Dollar General 2008 Annual Report Download - page 14

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Credit Facilities could proceed against the collateral granted to them to secure that indebtedness.
Additional borrowings under the ABL Facility will, if excess availability under that facility is
less than a certain amount, be subject to the satisfaction of a specified financial ratio. Our ability
to meet this financial ratio can be affected by events beyond our control, and we cannot assure
you that we will meet this ratio and other covenants.
General economic factors may adversely affect our financial performance and other
aspects of our business.
A further slowdown in the economy or other economic conditions affecting disposable
consumer income, such as unemployment levels, inflation, business conditions, fuel and other
energy costs, consumer debt levels, lack of available credit, interest rates, tax rates and changes
in tax laws, may adversely affect our business by reducing overall consumer spending or by
causing customers to shift their spending to products other than those sold by us or to products
sold by us that are less profitable than other product choices, all of which could result in lower
net sales, decreases in inventory turnover, greater markdowns on inventory, and a reduction in
profitability due to lower margins. Many of those factors, as well as commodity rates,
transportation costs, costs of labor, insurance and healthcare, foreign exchange rate fluctuations,
lease costs, changes in other laws and regulations and other economic factors, also affect our cost
of sales and our selling, general and administrative expenses, and we have no control or limited
ability to control such factors.
In addition, many of the factors discussed above, along with current global economic
conditions and uncertainties, the potential impact of the current recession, the potential for
additional failures or realignments of financial institutions, and the related impact on available
credit may affect us and our suppliers and other business partners, landlords, and customers in an
adverse manner including, but not limited to, reducing access to liquid funds or credit (including
through the loss of one or more financial institutions that are a part of our revolving credit
facility), increasing the cost of credit, limiting our ability to manage interest rate risk, increasing
the risk of bankruptcy of our suppliers, landlords or counterparties to or other financial
institutions involved in our credit facilities and our derivative and other contracts, increasing the
cost of goods to us, and other impacts which we are unable to fully anticipate. See also our
disclosures under Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market
Risk” below.
Our plans depend significantly on initiatives designed to improve the efficiencies,
costs and effectiveness of our operations, and failure to achieve or sustain these plans could
affect our performance adversely.
We have had, and expect to continue to have, initiatives (such as those relating to
marketing, merchandising, promotions, sourcing, shrink, private brand, store operations and real
estate) in various stages of testing, evaluation, and implementation, upon which we expect to rely
to improve our results of operations and financial condition. These initiatives are inherently risky
and uncertain, even when tested successfully, in their application to our business in general. It is
possible that successful testing can result partially from resources and attention that cannot be
duplicated in broader implementation. Testing and general implementation also can be affected