Dollar Tree 2010 Annual Report Download - page 42

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 $2.5 million, which is
committed through various dates through fi scal 2012.
Contingencies
In 2006, a former store manager fi led a collective action
against the Company in Alabama federal court. She
claims that she and other store managers should have
been classifi ed as non-exempt employees under the Fair
Labor Standards Act and received overtime compensa-
tion. The Court preliminarily allowed nationwide
(except California) notice to be sent to all store managers
employed for the three years immediately preceding
the fi ling of the suit. Approximately 265 individuals are
included in the collective action. The Court on its own
motion continued the case from its previously scheduled
July 2010 trial date. The Company’s motion to decertify
the collective action has been dismissed without
prejudice to refi le at a later date. Additional discovery,
pursuant to the Court’s direction, is presently ongoing.
There is no scheduled trial date. The Company will
continue to vigorously defend itself in this matter.
In 2007, two store managers fi led a class action
against the Company in California federal court,
claiming they and other California store managers
should have been classifi ed as non-exempt employees
under California and federal law. The Court has
allowed notice to be sent to all California store
managers employed since December 12, 2004, and a
class of approximately 184 individuals remains. The
Company fi led a motion to decertify the class which
was both granted and denied in part. The current
class was redefi ned by the Court in its ruling which
resulted in a signifi cant reduction in the number of
class members. The Court on its own continued a
previously scheduled March 2011 trial date. A pretrial
conference has been set for June 2011 at which time
Notes to Consolidated Financial Statements
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 29, 2011,
January 30, 2010, and January 31, 2009, 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 fi scal 2014. The total amount of
these commitments is approximately $288.8 million, of
which approximately $113.0 million is committed in
2011 and in 2012, $46.7 million is committed in 2013
and $16.1 million is committed in 2014.
Technology Assets
The Company has commitments totaling approximately
$5.9 million to purchase primarily store technology
assets for its stores during 2011.
Letters of Credit
The Company is a party to two Letter of Credit
Reimbursement and Security Agreements providing
$121.5 million and $50.0 million, respectively for
letters of credit. Letters of credit under both of
these agreements are generally issued for the routine
purchase of imported merchandise and approximately
$106.9 million was committed to these letters of
credit at January 29, 2011. As discussed in Note 5, the
Company also has $150.0 million of available letters
of credit included in the $550.0 million Unsecured
Credit Agreement (the Agreement) entered into in
2008. As of January 29, 2011, there were no letters of
credit committed under the Agreement.
The Company also has approximately $13.1 million
in stand-by letters of credit that serve as collateral for its
self-insurance programs and expire in fi scal 2011.
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 29, 2011
Yea r E nd ed
January 30, 2010
Yea r E nd ed
January 31, 2009
Minimum rentals $ 381.5 $ 349.9 $ 323.9
Contingent rentals 1.4 1.0 (0.3)
40 DOLLAR TREE, INC. ♦ 2010 Annual Report