-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, TKsv+BucmMcxMgnAV8uObHOvK1HHHmN+1xkF+fTGK0nPdwCDobIL3tuivPdWqd7K 60qHLiNTU9m8ECfWAquQSA== 0000028917-95-000002.txt : 19950501 0000028917-95-000002.hdr.sgml : 19950501 ACCESSION NUMBER: 0000028917-95-000002 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19950128 FILED AS OF DATE: 19950428 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DILLARD DEPARTMENT STORES INC CENTRAL INDEX KEY: 0000028917 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 710388071 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-06140 FILM NUMBER: 95532545 BUSINESS ADDRESS: STREET 1: 1600 CANTRELL RD CITY: LITTLE ROCK STATE: AR ZIP: 72201 BUSINESS PHONE: 5013765200 10-K405 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended January 28, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ____________ to _________________. Commission file number 1-6140 DILLARD DEPARTMENT STORES, INC. (Exact name of registrant as specified in its charter) DELAWARE 71-0388071 (State or other (IRS Employer jurisdiction of incorporation Identification or organization) Number) 1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (501) 376-5200 Securities registered pursuant to Section 12(b) of the Act: Title of each Class Name of each exchange on which registered Class A Common Stock New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] State the aggregate market value of the voting stock held by non-affiliates of the Registrant as of March 31, 1995: $2,906,122,458 Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of March 31, 1995: Class A Common Stock, no par value 109,028,595 Class B Common Stock, no par value 4,017,061 DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Stockholders Report for the fiscal year ended January 28, 1995 (the "Report") are incorporated by reference into Parts I and II. Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held May 20, 1995 (the "Proxy Statement") are incorporated by reference into Part III. PART I ITEM 1. BUSINESS. General Dillard Department Stores, Inc. ("Company" or "Registrant") is an outgrowth of a department store originally founded in 1938 by William Dillard. The Company was incorporated in Delaware in 1964. The Company operates retail department stores located primarily in the southwest, southeast and midwest. The department store business is highly competitive. The Company has several competitors on a national and regional level as well as numerous competitors on a local level. Many factors enter into competition for the consumer's patronage, including price, quality, style, service, product mix, convenience and credit availability. The Company's earnings depend to a significant extent on the results of operations for the last quarter of its fiscal year. Due to holiday buying patterns, sales for that period average approximately one-third of annual sales. For additional information with respect to the Registrant's business, reference is made to information contained on page 15, under the heading "Dillard's Locations", page 22 under the headings "Net Sales", "Net Income", "Total Assets" and "Number of Employees - Average", the inside back cover, and Note 2, "Notes to Consolidated Financial Statements," on page 34 of the Report, which information is incorporated herein by reference. Executive Officers of the Registrant The following table lists the names and ages of all Executive Officers of the Registrant, the nature of any family relationship between them, and all positions and offices with the Registrant presently held by each person named. All of the Executive Officers listed below have been in managerial positions with the Registrant for more than five years. Name Age Position and Office Family Relationships William Dillard 80 Chairman of the Board; Father of William Chief Executive Officer Dillard, II, Drue Corbusier, Alex Dillard and Mike Dillard William Dillard, II 50 Director; President Son of & Chief Operating Officer William Dillard Alex Dillard 45 Director; Executive Son of Vice President William Dillard Mike Dillard 43 Director; Executive Son of Vice President William Dillard W. R. Appleby 74 Vice President None Donald C. Bradley 60 Vice President None G. Kent Burnett 50 Vice President None Drue Corbusier 48 Director; Vice President Daughter of William Dillard James E. Darr, Jr. 51 Senior Vice President; None Secretary and General Counsel Laurence J. Donoghue 55 Vice President None David M. Doub 48 Vice President None John A. Franzke 63 Vice President None James I. Freeman 45 Director; Senior Vice None President; Chief Financial Officer Randal L. Hankins 44 Vice President None T. R. Gastman 65 Vice President None Bernard Goldstein 62 Vice President None Roy J. Grimes 57 Vice President None Charles K. Moore 54 Vice President None Harry D. Passow 55 Vice President None ITEM 2. PROPERTIES. All of the Registrant's stores are owned or leased from a wholly-owned subsidiary or from third parties. The Registrant's third-party store leases typically provide for rental payments based upon a percentage of net sales with a guaranteed minimum annual rent, while the lease terms between the Registrant and its wholly-owned subsidiary vary. In general, the Company pays the cost of insurance, maintenance and any increase in real estate taxes related to these leases. At fiscal year end there were 229 stores in operation with gross square footage of 35,300,000. The gross square footage of owned properties was 24,500,000. For additional information with respect to the Registrant's properties and leases, reference is made to information contained on page 15 under the heading "Dillard's Locations", and Notes 4, 9 and 10, "Notes to Consolidated Financial Statements," on pages 34, 35 and 38 of the Report, which information is incorporated herein by reference. ITEM 3. LEGAL PROCEEDINGS. The Company has no material legal proceedings pending against it. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. With respect to the market for the Company's common stock, market prices, and dividends, reference is made to information contained on the inside back cover of the Report, which information is incorporated herein by reference. As of March 31, 1995, there were 7,373 record holders of the Company's Class A Common Stock and 8 record holders of the Company's Class B Common Stock. ITEM 6. SELECTED FINANCIAL DATA. Reference is made to information under the heading "Table of Selected Financial Data" on pages 22 and 23 and Note 2, "Notes to Consolidated Financial Statements," on page 34 of the Report, which information is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Reference is made to information under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operation" on pages 24 through 26, Note 1, "Notes to Consolidated Financial Statements," under the heading "Recent Accounting Pronouncements," on page 33 of the Report, and Note 2, "Notes to Consolidated Financial Statements," on page 34 of the Report, which information is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The consolidated financial statements and notes thereto included on pages 27 through 39 of the Report are incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. A. Directors of the Registrant. Information regarding directors of the Registrant is incorporated herein by reference to the information on page 4 under the heading "Nominees for Election as Directors," pages 4 through 6 and page 10 under the heading "Section 16(a) Reporting Delinquencies" in the Proxy Statement. B. Executive Officers of the Registrant. Information regarding executive officers of the Registrant is incorporated herein by reference to Item 1 of this report under the heading "Executive Officers of the Registrant." Reference additionally is made to the information under the heading "Section 16(a) Reporting Delinquencies" on page 10 in the Proxy Statement, which information is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION. Information regarding executive compensation and compensation of directors is incorporated herein by reference to the information beginning on page 6 under the heading "Compensation of Directors and Executive Officers" and concluding on page 9 under the heading "Compensation Committee Interlocks and Insider Participation" in the Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Information regarding security ownership of certain beneficial owners and management is incorporated herein by reference to the information on page 3 under the heading "Principal Holders of Voting Securities" and page 4 under the heading "Nominees for Election as Directors" and continuing through footnote 11 on page 6 in the Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information regarding certain relationships and related transactions is incorporated herein by reference to the information on page 10 under the heading "Certain Relationships and Transactions" in the Proxy Statement and to the information regarding Mr. Davis on page 8 under the heading "Compensation Committee Interlocks and Insider Participation" in the Proxy Statement. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a)(1) Financial Statements The following consolidated financial statements of the Registrant and its consolidated subsidiaries included in the Report are incorporated herein by reference in Item 8: Consolidated Balance Sheets - January 28, 1995 and January 29, 1994 Consolidated Statements of Income - Fiscal years ended January 28, 1995, January 29, 1994 and January 30, 1993 Consolidated Statements of Stockholders' Equity - Fiscal years ended January 28, 1995, January 29, 1994 and January 30, 1993 Consolidated Statements of Cash Flows - Fiscal years ended January 28, 1995, January 29, 1994 and January 30, 1993 Notes to Consolidated Financial Statements - Fiscal years ended January 28, 1995, January 29, 1994 and January 30, 1993 (a)(2) Financial Statement Schedules The following consolidated financial statement schedule of the Registrant and its consolidated subsidiaries is filed pursuant to Item 14(d) (this schedule appears immediately following the signature page): Schedule II - Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. (a)(3) Exhibits and Management Compensatory Plans Exhibits The following exhibits are filed pursuant to Item 14(c): Number Description * 3(a) Restated Certificate of Incorporation (Exhibit 3 to Form 10-Q for the quarter ended August 1, 1992 in 1-6140) * 3(b) By-Laws as currently in effect. (Exhibit 3(b) to Form 10- K for the fiscal year ended January 30, 1993 in 1-6140) * 4(a) Indenture between the Registrant and Chemical Bank, Trustee, dated as of October 1, 1985 (Exhibit (4) in 2- 85556) * 4(b) Indenture between the Registrant and Chemical Bank, Trustee, dated as of October 1, 1986 (Exhibit (4) in 33- 8859) * 4(c) Indenture between Registrant and Chemical Bank, Trustee, dated as of April 15, 1987 (Exhibit 4.3 in 33-13534) * 4(d) Indenture between Registrant and Chemical Bank, Trustee, dated as of May 15, 1988, as supplemented (Exhibit 4 in 33-21671, Exhibit 4.2 in 33-25114 and Exhibit 4(c) to Current Report on Form 8-K dated September 26, 1990 in 1- 6140) * 4(e) Indenture between Dillard Investment Co., Inc. and Chemical Bank, Trustee, dated as of April 15, 1987, as supplemented (Exhibit 4.1 in 33-13535 and Exhibit 4.2 in 33-25113) *10(a) Retirement Contract of William Dillard dated October 17, 1990 (Exhibit (10) to Form 10-K for the fiscal year ended February 2, 1991 in 1-6140) *10(b) 1990 Incentive and Nonqualified Stock Option Plan (Exhibit 10(b) to Form 10-K for the fiscal year ended January 30, 1993 in 1-6140) *10(c) Corporate Officers Non-Qualified Pension Plan (Exhibit 10(c) to Form 10-K for the fiscal year ended January 29, 1994, in 1-6140) 10(d) Senior Management Cash Bonus Plan 11 Statement Re: Computation of Per Share Earnings 12 Statement Re: Computation of Ratio of Earnings to Fixed Charges 13 Incorporated portions of the Annual Stockholders Report for the fiscal year ended January 28, 1995 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors 99 Form 11-K for the year ended December 31, 1994, Dillard Department Stores, Inc. Retirement Plan ____________ * Incorporated herein by reference as indicated. Management Compensatory Plans Listed below are the management contracts and compensatory plans which are required to be filed as exhibits pursuant to Item 14(c): Retirement Contract of William Dillard dated October 17, 1990 1990 Incentive and Nonqualified Stock Option Plan Corporate Officers Non-Qualified Pension Plan Senior Management Cash Bonus Plan (b) Reports on Form 8-K filed during the fourth quarter: None (c) Exhibits See the response to Item 14(a)(3). (d) Financial statement schedules See the response to Item 14(a)(2). SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dillard Department Stores, Inc. Registrant April 26, 1995 /s/ James I. Freeman Date James I. Freeman, Senior Vice President and Chief Financial Officer (Principal Financial & Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the date indicated. William Dillard Drue Corbusier William Dillard Drue Corbusier Chairman and Chief Executive Vice President and Director Officer (Principal Executive Officer) Calvin N. Clyde, Jr. Robert C. Connor Calvin N. Clyde, Jr. Robert C. Connor Director Director Will D. Davis Alex Dillard Will D. Davis Alex Dillard Director Executive Vice President and Director Mike Dillard William Dillard, II Mike Dillard William Dillard, II Executive Vice President and President and Chief Operating Director Officer and Director James I. Freeman William H. Sutton James I. Freeman William H. Sutton Senior Vice President and Director Chief Financial Officer and Director John Paul Hammerschmidt William B. Harrison, Jr. John Paul Hammerschmidt William B. Harrison, Jr. Director Director J. M. Hessels John H. Johnson J. M. Hessels John H. Johnson Director Director E. Ray Kemp April 26, 1995 E. Ray Kemp Date Director INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of Dillard Department Stores, Inc. Little Rock, Arkansas We have audited the consolidated financial statements of Dillard Department Stores, Inc. and subsidiaries as of January 28, 1995 and January 29, 1994 and for each of the three years in the period ended January 28, 1995, and have issued our report thereon dated February 22, 1995; such consolidated financial statements and report (which report includes an explanatory paragraph relating to a change in accounting for income taxes) are included in your 1994 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Dillard Department Stores, Inc. and subsidiaries, listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP New York, New York February 22, 1995 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES (DOLLAR AMOUNTS IN THOUSANDS) COL. A COL. B COL. C COL.D COL. E COL. F ADDITIONS BALANCE CHARGED TO CHARGED TO BALANCE AT BEGINNING COST AND OTHER ACCOUNTS DEDUCTIONS - AT END DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD Allowance for losses on accounts receivable: Year ended January 28, 1995: $15,214 44,922 44,829 (2) $15,307 Year ended January 29, 1994: $15,790 43,036 43,612 (2) $15,214 Year ended January 30, 1993: $15,812 45,556 2,511 (1) 48,089 (2) $15,790 (1) Represents the allowance for losses on accounts acquired. (2) Accounts written off and charged to allowance for losses on accounts receivable (net of recoveries)
EXHIBIT INDEX Number Description * 3(a) Restated Certificate of Incorporation (Exhibit 3 to Form 10-Q for the quarter ended August 1, 1992 in 1-6140) * 3(b) By-Laws as currently in effect (Exhibit 3(b) to Form 10-K for the fiscal year ended January 30, 1993, in 1-6140) * 4(a) Indenture between the Registrant and Chemical Bank, Trustee, dated as of October 1, 1985 (Exhibit (4) in 2-85556) * 4(b) Indenture between the Registrant and Chemical Bank, Trustee, dated as of October 1, 1986 (Exhibit (4) in 33-8859) * 4(c) Indenture between Registrant and Chemical Bank, Trustee, dated as of April 15, 1987 (Exhibit 4.3 in 33-13534) * 4(d) Indenture between Registrant and Chemical Bank, Trustee, dated as of May 15, 1988, as supplemented (Exhibit 4 in 33-21671, Exhibit 4.2 in 33-25114 and Exhibit 4(c) to Current Report on Form 8-K dated September 26, 1990 in 1- 6140) * 4(e) Indenture between Dillard Investment Co., Inc. and Chemical Bank, Trustee, dated as of April 15, 1987, as supplemented (Exhibit 4.1 in 33-13535 and Exhibit 4.2 in 33-25113) *10(a) Retirement Contract of William Dillard dated October 17, 1990 (Exhibit (10) to Form 10-K for the fiscal year ended February 2, 1991 in 1-6140) *10(b) 1990 Incentive and Nonqualified Stock Option Plan (Exhibit 10(b) to Form 10-K for the fiscal year ended January 30, 1993 in 1-6140) *10(c) Corporate Officers Non-Qualified Pension Plan (Exhibit 10(c) to Form 10-K for the fiscal year ended January 29, 1994, in 1-6140) 10(d) Senior Management Cash Bonus Plan 11 Statement Re: Computation of Per Share Earnings 12 Statement Re: Computation of Ratio of Earnings to Fixed Charges 13 Incorporated portions of the Annual Stockholders Report for the fiscal year ended January 28, 1995 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors 99 Form 11-K for the year ended December 31, 1994, Dillard Department Stores, Inc. Retirement Plan __________________ * Incorporated herein by reference as indicated. EX-10 2 DILLARD DEPARTMENT STORES, INC. SENIOR MANAGEMENT CASH BONUS PLAN WHEREAS, the Executive Compensation Committee of the Board of Directors of the Company deems it in the best interest of the Company that certain members of senior management be rewarded for positive performance of the Company and be provided an incentive to give maximum effort for and to maintain continued association and employment with the Company; and WHEREAS, the Executive Compensation Committee of the Board of Directors believes that the Company can best attain these and other benefits by paying cash bonuses to such members of senior management for their services; NOW, THEREFORE, BE IT RESOLVED: That the Dillard Department Stores, Inc. Senior Management Cash Bonus Plan be adopted on March 31, 1994, and that it be effective for the Company's fiscal year commencing on January 30, 1994, subject to approval by stockholders at the annual meeting of the Company to be held May 21, 1994. 1. Definitions. (a) "Pre-tax Income" shall mean for a fiscal year the Company's income before federal and state income taxes. (b) "Bonus Pool" shall mean for a fiscal year the amount equal to one and one-half percent (1-1/2%) of any Pre-tax Income for the Company for that fiscal year plus three and one-half percent (3-1/2%) of the increase in Pre-tax Income over the prior fiscal year. 2. Administration of the Plan. (a) Composition of the Compensation Committee. The Plan shall be administered by a committee (the "Committee") consisting of at least two directors of the Company appointed by the Board. All persons designated as members of the Committee shall be "outside directors" within the meaning of Proposed Treasury Regulation Section 1.162-27(e)(3), or any successor to such regulation, promulgated pursuant to Section 162(m) of the Internal Revenue Code. (b) Powers of the Compensation Committee. The Committee is authorized to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to the Plan, and to make such other determinations as necessary or advisable for the administration of the Plan. The Committee may also amend, modify or terminate the Plan; provided, however, the Committee may not, without shareholder approval, amend the Plan to change the calculations used to determine the amount of the bonus pool. Such restriction shall not, however, prevent the Committee from reducing or eliminating any compensation that might be paid from the bonus pool. A majority of the entire Committee shall constitute a quorum, and the action of a majority of the members present at any meeting at which a quorum is present shall be deemed the action of the Committee. (c) Designation of Participants and Allocation Amounts. The members of senior management eligible to participate in the Plan are (i) the Chief Executive Officer, (ii) the President, (iii) the Executive Vice Presidents, and (iv) the Senior Vice Presidents. The Committee shall designate, prior to commencement of the fiscal year to which such compensation relates, or such later date as may be permitted under applicable tax laws, those individuals who will participate in the Plan for that fiscal year. At that same time, the Committee also shall designate for such individuals the pro rata percent of the Bonus Pool, to the extent one exists, to which each individual shall be entitled at the end of the fiscal year. The pro rata percent of the Bonus Pool allocated to any one individual shall not exceed 1% of Pre-tax Income. Such designations shall be in writing and shall be attached to the minutes of the Committee's meeting. The Committee shall at all times retain the right to reduce or eliminate any compensation that might be due upon the Company's attainment of Pre-tax Income for a fiscal year, but under no circumstances shall the Committee increase the amount of compensation payable upon the Company's attainment of Pre-tax Income for a fiscal year. (d) Effect of Compensation Committee's Decision. All decisions, determinations, and interpretations of the Committee shall be final and conclusive on all persons affected thereby. 3. Certification of Creation of Bonus Pool and Payments Therefrom. Following the conclusion of a fiscal year, and prior to any payments under the Plan, the Committee shall certify, which certification may be in the form of approved minutes of the Committee meeting in which such certification is made, that the Company did achieve a Pre-tax Income for the fiscal year in question, and further shall certify as to the amount of such Pre-tax Income. EX-11 3 EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Year Ended January 28, January 29, January 30, 1995 1994 1993 Average shares outstanding 112,999,406 112,749,923 111,878,212 Net effect of dilutive stock options based on the treasury stock method using average market price 14,592 58,339 414,363 Total 113,013,998 112,808,262 112,292,575 Net income $251,790,500 $241,133,700 $236,430,300 Less preferred dividends (22,000) (22,000) (22,000) Income available to common shares $251,768,500 $241,111,700 $236,408,300 Per share $2.23 $2.14 $2.11 EX-12 4 EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (DOLLAR AMOUNTS IN THOUSANDS) Fiscal Year Ended JANUARY 28, JANUARY 29, JANUARY 30, FEBRUARY 1, FEBRUARY 2 1995 1994 1993 1992 1991 Consolidated pretax income $406,110 $399,534 $375,330 $322,157 $280,778 Fixed charges (less capitalized interest) 145,957 152,604 142,892 128,925 115,125 EARNINGS $552,067 $552,138 $518,222 $451,082 $395,903 Interest $124,282 $130,915 $121,940 $109,386 $97,032 Preferred stock dividends 36 36 35 34 34 Capitalized interest 2,545 1,882 1,646 3,574 1,928 Interest factor in rent expense 21,639 21,653 20,917 19,505 18,059 FIXED CHARGES $148,502 $154,486 $144,538 $132,499 $117,053 Ratio of earnings to fixed charges 3.72 3.57 3.59 3.40 3.38
EX-13 5 FASHION STATEMENT DILLARD'S 1994 ANNUAL REPORT TABLE OF CONTENTS The Corporation 1 Letter To The Stockholders 3 Fashion Statement 7 1994 Growth Statement 13 1995 Growth Statement 14 Corporate Organization 17 Operating Divisions 19 Financial Review 21 General Information Inside Back Cover Dillard's The Corporation Dillard Department Stores, Inc. is a regional group of traditional department stores offering everyday value pricing on branded fashion and private label merchandise. The stores feature a distinctive merchandise mix with special emphasis on fashion apparel, home furnishings and electronics appealing to middle and upper-middle income consumers. The corporation's philosophy continues to embrace an ambitious program of expansion and remodeling as well as aggressive responses to industry trends in merchandise and pricing. IN THIS ECONOMY, THE ROLES OF PRICE AND QUALITY ARE MAGNIFIED DAILY IN THE BATTLE FOR MARKET SHARE Letter To The Stockholders Fiscal 1994 proved to be one of the most challenging years in the history of your company. In spite of difficult market conditions, we achieved new records in sales volume and net income. Sales for 1994 were $5.5 billion, an 8% increase over last year's sales of $5.1 billion. Sales in comparable stores increased by 5%. Net income increased by 4% to $251.8 million from $241.1 last year. Earnings per share were $2.23 this year compared to $2.14 last year. During the year, we opened nine stores, two of which were replacement stores. These stores were located in Laredo, Texas; Paducah, Kentucky; Yuma, Arizona; Fort Worth, Texas; Charleston, South Carolina; Woodlands, Texas; Hattiesburg, Mississippi; Clarksville, Tennessee; and Ogden, Utah. These new stores were well received by the communities they serve. We are encouraged by their results. At the end of 1994 we operated 229 stores in twenty-one states. During the year, we invested a quarter of a billion dollars in building, remodeling and expansion. In 1994, we added 1,113,000 new square feet to our retail space. In 1995, we plan to open eleven stores, two of which will be replacement stores, and to remodel and expand an additional eight stores. Cash flow from operations will be adequate to fund these expenditures. These stores will add a total of 1,989,000 square feet to the company's selling space. Current plans call for capital expenditures of more than $300 million in 1995. The most challenging area of our business continues to be the ladies' apparel area. The sales growth in this area trails the company average. We are constantly trying to improve the results in this area by providing our customers with the merchandise they want at a superior value. Our percentage of private label sales has increased to approximately 20% of total sales and we are confident of further growth in this area. This has allowed us to maintain a highly desirable and attractive image position with national brands while offering private brand pricing at savings of 25% or more compared to equivalent national brand merchandise. Our expense structure is one of the lowest in the industry. This year, our advertising, selling, administrative and general expenses as a percentage of sales reached a new low at 24%. We are always attentive to reducing expenses without sacrificing customer service. We do this by training our associates to be more productive, by investing in technology to maintain productivity, by disposing of less productive assets, and by focusing on every aspect of our business. During 1994, we incurred a charge of $11 million for the closure of three clearance stores. We feel that the closure of these stores will enhance our future profitability.During the year, we improved our cash generated from operating activities to $395 million compared to $314 million for fiscal 1993. At the end of 1994, our balance sheet remains one of the strongest in the department store industry. During the year we reduced total funded debt by $124 million and our long-term debt to total capitalization ratio fell to 34.1%. We are poised for growth should the right opportunity present itself. Our outstanding staff of associates continues to give us the ability to take advantage of opportunities for growth. We have tremendous confidence in our staff and management team, who are continually striving for better results. The combination of the highest quality staff and the highest quality facilities and systems is designed to provide enhanced customer satisfaction and an unmatched potential for uninterrupted growth. Our growth in 1994 and our plans and strategies for 1995 and beyond make a powerful statement of our commitment to higher returns for our stockholders. Our goal is to increase our ability to solve problems before they become advantages for our competitors and to take advantage of opportunities before they become opportunities for someone else. Anything less than success - for us and for our investors - is unacceptable. And it has been since 1938. THE MORE EFFICIENT WE ARE THE MORE RESPONSIVE OUR CUSTOMERS WILL BECOME Fashioning Stronger Growth Dillard's made a clear statement of strength in earnings, in expansion and in the implementation of strategies to ensure future growth, in a year when retailers and ladies' ready-to-wear were generally out of fashion with Wall Street and women respectively. We have the mechanisms in place to improve the company's performance, specifically, ladies' ready-to-wear. These systems will allow us to offer our customers superior values in a greater variety of the merchandise they want. A major factor in Dillard's ability to make this powerful and growing statement of leadership in an incredibly competitive marketplace is its advanced information systems and sophisticated network of internal communications. This information network helps us project and monitor upturns as well as providing an early warning system for downturns. And, it serves as an important tool allowing us to respond more quickly and profitably to any unexpected changes in markets and trends. Integral to this communication process is our ability to maintain (via computer) accurate stock monitoring by store, by specific department or even by individual items (SKU's) where problems might arise. This provides us instant understanding of what the customer is looking for and how to deliver. We maintain thorough control of - and response to - issues of size and selection, of appropriate availability and consistency of presentation. But computers are only machines. Our buyers and managers are continually in communication from store to store, analyzing and sharing successful programs and ideas. This ongoing analysis also has led to a greater emphasis on monitoring proper staffing to enhance sales. In other words, not only are we ensuring that the proper merchandise is in-store, we're applying the same discipline to assuring that the proper people are in place - in the right place - to facilitate sale of this merchandise. Fashioning Greater Response Ability Response in retailing is defined as taking the necessary steps to place the right merchandise in the right place at the right time. In 1994, Dillard's implemented an ambitious series of strategies designed to enhance and improve its ability to respond quickly and appropriately in a growing number of supply and demand areas. We've instituted buying practices that flow merchandise into stores closer to the time and place of sale. For instance, prior to the Christmas season we implemented a successful strategy that ensured the receipt of additional merchandise during a time of peak demand. This program allowed stores to provide a fresh look and greater selection to consumers in terms of merchandise and displays. The results of these new systems were positive and should continue to enhance store sales. We have improved our ability to maintain the timeliness of order points and order levels. Our communications network has allowed the creation of a system for the buying of merchandise based on actual rate of sales and consumer purchasing trends rather than relying so heavily on intuition. These steps not only have created incremental sales, they've helped eliminate out-of-stocks and provided a better handle on size control. Being more aggressive in our size scaling - in shoes, for instance - has affected the amount of inventory commitment and this, in turn, has led to improved sales and greater profitability both departmentally and storewide. Strong sales growth in home furnishings and electronics was stimulated through this commitment to identifying and responding to trends. Dillard's continues to be in a strong position to take advantage of this market as families look more toward the home for entertainment and other daily activities. Growth in this area also has tied in with our strategy of growth in the area of private label brands. We have expanded our private label selection of towels, linens and textiles, with increased selection of colors, textures and weights. We have experienced improved sales in name brand cookware and anticipate growth in a range of higher-ticket household goods such as breadmakers, pastamakers and cappuccino machines. Private Labels In The Public Interest With discounters, catalogs, outlet malls and specialty shops competing in an economy that seems unable to equate increased growth with increased consumer confidence, the roles of price and quality are magnified daily in the battle for market share in the retailing industry. Dillard's strategies of combining everyday value pricing, top-of-the-pyramid name brands and increased private label selection have expanded its competitive position for 1995 and beyond. We have continued our practice of pursuing better designer resources and, by working closely with manufacturers, we've achieved great success in marrying Dillard's strategies with brand strategies. With home run executions in the marketing of such names as Calvin Klein, Ralph Lauren Polo, Nautica and Tommy Hilfiger, we've been successful in enhancing our quality image and differentiating Dillard's from discounters and other competitors. We've also accomplished this while dealing effectively with price in the private label arena. We have undertaken this determined, positive and remarkably successful effort to increase private label awareness and sales at a remarkable pace. The percentage of private label brands sales has increased to approximately 20% of total store sales, with forecasting of continued growth. This philosophy allows us to promote image with national brands while offering private label price points of 25% to 30% less. This change in the balance of national brand and private label sales will have a positive impact on overall profitability. In 1994, Dillard's experienced substantial growth in sales while experiencing a slight decline in the percentage of gross profits to sales. This decline was caused in part by increased competition, narrower margins on national brand names and further implementation of our value priced program. This decline was partially offset by a successful and continuing system-wide program to reduce operating costs. A major improvement in our merchandising efforts will be the centralized control of our private label products. With the corporation coordinating private label selection and quality, we are instituting the necessary framework to build a more profitable merchandising mix. The Expanding Universe A healthy economy breeds success. And though no immediate turn-around is in sight for the current flatness experienced by many national retailers, simply waiting for such a change to occur is unacceptable. So, at Dillard's we have increased our commitment to physical growth and expansion nationally. Where local economies have shown strength and promise, Dillard's is pursuing an ambitious program of expansion, remodeling and new store openings. With new stores opening in Kentucky, Indiana, Colorado and Utah, we have increased our market penetration to a total of 21 states with more on the horizon. In 1994 we invested more than $250,000,000 by building and expanding more than 1,113,000 square feet in our operating area. Meeting The Challenge Of Change The steps Dillard's has taken to meet the challenges of a changing market in retailing and, especially, in women's fashion have laid an impressive foundation for continued success in 1995 and beyond. These measures combine the ability to respond quickly to short-term trends while instituting new practices that will assure responsible, predictable and profitable growth over the long term. It is our pledge to this long-term view that has served as the foundation of Dillard's success since its inception in 1938. It is our deep conviction that thoughtful and proactive solutions to long-term challenges are essential for the development of the responsive infrastructure necessary to provide better value, better productivity and better profitability. UNDERSTANDING THE NEEDS OF THE LONG TERM IS KEY FOR GREATER PROFITABILITY Opening Doors To Growth New Stores Opened - 1994 Dillard's opened nine stores during the past year, two of which were replacement stores. The stores vary in size from a 44,000 square foot unit in Yuma, Arizona, to a 230,000 square foot unit in Fort Worth, Texas. These stores added a total of 1,048,000 gross square feet to our store system. March, 1994 Laredo, TX - Mall Del Norte A 150,000 sq. ft. store replacing a 88,000 sq. ft. store. March, 1994 Paducah, KY - Kentucky Oaks Mall A 74,000 sq. ft. store. March, 1994 Yuma, AZ - Southgate Mall A 44,000 sq. ft. store. August, 1994 Ft. Worth, TX - Hulen Mall A 230,000 sq. ft. store. August, 1994 Charleston, SC - Citadel Mall A 180,000 sq. ft. store replacing a 125,000 sq. ft. store. October, 1994 Woodlands, TX - The Woodlands A 227,000 sq. ft. store. October, 1994 Hattiesburg, MS - Turtle Creek A 126,000 sq. ft. store. October, 1994 Clarksville, TN - Governors Square A 110,000 sq. ft. store. November, 1994 Ogden, UT - Newgate Mall A 120,000 sq. ft. store. Expanding Our Horizons Stores Expanded and Remodeled - 1994 During the past year, Dillard's completed major expansion and remodeling of two stores, adding 65,000 gross square feet to our store system. July, 1994 San Angelo, TX - Sunset Mall A net expansion of 15,000 sq. ft. October, 1994 Dallas, TX - North Park Mall A net expansion of 50,000 sq. ft. New Stores To Be Opened - 1995 In 1995, Dillard's will continue to aggressively expand. Projects currently in place include building eleven stores, two of which will replace existing stores, and expanding and remodeling eight others. The stores will vary in size from a 90,000 square foot unit to a 230,000 square foot unit, both in Louisville, Kentucky, with a combined gross square footage of 1,681,000 square feet. February, 1995 Brandon, FL - Brandon Town Center A 200,000 sq. ft. store. March, 1995 Clarksville, IN - Green Tree Mall A 140,000 sq. ft. store. March, 1995 Louisville, KY - Mall St. Matthews A 230,000 sq. ft. store. April, 1995 Greenville, SC - Haywood Mall A 220,000 sq. ft. store replacing a 125,000 sq.ft. store. August, 1995 Colorado Springs, CO - Citadel Crossing A 180,000 sq. ft. store. August, 1995 High Point, NC - Oak Hollow Mall A 148,000 sq. ft. store. August, 1995 Pembroke Pines, FL - Pembroke Lakes Mall A 155,000 sq. ft. store. August, 1995 Louisville, KY - Jefferson Mall A 90,000 sq. ft. store. September, 1995 Sanford, FL - Seminole Town Center A 210,000 sq. ft. store. October, 1995 Austin, TX - Lakeline Mall A 210,000 sq. ft. store. November, 1995 Tampa, FL - University Square A 180,000 sq. ft. store replacing a 157,000 sq. ft. store. Dillard's Locations Year End, 1994 Number of Stores Total 229 Texas 62 Florida 27 Louisiana 16 Missouri 16 Oklahoma 14 Arizona 13 North Carolina 13 Ohio 13 Tennessee 12 Kansas 9 Arkansas 7 South Carolina 6 Nebraska 4 New Mexico 4 Nevada 3 Mississippi 3 Illinois 2 Utah 2 Alabama 1 Iowa 1 Kentucky 1 Stores To Be Expanded and Remodeled - 1995 Plans call for eight stores to be remodeled and expanded in 1995. These expansions to remodeled stores will range in size from a 5,000 square foot remodeling of the Penn Square store in Oklahoma City, Oklahoma, to a 56,000 square foot addition to Dillard's store at The Meadows in Las Vegas, Nevada. For the year, a total of 308,000 square feet will have been added. January, 1995 Lake Jackson, TX - Brazos Mall A net expansion of 32,000 sq. ft. March, 1995 Paducah, KY - Kentucky Oaks Mall A net expansion of 40,000 sq. ft. August, 1995 Memphis, TN - Oak Court Mall A net expansion of 48,000 sq. ft. August, 1995 Lincoln, NE - Gateway Mall A net expansion of 20,000 sq. ft. October, 1995 Las Vegas, NV - The Meadows A net expansion of 56,000 sq. ft. October, 1995 St Louis, MO - Chesterfield Mall A net expansion of 55,000 sq. ft. November, 1995 Boardman, OH - Southern Park A net expansion of 52,000 sq. ft. November, 1995 Oklahoma City, OK - Penn Square A net expansion of 5,000 sq. ft. WE RECOGNIZE THAT PEOPLE ARE OUR MOST IMPORTANT ASSET Corporate Organization Management William Dillard Chairman of the Board Chief Executive Officer William Dillard, II President Chief Operating Officer Alex Dillard Executive Vice President Mike Dillard Executive Vice President James I. Freeman Senior Vice President Chief Financial Officer James E. Darr, Jr. Senior Vice President Secretary General Counsel Vice Presidents W.R. Appleby W.R. Appleby, II Gregg Athy H. Gene Baker Jan E. Bolton Michael Bowen Donald C. Bradley Joseph P. Brennan G. Kent Burnett Leonard Butler Wynelle Chapman Drue Corbusier Daniel Demicell Laurence J. Donoghue David M. Doub Richard Eagan John A. Franzke T.R. Gastman Bernard Goldstein Roy Grimes Randal L. Hankins G. William Haviland John Hawkins Mark Killingsworth David Kolmer Gaston Lemoine Denise Mahaffy Robert G. McGushin Michael S. McNiff Anthony Menzie Ken Moore Dominick E. Morvant Steven K. Nelson Steven T. Nicoll Harry D. Passow M.E. Ritchie, Jr. Richard Roberds Robert L. Robicheaux James Schatz Linda Sholtis Burt Squires Joseph W. Story Ralph Stuart David Terry William B. Warner Richard B. Willey Corporate Organization Continued Board Of Directors William Dillard Chairman of the Board Chief Executive Officer Dillard Department Stores Calvin N. Clyde, Jr. Chairman of the Board T.B. Butler Publishing Co., Inc., Tyler, Texas Robert C. Connor Investments Drue Corbusier Vice President Dillard Department Stores Will D. Davis Partner Heath, Davis & McCalla Attorneys Austin, Texas Alex Dillard Executive Vice President Dillard Department Stores Mike Dillard Executive Vice President Dillard Department Stores William Dillard, II President Chief Operating Officer Dillard Department Stores James I. Freeman Senior Vice President Chief Financial Officer Dillard Department Stores John Paul Hammerschmidt Retired Member of Congress Harrison, Arkansas William B. Harrison, Jr. Vice Chairman Chemical Banking Corporation New York, New York J.M. Hessels Chairman, Executive Board Vendex International N.V. Amsterdam, The Netherlands John H. Johnson President and Publisher Johnson Publishing Company, Inc. Chicago, Illinois E. Ray Kemp Retired Vice Chairman and Chief Administrative Officer Dillard Department Stores William H. Sutton Managing Partner Friday, Eldredge & Clark Attorneys Little Rock, Arkansas Operating Divisions Cleveland Roy Grimes Chairman David Kolmer Vice President, Stores Neil Christensen Vice President, Sales Promotion Florida T.R. Gastman Chairman David M. Doub President W.R. Appleby, II Vice President, Stores Steven T. Nicoll Vice President, Stores Louise Platt Vice President, Sales Promotion Fort Worth Drue Corbusier Chairman W.R. Appleby President Gregg Athy Vice President, Merchandising H. Gene Baker Vice President, Merchandising Anthony Menzie Vice President, Stores James Schatz Vice President, Stores Richard B. Willey Vice President, Stores Jeff Menn Vice President, Sales Promotion Little Rock Mike Dillard Chairman John A. Franzke President David Terry Vice President, Merchandising Burt Squires Vice President, Stores Ken Eaton Vice President, Sales Promotion Phoenix G. Kent Burnett Chairman Bernard Goldstein President Joseph P. Brennan Vice President, Merchandising Michael S. McNiff Vice President, Merchandising Robert G. McGushin Vice President, Stores Robert E. Baker Vice President, Sales Promotion San Antonio Laurence J. Donoghue Chairman Donald C. Bradley President Wynelle Chapman Vice President, Merchandising William B. Warner Vice President, Merchandising Gaston Lemoine Vice President, Stores Richard Roberds Vice President, Stores Linda Sholtis Vice President, Stores Cindy Gomez Vice President, Sales Promotion St. Louis Harry D. Passow Chairman Ken Moore President Daniel Demicell Vice President, Merchandising Mark Killingsworth Vice President, Merchandising Richard Eagan Vice President, Stores Robert L. Robicheaux Vice President, Stores Howard Hall Vice President, Sales Promotion Financial Review Table of Selected Financial Data 22 Management's Discussion and Analysis 24 Independent Auditors' Report 27 Consolidated Balance Sheets 28 Consolidated Statements of Income 29 Consolidated Statements of Stockholders Equity 30 Consolidated Statements of Cash Flows 31 Notes to Consolidated Statements 32 Table of Selected Financial Data Dillard Department Stores, Inc. And Subsidiaries (In thousands of dollars, except per share data) 1994 1993 1992 1991 1990 1989* 1988 Net Sales $5,545,803 $5,130,648 $4,713,987 $4,036,392 $3,605,518 $3,049,062 $2,558,395 Percent Increase 8% 9% 17% 12% 18% 19% 16% Cost of Sales 3,614,628 3,306,757 3,043,438 2,565,904 2,287,891 1,926,971 1,636,861 Percent of Sales 65.2% 64.4% 64.5% 63.6% 63.5% 63.2% 64.0% Interest and Debt Expense 124,282 130,915 121,940 109,386 97,032 91,836 80,979 Income Before Taxes 406,110 399,534 375,330 322,157 280,778 227,892 172,529 Income Taxes 154,320 158,400 138,900 116,000 98,000 79,800 58,700 Net Income 251,790 241,134 236,430 206,157 182,778 148,092 113,829 Per Common Share ** Income 2.23 2.14 2.11 1.84 1.67 1.45 1.18 Dividends 0.10 0.08 0.08 0.07 0.07 0.06 0.05 Book Value 20.55 18.42 16.28 14.19 12.31 10.23 7.80 Average Number of Shares Outstanding ** 113,013,998 112,808,262 112,292,575 111,832,758 109,351,914 101,890,272 96,655,737 Accounts Receivable - Total 1,117,411 1,111,744 1,106,010 1,004,496 932,544 759,803 654,333 Merchandise Inventories 1,362,756 1,299,944 1,178,562 1,052,683 889,333 716,054 527,931 Property and Equipment 1,960,922 1,892,054 1,662,181 1,318,027 1,066,562 897,847 787,210 Total Assets 4,577,757 4,430,274 4,107,114 3,498,506 3,007,979 2,496,277 2,067,517 Long-term Debt 1,178,503 1,238,293 1,381,676 1,008,967 839,490 739,597 620,956 Capitalized Lease Obligations 22,279 31,621 32,381 29,489 31,284 32,900 25,157 Deferred Income Taxes - Total 302,801 284,981 178,311 143,463 115,854 108,426 128,565 Stockholders' Equity 2,323,567 2,081,647 1,832,018 1,583,475 1,364,885 1,094,721 752,178 Number of Employees - Average 37,832 35,536 33,883 32,132 31,786 26,304 23,114 Gross Square Footage (in thousands) 35,300 34,900 33,200 29,100 26,600 23,500 20,800 Number of Stores Opened 7 10 11 10 4 3 7 Acquired 0 0 12 7 23 19 4 Closed 5 1 3 5 3 6 0 Total - End of Year 229 227 218 198 186 162 146 ** Restated 3 for 1 stock split * 53 Weeks Table of Selected Financial Data Dillard Department Stores, Inc. And Subsidiaries (In thousands of dollars, except per share data) 1987 1986 1985 1984* Net Sales $2,206,347 $1,851,423 $1,601,357 $1,277,280 Percent Increase 19% 16% 25% 51% Cost of Sales 1,398,808 1,179,157 1,016,199 811,522 Percent of Sales 63.4% 63.7% 63.5% 63.5% Interest and Debt Expense 64,179 47,912 44,938 37,689 Income Before Taxes 155,223 131,858 114,903 87,608 Income Taxes 64,000 57,400 48,000 38,050 Net Income 91,223 74,458 66,903 49,558 Per Common Share ** Income 0.94 0.78 0.76 0.61 Dividends 0.05 0.04 0.04 0.03 Book Value 6.67 5.77 4.14 3.41 Average Number of Shares Outstanding ** 96,571,272 95,078,094 87,619,470 81,943,728 Accounts Receivable - Total 605,299 472,639 387,612 333,830 Merchandise Inventories 500,831 385,509 305,781 252,239 Property and Equipment 694,991 513,421 394,189 325,736 Total Assets 1,888,033 1,427,639 1,139,414 963,294 Long-term Debt 594,773 400,319 386,070 384,661 Capitalized Lease Obligations 26,443 13,695 14,676 15,575 Deferred Income Taxes - Total 125,828 116,549 88,649 72,778 Stockholders' Equity 643,386 556,617 362,333 298,353 Number of Employees - Average 21,168 18,412 16,010 12,965 Gross Square Footage (in thousands) 18,500 15,600 13,600 12,500 Number of Stores Opened 6 8 8 3 Acquired 17 11 0 25 Closed 3 5 0 1 Total - End of Year 135 115 101 93 ** Restated 3 for 1 stock split * 53 Weeks
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION DILLARD DEPARTMENT STORES, INC. Sales Sales for 1994 increased 8% over the prior year. The sales increases for the past five years on a comparable 52-week basis have been: 1994 1993 1992 1991 1990 Sales Increase 8% 9% 17% 12% 20% Comparable store sales increases by quarter for the past five years has been: 1994 1993 1992 1991 1990 First Quarter 7% 3% 9% 9% 14% Second Quarter 4 4 5 10 14 Third Quarter 5 3 10 5 10 Fourth Quarter 4 3 8 2 6 Year 5 3 8 6 10 Comparable store sales include sales for those stores which were in operation for a full period in both the current quarter and the corresponding quarter for the prior year. Management believes that the majority of the increase in comparable store sales in these periods was attributable to an increase in the volume of goods sold rather than an increase in the price of goods. The sales mix for the past five years by category and percent of total sales has been: 1994 1993 1992 1991 1990 Cosmetics 12.5% 12.5% 12.2% 12.2% 11.9% Women's & Junior's Clothing 30.4 31.1 31.6 31.2 29.9 Children's Clothing 6.7 6.7 6.8 6.9 6.8 Men's Clothing & Accessories 18.6 18.1 17.7 17.4 17.1 Shoes,Accessories & Lingerie 19.1 18.6 17.9 17.4 17.1 Home 11.9 11.7 11.9 12.7 14.4 Leased Departments .8 1.3 1.9 2.2 2.8 Total 100.0% 100.0% 100.0% 100.0% 100.0% The Company experienced above average sales gains during 1994, 1993 and 1992 in men's clothing and in shoes. Sales gains trailed the company average in the women's and junior's clothing area in 1994 and 1993. Sales in leased departments have declined significantly over the past few years as the Company has de-emphasized this area. At year end there were 229 stores in operation. Annual gross square footage of stores in operation at year end and approximate sales per gross square foot for the past five years have been: 1994 1993 1992 1991 1990 Sales (000) $5,545,803 $5,130,648 $4,713,987 $4,036,392 $3,605,518 Gross Square Footage (000) 35,300 34,900 33,200 29,100 26,600 Sales per Square Foot $ 157 $ 147 $ 142 $ 138 $ 136 Gross Square Footage of owned properties (000) 24,500 22,700 21,300 18,400 15,300 Cost of Sales Cost of sales for the past five years has been: 1994 1993 1992 1991 1990 Cost of Sales (LIFO Basis) 65.2% 64.4% 64.5% 63.6% 63.5% LIFO (Credit) Charge (000) $(13,200) $200 $4,300 $1,100 $5,900 Cost of Sales (FIFO Basis) 65.4% 64.4% 64.5% 63.5% 63.3% The increase in the cost of sales for 1994 was caused by a higher level of markdowns than in the prior year. The increase in the cost of sales for 1992 is primarily the result of lower initial markups associated with the continued implementation of the Company's everyday pricing strategy. Expenses Expenses as a percent of sales for the past five years are as follows: 1994 1993 1992 1991 1990 Advertising, Selling, Administrative & General 24.0% 24.1% 24.3% 25.2% 25.4% Depreciation & Amortization 3.4 3.3 2.9 2.8 2.7 Rentals 1.2 1.3 1.3 1.4 1.5 Interest & Debt Expense 2.2 2.6 2.6 2.7 2.7 During 1994, the Company incurred an $11 million pre-tax charge for the closure of three clearance stores. This adversely affected selling, administrative and general expenses, depreciation and amortization, and rentals. During 1994 and 1993, advertising, selling, administrative and general expenses declined as a percentage of sales. The Company continues to control these expenses as sales have grown. Depreciation and amortization increased as a percentage of sales during 1994 and 1993. This is due to the additional depreciation of approximately $7.6 million for 1993 calculated on the increase in property and equipment required by the adoption of SFAS No. 109 (see Income Taxes), due to a higher proportion of the Company's properties being owned rather than leased, and due to the store closure charge in 1994. Rentals decreased slightly as a percentage of sales during 1994, primarily due to a higher proportion of the Company's properties being owned rather than leased. Interest and debt expense declined as a percentage of sales in 1994 reflecting an overall lower level of debt partially offset by higher interest rates on short term debt. Trade Accounts Receivable The year-to-year percentage growth in sales and accounts receivable has been: 1994 1993 1992 1991 1990 Sales 8% 9% 17% 12% 20% Accounts Receivable 1 1 10 8 23 The growth in accounts receivable continues to lag the growth in sales due to the increasing popularity of credit cards issued by third parties. In 1992, the Company acquired approximately $37 million of accounts receivable in connection with the acquisition of Higbee. Liquidity & Capital Resources The relevant ratios regarding liquidity and capital resources for the past five years are: 1994 1993 1992 1991 1990 Working Capital(000)$1,765,844$1,660,629$1,677,378$1,351,349$1,191,675 Current Ratio 3.3 3.1 3.4 2.8 2.8 Long-term debt to capitalization 34.1% 37.9% 43.6% 39.6% 39.0% Stockholders' equity to total assets 50.8% 47.0% 44.6% 45.3% 45.4% These measures continue to improve as the Company finances the growth of the business through operating earnings without the need for additional debt financing. The Company did not issue long-term debt during fiscal 1994 or fiscal 1993. The Company sold unsecured notes in the amount of $400 million during 1992: $100 million 7.375% notes due June 15, 1999, $100 million 7.15% notes due September 1, 2002, $100 million 7.85% notes due October 1, 2012, and $100 million 7.875% notes due January 1, 2023. The proceeds were used to reduce the balance of commercial paper outstanding and for general corporate purposes. At the end of 1994, the Company had an outstanding shelf registration for unsecured notes in the amount of $200 million. For the past several years, Dillard Investment Co., Inc. ("DIC"), a wholly-owned finance subsidiary has sold commercial paper in the public market. At January 28, 1995, the amount of commercial paper outstanding was $90 million. The Company has line of credit agreements with various banks aggregating $110 million. Additionally, the Company and DIC have a revolving line of credit in the amount of $500 million. At January 28, 1995 and January 29, 1994, no funds were borrowed under the revolving line of credit or the line of credit agreements. During 1994, the Company generated $395.3 million in cash from operating activities, as compared to $314.5 million in fiscal 1993 and $359.4 million in fiscal 1992. The primary reason for the increase in 1994 over 1993 is that merchandise inventories did not increase as fast as in the prior year. Merchandise inventories increased by approximately 5% in 1994 and 10% in 1993. There was no increase in the Company's merchandise inventories on a comparable store basis in 1994. The increase in the Company's merchandise inventories on a comparable store basis in 1993 was 5%. Capital expenditures for 1994 were $252.9 million compared to $316.7 million for 1993 and $344.1 million for 1992. During 1992, the Company acquired the remaining 50% ownership in Higbee. During 1994, the Company opened nine new stores (two of which were replacement stores), expanded two stores and closed five stores. During 1993, the Company opened 10 stores and closed one store. During 1992, the Company opened 12 stores (one of which was a replacement store), acquired 12 stores through the acquisition of the Higbee Company ("Higbee") and closed three stores. For 1995, the Company plans to open 11 stores, two of which will be replacement stores. In addition, the Company plans to expand and remodel an additional eight stores. At January 28, 1995, the Company is committed to incur costs of approximately $164 million to complete and equip these stores. The Company anticipates that cash flow from operations will be adequate to fund the capital expenditures as well as the working capital requirements of the stores. Income Taxes Effective January 31, 1993, the Company changed its method of accounting for income taxes from deferred method to the liability method required by Financial Accounting Standards Board Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes". As permitted under SFAS No. 109, prior years' financial statements have not been restated. The cumulative effect of adopting SFAS No. 109 as of January 31, 1993 was to increase the Company's assets (principally property and equipment) and liabilities (principally deferred income taxes) by approximately $87 million. The increase resulted from a requirement to adjust the assets and liabilities for prior business combinations from net of tax to pretax amounts. During 1993, Congress passed the Omnibus Budget Reconciliation Act of 1993 (the "Act") which raised the federal income tax rate by 1% effective January 1, 1993. Included in income tax expense for fiscal 1993 is a charge of approximately $6.6 million for the cumulative effect of the Act on the Company's deferred income taxes. Excluding the above described charge, the effective federal and state income tax rate was 38% for fiscal 1994 compared to 38% for fiscal 1993, and 37% for fiscal 1992. INDEPENDENT AUDITORS' REPORT To the Stockholders and Board of Directors of Dillard Department Stores, Inc. Little Rock, Arkansas We have audited the accompanying consolidated balance sheets of Dillard Department Stores, Inc. and subsidiaries as of January 28, 1995 and January 29, 1994, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended January 28, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Dillard Department Stores, Inc. and subsidiaries as of January 28, 1995 and January 29, 1994, and the results of their operations and their cash flows for each of the three years in the period ended January 28, 1995 in conformity with generally accepted accounting principles. As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for income taxes effective January 31, 1993 to conform with Statement of Financial Accounting Standards No. 109. Deloitte & Touche LLP New York, New York February 22, 1995 DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in Thousands, Except Share Data) January 28,1995 January 29,1994 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 51,095 $ 51,244 Trade accounts receivable (net of allowance for doubtful accounts of $15,307 and $15,214, respectively) 1,102,104 1,096,530 Merchandise inventories 1,362,756 1,299,944 Other current assets 8,847 8,976 Total current assets 2,524,802 2,456,694 INVESTMENTS AND OTHER ASSETS 68,810 52,110 PROPERTY AND EQUIPMENT (Notes 4 and 10): Land and land improvements 43,884 44,573 Buildings and leasehold improvements 1,261,629 1,162,120 Furniture, fixtures and equipment 1,688,161 1,583,380 Buildings under construction 49,469 13,977 Less accumulated depreciation and amortization (1,082,221) (911,996) 1,960,922 1,892,054 BUILDINGS UNDER CAPITAL LEASES - Less amortization of $26,799 and $29,593, respectively (Note 9) 23,223 29,416 TOTAL ASSETS $ 4,577,757 $ 4,430,274 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Trade accounts payable and accrued expenses (Note 5) $ 545,522 $ 529,475 Commercial paper (Note 3) 89,906 145,276 Federal and state income taxes (Note 6) 65,454 54,011 Current portion of long-term debt (Note 4) 55,903 65,061 Current portion of capital lease obligations (Note 9) 2,173 2,242 Total current liabilities 758,958 796,065 LONG-TERM DEBT (Note 4): 1,178,503 1,238,293 CAPITAL LEASE OBLIGATIONS (Note 9) 22,279 31,621 DEFERRED INCOME TAXES (Note 6) 294,450 282,648 OPERATING LEASES AND COMMITMENTS (Note 10) STOCKHOLDERS' EQUITY (Notes 7 and 8): Preferred stock - shares issued, 4,400 440 440 Common stock, Class A - shares issued, 109,028,595 and 108,974,658, respectively 1,090 1,090 Common stock, Class B (convertible) - shares issued, 4,017,061 40 40 Additional paid-in capital 624,086 622,634 Retained earnings 1,697,911 1,457,443 Total stockholders' equity 2,323,567 2,081,647 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,577,757 $4,430,274 See notes to consolidated financial statements.
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Amounts in Thousands, Except Per Share Data) Year Ended January 28, 1995 January 29,1994 January 30, 1993 NET SALES, INCLUDING SALES OF LEASED DEPARTMENTS $ 5,545,803 $ 5,130,648 $ 4,713,987 SERVICE CHARGES, INTEREST AND OTHER INCOME 182,785 181,746 169,244 5,728,588 5,312,394 4,883,231 COSTS AND EXPENSES: Cost of sales 3,614,628 3,306,757 3,043,438 Advertising, selling, administrative and general expenses 1,328,353 1,239,049 1,144,248 Depreciation and amortization 190,299 171,181 135,524 Rentals (Note 10) 64,916 64,958 62,751 Interest and debt expense (Note 4) 124,282 130,915 121,940 Total costs and expenses 5,322,478 4,912,860 4,507,901 INCOME BEFORE FEDERAL AND STATE INCOME TAXES 406,110 399,534 375,330 FEDERAL AND STATE INCOME TAXES (Note 6) 154,320 158,400 138,900 NET INCOME $ 251,790 $ 241,134 $ 236,430 INCOME PER COMMON SHARE $ 2.23 $ 2.14 $ 2.11 See notes to consolidated financial statements.
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Amounts in Thousands, Except Per Share Data) Common Common Additional Preferred Stock Stock Paid-in Retained Stock Class A Class B Capital Earnings Total BALANCE, FEBRUARY 1, 1992 $440 $44,806 $1,682 $529,277 $1,007,270 $1,583,475 Change in par value - (43,730) (1,642) 45,372 - - Issuance of 1,162,387 shares under stock option, employee savings and stock bonus plans (net of 1,210,463 shares canceled) - 9 - 19,936 (9,370) 10,575 Tax benefit from exercise of stock options - - - 10,515 - 10,515 Net income - - - - 236,430 236,430 Cash dividends: Preferred stock, $5 per share - - - - (22) (22) Common stock, $.08 per share - - - - (8,955) (8,955) BALANCE, JANUARY 30, 1993 440 1,085 40 605,100 1,225,353 1,832,018 Issuance of 469,515 shares under stock option, employee savings and stock bonus plans (net of 38,999 shares canceled) - 5 - 17,372 - 17,377 Tax benefit from exercise of stock options - - - 162 - 162 Net income - - - - - 241,134 241,134 Cash dividends: Preferred stock, $5 per share - - - - (22) (22) Common stock, $.08 per share - - - - (9,022) (9,022) BALANCE, JANUARY 29, 1994 440 1,090 40 622,634 1,457,443 2,081,647 Issuance of 53,937 shares under stock option, employee savings and stock bonus plans - - - 1,452 - 1,452 Net income - - - - 251,790 251,790 Cash dividends: Preferred stock, $5 per share - - - - (22) (22) Common stock, $.10 per share - - - - (11,300) (11,300) BALANCE, JANUARY 28, 1995 $440 $ 1,090 $ 40 $624,086 $1,697,911 $2,323,567 See notes to consolidated financial statements.
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) Year Ended January 28, 1995 January 29, 1994 January 30, 1993 OPERATING ACTIVITIES: Net income $ 251,790 $ 241,134 $ 236,430 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 191,870 172,839 137,008 Deferred income taxes 19,720 23,500 36,700 Gain on sale of property and equipment - - (104) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Increase in trade accounts receivable (5,574) (6,310) (64,554) Increase in merchandise inventories (62,812) (121,382) (41,204) Decrease (increase) in other current assets 129 (3,463) 175 Increase in investments and other assets (18,271) (2,309) (11,051) Increase in trade accounts payable and accrued expenses and income taxes 18,442 10,532 66,023 Net cash provided by operating activities 395,294 314,541 359,423 INVESTING ACTIVITIES: Purchase of property and equipment (252,974) (316,695) (344,050) Proceeds from sale of property and equipment - - 3,867 Acquisition of businesses, net of cash acquired - - (14,922) Net cash used in investing activities (252,974) (316,695) (355,105) FINANCING ACTIVITIES: Net (decrease) increase in commercial paper (55,370) 88,655 (183,682) Proceeds from long-term borrowings - - 475,000 Principal payments on long-term debt and capital lease obligations (78,359) (136,347) (259,042) Dividends paid (10,192) (9,033) (6,717) Common stock issued 1,452 17,539 21,090 Net cash (used in) provided by financing activities (142,469) (39,186) 46,649 (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (149) (41,340) 50,967 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 51,244 92,584 41,617 CASH AND CASH EQUIVALENTS, END OF YEAR $ 51,095 $ 51,244 $ 92,584 See notes to consolidated financial statements.
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JANUARY 28, 1995, JANUARY 29, 1994 AND JANUARY 30, 1993 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business - Dillard Department Stores, Inc. (the "Company") operates retail department stores located primarily in the Southeastern, Southwestern and Midwestern areas of the United States. The Company's fiscal year ends on the Saturday nearest January 31. The fiscal years 1994, 1993 and 1992 ended on January 28, 1995, January 29, 1994 and January 30, 1993, respectively, and each included 52 weeks. Consolidation - The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including its real estate subsidiary, Construction Developers, Inc. (which leases property principally to the Company), its wholly-owned finance subsidiary, Dillard Investment Co., Inc. ("DIC"), and Dillard National Bank ("DNB"), a wholly-owned subsidiary of DIC. Intercompany accounts and transactions are eliminated in consolidation. Investments in and advances to joint ventures in which the Company has a 50% ownership interest are accounted for by the equity method. Revenues - Retail sales are recorded on the accrual basis and include leased department sales of $46.2 million, $66.5 million and $91.9 million for fiscal 1994, 1993 and 1992, respectively. Costs, Expenses and Related Balance Sheet Accounts - The retail last-in, first-out ("LIFO") inventory method is used to value merchandise inventories. At January 28, 1995, the LIFO cost of merchandise was approximately equal to the first-in, first-out ("FIFO") cost of merchandise. At January 29, 1994, the LIFO cost of merchandise inventories was approximately $13.2 million less than FIFO cost. Property and equipment owned by the Company is stated at cost, which includes related interest costs incurred during the construction period, less accumulated depreciation and amortization. For financial reporting purposes, depreciation is computed by the straight-line method over the estimated useful lives. For tax reporting purposes, accelerated depreciation or cost recovery methods are used and the related deferred income taxes are included in noncurrent deferred income taxes in the consolidated balance sheet. Properties leased by the Company under lease agreements which are determined to be capital leases are stated at an amount equal to the present value of the minimum lease payments during the lease term, less accumulated amortization. The properties under capital leases and leasehold improvements under operating leases are being amortized on the straight-line method over the shorter of their useful lives or their related lease terms. The provision for amortization of leased properties is included in depreciation and amortization expense. Preopening costs of new stores are expensed in the fourth quarter of the year in which such costs are incurred. Income Taxes - Effective January 31, 1993, the Company adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." Deferred income taxes reflect the future tax consequences of differences between the tax bases of assets and liabilities and their financial reporting amounts at year-end. Financial statements for prior years have not been restated and the cumulative effect of the accounting change was to increase the Company's assets (principally property and equipment) and liabilities (principally deferred income taxes) by approximately $87 million. Accounts Receivable - Customer accounts receivable are classified as current assets and include some which are due after one year, consistent with industry practice. Concentrations of credit risk with respect to customer receivables are limited due to the large number of customers comprising the Company's credit card base, and their dispersion across the country. Credit Card and Financing Subsidiaries - DIC's business consists of financing, through the issuance of commercial paper and long-term borrowings, the Company's accounts receivable. DNB grants credit card loans to the Company's customers. Earnings before income taxes of DIC and its subsidiary were $35.4 million, $43.8 million and $22.8 million for fiscal 1994, 1993 and 1992, respectively. Summary balance sheet information for DIC and its subsidiary is presented below (in thousands of dollars): January 28, 1995 January 29,1994 Assets, principally accounts receivable $ 1,112,447 $ 1,099,437 Commercial paper and long-term debt 264,906 320,276 Other liabilities, principally due to the Company 670,695 623,910 Equity 176,846 155,251 Earnings per Common Share - Earnings per common share have been computed based on the weighted average of Class A and Class B common shares outstanding, after deducting preferred dividend requirements and giving effect to outstanding stock options. Shares used in computing earnings per common share were 113,013,998, 112,808,262 and 112,292,575 for fiscal 1994, 1993 and 1992, respectively. Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Employees' Retirement Plan - The Company has a retirement plan with a 401(k) salary deferral feature for eligible employees. Under the terms of the plan, employees may contribute up to 5% of gross earnings which will be matched 100% by the Company. The contributions are used to purchase Class A Common Stock of the Company for the account of the employee. The terms of the plan provide a five-year cliff vesting schedule for the Company contribution to the plan. Recent Accounting Pronouncements - In December 1991, the FASB issued SFAS No. 107, "Disclosures About Fair Value of Financial Instruments, " which requires disclosure of the fair value of financial instruments, both assets and liabilities recognized and not recognized in the consolidated balance sheet of the Company, for which it is practicable to estimate fair value. The estimated fair values of financial instruments which are presented herein have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgement is required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of amounts the Company could realize in a current market exchange. The fair value of trade accounts receivable is determined by discounting the estimated future cash flows at current market rates, after consideration of credit risks and servicing costs using historical rates. The fair value of the Company's long-term debt is based on market prices or dealer quotes (for publicly traded unsecured notes) and on discounted future cash flows using current interest rates for financial instruments with similar charcteristics and maturity (for bank notes and mortgage notes). The fair value of the Company's cash and cash equivalents, trade accounts receivable and commercial paper borrowings approximates their carrying values at January 28, 1995 and January 29, 1994 due to the short-term maturities of these instruments. The fair value of the Company's long-term debt at January 28, 1995 and January 29, 1994 was $1,240 million and $1,481 million, respectively. The carrying value of the Company's long-term debt at January 28, 1995 and January 29, 1994 was $1,234 million and $1,303 million, respectively. 2. ACQUISITION In July 1992, the Company entered into an agreement to acquire the remaining 50% ownership interest in The Higbee Company ("Higbee") from The Edward J. DeBartolo Corporation ("DeBartolo") for $16.5 million in cash. Higbee, in which the Company and DeBartolo each previously had a 50% ownership interest, was a Cleveland based department store chain operating 12 stores. At the date of acquisition, Higbee had assets with a fair value of approximately $280 million, including cash of $1.6 million, and liabilities of approximately $222.8 million. The Higbee stores were intergrated into the Company's operations during fiscal 1992. The acquisition was accounted for as a purchase and, accordingly, the results of Higbee have been included in the Company's consolidated operations since its effective acquisition date, August 2, 1992. 3. COMMERCIAL PAPER AND REVOLVING CREDIT AGREEMENT DIC commercial paper generally matures within 45 days from the date of issue at effective interest rates ranging from 5.41% to 5.61% at January 28, 1995. At January 28, 1995 and January 29, 1994, the weighted average interest rate of outstanding commerical paper was 5.56% and 3.06%, respectively. The average amount of commercial paper outstanding during fiscal 1994 was $122 million, at a weighted average interest rate of 4.66%. At January 28, 1995, the Company and DIC had revolving line of credit agreements with various banks aggregating $500 million. The line of credit agreements require that consolidated stockholders' equity be maintained at $1 billion or more. These agreements expire on July 13, 1999. Interest may be fixed for periods from one to six months at the election of the Company or DIC. Interest is payable at the lead bank's certificate of deposit, alternative base rate or Eurodollar rate. In addition, at January 28, 1995, the Company had line of credit agreements with various banks aggregating $110 million. The agreements have no fixed date of expiration, and interest on amounts drawn fluctuates daily based on market rates. There were no funds borrowed under the revolving line of credit agreements or line of credit agreements during fiscal 1992 through fiscal 1994. 4. LONG-TERM DEBT Long-term debt consists of the following (in thousands of dollars): January 28, 1995 January 29, 1994 Unsecured notes at rates ranging from 7.15% to 9.625%, due 1995 through 2023 $ 900,000 $ 950,000 Unsecured 5.7% note to bank, due June 3, 1996 75,000 75,000 Unsecured 9.25% notes of DIC due 1997 through 2001 175,000 175,000 Mortgage notes, payable monthly or quarterly (some with balloon payments) over periods up to 31 years from inception and bearing interest at rates ranging from 6.375% to 13.25% (1) 84,406 103,354 1,234,406 1,303,354 Current portion (55,903) (65,061) $ 1,178,503 $ 1,238,293 (1) Building, land, land improvements and equipment with a carrying value of $85.7 million at January 28, 1995 are pledged as collateral on these notes. Maturities of long-term debt over the next five years are $55.9 million, $130.8 million, $181.4 million, $107.1 million and $107.8 million. Interest and debt expense consists of the following (in thousands of dollars): Fiscal Fiscal Fiscal 1994 1993 1992 Long-term debt: Interest $ 110,945 $ 118,377 $ 106,096 Amortization of debt expense 1,404 1,484 1,281 112,349 119,861 107,377 Interest on capital lease obligations 2,324 2,831 2,605 Commercial paper interest 5,692 4,386 7,550 Other 3,917 3,837 4,408 $ 124,282 $ 130,915 $121,940 Interest paid during fiscal 1994, 1993 and 1992 was approximately $123.9 million, $124.6 million and $111.6 million, respectively. 5. TRADE ACCOUNTS PAYABLE AND ACCRUED EXPENSES Trade accounts payable and accrued expenses are comprised of the following (in thousands of dollars): January 28, 1995 January 29, 1994 Trade accounts payable $ 350,801 $ 351,594 Accrued expenses: Taxes, other than income 45,211 42,015 Salaries, wages, and employee benefits 48,200 45,074 Interest 36,162 35,521 Rent 13,777 12,023 Other 51,371 43,248 $ 545,522 $ 529,475 6. INCOME TAXES Effective January 31, 1993, the Company changed its method of accounting for income taxes from the deferred method to the liability method required by SFAS No. 109, "Accounting for Income Taxes". As permitted under SFAS No. 109, prior years' financial statements were not restated. The cumulative effect of adopting SFAS No. 109 as of January 31, 1993 was to increase the Company's assets (principally property and equipment) and liabilities (principally deferred income taxes) by approximately $87 million. The increase resulted from a requirement to adjust the assets and liabilities for prior business combinations from net of tax to pretax amounts. The provision for Federal and state income taxes is summarized as follows (in thousands of dollars): Liability Method Deferred Method Fiscal 1994 Fiscal 1993 Fiscal 1992 Current: Federal $ 120,100 $ 118,200 $ 92,000 State 14,500 16,700 10,200 134,600 134,900 102,200 Deferred: Federal 16,500 20,400 31,900 State 3,220 3,100 4,800 19,720 23,500 36,700 $ 154,320 $ 158,400 $138,900 A reconciliation between income taxes computed using the effective income tax rate and the statutory income tax rates is presented below (in thousands of dollars): Fiscal 1994 Fiscal 1993 Fiscal 1992 Income tax at the statutory Federal rate $ 142,139 $ 139,837 $127,612 State income taxes net of Federal benefit 10,686 12,983 9,767 Cumulative effect of tax rate increase on deferred income tax balances - 6,595 - Other 1,495 (1,015) 1,521 $ 154,320 $ 158,400 $ 138,900 Deferred income taxes for fiscal 1992 are attributable to the following items (in thousands of dollars): Accelerated depreciation and basis differences $ 34,271 Other 2,429 $ 36,700 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities as of January 28, 1995 and January 29, 1994 are as follows (in thousands): January 28, 1995 January 29, 1994 Property and equipment basis and depreciation differences $252,253 $236,710 State income taxes 31,216 35,434 Differences between book and tax basis of inventory 27,737 30,559 Other 10,769 - Total deferred tax liabilities 321,975 302,703 Accruals not currently deductible (17,113) (13,569) State income taxes (2,061) (2,224) Other - (1,929) Total deferred tax assets (19,174) (17,722) Deferred income taxes - net $302,801 $284,981 The net deferred income taxes include the current portion of $8.3 million and $2.3 million at January 28, 1995 and January 29, 1994 which is reported in Federal and state income taxes on the consolidated balance sheets. Income taxes paid during fiscal 1994, 1993 and 1992 were approximately $131.1 million, $102.1 million and $99.3 million, respectively. 7. STOCKHOLDERS' EQUITY Capital stock is comprised of the following: Shares Issued and Outstanding Par Shares January 28 January 29 January 30 Type Value Authorized 1995 1994 1993 Preferred (5% cumulative) $ 100 5,000 4,400 4,400 4,400 Additional preferred $ .01 10,000,000 Class A, common $ .01 289,000,000 109,028,595 108,974,658 108,502,743 Class B, common $ .01 11,000,000 4,017,061 4,017,061 4,019,461 Holders of Class A are empowered as a class to elect one-third of the members of the Board of Directors and the holders of Class B are empowered as a class to elect two-thirds of the members of the Board of Directors. Shares of Class B are convertible at the option of any holder thereof into shares of Class A at the rate of one share of Class B for one share of Class A. On June 5, 1992, the Company effected a three-for-one split of its common stock in the form of a stock dividend. All share and per share amounts were adjusted to give retroactive effect to the stock split. Concurrently, the Company's Class A and Class B common stock was changed from a stated value of $1.25 per share to a par value of $.01 per share, resulting in a reduction of common stock and an increase in additional paid-in capital of $45.4 million. 8. STOCK OPTIONS The Company's 1990 Incentive and Nonqualified Stock Option Plan provides for the granting of options to purchase 12 million shares of Class A common stock to certain key employees of the Company. Exercise terms for options granted under this plan are determined at each grant date. There were 3,984,866 options exercisable at prices ranging from $31.25 to $40.54 per share and 6,276,290 available for grant under the 1990 plan at the end of fiscal 1994. At January 28, 1995, 10,813,811 shares of Class A common were reserved for issuance under the 1990 stock option plan. Option transactions are summarized as follows: Shares Aggregate Under Option Option Price Fiscal 1994 Fiscal 1993 Fiscal 1994 Fiscal 1993 (In Thousands of Dollars) Outstanding, beginning of year 2,630,026 1,138,666 $103,242 $44,245 Granted 1,975,680 1,528,000 61,106 60,356 Exercised (12,500) (16,500) (391) (497) Canceled (55,685) (20,140) (2,281) (862) Outstanding, end of year 4,537,521 2,630,026 $ 161,676 $ 103,242 9. CAPITAL LEASES Future minimum payments under capital leases as of January 28, 1995 are as follows (in thousands of dollars): Fiscal Year Amount 1995 $ 4,327 1996 4,129 1997 3,862 1998 3,862 1999 3,586 After 2000 20,063 Total minimum lease payments 39,829 Less amount representing interest (15,377) Present value of net minimum lease payments (of which $2,173 is currently payable) $ 24,452 10. OPERATING LEASES AND COMMITMENTS Rental expense consists of the following (in thousands of dollars): Fiscal 1994 Fiscal 1993 Fiscal 1992 Operating leases: Buildings: Minimum rentals $ 33,290 $ 33,922 $ 32,092 Contingent rentals 13,456 11,796 13,139 Equipment 16,910 18,107 16,319 63,656 63,825 61,550 Contingent rentals on capital leases 1,260 1,133 1,201 $ 64,916 $ 64,958 $ 62,751 Contingent rentals on certain leases are based on a percentage of annual sales in excess of specified amounts. Other contingent rentals are based entirely on a percentage of sales. The future minimum rental commitments as of January 28, 1995 for all noncancelable operating leases for buildings and equipment are as follows (in thousands): Fiscal Year Amount 1995 $ 35,763 1996 29,363 1997 28,161 1998 26,795 1999 25,956 After 2000 202,928 $ 348,966 Renewal options from three to twenty-five years exist on the majority of leased properties. At January 28, 1995 the Company is committed to incur costs of approximately $164 million to complete and equip certain stores. 11. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The following is a tabulation of the unaudited quarterly results of operations for the years ended January 28, 1995 and January 29, 1994 (in thousands, except per share data): Fiscal 1994 Three Months Ended April 30 July 30 October 29 January 28 Net sales $ 1,283,941 $ 1,184,316 $ 1,333,630 $ 1,743,916 Gross profit 430,862 409,518 467,381 623,414 Net income 48,306 33,755 50,802 118,927 Income per common share .43 .30 .45 1.05 Fiscal 1993 Three Months Ended May 1 July 31 October 30 January 29 Net sales $ 1,163,179 $ 1,104,718 $ 1,228,065 $ 1,634,686 Gross profit 409,229 394,841 442,096 577,725 Net income 48,173 39,240 42,377 111,344 Income per common share .43 .35 .38 .99 Form 10-K Copies of the Company's 10-K Annual Report may be obtained by written request to: James I. Freeman, Senior Vice President and Chief Financial Officer Post Office Box 486, Little Rock, Arkansas 72203 Transfer Agent and Registrar Boatmen's Trust Company, Post Office Box 14737, St. Louis, Missouri 63178 Listing New York Stock Exchange, Ticker Symbol "DDS" Annual Meeting Saturday, May 20, 1995, at 9:30 a.m. Board Room, First Commercial Bank Building Capitol and Broadway, Little Rock, Arkansas 72201 Corporate Headquarters 1600 Cantrell Road, Little Rock, Arkansas 72201 Mailing Address Post Office Box 486, Little Rock, Arkansas 72203 Telephone: 501-376-5200 Telex: 910-722-7322 Fax: 501-376-5917 Stock Prices and Dividends by Quarter Sales Prices - Common Shares 1994 1993 Dividends Per Share Quarter High Low High Low 1994 1993 First $36.63 $32.13 $52.75 $35.38 $0.02 $0.02 Second 35.25 29.00 42.00 34.50 0.02 0.02 Third 33.38 25.63 38.25 33.13 0.03 0.02 Fourth 30.38 24.63 41.75 33.75 0.03 0.02 EX-21 6 EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT. STATE OF NAME UNDER WHICH NAME INCORPORATION SUBSIDIARY IS DOING BUSINESS Dillard Investment Co., Inc. Delaware Dillard Investment Company Construction Developers, Incorporated Arkansas Construction Developers, Inc. Cain Sloan, Inc. Delaware Dillard's Joske's Inc. Delaware Dillard's D. H. Holmes Company, Limited Louisiana Dillard's Dillard Travel, Inc. Arkansas Dillard Travel Higbee Associates (General Partnership) Delaware Higbee Associates The Higbee Company Delaware Dillard's J. B. Ivey & Company North Dillard's Carolina Dillard National Bank National Dillard National Bank Banking Association EX-23 7 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement Number 33-27303 on Form S-4, in Registration Statement Number 33-42500 on Form S-8, in Registration Number 33-42553 on Form S-8, in Registration Statement Number 33- 42499 on Form S-8, and in Registration Statement Number 33- 53046 on Form S-3, of our reports (which express an unqualified opinion and include an explanatory paragraph relating to a change in accounting for income taxes) dated February 22, 1995, appearing in and incorporated by reference in this Annual Report on Form 10-K of Dillard Department Stores, Inc. and subsidiaries for the year ended January 28, 1995. DELOITTE & TOUCHE LLP New York, New York April 21, 1995 EX-99 8 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1994 OR [_] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the period from _____________________ to _____________________. Commission file number 33-42553 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Dillard Department Stores, Inc. Retirement Plan. (Full-time and Part-time Employees) B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Dillard Department Stores, Inc. 1600 Cantrell Road Little Rock, Arkansas 72201 REQUIRED INFORMATION 1. An audited statement of financial condition as of December 31, 1994 and December 31, 1993 prepared in conformity with Regulation S-X is attached. 2. An audited statement of income and changes in plan equity for each of the years ended December 31, 1994, December 31, 1993 and December 31, 1992, prepared in conformity with Regulation S-X is attached. Exhibits 23. Consent of Independent Auditors. SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Dillard Department Stores, Inc. Retirement Plan Date: April 26, 1995 John Hawkins John Hawkins Vice President/Treasurer Dillard Department Stores, Inc. Dillard Department Stores, Inc. Retirement Plan Accountants' Report and Financial Statements December 31, 1994 and 1993 Dillard Department Stores, Inc. Retirement Plan DECEMBER 31, 1994 AND 1993 TABLE OF CONTENTS Page INDEPENDENT ACCOUNTANTS' REPORT 1 FINANCIAL STATEMENTS AND SCHEDULES Statements of Financial Condition 2 Statements of Income and Changes in Plan Equity 3 Notes to Financial Statements 4 Schedule I - Investments - December 31, 1994 15 Schedule I - Investments - December 31, 1993 19 Schedule II - Allocation of Plan Assets and Liabilities to Investment Programs - December 31, 1994 22 Schedule II - Allocation of Plan Assets and Liabilities to Investment Programs - December 31, 1993 23 Schedule III - Allocation of Plan Income and Changes in Plan Equity to Investment Programs - Year Ended December 31, 1994 24 Schedule III - Allocation of Plan Income and Changes in Plan Equity to Investment Programs - Year Ended December 31, 1993 25 Schedule III - Allocation of Plan Income and Changes in Plan Equity to Investment Programs - Year Ended December 31, 1992 26 SUPPLEMENTAL SCHEDULE Transactions or Series of Transactions in Excess of 5% of Current Value of Plan Assets - Year Ended December 31, 1994 27 Independent Accountants' Report Dillard's Administrative Committee Dillard Department Stores, Inc. Little Rock, Arkansas We have audited the accompanying statements of financial condition of DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN as of December 31, 1994 and 1993, and the related statements of income and changes in plan equity for each of the three years in the period ended December 31, 1994, and the supporting schedules listed in the Index at Item 9(a). These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial condition of DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN as of December 31, 1994 and 1993, and the income and changes in plan equity for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles and the supporting schedules present fairly, in all material respects, the information required to be set forth therein. The accompanying supplemental schedule of transactions or series of transactions in excess of 5% of the current value of plan assets for the year ended December 31, 1994 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure Under the Employee Retirement Income Security Act of 1974 and is not a required part of the basic financial statements. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Baird, Kurtz & Dobson Little Rock, Arkansas April 4, 1995 STATEMENTS OF FINANCIAL CONDITION DECEMBER 31, 1994 AND 1993 1994 1993 ASSETS INVESTMENTS, At Fair Market Value (Note 4) U. S. Government securities (cost; 1994 - $1,084,981, 1993 - $1,353,774) $ 1,079,998 $ 1,370,316 Corporate bonds (cost; 1994 - $66,863, 1993 - $66,863) 41,800 91,300 Common stocks (cost; 1994 - $4,078,585, 1993 - $3,742,611) 4,755,111 4,933,707 Common stocks - employer securities (cost; 1994 - $94,156,702, 1993 - $75,331,567) 117,743,148 145,611,516 Preferred stocks - employer securities (cost; 1994 - $440,000, 1993 - $440,000) 440,000 440,000 Mutual funds 8,503,661 9,696,194 Promissory notes (Note 6) 2,405,911 1,935,996 Deposits with insurance company Guaranteed account 11,512,735 Separate account 2,380,153 148,862,517 164,079,029 RECEIVABLES Employer's contributions 931,780 786,130 Employees' contributions 1,122,899 946,093 Accrued interest and dividends 178,050 123,239 2,232,729 1,855,462 CASH 614,379 167,291 Total Assets 151,709,625 166,101,782 LIABILITIES Participant benefits payable 685,943 3,823 Accrued expenses 16,312 16,025 702,255 19,848 PLAN EQUITY $ 151,007,370 $ 166,081,934 See Notes to Financial Statements
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 1994 1993 1992 NET INVESTMENT INCOME Dividends $ 1,159,700 $ 515,779 $ 537,686 Dividends - employer securities 439,611 313,339 285,499 Interest 259,136 365,663 466,795 1,858,447 1,194,781 1,289,980 Investment expenses 79,481 70,314 70,605 1,778,966 1,124,467 1,219,375 REALIZED GAIN (LOSS) ON INVESTMENTS (Note 4) Employer securities 1,962,347 225,520 5,166,124 Other investments in securities (83,311) 500,686 (704,097) 1,879,036 726,206 4,462,027 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS (Note 4) (47,863,806) (40,033,408) 24,980,919 CONTRIBUTIONS Employer 3,889,328 Employer - non cash (Note 7) 13,178,861 12,545,135 7,044,533 Plan participants 16,626,376 16,871,081 13,913,565 29,805,237 29,416,216 24,847,426 TRANSFERS FROM OTHER PLANS (Note 8) 15,346,543 63,804 Total Additions 945,976 (8,766,519) 55,573,551 WITHDRAWALS, LAPSES AND FORFEITURES Balances of employees' accounts withdrawn 15,218,387 13,117,198 19,666,010 Forfeited balances (Note 3) 789,105 745,532 (350,890) Amounts disbursed 16,007,492 13,862,730 19,315,120 ADMINISTRATIVE EXPENSES 13,048 4,901 14,490 Total Deductions 16,020,540 13,867,631 19,329,610 INCREASE (DECREASE) IN PLAN EQUITY (15,074,564) (22,634,150) 36,243,941 PLAN EQUITY, BEGINNING OF YEAR 166,081,934 188,716,084 152,472,143 PLAN EQUITY, END OF YEAR $ 151,007,370 $166,081,934 $188,716,084 See Notes to Financial Statements Dillard Department Stores, Inc. Retirement Plan Notes to Financial Statements December 31, 1994, 1993 and 1992 NOTE 1: DESCRIPTION OF THE PLAN General Description of the Plan The plan is an individual account plan covering both full and part time employees. Contributions to the plan are made by the employer and employees within the guidelines outlined below. Retirement or other termination benefits shall be payable at the election of the administrative committee in one lump sum or in periodic installments over a period of not more than ten years. Participants' accounts are credited with the participants' contributions and an allocation of the employer's contribution and plan earnings. Allocations are based on participant earnings or account balances, as defined. The amended plan consists, in one document, of two qualified retirement plans. PAYSOP accounts, basic salary deferral accounts, employer matching accounts, and voluntary salary deferral ESOP accounts are intended to constitute an Employee Stock Ownership Plan (an ESOP) as described in Section 4975 of the Internal Revenue Code. All other accounts are intended to constitute a qualified stock bonus plan. Although the employer has not expressed any intent to suspend or discontinue its contributions or to terminate the plan, it may do so at any time. A suspension of employer contributions shall not require a termination of the plan or any vesting of individual accounts. A complete discontinuance of employer contributions shall not constitute a formal termination of the plan and shall not preclude later contributions, but all individual accounts shall become one hundred percent (100%) vested, and employees who become eligible to enter the plan subsequent to the discontinuance would receive no benefit. In the event of a termination of the plan, all participants will become fully vested and the net assets of the plan will be allocated among the participants of the plan as provided for in ERISA. Participants by investment program as of December 31, 1994 were as follows: Number of Investment Program Participants Combined Capital Appreciation Fund 6,089 Government Income Securities Fund 463 Dillard Common Stock Fund 16,970 High-Quality Stock Fund 322 Money Market Fund 357 J. B. Ivey & Company Rollover Fund 347 D. H. Holmes Company Rollover Fund 418 Higbee Company Rollover Fund - Long-Term Guaranteed 730 Higbee Company Rollover Fund - Variable 717 NOTE 1: DESCRIPTION OF THE PLAN (Continued) General Description of the Plan (Continued) The foregoing description of the plan provides only general information. Employees should refer to the pamphlet "Benefits For Our Employees" for a more complete description of the plan's provisions. Copies of the pamphlet are available from the administrative committee. Contributions Combined Capital Appreciation Fund The employer makes no contribution to this fund. Employee contributions of not less than one percent (1%) or more than nine percent (9%) of each employee's compensation are permitted but not required. This voluntary contribution is in addition to the basic salary deferral contribution of one to five percent (1 to 5%) invested in the Dillard Common Stock Fund. Government Income Securities Fund The employer makes no contributions to this fund. Employee contributions of not less than one percent (1%) or more than nine percent (9%) of each employee's compensation are permitted but not required. This voluntary contribution is in addition to the basic salary deferral contribution of one to five percent (1 to 5%) invested in the Dillard Common Stock Fund. Dillard Common Stock Fund The first five percent (5%) of employee contributions are matched one hundred percent (100%) by the employer. These contributions are invested in Dillard Department Stores, Inc. Class A common stock. An additional contribution of not less than one percent (1%) or more than nine percent (9%) may be made but will not be matched and may be invested in any of the plan investment programs at the discretion of the employee. NOTE 1: DESCRIPTION OF THE PLAN (Continued) Dillard Common Stock Fund (Continued) The employer's stock bonus contributions are made in accordance with the plan agreement and are at the discretion of the employer. The minimum contribution is three percent (3%) of eligible participant's compensation in excess of $31,000 with the maximum not to exceed the provisions of the Employee Income Security Act of 1974 or the amount allowed as a deduction for the employer by the Internal Revenue Service. The plan agreement provides that forfeited amounts are to be used to reduce the employer's stock bonus contribution. The amount of forfeitures exceeding the amount of employer stock bonus contributions will be used to offset future employer matching contributions. PAYSOP (Payroll Stock Option Plan) The employer previously contributed an amount equal to one-half of one percent (1%) of participants' compensation. Contributions to this fund have been suspended. These accounts are included in the combined capital appreciation fund. The employee makes no contributions to this fund. High-Quality Stock Fund The employer makes no contributions to this fund. Employee contributions of not less than one percent (1%) or more than nine percent (9%) of each employee's compensation are permitted but not required. This voluntary contribution is in addition to the basic salary deferral contribution of five percent (5%) invested in the Dillard Company Stock Fund. The fund invests primarily in high-quality stock mutual funds. NOTE 1: DESCRIPTION OF THE PLAN (Continued) Money Market Fund The employer makes no contributions to this fund. Employee contributions of not less than one percent (1%) or more than nine percent (9%) of each employees compensation are permitted but not required. This voluntary contribution is in addition to the basic salary deferral contribution of five percent (5%) invested in the Dillard Company Stock Fund. The fund invests primarily in short-term money market mutual funds. J. B. Ivey & Company Rollover Fund Neither the employer or employee makes any contributions to this fund. This fund contains the J. B. Ivey Company assets from the Batus Retail Retirement Savings Plan which was merged into the Plan during the year ended December 31, 1990. The J. B. Ivey Company was acquired by Dillard Department Stores in 1990. The balances of the former J. B. Ivey Company participants which were merged into the plan have been frozen and receive no employee or employer contributions. Former employees of J. B. Ivey Company, who are now employed by Dillard Department Stores, may participate in the Dillard Department Stores Retirement Plan if they choose. D. H. Holmes Company Rollover Fund Neither the employer or employee makes any contribution to this fund. This fund contains the assets of the D. H. Holmes Company Retirement Savings Plan which was merged into the plan during the year ended December 31, 1990. The D. H. Holmes Company was acquired by Dillard Department Stores in 1989. The balances of the former D. H. Holmes Company participants which were merged into the plan have been frozen and receive no employee or employer contributions. Former employees of the D. H. Holmes Company, who are now employed by Dillard Department Stores, may participate in the Dillard Department Stores Retirement Plan if they choose. NOTE 1: DESCRIPTION OF THE PLAN (Continued) Higbee Company Rollover Funds Neither the employer or the employee makes any contributions to this fund. These funds contain the assets of the Higbee Company Employees' Retirement Savings Plan which was merged in the Plan during the year ended December 31, 1994. The Higbee Company was acquired in its entirety by Dillard Department Stores in 1992. The balances of the former Higbee Company participants which were merged in the Plan, have been frozen and receive no employee or employer contributions. Former employees of the Higbee Company who are now employed by Dillard Department Stores may participate in the Dillard Department Stores Retirement Plan if they choose. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Valuation of Investments Investments in U. S. Treasury notes, corporate bonds, preferred stocks, and common stocks traded on a national securities exchange (including the common stock of the employer company) are valued at the last reported sales price on the last business day of the plan year; securities traded in the over-the-counter market and listed securities for which no sales were reported on that date are valued at the mean between the last reported bid and asked prices. Commercial paper is carried at cost, which approximates market value. The investment in the preferred stock of the employer company is carried at cost inasmuch as the plan holds all such stock issued and outstanding and, in the event that the preferred stock is called by the employer company, it shall be called at par value which equals cost. The deposit with insurance company in the guaranteed long-term account is valued at cost plus undistributed income, since it is guaranteed as to principal by the Connecticut General Life Insurance Company (Connecticut) and does not participate directly in market appreciation or depreciation. The investment in the separate pooled account is valued at current value as determined by Connecticut. The Plan shares in any depreciation, appreciation, income or expenses of the separate pooled account. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Other Purchases and sales of securities are reflected on a trade-date basis. Gain or loss on disposition of investments is based on average cost. Dividend income is recorded on the ex-dividend date; interest income is recorded as earned on an accrual basis. The majority of plan expenses are paid for by the plan. NOTE 3: BENEFITS TO PARTICIPANTS Upon termination of employment, participants are entitled to the vested interests in their individual account balances. A participant's interest in his employer matching account and employer stock bonus account becomes fully vested after five years of vesting service. Terminated participants are considered fully vested in the case of death or disability. Forfeited amounts are used to reduce the employer's stock bonus contribution. The amount of forfeitures exceeding the amount of employer stock bonus contributions will be carried forward to future years and will be used to reduce the amount of future employer stock bonus contributions. Excess forfeitures for the years ended December 31, 1994, 1993 and 1992 were $475,179, $464,869 and $350,890, respectively. NOTE 4: INVESTMENTS The Plan's investments were held by a bank-administered trust fund through September 30, 1992. As of September 30, 1992, the Plan sponsor took over administration of the Plan. NOTE 4: INVESTMENTS (Continued) The following table represents the fair values of investments. Investments that represent 5% or more of total Plan assets are separately identified. Fair Value Of Investments 1994 1993 1992 Number Of Number Of Number Of Shares Or Shares Or Shares Or Principal Fair Principal Fair Principal Fair Amount Value Amount Value Amount Value INVESTMENTS, At Fair Value, As Determined By Quoted Market Prices U. S. government securities $1,085,000 $1,079,998 $1,355,000 $1,370,316 $1,325,000 $1,340,882 Corporate and foreign bonds 55,000 41,800 55,000 91,300 45,000 64,800 Common stocks Dillard Department Stores, Inc. (party-in-interest) 4,401,613 117,743,148 3,831,882 145,611,516 3,368,528 167,587,253 Other 226,085 4,755,111 208,090 4,933,707 131,865 3,842,424 Preferred stocks 4,400 440,000 4,400 440,000 4,400 440,000 Mutual funds 1,849,731 8,503,661 1,679,261 9,696,194 1,636,128 11,288,775 132,563,718 162,143,033 184,564,134 INVESTMENTS, At Estimated Fair Value Deposits with insurance companies 13,892,888 789,669 Promissory notes$2,405,911 2,405,911 $ 1,935,996 1,935,996 $ 1,364,946 1,364,946 16,298,799 1,935,996 2,154,615 TOTAL INVESTMENTS, At Fair Value $ 148,862,517 $ 164,079,029 $ 186,718,749
NOTE 4: INVESTMENTS (Continued) During the years ended December 31, 1994, 1993 and 1992, investments (including investments bought, sold and held during the year) appreciated (depreciated) in value by $(47,863,806), $(40,033,408) and $24,980,919, as follows: Unrealized Appreciation (Depreciation) in Fair Value 1994 1993 1992 INVESTMENTS, At Fair Value, As Determined By Quoted Market Price U. S. government securities $(21,525) $14,109 $9,253 Corporate and foreign bonds (49,500) 9,700 (496,538) Common stocks Dillard Department Stores, Inc. (party-in-interest) (46,693,505) (40,224,557) 24,036,066 Other (514,569) 495,037 1,494,784 Preferred stocks (374) Mutual funds (658,300) (327,697) (62,272) Deposits with insurance company 73,593 $(47,863,806)$(40,033,408) $24,980,919 UNREALIZED APPRECIATION, BEGINNING OF YEAR 71,447,301 111,480,709 86,499,790 INCREASE (DECREASE) IN UNREALIZED APPRECIATION DURING THE YEAR (47,863,806) (40,033,408) 24,980,919 UNREALIZED APPRECIATION, END OF YEAR $ 23,583,495 $ 71,447,301 $ 111,480,709 NOTE 4: INVESTMENTS (Continued) Realized gains on investments are summarized below: 1994 1993 1992 INVESTMENTS, At Fair Value, As Determined By Quoted Market Price U. S. government securities $ 1,200 $ 2,550 $ 2,179 Corporate and foreign bonds 287,768 Common stocks Dillard Department Stores, Inc. (party-in-interest) 1,962,348 225,520 5,166,124 Other (50,663) 236,714 (1,045,720) Deposits with insurance company 5,688 Mutual funds (39,537) 261,422 51,676 $ 1,879,036 $ 726,206 $ 4,462,027 NOTE 5: TAX STATUS On August 18, 1978, the Internal Revenue Service advised that the Plan is a qualified trust under the Internal Revenue Code and is exempt from federal income taxes under Section 501(a) of the Code. The termination action and merger of the pension plan with the profit-sharing plan was approved by the Internal Revenue Service on March 23, 1978. The expansion of the Plan to include a salary deferral program received a favorable determination by the Internal Revenue Service on November 30, 1984. The Plan was amended and restated as of January 1, 1985 and a favorable determination by the Internal Revenue Service was received on September 14, 1988. A determination on the amendments made to the Plan in 1990 is pending Internal Revenue Service approval. However, the Plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and the related trust was tax-exempt as of the financial statement date. The Plan participants are not taxed until they withdraw benefits from the Plan. NOTE 6: PROMISSORY NOTES During the years ended December 31, 1994, 1993 and 1992, the Plan made secured loans, totaling $1,146,440, $1,021,330, and $855,156, respectively, to Plan participants. These loans are payable through weekly payroll deductions. At December 31, 1994, interest is charged at the rate of 8.6%. As of December 31, 1994, 1993 and 1992, the remaining principal balance due on these notes was $2,405,911, $1,935,996, and $1,364,946, respectively. NOTE 7: EMPLOYER NON-CASH CONTRIBUTIONS During the years ended December 31, 1994, 1993 and 1992, the employer contributed Dillard Department Stores Class A common stock totaling $13,178,861, $12,545,135, and $7,044,533 to the Plan, respectively. NOTE 8: TRANSFERS FROM OTHER PLANS During the year ended December 31, 1990, the assets of the D. H. Holmes Company, Limited Retirement Savings Plan were merged into the Plan. D. H. Holmes Company was acquired by Dillard Department Stores in 1989. Total transfers from D. H. Holmes Company totalled $63,804 for the year ended December 31, 1992. During the year ended December 31, 1994, the assets of the Higbee Company Employee Retirement Savings Plan were merged into the Plan. The Higbee Company was acquired by Dillard Department Stores in its entirety in 1992. Total transfers from the Higbee Company totalled $15,346,543 for the year ended December 31, 1994. NOTE 9: DEPOSITS WITH INSURANCE COMPANIES The Plan assets of the Higbee Company rollover funds are invested in a guaranteed long-term account and a separate pooled account with Connecticut. The portion of the assets representing participant's contributions up to 5% of compensation and the portion of the assets representing contributions from the Company are invested in a guaranteed long-term account under a deposit administration contract. Both the principal and rate of return are guaranteed by Connecticut, however, the interest rate can be changed by Connecticut. The portion of the assets representing participant's contributions in excess of 5% of compensation may be invested in a separate pooled account which Connecticut invests in common stocks or the guaranteed long-term account at the direction of the participant. Participants may redirect the contributions to either account once a year. Financial information relating to the investments (at current value) held by Connecticut General Life Insurance Company as of December 31, 1994 is as follows: Connecticut General Life Insurance Company Guaranteed long-term account $11,512,735 Separate pooled account 2,380,153 13,892,888 Benefits accrued by Connecticut added back for reporting purposes -0- $ 13,892,888 Net appreciation in fair value, separate pooled account $ 5,687 Interest income, guaranteed long-term account $497,577 SCHEDULE I - INVESTMENTS DECEMBER 31, 1994 Par Value or Number Market of Shares Cost Value CAPITAL APPRECIATION FUND U. S. GOVERNMENT SECURITIES U. S. treasury notes - .72% 6.125% note maturing 07/31/96 $ 200,000 $ 199,625 $ 195,688 5.50% note maturing 02/15/95 $ 725,000 725,113 724,884 3.875% note maturing 03/31/95 $ 160,000 160,243 159,426 1,084,981 1,079,998 CORPORATE BONDS - .03% 8.25% TPI Enterprises, maturing 07/15/02 $ 55,000 66,863 41,800 COMMON STOCKS - 3.15% Alltel Corporation 10,500 191,240 316,313 American Freightways Corporation 11,800 82,025 234,525 AMP, Inc. (includes interest in Pamcor stock trust) 4,200 242,176 305,550 Avnet, Inc. 3,600 91,858 133,200 Blount, Inc. 2,800 80,058 130,200 Burlington Resources, Inc. 3,500 125,046 122,500 Citation Corporation 1,850 17,344 23,125 Columbia Healthcare Corporation 10,000 255,490 365,000 Commerce Clearing House, Inc. - A 4,700 75,200 79,900 Commerce Clearing House, Inc. - B 3,860 70,928 59,830 Delta & Pine Land Company 4,000 62,500 70,000 El Paso Natural Gas Corporation 4,500 102,866 137,250 Material Sciences 9,900 138,722 157,163 Medicus Systems Corporation 6,300 72,763 99,225 Merck & Company, Inc. 9,500 314,937 362,187 Murphy Oil Company 6,000 267,405 255,000 Omni Insurance Group 9,300 142,919 53,475 Orion Capital Corporation 5,625 180,821 198,281 SCHEDULE I - INVESTMENTS (Continued) DECEMBER 31, 1994 Par Value or Number Market of Shares Cost Value CAPITAL APPRECIATION FUND (Continued) COMMON STOCKS - 3.15% (Continued) Panhandle Eastern Corporation 14,500 $ 296,417 $286,375 Roosevelt Financial Group, Inc. 9,000 131,154 135,000 Southwestern Bell Corporation Company 4,100 112,864 165,537 Stewart Enterprises, Inc. 9,250 131,146 226,625 TPI Enterprises, Inc. 8,800 63,826 34,100 Torch Mark Corporation - Common 7,000 266,290 244,125 Tyson Foods, Inc. - Class "A" Common 12,500 236,965 265,625 Unicap Corporation 40,000 251,080 160,000 USA Truck, Inc. 9,000 74,545 135,000 4,078,585 4,755,111 COMMON STOCK OF DILLARD DEPARTMENT STORES, INC. CLASS "A" - 14.46% (PARTY-IN-INTEREST) 816,112 1,603,240 21,830,996 PREFERRED STOCK OF DILLARD DEPARTMENT STORES, INC. - .29% (PARTY-IN-INTEREST) 4,400 440,000 440,000 PROMISSORY NOTES - 1.59% $ 2,405,911 2,405,911 2,405,911 Total Capital Appreciation Fund 9,679,580 30,553,816 SCHEDULE I - INVESTMENTS (Continued) DECEMBER 31, 1994 Par Value or Number Market of Shares Cost Value GOVERNMENT INCOME SECURITIES FUND FORTRESS GOVERNMENT INCOME SECURITIES FUND - 1.44% 260,719 $ 2,392,871 $ 2,169,182 DILLARD COMMON STOCK FUND COMMON STOCK OF DILLARD DEPART- MENT STORES, INC. - CLASS "A" - 63.51% (PARTY-IN-INTEREST) 3,585,501 92,553,462 95,912,152 HIGH-QUALITY STOCK FUND LIBERTY-AMERICAN LEADERS FUND - .48% 50,042 699,725 720,098 MONEY MARKET FUND MONEY MARKET MANAGEMENT FUND - .65% 982,220 982,224 982,220 IVEY'S GOVERNMENT INCOME FUND FORTRESS GOVERNMENT INCOME SECURITIES - 1.91% 346,669 3,189,705 2,884,286 D. H. HOLMES ROLLOVER FUND FORTRESS GOVERNMENT INCOME SECURITIES FUND - 1.16% 210,081 1,962,160 1,747,875 SCHEDULE I - INVESTMENTS (Continued) DECEMBER 31, 1994 Par Value or Number Market of Shares Cost Value HIGBEE'S ROLLOVER FUND - LONG-TERM GUARANTEED FUND CONNECTICUT GENERAL LIFE INSURANCE COMPANY CONTRACT - GUARANTEED ACCOUNT - 7.62% 11,512,735 $ 11,512,735 $ 11,512,735 HIGBEE'S ROLLOVER FUND - VARIABLE FUND CONNECTICUT GENERAL LIFE INSURANCE COMPANY CONTRACT - SEPARATE ACCOUNT - 1.58% 224,653 2,306,560 2,380,153 Total Assets Held for Investment $ 125,279,022 $ 148,862,517 SCHEDULE I - INVESTMENTS DECEMBER 31, 1993 Par Value or Number Market of Shares Cost Value CAPITAL APPRECIATION FUND U. S. GOVERNMENT SECURITIES U. S. Treasury notes - .83% 4.25% note maturing 07/31/94 $ 400,000 $ 398,313 $ 401,876 5.50% note maturing 02/15/95 $ 725,000 725,112 738,369 3.875% note maturing 03/31/95 $ 230,300 230,349 230,071 1,353,774 1,370,316 CORPORATE BONDS - .05% 8.250% TPI Enterprises, maturing 07/15/02 $ 55,000 66,863 91,300 COMMON STOCKS - 2.97% Alberto Culver Company Class "A" 8,600 185,692 180,600 Alltel Corporation 9,800 172,428 289,100 American Freightways Corporation 11,800 82,025 233,050 Amp, Inc. 4,200 242,176 265,125 Analog Devices, Inc. 4,155 47,309 102,317 Avnet, Inc. 3,600 91,858 140,400 Burlington Resources, Inc. 4,000 142,909 169,500 CBI Industries, Inc. 8,000 220,127 243,000 Columbia Healthcare Corporation 12,100 309,143 400,812 Commerce Clearing House, Inc. 3,860 70,928 69,480 Delta & Pine Land Co. 4,000 62,500 70,000 El Paso Natural Gas Corporation 3,525 61,075 126,900 Material Sciences 6,600 138,722 150,975 SCHEDULE I - INVESTMENTS (Continued) DECEMBER 31, 1993 Par Value or Number Market of Shares Cost Value CAPITAL APPRECIATION FUND (Continued) Medicus Systems Corporation 6,300 $ 72,763 $ 116,550 Newmont Mining Corp. 1,500 67,848 86,438 Omni Insurance Group. 6,300 93,794 103,950 Orion Capital 5,625 180,821 179,297 Panhandle Eastern Corporatio 11,000 222,104 261,250 Southwestern Bell Corporatio 5,600 154,156 232,400 Stewart Enterprises, Inc. 10,575 147,193 285,525 Taco Cabana, Inc. 3,750 58,697 66,563 Tele-Communications, Inc. 5,800 138,964 175,450 Torchmark Corporation 5,100 191,177 229,500 TPI Enterprises 9,800 71,080 96,775 Tyson Foods, Inc. - Class "A 12,500 236,965 300,000 Unilab Corporation 30,000 197,330 176,250 USA Truck, Inc. 10,000 82,827 182,500 3,742,611 4,933,707 COMMON STOCK OF DILLARD DEPARTMENT STORES, INC. CLASS "A" - 19.99% (PARTY-IN- INTEREST) 873,660 1,716,293 33,199,080 PREFERRED STOCK OF DILLARD DEPARTMENT STORES, INC. - .27% (PARTY-IN-INTEREST) 4,400 440,000 440,000 PROMISSORY NOTES - 1.17% $ 1,935,996 1,935,996 1,935,996 MORGAN STANLEY BALANCED PORTFOLIO - .50% 74,187 798,035 825,706 Total Capital Appreciation Fund 10,053,572 42,796,105 SCHEDULE I - INVESTMENTS (Continued) DECEMBER 31, 1993 Par Value or Number Market of Shares Cost Value GOVERNMENT INCOME SECURITIES FUND FORTRESS GOVERNMENT INCOME SECURITIES FUND - 1.39% 253,546 $ 2,348,090 $ 2,312,341 DILLARD COMMON STOCK FUND COMMON STOCK OF DILLARD DEPART- MENT STORES, INC. CLASS "A" - 67.68% (PARTY-IN-INTEREST) 2,958,222 73,615,274 112,412,436 HIGH-QUALITY STOCK FUND LIBERTY - AMERICAN LEADERS FUND - .29% 31,966 428,554 478,849 MONEY MARKET FUND MONEY MARKET MANAGEMENT FUND - .44% 733,387 733,391 733,387 IVEY'S GOVERNMENT INCOME FUND FORTRESS GOVERNMENT INCOME SECURITIES FUND - 1.99% 361,856 3,345,508 3,300,124 D. H. HOLMES ROLLOVER FUND FORTRESS GOVERNMENT INCOME SECURITIES FUND - 1.23% 224,319 2,107,340 2,045,787 TOTAL ASSETS HELD FOR INVESTMENT $ 92,631,729 $ 164,079,029 Percentages shown are based on market value compared to Plan Equity See Notes to Financial Statements DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE II - ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS DECEMBER 31, 1994 Combined Dillard Capital Goverment Common Money Appreciation Income Stock High-Quality Market Fund Securities Fund Stock Fund Fund ASSETS Investments U. S. Government securities $1,079,998 $ $ $ $ Corporate bonds 41,800 Common stocks 4,755,111 Common stocks - employer securities 21,830,996 95,912,152 Preferred stocks - employer securities 440,000 Mutual funds 2,169,182 720,098 982,220 Promissory notes 2,405,911 Insurance company contract Guaranteed account Separate account 30,553,816 2,169,182 95,912,152 720,098 982,220 Receivables Employer's contributions 931,780 Employees' contributions 69,880 20,711 985,554 23,546 23,208 Accrued interest and dividends 72,600 105,450 Receivable (payable) from (to) other funds (31,122) 35,196 (8,003) (3,175) 10,938 111,358 55,907 2,014,781 20,371 34,146 Cash 614,379 TOTAL ASSETS 31,279,553 2,225,089 97,926,933 740,469 1,016,366 LIABILITIES Participant benefits payable 685,943 Accrued expenses 16,312 16,312 685,943 PLAN EQUITY $31,263,241 $2,225,089 $97,240,990 $740,469 $1,016,366
Higbee J.B. Ivey D.H. Holmes Company Higbee Company Company Rollover Fund Company Rollover Rollover Long-Term Rollover Fund Fund Fund Guaranteed Variable Total ASSETS Investments U. S. Government securities $ $ $ $ 1,079,998 Corporate bonds 41,800 Common stocks 4,755,111 Common stocks - employer securities 117,743,148 Preferred stocks - employer securities 440,000 Mutual funds 2,884,286 1,747,875 8,503,661 Promissory notes 2,405,911 Insurance company contract Guaranteed account 11,512,735 11,512,735 Separate account 2,380,153 2,380,153 2,884,286 1,747,875 11,512,735 2,380,153 148,862,517 Receivables Employer's contributions 931,780 Employees' contributions 1,122,899 Accrued interest and dividends 178,050 Receivable (payable) from (to) other funds 1,735 (5,436) (119) (14) 1,735 (5,436) (119) (14) 2,232,729 Cash 614,379 TOTAL ASSETS 2,886,021 1,742,439 11,512,616 2,380,139 151,709,625 LIABILITIES Participant benefits payable 685,943 Accrued expenses 16,312 702,255 PLAN EQUITY $2,886,021 $1,742,439 $11,512,616 $2,380,139 $151,007,370 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE II - ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS DECEMBER 31, 1993 Combined Dillard Capital Goverment Common Money Appreciation Income Stock High-Quality Market Fund Securities Fund Stock Fund Fund ASSETS Investments U. S. Government securities $1,370,316 $ $ $ $ Corporate bonds 91,300 Common stocks 4,933,707 Common stocks - employer securities 33,199,080 112,412,436 Preferred stocks - employer securities 440,000 Mutual funds 825,706 2,312,341 478,849 733,387 Promissory notes 1,935,996 42,796,105 2,312,341 112,412,436 478,849 733,387 Receivables Employer's contributions 786,130 Employees' contributions 74,432 22,400 812,116 18,541 18,604 Accrued interest and dividends 64,113 59,126 Receivable (payable) from (to) other funds (38,403) (3,829) 64,061 (10,698) (10,737) 100,142 18,571 1,721,433 7,843 7,867 Cash 159,526 185 6,541 TOTAL ASSETS 43,055,773 2,331,097 114,140,410 486,692 741,254 LIABILITIES Participant benefits payable 3,823 Accrued expenses 16,025 16,025 3,823 PLAN EQUITY $43,039,748 $2,331,097 $114,136,587 $486,692 $741,254
J.B. Ivey D.H. Holmes Company Company Rollover Rollover Fund Fund TOTAL ASSETS Investments U. S. Government securities $ $ $1,370,316 Corporate bonds 91,300 Common stocks 4,933,707 Common stocks - employer securities 145,611,516 Preferred stocks - employer securities 440,000 Mutual funds 3,300,124 2,045,787 9,696,194 Promissory notes 1,935,996 3,300,124 2,045,787 164,079,029 Receivables Employer's contributions 786,130 Employees' contributions 946,093 Accrued interest and dividends 123,239 Receivable (payable) from (to) other funds 369 (763) Cash 1,039 167,291 TOTAL ASSETS 3,300,493 2,046,063 166,101,782 LIABILITIES Participant benefits payable 3,823 Accrued expenses 16,025 19,848 PLAN EQUITY $3,300,493 $2,046,063 $166,081,934 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE III - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT PROGRAMS YEAR ENDED DECEMBER 31, 1994 Combined Dillard Capital Goverment Common Money Appreciation Income Stock High-Quality Market Fund Securities Fund Stock Fund Fund NET INVESTMENT INCOME Dividends $105,545 $162,866 $ $9,590 $28,175 Dividends - employer securities 105,741 333,870 Interest 259,136 470,422 162,866 333,870 9,590 28,175 Investment expenses (67,266) (12,215) 403,156 162,866 321,655 9,590 28,175 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securitites 1,720,604 241,743 Other investments in securities (37,741) (20,837) 15,455 1,682,863 (20,837) 241,743 15,455 0 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS (11,868,297) (187,940) (35,438,473) (29,922) CONTRIBUTIONS Employer Employer - non cash 13,178,861 Plan participants 1,006,307 291,728 14,749,673 294,755 283,913 1,006,307 291,728 27,928,534 294,755 283,913 TRANSFER FROM OTHER PLANS Total Additions (8,775,971) 245,817 (6,946,541) 289,878 312,088 WITHDRAWALS, LAPSES AND FORFEITURES Balance of employees' accounts withdrawn 2,974,421 350,569 9,181,994 35,978 36,849 Forfeited balances 21,922 767,062 Amounts disbursed 2,996,343 350,569 9,949,056 35,978 36,849 ADMINISTRATIVE EXPENSES 4,193 1,256 123 127 Total Deductions 3,000,536 351,825 9,949,056 36,101 36,976 INCREASE (DECREASE) IN PLAN EQUITY (11,776,507) (106,008) (16,895,597) 253,777 275,112 PLAN EQUITY, BEGINNING OF YEAR 43,039,748 2,331,097 114,136,587 486,692 741,254 PLAN EQUITY, END OF YEAR $31,263,241 $2,225,089 $97,240,990 $740,469 $1,016,366
Higbee J.B. Ivey D.H. Holmes Company Higbee Company Company Rollover Fund Company Rollover Rollover Long-Term Rollover Fund Fund Fund Guaranteed Variable Total NET INVESTMENT INCOME Dividends $221,420 $134,527 $497,577 $ $1,159,700 Dividends - employer securities 439,611 Interest 259,136 221,420 134,527 497,577 0 1,858,447 Investment expenses (79,481) 221,420 134,527 497,577 0 1,778,966 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securitites 1,962,347 Other investments in securities (24,587) (21,288) 5,687 (83,311) (24,587) (21,288) 0 5,687 1,879,036 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS (260,036) (152,731) 73,593 (47,863,806) CONTRIBUTIONS Employer Employer - non cash 13,178,861 Plan participants 16,626,376 0 0 0 0 29,805,237 TRANSFER FROM OTHER PLANS 12,892,805 2,453,738 15,346,543 Total Additions (63,203) (39,492) 13,390,382 2,533,018 945,976 WITHDRAWALS, LAPSES AND FORFEITURES Balance of employees' accounts withdrawn 349,307 263,875 1,873,197 152,197 15,218,387 Forfeited balances 121 789,105 Amounts disbursed 349,428 263,875 1,873,197 152,197 16,007,492 ADMINISTRATIVE EXPENSES 1,841 257 4,569 682 13,048 Total Deductions 351,269 264,132 1,877,766 152,879 16,020,540 INCREASE (DECREASE) IN PLAN EQUITY (414,472) (303,624) 11,512,616 2,380,139 (15,074,564) PLAN EQUITY, BEGINNING OF YEAR 3,300,493 2,046,063 0 0 166,081,934 PLAN EQUITY, END OF YEAR $2,886,021 $1,742,439 $11,512,616 $2,380,139 $151,007,370 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE III - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT PROGRAMS YEAR ENDED DECEMBER 31, 1993 Combined Dillard Capital Goverment Common Money Appreciation Income Stock High-Quality Market Fund Securities Fund Stock Fund Fund NET INVESTMENT INCOME Dividends $68,572 $ $ $6,094 $13,718 Dividends - employer securities 91,893 221,446 Interest 170,385 182,631 12,647 330,850 182,631 221,446 18,741 13,718 Investment expenses (60,464) (9,850) 270,386 182,631 211,596 18,741 13,718 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securitites 0 225,520 Other investments in securities 500,467 (154) 500,467 (154) 225,520 0 0 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS (9,851,843) (71,267) (29,959,052) 12,440 CONTRIBUTIONS Employer Employer - non cash 12,545,135 Plan participants 884,471 323,867 15,169,017 204,745 232,341 884,471 323,867 27,714,152 204,745 232,341 TRANSFER FROM OTHER PLANS Total Additions (8,196,519) 435,077 (1,807,784) 235,926 246,059 WITHDRAWALS, LAPSES AND FORFEITURES Balance of employees' accounts withdrawn 2,370,614 551,651 9,246,533 27,460 79,344 Forfeited balances 66,584 678,390 Amounts disbursed 2,437,198 551,651 9,924,923 27,460 79,344 ADMINISTRATIVE EXPENSES 4,086 227 40 67 Total Deductions 2,441,284 551,878 9,924,923 27,500 79,411 INCREASE (DECREASE) IN PLAN EQUITY (10,637,803) (116,801) (11,732,707) 208,426 166,648 PLAN EQUITY, BEGINNING OF YEAR 53,677,551 2,447,898 125,869,294 278,266 574,606 PLAN EQUITY, END OF YEAR $43,039,748 $2,331,097 $114,136,587 $486,692 $741,254
J.B. Ivey D.H. Holmes Company Company Rollover Rollover Fund Fund Total NET INVESTMENT INCOME Dividends $257,875 $169,520 $515,779 Dividends - employer securities 313,339 Interest 365,663 257,875 169,520 1,194,781 Investment expenses (70,314) 257,875 169,520 1,124,467 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securitites 225,520 Other investments in securities 2,764 (2,391) 500,686 2,764 (2,391) 726,206 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS (101,441) (62,245) (40,033,408) CONTRIBUTIONS Employer Employer - non cash 12,545,135 Plan participants 43,753 12,887 16,871,081 43,753 12,887 29,416,216 TRANSFER FROM OTHER PLANS Total Additions 202,951 117,771 (8,766,519) WITHDRAWALS, LAPSES AND FORFEITURES Balance of employees' accounts withdrawn 403,041 438,555 13,117,198 Forfeited balances 558 745,532 Amounts disbursed 403,599 438,555 13,862,730 ADMINISTRATIVE EXPENSES 294 187 4,901 Total Deductions 403,893 438,742 13,867,631 INCREASE (DECREASE) IN PLAN EQUITY (200,942) (320,971) (22,634,150) PLAN EQUITY, BEGINNING OF YEAR 3,501,435 2,367,034 188,716,084 PLAN EQUITY, END OF YEAR $3,300,493 $2,046,063 $166,081,934 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE III - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT PROGRAMS YEAR ENDED DECEMBER 31, 1992 Combined Dillard Capital Goverment Common Money Appreciation Income Stock High-Quality Market Fund Securities Fund Stock Fund Fund NET INVESTMENT INCOME Dividends $71,138 $ $ $19,118 $13,415 Dividends - employer securities 98,254 187,245 Interest 275,240 191,555 444,632 191,555 187,245 19,118 13,415 Investment expenses (70,605) 374,027 191,555 187,245 19,118 13,415 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securitites 4,573,785 592,339 Other investments in securities (724,387) 3,317 1,868 3,849,398 3,317 592,339 1,868 0 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS 3,670,134 (56,802) 21,505,908 (2,123) CONTRIBUTIONS Employer 3,889,328 Employer - non cash 7,044,533 Plan participants 773,143 314,574 12,527,869 116,068 181,911 773,143 314,574 23,461,730 116,068 181,911 TRANSFER FROM OTHER PLANS Total Additions 8,666,702 452,644 45,747,222 134,931 195,326 WITHDRAWALS, LAPSES AND FORFEITURES Balance of employees' accounts withdrawn 9,454,867 252,520 9,162,207 25,614 57,805 Forfeited balances (66,584) (292,725) Amounts disbursed 9,388,283 252,520 8,869,482 25,614 57,805 ADMINISTRATIVE EXPENSES 4,976 210 8,666 16 41 Total Deductions 9,393,259 252,730 8,878,148 25,630 57,846 INCREASE (DECREASE) IN PLAN EQUITY (726,557) 199,914 36,869,074 109,301 137,480 PLAN EQUITY, BEGINNING OF YEAR 54,404,108 2,247,984 89,000,220 168,965 437,126 PLAN EQUITY, END OF YEAR $53,677,551 $2,447,898 $125,869,294 $278,266 $574,606
J.B. Ivey D.H. Holmes Company Company Rollover Rollover Fund Fund Total NET INVESTMENT INCOME Dividends $299,356 $134,659 $537,686 Dividends - employer securities 285,499 Interest 466,795 299,356 134,659 1,289,980 Investment expenses (70,605) 299,356 134,659 1,219,375 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securitites 5,166,124 Other investments in securities 11,824 3,281 (704,097) 11,824 3,281 4,462,027 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS (94,991) (41,207) 24,980,919 CONTRIBUTIONS Employer 3,889,328 Employer - non cash 7,044,533 Plan participants 13,913,565 0 0 24,847,426 TRANSFER FROM OTHER PLANS 63,804 63,804 Total Additions 216,189 160,537 55,573,551 WITHDRAWALS, LAPSES AND FORFEITURES Balance of employees' accounts withdrawn 452,390 260,607 19,666,010 Forfeited balances (558) 8,977 (350,890) Amounts disbursed 451,832 269,584 19,315,120 ADMINISTRATIVE EXPENSES 349 232 14,490 Total Deductions 452,181 269,816 19,329,610 INCREASE (DECREASE) IN PLAN EQUITY (235,992) (109,279) 36,243,941 PLAN EQUITY, BEGINNING OF YEAR 3,737,427 2,476,313 152,472,143 PLAN EQUITY, END OF YEAR $3,501,435 $2,367,034 $188,716,084 See Notes to Financial Statements
SUPPLEMENTAL SCHEDULE Dillard Department Stores, Inc. Retirement Plan TRANSACTIONS OR SERIES OF TRANSACTIONS IN EXCESS OF 5% OF CURRENT VALUE OF PLAN ASSETS YEAR ENDED DECEMBER 31, 1994 Current Expenses Value At Sales Purchase Incurred In Transaction Price Cost Transaction Date (Loss) Dillard Department Stores, Inc., Class "A" Common Stock (party-in-interest) $ 19,940,996 $ 19,940,996 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in Registration Statement No. 33-42553 on Form S-8 of our report on the financial statements included in the annual report on Form 11-K of the Dillard Department Stores, Inc. Retirement Plan for the year ended December 31, 1994. Baird, Kurtz & Dobson Little Rock, Arkansas April 4, 1995 -----END PRIVACY-ENHANCED MESSAGE-----