10-K405 1 f10k_020301.htm FORM 10-K

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 3, 2001
                                                         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 30,
2001:  $1,727,896,548.

Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of March 30, 2001:

                  CLASS A COMMON STOCK, $.01 par value     81,011,900
                  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  3, 2001 (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 19,  2001 (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 2001 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.

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          56    Director; Chief Executive Officer            Son of William Dillard
Alex Dillard                 51    Director; President                          Son of William Dillard
Mike Dillard                 49    Director; Executive Vice President           Son of William Dillard
H. Gene Baker                62    Vice President                               None
Joseph P. Brennan            56    Vice President                               None
G. Kent Burnett              56    Vice President                               None
Drue Corbusier               54    Director; Executive Vice President           Daughter of William Dillard
David M. Doub                54    Vice President                               None
James I. Freeman             51    Director;  Senior  Vice  President;   Chief  None
                                   Financial Officer
Randal L. Hankins            50    Vice President                               None
Gaston Lemoine               57    Vice President                               None
Robin Sanderford             54    Vice President                               None
Paul J. Schroeder            52    Vice President                               None
Burt Squires                 51    Vice President                               None
Charles Unfried              54    Vice President                               None

ITEM 2. PROPERTIES.

         All of the  Registrant's  stores are owned or leased from a wholly owned  subsidiary or from third parties.
         The Registrant's  third-party  store leases typically  provide for rental payments based 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  3, 2001  there were 337 stores in
         operation with gross square  footage  approximating  56.5 million feet. The Company owns or leases,  from a
         wholly  owned  subsidiary,  a total of 250 stores with 41.6  million  square  feet.  The Company  leased 87
         stores from third  parties,  which totaled 14.9 million  square feet.  Additional  information is contained
         in Notes 2, 12 and 13,  "Notes  to  Consolidated  Financial  Statements,"  on pages 24,  25,  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

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 30, 2001,  there were 5,127 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  16 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 18 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 7 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 3, 2001 and January 29, 2000.

         Consolidated  Statements of Operations - Fiscal years ended February 3, 2001,  January 29, 2000 and January
         30, 1999.

         Consolidated  Statements of  Stockholders'  Equity - Fiscal years ended February 3, 2001,  January 29, 2000
         and January 30, 1999.

         Consolidated  Statements of Cash Flows - Fiscal years ended February 3, 2001,  January 29, 2000 and January
         30, 1999.

         Notes to  Consolidated  Financial  Statements - Fiscal years ended  February 3, 2001,  January 29, 2000 and
         January 30, 1999.

         (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(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, 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 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.
12             Statement re:  Computation of Ratio of Earnings to Fixed Charges.
13             Incorporated portions of the Annual Stockholders Report for the fiscal year ended February 3, 2001.
18             Letter re:  Change in Accounting Principles
21             Subsidiaries of Registrant
23             Consent of Independent Auditors

*Incorporated by reference as indicated.

Management Compensatory Plans

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).

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 4, 2001 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.

William Dillard Drue Corbusier
---------------- --------------
William Dillard Drue Corbusier
Chairman Executive Vice President and Director

Calvin N. Clyde, Jr. Robert C. Connor
-------------------- ----------------
Calvin N. Clyde, Jr. Robert C. Connor
Director Director

Will D. Davis Alex Dillard
------------- ------------
Will D. Davis Alex Dillard
Director President and Director

Mike Dillard William Dillard II
------------ ------------------
Mike Dillard William Dillard II
Executive Vice President Chief Executive Officer and Director
and Director (Principal Executive Officer)

James I. Freeman William H. Sutton
---------------- -----------------
James I. Freeman William H. Sutton
Senior Vice President and Chief Director
Financial Officer and Director

John Paul Hammerschmidt John H. Johnson
----------------------- ---------------
John Paul Hammerschmidt John H. Johnson
Director Director

Date: May 4, 2001

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 3, 2001 and January 29,  2000,  and for each of the three years in the period ended  February 3, 2001,  and
have  issued our report  thereon  dated  March 7,  2001;  which  consolidated  financial  statements  and report are
included in your 2000 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 21, 2001

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 3, 2001                $32,533        $83,277            $   -           $83,570       $32,240

Year Ended January 29, 2000                 37,487         88,154                -            93,108        32,533

Year Ended January 30, 1999                 27,809         62,766           17,854            70,942        37,487


(1)      Represents the allowance for losses on accounts acquired.
(2)      Accounts written off and charged to allowance for losses on accounts receivable (net of recoveries).

Exhibit Index

Number         Description

*3(a)          Restated  Certificate of  Incorporation(Exhibit  3 to Form 10-Q for the quarter ended August 1, 1992 in
               1-6140).
*3(b)          By-Laws as currently in effect  (Exhibit  3(b) to Form 10-K for the fiscal year ended  January 30, 1993
               in 1-6140).
*4(a)          Indenture between the Registrant and Chemical Bank,  Trustee,  dated as of October 1, 1985 (Exhibit (4)
               in 2-85556).
*4(b)          Indenture between the Registrant and Chemical Bank,  Trustee,  dated as of October 1, 1986 (Exhibit (4)
               in 33-8859).
*4(c)          Indenture between Registrant and Chemical bank, 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 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.
12             Statement re:  Computation of Ratio of Earnings to Fixed Charges.
13             Incorporated portions of the Annual Stockholders Report for the fiscal year ended February 3, 2001.
18             Letter re:  Change in Accounting Principles
21             Subsidiaries of Registrant
23             Consent of Independent Auditors

*Incorporated by reference as indicated.