Dillard's 2004 Annual Report Download - page 50

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Prior to February 2, 2004, Guaranteed Preferred Beneficial Interests in the Company’s Subordinated Debentures also
included $331.6 million liquidation amount of LIBOR plus 1.56% Preferred Securities, due January 29, 2009 (the
“Preferred Securities”) by Horatio Finance V.O.F., a wholly owned subsidiary of the Company. Holders of the Preferred
Securities were entitled to receive quarterly dividends at LIBOR plus 1.56%. The Company redeemed the $331.6
million Preferred Securities on February 2, 2004.
9. Benefit Plans
The Company has a retirement plan with a 401(k)-salary deferral feature for eligible employees. Under the terms of the
plan, eligible employees may contribute up to 20% of eligible pay. Eligible employees with one year of service may
elect to make a contribution of up to 5% of eligible pay which will be matched 100% only if invested in the Company’s
common stock. The Company contributions are used to purchase Class A Common Stock of the Company for the
account of the employee. The terms of the plan provide a six-year graduated-vesting schedule for the Company
contribution portion of the plan. The Company incurred expense of $11 million, $12 million and $14 million for fiscal
2004, 2003 and 2002, respectively, for the plan.
The Company has a nonqualified defined benefit plan for certain officers. The plan is noncontributory and provides
benefits based on years of service and compensation during employment. Pension expense is determined using various
actuarial cost methods to estimate the total benefits ultimately payable and allocates this cost to service periods. The
pension plan is unfunded. The actuarial assumptions used to calculate pension costs are reviewed annually. The
Company expects to make a contribution to the pension plan of approximately $3.6 million in fiscal 2005. The
Company uses January 31 as the measurement date for determining pension plan obligations.
The accumulated benefit obligations (“ABO”), change in projected benefit obligation (“PBO”), change in plan assets,
funded status, and reconciliation to amounts recognized in the consolidated balance sheets are as follows:
(in thousands of dollars) January 29, 2005 January 31, 2004
Change in projected benefit obligation:
PBO at beginning of year $77,983 $64,360
Service cost 1,770 993
Interest cost 4,578 4,235
Actuarial loss 7,300 11,674
Benefits paid (3,369) (3,279)
PBO at end of year $88,262 $77,983
ABO at end of year $85,682 $75,286
January 29, 2005 January 31, 2004
Change in plan assets:
Fair value of plan assets at beginning of year $ - $ -
Employer contribution 3,369 3,279
Benefits paid (3,369) (3,279)
Fair value of plan assets at end of year $ - $ -
Funded status (PBO less plan assets) $88,262 $77,983
Unamortized prior service costs (5,108) (5,734)
Unrecognized net actuarial loss (23,413) (17,259)
Intangible asset 5,108 5,734
Unrecognized net loss 20,833 15,056
Accrued benefit cost $85,682 $75,780
ABO in excess of plan assets $85,682 $75,286
Amounts recognized in the balance sheets:
Accrued benefit liability $59,741 $54,990
Intangible asset 5,108 5,734
Accumulated other comprehensive loss 20,833 15,056
Net amount recognized $85,682 $75,780
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