##### 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 2, 2008ORo

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

56-2058574(State of incorporation)

(IRS Employer Identification No.)2801 West Tyvola Road, Charlotte, North Carolina

28217-4500(Address of Principal Executive
    Offices)

(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. o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company 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


81B.

Unresolved Staff Comments


112.

Properties


113.

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


66Part III10.

Directors, Executive Officers and Corporate
    Governance


6611.

Executive Compensation


6612.

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


6613.

Certain Relationships and Related Transactions,
    and Director Independence


6614.

Principal Accountant Fees and Services


67Part IV15.

Exhibits and Financial Statement Schedules


67Exhibit 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
      Fiscal Year


Ended

Weeks2008


February 2, 2008


522007


February 3, 2007


532006


January 28, 2006


522005


January 29, 2005


52           28217-4500, (704) 357-1000.
  Business
    Strategy
   2




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##### Table of Contents



Growth
    Strategy
     3




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##### Table of Contents



New Stores
  Size (Selling


Opening


New or ExistingLocation

Sq. Ft.)


Date


MarketRussellville, AR (Valley Park Centre)


55,474



3/14/07


NewColumbia, SC (The Village at Sandhill)


109,427



3/14/07


ExistingFlower Mound, TX (Robertsons Creek)


86,246



3/14/07


NewWilmington, NC (Mayfaire Town Center)


119,102



4/18/07


ExistingAlpharetta, GA (Northpoint)


99,068



9/12/07


NewCape Coral, FL (The Shops at Surfside)


67,576



10/17/07


NewBurlington, NC (Alamance Crossing)


85,984



10/17/07


ExistingBossier City, LA (Stirling Bossier Shopping Center)


67,577



10/17/07


NewMurfreesboro, TN (The Avenue)


114,953



10/17/07


NewRockwall, TX (Plaza at Rockwall)


66,687



10/17/07


NewPalm Coast, FL (Cobblestone Village)


67,417



10/17/07


New   Store Expansions
  Expanded Size


CompletionLocation

(Selling Sq. Ft)


DateAnderson, SC (Anderson Mall)


116,970



6/15/07Kennesaw, GA (Town Center at Cobb)


132,993



9/12/07Franklin, TN (Cool Springs Galleria)


118,735



9/12/07Huntsville, AL (Parkway Place)


162,222



9/12/07Decatur, AL (Colonial Mall)


73,947



9/12/07Douglasville, GA (Arbor Place Mall)


118,714



9/12/07Huntsville, AL (Madison Square)


96,750



9/12/07Tuscaloosa, AL (University Mall)


138,622



9/12/07Shallotte, NC (Shallotte Crossing)


58,869



10/17/07Raleigh, NC (Crabtree Valley Mall)


258,059



11/14/07Knoxville, TN (West Town Mall)


189,344



11/14/07Hoover, AL (Riverchase Galleria)


222,453



11/14/07Kill Devil Hills, NC (Dare Centre)


73,869



11/21/07     Merchandising
     4




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##### Table of Contents



Marketing
    and eCommerce
      Gift
    Cards
    Salons
    and Spas
   5




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##### Table of Contents



Belk Gift
    Registry
    Belk
    Proprietary Charge Programs
  10-year
      Systems
    and Technology
    Inventory
    Management and Logistics
   6




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##### Table of Contents



Non-Retail
    Businesses
    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,
 7




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##### Table of Contents



Item 1A.  Risk
    Factors        General
    Economic, Political and Business Conditions
    Anticipating
    Customer Demands
    Effects
    of Weather
    Seasonal
    Fluctuations
   8




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##### Table of Contents



Highly
    Competitive Industry
    Advertising,
    Marketing and Promotional Campaigns
    Merchandise
    Sourcing
    Credit
    Card Operations
  10-year
  Inventory
    Levels
    Expense
    Management
   9




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##### Table of Contents



Integrating
    and Operating Acquired Stores
    New Store
    Growth
    Logistics,
    Distribution and Information Technology
    eCommerce
    Debt
    Covenants
    Other
    Factors
   10




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##### Table of Contents



Item 1B.  Unresolved
    Staff Comments    Item 2.
    Properties  Store
    Locations
    Alabama  23

Louisiana  4

Oklahoma  2Arkansas  7

Maryland  2

South Carolina  37Florida  30

Mississippi  16

Tennessee  23Georgia  46

Missouri  1

Texas  11Kentucky  5

North Carolina  72

Virginia  20West Virginia  4       Non-Store
    Facilities
    Belk Property

Location

Own/LeaseFormer Belk, 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


OwnFormer Parisian Distribution Center

Steele, AL


OwnBelk, Inc. Fine Jewelry Distribution Center

Ridgeland, MS


LeaseBelk, Inc. eCommerce Fulfillment Center

Pineville, NC


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    Fiscal Year EndedFebruary 2,


February 3,


January 28,


January 29,


January 31,2008


2007


2006


2005


2004(Dollars in thousands, except per share amounts)SELECTED STATEMENT OF INCOME DATA:Revenues

$
3,824,803


$
3,684,769


$
2,968,777


$
2,446,832


$
2,264,907Cost of goods sold


2,636,888



2,451,171



1,977,385



1,618,639



1,506,905Depreciation and amortization expense


159,945



142,618



113,945



101,255



91,007Operating income


198,117



323,719



258,501



226,341



213,365Income before income taxes


138,644



279,050



213,555



194,276



170,647Net income


95,740



181,850



136,903



124,076



111,547Basic and diluted income per share:From continuing operations


1.92



3.59



2.65



2.40



2.11Net income


1.92



3.59



2.65



2.40



2.11Cash dividends per share


0.400



0.350



0.315



0.475



0.275SELECTED BALANCE SHEET DATA:Accounts receivable, net(1)


65,987



61,434



43,867



324,917



317,025Merchandise inventory


932,777



931,870



703,609



527,860



496,242Working capital


750,547



679,822



649,711



787,390



698,059Total assets


2,854,523



2,848,615



2,437,171



1,859,085



1,730,263Long-term debt and capital lease obligations


722,141



734,342



590,901



301,419



308,488Stockholders equity


1,388,726



1,326,022



1,194,827



1,066,616



975,371SELECTED OPERATING DATA:Number of stores at end of period


303



315



276



226



221Comparable store net revenue increase (decrease)
    (on a 52 versus 52 week basis)


(1.1
)%


4.5
%


1.2
%


4.2
%


(0.5
)%     (1)
    
    In fiscal year 2006, the Company sold its proprietary credit
    card business to GE. This transaction caused a significant
    reduction in accounts receivable.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
      Fiscal Year

Ended

Weeks2008

February 2, 2008

522007

February 3, 2007

532006

January 28, 2006

522005

January 29, 2005

52    13




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##### Table of Contents



eCommerce
    Parisian
    Acquisition
     14




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##### Table of Contents



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




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##### Table of Contents



Hurricane
    Katrina
        VISA
    Settlement
   16




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##### Table of Contents



Results
    of Operations
    Fiscal Year EndedFebruary 2,


February 3,


January 28,2008


2007


2006SELECTED FINANCIAL DATARevenues


100.0
%


100.0
%


100.0
%Cost of goods sold


68.9



66.5



66.6Selling, general and administrative expenses


25.7



24.9



24.5Gain on sale of property and equipment


0.1



0.3



0.2Asset impairment and store closing costs


0.3



0.1



0.1Pension curtailment charges










0.3Restructuring charges










(0.1
)Operating income


5.2



8.8



8.7Interest expense


1.7



1.6



1.7Interest income


0.2



0.2



0.1Gain (loss) on sale of investments






0.1



0.1Income tax expense


1.1



2.6



2.6Net income


2.5



4.9



4.6SELECTED OPERATING DATA:Selling square footage (in thousands)


23,937



24,498



20,400Store revenues per selling sq. ft.

$
160


$
158


$
168Comparable store net revenue increase (decrease)
    (on a 52 versus 52 week basis)


(1.1
)%


4.5
%


1.2
%Number of storesOpened


11



10



12Purchased






37



47Combined Stores


(4
)






Closed


(19
)


(8
)


(9
)Total  end of period


303



315



276     Fiscal Year


Fiscal Year


Fiscal YearMerchandise Areas

2008


2007


2006Womens


37
%


37
%


36
%Cosmetics, Shoes and Accessories


30
%


29
%


29
%Mens


17
%


17
%


17
%Home


10
%


11
%


12
%Childrens


6
%


6
%


6
%Total


100
%


100
%


100
%  17




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##### Table of Contents



Comparison
    of Fiscal Years Ended February 2, 2008 and February 3,
    2007
  Revenues.
  Cost of Goods Sold.
  Selling, General and Administrative
    Expenses.
  
    Selling-related expenses (primarily consisting of payroll and
    advertising expenses) increased as a percentage of revenues by
    1.31%, or $73.0 million, primarily due to increased costs
    associated with the Parisian Acquisition coupled with decreasing
    overall comparable store sales.
    Acquisition-related expenses decreased as a percentage of
    revenues by 0.26%, or $9.1 million, due to the fiscal year
    2007 Parisian Acquisition initial integration costs.
    Performance based compensation decreased as a percentage of
    revenues by 0.59%, or $21.5 million, due to lower than
    expected operating performance.  Gain on sale of property and equipment.
  Asset Impairment and Store Closing Costs.
  Interest Expense.
  Interest Income.
 18




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##### Table of Contents



Income tax expense.
  Comparison
    of Fiscal Years Ended February 3, 2007 and January 28,
    2006
  Revenues.
  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 19




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##### Table of Contents



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.
  Asset Impairment and Store Closing Costs.
  Pension Curtailment Charges.
  Interest Expense.
  Interest Income.
  Income tax expense.
  Seasonality
    and Quarterly Fluctuations
   20




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##### Table of Contents



2008


2007


2006First quarter


23.6
%


20.4
%


19.1
%Second quarter


23.0



19.9



20.3Third quarter


21.1



21.6



23.6Fourth quarter


32.3



38.1



37.0     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

$
692,780


$



$



$
350,000


$
342,780Estimated Interest Payments on Debt(a)


208,965



36,569



69,342



47,391



55,663Capital Lease Obligations


38,675



6,449



10,496



8,560



13,170Operating Leases(b)


612,035



71,383



130,347



103,477



306,828Purchase Obligations(c)


208,672



111,834



60,530



29,423



6,885Total Contractual Cash Obligations

$
1,761,127


$
226,235


$
270,715


$
538,851


$
725,326   22




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##### Table of Contents



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

$
11,909


$
11,909


$



$



$
Import Letters of Credit


47,656



47,656











Total Commercial Commitments

$
59,565


$
59,565


$



$



$
     (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 3.5% to 6.5% over the term of the variable rate debt
    agreements.(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.      Off-Balance
    Sheet Arrangements
    Recently
    Issued Accounting Standards
   23




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##### Table of Contents



instrument-by-instrument
    Impact of
    Inflation
    Critical
    Accounting Policies
          Inventory Valuation.
 24




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##### Table of Contents



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
    that the advertising expense is incurred.
    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
    SG&A expense in the period that the payroll cost is
    incurred.  Property and Equipment, net.
  Goodwill.
  Rent Expense.
  Useful Lives of Depreciable Assets.
  Recoverability of Long-Lived Assets.
 25




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##### Table of Contents



Store Closing Reserves. and/or
  Customer Loyalty Programs.
  Pension and Postretirement Obligations.
            Self Insurance Reserves.
 26




---



##### Table of Contents



Income Taxes.
      Intangible Assets and Liabilities.
  Derivative Financial Instruments.
  Stock Based Compensation.
  Finance Income.
 27




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk           28




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##### 



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




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                      30




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
 (Dollars
    in thousands, except per share amounts)
  Fiscal Year EndedFebruary 2,


February 3,


January 28,2008


2007


2006Revenues

$
3,824,803


$
3,684,769


$
2,968,777Cost of goods sold (including occupancy, distribution and buying
    expenses)


2,636,888



2,451,171



1,977,385Selling, general and administrative expenses


982,425



915,766



727,312Gain on sale of property and equipment


3,393



10,316



4,998Asset impairment and store closing costs


10,766



3,739



3,707Pension curtailment charges






690



7,459Hurricane losses










991Restructuring charges










(1,580
)Operating income


198,117



323,719



258,501Interest expense


(65,980
)


(59,260
)


(50,790
)Interest income


7,607



9,204



3,541Gain (loss) on sale of investments


(1,100
)


5,387



2,303Income before income taxes


138,644



279,050



213,555Income tax expense


42,904



97,200



76,500Income before cumulative effect of change in accounting principle


95,740



181,850



137,055Cumulative effect of change in accounting principle, net of
    income tax benefit of $98










(152
)Net income

$
95,740


$
181,850


$
136,903Basic and diluted net income per share

$
1.92


$
3.59


$
2.65Weighted average shares outstanding:Basic


49,749,689



50,594,523



51,717,325Diluted


49,784,635



50,659,077



51,717,325    31




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 (Dollars
    in thousands)
  February 2,


February 3,2008


2007ASSETSCurrent assets:Cash and cash equivalents

$
186,973


$
171,239Accounts receivable, net


65,987



61,434Merchandise inventory


932,777



931,870Property held for sale


11,036



Prepaid income taxes, expenses and other current assets


24,802



32,926Total current assets


1,221,575



1,197,469Investment securities


4,299



5,317Property and equipment, net


1,248,030



1,280,426Goodwill


326,930



310,126Deferred income taxes


5,196



Other assets


48,493



55,277Total assets

$
2,854,523


$
2,848,615LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
274,092


$
309,722Accrued liabilities


139,182



166,625Accrued income taxes


25,980



22,686Deferred income taxes


27,293



14,020Current installments of long-term debt and capital lease
    obligations


4,481



4,594Total current liabilities


471,028



517,647Deferred income taxes






13,835Long-term debt and capital lease obligations, excluding current
    installments


717,660



729,748Interest rate swap liability


8,282



1,435Deferred compensation and other noncurrent liabilities


268,827



259,928Total liabilities


1,465,797



1,522,593Stockholders equity:Preferred stock






Common stock, 400 million shares authorized and 49.6 and
    50.0 million shares issued and outstanding as of
    February 2, 2008 and February 3, 2007, respectively


496



500Paid-in capital


479,020



507,127Retained earnings


977,206



901,378Accumulated other comprehensive loss


(67,996
)


(82,983
)Total stockholders equity


1,388,726



1,326,022Total liabilities and stockholders equity

$
2,854,523


$
2,848,615    32




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES INSTOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
    (In thousands)
  AccumulatedCommon


Common








OtherStock


Stock


Paid-in


Retained


ComprehensiveShares


Amount


Capital


Earnings


Income (Loss)


TotalBalance at January 29, 2005


51,476


$
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 $5,278 income tax
    expense


















9,044



9,044Defined benefit expense, net of $3,123 income taxes


















(4,987
)


(4,987
)Total comprehensive income






















140,726Cash dividends














(16,270
)






(16,270
)Issuance of stock-based compensation










(1,198
)










(1,198
)Stock-based compensation expense










4,947











4,947Common stock issued


362



3



99











102Repurchase and retirement of common stock


(94
)


(1
)


(95
)










(96
)Balance at January 28, 2006


51,744



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 $866 income tax
    expense


















1,459



1,459Defined benefit expense, net of $1,203 income taxes


















2,564



2,564Total comprehensive income






















185,960Cash dividends














(18,202
)






(18,202
)Issuance of stock-based compensation










(1,482
)










(1,482
)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


363



3



608











611Repurchase and retirement of common stock


(2,116
)


(20
)


(39,109
)










(39,129
)Balance at February 3, 2007


49,991



500



507,127



901,378



(82,983
)


1,326,022Comprehensive income:Net income














95,740







95,740Unrealized loss on investments, net of $379 income tax benefit


















(639
)


(639
)Unrealized loss on interest rate swaps, net of $2,109 income tax
    benefit


















(3,553
)


(3,553
)Reclassification adjustment for interest rate swap dedesignation
    included in net income, net of $7 income tax benefit


















(51
)


(51
)Defined benefit expense, net of $11,416 income taxes


















19,230



19,230Total comprehensive income






















110,727Cash dividends














(20,097
)






(20,097
)Issuance of stock-based compensation










(2,322
)










(2,322
)Stock-based compensation expense










(1,939
)










(1,939
)Adoption of FIN 48 adjustment














185







185Common stock issued


359



4



372











376Repurchase and retirement of common stock


(781
)


(8
)


(24,218
)










(24,226
)Balance at February 2, 2008


49,569


$
496


$
479,020


$
977,206


$
(67,996
)

$
1,388,726    33




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Dollars
    in thousands)
  Fiscal Year EndedFebruary 2,


February 3,


January 28,2008


2007


2006Cash flows from operating activities:Net income

$
95,740


$
181,850


$
136,903Adjustments to reconcile net income to net cash provided by
    operating activities:Asset impairment and store closing costs


10,766



3,739



3,707Deferred income tax expense


11,357



19,423



19,444Depreciation and amortization expense


159,945



142,618



113,945Stock-based compensation expense


(1,939
)


9,434



4,947Restructuring charges










(1,580
)Pension curtailment






690



7,459Gain on sale of property and equipment


(1,297
)


(8,220
)


(4,998
)Amortization of deferred gain on sale and leaseback


(2,096
)


(2,096
)


(Gain) loss on sale of investments


1,100



(5,387
)


(2,303
)Other non-cash expense






980



990(Increase) decrease in:Accounts receivable, net


(4,233
)


(16,385
)


(37,149
)Merchandise inventory


(907
)


(7,525
)


(33,693
)Prepaid expenses and other assets


6,275



(8,187
)


(36,148
)Increase (decrease) in:Accounts payable and accrued liabilities


(80,034
)


(36,092
)


65,760Accrued income taxes


3,294



(13,407
)


571Deferred compensation and other liabilities


17,039



18,621



(8,897
)Net cash provided by operating activities


215,010



280,056



228,958Cash 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










321,289Purchases of investments










(50
)Proceeds from sales of investments






6,243



Purchases of property and equipment


(202,668
)


(191,128
)


(166,817
)Proceeds from sales of property and equipment


54,682



15,046



74,244Net cash used by investing activities


(147,986
)


(500,226
)


(392,304
)Cash flows from financing activities:Proceeds from issuance of long-term debt


125,355



359,510



828,781Principal payments on long-term debt and capital lease
    obligations


(130,000
)


(217,245
)


(553,922
)Payments for redemption of interest rate swaps






(910
)


(4,364
)Proceeds from termination of interest rate swap






50



Cash paid for withholding taxes in lieu of stock-based
    compensation shares


(5,260
)


(2,664
)


(2,609
)Stock compensation tax benefit


2,938



1,182



1,411Dividends paid


(20,097
)


(18,202
)


(16,270
)Repurchase and retirement of common stock


(24,226
)


(39,129
)


(96
)Net cash provided (used) by financing activities


(51,290
)


82,592



252,931Net increase (decrease) in cash and cash equivalents


15,734



(137,578
)


89,585Cash and cash equivalents at beginning of period


171,239



308,817



219,232Cash and cash equivalents at end of period

$
186,973


$
171,239


$
308,817Supplemental disclosures of cash flow information:Income taxes paid

$
27,675


$
92,295


$
57,611Supplemental schedule of noncash investing and financing
    activities:Decrease in property and equipment through adjustment of
    Parisian goodwill


(14,874
)






Decrease in property and equipment through assets held for sale


(11,036
)






Increase (decrease) in property and equipment through accrued
    purchases


10,332



(6,667
)


8,446Decrease in property and equipment through adjustment of
    Parisian capital lease obligation


(4,315
)






Increase (decrease) in long-term debt through other current
    assets


(3,220
)






12,653Increase in property and equipment through assumption of capital
    leases






10,686



2,111Increase in property and equipment through capitalization of
    construction period rent










1,061    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
    Fiscal Year

Ended


Weeks2008


February 2, 2008



522007


February 3, 2007



532006


January 28, 2006



522005


January 29, 2005



52     Use of
    Estimates
      Revenues
    Merchandise Areas

Fiscal Year 2008


Fiscal Year 2007


Fiscal Year 2006Womens


37
%


37
%


36
%Cosmetics, Shoes and Accessories


30
%


29
%


29
%Mens


17
%


17
%


17
%Home


10
%


11
%


12
%Childrens


6
%


6
%


6
%Total


100
%


100
%


100
%      35




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cost of
    Goods Sold
    Selling,
    General and Administrative Expenses
    Finance
    Income
  10-year
  Gift
    Cards
    Pre-Opening
    Costs
    Advertising
    Recoverability
    of Long-Lived Assets
   36




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Cash
    Equivalents
    Merchandise
    Inventory
    Property
    Held for Sale
    Investments
    Property
    and Equipment, Net
    Goodwill
   37




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Rent
    Expense
    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
    that the advertising expense is incurred.
    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
    SG&A expense in the period that the payroll cost is
    incurred.  Stock
    Based Compensation
    Self
    Insurance Reserves
   38




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Income
    Taxes
        Intangible
    Assets and Liabilities
    Derivative
    Financial Instruments
     39




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Recently
    Issued Accounting Standards
    instrument-by-instrument
   40




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (2)  Acquisitions
  Parisian
        Dollars in thousandsAccounts receivable, net

$
1,058Inventory


207,012Other current assets


4,498Property and equipment


179,417Goodwill


74,742Deferred income taxes


24,447Other assets


6,545Total assets acquired


497,719Current liabilities


159,487Long-term liabilities


23,528Total liabilities assumed


183,015Net assets acquired

$
314,704  41




---



##### Table of Contents



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


Lease Buyout


RelocationRetention Costs


Costs


CostsBalance at October 2, 2006

$
19,605


$
10,462


$
1,655Adjustments to goodwill


(1,426
)


(2,183
)


162Utilization/Payments


(436
)






(381
)Balance at February 3, 2007

$
17,743


$
8,279


$
1,436Adjustments to goodwill


(1,683
)


7,715



(39
)Utilization/Payments


(16,060
)


(9,487
)


(1,092
)Balance at February 2, 2008

$



$
6,507


$
305     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 10-year
  9-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 2,


February 3,2008


2007(Dollars in thousands)Balance, beginning of year

$
10,411


$
1,345Charges and adjustments


8,630



11,378Utilization/Payments


(11,558
)


(2,312
)Balance, end of year

$
7,483


$
10,411   (7)  Accumulated
    Other Comprehensive Loss
    February 2,


February 3,2008


2007(Dollars in thousands)Unrealized gains on investments, net of $684 and $1,063 income
    tax expense as of February 2, 2008 and February 3,
    2007, respectively

$
1,153


$
1,792Unrealized loss on interest rate swaps, net of $2,241 and $125
    income tax benefit as of February 2, 2008 and
    February 3, 2007, respectively


(3,775
)


(171
)Defined benefit plans, net of $38,807 and $50,223 income tax
    benefit as of February 2, 2008 and February 3, 2007,
    respectively


(65,374
)


(84,604
)Accumulated other comprehensive loss

$
(67,996
)

$
(82,983
)  44




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (8)  Accounts
    Receivable, Net
    February 2,


February 3,2008


2007(Dollars in thousands)Accounts receivable from vendors

$
46,278


$
36,904Credit card accounts receivable


15,730



16,946Other receivables


4,073



7,676Less allowance for doubtful accounts


(94
)


(92
)Accounts receivable, net

$
65,987


$
61,434     Fiscal Year EndedFebruary 2,


February 3,


January 28,2008


2007


2006(Dollars in thousands)Balance, beginning of year

$
92


$
82


$
9,986Charged to expense


4



24



9,350Net uncollectible balances written off


(2
)


(14
)


(11,349
)Reduction for sale of customer accounts receivable










(7,905
)Balance, end of year

$
94


$
92


$
82   (9)  Investment
    Securities
    February 2,


February 3,2008


2007(Dollars in thousands)Cost

$
2,462


$
2,462Gross unrealized gains


1,837



2,855Fair value of securities

$
4,299


$
5,317    45




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (10)  Property
    and Equipment, net
    Estimated


February 2,


February 3,Lives


2008


2007(In Years)


(Dollars in thousands)Land





$
62,661


$
69,010Buildings


31.5



1,022,518



1,020,759Furniture, fixtures and equipment


3-7



1,083,081



1,020,991Property under capital leases


5-20



56,980



61,050Construction in progress






50,187



40,1892,275,427



2,211,999Less accumulated depreciation and amortization






(1,027,397
)


(931,573
)Property and equipment, net





$
1,248,030


$
1,280,426     (11)  Sale
    of Properties
         46




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (12)  Amortizing
    Intangibles
    February 2,


February 3,2008


2007(Dollars in thousands)Amortizing intangible assets:Favorable lease intangibles

$
9,692


$
9,735Accumulated amortization  favorable lease intangibles


(1,281
)


(699
)Credit card and customer list intangibles


18,746



18,746Accumulated amortization  credit card and customer
    list intangibles


(6,146
)


(3,567
)Other intangibles


13,979



13,605Accumulated amortization  other intangibles


(9,482
)


(7,793
)Net amortizing intangible assets

$
25,508


$
30,027Amortizing intangible liabilities:Unfavorable lease intangibles

$
(33,606
)

$
(38,909
)Accumulated amortization  unfavorable lease
    intangibles


3,399



1,798Net amortizing intangible liabilities

$
(30,207
)

$
(37,111
)   (13)  Accrued
    Liabilities
    February 2,


February 3,2008


2007(Dollars in thousands)Salaries, wages and employee benefits

$
34,141


$
43,281Accrued capital expenditures


21,401



11,069Taxes, other than income


17,415



21,359Rent


8,312



10,115Sales returns allowance


7,412



7,328Interest


6,714



4,066Store closing reserves


6,504



9,574Self insurance reserves


6,135



8,278Advertising


3,245



3,755Severance


180



15,427Other


27,723



32,373Accrued Liabilities

$
139,182


$
166,625  47




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (14)  Borrowings
    February 2,


February 3,2008


2007(Dollars in thousands)Credit facility term loan

$
350,000


$
350,000Bond facility






125,000Senior notes


325,000



200,000Capital lease agreements through August 2020


29,361



38,342State bond facility


17,780



21,000722,141



734,342Less current installments


(4,481
)


(4,594
)Long-term debt and capital lease obligations, excluding current
    installments

$
717,660


$
729,748         20-year
   48




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (15)  Deferred
    Compensation and Other Noncurrent Liabilities
    February 2,


February 3,2008


2007(Dollars in thousands)Pension Liability

$
59,123


$
73,228Deferred Compensation Plans


31,818



29,197Deferred Gain on Sale/Leaseback


31,327



27,073Unfavorable Lease Liability


28,318



34,524Income Tax Reserves


27,421



9,977Post-Retirement Benefits


24,411



26,049Supplemental Executive Retirement Plans


23,028



21,340Deferred Rent


20,825



15,128Self-Insurance Reserves


10,097



12,118Developer Incentive Liability


7,853



6,430Other Noncurrent Liabilities


4,606



4,864Deferred Compensation and Other Noncurrent Liabilities

$
268,827


$
259,928   (16)  Leases
   49




---



##### Table of Contents



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

Capital


Operating(Dollars in thousands)2009

$
6,449


$
71,3832010


5,849



68,2562011


4,647



62,0912012


4,292



54,4672013


4,268



49,010After 2013


13,170



306,828Total


38,675



612,035Less sublease rental income






(22,367
)Net rentals


38,675


$
589,668Less imputed interest


(9,314
)Present value of minimum lease payments


29,361Less current portion


(4,481
)Noncurrent portion of the present value of minimum lease payments

$
24,880       Fiscal Year EndedFebruary 2,


February 3,


January 28,2008


2007


2006(Dollars in thousands)Buildings:Minimum rentals

$
75,098


$
57,967


$
40,972Contingent rentals


4,665



5,978



4,205Sublease rental income


(2,308
)


(655
)


(524
)Equipment


1,999



1,638



1,567Total net rental expense

$
79,454


$
64,928


$
46,220  50




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (17)  Income
    Taxes
    Fiscal Year EndedFebruary 2,


February 3,


January 28,2008


2007


2006(Dollars in thousands)Current:Federal

$
29,469


$
72,106


$
52,867State


2,078



5,671



4,18931,547



77,777



57,056Deferred:Federal


14,365



18,007



18,017State


(3,008
)


1,416



1,42711,357



19,423



19,444Income taxes

$
42,904


$
97,200


$
76,500     February 2,


February 3,


January 28,2008


2007


2006(Dollars in thousands)Income tax at the statutory federal rate

$
48,525


$
97,668


$
74,744State income taxes, net of federal income tax benefit


(839
)


4,607



3,011Increase in cash surrender value of officers life insurance


(5,201
)


(4,355
)


(3,396
)Other


419



(720
)


2,141Income taxes

$
42,904


$
97,200


$
76,500  51




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    February 2,


February 3,2008


2007(Dollars in thousands)Deferred tax assets:Prepaid pension costs

$
22,425


$
27,510Benefit plan costs


32,231



31,553Restructuring and other reserves


15,312



30,480Inventory capitalization


3,821



3,358Tax carryovers


6,788



2,951Interest rate swaps


3,219



1,822Prepaid rent


7,805



5,662Intangibles


13,187



14,447Other


8,825



6,244Gross deferred tax assets


113,613



124,027Less valuation allowance


(233
)


(233
)Net deferred tax assets


113,380



123,794Deferred tax liabilitiesProperty and equipment


62,691



84,782Intangibles


7,537



7,844Inventory


41,933



42,570Investment securities


1,649



2,049Goodwill


15,072



9,203Other


6,595



5,201Gross deferred tax liabilities


135,477



151,649Net deferred tax liabilities

$
22,097


$
27,855        52




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (18)  Uncertain
    Tax Positions
      February 2,2008Balance, beginning of year

$
23,754Additions for tax positions from prior years


6,826Reductions for tax positions from prior years


(4,408
)Additions for tax positions related to the current year


4,206Lapse in statute of limitations


Settlement payments


(6,647
)Balance, end of year

$
23,731   and/or
     53




---



##### Table of Contents



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


Old SERP Benefits


Postretirement BenefitsFebruary 2,


February 3,


February 2,


February 3,


February 2,


February 3,2008


2007


2008


2007


2008


2007(Dollars in thousands)Change in projected benefit obligation:Benefit obligation at beginning of year

$
410,106


$
382,333


$
12,322


$
11,546


$
28,836


$
28,308Service cost


3,509



3,585



186



133



167



158Interest cost


23,132



21,545



708



656



1,674



1,598Actuarial gains (losses)


(1,442
)


25,024



196



1,445



(709
)


1,531Benefits paid


(25,015
)


(22,381
)


(1,432
)


(1,458
)


(2,820
)


(2,759
)Benefit obligation at end of year


410,290



410,106



11,980



12,322



27,148



28,836Change in plan assets:Fair value of plan assets at beginning of year


336,878



318,560















Actual return on plan assets


39,304



40,699















Contributions to plan










1,432



1,458



2,820



2,759Benefits paid


(25,015
)


(22,381
)


(1,432
)


(1,458
)


(2,820
)


(2,759
)Fair value of plan assets at end of year


351,167



336,878















Funded Status


(59,123
)


(73,228
)


(11,980
)


(12,322
)


(27,148
)


(28,836
)Unrecognized net transition obligation


















1,309



1,570Unrecognized prior service costs


3,709



4,204



2



2







Unrecognized net loss


96,007



125,269



1,954



1,954



1,198



1,826Net prepaid (accrued)

$
40,593


$
56,245


$
(10,024
)

$
(10,366
)

$
(24,641
)

$
(25,440
)  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 2,


February 3,


February 2,


February 3,


February 2,


February 3,2008


2007


2008


2007


2008


2007(Dollars in thousands)Accrued liabilities

$



$



$
1,089


$
1,180


$
2,737


$
2,787Deferred income tax assets


37,144



48,229



729



729



932



1,262Deferred compensation and other noncurrent liabilities


59,123



73,228



10,891



11,141



24,411



26,049Accumulated other comprehensive loss


(62,572
)


(81,244
)


(1,227
)


(1,226
)


(1,575
)


(2,134
)   Pension Benefits


Old SERP Benefits


Postretirement BenefitsFebruary 2,


February 3,


February 2,


February 3,


February 2,


February 3,2008


2007


2008


2007


2008


2007(Dollars in thousands)Obligation and funded status at November 1, 2007 and 2006,
    respectively:Projected benefit obligation

$
410,290


$
410,106


$
11,980


$
12,322


$
27,148


$
28,836Accumulated benefit obligation


410,290



410,106



11,132



11,127



N/A



N/AFair value of plan assets


351,167



336,878















     Pension Benefits


Old SERP Benefits


Postretirement BenefitsFebruary 2,


February 3,


February 2,


February 3,


February 2,


February 3,2008


2007


2008


2007


2008


2007(Dollars in thousands)Net actuarial loss

$
(60,245
)

$
(78,606
)

$
(1,226
)

$
(1,225
)

$
(754
)

$
(1,148
)Prior service cost


(2,327
)


(2,638
)


(1
)


(1
)






Transition obligation


















(821
)


(986
)$
(62,572
)

$
(81,244
)

$
(1,227
)

$
(1,226
)

$
(1,575
)

$
(2,134
)     Pension Benefits


Old SERP Benefits


Postretirement BenefitsFebruary 2,


February 3,


February 2,


February 3,


February 2,


February 3,2008


2007


2008


2007


2008


2007(Dollars in thousands)Adjustment to minimum liability

$
11,015


$
(5,733
)

$
(123
)

$



$
291


$
Service cost






2,250















Interest cost






13,519















Expected return on plan assets






(15,012
)














Amortization of unrecognized items:Net transition obligation


















164



Prior service cost


311



















Net losses


7,346



7,540



122







104



$
18,672


$
2,564


$
(1
)

$



$
559


$
  55




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##### Table of Contents



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


Old SERP Plan


Postretirement PlanFebruary 2,


February 3,


January 28,


February 2,


February 3,


January 28,


February 2,


February 3,


January 28,2008


2007


2006


2008


2007


2006


2008


2007


2006Discount rates


6.125
%


5.750
%


5.750
%


6.125
%


5.750
%


5.750
%


6.125
%


5.750
%


5.750
%Rates of compensation increase


4.0



4.0



3.0



4.0



4.0



3.0



N/A



N/A



N/AReturn on plan assets


8.25



8.5



8.5



N/A



N/A



N/A



N/A



N/A



N/A             Target Allocation


Percentage of Plan Assets at Measurement DateJanuary 31,


February 2,


February 3,


January 28,2009


2008


2007


2006Equity Securities


65 - 70
%


65
%


68
%


69
%Fixed Income


30 - 35
%


34
%


31
%


30
%Cash


0
%


1
%


1
%


1
%Total


100
%


100
%


100
%


100
%  56




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##### Table of Contents



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

Pension Plan


Old SERP Plan


Postretirement Plan(Dollars in thousands)2009

$
24,523


$
1,089


$
2,8202010


24,677



1,058



2,7562011


24,922



1,027



2,6982012


25,348



998



2,6672013


25,936



969



2,6352014  2018


140,830



6,276



12,390       Pension Plan


Old SERP Plan


Postretirement PlanFiscal Year Ended


Fiscal Year Ended


Fiscal Year EndedFebruary 2,


February 3,


January 28,


February 2,


February 3,


January 28,


February 2,


February 3,


January 28,2008


2007


2006


2008


2007


2006


2008


2007


2006(Dollars in thousands)Service cost

$
3,509


$
3,585


$
5,077


$
186


$
133


$
124


$
167


$
158


$
156Interest cost


23,132



21,545



21,423



707



655



700



1,674



1,598



1,502Expected return on assets


(23,191
)


(23,924
)


(25,198
)






















Amortization of unrecognized items:Net transition obligation


























262



262



262Prior service cost


495



576



1,362



1



2



13











Net losses (gains)


11,707



12,016



10,939



195



42



47



165



(73
)


(425
)Annual benefit expense

$
15,652


$
13,798


$
13,603


$
1,089


$
832


$
884


$
2,268


$
1,945


$
1,495Curtailment (gain)/loss






690



7,459























Total expense

$
15,652


$
14,488


$
21,062


$
1,089


$
832


$
884


$
2,268


$
1,945


$
1,495     PostretirementPension Benefits


Old SERP Plan


Benefits(Dollars in thousands)Amortization of actuarial loss

$
9,837


$
217


$
20Amortization of prior service cost


495



1



Amortization of transition obligation










329Total recognized from other comprehensive income

$
10,332


$
218


$
349  57




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##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (20)
    Other
    Employee Benefits              (21)
    Stock-Based
    Compensation      Performance
    Based Stock Award Programs
   58




---



##### Table of Contents



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


Value per Share(In thousands)Nonvested at February 3, 2007


578


$
18.30Granted


256



30.81Changes in Performance Estimates


(769
)


22.49Vested


(52
)


17.14Forfeited


(13
)


23.78Nonvested at February 2, 2008






          59




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##### Table of Contents



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


Value per Share(In thousands)Nonvested at February 3, 2007


172


$
21.20Granted


38



27.15Changes in Performance Estimates


(43
)


27.02Vested


(162
)


21.02Forfeited


(5
)


26.40Nonvested at February 2, 2008






     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 2, 2008


February 3, 2007Carrying


Fair


Carrying


FairValue


Value


Value


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

$
692,780


$
682,714


$
696,000


$
690,416Interest rate swap liability


8,282



8,282



1,435



1,435Investment securities


4,299



4,299



5,317



5,317     (23)
    Purchase
    Obligations      (24)
    Earnings
    Per Share    February 2,


February 3,2008


2007Basic Shares


49,749,689



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


34,946



64,554Diluted Shares


49,784,635



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




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            (26)
    Related
    Party Transactions      (27)
    Change in
    Accounting Principle   62




---



##### Table of Contents



BELK,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (28)
    Selected
    Quarterly Financial Data (unaudited)    Three Months EndedFebruary 2,


November 3,


August 4,


May 5,2008


2007


2007


2007(In thousands, except per share amounts)Revenues

$
1,232,377


$
808,338


$
879,604


$
904,484Gross profit(1)


397,465



236,779



261,776



291,895Net income


85,669



(6,925
)


7,495



9,501Basic income per share


1.73



(0.14
)


0.15



0.19Diluted income per share


1.73



(0.14
)


0.15



0.19   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     (1)
    
    Gross profit represents revenues less cost of goods sold
    (including occupancy, distribution 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
            Changes
    in Internal Control over Financial Reporting
   64




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   
                   65




---



##### 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     66




---



##### 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).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). 67




---



##### Table of Contents



10
.4

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
.5

Note Purchase Agreement, dated as of August 31, 2007, by
    and among Belk, Inc. and certain subsidiaries of Belk, Inc., as
    obligors, and the purchasers referred to therein (incorporated
    by reference to Exhibit 10.1 of the Companys Current
    Report on
    Form 8-K,
    filed on September 7, 2007).10
.6

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
.7

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).10
.8

Note Purchase Agreement, dated as of July 12, 2005, by and
    among Belk, Inc. and certain subsidiaries of Belk, Inc., as
    obligors, and the purchasers referred to therein (incorporated
    by reference to the Companys Current Report on
    Form 8-K
    filed on July 18, 2005).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.  68




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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 Merchandising 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)  69