-----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, r+BWGXaNn9xUC06X1I2HOYXBoEpVF43KjeSyhfY8cjijzTlgQJKvNi2tAWu+Sft5 UIAmuPuer1lNb0GLeJvtlg== 0000028917-94-000006.txt : 19940513 0000028917-94-000006.hdr.sgml : 19940513 ACCESSION NUMBER: 0000028917-94-000006 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19940129 FILED AS OF DATE: 19940429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DILLARD DEPARTMENT STORES INC CENTRAL INDEX KEY: 0000028917 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94525434 BUSINESS ADDRESS: STREET 1: 1600 CANTRELL RD CITY: LITTLE ROCK STATE: AR ZIP: 72201 BUSINESS PHONE: 5013765200 10-K 1 DILLARD DEPT. STORES, INC. FORM 10-K 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 January 29, 1994 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 or organization) Identification 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, 1994: $3,533,984,111 Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of March 31, 1994: Class A Common Stock, no par value 108,974,658 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 29, 1994 (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 21, 1994 (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 1, inside front cover under the heading "States with Stores", and Note 2, "Notes to Consolidated Financial Statements," on pages 31 and 32 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 79 Chairman of the Board; Father of William Chief Executive Officer Dillard, II, Drue Corbusier, Alex Dillard and Mike Dillard William Dillard, II 49 Director; President Son of & Chief Operating William Dillard Officer Alex Dillard 44 Director; Executive Son of Vice President William Dillard Mike Dillard 42 Director; Executive Son of Vice President William Dillard W. R. Appleby 73 Vice President None Donald C. Bradley 59 Vice President None G. Kent Burnett 49 Vice President None Drue Corbusier 47 Vice President Daughter of William Dillard James E. Darr, Jr. 50 Vice President, None Secretary and General Counsel Laurence J. Donoghue54 Vice President None David M. Doub 47 Vice President None John A. Franzke 62 Vice President None James I. Freeman 44 Director, Vice None President, Chief Financial Officer Randal L. Hankins 43 Vice President None T. R. Gastman 64 Vice President None Bernard Goldstein 61 Vice President None Roy J. Grimes 56 Vice President None Charles K. Moore 53 Vice President None Harry D. Passow 54 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 year end there were 227 stores in operation with gross square footage of 34,900,000. The gross square footage of owned properties was 22,700,000. For additional information with respect to the Registrant's properties and leases, reference is made to information contained on the inside front cover under the heading "States with Stores", and Notes 4, 9 and 10, "Notes to Consolidated Financial Statements," on pages 32, 33, 35 and 36 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 page 37 of the Report, which information is incorporated herein by reference. As of March 31, 1994, there were 7,428 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 the inside front cover foldout and Note 2, "Notes to Consolidated Financial Statements," on pages 31 and 32 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 22 through 24, Note 1, under the heading "Recent Accounting Pronouncements," "Notes to Consolidated Financial Statements," on page 31, and Note 2, "Notes to Consolidated Financial Statements," on pages 31 and 32 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 25 through 36 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. Reference is made to the information on page 5 under the caption "Nominees for Election as Directors," pages 6 and 7, and the information under the caption "Compliance with Section 16(a) of The Securities Exchange Act of 1934" on page 12 of the Proxy Statement, which information is incorporated herein by reference. B. Executive Officers of the Registrant. Information regarding executive officers of the Company is incorporated herein by reference to Item 1 of this report under the caption "Executive Officers of the Registrant." Reference additionally is made to the information under the caption "Compliance with Section 16(a) of The Securities Exchange Act of 1934" on page 12 of the Proxy Statement, which information is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION. Reference is made to the information on pages 8 through 11 of the Proxy Statement with respect to executive compensation and compensation of directors, which information is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Reference is made to the information on page 3 under the caption "Principal Holders of Voting Securities" and page 5 under the caption "Nominees for Election as Directors" continuing through footnote 11 on page 7 of the Proxy Statement, which information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Reference is made to the information under the caption "Certain Relationships and Transactions" on pages 11 and 12 of the Proxy Statement and to the information regarding Mr. Davis under the caption "Compensation Committee Interlocks and Insider Participation" on page 10 of the Proxy Statement, which information is incorporated herein by reference. 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 are incorporated in Item 8 herein by reference to the Report: Consolidated Balance Sheets - January 29, 1994 and January 30, 1993 Consolidated Statements of Income - Fiscal years ended January 29,1994, January 30, 1993 and February 1, 1992 Consolidated Statements of Stockholders' Equity - Fiscal years ended January 29, 1994, January 30, 1993 and February 1, 1992 Consolidated Statements of Cash Flows - Fiscal years ended January 29, 1994, January 30, 1993 and February 1, 1992 Notes to Consolidated Financial Statements - Fiscal years ended January 29, 1994, January 30, 1993 and February 1, 1992 (a)(2) Financial Statement Schedules The following consolidated financial statement schedules of Dillard Department Stores, Inc. and its consolidated subsidiaries are filed pursuant to Item 14(d) (these schedules appear immediately following the signature page): Schedule V - Property, Plant and Equipment Schedule VI - Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment Schedule VIII - Valuation and Qualifying Accounts Schedule IX - Short-Term Borrowings Schedule X - Supplementary Income Statement Information 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. 11 Statement Re: Computation of Per Share Earnings 12 Statement Re: Computation of Ratio of Earnings to Fixed Charges 13 Annual Stockholders Report for the fiscal year ended January 29, 1994 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors 99 Form 11-K for the year ended December 31, 1993, 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. (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 4/28/94 /s/ James I. Freeman Date James I. Freeman, 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 capacities and on the date indicated. /s/ William Dillard /s/ Calvin N. Clyde Jr. William Dillard Calvin N. Clyde, Jr. Chairman and Chief Executive Director Officer (Principal Executive Officer) /s/ Robert C. Connor /s/ Will D. Davis Robert C. Connor Will D. Davis Director Director /s/ Alex Dillard /s/ Mike Dillard Alex Dillard Mike Dillard Executive Vice President Executive Vice President and Director and Director /s/ William Dillard II /s/ James I. Freeman William Dillard, II James I. Freeman President and Chief Operating Vice President, Chief Officer and Director Financial Officer and Director /s/ John Paul Hammerschmidt Herschel H. Friday John Paul Hammerschmidt Director Director /s/ J. M. Hessels William B. Harrison, Jr. J. M. Hessels Director Director /s/ John H. Johnson /s/ E. Ray Kemp John H. Johnson E. Ray Kemp Director Director /s/ B. Finley Vinson B. Finley Vinson Director 4/28/94 Date SCHEDULE V - PROPERTY , PLANT AND EQUIPMENT DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES (DOLLAR AMOUNTS IN THOUSANDS)
COL. A COL. B COL. C COL. D COL. E COL. F Balance Other Changes Balance at Beginning Additions Add (Deduct) at End CLASSIFICATION of Period at Cost Retirements Describe of Period Year ended January 29, 1994: Land and land improvements 45,950 (75)(1) (1,302)(6) 44,573 Buildings and leasehold improvements 966,730 55,362 (2) 69,825 (7) 1,162,120 65,370 (5) 4,833 (6) Furniture, fixtures and equipment 1,320,793 213,481 (3) (3,531)(6) 1,583,381 52,638 (7) Buildings under construction 31,420 47,927 (4) (65,370)(5) 13,977 2,364,893 316,695 122,463 2,804,051 Buildings under capital leases 53,799 5,209 (7) 59,008 2,418,692 316,695 127,672 2,863,059 (1) Refund on the Cost of property accquired by the city of Olathe, Kansas (2) Cost of additions to stores. (3) Cost of furniture, fixtures and equipment in connection with the stores discussed in (2) above, the cost of furniture and fixtures in connection with the expansion and remodel of ten stores, and general replacement of existing furniture, fixtures and equipment. (4) Construction work on ten stores opened in 1993, nine stores to open in 1994. (5) Transferring the cost of new stores . (6) Reclass of assets (7) Write-up of fixed assets in connection with application of FASB #109, "Accounting for Income Taxes". Note: The annual provisions for depreciation and amortization have been computed principally over the following ranges of lives ranges of lives for each of the three years presented: Buildings and leasehold improvements 10 to 40 years Furniture, fixtures and equipment 3 to 10 years Buildings under capital leases 20 to 30 years
SCHEDULE V - PROPERTY , PLANT AND EQUIPMENT DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES (DOLLAR AMOUNTS IN THOUSANDS)
COL. A COL. B COL. C COL. D COL. E COL. F Balance Other Changes Balance at Beginning Additions Add (Deduct) at End CLASSIFICATION of Period at Cost Retirements Describe of Period Year ended January 30, 1993: Land and land improvements 35,875 10,075 (1) 45,950 Buildings and leasehold improvements 780,594 68,386 (2) 3,000 83,156 (1) 966,730 37,594 (5) Furniture, fixtures and equipment 1,033,888 214,358 (3) 2,554 75,101 (1) 1,320,793 Buildings under construction 6,960 61,306 (4) 748 (1) 31,420 (37,594)(5) 1,857,317 344,050 5,554 169,080 2,364,893 Buildings under capital leases 39,707 14,092 (1) 53,799 1,897,024 344,050 5,554 183,172 2,418,692 (1) Cost of property, plant and equipment accquired from the Higbee Company. (2) Cost of additions to stores. (3) Cost of furniture, fixtures and equipment in connection with the stores discussed in (2) above, the cost of furniture and fixtures in connection with the expansion and remodel of twelve stores, and general replacement of existing furniture, fixtures and equipment. (4) Construction work on twelve stores opened in 1992, ten stores to open in 1993. (5) Transferring the cost of new stores. Note: The annual provisions for depreciation and amortization have been computed principally over the following ranges of lives for each of the three years presented: Buildings and leasehold improvements 10 to 40 years Furniture, fixtures and equipment 3 to 10 years Buildings under capital leases 20 to 30 years
SCHEDULE V - PROPERTY , PLANT AND EQUIPMENT DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES (DOLLAR AMOUNTS IN THOUSANDS)
COL. A COL. B COL. C COL. D COL. E COL. F Balance Other Changes Balance at Beginning Additions Add (Deduct) at End CLASSIFICATION of Period at Cost Retirements Describe of Period Year ended February 1, 1992: Land and land improvements 35,013 1,362 (1) 500 0 35,875 Buildings and leasehold improvements 609,319 55,856 (2) 1,030 116,449 (5) 780,594 Furniture, fixtures and equipment 822,362 227,443 (3) 15,917 0 1,033,888 Buildings under construction 38,827 84,582 (4) (116,449)(5) 6,960 1,505,521 369,243 17,447 0 1,857,317 Buildings under capital leases 39,707 0 0 0 39,707 1,545,228 369,243 17,447 0 1,897,025 (1) Cost of land and land improvements for exisiting stores. (2) Cost of seven store buildings acquired from Maison Blanche and additions to other stores. (3) Cost of furniture, fixtures and equipment in connection with the stores discussed in (2) above, the cost of furniture and fixtures in connection with the expansion and remodel of five stores, and general replacement of existing furniture, fixtures and equipment. (4) Construction work on ten new stores opened in 1991, four new stores to open in 1992, and the expansion of five stores in 1992. (5) Transferring the cost of ten new stores and the Phoenix distribuition center. Note: The annual provisions for depreciation and amortization have been computed principally over the following ranges of lives for each of the three years presented: Buildings and leasehold improvements 10 to 40 years Furniture, fixtures and equipment 3 to 10 years Buildings under capital leases 20 to 30 years
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AMORITIZATION OF PROPERTY, PLANT, AND EQUIPMENT DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES ( DOLLAR AMOUNTS IN THOUSANDS)
COL. A COL. B COL. C COL. D COL. E COL. F Balance Additions Other Changes Balance at Beginning Charged Add (Deduct) at End CLASSIFICATION of Period at Cost Retirements Describe of Period Year Ended January 29, 1994: Furniture, fixtures and equipment 552,730 138,454 26,200 (2) 717,384 Buildings and leasehold improvements 149,982 32,344 12,286 (2) 194,612 702,712 170,798 0 38,486 911,996 Buildings under capital leases 27,298 2,295 29,593 730,010 173,093 0 38,486 941,589 Year Ended January 30, 1993: Furniture, fixtures and equipment 424,286 107,169 3,638 24,913 (1) 552,730 Buildings and leasehold improvements 115,004 26,643 217 8,552 (1) 149,982 539,290 133,812 3,855 33,465 702,712 Buildings under capital leases 19,300 1,909 6,089 (1) 27,298 558,590 135,721 3,855 39,554 730,010 Year Ended February 1, 1992: Furniture, fixtures and equipment 345,027 90,053 10,793 424,287 Buildings and leasehold improvements 93,932 21,071 115,003 438,959 111,124 10,793 0 539,290 Buildings under capital leases 17,517 1,783 19,300 456,476 112,907 10,793 0 558,590 (1) Accumulated depreciation of the Higbee Company and trucks acquired from FWC. (2) Write-up of fixed assets in connection with application of FASB #109, "Accounting for Income Taxes".
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES (DOLLAR AMOUNTS IN THOUSANDS)
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 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 Year ended February 1, 1992: $12,036 44,198 40,422 (2) $15,811 (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).
SCHEDULE IX - SHORT-TERM BORROWINGS DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES (DOLLAR AMOUNTS IN THOUSANDS)
COL. A COL.B. COL. C. COL. D. COL. E. COL. F. Category of Weighted Maximum Amount Average Amount Weighted Average Aggregate Balance Average Outstanding Outstanding Interest Rate Short - Term at End Interest During the During the During the Borrowings of Period Rate Period Period (2) Period (3) Year Ended January 29,1994: Commercial Paper $145,276 (1) 3.06% $383,100 $138,188 3.17% Year Ended January 30, 1993: Commercial Paper $56,621 (1) 3.41% $345,780 $208,500 3.62% Year Ended February 1, 1992: Commercial Paper $240,303 (1) 4.01% $323,800 $146,238 5.40% (1) Liability is recored by Dillard Investment Co., Inc., net of related issue discount. Commercial paper matures forty-five days from date of issue. (2) The average amount outstanding during the period was computed on a weighted average based on the number of days outstanding. (3) The weighted average interest rate during the period was computed by dividing the actual interest expense by the average short-term debt outstanding.
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES (DOLLAR AMOUNTS IN THOUSANDS)
Col A. Col B. Charged to Costs and Expenses Year Ended Year Ended Year Ended ITEM January 29, 1994 January 30, 1993 February 1, 1992 Advertising $144,603 $134,542 $123,311 Amounts for all other expenses required for this schedule are not presented as such amounts are less than 1% of total sales and revenues or are disclosed in the consolidated income statement.
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. 11 Statement Re: Computation of Per Share Earnings 12 Statement Re: Computation of Ratio of Earnings to Fixed Charges 13 Annual Stockholders Report for the fiscal year ended January 29, 1994 21 Subsidiaries of the Registrant 23 Consent of Independent Auditors 99 Form 11-K for the year ended December 31, 1993, Dillard Department Stores, Inc. Retirement Plan ____________ * Incorporated herein by reference as indicated. EX-10.C 2 CORPORATE OFFICERS NON-QUALIFIED PENSION PLAN DILLARD DEPARTMENT STORES, INC. CORPORATE OFFICERS NON-QUALIFIED PENSION PLAN WHEREAS, the Board of Directors of the Company deem it in the best interests of the Company that Corporate Officers be provided pension benefits upon retirement; NOW, THEREFORE, BE IT RESOLVED: That, the following Corporate Officers Non-Qualified Pension Plan be adopted, and that it be effective from and after the date of this resolution. 1. PURPOSE. The purpose of the Corporate Officers Non-Qualified Pension Plan is to encourage continuing employment in the Company by Corporate Officers, to encourage Corporate Officers to increase their efforts in behalf of the Company and to otherwise promote the best interests of the Company. 2. QUALIFICATIONS. The following conditions must be met to qualify for pension benefits: (a) Serve as a Corporate Officer for five (5) of the last ten (10) years of employment by the Company. Corporate Officers are persons designated as such and elected by the Board of Directors, and include Chairman, Vice-Chairman, President, all Vice Presidents, Secretary and Treasurer. Mr. William Dillard is specifically excluded from this Plan. (b) Employment by the Company for a minimum of fifteen (15) years or ten (10) at age 65. Employment by the Company is defined to mean employment by Dillard's, Inc., Mayer & Schmidt, Dillard Department Stores, Inc., or any subsidiary of the above corporations after acquisition thereof. 3. PENSION BENEFITS. Annual pension benefit will be an amount equal to the greater of (1) 1-1/2% of the average annual base salary for the last five years of employment multiplied by the total years of employment or (2) 1-2/3% of the average annual base salary for the last five years of employment multiplied by the total years of employment less 58% of the individual's primary FICA benefit. Pension benefits will be paid 1/12 of annual benefit on the first day of each month following retirement. On the third anniversary of the officer's retirement the annual benefit will be adjusted for the increase in an appropriate Consumer Price Index, and each third year anniversary thereafter. 4. RETIREMENT DATE. The normal retirement date will be at age 65. Years of service and pension benefits will not continue to accrue past age 65. 5. DIS-QUALIFICATION. An otherwise qualified person will be disqualified from drawing pension benefits under the following circumstances: (a) Dismissal for dishonesty or criminal offense against the Company. (b) Resignation or termination for the purpose or with result or intent to accept employment or be employed in a management position with a competitive or comparable business to the Company. 6. EARLY RETIREMENT. After the required minimum years of employement (15 years), early retirement may be requested by an officer or by the Company after age 55. Upon early retirement, the annual pension benefit will be reduced by 2-1/2% for each year between the officer's attained age and his 65th birthday. 7. EARLY RETIREMENT - DISABILITY. After the required minimum years of employment (15 years), early retirement may be granted for disability. After establishing Social Security Benefits for Disability, the pension benefit would not be reduced for age under 65. 8. DEATH BENEFITS. In the event of death prior to qualification for normal retirement, no benefits are vested to the officer or his beneficiary. In the event of death after retirement or qualification for normal retirement, the officer's beneficiary will receive the monthly benefit each month until the fifth (5th) anniversary of the officer's retirement or qualification for normal retirement. EX-11 3 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Year Ended January 29, January 30, February 1, 1994 1993 1992
Average shares outstanding 112,749,923 111,878,212 111,242,316 Net effect of dilutive stock options based on the treasury stock method using average market price 58,339 414,363 590,442 Total 112,808,262 112,292,575 111,832,758 Net income $241,133,700 $236,430,300 $206,156,800 Less preferred dividends (22,000) (22,000) (22,000) Income available to common shares $241,111,700 $236,408,300 $206,134,800 Per share $2.14 $2.11 $1.84
EX-12 4 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (DOLLAR AMOUNTS IN THOUSANDS) Fiscal Year Ended JANUARY 29, JANUARY 30, FEBRUARY 1, FEBRUARY 2, FEBRUARY 3, 1994 1993 1992 1991 1990*
Consolidated pretax income $399,534 $375,330 $322,157 $280,778 $227,892 Fixed charges (less capitalized interest) 152,604 142,892 128,925 115,125 107,782 EARNINGS $552,138 $518,222 $451,082 $395,903 $335,674 Interest $130,915 $121,940 $109,386 $97,032 $91,836 Preferred stock dividends 36 35 34 34 34 Capitalized interest 1,882 1,646 3,574 1,928 1,504 Interest factor in rent expense 21,653 20,917 19,505 18,059 15,912 FIXED CHARGES $154,486 $144,538 $132,499 $117,053 $109,286 Ratio of earnings to fixed charges 3.57 3.59 3.40 3.38 3.07
EX-13 5 ANNUAL STOCKHOLDERS REPORT FOR 1/29/94 Table of Selected Financial Data Dillard Department Stores, Inc. And Subsidiaries (In thousands of dollars, except per share data)
1993 1992 1991 1990 1989* 1988 Net Sales $5,130,648 $4,713,987 $4,036,392 $3,605,518 $3,049,062 $2,558,395 Percent Increase 9% 17% 12% 18% 19% 16% Cost of Sales 3,306,757 3,043,438 2,565,904 2,287,891 1,926,971 1,636,861 Percent of Sales 64.4% 64.5% 63.6% 63.5% 63.2% 64.0% Interest and Debt Expense 130,915 121,940 109,386 97,032 91,836 80,979 Income Before Taxes 399,534 375,330 322,157 280,778 227,892 172,529 Income Taxes 158,400 138,900 116,000 98,000 79,800 58,700 Net Income 241,134 236,430 206,157 182,778 148,092 113,829 Per Common Share ** Income 2.14 2.11 1.84 1.67 1.45 1.18 Dividends 0.08 0.08 0.07 0.07 0.06 0.05 Book Value 18.42 16.28 14.19 12.31 10.23 7.80 Average Number of Shares Outstanding ** 112,808,262 112,292,575 111,832,758 109,351,914 101,890,272 96,655,737 Accounts Receivable - Total 1,111,744 1,106,010 1,004,496 932,544 759,803 654,333 Merchandise Inventories 1,299,944 1,178,562 1,052,683 889,333 716,054 527,931 Property and Equipment 1,892,054 1,662,181 1,318,027 1,066,562 897,847 787,210 Total Assets 4,430,274 4,107,114 3,498,506 3,007,979 2,496,277 2,067,517 Long-term Debt 1,238,293 1,381,676 1,008,967 839,490 739,597 620,956 Capitalized Lease Obligations 31,621 32,381 29,489 31,284 32,900 25,157 Deferred Income Taxes - Total 284,981 178,311 143,463 115,854 108,426 128,565 Stockholders' Equity 2,081,647 1,832,018 1,583,475 1,364,885 1,094,721 752,178 Number of Employees - Average 35,536 33,883 32,132 31,786 26,304 23,114 Gross Square Footage (in thousands) 34,900 33,200 29,100 26,600 23,500 20,800 Number of Stores Opened 10 11 10 4 3 7 Acquired 0 12 7 23 19 4 Closed 1 3 5 3 6 0 Total - End of Year 227 218 12 186 162 146 * 53 Weeks ** Restated for 3-for-1 stock split
Table of Selected Financial Data Dillard Department Stores, Inc. And Subsidiaries (In thousands of dollars, except per share data)
1987 1986 1985 1984* 1983 Net Sales $2,206,347 $1,851,423 $1,601,357 $1,277,280 $847,485 Percent Increase 19% 16% 25% 51% 19% Cost of Sales 1,398,808 1,179,157 1,016,199 811,522 532,058 Percent of Sales 63.4% 63.7% 63.5% 63.5% 62.8% Interest and Debt Expense 64,179 47,912 44,938 37,689 23,011 Income Before Taxes 155,223 131,858 114,903 87,608 59,939 Income Taxes 64,000 57,400 48,000 38,050 25,800 Net Income 91,223 74,458 66,903 49,558 34,139 Per Common Share ** Income 0.94 0.78 0.76 0.61 0.46 Dividends 0.05 0.04 0.04 0.03 0.03 Book Value 6.67 5.77 4.14 3.41 2.45 Average Number of Shares Outstanding ** 96,571,272 95,078,094 87,619,470 81,943,728 74,077,308 Accounts Receivable - Total 605,299 472,639 387,612 333,830 195,274 Merchandise Inventories 500,831 385,509 305,781 252,239 150,829 Property and Equipment 694,991 513,421 394,189 325,736 182,921 Total Assets 1,888,033 1,427,639 1,139,414 963,294 576,364 Long-term Debt 594,773 400,319 386,070 384,661 193,034 Capitalized Lease Obligations 26,443 13,695 14,676 15,575 16,411 Deferred Income Taxes - Total 125,828 116,549 88,649 72,778 49,738 Stockholders' Equity 643,386 556,617 362,333 298,353 185,553 Number of Employees - Average 21,168 18,412 16,010 12,965 8,940 Gross Square Footage (in thousands) 18,500 15,600 13,600 12,500 8,500 Number of Stores Opened 6 8 8 3 1 Acquired 17 11 0 25 0 Closed 3 5 0 1 0 Total - End of Year 135 115 101 93 66 * 53 Weeks ** Restated for 3-for-1 stock split
Dillard's has department stores in 20 states across the United States, with a strong presence in the growing Sunbelt. States with Stores Texas 60 Florida 28 Louisiana 17 Missouri 16 Arizona 14 Ohio 14 Oklahoma 14 North Carolina 13 Tennessee 11 Kansas 9 Arkansas 7 South Carolina 6 Nebraska 4 New Mexico 4 Nevada 3 Illinois 2 Mississippi 2 Alabama 1 Iowa 1 Utah 1 Total 227 Founded by William Dillard in 1938, Dillard Department Stores is today one of the most successful retail chains in the U.S., with 227 stores in 20 states and annual sales of more than $5.1 billion. Launched as a single-store operation in Nashville, Arkansas, Dillard's through the years has established a pattern of consistent growth by building, buying, integrating, and upgrading superior store properties throughout the Southeast, Southwest, and Midwest United States. Dillard's offers a full line of fashion brand apparel and home furnishings that provide special appeal to value-conscious consumers who appreciate quality and respond to personal service. Dillard's today is a strong, family-based and -managed company with an unyielding commitment to quality merchandising,competitive pricing, efficient information systems applications, and diligent cost controls. Dillard's is traded on the New York Stock Exchange under the ticker symbol DDS. Letter to Stockholders During fiscal 1993, sales and net income before and after income taxes continued to achieve new records. Sales for 1993 totaled $5.1 billion, a 9% increase from $4.7 billion in 1992. Net income before taxes totaled $399.5 million, a 6% increase and net income after taxes totaled $241.1 million, a 2% increase. In addition, we added $250 million to our equity base, moving Dillard's future up in the ranks of the most strongly capitalized retailers. We saw tangible benefits from the programs and systems we have put in place in recent years. We achieved the cost performance objectives we set for ourselves. And, we set the stage for continued superior expense rate ratios. We believe we have put the process in place that will enable us to continue to be a retail leader in our operating expenses. Second, we are fortunate in having favorable real estate costs, the one important expense management finds most difficult to deal with. We consolidated our warehousing and distribution centers from nine to seven, at the same time equipping the centers with the finest mechanical state of efficiency that exists today. Dillard's has enjoyed record growth during the past several years. To ensure that we continue to deliver growth in the future we added 10 new stores in 1993 and expended much effort expanding and remodeling our existing stores. During the year we added 1,700,000 square feet of retail space. In management's opinion these stores will follow our normal pattern of contributing to our profits in their second and third years. Calendar 1994 includes 10 new stores all located in our existing territory. In our selection of new locations we have chosen areas in which we can be a leader in the community or where we can aspire to reasonable leadership. Our emphasis on leadership also means that we will examine attractive opportunities to strengthen our hand in markets where we already have a position. 1993 was a rewarding year in many areas of our business although some areas were disappointing. Weak ladies ready-to-wear sales resulted in a total performance that was not up to our expectations. We have addressed these special problems and, hopefully, our efforts will result in an improved performance in the coming year. We have tremendous confidence in our staff, and believe very strongly that many opportunities for growth lie before us. We invested $317 million in capital improvements last year and current plans call for additional capital expenditures of $300 million. We value the highest standards of leadership, excellence and quality in everything we do while creating mutually valuable employee and customer relationships. Exciting growth and acclaimed success give us great pride in our 36,000 associates who, with your support, have made it happen. There are no excuses for underachievement and we are convinced that to correct our faults is possible. We and our staff are driven to continually improve. /s/ William Dillard William Dillard Chairman of the Board and Chief Executive Officer March 21, 1994 The Patterns of Our Growth Over the past 56 years, Dillard's has evolved from a single-store operation into a national retail industry leader. In that time, enormous changes have occurred in the retailing market. Today, there are real pressures on consumer spending, industry competition is intensely fierce, and value sometimes seems like a lost commodity. Yet certain basic truths are as unshakable today as they were when Dillard's was born in 1938. Customers will seek out value. Service and quality do make a difference. And retailers who have a clear focus, an abundance of dedicated management talent, market savvy, and the courage to innovate will lead and succeed. At Dillard's, we respect these truths and have developed a unique corporate strategy that enables us to deliver against them. It contains three broad areas of emphasis: continual evolution of our merchandising philosophies, expansion through a thoughtful combination of acquisition and new store construction, and increased productivity through highly efficient operations. This three-pronged corporate strategy is our foundation for success. It has differentiated Dillard's in the market and helped our company establish a pattern of consistent growth. We believe it will keep us in the forefront of the retail industry in the years ahead. The intense battle for market share in the retailing industry today is increasingly being fought on the pricing front, with retailers adopting many different approaches to attract, maintain, and grow their customer base. Some have turned to lesser quality items or sales gimmicks to help maintain profit margins, only to find that smart consumers generally will not tolerate reduced value. Dillard's has taken a very different approach. Value Strategy Through a merchandising strategy centered on delivering high value, Dillard's has totally eliminated storewide sales promotions and instead adopted a system where we work to offer more locally competitive prices. In this way, the Company can maintain high-quality merchandise and at the same time strengthen customer loyalty. Our value strategy requires that we aggressively price our merchandise, which can put initial pressure on profit margins. However, Dillard's maintains one of the industry's lowest-cost expense structures, which helps offset margin pressures and increases the overall effectiveness of the positioning. (Further details on our operating efficiencies are covered later in this report.) In addition, we firmly believe that a long-term strategy that delivers value-based pricing and incrementally builds customer loyalty will ensure better returns in the years ahead. Early results appear to support the wisdom of this strategy. Over the three year period since completing our migration to this operating philosophy, Dillard's has gained additional market share in our major trading areas, clearly demonstrating that customers are increasingly receptive to this approach. Personalized Marketing Moving to this new position has also allowed Dillard's to redirect promotional dollars previously spent on television and general distribution sale circulars to more attractive, specialty catalogues targeted at specific customer groups. Our highly accurate mailings are based on a proprietary database that contains very specific information on customer buying habits. Using this system, we reach the right audience for each offering and avoid unnecessary mailing costs. By moving away from mass advertising and focusing instead on specialty catalogues, we believe the Company builds stronger, more personal relationships with its customers and encourages their continued patronage. Offering personal services - letters to individuals in targeted customer groups, for example, and sales representatives who know their customers' merchandise preferences ahead of time - helps make Dillard's the preferred place to shop. Brand Name Quality Dillard's has adopted a merchandise marketing strategy that has steadily moved us toward more upscale lines of merchandise, with increased emphasis on highly recognized, quality vendors. Today, we carry one of the industry's strongest lineups of merchandise aimed at middle- to upper-middle-income consumers, with an emphasis on brand names, fashion apparel, cosmetics, accessories, and home furnishings. Recognizing that our merchandise mix must appeal to changing consumer tastes, we continually refine our inventory to help boost sales and keep the Company positioned in the industry forefront. Over the past six years, for example, we have greatly expanded our cosmetics business (it now represents one of the Company's strongest units) and roughly doubled the size of our footwear department. Most important has been our emphasis on our own private label merchandise as well as exclusive label merchandise from top vendors. Effectively Managed Private Label Business The Company began emphasizing private label merchandise in 1990, when we introduced Roundtree & Yorke, a premium label in men's fashions. Sales for the Roundtree & Yorke line exceeded company projections that year, and continued to show strong gains in 1993. The Company is also expanding its exclusive label products, which incorporate the lower cost of a private label with the equity of a well-known brand name. Currently, Dillard's has exclusive label products with a number of popular vendors, and we continue to see strong sales of these products going forward. Over the past 10 years, Dillard's has more than tripled its store base, and acquisitions have historically played a major role in our corporate growth strategy. The Company has consistently succeeded in acquiring new stores and effectively integrated them into existing operations while maintaining a manageable debt load. We're proud to have one of the industry's strongest track records in this area. We have opened a total of 70 stores in the past decade, accounting for approximately 43 percent of the increase in our stores in operation during that time. Much of the growth has come from acquiring stores with low occupancy costs, where there is an opportunity to generate higher profits on lower volumes. We also buy stores that are successful, but not dominant, in their markets, and expand their operations in order to establish a position of dominance. The Company is also known for accurately assessing the fair market value of the stores we buy. We do our financial homework to ensure that Dillard's avoids overpaying on acquisitions. Strong Locations The Company continues to benefit from choosing quality locations in the Southeast, Southwest, and Midwest that can support upscale retail operations and are best suited for the challenging economic climate of the 1990s. The markets we serve were among the strongest revenue-generating performers in the country in 1993, making our geographic base one of the most attractive among U.S. retailers today. Although we have built a reputation for skillfully executing acquisitions, we have also steadfastly maintained that Dillard's will not engage in acquisitions simply for acquisitions' sake. There must be a clear strategic fit and investment value. In 1993, the Company determined that there were not any properties available for purchase at an acceptable price that would have been suitable additions to our business. However, as further acquisition opportunities present themselves, we are in a very strong financial position to pursue them, having very low borrowings and a 71 percent debt/total capitalization ratio. Increased Square Footage Our growth efforts this year were largely focused on updating and expanding our existing business. These upgrades give our prospective customers a compelling reason to shop at Dillard's. In 1993, new stores were opened in Tallahassee, Fort Lauderdale, and Stuart, Florida; Asheville, North Carolina; Columbia, South Carolina (two stores); Knoxville, Tennessee (two stores); Glendale, Arizona; and Salt Lake City, Utah. Stores were remodeled and expanded in Mentor, Ohio; Victoria, Texas; and Albuquerque, New Mexico, supporting our drive to aggressively increase square footage. During the year we opened an additional 1.75 million square feet of floor space, and also added 269,000 square feet through remodels and expansion combined with some closures for a net total of 1.7 million additional square feet, a 5 percent increase from 1993. As part of our growth strategy, Dillard's believes in owning rather than leasing store properties. Today we own 65 percent of our stores. Despite the up-front costs associated with buying properties, we feel strongly that direct ownership over the long term results in lower expenses for the Company and gives us much more flexibility and control in developing Dillard's stores that offer customers a pleasant shopping experience. As a means of expense control, we intend to continue owning more stores in the future. By carefully moving into the right markets at the right time, and maximizing our presence in existing markets, we will continue to grow Dillard's at a steady pace. Dillard's is constantly looking for ways to provide more streamlined and efficient operations. Through the years we have developed a low cost structure that has significantly reduced our operating expenses, which in turn supports our merchandising and expansion strategies. Sophisticated Computer Systems in Place The foundation of this efficient structure is an advanced information system that enables Dillard's to monitor merchandise flows and maximize our in-stock positions. Using this system, we know exactly when our peak selling periods are, based on data gathered from the point of sale, and we can determine our labor schedules around the peaks to provide better service and avoid wasting resources. Data from the point of sale also keeps our managers aware of exactly which lines of merchandise are leaving the store. This helps keep our shelves fully stocked, keeps us buying only the goods that our customers want, and helps us spot early buying trends. Training Technology Dillard's also uses information technology to provide our sales associates with the highest quality training. We regularly broadcast training programs over our own private satellite network, simultaneously reaching our training sites throughout the country. These broadcasts are often conducted in tandem with our merchandise vendors. This high-tech approach allows our sales representatives to instantaneously receive the latest information on products and key company developments. It also significantly reduces the time and expense ordinarily incurred with site visits. In addition, Dillard's uses the satellite network to train managers on other aspects of our information systems, so that our technology improvements are more widely understood and used by our people. Besides providing top-notch training, we also keep our sales associates highly motivated through performance-based compensation and employee stock ownership programs. Together, these factors contribute to our having one of the highest levels of employee productivity in the retail industry, with sales per employee of approximately $144,000 per year in contrast to an industry average of $95,000-$100,000 per year. Efficient Distribution Dillard's operates seven state-of-the-art, highly automated distribution centers that have dramatically reduced our distribution costs and strengthened our low cost position. On average, merchandise at Dillard's takes eight days to complete the distribution process from the vendor to the store - a substantial improvement from the 13-day average of less than two years ago. Within our distribution centers, we pride ourselves on a two-day turnaround. As powerful as these improvements have been, we see additional opportunities for cost-savings through more advanced technological applications. We are, for example, testing a scanning system that would allow us to simultaneously scan external packaging bar codes and package contents to ensure more error- free order acceptance. Flexible Organization Dillard's is also differentiated by a corporate structure that combines the strengths of centralized and decentralized functions. Centralized, highly computerized functions such as credit, accounting, legal, data processing, and real estate offer obvious economies of scale and are managed through our corporate headquarters in Little Rock, Arkansas. Centralizing these operations also encourages easier and more efficient integration of new stores into our existing store base. We typically convert our acquired stores to the Company's internal computer systems almost immediately, which leads to better inventory management, distribution efficiencies and expense controls. At the same time, having certain functions decentralized has proven extremely beneficial in the markets we serve. For example, decentralized merchandising at the store level allows Dillard's to offer a more market-specific assortment of goods. Our merchandise buying decisions are made at the local and divisional levels - closer to the customer. This way, store managers can quickly spot trends in their areas and capitalize on them almost directly. This decentralized buying requires our sales associates and our local management teams to have a great deal of skill and an innate sense of the market. To that point, we are proud to have in place some of the finest professionals in the business. Dillard's is widely recognized as having highly skilled personnel, and through their efforts we are providing the highest quality service available in the industry - service that we believe will keep Dillard's ahead of its competition for many years to come. 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 Vice President Chief Financial Officer James E. Darr, Jr. 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 Peter Inglin Mark Killingsworth Gaston Lemoine Denise Mahaffy William Manzer 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 James Schatz Linda Sholtis Burt Squires Joseph W. Story Ralph Stuart David Terry Douglas Vance William B. Warner Ted Westmeyer Richard B. Willey Operating Divisions Cleveland Roy Grimes Chairman Peter Inglin Vice President, Merchandising William Manzer Vice President, Merchandising David Kolmer 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 Richard Roberds Vice President, Merchandising William B. Warner Vice President, Merchandising Gaston Lemoine Vice President, Stores Linda Sholtis Vice President, Stores Douglas Vance 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 Ted Westmeyer Vice President, Stores Howard Hall Vice President, Sales Promotion Board of Directors William Dillard Chairman of the Board Chief Executive Officer Calvin N. Clyde, Jr. Chairman of the Board T.B. Butler Publishing Co., Inc. Tyler, Texas Robert C. Connor Former President Union National Bank Little Rock, Arkansas Will D. Davis Partner Heath, Davis & McCalla Attorneys Austin, Texas Alex Dillard Executive Vice President Mike Dillard Executive Vice President William Dillard, II President Chief Operating Officer James I. Freeman Vice President Chief Financial Officer John Paul Hammerschmidt Retired Member of Congress Harrison, Arkansas William B. Harrison, Jr. Executive Vice President Chemical Bank New York, New York J.M. Hessels Vice Chairman of the Board of Management 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 B. Finley Vinson Chairman Emeritus First Commercial Corp. Little Rock, Arkansas Management's Discussion and Analysis of Financial Condition and Results of Operations Dillard Department Stores, Inc. and Subsidiaries Sales Sales for 1993 increased 9% over the prior year. The sales increases for the past five years on a comparable 52-week basis have been: 1993 1992 1991 1990 1989 Sales Increase 9% 17% 12% 20% 17% There were 53 weeks in the 1989 fiscal year. The sales increase for 1990 on a 53-week basis was 18%. The sales increase for 1989 on a 53-week basis was 19%. 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. During 1991, the Company acquired seven stores from Maison Blanche, opened 10 stores, replaced two stores with larger stores, and closed five stores. Comparable store sales increases by quarter for the past five years has been: 1993 1992 1991 1990 1989 First Quarter 3% 9% 9% 14% 11% Second Quarter 4 5 10 14 3 Third Quarter 3 10 5 10 9 Fourth Quarter 3 8 2 6 8 Year 3 8 6 10 8 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: 1993 1992 1991 1990 1989 Cosmetics 12.5% 12.2% 12.2% 11.9% 11.6% Women's Clothing 25.0 26.0 25.7 24.6 23.9 Lingerie and Accessories 10.1 10.3 10.4 10.7 11.1 Junior's Clothing 5.5 5.5 5.4 5.3 5.3 Children's Clothing 6.7 6.8 6.9 6.8 6.9 Men's Clothing and Accessories 18.1 17.7 17.4 17.1 16.7 Shoes 8.4 7.7 7.1 6.4 5.2 Fine Jewelry .9 1.4 1.5 1.8 2.0 Housewares 2.4 2.4 2.6 3.1 4.0 Decorative Home Fashion 5.1 5.2 5.4 6.0 6.2 Furniture, TV and Appliances 4.2 4.3 4.7 5.3 5.8 Total 100.0% 100.0% 100.0% 100.0% 100.0% The Company experienced above average sales gains during 1993 in cosmetics, men's clothing and accessories, and shoes. Sales were disappointing in the women's clothing area. Sales in fine jewelry declined significantly as the Company began de-emphasizing this area. Sales in housewares, decorative home fashion, furniture, TV and appliances continued to decline relative to total sales as the Company de-emphasized these areas. At year end there were 227 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: 1993 1992 1991 1990 1989 Sales (000) $5,130,648 $4,713,987 $4,036,392 $3,605,518 $3,049,062 Gross Square Footage(000)34,900 33,200 29,100 26,600 23,500 Sales per Square Foot $ 147 $ 142 $ 138 $ 136 $ 130 Gross Square Footage of owned properties (000)22,700 21,300 18,400 15,300 13,000 Cost of Sales Cost of sales for the past five years has been: 1993 1992 1991 1990 1989 Cost of Sales (LIFO Basis) 64.4% 64.5% 63.6% 63.5% 63.2% LIFO Charge (credit) (000) $200 $4,300 $1,100 $5,900 $(8,900) Cost of Sales (FIFO Basis) 64.4% 64.5% 63.5% 63.3% 63.5% 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: 1993 1992 1991 1990 1989 Advertising, Selling, Administrative and General 24.1% 24.3% 25.2% 25.4% 25.6% Depreciation and Amortization 3.3 2.9 2.8 2.7 2.8 Rentals 1.3 1.3 1.4 1.5 1.6 Interest and Debt Expense 2.6 2.6 2.7 2.7 3.0 During 1993 and 1992, 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 1993 and 1992. This is due to the additional depreciation of approximately $7.6 million in 1993 calculated on the increase in property and equipment required by the adoption of SFAS No. 109 (see Income Taxes) and due to a higher proportion of the Company's properties being owned rather than leased. Trade Accounts Receivable The year-to-year percentage growth in sales and accounts receivable has been: 1993 1992 1991 1990 1989 Sales 9% 17% 12% 20% 17% Accounts Receivable 1 10 8 23 16 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. The five-year compounded annual growth rate has been 14.9% for sales and 11.2% for receivables. Liquidity and Capital Resources The relevant ratios regarding liquidity and capital resources for the past five years are: 1993 1992 1991 1990 1989 Working Capital (000) $1,660,629 $1,677,378 $1,351,349 $1,191,675 $993,144 Current Ratio 3.1 3.4 2.8 2.8 2.9 Long-term debt and capital lease obligations to 61.0% 77.2% 65.6% 63.8% 70.6% stockholders' equity Stockholders' equity to 47.0% 44.6% 45.3% 45.4% 43.9% total assets Working capital, the current ratio, and the debt-to-equity ratio decreased in 1993 principally because the Company did not issue long-term debt during the year. At the end of 1993, the Company had an outstanding shelf registration for unsecured notes in the amount of $200 million. 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. 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 29, 1994, the amount of commercial paper outstanding was $145.3 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 29, 1994 and January 30, 1993, no funds were borrowed under the revolving line of credit or the line of credit agreements. During 1993, the Company generated $314.5 million in cash from operating activities, as compared to $359.4 million in fiscal 1992 and $176.3 million in fiscal 1991. The major reason for the decrease in 1993 was the Company's increase in merchandise inventories. Merchandise inventories increased by approximately 10% in 1993 over 1992. There was a 5% increase in the Company's merchandise inventories on a comparable store basis. The net cash used in investing activities was $316.7 million in 1993 compared to $355.1 million in 1992 and $331.5 million in 1991. Capital expenditures for 1993 were $316.7 million compared to $344.1 million for 1992 and $287.9 million for 1991. During 1992, the Company acquired the remaining 50% ownership in Higbee. During 1991 the Company purchased seven Maison Blanche stores for $45 million (net of debt assumed of approximately $46 million). For 1994, the Company plans to open 10 stores, two of which will be replacement stores. In addition, the Company plans to expand and remodel an additional four stores. At January 29, 1994, the Company is committed to incur costs of approximately $142 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 the year 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 1993 compared to 37% for fiscal 1992, and 36% for fiscal 1991. Independent Auditors' Report Dillard Department Stores, Inc. and Subsidiaries 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 29, 1994 and January 30, 1993, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended January 29, 1994. 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 29, 1994 and January 30, 1993, and the results of their operations and their cash flows for each of the three years in the period ended January 29, 1994 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. /s/Deloitte & Touche New York, New York February 23, 1994 Dillard Department Stores, Inc. and Subsidiaries Consolidated Balance Sheets
ASSETS January 29, 1994 January 30, 1993 Current assets: Cash and cash equivalents $51,244 $92,584 Trade accounts receivable (net of allowance for doubtful accounts of $15,214 and $15,790, respectively) 1,096,530 1,090,220 Merchandise inventories 1,299,944 1,178,562 Other current assets 8,976 5,513 Total current assets 2,456,694 2,366,879 Investments and other assets 52,110 51,553 Property and equipment (Notes 4 and 10): Land and land improvements 44,573 45,950 Buildings and leasehold improvements 1,162,120 966,730 Furniture, fixtures and equipment 1,583,380 1,320,793 Buildings under construction 13,977 31,420 Less accumulated depreciation and amortization (911,996) (702,712) 1,892,054 1,662,181 Buildings under capital leases - Less amortization of $29,593 and $27,298, respectively (Note 9) 29,416 26,501 Total assets $4,430,274 $4,107,114 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable and accrued expenses (Note 5) $529,475 $549,050 Commercial paper (Note 3) 145,276 56,621 Federal and state income taxes (Note 6) 54,011 25,805 Current portion of long-term debt (Note 4) 65,061 55,957 Current portion of capital lease obligations (Note 9) 2,242 2,068 Total current liabilities 796,065 689,501 Long-term debt (Note 4): 1,238,293 1,381,676 Capital lease obligations (Note 9) 31,621 32,381 Deferred income taxes (Note 6) 282,648 171,538 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, 108,974,658 and 108,502,743, respectively 1,090 1,085 Common stock, Class B (convertible) - shares issued, 4,017,061 and 4,019,461, respectively 40 40 Additional paid-in capital 622,634 605,100 Retained earnings 1,457,443 1,225,353 Total stockholders' equity 2,081,647 1,832,018 Total liabilities and stockholders' equity $4,430,274 $4,107,114 See notes to consolidated financial statements.
Dillard Department Stores, Inc. and Subsidiaries Consolidated Statements of Income Year Ended
January 29, 1994 January 30, 1993 February 1, 1992 Net sales, including sales of leased departments $5,130,648 $4,713,987 $4,036,392 Service charges, interest and other income 181,746 169,244 148,080 5,312,394 4,883,231 4,184,472 Costs and expenses: Cost of sales 3,306,757 3,043,438 2,565,904 Advertising, selling, administrative and general expenses 1,239,049 1,144,248 1,015,780 Depreciation and amortization 171,181 135,524 112,730 Rentals (Note 10) 64,958 62,751 58,515 Interest and debt expense (Note 4) 130,915 121,940 109,386 Total costs and expenses 4,912,860 4,507,901 3,862,315 Income before federal and state income taxes 399,534 375,330 322,157 Federal and state income taxes (Note 6) 158,400 138,900 116,000 Net income $ 241,134 $ 236,430 $ 206,157 Income per common share $ 2.14 $ 2.11 $ 1.84 See notes to consolidated financial statements.
Dillard Department Stores, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity
Additional Preferred Common Stock Paid-in Retained Treasury Stock Class A Class B Capital Earnings Stock Total Balance February 2, 1991 $440 $44,532 $1,682 $508,984 $809,295 ($48) $1,364,885 Issuance of 711,978 shares (including 54,390 treasury shares) under stock option, employee savings and stock bonus plans (net of 327,669 shares canceled) 274 15,453 48 15,775 Tax benefit from exercise of stock options 4,840 4,840 Net income 206,157 206,157 Cash dividends: Preferred stock, $5 per share (22) (22) Common stock, $.0733 per share (8,160) (8,160) 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 plan, 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 plan, 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 See notes to consolidated financial statements.
Dillard Department Stores, Inc. and Subsidiaries Consolidated Statements of Cash Flows
Year Ended January 29, 1994 January 30, 1993 February 1, 1992 Operating activities: Net income $241,134 $236,430 $206,157 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 172,839 137,008 113,837 Deferred income taxes 23,500 36,700 27,400 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 (6,310) (64,554) (68,176) Increase in merchandise inventories (121,382) (41,204) (147,305) (Increase) decrease in other current assets (3,463) 175 985 Increase in investments and other assets (2,309) (11,051) (8,010) Increase in trade accounts payable and accrued expenses and income taxes 10,532 66,023 51,389 Net cash provided by operating activities 314,541 359,423 176,277 Investing activities: Purchase of property and equipment (316,695) (344,050) (287,940) Proceeds from sale of property and equipment 3,867 1,529 Acquisition of businesses, net of cash acquired (14,922) (45,095) Net cash used in investing activities (316,695) (355,105) (331,506) Financing activities: Net increase (decrease) in commercial paper 88,655 (183,682) 57,800 Proceeds from long-term borrowings 475,000 200,000 Principal payments on long-term debt and capital lease obligations (136,347) (259,042) (111,602) Dividends paid (9,033) (6,717) (8,182) Common stock issued 17,539 21,090 20,615 Net cash (used in) provided by financing activities (39,186) 46,649 158,631 (Decrease) increase in cash and cash equivalents (41,340) 50,967 3,402 Cash and cash equivalents, beginning of year 92,584 41,617 38,215 Cash and cash equivalents, end of year $51,244 $92,584 $41,617 See notes to consolidated financial statements.
Dillard Department Stores, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended January 29, 1994, January 30, 1993 and February 29, 1992 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 1993, 1992 and 1991 ended on January 29, 1994, January 30, 1993 and February 1, 1992, 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 $66.5 million, $91.9 million and $91.3 million for fiscal 1993, 1992 and 1991, respectively. Costs, Expenses and Related Balance Sheet Accounts - The retail last-in, first-out ("LIFO") inventory method is used to value merchandise inventories, with such LIFO merchandise inventories not being carried in excess of current cost. At January 29, 1994, January 30, 1993 and February 1, 1992 the LIFO cost of merchandise inventories was approximately $13.2 million, $13 million and $7 million, respectively, less than current 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. The fair value of trade accounts receivable, which is determined by discounting the estimated future cash flows at current market rates, after consideration of credit risks and servicing costs using historical rates, approximates the carrying amount at January 29, 1994 and January 30, 1993. 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 owns and services the Company's accounts receivable. Earnings before income taxes of DIC and its subsidiary were $43.8 million, $22.8 million and $14.5 million for fiscal 1993, 1992 and 1991, respectively. Summary balance sheet information for DIC and its subsidiary is presented below (in thousands of dollars): January 29, 1994 January 30, 1993 Assets, principally accounts receivable $1,099,437 $1,095,424 Commercial paper and long-term debt 320,276 231,621 Other liabilities, principally due to the Company 623,910 735,319 Equity 155,251 128,484 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 112,808,262, 112,292,575 and 111,832,758 for fiscal 1993, 1992 and 1991, respectively. Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying amount of cash and cash equivalents approximates its fair value at January 29, 1994 and January 30, 1993 due to the short maturity of these instruments. 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 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. Reclassifications - Certain reclassifications have been made to the prior years' financial statements to conform with presentations used in fiscal 1993. 2.ACQUISITIONS 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 integrated 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. In August 1991, the Company acquired seven Maison Blanche department stores in Florida. Pursuant to the terms of the transaction, the Company paid $45 million in cash for the assets of the stores and assumed mortgages of $46.2 million. At the date of the acquisition, the seven Maison Blanche stores had assets with a fair market value of approximately $91.2 million and liabilities of $46.2 million. The acquisition was accounted for as a purchase, with the operations of the acquired Maison Blanche stores included in the Company's consolidated operations from August 5, 1991. 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 3.00% to 3.10% at January 29, 1994. At January 29, 1994, approximately $145 million in commercial paper was outstanding at a weighted average interest rate of 3.06%. The average amount of commercial paper outstanding during fiscal 1993 was $138 million, at a weighted average interest rate of 3.17%. The fair value of the Company's commercial paper borrowings at January 29, 1994 and January 30, 1993 approximates its carrying amount. At January 29, 1994, 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. Of these agreements, $200 million expire on July 14, 1994, while $300 million expire on July 14, 1996. 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 29, 1994, 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 1991 through fiscal 1993. 4.LONG-TERM DEBT Long-term debt consists of the following (in thousands of dollars): January 29, 1994 January 30, 1993 Unsecured notes at rates ranging from 7.15% to 9.875%, due 1994 through 2023 $ 950,000 $1,050,000 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 4.50% to 13.375% (1) 103,354 131,333 Industrial revenue bonds - 6,300 1,303,354 1,437,633 Current portion (65,061) (55,957) $1,238,293 $1,381,676 (1) Building, land, land improvements and equipment with a carrying value of $93.2 million at January 29, 1994 are pledged as collateral on these notes. Maturities of long-term debt over the next five years are $65.1 million, $56.1 million, $131.3 million, $181.7 million and $107.4 million. 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, mortgage notes and industrial revenue bonds). The fair value of the Company's long-term debt at January 29, 1994 and January 30, 1993, including current portion, is estimated to be approximately $1,481 million and $1,564 million, respectively. Interest and debt expense consists of the following (in thousands of dollars): Fiscal 1993 Fiscal 1992 Fiscal 1991 Long-term debt: Interest $118,377 $106,096 $ 95,198 Amortization of debt expense 1,484 1,281 1,056 119,861 107,377 96,254 Interest on capital lease obligations 2,831 2,605 2,601 Commercial paper interest 4,386 7,550 7,897 Other 3,837 4,408 2,634 $130,915 $121,940 $ 109,386 Interest paid during fiscal 1993, 1992 and 1991 was approximately $124.6 million, $111.6 million and $91.3 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 29, 1994 January 30, 1993 Trade accounts payable $351,594 $367,166 Accrued expenses: Taxes, other than income 42,015 36,684 Salaries, wages, and employee benefits 45,074 41,744 Interest 35,521 35,143 Rent 12,023 12,428 Other 43,248 55,885 $529,475 $549,050 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 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. The provision for Federal and state income taxes is summarized as follows (in thousands of dollars): Liability Method Deferred Method Fiscal 1993 Fiscal 1992 Fiscal 1991 Current: Federal $118,200 $ 92,000 $ 81,900 State 16,700 10,200 6,700 134,900 102,200 88,600 Deferred: Federal 20,400 31,900 23,900 State 3,100 4,800 3,500 23,500 36,700 27,400 $158,400 $138,900 $116,000 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 1993 Fiscal 1992 Fiscal 1991 Income tax at the statutory Federal rate $139,837 $127,612 $109,533 State income taxes net of Federal benefit 12,983 9,767 6,643 Cumulative effect of tax rate increase on deferred income tax balances 6,595 - - Other (1,015) 1,521 (176) $158,400 $138,900 $116,000 Deferred income taxes for fiscal years 1992 and 1991 are attributable to the following items (in thousands of dollars): Fiscal 1992 Fiscal 1991 Accelerated depreciation and basis differences $ 34,271 $ 25,424 Other 2,429 1,976 $ 36,700 $ 27,400 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 January 29, 1994 are as follows (in thousands): Property and equipment basis and depreciation differences $236,710 State income taxes 35,434 Differences between book and tax basis of inventory 30,559 Total deferred tax liabilities 302,703 Accruals not currently deductible (13,569) State income taxes (2,224) Other (1,929) Total deferred tax assets (17,722) Net deferred income taxes $284,981 The net deferred income taxes include the current portion of $2.3 million, at January 29, 1994, which is reported in Federal and state income taxes on the Consolidated Balance Sheets. Income taxes paid during fiscal 1993, 1992 and 1991 were approximately $102.1 million, $99.3 million and $80.1 million, respectively. 7.STOCKHOLDERS' EQUITY Capital stock is comprised of the following: Shares Issued and Outstanding Type Par Value Authorized Jan. 29, 1994 Jan. 30, 1993 Feb. 1, 1992 Preferred (5% cumulative) $100 5,000 4,400 4,400 4,400 Additional preferred $.01 10,000,000 Class A, common $.01 289,000,000 108,974,658 108,502,743 107,534,484 Class B, common $.01 11,000,000 4,017,061 4,019,461 4,037,496 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 2,272,366 options exercisable at prices ranging from $33.67 to $40.54 per share and 8,196,285 available for grant under the 1990 plan at the end of fiscal 1993. At January 29, 1994, 10,826,311 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 Aggregate Option Price Fiscal 1993 Fiscal 1992 Fiscal 1993 Fiscal 1992 (In Thousands of Dollars) Outstanding, beginning of year 1,138,666 1,676,370 $ 44,245 $ 48,748 Granted 1,528,000 1,162,080 60,356 47,674 Exercised (16,500) (1,691,489) (497) (51,838) Canceled (20,140) (8,295) (862) (339) Outstanding, end of year 2,630,026 1,138,666 $103,242 $ 44,245 9.CAPITAL LEASES Future minimum payments under capital leases as of January 29, 1994 are as follows (in thousands of dollars): Fiscal Year Amount 1994 4,899 1995 4,882 1996 4,684 1997 4,417 1998 4,141 After 1998 26,627 Total minimum lease payments 49,650 Less amount representing interest (15,787) Present value of net minimum lease payments (of which $2,242 is currently payable) $33,863 10.OPERATING LEASES AND COMMITMENTS Rental expense consists of the following (in thousands of dollars): Fiscal 1993 Fiscal 1992 Fiscal 1991 Operating leases: Buildings: Minimum rentals $33,922 $32,092 $28,918 Contingent rentals 11,796 13,139 11,912 Equipment 18,107 16,319 16,511 63,825 61,550 57,341 Contingent rentals on capital leases 1,133 1,201 1,174 $64,958 $62,751 $58,515 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 29, 1994 for all noncancelable operating leases for buildings and equipment are as follows (in thousands): Fiscal Year Amount 1994 $ 41,916 1995 36,464 1996 30,383 1997 29,189 1998 27,704 After 1998 236,150 $401,806 Renewal options from three to 25 years exist on the majority of leased properties. At January 29, 1994, the Company is committed to incur costs of approximately $142 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 29, 1994 and January 30, 1993 (in thousands, except per share data): 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 Fiscal 1992 Three Months Ended May 2 August 1 October 31 January 30 Net sales $1,033,908 $ 974,872 $1,165,328 $1,539,879 Gross profit 366,701 347,473 413,920 542,455 Net income 45,069 36,484 44,420 110,457 Income per common share .40 .33 .40 .98 Dillard Department Stores, Inc. and Subsidiaries Stockholder Information Annual Meeting Saturday, May 21, 1994 at 9:30 a.m. Board Room Union Building Capitol and Louisiana 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 Chief Financial Officer Post Office Box 486 Little Rock, Arkansas 72203 Listing New York Stock Exchange Ticker Symbol 'DDS' 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 Stock Prices and Dividends by Quarter Sales Prices - Common Shares 1993 1992 Dividends Per Share Quarter High Low High Low 1993 1992 First $52.75 $35.38 $45.00 $26.50 $0.02 $0.02 Second 42.00 34.50 42.96 30.00 $0.02 $0.02 Third 38.25 33.13 42.38 32.88 $0.02 $0.02 Fourth 41.75 33.75 41.50 40.38 $0.02 $0.02 EX-21 6 SUBSIDIARIES OF THE REGISTRANT 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 CONSENT OF INDEPENDENT AUDITORS 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 Statement 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 report (which expresses an unqualified opinion and includes an explanatory paragraph relating to a change in accounting for income taxes) dated February 23, 1994, 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 29, 1994. /s/ DELOITTE & TOUCHE New York, New York April 28, 1994 EX-99 8 FORM 11-K DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN 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, 1993 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, 1993 and December 31, 1992 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, 1993, December 31, 1992 and December 31, 1991, 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 28, 1994 /s/John Hawkins John Hawkins Vice President/Treasurer Dillard Department Stores, Inc. Dillard Department Stores, Inc. Retirement Plan Accountants' Report and Financial Statements December 31, 1993 and 1992 DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN DECEMBER 31, 1993 AND 1992 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, 1993 15 Schedule I - Investments - December 31, 1992 18 Schedule II - Allocation of Plan Assets and Liabilities to Investment Programs - 22 December 31, 1993 Schedule II - Allocation of Plan Assets and Liabilities to Investment Programs - December 31, 1992 23 Schedule III - Allocation of Plan Income and Changes in Plan Equity to Investment Programs - Year Ended December 31, 1993 24 Schedule III - Allocation of Plan Income and Changes in Plan Equity to Investment Programs - Year Ended December 31, 1992 25 Schedule III - Allocation of Plan Income and Changes in Plan Equity to Investment Programs - Year Ended December 31, 1991 26 SUPPLEMENTAL SCHEDULE Transactions or Series of Transactions in Excess of 5% of Current Value of Plan Assets - Year Ended December 31, 1993 27 Independent Accountants' Report Dillard's Employee Pension and Profit-Sharing Retirement 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, 1993 and 1992, and the related statements of income and changes in plan equity for each of the three years in the period ended December 31, 1993, 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, 1993 and 1992, and the income and changes in plan equity for each of the three years in the period ended December 31, 1993 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, 1993 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. /s/ Baird, Kurtz & Dobson Little Rock, Arkansas March 23, 1994 DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN STATEMENTS OF FINANCIAL CONDITION DECEMBER 31, 1993 AND 1992 1993 1992
ASSETS INVESTMENTS, At Fair Market Value (Note 4) U. S. Government securities (cost; 1993 - $1,353,774, 1992 -$1,323,711) $1,370,316 $1,340,882 Corporate and foreign bonds and debentures (cost; 1993 - $66,863 1992 - $50,602 91,300 64,800 Common stocks (cost; 1993 - $3,742,611, 1992 - $3,161,101) 4,933,707 3,842,424 Common stocks - employer securities (cost; (1993 - $75,331,567, 1992 - $57,082,745) 145,611,516 167,587,253 Preferred stocks - employer securities (cost; 1992 - $440,000, 1992 - $440,000) 440,000 440,000 Deposits with insurance companies, at contract value (Note 9) 789,669 Mutual funds 9,696,194 11,288,775 Promissory notes (Note 6) 1,935,996 1,364,946 164,079,029 186,718,749 RECEIVABLES Employer's contributions 786,130 776,630 Employees' contributions 946,093 986,579 Accrued interest and dividends 123,239 110,395 1,855,462 1,873,604 CASH 167,291 139,227 Total Assets 166,101,782 188,731,580 LIABILITIES Participant benefits payable 3,823 Accrued expenses 16,025 15,496 19,848 15,496 PLAN EQUITY $166,081,934 $188,716,084 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991 NET INVESTMENT INCOME Dividends $ 515,779 $ 537,686 $ 877,576 Dividends - employer securities 313,339 285,499 255,557 Interest 365,663 466,795 760,151 1,194,781 1,289,980 1,893,284 Investment expenses 70,314 70,605 201,341 1,124,467 1,219,375 1,691,943 REALIZED GAIN (LOSS) ON INVESTMENTS (Note 4) Employer securities 225,520 5,166,124 820,457 Other investments in securities 500,686 (704,097) 1,083,038 726,206 4,462,027 1,903,495 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS (Note 4) (40,033,408) 24,980,919 33,320,454 CONTRIBUTIONS Employer 3,889,328 1,942,811 Employer - non cash (Note 7) 12,545,135 7,044,533 6,247,689 Plan participants 16,871,081 13,913,565 11,992,849 29,416,216 24,847,426 20,183,349 TRANSFERS FROM OTHER PLANS (Note 8) 63,804 78,923 Total Additions (8,766,519) 55,573,551 57,178,164 WITHDRAWALS, LAPSES AND FORFEITURES Balances of employees' accounts withdrawn 13,117,198 19,666,010 17,066,547 Forfeited balances (Note 3) 745,532 (350,890) (977,617) Amounts disbursed 13,862,730 19,315,120 16,088,930 ADMINISTRATIVE EXPENSES 4,901 14,490 147,570 Total Deductions 13,867,631 19,329,610 16,236,500 INCREASE (DECREASE) IN PLAN EQUITY (22,634,150) 36,243,941 40,941,664 PLAN EQUITY, BEGINNING OF YEAR 188,716,084 152,472,143 111,530,479 PLAN EQUITY, END OF YEAR $ 166,081,934 $ 188,716,084 $ 152,472,143 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991 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. In accordance with the provisions of the plan as amended effective January 1, 1976, separate accounts have been established for the former participants of the Dillard Department Stores, Inc. Employees' Pension Plan who elected the merger of their individual accounts with this plan. Such accounts shall not participate in the earnings and losses of this plan. Each of these participants shall have the right to withdraw their accrued benefits upon termination of service or to defer taking such amounts until normal retirement, at which time such accounts shall provide retirement benefits in an amount of the guaranteed benefits as of the date of merger. As of December 31, 1990, the liability for these benefits included in net assets available for plan benefits was $298,445. In 1991, these accounts were removed from the plan. 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. NOTE 1: DESCRIPTION OF THE PLAN (Continued) General Description of the Plan (Continued) Participants by investment program as of December 31, 1993 were as follows: Number of Investment Program Participants Combined Capital Appreciation Fund 6,893 Government Income Securities Fund 589 Dillard Common Stock Fund 43,166 High-Quality Stock Fund 260 Money Market Fund 288 J. B. Ivey & Company Rollover Fund 853 D. H. Holmes Company Rollover Fund 478 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. DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991 NOTE 1: DESCRIPTION OF THE PLAN (Continued) Contributions (Continued) 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. 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 $29,245 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 reduce the amount of future employer stock bonus contributions. DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991 NOTE 1: DESCRIPTION OF THE PLAN (Continued) Contributions (Continued) 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 made no contributions. 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. 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. DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991 NOTE 1: DESCRIPTION OF THE PLAN (Continued) Contributions (Continued) 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. DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991 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 unallocated insurance contract is valued at contract value as estimated by Pan American Life Insurance Company. Contract value represents interest at the contract rate, less funds used to pay for the insurance company's administrative expenses. 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 normal retirement at age sixty-five, death or disability. DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993, 1992 AND 1991 NOTE 3: BENEFITS TO PARTICIPANTS (Continued) 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, 1993, 1992 and 1991 were $464,869, $350,890 and $599,331, respectively. NOTE 4: INVESTMENTS The Plan's investments were held by a bank-administered trust fund through September 30, 1991. As of September 30, 1991, the Plan sponsor took over administration of the Plan. 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 1993 1992 1991 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 $1,355,000 $1,370,316 $1,325,000 $1,340,882 $280,000 $ 288,430 Corporate and foreign bonds $ 55,000 91,300 $ 45,000 64,800 $ 9,890,000 6,187,871 Common stocks Dillard Department Stores, Inc. (party-in-interest)3,831,882 145,611,516 3,368,528 167,587,253 1,047,212 129,330,681 Other 208,090 4,933,707 131,865 3,842,424 215,374 3,486,174 Preferred stocks 4,400 440,000 4,400 440,000 10,600 593,450 Mutual funds 1,679,261 9,696,194 1,636,128 11,288,775 1,234,949 8,312,071 162,143,033 184,564,134 148,198,677 INVESTMENTS, At Estimated Fair Value Deposits with insurance companies $ $ 789,669 $ 725,865 Promissory notes $ 1,935,996 1,935,996 $ 1,364,946 1,364,946 $ 829,608 829,608 1,935,996 2,154,615 1,555,473 TOTAL INVESTMENTS, At Fair Value $164,079,029 $186,718,749 $149,754,150 During the years ended December 31, 1993, 1992 and 1991, investments (including investments bought, sold and held during the year) appreciated (depreciated) in value by $(40,033,408), $24,980,919, and $33,320,454 as follows:
Unrealized Appreciation (Depreciation) in Fair Value
1993 1992 1991 INVESTMENTS, At Fair Value, As Determined By Quoted Market Price U. S. government securities $14,109 $9,253 $(9,112) Corporate and foreign bonds 9,700 (496,538) (90,251) Common stocks Dillard Department Stores, Inc. (party-in-interest) (40,224,557) 24,036,066 34,056,240 Other 495,037 1,494,784 (856,609) Preferred stocks (374) 374 Mutual funds (327,697) (62,272) 219,812 $ (40,033,408) $ 24,980,919 $ 33,320,454 Unrealized Appreciation (Depreciation) in Fair Value 1993 1992 1991 UNREALIZED APPRECIATION, BEGINNING OF YEAR $ 111,480,709 $ 86,499,790 $ 53,179,336 INCREASE IN UNREALIZED APPRECIATION DURING THE YEAR (40,033,408) 24,980,919 33,320,454 UNREALIZED APPRECIATION, END OF YEAR $ 71,447,301 $ 111,480,709 $ 86,499,790 Realized gains on investments are summarized below:
1993 1992 1991 INVESTMENTS, At Fair Value, As Determined By Quoted Market Price U. S. government securities $2,550 $2,179 $8,987 Corporate and foreign bonds 287,768 64,577 Common stocks Dillard Department Stores, Inc. (party-in-interest) 225,520 5,166,124 820,457 Other 236,714 (1,045,720) 953,306 Preferred stocks Mutual funds 261,422 51,676 56,168 $ 726,206 $ 4,462,027 $ 1,903,495 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, 1993, 1992 and 1991, the Plan made secured loans, totaling $1,021,330, $855,156, and $797,545, respectively, to Plan participants. These loans are payable through weekly payroll deductions. At December 31, 1993, interest is charged at the rate of 8.6%. As of December 31, 1993, 1992 and 1991, the remaining principal balance due on these notes was $1,935,996, $1,364,946 and $829,608, respectively. NOTE 7: EMPLOYER NON-CASH CONTRIBUTIONS During the years ended December 31, 1993, 1992 and 1991, the employer contributed Dillard Department Stores Class A common stock totaling $12,544,987, $7,044,533 and $6,247,689 to the Plan. 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 and $78,923 for the years ended December 31, 1992 and 1991, respectively. NOTE 9: DEPOSITS WITH INSURANCE COMPANIES Deposits with insurance companies are invested in fixed income annuity contracts and are stated at contract value. The fixed income funds guarantee an interest rate over the contract period and the guaranteed interest rate in 1992 was 8.79%, net of expenses. The contract matured in 1993. DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN 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 DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN 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 Corporation 11,000 222,104 261,250 Southwestern Bell Corporation 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 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN 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 I - INVESTMENTS (Continued) DECEMBER 31, 1992 Par Value or Number Market of Shares Cost Value
CAPITAL APPRECIATION FUND U. S. GOVERNMENT SECURITIES U. S. Treasury notes - .71% 6.125% note maturing 09/30/93 $ 115,000 $ 115,233 $ 117,121 4.25% note maturing 07/31/94 $ 400,000 398,312 399,748 6.000% note maturing 11/15/96 $ 60,000 60,049 61,593 5.500% note maturing 02/15/95 $ 750,000 750,117 762,420 1,323,711 1,340,882 CORPORATE BONDS - .03% 8.250% TPI Enterprises, maturing 07/15/02 45,000 50,062 64,800 COMMON STOCKS - 2.04% Alberto Culver Company Class "A" 7,400 155,859 176,675 Alltel Corporation 4,900 172,427 233,975 American Home Products Corporation 1,900 122,928 128,250 Amp, Inc. 4,200 242,176 243,600 American Freightways Corporation 6,525 90,714 151,706 Analog Devices, Inc. 13,000 148,018 211,250 Archer-Daniels-Midland Company 5,400 140,965 143,100 Atmos Energy Corporation 6,900 142,787 162,150 Avnet, Inc. 8,000 204,130 276,000 Bristol Myers Squibb Corporation 1,570 114,566 105,975 Burlington Resources, Inc. 6,000 214,364 240,000 DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE I - INVESTMENTS (Continued) DECEMBER 31, 1992 Par Value or Number Market of Shares Cost Value CAPITAL APPRECIATION FUND (Continued) COMMON STOCKS - 2.04% (Continued) CBI Industries, Inc. 4,100 $ 123,213 $ 121,462 Conagra, Inc. 3,600 101,153 119,250 El Paso Natural Gas Corporation 2,100 17,513 65,100 Loews Corporation 1,560 164,187 187,395 Medicus Systems Corporation 5,200 63,412 54,600 Panhandle Eastern Corporation 5,600 103,600 93,800 Sonic Corporation 2,000 46,469 60,500 Southwestern Bell Corporation 3,300 181,684 244,200 Stewart Enterprises, Inc. 7,050 147,193 169,200 Torchmark Corporation 4,500 155,198 257,062 TPI Enterprises 6,000 35,142 51,000 Tyson Foods, Inc. - Class A 8,000 129,710 194,000 Unilab Corporation 7,615 62,993 49,497 USA Truck, Inc. 4,000 58,578 81,000 Varsity Spirit Corporation 1,445 22,122 21,677 3,161,101 3,842,424 COMMON STOCK OF DILLARD DEPARTMENT STORES, INC. - 23.03% CLASS "A " (PARTY-IN-INTEREST) 873,600 1,716,292 43,464,585 PREFERRED STOCK OF DILLARD DEPARTMENT STORES, INC. - .23% (PARTY-IN-INTEREST) 4,400 440,000 440,000 PROMISSORY NOTES - .72% 1,364,946 1,364,946 MORGAN STANLEY BALANCED PORTFOLIO - 1.57% 262,068 2,831,130 2,963,985 Total Capital Appreciation Fund 10,887,242 53,481,622 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE I - INVESTMENTS (Continued) DECEMBER 31, 1992 Par Value or Number Market of Shares Cost Value
GOVERNMENT INCOME SECURITIES FUND FORTRESS GOVERNMENT INCOME SECURITIES FUND - 1.28% 258,149 $ 2,388,502 $ 2,424,017 DILLARD COMMON STOCK FUND COMMON STOCK OF DILLARD DEPART- MENT STORES, INC. CLASS "A" - 65.77% (PARTY-IN-INTEREST) 2,494,928 55,366,453 124,122,668 HIGH-QUALITY STOCK FUND LIBERTY - AMERICAN LEADERS FUND - .14% 18,940 229,010 266,865 MONEY MARKET FUND MONEY MARKET MANAGEMENT FUND - .29% 556,216 556,220 556,216 IVEY'S GOVERNMENT INCOME FUND GOVERNMENT INCOME SECURITIES FUND - 1.85% 372,652 3,443,147 3,499,204 D. H. HOLMES ROLLOVER FUND DEPOSITS WITH INSURANCE COMPANIES, AT CONTRACT VALUE - 42% Pan American Life Insurance Company Guaranteed Investment Contracts 789,669 789,669 DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE I - INVESTMENTS (Continued) DECEMBER 31, 1992 Par Value or Number Market of Shares Cost Value D. H. HOLMES ROLLOVER FUND (Continued) GOVERNMENT INCOME SECURITIES FUND - .84% 168,103 $ 1,577,797 $ 1,578,487 Total D. H. Holmes Rollover Fund 2,367,466 2,368,156 TOTAL ASSETS HELD FOR INVESTMENT $ 75,238,037 $ 186,718,749 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, 1993 Combined Dillard High- J.B. Ivey D.H. Holmes Capital Government Common Quality Money Company Company Appreciation Income Stock Stock Market Rollover Rollover Fund Securities Fund Fund Fund Fund Fund Total
ASSETS Investments U. S. Government securities 1,370,316 1,370,316 Corporate and foreign bonds and debentures 91,300 91,300 Common stocks 4,933,707 4,933,707 Common stocks - employer securities 33,199,080 112,412,436 145,611,516 Preferred stocks - employer securities 440,000 440,000 Mutual funds 825,706 2,312,341 478,849 733,387 3,300,124 2,045,787 9,696,194 Promissory notes 1,935,996 1,935,996 42,796,105 2,312,341 112,412,436 478,849 733,387 3,300,124 2,045,787 164,079,029 Receivables Employer's contributions 786,130 786,130 Employees' contributions 74,432 22,400 812,116 18,541 18,604 946,093 Accrued interest and dividends 64,113 59,126 123,239 Receivable (payable) from (to) other funds (38,403) (3,829) 64,061 (10,698)(10,737) 369 (763) 0 100,142 18,571 1,721,433 7,843 7,867 369 (763) 1,855,462 Cash 159,526 185 6,541 1,039 167,291 TOTAL ASSETS 43,055,773 2,331,097 114,140,410 486,692 741,254 3,300,493 2,046,063 166,101,782 LIABILITIES Participant benefits payable 3,823 3,823 Accrued expenses 16,025 16,025 LIABILITIES 16,025 3,823 19,848 PLAN EQUITY 43,039,748 2,331,097 114,136,587 486,692 741,254 3,300,493 2,046,063 166,081,934 See Notes to Financial Statements
DILLARD DEPARTMENT STORES, INC. RETIREMENT PLAN SCHEDULE II - ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS DECEMBER 31, 1992 Combined Dillard High- J.B. Ivey D.H. Holmes Capital Government Common Quality Money Company Company Appreciation Income Stock Stock Market Rollover Rollover Fund Securities Fund Fund Fund Fund Fund Total
ASSETS Investments U. S. Government securities 1,340,882 1,340,882 Corporate and foreign bonds and debentures 64,800 64,800 Common stocks 3,842,424 3,842,424 Common stocks - employer securities 43,464,585 124,122,668 167,587,253 Preferred stocks - employer securities 440,000 440,000 Deposits with insurance companies, at contract value 789,669 789,669 Mutual funds 2,963,985 2,424,017 266,865 556,216 3,499,204 1,578,488 11,288,775 Promissory notes 1,364,946 1,364,946 53,481,622 2,424,017 124,122,668 266,865 556,216 3,499,204 2,368,157 186,718,749 Receivables Employer's contributions 776,630 776,630 Employees' contributions 57,394 24,870 875,578 12,509 16,228 986,579 Accrued interest and dividends 60,497 49,898 110,395 Receivable (payable) from (to) other funds (45,956) (989) 44,783 (1,108) 2,162 2,231 (1,123) 0 71,935 23,881 1,746,889 11,401 18,390 2,231 (1,123) 1,873,604 Cash 139,227 139,227 TOTAL ASSETS 53,692,784 2,447,898 125,869,557 278,266 574,606 3,501,435 2,367,034 188,731,580 LIABILITIES Participant benefits payable Accrued expenses 15,233 263 15,496 LIABILITIES 15,233 263 15,496 PLAN EQUITY 53,677,551 2,447,898 125,869,294 278,266 574,606 3,501,435 2,367,034 188,716,084 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 High- J.B. Ivey D.H. Holmes Capital Government Common Quality Money Company Company Appreciation Income Stock Stock Market Rollover Rollover Fund Securities Fund Fund Fund Fund Fund Total
NET INVESTMENT INCOME Dividends 68,572 6,094 13,718 257,875 169,520 515,779 Dividends - employer securities 91,893 221,446 313,339 Interest 170,385 182,631 12,647 365,663 330,850 182,631 221,446 18,741 13,718 257,875 169,520 1,194,781 Investment expenses (60,464) (9,850) (70,314) 270,386 182,631 211,596 18,741 13,718 257,875 169,520 1,124,467 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securities 225,520 225,520 Other investments in securities 500,467 (154) 2,764 (2,391) 500,686 500,467 (154) 225,520 2,764 (2,391) 726,206 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS (9,851,843) (71,267)(29,959,052) 12,440 (101,441) (62,245)(40,033,408) CONTRIBUTIONS Employer Employer - non-cash 12,545,135 12,545,135 Plan participants 884,471 323,867 15,169,017 204,745 232,341 43,753 12,887 16,871,081 884,471 323,867 27,714,152 204,745 232,341 43,753 12,887 29,416,216 Total Additions (8,196,519) 435,077 (1,807,784)235,926 246,059 202,951 117,771 (8,766,519) WITHDRAWALS, LAPSES AND FORFEITURES Balances of employees' accounts withdrawn 2,370,614 551,651 9,246,533 27,460 79,344 403,041 438,555 13,117,198 Forfeited balances 66,584 678,390 558 745,532 Amounts disbursed 2,437,198 551,651 9,924,923 27,460 79,344 403,599 438,555 13,862,730 ADMINISTRATIVE EXPENSES 4,086 227 40 67 294 187 4,901 Total Deductions 2,441,284 551,878 9,924,923 27,500 79,411 403,893 438,742 13,867,631 INCREASE (DECREASE) IN PLAN EQUITY (10,637,803) (116,801)(11,732,707)208,426 166,648 (200,942) (320,971)(22,634,150) PLAN EQUITY, BEGINNING OF YEAR 53,677,551 2,447,898 125,869,294 278,266 574,606 3,501,435 2,367,034 188,716,084 PLAN EQUITY, END OF YEAR 43,039,748 2,331,097 114,136,587 486,692 741,254 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 High- J.B. Ivey D.H. Holmes Capital Government Common Quality Money Company Company Appreciation Income Stock Stock Market Rollover Rollover Fund Securities Fund Fund Fund Fund Fund Total
NET INVESTMENT INCOME Dividends 71,138 19,118 13,415 299,356 134,659 537,686 Dividends - employer securities 98,254 187,245 285,499 Interest 275,240 191,555 466,795 444,632 191,555 187,245 19,118 13,415 299,356 134,659 1,289,980 Investment expenses 70,605 70,605 374,027 191,555 187,245 19,118 13,415 299,356 134,659 1,219,375 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securities 4,573,785 592,339 5,166,124 Other investments in securities (724,387) 3,317 1,868 11,824 3,281 (704,097) 3,849,398 3,317 592,339 1,868 11,824 3,281 4,462,027 UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS 3,670,134 (56,802) 21,505,908 (2,123) (94,991) (41,207) 24,980,919 CONTRIBUTIONS Employer 3,889,328 3,889,328 Employer - non-cash 7,044,533 7,044,533 Plan participants 773,143 314,574 12,527,869 116,068 181,911 13,913,565 773,143 314,574 23,461,730 116,068 181,911 24,847,426 TRANSFERS FROM OTHER PLANS 63,804 63,804 Total Additions 8,666,702 452,644 45,747,222 134,931 195,326 216,189 160,537 55,573,551 WITHDRAWALS, LAPSES AND FORFEITURES Balances of employees' accounts withdrawn 9,454,867 252,520 9,162,207 25,614 57,805 452,390 260,607 19,666,010 Forfeited balances (66,584) (292,725) (558) 8,977 (350,890) Amounts disbursed 9,388,283 252,520 8,869,482 25,614 57,805 451,832 269,584 19,315,120 ADMINISTRATIVE EXPENSES 4,976 210 8,666 16 41 349 232 14,490 Total Deductions 9,393,259 252,730 8,878,148 25,630 57,846 452,181 269,816 19,329,610 INCREASE (DECREASE) IN PLAN 0 EQUITY (726,557) 199,914 36,869,074 109,301 137,480 (235,992) (109,279) 36,243,941 PLAN EQUITY, BEGINNING OF YEAR 54,404,108 2,247,984 89,000,220 168,965 437,126 3,737,427 2,476,313 152,472,143 PLAN EQUITY, END OF YEAR 53,677,551 2,447,898 125,869,294 278,266 574,606 3,501,435 2,367,034 188,716,084 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, 1991 Combined Dillard High- J.B. Ivey D.H. Holmes Capital Government Common Quality Money Company Company Appreciation Income Stock Stock Market Rollover Rollover Fund Securities Fund Fund Fund Fund Fund Total
NET INVESTMENT INCOME Dividends 114,314 186,228 3,639 16,011 406,873 150,511 877,576 Dividends - employer securities 106,609 148,948 255,557 Interest 703,629 2,556 21,116 642 1,710 12,330 18,168 760,151 924,552 188,784 170,064 4,281 17,721 419,203 168,679 1,893,284 Investment expenses 186,645 14,696 201,341 737,907 188,784 170,064 4,281 17,721 404,507 168,679 1,691,943 REALIZED GAIN (LOSS) ON INVESTMENTS Employer securities 820,457 820,457 Other investments in securities 1,026,660 4,413 1,507 49,901 557 1,083,038 1,026,660 4,413 820,457 1,507 49,901 557 1,903,495 UNREALIZED APPRECIATION OF 0 INVESTMENTS 10,699,261 65,882 22,401,383 27,828 (4) 79,339 46,765 33,320,454 CONTRIBUTIONS Employer 1,942,811 1,942,811 Employer - non-cash 6,247,689 6,247,689 Plan participants 648,484 301,789 10,803,408 68,117 171,051 11,992,849 648,484 301,789 18,993,908 68,117 171,051 20,183,349 TRANSFERS FROM OTHER PLANS 78,923 78,923 Total Additions 13,112,312 560,868 42,385,812 101,733 188,768 533,747 294,924 57,178,164 WITHDRAWALS, LAPSES AND FORFEITURES Balances of employees' accounts withdrawn 5,165,289 286,547 7,477,255 43,024 35,645 3,517,644 541,143 17,066,547 Forfeited balances (372,106) 1,374 (603,241) (3,644) (977,617) Amounts disbursed 4,793,183 287,921 6,874,014 43,024 35,645 3,514,000 541,143 16,088,930 ADMINISTRATIVE EXPENSES 57,050 3,657 47,773 307 1,026 29,213 8,544 147,570 Total Deductions 4,850,233 291,578 6,921,787 43,331 36,671 3,543,213 549,687 16,236,500 INCREASE IN PLAN EQUITY 8,262,079 269,290 35,464,025 58,402 152,097 (3,009,466) (254,763) 40,941,664 PLAN EQUITY, BEGINNING OF YEAR 46,142,029 1,978,694 53,536,195 110,563 285,029 6,746,893 2,731,076 111,530,479 PLAN EQUITY, END OF YEAR 54,404,108 2,247,984 89,000,220 168,965 437,126 3,737,427 2,476,313 152,472,143 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, 1993 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) $ 18,578,481 $ 18,578,481
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, 1993. /s/ Baird, Kurtz & Dobson Little Rock, Arkansas March 23, 1994 -----END PRIVACY-ENHANCED MESSAGE-----