SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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:
July 31, 1999 33-88098
NEIMAN MARCUS FUNDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2354838
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
NEIMAN MARCUS FUNDING CORPORATION
1201 Elm Street
Dallas, Texas 75201
(214) 761-2300
(Address of principal executive offices, including Zip Code
and Telephone Number, including Area Code)
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 ___
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.
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 principle 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.
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 7A. Quantitative and Qualitative Disclosures about Market
Risk
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.
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 July 31, 1999. Such
direct participants may hold Certificates for their own
accounts or for the accounts of their customers. At
December 9, 1999, 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:
Title of Aggregate Amount Percentage
Class Name of Certificates Held of Ownership
Series 1995-1
Class A
Chase Manhattan Bank $51,280,000 22.8
State Street Bank and Trust Co. $47,960,000 21.3
Bank of New York $46,615,000 20.7
Bankers Trust Company $28,600,000 12.7
Citibank $12,180,000 5.4
Class B Chase Manhattan Bank $21,000,000 100
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 December 9, 1999, 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.
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 1999 Annual Servicer's Certificate
99.1 Annual Servicing Report of Independent Public
Accounts 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: August 12, 1998, September 11,
1998, October 14, 1998 (as amended by Form 8-K/A
filed October 19, 1998), November 13, 1998,
December 11, 1998, January 13, 1999, February 11,
1999, March 12, 1999, April 12, 1999, May 11,
1999, June 11, 1999 and July 12, 1999 (as amended
by Form 8-K/A filed July 13, 1999).
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 9, 1999
EXHIBIT INDEX
Sequentially
Exhibit Number Description Numbered Page
20.1 1999 Annual Servicer's Certificate
99.1 Annual Servicing Report of
Independent Public Accountants
pursuant to Section 3.06 of the
Pooling and Servicing Agreement
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 it 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 July 31, 1999, 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 July 31,
1999, 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 29th day of October, 1999.
THE NEIMAN MARCUS GROUP, INC.
as Servicer,
By: s/ Paul. F. Gibbons
Paul F. Gibbons
Vice President and Treasurer
EXHIBIT 99.1
INDEPENDENT ACCOUNTANTS'REPORT
Mr. Paul F. Gibbons Salomon Smith Barney, 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
Credit Suisse First Boston Corporation New York, NY 10007
11 Madison Avenue, 5th Floor
New York, NY 10011
and
Annual Servicing Report
We have examined management's assertion, included in its representation letter
to Deloitte & Touche LLP, dated August 31, 1999, that The Neiman Marcus Group,
Inc. ("NMG") maintained an effective internal control structure as of July
31, 1999, 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.
In our opinion, management's assertion that NMG maintained an effective
internal control structure as of July 31, 1999, 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 definition of an entity's internal
control structure as defined in Statements on Auditing Standards No. 78,
"Consideration of the Internal Control in a Financial Statement Audit: An
Amendment to SAS No. 55."
We have also examined management's assertion, included in its representation
letter to Deloitte & Touche LLP dated August 31, 1999, 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 July 31, 1999. 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 July 31, 1999, 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,
Credit Suisse First Boston Corporation, Salomon Smith Barney, Inc., Standard &
Poor's Ratings Group, Moody's Investors Services and Investor Certificateholders
and is not intended to be and should not be used by anyone other than these
specified parties.
/s/ DELOITTE & TOUCHE LLP
August 31, 1999
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