|
|
Minnesota
|
|
41-0215170
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
1000 Nicollet Mall, Minneapolis, Minnesota
|
|
55403
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
|
||
|
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(millions, except per share data) (unaudited)
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
||||
Sales
|
$
|
17,406
|
|
|
$
|
17,117
|
|
|
$
|
34,456
|
|
|
$
|
33,823
|
|
Cost of sales
|
12,165
|
|
|
11,745
|
|
|
24,232
|
|
|
23,308
|
|
||||
Selling, general and administrative expenses
|
3,816
|
|
|
3,698
|
|
|
7,409
|
|
|
7,287
|
|
||||
Depreciation and amortization
|
606
|
|
|
542
|
|
|
1,186
|
|
|
1,079
|
|
||||
Gain on receivables transaction
|
—
|
|
|
—
|
|
|
—
|
|
|
(391
|
)
|
||||
Earnings before interest expense and income taxes
|
819
|
|
|
1,132
|
|
|
1,629
|
|
|
2,540
|
|
||||
Net interest expense
|
453
|
|
|
171
|
|
|
622
|
|
|
801
|
|
||||
Earnings before income taxes
|
366
|
|
|
961
|
|
|
1,007
|
|
|
1,739
|
|
||||
Provision for income taxes
|
132
|
|
|
350
|
|
|
354
|
|
|
629
|
|
||||
Net earnings
|
$
|
234
|
|
|
$
|
611
|
|
|
$
|
653
|
|
|
$
|
1,110
|
|
Basic earnings per share
|
$
|
0.37
|
|
|
$
|
0.96
|
|
|
$
|
1.03
|
|
|
$
|
1.74
|
|
Diluted earnings per share
|
$
|
0.37
|
|
|
$
|
0.95
|
|
|
$
|
1.02
|
|
|
$
|
1.72
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
633.5
|
|
|
634.8
|
|
|
633.4
|
|
|
638.4
|
|
||||
Dilutive impact of share-based awards
(a)
|
4.9
|
|
|
7.2
|
|
|
4.9
|
|
|
7.3
|
|
||||
Diluted
|
638.4
|
|
|
642.0
|
|
|
638.3
|
|
|
645.7
|
|
Consolidated Statements of Comprehensive Income
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(millions) (unaudited)
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
||||
Net earnings
|
$
|
234
|
|
|
$
|
611
|
|
|
$
|
653
|
|
|
$
|
1,110
|
|
Other comprehensive income/(loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pension and other benefit liabilities, net of taxes of
$4
, $8,
$8
and $34
|
7
|
|
|
12
|
|
|
14
|
|
|
52
|
|
||||
Currency translation adjustment and cash flow hedges, net of taxes of
$1
, $(2),
$1
and $7
|
23
|
|
|
(100
|
)
|
|
85
|
|
|
(129
|
)
|
||||
Other comprehensive income/(loss)
|
30
|
|
|
(88
|
)
|
|
99
|
|
|
(77
|
)
|
||||
Comprehensive income
|
$
|
264
|
|
|
$
|
523
|
|
|
$
|
752
|
|
|
$
|
1,033
|
|
Consolidated Statements of Financial Position
|
|
|
|
|
|
|
|
|
|||
(millions)
|
August 2,
2014 |
|
|
February 1,
2014 |
|
|
August 3,
2013 |
|
|||
Assets
|
(unaudited)
|
|
|
|
|
|
(unaudited)
|
|
|||
Cash and cash equivalents, including short-term investments of
$3
, $3 and $249
|
$
|
803
|
|
|
$
|
695
|
|
|
$
|
1,018
|
|
Inventory
|
8,918
|
|
|
8,766
|
|
|
8,441
|
|
|||
Other current assets
|
1,833
|
|
|
2,112
|
|
|
1,944
|
|
|||
Total current assets
|
11,554
|
|
|
11,573
|
|
|
11,403
|
|
|||
Property and equipment
|
|
|
|
|
|
|
|
|
|||
Land
|
6,202
|
|
|
6,234
|
|
|
6,213
|
|
|||
Buildings and improvements
|
30,782
|
|
|
30,356
|
|
|
29,336
|
|
|||
Fixtures and equipment
|
5,466
|
|
|
5,583
|
|
|
5,351
|
|
|||
Computer hardware and software
|
2,683
|
|
|
2,764
|
|
|
2,532
|
|
|||
Construction-in-progress
|
735
|
|
|
843
|
|
|
1,456
|
|
|||
Accumulated depreciation
|
(14,673
|
)
|
|
(14,402
|
)
|
|
(13,483
|
)
|
|||
Property and equipment, net
|
31,195
|
|
|
31,378
|
|
|
31,405
|
|
|||
Other noncurrent assets
|
1,706
|
|
|
1,602
|
|
|
1,354
|
|
|||
Total assets
|
$
|
44,455
|
|
|
$
|
44,553
|
|
|
$
|
44,162
|
|
Liabilities and shareholders’ investment
|
|
|
|
|
|
|
|
|
|||
Accounts payable
|
$
|
7,263
|
|
|
$
|
7,683
|
|
|
$
|
7,078
|
|
Accrued and other current liabilities
|
3,767
|
|
|
3,934
|
|
|
3,705
|
|
|||
Current portion of long-term debt and other borrowings
|
306
|
|
|
1,160
|
|
|
1,833
|
|
|||
Total current liabilities
|
11,336
|
|
|
12,777
|
|
|
12,616
|
|
|||
Long-term debt and other borrowings
|
13,852
|
|
|
12,622
|
|
|
12,655
|
|
|||
Deferred income taxes
|
1,317
|
|
|
1,433
|
|
|
1,331
|
|
|||
Other noncurrent liabilities
|
1,517
|
|
|
1,490
|
|
|
1,540
|
|
|||
Total noncurrent liabilities
|
16,686
|
|
|
15,545
|
|
|
15,526
|
|
|||
Shareholders’ investment
|
|
|
|
|
|
|
|
|
|||
Common stock
|
53
|
|
|
53
|
|
|
53
|
|
|||
Additional paid-in capital
|
4,561
|
|
|
4,470
|
|
|
4,335
|
|
|||
Retained earnings
|
12,611
|
|
|
12,599
|
|
|
12,285
|
|
|||
Accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
|||
Pension and other benefit liabilities
|
(408
|
)
|
|
(422
|
)
|
|
(480
|
)
|
|||
Currency translation adjustment and cash flow hedges
|
(384
|
)
|
|
(469
|
)
|
|
(173
|
)
|
|||
Total shareholders’ investment
|
16,433
|
|
|
16,231
|
|
|
16,020
|
|
|||
Total liabilities and shareholders’ investment
|
$
|
44,455
|
|
|
$
|
44,553
|
|
|
$
|
44,162
|
|
Consolidated Statements of Cash Flows
|
|
|
|
||||
|
Six Months Ended
|
||||||
(millions) (unaudited)
|
August 2,
2014 |
|
|
August 3,
2013 |
|
||
Operating activities
|
|
|
|
|
|
||
Net earnings
|
$
|
653
|
|
|
$
|
1,110
|
|
Adjustments to reconcile net earnings to cash provided by operations:
|
|
|
|
|
|
||
Depreciation and amortization
|
1,186
|
|
|
1,079
|
|
||
Share-based compensation expense
|
42
|
|
|
55
|
|
||
Deferred income taxes
|
(304
|
)
|
|
(136
|
)
|
||
Bad debt expense
(a)
|
—
|
|
|
41
|
|
||
Gain on receivables transaction
|
—
|
|
|
(391
|
)
|
||
Loss on debt extinguishment
|
285
|
|
|
445
|
|
||
Noncash (gains)/losses and other, net
|
32
|
|
|
(2
|
)
|
||
Changes in operating accounts:
|
|
|
|
|
|
||
Accounts receivable originated at Target
|
—
|
|
|
157
|
|
||
Proceeds on sale of accounts receivable originated at Target
|
—
|
|
|
2,703
|
|
||
Inventory
|
(143
|
)
|
|
(527
|
)
|
||
Other current assets
|
303
|
|
|
(56
|
)
|
||
Other noncurrent assets
|
10
|
|
|
47
|
|
||
Accounts payable
|
(425
|
)
|
|
17
|
|
||
Accrued and other current liabilities
|
(156
|
)
|
|
(403
|
)
|
||
Other noncurrent liabilities
|
31
|
|
|
(30
|
)
|
||
Cash provided by operations
|
1,514
|
|
|
4,109
|
|
||
Investing activities
|
|
|
|
|
|
||
Expenditures for property and equipment
|
(1,052
|
)
|
|
(1,917
|
)
|
||
Proceeds from disposal of property and equipment
|
44
|
|
|
48
|
|
||
Change in accounts receivable originated at third parties
|
—
|
|
|
121
|
|
||
Proceeds from sale of accounts receivable originated at third parties
|
—
|
|
|
3,002
|
|
||
Cash paid for acquisitions, net of cash assumed
|
(20
|
)
|
|
(58
|
)
|
||
Other investments
|
46
|
|
|
73
|
|
||
Cash (required for)/provided by investing activities
|
(982
|
)
|
|
1,269
|
|
||
Financing activities
|
|
|
|
|
|
||
Change in commercial paper, net
|
109
|
|
|
(163
|
)
|
||
Additions to long-term debt
|
1,993
|
|
|
—
|
|
||
Reductions of long-term debt
|
(2,039
|
)
|
|
(3,424
|
)
|
||
Dividends paid
|
(545
|
)
|
|
(463
|
)
|
||
Repurchase of stock
|
—
|
|
|
(1,461
|
)
|
||
Stock option exercises and related tax benefit
|
55
|
|
|
363
|
|
||
Cash (required for) financing activities
|
(427
|
)
|
|
(5,148
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
3
|
|
|
4
|
|
||
Net increase in cash and cash equivalents
|
108
|
|
|
234
|
|
||
Cash and cash equivalents at beginning of period
|
695
|
|
|
784
|
|
||
Cash and cash equivalents at end of period
|
$
|
803
|
|
|
$
|
1,018
|
|
Fair Value Measurements - Recurring Basis
|
|||||||||||||||||||||||||||||||||||
|
Fair Value at
|
|
Fair Value at
|
|
Fair Value at
|
||||||||||||||||||||||||||||||
|
August 2, 2014
|
|
February 1, 2014
|
|
August 3, 2013
|
||||||||||||||||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term investments
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
249
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest rate swaps
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Prepaid forward contracts
|
40
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|||||||||
Beneficial interest asset
(b)
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|||||||||
Other noncurrent assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest rate swaps
(a)
|
—
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|||||||||
Company-owned life insurance investments
(c)
|
—
|
|
|
314
|
|
|
—
|
|
|
—
|
|
|
305
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|
—
|
|
|||||||||
Beneficial interest asset
(b)
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|||||||||
Total
|
$
|
43
|
|
|
$
|
365
|
|
|
$
|
98
|
|
|
$
|
76
|
|
|
$
|
368
|
|
|
$
|
127
|
|
|
$
|
322
|
|
|
$
|
371
|
|
|
$
|
180
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest rate swaps
(a)
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|||||||||
Total
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45
|
|
|
$
|
—
|
|
Significant Financial Instruments not Measured at Fair Value
(a)
(millions)
|
August 2, 2014
|
|
February 1, 2014
|
|
August 3, 2013
|
|||||||||||||||
Carrying
Amount
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
Fair
Value
|
|
|||||||
Debt
(b)
|
$
|
12,135
|
|
$
|
13,553
|
|
|
$
|
11,758
|
|
$
|
13,184
|
|
|
$
|
12,484
|
|
$
|
14,018
|
|
Profit-Sharing Arrangement
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(millions)
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013
(a)
|
|
||||
Profit-sharing included in U.S. Segment EBIT
|
$
|
167
|
|
|
$
|
183
|
|
|
$
|
334
|
|
|
$
|
288
|
|
Reduction of beneficial interest asset
(b)
|
(11
|
)
|
|
(29
|
)
|
|
(29
|
)
|
|
(45
|
)
|
||||
Net impact to SG&A expense
|
$
|
156
|
|
|
$
|
154
|
|
|
$
|
305
|
|
|
$
|
243
|
|
Commercial Paper
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
(dollars in millions)
|
August 2,
2014 |
|
|
August 3,
2013 |
|
August 2,
2014 |
|
|
August 3,
2013 |
|
||||
Maximum daily amount outstanding during the period
|
$
|
500
|
|
|
$
|
920
|
|
$
|
590
|
|
|
$
|
1,465
|
|
Average daily amount outstanding during the period
|
148
|
|
|
301
|
|
214
|
|
|
394
|
|
||||
Amount outstanding at period-end
|
189
|
|
|
807
|
|
189
|
|
|
807
|
|
||||
Weighted average interest rate
|
0.11
|
%
|
|
0.19
|
%
|
0.10
|
%
|
|
0.14
|
%
|
Impairments by Segment
(a)
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(millions)
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
||||
U.S.
|
$
|
46
|
|
|
$
|
15
|
|
|
$
|
59
|
|
|
$
|
25
|
|
Canadian
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Total segment impairments
|
48
|
|
|
15
|
|
|
61
|
|
|
25
|
|
||||
Unallocated impairments
(b)
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Total impairments
|
$
|
64
|
|
|
$
|
15
|
|
|
$
|
77
|
|
|
$
|
25
|
|
Data Breach Balance Sheet Rollforward
(millions)
|
Liabilities
|
|
|
Insurance receivable
|
|
||
Balance at February 1, 2014
|
$
|
61
|
|
|
$
|
44
|
|
Expenses incurred/insurance receivable recorded
(a)
|
26
|
|
|
8
|
|
||
Payments made/received
|
(35
|
)
|
|
(13
|
)
|
||
Balance at May 3, 2014
|
52
|
|
|
39
|
|
||
Expenses incurred/insurance receivable recorded
(a)
|
148
|
|
|
38
|
|
||
Payments made/received
|
(19
|
)
|
|
(7
|
)
|
||
Balance at August 2, 2014
|
$
|
182
|
|
|
$
|
70
|
|
Derivative Contracts - Effect on Results of Operations
(millions)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
Type of Contract
|
|
Classification of (Income)/Expense
|
August 2,
2014 |
|
|
August 3,
2013 |
|
August 2,
2014 |
|
|
August 3,
2013 |
|
||||
Interest rate swaps
|
|
Net interest expense
|
$
|
(9
|
)
|
|
$
|
(7
|
)
|
$
|
(13
|
)
|
|
$
|
(15
|
)
|
Share Repurchases
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(millions, except per share data)
|
August 2, 2014
(a)
|
|
|
August 3, 2013
(b)
|
|
|
August 2, 2014
(a)
|
|
|
August 3, 2013
(b)
|
|
||||
Total number of shares purchased
|
0.6
|
|
|
13.3
|
|
|
0.6
|
|
|
21.9
|
|
||||
Average price paid per share
|
$
|
55.36
|
|
|
$
|
69.57
|
|
|
$
|
55.36
|
|
|
$
|
67.41
|
|
Total investment
|
$
|
34
|
|
|
$
|
927
|
|
|
$
|
34
|
|
|
$
|
1,474
|
|
Net Pension and Postretirement
Health Care Benefits Expense
|
Pension Benefits
|
|
Postretirement Health Care Benefits
|
||||||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
(millions)
|
Aug 2,
2014 |
|
|
Aug 3,
2013 |
|
|
Aug 2,
2014 |
|
|
Aug 3,
2013 |
|
|
Aug 2,
2014 |
|
|
Aug 3,
2013 |
|
|
Aug 2,
2014 |
|
|
Aug 3,
2013 |
|
||||||||
Service cost
|
$
|
28
|
|
|
$
|
29
|
|
|
$
|
56
|
|
|
$
|
59
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Interest cost
|
37
|
|
|
34
|
|
|
75
|
|
|
69
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||||||
Expected return on assets
|
(59
|
)
|
|
(58
|
)
|
|
(117
|
)
|
|
(117
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Amortization of losses
|
17
|
|
|
25
|
|
|
33
|
|
|
50
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
3
|
|
||||||||
Amortization of prior service cost
|
(3
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
(8
|
)
|
||||||||
Total
|
$
|
20
|
|
|
$
|
28
|
|
|
$
|
41
|
|
|
$
|
56
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
Prepaid Forward Contracts on Target Common Stock
|
August 2,
2014 |
|
|
February 1,
2014 |
|
|
August 3,
2013 |
|
|||
(millions, except per share data)
|
|
|
|||||||||
Number of Shares
|
0.7
|
|
|
1.3
|
|
|
1.0
|
|
|||
Contractual Price Paid per Share
|
$
|
42.88
|
|
|
$
|
48.81
|
|
|
$
|
45.01
|
|
Fair Value
|
$
|
40
|
|
|
$
|
73
|
|
|
$
|
73
|
|
Total Cash Investment
|
$
|
29
|
|
|
$
|
63
|
|
|
$
|
46
|
|
(millions)
|
Cash Flow
Hedges
|
|
|
Currency
Translation
Adjustment
|
|
|
Pension and
Other
Benefits
|
|
|
Total
|
|
||||
February 2, 2013
|
$
|
(29
|
)
|
|
$
|
(15
|
)
|
|
$
|
(532
|
)
|
|
$
|
(576
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
(30
|
)
|
|
28
|
|
|
(2
|
)
|
||||
Amounts reclassified from AOCI
|
1
|
|
(a)
|
—
|
|
|
12
|
|
(b)
|
13
|
|
||||
May 4, 2013
|
$
|
(28
|
)
|
|
$
|
(45
|
)
|
|
$
|
(492
|
)
|
|
$
|
(565
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
(101
|
)
|
|
—
|
|
|
(101
|
)
|
||||
Amounts reclassified from AOCI
|
1
|
|
(a)
|
—
|
|
|
12
|
|
(b)
|
13
|
|
||||
August 3, 2013
|
$
|
(27
|
)
|
|
$
|
(146
|
)
|
|
$
|
(480
|
)
|
|
$
|
(653
|
)
|
February 1, 2014
|
$
|
(25
|
)
|
|
$
|
(444
|
)
|
|
$
|
(422
|
)
|
|
$
|
(891
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||
Amounts reclassified from AOCI
|
1
|
|
(a)
|
—
|
|
|
7
|
|
(b)
|
8
|
|
||||
May 3, 2014
|
$
|
(24
|
)
|
|
$
|
(383
|
)
|
|
$
|
(415
|
)
|
|
$
|
(822
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||
Amounts reclassified from AOCI
|
1
|
|
(a)
|
—
|
|
|
7
|
|
(b)
|
8
|
|
||||
August 2, 2014
|
$
|
(23
|
)
|
|
$
|
(361
|
)
|
|
$
|
(408
|
)
|
|
$
|
(792
|
)
|
Business Segment Results
|
Three Months Ended August 2, 2014
|
|
Three Months Ended August 3, 2013
|
||||||||||||||||||||
(millions)
|
U.S.
|
|
|
Canadian
|
|
|
Total
|
|
|
U.S.
|
|
|
Canadian
|
|
|
Total
|
|
||||||
Sales
|
$
|
16,957
|
|
|
$
|
449
|
|
|
$
|
17,406
|
|
|
$
|
16,841
|
|
|
$
|
275
|
|
|
$
|
17,117
|
|
Cost of sales
|
11,798
|
|
|
367
|
|
|
12,165
|
|
|
11,556
|
|
|
188
|
|
|
11,745
|
|
||||||
Gross margin
|
5,159
|
|
|
82
|
|
|
5,241
|
|
|
5,285
|
|
|
87
|
|
|
5,372
|
|
||||||
Selling, general and administrative expenses
(a)(e)
|
3,462
|
|
|
216
|
|
|
3,678
|
|
|
3,462
|
|
|
207
|
|
|
3,669
|
|
||||||
Depreciation and amortization
|
537
|
|
|
70
|
|
|
606
|
|
|
493
|
|
|
49
|
|
|
542
|
|
||||||
Segment profit
|
$
|
1,160
|
|
|
$
|
(204
|
)
|
|
$
|
957
|
|
|
$
|
1,330
|
|
|
$
|
(169
|
)
|
|
$
|
1,161
|
|
Data Breach related costs, net of insurance receivable
(c)(e)
|
|
|
|
|
(111
|
)
|
|
|
|
|
|
—
|
|
||||||||||
Reduction of beneficial interest asset
(a)(e)
|
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
(29
|
)
|
||||||
Undeveloped land impairments
(e)
|
|
|
|
|
(16
|
)
|
|
|
|
|
|
—
|
|
||||||||||
Earnings before interest expense and income taxes
|
|
|
|
|
|
|
819
|
|
|
|
|
|
|
|
|
1,132
|
|
||||||
Net interest expense
|
|
|
|
|
|
|
453
|
|
|
|
|
|
|
|
|
171
|
|
||||||
Earnings before income taxes
|
|
|
|
|
|
|
$
|
366
|
|
|
|
|
|
|
|
|
$
|
961
|
|
Business Segment Results
|
Six Months Ended August 2, 2014
|
|
Six Months Ended August 3, 2013
|
||||||||||||||||||||
(millions)
|
U.S.
|
|
|
Canadian
|
|
|
Total
|
|
|
U.S.
|
|
|
Canadian
|
|
|
Total
|
|
||||||
Sales
|
$
|
33,614
|
|
|
$
|
842
|
|
|
$
|
34,456
|
|
|
$
|
33,462
|
|
|
$
|
361
|
|
|
$
|
33,823
|
|
Cost of sales
|
23,546
|
|
|
686
|
|
|
24,232
|
|
|
23,067
|
|
|
241
|
|
|
23,308
|
|
||||||
Gross margin
|
10,068
|
|
|
156
|
|
|
10,224
|
|
|
10,395
|
|
|
120
|
|
|
10,515
|
|
||||||
Selling, general and administrative expenses
(a)(e)
|
6,788
|
|
|
434
|
|
|
7,222
|
|
|
6,842
|
|
|
400
|
|
|
7,242
|
|
||||||
Depreciation and amortization
|
1,049
|
|
|
137
|
|
|
1,186
|
|
|
984
|
|
|
94
|
|
|
1,079
|
|
||||||
Segment profit
|
$
|
2,231
|
|
|
$
|
(415
|
)
|
|
$
|
1,816
|
|
|
$
|
2,569
|
|
|
$
|
(374
|
)
|
|
$
|
2,194
|
|
Data Breach related costs, net of insurance receivable
(c)(e)
|
|
|
|
|
(129
|
)
|
|
|
|
|
|
—
|
|
||||||||||
Reduction of beneficial interest asset
(a)(e)
|
|
|
|
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
(45
|
)
|
||||||
Undeveloped land impairments
(e)
|
|
|
|
|
(16
|
)
|
|
|
|
|
|
—
|
|
||||||||||
Card brand conversion costs
(d)(e)
|
|
|
|
|
(13
|
)
|
|
|
|
|
|
—
|
|
||||||||||
Gain on receivables transaction
(b)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
391
|
|
||||||
Earnings before interest expense and income taxes
|
|
|
|
|
|
|
1,629
|
|
|
|
|
|
|
|
|
2,540
|
|
||||||
Net interest expense
|
|
|
|
|
|
|
622
|
|
|
|
|
|
|
|
|
801
|
|
||||||
Earnings before income taxes
|
|
|
|
|
|
|
$
|
1,007
|
|
|
|
|
|
|
|
|
$
|
1,739
|
|
Total Assets by Segment
(millions)
|
August 2,
2014 |
|
|
February 1,
2014 |
|
|
August 3,
2013 |
|
|||
U.S.
|
$
|
37,889
|
|
|
$
|
38,128
|
|
|
$
|
37,810
|
|
Canadian
|
6,398
|
|
|
6,254
|
|
|
6,172
|
|
|||
Total segment assets
|
44,287
|
|
|
44,382
|
|
|
43,982
|
|
|||
Unallocated assets
(a)
|
168
|
|
|
171
|
|
|
180
|
|
|||
Total assets
|
$
|
44,455
|
|
|
$
|
44,553
|
|
|
$
|
44,162
|
|
•
|
GAAP earnings per share were
$0.37
.
|
•
|
Adjusted earnings per share were
$0.78
.
|
•
|
Digital sales grew more than 30 percent in the quarter.
|
•
|
U.S. Segment transactions declined 1.3 percent, an improvement of one percentage point compared with the first quarter.
|
•
|
Canadian Segment sales increased 63.1 percent to $449 million from $275 million last year.
|
•
|
GAAP EPS includes a loss on early retirement of debt of $0.27.
|
•
|
GAAP EPS includes an $0.11 impact of net expense for what we believe to be the vast majority of actual and potential claims related to the December, 2013 data breach.
|
•
|
We paid dividends of $272 million, an increase of 18 percent from $231 million last year. In June, the Board of Directors increased the quarterly dividend from 43 cents to 52 cents per share, beginning with the dividend payable on September 10, 2014.
|
Earnings Per Share
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
||||||||||||
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
Change
|
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
Change
|
|
||||
GAAP diluted earnings per share
|
$
|
0.37
|
|
|
$
|
0.95
|
|
|
(61.5
|
)%
|
|
$
|
1.02
|
|
|
$
|
1.72
|
|
|
(40.5
|
)%
|
Adjustments
|
0.41
|
|
|
0.03
|
|
|
|
|
|
0.46
|
|
|
0.07
|
|
|
|
|
||||
Adjusted diluted earnings per share
|
$
|
0.78
|
|
|
$
|
0.98
|
|
|
(20.6
|
)%
|
|
$
|
1.48
|
|
|
$
|
1.79
|
|
|
(17.5
|
)%
|
U.S. Segment Rate Analysis
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
Gross margin rate
|
30.4
|
%
|
|
31.4
|
%
|
|
30.0
|
%
|
|
31.1
|
%
|
SG&A expense rate
|
20.4
|
|
|
20.6
|
|
|
20.2
|
|
|
20.4
|
|
EBITDA margin rate
|
10.0
|
|
|
10.8
|
|
|
9.8
|
|
|
10.6
|
|
Depreciation and amortization expense rate
|
3.2
|
|
|
2.9
|
|
|
3.1
|
|
|
2.9
|
|
EBIT margin rate
|
6.8
|
|
|
7.9
|
|
|
6.6
|
|
|
7.7
|
|
Sales by Product Category
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
Household essentials
|
27
|
%
|
|
27
|
%
|
|
27
|
%
|
|
27
|
%
|
Hardlines
|
15
|
|
|
15
|
|
|
15
|
|
|
15
|
|
Apparel and accessories
|
20
|
|
|
20
|
|
|
20
|
|
|
20
|
|
Food and pet supplies
|
20
|
|
|
20
|
|
|
21
|
|
|
21
|
|
Home furnishings and décor
|
18
|
|
|
18
|
|
|
17
|
|
|
17
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Comparable Sales
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
Comparable sales change
|
—
|
%
|
|
1.2
|
%
|
|
(0.2
|
)%
|
|
0.3
|
%
|
Drivers of change in comparable sales
|
|
|
|
|
|
|
|
|
|
|
|
Number of transactions
|
(1.3
|
)
|
|
(1.4
|
)
|
|
(1.8
|
)
|
|
(1.6
|
)
|
Average transaction amount
|
1.3
|
|
|
2.7
|
|
|
1.7
|
|
|
2.0
|
|
Selling price per unit
|
3.0
|
|
|
1.6
|
|
|
2.4
|
|
|
0.5
|
|
Units per transaction
|
(1.7
|
)
|
|
1.0
|
|
|
(0.7
|
)
|
|
1.4
|
|
Contribution to Comparable Sales Change
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
Existing stores comparable sales change
|
(0.6
|
)%
|
|
1.0
|
%
|
|
(0.7
|
)%
|
|
—
|
%
|
Digital contribution to comparable sales change
|
0.6
|
|
|
0.2
|
|
|
0.5
|
|
|
0.3
|
|
Total comparable sales change
|
—
|
%
|
|
1.2
|
%
|
|
(0.2
|
)%
|
|
0.3
|
%
|
REDcard Penetration
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
Target Debit Card
|
11.1
|
%
|
|
9.4
|
%
|
|
11.2
|
%
|
|
9.0
|
%
|
Target Credit Cards
|
9.7
|
|
|
9.3
|
|
|
9.4
|
|
|
8.9
|
|
Total REDcard Penetration
|
20.8
|
%
|
|
18.7
|
%
|
|
20.6
|
%
|
|
17.9
|
%
|
Change in Number of Stores
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
Beginning store count
|
1,789
|
|
|
1,784
|
|
|
1,793
|
|
|
1,778
|
|
Opened
|
6
|
|
|
4
|
|
|
10
|
|
|
10
|
|
Closed
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
Ending store count
|
1,795
|
|
|
1,788
|
|
|
1,795
|
|
|
1,788
|
|
Number of stores remodeled during the period
|
13
|
|
|
36
|
|
|
26
|
|
|
68
|
|
Number of Stores and Retail Square Feet
|
Number of Stores
|
|
Retail Square Feet
(a)
|
||||||||||||||
August 2,
2014 |
|
|
February 1,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
February 1,
2014 |
|
|
August 3,
2013 |
|
|
General merchandise stores
|
259
|
|
|
289
|
|
|
324
|
|
|
30,121
|
|
|
33,843
|
|
|
38,094
|
|
Expanded food assortment stores
|
1,278
|
|
|
1,245
|
|
|
1,206
|
|
|
165,198
|
|
|
160,891
|
|
|
155,868
|
|
SuperTarget stores
|
249
|
|
|
251
|
|
|
251
|
|
|
44,152
|
|
|
44,500
|
|
|
44,500
|
|
CityTarget stores
|
8
|
|
|
8
|
|
|
7
|
|
|
820
|
|
|
820
|
|
|
703
|
|
TargetExpress stores
|
1
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
Total
|
1,795
|
|
|
1,793
|
|
|
1,788
|
|
|
240,312
|
|
|
240,054
|
|
|
239,165
|
|
Canadian Segment Results
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|||||||||||||
(dollars in millions)
|
August 2,
2014 |
|
|
August 3,
2013 |
|
Percent
Change
|
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
Percent
Change
|
|
|
||||
Sales
|
$
|
449
|
|
|
$
|
275
|
|
63.1
|
|
%
|
$
|
842
|
|
|
$
|
361
|
|
|
133.1
|
|
%
|
Cost of sales
|
367
|
|
|
188
|
|
94.7
|
|
|
686
|
|
|
241
|
|
|
184.3
|
|
|
||||
Gross margin
|
82
|
|
|
87
|
|
(5.2
|
)
|
|
156
|
|
|
120
|
|
|
30.2
|
|
|
||||
SG&A expenses
(a)
|
216
|
|
|
207
|
|
4.8
|
|
|
434
|
|
|
400
|
|
|
8.8
|
|
|
||||
EBITDA
|
(134
|
)
|
|
(120
|
)
|
12.1
|
|
|
(278
|
)
|
|
(280
|
)
|
|
(0.4
|
)
|
|
||||
Depreciation and amortization
(b)
|
70
|
|
|
49
|
|
42.1
|
|
|
137
|
|
|
94
|
|
|
45.2
|
|
|
||||
EBIT
(c)
|
$
|
(204
|
)
|
|
$
|
(169
|
)
|
20.8
|
|
%
|
$
|
(415
|
)
|
|
$
|
(374
|
)
|
|
11.1
|
|
%
|
Canadian Segment Rate Analysis
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
Gross margin rate
|
18.4
|
%
|
|
31.6
|
%
|
|
18.5
|
%
|
|
33.2
|
%
|
SG&A expense rate
|
48.3
|
|
|
75.2
|
|
|
51.6
|
|
|
110.6
|
|
EBITDA margin rate
|
(30.0
|
)
|
|
(43.6
|
)
|
|
(33.1
|
)
|
|
(77.4
|
)
|
Depreciation and amortization expense rate
|
15.6
|
|
|
17.9
|
|
|
16.3
|
|
|
26.1
|
|
EBIT margin rate
|
(45.6
|
)
|
|
(61.5
|
)
|
|
(49.4
|
)
|
|
(103.6
|
)
|
Sales by Product Category
|
August 2, 2014
|
||||
|
Three Months Ended
|
Six Months Ended
|
|||
Household essentials
|
18
|
%
|
|
18
|
%
|
Hardlines
|
18
|
|
|
18
|
|
Apparel and accessories
|
29
|
|
|
27
|
|
Food and pet supplies
|
12
|
|
|
14
|
|
Home furnishings and décor
|
23
|
|
|
23
|
|
Total
|
100
|
%
|
|
100
|
%
|
Comparable Sales
|
Three Months Ended
August 2, 2014
|
|
|
||
Comparable sales change
|
(11.4
|
)%
|
Drivers of change in comparable sales
|
|
|
Number of transactions
|
(1.9
|
)
|
Average transaction amount
|
(7.9
|
)
|
Selling price per unit
|
0.7
|
|
Units per transaction
|
(8.5
|
)
|
REDcard Penetration
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
Target Credit Cards
|
2.5
|
%
|
|
1.1
|
%
|
|
2.2
|
%
|
|
1.0
|
%
|
Target Debit Card
|
2.3
|
|
|
1.2
|
|
|
2.2
|
|
|
1.2
|
|
Total REDcard Penetration
|
4.8
|
%
|
|
2.3
|
%
|
|
4.4
|
%
|
|
2.2
|
%
|
Change in Number of Stores
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
August 2,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
August 3,
2013 |
|
|
Beginning store count
|
127
|
|
|
24
|
|
|
124
|
|
|
—
|
|
Opened
|
3
|
|
|
44
|
|
|
6
|
|
|
68
|
|
Ending store count
|
130
|
|
|
68
|
|
|
130
|
|
|
68
|
|
Number of Stores and Retail Square Feet
|
Number of Stores
|
|
Retail Square Feet
(a)
|
||||||||||||||
August 2,
2014 |
|
|
February 1,
2014 |
|
|
August 3,
2013 |
|
|
August 2,
2014 |
|
|
February 1,
2014 |
|
|
August 3,
2013 |
|
|
General merchandise stores
|
130
|
|
|
124
|
|
|
68
|
|
|
15,025
|
|
|
14,189
|
|
|
7,774
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||||||||||||||
(millions, except per share data)
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
||||||
GAAP diluted earnings per share
|
|
|
|
|
|
$
|
0.37
|
|
|
|
|
|
|
$
|
0.95
|
|
||||||||
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss on early retirement of debt
|
|
$
|
285
|
|
|
$
|
174
|
|
|
$
|
0.27
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Data Breach related costs, net of insurance receivable
(a)
|
|
111
|
|
|
71
|
|
|
0.11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reduction of beneficial interest asset
|
|
11
|
|
|
7
|
|
|
0.01
|
|
|
29
|
|
|
18
|
|
|
0.03
|
|
||||||
Undeveloped land impairments
|
|
16
|
|
|
9
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Resolution of income tax matters
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||||
Adjusted diluted earnings per share
|
|
|
|
|
|
$
|
0.78
|
|
|
|
|
|
|
$
|
0.98
|
|
|
|
Six Months Ended
|
||||||||||||||||||||||
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||||||||||||||
(millions, except per share data)
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
||||||
GAAP diluted earnings per share
|
|
|
|
|
|
$
|
1.02
|
|
|
|
|
|
|
$
|
1.72
|
|
||||||||
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss on early retirement of debt
|
|
$
|
285
|
|
|
$
|
174
|
|
|
$
|
0.27
|
|
|
$
|
445
|
|
|
$
|
269
|
|
|
$
|
0.42
|
|
Data Breach related costs, net of insurance receivable
(a)
|
|
129
|
|
|
83
|
|
|
0.13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reduction of beneficial interest asset
|
|
29
|
|
|
18
|
|
|
0.03
|
|
|
45
|
|
|
28
|
|
|
0.04
|
|
||||||
Undeveloped land impairments
|
|
16
|
|
|
9
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Card brand conversion costs
(b)
|
|
13
|
|
|
8
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Resolution of income tax matters
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(0.01
|
)
|
||||||
Gain on receivables transaction
(c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(391
|
)
|
|
(247
|
)
|
|
(0.38
|
)
|
||||||
Adjusted diluted earnings per share
|
|
|
|
|
|
$
|
1.48
|
|
|
|
|
|
|
$
|
1.79
|
|
Credit Ratings
|
Moody’s
|
Standard and Poor’s
|
Fitch
|
Long-term debt
|
A2
|
A
|
A-
|
Commercial paper
|
P-1
|
A-1
|
F2
|
Period
|
Total Number
of Shares
Purchased
(a)(b)
|
|
|
Average
Price
Paid per
Share
(a)
|
|
|
Total Number of
Shares Purchased
as Part of the
Current Program
(a)
|
|
|
Dollar Value of
Shares that May
Yet Be Purchased
Under the Program
|
|
||
May 4, 2014 through May 31, 2014
|
524,760
|
|
|
$
|
55.66
|
|
|
49,670,447
|
|
|
$
|
1,875,262,275
|
|
June 1, 2014 through July 5, 2014
|
5,651
|
|
|
—
|
|
|
49,670,447
|
|
|
1,875,262,275
|
|
||
July 6, 2014 through August 2, 2014
|
94,590
|
|
|
53.63
|
|
|
49,762,689
|
|
|
1,870,315,793
|
|
||
|
625,001
|
|
|
$
|
55.36
|
|
|
49,762,689
|
|
|
$
|
1,870,315,793
|
|
(3)A
|
Amended and Restated Articles of Incorporation (as amended through June 9, 2010)
(1)
|
|
|
(3)B
|
By-laws (as amended through September 9, 2009)
(2)
|
|
|
(10)AA
|
Advisory Period Letter to Gregg W. Steinhafel, dated May 21, 2014
|
|
|
(10)BB
|
Restricted Stock Unit Agreement with John J. Mulligan, effective as of May 22, 2014
|
|
|
(10)CC
|
Employment Offer Letter to Brian C. Cornell, dated July 26, 2014
|
|
|
(10)DD
|
Make-Whole Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21, 2014
|
|
|
(10)EE
|
Make-Whole Performance-Based Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21, 2014
|
|
|
(12)
|
Statements of Computations of Ratios of Earnings to Fixed Charges
|
|
|
(31)A
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
(31)B
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
(32)A
|
Certification of the Chief Executive Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
(32)B
|
Certification of the Chief Financial Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
TARGET CORPORATION
|
||
|
|
||
|
|
||
Dated: August 27, 2014
|
By:
|
/s/ John J. Mulligan
|
|
|
|
John J. Mulligan
|
|
|
|
Executive Vice President,
|
|
|
|
Chief Financial Officer and
|
|
|
|
Chief Accounting Officer
|
|
|
|
(Duly Authorized Officer and
|
|
|
|
Principal Financial Officer)
|
|
|
|
|
|
Exhibit
|
|
Description
|
|
Manner of Filing
|
|
|
|
|
|
(3)A
|
|
Amended and Restated Articles of Incorporation (as amended through June 9, 2010)
|
|
Incorporated by Reference
|
|
|
|
|
|
(3)B
|
|
By-Laws (as amended through September 9, 2009)
|
|
Incorporated by Reference
|
|
|
|
|
|
(10)AA
|
|
Advisory Period Letter to Gregg W. Steinhafel, dated May 21, 2014
|
|
Filed Electronically
|
|
|
|
|
|
(10)BB
|
|
Restricted Stock Unit Agreement with John J. Mulligan, effective as of May 22, 2014
|
|
Filed Electronically
|
|
|
|
|
|
(10)CC
|
|
Employment Offer Letter to Brian C. Cornell, dated July 26, 2014
|
|
Filed Electronically
|
|
|
|
|
|
(10)DD
|
|
Make-Whole Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21, 2014
|
|
Filed Electronically
|
|
|
|
|
|
(10)EE
|
|
Make-Whole Performance-Based Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21, 2014
|
|
Filed Electronically
|
|
|
|
|
|
(12)
|
|
Statements of Computations of Ratios of Earnings to Fixed Charges
|
|
Filed Electronically
|
|
|
|
|
|
(31)A
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed Electronically
|
|
|
|
|
|
(31)B
|
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed Electronically
|
|
|
|
|
|
(32)A
|
|
Certification of the Chief Executive Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed Electronically
|
|
|
|
|
|
(32)B
|
|
Certification of the Chief Financial Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed Electronically
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
Filed Electronically
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
Filed Electronically
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
Filed Electronically
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
Filed Electronically
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
Filed Electronically
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
Filed Electronically
|
•
|
RSUs
. Subject to your continued employment through the applicable vesting date and, in order to enable such awards to qualify for the exception to the deduction limitation under Section 162(m) of the Internal Revenue Code of 1986, as amended, and the Company obtaining positive net earnings for its U.S. operations (the “
Profitability Goal
”) for the third and fourth quarters of the 2014 fiscal year, 30 percent of the Make-Whole Equity Grant (
i.e.
, if there is no Retained Value, $5,775,000) shall vest and be settled in March 2015 (the “
RSUs
”).
|
•
|
PBRSUs
. Subject to the achievement of the Profitability Goal for the Company’s 2015 fiscal year and your continued employment through the applicable vesting date, the remainder of the Make-Whole Equity Grant (
i.e.
, if there is no Retained Value, $13,475,000) shall vest and be settled 1/3 on each of March 2016, March 2017 and March 2018 (the “
PBRSUs
”); provided that the number of such PBRSUs that will actually become earned, vested and settled on the applicable vesting date may increase or decrease by up to 25 percent based on the Company’s relative total shareholder return (“
TSR
”) as calculated below. TSR will be based on a hypothetical investment of $100 in the Company and each of the members of the Company’s retail peer group (the “
Peers
”) as of the Start Date and comparing it with the value at the end of the fiscal year immediately preceding the scheduled vesting dates set forth above, assuming the reinvestment of all dividends paid during the fiscal year; provided that the stock price of the Company and each of its Peers on the Start Date and the end of the fiscal year immediately preceding each of the scheduled vesting dates shall be deemed to be the average of each company’s stock price for the 90 calendar days immediately preceding the applicable measurement dates. If the Company’s TSR is in the top 33 percent of its Peers, you will be eligible to earn 125 percent of the targeted value of the tranche scheduled to vest during such period; if the Company’s TSR is in the middle 33 percent of its Peers, you will be eligible to earn 100 percent of the targeted value of the tranche scheduled to vest during such period; and if the Company’s TSR is in the bottom 33 percent of its Peers, you will be eligible to earn 75 percent of the targeted value of the tranche scheduled to vest during such period.
|
•
|
Treatment of Make-Whole Equity Upon Involuntary Termination
. Notwithstanding the foregoing, upon a termination of your employment that would give rise to severance benefits under the Company’s Officer Income Continuance Policy Statement or its successor, as it may be amended from time to time (the “
ICP
”), subject to (i) your execution and non-revocation of a release and any other terms and conditions of
|
|
|
|
Very truly yours,
|
||
|
||
/s/ Douglas M. Baker, Jr.
|
||
Name: Douglas M. Baker, Jr.
|
||
Title:
|
|
Member, Compensation Committee
Target Corporation Board of Directors
|
|
/s/ Brian Cornell
|
Brian Cornell
|
|
Date: July 26, 2014
|
Payout Schedule
|
|
TSR Performance Ranking
|
Payout Percentage of the Tranche Goal Payout
|
1-5
|
125%
|
6-10
|
100%
|
11-15
|
75%
|
Ratio of Earnings to Fixed Charges
|
Six Months Ended
|
|
Fiscal Year Ended
|
|||||||||||||||||||
(dollars in millions)
|
Aug 2,
2014 |
|
Aug 3,
2013 |
|
|
Feb 1,
2014 |
|
Feb 2,
2013 |
|
Jan 28,
2012 |
|
Jan 29,
2011 |
|
Jan 30,
2010 |
|
|||||||
Earnings from continuing operations before income taxes
|
$
|
1,007
|
|
$
|
1,739
|
|
|
$
|
3,103
|
|
$
|
4,609
|
|
$
|
4,456
|
|
$
|
4,495
|
|
$
|
3,872
|
|
Capitalized interest, net
|
(5
|
)
|
(7
|
)
|
|
(14
|
)
|
(12
|
)
|
5
|
|
2
|
|
(9
|
)
|
|||||||
Adjusted earnings from continuing operations before income taxes
|
1,002
|
|
1,732
|
|
|
3,089
|
|
4,597
|
|
4,461
|
|
4,497
|
|
3,863
|
|
|||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense
(a)
|
353
|
|
374
|
|
|
718
|
|
799
|
|
797
|
|
776
|
|
830
|
|
|||||||
Interest portion of rental expense
|
56
|
|
55
|
|
|
110
|
|
111
|
|
111
|
|
110
|
|
105
|
|
|||||||
Total fixed charges
|
409
|
|
429
|
|
|
828
|
|
910
|
|
908
|
|
886
|
|
935
|
|
|||||||
Earnings from continuing operations before income taxes and fixed charges
(b)
|
$
|
1,411
|
|
$
|
2,161
|
|
|
$
|
3,917
|
|
$
|
5,507
|
|
$
|
5,369
|
|
$
|
5,383
|
|
$
|
4,798
|
|
Ratio of earnings to fixed charges
|
3.45
|
|
5.04
|
|
|
4.73
|
|
6.05
|
|
5.91
|
|
6.08
|
|
5.13
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Target Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 27, 2014
|
|
/s/ Brian C. Cornell
|
Brian C. Cornell
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Target Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 27, 2014
|
|
/s/ John J. Mulligan
|
John J. Mulligan
|
Executive Vice President and Chief Financial Officer
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 27, 2014
|
|
/s/ Brian C. Cornell
|
Brian C. Cornell
|
Chairman and Chief Executive Officer
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 27, 2014
|
|
/s/ John J. Mulligan
|
John J. Mulligan
|
Executive Vice President and Chief Financial Officer
|