Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 3, 2018, are available here. This material is also available under the Investor Relations link at the company's website (www.target.com). Target leases most of its facilities. 3. New lease accounting guidance will require companies to report a liability for operating leases at present value as well as for capital leases (now called finance leases). If Target had used the new lease accounting guidance in its fiscal 2017 financial statements, what would be the amount reported as a liability for operating leases? Hint: Assume the payments "after 2020" are to be paid evenly over a 16 years period and all payments are at the end of years Indicated. Target Indicates elsewhere in its financial statements that 6% is an appropriate discount rate for its leases. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in millions (i.e.,10,00,000 should be entered as 10). Round your answer to the nearest whole number.) Present Value of the Lease Total capital lease interest expense was $55 million, $49 million, and $42 million in 2017, 2016, and 2015, respectively, and is included within Net Interest Expense on the Consolidated Statements of Operations. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years or more. Certain leases also include options to purchase the leased property. Assets recorded under capital leases as of February 3, 2018 and January 28, 2017 were $1,004 million and $888 million, respectively. These assets are recorded net of accumulated amortization of $295 million and $406 million as of February 3, 2018 and January 28, 2017, respectively. Future Minimum Lease Payments (millions) 2018 2019 2020 2021 2022 After 2022 Total future minimum lease payments (c) Less: Interest Present value of future minimum capital lease payments (b) SA (C) (d) (a) 227 $ 234 226 222 217 3,027 4,153 $ Operating Leases (b) Capital Leases Rent Income (25) $ (25) (24) (23) (23) 92 $ 96 97 96 96 1,524 2,001 $ 849 (307) (427) $ 1,152 Note: Minimum lease payments exclude payments to landlords for real estate taxes and common area maintenance. Minimum lease payments also exclude payments to landlords for fixed purchase options which we believe are reasonably assured of being exercised. (a) Total contractual lease payments include $1,987 million related to options to extend lease terms that are reasonably assured of being exercised and also includes $386 million of legally binding minimum lease yments for stores that are expected to open in 2018 or later. Capital lease payments include $604 million related to options to extend lease terms that are reasonably assured of being exercised and also includes $244 million of legally binding minimum lease payments for stores that are expected to open in 2018 or later. Calculated using the interest rate at inception for each lease. Includes the current portion of $68 million. Total 294 305 299 295 290 4,244 5,727