Dollar General 2007 Annual Report Download - page 27

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The Merger consideration was funded through the use of our available cash, cash equity
contributions from the Investors, equity contributions of certain members of our management
and the debt financings discussed below. Our outstanding common stock is now owned by
Parent and certain members of management. Our common stock is no longer registered with the
Securities and Exchange Commission (“SEC”) and is no longer traded on a national securities
exchange.
We entered into the following debt financings in conjunction with the Merger:
• We entered into a credit agreement and related security and other agreements
consisting of a $2.3 billion senior secured term loan facility, which matures on July 6,
2014 (the “Term Loan Facility”).
• We entered into a credit agreement and related security and other agreements
consisting of a senior secured asset-based revolving credit facility of up to
$1.125 billion (of which $432.3 million was drawn at closing and $132.3 million was
paid down on the same day), subject to borrowing base availability, which matures
July 6, 2013 (the “ABL Facility” and, with the Term Loan Facility, the “New Credit
Facilities”).
• We issued $1.175 billion aggregate principal amount of 10.625% senior notes due
2015, which mature on July 15, 2015, and $725 million aggregate principal amount of
11.875%/12.625% senior subordinated toggle notes due 2017, which mature on
July 15, 2017. During the fourth quarter of fiscal 2007, we repurchased $25 million
of the 11.875%/12.625% senior subordinated toggle notes due 2017.
Executive Overview
We are the largest discount retailer in the United States by number of stores, with
approximately 8,200 stores located in 35 states, primarily in the southern, southwestern,
midwestern and eastern United States. We serve a broad customer base and offer a focused
assortment of everyday items, including basic consumable merchandise and other home, apparel
and seasonal products. A majority of our products are priced at $10 or less and approximately
30% of our products are priced at $1 or less. We seek to offer a compelling value proposition for
our customers based on convenient store locations, easy in and out shopping and quality
merchandise at highly competitive prices. We believe our combination of value and convenience
distinguishes us from other discount, convenience and drugstore retailers, who typically focus on
either value or convenience.
The nature of our business is seasonal to a certain extent. Primarily because of sales of
holiday-related merchandise, sales in the fourth quarter have historically been higher than sales
achieved in each of the first three quarters of the fiscal year. Expenses and, to a greater extent,
operating income, vary by quarter. Results of a period shorter than a full year may not be
indicative of results expected for the entire year. Furthermore, the seasonal nature of our
business may affect comparisons between periods.