Dollar General 2013 Annual Report Download - page 34

was entered into and subsequently amended in the ordinary course of business, was made on
substantially the same terms, including interest rates and collateral, as those prevailing at the time for
comparable loans with persons not related to the lender and did not involve more than the normal risk
of collectability or present other unfavorable features. We paid approximately $1.1 million of interest
on the revolving credit facility during fiscal 2013, including less than $120,000 of interest to affiliates of
Goldman, Sachs & Co.
On April 11, 2013, Dollar General consummated a refinancing pursuant to which it terminated
the senior secured term loan facility and the senior secured asset-based revolving credit facility, entered
into a new five-year unsecured credit agreement, and issued senior notes due in 2018 and 2023, in each
case as further described below.
The new senior unsecured credit facilities (the ‘‘Facilities’’) consist of a $1.0 billion senior
unsecured term loan facility (the ‘‘Term Facility’’) and an $850.0 million senior unsecured revolving
credit facility (the ‘‘Revolving Facility’’), which provides for the issuance of letters of credit up to
$250.0 million. Dollar General may request, subject to agreement by one or more lenders, increased
revolving commitments and/or incremental term loan facilities in an aggregate amount of up to
$150.0 million. An affiliate of Goldman, Sachs & Co. serves as a lender and an agent, and served as an
arranger, under the Facilities for which it received fees of $0.7 million during 2013. The Revolving
Facility commitment of the affiliate of Goldman, Sachs & Co. is $73.5 million. We paid approximately
$12.5 million of interest on the Facilities during fiscal 2013, including approximately $151,000 of interest
to affiliates of Goldman, Sachs & Co. As of January 31, 2014, Dollar General had a principal balance
of $1.0 billion under the Term Facility, outstanding letters of credit of $27.2 million under the
Revolving Facility and $822.8 million of borrowing availability under the Revolving Facility.
On April 11, 2013, Dollar General issued $400.0 million aggregate principal amount of 1.875%
senior notes due 2018 (the ‘‘2018 Senior Notes’’), net of discount of $0.5 million, which mature on
April 15, 2018; and issued $900.0 million aggregate principal amount of 3.25% senior notes due 2023
(the ‘‘2023 Senior Notes’’), net of discount of $2.4 million, which mature on April 15, 2023. KKR and
Goldman, Sachs & Co. served as underwriters for the issuance of the 2018 Senior Notes and the 2023
Senior Notes for which they received underwriting fees of approximately $0.7 million and $1.5 million,
respectively.
Each of KKR and Goldman, Sachs & Co., either directly or through affiliates, has ownership
interests in a broad range of companies (‘‘Portfolio Companies’’) with whom we may from time to time
enter into commercial transactions in the ordinary course of business, primarily for the purchase of
goods and services. We believe that none of our transactions or arrangements with Portfolio Companies
is significant enough to be considered material to KKR or Goldman, Sachs & Co. or to our business or
shareholders. In 2013, the largest amount paid to a Portfolio Company was approximately
$109.3 million paid to a KKR Portfolio Company in the ordinary course of business for the purchase of
merchandise for resale. This amount represented less than 3.0% of the vendor’s revenues for its last
completed fiscal year and less than 1.0% of our revenues for 2013.
Our Board member, Mr. Calbert, served as an executive of KKR until 2014 and continues to
serve as a consultant to KKR. Our former Board member, Mr. Agrawal, serves as an executive of
KKR, while our former Board member, Mr. Jones, serves as a Managing Director of Goldman,
Sachs & Co. KKR indirectly owned, through its investment in Buck Holdings, L.P., in excess of 5% of
the shares of our common stock during a portion of 2013. Buck Holdings, L.P. sold all of its shares in
Dollar General in December 2013.
See ‘‘Director Independence’’ for a discussion of a familial relationship between Ms. Cochran
and one of our non-executive officers and compensation paid to that officer during 2013 and 2014.
Interlocks. Mr. Dreiling served as a manager of Buck Holdings, LLC for which
Messrs. Calbert, Agrawal and Jones served as managers. Buck Holdings, LLC was dissolved on
January 8, 2014. Messrs. Calbert and Jones served on our CNG Committee through March 31, 2013.
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