What changed in this filing

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Item 1. Financial Statements

2022-08-25 compared with 2022-05-26 · 66 added, 36 removed, 232 unchanged (31% of the section changed)

38 unchanged sentences

For the 13 weeks ended

For the 26 weeks ended

Cost of goods sold

12 unchanged sentences

For the 13 weeks ended

For the 26 weeks ended

Unrealized net gain (loss) on hedged transactions and currency translation, net of related income tax expense (benefit) of $ 86 , $ 86 , $ 173 , and $ 173 , respectively

5 unchanged sentences

Comprehensive

Balances, January 28, 2022

Balances, April 29, 2022

Dividends paid, $ 0.55 per common share

3 unchanged sentences

Other equity and related transactions

Balances, July 29, 2022

Balances, April 30, 2021

Dividends paid, $ 0.42 per common share

Unrealized net gain (loss) on hedged transactions

Share-based compensation expense

Repurchases of common stock

Other equity and related transactions

Balances, July 30, 2021

Balances, January 28, 2022

Dividends paid, $ 1.10 per common share

Unrealized net gain (loss) on hedged transactions and currency translation

Share-based compensation expense

Repurchases of common stock

( 1,091,120 )

( 1,095,396 )

Other equity and related transactions

Balances, July 29, 2022

Balances, January 29, 2021

Dividends paid, $ 0.84 per common share

Unrealized net gain (loss) on hedged transactions

2 unchanged sentences

( 1,692,913 )

( 1,700,148 )

Other equity and related transactions

Balances, April 30, 2021

Balances, July 30, 2021

See notes to condensed consolidated financial statements.

11 unchanged sentences

Merchandise inventories

( 1,528,744 )

Prepaid expenses and other current assets

11 unchanged sentences

( 1,095,396 )

( 1,700,148 )

Payments of cash dividends

3 unchanged sentences

Net increase (decrease) in cash and cash equivalents

( 1,062,911 )

Cash and cash equivalents, beginning of period

16 unchanged sentences

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the Company’s customary accounting practices.

In management’s opinion, all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the consolidated financial position as of April 29, 2022 and results of operations for the 13-week accounting periods ended April 29, 2022 and April 30, 2021 have been made.

In management’s opinion, all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the consolidated financial position as of July 29, 2022 and results of operations for the 13-week and 26-week accounting periods ended July 29, 2022 and July 30, 2021 have been made.

The preparation of financial statements and related disclosures in conformity with U.S.

7 unchanged sentences

The interim LIFO calculations are subject to adjustment in the final year-end LIFO inventory valuation.

The Company recorded a LIFO provision of $ 61.4 million and $ 12.3 million in the respective 13-week periods ended April 29, 2022 and April 30, 2021.

The Company recorded a LIFO provision of $ 144.4 million and $ 36.0 million in the respective 13-week periods, and $ 205.8 million and $ 48.2 million in the respective 26-week periods, ended July 29, 2022 and July 30, 2021.

In addition, ongoing estimates of inventory shrinkage and initial markups and markdowns are included in the interim cost of goods sold calculation.

7 unchanged sentences

Earnings per share is computed as follows (in thousands, except per share data):

13 Weeks Ended April 29, 2022

13 Weeks Ended April 30, 2021

13 Weeks Ended July 29, 2022

13 Weeks Ended July 30, 2021

Basic earnings per share

1 unchanged sentence

Diluted earnings per share

26 Weeks Ended July 29, 2022

26 Weeks Ended July 30, 2021

Basic earnings per share

Effect of dilutive share-based awards

Diluted earnings per share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings per share is determined based on the dilutive effect of share-based awards using the treasury stock method.

Share-based awards that were outstanding at the end of the respective periods but were not included in the computation of diluted earnings per share because the effect of exercising such awards would be antidilutive, were approximately 0.1 million in each of the respective 13-week periods ended April 29, 2022 and April 30, 2021.

Under the accounting standards for income taxes, the asset and liability method is used for computing the future income tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns.

6 unchanged sentences

Generally, with few exceptions, the Company’s 2018 and later tax years remain open for examination by the various state taxing authorities.

As of April 29, 2022, the total reserves for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $ 6.2 million, $ 0.3 million and $ 0.0 million, respectively, for a total of $ 6.5 million.

As of July 29, 2022, the total reserves for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $ 6.2 million, $ 0.3 million and $ 0.0 million, respectively, for a total of $ 6.5 million.

This total amount is reflected in noncurrent other liabilities in the condensed consolidated balance sheet.

The Company’s reserve for uncertain tax positions is expected to be reduced by $ 1.7 million in the coming twelve months as a result of expiring statutes of limitations.

As of April 29, 2022, approximately $ 6.2 million of the reserve for uncertain tax positions would impact the Company’s effective income tax rate if the Company were to recognize the tax benefit for these positions.

The effective income tax rate for the 13-week period ended April 29, 2022 was 21.8 % compared to a rate of 22.0 % for the 13-week period ended April 30, 2021.

The income tax rate for the 13-week period in 2022 was lower than the comparable 13-week period in 2021 primarily due to a decrease in pre-tax earnings in the 2022 period compared to the 2021 period while rate impacting items, such as the benefits from stock-based compensation and federal tax credits, remained materially the same in amount in both the 2022 and 2021 periods.

As of April 29, 2022, the Company’s primary leasing activities were real estate leases for most of its retail store locations and certain of its distribution facilities.

Substantially all of the Company’s leases are classified as operating leases and the associated assets and liabilities are presented as separate captions in the condensed consolidated balance

As of July 29, 2022, approximately $ 6.2 million of the reserve for uncertain tax positions would impact the Company’s effective income tax rate if the Company were to recognize the tax benefit for these positions.

The effective income tax rates for the 13-week and 26-week periods ended July 29, 2022 were 22.1 % and 22.0 % respectively, compared to rates of 21.4 % and 21.7 % for the 13-week and 26-week periods ended July 30, 2021.

The income tax rates for the 13-week and 26-week periods in 2022 were higher than the comparable 13-week and 26-week periods in 2021 primarily due to a reduced benefit from stock-based compensation partially offset by a lower effective state income tax rate in the 2022 periods when compared to the 2021 periods.

As of July 29, 2022, the Company’s primary leasing activities were real estate leases for most of its retail store locations and certain of its distribution facilities.

Substantially all of the Company’s leases are classified as operating leases and the associated assets and liabilities are presented as separate captions in the condensed consolidated balance sheets.

Finance lease assets are included in net property and equipment, and finance lease liabilities are included in long-term obligations, in the condensed consolidated balance sheets.

At April 29, 2022, the weighted-average remaining lease term for the Company’s operating leases was 9.7 years, and the weighted average discount rate for such leases was 3.7 %.

At July 29, 2022, the weighted-average remaining lease term for the Company’s operating leases was 9.7 years, and the weighted average discount rate for such leases was 3.8 %.

Operating lease costs are reflected as selling, general and administrative costs in the condensed consolidated statements of income.

For the 13-week periods ended April 29, 2022 and April 30, 2021, such costs were $ 389.7 million and $ 361.9 million, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities of $ 396.6 million and $ 364.2 million, respectively, were reflected in cash flows from operating activities in the condensed consolidated statements of cash flows for the 13-week periods ended April 29, 2022 and April 30, 2021.

For the 26-week periods ended July 29, 2022 and July 30, 2021, such costs were $ 787.0 million and $ 730.0 million, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities of $ 794.7 million and $ 735.8 million, respectively, were reflected in cash flows from operating activities in the condensed consolidated statements of cash flows for the 26-week periods ended July 29, 2022 and July 30, 2021.

Current and long-term obligations

14 unchanged sentences

Borrowings under the Revolving Facility bear interest at a rate equal to an applicable interest rate margin plus, at the Company’s option, either (a) LIBOR or (b) a base rate (which is usually equal to the prime rate).

The applicable interest rate margin for borrowings as of April 29, 2022 was 1.015 % for LIBOR borrowings and 0.015 % for base-rate borrowings.

The credit agreement governing the Revolving Facility includes customary LIBOR replacement provisions.

The applicable interest rate margin for borrowings as of July 29, 2022 was 1.015 % for LIBOR borrowings and 0.015 % for base-rate borrowings.

The Company is also required to pay a facility fee, payable on any used and unused commitment amounts of the Revolving Facility, and customary fees on letters of credit issued under the Revolving Facility.

As of April 29, 2022, the facility fee rate was 0.11 %.

As of July 29, 2022, the facility fee rate was 0.11 %.

The applicable interest rate margins for borrowings, the facility fees and the letter of credit fees under the Revolving Facility are subject to adjustment from time to time based on the Company’s long-term senior unsecured debt ratings.

4 unchanged sentences

and incur additional subsidiary indebtedness.

The Revolving Facility also contains financial covenants which require the maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio.

As of April 29, 2022, the Company was in compliance with all such covenants.

The Revolving Facility also contains financial covenants which require the

maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio.

As of July 29, 2022, the Company was in compliance with all such covenants.

The Revolving Facility also contains customary events of default.

As of April 29, 2022, the Company had no outstanding borrowings, outstanding letters of credit of $ 1.3 million, and borrowing availability of approximately $ 2.0 billion under the Revolving Facility that, due to its intention to maintain borrowing availability related to the commercial paper program described below, could contribute incremental liquidity of $ 1.0 billion.

In addition, as of April 29, 2022, the Company had outstanding letters of credit of $ 46.8 million which were issued pursuant to separate agreements.

As of April 29, 2022, the Company had a commercial paper program under which the Company may issue unsecured commercial paper notes (the “CP Notes”) from time to time in an aggregate amount not to exceed $ 2.0 billion

outstanding at any time.

As of July 29, 2022, the Company had no outstanding borrowings, $ 1.3 million of outstanding letters of credit, and approximately $ 2.0 billion of borrowing availability under the Revolving Facility that, due to the Company’s intention to maintain borrowing availability related to the commercial paper program described below, could contribute incremental liquidity of $ 0.7 billion.

In addition, as of July 29, 2022, the Company had outstanding letters of credit of $ 45.9 million which were issued pursuant to separate agreements.

As of July 29, 2022, the Company had a commercial paper program under which the Company may issue unsecured commercial paper notes (the “CP Notes”) from time to time in an aggregate amount not to exceed $ 2.0 billion outstanding at any time.

The CP Notes may have maturities of up to 364 days from the date of issue and rank equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness.

The Company intends to maintain available commitments under the Revolving Facility in an amount at least equal to the amount of CP Notes outstanding at any time.

As of April 29, 2022, the Company’s condensed consolidated balance sheet reflected outstanding unsecured CP Notes of $ 759.6 million, which had a weighted average borrowing rate of 0.65 %.

CP Notes totaling $ 242.0 million were held by a wholly-owned subsidiary of the Company and are therefore not reflected on the condensed consolidated balance sheets.

As of July 29, 2022, the Company’s condensed consolidated balance sheet reflected outstanding unsecured CP Notes of $ 1.1 billion, which had a weighted average borrowing rate of 2.23 %.

CP Notes totaling $ 192.0 million and $ 181.0 million at July 29, 2022 and January 28, 2022, respectively, were held by a wholly-owned subsidiary of the Company and are therefore not reflected in the condensed consolidated balance sheets.

Assets and liabilities measured at fair value

2 unchanged sentences

As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

The Company does not have any fair value measurements categorized within Level 3 as of April 29, 2022.

The following table presents the Company’s liabilities required to be measured at fair value as of April 29, 2022, aggregated by the level in the fair value hierarchy within which those measurements are classified.

The Company does not have any fair value measurements categorized within Level 3 as of July 29, 2022.

The following table presents the Company’s liabilities required to be measured at fair value as of July 29, 2022, aggregated by the level in the fair value hierarchy within which those measurements are classified.

Quoted Prices

8 unchanged sentences

From time to time, the Company is a party to various legal matters in the ordinary course of its business, including actions by employees, consumers, suppliers, government agencies, or others.

The Company has recorded accruals with respect to these matters, where appropriate, which are reflected in the Company’s consolidated financial statements.

The Company has recorded accruals with respect to these matters, where appropriate, which are reflected in the Company’s condensed consolidated financial statements.

For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made.

4 unchanged sentences

The Company manages its business on the basis of one reportable operating segment.

As of April 29, 2022, all of the Company’s retail store operations were located within the United States.

As of July 29, 2022, all of the Company’s retail store operations were located within the United States.

Certain product sourcing and other operations are located outside the United States, which collectively are not material with regard to assets, results of operations or otherwise to the consolidated financial statements.

1 unchanged sentence

13 Weeks Ended

26 Weeks Ended

(in thousands)

3 unchanged sentences

On August 29, 2012, the Company’s Board of Directors (the “Board”) authorized a common stock repurchase program, which the Board has since increased on several occasions.

On December 1, 2021, the Board authorized a $ 2.0 billion increase to the existing common stock repurchase program, bringing the cumulative total to $ 14.0 billion authorized under the program since its inception in 2012.

On August 24, 2022, the Board authorized a $ 2.0 billion increase to the existing common stock repurchase program, bringing the cumulative total to $ 16.0 billion authorized under the program since its inception in 2012.

The repurchase authorization has no expiration date and allows repurchases from time to time in open market transactions, including pursuant to trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or in privately negotiated transactions.

The timing, manner and number of shares repurchased will depend on a variety of factors, including price, market conditions, compliance with the covenants and restrictions under any applicable debt agreements and other factors.

Repurchases under the program may be funded from available cash or borrowings, including under the Revolving Facility and issuance of CP Notes discussed in further detail in Note 5.

Pursuant to its common stock repurchase program, during the 13-week periods ended April 29, 2022 and April 30, 2021, the Company repurchased in the open market approximately 3.4 million shares of its common stock at a total cost of $ 0.7 billion and approximately 5.0 million shares of its common stock at a total cost of $ 1.0 billion, respectively.

The Company paid a cash dividend of $ 0.55 per share during the first quarter of 2022.

On May 25, 2022, the Board declared a quarterly cash dividend of $ 0.55 per share, which is payable on or before July 19, 2022 to shareholders of record on July 5, 2022.

Repurchases under the program may be funded from available cash or borrowings, including under the Revolving Facility and issuance of CP Notes discussed in further detail in Note 5, or otherwise.

Pursuant to its common stock repurchase program, during the 26-week periods ended July 29, 2022 and July 30, 2021, the Company repurchased in the open market approximately 4.9 million shares of its common stock at a total cost of $ 1.1 billion and approximately 8.3 million shares of its common stock at a total cost of $ 1.7 billion, respectively.

The Company paid a cash dividend of $ 0.55 per share during each of the first and second quarters of 2022.

On August 23, 2022, the Board declared a quarterly cash dividend of $ 0.55 per share, which is payable on or before October 18, 2022 to shareholders of record on October 4, 2022.

The amount and declaration of future cash dividends is subject to the sole discretion of the Board and will depend upon, among other things, the Company’s results of operations, cash requirements, financial condition, contractual restrictions and other factors that the Board may deem relevant in its sole discretion.

2 unchanged sentences

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Dollar General Corporation and subsidiaries (the Company) as of April 29, 2022, and the related condensed consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the thirteen week periods ended April 29, 2022 and April 30, 2021, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”).

We have reviewed the accompanying condensed consolidated balance sheet of Dollar General Corporation and subsidiaries (the Company) as of July 29, 2022, the related condensed consolidated statements of income, comprehensive income, and shareholders’ equity for the thirteen and twenty-six week periods ended July 29, 2022 and July 30, 2021, the condensed consolidated statement of cash flows for the twenty-six week periods ended July 29, 2022 and July 30, 2021, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”).

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S.

13 unchanged sentences

Nashville, Tennessee

August 25, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements