Dollar General 2008 Annual Report Download - page 41

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activities. During that period, we expanded the number of stores we operate by approximately
5% (433 stores), remodeled or relocated over 9% of our currently operated stores (768 stores),
and incurred approximately $607 million in capital expenditures. As noted above, we made
certain strategic decisions which slowed our store growth in 2007 and 2008, but we plan to
accelerate store growth again in 2009.
At January 30, 2009, we had total outstanding debt (including the current portion of long-
term obligations) of $4.14 billion. We also had an additional $932.8 million available for
borrowing under our senior secured asset-based revolving credit facility at that date. Our
liquidity needs are significant, primarily due to our debt service and other obligations. Our
substantial debt could adversely affect our ability to raise additional capital to fund our
operations, limit our ability to react to changes in the economy or our industry, expose us to
interest rate risk to the extent of our variable rate debt and prevent us from meeting our
obligations under our outstanding debt securities.
Management believes our cash flow from operations and existing cash balances,
combined with availability under the Credit Facilities (described below), will provide sufficient
liquidity to fund our current obligations, projected working capital requirements and capital
spending for a period that includes the next twelve months.
Credit Facilities
Overview. We have two senior secured credit facilities (the “Credit Facilities”) which
provide financing of up to $3.425 billion. The Credit Facilities consist of a $2.3 billion senior
secured term loan facility and a senior secured asset-based revolving credit facility of up to
$1.125 billion (of which up to $350.0 million is available for letters of credit), subject to
borrowing base availability. The asset-based revolving credit facility includes borrowing
capacity available for letters of credit and for short-term borrowings referred to as swingline
loans.
The agreements governing the Credit Facilities provide that we have the right at any time
to request up to $325.0 million of incremental commitments under one or more incremental term
loan facilities and/or asset-based revolving credit facilities. The lenders under these facilities are
not under any obligation to provide any such incremental commitments and any such addition of
or increase in commitments will be subject to our not exceeding certain senior secured leverage
ratios and certain other customary conditions precedent. Our ability to obtain extensions of
credit under these incremental commitments also will be subject to the same conditions as
extensions of credit under the Credit Facilities.
The amount available under the senior secured asset-based credit facility (including
letters of credit) shall not exceed the sum of the tranche A borrowing base and the tranche A-1
borrowing base. The tranche A borrowing base equals the sum of (i) 85% of the net orderly
liquidation value of all our eligible inventory and that of each guarantor thereunder and (ii) 90%
of all our accounts receivable and credit/debit card receivables and that of each guarantor
thereunder, in each case, subject to a reserve equal to the principal amount of the 2010 Notes that
remain outstanding at any time and other customary reserves and eligibility criteria. An