Neiman Marcus 2006 Annual Report Download - page 127
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Maturities of Long-Term Debt. At July 28, 2007, annual maturities of long-term debt during the next five fiscal years and
thereafter are as follows (in millions):
2008 $ —
2009 —
2010 —
2011 —
2012 —
Thereafter 2,945.9
The above table does not reflect future excess cash flow prepayments, if any, that may be required under the Senior Secured
Term Loan Facility.
Interest Rate Swaps. The Company uses derivative financial instruments to help manage its interest rate risk. Effective
December 6, 2005, NMG entered into floating to fixed interest rate swap agreements for an aggregate notional amount of
$1,000.0 million to limit its exposure to interest rate increases related to a portion of its floating rate indebtedness. The interest rate swap
agreements terminate after five years. At July 28, 2007, the fair value of NMG's interest rate swap agreements was a gain of
approximately $8.2 million, which amount is included in other assets.
As of the effective date, NMG designated the interest rate swaps as cash flow hedges. As a result, changes in the fair value of
NMG's swaps are recorded as a component of other comprehensive income. At July 28, 2007, we have $3.7 million of unrecognized gains, net of
tax, on our interest rate swap agreements included in other comprehensive income.
As a result of the swap agreements, NMG's effective fixed interest rates as to the $1,000.0 million in floating rate indebtedness
will currently range from 6.482% to 6.733% per quarter through 2010 and result in an average fixed rate of 6.577%.
Interest expense. The significant components of interest expense are as follows:
(Successor) (Predecessor)
(in thousands)
Fiscal year
ended
July 28,
2007
Forty-three
weeks ended
July 29,
2006
Nine weeks
ended
October 1,
2005
Fiscal year
ended
July 30,
2005
Asset-Based Revolving Credit Facility $ — $ 1,332 $ — $ —
Senior Secured Term Loan Facility 128,380 111,662 — —
2028 Debentures 8,915 7,266 1,542 8,904
Senior Notes 63,000 51,421 — —
Senior Subordinated Notes 51,875 42,339 — —
Credit Card Facility — — — 5,526
2008 Notes — 638 1,439 8,308
Amortization of debt issue costs 14,141 11,728 96 831
Other 3,689 111 205 598
Total interest expense 270,000 226,497 3,282 24,167
Less:
Interest income 7,370 5,386 3,046 6,556
Capitalized interest 2,825 3,446 1,146 5,350
Interest expense (income), net $ 259,805 $ 217,665 $ (910)$ 12,261
F-31