Dollar General 2011 Annual Report Download - page 117

10-K
economically reasonable to insure, such as losses due to acts of war, employee and certain other crime
and some natural disasters. If we incur these losses and they are material, our business could suffer.
Certain material events may result in sizable losses for the insurance industry and adversely impact the
availability of adequate insurance coverage or result in excessive premium increases. To offset negative
insurance market trends, we may elect to self-insure, accept higher deductibles or reduce the amount of
coverage in response to these market changes. In addition, we self-insure a significant portion of
expected losses under our workers’ compensation, automobile liability, general liability and group
health insurance programs. Unanticipated changes in any applicable actuarial assumptions and
management estimates underlying our recorded liabilities for these losses, including expected increases
in medical and indemnity costs, could result in materially different expenses than expected under these
programs, which could have a material adverse effect on our financial condition and results of
operations. In addition, we are evaluating the potential future impact of recently enacted
comprehensive healthcare reform legislation, which may cause our healthcare costs to increase.
Although we continue to maintain property insurance for catastrophic events at our store support
center and distribution centers, we are effectively self-insured for other property losses. If we
experience a greater number of these losses than we anticipate, our financial performance could be
adversely affected.
If we fail to protect our brand name, competitors may adopt tradenames that dilute the value of our
brand name.
We may be unable or unwilling to strictly enforce our trademarks in each jurisdiction in which we
do business. Also, we may not always be able to successfully enforce our trademarks against
competitors, or against challenges by others. Our failure to successfully protect our trademarks could
diminish the value and efficacy of our brand recognition, and could cause customer confusion, which
could, in turn, adversely affect our sales and profitability.
Our success depends on our executive officers and other key personnel. If we lose key personnel or are
unable to hire additional qualified personnel, our business may be harmed.
Our future success depends to a significant degree on the skills, experience and efforts of our
executive officers and other key personnel. The loss of the services of any of our executive officers,
particularly Richard W. Dreiling, our Chief Executive Officer, could have a material adverse effect on
our operations. Our future success will also depend on our ability to attract and retain qualified
personnel and a failure to attract and retain new qualified personnel could have an adverse 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 with credit card sales, we transmit confidential credit and debit card information. We
also have access to, collect or maintain private or confidential information regarding our customers and
employees, as well as our business. We have procedures and technology in place to safeguard our
customers’ debit and credit card information, our employees’ private data, and our confidential business
information. However, third parties may have the technology or know-how to breach the security of this
information, and our security measures and those of our technology vendors may not effectively
prohibit others from obtaining improper access to this information. A security breach of any kind could
expose us to risks of data loss, litigation, government enforcement actions and costly response
measures, and could seriously disrupt our operations. Any resulting negative publicity could significantly
harm our reputation which could cause us to lose market share and have an adverse effect on our
financial results.
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