Business Segments

9 Months Ended

Oct. 29, 2011

Business Segments

Business Segments

Note 2.  Business Segments

The Company operates in two reportable segments:  the operation of retail department stores (“retail operations”) and a general contracting construction company (“construction”).

For the Company’s retail operations, the Company determined its operating segments on a store by store basis.  Each store’s operating performance has been aggregated into one reportable segment.  The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas: economic characteristics, class of consumer, nature of products and distribution methods. Revenues from external customers are derived from merchandise sales, and the Company does not rely on any major customers as a source of revenue. Across all stores, the Company operates one store format under the Dillard’s name where each store offers the same general mix of merchandise with similar categories and similar customers.  The Company believes that disaggregating its operating segments would not provide meaningful additional information.

The following tables summarize certain segment information, including the reconciliation of those items to the Company’s consolidated operations:

(in thousands of dollars)	Retail Operations			Construction			Consolidated
Three Months Ended October 29, 2011:
Net sales from external customers	$	1,366,362		$	16,250		$	1,382,612
Gross profit	502,140			475			502,615
Depreciation and amortization	64,689			45			64,734
Interest and debt expense (income), net	17,791			(41		)	17,750
Income (loss) before income taxes and income on and equity in (losses) of joint ventures	40,041			(523		)	39,518
Income on and equity in (losses) of joint ventures	293			—			293
Total assets	4,686,248			30,882			4,717,130
Three Months Ended October 30, 2010:
Net sales from external customers	$	1,320,568		$	23,550		$	1,344,118
Gross profit	485,629			1,015			486,644
Depreciation and amortization	64,906			47			64,953
Interest and debt expense (income), net	18,118			(75		)	18,043
Income (loss) before income taxes and income on and equity in (losses) of joint ventures	21,586			(88		)	21,498
Income on and equity in (losses) of joint ventures	(1,082		)	—			(1,082		)
Total assets	4,644,060			68,031			4,712,091
Nine Months Ended October 29, 2011:
Net sales from external customers	$	4,247,462		$	46,095		$	4,293,557
Gross profit	1,551,936			339			1,552,275
Depreciation and amortization	192,726			136			192,862
Interest and debt expense (income), net	54,567			(120		)	54,447
Income (loss) before income taxes and income on and equity in (losses) of joint ventures	182,733			(3,198		)	179,535
Income on and equity in (losses) of joint ventures	4,238			—			4,238
Total assets	4,686,248			30,882			4,717,130
Nine Months Ended October 30, 2010:
Net sales from external customers	$	4,108,112		$	78,512		$	4,186,624
Gross profit	1,483,197			1,256			1,484,453
Depreciation and amortization	192,987			137			193,124
Interest and debt expense (income), net	55,520			(159		)	55,361
Income (loss) before income taxes and income on and equity in (losses) of joint ventures	107,908			(1,780		)	106,128
Income on and equity in (losses) of joint ventures	(3,010		)	—			(3,010		)
Total assets	4,644,060			68,031			4,712,091

Intersegment construction revenues of $10.8 million and $25.8 million for the three and nine months ended October 29, 2011, respectively, and intersegment construction revenues of $9.5 million and $22.2 million for the three and nine months ended October 30, 2010, respectively, were eliminated during consolidation and have been excluded from net sales for the respective periods.