Dollar General 2004 Annual Report Download - page 29

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Dollar General Corporation 27
The฀Company’s฀reputation฀and฀financial฀condition฀could฀
be฀affected฀by฀the฀SEC฀investigation.฀As previously
disclosed in the Company’s periodic reports filed with
the SEC, the Company restated its audited financial
statements for fiscal years 1999 and 1998, and certain
unaudited financial information for fiscal year 2000, by
means of its Form 10-K for the fiscal year ended
February 2, 2001, which was filed on January 14, 2002
(the “2001 Restatement”).
The SEC has been conducting an investigation into the
circumstances giving rise to the 2001 Restatement and,
on January 8, 2004, the Company received notice that
the SEC staff was considering recommending that the
SEC bring a civil injunctive action against the Company
for alleged violations of the federal securities laws in
connection with circumstances relating to the 2001
Restatement. The Company subsequently reached an
agreement in principle with the SEC staff to settle the
matter. Under the terms of the agreement in principle,
the Company will consent, without admitting or denying
the allegations in a complaint to be filed by the SEC,
to the entry of a permanent civil injunction against future
violations of the antifraud, books and records, reporting
and internal control provisions of the federal securities
laws and related SEC rules and will pay a $10 million
non-deductible civil penalty. The agreement with the
SEC staff is subject to final approval by the court in
which the SEC’s complaint is filed. The Company
accrued $10 million with respect to the penalty in its
financial statements for the year ended January 30,
2004, and this accrual remains outstanding as of January
28, 2005. The Company can give no assurances that the
court will approve this agreement. If the agreement is not
approved, the Company could be subject to different or
additional penalties, both monetary and non-monetary,
which could adversely affect the Company’s financial
statements as a whole. The publicity surrounding the
SEC investigation and settlement also could affect the
Company’s reputation and have an adverse impact on
its financial statements as a whole.
Readers are cautioned not to place undue reliance on
forward-looking statements made herein, since the
statements speak only as of the date of this report.
Except as may be required by law, the Company
undertakes no obligation to publicly update or revise
any forward-looking statements contained herein to
reflect events or circumstances occurring after the
date of this report or to reflect the occurrence of unan-
ticipated events. Readers are advised, however, to
consult any further disclosures the Company may
make on related subjects in its documents filed with or
furnished to the SEC or in its other public disclosures.