Neiman Marcus 2005 Annual Report Download - page 51

Employee Considerations
• changes in key management personnel and our ability to retain key management personnel;
• changes in our relationships with certain of our key sales associates and our ability to retain our key sales associates;
Legal and Regulatory Issues
• changes in government or regulatory requirements increasing our costs of operations;
• litigation that may have an adverse effect on our financial results or reputation;
Leverage Considerations
• the effects of incurring a substantial amount of indebtedness under our senior secured credit facilities and our senior notes
and senior subordinated notes;
• the effects upon us of complying with the covenants contained in our senior secured credit facilities and the indentures
governing our senior notes and senior subordinated notes; and
• restrictions the terms and conditions of the indebtedness under our senior secured credit facilities may place on our ability to
respond to changes in our business or to take certain actions.
Other Factors
• impact of funding requirements related to our noncontributory defined benefit pension plan;
• the design and implementation of new information systems as well as enhancements of existing systems; and
• other risks, uncertainties and factors set forth in this Annual Report on Form 10-K, including those set forth in Item 1A,
"Risk Factors".
The foregoing factors are not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that could
impact our business. Except to the extent required by law, we undertake no obligation to update or revise (publicly or otherwise) any
forward-looking statements to reflect subsequent events, new information or future circumstances.
Critical Accounting Policies
Our accounting policies are more fully described in Note 1 of the notes to our audited consolidated financial statements
appearing elsewhere in this prospectus. As disclosed in Note 1 of the notes to our audited consolidated financial statements, the
preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and
assumptions about future events. These estimates and assumptions affect the amounts of assets, liabilities, revenues and expenses and the
disclosure of gain and loss contingencies at the date of our audited consolidated financial statements appearing elsewhere in this
prospectus.
While we believe that our past estimates and assumptions have been materially accurate, the amounts we have currently
estimated are subject to change if different assumptions as to the outcome of future events were made. We evaluate our estimates and
judgments on an ongoing basis and predicate those estimates and judgments on historical experience and on various other factors that we
believe to be reasonable under the circumstances. We make adjustments to our assumptions and judgments when facts and circumstances
dictate. Since future events and their effects cannot be determined with absolute certainty, actual results may differ from the estimates
used in preparing the accompanying audited consolidated financial statements.
We believe the following critical accounting policies encompass the more significant judgments and estimates used in the
preparation of our audited consolidated financial statements.
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