Dollar General 2011 Annual Report Download - page 189

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED 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
expense (a component of SG&A expenses) and a corresponding reduction in net income before income
taxes as follows:
Equity
Stock Appreciation Restricted Restricted
(In thousands) Options Rights Stock Units Stock Total
Year ended February 3, 2012
Pre-tax ............... $15,121 $ 8,731 $129 $ — $23,981
Net of tax ............ $ 9,208 $ 5,317 $ 79 $ — $14,604
Year ended January 28, 2011
Pre-tax ............... $12,722 $17,366 $ 83 $ — $30,171
Net of tax ............ $ 7,755 $10,587 $ 51 $ — $18,393
Year ended January 29, 2010
Pre-tax ............... $11,686 $ 7,237 $840 $2,482 $22,245
Net of tax ............ $ 7,138 $ 4,420 $513 $1,516 $13,587
12. Related party transactions
On July 6, 2007, the Company consummated a merger transaction, and as a result, substantially all
of the Company’s outstanding common stock became held by an entity controlled by investment funds
affiliated with KKR. The aggregate purchase price was funded primarily through debt financings as
described more fully in Note 6 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’’).
Affiliates of certain of the Investors participated as (i) lenders in the Company’s Credit Facilities
discussed in Note 6; (ii) initial purchasers of the Company’s Notes discussed in Note 6;
(iii) counterparties to certain interest rate swaps discussed in Note 8 and (iv) as advisors in the merger
transaction. Affiliates of KKR and Goldman, Sachs & Co. indirectly own a substantial portion of the
Company’s common stock, and the Company repurchased a portion of the shares held by these
affiliates in December 2011 as discussed in Note 2. Two of KKR’s members and a Managing Director
of Goldman, Sachs & Co. serve on the Company’s Board of Directors.
Affiliates of KKR and Goldman, Sachs & Co. (among other entities) may be lenders under the
Term Loan Facility discussed in detail in Note 6. The Company repaid a portion of the principal
balance on the Term Loan Facility during 2009 as discussed in Note 6 and approximately $66.4 million,
$53.4 million and $74.8 million of interest on the Term Loan Facility during 2011, 2010 and 2009,
respectively.
Goldman, Sachs & Co. is a counterparty to an amortizing interest rate swap with a notional
amount of $116.7 million and $323.3 million as of February 3, 2012 and January 28, 2011, respectively,
entered into in connection with the Term Loan Facility. The Company paid Goldman, Sachs & Co.
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