Family Dollar 2010 Annual Report Download - page 57

Compensation deferral plans
The Company has a voluntary compensation deferral plan, under Section 401(k) of the Internal Revenue Code,
available to eligible employees. At the discretion of the Board of Directors, the Company makes contributions to
the plan which are allocated to participants, and in which they become vested, in accordance with formulas and
schedules defined by the plan. Company expenses for contributions to the plan were $4.2 million in fiscal 2010,
$3.2 million in fiscal 2009 and $2.8 million in fiscal 2008, and are included in SG&A on the Consolidated
Statements of Income.
The Company has a deferred compensation plan to provide certain key management employees the ability to
defer a portion of their base compensation and bonuses. The plan is an unfunded nonqualified plan. The deferred
amounts and earnings thereon are payable to participants, or designated beneficiaries, at either specified future
dates, or upon separation from service or death. The Company does not make contributions to this plan or
guarantee earnings.
10. Commitments and Contingencies:
Operating leases and other contractual obligations
Rental expenses on all operating leases, both cancelable and non-cancelable, for fiscal 2010, fiscal 2009 and
fiscal 2008 were as follows:
(in thousands) 2010 2009 2008
Minimum rentals, net of minor sublease rentals ............. $399,319 $382,530 $371,639
Contingent rentals .................................... 7,590 5,444 4,553
$406,909 $387,974 $376,192
The following table shows the Company’s obligations and commitments to make future payments under
contractual obligations, including future minimum rental payments required under operating leases that have
initial or remaining non-cancelable lease terms in excess of one year at the end of fiscal 2010:
Payments Due During the Period Ending
(in thousands)
Total
August
2011
August
2012
August
2013
August
2014
August
2015 ThereafterContractual Obligations
Long-term debt ............. $ 250,000 $ — $ 16,200 $ 16,200 $ 16,200 $ 16,200 $185,200
Interest .................... 65,141 13,387 12,609 11,760 10,911 10,063 6,411
Merchandise letters of credit . . . 217,417 217,417—————
Operating leases ............. 1,490,872 345,997 307,881 257,971 204,189 144,176 230,658
Construction obligations ...... 15,335 15,335—————
Minimum royalties(1) ......... 11,600 2,550 2,750 2,800 2,800 700 —
Total ...................... $2,050,365 $594,686 $339,440 $288,731 $234,100 $171,139 $422,269
(1) Minimum royalty payments related to an exclusive agreement to sell certain branded merchandise.
At the end of fiscal 2010, approximately $79.3 million of the merchandise letters of credit were included in
accounts payable on the Company’s Consolidated Balance Sheet. Most of the Company’s operating leases
provide the Company with an option to extend the term of the lease at designated rates.
As of August 28, 2010, the Company had $23.4 million in liabilities related to its uncertain tax positions. At this
time the Company cannot reasonably determine the timing of any payments related to these liabilities, except for
$5.2 million, which were classified as current liabilities and may become payable within the next 12 months. See
Note 8 above for more information on the Company’s tax liabilities.
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