Dollar Tree 2006 Annual Report Download - page 40

NOTE 4 – COMMITMENTS AND CONTINGENCIES
Operating Lease Commitments
Future minimum lease payments under noncancelable
stores and distribution center operating leases are
as follows:
2007 $284.2
2008 246.0
2009 207.2
2010 161.5
2011 110.6
Thereafter 167.5
Total minimum lease payments $1,177.0
The above future minimum lease payments
include amounts for leases that were signed prior to
Year Ended Year Ended Year Ended
February 3, 2007 January 28, 2006 January 29, 2005
Minimum rentals $261.8 $225.8 $200.7
Contingent rentals 0.9 0.7 0.9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
38 DOLLAR TREE STORES, INC. • 2006 ANNUAL REPORT
February 3, 2007 for stores that were not open as of
February 3, 2007.
Minimum rental payments for operating leases
do not include contingent rentals that may be paid
under certain store leases based on a percentage of
sales in excess of stipulated amounts. Future mini-
mum lease payments have not been reduced by
expected future minimum sublease rentals of $2.3
million under operating leases.
Minimum and Contingent Rentals
Rental expense for store and distribution center
operating leases (including payments to related
parties) included in the accompanying Consolidated
Statements of Operations are as follows:
January 28, 2006, and January 29, 2005, respectively.
Total future commitments under related party leases
are $1.4 million.
Freight Services
The Company has contracted outbound freight
services from various contract carriers with contracts
expiring through January 2010. The total amount of
these commitments is approximately $57.1 million,
of which approximately $38.6 million is committed
in 2007, $9.9 million is committed in 2008 and $8.6
million is committed in 2009.
Technology Assets
The Company has commitments totaling approxi-
mately $3.8 million to purchase store technology
assets for its stores during 2007.
Letters of Credit
In March 2001, the Company entered into a Letter
of Credit Reimbursement and Security Agreement.
The agreement provides $125.0 million for letters of
credit. In December 2004, the Company entered into
an additional Letter of Credit Reimbursement and
Non-Operating Facilities
The Company is responsible for payments under leases
for certain closed stores. The Company was also
responsible for payments under leases for two former
distribution centers whose leases expired in June 2005
and September 2005. The Company accounts for
abandoned lease facilities in accordance with SFAS
No. 146, Accounting for Costs Associated with Exit
or Disposal Activities. A facility is considered aban-
doned on the date that the Company ceases to use it.
On this date, the Company records an expense for
the present value of the total remaining costs for the
abandoned facility reduced by any actual or probable
sublease income. Due to the uncertainty regarding
the ultimate recovery of the future lease and related
payments, the Company recorded charges of $0.1
million, $0.3 million and $1.5 million in 2006, 2005
and 2004, respectively.
Related Parties
The Company also leases properties for six of its
stores from partnerships owned by related parties. The
total rental payments related to these leases were $0.5
million for each of the years ended February 3, 2007,