Neiman Marcus 2005 Annual Report Download - page 111

Significant components of our net deferred income tax asset are as follows:
(in thousands)
July 29,
2006
July 30,
2005
Deferred income tax assets:
Accruals and reserves $ 31,679 $ 22,955
Employee benefits 61,247 52,794
Pension obligation 31,214 6,327
Other 2,044 2,035
Total deferred tax assets $ 126,184 $ 84,111
Deferred income tax liabilities:
Inventory $ (10,993 ) $ (11,674 )
Depreciation and amortization (56,053 ) (39,343 )
Intangible assets (1,082,867 ) —
Other (4,064 )(3,610 )
Total deferred tax liabilities (1,153,977 )(54,627 )
Net deferred income tax asset (liability) $ (1,027,793 )$ 29,484
Net deferred income tax asset (liability):
Current $ 31,572 $ 16,598
Non-current (1,059,365 )12,886
Total $ (1,027,793 )$ 29,484
The net deferred tax liability of $1,027.8 million at July 29, 2006 increased from a $29.5 million net deferred asset at July 30,
2005. This increase was comprised of 1) $1,123.0 million deferred tax liability related to purchase accounting valuations and 2) $7.2
million of deferred tax liabilities related to financial instruments charged directly to other comprehensive loss in the statement of
shareholders' equity net of 3) $72.9 million deferred tax benefit for fiscal year 2006. We believe it is more likely than not that we will
realize the benefits of our recorded deferred tax assets.
NOTE 12. EMPLOYEE BENEFIT PLANS
Description of Benefit Plans. We sponsor a defined benefit pension plan (Pension Plan) covering substantially all full-time
employees. We also sponsor an unfunded supplemental executive retirement plan (SERP Plan) which provides certain employees
additional pension benefits. Benefits under both plans are based on the employees' years of service and compensation over defined
periods of employment.
Retirees and active employees hired prior to March 1, 1989 are eligible for certain limited postretirement health care benefits
(Postretirement Plan) if they meet certain service and minimum age requirements. The cost of these benefits is accrued during the years in
which an employee provides services. We paid postretirement health care benefit claims of $1.9 million during fiscal year 2006
(including $0.4 million for the Predecessor), $1.7 million during fiscal year 2005 and $1.8 million during fiscal year 2004.
We have a qualified defined contribution 401(k) plan, which covers substantially all employees. Employees make contributions
to the plan and we match an employee's contribution up to a maximum of 6% of the employee's compensation subject to statutory
limitations. We also sponsor an unfunded key employee deferred compensation plan, which provides certain employees additional
benefits and a profit sharing and a defined contribution retirement plan for employees of Kate Spade LLC. Our aggregate expense related
to these plans were approximately $9.1 million for the forty-three weeks ended July 29, 2006, $1.8 million for the nine weeks ended
October 1, 2005, $10.8 million for fiscal year 2005 and $9.5 million for fiscal year 2004.
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