Bed, Bath and Beyond 2003 Annual Report Download - page 9

BED BATH& BEYOND ANNUAL REPORT 2003
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Goodwill and Other Indefinitely Lived Intangible Assets: The Company reviews goodwill and other intangibles
that have indefinite lives for impairment annually and otherwise when events or changes in circumstances indicate
the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the
best information available including estimates of fair value which incorporate assumptions marketplace participants
would use in making their estimates of fair value. The Company does not believe that any material impairment
currently exists related to its goodwill and indefinitely lived intangible assets.
Vendor Allowances: The Company receives various types of allowances from our merchandise vendors, which
are based on negotiated terms. These allowances are recorded when earned as a reduction of cost of sales or as a
reduction of other costs in accordance with the provisions of the FASB’s Emerging Issues Task Force Issue No. 02-16,
“Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor.”
Self Insurance: The Company uses self insurance for a number of risks including worker’s compensation, general liabil-
ity, automobile liability and employee related health care benefits (a portion of which is paid by our employees).
Liabilities associated with these risks are estimated by considering historical claims experience, demographic factors,
severity factors and other actuarial assumptions.
Litigation: The Company records an estimated liability related to various claims and legal actions arising in the
ordinary course of business which is based on available information and advice from outside counsel, where
appropriate. As additional information becomes available, the Company reassesses the potential liability related
to its pending litigation and revises its estimates as appropriate.
Store Opening, Expansion, Relocation and Closing Costs: Store opening, expansion, relocation and closing costs are
charged to earnings as incurred. Prior to the adoption of SFAS No. 146, “Accounting for Costs Associated with Exit
or Disposal Activities,” which was effective for any exit or disposal activity initiated after December 31, 2002, costs
related to store relocations and closings were provided for in the period in which management approved the reloca-
tion or closing of a store. Actual costs related to store relocations and closings could differ from these estimates.
FORWARD LOOKING STATEMENTS
This Annual Report and, in particular, Management’s Discussion and Analysis of Financial Condition and Results of
Operations, and the Shareholder Letter, contain forward looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended. The Company’s actual results and future financial condition
may differ materially from those expressed in any such forward looking statements as a result of many factors
that may be outside the Company’s control. Such factors include, without limitation: general economic conditions,
changes in the retailing environment and consumer spending habits, demographics and other macroeconomic
factors that may impact the level of spending for the types of merchandise sold by the Company; unusual weather
patterns; competition from existing and potential competitors; competition from other channels of distribution;
pricing pressures; the ability to find suitable locations at reasonable occupancy costs to support the Company’s
expansion program; and the cost of labor, merchandise and other costs and expenses.