Ross Stores (ROST)

Financing Activities

During the nine month periods ended November 1, 2008 and November 3, 2007, our liquidity and capital requirements were provided by available cash and investment balances, cash flows from operations and trade credit. Our buying offices, our corporate headquarters, one entire distribution center, one trailer parking lot, portions of two other distribution centers, and all but two of our store locations are leased and, except for certain leasehold improvements and equipment, do not represent capital investments. We own three distribution centers which were located in Carlisle, Pennsylvania, Moreno Valley, California, and Fort Mill, South Carolina.

Under our $600.0 million two-year stock repurchase program announced in January 2008, we repurchased 7.0 million shares of common stock for an aggregate purchase price of approximately $231.4 million during the nine month period ended November 1, 2008. We repurchased 5.0 million shares of common stock for approximately $152.6 million during the nine month period ended November 3, 2007.

For the nine month periods ended November 1, 2008 and November 3, 2007, dividends paid were $37.2 million and $30.7 million, respectively.

Short-term trade credit represents a significant source of financing for merchandise inventory. Trade credit arises from customary payment terms and trade practices with our vendors. We regularly review the adequacy of credit available to us from all sources and expect to be able to maintain adequate trade, bank and other credit lines to meet our capital and liquidity requirements, including lease payment obligations in 2008.

We estimate that cash flows from operations, bank credit lines and trade credit are adequate to meet our operating cash needs, fund our planned capital investments, repurchase common stock and make quarterly dividend payments for at least the next twelve months.

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Financing Activities

During the six-month periods ended August 2, 2008 and August 4, 2007, our liquidity and capital requirements were provided by available cash and investment balances, cash flows from operations and trade credit. Our buying offices, our corporate headquarters, one entire distribution center, one trailer parking lot, portions of two other distribution centers, and all but two of our store locations are leased and, except for certain leasehold improvements and equipment, do not represent capital investments. We own three distribution centers in Carlisle, Pennsylvania, Moreno Valley, California, and Fort Mill, South Carolina.

Under our $600.0 million two-year stock repurchase program announced in January 2008, we repurchased 4.6 million shares of common stock for an aggregate purchase price of approximately $152.6 million during the six-month period ended August 2, 2008. We repurchased 3.1 million shares of common stock for approximately $100.6 million during the six month period ended August 4, 2007.

For the six-month periods ended August 2, 2008 and August 4, 2007, dividends paid were $24.9 million and $20.5 million, respectively.

Short-term trade credit represents a significant source of financing for merchandise inventory. Trade credit arises from customary payment terms and trade practices with our vendors. We regularly review the adequacy of credit available to us from all sources and expect to be able to maintain adequate trade, bank and other credit lines to meet our capital and liquidity requirements, including lease payment obligations in 2008.

We estimate that cash flows from operations, bank credit lines and trade credit are adequate to meet our operating cash needs, fund our planned capital investments, repurchase common stock and make quarterly dividend payments for at least the next twelve months.

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Financing Activities

During the three-month periods ended May 3, 2008 and May 5, 2007, our liquidity and capital requirements were provided by available cash and investment balances, cash flows from operations and trade credit. All but two of our store locations, our buying offices, our corporate headquarters, and one distribution center are leased and, except for certain leasehold improvements and equipment, do not represent capital investments. We own three distribution centers in Carlisle, Pennsylvania, Moreno Valley, California, and Fort Mill, South Carolina.

Under our $600.0 million two-year stock repurchase program announced in January 2008, we repurchased 2.5 million shares of common stock for an aggregate purchase price of approximately $77.2 million during the three-month period ended May 3, 2008. We repurchased 1.5 million shares of common stock for approximately $50.9 million during the three month period ended May 5, 2007.

For the three-month periods ended May 3, 2008 and May 5, 2007, dividends paid were $12.5 million and $10.3 million, respectively.

Short-term trade credit represents a significant source of financing merchandise inventory. Trade credit arises from customary payment terms and trade practices with our vendors. We regularly review the adequacy of credit available to us from all sources and expect to be able to maintain adequate trade, bank and other credit lines to meet our capital and liquidity requirements, including lease payment obligations in 2008.

We estimate that cash flows from operations, bank credit lines and trade credit are adequate to meet our operating cash needs, fund our planned capital investments, repurchase common stock and make quarterly dividend payments for at least the next twelve months.

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Financing Activities

During fiscal 2007, 2006 and 2005, our liquidity and capital requirements were provided by cash flows from operations, trade credit, and issuance of senior notes. All but two of our store locations, our buying offices, our corporate headquarters, and one distribution center are leased and, except for certain leasehold improvements and equipment, do not represent long-term capital investments. We own three distribution centers in Carlisle, Pennsylvania, Moreno Valley, California, and Fort Mill, South Carolina.

In November 2005, we announced that our Board of Directors authorized a two-year stock repurchase program of up to $400 million for 2006 and 2007. We repurchased 6.9 million and 7.1 million shares of common stock for aggregate purchase prices of approximately $200 million in both 2007 and 2006. These repurchases were funded by cash flows from operations.

In March 2006, we repaid our $50 million term debt in full. In October 2006, we entered into a Note Purchase Agreement with various institutional investors for $150 million of unsecured, senior notes. See “Senior Notes” below for more information.

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Financing Activities

During fiscal 2007, 2006 and 2005,
our liquidity and capital requirements were provided by cash flows from
operations, trade credit, and issuance of senior notes. All but two of our store
locations, our buying offices, our corporate headquarters, and one distribution
center are leased and, except for certain leasehold improvements and equipment,
do not represent long-term capital investments. We own three distribution
centers in Carlisle, Pennsylvania, Moreno Valley, California, and Fort Mill,
South Carolina.

In November 2005, we announced
that our Board of Directors authorized a two-year stock repurchase program of up
to $400 million for 2006 and 2007. We repurchased 6.9 million and 7.1 million
shares of common stock for aggregate purchase prices of approximately $200
million in both 2007 and 2006. These repurchases were funded by cash flows from
operations.

In March 2006, we repaid our $50
million term debt in full. In October 2006, we entered into a Note Purchase
Agreement with various institutional investors for $150 million of unsecured,
senior notes. See “Senior Notes” below for more information.

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Financing Activities

During fiscal 2006, 2005 and 2004, our liquidity and capital requirements were provided by cash flows from operations, bank credit facilities, trade credit, and issuance of senior notes. Substantially all of our store locations, our buying offices, our corporate headquarters, and one distribution center are leased and, except for certain leasehold improvements and equipment, do not represent long-term capital investments. We own three distribution centers in Carlisle, Pennsylvania, Moreno Valley, California, and Fort Mill, South Carolina.

In November 2005, we announced that our Board of Directors authorized a new two-year stock repurchase program of up to $400 million for 2006 and 2007. We repurchased 7.1 million shares of common stock for an aggregate purchase price of approximately $200 million in 2006. In January 2004, our Board of Directors authorized a stock repurchase program of up to $350 million for 2004 and 2005. We repurchased 6.4 million and 6.5 million shares of common stock for aggregate purchase prices of approximately $175 million in both 2005 and 2004, respectively. These repurchases were funded by cash flows from operations.

In March 2006, we repaid our $50.0 million term debt in full. In October 2006, we entered into a Note Purchase Agreement with various institutional investors for $150.0 million of unsecured, senior notes. See “Senior Notes” below for more information.

In January 2007, the Company’s Board of Directors declared a quarterly cash dividend payment of $.075 per common share, payable on or about March 30, 2007. Our Board of Directors declared quarterly cash dividends of $.06 per common share in January, May, August and November 2006, $.06 per common share in November 2005, and cash dividends of $.05 per common share in January, May and August 2005.

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Financing Activities

During the nine-month periods ended October 28, 2006 and October 29, 2005, our liquidity and capital requirements were provided by cash flows from operations and trade credit.  Substantially all of our store locations, buying offices, our corporate headquarters, and one distribution center are leased and, except for certain leasehold improvements and equipment, do not represent long-term capital investments.  We own our distribution centers in Carlisle, Pennsylvania, Moreno Valley, California, and Fort Mill, South Carolina. 

In March 2006, we repaid our $50.0 million term debt outstanding as of January 28, 2006 in full.  In May 2006, we exercised our option to purchase our Fort Mill, South Carolina distribution center for $87.3 million. 

We repurchased 5.4 million and 4.9 million shares of common stock for an aggregate purchase price of approximately $147.7 million and $133.0 million during the nine-month periods ended October 28, 2006 and October 29, 2005, respectively.  These repurchases were funded by cash flows from operations.

Short-term trade credit represents a significant source of financing for investments in merchandise inventory.  Trade credit arises from customary payment terms and trade practices with our vendors.  We regularly review the adequacy of credit available to us from all sources and expect to be able to maintain adequate trade, bank and other credit lines to meet our capital and liquidity requirements, including lease obligations in 2006.

In October 2006, we entered into a Note Purchase Agreement with various institutional investors for $150.0 million of unsecured, senior notes.  The notes will be issued in two series.  The series A notes will be for an aggregate of $85.0 million, will be due in December 2018, and will bear interest at a rate of 6.38%.  The series B notes will be for an aggregate of $65.0 million, will be due in December 2021, and will bear interest at a rate of 6.53%.  Issuance of the notes and funding is expected to occur in December 2006.

The table below presents our significant contractual payment obligations as of October 28, 2006:

Financing Activities

During the six-month periods ended July 29, 2006 and July 30, 2005, our liquidity and capital requirements were provided by cash flows from operations, bank credit facilities and trade credit.  Substantially all of our store locations, buying offices, our corporate headquarters, and one distribution center are leased and, except for certain leasehold improvements and equipment, do not represent long-term capital investments.  We own our distribution centers in Carlisle, Pennsylvania, Moreno Valley, California, and Fort Mill, South Carolina. 

In March 2006, we repaid our $50.0 million term debt outstanding as of January 28, 2006 in full.  In May 2006, we exercised our option to purchase our Fort Mill, South Carolina distribution center for $87.3 million. 

We repurchased 3.6 million and 3.2 million shares of common stock for an aggregate purchase price of approximately $98.9 million and $89.0 million during the six-month periods ended July 29, 2006 and July 30, 2005, respectively.  These repurchases were funded by cash flows from operations.

Short-term trade credit represents a significant source of financing for investments in merchandise inventory.  Trade credit arises from customary payment terms and trade practices with our vendors.  We regularly review the adequacy of credit available to us from all sources and expect to be able to maintain adequate trade, bank and other credit lines to meet our capital and liquidity requirements, including lease obligations in 2006.

We are evaluating alternative sources of financing for the $50.0 million term debt and the $87.3 million Fort Mill, South Carolina distribution center.  We have received expressions of interest to purchase an aggregate of $150 million of unregistered senior notes issuable in 12 and 15 year tranches at a weighted average interest rate of 6.45%.  Completion of any transaction remains subject to the purchasers’ due diligence and to finalization and execution of definitive agreements, which is expected to occur in our third quarter.  The settlement of the transaction is anticipated to occur in our fourth quarter.

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