Dillard's 2003 Annual Report Download - page 24

At January 31, 2004, the Company has $50 million of variable rate (currently 1.08%) short-term borrowings under its
accounts receivable conduit facilities. The Company repurchased $6.0 million of its outstanding unsecured notes prior to
their related maturity dates. The Company also retired the remaining $125.9 million of its 6.39% Reset Put Securities
(“REPS”) due August 1, 2013 prior to their maturity dates. Interest rates on the repurchased securities ranged from
6.39% to 6.88%. Maturity dates ranged from 2004 to 2013.
During 2003, the Company reduced its net level of outstanding debt and capital leases by $221 million through
scheduled debt maturities and repurchases of notes prior to their related maturity dates. Maturities of long-term debt
over the next five years are $166 million, $292 million, $298 million, $201 million and $201 million, respectively.
Third-Party Financing
The Company has the following financing sources available to supplement cash flows from operations:
• Accounts receivable conduit,
• Revolving credit agreement, and
• Shelf registration statement.
Accounts Receivable Conduit
The Company utilizes credit card securitizations as part of its overall funding strategy. The Company had $400 million
of long-term debt outstanding under this agreement on the consolidated balance sheet as of January 31, 2004 and
February 1, 2003.
At January 31, 2004 and February 1, 2003, the Company had $50.0 million and $0 outstanding, respectively, in short-
term borrowings under its accounts receivable conduit facilities related to seasonal financing needs. Remaining available
short-term borrowings under these conduit facilities at January 31, 2004 were $450.0 million. These facilities were
subsequently reduced to an availability of $400 million and extended to a maturity date of September 30, 2004.
Revolving Credit Agreement
During fiscal 2003, the Company amended and extended its revolving credit agreement (“credit agreement”) to increase
the amount available under this facility from $400 million to $1 billion ($835 million of the facility was available upon
closing on December 12, 2003, with an additional $165 million becoming available immediately upon the Preferred
Security redemption discussed below). Borrowings under the credit agreement accrue interest at JPMorgan’s Base Rate
or LIBOR plus 1.50% (currently 2.60%) subject to certain availability thresholds as defined in the credit agreement.
Availability for borrowings and letter of credit obligations under the credit agreement is limited to 75% of the inventory
of certain Company subsidiaries (approximately $1.2 billion at January 31, 2004). There are no financial covenant
requirements under the credit agreement provided availability exceeds $100 million. The credit agreement expires on
December 12, 2008. At January 31, 2004, letters of credit totaling $75.5 million were issued under this facility. There
was no funded debt outstanding under the revolving credit agreement at January 31, 2004.
Shelf Registration Statement
At the end of fiscal 2003, the Company had an outstanding shelf registration statement for securities in the amount of
$750 million.
Long-term Debt
At January 31, 2004, the Company had $1.6 billion of unsecured notes and mortgage notes outstanding. The unsecured
notes bear interest at rates ranging from 6.30% to 9.50% with due dates from 2003 through 2028. The mortgage notes
bear interest at rates ranging from 7.25% to 13.25% with due dates through 2013.
Stock Repurchase
In May 2000, the Company announced that the Board of Directors authorized the repurchase of up to $200 million of its
Class A Common Stock. During fiscal 2003, the Company repurchased approximately $18.9 million of Class A
Common Stock, representing 1.5 million shares at an average price of $12.99 per share. Approximately $56 million in
share repurchase authorization remained under this open-ended plan at January 31, 2004.
Guaranteed Beneficial Interests In the Company’s Subordinated Debentures
The Company entered into an agreement to redeem the $331.6 million liquidation amount of Preferred Securities of
Horatio Finance V.O.F., a wholly owned subsidiary of the Company, effective February 2, 2004. The Company
redeemed the $331.6 million Preferred Securities on February 2, 2004 as planned, with $100 million borrowed under its
amended revolving credit agreement and the balance borrowed under the Company’s accounts receivable securtization
conduit facilities. Short-term borrowings under both the credit facility and accounts receivable securitization conduit
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