Neiman Marcus 2007 Annual Report Download - page 106
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Table of Contents
NOTE 7. GOODWILL AND INTANGIBLE ASSETS, NET
The significant components of our intangible assets and goodwill, by our operating segments, are as follows:
(in thousands)
Customer
lists
Favorable
lease
commitments
Tradenames
(indefinite
lives) Goodwill
Specialty Retail
Balance at July 29, 2006 $ 457,673 $ 465,197 $ 1,406,030 $ 1,300,253
Amortization (39,615)(17,878)
Balance at July 28, 2007 $ 418,058 $ 447,319 $ 1,406,030 $ 1,300,253
Amortization (39,542) (17,878)
Adjustments related to pre-acquisition tax
contingencies — — — 4,805
Balance at August 2, 2008 $ 378,516 $ 429,441 $ 1,406,030 $ 1,305,058
Direct Marketing
Balance at July 29, 2006 $ 73,959 $ — $ 215,758 $ 304,887
Amortization (14,772) —
Writedown of Horchow tradename — — (11,473)—
Balance at July 28, 2007 $ 59,187 $ — $ 204,285 $ 304,887
Amortization (14,772) —
Writedown of Horchow tradename — — (31,261) —
Adjustments related to pre-acquisition tax
contingencies 1,246
Balance at August 2, 2008 $ 44,415 $ — $ 173,024 $ 306,133
Total at August 2, 2008 $ 422,931 $ 429,441 $ 1,579,054 $ 1,611,191
In the first quarter of fiscal year 2008, the cumulative effect of adopting FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes" (FIN 48) resulted in a net increase to our accruals for uncertain tax positions of $9.1 million for the
derecognition of certain tax benefits. This increase to our accruals was offset by a corresponding increase to goodwill as these
uncertainties existed at the time of the Acquisition. During the fourth quarter, we entered into a negotiated settlement with a state tax
authority regarding a state non-filing position which resulted in a reduction to our gross unrecognized tax benefits of $7.2 million and
a corresponding decrease to goodwill of $3.0 million related to the resolution of uncertainties that existed at the time of the
Acquisition.
In the fourth quarters of fiscal years 2008 and 2007, we recorded $31.3 million and $11.5 million pretax impairment charges
related to the writedown to fair value of the net carrying value of the Horchow tradename based upon lower revenues and royalty rate
expectations with respect to the Horchow brand in light of current operating performance and future operating expectations. At
August 2, 2008, the recorded fair value of the Horchow tradename is $16.6 million.
F-20