Neiman Marcus 2008 Annual Report Download - page 117

Table of Contents
A summary of the recorded amounts related to our interest rate swaps reflected in our consolidated statements of operations
are as follows:
Fiscal year ended
(in thousands)
August 1,
2009
August 2,
2008
July 28,
2007
Realized hedging losses (gains) — included in
interest expense, net $ 29,212 $ 3,841 $ (6,040)
Ineffective hedging losses — included in interest
expense, net $ 669 $ 479 $ 696
The amount of losses recorded in other comprehensive loss at August 1, 2009 that is expected to be reclassified into interest
expense in the next twelve months, if interest rates remain unchanged, is approximately $41.4 million.
NOTE 11. OTHER INCOME
In the first quarter of fiscal year 2008, we recorded a pension curtailment gain of $32.5 million, or 0.7% of revenues, as a
result of our decision to freeze certain Pension and SERP benefits as of December 31, 2007.
In the first quarter of fiscal year 2007, we received consideration aggregating $4.2 million, or 0.1% of revenues, in
connection with the merger of Wedding Channel.com, in which we held a minority interest, and The Knot. We accounted for our
investment in Wedding Channel.com under the cost method. In prior years, we had previously reduced our carrying value of this
investment to zero.
In the fourth quarter of fiscal year 2007, we recorded $6.0 million of other income for the breakage on gift cards we
previously sold and issued. The income was recognized based upon our analysis of the aging of these gift cards, our determination
that the likelihood of future redemption was remote and our determination that such balances were not subject to escheatment laws
applicable to our operations. Prior to the fourth quarter of fiscal year 2007, we had not recognized breakage on gift cards pending,
among other things, our final determination of the applicable escheatment laws applicable to our operations.
NOTE 12. STOCK-BASED COMPENSATION
The Company has approved equity-based management arrangements which authorize equity awards to be granted to certain
management employees for up to 87,992.0 shares of the common stock of the Company. Options generally vest over four to five
years and expire 10 years from the date of grant.
A summary of the status of our stock option plan is as follows:
Fiscal year ended
August 1, 2009 August 2, 2008 July 28, 2007
Shares
Weighted
Average
Exercise
Price Shares
Weighted
Average
Exercise
Price Shares
Weighted
Average
Exercise
Price
Outstanding at beginning of fiscal
year 83,146.6 $ 1,507 83,634.3 $ 1,430 81,716.3 $ 1,416
Granted — — 260.0 2,684 2,496.0 1,942
Exercised (854.5 ) 1,684 — — (578.0 ) 1,590
Forfeited (2,893.1 )1,617 (747.7 )1,597 — —
Outstanding at end of fiscal year 79,399.0 $ 1,585 83,146.6 $ 1,507 83,634.3 $ 1,430
Options exercisable at end of fiscal
year 60,856.7 $ 1,542 46,684.4 $ 1,415 29,764.1 $ 1,233
The exercise price of approximately 50% of our options escalate at a 10% compound rate per year until the earlier to occur of
(i) exercise, (ii) the fifth anniversary of the date of grant or (iii) the occurrence of a change in control. However, in the
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