What changed in this filing

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Item 1. Financial Statements

2022-12-01 compared with 2022-08-25 · 58 added, 44 removed, 254 unchanged (29% of the section changed)

15 unchanged sentences

Current liabilities:

Current portion of long-term obligations

Current portion of operating lease liabilities

25 unchanged sentences

Interest expense

Other (income) expense

Income before income taxes

16 unchanged sentences

Comprehensive

Balances, April 29, 2022

Balances, July 29, 2022

Dividends paid, $ 0.55 per common share

3 unchanged sentences

Other equity and related transactions

Balances, October 28, 2022

Balances, July 30, 2021

Balances, April 30, 2021

Dividends paid, $ 0.42 per common share

3 unchanged sentences

Other equity and related transactions

Balances, July 30, 2021

Balances, October 29, 2021

Balances, January 28, 2022

6 unchanged sentences

Other equity and related transactions

Balances, July 29, 2022

Balances, October 28, 2022

Balances, January 29, 2021

6 unchanged sentences

Other equity and related transactions

Balances, July 30, 2021

Balances, October 29, 2021

See notes to condensed consolidated financial statements.

18 unchanged sentences

Purchases of property and equipment

( 1,078,208 )

Proceeds from sales of property and equipment

Net cash provided by (used in) investing activities

( 1,075,820 )

Cash flows from financing activities:

Issuance of long-term obligations

Repayments of long-term obligations

Net increase (decrease) in commercial paper outstanding

Costs associated with issuance of debt

Repurchases of common stock

6 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 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.

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 October 28, 2022 and results of operations for the 13-week and 39-week accounting periods ended October 28, 2022 and October 29, 2021 have been made.

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

2 unchanged sentences

Because the Company’s business is moderately seasonal, the results for interim periods are not necessarily indicative of the results to be expected for the entire year.

In addition, the effect of the COVID-19 pandemic on consumer behavior beginning in the first quarter of 2020 resulted in a departure from seasonal norms experienced in recent years and may continue to disrupt the historical quarterly cadence of the Company’s results of operations for an unknown period of time.

In addition, the effect of the COVID-19 pandemic and the governmental response thereto on consumer behavior beginning in the first quarter of 2020 resulted in a departure from seasonal norms experienced in recent years and may continue to disrupt the historical quarterly cadence of the Company’s results of operations for an unknown period of time.

The Company uses the last-in, first-out (“LIFO”) method of valuing inventory.

2 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 $ 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.

The Company recorded a LIFO provision of $ 147.8 million and $ 60.5 million in the respective 13-week periods, and $ 353.6 million and $ 108.7 million in the respective 39-week periods, ended October 28, 2022 and October 29, 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 July 29, 2022

13 Weeks Ended July 30, 2021

13 Weeks Ended October 28, 2022

13 Weeks Ended October 29, 2021

Basic earnings per share

1 unchanged sentence

Diluted earnings per share

26 Weeks Ended July 29, 2022

26 Weeks Ended July 30, 2021

39 Weeks Ended October 28, 2022

39 Weeks Ended October 29, 2021

Basic earnings per share

3 unchanged sentences

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 and 26-week periods, ended July 29, 2022 and July 30, 2021.

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 and 39-week periods, ended October 28, 2022 and October 29, 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 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.

As of October 28, 2022, the total reserves for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $ 9.7 million, $ 0.4 million and $ 0.0 million, respectively, for a total of $ 10.1 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 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.

As of October 28, 2022, approximately $ 8.8 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 39-week periods ended October 28, 2022 were 22.8 % and 22.2 % respectively, compared to rates of 22.2 % and 21.8 % for the 13-week and 39-week periods ended October 29,

The income tax rate for the 13-week period in 2022 was higher than the comparable 13-week period in 2021 primarily due to reduced tax benefits from federal tax credits.

The income tax rate for the 39-week period in 2022 was higher than the comparable 39-week period in 2021 primarily due to a reduced tax benefit from stock-based compensation.

As of October 28, 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 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 %.

At October 28, 2022, the weighted-average remaining lease term for the Company’s operating leases was 9.6 years, and the weighted average discount rate for such leases was 3.9 %.

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

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.

For the 39-week periods ended October 28, 2022 and October 29, 2021, such costs were $ 1.19 billion and $ 1.11 billion, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities of $ 1.20 billion and $ 1.11 billion, respectively, were reflected in cash flows from operating activities in the condensed consolidated statements of cash flows for the 39-week periods ended October 28, 2022 and October 29, 2021.

Current and long-term obligations

3 unchanged sentences

3.250 % Senior Notes due April 15, 2023 (net of discount of $ 0 and $ 319 )

4.250 % Senior Notes due September 20, 2024 (net of discount of $ 644 and $ 0 )

4.150 % Senior Notes due November 1, 2025 (net of discount of $ 270 and $ 332 )

3.875 % Senior Notes due April 15, 2027 (net of discount of $ 218 and $ 251 )

4.625 % Senior Notes due November 1, 2027 (net of discount of $ 518 and $ 0 )

4.125 % Senior Notes due May 1, 2028 (net of discount of $ 300 and $ 336 )

3.500 % Senior Notes due April 3, 2030 (net of discount of $ 519 and $ 564 )

5.000 % Senior Notes due November 1, 2032 (net of discount of $ 2,392 and $ 0 )

4.125 % Senior Notes due April 3, 2050 (net of discount of $ 4,789 and $ 4,857 )

5.500 % Senior Notes due November 1, 2052 (net of discount of $ 293 and $ 0 )

Unsecured commercial paper notes

Debt issuance costs, net

current portion

Long-term portion

Long-term obligations

The Company’s credit agreement provides for a $ 2.0 billion senior unsecured revolving credit facility (the “Revolving Facility”) of which up to $ 100.0 million is available for letters of credit and is scheduled to mature on December 2, 2026.

1 unchanged sentence

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 applicable interest rate margin for borrowings as of October 28, 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 July 29, 2022, the facility fee rate was 0.11 %.

As of October 28, 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.

1 unchanged sentence

incur additional liens;

sell all or substantially all of the Company’s assets;

sell all or substantially all

of the Company’s assets;

consummate certain fundamental changes or change in the Company’s lines of business;

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 July 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 October 28, 2022, the Company was in compliance with all such covenants.

The Revolving Facility also contains customary events of default.

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.

As of October 28, 2022, the Company had no outstanding borrowings, $ 0.3 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 $ 1.3 billion.

In addition, as of October 28, 2022, the Company had outstanding letters of credit of $ 43.2 million which were issued pursuant to separate agreements.

As of October 28, 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 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 %.

As of October 28, 2022, the Company’s condensed consolidated balance sheet reflected outstanding unsecured CP Notes of $ 0.5 billion, which had a weighted average borrowing rate of 3.6 %.

CP Notes totaling $ 194.0 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.

On September 20, 2022, the Company issued $ 750.0 million aggregate principal amount of 4.25 % senior notes due 2024 (the “2024 Senior Notes”), net of discount of $ 0.7 million, $ 550.0 million aggregate principal amount of 4.625 % senior notes due 2027 (the “November 2027 Senior Notes”), net of discount of $ 0.5 million, $ 700.0 million aggregate principal amount of 5.0 % senior notes due 2032 (the “2032 Senior Notes”), net of discount of $ 2.4 million, and $ 300.0 million aggregate principal amount of 5.50 % senior notes due 2052 (the “2052 Senior Notes”), net of discount of $ 0.3 million.

The 2024 Senior Notes are scheduled to mature on September 20, 2024, the November 2027 Senior Notes are scheduled to mature on November 1, 2027, the 2032 Senior Notes are scheduled to mature on November 1, 2032 and the 2052 Senior Notes are scheduled to mature on November 1, 2052.

Interest on the 2024 Senior Notes is payable in cash on March 20 and September 20 of each year, commencing on March 20, 2023.

Interest on the November 2027 Senior Notes, the 2032 Senior Notes and the 2052 Senior Notes is payable in cash on May 1 and November 1 of each year, commencing on May 1, 2023.

The Company incurred $ 16.5 million of debt issuance costs associated with the issuance of the 2024 Senior Notes, November 2027 Senior Notes, 2032 Senior Notes and 2052 Senior Notes.

Effective October 6, 2022, the Company redeemed $ 900.0 million aggregate principal amount of outstanding 3.25 % senior notes due 2023 (the “2023 Senior Notes”), and incurred a loss of $ 0.4 million associated with the redemption.

The Company funded the redemption price for the 2023 Senior Notes with proceeds from the issuance of the Senior Notes issued on September 20, 2022 as discussed above.

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 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.

The Company does not have any fair value measurements categorized within Level 3 as of October 28, 2022.

The following table presents the Company’s liabilities required to be measured at fair value as of October 28, 2022, aggregated by the level in the fair value hierarchy within which those measurements are classified.

Quoted Prices

3 unchanged sentences

Deferred compensation (b)

(a) Included in the condensed consolidated balance sheet at book value as current portion of long-term obligations of $ 900,635 and long-term obligations of $ 4,290,700 .

(a) Included in the condensed consolidated balance sheet at book value as long-term obligations of $ 5,985,728 .

(b) Reflected at fair value in the condensed consolidated balance sheet as accrued expenses and other current liabilities of $ 3,553 and noncurrent Other liabilities of $ 39,334 .

9 unchanged sentences

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

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

As of October 28, 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.

11 unchanged sentences

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.

Pursuant to its common stock repurchase program, during the 39-week periods ended October 28, 2022 and October 29, 2021, the Company repurchased in the open market approximately 7.1 million shares of its common stock at a total cost of $ 1.6 billion and approximately 9.9 million shares of its common stock at a total cost of $ 2.1 billion, respectively.

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

In November 2022, the Board declared a quarterly cash dividend of $ 0.55 per share, which is payable on or before January 17, 2023 to shareholders of record on January 3, 2023.

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 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”).

We have reviewed the accompanying condensed consolidated balance sheet of Dollar General Corporation and subsidiaries (the Company) as of October 28, 2022, the related condensed consolidated statements of income, comprehensive income, and shareholders’ equity for the thirteen and thirty-nine week periods ended October 28, 2022 and October 29, 2021, the condensed consolidated statements of cash flows for the thirty-nine week periods ended October 28, 2022 and October 29, 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

December 1, 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