Neiman Marcus 2009 Annual Report Download - page 6

Table of Contents
to the fulfillment of goods purchased on the designer website.
Direct Marketing generated 18.5% of our total revenues in fiscal year 2010, 17.9% in fiscal year 2009 and 16.2% in fiscal
year 2008. Over one million customers made a purchase through one of our websites or catalogs in fiscal year 2010. In recent years,
internet revenues have increased as a percentage of Direct Marketing revenues. As a percentage of total revenues of Direct Marketing,
internet revenues were 84.2% in fiscal year 2010, 79.5% in fiscal year 2009 and 75.5% in fiscal year 2008. Our catalog business
circulated approximately 48 million catalogs in fiscal year 2010, a decrease of over 25% from the prior year. With the growth of
internet revenues, we have reduced catalog circulation in recent years and would expect flat to declining catalog circulation in the
foreseeable future. We regularly send e-mails to approximately 4.7 million e-mail addresses, alerting our customers to our newest
merchandise and the latest fashion trends.
For more information about our reportable segments, see Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 16 in the Notes to Consolidated Financial Statements in Item 15.
Our fiscal year ends on the Saturday closest to July 31. Like many other retailers, we follow a 4-5-4 reporting calendar,
which resulted in an extra week in fiscal year 2008 (the fifty-third week). All references to fiscal year 2010 relate to the fifty-two
weeks ended July 31, 2010, all references to fiscal year 2009 relate to the fifty-two weeks ended August 1, 2009 and all references to
fiscal year 2008 relate to the fifty-three weeks ended August 2, 2008. References to fiscal years 2011 and years thereafter relate to our
fiscal years for such periods.
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and related
amendments, available free of charge through our website at www.neimanmarcusgroup.com as soon as reasonably practicable after
we electronically file such material with (or furnish such material to) the Securities and Exchange Commission. The information
contained on our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered to be
part of this Annual Report on Form 10-K.
The Acquisition
On April 22, 2005, Neiman Marcus, Inc. (the Company), formerly Newton Acquisition, Inc., and its wholly-owned
subsidiary, Newton Acquisition Merger Sub, Inc. (Merger Sub), were formed and incorporated in the state of Delaware. On April 29,
2005, the Company received subscriptions for 900 shares of its common stock from Newton Holding, LLC (Holding) in exchange for
a capital contribution of $900 and Merger Sub issued 900 shares of its common stock to the Company in exchange for a capital
contribution of $900. Holding, the Company and Merger Sub were formed by investment funds affiliated with TPG Capital (formerly
Texas Pacific Group) and Warburg Pincus LLC (collectively, the Sponsors) for the purpose of acquiring The Neiman Marcus
Group, Inc. (NMG).
In connection with the acquisition of NMG, Holding made an aggregate cash equity contribution of $1,420.0 million and a
non-cash equity contribution of $25.0 million to the Company in exchange for the Company issuing 999,100 shares of its common
stock to Holding. In addition, certain members of executive management of the Company made cash equity contributions aggregating
$7.7 million and non-cash equity contributions, consisting of shares of common stock and common stock options in NMG,
aggregating $17.9 million in exchange for 12,264 shares of common stock in the Company.
The acquisition of NMG was completed on October 6, 2005 through the merger of Merger Sub with and into NMG, with
NMG being the surviving entity (the Acquisition). Subsequent to the Acquisition, NMG is a subsidiary of the Company, which is
controlled by Holding. In connection with the Acquisition, NMG incurred significant indebtedness and became highly leveraged. See
Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital
Resources." All references to "we" and "our" relate to the Company for periods subsequent to the Acquisition and to NMG for
periods prior to the Acquisition.
Prior to the Acquisition, the Company had no independent assets or operations. After the Acquisition, the Company
represents the successor to NMG since the Company's sole asset is its investment in NMG and its operations consist solely of the
operating activities of NMG as well as costs incurred by the Company related to its investment in NMG. For periods prior to the
Acquisition, NMG is deemed to be the predecessor to the Company. As a result, for periods prior to the Acquisition, the financial
statements of the Company consist of the financial statements of NMG for such periods.
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