Dillard's to Form a REIT Subsidiary

Dillard's, Inc. DDS intends to form a wholly-owned subsidiary that will seek to operate as a real estate investment trust. Dillard's believes the formation of a REIT may enhance its ability to access debt or preferred stock and thereby enhance its liquidity. It is intended that various Dillard's entities will transfer to the REIT interests in certain real properties currently owned by the Dillard's Parties, who will lease the Properties back from the REIT under “triple net” leases. Additionally, the Company has formed a wholly-owned subsidiary that is intended to serve as a captive insurance company. The Company believes the Captive will allow it to more efficiently manage its risks and to provide access to additional reinsurance markets.