Guarantor subsidiaries

6 Months Ended

Jul. 29, 2011

Guarantor subsidiaries

Guarantor subsidiaries

11. Guarantor subsidiaries

Certain of the Company’s subsidiaries (the “Guarantors”) have fully and unconditionally guaranteed on a joint and several basis the Company’s obligations under certain outstanding debt obligations. Each of the Guarantors is a direct or indirect wholly-owned subsidiary of the Company. The following consolidating schedules present condensed financial information on a combined basis, in thousands.

	July 29, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES		OTHER SUBSIDIARIES		ELIMINATIONS			CONSOLIDATEDTOTAL
BALANCE SHEET:
ASSETS
Current assets:
Cash and cash equivalents	$	55,434		$	36,613	$	21,003	$	—		$	113,050
Merchandise inventories	—			1,973,863		—		—			1,973,863
Income taxes receivable	64,469			4,700		—		(25,734		)	43,435
Deferred income taxes	9,426			—		14,067		(23,493		)	—
Prepaid expenses and other current assets	846,397			4,574,666		4,312		(5,282,942		)	142,433
Total current assets	975,726			6,589,842		39,382		(5,332,169		)	2,272,781
Net property and equipment	108,515			1,514,223		253		—			1,622,991
Goodwill	4,338,589			—		—		—			4,338,589
Intangible assets, net	1,199,200			46,573		—		—			1,245,773
Deferred income taxes	—			—		49,442		(49,442		)	—
Other assets, net	5,894,512			13,071		320,935		(6,179,549		)	48,969
Total assets	$	12,516,542		$	8,163,709	$	410,012	$	(11,561,160	)	$	9,529,103
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term obligations	$	—		$	963	$	—	$	—		$	963
Accounts payable	4,555,164			1,791,240		50,718		(5,274,173		)	1,122,949
Accrued expenses and other	63,129			251,049		61,214		(8,769		)	366,623
Income taxes payable	—			—		26,544		(25,734		)	810
Deferred income taxes	—			59,099		—		(23,493		)	35,606
Total current liabilities	4,618,293			2,102,351		138,476		(5,332,169		)	1,526,951
Long-term obligations	3,040,467			3,162,953		—		(3,424,012		)	2,779,408
Deferred income taxes	429,986			243,490		—		(49,442		)	624,034
Other liabilities	44,961			29,473		141,441		—			215,875
Redeemable common stock	9,271			—		—		—			9,271
Shareholders’ equity:
Preferred stock	—			—		—		—			—
Common stock	298,842			23,855		100		(23,955		)	298,842
Additional paid-in capital	2,951,761			431,253		19,900		(451,153		)	2,951,761
Retained earnings	1,133,943			2,170,334		110,095		(2,280,429		)	1,133,943
Accumulated other comprehensive loss	(10,982		)	—		—		—			(10,982		)
Total shareholders’ equity	4,373,564			2,625,442		130,095		(2,755,537		)	4,373,564
Total liabilities and shareholders’ equity	$	12,516,542		$	8,163,709	$	410,012	$	(11,561,160	)	$	9,529,103

	January 28, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES		OTHER SUBSIDIARIES		ELIMINATIONS			CONSOLIDATEDTOTAL
BALANCE SHEET:
ASSETS
Current assets:
Cash and cash equivalents	$	111,545		$	364,404	$	21,497	$	—		$	497,446
Merchandise inventories	—			1,765,433		—		—			1,765,433
Income taxes receivable	13,529			—		—		(13,529		)	—
Deferred income taxes	8,877			—		6,825		(15,702		)	—
Prepaid expenses and other current assets	741,352			3,698,117		4,454		(4,338,977		)	104,946
Total current assets	875,303			5,827,954		32,776		(4,368,208		)	2,367,825
Net property and equipment	105,155			1,419,133		287		—			1,524,575
Goodwill	4,338,589			—		—		—			4,338,589
Intangible assets, net	1,199,200			57,722		—		—			1,256,922
Deferred income taxes	—			—		47,690		(47,690		)	—
Other assets, net	5,337,522			12,675		304,285		(5,596,171		)	58,311
Total assets	$	11,855,769		$	7,317,484	$	385,038	$	(10,012,069	)	$	9,546,222
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term obligations	$	—		$	1,157	$	—	$	—		$	1,157
Accounts payable	3,691,564			1,541,593		50,824		(4,330,340		)	953,641
Accrued expenses and other	68,398			226,225		61,755		(8,637		)	347,741
Income taxes payable	11,922			13,246		14,341		(13,529		)	25,980
Deferred income taxes	—			52,556		—		(15,702		)	36,854
Total current liabilities	3,771,884			1,834,777		126,920		(4,368,208		)	1,365,373
Long-term obligations	3,534,447			3,000,877		—		(3,248,254		)	3,287,070
Deferred income taxes	417,874			228,381		—		(47,690		)	598,565
Other liabilities	67,932			27,250		136,400		—			231,582
Redeemable common stock	9,153			—		—		—			9,153
Shareholders’ equity:
Preferred stock	—			—		—		—			—
Common stock	298,819			23,855		100		(23,955		)	298,819
Additional paid-in capital	2,945,024			431,253		19,900		(451,153		)	2,945,024
Retained earnings	830,932			1,771,091		101,718		(1,872,809		)	830,932
Accumulated other comprehensive loss	(20,296		)	—		—		—			(20,296		)
Total shareholders’ equity	4,054,479			2,226,199		121,718		(2,347,917		)	4,054,479
Total liabilities and shareholders’ equity	$	11,855,769		$	7,317,484	$	385,038	$	(10,012,069	)	$	9,546,222

	For the 13-weeks ended July 29, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF INCOME:
Net sales	$	74,404		$	3,575,194		$	22,581		$	(96,985	)	$	3,575,194
Cost of goods sold	—			2,426,852			—			—			2,426,852
Gross profit	74,404			1,148,342			22,581			(96,985		)	1,148,342
Selling, general and administrative expenses	67,640			805,790			21,868			(96,985		)	798,313
Operating profit	6,764			342,552			713			—			350,029
Interest income	(11,688		)	(6,115		)	(5,266		)	23,043			(26		)
Interest expense	69,292			14,396			8			(23,043		)	60,653
Other (income) expense	58,239			—			—			—			58,239
Income (loss) before income taxes	(109,079		)	334,271			5,971			—			231,163
Income tax expense (benefit)	(40,666		)	124,341			1,446			—			85,121
Equity in subsidiaries’ earnings, net of taxes	214,455			—			—			(214,455		)	—
Net income	$	146,042		$	209,930		$	4,525		$	(214,455	)	$	146,042

	For the 13 weeks ended July 30, 2010
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF INCOME:
Net sales	$	73,122		$	3,214,155		$	21,943		$	(95,065	)	$	3,214,155
Cost of goods sold	—			2,178,176			—			—			2,178,176
Gross profit	73,122			1,035,979			21,943			(95,065		)	1,035,979
Selling, general and administrative expenses	66,453			744,212			19,622			(95,065		)	735,222
Operating profit	6,669			291,767			2,321			—			300,757
Interest income	(10,390		)	(3,219		)	(4,954		)	18,531			(32		)
Interest expense	77,852			10,003			6			(18,531		)	69,330
Other (income) expense	6,526			—			—			—			6,526
Income (loss) before income taxes	(67,319		)	284,983			7,269			—			224,933
Income tax expense (benefit)	(24,106		)	105,772			2,072			—			83,738
Equity in subsidiaries’ earnings, net of taxes	184,408			—			—			(184,408		)	—
Net income	$	141,195		$	179,211		$	5,197		$	(184,408	)	$	141,195

	For the 26-weeks ended July 29, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF INCOME:
Net sales	$	161,921		$	7,026,891		$	41,395		$	(203,316	)	$	7,026,891
Cost of goods sold	—			4,791,152			—			—			4,791,152
Gross profit	161,921			2,235,739			41,395			(203,316		)	2,235,739
Selling, general and administrative expenses	147,201			1,580,358			39,849			(203,316		)	1,564,092
Operating profit	14,720			655,381			1,546			—			671,647
Interest income	(24,110		)	(10,096		)	(10,494		)	44,655			(45		)
Interest expense	144,038			26,847			14			(44,655		)	126,244
Other (income) expense	60,511			—			—			—			60,511
Income (loss) before income taxes	(165,719		)	638,630			12,026			—			484,937
Income tax expense (benefit)	(61,110		)	239,387			3,649			—			181,926
Equity in subsidiaries’ earnings, net of taxes	407,620			—			—			(407,620		)	—
Net income	$	303,011		$	399,243		$	8,377		$	(407,620	)	$	303,011

	For the 26-weeks ended July 30, 2010
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF INCOME:
Net sales	$	160,586		$	6,325,469		$	41,591		$	(202,177	)	$	6,325,469
Cost of goods sold	—			4,289,734			—			—			4,289,734
Gross profit	160,586			2,035,735			41,591			(202,177		)	2,035,735
Selling, general and administrative expenses	146,072			1,466,075			34,285			(202,177		)	1,444,255
Operating profit	14,514			569,660			7,306			—			591,480
Interest income	(21,407		)	(5,929		)	(9,907		)	37,205			(38		)
Interest expense	157,309			21,233			11			(37,205		)	141,348
Other (income) expense	6,671			—			—			—			6,671
Income (loss) before income taxes	(128,059		)	554,356			17,202			—			443,499
Income tax expense (benefit)	(46,909		)	207,682			5,535			—			166,308
Equity in subsidiaries’ earnings, net of taxes	358,341			—			—			(358,341		)	—
Net income	$	277,191		$	346,674		$	11,667		$	(358,341	)	$	277,191

	For the 26 weeks ended July 29, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF CASH FLOWS:
Cash flows from operating activities:
Net income	$	303,011		$	399,243		$	8,377		$	(407,620	)	$	303,011
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	16,238			119,568			65			—			135,871
Deferred income taxes	5,478			21,652			(8,994		)	—			18,136
Tax benefit of stock options	(450		)	—			—			—			(450		)
Loss on debt retirement, net	60,303			—			—			—			60,303
Non-cash share-based compensation	6,798			—			—			—			6,798
Other non-cash gains and losses	452			17,257			—			—			17,709
Equity in subsidiaries’ earnings, net	(407,620		)	—			—			407,620			—
Change in operating assets and liabilities:
Merchandise inventories	—			(222,669		)	—			—			(222,669		)
Prepaid expenses and other current assets	(14,841		)	(22,654		)	359			—			(37,136		)
Accounts payable	8,232			158,565			(107		)	—			166,690
Accrued expenses and other	(13,540		)	27,439			4,500			—			18,399
Income taxes	(62,412		)	(17,946		)	12,203			—			(68,155		)
Other	1,355			(1,425		)	2			—			(68		)
Net cash provided by (used in) operating activities	(96,996		)	479,030			16,405			—			398,439
Cash flows from investing activities:
Purchases of property and equipment	(14,330		)	(203,762		)	(31		)	—			(218,123		)
Proceeds from sale of property and equipment	12			461			—			—			473
Net cash used in investing activities	(14,318		)	(203,301		)	(31		)	—			(217,650		)
Cash flows from financing activities:
Issuance of common stock	177			—			—			—			177
Repayments of long-term obligations	(910,677		)	(684		)	—			—			(911,361		)
Borrowings under revolving credit agreement	371,600			—			—			—			371,600
Repayments of borrowings under revolving credit agreement	(25,600		)	—			—			—			(25,600		)
Repurchases of common stock and settlement of equity awards, net of employee taxes paid	(451		)	—			—			—			(451		)
Tax benefit of stock options	450			—			—			—			450
Changes in intercompany note balances, net	619,704			(602,836		)	(16,868		)	—			—
Net cash provided by (used in) financing activities	55,203			(603,520		)	(16,868		)	—			(565,185		)
Net decrease in cash and cash equivalents	(56,111		)	(327,791		)	(494		)	—			(384,396		)
Cash and cash equivalents, beginning of period	111,545			364,404			21,497			—			497,446
Cash and cash equivalents, end of period	$	55,434		$	36,613		$	21,003		$	—		$	113,050

	For the 26 weeks ended July 30, 2010
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF CASH FLOWS:
Cash flows from operating activities:
Net income	$	277,191		$	346,674		$	11,667		$	(358,341	)	$	277,191
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	16,924			109,210			22			—			126,156
Deferred income taxes	6,952			(4,214		)	(7,598		)	—			(4,860		)
Tax benefit of stock options	(5,387		)	—			—			—			(5,387		)
Loss on debt retirement, net	6,387			—			—			—			6,387
Non-cash share-based compensation	8,366			—			—			—			8,366
Other non-cash gains and losses	652			5,814			—			—			6,466
Equity in subsidiaries’ earnings, net	(358,341		)	—			—			358,341			—
Change in operating assets and liabilities:
Merchandise inventories	—			(219,589		)	—			—			(219,589		)
Prepaid expenses and other current assets	3,347			(18,724		)	(445		)	—			(15,822		)
Accounts payable	(8,226		)	122,214			(12		)	—			113,976
Accrued expenses and other	(30,484		)	(5,503		)	151			—			(35,836		)
Income taxes	(1,006		)	8,235			16,040			—			23,269
Other	7			(1,018		)	—			—			(1,011		)
Net cash provided by (used in) operating activities	(83,618		)	343,099			19,825			—			279,306
Cash flows from investing activities:
Purchases of property and equipment	(11,222		)	(151,777		)	(59		)	—			(163,058		)
Proceeds from sale of property and equipment	—			544			—			—			544
Net cash used in investing activities	(11,222		)	(151,233		)	(59		)	—			(162,514		)
Cash flows from financing activities:
Issuance of common stock	401			—			—			—			401
Repayments of long-term obligations	(57,229		)	(908		)	—			—			(58,137		)
Repurchases of common stock and settlement of equity awards, net of employee taxes paid	(5,098		)	—			—			—			(5,098		)
Tax benefit of stock options	5,387			—			—			—			5,387
Changes in intercompany note balances, net	160,729			(140,398		)	(20,331		)	—			—
Net cash provided by (used in) financing activities	104,190			(141,306		)	(20,331		)	—			(57,447		)
Net increase (decrease) in cash and cash equivalents	9,350			50,560			(565		)	—			59,345
Cash and cash equivalents, beginning of period	97,620			103,001			21,455			—			222,076
Cash and cash equivalents, end of period	$	106,970		$	153,561		$	20,890		$	—		$	281,421