Neiman Marcus 2010 Annual Report Download - page 180

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EXHIBIT 12.1
Neiman Marcus, Inc.
Computation of Ratio of Earnings to Fixed Charges
(Unaudited)
Fiscal year ended
(in thousands, except ratios)
July 30,
2011
July 31,
2010
August 1,
2009
August 2,
2008
July 28,
2007
Fixed Charges:
Interest on debt $ 266,816 $ 219,400 $ 221,951 $ 233,557 $ 255,859
Amortization of debt discount and expense 14,661 18,697 17,185 14,217 14,141
Interest element of rentals 26,301 25,146 24,750 27,291 24,915
Total fixed charges $ 307,778 $ 263,243 $ 263,886 $ 275,065 $ 294,915
Earnings (loss):
Earnings (loss) from continuing operations
before income taxes $ 49,264 $ (5,313) $ (888,491) $ 226,629 $ 216,998
Add back:
Fixed charges 307,778 263,243 263,886 275,065 294,915
Amortization of capitalized interest 1,115 1,112 1,058 1,018 495
Less:
Capitalized interest (535)(286)(993)(3,036)(2,825)
Total earnings (loss) $ 357,622 $ 258,756 $ (624,540) $ 499,676 $ 509,583
Ratio of earnings to fixed charges (a) 1.2
(b) (c) 1.8 1.7
(a) Interest associated with income tax liabilities is excluded from our calculation.
(b) 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.
(c) 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.