<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
(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
<PAGE>
(c) Exhibits
See the response to Item 14(a)(3).
(d) Financial statement schedules
See the response to Item 14(a)(2).
<PAGE>
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
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY , PLANT AND EQUIPMENT
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
<CAPTION>
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
<S> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY , PLANT AND EQUIPMENT
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
<CAPTION>
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
<S> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY , PLANT AND EQUIPMENT
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
<CAPTION>
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
<S> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION
AMORITIZATION OF PROPERTY, PLANT, AND EQUIPMENT
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES
( DOLLAR AMOUNTS IN THOUSANDS)
<CAPTION>
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
<S> <C> <C> <C> <C> <C>
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".
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
<CAPTION>
ADDITIONS
BALANCE CHARGED TO CHARGED TO BALANCE
AT BEGINNING COST AND OTHER ACCOUNTS DEDUCTIONS - AT END
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD
<S> <C> <C> <C> <C> <C>
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).
</TABLE>
<PAGE>
<TABLE>
SCHEDULE IX - SHORT-TERM BORROWINGS
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
<CAPTION>
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)
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
<CAPTION>
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
<S> <C> <C> <C>
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.
</TABLE>
<PAGE>
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.
<PAGE>
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.
<TABLE>
EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Year Ended
January 29, January 30, February 1,
1994 1993 1992
<CAPTION>
<S> <C> <C> <C>
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
</TABLE>
<TABLE>
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*
<CAPTION>
<S> <C> <C> <C> <C> <C>
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
</TABLE>
<TABLE>
Table of Selected Financial Data
Dillard Department Stores, Inc. And Subsidiaries
(In thousands of dollars, except per share data)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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>
<PAGE>
<TABLE>
Table of Selected Financial Data
Dillard Department Stores, Inc. And Subsidiaries
(In thousands of dollars, except per share data)
<CAPTION>
<S> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
<TABLE>
Dillard Department Stores, Inc. and Subsidiaries
Consolidated Balance Sheets
<CAPTION>
<S> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
Dillard Department Stores, Inc. and Subsidiaries
Consolidated Statements of Income
Year Ended
<CAPTION>
<S> <C> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
Dillard Department Stores, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
Dillard Department Stores, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<CAPTION>
<S> <C> <C> <C>
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.
</TABLE>
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
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
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
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
<TABLE>
DILLARD DEPARTMENT STORES, INC.
RETIREMENT PLAN
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1993 AND 1992
1993 1992
<CAPTION>
<S> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
DILLARD DEPARTMENT STORES, INC.
RETIREMENT PLAN
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
<S> <C> <C> <C>
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
</TABLE>
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<TABLE>
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
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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:
</TABLE>
<PAGE>
<TABLE>
Unrealized Appreciation (Depreciation) in Fair Value
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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:
</TABLE>
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
<TABLE>
DILLARD DEPARTMENT STORES, INC.
RETIREMENT PLAN
SCHEDULE I - INVESTMENTS
DECEMBER 31, 1993
Par Value
or Number Market
of Shares Cost Value
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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
<PAGE>
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
</TABLE>
<PAGE>
<TABLE>
DILLARD DEPARTMENT STORES, INC.
RETIREMENT PLAN
SCHEDULE I - INVESTMENTS (Continued)
DECEMBER 31, 1993
Par Value
or Number Market
of Shares Cost Value
<CAPTION>
<S> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
DILLARD DEPARTMENT STORES, INC.
RETIREMENT PLAN
SCHEDULE I - INVESTMENTS (Continued)
DECEMBER 31, 1992
Par Value
or Number Market
of Shares Cost Value
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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
<PAGE>
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
</TABLE>
<PAGE>
<TABLE>
DILLARD DEPARTMENT STORES, INC.
RETIREMENT PLAN
SCHEDULE I - INVESTMENTS (Continued)
DECEMBER 31, 1992
Par Value
or Number Market
of Shares Cost Value
<CAPTION>
<S> <C> <C> <C>
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
<PAGE>
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
</TABLE>
<PAGE>
<TABLE>
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
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
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
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
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
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
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
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
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
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
SUPPLEMENTAL SCHEDULE
<PAGE>
<TABLE>
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)
<CAPTION>
<C> <C> <C>
Dillard Department
Stores, Inc., Class
"A" Common Stock
(party-in-interest) $ 18,578,481 $ 18,578,481
</TABLE>
<PAGE>
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
