Item 3. Legal Proceedings

From time to time, we are defendants in ordinary, routine litigation or proceedings incidental to our business, including allegations regarding:

• employment-related matters;

• infringement of intellectual property rights;

• personal injury/wrongful death claims;

• real estate matters;

• environmental and safety issues; and

• product safety matters, which may include regulatory matters.

In addition, we are currently defendants in national and state proceedings and responding to the regulatory matters described in Note 4 to our consolidated financial statements under the caption “Contingencies.” These include several proposed class action complaints that have been filed against, as well as a federal grand jury subpoena that has been issued to, Family Dollar related to

issues associated with our West Memphis, Arkansas distribution center as well as Talc litigation. For a further description of these matters and their impact, see “Item 1A. Risk Factors”: “We may stop selling or recall certain products for safety-related issues” on page 13 and “Litigation, arbitration and government proceedings may adversely affect our business, financial condition and/or results of operations” on page 18. Such description is incorporated by reference herein.

We will vigorously defend ourselves in these matters. We do not believe that any of these matters will, individually or in the aggregate, have a material effect on our business or financial condition. We cannot give assurance, however, that one or more of these matters will not have a material effect on our results of operations for the period or year in which they are reserved or resolved. Based on the information available, including the amount of time remaining before trial, the results of discovery and the judgment of internal and external counsel, we may be unable to express an opinion as to the outcome of those matters which are not close to being resolved and may be unable to estimate a loss or potential range of loss.