Dollar General 2011 Annual Report Download - page 167

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Basis 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 amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Accounting standards
In June 2011, the FASB issued an accounting standards update which revises the manner in which
entities present comprehensive income in their financial statements. The new standard removes the
presentation options in current guidance and requires entities to report components of comprehensive
income in either a continuous statement of comprehensive income or separate but consecutive
statements. The new standard does not change the items that must be reported in other comprehensive
income. In addition, in December 2011, the FASB issued a related amendment which defers the
requirement to present components of reclassifications of other comprehensive income on the face of
the income statement. For public entities, the amendments are effective for fiscal years, and interim
periods within those years, beginning after December 15, 2011. The Company will adopt this guidance
in the first quarter of 2012, and does not expect such adoption to have a material effect on its
consolidated financial statements.
Reclassifications
Certain reclassifications of the 2010 and 2009 amounts have been made to conform to the 2011
presentation.
2. Common stock transactions
On November 30, 2011, the Company’s Board of Directors authorized a $500 million common
stock repurchase program. Under the program, shares of the Company’s common stock may be
repurchased from time to time in open market transactions or in privately negotiated purchases, which
could include repurchases from the Company’s controlling shareholder, Buck Holdings, L.P. (which is
controlled by affiliates of Kohlberg Kravis Roberts & Co., L.P. (‘‘KKR’’) and Goldman Sachs & Co), or
other related parties if appropriate. The timing and actual number of shares purchased will depend on
a variety of factors, such as price, market conditions and other factors. Repurchases under the program
may be funded from available cash or borrowings under the Company’s revolving credit facility. The
repurchase authorization has no expiration date. In connection with the repurchase program, on
December 12, 2011, the Company repurchased 4,915,637 shares from Buck Holdings, L.P. for
$185 million.
On November 18, 2009, the Company completed an initial public offering of common stock. The
Company issued 22,700,000 shares in the offering, and Buck Holdings, L.P. sold an additional
16,515,000 outstanding shares. Net proceeds to the Company from the offering of $446.0 million were
used to redeem outstanding debt, as discussed in more detail in Note 6 below. The Company paid
certain fees to KKR and Goldman, Sachs & Co. in connection with the offering, including fees paid to
terminate an advisory agreement with these parties as discussed in more detail in Note 12 below. The
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