Family Dollar 2013 Annual Report Download - page 20

Support Center”) level, at costs which allow us to profitably conduct our operations. Various other factors, such
as overall labor availability, wage rates, union organizing activity, regulatory or legislative impacts, and various
benefit costs could all impact our ability to attract and retain employees negatively and may affect our results of
operations adversely.
Our success depends on our executive officers and other key personnel. If we lose key personnel or are unable
to hire additional qualified personnel, our business could be harmed.
Our future success depends to a significant degree on the skills, experience and efforts of our executive
officers and other key personnel. The loss of the services of any of our executive officers could have an adverse
effect on our operations and business continuity. Our future success will also depend on our ability to attract and
retain qualified personnel, as a failure to attract these key personnel could have an adverse effect on our
operations. We do not currently maintain key person life insurance policies with respect to our executive officers
or key personnel.
We are exposed to the risk of natural disasters, unusual weather, pandemic outbreaks, global political events,
war, and terrorism which could disrupt business and result in lower sales, increased operating costs and
capital expenditures.
Our Store Support Center, store locations, distribution centers and sourcing offices, as well as certain of our
vendors and customers, are located in areas which could be subject to natural disasters such as floods, hurricanes,
tornadoes or earthquakes. Adverse weather conditions or other extreme changes in the weather, including
resulting electrical and technological failures, may disrupt our business and may adversely affect our ability to
sell and distribute products.
In addition, we operate in markets that may be susceptible to pandemic outbreaks, war, terrorist acts or
disruptive global political events, such as civil unrest in countries in which our suppliers are located. Our
business may be harmed if our ability to sell and distribute products is impacted by any such events, any of
which could influence customer trends and purchases and may negatively impact our net sales, properties or
operations. Such events could result in physical damage to one or more of our properties, the temporary closure
of some or all of our stores, distribution centers, or sourcing offices, the temporary lack of an adequate work
force in a market, temporary or long-term disruption in the transport of goods, delay in the delivery of goods to
our distribution centers or stores, disruption of our technology support or information systems, fuel shortages or
dramatic increases in fuel prices, which increase the cost of doing business. Any of these factors, or combination
thereof, could adversely affect our operations.
Our current insurance program may expose us to unexpected costs and negatively affect our financial
performance.
We use a combination of third-party insurance and self-insurance to provide for potential liability for
workers’ compensation, automobile and general liability, property, director and officers’ liability, and employee
health care benefits. Any actuarial projection of losses is subject to a high degree of variability. Changes in legal
claims, trends and interpretations, variability in inflation rates, changes in the nature and method of claims
settlement, benefit level changes due to changes in applicable laws, insolvency of insurance carriers, and changes
in discount rates could all adversely affect our financial condition, results of operations, or cash flows.
Failure to comply with our debt covenants could adversely affect our capital resources, financial condition
and liquidity.
Our debt agreements contain certain restrictive covenants, which impose various operating and financial
restrictions on us. Such restrictions include, but are not limited to, a consolidated debt to consolidated
capitalization ratio, a fixed charge coverage ratio, and a priority debt ratio. Our failure to comply with the
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