Target 2011 Annual Report Download - page 68

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16. Accounts Payable
At January 28, 2012 and January 29, 2011, we reclassified book overdrafts of $575 million and $558 million,
respectively, to accounts payable.
17. Accrued and Other Current Liabilities
Accrued and Other Current Liabilities January 28, January 29,
(millions) 2012 2011
Wages and benefits $ 898 $ 921
Real estate, sales and other taxes payable 547 497
Gift card liability (a) 467 422
Income tax payable 257 144
Straight-line rent accrual (b) 215 200
Dividends payable 202 176
Workers’ compensation and general liability (c) 164 158
Interest payable 109 103
Other 785 705
Total $3,644 $3,326
(a) Gift card liability represents the amount of unredeemed gift cards, net of estimated breakage.
(b) Straight-line rent accrual represents the amount of rent expense recorded that exceeds cash payments remitted in connection with
operating leases.
(c) See footnote (a) to the Other Noncurrent Liabilities table on page 50 for additional detail.
18. Commitments and Contingencies
Purchase obligations, which include all legally binding contracts, such as firm commitments for inventory
purchases, merchandise royalties, equipment purchases, marketing-related contracts, software acquisition/license
commitments and service contracts, were $1,396 million and $1,907 million at January 28, 2012 and January 29,
2011, respectively. 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. If we choose to
cancel a purchase order, we may be obligated to reimburse the vendor for unrecoverable outlays incurred prior to
cancellation. We also issue trade letters of credit in the ordinary course of business, which are not obligations given
they are conditioned on terms of the letter of credit being met.
Trade letters of credit totaled $1,516 million and $1,522 million at January 28, 2012 and January 29, 2011,
respectively, a portion of which are reflected in accounts payable. Standby letters of credit, relating primarily to
retained risk on our insurance claims, totaled $66 million and $71 million at January 28, 2012 and January 29, 2011,
respectively.
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 will be
material to our results of operations, cash flows or financial condition.
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