NNUAL AND 2016 PROXY STATEMENT PROXY AND 2016 2015 A REPORT

Dollar General Corporation • 2015 Annual Report and 2016 Proxy Statement 615) 855-4000 (615) 100 Mission Ridge 100 Mission www.dollargeneral.com Goodlettsville, Tennessee 37072 Tennessee Goodlettsville, NET SALES (IN BILLIONS) ANNUAL MEETING Dollar General Corporation’s annual meeting of share- $20.4 $18.9 holders is scheduled for 9:00 a.m. Central Time on $17.5 Wednesday May 25, 2016, at: $16.0 $14.8 Goodlettsville City Hall Auditorium 12,483 105 South Main Street, Goodlettsville, TN 37072 TOTAL STORES | TOTAL STATES: 43 Shareholders of record as of March 17, 2016 are entitled as of January 29, 2016 to vote at the meeting. 2011 2012 2013 2014 2015

NYSE: DG 16 ENDING STORE COUNT The common stock of Dollar General Corporation is 300 14 12,483 traded on the New York Stock Exchange under the trading 5 66 11,789 symbol “DG.” The number of shareholders of record as of

11,132 24 126 336 March 17, 2016 was 1,879. 22 353 10,506 3 9,937 188 555 28 STOCK PERFORMANCE GRAPH 97 24 87 The graph below shows a comparison of Dollar General’s 658 451 164 7 428 41 cumulative total shareholder return on common stock 31 198 113 334 210 436 with the cumulative total returns of the S&P 500 index 456 2011 2012 2013 2014 2015 and the S&P Retailing index. The graph tracks the per- 666 644 formance of a $100 investment in Dollar General com- 89 389 80 362 457 mon stock and in each index (with the reinvestment of SAME-STORE SALES GROWTH all dividends) from January 28, 2011 to January 29, 2016. 411 654 708 6.0% 1,296 493 4.7% COMPARISON OF

STORES 3.3% CUMULATIVE TOTAL RETURN 733 2.8% 2.8% DISTRIBUTION CENTER $300

$250 2011 2012 2013 2014 2015

$200 ABOUT DOLLAR GENERAL CUMULATIVE CASH FROM $150 OPERATIONS (IN MILLIONS) Dollar General Corporation has been delivering value to in the United States. In addition to high quality private shoppers for over 75 years. Dollar General helps shoppers brands, Dollar General sells products from America’s $6,087 $100 Save time. Save money. Every day!® by o ering products most-trusted manufacturers such as Procter & Gamble, $4,709 that are frequently used and replenished, such as food, Kimberly-Clark, Unilever, Kellogg’s, General Mills, Nabisco, 1/28/11 2/3/12 2/1/13 1/31/141/30/15 1/29/16 snacks, health and beauty aids, cleaning supplies, clothing Hanes, PepsiCo and Coca-Cola. $3,394 Dollar General Corporation S&P 500 Index S&P Retailing Index for the family, housewares and seasonal items at low $2,181 everyday prices in convenient neighborhood locations. Learn more about Dollar General $1,050 With 12,483 stores in 43 states as of January 29, 2016, and shop online at: 1/28/11 2/3/12 2/1/13 1/31/14 1/30/15 1/29/16 Dollar General $100 $147.68 $162.96 $198.31 $236.13 $266.71 Dollar General is among the largest discount retailers www.dollargeneral.com S&P 500 Index $100 $104.22 $121.71 $147.89 $168.93 $167.81 Cautionary Language Regarding Forward-Looking Statements: All forward-looking information in this report should be read with, and is 2011 2012 2013 2014 2015 qualifi ed in its entirety by, the Cautionary Disclosure Regarding Forward-Looking Statements and the Risk Factors disclosures set forth in the S&P Retailing Index $100 $115.66 $149.35 $189.57 $227.53 $266.59 Introduction and in Item 1A, respectively, of the Form 10-K included elsewhere in this report. Fiscal 2011 includes 53 weeks, while all other years The information contained on or connected to our Internet websites is not incorporated by reference into this report and should not be considered presented contain 52 weeks. Sales in the 2011 53rd The stock price performance included in this graph is not part of this or any other report that we fi le with or furnish to the SEC. week were $289 million. necessarily indicative of future stock price performance. TO OUR FELLOW SHAREHOLDERS, CUSTOMERS & EMPLOYEES

This has been a strong year at Dollar General. Despite improve adult and youth literacy, and with the support many changes within the retail landscape throughout of our stores and our customers, we also raised funds 2015, our business continued to drive profitable sales for St. Jude Children’s Hospital, Autism Speaks and the growth, meet the needs of our customers and create American Red Cross. long-term shareholder value. I am excited and honored to have been named chief executive o„cer of Dollar I have a clear vision for the future of Dollar General General in June of last year. Our company has a unique to strengthen our business and continue on a path of culture of Serving Others, a rich history and a very sustainable, profitable growth. We will focus on four bright future. Our values and our mission of service are key priorities: at the core of our success. Our business strategies, how we utilize technology and how we serve our customers 1. Driving profitable sales growth. To drive profitable will continue to evolve as we leverage our competitive sales growth, we will deliver on our brand promise advantages. Within the small-box discount retail sector, of everyday low prices and will continue to focus we have an opportunity to strengthen our leadership on improving our on-shelf availability and customer position and grow our market share. experience. To a greater degree than we have in past years, our sales-driving category initiatives 2015 was another record year for Dollar General as will be implemented across not just new stores, our associates served millions of customers resulting relocations and remodels, but also to our mature in over 1.8 billion transactions. We made targeted store base. We have ongoing opportunities for investments in store labor to improve our in-stock gross margin expansion through improvements in position and implemented merchandising initiatives to inventory shrink reduction, global sourcing, private improve category management and enhance the overall brands penetration, distribution and transportation shopping experience. e„ciencies and non-consumable sales.

Highlights of 2015 Compared to 2014 2. Capturing growth opportunities. Given our strong new store returns, our plan is to open 900 new stores • Net sales increased by 7.7 percent to $20.4 billion or in 2016. We are accelerating our square footage $226 per square foot. growth with a new store format for all new stores, relocations and remodels. The updated format will • Same-stores sales grew 2.8 percent over 2014, allow for an expansion in products we know our marking our 26th consecutive year of same-store customer wants and will provide a more customer- sales growth. friendly layout including a faster checkout.

• We reported net income of $1.17 billion or $3.95 per 3. Enhancing our position as a low-cost operator. We diluted share, an increase of 13 percent. have undertaken zero-based budgeting to provide additional flexibility, reinvest savings and drive • Cash flow from operations was $1.4 billion, an growth. We are also focused on work elimination to increase of $63 million. keep the business simple.

The refinement of our merchandise o™erings and 4. Investing in our people as a competitive advantage. increased utilization of store square footage helped drive Our strategy is focused on talent selection and increases in both customer tra„c and average transaction employee development through great onboarding, amount for the 32nd consecutive quarter over prior year training and open communication. We are committed quarter. We invested in new store growth, opening 730 to helping our employees develop their talents and new stores in addition to completing our 13th distribution gain additional skills and experiences to grow their center in San Antonio, Texas. Our ongoing commitment careers at Dollar General. Their success is key to our to increasing long-term shareholder value is evidenced success as a company. by the $1.6 billion return of cash to our shareholders in 2015 through the repurchase of nearly 18 million shares of At Dollar General, we have a business model that is our common stock and the initiation of a regular quarterly proven and resilient. As a team, I am confident we are cash dividend. well-positioned to drive long-term shareholder value as we look to capture growth opportunities and invest in the As CEO, I have had the opportunity to travel throughout future. I thank you for your continued support. the United States visiting both our consumers and our store employees. It is clear to me that our culture Respectfully, of Serving Others is very meaningful to the local communities and the individuals we employ and serve. In 2015, we partnered with the Dollar General Literacy Foundation, the Dollar General Employee Assistance Foundation, our customers and our vendors to donate over $17.3 million to charitable organizations and Todd J. Vasos individuals in need. Nearly 80 percent of that giving was CHIEF EXECUTIVE OFFICER directed to nonprofit organizations and schools to help April 8, 2016

Proxy Statement & Meeting Notice

Dollar General Corporation 100 Mission Ridge 8APR201014561687 Goodlettsville, Tennessee 37072

Dear Fellow Shareholder:

The 2016 Annual Meeting of Shareholders of Dollar General Corporation will be held on Wednesday, May 25, 2016, at 9:00 a.m., Central Time, at Goodlettsville City Hall Auditorium, 105 South Main Street, Goodlettsville, Tennessee. All shareholders of record at the close of business on March 17, 2016 are invited to attend the annual meeting. For security reasons, however, to gain admission to the meeting you may be required to present photo identification and comply with other security measures.

At this year’s meeting, you will have an opportunity to vote on the matters described in our accompanying Notice of Annual Meeting of Shareholders and Proxy Statement. Our 2015 Annual Report and our Annual Report on Form 10-K for the fiscal year ended January 29, 2016 also accompany this letter.

Your interest in Dollar General and your vote are very important to us. We encourage you to read the Proxy Statement and vote your proxy as soon as possible so your vote can be represented at the annual meeting. You may vote your proxy via the Internet or telephone, or if you received a paper copy of the proxy materials by mail, you may vote by mail by completing and returning a proxy card.

On behalf of the Board of Directors, thank you for your continued support of Dollar General.

Sincerely,

29MAR201618415070

Michael M. Calbert Chairman of the Board

April 8, 2016

Dollar General Corporation 100 Mission Ridge 8APR201014561687 Goodlettsville, Tennessee 37072

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

DATE: Wednesday, May 25, 2016

TIME: 9:00 a.m., Central Time

PLACE: Goodlettsville City Hall Auditorium 105 South Main Street Goodlettsville, Tennessee

ITEMS OF BUSINESS: 1) To elect as directors the 8 nominees listed in the proxy statement 2) To ratify the appointment of the independent registered public accounting firm for fiscal 2016 3) To transact any other business that may properly come before the annual meeting and any adjournments of that meeting

WHO MAY VOTE: Shareholders of record at the close of business on March 17, 2016

By Order of the Board of Directors,

6APR201023125201 Goodlettsville, Tennessee Christine L. Connolly April 8, 2016 Corporate Secretary

Please vote your proxy as soon as possible even if you expect to attend the annual meeting in person. You may vote your proxy via the Internet or by phone by following the instructions on the notice of internet availability or proxy card, or if you received a paper copy of these proxy materials by mail, you may vote by mail by completing and returning the enclosed proxy card in the enclosed reply envelope. No postage is necessary if the proxy is mailed within the United States. You may revoke your proxy by following the instructions listed on page 3 of the proxy statement.

Proxy ...... 50 ...... 42 ...... 56 ...... 40 ...... 38 ...... 54 ...... 41 ...... 51 ...... 56 ...... 37 ...... 52 ...... 21 ...... 22 Proxy Statement for Proxy Statement TABLE OF CONTENTS TABLE ...... 50 ...... 33 ...... 5 ...... 34 2016 Annual Meeting of Shareholders 2016 Annual Meeting ...... 41 DOLLAR GENERAL CORPORATION GENERAL DOLLAR ...... 22 ...... 53 ...... 11 ...... 16 ...... 19 ...... 55 ...... 1 ...... 51 SHAREHOLDER MEETING TO BE HELD ON MAY 25, 2016 SHAREHOLDER MEETING TO BE HELD ON MAY ...... 2 ...... 57 This Proxy Statement, our 2015 Annual Report and a form of proxy card are available at This Proxy and a form of proxy card our 2015 Annual Report Statement, (‘‘SEC’’),As permitted by rules adopted by the Securities and Exchange Commission we are IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE MATERIALS OF PROXY NOTICE REGARDING AVAILABILITY IMPORTANT Compensation Discussion and Analysis Compensation Committee Report Summary Compensation Table 2015 in Fiscal Grants of Plan-Based Awards Year-End at 2015 Fiscal Outstanding Equity Awards 2015 During Fiscal Option Exercises and Stock Vested 2015 Benefits Fiscal Pension 2015 Fiscal Nonqualified Deferred Compensation Control or Change in upon Termination Payments Potential and Insider Participation Compensation Committee Interlocks Compensation Risk Considerations Owners Security Ownership of Certain Beneficial Security Ownership of Officers and Directors General Information Matters Voting 1: Election of Directors Proposal Corporate Governance Director Compensation Director Independence with Management and Others Transactions Executive Compensation Security Ownership Report Committee Audit of Appointment of Auditors 2: Ratification Proposal to Auditors Paid Fees Compliance Reporting Section 16(a) Beneficial Ownership for 2017 Annual Meeting Shareholder Proposals Appendix A the proxy or proxy card to access your Notice of Internet Availability will need You www.proxyvote.com. materials. This means that some furnishing our proxy materials over the Internet to some of our shareholders. these shareholders will receive shareholders will not receive paper copies of these documents. Instead, containing instructions on how to access the proxy materials over only a Notice of Internet Availability also contains instructions on how each of those the Internet. The Notice of Internet Availability Statement, our 2015 the Proxy shareholders can request a paper copy of our proxy materials, including will who do not receive a Notice of Internet Availability and a proxy card. Shareholders Annual Report requested delivery of receive a paper copy of the proxy materials by mail, unless they have previously and would like to Availability proxy materials electronically. If you received only the Notice of Internet on how you can request receive a paper copy of the proxy materials, the notice contains instructions copies of these documents.

Proxy 1 by offering products that are frequently used and This document is the Proxy Statement of Dollar General Corporation for the Annual Meeting of Dollar General Corporation for Statement the Proxy This document is otherwise noted or ‘‘us’’ or ‘‘Dollar General.’’ Unless refer to our company as ‘‘we,’’ We another person, called a ‘‘proxy,’’ to vote your stock. The A proxy is your legal designation of are soliciting your proxy on behalf of our Board of Our directors, officers and employees and our invited guests may attend the meeting. If your Only shareholders, their proxy holders where we will hold the annual meeting, are posted on Directions to Goodlettsville City Hall, are invited to visit the ‘‘Conference Calls and Investor Events’’ section of the You Yes. Dollar General helps Dollar General has been delivering value to shoppers for over 75 years. Stock Exchange (‘‘NYSE’’) under the symbol ‘‘DG.’’ Our stock is traded on the New York of Shareholders to be held on Wednesday, May 25, 2016. We will begin mailing printed copies of this will begin mailing printed May 25, 2016. We be held on Wednesday, of Shareholders to are April 8, 2016. We to shareholders on or about of Internet Availability document or the Notice meeting. upon certain matters at the annual to solicit your proxy to vote providing this document ending or and ‘‘2012’’ refer to our fiscal years ‘‘2016,’’ ‘‘2015,’’ ‘‘2014,’’ ‘‘2013,’’ required by context, 1, 2013, January 31, 2014, and February January 29, 2016, January 30, 2015, 3, 2017, ended February respectively. it, and who is paying for the cost to solicit it? who is asking for What is a proxy, as your proxy is also called a proxy or a proxy card. document that designates someone will not additionally compensate these solicitation expenses. We Directors. Dollar General will pay all reimburse them for any out-of-pocket expenses they incur. We persons to solicit your proxy but will nominees for their expenses in sending proxy materials to beneficial also may reimburse custodians and owners. Who may attend the annual meeting? a broker, trust, bank or other nominee, you will need to bring a shares are registered in the name of or your most recent brokerage account statement that proxy or a letter from that record holder we also may security reasons, as of March 17, 2016. For confirms your ownership of those shares require photo identification for admission. meeting? Where can I find directions to the annual of our website located at www.dollargeneral.com. the ‘‘Investor Information’’ section the annual meeting be webcast? Will at 9:00 a.m., Central ‘‘Investor Information’’ section of our website located at www.dollargeneral.com on May 25, 2016 to access the live webcast of the annual meeting. An archived copy of the Time, on our website, however, webcast will be available on our website for at least 60 days. The information proxy statement. is not incorporated by reference into, and does not form a part of, this What is Dollar General Corporation and where is it located? shoppers Save time. Save money. Every day! clothing for the family, replenished, such as food, snacks, health and beauty aids, cleaning supplies, locations. Dollar housewares and seasonal items at low everyday prices in convenient neighborhood 26, 2016. Our principal executive offices are General operates 12,575 stores in 43 states as of February number is 615-855-4000. 37072. Our telephone located at 100 Mission Ridge, Goodlettsville, Tennessee Where is Dollar General common stock traded? What is this document? GENERAL INFORMATION GENERAL Proxy vote theshares. to themeetingalegalproxyfromyourbroker,banker, trusteeorothernomineegivingyoutherightto and instructionsforvotingyourshares.You mayvoteinpersonatthemeetingifyouobtainandbring proxy card,asapplicable.Alternatively,youmayvote inpersonatthemeeting. card intheenclosedenvelope.Pleaserefertoinstructions ontheNoticeofInternetAvailability or if youreceivedprintedproxymaterials,bymarking,signing, datingandreturningtheprintedproxy How doIvote? held inthenameofabrokeragefirm,bank,trustorothernomineeascustodian. Wells Fargo ShareownerServices,ourtransferagent.You area‘‘streetname’’holderifyourshares What isthedifferencebetweena‘‘shareholderofrecord’’and‘‘streetname’’holder? outstanding andentitledtovote.Eachshareisonevoteoneachmatter. March 17,2016.Asofthatdate,therewere286,669,916sharesDollarGeneralcommonstock Who isentitledtovoteattheannualmeeting? to voteastheythinkbest,includingadjournthemeeting. notice hasbeengiventoshareholders.Ifotherbusinessisproperlyraised,yourproxieshaveauthority our governingdocuments,noothernon-proceduralbusinessmayberaisedatthemeetingunlessproper May othermattersberaisedattheannualmeeting? What amIvotingon? present. Secretary ofthemeetingshallhavepowertoadjournfromtimeuntilaquorumis isnotpresentattheannual meeting? What ifaquorum meeting. shares ofourcommonstockoutstandingonMarch17,2016,mustexisttoconductanybusinessatthe How manyvotesmustbepresenttoholdtheannualmeeting? VOTING MATTERS If youareastreetnameholder,yourbroker,bank,or othernomineewillprovidematerials If youareashareholderofrecord,mayvoteyour proxyoverthetelephoneorInternetor, You area‘‘shareholderofrecord’’ifyoursharesregistereddirectlyinnamewith You mayvoteifyouownedsharesofDollarGeneralcommonstockattheclosebusinesson We areunawareofothermatterstobeacteduponatthemeeting.UnderTennessee lawand theratificationofappointment ofourindependentregisteredpublicaccountingfirm • theelectionof8directors;and • You willbeaskedtovoteon: If aquorumisnotpresentatthemeeting,anyofficerentitledtopresideoractas A quorum,consistingofthepresenceinpersonorbyproxyholdersamajority (the ‘‘independentauditor’’)for2016. 2 Proxy 3 annual meeting in accordance with the instructions included in the proxy card; annual meeting in accordance with of the proxy; revocation dated later than the date time, on May 24, 2016; or You will receive multiple Notices of Internet Availability or proxy cards if you hold shares in cards if you or proxy Availability Notices of Internet receive multiple will You a proxy as you direct or, if you return on the proxy card will vote your The persons named given pursuant to this solicitation by: A shareholder of record may revoke a proxy Yes. • the a valid, later-dated proxy card and submitting it so that it is received before signing • notice of the annual meeting, submitting to our Corporate Secretary a written at or before • Eastern a later-dated vote by telephone or Internet no later than 11:59 p.m., submitting • the annual meeting and voting in person. attending will not revoke your proxy. attendance at the annual meeting, by itself, Your proxy given pursuant to this solicitation by following the A street name holder may revoke a a nominee must receive the affirmative vote of a majority be elected at the annual meeting, To at the annual An incumbent director who does not receive the required vote for election What if I receive more than one Notice of Internet Availability or proxy card? Availability one Notice of Internet receive more than What if I Street name etc.) or in multiple accounts. joint tenancy, trusts, custodial accounts, different ways (e.g., voting information, along or proxy card or other the Notice of Internet Availability holders will receive of the shares represented by each Notice from their brokers. Please vote with voting instructions, are voted. receive to ensure that all your shares or proxy card you Internet Availability be voted? How will my proxy how you voting procedures but do not specify or complete the Internet or telephone signed proxy card of Ernst & ratification nominated and ‘‘FOR’’ all directors shares: ‘‘FOR’’ want to vote your auditor for 2016. LLP as our independent Young my proxy? Can I change my mind and revoke or other nominee who holds his or her shares. instructions of the bank, broker, trustee directors? How many votes are needed to elect to vote at the meeting. Under our Amended and Restated of votes cast by holders of shares entitled number of votes cast in favor Charter, the ‘‘affirmative vote of a majority of votes cast’’ means that the may vote in her election. You of a nominee’s election exceeds the number of votes cast against his or from voting your shares. favor of or against the election of each nominee, or you may elect to abstain What happens if a director fails to receive the required vote for election? consideration pursuant to our meeting must promptly tender a resignation as a director for the Board’s Guidelines. Each Board-approved director resignation policy outlined in our Corporate Governance effective upon the Board’s director standing for re-election at the annual meeting has agreed to resign, vote. If the Board rejects the acceptance of such resignation, if he or she does not receive a majority shareholders’ meeting and offered resignation, the director will continue to serve until the next annual or removal in accordance with until his or her successor is duly elected or his or her earlier resignation If the Board accepts the offered resignation, the Board, Bylaws (‘‘Bylaws’’). our Amended and Restated of the Board. in its sole discretion, may fill the resulting vacancy or decrease the size Proxy proxy cardorotherwisecommunicatesthevotetomanagement. facilitate asuccessfulproxysolicitation;or(6)whenshareholdermakeswrittencommentonthe confidential votingpolicy;(4)toallowforthetabulationofvotesandcertificationvote;(5) contested proxysolicitation,iftheotherpartysolicitingproxiesdoesnotagreetocomplywith legal requirements;(2)inadisputeregardingauthenticityofproxiesandballots;(3)thecase disclosed eitherwithinDollarGeneralortothirdparties,except(1)asnecessarymeetapplicable handled inamannerthatisintendedtoprotectyourvotingprivacy.Your votewillnotbeintentionally Will myvotebeconfidential? particular proposal. either infavoroforagainstaparticularproposalandwillhavenoeffectontheoutcome to voteforpurposesofdeterminingwhetheraquorumispresentbutwillnotbecountedasvotescast How willabstentionsandbrokernon-votesbetreated? declines toexercisetheauthorityvotesharesinitsdiscretion. because thebrokerhasnotreceivedvotinginstructionsfrombeneficialownerandeitherlacksor appointment ofourindependentauditorisconsideredtobearoutinematter. items. Theelectionofdirectorsisconsideredtobeanon-routineitem,whiletheratification exercise discretionaryvotingpoweroveryoursharesfor‘‘routine’’itemsbutnot‘‘non-routine’’ vote thosesharespursuanttoyourinstructions.Ifyoudonotprovideinstructions,brokermay What arebrokernon-votes? shares. meeting, youmayvoteinfavoroforagainsttheproposal,electtoabstainfromvotingyour the votescastinfavorofsuchproposalexceedagainstit. How manyvotesareneededtoapproveothermatters? Proxy instructions,ballotsandvotingtabulationsthatidentifyindividual shareholdersare Abstentions andbrokernon-votes,ifany,willbetreatedassharesthatarepresententitled ‘‘Broker non-votes’’occurwhensharesheldofrecordbyabrokerarenotvotedonmatter Although yourbrokeristherecordholderofanysharesthatyouholdinstreetname,itmust With respecttothisproposal,andanyothermatterproperlybroughtbeforetheannual The proposaltoratifytheappointmentofourindependentauditorfor2016willbeapprovedif 4 Proxy 2009 2007 2012 2012 2014 2009 2010 2015 Director Since 70 53 57 62 54 50 69 54 Age 5 Warren F. Bryant F. Warren Name Michael M. Calbert Sandra B. Cochran D. Fili-Krushel Patricia Price A. Paula C. Rhodes, III William David B. Rickard J. Vasos Todd Our Board of Directors must consist of 1 to 15 directors, with the exact number, currently must consist of 1 to 15 directors, Our Board of Directors 8 current directors. If elected, each the Board of Directors consist of the The nominees for and Chief Executive Officer of Longs Drug Stores Bryant served as the President Mr. Board since January 30, 2016. He joined Calbert has served as our Chairman of the Mr. and Chief Executive Officer of Cracker Ms. Cochran has served as a director and as President fixed at 8, set by the Board. All directors are elected annually by our shareholders. Board. All directors are elected fixed at 8, set by the this year? Who are the nominees her successor of shareholders and until his or office until the 2017 annual meeting nominee would hold ages at the or removal. These nominees, their subject to any earlier resignation is elected and qualified, calendar year in which they first became a director are listed in date of this proxy statement and the the table below. nominees? What are the backgrounds of this year’s Coast and in Hawaii, from 2002 through 2008 and as on the West Corporation, a retail drugstore chain to joining Longs through his retirement in 2008. Prior Drug its Chairman of the Board from 2003 a retail grocery chain, from 1999 to of The Kroger Co., President Stores, he served as a Senior Vice Depot, Inc. and Loblaw2002. Mr. Bryant is a director of Office Companies Limited of Canada and from 2004 to 2013. served as a director of OfficeMax Incorporated in January 2000 and was directly involved with several KKR portfolio (‘‘KKR’’) KKR & Co. L.P. industry team within KKR’s companies until his retirement in January 2014. Mr. Calbert led the Retail Equity platform prior to his retirement and served as a consultant to KKR from his retirement Private Markets beginning in 1994 and served as the Chief Food until June 2015. Mr. Calbert joined Randall’s also previously worked as Financial Officer from 1997 until it was sold in September 1999. Mr. Calbert from 1985 to 1994, a certified public accountant and consultant with Arthur Andersen Worldwide served as our Chairman of where his primary focus was the retail and consumer industry. He previously from March 2013 until his the Board from July 2007 until December 2008 and as our lead director re-appointment as our Chairman of the Board in January 2016. Barrel in April 2009 as Barrel Old Country Store, Inc. since September 2011. She joined Cracker and Chief Operating and Chief Financial Officer, and was named President President Executive Vice at book retailer Officer in November 2010. She was previously Chief Executive Officer 2004 to April 2009. She also served as that company’s President Inc. from February Books-A-Million, 1999) and Vice 2004), Chief Financial Officer (September 1993—August 1999—February (August in 1992—September 1993). Ms. Cochran has over 20 years of experience of Finance (August President the retail industry. Ms. Cochran has served as a director of Lowe’s Companies, Inc. since January 2016. What is the structure of Directors? of the Board PROPOSAL 1: PROPOSAL OF DIRECTORS ELECTION Proxy Incorporated. Vintners LaSalle Americas.Mr.RickardisadirectorofHarrisCorporationandJones Lang 1997 toAugust 1999.Previously, hewasExecutiveVice President ofInternationalDistillersand Senior Vice President andChief FinancialOfficerofRJRNabiscoHoldingsCorporationfromMarch September 1999untilhisretirementinDecember2009. Prior tojoiningCVS,Mr.Rickardwasthe pharmacy chainandproviderofhealthcareservices pharmacybenefitsmanagement,from Administrative OfficerofCVSHealthCorporation(formerlyCaremarkCorporation),aretail Young LLP. Analysis andSupportfrom1997to1999.Prior to1994,Mr.Rhodes wasamanagerwithErnst& Senior Vice President—Finance andVice President—Finance in 1999,andVice President—Operations he servedinvariouscapacitieswithAutoZone since1994,includingVice President—Stores in2000, 2002, andpriortheretohadbeenSeniorVice President—Supply Chainsince2001.Prior tothattime, Prior to2004,hehadbeenSeniorVice President—Supply ChainandInformationTechnology since Chief ExecutiveOfficer,Mr.RhodeswasVice President—Store OperationsandCommercial. Executive OfficerandasadirectorofAutoZone since2005.Prior tohisappointmentasPresident and automotive replacementpartsandaccessories,inJune2007.HehasservedasPresident andChief Figi’s brands)fromMarch2011untilitwassoldinJune2012. Bryant,Catherine’s,Fashionserved asadirectorofCharmingShoppes,Inc.(Lane Bug,Caciqueand as adirectorofAccenture plcsinceMay2014andWestern DigitalCorporationsinceJuly2014and certified publicaccountant,shebeganhercareeratArthurAndersen&Co.Ms.Price hasalsoserved positions intheU.S.andU.K.financialservicesconsumerpackagedgoodsindustries.A JPMorgan Chase(fromAugust 2002untilSeptember2005),andheldseveralotherseniormanagement career, Ms.Price servedastheChiefFinancialOfficerforInstitutional Trust Servicesdivisionof Corporation (formerlyCVSCaremarkCorporation)fromJuly2006untilAugust 2008.Earlierinher she wastheSeniorVice President, ControllerandChiefAccounting OfficeratCVSHealth estate development,storeformatandconstruction,informationtechnology.BeforejoiningAhold, service, Ms.Price wasresponsibleforfinance,accountingandshared services,strategicplanning,real under theStop&Shop,GiantandMartin’snamesaswellPeapod onlinegrocerydelivery Ahold USA fromMay2009untilJanuary2014. At Ahold,whichoperatesmorethan700supermarkets Management UnitsinceJuly2014.ShewasExecutiveVice President andChiefFinancialOfficerof positions. with HomeBoxOffice.BeforejoiningHBO,Ms.Fili-KrushelworkedforABCSportsinvarious had beenwithLifetimeTelevision since1988.Prior toLifetime,Ms.Fili-Krushelheldseveralpositions Network, andfrom1993to1998sheservedasPresident ofABCDaytime.BeforejoiningABC,she April 2000.From July1998toApril2000,Ms.Fili-KrushelwasPresident oftheABCTelevision Warner inJuly2001,Ms.Fili-KrushelhadbeenChiefExecutiveOfficerofWebMD HealthCorp.since employee developmentandgrowth,compensationbenefits,security.BeforejoiningTime oversight ofphilanthropy,corporatesocialresponsibility,humanresources,worldwiderecruitment, Administration atTime Warner Inc.(July2001—December2010)whereherresponsibilitiesincluded human resourcesandlegal.Prior toNBCUniversal,Ms.Fili-KrushelwasExecutiveVice President of portfolio offunctionsreportingtoher,includingoperationsandtechnicalservices,businessstrategy, previously servedasExecutiveVice President ofNBCUniversal(January2011—July2012)withabroad of NBCNews,CNBC,MSNBCandtheWeather Channel,fromJuly2012untilApril2015.She served asChairmanofNBCUniversalNewsGroup,adivisionMedia,LLC,composed a strategistandkeyadvisortotheCEOofNBCUniversalfromApril2015November2015.She Mr. RickardservedastheExecutiveVice President, ChiefFinancialOfficerand Mr. RhodeswaselectedChairmanofAutoZone, Inc.,aspecialtyretaileranddistributorof atHarvardBusiness SchoolintheAccountingMs. PricehasbeenSeniorLecturer and Ms. Fili-Krushel istheformerExecutiveVice President forNBCUniversalwheresheservedas 6 Proxy 7 has served as Chief Executive Officer and a member of our Board since June 3, 2015. since June 3, member of our Board Officer and a as Chief Executive has served Vasos Mr. of currently serve on our Board as directors at the annual meeting All nominees for election and our Corporate Governance Guidelines require the The Nominating Committee’s charter the Board or a duly authorized committee requires Vasos Our employment agreement with Mr. above, the Nominating Committee is employment agreement discussed Subject to Mr. Vasos’s policy to endeavor to achieve a mix of Board members that represent a have a written We He joined Dollar General in December 2008 as Executive Vice President, Division President and Chief Division President President, as Executive Vice in December 2008 Dollar General He joined to Prior Officer in November 2013. He was promoted to Chief Operating Merchandising Officer. Longs served in executive positions with Stores Corporation Drug Mr. Vasos joining Dollar General, 2008 (February and Chief Operating Officer President Executive Vice for seven years, including (2001—2008), and Chief Merchandising Officer President 2008) and Senior Vice through November marketing, merchandising, procurement, for all pharmacy and front-end where he was responsible of and space allocation, and the operation store development, store layout supply chain, advertising, and Food leadership positions at Phar-Mor centers. He also previously served in three distribution Corporation. Drug Inc. and Eckerd identified and nominated? How are directors Board for election or re-election, as applicable, upon the Directors and were nominated by the and Governance Committee (the ‘‘Nominating Committee’’). The recommendation of the Nominating for identifying, evaluating and recommending director candidates, Nominating Committee is responsible the director slate for election at the annual meeting. while our Board is responsible for nominating candidates submitted by our shareholders in accordance with the Nominating Committee to consider ‘‘Can shareholders nominate directors?’’ below) and to apply the notice provisions of our Bylaws (see candidates as it applies to other director candidates. The same criteria to the evaluation of those a variety of other methods to identify potential director Nominating Committee also may use by our directors, management, or third-party search firms. candidates, such as recommendations as a member of our Board each year that he is slated for of the Board to nominate him to serve to do so could give rise to a claim for breach of contract and may re-election to the Board. Our failure under the employment agreement. termination by Mr. Vasos constitute good reason for employment are the minimum qualifications? How are nominees evaluated; what Board of Directors only those candidates that it believes are charged with recommending to the consistent with the criteria for selection of new directors adopted qualified to serve as Board members 76, unless the Board has from time to time by the Board and who have not achieved the age of is granted, it will be reviewed approved an exception to this limit on a case by case basis. If a waiver annually. implement this business. To diversity of background and experience in areas that are relevant to our individual qualifications in the policy, the Committee assesses diversity by evaluating each candidate’s also considers more traditional context of how that candidate would relate to the Board as a whole and of this policy by considering concepts of diversity. The Committee periodically assesses the effectiveness and by whether the Board as a whole represents such diverse experience and composition directors as appropriate. The recommending to the Board changes to the criteria for selection of new only if it believes the Committee recommends candidates, including those submitted by shareholders, Board and that the candidate is candidate’s knowledge, experience and expertise would strengthen the shareholders. committed to representing the long-term interests of all Dollar General Proxy provides additionalperspectivetoourBoardinunderstanding ourcustomerbase. understanding ofconsumerbehaviorbasedonherknowledge ofviewershippatternsandpreferences benefits, andlegalfunctionsatlargepubliccompanies inthemediaindustry.Inaddition,her responsibility, humanresources,recruitment,employee growthanddevelopment,compensation her extensiveexecutiveexperienceoverseeingthebusiness strategy,philanthropy,corporatesocial qualifies asanauditcommitteefinancialexpert. as vicepresident,corporatefinanceofSunTrust Securities,Inc.,andourBoardhasdeterminedthatshe significant financialexperience,havingservedasthechiefofficeroftwopubliccompaniesand consensus-building, strategicplanning,riskmanagementandbudgetingskills.Ms.Cochranalsohas and ourBoard.Inaddition,Ms.Cochran’sindustryexecutiveexperienceprovidesleadership, Books-A-Million. ThisexperienceallowshertoprovideadditionalsupportandperspectiveourCEO current andformerrolesatCrackerBarrelOldCountryStoreher retail companyandhis10yearsofpracticeasacertifiedpublicaccountant. financial andaccountingbackgroundevidencedbyhispriorexperienceasthechiefofficerofa strengthens hisknowledgeandexperiencewithintheretailindustry.Mr.Calbertalsohasasignificant at HomeGroupPlc.,ShoppersDrugMartCorporation,Toys ‘‘R’’ Us,Inc.andUSFoods, Inc.further structures, andmanagementteams.HisformerserviceontheboardofdirectorsAcademy, Ltd.,Pets managing companiesintheretailindustry,includingevaluatingbusinessstrategies,financialplansand Retail industryteam, Mr. Calberthasastrongbackgroundandextensiveexperienceinadvising familiar withcorporatefinanceandstrategicbusinessplanningactivities.AstheformerheadofKKR’s valuable executivemanagementskillsandtheabilitytoeffectivelyadviseourCEO. certain otherretailers,provideshimwithanextensiveunderstandingofourindustry,aswell at otherretailcompanies,togetherwithhiscurrentandformerexperienceasaboardmemberfor merchandising, operationsandfinance.Hissubstantialexperienceinleadershippolicy-makingroles directors ofDollarGeneral: business. TheBoardalsoconsideredthefollowingindeterminingthatnomineesshouldserveas Board’s skillneeds,andrepresentdiverseexperienceatpolicy-makinglevelsinareasrelevanttoour above. TheBoardhasdeterminedthatthenominees,asawhole,complementeachother,meet time totheeffectiveperformanceofdirectordutiesandpossessesminimumqualificationsidentified that eachnomineeshouldserveasadirectorofDollarGeneral? What particularexperience,qualifications,attributesorskillsledtheBoardofDirectorstoconclude management. cooperative approach,arecordofachievement,loyalty,andtheabilitytoconsultwithadvise following characteristics:integrityandaccountability,informedjudgment,financialliteracy,a devote anadequateamountoftimetotheeffectiveperformancedirectordutiesandpossess for continuedservice.Inaddition,theCommitteedeterminesthatallnomineesareinapositionto for re-election,theCommitteealsoassesseseachdirector’smeetingattendancerecordandsuitability as wellthecurrentBoard’sskillneedsanddiversity.With respecttoincumbentdirectorsconsidered Ms. Fili-Krushel’s backgroundincreasesthebreadthofexperienceour Boardasaresultof Ms. Cochranbringsover20yearsofretailexperiencetoDollarGeneralasaresulther Mr. Calberthasconsiderableexperienceinmanagingprivateequityportfoliocompaniesandis Mr. Bryanthasover40yearsofretailexperience,includingexperienceinmarketing, Our BoardofDirectorsbelievesthateachthenomineescandevoteanadequateamount The NominatingCommitteeassessesacandidate’sindependence,backgroundandexperience, 8 Proxy day and th day following the public th day prior to the date of such annual th 9 day prior to the first anniversary of the prior year’s th brings broad experience across finance, general management and strategy gained management finance, general experience across brings broad Ms. Price including extensive experience of experience in the retail industry, has over 20 years Rhodes Mr. positions for much of his 38 years in the Rickard held senior management and executive Mr. over seven years with Dollar General. His has extensive retail experience, including Vasos Mr. Committee’s recommendation, and after concluding that these upon the Nominating Acting can nominate directors by following the procedures outlined in our Bylaws. Shareholders Yes. day and not later than the close of business on the 90 th meeting. If the first public announcement of the annual meeting date is less than 100 days prior to the meeting. If the first public announcement of the annual meeting date is date of such annual meeting, the notice must be received by the 10 not later than the close of business on the 90 annual meeting. However, if the meeting is held more than 30 days before or more than 60 days after annual meeting. However, if the meeting is held more than 30 days before close of business on the such anniversary date, the notice must be received no earlier than the 120 announcement date. from her service in senior executive and management positions at major corporations across several at major corporations positions executive and management service in senior from her her retirement in 2014. before USA as Chief Financial Officer of Ahold industries, including former chief financial officer as a certified public accountant, numerous years of experience Ms. Price’s into with valuable experience and insight officer provide our Board and former chief accounting is an audit Board has determined that Ms. Price matters, and consequently, our accounting and finance of the a valuable perspective as a member expert. She also brings to our Board committee financial as a board member of several public Business School and from her service faculty at Harvard companies. strong areas. This background serves as a chain and finance, among other in operations, supply In addition, to our CEO and our Board. invaluable perspective and expertise foundation for offering provides officer of a public retail company a board chairman and chief executive his experience as planning and budgeting skills, as well as extensive leadership, consensus-building, strategic issues confronting the retail industry. Mr. Rhodes also has understanding of both short- and long-term a strong financial background. retail experience and a diverse retail industry background, including corporate world. He has significant of another retail company. He also has an extensive financial previous experience serving on the board served as the chief financial officer of two public companies, and accounting background, having our Board has determined that Mr. Rickard is an audit including a large retailer. As a result, Committee. elected him to serve as the Chairman of the Audit committee financial expert and has the retail industry also brings expertise and perspective to our Mr. Rickard’s financial experience within planning and budgeting. Board’s discussions regarding strategic operations, marketing, advertising, procurement, supply chain, experience overseeing the merchandising, space allocation functions of other retail companies bolsters store development, store layout and service in of our business. In addition, Mr. Vasos’s thorough understanding of all key areas Mr. Vasos’s of other retail companies has provided him with the necessary leadership and policy-making positions and oversee the direction of Dollar General and with the leadership skills to effectively guide lead our management team. consensus-building skills required to and skills, our Board has nominees possess the appropriate experience, qualifications, attributes at our annual meeting. unanimously nominated these individuals to be elected by our shareholders Can shareholders nominate directors? Secretary at 100 Mission In short, the shareholder must deliver a written notice to our Corporate business on the 120 Ridge, Goodlettsville, TN 37072 for receipt no earlier than the close of Proxy nominees. What doestheBoardofDirectorsrecommend? nominees andanyofourexecutiveofficers. Are thereanyfamilialrelationshipsbetweenofthenominees? are authorizedtovoteyourproxyforasubstitutedesignatedbyourBoardofDirectors. What ifanomineeisunwillingorunabletoserve? shareholder nomineeshavebeenproposedforthisyear’sannualmeeting. process bywhichshareholdersmaynominatedirectors,astheinformationaboveisasummaryonly.No section ofourwebsitelocatedatwww.dollargeneral.com,formoredetailedinformationregardingthe proposing thenomineeandaboutnominee,whichgenerallyincludes: Our BoardunanimouslyrecommendsthatyouvoteFOR theelectionofeachdirector There arenofamilialrelationshipsbetweenanyofthenomineesor That isnotexpectedtooccur.Ifitdoes,thepersonsdesignatedasproxiesonproxycard You shouldconsultourBylaws,postedonthe‘‘InvestorInformation—CorporateGovernance’’ adescriptionofallarrangements orunderstandingsbetweentheproposingshareholderand • adescriptionofallcompensatory arrangementsorunderstandingsbetweentheproposing • anyotherinterestsoftheproposingshareholderorshareholder’simmediate • thenameandaddressofshareholderproposingnomineeastheyappearonour • anyotherinformationrelatingtothenomineethatisrequiredbedisclosedinproxy • theclassandnumberofsharesDollarGeneralcommonstockbeneficiallyownedby • thenominee’sname,age,businessandresidenceaddresses,principaloccupationor • The noticemustcontainallinformationrequiredbyourBylawsabouttheshareholder the shareholder. each nomineeandanyotherpersonpursuanttowhichthenominationisbemadeby shareholder andeachnominee; dividends byDollarGeneral; increases ordecreasesinthevalueofsecuritiesDollarGeneralpayment family inthesecuritiesofDollarGeneral,includinginterestsvaluewhichisbasedon record books,andthenameaddressofbeneficialholder(ifapplicable); named intheproxystatementasanomineeandtoservingdirector,ifelected); of theSecuritiesExchangeAct of1934(includingthenominee’swrittenconsenttobeing solicitations withrespecttonomineesforelectionasdirectorspursuantRegulation 14A nominee andbytheshareholderproposingnominee; employment; 10 Proxy Committee Functions 11 lead audit partner candidate(s) (the committee’s Chairman also lead audit partner candidate(s) (the interviews the lead director candidate(s)) and fees terms and all permitted non-audit services material issues raised by its most quality control procedures and any recent review of internal quality controls evaluates the lead audit performance and independence, annually there should be a regular partner, and periodically considers whether rotation of such firm the independent auditor independent auditor statements with management and the rating agencies releases and provided to analysts and risk management are to be undertaken material weaknesses in our internal control over financial reporting complaints we receive regarding accounting or internal controls financial statements proposals relating to matters within the committee’s expertise • Selects the independent auditor • the independent auditor’s audit engagement fees and Pre-approves • auditor’s internal an annual report describing the independent Reviews • evaluates the independent auditor’s qualifications, Annually • the audit scope and any audit problems or difficulties Discusses • regarding the hiring of current and former employees of Sets policies • the annual audited and quarterly unaudited financial Discusses • types of information to be disclosed in earnings press Discusses • policies governing the process by which risk assessment and Discusses • disclosures regarding any significant deficiencies or CEO/CFO Reviews • audit activities, projects and budget internal Reviews • and treatment of Establishes procedures for receipt, retention • having an impact on Discusses with our general counsel legal matters •annual self-evaluation an Performs • committee report required in our proxy statement the Furnishes • shareholder Evaluates and makes recommendations concerning • and reassesses the committee’s charter reviews Periodically Name of Yes. Our Board of Directors has a standing Audit Committee, Compensation Committee and Committee, Compensation a standing Audit Our Board of Directors has Yes. Mr. Rickard, ChairmanMr. Bryant • with management the qualifications and experience of the Discusses Ms. Cochran Ms. Price Committee & Members Nominating Committee. The Board has adopted a written charter for each of these committees, which charter for each of these committees, The Board has adopted a written Nominating Committee. located at Governance’’ section of our website ‘‘Investor Information—Corporate are available on the below. each of these committees is set forth Current information regarding www.dollargeneral.com. Does the Board of Directors have standing Audit, Compensation and Nominating Committees? Compensation and Nominating Directors have standing Audit, Does the Board of CORPORATE GOVERNANCE CORPORATE AUDIT: Proxy GOVERNANCE: NOMINATING AND COMPENSATION: Committee &Members r hds himnmembersofourBoard Ms. Fili-Krushel Ms. Cochran Mr. Rhodes,Chairman compensationofourCEO Mr. Rhodes Ms. Fili-Krushel Mr. Bryant,Chairman Name of Periodically reviewsandreassessesthecommittee’scharter • Evaluatesandmakesrecommendationsconcerningshareholder • Performs anannualself-evaluation • Overseestheprocess governingtheannualevaluationofBoardand • Developsandrecommends CorporateGovernanceGuidelinesand • Recommends personstofillBoardandcommitteevacancies • Recommends thestructureandmembershipofBoardcommittees • Screensandrecommends toourBoardindividualsqualifiedbecome • Developsandrecommends criteriaforselectingnewdirectors • Periodically reviewsandreassessesthecommittee’scharter • Evaluatesandmakes recommendationsconcerningshareholder • Performs anannualself-evaluation • Overseesandevaluates theindependenceofitscompensation • Selectsanddetermines thefeesofitscompensationconsultant • Reviews anddiscusseswithmanagement, priortothefilingof • Overseestheprocessforevaluatingourseniorofficers • Overseestheshareownershipguidelinesandholdingrequirementsfor • Establishesourlong-termincentivecompensationprogramand • Establishesourshort-termincentivecompensationprogramforsenior • Recommends, whenappropriate,changes toourcompensation • Determinesthecompensationofourexecutiveofficers(subject,in • Reviews andapprovescorporategoals objectivesrelevanttothe • proposals relatingtomatterswithinthecommittee’sexpertise its individualmembers corporate governancepractices proposals relatingtomatterswithinthecommittee’sexpertise consultant andotheradvisors the proxystatement) tables (inadditiontopreparingareportonexecutivecompensationfor including theCompensationDiscussionandAnalysiscompensation proxy statement,thedisclosureregardingexecutivecompensation, Board membersandseniorofficers approves equity-basedawardsundersuchprogram officers philosophy andprinciples Board forapproval directors) andrecommendsthecompensationofourdirectorsto case oftheCEO’scompensation,toratificationbyindependent 12 Committee Functions Proxy 13 of the independent directors and, if not all non-management directors are independent, of of the independent directors and, if not all non-management directors as lead director, the non-management directors. Mr. Calbert, as Chairman and formerly presides over such executive sessions. each standing committee. Yes. Our Board has designated each of Mr. Rickard, Ms. Cochran and Ms. Price as an audit Price Cochran and Ms. Mr. Rickard, Ms. each of Our Board has designated Yes. and Nominating Committee, Compensation Committee Board, Audit During 2015, our a policy that all directors should attend annual Our Board of Directors has adopted in Dreiling to Mr. Vasos CEO role from Mr. Richard W. No. As part of the transition of the Board leadership, the Board has adopted a number further promote effective independent To • Board meeting for executive sessions Ensuring opportunity after each regularly scheduled • of the CEO. Conducting annual performance evaluations • self-evaluations by the Board and Conducting annual Board and committee performance Committee is responsible for overseeing the evaluation of the Board of The Nominating Yes. Does Dollar General have an audit committee financial expert serving on its Audit Committee? serving on its Audit financial expert an audit committee General have Does Dollar listing is independent as defined in NYSE expert and has determined that each committee financial as Such experts have the same responsibilities Corporate Governance Guidelines. standards and in our ‘‘field or accountants, do not perform members. They are not our auditors Committee the other Audit that designation as an audit committee employees. The SEC has determined work’’ and are not to be an ‘‘expert’’ for any purpose. not cause a person to be deemed financial expert will 2015? Board and its committees meet in How often did the 75% of incumbent director attended at least 5, 6 and 4 times, respectively. Each Committee met 10, were held on which he or she served which of the Board and all committees the total of all meetings was a director and a member of each applicable committee. during the period for which he or she Board member attendance at the annual meeting? What is Dollar General’s policy regarding is not feasible due to unavoidable circumstances. All persons shareholders’ meetings unless attendance attended the 2015 annual shareholders’ meeting. serving as Board members at the time of Chairman and CEO? Does Dollar General combine the positions positions of Chairman and CEO, and Mr. Dreiling continued to June 2015, the Board separated the as Chairman, and to Mr. Dreiling’s tenure January 2016. Following serve in the Chairman position until and energy on managing our business, the Board the opportunity to focus his time afford Mr. Vasos the positions of Chairman and CEO and appointed Mr. Calbert, an determined to continue to separate at the time, to the Chairman role effective January 30, 2016. independent director and the lead director to devote his time and attention to matters of Board This decision further allows our Chairman recognizes that no single leadership model is right for all oversight and governance. The Board Board will review its leadership structure as appropriate to ensure companies and at all times, and the of Dollar General and our shareholders. it continues to be in the best interests including: of additional governance practices, Does the Board of Directors evaluate the performance of Board members? process to be followed Directors. As part of this responsibility, in addition to approving an evaluation encourages our directors to for the Board and each standing committee, the Nominating Committee of the Nominating Committee provide candid feedback on any member of the Board to the Chairman and the Chairman of the or the Chairman of the Board. The Chairman of the Nominating Committee Proxy in theeventofanemergencyorhissuddenincapacitation ordeparture. periodically, aconfidentialprocedureforthetimelyand efficienttransferoftheCEO’sresponsibilities strategy isalsoconsidered.Inaddition,wemaintainat alltimes,andreviewwiththeBoard growth anddevelopmentplans.With respecttoCEOsuccessionplanning, our long-termbusiness is appropriate,assessmentofeachpotentialsuccessor’s levelofreadiness,andpreparationindividual identification ofpotentialsuccessorsforpositionswhere ithasbeendeterminedthatinternalsuccession through thefront-linesupervisorylevel.Theprogramfocusesonkeysuccessionelements,including comprehensive programencompassesnotonlyourCEOandotherexecutiveofficersbutallemployees succession. OurBoardformallyreviewsourmanagementsuccessionplanatleastannually. our CEOtoensurethataformalizedprocessgovernslong-termmanagementdevelopmentand Does DollarGeneralhaveamanagementsuccessionplan? and itscommitteeshasnothadanyeffectonourBoard’sleadershipstructure. addresses thematerialrisksfacingDollarGeneral.Accordingly, theriskoversightroleofourBoard risk interrelationships.OurBoardbelievesthisdivisionofmanagementresponsibilitieseffectively enables theBoardanditscommitteestocoordinateriskoversightrole,particularlywithrespect above, theentireBoardisregularlyinformedaboutrisksthroughcommitteereportingprocess.This the risksrelatingtoouroverallcompensationprograms. Risk Considerations’’below,theCompensationCommitteealsoparticipatesinperiodicassessmentsof to ourexecutivecompensationprogram.Asdiscussedunder‘‘ExecutiveCompensation—Compensation mitigation. Committee alsoquarterlyreviewsmetricsandinformationpertainingtosecurityrisks high residualrisk,alongwiththeirmitigationstrategies,arereviewedindividually.OurAudit risks. TheresultsarepresentedtotheAudit Committeeatleastannually.Quarterly,thecategorieswith and reviewofotheroutsideinformationconcerningbusiness,financial,legal,reputational, fiscal budget,reviewofupcominglegislativeorregulatorychanges,certaininternalmetrics interviews withseniormanagementandourBoard,reviewofstrategicinitiatives,evaluationthe mitigation strategies,andassessestheremainingresidualrisk.Theprogramisupdatedthrough comprehensive riskmanagementpractices.Theprogramevaluatesinternalandexternalrisks,identifies Audit departmentcoordinatesthatprogram,whichentailsreviewanddocumentationofour management, primarilythroughoversightofourenterpriseriskmanagementprogram.OurInternal the Boardregardingourinsurancecoverageandprogramsaswelllitigationrisks. relevant materialrisksasappropriate.OurGeneralCounselalsoperiodicallyprovidesinformationto process. OurBoardregularlyreviewswithmanagementourfinancialandbusinessstrategies,including What istheBoardofDirector’sroleinriskoversight? appropriate andinDollarGeneral’sbestinterests. performance ofourBoardmembersandtodiscusswhat,ifany,responseorotherfollow-upactionis Board meetatleastannuallytoreviewallsuchfeedbackandanyotherinformationrelatedthe Yes. OurCorporateGovernanceGuidelinesrequireourBoardofDirectorstocoordinatewith While theAudit Committee andtheCompensationCommitteeoverseeriskareasidentified Our CompensationCommitteeisresponsibleforoverseeingthemanagementofrisksrelating The Audit Committeediscussesourpolicieswithrespecttoriskassessmentand Our BoardofDirectorsanditscommitteeshaveanimportantroleinourriskoversight 14 Proxy 15 Yes. Details of our share ownership guidelines and holding requirements for Board members guidelines and holding requirements Details of our share ownership Yes. the other interested parties to contact process for security holders and Our Board-approved is posted on www.dollargeneral.com under ‘‘Investor Our governance-related information Are there share ownership guidelines and holding requirements for Board members and senior for Board members requirements guidelines and holding share ownership Are there officers? Guidelines. See ‘‘Compensation are included in our Corporate Governance and senior officers for more information on such ownership and ‘‘Director Compensation’’ Discussion and Analysis’’ and Board members, respectively. requirements for senior officers guidelines and holding with the Board of Directors? How can I communicate directors or the independent a particular director, or the non-management Board of Directors, under ‘‘Investor Information—Corporate is described on www.dollargeneral.com directors as a group Governance.’’ about Dollar General’s corporate governance practices? Where can I find more information including our Corporate Governance Guidelines, Code of Information—Corporate Governance,’’ Compensation Committee, the of each of the Audit Business Conduct and Ethics, the charter and the name(s) of the persons chosen to lead the Committee and the Nominating Committee, directors and of the independent directors. This information executive sessions of the non-management Dollar who sends a written request to: Investor Relations, is available in print to any shareholder Goodlettsville, TN 37072. General Corporation, 100 Mission Ridge, Proxy 4 Represents thedollarvalueofdividendspaid,accumulatedor creditedonunvestedRSUs.Perquisites andpersonal (4) Therewerenostockoptionsawardedtoanydirectorlistedinthetableaboveduringfiscal2015,asBoardchose (3) Represents thegrantdatefairvalueofrestrictedstockunits(‘‘RSUs’’)awardedtoeachdirectoronMay27,2015, (2) InadditiontotheannualBoardretainer,followingdirectorswerepaidfornumberofexcessmeetings: (1) David B.Rickard William C.Rhodes,III Paula A.Price Patricia D.Fili-Krushel Sandra B.Cochran Michael M.Calbert Warren F. Bryant Name they areinapplicable. compensation andchangeinpensionvaluenonqualifieddeferredearningsbecause Compensation’’ below.We haveomittedthe columnspertainingtonon-equityincentiveplan for theirserviceontheBoard;executivecompensationisdiscussedunder‘‘Executive non-employee Boardmembersfor2015.Messrs.DreilingandVasos werenotseparatelycompensated DIRECTOR COMPENSATION benefits, ifany,totaledlessthan$10,000perdirectorandtherefore arenotincludedinthetable. Ms. Price (4,795);andMr.Rickard(21,513). exercisable): eachofMessrs.Bryant,CalbertandRhodes(21,756);Ms.Cochran(13,120);Fili-Krushel(12,892); persons listedinthetableabovehadfollowingtotalunexercisedstockoptionsoutstanding(whetherornotthen eliminate stockoptionawardsaspartofdirectorcompensationbeginninginfiscal2015.AsJanuary29,2016,eachthe Rickard andMs.Fili-Krushel(2,609);Cochran(2,977);Price (2,277). credited asaresultofdividendequivalentsearnedwithrespecttotheRSUs):eachMessrs.Bryant,Calbert,Rhodesand each ofthepersonslistedintableabovehadfollowingtotalunvestedRSUsoutstanding(includingadditional fiscal yearendedJanuary29,2016,filedwiththeSEConMarch22,2016(our‘‘2015Form 10-K’’).As ofJanuary29,2016, awards isincludedinNote10oftheannualconsolidatedfinancialstatementsourAnnualReport on Form 10-Kforthe computed inaccordancewithFASB ASC Topic 718.Informationregardingassumptionsmadeinthevaluationofthese below. Mr. Calbertdeferredallofhisfiscal2015feesundertheNon-EmployeeDirectorDeferredCompensationPlandiscussed the Audit Director. Committee,respectively,andMr.CalbertreceivedanannualretainerforserviceastheLead received anannualretainerforserviceastheChairmanofCompensationCommittee,NominatingCommitteeand Mr. Bryant(4);Ms.Cochran(2);Fili-KrushelandRhodes(2).Messrs.Bryant,Rickardalso The followingtableandtextsummarizethecompensationearnedbyorpaidtoeachofour Fiscal 2015DirectorCompensation nCs wrsAad opnainTotal Compensation Awards Awards in Cash 0,0 2,9 ,1 233,207 226,718 4,116 2,127 235,216 235,552 — — 3,625 121,591 2,961 121,591 107,500 103,000 — — 121,591 121,591 110,000 111,000 rPi tc pinAllOther Option Stock or Paid Earned 5001151—173208,344 214,868 211,962 1,753 2,277 2,371 — — 121,591 — 121,591 85,000 121,591 91,000 88,000 ($) Fees 16 (1) ($) (2) ($) (3) ($) (4) ($) Proxy Fee for Fee Per Meeting Per ($) ($) ($) 17 Audit Compensation Nominating Meetings Estimated 22,500 20,000 15,000 1,500 135,000 (1) Lead Committee Committee Committee in Attended of Value ($) ($) ($) ($) Board Director Chairman Chairman Chairman Excess of 16 Equity 85,00085,000 25,000 N/A 22,500 20,000 15,000 1,500 125,000 Retainer Retainer Retainer Retainer Retainer FY During Award The RSUs are awarded annually to those non-employee directors who are elected or re-elected The RSUs are awarded annually to and the mix of equity, including the changes in director These fees and equity award values mix was changed As a result of such considerations, (1) as previously disclosed, the equity be deferred under the Up to 100% of cash fees earned for Board services in a fiscal year may We do not compensate for Board service any director who also serves as our employee. We will employee. We also serves as our any director who for Board service not compensate do We in as applicable) for a fiscal year director will receive payment (prorated Each non-employee 2016. In lieu of an additional cash retainer for this service, the Chairman of the Board will receive an annual Chairman 2016. In lieu of an additional cash retainer for 2007 in shares of our common stock under our Amended and Restated retainer delivered in the form of RSUs, payable the first anniversary of the grant date, subject to certain accelerated vesting Stock Incentive Plan and scheduled to vest on conditions, having an estimated value of $200,000. at the shareholders’ meeting and to any new director appointed after the annual shareholders’ meeting at the shareholders’ meeting and to are scheduled to vest 1 of a given year. Beginning with the 2015 award, the RSUs but before February date subject to full acceleration of vesting upon death, disability (as on the first anniversary of the grant or voluntary departure from the Board. Directors may elect defined in the applicable award agreement) the RSUs. to defer receipt of shares underlying recommended each year by the Compensation Committee, and compensation identified below, were into account market benchmarking data, Meridian’s approved by the Board, after taking to 2015 and prior Officer (with respect CEO and the Chief People recommendations, the input of the award to the Chairman in 2016, the amount of time anticipated to years) and, for the additional equity CEO. Although the Committee may solicit and consider the be devoted to the mentoring of a new it and the Board retain and exercise ultimate decision- Officer, input of our CEO and our Chief People making authority regarding director compensation. to the 2014 equity mix which beginning in 2015 to deliver all of the equity value in RSUs as opposed value of the equity award was consisted of 60% stock options and 40% RSUs; and (2) the estimated increased beginning in fiscal 2016. upon separation from Non-Employee Director Deferred Compensation Plan. Benefits are payable a lump sum distribution or service in the form, as elected by the director at the time of deferral, of directors can direct the hypothetical investment of monthly payments for 5, 10 or 15 years. Participating will be credited with the deferred fees into funds identical to those offered in our 401(k) Plan and deemed investment gains and deemed investment gains and losses. The amounts deferred, along with vary depending on the fees the losses, are credited to a liability account. The amount of the benefit will upon death are payable to director has deferred and the deemed investment gains and losses. Benefits defined in the Non-Employee the director’s named beneficiary. In the event of a director’s disability (as (1) director, we do not intend to re-appoint a lead director in fiscal Because the Chairman of the Board is an independent reimburse directors for certain fees and expenses incurred in connection with continuing education with continuing incurred in connection fees and expenses directors for certain reimburse to Dollar General business. and related expenses related seminars and for travel award of as applicable, along with an annual of the following cash compensation, quarterly installments 2007 Stock Incentive our Amended and Restated shares of our common stock, under RSUs, payable in estimated value: Plan having the following Fiscal Year 2016 2015 Proxy pertaining tothesemattersareestablishedbytheCompensationCommittee. Please seeourCorporateGovernanceGuidelinesforadditionalinformation.Administrative details of allnetafter-taxsharesgrantedbyDollarGeneraluntilheorshereachestheshareownershiptarget. acquire theincrementalmultiple.Eachnon-employeedirectorisrequiredtoretainownershipof50% ownership guidelineisincreased,incumbentnon-employeedirectorsareallowedanadditionalyearto Board, andtheremaindershouldbeacquiredwithin5yearsofelectiontoBoard.When times suchannualcashretainershouldbeacquiredpriortoorassoonpracticableafterjoiningthe ownership guidelineis5times(increasedfromamultipleof4inDecember2015).At least1 of theannualcashretainerpayableforserviceonourBoard,andholdingrequirements.Thecurrent deferrals arenotcontributedtoatrust,andallbenefitspaidfromDollarGeneral’sgeneralassets. Director DeferredCompensationPlan),theunpaidbenefitwillbepaidinalumpsum.Participant Our non-employeedirectorsaresubjecttoshareownershipguidelines,expressedasamultiple 18 Proxy 19 Yes. A majority of our directors must be independent in accordance with the independence must be independent in accordance A majority of our directors Yes. determines the independence of each director and The Board of Directors affirmatively director or nominee has a relationship covered by the The Board first considers whether any Bryant, Michael M. Calbert, Sandra B. F. No. Our Board of Directors consists of Warren and Rickard and Our Board has affirmatively determined that Messrs. Bryant, Calbert, Rhodes requirements set forth in the NYSE listing standards. In addition, the Audit Committee, the In addition, the Audit in the NYSE listing standards. requirements set forth must be composed solely of independent and the Nominating Committee Compensation Committee Committee, with SEC the case of the Audit with such listing standards and, in directors to comply being that disqualify directors from listing standards define specific relationships rules. The NYSE must qualify as ‘‘independent,’’ the Board require that for a director to independent and further The SEC’s relationship with Dollar General. that the director has no material affirmatively determine of definitions of independence for members listing standards contain separate rules and the NYSE and compensation committees, respectively. audit committees director independence? How does the Board of Directors determine guidelines it has adopted, which include all elements of director nominee in accordance with listing standards and SEC rules as well as certain Board-adopted independence set forth in the NYSE These guidelines are contained in our Corporate Governance categorical independence standards. ‘‘Investor Information—Corporate Governance’’ section of our Guidelines, which are posted on the website located at www.dollargeneral.com. prohibit an independence finding for Board or committee purposes. NYSE listing standards that would of the remaining eligible directors and nominees with Dollar The Board then analyzes any relationship outside the parameters of the Board’s separately adopted General or our management that falls to determine whether or not that relationship is material. The categorical independence standards or nominee who has a relationship outside such parameters is Board may determine that a director relationship is not considered to be material. Any director who nonetheless independent because the General or its management is not considered to be independent. has a material relationship with Dollar does not consider or analyze any relationship that falls within Absent special circumstances, the Board adopted categorical independence standards. the parameters of the Board’s separately independent? Are all of the directors and nominees J. C. Rhodes, David B. Rickard and Todd William A. Price, D. Fili-Krushel, Paula Cochran, Patricia Committee, on our Audit serve Rickard and Bryant and Mss. Cochran and Price Messrs. Vasos. Committee, and Messrs. Bryant and Rhodes and Ms. Fili-Krushel serve on our Compensation Committee. Richard W. Mr. Rhodes and Mss. Cochran and Fili-Krushel serve on our Nominating 2016. Dreiling served on our Board and as its Chairman through January 29, are independent from our but not Messrs. Dreiling and Vasos, Mss. Cochran, Fili-Krushel and Price, standards. Except as described management under both the NYSE listing standards and our additional or our management fell below, any relationship between an independent director and Dollar General reviewed or considered by our within the Board-adopted categorical standards and, accordingly, was not Committee, the Audit Board. The Board has also determined that the current members of the requirements for Compensation Committee and the Nominating Committee meet the independence our additional standards and, membership on those committees set forth in the NYSE listing standards, Committee, SEC rules. as to the Audit Is Dollar General subject to the NYSE governance rulesIs Dollar General director independence? regarding DIRECTOR INDEPENDENCE DIRECTOR Proxy approval policy. awards wereapprovedbytheCompensationCommitteepursuanttoourrelated-partytransactions Mr. Brophy’scompensationorperformanceevaluations.cashandequity our otherfull-timeemployees.Ms.Cochrandoesnotparticipateinanydecision-makingrelatedto with theSEC.We expectMr.Brophy’stotal cashcompensationfor2016tonotexceed$270,000. grade levelasMr.Brophyandontermssubstantiallysimilartotheformsofawardagreementsfile consistent withtheannualequityawardsreceivedbyallDollarGeneralemployeesatsamejob stock options,atargetawardof224PSUs,andRSUs.Allequityawardsweregrantedonterms RSUs. InMarch2016,Mr.Brophyreceivedanannualequityawardconsistingof1,958non-qualified ultimately earnedasaresultofouradjustedEBITDA andadjustedROICperformance),433 non-qualified stockoptions,atargetawardof433performanceshareunits,or‘‘PSUs’’(452PSUswere bonus compensation)oflessthan$325,000andreceivedanannualequityawardconsisting3,583 Mr. BrophyearnedfromDollarGeneraltotalcashcompensation(comprisedofhisbasesalaryand from 2009untilOctober2015andasanon-officerlevelemployeesince2015.For 2015, Ms. Cochran’sbrother,StephenBrophy,hadservedasanon-executivevicepresidentofDollarGeneral Mr. Brophyalsoiseligibletoparticipateinemployeebenefitsplansandprogramsavailable In reachingthedeterminationthatMs.Cochranisindependent,Boardconsidered 20 Proxy 21 of the entity’s annual consolidated revenues (total consolidated assets in the case of a of the entity’s annual consolidated revenues individual participates in the actual provision of lender) if no related party who is an with, us on the entity’s behalf or receives special services or goods to, or negotiations compensation or benefit as a result. who is an individual participates in the grant decision annual receipts and no related party or benefit as a result. or receives any special compensation benefit on a pro rata basis. all of our shareholders receive the same charges fixed in conformity with law or governmental authority. trustee under a trust indenture, or similar services. or compensatory generally, ordinary course business travel expenses and reimbursements, approved by the arrangements to directors, director nominees or officers that have been Board or an authorized committee. Yes. Our Board of Directors has adopted a written policy for the review, approval or adopted a written policy for the review, Our Board of Directors has Yes. to related party transactions, subject prior Board approval for all known The policy requires is authorized to approve a related party transaction in Each of our Chairman and our CEO • a total amount that does not exceed the greater of $1 million or 2% involving Transactions • total contributions if the total amount does not exceed 2% of the recipient’s Charitable • the interest arises solely from share ownership in Dollar General and where Transactions • where the rates or charges are determined by competitive bid. Transactions • for services as a common or contract carrier or public utility at rates or Transactions • involving services as a bank depositary of funds, transfer agent, registrar, Transactions • basis to all salaried employees Compensatory transactions available on a nondiscriminatory of our non-executive Other than compensation paid or to be paid during 2015 and 2016 to one ratification of ‘‘related party’’ transactions. A ‘‘related party’’ for this purpose includes our directors, party’’ for this purpose includes our party’’ transactions. A ‘‘related ratification of ‘‘related immediate 5% shareholders, and any of their executive officers and greater than director nominees, $120,000, which (1) the total amount may exceed a ‘‘transaction’’ includes one in family members, and material party will have a direct or indirect is a participant, and (3) a related (2) Dollar General owner of another entity, or both). as a director or a less than 10% interest (other than immediate annually after receiving a list of identified below. In addition, at least certain exceptions and executive officers, relevant internal departments determine family members from our directors entered into with a related party and the Board is whether any transactions were unknowingly subject to certain exceptions identified below, for review. The presented with a list of such transactions, any discussion or approval of the transaction and must provide to related party may not participate in the transaction. the Board all material information concerning anticipated amount is less than $1 million and he informs the which he is not involved if the total the transactions below are deemed pre-approved without Board Board of the transaction. In addition, review or approval: What related-party transactions existed in 2015 or are planned for 2016? under ‘‘Director employees who is a family member of Ms. Cochran, as discussed further the beginning of 2015, or any Independence’’ above, there are no transactions that have occurred since $120,000 and in which a currently proposed transactions, that involve Dollar General and exceed related party had or has a direct or indirect material interest. Does the Board of Directors have a related-party transactions approval policy? Directors have a related-party transactions Does the Board of TRANSACTIONS WITH MANAGEMENT AND OTHERS AND WITH MANAGEMENT TRANSACTIONS Proxy Independent compensationconsultant Annual compensationriskassessment shareholder approval underwater stockoptionswithout No repricingorcashbuyoutof income taxgross-ups No excisetaxgross-upsandminimal securities inmarginaccounts securities orholdingDollarGeneral No hedgingorpledgingDollarGeneral holding requirements Robust shareownership guidelinesand Pay forPerformance shareholders andtofollowsoundcorporategovernancepractices. maintain ourcompetitivepositioninthemarketwhichwecompeteforexecutivetalent. incent achievementofourannualandlong-termbusinessstrategies,topayforperformance expertise. Ourprogramisdesignedtobalancetheshort-termandlong-termcomponentsthus compensation packagethatwillattract,retainandmotivateexperiencedexecutiveswiththerequisite shareholders. To deliversuperiorshareholderreturns,webelieveitiscriticaltoofferacompetitive Overview Vice President, StoreOperations. Rhonda Taylor, ExecutiveVice President andGeneralCounsel;GregorySparks,formerExecutive President, GlobalSupplyChain;Robert Ravener, ExecutiveVice President andChiefPeople Officer; Tehle, formerExecutiveVice President andChiefFinancialOfficer;JohnFlanigan,ExecutiveVice Officer andSeniorAdvisor; JohnGarratt,ExecutiveVice President andChiefFinancialOfficer;David officers: Todd Vasos, ChiefExecutiveOfficer; RichardDreiling,formerChairman,ChiefExecutive EXECUTIVE COMPENSATION Compensation BestPractices. Our executivecompensationprogramisdesignedtoservethelong-terminterestsofour This sectionprovidesdetailsofthecompensationforfiscal2015ournamedexecutive Compensation Practice Compensation DiscussionandAnalysis We strivetoalignourexecutives’interestswiththoseof and non-employeedirectorcompensationmatters. independent consultanttoprovideadviceonexecutive Our CompensationCommitteeretainsan assesses theriskofourcompensationprogram. At leastannually, ourCompensationCommittee another awardtype,withoutshareholderapproval. of stockoptionsorreplacingawardswithcash underwater stockoptions,reducingtheexerciseprice Our equityincentiveplanprohibitsrepricing on relocation-relateditems. We donotprovidetaxgross-uppaymentsotherthan Hedging andPledgingTransactions.’’ securities inamarginaccount.See‘‘Policy Against pledging oursecuritiesascollateral,andholding members fromhedgingtheirownershipofourstock, Our policyprohibitsexecutiveofficersandBoard Ownership GuidelinesandHoldingRequirements.’’ shareholders’ long-terminterests.See‘‘Share requirements createfurtheralignmentwith Our shareownershipguidelinesandholding Performance.’’ compensation areperformancebased.See‘‘Pay for significant majorityofourequityincentive All ofourannualbonuscompensationanda is linkedtothefinancialperformanceofkeymetrics. A significantportionoftargeteddirectcompensation 22 Dollar GeneralPolicy Proxy STI 26% 17% Salary 29MAR201619275213 (Average) Other NEOs LTI 57% Variable/At-Risk: 74% Variable/At-Risk: The most significant recent compensation-related 23 Participants earned a payout under our annual Teamshare Participants The awards granted in March 2015 were earned at 104.5% of The awards granted in March 2015 STI 12% Consistent with our philosophy, and as illustrated below, a significant and as illustrated with our philosophy, Consistent 12% Salary 29MAR201619275050 CEO LTI Variable/At-Risk: 88% Variable/At-Risk: 76% target, based on achieving adjusted EBITDA of $2.347 billion, or 100% of the adjusted of $2.347 billion, or 100% of the EBITDA target, based on achieving adjusted adjusted ROIC target, ROIC of 19.14%, or 100.5% of the target, and Adjusted EBITDA in the PSU award agreements (see ‘‘Long-Term in each case as defined and calculated Equity Incentive Program’’). from Chief agreement and related compensation to ensure Mr. Dreiling’s smooth transition Employment Executive Officer through his January 29, 2016 retirement date. See ‘‘CEO Agreement.’’ Transition compensation Officer (‘‘CEO’’), and the Compensation Committee approved his revised package as discussed in more detail below. Committee retirement in July 2015, and the Compensation created by Mr. Tehle’s more detail below. approved a new compensation package for Mr. Garratt as discussed in Teamshare Bonus Program: Teamshare payout level based on achieving adjusted EBIT (as bonus program of 109.2% of the target bonus program) of $1.957 billion, or of the Teamshare defined and calculated for purposes Plan’’). Cash Incentive (see ‘‘Short-Term 100.92% of the adjusted EBIT target Share Units: Performance Significant Compensation-Related Actions. Significant Compensation-Related • approved an employment transition In March 2015, the Compensation Committee • was promoted from Chief Operating Officer to Chief Executive In June 2015, Mr. Vasos • to Chief Financial Officer to fill the vacancy In December 2015, Mr. Garratt was promoted The following payouts were earned as a result of strong performance versus the financial The following payouts were earned • • Pay for Performance. Pay actions pertaining to our named executive officers include: targets used for our 2015 performance-based compensation: targets used for our 2015 performance-based ‘‘CEO’’ reflects compensation for Mr. Vasos and not Mr. Dreiling; ‘‘Other NEOs’’ reflects compensation only for the other and not Mr. Dreiling; ‘‘Other ‘‘CEO’’ reflects compensation for Mr. Vasos and after the end of fiscal 2015 (i.e., Messrs. Garratt, Flanigan and Ravener named executive officers who remained employed Ms. Taylor). bonus program) Incentive (Teamshare Cash STI—Short-Term Incentive Equity LTI—Long-Term portion of annualized target total direct compensation for our named executive officers in 2015 was named executive for our total direct compensation annualized target portion of stock price. and exposed to fluctuations in our performance based Proxy conducted anextensivereviewandrequestforproposal process.AMeridianrepresentativeattends served astheCommittee’sconsultantsince2007and was re-selectedin2014aftertheCommittee independent andthatitsworkhasnotraisedanyconflicts ofinterest.Meridian(oritspredecessor)has Partners (‘‘Meridian’’)toserveasitscompensationconsultantandhasdetermined thatMeridianis ratification bytheindependentmembersofBoard. Beginning in2016,suchdeterminationpertainingtothe levelofCEOcompensationwillbesubjectto independent directors,determinesandapprovesthecompensation ofournamedexecutiveofficers. Oversight andProcess non-solicitation andconfidentialityobligations. continuity, aidinretentionandsecurevaluableprotectionsforDollarGeneral,suchasnon-compete, executive officersareoutlinedbelow: shareholders. Thematerialcompensationprinciplesapplicabletotheofournamed performance, andtoalignthelong-terminterestsofournamedexecutiveofficerswiththose Philosophy andObjectives meeting ofshareholders. shareholder advisoryvoteonournamedexecutiveofficercompensationwillbeheldat2017annual and practices,wedidnotbelievethevoterequiredconsiderationofchangestoprogram.Thenext program. Becauseweviewedthisoutcomeasoverwhelminglysupportiveofourcompensationpolicies in 2011.Excludingabstentionsandbrokernon-votes,96.0%oftotalvoteswerecastsupportthe officer compensationwasheldin2014,basedonthethree-yearfrequencyapprovedbyourshareholders Use ofOutsideAdvisors. Oversight. We haveemploymentagreementswiththenamedexecutiveofficerstopromote Inapprovingcompensation arrangements,weconsiderrecentcompensationhistory, • We promoteshareownershiptoaligntheinterestsofour namedexecutiveofficerswith • We rewardnamedexecutiveofficerswhoenhanceourperformance bylinkingcashand • We setbasesalariestoreflecttheresponsibilities,experience, performanceand • Indeterminingtotalcompensation,weconsiderthereasonablerangeofmedian • We strivetoattract,retainandmotivate persons withsuperiorability,torewardoutstanding Shareholder Response. TheequityawardsgrantedinMarch2016includea‘‘double-trigger’’provisionwhich • including specialorunusualcompensationpayments. those ofourshareholders. equity incentivestotheachievementofourfinancialgoals. compensation. positions, whilemaintaininganappropriatebalancebetweenbasesalaryandincentive contributions ofthenamedexecutiveofficersandsalariesforcomparablebenchmarked compensation mayexceedorbebelowthemedianrangeofourmarketcomparatorgroup. For competitiveorother reasons,ourlevelsoftotalcompensationoranycomponent well asourparticularnicheintheretailsector,thatarenotreflectedmarketdata. adjustments basedoncircumstances,suchasuniquejobdescriptionsandresponsibilities comparable positionsatcompanieswithinourmarketcomparatorgroup,butwemake in orderforvestingtoaccelerateconnectionwiththechangecontrol. requires aterminationeventwithincertainperiodoftimefollowingchangeincontrol The CompensationCommitteeofourBoardDirectors, consistingentirelyof The mostrecentshareholderadvisoryvoteonournamedexecutive The CompensationCommitteehasselectedMeridian Compensation 24 Proxy 25 The Compensation Committee, together with the Chairman The Compensation Committee, together Financial performance targets used in our incentive compensation Financial performance The Committee (or its Chairman) determines the scope of Meridian’s services and has its Chairman) determines the scope The Committee (or Management’s Role. the overall performance rating as an eligibility threshold The Committee historically has used may impact the In addition to functioning as an eligibility threshold, the performance rating the number, or a total An unsatisfactory performance rating also would result in a reduction in Use of Performance Evaluations. Use of Performance Committee meetings and private sessions if the Committee requests, and Committee members are free members are and Committee Committee requests, sessions if the meetings and private Committee as desired. directly with Meridian to consult which Meridian will provide independent agreement that details the terms under approved a written meeting includes availability for Committee The approved scope generally advice to the Committee. making with risk assessment and with decision preparation work; assistance attendance and associated pay advising on our Board and executive and director compensation matters; regarding executive practices and incentive plan design, emerging best market comparator group, philosophy, compensation along with competitive market studies. Meridian, environment; and providing changes in the regulatory decisions by the Committee in making prepares benchmarking data for consideration management, also program. and the long-term incentive bonus program, salary, the Teamshare on items such as base of the CEO, and the CEO evaluates and reports to the of the Board, assesses the performance of the other named executive officers, in each case versus Committee on the performance of each evaluations are subjective; no objective criteria or relative weighting previously established goals. These factor. is assigned to any individual goal or an unsatisfactory rating bonus payment. Although for an annual base salary increase and Teamshare bonus payment, performance generally would preclude an annual base salary increase or a Teamshare bonus payment for a named ratings have not been used to determine the amount of the Teamshare such amount has been determined solely based upon the level of achievement executive officer. Rather, bonus program of the applicable financial performance measure and the terms of the Teamshare described below. Committee typically starts with amount of a named executive officer’s annual base salary increase. The for our U.S.-based the percentage base salary increase that equals the overall budgeted increase to reflect performance, employee population, and considers whether adjustments are necessary of the market comparator responsibilities or qualifications; to bring pay within a reasonable range base salary and incentive group; due to a change in role or duties; to achieve a better balance between from the overall budgeted compensation; or for other reasons the Committee believes justify a variance increase. officer in the following year. elimination, of RSUs and stock options awarded to the named executive programs typically are derived from our annual financial plan that is prepared by our executive programs typically are derived from and approved by our Board of Directors. Messrs. Dreiling, Vasos management team and reviewed and members of the human resources group provide assistance to the and non-executive Ravener regarding executive compensation matters, including Compensation Committee and Meridian and making recommendations regarding amount, mix and program conducting research, compiling data group composition and compensation-related governance structure alternatives, market comparator to and coordinating with Meridian as requested, and practices, as well as providing information to the Committee regarding executive compensation matters and may provide legal advice Ms. Taylor to time. Although these recommendations may impact each of contractual arrangements from time they participate in the plans and programs, none of such such officers’ compensation to the extent role of management in the their specific compensation. For officers make recommendations regarding below. Evaluations’’ evaluations, see ‘‘Use of Performance named executive officers’ performance solicits management’s input, it retains and exercises sole authority Although the Committee values and executive officer compensation. to make decisions regarding named Proxy Compensation Measurement group ofretailerscomprisingasubsetcompaniesincludedwithintheAon HewittTotal insufficient marketcomparatorgroupdatawasavailable,theCommitteeusedfromabroader database forthe2015marketcomparatorgroup.For Messrs.Flanigan,Ravener andSparks,forwhom compensation decisions,theCommitteeconsidereddataprovidedbyMeridianusingAon Hewitt’s compensation levelswithinthemarketcomparatorgroup.For the2015namedexecutiveofficer market datafortheCEOtoensurethatCommitteeisawareofanysignificantmovementin prior yeardataafterapplyinganagingfactorrecommendedbyMeridian.Meridianannuallyprovides market comparatorgroupdataprovidedbyMeridian.Inalternatingyears,theCommitteeinsteaduses comparable inbreadth,complexityandscopeofresponsibilitytoours. information theCommitteedeemsappropriate.Suchcompaniesarelikelytohaveexecutivepositions similarity toouroperations,services,revenues,markets,availabilityofinformation,andanyother and Objectives’’).Themarketcomparatorgroupconsistsofcompaniesselectedaccordingtotheir reviews, andutilizesamarketcomparatorgroupwhenmakingcompensationdecisions(see‘‘Philosophy in 2015. 2014 or,forthosewhoremainedemployedin2016andthereforeunderwentaperformanceevaluation, forth inthediscussionbelow. applicable toourotherexecutivevicepresidents.The resultingpromotion-relatedadjustmentsareset short-term andlong-termincentivecompensation,the Committeeconsideredthetargetlevels level ofexperienceandqualificationsrecentcompensation. Inaddition,forMr.Garratt’s mix ofcompensationelementsconsideringthemarket comparatorgroupdataandeachsuchofficer’s Committee evaluatedtheappropriateleveloftotalcompensation aswelltheappropriateleveland year asaresultoftheirpromotions.To determinesuch compensationadjustments,theCompensation instead discussedunder‘‘CEOEmploymentTransition Agreement’’below. 2015 compensationdecisionsandrelatedactionsexcludes thosepertainingtoMr.Dreiling,whichare agreement. Accordingly, withcertainexceptionsthatarespecifically identified,thediscussionbelowof Mr. Dreiling’s2015compensationwerenegotiatedinconnectionwithhisemploymenttransition companies withwhomwecompetebothforbusinessandtalent. component ofthetotalcompensationpackageandisconsistentwithprogramsat equity incentives,benefitsandlimitedperquisites.We believeeachoftheseelementsisanecessary Elements ofNamedExecutiveOfficerCompensation above fromMeridian. market valuesforcomparablepositions,ratherthanindividualprovidedinthedata named executiveofficerpositionsbelowChiefOperatingOfficer,theCommitteeconsidersblended attached tothisproxystatement.Indeterminingtheshort-termcashandlong-termequitytargetsfor For eachnamedexecutiveofficerpositionbelowCEO,theCommitteebienniallyconsiders Our marketcomparatorgroupfor2015compensationdecisionsconsistedof: Use ofMarketBenchmarkingData. None ofthenamedexecutiveofficersreceivedanunsatisfactoryperformanceratingforeither In addition,eachofMessrs.Vasos andGarrattreceivedcompensationadjustmentsduringthe In connectionwithhisplannedretirementonJanuary29,2016,alldecisionsregarding We providecompensationintheformofbasesalary,short-termcashincentives,long-term olrTe ieAdYum! Brands Staples Macy’s RiteAid OfficeDepot The Gap Family Dollar Kohl’s Dollar Tree TJX Companies J.C. Penney AutoZone TM (TCM)database.AlistofsuchcompaniesisincludedasAppendix The CompensationCommitteeapproves,periodically 26 truk LBrands Starbucks Ross Stores Proxy 27 As a result of the evaluations discussed above As a result of the evaluations discussed Our Compensation Committee routinely considers annual Our Compensation Our short-term cash incentive plan, called Teamshare, is called Teamshare, Our short-term cash incentive plan, The Compensation Committee uses adjusted EBIT as the The Compensation Committee uses Base salary promotes our recruiting and retention objectives by reflecting the objectives by and retention promotes our recruiting Base salary Non-Routine Salary Adjustments. Non-Routine Routine Salary Adjustments. Routine 2015 Teamshare Structure. 2015 Teamshare preparation, or consummation of any transaction that results in a Change in Control preparation, or consummation of any transaction that results in a Change 2007 Stock Incentive Plan) or to any (within the meaning of our Amended and Restated instrument securities offering; (b) gain or loss recognized as a result of any derivative early retirement of transactions or hedging activities; (c) gains or losses associated with any significant gains debt; (d) charges resulting from significant natural disasters; and (e) any or losses associated with our LIFO computation; and (c) charges for loss as a result of an individual litigation, judgment or lawsuit settlement; or accounting business restructurings; (d) losses due to new or modified tax, legislation and (f) any changes enacted after the start of fiscal 2015; (e) significant tax settlements; significant unplanned items of a non-recurring or extraordinary nature. Base Salary. (a) (b) Short-Term Cash Incentive Plan. Short-Term (a) • directly related to consideration, negotiation, the impact of (a) costs, fees and expenses • asset impairments; (b) any significant unless disallowed by the Committee, (a) non-cash salaries for comparable positions in the competitive marketplace, rewarding strong performance, and rewarding strong marketplace, in the competitive comparable positions salaries for with our executives. Our employment agreements and predictable income source for providing a stable Committee salary levels, but the Compensation officers set forth minimum base the named executive to time. to increase these levels from time retains sole discretion base salary adjustments in March. In light of the market benchmarking data and each named executive benchmarking data and each named in March. In light of the market base salary adjustments increase officers received the 2.95% base salary performance rating, all such officer’s 2014 satisfactory to Executive who was promoted Ms. Taylor, for our U.S. based employee population. that was budgeted (for a total 13.72% base salary increase in March 2015, received an additional President Vice within a to maintain her total compensation in recognition of her role and adjustment of 16.67%) as Senior and Mr. Garratt, who served of the market median for her new position, reasonable range a total adjustment of 0.29% base salary increase (for at the time, received an additional President Vice Evaluations’’ and 2014 performance (see ‘‘Use of Performance 3.24%) in further recognition of his The Committee chose to forego any adjustments beyond the ‘‘Use of Market Benchmarking Data’’). was determined whether he would succeed base salary until it 2.95% increase to Mr. Vasos’s Mr. Dreiling as CEO. pertaining to their promotions, Mr. Vasos received a salary increase from $791,042 to $1,000,000 and received Vasos pertaining to their promotions, Mr. from $309,708 to $500,000, in each case effective upon the Mr. Garratt received a salary increase his new role and expanded responsibilities and to provide applicable promotion date and to reflect aligned with the market comparator group data for his new compensation that was more appropriately role. established under our shareholder-approved Amended and Restated Annual Incentive Plan. The Annual Incentive Amended and Restated established under our shareholder-approved to receive a cash bonus payment equal to a certain program provides an opportunity Teamshare Dollar General’s achievement of one or more pre-established percentage of base salary based upon for fulfills an important part of our pay Teamshare financial performance targets. Accordingly, the interests of our named executive officers and our performance philosophy while aligning shareholders. because it is a comprehensive measure of our corporate financial performance measure Teamshare purposes of the 2015 Teamshare performance and so is aligned with our shareholders’ interests. For in accordance with U.S. program, adjusted EBIT is defined as our operating profit as calculated generally accepted accounting principles, but excludes: Proxy options, 25%inPSUsandRSUs,whichtheCommittee previouslydeterminedappropriately succeed Mr.DreilingasCEO.Inaddition,intheprior year,thetargetedvaluewasdelivered50%in Mr. Vasos, adecisiontodeferconsiderationofanyincreaseuntilitwasdeterminedwhetherhewould from theprioryearbasedonCommittee’sreview ofthemarketcomparatorgroupdataand,for Benchmarking Data’’).In2015,thetargetedvaluefor eachnamedexecutiveofficerwasunchanged and theappropriatemixofvehiclesinwhichtodeliver suchtargetedvalue(see‘‘UseofMarket targeted equityawardvalueforeachnamedexecutive officerderivedfrombenchmarkinginformation Stock IncentivePlan. or promotion.Equityawardsaremadeunderourshareholder-approvedAmendedandRestated 2007 and considersspecialequityawardsasnecessaryinconnectionwithone-timeeventssuchanewhire Compensation CommitteeconsidersannualequityawardseachMarchatitsregularquarterlymeeting long-term successforshareholderswhilerewardingthemacommitmenttous.The pay forperformancephilosophyandaredesignedtomotivatenamedexecutiveofficersfocuson payment date. payout underthetermsofTeamshare programbecausetheywerenotemployedwithusonthe column oftheSummaryCompensationTable. Messrs.Tehle andSparkswereineligibletoreceivea forth inthetableabove.Suchamountsarereflected‘‘Non-EquityIncentivePlanCompensation’’ Messrs. Vasos, Garratt,FlaniganandRavener andMs.Taylor of109.2%thetargetpercentagesset performance resultat$1.957billion(100.92%oftarget)resultingin2015Teamshare payoutstoeachof determined asaresultoftheevaluationsdiscussedabove. comparator groupdata.Thepromotion-relateddecisionsforMessrs.Vasos andGarrattwere from thoseineffectattheendofprioryearbasedonCommittee’sreviewmarket promotion-related decisions,thesepercentagesforeachnamedexecutiveofficerremainedunchanged Mr. GarrattandMs.Taylor from50%to65%inconnectionwiththeirpromotions.Exceptforthe payout percentageofsalaryforMr.Vasos wasincreasedfrom80%to100%andforeachof performance isequaltotheapplicablepercentageofbasesalaryshownintablebelow.Thetarget straight-line basisbetweenthresholdandtargetmaximum. group. Payouts forfinancialperformancearebasedonactualresultsandinterpolateda in theprioryearTeamshare programtomorecloselyreflectthepracticesofourmarketcomparator 120% ofthetargetlevel,respectively.Thesethresholdandmaximumperformancelevelshadbeenused earned) andmaximum(abovewhichnofurtherbonusmaybeperformancelevelsat90% the targetfor2015Teamshare programandretainedthethreshold(belowwhichnobonusmaybe (a) Long-Term EquityIncentiveProgram. (b) The bonuspayabletoeachnamedexecutiveofficeruponachievingthetargetleveloffinancial The Committeeusedour2015annualfinancialplanadjustedEBITtargetof$1.939billionas 2015 AnnualEquityAwards. 2015 Teamshare Results. l te ae xctv fies65 Percentages forMessrs.Vasos andGarrattMs.Taylor arethoseineffectforeachpositionheld * All othernamedexecutiveofficers Mr. Garratt/Ms.Taylor Mr. Vasos Name salary. levels wouldbecalculatedat50%and300%,respectively,oftheapplicabletargetpercentagebase 2015. For allnamedexecutiveofficers,payoutpercentagesatthethresholdandmaximumperformance during 2015.Theactualpayoutforeachsuchofficerispro-ratedtimeinpositionheld The CompensationCommitteecertifiedtheadjustedEBIT Each year,theCompensationCommitteedetermines a Long-term equityincentivesareanimportantpartofour Long-term 28 Base Salary* Target %of 80/100 50/65 Proxy 0 50 100 300 ROIC 0 <94.75 <18.05 0 % over three years on the April 1 of the three % over three years 3 ⁄ 1 29 Adjusted EBITDA 90 2,112 25 94.75 18.05 25 100 2,347 50 100.00 19.05 50 120 2,817 150 110.50 21.05 150 100 2,347 50.0 100.5 19.14 54.5 104.5 (%) millions) (in (% of Target) (%) (%) (% of Target) (% of Target) <90 <2,112 Result EBITDA Units Result ROIC Units Units Total v. Targetv. ($) Result Earned Target v. Result Earned Earned For PSUs the Committee selects and sets targets for financial performance measures, then selects and sets targets for financial PSUs the Committee For continuing performance target is computed as income (loss) from The adjusted EBITDA PSUs would be earned at each of the threshold, target and The following table shows how the The options are granted with a per share exercise price equal to the fair market value of one equal to the fair market value of with a per share exercise price The options are granted Level Below Threshold Threshold fiscal years following the fiscal year in which the grant is made, subject to continued employment with is made, subject to continued employment the fiscal year in which the grant fiscal years following goals can be earned if specified performance vesting conditions. The PSUs us and certain accelerated fiscal year 2015) and if certain additional the performance period (which was are achieved during are met. vesting requirements levels of performance derived from those targets. The number of establishes threshold and maximum financial performance achieved versus the goals. The Committee PSUs earned depends on the level of 2015 financial (weighted 50%) and ROIC (weighted 50%) as the selected adjusted EBITDA at target levels equal to those used in our 2015 financial plan. performance measures for the PSUs have been used for the PSUs since 2013 to appropriately These financial measures and weightings performance as well as rigorous capital management over balance the emphasis placed upon earnings the long-term. of change in accounting principles plus interest and other financing operations before cumulative effect and depreciation and amortization, but excludes the impact of all costs, net, provision for income taxes, program adjusted EBIT calculation outlined above, as well as items excluded from the 2015 Teamshare The ROIC performance target is calculated as (a) the result of share-based compensation charges. plus (ii) depreciation and amortization, plus (iii) minimum (x) the sum of (i) our operating income, (b) the result of (x) the sum of the averages of: (i) total assets, plus rentals, minus (y) taxes, divided by minus (y) (i) cash, minus (ii) goodwill, minus (ii) accumulated depreciation and amortization, payables, minus (v) accrued liabilities, plus (vi) 8x minimum (iii) accounts payable, minus (iv) other program adjusted EBIT items excluded from the 2015 Teamshare rentals but excludes the impact of all calculation outlined above. earned for financial performance between these levels are maximum performance levels. PSUs program, and the number bonus interpolated in a manner similar to that used for our 2015 Teamshare The following tables also show of PSUs earned could vary between 0% and 300% of the target award. number of PSUs earned. the actual results of the 2015 financial performance measures and the actual aligned with the equity mix among our market comparator group and balanced the incentive and and balanced comparator group among our market the equity mix aligned with goals of these awards. retention 1 of each of vest 25% annually on the April stock on the grant date. The options share of our common executive the grant is made, subject to the named following the fiscal year in which the four fiscal years are vesting provisions. The RSUs employment with us and certain accelerated officer’s continued of our common stock and vest 33 payable in shares Target Maximum 2015 Results Proxy the April1nextfollowingsuchperson’shireorpromotion date. promotion date).Theownershiplevelsaretobeachieved within5yearsofthelaterApril1,2013or guideline isamultipleofannualbasesalaryasineffect onApril1,2013(or,iflater,thehireor adopted shareownershipguidelinesandholdingrequirements forseniorofficers.Theshareownership retirement priortothe2015adjustedEPScertificationdate. result ofmeetingthefinancialtarget.Mr.Dreilingforfeitedremaininghalfasahis grant date.Aspreviouslydisclosed,halfoftheawardvestedafterendour2014fiscalyearasa years 2014and2015,subjecttocertainadjustments,derivedfromourlong-termfinancialplanonthe which couldbeearnedbyachievingcertainearningspershare(‘‘EPS’’)performancetargetsforfiscal Committee awardedMr.Dreiling326,037performance-basedrestrictedsharesofourcommonstock from thegrantdate. to Mr.Garratt’scontinuedemploymentwithus.Theoptionswillterminatenolaterthantenyears installments of25%oneachthefirstfouranniversariesDecember2,2015grantdate,subject Subject tocertainlimitedvestingaccelerationevents,suchoptionsarescheduledvestratablyin stock optionshavinganapproximatevalueof$124,000topurchase7,829sharesourcommonstock. the grantdate.Theoptionswillterminatenolaterthantenyearsfrom Mr. Vasos’ continuedemploymentwithusandholdingrequirementsthroughthefifthanniversaryof 33 certain limitedvestingaccelerationevents,suchoptionsarescheduledtovestratablyininstallmentsof having anapproximatevalueof$5milliontopurchase256,682sharesourcommonstock.Subject special equityawardstoeachofMessrs.Vasos andGarratt. qualifications (see‘‘UseofMarketBenchmarkingData’’),theCompensationCommitteeapproved responsibilities, andconsideringthemarketcomparatorgroupdatainlightoftheirexperience vested PSUswillbesettledinsharesofourcommonstock. named executiveofficer’scontinuedemploymentwithusandcertainacceleratedvestingprovisions.All the remainingtwo-thirdswillvestequallyoneachofApril1,2017and2018,subjectto 1 ⁄ 3 % oneachofthethird,fourthandfifthanniversariesJune3,2015grantdate,subjectto (d) (c) Upon hispromotiontoChiefFinancialOfficer,Mr.Garrattreceivedanawardofnon-qualified Upon hispromotiontoCEO,Mr.Vasos received anawardofnon-qualifiedstockoptions (b) One-third oftheearnedPSUsvestedonlastdayone-yearperformanceperiod,and 2012 Performance-Based Restricted StockAward. 2015 SpecialEquityAwards. Share OwnershipGuidelinesandHoldingRequirements. Messrs.Tehle andSparksforfeitedthe2015PSUsuponleavingDollarGeneral. * Mr. Tehle Mr. Vasos Mr. Sparks Ms. Taylor Mr. Ravener Mr. Flanigan Mr. Garratt Name Officer Level SVP EVP CEO * * In recognitionoftheirnewrolesandincreased 30 Multiple ofBaseSalary In March2012theCompensation 2015 PSUsEarned As shownbelow,wehave 2X 3X 5X 5,650 4,143 4,143 4,143 1,261 0 0 Proxy Our policy prohibits Board members Our policy prohibits 31 As previously disclosed, Mr. Dreiling retired on As previously disclosed, Mr. Dreiling Our named executive officers participate in certain benefits on the officers participate in certain benefits Our named executive Policy Against Hedging and Pledging Transactions. Against Hedging Policy hired or promoted prior to May 28, 2008, a defined contribution Supplemental Executive hired or promoted prior to May 28, the ‘‘CDP/SERP Plan’’). and together with the CDP, Plan (the ‘‘SERP,’’ Retirement maximum of $3 million. base salary in the case of a short-term disability. We replacement of up to 70% of monthly long-term disability plan, which provides 60% of also pay the premiums under a group base salary up to a maximum of $400,000. employees. third party. our entire U.S.-based employee population. levels as the target), target (130%) and maximum (300% of target) base salary percentage date. As prior year, and we waived the requirement to be employed on the payment Each senior officer is required to retain ownership of 50% of all net after-tax shares acquired all net after-tax shares of 50% of to retain ownership officer is required Each senior (e) Benefits and Perquisites. • Deferral Plan (the ‘‘CDP’’) provide a Compensation and, for named executive officers We • for a life insurance benefit equal to 2.5 times base salary up to a pay the premiums We • fees for short-term disability coverage, which provides income pay administrative We • assistance program under a policy applicable to officer-level provide a relocation We • financial and estate planning and tax preparation services through a provide personal We Agreement. CEO Employment Transition Pursuant to the employment transition agreement: • salary increase in 2015 that was budgeted for Mr. Dreiling received the same 2.95% base • program at the same threshold (50% of Mr. Dreiling participated in the 2015 Teamshare from Dollar General until he or she reaches the target ownership level. Administrative details level. Administrative the target ownership he or she reaches General until from Dollar Committee. matters are established by the Compensation pertaining to these and executive officers from (1) pledging Dollar General securities as collateral, (2) holding Dollar securities as collateral, (2) holding from (1) pledging Dollar General and executive officers stock, such their ownership of Dollar General in a margin account, and (3) hedging General securities calls, options equity swaps, collars, puts, trading prepaid variable forward contracts, as entering into or stock. related to Dollar General granted by us) or other derivative instruments (other than those same terms that are offered to all of our salaried employees. We also provide them with limited also We offered to all of our salaried employees. same terms that are purposes, to replace benefit and perquisites for retention and recruiting additional benefits do We their ability to focus on our business. due to regulatory limits, and to enhance opportunities lost any benefits and perquisites other than relocation-related items. not provide tax gross-up payments on perquisites include the following: The primary additional benefits and January 29, 2016 (the ‘‘Retirement Date’’). In light of his announced retirement plans, the Date’’). In light of his announced retirement January 29, 2016 (the ‘‘Retirement performance reviews for Mr. Dreiling for 2014 or 2015, Compensation Committee did not undertake 2015 compensation as part of but rather deemed his performance to be satisfactory and determined his 10, 2015. The terms of the our negotiated employment transition agreement with him, effective March services through the employment transition agreement were negotiated to secure Mr. Dreiling’s to his successor, and we believe the employment Date and ensure a smooth transition Retirement as our CEO until we transition agreement successfully achieved those goals. Mr. Dreiling served and as a as his successor. Thereafter, Mr. Dreiling served as Senior Advisor appointed Mr. Vasos Date. Mr. Dreiling remains subject to the member and Chairman of the Board through the Retirement including non-competition and business protections contained in the employment transition agreement, Date. non-solicitation provisions, for two years following the Retirement Proxy Control asofJanuary29,2016’’below. these employmentseparationsareitemizedunder‘‘Potential Payments uponTermination orChange in General infiscal2015.Payments andotherbenefitstoeachsuchformerofficer inconnectionwith certain periodoftimefollowingachangeincontrolto acceleratevestingofsuchequityawards. do notprovideforsingletriggervestingaccelerationbutratherrequireaterminationeventwithin related tooutstandinglong-termequityawardsgrantedprior2016.The2016annual trigger anyseveranceprovisionapplicabletoournamedexecutiveofficers,exceptfortheprovisions require inouremploymentagreements.Achangecontrol,byitself(‘‘singletrigger’’),doesnot for thepromisesofnon-disclosure,non-competition,non-solicitationandnon-interferencethatwe executive officeragainstcircumstancesoverwhichheorshedoesnothavecontrolandasconsideration provisions forus.We believethatreasonableseverancebenefitsareappropriatetoprotectthenamed executive’s rightsuponaterminationofemploymentinexchangeforvaluablebusinessprotection and anemploymenttransitionagreementwithMr.Dreilingthat,amongotherthings,provideforsuch Severance Arrangements the businessprotectionprovisionssetforthinemploymenttransitionagreement. part, uponvariouseventsspecifiedintheawardagreement,includingbutnotlimitedtobreachof General commonstock,subjecttoreduction,cancellation,forfeitureorrecoupment,inwhole the awardagreement.TheTransition RSUAward ispayableinanequalnumberofsharesDollar event ofdeathordisabilityachangeincontrolpriortopaymentdate,eachcaseasdefined 50% willbepaidonthesecondanniversaryofgrantdate,subjecttoacceleratedpaymentin Date. Fiftypercentoftheawardwaspaidonfirstanniversarygrantdateandremaining As discussedelsewhereinthisproxystatement,Messrs. Dreiling,Tehle andSparksleftDollar As notedabove,wehaveanemploymentagreementwitheachofournamedexecutiveofficers The Transition RSUAward isatime-basedawardthatvestedinfullasoftheRetirement Mr.Dreiling’soutstanding equityawardswillcontinuetovest,ifatall,inaccordancewith • Mr.Dreilingwasentitledtolimitedadditionalperquisites,includingreimbursementforup • Mr.DreilingretainedcoveragethroughtheRetirement Dateunderallemployeebenefit • Inlieuofreceivinganannualequityawardin2015underourlong-termincentiveprogram, • 109.2% ofhis130%target. $1.957 billion(100.92%oftarget)resultingina2015Teamshare payouttoMr.Dreilingof discussed above,theCommitteecertifiedadjustedEBITperformanceresultat the termsofapplicableawardagreements. month. continued toserveasCEO,limitednomorethan100hourstotaland16per spouse’s travelbetweenNashville,Tennessee, andLivermore,California,whilehe through theRetirement Date,andpersonaluseofourcorporateairplaneforhis did notuse),paymentofthepremiumsonhisportablelong-termdisabilityinsurance to $15,000oflegalexpensesforreviewtheemploymenttransitionagreement(whichhe available toallofourotherexecutives. plans andwasentitledtoallwelfare,fringeotherbenefitsperquisitesthatwere (the ‘‘Transition RSUAward’’). Mr. Dreilinginsteadwasawarded57,670RSUs,withanapproximatevalueof$4million 32 Proxy 33 Compensation Committee Report Under Section 162(m) of the Internal Revenue Code, we generally may not take a tax we generally may Code, Internal Revenue 162(m) of the Under Section our Amended and 2007 Stock Incentive Plan and Restated believe that our Amended and We compensation program with the good faith intention The Committee administers our executive Board of Directors reviewed and discussed with The Compensation Committee of our members of the Compensation Committee: This report has been furnished by the • Bryant, Chairman F. Warren •Fili-Krushel D. Patricia •Rhodes, III C. William does not constitute soliciting material and should not The above Compensation Committee Report Considerations Associated with Regulatory Requirements with Regulatory Associated Considerations the persons paid in any taxable year to each of compensation over $1 million deduction for individual (other of the other named executive officers of the fiscal year, our CEO or one who were, at the end or other not deduct any salary, signing bonus Officer). As a result, we may than our Chief Financial officers that causes non-performance-based paid or imputed to such covered annual compensation exempt from performance-based compensation is the $1 million limit. Certain compensation to exceed the deduction limit. we of Section 162(m). As a result, Plan currently satisfy the requirements Annual Incentive Restated our with any (1) payments made under expense realized in connection may deduct compensation rights, and (3) performance-based (2) stock options and stock appreciation program, Teamshare restricted stock or RSUs that solely vest over time are not restricted stock and RSU awards. However, under Section 162(m), and we will be unable to deduct ‘‘performance-based compensation’’ with those time-vested awards to persons covered by compensation expense realized in connection compensation exceeds $1 million. Our Section 162(m) to the extent their non-performance-based Committee from exercising discretion to approve policies do not restrict the Compensation in certain non-deductible compensation expenses but that the compensation packages that may result to be in our shareholders’ best interests. Committee nonetheless determines to the taxation of Code, which relates the Internal Revenue of complying with Section 409A of arrangements. nonqualified deferred compensation S-K and Analysis required by Item 402(b) of Regulation management the Compensation Discussion the Compensation Committee recommended to the Board and, based on such review and discussions, Analysis be included in this document. that the Compensation Discussion and filing under the Securities Act of be deemed filed or incorporated by reference into any other Dollar General specifically incorporates 1933 or the Securities Exchange Act of 1934, except to the extent Dollar General this report by reference therein. Proxy Store Operations Former President, ExecutiveVice Gregory A.Sparks, General Counsel President& Executive Vice Rhonda M.Taylor, Chief People Officer President& Executive Vice Robert D.Ravener, Global SupplyChain President, Executive Vice John W. Flanigan, Chief Financial Officer Former President& ExecutiveVice David M.Tehle, Chief Financial Officer President& Executive Vice John W. Garratt, Senior Advisor Chief ExecutiveOfficer& Former Chairman, Richard W. Dreiling, Chief ExecutiveOfficer Name and Principal PositionName andPrincipal Todd J.Vasos, 3 TheamountsreportedrepresenttherespectiveaggregategrantdatefairvalueofPSUsandRSUs awardedineachfiscal (3) EachnamedexecutiveofficerdeferredundertheCDPandcontributedtoour401(k)Planaportion ofsalaryearnedin (2) Mr.Vasos servedasExecutiveVice President, DivisionPresident andChiefMerchandisingOfficeruntilNovember2013 (1) they areinapplicable. for BonusandChangeinPension Value andNonqualifiedDeferredCompensationEarningsbecause officers ineachofthe2015,2014and2013fiscalyears.We haveomittedfromthistablethecolumns value atthegrantdateisbaseduponprobableoutcomeofsuch conditionsonsuchdate.ThevaluesofthePSUsat computed inaccordancewithFASB ASC Topic 718.ThePSUsaresubjecttoperformanceconditions, andthereported year forwhichcompensationisrequiredtobereportedinthetable foreachnamedexecutiveofficer,incase the fiscal2015salarydeferralsunderCDPareincludedin Nonqualified DeferredCompensationTable. each ofthefiscalyearsforwhichsalariesarereportedabove applicablenamedexecutiveofficer.Theamountsof 2013. Mr.SparksservedasExecutiveVice President, StoreOperations,untilhisdepartureonJune9,2015. joined DollarGeneralinAugust 2008 andMarch2000,respectively,butwerenotnamedexecutiveofficersfor2014or as ExecutiveVice President andChiefFinancialOfficeruntilhisdepartureonJune30,2015.Mr.Ravener andMs.Taylor President andChiefFinancialOfficerinDecember 2015.Hewasnotanamedexecutiveofficerfor2014.Mr.Tehle served Strategy, untilJuly2015whenheassumedtheroleofinterimChiefFinancialOfficer.HewaspromotedtoExecutiveVice on January29,2016.Mr.GarrattjoinedDollarGeneralinOctober2014andservedasSeniorVice President, Financeand Mr. DreilingservedasChairmanandCEOuntilJune2015thenSeniorAdvisor untilhisretirement when hewaspromotedtoChiefOperatingOfficer,thenservedinthatpositionuntilhispromotionCEOJune2015. The followingtablesummarizescompensationpaidtoorearnedbyournamedexecutive (1) 03601865543442—30281,920,432 300,228 2,126,177 823,980 56,960 — — 351,922 374,452 66,702 479,529 625,574 1,558,061 599,657 602,090 620,178 592,530 362,026 635,676 2013 105,319 50,700 1,889,532 233,567 2014 1,882,037 599,657 2015 86,989 — 592,530 372,291 172,598 101,901 515,645 2,347,755 32,819 599,657 2015 256,895 — 136,438 592,530 340,439 374,452 521,999 479,529 625,574 — 599,657 2015 602,090 402,558 452,716 592,530 464,029 374,452 2013 66,150 477,339 479,529 2014 625,574 7,647,175 599,657 2015 602,090 709,413 1,820,433 855,567 592,530 199,223 727,140 2013 72,464 309,572 2014 9,764,152 604,587 2,829,211 303,694 2015 — 681,392 180,374 67,422 — 1,942,422 339,405 2015 1,465,747 — 2,059,459 521,486 3,440,634 2,790,016 1,291,515 422,846 3,503,208 2013 1,323,789 653,913 4,309,102 2014 625,574 1,361,760 2015 821,048 699,549 765,342 2013 2014 059665880259225965899,541 956,548 5,932,285 808,022 926,605 2015 er($) Year Summary CompensationTable aayAad wrsCmesto opnainTotal Compensation Compensation Awards Awards Salary (2) tc pinPa AllOther Plan Option Stock ($) 34 (3) ($) (4) Non-Equity Incentive ($) (5) $ ($) ($) (9) (8) (7) (6) (13) (12) (11) (10) 2,249,734 2,136,560 2,137,177 2,111,866 1,534,578 1,088,846 8,217,871 8,723,001 Proxy d ($) ($) ($) 35 ($) ($) ($) grant date assuming that the highest level of performance conditions will be achieved are as follows for each fiscal year are as follows conditions will be achieved level of performance that the highest grant date assuming officer: applicable named executive be reported for each required to FiscalYear Vasos Mr. Dreiling Mr. Garratt Mr. Tehle Mr. ($) Flanigan Mr. Ravener Mr. Ms. Taylor Sparks Mr. ($) other associated fees, supplies and catering costs. incremental cost of providing premiums paid under our life insurance program; and $56,613 which represents the aggregate for perquisites which certain perquisites, including $53,672 for costs associated with relocation and other amounts premiums paid under our individually did not equal or exceed the greater of $25,000 or 10% of total perquisites, including at sporting events, miscellaneous group long-term disability program, costs associated with attendance by him and his guests as coverage under our business gifts and an administrative fee for coverage under our short-term disability program, as well by the named executive travel accident insurance for which Dollar General incurs no incremental cost for participation relocation included expenses officers in addition to certain other employees. The aggregate incremental cost related to with the sale of his former associated with physical movement of his household goods and costs incurred in connection document preparation home (such as appraisals, inspections, pre-title expenses, title and deed costs, broker’s commission, origination fee). fees, recording fees and legal fees) and the purchase of his new home (including a one percent 201520142013 1,212,033 awards is set forth in Note 10 of the annual the assumptions made in the valuation of these Information regarding 1,234,699 10-K. statements in our 2015 Form consolidated financial 5,268,189 623,987 N/A 3,431,879 718. Information Topic ASC with FASB in the fiscal year indicated, computed in accordance named executive officer 270,561 financial forth in Note 10 of the annual consolidated made in the valuation of these awards is set regarding assumptions N/A 10-K. Form statements in our 2015 888,794 N/A 905,481 Agreement’’ in ‘‘Compensation Discussion and Incentive Plan’’ and ‘‘CEO Employment Transition Cash the ‘‘Short-Term 623,987 888,794 905,481 bonus payments reported officers deferred any portion of the Teamshare Analysis’’ above. None of the named executive above under the CDP. 623,987 888,794 N/A and $51,953 which represents the aggregate incremental cost of providing premiums paid under our life insurance program; 888,794 security services for a limited duration, $19,514 for financial and estate certain perquisites, including $21,470 for personal N/A of legal expenses incurred in connection with the negotiation of his planning services, $5,000 for the reimbursement 888,794 perquisites which individually did not equal or exceed the greater of $25,000 employment agreement and other amounts for N/A paid under our group long-term disability program, costs associated with or 10% of total perquisites, including premiums N/A events, miscellaneous gifts, nominal incremental costs incurred for a guest to attendance by him and his guests at sporting 905,481 fee for coverage under our short-term disability program, as well as accompany him on business and an administrative 623,987 program offered at no incremental cost to Dollar General through a participation in a group umbrella liability insurance executive and coverage under our business travel accident insurance for third party vendor at a group rate paid by the cost for participation by the named executive officers in addition to certain which Dollar General incurs no incremental other employees. paid under our life insurance program; $143,456 for cash dividends the CDP and the 401(k) Plan; $1,692 for premiums stock that were ultimately forfeited with the shares of unvested restricted accumulated on shares of unvested restricted which represents the aggregate incremental cost of providing certain stock upon Mr. Dreiling’s retirement; and $122,771 with personal airplane usage, $19,437 for costs associated with financial perquisites, including $79,539 for costs associated gift, $8,417 for premiums paid under a personal portable long-term and estate planning services, $12,118 for a retirement which individually did not equal or exceed the greater of $25,000 or disability policy, and other amounts for perquisites paid under our group long-term disability program, costs associated with 10% of total perquisites, including premiums fee for coverage under our attendance by him and his guests at sporting events, miscellaneous gifts and an administrative program which is offered at no short-term disability program, as well as participation in a group umbrella liability insurance the executive and coverage under incremental cost to Dollar General through a third party vendor at a group rate paid by for participation by the named our business travel accident insurance for which Dollar General incurs no incremental cost related to the personal airplane executive officers in addition to certain other employees. The aggregate incremental cost (including costs incurred as a result usage was calculated using costs we would not have incurred but for the personal usage crew expenses, landing, parking an of ‘‘deadhead’’ legs of personal flights), including fuel costs, variable maintenance costs, (8)relocation; $478 for Includes $1,979 for our match contributions to the 401(k) Plan; $7,080 for tax gross-ups related to (4)value of stock options awarded to the applicable the respective aggregate grant date fair The amounts reported represent (5) of bonus program for each fiscal year reported. See the discussion our Teamshare amounts earned pursuant to Represents (6) contributions to the CDP and the 401(k) Plan; $1,306 for Includes $32,115 and $14,167, respectively, for our match (7) $54,675 and $13,690, respectively, for our match contributions to Includes $268,303 for our contribution to the SERP and Proxy 1)Includes$1,088and$10,724,respectively,forourmatchcontributionstotheCDP401(k)Plan;$305premiums (13) Includes$52,521forourcontributiontotheSERPand$13,453matchcontributions401(k)Plan;$728 (12) Includes$12,787and$13,309,respectively,forourmatchcontributionstotheCDP401(k)Plan;$737premiums (11) Includes$54,982forourcontributiontotheSERPand$10,560$13,404,respectively,matchcontributions (10) Includes$5,270and$10,289,respectively,forourmatchcontributionstotheCDP401(k)Plan;$437premiums (9) below. Perquisites andpersonalbenefitstotaledlessthan$10,000accordinglyarenotincludedin thetable. programs and(iv)$10,000foroutplacementservices.See‘‘Potential Payments uponTermination orChangeinControl’’ representing twotimesourannualcontributionforhisparticipationinpharmacy,medical,dentalandvisionbenefits level undertheannualbonusprogramforofficerstwofiscalyearsimmediatelypreceding2015,(iii)$19,234 representing twotimestheaveragepercentageofhistargetbonuspaidortobeemployeesatsamejobgrade General equaltothesumof:(i)$420,326representingearnedportionofsalarycontinuationpayments,(ii)$362,303 paid underourlifeinsuranceprogram;$811,863earnedorforfiscal2015inconnectionwithhisdeparturefromDollar accordingly arenotincludedinthetable. for premiumspaidunderourlifeinsuranceprogram.Perquisites andpersonalbenefitstotaledlessthan $10,000and cost forparticipationbythenamedexecutiveofficersinadditiontocertainotheremployees. the executiveandcoverageunderourbusinesstravelaccidentinsuranceforwhichDollarGeneralincursnoincremental insurance programofferedatnoincrementalcosttoDollarGeneralthroughathirdpartyvendorgroupratepaidby administrative feeforcoverageunderourshort-termdisabilityprogram,aswellparticipationinagroupumbrellaliability events, miscellaneousgifts,nominalincrementalcostsincurredforhisspousetoaccompanyhimonbusinessandan long-term disabilityprogram,anexecutivephysical,costsassociatedwithattendancebyhimandhisguestsatsporting did notequalorexceedthegreaterof$25,00010%totalperquisites,includingpremiumspaidunderourgroup perquisites, including$19,514forfinancialandestateplanningservicesotheramountsperquisiteswhichindividually paid underourlifeinsuranceprogram;and$23,867whichrepresentstheaggregateincrementalcostofprovidingcertain executive officersinadditiontocertainotheremployees. our businesstravelaccidentinsuranceforwhichDollarGeneralincursnoincrementalcostparticipationbythenamed incremental costtoDollarGeneralthroughathirdpartyvendoratgroupratepaidbytheexecutiveandcoverageunder short-term disabilityprogram,aswellparticipationinagroupumbrellaliabilityinsuranceprogramofferedatno attendance byhimandhisguestsatsportingevents,miscellaneousgiftsanadministrativefeeforcoverageunderour including premiumspaidunderourgrouplong-termdisabilityprogram,adirecteddonationtocharity,costsassociatedwith other amountsforperquisiteswhichindividuallydidnotequalorexceedthegreaterof$25,00010%totalperquisites, aggregate incrementalcostofprovidingcertainperquisites,including$19,514forfinancialandestateplanningservices CDP andthe401(k)Plan;$673forpremiumspaidunderourlifeinsuranceprogram;$22,282whichrepresents named executiveofficersinadditiontocertainotheremployees. under ourbusinesstravelaccidentinsuranceforwhichDollarGeneralincursnoincrementalcostparticipationbythe no incrementalcosttoDollarGeneralthroughathirdpartyvendoratgroupratepaidbytheexecutiveandcoverage under ourshort-termdisabilityprogram,aswellparticipationinagroupumbrellaliabilityinsuranceprogramofferedat premiums paidunderourgrouplong-termdisabilityprogram,miscellaneousgiftsandanadministrativefeeforcoverage perquisites whichindividuallydidnotequalorexceedthegreaterof$25,00010%totalperquisites,including perquisites, including$8,115forfinancialandestateplanningservices,$8,200aretirementgiftotheramounts paid underourlifeinsuranceprogram;and$16,823whichrepresentstheaggregateincrementalcostofprovidingcertain 36 Proxy (2) ($) Grant (1) Stock Option Awards: Awards: Exercise Date Fair Number Number of or Base of Value of Stock Underlying Option Option of Shares Securities Price of Stock and All Other All Other 37 Grants of Plan-Based Awards in Fiscal 2015 in Fiscal Plan-Based Awards Grants of Estimated Possible Payouts Under Payouts Estimated Possible Under Payouts Estimated Possible Non-Equity Incentive Plan Awards Equity Incentive Plan Awards Date of — — 437,965 875,930 2,627,790— — — — 91,216— 182,433 547,298 — — 244,256 — — 488,513 1,465,538 — — — — — — — — — — — — 165,757 —— — 331,514 994,543 — — 213,532 — — 427,064 — 1,281,193 — — — — — — — — — — — — — — Date Action ($) ($) ($) (#) (#) (#) (#) (#) ($/Sh) 6/3/15 5/27/15 — — — — — — — 256,682 76.00 5,114,569 Grant Committee Threshold Target Maximum Threshold Target Maximum or Units Options Awards Awards 3/17/15 3/17/153/17/15 3/17/153/17/15 3/17/15 — —3/17/15 — 3/17/15 —3/17/15 — 3/17/153/17/15 — — 3/17/153/17/15 — 3/17/1512/2/15 — — 12/1/15 — — — —3/17/15 — — 2,704 3/17/153/17/15 — — 3/17/153/17/15 — — — 5,407 3/17/15 — — —3/17/15 — 16,221 — — — 3/17/153/17/15 — — — 3/17/153/17/15 — — — — 3/17/15 — — — — — — — 604 5,4073/17/15 — — 3/17/153/17/15 — — — 44,786 — — 3/17/15 1,2073/17/15 — — — — 74.72 — 3/17/15 — — — 57,670 — — 3,6213/17/15 — 817,716 — — — 1,983 — — 3/17/153/17/15 404,011 — — — 3/17/153/17/15 — — — 404,011 3,965 — — 3/17/15 — 1,207 — — — — — —3/17/15 11,895 10,002 — — — 1,983 — 3/17/153/17/15 — — 4,309,102 — — 74.72 — — 3/17/153/17/15 — — — 3,965 — — 3/17/15 182,620 — — — — — 7,829 — — — 3,965 11,895 — — 1,983 — 65.35 — — 32,843 90,187 — — 90,187 — — — 121,075 3,965 — 74.72 — — — — — — — — 3,965 599,657 11,895 — — 1,983 — 296,265 — — 32,843 — — — 296,265 — 3,965 74.72 — — — — — — — 3,965 599,657 11,895 — 1,983 — 296,265 — 32,843 — — 296,265 — 3,965 74.72 — — — — — 3,965 599,657 11,895 — 296,265 — 32,843 — — 296,265 74.72 — — — — 3,965 599,657 — 296,265 32,843 — 296,265 74.72 — — 599,657 — 296,265 296,265 The table below shows each named executive officer’s fiscal 2015 Teamshare bonus opportunity bonus Teamshare officer’s fiscal 2015 named executive below shows each The table awards made to our named executive shows information regarding equity The table below also NYSE. the assumptions made in information regarding performance conditions, the value at the grant date is based upon the probable outcome of such conditions. For 10-K. the valuation of these awards, see Note 10 of the annual consolidated financial statements included in our 2015 Form (1) grant as reported by the The per share exercise price was calculated based on the closing market price of one share of our common stock on the date of (2) awards that are subject to equity 718. For Topic ASC equity award, computed in accordance with FASB the aggregate grant date fair value of each Represents Mr. Vasos Mr. Garratt Mr. Tehle Mr. Flanigan —Mr. Ravener — 155,874 — 311,747Ms. Taylor 935,241 — 170,457 — 340,915Mr. Sparks 1,022,744 — — — — — — — — — — — — — Mr. Dreiling — — 889,357 1,778,715 5,336,144 — — — — — — — under ‘‘Estimated Possible Payouts Under Non-Equity Incentive Plan Awards.’’ Actual bonus amounts Actual Awards.’’ Under Non-Equity Incentive Plan Payouts Possible under ‘‘Estimated program are shown in the Summary under the fiscal 2015 Teamshare earned by such officers on a payments, represent prorated payment and, for those who received such Compensation Table levels. See target and maximum performance financial performance between the graduated scale for of such Discussion and Analysis’’ for discussion Cash Incentive Plan’’ in ‘‘Compensation ‘‘Short-Term program. Teamshare Stock 2007 to our Amended and Restated all of which were granted pursuant officers for fiscal 2015, Under Equity Incentive Plan Payouts awards listed under ‘‘Estimated Possible Incentive Plan. The could be earned by each maximum number of PSUs which include the threshold, target and Awards’’ upon the level of achievement of fiscal 2015 financial applicable named executive officer based RSUs payable in represent Other Stock Awards’’ listed under ‘‘All performance measures. The awards basis that vest over time, and the awards listed under ‘‘All shares of common stock on a one-for-one based upon include non-qualified stock options that vest over time, in each case Other Option Awards’’ continued employment by Dollar General. See ‘‘Long-Term the applicable named executive officer’s Agreement’’ in ‘‘Compensation and ‘‘CEO Employment Transition Equity Incentive Program’’ further discussion of these awards. Discussion and Analysis’’ above for Name Proxy Mr. Flanigan Name Mr. Garratt table allcolumnsfor‘‘EquityIncentivePlanAwards’’ becausetheyareinapplicable. retroactively adjustedtoreflectthereversesplitandarereflectedbelow.We haveomittedfromthis shares outstandingunder,ourequityawardsexistingatthetimeofreversestocksplitwere of 1shareforeach1.75sharescommonstockoutstanding.Theexercisepricesof,andnumber such options,asrequiredbythetermsofoptions.InOctober2009,wecompletedareversesplit special dividendpaidtoourshareholdersinSeptember2009reflecttheeffectsofsuchon 2015. The$7.9975exercisepriceinthetablebelowreflectsanadjustmentmadeconnectionwitha Restated 2007StockIncentivePlanandheldbyournamedexecutiveofficersasoftheendfiscal Mr. Ravener Mr. Tehle Mr. Dreiling Mr. Vasos The tablebelowsetsforthinformationregardingawardsgrantedunderourAmendedand euiisUdryn euiisUdryn Option SecuritiesUnderlying Securities Underlying nxrie pin nxrie pin xrieOto tc htHv ofStockThat StockThatHave Option Exercise UnexercisedOptions Unexercised Options Exercisable Number of 28,080 28,080 13,746 13,746 13,746 28,080 49,019 18,094 9,483 1,440 6,953 6,953 1,260 3,094 (#) Outstanding EquityAwards at2015Fiscal Year-End — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (1) (17) (16) (15) (4) (2) (1) (13) (4) (3) (2) (1) (4) (2) Option Awards nxrial $ Date ($) Unexercisable Number of 256,682 44,786 32,843 32,843 10,002 40,454 37,801 28,443 13,746 20,859 13,746 20,859 13,746 57,056 (#) 7,829 1,440 9,360 9,360 9,360 3,771 — — — — — — — — — — — — — — — — — — — — 12/19/2018 08/28/2018 7.9975 7.9975 — — — — (6) (5) (4) (3) (2) (1) (5) (4) (2) (1) (5) (4) (2) (1) (14) (5) (13) (4) (2) (1) 38 rc xiainNtVse HaveNotVested NotVested Expiration Price 52 03/24/2020 25.25 60 06/03/2025 03/17/2025 76.00 03/18/2024 74.72 12/03/2023 57.91 03/18/2023 56.48 03/20/2022 48.11 45.25 47 03/17/2025 03/18/2024 74.72 03/18/2023 57.91 03/20/2022 48.11 45.25 03/17/2025 03/18/2024 74.72 03/18/2023 57.91 03/20/2022 48.11 45.25 12/02/2025 03/17/2025 65.35 12/03/2024 74.72 03/18/2024 66.69 03/18/2023 57.91 03/20/2022 48.11 45.25 — — — — — — — — — — — — — — — — — — — — — — — — — 3,965 3,456 2,172 2,762 3,304 — — — — — 1,207 — 5,407 4,714 2,172 3,766 4,506 — — — — — 3,965 3,456 2,172 2,762 3,304 — — — — — — ubro hrsMarketValue of Number ofShares rUiso SharesorUnits or Unitsof (#) 854 854 854 840 — — — — — — — — — — — — — — — — — — — — — — — — (11) (10) (9) (8) (7) (12) (11) (10) (9) (8) (7) (12) (11) (10) (9) (8) (7) (12) (9) (12) Stock Awards 297,613 259,407 163,030 207,316 247,998 297,613 259,407 163,030 207,316 247,998 405,849 353,833 163,030 282,676 338,220 64,101 64,101 90,597 63,050 64,101 ($) — — — — — — — — — — — — — — — — — — — — — — — — (12) (11) (10) (9) (8) (7) (12) (11) (10) (9) (8) (7) (12) (9) (12) (11) (10) (9) (8) (7) Proxy (7) (8) (9) (10) (11) (12) — — — — — — — 6,981 ($) 75,510 17,789 78,963 207,316 297,613 Stock Awards (7) (8) (9) (10) (11) (12) 3 — — — — — — — 237 (#) or Units of Shares or Units Number of SharesNumber of of Value Market % per year on each of the third, 3 ⁄ 1 ——— —— 1,006 2,762 — 1,052 3,965 — — — — — — 45.2548.11 03/20/2022 54.48 03/18/2023 57.91 05/28/2023 74.72 03/18/2024 03/17/2025 25.25 03/24/2020 Price Expiration Not Vested Have Not Vested 39 (1) (2) (19) (4) (5) — — — — — — — 1,182 1,498 3,454 6,351 (#) 32,843 Number of Unexercisable ($) Date Option Awards (18) (1) (2) (19) (4) — — — — — — — ————9 (#) 1,501 3,454 2,119 3,547 10,284 Number of Exercisable Unexercised Options Unexercised Options Exercise Option Have Stock That That of Stock Securities Underlying Underlying Securities Option fourth and fifth anniversaries of June 3, 2015, subject to certain accelerated vesting provisions as described in ‘‘Potential fourth and fifth anniversaries of June 3, 2015, or Change in Control’’ below. upon Termination Payments ROIC targets for fiscal 2013 and scheduled to vest on March 18, 2016, subject to and versus certain adjusted EBITDA Change in Control’’ below. or upon Termination Payments in ‘‘Potential certain accelerated vesting provisions as described the number of such units by the closing market price of one share of our The market value was computed by multiplying common stock on January 29, 2016. and ROIC targets for fiscal 2014 and scheduled to vest 50% per year on March 18, 2016 versus certain adjusted EBITDA upon Termination Payments and March 18, 2017, subject to certain accelerated vesting provisions as described in ‘‘Potential of such units by the closing or Change in Control’’ below. The market value was computed by multiplying the number market price of one share of our common stock on January 29, 2016. and ROIC targets for fiscal 2015 and scheduled to vest 50% per year on April 1, 2017 and versus certain adjusted EBITDA or upon Termination Payments April 1, 2018, subject to certain accelerated vesting provisions as described in ‘‘Potential units by the closing market price Change in Control’’ below. The market value was computed by multiplying the number of of one share of our common stock on January 29, 2016. or Change in upon Termination Payments 2016, subject to certain accelerated vesting provisions as described in ‘‘Potential by the closing market price of Control’’ below. The market value was computed by multiplying the number of such units one share of our common stock on January 29, 2016. as described in ‘‘Potential on March 18, 2016 and March 18, 2017, subject to certain accelerated vesting provisions market value was computed by multiplying the number of or Change in Control’’ below. The upon Termination Payments 2016. such units by the closing market price of one share of our common stock on January 29, anniversaries of March 20, 2012, subject to certain accelerated vesting provisions as described in ‘‘Potential Payments upon Payments accelerated vesting provisions as described in ‘‘Potential anniversaries of March 20, 2012, subject to certain Control’’ below. or Change in Termination upon Payments accelerated vesting provisions as described in ‘‘Potential anniversaries of March 18, 2013, subject to certain Control’’ below. or Change in Termination Payments certain accelerated vesting provisions as described in ‘‘Potential anniversaries of December 3, 2013, subject to in Control’’ below. or Change upon Termination upon Payments accelerated vesting provisions as described in ‘‘Potential anniversaries of March 18, 2014, subject to certain Control’’ below. or Change in Termination or upon Termination Payments vesting provisions as described in ‘‘Potential 2018 and 2019, subject to certain accelerated Change in Control’’ below. (7) of shares of our common stock, earned as a result of our performance PSUs, to be paid in an equal number Represents (8) PSUs, to be paid in an equal number of shares of our common stock, earned as a result of our performance Represents (9) PSUs, to be paid in an equal number of shares of our common stock, earned as a result of our performance Represents (10) RSUs, to be paid in an equal number of shares of our common stock, which are scheduled to vest on March 18, Represents (11) RSUs, to be paid in an equal number of shares of our common stock, which are scheduled to vest 50% per year Represents Mr. Sparks (1) with a vesting schedule of 25% per year on each of the first four These options are part of a grant of time-based options (2) with a vesting schedule of 25% per year on each of the first four These options are part of a grant of time-based options (3) with a vesting schedule of 25% per year on each of the first four These options are part of a grant of time-based options (4) with a vesting schedule of 25% per year on each of the first four These options are part of a grant of time-based options (5) with a vesting schedule of 25% per year on April 1 of 2016, 2017, These options are part of a grant of time-based options (6) with a vesting schedule of 33 These options are part of a grant of time-based options Ms. Taylor Name Proxy 4 Value realizediscalculatedbymultiplyingthe grossnumberofsharesvestedbytheclosingmarketpriceourcommon (4) Represents thegrossnumberofsharesacquireduponvestingPSUsandRSUs,withoutdeductionforthatmay (3) Value realizediscalculatedbymultiplyingthegrossnumberofoptionsexerciseddifferencebetweenmarket (2) Represents thegrossnumberofoptionsharesexercised,withoutdeductionforthatmayhavebeensurrenderedor (1) Mr. Sparks Ms. Taylor Mr. Ravener Mr. Flanigan Mr. Tehle Mr. Garratt Mr. Dreiling Mr. Vasos Name Theseoptionsarepartofagranttime-basedwithvestingschedule25%peryearoneachthefirstfour (19) Theseoptionsvestedinincrementsof1,072sharesonJanuary28,2011;1,286eachMarch24,2011, (18) Theseoptionsvestedinincrementsof6,516sharesonFebruary 1,2013;13,422sharesoneachofMarch24,2013, (17) Theseoptionsvestedinincrementsof208sharesonApril3,2013;1,02922,4,680July11, (16) TheseoptionsvestedonAugust 25,2013. (15) Theseoptionsarepartofagranttime-basedwithvestingschedule25%peryearoneachthefirstfour (14) Theseoptionsarepartofagranttime-basedwithvestingschedule25%peryearoneachthefirstfour (13) Represents RSUs,tobepaidinanequalnumberofsharesourcommonstock,whicharescheduledvestthree (12) the valueassociatedwithsharesunderlyingRSUsthatvestedonJanuary 29,2016butaresubjecttodelayedpayment. stock onthevestingdate.Asdiscussedinmoredetailfootnote 3, forMr.Dreiling,thereportedvaluerealizedincludes each casesubjecttocertainacceleratedpaymentprovisions. be paid50%onMarch17,2016and2017, 22,005RSUsscheduledtobepaidonJuly30,2016,in underlying RSUsthatvestedonJanuary29,2016butaresubjectto delayedpayment,including57,670RSUsscheduledto have beenwithheldtosatisfyapplicabletaxwithholdingobligations.For Mr.Dreiling,thereportedamounts includeshares price ofourcommonstockonthedateexerciseandprice. withheld tosatisfytheexercisepriceorapplicabletaxwithholdingobligations. Termination orChangeinControl’’below. anniversaries ofMay28,2013,subjecttocertainacceleratedvestingprovisionsasdescribedin‘‘Potential Payments upon March 24,2014;and214sharesonJanuary30,2015. February 3,2012andMarch24,2012;1,285sharesoneachofFebruary 1,2013,March24,January31,2014and January 31,2014andMarch24,2014;2,237shareson30,2015. 2013; 11,428sharesonAugust 25,2013;and749sharesonDecember11,2013. upon Termination orChangeinControl’’below. anniversaries ofDecember2,2015,subjecttocertainacceleratedvestingprovisionsasdescribedin‘‘Potential Payments upon Termination orChangeinControl’’below. anniversaries ofDecember3,2014,subjecttocertainacceleratedvestingprovisionsasdescribedin‘‘Potential Payments multiplying thenumberofsuchunitsbyclosingmarketpriceoneshareourcommonstockonJanuary29,2016. described in‘‘Potential Payments uponTermination orChangeinControl’’below.Themarketvaluewascomputedby equal installmentsonApril1,2016,2017and2018,subjecttocertainacceleratedvestingprovisionsas Option ExercisesandStockVested DuringFiscal 2015 curdo au elzdAqie nValue Realized Acquiredon Value Realized Acquired on Number of xrieo xrieVsigonVesting Vesting onExercise Exercise 9,8 32686267721,638,854 296,797 13,206,896 398,880 Shares (#) 87914629692521,179 624,837 521,179 6,902 8,283 1,426,209 6,902 1,437,362 48,779 1,399,187 28,449 48,779 (1) Option Awards — — — — 40 ($) (2) ,0 188,803 624,837 31,600 2,509 8,283 709,937 421 — — 9,414 — — Number of Shares (#) (3) Stock Awards ($) (4) Proxy 0 0 (5) ($) ——— 618,838 333,425 208,177 — 533,614 —— 2,880,653 2,108 (4) ($) 10 (116,204) 25 (3) ($) — (2) 1,088 5,270 (135,029) (1,980,227) 41 ($) Fiscal 2015 Fiscal 2015 Fiscal Pension Benefits Pension (1) Nonqualified Deferred Compensation Nonqualified Deferred 2,188 52,521 (6,662) 2,083 ($) 26,10011,678 12,787 (10,107) 21,869 65,541 (13,666) 62,387 322,977 18,456 46,330 32,115 (10,963) 15,479 Executive Registrant Aggregate Aggregate Aggregate in Last FY in Last FY in Last FY Distributions at Last FYE Contributions Contributions Earnings Withdrawals/ Balance Pursuant to the CDP, each named executive officer may annually elect to defer up to 65% of Pursuant to the CDP, we make an annual contribution equal to a certain percentage of a Pursuant to the SERP, We have omitted the Pension Benefits table because it is inapplicable. Benefits have omitted the Pension We is participation in our CDP/SERP Plan each named executive officer’s Information regarding ‘‘Salary’’ for 2015. preferential earnings. made under the CDP/SERP Plan. ($1,475,241); ($374,751); Mr. Dreiling ($2,183,084); Mr. Tehle Mr. Vasos prior to 2015 in a Summary Compensation Table: ($0); and Mr. Sparks ($102,228). ($31,747); each of Mr. Garratt and Ms. Taylor Mr. Flanigan ($149,969); Mr. Ravener Mr. Ravener Ms. Taylor Mr. Sparks Mr. Flanigan Mr. Garratt Mr. Tehle Mr. Dreiling 401(a)(17) of the Internal his base salary if his compensation exceeds the limit set forth in Section pay if his compensation equals or exceeds the highly Code, and up to 100% of his bonus Revenue currently match base Code. We compensated limit under Section 414(q)(1)(B) of the Internal Revenue salary offset by the amount of pay deferrals at a rate of 100%, up to 5% of annual salary, with annual are 100% vested in all match-eligible salary under the 401(k) Plan. All named executive officers compensation and matching deferrals and earnings on those deferrals. employed in an eligible job participant’s annual salary and bonus to all participants who are actively hired a given year. Persons grade on January 1 and continue to be employed as of December 31 of are not eligible to and Sparks, Garratt, Ravener after May 27, 2008, including Messrs. Vasos, The contribution percentage is based on age, years of service and job grade. participate in the SERP. 7.5% for each of Mr. Flanigan The fiscal 2015 contribution percentage was 9.5% for Mr. Dreiling and because he was not was not eligible for a fiscal 2015 SERP contribution Mr. Tehle and Ms. Taylor. are 100% vested in their employed as of December 31, 2015. All applicable named executive officers respective SERP amounts. (1) as officer are reported in the Summary Compensation Table All of the reported amounts for each named executive (2) Table. Other Compensation’’ in the Summary Compensation as ‘‘All Reported (3) because they do not represent above-market or Compensation Table The amounts shown are not reported in the Summary (4) and Sparks’s respective service termination pursuant to prior elections Each distribution was made following Messrs. Tehle’s (5) reported as compensation to the named executive officer for years Of the amounts reported, the following were previously Mr. Vasos included in the following table. The material terms of the CDP/SERP Plan are described after the the CDP/SERP Plan are described table. The material terms of included in the following Discussion and Analysis’’ above. in ‘‘Compensation see ‘‘Benefits and Perquisites’’ table. Please also Name Proxy employment transitionagreement.SuchRSUsaresubject toacceleratedpaymentintheeventofdeath the awardagreement,includingbreachofany the businessprotectionprovisionssetforthinhis reduction, cancellation,forfeitureorrecoupment,inwhole orinpart,uponvariouseventsspecified 50% oftheawardoneachfirsttwoanniversaries oftheMarch17,2015grantdate,subjectto Termination DuetoRetirement.’’ RSUs (otherthantheTransition RSUAward) weretreated asdescribedbelowunder‘‘Payments Upon Incentive PlanCompensation’’columnoftheSummary CompensationTable. participants asdiscussedin‘‘CompensationDiscussionandAnalysis’’reflectedthe‘‘Non-Equity financial performancegoalandpayableatthesametimeaspaymentsaremadetootherTeamshare Teamshare bonuspaymenttotheextentearnedasaresultofachievementfiscal2015 agreement withus,effectiveMarch10,2015,Mr.Dreilingwasentitledtoreceiveafiscal2015 Payments toMr. Dreiling therewith. fiscal year,wediscussbelowonlythepaymentseachhasreceivedorwillreceiveinconnection each ofMessrs.Dreiling’s,Tehle’s andSparks’semploymentendedonorbeforetheendofour2015 extent alreadydiscussedunder‘‘NonqualifiedDeferredCompensationFiscal2015’’above.Because generally toallsalariedemployeesanddoesnotdiscriminateinfavorofourexecutiveofficersorthe These benefitsandpaymentsarediscussedbelowexcepttotheextentabenefitorpaymentisavailable provide forbenefitsorpaymentsuponcertainemploymentterminationchangeincontrolevents. our namedexecutiveofficersparticipate,ineachcaseaseffectattheendof2015fiscalyear, Plan liabilitiesincurredonorafterOctober15,2007areunfunded. trust deferralsintotheCDP/SERPPlanbetweenJuly6,2007andOctober15,2007.All through July6,2007werefullyfundedintoanirrevocablerabbitrust.We alsofundedintotherabbi participant’s CDPaccount.Account balancesarepayableincash. ‘‘unforeseeable emergencyhardship’’in-servicelumpsumdistributionofvestedamountscreditedtothe in whichtheamountsweredeferred.Inaddition,aparticipantwhoisactivelyemployedmayrequestan CDP account,providedthatthedateofdistributionisnosoonerthan5yearsafterendyear participants mayelecttoreceiveanin-servicelumpsumdistributionofvestedamountscreditedthe following August ifemploymentceasesduringthelast6monthsofacalendaryear.However, February ifemploymentceasesduringthefirst6monthsofacalendaryearorispayablein termination ofemployment.Aparticipant’sCDP/SERPbenefitnormallyispayableinthefollowing vested amountwillbepayableatthetimedesignatedbyCDP/SERPPlanuponparticipant’s (c) acombinationoflumpsumandinstallments.Otherwise,paymentismadeinsum.The balance tobepaidincashby(a)lumpsum,(b)monthlyinstallmentsovera5,10or15-yearperiod and whoseCDPaccountbalanceorSERPexceeds$25,000mayelectforthat funds areidenticaltotheofferedinour401(k)Plan. or fundsselectedbytheCompensationCommitteeitsdelegate.BeginningonAugust 2,2008,these which istheninvestedattheparticipant’soptioninanaccountthatmirrorsperformanceofafund The Transition RSUAward fullyvestedonJanuary29, 2016andisscheduledtobepaidas Mr. Dreiling’soutstandingstockoptions,2013PSUs and 2014PSUs(definedbelow), Mr. DreilingretiredonJanuary29,2016.Pursuanttothetermsofhisemploymenttransition Our agreementswithournamedexecutiveofficersandcertainplansprogramsinwhich As aresultofourchangeincontrolwhichoccurred2007,theCDP/SERPPlanliabilities A participantwhoceasesemploymentwithatleast10yearsofserviceorafterreachingage50 The amountsdeferredorcontributedtotheCDP/SERPPlanarecreditedaliabilityaccount, Potential Payments uponTermination orChangeinControl 42 Proxy 43 If a named executive officer’s employment with us terminates due to If a named executive officer’s employment Mr. Ravener and Ms. Taylor have options outstanding that were Taylor and Ms. Mr. Ravener If such termination had occurred before January 29, 2016 for the 2015 PSUs, a If such termination had occurred before January 29, 2016 for the 2015 pro-rated portion (based on months employed during the one year performance the period) of one-third of the 2015 PSUs earned based on performance during (unless entire performance period would have become vested and nonforfeitable paid previously vested or forfeited) as of January 29, 2016 and would have been 29, 2016 on April 1, 2016. If such termination had occurred on or after January received for the 2015 PSUs and before April 1, 2016, the participant would have the one-third of the 2015 PSUs earned that are described above, without proration. 18, If such termination occurs after March 18, 2014 for the 2013 PSUs, March earned 2015 for the 2014 PSUs or April 1, 2016 for the 2015 PSUs, any remaining   and exercisable with respect to 100% of the shares subject to the option immediately prior and exercisable with respect to 100% may be exercised until the first anniversary of the to such event, and such vested options employment termination date. to each named (‘‘2014 PSUs’’) and, except for Mr. Dreiling, fiscal 2015 (‘‘2015 PSUs’’) executive who was employed by us at the time of the applicable award. Finally, upon his retirement Mr. Dreiling forfeited the unvested portion of the performance- Mr. Dreiling forfeited the Finally, upon his retirement for provisions substantially as described to various business protection Mr. Dreiling is subject a and his departure was treated as termination date was June 30, 2015, service Mr. Tehle’s was June 9, 2015. He received or will receive severance Mr. Sparks’ service termination date Pre-2012 Equity Awards. Post-2011 Equity Awards. Post-2011 • vested Any outstanding unvested stock option shall become immediately Stock Options. • Share Units. PSUs were awarded in fiscal 2013 (‘‘2013 PSUs’’), fiscal 2014 Performance or disability (in which event payment will be made within 90 days following such event) or a change in event) or a change following such made within 90 days payment will be (in which event or disability to an in each case prior in control), made upon the change payment will be which event the control (in award in control are defined in the equity payment date. Disability and change originally scheduled agreement. awarded to him in 2012. based restricted stock Termination—Voluntary Voluntary Upon officers below under ‘‘Payments the other named executive the Employment Agreement.’’ to Renew or After Failure Good Reason with Termination Tehle to Mr. Payments reason under all applicable plans and agreements. His outstanding voluntary termination without good Termination— Upon Voluntary below under ‘‘Payments equity awards were treated as described without Good Reason.’’ Termination Voluntary Sparks to Mr. Payments equity awards were treated, as described under ‘‘Payments payments and benefits, and his outstanding without Cause.’’ Termination Upon Involuntary Termination—Involuntary Due to Death or Disability Upon Termination Payments granted prior to 2012. All such options are fully vested and generally may be exercised for a period of granted prior to 2012. All such options due to death or disability (as defined in the applicable award one year from termination of employment expired earlier. agreement) unless such options have death or disability (as defined in the applicable award agreement): death or disability (as defined in the Proxy for namedexecutiveofficers. discussed belowunder‘‘Payments UponVoluntary Termination’’) underanyofourplansoragreements any othervoluntaryterminationwithoutgoodreason(asdefinedundertherelevantagreements,andas after 2011,retirement(asdefinedintheapplicablegoverningdocument)isnottreateddifferentlyfrom Payments UponTermination DuetoRetirement earned forthatfiscalyear). requires thataparticipantremainemployedonthepaymentdatetobeentitledanyincentivebonus earned forthatfiscalyearunderthetermsofourTeamshare program(whichotherwisegenerally last dayofafiscalyear,namedexecutiveofficerwillreceivepaymentforhisorherincentivebonus determination bytheSocialSecurityAdministration. Additionally, intheeventofdeathonorafter payment intheeventofdisabilityuntilassoonreasonablypracticableafterreceipt the endofcalendarquarterinwhichsuchterminationeventoccurs,providedthatwemaydelay fully vested(totheextentnotalreadyvested)andwillbepayableinalumpsumwithin60daysafter (as definedintheCDP/SERPPlan),anamedexecutiveofficer’sPlanbenefitwillbecome $20,000 permonthunderourlong-termdisabilityinsuranceprogram.Intheeventofdeathor governing document),anamedexecutiveofficerwouldreceive60%ofcoveredmonthlyearningsupto to 2.5timessuchofficer’sannualbasesalary.Inaddition,intheeventofdisability(asdefined payments underourgrouplifeinsuranceprograminanamount,uptoamaximumof$3million,equal StockOptions.Theportion ofthestockoptionsthatwouldhavebecomevestedand • In theeventanamedexecutiveofficerretires: Except asprovidedimmediatelybelowwithrespecttostockoptions,PSUsandRSUsawarded Other Payments. Restricted StockUnits.Anyoutstanding RSUswillbecomefullyvestedandnonforfeitable • Performance ShareUnits. • prior tothefifthanniversaryofretirementdate,but nolaterthanthe10 payment. Theofficermayexercisetheoptiontoextent vestedandexercisableanytime unvested andunexercisableontheterminationdateshall immediatelyexpirewithout to theextentsuchportionhasnototherwiseterminated).Otherwise,anyoptionwhichis disability, suchportionshallinsteadbecomeimmediatelyvestedandexercisable(butonly during suchoneyearperiodachangeincontroloccursortheofficerdiesincurs extent suchportionhasnototherwiseterminatedorbecomeexercisable).However,if date thatfallswithintheoneyearperiodfollowingretirement(butonlyto retirement dateandshallbecomevestedexercisableontheanniversaryofgrant remained employedwithusshallremainoutstandingforaperiodofoneyearfollowingthe exercisable withintheoneyearperiodfollowingretirementdateifsuchofficerhad 2015) or90days(forRSUsgrantedinfollowingthedateofdeathdisability. upon suchdeathordisabilityandwillbepaidwithin30days(forRSUsgrantedpriorto of thegrantdate.  the dateofterminationemployment. earned butunvestedPSUsfromsuchawardsshallbeforfeitedandcancelledon the dateofsucheventandshallbepaidwithin30daysthereafter.Otherwise,any but unvestedPSUsfromsuchawardsshallbecomevestedandnonforfeitableasof PSUs fromsuchawardwouldhavebeenidenticalto the vestingandpaymentof on orafterJanuary29,2016andbeforeApril1,2016, thevestingandpaymentof For the2015PSUs,ifsuchretirementhadoccurredbeforeJanuary29,2016, or In theeventofdeath,anamedexecutiveofficer’sbeneficiarywillreceive 44 th anniversary Proxy anniversary of th 45 PSUs in the death and disability scenarios discussed above for the 2015 PSUs above for scenarios discussed the death and disability PSUs in time periods. during these but before March 18, 2016 had occurred after March 19, 2015 If such retirement April 1, 2017 for the or occurs after April 2, 2016 but before for the 2014 PSUs such awards would one-third of earned PSUs from 2015 PSUs, an additional on the retirement date. If nonforfeitable and would be paid become vested and March 18, 2016 for the after March 19, 2015 but before such retirement occurs 2017 for the 2014 PSUs, 19, 2016 but before March 18, 2013 PSUs, after March 2015 PSUs, an additional 2017 but before April 1, 2018 for the and after April 2, vested and PSUs from such awards would become one-third of earned Otherwise, any earned would be paid on the retirement date. nonforfeitable and and cancelled on the from such awards shall be forfeited but unvested PSUs retirement date.  vested and nonforfeitable on the next immediately following vesting date if such officer had vested and nonforfeitable on the next will become vested and nonforfeitable upon such remained employed through such date occurs on a vesting date no accelerated vesting retirement (provided that if the retirement be entitled only to the portion of the RSUs that will occur, but rather the officer shall date) and will be paid six months and one day were scheduled to vest on such vesting following the retirement date. day after termination of employment but contingent upon the execution and effectiveness of day after termination of employment but contingent upon the execution th If a named executive officer resigns (1) with good reason (as defined in the applicable If a named executive officer resigns (1) with good reason (as defined in • RSUs that would have become Stock Units. The one-third of the outstanding Restricted executive officer upon voluntary termination vary The payments to be made to a named the Employment Agreement. to Renew Failure or After with Good Reason Termination Voluntary a release of certain claims against us and our affiliates in the form attached to the employment a release of certain claims against us and our affiliates in the form attached agreement: the grant date. To the extent Mr. Vasos exercises prior to June 3, 2020 any of the options awarded on exercises the extent Mr. Vasos the grant date. To hold any net shares acquired upon the exercise until June 3, 2020. June 3, 2015, he will be required to in (2) below, his or her equity If a named executive officer resigns under the circumstances described below. without Good Reason’’ Termination will be treated as described under ‘‘Voluntary written notice within Vasos) employment agreement) after giving 30 days (90 days in the case of Mr. and opportunity for us to 30 days after the event purported to give rise to the claim for good reason or (2) within 60 days (90 days in cure any such claimed event within 30 days after receiving such notice, of our failure to offer to renew, extend or replace his or her employment the case of Mr. Vasos) after the end of the agreement before, at or within 6 months (one year in the case of Mr. Vasos) arrangement or the resignation agreement’s term (unless we enter into a mutually acceptable severance than for good reason), then is a result of the named executive officer’s retirement or termination other generally on or beginning in each case the named executive officer will receive the following benefits on the 60 Payments Upon Voluntary Termination Upon Voluntary Payments occurs with or without ‘‘good reason’’ (as defined in the depending upon whether the resignation to offer to renew, extend or replace the applicable applicable agreement) or after our failure circumstances. employment agreement under certain with good reason (as defined in the applicable equity award If a named executive officer resigns then unvested equity awards and generally may exercise any vested agreement), he or she will forfeit all resignation date, but in no event later than the 10 options up to 90 days following the Proxy instead bepayableinasinglelumpsumonthe60 that wouldotherwisehavebeenpaidduringthe60dayperiodafteremploymentterminationwill protection provisions: under theapplicableemploymentagreementorrelease,whichincludefollowingbusiness other rightswehaveavailableunderlaworequity,uponamaterialbreachofanycontinuingobligation paid atthenormalpaymentdateprovidedforunderapplicableemploymentagreement. end ofthesix-monthperiodinalumpsum,andanypaymentsdueafterwouldbe Section 409AoftheInternalRevenue Code.Anypaymentrequiredtobedelayedwouldpaidatthe employment maybedelayedforsixmonthsfollowingterminationtocomplywiththerequirementsof forth above. will bepaidintheformofsalarycontinuationpaymentsoverremaining24monthperiodasset Note thatanyamountsowedtoanamedexecutiveofficerintheformofsalarycontinuation Reasonable outplacementservicesforoneyearor,ifearlier,untilsubsequentemployment. • Alumpsumpaymentof twotimesourannualcontributionthatwouldhavebeenmadein • Alumpsumpaymentoftwotimestheaveragepercentagenamedexecutiveofficer’s • Continuationofbasesalary,generallyasineffectimmediatelybeforethetermination,for • For aperiodoftwoyearsaftertheemploymentterminationdate,namedexecutive • Thenamedexecutiveofficermustmaintaintheconfidentialityof,and refrain from • The namedexecutiveofficerwillforfeitanyunpaidseveranceamounts,andweretain However, incertaincases,someorallofthepaymentsandbenefitsprovidedontermination participation inourpharmacy,medical,dentalandvisionbenefitsprograms. respect oftheplanyearinwhichsuchterminationoccursfornamedexecutiveofficer’s us inthefiscalyearanddenominatorofwhichis365. fraction, thenumeratorofwhichisnumberdaysduringhewasemployedby our performanceforthefiscalyearinwhichhisemploymentterminates,multipliedbya receive forthefiscalyearoftermination,ifsuchterminationhadnotoccurred,basedon of apro-rataportiontheannualbonus,ifany,thathewouldhavebeenentitledto lump sumpayment,payablewhenannualbonusesarepaidtoourotherseniorexecutives, respect ofthefiscalyearinwhichhisterminationoccurs).Mr.Vasos alsowillreceivea Mr. Vasos, suchlumpsumpaymentinstead willequaltwotimeshisannualtargetbonusin years immediatelyprecedingthefiscalyearinwhichterminationdateoccurs(for executive officer(ifany)undertheannualbonusprogramforofficerstwofiscal target bonuspaidortobeemployeesatthesamejobgradelevelasnamed termination date. base salaryisearnedasaresultofsubsequentemploymentduringthe24monthsafter salary continuationshallbeforfeitedor,ifpaid,subjecttorecoveryandtheextentany exception ofMr.Vasos, theamountofany paymentorentitlementtoofthebase 24 monthspayableinaccordancewithournormalpayrollcycleandprocedures.With the engaged whollyorinmaterialpartthebusiness which weareengaged(including,but independent contractorarrangementbetweenthenamed executiveofficerandanyperson position’’ meansanyemployment,consulting,advisory, directorship,agency,promotionalor specific planstoopenstoreswithinsixmonthsofthat date.For thispurpose, ‘‘competitive maintain storesatthetimeofhisorhertermination date oranystateinwhichwehave officer maynotacceptorworkina‘‘competitiveposition’’ withinanystateinwhichwe years followingtheemploymentterminationdate. a tradesecretunderapplicablelawand(b)confidential informationforaperiodoftwo disclosing orusing,our(a)tradesecretsforanyperiod oftimeastheinformationremains th 46 dayaftersuchterminationdateandtheremainder Proxy If a named executive officer resigns without good If a named executive officer resigns 47 Upon an involuntary termination without cause, a Upon an involuntary termination without anniversary of the grant date. To the extent Mr. Vasos anniversary of the grant date. To Upon an involuntary termination for cause, a named Upon an involuntary termination for th but in any event prior to the 10 he will be exercises prior to June 3, 2020 any of the options awarded on June 3, 2015, 2020. required to hold any net shares acquired upon the exercise until June 3, with Termination (except for the notice and cure provisions) as described under ‘‘Voluntary above. the Employment Agreement’’ to Renew or After Failure Good Reason to such options immediately prior to the change in control. until the period, and the named executive officer has remained continuously employed not limited to, those entities identified in the applicable employment agreement), or any agreement), applicable employment identified in the to, those entities not limited the named retail business, if basics the discount consumable planning to enter person then are substantially similar to those he required to perform services which executive officer is by us. directed at any time while employed or she provided or employees to cease recruit or induce any of our exempt officer may not actively us. employment with or entity who has a business or communicate with any person officer may not solicit officer had contact while and with whom the named executive relationship with us relationships or result in an it would likely interfere with our business employed by us, if advantage over us. unfair competitive The payments to be made to a named executive officer upon involuntary termination vary The payments to be made to a named for Cause. Involuntary Termination without Cause. Involuntary Termination • forfeit all then unvested equity awards. Will • to 90 days following the termination date, Generally may exercise any vested options up • same severance payments and benefits on the same terms and conditions receive the Will regardless of Upon a change in control (as defined under the applicable governing document), • exercisable as to 100% of the shares subject All options will vest and become immediately • the completion of the applicable performance If the change in control occurs on or before •the named executive employment termination date, a period of two years after the For •the named executive employment termination date, a period of two years after the For without Good Reason. Termination Voluntary anniversary of the grant date. To the extent Mr. Vasos exercises prior to June 3, 2020 any of the extent Mr. Vasos the anniversary of the grant date. To th depending upon whether termination is with or without ‘‘cause’’ (as defined in each named executive depending upon whether termination equity award agreement, as applicable). officer’s employment agreement or equity grants and all vested but unexercised options. executive officer will forfeit all unvested named executive officer: a Change in Control After Payments whether the named executive officer’s employment terminates: options awarded on June 3, 2015, he will be required to hold any net shares acquired upon the exercise options awarded on June 3, 2015, he until June 3, 2020. Upon Involuntary Termination Payments reason, he or she will forfeit all then unvested equity awards and all vested but unexercised options that reason, he or she will forfeit all then executive officer generally may exercise any vested options that were granted prior to 2012. The named following the resignation date, but in any event prior to the were granted after 2011 up to 90 days 10 Proxy change incontrolscenariooccurs. shown aremerelyestimates.We cannotdetermineactualamountstobepaiduntilatermination or favor ofourexecutiveofficers.Otherthanwithrespect toMessrs.DreilingandSparks,theamounts exclude anyamountsthatareavailablegenerallytoall salariedemployeesanddonotdiscriminatein SERP Planbenefits,see‘‘NonqualifiedDeferredCompensationFiscal2015’’above.Thetablesalso CDP/SERP Planbenefitsthathadvestedpriortotheevent.For moreinformationregardingtheCDP/ exclude earnedbutunpaidbasesalarythroughtheemploymentterminationdateandequityawards increased, acceleratedorotherwisepaidowedasaresultoftheapplicablescenarioand,result, our stockontheNYSEJanuary29,2016($75.06).Thetablesbelowreportonlyamountsthatare scenario waseffectiveasof,January29,2016.For stockvaluations,wehaveusedtheclosingpriceof control scenariosbasedoncompensation,benefit,andequitylevelsineffecton,assumingthe table reflectspotentialpaymentstoeachnamedexecutiveofficerinvariousterminationandchange in thetablebecausehereceivednosuchpaymentsasaresultofhisservicetermination,following actual paymentsbasedupontheirrespectiveterminationscenarios,andMr.Tehle, whoisnotincluded the excisetax.We wouldnotpayanyadditionalamounttocovertheexcisetax. payments andbenefitswouldnotbecappedsuchofficerresponsibleforthepaymentof $50,000 morethanitwouldbewithoutthepaymentsbeingcapped.Insuchcase,officer’s rules (the‘‘excisetax’’)unlessheorshesignsareleaseandtheafter-taxbenefitwouldbeatleast less thantheamountthatwouldtrigger‘‘goldenparachute’’excisetaxunderfederalincome consideration allpaymentsandbenefitscoveredbySection280GoftheInternalRevenue Code)of$1 each namedexecutiveofficer’semploymentagreementprovidesforcappedpayments(takinginto options heldatthetimeofterminationwithcause). years fromtheretirementdatetoexercisevestedoptionsandwillforfeitanybutunexercised retirement orinvoluntaryterminationwithcause(inwhichrespectivecases,heshewillhavefive involuntarily terminatedwithintwoyearsofthechangeincontrolunderanyscenariootherthan date inwhichtoexercisevestedoptionsthatweregrantedafter2011ifheorsheresignsis Employment Agreement.’’However,anamedexecutiveofficerwillhaveoneyearfromthetermination described aboveunder‘‘Voluntary Termination withGoodReason orAfterFailure toRenew the change incontrol,anamedexecutiveofficerwillreceivethesameseverancepaymentsandbenefitsas Except forMessrs.DreilingandSparks,whomaseparatetableisprovidedbelowtoreflect In theeventofachangeincontrolasdefinedSection280GInternalRevenue Code, Upon aninvoluntaryterminationwithoutcauseoraresignationforgoodreasonfollowingthe AllCDP/SERPPlanbenefitswillbecomefullyvested(totheextentnotalreadyvested). • AlloutstandingRSUswillbecomevestedandnonforfeitablebepaiduponthe • Ifthechangeincontroloccursaftercompletionofapplicableperformanceperiod,and • and bepaiduponthechangeincontrol. immediately bedeemedearnedatthetargetlevelandshallvest,becomenonforfeitable change incontrol,allunvestedPSUsthathavenotpreviouslybeenforfeitedwill change incontrol. will immediatelyvest,becomenonforfeitableandbepaiduponthechangeincontrol. control, allpreviouslyearnedbutunvestedPSUsthathavenotbeenforfeited the namedexecutiveofficerhasremainedcontinuouslyemployeduntilchangein 48 Proxy Without Involuntary ($) ($) ($) ($) Good Good With With in Change Without Voluntary Involuntary Voluntary Cause or (1) 49 n/a n/a n/a n/a 10,623 n/a 10,623 n/a n/a n/an/a n/an/a n/a 20,822 n/a n/a n/a n/an/a n/an/a 20,822 n/a n/a 10,623 n/a 8,500 n/a n/a n/a n/an/a n/an/a 10,623 n/a 8,500 n/a 20,102 n/a 8,500 n/a n/a n/a n/a n/a 20,102 n/a 8,500 19,705 8,500 n/a n/a 19,705 8,500 n/a n/a n/an/a n/a n/a 8,500 n/a n/a n/a 8,500 8,500 n/a 8,500 ($) ($) ($) Death Disability Retirement Reason Reason Cause Control 956,548 n/a n/a n/a 4,956,548 n/a 4,956,548 233,181199,223 233,181 n/a n/a n/a n/a340,439 n/a n/a 1,275,716 n/a n/a n/a n/a 1,275,716 292,178 372,291 n/a 1,223,695 n/a n/a n/a 1,223,695 809,535362,026 809,535 n/a 1,338,186 n/a n/a n/a n/a n/a 1,338,186 n/a n/a 1,339,502 n/a n/a 1,041,245 1,339,502 2,500,0005,933,141 2,476,593 n/a n/a n/a n/a1,250,000 n/a 4,975,6711,682,404 233,181 n/a n/a n/a 7,885,811 n/a n/a n/a n/a1,200,000 n/a3,570,623 1,305,038 2,030,184 1,270,082 n/a n/a n/a n/a n/a 1,597,217 1,242,818 n/a n/a1,312,000 n/a n/a3,714,475 2,030,184 3,590,956 n/a n/a n/a n/a n/a n/a n/a1,313,000 n/a 1,366,7882,484,561 809,535 n/a n/a n/a n/a 3,714,925 n/a n/a n/a n/a n/a 1,367,707 n/a n/a n/a 2,408,953 n/a n/a Various Termination Events as of January 29, 2016 Events as of Termination Various Potential Payments to Named Executive Officers Upon Occurrence of Upon Occurrence Executive Officers to Named Payments Potential (2) (2) (2) (2) (2) 2016. (1) on January 29, Mr. Flanigan was the only named executive officer other than Mr. Dreiling who was eligible for retirement (2) Estimated based on information provided by our outplacement services provider. Name/Item Mr. Vasos Mr. Due to EventEquity Vesting Cash Severance 2,476,593 2,476,593 n/a n/a n/a n/a 2,910,140 Health Payment Outplacement Cash Severance Health Payment Outplacement Health Payment Outplacement Life Insurance Proceeds Health Payment Outplacement Life Insurance Proceeds Cash Severance Health Payment Outplacement Life Insurance Proceeds Total Garratt Mr. Due to Event Equity Vesting Total Flanigan Mr. Due to EventEquity Vesting Cash Severance 2,030,184 2,030,184Total 1,270,082 Ravener Mr. n/a Due to EventEquity Vesting Cash Severance n/a 2,030,184 2,030,184Total n/aMs. Taylor Due to Event Equity Vesting n/a 2,348,138 n/aTotal n/a n/a 2,348,138 Life Insurance Proceeds Life Insurance Proceeds Proxy December 2015. to thecompensationprogramsinceDecember2015and reachedthesameconclusionasitin The CompensationCommitteerolledforwardthisassessment inMarch2016toconsideranychanges compensation programwerenotreasonablylikelyto have amaterialadverseeffectonDollarGeneral. risk-aggravating factorswereoffsetbyrisk-mitigating factors, thatthenetriskscreatedbyouroverall assessment, theCompensationCommitteeconcluded, afterconsideringthedegreetowhichidentified encourage excessiverisk-takingorotherwisegenerate risktoDollarGeneral.Asaresultofthat included areviewofourcompensationprogramsfor certain designfeatureswhichcouldpotentially executive officers,toassesstherisksthatmayarisefrom ourcompensationprograms.Theassessment and management,reviewedourcompensationpolicies andpracticesforallemployees,including our CompensationCommittee. that hasoneormoreofitsexecutiveofficersservingasadirectorDollarGeneralmember compensation committee(orotherboardperformingequivalentfunctions)of,anyentity officers serves,orinthepastfiscalyearhasserved,asadirectorof,memberof this documententitled‘‘Transactions withManagementandOthers.’’Also,noneofourexecutive General oranyofoursubsidiaries;(3)hadrelationshiprequiringdisclosureunderthesection of DollarGeneraloranyoursubsidiaries;(2)wasattimepriorto2015anofficer Committee during2015.Noneofthesepersons(1)wasatanytime2015anofficeroremployee 2 See‘‘Payments toMr.Sparks’’above. (2) See‘‘Payments toMr.Dreiling’’above. (1) Total Life InsuranceProceeds Outplacement Health Payment Cash Severance Equity Vesting DuetoEvent Mr. Sparks Total Life InsuranceProceeds Outplacement Health Continuation Cash Severance Fiscal 2015Teamshare Payout Equity Vesting DuetoEvent Mr. Dreiling In December2015,ourCompensationCommittee,withinputfromitscompensationconsultant Each ofMessrs.BryantandRhodesMs.Fili-KrushelwasamemberourCompensation (2) (1) Compensation CommitteeInterlocksandInsiderParticipation Actual Payments toMessrs.DreilingandSparks Compensation RiskConsiderations 50 Termination Without Connection with Payments in Connection with Involuntary $1,705,582 10,000 19,234 $ $ $1,676,348 Payments in $12,410,148 1,942,422 $ $10,467,726 Retirement Cause n/a n/a n/a n/a n/a n/a Proxy 9.0% 7.9% 7.0% Street, New York, nd 25,701,473 22,673,678 20,122,432 Beneficial Ownership Class of Percent Amount and Nature of 51 Security Ownership of Certain Beneficial Owners Security Ownership (3) (2) (1) For purposes of the tables below, a person is a ‘‘beneficial owner’’ of a security over which that below, a person is a ‘‘beneficial owner’’ purposes of the tables For The following table shows the amount of our common stock beneficially owned as of March 17, stock beneficially owned as of March shows the amount of our common The following table to dispose or direct the disposition of 25,701,473 shares. The address of BlackRock, Inc. is 55 East 52 shares. The address of BlackRock, to dispose or direct the disposition of 25,701,473 New York 10055. All information is based solely on Amendment No. 1 to Statement on Schedule 13G filed on January 26, 10055. All information is based solely on Amendment No. 1 to New York 2016. agreement with GoS, GIC has been given Under the investment management (‘‘MAS’’). of Singapore Monetary Authority attached to, and the disposition of, any shares managed on behalf of GoS. the sole discretion to exercise the voting rights dispose of the 17,057,026 securities beneficially owned by it. GIC shares As such, GIC has the sole power to vote and GIC disclaims membership in a group. beneficially owned by it with MAS. power to vote and dispose of 5,616,152 securities is based solely on Singapore 068912. All information #37-01, Capital Tower, Road, The address of GIC is 168, Robinson 2, 2016. 13G filed on February Amendment No. 1 to Statement on Schedule direct the disposition of 19,543,480 shares, and shared power to dispose or over 30,500 shares, sole power to dispose or Vanguard Company, a wholly owned subsidiary of The Fiduciary Trust direct the disposition of 578,952 shares. Vanguard shares as a result of its serving as investment manager of collective trust Group, Inc., is the beneficial owner of 458,352 Group, Inc., is the subsidiary of The Vanguard Ltd., a wholly-owned Investments Australia, accounts, and Vanguard investment offerings. The of its serving as investment manager of Australian beneficial owner of 217,588 shares as a result 19355. All information is based solely on Blvd, Malvern, Pennsylvania is 100 Vanguard Group address of The Vanguard 11, 2016. Amendment No. 2 to Statement on Schedule 13G filed on February (1) has sole power to vote or direct the vote of 22,776,178 shares and sole power Inc., through various subsidiaries, BlackRock, SECURITY OWNERSHIP SECURITY that person has the right to acquire voting or investment power or which person has or shares have sole noted, to our knowledge these persons within 60 days. Unless otherwise beneficial ownership computations are based on 286,669,916 power over the shares listed. Percentage voting and investment 17, 2016. stock outstanding as of March shares of our common Inc. BlackRock, 2016 by those known by us to beneficially own more than 5% of our common stock. by us to beneficially own more 2016 by those known Name and Address of Beneficial Owner Limited GIC Private Group The Vanguard (2) Limited (‘‘GIC’’) GIC Private and the is a fund manager with two clients—the Government of Singapore (‘‘GoS’’) (3)shared power to vote or direct the vote Group has sole power to vote or direct the vote over 555,340 shares, The Vanguard Proxy contacted atourexecutiveoffices. and allofourcurrentexecutiveofficersasagroup.Unlessotherwisenoted,thesepersonsmaybe 2016 byourcurrentdirectorsandnamedexecutiveofficersindividually 4 Mr.Rhodessharesvotingandinvestmentpowerover23,597withhisspouse,AmyRhodes, aspowerofattorney (4) Mr.Calbertsharesvotingandinvestmentpowerover38,000withhisspouse,BarbaraCalbert, asco-trusteeof (3) Sharetotalshavebeenroundedtothenearestwholesharesimplifyreporting. (2) IncludesthefollowingnumberofsharesunderlyingRSUs(includingadditionalcreditedasaresultdividend Denoteslessthan1%ofclass.(1) * All currentdirectorsandexecutiveofficersasagroup Gregory A.Sparks Rhonda M.Taylor Robert D.Ravener John W. Flanigan David M.Tehle John W. Garratt Richard W. Dreiling Todd J.Vasos David B.Rickard William C.Rhodes,III Paula A.Price Patricia D.Fili-Krushel Sandra B.Cochran Michael M.Calbert Warren F. Bryant Name ofBeneficialOwner (15 persons) The followingtableshowstheamountofourcommonstockbeneficiallyownedasMarch17, of TheAmyPlunkettRhodesRevocable LivingTrust, datedJuly30,2014. The MichaelandBarbaraCalbert2007JointRevocable Trust. group butnotforthepurposeofcomputingpercentageownershipanyotherperson. outstanding forthepurposeofcomputingpercentagestockownedbyeachnamedpersonand and allcurrentdirectorsexecutiveofficersasagroup(19,380).Thesharesdescribedinthisnoteareconsidered PSUs aresettled:Mr.Vasos (4,991);Mr.Garratt(421);Flanigan(6,920);Ravener (3,887);Ms.Taylor (1,977); settleable within60daysofMarch17,2016overwhichthepersonwillnothavevotingorinvestmentpoweruntil group (402,636).Further includesthefollowingnumberofsharesunderlyingearnedPSUsthatareor couldbe Mr. Flanigan(38,352);Ravener (150,385);Ms.Taylor (30,808);andallcurrentdirectorsexecutiveofficersasa (6,255); Ms.Price (1,201);Mr.Rickard(14,845);Vasos (89,661);Mr.Dreiling (135,311);Mr.Garratt(3,762); options areexercised:eachofMessrs.Bryant,CalbertandRhodes(15,088);Ms.Cochran(6,426);Fili-Krushel exercisable within60daysofMarch17,2016overwhichthepersonwillnothavevotingorinvestmentpoweruntil group (38,651).Alsoincludesthefollowingnumberofsharessubjecttooptionseithercurrentlyexercisableor (403); Messrs.FlaniganandRavener (5,223);Ms.Taylor (2,086);andallcurrentdirectorsexecutiveofficersasa (4,179); Ms.Cochran(2,050);Price andMr.Rhodes(1,682);Rickard(5,190);Vasos (6,332);Mr.Garratt which thepersonwillnothavevotingorinvestmentpoweruntilRSUsaresettled:Mr.Bryant(3,011);Calbert equivalents earnedwithrespecttotheRSUs)thatareorcouldbesettleablewithin60daysofMarch17,2016over (1) (1)(2) (1)(2)(3)(4) (1) (1)(2) (1) (1)(2) (1) (1)(2) (1) (1)(2)(3) (1) (1)(2)(4) (1) Security OwnershipofOfficersandDirectors 52 mutadNtr fPercent of Amount andNatureof eeiilOnrhpClass Beneficial Ownership 168,885 152,049 144,601 630,172 37,853 53,877 25,573 41,342 10,735 12,107 69,371 25,357 4,586 3,446 — — — — * * * * * * * * * * * * * * Proxy 53 year ended January 29, 2016, year ended January Standards No. 16, Auditing be discussed by the Statement on matters required to Public Company Accounting Committees, as adopted by the Audit Communication with Oversight Board, regarding the Oversight Board of the Public Company Accounting applicable requirements Committee firm’s communications with the Audit independent registered public accounting concerning independence, and management. The Audit Committee of our Board of Directors has: Committee of The Audit • statements for the fiscal with management the audited financial reviewed and discussed • public accounting firm, the our independent registered LLP, Young discussed with Ernst & • by LLP required the written disclosures and the letter from Ernst & Young received • LLP their independence from Dollar General and its with Ernst & Young discussed to Committee unanimously recommended the Audit Based on these reviews and discussions, charter, the Committee has the responsibilities and powers set forth in its While the Audit Committee: members of the Audit This report has been furnished by the •B. Rickard, Chairman David • Bryant F. Warren • Sandra B. Cochran • A. Price Paula constitute soliciting material and should not be does not Committee Report The above Audit AUDIT COMMITTEE REPORT AUDIT General’s audited financial statements be included in the Annual the Board of Directors that Dollar 29, 2016 for filing with the SEC. 10-K for the fiscal year ended January on Form Report that Dollar does not have the duty to plan or conduct audits or to determine Committee Audit accurate, or in accordance with generally accepted General’s financial statements are complete, management and independent auditor have this responsibility. accounting principles. Dollar General’s and regulations or Committee also does not have the duty to assure compliance with laws The Audit with the policies of the Board of Directors. under the Securities Act of deemed filed or incorporated by reference into any other Dollar General filing specifically incorporates 1933 or the Securities Exchange Act of 1934, except to the extent Dollar General this report by reference therein. Proxy Committee willconsiderthatresultinselectingourindependent auditorinthefuture. a voteeitherfororagainstthefirm.Ifshareholdersdonotratifythisappointment,ourAudit Young LLPasourindependentauditorforthe2016fiscalyear.TheAudit Committeeisnotboundby What doestheBoardofDirectorsrecommend? and areexpectedtobeavailablerespondappropriatequestions. annual meeting.Theserepresentativeswillhavetheopportunitytomakeastatementiftheysodesire Will representativesofErnst&Young LLPattendtheannualmeeting? shareholders. that thecontinuedretentionofErnst&Young LLPisinthebestinterestsofDollarGeneralandour served inthatcapacitysinceOctober2001.TheAudit CommitteeandtheBoardofDirectorsbelieve Ernst &Young LLPasourindependentauditorforthe2016fiscalyear.Ernst&Young LLPhas Who hastheAudit Committeeselectedastheindependentregistered publicaccountingfirm? factors. independence andlevelofobjectivityprofessionalskepticism;reasonablenessfees;other the firmandauditteam;effectivenesssufficiencyofcommunicationsinteractions; services andsufficiencyofresourcesthathavebeenprovided;theskills,knowledgeexperience the inputofmanagement,entailsconsiderationabroadrangefactors,includingquality independent auditor’squalifications,performanceandindependence.Theevaluation,whichincludes Does theAudit Committeeevaluatetheindependentauditorandleadauditpartner? management suchcandidates’qualificationsandexperience. Committee interviewedtheleadauditpartnercandidates,andAudit Committeediscussedwith Was theAudit Committeeinvolvedintheleadauditpartnerselectionprocess? oversight oftheindependentauditorthatisretainedtoauditourfinancialstatements. Who isresponsiblefortheselectionofindependentauditor? RATIFICATION OFAPPOINTMENTAUDITORS PROPOSAL 2: Our BoardunanimouslyrecommendsthatyouvoteFORtheratificationofErnst& Representatives ofErnst &Young LLPhavebeenrequestedand areexpectedtoattendthe After conductingtheevaluationprocessdiscussedabove,Audit Committeeselected Yes. TheAudit Committeeannuallyevaluatestheleadauditpartner,aswell Yes. Prior totheselectionofcurrentleadauditpartner,ChairmanAudit The Audit Committeeisdirectlyresponsiblefortheappointment,compensation,retentionand 54 Proxy 1,920 30,000 2,071,205 1,652,136 55 1,995 32,000 2,272,623 1,910,042 2015 Aggregate Fees Billed ($)2015 Aggregate Fees Billed ($) Fees 2014 Aggregate (2) (4) (1) (3) financial statements and review of financial statements included in our Forms 10-Q and services that are normally included in our Forms financial statements and review of financial statements filings or engagements. provided in connection with statutory and regulatory of our financial statements. The fees for each year relate to the related to the performance of the audit or review employee benefit plan audit. to work opportunity tax credit assistance and foreign sourcing offices’ 2015 and 2014, respectively, for work related such year are for tax advisory services related to inventory. tax compliance. The remaining tax fees for each Service Fees Audit Fees Audit-Related Fees Tax All Other Fees The Audit Committee pre-approves all audit and permissible non-audit services provided by Committee pre-approves all audit and permissible non-audit services The Audit The table below lists the aggregate fees for professional audit services rendered to us by the aggregate fees for professional The table below lists (1) fees billed for professional services for the audit of our annual for each fiscal year the aggregate Represents (2) fees billed for assurance and related services that are reasonably for each fiscal year the aggregate Represents (3) services, which represented $1,805,042 and $1,547,136 in 2015 and 2014 fees relate primarily to tax compliance (4) accounting research tool. 2015 and 2014 fees are for a subscription fee to an on-line How does the Audit Committee pre-approve services provided by the independent auditor? Committee How does the Audit the Committee considers and, when appropriate, our independent auditor. Where feasible, meetings after disclosure by management and the pre-approves services at regularly scheduled the proposed services, the estimated fees (when available), and independent auditor of the nature of not impair the independence of the independent auditor. The their opinions that the services will member if the Chairman is unavailable) may pre-approve Committee’s Chairman (or any Committee and must report to the Committee at its next meeting with such services between Committee meetings, The Committee pre-approved 100% of the services provided by respect to all services so pre-approved. LLP during 2015 and 2014. Ernst & Young Ernst & Young LLP for the audit of our consolidated financial statements for the past two fiscal years of our consolidated financial statements LLP for the audit Ernst & Young during the past two fiscal years: LLP Young other services rendered by Ernst & and fees billed for What fees were paid to the independent auditor in 2015 and 2014? to the independent auditor in 2015 What fees were paid FEES PAID TO AUDITORS FEES PAID Proxy have compliedwiththerequirementsofourBylaws. proxy materialswillnotbeconsideredatanyannualmeetingofshareholdersunlesssuchproposals 100 MissionRidge,Goodlettsville,Tennessee 37072.Shareholderproposalsthatarenotincludedinour annual meetingofshareholders. even thoughtheproposalisnotdiscussedinourproxymaterialssentconnectionwith2017 proxies heldbyourmanagementmayprovidethediscretiontovoteagainstsuchshareholderproposal Bylaws. IfwedonotreceiveaproperlysubmittedshareholderproposalbyFebruary 24,2017,thenthe than thecloseofbusinessonFebruary 24,2017,andcomplywiththeadvancenoticeprovisionsofour must deliverwrittennoticetousnoearlierthanthecloseofbusinessonJanuary25,2017andlater our receiptbyDecember9,2016.To introduceothernewbusinessatthe2017annualmeeting,you shareholders, eligibleshareholdersmustsubmitproposalsthatcomplywithrelevantSECregulationsfor FOR 2017ANNUAL MEETING SHAREHOLDER PROPOSALS Form 4. beneficially ownedaftersuchtransaction,whichwerepreviouslyincorrectlyreportedonatimely-filed Dollar GeneralcommonstockunderlyinganRSUandoptiongrantthenumberofsecurities a resultofanadministrativeoversight,Mr.Vasos filed1lateForm 4tocorrectthenumberofshares 1 lateForm 4toreport1openmarketpurchaseofsharesDollarGeneralcommonstock;and(2)as timely basis,thereportsrequiredbySection16(a)ofExchangeAct, exceptthat(1)Ms.Price filed representations thatnoForm 5reportswererequired,webelievethateachofthosepersonsfiled,ona Based solelyuponareviewofthesereportsfurnishedtousduringandwithrespect2015,orwritten shareholders tofilereportsofownershipandchangesinonForms 3,4and5withtheSEC. REPORTING COMPLIANCE SECTION 16(a)BENEFICIALOWNERSHIP Shareholder proposalsshouldbemailedtoCorporateSecretary,DollarGeneralCorporation, To beconsideredforinclusioninourproxymaterialsrelatingtothe2017annualmeetingof The U.S.securitieslawsrequireourexecutiveofficers,directors,andgreaterthan10% 56 Proxy Appendix A Appendix (TCM) TM Macy’s Inc. McDonald’s Corporation Meijer, Inc. Group, Inc. The Neiman Marcus Office Depot, Inc. OfficeMax Incorporated Inc. John’s International, Papa 1 Imports, Inc. Pier PVH Corp. Rent-A-Center Rite Aid Corporation Safeway Inc. Sears Holdings Corporation Inc. Sonic Automotive, Starbucks Corporation INC. SUPERVALU Corporation Target Inc. Ulta Salon, Cosmetics & Fragrance, Stores, Inc. Wal-Mart Company Walgreen Inc. Markets, Food Wegmans Company The Wendy’s Inc. Williams-Sonoma, YUM Brands, Inc. Zale Corporation 57 Database Used for Certain Officers Database Used for Subset of Companies from Aon Hewitt Total Compensation Measurement Aon Hewitt Total Companies from Subset of Academy Sports & Outdoors, Ltd.Academy ANN INC. Belk, Inc. Best Buy Co., Inc. Lowe’s Inc. Companies, Inc. BJ’s Wholesale Club, Stores The Bon-Ton Inc. Brinker International Corporation CDW Stores Retail The Children’s Place Coach, Inc. CVS Delhaize America Inc. PetSmart, Inc. Domino’s Pizza, DSW Inc. Eddie Bauer Inc. Corporation Follett FTD, Inc. Company Genuine Parts The Home Depot, Inc. Inc. Hot Topic, Inc. Hy-Vee, Company, Inc. J. C. Penney Jack in the Box Inc. Stores, LLC Jo-Ann The Kroger Co. L.L. Bean, Inc.

10-K

10-K អ No Smaller reporting company អ 61-0502302 (I.R.S. Employer Identification No.) New York Stock Exchange New York Name of the exchange on which registered Non-accelerated filer អ 100 MISSION RIDGE FORM 10-K Washington, D.C. 20549 D.C. Washington, GOODLETTSVILLE, TN 37072 UNITED STATES UNITED Commission file number: 001-11421 Commission file number: For the fiscal year ended January 29, 2016 For (Address of principal executive offices, zip code) (Address SECURITIES EXCHANGE ACT OF 1934 SECURITIES EXCHANGE (Exact name of registrant as specified in its charter) (Exact name of registrant DOCUMENTS INCORPORATED BY REFERENCE BY DOCUMENTS INCORPORATED Accelerated filer អ Accelerated Registrant’s telephone number, including area code: (615) 855-4000 Registrant’s Title of each class Title DOLLAR GENERAL CORPORATION DOLLAR GENERAL TENNESSEE អ ፤ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE TO SECTION PURSUANT REPORT ANNUAL អ ፤ No (State or other jurisdiction of incorporation or organization) No SECURITIES AND EXCHANGE COMMISSION EXCHANGE AND SECURITIES No No Common Stock, par value $0.875 per share Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated Indicate by check mark whether the registrant is a large accelerated filer, an accelerated Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Indicate by check mark if the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of Indicate by check mark whether the registrant not contained S-K is Regulation Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of 10-K is incorporated by reference to the Registrant’s III of this Form Certain of the information required in Part The registrant had 286,468,872 shares of common stock outstanding as of March 15, 2016. The registrant had 286,468,872 shares of common stock outstanding as of March Securities registered pursuant to Section 12(g) of the Act: None 12(g) of the Act: Securities registered pursuant to Section 405 of the Securities is a well-known seasoned issuer, as defined in Rule Indicate by check mark if the registrant site, if has submitted electronically and posted on its corporate Web Indicate by check mark whether the registrant Exchange 12b-2 of the Rule Indicate by check mark whether the registrant is a shell company (as defined in and held by non-affiliates as of The aggregate fair market value of the registrant’s common stock outstanding Securities registered pursuant to Section 12(b) of the Act: Securities registered pursuant to Section Act. Yes អ Yes Act. 12 months (or for such shorter period that the registrant was of 1934 during the preceding the Securities Exchange Act ፤ been subject to such filing requirements for the past 90 days. Yes required to file such reports), and (2) has proxy or information statements herein, and will not be contained, to the best of registrant’s knowledge, in definitive 10-K. អ 10-K or any amendment to this Form III of this Form incorporated by reference in Part filer,’’ ‘‘accelerated filer’’ and ‘‘smaller filer, or a smaller reporting company. See the definitions of ‘‘large accelerated 12b-2 of the Exchange Act. reporting company’’ in Rule Large accelerated filer ፤ to be held on May 25, 2016. definitive proxy statement to be filed for the Annual Meeting of Shareholders Act. Yes ፤ Yes Act. during the S-T 405 of Regulation to Rule any, every Interactive Data File required to be submitted and posted pursuant to submit and post such preceding 12 months (or for such shorter period that the registrant was required ፤ files). Yes អ Yes Act). common stock as reported on the NYSE July 31, 2015 was $23.66 billion calculated using the closing market price of our shareholders are this purpose, directors, executive officers and greater than 10% record on such date ($80.37). For considered the affiliates of the registrant.

10-K 1 INTRODUCTION symbol which is not intended to indicate that we will not assert, to the fullest extent under intended to indicate that we will symbol which is not or We include ‘‘forward-looking statements’’ within the meaning of the federal securities laws include ‘‘forward-looking statements’’ within the We subject to risks and uncertainties that may change at any time, All forward-looking statements are results to differ materially from the expectations Important factors that could cause actual This report contains references to years 2016, 2015, 2014, 2013, 2012, and 2011, which represent references to years 2016, 2015, 2014, This report contains may appear in this report without our trademarks and tradenames Solely for convenience, applicable law, our rights or the right to these trademarks and tradenames. rights or the right to these trademarks applicable law, our Statements Forward-Looking Cautionary Disclosure Regarding under the headings ‘‘Business,’’ ‘‘Management’s Discussion and throughout this report, particularly and of Operations,’’ and ‘‘Note 8—Commitments Results Analysis of Financial Condition and statements because they are not limited to can identify these Contingencies,’’ among others. You as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘would,’’ ‘‘believe,’’ historical fact or they use words such ‘‘estimate,’’ ‘‘forecast,’’ ‘‘goal,’’ ‘‘potential,’’ ‘‘opportunity,’’ ‘‘anticipate,’’ ‘‘project,’’ ‘‘plan,’’ ‘‘expect,’’ likely result,’’ or ‘‘will continue’’ and similar expressions that ‘‘intend,’’ ‘‘predict,’’ ‘‘committed,’’ ‘‘will example, all or beliefs about future occurrences or results. For concern our strategy, plans, intentions and projected expenditures, cash flows, results of operations, statements relating to our estimated plans, objectives and expectations for future operations, growth or financial condition and liquidity; our or effect of legislative or regulatory changes or initiatives, pending initiatives; or the expected outcome forward-looking statements. or threatened litigation or audits are derive many of these from those that we expected. We so our actual results may differ materially and forecasts, which are based on many detailed assumptions statements from our operating budgets it is very difficult to predict the effect of known factors, and that we believe are reasonable. However, could affect our actual results. we cannot anticipate all factors that and I, Item 1A in Part Factors’’ expressed in our forward-looking statements are disclosed under ‘‘Risk with the forward-looking elsewhere in this document (including, without limitation, in conjunction and Estimates’’). All Policies statements themselves and under the heading ‘‘Critical Accounting other cautionary statements that forward-looking statements are qualified in their entirety by these and should evaluate You we make from time to time in our other SEC filings and public communications. may not contain all of the such statements in the context of these risks and uncertainties. These factors cannot assure you that we will realize the results or developments factors that are important to you. We consequences or affect us in we anticipate or, even if substantially realized, that they will result in the undertake no are made only as of the date hereof. We statements the way we expect. Forward-looking a result of new information, obligation to publicly update or revise any forward-looking statement as future events or otherwise, except as otherwise required by law. General January 30, 2015, January 31, 2014, 3, 2017, January 29, 2016, or ended February fiscal years ending closest to ends on the Friday 3, 2012, respectively. Our fiscal year 1, 2013, and February February years listed weeks, while each of the remaining consist and 2011 consisted of 53 January 31. 2016 will and is in this report should be read with, All of the discussion and analysis were 52-week years. Statements and related notes. by, the Consolidated Financial qualified in its entirety the 10-K ‘‘Executive Overview’’,includedinPart II,Item7ofthisreport. Discussion andAnalysisofFinancialConditionResults ofOperations,undertheheading as acompetitiveadvantage.For moreinformationontheseoperatingpriorities,seeManagement’s growth opportunities,3)enhancingourpositionasalow-costoperator,and4)investinginpeople and returnsforourshareholders. our merchandiseselectionsandpricingaccordingly,whileremainingfocusedonincreasingprofitability located, small-boxstores.We continuallyevaluatetheneedsanddemandsofourcustomersmodify supplemented withavarietyofgeneralmerchandiseitems,ateverydaylowpricesinconveniently model: providingabroadbaseofcustomerswiththeirbasiceverydayandhouseholdneeds, Our BusinessModel sold itsremainingsharesofourcommonstock. publicly traded,andinDecember2013theentitycontrolledbyinvestmentfundsaffiliatedwithKKR Kohlberg KravisRoberts &Co.L.P., orKKR.InNovember2009ourcommonstockagainbecame 1968 untilJuly2007,whenwemergedwithanentitycontrolledbyinvestmentfundsaffiliated and reincorporatedin1998asaTennessee corporation.Ourcommonstockwaspubliclytradedfrom opened ourfirstDollarGeneralstore.We changedournametoDollarGeneralCorporationin1968 incorporated asaKentuckycorporationunderthenameJ.L.Turner &Son,Inc.in1955,whenwe Our History low pricesthroughourconvenientsmall-boxlocations. selections withpricesatsubstantialdiscountstonationalbrands.We offerourmerchandiseateveryday high qualitynationalbrandsfromleadingmanufacturers,aswellcomparableprivatebrand merchandise, includingconsumables,seasonal,homeproductsandapparel.Ourmerchandiseincludes the southern,southwestern,midwesternandeasternUnitedStates.We offerabroadselectionof 12,575 storeslocatedin43statesasofFebruary 26,2016,withthegreatestconcentrationofstoresin General BUSINESS ITEM 1. markets withlimitedshoppingalternatives,aswell toprofitablycoexistalongsidelargerretailersin believe ourabilitytoeffectivelydeliverbothvalueand convenienceallowsustosucceedinsmall retailers. Ourslogan‘‘Savetime.Savemoney.Every day!’’ summarizesourappealtocustomers.We experience thatdistinguishesusfromotherdiscountretailers aswellconvenience,drugandgrocery convenient locationsandoureasy‘‘inout’’shopping formatcreateacompellingshopping proposition. model thanmostretailersand,webelieve,isaresultofourcompellingvalueandconvenience which hastakenplaceinavarietyofeconomicconditions,suggeststhatwehavelesscyclicalbusiness In fiscalyear2015,weachievedour26 Our operatingprioritiesaresummarizedasfollows:1)drivingprofitablesalesgrowth,2)capturing Our longhistoryofprofitablegrowthisfoundedonacommitmenttorelativelysimplebusiness J.L. Turner foundedourCompanyin1939as J.L.Turner andSon,Wholesale.We were We areamongthelargestdiscountretailers intheUnitedStatesbynumberofstores,with Compelling Value andConvenienceProposition. th consecutiveyearofsame-storesalesgrowth.Thisgrowth, PART I PART 2 Our abilitytodeliverhighlycompetitivepricesin 10-K Our research indicates that we offer a price Our research indicates that we offer 3 We also provide customers with a highly convenient, easy to also provide customers with We We believe we have substantial long-term growth potential in the believe we have substantial long-term growth We Our stores are conveniently located in a variety of rural, suburban and located in a variety of rural, Our stores are conveniently urban communities. We seek to locate our stores in close proximity to our customers, which locate our stores in close proximity seek to We urban communities. us an attractive alternative to large and trip frequency and makes drives customer loyalty large-box retail and grocery stores. discount and other Shopping Experience. Time-Saving Our easy to get in and out of quickly. experience. Our small box stores are navigate shopping and packaged and refrigerated food most necessities, such as basic product offering includes cards, and beauty care items, greeting supplies, paper products, health dairy products, cleaning supplies, among others. Our convenient hardware and automotive basic apparel, housewares, to fulfill their routine shopping offering allow our customers hours and broad merchandise to shop elsewhere. requirements and minimize their need Everyday Low Prices on Quality Merchandise. retailers and that our prices are highly competitive with even advantage over most food and drug to offer everyday low prices on quality merchandise is the largest discount retailers. Our ability structure and our strategy to maintain a limited number of supported by our low-cost operating we believe helps us maintain strong purchasing power. items per merchandise category, which everyday low prices in addition to offering offer quality nationally advertised brands at these We brands at value prices. our own comparable quality private Convenient Locations. • • Substantial Growth Opportunities. which drive frequent customer visits, and offer a focused assortment of everyday necessities, We percentage of our total Consumables is our largest merchandise category and has become a larger greeting cards, stationery, Seasonal products include decorations, toys, batteries, small electronics, bulbs, storage Home products include kitchen supplies, cookware, small appliances, light • U.S. We have identified significant opportunities to add new stores in both existing and new markets. have identified significant opportunities U.S. We relocate or remodel locations within our existing store base to In addition, we have opportunities to store economics, including a relatively low initial investment better serve our customers. Our attractive have allowed us to grow our store base to current levels and and simple, low-cost operating model to continue our profitable store growth strategy. provide us significant opportunities Our Merchandise merchandise categories. Our product assortment provides the key items in a broad range of general sell most of their basic shopping needs with one trip. We opportunity for our customers to address brand our private from leading manufacturers. Additionally, high-quality nationally advertised brands and national brand consumables offer even greater value with options to purchase value items equivalent products at substantial discounts to the national brand. paper and cleaning products sales in recent years as indicated in the table below. Consumables include bags, laundry and other home (such as paper towels, bath tissue, paper dinnerware, trash and storage condiments, spices, cleaning supplies); packaged food (such as cereals, canned soups and vegetables, and wine); snacks (such as sugar and flour); perishables (such as milk, eggs, bread, frozen meals, beer and beauty (such as candy, cookies, crackers, salty snacks and carbonated beverages); health wash, shampoo, dental over-the-counter medicines and personal care products, such as soap, body and tobacco products. hygiene and foot care products); pet (such as pet supplies and pet food); and home office supplies. prepaid phones and accessories, gardening supplies, hardware, automotive goods. containers, frames, candles, craft supplies and kitchen, bed and bath soft more competitive markets. Our value and convenience proposition is evidenced by the following is evidenced proposition Our value and convenience markets. more competitive of our business model: attributes 10-K largest andsecondsupplierseachaccountedfor approximately7%ofourpurchasesin2015. limited numberofitemspercategory,givingusapricing advantageindealingwithoursuppliers.Our with manyproducersofnationalbrandmerchandise. Despite ourbroadoffering,wemaintainonlya Our Suppliers merchandise aswellourattractivevalueandconvenience proposition. Dollar Generalshoppersfromawiderangeofincome bracketsandlifestagesappreciateourquality focused onhelpingthemmakethemostoftheirspendingdollars.At thesametime,however,loyal customers, thelowandfixedincomehouseholdsoftenunderservedbyotherretailers,weare We generallylocateourstoresandplanmerchandiseselectionstobestservetheneedsofcore to stockuponhouseholditems,makingweeklyormorefrequenttripsmeetmostessentialneeds. proximity, customers’relianceonDollarGeneralvariesfromfill-inshopping,tomakingperiodictrips Our Customers opportunities availableforourrelocationandremodelprograms. for newstoregrowthinexistingandmarkets.Inaddition,webelievehavesignificant good successinlocatingsuitablestoresitesthepast,andwebelievethatthereisampleopportunity approximately 70%ofourstoresarelocatedintowns20,000orfewerpeople.We generallyhavehad and investmentreturns.Ourstoresaverageapproximately7,400squarefeetofsellingspace broad rangeofcategories,allowingustodeliverlowretailpriceswhilegeneratingstrongcashflows with limitedmaintenancecapital,lowoperatingcosts,andafocusedmerchandiseofferingwithin managers, andthreeormoresalesassociates.Ourstoresgenerallyfeaturealow-cost,nofrillsbuilding The DollarGeneralStore and theconsumablescategorytypicallyaccountsforlowestgrossprofitmargin. indicated belowwasasfollows: as socks,underwear,disposablediapers,shoesandaccessories. We purchasemerchandisefromawidevarietyofsuppliersandmaintaindirectbuyingrelationships Our customersseekvalueandconvenience.Dependingontheirfinancialsituationgeographic Our storegrowthoverthepastthreeyearsissummarizedinfollowingtable: The typicalDollarGeneralstoreisoperatedbyamanager,oneormoreassistant Our seasonalandhomeproductscategoriestypicallyaccountforthehighestgrossprofitmargins, The percentageofnetsaleseachourfourcategoriesmerchandiseforthefiscalyears Apparel includescasualeverydayapparelforinfants,toddlers,girls,boys,womenandmen,aswell 2015 2014 2013 Year Apparel Home products Seasonal Consumables ...... einn trsSoe tr Storesat Store Stores Stores Beginning Stores at 179703 9 12,483 11,789 11,132 694 657 626 36 43 24 730 700 11,789 650 11,132 10,506 fYa pndCoe nraeEndofYear Increase Closed Opened of Year 4 24 24 12.9% 12.4% 12.4% 75.2% 75.7% 75.9% 0521 2013 2014 2015 .%55 5.5% 5.5% 6.4% 5.4% 6.4% 6.3% Net 10-K 5 We have consistently managed to obtain sufficient quantities of core merchandise and believe that, obtain sufficient quantities of core have consistently managed to We centers located strategically throughout supported by thirteen distribution Our stores are currently our distribution centers and is delivered to our stores by Most of our merchandise flows through extent. Generally, our highest sales volume occurs in the Our business is seasonal to a certain market, which is highly competitive with respect operate in the basic discount consumer goods We ourselves from other forms of retailing by offering consistently low prices in a differentiate We Our private brands come from a diversified supplier base. We directly imported approximately 6% of approximately directly imported supplier base. We a diversified brands come from Our private at cost in 2015. our purchases be able to unavailable, we would generally our current sources of supply became if one or more of such disruption of our business. However, sources without experiencing a substantial obtain alternative and or reduce the quality of our merchandise, could increase our merchandise costs alternative sources affect our sales. alternative sources could adversely an inability to obtain Distribution and Transportation distribution center in Wisconsin. broke ground on our fourteenth recently We our geographic footprint. our distribution needs. We space as necessary to support lease additional temporary warehouse We network to ensure that it remains efficient and provides the continually analyze and rebalance the for additional information pertaining to our distribution service our stores require. See ‘‘—Properties’’ centers. trailers. In addition, vendors or third-party distributors ship third-party trucking firms, utilizing our directly to our stores. certain food items and other merchandise Seasonality selling season, and the lowest occurs in the first quarter. fourth quarter, which includes the Christmas be affected by the timing of certain holidays, the timing of new In addition, our quarterly results can the amount of sales contributed by new and existing stores. We store openings and store closings, and of inventory in the third quarter and incur higher shipping and typically purchase substantial amounts sales activity during the fourth quarter. See Note 14 to the payroll costs in anticipation of increased additional information. consolidated financial statements for Our Competition quality, assortment and presentation, in-stock consistency, and to price, store location, merchandise and with many other retailers, including mass compete with discount stores customer service. We specialty stores. These merchandise, warehouse club, grocery, drug, convenience, variety and other and many of them other retail companies operate stores in many of the areas where we operate, Dollar, include Family engage in extensive advertising and marketing efforts. Our direct competitors Target, 99 Cents Only and various local, independent operators, as well as Walmart, Fred’s, Dollar Tree, CVS, and Rite Aid, among others. Certain of our competitors have greater Kroger, Aldi, Walgreens, financial, distribution, marketing and other resources than we do. believe that our prices are competitive due in part to our low-cost convenient, small-store format. We Purchasing large volumes operating structure and the relatively limited assortment of products offered. allows us to keep our of merchandise within our focused assortment in each merchandise category low prices to our customers. average costs low, contributing to our ability to offer competitive everyday situation. See ‘‘—Our Business Model’’ above for further discussion of our competitive 10-K Save, Time. SaveMoney.EveryDay!,andEverPet Comfort Bay,HolidayStyleSwigglesMoreDealsFor Your Dollar.EveryDay!,TheFast Way To I*Magine, OTSportSmart&SimpletruelivingSweetSmilesOpenTrails , BobbieBrooks Dollar General,MarketCloverValley , DGDealsForever Pals, protected underapplicableintellectualpropertylaws,includingwithoutlimitationthetrademarks Our Trademarks agreements. of ouremployeeshaveincreasedasaresult.We currentlyarenotapartytoanycollectivebargaining training, motivatingandretainingemployees,webelievethatthequality,performancemorale and distributioncenteradministrativepersonnel.We haveincreasinglyfocusedonrecruiting, including divisionalandregionalmanagers,districtstoreotherpersonnel Our Employees of thatwebsiteishttp://www.sec.gov. information regardingissuers,suchasDollarGeneral,thatfileelectronicallywiththeSEC.Theaddress maintains aninternetsitethatcontainsreports,proxyandinformationstatementsother the operationofPublicReference Room bycallingtheSECat1-800-SEC-0330.The Reference Room at100FStreet,NE,Washington DC20549.Thepublicmayobtaininformationon Public addition, thepublicmayreadandcopyanyofmaterialswefilewithSECatSEC’s as soonreasonablypracticableafterweelectronicallyfilethemwithorfurnishtotheSEC.In are availablefreeofchargetoinvestorsonorthroughtheInvestorInformationsectionourwebsite shareholders, and,fromtimetotime,registrationstatementsandotherdocuments.Thesedocuments current reportsonForm 8-K,andamendmentstothosereports,proxystatementsannualreports annualreportsonFormand ExchangeCommission(the‘‘SEC’’) 10-K,quarterlyreportsonForm 10-Q, Available Information registrations areproperlyrenewed,theyhaveaperpetualduration. trademark registrationshavevariousexpirationdates;however,assumingthatthe trademarks wheneverpracticableandtopursuevigorouslyanyinfringementofthosemarks.Our these trademarksaswellcertainothertrademarks.We attempttoobtainregistrationofour We ownmarksthatareregisteredwiththe UnitedStatesPatent andTrademark Officeandare As ofFebruary 26,2016,weemployedapproximately113,400full-timeandpart-timeemployees, Our Internetwebsiteaddressiswww.dollargeneral.com.We filewithorfurnishtotheSecurities We alsoholdanexclusivelicensetotheRexall brandthrough March5,2020. 6 TM alongwithvariationsandformativesof 10-K 7 You should carefully consider the risks described below and the other information contained in this contained the other information below and the risks described carefully consider should You and affect our financial performance and other economic factors may adversely Economic conditions low incomes and generally have limited believe many of our customers have fixed or We that affect disposable income, as well as commodity rates, Many of the factors identified above sales and improve the Our plans depend significantly on strategies and initiatives designed to increase and initiatives (such as those relating to merchandising, sourcing, shrink, private have strategies We ITEM 1A. RISK FACTORS with the SEC, including our consolidated that we make from time to time report and other filings and adversely the following risks could materially and accompanying notes. Any of financial statements not the only or liquidity. These risks are financial condition, results of operations affect our business, be adversely of operations or liquidity could also business, financial condition, results risks we face. Our known to generally or by risks not currently factors that apply to all companies affected by additional and make no can provide no assurance view to be immaterial. We us or that we currently be we believe they are reasonable, will our risk mitigation efforts, although representation that successful. customers’ disposable income or discretionary business by negatively impacting our other aspects of our sold and selling, general and administrative expenses, and adversely spending, increasing our costs of goods affecting our sales or profitability. factor that could adversely affect that disposable income would discretionary spending dollars. Any could cause our customers to shift their spending to products decrease our customers’ spending and less profitable product choices, all of which could result in lower other than those sold by us or to our greater markdowns on inventory, a change in the mix of net sales, decreases in inventory turnover, our that could reduce profitability due to lower margins. Factors products we sell, and a reduction in which we exercise no influence include but are not limited to customers’ disposable income and over increased or sustained high unemployment or underemployment adverse economic conditions such as other energy costs and interest rates, lack of available credit, levels, inflation, increases in fuel or and other changes in tax laws, concerns over government consumer debt levels, higher tax rates programs and increasing healthcare costs, and decreases in mandated participation in health insurance and food assistance programs. government subsidies such as unemployment of diesel fuel), costs of labor, insurance and healthcare, foreign transportation costs (including the costs measures that create barriers to or increase the costs associated exchange rate fluctuations, lease costs, other laws and regulations and other economic factors, also affect with international trade, changes in general and administrative expenses, and may have other our cost of goods sold and our selling, unable to fully anticipate or control, all of which may adversely adverse consequences which we are have limited or no ability to control many of these factors. affect our sales or profitability. We or sustain these plans could affect efficiencies, costs and effectiveness of our operations, and failure to achieve our performance adversely. budgeting and expense brand, distribution and transportation, store operations, store formats, implementation, upon which we reduction, and real estate) in various stages of testing, evaluation, and condition and to achieve expect to rely to continue to improve our results of operations and financial even when tested successfully, our financial plans. These initiatives are inherently risky and uncertain, testing can result partially in their application to our business in general. It is possible that successful particularly in light from resources and attention that cannot be duplicated in broader implementation, nature of our field management. of the diverse geographic locations of our stores and the decentralized described herein. General implementation also may be negatively affected by other risk factors stability of workforce, ease of Successful systemwide implementation relies on consistency of training, to achieve adversely. Failure execution, and the absence of offsetting factors that can influence results 10-K our resultsofoperationsandfinancialconditioncould beaffectedadversely. higher ratesofinventoryshrinkageorincurincreased securityorothercoststocombatinventorytheft, some levelofinventoryshrinkageisanunavoidablecost ofdoingbusiness,ifweweretoexperience that themeasureswearetakingwilleffectivelyreduce theproblemofinventoryshrinkage.Although shrinkage andcannotbesurethatincidencesofinventory lossandtheftwilldecreaseinthefutureor thereby adverselyaffectingouroverallfinancialperformance. oversaturation andtemporarilyorpermanentlydivert customersandsalesfromourexistingstores, experience intheseareas,increasingthenumberoflocationsmarketsmayresultinadvertent could slowfuturegrowthintheseareas. factors maycauseournewstorestobeinitiallylesssuccessfulthaninexistingmarkets,which and discretionaryspendingpatternsthanourexistingmarkets,aswellhighercostofentry.These brand recognition.Thoseareasmayhavedifferentcompetitiveandmarketconditions,consumertastes limited tonewstatesormetrourbanareas,wherewehavenomeaningfulexperience profitably. result, maynotmeetourtargetsforopeningnewstores,remodelingorrelocatingstoresexpanding We alsomaynotanticipateallofthechallengesimposedbyexpansionouroperationsand,asa than expectedsalesintheseprojects,couldmateriallyadverselyaffectourgrowthand/orprofitability. relocate stores,andmanyofthemarebeyondourcontrol. availability ofcapitalfundingforexpansion.Manythesefactorsalsoaffectourabilitytosuccessfully to identifycustomerdemandindifferentgeographicareas;generaleconomicconditions;andthe ability tohireandtrainnewpersonnel,especiallystoremanagers,inacosteffectivemanner;the process oroccupancydelays;theabilitytonegotiateacceptableleaseanddevelopmentterms; part onthefollowingfactors:availabilityofattractivestorelocations;absenceentitlement future growth.Ourabilitytotimelyopenstoresandexpandintoadditionalmarketareasdependsin be impeded,whichwouldadverselyaffectsales. margins generatedbysalesofconsumablesandmaintainourtargetedgrossprofitmargins. not generatethenetsalesgrowthandincreasecustomertraffictolevelsneededoffsetlower business. Further, ourmerchandisingeffortsintheconsumablesarea,includingtobaccoproducts,may further adverselyaffectedbyourinabilitytooffsetthelowermarginsassociatedwithconsumables non-consumables areaorthehighermarginareaswithinconsumablesareunsuccessful,wecouldbe market shareandprofitabilitycouldbeadverselyaffected.Ifourmerchandisingeffortsinthe that allowustosellthematanacceptableprofit,oreffectivelymarketsuchproducts,oursales, are unabletoselectproductsthatattractivecustomers,timelyobtainsuchatcosts respond toevolvingtrendsindemographicsandconsumerpreferences,expectationsneeds.Ifwe consistently andsuccessfullytheproductsthatourcustomerswilldemandtoidentifytimely merchandise andstore-specificproductsallocations,dependsinpartuponourabilitytopredict estimates couldadverselyaffectourbusiness,resultsofoperationsandfinancialcondition. successful implementationofourinitiativesorthecosttheseexceedingmanagement’s We aresubjecttotheriskofinventorylossandtheft.We experiencesignificantinventory Our profitabilitymaybenegativelyaffectedbyinventory shrinkage. Many newstoreswillbelocatedinareaswherewehaveexistingstores.Although Some newstoresandfuturestoreopportunitiesmaybelocatedinareas,includingbutnot Delays orfailuresinopeningnewstorescompletingrelocationsremodels,achievinglower Our abilitytoopen,relocateandremodelprofitablestoresisakeycomponentofourplanned If wecannotopen,relocateorremodelstoresprofitablyandonschedule,ourplannedfuturegrowthwill The successofourmerchandisinginitiatives,particularlythosewithrespecttonon-consumable 8 10-K 9 We face intense competition that could limit our growth opportunities and adversely impact our financial and adversely our growth opportunities that could limit intense competition face We quality, to price, store location, merchandise is highly competitive with respect The retail business as competitors have moved into, or increased their Competition for customers has intensified broad market acceptance and may increase the risks we face. Our private brands may not maintain important component of our sales growth and gross profit rate The sale of private brand items is an centers or to the A significant disruption to our distribution network, to the capacity of our distribution distribution and transportation network to provide goods to our stores in a timely rely on our We performance. activity, service, aggressive promotional in-stock consistency, customer assortment and presentation, many other retailers, including with discount stores and with compete We customers, and employees. stores. This variety and other specialty warehouse club, grocery, drug, convenience, mass merchandise, because impact to our financial performance subjects us to the risk of adverse competitive environment may be required to maintain our competitive and thus the lower margins, that of the lower prices, have limited demographics and other factors, may like ours, due to customer position. Also, companies This without losing competitive position. prices in response to increased costs ability to increase have performance. Certain of our competitors affect our margins and financial limitation may adversely to secure than we do and may be able marketing and other resources greater financial, distribution, fail to respond effectively to competitive with suppliers than we can. If we better arrangements markets, it could adversely affect our financial performance. pressures and changes in the retail and from the use of mobile and web-based technology that facilitates presence in, our geographic markets expect this competition to continue to and price comparisons. We online shopping and real-time product power and high level of consumer recognition of larger remain vulnerable to the marketing increase. We competitors or others could venture into our industry in a competitors and to the risk that these consolidation within the introduction of new store formats. Further, significant way, including through the alter the competitive dynamics of the retail marketplace. This discount retail industry could significantly with greatly improved financial resources, improved access to consolidation may result in competitors and other improvements in their competitive positions, as well merchandise, greater market penetration variety of products and services at competitive prices by these as result in the provision of a wider adversely affect our financial performance. consolidated companies, which could and procurement resources and marketing have invested in our development enhancement plans. We believe that our success in maintaining broad market offerings. We efforts relating to these private brand on many factors, including pricing, our costs, quality and acceptance of our private brands depends our expected sales for our private brands. The sale may not achieve or maintain customer perception. We offerings also subjects us to certain risks, such as: potential product and expansion of our private brand protect our liability risks and mandatory or voluntary product recalls; our ability to successfully proprietary rights of third proprietary rights and successfully navigate and avoid claims related to the contractual obligations and legal parties; our ability to successfully administer and comply with applicable that source, sell and and regulatory requirements; and other risks generally encountered by entities private brands may also market exclusive branded offerings for retail. An increase in sales of our affect our relationship with adversely affect sales of our vendors’ products, which, in turn, could adversely of these risks could have a certain of our vendors. Any failure to appropriately address some or all condition. significant adverse effect on our business, results of operations and financial costs, which would timely receipt of inventory could adversely impact sales or increase our transportation decrease our profits. ocean, rail, and truck, we and cost-effective manner. Using various modes of transportation, including centers. Deliveries to our stores and our vendors move goods from vendor locations to our distribution unanticipated or occur from our distribution centers or directly from our vendors. Any disruption, 10-K importation ofcertaintypesgoodsorcontaining certainmaterialsfromothercountriesand impositions onimportedgoods,tradesanctionsimposed oncertaincountries,thelimitation our merchandisecosts.Inaddition,theUnitedStates’ foreigntradepolicies,tariffsandother currency orotherpolicies,aswellincreasesincosts oflaborandwagetaxes,couldnegativelyimpact the Chineseleadership,economicandmarketconditions, internaleconomicstimulusactions,or China, asubstantialamountofourimportedmerchandise stillcomesfromChina,andthus,achangein operations andprofitability.Whileweareworkingto reduceourdependencyongoodsproducedin are locatedorfromwhichtheyimport,beyondour controlandcouldadverselyaffectour transport security,inflation,andotherfactorsrelating tothesuppliersandcountriesinwhichthey merchandise qualityorsafetyissues,transportavailability andcost,increasesinwageratestaxes, following thedisruption),availabilityandcostofrawmaterialstosuppliers,increasedimportduties, experience (suchasstrikes,stoppagesorslowdowns,whichcouldalsoincreaselaborcostsduringand failure tomeetourstandards,issueswithlaborpracticesofsuppliersorproblemstheymay in thecountrieswhichforeignsuppliersarelocated,financialinstabilityofsuppliers,suppliers’ fluctuations, disruptionsinmaritimelanes,portlabordisputes,andeconomicconditionsinstability prices andflowofthesegoodsforanyreason,suchaspoliticalunrestoractswar,currency our domesticvendorsdirectlyimporttheirproductsorcomponentsofproducts.Changestothe and damagetoourreputation. difficulties orotherreasons,wecouldexperiencemerchandiseout-of-stocksthatleadtolostsales affect oursales.Additionally, ifasupplierfailstodeliveronits commitments, whetherduetofinancial reduce thequalityofourmerchandise,andaninabilitytoobtainalternativesourcescouldadversely could increaseourmerchandisecosts,resultinatemporaryreductionstoreinventorylevels,and sources withoutexperiencingasubstantialdisruptionofourbusiness.However,suchalternative our currentsourcesofsupplybecameunavailable,wewouldgenerallybeabletoobtainalternative any difficultyinobtainingsufficientquantitiesofcoremerchandiseandbelievethat,ifoneormore largest andsecondsupplierseachaccountedfor7%ofourpurchases.We havenotexperienced we aredependentonourvendorstosupplymerchandiseinatimelyandefficientmanner.In2015, on timeorwithinestablishedbudgets. due toconstruction-relatedorotherreasons.We cannotguaranteethatanyprojectwillbecompleted completion dateandultimatecostoftheseprojectscoulddiffersignificantlyfrominitialexpectations problems; weatherinterference;firesorothercasualtylosses;andunanticipatedcostincreases.The work stoppages;unforeseenconstruction,scheduling,engineering,environmentalorgeological entail risksthatcouldcausedelaysandcostoverruns,suchas:shortagesofmaterialsorskilledlabor; by increasingtransportationcosts.Inaddition,distribution-relatedconstructionorexpansionprojects our futurefinancialperformancebyslowingstoregrowth,whichmayinturnreducerevenueor facilities tosupportourgrowthobjectives.Delaysinopeningdistributioncenterscouldadverselyaffect shipping supplierscouldalsoincreaseourcostsorotherwisenegativelyaffectbusiness. delays orinterruptionsofdeliverieswhichwouldnecessitateoursecuringalternativelabor or long-termdisruptionstothenationalandinternationaltransportationinfrastructurethatlead shortagesorworkstoppagesinthetransportationindustry ability tomakesalesandearnprofits.Labor capacity foroverseasshipments,orworkstoppagesslowdowns)couldsignificantlydecreaseour increased carrierratesordriverwagesasaresultofshortages,decreaseintransportation For example,deliverydelaysorincreasesintransportationcosts(includingthroughincreasedfuelcosts, unusual expenseoroperationalfailurerelatedtothisprocesscouldaffectstoreoperationsnegatively. We directlyimportedapproximately6%ofourpurchases(measuredatcost)in2015,butmany The productswesellaresourcedfromawidevarietyofdomesticandinternationalsuppliers, Risks associatedwithorfacedbyoursupplierscouldadverselyaffectfinancialperformance. We maintainanetworkofdistributionfacilities andaremovingforwardwithplanstobuildnew 10 10-K 11 Product liability and food safety claims could adversely affect our business, reputation and financial food safety claims could adversely affect Product liability and sell in freshness of the products that we to ensure the quality, safety and Despite our best efforts must comply with applicable product and food safety laws, All of our vendors and their products and requirements. A significant change in, or are subject to governmental regulations, procedures We and increasing federal, state and local laws and regulations. Our business is subject to numerous condition. Litigation may adversely affect our business, results of operations and financial suppliers, competitors, Our business is subject to the risk of litigation by employees, consumers, other factors relating to foreign trade and port labor agreements are beyond our control. These and are beyond our labor agreements trade and port relating to foreign other factors and affect our business could adversely access to products suppliers and our affecting our other factors the risks merchandise from foreign vendors, As we increase our imports of financial performance. different risks may be exposed to additional or imports also will increase, and we associated with these other than China. of goods produced in countries as we increase imports performance. required or claims from customers or actions may be subject to product liability all of our stores, we to food products, including but not limited by government agencies relating to penalties assessed result from to be harmful. Such claims may recalled, defective or otherwise alleged products that are presence of or spoilage, including the third parties, product contamination tampering by unauthorized other agents, or residues introduced during the growing, storage, foreign objects, substances, chemicals, handling and transportation phases. that the products we buy comply with all applicable safety and we are dependent on them to ensure obtaining contractual indemnification and insurance seek but may not be successful in standards. We not have adequate contractual indemnification or insurance coverage from our suppliers. If we do material adverse effect on our business, financial condition and available, such claims could have a obtain indemnification from foreign suppliers may be hindered by results of operations. Our ability to of U.S. product liability or other laws, which may result in the manufacturers’ lack of understanding complaints from customers as if we were the manufacturer. Even our having to respond to claims or such claims could significantly damage our reputation and with adequate insurance and indemnification, Our litigation expenses could increase as well, which also could consumer confidence in our products. our results of operations even if a product liability claim is have a materially negative impact on unsuccessful or is not fully pursued. could have a material adverse effect on our financial performance. noncompliance with, these regulations with these regulations. The complexity of the routinely incur significant costs in complying We operate and the related cost of compliance are increasing due to regulatory environment in which we enforcement efforts. New expanding and additional legal and regulatory requirements and increased product safety, food laws or regulations, particularly those dealing with environmental compliance, others, or changes in safety, information security and privacy, and labor and employment, among or employee wages, may existing laws and regulations, particularly those governing the sale of products operating changes that may be result in significant added expenses or may require extensive system and business. Untimely compliance difficult to implement and/or could materially increase our cost of doing execution of a required or noncompliance with applicable regulations or untimely or incomplete licenses or significant fines or product recall, can result in the imposition of penalties, including loss of to reputational damage. monetary penalties, class action litigation or other litigation, in addition changes in tax laws, the interpretation of existing laws, or our failure to sustain our Additionally, tax rate. reporting positions on examination could adversely affect our effective class actions, administrative shareholders, government agencies and others through private actions, of employment-related class proceedings, regulatory actions or other litigation. Nationally, the number 10-K adverse effectonourbusinessorresultsofoperations. or corruptionofcriticaldataandmayreceivenegative publicity,allofwhichcouldhaveamaterial or replacethem,andwemaysufferinterruptionsinour operationsintheinterim,mayexperienceloss and humanerror.Damageorinterruptiontothesesystems mayrequireasignificantinvestmenttofix computer andtelecommunicationsfailures, viruses,cybersecuritybreaches,naturaldisasters schedule. Additionally, suchsystemsaresubjecttodamageorinterruptionfrompoweroutages, our business.Thesetechnologyinitiativesmaynotdeliver desiredresultsormaydosoonadelayed business andarecontinuallyimprovingourinformation processesandcomputersystemstobetterrun implementing newtechnologycouldhaveamaterialadverseeffectonourbusinessorresultsofoperations. shortages orchallengesdifficultiesinmaintainingupdatingourexistingtechnologydeveloping other insurabledamage. consequences suchasincreasesinthecostsofinsuranceiftheyresultsignificantlosspropertyor and disruptionofourutilityservicesortoinformationsystems.Theseeventsalsocanhaveindirect directly affectedbysuchevents,thetemporaryreductioninavailabilityofproductsourstores distribution centersorstores,theinabilityofcustomerstoreachhavetransportationourstores temporary disruptioninthetransportofgoodsfromoverseas,delaydeliverytoour long-term disruptioninthesupplyofproductsfromsomedomesticandoverseassuppliers, opening newstores,thetemporarylackofanadequateworkforceinamarket,or these eventscouldresultinincreasesfuel(orotherenergy)pricesorashortage,delays make deliveriesorprovideothersupportfunctionstoourstoresandthroughlostsales.Inaddition, operations andfinancialperformancecouldbemateriallyadverselyaffectedthroughaninabilityto number ofstores,orourcorporateheadquartersimpactonemorekeysuppliers, extent theseeventsresultintheclosureofoneormoreourdistributioncenters,asignificant greater thanexpectedmarkdownsandadverselyaffectourshort-termresultsofoperations.To the significant weatherconditionscanaffectconsumershoppingpatterns,whichcouldleadtolostsalesor disruptions couldadverselyaffectourbusinessandfinancialperformance.Uncharacteristicor political events,suchascivilunrestincountrieswhichoursuppliersarelocated,orsimilar earthquakes, unusualweatherconditions,pandemicoutbreaks,terroristactsordisruptiveglobal otherwise adverselyaffectourfinancialperformance. outbreaks, terroristacts,andglobalpoliticaleventscoulddisruptbusinessresultinlowersales financial statementsforfurtherdetailsregardingcertainofthesependingmatters. affect ourbusiness,resultsofoperationsandfinancialcondition.SeeNote8totheconsolidated allegations arevalidorwhetherweultimatelyfoundliable.Asaresult,litigationmayadversely litigation thatcouldnegativelyaffectcustomerperceptionofourbusiness,regardlesswhetherthe defend futurelitigationmaybesignificant.Therealsoadversepublicityassociatedwith negatively affectouroperatingresultsifchangestobusinessoperationsarerequired.Thecost us orsettledbyus,mayresultinliabilitymaterialtoourfinancialstatementsasawhole unknown forsubstantialperiodsoftime.Inaddition,certaintheselawsuits,ifdecidedadverselyto indeterminate amounts,andthemagnitudeofpotentiallossrelatingtotheselawsuitsmayremain difficult toassessorquantify.Plaintiffsinthesetypesoflawsuitsmayseekrecoveryverylarge litigation, particularlyclassactionlawsuits,regulatoryactionsandintellectualpropertyclaims,is and statelaws,regulationsagencyguidancemaycauseclaimstoriseevenmore.Theoutcomeof actions filedeachyearhascontinuedtoincrease,andrecentchangesproposedinfederal We dependonavarietyofinformationtechnologysystemsfortheefficientfunctioningour Material damageorinterruptionstoourinformationsystemsasaresultofexternalfactors,staffing The occurrenceofoneormorenaturaldisasters,suchashurricanes,fires,floods,tornadoesand Natural disasters(whetherornotcausedbyclimatechange),unusualweatherconditions,pandemic 12 10-K 13 We also rely heavily on our information technology staff. Failure to meet these staffing needs may to meet these technology staff. Failure our information rely heavily on also We labor costs, as well as other qualified employees while controlling to attract, train and retain Failure and positive customer experience depends on our ability to Our future growth and performance officers and other key personnel. If we lose key personnel or are Our success depends on our executive degree on the skills, experience and efforts of our Our future success depends to a significant in managing our Our cash flows from operations may be negatively affected if we are not successful exclusive of goodwill and Our inventory balance represented approximately 54% of our total assets negatively affect our ability to fulfill our technology initiatives while continuing to provide maintenance while continuing initiatives to fulfill our technology affect our ability negatively upgrade many of these certain vendors to maintain and periodically rely on We on existing systems. many of The software programs supporting can continue to support our business. systems so that they developers developers. The inability of these licensed to us by independent software our systems were would systems and software programs to maintain and upgrade these information or us to continue systems in were unable to convert to alternate the efficiency of our operations if we disrupt or reduce associated potential problems and interruptions manner. In addition, costs and an efficient and timely or adequate and technology or with maintenance of new or upgraded systems with the implementation the efficiency of our operations. systems could also disrupt or reduce support of existing adversely affect our financial performance. labor issues, could employees, many of whom are in positions with historically attract, train, retain and motivate qualified meet our labor needs, while controlling our labor costs, is subject high rates of turnover. Our ability to for and availability of qualified personnel in a given to many external factors, including competition those markets, prevailing wage rates, minimum wage laws, health market, unemployment levels within employment and labor laws (including changes in the process for and other insurance costs, changes in workplace regulations (including changes in ‘‘entitlement’’ our employees to join a union) or other paid leave programs), and our reputation and relevance within programs such as health insurance and attract and retain adequate numbers of qualified employees, our the labor market. If we are unable to the extent a significant support functions could suffer. To operations, customer service levels and or attempts to unionize, our labor costs could increase. In portion of our employee base unionizes, Labor relating to the overtime exemptions under the Fair addition, anticipated regulatory changes operating in increased labor costs to our business and negatively affect our could result Standards Act are required. Our ability to pass along labor costs to our results if changes to our business operation low price model, and we may not be able to offset the costs customers is constrained by our everyday elsewhere in our business. our business may be harmed. unable to hire additional qualified personnel, services of any of our executive executive officers and other key personnel. The unexpected loss of the assurance that our executive officers could have an adverse effect on our operations. There can be no for skilled and succession planning, retention or hiring efforts will be successful. Competition also depend on our ability to experienced management personnel is intense, and our future success will new qualified personnel could attract and retain qualified personnel, and a failure to attract and retain do not currently maintain key person life insurance have an adverse effect on our operations. We policies with respect to our executive officers or key personnel. inventory balances. is a key component of other intangible assets as of January 29, 2016. Efficient inventory management sufficient inventory levels and be successful, we must maintain our business success and profitability. To those levels to increase an appropriate product mix to meet our customers’ demands without allowing our financial results or that to such an extent that the costs to store and hold the goods unduly impacts do not accurately subjects us to the risk of increased inventory shrinkage. If our buying decisions 10-K employees andvendors,aswellourbusiness.Additionally, undercertaincircumstances,wemay access to,collectormaintaincertainprivateconfidential informationregardingourcustomers, reputation andsales. enforcement actionsandcostlyresponsemeasures,could materiallydisruptouroperationsandharm vendors, whetherasaresultofcybersecurityattacksorotherwise, couldexposeustolitigation,government adversely affected. experience agreaternumberoftheselossesthanweanticipate,ourfinancialperformancecouldbe center anddistributioncenters,weareeffectivelyself-insuredforotherpropertylosses.If Although wecontinuetomaintainpropertyinsuranceforcatastrophiceventsatourstoresupport which couldhaveamaterialadverseeffectonourresultsofoperationsandfinancialcondition. indemnity costs,couldresultinmateriallydifferentexpensesthanexpectedundertheseprograms, underlying ourrecordedliabilitiesfortheselosses,includingexpectedincreasesinmedicaland programs. Unanticipatedchangesinanyapplicableactuarialassumptionsandmanagementestimates under ourworkers’compensation,automobileliability,generalliabilityandgrouphealthinsurance in responsetothesemarketchanges.Inaddition,weself-insureasignificantportionofexpectedlosses market trends,wemayelecttoself-insure,accepthigherdeductiblesorreducetheamountofcoverage adequate insurancecoverageorresultinexcessivepremiumincreases.To offsetnegativeinsurance events mayresultinsizablelossesfortheinsuranceindustryandadverselyimpactavailabilityof disasters. Ifweincurtheselossesandtheyarematerial,ourbusinesscouldsuffer.Certainmaterial certain wageandhourotheremployment-relatedclaims,includingclassactions,somenatural economically reasonabletoinsure,suchaslossesdueactsofwar,employeeandcertainothercrime, types oflosseswemayincurbutagainstwhichcannotbeinsuredorbelievearenot provisions thatwebelieveareprudentbasedonthedispersionofouroperations.However,there performance. markdowns, especiallyinseasonalmerchandise. our financialperformanceandoperatingresultscouldbeadverselyaffectedbyunanticipated seasonal normsorexpectations.Ifourfourthquartersalesresultsweresubstantiallybelowexpectations, merchandise inventorycouldresultifournetsalesduringtheChristmassellingseasonfallbelow weather couldresultinlower-than-plannedsalesduringtheholidayseason.Anexcessofseasonal unemployment, highgasprices,publictransportationdisruptions,orunusualunanticipatedadverse amounts ofseasonalinventory.Adverse events,suchasdeterioratingeconomicconditions,high occurs inthefourthquarterofourfiscalyear.Inanticipationthisholiday,wepurchasesubstantial whole. fourth quarter, adverseeventsduringthefourthquartercouldmateriallyaffectourfinancialstatementsasa operations maybenegativelyaffected. management. Ifwearenotsuccessfulinmanagingourinventorybalances,cashflowsfrom reduce theserisks,butwecannotmakeassurancesthatwillbesuccessfulinourinventory inventory, whichalsocanadverselyimpactourfinancialresults.We continuetofocusonways spending levelsareinaccurate,wemayhavetotakeunanticipatedmarkdownsdisposeoftheexcess predict customertrends,weinappropriatelypriceproductsorourexpectationsabout In connectionwithsales,wetransmitconfidentialcredit anddebitcardinformation.We alsohave Any failuretomaintainthesecurityofinformationwehold relatingtoourcustomers,employeesand Our insurancecoveragereflectsdeductibles,self-insuredretentions,limitsofliabilityandsimilar Our currentinsuranceprogrammayexposeustounexpectedcostsandnegativelyaffectourfinancial We generallyrecognizeourhighestvolume ofnetsalesduringtheChristmassellingseason,which Because ourbusinessisseasonaltoacertainextent,withthehighestvolumeofnetsalesduring 14 10-K 15 Because we accept debit and credit cards for payment, we are subject to the Payment Card we are subject to the Payment debit and credit cards for payment, Because we accept experienced by us or one of our vendors), which could be A security breach of any kind (whether affect our business Deterioration in market conditions or changes in our credit profile could adversely positive cash flow we generate from our operating activities and our access to the rely on the We share information with vendors that assist us in conducting our business (for example, third-party business (for example, in conducting our that assist us with vendors share information as with sales), in connection and debit card information of credit us in the transmittal vendors assist and While we have implemented procedures with the permission of the individual. required by law, or of our and require appropriate controls to protect and safeguard our information technology intended or might compromise our security measures that computer hackers and others vendors, it is possible of our and obtain the personal information and other vendors in the future those of our technology are rapidly business information, as cyberattacks and vendors that we hold or our customers, employees or other employee error or malfeasance increasingly sophisticated. Moreover, evolving and becoming and breach our vendors’ security measures result in a defeat of our or our third-party irregularities may vendors’ information systems. or our third-party Card Industry Security by the Payment Standards (‘‘PCI DSS’’), issued Industry Data Security our security and standards with regard to PCI DSS contains compliance guidelines Standards Council. storage, processing, and transmission of cardholder data. surrounding the physical and electronic of implemented technology in all of our stores to allow for the acceptance we have Additionally, DSS standards and (EMV) credit transactions. Complying with PCI Europay, Mastercard and Visa and information security measures require significant implementing related procedures, technology even as we comply with PCI DSS standards and offer resources and ongoing attention. However, be vulnerable to, and unable to detect and appropriately EMV technology in our stores, we may data loss, including cybersecurity attacks or other breach of respond to, data security breaches and cardholder data. any failure by us to comply with the applicable privacy and undetected for a period of time, or and standards could expose us to risks of data loss, litigation, information security laws, regulations or penalties, and costly response measures (including, for government enforcement actions, fines credit monitoring services for, affected customers, as well as example, providing notification to, and which may not be covered by or may exceed the coverage further upgrades to our security measures) could materially disrupt our operations. Any resulting negative limits of our insurance policies, and significantly harm our reputation which could cause us to lose media attention and publicity could discontinuing the use of debit or credit cards in our stores or not market share as a result of customers could have a material adverse effect on our business and shopping in our stores altogether and financial performance. operations and financial condition. return of cash to our credit and capital markets to fund our operations, growth strategy, and credit and capital markets, shareholders through share repurchases and dividends. Changes in the may increase the cost of including market disruptions, limited liquidity and interest rate fluctuations, Our continued access to financing or restrict our access to these potential sources of future liquidity. including our operating these liquidity sources on favorable terms depends on multiple factors, an investment grade rating, and performance and our credit ratings. Our debt securities currently have the debt capital markets and a downgrade of this rating likely would negatively impact our access to in the debt markets or any increase our cost of borrowing. As a result, any disruptions or turmoil and financial condition downgrade of our credit ratings could adversely affect our business operations that our ability to obtain and our ability to return cash to our shareholders. There can be no assurances by economic conditions or additional financing through the debt markets will not be adversely impacted that we will be able to maintain or improve our current credit ratings. 10-K TM2 PROPERTIES ITEM 2. UNRESOLVED STAFF COMMENTS ITEM 1B. have anadverseeffectonourfinancialconditionandresultsofoperations. performance. Theoutcomeofsuchchangescouldincludelitigationorregulatoryactionswhich judgments byourmanagementcouldsignificantlychangereportedorexpectedfinancial Changes intheserulesortheirinterpretationchangesunderlyingassumptions,estimates to ourbusinessinvolvemanysubjectiveassumptions,estimatesandjudgmentsbymanagement. implementation guidelinesandinterpretationswithregardtoawiderangeofmattersthatarerelevant in significantchangestoourfinancialstatements. significant changestoourleasemanagement,fixedasset,andotheraccountingsystems,willresult recently issuedbytheFinancialAccounting StandardsBoardareexpectedtorequireusmake financial statements.Inparticular,theimplementationofaccountingstandardsrelatedtoleases,as and otherchangesthatcouldincreaseouroperatingcosts,alsowillresultinto could adverselyaffectourfinancialperformance. landlords, whichtypicallycarryaprimaryleasetermof upto15yearswithmultiplerenewaloptions. rental provisionsandexpirationdates.Manystoresare subjecttobuild-to-suitarrangementswith As ofFebruary 26,2016, weoperated12,575retailstoreslocatedin43statesasfollows: None. U.S. generallyacceptedaccountingprinciplesandrelatedpronouncements, The implementationofnewaccountingstandardswillrequireextensivesystems,internalprocess New accountingguidanceorchangesintheinterpretationapplicationofexisting Most ofourstoresarelocatedinleasedpremises.Individual storeleasesvaryastotheirterms, Maine Louisiana Kentucky Kansas Iowa Indiana Illinois Georgia Florida Delaware Connecticut Colorado California Arkansas Arizona Alabama State Massachusetts Maryland Missouri Mississippi Minnesota Michigan ...... 189 ...... 4T 14 ...... 210 ...... 454 738 ...... 44P 434 711 ...... 89 ...... 436 ...... 9 T 494 458 ...... 42 30 ...... 170 365 ...... 658 ...... 113 ...... 5 V 356 ...... 44W W 414 73 ...... 29 ...... 2 V 22 ...... ubro trsState Number ofStores 16 South Dakota South Carolina Rhode Island Oregon Oklahoma Ohio North Carolina New York New Mexico New Jersey New Hampshire Nevada Nebraska Utah exas ennessee ennsylvania ermont irginia est Virginia isconsin ...... 659 ...... 7 ...... 7 ...... 24 ...... 336 ...... 99 ...... 655 ...... 30 ...... 126 ...... 391 ...... 337 87 ...... 556 ...... 84 ...... 26 4 ...... 199 ...... 457 ...... 674 ...... 17 ...... Number ofStores 1,301 10-K Year Approximate Square Number of 1959199419971998 720,000 1,310,0001999 1,250,00020002001 820,000 1,150,0002005 1,442 786 2006 980,000 1,170,000 922 2012 1,120,0002012 1,256 934 1,110,0002014 1,012 2016 1,161 940,000 1,141 600,000 1,000,000 1,267 920,000 1,160 321 872 301 Opened Footage Stores Served 17 ...... Location Ardmore, OK South Boston, VA Indianola, MS MO Fulton, Alachua, FL Zanesville, OH Jonesville, SC Marion, IN Bessemer, AL Lebec, CA Bethel, PA San Antonio, TX Scottsville, KY We lease the distribution centers located in California, Oklahoma, Mississippi and Missouri and lease the distribution centers located in California, We approximately 302,000 square feet of owned buildings and Our executive offices are located in 8 to the consolidated financial statements under the heading The information contained in Note None. As of February 26, 2016, we operated thirteen distribution centers, as described in the following we operated thirteen distribution centers, 26, 2016, As of February own the remaining distribution centers in the table above. Approximately 7.25 acres of the land on own the remaining distribution centers is located is subject to a ground lease. As of January 29, 2016, which our Kentucky distribution center feet of additional temporary warehouse space to support our we leased approximately 745,000 square distribution needs. leased office space in Goodlettsville, Tennessee. approximately 56,000 square feet of ITEM 3. LEGAL PROCEEDINGS reference. II, Item 8 of this report is incorporated herein by this ‘‘Legal proceedings’’ contained in Part ITEM 4. MINE SAFETY DISCLOSURES We also have stores subject to shorter-term leases and many of these leases have renewal options. A have renewal options. of these leases leases and many to shorter-term have stores subject also We arrangements. to build-to-suit stores are subject portion of our new significant table: 10-K all retailoutlets,inboundtrafficandtransportation.He alsohashelddistributionandlogistics and drugretailer,whereheoversawdistributionoffood productsfromSafewaydistributioncentersto September 2001toOctober2005,heservedastheVice President forSafewayInc.,afood ofLogistics and outboundtransportationfacilitymaintenance toserviceover500retailoutlets.From from October2005toApril2008.Inthisrole,hewas responsibleforoverseeingwarehousing,inbound Drug StoresCorporation,anoperatorofachainretail drugstoresontheWest CoastandHawaii, Prior tojoining DollarGeneral,hewasGroupVice PresidentandDistributionforLongs ofLogistics 29,2016.Hehasalmost30years ofmanagementexperienceinretaillogistics. General effectiveApril FlaniganplanstoretirefromDollar He waspromotedtoExecutiveVice President inMarch2010.Mr. career inMay1990atAlcoa,whereheservedforapproximatelynineyears. financial managementpositionsatGeneralElectricfromMarch1999toApril2002.Hebeganhis 2010. HeservedasPlantControllerforAlcoaInc.betweenApril2002andMay2004,heldvarious initiatives. Mr.GarrattservedinvariousotherfinancialpositionsatYum fromMay2004toMarch corporate ChiefFinancialOfficerandleadingstrategyaswelldrivingkeycross-divisional Director, Yum CorporateStrategy,fromMarch2010toOctober 2013,reportingdirectlytothe Yum Restaurants InternationalbetweenOctober2013and2014.HealsoservedastheSenior Finance andDivisionControllerfortheKFCdivisionearlierPizza Hutdivisionandfor holding leadershippositionsincorporatestrategyandfinancialplanning.HeservedasVice President, Brands, Inc.,oneoftheworld’slargestrestaurantcompanies,betweenMay2004andOctober2014, joining DollarGeneral,Mr.GarrattheldvariouspositionsofincreasingresponsibilitywithYum! subsequently servedasInterimChiefFinancialOfficerfromJuly2015toDecember2015.Prior to 2015. HejoinedDollarGeneralinOctober2014asSeniorVice President, Finance&Strategyand and EckerdCorporation. distribution centers.HealsopreviouslyservedinleadershippositionsatPhar-MorFood andDrugInc. advertising, storedevelopment,layoutandspaceallocation,theoperationofthree was responsibleforallpharmacyandfront-endmarketing,merchandising,procurement,supplychain, November 2008)andSeniorVice President andChiefMerchandisingOfficer(2001-2008),wherehe for 7years,includingExecutiveVice President andChiefOperatingOfficer(February 2008through joining DollarGeneral,Mr.Vasos DrugStoresCorporation servedin executivepositionswithLongs Merchandising Officer.HewaspromotedtoChiefOperatingOfficerinNovember2013.Prior to He joinedDollarGeneralinDecember2008asExecutiveVice President, DivisionPresident andChief Anita C.Elliott James W. Thorpe Rhonda M.Taylor Robert D.Ravener Jeffery C.Owen John W. Flanigan John W. Garratt Todd J.Vasos Name our directorsorexecutiveofficers. the Boardtoserveuntilasuccessorisdulyelected.Therearenofamilialrelationshipsbetweenanyof of ourexecutiveofficersservesatthediscretionBoardDirectorsandiselectedannuallyby EXECUTIVE OFFICERSOFTHEREGISTRANT Mr. FlaniganjoinedDollarGeneralasSeniorVice President, GlobalSupplyChaininMay2008. Mr. GarratthasservedasExecutiveVice President andChiefFinancialOfficersinceDecember2, Mr. Vasos hasservedasChiefExecutiveOfficerandamemberofourBoardsinceJune3,2015. Information regardingourcurrentexecutiveofficersasofMarch15,2016issetforthbelow.Each ...... 54 ...... 51 ...... 46 ...... 47 ...... 57 ...... 48 ...... 64 ...... 57 ...... Age Senior Vice President andChiefAccounting Officer Executive Vice President, ChiefMerchandisingOfficer Executive Vice President andGeneralCounsel Executive Vice President andChiefPeople Officer Executive Vice President, StoreOperations Executive Vice President, GlobalSupplyChain Executive Vice President andChiefFinancialOfficer Chief ExecutiveOfficerandDirector 18 Position 10-K 19 returned to Dollar General in June 2015 as Executive Vice President of Store President Vice General in June 2015 as Executive Owen returned to Dollar Mr. Officer in August and Chief People President as Senior Vice joined Dollar General Ravener Mr. March 17, 2015. She and General Counsel since President has served as Executive Vice Ms. Taylor and Chief President 2015 as Executive Vice Thorpe returned to Dollar General in August Mr. Officer since December 2, and Chief Accounting President Ms. Elliott has served as Senior Vice leadership positions at Vons—a Safeway company, Specialized Distribution Management Inc., and Management Inc., Distribution company, Specialized Safeway positions at Vons—a leadership Crum Logistics.Crum & to his experience with the Company. Prior 21 years of previous employment Operations, with over to Operations. Prior Store President, Vice General in July 2014, he was Senior departure from Dollar March November 2006 to Manager. From Division President, as Vice 2011, Mr. Owen served August Director, to November 2006, he was Senior Division Manager. Prior Retail 2007, he served as operations roles of Owen served the Company in various Improvement. Mr. Operations Process has served 1992 to September 2004. Mr. Owen and responsibility from December increasing importance Inc. since March 30, 2015. as a director of Kirkland’s to joining Dollar General, he in March 2010. Prior President to Executive Vice 2008. He was promoted roles with Starbucks Corporation, a roaster, marketer and retailer served in human resources executive of U.S. President 2008 as the Senior Vice 2005 until August of specialty coffee, from September As Division. Resources—Eastern Partner President, and, prior to that, as the Vice Resources Partner oversaw all aspects of at Starbucks, Mr. Ravener Resources of U.S. Partner President the Senior Vice held to serving at Starbucks, Mr. Ravener 10,000 stores. Prior human resources activity for more than roles for The Home Depot Inc., a home improvement retailer, at of Human Resources President Vice field division from April 2003 to September 2005. its Store Support Center and a domestic Inc. in executive roles in both human resources and operations at Footstar, also served Mr. Ravener Inc. PepsiCo, and roles of increasing leadership at to in March 2000 and was subsequently promoted Attorney joined Dollar General as an Employment and Assistant President in 2001, Deputy General Counsel in 2004, Vice Senior Employment Attorney to General Counsel in June 2013. Prior and President Senior Vice General Counsel in March 2010, and where law with Ogletree, Deakins, Nash, Smoak & Stewart, P.C., joining Dollar General, she practiced litigation. She has also held attorney positions with she specialized in labor law and employment Harrison LLP and Stokes & Bartholomew. & Ford years of previous employment experience with the Company. He Merchandising Officer, with over six Manager, from May 2006 when he General Merchandise President, previously served as Senior Vice from Dollar General, his departure in July 2012. Following joined the Company until his departure of services as President Mr. Thorpe provided on a limited ad-hoc basis certain retail industry consulting to Dollar General, he served in various positions of increasing JW Thorpe & Associates, Inc. Prior integrated retailer, from importance and responsibility with Sears Holdings Corporation, a leading and General Merchandise President March 1991 to May 2006 where his last position was Vice to Sears, he worked as a Marketing Program Manager—Hard Home of Sears Home Group. Prior sales company, from July Manager for Zenith Data Systems, a personal computer development and Corporation, an information technology at The MAXIMA 1991. He began his career 1990 to February positions. services company, where he held various project administration and analyst to 2005. Prior and Controller in August President 2015. She joined Dollar General as Senior Vice and Controller of Big Lots, President Inc., a closeout joining Dollar General, she served as Vice she was responsible for accounting operations, financial 2005, where retailer, from May 2001 to August and Controller President to serving at Big Lots, Vice reporting and internal audit. Prior she served as Jitney- 1998 to March 2001. At for Jitney-Jungle Stores of America, Inc., a grocery retailer, from April internal and external financial Jungle, Ms. Elliott was responsible for the accounting operations and the to serving at Jitney-Jungle, she practiced public accounting for 12 years, 6 of reporting functions. Prior LLP. which were with Ernst & Young 10-K a A$500millionsharerepurchaseprogramwaspubliclyannouncedonSeptember5,2012,and (a) Total 01/01/16 -01/29/16 12/01/15 -12/31/15 10/31/15 -11/30/15 defined byRule 10b-18(a)(3) oftheSecuritiesExchangeAct of1934: the quarterendedJanuary29,2016byoronbehalfofDollarGeneralany‘‘affiliatedpurchaser,’’as ofEquitySecurities Issuer Purchases relevant factors. based onanevaluationofourearningsperformance,financialcondition,capitalneedsandother dividends, thedeclarationandpaymentoffuturecashdividendsaresubjecttoBoard’sdiscretion paid recurringdividendssinceMarch2007.WhiletheBoardintendstocontinueregularquarterlycash paid quarterlycashdividendsof$0.22persharein2015.Prior to March2015,wehadnotdeclaredor to bepaidonApril12,2016shareholdersofrecordourcommonstockMarch29,2016.We Dividends approximately 1,874shareholdersofrecordourcommonstock. and lowsalespricesduringeachquarterinfiscal20152014wereasfollows: Market Information MARKETFORREGISTRANT’S COMMONEQUITY, RELATED STOCKHOLDER ITEM 5. Period market andotherconditions.Thisrepurchaseauthorization hasnoexpirationdate. made intheopenmarketorprivatelynegotiatedtransactions fromtimetosubject increase) andDecember3,2015($1.0billionincrease). Undertheauthorization,purchasesmaybe ($500 millionincrease),December5,2013($1.0billion increase),March12,2015($1.0billion increases intheauthorizationundersuchprogramwere announcedonMarch25,2013 The followingtablecontainsinformationregardingpurchasesofourcommonstockmadeduring On March8,2016,ourBoardofDirectorsdeclaredaquarterlycashdividend$0.25pershare, On March15,2016,ourstockpriceatthecloseofmarketwas$85.04andtherewere Our commonstockistradedontheNewYork StockExchangeunderthesymbol‘‘DG.’’Thehigh ...... o ...... $ Low...... High 2014 $ Low...... High 2015 MATTERS AND ISSUER PURCHASESOF EQUITYSECURITIES MATTERS ANDISSUER ...... $ ...... $ ...... — $ — — $ — ...... oa ubro vrg sPr fPbil Yet BePurchased asPart ofPublicly Average Total Numberof ,2,1 7.941893$923,803,000 4,128,913 $70.29 4,128,913 ,2,1 7.941893$923,803,000 4,128,913 $70.29 4,128,913 ucae e hr rgasa orPrograms(a) Programs(a) perShare Purchased hrsPiePi none ln rUnderthePlans AnnouncedPlansor Paid Price Shares PART II PART 20 ure ure ure Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter 44 5.0$54 $62.50 $55.48 $53.00 54.43 $59.75 $64.66 $71.44 65.86 11 6.9$51 $71.78 $65.10 $65.99 61.18 $75.14 $81.15 $81.42 76.99 is eodTidFourth Third Second First Fourth Third Second First oa ubrApproximate Total Number ucae ofSharesthatMay Purchased of Shares — — $923,803,000 $214,007,000 Dollar Value 10-K 21 The following table sets forth selected consolidated financial information of Dollar General of Dollar financial information selected consolidated table sets forth The following with, and is qualified by reference forth below should be read in conjunction The information set ITEM 6. DATA FINANCIAL SELECTED of The selected historical statement the dates and for the periods indicated. Corporation as of the fiscal years ended January 29, 2016, statement of cash flows data for operations data and January 30, data as of January 29, 2016 and and January 31, 2014 and balance sheet January 30, 2015, financial statements included from our historical audited consolidated 2015, have been derived of cash of operations data and statement The selected historical statement elsewhere in this report. 3, 2012 and balance sheet data as 1, 2013 and February fiscal years ended February flows data for the in this table have been derived 3, 2012 presented 1, 2013, and February February of January 31, 2014, in this report. financial statements not included from audited consolidated II, Item 8 of this report notes included in Part Financial Statements and related to, the Consolidated of Operations Analysis of Financial Condition and Results and the Management’s Discussion and 10-K 1 ThefiscalyearendedFebruary 3,2012wascomprisedof53 weeks. (1) Total shareholders’equity debt(4) Long-term Total assets Cash andcashequivalentsshort-term Balance SheetData(atperiodend): Rent expense Apparel sales Home productssales Seasonal sales Consumables sales Net salespersquarefoot(3) Selling squarefeet(inthousandsatperiod Number ofstores(atperiodend) Number ofstoresincludedinsamestore Same storesales(2) Same storesalesgrowth(2) Other FinancialandOperatingData: Total capitalexpenditures Net cashprovidedby(usedin): Statement ofCashFlowsData: Dividends pershare 3,207.1 Earnings pershare—diluted Earnings pershare—basic 3,430.1 Net income 3,699.6 Income taxexpense Income beforeincometaxes 4,033.4 Other (income)expense Interest expense 4,365.8 Operating profit Selling, generalandadministrativeexpenses Gross profit Cost ofgoodssold Net sales Statement ofIncomeData: per squarefoot) number ofstores,sellingsquarefeet,andnetsales (Amounts inmillions,excludingpersharedata, been reclassifiedtoconformthecurrentyearpresentation. included inPart II,Item7ofthisreport.Certainfinancialdisclosuresrelatingtopriorperiodshave investments end) sales calculation Financing activities Investing activities Operating activities ...... $ ...... $ ...... $ ...... $ ...... 03— 0.3 ...... $ ...... 2 2 2 1 213 $ 216 $ 220 $ 223 $ 226 $ ...... aur 9 aur 0 aur 1 eray1 February 3, February 1, January31, January30, January 29, 1,5. 1,1. 1,6. 1,9. $13,626.7 $14,992.7 $16,365.5 $17,818.7 $19,254.3 2,6. 1,0. 1,0. 1,2. $14,807.2 $16,022.1 $17,504.2 $18,909.6 $20,368.6 12101,0. 08821,4. 9,663.6 10,340.8 10,848.2 11,208.6 11,251.0 10,109.3 10,936.7 12,068.4 13,107.1 14,062.5 1265 888 583 568 (908.0) (546.8) (598.3) (868.8) (1,296.5) ,7. ,1. ,0. ,8. 4,674.6 2,593.6 4,985.3 2,745.3 5,402.2 2,799.5 5,710.0 2,725.1 5,377.9 2,970.6 ,7. ,1. ,1. ,3. 1,050.5 $ 1,131.4 $ 1,213.1 $ 1,314.7 $ 766.7 1,378.0 $ 1,225.3 952.7 $ 1,497.4 1,025.1 $ 1,490.8 1,065.3 1,628.3 $ 1,655.3 1,165.1 1,680.9 4,697.9 1,736.2 5,085.4 1,853.0 1,769.1 5,435.7 1,940.3 5,802.5 6,306.1 0621 0421 2012(1) 2013 2014 2015 2016 2431,8 1121,0 9,937 9,254 10,506 9,783 11,132 10,387 11,789 11,052 12,483 11,706 2478,0 2027,0 71,774 76,909 82,012 87,205 92,477 548 340 584 516 (514.9) (571.6) (513.8) (538.4) (569.8) (374.0) (250.0) (504.8) (371.7) (503.4) 5. 7. 0. 4. 126.1 $ 140.8 542.3 $ $ 505.6 614.3 $ $ 579.8 686.9 $ $ 157.9 785.2 $ 856.9 458.6 544.7 603.2 615.5 687.9 22 .6$35 .7$28 2.25 $ 2.87 $ 3.17 $ 3.50 $ 3.96 24 24 29 36 13.8% 73.2% 13.6% 73.9% 12.9% 75.2% 12.4% 75.7% 12.4% 75.9% — 2.22 — 2.85 — 3.17 — 204.9 3.49 127.9 0.88 3.95 89.0 88.2 86.9 .%55 .%59 6.2% 6.8% 5.9% 6.6% 5.5% 6.4% 5.5% 6.4% 5.4% 6.0% 6.3% 4.7% 3.3% 2.8% 2.8% Year Ended 893. 60.6 30.0 18.9 10-K Year Ended Year 23 2016 2015 2014 2013 2012 4.5x 4.4x 4.7x 4.7x 3.8x January 29, 30, January January 31, 1, February 3, February ...... income (loss) before income taxes, plus fixed charges less capitalized expenses related to income (loss) before income taxes, for capitalized interest is not significant) and (b) fixed indebtedness (amortization expense expensed or capitalized), the amortization of debt charges consist of interest expense (whether to indebtedness, and the interest portion of rent expense. issuance costs and discounts related charges(1): Ratio of earnings to fixed Ratio (1) of earnings to fixed charges, (a) earnings consist of purposes of computing the ratio For remain open at the end of the reporting period. We include stores that have been remodeled, stores that have include We the reporting period. at the end of remain open the sales When applicable, we exclude in our same-store sales calculation. expanded or relocated the same-store sales calculation. week of a 53-week year from in the non-comparable the selling square footage during reporting period divided by the average ending date of the of each of of the fiscal year, and the end end of the fiscal year, the beginning period, including the fiscal quarters. our three interim periods presented. (2) and full fiscal months open at least 13 stores that were calculated based upon sales are Same-store (3) as of the total sales for the preceding 12 months square foot was calculated based on Net sales per (4) for all from the corresponding debt liability costs are reflected as a deduction Debt issuance 10-K price andaffordability. position, aswellanongoingfocusonenhancingourmarginswhilemaintainingbotheverydaylow low-cost operator,and4)investinginourpeopleasacompetitiveadvantage. 1) drivingprofitablesalesgrowth,2)capturinggrowthopportunities,3)enhancingourpositionasa while retainingourcustomer-centricfocus.We arekeenlyfocusedonexecutingthefollowingpriorities: inconsistent andtheirdurationisunknown. rising rentsandmedicalcosts.Theoverallfinancialimpactofthesefactorstoourcustomershasbeen economic factorsduring2015,suchaslowergasolinepricesandunemploymentratescoupledwith improving economicconditions.Ourcustomerhasexperiencedbothpositiveandnegativegeneral unemployment andfluctuatingfood,energymedicalcosts,thelasttofeeleffectsof core customersareoftenthefirsttobeaffectedbynegativeoruncertaineconomicconditionssuchas for severalyearsinanenvironmentwithongoingmacroeconomicchallengesanduncertainties.Our our substantialgrowthandfinancialsuccessovertheyears.Likeotherretailers,wehavebeenoperating convenient storeformatandbroadselectionofhigh-qualityproductsatcompellingvalueshavedriven always beenintenselyfocusedonhelpingthemmakethemostoftheirspendingdollars.We believeour space averagingapproximately7,400squarefeetperstore. products ateverydaylowprices(typically$10orless)inourconvenientsmall-boxlocations,withselling substantial discountstonationalbrands.We offerourcustomersthesenationalbrandandprivate leading manufacturers,aswellcomparablequalityandvalueprivatebrandselectionswithpricesat decor anddomestics,basicapparel.Ourmerchandiseincludeshigh-qualitynationalbrandsfrom beauty productsandpetsupplies,non-consumablesuchasseasonalmerchandise,home merchandise, includingconsumableproductssuchasfood,paperandcleaningproducts,health southern, southwestern,midwesternandeasternUnitedStates.We offerabroadselectionof stores locatedin43statesasofFebruary 26,2016,withthegreatestconcentrationofstoresin Executive Overview Introduction andinItem1Aofthisreport,respectively. Disclosure Regarding Forward-Looking StatementsandtheRiskFactors disclosuressetforthinthe Financial Statementsandthenotesthereto.ItalsoshouldbereadinconjunctionwithCautionary ANDANALYSIS MANAGEMENT’SDISCUSSION OFFINANCIALCONDITIONAND ITEM 7. We demonstrate ourcommitmenttotheaffordabilityneedsofcorecustomerbypricing • Ourin-stockimprovement initiativeisdesignedtoensuretherightproductsareavailableon • We seektodriveprofitablesalesgrowththroughinitiativessuchasimprovementinourin-stock Our operatingprioritiescontinuetoevolveasweconsistentlystriveimproveourperformance Because thecustomersweservearevalue-conscious,manywithloworfixedincomes,have We areamongthelargestdiscountretailers intheUnitedStatesbynumberofstores,with12,575 This discussionandanalysisshouldbereadwith,isqualifiedinitsentiretyby, theConsolidated reduction initiatives,privatebrandspenetration,efforts toimprovedistributionand focused onenhancingourmarginsthrougheffectivecategory management,inventoryshrink work toprovideeverydaylowpricesandmeetourcustomers’ affordabilityneeds,wealsoremain more than75%ofourstock-keepingunitsat$5orless asoftheend2015.However,we on ourprofitabilityexpectations,reallocatingresources asnecessary. disciplined approachtothislaborinvestmentandare abletoquicklyevaluatewhetheritdelivers retail laborhourinvestmenthadbeenimplementedacross over3,100stores.We havea we believesuchincreaseswillgeneratepositivefinancial returns.Asoftheend2015,this customer satisfaction,weareselectivelyinvestingincremental laborhoursinthosestoreswhere shelf whenourcustomersshopinstores.To supportthisinitiativeandimproveoverall RESULTS OFOPERATIONS 24 10-K consecutive quarter when compared to the consecutive quarter nd 25 transportation efficiencies, global sourcing, and pricing and markdown optimization. With respect With optimization. pricing and markdown global sourcing, and efficiencies, transportation margin the gross profitability because mix of sales affects management, the to category generally is lower than that associated within our consumables category associated with sales are within each category, however, there non-consumables categories. Even with sales within our respect to inventory shrink items. With margin associated with the specific varying levels of gross shrink declining across all four product in 2015 was broad-based with reduction, the progress of certain other margin- of the sales mix, as well as the results a discussion categories. For of Operations’’ below. in 2015, see ‘‘Results related initiatives in both customer traffic and average transaction amount. Consumables represented 76% of sales in both customer traffic and average transaction amount. Consumables The degree of success of these initiatives is often reflected in our same-store sales results and in in our same-store sales results of these initiatives is often reflected The degree of success To support our other operating priorities we also are focused on capturing growth opportunities and support our other operating priorities To continuously seeking ways to control costs that have established a position as a low-cost operator, We for ways to continue Our employees are a competitive advantage, and we are always searching cash flow management Our continued focus on these four operating priorities, coupled with strong • Sales in same-stores increased 2.8%, with increases Net sales in 2015 increased 7.7% over 2014. the level of improvement in shopper frequency and number of items sold and average transaction in shopper frequency and number the level of improvement initiatives helped to drive the quarter, we believe these ongoing the 2015 fourth amount. For both categories, reflecting increases in in three out of our four product same-store sales growth 32 average transaction amount for the customer traffic and prior year quarter. our store count, opening 730 stores during 2015. continued to expand innovating within our channel. We and remodeled or relocated a total of 881 stores also have continued our store remodeling efforts We to open 900 stores and to relocate or remodel 875 stores, and we during 2015. In fiscal 2016, we have plans footage growth of approximately six to eight percent during 2017. plan to maintain our accelerated square during 2016 we will implement the DG16 store format. continue to innovate within our channel, and We cooler doors, a redesigned queueing area, and other enhancements This store format will include additional demands of our core customer while also delivering on our that are focused on meeting the evolving testing a smaller format store (less than 6,000 square feet) which operating priorities. In addition, we are growth opportunities in metropolitan areas. we believe could allow us to capture have enhanced this position during the latter part of experience. We do not affect our customer’s shopping budgeting initiative, streamlining our business while also 2015 and into 2016 through our zero-based the same-store sales growth required to leverage selling, general reducing expenses. Our goal is to lower 255 positions expenses. As part of this initiative we reduced approximately and administrative (‘‘SG&A’’) in the third quarter of 2015 and expect to reinvest a portion of these within our corporate support function In addition, at the store level, we remain committed to savings in the business as we deem appropriate. so that those time savings can be reinvested by our store managers simplifying or eliminating various tasks service, improved in-stock levels, and improved store standards. in other areas such as ensuring customer to seek additional opportunities to enhance our low-cost position. will continue We work to ensure that our investing in them. Our training programs are continually evolving, as we invest in our employees in an employees have the tools necessary to be successful in their positions. We as we believe that, effort to create an environment that attracts and retains talented personnel, generally have longer tenures particularly at the store level, employees who are promoted from within we believe Furthermore, and are greater contributors to improvements in our financial performance. financial performance in that reducing our store manager turnover likely results in improved store have also implemented training programs for high-potential areas such as shrink and sales. We stable, engaged workforce. employees, and believe that these and other efforts will produce a more performance in 2015 as and share repurchases resulted in solid overall operating and financial to 0.01 percent of net sales. compared to 2014 as follows. Basis points, as referred to below, are equal 10-K on financialperformanceinthecurrentyearperiodsas comparedwiththeprioryearperiods. labor costsandnegativelyaffectouroperatingresults. exemptions undertheFair StandardsAct, Labor which,ifimplemented,areexpectedtoincreaseour shareholder return.However,wearefacingpotential regulatory changesrelatingtoovertime our commonstockandpayquarterlycashdividends, subject toBoarddiscretion,furtherenhance improvements, andinvestinginourpeople.Inaddition, weplantocontinuerepurchasesharesof costs outofthebusinessthatdonotaffectcustomer experience,ongoingsupplychain relocations andremodels. cooler doorsascomparedtoourpreviousnewstoreformatandwillbeutilizedforallstores, number ofitemssold.Ournewstoreformatwillofferatotal22coolerdoors,anincreasesix continued focusonon-shelfavailabilityandaffordabilityalsoshouldassistingrowingtransactions assortment andexpandintothosecategoriesthataremostlikelytodrivetrafficourstores.Our core customersegments.Thishelpsdriveourcategorymanagementprocess,asweoptimize updating ourcustomersegmentationtogaindeeperinsightsintothespendinghabitsforeachof objectives, andwehaveimplementedtargetedactionstodrivesame-storesalesin2016,suchas to continuecontributeourprofitablesalesgrowth.Same-storegrowthiskeyachieving growth in2016toagainbedrivenprimarilybyconsumables,althoughweexpectnon-consumablessales for $1.3billion. Readers shouldrefertothedetaileddiscussionofouroperatingresultsbelow foradditionalcomments Other key2016initiativesincludeourzero-basedbudgeting initiative,whichweexpecttotake In 2016,weplantocontinuefocusonourfourkeyoperatingpriorities.We expectoursales Also in2015,werepurchasedapproximately17.6millionsharesofouroutstandingcommonstock During2015weopened 730newstores,remodeledorrelocated881andclosed36stores. • Inventoryturnoverwas 4.7timesonarollingfour-quarterbasis.Inventoriesincreased4.3% • We generatedapproximately$1.38billionofcashflowsfromoperating activitiesin2015,an • We reportednetincomeof$1.17billion,or$3.95perdilutedshare,for2015,comparedto • Interestexpensedecreasedby$1.3millionin2015to$86.9million.Total long-termobligations • TheincreaseinSG&A,asapercentageofsales,wasdueprimarilytoincreasesincentive • Ourgrossprofitrateincreasedby27basispointsdueprimarilytolowertransportationcostsand • Operatingprofitincreased9.7%to$1.94billion,or9.5%ofsales,compared$1.77 • per storebasisover2014. quarterly cashdividends. activities toinvestinthegrowthofourbusiness,repurchasecommonstock,andpay increase of4.8%comparedto2014.We primarilyutilizedourcashflowsfromoperating 2014 and2015contributedtotheincreaseindilutedearningspershare. income of$1.07billion,or$3.49perdilutedshare,for2014.Stockrepurchaseactivityduring as ofJanuary29,2016were$2.97billion. see thedetaileddiscussionthatfollows. compensation expense,repairsandmaintenanceexpenseoccupancycosts.For otherfactors, a lowerrateofinventoryshrinkage. SG&A. point increaseinourgrossprofitrate,whichwaspartiallyoffsetbya10basis-point 9.4% ofsalesin2014.Theincreaseouroperatingprofitratewasattributabletoa27basis- in 2014. perishables, tobacco,andfood.Average salespersquarefootin2015were$226,upfrom$223 in 2015.Departmentswiththemostsignificantincreasesnetsaleswerecandyandsnacks, 26 10-K 0.3 — (18.9) (100.0) (1.3) (1.5) (0.8) (0.8) 72.4 11.8 12.3 2.0 84.1 7.0 89.7 8.0 60.7 5.8 71.0 7.3 2015 vs. 2014 2014 vs. 2013 332.4 8.2 333.9 9.0 171.2 9.7 32.9 1.9 172.2 10.2 52.5 3.2 503.6 8.7 366.8 6.7 177.7 7.6 85.5 3.8 955.4 7.3 1,038.7 8.6 Amount % Amount % $ 0.46 13.2% $ 0.32 10.1% $ 99.7 9.4% $ 40.2 3.9% $1,136.5 7.9% $1,159.3 8.8% $1,459.0 7.7% $1,405.4 8.0% 18.9 27 3.95 $ 3.49 $ 3.17 5.72% 5.63% 5.86% 3.38% 3.26% 3.45% 9.53%86.9 9.36% 88.2 9.92% 89.0 0.43% 0.47% 0.51% 0.00% 0.00% 0.11% 9.10% 8.89% 9.30% 6.33% 6.37% 6.37% 5.39% 5.49% 5.53% 687.9 615.5 603.2 21.43% 21.33% 21.14% 30.96% 30.69% 31.05% 75.89%12.39% 75.73% 12.40% 75.19% 12.91% 69.04% 69.31% 68.95% 2015 2014 2013 Change Change Change Change 1,165.1 $ 1,065.3 $ 1,025.1 4,365.8 4,033.4 3,699.6 1,940.3 1,769.1 1,736.2 1,853.0 1,680.9 1,628.3 6,306.1 5,802.5 5,435.7 2,522.7 2,345.0 2,259.5 1,289.4 1,205.4 1,115.6 1,098.8 1,038.1 967.2 14,062.5 13,107.1 12,068.4 $15,457.6 $14,321.1 $13,161.8 $20,368.6 $18,909.6 $17,504.2 ..... The following text contains references to years 2015, 2014, and 2013, which 2015, 2014, and 2013, references to years text contains The following ...... $ ...... 0.3 — The nature of our business is seasonal to a certain extent. Primarily because of sales because Primarily business is seasonal to a certain extent. The nature of our ...... The net sales increase in 2015 reflects a same-store sales increase of 2.8% compared to The net sales increase in 2015 reflects a same-store sales increase of 2.8% ...... $ ...... Net Sales. Accounting Periods. Accounting Seasonality. of operations data for fiscal years 2015, 2014 and 2013, and The following table contains results expenses % of net sales Diluted earnings per share % of net sales Net income % of net sales Operating profit % of net sales Interest expense % of net sales Other (income) expense % of net sales Income before income taxes % of net sales Income taxes % of net sales Selling, general and administrative % of net sales % of net sales Seasonal Home products % of net sales Apparel % of net sales Cost of goods sold % of net sales Net sales Gross profit 2014. For 2015, there were 11,706 same-stores which accounted for sales of $19.25 billion. Same-stores 2015, there were 11,706 same-stores 2014. For at the end of the reporting include stores that have been open for at least 13 months and remain open calendar weeks in the period. Changes in same-store sales are calculated based on the comparable Net sales by category: Consumables (amounts in millions, except per share amounts) Results of Operations Results Our 2015, and January 31, 2014, respectively. ended January 29, 2016, January 30, represent fiscal years fiscal years were 52-week accounting closest to January 31. All referenced the Friday fiscal year ends on periods. have (November, December and January) merchandise, sales in our fourth quarter of holiday-related year. the first three quarters of the fiscal than sales achieved in each of historically been higher a of a period shorter than by quarter. Results a greater extent operating profit, vary Expenses, and to nature the seasonal the entire year. Furthermore, be indicative of results expected for full year may not of more information about the seasonality For affect comparisons between periods. of our business may this report. 1, Item 1 of included in Part our business, see ‘‘Seasonality’’ among those years. the dollar and percentage variances 10-K $8.5 millionforalegalsettlementofpreviouslydecertified collectiveaction. $14.3 millionrelatingtoanacquisitionthatwasnotcompleted, whilethe2013resultsincludeexpensesof reduction inworkers’compensationandgeneralliability expenses.The2014periodincludedexpensesof the introductionofconveniencefeeschargedtocustomers forcashbackondebitcardtransactions,anda these increasedcostswereretaillaborexpense,which increased ataratelowerthanourincreaseinsales, compensation program.The2014resultsalsoreflectincreases inrentandutilities.Partially offsetting our 2013financialperformancedidnotsatisfycertain performance requirementsunderourcashincentive of 19basispoints.The2014resultsreflectasignificant increaseinincentivecompensationexpense,as or 8basispointsasapercentageofsales,relatedtoanacquisitionthatwasnotcompleted. increased conveniencefeescollectedfromcustomers.The2014resultsreflectexpensesof$14.3million, transactions. Partially offsettingtheseitemswasahighervolumeofcashbacktransactionsresultingin repairs andmaintenanceexpenses,occupancycosts,feesassociatedwithanincreaseindebitcard increase of10basispoints.The2015resultsreflectincreasesinincentivecompensationexpenses, $4.2 millionin2014comparedtoaLIFObenefitof$11.02013. factors werepartiallyoffsetbyhigherinitialinventorymarkups.We recordedaLIFOprovisionof lower marginconsumablesincludingtobaccoproductsandexpandedperishablesofferings.These consumables comprisingalargerportionofournetsales,primarilyastheresultincreasedsales increased promotionsdrivenbycompetitivepressures.Inaddition,weexperiencedacontinuedtrendof most significantfactoraffectingthegrossprofitratewasanincreaseinmarkdowns,primarilydueto Gross profitincreasedby6.7%in2014,andasapercentageofsales,decreased36basispoints.The $4.2 millionin2014. markdowns. We recordedaLIFObenefitof$2.3millionin2015comparedtoprovision transportation costsandanimprovedrateofinventoryshrinkage,partiallyoffsetbyincreased points. Thegrossprofitrateincreasein2015ascomparedto2014primarilyreflectslower in 2014.Grossprofitincreasedby8.7%2015,andasapercentageofsales,27basis and strivetoadjustitwhenappropriate. years. Becauseoftheimpactsalesmixongrossprofit,wecontinuallyreviewourmerchandise gross profitratethantheotherthreecategories,hasgrownmostsignificantlyoverpastseveral snacks contributingthemajorityofincreaseinsalesconsumables. consumables outpacedournon-consumables,withsalesoftobaccoproducts,perishables,andcandy the expansionofperishables,andenhancedutilizationstoresquarefootage.Increasesinsales refinement oftheCompany’smerchandiseofferings,includingafullyear’ssalestobaccoproducts, increase insalesreflectsincreasedcustomertrafficandaveragetransactionamountsresultingfromthe increase insales2014wasattributabletonewstores,partiallyoffsetbyfromclosedstores.The 2014, therewere11,052same-storeswhichaccountedforsalesof$17.82billion.Theremainderthe tobacco products,andfoodcontributingthemajorityofincreaseinsalesconsumables. of consumablesslightlyoutpacedournon-consumables,withsalescandyandsnacks,perishables, increase insalesreflectsincreasedcustomertrafficandaveragetransactionamounts.Increases increase insales2015wasattributabletonewstores,partiallyoffsetbyfromclosedstores.The prior year,andincludestoresthathavebeenremodeled,expandedorrelocated.Theremainderofthe SG&A expensewas21.3%asapercentageofsalesin2014comparedto21.1%2013,anincrease SG&A. The grossprofitrateasapercentageofsaleswas30.7%in2014comparedto31.1%2013. Gross Profit. Of ourfourmajormerchandisecategories,theconsumablescategory,whichgenerallyhasalower The netsalesincreasein2014reflectsasame-storeof2.8%comparedto2013.For SG&A was21.4%asapercentageofsalesin2015comparedto21.3%2014,an The grossprofitrateasapercentageofsaleswas31.0%in2015comparedto30.7% 28 10-K 29 In 2015, we recorded pretax losses of $0.3 million related to the pretax losses of $0.3 million related In 2015, we recorded Interest expense decreased $1.3 million to $86.9 million in 2015 compared to million in 2015 $1.3 million to $86.9 decreased Interest expense The effective income tax rates for 2015, 2014 and 2013 were expenses of 37.1%, The effective income tax rates for 2015, Interest expense remained relatively constant in 2014 compared to 2013. relatively constant in 2014 Interest expense remained million as of January 29, 2016 debt of $686.6 million and $62.0 had outstanding variable-rate We Other (Income) Expense. Income Taxes. was 37.1% compared to a rate of 36.6% for 2014 which The effective income tax rate for 2015 was 36.6% compared to a rate of 37.0% for 2013 which The effective income tax rate for 2014 structure underlying the leases for three of our distribution The entities involved in the ownership little or no overall product cost inflation in 2015, 2014 and 2013. experienced We $3.91 billion in cash During the past three years, we have generated an aggregate of approximately Interest Expense. 2014. See the detailed discussion under ‘‘Liquidity and Capital Resources’’ regarding the financing of regarding the Resources’’ and Capital under ‘‘Liquidity the detailed discussion 2014. See obligations. various long-term rate swaps in the impact of interest respectively, after taking into consideration and January 30, 2015, 2016 and indebtedness at January 29, 2015. The remainder of our outstanding effect at January 30, fixed rate debt. January 30, 2015 was from the losses of $18.9 million resulting debt. In 2013, we recorded pretax refinancing of long-term senior secured credit facilities. termination of our 36.6% and 37.0%, respectively. points. The effective income tax rate was lower in 2014 due represents a net increase of 0.5 percentage releases in 2014 that did not reoccur, to the same extent, in principally to federal and state reserve significant income tax benefit related to wages paid to certain 2015. As in prior years, we receive a Credit Tax Opportunity for federal jobs credits (principally the Work newly hired employees that qualify or ‘‘WOTC’’). the federal law authorizing the In December 2015, Congress retroactively extended on current based 1, 2015 through December 31, 2019. Accordingly, WOTC for the period from January for our 2016 through 2019 fiscal years. law, the WOTC should be available points. The effective income tax rate decreased from 2013 represents a net decrease of 0.4 percentage of state income tax examinations and other state income tax due principally to the favorable resolution amount in 2014 compared to 2013. reserves, which increased by a lesser Off Balance Sheet Arrangements Interest Entity (‘‘VIE’’). One of these distribution of a Variable centers meet the accounting definition obligation whereby its property and equipment are reflected centers has been recorded as a financing The land and buildings of the other two distribution centers have in our consolidated balance sheets. are not the primary beneficiary of these VIEs and, accordingly, been recorded as operating leases. We Other than the foregoing, we have not included these entities in our consolidated financial statements. are not party to any material off balance sheet arrangements. Effects of Inflation Liquidity and Capital Resources Developments Condition and Recent Current Financial in capital expenditures. During flows from operating activities and incurred approximately $1.42 billion growth of that period, we expanded the number of stores we operate by 1,977, representing 19% of the stores approximately 19%, and we remodeled or relocated 2,378 stores, or approximately intend to continue our current strategy of pursuing store we operated as of January 29, 2016. We growth, remodels and relocations in 2016. 10-K addition, wehadoutstandingcommerciallettersofcredit of$11.7million. $251.0 million,standbylettersofcredit$27.0 andborrowingavailabilityof$722.0million.In events ofdefault. January 29,2016,wewereincompliancewithallsuch covenants.TheFacilities alsocontaincustomary maintenance ofaminimumfixedchargecoverageratio andamaximumleverageratio.Asof additional subsidiaryindebtedness.TheFacilities alsocontainfinancialcovenantsthatrequirethe consummate certainfundamentalchangesorchange in theCompany’slinesofbusiness;andincur and itssubsidiariesabilityto:incuradditionalliens;sellallorsubstantiallyofourassets; and negativecovenantsthat,amongotherthings,restrict,subjecttocertainexceptions,theCompany’s no requiredamortizationundertheFacilities. TheFacilities containanumberofcustomaryaffirmative Facilities was1.65%asofJanuary29,2016. senior unsecureddebtratings.Theweightedaverageall-ininterestrateforborrowingsunderthe credit feesundertheFacilities aresubjecttoadjustmentfrom time tobasedonourlong-term Revolving Facility. Theapplicableinterestratemarginsforborrowings,thefacilityfeesandletterof commitment amountsoftheFacilities, andcustomaryfeeson letters ofcreditissuedunderthe and 0.10%forbase-rateborrowings.We mustalsopayafacilityfee,payableonanyusedandunused applicable interestratemarginforborrowingsasofJanuary29,2016was1.10%LIBOR plus, atouroption,either(a)LIBORor(b)abaserate(whichisusuallyequaltotheprimerate).The Facilities arescheduledtomatureonOctober20,2020. ‘‘Revolving Facility’’) whichprovidesfortheissuanceofletterscreditupto$175.0million.The loan facility(the‘‘Term Facility’’) anda$1.0billionseniorunsecured revolvingcreditfacility(the our seniorunsecuredcreditfacilities.TheFacilities consistofa $425.0millionseniorunsecuredterm Facilities operations. debt, equityorothersecurities,theproceedsofwhichcouldprovideadditionalliquidityforour conditions inthecapitalmarketsandotherfactors,wemayfromtimetoconsiderissuanceof numerous factors,manyofwhichareoutsideourcontrol.Dependingonliquiditylevels, as thenextseveralyears.However,ourabilitytomaintainsufficientliquiditymaybeaffectedby spending andanticipateddividendpaymentsforaperiodthatincludesthenexttwelvemonthsaswell sufficient liquiditytofundourcurrentobligations,projectedworkingcapitalrequirements, under theFacilities asdiscussedingreaterdetailbelowandaccesstothedebtmarketswillprovide acquisition, resultinginhigherthannormalcashandequivalentsbalancesattheendof2014. suspension ofsharerepurchasesduringtheportion2014thatcoincidedwithourattempted reference. Cashandcashequivalentsdecreasedby$421.9millionin2015,primarilyduetothe Facilities and2015Refinancing’’ containedinPart II,Item8ofthisreportisincorporatedhereinby information containedinNote5totheconsolidatedfinancialstatementsunderheading‘‘Borrowing below. We had$722.0millionavailablefor borrowingundertheFacilities atJanuary29,2016.The includes balancesundertheFacilities, andseniornotes,allofwhicharedescribedingreaterdetail outstanding debt(includingthecurrentportionoflong-termobligations)$2.97billion,which outstanding $2.3billionaggregateprincipalamountofseniornotes.At January29,2016,wehadtotal As ofJanuary29,2016,undertheRevolving Facility, theCompanyhadoutstandingborrowingsof The Facilities canbevoluntarilyprepaidinwholeorpartat anytimewithoutpenalty.Thereis Borrowings undertheFacilities bearinterestatarateequalto anapplicableinterestratemargin On October20,2015,weconsummatedarefinancingpursuanttowhichamendedandrestated We believeourcashflowfromoperations andexistingcashbalances,combinedwithavailability We haveafive-year$1.425billionunsecured creditagreement(the‘‘Facilities’’), andwehave 30 10-K 31 For the remainder of fiscal 2016, we anticipate potential borrowings under the Revolving Facility the Revolving borrowings under we anticipate potential of fiscal 2016, the remainder For notes principal amount of 4.150% senior we issued $500.0 million aggregate On October 20, 2015, at any time at redemption prices set forth in the may redeem some or all of the Senior Notes We limiting, among other things, our ability (subject to The Senior Indenture contains covenants for events of default which, if any of them occurs, would The Senior Indenture also provides and subsequently leased In January 2014 we consummated a transaction pursuant to which we sold our senior unsecured debt rating and our corporate raised In October 2015, Standard & Poor’s up to a maximum of approximately $500 million outstanding at any one time, including any anticipated any one time, including outstanding at $500 million of approximately up to a maximum repurchases of common stock. borrowings to fund Senior Notes to mature on of $0.8 million, which are scheduled Senior Notes’’), net of discount due 2025 (the ‘‘2025 senior aggregate principal amount of 4.125% In addition, we have $500.0 million November 1, 2025. scheduled to mature on July 15, 2017, ‘‘2017 Senior Notes’’) which are notes due 2017 (the Notes’’), senior notes due 2018 (the ‘‘2018 Senior principal amount of 1.875% $400.0 million aggregate million mature on April 15, 2018; and $900.0 $0.2 million, which are scheduled to net of discount of of discount 2023 (the ‘‘2023 Senior Notes’’), net amount of 3.25% senior notes due aggregate principal Notes, 15, 2023. Collectively, the 2017 Senior are scheduled to mature on April of $1.8 million, which Notes and the 2025 Senior Notes comprise the ‘‘Senior Notes’’, the 2018 Senior Notes, the 2023 Senior to an indenture as supplemented and amended by supplemental each of which were issued pursuant Senior Notes (as so supplemented and amended, the ‘‘Senior indentures relating to each series of Notes is payable in cash on January 15 and July 15 of each Indenture’’). Interest on the 2017 Senior and the 2023 Senior Notes is payable in cash on April 15 and year. Interest on the 2018 Senior Notes the 2025 Senior Notes is payable in cash on May 1 and October 15 of each year. Interest on on May 1, 2016. The net proceeds from the sale of the 2025 November 1 of each year, commencing to repay all outstanding borrowings under the Facilities, Senior Notes were used, together with credit agreement and for general corporate purposes. borrowings under the then-existing of a change of control triggering event, which is defined in the Senior Indenture. Upon the occurrence Senior Notes has the right to require us to repurchase some or all Senior Indenture, each holder of our price in cash equal to 101% of the principal amount of such holder’s Senior Notes at a purchase if any, to, but excluding, the repurchase date. thereof, plus accrued and unpaid interest, or sell or otherwise dispose of all or substantially all of our certain exceptions) to consolidate, merge, of our subsidiaries to incur or guarantee indebtedness secured by assets; and our ability and the ability significant subsidiaries. liens on any shares of voting stock of to become or to be permit or require the principal of and accrued interest on our Senior Notes declared due and payable, as applicable. Sale Leaseback Transaction This transaction resulted in back the land, buildings and related improvements for 233 of our stores. cash proceeds of approximately $281.6 million. Rating Agencies our senior unsecured debt debt rating to BBB, both with a stable outlook, and Moody’s reaffirmed ratings, as well as future rating rating of Baa3 and changed our outlook to positive. Our current credit satisfactory terms; (ii) affect agency actions, could (i) impact our ability to finance our operations on requirements necessary for our financing costs; and (iii) affect our insurance premiums and collateral to maintain or improve our our self-insured programs. There can be no assurance that we will be able current credit ratings. 10-K Contractual obligations c Operatingleaseobligations areinclusiveofamountsincludedindeferredrentourconsolidated (c) We retainasignificant portionoftheriskforourworkers’compensation,employeehealth (b) Represents obligationsforinterestpaymentsonlong-termdebtandcapitalleaseobligations, (a) Total contractualobligationsand Purchase obligations(e) ofcredit Letters Commercial commitments(d) Operating leaseobligations(c) Self-insurance liabilities(b) Interest(a) Capital leaseobligations debtobligations Long-term commitments asofJanuary29,2016(inthousands): Contractual Obligations below. For moreinformationseeItem7A,‘‘QuantitativeandQualitativeDisclosuresaboutMarketRisk’’ amount of$875.0millionexpired,andatJanuary29,2016,wehadnooutstandinginterestrateswaps. outstanding amountsunderourFacilities. OnMay31,2015,interestrateswapswithatotalnotional in thevalueofunderlyingeconomicexposure.Ourprincipalinterestrateexposurerelatesto hedged, fluctuationsinthevalueoffinancialinstrumentsaregenerallyoffsetbyreciprocalchanges of highcorrelationbetweenthederivativefinancialinstrumentandunderlyingexposurebeing rates. Theseswapsareintendedtoreduceriskbyhedginganunderlyingeconomicexposure.Because Interest RateSwaps commercial commitments(f) ..... Subtotal Subtotal balance sheets. other amountsarereflectedonanundiscountedbasis inourconsolidatedbalancesheets. of amergertransactionin2007werediscountedorder toarriveatestimatedfairvalue.All assumptions. Reserves forworkers’compensationandgeneralliabilitywhich existedasofthedate have scheduledmaturities,theseamountsrepresentundiscounted estimatesbaseduponactuarial insurance, generalliability,propertylossandautomobile insurance.Astheseobligationsdonot $10.6 million,andthebalanceofseniortermloanfacility$425million. a balanceof$251millionasJanuary29,2016),theourtaxincrementfinancing Variable ratelong-termdebtincludesthebalanceofseniorrevolvingcreditfacility(whichhad includes projectedinterestonvariableratelong-termdebt,using2015yearendratesandbalances. The followingtablesummarizesoursignificantcontractualobligationsandcommercial From timetotime,weuseinterestrateswapsminimizetheriskofadversechangesin ...... $ ...... $ ...... $ ...... 1,9,0 17502$,4,9 21151$4,985,833 $2,181,531 $2,747,891 $1,775,052 $11,690,307 $4,985,833 $2,181,531 $2,747,891 $1,040,742 $10,955,997 ,2,4 6,4 ,1,3 ,5,6 3,394,301 1,353,567 1,614,931 $1,408,525 677,080 866,444 $ 900,770 $ 7,229,243 215 $ 2,986,590 oa er1-3yas3-5yas5+years 3-5years 1-3years <1year Total oa er1-3yas3-5yas5+years 3-5years 1-3years <1year Total 3,1 3,1 — $ — $ — $ 734,310 $ 18,677 722,630——— 734,310 722,630 163,020 30,388 119,576 89,438 141,340 83,293 89,626 221,796 513,562 160$1,8 — $ — $ — $ 11,680 $ 11,680 ,0 ,6 ,1 2 1,310 920 1,412 1,164 4,806 32 Commitments ExpiringbyPeriod Payments DuebyPeriod 10-K 33 Cash flows from operating activities were $1.38 billion in supplies, fixtures, letters of credit for import merchandise, and other inventory purchase merchandise, and credit for import fixtures, letters of supplies, obligations. subject to letters of credit). purchases (excluding such purchases fixtures, and merchandise reliable estimates of the currently unable to make reasonably are totals. We reflected in these the $8.7 million of reserves for uncertain with the taxing authorities for period of cash settlement tax positions. to our authorized a $1.0 billion increase the Company’s Board of Directors On December 2, 2015, approved a quarterly cash dividend to shareholders of On March 8, 2016, the Board of Directors approximately 54% of our total assets exclusive of goodwill and Our inventory balance represented involved in a number of As described in Note 8 to the consolidated financial statements, we are Cash flows from operating activities. (d) and support agreements, technology license information commitments include Commercial (e) support, supplies, for software licenses and obligations include legally binding agreements Purchase (f) tax positions that are not obligations associated with uncertain have potential payment We Program Share Repurchase Our common stock repurchase program had a total existing common stock repurchase program. $924 million at January 29, 2016. Under the authorization, remaining authorization of approximately market or in privately negotiated transactions from time to time purchases may be made in the open more detail and the authorization has no expiration date. For subject to market and other conditions, see Note 12 to the consolidated financial statements. about our share repurchase program, Other Considerations April 12, 2016 to shareholders of record on March 29, 2016, an $0.25 per share which will be paid on dividends paid in 2015. Although the Board currently intends increase of $0.03 per share over quarterly the payment of future cash dividends are subject to the to continue regular quarterly cash dividends, upon, among other things, our results of operations, cash Board’s discretion and will depend restrictions and other factors that our Board may deem requirements, financial condition, contractual relevant. 29, 2016. Our ability to effectively manage our inventory balances other intangible assets as of January cash flows from operations during a given fiscal year. Inventory can have a significant impact on our in nature, such as the purchase of warm-weather or Christmas- purchases are often somewhat seasonal of our inventory has been and continues to be an area of related merchandise. Efficient management focus for us. cash payments. Adverse legal actions and claims, some of which could potentially result in material also have certain liquidity. We developments in those actions could materially and adversely affect our financial statements. Future income tax-related contingencies as disclosed in Note 4 to the consolidated negative developments could have a material adverse effect on our liquidity. Cash Flows of the increase in cash 2015, an increase of $63.2 million compared to 2014. Significant components net income due primarily to flows from operating activities in 2015 compared to 2014 include increased of above under ‘‘Results increased sales and operating profit in 2015 as described in more detail of working capital, increasing by Operations.’’ Changes in merchandise inventories resulted in a net use payable below. Accounts a greater amount in 2015 compared to 2014 as described in greater detail in 2014, due primarily to the increased by $105.6 million in 2015 compared to a $97.2 million increase timing of merchandise receipts and related payments. 10-K store growthaswellourremodelandrelocationinitiatives, includingcapitaloutlaysforleasehold 875 storestoberemodeledorrelocated.Capitalexpenditures in2016areanticipatedtosupportour continue toinvestinstoregrowthanddevelopmentof approximately900newstoresand and wealsoexpecttohavesignificantavailabilityunder ourRevolving Facility ifnecessary.We planto anticipate funding2016capitalrequirementswithexisting cashbalances,flowsfromoperations, resulted inproceedsfromthesaleoftheseproperties ofapproximately$281.6million. stores. Oursale-leasebacktransactionwhichweconsummated inJanuary2014for233ofourstores technology-related projects.During2013,weopened 650 newstoresandremodeledorrelocated582 stores purchasedorbuiltbyus;and$28millionforinformationsystemsupgrades significant portionoftheconstructioncostadistributioncenterinPennsylvania; $76millionfor stores; $124millionfornewleased$112distributioncenters,whichincludeda approximate amounts:$187millionforimprovements,upgrades,remodelsandrelocationsofexisting sale-leaseback transactionin2013(morefullydescribedbelow). 915 stores.Cashflowsfrominvestingactivitiesdecreased2013to2014,dueprimarilya technology-related projects.During2014,weopened700newstoresandremodeledorrelocated projects; $38millionforstoresbuiltbyus;and$35informationsystemsupgrades stores; $102millionfornewleased$64distributionandtransportation-related approximate amounts:$127millionforimprovements,upgrades,remodelsandrelocationsofexisting 730 newstoresandremodeledorrelocated881stores. and therelatedpropertyequipmentpurchasesinanygivenperiod.During2015,weopened relocated storeopeningsalongwithotherfactorsmayaffecttherelationshipbetweensuch information systemsupgradesandtechnology-relatedprojects.Thetimingofnew,remodeled projects; $99millionfornewleasedstores;$53storesbuiltbyus;and$34 remodels andrelocationsofexistingstores;$144millionfordistributiontransportation-related in 2015includedthefollowingapproximateamounts:$168millionforimprovements,upgrades, 13%, in2014,anddecreasedby$29.5million,or9%,2013. in 2013.Theapparelcategorydecreasedby$2.7million,or1%,2015,increased$37.1 $12.8 million,or5%,in2015,wasessentiallyunchanged2014,andincreasedby$22.09%, 3%, in2014,anddecreasedby$4.7million,or1%,2013.Thehomeproductscategoryincreased or 12%,in2013.Theseasonalcategoryincreasedby$63.2million,13%,2015,$13.8 increased by$218.4million,or13%in2015,$178.412%,2014,and$168.0 10% in2015,by9%2014,and7%2013.Inventorylevelstheconsumablescategory Easter holidayin2016,andourin-stockimprovementinitiative.Merchandiseinventoriesincreasedby factors. InventorybalancesatJanuary29,2016wereimpactedbyanewDCinTexas, thetimingof fluctuate fromperiodtobasedonnewstoreopenings,thetimingofpurchases,andother primarily tothevolumeandtimingofdomesticmerchandisereceipts. compared toa$36.9millionincreasein2013.Theaccountspayableduring2014wasdue below, whichwaspartiallyoffsetbyaccountspayable,increased$97.2millionin2014 inventories increasedbyagreateramountin2014comparedto2013asdescribeddetail profit in2014asdescribedmoredetailaboveunder‘‘Results ofOperations.’’Merchandise 2014 comparedto2013includeincreasednetincomedueprimarilysalesandoperating compared to2013.Significantcomponentsoftheincreaseincashflowsfromoperatingactivities Capital expendituresduring2016areprojectedtobe in therangeof$550-$600million.We Significant componentsofpropertyandequipmentpurchasesin2013includedthefollowing Significant componentsofpropertyandequipmentpurchasesin2014includedthefollowing Cash flowsfrominvestingactivities. On anongoingbasis,wecloselymonitorandmanageourinventorybalances,theymay Cash flowsfromoperatingactivitieswere$1.31billionin2014,anincreaseof$101.7million Significant componentsofpropertyandequipmentpurchases 34 10-K 35 In 2015, we repurchased 17.6 million outstanding shares of 17.6 million outstanding shares In 2015, we repurchased Cash flows from financing activities. Cash flows from financing In 2014, we repurchased 14.1 million outstanding shares of our common stock at a total cost of of our common stock at a total 14.1 million outstanding shares In 2014, we repurchased activities reflect a refinancing in April 2013, including the The 2013 cash flows from financing issued new guidance related to lease accounting. This guidance 2016, the FASB In February accounting The preparation of financial statements in accordance with generally accepted they involve Management believes the following policies and estimates are critical because improvements, fixtures and equipment; the construction of new stores; costs to support and enhance stores; costs to of new equipment; the construction fixtures and improvements, technology center facilities; existing distribution including new and chain initiatives our supply as routine and ongoing capital requirements. initiatives; as well our common stock at a total cost of $1.3 billion. We made repayments of $500.0 million on the balance made repayments at a total cost of $1.3 billion. We our common stock senior notes. Net of $499.2 million from the issuance of and had proceeds Facility, of the Term 2015 were $251.0 million. during Facility the Revolving borrowings under Borrowings Facility. of the Term of $75.0 million on the balance made repayments $800.1 million. We amount, resulting the 2014 period were the same during Facility the Revolving and repayments under during 2014. Facility Revolving to amounts outstanding under the in no net increase the and Facility includes the $1.0 billion unsecured Term issuance of long-term obligations which were from these transactions $1.3 billion. Proceeds issuance of Senior Notes totaling approximately term loan and revolving credit facilities which had balances of used to repay our previous secured were Facility refinanced. Net repayments under the Revolving $1.96 billion and $155.6 million when costs and hedging fees totaling $29.2 million in 2013 paid debt issuance $130.9 million during 2013. We we repurchased 11.0 million outstanding shares of our common related to the refinancing. Also in 2013, stock at a total cost of $620.1 million. Accounting Standards accounting under which a lessee will account for leases as finance requires a dual approach for lessee leases and operating leases will result in the lessee recognizing leases or operating leases. Both finance lease liability on its balance sheet, with differing methodology a right-of-use asset and a corresponding guidance is effective for public business entities for fiscal years, for income statement recognition. This beginning after December 15, 2018, and early adoption is and interim periods within those years, approach is required for all leases existing or entered into after the permitted. A modified retrospective are currently period in the consolidated financial statements. We beginning of the earliest comparative this guidance will have on our consolidated financial statements, assessing the impact that adoption of because of our significant volume of lease contracts. and we are anticipating a material impact and Estimates Critical Accounting Policies requires management to make estimates and principles in the United States (‘‘U.S. GAAP’’) to the estimates assumptions that affect reported amounts and related disclosures. In addition that require estimation, but are presented below, there are other items within our financial statements believe these estimates are reasonable and appropriate. not deemed critical as defined below. We used, the resulting However, if actual experience differs from the assumptions and other considerations as a whole. changes could have a material effect on the financial statements taken the development and significant judgments, assumptions, and estimates. Management has discussed Committee of our Board of Directors, and selection of the critical accounting estimates with the Audit presented below relating to those policies and Committee has reviewed the disclosures the Audit discussion of our principal estimates. See Note 1 to the consolidated financial statements for a detailed accounting policies. 10-K impacted. charge. Ifthesejudgmentsorassumptionsareincorrect orflawed,theanalysiscouldbenegatively indicated byrecentanalyses.Future indicatorsofimpairmentcouldresult in anassetimpairment materially affectthedeterminationoffairvalueorimpairment, however,suchaconclusionisnot recent yearshavebeenmateriallyaccurate.Changesin theseestimatesandassumptionscould recent financialperformance,markettrends,strategic plansandotheravailableinformation,whichin projections arebasedonmanagement’sand representbestestimatestakingintoaccount computing theimpliedfairvalueofgoodwillifnecessary, andotherassumptions.Future cashflow cash flows,determiningappropriatediscountrates,correctly applyingvaluationtechniques,correctly assumptions. Ifrequired,judgmentsinthequantitativetestingprocessmayincludeprojectingfuture appropriate factorstoconsiderandtherelativeimportanceofthosealongwithother judgments and/orassumptions.Theanalysisofqualitativefactorsmayincludedeterminingthe valuation andanypotentialimpairmentofgoodwillotherintangibleassetsareeachsubjectto merchandise inventoryvaluationthatreasonablyapproximatescostonaconsistentbasis. reporting periodwillincludetheimpactofadjustingtoactualresults. inventories yielddifferentresultsthantheestimatedaccrual,oureffectiveshrinkrateforagiven based onthestore’smostrecenthistoricalshrinkrate.To theextentthatsubsequentphysical period. Thisaccrualiscalculatedasapercentageofsalesateachretailstore,departmentlevel, estimated shrinkoccurringsubsequenttoaphysicalinventorythroughtheendoffiscalreporting shrink provisionbasedonactualphysicalinventoryresultsduringthefiscalperiodandanaccrualfor timing ofmarkdownsmayvarysignificantlyfromyeartoyear. greater thanestimatedmarkdownstoenticeconsumerpurchasesofexcessinventory.Theamountand unseasonable weatherpatterns.Certainofthesefactorsareoutsideourcontrolandmayresultin based onchangesincompetitors’practices,consumerpreferences,spendingand periods. estimated belowcostmarkdownsnotyetrecorded,butrequiredtoliquidatesuchinventoryinfuture inventory onaquarterlybasistoanLCMvaluebasedvariousmanagementassumptionsincluding year-end inventorylevels.We alsoperform analysesfordeterminingobsoleteinventory,adjusting are basedonmanagement’sannualestimatesofsalesandtherateinflationordeflation,aswell each yearbasedontheinventorylevelsandcostsatthattime.Incontrast,interimLIFOcalculations the indexformulation.AnactualvaluationofinventoryunderLIFOmethodismadeatend physical inventories,andtimelyrecordingofmarkdownsneededtosellinventory. include ensuringdepartmentsconsistofuniformproducts,recordingestimatedshrinkagebetween impact theendinginventoryvaluationatcost,aswellgrossprofitrecognized.Thesejudgments the retailinventorymethodcalculationarecertainmanagementjudgmentsandestimatesthatmay permanent markdownsarecurrentlytakenasareductionoftheretailvalueinventories.Inherentin of cost,sellingpricerelationshipandturnover.TheRIMwillresultinvaluinginventoriesatLCMif We applytheRIMtothesedepartments, whicharegroupsofproductsthatfairlyuniforminterms which arecomputedutilizingacalculatedcost-to-retailinventoryratioatandepartmentlevel. inventory method(‘‘RIM’’)tocalculategrossprofitandtheresultingvaluationofinventoriesatcost, (‘‘LCM’’) withcostdeterminedusingtheretaillastin,firstout(‘‘LIFO’’)method.We usetheretail Goodwill andOtherIntangibleAssets. We believeourestimatesandassumptionsrelatedtotheapplicationofRIMresultsina We performphysicalinventoriesinvirtuallyallofourstoresonanannualbasis.We calculateour Factors consideredinthedeterminationofmarkdownsinclude currentandanticipateddemand We performanannualLIFOanalysiswhereby allmerchandiseunitsareconsideredforinclusionin Merchandise Inventories. Merchandise inventoriesarestatedatthelowerofcostormarket The qualitativeandquantitativeassessmentsrelatedtothe 36 10-K 37 We are subject to legal, regulatory and other proceedings are subject We Income tax reserves are determined using the methodology Impairment of long-lived assets results when the carrying value Impairment of long-lived assets results Property and equipment are recorded at cost. We group our assets into group cost. We and equipment are recorded at Property We retain a significant portion of the risk for our workers’ compensation, retain a significant portion of the risk for our We Our most recent testing of our goodwill and indefinite lived trade name intangible assets was name intangible indefinite lived trade our goodwill and recent testing of Our most Property and Equipment. Impairment of Long-lived Assets. Insurance Liabilities. Contingent Liabilities—Income Taxes. Contingent Liabilities—Legal Matters. completed during the third quarter of 2015. No indicators of impairment were evident and no were evident No indicators of impairment quarter of 2015. during the third completed currently projecting a decline in are not We to these assets was required. assessment of or adjustment or effect such as a violation of debt covenants be expected to have an adverse cash flows that could charges. future impairment over the for depreciation on a straight-line basis classes and generally provide relatively homogeneous are for leasehold improvements, which useful life of each asset class, except estimated average asset. Certain or the estimated useful life of the lesser of the applicable lease term amortized over the are removed from the cost and related fixtures, when fully depreciated, store and warehouse these assets The valuation and classification of and amortization accounts. accumulated depreciation we believe and the use of estimates, which of depreciable lives involves judgments and the assignment years. have been materially accurate in recent of the assets exceeds the estimated undiscounted future cash flows generated by the assets. Our of the assets exceeds the estimated cash flows is based upon historical operations of the stores and estimate of undiscounted future store encompasses many factors that are subject to variability and are estimates of future profitability which of future cash flows are not materially accurate, our impairment difficult to predict. If our estimates If a long-lived asset is found to be impaired, the amount analysis could be impacted accordingly. to the difference between the carrying value and the asset’s recognized for impairment is equal is estimated based primarily upon projected future cash flows estimated fair value. The fair value rate) or other reasonable estimates of fair market value. (discounted at our credit adjusted risk-free changes in these estimates, assumptions or projections could Although not currently anticipated, of fair value or impairment. materially affect the determination and general liability. These represent significant costs employee health, property loss, automobile liabilities are made for these base and number of stores. Provisions primarily due to our large employee these liabilities are based on actual claim data and estimates of on an undiscounted basis. Certain of using actuarial methodologies based on historical claim incurred but not reported claims developed to continue to be materially accurate. If future claim trends, which have been and are anticipated patterns, or other unanticipated events affect the number and trends deviate from recent historical be required to record additional expenses or expense reductions, significance of future claims, we may which could be material to our future financial results. These standards require established by accounting standards relating to uncertainty in income taxes. A determination is first companies to assess each income tax position taken using a two-step process. sustained, based upon the made as to whether it is more likely than not that the position will be position is expected to meet the technical merits, upon examination by the taxing authorities. If the tax the largest amount that is more likely than not criteria, the benefit recorded for the tax position equals respective tax position. greater than 50% likely to be realized upon ultimate settlement of the based on provisions of the Uncertain tax positions require determinations and liabilities to be estimated determinations and estimates tax law which may be subject to change or varying interpretation. If our future financial results. prove to be inaccurate, the resulting adjustments could be material to our and claims. We establish liabilities as appropriate for these claims and proceedings based upon the and claims. We with the disclosures of these probability and estimability of losses and to fairly present, in conjunction review of our exposure. We matters in our financial statements and SEC filings, management’s view and estimates of loss, outstanding claims and proceedings with external counsel to assess probability 10-K years thesemethodologieshaveproducedmateriallyaccurate valuations. use variousvaluationmodelsindeterminingthevalues oftheseliabilities.We believethatinrecent 3inputs. have noassetsorliabilitiesthatarevaluedbasedsolely onLevel related marketactivity,andthusrequiretheuseofsignificant judgmentandestimates.Currently,we 3inputsaretypicallybasedonanentity’sownassumptions,asthereislittle,if any, Therefore, Level 3ofthehierarchy). about marketparticipantassumptions(unobservableinputsclassifiedwithinLevel 1and2ofthehierarchy)reportingentity’sownassumptions that areclassifiedwithinLevels based onmarketdataobtainedfromsourcesindependentofthereportingentity(observableinputs liabilities establishafairvaluehierarchythatdistinguishesbetweenmarketparticipantassumptions additional expenseorreductionsofexpense,whichcouldbematerialtoourfuturefinancialresults. however, ifourestimatesdiffermateriallyfromactualexperience,wemayberequiredtorecord forfeiture ratesofshare-basedawards.Historically,theseestimateshavebeenmateriallyaccurate; Other factorsinvolvingjudgmentsthataffecttheexpensingofshare-basedpaymentsincludeestimated historical volatilityofourstockprice,applicableinterestratesandthedividendyieldstock. options. Theseassumptionsincludethetermthatoptionsareexpectedtobeoutstanding, judgmental inthevaluationofstockoptions,whichaffectscompensationexpenserelatedtothese value ofourstockoptionawards.Theapplicationthisvaluationmodelinvolvesassumptionsthatare Black-Scholes-Merton closedformoptionpricingmodel.We believethatthismodelfairlyestimatesthe useful lifeoftheasset. properties areamortizedovertheshorteroflifeapplicableleasetermorestimated difference betweenthecalculatedexpenseandamountsactuallypaid.Improvementsofleased amortized asareductiontorentexpenseoverthetermoflease.We reflectasaliabilityany as deferredrent.Tenant allowances,totheextentreceived,arerecordedasdeferredincentiverentand record thedifferencebetweenrecognizedrentalexpenseandamountspayableunderlease escalation oftheminimumrent,werecognizerelatedrentexpenseonastraight-linebasisand leasehold improvementsandinstallstorefixtures.Whenaleasecontainspredeterminedfixed property fromthelandlord,whichnormallyincludesaperiodpriortostoreopeningmakenecessary the base,non-cancelableleasetermcommencingondatethatwetakephysicalpossessionof sales targetsisconsideredprobable.We record minimumrentalexpenseonastraight-linebasisover of definedsalesvolume.We recognizecontingent rentalexpensewhentheachievementofspecified renewal options.Certainofourstoreshaveprovisionsforcontingentrentalsbaseduponapercentage renewal options.We alsohavestoressubject toshorter-termleasesandmanyofthesehave arrangements withlandlords,whichtypicallycarryaprimaryleasetermofupto15yearsmultiple judgment attrial,forexample,orinthecaseofaquicklynegotiatedsettlement). be insufficienttimetoestablishaliabilitypriortheactualincurrenceofloss(uponverdictand to establishalitigationliabilityuntilthelossisbothprobableandestimable,insomecasestheremay than theamountofrecordedliability.Inaddition,becauseitisnotpermissibleunderU.S.GAAP adjusted. Theactualcostofresolvingaclaimorproceedingultimatelymaybesubstantiallydifferent available todeterminewhetheraliabilityshouldbeestablishedorifanyexisting We re-evaluatetheseassessmentsonaquarterly basisorasnewandsignificantinformationbecomes which includesananalysisofwhethersuchlossestimatesareprobable,reasonablypossible,orremote. Our fairvaluemeasurementsareprimarilyassociated withouroutstandingdebtinstruments.We Fair Value Measurements. Share-Based Payments. Lease AccountingandExcessFacilities. Our stockoptionawardsarevaluedonanindividualgrantbasisusingthe Accounting standardsforthemeasurementoffairvalueassets and Many ofourstoresaresubjecttobuild-to-suit 38 10-K 39 We are exposed to market risk primarily from adverse changes in interest rates, and to a lesser primarily from adverse changes in interest are exposed to market risk We use of fixed and variable interest rate debt manage our interest rate risk through the strategic We rate debt impacts our pre-tax earnings and cash flows; A change in interest rates on variable ITEM 7A. ABOUT DISCLOSURES MARKET RISK QUALITATIVE AND QUANTITATIVE Risk Management Financial including periodically use financial instruments, minimize this risk, we may prices. To degree commodity pursuant must be authorized and executed financial instrument transactions derivatives. All derivative policy, we do not buy or sell financial Board of Directors. As a matter of to approval by the are such derivative financial instruments or trading purposes, and any instruments for speculative is to economic exposure. Our objective to reduce risk by hedging an underlying intended to be used exposure being hedged, so that financial instruments and the underlying correlate derivative in the are generally offset by reciprocal changes value of the financial instruments fluctuations in the economic exposure. value of the underlying Interest Rate Risk instruments. Our principal interest rate exposure relates to and, from time to time, derivative financial rate As of January 29, 2016, we had variable debt Facilities. outstanding amounts under our unsecured under and borrowings of $251 million outstanding Facility Term borrowings of $425 million under our rate interest exposure under the In order to mitigate a portion of the variable Facility. our Revolving 2016, no we have entered into various interest rate swaps. As of January 29, in prior years Facilities, and, as a result, we are exposed to fluctuations in variable such interest rate swaps were outstanding see Note 5 to the Facilities, a detailed discussion of our For interest rates under the Facilities. consolidated financial statements. fixed rate debt impacts the economic fair value of debt but not whereas a change in interest rates on Based on our variable rate borrowing levels and interest rate swaps our pre-tax earnings and cash flows. and January 30, 2015, the annualized effect of a one percentage outstanding as of January 29, 2016 would have resulted in a pretax reduction of our earnings and point increase in variable interest rates in 2015 and $0.6 million in 2014. cash flows of approximately $6.9 million 10-K March 22,2016 Nashville, Tennessee framework) andourreportdatedMarch22,2016expressedanunqualifiedopinionthereon. Framework issuedby the CommitteeofSponsoringOrganizationsTreadway Commission(2013 financial reportingasofJanuary29,2016,basedoncriteriaestablishedinInternalControl—Integrated Oversight Board(UnitedStates),DollarGeneralCorporationandsubsidiaries’internalcontrolover accounting principles. the threeyearsinperiodendedJanuary29,2016,conformitywithU.S.generallyaccepted and January30,2015,theconsolidatedresultsoftheiroperationscashflowsforeach the consolidatedfinancialpositionofDollarGeneralCorporationandsubsidiariesatJanuary29,2016 believe thatourauditsprovideareasonablebasisforopinion. estimates madebymanagement,aswellevaluatingtheoverallfinancialstatementpresentation.We financial statements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificant audit includesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresin reasonable assuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.An Oversight Board(UnitedStates).Thosestandardsrequirethatweplanandperformtheaudittoobtain audits. management. Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedour period endedJanuary29,2016.ThesefinancialstatementsaretheresponsibilityofCompany’s income, comprehensiveshareholders’equityandcashflowsforeachofthethreeyearsin subsidiaries asofJanuary29,2016and30,2015,therelatedconsolidatedstatements Dollar GeneralCorporation The BoardofDirectorsandShareholders FINANCIALSTATEMENTS ANDSUPPLEMENTARY DATA ITEM 8. We alsohaveaudited,inaccordancewiththestandardsofPublicCompanyAccounting In ouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects, We conductedourauditsinaccordancewith thestandardsofPublicCompanyAccounting We haveauditedtheaccompanyingconsolidated balancesheetsofDollarGeneralCorporationand Report AccountingFirm ofIndependentRegistered Public 40 /s/ Ernst&Young LLP 10-K — 2015 (see Note 1) 6,843 1,379 $ 101,158 (5,807) (7,327) 21,830 19,499 32,870 59,400 157,947 $ 579,823 193,467 170,265 467,122 413,760 639,955275,283 626,858 285,309 250,855 265,514 2016 3,074,153 2,782,521 3,432,4102,264,062 3,532,609 4,338,589 2,116,075 1,200,994 4,338,589 1,201,870 1,494,225 1,388,154 1,995,5962,969,175 1,962,472 2,623,965 3,107,2832,025,545 3,048,806 2,403,045 5,377,876 5,710,038 January 29, January 30, $11,257,885 $11,208,642 $11,257,885 $11,208,642 41 ...... $ ...... — — ...... CONSOLIDATED BALANCE SHEETS CONSOLIDATED ...... (In thousands, except per share amounts) (In thousands, except ...... $ ...... DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR ...... The accompanying notes are an integral part of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial and 303,447 shares issued and outstanding at January 29, 2016 and January 30, 2015, respectively Cash and cash equivalents Merchandise inventories Income tax receivable other current assets expenses and Prepaid current assets Total Current portion of long-term obligations payable Accounts other expenses and Accrued Income taxes payable current liabilities Total stock, 1,000 shares authorized Preferred Common stock; $0.875 par value, 1,000,000 shares authorized, 286,694 paid-in capital Additional earnings Retained other comprehensive loss Accumulated Total shareholders’ equity Total ASSETS Current assets: Net property and equipment Goodwill Other intangible assets, net Other assets, net assets Total EQUITY LIABILITIES AND SHAREHOLDERS’ Current liabilities: Long-term obligations Deferred income taxes Other liabilities Commitments and contingencies Shareholders’ equity: Total liabilities and shareholders’ equity Total 10-K Dividends pershare Weighted averagesharesoutstanding: Earnings pershare: Net income Income taxexpense Income beforeincometaxes Other (income)expense Interest expense Operating profit Selling, generalandadministrativeexpenses Gross profit Cost ofgoodssold Net sales Diluted Basic Diluted Basic ...... $ ...... The accompanyingnotesareanintegralpartoftheconsolidated financialstatements...... $ ...... $ ...... DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... $ ...... 2 — 326 ...... CONSOLIDATED STATEMENTS OFINCOME ...... (In thousands,exceptpershareamounts) ...... 42 2,6,6 1,0,8 $17,504,167 $18,909,588 $20,368,562 aur 9 aur 0 January31, January30, January 29, 402411,0,8 12,068,425 13,107,081 14,062,471 ,6,8 ,6,4 1,025,116 $ 1,065,345 1,628,330 $ 1,165,080 1,680,861 1,736,185 1,853,024 3,699,557 1,769,093 5,435,742 4,033,414 1,940,294 5,802,507 4,365,797 6,306,091 2016 9,1 0,8 323,854 322,886 305,681 304,633 295,211 294,330 603,214 615,516 687,944 6948,3 88,984 88,232 86,944 .8$—$— $ — 3.17 $ 3.17 0.88 $ $ 3.49 3.50 $ $ 3.95 3.96 For theYear Ended 2015 2014 18,871 10-K 2014 2015 For the Year Ended the Year For 1,520 2,583 (6,972) 2016 January 29, 30, January January 31, $1,165,080 $1,065,345 $1,025,116 $1,166,600 $1,067,928 $1,018,144 43 (In thousands) ...... DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF COMPREHENSIVE STATEMENTS CONSOLIDATED ...... The accompanying notes are an integral part of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial income tax expense (benefit) of $971, $1,671 and $(4,461), income tax expense respectively Net income of related (loss) on hedged transactions, net Unrealized net gain Comprehensive income 10-K Balances, January29,2016 Other equityandrelated eucae fcmo tc 1,5)(531 12422 (1,299,613) — (1,284,252) — (15,361) (17,556) . Tax benefitfromstockoption . . Repurchases ofcommonstock Share-based compensation Unrealized netgain(loss)on Balances, January30,2015 Other equityandrelated eucae fcmo tc 1,0)(232 7773 (800,095) — (787,753) — Cash dividends,$0.88percommon Net income (12,342) (14,106) . Tax benefitfromstockoption . . Repurchases ofcommonstock Balances, January31,2014 Other equityandrelated eucae fcmo tc 1,3)(,5)—(1,9)—(620,052) — (610,395) Share-based compensation — Unrealized netgain(loss)on Net income (9,657) (11,037) . Tax benefitfromstockoption . . Repurchases ofcommonstock Balances, February 1,2013 Share-based compensation Unrealized netgain(loss)on Net income transactions exercises expense hedged transactions transactions share exercises transactions expense hedged transactions exercises expense hedged transactions ...... — — — ...... The accompanyingnotesareanintegralpartoftheconsolidated financialstatements...... — — ...... — — ...... — — ...... —— — ...... ——— — — — ...... — ...... ——— — — — ...... — ...... ——— — — ...... 83702 803 ...... 45432 495 ...... CONSOLIDATED STATEMENTS OFSHAREHOLDERS’EQUITY .... — — — — ...... — — — — ...... — — — — ...... DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... (In thousandsexceptpershareamounts) Common 8,9 2085$,0,8 ,2,4 (,0)$5,377,876 $ $(5,807) 2,025,545 $ $3,107,283 $250,855 286,694 0,4 2554$,4,0 ,0,4 (,2)$5,710,038 $ $(7,327) 2,403,045 $ $3,048,806 $265,514 303,447 1,5 2744$,0,2 ,2,5 (,1)$5,402,193 $ $(9,910) 2,125,453 $ $3,009,226 $277,424 317,058 2,6 2615$,9,5 ,1,3 (,3)$4,985,330 $ $(2,938) 1,710,732 $ $2,991,351 $286,185 327,069 hrsSokCptlErig Loss Earnings Capital Stock Shares tc omnPi-nRtie Comprehensive Retained Paid-in Common Stock ,2 9 2,3)——(26,341) — — (27,237) 896 1,026 44 Additional 13,698 38,547 37,338 24,151 20,961 285 (2,373) — — (2,805) 6,232 5,047 ,6,8 1,165,080 — 1,165,080 ,6,4 1,065,345 — 1,065,345 ,2,1 1,025,116 — 1,025,116 2838 (258,328) — (258,328) 13,698 — — — — 38,547 — — — — 37,338 — — 24,151 — — 20,961 — — Accumulated Other 692 (6,972) (6,972) 1,520 2,583 Total 6,934 5,047 1,520 2,583 10-K — 18,871 (13,217) — 2,297,177 For the Year Ended the Year For (905) (1,555) (2,200) 6,934 (2,373) (26,341) 1,423 2,268 288,466 7,797 8,551 (12,747) (6,991) — (15,996) 13,698 12,147 30,990 76,354 $ 82,447 $ 73,464 32,020 $ 31,586 $ 27,082 44,949 41,635 16,265 38,547 37,338 20,961 12,126 (17,734) (36,851) (24,626) (25,048) (4,947) (19,675) 12,399 (5,249) (13,698) (12,147) (30,990) 579,823 505,566 140,809 499,220 157,947 $ 579,823 $ 505,566 697,357 $ 631,483 $ 646,811 105,637 97,166 36,942 352,431 342,353 332,837 2016 2015 2014 (502,401) (78,467) (2,119,991) (421,876) 74,257 364,757 (258,328) — (503,383) (371,699) (249,978) (504,806) (373,967) (538,444) (290,001) (233,559) (144,943) 2,034,100 1,023,000 1,172,900 1,377,988 1,314,744 1,213,065 1,165,080 $ 1,065,345 $ 1,025,116 (1,296,481) (868,788) (598,330) (1,783,100) (1,023,000) (1,303,800) (1,299,613) (800,095) (620,052) January 29, January 30, January 31, ...... 45 ...... — — ...... (In thousands) ...... $ ...... $ ...... 326 — ...... CONSOLIDATED STATEMENTS OF CASH FLOWS OF CASH STATEMENTS CONSOLIDATED ...... DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR ...... $ ...... $ ...... $ ...... The accompanying notes are an integral part of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial Interest Income taxes Accounts payable Accounts expenses and other liabilities Accrued Income taxes Other Merchandise inventories expenses and other current assets Prepaid included in Accounts payable included in Accounts activities: Depreciation and amortization Loss on debt retirement, net Noncash share-based compensation Other noncash (gains) and losses Deferred income taxes Change in operating assets and liabilities: Tax benefit of share-based awards Tax Borrowings under revolving credit facilities for cash flow hedge related to debt issuance Payments Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Repayments of borrowings under revolving credit facilities Repayments Debt issuance costs of common stock Repurchases of cash dividends Payments Cash flows from financing activities: Issuance of long-term obligations of long-term obligations Repayments Other equity and related transactions Tax benefit of share-based awards Tax Net cash provided by (used in) financing activities Supplemental cash flow information: Cash paid for: Proceeds from sales of property and equipment Proceeds Net cash provided by (used in) operating activities Net cash provided by (used in) operating activities Net cash provided by (used in) investing Supplemental schedule of noncash investing and financing activities: Purchases of property and equipment awaiting processing for payment, Cash flows from investing activities: Purchases of property and equipment Adjustments to reconcile net income to net cash from operating to reconcile net Adjustments Cash flows from operating activities: Cash flows from operating Net income 10-K inventories. Costsdirectlyassociatedwithwarehousing anddistributionarecapitalizedintoinventory. of costormarket(‘‘LCM’’)ifmarkdownsarecurrently takenasareductionoftheretailvalue value ofsalesatadepartmentlevel.TheusetheRIM willresultinvaluinginventoriesatthelower of inventoriesatcostarecomputedbyapplyingacalculated cost-to-retailinventoryratiototheretail Company’s retailinventorymethod(‘‘RIM’’),thecalculation ofgrossprofitandtheresultingvaluation first-out (‘‘LIFO’’)methodasthisresultsina bettermatchingofcostsandrevenues.Underthe Merchandise inventories (‘‘SG&A’’) expense.Thecostofsecuritiessoldisbaseduponthespecificidentificationmethod. at fairvalue,withchangesinvaluerecordedasacomponentofSelling,generalandadministrative taxes, reportedasacomponentofAccumulated othercomprehensive loss.Trading securitiesarestated available-for-sale arestatedatfairvalue,withanyunrealizedgainsandlosses,netofdeferredincome categorized asheld-to-maturityarestatedatamortizedcost.Debtandequitysecurities held-to-maturity, available-for-sale,ortrading,dependingontheirclassification.Debtsecurities Investments indebtandequitysecurities threshold setbyinsuranceregulators,asfurtherdescribedbelowunder‘‘Insuranceliabilities.’’ 2015, respectively. equivalents totaledapproximately$59.5millionand$58.5atJanuary29,201630, investments. amounts oftheseitemsareareasonableestimatetheirfairvalueduetotheshortmaturity money marketfunds,bankdeposits,certificatesofdeposit,andcommercialpaper.Thecarrying original maturitiesofthreemonthsorlesswhenpurchased.Suchinvestmentsprimarilyconsist Cash andcashequivalents California. Missouri; Indianola,Mississippi;andLebec, Bethel, Pennsylvania; andSanAntonio,Texas, andleasedDCsinArdmore,Oklahoma;Fulton, Alachua, Florida;Zanesville,Ohio;Jonesville,SouthCarolina;Marion,Indiana;Bessemer,Alabama; The Companyhasowneddistributioncenters(‘‘DCs’’)inScottsville,Kentucky;SouthBoston,Virginia; 2016) in43statescoveringmostofthesouthern,southwestern,midwesternandeasternUnitedStates. subsidiary whichtheCompanydoesnotcontrol.Intercompanytransactionshavebeeneliminated. consolidated financialstatementsincludeallsubsidiariesoftheCompany,exceptforitsnot-for-profit 52-week accountingperiods.TheCompany’sfiscalyearendsontheFriday closesttoJanuary31.The ended January29,2016,30,2015,and31,2014,respectively,eachofwhichwere Basis ofpresentation 1. Basisofpresentationandaccountingpolicies Inventories arestatedatthelowerofcostormarket with costdeterminedusingtheretaillast-in, The Companyaccountsforinvestmentsindebtandmarketableequitysecuritiesas At January29,2016,theCompanymaintainedcashbalancesto meet a$20millionminimum Payments duefromprocessors forelectronictendertransactionsclassifiedascashand Cash andcashequivalentsincludehighlyliquidinvestmentswithinsignificantinterestraterisk The Companysellsgeneralmerchandiseonaretailbasisthrough12,483stores(asofJanuary29, These notescontainreferencestotheyears2015,2014,and2013,whichrepresentfiscal DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES NOTES TOCONSOLIDATED FINANCIALSTATEMENTS 46 10-K 47 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO The excess of current cost over LIFO cost was approximately $92.9 million and $95.1 million at $92.9 million and $95.1 million cost over LIFO cost was approximately The excess of current largest variety of suppliers. The Company’s its merchandise from a wide The Company purchases consideration received from vendors in accordance with The Company accounts for all cash other current assets include prepaid amounts for rent, maintenance, business expenses and Prepaid equipment was recorded at estimated fair values as the result In 2007, the Company’s property and 1. Basis of presentation and accounting policies (Continued) 1. Basis of presentation RIM on a cost is determined using the January 30, 2015, respectively. Current January 29, 2016 and market price the impacts of rising or falling Under the LIFO inventory method, first-in, first-out basis. recorded a provision or benefit). The Company decrease cost of sales (the LIFO changes increase or in 2013, million in 2014, and $(11.0) million of $(2.3) million in 2015, $4.2 LIFO provision (benefit) statements of income. in cost of goods sold in the consolidated which is included for approximately 7% of the Company’s purchases in 2015. and second largest suppliers each accounted rebates Vendor to such arrangements. Cash consideration received from a applicable accounting standards pertaining a rebate or an allowance and is accounted for as a reduction of vendor is generally presumed to be However, certain specific, incremental and otherwise qualifying merchandise purchase costs as earned. or sale of vendor products may be offset by cash SG&A expenses related to the promotion in accordance with arrangements such as cooperative advertising, consideration received from vendors, to but not exceeding actual incremental costs. when earned for dollar amounts up Prepaid expenses and other current assets and amounts receivable for certain vendor rebates (primarily those licenses, advertising, and insurance, coupons. expected to be collected in cash) and Property and equipment recorded and equipment acquired subsequent to the merger has been of a merger transaction. Property and amortization on a straight-line basis over the assets’ at cost. The Company records depreciation 10-K summarized asfollows: estimated usefullives.TheCompany’spropertyandequipmentbalancesdepreciablelivesare 1. Basisofpresentationandaccountingpolicies(Continued) the assetsattheselocations. the carryingvalueofassetsexceedingestimated undiscountedfuturecashflowsgeneratedby such amountswouldnotberecoverableprimarilydue toinsufficientsalesorexcessivecostsresultingin certain ofitsstores’assets.Suchactionwasdeemednecessary basedontheCompany’sevaluationthat $5.9 millionin2015,$1.92014and$0.5 in2013,toreducethecarryingvalueof to bedisposedofareadjustedthefairvalueless costtoselliflessthanthebookvalue. the Company’screditadjustedrisk-freerate)orother reasonableestimatesoffairmarketvalue.Assets based primarilyuponestimatedfuturecashflowsover theasset’sremainingusefullife(discountedat difference betweenthecarryingvalueandasset’s estimated fairvalue.Thevalueis If along-livedassetisfoundtobeimpaired,theamountrecognizedforimpairmentequal store profitabilitywhichencompassesmanyfactorsthataresubjecttovariabilityanddifficultpredict. undiscounted futurecashflowsisbaseduponhistoricaloperationsofthestoresandestimates the undiscountedfuturecashflowsexpectedtobegeneratedbyassets.TheCompany’sestimateof flows fromoperationsarenegative.Impairmentresultswhenthecarryingvalueofassetsexceeds Company’s policyistoreviewforimpairmentstoresopenmorethanthreeyearswhichcurrentcash performance andfuturecashflowsortheappraisedvaluesofunderlyingassets.Generally, assets, otherthangoodwillandindefinite-livedintangibleinrelationtotheoperating Impairment oflong-livedassets were capitalizedin2015,2014and2013. equipment iscapitalizedwhereapplicable.Interestcostsof$1.4million,$0.2millionand$1.2 included indepreciationexpense.Interestonborrowedfundsduringtheconstructionofpropertyand $335.9 millionand$315.3for2015,20142013.Amortizationofcapitalleaseassetsis Amortizedoverthelesseroflife applicable leasetermortheestimatedusefullifeof (a) Net propertyandequipment accumulateddepreciationandamortization Less Construction inprogress Furniture, fixturesandequipment improvements Leasehold Buildings improvements Land Land ...... (In thousands) The Companyrecordedimpairmentchargesincluded inSG&Aexpenseofapproximately When indicatorsofimpairmentarepresent,theCompanyevaluatescarryingvaluelong-lived Depreciation expenserelatedtopropertyandequipmentwasapproximately$350.6million, asset...... 39 - 40 ...... NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... 20 ...... (a) ...... 3 - 10 ...... 48 neiie$1852$172,329 $ 188,532 $ Indefinite ercal aur 9 January30, January29, Depreciable Life 22402$2,116,075 $2,264,062 ,0,2 1,637,482 3,753,557 1,906,424 4,170,486 2,295,590 2,526,843 5,7 68,360 361,557 150,275 800,346 402,997 834,884 2016 69555,375 66,955 2015 10-K 2016 2015 82,182 81,944 136,762136,987 124,893 128,278 111,191 $ 78,645 $467,122 $413,760 January 29, January 30, 49 ...... $ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR ...... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO ...... Other Compensation and benefits (In thousands) Insurance (other than taxes on income) Taxes Included in other accrued expenses are liabilities such as interest expense, freight expense, and Included in other accrued expenses are liabilities such as interest expense, The Company amortizes intangible assets over their estimated useful lives unless such lives are useful lives unless such lives intangible assets over their estimated The Company amortizes for goodwill and indefinite-lived intangible assets, an In accordance with accounting standards test is a two-step process that would require management to The quantitative goodwill impairment intangible assets compares the fair value of the intangible The quantitative impairment test for for maintenance, beer Noncurrent Other assets consist primarily of qualifying prepaid expenses expenses and other consist of the following: Accrued utilities. 1. Basis of presentation and accounting policies (Continued) 1. Basis of presentation intangible assets Goodwill and other annually indefinite lives are tested for impairment Goodwill and intangible assets with deemed indefinite. for Other intangible assets are tested if indicators of impairment are present. or more frequently value as assets are written down to fair of impairment are present. Impaired impairment if indicators presented. identified during any of the periods of intangible assets has been required. No impairment qualitative factors to determine whether events and circumstances entity has the option first to assess that goodwill or an indefinite-lived intangible asset is impaired. indicate that it is more likely than not that the asset is not impaired, then the entity is not If after such assessment an entity concludes if an entity concludes otherwise, then it is required to required to take further action. However, using a quantitative impairment test, and if impaired, the determine the fair value of the asset to fair value as described in further detail below. associated assets must be written down assumptions to use in the calculation. The first step of the make judgments in determining what value of an entity’s reporting units based on valuation techniques process consists of estimating the fair using revenue and profit forecasts) and comparing that (including a discounted cash flow model carrying value, which includes goodwill. If the estimated fair estimated fair value with the recorded a second step is performed to compute the amount of the value is less than the carrying value, fair value’’ of goodwill. The determination of the implied fair impairment by determining an ‘‘implied entity to allocate the estimated fair value of its reporting unit to its value of goodwill would require the fair value would represent the implied fair value of goodwill, assets and liabilities. Any unallocated carrying value. which would be compared to its corresponding carrying amount of an intangible asset exceeds its fair value, an asset with its carrying amount. If the amount equal to that excess. impairment loss is recognized in an Other assets and wine licenses, and utility, security and other deposits. Accrued and other liabilities expenses 10-K Other liabilities other intheconsolidatedbalancesheets. was approximately$4.0millionand$4.8million,respectively,isincludedinAccrued expensesand is consideredprobable.TheamountexpensedbutnotpaidasofJanuary29,2016and30,2015 and $54.6millionatJanuary29,201630,2015,respectively. portion inOtherliabilitiestheconsolidatedbalancesheets,andtotaledapproximately$57.9million paid resultinaliability,withthecurrentportionAccrued expenses andotherthelong-term expense overthetermoflease.Thedifferencebetweencalculatedandamounts extent received,arerecordedasdeferredincentiverentandamortizedareductionto rental expenseandtheamountspayableunderleaseasdeferredrent.Tenant allowances,tothe the relatedrentexpenseonastraight-linebasisandrecordsdifferencebetweenrecognized When aleasecontainspredeterminedfixedescalationoftheminimumrent,Companyrecognizes period priortothestoreopeningmakenecessaryleaseholdimprovementsandinstallfixtures. the Companytakesphysicalpossessionofpropertyfromlandlord,whichnormallyincludesa expense onastraight-linebasisoverthebase,non-cancelableleasetermcommencingdatethat Operating leasesandrelatedliabilities its self-insuredexposures.ARICcurrentlyinsuresnounrelatedthird-partyrisk. Carolina insuranceregulations,ARICmaintainscertainlevelsofcashandequivalentsrelatedto the retainedworkers’compensationandnon-propertygeneralliabilityexposures.PursuanttoSouth insurance subsidiaryoftheCompany,chargesoperatingcompaniespremiumstoinsure those estimates,futureresultsofoperationswillbeaffectedasthereservesareadjusted. self-insurance reservespursuanttoCompanypolicy.To theextentthatsubsequentclaimcostsvaryfrom general liability,andhealthclaimrisksarederivedusingactuarialmethodsrecordedas Company’s estimatesofsuchrisks.Theundiscountedfutureclaimcostsfortheworkers’compensation, general liability,propertyandautomobileclaimexposures.Accordingly, provisionsaremadeforthe Insurance liabilities 1. Basisofpresentationandaccountingpolicies(Continued) Noncurrent Otherliabilitiesconsistofthefollowing: The Companyrecognizescontingentrentalexpensewhentheachievementofspecifiedsalestargets Rent expenseisrecognized overthetermoflease.TheCompanyrecordsminimumrental Ashley RiverInsuranceCompany(‘‘ARIC’’), aSouthCarolina-basedwhollyownedcaptive The Companyretainsasignificantportionofriskforitsworkers’compensation,employeehealth, Other Deferred gainonsaleleaseback Deferred rent Insurance (In thousands) ...... NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) ...... $ ...... DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... 50 aur 9 January30, January 29, 2523$285,309 $275,283 3,9 $140,916 137,798 70753,975 57,017 37758,215 53,737 67132,203 26,731 062015 2016 10-K 51 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO The Company utilizes accounting standards for fair value, which include the definition of fair which include the definition of accounting standards for fair value, The Company utilizes Level active markets for identical assets or liabilities 1 inputs utilize quoted prices (unadjusted) in instruments is determined using widely accepted valuation The valuation of derivative financial reflect both its own The Company incorporates credit valuation adjustments to appropriately with applicable The Company accounts for derivative financial instruments in accordance 1. Basis of presentation and accounting policies (Continued) 1. Basis of presentation accounting value Fair Fair about fair value measurements. for measuring fair value, and disclosures value, the framework value measurement. Therefore, a fair measurement, not an entity-specific value is a market-based use in that market participants would be determined based on the assumptions measurement should fair value market participant assumptions in liability. As a basis for considering pricing the asset or a fair value hierarchy that distinguishes value accounting standards establish measurements, fair based on market data obtained from sources independent of between market participant assumptions that are classified within Levelsthe reporting entity (observable inputs 1 and 2 of the hierarchy) and about market participant assumptions (unobservable inputs the reporting entity’s own assumptions classified within Level 3 of the hierarchy). access. Levelthat the Company has the ability to 2 inputs are inputs other than quoted prices included in Level for the asset or liability. Level 1 that are directly or indirectly observable 2 inputs may include liabilities in active markets, as well as inputs that are observable for quoted prices for similar assets and prices), such as interest rates, foreign exchange rates, and yield the asset or liability (other than quoted quoted intervals. Levelcurves that are observable at commonly 3 inputs are unobservable inputs for the an entity’s own assumptions, as there is little, if any, observable asset or liability, which are based on the fair value measurement is based on inputs from different levels market activity. In instances where in the fair value hierarchy within which the entire fair value of the fair value hierarchy, the level level input that is significant to the fair value measurement in measurement falls is based on the lowest of the significance of a particular input to the fair value its entirety. The Company’s assessment judgment and considers factors specific to the asset or liability. measurement in its entirety requires flow analysis on the expected cash flows of each derivative. This techniques, including discounted cash terms of the derivatives, including the period to maturity, analysis takes into account the contractual including interest rate curves. The fair values of interest rate and uses observable market-based inputs, the discounted future fixed swaps are determined using the market standard methodology of netting receipts (or payments). The cash payments (or receipts) and the discounted expected variable cash interest rates (forward variable cash receipts (or payments) are based on an expectation of future curves) derived from observable market interest rate curves. risk in the fair value nonperformance risk and the respective counterparty’s nonperformance applicable credit enhancements, measurements. The Company considers the impact of netting and any adjust the fair value of such as collateral postings, thresholds, mutual puts, and guarantees, to In connection with accounting outstanding derivative contracts for the effect of nonperformance risk. policy election to measure standards for fair value measurement, the Company has made an accounting to master netting the credit risk of outstanding derivative financial instruments that are subject agreements on a net basis by counterparty portfolio. Derivative financial instruments require that all derivatives are accounting standards for such instruments and hedging activities, which 10-K $31.9 millionin2015,2014and2013,respectively. Vendor fundingforcooperative advertising offsetreportedexpensesby$36.7million,$35.0millionand in-store signage,andcostsassociatedwiththesponsorships ofcertainautomobileracingactivities. include promotionalcirculars,targetedcircularssupporting newstores,televisionandradioadvertising, $89.3 million,$77.3millionand$70.5in2015, 2014and2013,respectively.Thesecostsprimarily products fordollaramountsuptobutnotexceeding actual incrementalcosts.Advertising costswere specific, incrementalandotherwisequalifyingexpenses relatedtothepromotionorsaleofvendor in SG&Aexpensesnetofearnedcooperativeadvertising amountsprovidedbyvendorswhichare Advertising costs $0.6 millionand$2.4in20152014,respectively. over timeinproportiontoactualgiftcardredemptions.TheCompanyrecordedbreakagerevenueof percentage ofgiftcardsthatwillneverberedeemedbasedonhistoricalredemptionrates,isrecognized respectively, andisrecordedinAccrued expensesandotherliabilities. Estimatedbreakagerevenue,a cards wasapproximately$2.8millionand$2.5atJanuary29,201630,2015, gift cardsisestablishedforthecashvalueattimeofpurchase.Theliabilityoutstanding contingencies whenrealized. retail merchandisereturnsisbasedontheCompany’spriorexperience.TheCompanyrecordsgain assessed bygovernmentalauthoritiesthatareimposedconcurrentwiththosesales.Theliabilityfor merchandise. Allsalesarenetofdiscountsandestimatedreturnspresentedtaxes Revenue andgainrecognition standards. though hedgeaccountingdoesnotapplyortheCompanyelectsto into derivativecontractsthatareintendedtoeconomicallyhedgeacertainportionofitsrisk,even the earningseffectofhedgedforecastedtransactionsinacashflowhedge.TheCompanymayenter value ofthehedgedassetorliabilitythatareattributabletoriskinafairhedge of gainorlossrecognitiononthehedginginstrumentwithchangesinfair investment inaforeignoperation.Hedgeaccountinggenerallyprovidesforthematchingoftiming flow hedges.Derivativesmayalsobedesignatedashedgesoftheforeigncurrencyexposureanet variability inexpectedfuturecashflows,orothertypesofforecastedtransactions,areconsidered considered fairvaluehedges.Derivativesdesignatedandqualifyingasahedgeoftheexposureto asset, liability,orfirmcommitmentattributabletoaparticularrisk,suchasinterestrateare has satisfiedthecriterianecessarytoapplyhedgeaccounting. derivative inahedgingrelationshipandapplyhedgeaccountingwhetherthe depends ontheintendeduseofderivative,whetherCompanyhaselectedtodesignatea recorded onthebalancesheetatfairvalue.Theaccountingforchangesinvalueofderivatives 1. Basisofpresentationandaccountingpolicies(Continued) Advertising costsareexpenseduponperformance,‘‘firstshowing’’ ordistribution,andarereflected The Companyrecognizesgiftcardsalesrevenueatthetimeofredemption.liabilityfor The Companyrecognizesretailsalesinitsstoresatthetimecustomertakespossessionof Derivatives designatedandqualifyingasahedgeoftheexposuretochangesinfairvaluean NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES 52 10-K 53 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO The Company recognizes compensation expense for share-based compensation based on the fair compensation based on compensation expense for share-based The Company recognizes is separately estimated and amortized into compensation The fair value of each option grant expense for restricted stock, share units and similar awards The Company calculates compensation to new store openings and the related construction periods are expensed costs related Pre-opening income taxes, the asset and liability method is used for Under the accounting standards for of the provision The Company includes income tax related interest and penalties as a component companies to assess each Income tax reserves are determined using a methodology which requires 1. Basis of presentation and accounting policies (Continued) 1. Basis of presentation Share-based payments at the time of valuation and reduce are estimated on the grant date. Forfeitures value of the awards on the extent may be adjusted periodically based the vesting period. This estimate expense ratably over forfeiture rate from the prior estimate. The differ, or are expected to differ, to which actual forfeitures or canceled that are expected to be forfeited of share-based awards granted is the estimated percentage or estimates of estimate on historical experience vested. The Company bases this before becoming fully in the forfeiture rate will decrease compensation expense. future trends, as applicable. An increase the applicable grant date and each vesting date. The Company expense on a straight-line basis between option awards as of the grant date by applying the Black- has estimated the fair value of all stock model. The application of this valuation model involves Scholes-Merton option pricing valuation highly sensitive in the determination of compensation expense. assumptions that are judgmental and price of the underlying stock or similar award on the grant date as the difference between the market expense is recognized on a straight-line basis for graded awards or and the purchase price, if any. Such awards over the period in which the recipient earns the awards. an accelerated basis for performance Store pre-opening costs as incurred. Income taxes of events that have been recognized in the Company’s computing the future income tax consequences income tax returns. Deferred income tax expense or benefit is the consolidated financial statements or and liabilities. net change during the year in the Company’s deferred income tax assets for income tax expense. first made as to whether it is income tax position taken using a two-step process. A determination is technical merits, upon more likely than not that the position will be sustained, based upon the meet the more likely than not examination by the taxing authorities. If the tax position is expected to that is greater than 50% criteria, the benefit recorded for the tax position equals the largest amount Uncertain tax positions likely to be realized upon ultimate settlement of the respective tax position. of the tax law which require determinations and estimated liabilities to be made based on provisions and estimates may be subject to change or varying interpretation. If the Company’s determinations Company’s future financial prove to be inaccurate, the resulting adjustments could be material to the results. 10-K currently assessingtheimpactthatadoptionofthisguidance willhaveonitsconsolidatedfinancial beginning oftheearliestcomparativeperiodinconsolidated financialstatements.TheCompanyis permitted. Amodifiedretrospectiveapproachisrequired forallleasesexistingorenteredintoafterthe and interimperiodswithinthoseyears,beginningafter December15,2018,andearlyadoptionis for incomestatementrecognition.Thisguidanceiseffective forpublicbusinessentitiesfiscalyears, a right-of-useassetandcorrespondingleaseliability onitsbalancesheet,withdifferingmethodology leases oroperatingleases.Bothfinanceand leaseswillresultinthelesseerecognizing requires adualapproachforlesseeaccountingunder whichalesseewillaccountforleasesasfinance taxes ontheconsolidatedbalancesheetasofJanuary 30,2015. income taxespreviouslyclassifiedasacurrentliabilityarereflectedinnoncurrentdeferred retrospectively inthefourthquarterof2015.Asaresult,presentation$25.3milliondeferred guidance maybeadoptedonaprospectiveorretrospectivebasis.TheCompanythis December 15,2016,andinterimperiodswithinthosefiscalyears,withearlyadoptionpermitted.This them intocurrentandnoncurrentamounts.Thisguidanceiseffectiveforfiscalyearsbeginningafter classify alldeferredtaxassetsandliabilitiesasnoncurrentonthebalancesheetinsteadofseparating as ofJanuary30,2015. obligationsontheconsolidatedbalancesheet classified asOtherassets,netarereflectedinLong-term the presentationof$15.5milliondebtissuancecosts(netaccumulatedamortization)previously the financialstatements.TheCompanyadoptedthisguidanceinthirdquarterof2015.Asaresult, early adoptionpermitted.Theguidancemustbeappliedretrospectivelytoallperiodspresentedwithin for fiscalyearsbeginningafterDecember15,2015,andinterimperiodswithinthoseyears,with liability, consistentwiththepresentationofdebtdiscountsand/orpremiums.Thisguidanceiseffective issuance costsandrequiressuchtobepresentedasadeductionfromthecorrespondingdebt consolidated financialstatements. transition approaches,aswellthepotentialtimingofadoptionandeffectonits retrospective approachintheadoptionofthisguidance.TheCompanyiscurrentlyevaluatingthese 2016. Thenewguidanceallowsforcompaniestouseeitherafullretrospectiveormodified 2017, withearlieradoptionpermittedonlyforannualreportingperiodsbeginningafterDecember15, 2015, theFASB deferredtheeffectivedate toannualreportingperiodsbeginningafterDecember15, reporting periodsbeginningafterDecember15,2016,withearlyadoptionnotpermitted.InAugust accounting standardsrelatedtotherecognitionofrevenue,whichspecifiedaneffectivedateforannual Accounting standards revenues andexpensesduringthereportingperiods.Actual resultscoulddifferfromthoseestimates. and liabilitiesatthedateofconsolidatedfinancialstatementsreportedamounts assumptions thataffectthereportedamountsofassetsandliabilitiesdisclosurecontingent principles generallyacceptedintheUnitedStatesrequiresmanagementtomakeestimatesand Management estimates 1. Basisofpresentationandaccountingpolicies(Continued) In February 2016,theFASB issuednewguidancerelatedtoleaseaccounting.This In November2015,theFASB issuednewaccountingguidancewhichwillrequirecompaniesto In April2015,theFASB issuednewaccountingguidancerelatedtothepresentationofdebt In May2014,theFinancialAccounting StandardsBoard(‘‘FASB’’) issuedcomprehensivenew The preparationoffinancialstatementsandrelateddisclosuresinconformitywithaccounting NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES 54 10-K Accumulated Accumulated As of January 30, 2015 As of January 29, 2016 $1,204,079 $3,085 $1,200,994 $1,217,918 $16,048 $1,201,870 Life Amount Amortization Net Life Amount Amortization Net Remaining Remaining Indefinite $4,338,589 $Indefinite — 1,199,700 $4,338,589 —Indefinite 1,199,700 $4,338,589 $Indefinite — 1,199,700 $4,338,589 — 1,199,700 55 ...... 1 to 7 years 7 ...... to $ 1 4,379 $3,085 $ 1,294 years 8 ...... to $ 1 18,218 $16,048 $ 2,170 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO ...... The Company recorded amortization expense related to amortizable intangible assets for 2015, The Company recorded amortization expense related to amortizable intangible the estimated aggregate amortization expense for intangible assets subject to amortization, For Certain financial disclosures relating to prior periods have been reclassified to conform to the have been reclassified to conform to relating to prior periods Certain financial disclosures 30, 2015, the balances of the Company’s intangible assets were As of January 29, 2016 and January Leasehold interests names and trademarks Trade Leasehold interests names and trademarks Trade (In thousands) (In thousands) Other intangible assets: Other intangible assets: Goodwill Goodwill 2014 and 2013 of $0.9 million, $5.8 million and $11.9 million, respectively, all of which is included in 2014 and 2013 of $0.9 million, $5.8 million and $11.9 million, respectively, intangible assets are not rent expense. Expected future cash flows associated with the Company’s renew or extend the expected to be materially affected by the Company’s intent or ability to for tax purposes. arrangements. The Company’s goodwill balance is not expected to be deductible 2017—$0.2 million, 2018— each of the five succeeding fiscal years is as follows: 2016—$0.3 million, $0.2 million and 2019—$0.2 million and 2020—$0.1 million. 1. Basis of presentation and accounting policies (Continued) 1. Basis of presentation number the Company is party to a significant anticipating a material impact because statements and is of lease contracts. Reclassifications where applicable. current year presentation 2. Goodwill and other intangible assets as follows: 10-K 3. Earningspershare and 2013,respectively. exercising suchoptionswouldbeantidilutive,were1.3million,1.2andmillionin2015,2014 periods, butwerenotincludedinthecomputationofdilutedearningspersharebecauseeffect on thedilutiveeffectofshare-basedawardsusingtreasurystockmethod. shares ofcommonstockoutstandingduringtheyear.Dilutedearningspersharewasdeterminedbased Earnings pershareiscomputedasfollows(inthousandsexceptdata): Options topurchasesharesofcommonstockthatwereoutstandingattheendrespective Basic earningspersharewascomputedbydividingnetincometheweightedaveragenumberof Diluted earningspershare Effect ofdilutiveshare-basedawards Basic earningspershare Diluted earningspershare Effect ofdilutiveshare-basedawards Basic earningspershare Diluted earningspershare Effect ofdilutiveshare-basedawards Basic earningspershare NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... 56 105163384$3.17 323,854 $3.17 $1,025,116 322,886 $1,025,116 $3.49 305,681 $3.50 $1,065,345 304,633 $1,065,345 $3.95 295,211 $3.96 $1,165,080 294,330 $1,165,080 noeSae Amount Shares Income Amount Shares Income noeSae Amount Shares Income e vrg Per Share Average Net Per Share Average Net e vrg Per Share Average Net Weighted Weighted Weighted 2014 2015 2013 1,048 968 881 10-K 2013 2014 1,678 1,245 1,324 6,4105,715 (7,697) (2,937) (16,132) (13,880) 2015 2014 2013 84,021 81,816 101,174 12,125 (10,634) (30,012) 675,819 626,150 633,226 $590,120 $543,089 $530,728 $687,944 $615,516 $603,214 2015 4,460 0.3 1,351 — 2,652 0.1 (1,371) (0.1)(2,037) (0.1) 1,453 (6,449) 0.1 (0.4) (6,391) (0.4) (437) — 59,700 3.2 49,819 3.0 56,822 3.5 (21,366) (1.2) (18,961) (1.1) (19,348) (1.2) $648,558 35.0% $588,303 35.0% $569,916 35.0% $687,944 37.1% $615,516 36.6% $603,214 37.0% 57 ...... DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR ...... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO Federal Foreign State Federal State ...... (In thousands) Current: Deferred: A reconciliation between actual income taxes and amounts computed by applying the federal A reconciliation between actual income greater than the federal The 2015 effective tax rate was an expense of 37.1%. This expense was greater than the federal The 2014 effective tax rate was an expense of 36.6%. This expense was greater than the federal The 2013 effective tax rate was an expense of 37.0%. This expense was The provision (benefit) for income taxes consists of the following: for income taxes consists of the The provision (benefit) income taxes benefit (Dollars in thousands) before U.S. federal statutory rate on earnings statutory rate to income before income taxes is summarized as follows: statutory rate to income before income tax State income taxes, net of federal income Jobs credits, net of federal income taxes Increase (decrease) in valuation allowances Decrease in income tax reserves Other, net taxes in the total effective tax statutory tax rate of 35% due primarily to the inclusion of state income to federal and state rate. The 2015 effective income tax rate increased from 2014 due principally reserve releases in 2014 that did not reoccur, to the same extent, in 2015. taxes in the total effective tax statutory tax rate of 35% due primarily to the inclusion of state income to the favorable resolution rate. The 2014 effective income tax rate decreased from 2013 due principally tax reserve increases. of state income tax examinations and a reduction in other state income taxes in the total effective tax statutory tax rate of 35% due primarily to the inclusion of state income rate. 4. Income taxes 10-K components oftheCompany’sdeferredtaxassetsandliabilitiesareasfollows: liabilities forfinancialreportingpurposesandtheamountsusedincometaxpurposes.Significant 4. Incometaxes(Continued) Revenue Service(‘‘IRS’’).Duetothefilingofanamendedfederalincome taxreturnforthe2011 after givingconsiderationtothevaluationallowance. that theresultsofoperationswillgeneratesufficient taxable incometorealizethedeferredtaxassets respectively. Baseduponexpectedfutureincome,management believesthatitismorelikelythannot 2013 decreaseof$0.4millionwererecordedasanincrease andareductioninincometaxexpense, $1.4 millionwasrecordedasareductioninincometax expense.The2014increaseof$1.5millionand beginning in2021through2024. tax assetsandliabilitiestononcurrent.SeeNote1foradditionalinformation. Net deferredtaxliabilities Total deferredtaxliabilities Deferred taxliabilities: Total deferredtaxassets valuationallowances Less Deferred taxassets: (In thousands) Other Trademarks Inventories Property andequipment State taxcreditcarryforwards,netoffederal Other Deferred gainonsale-leaseback Tax benefitofincometaxandinterestreservesrelatedtouncertain Interest ratehedges Share basedcompensation Accrued incentivecompensation Accrued insurance Accrued rent Accrued expenses Deferred compensationexpense Deferred taxesreflecttheeffectsoftemporarydifferencesbetweencarryingamountsassetsand The Company’s2010andearliertaxyearsarenotopen forfurtherexaminationbytheInternal A valuationallowancehasbeenprovidedforstatetax creditcarryforwards.The2015decreaseof The Companyhasstatetaxcreditcarryforwardsofapproximately$16.5millionthatwillexpire Deferred taxassets(liabilities)atJanuary30,2015includethereclassificationofcurrentdeferred positions ...... NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) ...... DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... $ ...... 58 ...... (3,5)$(626,858) $(639,955) aur 9 January 30, January 29, 8400 (810,841) (834,040) (433,328) (433,548) (302,531) (320,619) 9,8 183,983 194,085 186,828 195,559 7,5)(73,188) (72,456) 062015 2016 07111,039 24,385 10,711 22,637 17,623 14,866 76,197 17,988 19,360 19,902 72,676 20,793 747 (1,794) (7,417) (2,845) (1,474) ,7 1,502 4,318 1,371 3,702 5,146 8,842 $ 8,139 8,200 ,4 3,550 9,440 10-K 3,484 3,000 (743) (908) (1,445) 590 (106) (8,636) (608) 2015 2014 2013 6,964 $ 9,343 $19,583 9,343 $19,583 $22,237 2015 2014 2013 (2,504) (1,121) (7,622) $(2,379) $(9,497) $(3,915) .... 214 198 ...... (23) 373 51 30 ...... 17 62 59 ...... $ ...... $ ...... — DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO Income tax related interest expense (benefit) Income tax related interest expense Income tax related penalty expense (benefit) Income tax related penalty expense (In thousands) Beginning balance Increases—tax positions taken in the current year Increases—tax positions taken in prior years Decreases—tax positions taken in prior years Statute expirations Settlements Ending balance (In thousands) Income tax expense (benefit) A reconciliation of the uncertain income tax positions from February 1, 2013 through January 29, 1, 2013 tax positions from February A reconciliation of the uncertain income As of January 29, 2016, accruals for uncertain tax benefits, interest expense related to income taxes interest expense related to income 2016, accruals for uncertain tax benefits, As of January 29, uncertain tax benefits, interest expense related to income taxes As of January 30, 2015, accruals for possible that the reserve for uncertain tax positions The Company believes that it is reasonably tax positions included in income tax expense consists of the The amounts associated with uncertain 2016 is as follows: 4. Income taxes (Continued) IRS, at its 2011 income tax filings. The to a limited extent, examine the Company’s year, the IRS may, tax filings. 2012 through 2014 fiscal year income choose to examine the Company’s discretion, may also the that are currently in progress. Generally, various state income tax examinations The Company has authorities. examination by the various state taxing later tax years remain open for Company’s 2011 and for a $0.9 million and $0.8 million, respectively, tax penalties were $7.0 million, and potential income consolidated noncurrent Other liabilities in the This total amount is reflected in total of $8.7 million. balance sheet. $9.3 million, $1.0 million and $0.4 million, respectively, for a and potential income tax penalties were is reflected in noncurrent Other liabilities in the consolidated total of $10.7 million. This total amount balance sheet. million in the coming twelve months principally as a result of may be reduced by approximately $2.6 issues. Also, as of January 29, 2016, approximately $7.0 million the effective settlement of outstanding impact the Company’s effective income tax rate if the Company of the uncertain tax positions would these positions. were to recognize the tax benefit for following: 10-K 5. Currentandlong-termobligations no requiredprincipalamortizationundertheFacilities. TheFacilities contain anumberofcustomary 1.65% asofJanuary29,2016. unsecured debtratings.Theweightedaverageall-ininterest rateforborrowingsundertheFacilities was Facilities are subjecttoadjustmentfromtimebasedontheCompany’slong-termsenior applicable interestratemarginsforborrowings,thefacility feesandtheletterofcreditunder issued undertheRevolving Facility. AsofJanuary29,2016,thecommitmentfeeratewas0.15%.The any usedandunusedcommitmentamountsoftheFacilities, andcustomaryfeesonlettersofcredit borrowings and0.10%forbase-rateborrowings.The Company mustalsopayafacilityfee,payableon rate). Theapplicableinterestratemarginforborrowings asofJanuary29,2016was1.10%forLIBOR plus, attheCompany’soption,either(a)LIBORor(b)abaserate(whichisusuallyequaltoprime Facilities. Company incurred$2.6millionofnewdebtissuancecostsassociatedwiththerefinancing of creditupto$175.0million.TheFacilities arescheduledtomature onOctober20,2020.The unsecured revolvingcreditfacility(the‘‘Revolving Facility’’) whichprovidesfortheissuanceofletters $425.0 millionseniorunsecuredtermloanfacility(the‘‘Term Facility’’) anda$1.0billionsenior $0.8 million.Theamendedandrestatedseniorunsecuredcreditfacilities(the‘‘Facilities’’) consistofa and issuedseniornotesinanaggregateprincipalamountof$500.0million,netdiscounttotaling amended andrestateditsseniorunsecuredcreditfacilities(andrefinancedallborrowingsthereunder) Borrowing Facilities and2015Refinancing Current andlong-termobligationsconsistofthefollowing: The Facilities canbevoluntarilyprepaidinwholeorpartatanytimewithoutpenalty.Thereis Borrowings undertheFacilities bearinterestatarateequalto anapplicableinterestratemargin On October20,2015,theCompanyconsummatedarefinancing,pursuanttowhich Long-term portion Long-term currentportion Less: Debt issuancecosts,net Tax incrementfinancingdueFebruary 1,2035 Capital leaseobligations 4.150% SeniorNotesdueNovember1,2025(netof 3.250% SeniorNotesdueApril15,2023(netofdiscount 1.875% SeniorNotesdueApril15,2018(netofdiscount 4.125% SeniorNotesdueJuly15,2017 Senior unsecuredcreditfacilities (In thousands) discount of$764) $1,775 and$1,991) $203 and$294) Revolving Facility Term Facility NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... $ ...... 60 ...... 29915$2,623,965 $2,969,175 aur 9 January30, January 29, ,7,5 2,725,123 2,970,554 9,3 — 898,009 499,236 399,706 898,225 — 500,000 399,797 500,000 925,000 $ 251,000 425,000 1,0)(15,462) (18,100) 2016 05011,995 10,590 139 (101,158) (1,379) ,0 5,875 4,806 2015 10-K 61 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO As of January 29, 2016, under the Revolving Facility, the Company had borrowing availability of the Company Facility, As of January 29, 2016, under the Revolving of $0.3 million for the write off of debt issuance costs The Company incurred a pretax loss issued $500.0 million aggregate principal amount of 4.150% On October 20, 2015, the Company all of its Senior Notes at any time at redemption prices set The Company may redeem some or the ability of the Company The Senior Indenture contains covenants limiting, among other things, them occurs, would The Senior Indenture also provides for events of default which, if any of fiscal years listed Scheduled debt maturities, including capital lease obligations, for the Company’s 5. Current and long-term obligations (Continued) 5. Current and long-term the things, restrict, subject to certain exceptions, covenants that, among other affirmative and negative of the liens; sell all or substantially all subsidiaries’ ability to: incur additional Company’s and its lines of or change in the Company’s consummate certain fundamental changes Company’s assets; financial covenants also contain The Facilities additional subsidiary indebtedness. business; and incur leverage coverage ratio and a maximum maintenance of a minimum fixed charge which require the Facilities with all such covenants. The 29, 2016, the Company was in compliance ratio. As of January events of default. also contain customary had outstanding letters of credit totaling $38.7 million, $722.0 million. In addition, the Company Facility. the Revolving $27.0 million of which were issued under credit facilities, which is reflected in Other (income) expense in associated with the refinancing of its for the year ended January 29, 2016. the consolidated statement of income Notes’’), net of discount of $0.8 million, which are scheduled senior notes due 2025 (the ‘‘2025 Senior on the 2025 Senior Notes is payable in cash on May 1 and to mature on November 1, 2025. Interest on May 1, 2016. The Company incurred $4.4 million of debt November 1 of each year, commencing of the 2025 Senior Notes. The net proceeds from the sale of issuance costs associated with the issuance of the to repay all with borrowings under the Facilities, the 2025 Senior Notes were used, together credit agreement and for general corporate purposes. outstanding borrowings under the then-existing and the Company’s other Senior Notes due 2017, 2018 and 2023 as Collectively, the 2025 Senior Notes the ‘‘Senior Notes’’, each of which were issued pursuant to an reflected in the table above comprise by supplemental indentures relating to each series of Senior indenture as supplemented and amended the ‘‘Senior Indenture’’). Notes (as so supplemented and amended, the occurrence of a change of control triggering event, which is forth in the Senior Indenture. Upon holder of the Senior Notes has the right to require the Company defined in the Senior Indenture, each price in cash equal to 101% of to repurchase some or all of such holder’s Senior Notes at a purchase to, but excluding, the repurchase the principal amount thereof, plus accrued and unpaid interest, if any, date. sell or otherwise dispose of all and its subsidiaries to (subject to certain exceptions): consolidate, merge, indebtedness secured by liens on or substantially all of the Company’s assets; and to incur or guarantee any shares of voting stock of significant subsidiaries. to become or to be permit or require the principal of and accrued interest on the Senior Notes declared due and payable, as applicable. 2019—$1,020; below are as follows (in thousands): 2016—$1,379; 2017—$501,290; 2018—$400,892; 2020—$676,980; thereafter—$1,409,835. 10-K those measurementsareclassified. recurring basisasofJanuary29,2016,aggregatedbythelevelinfairvaluehierarchywithinwhich 6. Assetsandliabilitiesmeasuredatfairvalue commodity prices. enter intoderivativefinancialinstrumentstoprotect against futurepricechangesrelatedtothese values causedbythefluctuationinpricesofcommodities. From timeto timetheCompanymay amounts, thevalueofwhicharedeterminedprimarily byinterestrates. arise frombusinessactivitiesthatresultinthereceipt orpaymentoffutureknownanduncertaincash Specifically, theCompanymayenterintoderivativefinancialinstrumentstomanageexposuresthat duration ofitsdebtfundingand,fromtimetotime,throughtheusederivativefinancialinstruments. risks, includinginterestrate,liquidity,andcreditrisk,primarilybymanagingtheamount,sources, operational risksthroughmanagementofitscorebusinessactivities.TheCompanymanageseconomic conditions. TheCompanyprincipallymanagesitsexposurestoawidevarietyofbusinessand Risk managementobjectiveofusingderivatives intended toreduceriskbyhedginganunderlyingeconomicexposure. 7. Derivativesandhedgingactivities of January29,2016. 3)as does nothaveanyrecurringfairvaluemeasurementsusingsignificantunobservableinputs(Level short-term investments,receivablesandpayablesapproximatetheirrespectivefairvalues.TheCompany Reflected atfairvalueintheconsolidatedbalancesheetasacomponentofAccrued expensesand (b) Reflected atbookvalueintheconsolidatedbalancesheetasCurrentportionoflong-term (a) Liabilities: (In thousands) Deferred compensation(b) obligations(a) Long-term The followingtablepresentstheCompany’sassetsandliabilitiesmeasuredatfairvalueona In addition,theCompanyisexposedtocertainrisks arising fromuncertaintiesoffuturemarket The Companyisexposedtocertainrisksarisingfrombothitsbusinessoperationsandeconomic From timetotime,the Companyentersintocertainfinancialinstrumentpositions,allofwhichare The carryingamountsreflectedintheconsolidatedbalancesheetsforcash,cashequivalents, other currentliabilitiesof$8,307andacomponentnoncurrentOther$12,757. obligationsof$2,969,175. obligations of$1,379andLong-term NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... $ ...... 62 Quoted Prices o dnia te Significant Other for Identical sesadOsral nbevbeBalanceat Unobservable Observable Assets and iblte nusIpt January29, Inputs Inputs Liabilities ,0,7 6549$ $2,980,929 $— $675,459 2,305,470 Lvl1 Lvl2 Lvl3 2016 (Level3) (Level2) (Level 1) in Active akt Significant Markets 104——21,064 — — 21,064 10-K 1,173 2016 2015 January 29, January 30, 63 ...... $— $ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO other current liabilities Interest rate swaps classified as Accrued expenses and Interest rate swaps classified as Accrued Derivatives Designated as Hedging Instruments (in thousands) The Company’s objectives when using interest rate derivatives are to add stability to interest when using interest rate derivatives The Company’s objectives the fair value of derivatives designated and that qualify as cash The effective portion of changes in with a combined notional value of $875.0 million designated The Company had interest rate swaps a loss on the settlement of treasury locks associated with the In April 2013, the Company recorded to manage the Company’s Derivatives not designated as hedges are not speculative and are used instruments as well as The table below presents the fair value of the Company’s derivative financial 7. Derivatives and hedging activities (Continued) 7. Derivatives and of interest rate risk Cash flow hedges the accomplish these objectives, To its exposure to interest rate changes. expense and to manage as part of its interest rate risk management time to time used interest rate swaps Company has from amounts involve the receipt of variable-rate swaps designated as cash flow hedges strategy. Interest rate of the fixed-rate payments over the life in exchange for the Company making from a counterparty entered amount. The Company also previously exchange of the underlying notional agreements without as cash flow hedges of interest rate risk prior to the issuance into treasury locks that were designated of long-term debt in April 2013. as ‘‘OCI’’) other comprehensive income (loss) (also referred to flow hedges is recorded in Accumulated earnings in the period that the hedged forecasted transaction and is subsequently reclassified into of the change in fair value of the interest rate swaps, if any, is affects earnings. The ineffective portion recognized directly in earnings. risk that expired on May 31, 2015. Such interest rate swaps were as cash flow hedges of interest rate associated with existing variable-rate debt prior to their maturity. used to hedge the variable cash flows were other comprehensive income (loss) related to derivatives Amounts reported in Accumulated payments were made on the Company’s variable-rate debt. reclassified to interest expense as interest deferred to OCI and is being amortized as an increase to interest issuance of long-term debt which was maturity in 2023. During the 52-week period following expense over the period of the debt’s that approximately $1.3 million will be reclassified as an January 29, 2016, the Company estimates to the amortization of the loss associated with the treasury locks. increase to interest expense related other comprehensive income (loss) in the consolidated All of the amounts reflected in Accumulated are related to cash flow hedges. balance sheets for the periods presented Non-designated hedges of commodity risk requirements. Changes in exposure to commodity price risk but do not meet strict hedge accounting recorded directly in earnings. the fair value of derivatives not designated in hedging relationships are As of January 29, 2016, the Company had no such non-designated hedges. 2016 and January 30, 2015: their classification on the consolidated balance sheets as of January 29, 10-K applicable: reflected intheconsolidatedstatementsofcomprehensiveincomeandshareholders’equity,as 7. Derivativesandhedgingactivities(Continued) therefore theCompanyholdsdebtinstrumentpertaining toitsleasefinancingobligation.Becausea represents debtissuedbythethirdpartyentityfrom which theCompanyleasesArdmoreDCand at thedateofpurchasewhichapproximatedremaining financingobligation.TheArdmoreNote promissory note(the‘‘Ardmore Note’’)fromanunrelatedthirdpartywithafacevalueof$34.3million recorded intheconsolidatedbalancesheets.InAugust 2007,theCompany purchasedasecured The propertyandequipment,alongwiththerelatedlease obligationassociatedwiththistransactionare other things,thelessor’sabilitytoputpropertyback totheCompanyundercertaincircumstances. transaction isbeingaccountedforasafinancingobligation ratherthanasaleasresultof,among with thesaletransaction,Companyleasedpropertybackforaperiodof23years.The recognized asareductionofrentexpenseoverthe15-yearinitialleasetermproperties. in cashproceedsofapproximately$281.6millionandadeferredgain$67.2whichisbeing transaction, theCompanyleasedpropertiesbackforaperiodof15years.Thetransactionresulted aware ofanymaterialviolationssuchcovenants. statements. Certainleasescontainrestrictivecovenants,andasofJanuary29,2016,theCompanyisnot beneficiary oftheseVIEsand,accordingly,hasnotincludedentitiesinitsconsolidatedfinancial accounting definitionofaVariable InterestEntity(‘‘VIE’’).TheCompanyisnottheprimary arrangement. Theentitiesinvolvedintheownershipstructureunderlyingtheseleasesmeet subject tooperatingleaseagreementsandtheleasedArdmore,OklahomaDCisafinancing specified percentageofdefinedsalesvolume. options. CertainoftheCompany’sleasedstoreshaveprovisionsforcontingentrentalsbasedupona The Companyalsohasstoressubjecttoshorter-termleasesandmanyofthesehaverenewal landlords whichtypicallycarryaprimaryleasetermofupto15yearswithmultiplerenewaloptions. of itsretailstores.ManytheCompany’sstoresaresubjecttobuild-to-suitarrangementswith Leases 8. Commitmentsandcontingencies The tablebelowpresentsthepre-taxeffectofCompany’sderivativefinancialinstrumentsas In January1999,theCompanysolditsDClocatedinArdmore,Oklahomaforcashandconcurrent In January2014,theCompanysold233storelocationsforcashandconcurrentwithsale The landandbuildingsoftheCompany’sDCsinFulton, MissouriandIndianola,Mississippiare As ofJanuary29,2016,theCompanywascommittedunderoperatingleaseagreementsformost Derivatives inCashFlowHedgingRelationships (in thousands) Loss relatedtoeffectiveportionofderivative Loss relatedtoeffectiveportionofderivative Loss expense reclassified fromAccumulated OCItoInterest recognized inOCI NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... 876 $ 3 $ ...... 64 244$,3 4,604 $ $5,130 $2,494 0521 2013 2014 2015 $16,036 10-K 866,444 831,367 783,564 720,569 632,998 3,394,301 $7,229,243 7,793 9,099 12,058 2015 2014 2013 $849,115 $776,103 $674,849 $856,908 $785,202 $686,907 65 ...... DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR ...... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO ...... $ ...... included in rent expense for the years ended January 29, 2016, January 30, 2015, and included in rent expense for the years ended January 29, 2016, January January 31, 2014, respectively. (a) of leasehold interests of $0.9 million, $5.8 million and $11.9 million Excludes amortization (In thousands) Minimum rentals(a) (In thousands) 2016 2017 2018 2019 2020 Thereafter minimum payments Total Contingent rentals In September 2011, the Chicago Regional Office of the United States Equal Employment In September 2011, the Chicago Regional process, and despite The Company and the EEOC engaged in the statutorily required conciliation Court for the Northern On June 11, 2013, the EEOC filed a lawsuit in the United States District Total minimum payments for capital leases were $5.9 million, with a present value of $4.8 million, minimum payments for capital Total under all operating leases is as follows: expense Rent Future minimum payments as of January 29, 2016 for operating leases are as follows: as of January 29, 2016 for operating minimum payments Future Legal proceedings Opportunity Commission (‘‘EEOC’’ or ‘‘Commission’’) notified the Company of a cause finding related alleges that the Company’s to the Company’s criminal background check policy. The cause finding with certain criminal criminal background check policy, which excludes from employment individuals candidates and convictions for specified periods, has a disparate impact on African-American VII’’). of 1964, as amended (‘‘Title VII of the Civil Rights Act employees in violation of Title notified the Company on the Company’s good faith efforts to resolve the matter, the Commission July 26, 2012 of its view that conciliation had failed. Dolgencorp, LLC d/b/a Dollar General in District of Illinois entitled Equal Opportunity Commission v. as of January 29, 2016. The gross amount of property and equipment recorded under capital leases and as of January 29, 2016. The gross amount 29, 2016 and January 31, 2015, was $29.8 million. Accumulated financing obligations at both January under capital leases and financing obligations at January 29, depreciation on property and equipment million and $10.6 million, respectively. 2016 and January 30, 2015, was $12.4 8. Commitments and contingencies (Continued) 8. Commitments and of its for the Ardmore Note as a reduction exists, the Company is accounting legal right of offset sheets. obligation in its consolidated balance outstanding financing 10-K for various alleged violations of California’s Labor Code.Specifically,theplaintiffallegesthatshe and for variousallegedviolationsofCalifornia’sLabor California fortheCountyofSanBernardinoinwhich theplaintiffseekstoproceedunderPAGA andDoes1through50(‘‘Pleasant’’)wasfiledintheSuperiorCourtofState of California, LLC, which wasunsuccessful. parties havebeenorderedtoengageininformaldiscovery. AmediationwasheldinNovember2015, California law.TheCompanyfileditsanswertotheamended complaintonDecember23,2014.The inaccurate wagestatementsandfailuretoprovideappropriate payuponterminationinviolationof Main asanamedplaintiffandtoaddputativeclassclaims onbehalfof‘‘keycarriers’’foralleged 2013. Private Attorney General Act (the‘‘PAGA’’). TheCompanyfileditsanswertothecomplaintonJuly1, Varela plaintiffalsoassertsaclaimforunfairbusinesspracticesandseekstoproceedunderCalifornia’s and costsseekstorepresentaputativeclassofCalifornia‘‘keycarriers’’astheseclaims.The injunctive relief,consequentialdamages,pre-judgmentinterest,statutorypenaltiesandattorneys’fees meal andrestperiodsinviolationofCalifornialawseekstorecoverallegedunpaidwages, original complaint,theVarela plaintiffallegesthatheandother‘‘keycarriers’’werenotprovidedwith (‘‘Varela’’) wasfiledintheSuperiorCourtofStateCaliforniaforCountyRiverside.In on theCompany’sconsolidatedfinancialstatementsasawhole. efforts astothemeritsofaction,resolutionthismattercouldhaveamaterialadverseeffect were toproceedsuccessfullyasaclassorsimilaractiontheCompanyisunsuccessfulinitsdefense reasons, theCompanycannotestimatepotentialexposureorrangeofloss.Ifmatter the Companywillbesuccessfulinitsdefenseofthisactiononmeritsorotherwise.For these time, itisnotpossibletoestimatethevalueofclaimsasserted,andnoassurancescanbegiventhat permitted toproceedasaclassorinsimilarfashionthesizeofanyputativeclass.Likewise,atthis treatment. However,atthistime,itisnotpossibletopredictwhethertheactionwillultimatelybe investments. TheCompanyalsodoesnotbelievethatthismatterisamenabletoclassorsimilar safe environmentforitsemployeesandcustomerstheprotectionofassetsshareholders’ various discoveryissues. of itsinvestigation.TheCompanyhasopposedthismotionasprematurely-filedinlightthestatus Company’s defenseschallengingthesufficiencyofCommission’sconciliationeffortsandscope documents, informationandelectronicdatafortheperiod2004topresent. various discoverymotions,thecourthasenteredordersrequiringCompany’sproductionof Fact discoveryrelatedtoliabilityisbecompletedonorbeforeNovember16,2016.Inresponse complaint onAugust 9,2013. injunctive reliefonbehalfofaclass‘‘BlackApplicants.’’TheCompanyfileditsanswertothe impact on‘‘BlackApplicants’’inviolationofTitle VIIandseekstorecovermonetarydamages which theCommissionallegesthatCompany’scriminalbackgroundcheckpolicyhasadisparate 8. Commitmentsandcontingencies(Continued) On January15,2015,alawsuitentitledKendra Pleasant v. DollarGeneralCorporation,Dolgen On November4,2014,theVarela plaintifffiledanamendedcomplainttoaddVictoria Dinger Lee On May23,2013,alawsuitentitledJuanVarela v. Dolgen California andDoes1through50 The Companybelievesthatitscriminalbackgroundcheckprocessisbothlawfulandnecessarytoa MotionforPartialCurrently pendingistheEEOC’s SummaryJudgmentrelatingtotwoof The Courthasbifurcatedtheissuesofliabilityanddamagesforpurposesdiscoverytrial. NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES 66 10-K action. For these reasons, Pleasant, or Sullivan action. For 67 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR David Sanchez v. Dolgencorp, LLC (filed in the Central District of California on David Sanchez v. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO In December 2015, the Company was notified of seven lawsuits in which the plaintiffs allege In December 2015, the Company was notified of seven lawsuits in which Julie Sullivan v. Dolgen California and Does 1 through 100 Dolgen California and Does 1 through 20, 2015, a lawsuit entitled Julie Sullivan v. On February this matter to the United States District Court for the On April 8, 2015, the Company removed and practices comply with California law and that the The Company believes that its policies Varela, Pleasant, or Sullivan action ultimately will be permitted to proceed as a class, and no Varela, the Company is unable to estimate any potential loss or range of loss in these matters; however, if the the Company is unable to estimate any potential loss or range of loss in these actions could have a Company is not successful in its defense efforts, the resolution of any of as a whole. material adverse effect on the Company’s consolidated financial statements and sale of Dollar violation of state consumer protection laws relating to the labeling, marketing federal district courts of the General private-label motor oil. Six of these lawsuits were filed in various Dolgencorp, LLC (filed in the Southern United States: Bradford Barfoot and Leonard Karpeichik v. Dollar General v. District of Florida on December 18, 2015) (‘‘Barfoot’’); Milton M. Cooke, Jr. William on December 21, 2015) (‘‘Cooke’’); Flinn v. Corporation (filed in the Southern District of Texas John J. Dolgencorp, LLC (filed in the District Court for New Jersey on December 17, 2015) (‘‘Flinn’’); Dolgencorp, LLC (filed in the District Court of Maryland on December 23, 2015) McCormick, III v. (‘‘McCormick’’); assurances can be given that the Company will be successful in its defense of these actions on the assurances can be given that the Company will be successful in its defense either the size of any potential merits or otherwise. Similarly, at this time the Company cannot estimate , class or the value of the claims asserted in the Varela 8. Commitments and contingencies (Continued) 8. Commitments and time worked, employees were not paid for all non-exempt California store-level other similarly situated with work related expenses, and provided rest breaks, reimbursed for necessary provided meal and interest, wages, civil and statutory penalties, and seeks to recover unpaid accurate wage statements court to stay all filed a demurrer asking the costs. On March 12, 2015, the Company attorneys’ fees and matter. The issuance of a final judgment in theVarela Pleasant matter pending an proceedings in the matter. until resolution of the Varela Company’s demurrer and stayed proceedings court granted the Court of the State of transfer this matter to the Superior Pleasant plaintiff moved to Subsequently, the matter is pending, which the Company where the Varela California for the County of Riverside plaintiff’sopposed. The court denied the Pleasant motion to transfer. Court of the State of California for the County of Alameda in (‘‘Sullivan’’) was filed in the Superior other similarly situated Dollar General Market store managers which the plaintiff alleges that she and classified as exempt employees and were not provided with in the State of California were improperly statements in violation of California law. The Sullivan plaintiff meal and rest breaks and accurate wage store employees were not provided with printed wage also alleges that she and other California of California law. The plaintiff seeks to recover unpaid wages, statements, purportedly in violation penalties, interest, injunctive relief, restitution, and attorneys’ including overtime pay, civil and statutory fees and costs. filed its answer on the same date. On April 29, 2015, the Sullivan Northern District of California and The Company’s response to the add a claim under the PAGA. plaintiff amended her complaint to 14, 2015. The plaintiff’samended complaint was filed on May certification was filed on motion for class set for trial on October 31, 2016. A mediation conducted in early March 12, 2016. The matter has been March 2016 was unsuccessful. or similar treatment. The Company Pleasant, and Sullivan actions are not appropriate for class Varela, however, at this time, it is not possible to predict whether intends to vigorously defend these actions; the 10-K Barfoot matterpendingatransferdecisionbytheJudicialPanel onMultidistrictLitigation. receiving noticeoftheCompany’sMotiontoTransfer, thecourtstayedandadministrativelyclosed the Southern DistrictofFlorida,forconsolidatedpretrial proceedings(‘‘MotiontoTransfer’’). After the EasternDistrictofMichigan,or,inalternative totheWestern DistrictofMissouriorthe Multidistrict Litigationrequestingthatallcasesbetransferred totheUnitedStatesDistrictCourtfor 10,2016. on March Cooke matteronFebruary 24,2016;intheSisemorematteronMarch4,and Flinn matter allegations intheBarfootmatteronFebruary 4,2016;intheHillmatteronFebruary 8,2016;inthe (including trebledamages),punitivedamagesandattorneys’fees. products atissueandrequiringthedisseminationofcorrectiveadvertising,certainstatutorydamages some orallofthefollowingrelief:compensatorydamages,injunctivereliefprohibitingsale basis. Eachplaintiffseeks,forhimselforherselfandtheputativeclasshesheseekstorepresent, statewide classbasis,whiletheplaintiffsinothermattersseektoproceedonlyona 15,2016)(‘‘Taschner’’). District ofMissourionMarch (‘‘Wait’’); andJamesTaschner v. DollarGeneralCorporationandDolgencorp,LLC(filedintheEastern Corporation andDolgencorp,LLC(filedintheWestern DistrictofArkansasonFebruary 16,2016) in theCentralDistrictofCaliforniaonFebruary 8,2016)(‘‘Vega’’); MatthewWait v. DollarGeneral the NorthernDistrictofIllinoisonFebruary 12,2016)(‘‘Solis’’);Roberto Vega v.Dolgencorp,LLC(filed February 9,2016)(‘‘Sheehy’’); GerardoSolisv. DollarGeneralCorporationandDGRetail, LLC(filedin Sheehy v. DollarGeneralCorporationandDGRetail, LLC(filedintheDistrictCourtforMinnesotaon and Dolgencorp,LLC(filedintheWestern DistrictofMissourionFebruary 8,2016) (‘‘Oren’’);Scott in theDistrictofKansasonFebruary 9,2016)(‘‘Meyer’’);Robert Orenv. DollarGeneralCorporation LLC(filed February 10,2016)(‘‘Harvey’’); NicholasMeyerv. DollarGeneralCorporationandDGRetail, Harvey v. DollarGeneralCorporationandDolgencorp,LLC(filedintheDistrictCourtforNebraskaon Dolgencorp, LLC(filedintheEasternDistrictofMichiganonFebruary 8,2016)(‘‘Gooel’’);Janine (filed intheSouthernDistrictofNewYork onFebruary 8,2016)(‘‘Gadson’’);BruceGooelv. in theEasternDistrictofKentuckyonFebruary 10,2016)(‘‘Foppe’’); Kevin Gadsonv. Dolgencorp,LLC February 10,2016)(‘‘Fruhling’’); JohnFoppe v. DollarGeneralCorporationandDolgencorp,LLC (filed Dollar GeneralCorporationandDolgencorp,LLC(filedintheSouthernDistrictofOhioon Retail, LLC(filedintheDistrictofColoradoonFebruary 10,2016)(‘‘Brown’’);MiriamFruhling v. various federaldistrictcourtsoftheUnitedStates:AllenBrownv. DollarGeneralCorporation andDG similar claimsconcerningDollarGeneralprivate-labelmotoroil.Alloftheselawsuitswerefiledin Court fortheDistrictofVermont onFebruary 8,2016. Court inVermont onDecember22,2015,andsubsequentlyremovedtotheUnitedStatesDistrict of OklahomaonDecember21,2015)(‘‘Sisemore’’). Sisemorev.December 17,2015)(‘‘Sanchez’’);andWill Dolgencorp,LLC(filedintheNorthernDistrict 8. Commitmentsandcontingencies(Continued) On March7,2016,theCompanyfiledamotionwith the UnitedStatesJudicialPanel on The Companyfiledamotiontodismisstheplaintiffs’claimsandstrikeclass On February 1,2016, the Sanchezplaintiffvoluntarilydismissedhiscomplaintwithoutprejudice. The plaintiffsintheTaschner, Vega andSanchezmattersseektoproceedonanationwide In February andMarch2016,theCompanywasnotifiedofthirteenadditionallawsuitsalleging The seventhmatter,ChuckHillv. Dolgencorp,LLC (‘‘Hill’’),wasfiledinOrleansCountySuperior NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES 68 10-K 69 DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO matters on AprilOren and Vega 2016. 22, matter on March 21, 2016; in the matter on March pleadings are due in the McCormick The Company’s responsive complies sale of its private-label motor oil that the labeling, marketing and The Company believes claims to time, the Company is a party to various other legal actions involving time From Plan, which became effective on The Dollar General Corporation 401(k) Savings and Retirement is dependent on the plan, A participant’s right to claim a distribution of his or her account balance The Company also has a nonqualified supplemental retirement plan (‘‘SERP’’) and compensation Compensation The CDP/SERP Plan assets are invested in accounts selected by the Company’s 8. Commitments and contingencies (Continued) 8. Commitments and matter on AprilFruhling 2016; in the Meyer matter on April 4, matter on April 7, 2016; in the Sheehy 6, 2016; and matter and Gooel matter on April 15, 2016; in the Foppe 2016; in the Solis matter on April 8, in the Harvey, believes not misleading. The Company further and state requirements and is with applicable federal to treatment. The Company intends are not appropriate for class or similar that these matters at this time, it is not possible to predict whether any of these vigorously defend these actions; however, a class or the size of any putative class. Likewise, at this time, it cases will be permitted to proceed as of the claims asserted, and no assurances can be given that the is not possible to estimate the value these of these actions on the merits or otherwise. For Company will be successful in its defense the potential loss or range of loss in these matters; reasons, the Company is unable to estimate in its defense efforts, the resolution of any of these actions however if the Company is not successful on the Company’s consolidated financial statements as a whole. could have a material adverse effect including actions by employees, consumers, suppliers, incidental to the conduct of its business, private actions, class actions, administrative proceedings, government agencies, or others through including without limitation under federal and state employment regulatory actions or other litigation, believes, based upon information currently available, that laws and wage and hour laws. The Company individually and in the aggregate, will be resolved without a such other litigation and claims, both consolidated financial statements as a whole. However, material adverse effect on the Company’s these actions or claims developments could cause Future litigation involves an element of uncertainty. the Company’s results of operations, cash flows, or financial to have a material adverse effect on lawsuits, if decided adversely to the Company or settled by the position. In addition, certain of these to the Company’s financial position or may negatively affect Company, may result in liability material business operation are required. operating results if changes to the Company’s 9. Benefit plans to the Employee Retirement January 1, 1998, is a safe harbor defined contribution plan and is subject (‘‘ERISA’’). and Income Security Act Service regulations. All active participants are fully vested in and Internal Revenue guidelines ERISA expensed approximately all contributions to the 401(k) plan. During 2015, 2014 and 2013, the Company contributions. $15.0 million, $13.7 million and $13.0 million, respectively, for matching deferral plan (‘‘CDP’’), known as the Dollar General Corporation CDP/SERP Plan, for a select group expense for these plans of management and other key employees. The Company incurred compensation and 2013, respectively. of approximately $1.1 million, $0.8 million and $1.2 million in 2015, 2014 is reflected in the Committee or its delegate, and the associated deferred compensation liability consolidated balance sheets as further discussed in Note 6. 10-K the methodologyappliedtodevelopeachassumption, areasfollows: granted intheyearsendedJanuary29,2016,30,2015,and31,2014,asummaryof stock onthedateofgrant. contractual termof10yearsandanexercisepriceequaltothefairvalueunderlyingcommon stockholder’s agreement(‘‘MSA’’) enteredintowitheachoptionholder.TheMSA Optionshavea limited exceptions.TheMSA Optionsaresubjecttovariousprovisionssetforthinamanagement MSA Optionsgenerallyvestratablyonanannualbasisoveraperiodofapproximatelyfiveyears,with cumulative financial-basedtargets(‘‘MSA Performance Options’’) (collectively,the‘‘MSA Options’’). (‘‘MSA Time Options’’)andoptionsthatvestupontheachievementofpredeterminedannualor were acombinationofstockoptionsthatvestsolelyuponthecontinuedemploymentrecipient in sharesofcommonstockonthevestingdate. grant. With limitedexceptions, theperformanceshareunitandrestrictedstockawardsarepayable over athree-yearperiod,providedthatcertainminimumperformancecriteriaaremetintheyearof generally vestratablyoveraoneorthree-yearperiod.Performance shareunitsgenerallyvestratably annual basisoverfour-yearandthree-yearperiods,respectively.Awards grantedtoboardmembers exceptions, stockoptionsandrestrictedunitsgrantedtoemployeesgenerallyvestratablyonan stock options,restrictedstock,unitsandperformanceshareunits.With limited such sharesareavailableforfuturegrants. common stockauthorizedforgrantunderthePlanis31,142,858.AsofJanuary29,2016,18,556,241 with theCompany,itssubsidiariesandcertainofaffiliates.ThenumbersharesCompany equivalent rightstokeyemployees,directors,consultantsorotherpersonshavingaservicerelationship granting ofstockoptions,appreciationrights,andotherstock-basedawardsordividend Employees, whichplanwassubsequentlyamended(assoamended,the‘‘Plan’’).ThePlanallows compensation expense. valuation modelinvolvesassumptionsthatarejudgmentalandhighlysensitiveinthedeterminationof at thetimeofvaluationandreduceexpenseratablyovervestingperiod.Theapplicationthis estimated onthegrantdateusingBlack-Scholes-Mertonvaluationmodel.Forfeitures areestimated compensation expenseovertheserviceperiod.ThefairvalueofCompany’sstockoptiongrantsare standards, underwhichthefairvalueofeachawardisseparatelyestimatedandamortizedinto 10. Share-basedpayments The weightedaverageforkeyassumptionsusedindeterminingthefairvalueofallstockoptions From July2007through May2011,asignificantmajorityoftheCompany’sshare-basedawards Since May2011,mostoftheshare-basedawardsissuedbyCompanyhavebeeninform On July6,2007,theCompany’sBoardofDirectorsadopted2007StockIncentivePlanforKey The Companyaccountsforshare-basedpaymentsinaccordancewithapplicableaccounting Expected termofoptions(years) Weighted averagerisk-freeinterestrate Expected stockpricevolatility Expected dividendyield NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... 64636.3 6.3 6.4 ...... 70 aur 9 aur 0 January 31, January30, January 29, 53 56 26.2% 25.6% 25.3% 0621 2014 2015 2016 .%19 1.2% 0% 1.9% 0% 1.8% 1.2% 10-K Units Intrinsic Issued Value (51,735) 212,583 103,666 144,097 $10,816 (120,417) Average Remaining 517,375 $47.31 6.7 $14,355 Options Exercise Contractual Intrinsic (703,956)(512,760) 45.66 61.67 2,399,124 $49.69 1,247,557 74.73 2,429,965 $61.19 8.1 $33,701 71 ...... DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR ...... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO (Intrinsic value amounts reflected in thousands) Issued Price in Years Term Value Balance, January 30, 2015 (Intrinsic value amounts reflected in thousands) Granted Converted to common stock Canceled Balance, January 29, 2016 Balance, January 30, 2015 Granted Exercised Canceled Balance, January 29, 2016 Exercisable at January 29, 2016 Expected dividend yield—This is an estimate of the expected dividend yield on the Company’s yield—This is an estimate of the expected Expected dividend the amount by which the price of the volatility—This is a measure of Expected stock price rate for the week of the grant the U.S. Treasury average risk-free interest rate—This is Weighted period of time over which the options granted are expected Expected term of options—This is the during option activity, exclusive of options subject to an MSA, A summary of the Company’s stock The weighted average grant date fair value per share of non-MSA options granted was $18.48, The weighted average grant date fair value per share of non-MSA Company’s annual The number of performance share unit awards earned is based upon the 10. Share-based payments (Continued) 10. Share-based payments compensation expense. in the dividend yield will decrease stock. An increase the to fluctuate. Since November 2011, stock has fluctuated or is expected Company’s common publicly historical volatility of the Company’s for awards have been based on the expected volatilities will increase compensation expense. An increase in the expected volatility traded common stock. life of the option. An increase in the risk-free interest rate having a term approximating the expected will increase compensation expense. has estimated the expected term as the mid-point between the to remain outstanding. The Company of the option. An increase in the expected term will increase vesting date and the contractual term compensation expense. as follows: the year ended January 29, 2016 is $17.26 and $13.86 during 2015, 2014 and 2013, respectively. The intrinsic value of non-MSA options value of non-MSA $17.26 and $13.86 during 2015, 2014 and 2013, respectively. The intrinsic $0.8 million, respectively. exercised during 2015, 2014, and 2013 was $20.8 million, $2.5 million and A summary of financial performance in the year of grant as specified in the award agreement. 2016 is as follows: performance share unit award activity during the year ended January 29, 10-K follows: $74.72, $57.91and$48.11during2015,2014,2013,respectively. 10. Share-basedpayments(Continued) awards was$48.2millionwithanexpectedweightedaverageexpenserecognitionperiodof1.7years. 2015 trancheoftheawardwerenotsatisfiedandthereforeapplicablesharesdidvest. 2015. Thetargetfor2014wasmetandtheapplicablesharesvested.Certainconditionsrelatingto contingent upon,amongotherthings,meetingcertainspecifiedearningspersharetargetsfor2014and on thegrantdateof$45.25pershare,withawardscheduledtovestinone-halfincrements stock toitsformerChairmanandChiefExecutiveOfficer.Therestrictedawardhadafairvalue respectively. Options exercisedduring2015,2014and2013was$4.9million,million$39.1 3.9 years,andanaggregateintrinsicvalueof$8.1million.TheMSA Performance exercisable, withanaverageexercisepriceof$21.23,remainingcontractualterm 2015, 2014and2013was$6.6million,$6.8million$39.4respectively. aggregate intrinsicvalueof$9.5million.TheMSA Time Optionsexercisedduring with anaverageexercisepriceof$20.36,remainingcontractualterm3.8years,and $57.87 and$48.20during2015,20142013,respectively. A summaryofrestrictedstockunitawardactivityduringtheyearendedJanuary29,2016isas The weightedaveragegrantdatefairvaluepershareofperformanceunitsgrantedwas At January29,2016,thetotalunrecognizedcompensationcostrelated tononvestedstock-based In March2012,theCompanyissuedaperformance-basedawardof326,037sharesrestricted At January29,2016,151,097MSA Performance Optionswereoutstanding,allofwhich At January29,2016,173,091MSA Time Optionswereoutstanding, allofwhichwereexercisable, The weightedaveragegrantdatefairvaluepershareofrestrictedstockunitsgrantedwas$74.67, Balance, January29,2016 Canceled Converted tocommonstock Granted Balance, January30,2015 (Intrinsic valueamountsreflectedinthousands) NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) ...... DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... 72 (130,699) (326,383) 4,1 $48,107 640,910 383,134 714,858 sudValue Issued nt Intrinsic Units 10-K 2013 2014 2015 2,522,7011,289,423 2,344,9931,098,827 1,205,373 2,259,516 1,038,142 1,115,648 967,178 $15,457,611 $14,321,080 $13,161,825 $20,368,562 $18,909,588 $17,504,167 73 6,779 $2,9628,5335,206 $13,772 $5,461 $3,332 $7,634 $15,968 —4,649 $ 9,742 $3,448 $23,513 $7,376 $2,100 $37,338 $4,500 $ 9,879 $22,780 $ 6,016 $ $ — — $20,961 $12,765 Stock Performance Restricted Restricted Options Share Units Stock Units Stock Total $11,113 $4,856 $22,578 $ — $38,547 ...... $ ...... $ ...... $ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR ...... $ ...... $ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO Net sales Consumables Seasonal Home products Apparel Pre-tax Net of tax Pre-tax Net of tax Pre-tax Net of tax (In thousands) (In thousands) Classes of similar products: Year ended January 29, 2016 Year ended January 30, 2015 Year ended January 31, 2014 Year On August 29, 2012, the Company’s Board of Directors authorized a common stock repurchase 29, 2012, the Company’s Board On August The Company manages its business on the basis of one reportable operating segment. See Note 1 The Company manages its business The fair value method of accounting for share-based awards resulted in share-based compensation of accounting for share-based The fair value method 12. Common stock transactions on December 2, 2015, the program, which the Board has increased on several occasions. Most recently, existing common stock Company’s Board of Directors authorized a $1.0 billion increase to the billion had been authorized repurchase program. As of January 29, 2016, a cumulative total of $4.0 for repurchase. The under the program since its inception and $923.8 million remained available from time to time in the open repurchase authorization has no expiration date and allows repurchases of shares purchased depends on market or in privately negotiated transactions. The timing and number covenants and restrictions a variety of factors, such as price, market conditions, compliance with the 11. Segment reporting business. As of January 29, 2016, all of the Company’s for a brief description of the Company’s States with the exception of certain subsidiaries in Hong operations were located within the United in India, which collectively are not material with regard to assets, Kong and China and a liaison office the consolidated financial statements. The following net sales data results of operations or otherwise, to standards related to disclosures about segments of an is presented in accordance with accounting enterprise. 10. Share-based payments (Continued) 10. Share-based payments before income reduction in net income of SG&A expenses) and a corresponding expense (a component taxes as follows: 10-K sum ofthefourquartersforanygivenyearmaynotequalannualtotalsduetorounding. 2016 andJanuary30,2015.Eachquarterlyperiodlistedbelowwasa13-weekaccountingperiod.The 14. Quarterlyfinancialdata(unaudited) January 29,2016,theremainingliabilityrelatedtothesechargesis$3.5million. the Company’sconsolidatedstatementsofincomeforyearendedJanuary29,2016.As severance-related benefits.ThisexpenseisreflectedinSelling,general,andadministrativeexpenseson initiative aimedatimprovingefficienciesandreducingexpenses. Company’s corporateheadquartersandeffectiveimmediately.Therestructuringispartofabroader including theeliminationofapproximately255positions,substantiallyallwhichwereat 13. Corporaterestructuring relevant initssolediscretion. requirements, financialcondition,contractualrestrictionsandotherfactorsthattheBoardmaydeem Directors andwilldependupon,amongotherthings,theCompany’sresultsofoperations,cash The declarationoffuturecashdividendsissubjecttothediscretionCompany’sBoard $0.25 pershare,whichispayableonApril12,2016toshareholdersofrecordasMarch29,2016. 2015. OnMarch8,2016,theCompany’sBoardofDirectorsapprovedaquarterlycashdividend programs. its commonstockatatotalcostof$0.6billion,respectively,pursuanttorepurchase approximately 14.1millionsharesatatotalcostof$0.8billionand11.0 repurchased approximately17.6millionsharesofitscommonstockatatotalcost$1.3billion, funded fromavailablecashorborrowingsundertheFacilities discussedinfurtherdetailNote5. under theCompany’sdebtagreementsandotherfactors.Repurchases undertheprogrammaybe 12. Commonstocktransactions(Continued) The followingisselectedunauditedquarterlyfinancialdataforthefiscalyearsendedJanuary29, The Companyincurredpretaxexpenseof$6.1millionassociatedwiththisrestructuringfor On October13,2015,theCompanyimplementedarestructuringofitscorporatesupportfunctions, The Companypaidquarterlycashdividendsof$0.22pershareduringeachthefourquarters During theyearsendedJanuary29,2016,30,2015,and31,2014,Company Diluted earningspershare Basic earningspershare Net income Operating profit Gross profit Net sales 2015: (In thousands) NOTES TOCONSOLIDATED FINANCIALSTATEMENTS (Continued) ...... DOLLAR GENERAL CORPORATION ANDSUBSIDIARIES ...... 49862$,9,0 50708$5,286,938 $5,067,048 $5,095,904 $4,918,672 ,9,0 ,8,5 ,3,6 1,682,269 1,536,962 1,588,155 1,498,705 ure ure ure Quarter Quarter Quarter Quarter 5,3 8,4 5,2 376,175 612,429 253,321 423,859 282,349 475,812 253,235 428,194 is eodTidFourth Third Second First 74 .409 .61.30 1.30 0.86 0.87 0.95 0.95 0.84 0.84 10-K 0.720.72 0.83 0.83 0.78 0.78 1.17 1.17 75 First Second Third Fourth 379,708222,398 428,526 251,260 394,143 236,316 566,716 355,371 Quarter Quarter Quarter Quarter 1,357,746 1,455,574 1,423,748 1,565,439 $4,522,081 $4,724,039 $4,724,409 $4,939,059 ...... DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CORPORATION GENERAL DOLLAR ...... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) STATEMENTS FINANCIAL CONSOLIDATED NOTES TO (In thousands) 2014: Net sales Gross profit Operating profit Net income Basic earnings per share Diluted earnings per share As discussed in Note 13, in the third quarter of 2015, the Company implemented a restructuring of As discussed in Note 13, in the third 2014, the Company incurred expenses related to an attempted In the third and fourth quarters of its corporate support functions. As a result, the Company incurred expenses, primarily related to its corporate support functions. As ($3.7 million net of tax, or $0.01 per diluted share), which severance-related benefits, of $6.1 million administrative expense. was recognized as Selling, general, and net of tax, or $0.02 per diluted share) and $6.1 million acquisition of $8.2 million ($7.4 million diluted share), respectively, which were recognized as Selling, ($1.3 million net of tax, or $0.00 per general and administrative expenses. 14. Quarterly financial data (unaudited) (Continued) 14. Quarterly financial 10-K internal controloverfinancialreporting.Suchattestationreportiscontainedbelow. consolidated financialstatements,hasissuedanattestationreportonmanagement’sassessmentofour January 29,2016. management hasconcludedthatourinternalcontroloverfinancialreportingiseffectiveasof actions aretakentocorrectanydeficienciesastheyidentified.Basedonitsassessment, detect misstatements.Managementregularlymonitorsourinternalcontroloverfinancialreporting,and internal controloverfinancialreportingcanprovideonlyreasonableassuranceandmaynotpreventor Sponsoring OrganizationsoftheTreadway Commission.Becauseofitsinherentlimitations,asystem established inInternalControl—IntegratedFramework (2013Framework) issued bytheCommitteeof effectiveness ofitsinternalcontroloverfinancialreporting.Suchassessmentwasbasedoncriteria designed andimplementedastructuredcomprehensiveassessmentprocesstoevaluatethe accordance withUnitedStatesgenerallyacceptedaccountingprinciples. the reliabilityoffinancialreportingandpreparationstatementsforexternalpurposesin Act. Ourinternalcontroloverfinancialreportingisdesignedtoprovidereasonableassuranceregarding internal controloverfinancialreportingasdefinedinRule 13a-15(f)or15d-15(f)undertheExchange information containedinthisreport.Thisresponsibilityincludesestablishingandmaintainingadequate prepared andisresponsiblefortheconsolidatedfinancialstatementsallrelated report. that ourdisclosurecontrolsandprocedureswereeffectiveasoftheendperiodcoveredbythis Based onthisevaluation,ourprincipalexecutiveofficerandfinancialconcluded 15d-15(e) promulgatedundertheSecuritiesExchangeAct of1934,asamended(the‘‘ExchangeAct’’). evaluation ofourdisclosurecontrolsandprocedures,assuchtermisdefinedunderRule 13a-15(e)or management, includingourprincipalexecutiveofficerandfinancialofficer,weconductedan CONTROLSANDPROCEDURES ITEM 9A. CHANGESINANDDISAGREEMENTSWITHACCOUNTANTS ONACCOUNTINGAND ITEM 9. Ernst &Young LLP, theindependentregisteredpublicaccountingfirmthatauditedour To complywiththerequirementsofSection404Sarbanes-OxleyAct of2002,management Management’sAnnualReport onInternalControlOverFinancial Reporting. (b) DisclosureControlsandProcedures. (a) Not applicable. FINANCIAL DISCLOSURE Under thesupervisionandwithparticipationofour 76 Our management 10-K /s/ Ernst & Young LLP /s/ Ernst & Young 77 Report of Independent Registered Public Registered of Independent Accounting Firm Report We have audited Dollar General Corporation and subsidiaries’ internal control over financial Corporation and subsidiaries’ internal have audited Dollar General We of the Public Company Accounting conducted our audit in accordance with the standards We reporting is a process designed to provide reasonable A company’s internal control over financial may not prevent or Because of its inherent limitations, internal control over financial reporting in all material respects, In our opinion, Dollar General Corporation and subsidiaries maintained, audited, in accordance with the standards of the Public Company Accounting also have We (c) Public Accounting Firm. Registered of Independent Report Attestation The Board of Directors and Shareholders of The Board of Directors Dollar General Corporation in Internal Control—Integrated 29, 2016, based on criteria established reporting as of January Commission (2013 of the Treadway Committee of Sponsoring Organizations issued by the Framework is and subsidiaries’ management criteria). Dollar General Corporation framework) (the COSO assessment of over financial reporting, and for its effective internal control responsible for maintaining included in the accompanying internal control over financial reporting the effectiveness of Our responsibility is to Reporting. on Internal Control Over Financial Report Management’s Annual audit. over financial reporting based on our on the company’s internal control express an opinion standards require that we plan and perform the audit to obtain Oversight Board (United States). Those effective internal control over financial reporting was maintained reasonable assurance about whether obtaining an understanding of internal control over in all material respects. Our audit included that a material weakness exists, testing and evaluating the design financial reporting, assessing the risk control based on the assessed risk, and performing such other and operating effectiveness of internal believe that our audit provides a in the circumstances. We procedures as we considered necessary reasonable basis for our opinion. financial reporting and the preparation of financial statements for assurance regarding the reliability of generally accepted accounting principles. A company’s internal external purposes in accordance with those policies and procedures that (1) pertain to the control over financial reporting includes detail, accurately and fairly reflect the transactions and maintenance of records that, in reasonable (2) provide reasonable assurance that transactions are dispositions of the assets of the company; of financial statements in accordance with generally recorded as necessary to permit preparation that receipts and expenditures of the company are being made only accepted accounting principles, and management and directors of the company; and (3) provide in accordance with authorizations of or timely detection of unauthorized acquisition, use, or reasonable assurance regarding prevention that could have a material effect on the financial statements. disposition of the company’s assets to future periods are subject detect misstatements. Also, projections of any evaluation of effectiveness conditions, or that the degree to the risk that controls may become inadequate because of changes in of compliance with the policies or procedures may deteriorate. based on the COSO criteria. effective internal control over financial reporting as of January 29, 2016, General Corporation and Oversight Board (United States), the consolidated balance sheets of Dollar consolidated statements of subsidiaries as of January 29, 2016 and January 30, 2015, and the related each of the three years in the income, comprehensive income, shareholders’ equity, and cash flows for and our report dated period ended January 29, 2016 of Dollar General Corporation and subsidiaries March 22, 2016 expressed an unqualified opinion thereon. Nashville, Tennessee March 22, 2016 10-K ie om faadareetatce eeoa xiis10.5,10.10and10.38. filed formsofawardagreementattachedheretoasExhibits summaries only,donotpurporttobecomplete,and are qualifiedintheirentiretybyreferencetothe from thegrantdate. requirements throughthefifthanniversaryofgrant date,andwillterminatenolaterthantenyears of 331/3%oneachthethird,fourthandfifthanniversaries ofthegrantdate,subjecttoholding Control provisionsasdescribedabove),suchOptionaward isscheduledtovestratablyininstallments Subject tocertainforfeitureandlimitedvestingacceleration events(includingthesameChangein 10.38andsubject tothetermsandconditionsofPlan. agreement attachedheretoasExhibit Vasos 85,759OptionsaccordingtothetermsofformOptionaward Committee awardedMr. within twoyearsfollowingtheChangeinControl. or herequityawardifaQualifyingTermination (asdefinedintheForm Award Agreements)occurs the Form Award Agreements)oftheCompany,agranteewillonlyreceiveanacceleratedpayouthis certain acceleratedvestingprovisionsdescribedintheformofPSUawardagreement. 1,2019,ineachcasesubjecttothegrantee’scontinuedemploymentwithCompanyand April 1,2018and two-thirds ofthePSUsearnedbyeachgranteewillvestinequalinstallmentsonApril 1,2017.Theremaining will vestonthelastdayofPerformance Period andbepaidonApril grantee. Subjecttocertainpro-ratavestingconditions,one-thirdofthePSUsearnedbyeachgrantee achievement ofeachperformancegoalmeasureandthecorrespondingnumberPSUsearnedby being earned.At theconclusionofPerformance Period, theCommitteewilldeterminelevelof graduated scale,withperformanceatthetargetlevelresultingin100%ofnumberPSUs and 300%ofthetargetamountbasedonactualperformancecomparedtoa established bytheCommitteeongrantdate.ThenumberofPSUsearnedwillvarybetween0% measures aregoalsrelatedtoadjustedEBITDA (weighted50%)andROICas ‘‘Performance Period’’) andifcertainadditionalvestingrequirementsaremet.Theperformance are achievedduringtheperformanceperiod(whichisCompany’sfiscalyear2016)(the 1,2017. equal annualinstallmentsbeginningonApril certain circumstancesdescribedintheformofOptionawardagreement,generallywillvestfour (the ‘‘Plan’’). Amended andRestated 2007StockIncentivePlanforKeyEmployeesofDollarGeneralCorporation the ‘‘Form Award Agreements’’),andsubjecttothetermsconditionsofpreviouslyfiled 10.10,respectively(collectively, 10.5andExhibit of PSUawardagreementattachedheretoasExhibit on thetermsandsubjecttoconditionssetforthinformofOptionawardagreement Taylor Garratt,FlaniganandRavener andMs. and 32,890Options7,526PSUstoeachofMessrs. Vasos non-qualified stockoptions(‘‘Options’’)and27,367performanceshareunits(‘‘PSUs’’)toMr. 29,2016. the CompanyofhisintenttoretireeffectiveApril OTHERINFORMATION ITEM 9B. internal controloverfinancialreporting. Act Rule 13a-15(f))thathavemateriallyaffected,orarereasonablylikelytoaffect,our quarter endedJanuary29,2016inourinternalcontroloverfinancialreporting(asdefinedExchange The foregoingdescriptionsofallOptionsandPSUawards andtheformsofawardagreementsare 16,2016,inadditiontotheawardofOptionsandPSUsasoutlinedabove, Also, onMarch The Form Award AgreementsalsoprovidethatintheeventofaChangeControl(asdefined The PSUsrepresentatargetnumberofunitsthatcanbeearnedifcertainperformancemeasures The Optionshaveatermoftenyearsand,subjecttoearlierforfeitureoracceleratedvestingunder 16,2016,theCompany’sCompensationCommittee(the‘‘Committee’’)awarded119,599 On March 7,2016,Mr.JohnW. Flanigan,ExecutiveVice President, GlobalSupplyChain,advised On March ChangesinInternalControlOverFinancial Reporting. (d) 78 There havebeennochangesduringthe 10-K The information required by this The information required There have been no material changes to There have been no material changes 79 We have adopted a Code of Business Conduct and We PART III PART Information required by this Item 10 regarding our audit (d) Directors. Procedures for Shareholders to Nominate (a) Officers. Directors and Executive Information Regarding (b) Exchange Act. Compliance with Section 16(a) of the by this Item 10 Information required (c) Code of Business Conduct and Ethics. (e) Committee Information. Audit The information required by this Item 11 regarding director and executive officer compensation, The information required by this Item 11 regarding director and executive Ethics that applies to all of our employees, officers and Board members. This Code is posted on the Ethics that applies to all of our employees, Internet website at www.dollargeneral.com. If we choose to no Investor Information section of our a free copy to any person upon written request to Dollar longer post such Code, we will provide Goodlettsville, TN 37072. Department, 100 Mission Ridge, General Corporation, c/o Investor Relations amendment to or waiver from such Code that intend to provide any required disclosure of an We principal financial officer, principal accounting officer or applies to our principal executive officer, functions, on our Internet website located at controller, or persons performing similar may elect to disclose any the amendment or waiver. We www.dollargeneral.com promptly following in addition to or in lieu 8-K filed with the SEC either on Form such amendment or waiver in a report contained on or connected to our Internet website is not of the website disclosure. The information of this or any other 10-K and should not be considered part Form incorporated by reference into this the SEC. report that we file with or furnish to ITEM 10. GOVERNANCE OFFICERS AND CORPORATE DIRECTORS, EXECUTIVE are the is contained under the captions ‘‘Who our directors and director nominees Item 10 regarding there any familial year’s nominees,’’ ‘‘Are ‘‘What are the backgrounds of this nominees this year,’’ and ‘‘What directors identified and nominated,’’ any of the nominees,’’ ‘‘How are relationships between that led the Board of Directors to conclude qualifications, attributes or skills particular experience, 1: all under the heading ‘‘Proposal serve as a director of Dollar General,’’ each nominee should Annual Meeting of Statement to be filed for our in our definitive Proxy Election of Directors’’ information under such Statement’’), which Proxy held on May 25, 2016 (the ‘‘2016 Shareholders to be our required by this Item 10 regarding herein by reference. Information captions is incorporated caption ‘‘Executive Officers of the 10-K under the I of this Form is contained in Part executive officers which information under such caption is incorporated herein by reference. Registrant,’’ is contained under the caption of the Exchange Act regarding compliance with Section 16(a) Statement, which Compliance’’ in the 2016 Proxy Reporting ‘‘Section 16(a) Beneficial Ownership herein by reference. information under such caption is incorporated may recommend nominees to the registrant’s Board of the procedures by which security holders Directors. committee and our audit committee financial experts is contained under the captions ‘‘Corporate committee and our audit committee financial experts is contained under Compensation and Nominating Governance—Does the Board of Directors have standing Audit, expert serving on its Committees’’ and ‘‘—Does Dollar General have an audit committee financial Statement, which information under such captions is incorporated Committee’’ in the 2016 Proxy Audit herein by reference. ITEM 11. EXECUTIVE COMPENSATION risks arising from our compensation policies and practices the the Compensation Committee Report, is contained under the for employees, and compensation committee interlocks and insider participation Statement, which 2016 Proxy captions ‘‘Director Compensation’’ and ‘‘Executive Compensation’’ in the information under such captions is incorporated herein by reference. 10-K under suchcaptionisincorporatedhereinbyreference. is containedunderthecaption‘‘Fees Paid toAuditors’’ inthe2016Proxy Statement, whichinformation the pre-approvalpoliciesandproceduresestablished by theAudit Committee ofourBoardDirectors PRINCIPAL ACCOUNTING FEESANDSERVICES ITEM 14. incorporated hereinbyreference. caption ‘‘DirectorIndependence’’inthe2016Proxy Statement, which informationundersuchcaptionis which informationundersuchcaptionisincorporatedhereinbyreference. contained underthecaption‘‘Transactions withManagementandOthers’’inthe2016Proxy Statement, CERTAIN RELATIONSHIPS ANDRELATED TRANSACTIONS, ANDDIRECTOR ITEM 13. the 2016Proxy Statement,whichinformationundersuchcaption isincorporatedhereinbyreference. certain beneficialownersandourmanagementiscontainedunderthecaption‘‘SecurityOwnership’’in Column(a)consistsofsharescommonstockissuableuponexerciseoutstandingoptionsand (1) Equity compensationplansnotapprovedby Equity compensationplansapprovedby arrangements) asofJanuary29,2016: securities authorizedforissuanceunderourcompensationplans(includingindividual SECURITYOWNERSHIPOFCERTAIN BENEFICIALOWNERSANDMANAGEMENT ITEM 12. Plan category Total(1) security holders security holders(1) The informationrequiredbythisItem14regardingfees wepaidtoourprincipalaccountantand The informationrequiredbythisItem13regardingdirectorindependenceiscontainedunderthe The informationrequiredbythisItem13regardingcertainrelationshipsandrelatedtransactionsis OtherInformation. (b) or right. stock, restrictedshareunits,orothershare-basedawardsupontheexerciseofanoption issuance pursuanttotheAmendedandRestated 2007StockIncentivePlan,whetherintheformof the weighted-averageexercisepriceincolumn(b).Column(c)consistsofsharesreservedfor basis andhavenoexerciseprice.Accordingly, theyhavebeenexcluded forpurposesofcomputing deferred sharesanddividendequivalentsaresettledforofcommonstockonaone-for-one accrued thereon,undertheAmendedandRestated 2007StockIncentivePlan.Shareunits, upon vestingandpaymentofshareunitsdeferredshares,includingdividendequivalents EquityCompensationPlanInformation. (a) ...... INDEPENDENCE AND RELATED STOCKHOLDERMATTERS ...... The informationrequiredbythisItem12regardingsecurityownershipof Number ofsecurities usadn pin,ottnigotos securitiesreflected outstandingoptions, outstanding options, arnsadrgt arnsadrgt incolumn(a)) warrantsandrights warrants andrights ob suduo egtdaeaeequitycompensation Weighted-average to beissuedupon The followingtablesetsforthinformationabout 80 3,539,160 3,539,160 xrieo xriepieo plans(excluding exercisepriceof exercise of (a) — 5.318,556,241 $56.43 5.318,556,241 $56.43 (b) — securities remaining available forfuture issuance under Number of (c) — 10-K 81 PART IV Consolidated Balance Sheets Consolidated Balance of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Shareholders’ Equity Consolidated Statements of Cash Flows Consolidated Statements Financial Statements Notes to Consolidated in the or the information is included the related instructions, are inapplicable not required under therefore, have been omitted. Consolidated Financial Statements and, if fully set forth herein. Index is incorporated by reference as (b) of the SEC are in the applicable accounting regulations for which provision is made All schedules (c) Exhibits: which Exhibit See Exhibit Index immediately following the signature pages hereto, ITEM 15. SCHEDULES STATEMENT EXHIBITS AND FINANCIAL (a) Firm Public Accounting Registered of Independent Report 10-K Date: March22,2016 authorized. registrant hasdulycausedthisreporttobesignedonitsbehalfbytheundersigned,thereunto indicated. below bythefollowingpersonsonbehalfofregistrantandincapacitiesdates Exchange Commission. below, anyandallamendmentstothisAnnualReport onForm 10-KfiledwiththeSecuritiesand with fullpowertothemandeachofsignforus,inournamesthecapacitiesindicated Vasos, JohnW. GarrattIIandAnitaC.Elliott, andeachofthemsingly,ourtruelawfulattorneys Pursuant totherequirementsofSection13or15(d)SecuritiesExchangeAct of1934,the Pursuant totherequirementsofSecuritiesExchangeAct of1934,thisreporthasbeensigned We, theundersigneddirectorsandofficers oftheregistrant,herebyseverallyconstituteTodd J. s M /s/ s S /s/ s W /s/ MICHAEL M.CALBERT s J /s/ SANDRA B. COCHRAN s A /s/ WARREN F. BRYANT JOHN W. GARRATT s T /s/ ANITA C.ELLIOTT ANDRA ICHAEL TODD J.VASOS OHN ARREN NITA ODD W.G C.E B.C Name M.C J.V F.B ARRATT LLIOTT OCHRAN ASOS RYANT ALBERT Officer) Executive Vice President &Chief (Principal ExecutiveOfficer) Director Director Director March22,2016 Accounting Officer(Principal Accounting March22,2016 Financial Officer(Principal Financial Chief ExecutiveOfficer&Director Senior Vice President &Chief Officer) SIGNATURES 82 By: DOLLAR GENERAL CORPORATION Title Chief ExecutiveOfficer s T /s/ Todd J.Vasos, ODD J.V ASOS March 22,2016 March 22,2016 March 22,2016 March 22,2016 Date 10-K Date March 22, 2016 March 22, 2016 March 22, 2016 March 22, 2016 Title 83 Director Director Director Director , III RUSHEL RICE -K ICKARD HODES ILI A. P Name B. R C. R D. F AULA AVID PAULA A. PRICE PAULA ILLIAM DAVID B. RICKARD DAVID /s/ P ATRICIA /s/ D WILLIAM C. RHODES, III /s/ W PATRICIA D. FILI-KRUSHEL PATRICIA /s/ P 10-K .1AmendedandRestated CreditAgreement,datedasofOctober20, 2015, amongDollar 4.11 FifthSupplementalIndenture,datedasofOctober20,2015,betweenDollarGeneral 4.10 . Fourth Supplemental Indenture,datedasofApril11,2013,betweenDollarGeneral 4.9 ThirdSupplementalIndenture,datedasofApril11,2013,betweenDollarGeneral 4.8 FirstSupplementalIndenture,datedasofJuly12,2012,amongDollarGeneral 4.7 Indenture,datedasofJuly12,2012,betweenDollarGeneralCorporation,issuer,and 4.6 Form of4.150%SeniorNotesdue2025(includedinExhibit4.10) 4.5 Form of3.250%SeniorNotesdue2023(includedinExhibit4.9) 4.4 Form of1.875%SeniorNotesdue2018(includedinExhibit4.8) 4.3 Form of4.125%SeniorNotesdue2017(includedinExhibit4.7) 4.2 Form ofStockCertificateforCommon(incorporatedbyreferencetoExhibit4.1 4.1 AmendedandRestated BylawsofDollarGeneralCorporation(incorporatedbyreference 3.2 AmendedandRestated CharterofDollarGeneralCorporation(completecopyasamended 3.1 the SEConOctober20,2015(fileno.001-11421)) General Corporation’sCurrentReport onForm 8-KdatedOctober15,2015andfiledwith credit partiesandlenderspartythereto(incorporated byreferencetoExhibit4.3Dollar General Corporation,asborrower,Citibank,N.A., administrativeagent,andtheother dated October15,2015,filedwiththeSECon 20,2015(fileno.001-11421)) reference toExhibit4.1DollarGeneralCorporation’sCurrentReport onForm 8-K Corporation, asissuer,andU.S.BankNationalAssociation,trustee(incorporatedby dated April8,2013andfiledwiththeSECon11,(fileno.001-11421)) reference toExhibit4.2DollarGeneralCorporation’sCurrentReport onForm 8-K Corporation, asissuer,andU.S.BankNationalAssociation,trustee(incorporatedby dated April8,2013andfiledwiththeSECon11,(fileno.001-11421)) reference toExhibit4.1DollarGeneralCorporation’sCurrentReport onForm 8-K Corporation, asissuer,andU.S.BankNationalAssociation,trustee(incorporatedby July 17,2012(fileno.001-11421)) Corporation’s CurrentReport onForm 8-KdatedJuly12,2012,filedwiththeSECon Association, astrustee(incorporatedbyreferencetoExhibit4.2DollarGeneral Corporation, asissuer,thesubsidiaryguarantorsnamedtherein,andU.S.BankNational the SEConJuly17,2012(fileno.001-11421)) Dollar GeneralCorporation’sCurrentReport onForm 8-KdatedJuly12,2012,filedwith U.S. BankNationalAssociation,astrustee(incorporatedbyreferencetoExhibit4.1 Dollar GeneralCorporation’sRegistration StatementonForm S-1(fileno.333-161464)) November 18,2009,filedwiththeSECon2009(fileno.001-11421)) to Exhibit3.2DollarGeneralCorporation’sCurrentReport onForm 8-Kdated with theSEConJune4,2013(fileno.001-11421)) Corporation’s QuarterlyReport onForm 10-Q forthequarterendedMay3,2013,filed for SECfilingpurposesonly)(incorporatedbyreferencetoExhibit3.1DollarGeneral EXHIBIT INDEX 84 10-K 85 Corporation and its Affiliates (effective June 1, 2012) (incorporated by reference to by reference 1, 2012) (incorporated (effective June and its Affiliates Corporation with the SEC Statement filed Proxy General Corporation’s Definitive Appendix A to Dollar no. 001-11421))* on April 5, 2012 (file employees of Dollar General to certain newly hired and promoted to December 2014 Incentive Plan 2007 Stock to the Amended and Restated Corporation pursuant Corporation’s Quarterly to Exhibit 10.2 to Dollar General (incorporated by reference filed with the SEC on quarter ended April 29, 2011, 10-Q for the fiscal on Form Report no. 001-11421))* June 1, 2011 (file certain employees of Dollar General 2012 and prior to March 2015 to beginning March 20, 2007 Stock Incentive Plan and Restated Corporation pursuant to the Amended 10.1 to Dollar General Corporation’s Current Report (incorporated by reference to Exhibit 8-K dated March 20, 2012, filed with the SEC on March 26, 2012 (file on Form no. 001-11421))* March 2016 to certain employees of Dollar General beginning March 2015 and prior to 2007 Stock Incentive Plan and Restated Corporation pursuant to the Amended 10.2 to Dollar General Corporation’s Quarterly (incorporated by reference to Exhibit October 31, 2014, filed with the SEC on 10-Q for the fiscal quarter ended on Form Report December 4, 2014 (file no. 001-11421))* Dollar General Corporation pursuant to the Amended March 2016 to certain employees of 2007 Stock Incentive Plan* and Restated to certain newly hired and promoted employees of December 2014 and prior to May 2016 Incentive 2007 Stock to the Amended and Restated Dollar General Corporation pursuant Exhibit 10.3 to Dollar General Corporation’s Quarterly Plan (incorporated by reference to October 31, 2014, filed with the SEC on 10-Q for the fiscal quarter ended on Form Report December 4, 2014 (file no. 001-11421))* pursuant awards prior to March 2014 to certain employees of Dollar General Corporation Incentive Plan (incorporated by reference to 2007 Stock to the Amended and Restated 8-K dated March 20, on Form Exhibit 10.2 to Dollar General Corporation’s Current Report 2012, filed with the SEC on March 26, 2012 (file no. 001-11421))* of Dollar awards beginning March 2014 and prior to March 2015 to certain employees 2007 Stock Incentive Plan General Corporation pursuant to the Amended and Restated Quarterly (incorporated by reference to Exhibit 10.3 to Dollar General Corporation’s 10-Q for the fiscal quarter ended May 2, 2014, filed with the SEC on on Form Report June 3, 2014 (file no. 001-11421))* 10.2 prior May 24, 2011) for awards made Agreement (approved Award of Stock Option Form 10.3 awards March 20, 2012) for annual Agreement (approved Award of Stock Option Form 10.4 26, 2014) for annual awards Agreement (approved August of Stock Option Award Form 10.5 2016) for awards beginning Agreement (approved March 16, of Stock Option Award Form 10.6 26, 2014) for awards beginning Agreement (approved August of Stock Option Award Form 10.7 20, 2012) for annual Agreement (approved March Share Unit Award of Performance Form 10.8 18, 2014) for annual Agreement (approved March Share Unit Award of Performance Form 10.1 of Dollar General for Key Employees Stock Incentive Plan 2007 and Restated Amended 10-K 01 Form ofRestricted StockUnitAward Agreement(approved May28,2014)forawards 10.18 Form ofRestricted StockUnitAward Agreement(approvedMay24,2011)forawardsprior 10.17 Form ofRestricted StockUnitAward AgreementforawardspriortoMay24,2011 10.16 Waiver ofTransfer Restrictions datedFebruary 1,2013 (incorporatedbyreferenceto 10.15 Waiver ofCertainLimitationsSetForth inOptionAgreementsPertaining toOptions 10.14 Form ofRestricted StockUnitAward Agreement(approvedMarch16,2016)forawards 10.13 Form ofRestricted StockUnitAward Agreement(approvedMarch17,2015)forawards 10.12 Form ofRestricted StockUnitAward Agreement(approvedMarch20,2012)forannual 10.11 Form ofPerformance ShareUnit Award Agreement(approvedMarch16,2016)forawards 10.10 09Form ofPerformance ShareUnit Award Agreement(approvedAugust 26,2014)forannual 10.9 June 3,2014(fileno.001-11421)) Report onForm 10-QforthefiscalquarterendedMay2,2014,filedwithSECon (incorporated byreferencetoExhibit10.4DollarGeneral Corporation’sQuarterly General CorporationpursuanttotheAmendedandRestated 2007StockIncentive Plan beginning May29,2014andpriortoFebruary 2015tonon-employeedirectors ofDollar quarter endedApril29,2011,filedwiththeSEConJune 1,2011(fileno.001-11421)) Exhibit 10.3toDollarGeneralCorporation’sQuarterly Report onForm 10-Qforthefiscal Amended andRestated 2007StockIncentivePlan(incorporatedbyreference to to May29,2014non-employeedirectorsofDollarGeneralCorporationpursuantthe General Corporation’sRegistration StatementonForm S-1(fileno.333-161464)) Restated 2007StockIncentive Plan(incorporatedbyreferencetoExhibit10.15Dollar non-employee directorsofDollarGeneralCorporationpursuanttotheAmendedand 2013, filedwiththeSEConFebruary 5,2013(fileno.001-11421))* Exhibit 99toDollarGeneralCorporation’sCurrentReport onForm 8-KdatedFebruary 1, SEC onAugust 31,2010 (fileno.001-11421))* Quarterly Report on Form 10-QforthefiscalquarterendedJuly30,2010,filedwith August 26,2010(incorporated byreferencetoExhibit10.3DollarGeneralCorporation’s Previously GrantedundertheAmendedandRestated 2007StockIncentivePlan,effective Amended andRestated 2007StockIncentivePlan* beginning March2016tocertainemployeesofDollarGeneralCorporationpursuantthe June 2,2015(fileno.001-11421))* Report onForm 10-QforthefiscalquarterendedMay1,2015,filedwithSECon (incorporated byreferencetoExhibit10.2DollarGeneralCorporation’sQuarterly Corporation pursuanttotheAmendedandRestated 2007StockIncentivePlan beginning March2015andpriorto2016certainemployeesofDollarGeneral dated March20,2012,filedwiththeSECon26,2012(fileno.001-11421))* reference toExhibit10.3DollarGeneralCorporation’sCurrentReport onForm 8-K pursuant totheAmendedandRestated 2007StockIncentivePlan(incorporatedby awards madepriortoMarch2015certainemployeesofDollarGeneralCorporation Amended andRestated 2007StockIncentivePlan* beginning March2016tocertainemployeesofDollarGeneralCorporationpursuantthe December 4,2014(fileno.001-11421))* Report onForm 10-Qforthefiscalquarter endedOctober31,2014,filedwiththeSECon (incorporated byreferencetoExhibit10.4DollarGeneralCorporation’sQuarterly General CorporationpursuanttotheAmendedandRestated 2007StockIncentivePlan awards beginningMarch2015andpriorto2016certainemployeesofDollar 86 10-K 87 beginning February 2015 to non-employee directors of Dollar General Corporation pursuant of Dollar General directors 2015 to non-employee February beginning by reference to 2007 Stock Incentive Plan (incorporated Restated to the Amended and 10-Q for the fiscal on Form Report General Corporation’s Quarterly Exhibit 10.7 to Dollar December 4, 2014 (file 31, 2014, filed with the SEC on quarter ended October no. 001-11421)) Board of Directors of Dollar to non-executive Chairmen of the 1, 2016 beginning February 2007 Stock Incentive Plan pursuant to the Amended and Restated General Corporation 2007 Stock Incentive Plan pursuant to the Amended and Restated General Corporation General Corporation’s Registration to Exhibit 10.16 to Dollar (incorporated by reference S-1 (file no. 333-161464)) Statement on Form reference to Exhibit 10.10 to Dollar General December 31, 2007) (incorporated by (file no. 333-148320))* S-4 Statement on Form Corporation’s Registration (incorporated by reference to Exhibit 10.11 to Dollar restated effective December 31, 2007) S-4 (file no. 333-148320))* Statement on Form General Corporation’s Registration dated as of June 3, 2008 (incorporated by reference restated effective December 31, 2007), 10-Q for the on Form Quarterly Report to Exhibit 10.6 to Dollar General Corporation’s 1, 2008, filed with the SEC on September 3, 2008 (file quarter ended August no. 001-11421))* by reference to Exhibit 10.6 to Dollar General (approved December 3, 2014) (incorporated the fiscal quarter ended October 31, 10-Q for on Form Corporation’s Quarterly Report 4, 2014 (file no. 001-11421)) 2014, filed with the SEC on December to Appendix B to the Dollar General June 1, 2012) (incorporated by reference Statement filed with the SEC on April 5, 2012 (file Corporation’s Definitive Proxy no. 001-11421))* Quarterly (incorporated by reference to Exhibit 10.1 to Dollar General Corporation’s 10-Q for the fiscal quarter ended May 1, 2015, filed with the SEC on on Form Report June 2, 2015 (file no. 001-11421))* General Executive Officers (incorporated by reference to Exhibit 10.19 to Dollar 2, 2007, 10-K for the fiscal year ended February on Form Corporation’s Annual Report filed with the SEC on March 29, 2007) (file no. 001-11421))* Quarterly 2014) (incorporated by reference to Exhibit 10.1 to Dollar General Corporation’s 1, 2014, filed with the SEC on 10-Q for the fiscal quarter ended August on Form Report 28, 2014 (file no. 001-11421))* August 10.19 for awards December 3, 2014) (approved Agreement Stock Unit Award of Restricted Form 10.20 (approved January 26, 2016) for awards Agreement Award Stock Unit of Restricted Form 10.21 of Dollar awards to non-employee directors Agreement for Award of Stock Option Form 10.22 Plan (as amended and restated effective Dollar General Corporation CDP/SERP 10.23 Corporation CDP/SERP Plan (as amended and First Amendment to the Dollar General 10.24 General Corporation CDP/SERP Plan (as amended and Second Amendment to the Dollar 10.25 Director Deferred Compensation Plan Dollar General Corporation Non-Employee 10.26 (effective Dollar General Corporation Annual Incentive Plan Amended and Restated 10.27 for Named Executive Officers Bonus Program Dollar General Corporation 2015 Teamshare 10.28 as Applicable to Summary of Dollar General Corporation Life Insurance Program 10.29 as amended (effective July 16, Policy, Dollar General Corporation Executive Relocation 10-K 04 EmploymentAgreement,effectiveNovember1,2013, betweenDollarGeneralCorporation 10.41 EmploymentAgreement,effectiveDecember2,2015, betweenDollarGeneralCorporation 10.40 EmploymentAgreement,effectiveApril1,2015,betweenDollarGeneralCorporationand 10.39 Form ofStockOption Award AgreementbetweenDollarGeneralCorporationandTodd J. 10.38 Form ofStockOption Award AgreementbetweenDollarGeneralCorporationandTodd J. 10.37 EmploymentAgreement,effectiveJune3,2015,betweenDollarGeneralCorporationand 10.36 AmendmenttoEmploymentAgreement,effectiveMarch18,2014,betweenDollarGeneral 10.35 EmploymentAgreement,effectiveApril1,2012,betweenDollarGeneralCorporationand 10.34 Restricted StockUnitAward Agreement,datedMarch17,2015,betweenDollarGeneral 10.33 EmploymentTransition Agreement, effectiveMarch10,2015,betweenDollarGeneral 10.32 SummaryofNon-EmployeeDirectorCompensationeffectiveJanuary30,2016 10.31 DollarGeneralCorporationExecutiveRelocation Policy, asamended(effective 10.30 filed withtheSEConMarch20,2014(fileno.001-11421))* Corporation’s AnnualReport onForm 10-KforthefiscalyearendedJanuary31,2014, and DavidW. D’Arezzo(incorporatedbyreferenceto Exhibit10.37toDollarGeneral December 3,2015(fileno.001-11421))* Corporation’s CurrentReport onForm 8-KdatedDecember2,2015,filedwiththeSECon and JohnW. Garratt(incorporatedbyreferencetoExhibit 99.2toDollarGeneral SEC onJune2,2015(fileno.001-11421))* Quarterly Report on Form 10-QforthefiscalquarterendedMay1,2015,filedwith John W. Garratt(incorporatedbyreferencetoExhibit10.3DollarGeneralCorporation’s 16,2016)* Vasos (approvedMarch May 28,2015(fileno.001-11421))* Corporation’s CurrentReport onForm 8-KdatedMay27,2015,filedwiththeSECon Vasos forJune3,2015award(incorporatedbyreferencetoExhibit99.2DollarGeneral no. 001-11421))* Current Report onForm 8-KdatedMay27,2015,filedwiththeSECon28,2015(file Todd J.Vasos (incorporatedbyreferencetoExhibit99.3DollarGeneralCorporation’s 2014, filedwiththeSEConMarch20,2014(fileno.001-11421))* General Corporation’sAnnualReport onForm 10-KforthefiscalyearendedJanuary31, Corporation andDavidM.Tehle (incorporatedbyreferencetoExhibit10.32Dollar (file no.001-11421))* Current Report onForm 8-KdatedApril 16,2012,filedwiththeSEConApril19,2012 David M.Tehle (incorporatedbyreferencetoExhibit99.1DollarGeneralCorporation’s SEC onMarch19,2015(fileno.001-11421))* General Corporation’sCurrentReport onForm 8-KdatedMarch17,2015,filedwiththe Corporation andRichardW. Dreiling(incorporatedbyreferencetoExhibit99Dollar SEC onMarch13,2015(fileno.001-11421))* General Corporation’sCurrentReport onForm 8-KdatedMarch10,2015,filedwiththe Corporation andRichardW. Dreiling(incorporatedbyreferencetoExhibit99Dollar 2015, filedwiththeSEConDecember3,2015(fileno.001-11421))* Corporation’s QuarterlyReport onForm 10-Q forthefiscalquarterendedOctober30, September 22,2015)(incorporatedbyreferencetoExhibit10.2DollarGeneral 88 10-K 89 and John W. Flanigan (incorporated by reference to Exhibit 10.6 to Dollar General to Exhibit 10.6 by reference Flanigan (incorporated W. and John ended July 31, 2015, 10-Q for the fiscal quarter on Form Report Corporation’s Quarterly 27, 2015 (file no. 001-11421))* on August filed with the SEC to Exhibit 10.5 to Dollar General (incorporated by reference D. Ravener and Robert ended July 31, 2015, 10-Q for the fiscal quarter on Form Report Corporation’s Quarterly 27, 2015 (file no. 001-11421))* on August filed with the SEC to Exhibit 10.40 to Dollar General (incorporated by reference D. Ravener and Robert January 28, 2011, 10-K for the fiscal year ended on Form Report Corporation’s Annual on March 22, 2011 (file no. 001-11421))* filed with the SEC to Exhibit 10.41 to Dollar (incorporated by reference D. Ravener Corporation and Robert for the fiscal year ended January 28, 10-K on Form General Corporation’s Annual Report 22, 2011 (file no. 001-11421))* 2011, filed with the SEC on March to Dollar General (incorporated by reference to Exhibit 10.42 D. Ravener and Robert fiscal year ended January 28, 2011, 10-K for the on Form Corporation’s Annual Report (file no. 001-11421))* filed with the SEC on March 22, 2011 by reference to Exhibit 10.4 to Dollar General (incorporated and Rhonda M. Taylor the fiscal quarter ended July 31, 2015, 10-Q for on Form Corporation’s Quarterly Report 27, 2015 (file no. 001-11421))* filed with the SEC on August Rhonda M. Taylor* to Exhibit 10.7 to Dollar General Corporation’s Jeffery C. Owen (incorporated by reference ended October 30, 2015, filed with 10-Q for the fiscal quarter on Form Quarterly Report no. 001-11421))* the SEC on December 3, 2015 (file General Thorpe (incorporated by reference to Exhibit 10.6 to Dollar James W. 10-Q for the fiscal quarter ended October 30, on Form Corporation’s Quarterly Report 2015, filed with the SEC on December 3, 2015 (file no. 001-11421))* General and Anita C. Elliott (incorporated by reference to Exhibit 99.3 to Dollar 8-K dated December 2, 2015, filed with the SEC on on Form Corporation’s Current Report December 3, 2015 (file no. 001-11421))* Agreement with certain employees of Dollar General and Employment Transition Corporation, effective January 28, 2016* General and Gregory A. Sparks (incorporated by reference to Exhibit 10.4 to Dollar 10-Q for the fiscal quarter ended May 4, 2012, on Form Corporation’s Quarterly Report filed with the SEC on June 4, 2012 (file no. 001-11421))* 10.42 General Corporation between Dollar 10, 2015, effective August Agreement, Employment 10.43 Dollar General Corporation 10, 2015, between effective August Employment Agreement, 10.44 Dollar General Corporation 28, 2008, between dated as of August Stock Option Agreement, 10.45as of December 19, 2008, between Dollar General Stock Option Agreement, dated 10.46as of March 24, 2010, between Dollar General Corporation Stock Option Agreement, dated 10.47 Corporation 10, 2015, between Dollar General August Employment Agreement, effective 10.48March 24, 2010, between Dollar General Corporation and Stock Option Agreement, dated 10.49 June 15, 2015, between Dollar General Corporation and Employment Agreement, effective 10.50 7, 2015, between Dollar General Corporation and Employment Agreement, effective August 10.51 General Corporation Employment Agreement, effective December 2, 2015, between Dollar 10.52 by Dollar General Corporation to the Employment Agreement Omnibus Limited Waiver 10.53 General Corporation Employment Agreement, effective March 19, 2012, between Dollar 12 Calculation of Fixed Charge Ratio 21 List of Subsidiaries of Dollar General Corporation 23 Consent of Independent Registered Public Accounting Firm 24 Powers of Attorney (included as part of the signature pages hereto) 31 Certifications of CEO and CFO under Exchange Act Rule 13a-14(a) 32 Certifications of CEO and CFO under 18 U.S.C. 1350 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB XBRL Taxonomy Extension Labels Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

10-K 101.DEF XBRL Taxonomy Extension Definition Linkbase Document

* Management Contract or Compensatory Plan

90 (This page has been left blank intentionally.) DIRECTORS

Michael M. Calbert (1)† Patricia D. Fili-Krushel (3)(4)† David B. Rickard (2)*† Retired Member Former Executive Vice President Retired Executive Vice President, Kohlberg Kravis Roberts & Co. NBCUniversal Chief Financial Officer & Chief Administrative Officer Warren F. Bryant (2)(3)*† Paula A. Price (2)† CVS Health Corporation Retired Chairman, President & Senior Lecturer Chief Executive Officer Harvard Business School Todd J. Vasos† Longs Drug Stores Corporation Chief Executive Officer William C. Rhodes, III (3)(4)*† Dollar General Corporation Sandra B. Cochran (2)(4)† Chairman, President & President & Chief Executive Officer Chief Executive Officer Cracker Barrel Old Country Store, Inc. AutoZone, Inc.

(1) Chairman of the Board (2) Audit Committee (3) Compensation Committee (4) Nominating & Governance Committee (*) Committee Chairman OFFICERS Todd J. Vasos† Chief Executive Officer

Executive Vice Presidents

John W. Flanigan† Jeffery C. Owen† Rhonda M. Taylor† Global Supply Chain Store Operations General Counsel

John W. Garratt† Robert D. Ravener† James W. Thorpe† Chief Financial Officer Chief People Officer Chief Merchandising Officer

Senior Vice Presidents

Ryan G. Boone Stephen P. Jacobson Daniel J. Nieser Chief Information Officer Global Sourcing Operations Real Estate & Store Development

Steven R. Deckard Michael J. Kindy Steven G. Sunderland Corporate Store Operations Global Supply Chain Store Operations

Anita C. Elliott† James E. Kopp Emily C. Taylor Chief Accounting Officer Global Strategic Sourcing General Merchandise Manager Non-Consumables (Seasonal, Lawrence J. Gatta Cynthia A. Long Stationery & HBC) General Merchandise Manager General Merchandise Manager Consumables Non-Consumables (Home & Apparel)

† Indicates person subject to the provisions of Section 16 of the Securities and Exchange Act of 1934. CORPORATE INFORMATION Transfer Agent Form 10-K; SEC Certifications Wells Fargo Bank, N.A., Shareowner Services A copy of the Form 10-K filed by the Company with the Securities PO Box 64854, St. Paul, MN 55164-0854 and Exchange Commission (the “SEC”) for the fiscal year ended www.wellsfargo.com/shareownerservices January 29, 2016, which includes as exhibits the Chief Executive Officer and Chief Financial Officer Certifications required to be Inquiries regarding stock transfers, lost certificates or address filed with the SEC pursuant to Section 302 of the Sarbanes- changes should be directed to the transfer agent at the address or Oxley Act, is available on our website at www.dollargeneral.com website noted above or by calling (800) 468-9716. in the Investor Information section or on the SEC’s website.

Direct Stock Purchase Plan A printed copy of the Form 10-K, and a list of all its exhibits, Wells Fargo Shareowner Services sponsors and administers a will be supplied without charge to any shareholder upon direct purchase plan for the shares of Dollar General Corporation. written request. Exhibits to the Form 10-K are available Information on the plan, a copy of the prospectus and enrollment for a reasonable fee. For a printed copy of the Form 10-K, forms are located at www.shareowneronline.com, or you may please contact: contact our transfer agent by calling (866) 927-3314 or at our transfer agent’s mailing address above. Dollar General Corporation Investor Relations Independent Registered Public Accounting Firm 100 Mission Ridge, Goodlettsville, Tennessee 37072 Ernst & Young LLP, Nashville, Tennessee (615) 855-4000 NET SALES (IN BILLIONS) ANNUAL MEETING Dollar General Corporation’s annual meeting of share- $20.4 $18.9 holders is scheduled for 9:00 a.m. Central Time on $17.5 Wednesday May 25, 2016, at: $16.0 $14.8 Goodlettsville City Hall Auditorium 12,483 105 South Main Street, Goodlettsville, TN 37072 TOTAL STORES | TOTAL STATES: 43 Shareholders of record as of March 17, 2016 are entitled as of January 29, 2016 to vote at the meeting. 2011 2012 2013 2014 2015

NYSE: DG 16 ENDING STORE COUNT The common stock of Dollar General Corporation is 300 14 12,483 traded on the New York Stock Exchange under the trading 5 66 11,789 symbol “DG.” The number of shareholders of record as of

11,132 24 126 336 March 17, 2016 was 1,879. 22 353 10,506 3 9,937 188 555 28 STOCK PERFORMANCE GRAPH 97 24 87 The graph below shows a comparison of Dollar General’s 658 451 164 7 428 41 cumulative total shareholder return on common stock 31 198 113 334 210 436 with the cumulative total returns of the S&P 500 index 456 2011 2012 2013 2014 2015 and the S&P Retailing index. The graph tracks the per- 666 644 formance of a $100 investment in Dollar General com- 89 389 80 362 457 mon stock and in each index (with the reinvestment of SAME-STORE SALES GROWTH all dividends) from January 28, 2011 to January 29, 2016. 411 654 708 6.0% 1,296 493 4.7% COMPARISON OF

STORES 3.3% CUMULATIVE TOTAL RETURN 733 2.8% 2.8% DISTRIBUTION CENTER $300

$250 2011 2012 2013 2014 2015

$200 ABOUT DOLLAR GENERAL CUMULATIVE CASH FROM $150 OPERATIONS (IN MILLIONS) Dollar General Corporation has been delivering value to in the United States. In addition to high quality private shoppers for over 75 years. Dollar General helps shoppers brands, Dollar General sells products from America’s $6,087 $100 Save time. Save money. Every day!® by o ering products most-trusted manufacturers such as Procter & Gamble, $4,709 that are frequently used and replenished, such as food, Kimberly-Clark, Unilever, Kellogg’s, General Mills, Nabisco, 1/28/11 2/3/12 2/1/13 1/31/141/30/15 1/29/16 snacks, health and beauty aids, cleaning supplies, clothing Hanes, PepsiCo and Coca-Cola. $3,394 Dollar General Corporation S&P 500 Index S&P Retailing Index for the family, housewares and seasonal items at low $2,181 everyday prices in convenient neighborhood locations. Learn more about Dollar General $1,050 With 12,483 stores in 43 states as of January 29, 2016, and shop online at: 1/28/11 2/3/12 2/1/13 1/31/14 1/30/15 1/29/16 Dollar General $100 $147.68 $162.96 $198.31 $236.13 $266.71 Dollar General is among the largest discount retailers www.dollargeneral.com S&P 500 Index $100 $104.22 $121.71 $147.89 $168.93 $167.81 Cautionary Language Regarding Forward-Looking Statements: All forward-looking information in this report should be read with, and is 2011 2012 2013 2014 2015 qualifi ed in its entirety by, the Cautionary Disclosure Regarding Forward-Looking Statements and the Risk Factors disclosures set forth in the S&P Retailing Index $100 $115.66 $149.35 $189.57 $227.53 $266.59 Introduction and in Item 1A, respectively, of the Form 10-K included elsewhere in this report. Fiscal 2011 includes 53 weeks, while all other years The information contained on or connected to our Internet websites is not incorporated by reference into this report and should not be considered presented contain 52 weeks. Sales in the 2011 53rd The stock price performance included in this graph is not part of this or any other report that we fi le with or furnish to the SEC. week were $289 million. necessarily indicative of future stock price performance. NNUAL AND 2016 PROXY STATEMENT PROXY AND 2016 2015 A REPORT

Dollar General Corporation • 2015 Annual Report and 2016 Proxy Statement 615) 855-4000 (615) 100 Mission Ridge 100 Mission www.dollargeneral.com Goodlettsville, Tennessee 37072 Tennessee Goodlettsville,