Belk (BLKIA) 10-Q 2009 Q2 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
	For the quarterly period endedAugust 2, 2008
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
	For the transition period from __________________ to __________________

Commission file number          000-26207          

BELK, INC.

(Exact Name of Registrant as Specified In Its Charter)

Delaware	56-2058574
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
2801 West Tyvola Road, Charlotte, NC	28217-4500
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, including Area Code          (704) 357-1000          

N/A

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      þ Yes      o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filero	Accelerated filerþ	Non-accelerated filero	Smaller reporting companyo
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      o Yes      þ No

At September 2, 2008, the registrant had issued and outstanding 47,306,486 shares of class A common stock and 1,446,406 shares of class B common stock.

BELK, INC.
Index to Form 10-Q

	Page
	Number
PART I.     FINANCIAL INFORMATION
Item 1.      Condensed Consolidated Financial Statements (unaudited)
Condensed Consolidated Statements of Income for the Three and Six Months Ended August 2, 2008 and August 4, 2007		4
Condensed Consolidated Balance Sheets as of August 2, 2008 and February 2, 2008		5
Condensed Consolidated Statement of Changes in Stockholders’ Equity and Comprehensive Income for the Six Months Ended August 2, 2008		6
Condensed Consolidated Statements of Cash Flows for the Six Months Ended August 2, 2008 and August 4, 2007		7
Notes to Unaudited Condensed Consolidated Financial Statements		8
Item 2.      Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.      Quantitative and Qualitative Disclosures about Market Risk		17
Item 4.      Controls and Procedures		17
PART II.   OTHER INFORMATION
Item 1.      Legal Proceedings		18
Item 1A.   Risk Factors		18
Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds		18
Item 3.      Defaults upon Senior Securities		18
Item 4.      Submission of Matters to a Vote of Security Holders		18
Item 5.      Other Information		19
Item 6.      Exhibits		19

This Report Contains Forward-Looking Statements

     Certain statements made in this report, and other written or oral statements made by or on behalf of the Company, may constitute “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and the Company’s future performance, as well as our expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. You can identify these forward-looking statements through our use of words such as “may,” “will,” “intend,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “continue” or other similar words.

     Forward-looking statements include information concerning possible or assumed future results from merchandising, marketing and advertising in our stores and through the Internet, our ability to be competitive in the retail industry, our ability to execute profitability and efficiency strategies, our ability to execute our growth strategies, anticipated benefits from the opening of new distribution facilities, the expected benefit of our new systems and technology, and the anticipated benefits from our acquisitions and the sale of our proprietary credit card portfolio. These forward-looking statements are subject to certain risks and uncertainties that may cause our actual results to differ significantly from the results we discuss in such forward-looking statements. We believe that these forward-looking statements are reasonable. However, you should not place undue reliance on such statements.

     Risks and uncertainties that might cause our results to differ from those we project in our forward-looking statements include, but are not limited to:

• General economic, political and business conditions, nationally and in our market areas, including rates of economic growth, interest rates, inflation or deflation, consumer credit availability, levels of consumer debt and bankruptcies, tax rates and policy, unemployment trends, potential acts of terrorism and threats of such acts and other matters that influence consumer confidence and spending;

• Our ability to anticipate the demands of our customers for a wide variety of merchandise and services, including our predictions about the merchandise mix, quality, style, service, convenience and credit availability of our customers;

• Unseasonable and extreme weather conditions in our market areas;

• Seasonal fluctuations in quarterly net income due to the significant portion of our revenues generated during the holiday season in the fourth fiscal quarter and the significant amount of inventory we carry during that time;

• Competition from other department and specialty stores and other retailers, including luxury goods retailers, general merchandise stores, Internet retailers, mail order retailers and off-price and discount stores, in the areas of price, merchandise mix, quality, style, service, convenience, credit availability and advertising;

• Our ability to effectively use advertising, marketing and promotional campaigns to generate high customer traffic in our stores;

• Our ability to find qualified vendors from which to source our merchandise and our ability to access products in a timely and efficient manner from a wide variety of domestic and international vendors;

• The income we receive from, and the timing of receipt of, payments from GE, the operator of our private label credit card business, which depends upon the amount of purchases made through the proprietary credit cards, the level of finance charge income generated from the credit card portfolio, the number of new accounts generated, changes in customers’ credit card use, and GE’s ability to extend credit to our customers;

• Our ability to correctly anticipate the appropriate levels of inventories during the year;

• Our ability to manage our expense structure;

• Our ability to realize the planned efficiencies from our acquisitions and effectively integrate and operate the acquired stores and businesses, including our fiscal year 2006 acquisition of Proffitt’s and McRae’s stores, our fiscal year 2007 acquisition of Parisian stores and our fiscal year 2007 acquisition of the assets of Migerobe and commencement of our new fine jewelry business;

• Our ability to continue to increase our number of stores, including the availability of existing retail stores or store sites on acceptable terms and our ability to successfully execute the Company’s retailing concept in new markets and geographic regions;

• The efficient and effective operation of our distribution network and information systems to manage sales, distribution, merchandise planning and allocation functions;

• Our ability to expand our eCommerce business through the development and launch of an updated and redesigned belk.com website, including our ability to meet the systems challenges of expanding and redesigning the website and our ability to efficiently operate a new eCommerce fulfillment facility; and

• Our ability to comply with debt covenants which could adversely affect our capital resources, financial condition and liquidity.

     For a detailed description of the risks and uncertainties that might cause our results to differ from those we project in our forward-looking statements, we refer you to the section captioned “Risk Factors” in our annual report on Form 10-K for the fiscal year ended February 2, 2008 that we filed with the SEC on April 17, 2008. Our other filings with the SEC may contain additional information concerning the risks and uncertainties listed above, and other factors you may wish to consider. Upon request, we will provide copies of these filings to you free of charge.

     Our forward-looking statements are based on current expectations and speak only as of the date of such statements. We undertake no obligation to publicly update or revise any forward-looking statement, even if future events or new information may impact the validity of such statements.

BELK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars in thousands, except share and per share amounts)

	Three Months Ended						Six Months Ended
	August 2,			August 4,			August 2,			August 4,
	2008			2007			2008			2007
Revenues	$	829,301		$	879,604		$	1,646,613		$	1,784,089
Cost of goods sold (including occupancy, distribution and buying expenses)		573,646			617,828			1,131,894			1,230,417
Selling, general and administrative expenses		231,889			236,510			471,127			490,790
Gain on sale of property and equipment		997			763			1,967			1,485
Asset impairment and exit costs		1,352			114			1,911			8,731
Operating income		23,411			25,915			43,648			55,636
Interest expense, net		(13,177	)		(14,259	)		(26,448	)		(28,880	)
Gain (loss) on investments		1,023			(61	)		1,886			(61	)
Income before income taxes		11,257			11,595			19,086			26,695
Income tax expense		3,050			4,100			5,750			9,700
Net income	$	8,207		$	7,495		$	13,336		$	16,995
Basic and diluted net income per share	$	0.17		$	0.15		$	0.27		$	0.34
Weighted average shares outstanding:
Basic		48,922,400			49,616,895			49,268,125			49,930,223
Diluted		48,922,400			49,711,982			49,268,125			49,977,767

See accompanying notes to unaudited condensed consolidated financial statements.

4

BELK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars in thousands)

	August 2,			February 2,
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	208,166		$	186,973
Short-term investments		10,250			—
Accounts receivable, net		62,439			65,987
Merchandise inventory		847,941			932,777
Property held for sale		3,296			11,036
Prepaid income taxes, expenses and other current assets		32,870			21,594
Total current assets		1,164,962			1,218,367
Investment securities		2,882			4,299
Property and equipment, net of accumulated depreciation and amortization of $1,107,826 and $1,027,397 as of August 2, 2008 and February 2, 2008, respectively		1,226,955			1,248,030
Goodwill		326,875			326,930
Deferred income taxes		6,358			5,196
Other assets		51,727			48,493
Total assets	$	2,779,759		$	2,851,315
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	238,363		$	274,092
Accrued liabilities		148,291			135,974
Accrued income taxes		—			25,980
Deferred income taxes		29,329			27,293
Current installments of long-term debt and capital lease obligations		4,618			4,481
Total current liabilities		420,601			467,820
Long-term debt and capital lease obligations, excluding current installments		715,826			717,660
Interest rate swap liability		4,065			8,282
Deferred compensation and other noncurrent liabilities		272,624			268,827
Total liabilities		1,413,116			1,462,589
Stockholders’ equity:
Preferred stock		—			—
Common stock, 400 million shares authorized and 48.8 and 49.6 million shares issued and outstanding as of August 2, 2008 and February 2, 2008, respectively		488			496
Paid-in capital		459,484			479,020
Retained earnings		970,697			977,206
Accumulated other comprehensive loss		(64,026	)		(67,996	)
Total stockholders’ equity		1,366,643			1,388,726
Total liabilities and stockholders’ equity	$	2,779,759		$	2,851,315

See accompanying notes to unaudited condensed consolidated financial statements.

5

BELK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
AND COMPREHENSIVE INCOME
(unaudited)
(in thousands)

													Accumulated
	Common			Common									Other
	Stock			Stock			Paid-in			Retained			Comprehensive
	Shares			Amount			Capital			Earnings			Income (Loss)			Total
Balance at February 2, 2008		49,569		$	496		$	479,020		$	977,206		$	(67,996	)	$	1,388,726
Comprehensive income:
Net income		—			—			—			13,336			—			13,336
Unrealized loss on investments, net of $528 income taxes		—			—			—			—			(890	)		(890	)
Unrealized gain on interest rate swaps, net of $868 income taxes		—			—			—			—			1,463			1,463
Amortization of defined benefit obligations, net of $2,016 income taxes		—			—			—			—			3,397			3,397
Total comprehensive income																	17,306
Cash dividends		—			—			—			(19,845	)		—			(19,845	)
Issuance of stock-based compensation		—			—			(444	)		—			—			(444	)
Stock-based compensation expense		—			—			2,940			—			—			2,940
Common stock issued		57			1			307			—			—			308
Repurchase and retirement of common stock		(873	)		(9	)		(22,339	)		—			—			(22,348	)
Balance at August 2, 2008		48,753		$	488		$	459,484		$	970,697		$	(64,026	)	$	1,366,643

See accompanying notes to unaudited condensed consolidated financial statements.

6

BELK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)

	Six Months Ended
	August 2,			August 4,
	2008			2007
Cash flows from operating activities:
Net income	$	13,336		$	16,995
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment and exit costs		1,911			8,731
Deferred income tax (benefit) expense		(1,194	)		2,912
Depreciation and amortization expense		82,484			80,936
Stock-based compensation expense		2,940			4,781
Gain on sale of property and equipment		(652	)		(437	)
Amortization of deferred gain on sale and leaseback		(1,315	)		(1,048	)
(Gain) loss on investments		(1,886	)		61
(Increase) decrease in:
Accounts receivable, net		3,298			348
Merchandise inventory		84,836			17,699
Prepaid expenses and other assets		(17,304	)		(11,909	)
Increase (decrease) in:
Accounts payable and accrued liabilities		(18,773	)		(53,802	)
Accrued income taxes		(25,980	)		(20,612	)
Deferred compensation and other liabilities		12,005			9,846
Net cash provided by operating activities		133,706			54,501
Cash flows from investing activities:
Purchases of short-term investments		(17,750	)		(286,565	)
Sales of short-term investments		7,500			209,715
Purchases of property and equipment		(71,851	)		(102,835	)
Proceeds from sales of property and equipment		14,554			45,444
Net cash used by investing activities		(67,547	)		(134,241	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		—			355
Principal payments on long-term debt and capital lease obligations		(2,329	)		(2,156	)
Cash paid for withholding taxes in lieu of stock-based compensation shares		(598	)		(3,678	)
Stock compensation tax benefit		154			2,382
Dividends paid		(19,845	)		(20,097	)
Repurchase and retirement of common stock		(22,348	)		(24,226	)
Net cash used by financing activities		(44,966	)		(47,420	)
Net increase (decrease) in cash and cash equivalents		21,193			(127,160	)
Cash and cash equivalents at beginning of period		186,973			171,239
Cash and cash equivalents at end of period	$	208,166		$	44,079
Supplemental schedule of noncash investing and financing activities:
Increase (decrease) in property and equipment through accrued purchases	$	(5,687	)	$	24,431
Decrease in property and equipment through adjustment of Parisian goodwill		—			8,704
Decrease in property and equipment through adjustment of Parisian capital lease obligation		—			4,315

See accompanying notes to unaudited condensed consolidated financial statements.

7

BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements of Belk, Inc. and subsidiaries (the “Company”) have been prepared in accordance with the instructions to Form 10-Q promulgated by the United States Securities and Exchange Commission and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 2, 2008. In the opinion of management, this information is fairly presented and all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods have been included; however, certain items are included in these statements based on estimates for the entire year. Also, operating results for the three and six months ended August 2, 2008 and August 4, 2007 may not be indicative of the operating results that may be expected for the full fiscal year.

     Certain prior period amounts have been reclassified to conform with current year presentation. The Company has reclassified its investment in auction rate securities and variable rate demand notes of $76.9 million at August 4, 2007 from “Cash and Cash Equivalents” to “Short-Term Investments.” The effect of the reclassification causes the purchases and sales of these investments during the six months ended August 4, 2007 to be presented in the cash flows from investing activities line item in the condensed consolidated statement of cash flows. This reclassification has no impact on net income, cash flows from operating activities, stockholders’ equity or total assets for the six months ended August 4, 2007.

(2) Comprehensive Income

     The following table sets forth the computation of comprehensive income:

	Three Months Ended						Six Months Ended
	August 2,			August 4,			August 2,			August 4,
	2008			2007			2008			2007
	(dollars in thousands)						(dollars in thousands)
Net income	$	8,207		$	7,495		$	13,336		$	16,995
Other comprehensive income (loss):
Unrealized loss on investments, net of $288 and $528 income taxes for the three and six months ended August 2, 2008, respectively and $187 and $210 income taxes for the three and six months ended August 4, 2007, respectively.		(485	)		(316	)		(890	)		(353	)
Net change in fair value of interest rate swaps, net of $340 and $868 income taxes for the three and six months ended August 2, 2008, respectively and $290 and $30 income taxes for the three and six months ended August 4, 2007, respectively.		574			487			1,463			(51	)
Interest rate swap losses reclassified into interest expense from other comprehensive income, net of $20 and $41 income taxes for the three and six months ended August 4, 2007, respectively.		—			34			—			69
Reclassification adjustment for interest rate swap dedesignation gain included in gain (loss) on investments, net of $7 income taxes for the three and six months ended August 4, 2007, respectively.		—			(51	)		—			(51	)
Amortization of defined benefit obligations, net of $1,008 and $2,016 income taxes for the three and six months ended August 2, 2008, respectively and $1,200 and $2,389 income taxes for the three and six months ended August 4, 2007 respectively.		1,698			2,020			3,397			4,023
Other comprehensive income		1,787			2,174			3,970			3,637
Total comprehensive income	$	9,994		$	9,669		$	17,306		$	20,632

8

BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(3) Accumulated Other Comprehensive Loss

     The following table sets forth the components of accumulated other comprehensive loss:

	August 2,			February 2,
	2008			2008
	(dollars in thousands)
Unrealized gains on investments, net of $156 and $684 income taxes as of August 2, 2008 and February 2, 2008, respectively.	$	263		$	1,153
Unrealized loss on interest rate swaps, net of $1,373 and $2,241 income taxes as of August 2, 2008 and February 2, 2008, respectively.		(2,312	)		(3,775	)
Defined benefit obligations, net of $36,791 and $38,807 income taxes as of August 2, 2008 and February 2, 2008, respectively.		(61,977	)		(65,374	)
Accumulated other comprehensive loss	$	(64,026	)	$	(67,996	)

(4) Fair Value Measurements

     In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements. The Company adopted SFAS No. 157 as of February 3, 2008. Although the adoption of SFAS No. 157 did not have an effect on the Company’s condensed consolidated financial statements, the Company is now required to provide additional disclosures. In February 2008, FASB issued FASB Staff Position No. 157-2, “Effective Date of FASB Statement No. 157”, which delayed for one year the effective date of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis.

     SFAS No. 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets and liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

     As of August 2, 2008, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis. These included the Company’s investment securities and interest rate swaps. The Company utilized the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant data generated by market transactions involving identical or comparable assets or liabilities.

     The Company’s investment securities are classified as available-for-sale and the unrealized holding gains and losses are included in other comprehensive income. The fair value of available-for-sale securities are based on quoted market prices. The Company has entered into interest rate swap agreements with financial institutions to manage the exposure to changes in interest rates. The fair values of swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The Company has consistently applied these valuation techniques in all periods presented. Additionally, the changes in the fair market value of swaps designated as cash flow hedges are accounted for in accordance with SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities,” and swaps that are not designated are marked to market through gain (loss) on investments. During the six months ended August 2, 2008, the Company recorded a $1.9 million gain on investments for a swap that is not designated as a cash flow hedge.

9

BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The Company’s assets and liabilities measured at fair value on a recurring basis subject to the disclosure requirements of SFAS No. 157 at August 2, 2008, were as follows:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
(dollars in thousands)	August 2,		Identical Assets		Observable Inputs		Inputs
Description	2008		(Level 1)		(Level 2)		(Level 3)
Investment securities	$	2,882	$	2,882	$	—	$	—
Total assets measured at fair value	$	2,882	$	2,882	$	—	$	—
Interest rate swap liability	$	4,065	$	—	$	4,065	$	—
Total liabilities measured at fair value	$	4,065	$	—	$	4,065	$	—

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of SFAS No. 115,” which permits an entity to measure many financial assets and financial liabilities at fair value that are not currently required to be measured at fair value. Entities that elect the fair value option will report unrealized gains and losses in earnings at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with a few exceptions. SFAS No. 159 amends previous guidance to extend the use of the fair value option to available-for-sale and held-to-maturity securities. The statement also establishes presentation and disclosure requirements to help financial statement users understand the effect of the election. The Company adopted SFAS No. 159 as of February 3, 2008 but did not elect the fair value measurement option for any financial assets or liabilities.

(5) Asset Impairment and Exit Costs

     During the three months ended August 2, 2008, the Company recorded $1.3 million in exit costs, comprised primarily of severance costs associated with a planned outsourcing of certain information technology functions. In addition, during the six months ended August 2, 2008, the Company recorded $0.6 million in impairment charges to adjust a retail location’s net book value to fair market value. The Company determines fair value through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

     During the six months ended August 4, 2007, the Company recorded a $6.7 million impairment charge to adjust a retail location’s net book value to fair market value, a $1.8 million asset impairment charge for assets related to a software development project that was abandoned and a $0.2 million charge related to two store closings.

(6) Sale of Properties

     Effective April 22, 2008, the Company sold for $11.6 million an acquired corporate headquarters facility, which was classified as held for sale at February 2, 2008. This transaction resulted in a gain on the sale of property of $0.5 million. In addition, the Company sold two stores for net proceeds of $2.6 million, which resulted in no gain or loss.

     Effective April 27, 2007, the Company sold a portion of its headquarters building located in Charlotte, NC for $23.3 million. The Company also entered into a lease arrangement with the purchaser of the property to lease the property for a term of 13 years, 8 months. The sale and leaseback transaction resulted in a gain on the sale of the property of $7.3 million, which has been deferred and will be recognized ratably over the lease term.

     During the six months ended August 4, 2007, the Company sold five stores for net proceeds of $18.5 million, which resulted in no gain or loss.

10

BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(7) Property Held for Sale

     Property held for sale represents an acquired distribution facility. The property is reflected at historical cost less accumulated depreciation, which is less than the estimated selling price less costs to dispose. The Company will no longer recognize depreciation on this property.

(8) Income Taxes

     During the three months ended August 2, 2008, the Company entered into an agreement to resolve certain state tax uncertainties included in unrecognized tax benefits. As a result of this resolution, the Company decreased unrecognized tax benefits by $1.1 million, and decreased interest expense and income tax expense by $0.3 million and $0.8 million, respectively.

(9) Pension and Postretirement Benefits

     The Company has a defined benefit pension plan covering a portion of its employees. The benefits are based on years of service and the employee’s compensation. The Company also has a non-qualified defined benefit Supplemental Executive Retirement Plan (“Old SERP”), which provides retirement and death benefits to certain qualified executives and a defined benefit health care plan that provides postretirement medical and life insurance benefits to certain retired full-time employees (“Postretirement Plan”).

     The components of net periodic benefit expense for these plans are as follows:

	Three Months Ended
	Pension Plan						Old SERP Plan				Postretirement Plan
	August 2,			August 4,			August 2,		August 4,		August 2,		August 4,
	2008			2007			2008		2007		2008		2007
	(dollars in thousands)
Service cost	$	859		$	877		$	47	$	46	$	33	$	42
Interest cost		6,149			5,783			182		177		407		418
Expected return on plan assets		(5,896	)		(5,798	)		—		—		—		—
Amortization of transition obligation		—			—			—		—		65		65
Amortization of prior service cost		124			124			—		—		—		—
Amortization of net loss		2,459			2,927			54		49		4		41
Net periodic benefit expense	$	3,695		$	3,913		$	283	$	272	$	509	$	566
	Six Months Ended
	Pension Plan						Old SERP Plan				Postretirement Plan
	August 2,			August 4,			August 2,		August 4,		August 2,		August 4,
	2008			2007			2008		2007		2008		2007
Service cost	$	1,718		$	1,754		$	94	$	92	$	66	$	84
Interest cost		12,298			11,566			364		354		814		836
Expected return on plan assets		(11,792	)		(11,596	)		—		—		—		—
Amortization of transition obligation		—			—			—		—		131		130
Amortization of prior service cost		247			248			—		—		—		—
Amortization of net loss		4,918			5,854			109		98		8		82
Net periodic benefit expense	$	7,389		$	7,826		$	567	$	544	$	1,019	$	1,132

     On September 10, 2008, the Company made a discretionary $20.0 million contribution to its defined benefit pension plan.

(10) Earnings per Share

     Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the period. The diluted EPS calculation includes the effect of contingently issuable stock-based compensation awards with performance vesting conditions as being outstanding at the beginning of the period in which all vesting conditions are met. The Company had no dilutive securities for the three and six months ended August 2, 2008, therefore basic and diluted EPS are the same. The reconciliations of basic and diluted shares for the three and six months ended August 4, 2007 were:

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BELK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Three Months Ended		Six Months Ended
	August 4,		August 4,
	2007		2007
Basic Shares		49,616,895		49,930,223
Dilutive contingently-issuable non-vested share awards		95,087		47,544
Diluted Shares		49,711,982		49,977,767

(11) Stock-Based Compensation

     The Company has a performance based stock award program (the “LTI Plan”), which the Company uses to grant stock awards to certain key executives. Beginning in fiscal year 2009, the LTI Plan will have a one-year performance period and a two-year service period. A portion of the earned shares will be issued at the end of the performance period with the remaining shares issued at the end of the service period.

(12) Repurchase of Common Stock

     On April 2, 2008, the Company’s Board of Directors approved a self-tender offer to purchase up to 1,000,000 shares of common stock at a price of $25.60 per share. The tender offer was initiated on April 23, 2008, and on May 22, 2008, the Company accepted for purchase 520,063 shares of Class A and 352,895 shares of Class B common stock for $22.3 million.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

     Belk, Inc., together with its subsidiaries (collectively, the “Company” or “Belk”), is the largest privately owned department store business in the United States, with total revenues of $3.82 billion for the fiscal year ended February 2, 2008. The Company and its predecessors have been successfully operating stores since 1888 by seeking to provide superior service and merchandise that meets customers’ needs for fashion, value and quality.

     The following discussion, which presents the results of the Company, should be read in conjunction with the Company’s consolidated financial statements as of February 2, 2008, and for the year then ended, and related Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, all contained in the Company’s Annual Report on Form 10-K for the year ended February 2, 2008.

     The Company’s fiscal year ends on the Saturday closest to each January 31. All references to “fiscal year 2009” refer to the fiscal year that will end January 31, 2009 and all references to “fiscal year 2008” refer to the fiscal year ended February 2, 2008.

     The Company’s total revenues decreased 5.7% in the second quarter of fiscal year 2009 to $829.3 million. Comparable store sales decreased 4.0%. Comparable stores include stores that have reached the one-year anniversary of their opening as of the beginning of the fiscal year and exclude closed stores. Operating income decreased 9.7% to $23.4 million in the second quarter of fiscal year 2009. Net income increased to $8.2 million or $0.17 per share in the second quarter of fiscal year 2009. The increase was due to an improvement in gross margins as a percent of sales and lower expenses during the second quarter of fiscal year 2009.

     The Company’s total revenues decreased 7.7% in the first six months of fiscal year 2009 to $1,646.6 million. Comparable store sales decreased 6.4%. Operating income decreased 21.5% to $43.6 million in the first six months of fiscal year 2009. Net income decreased to $13.3 million or $0.27 per basic and diluted share. The decrease in net income was due primarily to the sales decline during the period, offset by lower selling, general and administrative expenses and asset impairment costs.

     As of August 2, 2008, the Company operated 307 retail department stores in 16 states, primarily in the southern United States. Belk stores seek to provide customers the convenience of one-stop shopping, with an appealing merchandise mix and extensive offerings of brands, styles, assortments and sizes. Belk stores sell top national brands of fashion apparel, shoes and accessories for women, men and children, as well as cosmetics, home furnishings, housewares, fine jewelry, gifts and other types of quality merchandise. The Company also sells exclusive private label brands, which offer customers differentiated merchandise selections. Larger Belk stores may include hair salons, spas, restaurants, optical centers and other amenities.

     The Company seeks to be the leading department store in its markets by selling merchandise to customers that meets their needs for fashion, selection, value, quality and service. To achieve this goal, Belk’s business strategy focuses on quality merchandise assortments, effective marketing and sales promotional strategies, attracting and retaining talented, well-qualified associates to deliver superior customer service, and operating efficiently with investments in information technology and process improvement.

     The Company operates retail department stores in the highly competitive retail apparel industry. Management believes that the principal competitive factors for retail department store operations include merchandise selection, quality, value, customer service and convenience. The Company believes its stores are strong competitors in all of these areas. The Company’s primary competitors are traditional department stores, mass merchandisers, national apparel chains, individual specialty apparel stores and direct merchant firms.

     The Company intends to continue to open new stores selectively in new and existing markets in order to increase sales, market share and customer loyalty. Management believes that opportunities for long-term growth exist in Belk markets where the Belk name and reputation are well known and in contiguous markets where Belk can distinguish its stores from the competition. Although the Company will continue to take advantage of prudent opportunities to expand into large markets, the Company will focus its expansion on medium-sized markets and suburban communities

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surrounding larger metropolitan markets with store units in the 60,000 to 120,000 square-foot size range.

     The Company intends to expand and strengthen its presence as a multi-channel retailer with an expanded eCommerce initiative focused on the development and launch of a substantially updated and redesigned website in fiscal year 2009. The updated website will enhance customers’ online shopping capabilities, offer expanded merchandise assortments and enable customers to access a broader range of Company information online, including current sales promotions, special events and corporate information.

Results of Operations

     The following table sets forth, for the periods indicated, the percentage relationship to revenues of certain items in the Company’s unaudited condensed consolidated statements of income, as well as a period comparison of changes in comparable store net revenue.

	Three Months Ended						Six Months Ended
	August 2,			August 4,			August 2,			August 4,
	2008			2007			2008			2007
SELECTED FINANCIAL DATA
Revenues		100.0	%		100.0	%		100	%		100	%
Cost of goods sold (including occupancy, distribution and buying expenses)		69.2			70.2			68.7			69.0
Selling, general and administrative expenses		28.0			26.9			28.6			27.5
Gain on sale of property and equipment		0.1			0.1			0.1			0.1
Asset impairment and exit costs		0.2			—			0.1			0.5
Operating income		2.8			2.9			2.7			3.1
Interest expense, net		1.6			1.6			1.6			1.6
Gain (loss) on investments		0.1			—			0.1			—
Income before income taxes		1.4			1.3			1.2			1.5
Income tax expense		0.4			0.5			0.3			0.5
Net income		1.0			0.9			0.8			1.0
Comparable store revenue increase (decrease)		(4.0	)		2.2			(6.4	)		2.5

Revenues

     The following table gives information regarding the percentage of revenues contributed by each merchandise area for each of the respective periods. There were no material changes for the periods as reflected in the table below.

	Three Months Ended						Six Months Ended
	August 2,			August 4,			August 2,			August 4,
Merchandise Areas	2008			2007			2008			2007
Women’s		41	%		40	%		40	%		40	%
Cosmetics, Shoes and Accessories		28			28			31			29
Men’s		16			17			15			16
Home		9			9			8			9
Children’s		6			6			6			6
Total		100	%		100	%		100	%		100	%

Comparison of the Three and Six Months Ended August 2, 2008 and August 4, 2007

     Revenues.The Company’s revenues for the three months ended August 2, 2008 decreased 5.7%, or $50.3 million, to $829.3 million from $879.6 million over the same period in fiscal year 2008. The decrease is primarily attributable to a 4.0% decrease in revenues from comparable stores and a $34.0 million decrease in revenues due to closed stores, partially offset by an increase in revenues from new stores of $19.4 million.

     The Company’s revenues for the six months ended August 2, 2008 decreased 7.7%, or $137.5 million, to $1,646.6 million from $1,784.1 million over the same period in fiscal year 2008. The decrease is primarily attributable to a 6.4% decrease in revenues from comparable stores and a $68.5 million decrease in revenues due to closed stores, partially offset by an increase in revenues from new stores of $41.2 million.

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     Cost of goods sold.Cost of goods sold was $573.6 million, or 69.2% of revenues, for the three months ended August 2, 2008 compared to $617.8 million, or 70.2% of revenues, for the same period in fiscal year 2008. Cost of goods sold was $1,131.9 million, or 68.7% of revenues, for the six months ended August 2, 2008 compared to $1,230.4 million, or 69.0% of revenues, for the same period in fiscal year 2008. The decrease in cost of goods sold as a percentage of revenues for the three and six months ended August 2, 2008 is primarily attributable to reduced markdown activity and continued sales growth of the Company’s private brand merchandise during the current fiscal year, partially offset by small increases in store occupancy and buying costs over the same periods in fiscal year 2008.

     Selling, general and administrative expenses. Selling, general and administrative (“SG&A”) expenses were $231.9 million, or 28.0% of revenues for the three months ended August 2, 2008, compared to $236.5 million, or 26.9% of revenues, for the same period in fiscal year 2008. The decrease in SG&A expenses of $4.6 million was due to lower selling related expenses of $7.7 million and one-time acquisition-related expenses in the prior year of $2.6 million, partially offset by increased depreciation expense of $2.1 million. The decrease in selling related expenses consisted primarily of a reduction in payroll expense in response to the declining sales environment. The increase in SG&A expenses as a percentage of revenues was primarily due to the following:

• Depreciation expense increased as a percentage of revenues by 0.52% primarily due to new store openings and expansions in the past year combined with the decline in revenue.

• One-time acquisition-related expenses decreased as a percentage of revenues by 0.28% due to the Parisian Acquisition integration being substantially completed in fiscal year 2008.

• Other non-selling related expenses increased as a percentage of revenues by 0.75% primarily due to the 5.7% decline in revenue.

     SG&A expenses were $471.1 million, or 28.6% of revenues for the six months ended August 2, 2008, compared to $490.8 million, or 27.5% of revenues, for the same period in fiscal year 2008. The decrease in SG&A expenses of $19.7 million was due to reductions in selling related expenses of $15.7 million, primarily payroll and advertising expenses in response to the declining sales environment, as well as a decrease in one-time acquisition-related expenses of $12.9 million. The increase in SG&A expenses as a percentage of revenues was primarily due to the 7.7% decline in revenue, which more than offset the improvement resulting from the decrease in the dollar amount of SG&A expenses.

     Asset impairment and exit costs.During the six months ended August 2, 2008, the Company recorded $1.3 million in exit costs, comprised primarily of severance costs associated with a planned outsourcing of certain information technology functions. In addition, the Company recorded $0.6 million in impairment charges to adjust a retail location’s net book value to fair market value.

     During the six months ended August 4, 2007, the Company recorded a $6.7 million impairment charge to adjust a retail location’s net book value to fair market value, a $1.8 million asset impairment charge for assets related to a software development project that was abandoned and a $0.2 million charge related to the closure of a division office and two other store locations.

     Gain (loss) on investments.The gain on investments of $1.9 million for the six months ended August 2, 2008 was due to a gain on the Company’s undesignated interest rate swap.

     Income tax expense.Income tax expense for the three months ended August 2, 2008 was $3.1 million compared to $4.1 million for the same period in fiscal year 2008. The effective income tax rate for the three months ended August 2, 2008 was 27.1% compared to 35.4% in the same period in fiscal year 2008. Income tax expense for the six months ended August 2, 2008 was $5.8 million compared to $9.7 million for the same period in fiscal year 2008. The effective income tax rate for the six months ended August 2, 2008 was 30.1% compared to 36.3% in the same period in fiscal year 2008. The decrease in the tax rate resulted from an agreement that the Company entered into with respect to certain state tax uncertainties which contributed to a $0.8 million reduction in income tax expense during the second quarter of fiscal year 2009.

Seasonality and Quarterly Fluctuations

     The Company has historically experienced and expects to continue to experience seasonal fluctuations in its revenues, operating income and net income due to the seasonal nature of the retail business. The highest revenue period

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for the Company is the fourth quarter, which includes the holiday selling season. A disproportionate amount of the Company’s revenues and a substantial amount of the Company’s operating and net income are realized during the fourth quarter. If for any reason the Company’s revenues were below seasonal norms during the fourth quarter, the Company’s annual results of operations could be adversely affected. The Company’s inventory levels generally reach their highest levels in anticipation of increased revenues during these months. The Company’s quarterly results of operations could also fluctuate significantly as a result of a variety of factors, including the timing of new store openings.

Liquidity and Capital Resources

     The Company’s primary sources of liquidity are cash on hand, cash flows from operations and borrowings under debt facilities. The Company’s debt facilities consist of a $750.0 million credit facility that matures in October 2011 and $325.0 million in senior notes. The $750.0 million credit facility is composed of an outstanding $350.0 million term loan and a $400.0 million revolving line of credit. The $325.0 million of senior notes are composed of a $125.0 million ten-year fixed rate senior note that matures in August 2017, a $100.0 million fixed rate senior note that matures in July 2015, a $20.0 million fixed rate senior note that matures in July 2012 and a $80.0 million floating rate senior note that matures in July 2012.

     The debt facilities place certain restrictions on mergers, consolidations, acquisitions, sales of assets, indebtedness, transactions with affiliates, leases, liens, investments, dividends and distributions, exchange and issuance of capital stock and guarantees, and require maintenance of minimum financial ratios. As of August 2, 2008, the Company was in compliance with all covenants and does not anticipate that complying with the covenants will impact the Company’s liquidity in fiscal year 2009.

     Through October 2009, under certain circumstances the credit facility may be increased to $850.0 million at the Company’s request. The credit facility allows for up to $250.0 million of outstanding letters of credit. The credit facility charges interest based upon certain Company financial ratios and as of August 2, 2008 was LIBOR plus 87.5 basis points. The credit facility contains restrictive covenants including leverage and fixed charge coverage ratios. The Company had $14.3 million of standby letters of credit and a $350.0 million term loan outstanding under the credit facility at August 2, 2008. As of August 2, 2008, availability under the credit facility was $385.7 million.

     Because interest rates on certain debt agreements have variable interest rates, the Company has entered into interest rate swap agreements with financial institutions to manage the exposure to changes in interest rates. As of August 2, 2008, the Company has two interest rate swaps. A $125.0 million notional amount swap, which expires in September 2008, had previously been designated as a cash flow hedge against variability in future interest payments on a $125.0 million variable rate bond facility. On July 26, 2007, the $125.0 million notional amount swap was de-designated in accordance with Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities” due to the Company’s decision to prepay the underlying debt. This swap will be marked to market in gain (loss) on investments through its expiration date. An $80.0 million notional amount swap, which expires in fiscal year 2013, has been designated as a cash flow hedge against variability in future interest rate payments on the $80.0 million floating rate senior note and is marked to market through accumulated other comprehensive income (loss).

     Net cash provided by operating activities was $133.7 million for the six months ended August 2, 2008 compared to $54.5 million for the same period in fiscal year 2008. The increase in cash flows from operating activities for the six months ended August 2, 2008 was principally due to a reduction in inventory in response to the current sales environment.

     Net cash used by investing activities decreased $66.7 million to $67.5 million for the six months ended August 2, 2008 from $134.2 million for the same period in fiscal year 2008. The decrease in cash used by investing activities primarily resulted from reduced net purchases and sales of short-term investments of $66.6 million, decreased purchases of property and equipment of $31.0 million, offset by lower proceeds from the sale of property and equipment principally related to the prior year sale-leaseback of a portion of the Company’s headquarters building.

     Net cash used by financing activities was $45.0 million for the six months ended August 2, 2008 compared to $47.4 million for the same period in fiscal year 2008. The principal use of cash for financing activities was for the repurchase and retirement of common stock and dividends paid.

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     Management of the Company believes that cash flows from operations and existing credit facilities will be sufficient to cover working capital needs, stock repurchases, dividends, capital expenditures and debt service requirements for at least the next twelve months.

Contractual Obligations and Commercial Commitments

     A table representing the scheduled maturities of the Company’s contractual obligations and commercial commitments as of February 2, 2008 was included under the heading “Contractual Obligations and Commercial Commitments” of the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2008. There have been no material changes from the information included in the Form 10-K.

Off-Balance Sheet Arrangements

     The Company has not provided any financial guarantees as of August 2, 2008. 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 arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to materially affect the Company’s liquidity or the availability of capital resources.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     There have been no material changes to the Company’s quantitative and qualitative market risk disclosures during the six months ended August 2, 2008 from the disclosures contained in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2008.

Item 4. Controls and Procedures

     The Company’s management conducted an evaluation pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by Belk in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

     During the period covered by this report, there were no changes in the Company’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1.Legal Proceedings

     In the ordinary course of business, the Company is subject to various legal proceedings and claims. The Company believes that the ultimate outcome of these matters will not have a material adverse effect on its consolidated financial position or results of operations.

Item 1A.Risk Factors

     There have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K filed on April 17, 2008.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

     The following table contains information about purchases of our equity securities during the second quarter of fiscal year 2009.

ISSUER PURCHASES OF EQUITY SECURITIES

						Total Number of		Approximate Dollar
						Shares Purchased		Value of Shares
						as Part of		that May Yet Be
	Total Number of			Average Price Paid		Publicly Announced		Purchased Under the
Period	Shares Purchased			per Share		Plans or Programs		Plans or Programs
May 4 – May 31, 2008		872,958	(1)	$	25.60		872,958		—
June 1 – July 5, 2008		—			—		—		—
July 6 – August 2, 2008		—			—		—		—
Total		872,958		$	25.60		872,958		—

⁽¹⁾ On April 2, 2008, the Company’s Board of Directors approved a self-tender offer to purchase up to 1,000,000 shares of common stock at a price of $25.60 per share. The tender offer was initiated on April 23, 2008, and on May 22, 2008, the Company accepted for purchase 520,063 shares of Class A and 352,895 shares of Class B common stock for $22.3 million.

Item 3.Defaults Upon Senior Securities

     Not applicable.

Item 4.Submission of Matters to a Vote of Security Holders

     The Company’s annual meeting of stockholders was held on May 28, 2008. Two matters were submitted to a vote of the stockholders. At the meeting, in person or by proxy, there were stockholders holding an aggregate of 47,681,262 shares of common stock. There were no broker non-votes with respect to any proposal.

Election of Directors

     Thomas M. Belk, Jr., J. Kirk Glenn, Jr. and John L. Townsend, III were elected as directors for terms expiring in 2011.

Term Expiring 2011	Votes For	Votes Withheld
Thomas M. Belk, Jr.	463,591,479	860,130
J. Kirk Glenn, Jr.	463,591,479	860,130
John L. Townsend, III	463,591,479	860,130

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H. W. McKay Belk, Thomas C. Nelson and John R. Thompson continue to serve as directors for terms expiring in 2009. John R. Belk, John A. Kuhne and Elizabeth Valk Long continue to serve as directors for terms expiring in 2010.

Compensation Plan Proposal

     The stockholders also approved the material terms of the performance goals under the Company’s Revised Executive Long Term Incentive Plan. A total of 456,029,922 votes were cast in favor, with 41,920 votes cast against and 8,379,767 votes abstained.

Item 5.Other Information

     Not applicable.

Item 6.Exhibits

(a) Exhibits

3.1	Form of Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to pages B-24 to B-33 of the Company’s Registration Statement on Form S-4/A, filed on March 5, 1998 (File No. 333-42935)).
3.2	Form of Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2004).
4.1	Articles Fourth, Fifth and Seventh of the Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to pages B-24 to B-33 of the Company’s Registration Statement on Form S-4/A, filed on March 5, 1998 (File No. 333-42935)).
4.2	Articles I and IV of the Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2004).
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

     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.

	BELK, INC.
Dated: September 11, 2008	By:	/s/ Ralph A. Pitts
		Ralph A. Pitts Executive Vice President, General Counsel and Corporate Secretary (Authorized Officer of the Registrant)
	By:	/s/ Brian T. Marley
		Brian T. Marley Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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