Dillard's 2003 Annual Report Download - page 50

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The fair value of each option grant is estimated on the date of each grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions:
Fiscal 2003 Fiscal 2002 Fiscal 2001
Risk-free interest rate - 1.96% 2.27%
Expected option life (years) - 3.1 2.0
Expected volatility - 41.6% 44.0%
Expected dividend yield - 0.67% 1.02%
The fair values generated by the Black-Scholes model may not be indicative of the future benefit, if any, that may be received by the
option holder.
12. Leases and Commitments
Rental expense consists of the following:
Fiscal Fiscal Fiscal
(in thousands of dollars) 2003 2002 2001
Operating leases:
Buildings:
Minimum rentals $38,087 $40,862 $45,066
Contingent rentals 8,732 10,433 10,310
Equipment 17,282 16,806 16,757
64,101 68,101 72,133
Contingent rentals
on capital leases - - 650
$64,101 $68,101 $72,783
Contingent rentals on certain leases are based on a percentage of annual sales in excess of specified amounts. Other contingent rentals
are based entirely on a percentage of sales.
The future minimum rental commitments as of January 31, 2004 for all noncancelable leases for buildings and equipment are as
follows:
(in thousands of dollars) Operating Capital
Fiscal Year Leases Leases
2004 $51,309 $4,095
2005 41,948 3,813
2006 38,587 3,429
2007 29,904 2,578
2008 23,435 2,342
After 2008 80,890 19,251
Total minimum lease payments $266,073 35,508
Less amount representing interest (15,671)
Present value of net minimum
lease payments (of which
$2,126 is currently payable) $19,837
Renewal options from three to 25 years exist on the majority of leased properties. At January 31, 2004, the Company is committed to
incur costs of approximately $167 million to acquire, complete and furnish certain stores and equipment.
Various legal proceedings, in the form of lawsuits and claims, which occur in the normal course of business are pending against the
Company and its subsidiaries. In the opinion of management, disposition of these matters is not expected to materially affect the
Company's financial position, cash flows or results of operations.
F-18