Target 2006 Annual Report Download - page 51

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14. Other Non-Current Assets
February 3, January 28,
(millions) 2007 2006
Cash value of life insurance (a) $ 559 $ 524
Prepaid pension expense (b) 325 752
Goodwill and intangible assets 212 183
Other 116 93
Total $1,212 $1,552
(a) Company-owned life insurance policies on approximately 3,000 team members who are designated highly-compensated under the Internal
Revenue Code and have given their consent to be insured.
(b) Prepaid pension expense at February 3, 2007 includes the effect of our adoption of SFAS No. 158, ‘‘Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R).’’ Refer to Note 28 for more
details.
15. Goodwill and Intangible Assets
Goodwill and intangible assets are recorded within other non-current assets at cost less accumulated
amortization. Goodwill and intangible assets by major classes were:
Leasehold
Goodwill Acquisition Costs Other (a) Total
Feb. 3, Jan. 28, Feb. 3, Jan. 28, Feb. 3, Jan. 28, Feb. 3, Jan. 28,
(millions) 2007 2006 2007 2006 2007 2006 2007 2006
Gross asset $80 $80 $187 $182 $ 173 $ 205 $ 440 $ 467
Accumulated amortization (20) (20) (47) (70) (161) (194) (228) (284)
Net goodwill and intangible assets $60 $60 $140 $112 $12 $11 $ 212 $ 183
(a) Other intangible assets relate primarily to acquired trade names and customer lists.
Amortization is computed on intangible assets with definite useful lives using the straight-line method
over estimated useful lives that range from three to 39 years. During 2006, we adjusted the period over
which we amortize leasehold acquisition costs to match the expected terms for individual leases resulting in
a cumulative benefit to amortization expense of approximately $28 million. Amortization expense for 2006,
2005 and 2004 was $(13) million, $25 million and $27 million, respectively. The estimated aggregate
amortization expense of our definite-lived intangible assets for each of the five succeeding fiscal years is:
(millions) 2007 2008 2009 2010 2011
Amortization expense $13 $12 $10 $9 $9
Goodwill is not amortized. Instead, it is subject to an annual impairment test. Discounted cash flow
models are used in determining fair value for the purposes of the required annual impairment analysis. No
material impairments were recorded in 2006, 2005 or 2004 as a result of the tests performed.
16. Accounts Payable
We reclassify book overdrafts to accounts payable at period end. At February 3, 2007 and January 28,
2006, $652 million and $645 million of such overdrafts, respectively, were reclassified to accounts
payable.
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PART II