10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 26, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number   000-23314

TRACTOR SUPPLY COMPANY

(Exact Name of Registrant as Specified in Its Charter)

Delaware	13-3139732
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

5401 Virginia Way, Brentwood, Tennessee 37027

(Address of Principal Executive Offices and Zip Code)

(615) 440-4000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☑    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes ☐   No ☑

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.008 par value	TSCO	NASDAQ Global Select Market

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Class	Outstanding at September 26, 2020
Common Stock, $0.008 par value	116,497,394

TRACTOR SUPPLY COMPANY

INDEX

		Page No.
PART I.	Financial Information	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (unaudited) – September 26, 2020, December 28, 2019, and September 28, 2019	3
	Condensed Consolidated Statements of Income (unaudited) – For the Fiscal Three and Nine Months Ended September 26, 2020 and September 28, 2019	4
	Condensed Consolidated Statements of Comprehensive Income (unaudited) – For the Fiscal Three and Nine Months Ended September 26, 2020 and September 28, 2019	5
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) – For the Fiscal Three and Nine Months Ended September 26, 2020 and September 28, 2019	6
	Condensed Consolidated Statements of Cash Flows (unaudited) – For the Fiscal Nine Months Ended September 26, 2020 and September 28, 2019	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
PART II.	Other Information	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
Signature		34

Page 2

PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

TRACTOR SUPPLY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(Unaudited)

	September 26, 2020		December 28, 2019		September 28, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	1,111,986	$	84,241	$	82,640
Inventories	1,915,040		1,602,781		1,812,772
Prepaid expenses and other current assets	136,098		100,865		104,486
Income taxes receivable	7,838		—		5,600
Total current assets	3,170,962		1,787,887		2,005,498
Property and equipment, net	1,178,625		1,163,956		1,143,071
Operating lease right-of-use assets	2,354,196		2,188,802		2,133,238
Goodwill and other intangible assets	124,492		124,492		124,492
Deferred income taxes	3,581		—		—
Other assets	28,941		24,131		22,997
Total assets	$	6,860,797	$	5,289,268	$	5,429,296
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,056,911	$	643,036	$	679,791
Accrued employee compensation	120,361		39,755		49,236
Other accrued expenses	274,244		247,690		218,774
Current portion of long-term debt	380,000		30,000		30,000
Current portion of finance lease liabilities	4,407		4,036		3,884
Current portion of operating lease liabilities	294,826		277,099		270,038
Income taxes payable	1,914		5,984		—
Total current liabilities	2,132,663		1,247,600		1,251,723
Long-term debt	529,264		366,480		613,885
Finance lease liabilities, less current portion	32,948		30,389		29,174
Operating lease liabilities, less current portion	2,171,773		2,001,162		1,966,363
Deferred income taxes	—		153		1,888
Other long-term liabilities	118,283		76,361		74,441
Total liabilities	4,984,931		3,722,145		3,937,474
Stockholders’ equity:
Preferred stock	—		—		—
Common stock	1,398		1,389		1,388
Additional paid-in capital	1,059,687		966,698		950,908
Treasury stock	(3,277,215)		(3,013,996)		(2,970,654)
Accumulated other comprehensive (loss)/income	(5,867)		199		73
Retained earnings	4,097,863		3,612,833		3,510,107
Total stockholders’ equity	1,875,866		1,567,123		1,491,822
Total liabilities and stockholders’ equity	$	6,860,797	$	5,289,268	$	5,429,296

Preferred Stock (shares in thousands): $1.00 par value; 40 shares authorized; no shares were issued or outstanding during any period presented.

Common Stock (shares in thousands): $0.008 par value; 400,000 shares authorized at all periods presented. 174,793, 173,608, and 173,465 shares issued; 116,497, 118,165, and 118,480 shares outstanding at September 26, 2020, December 28, 2019, and September 28, 2019, respectively.

Treasury Stock (at cost, shares in thousands): 58,296, 55,443, and 54,985 shares at September 26, 2020, December 28, 2019, and September 28, 2019, respectively.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Page 3

TRACTOR SUPPLY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(Unaudited)

	For the Fiscal Three Months Ended				For the Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net sales	$	2,606,572	$	1,984,144	$	7,742,087	$	6,160,146
Cost of merchandise sold	1,658,615		1,289,904		4,976,068		4,030,177
Gross profit	947,957		694,240		2,766,019		2,129,969
Selling, general and administrative expenses	641,129		482,604		1,794,924		1,432,603
Depreciation and amortization	54,651		49,819		158,634		144,584
Operating income	252,177		161,817		812,461		552,782
Interest expense, net	7,208		4,900		20,695		15,006
Income before income taxes	244,969		156,917		791,766		537,776
Income tax expense	54,359		34,784		178,701		119,601
Net income	$	190,610	$	122,133	$	613,065	$	418,175
Net income per share – basic	$	1.64	$	1.03	$	5.27	$	3.48
Net income per share – diluted	$	1.62	$	1.02	$	5.23	$	3.45
Weighted average shares outstanding:
Basic	116,339		118,956		116,330		120,180
Diluted	117,745		120,058		117,330		121,239
Dividends declared per common share outstanding	$	0.40	$	0.35	$	1.10	$	1.01

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Page 4

TRACTOR SUPPLY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(Unaudited)

	For the Fiscal Three Months Ended				For the Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net income	$	190,610	$	122,133	$	613,065	$	418,175
Other comprehensive income/(loss):
Change in fair value of interest rate swaps, net of taxes	468		(809)		(6,066)		(4,458)
Total other comprehensive income/(loss)	468		(809)		(6,066)		(4,458)
Total comprehensive income	$	191,078	$	121,324	$	606,999	$	413,717

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Page 5

TRACTOR SUPPLY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)

	Common Stock			Additional Paid-in Capital		Treasury Stock		Accum. Other Comp. Income/(Loss)		Retained Earnings		Total Stockholders’ Equity
	Shares	Dollars
Stockholders’ equity at December 28, 2019	118,165	$	1,389	$	966,698	$	(3,013,996)	$	199	$	3,612,833	$	1,567,123
Common stock issuance under stock award plans & ESPP	280	2		10,601								10,603
Share-based compensation expense				6,945								6,945
Repurchase of shares to satisfy tax obligations				(5,407)								(5,407)
Repurchase of common stock	(2,853)					(263,219)						(263,219)
Cash dividends paid to stockholders										(40,849)		(40,849)
Change in fair value of interest rate swaps, net of taxes								(5,250)				(5,250)
Net income										83,777		83,777
Stockholders’ equity at March 28, 2020	115,592	$	1,391	$	978,837	$	(3,277,215)	$	(5,051)	$	3,655,761	$	1,353,723
Common stock issuance under stock award plans & ESPP	588	5		39,732								39,737
Share-based compensation expense				7,504								7,504
Repurchase of shares to satisfy tax obligations				(1,984)								(1,984)
Repurchase of common stock	—					—						—
Cash dividends paid to stockholders										(40,644)		(40,644)
Change in fair value of interest rate swaps, net of taxes								(1,284)				(1,284)
Net income										338,678		338,678
Stockholders’ equity at June 27, 2020	116,180	$	1,396	$	1,024,089	$	(3,277,215)	$	(6,335)	$	3,953,795	$	1,695,730
Common stock issuance under stock award plans & ESPP	317	2		23,411								23,413
Share-based compensation expense				12,528								12,528
Repurchase of shares to satisfy tax obligations				(341)								(341)
Repurchase of common stock	—					—						—
Cash dividends paid to stockholders										(46,542)		(46,542)
Change in fair value of interest rate swaps, net of taxes								468				468
Net income										190,610		190,610
Stockholders’ equity at September 26, 2020	116,497	$	1,398	$	1,059,687	$	(3,277,215)	$	(5,867)	$	4,097,863	$	1,875,866

Page 6

	Common Stock			Additional Paid-in Capital		Treasury Stock		Accum. Other Comp. Income		Retained Earnings		Total Stockholders’ Equity
	Shares	Dollars
Stockholders’ equity at December 29, 2018	121,828	$	1,375	$	823,413	$	(2,480,677)	$	3,814	$	3,213,895	$	1,561,820
Common stock issuance under stock award plans & ESPP	570	5		34,727								34,732
Share-based compensation expense				9,624								9,624
Repurchase of shares to satisfy tax obligations				(3,026)								(3,026)
Repurchase of common stock	(1,724)					(155,319)						(155,319)
Cash dividends paid to stockholders										(37,623)		(37,623)
Change in fair value of interest rate swaps, net of taxes								(1,464)				(1,464)
Net income										76,832		76,832
Cumulative adjustment as a result of ASU 2017-12 adoption								717		(717)		—
Stockholders’ equity at March 30, 2019	120,674	$	1,380	$	864,738	$	(2,635,996)	$	3,067	$	3,252,387	$	1,485,576
Common stock issuance under stock award plans & ESPP	781	6		54,693								54,699
Share-based compensation expense				8,776								8,776
Repurchase of shares to satisfy tax obligations				(113)								(113)
Repurchase of common stock	(1,732)					(178,916)						(178,916)
Cash dividends paid to stockholders										(42,105)		(42,105)
Change in fair value of interest rate swaps, net of taxes								(2,185)				(2,185)
Net income										219,210		219,210
Stockholders’ equity at June 29, 2019	119,723	$	1,386	$	928,094	$	(2,814,912)	$	882	$	3,429,492	$	1,544,942
Common stock issuance under stock award plans & ESPP	227	2		16,110								16,112
Share-based compensation expense				7,355								7,355
Repurchase of shares to satisfy tax obligations				(651)								(651)
Repurchase of common stock	(1,470)					(155,742)						(155,742)
Cash dividends paid to stockholders										(41,518)		(41,518)
Change in fair value of interest rate swaps, net of taxes								(809)				(809)
Net income										122,133		122,133
Stockholders’ equity at September 28, 2019	118,480	$	1,388	$	950,908	$	(2,970,654)	$	73	$	3,510,107	$	1,491,822

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 

Page 7

TRACTOR SUPPLY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	For the Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019
Cash flows from operating activities:
Net income	$	613,065	$	418,175
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	158,634		144,584
Gain on disposition of property and equipment	(774)		(262)
Share-based compensation expense	26,977		25,755
Deferred income taxes	(3,734)		8,495
Change in assets and liabilities:
Inventories	(312,259)		(223,230)
Prepaid expenses and other current assets	(35,233)		9,961
Accounts payable	413,875		59,810
Accrued employee compensation	80,606		(4,810)
Other accrued expenses	20,279		(21,622)
Income taxes	(11,908)		(3,257)
Other	55,447		728
Net cash provided by operating activities	1,004,975		414,327
Cash flows from investing activities:
Capital expenditures	(161,292)		(144,342)
Proceeds from sale of property and equipment	1,130		2,317
Net cash used in investing activities	(160,162)		(142,025)
Cash flows from financing activities:
Borrowings under debt facilities	1,159,000		947,000
Repayments under debt facilities	(646,500)		(710,750)
Debt issuance costs	(1,237)		—
Principal payments under finance lease liabilities	(3,098)		(2,741)
Repurchase of shares to satisfy tax obligations	(7,732)		(3,790)
Repurchase of common stock	(263,219)		(489,977)
Net proceeds from issuance of common stock	73,753		105,543
Cash dividends paid to stockholders	(128,035)		(121,246)
Net cash provided by/(used in) financing activities	182,932		(275,961)
Net change in cash and cash equivalents	1,027,745		(3,659)
Cash and cash equivalents at beginning of period	84,241		86,299
Cash and cash equivalents at end of period	$	1,111,986	$	82,640
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	18,304	$	15,189
Income taxes	191,743		112,693
Supplemental disclosures of non-cash activities:
Non-cash accruals for construction in progress	$	14,199	$	10,981
Increase of operating lease assets and liabilities from new or modified leases	381,486		240,969
Increase of finance lease assets and liabilities from new or modified leases	6,028		2,883
Operating lease assets and liabilities recognized upon adoption of ASC 842	—		2,084,880

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 

Page 8

TRACTOR SUPPLY COMPANY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – General:

Nature of Business

Founded in 1938, Tractor Supply Company (the “Company” or “we” or “our” or “us”) is the largest rural lifestyle retailer in the United States (“U.S.”). The Company is focused on supplying the needs of recreational farmers, ranchers, and all those who enjoy living the rural lifestyle (which we refer to as the “Out Here” lifestyle), as well as tradesmen and small businesses. Stores are located primarily in towns outlying major metropolitan markets and in rural communities. The Company also owns and operates Petsense, LLC (“Petsense”), a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-sized communities, and offering a variety of pet products and services. At September 26, 2020, the Company operated a total of 2,087 retail stores in 49 states (1,904 Tractor Supply and Del’s retail stores and 183 Petsense retail stores) and also offered an expanded assortment of products through the Tractor Supply Company mobile application and online at TractorSupply.com and Petsense.com.

Basis of Presentation

The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2019.  The results of operations for our interim periods are not necessarily indicative of results for the full fiscal year.

The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty, and volatility which may negatively affect our business operations. As a result, if the pandemic persists or worsens, our accounting estimates and assumptions could be impacted in subsequent interim reports and upon final determination at year-end, and it is reasonably possible such changes could be significant (although the potential effects cannot be estimated at this time).

Note 2 – Fair Value of Financial Instruments:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments consist of cash and cash equivalents, short-term receivables, trade payables, debt instruments, and interest rate swaps.  Due to their short-term nature, the carrying values of cash and cash equivalents, short-term receivables, and trade payables approximate current fair value at each balance sheet date. As described in further detail in Note 5 to the Condensed Consolidated Financial Statements, the Company had $910.0 million, $397.5 million, and $645.0 million in borrowings under its debt facilities at September 26, 2020, December 28, 2019, and September 28, 2019, respectively. Based on market interest rates (Level 2 inputs), the carrying value of borrowings in our debt facilities approximates fair value for each period reported. The fair value of the Company’s interest rate swaps is determined based on the present value of expected future cash flows using forward rate curves (a Level 2 input). As described in further detail in Note 6 to the Condensed Consolidated Financial Statements, the fair value of the interest rate swaps, excluding accrued interest, was a net liability of $7.9 million at September 26, 2020, and a net asset of $0.3 million and $0.1 million at December 28, 2019 and September 28, 2019, respectively.

Page 9

Note 3 – Share-Based Compensation:

Share-based compensation includes stock options, restricted stock units, performance-based restricted share units, and certain transactions under our Employee Stock Purchase Plan (the “ESPP”). Share-based compensation expense is recognized based on grant date fair value of all stock options, restricted stock units, and performance-based restricted share units plus a 15% discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the purchase date market value and the employee’s purchase price.

There were no significant modifications to the Company’s share-based compensation plans during the fiscal nine months ended

September 26, 2020.

For the third quarter of fiscal 2020 and 2019, share-based compensation expense was $12.5 million and $7.4 million, respectively, and $27.0 million and $25.8 million for the first nine months of fiscal 2020 and 2019, respectively.

Stock Options

The following table summarizes information concerning stock option grants during the first nine months of fiscal 2020:

	Fiscal Nine Months Ended
	September 26, 2020
Stock options granted	443,967
Weighted average exercise price	$	94.62
Weighted average grant date fair value per option	$	19.46

As of September 26, 2020, total unrecognized compensation expense related to non-vested stock options was approximately $10.1 million with a remaining weighted average expense recognition period of 2.0 years.

Restricted Stock Units and Performance-Based Restricted Share Units

The following table summarizes information concerning restricted stock unit and performance-based restricted share unit grants during the first nine months of fiscal 2020:

	Fiscal Nine Months Ended
	September 26, 2020
Restricted stock units granted	320,053
Performance-based restricted share units granted (a)	83,368
Weighted average grant date fair value per share	$	94.39

(a) Assumes 100% target level achievement of the relative performance targets.

In fiscal 2020, the Company granted awards that are subject to the achievement of specified performance goals. The performance metrics for the units are growth in net sales and growth in earnings per diluted share. The number of performance-based restricted share units presented in the foregoing table represent the shares that can be achieved at the performance metric target value. The actual number of shares that will be issued under the performance share awards, which may be higher or lower than the target, will be determined by the level of achievement of the performance goals. If the performance targets are achieved, the units will be issued based on the achievement level and the grant date fair value and will cliff vest in full on the third anniversary of the date of the grant.

As of September 26, 2020, total unrecognized compensation expense related to non-vested restricted stock units and non-vested performance-based restricted share units was approximately $43.8 million with a remaining weighted average expense recognition period of 2.0 years.

Page 10

Note 4 – Net Income Per Share:

The Company presents both basic and diluted net income per share on the Condensed Consolidated Statements of Income.  Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period.  Diluted net income per share is calculated by dividing net income by the weighted average diluted shares outstanding during the period. Dilutive shares are computed using the treasury stock method for share-based awards. Performance-based restricted share units are included in diluted shares only if the related performance conditions are considered satisfied as of the end of the reporting period. Net income per share is calculated as follows (in thousands, except per share amounts):

	Fiscal Three Months Ended					Fiscal Three Months Ended
	September 26, 2020					September 28, 2019
	Income		Shares	Per Share Amount		Income		Shares	Per Share  Amount
Basic net income per share:	$	190,610	116,339	$	1.64	$	122,133	118,956	$	1.03
Dilutive effect of share-based awards	—		1,406	(0.02)		—		1,102	(0.01)
Diluted net income per share:	$	190,610	117,745	$	1.62	$	122,133	120,058	$	1.02

	Fiscal Nine Months Ended					Fiscal Nine Months Ended
	September 26, 2020					September 28, 2019
	Income		Shares	Per Share Amount		Income		Shares	Per Share  Amount
Basic net income per share:	$	613,065	116,330	$	5.27	$	418,175	120,180	$	3.48
Dilutive effect of share-based awards	—		1,000	(0.04)		—		1,059	(0.03)
Diluted net income per share:	$	613,065	117,330	$	5.23	$	418,175	121,239	$	3.45

Anti-dilutive stock awards excluded from the above calculations totaled less than 0.1 million and approximately 0.3 million shares for the fiscal three months ended September 26, 2020 and September 28, 2019, respectively, and less than 0.1 million and approximately 0.4 million shares for the fiscal nine months ended September 26, 2020 and September 28, 2019, respectively.

Note 5 – Debt:

The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions):

	September 26, 2020		December 28, 2019		September 28, 2019
Senior Notes	$	150.0	$	150.0	$	150.0
Senior Credit Facility:
February 2016 Term Loan	130.0		145.0		150.0
June 2017 Term Loan	80.0		87.5		90.0
March 2020 Term Loan	200.0		—		—
April 2020 Term Loan	350.0		—		—
Revolving credit loans	—		15.0		255.0
Total outstanding borrowings	910.0		397.5		645.0
Less: unamortized debt issuance costs	(0.7)		(1.0)		(1.1)
Total debt	909.3		396.5		643.9
Less: current portion of long-term debt	(380.0)		(30.0)		(30.0)
Long-term debt	$	529.3	$	366.5	$	613.9
Outstanding letters of credit	$	50.4	$	32.0	$	34.0

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Senior Notes

On August 14, 2017, the Company entered into a note purchase and private shelf agreement (the “Note Purchase Agreement”), pursuant to which the Company agreed to sell $150 million aggregate principal amount of senior unsecured notes due August 14, 2029 (the “2029 Notes”) in a private placement. The 2029 Notes bear interest at 3.70% per annum with interest payable semi-annually in arrears on each annual and semi-annual anniversary of the issuance date. The obligations under the Note Purchase Agreement are unsecured.

Pursuant to the Note Purchase Agreement, the 2029 Notes are redeemable by the Company, in whole at any time or in part from time to time, at 100% of the principal amount being redeemed, together with accrued and unpaid interest thereon and a make whole amount calculated by discounting all remaining scheduled payments on the 2029 Notes by the yield on the U.S. Treasury security with a maturity equal to the remaining average life of the Notes plus 0.50%.

Senior Credit Facility

On February 19, 2016, the Company entered into a senior credit facility (the “2016 Senior Credit Facility”), as amended from time to time, which provides borrowing capacity under term loan agreements as well as a revolving credit facility. Proceeds from the 2016 Senior Credit Facility may be used for working capital, capital expenditures, dividends, share repurchases, and other matters. There are no compensating balance requirements associated with the 2016 Senior Credit Facility.

The 2016 Senior Credit Facility contains a $500 million revolving credit facility (the “Revolver”) with a sublimit of $50 million for swingline loans. This agreement is unsecured and matures on February 19, 2022. Borrowings under the Revolver bear interest either at the bank’s base rate (3.250% at September 26, 2020) or at the London Inter-Bank Offer Rate (“LIBOR”) (0.146% at September 26, 2020) plus an additional amount ranging from 0.500% to 1.125% per annum (0.750% at September 26, 2020), adjusted quarterly based on our leverage ratio. The Company is also required to pay, quarterly in arrears, a commitment fee for unused capacity ranging from 0.075% to 0.200% per annum (0.125% at September 26, 2020), adjusted quarterly based on the Company’s leverage ratio.

On February 19, 2016, at the inception of the 2016 Senior Credit Facility, the Company entered into a $200 million term loan (the “February 2016 Term Loan”). This agreement is unsecured and matures on February 19, 2022. The February 2016 Term Loan of $200 million requires quarterly payments totaling $10 million per year in years one and two and $20 million per year in years three through the maturity date, with the remaining balance due in full on the maturity date of February 19, 2022. Borrowings under the February 2016 Term Loan bear interest either at the bank’s base rate (3.250% at September 26, 2020) or at LIBOR (0.146% at September 26, 2020) plus an additional amount ranging from 0.500% to 1.125% per annum (0.750% at September 26, 2020), adjusted quarterly based on our leverage ratio.

On June 15, 2017, pursuant to an accordion feature available under the 2016 Senior Credit Facility, the Company entered into an incremental term loan agreement (the “June 2017 Term Loan”) which increased the term loan capacity under the 2016 Senior Credit Facility by $100 million. This agreement is unsecured and matures on June 15, 2022. The June 2017 Term Loan of $100 million requires quarterly payments totaling $5 million per year in years one and two and $10 million per year in years three through the maturity date, with the remaining balance due in full on the maturity date of June 15, 2022. Borrowings under the June 2017 Term Loan bear interest either at the bank’s base rate (3.250% at September 26, 2020) or at LIBOR (0.146% at September 26, 2020) plus an additional 1.000% per annum.

On March 12, 2020, pursuant to an accordion feature available under the 2016 Senior Credit Facility, the Company entered into an incremental term loan agreement (the “March 2020 Term Loan”) which increased the term loan capacity under the 2016 Senior Credit Facility by $200 million. This agreement is unsecured and matures with the amount due in full on March 16, 2022. Borrowings under the March 2020 Term Loan bear interest either at the bank’s base rate (3.250% at September 26, 2020) or at LIBOR (0.146% at September 26, 2020) plus an additional 0.750% per annum.

On April 22, 2020, the Company entered into a second amendment to the 2016 Senior Credit Facility (the “Second Amendment”) to, among other things, increase the option to increase the aggregate principal amount of Revolving Loan Commitments and Incremental Term Loans (as defined in the 2016 Senior Credit Facility) up to an amount not to exceed $650 million. Simultaneously with the Second Amendment, the Company entered into an incremental term loan agreement (the “April 2020 Term Loan”) in the amount of $350 million, which is in addition to the 2016 Senior Credit Facility’s existing term loan and revolving credit facility. This agreement is unsecured and matures with the amount due in full on April 21, 2021. Borrowings under the April 2020 Term Loan bear interest either at the bank’s base rate (3.250% at September 26, 2020) plus an additional amount ranging from 0.250% to 1.500% per annum (0.750% at September 26, 2020) or at LIBOR (0.146% at

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September 26, 2020), with a floor of 0.750%, plus an additional amount ranging from 1.250% to 2.500% per annum (1.750% at September 26, 2020), adjusted quarterly based on our leverage ratio.

As further described in Note 6 to the Condensed Consolidated Financial Statements, the Company has entered into interest rate swap agreements in order to hedge our exposure to variable rate interest payments associated with each of the term loans under the 2016 Senior Credit Facility other than the April 2020 Term Loan.

Covenants and Default Provisions of the Debt Agreements

The 2016 Senior Credit Facility and the Note Purchase Agreement (collectively, the “Debt Agreements”) require quarterly compliance with respect to two material covenants: a fixed charge coverage ratio and a leverage ratio.  Both ratios are calculated on a trailing twelve-month basis at the end of each fiscal quarter. The fixed charge coverage ratio compares earnings before interest, taxes, depreciation, amortization, share-based compensation, and rent expense (“consolidated EBITDAR”) to the sum of interest paid and rental expense (excluding any straight-line rent adjustments).  The fixed charge coverage ratio shall be greater than or equal to 2.00 to 1.0 as of the last day of each fiscal quarter. The leverage ratio compares rental expense (excluding any straight-line rent adjustments) multiplied by a factor of six plus total debt to consolidated EBITDAR.  The leverage ratio shall be less than or equal to 4.00 to 1.0 as of the last day of each fiscal quarter. The Debt Agreements also contain certain other restrictions regarding additional indebtedness, capital expenditures, business operations, guarantees, investments, mergers, consolidations and sales of assets, prepayment of debts, transactions with subsidiaries or affiliates, and liens.  As of September 26, 2020, the Company was in compliance with all debt covenants.

The Debt Agreements contain customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, certain events of bankruptcy and insolvency, material judgments, certain ERISA events, and invalidity of loan documents. Upon certain changes of control, payment under the Debt Agreements could become due and payable. In addition, under the Note Purchase Agreement, upon an event of default or change of control, the make whole payment described above may become due and payable.

The Note Purchase Agreement also requires that, in the event the Company amends its 2016 Senior Credit Facility, or any subsequent credit facility of $100 million or greater, such that it contains covenant or default provisions that are not provided in the Note Purchase Agreement or that are similar to those contained in the Note Purchase Agreement but which contain percentages, amounts, formulas or grace periods that are more restrictive than those set forth in the Note Purchase Agreement or are otherwise more beneficial to the lenders thereunder, the Note Purchase Agreement shall be automatically amended to include such additional or amended covenants and/or default provisions.

Subsequent Event - Amendment to Senior Credit Facility and Senior Notes

On October 16, 2020, the 2016 Senior Credit Facility and Note Purchase Agreement were amended to remove the Company’s material subsidiaries as guarantors thereof and delete the requirement that future material subsidiaries of the Company become guarantors, provided that the Note Purchase Agreement will require future subsidiary guarantees if they are likewise required under any other material credit facility. The respective agreements were also amended to permit the Company to issue senior unsecured notes on or before December 31, 2020, in an amount up to $750 million.

Note 6 – Interest Rate Swaps:

The Company entered into an interest rate swap agreement which became effective on March 31, 2016, with a maturity date of February 19, 2021. The notional amount of this swap agreement began at $197.5 million (the principal amount of the February 2016 Term Loan borrowings as of March 31, 2016) and will amortize at the same time and in the same amount as the February 2016 Term Loan borrowings, as described in Note 5 to the Condensed Consolidated Financial Statements, up to the maturity date of the interest rate swap agreement on February 19, 2021. As of September 26, 2020, the notional amount of the interest rate swap was $130.0 million.

The Company entered into a second interest rate swap agreement which became effective on June 30, 2017, with a maturity date of June 15, 2022. The notional amount of this swap agreement began at $100 million (the principal amount of the June 2017 Term Loan borrowings as of June 30, 2017) and will amortize at the same time and in the same amount as the June 2017 Term Loan borrowings, as described in Note 5 to the Condensed Consolidated Financial Statements. As of September 26, 2020, the notional amount of the interest rate swap was $80.0 million.

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The Company entered into a third interest rate swap agreement which became effective on March 18, 2020, with a maturity date of March 18, 2025. The notional amount of this swap agreement is fixed at $200 million.

The Company’s interest rate swap agreements are executed for risk management and are not held for trading purposes. The objective of the interest rate swap agreements is to mitigate interest rate risk associated with future changes in interest rates. To accomplish this objective, the interest rate swap agreements are intended to hedge the variable cash flows associated with the variable rate term loan borrowings under the 2016 Senior Credit Facility. The interest rate swap agreements entitle the Company to receive, at specified intervals, a variable rate of interest based on LIBOR in exchange for the payment of a fixed rate of interest throughout the life of the agreement, without exchange of the underlying notional amount.

The Company has designated its interest rate swap agreements as cash flow hedges and accounts for the underlying activity in accordance with hedge accounting. The interest rate swaps are presented within the Condensed Consolidated Balance Sheets at fair value. In accordance with hedge accounting, the gains and losses on interest rate swaps that are designated and qualify as cash flow hedges are recorded as a component of Other Comprehensive Income (“OCI”), net of related income taxes, and reclassified into earnings in the same income statement line and period during which the hedged transactions affect earnings.

As of September 26, 2020, amounts to be reclassified from Accumulated Other Comprehensive Income (“AOCI”) into interest during the next twelve months are not expected to be material. No significant amounts were excluded from the assessment of cash flow hedge effectiveness as of September 26, 2020.

The assets and liabilities measured at fair value related to the Company’s interest rate swaps, excluding accrued interest, were as follows (in thousands):

Derivatives Designated as Cash Flow Hedges	Balance Sheet Location	September 26, 2020		December 28, 2019		September 28, 2019
Interest rate swaps (short-term portion)	Other current assets	$	—	$	558	$	631
Interest rate swaps (long-term portion)	Other assets	—		91		105
Total derivative assets		$	—	$	649	$	736
Interest rate swaps (short-term portion)	Other accrued expenses	$	2,831	$	90	$	57
Interest rate swaps (long-term portion)	Other long-term liabilities	5,055		292		581
Total derivative liabilities		$	7,886	$	382	$	638

The offset to the interest rate swap asset or liability is recorded as a component of equity, net of deferred taxes, in AOCI, and will be reclassified into earnings over the term of the underlying debt as interest payments are made.

The following table summarizes the changes in AOCI, net of tax, related to the Company’s interest rate swaps (in thousands):

	September 26, 2020		December 28, 2019		September 28, 2019
Beginning fiscal year AOCI balance	$	199	$	3,814	$	3,814
Current fiscal period loss recognized in OCI	(6,066)		(4,332)		(4,458)
Cumulative adjustment as a result of ASU 2017-12 adoption	—		717		717
Other comprehensive loss, net of tax	(6,066)		(3,615)		(3,741)
Ending fiscal period AOCI balance	$	(5,867)	$	199	$	73

Cash flows related to the interest rate swaps are included in operating activities on the Condensed Consolidated Statements of Cash Flows.

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The following table summarizes the impact of pre-tax gains and losses derived from the Company’s interest rate swaps (in thousands):

		Fiscal Three Months Ended				Fiscal Nine Months Ended
	Financial Statement Location	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Amount of gains/(losses) recognized in OCI during the period	Other comprehensive income/(loss)	$	629	$	(841)	$	(8,153)	$	(5,725)

The following table summarizes the impact of taxes affecting AOCI as a result of the Company’s interest rate swaps (in thousands):

	Fiscal Three Months Ended				Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Income tax expense/(benefit) of interest rate swaps on AOCI	$	161	$	(32)	$	(2,087)	$	(1,267)

Credit-risk-related contingent features

In accordance with the underlying interest rate swap agreements, the Company could be declared in default on its interest rate swap obligations if repayment of the underlying indebtedness (i.e., the Company’s term loans) is accelerated by the lender due to the Company's default on such indebtedness.

If the Company had breached any of the provisions in the underlying agreements at September 26, 2020, it could have been required to post full collateral or settle its obligations under the Company’s interest rate swap agreements. However, as of September 26, 2020, the Company had not breached any of these provisions or posted any collateral related to the underlying interest rate swap agreements.

Note 7 – Capital Stock and Dividends:

Capital Stock

The authorized capital stock of the Company consists of common stock and preferred stock. The Company is authorized to issue 400 million shares of common stock. The Company is also authorized to issue 40 thousand shares of preferred stock, with such designations, rights and preferences as may be determined from time to time by the Company's Board of Directors.

Dividends

During the first nine months of fiscal 2020 and 2019, the Company's Board of Directors declared the following cash dividends:

Date Declared	Dividend Amount Per Share of Common Stock		Record Date	Date Paid
August 5, 2020	$	0.40	August 24, 2020	September 9, 2020
May 6, 2020	$	0.35	May 26, 2020	June 9, 2020
February 5, 2020	$	0.35	February 24, 2020	March 10, 2020
August 7, 2019	$	0.35	August 26, 2019	September 10, 2019
May 8, 2019	$	0.35	May 28, 2019	June 11, 2019
February 6, 2019	$	0.31	February 25, 2019	March 12, 2019

It is the present intention of the Company's Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment of future dividends will be determined by the Company's Board of Directors in its sole discretion and will depend upon the earnings, financial condition and capital needs of the Company, along with any other factors that the Company's Board of Directors deems relevant.

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Note 8 – Treasury Stock:

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program up to $4.5 billion, exclusive of any fees, commissions, or other expenses related to such repurchases. The repurchases may be made from time to time on the open market or in privately negotiated transactions.  The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions.  Repurchased shares are accounted for at cost and will be held in treasury for future issuance.  The program may be limited or terminated at any time without prior notice. As of September 26, 2020, the Company had remaining authorization under the share repurchase program of $1.22 billion, exclusive of any fees, commissions, or other expenses.

The Company has suspended the share repurchase program effective March 12, 2020, in order to strengthen its liquidity and preserve cash while navigating the COVID-19 pandemic.

The following table provides the number of shares repurchased, average price paid per share, and total amount paid for share repurchases during the fiscal three and nine months ended September 26, 2020 and September 28, 2019, respectively (in thousands, except per share amounts):

	Fiscal Three Months Ended				Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Total number of shares repurchased	—		1,470		2,853		4,926
Average price paid per share	$	—	$	105.97	$	92.28	$	99.46
Total cash paid for share repurchases	$	—	$	155,742	$	263,219	$	489,977

Note 9 – Income Taxes:

The Company’s effective income tax rate was 22.2% in the third quarter of both fiscal 2020 and 2019. The effective income tax rate was 22.6% in the first nine months of fiscal 2020 compared to 22.2% in the first nine months of fiscal 2019. The primary driver for the increase in the Company’s effective income tax rate in the nine month period was attributable to a reduction in the impact of the tax benefit associated with share-based compensation.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in the U.S. on March 27, 2020. We do not anticipate that the enactment of this legislation will significantly impact our full year effective tax rate in fiscal 2020.

Note 10 – Commitments and Contingencies:

Construction and Real Estate Commitments

At September 26, 2020, there were no material commitments related to real estate or construction projects extending greater than twelve months.

Letters of Credit

At September 26, 2020, there were $50.4 million of outstanding letters of credit under the 2016 Senior Credit Facility.

Litigation

On October 9, 2020, an alleged stockholder filed a derivative lawsuit in the U.S. District Court for the Middle District of Tennessee, purportedly on the Company's behalf, against all current and two former members of our Board of Directors, and the Company as a nominal defendant, seeking monetary damages, interest, corporate governance changes, disgorgement, restitution, mandated community investment, punitive damages, and an award of attorneys' fees, expert fees, and costs. Plaintiffs allege that: (a) defendants misrepresented and omitted material facts in the Company's proxy statements with respect to diversity; (b) defendants breached their fiduciary duties by permitting the Company to disseminate materially misleading and inaccurate information regarding the Company’s commitment to diversity; and (c) defendants received unjust compensation and were unjustly enriched. While the Company continues to evaluate these claims, we do not believe this litigation will have a material impact on our financial position or results of operations.

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The Company is also involved in various other litigation matters arising in the ordinary course of business. The Company believes that, based upon information currently available, any estimated loss related to such matters has been adequately provided for in accrued liabilities to the extent probable and reasonably estimable. Accordingly, the Company currently expects these matters will be resolved without material adverse effect on its consolidated financial position, results of operations, or cash flows.  However, litigation and other legal matters involve an element of uncertainty. Future developments in such matters, including adverse decisions or settlements or resulting required changes to the Company's business operations, could affect our consolidated operating results when resolved in future periods or could result in liability or other amounts material to the Company's Condensed Consolidated Financial Statements.

Note 11 – Segment Reporting:

The Company has one reportable segment which is the retail sale of products that support the rural lifestyle.  The following table indicates the percentage of net sales represented by each major product category during the fiscal three and nine months ended September 26, 2020 and September 28, 2019:

	Fiscal Three Months Ended				Fiscal Nine Months Ended
Product Category:	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Livestock and Pet	48	%	49	%	48	%	48	%
Hardware, Tools and Truck	23		23		21		21
Seasonal, Gift and Toy Products	19		18		21		20
Clothing and Footwear	5		5		5		6
Agriculture	5		5		5		5
Total	100	%	100	%	100	%	100	%

Note 12 – New Accounting Pronouncements:

New Accounting Pronouncements Recently Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. The new guidance applies to financial assets measured at amortized cost basis, including receivables that result from revenue transactions and held-to-maturity debt securities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption was permitted for fiscal years beginning after December 15, 2018. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which amends the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures.  This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” This update clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted.  The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this guidance on a prospective basis in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

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New Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of LIBOR related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this guidance to have a material impact on its Condensed Consolidated Financial Statements and related disclosures.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2019 (the "2019 10-K"). This Quarterly Report on Form 10-Q also contains forward-looking statements and information. The forward-looking statements included herein are made pursuant to the safe 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 we expect or anticipate will or may occur in the future, including sales and earnings growth, estimated results of operations in future periods, the declaration and payment of dividends, future capital expenditures (including their amount and nature), business strategy, expansion and growth of our business operations, and other such matters are forward-looking statements.  These forward-looking statements may be affected by certain risks and uncertainties, any one, or a combination of which, could materially affect the results of our operations. To take advantage of the safe harbor provided by the Act, we are identifying certain factors that could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written.

As with any business, many aspects of our operations are subject to influences outside our control. These factors include, without limitation, national, regional, and local economic conditions affecting consumer spending, including the effects of the COVID-19 pandemic, the timing and acceptance of new products, the timing and mix of goods sold, purchase price volatility (including inflationary and deflationary pressures), the ability to increase sales at existing stores, the ability to manage growth and identify suitable locations, failure of an acquisition to produce anticipated results, the ability to successfully manage expenses (including increased expenses as a result of operating as an essential retailer during the COVID-19 pandemic) and execute our key gross margin enhancing initiatives, the availability of favorable credit sources, capital market conditions in general, the ability to open new stores in the time, manner and number currently contemplated, particularly in light of the COVID-19 pandemic, the impact of new stores on our business, competition, including that from online competitors, weather conditions, the seasonal nature of our business, effective merchandising initiatives and marketing emphasis, the ability to retain vendors, reliance on foreign suppliers, the ability to attract, train, and retain qualified employees, product liability and other claims, changes in federal, state, or local regulations, the effects that “shelter in place” and similar federal, state, and local regulations and protocols could have on our business, including our supply chain and employees, the imposition of tariffs on imported products or the disallowance of tax deductions on imported products, potential judgments, fines, legal fees, and other costs, breach of information systems or theft of employee or customer data, ongoing and potential future legal or regulatory proceedings, management of our information systems, failure to develop and implement new technologies, the failure of customer-facing technology systems, business disruption including from the implementation of supply chain technologies, effective tax rate changes and results of examination by taxing authorities, the ability to maintain an effective system of internal control over financial reporting, and changes in accounting standards, assumptions, and estimates. We discuss in greater detail risk factors relating to our business in Item 1A of our 2019 10-K and in Part II, Item 1A of this Quarterly Report on Form 10-Q.  Forward-looking statements are based on our knowledge of our business and the environment in which we operate, but because of the factors listed above or other factors, actual results could differ materially from those reflected by any forward-looking statements. Consequently, all of the forward-looking statements made are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business and operations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  We undertake no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Information Regarding COVID-19 Coronavirus Pandemic

The Company has been and continues to closely monitor the impact of the COVID-19 pandemic on all facets of our business. This includes the impact on our team members, customers, suppliers, vendors, business partners, and supply chain networks.

The health and safety of our team members and customers are the primary concerns of our management team. We have taken and continue to take numerous actions to promote health and safety, including, rapidly providing personal protective equipment to our team members, requiring the use of masks in our facilities, rolling out additional functionality to support contactless shopping experiences, adding services for cleaning and sanitation in our stores and distribution centers, hiring additional team members to assist in promoting social distancing and cleaning actions in our stores, and implementing remote work plans at our store support center.

Additionally, we have taken significant actions to support our team members during this pandemic including COVID-19 paid medical leave, 100% coverage of COVID-19 testing and treatment under our medical plan, and the payment of incremental

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appreciation bonuses for frontline team members of approximately $35 million from March 16 to June 27. Effective June 28 we have implemented permanent wage increases for all of our hourly team members in our stores and distribution centers of a minimum of $1 per hour and are now providing a new benefit package for part-time team members, including medical, vision and dental coverage, paid sick time and life insurance. Further, we have also implemented annual restricted stock unit grants to more than 2,000 frontline salaried managers in our stores and distribution centers. These actions, among others, are intended to support our team members both during and after the COVID-19 pandemic.

As further described in the results of operations for the three and nine fiscal months ended September 26, 2020, our net sales have significantly increased due to unprecedented customer demand across all major product categories, channels, and geographic regions. However, the net incremental costs of doing business during this crisis have increased as a result of the aforementioned actions we have taken to support and ensure the safety and well-being of our team members and customers, and we believe these incremental costs will continue after the pandemic is over.

On October 22, 2020 we provided financial guidance for the results of operations expected for the fourth fiscal quarter ending December 26, 2020 which reflected a continuation of the strong consumer demand for our products, albeit to a lesser extent than experienced during our second and third fiscal quarters. Additionally, we anticipate incurring incremental costs to respond to the COVID-19 pandemic, as well as costs associated with the previously announced permanent increase in compensation and benefits for our frontline team members, and incremental costs for strategic investments in our business.

However, there are numerous uncertainties surrounding the pandemic and its impact on the economy and our business, as further described in the Risk Factors section of our 2019 10-K (as updated in Part II, Item 1A of this Quarterly Report on Form 10-Q), which make it difficult to predict the impact on our business, financial position, or results of operations for the remainder of fiscal 2020 and beyond. While our stores, distribution centers, and e-commerce operations are open and plan to remain open, we cannot predict the uncertainties, or the corresponding impacts on our business, at this time.

Therefore, as previously disclosed, in an effort to strengthen our liquidity and preserve cash while navigating the COVID-19 pandemic, we suspended our share repurchase program effective March 12, 2020 and increased borrowings under our debt facilities as described in Note 5 to the Condensed Consolidated Financial Statements.

Seasonality and Weather

Our business is seasonal.  Historically, our sales and profits are the highest in the second and fourth fiscal quarters due to the sale of seasonal products. We usually experience our highest inventory and accounts payable balances during our first fiscal quarter for purchases of seasonal products to support the higher sales volume of the spring selling season, and again during our third fiscal quarter to support the higher sales volume of the cold-weather selling season. We believe that our business can be more accurately assessed by focusing on the performance of the halves, not the quarters, due to the fact that different weather patterns from year-to-year can shift the timing of sales and profits between quarters, particularly between the first and second fiscal quarters and the third and fourth fiscal quarters.

Historically, weather conditions, including unseasonably warm weather in the fall and winter months and unseasonably cool weather in the spring and summer months, have unfavorably affected the timing and volume of our sales and results of operations. In addition, extreme weather conditions, including snow and ice storms, flood and wind damage, hurricanes, tornadoes, extreme rain, and droughts have impacted operating results both negatively and positively, depending on the severity and length of these conditions. Our strategy is to manage product flow and adjust merchandise assortments and depth of inventory to capitalize on seasonal demand trends.

Furthermore, we are not able to predict at this time the impact that the COVID-19 pandemic may have on the seasonality of our business in the future.

Comparable Store Metrics

Comparable store metrics are a key performance indicator used in the retail industry to measure the performance of the underlying business. Our comparable store metrics are calculated on an annual basis using sales generated from all stores open at least one year and all online sales and exclude certain adjustments to net sales. Stores closed during either of the years being compared are removed from our comparable store metrics calculations. Stores relocated during either of the years being compared are not removed from our comparable store metrics calculations. If the effect of relocated stores on our comparable store metrics calculations became material, we would remove relocated stores from the calculations.

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Results of Operations

Fiscal Three Months (Third Quarter) Ended September 26, 2020 and September 28, 2019

Net sales for the third quarter of fiscal 2020 increased 31.4% to $2.61 billion from $1.98 billion for the third quarter of fiscal 2019. Comparable store sales for the third quarter of fiscal 2020 were $2.51 billion, a 26.8% increase as compared to the third quarter of fiscal 2019. Net sales and comparable store sales increased 5.4% and 2.9% in the third quarter of fiscal 2019, respectively.

The comparable store sales results for the third quarter of fiscal 2020 included an increase in comparable average transaction count of 14.3% and an increase in comparable average transaction value of 12.5%, each as compared to the third quarter of fiscal 2019. The COVID-19 pandemic continued to have a significant impact on consumer demand in the third quarter of fiscal 2020 across all of the Company’s major product categories as customers focused on the care of their homes, land, and animals. Additionally, consumer demand in the quarter benefited from favorable weather conditions across much of the country as well as growth in new customer acquisition and the re-engagement of lapsed customers as a result of advertising campaigns focused on brand awareness. These factors all led to a significant increase in comparable store sales which was driven by strong demand for everyday merchandise, including consumable, usable and edible products and robust growth for summer seasonal categories. All geographic regions of the Company had robust comparable store sales growth. In addition, the Company’s e-commerce sales experienced triple-digit sales percentage growth as compared to the third quarter of fiscal 2019.

In addition to comparable store sales growth for the third quarter of fiscal 2020, sales from stores open less than one year were $93.6 million for the third quarter of fiscal 2020, which represented 4.7 percentage points of the 31.4% increase over third quarter fiscal 2019 net sales. For the third quarter of fiscal 2019, sales from stores open less than one year were $50.0 million, which represented 2.7 percentage points of the 5.4% increase over third quarter fiscal 2018 net sales.

The following table summarizes store growth for the fiscal three months ended September 26, 2020 and September 28, 2019:

	Fiscal Three Months Ended
Store Count Information:	September 26, 2020	September 28, 2019
Tractor Supply
Beginning of period	1,881	1,790
New stores opened	23	25
Stores closed	—	(1)
End of period	1,904	1,814
Petsense
Beginning of period	180	177
New stores opened	3	1
Stores closed	—	(2)
End of period	183	176
Consolidated, end of period	2,087	1,990
Stores relocated	—	1

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The following table indicates the percentage of net sales represented by each of our major product categories for the fiscal three months ended September 26, 2020 and September 28, 2019:

	Percent of Net Sales
	Fiscal Three Months Ended
Product Category:	September 26, 2020		September 28, 2019
Livestock and Pet	48	%	49	%
Hardware, Tools and Truck	23		23
Seasonal, Gift and Toy Products	19		18
Clothing and Footwear	5		5
Agriculture	5		5
Total	100	%	100	%

Gross profit increased 36.6% to $948.0 million for the third quarter of fiscal 2020 from $694.2 million for the third quarter of fiscal 2019. As a percent of net sales, gross margin in the third quarter of fiscal 2020 increased 138 basis points to 36.37% from 34.99% in the third quarter of fiscal 2019. The increase in gross margin was driven by lower depth and frequency of sales promotions, less clearance activity, and lower transportation costs as a percent of net sales.

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 30.7% to $695.8 million for the third quarter of fiscal 2020 from $532.4 million for the third quarter of fiscal 2019. As a percent of net sales, SG&A expenses improved 14 basis points to 26.69% for the third quarter of fiscal 2020 from 26.83% for the third quarter of fiscal 2019. The decrease in SG&A as a percent of net sales was primarily attributable to leverage in occupancy, personnel and other operating costs from the increase in comparable store sales. The leverage in our personnel costs year-over-year was inclusive of the permanent wage and benefit increases for our store and distribution center team members that went into effect in the third quarter of fiscal 2020. The leverage from these SG&A expenses was partially offset by incremental costs related to the COVID-19 pandemic, investments in strategic initiatives including advertising and increased incentive compensation given the record sales and profit performance in the quarter with the majority allocated to the store teams. The incremental costs related to the COVID-19 pandemic of approximately $20 million included additional labor hours and supply costs dedicated to cleaning and sanitation to enhance the health and safety of team members and customers.

Operating income for the third quarter of fiscal 2020 increased 55.8% to $252.2 million compared to $161.8 million in the third quarter of fiscal 2019.

The effective income tax rate was 22.2% for the third quarter of both fiscal 2020 and 2019.

As a result of the foregoing factors, net income for the third quarter of fiscal 2020 increased 56.1% to $190.6 million, or $1.62 per diluted share, as compared to net income of $122.1 million, or $1.02 per diluted share, for the third quarter of fiscal 2019.

Fiscal Nine Months (Third Quarter) Ended September 26, 2020 and September 28, 2019

Net sales increased 25.7% to $7.74 billion for the first nine months of fiscal 2020 from $6.16 billion for the first nine months of fiscal 2019. Comparable store sales for the first nine months of fiscal 2020 were $7.49 billion, a 21.5% increase over the first nine months of fiscal 2019. Net sales and comparable store sales increased 6.6% and 3.6% in the first nine months of fiscal 2019, respectively.

For the first nine months of fiscal 2020, the comparable store sales results included an increase in comparable average transaction value of 12.0% and comparable average transaction count of 9.6%. Beginning in March 2020, the COVID-19 pandemic had a significant impact on consumer demand across all of the Company’s major product categories and geographic regions. All geographic regions of the Company had robust comparable store sales growth during the first nine months of fiscal 2020. The increase in comparable store sales was driven by unprecedented demand for spring and summer seasonal categories along with exceptional growth in everyday merchandise, including consumable, usable and edible products.

In addition to comparable store sales growth in the first nine months of fiscal 2020, sales from stores open less than one year were $264.0 million in the first nine months of fiscal 2020, which represented 4.3 percentage points of the 25.7% increase over the first nine months of fiscal 2019 net sales. For the first nine months of fiscal 2019, sales from stores open less than one year

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were $179.6 million, which represented 3.1 percentage points of the 6.6% increase over the first nine months of fiscal 2018 net sales.

The following table summarizes store growth for the fiscal nine months ended September 26, 2020 and September 28, 2019:

	Fiscal Nine Months Ended
Store Count Information:	September 26, 2020	September 28, 2019
Tractor Supply
Beginning of period	1,844	1,765
New stores opened	61	50
Stores closed	(1)	(1)
End of period	1,904	1,814
Petsense
Beginning of period	180	175
New stores opened	6	3
Stores closed	(3)	(2)
End of period	183	176
Consolidated, end of period	2,087	1,990
Stores relocated	1	2

The following table indicates the percentage of net sales represented by each of our major product categories for the fiscal nine months ended September 26, 2020 and September 28, 2019:

	Percent of Net Sales
	Fiscal Nine Months Ended
Product Category:	September 26, 2020		September 28, 2019
Livestock and Pet	48	%	48	%
Hardware, Tools and Truck	21		21
Seasonal, Gift and Toy Products	21		20
Clothing and Footwear	5		6
Agriculture	5		5
Total	100	%	100	%

Gross profit increased 29.9% to $2.77 billion from $2.13 billion in the first nine months of fiscal 2019, and gross margin increased 115 basis points to 35.73% from 34.58% in the first nine months of fiscal 2019. The increase in gross margin was driven by lower depth and frequency of sales promotions, less clearance merchandise and, to a lesser extent, favorable product mix and lower transportation costs as a percent of net sales.

Total SG&A expenses, including depreciation and amortization, increased 23.9% to $1.95 billion from $1.58 billion in the first nine months of fiscal 2019. As a percent of net sales, SG&A expenses decreased to 25.23% from 25.60% in the first nine months of fiscal 2019. The decrease in SG&A as a percent of net sales was primarily attributable to leverage in occupancy, personnel, and other operating costs from the increase in comparable store sales. The leverage in our personnel costs year-over-year was inclusive of the permanent wage and benefit increases for our store and distribution center team members that went into effect in the third quarter of fiscal 2020. These improvements in our SG&A as a percent of net sales were partially offset by incremental costs related to the COVID-19 pandemic, increased incentive compensation given the Company’s strong financial performance, and investments in strategic initiatives. The costs related to the COVID-19 pandemic were approximately $82 million during the first nine months of fiscal 2020 which includes appreciation wages for frontline team members as well as additional labor hours and supply costs dedicated to cleaning and sanitation to enhance the health and safety of team members and customers.

Operating income for the first nine months of fiscal 2020 increased 47.0% to $812.5 million compared to $552.8 million in the first nine months of fiscal 2019.

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The effective income tax rate was 22.6% in the first nine months of fiscal 2020 compared to 22.2% in the first nine months of fiscal 2019.  The primary driver for the increase in the Company’s effective income tax rate was attributable to a reduction in the impact of the tax benefit associated with share-based compensation. The Company expects the full fiscal year 2020 effective tax rate to be in a range between 22.5% and 22.7%. The CARES Act was enacted in the U.S. on March 27, 2020. We do not anticipate that the enactment of this legislation will significantly impact our full year effective tax rate in fiscal 2020; however, the legislation resulted in the deferral of certain tax payments.

As a result of the foregoing factors, net income increased 46.6% to $613.1 million from $418.2 million in the first nine months of fiscal 2019, and diluted earnings per share increased 51.6% to $5.23 from $3.45 in the first nine months of fiscal 2019.

Liquidity and Capital Resources

In addition to normal operating expenses, our primary ongoing cash requirements are for new store expansion, remodeling and relocation programs, distribution facility capacity and improvements, information technology, inventory purchases, repayment of existing borrowings under our debt facilities, share repurchases, cash dividends, and selective acquisitions as opportunities arise.  

Our primary ongoing sources of liquidity are existing cash balances, cash provided from operations, remaining funds available under our debt facilities, finance and operating leases, and normal trade credit.  Our inventory and accounts payable levels typically build in the first and third fiscal quarters to support the higher sales volume of the spring and cold-weather selling seasons, respectively.

The Company believes that its existing cash balances, expected cash flow from future operations, funds available under its debt facilities, finance and operating leases, and normal trade credit will be sufficient to fund its operations, including increased expenses associated with COVID-19, and its capital expenditure needs, including new store openings, store acquisitions, relocations and renovations, distribution facility capacity, and information technology improvements, through the end of fiscal 2020.

Working Capital

At September 26, 2020, the Company had working capital of $1.04 billion, which increased $498.0 million from December 28, 2019, and increased $284.5 million from September 28, 2019.  The shifts in working capital were attributable to changes in the following components of current assets and current liabilities (in millions):

	September 26, 2020		December 28, 2019		Variance		September 28, 2019		Variance
Current assets:
Cash and cash equivalents	$	1,112.0	$	84.2	$	1,027.8	$	82.6	$	1,029.4
Inventories	1,915.0		1,602.8		312.2		1,812.8		102.2
Prepaid expenses and other current assets	136.1		100.9		35.2		104.5		31.6
Income taxes receivable	7.8		—		7.8		5.6		2.2
Total current assets	3,170.9		1,787.9		1,383.0		2,005.5		1,165.4
Current liabilities:
Accounts payable	1,056.9		643.0		413.9		679.8		377.1
Accrued employee compensation	120.4		39.8		80.6		49.2		71.2
Other accrued expenses	274.2		247.7		26.5		218.8		55.4
Current portion of long-term debt	380.0		30.0		350.0		30.0		350.0
Current portion of finance lease liabilities	4.4		4.0		0.4		3.9		0.5
Current portion of operating lease liabilities	294.8		277.1		17.7		270.0		24.8
Income taxes payable	1.9		6.0		(4.1)		—		1.9
Total current liabilities	2,132.6		1,247.6		885.0		1,251.7		880.9
Working capital	$	1,038.3	$	540.3	$	498.0	$	753.8	$	284.5

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In comparison to December 28, 2019, working capital as of September 26, 2020, was impacted most significantly by changes in cash and cash equivalents, inventories, accounts payable, current portion of long-term debt, and accrued employee compensation.

•The increase in cash and cash equivalents was driven by significant net cash provided by operating activities in the first nine months of fiscal 2020 and an increase in borrowings, net of repayments, under our debt facilities as we sought to strengthen liquidity and preserve cash while navigating the COVID-19 pandemic. These increases in cash and cash equivalents were partially offset by share repurchases, capital expenditures to support our strategic growth, and cash dividends paid to stockholders.

•The increase in inventories resulted primarily from an increase in average inventory per store due to normal seasonal patterns as well as the purchase of additional inventory to support new store growth.

•The increase in accounts payable was strongly correlated to the significant increase in inventory as well as strong comparable store sales during the third quarter of fiscal 2020. The sales performance during the third quarter drove an increase in inventory purchases and produced high inventory turns, resulting in an increase in the amount of inventory purchases that remain in accounts payable at quarter end.

•The increase in the current portion of long-term debt was related to the new $350 million April 2020 Term Loan borrowing, which was executed in order to strengthen liquidity and preserve cash while navigating the COVID-19 pandemic.

•The increase in accrued employee compensation was primarily due to incentive accruals given the strong year-to-date financial performance in fiscal 2020 and, to a lesser extent, the timing of other payroll accruals and related payments.

In comparison to September 28, 2019, working capital as of September 26, 2020, was impacted most significantly by changes in cash and cash equivalents, inventories, accounts payable, current portion of long-term debt, and accrued employee compensation.

•The increase in cash and cash equivalents was driven by a significant year-over-year increase in net cash provided by operating activities as well as an increase in borrowings, net of repayments, under our debt facilities and a reduced amount of year-over-year share repurchases as we sought to strengthen liquidity and preserve cash while navigating the COVID-19 pandemic.

•The increase in inventories resulted primarily from the purchase of additional inventory to support new store growth as average inventory per store did not fluctuate significantly year-over-year.

•The increase in accounts payable resulted primarily from the purchase of additional inventory to support new store growth and increased sales volumes during the third quarter of fiscal 2020. However, the inventory balance did not increase at the same rate as accounts payable due to the significant increase in sales and inventory turns in the third quarter of fiscal 2020 which resulted in a year-over-year increase in the amount of inventory purchases that remain in accounts payable at quarter end.

•The increase in the current portion of long-term debt was related to the new $350 million April 2020 Term Loan borrowing, which was executed in order to strengthen liquidity and preserve cash while navigating the COVID-19 pandemic.

•The increase in accrued employee compensation was primarily due to higher year-over-year incentive accruals given the strong year-to-date financial performance in fiscal 2020.

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Debt

The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions):

	September 26, 2020		December 28, 2019		September 28, 2019
Senior Notes	$	150.0	$	150.0	$	150.0
Senior Credit Facility:
February 2016 Term Loan	130.0		145.0		150.0
June 2017 Term Loan	80.0		87.5		90.0
March 2020 Term Loan	200.0		—		—
April 2020 Term Loan	350.0		—		—
Revolving credit loans	—		15.0		255.0
Total outstanding borrowings	910.0		397.5		645.0
Less: unamortized debt issuance costs	(0.7)		(1.0)		(1.1)
Total debt	909.3		396.5		643.9
Less: current portion of long-term debt	(380.0)		(30.0)		(30.0)
Long-term debt	$	529.3	$	366.5	$	613.9
Outstanding letters of credit	$	50.4	$	32.0	$	34.0

For additional information about the Company’s debt and credit facilities, refer to Note 5 to the Condensed Consolidated Financial Statements. Refer to Note 6 to the Condensed Consolidated Financial Statements for information about the Company’s interest rate swap agreements.

Operating Activities

Operating activities provided net cash of $1.0 billion and $414.3 million in the first nine months of fiscal 2020 and fiscal 2019, respectively.  The $590.7 million increase in net cash provided by operating activities in the first nine months of fiscal 2020 compared to the first nine months of fiscal 2019 is due to changes in the following operating activities (in millions):

	Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		Variance
Net income	$	613.1	$	418.2	$	194.9
Depreciation and amortization	158.6		144.6		14.0
Share-based compensation expense	27.0		25.8		1.2
Deferred income taxes	(3.7)		8.5		(12.2)
Inventories and accounts payable	101.6		(163.4)		265.0
Prepaid expenses and other current assets	(35.2)		10.0		(45.2)
Accrued expenses	100.9		(26.4)		127.3
Income taxes	(11.9)		(3.3)		(8.6)
Other, net	54.6		0.3		54.3
Net cash provided by operating activities	$	1,005.0	$	414.3	$	590.7

The $590.7 million increase in net cash provided by operating activities in the first nine months of fiscal 2020 compared with the first nine months of fiscal 2019 resulted from a year-over-year increase in our net income as well as the net impact of changes in our operating assets and liabilities, principally due to the timing of accruals and related payments and a significant increase in inventory that remains in accounts payable due to the increased sales volume and inventory turns in the third quarter of fiscal 2020.

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Investing Activities

Investing activities used net cash of $160.2 million and $142.0 million in the first nine months of fiscal 2020 and fiscal 2019, respectively. The $18.1 million increase in net cash used in investing activities primarily reflects an increase in capital expenditures in the first nine months of fiscal 2020 compared to fiscal 2019.

Capital expenditures for the first nine months of fiscal 2020 and fiscal 2019 were as follows (in millions):

	Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019
Information technology	$	72.6	$	66.5
New and relocated stores and stores not yet opened	43.8		38.6
Existing stores	30.6		23.5
Distribution center capacity and improvements	11.6		14.3
Corporate and other	2.7		1.4
Total capital expenditures	$	161.3	$	144.3

The spending on information technology represents continued support of our store growth and our omni-channel initiatives, as well as improvements in security and compliance, enhancements to our customer relationship management program, and other strategic initiatives. As we continue throughout fiscal 2020, we intend to prioritize our information technology capital expenditures to accelerate initiatives to enhance safety and convenience for customers, including initiatives such as Buy Online, Pickup In Store; Buy Online, Deliver from Store; Contactless Curbside Pickup; Contactless Payment capabilities; additional Mobile POS devices in all stores; and improvements to our in-store wireless internet.

In the first nine months of fiscal 2020, the Company opened 61 new Tractor Supply stores compared to 50 new Tractor Supply stores during the first nine months of fiscal 2019. The Company also opened six new Petsense stores during the first nine months of fiscal 2020 compared to three new Petsense stores during the first nine months of fiscal 2019. We expect to open approximately 80 new Tractor Supply stores and approximately 10 new Petsense stores during fiscal 2020, but the timing of new store openings in some areas may be delayed as a result of the COVID-19 pandemic, including local and state orders.

Spending for existing stores principally reflects routine refresh activity. However, the increased spend for existing stores in the first nine months of fiscal 2020 as compared to the first nine months of fiscal 2019 is driven by strategic initiatives in select stores including security enhancements, space productivity and side lot improvements.

For fiscal 2020, the Company expects capital expenditures to be approximately $300 million to $325 million, as we continue to support our strategic growth initiatives related to space productivity and side lot improvements in certain existing store locations as well as new technology and service enhancements that are being implemented across the enterprise.

Financing Activities

Financing activities provided net cash of $182.9 million in the first nine months of fiscal 2020 compared to using net cash of $276.0 million in the first nine months of fiscal 2019. The $458.9 million change in net cash provided by financing activities in the first nine months of fiscal 2020 compared to the first nine months of fiscal 2019 is due to changes in the following (in millions):

	Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		Variance
Net borrowings and repayments under debt facilities	$	512.5	$	236.3	$	276.2
Repurchase of common stock	(263.2)		(490.0)		226.8
Net proceeds from issuance of common stock	73.8		105.5		(31.7)
Cash dividends paid to stockholders	(128.0)		(121.2)		(6.8)
Other, net	(12.2)		(6.6)		(5.6)
Net cash provided by/(used in) financing activities	$	182.9	$	(276.0)	$	458.9

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The $458.9 million change in net cash provided by financing activities in the first nine months of fiscal 2020 compared with the first nine months of fiscal 2019 is due to an increase in net borrowings under debt facilities, which included the addition of the $200 million March 2020 Term Loan and the $350 million April 2020 Term Loan as described in Note 5 to the Condensed Consolidated Financial Statements. Additionally, we used less cash for the repurchase of common stock as we have suspended our share repurchase program effective March 12, 2020. The incremental borrowings and suspension of our share repurchase program were both intended to strengthen our liquidity and preserve cash while navigating the COVID-19 pandemic.

Dividends

During the first nine months of fiscal 2020 and fiscal 2019, the Company's Board of Directors declared the following cash dividends:

Date Declared	Dividend Amount Per Share of Common Stock		Record Date	Date Paid
August 5, 2020	$	0.40	August 24, 2020	September 9, 2020
May 6, 2020	$	0.35	May 26, 2020	June 9, 2020
February 5, 2020	$	0.35	February 24, 2020	March 10, 2020
August 7, 2019	$	0.35	August 26, 2019	September 10, 2019
May 8, 2019	$	0.35	May 28, 2019	June 11, 2019
February 6, 2019	$	0.31	February 25, 2019	March 12, 2019

It is the present intention of the Company's Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment of future dividends will be determined by the Company's Board of Directors in its sole discretion and will depend upon the earnings, financial condition and capital needs of the Company, along with any other factors that the Company's Board of Directors deems relevant.

Share Repurchase Program

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program up to $4.5 billion, exclusive of any fees, commissions, or other expenses related to such repurchases. The repurchases may be made from time to time on the open market or in privately negotiated transactions.  The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions.  Repurchased shares are accounted for at cost and will be held in treasury for future issuance.  The program may be limited or terminated at any time without prior notice. As of September 26, 2020, the Company had remaining authorization under the share repurchase program of $1.22 billion, exclusive of any fees, commissions, or other expenses.

The Company has suspended the share repurchase program effective March 12, 2020, in order to strengthen its liquidity and preserve cash while navigating the COVID-19 pandemic.

The following table provides the number of shares repurchased, average price paid per share, and total amount paid for share repurchases during the fiscal three and nine months ended September 26, 2020 and September 28, 2019, respectively (in thousands, except per share amounts):

	Fiscal Three Months Ended				Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Total number of shares repurchased	—		1,470		2,853		4,926
Average price paid per share	$	—	$	105.97	$	92.28	$	99.46
Total cash paid for share repurchases	$	—	$	155,742	$	263,219	$	489,977

Off-Balance Sheet Arrangements

The Company’s off-balance sheet arrangements are limited to outstanding letters of credit.  Letters of credit allow the Company to purchase inventory, primarily sourced overseas, in a timely manner and support certain risk management programs.

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Significant Contractual Obligations and Commercial Commitments

At September 26, 2020, there were no material commitments related to real estate or construction projects extending greater than twelve months.

At September 26, 2020, there were $50.4 million of outstanding letters of credit under the 2016 Senior Credit Facility.

Significant Accounting Policies and Estimates

Management’s discussion and analysis of the Company’s financial position and results of operations are based upon its Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make informed estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  The Company’s significant accounting policies, including areas of critical management judgments and estimates, have primary impact on the following financial statement areas:

-	Inventory valuation	-	Impairment of long-lived assets
-	Self-insurance reserves	-	Impairment of goodwill and other indefinite-lived intangible assets

See the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 28, 2019, for a discussion of the Company’s critical accounting policies.  The Company’s financial position and/or results of operations may be materially different when reported under different conditions or when using different assumptions in the application of such policies.  In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

New Accounting Pronouncements    

Refer to Note 12 to the Condensed Consolidated Financial Statements for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of September 26, 2020.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are exposed to interest rate changes, primarily as a result of borrowings under our 2016 Senior Credit Facility (as discussed in Note 5 to the Condensed Consolidated Financial Statements) which bear interest based on variable rates.

As discussed in Note 6 to the Condensed Consolidated Financial Statements, we entered into interest rate swap agreements which are intended to mitigate interest rate risk associated with future changes in interest rates for the term loan borrowings under the 2016 Senior Credit Facility. As a result of these interest rate swaps, our exposure to interest rate volatility is minimized. The interest rate swap agreements have been executed for risk management purposes and are not held for trading purposes.

A 1% change in interest rates on our variable rate debt in excess of that amount covered by the interest rate swaps would have affected interest expense by approximately $0.4 million and $0.4 million for the three months ended September 26, 2020 and September 28, 2019, respectively, and $2.1 million and $1.3 million for the nine months ended September 26, 2020 and September 28, 2019, respectively.

Purchase Price Volatility

Although we cannot determine the full effect of inflation and deflation on our operations, we believe our sales and results of operations are affected by both.  We are subject to market risk with respect to the pricing of certain products and services, which include, among other items, grain, corn, steel, petroleum, cotton, and other commodities, as well as transportation services.  Therefore, we may experience both inflationary and deflationary pressure on product cost, which may impact consumer demand and, as a result, sales and gross margin. Our strategy is to reduce or mitigate the effects of purchase price volatility principally by taking advantage of vendor incentive programs, growing economies of scale from increased volume of purchases, adjusting retail prices and selectively buying from the most competitive vendors without sacrificing quality.

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Item 4.  Controls and Procedures

Disclosure Controls and Procedures

We carried out an evaluation required by the Securities Exchange Act of 1934, as amended (the “1934 Act”), under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the 1934 Act) as of September 26, 2020.  Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of September 26, 2020, our disclosure controls and procedures were effective.

Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

On October 9, 2020, an alleged stockholder filed a derivative lawsuit in the U.S. District Court for the Middle District of Tennessee, purportedly on the Company's behalf, against all current and two former members of our Board of Directors, and the Company as a nominal defendant, seeking monetary damages, interest, corporate governance changes, disgorgement, restitution, mandated community investment, punitive damages, and an award of attorneys' fees, expert fees, and costs. Plaintiffs allege that: (a) defendants misrepresented and omitted material facts in the Company's proxy statements with respect to diversity; (b) defendants breached their fiduciary duties by permitting the Company to disseminate materially misleading and inaccurate information regarding the Company’s commitment to diversity; and (c) defendants received unjust compensation and were unjustly enriched. While the Company continues to evaluate these claims, we do not believe this litigation will have a material impact on our financial position or results of operations.

The Company is also involved in various other litigation matters arising in the ordinary course of business. The Company believes that, based upon information currently available, any estimated loss related to such matters has been adequately provided for in accrued liabilities to the extent probable and reasonably estimable. Accordingly, the Company currently expects these matters will be resolved without material adverse effect on its consolidated financial position, results of operations, or cash flows.  However, litigation and other legal matters involve an element of uncertainty. Future developments in such matters, including adverse decisions or settlements or resulting required changes to the Company's business operations, could affect our consolidated operating results when resolved in future periods or could result in liability or other amounts material to the Company's Condensed Consolidated Financial Statements.

Item 1A.  Risk Factors

The risk factors described in Part I, Item 1A. “Risk Factors” in our 2019 10-K should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings with the SEC, in connection with evaluating the Company, our business, and the forward-looking statements contained in this Quarterly Report on Form 10-Q. Other risks that we do not presently know about or that we presently believe are not material could also adversely affect us. The risk factors described below update the risk factors disclosed in Part I, Item 1A. “Risk Factors” in our 2019 10-K, to include additional information, and should be read in conjunction with the risk factors in our 2019 10-K.

The COVID-19 coronavirus pandemic could have a material negative effect on our results of operations, cash flows, financial position, and business operations.

The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty, and volatility which may negatively affect our business operations.

We are unable to predict the impact that COVID-19 will have on our results of operations, cash flows, financial position, and business operations due to numerous uncertainties. These uncertainties include, but are not limited to: the severity of the virus; the duration of the pandemic; governmental actions which include restrictions on our operations up to and including potential closure of our stores and distribution centers; the duration and degree of quarantine or shelter-in-place measures, including additional measures that may still occur; impacts on our supply chain which include suppliers of our products and our

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transportation vendors; the health of our workforce and our ability to maintain staffing needs to operate our business; how macroeconomic factors evolve including unemployment rates and recessionary pressures; the impact of the crisis on consumer shopping patterns, both during and after the crisis; volatility in the economy as well as the credit and financial markets during and after the pandemic; the incremental costs of doing business during the crisis as well as on a long-term basis; potential increases in insurance premiums, medical claims costs, and workers' compensation claim costs; unknown consequences on our business performance and initiatives stemming from the substantial investment of time and other resources to the pandemic response; potential delays in growth initiatives including the timing of new store openings; potential adverse effects on our internal control environment and information security as a result of changes to a remote work environment; and the long-term impact of the crisis on our business.

In addition, we cannot predict the impact that the pandemic will have on our manufacturers and suppliers of our products and other business partners such as service vendors; however, any material effect on these parties could adversely impact our results of operations and our ability to operate our business effectively.

The COVID-19 coronavirus pandemic could have a material negative effect on our supply chain.

Circumstances surrounding and related to the COVID-19 pandemic have created unprecedented impacts on the global supply chain. Our business relies on an efficient and effective supply chain, including the manufacture and transportation of our products as well as the effective functioning of our distribution centers. Impacts related to the COVID-19 pandemic are placing strain on the domestic and international supply chain that could negatively affect the flow or availability of our products and result in higher out-of-stock inventory positions due to difficulties in timely obtaining product from the manufacturers and suppliers of our products as well as transportation of those products to our distribution centers and stores. Further, we may have to source products from different manufacturers or geographic locations which could result in, among other things, higher product costs, increased transportation costs, delays in receiving products or lower quality of the products.

Additionally, the operation of our distribution centers is crucial to our business operations. If our distribution centers experience closures or worker shortages, whether temporary or sustained, we could sustain significant adverse impacts related to the flow or availability of products to our stores and customers.

Any of these circumstances could adversely affect our ability to deliver inventory in a timely manner, which could impair our ability to meet customer demand for products and result in lost sales, increased supply chain costs, or damage to our reputation.

Economic impacts stemming from the COVID-19 coronavirus pandemic could significantly impact our financial position, including liquidity, capital allocation, and access to capital markets for additional funds to operate our business.

In an effort to strengthen our liquidity and preserve cash while navigating the COVID-19 pandemic, we have taken preemptive actions, including incremental borrowings under our debt facilities and suspension of our share repurchase program.

The increased debt levels have increased our interest expense costs and could place us at higher risk of default or limit our future financial flexibility. Further, the financial and credit markets have and may continue to experience significant volatility and turmoil. Whether due to our increased debt levels or to ongoing changes in the financial and credit markets, our ability to access capital on favorable terms and continue to meet our liquidity needs could be adversely affected.

Additionally, changes in our capital allocation strategy could have significant adverse impacts, both short- and long-term, on our business, results of operations, and financial position. Suspension of our share repurchase program, depending on duration, will negatively impact our earnings per share which in turn could adversely impact our common stock price. While not contemplated at this time, any potential suspension or reduction in our dividend declaration could have an adverse impact on investor perception and our common stock price.

Actions taken to protect the health and safety of our team members and customers during the COVID-19 coronavirus pandemic have increased our operating costs and may not be sufficient to protect against operational or reputational harm to our business.

In response to the COVID-19 pandemic, we have taken a number of actions across our business to help protect our team members, customers, and others in the communities we serve. These measures include personal protective equipment for our team members, a requirement to wear masks in our facilities, increased staffing in order to provide contact-free curbside pickup from stores, expansion of our capabilities to support delivery to customer homes, increased cleaning and sanitizing measures, and monitoring for “social distancing” directives, as well as additional cleaning materials in our facilities. Additionally, we have provided appreciation bonuses as well as permanent increases in compensation and benefits for our team members in our

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stores and distribution centers to further support them during and after the COVID-19 pandemic. Actions such as these have resulted in significant incremental costs and we expect that we will continue to incur these costs for the foreseeable future, which in turn will have an adverse impact on our results of operations.

The health and safety of our team members and customers are of primary concern to our management team. However, due to the unpredictable nature of this virus and the consequences of our actions, we may see unexpected outcomes notwithstanding our added safety measures. For instance, if we do not respond appropriately to the pandemic, or if our customers do not participate in “social distancing” and other safety measures, the well-being of our team members and customers could be jeopardized. Furthermore, any failure to appropriately respond, or the perception of an inadequate response, could cause reputational harm to our brand and subject us to claims and litigation from team members, customers and service providers.

Additionally, an outbreak of confirmed cases of COVID-19 in our stores or distribution centers could result in temporary or sustained workforce shortages or facility closures which would negatively impact our underlying business and results of operations.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Stock repurchase activity during the third quarter of fiscal 2020 was as follows:

Period		Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
June 28, 2020 - July 25, 2020		—	$	—	—	$	1,223,586,890
July 26, 2020 - August 22, 2020	(a)	2,305	147.94		—	1,223,586,890
August 23, 2020 - September 26, 2020		—	—		—	1,223,586,890
Total		2,305	$	147.94	—	$	1,223,586,890

(a) The number of shares purchased and average price paid per share includes 2,305 shares withheld from vested stock awards to satisfy employees’ minimum statutory tax withholding requirements for the period of July 26, 2020 - August 22, 2020.

Share repurchases were made pursuant to the share repurchase program described under Part I Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations. We expect to implement the balance of the repurchase program through purchases made from time to time either in the open market or through private transactions, in accordance with regulations of the SEC and other applicable legal requirements.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

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Item 6.  Exhibits

Exhibit

3.1*        Restated Certificate of Incorporation, as amended, of the Company (restated for SEC filing purposes only).

3.2        Fifth Amended and Restated By-laws, as amended (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed with the Commission on May 7, 2020, Commission File No. 000-23314, and incorporated herein by reference).

4.1*        Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended: our common stock.

10.1        Form of Change in Control Agreement by and between Tractor Supply Company and Melissa Kersey (filed as exhibit 10.1 to Current Report on Form 8-K, filed with the Commission on March 1, 2019, Commission File No. 000-23314, and incorporated herein by reference).+

10.2        Transition Agreement, dated October 14, 2020, by and between Tractor Supply Company and Benjamin F. Parrish (filed as exhibit 10.1 to Current Report on Form 8-K, filed with the Commission on October 16, 2020, Commission File No. 000-23314, and incorporated herein by reference).+

10.3*        Third Amendment to Credit Agreement and Release of Guarantors, dated October 16, 2020, by and among Tractor Supply Company, as Borrower, certain subsidiaries of Tractor Supply Company, certain lenders, and Wells Fargo Bank, National Association, as Administrative Agent and Lender.

10.4*        First Amendment to Note Purchase and Private Shelf Agreement, dated October 16, 2020, by and among Tractor Supply Company, certain subsidiaries of Tractor Supply Company, PGIM, Inc. and certain affiliates of PGIM, Inc.

31.1*        Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*        Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*        Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

101*        The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 26, 2020, formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Stockholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

104*        The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 26, 2020, formatted in Inline XBRL (included in Exhibit 101).

*     Filed herewith

+    Management contract or compensatory plan or arrangement

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			TRACTOR SUPPLY COMPANY
Date:	October 22, 2020	By:	/s/ Kurt D. Barton
			Kurt D. Barton
			Executive Vice President - Chief Financial Officer and Treasurer
			(Duly Authorized Officer and Principal Financial Officer)

Page 34

EX-3.1

RESTATED

CERTIFICATE OF INCORPORATION

OF

TRACTOR SUPPLY COMPANY

(Under Sections 242 and 245 of the General Corporation Law)

THE UNDERSIGNED, being the Chairman of the Board and Chief Executive Officer of Tractor Supply Company, a Delaware corporation (the "Corporation"), does hereby certify that:

1. The name of the Corporation is Tractor Supply Company. The Corporation was originally incorporated under the name TSC Acquisition, Inc.

2. The Certificate of Incorporation of the Corporation was originally filed with the Secretary of State of the State of Delaware on December 2, 1982.

3. This Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware by the written consent of the Board of Directors and the stockholders of the Corporation pursuant to Sections 141(f) and 228, respectively, of the General Corporation Law of the State of Delaware.

4. The text of the Restated Certificate of Incorporation of the Corporation, as so restated, integrated and amended, shall read in its entirety as follows:

FIRST: NAME. The name of the Corporation is Tractor Supply Company.

SECOND: REGISTERED OFFICE AND REGISTERED AGENT. The address of the registered office of the Corporation in the State of Delaware is c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

THIRD: PURPOSE. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. The Corporation shall possess and may exercise all the powers and privileges granted by the General Corporation Law of the State of Delaware or by any other law or this Certificate of Incorporation, together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Corporation.

     FOURTH: CAPITAL STOCK. The total number of shares of stock that the Corporation shall have authority to issue is 400,040,000 shares of capital stock, of which (a) 400,000,000 shares shall be of a class designated “Common Stock,” par value $.008 per share, and (b) 40,000 shares shall be of a class designated “Preferred Stock,” par value $1.00 per share (of which 20,000 shares shall be of a series designated “Series B Preferred Stock”). The powers, preferences, rights, qualifications, limitations and restrictions of or on the shares of the capital stock of the Corporation are as follows:

1. Common Stock.

Each holder of Common Stock shall be entitled to vote at any time on matters presented to the stockholders of the Corporation for their approval, adoption or authorization and shall have one vote for each share of Common Stock held of record by him. Unless prevented by applicable law, all shares of Common Stock shall vote as a single class on all matters requiring the approval of the stockholders of the Corporation.

Each holder of Common Stock shall be entitled to dividends ratably with all other shares of Common Stock outstanding when, if and as such dividends are declared and paid. The Corporation shall not make any payment on Common Stock, effect any split of Common Stock, or allocate any benefit or preference to Common Stock, except in proportion to the total number of shares of Common Stock then outstanding.

1. Preferred Stock.

(A) General.

(1) The Preferred Stock may be issued from time to time in one or more series of any number of shares, provided that the aggregate number of shares issued and not canceled of any and all such series shall not exceed the total number of shares of Preferred Stock authorized herein.

(2) Authority is hereby vested in the Board of Directors of the Corporation to issue from time to time the Preferred Stock as Preferred Stock of any series and, in connection with the creation of each such series, to fix by resolution or resolutions providing for the issuance of shares thereof the voting rights, if any, the designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions, of such series to the full extent now or hereafter permitted by this Restated Certificate of Incorporation, applicable law and the rules and regulations of the stock exchange or automated quotation system upon which any of the Corporation's securities may from time to time be listed or approved for quotation and trading, in respect of the matters set forth in the following paragraphs (a) through (e) inclusive:

(a) the liquidation value to which each share shall be entitled and the preference, if any, in relation to any other series or class of securities of the Corporation;

(b) whether such shares shall be convertible into Common Stock and if so, the ratio of conversion expressed in whole and/or fractional shares of Common Stock and the terms and conditions thereof;

(c) whether there shall be voting rights incident to such shares in addition to the voting rights provided by law, and, if so, the terms of such voting rights;

(d) whether such shares may be called in and retired or be otherwise subject to redemption (including redemption through the operation of a sinking fund, purchase fund or retirement fund) and if so, the terms and conditions thereof; and

(e) the dividend, if any, for such shares, together with the terms and conditions relating to the declaration and payment of such dividend and the preference, if any, in relation to any other series or class of securities of the Corporation.

(3) In addition to the foregoing, the Board of Directors may, in its discretion, assign to such Preferred Stock, in connection with each issuance thereof, such other terms, conditions, restrictions, limitations, rights and privileges as it may deem appropriate.

(B) Series B Preferred Stock. The Series B Preferred Stock has heretofore been established by the Board of Directors of the Corporation as follows:

"RESOLVED, that pursuant to the authority granted and vested in the Board of Directors of the Corporation in accordance with the provisions of the Restated Certificate of Incorporation of the Corporation, as amended, the Board of Directors does hereby provide for the creation and issuance of a series of the Preferred Stock of the Corporation and does hereby fix the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions thereof, as follows:

1. Designation and Amount. The shares of such series of Preferred Stock shall be designated as "Series B Preferred Stock" and the number of shares constituting such series shall be 20,000. The par value of such series shall be $1.00 per share. Such series shall be referred to herein as the "Series B Preferred Stock." All shares of Series B Preferred Stock shall have identical powers, preferences, rights, qualifications, limitations and restrictions.

2. Rank. Except as permitted by Section 5(b) hereof, the Series B Preferred Stock shall, with respect to dividend rights and rights on liquidation, winding up and dissolution, rank prior to all classes of the Common Stock of the Corporation, par value $.008 per share (the "Common Stock"), and to all other equity securities of the Corporation (all such Common Stock and other equity securities of the Corporation being, collectively, the "Other Securities"), to the extent and as set forth herein.

3. Dividends and Distributions.

(a) Subject to Section 3(g) below, each holder of shares of the Series B Preferred Stock shall be entitled to receive when, as and if declared by the Board of Directors of the Corporation out of funds legally available for the payment of dividends, dividends payable in cash or shares of stock of the Corporation. Dividends shall accrue cumulatively on each outstanding share of Series B Preferred Stock at a rate per annum (computed on the basis of a 365-day year and on the actual number of days elapsed) on the Stated Value of such share equal to the rate set forth below, and no more, for the applicable period:

Period	Rate
Date of Issue - April 30, 1999	8%
May 1, 1999 - April 30, 2000	10%
May 1, 2000 - April 30, 2001	11%
May 1, 2001 - April 30, 2002	12%
Thereafter	13%

(b) Such dividends shall be payable in equal semi-annual payments on each May 1 and November 1, commencing on November 1, 1991 (each such date being a "Dividend Payment Date"). Each such semi-annual dividend shall be fully cumulative and shall accrue (whether or not declared, whether or not in any dividend period or dividend periods the Corporation shall have sufficient funds available for the payment of required

dividends and whether or not the Corporation shall otherwise then have the power to declare or pay dividends) from the first day of the semi-annual period in which such dividend may be payable as herein provided, except that with respect to the first semi-annual dividend on each share of Series B Preferred Stock, such dividend shall accrue from the date of issue of the Series B Preferred Stock. No premium or additional amount of interest, or sum of money in lieu of interest, shall be payable in respect of any Series B Preferred Stock dividend payment or payments which may be in arrears. All dividend payments on the Series B Preferred Stock shall be made in cash, except that, to the extent permitted by the General Corporation Law of the State of Delaware (the "GCL"), in lieu of payment in cash, dividend payments may be made, in the sole discretion of the Board of Directors of the Corporation, by the Corporation issuing additional fully paid and nonassessable shares of Series B Preferred Stock, or fraction thereof, at the rate of one share for each $1,000 of such dividend not paid in cash.

The issuance of such additional shares shall, along with any payments in cash, constitute full payment of such dividend.

Any shares of Series B Preferred Stock issued in payment of dividends shall be entitled to receive and be paid dividends with all other shares of Series B Preferred Stock at the time outstanding, commencing on the next following Dividend Payment Date.

(c) All dividends paid with respect to shares of Series B Preferred Stock pursuant to this Section 3 shall be paid cumulatively to the holders of record on the record date for any dividend declared thereon, without regard to the record ownership of any shares on any prior Dividend Payment Date and shall be paid pro rata to the holders entitled thereto.

(d) Except as permitted by Section 5(b) hereof,(i) each holder of shares of the Series B Preferred Stock shall be entitled to receive the dividends specified in this Section 3 in preference to and in priority over any dividends on any of the Other Securities and (ii) so long as any shares of the Series B Preferred Stock are outstanding, the Corporation shall not declare, pay or set apart for payment any dividend on, or directly or indirectly purchase or incur any mandatory redemption, sinking fund or other similar obligation in respect of, any of the Other Securities or any warrants, rights, calls or options exercisable for or convertible into any of the Other Securities, or make any distribution in respect thereof, either directly or indirectly, whether in cash or obligations of the Corporation or other property, unless prior to or concurrently with such declaration, payment, setting apart for payment, purchase, redemption or distribution, as the case may be, (A) the Corporation shall have paid all accrued and unpaid dividends on the Series B Preferred Stock not paid on the Dividend Payment Dates and (B) the Corporation shall then be in compliance with all of its other obligations relating to the Series B Preferred Stock.

(e) Each fractional share of Series B Preferred Stock outstanding shall be entitled to a ratably proportionate amount of all dividends accruing with respect to each outstanding share of Series B Preferred Stock pursuant to this Section 3. All such dividends on such outstanding fractional shares shall accrue and be payable in the same manner and at the same times as such dividends on such outstanding shares of Series B Preferred Stock.

(f) All dividends accrued or issued under this Section 3 shall be rounded to the nearest cent or one hundredth (1/100) of a share, as the case may be. Any provision of this Section 3 to the contrary notwithstanding, no adjustment in any dividend shall be made if the amount of such adjustment would be less than one cent ($.01) or one hundredth (1/100) of a share, as the case may be, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time that such amount, together with any other amount or amounts so carried forward, shall aggregate one cent ($.01) or one hundredth (1/100) of a share, as the case may be, or more.

(g) Notwithstanding any other provision of this Section 3, the Corporation shall not pay dividends on or with respect to the Series B Preferred Stock on any Dividend Payment Date to the extent that the

payment of such dividends on such Dividend Payment Date would constitute or result in a default by the Corporation under any agreement for borrowed money, promissory note or other debt instrument to which the Corporation is a party or by which it is bound, provided that all such unpaid dividends shall be accrued in accordance with Section 3(b) above.

4. Liquidation, Sale, etc.

(a) In the event of any voluntary or involuntary liquidation, distribution of assets (other than the payment of dividends), dissolution or winding-up of the Corporation (collectively, a "Liquidation"), the holders of the Series B Preferred Stock shall be entitled to receive out of assets of the Corporation available for distribution to its stockholders an amount in cash equal to $1,000 for each share of Series B Preferred Stock outstanding plus an amount in cash equal to all accrued and unpaid dividends payable to them pursuant to Section 3 hereof, if any. Except as permitted by Section 5(b) hereof, no payments shall be made and no assets shall be distributed to the holders of any shares of any Other Securities upon Liquidation unless all of the holders of the Series B Preferred Stock shall have received payment of the full amount so due. If the assets of the Corporation shall be insufficient to pay in full such preferential amounts, then such assets shall be distributed among the holders of the Series B Preferred Stock ratably in accordance with the respective amounts which would be payable on such shares if all amounts payable thereon were paid in full. For purposes of this Section 4, the sale, lease, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Corporation and the consolidation or merger of the Corporation with or into any other corporation shall be deemed a Liquidation within the meaning of this Section 4.

(b) The Board of Directors of the Corporation shall not enter into or approve any contract or agreement providing for, consummate any transaction involving, or otherwise cause or permit to occur, any acquisition of the Corporation by one or more Persons by way of consolidation or merger (resulting in the exchange of the outstanding shares of capital stock of the Corporation for cash, securities or other property), or any sale or lease of all or substantially all of the property or assets of the Corporation (any such acquisition, lease or sale being an "Event"), unless such contract, agreement or transaction provides that any distribution of cash, securities or other property made pursuant to the terms of such Event shall first be made to or set apart for holders of shares of the Series B Preferred Stock in an amount equal in value (in the case of securities or other property, as determined in good faith by the Board of Directors of the Corporation) to (i) $1,000 for each share of Series B Preferred Stock outstanding plus (ii) all accrued and unpaid dividends, if any on the shares of Series B Preferred Stock held by them; provided, that the rights of the holders of shares of the Series B Preferred Stock to receive any such cash, securities or other property pursuant to this Section 4(b) shall be subject to the consummation of such Event.

(c) The liquidation payment with respect to each outstanding fractional share of Series B Preferred Stock shall be equal to a ratably proportionate amount of the liquidation payment with respect to each outstanding share of Series B Preferred Stock.

5. Voting.

(a) Except as hereinafter provided in this Section 5 or as expressly required by the GCL or other applicable law, the holders of shares of Series B Preferred Stock shall not be entitled to vote their shares with respect to any matter brought before the stockholders (or any class of stockholders) of the Corporation.

(b) So long as any shares of the Series B Preferred Stock are outstanding, the Corporation shall not, without the consent of the holders of at least a majority of the shares of Series B Preferred Stock then outstanding, voting separately as a class (which consent shall be given in writing or by vote at a meeting of stockholders called for such purpose for which notice shall have been given to the holders of the Series B Preferred Stock):

(i) in any manner amend, alter or repeal any provision hereof or of the Restated Certificate of Incorporation or By-laws of the Corporation so as to affect adversely the designations, powers, preferences, rights, qualifications, limitations or restrictions of the Series B Preferred Stock;

(ii) create, authorize or issue (other than as contemplated herein) any class or series of capital stock, or reclassify any shares of any class or series of capital stock into shares of any class or series of capital stock, (A) on a parity with or having priority over the Series B Preferred Stock or (B) affecting adversely the Series B Preferred Stock or the holders thereof;

(iii) increase the authorized number of shares of Series B Preferred Stock (except as may be necessary to permit the payment of one or more stock dividends pursuant to Section 3 hereof) or reclassify any shares of the Series B Preferred Stock; or

(iv) consolidate with or merge with or into any other corporation or sell, lease, transfer or otherwise dispose of all or substantially all of its assets.

(c) (i)           If at any time a dividend on the Series B Preferred Stock shall be accrued and unpaid in whole or in part on a Dividend Payment Date, and such dividend shall remain unpaid in whole or in part for more than 45 days following such Dividend Payment Date, then, during the period commencing on the day following the end of such 45-day period and ending on the earlier of (A) the date on which all accrued and unpaid dividends on the Series B Preferred Stock shall have been paid and (B) the date on which a Change in Control (as defined in Section 5(d) below) shall have occurred (each such period being a "Default Period"), the Corporation shall not, and shall not permit any Subsidiary to, directly or indirectly, without the consent of the holders of at least a majority of the shares of Series B Preferred Stock then outstanding, voting separately as a class (which consent shall be given in writing or by vote at a meeting of stockholders called for such purpose for which notice shall have been given to the holders of the Series B Preferred Stock):

(1) (a) make or own any Investment, (b) purchase or otherwise acquire any assets other than assets used in the ordinary course of business, or (c) become liable for any liability or obligation of any other Person (including, without limitation, by way of a guaranty), except that:

(x)           the Corporation may make and continue to own Permitted Investments;

(y)           the Corporation may continue to own Investments in any Subsidiary, or any capital stock of any other Person, outstanding on the day prior to such Dividend Payment Date; and

(z)           the Corporation may remain liable for any liability or obligation of another Person to the extent that such liability of the Corporation was outstanding on the day prior to such Dividend Payment Date;

(2) declare, order, pay, make or set apart for payment any Restricted Payment;

(3) make Capital Expenditures aggregating in excess of $300,000;

(4) take any action, including, without limitation, with respect to the capitalization of the Corporation, which would have the effect, directly or indirectly, of reducing the funds then or thereafter legally available for the payment of dividends on or redemption of the Series B Preferred Stock;

(5) enter into any contractual or other commitment, arrangement or transaction with any Affiliate (other than a holder of Series B Preferred Stock), including, without limitation, the purchase, sale or exchange of property or the rendering of any service to any Affiliate (other than a holder of Series B Preferred Stock), other than (a) upon terms which are fair and reasonable, in the good faith judgment of the Board of Directors of the Corporation, and no less favorable to the Corporation or to any Subsidiary than it would obtain in a comparable arms-length transaction with a Person not an Affiliate; and (b) the payments and actions permitted under the terms of Section 9(a)(x) hereof;

(6) make any optional prepayment in respect of any Indebtedness; or

(7) agree to take any of the actions referred to in clauses (1) through (6) above.

(ii)           Upon the termination of any Default Period existing from time to time, the covenants set forth in clauses (1) through (7) above shall thereafter be of no further force or effect, subject to renewal from time to time upon the same terms and conditions as are set forth in Section 5(c)(i) above.

(d) (i)           During the duration of any of the periods of time described in clauses (A) or (B) below (each such period being a "Special Voting Period"), the holders of the Series B Preferred Stock, voting separately as a class, shall be entitled to elect the smallest number of directors which will constitute a majority of the Board of Directors of the Corporation (each such election being a "Change in Control") and the holders of the other classes of the capital stock of the Corporation entitled to vote on the election of directors shall be entitled to elect the remaining members of the Board of Directors:

(A) If at any time dividends on the Series B Preferred Stock shall be accrued and unpaid in whole or in part for two or more consecutive Dividend Payment Dates, and such dividends shall remain unpaid in whole or in part for more than 30 days following the second such Dividend Payment Date, then a Special Voting Period shall commence on the day after such 30-day period and shall continue until the date on which all accrued and unpaid dividends on the Series B Preferred Stock shall have been paid in full.

(B) If any shares of the Series B Preferred Stock shall be outstanding after April 30, 2003, then a Special Voting Period shall commence on May 1, 2003 and shall continue until the Corporation shall have redeemed all of the outstanding shares of Series B Preferred Stock in accordance with Section 7 hereof.

(ii)           Upon termination of all Special Voting Periods existing from time to time, the rights of the holders of the Series B Preferred Stock to elect a majority of the Board of Directors pursuant to this Section 5(d) shall cease, subject to renewal from time to time upon the same terms and conditions as are set forth in this Section 5(d).

(iii)                      At any time after the voting power to elect a majority of the Board of Directors (such directors sometimes hereinafter referred to as the "B Directors") shall have become vested in the holders of the Series B Preferred Stock pursuant to this Section 5(d), the Chairman or President of the Corporation may, and upon the request of the holders of at least ten percent (10%) of the Series B Preferred Stock then outstanding addressed to him at the principal office of the Corporation shall, call a special meeting for the election of directors by the holders of each class of the capital stock of the Corporation entitled to vote for the election of directors, to be held at such place and upon such notice (but not more than 60 days' notice) as is provided in the By-laws of the Corporation for the holding of special meetings of stockholders. If such meeting shall not be so called within 30 days after delivery of such request to the principal office of the Corporation, then the record holders who requested such meeting may, at the expense of the Corporation, call such meeting at the place and upon the notice above provided, and for such purpose shall have access to the stock books and records of the Corporation.

At any meeting so called and at any annual meeting held while the holders of the Series B Preferred Stock have the voting power to elect a majority of the Board of Directors, the holders of a majority of the then outstanding Series B Preferred Stock, present in person or by proxy, shall be sufficient to constitute a quorum for the election of B Directors as herein provided. The terms of office of all persons who are directors of the Corporation at the time of such meeting shall terminate upon the election at such meeting by the holders of the Series B Preferred Stock of B Directors, and the persons so elected as B Directors by the holders of the Series B Preferred Stock, together with such persons, if any, as may be elected as directors by the holders of the other classes of the capital stock of the Corporation entitled to vote on the election of directors, shall constitute the duly elected directors of the Corporation. Notwithstanding the foregoing provisions of this clause (iii) to the contrary, such election of B Directors may be effected without a meeting of stockholders, without prior notice and without a vote if such stockholders shall consent in writing to such election of directors in accordance with the provisions of Section 228 (or any successor provision) of the GCL as then in effect.

(iv)           Whenever the holders of the Series B Preferred Stock shall be divested of such voting power pursuant to Section 5(d)(ii) above, the term of office of the directors elected by such holders shall forthwith terminate without further action, and the term of office of all other persons who are at the time directors of the Corporation shall terminate upon the election of their successors by the holders of each class of the capital stock of the Corporation (other than the Series B Preferred Stock) entitled to vote on the election of directors.

(e)           In all cases where the holders of shares of Series B Preferred Stock have the right to vote separately as a class, each such holder shall be entitled to one vote for each such share held by him.

6.           Retirement of Shares. Shares of the Series B Preferred Stock which have been issued and subsequently repurchased or reacquired in any manner by the Corporation shall become authorized and unissued shares of preferred stock but shall not be reissued as shares of Series B Preferred Stock.

7.           Redemption of Series B Preferred Stock.

(a)           Redemption. Subject to Section 7(f) below, at any time and from time to time on or after May 1, 1995, the Corporation may, at its option, repurchase all or any part of the shares of Series B Preferred Stock then outstanding (each such purchase being a "Redemption") at a price per share (the "Redemption Price") equal to the sum of (i) $1,000 and (ii) all accrued and unpaid dividends thereon to but excluding the date fixed by the Corporation for such Redemption(the "Redemption Date").

(b)           Redemption Notice.

(i)           The Corporation may cause a Redemption by giving written notice thereof (a "Redemption Notice") to all of the registered holders of shares of the Series B Preferred Stock at least 15 (but not more than 90) days prior to the Redemption Date. The Redemption Notice shall specify the Redemption Date, the time and place of the closing of such Redemption (the "Closing"), the number of shares of Series B Preferred Stock to be redeemed (the "Redemption Shares"), and the Redemption Price to be paid therefor. The Corporation shall deliver the Redemption Notice to each holder of Series B Preferred Stock at the address shown on the Corporation's record of stockholders.

(ii)           If the Redemption Notice is delivered personally against proper receipt or by confirmed telefax or telex, it shall be effective upon delivery; If it is delivered by certified or registered mail, return receipt requested, with postage prepaid, by Federal Express or similar courier service with courier fees paid by the Corporation or by telegraph or cable, it shall be effective two business days following the date when mailed, couriered, telegraphed or cabled, as the case may be.

(iii)                      Notwithstanding the prior delivery of a Redemption Notice, the Corporation may elect not to consummate a Redemption by giving written notice (in any manner permitted by clause (ii) above) of such election to all of the holders of Series B Preferred Stock at least 10 days prior to the scheduled Redemption Date. If

such notice is properly and timely given, the Corporation and such holders shall be relieved of their respective obligations with respect to such (but only such) Redemption.

(c)           Closing of Redemption. At the Closing, each holder of shares of Series B Preferred Stock shall sell his Redemption Shares to the Corporation, free and clear of any and all Liens, other than those imposed hereby or by applicable federal or state securities laws, and shall deliver to the Corporation the certificate or certificates representing such Redemption Shares, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank, with all requisite stock transfer stamps, if any, affixed thereto, against tender by the Corporation of payment of the Redemption Price therefor. The Corporation shall make such payment by certified or bank cashier's check or by wire transfer to an account designated by such holder to the Corporation at least three business days prior to the Redemption Date.

(d)           Redemption Allocation. In case only a part of the Series B Preferred Stock at the time outstanding is to be redeemed, the shares to be redeemed shall be allocated among all of the holders of record of the Series B Preferred Stock on the date such redemption is declared in proportion to their respective holdings.

(e)           Effect of Redemption. If (i) the Corporation shall have given the Redemption Notice in the manner described above, (ii) the Corporation shall have set apart all funds necessary to pay the Redemption Price for all shares of the Series B Preferred Stock to be redeemed, (iii) all such funds shall be available for the sole purpose of paying the amount due for all shares of the Series B Preferred Stock to be redeemed, and (iv) the Corporation shall have tendered payment of the Redemption Price contingent only upon surrender of the stock certificate or certificates evidencing the shares of Series B Preferred Stock to be redeemed, duly endorsed to the Corporation; then, from and after the Redemption Date, the shares of Series B Preferred Stock to be redeemed pursuant to the Redemption Notice shall be deemed to no longer be outstanding, and all rights with respect to such shares shall forthwith cease, except the right of the former holders thereof to receive the Redemption Price therefor, without interest.

(f)           Corporation Prohibited by Law or Otherwise. Notwithstanding any other provision hereof to the contrary, the Corporation shall not repurchase shares of the Series B Preferred Stock to the extent that it does not have funds legally available therefor or if such Redemption is prohibited by, or counsel to the Corporation reasonably believes that such Redemption is prohibited by, or would constitute or result in a default under, any applicable federal or state law, rule or regulation or any agreement, promissory note or debt instrument to which the Corporation is a party or by which it is bound.

8.           No Conversion Right. The Series B Preferred Stock shall not be convertible into Common Stock.

9.           General Provisions.

(a)           As used herein:

(i)           The term "Affiliate" means any Person controlling, controlled by or under common control with the Corporation. For purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

(ii)           The term "Capital Expenditures" means, for any period, the aggregate of all expenditures, including obligations under capital leases (as determined in accordance with GAAP), of the Corporation and its Subsidiaries taken as a whole during such period that, in conformity with GAAP, are required to be capitalized and reflected in the property, plant and equipment or similar fixed asset accounts on the consolidated balance sheet of the Corporation.

(iii)                      The term "GAAP" means generally accepted accounting principles as in effect in the United States as of the time and for the period as to which such accounting principles are to be applied.

(iv)           The term "Indebtedness" means, as applied to any Person, (A) any indebtedness for borrowed money which such Person has directly or indirectly created, incurred or assumed, (B) all obligations secured by any Lien on any property or asset owned or held by such Person subject thereto, whether or not the obligations secured thereby shall have been assumed, (C) any indebtedness of the character referred to in clauses (A) or (B) of this definition deemed extinguished under GAAP but for which such Person remains legally liable, and (D) all liabilities and obligations of others with respect to which such Person has become liable or obligated (including, without limitation, by way of a guaranty).

(v)           The term "Investment" means, as applied to any Person, any direct or indirect purchase or other acquisition by such Person of the capital stock or other securities of any other Person, or any direct or indirect loan, advance (other than advances to employees or consultants for moving and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by such Person to any other Person, including all Indebtedness and accounts receivable from such other Person which are not current assets or did not arise from sales to such other Person in the ordinary course of business.

(vi)           The term "Lien" means, as applied to any Person, any mortgage, lien, pledge, adverse claim, charge, security interest or other encumbrance existing on such date in or on, or any interest or title existing on such date of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or capital lease (which is classified and accounted for as such in accordance with GAAP) with respect to, any property or asset of such Person, or the signing or filing of any financing statement which names such Person as debtor, or the signing of any then-effective security agreement authorizing any other party as the secured party thereunder to file any financing statement.

(vii)                      The term "outstanding", when used with reference to shares of stock, means issued shares, excluding shares held by the Corporation.

(viii)                      The term "Permitted Investments" means (A) marketable direct obligations issued or unconditionally guaranteed by the United States of America and maturing within one year from the date of acquisition thereof by the Corporation, (B) time deposits or certificates of deposit of a domestic bank having a capital surplus and undivided profits of at least $100,000,000; provided, that the aggregate amount of such deposits shall not exceed $5,000,000 at any time, (C) commercial paper of a domestic issuer rated either A1 or better by Standard & Poor's Corporation or P1 or better by Moody's Investors Service, Inc. and maturing within 270 days from the date of acquisition thereof by the Corporation, and (D) shares or other interests in any investment company which invests only in investments of the type specified in clauses (A) through (C) above; provided, that the aggregate amount permitted by this clause (D) shall not at any time exceed $2,500,000.

(ix)           The term "Person" means any corporation, partnership, trust, organization, association or other entity or individual.

(x)           The term "Restricted Payment" means, as applied to any Person (A) any redemption, retirement, purchase or other acquisition, direct or indirect, of any shares of the capital stock of such Person then outstanding, or of any warrants, rights or options to acquire any shares of capital stock, or any inducements to any other Person to acquire, vote or sell, or to abstain from acquiring, voting or selling, shares of the capital stock of such Person, except any redemption or purchase of shares of the Series B Preferred Stock pursuant to Section 7 hereof or of any class or series of capital stock created, authorized or issued pursuant to Section 5(b)(ii) hereof; and (B) any direct or indirect loan, extension of credit or advance (other than advances to employees and consultants for moving and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) to any Person directly or indirectly holding any shares of stock of such Person.

(xi)           The term "Stated Value" means, with respect to a share of Series B Preferred Stock, $1,000.

(xii)                      The term "Subsidiary" means any corporation, the majority of the voting stock of which is owned, directly or indirectly through one or more Subsidiaries, by the Corporation.

(b)           All shares of Series B Preferred Stock which may be issued on a Dividend Payment Date in lieu of payment in cash will, upon issuance by the Corporation, be duly and validly issued, fully paid and nonassessable, free from all taxes and Liens with respect to the issuance thereof, and the Corporation shall take no action which will cause a contrary result.

(c)           The headings contained herein are for convenience of reference only and shall not define, limit or otherwise affect in any way the meaning or interpretation of any of the terms or provisions hereof.

FURTHER RESOLVED, that the Corporation hereby reserves, at all times so long as any shares of the Series B Preferred Stock shall remain outstanding, free from preemptive rights, out of its treasury stock or its authorized but unissued shares of Series B Preferred Stock, or both, a sufficient number of shares of Series B Preferred Stock to provide for any and all dividend payments to be made by the Corporation issuing additional fully paid and nonassessable shares of Series B Preferred Stock in lieu of payment in cash."

FIFTH: MANAGEMENT AND AFFAIRS OF THE CORPORATION.

1.           The number of directors constituting the whole Board will be as set forth in the By-Laws of the Corporation.

2.           Commencing at the 2005 annual meeting of stockholders, directors will be elected at each annual meeting of stockholders of the Corporation and will hold office for a term expiring at the next annual meeting of stockholders or until their successors are elected and qualified or until their earlier resignation or removal.

3.           In furtherance of and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, amend or repeal the By-Laws of the Corporation.

4.           The election of directors need not be by written ballot.

5.           Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the By-Laws of the Corporation.

SIXTH: REORGANIZATION. Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this corporation under the provisions of ss.291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of ss.279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agrees to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation.

SEVENTH: LIMITATION OF LIABILITY OF DIRECTORS. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of his fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the director derived an improper personal benefit. If the General Corporation Law of the State of Delaware is amended after the date hereof to authorize corporate action further eliminating or limiting the liability of directors, then the liability of each director of the Corporation shall automatically be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware, as so amended. Any repeal or modification of the provisions of this Article SEVENTH shall not adversely affect any right or protection of a director of the Corporation existing pursuant to this Article SEVENTH at the time of such repeal or modification.

EIGHTH: AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute.

EX-4.1

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

As of September 26, 2020, Tractor Supply Company had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common stock.

In this Exhibit 4.1, when we refer to the “Company,” “we,” “us” or “our” or when we otherwise refer to ourselves, we mean Tractor Supply Company, excluding, unless otherwise expressly stated, our subsidiaries and affiliates.

The following description is a summary of the material terms of our Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”) and our Fifth Amended and Restated By-laws, as amended (the “By-laws”), as currently in effect. This description is subject to, and qualified in its entirety by reference to, our Certificate of Incorporation and our By-laws, both of which are exhibits to the Quarterly Report on Form 10-Q of which this Exhibit 4.1 is a part. We encourage you to read our Certificate of Incorporation, our By-laws and the applicable provisions of the Delaware General Corporation Law (“DGCL”), for additional information.

Authorized Capital

As of September 26, 2020, our authorized capital stock consisted of 400,000,000 shares of common stock, par value $.008 per share, and 40,000 shares of preferred stock, par value $1.00 per share, of which 20,000 shares are designated Series B Preferred Stock.

Common Stock

Voting Rights. Under the terms of the Certificate of Incorporation, each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Our stockholders do not have cumulative voting rights. Because of this, the holders of a majority of the shares of common stock entitled to vote and present in person or by proxy at any annual meeting of stockholders are able to elect all of the directors standing for election, if they should so choose.

Dividends. Subject to preferences that may be applicable to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Board of Directors out of legally available assets or funds.

Liquidation. In the event of our liquidation, dissolution, or winding up, holders of common stock are entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.

Rights and Preferences. Holders of common stock have no preemptive or conversion rights, and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences, and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock, which we may designate in the future.

Board of Directors

The By-laws provide for a Board of Directors of not less than one member, the exact number to be determined from time to time by resolution adopted by the affirmative vote of a majority of the total number of directors then in office. The By-laws provide that directors will be elected to hold office for a term expiring at the next annual meeting of stockholders or until a successor is duly elected and qualified or until his or her earlier resignation or removal. In uncontested director elections each director is elected by the vote of the majority of the votes cast; provided, however, that in a contested election, the directors shall be elected by a plurality of the votes of the shares

present in person or represented by proxy at the meeting and entitled to vote on the election of directors. An incumbent nominee not receiving a majority of the votes cast in an uncontested election shall promptly tender his or her offer of resignation to the Board of Directors for its consideration if such director has not previously submitted a conditional offer of resignation. A recommendation on whether or not to accept such resignation offer shall be made by a committee of independent directors that has been delegated the responsibility of recommending nominees for director for appointment or election to the Board of Directors, or (1) if each member of such committee did not receive the required majority vote or (2) if no such committee has been appointed, a majority of the Board of Directors shall appoint a special committee of independent directors for such purpose of making a recommendation to the Board of Directors. If no independent directors received the required majority vote, the Board of Directors shall act on the resignation offers.

Amendment to By-laws

The Certificate of Incorporation and By-laws provide that the Board of Directors is expressly authorized to alter, amend or repeal the By-laws by the affirmative vote of a majority of the total number of directors then in office. Any amendment, alteration, change, addition or repeal of the By-laws by our stockholders shall require the affirmative vote of the holders of at least a majority of our outstanding shares, voting together as a class, entitled to vote on such amendment, alteration, change, addition or repeal.

Amendment to Certificate of Incorporation

The Certificate of Incorporation provides that the affirmative vote of the holders of at least a majority of the outstanding stock entitled to vote thereon, voting together in a single class, is required to amend or repeal any provision of, or to adopt a bylaw inconsistent with, the Certificate of Incorporation.

Special Meetings of Stockholders

The By-laws provide that special meetings of our stockholders may be called by the Chairman of the Board of Directors, the Chief Executive Officer, the President or, at the direction of a majority of the Board of Directors, the Secretary. In addition, the By-laws also provide that the Secretary shall call a special meeting of stockholders upon the written request of one or more stockholders who Net Long Beneficially Own (as such term is defined in the By-Laws), in the aggregate, not less than twenty percent (20%) of our outstanding shares of common stock, subject to specified conditions and procedural, notice and information requirements in connection with the advance notice of stockholder business and director nominations, with which requesting stockholders must comply.

Action on Written Consent

Pursuant to the Certificate of Incorporation and the By-laws, any action required by law or the By-laws to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and are delivered to us as required by law. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not so consented in writing.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our By-laws provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual or special meeting of stockholders must provide timely notice of their proposal in writing to the Secretary. Generally, to be timely, a stockholder’s notice must be delivered to, mailed and received at our principal executive offices, addressed to the Secretary, and within the following time periods:

     •     in the case of an annual meeting, no earlier than 120 days and no later than 90 days prior to the first anniversary of the date of the preceding year’s annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or the date of the current year’s annual meeting shall have been changed by more than 30 days from the anniversary date of the previous year’s annual meeting, to be timely notice by the stockholder must be received by us not later than the later of (i) the ninetieth day prior to such current year’s annual meeting or (ii) the tenth day following (1) the day on which the notice containing the date of the current year’s annual meeting is provided by us or (2) public disclosure of the current year’s annual meeting date was made, whichever first occurs; provided further, however, that any such notice which is received later than the fifth business day prior to the meeting may be disregarded; and

     •     in the case of a nomination of a person or persons for election to the Board of Directors at a special meeting of the stockholders called for the purpose of electing directors, not earlier than the 120th day prior to such special meeting and not later than the later of (i) the ninetieth day prior to such special meeting or (ii) the tenth day following (1) the day on which the notice containing the date of the special meeting is provided by us or (2) public disclosure of the special meeting date was made, whichever first occurs; provided, however, that any such notice which is received later than the fifth business day prior to the meeting may be disregarded.

In no event shall any adjournment, postponement or deferral, or public disclosure of an adjournment, postponement or deferral, of a meeting of the stockholders commence a new time period (or extend any time period) for the giving of the stockholder’s notice.

We have also adopted a proxy access right that permits a stockholder, or a group of up to 20 stockholders, owning continuously for at least three years shares of our stock representing an aggregate of at least three percent (3%) of the outstanding shares of common stock, to nominate and include in our proxy materials a number of director nominees constituting the greater of (i) twenty percent (20%) of the total number of members of the Board of Directors on the last day on which a nomination notice may be submitted pursuant to Section 1.2 of the Certificate of Incorporation (rounded down to the nearest whole number) and (ii) two nominees, provided that the stockholder(s) and the nominee(s) satisfy the requirements in our By-laws. Under our By-laws, to be considered timely, compliant notice of proxy access director nominations for next year’s proxy statement and form of proxy must be submitted to the Secretary at our principal executive office no earlier than 150 days and no later than 120 days prior to the first anniversary of the date we provided or made available our definitive proxy statement for the preceding year’s annual meeting; provided, however, that if the annual meeting is not within 30 days before or after the anniversary date of the preceding year’s annual meeting, to be timely the stockholder notice must be received no later than 180 days prior to such annual meeting or the tenth day after the day on which notice of the date of the meeting was first publicly announced or disclosed.

Authorized but Unissued Capital Stock

Our Certificate of Incorporation authorizes our Board of Directors, without further action by the stockholders and subject to any limitations imposed by the listing standards of The Nasdaq Global Select Market, to issue up to 40,000 shares of preferred stock, par value $1.00 per share, in one or more classes or series, to establish from time to time the number of shares to be included in each such class or series, to fix the rights, powers and preferences of the shares of each such class or series and any qualifications, limitations, or restrictions thereon.

Delaware law does not require stockholder approval for any issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to enable our Board of Directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise. Such an issuance may protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of common stock at prices higher than prevailing market prices.

Limitation on Directors’ Liability and Indemnification

Section 145(a) of the DGCL grants each corporation organized thereunder the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement that were actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

Section 145(b) of the DGCL grants each corporation organized thereunder the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made pursuant to Section 145(b) of the DGCL in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

Section 145(c) of the DGCL provides that to the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 145(a) and (b) of the DGCL, as described in the preceding paragraphs, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

Section 145(g) of the DGCL provides, in general, that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation against any liability asserted against the person in any such capacity, or arising out of the person’s status as such, regardless of whether the corporation would have the power to indemnify the person against such liability under the provisions of the DGCL.

Section 102(b)(7) of the DGCL enables a corporation in its certificate of incorporation, or an amendment thereto, to eliminate or limit the personal liability of a director to the corporation or its stockholders of monetary damages for violations of the directors’ fiduciary duty of care as a director, except (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for director liability in the event of unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director derived an improper personal benefit. Our Certificate of Incorporation indemnifies the directors and officers to the full extent of the DGCL and also allows the Board of Directors to indemnify all other employees. Such right of indemnification is not exclusive of any right to which such officer or director may be entitled as a matter of law and shall extend and apply to the estates, heirs, executors and administrators of such persons.

We maintain a directors’ and officers’ insurance policy. The policy insures directors and officers against losses arising from certain wrongful acts in their capacities as directors and officers and reimburses us for those losses for which we have lawfully indemnified the directors and officers. The policy contains various exclusions that are normal and customary for policies of this type.

We believe that our Certificate of Incorporation, By-laws and insurance policies are necessary to attract and retain qualified persons to serve as our directors and officers.

The limitation of liability and indemnification provisions in our Certificate of Incorporation and By-laws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and other stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers as required or allowed by these indemnification provisions.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”) may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Delaware Anti-Takeover Statute

Certain Delaware law provisions may make it more difficult for someone to acquire us through a tender offer, proxy contest or otherwise.

Section 203 of the DGCL provides that, subject to certain stated exceptions, an “interested stockholder” is any person (other than the corporation and any direct or indirect majority-owned subsidiary) who owns 15% or more of the outstanding voting stock of the corporation or is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date of determination, and the affiliates and associates of such person. A corporation may not engage in a business combination with any interested stockholder for a period of three years following the time that such stockholder became an interested stockholder unless:

•prior to such time the board of directors of the corporation approved either the business combination or transaction which resulted in the stockholder becoming an interested stockholder;

•upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the outstanding voting stock which is not owned by the interested stockholder.

The effect of these provisions may make a change in control of our business more difficult by delaying, deferring or preventing a tender offer or other takeover attempt that a stockholder might consider in its best interest. This includes attempts that might result in the payment of a premium to stockholders over the market price for their shares. These provisions also may promote the continuity of our management by making it more difficult for a person to remove or change the incumbent members of the board of directors.

Transfer Agent and Registrar

Computershare Trust Company, N.A. is the transfer agent and registrar for our common stock.

Listing

Our common stock is listed on the Nasdaq Global Select Market under the symbol “TSCO.”

EX-10.3

THIRD AMENDMENT TO CREDIT AGREEMENT AND RELEASE OF GUARANTORS

THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND RELEASE OF GUARANTORS (this “Agreement”), dated as of October 16, 2020 (the “Third Amendment Effective Date”), is entered into among TRACTOR SUPPLY COMPANY, a Delaware corporation (the “Borrower”), the Guarantors party hereto, the Lenders party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (“Administrative Agent”), Swingline Lender and Issuing Lender. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement (as defined below).

RECITALS

    A. The Borrower, the Guarantors, the Lenders, the Issuing Lender, the Swingline Lender and the Administrative Agent are parties to that certain Credit Agreement, dated as of February 19, 2016 (as amended or modified from time to time, the “Credit Agreement”).

    B. The Borrower has requested that the Lenders agree to release the Guarantors and make certain amendments to the Credit Agreement, and the Lenders have agreed to such request, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

    1.    Amendments.

(a)    The language “CERTAIN SUBSIDIARIES OF THE BORROWER FROM TIME TO TIME PARTY HERETO, as Guarantors” on the cover page of the Credit Agreement is hereby deleted in its entirety.

(b)    The language “the Guarantors (as defined herein),” in the introductory paragraph of the Credit Agreement is hereby deleted in its entirety.

(c)    The following definitions are hereby added to Section 1.1 of the Credit Agreement to read as follows:

“2017 NPA” means that certain Note Purchase and Private Shelf Agreement, dated as of August 14, 2017, among the Borrower, the other signatories thereto, and the purchasers of the 2017 NPA Notes thereunder, as the same may be amended, restated or otherwise modified from time to time.

“2017 NPA Notes” means those senior unsecured notes issued by the Borrower from time to time under the 2017 NPA.

“2020 Bonds” means those senior unsecured notes issued by Borrower, on or before December 31, 2020, in an amount up to $750,000,000.

“Third Amendment Effective Date” means October 16, 2020.

(d)    The following definitions in Section 1.1 of the Credit Agreement are hereby amended to read as follows:

“Change of Control” means the occurrence of any of the following events: (i) any Person or two or more Persons acting in concert shall have acquired “beneficial ownership,” directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, control over, Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing 40% or more of the combined voting power of all Voting Stock of the Borrower, (ii) a majority of the members of the Board of Directors of the Borrower cease to be Continuing Directors; or (iii) any event constituting a “Change of Control” under, and as defined in, any of the 2017 NPA, the 2017 NPA Notes or the 2020 Bonds.

“Credit Parties” means (a) for purposes of this Agreement other than Article VI, the Borrower and (b) for purposes of Article VI, the Borrower and its Material Subsidiaries.

“Credit Party Obligations” means, without duplication, all of the obligations of the Credit Parties to the Lenders (including the Issuing Lender and the Swingline Lender) and the Administrative Agent, whenever arising, under this Credit Agreement, the Notes or any of the other Credit Documents (including, but not limited to, any interest accruing after the occurrence of a Bankruptcy Event with respect to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy Code of the United States).

“Second Amendment” means that certain Second Amendment to Credit Agreement, dated as of the Second Amendment Effective Date, among the Borrower, the guarantors party thereto, the Lenders party thereto and the Administrative Agent.

(e)    The definitions of “Excluded Swap Obligation”, “Guarantors” “Guaranty”, “Qualified ECP Guarantor” and “Swap Obligation” in Section 1.1 of the Credit Agreement are hereby deleted in their entirety.

(f)    The parenthetical in Section 3.4(c)(vi) of the Credit Agreement shall be amended to delete the language “and the Guarantors”.

(g)    The parenthetical in Section 3.19(d)(iii) of the Credit Agreement shall be amended to delete the language “and the Guarantors”.

(h)    Article IV of the Credit Agreement is hereby amended to read as follows:

ARTICLE IV.

[RESERVED]

(i)    Section 6.12 of the Credit Agreement is hereby amended to read as follows:

Set forth on Schedule 6.12 is a complete and accurate list of all Subsidiaries of each Credit Party as of the Third Amendment Effective Date and the jurisdiction of their organization.

(j)    Section 7.12 of the Credit Agreement is hereby amended to read as follows:

7.12    [Reserved].

(k)    Section 8.1 of the Credit Agreement is hereby amended to (i) delete the “and” at the end of clause (g), (ii) replace the “.” at the end of clause (h) with “; and” and (iii) add a new clause (i) to read as follows:

            (i)    unsecured Indebtedness in respect of the 2020 Bonds.

(l)    Section 8.11 of the Credit Agreement shall be amended to read as follows:

8.11    Limitation on Restricted Actions.

The Credit Parties will not permit any Consolidated Party to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Person to (a) pay dividends or make any other distributions to any Credit Party on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, (b) pay any Indebtedness or other obligation owed to any Credit Party, (c) make loans or advances to any Credit Party, (d) sell, lease or transfer any of its properties or assets to any Credit Party, or (e) act as a guarantor and pledge its assets pursuant to the Credit Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in clauses (a) - (d) above) for such encumbrances or restrictions existing under or by reason of (i) this Credit Agreement and the other Credit

Documents, (ii) the 2017 NPA Notes, the 2017 NPA and any other documentation or instrument executed in connection therewith, (iii) any documentation or instrument governing the 2020 Bonds (provided that such documentation or instrument does not restrict the ability of the Consolidated Parties to perform their obligations under the Credit Documents), (iv) applicable law or (v) any document or instrument governing purchase money Indebtedness (including Capital Leases) permitted by this Credit Agreement, provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith.

(m)    Section 8.14 of the Credit Agreement is hereby amended to read as follows:

8.14    No Further Negative Pledges.

The Credit Parties will not permit any Consolidated Party to enter into, assume or become subject to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation, except (a) pursuant to this Credit Agreement and the other Credit Documents, (b) pursuant to any documentation or instrument governing the 2020 Bonds, (c) pursuant to any document or instrument governing purchase money Indebtedness (including Capital Leases) permitted by this Credit Agreement, provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith or (d) pursuant to any agreement governing Indebtedness permitted hereunder so long as such restriction is not more restrictive than Section 8.2 as in effect at the time such agreement is executed, except that such agreement may restrict Liens securing the Credit Party Obligations provided that such Indebtedness is either secured ratably with the Credit Party Obligations pursuant to an intercreditor agreement reasonably acceptable to the Administrative Agent and the holders of such Indebtedness or, in the case of Cash Collateral, requires that an equal amount of Cash Collateral is pledged to secure such Indebtedness.

(n)    Section 9.1(e) of the Credit Agreement is hereby amended to read as follows:

        (e)    [Reserved].

(o)    Section 9.2(d) of the Credit Agreement is hereby amended to read as follows:

(d)    Enforcement of Rights. Enforce any and all rights and interests created and existing under the Credit Documents including, without limitation, all rights of set off.

(p)    The last sentence in Section 9.3 of the Credit Agreement is hereby deleted in its entirety.

(q)    Section 10.10 of the Credit Agreement is hereby amended to read as follows:

10.10    [Reserved].

(r)    Schedule 6.12 to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 6.12 attached hereto.

(s)    Exhibit 7.12 to the Credit Agreement is hereby deleted in its entirety.

2.    Release of Guarantors. Each Guarantor is hereby unconditionally released from all of its obligations in connection with its guarantee of the Credit Party Obligations and it is agreed that Article IV of the Credit Agreement is no longer in effect. The Administrative Agent agrees to execute and deliver to the Borrower (at the expense of the Borrower) such other documents as the Borrower may reasonably request to evidence and give full effect to the release contemplated hereby.

3.    Effectiveness; Conditions Precedent. This Agreement shall be effective as of the date first set forth above upon satisfaction of the following conditions precedent:

(a)    The Administrative Agent shall have received counterparts of this Agreement duly executed by the Borrower, the Guarantors and the Lenders.

(b)    The Borrower shall have paid all fees owing to the Administrative Agent and Wells Fargo Securities, LLC.

4.    Expenses. The Borrower agrees to reimburse the Administrative Agent for all reasonable out of pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Agreement, including without limitation the reasonable and documented fees and expenses of Moore & Van Allen PLLC.

5.    Ratification of Credit Agreement. The Borrower acknowledges and consents to the terms set forth herein and agrees that this Agreement does not impair, reduce or limit any of its obligations under the Credit Documents, as amended hereby. This Agreement is a Credit Document.

6.    Authority/Enforceability. The Borrower represents and warrants as follows:

        (a)    It has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

        (b)    This Agreement has been duly executed and delivered by the Borrower and constitutes its legal, valid and binding obligations, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or other similar law and to general principles of equity.

        (c)    No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by the Borrower of this Agreement.

        (d)    The execution and delivery of this Agreement does not (i) contravene the terms of its organizational documents, (ii) violate any Requirement of Law or (iii) violate any material agreement which is binding on it or its assets.

7.    Representations and Warranties of the Credit Parties. The Borrower represents and warrants to the Lenders that after giving effect to this Agreement (a) the representations and warranties set forth in Article VI of the Credit Agreement are true and correct in all material respects as of the date hereof (except for those which expressly relate to an earlier date) and (b) no Default or Event of Default has occurred and is continuing.

8.    Counterparts/Telecopy. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. This Agreement and any other Credit Document may be executed and delivered by electronic means (including electronic image, facsimile, “.pdf”, “.tif” and “.jpeg”), and thereupon such agreement, certificate or instrument shall be treated in each case and in all manner and respects and for all purposes as an original agreement, certificate or instrument and shall be considered to have the same binding legal effect as if it were an original manually-signed counterpart thereof delivered in person. No party to this Agreement or any other Credit Document shall assert the fact that electronic means were used to make or deliver a signature, or the fact that any signature, agreement, certificate or instrument was created, transmitted or communicated through the use of electronic means, as a defense to the formation, effectiveness, validity or enforceability of any such agreement, certificate or instrument.

9.    GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

10.    Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

11.    Headings. The headings of the sections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

12.    Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[signature pages follow]

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

BORROWER:                    TRACTOR SUPPLY COMPANY,

a Delaware corporation

By:

Name:    Kurt D. Barton

Title:    Executive Vice President and Chief Financial Officer

For Purposes of Acknowledging Section 2 of this Amendment:

SUBSIDIARY

GUARANTORS:                TRACTOR SUPPLY CO. OF MICHIGAN, LLC,

a Michigan limited liability company

By: Tractor Supply Company, a Delaware corporation, its sole member

By:

Name:    Kurt D. Barton

Title:    Executive Vice President and Chief Financial Officer

TRACTOR SUPPLY CO. OF TEXAS, LP,

a Texas limited partnership

By: Tractor Supply Company, a Delaware corporation, its General Partner

By:

Name:    Kurt D. Barton

Title:    Executive Vice President and Chief Financial Officer

ADMINISTRATIVE

AGENT:            WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

By:

Name:

Title:

LENDERS:            WELLS FARGO BANK, NATIONAL ASSOCIATION,

                as Lender, Swingline Lender and Issuing Lender

By:

Name:

Title:

REGIONS BANK,

                as Lender

By:

Name:

Title:

BANK OF AMERICA, N.A.,

                as Lender

                By:

Name:

Title:

                FIFTH THIRD BANK, NATIONAL ASSOCIATION,

                as Lender

                By:

Name:

Title:

                U.S. BANK NATIONAL ASSOCIATION,

                as Lender

                By:

Name:

Title:

                TRUIST BANK,

                as Lender

                By:

Name:

Title:

PNC BANK, NATIONAL ASSOCIATION,

as Lender

By:

Name:

Title:

PINNACLE BANK,

as Lender

By:

Name:

Title:

EX-10.4

FIRST AMENDMENT

TO

NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

This First Amendment to Note Purchase and Private Shelf Agreement (this “Amendment”), is made and entered into as of October 16, 2020, by and among Tractor Supply Company, a Delaware corporation (the “Company”), each of the undersigned Guarantors (together with the Company, collectively, the “Obligors”, and each, individually, an “Obligor”), PGIM, Inc. (“Prudential”) and the other holders of Notes (as defined in the Note Agreement defined below) that are signatories hereto (together with their successors and assigns, the “Noteholders”).

WITNESSETH:

WHEREAS, the Company, Prudential and the Noteholders are parties to a certain Note Purchase and Private Shelf Agreement, dated as of August 14, 2017 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Note Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Note Agreement), pursuant to which the Noteholders have purchased Notes from the Company;

WHEREAS, the Company has requested that Prudential and the Noteholders amend certain provisions of the Note Agreement and release the Guarantors from their obligations under the Guaranty, and subject to the terms and conditions hereof, Prudential and the Noteholders are willing to do so;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Amendments.

(a)Paragraph 3A of the Note Agreement is hereby amended by (i) adding “(if any)” after each reference to “Guarantors” and “Guarantor” therein and (ii) replacing clause (ii) of such paragraph in its entirety with the following:

(ii) A fully executed and delivered guaranty agreement or a reaffirmation of a previously executed guaranty agreement, each in a form acceptable to the Purchasers, executed by each Subsidiary of the Company (if any) that is a “Guarantor” under the Existing Credit Agreement or the 2020 Bond Indenture (the “Guaranty”).

(b)Paragraph 4G of the Note Agreement is hereby amended by replacing clause (iii) of such paragraph in its entirety with the following:

(iii) Offer to Prepay Notes. The offer to prepay Notes contemplated by the foregoing clause (i) shall be an offer to prepay, in accordance with and subject to this paragraph 4G, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”). Such Proposed Prepayment Date shall be the earlier of the date that all Indebtedness under the Existing Credit Agreement is repaid in full as a result of such Change of Control and a date no later than three Business Days after such Change of Control.

(c)Paragraph 5L of the Note Agreement is hereby amended by replacing such paragraph in its entirety with the following:

5L. Additional Guarantors.

As soon as practicable and in any event within 30 days after any Person guarantees any Indebtedness arising under or pursuant to any Material Credit Facility, the Company shall cause such Person to enter into a guaranty agreement in a form reasonably acceptable to the Required Holders, and cause such Person to deliver such other documentation as the Required Holders may reasonably request in connection with the foregoing, including, without limitation, certified resolutions and other organizational and authorizing documents of such Person, and favorable opinions of counsel to such Person all in form, content and scope reasonably satisfactory to the Required Holders.

(d)Paragraph 6A of the Note Agreement is hereby amended by (x) deleting the “and” at the end of clause (vii) thereof, (y) replacing the “.” at the end of clause (viii) thereof with “; and” and (z) adding the following clause (ix) to such paragraph in the appropriate chronological order:

(ix) unsecured Indebtedness in respect of the 2020 Bonds.

(e)Paragraph 6K of the Note Agreement is hereby amended by replacing such paragraph in its entirety with the following:

6K. Limitation on Restricted Actions.

The Credit Parties will not permit any Consolidated Party to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Person to (a) pay dividends or make any other distributions to any Credit Party on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, (b) pay any Indebtedness or other obligation owed to any Credit Party, (c) make loans or advances to any Credit Party, (d) sell, lease or transfer any of its properties or assets to any Credit Party, or (e) act as a Guarantor and pledge its assets pursuant to the Note Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in clauses (a) - (d) above) for such encumbrances or restrictions existing under or by reason of (i) this Agreement and the other Note Documents, (ii) any documentation or instrument governing the Principal Credit Facilities so long as such encumbrances or restrictions are not more restrictive than this Agreement, (iii) applicable law or (iv) any document or instrument governing purchase money Indebtedness (including Capital Leases) permitted by this Agreement, provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith.

(f)Paragraph 6N of the Note Agreement is hereby amended by replacing such paragraph in its entirety with the following:

6N. No Further Negative Pledges.

(a)The Credit Parties will not permit any Consolidated Party to enter into, assume or become subject to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or requiring the

grant of any security for such obligation if security is given for some other obligation, except (a) pursuant to this Agreement and the other Note Documents, (b) pursuant to any document or instrument governing purchase money Indebtedness (including Capital Leases) permitted by this Agreement, provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith or (c) pursuant to any agreement governing Indebtedness permitted hereunder so long as such restriction is not more restrictive than paragraph 6B as in effect at the time such agreement is executed, except that such agreement may restrict Liens securing the Credit Party Obligations provided that such Indebtedness is either secured ratably with the Credit Party Obligations pursuant to an intercreditor agreement reasonably acceptable to the Required Holders and the holders of such Indebtedness or, in the case of cash collateral, requires that an equal amount of cash collateral is pledged to secure such Indebtedness.

(b)To the extent the Existing Credit Agreement and the 2020 Bond Indenture are amended to remove all restriction on agreements or covenants restricting the ability of the Company and its Subsidiaries to grant or permit to exist Liens, including Section 8.14 of the Existing Credit Agreement and the corresponding provision of the 2020 Bond Indenture, and no other Principal Credit Facility contains such restriction, then this Agreement shall be deemed to be amended automatically to remove this paragraph 6N. The Company and the holders of the Notes agree to promptly execute and deliver at the expense of the Company (including the fees and expenses of counsel for the holders of the Notes) an amendment to this Agreement in form and substance reasonably satisfactory to the Required Holder(s) evidencing the amendment of this Agreement to remove this paragraph 6N. The execution and delivery of such an amendment to this Agreement described herein shall not be a precondition to the effectiveness of such amendment as provided for in this paragraph 6N, but shall merely be for the convenience of the parties hereto. To the extent that (1) any lenders under the Existing Credit Agreement or any holders of the 2020 Bonds receive any fee or other compensation at the time of or in connection with agreeing or consenting to any amendment to the Existing Credit Agreement or the 2020 Bond Indenture, as applicable, described in this paragraph 6N (such fees and compensation being “Lien Covenant Amendment Fees”) and (2) the Company has not otherwise paid the holders of the Notes fees in connection with such action, then the Company shall pay the holders of the Notes fees and compensation in an aggregate amount equal to the product of (i) the Lien Covenant Amendment Fees paid to such lenders and holders in respect of such action and (ii) a fraction of which (A) the numerator is the aggregate principal amount of Notes then outstanding and (B) the denominator is the aggregate principal amount of all Indebtedness (and unused commitments of the lenders) under the Principal Credit Facilities then outstanding.

(g) Paragraph 6Q of the Note Agreement is hereby amended by replacing such paragraph in its entirety with the following:

6Q. Most Favored Lender Status.

(i) In the event the Company or any Subsidiary shall amend any Principal Credit Facility at any time after the date of this Agreement such that such Principal Credit Facility contains one or more Additional Covenants or Additional Defaults, the terms of this Agreement shall, without any further action on the part of the Company or any of the holders of the Notes, be deemed to be amended automatically to include each Additional Covenant and each Additional Default contained in such Principal Credit Facility.

(ii) If this Agreement is deemed amended to include any Additional Covenant or Additional Default, and thereafter such Additional Covenant or Additional Default in any Principal Credit Facility is excluded, terminated, loosened, relaxed, tightened, amended or otherwise modified, then the related Additional Covenant or Additional Default included in this Agreement pursuant to the requirements of this paragraph 6Q shall, without any further action on the part of the Company or any of the holders of the Notes, be so excluded, terminated, loosened, relaxed, tightened, amended or otherwise modified in this Agreement; provided if a Default or Event of Default shall have occurred and be continuing at the time any such Additional Covenant or Additional Default is to be so excluded, terminated, loosened, relaxed, tightened, amended or otherwise modified under this paragraph 6Q, the prior written consent of the Required Holders shall be required as a condition to the exclusion, termination, loosening, relaxation, tightening, amendment or other modification of any such Additional Covenant or Additional Default, as the case may be; and provided, further, that in no event shall the covenants, defaults or any related definitions contained in this Agreement as in effect on the date of this Agreement be deemed amended or construed to be loosened or relaxed by operation of the terms of this paragraph 6Q(ii), and only any such Additional Covenant or Additional Default shall be so excluded, terminated, loosened, relaxed, tightened, amended or otherwise modified pursuant to the terms hereof.

(iii) The Company shall promptly execute and deliver at its expense (including the fees and expenses of counsel for the holders of the Notes) an amendment to this Agreement in form and substance reasonably satisfactory to the Required Holder(s) evidencing the amendment of this Agreement to include, exclude, terminate, loosen, relax, tighten, amend or otherwise modify any Additional Covenant or Additional Default, as the case may be, pursuant to clause (i) or clause (ii) above; provided that the execution and delivery of such amendments to this Agreement described herein shall not be a precondition to the effectiveness of such inclusion, exclusion, termination, loosening, relaxation, tightening, amendment or modification, but shall merely be for the convenience of the parties hereto.

(iv) To the extent that (1) lenders or holders under any Principal Credit Facility receive any fee or other compensation at the time of or in connection with agreeing or consenting to any action described in clause (ii) above in respect of any Additional Covenant or Additional Default (such fees and compensation being “New Additional Covenant and Default Fees”),(2) as a result, pursuant to clause (ii) above, the corresponding Additional Covenant or Additional Default, as incorporated into this Agreement, is similarly excluded, terminated, loosened, relaxed, tightened, amended, or otherwise modified, and (3) the Company has not otherwise paid the holders of the Notes fees in connection with such action, then the Company shall pay the holders of the Notes fees and compensation in an aggregate amount equal to the product of (i) the New Additional Covenant and Default Fees paid to such lenders and holders in respect of such action and (ii) a fraction of which (A) the numerator is the aggregate principal amount of Notes then outstanding and (B) the denominator is the aggregate principal amount of all Indebtedness (including unused commitments of the lenders) under the Principal Credit Facilities then outstanding; and

(v) The Company covenants and agrees to give prompt written notice in reasonable detail to the holders of the Notes of each and every occasion in which each and every Additional Covenant or Additional Default in any Principal Credit Facility is included, excluded, terminated, loosened, relaxed, tightened, amended or otherwise modified.

(h) Paragraph 7(A)(v) of the Note Agreement is hereby amended by replacing such paragraph in its entirety with the following:

(v) Guaranties. Except as otherwise permitted by the Noteholders or as the result of or in connection with a merger of a Subsidiary permitted under paragraph 6D, the guaranty given by any Guarantor hereunder or any provision thereof shall cease to be in full force and effect, or any Guarantor hereunder or any Person acting by or on behalf of such Guarantor shall deny or disaffirm such Guarantor’s obligations under such guaranty, or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any guaranty; or

(i) Paragraph 8E of the Note Agreement is hereby amended by replacing such paragraph in its entirety with the following:

8E. No Conflicts.

Neither the execution and delivery of the Note Documents, nor the consummation of the transactions contemplated therein, nor performance of and compliance with the terms and provisions thereof by such Credit Party will (a) violate or conflict with any provision of its articles or certificate of incorporation or bylaws or other organizational or governing documents of such Person, (b) violate, contravene or materially conflict with any material Requirement of Law or any other material law, regulation (including, without limitation, Regulation U or Regulation X), order, writ, judgment, injunction, decree or permit applicable to it, (c) violate, contravene or conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which it is a party or by which it may be bound, the violation of which (except as to any Principal Credit Facility) could reasonably be expected to have a Material Adverse Effect, or (d) result in or require the creation of any Lien upon or with respect to its properties. No Default or Event of Default has occurred and is continuing.

(j) Paragraph 8L of the Note Agreement is hereby amended by replacing such paragraph in its entirety with the following:

8L. Subsidiaries.

Set forth on Schedule 8L is a complete and accurate list of all Subsidiaries of each Credit Party as of the First Amendment Effective Date and the jurisdiction of their organization.

(k) Paragraph 8W of the Note Agreement is hereby amended by replacing such paragraph in its entirety with the following:

8W. Offering of Notes

Neither the Company nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Company (except for the 2020 Bonds) for sale to, or solicited any offers to buy the Notes or any similar security of the Company (except for the 2020 Bonds) from, or otherwise approached or negotiated with respect thereto with, any Person other than the Purchaser(s) and not more than 35 other Institutional Investors, and neither the Company nor any agent acting on its behalf has taken or will take any action which would subject the issuance or

sale of the Notes to the provisions of Section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction.

(l) Paragraph 10B of the Note Agreement is hereby amended by (i) deleting the definition for“Guarantor Joinder Agreement”in its entirety,(ii) changing all references to “Bank Lien Covenant Amendment Fees” to “Lien Covenant Amendment Fees”, (iii) changing all references to “New Bank Additional Covenant and Default Fees” to “New Additional Covenant and Default Fees” and (iv) replacing the definitions for “Additional Covenant”, “Cash Equivalents”, “Change of Control”, “Credit Parties”, “Existing Credit Agreement”, “Material Credit Facility” and “Principal Credit Facility” in their entirety with the following:

“Additional Covenant” shall mean any affirmative or negative covenant or similar restriction applicable to the Company or any Subsidiary (regardless of whether such provision is labeled or otherwise characterized as a covenant) the subject matter of which either (i) is similar to that of any covenant in paragraph 5 or 6 of this Agreement, or related definitions in paragraph 10 of this Agreement, but contains one or more percentages, amounts or formulas that is more restrictive than those set forth herein or more beneficial to the holder or holders of the Indebtedness created or evidenced by the document in which such covenant or similar restriction is contained (and such covenant or similar restriction shall be deemed an Additional Covenant only to the extent that it is more restrictive or more beneficial) or (ii) is different from the subject matter of any covenant in paragraph 5 or 6 of this Agreement, or related definitions in paragraph 10 of this Agreement; for the avoidance of doubt, to the extent the provisions of paragraph 6N is removed from this Agreement in accordance with the terms thereof, and any Principal Credit Facility is later amended to revise or modify the equivalent provision thereof, such subsequent revision or modification shall constitute an Additional Covenant. Notwithstanding the foregoing, any Principal Credit Facility having a more restrictive monetary value limit for the disposition of Property than is set out in Section 6E of this Agreement, which is not also more restrictive than Section 8.5 of the Existing Credit Agreement and the corresponding provision of the 2020 Bond Indenture, in each case, as in effect on the date hereof, will not constitute an "Additional Covenant" for purposes of this Agreement.

“Cash Equivalents” means (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) Dollar denominated time deposits and certificates of deposit of (i) any “Lender” (as defined in the Existing Credit Agreement), (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by any Person with a bank or trust company (including any of the Lenders party to the Existing Credit Agreement) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair

market value of at least 100% of the amount of the repurchase obligations and (e) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d).

“Change of Control” means the occurrence of any of the following events: (i) any Person or two or more Persons acting in concert shall have acquired “beneficial ownership,” directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, control over, Voting Stock of the Company (or other securities convertible into such Voting Stock) representing 40% or more of the combined voting power of all Voting Stock of the Company, (ii) a majority of the members of the Board of Directors of the Company cease to be Continuing Directors, or (iii) any event constituting a “Change of Control” (as defined in any of the Principal Credit Facilities) occurs.

“Credit Parties” means (a) for purposes of this Agreement other than paragraph 8, the Company and any Guarantors party hereto and (b) for purposes of paragraph 8, the Company and its Material Subsidiaries. “Credit Party” means any one of them.

“Existing Credit Agreement” means that certain Credit Agreement, dated as of February 19, 2016, by and among the Company, Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, as amended by that certain First Amendment to Credit Agreement dated as of June 15, 2017 and as may be further amended or supplemented, restated, extended, refinanced, replaced or otherwise modified from time to time.

“Material Credit Facility” means, as to the Company and its Subsidiaries,

(a) each Principal Credit Facility; and

(b) any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the date of this Agreement by the Company or any Subsidiary, or in respect of which the Company or any Subsidiary is an obligor or otherwise provides a guarantee or other credit support (“Credit Facility”), in a principal amount outstanding or available for borrowing equal to or greater than $100,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency); and if no Principal Credit Facility exists and no Credit Facility or Credit Facilities equal or exceed such amounts, then the largest Credit Facility shall be deemed to be a Material Credit Facility.

“Principal Credit Facility” means the Existing Credit Agreement and the 2020 Bond Indenture, or to the extent that both the Existing Credit Agreement and the 2020 Bond Indenture have terminated, the principal Credit Facility (as defined in the definition of Material Credit Facility) of the Company and its Subsidiaries in effect from time to time.

(m) Paragraph 10B of the Note Agreement is hereby amended by adding the following definitions in the appropriate alphabetical order:

“2020 Bond Indenture” means the indenture to be entered into to govern the 2020 Bonds upon issuance thereof, executed by the Company and the trustee named therein, as such Indenture may be amended, restated, supplemented, extended, renewed, replaced or otherwise modified from time to time thereafter.

“2020 Bonds” means senior unsecured notes to be issued by the Company on or before December 31, 2020, in an amount up to $750,000,000 on terms substantially similar with those provided to the holders of the Notes prior to the First Amendment Effective Date.

“First Amendment Effective Date” means October 16, 2020.

(n) Schedule 8L to the Note Agreement is hereby amended by replacing such schedule in its entirety with the Schedule 8L attached hereto.

(o) Exhibit 5L to the Note Agreement is hereby amended by deleting such exhibit in its entirety.

2.Conditions to Effectiveness of this Amendment. Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the holders of the Notes hereunder, it is understood and agreed that this Amendment shall not become effective, and the Company shall have no rights under this Amendment, until Prudential and the Noteholders shall have received (i) such fees as the Company has previously agreed to pay the Noteholders or any of its affiliates in connection with this Amendment, if any, (ii) reimbursement, payment or satisfactory arrangement of future payment of its out of pocket costs and expenses incurred in connection with this Amendment or the Note Agreement (including reasonable fees, charges and disbursements of King & Spalding LLP, counsel to Prudential and the Noteholders), (iii) executed counterparts to this Amendment from the Company, each of the Guarantors, Prudential and the Noteholders, (iv) an executed copy of an amendment to the Existing Credit Agreement in form and substance substantially similar to this Amendment and acceptable to the Required Holders (the “Wells Amendment”) and (v) an executed counterpart to that certain Letter Agreement, dated as of the date hereof, by the Company in favor of the Noteholders.

3.Reserved.

4.Representations and Warranties. To induce Prudential and the Noteholders to enter into this Amendment, the Company hereby represents and warrants to Prudential and the Noteholders as follows:

(a) Each of the Obligors has the corporate or other necessary power and authority, to make, deliver and perform this Agreement and has taken all necessary corporate action to authorize the execution, delivery and performance of this Amendment.

(b) No consent or authorization of, filing with, notice to or other similar act by or in respect of, any Governmental Authority or any other Person is required to be obtained or made by or on behalf of any Obligor in connection with the execution, delivery, performance, validity or enforceability of this Amendment.

(c) This Amendment has been duly executed and delivered on behalf of each Obligor.

(d) This Amendment constitutes a legal, valid and binding obligation of each Obligor enforceable against such Obligor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

(e) Neither the execution and delivery of this Amendment, nor the consummation of the transactions contemplated herein, nor performance of and compliance with the terms and provisions hereof by any Obligor will (a) violate or conflict with any provision of its articles or certificate of incorporation or bylaws or other organizational or governing documents of such Person, (b) violate, contravene or materially conflict with any material Requirement of Law or any other material law, regulation (including, without limitation, Regulation U or Regulation X), order, writ, judgment, injunction, decree or permit applicable to it, (c) violate, contravene or conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which it is a party or by which it may be bound, the violation of which (except as to the Existing Credit Agreement) could reasonably be expected to have a Material Adverse Effect, or (d) result in or require the creation of any Lien upon or with respect to its properties.

(f) After giving effect to this Amendment, the representations and warranties contained in the Note Agreement and the other Note Documents are true in all material respects (except to the extent such representations and warranties expressly relate to an earlier date, then such representations and warranties were true in all material respects as of such date), and no Default or Event of Default has occurred and is continuing as of the date hereof.

5.Release of Guarantors. Subject to the effectiveness of this Amendment and the Wells Amendment, the Noteholders party hereto hereby release each of the undersigned Guarantors from all of its obligations under the Guaranty and agree that, upon the effectiveness of this Amendment and the Wells Amendment, the Guaranty is terminated and of no further force or effect. Each Guarantor hereby releases Prudential, the Noteholders and their respective affiliates and subsidiaries and their respective officers, directors, employees, shareholders, agents and representatives as well as their respective successors and assigns from any and all claims, obligations, rights, causes of action, and liabilities, of whatever kind or nature, whether known or unknown, whether foreseen or unforeseen, arising on or before the date hereof, which such Guarantor ever had, now has or hereafter can, shall or may have for, upon or by reason of any matter, cause or thing whatsoever, which are based upon, arise under or are related to the Guaranty or any other Note Document, other than for claims arising from the gross negligence or willful misconduct of a Noteholder or the material breach of the contractual obligations of any of them to the Company or such Guarantor.

6.Ratification of the Note Agreement and the Notes. The Company acknowledges and consents to the terms set forth herein and agrees that this Amendment does not impair, reduce or limit any of its obligations under the Note Agreement, as amended hereby, and the Notes.

7.Effect of Amendment. Except as set forth expressly herein, the Note Agreement, as amended hereby, and the other Note Documents, shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Company to all holders of the Notes. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the holders of the Notes under the Note Agreement, nor

constitute a waiver of any provision of the Note Agreement, except as expressly provided herein. From and after the date hereof, all references to the Note Agreement shall mean the Note Agreement as modified by this Amendment. This Amendment shall constitute a Note Document for all purposes of the Note Agreement.

8.Governing Law. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK IN ACCORDANCE WITH THE PROVISIONS OF §5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

9.No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Note Agreement or an accord and satisfaction in regard thereto.

10.Costs and Expenses. The Company agrees to pay on demand all reasonable out of pocket costs and expenses of the Noteholders in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Noteholders with respect thereto.

11.Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of this Amendment by facsimile transmission or by electronic mail in PDF form shall be as effective as delivery of a manually executed counterpart hereof.

12.Estoppel. To induce the Noteholders to enter into this Amendment, the Company hereby acknowledges and agrees that, as of the date hereof, there exists no right of offset, defense or counterclaim in favor of the Company against any holder of the Notes with respect to the obligations of the Company to any such holder, either with or without giving effect to this Amendment.

13.Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto, any other holders of Notes from time to time and their respective successors, successors-in-titles, and assigns.

14.Entire Understanding. This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto.

[Signature pages follow.]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

COMPANY:

TRACTOR SUPPLY COMPANY

By:________________________________________

Name: _____________________________________

Title: ______________________________________

GUARANTORS:

TRACTOR SUPPLY CO. OF MICHIGAN, LLC

By:________________________________________

Name: _____________________________________

Title: ______________________________________

TRACTOR SUPPLY CO. OF TEXAS, L.P.

By:________________________________________

Name: _____________________________________

Title: ______________________________________

NOTEHOLDERS:

PGIM, INC.

By: ___________________________________

Vice President

FARMERS INSURANCE EXCHANGE

By: PGIM Private Placement Investors,

L.P. (as Investment Advisor)

By: PGIM Private Placement Investors, Inc.

(as its General Partner)

By:___________________________________

     Vice President

MID CENTURY INSURANCE COMPANY

By: PGIM Private Placement Investors,

L.P. (as Investment Advisor)

By: PGIM Private Placement Investors, Inc.

(as its General Partner)

By:___________________________________

     Vice President

PENSIONSKASSE DES BUNDES PUBLICA

By: PGIM Private Capital Limited,

as Investment Manager,

By:___________________________________

     Director

PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION

By: PGIM, Inc., as investment manager

By:___________________________________

     Vice President

THE GIBRALTAR LIFE INSURANCE CO., LTD.

By: PGIM Japan Co., Ltd., as Investment Manager

By: PGIM, Inc., as Sub-Adviser

By:___________________________________

     Vice President

THE PRUDENTIAL INSURANCE COMPANY OF

AMERICA

By:___________________________________

     Second Vice President

WILLIAM PENN LIFE INSURANCE COMPANY OF NEW

YORK

By: PGIM Private Placement Investors,

L.P. (as Investment Advisor)

By: PGIM Private Placement Investors, Inc.

(as its General Partner)

    By:___________________________________

Vice President

ZURICH AMERICAN INSURANCE COMPANY

By: PGIM Private Placement Investors,

L.P. (as Investment Advisor)

By: PGIM Private Placement Investors, Inc.

(as its General Partner)

By:___________________________________

Vice President

Schedule 8L

SUBSIDIARIES

Tractor Supply Co. of Texas, LP

Jurisdiction of Formation: Texas

Tractor Supply Co. of Michigan, LLC

Jurisdiction of Formation: Michigan

Tractor Supply Company of Utah, LLC

Jurisdiction of Formation: Delaware

Del’s Farm Supply, LLC

Jurisdiction of Formation: Delaware

TSC Purchasing, LLC

Jurisdiction of Formation: Delaware

TSC Franklin DC, LLC

Jurisdiction of Formation: Delaware

TSC SSC Bond, LLC

Jurisdiction of Formation: Delaware

Petsense, LLC

Jurisdiction of Formation: Delaware

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Harry A. Lawton III, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tractor Supply Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	October 22, 2020	/s/ Harry A. Lawton III
		Harry A. Lawton III
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Kurt D. Barton, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tractor Supply Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	October 22, 2020	/s/ Kurt D. Barton
		Kurt D. Barton
		Executive Vice President - Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Quarterly Report (“Report”) of Tractor Supply Company (the “Company”) on Form 10-Q for the fiscal quarter ended September 26, 2020, as filed with the Securities and Exchange Commission on the date hereof, we, Harry A. Lawton III, Chief Executive Officer, and Kurt D. Barton, Chief Financial Officer, of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350), that:

(1)The Report fully complies with the requirements of section 13(a) and 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: October 22, 2020

/s/ Harry A. Lawton III

Harry A. Lawton III

President and Chief Executive Officer

/s/ Kurt D. Barton

Kurt D. Barton

Executive Vice President - Chief Financial Officer and Treasurer

XML

Cover	9 Months Ended
	Sep. 26, 2020 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 26, 2020
Document Transition Report	false
Entity File Number	000-23314
Entity Registrant Name	TRACTOR SUPPLY CO /DE/
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3139732
Entity Address, Street Address	5401 Virginia Way
Entity Address, City	Brentwood
Entity Address, State	TN
Entity Address, Postal Zip Code	37027
City Area Code	615
Local Phone Number	440-4000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of each class	Common Stock, $0.008 par value
Trading Symbol	TSCO
Name of each exchange on which registered	NASDAQ
Entity Central Index Key	0000916365
Entity Common Stock, Shares Outstanding	116,497,394
Current Fiscal Year End Date	--12-26
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019	Sep. 28, 2019
Current assets:
Cash and cash equivalents	$ 1,111,986	$ 84,241	$ 82,640
Inventories	1,915,040	1,602,781	1,812,772
Prepaid expenses and other current assets	136,098	100,865	104,486
Income taxes receivable	7,838	0	5,600
Total current assets	3,170,962	1,787,887	2,005,498
Property and equipment, net	1,178,625	1,163,956	1,143,071
Operating lease right-of-use assets	2,354,196	2,188,802	2,133,238
Goodwill and other intangible assets	124,492	124,492	124,492
Deferred Tax Assets, Deferred Income	3,581	0	0
Other assets	28,941	24,131	22,997
Total assets	6,860,797	5,289,268	5,429,296
Current liabilities:
Accounts payable	1,056,911	643,036	679,791
Accrued employee compensation	120,361	39,755	49,236
Other accrued expenses	274,244	247,690	218,774
Current portion of long-term debt	380,000	30,000	30,000
Current portion of finance lease liabilities	4,407	4,036	3,884
Current portion of operating lease liabilities	294,826	277,099	270,038
Income taxes payable	1,914	5,984	0
Total current liabilities	2,132,663	1,247,600	1,251,723
Long-term debt	529,264	366,480	613,885
Finance lease liabilities, less current portion	32,948	30,389	29,174
Operating lease liabilities, less current portion	2,171,773	2,001,162	1,966,363
Deferred Income Tax Liabilities, Net	0	153	1,888
Other long-term liabilities	118,283	76,361	74,441
Total liabilities	4,984,931	3,722,145	3,937,474
Stockholders’ equity:
Preferred stock	0	0	0
Common stock	1,398	1,389	1,388
Additional paid-in capital	1,059,687	966,698	950,908
Treasury stock	(3,277,215)	(3,013,996)	(2,970,654)
Accumulated other comprehensive (loss)/income	(5,867)	199	73
Retained earnings	4,097,863	3,612,833	3,510,107
Total stockholders’ equity	1,875,866	1,567,123	1,491,822
Total liabilities and stockholders’ equity	$ 6,860,797	$ 5,289,268	$ 5,429,296
Preferred Stock, Par or Stated Value Per Share	$ 1.00	$ 1.00	$ 1.00
Preferred Stock, Shares Authorized	40,000	40,000	40,000
Preferred Stock, Shares Issued	0	0	0
Common Stock, Par or Stated Value Per Share	$ 0.008	$ 0.008	$ 0.008
Common Stock, Shares Authorized	400,000,000	400,000,000	400,000,000
Common Stock, Shares, Issued	174,793,000	173,608,000	173,465,000
Common Stock, Shares, Outstanding	116,497,000	118,165,000	118,480,000
Treasury Stock, Shares	58,296,000	55,443,000	54,985,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Income Statement [Abstract]
Net sales	$ 2,606,572	$ 1,984,144	$ 7,742,087	$ 6,160,146
Cost of merchandise sold	1,658,615	1,289,904	4,976,068	4,030,177
Gross profit	947,957	694,240	2,766,019	2,129,969
Depreciation and amortization	54,651	49,819	158,634	144,584
Selling, general and administrative expenses	641,129	482,604	1,794,924	1,432,603
Operating income	252,177	161,817	812,461	552,782
Interest expense, net	7,208	4,900	20,695	15,006
Income before income taxes	244,969	156,917	791,766	537,776
Income tax expense	54,359	34,784	178,701	119,601
Net income	$ 190,610	$ 122,133	$ 613,065	$ 418,175
Net income per share – basic	$ 1.64	$ 1.03	$ 5.27	$ 3.48
Net income per share – diluted	$ 1.62	$ 1.02	$ 5.23	$ 3.45
Weighted average shares outstanding:
Basic	116,339	118,956	116,330	120,180
Diluted	117,745	120,058	117,330	121,239
Dividends declared per common share outstanding	$ 0.40	$ 0.35	$ 1.10	$ 1.01

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 190,610	$ 122,133	$ 613,065	$ 418,175
Change in fair value of interest rate swaps, net of taxes	468	(809)	(6,066)	(4,458)
Total other comprehensive income/(loss)	468	(809)	(6,066)	(4,458)
Total comprehensive income	$ 191,078	$ 121,324	$ 606,999	$ 413,717

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) Statement - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Treasury Stock	Accum. Other Comp. Income/(Loss)	Retained Earnings
Beginning balance, shares outstanding (in shares) at Dec. 29, 2018		121,828
Beginning balance, Stockholders' equity at Dec. 29, 2018	$ 1,561,820	$ 1,375	$ 823,413	$ (2,480,677)	$ 3,814	$ 3,213,895
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issuance under stock award plans & ESPP (in shares)		570
Common stock issuance under stock award plans & ESPP	34,732	$ 5	34,727
Share-based compensation	9,624		9,624
Repurchase of shares to satisfy tax obligations	(3,026)		(3,026)
Repurchase of common stock, shares (in shares)		(1,724)
Repurchase of common stock	(155,319)			(155,319)
Dividends paid	(37,623)					(37,623)
Change in fair value of interest rate swaps, net of taxes	(1,464)				(1,464)
Net income	76,832					76,832
Ending balance, shares outstanding (in shares) at Mar. 30, 2019		120,674
Ending balance, Stockholders' equity at Mar. 30, 2019	$ 1,485,576	$ 1,380	864,738	(2,635,996)	$ 3,067	$ 3,252,387
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative adjustment as a result of ASU 2017-12 adoption	—				717	(717)
Beginning balance, shares outstanding (in shares) at Dec. 29, 2018		121,828
Beginning balance, Stockholders' equity at Dec. 29, 2018	$ 1,561,820	$ 1,375	823,413	(2,480,677)	$ 3,814	$ 3,213,895
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchase of shares to satisfy tax obligations	(3,790)
Repurchase of common stock	(489,977)
Dividends paid	(121,246)
Change in fair value of interest rate swaps, net of taxes	(4,458)
Net income	418,175
Ending balance, shares outstanding (in shares) at Sep. 28, 2019		118,480
Ending balance, Stockholders' equity at Sep. 28, 2019	$ 1,491,822	$ 1,388	950,908	(2,970,654)	73	3,510,107
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative adjustment as a result of ASU 2017-12 adoption	2,084,880
Beginning balance, shares outstanding (in shares) at Mar. 30, 2019		120,674
Beginning balance, Stockholders' equity at Mar. 30, 2019	$ 1,485,576	$ 1,380	864,738	(2,635,996)	3,067	3,252,387
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issuance under stock award plans & ESPP (in shares)		781
Common stock issuance under stock award plans & ESPP	54,699	$ 6	54,693
Share-based compensation	8,776		8,776
Repurchase of shares to satisfy tax obligations	(113)		(113)
Repurchase of common stock, shares (in shares)		(1,732)
Repurchase of common stock	(178,916)			(178,916)
Dividends paid	(42,105)					(42,105)
Change in fair value of interest rate swaps, net of taxes	(2,185)				(2,185)
Net income	219,210					219,210
Ending balance, shares outstanding (in shares) at Jun. 29, 2019		119,723
Ending balance, Stockholders' equity at Jun. 29, 2019	1,544,942	$ 1,386	928,094	(2,814,912)	882	3,429,492
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issuance under stock award plans & ESPP (in shares)		227
Common stock issuance under stock award plans & ESPP	16,112	$ 2	16,110
Share-based compensation	7,355		7,355
Repurchase of shares to satisfy tax obligations	(651)		(651)
Repurchase of common stock, shares (in shares)		(1,470)
Repurchase of common stock	(155,742)			(155,742)
Dividends paid	(41,518)					(41,518)
Change in fair value of interest rate swaps, net of taxes	(809)				(809)
Net income	122,133					122,133
Ending balance, shares outstanding (in shares) at Sep. 28, 2019		118,480
Ending balance, Stockholders' equity at Sep. 28, 2019	1,491,822	$ 1,388	950,908	(2,970,654)	73	3,510,107
Beginning balance, shares outstanding (in shares) at Dec. 28, 2019		118,165
Beginning balance, Stockholders' equity at Dec. 28, 2019	1,567,123	$ 1,389	966,698	(3,013,996)	199	3,612,833
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issuance under stock award plans & ESPP (in shares)		280
Common stock issuance under stock award plans & ESPP	10,603	$ 2	10,601
Share-based compensation	6,945		6,945
Repurchase of shares to satisfy tax obligations	(5,407)		(5,407)
Repurchase of common stock, shares (in shares)		(2,853)
Repurchase of common stock	(263,219)			(263,219)
Dividends paid	(40,849)					(40,849)
Change in fair value of interest rate swaps, net of taxes	(5,250)				(5,250)
Net income	83,777					83,777
Ending balance, shares outstanding (in shares) at Mar. 28, 2020		115,592
Ending balance, Stockholders' equity at Mar. 28, 2020	1,353,723	$ 1,391	978,837	(3,277,215)	(5,051)	3,655,761
Beginning balance, shares outstanding (in shares) at Dec. 28, 2019		118,165
Beginning balance, Stockholders' equity at Dec. 28, 2019	1,567,123	$ 1,389	966,698	(3,013,996)	199	3,612,833
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchase of shares to satisfy tax obligations	(7,732)
Repurchase of common stock	(263,219)
Dividends paid	(128,035)
Change in fair value of interest rate swaps, net of taxes	(6,066)
Net income	613,065
Ending balance, shares outstanding (in shares) at Sep. 26, 2020		116,497
Ending balance, Stockholders' equity at Sep. 26, 2020	$ 1,875,866	$ 1,398	1,059,687	(3,277,215)	(5,867)	4,097,863
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative adjustment as a result of ASU 2017-12 adoption	—
Beginning balance, shares outstanding (in shares) at Mar. 28, 2020		115,592
Beginning balance, Stockholders' equity at Mar. 28, 2020	$ 1,353,723	$ 1,391	978,837	(3,277,215)	(5,051)	3,655,761
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issuance under stock award plans & ESPP (in shares)		588
Common stock issuance under stock award plans & ESPP	39,737	$ 5	39,732
Share-based compensation	7,504		7,504
Repurchase of shares to satisfy tax obligations	(1,984)		(1,984)
Repurchase of common stock, shares (in shares)		0
Repurchase of common stock	0			0
Dividends paid	(40,644)					(40,644)
Change in fair value of interest rate swaps, net of taxes	(1,284)				(1,284)
Net income	338,678					338,678
Ending balance, shares outstanding (in shares) at Jun. 27, 2020		116,180
Ending balance, Stockholders' equity at Jun. 27, 2020	1,695,730	$ 1,396	1,024,089	(3,277,215)	(6,335)	3,953,795
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issuance under stock award plans & ESPP (in shares)		317
Common stock issuance under stock award plans & ESPP	23,413	$ 2	23,411
Share-based compensation	12,528		12,528
Repurchase of shares to satisfy tax obligations	(341)		(341)
Repurchase of common stock, shares (in shares)		0
Repurchase of common stock	0			0
Dividends paid	(46,542)					(46,542)
Change in fair value of interest rate swaps, net of taxes	468				468
Net income	190,610					190,610
Ending balance, shares outstanding (in shares) at Sep. 26, 2020		116,497
Ending balance, Stockholders' equity at Sep. 26, 2020	$ 1,875,866	$ 1,398	$ 1,059,687	$ (3,277,215)	$ (5,867)	$ 4,097,863

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019
Cash flows from operating activities:
Net income	$ 613,065	$ 418,175
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	158,634	144,584
Gain on disposition of property and equipment	(774)	(262)
Share-based compensation expense	26,977	25,755
Deferred income taxes	(3,734)	8,495
Change in assets and liabilities:
Inventories	(312,259)	(223,230)
Prepaid expenses and other current assets	(35,233)	9,961
Accounts payable	413,875	59,810
Accrued employee compensation	80,606	(4,810)
Other accrued expenses	20,279	(21,622)
Income taxes	(11,908)	(3,257)
Other	55,447	728
Net cash provided by operating activities	1,004,975	414,327
Cash flows from investing activities:
Capital expenditures	(161,292)	(144,342)
Proceeds from sale of property and equipment	1,130	2,317
Net cash used in investing activities	(160,162)	(142,025)
Cash flows from financing activities:
Borrowings under debt facilities	1,159,000	947,000
Repayments under debt facilities	(646,500)	(710,750)
Payments of Debt Issuance Costs	1,237	0
Principal payments under finance lease liabilities	(3,098)	(2,741)
Repurchase of shares to satisfy tax obligations	(7,732)	(3,790)
Repurchase of common stock	(263,219)	(489,977)
Net proceeds from issuance of common stock	73,753	105,543
Cash dividends paid to stockholders	(128,035)	(121,246)
Net cash provided by/(used in) financing activities	182,932	(275,961)
Net change in cash and cash equivalents	1,027,745	(3,659)
Cash and cash equivalents at beginning of period	84,241	86,299
Cash and cash equivalents at end of period	1,111,986	82,640
Cash paid during the period for:
Interest	18,304	15,189
Income taxes	191,743	112,693
Supplemental disclosures of non-cash activities:
Non-cash accruals for construction in progress	14,199	10,981
Increase of operating lease assets and liabilities from new or modified leases	381,486	240,969
Increase of finance lease assets and liabilities from new or modified leases	$ 6,028	$ 2,883
Operating lease assets and liabilities recognized upon adoption of ASC 842	—	2,084,880

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General

9 Months Ended

Sep. 26, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General:

Nature of Business

Founded in 1938, Tractor Supply Company (the “Company” or “we” or “our” or “us”) is the largest rural lifestyle retailer in the United States (“U.S.”). The Company is focused on supplying the needs of recreational farmers, ranchers, and all those who enjoy living the rural lifestyle (which we refer to as the “Out Here” lifestyle), as well as tradesmen and small businesses. Stores are located primarily in towns outlying major metropolitan markets and in rural communities. The Company also owns and operates Petsense, LLC (“Petsense”), a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-sized communities, and offering a variety of pet products and services. At September 26, 2020, the Company operated a total of 2,087 retail stores in 49 states (1,904 Tractor Supply and Del’s retail stores and 183 Petsense retail stores) and also offered an expanded assortment of products through the Tractor Supply Company mobile application and online at TractorSupply.com and Petsense.com.

Basis of Presentation

The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2019.  The results of operations for our interim periods are not necessarily indicative of results for the full fiscal year.

The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty, and volatility which may negatively affect our business operations. As a result, if the pandemic persists or worsens, our accounting estimates and assumptions could be impacted in subsequent interim reports and upon final determination at year-end, and it is reasonably possible such changes could be significant (although the potential effects cannot be estimated at this time).

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General Details	Sep. 26, 2020 store state
Nature of business [Abstract]
Number of states in which rural lifestyle retail stores are operated by the company | state	49
Parent Company [Member]
Nature of business [Abstract]
Number of rural lifestyle retail stores operated by the company	2,087
TSCO stores [Domain]
Nature of business [Abstract]
Number of rural lifestyle retail stores operated by the company	1,904
Petsense stores [Domain]
Nature of business [Abstract]
Number of rural lifestyle retail stores operated by the company	183

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Fair Value of Financial Instruments	9 Months Ended
	Sep. 26, 2020
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments:Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.The Company’s financial instruments consist of cash and cash equivalents, short-term receivables, trade payables, debt instruments, and interest rate swaps.  Due to their short-term nature, the carrying values of cash and cash equivalents, short-term receivables, and trade payables approximate current fair value at each balance sheet date. As described in further detail in Note 5 to the Condensed Consolidated Financial Statements, the Company had $910.0 million, $397.5 million, and $645.0 million in borrowings under its debt facilities at September 26, 2020, December 28, 2019, and September 28, 2019, respectively. Based on market interest rates (Level 2 inputs), the carrying value of borrowings in our debt facilities approximates fair value for each period reported. The fair value of the Company’s interest rate swaps is determined based on the present value of expected future cash flows using forward rate curves (a Level 2 input). As described in further detail in Note 6 to the Condensed Consolidated Financial Statements, the fair value of the interest rate swaps, excluding accrued interest, was a net liability of $7.9 million at September 26, 2020, and a net asset of $0.3 million and $0.1 million at December 28, 2019 and September 28, 2019, respectively.

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Share Based Compensation

9 Months Ended

Sep. 26, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Share Based Compensation

Share-Based Compensation:

Share-based compensation includes stock options, restricted stock units, performance-based restricted share units, and certain transactions under our Employee Stock Purchase Plan (the “ESPP”). Share-based compensation expense is recognized based on grant date fair value of all stock options, restricted stock units, and performance-based restricted share units plus a 15% discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the purchase date market value and the employee’s purchase price.

There were no significant modifications to the Company’s share-based compensation plans during the fiscal nine months ended

September 26, 2020.

For the third quarter of fiscal 2020 and 2019, share-based compensation expense was $12.5 million and $7.4 million, respectively, and $27.0 million and $25.8 million for the first nine months of fiscal 2020 and 2019, respectively.

Stock Options

The following table summarizes information concerning stock option grants during the first nine months of fiscal 2020:

	Fiscal Nine Months Ended
	September 26, 2020
Stock options granted	443,967
Weighted average exercise price	$	94.62
Weighted average grant date fair value per option	$	19.46

As of September 26, 2020, total unrecognized compensation expense related to non-vested stock options was approximately $10.1 million with a remaining weighted average expense recognition period of 2.0 years.

Restricted Stock Units and Performance-Based Restricted Share Units

The following table summarizes information concerning restricted stock unit and performance-based restricted share unit grants during the first nine months of fiscal 2020:

	Fiscal Nine Months Ended
	September 26, 2020
Restricted stock units granted	320,053
Performance-based restricted share units granted (a)	83,368
Weighted average grant date fair value per share	$	94.39

(a) Assumes 100% target level achievement of the relative performance targets.

In fiscal 2020, the Company granted awards that are subject to the achievement of specified performance goals. The performance metrics for the units are growth in net sales and growth in earnings per diluted share. The number of performance-based restricted share units presented in the foregoing table represent the shares that can be achieved at the performance metric target value. The actual number of shares that will be issued under the performance share awards, which may be higher or lower than the target, will be determined by the level of achievement of the performance goals. If the performance targets are achieved, the units will be issued based on the achievement level and the grant date fair value and will cliff vest in full on the third anniversary of the date of the grant.

As of September 26, 2020, total unrecognized compensation expense related to non-vested restricted stock units and non-vested performance-based restricted share units was approximately $43.8 million with a remaining weighted average expense recognition period of 2.0 years.

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Net Income Per Share

9 Months Ended

Sep. 26, 2020

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per Share:

The Company presents both basic and diluted net income per share on the Condensed Consolidated Statements of Income.  Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period.  Diluted net income per share is calculated by dividing net income by the weighted average diluted shares outstanding during the period. Dilutive shares are computed using the treasury stock method for share-based awards. Performance-based restricted share units are included in diluted shares only if the related performance conditions are considered satisfied as of the end of the reporting period. Net income per share is calculated as follows (in thousands, except per share amounts):

	Fiscal Three Months Ended					Fiscal Three Months Ended
	September 26, 2020					September 28, 2019
	Income		Shares	Per Share Amount		Income		Shares	Per Share  Amount
Basic net income per share:	$	190,610	116,339	$	1.64	$	122,133	118,956	$	1.03
Dilutive effect of share-based awards	—		1,406	(0.02)		—		1,102	(0.01)
Diluted net income per share:	$	190,610	117,745	$	1.62	$	122,133	120,058	$	1.02

	Fiscal Nine Months Ended					Fiscal Nine Months Ended
	September 26, 2020					September 28, 2019
	Income		Shares	Per Share Amount		Income		Shares	Per Share  Amount
Basic net income per share:	$	613,065	116,330	$	5.27	$	418,175	120,180	$	3.48
Dilutive effect of share-based awards	—		1,000	(0.04)		—		1,059	(0.03)
Diluted net income per share:	$	613,065	117,330	$	5.23	$	418,175	121,239	$	3.45

Anti-dilutive stock awards excluded from the above calculations totaled less than 0.1 million and approximately 0.3 million shares for the fiscal three months ended September 26, 2020 and September 28, 2019, respectively, and less than 0.1 million and approximately 0.4 million shares for the fiscal nine months ended September 26, 2020 and September 28, 2019, respectively.

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Debt

9 Months Ended

Oct. 16, 2020

Sep. 26, 2020

Debt Disclosure [Abstract]

Debt

Debt:

The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions):

	September 26, 2020		December 28, 2019		September 28, 2019
Senior Notes	$	150.0	$	150.0	$	150.0
Senior Credit Facility:
February 2016 Term Loan	130.0		145.0		150.0
June 2017 Term Loan	80.0		87.5		90.0
March 2020 Term Loan	200.0		—		—
April 2020 Term Loan	350.0		—		—
Revolving credit loans	—		15.0		255.0
Total outstanding borrowings	910.0		397.5		645.0
Less: unamortized debt issuance costs	(0.7)		(1.0)		(1.1)
Total debt	909.3		396.5		643.9
Less: current portion of long-term debt	(380.0)		(30.0)		(30.0)
Long-term debt	$	529.3	$	366.5	$	613.9
Outstanding letters of credit	$	50.4	$	32.0	$	34.0

Senior Notes

On August 14, 2017, the Company entered into a note purchase and private shelf agreement (the “Note Purchase Agreement”), pursuant to which the Company agreed to sell $150 million aggregate principal amount of senior unsecured notes due August 14, 2029 (the “2029 Notes”) in a private placement. The 2029 Notes bear interest at 3.70% per annum with interest payable semi-annually in arrears on each annual and semi-annual anniversary of the issuance date. The obligations under the Note Purchase Agreement are unsecured.

Pursuant to the Note Purchase Agreement, the 2029 Notes are redeemable by the Company, in whole at any time or in part from time to time, at 100% of the principal amount being redeemed, together with accrued and unpaid interest thereon and a make whole amount calculated by discounting all remaining scheduled payments on the 2029 Notes by the yield on the U.S. Treasury security with a maturity equal to the remaining average life of the Notes plus 0.50%.

Senior Credit Facility

On February 19, 2016, the Company entered into a senior credit facility (the “2016 Senior Credit Facility”), as amended from time to time, which provides borrowing capacity under term loan agreements as well as a revolving credit facility. Proceeds from the 2016 Senior Credit Facility may be used for working capital, capital expenditures, dividends, share repurchases, and other matters. There are no compensating balance requirements associated with the 2016 Senior Credit Facility.

The 2016 Senior Credit Facility contains a $500 million revolving credit facility (the “Revolver”) with a sublimit of $50 million for swingline loans. This agreement is unsecured and matures on February 19, 2022. Borrowings under the Revolver bear interest either at the bank’s base rate (3.250% at September 26, 2020) or at the London Inter-Bank Offer Rate (“LIBOR”) (0.146% at September 26, 2020) plus an additional amount ranging from 0.500% to 1.125% per annum (0.750% at September 26, 2020), adjusted quarterly based on our leverage ratio. The Company is also required to pay, quarterly in arrears, a commitment fee for unused capacity ranging from 0.075% to 0.200% per annum (0.125% at September 26, 2020), adjusted quarterly based on the Company’s leverage ratio.

On February 19, 2016, at the inception of the 2016 Senior Credit Facility, the Company entered into a $200 million term loan (the “February 2016 Term Loan”). This agreement is unsecured and matures on February 19, 2022. The February 2016 Term Loan of $200 million requires quarterly payments totaling $10 million per year in years one and two and $20 million per year in years three through the maturity date, with the remaining balance due in full on the maturity date of February 19, 2022. Borrowings under the February 2016 Term Loan bear interest either at the bank’s base rate (3.250% at September 26, 2020) or at LIBOR (0.146% at September 26, 2020) plus an additional amount ranging from 0.500% to 1.125% per annum (0.750% at September 26, 2020), adjusted quarterly based on our leverage ratio.

On June 15, 2017, pursuant to an accordion feature available under the 2016 Senior Credit Facility, the Company entered into an incremental term loan agreement (the “June 2017 Term Loan”) which increased the term loan capacity under the 2016 Senior Credit Facility by $100 million. This agreement is unsecured and matures on June 15, 2022. The June 2017 Term Loan of $100 million requires quarterly payments totaling $5 million per year in years one and two and $10 million per year in years three through the maturity date, with the remaining balance due in full on the maturity date of June 15, 2022. Borrowings under the June 2017 Term Loan bear interest either at the bank’s base rate (3.250% at September 26, 2020) or at LIBOR (0.146% at September 26, 2020) plus an additional 1.000% per annum.

On March 12, 2020, pursuant to an accordion feature available under the 2016 Senior Credit Facility, the Company entered into an incremental term loan agreement (the “March 2020 Term Loan”) which increased the term loan capacity under the 2016 Senior Credit Facility by $200 million. This agreement is unsecured and matures with the amount due in full on March 16, 2022. Borrowings under the March 2020 Term Loan bear interest either at the bank’s base rate (3.250% at September 26, 2020) or at LIBOR (0.146% at September 26, 2020) plus an additional 0.750% per annum.

On April 22, 2020, the Company entered into a second amendment to the 2016 Senior Credit Facility (the “Second Amendment”) to, among other things, increase the option to increase the aggregate principal amount of Revolving Loan Commitments and Incremental Term Loans (as defined in the 2016 Senior Credit Facility) up to an amount not to exceed $650 million. Simultaneously with the Second Amendment, the Company entered into an incremental term loan agreement (the “April 2020 Term Loan”) in the amount of $350 million, which is in addition to the 2016 Senior Credit Facility’s existing term loan and revolving credit facility. This agreement is unsecured and matures with the amount due in full on April 21, 2021. Borrowings under the April 2020 Term Loan bear interest either at the bank’s base rate (3.250% at September 26, 2020) plus an additional amount ranging from 0.250% to 1.500% per annum (0.750% at September 26, 2020) or at LIBOR (0.146% at

September 26, 2020), with a floor of 0.750%, plus an additional amount ranging from 1.250% to 2.500% per annum (1.750% at September 26, 2020), adjusted quarterly based on our leverage ratio.

As further described in Note 6 to the Condensed Consolidated Financial Statements, the Company has entered into interest rate swap agreements in order to hedge our exposure to variable rate interest payments associated with each of the term loans under the 2016 Senior Credit Facility other than the April 2020 Term Loan.

Covenants and Default Provisions of the Debt Agreements

The 2016 Senior Credit Facility and the Note Purchase Agreement (collectively, the “Debt Agreements”) require quarterly compliance with respect to two material covenants: a fixed charge coverage ratio and a leverage ratio.  Both ratios are calculated on a trailing twelve-month basis at the end of each fiscal quarter. The fixed charge coverage ratio compares earnings before interest, taxes, depreciation, amortization, share-based compensation, and rent expense (“consolidated EBITDAR”) to the sum of interest paid and rental expense (excluding any straight-line rent adjustments).  The fixed charge coverage ratio shall be greater than or equal to 2.00 to 1.0 as of the last day of each fiscal quarter. The leverage ratio compares rental expense (excluding any straight-line rent adjustments) multiplied by a factor of six plus total debt to consolidated EBITDAR.  The leverage ratio shall be less than or equal to 4.00 to 1.0 as of the last day of each fiscal quarter. The Debt Agreements also contain certain other restrictions regarding additional indebtedness, capital expenditures, business operations, guarantees, investments, mergers, consolidations and sales of assets, prepayment of debts, transactions with subsidiaries or affiliates, and liens.  As of September 26, 2020, the Company was in compliance with all debt covenants.

The Debt Agreements contain customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, certain events of bankruptcy and insolvency, material judgments, certain ERISA events, and invalidity of loan documents. Upon certain changes of control, payment under the Debt Agreements could become due and payable. In addition, under the Note Purchase Agreement, upon an event of default or change of control, the make whole payment described above may become due and payable.

The Note Purchase Agreement also requires that, in the event the Company amends its 2016 Senior Credit Facility, or any subsequent credit facility of $100 million or greater, such that it contains covenant or default provisions that are not provided in the Note Purchase Agreement or that are similar to those contained in the Note Purchase Agreement but which contain percentages, amounts, formulas or grace periods that are more restrictive than those set forth in the Note Purchase Agreement or are otherwise more beneficial to the lenders thereunder, the Note Purchase Agreement shall be automatically amended to include such additional or amended covenants and/or default provisions.

Subsequent Event - Amendment to Senior Credit Facility and Senior Notes

On October 16, 2020, the 2016 Senior Credit Facility and Note Purchase Agreement were amended to remove the Company’s material subsidiaries as guarantors thereof and delete the requirement that future material subsidiaries of the Company become guarantors, provided that the Note Purchase Agreement will require future subsidiary guarantees if they are likewise required under any other material credit facility. The respective agreements were also amended to permit the Company to issue senior unsecured notes on or before December 31, 2020, in an amount up to $750 million.

Subsequent Events

Subsequent Event - Amendment to Senior Credit Facility and Senior NotesOn October 16, 2020, the 2016 Senior Credit Facility and Note Purchase Agreement were amended to remove the Company’s material subsidiaries as guarantors thereof and delete the requirement that future material subsidiaries of the Company become guarantors, provided that the Note Purchase Agreement will require future subsidiary guarantees if they are likewise required under any other material credit facility. The respective agreements were also amended to permit the Company to issue senior unsecured notes on or before December 31, 2020, in an amount up to $750 million.

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Interest Rate Swaps

9 Months Ended

Sep. 26, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Interest Rate Swaps

Interest Rate Swaps:

The Company entered into an interest rate swap agreement which became effective on March 31, 2016, with a maturity date of February 19, 2021. The notional amount of this swap agreement began at $197.5 million (the principal amount of the February 2016 Term Loan borrowings as of March 31, 2016) and will amortize at the same time and in the same amount as the February 2016 Term Loan borrowings, as described in Note 5 to the Condensed Consolidated Financial Statements, up to the maturity date of the interest rate swap agreement on February 19, 2021. As of September 26, 2020, the notional amount of the interest rate swap was $130.0 million.

The Company entered into a second interest rate swap agreement which became effective on June 30, 2017, with a maturity date of June 15, 2022. The notional amount of this swap agreement began at $100 million (the principal amount of the June 2017 Term Loan borrowings as of June 30, 2017) and will amortize at the same time and in the same amount as the June 2017 Term Loan borrowings, as described in Note 5 to the Condensed Consolidated Financial Statements. As of September 26, 2020, the notional amount of the interest rate swap was $80.0 million.

The Company entered into a third interest rate swap agreement which became effective on March 18, 2020, with a maturity date of March 18, 2025. The notional amount of this swap agreement is fixed at $200 million.

The Company’s interest rate swap agreements are executed for risk management and are not held for trading purposes. The objective of the interest rate swap agreements is to mitigate interest rate risk associated with future changes in interest rates. To accomplish this objective, the interest rate swap agreements are intended to hedge the variable cash flows associated with the variable rate term loan borrowings under the 2016 Senior Credit Facility. The interest rate swap agreements entitle the Company to receive, at specified intervals, a variable rate of interest based on LIBOR in exchange for the payment of a fixed rate of interest throughout the life of the agreement, without exchange of the underlying notional amount.

The Company has designated its interest rate swap agreements as cash flow hedges and accounts for the underlying activity in accordance with hedge accounting. The interest rate swaps are presented within the Condensed Consolidated Balance Sheets at fair value. In accordance with hedge accounting, the gains and losses on interest rate swaps that are designated and qualify as cash flow hedges are recorded as a component of Other Comprehensive Income (“OCI”), net of related income taxes, and reclassified into earnings in the same income statement line and period during which the hedged transactions affect earnings.

As of September 26, 2020, amounts to be reclassified from Accumulated Other Comprehensive Income (“AOCI”) into interest during the next twelve months are not expected to be material. No significant amounts were excluded from the assessment of cash flow hedge effectiveness as of September 26, 2020.

The assets and liabilities measured at fair value related to the Company’s interest rate swaps, excluding accrued interest, were as follows (in thousands):

Derivatives Designated as Cash Flow Hedges	Balance Sheet Location	September 26, 2020		December 28, 2019		September 28, 2019
Interest rate swaps (short-term portion)	Other current assets	$	—	$	558	$	631
Interest rate swaps (long-term portion)	Other assets	—		91		105
Total derivative assets		$	—	$	649	$	736
Interest rate swaps (short-term portion)	Other accrued expenses	$	2,831	$	90	$	57
Interest rate swaps (long-term portion)	Other long-term liabilities	5,055		292		581
Total derivative liabilities		$	7,886	$	382	$	638

The offset to the interest rate swap asset or liability is recorded as a component of equity, net of deferred taxes, in AOCI, and will be reclassified into earnings over the term of the underlying debt as interest payments are made.

The following table summarizes the changes in AOCI, net of tax, related to the Company’s interest rate swaps (in thousands):

	September 26, 2020		December 28, 2019		September 28, 2019
Beginning fiscal year AOCI balance	$	199	$	3,814	$	3,814
Current fiscal period loss recognized in OCI	(6,066)		(4,332)		(4,458)
Cumulative adjustment as a result of ASU 2017-12 adoption	—		717		717
Other comprehensive loss, net of tax	(6,066)		(3,615)		(3,741)
Ending fiscal period AOCI balance	$	(5,867)	$	199	$	73

Cash flows related to the interest rate swaps are included in operating activities on the Condensed Consolidated Statements of Cash Flows.

The following table summarizes the impact of pre-tax gains and losses derived from the Company’s interest rate swaps (in thousands):

		Fiscal Three Months Ended				Fiscal Nine Months Ended
	Financial Statement Location	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Amount of gains/(losses) recognized in OCI during the period	Other comprehensive income/(loss)	$	629	$	(841)	$	(8,153)	$	(5,725)

The following table summarizes the impact of taxes affecting AOCI as a result of the Company’s interest rate swaps (in thousands):

	Fiscal Three Months Ended				Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Income tax expense/(benefit) of interest rate swaps on AOCI	$	161	$	(32)	$	(2,087)	$	(1,267)

Credit-risk-related contingent features

In accordance with the underlying interest rate swap agreements, the Company could be declared in default on its interest rate swap obligations if repayment of the underlying indebtedness (i.e., the Company’s term loans) is accelerated by the lender due to the Company's default on such indebtedness.

If the Company had breached any of the provisions in the underlying agreements at September 26, 2020, it could have been required to post full collateral or settle its obligations under the Company’s interest rate swap agreements. However, as of September 26, 2020, the Company had not breached any of these provisions or posted any collateral related to the underlying interest rate swap agreements.

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Capital Stock and Dividends

9 Months Ended

Sep. 26, 2020

Equity [Abstract]

Capital Stock and Dividends

Capital Stock and Dividends:

Capital Stock

The authorized capital stock of the Company consists of common stock and preferred stock. The Company is authorized to issue 400 million shares of common stock. The Company is also authorized to issue 40 thousand shares of preferred stock, with such designations, rights and preferences as may be determined from time to time by the Company's Board of Directors.

Dividends

During the first nine months of fiscal 2020 and 2019, the Company's Board of Directors declared the following cash dividends:

Date Declared	Dividend Amount Per Share of Common Stock		Record Date	Date Paid
August 5, 2020	$	0.40	August 24, 2020	September 9, 2020
May 6, 2020	$	0.35	May 26, 2020	June 9, 2020
February 5, 2020	$	0.35	February 24, 2020	March 10, 2020
August 7, 2019	$	0.35	August 26, 2019	September 10, 2019
May 8, 2019	$	0.35	May 28, 2019	June 11, 2019
February 6, 2019	$	0.31	February 25, 2019	March 12, 2019

It is the present intention of the Company's Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment of future dividends will be determined by the Company's Board of Directors in its sole discretion and will depend upon the earnings, financial condition and capital needs of the Company, along with any other factors that the Company's Board of Directors deems relevant.

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Treasury Stock

9 Months Ended

Sep. 26, 2020

Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract]

Treasury Stock

Treasury Stock:

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program up to $4.5 billion, exclusive of any fees, commissions, or other expenses related to such repurchases. The repurchases may be made from time to time on the open market or in privately negotiated transactions.  The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions.  Repurchased shares are accounted for at cost and will be held in treasury for future issuance.  The program may be limited or terminated at any time without prior notice. As of September 26, 2020, the Company had remaining authorization under the share repurchase program of $1.22 billion, exclusive of any fees, commissions, or other expenses.

The Company has suspended the share repurchase program effective March 12, 2020, in order to strengthen its liquidity and preserve cash while navigating the COVID-19 pandemic.

The following table provides the number of shares repurchased, average price paid per share, and total amount paid for share repurchases during the fiscal three and nine months ended September 26, 2020 and September 28, 2019, respectively (in thousands, except per share amounts):

	Fiscal Three Months Ended				Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Total number of shares repurchased	—		1,470		2,853		4,926
Average price paid per share	$	—	$	105.97	$	92.28	$	99.46
Total cash paid for share repurchases	$	—	$	155,742	$	263,219	$	489,977

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Income Taxes

9 Months Ended

Sep. 26, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes:

The Company’s effective income tax rate was 22.2% in the third quarter of both fiscal 2020 and 2019. The effective income tax rate was 22.6% in the first nine months of fiscal 2020 compared to 22.2% in the first nine months of fiscal 2019. The primary driver for the increase in the Company’s effective income tax rate in the nine month period was attributable to a reduction in the impact of the tax benefit associated with share-based compensation.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in the U.S. on March 27, 2020. We do not anticipate that the enactment of this legislation will significantly impact our full year effective tax rate in fiscal 2020.

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Commitments and Contingencies

9 Months Ended

Sep. 26, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies:

Construction and Real Estate Commitments

At September 26, 2020, there were no material commitments related to real estate or construction projects extending greater than twelve months.

Letters of Credit

At September 26, 2020, there were $50.4 million of outstanding letters of credit under the 2016 Senior Credit Facility.

Litigation

On October 9, 2020, an alleged stockholder filed a derivative lawsuit in the U.S. District Court for the Middle District of Tennessee, purportedly on the Company's behalf, against all current and two former members of our Board of Directors, and the Company as a nominal defendant, seeking monetary damages, interest, corporate governance changes, disgorgement, restitution, mandated community investment, punitive damages, and an award of attorneys' fees, expert fees, and costs. Plaintiffs allege that: (a) defendants misrepresented and omitted material facts in the Company's proxy statements with respect to diversity; (b) defendants breached their fiduciary duties by permitting the Company to disseminate materially misleading and inaccurate information regarding the Company’s commitment to diversity; and (c) defendants received unjust compensation and were unjustly enriched. While the Company continues to evaluate these claims, we do not believe this litigation will have a material impact on our financial position or results of operations.

The Company is also involved in various other litigation matters arising in the ordinary course of business. The Company believes that, based upon information currently available, any estimated loss related to such matters has been adequately provided for in accrued liabilities to the extent probable and reasonably estimable. Accordingly, the Company currently expects these matters will be resolved without material adverse effect on its consolidated financial position, results of operations, or cash flows.  However, litigation and other legal matters involve an element of uncertainty. Future developments in such matters, including adverse decisions or settlements or resulting required changes to the Company's business operations, could affect our consolidated operating results when resolved in future periods or could result in liability or other amounts material to the Company's Condensed Consolidated Financial Statements.

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Segment Reporting

9 Months Ended

Sep. 26, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting:

The Company has one reportable segment which is the retail sale of products that support the rural lifestyle.  The following table indicates the percentage of net sales represented by each major product category during the fiscal three and nine months ended September 26, 2020 and September 28, 2019:

	Fiscal Three Months Ended				Fiscal Nine Months Ended
Product Category:	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Livestock and Pet	48	%	49	%	48	%	48	%
Hardware, Tools and Truck	23		23		21		21
Seasonal, Gift and Toy Products	19		18		21		20
Clothing and Footwear	5		5		5		6
Agriculture	5		5		5		5
Total	100	%	100	%	100	%	100	%

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New Accounting Pronouncements

9 Months Ended

Sep. 26, 2020

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

New Accounting Pronouncements Recently Adopted and Not Yet Adopted

New Accounting Pronouncements:

New Accounting Pronouncements Recently Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. The new guidance applies to financial assets measured at amortized cost basis, including receivables that result from revenue transactions and held-to-maturity debt securities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption was permitted for fiscal years beginning after December 15, 2018. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which amends the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures.  This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” This update clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted.  The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this guidance on a prospective basis in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

New Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of LIBOR related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this guidance to have a material impact on its Condensed Consolidated Financial Statements and related disclosures.

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Accounting Changes and Error Corrections (Policies)

9 Months Ended

Sep. 26, 2020

Accounting Changes and Error Corrections [Abstract]

New Accounting Pronouncements Recently Adopted and Not Yet Adopted

New Accounting Pronouncements:

New Accounting Pronouncements Recently Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. The new guidance applies to financial assets measured at amortized cost basis, including receivables that result from revenue transactions and held-to-maturity debt securities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption was permitted for fiscal years beginning after December 15, 2018. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which amends the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures.  This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” This update clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted.  The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this guidance on a prospective basis in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures.

New Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of LIBOR related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this guidance to have a material impact on its Condensed Consolidated Financial Statements and related disclosures.

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Share Based Compensation (Tables)

9 Months Ended

Sep. 26, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock Options

The following table summarizes information concerning stock option grants during the first nine months of fiscal 2020:

	Fiscal Nine Months Ended
	September 26, 2020
Stock options granted	443,967
Weighted average exercise price	$	94.62
Weighted average grant date fair value per option	$	19.46

Restricted Stock Units and Performance-Based Restricted Share Units

The following table summarizes information concerning restricted stock unit and performance-based restricted share unit grants during the first nine months of fiscal 2020:

	Fiscal Nine Months Ended
	September 26, 2020
Restricted stock units granted	320,053
Performance-based restricted share units granted (a)	83,368
Weighted average grant date fair value per share	$	94.39

(a) Assumes 100% target level achievement of the relative performance targets.

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Net Income Per Share (Tables)

9 Months Ended

Sep. 26, 2020

Earnings Per Share [Abstract]

Net Income Per Share

Net income per share is calculated as follows (in thousands, except per share amounts):

	Fiscal Three Months Ended					Fiscal Three Months Ended
	September 26, 2020					September 28, 2019
	Income		Shares	Per Share Amount		Income		Shares	Per Share  Amount
Basic net income per share:	$	190,610	116,339	$	1.64	$	122,133	118,956	$	1.03
Dilutive effect of share-based awards	—		1,406	(0.02)		—		1,102	(0.01)
Diluted net income per share:	$	190,610	117,745	$	1.62	$	122,133	120,058	$	1.02

	Fiscal Nine Months Ended					Fiscal Nine Months Ended
	September 26, 2020					September 28, 2019
	Income		Shares	Per Share Amount		Income		Shares	Per Share  Amount
Basic net income per share:	$	613,065	116,330	$	5.27	$	418,175	120,180	$	3.48
Dilutive effect of share-based awards	—		1,000	(0.04)		—		1,059	(0.03)
Diluted net income per share:	$	613,065	117,330	$	5.23	$	418,175	121,239	$	3.45

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Debt (Tables)

9 Months Ended

Sep. 26, 2020

Debt Disclosure [Abstract]

Schedule of Outstanding Debt

The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions):

	September 26, 2020		December 28, 2019		September 28, 2019
Senior Notes	$	150.0	$	150.0	$	150.0
Senior Credit Facility:
February 2016 Term Loan	130.0		145.0		150.0
June 2017 Term Loan	80.0		87.5		90.0
March 2020 Term Loan	200.0		—		—
April 2020 Term Loan	350.0		—		—
Revolving credit loans	—		15.0		255.0
Total outstanding borrowings	910.0		397.5		645.0
Less: unamortized debt issuance costs	(0.7)		(1.0)		(1.1)
Total debt	909.3		396.5		643.9
Less: current portion of long-term debt	(380.0)		(30.0)		(30.0)
Long-term debt	$	529.3	$	366.5	$	613.9
Outstanding letters of credit	$	50.4	$	32.0	$	34.0

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Interest Rate Swaps (Tables)

9 Months Ended

Sep. 26, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Assets/Liabilities at Fair Value, Excluding Accrued Interest

The assets and liabilities measured at fair value related to the Company’s interest rate swaps, excluding accrued interest, were as follows (in thousands):

Derivatives Designated as Cash Flow Hedges	Balance Sheet Location	September 26, 2020		December 28, 2019		September 28, 2019
Interest rate swaps (short-term portion)	Other current assets	$	—	$	558	$	631
Interest rate swaps (long-term portion)	Other assets	—		91		105
Total derivative assets		$	—	$	649	$	736
Interest rate swaps (short-term portion)	Other accrued expenses	$	2,831	$	90	$	57
Interest rate swaps (long-term portion)	Other long-term liabilities	5,055		292		581
Total derivative liabilities		$	7,886	$	382	$	638

Derivative Instruments, Gain (Loss)

The following table summarizes the changes in AOCI, net of tax, related to the Company’s interest rate swaps (in thousands):

	September 26, 2020		December 28, 2019		September 28, 2019
Beginning fiscal year AOCI balance	$	199	$	3,814	$	3,814
Current fiscal period loss recognized in OCI	(6,066)		(4,332)		(4,458)
Cumulative adjustment as a result of ASU 2017-12 adoption	—		717		717
Other comprehensive loss, net of tax	(6,066)		(3,615)		(3,741)
Ending fiscal period AOCI balance	$	(5,867)	$	199	$	73

Derivative Instruments, Gain (Loss), pre-tax

The following table summarizes the impact of pre-tax gains and losses derived from the Company’s interest rate swaps (in thousands):

		Fiscal Three Months Ended				Fiscal Nine Months Ended
	Financial Statement Location	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Amount of gains/(losses) recognized in OCI during the period	Other comprehensive income/(loss)	$	629	$	(841)	$	(8,153)	$	(5,725)

Derivative Instruments, Gain (Loss), tax impact

The following table summarizes the impact of taxes affecting AOCI as a result of the Company’s interest rate swaps (in thousands):

	Fiscal Three Months Ended				Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Income tax expense/(benefit) of interest rate swaps on AOCI	$	161	$	(32)	$	(2,087)	$	(1,267)

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Capital Stock and Dividends (Tables)

9 Months Ended

Sep. 26, 2020

Equity [Abstract]

Schedule of Dividends Payable

During the first nine months of fiscal 2020 and 2019, the Company's Board of Directors declared the following cash dividends:

Date Declared	Dividend Amount Per Share of Common Stock		Record Date	Date Paid
August 5, 2020	$	0.40	August 24, 2020	September 9, 2020
May 6, 2020	$	0.35	May 26, 2020	June 9, 2020
February 5, 2020	$	0.35	February 24, 2020	March 10, 2020
August 7, 2019	$	0.35	August 26, 2019	September 10, 2019
May 8, 2019	$	0.35	May 28, 2019	June 11, 2019
February 6, 2019	$	0.31	February 25, 2019	March 12, 2019

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Treasury Stock Treasury Stock (Tables)

9 Months Ended

Sep. 26, 2020

Equity, Class of Treasury Stock [Line Items]

Class of Treasury Stock, Shares Repurchased

The following table provides the number of shares repurchased, average price paid per share, and total amount paid for share repurchases during the fiscal three and nine months ended September 26, 2020 and September 28, 2019, respectively (in thousands, except per share amounts):

	Fiscal Three Months Ended				Fiscal Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Total number of shares repurchased	—		1,470		2,853		4,926
Average price paid per share	$	—	$	105.97	$	92.28	$	99.46
Total cash paid for share repurchases	$	—	$	155,742	$	263,219	$	489,977

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Segment Reporting (Tables)

9 Months Ended

Sep. 26, 2020

Segment Reporting [Abstract]

Major Product Category

The following table indicates the percentage of net sales represented by each major product category during the fiscal three and nine months ended September 26, 2020 and September 28, 2019:

	Fiscal Three Months Ended				Fiscal Nine Months Ended
Product Category:	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Livestock and Pet	48	%	49	%	48	%	48	%
Hardware, Tools and Truck	23		23		21		21
Seasonal, Gift and Toy Products	19		18		21		20
Clothing and Footwear	5		5		5		6
Agriculture	5		5		5		5
Total	100	%	100	%	100	%	100	%

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Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Sep. 26, 2020	Dec. 28, 2019	Sep. 28, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unsecured Debt	$ 910.0	$ 397.5	$ 645.0
Derivative, Fair Value, Net	$ (7.9)	$ 0.3	$ 0.1

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Share Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee stock purchase program discount percentage	15.00%		15.00%
Share-based compensation plan modifications			no
Share-based Payment Arrangement, Noncash Expense	$ 12,500	$ 7,400	$ 26,977	$ 25,755
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted			443,967
Weighted average exercise price			$ 94.62
Weighted average fair value per option			$ 19.46
Total unrecognized compensation expense	10,100		$ 10,100
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 years
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted			320,053
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted			83,368
Restricted Stock Units and Performance-Based Restricted Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value per share			$ 94.39
Total unrecognized compensation expense	$ 43,800		$ 43,800
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 years

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Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 26, 2020	Jun. 27, 2020	Mar. 28, 2020	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Sep. 26, 2020	Sep. 28, 2019
Earnings Per Share, Basic [Abstract]
Net income	$ 190,610	$ 338,678	$ 83,777	$ 122,133	$ 219,210	$ 76,832	$ 613,065	$ 418,175
Weighted average number of shares outstanding, basic	116,339			118,956			116,330	120,180
Net income per share – basic	$ 1.64			$ 1.03			$ 5.27	$ 3.48
Earnings Per Share, Diluted [Abstract]
Dilutive stock options and restricted stock units outstanding, income	$ 0			$ 0			$ 0	$ 0
Dilutive stock options and restricted stock units outstanding, per share (in shares)	1,406			1,102			1,000	1,059
Dilutive stock options and restricted stock units outstanding, per share (in dollars per share)	$ (0.02)			$ (0.01)			$ (0.04)	$ (0.03)
Net income	$ 190,610	$ 338,678	$ 83,777	$ 122,133	$ 219,210	$ 76,832	$ 613,065	$ 418,175
Weighted average number of shares outstanding, diluted	117,745			120,058			117,330	121,239
Net income per share, diluted (in dollars per share)	$ 1.62			$ 1.02			$ 5.23	$ 3.45
Antidilutive securities excluded from computation of earnings per share, amount	100			300			100	400

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Senior Notes (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 26, 2020	Dec. 28, 2019	Sep. 28, 2019	Aug. 14, 2017
Debt Instrument [Line Items]
Senior Notes	$ 150.0	$ 150.0	$ 150.0	$ 150.0
Senior Notes, Maturity Date	Aug. 14, 2029
Senior Notes, Interest Rate	3.70%
Debt Instrument, Percentage of Principal Amount Redeemable	100.00%
Shelf Notes - Additional Interest Rate	Notes plus 0.50%

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Senior Credit Facility - Credit Agreement (Details) - USD ($)					3 Months Ended		6 Months Ended	9 Months Ended
	Mar. 12, 2020	Sep. 28, 2019	Jun. 15, 2017	Feb. 19, 2016	Sep. 26, 2020	Sep. 28, 2019	Jun. 27, 2020	Sep. 26, 2020	Dec. 28, 2019
Line of Credit Facility [Line Items]
Unsecured Debt		$ 645,000,000.0			$ 910,000,000.0	$ 645,000,000.0		$ 910,000,000.0	$ 397,500,000
Unamortized Debt Issuance Costs		(1,100,000)			(700,000)	(1,100,000)		(700,000)	(1,000,000.0)
Unsecured debt, net of debt issuance costs		643,900,000			909,300,000	643,900,000		909,300,000	396,500,000
Unsecured Debt, Current		(30,000,000)			(380,000,000)	(30,000,000)		(380,000,000)	(30,000,000)
Long-term Debt, Excluding Current Maturities		613,885,000			529,264,000	613,885,000		529,264,000	366,480,000
Letters of Credit Outstanding, Amount		$ 34,000,000.0			$ 50,400,000	34,000,000.0		$ 50,400,000	32,000,000.0
Senior credit facility, maximum borrowing capacity				$ 500,000,000
Swingline Loan, Maximum Borrowing Capacity				50,000,000
Debt instrument, basis spread on variable rate					0.75%
Commitment fee for unused capacity		0.125%
Debt Instrument, Interest Rate, Stated Percentage - June 2017 Term Loan					1.00%			1.00%
Compensating Balance, Amount					$ 0			$ 0
Debt Instrument, Covenant Compliance		all
Amount of incremental credit facility which will result in modification of debt covenants					$100 million or greater
Base Rate
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate at Period End					3.25%			3.25%
London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate at Period End					0.146%			0.146%
April 2020 Term Loan
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate at Period End					1.75%			1.75%
Minimum
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate					0.50%
Commitment fee for unused capacity					0.075%
Maximum
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate					1.125%
Commitment fee for unused capacity					0.20%
April 2020 Term Loan Maximum [Member]
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate					1.50%
April 2020 Term Loan Additional Minimum [Member]
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate					1.25%
April 2020 Term Loan Additional Maximum [Member]
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate					2.50%
April 2020 Term Loan Minimum [Member]
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate					0.25%
February 2016 Term Loan
Line of Credit Facility [Line Items]
Notional Amount, Current		$ 150,000,000.0			$ 130,000,000.0	150,000,000.0		$ 130,000,000.0	145,000,000.0
Term Loan, Maximum Borrowing Capacity				$ 200,000,000
Due in years one and two February 2016 Term Loan [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Amount of Periodic Payment								10,000,000
Due in years three through Maturity February 2016 Term Loan [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Amount of Periodic Payment								20,000,000
June 2017 Term Loan
Line of Credit Facility [Line Items]
Notional Amount, Current		90,000,000.0			80,000,000.0	90,000,000.0		80,000,000.0	87,500,000
Term Loan, Maximum Borrowing Capacity			$ 100,000,000
Due in years one and two June 2017 Term Loan [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Amount of Periodic Payment					5,000,000
Due in years three through five June 2017 Term Loan [Member] [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Amount of Periodic Payment					10,000,000
Term Loan (Member) [Member]
Line of Credit Facility [Line Items]
Notional Amount, Current		0			$ 200,000,000.0	0		200,000,000.0	0
Term Loan, Maximum Borrowing Capacity	$ 200,000,000
Debt instrument, basis spread on variable rate					0.75%
April 2020 Term Loan
Line of Credit Facility [Line Items]
Notional Amount, Current		$ 0			$ 350,000,000.0	0		$ 350,000,000.0	$ 0
Term Loan, Maximum Borrowing Capacity	$ 350,000,000
Debt instrument, basis spread on variable rate					0.75%
Amount of incremental credit facility which will result in modification of debt covenants								650 million
Number of Financial Covenants [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Covenant Description					two material covenants
2016 Senior Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Month-end Outstanding Amount					$ 0	$ 255,000,000.0	$ 15,000,000.0
Fixed Charge Coverage Ratio Minimum Requirement [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Covenant Description					2.00 to 1.0
Leverage Ratio Maximum Requirement [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Covenant Description					4.00 to 1.0

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Interest Rate Swaps (Details) - USD ($) $ in Thousands				3 Months Ended			9 Months Ended
	Mar. 18, 2020	Jun. 30, 2017	Mar. 31, 2016	Sep. 26, 2020	Mar. 28, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019	Dec. 28, 2019	Dec. 29, 2018
Derivative [Line Items]
Other Comprehensive Income (Loss), Net of Tax				$ 468		$ (809)	$ (6,066)	$ (4,458)
Total Derivative Asset				0		736	0	736	$ 649
Total Derivative Liability				7,886		638	7,886	638	382
February 2016 Term Loan
Derivative [Line Items]
Notional Amount, Current				130,000		150,000	130,000	150,000	145,000
June 2017 Term Loan
Derivative [Line Items]
Notional Amount, Current				80,000		90,000	80,000	90,000	87,500
Beginning Balance [Member]
Derivative [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax									199	$ 3,814
Other Comprehensive Income (Loss) [Member]
Derivative [Line Items]
Change in fair value of interest rate swaps, net of taxes					$ (4,332)		(6,066)	(4,458)
Other Comprehensive Income (Loss), Net of Tax [Member]
Derivative [Line Items]
Other Comprehensive Income (Loss), Net of Tax					$ (3,615)		(6,066)	(3,741)
AOCI Ending Balance [Member]
Derivative [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax				$ (5,867)		73	(5,867)	73	199
February 2016 Term Loan
Derivative [Line Items]
Interest Rate Swap Inception Date			Mar. 31, 2016
Interest Rate Swap Maturity Date				Feb. 19, 2021
Interest Rate Swap, Beginning Notional Amount			$ 197,500
June 2017 Term Loan
Derivative [Line Items]
Interest Rate Swap Inception Date		Jun. 30, 2017
Interest Rate Swap Maturity Date				Jun. 15, 2022
Interest Rate Swap, Beginning Notional Amount		$ 100,000
Interest Rate Swap Asset Portion
Derivative [Line Items]
Derivative Asset, Current				$ 0		631	0	631	558
Derivative Asset, Noncurrent				0		105	0	105	91
Interest Rate Swap Liability Portion
Derivative [Line Items]
Derivative Liability, Current				2,831		57	2,831	57	90
Derivative Liability, Noncurrent				$ 5,055		$ 581	5,055	$ 581	$ 292
Term Loan (Member) [Member]
Derivative [Line Items]
Interest Rate Swap Inception Date	Mar. 18, 2020
Interest Rate Swap Maturity Date				Mar. 18, 2025
Interest Rate Swap, Beginning Notional Amount				$ 200,000			$ 200,000

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Interest Rate Swaps Schedule of Changes in AOCI Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 26, 2020	Mar. 28, 2020	Sep. 28, 2019	Mar. 30, 2019	Sep. 26, 2020	Sep. 28, 2019	Dec. 28, 2019	Dec. 29, 2018
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Cumulative adjustment as a result of ASU 2017-12 adoption				—	—	2,084,880
Cumulative adjustment as a result of ASU 2017-12 adoption				—	—	2,084,880
Other Comprehensive Income (Loss), Net of Tax	$ 468		$ (809)		$ (6,066)	$ (4,458)
Beginning Balance [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax							$ 199	$ 3,814
Accounting Standards Update 2017-12 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Cumulative adjustment as a result of ASU 2017-12 adoption		717			—	717
Cumulative adjustment as a result of ASU 2017-12 adoption		717			—	717

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Interest Rate Swaps Current Period OCI Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax	$ 629	$ (841)	$ (8,153)	$ (5,725)

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Interest Rate Swaps Tax Impact of Derivative Liability on Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax	$ 161	$ (32)	$ (2,087)	$ (1,267)

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Interest Rate Swaps Effective Date of Interest Rate Swap Agreement (Details)	Jun. 30, 2017	Mar. 31, 2016
February 2016 Term Loan
Derivative [Line Items]
Interest Rate Swap Inception Date		Mar. 31, 2016
June 2017 Term Loan
Derivative [Line Items]
Interest Rate Swap Inception Date	Jun. 30, 2017

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Capital Stock - Narrative (Details) - shares	Sep. 26, 2020	Dec. 28, 2019	Sep. 28, 2019
Equity [Abstract]
Common Stock, Shares Authorized	400,000,000	400,000,000	400,000,000
Preferred Stock, Shares Authorized	40,000	40,000	40,000

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Capital Stock and Dividends (Details) - $ / shares							3 Months Ended		9 Months Ended
	Aug. 05, 2020	May 06, 2020	Feb. 05, 2020	Aug. 07, 2019	May 08, 2019	Feb. 06, 2019	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Equity [Abstract]
Common Stock, Dividends, Per Share, Declared	$ 0.40	$ 0.35	$ 0.35	$ 0.35	$ 0.35	$ 0.31	$ 0.40	$ 0.35	$ 1.10	$ 1.01

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Treasury Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 26, 2020	Jun. 27, 2020	Mar. 28, 2020	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Sep. 26, 2020	Sep. 28, 2019
Equity, Class of Treasury Stock [Line Items]
Board-approved share repurchase program of common stock	$ 4,500,000						$ 4,500,000
Remaining authorization under the share repurchase program	$ 1,220,000						$ 1,220,000
Total number of shares repurchased	0			1,470			2,853	4,926
Average price paid per share	$ 0			$ 105.97			$ 92.28	$ 99.46
Total cash paid for share repurchases	$ 0	$ 0	$ 263,219	$ 155,742	$ 178,916	$ 155,319	$ 263,219	$ 489,977

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Income Taxes (Details)	3 Months Ended	9 Months Ended
	Sep. 26, 2020	Sep. 26, 2020	Sep. 28, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate	22.20%	22.60%	22.20%

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Commitments and Contingencies (Details) - USD ($) $ in Millions	Sep. 26, 2020	Dec. 28, 2019	Sep. 28, 2019
Commitments and Contingencies Disclosure [Abstract]
Purchase Obligation, Due Second Year	$ 0.0
Letters of Credit Outstanding, Amount	$ 50.4	$ 32.0	$ 34.0

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Segment Reporting (Details)	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Livestock and Pet
Revenue from External Customer [Line Items]
Percentage of sales	48.00%	49.00%	48.00%	48.00%
Hardware, Tools and Truck [Member]
Revenue from External Customer [Line Items]
Percentage of sales	23.00%	23.00%	21.00%	21.00%
Seasonal, Gift and Toy Products [Member]
Revenue from External Customer [Line Items]
Percentage of sales	19.00%	18.00%	21.00%	20.00%
Clothing and Footwear
Revenue from External Customer [Line Items]
Percentage of sales	5.00%	5.00%	5.00%	6.00%
Agriculture
Revenue from External Customer [Line Items]
Percentage of sales	5.00%	5.00%	5.00%	5.00%
Total
Revenue from External Customer [Line Items]
Percentage of sales	100.00%	100.00%	100.00%	100.00%

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Segment Reporting Number of Reportable Segments (Details)	3 Months Ended
	Sep. 26, 2020 segment
Segment Reporting [Abstract]
Number of Reportable Segments	1