Dollar Tree 2009 Annual Report Download - page 41

Notes to Consolidated Financial Statements
Non-Operating Facilities
The Company is responsible for payments under
leases for certain closed stores. A facility is considered
abandoned 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,฀$0.6฀million฀and฀$0.1฀million฀in฀2009,฀2008฀and฀
2007,฀respectively.฀
Related Parties
The Company 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฀January฀30,฀2010,฀January฀31,฀
2009฀and฀February฀2,฀2008,฀respectively.฀Total฀future฀
commitments฀under฀related฀party฀leases฀are฀$2.5฀million.
Freight Services
The Company has contracted outbound freight services
from various contract carriers with contracts expiring
through฀scal฀2013.฀The฀total฀amount฀of฀these฀commit-
ments฀is฀approximately฀$296.2฀million,฀of฀which฀
approximately฀$99.2฀million฀is฀committed฀in฀2010,฀$85.8฀
million฀is฀committed฀in฀2011,฀$84.3฀million฀is฀committed฀
in฀2012฀and฀$26.9฀million฀is฀committed฀in฀2013.
Technology Assets
The Company has commitments totaling approximately
$2.4฀million฀to฀purchase฀store฀technology฀assets฀for฀its฀
stores฀during฀2010.
Letters of Credit
In฀March฀2001,฀the฀Company฀entered฀into฀a฀Letter฀
of Credit Reimbursement and Security Agreement.
The฀agreement฀provides฀$121.5฀million฀for฀letters฀of฀
credit.฀In฀December฀2004,฀the฀Company฀entered฀into฀
an additional Letter of Credit Reimbursement and
Security฀Agreement,฀which฀provides฀$50.0฀million฀for฀
letters of credit. Letters of credit under both of these
agreements are generally issued for the routine purchase
of฀imported฀merchandise฀and฀approximately฀$101.8฀
million was committed to these letters of credit at
January฀30,฀2010.฀As฀discussed฀in฀Note฀5,฀the฀Company฀
has฀$150.0฀million฀of฀available฀letters฀of฀credit฀included฀
in฀the฀$550.0฀million฀Unsecured฀Credit฀Agreement฀
(the฀Agreement)฀entered฀into฀on฀February฀20,฀2008.฀
As฀of฀January฀30,฀2010,฀there฀were฀no฀letters฀of฀credit฀
committed under the Agreement.
The฀Company฀also฀has฀approximately฀$15.0฀million฀
in stand-by letters of credit that serve as collateral for its
self-insurance฀programs฀and฀expire฀in฀scal฀2010.฀
Surety Bonds
The Company has issued various surety bonds that
primarily serve as collateral for utility payments at the
Company’s฀stores.฀The฀total฀amount฀of฀the฀commitment฀
is฀approximately฀$2.4฀million,฀which฀is฀committed฀
through฀various฀dates฀through฀scal฀2011.฀
Contingencies
In฀2006,฀a฀former฀store฀manager฀led฀a฀collective฀
action against the Company in Alabama federal court.
She claims that she and other store managers should
have฀been฀classied฀as฀non-exempt฀employees฀under฀
the Fair Labor Standards Act and received overtime
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:
(in millions)
Year Ended
January 30,
2010
Year฀Ended
January฀31,
฀2009฀
Year฀Ended
February฀2,
฀2008฀
Minimum rentals $ 349.9 ฀฀ $฀ 323.9฀ ฀฀ $฀ 295.4฀
Contingent rentals 1.0 ฀฀ ฀ (0.3) ฀฀ ฀ 1.2฀
฀฀฀DOLLAR฀TREE,฀INC.฀•฀2009฀Annual฀Report฀฀฀39