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'2011 another exceptional year' – CEO, Dollar General
24 Mar '12
5 min read
Operating profit increased by 24 percent to $508 million, or 12.1 percent of sales, in the 2011 fourth quarter, compared to $408 million, or 11.7 percent of sales, in the 2010 fourth quarter. Excluding the acceleration of equity-based compensation and other secondary offering expenses from both periods, operating profit increased by 26 percent to $519 million, or 12.4 percent of sales, compared to $413 million, or 11.8 percent of sales in the 2010 quarter.
Interest expense was $40 million in the 2011 fourth quarter compared to $66 million in the 2010 fourth quarter. The decrease in the 2011 period from the 2010 period was due to lower outstanding borrowings, resulting from the Company's repurchases of indebtedness and lower all-in interest rates on its term loan primarily due to reduced notional amounts on interest rate swaps.
The effective income tax rate in the 2011 fourth quarter was 37.5 percent compared to 35.0 percent in the 2010 fourth quarter. Income taxes in the fourth quarter of 2010 were reduced by an adjustment to a state tax reserve in the amount of $6.8 million, or approximately $0.02 per diluted share, including related interest accruals and net of federal income tax.
Net income for the 2011 fourth quarter was $293 million, or diluted earnings per share (“EPS”) of $0.85, compared to net income of $223 million, or diluted EPS of $0.64, in the fourth quarter of fiscal 2010. Adjusted net income, as defined below, increased 33 percent to $299 million, or adjusted diluted EPS of $0.87, in the 2011 fourth quarter over adjusted net income in the 2010 fourth quarter of $226 million, or adjusted diluted EPS of $0.65.
Adjusted net income is defined as net income excluding specifically identified expenses. For the 2011 and 2010 fourth quarters, the acceleration of equity-based compensation and other expenses relating to secondary offerings of the Company's stock were excluded. For the 2011 and 2010 full years, adjustments also included the net losses on debt repurchases in each period and the expenses related to litigation settlements in 2011. The income tax effect of adjustments is also excluded from all periods presented. A reconciliation of adjusted net income to net income is presented in the accompanying schedules.
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Interest expense was $40 million in the 2011 fourth quarter compared to $66 million in the 2010 fourth quarter. The decrease in the 2011 period from the 2010 period was due to lower outstanding borrowings, resulting from the Company's repurchases of indebtedness and lower all-in interest rates on its term loan primarily due to reduced notional amounts on interest rate swaps.
The effective income tax rate in the 2011 fourth quarter was 37.5 percent compared to 35.0 percent in the 2010 fourth quarter. Income taxes in the fourth quarter of 2010 were reduced by an adjustment to a state tax reserve in the amount of $6.8 million, or approximately $0.02 per diluted share, including related interest accruals and net of federal income tax.
Net income for the 2011 fourth quarter was $293 million, or diluted earnings per share (“EPS”) of $0.85, compared to net income of $223 million, or diluted EPS of $0.64, in the fourth quarter of fiscal 2010. Adjusted net income, as defined below, increased 33 percent to $299 million, or adjusted diluted EPS of $0.87, in the 2011 fourth quarter over adjusted net income in the 2010 fourth quarter of $226 million, or adjusted diluted EPS of $0.65.
Adjusted net income is defined as net income excluding specifically identified expenses. For the 2011 and 2010 fourth quarters, the acceleration of equity-based compensation and other expenses relating to secondary offerings of the Company's stock were excluded. For the 2011 and 2010 full years, adjustments also included the net losses on debt repurchases in each period and the expenses related to litigation settlements in 2011. The income tax effect of adjustments is also excluded from all periods presented. A reconciliation of adjusted net income to net income is presented in the accompanying schedules.
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Dollar General Corporation
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