UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                ----------------
                                    FORM 10-K
 (Mark One)

|X|     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

                  For the fiscal year ended December 30, 2006

|_|     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             (I.R.S. Employer Identification No.)
Incorporation or Organization)

                  200 POWELL PLACE, BRENTWOOD, TENNESSEE 37027
          (Address of Principal Executive Offices, including zip code)

                                 (615) 366-4600
              (Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(g) of the Act:  None

Securities Registered Pursuant to Section 12(b) of the Act:

        Title of each class            Name of each exchange on which registered

  -------------------------------      -----------------------------------------
   Common Stock, $.008 par value               Nasdaq Global Select Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
YES  X   NO
    ----          ----

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
YES      NO        X
    ----          ----

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  X   NO
    ----          ----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act (check
one):
Large accelerated filer  X    Accelerated filer       Non-accelerated filer
                        ---                     ---                          ---

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act.)
YES      NO        X
    ----          ----

The aggregate market value of the Common Stock held by non-affiliates of the
registrant, based on the closing price of the Common Stock on The NASDAQ
National Market on July 1, 2006, the last business day of the registrant's most
recently completed second fiscal quarter, was $1,704,579,804. For purposes of
this response, the registrant has assumed that its directors, executive
officers, and beneficial owners of 5% or more of its Common Stock are the
affiliates of the registrant.

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

             CLASS                             OUTSTANDING AT JANUARY 31, 2007
  -----------------------------                -------------------------------
  Common Stock, $.008 par value                         40,302,135

DOCUMENTS INCORPORATED BY REFERENCE:
PORTIONS OF THE REGISTRANT'S DEFINITIVE PROXY STATEMENT FOR ITS 2007 ANNUAL
MEETING OF SHAREHOLDERS ARE INCORPORATED BY REFERENCE INTO PART III HEREOF.







                                                 TRACTOR SUPPLY COMPANY
                                                         INDEX

                                                                                                             FORM 10-K
                                                                                                              REPORT
ITEM NO.                                                                                                       PAGE
--------                                                                                                       ----
                                                                                                              
FORWARD-LOOKING STATEMENTS.......................................................................................ii

PART I

1.       BUSINESS.................................................................................................1
1A.      RISK FACTORS.............................................................................................6
1B.      UNRESOLVED STAFF COMMENTS................................................................................8
2.       PROPERTIES...............................................................................................8
3.       LEGAL PROCEEDINGS........................................................................................9
4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS......................................................9

PART II

5.       MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER
         REPURCHASES OF EQUITY SECURITIES........................................................................10
6.       SELECTED FINANCIAL DATA.................................................................................12
7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................14
7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..............................................24
8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.............................................................25
9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE....................49
9A.      CONTROLS AND PROCEDURES.................................................................................49
9B.      OTHER INFORMATION.......................................................................................49

PART III

10.      DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE..................................................49
11.      EXECUTIVE COMPENSATION..................................................................................49
12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS..........50
13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE...............................50
14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES..................................................................50

PART IV

15.      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES..............................................................51


                                       i




                    FORWARD-LOOKING STATEMENTS OR INFORMATION

This Form 10-K and statements included or incorporated by reference in this Form
10-K include certain historical and forward-looking information. The
forward-looking statements included are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 (the "Act").
All statements, other than statements of historical facts, which address
activities, events or developments that we expect or anticipate will or may
occur in the future, including such things as future capital expenditures
(including their amount and nature), business strategy, expansion and growth of
the business operations and other such matters are forward-looking statements.
To take advantage of the safe harbor provided by the Act, we are identifying
certain factors that could cause actual results to differ materially from those
expressed in any forward-looking statements, whether oral or written. These
factors include general economic cycles affecting consumer spending, weather
factors, operating factors affecting customer satisfaction, consumer debt
levels, inflation, pricing and other competitive factors, the ability to
attract, train and retain qualified employees, the ability to manage growth and
identify suitable locations and negotiate favorable lease agreements on new and
relocated stores, the timing and acceptance of new products in the stores, the
mix of goods sold, the continued availability of favorable credit sources,
capital market conditions in general, the ability to increase sales at existing
stores, the ability to retain vendors, reliance on foreign suppliers, management
of our information systems and the seasonality of our business and those
described in Item 1A. "Risk Factors." Forward-looking statements are based on
currently available information and are based on our current expectations and
projections about future events. We undertake no obligation to release publicly
any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

                                       ii




                                     PART I

ITEM 1.  BUSINESS
-------  --------

OVERVIEW

Tractor Supply Company is the largest operator of retail farm and ranch stores
in the United States and is focused on supplying the lifestyle needs of
recreational farmers and ranchers and those who enjoy the rural lifestyle, as
well as tradesmen and small businesses. Our stores are located in towns outlying
major metropolitan markets and in rural communities and offer the following
comprehensive selection of merchandise:

        o       Equine, pet and animal products, including items necessary for
                their health, care, growth and containment
        o       Maintenance products for agricultural and rural use
        o       Hardware and tool products
        o       Seasonal products, including lawn and garden power equipment
        o       Truck, trailer and towing products, and
        o       Work/recreational clothing and footwear for the entire family.

Our Tractor Supply stores typically range in size from 15,500 square feet to
18,500 square feet of inside selling space and additional outside selling space.
We are developing stores using one of five standard prototypes as well as
existing building structures. Our wholly-owned subsidiary, Del's Farm Supply,
LLC ("Del's"), operates 18 stores, primarily in the Pacific Northwest, that
offer a wide selection of products (primarily in the equine, pet and animal
category) tailored to those who enjoy the rural lifestyle. Del's stores
currently range in size from approximately 1,500 to 7,000 square feet of inside
selling space with additional outside selling space.

Tractor Supply Company has one reportable industry segment - the operation of
farm and ranch retail stores.

At December 30, 2006, we operated 676 retail farm and ranch stores in 37 states
and one Canadian province.

SEASONALITY AND WEATHER

Our business is highly seasonal. Historically, our sales and profits have been
the highest in the second and fourth fiscal quarters of each year due to the
sale of seasonal products. Unseasonable weather, excessive rain, drought, and
early or late frosts may also affect our sales. We believe, however, that the
impact of severe weather conditions is somewhat mitigated by the geographic
dispersion of our stores.

We experience our highest inventory and accounts payable levels during the first
fiscal quarter each year for purchases of seasonal products in anticipation of
the spring selling season and again during the third fiscal quarter in
anticipation of the winter selling season.

BUSINESS STRATEGY

We believe our sales and earnings growth is a result of focused execution of our
business strategy, which includes the following key components:

        MARKET NICHE
        We have identified a specialized market niche: supplying the lifestyle
        needs of recreational farmers and ranchers and those who enjoy the rural
        lifestyle (which we refer to as the "Out Here" lifestyle), as well as
        tradesmen and small businesses. By focusing our product mix on these
        core customers, we believe we are differentiated from general
        merchandise, home center and other specialty retailers.

        CUSTOMER SERVICE
        We are committed to providing our customers a high level of in-store
        service through our motivated, well-trained store employees. We believe
        the ability of our store employees to provide friendly, responsive and
        seasoned advice helps to promote strong customer loyalty and repeat
        shopping.

                                       1




        As such, we seek to provide our store employees with decision-making
        authority, product knowledge and training to enable them to meet our
        customers' needs.

        We endeavor to staff our stores with courteous, highly motivated
        employees and devote considerable resources to training store employees,
        often in cooperation with our vendors. Our training programs include (i)
        a full management training program which covers all aspects of our
        operations, (ii) product knowledge modules produced in conjunction with
        key vendors, (iii) frequent management skills training classes, (iv)
        semi-annual store managers meetings with vendor product presentations,
        (v) vendor sponsored in-store training programs and (vi) ongoing product
        information updates from our management headquarters, the Store Support
        Center. We seek to hire and train store employees with farming and
        ranching backgrounds, with particular emphasis on general maintenance,
        equine and welding.

        We offer proprietary, private label credit cards for individual retail
        and business customers. In addition, we accept cash, checks, debit
        cards, Visa, MasterCard and Discover credit cards and gift cards.

        STORE ENVIRONMENT
        Our stores are designed and managed to make shopping an enjoyable
        experience and to maximize sales and operating efficiencies. Stores
        utilize several layouts, designed to provide an open environment,
        optimal product placement and visual display locations. In addition,
        these layouts allow for departmental space to be easily reallocated and
        visual displays to be easily changed for seasonal products and
        promotions. Display and product placement information is sent to stores
        monthly to ensure quality and uniformity among the stores. Informative
        signs are located throughout each store to assist customers with
        purchasing decisions and merchandise location by comparison of "good,
        better, best" qualities, clear pricing and useful information regarding
        product benefits and suggestions for appropriate accessories. The
        general uniformity of our store layouts and visual displays afford our
        customers a feeling of familiarity and enhances the shopping experience.
        To further enhance the shopping experience, all of our store employees
        wear highly visible red vests, aprons or smocks and nametags, and our
        customer service and checkout counters are conveniently located.

        MERCHANDISING
        We offer a differentiated assortment of products for our target
        customers. Our broad product assortment is tailored to meet the regional
        and geographic needs of our markets, as well as the physical store size.
        Our full line of product offerings is supported by a strong in-stock
        inventory position with an average of 13,500 to 15,000 unique products
        per store. No one product accounted for more than 10% of our sales
        during 2006.

        Our stores carry a wide selection of high quality, nationally
        recognized, name brand merchandise. We also market a growing list of
        products under our "private-label programs," i.e. products manufactured
        by a number of vendors at our direction and specifically for our sole
        benefit. The trademarks in the private label brand names are owned by us
        with the exception of a very limited number of brands over which we have
        sole control but have not yet opted to own. Our private label brands
        include:

        o       HUSKEE (outdoor power equipment)
        o       TRAVELLER (truck/automotive products)
        o       RETRIEVER and PAWS `N CLAWS (pet foods)
        o       DUMOR and PRODUCERS PRIDE (livestock feed)
        o       C.E. SCHMIDT (apparel and footwear)
        o       GROUNDWORKS (lawn and garden supplies)
        o       ROYAL WING (bird feeding supplies)
        o       MILEPOST (Equine Products)
        o       RED SHED (gifts and collectibles)
        o       MASTERHAND (tools and tool chests)

                                       2




        Additionally, we control brands which we market. These control brands
        include BIT & BRIDLE (clothing), MORGAN CREEK ("lifestyle clothing") and
        FARM HAND (air compressors). We believe that the availability of top
        quality private label products at great prices provides superior value
        for our customers, a strategic advantage for us, and positions us as a
        "destination" store.

        The following chart indicates the average percentages of sales
        represented by each of our major product categories during fiscal 2006,
        2005 and 2004.

                                                      Percent Of Sales
                                                   ----------------------
                Product Category                   2006     2005     2004
                ----------------                   ----     ----     ----
      Equine, pet and animal .................      33%      31%      32%
      Seasonal products ......................      23       24       23
      Hardware and tools .....................      16       18       18
      Truck/trailer/tow/lube .................      12       12       12
      Clothing and footwear ..................       9        9        8
      Maintenance products for agriculture and
        rural use ............................       7        6        7
                                                   ---      ---      ---
                                                   100%     100%     100%
                                                   ===      ===      ===

        PURCHASING AND DISTRIBUTION
        We offer a differentiated assortment of products for those seeking to
        enjoy the "Out Here" lifestyle. Our business is not dependent upon any
        one vendor or particular group of vendors. We purchase our products from
        a core group of approximately 1,000 vendors, with no one vendor
        representing more than 10% of our purchases during fiscal 2006.
        Approximately 170 vendors accounted for approximately 80% of our
        purchases during fiscal 2006. We have not experienced any significant
        difficulty in obtaining satisfactory alternative sources of supply for
        our products and we believe that adequate sources of supply exist at
        substantially similar costs for substantially all of our products. We
        have no material long-term contractual commitments with any of our
        vendors.

        We maintain a dedicated supply chain management team to focus
        exclusively on all replenishment and forecasting functions. This
        centralized direction permits our buying teams to focus more strategic
        attention toward vendor line reviews, assortment planning and testing of
        new products and programs. Through the combined efforts of these teams,
        we expect to improve overall inventory productivity and in-stock
        position.

        Over 97% of our purchase orders are transmitted through an electronic
        data interchange ("EDI") system, and approximately 88% of merchandise
        vendor invoices are transmitted through EDI. We are expanding the
        percentage of vendors who electronically transmit invoices and
        increasing the amount of sales history transmitted.

        We own and operate a 775,000 square foot distribution center in
        Pendleton, Indiana, a 362,000 square foot distribution center in Waco,
        Texas, a 482,000 square foot distribution center in Hagerstown,
        Maryland, and a 425,000 square foot facility in Waverly, Nebraska, and
        lease a 410,000 square foot distribution center in Braselton, Georgia
        and a 71,000 square foot Del's facility in Lakewood, Washington. We
        believe our overall distribution capacity will support our growth up to
        an estimated 950 stores. In fiscal 2006, we received approximately 82%
        of our merchandise through these distribution facilities, with the
        balance delivered directly to our stores by our vendors.

        We manage our inbound and outbound transportation activity in-house
        through the use of a web-based transportation management system. We
        outsource the management of our dedicated fleets to two third-party
        logistics providers and utilize several common carriers as required. The
        third-party logistics providers are responsible for providing drivers
        and tractors dedicated to transporting merchandise for us. We endeavor
        to control our transportation costs through the monitoring of
        transportation routes, scheduling of deliveries, backhauls and optimal
        utilization of the dedicated fleet of trucks and trailers.

                                       3




        MARKETING
        We utilize an "everyday low prices" strategy to consistently offer our
        products at competitive prices complimented by promotions to enhance
        peak selling seasons. We regularly monitor prices at competing stores
        and adjust our prices as we deem appropriate. We believe that by
        avoiding a "sale"-oriented marketing strategy, we are attracting
        customers on a regular basis rather than only in response to promotional
        sales.

        To generate store traffic and position ourselves as a destination store,
        we promote broad selections of merchandise, primarily advertised at our
        regular everyday low price, with printed color circulars. We also run
        periodic special events promoted through circulars and direct mail
        advertising. We enhance our print marketing programs through the
        expanded use of national cable and local network television. Due to the
        geographic dispersion of our stores, the use of national cable
        advertising is generally more cost-effective and additionally serves to
        promote our stores prior to entering a new market.

        Due to the relatively small size of our stores, increased traffic in the
        store ensures increased exposure to most of our products. Our vendors
        are committed to helping us promote our brand and position ourselves as
        a destination store. Our vendors provide assistance with product
        presentation and rack design, brochures, point-of-purchase materials for
        customers' education and product education for our employees. We also
        receive funding through contributions and incentives on purchases to
        promote new and relocated stores and earn rebates from many vendors on
        product purchases based on volume.

        COMPETITION
        We operate in a very competitive market. The principal competitive
        factors include location of stores, price and quality of merchandise,
        in-stock consistency, merchandise assortment and presentation and
        customer service. We compete with general merchandise, home center
        retailers and other specialty and discount retailers, as well as
        independently owned retail farm and ranch stores, numerous
        privately-held regional farm store chains and farm cooperatives. Some of
        these competitors are units of national or regional chains and have
        substantially greater resources and financial capacities than we do.
        However, we believe we have successfully differentiated ourselves from
        these entities by focusing on our specialized market niche.

        MANAGEMENT AND EMPLOYEES
        As of December 30, 2006, we employed approximately 5,500 full-time and
        approximately 4,300 part-time employees. We also employ additional
        part-time employees during peak periods. We are not party to any
        collective bargaining agreements.

        Our district managers, store managers and other distribution and support
        personnel have contributed significantly to our performance. We have an
        internal advisory board comprised of store managers. This group brings a
        grassroots perspective to operational initiatives and generates
        chain-wide endorsement of proposed "best-practice" solutions. We have
        implemented numerous best practice teams (comprised of employees from
        all areas of our operations) to evaluate our key operations and
        recommend process changes that will both improve efficiency and
        strengthen controls. Our management encourages the participation of all
        employees in decision-making, regularly solicits input and suggestions
        from our employees and responds to the suggestions.

        All of our employees participate in one of various incentive programs,
        which provide the opportunity to receive additional compensation based
        upon team and/or Company performance. We also provide our employees the
        opportunity to participate in an employee stock purchase plan and a
        401(k) retirement plan (we contribute to the 401(k) plan solely through
        a cash match). Additionally, we share in the cost of health insurance
        provided to our employees, and employees receive a discount on
        merchandise purchased at our stores.

                                       4




        We encourage a "promote from within" environment when internal resources
        permit. We also provide internal leadership development programs
        designed to mentor our high potential employees for continued progress
        and believe we have satisfactory relationships with our employees. All
        of our executive officers have over 25 years of business experience. Our
        district managers and store managers have an average length of service
        of approximately five years. Management believes internal promotions,
        coupled with the hiring of individuals with previous retail experience,
        will provide the management structure necessary to support our planned
        store growth.

        MANAGEMENT INFORMATION AND CONTROL SYSTEMS
        We have invested considerable resources in our management information
        and control systems to ensure superior customer service, manage the
        purchase and distribution of our merchandise and improve our operating
        efficiencies. Our management information and control systems include a
        point-of-sale system, a supply chain management and replenishment
        system, a radio frequency picking system in the distribution centers, a
        vendor purchase order control system and a merchandise presentation
        system. These systems are integrated and track merchandise from initial
        order through ultimate sale. All data from these systems are integrated
        with our financial systems.

        We continue to evaluate and improve the functionality of our systems to
        maximize their effectiveness. Such efforts include an ongoing evaluation
        of the optimal software configuration (including system enhancements and
        upgrades) as well as the adequacy of the underlying hardware components.
        These efforts are directed toward constantly improving the overall
        business processes and achieving the most efficient and effective use of
        the systems to manage our operations.

GROWTH STRATEGY

Our current and long-term growth strategy is to (1) expand geographic market
presence through opening new retail stores, (2) enhance financial performance
through same-store sales increases, achieved through aggressive merchandising
programs with an "everyday low prices" philosophy and supported by strong
customer service, (3) enhance product margin through assortment management,
vendor management, sourcing and optimization of transportation and distribution
costs, (4) leverage operating costs, especially occupancy, advertising and
distribution, and (5) expand through selective acquisition, as such
opportunities arise, to enhance penetration into new and existing markets as a
complimentary strategy to organic growth.

We have experienced considerable sales growth over the last five years, with a
compounded annual growth rate of approximately 22.8%. We plan to continue our
growth strategy, which anticipates an annual increase in our unit count of
approximately 13%. This growth has expanded our market presence to 676 retail
farm and ranch stores in 37 states and one Canadian province. We believe this
unit count increase, along with strategic relocations of small, older stores to
full-size formats in areas of greater retail opportunity, will contribute
substantially to our future growth. Through store relocations, we are able to
keep much of our existing loyal customer base but expand our overall reach to
new customers, thereby growing the business. We have relocated 87 stores since
2001. The acquisition of Del's enabled us to establish an initial presence in
the Pacific Northwest, primarily in Washington, Hawaii and one store in British
Columbia. We believe we have developed a proven method for selecting store sites
and have identified over 750 potential additional markets for new Tractor Supply
stores (excluding Del's) in the United States. In addition, we continue to
identify opportunities to relocate existing stores.

We expect to open approximately 85 to 90 stores in fiscal 2007, along with
approximately 12 store relocations.

The average estimated cash required to open a new leased store in fiscal 2006
was approximately $800,000 to $1,400,000, the majority of which was for initial
acquisition of inventory and capital expenditures (principally leasehold
improvements, fixtures and equipment), and approximately $85,000 of which was
for pre-opening costs. The cash required to complete a store relocation averaged
approximately $500,000 in fiscal 2006. However, relocation costs can vary
depending on whether we are responsible for any renovation or remodeling costs.

ADDITIONAL INFORMATION

We file reports with the Securities and Exchange Commission ("SEC"), including
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and other reports as required. The public may read and

                                       5




copy any materials the Company files with the SEC at the SEC's Public Reference
Room at 100 F Street, N.E., NW, Washington, DC 20549. The public may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. We are an electronic filer and the SEC maintains an Internet
site at WWW.SEC.GOV that contains the reports, proxy and information statements,
and other information filed electronically.

We make available free of charge through our Internet website,
WWW.MYTSCSTORE.COM, our annual report on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and all amendments to those reports as soon
as reasonably practicable after such material is electronically filed with or
furnished to the SEC. The information provided on our website is not part of
this report, and is therefore not incorporated by reference unless such
information is otherwise specifically referenced elsewhere in this report.

Our code of ethics, which is applicable to all of our employees, including our
Chief Executive Officer, Chief Financial Officer and Controller, along with our
Corporate Governance Guidelines and the charters of our Audit, Compensation,
Corporate Governance and Nominating Committees of our Board of Directors is
posted on our website.

ITEM 1A. RISK FACTORS
--------

Our business faces many risks. These risks include those described below and may
include additional risks and uncertainties not presently known to us or that we
currently deem immaterial. If any of the events or circumstances described in
the following risk factors occur, our business, financial condition or results
of operations may suffer, and the trading price of our common stock could
decline. These risk factors should be read in conjunction with the other
information in this Form 10-K.

GENERAL ECONOMIC CONDITIONS MAY ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.
Higher interest rates, fuel and other energy costs, higher labor and healthcare
costs, and other economic factors could adversely affect consumer demand for the
merchandise we offer. Additionally, changes in the mix of products sold to a mix
with a lower overall gross margin or other increased cost of sales, along with
slower inventory turnover and greater markdowns on inventory, could adversely
affect our financial performance. High levels of unemployment, inflation,
changes in tax and other laws and other adverse developments in the economy may
also adversely affect consumer demand for our merchandise, adversely affect
gross margins, cost of sales, inventory turnover and markdowns or otherwise
adversely affect our operations and operating results.

INFLATIONARY PRESSURES, INCLUDING RISING ENERGY PRICES, MAY ADVERSELY AFFECT OUR
FINANCIAL PERFORMANCE.
Although we cannot determine the full effect of inflation on our operations, we
believe our sales and results of operations have been affected by inflation. We
are subject to market risk with respect to the pricing of certain products and
services, which include, among other items, steel, grain, petroleum, corn,
soybean and other commodities as well as transportation services. Moreover, in
the last few years, energy prices have risen dramatically, which has resulted in
increased fuel costs for our business and utility costs for our stores. We have
been successful in reducing or mitigating the effects of inflation, principally
through selective buying from the most competitive vendors and by increasing
retail prices. However, there is no assurance that we will be successful in
reducing or mitigating the effect of inflation in the future.

THERE IS NO ASSURANCE THAT WE WILL BE ABLE TO CONTINUE TO INCREASE SALES AT OUR
EXISTING STORES.
We experience fluctuations in our same-store sales, which are defined as stores
which have completed twelve months of sales, excluding relocated stores. Our
success depends, in part, upon our ability to improve sales at our existing
stores. Various factors affect same-store sales, including the general retail
sales environment, our ability to efficiently source and distribute products,
changes in our merchandise mix, competition, current economic conditions, the
timing of release of new merchandise and promotional events, the success of
marketing programs and weather conditions. These factors may cause our
same-store sales results to differ materially from prior periods and from
expectations. Past same-store sales are not necessarily an indication of future
results, and there can be no assurance that our same-store sales will not
decrease in the future. Any failure to meet the same-store sales expectations of
investors and security analysts in one or more future periods could adversely
affect our results of operations and result in a reduction in the market price
of our common stock.

OUR FAILURE TO EFFECTIVELY MANAGE GROWTH COULD IMPAIR OUR BUSINESS.
Even if we are able to implement, to a significant degree, our key business
strategy of expanding our store base, we may experience managerial or
operational problems, which may prevent any significant increase in
profitability or

                                       6




negatively impact our cash flow. To manage our planned expansion, we must ensure
the continuing adequacy of our existing systems, controls and procedures,
including product distribution facilities, store management, financial controls
and information systems. There can be no assurance that we will be able to
achieve our planned expansion, that the new stores will be effectively
integrated into our existing operations or that such stores will be profitable.

FAILURE TO OPEN NEW STORES IN THE MANNER CURRENTLY CONTEMPLATED COULD ADVERSELY
AFFECT OUR FINANCIAL PERFORMANCE.
An integral part of our key business strategy includes the expansion of our base
of stores by opening new stores. If we are unable to implement this strategy,
our ability to increase our sales, profitability, and cash flow could be
impaired significantly. To the extent that we are unable to open new stores in
the manner we anticipate (due to unforeseen delays in construction or site
approval), our sales growth would be impaired. Any failure to meet the growth
expectations of investors and security analysts in one or more future periods
could reduce the market price of our stock.

COMPETITION IN OUR INDUSTRY MAY HINDER OUR ABILITY TO EXECUTE OUR BUSINESS
STRATEGY AND ADVERSELY AFFECT OUR OPERATIONS.
We operate in a very competitive market. The principal competitive factors
include location of stores, price and quality of merchandise, in-stock
consistency, merchandise assortment and presentation, and customer service. We
believe we have successfully differentiated ourselves from general merchandise,
home center retailers and other specialty and discount retailers by focusing on
our specialized market niche. However, we do face competition from these
entities, as well as competition from independently-owned retail farm and ranch
stores, several privately-held regional farm store chains and farm cooperatives.
Some of our competitors are units of national or regional chains that have
substantially greater financial and other resources.

WEATHER CONDITIONS MAY HAVE A SIGNIFICANT IMPACT ON OUR FINANCIAL RESULTS.
Historically, weather conditions have had a significant impact on our operating
results. Weather conditions affect the demand for, and in some cases the supply
of, products, which in turn has an impact on prices. In recent years, we have
experienced unusually severe weather conditions, including ice storms, floods
and wind damage, hurricanes and a summer dearth of water and pasture in some
states. Weather conditions also directly affect the demand for petroleum
products, particularly during the winter heating season. Accordingly, the
weather can have a material effect on our financial condition and results of
operations.

THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SEASONAL NATURE OF OUR BUSINESS.
Our working capital needs and borrowings generally peak in our first fiscal
quarter because lower sales are generated while expenses are incurred in
preparation for the spring selling season. If cash on hand and borrowings under
existing credit facilities are ever insufficient to meet the seasonal needs or
if cash flow generated during the spring and summer is insufficient to repay
associated borrowings on a timely basis, this seasonality could have a material
adverse effect on our business.

WE FACE RISKS ASSOCIATED WITH VENDORS FROM WHOM OUR PRODUCTS ARE SOURCED.
The products we sell are sourced from a variety of domestic and international
vendors. Foreign sourcing of many of the products sold is an important factor in
our financial performance. All of our vendors must comply with applicable laws,
including labor and environmental laws, and otherwise be certified as meeting
required vendor standards of conduct. Our ability to find qualified vendors that
meet our standards, and access products in a timely and efficient manner are
significant challenges, especially with respect to goods sourced outside the
United States. These and other issues affecting our vendors, including
merchandise quality and financial instability of suppliers, could adversely
affect our financial performance.

WE FACE RISKS RELATING TO OUR RELIANCE ON FOREIGN SUPPLIERS.
We rely on foreign manufacturers for various products that we sell. In addition,
many of our domestic suppliers purchase a portion of their products from foreign
sources. We rely on long-term relationships with our suppliers but have no
long-term contracts with such suppliers. Our future success will depend in large
measure upon our ability to maintain our existing supplier relationships or to
develop new ones. This reliance increases the risk of inadequate and untimely
supplies of various products due to local political, economic, social, or
environmental conditions, transportation delays, restrictive actions by foreign
governments, or changes in United States laws and regulations affecting imports
or domestic distribution. As an importer, our business is subject to the risks
generally associated with doing business abroad, such as foreign governmental
regulations, economic disruptions, delays in shipments, transportation capacity
and costs, currency exchange rates and changes in political or economic
conditions in countries from which we purchase products. If any such factors
were to render the conduct of business in particular countries

                                       7




undesirable or impractical or if additional United States quotas, duties, taxes
or other charges or restrictions were imposed upon the importation of our
products in the future, our financial condition and results of operations could
be materially adversely affected.

OUR FAILURE TO ATTRACT AND RETAIN QUALIFIED EMPLOYEES COULD ADVERSELY AFFECT OUR
FINANCIAL PERFORMANCE. Our ability to continue expanding operations depends on
our ability to attract and retain a large and growing number of qualified
employees. Our ability to meet labor needs generally while controlling wage and
related labor costs is subject to numerous external factors, including the
availability of a sufficient number of qualified persons in the work force,
unemployment levels, prevailing wage rates, changing demographics, health and
other insurance costs and changes in employment legislation. If we are unable to
locate, attract or retain qualified personnel, or if costs of labor or related
costs increase significantly, our financial performance could be adversely
affected.

WE MAY BE SUBJECT TO PRODUCT LIABILITY AND OTHER CLAIMS IN THE ORDINARY COURSE
OF BUSINESS. Our business involves a risk of product liability and other claims
in the ordinary course of business. We maintain general liability insurance with
a $250,000 deductible for each occurrence and a $6,000,000 aggregate retention.
We also maintain umbrella limits above the primary general and products
liability cover. In many cases, we have indemnification rights against the
manufacturers of the products and their products liability insurance. Our
ability to recover under such insurance or indemnification arrangements is
subject to the financial viability of the insurers and manufacturers and the
specific allegations of a claim. We cannot assure that our insurance coverage or
the manufacturers' indemnity will be available or sufficient in any claims
brought against us.

IF WE EXPERIENCE DIFFICULTIES WITH OUR MANAGEMENT INFORMATION SYSTEMS, OUR
FINANCIAL PERFORMANCE MAY BE ADVERSELY AFFECTED. We depend on management
information systems for many aspects of our business. We could be materially
adversely affected if our management information systems are disrupted or if we
are unable to improve, upgrade, maintain and expand systems, particularly in
light of the contemplated continued significant increases in the number of our
stores.

THERE IS NO ASSURANCE THAT OUR PRODUCT INNOVATIONS AND MARKETING SUCCESSES WILL
CONTINUE. We believe our past performance has been based on, and future success
will depend upon, in part, the ability to continue to improve existing product
offerings through product innovation and to market new products. There is no
assurance that we will be successful in the introduction and marketing of any
new products or product innovations, or that innovations to existing product
offerings will be introduced in a timely manner to satisfy our customers' needs
or expectations. Failure to introduce new products successfully and in a timely
manner could harm our ability to grow the business and could have a material
adverse effect on results of our operations and financial condition.
Additionally, our success depends on our ability to anticipate and respond in a
timely manner to changing customer demand and preferences for products and
supplies used in recreational farming and ranching. If we misjudge the market,
we may significantly overstock unpopular products and be forced to take
significant inventory markdowns. Shortages of key items could also have a
materially adverse impact on operating results.

ITEM 1B. UNRESOLVED STAFF COMMENTS
-------

None.

ITEM 2.  PROPERTIES
-------  ----------

At December 30, 2006, we operated 676 stores in 37 states and one Canadian
province. We lease more than 93% of our stores, two of our six distribution
centers and our management headquarters. Store leases typically have initial
terms of between 10 and 15 years, with two to four renewal periods of five years
each, exercisable at our option. No single lease is material to our operations.

                                       8




Following is a count of our store locations:

                     NUMBER                                          NUMBER
   STATE            OF STORES                     STATE             OF STORES
--------------     ------------          ----------------------    -----------
Texas                   89               Iowa                           10
Ohio                    64               Nebraska                       10
Michigan                56               Alabama                         9
Tennessee               47               Kansas                          9
Pennsylvania            38               California                      8
New York                37               Missouri                        8
Indiana                 35               North Dakota                    7
Florida                 30               Maryland                        7
North Carolina          27               Minnesota                       7
Kentucky                24               South Dakota                    5
Georgia                 21               Connecticut                     4
Virginia                20               Mississippi                     4
Washington              14               Hawaii                          3
Oklahoma                14               Vermont                         3
West Virginia           13               Massachusetts                   2
Wisconsin               13               New Jersey                      2
South Carolina          12               Delaware                        1
Illinois                11               Montana                         1
Arkansas                10               British Columbia, Canada        1
                                                                   -----------
                                                                       676
                                                                   ===========


ITEM 3.  LEGAL PROCEEDINGS
-------  -----------------

We are involved in various litigation matters arising in the ordinary course of
business. After consultation with legal counsel, we expect these matters will be
resolved without material adverse effect on our consolidated financial position
or results of operations. Any estimated loss related to such matters has been
adequately provided in accrued liabilities to the extent probable and reasonably
estimable. It is possible, however, that future results of operations for any
particular quarterly or annual period could be materially affected by changes in
circumstances relating to these proceedings.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------  ---------------------------------------------------

No matter was submitted to a vote of our stockholders during the fourth quarter
of our fiscal year ended December 30, 2006.

                               EXECUTIVE OFFICERS

Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered item in Part I of this Report in lieu of being
included in the Proxy Statement for the Annual Meeting of Stockholders to be
held on May 3, 2007.

The following is a list of the names and ages of all executive officers of the
registrant, indicating all positions and offices with the registrant held by
each such person and each person's principal occupations and employment during
at least the past five years:

                                       9






            Name                       Position                                                  Age
            ----                       --------                                                  ---

                                                                                           
Joseph H. Scarlett, Jr.......    Chairman of the Board                                            64

James F. Wright..............    President, Chief Executive Officer and Director                  57

Anthony F. Crudele...........    Senior Vice President-Chief Financial Officer and Treasurer      50

Gerald W. Brase .............    Senior Vice President-Merchandising                              53

Stanley L. Ruta..............    Senior Vice President-Store Operations                           55

Blake A. Fohl................    Vice President-Marketing                                         49

Kimberly D. Vella............    Vice President-Human Resources                                   40


------------------

Joseph H. Scarlett, Jr. has served as Chairman of the Board since 1993 and was
Chief Executive Officer of the Company from 1993 through September 2004, having
previously served as President and Chief Operating Officer of the Company from
1987 to 1993. Mr. Scarlett has served as a director of the Company since 1982.

James F. Wright has served as President and Chief Executive Officer of the
Company since October 2004. Mr. Wright previously served as President and Chief
Operating Officer of the Company from October 2000 to October 2004. Mr. Wright
has served as a director of the Company since 2002.

Anthony F. Crudele has served as Senior Vice President-Chief Financial Officer
and Treasurer since November 2005. Mr. Crudele previously served as Chief
Financial Officer at Gibson Guitar from August 2003 to September 2005, as Chief
Financial Officer of Xcelerate Corp. from 2000 to January 2003, and at The
Sports Authority from 1989 through 1999 (serving as Chief Financial Officer from
1996 through 1999).

Gerald W. Brase has served as Senior Vice President-Merchandising of the Company
since September 1997.

Stanley L. Ruta has served as Senior Vice President-Store Operations since June
2000, after having served as Vice President-Store Operations of the Company
since 1994.

Blake A. Fohl has served as Vice President-Marketing of the Company since
January 1996.

Kimberly D. Vella has served as Vice President-Human Resources of the Company
since October 2001.


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND
         ISSUER PURCHASES OF EQUITY SECURITIES
-------  -----------------------------------------------------------------------

Tractor Supply Company's Common Stock trades on The Nasdaq Global Select Market
under the symbol "TSCO".

The table below sets forth the high and low sales prices of our Common Stock as
reported by The Nasdaq Global Select Market since August 1, 2006 and by the
Nasdaq National Market for the periods prior to August 1, 2006 for each fiscal
quarter of the periods indicated:

                                             PRICE RANGE
                        ------------------------------------------------------
                                 2006                          2005
                        ------------------------      ------------------------
                           HIGH          LOW             HIGH          LOW
                        ---------     ----------      ---------     ----------
First Quarter             $67.59        $48.50          $45.45       $33.20
Second Quarter            $66.42        $46.15          $50.20       $39.25
Third Quarter             $55.09        $38.75          $58.64       $46.52
Fourth Quarter            $54.12        $43.76          $56.84       $40.75

                                       10




As of January 31, 2007, the approximate number of record holders of our Common
Stock was 200 (excluding individual participants in nominee security position
listings), and the estimated number of beneficial holders of our Common Stock
was 20,000.

We have not declared any cash dividends nor repurchased any outstanding shares
of our Common Stock during the two most recent fiscal years. We do not
anticipate that any dividends will be declared on the Common Stock in the
foreseeable future. Our Board of Directors authorized a share repurchase
strategy, subject to a number of factors, including price, corporate and
regulatory requirements, capital availability and other market conditions. Any
future declaration of dividends will be subject to the discretion of our Board
of Directors and subject to our results of operations, financial condition, cash
requirements and other factors deemed relevant by our Board of Directors.


                             STOCK PERFORMANCE GRAPH

This performance graph shall not be deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") or
otherwise subject to the liabilities under that Section and shall not be deemed
to be incorporated by reference into any filing of Tractor Supply Company under
the Securities Act of 1933, as amended or the Exchange Act.


The following graph compares the cumulative total stockholder return on our
Common Stock from December 29, 2001 to December 30, 2006 (the Company's fiscal
year-end) with the cumulative total returns of the S&P 500 Index and the S&P
Retail Index over the same period. The comparison assumes that $100 was invested
on December 29, 2001 in our Common Stock and in each of the foregoing indices.
The historical stock price performance shown on this graph is not necessarily
indicative of future performance.


                  [STOCK PRICE PERFORMANCE GRAPH APPEARS HERE]




                           12/29/01     12/28/02     12/27/03     12/25/04      12/31/05     12/30/06
                          ---------    ---------    ---------    ---------     ---------    ---------
                                                                          
Tractor Supply Company    $  100.00    $  228.35    $  472.98    $  436.31     $  642.87    $  542.93
S&P 500                   $  100.00    $   75.40    $   94.39    $  104.23     $  107.52    $  122.16
S&P Retail Index          $  100.00    $   27.88    $   39.84    $   48.52     $   48.73    $   53.29


                                       11





ITEM 6.  SELECTED FINANCIAL DATA
-------  -----------------------

              FIVE YEAR SELECTED FINANCIAL AND OPERATING HIGHLIGHTS

The following selected financial data are derived from the consolidated
financial statements of Tractor Supply Company. Our fiscal year includes 52 or
53 weeks and ends on the last Saturday of the calendar year. References to
fiscal year mean the year in which that fiscal year ended. Fiscal year 2005
consists of 53 weeks while all other fiscal years presented below consist of 52
weeks. The following table provides summary historical financial information for
the periods ended and as of the dates indicated (in thousands, except per share
and selected operating data):



                                                      2006            2005            2004            2003             2002
                                                  -----------     -----------     -----------     -----------     -----------
                                                                                                   
OPERATING RESULTS:
Net sales .....................................   $ 2,369,612     $ 2,067,979     $ 1,738,843     $ 1,472,885     $ 1,209,990
Gross margin ..................................       751,363         639,551         524,687         448,900         342,187
Selling, general and administrative expenses ..       561,051         469,087         395,955         331,630         259,733
Depreciation and amortization .................        42,292          34,020          27,186          21,597          17,970
                                                  -----------     -----------     -----------     -----------     -----------

Income from operations ........................       148,020         136,444         101,546          95,673          64,484
Interest expense, net .........................         2,688           1,632           1,440           3,444           4,707
                                                  -----------     -----------     -----------     -----------     -----------

Income before income taxes and cumulative
   effect of accounting change ................       145,332         134,812         100,106          92,229          59,777
Income tax provision ..........................        54,324          49,143          36,037          34,647          21,612
                                                  -----------     -----------     -----------     -----------     -----------

Net income before cumulative effect of
   accounting change ..........................        91,008          85,669          64,069          57,582          38,165
Cumulative effect of accounting change, net of
   income taxes (a) ...........................            --              --              --          (1,888)             --
                                                  -----------     -----------     -----------     -----------     -----------
Net income ....................................   $    91,008     $    85,669     $    64,069     $    55,694     $    38,165
                                                  ===========     ===========     ===========     ===========     ===========

Net income per share - basic, before
   cumulative effect of change in accounting
   principle (b) ..............................   $      2.27     $      2.19     $      1.68     $      1.55     $      1.06
Cumulative effect of accounting change, net of
   income taxes ...............................            --              --              --           (0.05)             --
                                                  -----------     -----------     -----------     -----------     -----------
Net income per share - basic, after cumulative
   effect of change in accounting principle ...   $      2.27     $      2.19     $      1.68     $      1.50     $      1.06
                                                  ===========     ===========     ===========     ===========     ===========

Net income per share - assuming dilution
   before cumulative effect of change in
   accounting principle (b) ...................   $      2.22     $      2.09     $      1.57     $      1.43     $      0.97
Cumulative effect of accounting change, net of
   income taxes ...............................            --              --              --           (0.05)             --
                                                  -----------     -----------     -----------     -----------     -----------
Net income per share - assuming dilution,
   after cumulative effect of change in
   accounting principle .......................   $      2.22     $      2.09     $      1.57     $      1.38     $      0.97
                                                  ===========     ===========     ===========     ===========     ===========

Adjusted weighted average shares for dilutive
earnings per share ............................        41,060          40,980          40,689          40,271          39,277
                                                  ===========     ===========     ===========     ===========     ===========

Dividends per share ...........................            --              --              --              --              --
                                                  ===========     ===========     ===========     ===========     ===========

OPERATING DATA (PERCENT OF NET SALES):
Gross margin ..................................          31.7%           30.9%           30.2%           30.5%           28.3%
Selling, general and administrative expenses ..          23.7%           22.7%           22.8%           22.5%           21.5%
Income from operations ........................           6.2%            6.6%            5.8%            6.5%            5.3%
Net income before cumulative effect of change
   in accounting principle ....................           3.8%            4.1%            3.7%            3.9%            3.1%

PRO-FORMA AMOUNTS, ASSUMING THE CHANGE IN
   ACCOUNTING PRINCIPLE IS APPLIED
   RETROACTIVELY (C):
Gross margin ..................................   $   751,363     $   639,551     $   524,687     $   448,900     $   373,895
Selling, general and administrative expenses ..       561,051         469,087         395,955         331,630         293,132


                                       12





                                                      2006            2005            2004            2003             2002
                                                  -----------     -----------     -----------     -----------     -----------
                                                                                                        
Income from operations ........................       148,020         136,444         101,546          95,673          62,793
Net income ....................................        91,008          85,669          64,069          57,582          37,085

Net income per share - basic ..................   $      2.27     $      2.19     $      1.68     $      1.55     $      1.03

Net income per share - assuming dilution ......   $      2.22     $      2.09     $      1.57     $      1.43     $      0.94

PRO-FORMA OPERATING DATA ASSUMING THE
   CHANGE IN ACCOUNTING PRINCIPLE IS APPLIED
   RETROACTIVELY (PERCENT TO SALES (C)):
Gross margin ..................................          31.7%           30.9%           30.2%           30.5%           30.9%
Selling, general and administrative expenses ..          23.7%           22.7%           22.8%           22.5%           24.2%
Income from operations ........................           6.2%            6.6%            5.8%            6.5%            5.2%
Net income ....................................           3.8%            4.1%            3.7%            3.9%            3.1%

NUMBER OF STORES:
Beginning of year .............................           595             515             463             433             323
New stores opened .............................            82              65              53              31             113
New stores acquired ...........................            --              16              --              --              --
Closed stores .................................            (1)             (1)             (1)             (1)             (3)
                                                  -----------     -----------     -----------     -----------     -----------
End of year ...................................           676             595             515             463             433
                                                  ===========     ===========     ===========     ===========     ===========

Number of stores relocated during year ........            15              18              20              18              16
Number of stores remodeled (d) ................             3              --               5               3               8
Capital expenditures (e) ......................   $    90,565     $    78,835     $    92,989     $    49,982     $    67,094
Same-store sales increase (f) .................           1.6%            5.7%            9.9%            7.0%            9.6%
Average sales per store (000's) (g) ...........   $     3,699     $     3,772     $     3,568     $     3,255     $     3,045
Average transaction value .....................   $     43.12     $     42.03     $     39.83     $     38.05     $     37.95
Average number of daily transactions per store            238             245             248             237             222
Total employees ...............................         9,800           8,700           7,200           6,400           6,000

BALANCE SHEET DATA (AT END OF PERIOD):
Working capital ...............................   $   316,104     $   240,732     $   219,326     $   181,225     $   143,655
Total assets ..................................     1,007,992         814,795         678,485         538,270         462,857
Long-term debt, less current portion (h) ......         2,808          10,739          34,744          21,210          35,705
Stockholders' equity ..........................       598,904         477,698         370,584         290,991         224,262


-----------------------
In fiscal 2006, we adopted SFAS 123(R) which lowered pre-tax income by $9.7
million and net income by $6.1 million.
(a)     The Company adopted Emerging Issues Task Force No. 02-16 ("EITF 02-16")
        which changed its method of accounting for consideration received from
        vendors whereby such consideration is considered a reduction of
        inventory cost as opposed to a reduction of selling, general and
        administrative costs. As a result, the Company recorded a non-cash
        charge of $1.9 million, net of income tax, in the first quarter of
        fiscal 2003 for the cumulative effect of the change on fiscal years
        prior to fiscal 2003.
(b)     Basic net income per share is calculated based on the weighted average
        number of common shares outstanding applied to net income. Diluted net
        income per share is calculated using the treasury stock method for
        options and warrants. All share and per share data have been adjusted
        for stock splits.
(c)     The pro-forma results provide a summary of gross margin, selling,
        general and administrative expenses and net income as if the adoption of
        EITF 02-16 had occurred prior to fiscal 2002.
(d)     Reflects remodelings costing more than $150,000.
(e)     Includes assets acquired through capital leases.
(f)     Same-store sales increases are calculated on an annual basis, excluding
        relocations, using all stores open at least one year.
(g)     Average sales per store calculated based on the weighted average number
        of days open in the applicable period.
(h)     Long-term debt includes borrowings under the Company's revolving credit
        agreement and term loan agreement and amounts outstanding under its
        capital lease obligations, excluding the current portions of each.

                                       13





ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
------   -----------------------------------------------------------------------

OVERVIEW

Tractor Supply Company is the largest operator of retail farm and ranch stores
in the United States and is focused on supplying the lifestyle needs of
recreational farmers and ranchers and of those who enjoy the rural lifestyle, as
well as tradesmen and small businesses. Our stores are located in towns outlying
major metropolitan markets and in rural communities and offer the following
comprehensive selection of merchandise:

        o       Equine, pet and animal products, including items necessary for
                their health, care, growth and containment
        o       Maintenance products for agricultural and rural use
        o       Hardware and tool products
        o       Seasonal products, including lawn and garden power equipment
        o       Truck, trailer and towing products, and
        o       Work/recreational clothing and footwear for the entire family.

Our stores currently range in size from approximately 7,000 to 28,000 square
feet of inside selling space and also utilize outside selling space. We are
developing stores using one of five standard prototypes as well as existing
building structures. Our stores typically range in size from 15,500 square feet
to 18,500 square feet of inside selling space and additional outside selling
space. Our wholly-owned subsidiary, Del's Farm Supply, LLC ("Del's"), operates
18 stores, primarily in the Pacific Northwest, that offer a wide selection of
products (primarily in the equine, pet and animal category) tailored to those
who enjoy the rural lifestyle. Del's stores currently range in size from
approximately 1,500 to 7,000 square feet of inside selling space with additional
outside selling space.

Our current and long-term growth strategy is to (1) expand geographic market
presence through opening new retail stores, (2) enhance financial performance
through same-store sales increases, achieved through aggressive merchandising
and marketing programs with an "everyday low prices" philosophy and supported by
strong customer service, (3) enhance product margin through selective
assortment, vendor price negotiation, sourcing and optimization of
transportation costs, (4) leverage operating costs, especially occupancy,
advertising and distribution, and (5) expand through selective acquisition, as
such opportunities arise, to enhance penetration into new and existing markets
as a complimentary strategy to organic growth.

We have experienced considerable sales growth over the last five years, with a
compounded annual growth rate of approximately 22.8%. We plan to continue this
growth strategy with an annual projected increase in our unit count of
approximately 13%. This growth has expanded our market presence into 37 states
and one Canadian province. We believe the projected unit count increase, along
with strategic relocations of stores into areas of greater retail opportunity,
will contribute substantially to our future growth. The acquisition of Del's
enabled us to establish an initial presence in the Pacific Northwest, primarily
in Washington, with one store in British Columbia, Canada.

We operated 676 retail farm and ranch stores as of December 30, 2006 and have
plans to open 85 to 90 stores in fiscal 2007, and approximately 12 store
relocations. We have developed a proven method for selecting store sites and
have identified over 750 potential additional markets for new Tractor Supply
stores (excluding Del's) in the United States. In addition, we continue to
identify opportunities to relocate existing stores. We plan to relocate
additional stores over the next several years. Our store relocations are
typically undertaken to move small, older stores to full-size formats in
improved retail areas. We have relocated 87 stores since 2001.

We have placed significant emphasis on our merchandising programs, evaluating
the sales and profitability of our products through detailed line reviews,
review of vendor performance measures and modification of the overall product
offerings. These efforts, coupled with a strong marketing program and in-depth
product knowledge training of our store employees, have enhanced our sales and
financial performance.

SEASONALITY AND WEATHER

Our business is highly seasonal. Historically, our sales and profits have been
the highest in the second and fourth fiscal quarters of each year due to the
sale of seasonal products. Unseasonable weather, excessive rain, drought, and
early or late frosts may also affect our sales. We believe, however, that the
impact of adverse weather conditions is somewhat mitigated by the geographic
dispersion of our stores.

                                       14




We experience our highest inventory and accounts payable levels during our first
fiscal quarter each year for purchases of seasonal product in anticipation of
the spring selling season and again during our third fiscal quarter in
anticipation of the winter selling season.

INFLATION

Although we cannot determine the full effect of inflation on our operations, we
believe our sales and results of operations are affected by inflation. We are
subject to market risk with respect to the pricing of certain products and
services, which include, among other items, steel, grain, petroleum, corn,
soybean and other commodities as well as transportation services. Moreover, in
the last few years, energy prices have risen dramatically, which has resulted in
increased fuel costs for our business and utility costs for our stores. We have
been successful in reducing or mitigating the effects of inflation, principally
through selective buying from the most competitive vendors and by increasing
retail prices. However, there is no assurance that we will be successful in
reducing or mitigating the effect of inflation in the future.

SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

Management's discussion and analysis of our financial position and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with United States generally accepted accounting
principles. The preparation of these financial statements requires 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. Our 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. Our
significant accounting policies are disclosed in Note 1 to our Consolidated
Financial Statements. The following discussion addresses our most critical
accounting policies, which are those that are both important to the portrayal of
our financial condition and results of operations and that require significant
judgment or use of complex estimates.

REVENUE RECOGNITION AND SALES RETURNS

We recognize revenue at the time the customer takes possession of merchandise or
receives services. If we receive payment before the customer has taken
possession of the merchandise (as per our layaway program), the revenue is
deferred until the sale is complete. Revenues from the sale of gift cards are
deferred and recognized upon redemption.

We estimate a liability for sales returns based on a one-year rolling average of
historical return trends and we believe that our estimate for sales returns is
an accurate reflection of future returns associated with past sales. Our
estimation techniques have been consistently applied from year to year, however,
as with any estimates, refunds activity may vary from estimated amounts.

INVENTORY VALUATION

        IMPAIRMENT RISK
        We identify potentially excess and slow-moving inventory by evaluating
        turn rates, sales trends, age of merchandise, overall inventory levels
        and other benchmarks. The estimated inventory valuation reserve to
        recognize any impairment in value (i.e., an inability to realize the
        full carrying value) is based on our aggregate assessment of these
        valuation indicators under prevailing market conditions and current
        merchandising strategies. We do not believe our merchandise inventories
        are subject to significant risk of obsolescence in the near term.
        However, changes in market conditions or consumer purchasing patterns
        could result in the need for additional reserves.

        SHRINKAGE
        Our stores perform physical inventories once a year and we have
        established reserves for estimating inventory shrinkage between physical
        inventory counts. This is done by assessing the chain-wide average
        shrinkage experience rate, applied to the related periods' sales
        volumes. Such assessments are updated on a regular basis for the most
        recent individual store experiences.

                                       15




        VENDOR SUPPORT
        We receive funding from our vendors for the promotion of our brand as
        well as the sale of their products. Vendor funding is initially deferred
        as a reduction of the purchase price of inventory and then recognized as
        a reduction of cost of merchandise as the related inventory is sold,
        which is in compliance with Emerging Issues Task Force No. 02-16,
        "Accounting by a Customer (Including a Reseller) for Certain
        Consideration Received from a Vendor" ("EITF 02-16").

        The amount of expected funding is estimated based upon initial
        guaranteed commitments, as well as anticipated purchase levels with
        applicable vendors. The estimated purchase volume and related vendor
        funding is based on our current knowledge of inventory levels, sales
        trends and expected customer demand, as well as planned new store
        openings and relocations. Although we believe we have the ability to
        reasonably estimate purchase volume and related vendor funding, it is
        possible that actual results could significantly differ from the
        estimated amounts.

        FREIGHT
        We incur various types of transportation and delivery costs in
        connection with inventory purchases. Such costs are included as a
        component of the overall cost of inventories (on an aggregate basis) and
        recognized as a component of cost of merchandise sold as the related
        inventory is sold.

SHARE-BASED PAYMENTS

We have share-based compensation plans covering certain members of management
and non-employee directors. Prior to January 1, 2006, we accounted for
stock-based compensation utilizing the intrinsic value method in accordance with
the provisions of Accounting Principles Board Opinion No. 25 (APB 25),
"Accounting for Stock Issued to Employees". Accordingly, no compensation expense
was recognized for fixed option plans because the exercise prices of employee
stock options equaled or exceeded the market prices of the underlying stock on
the dates of grant.

Effective January 1, 2006, we adopted the fair value recognition provisions of
SFAS No. 123(R), "Share-Based Payments" using the modified prospective
transition method. Among other items, SFAS 123(R) eliminates the use of APB 25
and the intrinsic value method of accounting, and requires companies to
recognize the cost of employee services received in exchange for awards of
equity instruments, based on the grant date fair value of those awards, in the
financial statements. As we adopted SFAS 123(R) under the
modified-prospective-transition method, results from prior periods have not been
restated. However, prior to adoption of SFAS 123(R), share-based compensation
had been included in pro forma disclosures in the Notes to the Consolidated
Financial Statements for periods prior to fiscal 2006.

We estimate the fair value of stock option awards on the date of grant utilizing
a modified BLACK-SCHOLES option pricing model. The BLACK-SCHOLES option
valuation model was developed for use in estimating the fair value of short-term
traded options that have no vesting restrictions and are fully transferable.
However, key assumptions used in the BLACK-SCHOLES model are adjusted to
incorporate the unique characteristics of our stock option awards. Option
valuation models require the input of somewhat subjective assumptions including
expected stock price volatility and expected life. We rely on historical
volatility trends to estimate future volatility assumptions. Other assumptions
required for estimating fair value with the BLACK-SCHOLES model are the expected
risk-free interest rate and expected life of the option. The risk-free interest
rates used were actual U.S. Treasury zero-coupon rates for bonds matching the
expected term of the option on the date of grant. The expected life of the
option on the date of grant was estimated based on our historical experience for
similar options.

In addition to the key assumptions used in the BLACK-SCHOLES model, the
estimated forfeiture rate at the time of valuation (which is based on historical
experience for similar options) is a critical assumption, as it reduces expense
ratably over the vesting period. We adjust this estimate annually, based on the
extent to which actual forfeitures differ, or are expected to differ, from the
previous estimate.

We believe our estimates are reasonable in the context of actual (historical)
experience. The impact of adopting SFAS 123(R) on future results will depend on,
among other matters, levels of share-based payments granted in the future,
actual forfeiture rates and the timing of option exercises.

                                       16




SALES TAX RESERVE

A portion of our sales are to tax-exempt customers. We obtain exemption
information as a necessary part of each tax-exempt transaction. Many of the
states in which we conduct business will perform audits to verify our compliance
with applicable sales tax laws. The business activities of our customers and the
intended use of the unique products sold by us create a challenging and complex
environment of compliance. These circumstances also create some risk that we
could be challenged as to the propriety of our sales tax compliance. While we
believe we reasonably enforce sales tax compliance with our customers and
endeavor to fully comply with all applicable sales tax regulations, there can be
no assurance that we, upon final completion of such audits, would not have a
significant liability for disallowed exemptions.

We review our past audit experience and assessments with applicable states to
determine if we have potential exposure for non-compliance. Any estimated
liability is based on an initial assessment of compliance risk and our to-date
experience with each audit. As each audit progresses, we quantify the exposure
based on preliminary assessments made by the state auditors, adjusted for
additional documentation that may be provided to reduce the assessment. The
reserve for these tax audits can fluctuate depending on numerous factors,
including the complexity of agricultural-based exemptions, ambiguity in state
tax regulations, the number of ongoing audits and the length of time required to
settle with the state taxing authorities.

INSURANCE RESERVES

We self-insure a significant portion of our employee medical insurance, workers'
compensation and general liability insurance plans. We have stop-loss insurance
policies to protect from individual losses over specified dollar values
($200,000 for employee health insurance claims, $350,000 for workers'
compensation and $250,000 for general liability). The full extent of certain
claims, especially workers' compensation and general liability claims, may not
become fully determined for several years. Therefore, we estimate potential
obligations for liabilities that have been incurred but not yet reported based
upon historical data, experience, and use of outside actuarial consultants.
Although we believe the reserves established for these obligations are
reasonably estimated, any significant increase in the number of claims or costs
associated with claims made under these plans could have a material adverse
effect on our financial results.

QUARTERLY FINANCIAL DATA

Our unaudited quarterly operating results for each fiscal quarter of 2006 and
2005 are shown below (dollars in thousands, except per share amounts):



                                  FIRST           SECOND             THIRD           FOURTH
2006                             QUARTER          QUARTER           QUARTER          QUARTER           TOTAL
----                           -----------      -----------       -----------      -----------      ---------
                                                                                    
Net sales ...............      $  465,547       $  714,944       $  559,222       $  629,899       $2,369,612
Gross margin ............         142,284          227,385          176,340          205,354          751,363
Income from operations ..           1,741           68,931           29,103           48,245          148,020
Net income ..............             525           42,927           18,059           29,497           91,008

Net income per share: (1)
  Basic .................      $     0.01       $     1.07       $     0.45       $     0.73       $     2.27
  Diluted ...............      $     0.01       $     1.05       $     0.44       $     0.72       $     2.22

Same-store sales increase             3.7%             0.5%             2.4%             0.5%             1.6%

2005(2)
----
Net sales ...............      $  377,203       $  613,235       $  479,607       $  597,934       $2,067,979
Gross margin ............         112,071          189,756          146,905          190,819          639,551
Income from operations ..           1,750           56,308           28,939           49,447          136,444
Net income ..............             684           35,754           18,329           30,902           85,669

Net income per share:
  Basic .................      $     0.02       $     0.92       $     0.47       $     0.78       $     2.19
  Diluted ...............      $     0.02       $     0.87       $     0.45       $     0.75       $     2.09

Same-store sales increase             4.2%             5.9%             1.8%            10.0%             5.7%


-----------------------------------
(1)     Due to the nature of interim earnings per share calculations, the sum of
        quarterly earnings per share amounts may not equal the reported earnings
        per share for the year.
(2)     The fourth quarter of fiscal 2005 is comprised of 14 weeks while all
        other quarters presented for both years are comprised of 13 weeks.

                                       17





RESULTS OF OPERATIONS

Our fiscal year includes 52 or 53 weeks and ends on the last Saturday of the
calendar year. References to fiscal year mean the year in which that fiscal year
ended. The fiscal year ended December 31, 2005 contains 53 weeks while the
fiscal years ended December 30, 2006 and December 25, 2004 contain 52 weeks.

The following table sets forth, for the periods indicated, certain items in our
Consolidated Statements of Income expressed as a percentage of net sales.

                                                   2006        2005        2004
                                                  -----       ------      -----
Net sales.....................................    100.0%      100.0%      100.0%
Cost of merchandise sold......................     68.3        69.1        69.8
                                                  -----       ------      -----
Gross margin..................................     31.7        30.9        30.2
Selling, general and administrative expenses..     23.7        22.7        22.8
Depreciation and amortization.................      1.8         1.6         1.6
                                                  -----       -----       -----
Income from operations........................      6.2         6.6         5.8
Interest expense, net.........................      0.1         0.1         0.1
                                                  -----       -----       -----
Income before income taxes....................      6.1         6.5         5.7
Income tax provision..........................      2.3         2.4         2.0
                                                  -----       -----       -----
Net income                                          3.8%        4.1%        3.7%
                                                  =====       =====       =====


FISCAL 2006 COMPARED TO FISCAL 2005

Net sales increased 14.6% to $2,369.6 million in fiscal 2006 from $2,068.0
million in fiscal 2005. Fiscal 2005 included an additional week of sales which
impacted the current year sales increase by 1.5%. This increase resulted from
the opening of new stores as well as a same-store sales improvement of 1.6%. Our
average transaction value increased 2.6% to $43.12 and same-store transaction
value increased 0.8% for fiscal 2006. Average daily transaction count per store
decreased 2.9% to 238, while same-store transaction count increased 0.7%.

Same-store sales improvements of 1.6% compared to 5.7% in the prior year were
strongest in the clothing/footwear and equine/pet/animal categories, but were
partially offset by lower than expected performance in seasonal power equipment,
generators and cold weather-related products, including insulated outerwear,
snow removal and heating.

In fiscal 2006, we opened 82 new stores (compared to 65 new stores and the
acquisition of 16 Del's stores in fiscal 2005), relocated 15 stores (compared to
18 in fiscal 2005) and closed one store (compared to one closure in fiscal
2005).

As a percent of sales, gross margin increased 80 basis points to 31.7% for
fiscal 2006 from 30.9% for fiscal 2005. Gross margin was primarily impacted by a
more favorable product mix, increased importing and improved inventory
shrinkage.

During the year, we refined our method of estimating the freight cost component
of inventory based on changes in our business and operating environment which
included a change in mix of goods, an increased level of importing and rapidly
increasing fuel costs. This refinement provides a more appropriate matching of
freight cost incurred with inventory and cost of merchandise sold. This change
in estimate increased the inventory value and reduced the freight component of
cost of merchandise sold by approximately $2.9 million for fiscal 2006.

As a percent of sales, selling, general and administrative ("SG&A") expenses
increased 100 basis points to 23.7% in fiscal 2006 from 22.7% in fiscal 2005.
The increase is primarily attributable to increased occupancy costs and a charge
of $9.7 million (or 0.4% of sales) related to stock compensation expense.

During the year, we refined our method of estimating the amount of gift cards
sold that will ultimately go unredeemed. Our estimate was based on an analysis
of gift card sale and redemption patterns across an extended historical
timeline. We accordingly recognized a benefit of $2.4 million and $0.3 million
in fiscal 2006 and 2005, respectively. Of the $2.4 million recognized in fiscal
2006, $2.1 million (or 0.1% of sales) was due to a modification of the
redemption assumptions based on an analysis of historical redemption patterns.
This benefit has been included as a reduction in selling, general, and
administrative expenses and is reflected as a reduction of other accrued
expenses in the accompanying Consolidated Balance Sheets.

                                       18




Effective January 1, 2006, we adopted Statement of Financial Accounting
Standards No. 123(R) "Share-Based Payment" ("SFAS 123(R)") using the modified
prospective method and began recognizing compensation expense for share-based
payments based on the fair value of the awards. Share-based payments include
stock option grants and certain transactions under our other stock plans. SFAS
123(R) requires share-based compensation expense recognized since the beginning
of fiscal 2006 to be based on the following: a) grant date fair value estimated
in accordance with the original provisions of SFAS 123 for unvested options
granted prior to the adoption date; b) grant date fair value estimated in
accordance with the provisions of SFAS 123(R) for all share-based payments
granted subsequent to the adoption date; and c) the discount on shares sold to
employees post-adoption, which represents the difference between the grant date
fair value and the employee purchase price.

For fiscal 2006, the adoption of the SFAS 123(R) fair value method resulted in
additional compensation expense (a component of selling, general and
administrative expenses) related to our stock plans that we would not have
recognized had we continued to account for share-based compensation under APB
25. For fiscal 2006, this share-based compensation expense lowered pre-tax
income by $9.7 million and net income by $6.1 million.

Depreciation and amortization expense increased 24.3% in fiscal 2006 over fiscal
2005 due mainly to costs associated with new and relocated stores and remodeled
existing stores.

Net interest expense increased 64.7% in fiscal 2006 from fiscal 2005. This
increase is primarily due to higher average interest rates in fiscal 2006 and
interest incurred as the result of federal and sales tax audits; partially
offset by a reduction in average long-term borrowings under our revolving credit
agreement.

Our effective tax rate was 37.4% for fiscal 2006 compared to 36.5% in fiscal
2005, resulting primarily from a higher effective income tax rate due to the
non-deductibility of certain stock compensation expense related to the adoption
of SFAS123(R).

As a result of the foregoing factors, net income for fiscal 2006 increased 6.2%
to $91.0 million, or $2.22 per diluted share, which includes a $9.7 million
charge, or $0.15 per diluted share, in stock compensation expense. This compares
to net income of $85.7 million, or $2.09 per diluted share, in fiscal 2005.

FISCAL 2005 COMPARED TO FISCAL 2004

Net sales increased 18.9% to $2,068.0 million in fiscal 2005 from $1,738.8
million in fiscal 2004. This increase resulted from the opening of new stores
(including 16 additional stores from the acquisition of Del's) as well as a
same-store sales improvement of 5.7%. Fiscal 2005 included an additional week
compared to fiscal 2004, which accounted for approximately 1.8% of the sales
increase. Our average transaction value increased 5.5% to $42.03 and same-store
average transaction value increased 4.3% for fiscal 2005. Average daily
transactions per store decreased 1.2% to 245, while same-store transaction count
increased 1.4%. The same-store sales increase includes an approximate 1.2% gain
for fiscal 2005 which is attributed to increases in selling prices resulting
from rising steel and petroleum-related product costs. Same-store transaction
count increases were generally experienced across all product lines, with
seasonal products representing the strongest category.

In fiscal 2005, we opened 65 new stores (compared to 53 in fiscal 2004),
acquired an additional 16 Del's stores, relocated 18 stores (compared to 20 in
fiscal 2004) and closed one store (compared to one in fiscal 2004).

As a percent of sales, gross margin increased 76 basis points to 30.9% for
fiscal 2005 from 30.2% for fiscal 2004. Gross margin was primarily impacted by
overall lower product costs partially offset by higher than anticipated
transportation costs (caused primarily by increased diesel fuel costs and
overall capacity demands on the transportation industry).

As a percent of sales, selling, general and administrative ("SG&A") expenses
were comparable at 22.7% and 22.8% for fiscal 2005 and 2004, respectively.

Depreciation and amortization expense increased 25.1% in fiscal 2005 over fiscal
year 2004 due mainly to costs associated with new and relocated stores,
remodeled existing stores and new distribution facilities.

                                       19




Net interest expense increased 13.3% in fiscal 2005 from fiscal 2004. This
increase is primarily due to higher average interest rates in fiscal 2005
partially offset by a reduction in average long-term borrowings under the
Company's revolving credit agreement.

Our effective tax rate was 36.5% for fiscal 2005 compared to 36.0% in fiscal
2004, resulting primarily from a higher effective state income tax rate due to
the mix of business by state.

As a result of the foregoing factors, net income for fiscal 2005 increased 33.7%
to $85.7 million, or $2.09 per diluted share, compared to net income of $64.1
million, or $1.57 per diluted share, in fiscal 2004.


LIQUIDITY AND CAPITAL RESOURCES

In addition to normal operating expenses, our primary ongoing cash requirements
are for expansion, remodeling and relocation programs, including inventory
purchases and capital expenditures. Our primary ongoing sources of liquidity are
funds provided from operations, commitments available under our revolving credit
agreement, capital and operating leases and normal trade credit. Our inventory
and accounts payable levels typically build in the first and third fiscal
quarters in anticipation of the spring and winter selling seasons, respectively.

WORKING CAPITAL

At December 30, 2006, we had working capital of $316.1 million, a $75.4 million
increase from December 31, 2005. This increase was primarily attributable to
changes in the following components of current assets and current liabilities
(in millions):



                                                          2006          2005        VARIANCE
                                                         ------        ------       --------
                                                                          
      CURRENT ASSETS:
        Cash and cash equivalents ...............      $   37.6      $   21.2      $   16.4
        Inventories .............................         593.4         460.8         132.6
        Prepaid expenses and other current assets          37.0          38.4          (1.4)
        Other, net ..............................          11.3          11.0           0.3
                                                         ------        ------        ------
                                                          679.3         531.4         147.9
                                                         ------        ------        ------
      CURRENT LIABILITIES:
        Accounts payable ........................      $  238.9      $  185.4      $   53.5
        Accrued expenses ........................         111.7         102.8           8.9
        Income taxes payable ....................          11.5           1.4          10.1
        Other, net ..............................           1.1           1.1          (0.0)
                                                         ------        ------        ------
                                                          363.2         290.7          72.5
                                                         ------        ------        ------

      WORKING CAPITAL ...........................      $  316.1      $  240.7      $   75.4
                                                         ======        ======        ======


The increase in cash and cash equivalents was primarily due to increased cash
generated from results of operations in fiscal 2006.

The increase in inventories and related increase in accounts payable resulted
primarily from the purchase of inventory for new stores, new merchandising
initiatives and the addition of inventory due to a new (larger) distribution
center in Waverly, Nebraska. We also experienced increased inventory levels in
many stores as the result of softer than anticipated sales for the fourth
quarter, and planned improvements in our overall in-stock position at the store
level.

We experienced a 15 basis point decrease in inventory turns (approximately 2.67
times per year), which contributed to a decrease in our financed inventory from
approximately 39.0% to 37.1%. (The calculated financed inventory assumes average
inventory, excludes in-transit inventories and includes unopened stores). Trade
credit arises from our vendors granting extended payment terms for inventory
purchases. Payment terms generally vary from 30 days to 180 days depending on
the inventory product. The increase in accrued expenses was primarily due to
increases in the scale of our business volume, the timing of the accruals and
the related payment of those accruals. The increase in income taxes payable
resulted from increased income and the timing of estimated tax payments.

                                       20




BORROWINGS AND CREDIT FACILITIES

In August 2002, we entered into a credit agreement with Bank of America, N.A.,
as agent for a lender group (the "Credit Agreement"), allowing us to borrow up
to $155 million. The Credit Agreement was subsequently amended on January 28,
2004 and September 30, 2004 and replaced on February 22, 2007 (see below). Both
amendments included changes to certain financial covenants, primarily to provide
flexibility for capital expenditures, and extended the maturity to February 27,
2008. There were no outstanding borrowings under the Credit Agreement at
December 30, 2006 and $8.2 million was outstanding at December 31, 2005. The
balance of funds available under the Credit Agreement may be utilized for
borrowings and up to $50 million for letters of credit, of which $24.9 million
and $12.1 million were outstanding at December 30, 2006 and December 31, 2005,
respectively. These letters of credit were issued primarily for the purchase of
inventory. The Credit Agreement bears interest at either the bank's base rate
(8.25% at December 30, 2006) or the London Inter-Bank Offer Rate ("LIBOR")
(5.32% at December 30, 2006) plus an additional amount ranging from 0.75% to
1.5% per annum, adjusted quarterly based on our performance (0.75% at December
30, 2006). We are also required to pay, quarterly in arrears, a commitment fee
ranging from 0.20% to 0.35% per annum (0.20% at December 30, 2006) and adjusted
quarterly based on our performance, on the average daily unused portion of the
credit line. There are no compensating balance requirements associated with the
Credit Agreement.

The Credit Agreement contains certain restrictions regarding additional
indebtedness, capital expenditures, business operations, guarantees,
investments, mergers, consolidations and sales of assets, transactions with
subsidiaries or affiliates, and liens. In addition, we must comply with certain
quarterly restrictions (based on a rolling four-quarters basis) regarding net
worth, leverage ratio, fixed charge coverage, current ratio requirements and
spending limits on capital expenditures. We were in compliance with all
covenants at December 30, 2006.

In February 2007, we entered into a new Senior Credit Facility with largely the
same lender group as under the Credit Agreement. The new Senior Credit Facility
provides for borrowings up to $250 million (with sublimits of $75 million and
$10 million for letters of credit and swingline loans, respectively). This
agreement is unsecured and has a five-year term, with proceeds expected to be
used for working capital, capital expenditures and share repurchases. Borrowings
will bear interest at either the bank's base rate or LIBOR plus an additional
amount ranging from 0.35% to 0.90% per annum, adjusted quarterly based on our
performance (0.50% at February, 2007). We will also be required to pay a
commitment fee ranging from 0.06% to 0.18% per annum for unused capacity.

This new agreement eliminates the capital expenditures, net worth and current
ratio requirements from the previous Credit Agreement and requires quarterly
compliance with respect to fixed charge coverage and leverage ratios.

SOURCES AND USES OF CASH

Our primary source of liquidity is cash provided by operations. Principal uses
of cash for investing and financing activities are capital expenditures and
payments on debt, respectively. The following table presents a summary of cash
flows from operating, investing and financing activities for the last three
fiscal years (in millions):


                                                                        2006          2005          2004
                                                                      -------       -------       -------
                                                                                       
      Net cash provided by operating activities ...............     $    87.1     $    99.2     $    77.1
      Net cash used in investing activities ...................         (80.8)        (90.7)        (87.3)
      Net cash provided by (used in) financing activities .....          10.1         (16.2)         19.2
                                                                      -------       -------       -------
           Net increase (decrease) in cash and cash equivalents     $    16.4     $    (7.7)    $     9.0
                                                                      =======       =======       =======


                                       21




OPERATING ACTIVITIES

The $12.1 million decrease in net cash provided by operations in fiscal 2006
over fiscal 2005 is primarily due to changes in the following operating
activities (in millions):



                                                      2006          2005       VARIANCE
                                                     ------        ------      --------
                                                                      
      Net income ...........................     $    91.0       $    85.7     $   5.3
      Tax benefit of stock options exercised            --            12.5       (12.5)
      Depreciation and amortization ........          42.3            34.0         8.3
      Stock compensation expense ...........           9.7              --         9.7
      Deferred income taxes ................          (3.5)          (12.7)        9.2
      Inventories and accounts payable .....         (79.1)          (34.9)      (44.2)
      Accrued expenses .....................           8.8            12.8        (4.0)
      Income taxes currently payable .......          10.1             1.4         8.7
      Other, net ...........................           7.8             0.4         7.4
                                                   -------         -------       -----
           Net cash provided by operations .     $    87.1       $    99.2     $ (12.1)
                                                   =======         =======       =====


The decrease in net cash provided by operations in fiscal 2006 compared with
fiscal 2005 is primarily due to the net increase in inventory and accounts
payable (as discussed in the Working Capital section), partially offset by an
increase in net income adjusted for non-cash items.

The $22.1 million increase in net cash provided by operations in fiscal 2005
from fiscal 2004 was primarily due to changes in the following operating
activities (in millions):



                                                      2006          2005       VARIANCE
                                                     ------        ------      --------
                                                                      
      Net income ..............................   $    85.7     $    64.1      $  21.6
      Depreciation and amortization ...........        34.0          27.2          6.8
      Deferred income taxes ...................       (12.7)         (4.6)        (8.1)
      Inventories and accounts payable ........       (34.9)        (44.2)         9.3
      Prepaid expenses and other current assets        (7.1)         (2.2)        (4.9)
      Accrued expenses ........................        12.8          20.2         (7.4)
      Other, net ..............................        21.4          16.6          4.8
                                                    -------       -------        -----
           Net cash provided by operations ....   $    99.2     $    77.1      $  22.1
                                                    =======       =======        =====


The increase in net cash provided by operations in fiscal 2005 compared with
fiscal 2004 was primarily due to the increase in net income (exclusive of
depreciation and amortization and deferred income taxes), and a net decrease in
inventory and accounts payable. Increases in prepaid expenses and other current
assets and a relative decrease in accrued expenses was primarily due to the
growth in cash provided by operations. These increases were primarily due to the
growth in our business during fiscal 2005 and the timing of payments.

INVESTING ACTIVITIES

Investing activities used $80.8 million, $90.7 million, and $87.3 million in
fiscal 2006, 2005 and 2004, respectively. The majority of this cash requirement
relates to our capital expenditures and, in fiscal 2005, the acquisition of the
assets of Del's.

Our significant store expansion, coupled with required investment in
infrastructure, required the following capital expenditures, including capital
leases (in thousands):


                                                              2006         2005        2004
                                                            -------      -------     -------
                                                                            
      New and relocated stores and stores not yet opened    $54,111      $40,525     $30,758
      Existing stores ..................................     30,547       13,936      10,033
      Distribution center capacity and improvements ....      2,302       19,585      41,024
      Information technology ...........................      3,003        4,100       9,105
      Corporate and other ..............................        602          689       2,069
                                                            -------      -------     -------
                                                            $90,565      $78,835     $92,989
                                                            =======      =======     =======


                                       22




Our long-term growth strategy anticipates continued geographic market expansion
and further concentration within existing markets. This growth will also require
continuing investment in information technology and people. The costs reflected
below are typically building improvements, as we lease the majority of our
facilities. We currently estimate that capital expenditures will approximate
$100 million in fiscal 2007.

FINANCING ACTIVITIES

Financing activities provided $10.1 million, used $16.2 million, and provided
$19.2 million in fiscal 2006, 2005 and 2004, respectively. Excluding the tax
benefit recognized in 2006 as a result of the adoption of SFAS 123(R), financing
activities in fiscal 2006 would have been $0.6 million. The cash provided by
financing activities is largely net cash provided as a result of borrowings
required by operations, partially offset by proceeds received from the issuance
of stock under stock incentive programs.

We believe that our cash flow from operations, borrowings available under the
new Senior Credit Facility, and normal trade credit will be sufficient to fund
our operations and our capital expenditure needs, including store openings,
relocations and renovations, over the next several years.

SIGNIFICANT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following table reflects our future obligations and commitments as of
December 30, 2006 (in thousands):


                                                        PAYMENT DUE BY PERIOD
                            --------------------------------------------------------------------------
                               TOTAL
                            CONTRACTUAL       LESS THAN                                      MORE THAN
                            OBLIGATIONS        1 YEAR        1-3 YEARS       4-5 YEARS        5 YEARS
                            -----------      ---------      ----------      ----------      ----------
                                                                               
Operating leases .........    $967,383        $103,816        $194,031        $173,543        $495,993
Capital leases(1).........       6,210           1,330           1,503             583           2,794
Purchase obligations(2)...       7,571           7,571              --              --              --
                              --------        --------        --------        --------        --------
                              $981,164        $112,717        $195,534        $174,126        $498,787
                              ========        ========        ========        ========        ========


----------------------------
(1)     Capital lease obligations include related interest.
(2)     The amounts for purchase obligations include commitments for
        construction of stores expected to be opened in 2007.

The Company had outstanding standby letters of credit of $24.9 million as of
December 30, 2006.

OFF-BALANCE SHEET ARRANGEMENTS

The extent of our off-balance sheet arrangements is operating leases and
outstanding letters of credit. The balances for these arrangements are discussed
above. We typically lease buildings for retail stores and offices rather than
acquiring these assets which allow us to utilize financial capital to operate
the business rather than invest in fixed assets. Letters of credit allow us to
purchase inventory, primarily sourced overseas, and support certain risk
management programs in a timely manner.


KNOWN TRENDS, EVENTS, DEMANDS, COMMITMENTS AND UNCERTAINTIES

LITIGATION

We are involved in various litigation matters arising in the ordinary course of
business. After consultation with legal counsel, we expect these matters will be
resolved without material adverse effect on our consolidated financial position
or results of operations. Any estimated loss related to such matters has been
adequately provided in accrued liabilities to the extent probable and reasonably
estimable. It is possible, however, that future results of operations for any
particular quarterly or annual period could be materially affected by changes in
circumstances relating to these proceedings.

In July 2004, a purported shareholder derivative lawsuit was filed in the
Chancery Court for Davidson County, Tennessee by the Hawaii Laborers Pension
Plan against each of our directors, certain of our officers and one former

                                       23




director. We were named as a nominal defendant. On December 3, 2004, the Court
granted our motion to dismiss and ordered that all claims in the amended
complaint be dismissed without prejudice. Although the plaintiff filed
subsequent appellate motions, all were dismissed. All applicable statutes of
limitations have run, concluding the matter in our favor.

RECENT ACCOUNTING PRONOUNCEMENTS

SHARE-BASED PAYMENTS
In December 2004, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 123R, "Share-Based Payment" ("SFAS 123R"). SFAS 123R is a revision
of SFAS 123 and supersedes APB 25. Among other items, SFAS 123R eliminates the
use of the intrinsic value method of accounting and requires companies to
recognize the cost of employee services received in exchange for awards of
equity instruments, based on the grant date fair value of those awards. Pro
forma disclosure is no longer an alternative under the new standard. We adopted
SFAS 123R in fiscal 2006, as required (see Note 2 to the Consolidated Financial
Statements for further information).

HOW TAXES COLLECTED FROM CUSTOMERS AND REMITTED TO GOVERNMENTAL AUTHORITIES
SHOULD BE PRESENTED IN THE INCOME STATEMENT
In March 2006, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF Issue No. 06-3, "How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement (That Is,
Gross Versus Net Presentation)", which allows companies to adopt a policy of
presenting taxes in the income statement on either a gross or net basis. Taxes
within the scope of this EITF would include taxes that are imposed on a revenue
transaction between a seller and a customer, for example, sales taxes, use
taxes, value-added taxes, and some types of excise taxes. EITF 06-3 is effective
for interim and annual reporting periods beginning in fiscal 2007. EITF 06-3
will not impact the method for recording and reporting these sales taxes in our
Consolidated Financial Statements as our policy is to exclude all such taxes
from revenue.

ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES
In June 2006, the Financial Accounting Standards Board issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement No. 109" ("FIN 48") to create a single model to
address accounting for uncertainty in tax positions. This Interpretation
clarifies the accounting for uncertainty in income taxes recognized in the
financial statements in accordance with FASB Statement No. 109, Accounting for
Income Taxes. This Interpretation prescribes the minimum recognition threshold a
tax position is required to meet before being recognized in the financial
statements. Tax positions that meet a "more-likely-than-not" recognition
threshold should be measured in order to determine the tax benefit to be
recognized. We will adopt FIN 48 in fiscal 2007, as required. We currently
estimate a charge to retained earnings of approximately $2 million to be
recognized as the cumulative effect of adoption. Additionally, we anticipate the
adoption of this pronouncement will increase our effective income tax rate in
fiscal 2007 by approximately 60 basis points.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------- ----------------------------------------------------------

We are exposed to changes in interest rates primarily from the Credit Agreement.
The Credit Agreement bears interest at either the bank's base rate (8.25% and
7.25% December 30, 2006 and December 31, 2005, respectively) or LIBOR (5.32% and
4.39% at December 30, 2006 and December 31, 2005, respectively) plus an
additional amount ranging from 0.75% to 1.50% per annum, adjusted quarterly,
based on our performance (0.75% at both December 30, 2006 and December 31,
2005). We are also required to pay (quarterly in arrears) a commitment fee
ranging from 0.20% to 0.35% based on the daily average unused portion of the
credit line. A hypothetical 100 basis point adverse move (increase) in interest
rates along the entire interest rate yield curve would result in approximately
$378,000 of additional annual interest expense and would not impact the fair
market value of the long-term debt.

                                       24





ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------  -------------------------------------------

                                      INDEX

                             TRACTOR SUPPLY COMPANY


                                                                                               PAGE
                                                                                               ----

                                                                                            
Management's Report On Internal Control Over Financial Reporting................................26

Report Of Independent Registered Public Accounting Firm On Internal Control Over
         Financial Reporting....................................................................27

Report Of Independent Registered Public Accounting Firm.........................................28

Consolidated Statements Of Income For The Years Ended December 30, 2006,
         December 31, 2005 And December 25, 2004................................................29

Consolidated Balance Sheets As Of December 30, 2006 And December 31, 2005.......................30

Consolidated Statements Of Stockholders' Equity For The Years Ended
         December 30, 2006, December 31, 2005 And December 25, 2004.............................31

Consolidated Statements Of Cash Flows For The Years Ended December 30, 2006,
         December 31, 2005 And December 25, 2004................................................32


                                       25





        MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining
effective internal control over financial reporting as defined in Rule 13a-15(f)
under the Securities Exchange Act of 1934. The Company's internal control over
financial reporting is a process designed 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.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.

Management assessed the effectiveness of the Company's internal control over
financial reporting as of December 30, 2006. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in INTERNAL CONTROL --
INTEGRATED FRAMEWORK. Based on this assessment, management believes that, as of
December 30, 2006, the Company's internal control over financial reporting is
effective based on those criteria.

Management's assessment of the effectiveness of internal control over financial
reporting as of December 30, 2006, has been audited by Ernst & Young LLP, the
independent registered public accounting firm which also audited the Company's
consolidated financial statements. Ernst & Young's attestation report on
management's assessment of the Company's internal control over financial
reporting appears on page 27 hereof.


/s/ James F. Wright                                      /s/ Anthony F. Crudele
-------------------                                      ----------------------
JAMES F. WRIGHT                                          ANTHONY F. CRUDELE
President and Chief Executive Officer                    Senior Vice President-
                                                         Chief Financial Officer

                                       26





             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  ON INTERNAL CONTROL OVER FINANCIAL REPORTING

THE BOARD OF DIRECTORS AND STOCKHOLDERS
TRACTOR SUPPLY COMPANY

We have audited management's assessment, included in the accompanying
Management's Report on Internal Controls Over Financial Reporting, that Tractor
Supply Company maintained effective internal control over financial reporting as
of December 30, 2006, based on criteria established in Internal
Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO criteria). Tractor Supply
Company's management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting. Our responsibility is to express an opinion on
management's assessment and an opinion on the effectiveness of the Company's
internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, evaluating management's assessment, testing and evaluating
the design and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed 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. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion, management's assessment that Tractor Supply Company maintained
effective internal control over financial reporting as of December 30, 2006, is
fairly stated, in all material respects, based on the COSO criteria. Also, in
our opinion, Tractor Supply Company maintained, in all material respects,
effective internal control over financial reporting as of December 30, 2006,
based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of
Tractor Supply Company as of December 30, 2006 and December 31, 2005, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended December 30, 2006 and our report
dated February 26, 2007 expressed an unqualified opinion thereon.

                                                  /s/ Ernst & Young LLP

Nashville, Tennessee
February 26, 2007

                                       27




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


THE BOARD OF DIRECTORS AND STOCKHOLDERS
TRACTOR SUPPLY COMPANY

We have audited the accompanying consolidated balance sheets of Tractor Supply
Company as of December 30, 2006 and December 31, 2005, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three years in the period ended December 30, 2006. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Tractor Supply
Company at December 30, 2006 and December 31, 2005, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 30, 2006, in conformity with U.S. generally accepted accounting
principles.

As discussed in Note 2 to the consolidated financial statements, in 2006 the
Company changed its method of accounting for share-based compensation using the
modified-prospective method.

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of Tractor Supply
Company's internal control over financial reporting as of December 30, 2006,
based on criteria established in Internal Control-Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission and our
report dated February 26, 2007 expressed an unqualified opinion thereon.

                                                  /s/ Ernst & Young LLP

Nashville, Tennessee
February 26, 2007

                                       28




                             TRACTOR SUPPLY COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


                                                                      FISCAL YEAR
                                                    ----------------------------------------------
                                                       2006               2005              2004
                                                    ----------        ----------        ----------
                                                                               
NET SALES ..................................        $2,369,612        $2,067,979        $1,738,843

Cost of merchandise sold ...................         1,618,249         1,428,428         1,214,156
                                                    ----------        ----------        ----------

   GROSS MARGIN ............................           751,363           639,551           524,687

Selling, general and administrative expenses           561,051           469,087           395,955
Depreciation and amortization ..............            42,292            34,020            27,186
                                                    ----------        ----------        ----------

   OPERATING INCOME ........................           148,020           136,444           101,546

Interest expense, net ......................             2,688             1,632             1,440
                                                    ----------        ----------        ----------

INCOME BEFORE INCOME TAXES .................           145,332           134,812           100,106

Income tax expense .........................            54,324            49,143            36,037
                                                    ----------        ----------        ----------

NET INCOME .................................        $   91,008        $   85,669        $   64,069
                                                    ==========        ==========        ==========

NET INCOME PER SHARE - BASIC ...............        $     2.27        $     2.19        $     1.68
                                                    ==========        ==========        ==========

NET INCOME PER SHARE - ASSUMING DILUTION ...        $     2.22        $     2.09        $     1.57
                                                    ==========        ==========        ==========


   The accompanying notes are an integral part of these financial statements.
                                       29





                             TRACTOR SUPPLY COMPANY
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)



                                                                                    DEC. 30,            DEC. 31,
                                                                                      2006                2005
                                                                                   -----------         -----------
                                                                                                 
ASSETS
Current assets:
   Cash and cash equivalents ..................................................    $    37,605         $    21,203
   Inventories ................................................................        593,373             460,751
   Prepaid expenses and other current assets ..................................         37,007              38,380
   Deferred income taxes ......................................................         11,360              11,079
                                                                                   -----------         -----------
         Total current assets .................................................        679,345             531,413
                                                                                   -----------         -----------

Property and Equipment:
   Land .......................................................................         19,495              17,319
   Buildings and improvements .................................................        248,063             223,585
   Furniture, fixtures and equipment ..........................................        146,128             115,784
   Computer software and hardware .............................................         46,853              32,311
   Construction in progress ...................................................         15,404               9,842
                                                                                   -----------         -----------
                                                                                       475,943             398,841
   Accumulated depreciation and amortization ..................................       (174,339)           (140,366)
                                                                                   -----------         -----------
     Property and equipment, net ..............................................        301,604             258,475

Goodwill ......................................................................         10,288              12,436
Deferred income taxes .........................................................         10,779               7,530
Other assets ..................................................................          5,976               4,941
                                                                                   -----------         -----------

         Total assets .........................................................    $ 1,007,992         $   814,795
                                                                                   ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable ...........................................................    $   238,905         $   185,397
   Other accrued expenses .....................................................        111,721             102,814
   Current portion of capital lease obligations ...............................          1,065               1,049
   Income taxes currently payable .............................................         11,550               1,421
                                                                                   -----------         -----------
         Total current liabilities ............................................        363,241             290,681

Revolving credit loan .........................................................             --               8,212
Capital lease obligations, less current maturities ............................          2,808               2,527
Straight line rent liability ..................................................         24,399              18,502
Other long-term liabilities ...................................................         18,640              17,175
                                                                                   -----------         -----------
         Total liabilities ....................................................        409,088             337,097
                                                                                   -----------         -----------

Stockholders' equity:
   Preferred Stock, 40,000 shares authorized; $1.00 par value; no shares issued             --                  --
   Common Stock, 100,000,000 shares authorized, $.008 par value; 40,281,732 and
     39,433,449 shares issued and outstanding in 2006 and 2005, respectively ..            322                 315
   Additional paid-in capital .................................................        129,249              99,047
   Accumulated other comprehensive loss .......................................            (22)                (11)
   Retained earnings ..........................................................        469,355             378,347
                                                                                   -----------         -----------
         Total stockholders' equity ...........................................        598,904             477,698
                                                                                   -----------         -----------

         Total liabilities and stockholders' equity ...........................    $ 1,007,992         $   814,795
                                                                                   ===========         ===========


   The accompanying notes are an integral part of these financial statements.
                                       30




                             TRACTOR SUPPLY COMPANY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)



                                                                                         ACCUMULATED
                                                             ADDITIONAL                      OTHER            TOTAL
                                                 COMMON       PAID-IN      RETAINED      COMPREHENSIVE    STOCKHOLDERS'
                                                 STOCK        CAPITAL      EARNINGS      INCOME (LOSS)       EQUITY
                                               ---------     ---------     ---------        ---------       ---------
                                                                                             
STOCKHOLDERS' EQUITY AT DECEMBER 27, 2003 ...  $     299     $  62,083     $ 228,609        $      --       $ 290,991

Issuance of common stock under employee stock
   purchase plan (41,282 shares) ............          1         1,454                                          1,455
Exercise of stock options (870,622 shares) ..          6         5,380                                          5,386
Tax benefit on disqualifying disposition of
   stock options ............................                    8,683                                          8,683
Net income ..................................                                 64,069                           64,069
                                               ---------     ---------     ---------        ---------       ---------

STOCKHOLDERS' EQUITY AT DECEMBER 25, 2004 ...        306        77,600       292,678               --         370,584

Issuance of common stock under employee stock
   purchase plan (42,065 shares) ............                    1,648                                          1,648
Exercise of stock options (1,089,011 shares)           9         7,282                                          7,291
Tax benefit on disqualifying disposition of
   stock options ............................                   12,517                                         12,517
Foreign currency translation adjustment .....                                                     (11)            (11)
Net income ..................................                                 85,669                           85,669
                                               ---------     ---------     ---------        ---------       ---------

STOCKHOLDERS' EQUITY AT DECEMBER 31, 2005 ...        315        99,047       378,347              (11)        477,698

Issuance of common stock under employee stock
   purchase plan (38,354 shares) ............          1         1,930                                          1,931
Exercise of stock options (809,929 shares) ..          6         8,136                                          8,142
Stock compensation ..........................                    9,664                                          9,664
Tax benefit on disqualifying disposition of
   stock options ............................                   10,472                                         10,472
Foreign currency translation adjustment .....                                                     (11)            (11)
Net income ..................................                                 91,008                           91,008
                                               ---------     ---------     ---------        ---------       ---------

STOCKHOLDERS' EQUITY AT DECEMBER 30, 2006 ...  $     322     $ 129,249     $ 469,355        $     (22)      $ 598,904
                                               =========     =========     =========        =========       =========



   The accompanying notes are an integral part of these financial statements.

                                       31






                             TRACTOR SUPPLY COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

                                                                                       FISCAL YEAR
                                                                      ---------------------------------------------
                                                                         2006              2005              2004
                                                                      ---------         ---------         ---------
                                                                                                 
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income ................................................        $  91,008         $  85,669         $  64,069
   Tax benefit of stock options exercised ....................               --            12,517             8,683
   Adjustments to reconcile net income to net cash provided
     by operating activities:
     Depreciation and amortization ...........................           42,292            34,020            27,186
     Gain on disposition of property and equipment ...........           (1,606)           (1,824)             (862)
     Stock compensation expense ..............................            9,664                --                --
     Deferred income taxes ...................................           (3,530)          (12,735)           (4,642)
     Change in assets and liabilities, net of acquisition:
         Inventories .........................................         (132,622)          (71,302)          (60,609)
         Prepaid expenses and other current assets ...........               57            (7,097)           (2,150)
         Accounts payable ....................................           53,508            36,413            16,386
         Accrued expenses ....................................            8,757            12,817            20,201
         Income taxes currently payable ......................           10,129             1,421                --
         Other ...............................................            9,486             9,282             8,804
                                                                      ---------         ---------         ---------

         Net cash provided by operating activities ...........           87,143            99,181            77,066
                                                                      ---------         ---------         ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures ......................................          (88,894)          (77,507)          (91,313)
   Proceeds from sale of property and equipment ..............            8,810             4,413             3,966
   Acquisition of Del's Farm Supply ..........................               --           (17,603)               --
   Other .....................................................             (746)               --                --
                                                                      ---------         ---------         ---------

         Net cash used in investing activities ...............          (80,830)          (90,697)          (87,347)
                                                                      ---------         ---------         ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings under revolving credit agreement ...............          394,404           242,992           364,569
   Repayments under revolving credit agreement ...............         (402,616)         (267,059)         (351,693)
   Tax benefit of stock options exercised ....................            9,456                --                --
   Principal payments under capital lease obligations ........           (1,228)           (1,094)             (475)
   Net proceeds from issuance of common stock ................           10,073             8,939             6,841
                                                                      ---------         ---------         ---------

         Net cash provided by (used in) financing activities .           10,089           (16,222)           19,242
                                                                      ---------         ---------         ---------

NET INCREASE (DECREASE) IN CASH ..............................           16,402            (7,738)            8,961

Cash and cash equivalents at beginning of year ...............           21,203            28,941            19,980
                                                                      ---------         ---------         ---------

Cash and cash equivalents at end of year .....................        $  37,605         $  21,203         $  28,941
                                                                      =========         =========         =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
   Interest ..................................................        $   2,822         $   1,715         $   1,271
   Income taxes ..............................................           36,898            47,191            28,917

Supplemental disclosure of non-cash activities:
   Equipment acquired through capital leases .................        $   1,671         $   1,328         $   1,676



   The accompanying notes are an integral part of these financial statements.

                                       32




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:

NATURE OF BUSINESS

Tractor Supply Company (the "Company", "we" and/or "our") is the largest
operator of retail farm and ranch stores in the United States. We are focused on
supplying the lifestyle needs of recreational farmers and ranchers and those who
enjoy the rural lifestyle, as well as tradesmen and small businesses. Stores are
located in towns outlying major metropolitan markets and in rural communities.
At December 30, 2006, we operated 676 retail farm and ranch stores in 37 states
and one Canadian province.

FISCAL YEAR

Our fiscal year includes 52 or 53 weeks and ends on the last Saturday of the
calendar year. The fiscal year ended December 31, 2005 consists of 53 weeks
while the fiscal years ended December 30, 2006 and December 25, 2004 consist of
52 weeks.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries. All material intercompany accounts and
transactions have been eliminated.

SEGMENT INFORMATION

In accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," Tractor Supply Company has one reportable industry
segment - the operation of farm and ranch retail stores.

MANAGEMENT ESTIMATES

Our preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States inherently
requires estimates and assumptions by us that affect the reported amounts of
assets and liabilities, revenues and expenses and related disclosures. Actual
results could differ from those estimates.

Significant estimates and assumptions by management primarily impact the
following key financial statement areas:

        REVENUE RECOGNITION AND SALES RETURNS
        We recognize revenue at the time the customer takes possession of
        merchandise or receives services. If we receive payment before the
        customer has taken possession of the merchandise (as per our layaway
        program), the revenue is deferred until the sale is complete. Revenues
        from the sale of gift cards are deferred and recognized upon redemption.

        We estimate a liability for sales returns based on a one-year rolling
        average of historical return trends and we believe that our estimate for
        sales returns is an accurate reflection of future returns associated
        with past sales. Our estimation techniques have been consistently
        applied from year to year, however, as with any estimates, refunds
        activity may vary from estimated amounts. Estimated sales returns are
        shown "net", as a reduction in gross margin in the Consolidated
        Statements of Income. At December 30, 2006 we had a liability of $3.2
        million reserved for sales returns, compared to $3.0 million at December
        31, 2005.

        INVENTORY VALUATION

        IMPAIRMENT RISK
        We identify potentially excess and slow-moving inventory by evaluating
        turn rates, sales trends, age of merchandise, overall inventory levels
        and other benchmarks. The estimated inventory valuation reserve to
        recognize any impairment in value (i.e. an inability to realize the full
        carrying value) is based on our aggregate assessment of these valuation
        indicators under prevailing market conditions and current merchandising
        strategies. We do not believe our merchandise inventories are subject to
        significant risk of obsolescence in the near term. However, changes in
        market conditions or consumer purchasing patterns could result in the
        need for additional reserves.

                                       33




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


        SHRINKAGE
        Our stores perform physical inventories once a year and we have
        established reserves for estimating inventory shrinkage between physical
        inventory counts. This is done by assessing the chain-wide average
        shrinkage experience rate, applied to the related periods' sales
        volumes. Such assessments are updated on a regular basis for the most
        recent individual store experiences.

        VENDOR SUPPORT
        We receive funding from our vendors for the promotion of our brand as
        well as the sale of their products. Vendor funding is initially deferred
        as a reduction of the purchase price of inventory and then recognized as
        a reduction of cost of merchandise as the related inventory is sold, in
        accordance with Emerging Issues Task Force No. 02-16, "Accounting by a
        Customer (Including a Reseller) for Certain Consideration Received from
        a Vendor" ("EITF 02-16").

        The amount of expected funding is estimated based upon initial
        guaranteed commitments, as well as anticipated purchase levels with
        applicable vendors. The estimated purchase volume and related vendor
        funding is based on our current knowledge of inventory levels, sales
        trends and expected customer demand, as well as planned new store
        openings and relocations. Although we believe we have the ability to
        reasonably estimate purchase volume and related vendor funding, it is
        possible that actual results could significantly differ from the
        estimated amounts.

        FREIGHT
        We incur various types of transportation and delivery costs in
        connection with inventory purchases and distribution. Such costs are
        included as a component of the overall cost of inventories and
        recognized as a cost of merchandise sold as inventory is sold.

        During 2006, we refined our method of estimating the freight cost
        component of inventory based on changes in our business and operating
        environment which included a change in mix of goods, an increased level
        of importing and rapidly increasing fuel costs. This refinement provides
        a more appropriate matching of freight cost incurred with inventory and
        cost of merchandise sold. This change in estimate increased the
        inventory value and reduced cost of merchandise sold by approximately
        $2.9 million, (or $.04 per diluted share) for fiscal 2006.

SHARE-BASED PAYMENTS
We have share-based compensation plans covering certain members of management
and non-employee directors. Effective January 1, 2006, we adopted the fair value
recognition provisions of SFAS No. 123(R), "Share-Based Payments" using the
modified prospective transition method. (See Note 2).

We estimate the fair value of stock option awards on the date of grant utilizing
a modified BLACK-SCHOLES option pricing model. The BLACK-SCHOLES option
valuation model was developed for use in estimating the fair value of short-term
traded options that have no vesting restrictions and are fully transferable.
However, key assumptions used in the BLACK-SCHOLES model are adjusted to
incorporate the unique characteristics of our stock option awards. Option
valuation models require the input of somewhat subjective assumptions including
expected stock price volatility and expected life. We rely on historical
volatility trends to estimate future volatility assumptions. Other assumptions
required for estimating fair value with the BLACK-SCHOLES model are the expected
risk-free interest rate and expected life of the option. The risk-free interest
rates used were actual U.S. Treasury zero-coupon rates for bonds matching the
expected term of the option on the date of grant. The expected life of the
option on the date of grant was estimated based on our historical experience for
similar options.

In addition to the key assumptions used in the Black Scholes model, the
estimated forfeiture rate at the time of valuation (which is based on historical
experience for similar options) is a critical assumption, as it reduces expense
ratably over the vesting period. We adjust this estimate annually, based on the
extent to which actual forfeitures differ, or are expected to differ, from the
previous estimate.

We believe our estimates are reasonable in the context of actual (historical)
experience. The impact of adopting SFAS 123(R) on future results will depend on,
among other matters, levels of share-based payments granted in the future,
actual forfeiture rates and the timing of option exercises.

                                       34



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


SALES TAX RESERVE
A portion of our sales are to tax-exempt customers. We obtain exemption
information as a necessary part of each tax-exempt transaction. Many of the
states in which we conduct business will perform audits to verify our compliance
with applicable sales tax laws. The business activities of our customers and the
intended use of the unique products sold by us create a challenging and complex
environment of compliance. These circumstances also create some risk that we
could be challenged as to the propriety of our sales tax compliance. While we
believe we reasonably enforce sales tax compliance with our customers and
endeavor to fully comply with all applicable sales tax regulations, there can be
no assurance that we, upon final completion of such audits, would not have a
significant liability for disallowed exemptions.

We review our past audit experience and assessments with applicable states to
determine if we have potential exposure for non-compliance. Any estimated
liability is based on an initial assessment of compliance risk and our to-date
experience with each audit. As each audit progresses, we quantify the exposure
based on preliminary assessments made by the state auditors, adjusted for
additional documentation that may be provided to reduce the assessment. The
reserve for these tax audits can fluctuate depending on numerous factors,
including the complexity of agricultural-based exemptions, ambiguity in state
tax regulations, the number of ongoing audits and the length of time required to
settle with the state taxing authorities.

INSURANCE RESERVES
We self-insure a significant portion of our employee medical insurance, workers'
compensation and general liability insurance plans. We have stop-loss insurance
policies to protect from individual losses over specified dollar values
($200,000 for employee health insurance claims, $350,000 for workers'
compensation and $250,000 for general liability). The full extent of certain
claims, especially workers' compensation and general liability claims, may not
become fully determined for several years. Therefore, we estimate potential
obligations for liabilities that have been incurred but not yet reported based
upon historical data, experience, and use of outside actuarial consultants.
Although we believe the reserves established for these obligations are
reasonably estimated, any significant increase in the number of claims or costs
associated with claims made under these plans could have a material adverse
effect on our financial results. At December 30, 2006, we had recorded net
insurance reserves of $21.9 million, compared to $19.0 million at December 31,
2005.

GIFT CARDS

We have a gift card program and we issue merchandise return cards for certain
return transactions. The gift cards do not expire and the merchandise return
cards expire after one year. As such, we recognize a benefit when: (i) the gift
card or merchandise return card is redeemed by the customer; or (ii) the
likelihood of the gift card being redeemed by the customer is remote (referred
to as "breakage") or (iii) the unredeemed merchandise returns cards expire (one
year from issuance). The gift card breakage rate is based upon historical
redemption patterns and a benefit is recognized for unredeemed gift cards in
proportion to those historical redemption patterns.

We recognized a benefit of $2.4 million and $0.3 million in fiscal 2006 and
2005, respectively. Of the $2.4 million recognized in the current year, $2.1
million (or $.03 per diluted share) was due to a modification of the estimation
of redemption assumptions based on an analysis of historical redemption
patterns. This benefit has been included as a reduction in selling, general and
administrative expenses and is reflected as a reduction of other accrued
expenses in the accompanying Consolidated Balance Sheets.

CREDIT CARDS/ACCOUNTS RECEIVABLE

Sales generated through our private label credit cards are not reflected as
accounts receivable. Under an agreement with Citi Commerce Solutions, a division
of Citigroup ("Citigroup"), consumer and business credit is extended directly to
customers by Citigroup. All credit program and related services are performed
and controlled directly by Citigroup.

                                       35



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


PRE-OPENING COSTS

Non-capital expenditures incurred in connection with opening new store and
distribution centers are expensed as incurred.

STORE CLOSING COSTS

We continuously evaluate the performance of our stores and periodically close
those that are under-performing. We recognize store closing costs in accordance
with the provisions of Statement of Financial Accounting Standards 146,
"Accounting for Costs Associated with Exit or Disposal Activities," which
requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred, usually in the period the
store closes.

CASH AND CASH EQUIVALENTS

Temporary cash investments, with a maturity of three months or less when
purchased, are considered to be cash equivalents. The majority of payments due
from banks for customer credit card transactions process within 24-48 hours and
are accordingly classified as cash and cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial instruments consist of cash and cash equivalents, short-term
receivables and payables and long-term debt instruments, including capital
leases. The carrying values of cash and cash equivalents, receivables and trade
payables equal current fair value. The terms of our revolving credit agreement
(the "Credit Agreement") include variable interest rates, which approximate
current market rates.

INVENTORIES

Inventories are stated using the lower of last-in, first-out (LIFO) cost or
market. Inventories are not in excess of market value. Quarterly inventory
determinations under LIFO are based on assumptions as to projected inventory
levels at the end of the fiscal year, sales for the year and the rate of
inflation/deflation for the year. If the first-in, first-out (FIFO) method of
accounting for inventory had been used, inventories would have been
approximately $20.3 million and $14.2 million higher than reported at December
30, 2006 and December 31, 2005, respectively.

VENDOR CONCENTRATION

Approximately 170 vendors accounted for 80% of our purchases for fiscal 2006,
with no one vendor representing more than 10% of purchases during the year.

WAREHOUSING AND DISTRIBUTION COSTS

Costs incurred at our distribution centers for receiving, warehousing and
preparing product for delivery are expensed as incurred. These costs are
included in selling, general and administrative expenses in the Consolidated
Statements of Income at the time the costs are incurred.

                                       36



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


PROPERTY AND EQUIPMENT

Property and equipment are carried at cost. Depreciation is recorded using the
straight-line method over the estimated useful lives of the assets. Improvements
to leased premises are amortized using the straight-line method over the initial
term of the lease or the useful life of the improvement, whichever is lesser.
Leasehold improvements added late in the lease term are amortized over the term
of the lease (including the first renewal option, if the renewal is reasonably
assured) or the useful life of the improvement, whichever is lesser. The
following estimated useful lives are generally applied:

                                                             Life
                                                        -------------
       Buildings                                        30 - 35 years
       Leasehold and building improvements               5 - 15 years
       Furniture, fixtures and equipment                 5 - 10 years
       Computer software and hardware                    3 -  5 years

CAPITALIZED SOFTWARE COSTS

The Company capitalizes certain costs related to the acquisition and development
of software and amortizes these costs using the straight-line method over the
estimated useful life of the software, which is three to five years. These costs
are included in Computer software and hardware in the accompanying Consolidated
Balance Sheets. Certain software costs not meeting the criteria for
capitalization are expensed as incurred.

LEASES

Assets under capital leases are amortized in accordance with our normal
depreciation policy for owned assets or over the lease term (regardless of
renewal options), if shorter, and the related charge to operations included in
depreciation expense in the Consolidated Statements of Income.

Certain leases include rent increases during the initial lease term. For these
leases, we recognize the related rental expense on a straight-line basis over
the term of the lease (which includes the pre-opening period of construction,
renovation, fixturing and merchandise placement) and record the difference
between the expense charged to operations and amounts paid as a rent liability.

We occasionally receive reimbursements from landlords to be used towards
improving the related store to be leased. Reimbursements are primarily for the
purpose of performing work required to divide a much larger location into
smaller segments, one of which we will use for our store. This work could
include the addition of demising walls, separation of plumbing, utilities,
electric work, entrances (front and back) and other work as required. Leasehold
improvements are recorded at their gross costs including items reimbursed by
landlords. Related reimbursements are amortized on a straight-line basis as a
reduction of rent expense over the initial lease term.

IMPAIRMENT OF LONG-LIVED ASSETS

We conduct a quarterly evaluation of long-lived assets for impairment or
whenever circumstances indicate the carrying amount of the assets may not be
recoverable. We apply the provisions of SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" to assets held for sale.
Impairments on long-lived assets are valued on an asset-by-asset basis and
recognized by reducing the carrying value of the related assets to their fair
value (less costs to sell, as appropriate), when the criteria have been met for
the assets to be classified as held for sale or disposal.

GOODWILL AND OTHER INTANGIBLE ASSETS

In accordance with SFAS No. 142 "Goodwill and Other Intangible Assets", goodwill
and intangible assets with indefinite lives are not amortized but instead are
measured for impairment at least annually, or when events indicate that an
impairment exists.

                                       37



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


In the current year, we reduced goodwill by $2.1 million resulting from a final
determination that this value related to acquired intangible assets, primarily
the trade name of DEL'S FARM SUPPLY. Intangible assets are included in other
assets in the accompanying Consolidated Balance Sheets. The weighted average
estimated life of the intangible assets is approximately 17.1 years. We
recognized $0.7 million in amortization expense related to intangible assets
during fiscal 2006.

ADVERTISING COSTS

Advertising costs consist of expenses incurred in connection with newspaper
circulars, television and radio, as well as direct mail, newspaper
advertisements and other promotions. Costs are expensed when incurred with the
exception of television advertising and circular and direct mail promotions,
which are expensed upon first showing. Advertising expenses for fiscal 2006,
2005 and 2004 were approximately $53.2 million, $47.4 million and $42.2 million,
respectively. Prepaid advertising costs were approximately $1.5 million and $1.6
million at December 30, 2006 and December 31, 2005, respectively.

INCOME TAXES

We account for income taxes using the liability method, whereby deferred tax
assets and liabilities are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to be recovered or settled.

NET INCOME PER SHARE

As provided by SFAS No. 128, "Earnings per Share", basic earnings per share is
calculated by dividing net income by the weighted average number of shares
outstanding during the period. Diluted EPS is calculated by dividing net income
by the weighted average diluted shares outstanding. Diluted shares are computed
using the treasury stock method for options.

FOREIGN CURRENCY TRANSLATION

Adjustments resulting from translating foreign functional currency financial
statements into U.S. dollars are included in the foreign currency translation
adjustment, a component of accumulated other comprehensive loss in shareholders'
equity. The assets and liabilities of our store in British Columbia, which was
acquired as part of the acquisition of the assets of Del's, are translated into
United States dollars at year-end rates of exchange, while revenues and expense
items are translated at average rates for the period.

NOTE 2 - SHARE-BASED COMPENSATION:

Effective January 1, 2006, we adopted SFAS 123(R), "Share-Based Payments", using
the modified prospective method and began recognizing compensation expense for
share-based payments based on the fair value of the awards. Share-based payments
include stock option grants and certain transactions under our other stock
plans. SFAS 123(R) requires share-based compensation expense recognized the
beginning of fiscal 2006 to be based on the following: a) grant date fair value
estimated in accordance with the original provisions of SFAS 123 for unvested
options granted prior to the adoption date; b) grant date fair value estimated
in accordance with the provisions of SFAS 123(R) for all share-based payments
granted subsequent to the adoption date; and c) the discount on shares sold to
employees subsequent to the adoption date, which represents the difference
between the grant date fair value and the employee purchase price.

For fiscal 2006, the adoption of the SFAS 123(R) fair value method resulted in
share-based compensation expense (a component of selling and general and
administrative expenses) related to our stock plans that we would not have
recognized had we continued to account for share-based compensation under APB 25
(defined below). For fiscal 2006, this share-based compensation expense lowered
pre-tax income by $9.7 million, and net income by $6.1 million (or $.15 per
diluted share). SFAS 123(R) also requires the benefits of tax deductions in
excess of recognized compensation cost to be reported as a financing cash flow
rather than as an operating cash flow, as required prior to adoption of SFAS
123(R).

                                       38



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Prior to January 1, 2006, we accounted for share-based payments using the
intrinsic-value-based recognition method prescribed by Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees," ("APB 25"). As
options were granted at an exercise price equal to the market value of the
underlying common stock on the date of grant, no stock-based employee
compensation cost was reflected in net income prior to adopting SFAS 123(R). As
we adopted SFAS 123(R) under the modified-prospective-transition method, results
from prior periods have not been restated.

The following table illustrates the effect on net income and earnings per share
as if we applied the fair value recognition provisions of SFAS 123 to options
granted under our stock plans in all periods presented (in thousands). For
purposes of this pro forma disclosure, the value of the options is estimated
using a modified BLACK-SCHOLES option pricing model for all option grants.

                                                         2005          2004
                                                      ----------    ----------

Net income - as reported ..........................   $   85,669    $   64,069
Pro forma compensation expense, net of income taxes       (3,943)       (4,083)
                                                      ----------    ----------
Net income - pro forma ............................   $   81,726    $   59,986
                                                      ==========    ==========
Net income per share - basic:
       As reported ................................   $     2.19    $     1.68
       Pro forma ..................................   $     2.09    $     1.57
Net income per share - diluted:
       As reported ................................   $     2.09    $     1.57
       Pro forma ..................................   $     2.00    $     1.49

Under SFAS 123(R), forfeitures are estimated at the time of valuation and reduce
expense ratably over the vesting period. This estimate is adjusted periodically
based on the extent to which actual forfeitures differ, or are expected to
differ, from the previous estimate. Under SFAS 123 and APB 25, we elected to
account for forfeitures at the time of valuation and reduce the pro-forma
expense ratably over the period.

Effective May 4, 2006, we adopted the 2006 Stock Incentive Plan, which replaced
the 2000 Stock Incentive Plan. Following the adoption of the 2006 Stock
Incentive Plan, no further grants may be made under the 2000 Stock Incentive
Plan.

Under our 2006 Stock Incentive Plan, options may be granted to officers,
non-employee directors and other employees. The per share exercise price of
options granted shall not be less than the fair market value of the stock on the
date of grant and such options will expire no later than ten years from the date
of grant. In the case of a stockholder owning more than 10% of the outstanding
voting stock of the Company, the exercise price of an incentive stock option may
not be less than 110% of the fair market value of the stock on the date of grant
and such options will expire no later than five years from the date of grant.
Also, the aggregate fair market value of the stock with respect to which
incentive stock options are exercisable on a tax deferred basis for the first
time by an individual in any calendar year may not exceed $100,000. Vesting of
options commences at various anniversary dates following the dates of grant.

Under the terms of the 2006 Stock Incentive Plan, a maximum of 2,750,000 shares
are available for grant as stock options or other awards. At December 30, 2006,
we had 2,736,971 shares available for future equity awards under the Company's
2006 Stock Incentive Plan.

                                       39



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The fair value of each option grant is separately estimated for each vesting
date. The fair value of each option is recognized as compensation expense
ratably over the vesting period. We have estimated the fair value of all stock
option awards as of the date of the grant by applying a modified BLACK-SCHOLES
pricing valuation model. The application of this valuation model involves
assumptions that are judgmental and highly sensitive in the determination of
compensation expense. The weighted averages for key assumptions used in
determining the fair value of options granted during fiscal 2006, 2005 and 2004,
as well as a summary of the methodology applied to develop each assumption, are
as follows:

                                                           FISCAL YEAR
                                              ----------------------------------
                                                2006          2005         2004
                                              -------       -------      -------
Expected price volatility..................... 48.4%         48.1%        47.7%
Risk-free interest rate.......................  4.6%          3.8%         3.5%
Weighted average expected lives (in years)....  7.3           7.1          7.1
Forfeiture rate...............................  8.1%         21.8%        20.9%
Dividend yield................................  0.0%          0.0%         0.0%

        EXPECTED PRICE VOLATILITY -- This is a measure of the amount by which a
        price has fluctuated or is expected to fluctuate. We use actual
        historical changes in the market value of the stock to calculate
        expected price volatility because we believe that this is the best
        indicator of future volatility. Prior to July 2006, we calculated weekly
        market value changes from the date of grant over a past period
        representative of the expected life of the options to determine
        volatility. Beginning in July 2006, we calculated daily market value
        changes from the date of grant over a past period representative of the
        expected life of the options to determine volatility. An increase in the
        expected volatility will increase compensation expense.

        RISK-FREE INTEREST RATE -- This is the U.S. Treasury rate for the week
        of the grant having a term equal to the expected life of the option. An
        increase in the risk-free interest rate will increase compensation
        expense.

        WEIGHTED AVERAGE EXPECTED LIVES -- This is the period of time over which
        the options granted are expected to remain outstanding and is based on
        historical experience. Options granted generally have a maximum term of
        ten years. An increase in the expected life will increase compensation
        expense.

        FORFEITURE RATE -- This is the estimated percentage of options granted
        that are expected to be forfeited or cancelled before becoming fully
        vested. This estimate is based on historical experience. An increase in
        the forfeiture rate will decrease compensation expense.

        DIVIDEND YIELD -- We have not made any dividend payments nor do we plan
        to pay dividends in the foreseeable future. An increase in the dividend
        yield will decrease compensation expense.

                                       40




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We issue new shares for restricted shares when vested and for options when
exercised. A summary of stock option activity is as follows:


                                                                       WEIGHTED
                                                        WEIGHTED        AVERAGE      AGGREGATE
                                                         AVERAGE       REMAINING     INTRINSIC
                                                        EXERCISE      CONTRACTUAL      VALUE
                                       OPTIONS           PRICE           TERM      (IN THOUSANDS)
                                      ----------       ---------     -----------  --------------
                                                                        
Outstanding at December 27, 2003       4,056,785       $    7.80
     Granted ...................         418,600           42.21
     Exercised .................        (870,622)           6.10
     Canceled ..................        (125,269)          10.30
                                      ----------

Outstanding December 25, 2004 ..       3,479,494       $   12.28
     Granted ...................         449,100           37.31

     Exercised .................      (1,089,011)           6.67
     Canceled ..................         (66,305)          25.10
                                      ----------

Outstanding December 31, 2005 ..       2,773,278       $   18.24
     Granted ...................         498,150           61.51
     Exercised .................        (809,929)          10.05
     Canceled ..................         (70,138)          42.52
                                      ----------       ---------

Outstanding December 30, 2006 ..       2,391,361       $   29.32         6.5        $   45,301
                                      ==========       =========

Vested or expected to vest at
   December 30, 2006 ...........       2,246,670       $   28.34         5.9        $   44,455

Exercisable at December 30, 2006       1,399,218       $   14.79         4.7        $   42,470



The aggregate intrinsic values in the table above represents the total
difference between our closing stock price on December 30, 2006 and the option
exercise price, multiplied by the number of in-the-money options as of December
30, 2006. As of December 30, 2006, total unrecognized compensation expense
related to non-vested stock options is $15,746,000 with a weighted average
expense recognition period of 1.9 years.

The following summarizes information concerning stock option grants during
fiscal 2006, 2005 and 2004:


                                                                     2006             2005             2004
                                                                  ----------       ----------       ----------
                                                                                       
Options granted with exercise price equal to market value:
     Weighted average exercise price .....................    $        61.07   $        36.97   $        41.57
     Weighted average fair value .........................    $        35.59   $        20.84   $        22.84
     Stock options granted ...............................           463,150          399,100          368,600

Options granted with exercise price greater than market
value: (a)
     Weighted average exercise price .....................    $        67.40   $        40.03   $        46.92
     Weighted average fair value .........................    $        21.81   $        16.10   $        17.14
     Stock options granted ...............................            35,000           50,000           50,000


----------------------
(a)     According to the terms of the 2006 Stock Incentive Plan, in the case of
        a stockholder owning more than 10% of the outstanding voting stock, the
        exercise price of an incentive stock option may not be less than 110% of
        the fair market value of the stock on the date of grant and such options
        will expire no later than five years from the date of grant.

                                       41



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Other information relative to option activity during fiscal 2006, 2005 and 2004
is as follows (in thousands, except per share amounts):


                                                                      2006         2005         2004
                                                                    ---------    ---------     ------
                                                                                      
Weighted average grant date fair value of stock options granted      $ 34.61      $ 20.33      $ 22.16
Total fair value of stock options vested ......................      $ 5,578      $ 8,304      $ 6,035
Total intrinsic value of stock options exercised ..............      $37,241      $41,662      $31,458


RESTRICTED STOCK - We issued 2,480 restricted shares under the 2006 Stock
Incentive Plan. The shares vest over a one-year term. The status of non-vested
shares as of December 30, 2006 is presented below:

                                                           GRANT DATE
          NON-VESTED SHARES                      SHARES    FAIR VALUE
          -----------------                      ------    ----------
          Non-vested at December 31, 2005            --    $      --
          Granted .......................         2,480        64.45
          Vested ........................            --           --
          Forfeited .....................            --           --
                                                 ------    ---------
          Non-vested at December 30, 2006         2,480    $   64.45
                                                 ======    =========

EMPLOYEE STOCK PURCHASE PLAN

We have an Employee Stock Purchase Plan (the "ESPP") whereby all our employees
have the opportunity to purchase, through payroll deductions, shares of common
stock at a 15% discount. Pursuant to the terms of the ESPP, we issued 38,354,
42,065 and 41,282 shares of common stock during fiscal 2006, 2005 and 2004,
respectively. The total cost related to the ESPP, including the compensation
expense calculation under SFAS 123(R), was approximately $430,000, $247,000 and
$220,000 in fiscal 2006, 2005 and 2004, respectively. At December 30, 2006,
there were 3,346,057 shares of common stock reserved for future issuance under
the ESPP.

There were no significant modifications to the Company's share-based
compensation plans during fiscal 2006 (provided that, as noted above, the
Company adopted its 2006 Stock Incentive Plan in replacement of its 2000 Stock
Incentive Plan, effective May 4, 2006).

NOTE 3 - ACQUISITION OF DEL'S FARM SUPPLY:

On November 10, 2005, the Company acquired the assets of privately-held Del's
Farm Supply, Inc. ("Del's") for $17.6 million (including 16 stores) and the
assumption of certain liabilities. Based in Lakewood, Washington, Del's now
operates 18 stores, primarily in the Pacific Northwest, that offer a wide
selection of products tailored to those who enjoy the rural lifestyle. Del's
specializes in the equine, animal and pet category. The purchase price was
preliminarily allocated as follows (in thousands):

                     Inventory .........         $  4,300
                     Current assets ....              803
                     Fixed assets ......            1,500
                     Goodwill ..........           12,400
                     Current liabilities           (1,400)
                                                 --------
                                                 $ 17,603
                                                 ========

The fair values of the assets and liabilities acquired were estimated at
December 31, 2005 due to the time it takes to obtain pertinent information to
finalize the acquired company's balance sheet (frequently with implications for
the price of the acquisition). Upon completion of the Company's procedures, the
initial estimates related to goodwill were revised (see Note 1).

                                       42



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 - CREDIT AGREEMENT:

In August 2002, we entered into a credit agreement with Bank of America, N.A.,
as agent for a lender group (the "Credit Agreement"), allowing us to borrow up
to $155 million. The Credit Agreement was subsequently amended on January 28,
2004 and September 30, 2004 and replaced on February 22, 2007 (see below). Both
amendments included changes to certain financial covenants, primarily to provide
flexibility for capital expenditures, and extended the maturity to February 27,
2008. There were no outstanding borrowings under the Credit Agreement at
December 30, 2006 and $8.2 million at December 31, 2005. The balance of funds
available under the Credit Agreement may be utilized for borrowings and up to
$50 million for letters of credit, of which $24.9 million and $12.1 million were
outstanding at December 30, 2006 and December 31, 2005, respectively. These
letters of credit were issued primarily for the purchase of inventory. The
Credit Agreement bears interest at either the bank's base rate (8.25% at
December 30, 2006) or the London Inter-Bank Offer Rate ("LIBOR") (5.32% at
December 30, 2006) plus an additional amount ranging from 0.75% to 1.5% per
annum, adjusted quarterly based on our performance (0.75% at December 30, 2006).
We are also required to pay, quarterly in arrears, a commitment fee ranging from
0.20% to 0.35% per annum (0.20% at December 30, 2006) and adjusted quarterly
based on our performance, on the average daily unused portion of the credit
line. There are no compensating balance requirements associated with the Credit
Agreement.

The Credit Agreement contains certain restrictions regarding additional
indebtedness, capital expenditures, business operations, guarantees,
investments, mergers, consolidations and sales of assets, transactions with
subsidiaries or affiliates, and liens. In addition, we must comply with certain
quarterly restrictions (based on a rolling four-quarters basis) regarding net
worth, leverage ratio, fixed charge coverage, current ratio requirements and
spending limits on capital expenditures. We were in compliance with all
covenants at December 30, 2006.

In February 2007, we entered into a new Senior Credit Facility with largely the
same lender group as under the Credit Agreement. The new Senior Credit Facility
provides for borrowings up to $250 million (with sublimits of $75 million and
$10 million for letters of credit and swingline loans, respectively). This
agreement is unsecured and has a five-year term, with proceeds expected to be
used for working capital, capital expenditures and share repurchases. Borrowings
will bear interest at either the bank's base rate or LIBOR plus an additional
amount ranging from 0.35% to 0.90% per annum, adjusted quarterly based on our
performance (0.50% at February, 2007). We will also be required to pay a
commitment fee ranging from 0.06% to 0.18% per annum for unused capacity.

This new agreement eliminates the capital expenditures, net worth and current
ratio requirements from the previous Credit Agreement and requires quarterly
compliance with respect to fixed charge coverage and leverage ratios.

NOTE 5 - LEASES:

We lease the majority of our office space and retail store locations, certain
distribution centers, transportation equipment and other equipment under various
noncancellable operating leases. The leases have varying terms and expire at
various dates through 2029 and 2025 for capital leases and operating leases,
respectively. Store leases typically have initial terms of between 10 and 15
years, with two to four optional renewal periods of five years each. Some leases
require the payment of contingent rent that is based upon store sales above
agreed upon sales levels for the year. The sales levels vary for each store and
are established in the lease agreements. Generally, most of the leases also
require that we pay associated taxes, insurance and maintenance costs.

Total rent expense for fiscal 2006, 2005 and 2004 was approximately $104.3
million, $83.3 million and $68.0 million respectively. Total contingent rent
expense for fiscal 2006, 2005, and 2004 was insignificant.

                                       43



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Future minimum payments, by year and in the aggregate, under leases with initial
or remaining terms of one year or more consist of the following (in thousands):

                                                   CAPITAL       OPERATING
                                                    LEASES         LEASES
                                                   --------       --------
      2007 ..................................      $  1,330       $103,816
      2008 ..................................           925         99,964
      2009 ..................................           578         94,067
      2010 ..................................           403         89,011
      2011 ..................................           180         84,532
      Thereafter ............................         2,794        495,993
                                                   --------       --------
      Total minimum lease payments ..........         6,210       $967,383
                                                                  ========
      Amount representing interest ..........        (2,337)
                                                   --------
      Present value of minimum lease payments         3,873
      Less:  current portion ................        (1,065)
                                                   --------
      Long-term capital lease obligations ...      $  2,808
                                                   ========

Assets under capital leases were as follows (in thousands):

                                                     2006           2005
                                                   --------       --------
      Building and improvements .............       $ 1,581       $  3,181
      Computer software and hardware ........         4,306          2,996
      Less:  accumulated depreciation and
              amortization...................        (2,156)        (2,800)
                                                    -------        -------
                                                    $ 3,731       $  3,377
                                                    =======        =======


NOTE 6 - INCOME TAXES:

The provision for income taxes, consists of the following (in thousands):

                                         2006           2005           2004
                                       --------       --------       --------
  Current tax expense:
     Federal ....................      $ 54,022       $ 56,917       $ 38,488
     State ......................         3,832          4,961          2,191
                                       --------       --------       --------
       Total current ............        57,854         61,878         40,679
                                       --------       --------       --------

  Deferred tax expense (benefit):
     Federal ....................        (2,525)       (10,513)        (3,800)
     State ......................        (1,005)        (2,222)          (842)
                                       --------       --------       --------
       Total deferred ...........        (3,530)       (12,735)        (4,642)
                                       --------       --------       --------
  Total provision ...............      $ 54,324       $ 49,143       $ 36,037
                                       ========       ========       ========

                                       44



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the deferred tax assets and liabilities are as follows (in thousands):

                                                          2006           2005
                                                        --------       --------
Current tax assets:
   Inventory valuation .............................    $  6,485       $  5,860
   Accrued employee benefit costs ..................       7,803          6,775
   Other ...........................................      10,463          4,649
                                                        --------       --------
                                                          24,751         17,284
                                                        --------       --------
Current tax liabilities:
   Inventory basis difference ......................     (13,273)        (6,205)
   Other ...........................................        (118)            --
                                                        --------       --------
                                                         (13,391)        (6,205)
                                                        --------       --------
Net current tax asset ..............................    $ 11,360       $ 11,079
                                                        ========       ========

Non-current tax assets:
   Capital lease obligation basis difference .......    $    923       $    866
   Rent expenses in excess of cash payments required      10,088         10,041
   Deferred compensation ...........................       3,453          1,203
   Other ...........................................       1,359          1,052
                                                        --------       --------
                                                          15,823         13,162
                                                        --------       --------
Non-current tax liabilities:
   Depreciation ....................................      (4,225)        (4,915)
   Capital lease assets basis difference ...........        (636)          (662)
   Other ...........................................        (183)           (55)
                                                        --------       --------
                                                          (5,044)        (5,632)
                                                        --------       --------
Net non-current tax asset (liability) ..............    $ 10,779       $  7,530
                                                        ========       ========

We have evaluated the need for a valuation allowance for all or a portion of the
deferred tax assets and we believe that all of the deferred tax assets will more
likely than not be realized through future earnings.

A reconciliation of the provision for income taxes to the amounts computed at
the federal statutory rate is as follows (in thousands):


                                                           2006          2005          2004
                                                         --------      --------      --------
                                                                            
Tax provision at statutory rate ...................      $ 50,867      $ 47,173      $ 35,037
Tax effect of:
   State income taxes, net of federal tax benefits          1,837         1,780           876
   Permanent differences ..........................         1,620           190           154
   Other ..........................................            --            --           (30)
                                                         --------      --------      --------
                                                         $ 54,324      $ 49,143      $ 36,037
                                                         ========      ========      ========



NOTE 7 - CAPITAL STOCK:

The authorized capital stock of the Company consists of common stock and
preferred stock. The Company is authorized to issue 100,000,000 shares of Common
Stock. The Company is also authorized to issue 40,000 shares of Preferred Stock,
with such designations, rights and preferences as may be determined from time to
time by the Board of Directors.

                                       45



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - COMPREHENSIVE INCOME:

Comprehensive income for each fiscal year is as follows (in thousands):

                                             2006          2005          2004
                                           --------      --------      --------
Net income - as reported ..............    $ 91,008      $ 85,669      $ 64,069
Foreign currency translation adjustment         (11)          (11)           --
                                           --------      --------      --------
Comprehensive income ..................    $ 90,997      $ 85,658      $ 64,069
                                           ========      ========      ========

NOTE 9 - NET INCOME PER SHARE:

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

                                                            2006
                                             ----------------------------------
                                               NET                     PER SHARE
                                             INCOME        SHARES       AMOUNT
                                             -------      -------      --------
Basic net income per share:
     Net income .......................      $91,008       40,016      $   2.27
     Dilutive stock options outstanding           --        1,044         (0.05)
                                             -------      -------      --------
Diluted net income per share ..........      $91,008       41,060      $   2.22
                                             =======      =======      ========


                                                            2005
                                             ----------------------------------
                                               NET                     PER SHARE
                                             INCOME        SHARES       AMOUNT
                                             -------      -------      --------
Basic net income per share:
     Net income .......................      $85,669       39,062      $   2.19
     Dilutive stock options outstanding           --        1,918         (0.10)
                                             -------      -------      --------
Diluted net income per share ..........      $85,669       40,980      $   2.09
                                             =======      =======      ========


                                                            2004
                                             ----------------------------------
                                               NET                     PER SHARE
                                             INCOME        SHARES       AMOUNT
                                             -------      -------      --------
Basic net income per share:
     Net income .......................      $64,069       38,148      $   1.68
     Dilutive stock options outstanding           --        2,541         (0.11)
                                             -------      -------      --------
Diluted net income per share ..........      $64,069       40,689      $   1.57
                                             =======      =======      ========


Anti-dilutive stock options excluded from the above calculations totaled
217,118, 19,853 and 53,559 in 2006, 2005 and 2004 respectively.

NOTE 10 - RETIREMENT BENEFIT PLANS:

We have a defined contribution benefit plan, the Tractor Supply Company 401(k)
Retirement Savings Plan (the "Plan"), which provides retirement and other
benefits for our employees. Employees become eligible at the first quarterly
entry period following their fulfillment of the eligibility requirements. To be
eligible, an employee must be at least 21 years of age, have completed 12 months
of employment, and performed 1,000 hours of service in a year of service as
defined by the Plan. We match (in cash) 100% of the employee's elective
contributions up to 3% of the employee's eligible compensation plus 50% of the
employee's elective contributions from 3% to 6% of the employee's eligible
compensation. In no event shall the total Company match made on behalf of the
employee exceed 4.5% of the employee's eligible compensation. All current
contributions are immediately 100% vested. Company contributions in years prior
to 2000 did not vest immediately and accordingly, as certain employees leave
employment with the Company, they may forfeit a portion of their employer match.
Company contributions, net of forfeitures, to the Plan during fiscal 2006, 2005
and 2004, were approximately $2,278,000, $1,805,000 and $1,772,000,
respectively.

                                       46



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


We offer, through a deferred compensation program, the opportunity for certain
qualifying employees to elect a deferral of up to 40% of their annual base
salary and up to 100% of their annual incentive bonus under their respective
incentive bonus programs. To be eligible for the salary deferral, each
participant must contribute the maximum amount of salary to the Tractor Supply
Company 401(k) Retirement Savings Plan subject to the Company's match. Under the
deferred compensation program, the participants' salary deferral is matched by
the Company, 100% on the first $3,000 of base salary contributed and 50% on the
next $3,000 of base salary contributed limited to a maximum annual matching
contribution of $4,500. Each participant's account earns simple annual interest
at the prime rate as in effect on January 1 each year. Each participant is fully
vested in all amounts credited to their deferred compensation account. Payments
under the program, which are made in cash and paid in ten annual installments or
in a single lump sum payment at the election of the participant, are made within
30 days following the earlier of the participant's (i) death, (ii) retirement,
(iii) total and permanent disability, (iv) separation from service, or (v) some
other date designated by the participant at the time of the initial deferral.
The Company's contributions, including accrued interest, were $403,305, $257,000
and $173,000 for fiscal 2006, 2005 and 2004, respectively.

NOTE 11 - MOVE OF CORPORATE FACILITY:

In July 2004, the Company relocated its existing Store Support Center to
consolidate multiple headquarter facilities within one facility. The Company
recognized incremental after-tax costs of approximately $2.1 million primarily
related to remaining facility and technology lease obligations and other moving
costs.

NOTE 12 - COMMITMENTS AND CONTINGENCIES:

CONSTRUCTION COMMITMENTS

We had commitments for new store construction projects totaling approximately
$7.6 million at December 30, 2006.

LITIGATION

We are involved in various litigation matters arising in the ordinary course of
business. After consultation with legal counsel, we expect these matters will be
resolved without material adverse effect on our consolidated financial position
or results of operations. Any estimated loss related to such matters has been
adequately provided in accrued liabilities to the extent probable and reasonably
estimable. It is possible, however, that future results of operations for any
particular quarterly or annual period could be materially affected by changes in
circumstances relating to these proceedings.

NOTE 13 - SUBSEQUENT EVENTS:

In February 2007, we entered into a new Senior Credit Facility with largely the
same lender group as under the Credit Agreement. The new Senior Credit Facility
provides for borrowings up to $250 million (with sublimits of $75 million and
$10 million for letters of credit and swingline loans, respectively). This
agreement is unsecured and has a five-year term, with proceeds expected to be
used for working capital, capital expenditures and share repurchases. Borrowings
will bear interest at either the bank's base rate or LIBOR plus an additional
amount ranging from 0.35% to 0.90% per annum, adjusted quarterly based on our
performance. We will also be required to pay a commitment fee ranging from 0.06%
to 0.18% per annum for unused capacity. This new agreement eliminates the
capital expenditures, net worth and current ratio requirements from the previous
Credit Agreement and requires quarterly compliance with respect to fixed charge
coverage and leverage ratios.

Also in February 2007, our Board of Directors authorized a share repurchase
program which provides for repurchase of up to $250 million of the Company's
outstanding stock over an approximate three-year period. 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 will be held in treasury. The program may be limited or terminated at any
time without prior notice.

                                       47



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 - IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS:

SHARE-BASED PAYMENTS
In December 2004, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 123R, "Share-Based Payment" ("SFAS 123R"). SFAS 123R is a revision
of SFAS 123 and supersedes APB 25. Among other items, SFAS 123R eliminates the
use of the intrinsic value method of accounting and requires companies to
recognize the cost of employee services received in exchange for awards of
equity instruments, based on the grant date fair value of those awards. Pro
forma disclosure is no longer an alternative under the new standard. We adopted
SFAS 123R in fiscal 2006, as required (see Note 2 to the Consolidated Financial
Statements for further information).

HOW TAXES COLLECTED FROM CUSTOMERS AND REMITTED TO GOVERNMENTAL AUTHORITIES
SHOULD BE PRESENTED IN THE INCOME STATEMENT
In March 2006, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF Issue No. 06-3, "How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement (That Is,
Gross Versus Net Presentation)", which allows companies to adopt a policy of
presenting taxes in the income statement on either a gross or net basis. Taxes
within the scope of this EITF would include taxes that are imposed on a revenue
transaction between a seller and a customer, for example, sales taxes, use
taxes, value-added taxes, and some types of excise taxes. EITF 06-3 is effective
for interim and annual reporting periods beginning in fiscal 2007. EITF 06-3
will not impact the method for recording and reporting these sales taxes in our
Consolidated Financial statements as our policy is to exclude all such taxes
from revenue.

ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES
In June 2006, the Financial Accounting Standards Board issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement No. 109" ("FIN 48") to create a single model to
address accounting for uncertainty in tax positions. This Interpretation
clarifies the accounting for uncertainty in income taxes recognized in the
financial statements in accordance with FASB Statement No. 109, Accounting for
Income Taxes. This Interpretation prescribes the minimum recognition threshold a
tax position is required to meet before being recognized in the financial
statements. Tax positions that meet a "more-likely-than-not" recognition
threshold should be measured in order to determine the tax benefit to be
recognized. We will adopt FIN 48 in fiscal 2007, as required. We currently
estimate a charge to retained earnings of approximately $2 million to be
recognized as the cumulative effect of adoption. Additionally, we anticipate the
adoption of this pronouncement to increase our effective income tax rate in
fiscal 2007 by approximately 60 basis points.

                                       48






ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
-------  ---------------------------------------------------------------

None

ITEM 9A. CONTROLS AND PROCEDURES
-------- -----------------------

EVALUATION OF 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) of the 1934 Act, as of December 30,
2006. Based on this evaluation, our principal executive officer and principal
financial officer concluded that, as of December 30, 2006, our disclosure
controls and procedures were effective to ensure that information required to be
disclosed by us in the reports that we file or submit under the 1934 Act is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our assessment of the effectiveness of our internal control over financial
reporting as of December 30, 2006 and the attestation report of Ernst & Young
LLP on our assessment of our internal control over financial reporting are
contained on pages 27 and 28, respectively, of this report.

CHANGE IN 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.

ITEM 9B. OTHER INFORMATION
-------- -----------------

None

                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
-------- ------------------------------------------------------

The information set forth under the caption "Executive Officers of the
Registrant" in Part I of this Form 10-K is incorporated herein by reference.

The information set forth under the captions "Corporate Governance - Code of
Ethics," "Item 1: Election of Directors," "Board Meetings and Committees," and
"Section 16(a) Beneficial Ownership Reporting Compliance" in our Proxy Statement
for our Annual Meeting of Stockholders to be held on May 2, 2007 is incorporated
herein by reference.

ITEM 11. EXECUTIVE COMPENSATION
-------- ----------------------

The information set forth under the captions "Corporate Governance -
Compensation Committee Interlock and Insider Participation," "Compensation of
Directors", "Executive Compensation", "Compensation Discussion and Analysis",
"Summary Compensation Table", "Non-Qualified Deferred Compensation", "Grants of
Plan-Based Awards", "Outstanding Equity Awards At End of Fiscal Year", "Option
Exercises and Stock Vested Table", "Potential Payments Upon Termination or
Change in Control", and "Stock Performance Chart" in our Proxy Statement for our
Annual Meeting of Stockholders to be held on May 2, 2007 is incorporated herein
by reference.

                                       49




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS
-------- ------------------------------------------------------------------

The information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" in our Proxy Statement for our Annual Meeting
of Stockholders to be held on May 2, 2007 is incorporated herein by reference.

Following is a summary of our equity compensation plans as of December 30, 2006,
under which equity securities are authorized for issuance, aggregated as
follows:


                                      NUMBER OF SECURITIES TO BE      WEIGHTED AVERAGE
                                        ISSUED UPON EXERCISE OF       EXERCISE PRICE OF      NUMBER OF SECURITIES
                                          OUTSTANDING OPTIONS,      OUTSTANDING OPTIONS,      REMAINING AVAILABLE
PLAN CATEGORY                            WARRANTS, AND RIGHTS        WARRANTS AND RIGHTS      FOR FUTURE ISSUANCE
-------------                            --------------------        -------------------      -------------------

EQUITY COMPENSATION PLANS APPROVED
BY SECURITY HOLDERS:
----------------------------------
                                                                                          
   2006 Stock Incentive Plan ........            23,130                   $   43.08                2,736,971
   2000 Stock Incentive Plan ((1)) ..         1,951,225                       31.33                       --
   1994 Stock Option Plan ((1)) .....           419,486                       18.78                       --
   Employee Stock Purchase Plan ((2))                --                          --                3,346,057
   Equity Compensation Plans not
     approved by security holders ...                --                          --                       --
                                              ---------                   ---------                ---------

Total ...............................         2,393,841                   $   29.25                6,083,028
                                              =========                   =========                =========



-------------------
(1)     The 2000 Stock Incentive Plan was superseded in May 2006. The 1994 Stock
        Option Plan expired in February 2004.
(2)     Represents shares available as of December 31, 2006.

The information set forth in Note 2 to the "Notes to Consolidated Financial
Statements" contained in this Report, provides further information with respect
to the material features of each plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
         INDEPENDENCE
-------- ------------------------------------------------------------

The information set forth under the captions "Item 1 - Election of Directors",
"Corporate Governance" and "Related-Party Transactions" in our Proxy Statement
for our Annual Meeting of Stockholders to be held on May 2, 2007 is incorporated
herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
-------- --------------------------------------

The information set forth under the caption "Item 2 - Ratification of
Reappointment of Independent Auditor" in our Proxy Statement for our Annual
Meeting of Stockholders to be held on May 2, 2007, is incorporated herein by
reference.

                                       50




                                     PART IV


ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
-------- ------------------------------------------

(a)(1)   FINANCIAL STATEMENTS

         See Consolidated Financial Statements under Item 8 on pages 25 through
         48 of this Report.

(a)(2)   FINANCIAL STATEMENT SCHEDULES

         None

         Financial statement schedules have been omitted because they are not
         applicable or because the required information is otherwise furnished.

(a)(3)   EXHIBITS

         The exhibits listed in the Index to Exhibits, which appears on pages 53
         through 57 of this Form 10-K, are incorporated herein by reference or
         filed as part of this Form 10-K.

                                       51





                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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:  February 28, 2007              By: /s/ Anthony F. Crudele
                                           -------------------------------------
                                           Anthony F. Crudele
                                           Senior Vice President-Chief Financial
                                           Officer and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.




        SIGNATURE                          TITLE                           DATE
        ---------                          -----                           ----

                                                                
  /s/ Anthony F. Crudele           Senior Vice President - Chief      February 28, 2007
  ---------------------------      Financial Officer and Treasurer
  Anthony F. Crudele               (Principal Financial and
                                   Accounting Officer)

  /s/ James F. Wright              President and Chief Executive     February 28, 2007
  ---------------------------      Officer and Director
  James F. Wright                  (Principal Executive Officer)

  /s/ Joseph H. Scarlett, Jr.      Chairman of the Board             February 28, 2007
  ---------------------------
  Joseph H. Scarlett, Jr.

  /s/ Jack C. Bingleman            Director                          February 28, 2007
  ---------------------------
  Jack C. Bingleman

  /s/ S.P. Braud                   Director                          February 28, 2007
  ---------------------------
  S.P. Braud

  /s/ Cynthia T. Jamison           Director                          February 28, 2007
  ---------------------------
  Cynthia T. Jamison

  /s/Gerard E. Jones               Director                          February 28, 2007
  ---------------------------
  Gerard E. Jones

  /s/ Joseph D. Maxwell            Director                          February 28, 2007
  ---------------------------
   Joseph D. Maxwell

  /s/ Edna K. Morris               Director                          February 28, 2007
  ---------------------------
  Edna K. Morris

  /s/ Sam K. Reed                  Director                          February 28, 2007
  ---------------------------
  Sam K. Reed

  /s/ Joe M. Rodgers               Director                          February 28, 2007
  ---------------------------
  Joe M. Rodgers


                                       52





                                  EXHIBIT INDEX

        3.1     Restated Certificate of Incorporation, as amended, of the
                Company, filed with the Delaware Secretary of State on February
                14, 1994 (filed as Exhibit 4.1 to Registrant's Registration
                Statement on Form S-8, Registration No. 333-102768, filed with
                the Commission on January 28, 2003. and incorporated herein by
                reference).

        3.2     Certificate of Amendment of the Restated Certificate of
                Incorporation, as amended, of the Company, filed with the
                Delaware Secretary of State on April 28, 1995 (filed as Exhibit
                4.2 to Registrant's Registration Statement on Form S-8,
                Registration No. 333-102768, filed with the Commission on
                January 28, 2003, and incorporated herein by reference).

        3.3     Certificate of Amendment of the Restated Certificate of
                Incorporation, as amended, of the Company, filed with the
                Delaware Secretary of State on May 13, 1994 (filed as Exhibit
                4.3 to Registrant's Registration Statement on Form S-8,
                Registration No. 333-102768, filed with the Commission on
                January 28, 2003, and incorporated herein by reference).

        3.4     Certificate of Amendment of the Restated Certificate of
                Incorporation, as amended, of the Company (filed as Exhibit 3.1
                to Registrant's Quarterly Report on Form 10-Q, filed with the
                Commission on May 3, 2005, Commission File No. 000-23314, and
                incorporated herein by reference)

        3.5     Amended and Restated By-laws of the Company as currently in
                effect (filed as Exhibit 3.7 to Registrant's Registration
                Statement on Form S-1, Registration No. 33-73028, filed with the
                Commission on December 17, 1993, and incorporated herein by
                reference).

        3.6     Amendment No. 1 to Amended and Restated By-Laws (filed as
                Exhibit 3.5 to Registrant's Quarterly Report on Form 10-Q, filed
                with the Commission on August 4, 2004, Commission File No.
                000-23314, and incorporated herein by reference)

        3.7     Amendment No. 2 to Amended and Restated By-Laws (filed as
                Exhibit 3.2 to Registrant's Quarterly Report on Form 10-Q, filed
                with the Commission on May 3, 2005, Commission File No.
                000-23314, and incorporated herein by reference)

        4.1     Form of Specimen Certificate representing the Company's Common
                Stock, par value $.008 per share (filed as Exhibit 4.2 to
                Amendment No. 1 to Registrant's Registration Statement on Form
                S-1, Registration No. 33-73028, filed with the Commission on
                January 31, 1994, and incorporated herein by reference).

        10.1    Indenture of Lease, dated as of January 1, 1986, between the
                Company and Joseph D. Maxwell and Juliann K. Maxwell (relating
                to Nashville, Tennessee store) (filed as Exhibit 10.18 to
                Registrant's Registration Statement on Form S-1, Registration
                No. 33-73028, filed with the Commission on December 17, 1993,
                and incorporated herein by reference).

        10.2    Tractor Supply Company 1994 Stock Option Plan (filed as Exhibit
                10.28 to Registrant's Registration Statement on Form S-1,
                Registration No. 33-73028, filed with the Commission on December
                17, 1993, and incorporated herein by reference).+

        10.3    Amendment to the Tractor Supply Company 1994 Stock Option Plan
                (filed as Exhibit 4.6 to Registrant's Registration Statement on
                Form S-8, Registration No. 333-10699, filed with the Commission
                on June 14, 1999, and incorporated herein by reference).+

                                       53




        10.4    Second Amendment to the Tractor Supply Company 1994 Stock Option
                Plan (filed as Exhibit 10.44 to Registrant's Annual Report on
                Form 10-K, filed with the Commission on March 24, 2000,
                Commission File No. 000-23314, and incorporated herein by
                reference).+

        10.5    Certificate of Insurance relating to the Medical Expense
                Reimbursement Plan of the Company (filed as Exhibit 10.33 to
                Registrant's Registration Statement on Form S-1, Registration
                No. 33-73028, filed with the Commission on December 17, 1993,
                and incorporated herein by reference).

        10.6    Summary Plan Description of the Executive Life Insurance Plan of
                the Company (filed as Exhibit 10.34 to Registrant's Registration
                Statement on Form S-1, Registration No. 33-73028, filed with the
                Commission on December 17, 1993, and incorporated herein by
                reference).+

        10.7    Tractor Supply Company 1996 Associate Stock Purchase Plan (filed
                as Exhibit 4.4 to Registrant's Registration Statement on Form
                S-8, Registration No. 333-10699, filed with the Commission on
                August 23, 1996, and incorporated herein by reference).+

        10.8    Tractor Supply Company Restated 401(k) Retirement Plan (filed as
                Exhibit 4.1 to Registrant's Registration Statement on Form S-3,
                Registration No. 333-35317, filed with the Commission on
                September 10, 1997, and incorporated herein by reference).+

        10.9    Second Amendment to Tractor Supply Company Restated 401(k)
                Retirement Plan (filed as Exhibit 10.57 to Registrant's Annual
                Report on Form 10-K, filed with the Commission on March 23,
                2001, Commission File No. 000-23314, and incorporated herein by
                reference).+

        10.10   Trust Agreement (filed as Exhibit 4.2 to Registrant's
                Registration Statement on Form S-3, Registration No. 333-35317,
                filed with the Commission on September 10, 1997, and
                incorporated herein by reference).

        10.11   Split-Dollar Agreement, dated January 27, 1998, between the
                Company and Joseph H. Scarlett, Jr., Tara Anne Scarlett and
                Andrew Sinclair Scarlett (filed as Exhibit 10.45 to Registrant's
                Annual Report on Form 10-K, filed with the Commission on March
                17, 1999, Commission File No. 000-23314, and incorporated herein
                by reference).

        10.12   Tractor Supply Company 2000 Stock Incentive Plan (filed as
                Exhibit 4.5 to Registrant's Registration Statement on Form S-8,
                Registration No. 333-102768, filed with the Commission on
                January 28, 2003 and incorporated herein by reference).+

        10.13   First Amendment to Lease Agreement, dated as of December 18,
                2000, between Tractor Supply Company and GOF Partners (filed as
                Exhibit 10.56 to Registrant's Annual Report on Form 10-K, filed
                with the Commission on March 23, 2001, Commission File No.
                000-23314, and incorporated herein by reference).

        10.14   Transportation Management Services Agreement between UPS
                Logistics Group, Inc. and Tractor Supply Company dated May 10,
                2001 (filed as Exhibit 10.58 to Registrant's Quarterly Report on
                Form 10-Q, filed with the Commission on August 14, 2001
                Commission File No. 000-23314, and incorporated herein by
                reference).

        10.15   Tractor Supply Company Executive Deferred Compensation Plan,
                dated November 11, 2001 (filed as Exhibit 10.58 to Registrant's
                Quarterly Report on Form 10-Q, filed with

                                       54




                the Commission on May 13, 2002, Commission File No. 000-23314,
                and incorporated herein by reference).

        10.16   Letter Agreement between Tractor Supply Company and the Joint
                Venture formed by Great American Group, Gordon Brothers Retail
                Partners, LLC and DJM Asset Management, dated December 14, 2001
                (filed as Exhibit 10.59 to Registrant's Quarterly Report on Form
                10-Q, filed with the Commission on May 13, 2002, Commission File
                No. 000-23314, and incorporated herein by reference).

        10.17   Amended Letter Agreement between the members of the joint
                venture comprised of Tractor Supply Company, Great American
                Group, Gordon Brothers Retail Partners, LLC and DJM Asset
                Management, dated January 8, 2002 (filed as Exhibit 10.60 to
                Registrant's Quarterly Report on Form 10-Q, filed with the
                Commission on May 13, 2002, Commission File No. 000-23314, and
                incorporated herein by reference).

        10.18   Second Amendment to Revolving Credit Agreement, dated as of
                September 30, 2004 by and among Tractor Supply Company, the
                banks party thereto, and Bank of America, N.A., as
                Administrative Agent, (filed as Exhibit 10.1 to Registrant's
                Quarterly Report on Form 10-Q, filed with the Commission on
                November 4, 2004, Commission File No. 000-23314, and
                incorporated herein by reference.)

        10.19   Change in Control Agreement, dated August 1, 2002, between
                Tractor Supply Company and Joseph H. Scarlett, Jr. (filed as
                Exhibit 10.76 to Registrant's Quarterly Report on Form 10-Q,
                filed with the Commission on November 12, 2002, Commission File
                No. 000-23314, and incorporated herein by reference).+

        10.20   Change in Control Agreement, dated August 1, 2002, between
                Tractor Supply Company and James F. Wright (filed as Exhibit
                10.77 to Registrant's Quarterly Report on Form 10-Q, filed with
                the Commission on November 12, 2002, Commission File No.
                000-23314, and incorporated herein by reference).+

        10.21   Change in Control Agreement, dated August 1, 2002, between
                Tractor Supply Company and Gerald W. Brase (filed as Exhibit
                10.78 to Registrant's Quarterly Report on Form 10-Q, filed with
                the Commission on November 12, 2002, Commission File No.
                000-23314, and incorporated herein by reference).+

        10.22   Change in Control Agreement, dated August 1, 2002, between
                Tractor Supply Company and Stanley L. Ruta (filed as Exhibit
                10.80 to Registrant's Quarterly Report on Form 10-Q, filed with
                the Commission on November 12, 2002, Commission File No.
                000-23314, and incorporated herein by reference).+

        10.23   Change in Control Agreement dated October 31, 2005 between
                Tractor Supply Company and Anthony F. Crudele (filed as Exhibit
                10.1 to Registrant's Quarterly Report on Form 10-Q, filed with
                the Commission on November 1, 2005, Commission File No.
                000-23314, and incorporated herein by reference).+

        10.24   Change in Control Agreement between Tractor Supply Company and
                Blake A. Fohl effective November 10, 2006 (filed as Exhibit 10.1
                to Registrant's Current Report on Form 8-K, filed with the
                Commission on November 17, 2006, Commission File No. 000-23314,
                and incorporated herein by reference).+

        10.25   Change in Control Agreement between Tractor Supply Company and
                Kimberly D. Vella effective November 10, 2006 (filed as Exhibit
                10.2 to Registrant's Current Report on

                                       55




                Form 8-K, filed with the Commission on November 17, 2006,
                Commission File No. 000-23314, and incorporated herein by
                reference).+

        10.26   Transition and Separation Agreement dated February 17, 2006
                between Tractor Supply Company and Calvin B. Massmann (filed as
                Exhibit 10.1 to Registrant's Current Report on Form 8-K,
                Registration No. 000-23314 filed with the Commission on February
                21, 2006, and incorporated herein by reference).+

        10.27   Lease Agreement dated September 26, 2003 between Tractor Supply
                Company and Duke Realty Limited (filed as Exhibit 10.52 to
                Registrant's Annual Report on Form 10-K, filed with the
                Commission on March 8, 2004, Commission File No. 000-23314, and
                incorporated herein by reference).+

        10.28   First Amendment, dated December 22, 2003 to the Tractor Supply
                Company 401(k) Retirement Savings Plan (filed as Exhibit 10.53
                to Registrant's Annual Report on Form 10-K, filed with the
                Commission on March 8, 2004, Commission File No. 000-23314, and
                incorporated herein by reference).+

        10.29   Lease Agreement dated January 22, 2004 between Tractor Supply
                Company and The Prudential Insurance Company of America (filed
                as Exhibit 10.54 to Registrant's Annual Report on Form 10-K,
                filed with the Commission on March 8, 2004, Commission File No.
                000-23314, and incorporated herein by reference).

        10.30   Tractor Supply Co. 2004 Cash Incentive Plan, effective April 15,
                2004 (filed as Exhibit 10.1 to Registrant's Quarterly Report on
                Form 10-Q, filed with the Commission on August 4, 2004,
                Commission File No. 000-23314, and incorporated herein by
                reference).

        10.31   Employment Agreement between Tractor Supply Company and James F.
                Wright effective July 12, 2004 (filed as Exhibit 10.2 to
                Registrant's Quarterly Report on Form 10-Q, filed with the
                Commission on August 4, 2004, Commission File No. 000-23314, and
                incorporated herein by reference).+

        10.32   Form of Stock Option Agreement (filed as Exhibit 10.46 to
                Registrant's Annual Report on Form 10-K, filed with the
                Commission on March 10, 2005, Commission File No. 000-23314, and
                incorporated herein by reference).+

        10.33   Chairman of the Board Bonus Plan (filed as Exhibit 10.1 to
                Registrant's Current Report on Form 8-K, filed with the
                Commission on April 25, 2005, Commission File No. 000-23314, and
                incorporated herein by reference).+

        10.34   Form of Stock Option Agreement (filed as Exhibit 10.44 to
                Registrant's Annual Report on Form 10-K, filed with the
                Commission on March 16, 2006, Commission File No. 000-23314, and
                incorporated herein by reference.)+

        10.35   First Amendment, dated April 27, 2006 to the 2006 Stock
                Incentive Plan (filed as Exhibit 99.1 to Registrant's Current
                Report on Form 8-K, filed with the Commission on April 27, 2006,
                Commission File No. 000-23314, and incorporated herein by
                reference).+

        10.36*  Third Amendment to the Tractor Supply Company 1994 Stock Option
                Plan, effective February 8, 2007. +

        10.37*  Second Amendment to the Tractor Supply Company 2000 Stock
                Incentive Plan, effective February 8, 2007. +

                                       56




        10.38*  Second Amendment to the Tractor Supply Company 2006 Stock
                Incentive Plan, effective February 8, 2007.+

        10.39*  Form of Stock Option Agreement.+

        10.40*  Revolving Credit Agreement, dated as of February 22, 2007 by and
                among Tractor Supply Company, the banks party thereto, and Bank
                of America, N.A., as Administrative Agent.

        23.1*   Consent of Ernst & Young LLP

        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.
-----
  *       Filed herewith
  +       Management contract or compensatory plan or arrangement


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