Dollar General Corporation Reports Record Third Quarter 2012 Sales and Earnings

  Dollar General Corporation Reports Record Third Quarter 2012 Sales and
  Earnings

  *Third Quarter Same-Store Sales Increased 4.0%; Total Sales Improved 10.3%
  *Operating Profit Increased 16% to 9.1% of Sales, a New Third Quarter
    Record
  *Adjusted EPS Grew 26% to $0.63 per Diluted Share; Reported EPS Increased
    24% to $0.62 per Diluted Share
  *Company Updates Outlook for 2012 Adjusted EPS to a Range of $2.82 to $2.85

Business Wire

GOODLETTSVILLE, Tenn. -- December 11, 2012

Dollar General Corporation (NYSE: DG) today reported strong sales, operating
profit and net income for its fiscal 2012 third quarter (13 weeks) ended
November 2, 2012.

“Dollar General delivered another solid quarter, and we expect to continue
building on our strong track record of success,” said Rick Dreiling, chairman
and chief executive officer. “Our same-store sales increased 4.0 percent, on
top of a 6.3 percent improvement in the third quarter of 2011 for a two-year
stack of 10.3 percent. We had great financial performance across key metrics.
Based on these results, we are now forecasting our full year adjusted earnings
per share to be in the range of $2.82 to $2.85.”

“Although our performance over the Thanksgiving weekend and start of the
holiday season has been encouraging, we continue to be cautious for the
remainder of the year. We are facing a significant same-store sales comparison
from our 2011 fourth quarter, which included very strong January sales,
growing near-term pressures that are impacting our customers’ confidence and
spending, and a challenging competitive environment. Dollar General is keenly
focused on our ability to capture market share, build and maintain customer
loyalty and deliver strong financial returns that support our sustainable
growth for the long term.”

Third Quarter 2012 Financial Results

Net income was $208 million, or diluted earnings per share (“EPS”) of $0.62,
compared to net income of $171 million, or diluted EPS of $0.50, in the third
quarter (13 weeks) of fiscal 2011. For the 2012 third quarter, adjusted net
income, as defined in the accompanying table, increased 22 percent to $209.5
million and adjusted EPS increased 26 percent to $0.63 per diluted share.

Sales increased 10.3 percent to $3.96 billion in the 2012 third quarter
compared to $3.60 billion in the 2011 third quarter. Same-store sales
increased 4.0 percent in the 2012 quarter and 6.3 percent in the 2011 quarter,
with increases in customer traffic and average transaction amount contributing
to the growth in both periods. Consumables sales continued to increase at a
higher rate than non-consumables in the 2012 quarter with the most significant
growth in candy and snacks and perishables offerings. Sales growth in home and
seasonal categories, as well as certain basic apparel departments, was strong.
Overall, hanging apparel sales were weak.

Operating profit increased by 16 percent to 9.1 percent of sales in the 2012
third quarter, compared to 8.6 percent of sales in the 2011 third quarter.

Gross profit, as a percentage of sales, was 30.9 percent in the 2012 third
quarter compared to 31.0 percent in the 2011 third quarter. The most
significant factors positively affecting the gross profit rate in the 2012
quarter were higher inventory markups, the impact of a significant LIFO charge
in the 2011 period ($11 million) that did not reoccur in the 2012 period and
transportation efficiencies. The most significant factors negatively affecting
the gross profit rate included higher markdowns, a lesser impact from price
increases compared to the prior year, a heavier consumables weighting within
the sales mix and a higher shrink rate.

Selling, general and administrative expenses (SG&A), as a percentage of sales,
was 21.8 percent in the 2012 third quarter compared to 22.4 percent in the
2011 third quarter, an improvement of 58 basis points. Retail labor expense
increased at a rate lower than the increase in sales, partially due to ongoing
benefits of the Company’s workforce management system. A decrease in incentive
compensation also contributed to the overall decrease in SG&A as a percentage
of sales, and workers’ compensation and general liability expenses increased
at a rate lower than the increase in sales. SG&A results for the 2012 quarter
also benefitted from other cost reduction and productivity initiatives as well
as the 10.3 percent increase in sales. Costs that increased at a rate higher
than the sales increase include fees associated with increased debit card
usage.

Interest expense was $28 million in the 2012 third quarter compared to $39
million in the 2011 third quarter. The decrease was primarily due to lower
all-in interest rates.

Other (income) expense in the 2012 third quarter includes $1.7 million of debt
amendment fees which were reimbursed by Buck Holdings, L.P. The reimbursement
was accounted for as a capital contribution in the third quarter.

The effective income tax rate for the 2012 third quarter was 37.4 percent
compared to a rate of 37.1 percent for the 2011 third quarter. This increase
in the effective tax rate was primarily associated with state income tax
items. The 2011 period benefited from decreases in state income tax reserves
while the 2012 period included expense associated with an increase in
reserves. In addition, both periods benefited from decreases in a state income
tax valuation allowance associated with state income tax credits; however, the
2011 period’s benefit exceeded the 2012 period’s benefit.

39-Week Period Results

For the 39-week period ended November 2, 2012, total sales increased 11.2
percent over the comparable 2011 period, to $11.81 billion, including an
increase in same-store sales of 5.3 percent.

For the 2012 period, operating profit increased by 15 percent to $1.1 billion
and, as a percentage of sales, increased 34 basis points to 9.6 percent.
Excluding certain items as set forth in the accompanying table, the Company’s
operating profit increased 14 percent to $1.1 billion, or 9.6 percent of
sales, in the 2012 39-week period compared to 9.4 percent of sales in the 2011
39-week period.

Gross profit, as a percentage of sales, was 31.5 percent in the 2012 39-week
period compared to 31.6 percent in the 2011 period, a decrease of 8 basis
points.  Factors favorably impacting the gross profit rate included a
significantly lower LIFO provision, higher inventory markups and improved
transportation efficiencies. These positive factors were offset by higher
markdowns and lower price increases than in the 2011 period. In addition,
consumables, which generally have lower markups than non-consumables,
represented a greater percentage of sales in the 2012 period than in the 2011
period. A LIFO provision of $1.2 million was recorded in the 2012 period
compared to a $25.4 million provision in the 2011 period.

SG&A was 21.9 percent as a percentage of sales in the 2012 period compared to
22.3 percent in the 2011 period, an improvement of 42 basis points. Excluding
certain items as set forth in the accompanying table, SG&A, as a percentage of
sales, improved by 32 basis points partially due to the favorable impact of
the 11.2 percent sales increase. In addition, retail labor expense increased
at a rate lower than the increase in sales, partially due to ongoing benefits
of the Company’s workforce management system. Various cost reduction efforts
affecting expenses also contributed to the overall decrease in SG&A as a
percentage of sales. Costs that increased at a rate higher than the sales
increase included fees associated with the increased use of debit cards and
advertising.

Interest expense was $100 million in the 2012 39-week period, a decrease of
$64 million from the 2011 period. This decrease was due to lower average
outstanding long-term obligations, resulting from repurchases of debt in 2012
and 2011 and lower all-in interest rates.

Other (income) expense in the 2012 period included pretax losses totaling
$29.0 million resulting from the repurchase of the Company’s 11.875%/12.125%
senior subordinated notes, a $2.5 million pretax gain resulting from the
settlement of interest rate swaps, the $1.7 million debt amendment fees which
were reimbursed by Buck Holdings, L.P. and a pretax loss of $1.6 million
resulting from the amendment of the Company’s senior secured revolving credit
facility. Other (income) expense in the 2011 period includes pretax losses
totaling $60.3 million resulting from the repurchase of the Company’s 10.625%
senior notes.

The effective income tax rate for the 2012 period was 36.6 percent compared to
a rate of 37.4 percent for the 2011 period. Increases in the effective tax
rate associated with the expiration of various federal jobs credits for
workers hired after December 31, 2011 (primarily the Work Opportunity Tax
Credit), the expiration of the Hire Act’s Retention Credit and an increase in
the state income tax rate (the 2011 period benefited from decreases in state
income tax reserves while the 2012 period included expense associated with an
increase in reserves) were more than offset by decreases associated with the
adjustment of accruals due to the favorable resolution of income tax
examinations.

The Company reported net income of $635 million, or diluted EPS of $1.89, for
the 2012 39-week period, compared to net income of $474 million, or diluted
EPS of $1.37 for the 2011 period. Adjusted net income, as defined in the
accompanying table, for the 2012 39-week period increased by 26 percent to
$656 million compared to adjusted net income of $520 million in the 2011
39-week period. Adjusted EPS increased by 30 percent to $1.95 per diluted
share in the 2012 39-week period compared to adjusted EPS of $1.50 in the 2011
39-week period.

Merchandise Inventories

As of November 2, 2012, total merchandise inventories, at cost, were $2.33
billion compared to $2.09 billion as of October 28, 2011, an increase of 5.5
percent on a per-store basis. Improving merchandise in-stock levels, while
improving inventory turns, remains a high priority. Inventory turns, based on
the most recent four quarters, were 5.2 times as of November 2, 2012.

Capital Expenditures

Total purchases of property and equipment in the 2012 year-to-date period were
$454 million including $129 million for improvements, upgrades, remodels and
relocations of existing leased stores; $115 million related to new leased
stores, primarily for leasehold improvements, fixtures and equipment; $98
million for stores purchased or built by us; $87 million for distribution and
transportation-related capital expenditures; and $19 million for information
systems upgrades and technology-related projects. During the 2012 39-week
period, the Company opened 479 new stores, including 34 Dollar General Market
stores and 24 Dollar General Plus stores, and remodeled or relocated 591
stores.

Share Repurchases

On November 30, 2011, the Company’s board of directors approved a share
repurchase program of up to $500 million of the Company’s outstanding stock,
and on August 29, 2012, they approved an additional $500 million share
repurchase program, bringing total authorizations to $1.0 billion. In the
39-weeks ended November 2, 2012, the Company repurchased $596 million, or 12.7
million shares, under these programs. Since December 2011, the Company has
repurchased $781 million, or 17.6 million shares. As of November 2, 2012, an
authorization of $219 million remained under the August 2012 share repurchase
program.

Fiscal 2012 Financial Outlook

The Company has updated its financial outlook to reflect the results of the
third quarter and expectations for the remainder of the year. The Company
expects total sales for the 2012 fiscal year to increase by 8.0 to 8.5 percent
over the 53-week 2011 fiscal year, or 10 to 10.5 percent on a comparable
52-week basis. Same-store sales, based on a comparable 52-week period, are now
expected to increase 4.5 to 5.0 percent. For the year, operating profit,
excluding expenses resulting from secondary offerings of the Company’s stock,
is expected to be between $1.630 billion and $1.645 billion.

For the fourth quarter, the Company expects comparable store sales to increase
by 3 to 4 percent. Gross profit, as a percentage of sales, for the fourth
quarter is expected to be flat or modestly below the comparable 2011 period,
resulting in a modest decline in the gross profit rate for the full year.

SG&A for the 2012 13-week fourth quarter is expected to increase approximately
4 percent over SG&A in the 2011 14-week fourth quarter, after excluding $10.3
million relating to the acceleration of equity-based compensation and other
expenses relating to a secondary offering of the Company’s stock in the 2011
fourth quarter.

The Company now expects full year interest expense to be in the range of $130
million to $135 million.

Diluted EPS for the 52-week fiscal year, adjusted to exclude losses resulting
from redemption of the senior subordinated notes, charges or expenses relating
to amendments to or refinancing of any notes, loans or revolving credit
facilities, the settlement of interest rate swaps and expenses resulting from
secondary stock offerings, is expected to be approximately $2.82 to $2.85,
including approximately $0.04 from the favorable resolution of tax audits in
the second quarter. The updated guidance is based on approximately 335 million
weighted average diluted shares and an expected income tax rate of
approximately 37 percent, which includes the $14.5 million favorable
adjustment in the second quarter resulting from a tax audit resolution.
Excluding the adjustment, the tax rate would exceed the 2011 rate due
principally to the expiration of federal jobs related tax credits for
employees hired after December 31, 2011 as well as certain federal jobs
credits that only applied to 2011.

The Company plans to open approximately 625 new stores, including 479 stores
opened through the third quarter. The Company has remodeled or relocated a
total of approximately 591 stores through the third quarter, completing its
2012 remodel and relocation program. Capital expenditures are expected to be
in the range of $600 million to $650 million for the full year.

The volatility of the macroeconomic environment continues to pressure the
consumer and impact the Company’s cost of purchasing and delivering
merchandise to its stores. Management continues to closely monitor customers’
responses to the economic and competitive climates.

Fiscal 2013 Outlook

In fiscal year 2013, the Company plans to open approximately 635 new stores,
including approximately 20 Dollar General Market stores and 40 Dollar General
Plus stores. In addition, the Company plans to remodel or relocate a total of
approximately 550 stores. Square footage is again expected to increase by
approximately 7 percent. The Company expects its new Pennsylvania distribution
center to be fully operational in the first quarter of fiscal 2014.

The Company plans to share its full year 2013 financial outlook when it
reports fourth quarter and full year 2012 results on March 25, 2013.

Conference Call Information

The Company will hold a conference call on Tuesday, December 11, 2012, at 9:00
a.m. CT/10:00 a.m. ET, hosted by Rick Dreiling, chairman and chief executive
officer, and David Tehle, chief financial officer. If you wish to participate,
please call (866) 710-0179 at least 10 minutes before the conference call is
scheduled to begin. The pass code for the conference call is “Dollar General.”
The call will also be broadcast live online at www.dollargeneral.com under
“Investor Information, Conference Calls and Investor Events.” A replay of the
conference call will be available through Wednesday, December 26, 2012, and
will be accessible online or by calling (334) 323-7226. The pass code for the
replay is 56954859.

Non-GAAP Disclosure

Certain financial information provided in this press release and the
accompanying tables has not been derived in accordance with generally accepted
accounting principles (“GAAP”), including adjusted net income, adjusted
diluted EPS, EBITDA, and adjusted EBITDA. Reconciliations of these non-GAAP
measures to the most directly comparable measures calculated in accordance
with GAAP are provided in the accompanying schedules. The Company believes
that providing comparisons to net income and diluted earnings per share,
adjusted for the items shown in the accompanying reconciliations, provides
useful information to the reader in assessing the Company’s operating
performance.

The Company believes that the presentation of EBITDA and adjusted EBITDA is
appropriate to provide additional information about the calculation of the
senior secured incurrence test, a material financial ratio in the Company’s
credit agreements. Adjusted EBITDA is a material component of that ratio.

The non-GAAP measures discussed above are not measures of financial
performance or condition, liquidity or profitability in accordance with GAAP,
and should not be considered as alternatives to net income, operating income,
cash flows from operations or any other performance measures determined in
accordance with GAAP. Additionally, EBITDA and adjusted EBITDA are not
intended to be measures of free cash flow for management’s discretionary use,
as they do not consider certain cash requirements such as interest payments,
tax payments, debt service requirements and replacement of fixed assets. These
non-GAAP measures have limitations as analytical tools and should not be
considered in isolation or as substitutes for analysis of the Company’s
financial results as reported under GAAP.

Forward-Looking Statements

This press release contains forward-looking information, such as the
information in the sections entitled “Fiscal 2012 Financial Outlook” and
“Fiscal 2013 Outlook” as well as other statements regarding the Company’s
outlook, plans and intentions. A reader can identify forward-looking
statements because they are not limited to historical fact or they use words
such as “may,” “should,” “could,” “believe,” “anticipate,” “project,” “plan,”
“schedule,” “on track,” “expect,” “estimate,” “objective,” “forecast,” “goal,”
“focus,” “intend,” “committed,” “continue,” or “will likely result,” and
similar expressions that concern our strategy, plans, intentions or beliefs
about future occurrences or results. These matters involve risks,
uncertainties and other factors that may cause the actual performance of the
Company to differ materially from that which we expected. We derive many of
these statements from our operating budgets and forecasts, which are based on
many detailed assumptions that we believe are reasonable. However, it is very
difficult to predict the effect of known factors, and we cannot anticipate all
factors that could affect our actual results that may be important to an
investor. All forward-looking information should be evaluated in the context
of these risks, uncertainties and other factors. Important factors that could
cause actual results to differ materially from the expectations expressed in
or implied by such forward-looking statements include, but are not limited to:

  *failure to successfully execute the Company’s growth strategy, including
    delays in store growth, or in effecting store relocations or remodels,
    difficulties executing sales and operating profit margin initiatives and
    inventory shrinkage reduction;
  *the failure of the Company’s new store base to achieve sales and operating
    levels consistent with the Company’s expectations;
  *risks and challenges in connection with sourcing merchandise from domestic
    and foreign vendors, as well as trade restrictions;
  *the Company’s level of success in gaining and maintaining broad market
    acceptance of its private brands and in achieving its other initiatives;
  *unfavorable publicity or consumer perception of the Company’s products;
  *economic conditions, including their effect on the financial and capital
    markets, the Company’s suppliers and business partners, employment levels,
    consumer demand, disposable income, credit availability and spending
    patterns, inflation and the cost of goods;
  *increases in commodity prices (including, without limitation, cotton,
    wheat, corn, sugar, oil, paper, nuts and resin);
  *levels of inventory shrinkage;
  *seasonality of the Company’s business;
  *increases in costs of fuel or other energy, transportation or utilities
    costs and in the costs of labor, employment and healthcare;
  *the impact of changes in or noncompliance with governmental laws and
    regulations (including, but not limited to, product safety, healthcare and
    unionization) and developments in and outcomes of legal proceedings,
    investigations or audits;
  *disruptions, unanticipated expenses or operational failures in the
    Company’s supply chain including, without limitation, a decrease in
    transportation capacity for overseas shipments or work stoppages or other
    labor disruptions that could impede the receipt of merchandise;
  *delays or unanticipated expenses in constructing new distribution centers;
  *a data security breach or other damage or interruption to the Company’s
    information systems;
  *changes in the competitive environment and the markets where the Company
    operates;
  *natural disasters, unusual weather conditions, pandemic outbreaks,
    boycotts, war and geo-political events;
  *incurrence of material uninsured losses, excessive insurance costs or
    accident costs;
  *the Company’s failure to protect its brand name;
  *the Company’s loss of key personnel or the inability to hire additional
    qualified personnel;
  *interest rate and currency exchange fluctuations;
  *the Company’s debt levels and restrictions in its debt agreements;
  *the Company’s failure to maintain effective internal controls;
  *changes to income tax expense due to changes in or interpretation of tax
    laws, or as a result of federal or state income tax examinations;
  *changes to or new accounting guidance, such as changes to lease accounting
    guidance or a requirement to convert to international financial reporting
    standards;
  *factors disclosed under “Risk Factors” in Part I, Item 1A of the Company’s
    Annual Report on Form 10-K filed with the Securities and Exchange
    Commission on March 22, 2012 and any subsequent quarterly filings on Form
    10-Q; and
  *such other factors as may be discussed or identified in this press
    release.

All forward-looking statements are qualified in their entirety by these and
other cautionary statements that the Company makes from time to time in its
other SEC filings and public communications. The Company cannot assure the
reader that it will realize the results or developments the Company
anticipates or, even if substantially realized, that they will result in the
consequences or affect the Company or its operations in the way the Company
expects. Forward-looking statements speak only as of the date made. The
Company undertakes no obligation to update or revise any forward-looking
statement to reflect events or circumstances arising after the date on which
they were made, except as otherwise required by law. As a result of these
risks and uncertainties, readers are cautioned not to place undue reliance on
any forward-looking statements included herein or that may be made elsewhere
from time to time by, or on behalf of, the Company.

About Dollar General Corporation

Dollar General Corporation has been delivering value to shoppers for more than
70 years. Dollar General helps shoppers Save time. Save money. Every day!(R)
by offering products that are frequently used and replenished, such as food,
snacks, health and beauty aids, cleaning supplies, basic apparel, house wares
and seasonal items at low everyday prices in convenient neighborhood
locations. With 10,371 stores in 40 states as of November 2, 2012, Dollar
General has more locations than any other discount retailer in America. In
addition to high quality private brands, Dollar General sells products from
America’s most-trusted manufacturers such as Procter & Gamble, Kimberly-Clark,
Unilever, Kellogg’s, General Mills, Nabisco, Hanes, PepsiCo and Coca-Cola.
Learn more about Dollar General at www.dollargeneral.com.




DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
                                                            
                                (Unaudited)
                                November 2,      October 28,     February 3,
                                2012            2011           2012
ASSETS
Current assets:
  Cash and cash equivalents     $ 142,580        $ 118,580       $ 126,126
  Merchandise inventories         2,330,436        2,089,722       2,009,206
  Income taxes receivable         13,554           48,807          -
 Prepaid expenses and other    131,622       135,746      139,742   
  current assets
 Total current assets          2,618,192     2,392,855    2,275,074 
Net property and equipment      2,047,434     1,716,797    1,794,960 
Goodwill                        4,338,589     4,338,589    4,338,589 
Other intangible assets, net    1,223,407     1,240,733    1,235,954 
Other assets, net               46,055        46,908       43,943    
Total assets                   $ 10,273,677   $ 9,735,882   $ 9,688,520 
                                                                 
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
  Current portion of            $ 891            $ 763           $ 590
  long-term obligations
  Accounts payable                1,199,727        1,132,544       1,064,087
  Accrued expenses and other      392,439          414,977         397,075
  Income taxes payable            997              1,111           44,428
 Deferred income taxes         39,785        22,826       3,722     
 Total current liabilities     1,633,839     1,572,221    1,509,902 
Long-term obligations           3,023,367     2,721,061    2,617,891 
Deferred income taxes           655,910       647,329      656,996   
Other liabilities               225,699       233,950      229,149   
Total liabilities               5,538,815     5,174,561    5,013,938 
                                                                 
Commitments and contingencies
                                                                 
Shareholders' equity:
  Preferred stock                 -                -               -
  Common stock                    287,613          299,514         295,828
  Additional paid-in capital      2,983,323        2,964,576       2,967,027
  Retained earnings               1,468,534        1,305,107       1,416,918
 Accumulated other             (4,608     )   (7,876    )   (5,191    )
  comprehensive loss
 Total shareholders' equity    4,734,862     4,561,321    4,674,582 
Total liabilities and          $ 10,273,677   $ 9,735,882   $ 9,688,520 
shareholders' equity




DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
                                                                
                             For the Quarter (13 Weeks) Ended
                             November 2,    % of Net   October 28,    % of Net
                             2012          Sales     2011          Sales
Net sales                    $ 3,964,647    100.00 %   $ 3,595,224    100.00 %
Cost of goods sold           2,738,524   69.07     2,479,422   68.96  
Gross profit                   1,226,123    30.93        1,115,802    31.04
Selling, general and         864,734     21.81     804,885     22.39  
administrative expenses
Operating profit               361,389      9.12         310,917      8.65
Interest expense               27,726       0.70         38,632       1.07
Other (income) expense       1,728       0.04      53          0.00   
Income before income taxes     331,935      8.37         272,232      7.57
Income tax expense           124,250     3.13      101,068     2.81   
Net income                  $ 207,685     5.24   %  $ 171,164     4.76   %
                                                                      
Earnings per share:
           Basic             $ 0.62                    $ 0.50
           Diluted           $ 0.62                    $ 0.50
Weighted average shares
outstanding:
           Basic               332,337                   341,955
           Diluted             334,004                   345,777
                                                                      
                                                                      
                                                                      
                             For the 39 Weeks Ended
                             November 2,    % of Net   October 28,    % of Net
                             2012          Sales     2011          Sales
Net sales                    $ 11,814,507   100.00 %   $ 10,622,115   100.00 %
Cost of goods sold           8,096,905   68.53     7,270,574   68.45  
Gross profit                   3,717,602    31.47        3,351,541    31.55
Selling, general and         2,584,675   21.88     2,368,977   22.30  
administrative expenses
Operating profit               1,132,927    9.59         982,564      9.25
Interest expense               100,466      0.85         164,831      1.55
Other (income) expense       29,956      0.25      60,564      0.57   
Income before income taxes     1,002,505    8.49         757,169      7.13
Income tax expense           367,265     3.11      282,994     2.66   
Net income                  $ 635,240     5.38   %  $ 474,175     4.46   %
                                                                      
Earnings per share:
           Basic             $ 1.90                    $ 1.39
           Diluted           $ 1.89                    $ 1.37
Weighted average shares
outstanding:
           Basic               333,806                   341,670
           Diluted             336,339                   345,598




DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

                                             For the 39 Weeks Ended
                                                 November 2,     October 28,
                                                 2012            2011
Cash flows from operating activities:
  Net income                                     $ 635,240        $ 474,175
  Adjustments to reconcile net income to net
  cash from operating activities:
         Depreciation and amortization             222,398          204,771
         Deferred income taxes                     24,221           23,977
         Tax benefit of stock options              (85,335    )     (16,101  )
         Loss on debt retirement, net              30,620           60,303
         Non-cash share-based compensation         15,357           10,969
         Other non-cash gains and losses           9,548            31,656
         Change in operating assets and
         liabilities:
                  Merchandise inventories          (326,076   )     (350,932 )
                  Prepaid expenses and other       12,399           (30,899  )
                  current assets
                  Accounts payable                 130,733          164,336
                  Accrued expenses and other       (4,334     )     89,993
                  liabilities
                  Income taxes                     28,350           (57,575  )
               Other                          (2,235     )   (174     )
Net cash provided by (used in) operating         690,886       604,499  
activities
                                                                  
Cash flows from investing activities:
  Purchases of property and equipment              (453,626   )     (363,099 )
 Proceeds from sales of property and            1,144         729      
  equipment
Net cash provided by (used in) investing         (452,482   )   (362,370 )
activities
                                                                  
Cash flows from financing activities:
  Issuance of long-term obligations                500,000          -
  Repayments of long-term obligations              (478,026   )     (911,708 )
  Borrowings under revolving credit facility       1,703,400        649,100
  Repayments of borrowings under revolving         (1,349,800 )     (361,300 )
  credit facility
  Debt issue costs                                 (15,278    )     -
  Repurchases of common stock                      (596,442   )     -
  Equity transactions with employees, net of       (71,139    )     (13,188  )
  taxes paid
 Tax benefit of stock options                   85,335        16,101   
Net cash provided by (used in) financing         (221,950   )   (620,995 )
activities
                                                                  
Net increase (decrease) in cash and cash           16,454           (378,866 )
equivalents
Cash and cash equivalents, beginning of period   126,126       497,446  
Cash and cash equivalents, end of period        $ 142,580      $ 118,580  
                                                                  
Supplemental cash flow information:
Cash paid for:
  Interest                                       $ 90,992         $ 151,123
  Income taxes                                   $ 328,196        $ 301,643
Supplemental schedule of non-cash investing
and financing activities:
  Purchases of property and equipment awaiting
  processing for payment, included in Accounts   $ 40,569         $ 44,225
  payable
  Purchases of property and equipment under      $ 3,440          $ -
  capital lease obligations




DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Selected Additional Information
(Unaudited)
                                                     
                                                          
Sales by Category (in thousands)
                                                          
                   For the Quarter (13 Weeks) Ended
                   November 2, 2012   October 28, 2011   % Change
Consumables        $    3,004,247      $  2,705,765       11.0       %
Seasonal                471,541           433,931         8.7        %
Home products           257,918           236,951         8.8        %
Apparel                230,941         218,577        5.7        %
     Net sales     $    3,964,647     $  3,595,224      10.3       %
                                                          
                                                          
                   For the 39 Weeks Ended
                   November 2, 2012   October 28, 2011   % Change
Consumables        $    8,802,350      $  7,845,905       12.2       %
Seasonal                1,532,772         1,393,557       10.0       %
Home products           772,831           706,962         9.3        %
Apparel                706,554         675,691        4.6        %
     Net sales     $    11,814,507    $  10,622,115     11.2       %
                                                          
                                                          
                                                          
                                                          
Store Activity
                                                          
                                       For the 39 Weeks Ended
                                       November 2, 2012  October 28, 2011
                                                          
Beginning store count                     9,937           9,372
New store openings                        479             482
Store closings                           (45         )  (41        )
Net new stores                           434           441        
Ending store count                       10,371        9,813      
Total selling square footage (000's)     75,692        70,737     
     Growth rate (square footage)        7.0         %  6.7        %




DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income and Adjusted Diluted Earnings Per Share
Selling, General & Administrative Expenses and Operating Profit, Excluding Certain
Items
(in millions, except per share amounts)
                                                                       
                 For the Quarter (13 Weeks) Ended
                 November 2, 2012         October 28, 2011         Increase
                                % of                     % of
                 $             Net      $             Net       $          %
                                Sales                    Sales
                                                                               
Net sales       $ 3,964.6            $ 3,595.2             $ 369.4     10.3 %
                                                                               
Selling,
general and      $ 864.7        21.81 %   $ 804.9        22.39 %   $ 59.8      7.4  %
administrative
("SG&A")
  Secondary
  offering         (0.5     )               (0.4     )
  expenses
  Acceleration
 of             (0.4     )           (0.5     )  
  equity-based
  compensation
SG&A,
excluding       $ 863.8      21.79 %  $ 804.0      22.36 %   $ 59.8      7.4  %
certain items
                                                                               
Operating        $ 361.4        9.12  %   $ 310.9        8.65  %   $ 50.5      16.2 %
profit
  Secondary
  offering         0.5                      0.4
  expenses
  Acceleration
 of             0.4                 0.5        
  equity-based
  compensation
Operating
profit,         $ 362.3      9.14  %  $ 311.8      8.67  %   $ 50.5      16.2 %
excluding
certain items
                                                                               
Net income       $ 207.7        5.24  %   $ 171.2        4.76  %   $ 36.5      21.3 %
  Secondary
  offering         0.5                      0.4
  expenses
  Acceleration
  of               0.4                      0.5
  equity-based
  compensation
  Debt
 amendment      1.7                 -          
  fees
  Total
 adjustments,   2.6                 0.9        
  before
  income taxes
  Income tax
 effect of      (0.8     )           (0.2     )  
  adjustments
 Net            1.8                 0.7        
  adjustments
Adjusted net    $ 209.5      5.28  %  $ 171.9      4.78  %   $ 37.6      21.9 %
income
                                                                               
Diluted
earnings per
share:
  As reported    $ 0.62                   $ 0.50                   $ 0.12      24.0 %
  Adjusted       $ 0.63                   $ 0.50                   $ 0.13      26.0 %
                                                                               
Weighted
average            334.0                    345.8
diluted shares



                 For the 39 Weeks Ended
                 November 2, 2012         October 28, 2011         Increase
                                % of                     % of
                 $             Net       $             Net       $          %
                                Sales                    Sales
                                                                               
Net sales       $ 11,814.5           $ 10,622.1            $ 1,192.4   11.2 %
                                                                               
Selling,
general and      $ 2,584.7      21.88 %   $ 2,369.0      22.30 %   $ 215.7     9.1  %
administrative
("SG&A")
  Litigation       -                        (13.1    )
  settlements
  Secondary
  offering         (1.4     )               (0.4     )
  expenses
  Acceleration
 of             (1.5     )            (0.5     )  
  equity-based
  compensation
SG&A,
excluding       $ 2,581.8    21.85 %   $ 2,355.0    22.17 %   $ 226.8     9.6  %
certain items
                                                                               
Operating        $ 1,132.9      9.59  %   $ 982.6        9.25  %   $ 150.4     15.3 %
profit
  Litigation       -                        13.1
  settlements
  Secondary
  offering         1.4                      0.4
  expenses
  Acceleration
 of             1.5                  0.5        
  equity-based
  compensation
Operating
profit,         $ 1,135.8    9.61  %   $ 996.6      9.38  %   $ 139.2     14.0 %
excluding
certain items
                                                                               
Net income       $ 635.2        5.38  %   $ 474.2        4.46  %   $ 161.1     34.0 %
  Litigation       -                        13.1
  settlements
  Secondary
  offering         1.4                      0.4
  expenses
  Acceleration
  of               1.5                      0.5
  equity-based
  compensation
  Adjustment
  for
  settlement       (2.5     )               -
  of interest
  rate swaps
  Write-off of
  capitalized      1.6                      -
  debt costs
  Debt
  amendment        1.7                      -
  fees
  Repurchase
 of long-term   29.0                 60.3       
  obligations,
  net
  Total
 adjustments    32.7                 74.3       
  before
  income taxes
  Income tax
 effect of      (12.3    )            (28.9    )  
  adjustments
 Net            20.4                 45.4       
  adjustments
Adjusted net    $ 655.6      5.55  %   $ 519.6      4.89  %   $ 136.1     26.2 %
income
                                                                               
Diluted
earnings per
share:
  As reported    $ 1.89                   $ 1.37                   $ 0.52      38.0 %
  Adjusted       $ 1.95                   $ 1.50                   $ 0.45      30.0 %
                                                                               
Weighted
average            336.3                    345.6
diluted shares
outstanding




DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Continued)

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
                                                                     
                                                                             
                 For the Quarter     For the                   For the
                 (13 Weeks) Ended    39 Weeks Ended            Four Quarters Ended
                 Nov. 2,   Oct.      Nov. 2,       Oct. 28,    Nov. 2,       Oct. 28,
                           28,
(In millions)    2012     2011      2012         2011        2012         2011
                                                               (53 Weeks)   (52
                                                                             Weeks)
                                                                             
Net income       $ 207.7   $ 171.2   $ 635.2       $ 474.2     $ 927.7       $ 696.8
Add
(subtract):
  Interest         27.7      38.6      100.5         164.9       140.5         230.4
  expense
  Depreciation
  and              73.7      66.3      215.4         196.0       283.5         258.0
  amortization
  Income taxes    124.2   101.1    367.3      283.0      542.9      403.0
EBITDA            433.3   377.2    1,318.4    1,118.1    1,894.6    1,588.2
                                                                             
Adjustments:
  Loss on debt
  retirement,      -         -         30.6          60.3        30.6          60.3
  net
  Loss
  (gain)on         -         0.1       (2.4    )     0.3         (2.3    )     0.4
  hedging
  instruments
  Non-cash
  expense for      5.1       4.2       15.4          11.0        19.7          14.2
  share-based
  awards
  Litigation
  settlement       -         -         -             13.1        -             13.1
  and related
  costs, net
  Indirect
  costs
  related to       0.5       0.4       1.3           0.4         1.8           0.7
  merger and
  stock
  offering
  Other
  non-cash
  charges          5.5       13.1      10.7          30.7        33.3          35.6
  (including
  LIFO)
  Other           1.7     -        2.5        -          2.5        -
Total             12.8    17.8     58.1       115.8      85.6       124.3
Adjustments
Adjusted         $ 446.1  $ 395.0   $ 1,376.5   $ 1,233.9   $ 1,980.2   $ 1,712.5
EBITDA




DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Continued)
(Dollars in millions)
                                                               
                                                                   
Senior Secured Incurrence Test
                                                                   
                                                     November 2,   October 28,
                                                     2012          2011
Senior secured debt                                  $  2,524.3    $  2,271.1
Less: cash                                             142.6        118.6
Senior secured debt, net of cash                     $  2,381.7    $  2,152.5
Adjusted EBITDA                                      $  1,980.2    $  1,712.5
Ratio of senior secured debt, net of cash, to        1.2x          1.3x
Adjusted EBITDA
                                                                   
                                                                   
                                                                   
Calculation of Ratio of Long-Term Obligations to Adjusted EBITDA
                                                                   
                                                     November 2,   October 28,
                                                     2012          2011
Total long-term obligations                          $  3,024.3    $  2,721.8
Adjusted EBITDA                                      $  1,980.2    $  1,712.5
Ratio of long-term obligations to Adjusted EBITDA    1.5x          1.6x
                                                                   
                                                                   
                                                                   
Calculation of Ratio of Long-Term Obligations, net of Cash, to Adjusted EBITDA
                                                                   
                                                     November 2,   October 28,
                                                     2012          2011
Total long-term obligations                          $  3,024.3    $  2,721.8
Less: cash                                             142.6        118.6
Total long-term obligations, net of cash             $  2,881.7    $  2,603.2
Adjusted EBITDA                                      $  1,980.2    $  1,712.5
Ratio of long-term obligations, net of cash, to      1.5x          1.5x
Adjusted EBITDA
                                                                   


Contact:

Investor and Financial Media Contacts:
Dollar General Corporation
Mary Winn Gordon, 615-855-5536
or
Emma Jo Kauffman, 615-855-5525
 
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