Target 2006 Annual Report Download - page 57

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During the year ended January 29, 2005, $566 million of the proceeds attributable to the real
properties sold in the Marshall Field’s and Mervyn’s dispositions were used to acquire replacement
properties that are being used in our business. $373 million of the gain related to the sold real properties
was deferred for income tax purposes as allowed by Section 1031 of the Internal Revenue Code until the
replacement properties are disposed.
In 2006 the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48).
FIN 48 prescribes the financial statement recognition and measurement criteria for tax positions taken in a
tax return, clarifies when tax benefits should be recorded and how they should be classified in financial
statements, and requires certain disclosures of uncertain tax matters. We will adopt the provisions of FIN 48
at the beginning of fiscal 2007. We are presently evaluating the impact of the adoption of FIN 48 on our
results of operations and financial position.
24. Other Non-Current Liabilities
February 3, January 28,
(millions) 2007 2006
Deferred compensation $ 645 $ 596
Workers’ compensation and general liability 418 362
Other 284 274
Total $1,347 $1,232
We retain a substantial portion of the risk related to certain general liability and workers’ compensation
claims. Liabilities associated with these losses include estimates of both claims filed and losses incurred but
not yet reported. We estimate our ultimate cost based on analysis of historical data and actuarial estimates.
General liability and workers’ compensation liabilities are recorded at our estimate of their net present
value.
25. Share Repurchase
In June 2004, our Board of Directors authorized the repurchase of $3 billion of our common stock. In
November 2005, our Board increased the aggregate authorization by $2 billion, for a total authorization of
$5 billion. Share repurchases for the last three years, repurchased primarily through open market
transactions, were as follows:
Share Repurchases
Total Number of Average Price
(millions, except per share data) Shares Purchased Paid per Share Total Investment
2004 28.4 $44.77 $1,276
2005 23.1 51.88 1,197
2006 19.5 50.16 977
Total program-to-date 71.0 $48.56 $3,450
Of the shares reacquired in 2006, a portion was delivered upon settlement of prepaid forward
contracts. The prepaid forward contracts settled in 2006 had a total cash investment of $76 million and an
aggregate market value of $88 million at their respective settlement dates. The prepaid forward contracts
settled in 2005 had a total cash investment of $65 million and an aggregate market value of $79 million at
their respective settlement dates. The prepaid forward contracts settled in 2004 had a total cash investment
of $17 million and an aggregate market value of $21 million at their respective settlement dates. These
contracts are among the investment vehicles used to reduce our economic exposure related to our
nonqualified deferred compensation plans. The details of our long positions in prepaid forward contracts
have been provided in Note 27.
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PART II