Dillard's 2002 Annual Report Download - page 21

Download and view the complete annual report

Please find page 21 of the 2002 Dillard's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 53

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The table below provides information about the Company’s obligations that are sensitive to changes in interest rates.
The table presents maturities of the Company’s long-term debt and Guaranteed Beneficial Interests in the Company’s
Subordinated Debentures along with the related weighted-average interest rates by expected maturity dates.
(IN THOUSANDS OF DOLLARS)
Expected Maturity Date
(fiscal year) 2003 2004 2005 2006 2007 Thereafter Total Fair Value
Long-term debt $138,814 $207,041 $296,675 $298,483 $200,640 $1,190,167 $2,331,820 $2,241,471
Average interest rate 6.2% 6.5% 3.4% 5.0% 6.9% 7.2% 6.3%
Guaranteed Beneficial
Interests in the Company’s
Subordinated Debentures $- $- $- $- $- $531,579 $531,579 $473,179
Average interest rate -% -% -% -% -% 4.7% 4.7%
During the year ended February 1, 2003, the Company repurchased $111.9 million of its outstanding unsecured notes
prior to their related maturity dates. Interest rates on the repurchased securities ranged from 6.1% to 9.5%. Maturity
dates ranged from 2002 to 2028. The Company also retired the remaining $143 million of its 6.31% Reset Put
Securities due August 1, 2012 prior to their maturity date.
The Company is exposed to market risk from changes in the interest rates on certain receivable financing facilities
and $331.6 million of the Guaranteed Beneficial Interests in the Company’s Subordinated Debentures. Outstanding
balances under these facilities bear interest at a variable rate based on a spread over LIBOR. Based on the amount
outstanding as of February 1, 2003, a 100 basis point change in interest rates would result in an approximate $5.3
million annual change to interest expense.
The $331.6 million of the Guaranteed Beneficial Interests in the Company’s Subordinated Debentures are subject to
mandatory remarketing on January 29, 2004 if a financing extension agreement has not been reached. Solicited bids
are subject to maximum applicable rates in effect immediately prior to the remarketing date.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of the Company and notes thereto are included in this report
beginning on page F-1.
ITEM 9. CHANGES IN AND DISGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
15