Neiman Marcus 2010 Annual Report Download - page 121

Table of Contents
At July 30, 2011 the gross amount of unrecognized tax benefits was $4.1 million, all of which would impact our effective tax
rate, if recognized. We classify interest and penalties as a component of income tax expense (benefit) and our liability for accrued
interest and penalties was $6.2 million at July 30, 2011 and $6.3 million at July 30, 2010. A reconciliation of the beginning and
ending amounts of unrecognized tax benefits is as follows:
(in thousands)
July 30,
2011
July 31,
2010
Balance at beginning of fiscal year $ 6,401 $ 6,605
Gross amount of decreases for prior year tax position (373) —
Gross amount of increases for current year tax positions 306 654
Gross amount of decreases for settlements with tax authorities (2,209) (406)
Gross amount of decreases for expiration of statutes of limitation — (452)
Balance at ending of fiscal year $ 4,125 $ 6,401
We file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. During fiscal year 2011,
the Internal Revenue Service (IRS) began examination of our fiscal years 2008 and 2009 federal income tax returns. With respect to
state and local jurisdictions, with limited exceptions, the Company and its subsidiaries are no longer subject to income tax audits for
fiscal years before 2006. We believe our recorded tax liabilities as of July 30, 2011 are sufficient to cover any potential assessments
to be made by the IRS or other taxing authorities upon the completion of their examinations and we will continue to review our
recorded tax liabilities for potential audit assessments based upon subsequent events, new information and future circumstances. We
believe it is reasonably possible that additional adjustments in the amounts of our unrecognized tax benefits could occur within the
next twelve months as a result of settlements with tax authorities or expiration of statutes of limitation. At this time, we do not believe
such adjustments will have a material impact on our consolidated financial statements.
NOTE 9. EMPLOYEE BENEFIT PLANS
Description of Benefit Plans. We currently maintain defined contribution plans consisting of a retirement savings plan
(RSP) and a defined contribution supplemental executive retirement plan (Defined Contribution SERP Plan). Prior to December 31,
2010, we maintained a 401(k) plan. In connection with efforts to restructure our long-term benefits program, previous balances in the
401(k) plan have been transferred to the RSP. As of January 1, 2011, employees make contributions to the RSP and we match an
employee's contribution up to a maximum of 6% of the employee's compensation subject to statutory limitations for a potential
maximum match of 75% of employee contributions.
In addition, we sponsor a defined benefit pension plan (Pension Plan) and an unfunded supplemental executive retirement
plan (SERP Plan) which provides certain employees additional pension benefits. Benefits under both plans are based on the
employees' years of service and compensation over defined periods of employment. As of the third quarter of fiscal year 2010,
benefits offered to all participants in our Pension Plan and SERP Plan have been frozen. Retirees and active employees hired prior to
March 1, 1989 are eligible for certain limited postretirement health care benefits (Postretirement Plan) if they meet certain service and
minimum age requirements. We also sponsor an unfunded key employee deferred compensation plan, which provides certain
employees with additional benefits. Our aggregate expense related to these plans was approximately $28.4 million in fiscal year 2011,
$19.9 million in fiscal year 2010 and $20.0 million in fiscal year 2009.
Obligations for our employee benefit plans, included in other long-term liabilities, are as follows:
(in thousands)
July 30,
2011
July 31,
2010
Pension Plan $ 98,683 $ 161,760
SERP Plan 99,942 96,406
Postretirement Plan 15,651 17,914
214,276 276,080
Less: current portion (6,035)(5,574)
Long-term portion of benefit obligations $ 208,241 $ 270,506
As of July 30, 2011, we have $69.2 million (net of taxes of $45.0 million) of adjustments to such obligations recorded as
increases to accumulated other comprehensive loss.
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