Macy's 2008 Annual Report Download - page 72

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company is a guarantor with respect to certain lease obligations associated with businesses divested by
May prior to the Merger. The leases, one of which includes potential extensions to 2087, have future minimum
lease payments aggregating approximately $666 million and are offset by payments from existing tenants and
subtenants. In addition, the Company is liable for other expenses related to the above leases, such as property
taxes and common area maintenance, which are also payable by existing tenants and subtenants. Potential
liabilities related to these guarantees are subject to certain defenses by the Company. The Company believes that
the risk of significant loss from the guarantees of these lease obligations is remote.
Rental expense consists of:
2008 2007 2006
(millions)
Real estate (excluding executory costs)
Capitalized leases –
Contingent rentals ..................................................$1$1$1
Operating leases –
Minimum rentals ................................................... 230 221 221
Contingent rentals .................................................. 16 18 23
247 240 245
Less income from subleases –
Operating leases ................................................... (15) (14) (9)
$232 $226 $236
Personal property – Operating leases ........................................... $ 19 $ 15 $ 15
10. Goodwill and Other Intangible Assets
The following summarizes the Company’s goodwill and other intangible assets:
January 31,
2009
February 2,
2008
(millions)
Non-amortizing intangible assets
Goodwill ................................................. $3,743 $9,133
Tradenames ............................................... 414 477
$4,157 $9,610
Amortizing intangible assets
Favorable leases ........................................... $ 264 $ 271
Customer relationships ...................................... 188 188
452 459
Accumulated amortization
Favorable leases ........................................... (83) (60)
Customer relationships ...................................... (64) (45)
(147) (105)
$ 305 $ 354
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