Guarantor subsidiaries

9 Months Ended

Oct. 28, 2011

Guarantor subsidiaries

Guarantor subsidiaries

12. 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.

	October 28, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES		OTHER SUBSIDIARIES		ELIMINATIONS			CONSOLIDATEDTOTAL
BALANCE SHEET:
ASSETS
Current assets:
Cash and cash equivalents	$	767		$	94,025	$	23,788	$	—		$	118,580
Merchandise inventories	—			2,089,722		—		—			2,089,722
Income taxes receivable	65,785			3,398		—		(20,376		)	48,807
Deferred income taxes	8,828			—		6,900		(15,728		)	—
Prepaid expenses and other current assets	758,754			4,520,553		9,111		(5,152,672		)	135,746
Total current assets	834,134			6,707,698		39,799		(5,188,776		)	2,392,855
Net property and equipment	110,458			1,606,084		255		—			1,716,797
Goodwill	4,338,589			—		—		—			4,338,589
Intangible assets, net	1,199,200			41,533		—		—			1,240,733
Deferred income taxes	—			—		49,738		(49,738		)	—
Other assets, net	6,173,056			13,998		322,233		(6,462,379		)	46,908
Total assets	$	12,655,437		$	8,369,313	$	412,025	$	(11,700,893	)	$	9,735,882
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term obligations	$	—		$	763	$	—	$	—		$	763
Accounts payable	4,528,433			1,693,176		50,944		(5,140,009		)	1,132,544
Accrued expenses and other	92,826			272,915		61,899		(12,663		)	414,977
Income taxes payable	—			—		21,487		(20,376		)	1,111
Deferred income taxes	—			38,554		—		(15,728		)	22,826
Total current liabilities	4,621,259			2,005,408		134,330		(5,188,776		)	1,572,221
Long-term obligations	2,982,075			3,251,852		—		(3,512,866		)	2,721,061
Deferred income taxes	430,111			266,956		—		(49,738		)	647,329
Other liabilities	60,671			30,896		142,383		—			233,950
Redeemable common stock	7,309			—		—		—			7,309
Shareholders’ equity:
Preferred stock	—			—		—		—			—
Common stock	299,514			23,855		100		(23,955		)	299,514
Additional paid-in capital	2,957,267			431,253		19,900		(451,153		)	2,957,267
Retained earnings	1,305,107			2,359,093		115,312		(2,474,405		)	1,305,107
Accumulated other comprehensive loss	(7,876		)	—		—		—			(7,876		)
Total shareholders’ equity	4,554,012			2,814,201		135,312		(2,949,513		)	4,554,012
Total liabilities and shareholders’ equity	$	12,655,437		$	8,369,313	$	412,025	$	(11,700,893	)	$	9,735,882

	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 October 28, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF INCOME:
Net sales	$	80,476		$	3,595,224		$	21,340		$	(101,816	)	$	3,595,224
Cost of goods sold	—			2,479,422			—			—			2,479,422
Gross profit	80,476			1,115,802			21,340			(101,816		)	1,115,802
Selling, general and administrative expenses	73,160			814,281			19,260			(101,816		)	804,885
Operating profit	7,316			301,521			2,080			—			310,917
Interest income	(11,269		)	(7,491		)	(5,146		)	23,896			(10		)
Interest expense	54,059			8,465			14			(23,896		)	38,642
Other (income) expense	53			—			—			—			53
Income (loss) before income taxes	(35,527		)	300,547			7,212			—			272,232
Income tax expense (benefit)	(12,715		)	111,788			1,995			—			101,068
Equity in subsidiaries’ earnings, net of taxes	193,976			—			—			(193,976		)	—
Net income	$	171,164		$	188,759		$	5,217		$	(193,976	)	$	171,164

	For the 13 weeks ended October 29, 2010
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF INCOME:
Net sales	$	75,020		$	3,223,427		$	21,888		$	(96,908	)	$	3,223,427
Cost of goods sold	—			2,212,759			—			—			2,212,759
Gross profit	75,020			1,010,668			21,888			(96,908		)	1,010,668
Selling, general and administrative expenses	68,201			748,432			16,609			(96,908		)	736,334
Operating profit	6,819			262,236			5,279			—			274,334
Interest income	(12,244		)	(3,843		)	(4,898		)	20,895			(90		)
Interest expense	70,103			18,021			6			(20,895		)	67,235
Other (income) expense	8,312			—			—			—			8,312
Income (loss) before income taxes	(59,352		)	248,058			10,171			—			198,877
Income tax expense (benefit)	(26,871		)	94,555			3,073			—			70,757
Equity in subsidiaries’ earnings, net of taxes	160,601			—			—			(160,601		)	—
Net income	$	128,120		$	153,503		$	7,098		$	(160,601	)	$	128,120

	For the 39-weeks ended October 28, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF INCOME:
Net sales	$	242,397		$	10,622,115		$	62,735		$	(305,132	)	$	10,622,115
Cost of goods sold	—			7,270,574			—			—			7,270,574
Gross profit	242,397			3,351,541			62,735			(305,132		)	3,351,541
Selling, general and administrative expenses	220,361			2,394,639			59,109			(305,132		)	2,368,977
Operating profit	22,036			956,902			3,626			—			982,564
Interest income	(35,379		)	(17,587		)	(15,640		)	68,551			(55		)
Interest expense	198,097			35,312			28			(68,551		)	164,886
Other (income) expense	60,564			—			—			—			60,564
Income (loss) before income taxes	(201,246		)	939,177			19,238			—			757,169
Income tax expense (benefit)	(73,825		)	351,175			5,644			—			282,994
Equity in subsidiaries’ earnings, net of taxes	601,596			—			—			(601,596		)	—
Net income	$	474,175		$	588,002		$	13,594		$	(601,596	)	$	474,175

	For the 39-weeks ended October 29, 2010
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF INCOME:
Net sales	$	235,606		$	9,548,896		$	63,479		$	(299,085	)	$	9,548,896
Cost of goods sold	—			6,502,493			—			—			6,502,493
Gross profit	235,606			3,046,403			63,479			(299,085		)	3,046,403
Selling, general and administrative expenses	214,273			2,214,507			50,894			(299,085		)	2,180,589
Operating profit	21,333			831,896			12,585			—			865,814
Interest income	(33,651		)	(4,094		)	(14,805		)	52,422			(128		)
Interest expense	227,412			33,576			17			(52,422		)	208,583
Other (income) expense	14,983			—			—			—			14,983
Income (loss) before income taxes	(187,411		)	802,414			27,373			—			642,376
Income tax expense (benefit)	(73,780		)	302,237			8,608			—			237,065
Equity in subsidiaries’ earnings, net of taxes	518,942			—			—			(518,942		)	—
Net income	$	405,311		$	500,177		$	18,765		$	(518,942	)	$	405,311

	For the 39 weeks ended October 28, 2011
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF CASH FLOWS:
Cash flows from operating activities:
Net income	$	474,175		$	588,002		$	13,594		$	(601,596	)	$	474,175
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	24,008			180,666			97			—			204,771
Deferred income taxes	1,527			24,573			(2,123		)	—			23,977
Tax benefit of stock options	(16,101		)	—			—			—			(16,101		)
Loss on debt retirement, net	60,303			—			—			—			60,303
Non-cash share-based compensation	10,969			—			—			—			10,969
Other non-cash gains and losses	562			31,094			—			—			31,656
Equity in subsidiaries’ earnings, net	(601,596		)	—			—			601,596			—
Change in operating assets and liabilities:
Merchandise inventories	—			(350,932		)	—			—			(350,932		)
Prepaid expenses and other current assets	(17,129		)	(13,125		)	(645		)	—			(30,899		)
Accounts payable	21,248			143,080			8			—			164,336
Accrued expenses and other	32,950			50,916			6,127			—			89,993
Income taxes	(48,077		)	(16,644		)	7,146			—			(57,575		)
Other	(2		)	(100		)	(72		)	—			(174		)
Net cash provided by (used in) operating activities	(57,163		)	637,530			24,132			—			604,499
Cash flows from investing activities:
Purchases of property and equipment	(20,956		)	(342,078		)	(65		)	—			(363,099		)
Proceeds from sale of property and equipment	16			713			—			—			729
Net cash provided by (used in) investing activities	(20,940		)	(341,365		)	(65		)	—			(362,370		)
Cash flows from financing activities:
Issuance of common stock	177			—			—			—			177
Repayments of long-term obligations	(910,677		)	(1,031		)	—			—			(911,708		)
Borrowings under revolving credit agreement	1,485,000			—			—			—			1,485,000
Repayments of borrowings under revolving credit agreement	(1,197,200		)	—			—			—			(1,197,200		)
Repurchases of common stock and settlement of equity awards, net of employee taxes paid	(13,365		)	—			—			—			(13,365		)
Tax benefit of stock options	16,101			—			—			—			16,101
Changes in intercompany note balances, net	587,289			(565,513		)	(21,776		)	—			—
Net cash provided by (used in) financing activities	(32,675		)	(566,544		)	(21,776		)	—			(620,995		)
Net increase (decrease) in cash and cash equivalents	(110,778		)	(270,379		)	2,291			—			(378,866		)
Cash and cash equivalents, beginning of period	111,545			364,404			21,497			—			497,446
Cash and cash equivalents, end of period	$	767		$	94,025		$	23,788		$	—		$	118,580

	For the 39 weeks ended October 29, 2010
	DOLLAR GENERAL CORPORATION			GUARANTOR SUBSIDIARIES			OTHER SUBSIDIARIES			ELIMINATIONS			CONSOLIDATEDTOTAL
STATEMENTS OF CASH FLOWS:
Cash flows from operating activities:
Net income	$	405,311		$	500,177		$	18,765		$	(518,942	)	$	405,311
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	24,906			164,795			38			—			189,739
Deferred income taxes	26,633			16,161			(11,174		)	—			31,620
Tax benefit of stock options	(6,413		)	—			—			—			(6,413		)
Loss on debt retirement, net	14,576			—			—			—			14,576
Non-cash share-based compensation	11,620			—			—			—			11,620
Other non-cash gains and losses	953			6,967			—			—			7,920
Equity in subsidiaries’ earnings, net	(518,942		)	—			—			518,942			—
Change in operating assets and liabilities:
Merchandise inventories	—			(366,903		)	—			—			(366,903		)
Prepaid expenses and other current assets	4,601			(30,332		)	(681		)	—			(26,412		)
Accounts payable	2,301			144,634			(2		)	—			146,933
Accrued expenses and other	(969		)	2,200			(140		)	—			1,091
Income taxes	(39,194		)	12,865			22,151			—			(4,178		)
Other	7			(1,113		)	(2		)	—			(1,108		)
Net cash provided by (used in) operating activities	(74,610		)	449,451			28,955			—			403,796
Cash flows from investing activities:
Purchases of property and equipment	(16,115		)	(242,963		)	(165		)	—			(259,243		)
Proceeds from sale of property and equipment	—			868			—			—			868
Net cash provided by (used in) investing activities	(16,115		)	(242,095		)	(165		)	—			(258,375		)
Cash flows from financing activities:
Issuance of common stock	599			—			—			—			599
Repayments of long-term obligations	(129,217		)	(1,437		)	—			—			(130,654		)
Repurchases of common stock and settlement of equity awards, net of employee taxes paid	(5,949		)	—			—			—			(5,949		)
Tax benefit of stock options	6,413			—			—			—			6,413
Changes in intercompany note balances, net	166,591			(138,982		)	(27,609		)	—			—
Net cash provided by (used in) financing activities	38,437			(140,419		)	(27,609		)	—			(129,591		)
Net increase (decrease) in cash and cash equivalents	(52,288		)	66,937			1,181			—			15,830
Cash and cash equivalents, beginning of period	97,620			103,001			21,455			—			222,076
Cash and cash equivalents, end of period	$	45,332		$	169,938		$	22,636		$	—		$	237,906