Dillard's 2005 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2005 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 72

  • 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
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72

A breakdown of the asset impairment and store closing charges is as follows:
Fiscal 2005 Fiscal 2004 Fiscal 2003
(in thousands of dollars)
Number of
Locations
Impairment
Amount
Number of
Locations
Impairment
Amount
Number of
Locations
Impairment
Amount
Stores closed during previous fiscal
year .......................... — $ — 3 $ 2,928 3 $ 3,809
Stores to close during current fiscal
year .......................... 5 8,729 4 4,052 4 17,115
Store impaired based on cash flows . . . 9 12,899 1 703 1 1,293
Wholly-owned subsidiary ........... 7 40,106 — — — —
Non-operating facilities ............. — — 2 4,170 7 16,030
Joint Venture ..................... — — 1 7,564 1 5,480
Total ....................... 21 $61,734 11 $19,417 16 $43,727
Following is a summary of the activity in the reserve established for asset impairment and store closing
charges:
(in thousands of dollars)
Balance,
beginning
of year Charges
Cash
Payments
Balance,
end of
year
Fiscal 2005
Rent, property taxes and utilities ................................ $2,905 $3,703 $2,327 $4,281
Fiscal 2004
Rent, property taxes and utilities ................................ — 3,080 175 2,905
15. Fair Value Disclosures
The estimated fair values of financial instruments which are presented herein have been determined by the
Company using available market information and appropriate valuation methodologies. However, considerable
judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of amounts the Company could realize in a current market
exchange.
The fair value of trade accounts receivable is determined by discounting the estimated future cash flows at
current market rates, after consideration of credit risks and servicing costs using historical rates. The fair value of
the Company’s long-term debt and Guaranteed Preferred Beneficial Interests in the Company’s Subordinated
Debentures is based on market prices or dealer quotes (for publicly traded unsecured notes) and on discounted
future cash flows using current interest rates for financial instruments with similar characteristics and maturity
(for bank notes and mortgage notes).
The fair value of the Company’s cash and cash equivalents and trade accounts receivable approximates their
carrying values at January 28, 2006 and January 29, 2005 due to the short-term maturities of these instruments.
The fair value of the Company’s long-term debt at January 28, 2006 and January 29, 2005 was $1.23 billion and
$1.47 billion, respectively. The carrying value of the Company’s long-term debt at January 28, 2006 and
January 29, 2005 was $1.26 billion and $1.41 billion, respectively. The fair value of the Guaranteed Preferred
Beneficial Interests in the Company’s Subordinated Debentures at January 28, 2006 and January 29, 2005 was
$196 million and $199 million, respectively. The carrying value of the Guaranteed Preferred Beneficial Interests
in the Company’s Subordinated Debentures at January 28, 2006 and January 29, 2005 was $200 million and $200
million, respectively.
F-24