SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: Commission file number:
August 2, 1997 33-88098
NEIMAN MARCUS FUNDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2354838
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1201 Elm Street
Dallas, Texas 75201
(Address of principal executive offices) (zip code)
Registrant s telephone number, including area code:
(214) 761-2300
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Neiman Marcus Group Credit Card Master Trust
7.60% Class A Asset Backed Certificates, Series 1995-1
7.75% Class B Asset Backed Certificates, Series 1995-1
Indicate by check mark whether the Registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
<PAGE>
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant: NONE - all of the voting stock of the Registrant is held by
The Neiman Marcus Group, Inc., and there is no public market for such stock.
<PAGE>
PART I
Item 1. Business
The Neiman Marcus Group Credit Card Master Trust (the "Trust") was
formed pursuant to the Pooling and Servicing Agreement dated as of
March 1, 1995 (the "Pooling and Servicing Agreement") among The
Neiman Marcus Group, Inc. ("NMG") as Servicer, its wholly owned
subsidiary, Neiman Marcus Funding Corporation ("NMFC") as Seller,
and The Chase Manhattan Bank, N.A., as Trustee (the "Trustee").
On March 15, 1995, the Trust issued $225,000,000 aggregate
principal amount of Class A 7.60% Asset Backed Certificates,
Series 1995-1 (the "Class A Certificates"); $21,000,000 aggregate
principal amount of Class B 7.75% Asset Backed Certificates,
Series 1995-1 (the "Class B Certificates"); and $54,000,000
aggregate principal amount of Class C Asset Backed Certificates,
Series 1995-1 (the "Class C Certificates"), pursuant to the
Pooling and Servicing Agreement. The property of the Trust
includes a pool of receivables arising under consumer revolving
credit accounts originated by NMG. The receivables were sold by
NMG to NMFC pursuant to a Receivables Purchase Agreement dated as
of March 1, 1995 between NMG and NMFC, and the receivables were
sold by NMFC to the Trust pursuant to the Pooling and Servicing
Agreement. The only business of NMFC is to perform its
obligations as Seller in connection with the issuance by the Trust
of the Class A, Class B and Class C Certificates pursuant to the
Receivables Purchase Agreement, the Pooling and Servicing
Agreement, and the Series 1995-1 Supplement to the Pooling and
Servicing Agreement.
Item 2. Properties
See Item 1 for a description of the property of the Trust
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
None
<PAGE>
PART II
Item 5. Market For Registrant's Common Equity
And Related Stockholder Matters
The Class A and Class B Certificates are held and delivered in
book entry form through the facilities of The Depository Trust
Company ("DTC"), a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934
as amended. The Certificates representing investors' interests in
the Trust are registered in the name of Cede & Co., the nominee of
DTC.
To the best knowledge of the Registrant, there is no established
public trading market for the Certificates.
The Class C Certificate is held by NMFC, and all of the common
stock of NMFC is owned by NMG. There is no public market for the
common stock of NMFC.
Item 6. Selected Financial Data
Not Applicable
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Not Applicable
Item 8. Financial Statements and Supplementary Data
Not Applicable
Item 9. Changes in and Disagreements With Accountants On Accounting And
Financial Disclosure
None
Item 10. Directors and Executive Officers of the Registrant
Not Applicable
Item 11. Executive Compensation
Not Applicable
-2-<PAGE>
PART III
Item 12. Security Ownership Of Certain Beneficial Owners And Management
(a) The Class A Certificates and the Class B Certificate, which
represent investors' interests in the Trust, are registered in the name of
Cede & Co., the nominee of The Depository Trust Company ("DTC"), and an
investor holding an interest in the Trust is not entitled to receive a
Certificate representing such interest except in certain limited
circumstances. Accordingly, Cede & Co. is the sole holder of record of the
Class A and Class B Certificates, which it held on behalf of brokers, dealers,
banks and other direct participants in the DTC system at August 2, 1997. Such
direct participants may hold Certificates for their own accounts or for the
accounts of their customers. At August 2, 1997, the following direct DTC
participants held positions in Certificates representing interests in the
Trust equal to or exceeding 5% of the total principal amount of the
Certificates of each Class outstanding on that date:
<TABLE>
<CAPTION>
Title of Aggregate Amount Percentage
Class Name of Certificates Held of Ownership
Series 1995-1
<S> <C> <C>
Class A Bankers Trust Company $60,000,000 26.7%
Chase Manhattan Bank $51,360,000 22.8%
Bank of New York $42,150,000 18.7%
State Street Bank - Custodian $21,640,000 9.6%
Citibank $12,400,000 5.5%
Class B Chase Manhattan Bank $21,000,000 100%
</TABLE>
The address of each of the above participants is
c/o The Depository Trust Company
7 Hanover Square
New York, NY 10004
NMFC, as of August 2, 1997, owned 100% of the Class C Certificate, which
represented beneficial ownership of a residual interest in the assets of the
Trust as provided in the Pooling and Servicing Agreement.
The Neiman Marcus Group, Inc. is the owner of 100% of the issued and
outstanding common stock of the Registrant, which is not traded in any market.
Item 13. Certain Relationships and Related Transactions
None
-3-
PART IV
Item 14. Exhibits, Financial Statement Schedules, And Reports On Form 8-K
(a) The following Exhibits are filed as part of this Report:
20.1 1997 Annual Servicer's Certificate
99.1 Annual Servicing Report of Independent Public Accountants
pursuant to Section 3.06 of the Pooling and Servicing Agreement
(b) Reports on Form 8-K
Current Reports on Form 8-K are filed on or before the Distribution Date
each month (on, or the first business day after, the 15th of each
month). The reports include as an Exhibit the Monthly Servicer's
Certificate. Current Reports on Form 8-K were filed with the Securities
and Exchange Commission on: November 12, 1996, December 10 , 1996,
January 10, 1997, February 13 ,1997, March 12, 1997, April 11, 1997, May
13, 1997, June 11, 1997, July 11, 1997, August 11, 1997, September 12,
1997, October 10, 1997, and November 10, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
NEIMAN MARCUS FUNDING CORPORATION
By: /s/ Paul F. Gibbons
Paul F. Gibbons
Vice President and Treasurer
Date: December 2, 1997
-4-<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION SEQUENTIALLY
NUMBER NUMBERED PAGE
20.1 Annual Servicer's Certificate
99.1 Annual Servicing Report of
Independent Public Accountants
pursuant to Section 3.06 of the
Pooling and Servicing Agreement
<PAGE>
EXHIBIT 20.1
ANNUAL SERVICER'S CERTIFICATE
THE NEIMAN MARCUS GROUP, INC.
NEIMAN MARCUS GROUP CREDIT CARD MASTER TRUST
The undersigned, a duly authorized representative of The Neiman Marcus
Group, Inc., as Servicer ("NMG"), pursuant to the Pooling and Servicing
Agreement dated as of March 1, 1995 (as may be amended and supplemented from
time to time, the "Agreement"), among Neiman Marcus Funding Corporation, as
Seller, NMG as Servicer, and The Chase Manhattan Bank, N.A., as Trustee, does
hereby certify that:
1. NMG is, as of the date hereof, the Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective meanings as
set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the
Trustee.
3. A review of the activities of the Servicer during the fiscal year
ended August 2, 1997, and of its performance under the Agreement was
conducted under my supervision.
4. Based on such review, the Servicer has, to the best of my
knowledge, performed in all material respects its obligations under the
Agreement throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 5
below.
5. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the Agreement known to
me to have been made by the Servicer during the fiscal year ended August 2,
1997, which sets forth in detail (i) the nature of each such default, (ii) the
action taken by the Servicer, if any, to remedy each such default and (iii)
the current status of each such default: NONE.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this 2nd day of December, 1997.
THE NEIMAN MARCUS GROUP, INC.
as Servicer,
By: /s/ Paul F. Gibbons
Paul F. Gibbons
Vice President and Treasurer
<PAGE>
EXHIBIT 99.1
INDEPENDENT ACCOUNTANTS' REPORT
Mr. Paul F. Gibbons Salomon Brothers, Inc
Vice President and Treasurer Seven World Trade Center
The Neiman Marcus Group, Inc. New York, NY 10048
27 Boylston Street and
Chestnut Hill, MA 02167 Standard & Poor's Ratings Group
and 25 Broadway
The Chase Manhattan Bank, N.A. New York, NY 10004-1064
4 Chase Metro Tech Center and
Brooklyn, NY 11245 Moody's Investors Services
and 99 Church Street
CS First Boston Corporation New York, NY 10007
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
and
Annual Servicing Report
We have examined management's assertion, included in its representation letter
to Deloitte & Touche LLP, dated August 28, 1997, that The Neiman Marcus Group,
Inc. ("NMG") maintained an effective internal control structure as of August
2, 1997, insofar as such structure relates to the servicing procedures
performed by NMG, to prevent or detect errors or irregularities in amounts
that would be material in relation to the assets of The Neiman Marcus Group
Credit Card Master Trust Series 1995-1 (the "Trust") formed pursuant to the
Pooling and Servicing Agreement (the "Agreement") dated March 1, 1995.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
obtaining an understanding of the internal control structure as it relates to
servicing procedures performed by NMG, testing and evaluating the design and
operating effectiveness of the internal control structure, and such other
procedures as we considered necessary in the circumstances. We believe that
our examination provides a reasonable basis for our opinion.
Because of the inherent limitations in any internal control structure, errors
or irregularities may occur and not be detected. Also, projections of any
evaluation of the internal control structure to future periods are subject to
the risk that the internal control structure may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
<PAGE>
In our opinion, management's assertion that NMG maintained an effective
internal control structure as of August 2, 1997, insofar as such structure
relates to the servicing procedures performed by NMG, to prevent or detect
errors or irregularities in amounts that would be material in relation to the
assets of the Trust under the Agreement, taken as a whole, is fairly stated,
in all material respects, based upon the elements of an entity's internal
control structure as defined in Statements on Auditing Standards No. 55,
"Consideration of the Internal Control Structure in a Financial Statement
Audit."
We have also examined management's assertion, included in its representation
letter to Deloitte & Touche LLP dated August 28, 1997, that the servicing
procedures performed by NMG have been conducted in compliance with the terms
and conditions set forth in Article III and Article IV and Section 8.08 of the
Agreement during the year ended August 2, 1997. As discussed in that
representation letter, management is responsible for NMG's compliance with
those requirements. Our responsibility is to express an opinion on
management's assertion about NMG's compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about compliance with those requirements
and performing such other procedures as we considered necessary in the
circumstances. We believe that our examination provides a reasonable basis for
our opinion. Our examination does not provide a legal determination on NMG's
compliance with specified requirements.
In our opinion, management's assertion that the servicing procedures performed
by NMG have been conducted in compliance with the terms and conditions set
forth in Article III and Article IV and Section 8.08 of the Agreement for the
year ended August 2, 1997, is fairly stated, in all material respects.
This report is intended solely for the information and use of the Board of
Directors and management of NMG, The Chase Manhattan Bank, N.A., as Trustee,
CS First Boston Corporation, Salomon Brothers, Inc., Standard & Poor's Ratings
Group, Moody's Investors Services and Investor Certificateholders and should
not be used for any other purpose.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
August 28, 1997
- 2 -
