Dillard's 2013 Annual Report Download - page 28

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22
finalization of the Company's income tax audits and lapse of statutes of limitation. The Company does not expect a material
change in unrecognized tax benefits in the next twelve months.
Pension obligations. The discount rate that the Company utilizes for determining future pension obligations is based
on the Citigroup Above Median Pension Index Curve on its annual measurement date and is matched to the future expected
cash flows of the benefit plans by annual periods. The discount rate increased to 4.4% as of February 1, 2014 from 4.0% as of
February 2, 2013. We believe that these assumptions have been appropriate and that, based on these assumptions, the pension
liability of $174 million is appropriately stated as of February 1, 2014; however, actual results may differ materially from those
estimated and could have a material impact on our consolidated financial statements. A further 50 basis point change in the
discount rate would increase or decrease the pension liability by approximately $10.7 million. The Company expects to make a
contribution to the pension plan of approximately $2.7 million in fiscal 2014. The Company expects pension expense to be
approximately $14.7 million in fiscal 2014 with a liability of $185.9 million at January 31, 2015.
RESULTS OF OPERATIONS
The following table sets forth the results of operations and percentage of net sales, for the periods indicated:
For the years ended
February 1, 2014 February 2, 2013 January 28, 2012
(in thousands of dollars) Amount
% of
Net
Sales Amount
% of
Net
Sales Amount
% of
Net
Sales
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,531,647 100.0% $ 6,593,169 100.0% $ 6,263,600 100.0%
Service charges and other income . . . . . . . . . . . . 160,130 2.5 158,426 2.4 141,884 2.3
6,691,777 102.5 6,751,595 102.4 6,405,484 102.3
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,223,715 64.7 4,247,108 64.4 4,047,269 64.6
Selling, general and administrative expenses . . . 1,632,036 25.0 1,671,526 25.4 1,630,907 26.0
Depreciation and amortization. . . . . . . . . . . . . . . 255,490 3.9 259,621 3.9 257,685 4.1
Rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,833 0.4 34,838 0.5 48,110 0.8
Interest and debt expense, net . . . . . . . . . . . . . . . 64,505 1.0 69,596 1.1 72,059 1.2
Gain on litigation settlement . . . . . . . . . . . . . . . . — 0.0 — — (44,460)(0.7)
Gain on disposal of assets . . . . . . . . . . . . . . . . . . (12,379) (0.2)(12,435)(0.2)(3,955)(0.1)
Asset impairment and store closing charges . . . . 5,353 0.1 1,591 0.0 1,200 0.0
Income before income taxes and income on and
equity in losses of joint ventures . . . . . . . . . . . . 496,224 7.6 479,750 7.3 396,669 6.3
Income taxes (benefit) . . . . . . . . . . . . . . . . . . . . . 173,400 2.7 145,060 2.2 (62,518)(1.0)
Income on and equity in losses of joint ventures. 847 0.0 1,272 — 4,722 0.1
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 323,671 5.0% $ 335,962 5.1% $ 463,909 7.4%