Neiman Marcus 2003 Annual Report Download - page 56

At July 31, 2004, the Company has $225.0 million borrowings under its revolving Credit Card Facility. Repayment of this obligation
begins in April 2005 in six monthly installments of $37.5 million. Therefore, $150.0 million of this obligation is included in current
liabilities and $75.0 million is included in long-term liabilities as of July 31, 2004 in the accompanying consolidated balance sheets.
Outstanding borrowings under the Credit Card Facility bear interest at a contractually-defined rate of one-month LIBOR plus 0.27
percent (1.65 percent at July 31, 2004) and are payable monthly to the holders of the Class A Certificates. The interest distributions to
the Class A Certificate holders are payable from the finance charge income generated by the credit card receivables. For the periods
prior to December 2003 when the borrowings under the Credit Card Facility qualified for Off-Balance Sheet Accounting, the interest
distributions to the Class A Certificate holders were charged to selling, general and administrative expenses and aggregated $1.8
million in 2004, $4.2 million in 2003 and $5.9 million in 2002.
The significant components of interest expense are as follows:
Years Ended
(in thousands)
July 31,
2004
August 2,
2003
August 3,
2002
Credit Agreement $ 422 $ 430 $ 1,532
Senior notes 8,308 8,308 8,468
Senior debentures 8,904 8,904 9,075
Credit Card Facility 1,778 — —
Debt issue cost amortization and other 1,679 1,298 2,008
Total interest expense $ 21,091 $ 18,940 $ 21,083
Less:
Interest income $ 2,132 $ 1,245 $ 2,561
Capitalized interest 3,036 1,425 3,116
Interest expense, net $ 15,923 $ 16,270 $ 15,406
NOTE 6. Common Shareholders' Equity
Authorized Capital. On September 15, 1999, the shareholders of the Company approved a proposal to amend the Company's Restated
Certificate of Incorporation to increase the Company's authorized capital to 250 million shares of common stock consisting of 100
million shares of Class A Common Stock, 100 million shares of Class B Common Stock, 50 million shares of a new Class C Common
Stock (having one-tenth [1/10] of one vote per share) and 50 million shares of preferred stock.
Common Stock. Common stock is entitled to dividends if and when declared by the Board of Directors and each share of Class A and
Class B Common Stock outstanding carries one vote. Holders of Class A Common Stock have the right to elect up to 18 percent of
the Board of Directors and holders of Class B Common Stock have the right to elect at least 82 percent of the Board of Directors. The
Class A Common Stock and Class B Common Stock are identical in all other respects. Holders of common stock have no cumulative
voting, conversion, redemption or preemptive rights.
Cash dividend program. In the second quarter of 2004, the Company's Board of Directors initiated a quarterly cash dividend of $0.13
per share. The Company declared dividends on January 30, 2004, April 30, 2004 and July 30, 2004 aggregating $18.9 million, of
which dividends payable of $6.3 million were included in accrued liabilities in the accompanying consolidated balance sheet as of July
31, 2004 and were paid in August 2004.
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