Dollar General 2014 Annual Report Download - page 148

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Commitments and contingencies (Continued)
Total minimum payments for capital leases as of January 30, 2015 were $7.4 million, with a present
value of $5.9 million at January 30, 2015. The gross amount of property and equipment recorded under
capital leases and financing obligations at both January 30, 2015 and January 31, 2014, was
$29.8 million. Accumulated depreciation on property and equipment under capital leases and financing
obligations at January 30, 2015 and January 31, 2014, was $10.6 million and $8.7 million, respectively.
Rent expense under all operating leases is as follows:
(In thousands) 2014 2013 2012
Minimum rentals(a) ....................... $776,103 $674,849 $599,138
Contingent rentals ........................ 9,099 12,058 15,150
$785,202 $686,907 $614,288
(a) Excludes amortization of leasehold interests of $5.8 million, $11.9 million and
$16.9 million included in rent expense for the years ended January 30, 2015, January 31,
2014, and February 1, 2013, 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. Approximately 3,950
individuals opted into the lawsuit, approximately 1,000 of whom have been dismissed for various
reasons, including failure to cooperate in discovery.
On April 2, 2012, the Company moved to decertify the class. The plaintiff’s response to that
motion was filed on May 9, 2012.
On October 22, 2012, the court entered a memorandum opinion granting the Company’s
decertification motion. On December 19, 2012, the court entered an order decertifying the matter and
stating that a separate order would be entered regarding the opt-in plaintiffs’ rights and plaintiff
Cynthia Richter’s individual claims. To date, the court has not entered such an order.
The parties agreed to mediate the matter, and the court informally stayed the action pending the
results of the mediation. Mediations were conducted in January, April and August 2013. On August 10,
2013, the parties reached a preliminary agreement, which was formalized and submitted to the court for
approval, to resolve the matter for up to $8.5 million. On November 24, 2014, the court entered an
order approving the settlement and dismissing the action. The Company deemed the settlement
probable and recorded such amount as the estimated expense in the second quarter of 2013. The
Company paid approximately $8.5 million in connection with the settlement of this matter in the fourth
quarter of 2014.
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