Dollar General 2010 Annual Report Download - page 158

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Commitments and contingencies (Continued)
Capital leases were discounted at an effective interest rate of approximately 6.3% at January 28,
2011. The gross amount of property and equipment recorded under capital leases and financing
obligations at January 28, 2011 and at January 29, 2010, was $31.0 million and $34.8 million,
respectively. Accumulated depreciation on property and equipment under capital leases and financing
obligations at January 28, 2011 and January 29, 2010, was $7.4 million and $6.9 million, respectively.
Rent expense under all operating leases is as follows:
(In thousands) 2010 2009 2008
Minimum rentals(a) ....................... $471,402 $407,379 $370,827
Contingent rentals ........................ 17,882 21,248 18,796
$489,284 $428,627 $389,623
(a) Excludes amortization of leasehold interests of $25.7 million, $37.2 million and
$40.9 million included in rent expense for the years ended January 28, 2011, January 29,
2010 and January 30, 2009, respectively.
Legal proceedings
On August 7, 2006, a lawsuit entitled Cynthia Richter, et al. v. Dolgencorp, Inc., et al. was filed in
the United States District Court for the Northern District of Alabama (Case No. 7:06-cv-01537-LSC)
(‘‘Richter’’) in which the plaintiff alleges that she and other current and former Dollar General store
managers were improperly classified as exempt executive employees under the Fair Labor Standards
Act (‘‘FLSA’’) and seeks to recover overtime pay, liquidated damages, and attorneys’ fees and costs. On
August 15, 2006, the Richter plaintiff filed a motion in which she asked the court to certify a
nationwide class of current and former store managers. The Company opposed the plaintiff’s motion.
On March 23, 2007, the court conditionally certified a nationwide class. On December 2, 2009, notice
was mailed to over 28,000 current or former Dollar General store managers, and approximately 3,860
individuals opted into the lawsuit. In September 2010, the court entered a scheduling order that
governs, among other things, deadlines for fact discovery (September 30, 2011) and the Company’s
anticipated decertification motion (August 15, 2011). The court’s scheduling order establishes a trial
date of February 12, 2012.
On July 20, 2010, a lawsuit was filed in the judicial district in which the Richter matter is pending
in which a former store manager made allegations substantially similar to those raised in Richter and
sought to represent a nationwide class of current and former store managers (Lisa Beard v. Dollar
General Corporation, et al., Case No. 7:10-cv-01956-SLB). The plaintiff in Beard seeks to recover
overtime pay, liquidated damages, and attorneys’ fees and costs. On March 4, 2011, the Beard plaintiff
moved to amend her complaint to strike all class allegations and notified the court of her withdrawal of
the consent forms previously filed by approximately 95 opt-in plaintiffs. The plaintiff’s motion to amend
was granted on March 7, 2011, which had the effect of rendering the Beard action a single-plaintiff
case. If the case remains a single-plaintiff case, it is extremely unlikely that the case could have a
material impact on the Company’s financial statements as a whole.
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