Business Segments

6 Months Ended

Aug. 03, 2013

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 August 3, 2013:
Net sales from external customers	$	1,458,778	$	21,074		$	1,479,852
Gross profit	501,417		1,613			503,030
Depreciation and amortization	64,186		58			64,244
Interest and debt expense (income), net	16,262		(16		)	16,246
Income before income taxes and income on and equity in losses of joint ventures	55,282		476			55,758
Income on and equity in losses of joint ventures	408		—			408
Total assets	4,074,433		33,030			4,107,463
Three Months Ended July 28, 2012:
Net sales from external customers	$	1,456,025	$	31,900		$	1,487,925
Gross profit	498,717		1,406			500,123
Depreciation and amortization	64,164		51			64,215
Interest and debt expense (income), net	17,708		(35		)	17,673
Income before income taxes and income on and equity in losses of joint ventures	48,028		177			48,205
Income on and equity in losses of joint ventures	147		—			147
Total assets	4,215,718		45,744			4,261,462
Six Months Ended August 3, 2013:
Net sales from external customers	$	2,988,778	$	40,210		$	3,028,988
Gross profit	1,111,306		3,075			1,114,381
Depreciation and amortization	129,243		117			129,360
Interest and debt expense (income), net	32,592		(36		)	32,556
Income before income taxes and income on and equity in losses of joint ventures	235,181		798			235,979
Income on and equity in losses of joint ventures	817		—			817
Total assets	4,074,433		33,030			4,107,463
Six Months Ended July 28, 2012:
Net sales from external customers	$	2,978,000	$	59,244		$	3,037,244
Gross profit	1,089,780		2,749			1,092,529
Depreciation and amortization	128,139		96			128,235
Interest and debt expense (income), net	35,199		(71		)	35,128
Income before income taxes and income on and equity in losses of joint ventures	194,996		327			195,323
Income on and equity in losses of joint ventures	982		—			982
Total assets	4,215,718		45,744			4,261,462

Intersegment construction revenues of $10.6 million and $12.4 million for the three and six months ended August 3, 2013, respectively, and intersegment construction revenues of $9.9 million and $17.8 million for the three and six months ended July 28, 2012, respectively, were eliminated during consolidation and have been excluded from net sales for the respective periods.