Ackman Family Dollar

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Pershing Square Capital Management, L.P.

3$45"*$+(6 The analyses and conclusions of Pershing Square Capital Management, L.P. ("Pershing Square") contained in this presentation are based on publicly available information. Pershing Square recognizes that there may be confidential information in the possession of the companies discussed in the presentation that could lead these companies to disagree with Pershing Square’s conclusions. This presentation and the information contained herein is not a recommendation or solicitation to buy or sell any securities. The analyses provided may include certain statements, estimates and projections prepared with respect to, among other things, the historical and anticipated operating performance of the companies, access to capital markets and the values of assets and liabilities. Such statements, estimates, and projections reflect various assumptions by Pershing Square concerning anticipated results that are inherently subject to significant economic, competitive, and other uncertainties and contingencies and have been included solely for illustrative purposes. No representations, express or implied, are made as to the accuracy or completeness of such statements, estimates or projections or with respect to any other materials herein. Actual results may vary materially from the estimates and projected results contained herein. Funds managed by Pershing Square and its affiliates have invested in common stock of Family Dollar Stores Inc. (“FDO”). Pershing Square manages funds that are in the business of trading – buying and selling – securities and financial instruments. It is possible that there will be developments in the future that cause Pershing Square to change its position regarding FDO. Pershing Square may buy, sell, cover or otherwise change the form of its investment in FDO for any reason. Pershing Square hereby disclaims any duty to provide any updates or changes to the analyses contained here including, without limitation, the manner or type of any Pershing Square investment.

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Ticker: FDO Stock Price: $54 Market Cap: ~$6.6B EV: ~$6.7B FY2012 P/E¹: 14x (August FY)

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Note: ¹Pershing Square EPS esimtate of $3.88 All stock prices and financials are as of May 24, 2011 close

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>*"9(#?67=74$&$7%@#?6$5(#*%A#B7%;(%$(%5( Dollar Dollar stores stores offer offer pricing pricing comparable comparable to to Wal-Mart Wal-Mart in in aa more more convenient convenient format. format. Lower Lower income income customers customers use use dollar dollar stores stores as as weekly weekly fill-in fill-in trips trips between between supercenter supercenter destination destination shopping. shopping. The The average average FDO FDO store store visit visit is is 88 minutes minutes

Concept Dollar Stores Drug Stores Grocers Mass Merchants

Price Index 100 ~120 ~115 ~95

Store Size ('000) 7 40 40 125

Wal-Mart Wal-Mart and and dollar dollar stores stores can can coexist. coexist. Management Management believes believes FDO FDO has has ~3% ~3% share share of of their their core core customer’s customer’s wallet wallet compared compared to to WMT’s WMT’s ~35% ~35% share share

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C'*6(#D*$%#$%#E(&*$"# High High unit unit and and same same store store sales sales growth growth have have led led to to significant significant share share gains gains for for the the dollar dollar store store channel channel

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Bill Ackman has since doubled his position in Family Dollar (FDO). Click here for details

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Source: Bernstein, 2009

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