Target 2010 Annual Report Download - page 72

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Changes in fair value measurements are a component of net interest expense on the Consolidated Statements of
Operations.
Outstanding Interest Rate Swap Summary
(dollars in millions)
January 29, 2011
Pay Floating Pay Fixed
Weighted average rate:
Pay one-month LIBOR 2.6% fixed
Receive 5.0% fixed one-month LIBOR
Weighted average maturity 3.4 years 3.4 years
Notional $1,250 $1,250
Derivative Contracts – Types, Balance Sheet Classifications and Fair Values
(millions)
Asset Liability
Fair Value At Fair Value At
Jan. 29, Jan. 30, Jan. 29, Jan. 30,
Type Classification 2011 2010 Classification 2011 2010
Not designated as hedging
instruments:
Interest rate swaps Other noncurrent assets $139 $131 Other noncurrent $54 $23
liabilities
Total $139 $131 $54 $23
Periodic payments, valuation adjustments and amortization of gains or losses from the termination or
de-designation of derivative contracts are summarized below:
Derivative Contracts – Effect on Results of Operations
(millions)
Income/(Expense)
Type Classification 2010 2009 2008
Interest rate swaps Other interest expense $51 $65 $71
Total $51 $65 $71
21. Leases
We lease certain retail locations, warehouses, distribution centers, office space, land, equipment and software.
Assets held under capital leases are included in property and equipment. Operating lease rentals are expensed on
a straight-line basis over the life of the lease beginning on the date we take possession of the property. At lease
inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably
assured. The exercise of lease renewal options is at our sole discretion. The expected lease term is used to
determine whether a lease is capital or operating and is used to calculate straight-line rent expense. Additionally,
the depreciable life of leased buildings and leasehold improvements is limited by the expected lease term.
Rent expense is included in SG&A expenses. Some of our lease agreements include rental payments based on
a percentage of retail sales over contractual levels. Certain leases require us to pay real estate taxes, insurance,
maintenance and other operating expenses associated with the leased premises. These expenses are classified in
50