##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    February 3, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission File Number
    000-26207
 BELK, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State of incorporation)

56-2058574(IRS Employer
    Identification No.)2801 West Tyvola Road,
    Charlotte, North Carolina(Address of Principal
    Executive Offices)

28217-4500(Zip Code)    (704) 357-1000
     Title of each class

Name of Exchange on which registeredClass A Common Stock,
    $0.01 per share

NoneClass B Common Stock,
    $0.01 per share

None     o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
    Documents
    Incorporated By Reference




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##### 



BELK,
    INC
  TABLE OF
    CONTENTS
  Item No.

Page No.Part I1.

Business


21A.

Risk
    Factors


71B.

Unresolved Staff
    Comments


102.

Properties


103.

Legal
    Proceedings


114.

Submission of
    Matters to a Vote of Security Holders


11Part II5.

Market Information
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities


126.

Selected Financial
    Data


137.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


137A.

Quantitative and
    Qualitative Disclosures About Market Risk


288.

Financial
    Statements and Supplementary Data


299.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


649A.

Controls and
    Procedures


649B.

Other
    Information


68Part III10.

Directors, Executive
    Officers and Corporate Governance


6811.

Executive
    Compensation


6812.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


6813.

Certain
    Relationships and Related Transactions, and Director
    Independence


6814.

Principal
    Accountant Fees and Services


69Part IV15.

Exhibits and
    Financial Statement Schedules


69Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2   i




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##### Table of Contents



PART I  Item 1.
    Business  General
            28217-4500, (704) 357-1000.
  Business
    Strategy
    Target Customer Focus. 35-to-54-year-old
 2




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##### Table of Contents



Focused Merchandise Assortments.
  Compelling Sales Promotions.
  Distinctive Customer Service.
  Winning Store and Market Strategy.
  Emphasis on Productivity and Efficiency.
  Growth
    Strategy
         3




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##### Table of Contents



New
    Stores
  Size (Selling


Opening


New or ExistingLocation

Sq. Ft.)


Date


MarketBranson, MO (Branson
    Landing) #351


59,405



4/5/2006


NewMt. Juliet, TN (Providence
    Marketplace) #358


67,562



4/5/2006


NewBuford, GA (Mall of
    Georgia) #375


100,000



4/5/2006


NewKnoxville, TN (Turkey
    Creek) #689


66,000



4/5/2006


NewRoanoke Rapids, NC (Premier
    Landing) #360


43,584



10/11/2006


ExistingTrussville, AL (The Pinnacle @
    Tutwiler Farm) #349


86,251



10/11/2006


NewStillwater, OK (Lakeview
    Pointe) #362


52,063



10/11/2006


NewFt. Myers, FL (Gulf Coast
    Town Center) #346


86,493



10/11/2006


NewWilson, NC (Heritage
    Crossing) #368


66,300



10/11/2006


ExistingWalterboro, SC (Walterboro
    Plaza) #374


43,647



10/11/2006


Existing   Store
    Expansions
  Expanded Size


Completion


New or ExistingLocation

(Selling Sq. Ft.)


Date


MarketFlowood, MS (Dogwood
    Festival) #678


150,095



03/08/06



ExistingLady Lake, FL (La Plaza
    Grande) #228


81,489



04/05/06



ExistingMonroe, NC (Monroe Mall) #1


55,594



08/09/06



ExistingRogers, AR (Scottsdale
    Center) #285


103,903



09/13/06



ExistingJasper, AL (Jasper Mall) #253


48,708



11/03/06



ExistingSanford, NC (Riverbirch
    Corner) #8


53,903



11/03/06



ExistingSouthern Pines, NC (Pinecrest
    Plaza) #532


100,616



11/03/06



ExistingMt. Pleasant, SC (Town
    Center) #74


73,493



11/03/06



ExistingHartwell, GA (Adams
    Square) #78


37,084



11/03/06



Existing   Store
    Renovations
  Size (Selling


Completion


New or ExistingLocation

Sq. Ft.)


Date


MarketBristol, VA (Bristol Mall) #52


48,655



04/05/06



Existing    4




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##### Table of Contents



Merchandising
          Marketing
  one-to-one
  Gift
    Cards
    Salons
    and Spas
    Belk Gift
    Registry
   5




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##### Table of Contents



Belk
    Proprietary Charge Programs
      Systems
    and Technology
    Inventory
    Management and Logistics
      Non-Retail
    Businesses
   6




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Industry
    and Competition
    Trademarks
    and Service Marks
    Seasonality
    and Quarterly Fluctuations
    Associates
    Where You
    Can Find More Information
  Form 10-K, Form 10-Q, Form 8-K
  Item 1A.
    Risk
    Factors   7




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General
    Economic, Political and Business Conditions
    Anticipating
    Customer Demands
    Effects
    of Weather
    Seasonal
    Fluctuations
    Highly
    Competitive Industry
   8




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Advertising,
    Marketing and Promotional Campaigns
    Merchandise
    Sourcing
    Credit
    Card Operations
  10-year
  Inventory
    Levels
    Cost
    Management
    Integrating
    and Operating Acquired Stores
   9




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##### Table of Contents



New Store
    Growth
    Logistics,
    Distribution and Information Technology
    Other
    Factors
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties  Store
    Locations
    Alabama  28

Louisiana  3

Oklahoma  2Arkansas  6

Maryland  2

South Carolina  38Florida  29

Mississippi  17

Tennessee  25Georgia  50

Missouri  1

Texas  9Indiana  1

North Carolina  74

Virginia  20Kentucky  5

Ohio  1

West Virginia  4      10




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##### Table of Contents



Non-Store
    Facilities
    Belk Property

Location

Own/LeaseBelk, Inc. Western
    Division Office

Greenville, SC


LeaseBelk, Inc. Corporate Offices
    Condominium

Charlotte, NC


LeaseBelk Central Distribution Center

Blythewood, SC


LeaseBelk Distribution Center

Byram, MS


OwnFormer Parisian Corporate Office

Birmingham, AL


LeaseFormer Parisian Distribution Center

Steele, AL


OwnBelk, Inc. Fine Jewelry
    Distribution Center

Ridgeland, MS


Lease   Other
    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   11




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities     12




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##### Table of Contents



Item 6.
    Selected
    Financial Data    53 Weeks


52 Weeks


52 Weeks


52 Weeks


52 WeeksEnded


Ended


Ended


Ended


EndedFebruary 3,


January 28,


January 29,


January 31,


February 1,2007


2006


2005


2004


2003(Dollars in thousands, except per share amounts)SELECTED STATEMENT OF INCOME
    DATA:Revenues

$
3,684,769


$
2,968,777


$
2,446,832


$
2,264,907


$
2,241,555Cost of goods sold


2,451,171



1,977,385



1,618,639



1,506,905



1,512,045Depreciation and amortization
    expense


142,618



113,945



101,255



91,007



89,312Operating income


323,719



258,501



226,341



213,365



167,237Income before income taxes


279,050



213,555



194,276



170,647



133,817Net income


181,850



136,903



124,076



111,547



84,017Basic and diluted income per share:From continuing operations


3.59



2.65



2.40



2.11



1.53Net income


3.59



2.65



2.40



2.11



1.53Cash dividends per share


0.350



0.315



0.475



0.275



0.25SELECTED BALANCE SHEET
    DATA:Accounts receivable, net(1)


61,434



43,867



324,917



317,025



338,846Merchandise inventory


931,870



703,609



527,860



496,242



487,490Working capital


679,822



649,711



787,390



698,059



678,087Total assets


2,848,615



2,437,171



1,859,085



1,730,263



1,736,102Long-term debt and capital lease
    obligations


734,342



590,901



301,419



308,488



365,553Stockholders equity


1,326,022



1,194,827



1,066,616



975,371



954,284SELECTED OPERATING
    DATA:Number of stores at end of period


315



276



226



221



214Comparable store net revenue
    increase (decrease)(2)


6.0
%


1.2
%


4.2
%


(0.5
)%


(2.2
%)     (1)
    
    In fiscal year 2006, the Company sold its proprietary credit
    card business to GE Money Bank. This transaction caused a
    significant reduction in accounts receivable.(2)
    
    On a 52 versus 52 week basis, comparable store net revenues
    increased 4.5% in fiscal year 2007. Comparable store net revenue
    includes sales from stores open during the entire fiscal year in
    both the current and prior year.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
       13




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Parisian
    Acquisition
      Migerobe
    Acquisition
   14




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##### Table of Contents



Proffitts
    and McRaes Acquisition
    Sale of
    Credit Card Portfolio
    10-year
  9-year
  10-year
  Hurricane
    Katrina
       15




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##### Table of Contents



VISA
    Settlement
    Stock
    Compensation
    Lease
    Accounting
    life-to-date
   16




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##### Table of Contents



Results
    of Operations
    53 Weeks


52 Weeks


52 WeeksEnded


Ended


EndedFebruary 3,


January 28,


January 29,2007


2006


2005SELECTED FINANCIAL
    DATARevenues


100.0
%


100.0
%


100.0
%Cost of goods sold


66.5



66.6



66.2Selling, general and
    administrative expenses


24.9



24.5



24.6Gain on sale of property and
    equipment


0.3



0.2



0.1Asset impairment and store closing
    costs


0.1



0.1



0.1Pension curtailment charges






0.3



Restructuring charges






(0.1
)


Operating income


8.8



8.7



9.3Interest expense


1.6



1.7



1.4Interest income


0.2



0.1



0.1Gain on sale of investments


0.1



0.1



Income taxes


2.6



2.6



2.9Net income


4.9



4.6



5.1SELECTED OPERATING
    DATA:Selling square footage (in
    thousands)


24,498



20,400



15,244Store revenues per selling
    sq. ft.

$
158


$
168


$
161Comparable store net revenue
    increase(1)


6.0
%


1.2
%


4.2
%Number of storesOpened


10



12



14Purchased


37



47



Closed


(8
)


(9
)


(9
)Total  end of period


315



276



226     (1)
    
    On a 52 versus 52 week basis, comparable store net revenues
    increased 4.5% in fiscal year 2007. Comparable store net revenue
    includes sales from stores open during the entire fiscal year in
    both the current and prior year.    Fiscal Year


Fiscal Year


Fiscal YearFamily of Business

2007


2006


2005Womens


37
%


36
%


37
%Center Core


29



29



28Mens


17



17



17Home


11



12



12Childrens


6



6



6Total


100
%


100
%


100
%  17




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##### Table of Contents



Comparison
    of Fiscal Years Ended February 3, 2007 and January 28,
    2006
  Revenues. rd
  Cost of Goods Sold. start-up
  Selling, General and Administrative
    Expenses.
  
    Advertising expenses increased as a percentage of revenues by
    0.24% primarily due to approximately $6.1 million spent on
    the Proffitts and McRaes grand re-opening in March
    2006, as well as a planned overall increase in the
    Companys advertising spending.
    Depreciation expense increased as a percentage of revenues by
    0.06% primarily due to accelerated depreciation for stores that
    are scheduled to close prior to the end of their original asset
    lives.
    Insurance expense decreased as a percentage of revenues by
    0.15%, or $2.3 million, primarily due to a decrease in
    estimated general liability and workers compensation
    self-insurance reserves based on actuarial analysis performed in
    fiscal year 2007. The decrease in reserves was partially offset
    by an increase in insurance premiums.
    Net credit income increased as a percentage of revenues by
    0.46%, or $25.8 million, due to a 33.2% increase in Belk
    charge card sales volume, primarily driven by the
    Proffitts and McRaes and Parisian acquisitions and
    to the lower operating costs as a result of the divestiture of
    the Belk private label credit card, partially offset by lower
    income from the GE Program Agreement as compared to finance
    charge and late fee income received in fiscal year 2006.
    Third-party charge card expense increased as a percentage of
    revenues by 0.07% primarily due to the $1.7 million Visa
    Settlement recognized as a reduction to SG&A expense in
    fiscal year 2006.
    Gift card breakage decreased as a percentage of revenues by
    0.09%, or $2.3 million, due to a gift card breakage
    recognition policy change that occurred in fiscal year 2006.
    Prior to the change, the Company recognized gift card
    breakage 24 months after the cards were issued. Under
    the revised policy, the Company recognizes breakage in
    proportion to actual gift card redemptions. This change resulted
    in a one-time $2.4 million increase to gift card breakage
    in fiscal year 2006.
    Acquisition-related expenses increased by $12.9 million due
    to the fiscal year 2007 Parisian and Migerobe acquisition costs.  Gain on sale of property and equipment.
 18




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Asset Impairment and Store Closing Costs.
  Pension Curtailment Charges.
  Interest Expense.
  Interest Income.
  Income taxes.
  Comparison
    of Fiscal Years Ended January 28, 2006 and January 29,
    2005
  Revenues.
  Cost of Goods Sold.
  Selling, General and Administrative
    Expenses.
 19




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##### Table of Contents



Asset Impairment and Store Closing Costs.
  Gain on sale of property and equipment.
  Pension Curtailment Charges.
  Hurricane Losses.
  Restructuring Charges.
  Interest Expense.
  Gain on sale of investments, net
  Income taxes.
  Seasonality
    and Quarterly Fluctuations
      2007


2006


2005First quarter


20.4
%


19.1
%


22.5
%Second quarter


19.9



20.3



21.9Third quarter


21.6



23.6



22.1Fourth quarter


38.1



37.0



33.5  20




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##### Table of Contents



Liquidity
    and Capital Resources
        20-year
         21




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##### Table of Contents



Related
    Party Transactions
      Contractual
    Obligations and Commercial Commitments
    Payments Due by PeriodWithinTotal


1 Year


2 - 3 Years


4 - 5 Years


After 5 Years(Dollars in thousands)Contractual
    ObligationsLong-Term Debt

$
696,000


$



$
125,000


$
350,000


$
221,000Estimated Interest Payments on
    Debt(a)


214,088



36,664



72,284



66,391



38,749Capital Lease Obligations


53,789



7,206



12,632



10,054



23,897Operating Leases(b)


562,380



69,520



123,502



97,745



271,613Purchase Obligations(c)


102,214



78,699



22,609



906



Total Contractual Cash Obligations

$
1,628,471


$
192,089


$
356,027


$
525,096


$
555,259   Amount of Commitment Expiration per PeriodTotalAmounts


WithinCommitted


1 Year


2 - 3 Years


4 - 5 Years


After 5 Years(Dollars in thousands)Other Commercial
    CommitmentsStandby Letters of Credit(d)

$
166,380


$
166,380


$



$



$
Import Letters of Credit


46,013



46,013











Total Commercial Commitments

$
212,393


$
212,393


$



$



$
     (a)
    
    Interest rates used to compute estimated interest payments
    utilize the stated rate for fixed rate debt and projected
    interest rates for variable rate debt. Projected rates range
    from 5% to 6.5% over the term of the variable rate debt
    agreements. 22




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##### Table of Contents



(b)
    
    Lease payments consist of base rent only and do not include
    amounts for percentage rents, real estate taxes, insurance and
    other expenses related to those locations.(c)
    
    Purchase obligations include agreements to purchase goods or
    services that are enforceable and legally binding and that
    specify all significant terms, including: fixed or minimum
    quantities to be purchased; fixed, minimum or variable price
    provisions; and the approximate timing of the transaction.
    Agreements that are cancelable without penalty have been
    excluded. Purchase obligations relate primarily to purchases of
    property and equipment, information technology contracts,
    maintenance agreements and advertising contracts.(d)
    
    Standby letters of credit include a $126.8 million facility
    that supports the ten-year bond facility (accrued principal and
    interest) due July 2008.      Implementation
    of New Accounting Standards
       23




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##### Table of Contents



No. 06-5, Bulletin No. 85-4. No. 06-5 No. 06-5 No. 06-5
  No. 06-3, No. 06-3 No. 06-3 No. 06-3
    FAS 13-1, FAS 13-1, FAS 13-1 FAS 13-1.
  instrument-by-instrument available-for-sale held-to-maturity
 24




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##### Table of Contents



Impact of
    Inflation
    Critical
    Accounting Policies
          Inventory Valuation. cost-to-retail
  Vendor Allowances.
  
    Advertising allowances  Represents reimbursement of
    advertising costs initially funded by the Company. Amounts are
    recognized as a reduction to SG&A expenses in the period in
    which the advertising first runs.
    Markdown allowances  Represents reimbursement for the
    cost of markdowns to the selling price of the vendors
    merchandise. Amounts are recognized as a reduction to cost of
    goods sold in the later of the period 25




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##### Table of Contents



that the merchandise is marked down or the reimbursement is
    negotiated. Amounts received prior to recognizing the markdowns
    are recorded as a reduction to the cost of inventory.  
    Payroll allowances  Represents reimbursement for
    payroll costs. Amounts are recognized as a reduction to SG&A
    expense in the period that the payroll cost is incurred.  Property and Equipment, net. FAS 13-1,
  Goodwill.
  Rent Expense. FAS 13-1,
  Useful Lives of Depreciable Assets.
  Recoverability of Long-Lived
    Assets.
  Restructuring and Store Closing Reserves. and/or
  Customer Loyalty Programs.
 26




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##### Table of Contents



Pension and Postretirement Obligations.
            Self Insurance Reserves.
  Income Taxes.
     27




---



##### Table of Contents



Intangible Assets and Liabilities.
  Derivative Financial Instruments.
  Stock Based Compensation.
  Credit Income, Net.
  Item 7A.  Quantitative
    and Qualitative Disclosures About Market Risk         28




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  PageReport of
    Independent Registered Public Accounting Firm


30Consolidated
    Statements of Income


31Consolidated
    Balance Sheets


32Consolidated
    Statements of Changes in Stockholders Equity and
    Comprehensive Income


33Consolidated
    Statements of Cash Flows


34Notes to
    Consolidated Financial Statements


35  29




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                   30




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF INCOME
 (Dollars in thousands, except per share amounts)
  Fiscal Year EndedFebruary 3,


January 28,


January 29,2007


2006


2005Revenues

$
3,684,769


$
2,968,777


$
2,446,832Cost of goods sold (including
    occupancy and buying expenses)


2,451,171



1,977,385



1,618,639Selling, general and
    administrative expenses


915,766



727,312



600,697Gain on sale of property and
    equipment


10,316



4,998



1,802Asset impairment and store closing
    costs


3,739



3,707



2,957Pension curtailment charges


690



7,459



Hurricane losses






991



Restructuring charges






(1,580
)


Operating income


323,719



258,501



226,341Interest expense


(59,260
)


(50,790
)


(34,292
)Interest income


9,204



3,541



2,146Gain on sale of investments


5,387



2,303



81Income before income taxes


279,050



213,555



194,276Income taxes


97,200



76,500



70,200Income before cumulative effect of
    change in accounting principle


181,850



137,055



124,076Cumulative effect of change in
    accounting principle, net of income tax benefit of $98






(152
)


Net income

$
181,850


$
136,903


$
124,076Basic and diluted income per share
    before cumulative effect of change in accounting principle

$
3.59


$
2.65


$
2.40Cumulative effect of change in
    accounting principle










Basic and diluted net income per
    share

$
3.59


$
2.65


$
2.40Weighted average shares
    outstanding:Basic


50,594,523



51,717,325



51,693,308Diluted


50,659,077



51,717,325



51,693,308    31




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)
  February 3,


January 28,2007


2006ASSETSCurrent assets:Cash and cash equivalents

$
171,239


$
308,817Accounts receivable, net


61,434



43,867Merchandise inventory


931,870



703,609Prepaid income taxes, expenses and
    other current assets


32,926



33,049Total current assets


1,197,469



1,089,342Investment securities


5,317



6,196Property and equipment, net


1,280,426



1,039,608Goodwill


310,126



246,113Other assets


55,277



55,912Total assets

$
2,848,615


$
2,437,171LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
309,722


$
236,003Accrued liabilities


166,625



126,233Accrued income taxes


22,686



36,092Deferred income taxes


14,020



24,496Current installments of long-term
    debt and capital lease obligations


4,594



16,807Total current liabilities


517,647



439,631Deferred income taxes


13,835



10,076Long-term debt and capital lease
    obligations, excluding current installments


729,748



574,094Interest rate swap liability


1,435



4,641Deferred compensation and other
    noncurrent liabilities


259,928



213,902Total liabilities


1,522,593



1,242,344Stockholders equity:Preferred stock






Common stock, 50.0 and
    51.7 million shares issued and outstanding as of
    February 3, 2007 and January 28, 2006, respectively


500



517Paid-in capital


507,127



537,676Retained earnings


901,378



737,730Accumulated other comprehensive
    loss


(82,983
)


(81,096
)Total stockholders equity


1,326,022



1,194,827Total liabilities and
    stockholders equity

$
2,848,615


$
2,437,171    32




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CHANGES IN
 STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (Dollars in thousands)
  AccumulatedOtherCommon


Paid-in


Retained


ComprehensiveStock


Capital


Earnings


Income (Loss)


TotalBalance at January 31, 2004

$
519


$
536,484


$
517,721


$
(79,353
)

$
975,371Comprehensive income:Net income










124,076







124,076Reclassification adjustment for
    investment gains included in net income, net of $109 income tax
    benefit














(184
)


(184
)Unrealized gain on investments, net
    of $286 income tax expense














483



483Unrealized gain on interest rate
    swaps, net of income tax expense of $3,027














5,157



5,157Pension asset adjustment, net of
    income tax benefit of $6,474














(11,022
)


(11,022
)Total comprehensive income


















118,510Cash dividends










(24,700
)






(24,700
)Issuance of stock-based compensation






(4,566
)










(4,566
)Stock-based compensation expense






5,628











5,628Common stock issued


3



3,540











3,543Repurchase and retirement of common
    stock


(7
)


(7,163
)










(7,170
)Balance at January 29, 2005


515



533,923



617,097



(84,919
)


1,066,616Comprehensive income:Net income










136,903







136,903Reclassification adjustment for
    investment gains included in net income, net of $214 income tax
    benefit














(363
)


(363
)Unrealized gain on investments, net
    of $76 income tax expense














129



129Unrealized gain on interest rate
    swaps, net of income tax expense of $5,278














9,044



9,044Pension asset adjustment, net of
    income tax benefit of $3,123














(4,987
)


(4,987
)Total comprehensive income


















140,726Cash dividends










(16,270
)






(16,270
)Issuance of stock-based compensation






(4,598
)










(4,598
)Stock-based compensation expense






4,947











4,947Common stock issued


3



3,499











3,502Repurchase and retirement of common
    stock


(1
)


(95
)










(96
)Balance at January 28, 2006


517



537,676



737,730



(81,096
)


1,194,827Comprehensive income:Net income










181,850







181,850Reclassification adjustment for
    investment gains included in net income, net of $154 income tax
    benefit














(263
)


(263
)Unrealized gain on investments, net
    of $223 income tax expense














350



350Unrealized gain on interest rate
    swaps, net of income tax expense of $866














1,459



1,459Pension asset adjustment, net of
    income tax expense of $1,203














2,564



2,564Total comprehensive income


















185,960Cash dividends










(18,202
)






(18,202
)Issuance of stock-based compensation






(5,279
)










(5,279
)Stock-based compensation expense






9,434











9,434Adoption of SFAS 158
    adjustment, net of $3,560 income tax benefit














(5,997
)


(5,997
)Common stock issued


3



4,405











4,408Repurchase and retirement of common
    stock


(20
)


(39,109
)










(39,129
)Balance at February 3, 2007

$
500


$
507,127


$
901,378


$
(82,983
)

$
1,326,022    33




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
  Fiscal Year EndedFebruary 3,


January 28,


January 29,2007


2006


2005Cash flows from operating
    activities:Net income

$
181,850


$
136,903


$
124,076Adjustments to reconcile net income
    to net cash provided by operating activities:Asset impairment and store closing
    costs


3,739



3,707



2,957Deferred income taxes


19,423



23,842



1,702Depreciation and amortization
    expense


142,618



113,945



101,255Stock-based compensation expense


9,434



4,947



5,628Restructuring charges






(1,580
)


Pension curtailment


690



7,459



Gain on sale of property and
    equipment


(8,220
)


(4,998
)


(1,802
)Amortization of deferred gain on
    sale and leaseback


(2,096
)






Gain on sale of investments


(5,387
)


(2,303
)


(81
)Other non-cash expense


980



990



998(Increase) decrease in:Accounts receivable, net


(16,385
)


(37,149
)


(7,892
)Merchandise inventory


(7,525
)


(33,693
)


(31,618
)Prepaid expenses and other assets


(8,187
)


(36,148
)


498Increase (decrease) in:Accounts payable and accrued
    liabilities


(38,755
)


58,752



13,642Accrued income taxes


(13,407
)


571



(1,210
)Deferred compensation and other
    liabilities


18,621



(8,897
)


27,684Net cash provided by operating
    activities


277,393



226,348



235,837Cash flows from investing
    activities:Acquisition of Parisian, net of
    cash acquired


(313,648
)






Acquisition of Migerobe


(16,739
)






Acquisition of
    Proffitts/McRaes, net of cash acquired






(620,970
)


Proceeds from sale of credit card
    portfolio






321,289



Purchases of investments






(50
)


(167
)Proceeds from sales of investments


6,243







100Purchases of property and equipment


(191,128
)


(166,817
)


(142,235
)Proceeds from sales of property and
    equipment


15,046



74,244



5,076Net cash used by investing
    activities


(500,226
)


(392,304
)


(137,226
)Cash flows from financing
    activities:Proceeds from issuance of long-term
    debt


359,510



828,781



19Principal payments on long-term
    debt and capital lease obligations


(217,245
)


(553,922
)


(7,898
)Payments for redemption of interest
    rate swaps


(910
)


(4,364
)


Proceeds from termination of
    interest rate swap


50







Stock compensation tax benefit


1,182



1,411



183Dividends paid


(18,202
)


(16,270
)


(24,700
)Repurchase of common stock


(39,130
)


(95
)


(7,170
)Net cash provided (used) by
    financing activities


85,255



255,541



(39,566
)Net (decrease) increase in cash and
    cash equivalents


(137,578
)


89,585



59,045Cash and cash equivalents at
    beginning of period


308,817



219,232



160,187Cash and cash equivalents at end of
    period

$
171,239


$
308,817


$
219,232Supplemental disclosures of cash
    flow information:Interest paid

$
33,734


$
33,235


$
23,511Income taxes paid


92,295



57,611



65,060Supplemental schedule of noncash
    investing and financing activities:Increase in property and equipment
    through assumption of capital leases


10,686



2,111



1,212Increase in property and equipment
    through capitalization of construction period rent






1,061



7,982Increase in property and equipment
    through accrued purchases


11,069



17,736



9,290Increase in long-term debt through
    other current assets






12,653



    34




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  (1)  Summary
    of Significant Accounting Policies
  Description
    of Business and Basis of Presentation
      Use of
    Estimates
      Revenues
    Fiscal Year


Fiscal Year


Fiscal YearFamily of Business

2007


2006


2005Womens


37
%


36
%


37
%Center Core


29



29



28Mens


17



17



17Home


11



12



12Childrens


6



6



6Total


100
%


100
%


100
%      35




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Cost of
    Goods Sold
    Finance
    Charges
    Gift
    Cards
    Pre-Opening
    Costs
    Advertising
    Long-Lived
    Asset Recoverability
    Cash
    Equivalents
    Merchandise
    Inventory
    Investments
  available-for-sale
 36




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Property
    and Equipment, Net
  FAS 13-1,
  Goodwill
      Rent
    Expense
  FAS 13-1,
  Vendor
    Allowances
    
    Advertising allowances  Represents reimbursement of
    advertising costs initially funded by the Company. Amounts are
    recognized as a reduction to selling, general and administrative
    expenses in the period that the advertising expense is incurred. 37




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    Markdown allowances  Represents reimbursement for the
    cost of markdowns to the selling price of the vendors
    merchandise. Amounts are recognized as a reduction to cost of
    goods sold in the later of the period that the merchandise is
    marked down or the reimbursement is negotiated. Amounts received
    prior to recognizing the markdowns are recorded as a reduction
    to the cost of inventory.
    Payroll allowances  Represents reimbursement for
    payroll costs. Amounts are recognized as a reduction to selling,
    general and administrative expense in the period that the
    payroll cost is incurred.  Stock
    Based Compensation
    Income
    Taxes
      Intangible
    Assets and Liabilities
    Derivative
    Financial Instruments
   38




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Implementation
    of New Accounting Standards
     39




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      No. 06-5, Bulletin No. 85-4. No. 06-5 No. 06-5 No. 06-5
  No. 06-3, No. 06-3 No. 06-3 No. 06-3
    FAS 13-1, FAS 13-1, FAS 13-1 FAS 13-1.
   40




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  instrument-by-instrument available-for-sale held-to-maturity
  (2)  Acquisitions
  Parisian
          Dollars in thousandsAccounts receivable, net

$
1,182Inventory


207,012Other current assets


4,729Property, plant and equipment


198,606Goodwill


57,922Deferred income taxes


23,832Other assets


6,545Total assets acquired


499,828Current liabilities


152,537Long-term liabilities


32,587Total liabilities assumed


185,124Net Assets Acquired

$
314,704  41




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    53 Weeks Ended


52 Weeks EndedFebruary 3, 2007


January 28, 2006(Dollars in thousands)Net Sales

$
4,127,639


$
3,692,212Net Income


161,124



121,643Earnings per share, basic and
    diluted


3.18



2.35       Migerobe,
    Inc.
      Proffitts
    and McRaes
    (3)  Sale
    of Credit Card Portfolio
   42




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    10-year
  9-year
  10-year
  (4)  VISA
    Settlement
    (5)  Hurricane
    Katrina
     43




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (6)  Asset
    Impairment and Store Closing Costs
        February 3,


January 28,2007


2006(Dollars in thousands)Balance, beginning of year

$
1,345


$
5,252Charges and adjustments


11,378



(564
)Utilization


(2,312
)


(3,343
)Balance, end of year

$
10,411


$
1,345   (7)  Lease
    Accounting
     44




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  life-to-date
    FAS 13-1,
  (8)  Restructuring
    Charge
        (9)  Accumulated
    Other Comprehensive Loss
    February 3,


January 28,2007


2006(Dollars in thousands)Unrealized loss on interest rate
    swaps, net of $125 and $991 income tax benefit as of
    February 3, 2007 and January 28, 2006, respectively

$
(171
)

$
(1,630
)Unrealized gains on investments,
    net of $1,063 and $987 income tax expense as of February 3,
    2007 and January 28, 2006, respectively


1,792



1,705Adoption of SFAS 158
    adjustment, net of $3,560 income tax benefit as of
    February 3, 2007


(5,997
)


Pension asset adjustment, net of
    $46,663 and $47,866 income tax benefit as of February 3,
    2007 and January 28, 2006, respectively


(78,607
)


(81,171
)Accumulated other comprehensive
    loss

$
(82,983
)

$
(81,096
)  45




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (10)  Accounts
    Receivable, Net
    February 3,


January 28,2007


2006(Dollars in thousands)Accounts receivable from vendors

$
31,456


$
14,552Credit card accounts receivable


16,946



7,750Other receivables


13,124



21,647Less allowance for doubtful
    accounts


(92
)


(82
)Accounts receivable, net

$
61,434


$
43,867     53 Weeks Ended


52 Weeks Ended


52 Weeks EndedFebruary 3,


January 28,


January 29,2007


2006


2005(Dollars in thousands)Balance, beginning of year

$
82


$
9,986


$
13,036Charged to expense


24



9,350



11,661Net uncollectible balances written
    off


(14
)


(11,349
)


(14,711
)Reduction for sale of customer
    accounts receivable






(7,905
)


Balance, end of year

$
92


$
82


$
9,986   (11)  Investment
    Securities
  Held-to-maturity held-to-maturity
  February 3,


January 28,2007


2006(Dollars in thousands)Amortized cost

$



$
475Gross unrealized gains






(3
)Fair value

$



$
472   Available-for-sale available-for-sale
  February 3,


January 28,2007


2006(Dollars in thousands)Cost

$
2,462


$
3,010Gross unrealized gains


2,855



2,711Fair value of securities

$
5,317


$
5,721   available-for-sale
 46




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    53 Weeks Ended


52 Weeks Ended


52 Weeks EndedFebruary 3,


January 28,


January 29,2007


2006


2005(Dollars in thousands)Gross realized gains on sales of
    securities

$
427


$
606


$
396Gross realized losses on sales of
    securities










(49
)Losses on other than temporary
    declines in market values










(155
)Net realized gain

$
427


$
606


$
192   (12)  Property
    and Equipment, net
    Estimated


February 3,


January 28,lives


2007


2006(Dollars in thousands)Land


n/a


$
69,010


$
53,168Buildings


15-40



1,020,759



852,707Furniture, fixtures and equipment


3-7



1,020,991



862,175Property under capital leases


5-20



61,050



50,850Construction in progress


n/a



40,189



44,7832,211,999



1,863,683Less accumulated depreciation and
    amortization






(931,573
)


(824,075
)Property and equipment, net





$
1,280,426


$
1,039,608   (13)  Sale
    of Properties
    Accounting for Leases, 15-year
 47




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (14)  Accrued
    Liabilities
    February 3,


January 28,2007


2006(Dollars in thousands)Salaries, wages and employee
    benefits

$
43,281


$
34,908Interest


4,066



3,157Rent


10,115



5,913Taxes, other than income


21,359



16,829Sales returns allowance


7,328



5,522Severance


15,427



273Store closing and restructuring
    reserves


9,574



941Self insurance reserves


8,278



6,165Advertising


3,755



4,470Accrued capital expenditures


11,069



17,736Other


32,373



30,319Accrued Liabilities

$
166,625


$
126,233   (15)  Borrowings
    February 3,


January 28,2007


2006(Dollars in thousands)Bond facility

$
125,000


$
125,000Credit facility term loan


350,000



200,000Senior notes


200,000



200,000Sale/leaseback financing






13,681Capital lease agreements through
    July 2021


38,342



31,153State bond facility


21,000



21,000Unsecured notes payable






67734,342



590,901Less current installments


(4,594
)


(16,807
)Long-term debt and capital lease
    obligations, excluding current installments

$
729,748


$
574,094        48




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        20-year
     49




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (16)  Deferred
    Compensation and Other Noncurrent Liabilities
    February 3,


January 28,2007


2006(Dollars in thousands)Pension Liability

$
73,228


$
63,773Unfavorable Lease Liability


34,524



9,130Deferred Compensation Plans


29,197



27,379Deferred Gain on Sale/Leaseback


27,073



29,169Post-Retirement Benefits


26,049



23,493Supplemental Executive Retirement
    Plans


21,340



18,774Other Deferred Income


15,128



12,865Self-Insurance Reserves


12,118



15,003Developer Incentive Liability


6,430



5,528Other Noncurrent Liabilities


14,841



8,788Deferred compensation and other
    noncurrent liabilities

$
259,928


$
213,902   (17)  Leases
      Fiscal Year

Capital


Operating(Dollars in thousands)2008


7,206



69,5202009


6,399



64,1642010


6,233



59,3382011


5,190



52,3922012


4,864



45,353After 2012


23,897



271,613Total


53,789



562,380Less sublease rental income






(1,457
)Net rentals


53,789


$
560,923Less imputed interest


(15,447
)Present value of minimum lease
    payments


38,342Less current portion


(4,594
)$
33,748  50




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    53 Weeks Ended


52 Weeks Ended


52 Weeks EndedFebruary 3,


January 28,


January 29,2007


2006


2005(Dollars in thousands)Buildings:Minimum rentals

$
43,820


$
40,972


$
33,906Contingent rentals


4,357



4,205



3,507Sublease rental income


(789
)


(524
)


(493
)Equipment


1,638



1,567



1,366Total net rental expense

$
49,026


$
46,220


$
38,286   (18)  Income
    Taxes
    53 Weeks Ended


52 Weeks Ended


52 Weeks EndedFebruary 3,


January 28,


January 29,2007


2006


2005(Dollars in thousands)Current:Federal

$
72,106


$
52,867


$
57,157State


5,671



4,189



4,67077,777



57,056



61,827Deferred:Federal


18,007



18,017



7,742State


1,416



1,427



63119,423



19,444



8,373Income taxes

$
97,200


$
76,500


$
70,200     53 Weeks Ended


52 Weeks Ended


52 Weeks EndedFebruary 3,


January 28,


January 29,2007


2006


2005(Dollars in thousands)Income tax at the statutory
    federal rate

$
97,668


$
74,744


$
67,996State income taxes, net of federal
    income tax benefit


4,607



3,011



3,447Increase in Cash Surrender Value
    of Officers Life Insurance


(4,355
)


(3,396
)


(3,120
)Other


(720
)


2,141



1,877Income taxes

$
97,200


$
76,500


$
70,200  51




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    February 3,


January 28,2007


2006(Dollars in thousands)Deferred tax assets:Prepaid pension costs

$
27,510


$
21,922Benefit plan costs


31,553



29,259Restructuring and other reserves


30,480



13,548Inventory capitalization


3,358



2,028Tax carryovers


2,951



2,312Interest rate swaps


1,822



2,167Prepaid rent


5,662



4,807Intangibles


14,447



3,756Other


6,244



4,912Gross deferred tax assets


124,027



84,711Less valuation allowance


(233
)


(437
)Net deferred tax assets


123,794



84,274Deferred tax liabilitiesProperty and equipment


84,782



70,487Intangibles


7,844



5,643Inventory


42,570



33,241Investment securities


2,049



2,207Goodwill


9,203



3,362Other


5,201



3,906Gross deferred tax liabilities


151,649



118,846Net deferred tax liabilities

$
27,855


$
34,572        52




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (19)  Pension,
    SERP And Postretirement Benefits
         53




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Pension Benefits


Old SERP Benefits


Postretirement BenefitsFebruary 3,


January 28,


February 3,


January 28,


February 3,


January 28,2007


2006


2007


2006


2007


2006(Dollars in thousands)Change in projected benefit
    obligation:Benefit obligation at beginning of
    year

$
382,333


$
362,073


$
11,876


$
12,329


$
28,308


$
26,058Service cost


3,585



5,077



133



123



158



156Interest cost


21,545



21,423



656



700



1,598



1,502Plan amendments






8,022















Actuarial losses


25,024



8,509



1,445



43



1,531



3,273Benefits paid


(22,381
)


(22,771
)


(1,395
)


(1,319
)


(2,759
)


(2,681
)Benefit obligation at end of year


410,106



382,333



12,715



11,876



28,836



28,308Change in plan assets:Fair value of plan assets at
    beginning of year


318,560



309,454















Actual return on plan assets


40,699



25,877















Contributions to plan






6,000



1,395



1,319



2,759



2,681Benefits paid


(22,381
)


(22,771
)


(1,395
)


(1,319
)


(2,759
)


(2,681
)Fair value of plan assets at end
    of year


336,878



318,560















Funded Status


(73,228
)


(63,773
)


(12,321
)


(11,546
)


(28,836
)


(28,308
)Unrecognized net transition
    obligation


















1,570



1,832Unrecognized prior service costs


4,204



5,470



2



4







Unrecognized net loss


125,269



129,037



1,954



550



1,826



222Net prepaid (accrued)

$
56,245


$
70,734


$
(10,365
)

$
(10,992
)

$
(25,440
)

$
(26,254
)  54




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Pension Benefits


Old SERP Benefits


Postretirement BenefitsFebruary 3,


January 28,


February 3,


January 28,


February 3,


January 28,2007


2006


2007


2006


2007


2006(Dollars in thousands)Other assets

$



$
5,470


$



$



$



$
Accrued liabilities










1,180



1,193



2,787



2,761Deferred income tax assets


48,229



47,866



729







1,265



Deferred compensation and other
    noncurrent liabilities


73,228



63,773



11,141



9,799



26,049



23,493Accumulated other comprehensive
    loss


(81,244
)


(81,171
)


(1,227
)






(2,131
)


   Pension Benefits


Old SERP Plan


Postretirement BenefitsFebruary 3,


January 28,


February 3,


January 28,


February 3,


January 28,2007


2006


2007


2006


2007


2006(Dollars in thousands)Obligation and funded status at
    November 1, 2006 and 2005, respectively:Projected benefit obligation

$
410,106


$
382,333


$
12,715


$
11,876


$
28,836


$
28,308Accumulated benefit obligation


410,106



382,333



11,127



10,625



N/A



N/AFair value of plan assets


336,878



318,560















     Pension Plan


Old SERP Plan


Postretirement PlanFebruary 3,


January 28,


January 29,


February 3,


January 28,


January 29,


February 3,


January 28,


January 29,2007


2006


2005


2007


2006


2005


2007


2006


2005Discount rates


5.750
%


5.750
%


5.875
%


5.750
%


5.750
%


5.875
%


5.750
%


5.750
%


5.875
%Rates of compensation increase


4.0



3.0



3.0



4.0



3.0



3.0



N/A



N/A



N/AReturn on plan assets


8.5



8.5



8.5



N/A



N/A



N/A



N/A



N/A



N/A      55




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Percentage of Plan Assets at Measurement DateTarget Allocation


February 3,


January 28,


January 29,February 2, 2008


2007


2006


2005Equity Securities


65-70
%


68
%


69
%


67
%Fixed Income


30-35



31



30



32Cash


0



1



1



1Total


100
%


100
%


100
%


100
%     Fiscal Year

Pension Plan


Old SERP Plan


Postretirement Plan(Dollars in thousands)2008

$
23,119


$
1,180


$
2,7872009


23,377



1,135



2,7852010


23,675



1,103



2,7142011


24,013



1,071



2,6742012


24,547



1,040



2,6422013  2017


134,243



6,186



12,573       Pension Plan


Old SERP Plan


Postretirement Plan53 Weeks


52 Weeks


52 Weeks


53 Weeks


52 Weeks


52 Weeks


53 Weeks


52 Weeks


52 WeeksEnded


Ended


Ended


Ended


Ended


Ended


Ended


Ended


EndedFebruary 3,


January 28,


January 29,


February 3,


January 28,


January 29,


February 3,


January 28,


January 29,2007


2006


2005


2007


2006


2005


2007


2006


2005(Dollars in thousands)Service cost

$
3,585


$
5,077


$
10,345


$
133


$
124


$
358


$
158


$
156


$
213Interest cost


21,545



21,423



21,230



655



700



1,004



1,598



1,502



1,535Expected return on assets


(23,924
)


(25,198
)


(26,233
)






















Amortization of unrecognized items:Net transition (asset) obligation


























262



262



262Prior service cost


576



1,362



276



2



13



20











Net losses (gains)


12,016



10,939



8,381



42



47



100



(73
)


(425
)


(497
)Annual benefit expense

$
13,798


$
13,603


$
13,999


$
832


$
884


$
1,482


$
1,945


$
1,495


$
1,513Curtailment (gain)/loss


690



7,459















(530
)










Settlement (gain)/loss






















65











Cost of special term benefits






















2,401











Total expense

$
14,488


$
21,062


$
13,999


$
832


$
884


$
3,418


$
1,945


$
1,495


$
1,513  56




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    OldPension


SERP


PostretirementBenefits


Plan


Benefits(Dollars in thousands)Amortization of actuarial
    (gain)/loss

$
11,707


$
195


$
89Amortization of prior service
    (credit)/cost


495



1



Amortization of transition
    (asset)/obligation










262Total recognized from other
    comprehensive income

$
12,202


$
196


$
351     Incremental Effect of Adopting SFAS 158Prior toApplication of


SFAS


AfterSFAS


No. 158


Application ofNo. 158


Adjustments


SFAS No. 158Other assets

$
59,481


$
(4,204
)

$
55,277Total assets


2,852,819



(4,204
)


2,848,615Deferred income taxes


16,134



(2,114
)


14,020Total current liabilities


519,761



(2,114
)


517,647Deferred income taxes


15,281



(1,446
)


13,835Deferred compensation and other
    noncurrent liabilities


254,575



5,353



259,928Total liabilities


1,520,800



1,793



1,522,593Accumulated other comprehensive
    loss


(76,986
)


(5,997
)


(82,983
)Total stockholders equity


1,332,019



(5,997
)


1,326,022Total liabilities and
    stockholders equity

$
2,852,819


$
(4,204
)

$
2,848,615   (20)  Other
    Employee Benefits
       57




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          (21)  Stock-Based
    Compensation
        Performance
    Based Stock Award Programs
     58




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Weighted-AverageGrant Date Fair ValueShares


per Share(In thousands)Nonvested at January 28, 2006


510


$
12.65Granted


421



20.41Changes in Performance Estimates


27



18.20Vested


359



13.75Forfeited


(21
)


14.63Nonvested at February 3, 2007


578



18.30          59




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-AverageGrant Date Fair ValueShares


per Share(In thousands)Nonvested at January 28, 2006


237


$
17.00Granted


86



26.40Changes in Performance Estimates


(32
)


19.11Vested


108



17.00Forfeited


(11
)


17.00Nonvested at February 3, 2007


172



21.20     Key
    Executive Share Grant Program
       60




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (22)  Fair
    Value of Financial Instruments
    February 3, 2007


January 28, 2006Carrying


Fair


Carrying


FairValue


Value


Value


Value(Dollars in thousands)Long-term debt (excluding
    capitalized leases)

$
696,000


$
690,416


$
559,748


$
554,743Interest rate swap liability


1,435



1,435



4,641



4,641Investment securities


5,317



5,317



6,196



6,193     (23)  Purchase
    Obligations
      (24)  Earnings
    Per Share
    February 3,2007Basic Shares


50,594,523Dilutive contingently-issuable
    non-vested share awards


64,554Diluted Shares


50,659,077   (25)  Stockholders
    Equity
   61




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   non-Class A
          (26)  Related
    Party Transactions
     62




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (27)  Selected
    Quarterly Financial Data (unaudited)
    Three Months EndedFebruary 3,


October 28,


July 29,


April 29,2007


2006


2006


2006(In thousands, except per share amounts)Revenues

$
1,405,995


$
794,277


$
731,972


$
752,525Gross profit(1)


482,522



258,972



244,410



247,694Net income


113,015



23,056



26,308



19,471Basic income per share


2.26



0.46



0.52



0.38Diluted income per share


2.25



0.46



0.52



0.38   Three Months EndedJanuary 28,


October 29,


July 30,


April 30,2006


2005


2005


2005(In thousands, except per share amounts)Revenues

$
1,096,631


$
701,298


$
602,718


$
568,130Gross profit(1)


393,264



210,715



195,694



191,719Income (loss) before cumulative
    effect of change in accounting principle


100,056



(4,511
)


17,177



24,333Net income (loss)


99,904



(4,511
)


17,177



24,333Basic and diluted income (loss)
    per share


1.93



(0.09
)


0.33



0.47     (1)
    
    Gross profit represents revenues less cost of goods sold
    (including occupancy and buying expenses)   63




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
    Managements
    Report on Internal Control over Financial Reporting
        Internal Control-Integrated Framework. Internal Control-Integrated Framework.
     64




---



##### Table of Contents



Changes
    in Internal Control over Financial Reporting
   65




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
               66




---



##### Table of Contents



67




---



##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance        Form 10-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters      Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence     68




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##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a) 1.
    Consolidated Financial Statements
          
    Consolidated Financial Statement Schedules
  Exhibits
  Form 10-K
  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,
    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,
    filed on April 15, 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,
    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,
    filed on April 15, 2004).10
.1

Belk, Inc. 2000 Incentive Stock
    Plan (incorporated by reference to Exhibit 10.13 to the
    Registrants Annual Report on
    Form 10-K,
    filed on April 28, 2000).10
.1.1

Belk, Inc. Executive Long Term
    Incentive Plan (incorporated by reference to Exhibit 10.4
    of the Companys Annual Report on
    Form 10-K,
    filed on April 14, 2005).10
.1.2

Form of Belk, Inc. 2005 Executive
    Transition Incentive Plan Certificate (incorporated by reference
    to Exhibit 10.1 of the Companys Current Report on
    Form 8-K,
    filed on November 22, 2005).10
.1.3

Belk, Inc. CFO Incentive Plan
    (incorporated by reference to Exhibit 10.1.3 of the
    Companys Annual Report on
    form 10-K,
    filed on April 13, 2006).10
.2

Belk, Inc. 2004 Supplemental
    Executive Retirement Plan (incorporated by reference to
    Exhibit 10.2 of the Companys Annual Report on
    Form 10-K,
    filed on April 15, 2004). 69




---



##### Table of Contents



10
.3

Belk, Inc. Annual Incentive Plan
    (incorporated by reference to Exhibit 10.3 of the
    Companys Annual Report on
    Form 10-K,
    filed on April 14, 2005).10
.4

Note and Pledge Agreement, dated
    October 1, 2001, by and between Thomas M. Belk, Jr.
    and Belk, Inc. (incorporated by reference to Exhibit 10.4
    of the Companys Quarterly Report on
    Form 10-Q,
    filed on December 18, 2001).10
.5

Note and Pledge Agreement, dated
    October 1, 2001, by and between H.W. McKay and Belk, Inc.
    (incorporated by reference to Exhibit 10.5 of the
    Companys Quarterly Report on
    Form 10-Q,
    filed on December 18, 2001).10
.6

Note and Pledge Agreement, dated
    October 1, 2001, by and between John R. Belk and Belk, Inc.
    (incorporated by reference to Exhibit 10.6 of the
    Companys Quarterly Report on
    Form 10-Q,
    filed on December 18, 2001).10
.7

Amended Note and Pledge Agreement,
    dated February 1, 2002, by and between John R. Belk and
    Belk, Inc. (incorporated by reference to Exhibit 10.12 of
    the Companys Annual Report on
    Form 10-K,
    filed on May 3, 2002).10
.8

Consulting Services Agreement
    dated as of May 26, 2004 by and between Belk, Inc. and John
    M. Belk (incorporated by reference to Exhibit 10.2 of the
    Companys Quarterly Report on
    Form 10-Q,
    filed on June 10, 2004).10
.9

Agreement between Belk, Inc and
    subsidiaries and Mary R. Delk. (incorporated by reference to
    Exhibit 10.1 of the Companys Quarterly Report on
    Form 10-Q,
    filed on June 8, 2006).10
.10

Stock Purchase Agreement by and
    between Saks Incorporated and Belk, Inc., dated as of
    August 1, 2006. (incorporated by reference to
    Exhibit 10.1 of the Companys Quarterly Report on
    Form 10-Q,
    filed on September 7, 2006).10
.11

Second Amended and Restated Credit
    Agreement, dated as of October 2, 2006, by and among Belk,
    Inc. and the subsidiaries of Belk, Inc., as borrowers, and
    Wachovia Bank, National Association, Bank of America, NA. and
    the other lenders referred to therein (incorporated by reference
    to the Companys Current Report on
    Form 8-K
    filed on October 6, 2006).14
.1

Belk, Inc. Code of Ethics for
    Senior Executive and Financial Officers (incorporated by
    reference to Exhibit 14.1 of the Companys Annual
    Report on
    Form 10-K,
    filed on April 14, 2004).21
.1

Subsidiaries.23
.1

Consent of KPMG LLP.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.  70




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##### Table of Contents



SIGNATURES
    
  By:
    /s/  THOMAS
    M. BELK, JR.  Thomas M. Belk, Jr.
 Chairman of the Board and
    Chief
 Executive Officer
    Signature

Title/s/  THOMAS
    M. BELK, JR.Thomas
    M. Belk, Jr.

Chairman of the Board, Chief
    Executive Officer
    (Principal Executive Officer) and Director/s/  H.
    W. MCKAY BELKH.
    W. McKay Belk

President, Chief Marketing Officer
    and Director/s/  JOHN
    R. BELKJohn
    R. Belk

President, Chief Operating Officer
    and Director/s/  J.
    KIRK
    GLENN, JR.J.
    Kirk Glenn, Jr.

Director/s/  JOHN
    A. KUHNEJohn
    A. Kuhne

Director/s/  ELIZABETH
    VALK LONGElizabeth
    Valk Long

Director/s/  THOMAS
    C. NELSONThomas
    C. Nelson

Director/s/  JOHN
    R. THOMPSONJohn
    R. Thompson

Director/s/  JOHN
    L.
    TOWNSEND, IIIJohn
    L. Townsend, III

Director/s/  BRIAN
    T. MARLEYBrian
    T. Marley

Executive Vice President and Chief
    Financial Officer
    (Principal Financial Officer)/s/  ADAM
    M. ORVOSAdam
    M. Orvos

Senior Vice President Finance
    (Controller and Principal Accounting Officer)  71