Neiman Marcus 2002 Annual Report Download - page 52

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In connection with the adoption of the provisions of SFAS No. 142, the Company engaged third party appraisal experts to assist with
the determination of the fair value of its goodwill and intangible assets. Fair value was determined using a discounted cash flow
methodology. For each of the Company's operating segments, a summary of the intangible assets recorded by the Company as of the
beginning of the first quarter of 2003 in accordance with the cost-based accounting model established by previous accounting
principles and the adjustments required during 2003 in accordance with the fair value model of SFAS No. 142 are as follows:
(in thousands)
Carrying
Value at
August 4,
2002
SFAS No. 142 Adjustments
Adjusted
Carrying
Value
At
Adoption
During
2003
Direct Marketing
Goodwill $ 23,747 $ — $ — $ 23,747
Indefinite-lived tradenames 60,732 (24,066)(814)35,852
Other
Indefinite-lived tradenames 32,945 — — 32,945
$ 117,424 $ (24,066)$ (814)$ 92,544
The $24.1 million writedown in the carrying value of the indefinite-lived intangible assets of the Company's Direct Marketing
segment required upon adoption of SFAS No. 142 is reflected as a change in accounting principle ($14.8 million, net of taxes) in the
accompanying consolidated statements of earnings. The additional writedown of $0.8 million was required in 2003 based upon
current estimates of future cash flows and is included in selling, general and administrative expenses.
The Company ceased amortization of its goodwill and indefinite-lived intangible assets as of the beginning of 2003. Amortization
expense was approximately $5.3 million for 2002 and reduced diluted earnings per share by $0.07 for the period. Amortization
expense was approximately $5.9 million for 2001 and reduced diluted earnings per share by $0.08 for the period.
NOTE 4. Accrued Liabilities
The significant components of accrued liabilities are as follows:
(in thousands)
August 2,
2003
August 3,
2002
Accrued salaries and related liabilities $ 43,704 $ 33,993
Self-insurance reserves 34,897 31,991
Amounts due customers 36,770 40,882
Income taxes payable 28,994 31,489
Sales returns 26,674 24,162
Sales tax 21,341 25,127
Loyalty program liability 11,514 7,066
Other 62,365 65,090
Total $ 266,259 $ 259,800
F-18