Neiman Marcus 2009 Annual Report Download - page 31

Table of Contents
(2) For fiscal year 2009, impairment charges consist of pretax charges of 1) $329.7 million for the writedown to fair value of
goodwill, 2) $343.2 million for the writedown to fair value of the net carrying value of tradenames and 3) $30.3 million for the
writedown to fair value of the net carrying value of certain long-lived assets.
For fiscal year 2008, impairment charge consists of a $31.3 million pretax impairment charge related to the writedown to fair
value of the Horchow tradename.
(3) For fiscal year 2008, other income includes a pension curtailment gain of $32.5 million as a result of our decision to freeze
certain Pension and SERP benefits as of December 31, 2007.
(4) Comparable revenues include 1) revenues derived from our retail stores open for more than fifty-two weeks, including stores
that have been relocated or expanded and 2) revenues from our Direct Marketing operation. Comparable revenues exclude revenues
of closed stores. The calculation of the change in comparable revenues for fiscal year 2009 is based on revenues for the fifty-
two weeks ended August 1, 2009 compared to revenues for the fifty-two weeks ended July 26, 2008.
(5) Sales per square foot for fiscal year 2008 are based on revenues for the fifty-two weeks ended July 26, 2008.
(6) For an explanation and reconciliation of EBITDA and Adjusted EBITDA as measures of our operating performance, see
"Management's Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measure-
EBITDA and Adjusted EBITDA."
Factors Affecting Our Results
Revenues. We generate our revenues from the sale of high-end merchandise through our Specialty Retail stores and Direct
Marketing operation. Components of our revenues include:
• Sales of merchandise—Revenues from our Specialty Retail stores are recognized at the later of the point of sale or the
delivery of goods to the customer. Revenues from our Direct Marketing operation are recognized when the merchandise
is delivered to the customer. Revenues are reduced when customers return goods previously purchased. We maintain
reserves for anticipated sales returns primarily based on our historical trends related to returns by both our retail and
direct marketing customers. Revenues exclude sales taxes collected from our customers.
• Delivery and processing—We generate revenues from delivery and processing charges related to merchandise delivered
to our customers from both our Specialty Retail stores and Direct Marketing operation.
Our revenues can be affected by the following factors:
• general economic conditions;
• changes in the level of consumer spending generally and, specifically, on luxury goods;
• changes in the level of full-price sales;
• changes in the level of promotional events conducted by our Specialty Retail stores and Direct Marketing operation;
• our ability to successfully implement our store expansion and remodeling strategies; and
• the rate of growth in internet revenues by our Direct Marketing operation.
In addition, our revenues are seasonal. For a description of the seasonality of our business, see "Seasonality."
Cost of goods sold including buying and occupancy costs (excluding depreciation) (COGS). COGS consists of the
following components:
• Inventory costs—We utilize the retail method of accounting. Under the retail inventory method, the valuation of
inventories at cost and the resulting gross margins are determined by applying a calculated cost-to-retail ratio, for various
groupings of similar items, to the retail value of our inventories. The cost of the inventory reflected on the
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