Neiman Marcus 2003 Annual Report Download - page 55

NOTE 4. Accrued Liabilities
The significant components of accrued liabilities are as follows:
(in thousands)
July 31,
2004
August 2,
2003
Accrued salaries and related liabilities $ 63,452 $ 43,704
Amounts due customers 40,318 36,770
Self-insurance reserves 39,067 34,897
Sales returns 31,487 26,674
Loyalty program liability 14,283 11,514
Sales tax 12,712 21,341
Income taxes payable 12,519 28,994
Other 72,995 62,365
Total $ 286,833 $ 266,259
NOTE 5. Long-term Debt
The significant components of the Company's long-term debt are as follows:
(in thousands)
Interest
Rate
July 31,
2004
August 2,
2003
Senior unsecured notes 6.65% $ 124,941 $ 124,926
Senior unsecured debentures 7.125% 124,816 124,807
Credit Card Facility LIBOR + 0.27% 225,000 —
474,757 249,733
Less: current portion 150,000 —
Long-term debt $ 324,757 $ 249,733
Effective June 9, 2004, the Company entered into a five-year unsecured revolving credit agreement (the Credit Agreement) with a
group of seventeen banks that provides for borrowings of up to $350 million. The Company has two types of borrowing options under
the Credit Agreement, a "committed" borrowing and a "competitive bid" borrowing. The rate of interest payable under a "committed"
borrowing is based on one of two pricing options selected by the Company, the level of outstanding borrowings and the rating of the
Company's senior unsecured long-term debt by Moody's and Standard & Poor's. The pricing options available to the Company under
a "committed" borrowing are based on either LIBOR plus 0.40 percent to 1.50 percent or a "base" rate. The base rate is determined
based on the higher of the Prime Rate or the Federal Funds Rate plus 0.50 percent and a "base" rate margin of up to 0.50 percent. The
rate of interest payable under a "competitive bid" borrowing is based on one of two pricing options selected by the Company. The
pricing options are based on either LIBOR plus a competitive bid margin or an absolute rate, both determined in the competitive
auction process. Changes in the ratings of the senior unsecured long-term debt do not represent an event of default, accelerate
repayment of any outstanding borrowings or alter any other terms of the Credit Agreement. The Credit Agreement contains covenants
that require the Company to maintain certain leverage and fixed charge ratios. The Credit Agreement replaces a previous $300
million unsecured credit facility. At July 31, 2004, the Company had no borrowings outstanding under the Credit Agreement.
In May 1998, the Company issued $250 million of unsecured senior notes and debentures to the public. This debt is comprised of
$125 million of 6.65 percent senior notes, due 2008 and $125 million of 7.125 percent senior debentures, due 2028. Interest on the
securities is payable semiannually. Based upon quoted prices, the fair value of the Company's senior notes and debentures aggregated
$268.3 million as of July 31, 2004 and $265.0 million as of August 2, 2003.
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