Dillard's 2009 Annual Report Download - page 41

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commission structures and related benefits; system failures or data security; possible future acquisitions
of store properties from other department store operators; the continued availability of financing in
amounts and at the terms necessary to support the Company’s future business; fluctuations in LIBOR
and other base borrowing rates; potential disruption from terrorist activity and the effect on ongoing
consumer confidence; epidemic, pandemic or other public health issues; potential disruption of
international trade and supply chain efficiencies; world conflict and the possible impact on consumer
spending patterns and other economic and demographic changes of similar or dissimilar nature.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The table below provides information about the Company’s obligations that are sensitive to
changes in interest rates. The table presents maturities of the Company’s long-term debt and
subordinated debentures along with the related weighted-average interest rates by expected maturity
dates.
(in thousands of dollars)
Expected Maturity Date
(fiscal year) 2010 2011 2012 2013 2014 Thereafter Total Fair Value
Long-term debt ......... $1,719 $49,166 $76,789 $— $— $621,632 $749,306 $645,045
Average fixed interest rate . 7.5% 9.1% 7.4% — — 7.3% 7.3%
Subordinated debentures . . $ — $ — $ — $— $— $200,000 $200,000 $150,000
Average interest rate ..... —% —% —% —% —% 7.5% 7.5%
The Company is exposed to market risk from changes in the interest rates under its $1.2 billion
revolving credit facility. Outstanding balances under this facility bear interest at a variable rate based
on JPMorgan’s Base Rate minus 0.5% or LIBOR plus 1.0%. The Company had average borrowings of
$57.2 million during fiscal 2009. Based on the average amount outstanding during fiscal 2009, a 100
basis point change in interest rates would result in an approximate $0.6 million annual change to
interest expense.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of the Company and notes thereto are included in this
report beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
As disclosed in the Company’s current report on Form 8-K filed on May 7, 2009, the Company
changed its independent registered public accountants effective for the fiscal year ended January 30,
2010. There were no disagreements or reportable events related to the change in accountants.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
The Company has established and maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Exchange Act). The Company’s management, with the participation of our
CEO and CFO, has evaluated the effectiveness of the Company’s disclosure controls and procedures as
of the end of the fiscal year covered by this annual report, and based on that evaluation, the
Company’s CEO and CFO have concluded that these disclosure controls and procedures were effective.
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