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)(FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use approprlate factor(s) from the tables provided.) Required: In its Analysis of "Financial Condition: New Accounting Pronouncements." Target's financial statements for the year ended February 3. 2018, the company indicates that In February 2016, the FASB issued ASU No. 2016-02. Leases, to require organizations that lease assets to recognize the rights and obligations created by those leases on the balance sheet. The new standard is effective in 2019. Refer to Note 22: Leases. New lease accounting guidance requires companies to record a right-of-use asset and a lease liability for all leases, with the exception of short-term leases, at present value. If Target had used the new lease accounting guidance in its fiscal 2017 (February 3, 2018) financial statements, what would be the amount reported as a liability for its leases, operating and capital (finance) combined ? (Do not round Intermedlate calculations. Enter your answers to nearest millions. Round final answer to the nearest whole value.) Hint: Assume the payments "after 2020" are to be paid evenly over a 16-year 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. Amount reported as a liability for its leases combined million TABLE 1 Future Value of $1 FV = $1(1 + i)" ni 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 2 3 4 5 1.01000 1.02010 1.03030 1.04060 1.05101 1.01500 1.03022 1.04568 1.06136 1.07728 1.02000 1.04040 1.06121 1.08243 1.10408 1.02500 1.03000 1.05063 1.06090 1.07689 1.09273 1.10381 1.12551 1.13141 1.15927 1.03500 1.04000 1.07123 1.08160 1.10872 1.12486 1.14752 1.16986 1.18769 1.21665 1.04500 1.09203 1.14117 1.19252 1.24618 1.05000 1.10250 1.15763 1.21551 1.27628 1.05500 1.11303 1.17424 1.23882 1.30696 1.06000 1.12360 1.19102 1.26248 1.33823 1.07000 1.14490 1.22504 1.31080 1.40255 1.08000 1.16640 1.25971 1.36049 1.46933 1.09000 1.18810 1.29503 1.41158 1.53862 1.10000 1.21000 1.33100 1.46410 1.61051 1.11000 1.23210 1.36763 1.51807 1.68506 1.12000 1.25440 1.40493 1.57352 1.76234 1.20000 1.44000 1.72800 2.07360 2.48832 6 7 8 9 10 1.06152 1.07214 1.08286 1.09369 1.10462 1.09344 1.10984 1.12649 1.14339 1.16054 1.12616 1.15969 1.19405 1.14869 1.18869 1.22987 1.17166 1.21840 1.26677 1.19509 1.24886 1.30477 1.21899 1.28008 1.34392 1.22926 1.26532 1.27228 131593 1.31681 1.36857 1.36290 1.42331 1.41060 1.48024 1.30226 1.36086 1.42210 1.48610 1.55297 1.34010 1.40710 1.47746 1.55133 1.62889 1.37884 1.41852 1.45468 1.50363 1.53469 1.59385 1.619091.68948 1.70814 1.79085 1.50073 1.60578 1.71819 1.83846 1.96715 1.58687 1.71382 1.85093 1.99900 2.15892 1.67710 1.77156 1.82804 1.94872 1.99256 2.14359 2.171892.35795 2.36736 2.59374 1.87041 2.07616 2.30454 2.55804 2.83942 1.97382 2.21068 2.47596 2.77308 3.10585 2.98598 3.58318 4.29982 5.15978 6.19174 11 12 13 14 15 1.11567 1.17795 1.12683 1.19562 1.13809 1.21355 1.14947 1.23176 1.16097 1.25023 1.24337 1.31209 1.26824 1.34489 1.29361 1.37851 131948 1.41297 1.34587 1.44830 1.38423 1.42576 1.46853 1.51259 1.55797 1.45997 1.51107 1.56396 1.61869 1.67535 1.53945 1.62285 1.71034 1.802091.89830 1.60103 1.69588 1.79586 1.90121 2.01220 1.66507 1.77220 1.88565 2.00577 2.13293 1.73168 1.85194 1.97993 2.11609 2.26090 1.80094 1.93528 2.07893 2.23248 2.39656 2.10485 2.25219 2.40985 2.57853 2.75903 2.33164 2.51817 2.71962 2.93719 3.17217 2.58043 2.81266 3.06580 3.34173 3.64248 2.85312 3.13843 3.45227 3.79750 4.17725 3.15176 3.47855 3.49845 3.89598 3.88328 4.36349 4.31044 4.88711 4.784595.47357 7.43008 8.91610 10.69932 12.83918 15.40702 16 17 18 19 20 1.17258 1.26899 1.18430 1.28802 1.19615 1.30734 1.20811 1.32695 1.22019 1.34686 1.37279 1.40024 1.42825 1.45681 1.48595 1.48451 1.52162 1.55966 1.59865 1.63862 1.60471 1.65285 1.70243 1.75351 1.80611 1.73399 1.87298 2.02237 2.18287 2.35526 1.79468 1.94790 2.11338 2.29202 2.48480 1.85749 2.02582 2.20848 2.40662 2.62147 1.92250 2.10685 2.30786 2.52695 2.76565 1.98979 2.19112 2.41171 2.65330 2.91776 2.54035 2.69277 2.85434 3.02560 3.20714 2.95216 3.15882 3.37993 3.61653 3.86968 3.42594 3.70002 3.99602 4.31570 4.66096 3.97031 4.32763 4.71712 5.14166 5.60441 4.59497 5.05447 5.55992 6.11591 6.72750 5310896.13039 5.895096.86604 6.54355 7.68997 7.26334 8.61276 8.06231 9.64629 18.48843 22.18611 26.62333 31.94800 38.33760 21 1.23239 1.36706 1.51567 1.67958 1.86029 2.059432.27877 2.52024 2.78596 3.07823 3.39956 25 1.28243 1.45095 1.64061 1.85394 2.09378 2.36324 2.66584 3.00543 3.38635 3.813394.29187 30 1.34785 1.56308 1.81136 2.09757 2.42726 2.80679 3.24340 3.74532 4.32194 4.98395 5.74349 40 1.48886 1.81402 2.20804 2.68506 3.26204 3.95926 4.80102 5.81636 7.03999 8.51331 10.28572 4.14056 5.03383 6.10881 5.42743 6.84848 8.62308 7.61226 10.06266 13.26768 14.97446 21.72452 31.40942 7.40025 10.83471 17.44940 45.25926 8.94917 13.58546 22.89230 65.00087 10.80385 17.00006 29.95992 93.05097 46.00512 95.39622 237.37631 1469.77160 TABLE 2 Present Value of $1 $1 PV = 11 + i) W 1 2 3 4 5 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94787 0.94340 0.98030 0.97066 0.96117 0.95181 0.94260 0.93351 0.92456 0.91573 0.90703 0.89845 0.89000 0.97059 0.95632 0.94232 0.92860 0.91514 0.90194 0.88900 0.87630 0.86384 0.85161 0.83962 0.96098 0.94218 0.92385 0.90595 0.88849 0.87144 0.85480 0.83856 0.82270 0.80722 0.79209 0.95147 0.92826 0.90573 0.88385 0.86261 0.84197 0.82193 0.80245 0.78353 0.76513 0.74726 7.0% 0.93458 0.87344 0.81630 0.76290 0.71299 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 0.92593 0.91743 0.90909 0.90090 0.89286 0.83333 0.85734 0.84168 0.82645 0.81162 0.79719 0.69444 0.79383 0.77218 0.75131 0.73119 0.71178 0.57870 0.73503 0.70843 0.68301 0.65873 0.63552 0.48225 0.68058 0.64993 0.62092 0.59345 0.56743 0.40188 6 0.94205 0.91454 0.88797 0.86230 0.83748 0.81350 0.79031 0.76790 0.74622 0.72525 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.33490 7 0.93272 0.90103 0.87056 0.84127 0.81309 0.78599 0.75992 0.73483 0.71068 0.68744 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.27908 8 0.92348 0.88771 0.85349 0.82075 0.78941 0.75941 0.73069 0.70319 0.67684 0.65160 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.23257 9 0.91434 0.87459 0.83676 0.80073 0.76642 0.73373 0.70259 0.67290 0.64461 0.61763 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.19381 10 0.90529 0.86167 0.82035 0.78120 0.74409 0.70892 0.67556 0.64393 0.61391 0.58543 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.16151 11 0.89632 0.84893 0.80426 0.76214 0.72242 0.68495 0.64958 0.61620 12 0.88745 0.83639 0.78849 0.74356 0.70138 0.66178 0.62460 0.58966 13 0.87866 0.82403 0.77303 0.72542 0.68095 0.63940 0.60057 0.56427 14 0.86996 0.81185 0.75788 0.70773 0.66112 0.61778 0.57748 0.53997 15 0.86135 0.79985 0.74301 0.69047 0.64186 0.59689 0.55526 0.51672 0.58468 0.55491 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.13459 0.55684 0.52598 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 0.11216 0.53032 0.49856 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.09346 0.50507 0.47257 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.07789 0.48102 0.44793 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.06491 16 0.85282 0.78803 0.72845 0.67362 0.62317 0.57671 0.53391 0.49447 0.45811 0.42458 0.39365 0.33873 17 0.84438 0.77639 0.71416 0.65720 0.60502 0.55720 0.51337 0.47318 0.43630 0.40245 0.37136 0.31657 18 0.83602 0.76491 0.70016 0.64117 0.58739 0.53836 0.49363 0.45280 0.41552 0.38147 0.35034 0.29586 19 0.82774 0.75361 0.68643 0.62553 0.57029 0.52016 0.47464 0.43330 0.39573 0.36158 0.33051 0.27651 20 0.81954 0.74247 0.67297 0.61027 0.55368 0.50257 0.45639 0.41464 0.37689 0.34273 0.31180 0.25842 0.29189 0.25187 0.21763 0.18829 0.16312 0.05409 0.27027 0.23107 0.19784 0.16963 0.14564 0.04507 0.25025 0.21199 0.17986 0.15282 0.13004 0.03756 0.23171 0.19449 0.16351 0.13768 0.11611 0.03130 0.21455 0.17843 0.14864 0.12403 0.10367 0.02608 21 0.81143 0.73150 0.65978 0.59539 0.53755 0.48557 0.43883 0.39679 0.35894 0.32486 0.29416 0.24151 0.19866 0.16370 0.13513 0.11174 0.09256 0.02174 24 0.78757 0.69954 0.62172 0.55288 0.49193 0.43796 0.39012 0.34770 0.31007 0.27666 0.24698 0.19715 0.15770 0.12640 0.10153 0.08170 0.06588 0.01258 25 0.77977 0.68921 0.609530.53939 0.47761 0.42315 0.37512 0.33273 0.29530 0.26223 0.233000.18425 0.14602 0.11597 0.09230 0.07361 0.05882 0.01048 28 0.75684 0.65910 0.57437 0.50088 0.43708 0.38165 0.33348 0.29157 0.25509 0.22332 0.19563 0.15040 0.11591 0.08955 0.06934 0.05382 0.04187 0.00607 29 0.74934 0.64936 0.56311 0.48866 0.42435 0.36875 0.32065 0.27902 0.24295 0.21168 0.18456 0.14056 0.10733 0.08215 0.06304 0.048490.03738 0.00506 30 0.74192 0.63976 0.55207 0.47674 0.41199 0.35628 0.30832 0.26700 0.23138 0.20064 0.17411 0.13137 0.09938 0.07537 0.05731 0.04368 0.03338 0.00421 31 0.73458 0.63031 0.54125 0.46511 0.39999 0.34423 0.29646 0.25550 0.22036 0.19018 0.16425 0.12277 0.09202 0.06915 0.05210 0.03935 0.02980 0.00351 40 0.67165 0.55126 0.45289 0.37243 0.30656 0.25257 0.20829 0.17193 0.14205 0.11746 0.09722 0.06678 0.04603 0.03184 0.02209 0.01538 0.01075 0.00068 TABLE 3 Future Value of an Ordinary Annuity of $1 FVA (1 + i)" - 1 ni 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 0.0% 0.0% 11.0% 12.0% 20.0% 1.0000 1 2 3 4 5 1.0000 2.0100 3.0301 4.0604 5.1010 1.0000 1.0000 2.0150 2.0200 3.0452 3.0604 4.09094.1216 5.1523 5.2040 1.0000 2.0250 3.0756 4.1525 5.2563 1.000 2.0300 3.0909 4.1836 5.3091 1.0000 1.000 2.0350 2.0400 3.1062 3.1216 4.21494.2465 5.3625 5.4163 1.000 1.0000 2.0450 2.0500 3.13703.1525 1.0000 1.000 2.0550 2.0600 3.16803.1836 4.3423 4.3746 5.5811 5.6371 1.0000 1.000 2.0700 2.0800 3.21493.2464 4.4399 4.5061 5.7507 5.8666 1.000 2.0900 3.2781 4.5731 5.9847 1.0000 2.1000 3.3100 4.6410 6.1051 1.000 2.1100 3.3421 4.7097 6.2278 1.0000 2.1200 3.3744 4.7793 6.3528 2.2000 3.6400 5.3680 5.4707 5.5256 7.4416 9.9299 12.9159 6 7 8 9 10 6.1520 7.2135 8.2857 9.3685 10.4622 6.2296 7.3230 8.4328 9.5593 10.7027 6.3081 7.4343 8.5830 9.7546 10.9497 6.3877 7.5474 8.7361 9.9545 11.2034 6.4684 7.6625 8.8923 10.1591 11.4639 6.5502 7.7794 9.0517 10.3685 11.7314 6.6330 7.8983 9.2142 10.5828 12.0061 6.7169 6.8019 6.8881 6.9753 7.1533 8.0192 8.1420 8.26698.39388.6540 9.3800 9.5491 9.7216 9.8975 10.2598 10.802111.0266 11.2563 11.4913 11.9780 12.2882 12.5779 12.8754 13.1808 13.8164 7.3359 8.9228 10.6366 12.4876 14.4866 7.5233 7.7156 7.9129 9.20049.4872 9.7833 11.0285 11.435911.8594 13.0210 13.5795 14.1640 15.1929 15.9374 16.7220 8.1152 10.0890 12.2997 14.7757 17.5487 16.4991 20.7989 25.9587 32.1504 11 12 13 14 15 11.5668 11.8633 12.1687 12.4835 12.8078 13.1420 13.4864 13.8412 12.6825 13.0412 13.4121 13.7956 14.1920 14.6020 15.0258 15.4640 13.8093 14.2368 14.6803 15.1404 15.6178 16.1130 16.6268 17.1599 14.9474 15.4504 15.9739 16.5190 17.0863 17.6770 18.291918.9321 16.0969 16.6821 17.2934 17.9319 18.5989 19.2957 20.0236 20.7841 14.2068 15.9171 17.7130 19.5986 21.5786 14.5835 16.3856 18.2868 20.2926 22.4087 14.9716 16.8699 18.8821 21.0151 23.2760 15.7836 17.8885 20.1406 22.5505 25.1290 16.6455 18.9771 21.4953 24.2149 27.1521 17.5603 18.5312 19.5614 20.1407 21.3843 22.7132 22.9534 24.522726.2116 26.0192 27.9750 30.0949 29.360931.7725 34.4054 20.6546 24.1331 28.0291 32.3926 37.2797 39.5805 48.4966 59.1959 72.0351 16 17.2579 17.9324 18.6393 19.380220.1569 20.9710 21.8245 17 18.4304 19.2014 20.0121 20.8647 21.7616 22.7050 23.6975 18 19.6147 20.4894 21.4123 22.3863 23.4144 24.4997 25.6454 19 20.8109 21.7967 22.8406 23.9460 25.1169 26.3572 27.6712 20 22.0190 23.1237 24.2974 25.5447 26.8704 28.2797 29.7781 22.7193 23.6575 24.7417 25.8404 26.855128.1324 29.0636 30.5390 31.3714 33.0660 24.6411 26.9964 29.4812 32.1027 34.8683 25.6725 28.2129 30.9057 33.7600 36.7856 27.8881 30.3243 30.8402 33.7502 33.999037.4502 37.3790 41.4463 40.9955 45.7620 33.0034 36.9737 41.3013 46.0185 51.1601 35.9497 39.189942.7533 40.5447 44.5008 48.8837 45.599250.395955.7497 51.1591 56.9395 63.4397 57.2750 64.2028 72.0524 87.4421 105.9306 128.1167 154.7400 186.6880 21 23.2392 24.4705 25.7833 27.1833 28.6765 30.2695 31.9692 33.7831 30 34.7849 37.5387 40.5681 43.9027 47.5754 51.6227 56.084961.0071 40 48.8864 54.2679 60.4020 67.4026 75.4013 84.5503 95.0255 107.0303 35.7193 66.4388 120.7998 37.7861 72.4355 136.6056 39.9927 79.0582 154.7620 44.8652 50.422956.7645 94.4608 113.2832 136.3075 199.6351 259.0565 337.8824 64.0025 164.4940 442.5926 72.2651 81.6987 199.0209 241.3327 581.8261 767.0914 225.0256 1181.8816 7343.8578 TABLE 5 Future Value of an Annuity Due of $1 CAD. (1 + i)" - 1 FVAD = Pis +?" X (1+i) ni 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 0.0% 11.0% 12.0% 20.0% 1.2000 2.6400 1 2 3 4 5 1.0100 2.0301 3.0604 4.1010 5.1520 1.0150 1.0200 2.0452 2.0604 3.09093.1216 4.1523 4.2040 5.2296 5.3081 1.0250 2.0756 3.1525 4.2563 5.3877 1.0300 1.0350 1.0400 2.0909 2.1062 2.1216 3.1836 3.21493.2465 4.30914.3625 4.4163 5.4684 5.5502 5.6330 1.0450 2.1370 3.2782 4.4707 5.7169 1.0500 2.1525 3.3101 4.5256 5.8019 1.0550 2.1680 3.3423 4.5811 5.8881 1.0600 2.1836 3.3746 4.6371 5.9753 1.0700 2.2149 3.4399 4.7507 6.1533 1.0800 1.0900 1.1000 1.1100 1.1200 2.2464 2.2781 2.3100 2.3421 2.3744 3.5061 3.57313.6410 3.7097 3.7793 4.8666 4.9847 5.1051 5.2278 5.3528 6.33596.5233 6.71566.91297.1152 4.3680 6.4416 8.9299 11.9159 6 7 8 9 10 6.2135 6.3230 7.2857 7.4328 8.3685 8.5593 9.4622 9.7027 10.5668 10.8633 6.4343 7.5830 8.7546 9.9497 11.1687 6.5474 7.7361 8.9545 10.2034 11.4835 6.6625 7.8923 9.1591 10.4639 11.8078 6.7794 8.0517 9.3685 10.7314 12.1420 6.89837.0192 8.2142 8.3800 9.5828 9.8021 11.0061 11.2882 12.4864 12.8412 7.1420 8.5491 10.0266 11.5779 13.2068 7.26697.3938 8.7216 8.8975 10.2563 10.4913 11.8754 12.1808 13.5835 13.9716 7.65407.9228 9.2598 9.6366 10.9780 11.4876 12.8164 13.4866 14.7836 15.6455 8.2004 10.0285 12.0210 14.1929 16,5603 8.4872 8.7833 10.4359 10.8594 12.5795 13.1640 14.937415.7220 17.5312 18.5614 9.0890 11.2997 13.7757 16.5487 19.6546 15.4991 19.7989 24.9587 31.1504 38.5805 11 11.6825 12.0412 12 12.8093 13.2368 13 13.9474 14.4504 14 15.0969 15.6821 15 16.2579 16.9324 12.4121 12.7956 13.1920 13.6803 14.1404 14.6178 14.9739 15.5190 16.0863 16.2934 16.9319 17.5989 17.6393 18.3802 19.1569 13.6020 15.1130 16.6770 18.2957 19.9710 14.0258 15.6268 17.2919 19.0236 20.8245 14.4640 14.9171 16.159916.7130 17.9321 18.5986 19.7841 20.5786 21.7193 22.6575 15.3856 17.2868 19.2926 21.4087 23.6411 15.8699 17.8821 20.0151 22.2760 24.6725 16.8885 19.1406 21.5505 24.1290 26.8881 17.9771 20.4953 23.2149 26.1521 29.3243 19.140720.3843 21.9534 23.5227 25.0192 26.9750 28.3609 30.7725 32.0034 34.9497 21.7132 25.2116 29.0949 33.4054 38.1899 23.1331 27.0291 31.3926 36.2797 41.7533 47.4966 58.1959 71.0351 86.4421 16 17.4304 18.2014 19.0121 19.8647 20.7616 21.7050 22.6975 17 18.6147 19.4894 20.4123 21.3863 22.4144 23.4997 24.6454 18 19.8109 20.7967 21.8406 22.9460 24.1169 25.3572 26.6712 19 21.0190 22.1237 23.2974 24.5447 25.8704 27.2797 28.7781 20 22.2392 23.4705 24.7833 26.1833 27.6765 29.2695 30.9692 23.7417 25.8551 28.0636 30.3714 32.7831 24.8404 27.1324 29.5390 32.0660 34.7193 25.9964 28.4812 31.1027 33.8683 36.7861 27.2129 29.840232.7502 35.9737 29.9057 32.9990 36.4502 40.3013 32.760036.3790 40.4463 45.0185 35.7856 39.9955 44.7620 50.1601 38.9927 43.8652 49.422955.7645 39.544743.5008 47.8837 44.599249.395954.7497 50.1591 55.939562.4397 56.2750 63.2028 71.0524 63.0025 71.2651 80.6987 104.9306 127.1167 153.7400 185.6880 224.0256 21 23.4716 24.8376 26.2990 27.8629 29.5368 31.3289 33.2480 25 28.5256 30.5140 32.670935.0117 37.5530 40.3131 43.3117 30 35.1327 38.1018 41.379445.000349.0027 53.4295 58.3283 40 49.3752 55.0819 61.6100 69.0876 77.6633 87.5095 98.8265 35.3034 46.5706 63.7524 111.8467 37.5052 50.1135 69.7608 126.8398 39.8643 53.9660 76.4194 144. 1189 42.3923 48.0057 58.1564 67.6765 83.8017 101.0730 164.0477 213.6096 54.4568 78.9544 122.3459 279.7810 61.8733 70.4027 80.2143 91.5026 270.0307 92.3240 108.1818 126.9988 149.3339 566.3773 148.5752 180.9434 220.9132 270.2926 1418.2579 368.2919 486.8518 645.8269859.1424 8812.6294 TABLE 6 Present Value of an Annuity Due of $1 PVAD= |x (1+i) ni 1 2 3 4 5 1.0% 1.00000 1.99010 2.97040 3.94099 4.90197 1.5% 1.00000 1.98522 2.95588 3.91220 4.85438 2.0% 1.00000 1.98039 2.94156 3.88388 4.80773 2.5% 1.00000 1.97561 2.92742 3.85602 4.76197 3.0% 1.00000 1.97087 2.91347 3.82861 4.71710 3.5% 1.00000 1.96618 2.89969 3.80164 4.67308 4.0% 4.5% 1.00000 1.00000 1.96154 1.95694 2.886092.87267 3.77509 3.74896 4.62990 4.58753 5.0% 1.00000 1.95238 2.85941 3.72325 4.54595 5.5% 1.00000 1.94787 2.84632 3.69793 4.50515 6.0% 1.00000 1.94340 2.83339 3.67301 4.46511 7.0% 1.00000 1.93458 2.80802 3.62432 4.38721 8.0% 0.0% 1.00000 1.00000 1.925931.91743 2.78326 2.75911 3.57710 3.53129 4.312134.23972 0.0% 1.00000 1.90909 2.73554 3.48685 4.16987 11.0% 12.0% 1.00000 1.00000 1.90090 1.89286 2.71252 2.69005 3.44371 3.40183 4.10245 4.03735 20.0% 1.00000 1.83333 2.52778 3.10648 3.58873 6 7 8 9 10 5.85343 5.78264 6.79548 6.69719 7.728197.59821 8.65168 8.48593 9.56602 9.36052 5.71346 5.64583 5.57971 6.60143 6.50813 6.41719 7.471997.349397.23028 8.32548 8.17014 8.01969 9.16224 8.97087 8.78611 5.51505 5.45182 6.32855 6.24214 7.11454 7.00205 7.87396 7.73274 8.607698.43533 5.38998 5.32948 6.15787 6.07569 6.89270 6.78637 7.595897.46321 8.26879 8.10782 5.27028 5.99553 6.68297 7.33457 7.95220 5.21236 5.10020 4.99271 4.88965 5.91732 5.76654 5.62288 5.48592 6.58238 6.389296.20637 6.03295 7.209796.97130 6.74664 6.53482 7.801697.51523 7.246896.99525 4.79079 4.69590 4.60478 3.99061 5.35526 5.23054 5.11141 4.32551 5.86842 5.71220 5.56376 4.60459 6.33493 6.14612 5.96764 4.83716 6.75902 6.53705 6.32825 5.03097 11 12 13 14 15 10.47130 11.36763 12.25508 13.13374 14.00370 10.22218 9.98259 9.75206 9.53020 11.07112 10.78685 10.51421 10.25262 11.90751 11.57534 11.25776 10.95400 12.73153 12.34837 11.98318 11.63496 13.54338 13.10625 12.69091 12.29607 9.31661 10.00155 10.66333 11.30274 11.92052 9.11090 8.91272 9.76048 9.52892 10.38507 10.11858 10.98565 10.68285 11.56312 11.22283 8.72173 9.30641 9.86325 10.39357 10.89864 8.537638.360098.02358 7.710087.41766 9.09254 8.886878.49867 8.13896 7.80519 9.61852 9.38384 8.942698.53608 8.16073 10.11708 9.85268 9.35765 8.90378 8.48690 10.58965 10.29498 9.74547 9.24424 8.78615 7.14457 6.889236.650225.19247 7.49506 7.20652 6.93770 5.32706 7.81369 7.49236 7.19437 5.43922 8.10336 7.74987 7.42355 5.53268 8.366697.98187 7.62817 5.61057 16 14.86505 17 15.71787 18 16.56225 1917.39827 20 18.22601 14.34323 15.13126 15.90765 16.67256 17.42617 13.84926 14.57771 15.29187 15.99203 16.67846 13.38138 12.93794 12.51741 12.11839 14.05500 13.56110 13.09412 12.65230 14.71220 14.16612 13.65132 13.16567 15.35336 14.75351 14.18968 13.65930 15.97889 15.32380 14.70984 14.13394 11.73955 12.23402 12.70719 13.15999 13.59329 11.37966 11.83777 12.27407 12.68959 13.08532 11.03758 11.46216 11.86461 12.24607 12.60765 10.71225 11.10590 11.47726 11.82760 12.15812 10.10791 10.44665 10.76322 11.05909 11.33560 9.55948 9.85137 10.12164 10.37189 10.60360 9.060698.60608 8.19087 7.81086 5.67547 9.31256 8.82371 8.37916 7.97399 5.72956 9.543639.02155 8.54879 8.11963 5.77463 9.75563 9.20141 8.70162 8.24967 5.81219 9.95011 9.36492 8.83929 8.36578 5.84350 21 19.04555 18.16864 25 22.24339 21.03041 30 26.06579 24.37608 40 33.16303 30.36458 17.35143 16.58916 19.91393 18.88499 22.84438 21.45355 27.90259 25.73034 15.87747 15.21240 17.93554 17.05837 20.18845 19.03577 23.80822 22.10250 14.59033 16.24696 17.98371 20.58448 14.00794 15.49548 17.02189 19.22966 13.46221 14.79864 16.14107 18.01704 12.95038 14.15170 15.33310 16.92866 12.46992 11.59401 13.55036 12.46933 14.59072 13.27767 15.94907 14.26493 10.81815 11.52876 12.15841 12.87858 10.12855 10.70661 11.19828 11.72552 9.51356 8.96333 8.46944 5.86958 9.98474 9.34814 8.78432 5.93710 10.36961 9.65011 9.02181 5.97472 10.75696 9.93567 9.23303 5.99592 22. Leases We lease certain retail locations, warehouses, distribution centers, office space, land, and equipment. 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 the lease term by assuming the exercise of those renewal options that are reasonably assured. The exercise The 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 assets and leasehold improvements is limited by the expected lease term. Rent expense is included in SG&A Expense. Some of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Certain leases require us to pay real estate taxes, insurance, maintenance, and other operating expenses associated e leased premises. These expenses are classified in SG&A Expense, consistent with similar costs for owned locations. CVS leases the space in our stores in which they operate CVS branded pharmacies and clinics. Rent income received from tenants who rent properties is recorded as a reduction to SG&A Expense. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement We plan to adopt the standard as of February 4, 2018, the beginning of fiscal 2018. We will elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We will also elect the practical expedient related to land easements, ent accounting treatment for land easements on existing agreements. In addition we are electing the hindsight practical expedient to determine the reasonably certain lease term Our election of the hindsight practical expedient will result in the shortening of lease useful lives of corresponding leasehold improvements. We will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. We estimate adoption of the standard will result in recognition of additional net lease assets and lease liabilities of approximately $1.3 billion and $1.4 billion, respectively, as of February 4, 2018. The difference between these amounts will be recorded as an adjustment to retained earnings. We do not believe the standard will materially affect our consolidated net earnings. We do not believe the new standard will have a notable impact on our liquidity. The standard will have no impact on our debt-covenant compliance under our current agreements. Rent Expense (millions) 2017 2016 2015 Rent expense $ 223 $ 202 $ 198 Rent income (e) (56) (54) (16) Total rent expense $ 167 $ 148 $ 182 Includes rental income from CVS from both ongoing rent payments and amortization of the deferred income liability related to the Pharmacy Transaction. See Note 6 for further discussion. 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. 92 $ 96 (25) Future Minimum Lease Payments (millions) Operating Leases () Capital Leases (6) Rent Income Total 2018 227 $ (25) $ 294 2019 234 305 2020 226 (24) 299 2021 222 96 (23) 295 2022 217 96 (23) 290 After 2022 3,027 1,524 (307) 4,244 Total future minimum lease payments $ 4,153 $ 2,001 $ (427) $ 5,727 Less: Interest 849 Present value of future minimum capital lease payments 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. 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 payments 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. 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)(FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use approprlate factor(s) from the tables provided.) Required: In its Analysis of "Financial Condition: New Accounting Pronouncements." Target's financial statements for the year ended February 3. 2018, the company indicates that In February 2016, the FASB issued ASU No. 2016-02. Leases, to require organizations that lease assets to recognize the rights and obligations created by those leases on the balance sheet. The new standard is effective in 2019. Refer to Note 22: Leases. New lease accounting guidance requires companies to record a right-of-use asset and a lease liability for all leases, with the exception of short-term leases, at present value. If Target had used the new lease accounting guidance in its fiscal 2017 (February 3, 2018) financial statements, what would be the amount reported as a liability for its leases, operating and capital (finance) combined ? (Do not round Intermedlate calculations. Enter your answers to nearest millions. Round final answer to the nearest whole value.) Hint: Assume the payments "after 2020" are to be paid evenly over a 16-year 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. Amount reported as a liability for its leases combined million TABLE 1 Future Value of $1 FV = $1(1 + i)" ni 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 2 3 4 5 1.01000 1.02010 1.03030 1.04060 1.05101 1.01500 1.03022 1.04568 1.06136 1.07728 1.02000 1.04040 1.06121 1.08243 1.10408 1.02500 1.03000 1.05063 1.06090 1.07689 1.09273 1.10381 1.12551 1.13141 1.15927 1.03500 1.04000 1.07123 1.08160 1.10872 1.12486 1.14752 1.16986 1.18769 1.21665 1.04500 1.09203 1.14117 1.19252 1.24618 1.05000 1.10250 1.15763 1.21551 1.27628 1.05500 1.11303 1.17424 1.23882 1.30696 1.06000 1.12360 1.19102 1.26248 1.33823 1.07000 1.14490 1.22504 1.31080 1.40255 1.08000 1.16640 1.25971 1.36049 1.46933 1.09000 1.18810 1.29503 1.41158 1.53862 1.10000 1.21000 1.33100 1.46410 1.61051 1.11000 1.23210 1.36763 1.51807 1.68506 1.12000 1.25440 1.40493 1.57352 1.76234 1.20000 1.44000 1.72800 2.07360 2.48832 6 7 8 9 10 1.06152 1.07214 1.08286 1.09369 1.10462 1.09344 1.10984 1.12649 1.14339 1.16054 1.12616 1.15969 1.19405 1.14869 1.18869 1.22987 1.17166 1.21840 1.26677 1.19509 1.24886 1.30477 1.21899 1.28008 1.34392 1.22926 1.26532 1.27228 131593 1.31681 1.36857 1.36290 1.42331 1.41060 1.48024 1.30226 1.36086 1.42210 1.48610 1.55297 1.34010 1.40710 1.47746 1.55133 1.62889 1.37884 1.41852 1.45468 1.50363 1.53469 1.59385 1.619091.68948 1.70814 1.79085 1.50073 1.60578 1.71819 1.83846 1.96715 1.58687 1.71382 1.85093 1.99900 2.15892 1.67710 1.77156 1.82804 1.94872 1.99256 2.14359 2.171892.35795 2.36736 2.59374 1.87041 2.07616 2.30454 2.55804 2.83942 1.97382 2.21068 2.47596 2.77308 3.10585 2.98598 3.58318 4.29982 5.15978 6.19174 11 12 13 14 15 1.11567 1.17795 1.12683 1.19562 1.13809 1.21355 1.14947 1.23176 1.16097 1.25023 1.24337 1.31209 1.26824 1.34489 1.29361 1.37851 131948 1.41297 1.34587 1.44830 1.38423 1.42576 1.46853 1.51259 1.55797 1.45997 1.51107 1.56396 1.61869 1.67535 1.53945 1.62285 1.71034 1.802091.89830 1.60103 1.69588 1.79586 1.90121 2.01220 1.66507 1.77220 1.88565 2.00577 2.13293 1.73168 1.85194 1.97993 2.11609 2.26090 1.80094 1.93528 2.07893 2.23248 2.39656 2.10485 2.25219 2.40985 2.57853 2.75903 2.33164 2.51817 2.71962 2.93719 3.17217 2.58043 2.81266 3.06580 3.34173 3.64248 2.85312 3.13843 3.45227 3.79750 4.17725 3.15176 3.47855 3.49845 3.89598 3.88328 4.36349 4.31044 4.88711 4.784595.47357 7.43008 8.91610 10.69932 12.83918 15.40702 16 17 18 19 20 1.17258 1.26899 1.18430 1.28802 1.19615 1.30734 1.20811 1.32695 1.22019 1.34686 1.37279 1.40024 1.42825 1.45681 1.48595 1.48451 1.52162 1.55966 1.59865 1.63862 1.60471 1.65285 1.70243 1.75351 1.80611 1.73399 1.87298 2.02237 2.18287 2.35526 1.79468 1.94790 2.11338 2.29202 2.48480 1.85749 2.02582 2.20848 2.40662 2.62147 1.92250 2.10685 2.30786 2.52695 2.76565 1.98979 2.19112 2.41171 2.65330 2.91776 2.54035 2.69277 2.85434 3.02560 3.20714 2.95216 3.15882 3.37993 3.61653 3.86968 3.42594 3.70002 3.99602 4.31570 4.66096 3.97031 4.32763 4.71712 5.14166 5.60441 4.59497 5.05447 5.55992 6.11591 6.72750 5310896.13039 5.895096.86604 6.54355 7.68997 7.26334 8.61276 8.06231 9.64629 18.48843 22.18611 26.62333 31.94800 38.33760 21 1.23239 1.36706 1.51567 1.67958 1.86029 2.059432.27877 2.52024 2.78596 3.07823 3.39956 25 1.28243 1.45095 1.64061 1.85394 2.09378 2.36324 2.66584 3.00543 3.38635 3.813394.29187 30 1.34785 1.56308 1.81136 2.09757 2.42726 2.80679 3.24340 3.74532 4.32194 4.98395 5.74349 40 1.48886 1.81402 2.20804 2.68506 3.26204 3.95926 4.80102 5.81636 7.03999 8.51331 10.28572 4.14056 5.03383 6.10881 5.42743 6.84848 8.62308 7.61226 10.06266 13.26768 14.97446 21.72452 31.40942 7.40025 10.83471 17.44940 45.25926 8.94917 13.58546 22.89230 65.00087 10.80385 17.00006 29.95992 93.05097 46.00512 95.39622 237.37631 1469.77160 TABLE 2 Present Value of $1 $1 PV = 11 + i) W 1 2 3 4 5 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94787 0.94340 0.98030 0.97066 0.96117 0.95181 0.94260 0.93351 0.92456 0.91573 0.90703 0.89845 0.89000 0.97059 0.95632 0.94232 0.92860 0.91514 0.90194 0.88900 0.87630 0.86384 0.85161 0.83962 0.96098 0.94218 0.92385 0.90595 0.88849 0.87144 0.85480 0.83856 0.82270 0.80722 0.79209 0.95147 0.92826 0.90573 0.88385 0.86261 0.84197 0.82193 0.80245 0.78353 0.76513 0.74726 7.0% 0.93458 0.87344 0.81630 0.76290 0.71299 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 0.92593 0.91743 0.90909 0.90090 0.89286 0.83333 0.85734 0.84168 0.82645 0.81162 0.79719 0.69444 0.79383 0.77218 0.75131 0.73119 0.71178 0.57870 0.73503 0.70843 0.68301 0.65873 0.63552 0.48225 0.68058 0.64993 0.62092 0.59345 0.56743 0.40188 6 0.94205 0.91454 0.88797 0.86230 0.83748 0.81350 0.79031 0.76790 0.74622 0.72525 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.33490 7 0.93272 0.90103 0.87056 0.84127 0.81309 0.78599 0.75992 0.73483 0.71068 0.68744 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.27908 8 0.92348 0.88771 0.85349 0.82075 0.78941 0.75941 0.73069 0.70319 0.67684 0.65160 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.23257 9 0.91434 0.87459 0.83676 0.80073 0.76642 0.73373 0.70259 0.67290 0.64461 0.61763 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.19381 10 0.90529 0.86167 0.82035 0.78120 0.74409 0.70892 0.67556 0.64393 0.61391 0.58543 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.16151 11 0.89632 0.84893 0.80426 0.76214 0.72242 0.68495 0.64958 0.61620 12 0.88745 0.83639 0.78849 0.74356 0.70138 0.66178 0.62460 0.58966 13 0.87866 0.82403 0.77303 0.72542 0.68095 0.63940 0.60057 0.56427 14 0.86996 0.81185 0.75788 0.70773 0.66112 0.61778 0.57748 0.53997 15 0.86135 0.79985 0.74301 0.69047 0.64186 0.59689 0.55526 0.51672 0.58468 0.55491 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.13459 0.55684 0.52598 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 0.11216 0.53032 0.49856 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.09346 0.50507 0.47257 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.07789 0.48102 0.44793 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.06491 16 0.85282 0.78803 0.72845 0.67362 0.62317 0.57671 0.53391 0.49447 0.45811 0.42458 0.39365 0.33873 17 0.84438 0.77639 0.71416 0.65720 0.60502 0.55720 0.51337 0.47318 0.43630 0.40245 0.37136 0.31657 18 0.83602 0.76491 0.70016 0.64117 0.58739 0.53836 0.49363 0.45280 0.41552 0.38147 0.35034 0.29586 19 0.82774 0.75361 0.68643 0.62553 0.57029 0.52016 0.47464 0.43330 0.39573 0.36158 0.33051 0.27651 20 0.81954 0.74247 0.67297 0.61027 0.55368 0.50257 0.45639 0.41464 0.37689 0.34273 0.31180 0.25842 0.29189 0.25187 0.21763 0.18829 0.16312 0.05409 0.27027 0.23107 0.19784 0.16963 0.14564 0.04507 0.25025 0.21199 0.17986 0.15282 0.13004 0.03756 0.23171 0.19449 0.16351 0.13768 0.11611 0.03130 0.21455 0.17843 0.14864 0.12403 0.10367 0.02608 21 0.81143 0.73150 0.65978 0.59539 0.53755 0.48557 0.43883 0.39679 0.35894 0.32486 0.29416 0.24151 0.19866 0.16370 0.13513 0.11174 0.09256 0.02174 24 0.78757 0.69954 0.62172 0.55288 0.49193 0.43796 0.39012 0.34770 0.31007 0.27666 0.24698 0.19715 0.15770 0.12640 0.10153 0.08170 0.06588 0.01258 25 0.77977 0.68921 0.609530.53939 0.47761 0.42315 0.37512 0.33273 0.29530 0.26223 0.233000.18425 0.14602 0.11597 0.09230 0.07361 0.05882 0.01048 28 0.75684 0.65910 0.57437 0.50088 0.43708 0.38165 0.33348 0.29157 0.25509 0.22332 0.19563 0.15040 0.11591 0.08955 0.06934 0.05382 0.04187 0.00607 29 0.74934 0.64936 0.56311 0.48866 0.42435 0.36875 0.32065 0.27902 0.24295 0.21168 0.18456 0.14056 0.10733 0.08215 0.06304 0.048490.03738 0.00506 30 0.74192 0.63976 0.55207 0.47674 0.41199 0.35628 0.30832 0.26700 0.23138 0.20064 0.17411 0.13137 0.09938 0.07537 0.05731 0.04368 0.03338 0.00421 31 0.73458 0.63031 0.54125 0.46511 0.39999 0.34423 0.29646 0.25550 0.22036 0.19018 0.16425 0.12277 0.09202 0.06915 0.05210 0.03935 0.02980 0.00351 40 0.67165 0.55126 0.45289 0.37243 0.30656 0.25257 0.20829 0.17193 0.14205 0.11746 0.09722 0.06678 0.04603 0.03184 0.02209 0.01538 0.01075 0.00068 TABLE 3 Future Value of an Ordinary Annuity of $1 FVA (1 + i)" - 1 ni 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 0.0% 0.0% 11.0% 12.0% 20.0% 1.0000 1 2 3 4 5 1.0000 2.0100 3.0301 4.0604 5.1010 1.0000 1.0000 2.0150 2.0200 3.0452 3.0604 4.09094.1216 5.1523 5.2040 1.0000 2.0250 3.0756 4.1525 5.2563 1.000 2.0300 3.0909 4.1836 5.3091 1.0000 1.000 2.0350 2.0400 3.1062 3.1216 4.21494.2465 5.3625 5.4163 1.000 1.0000 2.0450 2.0500 3.13703.1525 1.0000 1.000 2.0550 2.0600 3.16803.1836 4.3423 4.3746 5.5811 5.6371 1.0000 1.000 2.0700 2.0800 3.21493.2464 4.4399 4.5061 5.7507 5.8666 1.000 2.0900 3.2781 4.5731 5.9847 1.0000 2.1000 3.3100 4.6410 6.1051 1.000 2.1100 3.3421 4.7097 6.2278 1.0000 2.1200 3.3744 4.7793 6.3528 2.2000 3.6400 5.3680 5.4707 5.5256 7.4416 9.9299 12.9159 6 7 8 9 10 6.1520 7.2135 8.2857 9.3685 10.4622 6.2296 7.3230 8.4328 9.5593 10.7027 6.3081 7.4343 8.5830 9.7546 10.9497 6.3877 7.5474 8.7361 9.9545 11.2034 6.4684 7.6625 8.8923 10.1591 11.4639 6.5502 7.7794 9.0517 10.3685 11.7314 6.6330 7.8983 9.2142 10.5828 12.0061 6.7169 6.8019 6.8881 6.9753 7.1533 8.0192 8.1420 8.26698.39388.6540 9.3800 9.5491 9.7216 9.8975 10.2598 10.802111.0266 11.2563 11.4913 11.9780 12.2882 12.5779 12.8754 13.1808 13.8164 7.3359 8.9228 10.6366 12.4876 14.4866 7.5233 7.7156 7.9129 9.20049.4872 9.7833 11.0285 11.435911.8594 13.0210 13.5795 14.1640 15.1929 15.9374 16.7220 8.1152 10.0890 12.2997 14.7757 17.5487 16.4991 20.7989 25.9587 32.1504 11 12 13 14 15 11.5668 11.8633 12.1687 12.4835 12.8078 13.1420 13.4864 13.8412 12.6825 13.0412 13.4121 13.7956 14.1920 14.6020 15.0258 15.4640 13.8093 14.2368 14.6803 15.1404 15.6178 16.1130 16.6268 17.1599 14.9474 15.4504 15.9739 16.5190 17.0863 17.6770 18.291918.9321 16.0969 16.6821 17.2934 17.9319 18.5989 19.2957 20.0236 20.7841 14.2068 15.9171 17.7130 19.5986 21.5786 14.5835 16.3856 18.2868 20.2926 22.4087 14.9716 16.8699 18.8821 21.0151 23.2760 15.7836 17.8885 20.1406 22.5505 25.1290 16.6455 18.9771 21.4953 24.2149 27.1521 17.5603 18.5312 19.5614 20.1407 21.3843 22.7132 22.9534 24.522726.2116 26.0192 27.9750 30.0949 29.360931.7725 34.4054 20.6546 24.1331 28.0291 32.3926 37.2797 39.5805 48.4966 59.1959 72.0351 16 17.2579 17.9324 18.6393 19.380220.1569 20.9710 21.8245 17 18.4304 19.2014 20.0121 20.8647 21.7616 22.7050 23.6975 18 19.6147 20.4894 21.4123 22.3863 23.4144 24.4997 25.6454 19 20.8109 21.7967 22.8406 23.9460 25.1169 26.3572 27.6712 20 22.0190 23.1237 24.2974 25.5447 26.8704 28.2797 29.7781 22.7193 23.6575 24.7417 25.8404 26.855128.1324 29.0636 30.5390 31.3714 33.0660 24.6411 26.9964 29.4812 32.1027 34.8683 25.6725 28.2129 30.9057 33.7600 36.7856 27.8881 30.3243 30.8402 33.7502 33.999037.4502 37.3790 41.4463 40.9955 45.7620 33.0034 36.9737 41.3013 46.0185 51.1601 35.9497 39.189942.7533 40.5447 44.5008 48.8837 45.599250.395955.7497 51.1591 56.9395 63.4397 57.2750 64.2028 72.0524 87.4421 105.9306 128.1167 154.7400 186.6880 21 23.2392 24.4705 25.7833 27.1833 28.6765 30.2695 31.9692 33.7831 30 34.7849 37.5387 40.5681 43.9027 47.5754 51.6227 56.084961.0071 40 48.8864 54.2679 60.4020 67.4026 75.4013 84.5503 95.0255 107.0303 35.7193 66.4388 120.7998 37.7861 72.4355 136.6056 39.9927 79.0582 154.7620 44.8652 50.422956.7645 94.4608 113.2832 136.3075 199.6351 259.0565 337.8824 64.0025 164.4940 442.5926 72.2651 81.6987 199.0209 241.3327 581.8261 767.0914 225.0256 1181.8816 7343.8578 TABLE 5 Future Value of an Annuity Due of $1 CAD. (1 + i)" - 1 FVAD = Pis +?" X (1+i) ni 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 0.0% 11.0% 12.0% 20.0% 1.2000 2.6400 1 2 3 4 5 1.0100 2.0301 3.0604 4.1010 5.1520 1.0150 1.0200 2.0452 2.0604 3.09093.1216 4.1523 4.2040 5.2296 5.3081 1.0250 2.0756 3.1525 4.2563 5.3877 1.0300 1.0350 1.0400 2.0909 2.1062 2.1216 3.1836 3.21493.2465 4.30914.3625 4.4163 5.4684 5.5502 5.6330 1.0450 2.1370 3.2782 4.4707 5.7169 1.0500 2.1525 3.3101 4.5256 5.8019 1.0550 2.1680 3.3423 4.5811 5.8881 1.0600 2.1836 3.3746 4.6371 5.9753 1.0700 2.2149 3.4399 4.7507 6.1533 1.0800 1.0900 1.1000 1.1100 1.1200 2.2464 2.2781 2.3100 2.3421 2.3744 3.5061 3.57313.6410 3.7097 3.7793 4.8666 4.9847 5.1051 5.2278 5.3528 6.33596.5233 6.71566.91297.1152 4.3680 6.4416 8.9299 11.9159 6 7 8 9 10 6.2135 6.3230 7.2857 7.4328 8.3685 8.5593 9.4622 9.7027 10.5668 10.8633 6.4343 7.5830 8.7546 9.9497 11.1687 6.5474 7.7361 8.9545 10.2034 11.4835 6.6625 7.8923 9.1591 10.4639 11.8078 6.7794 8.0517 9.3685 10.7314 12.1420 6.89837.0192 8.2142 8.3800 9.5828 9.8021 11.0061 11.2882 12.4864 12.8412 7.1420 8.5491 10.0266 11.5779 13.2068 7.26697.3938 8.7216 8.8975 10.2563 10.4913 11.8754 12.1808 13.5835 13.9716 7.65407.9228 9.2598 9.6366 10.9780 11.4876 12.8164 13.4866 14.7836 15.6455 8.2004 10.0285 12.0210 14.1929 16,5603 8.4872 8.7833 10.4359 10.8594 12.5795 13.1640 14.937415.7220 17.5312 18.5614 9.0890 11.2997 13.7757 16.5487 19.6546 15.4991 19.7989 24.9587 31.1504 38.5805 11 11.6825 12.0412 12 12.8093 13.2368 13 13.9474 14.4504 14 15.0969 15.6821 15 16.2579 16.9324 12.4121 12.7956 13.1920 13.6803 14.1404 14.6178 14.9739 15.5190 16.0863 16.2934 16.9319 17.5989 17.6393 18.3802 19.1569 13.6020 15.1130 16.6770 18.2957 19.9710 14.0258 15.6268 17.2919 19.0236 20.8245 14.4640 14.9171 16.159916.7130 17.9321 18.5986 19.7841 20.5786 21.7193 22.6575 15.3856 17.2868 19.2926 21.4087 23.6411 15.8699 17.8821 20.0151 22.2760 24.6725 16.8885 19.1406 21.5505 24.1290 26.8881 17.9771 20.4953 23.2149 26.1521 29.3243 19.140720.3843 21.9534 23.5227 25.0192 26.9750 28.3609 30.7725 32.0034 34.9497 21.7132 25.2116 29.0949 33.4054 38.1899 23.1331 27.0291 31.3926 36.2797 41.7533 47.4966 58.1959 71.0351 86.4421 16 17.4304 18.2014 19.0121 19.8647 20.7616 21.7050 22.6975 17 18.6147 19.4894 20.4123 21.3863 22.4144 23.4997 24.6454 18 19.8109 20.7967 21.8406 22.9460 24.1169 25.3572 26.6712 19 21.0190 22.1237 23.2974 24.5447 25.8704 27.2797 28.7781 20 22.2392 23.4705 24.7833 26.1833 27.6765 29.2695 30.9692 23.7417 25.8551 28.0636 30.3714 32.7831 24.8404 27.1324 29.5390 32.0660 34.7193 25.9964 28.4812 31.1027 33.8683 36.7861 27.2129 29.840232.7502 35.9737 29.9057 32.9990 36.4502 40.3013 32.760036.3790 40.4463 45.0185 35.7856 39.9955 44.7620 50.1601 38.9927 43.8652 49.422955.7645 39.544743.5008 47.8837 44.599249.395954.7497 50.1591 55.939562.4397 56.2750 63.2028 71.0524 63.0025 71.2651 80.6987 104.9306 127.1167 153.7400 185.6880 224.0256 21 23.4716 24.8376 26.2990 27.8629 29.5368 31.3289 33.2480 25 28.5256 30.5140 32.670935.0117 37.5530 40.3131 43.3117 30 35.1327 38.1018 41.379445.000349.0027 53.4295 58.3283 40 49.3752 55.0819 61.6100 69.0876 77.6633 87.5095 98.8265 35.3034 46.5706 63.7524 111.8467 37.5052 50.1135 69.7608 126.8398 39.8643 53.9660 76.4194 144. 1189 42.3923 48.0057 58.1564 67.6765 83.8017 101.0730 164.0477 213.6096 54.4568 78.9544 122.3459 279.7810 61.8733 70.4027 80.2143 91.5026 270.0307 92.3240 108.1818 126.9988 149.3339 566.3773 148.5752 180.9434 220.9132 270.2926 1418.2579 368.2919 486.8518 645.8269859.1424 8812.6294 TABLE 6 Present Value of an Annuity Due of $1 PVAD= |x (1+i) ni 1 2 3 4 5 1.0% 1.00000 1.99010 2.97040 3.94099 4.90197 1.5% 1.00000 1.98522 2.95588 3.91220 4.85438 2.0% 1.00000 1.98039 2.94156 3.88388 4.80773 2.5% 1.00000 1.97561 2.92742 3.85602 4.76197 3.0% 1.00000 1.97087 2.91347 3.82861 4.71710 3.5% 1.00000 1.96618 2.89969 3.80164 4.67308 4.0% 4.5% 1.00000 1.00000 1.96154 1.95694 2.886092.87267 3.77509 3.74896 4.62990 4.58753 5.0% 1.00000 1.95238 2.85941 3.72325 4.54595 5.5% 1.00000 1.94787 2.84632 3.69793 4.50515 6.0% 1.00000 1.94340 2.83339 3.67301 4.46511 7.0% 1.00000 1.93458 2.80802 3.62432 4.38721 8.0% 0.0% 1.00000 1.00000 1.925931.91743 2.78326 2.75911 3.57710 3.53129 4.312134.23972 0.0% 1.00000 1.90909 2.73554 3.48685 4.16987 11.0% 12.0% 1.00000 1.00000 1.90090 1.89286 2.71252 2.69005 3.44371 3.40183 4.10245 4.03735 20.0% 1.00000 1.83333 2.52778 3.10648 3.58873 6 7 8 9 10 5.85343 5.78264 6.79548 6.69719 7.728197.59821 8.65168 8.48593 9.56602 9.36052 5.71346 5.64583 5.57971 6.60143 6.50813 6.41719 7.471997.349397.23028 8.32548 8.17014 8.01969 9.16224 8.97087 8.78611 5.51505 5.45182 6.32855 6.24214 7.11454 7.00205 7.87396 7.73274 8.607698.43533 5.38998 5.32948 6.15787 6.07569 6.89270 6.78637 7.595897.46321 8.26879 8.10782 5.27028 5.99553 6.68297 7.33457 7.95220 5.21236 5.10020 4.99271 4.88965 5.91732 5.76654 5.62288 5.48592 6.58238 6.389296.20637 6.03295 7.209796.97130 6.74664 6.53482 7.801697.51523 7.246896.99525 4.79079 4.69590 4.60478 3.99061 5.35526 5.23054 5.11141 4.32551 5.86842 5.71220 5.56376 4.60459 6.33493 6.14612 5.96764 4.83716 6.75902 6.53705 6.32825 5.03097 11 12 13 14 15 10.47130 11.36763 12.25508 13.13374 14.00370 10.22218 9.98259 9.75206 9.53020 11.07112 10.78685 10.51421 10.25262 11.90751 11.57534 11.25776 10.95400 12.73153 12.34837 11.98318 11.63496 13.54338 13.10625 12.69091 12.29607 9.31661 10.00155 10.66333 11.30274 11.92052 9.11090 8.91272 9.76048 9.52892 10.38507 10.11858 10.98565 10.68285 11.56312 11.22283 8.72173 9.30641 9.86325 10.39357 10.89864 8.537638.360098.02358 7.710087.41766 9.09254 8.886878.49867 8.13896 7.80519 9.61852 9.38384 8.942698.53608 8.16073 10.11708 9.85268 9.35765 8.90378 8.48690 10.58965 10.29498 9.74547 9.24424 8.78615 7.14457 6.889236.650225.19247 7.49506 7.20652 6.93770 5.32706 7.81369 7.49236 7.19437 5.43922 8.10336 7.74987 7.42355 5.53268 8.366697.98187 7.62817 5.61057 16 14.86505 17 15.71787 18 16.56225 1917.39827 20 18.22601 14.34323 15.13126 15.90765 16.67256 17.42617 13.84926 14.57771 15.29187 15.99203 16.67846 13.38138 12.93794 12.51741 12.11839 14.05500 13.56110 13.09412 12.65230 14.71220 14.16612 13.65132 13.16567 15.35336 14.75351 14.18968 13.65930 15.97889 15.32380 14.70984 14.13394 11.73955 12.23402 12.70719 13.15999 13.59329 11.37966 11.83777 12.27407 12.68959 13.08532 11.03758 11.46216 11.86461 12.24607 12.60765 10.71225 11.10590 11.47726 11.82760 12.15812 10.10791 10.44665 10.76322 11.05909 11.33560 9.55948 9.85137 10.12164 10.37189 10.60360 9.060698.60608 8.19087 7.81086 5.67547 9.31256 8.82371 8.37916 7.97399 5.72956 9.543639.02155 8.54879 8.11963 5.77463 9.75563 9.20141 8.70162 8.24967 5.81219 9.95011 9.36492 8.83929 8.36578 5.84350 21 19.04555 18.16864 25 22.24339 21.03041 30 26.06579 24.37608 40 33.16303 30.36458 17.35143 16.58916 19.91393 18.88499 22.84438 21.45355 27.90259 25.73034 15.87747 15.21240 17.93554 17.05837 20.18845 19.03577 23.80822 22.10250 14.59033 16.24696 17.98371 20.58448 14.00794 15.49548 17.02189 19.22966 13.46221 14.79864 16.14107 18.01704 12.95038 14.15170 15.33310 16.92866 12.46992 11.59401 13.55036 12.46933 14.59072 13.27767 15.94907 14.26493 10.81815 11.52876 12.15841 12.87858 10.12855 10.70661 11.19828 11.72552 9.51356 8.96333 8.46944 5.86958 9.98474 9.34814 8.78432 5.93710 10.36961 9.65011 9.02181 5.97472 10.75696 9.93567 9.23303 5.99592 22. Leases We lease certain retail locations, warehouses, distribution centers, office space, land, and equipment. 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 the lease term by assuming the exercise of those renewal options that are reasonably assured. The exercise The 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 assets and leasehold improvements is limited by the expected lease term. Rent expense is included in SG&A Expense. Some of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Certain leases require us to pay real estate taxes, insurance, maintenance, and other operating expenses associated e leased premises. These expenses are classified in SG&A Expense, consistent with similar costs for owned locations. CVS leases the space in our stores in which they operate CVS branded pharmacies and clinics. Rent income received from tenants who rent properties is recorded as a reduction to SG&A Expense. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement We plan to adopt the standard as of February 4, 2018, the beginning of fiscal 2018. We will elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We will also elect the practical expedient related to land easements, ent accounting treatment for land easements on existing agreements. In addition we are electing the hindsight practical expedient to determine the reasonably certain lease term Our election of the hindsight practical expedient will result in the shortening of lease useful lives of corresponding leasehold improvements. We will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. We estimate adoption of the standard will result in recognition of additional net lease assets and lease liabilities of approximately $1.3 billion and $1.4 billion, respectively, as of February 4, 2018. The difference between these amounts will be recorded as an adjustment to retained earnings. We do not believe the standard will materially affect our consolidated net earnings. We do not believe the new standard will have a notable impact on our liquidity. The standard will have no impact on our debt-covenant compliance under our current agreements. Rent Expense (millions) 2017 2016 2015 Rent expense $ 223 $ 202 $ 198 Rent income (e) (56) (54) (16) Total rent expense $ 167 $ 148 $ 182 Includes rental income from CVS from both ongoing rent payments and amortization of the deferred income liability related to the Pharmacy Transaction. See Note 6 for further discussion. 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. 92 $ 96 (25) Future Minimum Lease Payments (millions) Operating Leases () Capital Leases (6) Rent Income Total 2018 227 $ (25) $ 294 2019 234 305 2020 226 (24) 299 2021 222 96 (23) 295 2022 217 96 (23) 290 After 2022 3,027 1,524 (307) 4,244 Total future minimum lease payments $ 4,153 $ 2,001 $ (427) $ 5,727 Less: Interest 849 Present value of future minimum capital lease payments 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. 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 payments 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
