Neiman Marcus 2006 Annual Report Download - page 48

As a result of the swap agreements, NMG's effective fixed interest rates as to the $1,000.0 million in floating rate indebtedness
will currently range from 6.482% to 6.733% per quarter through 2010 and result in an average fixed rate of 6.577%.
Contractual Obligations and Commitments
The following table summarizes our estimated significant contractual cash obligations at July 28, 2007:
Payments Due By Period
(in thousands) Total
Fiscal Year
2008
Fiscal
Years
2009-2010
Fiscal
Years
2011-2012
Fiscal Year
2013 and
Beyond
Contractual obligations:
Senior Secured Term Loan Facility (1) $ 1,625,000 $ — $ — $ — $ 1,625,000
Senior Notes 700,000 — — — 700,000
Senior Subordinated Notes 500,000 — — — 500,000
2028 Debentures 125,000 — — — 125,000
Interest requirements (2) 1,780,900 235,200 471,800 484,600 589,300
Lease obligations 951,300 54,000 101,900 96,500 698,900
Minimum pension funding obligation (3) — — — — —
Other long-term liabilities (4) 62,800 4,100 9,300 11,100 38,300
Construction commitments (5) 261,000 118,300 92,100 50,600 —
Inventory purchase commitments (6) 1,068,500 1,068,500 — — —
$ 7,074,500 $ 1,480,100 $ 675,100 $ 642,800 $ 4,276,500
(1) We voluntarily repaid $100.0 million of term loans under this facility in the second quarter of fiscal year 2006 and $250.0
million in fiscal year 2007. The above table does not reflect future excess cash flow prepayments, if any, that may be required
under the term loan facility.
(2) The cash obligations for interest requirements reflect 1) interest requirements on our fixed-rate debt obligations at their
contractual rates, 2) interest requirements on floating rate debt obligations not subject to interest rate swaps at rates in effect at
July 28, 2007 and 3) interest requirements on floating rate debt obligations subject to interest rate swaps at the fixed rates
provided through the swap agreements. A 1% increase in the floating rates related to floating rate debt outstanding at July 28,
2007 not subject to interest rate swaps would increase annual interest rate requirements by approximately $6.3 million.
(3) Minimum pension funding requirements are not included above as such amounts are not currently quantifiable for all periods
presented. At August 1, 2007 (the most recent measurement date), our actuarially calculated projected benefit obligation for our
Pension Plan was $380.2 million and the fair value of the assets was $324.6 million. Our policy is to fund the Pension Plan at or
above the minimum amount required by law. We did not make any contributions to the Pension Plan in fiscal year 2007 or fiscal
year 2006. Based upon currently available information, we will not be required to make significant contributions in fiscal year
2008 to the Pension Plan.
(4) Other long-term liabilities of $172.1 million reflected on our balance sheet at July 28, 2007 include our obligations related to our
supplemental retirement and postretirement health care benefit plans. The future obligations related to our other long-term
liabilities consist of the expected benefit payments for these obligations through 2015, as currently estimated using information
provided by our actuaries. The timing of the expected payments for our remaining long-term liabilities, primarily for other
employee benefit plans and arrangements, are not currently estimable.
(5) Construction commitments relate primarily to obligations pursuant to contracts for the construction of new stores and the
renovation of existing stores expected as of July 28, 2007. These amounts represent the gross construction costs and exclude
developer contributions of approximately $36 million which we expect to receive pursuant to the terms of the construction
contracts.
(6) In the normal course of our business, we issue purchase orders to vendors/suppliers for merchandise. Our purchase orders are not
unconditional commitments but, rather represent executory contracts requiring performance by the vendors/suppliers, including
the delivery of the merchandise prior to a specified cancellation date and the compliance with product specifications, quality
standards and other requirements. In the event of the vendor's failure to meet the agreed upon terms and conditions, we may
cancel the order.
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