Lehman Brothers High Yield Bond & Syndicated Loan Conference March 28, 2007 Scottsdale, AZ

Lehman Brothers High Yield Bond & Syndicated Loan Conference March 28, 2007 Scottsdale, AZ

Forward Looking Statements Disclaimer The following information contains, or may be deemed to contain, forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995). By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of the company may vary from the results expressed in, or implied by, the following forward-looking statements, possibly to a material degree. For a discussion of some of the important factors that could cause the company s results to differ from those expressed in, or implied by, the following forward-looking statements, please refer to the company s Offering Circular. The company undertakes no obligation to update or revise any forward-looking statements. 2

Company Overview High-end specialty retailer offering luxury apparel and accessories Specialty Retail Neiman Marcus Direct LTM Revenue: $4.2 Billion* * Note: LTM revenue as of Q2 FY 07 (excludes Gurwitch Products LLC and Kate Spade LLC). 3

Prime Store Locations Minneapolis Chicago Northbrook, Oakbrook Troy Westchester, NYC - BG (2) 5 1 1 1 1 3 1 King of Prussia 1 1 3 2 1 Boston Short Hills, Paramus Washington D.C. LA, SF, Palo Alto, San Diego, Newport Beach 1 Honolulu Las Vegas 1 Scottsdale Denver 7 1 7 1 Atlanta Tyson s Corner Charlotte 38 Neiman Marcus Stores 2 Bergdorf Goodman Stores Total Specialty Square Footage: 5.5M Northpark, Houston, Dallas, Plano, Ft. Worth, San Antonio, Austin St. Louis Bal Harbour, Coral Gables, Ft. Lauderdale, Tampa Bay, Orlando, Palm Beach, Boca Raton Geographically diverse store base in premier locations in the nation s most affluent markets 4

Professional, Relationship-Focused Salesforce Focus on building long-term relationships, not just transactions Highly specialized sales associate selection, training, and development programs Sales Associate Turnover Sales Associate Productivity (3) 65% 64% 34% 18% Neiman Marcus (1) (2) Retail Average % of Associates Selling Over $500,000 % of Associates Selling Over $1 million (1) Includes all full- time and part-time sales associates for fiscal 2006. (2) Retail average turnover statistics are for full-time only sales staff provided by 2005 National Retail Federation Annual Compensation and Benefits Survey. (3) Represents fiscal 2006 revenues at Neiman Marcus full- line stores and Bergdorf Goodman only. Excludes associates with less than one year of service. 5

Unique Customer Loyalty Program Unique and powerful InCircle rewards program drives superior loyalty from an attractive, affluent customer base InCircle Program Revenue InCircle Customer Behavior InCircle Sales Non-InCircle InCircle ($ in millions) $1,600 $1,400 % of Total Neiman Marcus Store Sales 10% CAGR $1,324 $1,567 60% Annual Purchases ($) $629 $12,333 Difference vs. Non-InCircle 19.6x Trips Per Year 3.3 16.9 Difference vs. Non-InCircle 5.1x $1,200 $1,000 $800 $880 40% $850 $894 41% $1,174 $1,008 45% 43% 46% 51% 50% 40% Spend Per Item ($) $86 $212 Difference vs. Non-InCircle 2.5x $600 37% $400 2000 2001 2002 2003 2004 2005 2006 30% Note: InCircle customer behavior data presented for calendar year 2006. Customer behavior statistics based on private label credit card information only. 6

Powerful Relationships With Diverse Group of Top Vendors 2006 Merchandise Mix (1), (2) No dependency on any one product category Designer and Precious Jewelry Other Home Furnishings and Décor 10% 5% Women s Apparel 8% 35% Men s Apparel and Shoes 12% 11% 19% Cosmetics and Fragrances Women s Shoes, Handbags and Accessories Neiman Marcus long-term relationships with leading designers and diverse merchandise base mitigates fashion / brand risk (1) Amounts exclude revenues from leased departments, shipping / delivery revenues, and revenue adjustments for returns reserves, etc. (2) Other Merchandise primarily includes Clearance Centers and Children's. 7

Disciplined Inventory Management Conservative Planning Merchandising Group Lockerstock Program Product Reporting Full Price Selling Maximizing Sustainable Margins 8

Specialty Retail Initiatives Drive Greater Merchandise Productivity Attract and Develop a Younger Customer Base Maximize Return on Full Line Stores Expand Last Call Clearance Strategy Maintaining and Expanding our Leadership Position 9

Focused Expansion Strategy STATE COMPLETION DATE SQ. FOOTAGE New Stores Charlotte North Carolina September 2006 (Opened) 80,000 Austin Texas Spring 2007 (Opened) 80,000 Natick Massachusetts Fall 2007 100,000 Topanga California Fall 2008 120,000 Bellevue Washington Fall 2009 120,000 Long Island New York Fall 2009 150,000 Princeton New Jersey Spring 2010 90,000 Remodels San Diego California Summer 2007 No additional sq. footage Atlanta Georgia Fall 2008 Additional 50,000 10

San Antonio, TX The Shops at La Cantera Opened: September 2005 120,000 square feet 11

Charlotte, NC SouthPark Mall Opened: September 2006 80,000 square feet 12

Natick, MA Natick Mall Scheduled opening: Fall 2007 100,000 square feet 13

Topanga, CA Topanga Plaza Scheduled opening: Fall 2008 120,000 square feet 14

Bellevue, WA The Bravern Scheduled opening: Fall 2009 120,000 square feet 15

Last Call Clearance Centers 19 Clearance Centers in 12 states 17 Last Call 2 Horchow Planned 2 additional stores in FY 07 Evaluating potential opportunity of business model Developing infrastructure to support growth Distribution Merchandising Beginning to view as separate business unit 16

CUSP store openings LOCATION MALL/AREA OPENING DATE SQ. FOOTAGE Washington, DC Tyson s Mall July 2006 (Opened) 9,500 Los Angeles Century City August 2006 (Opened) 8,200 Washington, DC Georgetown March 2007 (Opened) 11,000 Northbrook, IL Northbrook Court July 2007 7,055 17

CUSP 18

CUSP 19

CUSP 20

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Neiman Marcus Direct

Expanding Brand Reach Through Multi-Channels Retail Online Catalog Incremental and highly complementary to retail stores Focus on Brands, Not Channels 24

Direct Marketing Initiatives Emerging elite customer Designer sites Online clearance Technology investment 25

Growth of Internet FY2002 FY2006 17% 38% 62% 83% Internet Catalog Rapid internet growth resulting in strong operating results. 26

Business Activities 2000 - Present Fiscal Year Launched internet business 2000 Formed separate NMG Corporate team 2001 Formed new Merchandise Planning Group 2003 Launched BG.com 2005 Formed Strategic Planning Team 2005 Sold Chef s Catalog 2005 Developed Designer Sites 2005 Sold Credit Card Portfolio 2005 Sold Gurwitch Products 2006 Opened first CUSP store 2006 Sold Kate Spade 2007 27

Financial Overview

Historical Financial Performance Historical Financial Performance ($ in millions) 7% Revenue CAGR 11% EBIT CAGR $2,913 $2,998 $2,580 $2,181 $2,338 $2,042 $1,888 $248 $150 $159 $183 $199 $183 $203 $2,905 $172 $3,046 $220 $3,484 $347 $3,775 $418 $4,106 $450 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Fiscal Years Ending July Revenue EBIT 1 1 Consistent growth through multiple business and economic cycles highlighted by Revenue and EBIT CAGRs of 7% and 11%, respectively Note: All information for 2000 and thereafter reflects the change in classification of revenues deferred in connection with the Company s loyalty programs. EBIT figures exclude non-recurring items. FY 2002-2006 have been restated to exclude Gurwitch Products. FY 2002 reflects 53 weeks ended August 3, 2002. 1 Operating earnings are adjusted to exclude amortization of customer lists and favorable lease commitments, purchase accounting adjustments, transaction and other costs, gain on credit card sale and the loss on disposition of Chef s Catalog. 29

Financial Metrics Specialty Retail Revenue ($ in millions) ($ in millions) Specialty Retail EBIT $2,442 $2,487 5% CAGR $2,850 $2,507 $2,417 $3,103 $3,375 $3,536 $249 $201 $171 9% CAGR 10.2% 8.1% 7.1% 7.9% $311 10.9% $198 $378 12.2% $404 $452 12.0% 12.8% 2000 2001 2002 2003 2004 2005 2006 2007 LTM Q2 NMD Revenue ($ in millions) ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 LTM EBIT EBIT Margin Q2 NMD EBIT $405 $438 $444 8% CAGR $494 $571 $592 $655 $689 $23 $11 2.5% 5.1% 2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005 2006 2007 LTM LTM Q2 EBIT EBIT Margin Q2 Note: Specialty Retail revenue reflects the change in classification of revenues deferred in connection with the Company s loyalty programs. $2 76% CAGR $46 9.3% $61 10.7% $75 12.7% $98 $106 15.0% 15.4% 30

Superior Performance NMG Sales per Square Foot $577 $611 $624 $440 $452 $497 $511 $478 $472 $528 1998 1999 2000 2001 2002 2003 2004 2005 2006 LTM Q2 FY '07 NMG Comparable Revenue Growth 6.0% 2.6% 11.8% 2.3% 3.8% 14.4% 9.8% 6.8% 7.0% -4.8% 1998 1999 2000 2001 2002 2003 2004 2005 2006 LTM Q2 FY '07 Note: NMG comparable revenue growth figures for 2002-06 reflect the change in classification of revenues deferred in connection with the Company s loyalty programs and reflect the sale of Gurwitch Products. NMG Sales per Square Foot figures represent Specialty Retail and exclude clearance centers. 31

Superior Performance $700 $600 $500 $400 $300 $200 $100 Sales Per Square Foot Note Figures are from LTM ending January 27, 2007. NMG data is for the Specialty Retail segment only (Full line Neiman Marcus Stores and Bergdorf Goodman). SFAE is estimated Saks Fifth Avenue stores and internet sales (excludes estimated clearance center sales). 32

FY 2007 2 nd Quarter Financial Highlights NMG Q2 FY 07 Q2 FY 06 % change Comparable Sales 6.8% 6.0% Adjusted Operating Earnings ($M)* $146 $118 23.8% Specialty Retail Comparable Store Sales 7.0% 4.5% Operating Earnings ($M) $122 $94 28.8% Neiman Marcus Direct Sales Growth 6.1% 13.2% Operating Earnings ($M) $39 $38 3.2% Source Neiman Marcus, Inc. FY2007 Q2 Earnings Release (for the fiscal period ended January 27, 2007). Figures exclude Gurwitch Products LLC and Kate Spade LLC. Adjusted operating earnings excluding amortization of customer lists and favorable lease commitments, purchase accounting adjustments, other income and transaction and other costs. 33

Summary Balance Sheet ($ in millions) 2Q FY 2007 2Q FY 2006 Cash $ 189 $ 91 Merchandise inventories 812 769 Current liabilities $ 695 $ 666 Long-term debt 3,021 3,196 Shareholder s equity $ 1,495 $ 1,416 34

Historical Capital Expenditures Average gross capex spend of $155 million between 2001 and 2006 FY 2001 FY 2005 FY 2006 26% 24% 19% 42% 21% 22% 28% 18% New Stores Major Remodels Information Technology Other Note: Figures represent gross capital expenditures and include Gurwitch products. 35

Capitalization (As of January 27, 2007) ($ in millions) % of Capitalization Q2 FY '07 Cap. $600 Million Asset-Based Revolving Credit Facility - Senior Debentures due 2028 (7.125%) 121 Senior Secured Term Loan 1,700 Other Senior Secured Debt 3 Total Senior Secured Debt $1,824 40.4% Senior Unsecured Notes (9.00%) 700 Total Senior Debt $2,524 55.9% Senior Subordinated Notes (10.375%) 500 Total Debt $3,024 66.9% Equity 1,495 33.1% Total Capitalization $4,519 100.0% Q2 FY '07 Q4 FY '06 Debt / Adjusted EBITDA (LTM) 1 4.7 5.6 Liquidity Q2 FY '07 Q4 FY '06 Asset-Based Revolving Credit Facility - Availability 575 571 Cash 189 224 Total Liquidity $764 $795 (1) LTM EBITDA excludes Gurwitch Products LLC, Kate Spade LLC, inventory purchase price adjustments, lease credit amortization and transaction costs. 36

Reconciliation of Adjusted Operating Earnings FY 2007 FY 2006 (dollars in millions) Q2 Q2 OPERATING EARNINGS: Specialty Retail Stores $ 122 $ 94 Direct Marketing 39 38 Corporate expenses (15) (14) ADJUSTED OPERATING EARNINGS $ 146 $ 118 Amortization of intangible assets (18) (19) Non-cash charges related to other valuation adjustments made in connection with the acquisition 0 (29) Other income 0 0 Transaction and other costs 0 0 OPERATING EARNINGS $ 128 $ 70 Depreciation & Amortization $ 52 $ 53 Source Neiman Marcus, Inc. FY2007 Q2 Earnings Release (for the fiscal period ended January 27, 2007). Figures exclude Gurwitch Products LLC and Kate Spade LLC. 37

EBITDA Reconciliation ($ in millions) As of As of Q2 FY '07 Q4 FY '06 LTM EBITDA (Reported) 1 $ 639 $ 515 Adjustments: Inventory purchase price adjustment - 38 Transaction costs - 24 Total EBITDA adjustments - 62 LTM EBITDA (Adjusted) $ 639 $ 577 Debt/LTM Adjusted EBITDA 4.7 5.6 (1) LTM EBITDA excludes Gurwitch Products LLC and Kate Spade LLC. 38