Target 2008 Annual Report Download - page 39

open in 2009 and later years. Net property and equipment increased $1,661 million in 2008 following an
increase of $2,664 million in 2007.
Percentage of Capital Expenditures
Capital Expenditures
2008 2007 2006
New stores 66% 71% 61%
Remodels and expansions 8712
Information technology, distribution and other 26 22 27
Total 100% 100% 100%
Commitments and Contingencies
At January 31, 2009, our contractual obligations were as follows:
Contractual Obligations Payments Due by Period
Less than 1-3 3-5 After 5
(millions) Total 1 Year Years Years Years
Long-term debt (a)
Unsecured $ 12,875 $ 1,251 $ 1,443 $ 2,002 $ 8,179
Nonrecourse 5,725 — 900 4,825 —
Interest payments – long-term
debt
Unsecured 11,210 761 1,373 1,136 7,940
Nonrecourse (b) 265 56 105 104 —
Capital lease obligations 253 30 41 44 138
Operating leases (c) 3,857 245 373 289 2,950
Deferred compensation 389 84 54 57 194
Real estate obligations 377 377 — — —
Purchase obligations 570 441 111 10 8
Tax contingencies (d) 140 73 67 — —
Contractual obligations $ 35,661 $ 3,318 $ 4,467 $ 8,467 $ 19,409
(a) Required principal payments only. Excludes Statement of Financial Accounting Standards No. 133, ‘‘Accounting for Derivative
Instruments and Hedging Activities,’’ fair market value adjustments recorded in long-term debt. Principal amounts include the
47 percent interest in credit card receivables sold to JPMC at the principal amount.
(b) These payments vary with LIBOR and are calculated assuming LIBOR of 0.5 percent plus a spread, for each year outstanding.
(c) Total contractual lease payments include $1,830 million of lease payments related to options to extend the lease term that are
reasonably assured of being exercised and also includes $164 million of legally binding minimum lease payments for stores opening
in 2009 or later. Refer to Note 21 for a further description of leases.
(d) Estimated tax contingencies of $447 million, including interest and penalties, are not included in the table above because we are not
able to make reasonably reliable estimates of the period of cash settlement.
Real estate obligations include commitments for the purchase, construction or remodeling of real estate
and facilities. Purchase obligations include all legally binding contracts such as firm minimum commitments
for inventory purchases, merchandise royalties, equipment purchases, marketing-related contracts, software
acquisition/license commitments and service contracts.
We issue inventory purchase orders in the normal course of business, which represent authorizations to
purchase that are cancelable by their terms. We do not consider purchase orders to be firm inventory
commitments; therefore, they are excluded from the table above. We also issue trade letters of credit in the
ordinary course of business, which are excluded from this table as these obligations 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.
We have not included obligations under our pension and postretirement health care benefit plans in the
contractual obligations table above. Our historical practice regarding these plans has been to contribute
amounts necessary to satisfy minimum pension funding requirements, plus periodic discretionary amounts
determined to be appropriate. Further information on these plans, including our expected contributions for
2009, is included in Note 27.
We do not have any arrangements or relationships with entities that are not consolidated into the financial
statements that are reasonably likely to materially affect our liquidity or the availability of capital resources.
19
PART II