Dillard's 2013 Annual Report Download - page 23

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17
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Dillard's, Inc. operates 296 retail department stores spanning 29 states and an Internet store. The Company also operates a
general contractor, CDI, a portion of whose business includes constructing and remodeling stores for the Company, which is a
reportable segment separate from our retail operations.
In accordance with the National Retail Federation fiscal reporting calendar, the fiscal 2013 and 2011 reporting periods
presented and discussed below ended February 1, 2014 and January 28, 2012, respectively, and each contained 52 weeks. The
fiscal 2012 reporting period presented and discussed below ended February 2, 2013 and contained 53 weeks. For
comparability purposes, where noted, some of the information discussed below is based upon comparison of the 52 weeks
ended February 1, 2014, February 2, 2013 and February 4, 2012.
EXECUTIVE OVERVIEW
Fiscal 2013
Comparable retail sales increased 1% over last year, yet while improved, these lower than anticipated sales necessitated
heavier markdowns. As a result, gross profit from retail operations declined 40 basis points over last year, mainly from a
slowdown in the second half of the year, while selling, general and administrative expenses improved 40 basis points of sales.
During the year, we repurchased $301.6 million, or 3.9 million shares, of our Class A Common Stock. Net income was
$323.7 million, or $7.10 per share, for the year, and operating cash flow was $501.8 million.
Included in net income for fiscal 2013 are:
• an $11.7 million pretax gain ($7.6 million after tax or $0.17 per share) related to the sale of an investment.
• a $5.4 million pretax charge ($3.5 million after tax or $0.08 per share) for asset impairment and store closing
charges related to the write-down of certain cost method investments.
• a $1.5 million pretax gain ($1.0 million after tax or $0.02 per share) related to a pension adjustment.
Included in net income of $336.0 million, or $6.87 per share, for fiscal 2012 are:
• an $11.4 million pretax gain ($7.4 million after tax or $0.15 per share) related to the sale of three former retail
store locations.
• a $1.6 million pretax charge ($1.0 million after tax or $0.02 per share) for asset impairment and store closing
charges related to the write-down of a property held for sale and of an operating property.
• a $1.7 million income tax benefit ($0.03 per share) due to a reversal of a valuation allowance related to a
deferred tax asset consisting of a capital loss carryforward.
• an $18.1 million income tax benefit ($0.37 per share) due to a one-time deduction related to dividends paid to
the Dillard's, Inc. Investment and Employee Stock Ownership Plan.
As of February 1, 2014, we had working capital of $881.8 million (including cash and cash equivalents of $237.1
million) and $814.8 million of total debt outstanding, excluding capital lease obligations, with no scheduled maturities until late
fiscal 2017. We operated 296 total stores as of February 1, 2014, a decrease of six stores from the same period last year.