Sears 2008 Annual Report Download - page 84

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
NOTE 13—GOODWILL AND INTANGIBLE ASSETS
The following summarizes our intangible assets as of January 31, 2009 and February 2, 2008, respectively, the
amortization expenses recorded for the fiscal years then ended, as well as our estimated amortization expense for the next
five fiscal years and thereafter.
January 31, 2009 February 2, 2008
millions
Weighted
Average Life
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Amortized intangible assets
Favorable lease rights ............................. 21 $ 460 $164 $ 492 $147
Contractual arrangements and customer lists ........... 8 247 117 246 90
Trade names .................................... 8 75 29 62 21
782 310 800 258
Unamortized intangible assets
Trade names .................................... 2,811 — 2,811 —
Total .............................................. $3,593 $310 $3,611 $258
Aggregate Amortization Expense
Fiscal 2008 ................................................................ $ 84
Fiscal 2007 ................................................................ 90
Fiscal 2006 ................................................................ 87
Estimated Amortization
Fiscal 2009 ................................................................ $ 74
Fiscal 2010 ................................................................ 68
Fiscal 2011 ................................................................ 63
Fiscal 2012 ................................................................ 59
Fiscal 2013 ................................................................ 36
Thereafter ................................................................. 172
Goodwill is the excess of the purchase price over the fair value of the net assets acquired in business combinations
accounted for under the purchase method. We recorded $1.7 billion in goodwill in connection with the Merger. We recorded
$12 million in connection with our acquisition of an additional 3% interest in Sears Canada during fiscal 2008 and recorded
$167 million in connection with our acquisition of an additional 16% interest in Sears Canada during fiscal 2006.
Changes in the carrying amount of goodwill by segment during fiscal years 2007 and 2008 are as follows:
millions
Sears
Domestic
Sears
Canada Total
Balance, February 3, 2007 ........................................................ $1,434 $258 $1,692
Tax adjustments and other items affecting Merger-related goodwill ................... (6) — (6)
Balance, February 2, 2008 ........................................................ $1,428 $258 $1,686
Acquisition of additional interest in Sears Canada ................................. — 12 12
Impairment charges ......................................................... (262) — (262)
Tax adjustments affecting Merger-related goodwill ................................ (69) 25 (44)
Balance, January 31, 2009 ........................................................ $1,097 $295 $1,392
84