Dollar General 2009 Annual Report Download - page 50

(d) Reflects pro forma interest expense resulting from our post-merger capital structure as follows:
Predecessor
Period Ended
July 6, 2007
(amounts in millions)
Revolving credit facility(1) ........................................ $ 8.9
Term loan facilities(2) ........................................... 74.1
Notes(3) ..................................................... 87.9
Letter of credit fees(4) .......................................... 0.7
Bank commitment fees(5) ........................................ 1.0
Other existing debt obligations(6) ................................... 3.0
Total cash interest expense ........................................ 175.6
Amortization of capitalized debt issuance costs and debt discount(7) ......... 4.1
Amortization of discounted liabilities(8) .............................. 3.5
Other(9) ..................................................... 0.6
Total pro forma interest expense .................................... 183.8
Less historical interest expense ..................................... (10.3)
Net adjustment to interest expense .................................. $173.5
(1) The $1.125 billion revolving credit facility carries an interest rate of 3-month LIBOR of 5.32%
plus 1.50% for tranche A loans and 3-month LIBOR of 5.32% plus 2.25% for tranche A-1
loans. Reflects assumed borrowings of $175.0 million under tranche A and $125.0 million
under tranche A-1. Such levels of borrowings will fluctuate in future periods dependent upon
short term cash needs. Changes in the levels of borrowings would impact interest expense.
(2) Reflects interest on the $2.3 billion term loan facility at a rate of LIBOR plus 2.75%. To
hedge against interest rate risk, we have entered into a swap agreement with respect to a
$2.0 billion notional amount for 4.93%. This swap agreement became effective as a result of
the acquisition on July 31, 2007 and will amortize on a quarterly basis until maturity at
July 31, 2012. The unhedged portion of the facility is reflected at an interest rate of LIBOR of
5.32% plus 2.75%.
(3) Reflects interest on the 10.625% senior notes and 11.875%/12.625% senior subordinated
notes. Assumes the cash interest payment option at a rate of 11.875% has been elected with
respect to all of the senior subordinated notes.
(4) Represents fees on balances of trade letters of credit of $141.2 million at 0.75% and standby
letters of credit of $40.7 million at 1.50%.
(5) Represents commitment fees of 0.375% on the $612.1 million unutilized balance of the
revolving credit facility at July 6, 2007. Outstanding letters of credit noted in (4) above reduce
the availability under the revolving credit facility.
(6) Represents historical interest expense on other existing indebtedness.
(7) Represents debt issuance costs associated with the new bank facilities amortized using the
effective interest method over 6 years for the revolving facility, 7 years for the term loan
facility, 8 years for the senior notes, 10 years for the senior subordinated notes and 8 years for
other capitalized debt issuance costs. Also includes the amortization of debt discount of the
senior notes.
(8) Represents interest expense on long-term liabilities which were discounted as a result of our
2007 merger.
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