Family Dollar 2012 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2012 Family Dollar annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

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 $3.2 million in fiscal 2012,
$4.0 million in fiscal 2011 and $4.2 million in fiscal 2010, 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.
11. Commitments and Contingencies:
Operating leases and other contractual obligations
The majority of the rental expense incurred by the Company relates to its stores and the majority of its stores are
leased under agreements that generally have an initial term of five or ten years and provide for fixed rentals.
Additionally, most of the Company’s leases require additional payments based upon a percentage of sales,
property taxes, insurance premiums, or common area maintenance charges. Rental expenses on all operating
leases, both cancelable and non-cancelable, for fiscal 2012, fiscal 2011 and fiscal 2010 were as follows:
(in thousands) Fiscal 2012 Fiscal 2011 Fiscal 2010
Minimum rentals, net of minor sublease rentals ............. $481,871 $429,942 $399,319
Contingent rentals .................................... 8,468 7,862 7,590
$490,339 $437,804 $406,909
Aggregate minimum annual rentals under operating leases as of August 25, 2012 are as follows:
(in thousands)
Minimum
Rentals
Fiscal 2013 ..................................................... $ 431,076
Fiscal 2014 ..................................................... 389,754
Fiscal 2015 ..................................................... 341,291
Fiscal 2016 ..................................................... 291,793
Fiscal 2017 ..................................................... 244,843
Thereafter ...................................................... 1,046,516
Total minimum rentals ........................................ $2,745,273
Additionally, the Company has outstanding standby letters of credit (which are primarily renewed on an annual
basis), of which the majority are used as surety for future premium and deductible payments to the Company’s
workers’ compensation and general liability insurance carrier. The following table shows the Company’s other
commercial commitments as of August 25, 2012:
(in thousands)
Total Amounts
Committed
Standby letters of credit .......................................... $26,054
Surety bonds ................................................... 46,529
Total ..................................................... $72,583
58