Dollar General 2011 Annual Report Download

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Table of contents

  • Page 1

  • Page 2

  • Page 3
    ..., Customers, and Employees As you read this annual report, you will see that 2011 proved to be another year of significant accomplishments for Dollar General. From a financial perspective, we achieved record sales, operating profit, net income and cash flow from operations. We exceeded our financial...

  • Page 4

  • Page 5
    ... Time Goodlettsville City Hall Auditorium 105 South Main Street Goodlettsville, Tennessee 1) 2) To elect as directors the 7 nominees listed in the proxy statement To approve our Amended and Restated 2007 Stock Incentive Plan and the material terms of the performance-based compensation under the Plan...

  • Page 6

  • Page 7
    Proxy Statement

  • Page 8
    DOLLAR GENERAL CORPORATION Proxy Statement for 2012 Annual Meeting of Shareholders Proxy TABLE OF CONTENTS General Information ...Voting Matters ...Proposal 1: Election of Directors ...Corporate Governance ...Director Compensation ...Director Independence ...Transactions with Management and Others...

  • Page 9
    ... hold the annual meeting, are posted on the ''Investor Information'' portion of our web site located at www.dollargeneral.com. What is Dollar General Corporation and where is it located? We operate convenient-sized stores to deliver everyday low prices on products that families use every day. We are...

  • Page 10
    ... 2007 Stock Incentive Plan for Key Employees of Dollar General Corporation and its Affiliates (the ''2007 Stock Incentive Plan'') and the material terms of the performance-based compensation under the 2007 Stock Incentive Plan for purposes of compensation deductibility under Internal Revenue Code...

  • Page 11
    ... our independent registered public accounting firm for 2012. Can I change my mind and revoke my proxy? Yes. If you are a shareholder of record, to revoke a proxy given pursuant to this solicitation you must sign a later-dated proxy card and submit it so that it is received before the annual meeting...

  • Page 12
    ... respect to the proposal regarding our 2007 Stock Incentive Plan as discussed above, broker non-votes generally are disregarded for the purpose of determining the total number of votes cast with respect to a proposal. Will my vote be confidential? Proxy instructions, ballots and voting tabulations...

  • Page 13
    ... common stock through their investment in Buck Holdings, L.P. and related entities. Mr. Agrawal is a director of Colonial Pipeline Company and El Paso Midstream Investment Corp. Mr. Bryant served as the President and Chief Executive Officer of Longs Drug Stores Corporation, a retail drugstore chain...

  • Page 14
    ... served as the Executive Vice President, Chief Financial Officer and Chief Administrative Officer of CVS Caremark Corporation, a retail pharmacy chain and provider of healthcare services and pharmacy benefits management, from September 1999 until his retirement in December 2009. Prior to joining...

  • Page 15
    ...by our directors, management, or third party search firms. In January 2012, the Board instructed the CNG Committee to initiate a search for additional director candidates. The CNG Committee has retained a third-party search firm to assist in identifying potential future Board candidates who meet our...

  • Page 16
    ... years of experience in managing and analyzing companies owned by private equity companies, including over 4.5 years with Dollar General. He has a strong understanding of corporate finance and strategic business planning activities that are unique to highly-leveraged companies such as Dollar General...

  • Page 17
    ... business strategies, financial plans and structures, and management teams. Mr. Calbert also has a significant financial and accounting background evidenced by his prior experience as the chief financial officer of a public retail company and his 10 years of practice as a certified public accountant...

  • Page 18
    ... includes: • the nominee's name, age, business address and residence address; • the nominee's principal occupation or employment; • the class and number of shares of Dollar General stock that are beneficially owned by the nominee; • any other information relating to the nominee that is...

  • Page 19
    ... shareholder's immediate family in the securities of Dollar General, including interests the value of which is based on increases or decreases in the value of securities of Dollar General or the payment of dividends by Dollar General; Proxy • a description of all compensatory arrangements...

  • Page 20
    ... General because, given his day-to-day involvement with and intimate understanding of our specific business, industry and management team, Mr. Dreiling is particularly suited to effectively identify strategic priorities, lead the discussion and execution of strategy, and facilitate information flow...

  • Page 21
    ... former employees of the independent registered public accounting firm • Discusses the annual audited and quarterly unaudited financial statements with management and the independent registered public accounting firm • Discusses types of information to be disclosed in earnings press releases and...

  • Page 22
    ... and benefits programs • Recommends any changes in our incentive compensation and equity-based plans that are subject to Board approval • Reviews and discusses with management, prior to the filing of the proxy statement, the disclosure regarding executive compensation, including the Compensation...

  • Page 23
    ... security holders and other interested parties to contact the Board, a particular director, or the non-management directors or the independent directors as a group. Such process is described on the ''Investor Information-Corporate Governance'' portion of our web site located at www.dollargeneral.com...

  • Page 24
    ... 11 of the annual consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended February 3, 2012, filed with the SEC on March 22, 2012 (our ''2011 Form 10-K''). As of February 3, 2012, each director had 1,546 total unvested restricted stock units outstanding, except...

  • Page 25
    ...and for travel and related expenses related to Dollar General business. For 2011, each non-employee director received quarterly payment of the following cash compensation, as applicable: • $75,000 annual retainer for service as a Board member; • $17,500 annual retainer for service as chairman of...

  • Page 26
    ... which are posted on the ''Investor Information-Corporate Governance'' portion of our web site located at www.dollargeneral.com. The Board first analyzes whether any director has a relationship covered by the NYSE listing standards that would prohibit an independence finding for Board or Audit...

  • Page 27
    ... not exceed 2% of the recipient's total annual receipts and no related party who is an individual participates in the grant decision or receives any special compensation or benefit as a result. • Transactions where the interest arises solely from share ownership in Dollar General and all of our...

  • Page 28
    ...our initial public offering in 2009, we amended the Management Stockholder's Agreements to exclude from the transfer restrictions any shares acquired in the open market or through the directed share program administered as part of the initial public offering. Shares acquired by executive officers in...

  • Page 29
    ...rights thereunder, secondary offerings of our common stock were completed in September 2011, December 2011 and April 2012 for which affiliates of KKR and of Goldman, Sachs & Co. served as underwriters. Dollar General did not sell shares of common stock, receive proceeds, or pay any underwriting fees...

  • Page 30
    ... of independent directors. Proxy In addition, concurrent with the closing of the April 2012 secondary offering and pursuant to a Share Repurchase Agreement between Dollar General and Buck Holdings L.P., dated March 25, 2012, Dollar General purchased 6,817,311 shares of Common Stock from Buck...

  • Page 31
    ... annual and long-term business strategies, to pay for performance and to maintain our competitive position in the market in which we compete for executive talent. We believe the success of our program is evidenced by the following key financial and operating results for 2011 (2011 was a 53-week year...

  • Page 32
    ..., the repricing of any stock option or stock appreciation right, prohibit dividend equivalent rights on unearned or unvested performance share grants, add a compensation ''clawback'' provision, and extend the term of the Plan. • We proposed revisions to our Annual Incentive Plan to, among other...

  • Page 33
    ... and risk assessment assistance, which work will instead be performed by management. Meridian did not provide any other services to the Company in 2011 unrelated to executive compensation. A Meridian representative attends such Committee meetings and private sessions as requested by the Committee...

  • Page 34
    ... resulting recommendations with respect to 2012 annual base salary and short-term cash incentive decisions. However, Meridian, along with management, assisted the Committee in developing the new long-term annual incentive program and provided detailed data from the market comparator group upon which...

  • Page 35
    ... while reducing the cost associated with an annual benchmark study. For 2012 base salary and short-term cash incentive compensation decisions for the named executive officers, the Company averaged market data obtained from the most recently available proxies of the 2012 market comparator group, from...

  • Page 36
    ...opportunity for each named executive officer to receive a cash bonus payment equal to a certain percentage of base salary based upon Dollar General's achievement of one or more pre-established financial performance measures. This Teamshare program is established pursuant to our Annual Incentive Plan...

  • Page 37
    ...of a market maker registration statement; (b) costs, fees and expenses directly related to any transaction that results in a Change in Control (within the meaning of our 2007 Stock Incentive Plan) or related to any primary or secondary offering of our securities; (c) share-based compensation charges...

  • Page 38
    ... level was set at 22.83%, or 100 basis points higher than the threshold level. The bonus payable to each named executive officer if we reached the 2011 target performance levels for each of the financial performance measures is equal to the applicable percentage of salary as set forth in the chart...

  • Page 39
    ...to compensate named executive officers for a long-term commitment to us, while motivating sustained increases in our financial performance and shareholder value. Equity awards are made under our 2007 Stock Incentive Plan and are always granted with a per share exercise price equal to the fair market...

  • Page 40
    .... Under the new program, each of the named executive officers (other than Ms. Guion) received a grant of time-based stock options and a grant of performance share units. The combination of time and performance-based vesting criteria is designed to compensate executives for long-term commitment to us...

  • Page 41
    ... relating to any tax, legislation or accounting changes enacted after the beginning of the 2012 fiscal year must be material and demonstrable and must not have been contemplated in our 2012-2016 financial plan. Benefits and Perquisites. Along with certain benefits offered to named executive officers...

  • Page 42
    ...temporary living expenses (30 days for all other employees), excluding the cost of food. We provide through a third party a personal financial and advisory service benefit to the named executive officers, including financial planning, estate planning and tax preparation services, in an annual amount...

  • Page 43
    ... provision applicable to our named executive officers, except for the provisions related to long-term equity incentives under our 2007 Stock Incentive Plan. Retirement Agreement with Ms. Guion Ms. Guion intends to retire from employment with the Company effective July 31, 2012 (the ''Retirement Date...

  • Page 44
    ..., signing bonuses or other annual compensation paid or imputed to the executive officers covered by Section 162(m) that causes non-performance-based compensation to exceed the $1 million limit will not be deductible by Dollar General. The Committee administers our executive compensation program with...

  • Page 45
    ... 11 of the annual consolidated financial statements in our 2011 Form 10-K. (4) Represents amounts earned pursuant to our Teamshare bonus program for each fiscal year reported. See the discussion of the ''Short-Term Cash Incentive Plan'' in ''Compensation Discussion and Analysis'' above. Ms. Guion...

  • Page 46
    ...for other miscellaneous tax gross-ups related to perquisites; $1,010 for premiums paid under our life insurance program; and $29,467 which represents the aggregate incremental cost of providing certain perquisites, including $20,181 for financial and estate planning services, and other amounts which...

  • Page 47
    ... financial performance above the target performance levels, but at or below the maximum payout cap. See ''Short-Term Cash Incentive Plan'' in ''Compensation Discussion and Analysis'' above for discussion of the fiscal 2011 Teamshare program. We did not make any equity awards to our named executive...

  • Page 48
    ...at 2011 Fiscal Year-End The table below sets forth information regarding awards granted under our 2007 Stock Incentive Plan and held by our named executive officers as of the end of fiscal 2011. We have omitted the columns pertaining to stock awards because they are inapplicable. The exercise prices...

  • Page 49
    ... closing market price of our common stock on the date of exercise and the exercise price. Pension Benefits Fiscal 2011 We have omitted the Pension Benefits table as it is inapplicable. Nonqualified Deferred Compensation Fiscal 2011 Information regarding each named executive officer's participation...

  • Page 50
    ... age, years of service and job grade. The fiscal 2011 contribution percentage for each eligible named executive officer was 9.5% for Mr. Dreiling and Mr. Tehle, 7.5% for Ms. Guion, and 4.5% for Ms. Lanigan. As a result of our 2007 merger, which constituted a change-in-control under the CDP/SERP Plan...

  • Page 51
    ...(by the employee's survivor in the case of death) for a period of 1 year from the service termination date unless we purchase such vested options in total at the fair market value of the shares underlying the vested options less the aggregate exercise price of the vested options. The options granted...

  • Page 52
    ... year in which his termination occurred. For purposes of the named executive officers' employment agreements, other than Mr. Dreiling's, ''disability'' means (1) the employee must be disabled for purposes of our long-term disability insurance plan or (2) the employee has an inability to perform...

  • Page 53
    ... average percentage of the named executive officer's target bonus paid or to be paid to employees at the same job grade level as the named executive officer (if any) under the annual bonus program for officers for the 2 fiscal years immediately preceding the fiscal year in which the termination date...

  • Page 54
    ... K and 7-11 Stores (Sam's Club, Big Lots, Walgreens, Rite-Aid and CVS are not specifically listed in Mr. Dreiling's employment agreement), or any person then planning to enter the deep discount consumable basics retail business, if the named executive officer is required to perform services for that...

  • Page 55
    ... with the performance of his duties); • Any material breach of any securities or other law or regulation or any Dollar General policy governing securities trading or inappropriate disclosure or ''tipping'' relating to any stock, security and investment; • Any activity or public statement, other...

  • Page 56
    ... above, a change in control generally means (as more fully described in the Management Stockholder's Agreement between us and the named executive officers) one or a series of related transactions described below which results in us, KKR and its affiliates or an employee benefit plan referenced below...

  • Page 57
    ... Calculated as the combined Company and employee cost for the benefit option selected by Mr. Dreiling for 2012. (2) Estimated based on the actual cost of outplacement services recently provided to other officers. (3) Amounts represent $22,430 for a financial and estate planning perquisite that will...

  • Page 58
    ... 2010, our Compensation Committee, with the assistance of its compensation consultant and management, reviewed our compensation policies and practices for all employees, including executive officers, to assess the risks that may arise from our compensation programs. The assessment included a review...

  • Page 59
    ... our common stock. Name and Address of Beneficial Owner Buck Holdings, L.P.(1) T. Rowe Price Associates, Inc.(2) Amount and Nature of Beneficial Ownership 181,172,991(1) 18,440,008(2) Percent of Class 53.5% 5.4% Proxy (1) Based solely on Statements on Schedule 13G filed on February 14, 2012. Buck...

  • Page 60
    ..., New York, New York 10282. The address of GS Capital Partners VI GmbH & Co. KG is Messeturm, Friedrich-Ebert-Anlage 49 60323, Frankfurt/Main, Germany. (2) Based solely on a Statement on Schedule 13G/A filed on February 8, 2012 by T. Rowe Price Associates, Inc. (''Price Associates''). These shares...

  • Page 61
    ..., if any. We also have been advised that Mr. Jones holds the shares reported in the table for the benefit of the GS Group. (4) Includes the following number of shares underlying restricted stock units that are settleable within 60 days of March 23, 2012, over which the person will not have voting or...

  • Page 62
    ... ''Covered employees'' generally include each of the persons who are our Chief Executive Officer or one of the other named executive officers (other than our Chief Financial Officer). The 2007 Stock Incentive Plan is designed to permit Dollar General to grant awards that qualify as performance-based...

  • Page 63
    ...to any plan participant is 1.5 million per fiscal year. • No Discount Stock Options or Stock Appreciation Rights. All stock options and stock appreciation rights must have an exercise price that is equal to or greater than the fair market value of one share of our common stock on the date of grant...

  • Page 64
    ... common stock and who receive incentive stock options, the per share exercise price may not be less than 110% of the fair market value of one share of our common stock on the date of grant. The Committee determines the term of each stock option, which may not exceed ten years from the date of...

  • Page 65
    ... rights, either independent of or in connection with stock options. A stock appreciation right entitles the participant to receive an amount equal to the product of (i) the excess of the fair market value of one share of our common stock on the date of exercise over the exercise price of the...

  • Page 66
    ... ratios share price (including, but not limited to, growth measures and total shareholder return expense targets margins operating efficiency customer satisfaction working capital targets economic value added volume capital expenditures market share costs regulatory ratings asset quality net...

  • Page 67
    ... other applicable law, rule or regulation; or (2) the amendment increases the aggregate number of shares available for awards under the plan, decreases the exercise price of outstanding stock options or stock appreciation rights, changes the requirements relating to the Committee or extends the term...

  • Page 68
    ...merger, change in control of Dollar General, payment of a dividend (other than a cash dividend paid as part of a regular dividend program), exchange of shares or other corporate exchange, equity restructuring, or other similar transaction or occurrence that affects our equity securities or the value...

  • Page 69
    ...the purchase price, if any) will be treated as compensation income to the participant and will be taxable in the year the restrictions lapse and dividends paid while the common stock is subject to restrictions will be subject to withholding taxes. If Dollar General complies with applicable reporting...

  • Page 70
    ...cash and the fair market value of the shares received. Dollar General generally will be entitled to a corresponding tax deduction at the time the participant recognizes ordinary income with respect to a dividend equivalent right. Section 280(G). To the extent payments that are contingent on a change...

  • Page 71
    ... Number of Units Target (#) Dollar Value of Units Maximum ($)(2) Proxy Richard W. Dreiling, Chairman & Chief Executive Officer David M. Tehle, Executive Vice President & Chief Financial Officer Kathleen R. Guion, Executive Vice President, Strategic Planning & Real Estate Todd J. Vasos, Executive...

  • Page 72
    ...Underlying Options(2) Number of Shares of Purchased Stock(3) Number of Shares of Common Stock(4) Richard W. Dreiling, Chairman & Chief Executive Officer David M. Tehle, Executive Vice President & Chief Financial Officer Kathleen R. Guion, Executive Vice President, Strategic Planning & Real Estate...

  • Page 73
    ...: Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Proxy Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of...

  • Page 74
    ... employees,'' which term generally includes each of the persons who were, at the end of each fiscal year, our Chief Executive Officer or one of the other named executive officers (other than our Chief Financial Officer). Section 162(m) specifically exempts certain performance-based compensation...

  • Page 75
    ... flow, and cash flow return on capital) • Share price (including, but not limited to, growth measures and total shareholder return) • Gross or operating margins • Margins • Customer satisfaction; • Economic Value Added • Capital expenditures • Costs • Asset quality • Safety Proxy...

  • Page 76
    ... in 2012 unless that officer receives a satisfactory performance rating when evaluated against his or her individual performance goals. See ''Use of Performance Evaluations'' in Compensation Discussion & Analysis. When is the Annual Incentive Plan effective? The Amended and Restated Dollar General...

  • Page 77
    ... LLP their independence from Dollar General and its management. Based on these reviews and discussions, the Audit Committee unanimously recommended to the Board of Directors that Dollar General's audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended...

  • Page 78
    ... of our shareholders. (2) 2011 and 2010 fees include services relating to the employee benefit plan audit. (3) 2011 and 2010 fees relate primarily to tax compliance services, which represented $1,414,000 and $1,115,876 in 2011 and 2010, respectively, for work related to work opportunity tax credit...

  • Page 79
    ... and 2010. Proxy SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The United States securities laws require our executive officers, directors, and greater than 10% shareholders to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Based solely upon a review...

  • Page 80
    Proxy

  • Page 81
    ... Company's business; (b) to motivate management personnel by means of growth-related incentives to achieve long range goals; and (c) to further the alignment of interests of Participants with those of the shareholders of the Company through opportunities for increased stock or stock-based ownership...

  • Page 82
    ... stock of the Company (or any entity which controls the Company), including by way of merger, consolidation, tender or exchange offer or otherwise; (iii) a reorganization, recapitalization, merger or consolidation (a ''Corporate Transaction'') involving the Company, unless securities representing...

  • Page 83
    ... market value of the Common Stock on any given date determined as follows: (i) if there is a public market for the Shares on such date, the closing trading price of the Shares as reported on such date on the Composite Tape of the principal national securities exchange on which such Shares are listed...

  • Page 84
    ... or tendered to satisfy (x) tax withholding obligations, (y) the exercise price of any Stock Option(s) or (z) the purchase price for any other Award, shall in all events immediately become available for new Awards to be granted under the Plan. Shares related to Awards or portions of Awards that are...

  • Page 85
    ... Plan, a Stock Option granted under this Section 6(a) may not be exercised more than 10 years after the date it is granted. Payment of the Stock Option exercise price shall be made (i) in cash, (ii) with the consent of the Committee, in Shares (any such Shares valued at Fair Market Value on the date...

  • Page 86
    ... independent of a Stock Option shall be defined as a right of a Participant, upon exercise of such Stock Appreciation Right, to receive an amount equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the exercise price per Share of such Stock...

  • Page 87
    ..., growth measures and total shareholder return); (k) expense targets; (l) margins; (m) operating efficiency; (n) customer satisfaction; (o) working capital targets; (p) economic value added; (q) volume; (r) capital expenditures; (s) market share; (t) costs; (u) regulatory ratings; (v) asset quality...

  • Page 88
    ...other action that is treated as a ''repricing'' under generally accepted accounting principles; and (iii) repurchasing for cash or canceling any Stock Option or Stock Appreciation Right in exchange for another Award at a time when the exercise price per Share is greater than the Fair Market Value of...

  • Page 89
    ... increase the aggregate number of Shares available for Awards under the Plan, decrease the exercise price of outstanding Stock Options or Stock Appreciation Rights, change the requirements relating to the Committee, or extend the term of the Plan. However, no such Board action shall adversely impact...

  • Page 90
    ... of service with all Service Recipients (or the earliest date as is permitted under Section 409A of the Code), if such payment or benefit is payable upon a termination of service and (ii) if any other payments of money or other benefits due to the Participant hereunder would cause the application of...

  • Page 91
    ... of the Dollar General Corporation Annual Incentive Plan is to permit the Company, through awards of annual incentive compensation that satisfy the requirements for performance-based compensation under Section 162(m) of the Internal Revenue Code, to attract and retain executives and to motivate...

  • Page 92
    ..., growth measures and total shareholder return); (k) Expense targets; (l) Margins; (m) Operating efficiency; (n) Customer satisfaction; (o) Working capital targets; (p) Economic Value Added; (q) Volume; (r) Capital expenditures; (s) Market share; (t) Costs; (u) Regulatory ratings; (v) Asset quality...

  • Page 93
    ..., or at such later time as may be permitted by applicable provisions of the Code (which, in the case of any Qualified Performance-Based Award, currently is not later than the earlier of (i) 90 days after the beginning of the period of service to which the performance goal(s) relate or (ii) the first...

  • Page 94
    ... the contrary, if at the time of the Participant's termination of employment with any Service Recipient the Participant is a ''specified employee'' as defined in Section 409A, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such Proxy B-4

  • Page 95
    ...until the date that is six months and one day following the Participant's termination of employment with all Service Recipients (or the earliest date as is permitted under Section 409A), if such payment or benefit is payable upon a termination of employment. Each payment made under the Plan shall be...

  • Page 96

  • Page 97
    10-K

  • Page 98

  • Page 99
    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended February 3, 2012 Commission file number: 001-11421 DOLLAR GENERAL CORPORATION (Exact name of registrant ...

  • Page 100
    10-K

  • Page 101
    ...our strategy, plans, intentions or beliefs about future occurrences or results. For example, all statements relating to our estimated and projected expenditures, cash flows, results of operations, financial condition and liquidity; our plans, objectives and expectations for future operations, growth...

  • Page 102
    ...our store base to current levels, and provide us significant opportunities to continue our profitable store growth strategy. Compelling Value and Convenience Proposition. Our ability to deliver highly competitive prices on national brand and quality private brand products in convenient locations and...

  • Page 103
    ... building, which helps keep our rental and other fixed overhead costs relatively low. Our leased stores generally deliver positive cash flow in their first year of operations, typically resulting in pay back of capital in less than two years. Our stringent market analysis, real estate site selection...

  • Page 104
    ... along to us by our vendors. These cost increases posed a challenge to our continued priority of improving our gross profit rate in 2011. Our private brand program complements our model of offering customers nationally branded consumables merchandise at everyday low prices. When compared to similar...

  • Page 105
    ... discounts to the national brand. Our stores generally offer approximately 10,000 total SKUs per store; however, the number of SKUs in a given store can vary based upon the store's size, geographic location, merchandising initiatives, seasonality, and other factors. Most of our products are priced...

  • Page 106
    ... feet of selling space, are an alternative to the typical grocery store or supermarket, and generally contribute more to sales and operating income than our traditional stores. In 2011, we opened 12 new Dollar General Markets, including seven as part of our initial entrance into Nevada. We plan...

  • Page 107
    ... sales. Distribution, Transportation and Inventory Management Our stores are currently supported by ten distribution centers located strategically throughout our geographic footprint, including a new distribution center in Bessemer, Alabama which began shipping to stores on March 11, 2012. We lease...

  • Page 108
    ... store openings and store closings, the amount of sales contributed by new and existing stores, as well as financial transactions such as debt repurchases, common stock offerings and stock repurchases. We purchase substantial amounts of inventory in the third quarter and incur higher shipping costs...

  • Page 109
    ... our average costs low, contributing to our ability to offer competitive everyday low prices to our customers. See ''-Our Business Model'' above for further discussion of our competitive situation. Our Employees As of March 2, 2012, we employed approximately 90,000 full-time and part-time employees...

  • Page 110
    ... efficiencies, costs and effectiveness of our operations, and failure to achieve or sustain these plans could affect our performance adversely. We have initiatives (such as those relating to marketing, merchandising, promotions, sourcing, shrink, private brand, store operations and real estate) in...

  • Page 111
    ... growth opportunities and adversely impact our financial performance. The retail business is highly competitive. We operate in the basic discount consumer goods market, which is competitive with respect to price, store location, merchandise quality, assortment and presentation, in-stock consistency...

  • Page 112
    ...of deliveries could negatively affect our business. We maintain a network of distribution facilities and have plans to build new facilities to support our growth objectives. Delays in opening distribution centers could adversely affect our future operations by slowing store growth, which may in turn...

  • Page 113
    ... affect our business, reputation and financial performance. Despite our best efforts to ensure the quality and safety of the products we sell, we may be subject to product liability claims from customers or penalties from government agencies relating to products, including food products that are...

  • Page 114
    ... open new stores profitably and on schedule, our planned future growth will be impeded, which would adversely affect sales. Our ability to open profitable new stores is a key component of our planned future growth. Our ability to timely open such stores and to expand into additional market areas...

  • Page 115
    .... Failure to attract and retain qualified employees, particularly field, store and distribution center managers, and to control labor costs, as well as other labor issues, could adversely affect our financial performance. Our future growth and performance depends on our ability to attract, retain...

  • Page 116
    ... managing our inventory balances, our cash flows from operations may be negatively affected. Because our business is seasonal to a certain extent, with the highest volume of net sales during the fourth quarter, adverse events during the fourth quarter could materially affect our financial statements...

  • Page 117
    ...effect on our operations. We do not currently maintain key person life insurance policies with respect to our executive officers or key personnel. We face risks related to protection of customers' credit and debit card data and private data relating to us or our customers or employees. In connection...

  • Page 118
    ...to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities or pay dividends; • limiting our ability to pursue our growth strategy; • placing us at...

  • Page 119
    ... reporting standards by U.S. registrants, could require us to make significant changes to our lease management, fixed asset, and other accounting systems, and in all likelihood would result in changes to our financial statements. U.S. generally accepted accounting principles and related accounting...

  • Page 120
    ... of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock. If we, the Investors or other significant shareholders sell a large number of shares of our common stock, the market price of our...

  • Page 121
    ... our new stores have been subject to build-to-suit arrangements, including approximately 79% of our new stores in 2011. As of March 2, 2012, we operated nine distribution centers, as described in the following table: Location Year Opened Approximate Square Footage Approximate Number of Stores Served...

  • Page 122
    ... warehouse space to support our distribution needs. Our executive offices are located in approximately 302,000 square feet of buildings which we own in Goodlettsville, Tennessee. ITEM 3. LEGAL PROCEEDINGS The information contained in Note 9 to the consolidated financial statements under the heading...

  • Page 123
    ... retirement effective July 31, 2012. From 2000 until joining Dollar General, Ms. Guion served as President and Chief Executive Officer of Duke and Long Distributing Company, a convenience store chain operator and wholesale distributor of petroleum products. Prior to that time, she served as an...

  • Page 124
    ..., RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 10-K Market Information Our common stock is traded on the New York Stock Exchange under the symbol ''DG.'' The high and low sales prices during each quarter in fiscal 2011 and 2010 were as follows: 2011 First Quarter Second...

  • Page 125
    ...stock made during the quarter ended February 3, 2012 by or on behalf of Dollar General or any ''affiliated purchaser,'' as defined by Rule 10b-18(a)(3) of the Securities Exchange Act of 1934: Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(b) Approximate Dollar Value...

  • Page 126
    ...merger, the related purchase accounting adjustments, and a new basis of accounting beginning on July 7, 2007, the 2007 financial reporting periods presented below include the Predecessor period of the Company reflecting 22 weeks of operating results from February 3, 2007 to July 6, 2007 and 30 weeks...

  • Page 127
    ... ...Selling square feet (in thousands at period end) ...Net sales per square foot(5) ...Consumables sales ...Seasonal sales ...Home products sales ...Apparel sales ...Rent expense ...Balance Sheet Data (at period end): Cash and cash equivalents and short-term investments ...Total assets ...Long-term...

  • Page 128
    .... When applicable, we exclude the sales in the 53rd week of a 53-week year from the same-store sales calculation. Net sales per square foot was calculated based on total sales for the preceding 12 months as of the ending date of the reporting period divided by the average selling square footage...

  • Page 129
    ... foods, to communities that might not otherwise have convenient access at value prices. To further expand this opportunity, we opened 12 new Dollar General Market stores in 2011. Our second priority is to increase gross profit through effective category management, the expansion of private...

  • Page 130
    ... stock. • During 2011, we opened 625 new stores, remodeled or relocated 575 stores, and closed 60 stores. Included in these totals are 12 new and 25 remodeled Dollar General Market stores. As discussed in more detail below, in recent years, we have generated significant cash flows from operating...

  • Page 131
    ... most critical financial metrics for 10-K • Same-store sales growth; • Sales per square foot; • Gross profit, as a percentage of sales; • Selling, general and administrative expenses, as a percentage of sales; • Operating profit; • Inventory turnover; • Cash flow; • Net income; 31

  • Page 132
    ... 31. Fiscal year 2011 was a 53-week accounting period and fiscal years 2010 and 2009 were 52-week accounting periods. 10-K Seasonality. The nature of our business is seasonal to a certain extent. Primarily because of sales of holiday-related merchandise, sales in our fourth quarter (November...

  • Page 133
    ...week as there was no comparable week in 2010. Net sales for the 53rd week of 2011 totaled $289.3 million. The remainder of the increase in sales in 2011 was attributable to new stores, partially offset by sales from closed stores. The increase in sales reflects increased customer traffic and average...

  • Page 134
    ... efforts and increased sales volumes which have contributed to our ability to reduce purchase costs from our vendors. Our merchandising team continues to work closely with our vendors to provide quality merchandise at value prices to meet our customers' demands. In 2010 we recorded a LIFO provision...

  • Page 135
    ... rate than the increase in sales, primarily as a result of increased usage as a percentage of total transactions. As noted above, SG&A in 2010 included expenses (primarily share-based compensation) totaling $19.7 million, relating to two secondary offerings of our common stock. SG&A in 2009 included...

  • Page 136
    ... various federal jobs credits (primarily the Work Opportunity Tax Credit or WOTC) that we receive have generally expired for employees hired after December 31, 2011. Barring re-enactment of these credits by Congress, the benefit realized by the company associated with jobs credits in 2012 will be...

  • Page 137
    ... store growth beginning in 2009 and currently plan to continue that strategy in 2012 and for the foreseeable future. At February 3, 2012, we had total outstanding debt (including the current portion of long-term obligations) of $2.62 billion, which includes our senior secured asset-based...

  • Page 138
    ...secured credit agreement for the Term Loan Facility requires us to prepay outstanding term loans, subject to certain exceptions, with: • 50% of our annual excess cash flow (as defined in the credit agreement) which will be reduced to 25% and 0% if we achieve and maintain a total net leverage ratio...

  • Page 139
    ... indenture dated as of July 6, 2007 governing the Senior Notes pursuant to a notice dated May 31, 2011. The pretax losses on these transactions are reflected in Other (income) expense in our consolidated statement of income for 2011. We funded the redemption price for the Senior Notes with cash on...

  • Page 140
    ... defined as our total debt secured by liens or similar encumbrances less cash and cash equivalents. EBITDA is defined as income (loss) from continuing operations before cumulative effect of change in accounting principles plus interest and other financing costs, net, provision for income taxes, and...

  • Page 141
    ... for share-based awards . Litigation settlement and related costs, net Indirect merger-related costs ...Other non-cash charges (including LIFO) ... Total Adjustments ...Adjusted EBITDA ...Interest Rate Swaps We use interest rate swaps to minimize the risk of adverse changes in interest rates. These...

  • Page 142
    ... obligations and commercial commitments as of February 3, 2012 (in thousands): Contractual obligations Total Payments Due by Period 1 year 1 - 3 years 3 - 5 years 5+ years 10-K Long-term debt obligations Capital lease obligations . . Interest(a) ...Self-insurance liabilities(b) Operating leases...

  • Page 143
    ... the senior secured term loan facility net of the effect of interest rate swaps. (b) We retain a significant portion of the risk for our workers' compensation, employee health insurance, general liability, property loss and automobile insurance. As these obligations do not have scheduled maturities...

  • Page 144
    ... 2011, concurrent with the closing of a secondary offering in December 2011, Dollar General purchased 4,915,637 shares of Common Stock from Buck Holdings, L.P. for an aggregate purchase price of $185 million. Other Considerations We have no current plans to pay any cash dividends on our common stock...

  • Page 145
    .... The timing of interest and certain other accruals and the related payments were affected by the 53rd week in 2011. Partially offsetting this increase in cash flows were an increase in income taxes paid in 2011 compared to 2010 due to increased net income and changes in inventory balances, which...

  • Page 146
    ... we paid a dividend and related amounts totaling $239.7 million using cash generated from operations. Critical Accounting Policies and Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and...

  • Page 147
    ... uniform in terms of its cost and selling price relationship and turnover; • applying the RIM to transactions over a period of time that include different rates of gross profit, such as those relating to seasonal merchandise; • inaccurate estimates of inventory shrinkage between the date of the...

  • Page 148
    ... may include projecting future cash flows, determining appropriate discount rates and other assumptions. Projections are based on management's best estimates given recent financial performance, market trends, strategic plans and other available information which in recent years have been materially...

  • Page 149
    ... life of the lease. Our estimate of undiscounted future cash flows over the lease term is based upon historical operations of the stores and estimates of future store profitability which encompasses many factors that are subject to variability and are difficult to predict. If a long-lived asset is...

  • Page 150
    ... of the fair value of our common stock, the term that the options are expected to be outstanding, the historical volatility of our stock price, applicable interest rates and the dividend yield of our stock. Other factors involving judgments that affect the expensing of share-based payments include...

  • Page 151
    discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are ...

  • Page 152
    ...-tax earnings and cash flows; whereas a change in interest rates on fixed rate debt impacts the economic fair value of debt but not our pre-tax earnings and cash flows. Our interest rate swaps qualify for hedge accounting as cash flow hedges. Therefore, changes in market fluctuations related to the...

  • Page 153
    ...General Corporation and subsidiaries as of February 3, 2012 and January 28, 2011, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended February 3, 2012. These financial statements are the responsibility of the Company...

  • Page 154
    DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) February 3, 2012 January 28, 2011 ASSETS Current assets: Cash and cash equivalents ...Merchandise inventories ...Prepaid expenses and other current assets ...Total current assets ...Net ...

  • Page 155
    DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) For the Year Ended January 28, January 29, 2011 2010 February 3, 2012 Net sales ...Cost of goods sold ...Gross profit ...Selling, general and administrative expenses ...Operating ...

  • Page 156
    ...expense of $2,553 ...Comprehensive income ...Issuance of common stock ...Cash dividends, $0.7525 per common share, and related amounts ...Share-based compensation expense ...Tax benefit from stock option exercises Issuance of common stock under stock incentive plans ...Other equity settlements under...

  • Page 157
    DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year Ended February 3, January 28, January 29, 2012 2011 2010 Cash flows from operating activities: Net income ...Adjustments to reconcile net income to net cash provided by activities: ...

  • Page 158
    ... 3, 2012, the Company maintained cash balances to meet a $20 million minimum threshold set by insurance regulators, as further described below under ''Insurance liabilities.'' Investments in debt and equity securities The Company accounts for investments in debt and marketable equity securities as...

  • Page 159
    ... inventory method, the impacts of rising or falling market price changes increase or decrease cost of sales (the LIFO provision or benefit). The Company recorded a LIFO provision of $47.7 million in 2011, a LIFO provision of $5.3 million in 2010, and a LIFO benefit of $2.5 million in 2009. The 2011...

  • Page 160
    ... capitalized in 2011. No interest costs were capitalized in 2010 or 2009. Impairment of long-lived assets When indicators of impairment are present, the Company evaluates the carrying value of long-lived assets, other than goodwill, in relation to the operating performance and future cash flows or...

  • Page 161
    ... presentation and accounting policies (Continued) estimated based primarily upon estimated future cash flows (discounted at the Company's credit adjusted risk-free rate) or other reasonable estimates of fair market value. Assets to be disposed of are adjusted to the fair value less the cost to sell...

  • Page 162
    ... related to its self insured exposures. ARIC currently insures no unrelated third-party risk. As a result of a merger transaction, in 2007 the Company recorded its assumed self-insurance reserves at their present value in accordance with applicable accounting standards, using a discount rate...

  • Page 163
    ... FINANCIAL STATEMENTS (Continued) 1. Basis of presentation and accounting policies (Continued) long-term portion in Other liabilities in the consolidated balance sheets, and totaled approximately $31.3 million and $23.2 million at February 3, 2012 and January 28, 2011, respectively. The Company...

  • Page 164
    DOLLAR GENERAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. Basis of presentation and accounting policies (Continued) Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to...

  • Page 165
    ... merchandise returns is based on the Company's prior experience. The Company records gain contingencies when realized. The Company recognizes gift card sales revenue at the time of redemption. The liability for the gift cards is established for the cash value at the time of purchase. The liability...

  • Page 166
    ... FINANCIAL STATEMENTS (Continued) 1. Basis of presentation and accounting policies (Continued) Vendor funding for cooperative advertising offset reported expenses by $20.8 million, $14.2 million and $9.0 million in 2011, 2010 and 2009, respectively. Share-based payments The Company recognizes...

  • Page 167
    ... of presentation and accounting policies (Continued) Management estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported...

  • Page 168
    ... 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 in substitution for such adjustment as a result of the dividend. Aggregate payments for the dividend and related share-based amounts totaled...

  • Page 169
    DOLLAR GENERAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. Earnings per share Earnings per share is computed as follows (in thousands except per share data): Net Income 2011 Weighted Average Shares Per Share Amount Basic earnings per share ...Effect of ...

  • Page 170
    ... jobs credits that the Company receives have generally expired for employees hired after December 31, 2011. The 2010 effective tax rate was an expense of 36.3%. This expense was greater than the expected tax rate of 35% due primarily to the inclusion of state income taxes in the total effective...

  • Page 171
    ... 2011 10-K Deferred tax assets: Deferred compensation expense ...Accrued expenses and other ...Accrued rent ...Accrued insurance ...Accrued bonuses ...Interest rate hedges ...Tax benefit of income tax and interest reserves related to uncertain tax positions ...Other ...State tax net operating loss...

  • Page 172
    ... 2011 Current deferred income tax liabilities, net ...Noncurrent deferred income tax liabilities, net ... $ (3,722) $ (36,854) (656,996) (598,565) 10-K Net deferred tax liabilities ... $(660,718) $(635,419) The Company has state net operating loss carryforwards as of February 3, 2012 that total...

  • Page 173
    ... Company's effective income tax rate if the Company were to recognize the tax benefit for these positions. The amounts associated with uncertain tax positions included in income tax expense consists of the following: (In thousands) 2011 2010 2009 Income tax expense (benefit) ...Income tax related...

  • Page 174
    ... Current and long-term obligations (Continued) The amount available under the ABL Facility (including up to $350.0 million for letters of credit) may not exceed the borrowing base (consisting of specified percentages of eligible inventory and credit card receivables less any applicable availability...

  • Page 175
    ... Company repurchased in the open market $65.0 million aggregate principal amount of the Senior Notes at a price of 110.75% plus accrued and unpaid interest. The 2010 repurchases resulted in pretax losses totaling $14.7 million. In connection with the Company's November 2009 initial public offering...

  • Page 176
    ... at February 3, 2012 Assets: Trading securities(a) ...Liabilities: Long-term obligations(b) . Derivative financial instruments(c) ...Deferred compensation(d) ... $ 6,781 2,647,697 - 18,947 $ - $- - - - $ 6,781 2,667,281 10,820 18,947 19,584 10,820 - (a) Reflected at fair value in the...

  • Page 177
    ...to time the Company may enter into derivative financial instruments to protect against future price changes related to these commodity prices. Cash flow hedges of interest rate risk The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its...

  • Page 178
    ...The tables below present the pre-tax effect of the Company's derivative financial instruments as reflected in the consolidated statements of income and shareholders' equity, as applicable: (in thousands) 2011 2010 2009 Derivatives in Cash Flow Hedging Relationships Loss related to effective portion...

  • Page 179
    ... lease term of 10-15 years with multiple renewal options. The Company also has stores subject to shorter-term leases and many of these leases have renewal options. Approximately 26% of the leased stores have provisions for contingent rentals based upon a specified percentage of defined sales volume...

  • Page 180
    DOLLAR GENERAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 9. Commitments and contingencies (Continued) Future minimum payments as of February 3, 2012 for operating leases are as follows: (In thousands) 10-K 2012 ...2013 ...2014 ...2015 ...2016 ......

  • Page 181
    ... store managers. The Company opposed the plaintiff's motion. On March 23, 2007, the court conditionally certified a nationwide class. On December 2, 2009, notice was mailed to over 28,000 current or former Dollar General store managers. Approximately 3,950 individuals have opted into the lawsuit...

  • Page 182
    ... addition, the Company has agreed to make certain adjustments to its pay setting policies and procedures for new store managers. If the settlement is approved, the Company expects to implement the new pay policies and practices no later than April 2012. Documents related to the parties' request for...

  • Page 183
    ... loss or range of loss in such a scenario; however, if the Company is not successful in defending this action, its resolution could have a material adverse effect on the Company's financial statements as a whole. On June 16, 2010, a lawsuit entitled Shaleka Gross, et al v. Dollar General Corporation...

  • Page 184
    ... General Corporation CDP/SERP Plan, for a select group of management and other key employees. The Company incurred compensation expense for these plans of approximately $1.7 million, $1.7 million and $1.9 million in 2011, 2010 and 2009, respectively. The CDP/SERP Plan assets are invested in accounts...

  • Page 185
    ... of an earlier change in control or certain public offerings of the Company's common stock. Each of these options, whether Time Options or Performance Options, have a contractual term of 10 years and an exercise price equal to the fair value of the underlying common stock on the date of grant. 10...

  • Page 186
    DOLLAR GENERAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 11. Share-based payments (Continued) The weighted average for key assumptions used in determining the fair value of all options granted in the years ended February 3, 2012, January 28, 2011, and ...

  • Page 187
    DOLLAR GENERAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 11. Share-based payments (Continued) Each of the Company's management-owned shares, Rollover Options, and vested Time and Performance options include certain provisions by which the holder of such ...

  • Page 188
    ...TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 11. Share-based payments (Continued) A summary of Performance Options activity during the period ended February 3, 2012 is as follows: Options Issued Average Exercise Price Remaining Contractual Term in Years Intrinsic Value (Intrinsic value amounts...

  • Page 189
    ... FINANCIAL STATEMENTS (Continued) 11. Share-based payments (Continued) nonvested restricted stock unit awards granted under the plan to non-employee directors generally vest over a three-year period. The fair value method of accounting for share-based awards resulted in share-based compensation...

  • Page 190
    ... 2011, December 2010, and April 2010. The Company did not sell shares of common stock, receive proceeds from the secondary sales, or pay any underwriting fees in connection with any of these secondary offerings. Certain members of the Company's management, including certain of our executive officers...

  • Page 191
    ... and revenues of which are not material. The following net sales data is presented in accordance with accounting standards related to disclosures about segments of an enterprise. (In thousands) 2011 2010 2009 Classes of similar products: Consumables ...Seasonal ...Home products ...Apparel ... 10...

  • Page 192
    ... the first quarter of 2010 the Company incurred share-based compensation expenses of $13.3 million ($8.1 million net of tax, or $0.02 per diluted share) for the accelerated vesting of certain share-based awards in conjunction with a secondary offering of the Company's common stock which is included...

  • Page 193
    ... February 3, 2012 DOLLAR GENERAL GUARANTOR OTHER CONSOLIDATED CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL BALANCE SHEET: ASSETS Current assets: Cash and cash equivalents . Merchandise inventories . . Deferred income taxes ...Prepaid expenses and other current assets ...Net property and...

  • Page 194
    ...) January 28, 2011 DOLLAR GENERAL GUARANTOR OTHER CONSOLIDATED CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL 10-K BALANCE SHEET: ASSETS Current assets: Cash and cash equivalents . Merchandise inventories . . Income taxes receivable ...Deferred income taxes ...Prepaid expenses and other...

  • Page 195
    ... ELIMINATIONS TOTAL STATEMENTS OF INCOME: Net sales ...Cost of goods sold ...Gross profit ...Selling, general and administrative expenses ...Operating profit ...Interest income ...Interest expense ...Other (income) expense ...Income (loss) before income taxes ...Income tax expense (benefit) Equity...

  • Page 196
    ... SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 16. Guarantor subsidiaries (Continued) For the year ended January 29, 2010 DOLLAR GENERAL GUARANTOR OTHER CONSOLIDATED CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL STATEMENTS OF INCOME: Net sales ...Cost of goods sold...

  • Page 197
    ... 3, 2012 DOLLAR GENERAL CORPORATION STATEMENTS OF CASH FLOWS: Cash flows from operating activities: Net income ...Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization ...Deferred income taxes ...Tax benefit of stock options ...Loss...

  • Page 198
    ...28, 2011 DOLLAR GENERAL CORPORATION STATEMENTS OF CASH FLOWS: Cash flows from operating activities: Net income ...Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization ...Deferred income taxes ...Tax benefit of stock options ...Loss...

  • Page 199
    ..., 2010 DOLLAR GENERAL CORPORATION STATEMENTS OF CASH FLOWS: Cash flows from operating activities: Net income ...Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization . . Deferred income taxes ...Tax benefit of stock options ...Loss...

  • Page 200
    ... as they are identified. Based on its assessment, management has concluded that our internal control over financial reporting is effective as of February 3, 2012. Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated financial statements, has issued an...

  • Page 201
    ... as of February 3, 2012 and January 28, 2011, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended February 3, 2012, of Dollar General Corporation and subsidiaries and our report dated March 22, 2012 expressed an...

  • Page 202
    ...the quarter ended February 3, 2012 in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION Not applicable. 10...

  • Page 203
    ... Beneficial Ownership Reporting Compliance'' in the 2012 Proxy Statement, which information under such caption is incorporated herein by reference. (c) Code of Business Conduct and Ethics. We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and Board...

  • Page 204
    ...3, 2012: Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of...

  • Page 205
    ... Statements of Cash Flows Notes to Consolidated Financial Statements All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, are inapplicable or the information is included in the Consolidated Financial Statements...

  • Page 206
    ... of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DOLLAR GENERAL CORPORATION Date: March 22, 2012 By: /s/ RICHARD W. DREILING Richard W. Dreiling, Chairman and Chief Executive Officer 10...

  • Page 207
    Name Title Date /s/ WILLIAM C. RHODES, III WILLIAM C. RHODES, III Director March 21, 2012 /s/ DAVID B. RICKARD DAVID B. RICKARD Director March 21, 2012 10-K 107

  • Page 208
    ... 3.2 to Dollar General Corporation's Current Report on Form 8-K dated November 18, 2009, filed with the SEC on November 18, 2009 (file no. 001-11421)) Form of Stock Certificate for Common Stock (incorporated by reference to Exhibit 4.1 to Dollar General Corporation's Registration Statement on Form...

  • Page 209
    ... Rights Agreement, dated July 6, 2007, among Buck Acquisition Corp., Dollar General Corporation, the guarantors named therein and the initial purchasers named therein (incorporated by reference to Exhibit 4.10 to Dollar General Corporation's Current Report on Form 8-K dated July 6, 2007, filed with...

  • Page 210
    ... reference to Exhibit 4.4 to Dollar General Corporation's Current Report on Form 8-K dated July 6, 2007, filed with the SEC on July 12, 2007 (file no. 001-11421)) Supplement No.1, dated as of September 11, 2007, to the Security Agreement, between DC Financial, LLC, as New Grantor, and Citicorp North...

  • Page 211
    ... 4.7 to Dollar General Corporation's Current Report on Form 8-K dated July 6, 2007, filed with the SEC on July 12, 2007 (file no. 001-11421)) Supplement No. 1, dated as of September 11, 2007, to the ABL Security Agreement, between DC Financial, LLC, as New Grantor, and The CIT Group/Business Credit...

  • Page 212
    ... officers of Dollar General Corporation (incorporated by reference to Exhibit 10.3 to Dollar General Corporation's Registration Statement on Form S-4 (file no. 333-148320))* Form of Stock Option Agreement, adopted on May 24, 2011, for Stock Option Grants to Certain Newly Hired and Promoted Employees...

  • Page 213
    ...11421))* Amendment to Management Stockholder's Agreement among Dollar General Corporation, Buck Holdings, L.P. and key employees of Dollar General Corporation (post-July 2007 grant group) (incorporated by reference to Exhibit 10.3 to Dollar General Corporation's Quarterly Report on Form 10-Q for the...

  • Page 214
    ... on June 1, 2011 (file no. 001-11421))* Summary of Dollar General Corporation Life Insurance Program as Applicable to Executive Officers (incorporated by reference to Exhibit 10.19 to Dollar General Corporation's Annual Report on Form 10-K for the fiscal year ended February 2, 2007, filed with the...

  • Page 215
    ... 10.35 to Dollar General Corporation's Annual Report on Form 10-K for the fiscal year ended January 28, 2011, filed with the SEC on March 22, 2011 (file no. 001-11421))* Stock Option Agreement, dated as of March 24, 2010, by and between Dollar General Corporation and John Flanigan (incorporated by...

  • Page 216
    ... 10.41 to Dollar General Corporation's Annual Report on Form 10-K for the fiscal year ended January 28, 2011, filed with the SEC on March 22, 2011 (file no. 001-11421))* Stock Option Agreement, dated as of March 24, 2010, by and between Dollar General Corporation and Robert Ravener (incorporated...

  • Page 217
    ... of Independent Registered Public Accounting Firm Powers of Attorney (included as part of the signature pages hereto) Certifications of CEO and CFO under Exchange Act ...Presentation Linkbase Document XBRL Taxonomy Extension Definition Linkbase Document 10-K Management Contract or Compensatory Plan...

  • Page 218
    ... Krumholz Real Estate Maurice A. Laliberte Lease Administration Executive Vice Presidents David M. Tehle†Chief Financial Officer Joseph L. Bandlow, Jr. Transportation Lawrence P. LeBlanc Talent Management & Rewards Mark A. Banister In-Store Experience John W. Flanigan†Global Supply Chain...

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