Dollar General 2008 Annual Report Download - page 37

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35
a separate entity basis and the election to include, effective February 3, 2007, income tax related
interest and penalties in the amount reported as income tax expense.
The income tax rate for the Predecessor period ended July 6, 2007 is an expense of
300.2%. This expense is higher than the expected U.S. statutory rate of 35% due principally to
the non-deductibility of certain acquisition related expenses.
Unaudited Pro Forma Condensed Consolidated Financial Information
The following supplemental unaudited pro forma condensed consolidated statement of
operations data has been developed by applying pro forma adjustments to our historical
consolidated statement of operations. We were acquired on July 6, 2007 through a merger
accounted for as a reverse acquisition. Although we continued as the same legal entity after the
Merger, the accompanying unaudited pro forma condensed consolidated financial information is
presented for the Predecessor and Successor relating to the periods preceding and succeeding the
Merger, respectively. As a result of the Merger, we applied purchase accounting standards and a
new basis of accounting effective July 7, 2007. The unaudited pro forma condensed consolidated
statements of operations for the years ended February 1, 2008 and February 2, 2007 gives effect
to the Merger as if it had occurred on February 3, 2007 and February 4, 2006, respectively.
Assumptions underlying the pro forma adjustments are described in the accompanying notes,
which should be read in conjunction with this unaudited pro forma condensed consolidated
financial statement.
The unaudited pro forma adjustments are based upon available information and certain
assumptions that we believe are reasonable under the circumstances. The unaudited pro forma
condensed consolidated financial information is presented for supplemental informational
purposes only, although we believe this information is useful in providing comparisons between
years. The unaudited pro forma condensed consolidated financial information does not purport to
represent what our results of operations would have been had the Merger and related transactions
actually occurred on the date indicated, and they do not purport to project our results of
operations or financial condition for any future period. The unaudited pro forma condensed
consolidated statements of operations should be read in conjunction with the information
contained in other sections of this 2008 Form 10-K including “Selected Financial Data”, in our
consolidated financial statements and related notes thereto, and other sections of this
Management's Discussion and Analysis of Financial Condition and Results of Operations”
appearing elsewhere in this fiscal 2008 Form 10-K. All pro forma adjustments and their
underlying assumptions are described more fully in the notes to our unaudited pro forma
condensed consolidated statements of operations.