Neiman Marcus 2013 Annual Report Download - page 47

Table of Contents
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Our cash requirements consist principally of:
• the funding of our merchandise purchases;
• debt service requirements;
• capital expenditures for expansion and growth strategies, including new store construction, store renovations and upgrades of our management
information systems;
• income tax payments; and
• obligations related to our defined benefit pension plan (Pension Plan).
Our primary sources of short-term liquidity are comprised of cash on hand, availability under the Asset-Based Revolving Credit Facility and vendor
payment terms. The amounts of cash on hand and borrowings under the Asset-Based Revolving Credit Facility are influenced by a number of factors,
including revenues, working capital levels, vendor terms, the level of capital expenditures, cash requirements related to financing instruments and debt
service obligations, Pension Plan funding obligations and tax payment obligations, among others.
Our working capital requirements fluctuate during the fiscal year, increasing substantially during the first and second quarters of each fiscal year as a
result of higher seasonal levels of inventories. We have typically financed our cash requirements with available cash balances, cash flows from operations
and, if necessary, with cash provided from borrowings under our Asset-Based Revolving Credit Facility. We have no outstanding borrowings under our Asset-
Based Revolving Credit Facility at August 2, 2014.
We believe that operating cash flows, cash balances, available vendor payment terms and amounts available pursuant to the Asset-Based Revolving
Credit Facility will be sufficient to fund our cash requirements through the end of fiscal year 2015, including merchandise purchases, anticipated capital
expenditure requirements, debt service requirements, income tax payments and obligations related to our Pension Plan.
Cash and cash equivalents were $196.5 million at August 2, 2014 compared to $136.7 million at August 3, 2013, an increase of $59.8 million. Net
cash provided by our operating activities was $295.7 million in fiscal year 2014 compared to $349.4 million in fiscal year 2013. The decrease in cash
provided by our operating earnings is primarily attributable to costs incurred in connection with the Acquisition partially offset by higher levels of cash
generated from operating activities. In connection with the Acquisition, we incurred cash payments of approximately $147.3 million to fund costs and
expenses incurred as a result of the Acquisition.
Net cash used for investing activities was $3,527.6 million in fiscal year 2014 compared to $156.5 million in fiscal year 2013. The increase in net
cash used for investing activities was primarily due to the Acquisition. We incurred capital expenditures in both fiscal years 2014 and 2013 related to
remodels of our Michigan Avenue and Oak Brook Neiman Marcus stores and information technology enhancements. Currently, we project gross capital
expenditures for fiscal year 2015 to be approximately $310 to $330 million. Net of developer contributions, capital expenditures for fiscal year 2015 are
projected to be approximately $275 to $295 million.
Net cash provided by financing activities was $3,291.7 million in fiscal year 2014 compared to net cash used of $105.4 million in fiscal year 2013.
Proceeds from debt incurred in connection with the Acquisition, net of debt issuance costs, aggregated $4,437.6 million and cash equity contributions
received in connection with the Acquisition aggregated $1,556.5 million. Also in connection with the Acquisition, we repaid outstanding borrowings under
our Former Asset-Based Revolving Credit Facility and Former Senior Secured Term Loan Facility. Net cash used for financing activities in fiscal year 2013
reflects the impact of the refinancing transactions executed during the second quarter of fiscal year 2013 related to our former credit facilities.
Subject to applicable restrictions in our credit agreements and indentures, we or our affiliates, at any time and from time to time, may purchase,
redeem or otherwise retire our outstanding debt securities, including through open market or privately negotiated transactions with third parties or pursuant
to one or more tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we, or any of our affiliates,
may determine.
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