Neiman Marcus 2009 Annual Report Download - page 109

Table of Contents
based upon the overall profitability and performance of the proprietary credit card portfolio. In addition, we receive payments from
HSBC for marketing and servicing activities as we continue to handle key customer service functions, primarily customer inquiries
and collections, for HSBC. Our estimated net receivable from HSBC at July 31, 2010 was $5.8 million while our estimated net
liability to HSBC aggregated $3.5 million as of August 1, 2009.
NOTE 4. PROPERTY AND EQUIPMENT, NET
The significant components of our property and equipment, net are as follows:
(in thousands)
July 31,
2010
August 1,
2009
Land, buildings and improvements $ 898,625 $ 868,026
Fixtures and equipment 672,808 617,303
Construction in progress 19,451 48,632
1,590,884 1,533,961
Less accumulated depreciation and amortization 685,058 541,246
Property and equipment, net $ 905,826 $ 992,715
NOTE 5. GOODWILL AND INTANGIBLE ASSETS, NET
The significant components of our intangible assets and goodwill, by our reportable operating segments, are as follows:
(in thousands)
Customer
lists
Favorable
lease
commitments Tradenames Goodwill
Specialty Retail
Balance at August 2, 2008 $ 378,516 $ 429,441 $ 1,406,030 $ 1,305,058
Amortization (39,499) (17,877)
Adjustments related to pre-
acquisition tax contingencies (15,687)
Writedown of tradenames (311,835)
Writedown of goodwill (329,709)
Balance at August 1, 2009 $ 339,017 $ 411,564 $ 1,094,195 $ 959,662
Amortization (39,499)(17,878)
Balance at July 31, 2010 $ 299,518 $ 393,686 $ 1,094,195 $ 959,662
Direct Marketing
Balance at August 2, 2008 $ 44,415 $ — $ 173,024 $ 306,133
Amortization (14,772) — (555)
Adjustments related to pre-
acquisition tax contingencies (2,362)
Writedown of tradenames (31,374)
Balance at August 1, 2009 $ 29,643 $ — $ 141,095 $ 303,771
Amortization (14,772)— (1,110)
Balance at July 31, 2010 $ 14,871 $ — $ 139,985 $ 303,771
Total at July 31, 2010 $ 314,389 $ 393,686 $ 1,234,180 $ 1,263,433
Total accumulated amortization at
July 31, 2010 $ 262,101 $ 86,294 $ 1,665
During the third quarter of fiscal year 2009, we closed the Internal Revenue Service (IRS) examination of fiscal years 2005
and 2006 and received net refunds of approximately $2.8 million. In addition, as a result of the completion of the audit and IRS
determination regarding certain deductions taken in connection with the Acquisition, we recorded a decrease in the gross amount of
unrecognized tax benefits of $13.7 million and a decrease in accrued interest and penalties of $2.2 million. This
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