Annual report pursuant to Section 13 and 15(d)

COMMITMENTS AND CONTINGENCIES

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COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Jan. 28, 2012
COMMITMENTS AND CONTINGENCIES [Abstract]  
COMMITMENTS AND CONTINGENCIES [Text Block]
NOTE 4 – COMMITMENTS AND CONTINGENCIES

Operating Lease Commitments
Future minimum lease payments under noncancelable store operating leases are as follows:
 
   
(in millions)
  
       
2012
   $ 452.9  
2013
     401.1  
2014
     337.5  
2015
     264.4  
2016
     182.1  
Thereafter
     291.0  
         
Total minimum lease payments
   $ 1,929.0  
 
The above future minimum lease payments include amounts for leases that were signed prior to January 28, 2012 for stores that were not open as of January 28, 2012.

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 minimum lease payments have not been reduced by expected future minimum sublease rentals of $1.6 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:

   
Year Ended
  
   
January 28,
    
January 29,
    
January 30,
  
(in millions)
  
2012
    
2011
    
2010
  
                   
Minimum rentals
   $ 421.8     $ 381.5     $ 349.9  
Contingent rentals
     1.8       1.4       1.0  
Related Parties
The Company leased 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 28, 2012, January 29, 2011, and January 30, 2010, respectively.  Total future commitments under the five remaining related party leases are $1.7 million.

Freight Services
The Company has contracted outbound freight services from various contract carriers with contracts expiring through fiscal 2014.  The total amount of these commitments is approximately $222.3 million, of which approximately $143.3 million is committed in 2012, $58.6 million in 2013 and $20.4 million is committed in 2014.
 
Technology Assets
The Company has commitments totaling approximately $8.9 million to purchase primarily store technology assets for its stores during 2012.

Telecom Contracts
The Company has contracted for telecommunication services with contracts expiring in 2014.  The total amount of these commitments is approximately $3.3 million.

Letters of Credit
The Company is a party to two Letter of Credit Reimbursement and Security Agreements providing $110.0 million and $75.0 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 $139.5 million was committed to these letters of credit at January 28, 2012.  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 28, 2012, there were no letters of credit committed under the Agreement.

The Company also has approximately $28.7 million in stand-by letters of credit that serve as collateral for its self-insurance programs and expire in fiscal 2012.

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 fiscal 2013.

Contingencies
In 2006, a former store manager filed a collective action against the Company in Alabama federal court.  She claims that she and other store managers should have been classified as non-exempt employees under the Fair Labor Standards Act and received overtime compensation.  The Court preliminarily allowed nationwide (except California) certification.  At present, approximately 265 individuals are included in the collective action.  The Company’s motion to decertify the collective action was dismissed without prejudice in 2010.  The Company filed another motion to decertify on February 29, 2012.  There is no scheduled trial date.

In 2009, 34 plaintiffs, filed a class action Complaint in a federal court in Virginia, alleging gender pay and promotion discrimination under Title VII.  In 2010, the case was dismissed with prejudice.  Plaintiffs appealed to the U.S. Court of Appeals for the Fourth Circuit.  The appeal has been fully briefed by the parties and oral arguments were conducted in January 2012.  The parties await a decision of the appellate court which is expected by late spring or summer of 2012.

In April 2011, a former assistant store manager, on behalf of himself and those similarly situated, instituted a class action in a California state court primarily alleging a failure by the Company to provide meal breaks, to compensate for all hours worked, and to pay overtime compensation.  The Company removed the case to federal court which denied Plaintiffs’ motion for remand of the case to state court.  The case presently awaits a scheduling order.  There is no trial date.

In June 2011, Winn-Dixie Stores, Inc. and various of its affiliates instituted suit in federal court in Florida alleging that the Company, in approximately 48 shopping centers in the state of Florida and five other states where Dollar Tree and Winn-Dixie are both tenants, is selling goods and products in Dollar Tree stores in violation of an exclusive right of Winn-Dixie to sell and distribute such items.  It seeks both monetary damages and injunctive relief.  At approximately the same time, Winn-Dixie also sued Dollar General, Inc. and Big Lots, Inc. making essentially the same allegations against them and seeking the same relief. The court consolidated the three cases and they are set for trial on May 7, 2012.

In the summer and fall of 2011 collective action lawsuits were filed against the Company in six federal courts by different assistant store managers, each alleging he or she was forced to work off the clock in violation of the Fair Labor Standards Act.  The suits were filed in Georgia, Colorado, Florida, Michigan, Illinois, and Maryland.  The Maryland case has since been dismissed.  In all of the remaining cases, plaintiffs also assert various state law claims for which they seek class treatment.  The Georgia suit seeks statewide class certification for those assistant managers similarly situated during the relevant time periods and the Florida, Colorado, Michigan and Illinois cases seek nationwide certifications for those assistant store managers similarly situated during the relevant time periods.  The Illinois case also includes a purported class of all other hourly store associates, making the same allegations on their behalf.  The Company has commenced its investigation and has filed motions to dismiss and motions to transfer venue to the Eastern District of Virginia in all cases.  No rulings on these motions have been made to date.  The Plaintiffs filed a motion with the federal court Multi-District Litigation Panel to consolidate all these and other related cases which motion was denied. To date, the only cases in which class certification motions have been filed is in the Illinois and Colorado actions.  None of the cases have been assigned a trial date.
 
The Company will vigorously defend itself in these matters.  The Company does not believe that any of these matters will, individually or in the aggregate, have a material effect on its business or financial condition.  The Company cannot give assurance, however, that one or more of these lawsuits will not have a material effect on its results of operations for the period in which they are resolved.  Based on the information available to the Company, including the amount of time remaining before trial, the results of discovery and the judgment of internal and external counsel, the Company is unable to express an opinion as to the outcome of those matters which are not settled and cannot estimate a potential range of loss on the outstanding matters.