other comprehensive loss,net(1,422)-Total stockholders equity181,296155,036Total liabilities and stockholders equity$338,482$332,296The accompanying notes are an integral part of this statement.CONSOLIDATED STATEMENTS OF CHANGES IN
216、STOCKHOLDERS EQUITYTRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT25(in thousands)AccumulatedAdditionalOtherTotalCommon Paid-inRetainedComprehensive StockholdersStock Capital EarningsLoss EquityStockholders equity atDecember 26,1998$70$42,213$77,693$0$119,976Issuance of common stock under employeestock pu
217、rchase plan(13,752 shares)298298Exercise of stock options(7,249 shares)157157Net income17,87417,874Stockholders equity atJanuary 1,20007042,66895,5670138,305Issuance of common stock under employeestock purchase plan(23,421 shares)341341Net income16,39016,390Stockholders equity atDecember 30,20007043
218、,009111,9570155,036Issuance of common stock under employeestock purchase plan(34,715 shares)380380Exercise of stock options(66,439 shares)11,2351,236Tax benefit on disqualifying dispositionof stock options292292Net income (Note 7)25,77425,774Other comprehensive loss related to interest rate swap agr
219、eement,net (1,422)(1,422)Comprehensive income24,352Stockholders equity atDecember 29,2001$71$44,916$137,731$(1,422)$181,296CONSOLIDATED STATEMENTS OF CASH FLOWSTRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT26(in thousands)For the fiscal year endedDecember 29,December 30,January 1,200120002000Cash flows f
220、rom operating activities:Net income$25,774$16,390$17,874Adjustments to reconcile net income to net cashprovided by(used in)operating activities:Depreciation and amortization11,2549,8897,311Gain on disposition of property and equipment(60)(241)(104)Gain on proceeds from life insurance(2,173)-Deferred
221、 income taxes(5,667)(3,258)(180)Change in assets and liabilities:Accounts receivable1,167(918)(1,187)Inventory556(15,210)(35,576)Prepaid expenses and other current assets(6,670)(3,025)1,456Accounts payable10,68010,530(1,136)Accrued expenses9,014(108)4,427Income taxes currently payable1,468(2,492)1Ot
222、her1,462(1,384)(605)Net cash provided by(used in)operating activities46,80510,173(7,719)Cash flows from investing activities:Capital expenditures(13,569)(17,358)(20,368)Proceeds from sale of property and equipment1,376634816Liquidation of life insurance policies1,499-Net cash used in investing activ
223、ities(10,694)(16,724)(19,552)Cash flows from financing activities:Net borrowings(repayment)under revolving credit agreement(34,890)11,88119,126Repayment of long term debt(5,597)(3,049)(2,960)Principal payments under capital lease obligations(279)(468)(560)Net proceeds from life insurance death benef
224、it2,529-Net proceeds from issuance of common stock1,908341455Net cash provided by(used in)financing activities(36,329)8,70516,061Net increase(decrease)in cash(218)2,154(11,210)Cash and cash equivalents at beginning of year9,1456,99118,201Cash and cash equivalents at end of year$8,927$9,145$6,991Supp
225、lemental disclosures of cash flow information:Cash paid during the year for:Interest$4,338$6,423$4,026Income taxes13,77016,32412,937Non-cash investing and financing activities:Capital lease-buildings-1,581The accompanying notes are an integral part of this statement.TRACTOR SUPPLY COMPANY 2001 ANNUA
226、L REPORT27Note 1-Significant Accounting Policies:Nature of BusinessTractor Supply Company is a specialty retailer,which supplies the daily farm and ranch maintenance needs of its target customers:hobby,part-time and full-time farmers and ranchers,as well as suburban customers,contractors and tradesm
227、en.The Company,whichwas founded in 1938,operated 323 retail farm stores in 28 states as of December 29,2001.Fiscal YearThe Companys fiscal year ends on the Saturday closest to December 31.Fiscal years 2001 and 2000 consist of 52 weeks,while fiscal year 1999 consists of 53 weeks.Principles of Consoli
228、dationThe accompanying consolidated financial statements include the accounts of the Company and its subsidiaries.All material intercompany accounts and transactions have been eliminated.Management EstimatesThe preparation of financial statements in conformity with accounting principles generally ac
229、cepted in the United States inherentlyrequires estimates and assumptions by management that affect the reported amounts of assets and liabilities,revenues and expensesand related disclosures.Actual results could differ from those estimates.Significant estimates and assumptions by management primaril
230、y impact the following key financial areas:Inventory ValuationThe Company identifies potentially excess and slow-moving inventory by evaluating turn rates and overall inventory levels.Excessquantities are identified through the application of benchmark turn targets and historical sales experience.Fu
231、rther,exposure to inadequate realization of carrying value is identified through analysis of gross margin achievement and markdown experience,incombination with all merchandising initiatives.Inventory ShrinkageThe Company estimates its expected shrinkage of inventory between physical inventory count
232、s by assessing the chain-wide average shrinkage experience rate,applied to the related periods sales volume.Such assessments are updated on a regular basis forthe most recent individual store experiences.Sales ReturnsThe Company generally honors customer refunds within 30 days of the original purcha
233、se,with the supporting receipt.TheCompany estimates its reserve for likely customer returns based on the average refund experience in relation to sales for the related period.Due to the seasonality of the Companys sales,the refund experience can vary,depending on the fiscal quarter ofmeasurement.Rev
234、enue RecognitionThe Company recognizes revenue at the time of customer purchase.A provision is made for expected refunds attributed to customerreturns.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT28Cash FlowsThe Company considers temporary cash investments,with
235、 a maturity of three months or less when purchased,to be cash equivalents.Fair Value of Financial InstrumentsThe Company has cash and cash equivalents,short-term trade receivables and payables and long-term debt instruments,including capital leases.The carrying values of cash and cash equivalents,tr
236、ade receivables and trade payables equal current fair value.Theterms of the Companys revolving credit agreement and term loan agreement include variable interest rates,which approximate currentmarket rates.(Notes 2 and 3)Derivative Instruments and Hedging ActivitiesThe Company has entered into an in
237、terest rate swap agreement as a means of managing its interest rate exposure.This agreement hasthe effect of converting certain of the Companys variable rate obligations to fixed rate obligations.Net amounts paid or received arereflected as adjustments to interest expense.On December 31,2000,the Com
238、pany adopted Statements of Financial Accounting Standards Nos.133,137,and 138(collectivelySFAS 133)pertaining to the accounting for derivatives and hedging activities.SFAS 133 requires the Company to recognize allderivative instruments in the balance sheet at fair value.The adoption of SFAS 133 impa
239、cts the accounting for the Companys interest rate swap agreement.The Companys interest rate swap agreement is designated as a cash flow hedge.Upon adoption of SFAS 133,the Company recorded the fair value of the interest rate swap in its consolidated balance sheet.Thereafter,the Company adjusts the c
240、arrying value of the interest rate swap to reflect its current fair value.The related gain or loss on the swapis deferred in stockholders equity(as a component of comprehensive income).The deferred gain or loss is recognized in income in theperiod in which the related interest rate payments being he
241、dged have been recognized as expense.However,to the extent that thechange in value of an interest rate swap contract does not perfectly offset the change in the interest rate payments being hedged,thatineffective portion is immediately recognized as expense.InventoriesInventories consist primarily o
242、f farm maintenance and animal and pet products,general maintenance products,lawn and garden products,light truck equipment and work clothing.All inventories are stated at the lower of cost or market,with cost being determined on the last-in,first-out(LIFO)method.If the first-in,first-out(FIFO)method
243、 of accounting for inventory had been used,inventories would have been approximately$6,631,000 and$5,056,000 higher than reported at December 29,2001 and December 30,2000,respectively.Freight CostsThe Company incurs various types of transportation and delivery costs in connection with inventory purc
244、hases and distribution.Suchcosts are included as a component of the overall cost of merchandise.Impairment of Long-Lived AssetsThe Company reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable.An impairment is recognized when the
245、sum of undiscounted estimated future cash flows expected to result from the useof the asset is less than the carrying value.Accordingly,when the Company commits to relocate or close a store,the estimated unrecoverable costs are charged to operating expenses.Such costs include the estimated loss on t
246、he sale of land and buildings,the bookvalue of abandoned fixtures,equipment and leasehold improvements,and a provision for the present value of future lease obligations,less estimated sub-lease income.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT29Property and
247、EquipmentThe Company owns the land and buildings for 65 of its stores.Property and equipment are carried at cost.The Companys buildings,furniture,fixtures,equipment and computer software are depreciated using the straight-line method over the estimated useful lives ofthe assets.Improvements to lease
248、d premises are amortized using the straight-line method over the life of the lease or the useful life ofthe improvement,whichever is shorter.The Companys property and equipment is depreciated using the following estimated usefullives:LifeBuildings30-35 yearsLeasehold improvements5 -15 yearsFurniture
249、,fixture and equipment5 -10 yearsComputer software3 -5yearsStore Opening CostsNon-capital expenditures incurred in connection with opening new stores are expensed as incurred.Advertising CostsAdvertising costs consist of expenses incurred in connection with newspaper circulars,television and radio,a
250、s well as newspaperadvertisements and other promotions.Expenses incurred are charged to operations at the time the related advertising first takes place.Advertising expenses,net of vendor-provided funding,for fiscal 2001,2000 and 1999 were approximately$5,012,000,$8,063,000,and,$8,806,000,respective
251、ly.Income TaxesThe Company accounts for income taxes using the liability method,whereby deferred tax assets and liabilities are determined basedon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and lawsthat will be in effe
252、ct when the differences are expected to be recovered or settled.Excess of Fair Value of Assets Acquired Over CostThe unallocated excess of fair value of assets acquired over cost(negative goodwill)of approximately$3,590,000 is being amortizedover 20 years on a straight-line basis.In June 2001,the Fi
253、nancial Accounting Standards Board issued Statement of Financial Accounting Standards No.142,Goodwill andOther Intangible Assets(SFAS 142).Under SFAS 142,goodwill amortization ceases when the new standard is adopted.The newrule also requires an initial goodwill impairment assessment in the year of a
254、doption and annual impairment tests thereafter.TheCompany adopted this Statement effective the first day of fiscal 2002.At December 29,2001 the Company had unamortized negative goodwill of$175,000.Application of this Statement will result in the write-off of the remaining negative goodwill,increasin
255、g income before income taxes by$175,000 in the first quarter of fiscal 2002.Stock-based Compensation PlansAs allowed by Statement of Financial Accounting Standards No.123(SFAS 123),Accounting for Stock-Based Compensation,theCompany has elected to account for its stock-based compensation plans under
256、the intrinsic value-based method of accounting prescribed by Accounting Principles Board Opinion No.25(APB No.25),Accounting for Stock Issued to Employees.Under APBNo.25,compensation expense would be recorded on the date of grant if the current market price of the underlying stock exceeded theexerci
257、se price.The Company has adopted the disclosure requirements of SFAS 123.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 30Net Income Per ShareStatement of Financial Accounting Standards No.128-Earnings per Share(SFAS 128
258、)requires companies with complex capitalstructures that have publicly held common stock or common stock equivalents to present both basic and diluted earning per share(EPS)on the face of the income statement.As provided by SFAS 128,basic EPS is calculated as income available to common stockholders d
259、ivided by the weighted average number of shares outstanding during the period.Diluted EPS is calculated using the treasury stock method for options and warrants(Note 8).Note 2-Revolving Credit Agreement:In November 2000,the Company entered into a three-year unsecured senior revolving credit facility
260、 with Bank of America,N.A.,asagent for a lender group,(the Senior Credit Facility)whereby the Company may borrow up to$125 million.This credit facility wasused to refinance all outstanding indebtedness under the existing$75 million revolving credit agreement.Of the total$125 millioncommitment at Dec
261、ember 29,2001,$3.9 million has been utilized for the issuance of letters of credit relating to insurance policies andimport merchandise.The outstanding borrowings under this Senior Credit Facility totaled$15.1 million at December 29,2001.Thebalance of funds available under the Senior Credit Facility
262、 may be utilized for borrowings or other letters of credit.All borrowingsunder the Senior Credit Facility bear interest,at the Companys option,at either the base rate of the agent(4.75%at December 29,2001)or the LIBOR rate(1.88%at December 29,2001)plus an additional amount ranging from.75%to 1.5%per
263、 annum,adjustedquarterly based on Company performance(1.00%at December 29,2001).The Company is also required to pay,quarterly in arrears,a commitment fee ranging from.20%to.35%per annum,adjusted quarterly based on Company performance,on the average dailyunused portion of the credit line.There are no
264、 compensating balance requirements associated with the Senior Credit Facility.In October 2001,the Company extended the Senior Credit Facility by one year,thus setting the maturity to November 2004.The Senior Credit Facility contains certain restrictions regarding additional indebtedness;capital expe
265、nditures;business operations;guarantees;investments;mergers,consolidations and sales of assets;transactions with subsidiaries or affiliates;and liens.In addition,the Company must comply with certain quarterly restrictions(based on a rolling four-quarters basis)regarding net worth,leverage ratio,fixe
266、d charge coverage and current ratio requirements.The Company was in compliance with all covenants at December 29,2001.In November 1999,the Company entered into an amendment(the Third Amendment)to its then existing revolving credit agreement,whereby the Company(i)increased the maximum total commitmen
267、ts available thereunder from$60 million to$75 million.There wereno changes to any of the other material terms and conditions of the revolving credit agreement as a result of the Third Amendment.Note 3-Other Long-term Debt:In June 1998,the Company entered into a loan agreement(the Loan Agreement)and
268、term note(the Term Note)pursuant to whichthe Company borrowed$15 million.Until amended as discussed below,the Term Note carried interest at the rate of 6.75%per annumuntil its maturity in June 2005.The Term Note requires monthly payments equal to$178,572,plus accrued interest,through June 2005.There
269、 are no compensating balance requirements associated with the Loan Agreement.The Loan Agreement is unsecured.InNovember 2000,in connection with the closing of the Senior Credit Facility,the Company amended the Loan Agreement and TermNote.The terms of the agreement were amended to provide that the ex
270、isting indebtedness would both mature and bear interest underthe same provision as that in the Senior Credit Facility and the restrictive covenants would be modified to be the same as those in theSenior Credit Facility(Note 2).The Company was in compliance with all covenants at December 29,2001.NOTE
271、S TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT31In April 1988,the Company issued notes(the Mortgage Notes)pursuant to a Note Agreement,which was amended in April 1991,February 1992 and July 1993(the Mortgage Loan Agreement).The Mortgage Notes bear interest at a mini
272、mum 10.32%rate untiltheir maturity in January 2004.The Mortgage Notes require monthly payments,including interest,of approximately$109,000 throughJanuary 2004.As of December 30,2000 the Mortgage Notes remaining balance was approximately$3,456,000,of which$1,004,000was included in current maturities
273、of long-term debt.In August 2001,the Company prepaid the remaining outstanding balance on theMortgage Notes.Note 4-Leases:The Company leases the majority of its office,warehouse/distribution and retail space,transportation equipment and other equipmentunder various noncancelable operating leases.The
274、 leases have varying terms and expire at various dates through October 2018.Thestore leases typically have initial terms of between 10 and 15 years,with one to three renewal periods of five years each,exercisableat the Companys option.Generally,most of the leases require the Company to pay taxes,ins
275、urance and maintenance costs.Total rent expense for fiscal 2001,2000 and 1999 was approximately$36,733,000,$31,620,000,and$25,453,000,respectively.Future minimum payments,by year and in the aggregate,under leases with initial or remaining terms of one year or more consist ofthe following(in thousand
276、s):CapitalOperatingLeasesLeases 2002$581$30,675200357929,512200453628,024200549727,090200616625,638Thereafter3,691135,669Total minimum lease payments6,050$276,608Amount representing interest(3,238)Present values of net minimum lease payments2,812Less:current portion(309)Long-term capital lease oblig
277、ations$2,503Note 5-Income Taxes:The provision for income taxes consists of the following(in thousands):200120001999Current tax expense:Federal$13,159$11,200$9,774State2,3583,2642,643Total current15,51714,46412,417Deferred tax expense:Federal(4,154)(2,337)(172)State(611)(921)(8)Total deferred(4,765)(
278、3,258)(180)Total provision$10,752$11,206$12,237NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT32Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and t
279、he amounts used for income tax purposes.Significant components of the Companys deferred taxassets and liabilities are as follows(in thousands):December 29,December 30,20012000Current tax assets:Inventory valuation$3,857$4,288Other3,2222,7797,0797,067Current tax liabilities:Inventory basis difference
280、6,55710,565Other6967147,25311,279Net current tax liabilities$174$4,212Non-current tax assets:Capital lease obligation basis difference$1,206$1,368Fixed assets basis difference904170Interest rate swap902-Other2,8262,3175,8383,855Non-current tax liabilities:Depreciation2,3451,868Capital lease assets b
281、asis difference7528753,0972,743Net non-current tax assets$2,741$1,112Management has evaluated the need for a valuation allowance for all,or a portion of the deferred tax assets and believes that all of thedeferred tax assets will more likely than not be realized through the future earnings of the Co
282、mpany.A reconciliation of the provision for income taxes to the amounts computed at the federal statutory rate is as follows(in thousands):200120001999Tax provision at statutory rate$12,784$9,659$10,539 Tax effect of:State income taxes,net of federal tax benefit1,3691,5771,721Life insurance proceeds
283、(926)-Previously accrued income taxes(2,500)-Amortization of negative goodwill(63)(73)(63)Other884340$10,752$11,206$12,237The Company reevaluated its tax exposure during the quarter ended December 29,2001 and,as a result of the favorable resolution ofcertain tax issues,along with the closing of open
284、 tax years,reduced previously accrued income tax liabilities by$2.5 million.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT33Note 6-Capital Stock:The authorized capital stock of the Company consists of common stock and preferred stock.The Company is authorized to
285、 issue100,000,000 shares of Common Stock.The Company is also authorized to issue 40,000 shares of Preferred Stock,with such designations,rights and preferences as may be determined from time to time by the Board of Directors.Note 7-Comprehensive Income:Comprehensive income includes net income and ch
286、anges in the fair value of the Companys interest rate swap agreement,which qualifies for hedge accounting.Comprehensive income totaled$24.4 million for fiscal 2001 compared to$16.4 million for fiscal 2000.The difference between net income and comprehensive income for fiscal 2001 is the result of a$1
287、.4 million unrealized loss(net of estimated tax benefit of$0.9 million)on the swap agreement recognized in accordance with SFAS 133.As of December 29,2001,theCompany expects to reclassify approximately$0.9 million of net losses on interest rate swaps from accumulated other comprehensiveloss to earni
288、ngs over the next twelve months.Note 8-Net Income Per Share:Net income per share is calculated as follows(in thousands,except per share amounts):2001Per ShareIncomeSharesAmountBasic net income per share:Net income$25,7748,824$2.92Dilutive stock options outstanding217Diluted net income per share$25,7
289、749,041$2.852000Per ShareIncomeSharesAmountBasic net income per share:Net income$16,3908,782$1.87Dilutive stock options outstanding0Diluted net income per share$16,3908,782$1.871999Per ShareIncomeSharesAmountBasic net income per share:Net income$17,8748,761$2.04Dilutive stock options outstanding75Di
290、luted net income per share$17,8748,836$2.02NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT34Note 9-Related Party Transactions:In 1986,the Company entered into capitalized sale-leaseback transactions with certain officers of the Company for seven of its stores.The
291、 Company sold,leased back and provided the financing for these properties at estimated fair values totaling$2,575,000.The related gains arising from the sale of these properties have been deferred and are being amortized on a straight-line basis over the termsof the related leases.Properties under c
292、apital leases acquired through sale-leaseback transactions have been reduced by the relateddeferred gains on the properties and are classified with property and equipment.The leases have basic terms of 20 years with optionsto renew for two successive five-year terms.The Company has an option to purc
293、hase the leased properties after December 31,1995.Rent payments under these leases were approximately$361,000 in fiscal 2001,$393,000 in 2000 and$425,000 in 1999.All the officers have repaid their outstanding obligations under these notes to the Company.In June 2000,the Company closed operations ato
294、ne of these seven facilities.In December 2000,the Company paid$200,000 to terminate the lease on the facility.The balance of theremaining six capitalized lease obligations,included in total capital lease obligations at December 29,2001,was$869,000.Prior to fiscal 2001,the Company leased its manageme
295、nt headquarters from a partnership in which certain stockholders of theCompany are general partners.In December 2000,the management headquarters was sold to an unrelated third party.The remaininglease term is six years,with the Company having exercised both remaining five-year renewal options in fis
296、cal 1996,with monthly rentset at$35,000 and$39,000 per month,respectively.Rent payments made to related parties under this lease were$385,000 in fiscal2000 and$420,000 in fiscal 1999.Note 10-Retirement Benefit Plan:The Company has a defined contribution benefit plan,the Tractor Supply Company Restat
297、ed 401(k)Retirement Plan(the Plan),which provides retirement and other benefits for the Companys employees.Employees become eligible for participation at age 21 andupon completion of 12 consecutive months of employment and 1,000 hours or more of service.The Company matches 100%of theemployees electi
298、ve contributions up to 3%of the employees compensation plus 50%of the employees elective contributions from3%to 7%of the employees compensation.In no event shall the total Company match made on behalf of the employee exceed 5%ofthe employees compensation in any Plan year.Through January 1,2000,the e
299、mployers contribution is vested 20%each year startingat two years of service.Effective January 1,2000 the Company amended the Plan(Amendment No.2).In accordance withAmendment No.2,the Company matches 100%of the employees elective contributions up to 3%of the employees compensationplus 50%of the empl
300、oyees elective contributions from 3%to 6%of the employees compensation.In no event shall the total Companymatch made on behalf of the employee exceed 4.5%of the employees compensation.Effective in fiscal 2000,all employer contributions are immediately 100%vested.Company contributions to the Plan dur
301、ing fiscal 2001,2000 and 1999 were approximately$1,022,000(net of applied forfeitures of$98,000),$521,000(net of applied forfeitures of$677,000),and$969,000,respectively.Note 11-Stock-based Compensation Plans:Fixed Stock Option PlanThe Company has stock option plans for officers,directors(including
302、non-employee directors)and key employees which reserves2,000,000 shares of common stock for future issuance.According to the terms of the plans,the per share exercise price of optionsgranted shall not be less than the fair market value of the stock on the date of grant and such options will expire n
303、o later than ten yearsfrom the date of grant.In the case of a stockholder owning more than 10%of the outstanding voting stock of the Company,the exercise price of an incentive stock option may not be less than 110%of the fair market value of the stock on the date of grant and suchoptions will expire
304、 no later than five years from the date of grant.Also,the aggregate fair market value of the stock with respect towhich incentive stock options are exercisable on a tax deferred basis for the first time by an individual in any calendar year may notexceed$100,000.Options granted generally vest one-th
305、ird each year beginning on the third anniversary date of the grant and expireafter ten years,provided,however,that options granted to non-employee directors vest one-third each year beginning on the firstanniversary of the grant.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001
306、ANNUAL REPORT35Plan activity is summarized as follows:Number ofWeighted AverageSharesExercise PriceOutstanding at December 26,1998514,750$19.21Exercised(7,249)$21.66Granted218,000$25.58Canceled(124,001)$20.91Outstanding at January 1,2000601,500$21.14Granted371,000$14.13Canceled(135,667)$19.02Outstan
307、ding at December 30,2000836,833$18.38Exercised(66,439)$18.60Granted396,000$13.43Canceled(119,683)$18.04Outstanding at December 29,2001 1,046,711$16.53The following table summarizes information concerning currently outstanding and exercisable options:Options OutstandingWeightedAverageWeightedRemainin
308、gAverageRange ofNumberContractualExerciseOptionsYearExercise PricesOutstandingLifePriceExercisable1994$21.50-$27.0011,0002.19$22.0011,0001995$21.31-$22.1318,0003.10$22.0718,0001996$21.38-$25.1341,0834.07$21.3841,0831997$17.75-$20.00145,3945.47$18.52100,3841998$14.44-$24.3114,8346.19$19.436,2351999$2
309、5.81-$26.75134,0007.06$25.847,7052000$14.94-$15.16264,0008.09$14.943,6302000$8.9550,0008.84$8.95-2001$13.43368,4009.08$13.43-1,046,711188,037Had compensation cost for the Companys stock option plan been determined based on the fair value at the grant dates for awards underthe plan consistent with th
310、e method prescribed by FASB Statement No.123,the Companys proforma net income and net income pershare,for fiscal 2001,2000 and 1999,would have been as follows(in thousands,except per share amounts):200120001999Net incomeAs reported$25,774$16,390$17,874Proforma$24,852$15,667$17,179Net income per shar
311、e-basicAs reported$2.92$1.87$2.04Proforma$2.82$1.79$1.96Net income per share-dilutedAs reported$2.85$1.87$2.02Proforma$2.75$1.79$1.94NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT36The fair value of each option grant is estimated on the date of grant using the B
312、lack-Scholes option-pricing model with the followingweighted-average assumptions.200120001999Expected volatility43.8%39.8%37.8%Risk-free interest rate5.1%5.5%6.5%Average expected life(years)7.5 7.257.5Dividend yield0%0%0%Weighted average fair value$7.43$7.11$12.95Employee Stock Purchase PlanThe Comp
313、any provides an Associate Stock Purchase Plan(the ASPP)whereby eligible employees of the Company have the opportunity to purchase,through payroll deductions,shares of common stock of the Company at a 15%discount.Pursuant to the termsof the ASPP,the Company issued 34,715,23,421and 13,752 shares of co
314、mmon stock in fiscal 2001,2000 and 1999,respectively.Note 12-Gain on Proceeds from Life Insurance:In April 2001,a former executive of the Company,on whom the Company carried a life insurance policy,passed away.As a result ofthe related coverage,the Company realized a$2.1 million gain on the benefit
315、proceeds.Note 13-Litigation:The Company is involved in various litigation arising in the ordinary course of business.In the opinion of management,after consultation with legal counsel,these matters will be resolved without material adverse effect on the Companys consolidated financial position or re
316、sults of operations.It is possible,however,that future results of operations for any particular quarterly or annual period could be materially affected by changes in circumstances relating to these proceedings.Note 14-Subsequent Event:On December 31,2001,the Company,through a recently formed joint v
317、enture with Great American Group,Gordon Brothers RetailPartners,LLC and DJM Asset Management LLC,was the successful bidder at a liquidation bankruptcy auction for the buildings,improvements,fixtures and lease rights of certain retail stores formerly operated by Quality Stores,Inc.,a debtor and debto
318、r in possession under Chapter 11 of the United States Bankruptcy Code.The bid,which has been approved by the United States BankruptcyCourt for the Western District of Michigan,provides for the Joint Venture to act as exclusive agent for the disposition of substantiallyall of the store assets located
319、 in New York,Pennsylvania,Virginia,Maryland,West Virginia,Delaware,Kentucky,Ohio,Indiana andMichigan.The bid totaled$34 million and was funded entirely through the Senior Credit Facility.Under its agreement with the other joint venture partners,the Company has agreed to purchase the buildings for 24
320、 retail stores,toassume the building lease rights for 76 additional retail stores and to purchase the related equipment,furniture and fixtures.After acomplete liquidation of the existing inventory by other members of the joint venture,the Company expects to reopen 87 retail storesin its own format b
321、y the middle of fiscal 2002,to relocate existing stores in nine other locations and to sell four of the properties.BOARD OF DIRECTORS AND OFFICERSTRACTOR SUPPLY COMPANY 2001 ANNUAL REPORT37Joseph H.Scarlett,Jr.Chairman of the Board and Chief Executive OfficerJames F.WrightPresident and Chief Operati
322、ng OfficerGerald W.BraseSenior Vice President-MerchandisingCalvin B.MassmannSenior Vice President-Chief Financial Officer and TreasurerStanley L.RutaSenior Vice President-Store OperationsJohn W.AtkinsVice President-Information TechnologyBlake A.FohlVice President-MarketingMark D.GillmanVice Presiden
323、t-Store OperationsLawrence GoldbergVice President-LogisticsStephen E.HullVice President-Real EstateDavid C.LewisVice President-Controller and Corporate SecretaryGary M.MagoniVice President-Store OperationsThomas P.ParrishVice President-Divisional Merchandise ManagerKimberly D.VellaVice President-Hum
324、an ResourcesOfficersBoard of DirectorsJoseph H.Scarlett,Jr.Chairman of the Board and Chief Executive OfficerTractor Supply CompanyThomas O.FloodRetired Senior Vice PresidentTractor Supply CompanyJoseph D.Maxwell(3)Retired Vice PresidentTractor Supply CompanyS.P.Braud(1)*(2)(3)(4)Retired Chief Financ
325、ial OfficerService Merchandise Company,Inc.andPresident and Director,Braud Design/Build,Inc.Gerard E.Jones(1)(2)(3)*Of Counsel toShipman&Goodwin LLPSam K.Reed(1)(2)*(4)*Vice Chairman and DirectorKellogg CompanyJoseph M.Rodgers(1)(2)(4)Chairman of the Board The JMR Group,an investment firm,and former
326、 U.S.Ambassador to France(1)Audit Committee(3)Nominating Committee(2)Compensation Committee (4)Corporate Governance*Committee ChairmanCommitteeTractor Supply Senior Executives:Jerry Brase,Stan Ruta,Jim Wright,Joe Scarlett and Cal Massmann.CORPORATE INFORMATIONTRACTOR SUPPLY COMPANY 2001 ANNUAL REPOR
327、T38Corporate Address:Tractor Supply Company 320 Plus Park BoulevardNashville,Tennessee 37217(615)366-4600Transfer Agent and RegistrarEquiServe Trust Company,N.A.P.O.Box 43010Providence,RI 02940-3010(781)575-3400Independent AuditorsErnst&Young LLPBank of America Plaza414 Union Street,Suite 2100Nashvi
328、lle,Tennessee 37219Stock Exchange ListingThe Nasdaq National MarketTicker Symbol:TSCOInternet Address:Annual MeetingThe Annual Meeting ofStockholders will be held at 10:00 a.m.,April 18,2002 at theCompanys Store Support Center,320 Plus Park Boulevard,Nashville,Tennessee,37217Number of StockholdersAs
329、 of January 31,2002 there wereapproximately 76 stockholders ofrecord.This number excludesindividual stockholders holdingstock under nominee security position listings.Form 10-KA copy of the Companys AnnualReport on Form 10-K,as filedwith the Securities and Exchange Commission,will be sent to anystoc
330、kholder upon written request tothe Company.Quarterly Stock Price RangeHigh LowFiscal 2001:First Quarter$14.94$8.50Second Quarter$16.45$13.50Third Quarter$24.48$14.80Fourth Quarter$34.98$17.47High LowFiscal 2000:First Quarter$21.00$14.63Second Quarter$22.00$12.00Third Quarter$17.19$9.69Fourth Quarter
331、$11.06$6.50The Tractor Supply Flag Corps prepares to raise“Old Glory”at the Flag Dedication and Ceremony on November 9,2001.39THIS IS TRACTOR SUPPLY COMPANYTRACTOR SUPPLY COMPANY 2001 ANNUAL REPORTTractor Supply stores nationwide showed theirsupport after the tragic events of September 11.In July of
332、 2001,President George W.Bush met with representatives of the farmingand ranching industry at the Billings,Montana Tractor Supply store.Joe Scarlett and senior management burst through a banner during the Vendor Conference to“pump”up the vendor partners.You ll KeepHumming Our TuneWhy?Because weve go
333、t every-thing you need to get the job done.So whether its farm supplies,petsupplies,horse feed,power equip-ment,or work clothing,stop byTractor Supply and see why werethe largest farm and ranch storechain in America.For more information on TractorSupply Company,please call us at615-366-4600,or check out ourwebsite at Whether youown one acre or 1,000-George Strait
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
