UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Tennessee 001-11421 61-0502302
--------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
100 Mission Ridge
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On November 22, 2005, Dollar General Corporation (the "Company") issued a news release regarding results of operations and financial condition for the third quarter ended October 28, 2005. The news release is attached hereto as Exhibit 99 and incorporated by reference as if fully set forth herein.
ITEM 7.01. REGULATION FD DISCLOSURE
The information set forth in Item 2.02 above is incorporated herein by reference. The press release also sets forth information regarding the planned conference call and webcast to discuss third quarter results, the financial outlook for the fiscal 2005 fourth quarter and full year, anticipated 2005 and 2006 new store openings, and other matters.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired. N/A
(b) Pro forma financial information. N/A
(c) Exhibits. See Exhibit Index immediately following the signature page hereto.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
By: /s/ Susan S. Lanigan
------------------------------
Susan S. Lanigan
Executive Vice President
and General Counsel
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99 News release dated November 22, 2005.
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Exhibit 99
Dollar General Reports Third Quarter 2005 EPS of $0.20; Comments on 2005 Outlook and 2006 Store Opening Plans
GOODLETTSVILLE, Tenn.--(BUSINESS WIRE)--Nov. 22, 2005--Dollar
General Corporation (NYSE: DG) today reported net income for the third
quarter of fiscal 2005 of $64.4 million, or $0.20 per share, compared
to net income of $71.1 million, or $0.22 per share, in the third
quarter of fiscal 2004. In 2005, the Company increased the number of
departments utilized for its retail inventory method gross profit
calculation from 10 to 23 (the "RIM expansion"). The impact in the
third quarter of the RIM expansion was a decrease in income before
income taxes of approximately $10.8 million and a decrease in earnings
per share ("EPS") of $0.02.
Net sales for the third quarter ended October 28, 2005, were $2.1
billion, a 9.5 percent increase over net sales of $1.9 billion for the
same period of fiscal 2004. The increase was a result of opening new
stores and a same-store sales increase of 1.4 percent.
As a percentage of sales, gross profit for the fiscal 2005 third
quarter declined to 28.1 percent from 29.5 percent for the comparable
period in fiscal 2004. The decrease in the gross profit rate is
primarily attributable to: 1) lower sales, as a percentage of total
sales, in the Company's seasonal, home products and basic clothing
categories, which have higher than average mark-ups; 2) increased
markdowns as a result of the Company's initiative to reduce per-store
inventory; 3) higher distribution and transportation expenses
primarily attributable to increased fuel costs; and 4) the impact of
the RIM expansion discussed above. These factors were partially offset
by higher average mark-ups in the 2005 period as compared with the
2004 period.
Selling, general and administrative expenses ("SG&A") improved to
23.2 percent of sales for the third quarter of fiscal 2005 versus 23.4
percent of sales during the comparable prior year quarter. The
decrease is attributable to: 1) lower employee incentive compensation
expense based upon the Company's year-to-date fiscal 2005 financial
performance; and 2) a reduction in professional fees primarily due to
the reduction of consulting fees in the 2005 period associated with
the EZstore project and with the Company's Sarbanes-Oxley compliance
efforts. The Company also continued to leverage store labor as a
percentage of sales in the quarter. These items were partially offset
by increased store occupancy and utilities costs. In addition, during
the prior year period the Company incurred certain expenses that did
not recur in the current year period including increased sales and use
tax accruals and a charge related to the expiration of a lease for,
and subsequent purchase of, the Company's airplane.
During the fiscal 2005 third quarter, Hurricanes Katrina, Rita and
Wilma impacted the Company in the form of store closings prior to and
during the hurricanes' landfalls, as well as after the storms due to
power outages and damages sustained. The most significant
storm-related Company losses were related to merchandise inventories,
furniture and fixtures, which were primarily offset by insurance
proceeds. The Company anticipates recording additional insurance
proceeds upon receipt, including amounts to offset losses related to
business interruption. The Company cannot currently predict the amount
or timing of the additional insurance proceeds or whether any
additional proceeds will be received in the fourth quarter of 2005.
The net impact of the hurricanes was not material to the Company's
financial position, liquidity, or results of operations in the third
quarter.
The effective income tax rate for the third quarter of 2005 was
34.2 percent compared to 33.9 percent in the comparable prior year
period. The rate for the 2005 period is lower than the Company's
estimated annual effective rate of approximately 36.0 percent
primarily due to favorable reductions in certain contingent income
tax-related liabilities. The tax rate in the 2004 period was favorably
impacted by the October 2004 retroactive reinstatement of certain
federal jobs credits and a favorable adjustment to the Company's 2003
income tax liability upon the filing of its 2003 tax return in October
2004.
For the 39-week year-to-date period, net income was $204.9 million
in fiscal 2005, or $0.63 per share, compared to $210.3 million, or
$0.63 per share, in the comparable prior year period. The impact of
the RIM expansion for the 2005 year-to-date period was to decrease
income before income taxes by approximately $17.5 million and to
decrease EPS by $0.03.
Year-to-date net sales increased 11.7 percent, resulting primarily
from opening 564 net new stores since October 29, 2004, and a
same-store sales increase of 3.4 percent.
As a percentage to sales, gross margin for the year-to-date period
was 28.4 percent in 2005 compared to 29.3 percent in 2004. The decline
in gross margin was due to a number of factors, including lower sales,
as a percentage of total sales, in the Company's seasonal, home
products and basic clothing categories, increased markdowns and higher
transportation expenses, as well as the impact from the RIM expansion
discussed above. These factors were partially offset by higher average
mark-ups in the 2005 period.
SG&A expenses for the year-to-date period decreased as a
percentage of sales to 23.0 percent in 2005 from 23.2 percent in 2004
due to a number of factors, including decreases, as a percentage of
sales, in 1) store-related salaries, reflecting the Company's
cost-containment efforts including the EZstore project; 2) health
benefits resulting from decreased claims and a downward revision in
claim lag assumptions based upon review and recommendation by the
Company's outside actuary; and 3) a reduction in professional fees
primarily due to the reduction of consulting fees in the 2005 period
associated with the EZstore project and Sarbanes-Oxley compliance
efforts. These items were partially offset by increased store
occupancy and utilities costs.
The effective income tax rate for the 39-week 2005 period was 35.5
percent compared to 34.2 percent in the 39-week 2004 period. The 2005
rate is less than the Company's estimated annual effective tax rate of
approximately 36.0 percent primarily due to the reduction in 2005 of
certain income tax-related contingent liabilities. The 2004 rate was
also impacted, to a greater extent, by a reduction in contingent
income tax-related liabilities.
As of October 28, 2005, the Company operated 7,821 neighborhood
stores, including 38 Dollar General Markets. For the 39-week period
ended October 28, 2005, the Company opened 605 new stores and closed
104 stores, including 38 stores closed as a result of significant
hurricane damage. Store openings are on track to meet or exceed the
Company's target of 730 total new stores this fiscal year.
Year-to-date, the Company repurchased approximately 13.0 million
shares of its common stock for $260.7 million. As of October 28, 2005,
approximately 6.4 million shares remained available under the
Company's current 10-million share repurchase authorization, which
expires September 30, 2006. The Company intends to continue purchasing
shares under this authorization in the fourth quarter.
Outlook for Fourth Quarter and Fiscal Year 2005
November same-store sales continue to be impacted by a combination
of higher fuel prices and aggressive advertising and marketing by the
Company's competitors. Same-store sales are currently estimated to be
in the range of one to three percent for the fourth quarter. November
is estimated to be below this range due to a relatively difficult
comparison to last year and the fact that most of the Company's
holiday initiatives should have a greater impact on December sales.
The Company estimates that the stores closed as the result of
hurricane damage represent lost potential sales of approximately $12
million in the fiscal 2005 fourth quarter.
The Company expects EPS for the 14-week fourth quarter to be in
the range of $0.51 to $0.54. The fourth quarter EPS estimate includes
a favorable impact of approximately $0.03 per share resulting from the
RIM expansion. For the 53-week year ending February 3, 2006, the
Company expects to report EPS of $1.14 to $1.17. Capital expenditures
for the year are expected to be approximately $330 million to $350
million.
Comments Regarding Fiscal Year 2006
Dollar General today also announced that, in fiscal 2006, the Company expects to open a minimum of 800 new traditional Dollar General stores and approximately 30 Dollar General Markets, some of which will be conversions of traditional stores. The Company plans to issue earnings guidance for fiscal 2006 in its year-end earnings press release on March 21, 2006.
Conference Call
The Company will host a conference call on Tuesday, November 22, 2005, at 10 a.m. EST. The security code for the conference call is "Dollar General." If you wish to participate, please call (334) 260-2280 at least 10 minutes before the conference call is scheduled to begin. The call will also be broadcast live online at www.dollargeneral.com and can be accessed by clicking on the homepage "Spotlight Item." A replay of the conference call will be available until 5 p.m. EST on Tuesday, December 6, online or by calling (334) 323-7226. The replay pass code is 90054486.
Non-GAAP Disclosures
Return on invested capital ("ROIC"), included in the accompanying schedules to this release, may be considered a financial measure not defined by or calculated in accordance with generally accepted accounting principles ("GAAP"). Management believes that ROIC is useful because it provides investors with additional useful information for evaluating the efficiency of the Company's capital deployed in its operations. The Company has also provided a calculation of ROIC and return on assets, computed using net income, excluding a restatement-related penalty, a non-GAAP measure, which management believes more clearly reflects the ongoing operations of the Company. None of these non-GAAP measures should be considered a substitute for measures derived in accordance with GAAP. The Company has included its calculations of these non-GAAP measures and reconciliations to the most comparable GAAP financial measures in the accompanying schedules.
Forward-Looking Information
This press release contains forward-looking information, such as the information in the sections entitled "Outlook for Fourth Quarter and Fiscal Year 2005" and "Comments Regarding Fiscal Year 2006," as well as the Company's expectations regarding its future recording of additional insurance proceeds relating to Hurricanes Katrina, Rita, and Wilma, expected fiscal 2005 new store openings, intentions regarding fourth quarter share repurchases and comments regarding the Company's ongoing effective income tax rate. The words "believe," "anticipate," "project," "plan," "expect," "estimate," "objective," "forecast," "guidance," "goal," "intend," "will likely result," or "will continue" and similar expressions generally identify forward-looking statements. The Company believes the assumptions underlying these forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in the forward-looking statements. Factors and risks that may result in actual results differing from such forward-looking information include, but are not limited to:
-- a deterioration in general economic conditions that may impact consumer spending or the Company's costs of doing business, such as unemployment levels, personal debt levels, business conditions, high fuel and energy costs, inflation, tax rates and interest rates;
-- changes in demand due to unexpected or unusual weather patterns, economic conditions or other factors;
-- adverse weather conditions, natural disasters or similar disruptions;
-- transportation and distribution delays or interruptions both domestically and internationally;
-- labor shortages in the trucking industry;
-- the Company's ability to negotiate effectively the cost and purchase of merchandise;
-- prolonged or repeated price increases of certain raw materials that could affect vendors' product costs;
-- inventory risks due to shifts in market demand;
-- unanticipated markdowns due to inventory imbalances or other reasons;
-- changes in product mix;
-- interruptions in suppliers' businesses;
-- the inability to execute operating initiatives;
-- costs and potential problems and interruptions associated with implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems;
-- higher than expected increases in health, workers' compensation, general liability, property or other insurance costs or unexpected jumps in the Company's loss rates;
-- seasonality of the Company's business such as a sales shortfall during the Christmas selling season;
-- unanticipated changes in the federal or state minimum wage or living wage requirements or changes in other wage or workplace regulations, as well as the Company's ability to timely comply with those regulations;
-- changes in federal, state or local regulations governing the sale of the Company's products, particularly "over-the-counter" medications or health products;
-- excessive costs and delays associated with building, opening and operating new stores;
-- excessive costs and delays associated with building, opening or achieving functionality of distribution centers;
-- competition in the retail industry;
-- existing or future U.S. military efforts or a significant act of terrorism on U.S. soil or elsewhere;
-- results of legal proceedings and claims;
-- the loss of key members of the Company's senior management team or certain other key employees, or an inability to attract, retain and motivate qualified employees to keep pace with the Company's expansion schedule; and
-- other risk factors described in the Company's Form 10-K for the fiscal year ended January 28, 2005, filed with the SEC on April 12, 2005, and most recent Form 10-Q, as well as elsewhere in this press release.
Readers are cautioned not to place undue reliance on forward-looking statements made in this press release, since the statements speak only as of the date of this release. The Company has no obligation, and does not intend, to publicly update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this release or to reflect the occurrence of unanticipated events. Readers are advised, however, to consult any further disclosures the Company may make on related subjects in its documents filed with or furnished to the SEC or in its other public disclosures.
About Dollar General
Dollar General is a Fortune 500(R) discount retailer with 7,821 neighborhood stores as of October 28, 2005. Dollar General stores offer convenience and value to customers by offering consumable basic items that are frequently used and replenished, such as food, snacks, health and beauty aids and cleaning supplies, as well as a selection of basic apparel, housewares and seasonal items at everyday low prices. The Company store support center is located in Goodlettsville, Tennessee. Dollar General's Web site can be reached at www.dollargeneral.com.
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
October 28, January 28,
2005 2005
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 92,769 $ 232,830
Short-term investments 1,417 42,925
Merchandise inventories 1,574,567 1,376,537
Deferred income taxes 14,348 24,908
Prepaid expenses and other current assets 61,549 53,702
---------------------------------------------------------------------
Total current assets 1,744,650 1,730,902
---------------------------------------------------------------------
Property and equipment, at cost 2,139,087 1,940,335
Less: accumulated depreciation and
amortization 983,806 859,497
---------------------------------------------------------------------
Net property and equipment 1,155,281 1,080,838
---------------------------------------------------------------------
Other assets, net 30,850 29,264
---------------------------------------------------------------------
Total assets $2,930,781 $2,841,004
=====================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 8,864 $ 12,860
Accounts payable 521,087 409,327
Accrued expenses and other 372,537 333,889
Income taxes payable 7,452 69,616
---------------------------------------------------------------------
Total current liabilities 909,940 825,692
---------------------------------------------------------------------
Long-term obligations 344,436 258,462
Deferred income taxes 62,118 72,385
Shareholders' equity:
Preferred stock - -
Common stock 158,437 164,086
Additional paid-in capital 451,180 421,600
Retained earnings 1,011,019 1,102,457
Accumulated other comprehensive loss (839) (973)
---------------------------------------------------------------------
1,619,797 1,687,170
Other shareholders' equity (5,510) (2,705)
---------------------------------------------------------------------
Total shareholders' equity 1,614,287 1,684,465
---------------------------------------------------------------------
Total liabilities and shareholders' equity $2,930,781 $2,841,004
=====================================================================
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DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
For the Quarter (13 Weeks) Ended
-----------------------------------------------
October 28, % of Net October 29, % of Net
2005 Sales 2004 Sales
----------- ---------- ----------- -----------
Net sales $2,057,888 100.00% $1,879,187 100.00%
Cost of goods sold 1,478,872 71.86 1,325,202 70.52
---------------------------------------------------------------------
Gross profit 579,016 28.14 553,985 29.48
Selling, general and
administrative 477,404 23.20 440,029 23.42
---------------------------------------------------------------------
Operating profit 101,612 4.94 113,956 6.06
Interest income (1,670) -0.08 (1,324) -0.07
Interest expense 5,321 0.26 7,688 0.41
---------------------------------------------------------------------
Income before taxes on
income 97,961 4.76 107,592 5.73
Provision for taxes on
income 33,536 1.63 36,466 1.94
---------------------------------------------------------------------
Net income $ 64,425 3.13% $ 71,126 3.78%
=====================================================================
Basic earnings per
share $ 0.20 $ 0.22
================================== ===========
Weighted average basic
shares (000s) 319,520 327,844
================================== ===========
Diluted earnings per
share $ 0.20 $ 0.22
================================== ===========
Weighted average
diluted shares (000s) 321,443 330,313
================================== ===========
Dividends per share $ 0.045 $ 0.040
================================== ===========
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DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
For the 39 Weeks Ended
-----------------------------------------------
October 28, % of Net October 29, % of Net
2005 Sales 2004 Sales
----------- ---------- ----------- -----------
Net sales $6,101,733 100.00% $5,463,389 100.00%
Cost of goods sold 4,367,838 71.58 3,860,174 70.66
---------------------------------------------------------------------
Gross profit 1,733,895 28.42 1,603,215 29.34
Selling, general and
administrative 1,404,292 23.01 1,266,583 23.18
---------------------------------------------------------------------
Operating profit 329,603 5.40 336,632 6.16
Interest income (6,442) -0.11 (4,730) -0.09
Interest expense 18,633 0.31 21,577 0.39
---------------------------------------------------------------------
Income before taxes on
income 317,412 5.20 319,785 5.85
Provision for taxes on
income 112,529 1.84 109,488 2.00
---------------------------------------------------------------------
Net income $ 204,883 3.36% $ 210,297 3.85%
=====================================================================
Basic earnings per
share $ 0.63 $ 0.64
================================== ===========
Weighted average basic
shares (000s) 323,855 329,917
================================== ===========
Diluted earnings per
share $ 0.63 $ 0.63
================================== ===========
Weighted average
diluted shares (000s) 326,334 332,623
================================== ===========
Dividends per share $ 0.130 $ 0.120
================================== ===========
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DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
39 Weeks Ended
-----------------------
October 28, October 29,
2005 2004
----------- -----------
Cash flows from operating activities:
Net income $ 204,883 $ 210,297
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 137,817 122,882
Deferred income taxes 293 27,132
Tax benefit from stock option exercises 4,009 5,615
Change in operating assets and
liabilities:
Merchandise inventories (198,030) (401,433)
Prepaid expenses and other current
assets (7,847) (3,725)
Accounts payable 103,896 96,876
Accrued expenses and other 39,593 39,987
Income taxes payable (62,245) (24,082)
Other 12,348 (11,332)
---------------------------------------------------------------------
Net cash provided by operating activities 234,717 62,217
---------------------------------------------------------------------
Cash flows from investing activities:
Purchases of property and equipment (216,849) (219,177)
Purchases of short-term investments (30,250) (152,425)
Sales of short-term investments 73,175 219,651
Proceeds from sales of property and
equipment 1,085 154
---------------------------------------------------------------------
Net cash used in investing activities (172,839) (151,797)
---------------------------------------------------------------------
Cash flows from financing activities:
Issuance of long-term borrowings 14,495 -
Borrowings under revolving credit facility 148,600 109,100
Repayments of borrowings under revolving
credit facility (73,600) (44,600)
Repayments of long-term obligations (10,832) (12,311)
Payment of cash dividends (41,999) (39,564)
Proceeds from exercise of stock options 22,041 21,125
Repurchases of common stock (260,707) (198,362)
Other financing activities 63 (613)
---------------------------------------------------------------------
Net cash used in financing activities (201,939) (165,225)
---------------------------------------------------------------------
Net decrease in cash and cash equivalents (140,061) (254,805)
Cash and cash equivalents, beginning of
period 232,830 345,899
---------------------------------------------------------------------
Cash and cash equivalents, end of period $ 92,769 $ 91,094
=====================================================================
Supplemental schedule of noncash investing
and financing activities:
Investments awaiting settlement, included in
Accounts payable $ 12,129 $ -
Purchases of property and equipment awaiting
processing for payment, included in
Accounts payable $ 8,656 $ 4,817
Purchases of property and equipment under
capital lease obligations $ 3,283 $ 1,690
=====================================================================
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DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Selected Additional Information
(Unaudited)
Net Sales by Category (in thousands)
------------------------------------
13 Weeks Ended
-----------------------------------
October 28, October 29, %
2005 2004 Change
----------- ----------- -----------
Highly consumable $1,405,413 $1,251,106 12.3%
Seasonal 269,695 258,835 4.2
Home products 211,609 203,227 4.1
Basic clothing 171,171 166,019 3.1
----------- ----------- -----------
Total sales $2,057,888 $1,879,187 9.5%
=========== =========== ===========
Net Sales by Category (in thousands)
------------------------------------
39 Weeks Ended
-----------------------------------
October 28, October 29, %
2005 2004 Change
----------- ----------- -----------
Highly consumable $4,078,515 $3,532,824 15.4%
Seasonal 862,534 810,166 6.5
Home products 638,493 626,153 2.0
Basic clothing 522,191 494,246 5.7
----------- ----------- -----------
Total sales $6,101,733 $5,463,389 11.7%
=========== =========== ===========
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New Store Activity
------------------------------------
39 Weeks Ended
------------------------------------
October 28, October 29,
2005 2004
----------- ------------
Beginning store count 7,320 6,700
New store openings 605 639
Store closings 104 82
Net new stores 501 557
Ending store count 7,821 7,257
Total selling square footage
(000's) 53,869 49,474
Customer Transaction Data
------------------------------------------------
13 Weeks Ended 39 Weeks Ended
----------------------- -----------------------
October 28, October 29, October 28, October 29,
2005 2004 2005 2004
----------- ----------- ----------- -----------
Same-store customer
transactions -3.1% +2.3% -0.5% +2.9%
Average customer
purchase
(total stores) $ 8.96 $ 8.49 $ 8.84 $ 8.42
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DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Non-GAAP Disclosures
Return on Invested Capital (a)
(Unaudited)
(Restated) (b)
For the four quarters ended
---------------------------
October 28, October 29,
(In thousands) 2005 2004
------------- -------------
Net income $ 338,776 $ 311,128
Add:
Interest expense, net 17,563 23,064
Rent expense 286,663 244,557
Tax effect of interest and rent (110,637) (96,104)
------------ ------------
Interest and rent, net of tax 193,589 171,517
------------ ------------
Return, net of tax $ 532,365 $ 482,645
------------ ------------
Restatement-related penalty expense - 10,000
------------- ------------
Return excluding restatement-related
items $ 532,365 $ 492,645
------------ ------------
Average Invested Capital:
Average long-term obligations
(c) $ 298,543 $ 291,405
Shareholders' equity (d) 1,645,881 1,514,384
Average rent x 8 (e) 2,124,880 1,815,336
------------ ------------
Invested capital $ 4,069,304 $ 3,621,125
------------ ------------
Return on invested capital 13.1% 13.3%
============ ============
Return on invested capital, excluding
restatement-related items 13.1% 13.6%
============ ============
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(a) The Company believes that the most directly comparable ratio
calculated solely using GAAP measures is the ratio of net
income to the sum of average long-term obligations, including
current portion, and average shareholders' equity. This ratio
was 17.4% and 17.2% for the rolling four quarters ended
October 28, 2005 and October 29, 2004, respectively.
(b) Net income, shareholders' equity and rent expense used in the
above calculations have been restated using the accounting
practices for leases described in the Company's press release
dated March 3, 2005.
(c) Average long-term obligations is equal to the average long-
term obligations, including current portion, measured at the
end of each of the last five fiscal quarters.
(d) Average shareholders' equity is equal to the average
shareholders' equity measured at the end of each of the last
five fiscal quarters.
(e) Average rent expense is computed using a rolling two-year
period. Average rent expense is multiplied by a factor of
eight to capitalize operating leases in the determination of
pretax invested capital. This is a conventional methodology
utilized by credit rating agencies and investment bankers.
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Non-GAAP Disclosures
Return on Assets
(Unaudited)
(Restated) (a)
For the four quarters ended
---------------------------
October 28, October 29,
(In thousands) 2005 2004
------------- -------------
Net income $ 338,776 $ 311,128
Restatement-related items, net of tax - 10,000
------------- ------------
Net income, excluding restatement-
related
items $ 338,776 $ 321,128
------------ ------------
Average assets (b) $ 2,862,623 $ 2,648,558
------------ ------------
Return on assets 11.8% 11.7%
============ ============
Return on assets, excluding restatement-
related items 11.8% 12.1%
============ ============
|
(a) Net income and average assets used in the above calculations
have been restated using the accounting practices for leases
described in the Company's press release dated March 3, 2005.
(b) Average assets is equal to the average total assets measured
at the end of each of the last five fiscal quarters.
CONTACT: Dollar General Corporation
Investor Contact:
Emma Jo Kauffman, 615-855-5525
or
Media Contact:
Tawn Earnest, 615-855-5209