Dollar General 2008 Annual Report Download - page 115
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113
net of insurance proceeds and increasing operating profit by the incremental $2.5 million. These
amounts are reflected as Litigation settlement and related costs, net in the respective quarters.
As discussed in Note 3, in the fourth quarter of 2008, the Company recorded net
additional pre-tax expenses of $3.3 million related to underperforming stores closed in fiscal
years 2006 and 2007. These additional expenses are related to re-evaluation of the existing lease
contract termination liabilities based on current market conditions and are reflected as SG&A
expense.
As discussed in Note 6, in the fourth quarter of 2008, the Company repurchased $44.1
million of the 11.875%/12.625% senior subordinated toggle notes due 2017 resulting in a net
gain of $3.8 million which is recognized as Other (income) expense.
As discussed in Note 8, in the fourth quarter of 2008, the Company recorded an $8.6
million charge included in Cost of goods sold related to the markdown of certain products
covered by the Consumer Products Safety Improvement Act of 2008, and reversed $5.0 million
of SG&A expenses originally recorded in fiscal 2007 related to certain distribution center lease
contingencies.
As discussed in Note 2, in the Predecessor period ended July 6, 2007, the Company
recorded transaction and other costs related to the Merger of $56.7 million and share-based
compensation expense related directly to the Merger of $39.4 million as discussed in Note 10. As
discussed in Note 2, in the Successor period ended August 3, 2007, the Company recorded
transaction and other costs related to the Merger of $5.6 million, a loss on debt retirement related
to the Merger of $6.2 million as discussed in Note 6; a contingent loss related to certain DC
leases of $8.6 million as discussed in Note 8; and a gain on certain interest rate swaps discussed
in Note 7 of $6.8 million.
In the third quarter of 2007, the Company recorded an additional contingent loss related
to certain DC leases of $3.4 million as discussed in Note 8.
As discussed in Note 6, in the fourth quarter of 2007, the Company recorded a gain on
debt retirement of $4.9 million.
16. Guarantor subsidiaries
Certain of the Company’ s subsidiaries (the “Guarantors”) have fully and unconditionally
guaranteed on a joint and several basis the Company's obligations under certain outstanding debt
obligations. Each of the Guarantors is a direct or indirect wholly-owned subsidiary of the
Company. The following consolidating schedules present condensed financial information on a
combined basis, in thousands.