Dillard's 2004 Annual Report Download - page 53

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Fiscal 2004 Fiscal 2003 Fiscal 2002
Weighted Weighted Weighted
Average Average Average
Fixed Options Shares Exercise Price Shares Exercise Price Shares Exercise Price
Outstanding, beginning of year 7,870,739 $22.45 9,669,755 $24.72 10,708,646 $24.58
Granted - - - - 2,312,375 24.02
Exercised (2,657,215) 16.00 (122,375) 10.44 (2,150,111) 20.62
Forfeited (1,368,515) 28.09 (1,676,641) 35.27 (1,201,155) 31.53
Outstanding, end of year 3,845,009 $24.91 7,870,739 $22.45 9,669,755 $24.72
Options exercisable at year-end 2,486,134 $27.24 5,823,459 $23.56 6,793,960 $26.63
Weighted-average fair value of
options granted during the year $- $- $6.91
The following table summarizes information about stock options outstanding at January 29, 2005:
Options Outstanding Options Exercisable
Weighted-Average
Range of Options Remaining Weighted-Average Options Weighted-Average
Exercise Prices Outstanding Contractual Life (Yrs.) Exercise Price Exercisable Exercise Price
$10.44 - $15.74 606,141 1.04 $10.63 267,866 $10.83
$18.13 - $25.13 2,537,868 2.84 24.11 1,517,268 24.17
$28.19 - $40.22 701,000 0.32 40.15 701,000 40.15
3,845,009 2.10 $24.91 2,486,134 $27.24
SFAS No. 123, “Accounting for Stock-Based Compensation,” permits compensation expense to be measured based on
the fair value of the equity instrument awarded. In accordance with Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees,” the Company uses the intrinsic value method of accounting for stock
options. No compensation cost has been recognized in the consolidated statements of operations for the Company’s
stock option plans.
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 2004 Fiscal 2003 Fiscal 2002
Risk-free interest rate - - 1.96%
Expected option life (years) - - 3.1
Expected volatility - - 41.6%
Expected dividend yield - - 0.67%
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.
13. Leases and Commitments
Rental expense consists of the following:
Fiscal Fiscal Fiscal
(in thousands of dollars) 2004 2003 2002
Operating leases:
Buildings:
Minimum rentals $33,266 $38,087 $40,862
Contingent rentals 6,941 8,732 10,433
Equipment 14,567 17,282 16,806
$54,774 $64,101 $68,101
F-21