Note C—Amortization of Goodwill As of the beginning of fiscal 2002, the Company adopted SFAS 142. Under SFAS 142, goodwill amortization ceased upon adoption. The  following SFAS 142 disclosure presents the net income and related per share amounts for fiscal 2001 as if amortization of goodwill had not been recorded. During fiscal 2003, the Company terminated various leases relating to stores closed in connection with previous acquisitions. The amount paid to terminate these leases was less than the related accrual and, as a result, the excess accrual of $11.0 million was recorded as a reduc- tion against the goodwill established at the acquisition date. Accrued expenses at August 30, 2003, and August 31, 2002, consisted of the following: The Company or the vendors supplying its products provide its customers limited warranties on certain products that range from 30 days to lifetime warranties. In most cases, the Company’s vendors are primarily responsible for warranty claims. Warranty costs relating to  merchandise sold under warranty not covered by vendors are estimated and recorded as warranty obligations at the time of sale based on each product’s historical return rate. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amount as necessary. Accrued sales returns amounted to approximately $5 million at August 30, 2003, and August 31, 2002. Changes in  the Company’s accrued sales and warranty returns for the last three fiscal years consisted of the following: AutoZone, Inc. 2003 Annual Report 39 Year Ended August 30, August 31, August 25, (in thousands, except per share data) 2003 2002 2001 Reported net income $517,604 $428,148 $175,526 Goodwill amortization, net of tax — — 5,359 Adjusted net income $517,604 $428,148 $180,885 Basic earnings per share: As reported $ 5.45 $ 4.10 $ 1.56 Goodwill amortization, net of tax — — 0.05 Adjusted $ 5.45 $ 4.10 $ 1.61 Diluted earnings per share: As reported $ 5.34 $ 4.00 $ 1.54 Goodwill amortization, net of tax — — 0.05 Adjusted $ 5.34 $ 4.00 $ 1.59 August 30, August 31, (in thousands) 2003 2002 Medical and casualty insurance claims $ 92,666 $ 83,813 Accrued compensation and related payroll taxes 60,777 78,656 Property and sales taxes 44,371 51,379 Accrued sales and warranty returns 78,482 82,035 Other 37,387 48,717 $313,683 $344,600 Note D—Accrued Expenses Year Ended August 30, August 31, August 25, (in thousands) 2003 2002 2001 Balance, beginning of fiscal year $ 82,035 $ 63,467 $ 50,014 Allowances received from vendors 116,808 109,498 98,750 Expense (income) (25,522) 2,978 2,568 Claim settlements (94,839) (93,908) (87,865) Balance, end of fiscal year $ 78,482 $ 82,035 $ 63,467