Target 2007 Annual Report Download - page 52

$232 million and total future minimum payments of operating leases were $3,694 million. The amount of future
contractual lease payments includes certain options for lease term extension that are reasonably assured of
being exercised in the amount of $1,721 million and $98 million of legally binding minimum lease payments for
stores that will open in 2008 or later (see additional detail in Note 21). Deferred compensation obligations were
$662 million at February 2, 2008. In addition, real estate obligations, including commitments for the purchase,
construction or remodeling of real estate and facilities, were approximately $1,078 million at February 2, 2008.
Purchase obligations, which include all legally binding contracts such as firm commitments for inventory
purchases, merchandise royalties, purchases of equipment, marketing-related contracts, software
acquisition/license commitments and service contracts, were approximately $663 million at February 2, 2008.
We issue inventory purchase orders, which represent authorizations to purchase that are cancelable by their
terms. We do not consider purchase orders to be firm inventory commitments. We also issue trade letters of
credit in the ordinary course of business, which are not firm commitments as they are conditional on the
purchase order not being cancelled. If we choose to cancel a purchase order, we may be obligated to
reimburse the vendor for unrecoverable outlays incurred prior to cancellation under certain circumstances.
Trade letters of credit totaled $1,861 million at February 2, 2008, a portion of which is in accounts payable.
Standby letters of credit, relating primarily to retained risk on our insurance claims, totaled $69 million at
February 2, 2008.
We are exposed to claims and litigation arising in the ordinary course of business and use various
methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and
other constituents. We believe the recorded reserves in our consolidated financial statements are adequate in
light of the probable and estimable liabilities. We do not believe that any of the currently identified claims or
litigation matters will have a material adverse impact on our results of operations, cash flows or financial
condition.
18. Notes Payable and Long-Term Debt
We obtain short-term financing throughout the year under our commercial paper program, a form of
notes payable. Information on this program is as follows:
Commercial Paper
(dollars in millions) 2007 2006
Maximum amount outstanding during the year $1,589 $957
Average amount outstanding during the year $ 404 $273
Amount outstanding at year-end $— $—
Weighted average interest rate 5.2% 5.3%
In April 2007, we entered into a five-year $2 billion unsecured revolving credit facility with a group of
banks. The new facility replaced our existing credit agreement and will expire in 2012. No balances were
outstanding at any time during 2007 or 2006 under this or previously existing revolving credit facilities.
We issued various long-term, unsecured debt instruments during 2007 and 2006. Information on these
transactions is as follows:
Issuance of Long-Term Unsecured Debt
(dollars in millions) Amount
2006
5.875% notes due July 2016 $ 750
2007
5.375% notes due May 2017 $1,000
LIBOR plus .125% floating rates notes due August 2009 500
6.5% notes due October 2037 1,250
5.125% notes due January 2013 500
6.0% notes due January 2018 1,250
7.0% notes due January 2038 2,250
Total for 2007 $6,750
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