Dillard's 2009 Annual Report Download - page 36

2010. Therefore, repair and replacement costs will be borne by us for damage to any of these stores
from ‘‘named storms’’ in fiscal 2010. We have created early response teams to assess and coordinate
cleanup efforts should some stores be impacted by storms. We have also redesigned certain store
features to lessen the impact of storms and have equipment available to assist in the efforts to ready
the stores for normal operations.
During fiscal 2009, 2008 and 2007, we received proceeds from the sale of property and equipment
of $11.6 million, $67.1 million and $48.2 million, respectively, and recorded related gains of $3.2 million
and $24.6 million for fiscal 2009 and 2008, respectively, and a related loss in operating activities of
$1.5 million during fiscal 2007. During fiscal 2008, we also recorded a $3.9 million loss related to
property damages sustained on one store during Hurricane Ike.
On August 29, 2008, the Company purchased the remaining interest in CDI for a cash purchase
price of $9.8 million. This acquisition was accounted for under the purchase method and, accordingly,
(1) the purchase price has been allocated to CDI’s assets and liabilities based on their estimated fair
values as of the date of purchase and (2) CDI’s results of operations have been included in the
Company’s results of operations since the date of purchase. Upon recognition of the acquisition, the
Company acquired $14.1 million in cash.
Financing Activities
Our primary source of cash inflows from financing activities is our $1.2 billion revolving credit
facility. Financing cash outflows generally include the repayment of borrowings under the revolving
credit facility, the repayment of mortgage notes or long-term debt, the payment of dividends and the
purchase of treasury stock.
Cash used in financing activities increased to $245.7 million in fiscal 2009 from $223.9 million in
fiscal 2008. This decrease in cash flow of $21.8 million was primarily due to the repayment of
short-term borrowings partially offset by a decrease in principal debt payments.
Revolving Credit Agreement. At January 30, 2010, the Company maintained a $1.2 billion
revolving credit facility (‘‘credit agreement’’) with JPMorgan Chase Bank (‘‘JPMorgan’’) as agent for
various banks, secured by the inventory of Dillard’s, Inc. operating subsidiaries. The credit agreement
expires December 12, 2012. Borrowings under the credit agreement accrued interest at either
JPMorgan’s Base Rate minus 0.5% or LIBOR plus 1.0% (1.23% at January 30, 2010) subject to certain
availability thresholds as defined in the credit agreement. During the period April 1, 2009 through
June 30, 2009, interest on borrowings under the credit agreement accrued interest at either JPMorgan’s
Base Rate minus 0.25% or LIBOR plus 1.25% due to lower average availability (which is analyzed each
calendar quarter).
Limited to 85% of the inventory of certain Company subsidiaries, availability for borrowings and
letter of credit obligations under the credit agreement was approximately $816.3 million at January 30,
2010. No borrowings were outstanding at January 30, 2010. Letters of credit totaling $89.6 million were
issued under this credit agreement leaving unutilized availability under the facility of $726.7 million at
January 30, 2010. There are no financial covenant requirements under the credit agreement provided
that availability for borrowings and letters of credit exceeds $100 million. The Company pays an annual
commitment fee to the banks of 0.25% of the committed amount less outstanding borrowings and
letters of credit. The Company had weighted-average borrowings of $57.2 million and $251.3 million
during fiscal 2009 and 2008, respectively.
Long-term Debt. At January 30, 2010, the Company had $749.3 million of long-term debt,
comprised of unsecured notes, a term note and a mortgage note outstanding. The unsecured notes bear
interest at rates ranging from 6.63% to 9.13% with due dates from 2011 through 2028, and the
mortgage note bears interest at 9.25% with a due date of 2013. The term note, with an outstanding
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