family dollar stores ar2007

1. Post Office Box 1017 / Charlotte, North Carolina 28201-1017 / www.familydollar.com
“Family Dollar is my store.”

2. 22
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68
34
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239
401
300
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343
211
258
44
282
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184
345
93
98
225
21
31
35
126
797
184
91
21
78
53
20
98
23
114
11
343
114 144
5
Maquoketa
Distribution
Center
Morehead
Distribution
Center
Rome
Distribution
Center
Odessa
Distribution
Center
Duncan
Distribution
Center
West Memphis
Distribution
Center
Marianna
Distribution
Center
Front Royal
Distribution
Center
Matthews
Corporate Offices
and Distribution
Center
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07
Number of Stores
(as of fiscal year end)
Distribution Service Areas
Stores and Distribution Centers
(as of fiscal year end)
2,767 3,017 3,324 3,689 4,141 4,616 5,027 5,466 6,173 6,430
Rome, New York
907,000 Sq. Ft. / Opened ’06
Marianna, Florida
907,000 Sq. Ft. / Opened ’05
Odessa, Texas
907,000 Sq. Ft. / Opened ’03
Maquoketa, Iowa
907,000 Sq. Ft. / Opened ’02
Morehead, Kentucky
907,000 Sq. Ft. / Opened ’00
Duncan, Oklahoma
907,000 Sq. Ft. / Opened ’99
Front Royal, Virginia
907,000 Sq. Ft. / Opened ’98
West Memphis, Arkansas
850,000 Sq. Ft. / Opened ’94
Matthews, North Carolina
890,000 Sq. Ft. / Opened ’74
Corporate Profile
Family Dollar is one of the fastest growing discount store chains in
the United States. During the last ten years, more than 4,000 new
stores have been added to the chain, of which over half were opened
in the last five years. The merchandising strategy that drives this
growth provides customers with good values on basic merchandise for
the family and home in a small neighborhood store. Our merchandise
is sold at everyday low prices in a no frills, convenient, self-service
environment. Most merchandise is priced under $10.00.
Stores are located in a contiguous 44-state area ranging northeast to
Maine, southeast to Florida, as far northwest as Idaho and southwest
to Arizona. Family Dollar stores generally range in size from 7,500
to 9,500 square feet, and most are operated in leased facilities. The
relatively small size enables us to open new stores in rural areas and
small towns, as well as in large urban neighborhoods. Within these
markets, our stores are located in shopping centers or as freestanding
buildings or in urban storefronts convenient to our value-conscious
customer base.
During the fiscal year ended September 1, 2007, we opened 300 new
stores and closed 43 stores to bring the number of stores in operation
at fiscal year-end to 6,430.
Our headquarters are located in Matthews, North Carolina, just outside
of Charlotte. We operate automated full-service distribution centers in
Matthews; West Memphis, Arkansas; Front Royal, Virginia; Duncan,
Oklahoma; Morehead, Kentucky; Maquoketa, Iowa; Odessa, Texas;
Marianna, Florida; and Rome, New York. Family Dollar has been a
publicly held corporation since 1970 and its Common Stock is listed on
the New York Stock Exchange under the ticker symbol FDO.
22
30
61
129
20
102
88
10
68
34
139
239
401
300
194
343
211
258
44
282
201
184
345
93
98
225
21
31
35
126
797
184
91
21
78
53
20
98
23
114
11
343
114 144
5
Maquoketa
Distribution
Center
Morehead
Distribution
Center
Rome
Distribution
Center
Odessa
Distribution
Center
Duncan
Distribution
Center
West Memphis
Distribution
Center
Marianna
Distribution
Center
Front Royal
Distribution
Center
Matthews
Corporate Offices
and Distribution
Center
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07
Number of Stores
(as of fiscal year end)
Distribution Service Areas
Stores and Distribution Centers
(as of fiscal year end)
2,767 3,017 3,324 3,689 4,141 4,616 5,027 5,466 6,173 6,430
Rome, New York
907,000 Sq. Ft. / Opened ’06
Marianna, Florida
907,000 Sq. Ft. / Opened ’05
Odessa, Texas
907,000 Sq. Ft. / Opened ’03
Maquoketa, Iowa
907,000 Sq. Ft. / Opened ’02
Morehead, Kentucky
907,000 Sq. Ft. / Opened ’00
Duncan, Oklahoma
907,000 Sq. Ft. / Opened ’99
Front Royal, Virginia
907,000 Sq. Ft. / Opened ’98
West Memphis, Arkansas
850,000 Sq. Ft. / Opened ’94
Matthews, North Carolina
890,000 Sq. Ft. / Opened ’74

3. In 1959, we opened our first Family Dollar store. Since then, we
have grown into a $6.8 billion company with more than 6,400
stores in 44 states. Our success is a result of our commitment
to providing our customers with a compelling place to shop, our
Associates with a compelling place to work, and our investors
with a compelling place to invest. In pursuit of this mission, we
continue to make significant changes to our business.
Our  customers  know  they  can  count  on  us  for  value  and
convenience,andweareexpandingourmerchandise
assortment to meet even more of their everyday needs. From
ready-to-eat meals, to an unexpected little treasure, we want
to provide customers with a valuable shopping experience. When Mom walks in the door of a
Family Dollar, we hope she’ll find everything she needs for her home and family.
Our Family Dollar team is our most valuable asset. As we strive to be a compelling place to
work, we are improving our Associate recruiting, training and retention programs. We have
developed a solid team of Associates by cultivating strong internal talent and complementing
their  knowledge  with  experienced  industry  leaders.  We  have  ambitious  objectives  for  our
Company, and we rely on talented, committed Associates to help us achieve our aspirations.
Despite difficult macro-economic headwinds, we are improving our business. We are expanding
our selection of food, improving the quality of our apparel and home decor, and strengthening
our assortment of seasonal items. But, even as we invest in our business to better position
Family Dollar for the future, we are committed to improving our returns to shareholders through
better inventory productivity and more profitable stores.
In today’s difficult economic environment, our customers need the value and convenience we
offer more than ever. Our management team remains focused on delivering a better shopping
experience for our customers, a more successful work experience for our Associates, and a
stronger investment for our shareholders.
Howard R. Levine
Chairman of the Board and Chief Executive Officer
NOVEMBER 2007
FamilyFamily
Dollar Dollar
FamilyFamilyFamilyFamily
“Our Store
is your Store.”
Family Dollar Mission Statement
F O R O U R C U S T O M E R S
A compelling place to shop:
by providing convenience and low prices
F O R O U R A S S O C I A T E S
A compelling place to work:
by providing exceptional opportunities
and rewards for achievement
F O R O U R I N V E S T O R S
A compelling place to invest:
by providing outstanding returns.

4. At Family Dollar, value means goodquality items ataffordable prices. Our primary
customer is a hard-workingMom who wants to take good care of her home andfamily
within limited means. For her, it’s a constant budget-balancing act between theneeds
andwants of her family. That’s why she shops at Family Dollar. Good value is being able
to afford an electronic hand-held game for her son or a rose-scented candle for herself, in
addition to Scott Towels and Hefty Garbage Bags. The exciting discovery of a small luxury
she can afford is thevalue of Family Dollar.
For years Family Dollar has been known forname brand products atlow prices in
a variety of categories including household cleaning products, paper goods and health
and beauty aides. But, we’ve improved ourhome andapparel categories, adding
items like thicker, plusher towels, petal-soft sheets and clothes that make the whole
family look great, all at a fraction of department store prices. The pleasure our shoppers
experience from being able to buy that unexpected treasure is what sets us apart from
the competition.
ValueValue
23
“Family Dollar is
my store for Value.”

5. “Kids“Kids grow grow up up so so fast. fast. Family Family Dollar Dollar sells sells great great quality quality
kidskids clothes, clothes, and and I I don’t don’t have have to to spend spend an an arm arm and and a a leg leg
forfor things things they’ll they’ll outgrow outgrow quickly.” quickly.”
“When“When I I go go to to my my
FamilyFamily Dollar, Dollar, I I
knowknow they they will will
havehave everything everything
II need need to to help help me me
getget the the kids kids ready ready
inin the the morning. morning.
AndAnd buying buying what what
II need need won’t won’t break break
mymy budget.” budget.”
2 3

6. 45
“It“It was was my my turn turn
toto buy buy the the snacks snacks
forfor my my son’s son’s team, team,
soso my my boyfriend boyfriend
andand I I went went to to my my
FamilyFamily Dollar Dollar and and
gotgot everything everything
wewe needed. needed. He He
eveneven bought bought my my
sonson a a toy.” toy.”
ConvenienceConvenienceConvenienceConvenience
We all lead busy lives and Family Dollar customers are no different. Like everyone else,
they’re in ahurry. Our stores, conveniently located inlocal neighborhoods, are a
perfect fit for families who don’t have time or money to waste.
Our small-store format, less than 10,000 square feet, allows the customer to find what
she needsquickly. Our convenient neighborhood locations make it easy for a busy
Mom on the go to run in on her way home from work. And the easy in and out access of
“Family Dollar is
my store for Convenience.”

7. 4 5
our stores makes it easier for Mom to get home to her hungry family faster.
With two-thirds of all spending occurring in the top fifty metropolitan markets, Family Dollar
is maximizing opportunities to serve families inurban markets. Many retailers avoid
these markets, but we understand that urban shoppers need the sameconvenience,
value and fun that Family Dollar offers to customers everywhere.
“On“On the the way way home home from from work, work, I’m I’m in in a a hurry. hurry. I I
cancan run run in in my my Family Family Dollar, Dollar, grab grab exactly exactly what what
II need need and and be be home home and and out out of of my my of of of of shoes shoes before before
I’dI’d even even get get to to the the checkout checkout in in a a superstore.” superstore.”

8. 67
Whether it’s a single mom picking up a last minute snack for her son’s class party or a
grandmother getting the perfect jumper for her granddaughter, value and convenience
are the cornerstones of providing our customers with a compelling place to shop. But
Family Dollar offers more than just the merchandise our customers need at prices they
can afford. We continuallysurprise our customers with small luxuries they may not
have been able to afford elsewhere. These“treasures” are the little things that help
our customer create a warm, comfortable home for her family.
Our customers want well-made fashionableapparel for their families, and we carry
thenational brands and quality apparel they are looking for. And at Family Dollar,
our customers can dress their homes fashionably too. Our merchandise teams scour the
world to find upscale home décor at a fraction of department store prices.
The  addition  of  coolers  for  perishablefood  and  our  expanded  assortment  of  non-
perishable food items fill a constant need. Mom hurries home late from work and needs
to run in to her Family Dollar for aquick dinner to feed the family. Dad forgot Mom’s
birthday…again. A last minute trip to Family Dollar right down the street, and he arrives
home armed with a lovely gift bag oftreasures to delight her.
Family Dollar is a friend and neighbor to the people we serve. Our customers can count
on us to be there for them.
FamilyFamilyFamily
“Family Dollar
is my Family’s store.”

9. 6 7
“We“We love love our our Family Family Dollar. Dollar. It’s It’s right right
downdown the the block block so so it’s it’s easy easy to to run run in in
andand get get everything everything we we need need all all in in
oneone place.” place.”
“What“What a a treat treat it it is is to to see see my my
grandsongrandson smile. smile. Family Family Dollar Dollar is is a a
greatgreat place place to to spoil spoil him, him, especially especially
duringduring the the holidays. holidays. And And with with the the
moneymoney I I have have left, left, I I can can buy buy myself myself
aa little little something something too!” too!”

10. 89
In today’s difficult economic environment, families need thevalue andconvenience
Family  Dollar  provides.  To  serve  our  customers’  needs  better,  we  are  enhancing  our
selection of food.Coolers will be installed in more stores, and we plan to expand our
space for food in 2,500 additional stores. We also continue to enhance our merchandise
selection in other categories. With the on-going development of ourTreasure Hunt
initiative, we will provide more of the special extras for thefamily and home that make
Family Dollar such afun place to shop.
We are also making significantinvestments to improve the shopping experience for
our customers. OurConcept Renewal initiative involves improving new and existing
stores with more intuitive layouts, better adjacencies and new color-coded signage. Stores
will be easier to navigate for our customers and easier to operate for our Associates. Our
Store of the Future initiative, which is planned to grow by 1,500 stores this year,
will enable Family Dollar to accept Electronic Benefit Transfer payments, including food
stamps, giving customers even moreoptions at the checkout line. Store of the Future
technology  will  also  provide  our  store  managers  with  better  analytics  and  workflow
management.  The  essentialbenefit  of  these  improvements  to  the  customer  is  that
checkout for our busy Mom will be faster and more convenient than ever.
InvestmentInvestmentInvestmentInvestmentInvestmentInvestment
“Family Dollar
moving Forward.”

11. 8 9
“I’ve made made so so many many friends friends working working at at Family Family Dollar. Dollar.
MyMy customers customers all all live live in in the the neighborhood neighborhood and and I I see see
somesome of of them them of of of of every every week. week. They They are are really really happy happy that that
theythey can can afford afford to to buy buy all all of of the the of of of of stuff stuff they they stuff stuff stuff stuff need. need. I I feel feel
goodgood about about that.” that.”

12. 1011
AssociatesAssociatesAssociatesAssociates
10
Associates
1010
At Family Dollar, we’re more than just a compelling place to shop for our customers;
we’re also a compelling place to work for ourAssociates. As a growing Fortune 500
company, we have career opportunities ranging from in-store to distribution centers to
the Corporate Office.
Recruiting and retaining Associates is critical to the success of our Company. We
take great pride in providing the people who work at Family Dollar with clearcareer
paths. In addition, we are strengthening the link between pay andperformance and
improving our Associate benefit plans.
“I“I never never thought thought a a
careercareer at at Family Family
DollarDollar could could be be
thisthis rewarding. rewarding.
II love love knowing knowing
thatthat I I am am part part of of
aa team. team. Everyone Everyone
worksworks well well
together,together, and and I I
enjoyenjoy knowing knowing
thatthat what what I I
dodo everyday everyday
reallyreally makes makes a a
difference.”difference.”
Leadership Team
Howard R. Levine
Chairman of the Board and
Chief Executive Officer
R. James Kelly
President and
Chief Operating Officer
Robert A. George
Executive Vice President –
Chief Merchandising Officer
Charles S. Gibson, Jr.
Executive Vice President –
Supply Chain
Barry W. Sullivan
Executive Vice President –
Store Operations
Bryan P. Causey
Senior Vice President –
Planning, Allocation and
Replenishment
Dorlisa K. Flur
Senior Vice President –
Strategy and Business
Development
Keith M. Gehl
Senior Vice President –
Store Construction and
Facilities Management
“Family Dollar
is my Future.”

13. 10 11
No matter where you work within the Family Dollar team, we are committed to developing
talent  and  promoting  from  within.  We  offer  hands-on  training  programs,  excellent
growth potential, merit-based promotions, competitive salaries and so much more.
There’s nothing better than feeling that you’re part of ateam. At Family Dollar, the growth
and success of the Company depends upon the individual contribution of each Associate.
Together, we are fulfilling our mission of making Family Dollar a more compelling place to
shop, work and invest.
Joshua R. Jewett
Senior Vice President –
Information Technology
and Procurement, CIO
Janet G. Kelley
Senior Vice President –
General Counsel and Secretary
Michael S. Kvitko
Senior Vice President –
Merchandising
Wook Lee
Senior Vice President –
Global Sourcing
Thomas M. Nash
Senior Vice President –
New Stores
John J. Scanlon
Senior Vice President –
Merchandising
Kenneth T. Smith
Senior Vice President –
Chief Financial Officer
C. Martin Sowers
Senior Vice President – Finance
Elizabeth M. Austin
Vice President – Information
Technology Operations and
Infrastructure
Raina Avalon
Vice President –
Transportation
Samuel J. Bernstein
Vice President –
General Merchandise Manager
Earl C. Bonnecaze
Vice President –
Store Operations
James R. Bowen
Vice President – Distribution
Timothy R. Brokaw
Vice President –
Decision Support
Mark S. Chidester
Vice President –
Human Resources,
Store Operations
Charles D. Curry
Vice President –
Store Planning and
Store Development
Allen W. Fields
Vice President –
Store Operations
Marianne Fiorucci
Vice President –
Planning and Allocations
Eric C. Gordon
Vice President –
Business Applications
Joseph A. Hayes, III
Assistant General Counsel,
Corporate and Compliance
James H. Hays
Vice President – Internal Audit
Dennis A. Heskett
Vice President –
Store Operations
Billy W. Jones, Jr.
Vice President – Distribution
Michael Laurenti
Vice President –
Information Technology
Timothy A. Matz
Vice President –
General Merchandise Manager
Colin McGinnis
Vice President –
Store Operations Support
Dennis C. Merriam
Vice President –
Human Resources, Distribution
Jacob J. Modla
Assistant General Counsel,
Litigation
Stephen F. Phillips
Vice President –
Store Operations
Kiley F. Rawlins
Vice President –
Investor Relations and
Corporate Communications
Richard P. Siliakus
Vice President –
General Merchandise Manager
Donald G. Smith
Vice President – Marketing
R. Jeffrey Thomas
Vice President –
Replenishment
Mike Vickers
Vice President –
Store Operations
Boris Zelmanovich
Vice President –
General Merchandise Manager,
Food and Merchandise
Innovation
Scott T. Zucker
Vice President –
Merchandise Operations
Michael J. Zuege
Vice President –
Loss Prevention

14. Years Ended (In thousands, except per share amounts) September 1, 2007 August 26, 2006 August 27, 2005
Net sales $6,834,305 $6,394,772 $5,824,808
Cost of sales 4,512,242 4,276,466 3,908,569
Gross margin 2,322,063 2,118,306 1,916,239
Selling, general and administrative expenses 1,933,430 1,756,001 1,577,429
Litigation charge — 45,000 —
Operating profit 388,633 317,305 338,810
Interest, net 6,737 6,161 (3,985)
Income before income taxes 381,896 311,144 342,795
Income taxes 139,042 116,033 125,286
Net income $242,854 $195,111 $217,509
Net income per common share – basic $ 1.63 $ 1.26 $ 1.30
Net income per common share – diluted $ 1.62 $ 1.26 $ 1.30
Dividends declared $ 66,361 $62,757 $61,538
Dividends declared per common share $ 0.45 $ 0.41 $ 0.37
Cash and investment securities $284,671 $216,232 $138,705
Total assets $2,624,156 $2,523,029 $2,409,501
Working capital $406,977 $432,737 $460,157
Long-term debt $250,000 $250,000 $ —
Shareholders’ equity $1,174,641 $1,208,393 $1,428,066
Comparable store sales gain 0.9% 3.7% 2.3%
Stores opened 300 350 500
Stores closed 43 75 68
Number of stores – end of year 6,430 6,173 5,898
F

F
i
n
a
n
cia
l
s
F
i
n
a
n
cia
l
s
20.0
19.6
15.7
14.8
20.4
243
258
218
195
243
’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07
4,750
5,282
5,825
6,395
6,834
Net Sales
(millions of dollars)
Net Income
(millions of dollars)
Return
on Average
Shareholders’
Equity
(percent)
3.8
1.9
2.3
3.7
0.9
Comparable Store
Sales Gains
(percent)
1.40
1.50
1.30
1.26
1.62
Net Income
Per Diluted
Common Share
12
amilyDollar financial highlights.

15. 22
30
61
129
20
102
88
10
68
34
139
239
401
300
194
343
211
258
44
282
201
184
345
93
98
225
21
31
35
126
797
184
91
21
78
53
20
98
23
114
11
343
114 144
5
Maquoketa
Distribution
Center
Morehead
Distribution
Center
Rome
Distribution
Center
Odessa
Distribution
Center
Duncan
Distribution
Center
West Memphis
Distribution
Center
Marianna
Distribution
Center
Front Royal
Distribution
Center
Matthews
Corporate Offices
and Distribution
Center
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07
Number of Stores
(as of fiscal year end)
Distribution Service Areas
Stores and Distribution Centers
(as of fiscal year end)
2,767
3,017
3,324
3,689
4,141
4,616
5,027
5,466
6,173
6,430
Rome, New York
907,000 Sq. Ft. / Opened ’06
Marianna, Florida
907,000 Sq. Ft. / Opened ’05
Odessa, Texas
907,000 Sq. Ft. / Opened ’03
Maquoketa, Iowa
907,000 Sq. Ft. / Opened ’02
Morehead, Kentucky
907,000 Sq. Ft. / Opened ’00
Duncan, Oklahoma
907,000 Sq. Ft. / Opened ’99
Front Royal, Virginia
907,000 Sq. Ft. / Opened ’98
West Memphis, Arkansas
850,000 Sq. Ft. / Opened ’94
Matthews, North Carolina
890,000 Sq. Ft. / Opened ’74
22
30
61
129
20
102
88
10
68
34
139
239
401
300
194
343
211
258
44
282
201
184
345
93
98
225
21
31
35
126
797
184
91
21
78
53
20
98
23
114
11
343
114 144
5
Maquoketa
Distribution
Center
Morehead
Distribution
Center
Rome
Distribution
Center
Odessa
Distribution
Center
Duncan
Distribution
Center
West Memphis
Distribution
Center
Marianna
Distribution
Center
Front Royal
Distribution
Center
Matthews
Corporate Offices
and Distribution
Center
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07
Number of Stores
(as of fiscal year end)
Distribution Service Areas
Stores and Distribution Centers
(as of fiscal year end)
2,767
3,017
3,324
3,689
4,141
4,616
5,027
5,466
6,173
6,430
Rome, New York
907,000 Sq. Ft. / Opened ’06
Marianna, Florida
907,000 Sq. Ft. / Opened ’05
Odessa, Texas
907,000 Sq. Ft. / Opened ’03
Maquoketa, Iowa
907,000 Sq. Ft. / Opened ’02
Morehead, Kentucky
907,000 Sq. Ft. / Opened ’00
Duncan, Oklahoma
907,000 Sq. Ft. / Opened ’99
Front Royal, Virginia
907,000 Sq. Ft. / Opened ’98
West Memphis, Arkansas
850,000 Sq. Ft. / Opened ’94
Matthews, North Carolina
890,000 Sq. Ft. / Opened ’74

16. Post Office Box 1017 / Charlotte, North Carolina 28201-1017 / www.familydollar.com
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