Dollar General 2008 Annual Report Download - page 69

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67
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of presentation and accounting policies
Basis of presentation
These notes contain references to the years 2008 and 2006, which represent fiscal years
ended January 30, 2009 and February 2, 2007, respectively, each of which were 52-week
accounting periods. The Company completed a merger transaction on July 6, 2007 and therefore
the 2007 presentation includes separate presentation of the periods before and after the merger.
The Company’ s fiscal year ends on the Friday closest to January 31. The consolidated financial
statements include all subsidiaries of the Company, except for its not-for-profit subsidiary which
the Company does not control. Intercompany transactions have been eliminated.
Dollar General Corporation (the “Company”) was acquired on July 6, 2007 through a
Merger (as defined and discussed in greater detail in Note 2 below) accounted for as a reverse
acquisition. Although the Company continued as the same legal entity after the Merger, the
accompanying consolidated financial statements are presented for the “Predecessor” and
“Successor” relating to the periods preceding and succeeding the Merger, respectively. As a
result of the Company applying purchase accounting and a new basis of accounting beginning on
July 7, 2007, the financial reporting periods presented are as follows:
• The 2008 presentation reflects the Successor.
• The 2007 periods presented include the Predecessor period of the Company,
reflecting 22 weeks of operating results from February 3, 2007 to July 6, 2007 and 30
weeks of operating results for the Successor period, reflecting the Merger of the
Company and Buck Acquisition Corp. (“Buck”) from July 7, 2007 to February 1,
2008.
• Buck’s results of operations for the period from March 6, 2007 to July 6, 2007 (prior
to the Merger on July 6, 2007) are also included in the consolidated financial
statements for the Successor period described above as a result of certain derivative
financial instruments entered into by Buck prior to the Merger, as further described
below. Other than these financial instruments, Buck had no assets, liabilities, or
operations prior to the Merger.
• The 2006 presentation reflects the Predecessor.
The consolidated financial statements for the Predecessor periods have been prepared
using the Company’ s historical basis of accounting. As a result of purchase accounting, the pre-
Merger and post-Merger consolidated financial statements are not comparable.
The Company leases three of its distribution centers (“DCs”) from lessors, which meet
the definition of a Variable Interest Entity (“VIE”) as described by Financial Accounting