Neiman Marcus 2009 Annual Report Download - page 480

EXHIBIT 12.1
Neiman Marcus, Inc.
Computation of Ratio of Earnings to Fixed Charges
(Unaudited)
(Successor) (Predecessor)
(in thousands, except ratios)
Fiscal
year
ended
July 31,
2010
Fiscal
year
ended
August 1,
2009
Fiscal
year
ended
August 2,
2008
Fiscal
year
ended
July 28,
2007
Forty-three
weeks
ended
July 29,
2006(a)
Nine
weeks
ended
October 1,
2005(a)
Fixed Charges:
Interest on debt $ 219,400 $ 221,951 $ 233,557 $ 255,859 $ 214,777 $ 3,186
Amortization of debt discount and
expense 18,697 17,185 14,217 14,141 11,728 96
Interest element of rentals 25,146 24,750 27,291 24,915 19,404 3,729
Total fixed charges $ 263,243 $ 263,886 $ 275,065 $ 294,915 $ 245,909 $ 7,011
(Loss) earnings:
(Loss) earnings from continuing
operations before income taxes $ (5,313) $ (888,491) $ 226,629 $ 216,998 $ 41,043 $ 71,173
Add back:
Fixed charges 263,243 263,886 275,065 294,915 245,909 7,011
Amortization of capitalized
interest 1,112 1,058 1,018 495 776 105
Less:
Capitalized interest (286)(993)(3,036)(2,825)(3,446) (1,146)
Total earnings (loss) $ 258,756 $ (624,540) $ 499,676 $ 509,583 $ 284,282 $ 77,143
Ratio of earnings to fixed charges (b) (c) (d) 1.8 1.7 1.2 11.0
(a) All periods presented have been adjusted to exclude the operations of Kate Spade LLC.
(b) Interest associated with income tax liabilities is excluded from our calculation.
(c) For fiscal year 2010, the aggregate amount of fixed charges exceeded our earnings by approximately $4.5 million, which is
the amount of additional earnings that would have been required to achieve a ratio of earnings to fixed charges of 1.0x for such period.
(d) For fiscal year 2009, the aggregate amount of fixed charges exceeded our earnings by approximately $888.4 million, which
is the amount of additional earnings that would have been required to achieve a ratio of earnings to fixed charges of 1.0x for such
period. The deficiency of the ratio of earnings to fixed charges for fiscal year 2009 is primarily due to the pretax impairment charges
related to 1) $329.7 million for the writedown to fair value of goodwill, 2) $343.2 million for the writedown to fair value of the net
carrying value of tradenames and 3) $30.3 million for the writedown to fair value of the net carrying value of certain long-lived assets.