Neiman Marcus 2012 Annual Report Download - page 119

Table of Contents
At August 3, 2013, the gross amount of unrecognized tax benefits was $3.5 million, $2.2 million of which would impact our effective tax rate, if
recognized. We classify interest and penalties as a component of income tax expense and our liability for accrued interest and penalties was $5.5 million at
August 3, 2013 and $5.2 million at July 28, 2012. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
(in thousands)
August 3,
2013
July 28,
2012
Balance at beginning of fiscal year $3,564 $4,125
Gross amount of decreases for prior year tax positions (281)(883)
Gross amount of increases for current year tax positions 178 322
Balance at ending of fiscal year $ 3,461 $ 3,564
We file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. During the second quarter of fiscal year 2013, the
Internal Revenue Service (IRS) began its audit of our fiscal year 2010 and 2011 federal income tax returns and closed its audit of our fiscal year 2008 and
2009 income tax returns. With respect to state and local jurisdictions, with limited exceptions, the Company and its subsidiaries are no longer subject to
income tax audits for fiscal years before 2008. We believe our recorded tax liabilities as of August 3, 2013 are sufficient to cover any potential assessments to
be made by the IRS or other taxing authorities upon the completion of their examinations and we will continue to review our recorded tax liabilities for potential
audit assessments based upon subsequent events, new information and future circumstances. We believe it is reasonably possible that additional adjustments
in the amounts of our unrecognized tax benefits could occur within the next twelve months as a result of settlements with tax authorities or expiration of statutes
of limitation. At this time, we do not believe such adjustments will have a material impact on our Consolidated Financial Statements.
NOTE 10. EMPLOYEE BENEFIT PLANS
Description of Benefit Plans. We currently maintain defined contribution plans consisting of a retirement savings plan (RSP) and a defined
contribution supplemental executive retirement plan (Defined Contribution SERP Plan). As of January 1, 2011, employees make contributions to the RSP and
we match an employee’s contribution up to a maximum of 6% of the employee’s compensation subject to statutory limitations for a potential maximum match
of 75% of employee contributions. We also sponsor an unfunded key employee deferred compensation plan, which provides certain employees with
additional benefits. Our aggregate expense related to these plans was approximately $30.4 million in fiscal year 2013, $29.3 million in fiscal year 2012 and
$28.4 million in fiscal year 2011.
In addition, we sponsor a defined benefit pension plan (Pension Plan) and an unfunded supplemental executive retirement plan (SERP Plan) which
provides certain employees additional pension benefits. As of the third quarter of fiscal year 2010, benefits offered to all participants in our Pension Plan and
SERP Plan have been frozen. Retirees and active employees hired prior to March 1, 1989 are eligible for certain limited postretirement health care benefits
(Postretirement Plan) if they meet certain service and minimum age requirements.
Obligations for our employee benefit plans, included in other long-term liabilities, are as follows:
(in thousands)
August 3,
2013
July 28,
2012
Pension Plan $104,018 $175,953
SERP Plan 103,854 117,562
Postretirement Plan 12,429 17,466
220,301 310,981
Less: current portion (6,542)(6,282)
Long-term portion of benefit obligations $213,759 $304,699
As of August 3, 2013, we have $103.5 million (net of taxes of $67.3 million) of adjustments to such obligations recorded as increases to
accumulated other comprehensive loss.
Funding Policy and Status. Our policy is to fund the Pension Plan at or above the minimum required by law. In fiscal years 2013 and 2012, we
were not required to make contributions to the Pension Plan; however, we made voluntary contributions to our Pension Plan of $25.0 million in fiscal year
2013 and $29.3 million in fiscal year 2012. As of August 3,
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