Note 2. Additional Financial Statement Information

Cash and Cash Equivalents and Short-Term Investments

Cash and cash equivalents and short-term investments consist of the following:



($ in millions)	February 2, 2013		January 28, 2012
Cash (1)	$	942	$	876
Bank certificates of deposit and time deposits	304		685
Money market funds	189		224
Domestic commercial paper	25		100
Cash equivalents	518		1,009
Cash and cash equivalents	$	1,460	$	1,885
Bank certificates of deposit and time deposits	$	50	$	—
Short-term investments	$	50	$	—

__________


(1)	Cash includes $71 million and $59 million of amounts in transit from banks for customer credit card and debit card transactions as of February 2, 2013 and January 28, 2012, respectively.

We did not record any impairment charges on our cash equivalents or short-term investments in fiscal 2012, 2011, or 2010.

Other Current Assets

Other current assets consist of the following:



($ in millions)	February 2, 2013		January 28, 2012
Accounts receivable	$	331	$	297
Current portion of deferred tax assets	220		205
Prepaid minimum rent and occupancy expenses	147		144
Prepaid income taxes	60		101
Derivative financial instruments	49		12
Prepaid catalog expenses	4		2
Restricted cash	—		6
Other	53		42
Other current assets	$	864	$	809

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and consist of the following:



($ in millions)	February 2, 2013			January 28, 2012
Leasehold improvements	$	3,131		$	3,168
Furniture and equipment	2,464			2,463
Land, buildings, and building improvements	1,101			1,096
Software	1,078			960
Construction-in-progress	136			96
Property and equipment, at cost	7,910			7,783
Less: Accumulated depreciation	(5,291		)	(5,260		)
Property and equipment, net of accumulated depreciation	$	2,619		$	2,523

Depreciation expense for property and equipment was $554 million, $586 million, and $639 million for fiscal 2012, 2011, and 2010, respectively.

Interest of $6 million and $4 million related to assets under construction was capitalized in fiscal 2012 and 2011, respectively. No interest related to assets under construction was capitalized in fiscal 2010.

We recorded a charge for the impairment of long-lived assets related to our Stores reportable segment of $8 million, $16 million, and $8 million for fiscal 2012, 2011, and 2010, respectively, which is recorded in operating expenses in the Consolidated Statements of Income.

Other Long-Term Assets

Other long-term assets consist of the following:



($ in millions)	February 2, 2013		January 28, 2012
Long-term income tax-related assets	$	244	$	258
Goodwill	184		99
Trade names	92		54
Lease rights, key money, and favorable lease assets, net of accumulated amortization of $144 and $140	31		22
Deferred compensation plan assets	27		22
Restricted cash	11		11
Other indefinite-lived intangible assets	6		—
Intangible assets subject to amortization, net of accumulated amortization of $15 and $14	3		1
Derivative financial instruments	2		1
Other	119		122
Other long-term assets	$	719	$	590

Both the cost and accumulated amortization of lease rights and key money are impacted by fluctuations in foreign currency exchange rates. Amortization expense associated with lease rights and key money was $4 million, $4 million, and $5 million in fiscal 2012, 2011, and 2010, respectively.

In connection with our acquisition of Intermix, we acquired favorable lease assets of $10 million which will be recognized as rent expense in cost of goods sold and occupancy expenses in the Consolidated Statements of Income over the remaining term of the leases. There was no material rent expense recognized related to the favorable lease assets in fiscal 2012.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:



($ in millions)	February 2, 2013		January 28, 2012
Accrued compensation and benefits	$	369	$	292
Unredeemed gift cards, gift certificates, and credit vouchers, net of breakage	232		228
Short-term deferred rent and tenant allowances	93		104
Insurance liabilities	72		70
Sales return allowance	27		21
Accrued advertising	26		26
Credit card reward points and certificates liability	18		14
Derivative financial instruments	14		14
Short-term asset retirement obligations	6		9
Short-term lease loss reserve	5		5
Other	230		215
Accrued expenses and other current liabilities	$	1,092	$	998

The activity related to short-term asset retirement obligations includes adjustments to the asset retirement obligation balance and fluctuations in foreign currency exchange rates. The activity was not material for fiscal 2012 or 2011.

No other individual items accounted for greater than five percent of total current liabilities as of February 2, 2013 or January 28, 2012.

Lease Incentives and Other Long-Term Liabilities

Lease incentives and other long-term liabilities consist of the following:



($ in millions)	February 2, 2013		January 28, 2012
Long-term deferred rent, tenant allowances, and unfavorable lease liabilities	$	750	$	705
Long-term income tax-related liabilities	132		129
Long-term asset retirement obligations	49		47
Deferred compensation plan liabilities	27		22
Long-term lease loss reserve	1		4
Other	27		26
Lease incentives and other long-term liabilities	$	986	$	933

The activity related to long-term asset retirement obligations includes adjustments to the asset retirement obligation balance and fluctuations in foreign currency exchange rates. The activity was not material for fiscal 2012 or 2011.

In connection with our acquisition of Intermix, we assumed unfavorable lease liabilities of $20 million as a result of leases with terms that were considered unfavorable relative to market terms for similar leases as of the date of acquisition. The unfavorable lease liabilities will be recognized as a reduction of rent expense in cost of goods sold and occupancy expenses in the Consolidated Statements of Income over the remaining term of the leases. There was no material amount recognized in cost of goods sold and occupancy expenses related to the unfavorable lease liabilities in fiscal 2012.

Accumulated Other Comprehensive Income

Accumulated OCI consists of the following:



($ in millions)	February 2, 2013		January 28, 2012
Foreign currency translation, net of tax	$	158	$	229
Accumulated changes in fair value of derivative financial instruments, net of tax	23		—
Accumulated other comprehensive income	$	181	$	229

Sales Return Allowance

A summary of activity in the sales return allowance account is as follows:



($ in millions)	February 2, 2013			January 28, 2012			January 29, 2011
Balance at beginning of fiscal year	$	21		$	22		$	22
Additions	845			720			712
Returns	(839		)	(721		)	(712		)
Balance at end of fiscal year	$	27		$	21		$	22

The amount of additions and returns for fiscal 2011 have been corrected in the table above to $720 million and $721 million, respectively, to appropriately reflect sales return allowance activities during fiscal 2011. This correction did not have any impact on the Consolidated Financial Statements for any period reported.