Dollar General 2006 Annual Report Download - page 86

from investing activities and recoveries related to inventory losses and business interruption are
included in cash flows from operating activities.
13. Segment reporting
The Company manages its business on the basis of one reportable segment. See Note 1
for a brief description of the Company’ s business. As of February 2, 2007, all of the Company’s
operations were located within the United States with the exception of an immaterial Hong Kong
subsidiary formed to assist in the process of importing certain merchandise that began operations
in early 2004. The following data is presented in accordance with SFAS 131, “Disclosures about
Segments of an Enterprise and Related Information.”
(In thousands) 2006 2005 2004
Classes of similar products:
Highly consumable $ 6,022,014 $ 5,606,466 $ 4,825,051
Seasonal 1,509,999 1,348,769 1,263,991
Home products 914,357 907,826 879,476
Basic clothing 723,452 719,176 692,409
Net sales $ 9,169,822 $ 8,582,237 $ 7,660,927
14. Subsequent event
On March 11, 2007, the Company entered into an Agreement and Plan of Merger (the
“Merger Agreement”) with Buck Holdings LP, a Delaware limited partnership (“Parent”) and
Buck Acquisition Corp., a Tennessee corporation and wholly owned subsidiary of Parent
(“Merger Sub”).
Pursuant to the Merger Agreement, Merger Sub will be merged with and into the
Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary
of Parent. Merger Sub and Parent are affiliates of Kohlberg Kravis Roberts & Co., L.P. Pursuant
to the Merger Agreement, at the effective time of the Merger, each outstanding share of common
stock of the Company, other than any shares held by any wholly owned subsidiary of the
Company and any shares owned by Parent or Merger Sub or held by the Company, will be
cancelled and converted into the right to receive $22.00 in cash, without interest (the “Merger
Consideration”). In addition, immediately prior to the effective time of the Merger, all shares of
Company restricted stock and restricted stock units will, unless otherwise agreed by the holder
and Parent, vest and be converted into the right to receive the Merger Consideration. All options
to acquire shares of Company common stock will vest immediately prior to the effective time of
the Merger and holders of such options will, unless otherwise agreed by the holder and Parent, be
entitled to receive an amount in cash equal to the excess, if any, of the Merger Consideration
over the exercise price per share of Company common stock subject to the option.
The Board of Directors of the Company unanimously approved the Merger Agreement
and amended the Company’ s Shareholder Rights Plan to exempt the Merger from that Plan’ s
operation.
Consummation of the Merger is not subject to a financing condition but is subject to
customary closing conditions, including approval of the Merger Agreement by the Company’ s
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