UNITED STATES
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
For the fiscal year ended February 2, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission file number 1-6140
DILLARD'S, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 71-0388071
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201
(Address of principal executive office)
(Zip Code)
(501) 376-5200
(Registrant's telephone number, including area code)
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 the 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 28, 2002: $1,854,698,237.
Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of March 28, 2002:
CLASS A COMMON STOCK, $.01 par value 80,199,916
CLASS B COMMON STOCK, $.01 par value 4,010,929
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Stockholders Report for the fiscal year ended February 2, 2002 (the "Report") are incorporated by reference into Parts I and II. Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held May 18, 2002 (the "Proxy Statement") are incorporated by reference into Part III.The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this report or made by management of the Company involve risks and uncertainties and are subject to change based on various important factors. The following factors, among others, could affect the Company's financial performance and could cause actual results for 2002 and beyond to differ materially from those expressed or implied in any such forward-looking statements: economic and weather conditions in the regions in which the Company's stores are located and their effect on the buying patterns of the Company's customers, changes in consumer spending patterns and debt levels, trends in personal bankruptcies and the impact of competitive market forces.
PART I
ITEM 1. BUSINESS.
General
-------
Dillard's, Inc. (the "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 at the national and regional
levels as well as numerous competitors at the 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 12
of the Report under the headings "Net Sales", "Net Income", "Total Assets" and "Number of Employees-Average", 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, except
for Robin Sanderford, Paul J. Schroeder, Jr. and Charles Unfried.
Mr. Sanderford has been employed by the Registrant as Vice President since August 1998. Prior to August 1998 he was
employed as President of the Southeast Division of Mercantile Stores Company, Inc. ("Mercantile") (1995-1998) and as Vice
President and Director of Real Estate and Long Range Planning for Mercantile (1993-1995). Mr. Schroeder has been employed by
the Registrant as Vice President since January 1998. Prior to 1998 he was a partner with the St. Louis based, international
law firm of Bryan Cave, LLP, specializing in labor and employment law. Mr. Unfried has been employed by the Registrant
since August 1998. Prior to August 1998 he was President of Mercantile Credit Services and Mercantile Stores National Bank,
both subsidiaries of Mercantile.
The following is a listing of executive officers of the Company, their age, position and office, and family relationship, if
any.
Name Age Position & Office Family Relationship
William Dillard, II 57 Director; Chief Executive Officer None
Alex Dillard 52 Director; President Brother of William Dillard, II
Mike Dillard 50 Director; Executive Vice President Brother of William Dillard, II
H. Gene Baker 63 Vice President None
Joseph P. Brennan 57 Vice President None
G. Kent Burnett 57 Vice President None
Drue Corbusier 55 Director; Executive Vice President Sister of William Dillard, II
James I. Freeman 52 Director; Senior Vice President; Chief None
Financial Officer
Randal L. Hankins 51 Vice President None
Gaston Lemoine 58 Vice President None
Robin Sanderford 55 Vice President None
Paul J. Schroeder 53 Vice President None
Burt Squires 52 Vice President None
Charles Unfried 55 Vice President None
ITEM 2. PROPERTIES.
All of the Registrant's stores are owned or leased from a wholly owned subsidiary or from third parties. The Registrant's
third-party store leases typically provide for rental payments based on a percentage of net sales with a guaranteed minimum
annual rent, while 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 the leases. At February 2, 2002 there
were 338 stores in operation with gross square footage approximating 56.8 million feet. The Company owns or leases, from a
wholly owned subsidiary, a total of 253 stores with 42.4 million square feet. The Company leased 85 stores from third
parties, which totaled 14.4 million square feet. Additional information is contained in Notes 1, 11 and 12, "Notes to
Consolidated Financial Statements," on pages 23, 24, and 29 of the Report, which information is incorporated herein by
reference.
ITEM 3. LEGAL PROCEEDINGS.
The Company does not have any material legal proceedings pending.
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 33 of the Report, which information is incorporated herein by reference. As of March 29, 2002, there were
4,968 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 page 12 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 Operations" on pages 13 through 17 of the Report, which information is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Reference is made to information under the heading "Quantitative and Qualitative Disclosures About Market Risk" on page 16
of the Report which information is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Reference is made to the consolidated financial statements and notes thereto included on pages 19 through 31 of the Report,
which are incorporated herein by reference.
ITEM 9 CHANGES IN AND DISGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISRTANT.
A. Directors of the Registrant
Information regarding directors of the Registrant is incorporated herein by reference to the information on pages 5
through 8 under the heading "Nominees for Election as Directors" and pages 12 and 13 under the heading "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Proxy Statement.
B. Executive Officers of the Registrant
Information regarding executive officers of the Registrant is incorporated herein by reference to Item 1 of this report
under the heading "Executive Officers of the Registrant". Reference additionally is made to the information under the
heading "Section 16(a) Beneficial Ownership Reporting Compliance" on pages 12 and 13 in the Proxy Statement, which
information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding executive compensation and compensation of directors is incorporated herein by reference to the
information beginning on page 8 under the heading "Compensation of Directors and Executive Officers" and concluding on page
10 under the heading "Compensation of Directors" in the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information regarding security ownership of certain beneficial owners and management is incorporated herein by reference to
the information on page 4 under the heading "Principal Holders of Voting Securities" and page 5 under the heading "Nominees
for Election as Directors" and continuing through footnote 13 on page 7 in the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions is incorporated herein by reference to the information
on page 12 under the heading "Certain Relationships and Transactions" in the Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements
--------------------
The following consolidated financial statements of the Registrant and its consolidated subsidiaries included in the Report
are incorporated herein by reference in Item 8 of this report.
Independent Auditors' Report
Consolidated Balance Sheets - February 2, 2002 and February 3, 2001.
Consolidated Statements of Operations - Fiscal years ended February 2, 2002, February 3, 2001 and January 29, 2000.
Consolidated Statements of Stockholders' Equity - Fiscal years ended February 2, 2002, February 3, 2001 and January 29, 2000.
Consolidated Statements of Cash Flows - Fiscal years ended February 2, 2002, February 3, 2001 and January 29, 2000.
Notes to Consolidated Financial Statements - Fiscal years ended February 2, 2002, February 3, 2001 and January 29, 2000.
(a)(2) Financial Statement Schedules
-----------------------------
The following consolidated financial statement schedule of the Registrant and its consolidated subsidiaries is filed
pursuant to Item 14(d) (this schedule appears immediately following the signature page):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
(a)(3) Exhibits and Management Compensatory Plans
------------------------------------------
Exhibits
The following exhibits are filed pursuant to Item 14(c):
Number Description
----- -----------
*3(a) Restated Certificate of Incorporation(Exhibit 3 to Form 10-Q for the quarter ended August 1, 1992 in
1-6140).
*3(b) By-Laws as currently in effect (Exhibit 3.1 to Form 8-K dated as of March 2, 2002 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, 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) Rights Agreement between Dillard's, Inc. and Registrar and Transfer Company, as Rights Agent (Exhibit
4.1 to Form 8-K dated as of March 2, 2002 in 1-6140).
Number Description
----- -----------
*10(a) Retirement Contract of William Dillard dated March 8, 1997 (Exhibit 10(a) to Form 10-K for the fiscal
year ended February 1, 1997 in 1-6140).
*10(b) 1998 Incentive and Nonqualified Stock Option Plan (Exhibit 10 (b) to Form 10-K for the fiscal year
ended January 30, 1999 in 1-6140).
*10(c) Corporate Officers Non-Qualified Pension Plan (Exhibit 10(c) to Form 10-K for the fiscal year ended
January 29, 1994 in 1-6140).
*10(d) Senior Management Cash Bonus Plan (Exhibit 10(d) to Form 10-K for the fiscal year ended January 28,
1995 in 1-6140).
*10(e) 2000 Incentive and Nonqualified Stock Option Plan (Exhibit 10(e) to Form 10-K for the fiscal year
ended February 3, 2001 in 1-6140).
12 Statement re: Computation of Ratio of Earnings to Fixed Charges.
13 Incorporated portions of the Annual Stockholders Report for the fiscal year ended February 2, 2002.
*18 Letter re: Change in Accounting Principles (Exhibit 18 to Form 10-K for the fiscal year ended
February 3, 2001 in 1-6140).
21 Subsidiaries of Registrant
23 Consent of Independent Auditors
*Incorporated by reference as indicated.
Management Compensatory Plans
Listed below are management contracts and compensatory plans which are required to be filed as exhibits pursuant to Item 14 (c):
Retirement Contract of William Dillard dated March 8, 1997.
1998 Incentive and Nonqualified Stock Option Plan.
Corporate Officers Non-Qualified Pension Plan.
Senior Management Cash Bonus Plan. 2000 Incentive and
Nonqualified Stock Option Plan.
(b) Reports on Form 8-K filed during the fourth quarter:
----------------------------------------------------
None
(c ) Exhibits
--------
See the response to Item 14(a) (3).
(c) Financial Statement schedules:
-----------------------------
See the response to Item 14(a)(2).
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dillard's, Inc.
Registrant
Date: May 1, 2002 /s/James I. Freeman
James I. Freeman, Senior Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacity and on the date indicated.
Calvin N. Clyde, Jr. Drue Corbusier
-------------------- --------------
Calvin N. Clyde, Jr. Drue Corbusier
Director Executive Vice President and Director
Robert C. Connor Will D. Davis
---------------- -------------
Robert C. Connor Will D. Davis
Director Director
Alex Dillard Mike Dillard
------------ ------------
Alex Dillard Mike Dillard
President and Director Executive Vice President
and Director
William Dillard II James I. Freeman
------------------ ----------------
William Dillard II James I. Freeman
Chief Executive Officer and Director Senior Vice President and Chief
(Principal Executive Officer) Financial Officer and Director
John Paul Hammerschmidt John H. Johnson
----------------------- ---------------
John Paul Hammerschmidt John H. Johnson
Director Director
William H. Sutton
-----------------
William H. Sutton
Director
Date May 1, 2002
Independent Auditors' Report
To the Board of Directors and Stockholders of Dillard's, Inc. Little Rock, Arkansas We have audited the consolidated financial statements of Dillard's, Inc. and subsidiaries (the "Company") as of February 2, 2002 and February 3, 2001, and for each of the three fiscal years in the period ended February 2, 2002, and have issued our report thereon dated March 2, 2002; which consolidated financial statements and report are included in your 2001 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Dillard's, Inc. and subsidiaries, listed in item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP New York, New York March 2, 2002
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
DILLARD'S, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
Column A Column B Column C Column D Column E Column F
Additions
-------------------------------
Balance at Charged to Charged to Balance at
Beginning of Costs and Other End of
Description Period Expenses Accounts (1) Deductions (2) Period
- ---------------------------------- ---------------- -------------- ---------------- ----------------- -------------
Allowance for losses on accounts receivable:
Year Ended February 2, 2002 $32,240 $78,121 $ - $72,976 $37,385
Year Ended February 3, 2001 32,533 83,277 - 83,570 32,240
Year Ended January 29, 2000 37,487 88,154 - 93,108 32,533
(1) Represents the allowance for losses on accounts acquired.
(2) Accounts written off and charged to allowance for losses on accounts receivable (net of recoveries).
Exhibit Index
Number Description ----- ----------- *3(a) Restated Certificate of Incorporation(Exhibit 3 to Form 10-Q for the quarter ended August 1, 1992 in 1-6140). *3(b) By-Laws as currently in effect (Exhibit 3.1 to Form 8-K dated as of March 2, 2002 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, 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) Rights Agreement between Dillard's, Inc. and Registrar and Transfer Company, as Rights Agent (Exhibit 4.1 to Form 8-K dated as of March 2, 2002 in 1-6140). *10(a) Retirement Contract of William Dillard dated March 8, 1997 (Exhibit 10(a) to Form 10-K for the fiscal year ended February 1, 1997 in 1-6140). *10(b) 1998 Incentive and Nonqualified Stock Option Plan (Exhibit 10 (b) to Form 10-K for the fiscal year ended January 30, 1999 in 1-6140). *10(c) Corporate Officers Non-Qualified Pension Plan (Exhibit 10(c) to Form 10-K for the fiscal year ended January 29, 1994 in 1-6140). *10(d) Senior Management Cash Bonus Plan (Exhibit 10(d) to Form 10-K for the fiscal year ended January 28, 1995 in 1-6140). *10(e) 2000 Incentive and Nonqualified Stock Option Plan (Exhibit 10(e) to Form 10-K for the fiscal year ended February 3, 2001 in 1-6140). 12 Statement re: Computation of Ratio of Earnings to Fixed Charges. 13 Incorporated portions of the Annual Stockholders Report for the fiscal year ended February 2, 2002. *18 Letter re: Change in Accounting Principles (Exhibit 18 to Form 10-K for the fiscal year ended February 3, 2001 in 1-6140). 21 Subsidiaries of Registrant 23 Consent of Independent Auditors *Incorporated by reference as indicated.