Dillard's 2012 Annual Report Download - page 42

Long-term Debt. At February 2, 2013, the Company had $614.8 million of long-term debt,
comprised of unsecured notes. The unsecured notes bear interest at rates ranging from 6.625% to
7.875% with due dates from fiscal 2017 through fiscal 2028.
The Company reduced its net level of outstanding debt and capital leases during fiscal 2012 by
$79.0 million compared to a reduction of $56.8 million in fiscal 2011, primarily due to the payment of
regularly scheduled maturities of the unsecured notes, term note and mortgage principal.
In addition to paying the regularly scheduled maturities of the unsecured notes, term note and
mortgage principal during fiscal 2011, the Company repurchased $5.7 million face amount of its 6.625%
notes with an original maturity on January 15, 2018, resulting in a pretax gain of approximately $0.2
million which was recorded in net interest and debt expense.
The debt and capital lease decline of $17.5 million in fiscal 2010 was due to (1) regularly
scheduled payments on the Company’s term note and mortgage principal, (2) the payoff of $13 million
in capital lease obligations for two corporate aircraft and (3) the repurchase of $1.2 million face
amount of the Company’s 7.13% notes with an original maturity on August 1, 2018.
There are no maturities of long-term debt during fiscal 2013 through fiscal 2016, and $87.2 million
of long-term debt matures in fiscal 2017.
Subordinated Debentures. As of February 2, 2013, the Company had $200 million outstanding of
its 7.5% subordinated debentures due August 1, 2038. All of these subordinated debentures were held
by Dillard’s Capital Trust I, a 100% owned, unconsolidated finance subsidiary of the Company. The
Company has the right to defer the payment of interest on the subordinated debentures at any time for
a period not to exceed 20 consecutive quarters; however, the Company has no present intention of
exercising this right to defer interest payments.
Fiscal 2013 Outlook
During fiscal 2013, the Company expects to finance its capital expenditures and its working capital
requirements, including stock repurchases, from cash on hand, cash flows generated from operations
and utilization of the credit facility. At present, there are numerous general business and economic
factors impacting the retail industry that could affect the Company’s liquidity. These factors include:
consumer confidence; high levels of unemployment in various sectors; rising gas prices; economic
instability around the globe; and other factors that are both separate from, and outgrowths of, these
listed. These conditions could impact our net sales which may result in reduced cash flows if we are
unable to appropriately manage our inventory levels and expenses. Depending upon our actual and
anticipated sources and uses of liquidity, the Company will from time to time consider possible
financing transactions, the proceeds of which could be used to refinance current indebtedness or for
other corporate purposes.
OFF-BALANCE-SHEET ARRANGEMENTS
The Company has not created, and is not party to, any special-purpose or off-balance-sheet entities
for the purpose of raising capital, incurring debt or operating the Company’s business. The Company
does not have any off-balance-sheet arrangements or relationships that are reasonably likely to
materially affect the Company’s financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or the availability of capital resources.
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