Neiman Marcus 2005 Annual Report Download - page 96

The Acquisition occurred simultaneously with:
• the closing of the financing transactions and equity investments described above;
• the call for redemption of, the deposit into a segregated account of the estimated amount of the redemption payment related
to, and the ratable provision of security pursuant to the terms thereof, for our 6.65% senior notes due 2008 (2008 Notes);
• the ratable provision of security to our 7.125% senior debentures due 2028 (2028 Debentures) pursuant to the terms thereof;
and
• the termination of a previous $350 million unsecured revolving credit agreement (Credit Agreement).
We refer to the above transactions, the Acquisition and our payment of any costs related to these transactions collectively herein
as the "Transactions."
Transaction and Other Costs. During the period from July 30, 2005 to October 1, 2005, the Predecessor expensed
$23.5 million in connection with the Transactions. These costs consisted primarily of $4.5 million of accounting, investment banking,
legal and other costs associated with the Transactions and a $19.0 million non-cash charge for stock compensation resulting from the
accelerated vesting of Predecessor stock options and restricted stock in connection with the Acquisition.
NOTE 3. PURCHASE ACCOUNTING
We have accounted for the Acquisition in accordance with the provisions of SFAS No. 141, whereby the purchase price paid to
effect the Acquisition is allocated to state the acquired assets and liabilities at fair value. The Acquisition and the allocation of the
purchase price have been recorded as of October 1, 2005, the beginning of our October accounting period. The purchase price was
approximately $5,461.7 million. The sources and uses of funds in connection with the Transactions and the redemption of our 2008 Notes
are summarized below (in millions):
Sources
Asset-Based Revolving Credit Facility $ 150.0
Secured Term Loan Facility 1,975.0
Senior Notes 700.0
Senior Subordinated Notes 500.0
Cash on hand 666.1
Equity contribution—cash 1,427.7
Equity contribution—non-cash 42.9
Total sources $ 5,461.7
Uses
Consideration paid to stockholders (including non-cash management rollover of $17.9 million) $ 5,110.8
Transaction costs (including non-cash items of $18.8 million) 82.3
Redemption of existing 2008 Notes 134.7
Debt issuance costs (including non-cash items of $6.3 million) 109.2
Payment of deferred compensation obligations and other accrued liabilities 24.7
Total uses $ 5,461.7
In connection with the purchase price allocation, we have made estimates of the fair values of our long-lived and intangible
assets based upon assumptions related to future cash flows, discount rates and asset lives utilizing currently available information. As of
July 29, 2006, we have recorded purchase accounting adjustments to increase the carrying value of our property and equipment and
inventory, to establish intangible assets for our tradenames, customer lists and favorable lease commitments and to revalue our long-term
benefit plan obligations, among other things.
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