-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VMaN/9K/1O9fcVlWIoSqni/rfn/FrsrPHmvixqkJEqL61wz5Hn2CNgR0HnNiL4sa cHzLgfjCRRTiABj9vKVeBA== 0000028917-96-000005.txt : 19960503 0000028917-96-000005.hdr.sgml : 19960503 ACCESSION NUMBER: 0000028917-96-000005 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960203 FILED AS OF DATE: 19960502 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06140 FILM NUMBER: 96555439 BUSINESS ADDRESS: STREET 1: 1600 CANTRELL RD CITY: LITTLE ROCK STATE: AR ZIP: 72201 BUSINESS PHONE: 5013765200 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (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 February 3, 1996 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. [ ] State the aggregate market value of the voting stock held by non-affiliates of the Registrant as of March 29, 1996: $3,664,270,540 Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of March 29, 1996: Class A Common Stock, no par value 109,270,507 Class B Common Stock, no par value 4,016,929 DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Stockholders Report for the fiscal year ended February 3, 1996 (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 18, 1996 (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 19, under the heading "Dillard's Locations," page 22 under the headings "Net Sales," "Net Income," "Total Assets" and "Number of Employees - Average," and page 40 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 81 Chairman of the Board; Father of William Chief Executive Officer Dillard, II, Drue Corbusier, Alex Dillard and Mike Dillard William Dillard, II 51 Director; President Son of & Chief Operating Officer William Dillard Alex Dillard 46 Director; Executive Son of Vice President William Dillard Mike Dillard 44 Director; Executive Son of Vice President William Dillard H. Gene Baker 57 Vice President None G. Kent Burnett 51 Vice President None Drue Corbusier 49 Director; Vice President Daughter of William Dillard James E. Darr, Jr. 53 Senior Vice President; None Secretary and General Counsel David M. Doub 49 Vice President None John A. Franzke 64 Vice President None James I. Freeman 46 Director; Senior Vice None President; Chief Financial Officer Randal L. Hankins 45 Vice President None T. R. Gastman 66 Vice President None Bernard Goldstein 63 Vice President None Roy J. Grimes 58 Vice President None Harry D. Passow 56 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 238 stores in operation with gross square footage of 37,300,000. The Company owned or leased from a wholly-owned subsidiary a total of 173 stores with 27,400,000 square feet. The Company leased 65 stores from third parties which totalled 9,900,000 square feet. For additional information with respect to the Registrant's properties and leases, reference is made to information contained on page 19 under the heading "Dillard's Locations," and Notes 4, 9 and 10, "Notes to Consolidated Financial Statements," on pages 35, 37 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 page 40 of the Report, which information is incorporated herein by reference. As of March 29, 1996, there were 6,638 record holders of the Company's Class A Common Stock and 9 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 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 27 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 28 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 pages 4 through 6 under the heading "Nominees for Election as Directors" 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 8 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 - February 3, 1996 and January 28, 1995 Consolidated Statements of Income - Fiscal years ended February 3, 1996, January 28, 1995 and January 29, 1994 Consolidated Statements of Stockholders' Equity - Fiscal years ended February 3, 1996, January 28, 1995 and January 29, 1994 Consolidated Statements of Cash Flows - Fiscal years ended February 3, 1996, January 28, 1995 and January 29, 1994 Notes to Consolidated Financial Statements - Fiscal years ended February 3, 1996, January 28, 1995 and January 29, 1994 (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 (Exhibit 10(d) to Form 10-K for the fiscal year ended January 28, 1995 in 1-6140) 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 February 3, 1996 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors ____________ * 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 /s/ James I. Freeman Date May 2,1996 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. /s/William Dillard /s/Drue Corbusier William Dillard Drue Corbusier Chairman and Chief Executive Vice President and Director Officer (Principal Executive Officer) /s/Calvin N. Clyde, Jr. /s/Robert C. Connor Calvin N. Clyde, Jr. Robert C. Connor Director Director /s/Will D. Davis /s/Alex Dillard Will D. Davis Alex Dillard Director Executive Vice President and Director /s/Mike Dillard /s/William Dillard, II Mike Dillard William Dillard, II Executive Vice President and President and Chief Operating Director Officer and Director /s/James I. Freeman /s/William H. Sutton James I. Freeman William H. Sutton Senior Vice President and Chief Director Financial Officer and Director /s/John Paul Hammerschmid t /s/William B. Harrison, Jr. John Paul Hammerschmidt William B. Harrison, Jr. Director Director /s/J. M. Hessels /s/John H. Johnson J. M. Hessels John H. Johnson Director Director /s/E. Ray Kemp E. Ray Kemp Director Date May 2, 1996 INDEPENDENT AUDITOR'S 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 February 3, 1996 and January 28, 1995, and for each of the three years in the period ended February 3, 1996, and have issued our report thereon dated March 4, 1996; such consolidated financial statements and report (which report includes an explanatory paragraph relating to a change in accounting for the impairment of long-lived assets and for long-lived assets to be disposed of) are included in your 1995 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 whole, presents fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP New York, New York March 4, 1996 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 February 3, 1996: $15,307 52,522 708 (1) 49,009 (2) $19,528 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 (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 (Exhibit 10(d) to Form 10-K for the fiscal year ended January 28, 1995 in 1-6140) 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 February 3, 1996 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors __________________ * Incorporated herein by reference as indicated. EX-11 2 EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Year Ended February 3, January 28, January 29, 1996 1995 1994 Average shares outstanding 113,046,620 112,999,406 112,749,923 Net effect of dilutive stock options based on the treasury stock method using average market price 97,222 14,592 58,339 Total 113,143,842 113,013,998 112,808,262 Net income $167,183,500 $251,790,500 $241,133,700 Less preferred dividends (22,000) (22,000) (22,000) Income available to common shares $167,161,500 $251,768,500 $241,111,700 Per share $1.48 $2.23 $2.14
EX-12 3 EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (DOLLAR AMOUNTS IN THOUSANDS) Fiscal Year Ended FEBRUARY 3, JANUARY 28, JANUARY 29, JANUARY 30, FEBRUARY 1 1996 1995 1994 1993 1992 Consolidated pretax income $269,653 $406,110 $399,534 $375,330 $322,157 Fixed charges (less capitalized interest) 139,666 145,921 152,568 142,857 128,891 EARNINGS $409,319 $552,031 $552,102 $518,187 $451,048 Interest $120,054 $124,282 $130,915 $121,940 $109,386 Capitalized interest 3,567 2,545 1,882 1,646 3,574 Interest factor in rent expense 19,612 21,639 21,653 20,917 19,505 FIXED CHARGES $143,233 $148,466 $154,450 $144,503 $132,465 Ratio of earnings to fixed charges 2.86 3.72 3.57 3.59 3.41
EX-13 4 Dillard * The Corporation Founded in 1938 by William Dillard, Dillard Department Stores, Inc. is a regional group of traditional department stores offering a distinctive mix of name brand and private label merchandise. With everyday pricing and special emphasis on fashion apparel and home furnishings, Dillard's appeals 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. To Our Stockholders: Sales for 1995 were $5.9 billion, a 7% increase over last year's sales of $5.5 billion. Fiscal 1995 included 53 weeks. On an equivalent 52 week basis, sales rose 5%. Sales in comparable stores increased by 2% for the year on a comparable 52 week basis. Net income was $167.1 million (after a $78.5 million charge for the impairment of assets) versus $251.8 last year. Net income per share was $1.48 (after impairment charges of $.69 per share) versus $2.23 last year. As discussed in note 2 to the financial statements, the company recorded a non-cash after tax charge of $78.5 million for the impairment of long-lived assets. As a result of a new accounting standard issued in 1995, we evaluated our investment in long-lived assets on an individual store basis and determined that, based upon historic operating results and operating projections, the property and equipment at several stores was impaired. During 1995, we opened 11 new stores, two of which were replacement stores. These stores were located in Brandon, Florida; Clarksville, Indiana; Louisville, Kentucky (2); Greenville, South Carolina; Colorado Springs, Colorado; High Point, North Carolina; Pembroke Pines, Florida; Sanford, Florida; Austin, Texas; and Tampa, Florida. These new stores, along with our remodeled and expanded stores added 2,000,000 square feet to our retail space. At the end of 1995, we operated 238 stores in 23 states. Our store opening schedule for 1996 is the most aggressive in the history of the company. We plan to open 16 new stores (one of which will be a replacement store). These new stores, along with the remodeled and expanded stores, will add 3,000,000 square feet to our store base. Our balance sheet remains strong. Our long-term debt to total capitalization ratio dropped to 32.2% at the end of 1995 compared to 34.1% at the end of 1994. We are poised for growth should the right opportunity present itself. In March 1996, we announced the extensive realignment of our operating divisions along geographic and climatic lines. Through this realignment, two of our operating divisions were merged into the remaining five divisions. We are excited about this restructuring and feel that it will not only enhance efficiency and productivity, but will result in improved management of our entire merchandising operation. William Dillard Chairman of the Board and Chief Executive Officer March 30, 1996 In March 1996, the company announced an extensive realignment of operating divisions along geographic and climatic lines. Through this restructuring, two of Dillard's operating divisions were merged into the remaining divisions. Approximately 83 of the company's 244 stores were affected. The primary objective of the reorganization was to enhance Dillard's overall merchandising effort by improving company efficiency and productivity. An important ancillary benefit of the move was the cost savings that will result. However, the savings, while significant, were not the driving force behind the realignment. As Alex Dillard, executive vice president, said at the time of the announcement, the move will "allow us to better serve our customers." Because of these changes, managers will acquire greater authority over retailing operations. The company is confident that bringing their broad range of experience to bear on today's diverse marketing challenges will reap substantial rewards in enhanced service and sales. Specifically, the Cleveland divisional buying office will be merged into the St. Louis office, and the San Antonio divisional buying offices will be assimilated by the Tampa and Fort Worth offices. In addition, the Fort Worth division will now direct all stores in Texas; the Phoenix division will take in all Colorado stores; and the Little Rock division will absorb all stores in Oklahoma. The resultant geographic shift in responsibilities will serve to streamline merchandising operations and enable managers to concentrate on retailing areas at which they have demonstrated a high degree of success. It will also promote numerous efficiencies in ordering. Dillard's, as a result of the move, will remain one of the lowest cost operators in the retail industry. For almost sixty years now, the Dillard's philosophy has remained constant: to provide our customers with the absolute best value for their money. In recent years, we have achieved this goal through an aggressive merchandise mix of name brands and private labels. At Dillard's, respect for our customers is paramount. Building enduring relationships with customers has, in large measure, accounted for our steady growth and continued financial success. Experience has shown that we can best earn their trust by always emphasizing value. This commitment led Dillard's in 1990 to introduce our private label, Roundtree & Yorke men's fashions. Our strategy was to establish exclusive brands that compared with, or exceeded, the quality of national brands. To a degree, this was in response to recent trends indicating that today's sophisticated consumers are increasingly less willing to pay inflated prices for national brands. Where national brands have abdicated their value role, Dillard's exclusive brands have been established. During 1995, Dillard's private label program grew substantially. After only five years, the program today represents one of the fastest-growing segments of our business. The increasing importance of private label in the Dillard's merchandise balance has produced a positive impact on overall profitability. While other retailers emphasize private labels in their merchandise mix, the Dillard's approach is uniquely different. Quality drives all. Our objective is to develop brand equity in Dillard's exclusives. Much of the success of our program is due to the fact that Dillard's chooses to deal directly with manufacturers. (Design consultants are utilized on as-needed basis.) Building partnerships with proven manufacturers, wherever in the world they may be headquartered, is a key element to our program. Today the Dillard's private label network includes the products of numerous vendors from many countries all around the globe. This direct-to-the-manufacturer approach lowers costs by eliminating middlemen, enhances quality control and allows for predictability in inventory. Further, this arrangement enables Dillard's to deliver intrinsic value back to the customer. Value, not price, is what sets Dillard's apart. And while this strategy may have a longer-term payoff, the rewards are already proving very substantial. The Dillard's private label program is comprehensive throughout the company's merchandise mix-including men's, women's and children's fashions; home furnishings; and accessories. Eighty percent of Dillard's belts, for example, now carry our highly profitable Roundtree & Yorke brand. Among Dillard's successful exclusive label fashion introductions are: Cypress Links, Lawton Harbor, Oak Creek, Roundtree & Yorke and St. Durand (men's fashions); Bechamel, Cabernet, Copper Key, Preston & York and Westbound (women's fashions); Class Club (children's); Brioso and Simply Comfort (shoes). It is important to note, however, that Dillard's marketing emphasis remains heavily weighted toward national brands. While private labels allow for many distinct advantages in the company's merchandising mix, national brands will continue to occupy the dominant position in Dillard's retailing strategy. Financially, the private label program presents numerous benefits to Dillard's. It permits greater control over the company's gross margin. It enables us to extend selling seasons by controlling the optimum time to sell. It increases marketing flexibility by lessening dependency on vendors. In addition, Dillard's is able to sell more merchandise at regular price, without discounting. Most importantly, perhaps, is that the great success of the private label program allows Dillard's to significantly reduce the impact of fluctuating profits common to the industry; we now have more control over our destiny. In 1996 Dillard's will focus even more intently on aggressively growing our private label business. It continues to be a dynamic, evolving program with enormous potential for the future. During 1995 Dillard's took major strides in expanding our company operations by aggressively entering new territories and significantly strengthening existing markets. Due to the diminishing field of suitable acquisition candidates, Dillard's has adopted a dynamic growth strategy of new store development and expansions. In pursuit of this objective, Dillard's in fiscal 1995 opened 11 new stores, two of which are replacement stores. Important new territories, such as the Louisville and Colorado Springs areas, were introduced, while market gains in other territories, including Florida, were consolidated. For 1996, the company plans to open 16 stores, the most the company has ever unveiled in a single year. Vital new markets, such as Denver and Atlanta, will be developed for the company in the coming year. Advances in technology have brought about significant savings in time and expense of new store construction. Elevators and escalators, for example, can be totally assembled off-site and installed at new stores. Thanks to these and similar economies, the average building time now stands at 11 months, down almost 45 days from five years ago. New Stores Opened - 1995 February, Brandon, FL - Brandon Town Center -- 200,000 sq. ft. March, Clarksville, IN - Green Tree Mall -- 140,000 sq. ft. March, Louisville, KY - Mall St. Matthews -- 230,000 sq. ft. April, Greenville, SC - Haywood Mall -- 220,000 sq. ft. (replacing 125,000 sq. ft.) August, High Point, NC - Oak Hollow Mall -- 148,000 sq. ft. August, Pembroke Pines, FL - Pembroke Lakes Mall -- 150,000 sq. ft. August, Colorado Springs, CO - Citadel Crossing -- 180,000 sq. ft. August, Louisville, KY - Jefferson Mall -- 90,000 sq. ft. September, Sanford, FL - Seminole Town Center -- 210,000 sq. ft. October, Austin, TX - Lakeline Mall -- 210,000 sq. ft. November, Tampa, FL - University Square -- 180,000 sq. ft. (replacing 125,000 sq. ft.) New Stores To Be Opened - 1996 January, Naples, FL - Coastland Mall -- 180,000 sq. ft. (replacing 80,000 sq. ft.) February, Winter Haven, FL - East Ridge Center -- 126,000 sq. ft. February, Henderson, NV - Galleria at Sunset -- 200,000 sq. ft. March, El Paso, TX - Bassett Shopping Center -- 196,000 sq. ft. March, Sarasota, FL - Sarasota Square -- 100,000 sq. ft. March, Sugar Land, TX - First Colony -- 200,000 sq. ft. March, Alpharetta, GA - North Point -- 250,000 sq. ft. May, Columbia, SC - Columbia -- 180,000 sq. ft. July, Albuquerque, NM - Cottonwood Mall -- 180,000 sq. ft. September, Denver, CO - Park Meadows Mall -- 240,000 sq. ft. September, Bowling Green, KY - Greenwood Mall -- 122,000 sq. ft. October, Ocoee, FL - West Oaks -- 200,000 sq. ft. October, Niles, OH - Eastwood Mall -- 120,000 sq. ft. October, Strongville, OH - South Park -- 200,000 sq. ft. November, Vero Beach, FL - Indian River -- 127,000 sq. ft. November, Spartanburg, SC - West Gate -- 150,000 sq. ft. Stores Expanded And Remodeled - 1995 January, Lake Jackson, TX - Brazos Mall -- A net expansion of 32,000 sq. ft. March, Paducah, KY - Kentucky Oaks Mall -- A net expansion of 40,000 sq. ft. August, Memphis, TN - Oak Court Mall -- A net expansion of 48,000 sq. ft. October, St. Louis, MO - Chesterfield Mall -- A net expansion of 55,000 sq. ft. November, Boardman, OH - Southern Park -- A net expansion of 52,000 sq. ft. November, Charlotte, NC - Eastland -- A net expansion of 41,000 sq. ft. Stores To Be Expanded And Remodeled - 1996 February, Las Vegas, NV - The Meadows -- 56,000 sq. ft. August, Tulsa, OK - Promenade -- 74,000 sq. ft. August, Fayetteville, AR - Northwest -- 100,000 sq. ft. Management William Dillard Chairman of the Board and 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 and General Counsel Vice Presidents W.R. Appleby, II Gregg Athy H. Gene Baker Jan E. Bolton Michael Bowen Joseph P. Brennan G. Kent Burnett Larry Cailteux Wynelle Chapman Neil Christensen Drue Corbusier Daniel Demicell David M. Doub Richard Eagan Robert Edwards John A. Franzke T.R. Gastman Bernard Goldstein Roy J. 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 Steven K. Nelson Steven T. Nicoll Harry D. Passow M.E. Ritchie, Jr. Richard Roberds James Schatz Linda Sholtis Burt Squires Joseph W. Story Ralph Stuart David Terry Richard B. Willey Board of Directors William Dillard Chairman of the Board and 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 and Chief Operating Officer Dillard Department Stores James I. Freeman Senior Vice President and 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 Intl. 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 Fort Worth Drue Corbusier Chairman H. Gene Baker President Gregg Athy Vice President, Merchandising Wynelle Chapman Vice President, Merchandising Gaston Lemoine Vice President, Stores Anthony Menzie Vice President, Stores Richard Roberds Vice President, Stores James Schatz 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 Richard B. Willey Vice President, Stores Ken Eaton Vice President, Sales Promotion Phoenix G. Kent Burnett Chairman Bernard Goldstein President Joseph P. Brennan Vice President, Merchandising Robert G. McGushin Vice President, Stores Robert E. Baker Vice President, Sales Promotion St. Louis Roy J. Grimes Chairman Harry D. Passow President Daniel Demicell Vice President, Merchandising Mark Killingsworth Vice President, Merchandising Larry Cailteux Vice President, Stores Neil Christensen Vice President, Stores Richard Eagan Vice President, Stores David Kolmer Vice President, Stores Howard Hall Vice President, Sales Promotion Tampa T.R. Gastman Chairman David M. Doub President W.R. Appleby, II Vice President, Stores Robert Edwards Vice President, Stores Steven T. Nicoll Vice President, Stores Linda Sholtis Vice President, Stores Louise Platt Vice President, Sales Promotion Table of Selected Financial Data Dillard Department Stores, Inc. And Subsidiaries (In thousands of dollars, except per share data) 1995* 1994 1993 1992 1991 Net Sales $5,918,038 $5,545,803 $5,130,648 $4,713,987 $4,036,392 Percent Increase 7% 8% 9% 17% 12% Cost of Sales 3,893,786 3,614,628 3,306,757 3,043,438 2,565,904 Percent of Sales 65.8% 65.2% 64.4% 64.5% 63.6% Interest and Debt Expense 120,054 124,282 130,915 121,940 109,386 Income Before Taxes 269,653 (a) 406,110 399,534 375,330 322,157 Income Taxes 102,470 154,320 158,400 138,900 116,000 Net Income 167,183 (a) 251,790 241,134 236,430 206,157 Per Common Share ** Income 1.48 2.23 2.14 2.11 1.84 Dividends 0.12 0.10 0.08 0.08 0.07 Book Value 21.91 20.55 18.42 16.28 14.19 Average Number of Shares Outstanding ** 113,143,842 113,013,998 112,808,262 112,292,575 111,832,758 Accounts Receivable - Total 1,123,103 1,117,411 1,111,744 1,106,010 1,004,496 Merchandise Inventories 1,486,045 1,362,756 1,299,944 1,178,562 1,052,683 Property and Equipment 2,024,342 1,960,922 1,892,054 1,662,181 1,318,027 Total Assets 4,778,535 4,577,757 4,430,274 4,107,114 3,498,506 Long-term Debt 1,157,864 1,178,503 1,238,293 1,381,676 1,008,967 Capitalized Lease Obligations 20,161 22,279 31,621 32,381 29,489 Deferred Income Taxes - Total 248,468 302,801 284,981 178,311 143,463 Stockholders' Equity 2,478,327 2,323,567 2,081,647 1,832,018 1,583,475 Number of Employees - Average 40,312 37,832 35,536 33,883 32,132 Gross Square Footage (in thousands) 37,300 35,300 34,900 33,200 29,100 Number of Stores Opened 9 7 10 11 10 Acquired 0 0 0 12 7 Closed 0 5 1 3 5 Total - End of Year 238 229 227 218 198 * 53 Weeks ** Restated 3 for 1 stock split (a) Includes Impairment charges of $126.6 million before taxes ($78.5 million after tax). Table of Selected Financial Data Dillard Department Stores, Inc. And Subsidiaries (In thousands of dollars, except per share data) 1990 1989* 1988 1987 1986 Net Sales $3,605,518 $3,049,062 $2,558,395 $2,206,347 $1,851,423 Percent Increase 18% 19% 16% 19% 16% Cost of Sales 2,287,891 1,926,971 1,636,861 1,398,808 1,179,157 Percent of Sales 63.5% 63.2% 64.0% 63.4% 63.7% Interest and Debt Expense 97,032 91,836 80,979 64,179 47,912 Income Before Taxes 280,778 227,892 172,529 155,223 131,858 Income Taxes 98,000 79,800 58,700 64,000 57,400 Net Income 182,778 148,092 113,829 91,223 74,458 Per Common Share ** Income 1.67 1.45 1.18 0.94 0.78 Dividends 0.07 0.06 0.05 0.05 0.04 Book Value 12.31 10.23 7.80 6.67 5.77 Average Number of Shares Outstanding ** 109,351,914 101,890,272 96,655,737 96,571,272 95,078,094 Accounts Receivable - Total 932,544 759,803 654,333 605,299 472,639 Merchandise Inventories 889,333 716,054 527,931 500,831 385,509 Property and Equipment 1,066,562 897,847 787,210 694,991 513,421 Total Assets 3,007,979 2,496,277 2,067,517 1,888,033 1,427,639 Long-term Debt 839,490 739,597 620,956 594,773 400,319 Capitalized Lease Obligations 31,284 32,900 25,157 26,443 13,695 Deferred Income Taxes - Total 115,854 108,426 128,565 125,828 116,549 Stockholders' Equity 1,364,885 1,094,721 752,178 643,386 556,617 Number of Employees - Average 31,786 26,304 23,114 21,168 18,412 Gross Square Footage (in thousands) 26,600 23,500 20,800 18,500 15,600 Number of Stores Opened 4 3 7 6 8 Acquired 23 19 4 17 11 Closed 3 6 0 3 5 Total - End of Year 186 162 146 135 115 * 53 Weeks ** Restated 3 for 1 stock split (a) Includes Impairment charges of $126.6 million before taxes ($78.5 million after tax).
Management's Discussion and Analysis of Financial Condition and Results of Opertations Sales Sales for 1995 increased 7% over the prior year. The 1995 fiscal year had 53 weeks. The sales increases for the past three years on a comparable 52 week basis have been: 1995 1994 1993 Sales Increase 5% 8% 9% Comparable store sales increases by quarter for the past three years on a comparable 13 week basis have been: 1995 1994 1993 First Quarter 1% 7% 3% Second Quarter 4 4 4 Third Quarter 2 5 3 Fourth Quarter 3 4 3 Year 2 5 3 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. The slower sales gains experienced in 1995 reflect the challenges of a difficult environment for apparel retailers. Management believes that the majority of the increase in sales on a comparable 52 week basis and in comparable store sales on a comparable 13 week basis 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 three years by category and percent of total sales has been: 1995 1994 1993 Cosmetics 12.7% 12.5% 12.5% Women's & Junior's Clothing 30.0 30.4 31.1 Children's Clothing 6.5 6.7 6.7 Men's Clothing & Accessories 18.9 18.6 18.1 Shoes, Accessories & Lingerie 19.5 19.1 18.6 Home 11.7 11.9 11.7 Leased Departments .7 .8 1.3 Total 100.0% 100.0% 100.0% The Company experienced above average sales gains during 1995, 1994 and 1993 in men's clothing and in shoes. Sales gains trailed the company average in the women's and junior's clothing area in 1995 and 1994. 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 238 stores in operation. Annual gross square footage of stores in operation at year end and approximate sales per gross square foot for the past three years have been: 1995 1994 1993 Sales (000) $5,918,038 $5,545,803 $5,130,648 Gross Square Footage (000) 37,300 35,300 34,900 Sales per Square Foot $ 159 $ 157 $147 Gross Square Footage of owned properties (000) 27,400 24,500 22,700 Cost of Sales Cost of sales as a percentage of sales for the past three years has been 65.8% for 1995, 65.2% for 1994 and 64.4% for 1993. The increase in the cost of sales for 1995 over 1994 and for 1994 over 1993 was caused principally by a higher level of markdowns necessitated by competitive pressures. Expenses Expenses as a percent of sales for the past three years are as follows: 1995 1994 1993 Advertising, Selling, Administrative & General Expenses 24.3% 24.0% 24.1% Depreciation & Amortization 3.3 3.4 3.3 Rentals 1.0 1.2 1.3 Interest & Debt Expense 2.0 2.2 2.6 Advertising, selling, administrative and general expenses increased as a percentage of sales in 1995 compared to 1994. This occurred because of the slower growth rate of sales during the year as compared to prior years. 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. Depreciation and amortization decreased slightly as a percentage of sales during 1995. This was caused by the lower depreciation expense in the fourth quarter due to the write down of the carrying values of property and equipment at certain stores (see Impairment Charges below). Rentals decreased slightly as a percentage of sales during 1995 and 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 1995 and 1994 reflecting a relatively lower level of debt. Impairment Charges Effective October 29, 1995, the Company adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". The Company evaluated its investment in long-lived assets to be held and used in operations on an individual store basis and determined that, based upon the history of operating results and updated operating projections, the property and equipment at certain stores were impaired. The Company estimated the fair value of the assets at these stores based on operating projections and future discounted cash flows and recorded an after-tax charge of approximately $78.5 million ($.69 per share), which represents the amount required to write down the carrying value of property and equipment to their estimated fair value of approximately $112 million at February 3, 1996. This charge will provide a non-cash benefit in future years from reduced depreciation expense. The resulting reduction in depreciation expense for 1996 is expected to be approximately $14 million. Liquidity & Capital Resources The relevant ratios regarding liquidity and capital resources for the past three years are: 1995 1994 1993 Working Capital (000) $1,788,545 $1,765,844 $1,660,629 Current Ratio 3.1 3.3 3.1 Long-term debt to capitalization 32.2% 34.1% 37.9% Stockholders' equity to total assets 51.9% 50.8% 47.0% The ratio of long-term debt to capitalization is calculated by dividing the total amount of long-term debt and capitalized lease obligations by the sum of the total amount of long-term debt and capitalized lease obligations plus total equity. The Company continues to finance the growth of the business primarily through operating earnings. The Company sold $100 million 6.875% unsecured notes in 1995. The proceeds were used to reduce the balance of commercial paper outstanding and for general corporate purposes. The Company did not issue long-term debt during fiscal 1994 or fiscal 1993. At the end of 1995, the Company had an outstanding shelf registration for unsecured notes in the amount of $400 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 February 3, 1996, the amount of commercial paper outstanding was $125 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. No funds were borrowed under the revolving line of credit or the line of credit agreements during fiscal 1995, 1994 or 1993. During 1995, the Company generated $299.1 million in cash from operating activities, as compared to $395.3 million in fiscal 1994 and $314.5 million in fiscal 1993. The primary reason for the decrease in 1995 was an increase in merchandise inventories. 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 9% in 1995 and 5% in 1994. 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 was 4% in 1995. Capital expenditures for 1995 were $347.2 compared to $252.9 million for 1994, $316.7 million for 1993. During 1995, the Company opened 11 new stores (two of which were replacement stores) and expanded six stores. 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. For 1996, the Company plans to open 16 stores, one of which will be a replacement store. In addition, the Company plans to expand and remodel an additional three stores. At February 3, 1996, the Company is committed to incur costs of approximately $257 million to complete and equip these stores. The Company will finance these expenditures as well as its working capital requirements including required debt repayments from cash flows generated from operations and by issuing new debt to the extent necessary. Income Taxes 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 1995, 1994 and 1993. Recent Accounting Pronouncements In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS No. 123), which is effective for the Company beginning February 4, 1996. SFAS No. 123 requires expanded disclosures of stock-based compensation arrangements with employees and encourages (but does not require) compensation expense to be measured based on the fair value of the equity instrument awarded. Companies are permitted, however, to continue to apply Accounting Principals Board Option No. 25 (APB No. 25), which recognizes compensation costs based on the intrinsic value of the equity instrument awarded. The Company will continue to apply APB No. 25 to its stock-based compensation awards to employees and will disclose the required pro-forma effects on net income and earnings per share as required by SFAS No. 123. Realignment Of Operating Divisions In March 1996, the Company announced a realignment of its operating divisions along geographic and climatic lines. Through this realignment, two of the Company's operating divisions were merged into the remaining five divisions. Costs incurred during the first quarter of 1996 for this realignment were not significant, and the Company expects to recognize benefits from enhanced merchandising efforts and improved efficiency and productivity in future periods. 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 February 3, 1996 and January 28, 1995, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended February 3, 1996. 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 February 3, 1996 and January 28, 1995, and the results of their operations and their cash flows for each of the three years in the period ended February 3, 1996 in conformity with generally accepted accounting principles. As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for the impairment of long-lived assets and for long-lived assets to be disposed of effective October 29, 1995 to conform with Statement of Financial Accounting Standards No. 121. /s/ Deloitte & Touche New York, New York March 4, 1996 CONSOLIDATED BALANCE SHEETS Dillard Department Stores, Inc. and Subsidiaries Assets February 3, 1996 January 28, 1995 CURRENT ASSETS: Cash and cash equivalents $58,442 $51,095 Trade accounts receivable (net of allowance for doubtful accounts of $19,528 and $15,307) 1,103,575 1,102,104 Merchandise inventories 1,486,045 1,362,756 Other current assets 10,163 8,847 Total current assets 2,658,225 2,524,802 INVESTMENTS AND OTHER ASSETS 84,772 68,810 PROPERTY AND EQUIPMENT Land and land improvements 37,038 43,884 Buildings and leasehold improvements 1,394,551 1,261,629 Furniture, fixtures and equipment 1,728,789 1,688,161 Buildings under construction 43,552 49,469 Less accumulated depreciation and amortization (1,179,588) (1,082,221) 2,024,342 1,960,922 BUILDINGS UNDER CAPITAL LEASES - Less amortization of $23,977 and $26,799 11,196 23,223 TOTAL ASSETS $ 4,778,535 $ 4,577,757 Liabilities And Stockholders' Equity February 3, 1996 January 28, 1995 CURRENT LIABILITIES: Trade accounts payable and accrued expenses $ 559,011 $ 545,522 Commercial paper 125,310 89,906 Federal and state income taxes 51,832 65,454 Current portion of long-term debt 131,378 55,903 Current portion of capital lease obligations 2,149 2,173 Total current liabilities 869,680 758,958 LONG-TERM DEBT 1,157,864 1,178,503 CAPITAL LEASE OBLIGATIONS 20,161 22,279 DEFERRED INCOME TAXES 252,503 294,450 OPERATING LEASES AND COMMITMENTS STOCKHOLDERS' EQUITY: Preferred stock - shares issued, 4,400 440 440 Common stock, Class A - shares issued, 109,070,691 and 109,028,595 1,091 1,090 Common stock, Class B (convertible) - shares issued, 4,016,929 and 4,017,061 40 40 Additional paid-in capital 625,249 624,086 Retained earnings 1,851,507 1,697,911 Total stockholders' equity 2,478,327 2,323,567 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,778,535 $ 4,577,757 See notes to consolidated financial statements. CONSOLIDATED STATEMENTS OF INCOME Dillard Department Stores, Inc. and Subsidiaries Year Ended February 3, 1996 January 28, 1995 January 29, 1994 NET SALES, INCLUDING SALES OF LEASED DEPARTMENTS $5,918,038 $5,545,803 $5,130,648 SERVICE CHARGES, INTEREST AND OTHER INCOME 179,100 182,785 181,746 6,097,138 5,728,588 5,312,394 COSTS AND EXPENSES: Cost of sales 3,893,786 3,614,628 3,306,757 Advertising, selling, administrative and general expenses 1,436,446 1,328,353 1,239,049 Depreciation and amortization 191,805 190,299 171,181 Rentals 58,835 64,916 64,958 Interest and debt expense 120,054 124,282 130,915 Impairment charges 126,559 - - Total costs and expenses 5,827,485 5,322,478 4,912,860 INCOME BEFORE INCOME TAXES 269,653 406,110 399,534 INCOME TAXES 102,470 154,320 158,400 NET INCOME $ 167,183 $ 251,790 $ 241,134 NET INCOME PER COMMON SHARE $ 1.48 $ 2.23 $ 2.14 See notes to consolidated financial statements. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Dillard Department Stores, Inc. and Subsidiaries Common Common Additional Preferred Stock Stock Paid-in Retained Stock Class A Class B Capital Earnings Total 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 $1090 $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 Issuance of 41,964 shares under stock option, employee savings and stock bonus plans - 1 - 1,163 - 1,164 Net income - - - - 167,183 167,183 Cash dividends: Preferred stock, $5 per share - - - - (22) (22) Common stock, $.12 per share - - - - (13,565) (13,565) BALANCE, FEBRUARY 3, 1996 $440 $1,091 $40 $625,249 $1,851,507 $2,478,327 See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS Dillard Department Stores, Inc. and Subsidiaries Year Ended February 3, 1996 January 28, 1995 January 29, 1994 OPERATING ACTIVITIES: Net income $167,183 $251,790 $241,134 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 193,313 191,870 72,839 Deferred income taxes (54,332) 17,820 23,500 Impairment charges 126,559 - - Changes in operating assets and liabilities: Increase in trade accounts receivable (1,471) (5,574) (6,310) Increase in merchandise inventories (123,289) (62,812) (121,382) (Increase) decrease in other current assets (1,316) 129 (3,463) Increase in investments and other assets (23,176) (18,271) (2,309) Increase in trade accounts payable and accrued expenses and income taxes 15,653 20,342 10,532 Net cash provided by operating activities 299,124 395,294 314,541 INVESTING ACTIVITIES: Purchase of property and equipment (347,202) (252,974) (316,695) Net cash used in investing activities (347,202) (252,974) (316,695) FINANCING ACTIVITIES: Net increase (decrease) in commercial paper 35,404 (55,370) 88,655 Proceeds from long-term borrowings 100,000 - - Principal payments on long-term debt and capital lease obligations (64,155) (78,359) (136,347) Dividends paid (16,988) (10,192) (9,033) Common stock issued 1,164 1,452 17,539 Net cash provided by (used in) financing activities 55,425 (142,469) (39,186) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 7,347 (149) (41,340) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 51,095 51,244 92,584 CASH AND CASH EQUIVALENTS, END OF YEAR $ 58,442 $ 51,095 $ 51,244 See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended February 3, 1996, January 28, 1995, and January 29, 1994 Dillard Department Stores, Inc. and Subsidiaries 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. Fiscal year 1995 ended on February 3, 1996 and included 53 weeks. The fiscal years 1994 and 1993 ended on January 28, 1995, and January 29, 1994 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 finance subsidiary, Dillard Investment Co., Inc. ("DIC"), and Dillard National Bank ("DNB"), a wholly-owned subsidiary of DIC (which grants credit card loans to the Company's customers). 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. Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenues - Retail sales are recorded on the accrual basis and include leased department sales of $38.5 million, $46.2 million and $66.5 million for fiscal 1995, 1994 and 1993, respectively. Costs, Expenses and Related Balance Sheet Accounts - The retail last-in, first-out ("LIFO") inventory method is used to value merchandise inventories. At February 3, 1996 and January 28, 1995, the LIFO cost of merchandise was approximately equal to the first-in, first-out ("FIFO") cost of merchandise. 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. Capitalized interest was $3.6 million, $2.5 million and $1.9 million in fiscal 1995, 1994 and 1993, respectively. 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. For financial reporting purposes, depreciation is computed by the straight-line method over estimated useful lives: Buildings and leasehold improvements 20 - 40 years Furniture, fixtures and equipment 3 - 10 years 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. 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 113,143,842; 113,013,998 and 112,808,262 for fiscal 1995, 1994 and 1993, 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. 2. Impairment Of Long-Lived Assets In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" which provides guidance on when to assess and how to measure impairment of long-lived assets, certain intangibles and goodwill related to those assets to be held and used, and for long-lived assets and certain identifiable intangibles to be disposed of. The Company adopted this statement as of October 29, 1995. The Company evaluated its investment in long-lived assets to be held and used in operations on an individual store basis and determined that based upon the history of operating results and updated operating projections, the property and equipment at certain stores was impaired. The Company estimated the fair value of the assets at these stores based on operating projections and future discounted cash flows. As a result, the Company recorded an after-tax charge of approximately $78.5 million ($.69 per share) representing the amount required to write down the carrying value of the property and equipment to their estimated fair value of approximately $112 million at February 3, 1996. 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 5.21% to 5.52% at February 3, 1996. At February 3, 1996 and January 28, 1995, the weighted average interest rate of outstanding commercial paper was 5.46% and 5.56%, respectively. The average amount of commercial paper outstanding during fiscal 1995 was $101 million, at a weighted average interest rate of 5.98%. At February 3, 1996, 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. A commitment fee of .10% of the committed amount is paid to the banks to secure these line of credit agreements, which cannot be withdrawn except in the case of defaults by the Company or DIC. 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 rate, alternative base rate or Eurodollar rate. In addition, at February 3, 1996, 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 1993 through fiscal 1995. 4. Long-Term Debt Long-term debt consists of the following (in thousands of dollars): February 3, 1996 January 28, 1995 Unsecured notes at rates ranging from 6.875% to 9.625%, due 1996 through 2023 $ 950,000 $ 900,000 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 6.75% to 13.25% 89,242 84,406 1,289,242 1,234,406 Current portion (131,378) (55,903) $ 1,157,864 $ 1,178,503 Building, land, land improvements and equipment with a carrying value of $105.9 million at February 3, 1996 are pledged as collateral on the mortgage notes. During the year, the Company assumed mortgage notes in the amount of $16.8 million related to the purchase of three stores which were previously leased. Maturities of long-term debt over the next five years are $131.4 million, $181.1 million, $107.4 million, $108.2 million and $109.0 million. Interest and debt expense consists of the following (in thousands of dollars): Fiscal 1995 Fiscal 1994 Fiscal 1993 Long-term debt: Interest $107,572 $110,945 $118,377 Amortization of debt expense 1,400 1,404 1,484 108,972 112,349 119,861 Interest on capital lease obligations 2,241 2,324 2,831 Commercial paper interest 6,014 5,692 4,386 Other 2,827 3,917 3,837 $120,054 $124,282 $130,915 Interest paid during fiscal 1995, 1994 and 1993 was approximately $121.4 million, $123.9 million and $124.6 million, respectively. 5. Trade Accounts Payable And Accrued Expenses Trade accounts payable and accrued expenses are comprised of the following (in thousands of dollars): February 3, 1996 January 28, 1995 Trade accounts payable $376,363 $350,801 Accrued expenses: Taxes, other than income 48,644 45,211 Salaries, wages, and employee benefits 46,120 48,200 Interest 30,370 36,162 Rent 13,688 13,777 Other 43,826 51,371 $559,011 $545,522 6. Income Taxes The provision for Federal and state income taxes is summarized as follows (in thousands of dollars): Fiscal 1995 Fiscal 1994 Fiscal 1993 Current: Federal $138,102 $120,200 $118,200 State 18,700 16,300 16,700 156,802 136,500 134,900 Deferred: Federal (47,832) 16,400 20,400 State (6,500) 1,420 3,100 (54,332) 17,820 23,500 $102,470 $154,320 $158,400 A reconciliation between income taxes computed using the effective income tax rate and the federal statutory income tax rates is presented below (in thousands of dollars): Fiscal 1995 Fiscal 1994 Fiscal 1993 Income tax at the statutory Federal rate $94,379 $142,139 139,837 State income taxes net of Federal benefit 7,970 10,686 12,983 Cumulative effect of tax rate increase on deferred income tax balances - - 6,595 Other 121 1,495 (1,015) $102,470 $154,320 $158,400 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 February 3, 1996 and January 28, 1995 are as follows (in thousands): February 3, 1996 January 28, 1995 Property and equipment basis and depreciation differences $213,497 $252,253 State income taxes 28,466 31,216 Differences between book and tax basis of inventory 20,191 27,737 Other 5,606 10,769 Total deferred tax liabilities 267,760 321,975 Accruals not currently deductible (16,985) (17,113) State income taxes (2,306) (2,061) Total deferred tax assets (19,291) (19,174) Net deferred tax liability $248,469 $302,801 Deferred tax assets and liabilities are presented as follows in the accompanying consolidated balance sheets: February 3, 1996 January 28, 1995 Net deferred tax liability - noncurrent $252,503 $294,450 Net deferred tax (asset) liability - current (4,034) 8,351 Net deferred tax liability $248,469 $302,801 Income taxes paid during fiscal 1995, 1994 and 1993 were approximately $158.0 million, $131.1 million and $102.1 million, respectively. 7. Stockholders' Equity Capital stock is comprised of the following: Shares Shares Issued and Outstanding Type Par Value Authorized February 3, 1996 January 28, 1995 Preferred (5% cumulative) $100 5,000 4,400 4,400 Additional preferred $.01 10,000,000 Class A, common $.01 289,000,000 109,070,691 109,028,595 Class B, common $.01 11,000,000 4,016,929 4,017,061 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. 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. All options were granted at not less than fair market value at dates of grant. No compensation expense was recognized in connection with the granting of stock options. There were 3,946,866 options exercisable at prices ranging from $31.25 to $40.54 per share and 4,365,805 available for grant under the 1990 plan at the end of fiscal 1995. At February 3, 1996, 10,813,811 shares of Class A common stock were reserved for issuance under the 1990 stock option plan. Option transactions are summarized as follows: Shares Under Option Option Price per share Fiscal 1995 Fiscal 1994 Fiscal 1995 Fiscal 1994 Outstanding, beginning of year 4,537,521 2,630,026 $28.50 - 45.13 $33.67 - 45.13 Granted 1,990,450 1,975,680 27.25 - 28.88 28.50 - 31.25 Exercised - (12,500) - 31.25 Canceled (79,965) (55,685) 28.50 - 45.13 33.67 - 45.13 Outstanding, end of year 6,448,006 4,537,521 $27.25 - 45.13 $28.50 - 45.13 9. Capital Leases Future minimum payments under capital leases as of February 3, 1996 are as follows (in thousands of dollars): Fiscal Year Amount 1996 $ 4,129 1997 3,862 1998 3,862 1999 3,586 2000 3,224 After 2000 18,270 Total minimum lease payments 36,933 Less amount representing interest (14,623) Present value of net minimum lease payments (of which $2,149 is currently payable) $ 22,310 10. Operating Leases And Commitments Rental expense consists of the following (in thousands of dollars): Fiscal 1995 Fiscal 1994 Fiscal 1993 Operating leases: Buildings: Minimum rentals $30,034 $33,290 $33,922 Contingent rentals 13,625 13,456 11,796 Equipment 14,015 16,910 18,107 57,674 63,656 63,825 Contingent rentals on capital leases 1,161 1,260 1,133 $58,835 $64,916 $64,958 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 February 3, 1996 for all noncancelable operating leases for buildings and equipment are as follows (in thousands): Fiscal Year Amount 1996 $ 34,013 1997 29,714 1998 26,460 1999 24,624 2000 23,922 After 2000 159,537 $ 298,270 Renewal options from three to twenty-five years exist on the majority of leased properties. At February 3, 1996, the Company is committed to incur costs of approximately $257 million to complete and furnish certain stores. 11. Fair Value Disclosures 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 judgment 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 characteristics 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 February 3, 1996 and January 28, 1995 due to the short-term maturities of these instruments. The fair value of the Company's long-term debt at February 3, 1996 and January 28, 1995 was $1,431 million and $1,240 million, respectively. The carrying value of the Company's long-term debt at February 3, 1996 and January 28, 1995 was $1,289 million and $1,234 million, respectively. 12. Quarterly Results Of Operations (Unaudited) The following is a tabulation of the unaudited quarterly results of operations for the years ended February 3, 1996 and January 28, 1995 (in thousands, except per share data): Fiscal 1995 Three Months Ended April 29 July 29 October 28 February 3 Net sales $1,326,754 $1,265,066 $1,405,626 $1,920,592 Gross profit 444,826 440,120 490,10 649,205 Net income 48,379 38,633 51,025 29,146(a) Income per common share .43 .34 .45 .26 (a) Includes a $78.5 million charge for the early adoption of Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." See Note 2. 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 Annual Meeting Saturday, May 18, 1996, at 9:30 a.m., Board Room, First Commercial Bank Building Capitol and Broadway, Little Rock, Arkansas 72201 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 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 Transfer Agent And Registrar Boatmen's Trust Company, Post Office Box 14737, St. Louis, Missouri 63178 Listing New York Stock Exchange, Ticker Symbol "DDS" Stock Prices And Dividends By Quarter Sales Prices - Common Shares 1995 1994 Dividends Per Share Quarter High Low High Low 1995 1994 First $29.00 $24.00 $36.63 $32.13 $0.03 $0.02 Second 32.13 24.63 35.25 29.00 0.03 0.02 Third 33.88 27.13 33.38 25.63 0.03 0.03 Fourth 30.63 27.13 30.38 24.63 0.03 0.03 EX-21 5 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. The Higbee Company Delaware Dillard's J. B. Ivey & Company North Carolina Dillard's Dillard National Bank National Banking Dillard National Bank Association Dillard Travel, Inc. Arkansas Dillard Travel, Inc. Pulaski Realty Company Arkansas Pulaski Realty Company Dillard USA, Inc. Nevada Dillard USA, Inc. Dillard's Utah, Inc. Utah Dillard's Utah, Inc. Dillard International, Inc. Nevada Dillard International, Inc. Dillard Distribution, Inc. Arkansas Dillard Distribution, Inc. Dillard's Wyoming, Inc. Wyoming Dillard's Dillard Ticketing Systems, Inc. Arizona Dillard Ticketing Systems, Inc. EX-23 6 INDEPENDENT AUDITOR'S CONSENT We consent to the incorporation by reference 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- 64355 on Form S-3, of our reports (which express an unqualified opinion and include an explanatory paragraph relating to a change in accounting for the impairment of long- lived assets and for long-lived assets to be disposed of) dated March 4, 1996, 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 February 3, 1996. DELOITTE & TOUCHE LLP New York, New York April 25, 1996 EX-27 7
5 1000 YEAR FEB-03-1996 FEB-03-1996 58,442 0 1,103,575 19,528 1,486,045 2,658,225 3,215,126 1,179,588 4,778,535 869,680 1,178,025 0 440 1,131 2,476,756 4,778,535 5,918,038 6,097,138 3,893,786 3,893,786 0 52,522 120,054 269,653 102,470 167,183 0 0 0 167,183 1.48 1.48
-----END PRIVACY-ENHANCED MESSAGE-----