Dollar General 2013 Annual Report Download - page 152

Download and view the complete annual report

Please find page 152 of the 2013 Dollar General annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 182

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Commitments and contingencies (Continued)
accounting definition of a Variable Interest Entity (‘‘VIE’’). The Company is not the primary
beneficiary of these VIEs and, accordingly, has not included these entities in its consolidated financial
statements. Certain leases contain restrictive covenants that, individually, are not material to the
Company. As of January 31, 2014, the Company is not aware of any material violations of such
covenants.
In January 2014, the Company sold 233 store locations for cash and concurrent with the sale
transaction, the Company leased the properties back for a period of 15 years. The transaction resulted
in cash proceeds of approximately $281.6 million and a deferred gain of $67.2 million which will be
recognized as a reduction of rent expense over the 15-year initial lease term of the properties.
In January 1999, the Company sold its DC located in Ardmore, Oklahoma for cash and concurrent
with the sale transaction, the Company leased the property back for a period of 23 years. The
transaction is accounted for as a financing obligation rather than a sale as a result of, among other
things, the lessor’s ability to put the property back to the Company under certain circumstances. The
property and equipment, along with the related lease obligation associated with this transaction are
recorded in the consolidated balance sheets. In August 2007, the Company purchased a secured
promissory note (the ‘‘Ardmore Note’’) from an unrelated third party with a face value of $34.3 million
at the date of purchase which approximated the remaining financing obligation. The Ardmore Note
represents debt issued by the third party entity from which the Company leases the Ardmore DC and
therefore the Company holds the debt instrument pertaining to its lease financing obligation. Because a
legal right of offset exists, the Company is accounting for the Ardmore Note as a reduction of its
outstanding financing obligation in its consolidated balance sheets.
Future minimum payments as of January 31, 2014 for operating leases are as follows:
(In thousands)
2014 .................................................. $ 712,563
2015 .................................................. 665,193
2016 .................................................. 610,643
2017 .................................................. 554,413
2018 .................................................. 496,265
Thereafter ............................................. 2,699,755
Total minimum payments ................................... $5,738,832
Total minimum payments for capital leases as of January 31, 2014 were $8.7 million, with a present
value of $6.8 million at January 31, 2014. The gross amount of property and equipment recorded under
capital leases and financing obligations at both January 31, 2014 and February 1, 2013, was
$29.8 million. Accumulated depreciation on property and equipment under capital leases and financing
obligations at January 31, 2014 and February 1, 2013, was $8.7 million and $6.9 million, respectively.
75
10-K