Family Dollar 2013 Annual Report Download - page 38

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Contractual Obligations and Other Commercial Commitments
The following table shows our obligations and commitments to make future payments under contractual
obligations at the end of fiscal 2013.
Payments Due During
(in thousands)
Contractual Obligations Total
Fiscal
2014
Fiscal
2015
Fiscal
2016
Fiscal
2017
Fiscal
2018 Thereafter
Long-term debt ......... $ 517,600 $ 16,200 $ 16,200 $185,200 $ — $ — $ 300,000
Interest ............... 139,177 26,265 25,416 19,996 15,000 15,000 37,500
Merchandise letters of
credit ............... 75,589 75,589 ———— —
Operating leases ........ 3,561,136 515,254 474,601 426,788 381,196 328,527 1,434,770
Construction
obligations .......... 38,135 38,135 ———— —
Minimum royalties(1) .... 3,500 2,800 700 — — — —
Total ................. $4,335,137 $674,243 $516,917 $631,984 $396,196 $343,527 $1,772,270
(1) Minimum royalty payments related to an exclusive agreement to sell certain branded merchandise.
As of August 31, 2013, we had $30.2 million in liabilities related to our uncertain tax positions. At this time,
we cannot reasonably determine the timing of any payments related to these liabilities, except for $4.8 million,
which were classified as current liabilities and may become payable within the next 12 months. See Note 10 to
the Consolidated Financial Statements included in this Report for more information on our tax liabilities.
The following table shows our other commercial commitments at the end of fiscal 2013.
Other Commercial Commitments (in thousands)
Total Amounts
Committed
Standby letters of credit .......................................... $48,767
Surety bonds ................................................... 37,036
Total ..................................................... $85,803
A substantial portion of the outstanding amount of standby letters of credit (which are primarily renewed on
an annual basis) is used as surety for future premium and deductible payments to our workers’ compensation and
general liability insurance carrier. We accrue for these future payment liabilities as described in the “Critical
Accounting Policies” section of this discussion.
We issue inventory purchase orders in the normal course of business, which represent purchase
authorizations that can be canceled. We do not consider purchase orders to be firm inventory commitments;
therefore, they are excluded from the table above. If we choose to cancel a purchase order, we may be obligated
to reimburse the vendor for unrecoverable outlays incurred prior to cancellation.
Off Balance Sheet Arrangements
The Company does not have any material off balance sheet arrangements other than the operating leases
included in the “Contractual Obligations and Other Commercial Commitments” section above.
Recent Accounting Pronouncements
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards
Update 2013-02 “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”
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