Family Dollar 2011 Annual Report Download - page 39

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to market risk from exposure to changes in interest rates based on our financing, investing
and cash management activities. We maintain unsecured revolving credit facilities at variable rates of interest to
meet the short-term needs of our expansion program and seasonal inventory increases. During fiscal 2011, we
incurred an immaterial amount of interest expense related to our credit facilities. We did not incur any interest
expense related to our credit facilities in fiscal 2010.
We are also subject to market risk from exposure to changes in the fair value of our investment securities.
Our investment securities currently include auction rate securities that are subject to failed auctions and are not
currently liquid. As of August 27, 2011, we had a $9.3 million unrealized loss ($5.8 million net of taxes) related
to these investments. We believe that we will be able to liquidate our auction rate securities at par at some point
in the future as a result of issuer calls or refinancings, repurchases by the broker dealers, or upon maturity.
However, volatility in the credit markets could continue to negatively impact the timing of future liquidity related
to these investments and lead to additional adjustments to their carrying value. See Note 2 to the Consolidated
Financial Statements included in this Report and “Risk Factors” set forth in Part I—Item IA of this Report for
more information.
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