SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
Commission File No.: 1-11421
Dollar General Corporation
401(k) Savings and Retirement Plan
(Full title of plan)
Dollar General Corporation
100 Mission Ridge
Goodlettsville, Tennessee 37072-2170
(Name of issuer of securities held pursuant to the plan
and address of principal executive office)
Report of Independent Certified Public Accountants
--------------------------------------------------
To the Participants and Plan Administrator of
Dollar General Corporation 401(k) Savings and Retirement Plan
Nashville, Tennessee
We have audited the accompanying statement of net assets
available for benefits of Dollar General Corporation 401(k) Savings and
Retirement Plan as of December 31, 2000, and the related statement of changes in
net assets available for benefits for the year ended December 31, 2000. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The statement of net assets available for benefits of Dollar General
Corporation 401(k) Savings and Retirement Plan as of December 31, 1999 was
audited by other auditors, whose report dated May 12, 2000 expressed an
unqualified opinion on the statement.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for benefits of the Plan at December
31, 2000, and the changes in net assets available for benefits for the year
ended December 31, 2000 in conformity with accounting principles generally
accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental Schedule of
Assets Held for Investment Purposes at End of Year as of December 31, 2000 and
Schedule of Reportable Transactions for the year ended December 31, 2000, are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements, but are supplementary information required by
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These schedules are
the responsibility of the Plan's management. Such schedules have been subjected
to the auditing procedures applied in our audit of the basic 2000 financial
statements and, in our opinion, are fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
/s/ Grant Thornton, LLP
-----------------------
Grant Thornton, LLP
Atlanta, Georgia
October 5, 2001
2
Dollar General Corporation
401(k) Savings and Retirement Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
2000 1999
---- ----
ASSETS
Investments, at fair value:
Dollar General Corporation Stock Fund $33,791,218 $30,666,749
Registered investment companies 30,092,838 25,648,346
Participant notes receivable 1,481,272 1,309,192
Real estate limited partnerships 383,963 515,303
----------- -----------
Total investments 65,749,291 58,139,590
----------- -----------
Receivables:
Employer contributions 5,332,911 4,298,023
Participants' contributions 478,987 463,352
----------- -----------
Total receivables 5,811,898 4,761,375
----------- -----------
Cash 319,888 139,432
----------- -----------
Total Assets 71,881,077 63,040,397
----------- -----------
LIABILITIES
Accrued expenses 72,481 --
Excess contributions payable -- 99,683
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $71,808,596 $62,940,714
=========== ===========
The accompanying notes are an integral part of these statements.
3
Dollar General Corporation
401(k) Savings and Retirement Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2000
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 2,279,848
Interest 267,350
-----------
Total investment income 2,547,198
-----------
Contributions:
Employers' 7,603,884
Participants' 5,194,744
Rollover 904,769
-----------
Total contributions 13,703,397
-----------
Total additions 16,250,595
-----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 7,195,017
Administrative expenses 187,696
-----------
Total deductions 7,382,713
-----------
Net increase 8,867,882
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 62,940,714
-----------
End of year $71,808,596
===========
The accompanying notes are an integral part of this statement.
4
Dollar General Corporation
401(k) Savings and Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
NOTE A - DESCRIPTION OF PLAN
The following brief description of the Dollar General Corporation
401(k) Savings and Retirement Plan ("the Plan") provides only general
information. Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
1. General
The Plan is a defined contribution plan for all employees of
Dollar General Corporation ("the Employer") who have completed one year and
1,000 hours of service and are age 21 or older. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
2. Contributions
The Plan allows the participants to make contributions from the
participants' earnings in the form of deferred compensation to a retirement plan
before income taxes are deducted. The contributions are invested, and income
earned is not taxed to the participant until withdrawn from the Plan.
Participants may elect to contribute from 1% to 15% of pre-tax
annual eligible compensation as defined in the Plan, subject to certain
limitations under applicable federal law. Participants may also make rollover
contributions to the Plan. The Employer has the option of matching up to 50% of
the first 6% of eligible compensation contributed by the participants. The
Employer matching contribution is invested as directed by the participant. The
Employer matching contribution for the 2000 plan year was equal to 50% of the
first 6% of eligible compensation contributed by the participants.
The Employer also has the option to make contributions to the
Plan on behalf of all participants which shall be treated as Qualified
Nonelective Employer Contributions ("QNEC") to the extent such contributions may
be used to meet the nondiscrimination requirements of the Internal Revenue Code.
The Employer may elect to have the first 1/2 of 1% of the QNEC be made in
Company common stock or used to acquire Company common stock. The remaining QNEC
is invested as directed by the participant. Included in Employer Contributions
Receivable are $5,136,101 and $4,106,366 related to the QNEC at December 31,
2000 and 1999, respectively.
In addition to the matching and QNEC contributions described
above, the Employer may contribute discretionary amounts from time to time as
profit sharing
5
Dollar General Corporation
401(k) Savings and Retirement Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
contributions. The profit sharing contribution is invested as
directed by the participant. There were no profit sharing contributions for the
2000 Plan year.
3. Participants' Accounts
Each participant's account is credited with the participant's
contributions and withdrawals, as applicable, and allocations of the Employer
contributions and Plan earnings. Allocations are based on participant earnings
or account balances, as defined. Plan expenses are allocated to participant
accounts based on an equal per person basis. The balance of forfeited nonvested
accounts was $998,963 and $596,774 at December 31, 2000 and 1999, respectively.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
4. Vesting
Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in all Employer contributions and contributions
made under the former Dollar General Corporation Retirement Plan, plus actual
earnings thereon, is based on years of credited service. Participants are 40%
vested after 4 years of credited service and 100% after 5 year of credited
service. Participants are 100% vested in QNEC contributions at all times.
5. Participant Loans
Participants in the Plan may borrow from their fund accounts a
minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their
vested account balance. Loans are secured by 50% of the balance in the
participant's account. Only one loan may be outstanding at a time.
Each loan bears interest at a rate commensurate with local
prevailing rates as determined by the Plan Administrator, and must be repaid
within 5 years from the date of the loan unless proceeds are used to acquire the
principal residence of the participant borrower. Interest rates on outstanding
loans range from 7.75% to 8.5% at December 31, 2000. Principal and interest are
paid ratably through weekly or semi-monthly payroll deductions.
6. Payments of Benefits
On termination of service, a participant may elect to receive
either a lump-sum amount equal to the value of the participant's vested interest
in his or her account, or monthly, quarterly, semi-annual or annual installments
over a period not to exceed life expectancy, as long as the periodic payments
are not less than $50. The balance of the
6
Dollar General Corporation
401(k) Savings and Retirement Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
participant's account is automatically
disbursed to the participant's beneficiary upon the participant's death.
7. Forfeited Accounts
Forfeited balances of terminated participants' nonvested accounts
are used to reduce future contributions of the Company. In 2000, employer
contributions were reduced by $129,117 from forfeited nonvested accounts.
8. Investment Options
Participants have the option to invest their contributions,
rollover contributions and employer contributions in a variety of investment
options. Except for the Dollar General Corporation Stock Fund, the funds are
proprietary products of the American Funds Group. Participants may change their
investment options at any time.
Participants may invest their account in minimum whole increments
of 1% in any of the following options:
Dollar General Corporation Stock Fund - This fund is primarily
comprised of Dollar General Corporation common stock with the remainder invested
in a money market account.
The Income Fund of America - This fund seeks to provide current
income and, secondarily, growth of capital through a flexible mix of equity and
debt instruments. The fund may invest in stocks, bonds and other fixed-income
securities in any proportion.
Washington Mutual Investors Fund - This fund seeks to provide
current income and the opportunity for growth of principal. The fund invests in
stock of U.S. companies that meet strict standards based on requirements
originally established by the U.S. District Court for the District of Columbia
for the investment of trust funds.
New Perspective Fund - This fund seeks to provide long-term
growth of capital through investments all over the world, including the United
States. The fund diversifies in blue chip companies here and abroad, focusing on
opportunities generated by changes in global trade patterns and economic and
political relationships. The fund's investments are in common stocks,
convertibles, preferred stocks, bonds and cash.
7
Dollar General Corporation
401(k) Savings and Retirement Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
The Cash Management Trust of America - This fund seeks to provide
income on cash reserves, while preserving capital and maintaining liquidity,
through high-quality money market instruments.
The Bond Fund of America - This fund seeks to provide a high
level of current income with preservation of capital. The fund invests in
corporate debt securities, U.S. and other government securities,
mortgage-related securities and cash, in which it must invest at least 60% of
its assets in securities rated A or better at the time of purchase. The fund may
invest up to 25% of assets in fixed-income securities of corporations and
government entities outside the United States. Typically, the fund will invest
in intermediate to long-term securities.
SMALLCAP World Fund - This fund seeks to provide long-term growth
of capital by investing in the stocks of smaller companies in the United States
and around the world. Normally, at least 65% of assets will be invested in
equities of issuers located in at least three countries and typically having
market capitalizations from $50 million to 1.2 billion.
The New Economy Fund - This fund seeks long-term growth of
capital by investing primarily in stocks of companies in the service and
information area of the global economy, although a portion of its assets may be
outside these areas. This fund may also hold cash or money market instruments.
The Growth Fund of America - This fund seeks long-term growth of
capital through investments in a diversified portfolio of common stocks. The
fund may invest up to 15% of its assets in securities of issuers outside the
United States and up to 10% of its assets in lower quality debt securities.
9. Administrative Expenses
The participant's account absorbs the costs charged for
originating loans. Fees and expenses associated with the providing of
administrative and record keeping services by an external provider are paid by
the Plan. The Employer pays all other expenses.
10. Plan Termination
Although it has not expressed any intent to do so, the Employer
has the right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, all participant accounts will become fully vested and the assets
will be distributed to participants or their beneficiaries.
8
Dollar General Corporation
401(k) Savings and Retirement Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Accounting
The financial statements of the Plan are prepared under the
accrual method of accounting.
2. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
3. Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. The shares of
registered investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year end. The
participant loans receivable are valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade date
basis. Gains or losses on the sale of securities are based on actual cost.
Dividend income is recorded on the dividend payable date.
Interest income is recorded on the accrual basis.
4. Payment of Benefits
Benefits are recorded when paid.
5. Reclassifications
Certain amounts in the prior year financial statements have been
reclassified to conform with the current year presentation.
NOTE C - TAX STATUS
The Internal Revenue Service has determined and informed the
company by a letter dated October 6, 1999, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue Code
("IRC"). The Plan has been
9
Dollar General Corporation
401(k) Savings and Retirement Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
amended since receiving the determination letter, and will be requesting a new
determination letter prior to December 31, 2001.
NOTE D - INVESTMENTS
The Plan's investments are held by a trust fund. Investments
which represent 5% or more of the Plan's net assets available for plan benefits
are as follows:
December 31,
Identity of
Party Involved Description of Assets 2000 1999
-------------- --------------------- ---- ----
Dollar General Corporation Dollar General Corporation
Stock Fund
$ 33,791,218* $30,666,749*
The American Funds Group The Income Fund of America 11,944,395 10,427,701
The American Funds Group Washington Mutual Investors 6,238,895 5,192,125
Fund
--------------------------
* A portion is not participant-directed (see Note A-2)
NOTE E - NONPARTICIPANT-DIRECTED INVESTMENTS
A portion of the investment in the Dollar General Corporation
Stock Fund is not participant-directed (see Note A-2). Information about the net
assets and the significant components of the changes in net assets relating to
the Dollar General Corporation Stock Fund is as follows:
December 31,
1999 2000
---- ----
Net assets:
Dollar General Corporation Stock Fund $ 33,791,218 $ 30,666,749
10
Dollar General Corporation
401(k) Savings and Retirement Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 2000 and 1999
Year ended
December 31, 2000
-----------------
Changes in Net Assets:
Contributions $ 5,559,722
Net appreciation 1,254,840
Benefits paid to participants (3,466,540)
Administrative expenses (26,392)
Transfers to participant directed investments (197,161)
------------------
$ $3,124,469
==================
NOTE F - EXEMPT PARTY-IN-INTEREST TRANSACTIONS
Capital Bank & Trust, the Plan's trustee, serves as the
depository for Plan assets invested in The American Funds Group listing of
mutual funds. Transactions with these funds qualify as party-in-interest
transactions. Dollar General Corporation is the sponsor of the Plan.
Transactions in the Dollar General Corporation Stock Fund qualify as
party-in-interest transactions.
11
Dollar General Corporation
401(k) Savings and Retirement Plan
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
December 31, 2000
(a) (b) (c) (d) (e)
Description of Investment including
Identity of Issue, Borrower, Maturity Date, Rate of Interest, Current
Lessor, or Similar Party Collateral, Par or Maturity Value Cost Value
----- ----------------------------- ------------------------------------ ---- -----
* Dollar General Corporation 2,736,131 units $ 33,792,786 $ 33,791,218
Stock Fund
* The American Funds Group 749,335 units ** 11,944,395
The Income Fund of America
* The American Funds Group 214,912 units ** 6,238,895
Washington Mutual Investors Fund
* The American Funds Group 129,332 units ** 3,110,429
New Perspective Fund
* The American Funds Group 2,792,295 units ** 2,792,295
The Cash Management Trust of America
* The American Funds Group 180,368 units ** 2,306,904
The Bond Fund of America
* The American Funds Group 93,363 units ** 2,593,616
SMALLCAP World Fund
* The American Funds Group 29,095 units ** 787,897
The Growth Fund of America
* The American Funds Group 14,381 units ** 318,407
The New Economy Fund
* Participant notes receivable Interest rates ranging from ** 1,481,272
7.75% to 8.5% and maturity dates
ranging from 2001 to 2005
Related estate limited partnerships:
* Interchange City Associates, Ltd. 15.5 units ** 230,872
* Liquidity Fund Tax Exempt 15 units ** 8,691
* North Creek Associates 400 units ** 142,400
* Realty FD 85-1 200 units ** 2,000
------------ --------------
383,963
$ 33,792,786 $ 65,749,291
============ ==============
* Party-in-interest
** Cost omitted for participant directed investments
12
Dollar General Corporation
401(k) Savings and Retirement Plan
SCHEDULE OF REPORTABLE TRANSACTIONS
December 31, 2000
(h) Current value
(f) Expense of asset on (i) Net
(a) Identity of (b) Description (c) Purchase (d) Selling (e) Lease insured with (g) Cost of transaction gain or
party involved of asset price price rental transaction asset date (loss)
-------------- -------- ----- ----- ------ ----------- ----- ---- ------
Category (iii) - Series of transactions in excess of 5% of Plan assets:
* Dollar General Stock Fund $ 6,510,254 $ -- $ -- $ -- $ 6,510,254 $ 6,510,254 $ --
Corporation
$ -- $ 17,737,275 -- $ -- $ 17,739,812 $ 17,737,275 $ (2,537)
*Party-in-interest
There were no category (i), (ii) or (iv) reportable transactions during the Plan
year ended December 31, 2000.
13
The following is a complete listing of Exhibits filed or
incorporated by reference as part of this annual report:
EXHIBITS
Exhibit Description
------- -----------
23 Consent of Independent Auditors
14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Administrator of the Dollar General Corporation 401(k) Savings and
Retirement Plan has duly caused this Annual Report to be signed on its behalf by
the undersigned hereunto duly authorized.
DOLLAR GENERAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Date: December 20, 2001
By: /s/ Melissa Buffington
--------------------------------------
Name: Melissa Buffington
Title: Chief Administrative Officer
15