Dillard's - 10-Q quarterly report FY

DILLARD'S, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
November 3, 2001

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Dillard’s, Inc.(the “Company”) have been prepared in
accordance with accounting principles generally accepted in the United States of America for interim financial information and with
the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United States for complete financial statements. In accordance
with Emerging Issues Task Force (“EITF”) Issue 00-10, “Accounting for Shipping and Handling Fees and Costs,”
the Company has reclassified shipping and handling reimbursements to Other Income for all periods. Certain prior period
balances have been reclassified to conform with current period presentation. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Operating results for the three, nine and twelve month periods ended November 3, 2001 are not necessarily indicative of the results
that may be expected for the fiscal year ending February 2, 2002, due to the seasonal nature of the business.
For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual
report on Form 10-K for the fiscal year ended February 3, 2001.

Note 2. Earnings Per Share Data

The following table sets forth the computation of basic and diluted earnings per share ("EPS") for the periods indicated (in
thousands, except per share data).
Three Months Ended Nine Months Ended Twelve Months Ended
---------------------------- ------------------------------ -----------------------------
November 3, October 28, November 3, October 28, November 3, October 28,
2001 2000 2001 2000 2001 2000
---------------------------- ------------------------------ -----------------------------
Basic:
Earnings (loss) before extraordinary item
and accounting change $(40,241) $ (19,108) $ (34,975) $ 37,675 $24,180 $ 63,465
Extraordinary gain 125 15,475 5,247 19,866 12,692 19,866
Cumulative effect of accounting change - - - (129,991) - (129,991)
---------------------------- ------------------------------ -----------------------------
Net earnings (loss) available for
per-share calculations $ (40,116) $ (3,633) $ (29,728) $ (72,450) $36,872 $(46,660)
============================ ============================== =============================
Average shares outstanding 83,710 90,716 84,111 93,035 84,478 95,003
============================ ============================== =============================
Per Share of Common Stock
Earnings (loss) before extraordinary item
and accounting change $ (0.48) $ (0.21) $ (0.41) $ 0.41 $ 0.29 $ 0.67
Extraordinary gain - 0.17 0.06 0.21 0.15 0.21
Cumulative effect of accounting change - - - (1.40) - (1.37)
---------------------------- ------------------------------ -----------------------------
Net income (loss) $ (0.48) $ (0.04) $ (0.35) $ (0.78) $ 0.44 $ (0.49)
============================ ============================== =============================Three Months Ended Nine Months Ended Twelve Months Ended
---------------------------- ------------------------------ -----------------------------
November 3, October 28, November 3, October 28, November 3, October 28,
2001 2000 2001 2000 2001 2000
----------------------------- ----------------------------- -----------------------------
Diluted:
Earnings (loss) before extraordinary item
and accounting change $(40,241) $ (19,108) $ (34,975) $ 37,675 $24,180 $ 63,465
Extraordinary gain 125 15,475 5,247 19,866 12,692 19,866
Cumulative effect of accounting change - - - (129,991) - (129,991)
----------------------------- ----------------------------- -----------------------------
Net earnings (loss) available for
per-share calculations $(40,116) $ (3,633) $ (29,728) $ (72,450) $36,872 $ (46,660)
============================= ============================= =============================
Average shares outstanding 83,710 90,716 84,111 93,035 84,478 95,003
Stock options - - - - 397 12
----------------------------- ----------------------------- -----------------------------
Total average equivalent shares 83,710 90,716 84,111 93,035 84,875 95,015
============================= ============================= =============================
Per Share of Common Stock
Earnings (loss) before extraordinary item $ (0.48) $ (0.21) $ (0.41) $ 0.41 $ 0.28 $ 0.67
Extraordinary gain - 0.17 0.06 0.21 0.15 0.21
Cumulative effect of accounting change - - - (1.40) - (1.37)
----------------------------- ----------------------------- -----------------------------
Net income (loss) $ (0.48) $ (0.04) $ (0.35) $ (0.78) $ 0.43 $ (0.49)
============================= ============================= =============================

Stock options for which the exercise price was greater than that average market price of common shares were not included in the
computation of diluted earnings per share as the effect would be antidilutive. Options to purchase 9,433,998 and 9,409,131 shares
of Class A common stock at prices ranging from $18.13 to $40.22 per share were outstanding at November 3, 2001 and October 28,
2000, respectively, but were not included in the computation of diluted earnings per share because their exercise price was
greater than the average market price of the Company's common shares. Additionally, 398,594 and 491,842 options to purchase
common stock were excluded from the computation of diluted earnings per share due to the Company's net loss position for the three
months and nine months ended November 3, 2001, respectively.

Note 3. Common Stock Repurchase, Note Repurchase and Mortgage

For the nine months ended November 3, 2001 the Company repurchased approximately 1.3 million shares of Class A Common Stock valued
at approximately $22.3 million. Approximately $75 million in share repurchase authorization remained under this open-ended plan
at November 3, 2001.
During the quarter ended November 3, 2001, the Company repurchased $7.0 million of its outstanding unsecured notes prior to their
related maturity dates. During the nine months ended November 3, 2001, the Company repurchased $69.1 million of its outstanding
unsecured notes prior to their related maturity dates. During the nine months ended November 3, 2001, the Company also retired
$100 million of its 6.17% Reset Put Securities due August 1, 2011 prior to their maturity date. Interest rates on the repurchased
securities ranged from 6.17% to 9.1%. Maturity dates ranged from 2002 to 2023. In connection with these transactions, the
Company recorded after tax extraordinary gains during the quarter and nine months ended November 3, 2001 of $125,000 (net of
income taxes of $71,000) and $5.2 million (net of income taxes of $2.9 million), respectively.
During the quarter ended November 3, 2001, the Company borrowed $50.0 million at 7.25%. The mortgage note pays interest only on a
monthly basis with the entire unpaid principal balance due and payable on August 14, 2011. The Company's corporate headquarters
are pledged as collateral on the mortgage note.

Note 4. Accounting Change

Effective the beginning of fiscal 2000, the Company changed its method of accounting for
inventories under the retail inventory method. The change principally relates to the Company’s accounting
for allowances received from vendors, from recording such allowances directly as a reduction to cost of sales to
recording such allowances as a reduction to inventoriable product cost. The cumulative effect of this accounting
change reduced net income by $130 million after taxes (of $73.1 million) or $1.40 per share for the nine months
ended October 28, 2000. Financial statements for the three, nine and twelve months ended October 28, 2000 have
been restated to reflect this change in accordance with Statement of Financial Accounting Standards No. 3 “
Reporting Accounting Changes in Interim Financial Statements”.

Note 5. New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued two new pronouncements: Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets".
SFAS No. 141 addresses financial accounting and reporting for business combinations and supersedes APB No. 16, “Business
Combinations” and FASB Statement No. 38, “Accounting for Preacquisition Contingencies of Purchased
Enterprises”. All business combinations in the scope of this statement are to be accounted for using one method, the purchase
method. SFAS 141 is effective as follows: a) use of the pooling-of-interest method is prohibited for business
combinations initiated after June 30, 2001; and b) the provisions of SFAS 141 also apply to all business combinations accounted
for by the purchase method that are completed after June 30, 2001 (that is, the date of acquisition is July 2001 or later).
The Company has determined that the adoption of this statement will not have an impact on the consolidated financial statements.
SFAS No. 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB No.17
“Intangible Assets”. It changes the accounting for goodwill from an amortization method to an “impairment only”
approach. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets
recognized in an entity’s statement of financial position at that date, regardless of when those assets were initially
recognized. The Company is currently evaluating the impact of adopting this pronouncement on its current financial statements.
Application of the nonamortization provisions of the statement is expected to result in an annual increase in net income of $15.6
million.
In October 2001, the FASB issued SFAS No. 143, ” Accounting for Asset Retirement Obligations,” which requires companies
to record the fair value of a liability for asset retirement obligations in the period in which they are incurred.
The statement applies to a company’s legal obligations associated with the retirement of a tangible long-lived asset that
results from the acquisition, construction and development or through the normal operation of a long-lived asset. When a liability
is initially recorded, the company would capitalize the cost, thereby increasing the carrying amount of the related asset.
The capitalized asset retirement cost is depreciated over the life of the respective asset while the liability is accreted to its
present value. Upon settlement of the liability, the obligation is settled at its recorded amount or the company incurs a gain or
loss. The statement is effective for fiscal years beginning after June 30, 2002. The Company does not expect that the adoption of
SFAS No. 143 will have a material impact on the Company’s financial position or results of operations.
In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”
SFAS No. 144 addresses the accounting and reporting for the impairment or disposal of long-lived assets. The statement provides
a single accounting model for long-lived assets to be disposed of. New criteria must be met to classify the asset as an asset
held-for-sale. This statement also focuses on reporting the effects of a disposal of a segment of a business. This statement is
effective for fiscal years beginning after December 15, 2001. The Company is currently evaluating the impact of adopting this
pronouncement on its current financial statements.

ITEM 2. Management's Discussion and Analysis of Financial
Condition And Results Of Operations

Results of Operations

The following table sets forth the results of operations, expressed as a percentage of net sales, for the periods indicated:
Three Months Ended Nine Months Ended Twelve Months Ended
--------------------------- ---------------------------- ---------------------------
November 3, October 28, November 3, October 28, November 3, October 28,
2001 2000 2001 2000 2001 2000
------------- ------------ ------------- ------------- ------------- ------------
Net sales 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 70.1 70.3 67.7 67.5 67.9 67.7
------------- ------------ ------------- ------------- ------------- ------------
Gross profit 29.9 29.7 32.3 32.5 32.1 32.3
Advertising, selling, administrative
and general expenses 28.9 27.4 28.8 27.1 27.0 25.9
Depreciation and amortization 4.2 3.9 4.2 3.9 3.7 3.6
Rentals 0.8 0.8 0.8 0.8 0.9 0.9
Interest and debt expense 2.6 2.7 2.6 2.9 2.4 2.7
Impairment charges - - - - 0.6 0.8
------------- ------------ ------------- ------------- ------------- ------------
Total operating expenses 36.5 34.8 36.4 34.7 34.6 33.9
Service charges, interest and other 3.1 3.5 3.1 3.2 2.8 3.0
------------- ------------ ------------- ------------- ------------- ------------
Income (loss) before income taxes (3.5) (1.6) (1.0) 1.0 0.3 1.4
Income taxes (benefit) (1.4) (0.6) (0.4) 0.3 - 0.7
------------- ------------ ------------- ------------- ------------- ------------
Income (loss) before extraordinary item
and
and accounting change (2.1) (1.0) (0.6) 0.7 0.3 0.7
Extraordinary gain - 0.8 0.1 0.3 0.1 0.2
Cumulative effect of accounting change - - - (2.2) - (1.5)
------------- ------------ ------------- ------------- ------------- ------------
Net income (loss) (2.1) % (0.2) % (0.5) % (1.2) % 0.4 % (0.6) %
============= ============ ============= ============= ============= ============

Net Sales

Net sales decreased 5% for the three and nine month periods ended November 3, 2001, respectively, compared to the three and nine
month periods ended October 28, 2000. These decreases were primarily due to decreases in comparable store sales of 6% and 5% for the
respective three and nine month periods ended November 3, 2001 compared to the same periods in 2000. The weakest performing
merchandise categories for the three month period were men's clothing and home which decreased 9% and 8%, respectively. Sales
declined in the remaining merchandise categories with the exception of cosmetics that had an increase of 1%. Sales declined in all
merchandise categories for the nine months ended November 3, 2001 with the weakest performing merchandise categories being home and
men's clothing which declined 9% and 8%, respectively. Net sales decreased 3% for the twelve month period ended November 3, 2001
compared to the same period in 2000.

Cost of Sales

Cost of sales, as a percent of net sales, decreased to 70.1% for the quarter ended November 3, 2001 from 70.3% for the quarter ended
October 28, 2000. This decrease is due to higher markups in 2001 compared with 2000. Comparable store inventories decreased by 4%
from last year's third quarter as the Company continues to focus on controlling inventory levels.
Cost of sales, as a percentage of net sales, for the nine months ended November 3, 2001 and October 28, 2000 was 67.7% and 67.5%,
respectively. Cost of sales for the twelve months ended November 3, 2001 and October 28, 2000 was 67.9% and 67.7%, respectively.

Advertising, Selling, Administrative and General Expenses

Advertising, Selling, Administrative and General (“SG&A”) expenses, as a percentage of net sales, increased to 28.9%
for the quarter ended November 3, 2001 compared to 27.4% for the quarter ended October 28, 2000. The increase in SG&A expenses,
as a percent of net sales, is primarily due to a lack of sales leverage. SG&A expenses were $540 million for the quarter ended
November 3, 2001 compared to $541 million for the comparable period in 2000. >
Advertising, Selling,Administrative and General (“SG&A”) expenses, as a percentage of net sales, increased to 28.8%
for the nine months ended November 3, 2001 compared to 27.1% for the nine months ended October 28, 2000. The increase in SG&A
expenses, as a percent of net sales, is primarily due to a lack of sales leverage and higher payroll, advertising and insurance
costs. SG&A expenses were $1.62 billion for the nine months ended November 3, 2001 compared
to $1.60 billion for the comparable period in 2000.

Depreciation and Amortization Expense

Depreciation and amortization expense, as a percentage of net sales, increased for the three, nine and twelve month periods ended
November 3, 2001 compared to similar periods in 2000, due primarily to the reduced levels of sales in 2001 compared to 2000 and
capital expenditures incurred to upgrade the Company's store selling, service and support systems.

Rentals

Rental expense, as a percentage of net sales, for the three, nine and twelve month periods ended November 3, 2001 remained unchanged
at .8% .8% and .9%, respectively, compared to the three, nine and twelve month periods ended October 28, 2000.

Interest and Debt Expense

Interest and debt expense, as a percent of net sales, was 2.6% for the three and nine month periods ended November 3, 2001 compared
to 2.7% and 2.9% for three and nine month periods in 2000. Interest and debt expense was $47.6 and $143.7 million for the three and
nine month periods ended November 3, 2001 compared with $52.5 and $168.8 million for the similar periods in 2000. This reduction is
due primarily to a decrease of approximately $377 million in the average amount of outstanding debt in the nine month period of 2001
compared to the nine month period in 2000 and to a reduction in short term interest rates from last year.
Interest and debt expense, as a percentage of net sales, decreased to 2.4% for the twelve month period ended November 3, 2001 from
2.7% for the twelve month period ended October 28, 2000.

Service Charges, Interest and Other Income

Service charges, interest and other income, as a percentage of net sales, was 3.1% for the three months and nine months ended
November 3, 2001 compared to 3.5% and 3.2% for the three and nine month periods in 2000. Service charges, interest and other income
for the three months ended November 3, 2001 decreased to $57.8 million from $68.6 million for the three months ended October 28, 2000.
Service charges, interest and other income for the nine months ended November 3, 2001 decreased to $172.3 million from $190.5 million
for the nine months ended October 28, 2000. The decrease is primarily due to a pre-tax gain of $7.7 million realized on the sale
of a parcel of land held for investment in the third quarter of 2000 and to a decrease in the average amount of outstanding
accounts receivable during 2001 compared to 2000.

Income Taxes

The actual federal and state income tax rates for the three and nine month period ended November 3, 2001 and October 28, 2000 was 36%
and 37%, respectively, exclusive of the nondeductible goodwill amortization. The Company's actual federal and state income tax rate
(exclusive of the effect of nondeductible goodwill amortization) was reduced from 37% in fiscal 1999 to 36% in fiscal 2000. The
effect of these reduced rates on the Company's deferred income taxes was to reduce the income tax provision by $16 million for the
twelve month period ended November 3, 2001.

Accounting Change

Effective the beginning of fiscal 2000, the Company changed its method of accounting for inventories under the retail inventory
method. The change principally relates to the Company's accounting for allowances received from vendors, from recording such
allowances directly as a reduction to cost of sales to recording such allowances as a reduction to inventoriable product cost. The
cumulative effect of this accounting change reduced net income by $130 million after taxes (of $73.1 million) or $1.40 per share for
the nine months ended October 28, 2000. Financial statements for the three, nine and twelve months ended October 28, 2000 have been
restated to reflect this change in accordance with Statement of Financial Accounting Standards No. 3 "Reporting Accounting Changes in
Interim Financial Statements".

Financial Condition

Cash provided by operating activities totaled $260.7 million and $495.5 million for the nine months ended November 3, 2001 and
October 28, 2000, respectively. The decrease in cash provided by operating activities is due primarily to a larger increase in
merchandise inventories from the year end levels compared to the increase in 2000 combined with smaller decreases in trade accounts
receivable partially offset by a larger increase in accounts payable and accrued expenses.
The Company invested $201.9 million in capital expenditures for the nine months ended November 3, 2001 compared to $156.1 million for
the nine months ended October 28, 2000.
During the nine months ended November 3, 2001, the Company opened seven new stores, the Valley Hills Mall in Hickory, North Carolina,
the Westfield Shopping Town Independence in Wilmington, North Carolina, The Shops at Willow Bend in Plano, Texas, International Plaza
in Tampa, Florida, the Mall at Wellington Green in The Village of Wellington, Florida, Chandler Fashion Center in Chandler, Arizona
and the Mall at Stonecrest in Dekalb, Georgia. During the nine months ended November 3, 2001, the Company purchased four former
ZCMI stores totaling 349,000 square feet of retail space and acquired eight former Montgomery Ward locations. The Company opened one
former Montgomery Wards location during the nine months ended November 3, 2001 and anticipates opening three more locations in fiscal
2002. The remaining locations are being held for future development. During the nine months ended November 3, 2001 the Company has
closed (or has announced to close) eight stores in fiscal 2001. In connection with these store closings, the Company recorded store
closing costs of $2.0 million for the nine months ended November 3, 2001. Capital expenditures for 2001 are expected to be
approximately $225 million. The Company plans to open seven new stores in fiscal 2002 totaling 725,000 square feet net of replaced
square footage.
Cash used in financing activities totaled $211.7 million and $397.9 million for the nine months ended November 3, 2001 and October
28, 2000, respectively. During the nine months ended November 3, 2001 and October 28, 2000, the Company reduced its level of
outstanding debt by $237.8 million and $273.0 million, respectively. During the nine months ended November 3, 2001, the Company
repurchased 1.3 million shares of Class A common stock for $22.3 million compared to 10.5 million shares of Class A common stock for
$145.9 million in 2000.
Management of the Company anticipates that it will be necessary to incur short term borrowings of up to $445 million during periods
of peak working capital demand in the fourth quarter of 2001. Although the Company has an unused committed line of credit in the
amount of $750 million, management expects to accomplish these borrowings through the securitization of accounts receivable. Other
than peak working capital requirements management believes that cash generated from operations will be sufficient to cover its
reasonably foreseeable working capital, capital expenditure, stock repurchase and debt service requirements. Depending on conditions
in the capital markets and other factors, the Company will from time to time consider the issuance of debt or other securities, or
other possible capital market transactions, the proceeds of which could be used to refinance current indebtedness or other corporate
purposes.

New Accounting Prouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued two new pronouncements: Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets".
SFAS No. 141 addresses financial accounting and reporting for business combinations and supersedes APB No. 16, "Business
Combinations" and FASB Statement No. 38, "Accounting for Preacquisition Contingencies of Purchased Enterprises". All business
combinations in the scope of this statement are to be accounted for using one method, the purchase method. SFAS 141 is effective as
follows: a) use of the pooling-of-interest method is prohibited for business combinations initiated after June 30, 2001; and b) the
provisions of SFAS 141 also apply to all business combinations accounted for by the purchase method that are completed after June 30,
2001 (that is, the date of acquisition is July 2001 or later). The Company has determined that the adoption of this statement will
not have an impact on the consolidated financial statements.
SFAS No. 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB No. 17
"Intangible Assets". It changes the accounting for goodwill from an amortization method to an "impairment only" approach. SFAS No.
142 is effective for fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets recognized in an
entity's statement of financial position at that date, regardless of when those assets were initially recognized. The Company is
currently evaluating the impact of adopting this pronouncement on its current financial statements. Application of the
nonamortization provisions of the statement is expected to result in an annual increase in net income of $15.6 million.
In October 2001, the FASB issued SFAS No. 143, " Accounting for Asset Retirement Obligations," which requires companies to record the
fair value of a liability for asset retirement obligations in the period in which they are incurred. The statement applies to a
company's legal obligations associated with the retirement of a tangible long-lived asset that results from the acquisition,
construction and development or through the normal operation of a long-lived asset. When a liability is initially recorded, the
company would capitalize the cost, thereby increasing the carrying amount of the related asset. The capitalized asset retirement
cost is depreciated over the life of the respective asset while the liability is accreted to its present value. Upon settlement of
the liability, the obligation is settled at its recorded amount or the company incurs a gain or loss. The statement is effective for
fiscal years beginning after June 30, 2002. The Company does not expect that the adoption of SFAS No. 143 will have a material
impact on the Company's financial position or results of operations.
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144
addresses the accounting and reporting for the impairment or disposal of long-lived assets. The statement provides a single
accounting model for long-lived assets to be disposed of. New criteria must be met to classify the asset as an asset held-for-sale.
This statement also focuses on reporting the effects of a disposal of a segment of a business. This statement is effective for
fiscal years beginning after December 15, 2001. The Company is currently evaluating the impact of adopting this pronouncement on its
current financial statements.

Forward-Looking Information

Statements in the Management's Discussion and Analysis of Financial Condition and Results of Operations include certain
"forward-looking statements", including (without limitation) statements with respect to anticipated future operating and financial
performance, growth and acquisition opportunities and other similar forecasts and statements of expectation. Words such as
"expects," "anticipates," "plans," and "believes," and variations of these words and similar expressions, are intended to identify
these forward-looking statements. The Company cautions that forward-looking statements, as such term is defined in the Private
Securities Litigation Reform Act of 1995, contained in this quarterly report on Form 10-Q or made by management are based on
estimates, projections, beliefs and assumptions of management at the time of such statements and are not guarantees of future
performance. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of
future events, the receipt of new information, or otherwise. Forward-looking statements of the Company involve risks and
uncertainties and are subject to change based on various important factors. Actual future performance, outcomes and results may
differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number
of risks, uncertainties and assumptions. Representative examples of those factors (without limitation) include general industry and
economic conditions; economic and weather conditions for regions in which the Company's stores are located and the effect of these
factors on the buying patterns of the Company's customers; changes in consumer spending patterns and debt levels; trends in personal
bankruptcies; the impact of competitive market factors and other economic and demographic changes of similar or dissimilar nature;
changes in operating expenses, including employee wages, commissions structures and related benefits; the uncertainty surrounding the
effect of the Company's adoption of SFAS No. 142; possible future acquisitions of store properties from other department store
operators and the continued availability of financing in amounts and at the terms necessary to support the Company's future business.

During the nine months ended November 3, 2001, the Company repurchased $69.1 million of its outstanding unsecured notes prior to
their related maturity dates. Interest rates on the repurchased securities ranged from 6.17% to 9.1%. Maturity dates ranged from
2002 to 2023. The Company also retired $100 million of its 6.17% Reset Put Securities due August 1, 2011 prior to their maturity
date.

Ratio of Earnings to Fixed Charges:
The Company has calculated the ratio of earnings to fixed charges pursuant to Item 503 of Regulation S-K of the Securities and
Exchange Act as follows:
Nine Months Ended Fiscal Year Ended
- ----------------------------- ----------------------------------------------------------------------------
November 3, October 28, February 3, January 29, January 30, January 31, February 1,
2001 2000 2001* 2000 1999 1998 1997
- --------------- ------------ ------------- -------------- -------------- -------------- --------------
0.63 1.30 1.54 2.04 1.97 3.69 3.61
=============== ============ ============= ============== ============== ============== ==============
* 53 week year.

(a) Exhibit (12): Statement re: Computation of Earnings to Fixed Charges
(b) Reports of Form 8-K filed during the third quarter: None

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
DILLARD'S, INC.
(Registrant)
DATE: December 18, 2001 /s/James I. Freeman
James I. Freeman
Senior Vice President & Chief Financial Officer
(Principal Financial & Accounting Officer)