Dollar General (DG) 8-K Dollar General Corporation ReportsSecond Quarter 2008 Financial Results

Exhibit 99

Dollar General Corporation ReportsSecond Quarter 2008 Financial Results

Same Store Sales Increased 10.1%;Gross Margin Expanded 250 Basis Points to 29.1%;SG&A as a Percentage of Sales Decreased 111 Basis Points versus Year Ago Period;Achieved Net Income of $27.7 Million;Adjusted EBITDA Increased 55% versus Year Ago Period

GOODLETTSVILLE, Tenn.--(BUSINESS WIRE)--Dollar General Corporation today announced financial results for the second quarter and 26 weeks ended August 1, 2008.

Sales for the quarter increased 11.2 percent to $2.61 billion compared to $2.35 billion in the second quarter of fiscal 2007. Same store sales increased 10.1 percent with customer traffic and average transaction amount contributing significantly to the sales increase.

The second quarter gross profit rate increased by 250 basis points from last year, to 29.1 percent, driven by improvements in shrink, lower markdowns and improved distribution logistics efficiencies, which more than offset increased fuel costs and a LIFO charge of $16.0 million in the 2008 quarter. Selling, general and administrative expense (“SG&A”), as a percentage of sales, decreased 111 basis points from the 2007 quarter. Excluding certain expenses from each year related to strategic initiatives and the change in ownership of the Company, as listed in the accompanying table, SG&A as a percentage of sales decreased 47 basis points, driven by sales leverage and lower depreciation, advertising, workers’ compensation and employee benefits expense, partially offset by higher incentive compensation expense associated with 2008 financial performance.

For the second quarter, the Company reported net income of $27.7 million compared with a net loss of $68.8 million for the combined Predecessor and Successor periods in the 2007 second quarter. EBITDA (earnings before interest, income taxes, depreciation and amortization) increased to $200.1 million in the 2008 second quarter from $5.8 million in the 2007 second quarter. Adjusted EBITDA, as defined in the Company’s credit agreements and calculated in the attached schedule, was $225.7 million in the 2008 second quarter, an increase of $80.5 million, or 55 percent, from the 2007 second quarter.

For the 26-week year-to-date period, total sales increased 8.4 percent, including a 7.8 percent increase in same store sales. The gross profit rate increased 177 basis points to 28.9 percent and SG&A as a percentage of sales decreased 103 basis points to 23.9 percent. As a result, the Company reported net income of $33.6 million in the 2008 year-to-date period compared to a net loss of $35.2 million in the 2007 year-to-date combined Predecessor and Successor periods. EBITDA increased to $368.9 million in the 2008 period from $109.6 million in the 2007 period and Adjusted EBITDA, as defined in the Company’s credit agreements and calculated in the attached schedule, was $408.4 million in the 2008 period, an increase of $120.3 million, or 42 percent, over the 2007 period.

“We are encouraged by Dollar General’s strong financial performance during the second quarter and first half of 2008 in spite of the challenging economic environment,” said Rick Dreiling, Chief Executive Officer. “We achieved solid same store sales growth and gross margin expansion and were able to further leverage our SG&A spend, all of which resulted in continued improvement in our profitability. Our sales increases in the quarter offer further evidence that customers continue to trust and rely on Dollar General for the quality products they want at value prices. While we believe that we may be benefiting somewhat from current economic conditions, we are confident that our recently implemented operating priorities are accelerating our progress.”

Merchandise Inventories and Accounts Payable

As of August 1, 2008, total merchandise inventories, at cost, were $1.49 billion compared to $1.41 billion as of August 3, 2007, an increase of $84.8 million, or approximately six percent in total and four percent on an average per-store basis. Inventory levels were increased to support higher sales levels. In addition, the Company’s new merchandise planograms include a net increase in the number of merchandise items, primarily highly consumables, which are expected to contribute to increased future sales. Annual inventory turns increased to 5.0 times from 4.5 times in the year ago period. Accounts payable increased by $264.5 million from the year ago period, more than offsetting the increase in inventories.

Long-Term Obligations

As of August 1, 2008, outstanding long-term obligations, including the current portion, were $4.18 billion, including $2.30 billion outstanding under a senior secured term loan facility. There were no borrowings under the Company’s asset-based revolving credit facility. As of September 2, 2008, the Company had no outstanding borrowings under its asset-based revolving credit facility, with excess availability of $966.2 million, and $111.0 million of invested cash. As of August 1, 2008, the ratio of long-term obligations to Adjusted EBITDA, as calculated on the attached schedule, decreased to 5.2 times from 7.1 times since the closing of the Merger transaction in July 2007.

Cash Flow

For the 26-week period ended August 1, 2008, the Company generated $296.5 million of cash from operating activities versus $142.3 million in the corresponding 2007 combined Predecessor and Successor periods, resulting from the impact of the Company’s strong operating results and working capital changes.

Company Outlook

Based on current visibility and business trends, the Company remains committed to productive sales growth, expense management and gross margin expansion in 2008. In total, the Company plans to open approximately 200 new Dollar General stores and to relocate or remodel approximately 400 stores during the year. Year-to-date, the Company has opened 125 new stores, closed 11 stores and relocated or remodeled an additional 249 stores. Dollar General continues to expect capital expenditures for the year to be approximately $200 million to $220 million, primarily related to the opening of new stores as well as the remodel and relocation of existing stores and other special initiatives.

Basis of Accounting

The Company was acquired on July 6, 2007 through a merger accounted for as a reverse acquisition (the “Merger”). Although the Company continued as the same legal entity after the Merger, the accompanying financial statements are presented as Predecessor for periods preceding the Merger and as Successor for periods subsequent to the Merger. The Successor reflects the result of the Company applying purchase accounting and a new basis of accounting beginning on July 7, 2007, which affects the comparability of amounts before and after the Merger.

The attached tables include combined results, as indicated, which represent the mathematical combination of the Successor and Predecessor in each of the periods presented. For comparison purposes, the discussions of operations, cash flows, EBITDA and Adjusted EBITDA are generally based on the combined amounts. The Company believes this comparison provides a more meaningful understanding of the underlying business. The combined results have not been prepared as pro forma results and may not reflect the actual results the Company would have achieved absent the Merger and may not be indicative of future results of operations.

Non-GAAP Disclosure

Certain information provided in this press release or to be discussed during the conference call has not been derived in accordance with generally accepted accounting principles (“GAAP”), including EBITDA and Adjusted EBITDA. Reconciliations to net income of EBITDA and Adjusted EBITDA used in this press release are provided in the accompanying table.

EBITDA and Adjusted EBITDA are not measures of financial performance or condition, liquidity or profitability, and should not be considered as an alternative 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 and debt service requirements and replacement of fixed assets. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s financial results as reported under GAAP. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies. The Company believes that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information about the calculation of a material financial ratio in the Company’s credit facilities. Adjusted EBITDA is a material component of that ratio. Management from time to time uses EBITDA and Adjusted EBITDA, as well as other measures, as additional financial metrics to supplement net income and cash flow in its evaluation of the Company’s financial results. For more discussion regarding the financial ratio in the Company’s credit facilities, the reasons management believes these non-GAAP measures are useful to investors, and the limitations of these non-GAAP measures, please see the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2008.

Conference Call Information

The Company will hold a conference call on Wednesday, September 3, 2008 at 9:00 a.m. CDT/10:00 a.m. EDT, hosted by Rick Dreiling, 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 Thursday, September 18, 2008, and will be accessible online or by calling (334) 323-7226. The pass code for the replay is 71635131.

Forward-Looking Statements

This press release contains forward-looking information, such as the information in the section entitled “Company Outlook” and the expectations regarding new merchandise items contained in the section entitled “Merchandise Inventories and Accounts Payable.” The words "believe," "anticipate," "project," "plan," "schedule," "expect," "estimate," "objective," "forecast," "goal," "intend," “committed,” "will likely result," or "will continue" and similar expressions generally identify forward-looking statements. These matters involve risks, uncertainties and other factors that may cause the actual performance of the Company to differ materially from that expressed or implied by these forward-looking statements. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors. Factors that may result in actual results differing from such forward-looking information include, but are not limited to, those set forth in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2008, and other factors set forth in this press release.

Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they were made. 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 is the largest discount retailer in the United States by number of stores with more than 8,300 neighborhood stores located in 35 states. Dollar General helps shoppers Save Time. Save Money. Every Day.® by offering quality private label and national branded items that are frequently used and replenished such as food, snacks, health and beauty aids, cleaning supplies, basic apparel, house wares and seasonal items at everyday low prices in convenient neighborhood stores. Dollar General is among the largest retailers of top-quality products made by America’s most trusted manufacturers such as Procter & Gamble, Kimberly Clark, Unilever, Kellogg’s, General Mills, Nabisco, and Fruit of the Loom. The Company store support center is located in Goodlettsville, Tennessee. Dollar General’s Web site can be reached at www.dollargeneral.com.

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (In thousands)
	August 1,			February 1,			August 3,
	2008			2008			2007
	(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	261,630		$	100,209		$	123,670
Short-term investments		2,597			19,611			29,906
Merchandise inventories		1,490,063			1,288,661			1,405,247
Income taxes receivable		12,829			32,501			37,629
Deferred income taxes		17,395			17,297			68,076
Prepaid expenses and other current assets		68,287			59,465			71,915
Total current assets		1,852,801			1,517,744			1,736,443
Property and equipment, at cost		1,474,869			1,389,563			1,339,355
Less: accumulated depreciation and amortization		208,147			115,318			12,325
Net property and equipment		1,266,722			1,274,245			1,327,030
Goodwill		4,344,930			4,344,930			4,323,605
Intangible assets, net		1,347,948			1,370,557			1,392,587
Other assets, net		97,389			148,955			184,527
Total assets	$	8,909,790		$	8,656,431		$	8,964,192
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations	$	2,999		$	3,246		$	7,201
Accounts payable		818,246			551,040			553,718
Accrued expenses and other		341,728			300,956			322,594
Income taxes payable		1,744			2,999			811
Total current liabilities		1,164,717			858,241			884,324
Long-term obligations		4,177,610			4,278,756			4,535,030
Deferred income taxes		483,867			486,725			551,761
Other liabilities		305,636			319,714			249,538
Total liabilities		6,131,830			5,943,436			6,220,653
Redeemable common stock		11,157			9,122			6,794
Shareholders' equity:
Preferred stock		-			-			-
Common stock		277,712			277,741			277,018
Additional paid-in capital		2,484,606			2,480,062			2,486,902
Retained earnings (accumulated deficit)		28,816			(4,818	)		(27,175	)
Accumulated other comprehensive loss		(24,331	)		(49,112	)		-
Total shareholders' equity		2,766,803			2,703,873			2,736,745
Total liabilities and shareholders' equity	$	8,909,790		$	8,656,431		$	8,964,192

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) (In thousands)
	Successor						Predecessor			Combined
	13 Weeks			July 7, 2007			May 5, 2007			13 Weeks
	Ended			through			through			Ended
	August 1, 2008			August 3, 2007 (a)			July 6, 2007			August 3, 2007
Net sales	$	2,609,384		$	699,078		$	1,648,486		$	2,347,564
% of net sales		100.00	%								100.00	%
Cost of goods sold		1,851,349			514,355			1,209,971			1,724,326
% of net sales		70.95	%								73.45	%
Gross profit		758,035			184,723			438,515			623,238
% of net sales		29.05	%								26.55	%
Selling, general and administrative		614,980			190,440			388,839			579,279
% of net sales		23.57	%								24.68	%
Transaction and related costs		-			308			95,791			96,099
% of net sales		-									4.09	%
Operating profit (loss)		143,055			(6,025	)		(46,115	)		(52,140	)
% of net sales		5.48	%								(2.22	)%
Interest income		(1,217	)		(1,033	)		(2,473	)		(3,506	)
Interest expense		99,434			36,520			4,132			40,652
Other (income) expense		292			(567	)		-			(567	)
Income (loss) before income taxes		44,546			(40,945	)		(47,774	)		(88,719	)
Income tax expense (benefit)		16,828			(14,995	)		(4,906	)		(19,901	)
Net income (loss)	$	27,718		$	(25,950	)	$	(42,868	)	$	(68,818	)
% of net sales		1.06	%								(2.93	)%
	Successor						Predecessor			Combined
	26 Weeks			July 7, 2007			February 3, 2007			26 Weeks
	Ended			through			through			Ended
	August 1, 2008			August 3, 2007 (b)			July 6, 2007			August 3, 2007
Net sales	$	5,012,882		$	699,078		$	3,923,753		$	4,622,831
% of net sales		100.00	%								100.00	%
Cost of goods sold		3,561,770			514,355			2,852,178			3,366,533
% of net sales		71.05	%								72.82	%
Gross profit		1,451,112			184,723			1,071,575			1,256,298
% of net sales		28.95	%								27.18	%
Selling, general and administrative		1,197,186			190,440			960,930			1,151,370
% of net sales		23.88	%								24.91	%
Transaction and related costs		-			308			101,397			101,705
% of net sales		-									2.20	%
Operating profit (loss)		253,926			(6,025	)		9,248			3,223
% of net sales		5.07	%								0.07	%
Interest income		(2,174	)		(1,033	)		(5,046	)		(6,079	)
Interest expense		200,305			36,520			10,299			46,819
Other (income) expense		590			1,448			-			1,448
Income (loss) before income taxes		55,205			(42,960	)		3,995			(38,965	)
Income tax expense (benefit)		21,571			(15,785	)		11,993			(3,792	)
Net income (loss)	$	33,634		$	(27,175	)	$	(7,998	)	$	(35,173	)
% of net sales		0.67	%								(0.76	)%
(a) Includes the results of operations of Buck Acquisition Corp. for the period from May 5, 2007 through July 6, 2007, prior to its merger with and into Dollar General Corporation (reflecting the change in fair value of interest rate swaps), and the post-merger results of Dollar General Corporation for the period from July 7, 2007 through August 3, 2007.
(b) Includes the results of operations of Buck Acquisition Corp. for the period from March 6, 2007 (its formation) through July 6, 2007 prior to its merger with and into Dollar General Corporation (reflecting the change in fair value of interest rate swaps), and the post-merger results of Dollar General Corporation for the period from July 7, 2007 through August 3, 2007.

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Successor						Predecessor			Combined
	26 weeks ended			July 7, 2007 through			February 3, 2007 through			26 weeks ended
	August 1, 2008			August 3, 2007(a)			July 6, 2007			August 3, 2007
Cash flows from operating activities:
Net income (loss)	$	33,634		$	(27,175	)	$	(7,998	)	$	(35,173	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		122,023			25,575			83,917			109,492
Deferred income taxes		(18,208	)		(14,378	)		(20,874	)		(35,252	)
Noncash LIFO charge		16,037			-			-			-
Noncash share-based compensation		4,516			1,170			45,433			46,603
Tax benefit from stock option exercises		(475	)		-			(3,927	)		(3,927	)
Noncash unrealized gain on interest rate swap		-			(4,739	)		-			(4,739	)
Change in operating assets and liabilities:
Merchandise inventories		(217,439	)		(27,027	)		16,424			(10,603	)
Prepaid expenses and other current assets		(6,060	)		(8,711	)		(6,184	)		(14,895	)
Accounts payable		262,415			(28,439	)		34,794			6,355
Accrued expenses and other liabilities		68,692			26,254			52,995			79,249
Income taxes		18,892			(2,188	)		2,809			621
Other		12,497			15			4,557			4,572
Net cash provided by (used in) operating activities		296,524			(59,643	)		201,946			142,303
Cash flows from investing activities:
Merger, net of cash acquired		-			(6,724,370	)		-			(6,724,370	)
Purchases of property and equipment		(80,100	)		(11,400	)		(56,153	)		(67,553	)
Purchases of short-term investments		(9,903	)		-			(5,100	)		(5,100	)
Sales of short-term investments		58,950			1,000			9,505			10,505
Purchases of long-term investments		-			(4,662	)		(15,754	)		(20,416	)
Proceeds from sale of property and equipment		683			162			620			782
Net cash used in investing activities		(30,370	)		(6,739,270	)		(66,882	)		(6,806,152	)
Cash flows from financing activities:
Issuance of common stock		-			2,765,443			-			2,765,443
Issuance of long-term obligations		-			4,176,817			-			4,176,817
Repayments of long-term obligations		(2,195	)		(210,298	)		(4,500	)		(214,798	)
Borrowings under revolving credit facilities		-			432,300			-			432,300
Repayments of borrowings under revolving credit facilities		(102,500	)		(132,300	)		-			(132,300	)
Debt issuance costs		-			(109,379	)		-			(109,379	)
Payment of cash dividends		-			-			(15,710	)		(15,710	)
Proceeds from exercise of stock options		-			-			41,546			41,546
Repurchases of common stock		(513	)		-			-			-
Tax benefit of stock options		475			-			3,927			3,927
Net cash provided by (used in) financing activities		(104,733	)		6,922,583			25,263			6,947,846
Net increase in cash and cash equivalents		161,421			123,670			160,327			283,997
Cash balance at merger date		-			-			-			(349,615	)
Cash and cash equivalents, beginning of period		100,209			-			189,288			189,288
Cash and cash equivalents, end of period	$	261,630		$	123,670		$	349,615		$	123,670
(a) Includes the results of operations of Buck Acquisition Corp. for the period from March 6, 2007 (its formation) through July 6, 2007, prior to its merger with and into Dollar General Corporation (reflecting the change in fair value of interest rate swaps), and the post-merger results of Dollar General Corporation for the period from July 7, 2007 through August 3, 2007.

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Selected Additional Information (Unaudited)
Sales by Category (in thousands)
	13 Weeks Ended
	August 1, 2008		August 3, 2007			% Change
Highly consumable	$	1,796,015	$	1,578,723		13.8	%
Seasonal		384,520		365,557		5.2	%
Home products		219,542		207,830		5.6	%
Basic clothing		209,307		195,454		7.1	%
Net sales	$	2,609,384	$	2,347,564		11.2	%
	26 Weeks Ended
	August 1, 2008		August 3, 2007			% Change
Highly consumable	$	3,476,910	$	3,102,517		12.1	%
Seasonal		706,646		702,006		0.7	%
Home products		424,035		422,876		0.3	%
Basic clothing		405,291		395,432		2.5	%
Net sales	$	5,012,882	$	4,622,831		8.4	%
New Store Activity
			26 Weeks Ended
			August 1, 2008			August 3, 2007
Beginning store count				8,194		8,229
New store openings				125		240
Store closings				(11	)	(316	)
Net new (closed) stores				114		(76	)
Ending store count				8,308		8,153
Total selling square footage (000's)				58,302		56,978

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
	13 Weeks Ended						26 Weeks Ended
				Combined						Combined
	August 1,			August 3,			August 1,			August 3,
(In millions)	2008			2007			2008			2007
Net income (loss)	$	27.7		$	(68.8	)	$	33.6		$	(35.2	)
Add (subtract):
Interest income		(1.2	)		(3.5	)		(2.2	)		(6.1	)
Interest expense		99.4			40.7			200.3			46.8
Depreciation and amortization		57.4			57.3			115.7			107.9
Income taxes		16.8			(19.9	)		21.5			(3.8	)
EBITDA		200.1			5.8			368.9			109.6
Adjustments:
Transaction and related costs		-			96.1			-			101.7
Loss on debt retirements, net		-			6.2			-			6.2
(Gain) loss on interest rate swaps		0.3			(6.8	)		0.6			(4.7	)
Contingent loss on distribution center leases		-			8.6			-			8.6
Impact of markdowns related to inventory clearance activities, including LCM adjustments, net of purchase accounting adjustments		-			9.0			1.3			5.1
SG&A related to store closing and inventory clearance activities		-			17.6			-			46.9
Operating losses (cash) of stores to be closed		-			4.1			-			9.4
Monitoring and consulting fees to affiliates		2.5			0.8			4.7			0.8
Stock option and restricted stock unit expense		2.2			3.8			4.5			3.8
Indirect merger-related costs		4.6			-			12.4			-
Other noncash charges (LIFO)		16.0			-			16.0			-
Other		-			-			-			0.7
Total Adjustments		25.6			139.4			39.5			178.5
Adjusted EBITDA	$	225.7		$	145.2		$	408.4		$	288.1
	52 Weeks Ended
				Combined			Combined
	August 1,			August 3,			February 1,			May 4,
(In millions)	2008			2007			2008			2007
Net income (loss)	$	56.0		$	9.6		$	(12.8	)	$	123.9
Add (subtract):
Interest income		(4.9	)		(9.2	)		(8.8	)		(7.1	)
Interest expense		416.7			65.5			263.2			33.8
Depreciation and amortization		234.2			211.0			226.4			202.3
Income taxes		35.5			22.1			10.2			69.7
EBITDA		737.5			299.0			478.2			422.6
Adjustments:
Transaction and related costs		0.9			101.7			102.6			5.6
(Gain) loss on debt retirements, net		(5.0	)		6.2			1.2			-
(Gain) loss on interest rate swaps		7.7			(4.7	)		2.4			2.1
Contingent loss on distribution center leases		3.4			8.6			12.0			-
Impact of markdowns related to inventory clearance activities, including LCM adjustments, net of purchase accounting adjustments		(4.2	)		160.0			(0.4	)		153.9
SG&A related to store closing and inventory clearance activities		7.1			79.9			54.0			62.4
Operating losses (cash) of stores to be closed		1.1			18.3			10.5			17.2
Hurricane Katrina insurance proceeds		-			(7.9	)		-			(7.0	)
Monitoring and consulting fees to affiliates		8.7			0.8			4.8			-
Stock option and restricted stock unit expense		7.2			3.8			6.5			-
Indirect merger-related costs		17.0			-			4.6			-
Other noncash charges (LIFO)		22.1			-			6.1			-
Other		0.3			1.7			1.0			1.7
Total Adjustments		66.3			368.4			205.3			235.9
Adjusted EBITDA	$	803.8		$	667.4		$	683.5		$	658.5

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
Adjusted SG&A Improvement
(Dollars in millions)
	Successor				Combined
	13 Weeks Ended August 1, 2008				13 Weeks Ended August 3, 2007				Basis Points
	$		% of Sales		$		% of Sales		Difference
Net sales	$	2,609.4			$	2,347.6
Selling, general and administrative	$	615.0	23.57	%	$	579.3	24.68	%	111
Less non comparable expenses:
Amortization of leasehold intangibles	$	10.0	0.38	%	$	3.4	0.14	%	(24	)
Monitoring, consulting, recruiting and legal		7.1	0.27	%		0.8	0.03	%	(24	)
Project Alpha store closings		-	-			17.7	0.75	%	75
Contingent loss on distribution center leases		-	-			8.6	0.37	%	37
Total Adjustments	$	17.1			$	30.5			64
Adjusted SG&A improvement (basis points)									47
	Successor				Combined				Basis
	26 Weeks Ended August 1, 2008				26 Weeks Ended August 3, 2007				Points
	$		% of Sales		$		% of Sales		Difference
Net sales	$	5,012.9			$	4,622.8
Selling, general and administrative	$	1,197.2	23.88	%	$	1,151.4	24.91	%	103
Less non comparable expenses:
Amortization of leasehold intangibles	$	20.3	0.40	%	$	3.4	0.07	%	(33	)
Monitoring, consulting, recruiting and legal		10.0	0.20	%		1.5	0.03	%	(17	)
Project Alpha store closings		-	-			47.3	1.02	%	102
Contingent loss on distribution center leases		-	-			8.6	0.19	%	19
Severance		7.1	0.14	%		-	-		(14	)
Total Adjustments	$	37.4			$	60.8			57
Adjusted SG&A improvement (basis points)									46

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures CALCULATION OF RATIO OF LONG-TERM OBLIGATIONS TO ADJUSTED EBITDA (Leverage Ratio)
	August 1, 2008			February 1, 2008			At Merger Date July 6 2007
(in millions)
Senior secured term-loan facility	$	2,300.0		$	2,300.0		$	2,300.0
Senior secured asset-based revolving credit facility		-			102.5			432.3
10 5/8% Senior Notes due July 15, 2015, net of discount		1,153.9			1,152.9			1,151.8
11 7/8%/12 5/8% Senior Subordinated Notes due July 15, 2017		700.0			700.0			725.0
8 5/8% Notes due June 15, 2010		1.8			1.8			1.8
Financing and capital lease obligations		10.4			10.3			52.2
Tax increment financing due February 1, 2035		14.5			14.5			14.5
	$	4,180.6		$	4,282.0		$	4,677.6
Adjusted EBITDA for the related 52 week period	$	803.8		$	683.5		$	658.5	(a)
Total Debt / Adjusted EBITDA	5.2		x	6.3		x	7.1		x
(a) Calculation at Merger date is based on adjusted EBITDA for the 52 weeks ended May 4, 2007, the latest reported period prior to the Merger.

CONTACT:
Dollar General Corporation
Investor Contact:
Emma Jo Kauffman, 615-855-5525
or
Media Contact:
Tawn Earnest, 615-855-5209