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14. Goodwill and Intangible Assets
Goodwill and intangible assets are recorded within other noncurrent assets at cost less accumulated
amortization. Goodwill totaled $60 million at February 2, 2008 and February 3, 2007. 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 2007, 2006 or 2005 as a result of the tests performed. Intangible assets by major classes
were as follows:
Leasehold
Intangible Assets Acquisition Costs Other (a) Total
Feb. 2, Feb. 3, Feb. 2, Feb. 3, Feb. 2, Feb. 3,
(millions) 2008 2007 2008 2007 2008 2007
Gross asset $181 $187 $111 $ 173 $ 292 $ 360
Accumulated amortization (52) (47) (92) (161) (144) (208)
Net intangible assets $129 $140 $19 $12 $ 148 $ 152
(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 2007, 2006
and 2005 was $15 million, $(13) million and $25 million, respectively. The estimated aggregate amortization
expense of our definite-lived intangible assets for each of the five succeeding fiscal years is as follows:
Amortization Expense
(millions) 2008 2009 2010 2011 2012
Amortization expense $17 $14 $10 $8 $8
15. Accounts Payable
We reclassify book overdrafts to accounts payable at period end. At February 2, 2008 and February 3,
2007, $588 million and $652 million of such overdrafts, respectively, were reclassified to accounts payable.
16. Accrued and Other Current Liabilities
Accrued and Other Current Liabilities February 2, February 3,
(millions) 2008 2007
Wages and benefits $ 727 $ 674
Taxes payable (a) 400 450
Gift card liability (b) 372 338
Construction in process accrual 228 191
Deferred compensation 176 46
Workers’ compensation and general liability 164 154
Interest payable 153 122
Straight-line rent accrual 152 135
Dividends payable 115 103
Income taxes payable 111 422
Other 499 545
Total $3,097 $3,180
(a) Taxes payable consist of real estate, team member withholdings and sales tax liabilities.
(b) Gift card liability represents the amount of gift cards that have been issued but have not been redeemed, net of estimated breakage.
17. Commitments and Contingencies
At February 2, 2008, our obligations included notes and debentures of $16,726 million (further described
in Note 18), excluding swap fair market value adjustments. At February 2, 2008, capital lease obligations were
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PART II