Target 2011 Annual Report Download - page 72

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Total capital lease interest expense was $69 million in 2011 (including $44 million of interest expense on
Canadian capitalized leases), $16 million in 2010, and $10 million in 2009 and is included within other interest
expense on the Consolidated Statements of Operations.
Most long-term leases include one or more options to renew, with renewal terms that can extend the lease term
from one to 50 years. Certain leases also include options to purchase the leased property. Assets recorded under
capital leases as of January 28, 2012 and January 29, 2011 were $1,752 million and $380 million, respectively.
Future Minimum Lease Payments
(millions) Operating Leases (a) Capital Leases (b) Sublease Income Total
2012 $ 194 $ 122 $ (84) $ 232
2013 197 118 (12) 303
2014 157 123 (6) 274
2015 151 121 (5) 267
2016 144 120 (4) 260
After 2016 3,045 3,736 (71) 6,710
Total future minimum lease payments $3,888 $ 4,340 $ (182) $8,046
Less: Interest (c) (2,651)
Present value of future minimum capital lease payments (d) $ 1,689
(a) Total contractual lease payments include $1,910 million related to options to extend lease terms that are reasonably assured of being
exercised and also includes $171 million of legally binding minimum lease payments for stores that are expected to open in 2012 or later.
(b) Capital lease payments include $2,894 million related to options to extend lease terms that are reasonably assured of being exercised.
(c) Calculated using the interest rate at inception for each lease.
(d) Includes the current portion of $22 million.
The acquisition of leasehold interests in Canada contributed additional discounted future minimum capital
lease payments of $1.3 billion, reflected in the table above.
22. Income Taxes
Tax Rate Reconciliation 2011 2010 2009
Federal statutory rate 35.0% 35.0% 35.0%
State income taxes, net of the federal tax benefit 1.0 1.4 2.8
International (0.7) (0.6) (0.3)
Other (1.0) (0.7) (1.8)
Effective tax rate 34.3% 35.1% 35.7%
Certain discrete state income tax items reduced our effective tax rate by 2.0 percentage points, 2.4 percentage
points and 0.7 percentage points in 2011, 2010 and 2009, respectively.
Provision for Income Taxes
(millions) 2011 2010 2009
Current:
Federal $1,069 $1,086 $ 877
State 74 40 141
International 13 42
Total current 1,156 1,130 1,020
Deferred:
Federal 427 388 339
State —57 25
International (56) ——
Total deferred 371 445 364
Total provision $1,527 $1,575 $1,384
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