Target 2011 Annual Report Download - page 51

this same discount rate has also been used to determine net pension and postretirement health care benefits
expense for the following plan year. Benefits expense recorded during the year is partially dependent upon the
discount rates used, and a 0.5 percentage point decrease to the weighted average discount rate used to determine
net pension and postretirement health care benefits expense would increase annual expense by $25 million.
Based on our experience, we use a graduated compensation growth schedule that assumes higher
compensation growth for younger, shorter-service pension-eligible team members than it does for older, longer-
service pension-eligible team members.
Pension and postretirement health care benefits are further described in Note 27 of the Notes to Consolidated
Financial Statements.
Legal contingencies 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. Historically, adjustments to our estimates have not been material. 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. However, litigation is subject to inherent uncertainties,
and unfavorable rulings could occur. If an unfavorable ruling were to occur, there may be a material adverse impact
on the results of operations, cash flows or financial condition for the period in which the ruling occurs, or future
periods.
New Accounting Pronouncements
We do not expect that any recently issued accounting pronouncements will have a material effect on our
financial statements, although we will be presenting a separate Statement of Comprehensive Income in
accordance with Accounting Standard Update 2011-05, ‘‘Comprehensive Income (Topic 220)’’ beginning in 2012.
Forward-Looking Statements
This report contains forward-looking statements, which are based on our current assumptions and
expectations. These statements are typically accompanied by the words ‘‘expect,’’ ‘‘may,’’ ‘‘could,’’ ‘‘believe,’’
‘‘would,’’ ‘‘might,’’ ‘‘anticipates,’’ or words of similar import. The principal forward-looking statements in this report
include: For our U.S. Credit Card Segment, aggregate portfolio risks and the level of, the allowance for doubtful
accounts, anticipated segment profit, and the pursuit and timing of a portfolio sale; for our Canadian Segment, our
performance, timing and amount of future capital investments in Canada; on a consolidated basis, statements
regarding the adequacy of and costs associated with our sources of liquidity, the continued execution of our share
repurchase program and the expected duration of the approved programs, our expected capital expenditures, the
expected effective income tax rate, the expected compliance with debt covenants, the expected impact of new
accounting pronouncements, our intentions regarding future dividends, contributions related to our pension and
postretirement health care plans, the expected returns on pension plan assets, the impact of future changes in
foreign currency, the effects of macroeconomic conditions, the adequacy of our reserves for general liability,
workers’ compensation, property loss, the expected outcome of claims and litigation, the expected ability to
recognize deferred tax assets and liabilities, including foreign net operating loss carryforwards, and the resolution
of tax matters.
All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Although we believe
there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The
most important factors which could cause our actual results to differ from our forward-looking statements are set
forth on our description of risk factors in Item 1A to this Form 10-K, which should be read in conjunction with the
forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and
we do not undertake any obligation to update any forward-looking statement.
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PART II