NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) At January 31, 2004 amounts included in the balance sheet related to the variable-interest entity are as follows: The Company repaid the variable-interest entity  debt in March 2004 with borrowings from the Facility (see Note 5). As a result of the repayment of the variable- interest entity debt, the assets of the variable-interest entity were transferred to the Company. The following table reconciles reported net income and net income per share to net income and net income per share that would have been recorded if FIN 46 were effective for the year ended December 31, 2002: The following table sets forth certain items from the Company’s unaudited consolidated statements of operations for each quarter of fiscal year 2004 and 2003. The unaudited information has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this report and includes all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the financial data shown. The operating results for any quarter are not necessarily indicative of results for a full year or for any future period. 48 DOLLAR TREE STORES, INC. • 2004 ANNUAL REPORT First Second Third Fourth Quarter Quarter Quarter Quarter Fiscal 2004: Net sales $ 710,330 $ 704,234 $ 723,967 $ 987,478 Gross profit 253,036 250,373 258,399 350,731 Operating income 58,659 49,084 53,589 132,219 Net income 35,150 29,592 31,854 83,654 Diluted net income per share 0.31 0.26 0.28 0.74 Stores open at end of quarter 2,579 2,612 2,674 2,735 Comparable store net sales change (0.4%) (0.2%) 0.7% 0.5% Fiscal 2003: Net sales $ 615,568  $ 626,028  $ 665,211  $ 893,065  Gross profit 219,186  222,505  244,997  331,725  Operating income 54,491  47,600  60,365  131,141  Net income 32,795  28,799  36,161  79,828  Diluted net income per share 0.29  0.25  0.31  0.69  Stores open at end of quarter 2,319  2,468  2,511  2,513  Comparable store net sales change 2.2% 5.1% 1.7% 1.6% (1) Easter was observed on April 11, 2004 and April 20, 2003. NOTE 13 – QUARTERLY FINANCIAL INFORMATION (Unaudited) Year Ended December 31, 2002  Reconciliation of net income: Net income $154,647  Less: Depreciation, amortization and deferred rent effect (net of tax) 4,121  Adjusted net income $150,526  Basic net income per share: Net income available to common shareholders $ 1.36  Depreciation, amortization and deferred rent effect (net of tax) (0.04) Adjusted net income $ 1.32  Diluted net income per share: Net income available to common shareholders $ 1.35  Depreciation, amortization and deferred rent effect (net of tax) (0.04) Adjusted net income $ 1.31  January 31, 2004 Property and equipment, net $114,426 Long-term debt, excluding current portion 142,568 Other assets, net 639