Dollar General 2010 Annual Report Download - page 145

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Initial public offering and special dividend (Continued)
On September 8, 2009, the Company’s Board of Directors declared a special dividend on the
Company’s outstanding common stock (including shares of restricted stock) of $0.7525 per share, or
approximately $239.3 million in the aggregate, which was paid on September 11, 2009 to shareholders
of record on September 8, 2009. The special dividend was paid with cash generated from operations.
Pursuant to the terms of the Company’s stock option plans, holders of stock options received either a
pro-rata adjustment to the terms of their share-based awards or a cash payment (totaling approximately
$0.5 million for all such grantees) in substitution for such adjustment as a result of the dividend.
3. Merger
On July 6, 2007, the Company consummated a merger transaction (the ‘‘Merger’’), and as a result,
the Company is a subsidiary of an entity controlled by investment funds affiliated with KKR. The
aggregate purchase price was approximately $7.1 billion, including direct costs of the Merger, and was
funded primarily through debt financings as described more fully below in Note 7 and cash equity
contributions from KKR, GS Capital Partners VI Fund, L.P. and affiliated funds (affiliates of Goldman,
Sachs & Co.), and other equity co-investors (collectively, the ‘‘Investors’’).
The Merger was accounted for as a reverse acquisition in accordance with applicable purchase
accounting provisions. Because of this accounting treatment, the Company’s assets and liabilities were
properly accounted for at their estimated fair values as of the Merger date. The purchase price
allocation included approximately $4.34 billion of goodwill, none of which is expected to be deductible
for tax purposes.
The purchase price allocation as of the Merger date also included approximately $1.4 billion of
other intangible assets. As of January 28, 2011 and January 29, 2010, these balances were as follows:
As of January 28, 2011
Estimated Accumulated
(In thousands) Useful Life Amount Amortization Net
Leasehold interests ..................... 2 to 17.5 years $ 141,180 $83,458 $ 57,722
Trade names and trademarks ............. Indefinite 1,199,200 — 1,199,200
$1,340,380 $83,458 $1,256,922
As of January 29, 2010
Estimated Accumulated
(In thousands) Useful Life Amount Amortization Net
Leasehold interests ..................... 2 to 17.5 years $ 184,168 $100,793 $ 83,375
Internally developed software ............. 3 years 12,300 10,592 1,708
196,468 111,385 85,083
Trade names and trademarks ............. Indefinite 1,199,200 — 1,199,200
$1,395,668 $111,385 $1,284,283
The Company recorded amortization expense related to amortizable intangible assets for 2010,
2009 and 2008 of $27.4 million, $41.3 million and $45.0 million, respectively, ($25.7 million,
$37.2 million and $40.9 million, respectively, of which is included in rent expense). Expected future
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