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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-K
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(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended January 31, 2015
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission file number
1-6049
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Minnesota
(State or other jurisdiction of
incorporation or organization)
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41-0215170
(I.R.S. Employer
Identification No.)
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1000 Nicollet Mall, Minneapolis, Minnesota
(Address of principal executive offices)
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55403
(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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DOCUMENTS INCORPORATED BY REFERENCE
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Portions of Target's Proxy Statement to be filed on or about April 27, 2015 are incorporated into Part III.
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Owned Brands
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Archer Farms®
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Market Pantry®
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Threshold™
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Simply Balanced™
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Merona®
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up & up®
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Boots & Barkley®
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Room Essentials®
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Wine Cube®
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Circo®
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Smith & Hawken®
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Xhilaration®
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Embark®
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Spritz™
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Gilligan & O'Malley®
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Sutton & Dodge®
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Exclusive Brands
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Assets® by Sarah Blakely
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dENiZEN™ from Levi's®
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Nate Berkus for Target®
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Ava & Viv®
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Fieldcrest®
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Nick & Nora®
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C9 by Champion®
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Genuine Kids from OshKosh®
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Papyrus®
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Carlton®
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Just One You made by Carter's
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Shaun White
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Chefmate®
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Kid Made Modern®
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Simply Shabby Chic®
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Cherokee®
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Liz Lange® for Target
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Sonia Kashuk®
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Converse® One Star®
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Mossimo Supply Company®
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U.S. Stores at January 31, 2015
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Stores
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Retail Sq. Ft.
(in thousands)
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Stores
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Retail Sq. Ft.
(in thousands)
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Alabama
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22
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3,150
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Montana
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7
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780
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Alaska
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3
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504
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Nebraska
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14
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2,006
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Arizona
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47
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6,263
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Nevada
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17
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2,230
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Arkansas
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9
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1,165
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New Hampshire
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9
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1,148
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California
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268
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35,560
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New Jersey
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44
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5,837
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Colorado
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41
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6,215
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New Mexico
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10
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1,185
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Connecticut
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20
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2,672
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New York
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71
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9,747
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Delaware
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3
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440
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North Carolina
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49
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6,496
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District of Columbia
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1
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179
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North Dakota
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4
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554
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Florida
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123
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17,311
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Ohio
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63
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7,902
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Georgia
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52
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7,099
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Oklahoma
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16
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2,285
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Hawaii
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4
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695
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Oregon
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19
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2,280
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Idaho
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6
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664
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Pennsylvania
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65
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8,549
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Illinois
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88
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12,159
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Rhode Island
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4
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517
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Indiana
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32
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4,271
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South Carolina
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19
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2,359
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Iowa
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21
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2,925
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South Dakota
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5
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580
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Kansas
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18
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2,473
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Tennessee
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31
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3,990
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Kentucky
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14
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1,660
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Texas
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148
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20,872
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Louisiana
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16
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2,246
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Utah
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13
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1,953
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Maine
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5
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630
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Vermont
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—
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—
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Maryland
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38
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4,938
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Virginia
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57
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7,650
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Massachusetts
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37
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4,869
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Washington
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37
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4,328
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Michigan
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56
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6,725
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West Virginia
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6
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755
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Minnesota
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75
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10,708
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Wisconsin
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39
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4,773
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Mississippi
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6
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743
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Wyoming
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2
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187
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Missouri
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36
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4,736
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Total
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1,790
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239,963
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U.S. Stores and Distribution Centers at January 31, 2015
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Stores
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Distribution
Centers
(a)
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Owned
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1,536
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33
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Leased
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99
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5
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Owned buildings on leased land
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155
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—
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Total
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1,790
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38
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Name
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Title and Business Experience
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Age
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Timothy R. Baer
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Executive Vice President, Chief Legal Officer and Corporate Secretary since March 2007.
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54
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Casey L. Carl
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Chief Strategy and Innovation Officer since December 2014. President, Omnichannel and Senior Vice President, Enterprise Strategy from July 2014 to December 2014. President, Multichannel, from November 2011 to July 2014. From July 2008 to November 2011, Mr. Carl held several leadership positions with Target in Merchandising.
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39
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Brian C. Cornell
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Chairman of the Board and Chief Executive Officer since August 2014. Chief Executive Officer of PepsiCo Americas Foods, a division of PepsiCo, Inc., a multinational food and beverage corporation, from March 2012 to July 2014. Chief Executive Officer and President of Sam's Club, a division of Wal-Mart Stores, Inc., a discount retailer, and Executive Vice President of Wal-Mart Stores, Inc. from April 2009 to January 2012.
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56
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Jeffrey J. Jones II
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Executive Vice President and Chief Marketing Officer since April 2012. Partner and President of McKinney Ventures LLC, an advertising agency, from March 2006 to March 2012.
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47
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Jodeen A. Kozlak
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Executive Vice President and Chief Human Resources Officer since March 2007.
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51
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John J. Mulligan
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Executive Vice President and Chief Financial Officer since April 2012. Interim Chief Executive Officer from May 2014 to August 2014. Senior Vice President, Treasury, Accounting and Operations from February 2010 to March 2012. Vice President, Pay and Benefits from February 2007 to February 2010.
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49
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Jacqueline Hourigan Rice
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Senior Vice President, Chief Risk and Compliance Officer since December 2014. Chief Compliance Officer of General Motors Company, a vehicle manufacturer, from March 2013 to November 2014. Executive Director, Global Ethics & Compliance of General Motors Company from January 2010 to February 2013.
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43
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Tina M. Tyler
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Executive Vice President and Chief Stores Officer since January 2011. Senior Vice President, New Business Development from February 2010 to January 2011. Senior Vice President, Stores from February 2001 to February 2010.
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49
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Kathryn A. Tesija
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Executive Vice President and Chief Merchandising and Supply Chain Officer since October 2012. Executive Vice President, Merchandising from May 2008 to September 2012.
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52
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Laysha L. Ward
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Executive Vice President and Chief Corporate Social Responsibility Officer since December 2014. President, Community Relations and Target Foundation from July 2008 to December 2014.
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47
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Period
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Total Number
of Shares
Purchased
(a)(b)
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Average
Price Paid
per Share
(a)(b)
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Total Number of
Shares Purchased
as Part of the
Current Program
(a)
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Dollar Value of
Shares that May
Yet Be Purchased
Under the Program
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November 2, 2014 through November 29, 2014
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129,608
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$
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51.09
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49,877,874
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$
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1,864,685,654
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November 30, 2014 through January 3, 2015
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37,337
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48.88
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49,915,211
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1,862,860,655
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January 4, 2015 through January 31, 2015
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—
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—
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49,915,211
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1,862,860,655
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166,945
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$
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50.59
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49,915,211
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$
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1,862,860,655
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(a)
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The table above includes shares reacquired upon settlement of prepaid forward contracts. At
January 31, 2015
, we held asset positions in prepaid forward contracts for 0.5 million shares of our common stock, for a total cash investment of $21.5 million, or an average per share price of $41.13. 0.2 million shares were reacquired under such contracts during the fourth quarter. Refer to Notes 23 and 25 of the Financial Statements for further details of these contracts.
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(b)
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The number of shares above includes shares of common stock reacquired from team members who tendered owned shares to i) satisfy the tax withholding on equity awards as part of our long-term incentive plans or ii) satisfy the exercise price on stock option exercises. For the three months ended
January 31, 2015
, 14,423 shares were reacquired at an weighted average per share price of $68.73 pursuant to our long-term incentive plan.
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Fiscal Years Ended
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|||||||||||||||||
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January 30,
2010 |
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January 29,
2011 |
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January 28,
2012 |
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February 2,
2013 |
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February 1,
2014 |
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January 31,
2015 |
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Target
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$
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100.00
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$
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107.69
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$
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101.31
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$
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126.61
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$
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120.09
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$
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161.07
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S&P 500 Index
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100.00
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121.26
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127.72
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150.20
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180.70
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206.41
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Previous Peer Group
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100.00
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114.99
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127.86
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161.32
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194.44
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243.04
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Peer Group
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100.00
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114.34
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127.28
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162.13
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196.95
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244.19
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As of or for the Fiscal Year Ended
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|||||||||||||||||
(millions, except per share data)
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2014
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2013
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2012
(a)
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2011
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2010
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2009
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||||||
Total revenues
(b)
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$
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72,618
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$
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71,279
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$
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73,301
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$
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69,865
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$
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67,390
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$
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65,357
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Net (Loss)/Earnings
|
|
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||||||||||||
Continuing operations
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2,449
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2,694
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3,315
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3,049
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2,920
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|
2,488
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||||||
Discontinued operations
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(4,085
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)
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(723
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)
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(316
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)
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(120
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)
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—
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—
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||||||
Net (loss)/earnings
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(1,636
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)
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1,971
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|
2,999
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2,929
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|
2,920
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|
2,488
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||||||
Basic (Loss)/Earnings Per Share
|
|
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||||||||||||
Continuing operations
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3.86
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4.24
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5.05
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4.49
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|
4.03
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|
3.31
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||||||
Discontinued operations
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(6.44
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)
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(1.14
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)
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(0.48
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)
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(0.18
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)
|
—
|
|
—
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||||||
Basic (loss)/earnings per share
|
(2.58
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)
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3.10
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4.57
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|
4.31
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4.03
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3.31
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||||||
Diluted (Loss)/Earnings Per Share
|
|
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|
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||||||||||||
Continuing operations
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3.83
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4.20
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5.00
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4.46
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4.00
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3.30
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||||||
Discontinued operations
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(6.38
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)
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(1.13
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)
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(0.48
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)
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(0.18
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)
|
—
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|
—
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||||||
Diluted (loss)/earnings per share
|
(2.56
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)
|
3.07
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4.52
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4.28
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|
4.00
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3.30
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||||||
Cash dividends declared per share
|
1.99
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|
1.65
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|
1.38
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1.15
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0.92
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0.67
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||||||
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||||||||||||
Total assets
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41,404
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|
44,553
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|
48,163
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46,630
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43,705
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44,533
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Long-term debt, including current portion
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12,796
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|
12,572
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|
16,359
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|
16,225
|
|
15,726
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|
16,814
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(a)
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Consisted of 53 weeks.
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(b)
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For 2014 and 2013, total revenues include sales generated by our retail operations. For 2012 and prior, total revenues include sales generated by our retail operations and credit card revenues.
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•
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GAAP earnings per share were
$(2.56)
, including dilution of
$(6.38)
related to discontinued operations.
|
•
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Adjusted earnings per share from continuing operations were
$4.27
.
|
•
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Comparable sales grew
1.3
percent. Digital channel sales growth of more than 30 percent contributed 0.7 percentage points to 2014 comparable sales growth.
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•
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We paid dividends of
$1,205 million
in 2014, an increase of 19.8 percent above 2013.
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Earnings Per Share From
Continuing Operations
|
|
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Percent Change
|
|||||||||
2014
|
|
2013
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|
2012
(a)
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2014/2013
|
|
2013/2012
|
|
||||
GAAP diluted earnings per share
|
$
|
3.83
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$
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4.20
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$
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5.00
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(8.8
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)%
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(16.1
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)%
|
Adjustments
|
0.44
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|
0.18
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(0.23
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)
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Adjusted diluted earnings per share
|
$
|
4.27
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$
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4.38
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$
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4.76
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(2.6
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)%
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(7.9
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)%
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(a)
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Consisted of 53 weeks.
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Percent Change
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|||||||||
(dollars in millions)
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2014
|
|
2013
|
|
2012
(a)
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2014/2013
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2013/2012
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|||
Sales
|
$
|
72,618
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|
$
|
71,279
|
|
$
|
71,960
|
|
1.9
|
%
|
(0.9
|
)%
|
Cost of sales
|
51,278
|
|
50,039
|
|
50,568
|
|
2.5
|
|
(1.0
|
)
|
|||
Gross margin
|
21,340
|
|
21,240
|
|
21,392
|
|
0.5
|
|
(0.7
|
)
|
|||
SG&A expenses
(b)
|
14,450
|
|
14,285
|
|
13,759
|
|
1.2
|
|
3.8
|
|
|||
EBITDA
|
6,890
|
|
6,955
|
|
7,633
|
|
(0.9
|
)
|
(8.9
|
)
|
|||
Depreciation and amortization
|
2,129
|
|
1,996
|
|
2,044
|
|
6.7
|
|
(2.4
|
)
|
|||
EBIT
|
$
|
4,761
|
|
$
|
4,959
|
|
$
|
5,589
|
|
(4.0
|
)%
|
(11.3
|
)%
|
(a)
|
Consisted of 53 weeks.
|
(b)
|
SG&A includes credit card revenues and expenses for all periods presented prior to the March 2013 sale of our U.S. consumer credit card portfolio to TD. For 2014 and 2013, SG&A also includes $682 million and $653 million, respectively, of profit-sharing income from the arrangement with TD.
|
Rate Analysis
|
2014
|
|
2013
|
|
2012
(a)
|
|
Gross margin rate
|
29.4
|
%
|
29.8
|
%
|
29.7
|
%
|
SG&A expense rate
|
19.9
|
|
20.0
|
|
19.1
|
|
EBITDA margin rate
|
9.5
|
|
9.8
|
|
10.6
|
|
Depreciation and amortization expense rate
|
2.9
|
|
2.8
|
|
2.8
|
|
EBIT margin rate
|
6.6
|
|
7.0
|
|
7.8
|
|
(a)
|
Consisted of 53 weeks.
|
Contribution to Comparable Sales Change
|
2014
|
|
2013
|
|
2012
|
|
Stores channel comparable sales change
|
0.7
|
%
|
(0.7
|
)%
|
2.6
|
%
|
Digital channel contribution to comparable sales change
|
0.7
|
|
0.3
|
|
0.1
|
|
Total comparable sales change
|
1.3
|
%
|
(0.4
|
)%
|
2.7
|
%
|
Sales by Product Category
|
Percentage of Sales
|
|||||
|
2014
|
|
2013
|
|
2012
|
|
Household essentials
(a)
|
25
|
%
|
25
|
%
|
25
|
%
|
Hardlines
(b)
|
18
|
|
18
|
|
18
|
|
Apparel and accessories
(c)
|
19
|
|
19
|
|
19
|
|
Food and pet supplies
(d)
|
21
|
|
21
|
|
20
|
|
Home furnishings and décor
(e)
|
17
|
|
17
|
|
18
|
|
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Includes pharmacy, beauty, personal care, baby care, cleaning and paper products.
|
(b)
|
Includes electronics (including video game hardware and software), music, movies, books, computer software, sporting goods and toys.
|
(c)
|
Includes apparel for women, men, boys, girls, toddlers, infants and newborns, as well as intimate apparel, jewelry, accessories and shoes.
|
(d)
|
Includes dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce and pet supplies.
|
(e)
|
Includes furniture, lighting, kitchenware, small appliances, home décor, bed and bath, home improvement, automotive and seasonal merchandise such as patio furniture and holiday décor.
|
Change in Number of Stores
|
2014
|
|
2013
|
|
Beginning store count
|
1,793
|
|
1,778
|
|
Opened
|
16
|
|
19
|
|
Closed
|
(19
|
)
|
(4
|
)
|
Relocated
|
—
|
|
—
|
|
Ending store count
|
1,790
|
|
1,793
|
|
Number of stores remodeled during the year
|
39
|
|
100
|
|
Number of Stores and
Retail Square Feet |
Number of Stores
|
|
Retail Square Feet
(a)
|
||||||
January 31, 2015
|
|
February 1, 2014
|
|
|
January 31, 2015
|
|
February 1, 2014
|
|
|
Expanded food assortment stores
|
1,292
|
|
1,245
|
|
|
167,026
|
|
160,891
|
|
SuperTarget stores
|
249
|
|
251
|
|
|
44,151
|
|
44,500
|
|
Target general merchandise stores
|
240
|
|
289
|
|
|
27,945
|
|
33,843
|
|
CityTarget stores
|
8
|
|
8
|
|
|
820
|
|
820
|
|
TargetExpress
|
1
|
|
—
|
|
|
21
|
|
—
|
|
Total
|
1,790
|
|
1,793
|
|
|
239,963
|
|
240,054
|
|
(a)
|
In thousands, reflects total square feet less office, distribution center and vacant space.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||||||||||||||||||
(millions, except per share data)
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
|
Pretax
|
|
|
Net of Tax
|
|
|
Per Share Amounts
|
|
|||||||||
GAAP diluted earnings per share from continuing operations
|
|
|
|
|
|
$
|
3.83
|
|
|
|
|
|
|
$
|
4.20
|
|
|
|
|
|
|
$
|
5.00
|
|
||||||||||||
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loss on early retirement of debt
|
|
$
|
285
|
|
|
$
|
173
|
|
|
$
|
0.27
|
|
|
$
|
445
|
|
|
$
|
270
|
|
|
$
|
0.42
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Data Breach-related costs, net of insurance receivable
(a)
|
|
145
|
|
|
94
|
|
|
0.15
|
|
|
17
|
|
|
11
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Reduction of beneficial interest asset
(b)
|
|
53
|
|
|
32
|
|
|
0.05
|
|
|
98
|
|
|
61
|
|
|
0.09
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other
(c)
|
|
29
|
|
|
18
|
|
|
0.03
|
|
|
64
|
|
|
40
|
|
|
0.06
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Gain on receivables transaction
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(391
|
)
|
|
(247
|
)
|
|
(0.38
|
)
|
|
(152
|
)
|
|
(97
|
)
|
|
(0.15
|
)
|
|||||||||
Resolution of income tax matters
|
|
—
|
|
|
(35
|
)
|
|
(0.06
|
)
|
|
—
|
|
|
(16
|
)
|
|
(0.03
|
)
|
|
—
|
|
|
(58
|
)
|
|
(0.09
|
)
|
|||||||||
Adjusted diluted earnings per share from continuing operations
|
|
|
|
|
|
$
|
4.27
|
|
|
|
|
|
|
$
|
4.38
|
|
|
|
|
|
|
$
|
4.76
|
|
(a)
|
Refer to Note 17 of the Financial Statements.
|
(b)
|
Refer to Note 7 of the Financial Statements.
|
(c)
|
2014 includes impairments of $16 million related to undeveloped land in the U.S. and $13 million of expense related to converting co-branded card program to MasterCard. 2013 includes a
$23 million
workforce-reduction charge primarily related to severance and benefits costs, a
$22 million
charge related to part-time team member health benefit changes, and
$19 million
in impairment charges related to certain parcels of undeveloped land.
|
Credit Ratings
|
Moody's
|
Standard and Poor's
|
Fitch
|
Long-term debt
|
A2
|
A
|
A-
|
Commercial paper
|
P-1
|
A-1
|
F2
|
Commercial Paper
|
|
|
|
||||||
(dollars in millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Maximum daily amount outstanding during the year
|
$
|
590
|
|
$
|
1,465
|
|
$
|
970
|
|
Average amount outstanding during the year
|
129
|
|
408
|
|
120
|
|
|||
Amount outstanding at year-end
|
—
|
|
80
|
|
970
|
|
|||
Weighted average interest rate
|
0.11
|
%
|
0.13
|
%
|
0.16
|
%
|
Capital Expenditures
|
2014
|
|
2013
|
|
2012
|
||||||
(millions)
|
|
|
|||||||||
Information technology, distribution and other
|
$
|
1,306
|
|
|
$
|
1,069
|
|
|
$
|
982
|
|
New stores
|
381
|
|
|
536
|
|
|
673
|
|
|||
Store remodels and expansions
|
99
|
|
|
281
|
|
|
690
|
|
|||
Total
|
$
|
1,786
|
|
|
$
|
1,886
|
|
|
$
|
2,345
|
|
Contractual Obligations as of
|
Payments Due by Period
|
||||||||||||||
January 31, 2015
|
|
Less than
|
|
1-3
|
|
3-5
|
|
After 5
|
|
||||||
(millions)
|
Total
|
|
1 Year
|
|
Years
|
|
Years
|
|
Years
|
|
|||||
Recorded contractual obligations:
|
|
|
|
|
|
||||||||||
Long-term debt
(a)
|
$
|
11,982
|
|
$
|
27
|
|
$
|
3,002
|
|
$
|
1,203
|
|
$
|
7,750
|
|
Capital lease obligations
(b)
|
1,403
|
|
123
|
|
152
|
|
109
|
|
1,019
|
|
|||||
Deferred compensation
(c)
|
541
|
|
47
|
|
103
|
|
115
|
|
276
|
|
|||||
Real estate liabilities
(d)
|
39
|
|
39
|
|
—
|
|
—
|
|
—
|
|
|||||
Tax contingencies
(e)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Loss contingencies
(f)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Unrecorded contractual obligations:
|
|
|
|
|
|
||||||||||
Interest payments – long-term debt
|
7,309
|
|
592
|
|
1,088
|
|
809
|
|
4,820
|
|
|||||
Operating leases
(b)
|
3,827
|
|
186
|
|
348
|
|
319
|
|
2,974
|
|
|||||
Purchase obligations
(g)
|
2,411
|
|
695
|
|
855
|
|
697
|
|
164
|
|
|||||
Real estate obligations
(h)
|
204
|
|
167
|
|
6
|
|
31
|
|
—
|
|
|||||
Future contributions to retirement plans
(i)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Contractual obligations
|
$
|
27,716
|
|
$
|
1,876
|
|
$
|
5,554
|
|
$
|
3,283
|
|
$
|
17,003
|
|
(a)
|
Represents principal payments only, and excludes any fair market value adjustments recorded in long-term debt under derivative and hedge accounting rules. See Note 18 of the Financial Statements for further information.
|
(b)
|
These payments also include $59 million and $67 million of legally binding minimum lease payments for stores that are expected to open in 2015 or later for capital and operating leases, respectively. Capital lease obligations include interest. See Note 20 of the Financial Statements for further information.
|
(c)
|
Deferred compensation obligations include commitments related to our nonqualified deferred compensation plans. The timing of deferred compensation payouts is estimated based on payments currently made to former employees and retirees, forecasted investment returns, and the projected timing of future retirements.
|
(d)
|
Real estate liabilities include costs incurred but not paid related to the construction or remodeling of real estate and facilities.
|
(e)
|
Estimated tax contingencies of $195 million, including interest and penalties, are not included in the table above because we are not able to make reasonably reliable estimates of the period of cash settlement. See Note 21 of the Financial Statements for further information.
|
(f)
|
Estimated loss contingencies, including those related to the Canada Exit and the Data Breach, are not included in the table above because we are not able to make reasonably reliable estimates of the period of cash settlement. See Note 6 and Note 17 of the Financial Statements for further information.
|
(g)
|
Purchase obligations include all legally binding contracts such as firm minimum commitments for inventory purchases, merchandise royalties, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts. We issue inventory purchase orders in the normal course of business, which represent authorizations to purchase that are cancelable by their terms. We do not consider purchase orders to be firm inventory commitments; therefore, they are excluded from the table above. If we choose to cancel a purchase order, we may be obligated to reimburse the vendor for unrecoverable outlays incurred prior to cancellation. We also issue trade letters of credit in the ordinary course of business, which are excluded from this table as these obligations are conditioned on terms of the letter of credit being met.
|
(h)
|
Real estate obligations include commitments for the purchase, construction or remodeling of real estate and facilities.
|
(i)
|
We have not included obligations under our pension and postretirement health care benefit plans in the contractual obligations table above because no additional amounts are required to be funded as of
January 31, 2015
. Our historical practice regarding these plans has been to contribute amounts necessary to satisfy minimum pension funding requirements, plus periodic discretionary amounts determined to be appropriate.
|
|
|
|
Brian C. Cornell
Chairman and Chief Executive Officer
March 13, 2015
|
|
John J. Mulligan
Executive Vice President and
Chief Financial Officer
|
Minneapolis, Minnesota
March 13, 2015
|
|
|
|
|
Brian C. Cornell
Chairman and Chief Executive Officer
March 13, 2015 |
|
John J. Mulligan
Executive Vice President and
Chief Financial Officer
|
Minneapolis, Minnesota March 13, 2015 |
|
(millions, except per share data)
|
2014
|
|
2013
|
|
2012
|
|
|||
Sales
|
$
|
72,618
|
|
$
|
71,279
|
|
$
|
71,960
|
|
Credit card revenues
|
—
|
|
—
|
|
1,341
|
|
|||
Total revenues
|
72,618
|
|
71,279
|
|
73,301
|
|
|||
Cost of sales
|
51,278
|
|
50,039
|
|
50,568
|
|
|||
Selling, general and administrative expenses
|
14,676
|
|
14,465
|
|
14,643
|
|
|||
Credit card expenses
|
—
|
|
—
|
|
467
|
|
|||
Depreciation and amortization
|
2,129
|
|
1,996
|
|
2,044
|
|
|||
Gain on receivables transaction
|
—
|
|
(391
|
)
|
(161
|
)
|
|||
Earnings from continuing operations before interest expense and income taxes
|
4,535
|
|
5,170
|
|
5,740
|
|
|||
Net interest expense
|
882
|
|
1,049
|
|
684
|
|
|||
Earnings from continuing operations before income taxes
|
3,653
|
|
4,121
|
|
5,056
|
|
|||
Provision for income taxes
|
1,204
|
|
1,427
|
|
1,741
|
|
|||
Net earnings from continuing operations
|
2,449
|
|
2,694
|
|
3,315
|
|
|||
Discontinued operations, net of tax
|
(4,085
|
)
|
(723
|
)
|
(316
|
)
|
|||
Net (loss)/earnings
|
$
|
(1,636
|
)
|
$
|
1,971
|
|
$
|
2,999
|
|
Basic (loss)/earnings per share
|
|
|
|
||||||
Continuing operations
|
$
|
3.86
|
|
$
|
4.24
|
|
$
|
5.05
|
|
Discontinued operations
|
(6.44
|
)
|
(1.14
|
)
|
(0.48
|
)
|
|||
Net (loss)/earnings per share
|
$
|
(2.58
|
)
|
$
|
3.10
|
|
$
|
4.57
|
|
Diluted (loss)/earnings per share
|
|
|
|
||||||
Continuing operations
|
$
|
3.83
|
|
$
|
4.20
|
|
$
|
5.00
|
|
Discontinued operations
|
(6.38
|
)
|
(1.13
|
)
|
(0.48
|
)
|
|||
Net (loss)/earnings per share
|
$
|
(2.56
|
)
|
$
|
3.07
|
|
$
|
4.52
|
|
Weighted average common shares outstanding
|
|
|
|
||||||
Basic
|
634.7
|
|
635.1
|
|
656.7
|
|
|||
Dilutive effect of share-based awards
|
5.4
|
|
6.7
|
|
6.6
|
|
|||
Diluted
|
640.1
|
|
641.8
|
|
663.3
|
|
|||
Antidilutive shares
|
3.3
|
|
2.3
|
|
5.0
|
|
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Net (loss)/income
|
$
|
(1,636
|
)
|
$
|
1,971
|
|
$
|
2,999
|
|
Other comprehensive income/(loss), net of tax
|
|
|
|
||||||
Pension and other benefit liabilities, net of (benefit)/provision for taxes of $(90), $71 and $58
|
(139
|
)
|
110
|
|
92
|
|
|||
Currency translation adjustment and cash flow hedges, net of provision for taxes of $2, $11 and $8
|
431
|
|
(425
|
)
|
13
|
|
|||
Other comprehensive income/(loss)
|
292
|
|
(315
|
)
|
105
|
|
|||
Comprehensive (loss)/income
|
$
|
(1,344
|
)
|
$
|
1,656
|
|
$
|
3,104
|
|
(millions, except footnotes)
|
January 31,
2015 |
|
February 1,
2014 |
|
||
Assets
|
|
|
||||
Cash and cash equivalents, including short-term investments of $1,520 and $3
|
$
|
2,210
|
|
$
|
670
|
|
Inventory
|
8,790
|
|
8,278
|
|
||
Assets of discontinued operations
|
1,333
|
|
793
|
|
||
Other current assets
|
1,754
|
|
1,832
|
|
||
Total current assets
|
14,087
|
|
11,573
|
|
||
Property and equipment
|
|
|
||||
Land
|
6,127
|
|
6,143
|
|
||
Buildings and improvements
|
26,614
|
|
25,984
|
|
||
Fixtures and equipment
|
5,346
|
|
5,199
|
|
||
Computer hardware and software
|
2,553
|
|
2,395
|
|
||
Construction-in-progress
|
424
|
|
757
|
|
||
Accumulated depreciation
|
(15,106
|
)
|
(14,066
|
)
|
||
Property and equipment, net
|
25,958
|
|
26,412
|
|
||
Noncurrent assets of discontinued operations
|
442
|
|
5,461
|
|
||
Other noncurrent assets
|
917
|
|
1,107
|
|
||
Total assets
|
$
|
41,404
|
|
$
|
44,553
|
|
Liabilities and shareholders' investment
|
|
|
||||
Accounts payable
|
$
|
7,759
|
|
$
|
7,335
|
|
Accrued and other current liabilities
|
3,783
|
|
3,610
|
|
||
Current portion of long-term debt and other borrowings
|
91
|
|
1,143
|
|
||
Liabilities of discontinued operations
|
103
|
|
689
|
|
||
Total current liabilities
|
11,736
|
|
12,777
|
|
||
Long-term debt and other borrowings
|
12,705
|
|
11,429
|
|
||
Deferred income taxes
|
1,321
|
|
1,349
|
|
||
Noncurrent liabilities of discontinued operations
|
193
|
|
1,296
|
|
||
Other noncurrent liabilities
|
1,452
|
|
1,471
|
|
||
Total noncurrent liabilities
|
15,671
|
|
15,545
|
|
||
Shareholders' investment
|
|
|
||||
Common stock
|
53
|
|
53
|
|
||
Additional paid-in capital
|
4,899
|
|
4,470
|
|
||
Retained earnings
|
9,644
|
|
12,599
|
|
||
Accumulated other comprehensive loss
|
|
|
||||
Pension and other benefit liabilities
|
(561
|
)
|
(422
|
)
|
||
Currency translation adjustment and cash flow hedges
|
(38
|
)
|
(469
|
)
|
||
Total shareholders' investment
|
13,997
|
|
16,231
|
|
||
Total liabilities and shareholders' investment
|
$
|
41,404
|
|
$
|
44,553
|
|
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Operating activities
|
|
|
|
||||||
Net (loss)/earnings
|
$
|
(1,636
|
)
|
$
|
1,971
|
|
$
|
2,999
|
|
Losses from discontinued operations, net of tax
|
(4,085
|
)
|
(723
|
)
|
(316
|
)
|
|||
Net earnings from continuing operations
|
2,449
|
|
2,694
|
|
3,315
|
|
|||
Adjustments to reconcile net earnings to cash provided by operations:
|
|
|
|
||||||
Depreciation and amortization
|
2,129
|
|
1,996
|
|
2,044
|
|
|||
Share-based compensation expense
|
71
|
|
106
|
|
102
|
|
|||
Deferred income taxes
|
7
|
|
58
|
|
67
|
|
|||
Gain on receivables transaction
|
—
|
|
(391
|
)
|
(161
|
)
|
|||
Loss on debt extinguishment
|
285
|
|
445
|
|
—
|
|
|||
Noncash losses/(gains) and other, net
(a)
|
40
|
|
121
|
|
220
|
|
|||
Changes in operating accounts:
|
|
|
|
||||||
Accounts receivable originated at Target
|
—
|
|
157
|
|
(217
|
)
|
|||
Proceeds on sale of accounts receivable originated at Target
|
—
|
|
2,703
|
|
—
|
|
|||
Inventory
|
(512
|
)
|
(504
|
)
|
160
|
|
|||
Other assets
|
(115
|
)
|
(79
|
)
|
(155
|
)
|
|||
Accounts payable and accrued liabilities
|
777
|
|
213
|
|
193
|
|
|||
Cash provided by operating activities—continuing operations
|
5,131
|
|
7,519
|
|
5,568
|
|
|||
Cash required for operating activities—discontinued operations
|
(692
|
)
|
(999
|
)
|
(243
|
)
|
|||
Cash provided by operations
|
4,439
|
|
6,520
|
|
5,325
|
|
|||
Investing activities
|
|
|
|
||||||
Expenditures for property and equipment
|
(1,786
|
)
|
(1,886
|
)
|
(2,346
|
)
|
|||
Proceeds from disposal of property and equipment
|
95
|
|
70
|
|
66
|
|
|||
Change in accounts receivable originated at third parties
|
—
|
|
121
|
|
254
|
|
|||
Proceeds from sale of accounts receivable originated at third parties
|
—
|
|
3,002
|
|
—
|
|
|||
Cash paid for acquisitions, net of cash assumed
|
(20
|
)
|
(157
|
)
|
—
|
|
|||
Other investments
|
106
|
|
130
|
|
102
|
|
|||
Cash (required for)/ provided by investing activities—continuing operations
|
(1,605
|
)
|
1,280
|
|
(1,924
|
)
|
|||
Cash required for investing activities—discontinued operations
|
(321
|
)
|
(1,551
|
)
|
(931
|
)
|
|||
Cash required for investing activities
|
(1,926
|
)
|
(271
|
)
|
(2,855
|
)
|
|||
Financing activities
|
|
|
|
||||||
Change in commercial paper, net
|
(80
|
)
|
(890
|
)
|
970
|
|
|||
Reductions of short-term debt
|
—
|
|
—
|
|
(1,500
|
)
|
|||
Additions to long-term debt
|
1,993
|
|
—
|
|
1,971
|
|
|||
Reductions of long-term debt
|
(2,079
|
)
|
(3,463
|
)
|
(1,529
|
)
|
|||
Dividends paid
|
(1,205
|
)
|
(1,006
|
)
|
(869
|
)
|
|||
Repurchase of stock
|
—
|
|
(1,461
|
)
|
(1,875
|
)
|
|||
Stock option exercises and related tax benefit
|
373
|
|
456
|
|
360
|
|
|||
Other
|
—
|
|
—
|
|
(16
|
)
|
|||
Cash required for financing activities
|
(998
|
)
|
(6,364
|
)
|
(2,488
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
26
|
|
8
|
|
|||
Net increase/(decrease) in cash and cash equivalents
|
1,515
|
|
(89
|
)
|
(10
|
)
|
|||
Cash and cash equivalents at beginning of period
(b)
|
695
|
|
784
|
|
794
|
|
|||
Cash and cash equivalents at end of period
(c)
|
$
|
2,210
|
|
$
|
695
|
|
$
|
784
|
|
Supplemental information
|
|
|
|
||||||
Interest paid, net of capitalized interest
|
$
|
871
|
|
$
|
1,043
|
|
$
|
697
|
|
Income taxes paid
|
1,251
|
|
1,386
|
|
1,603
|
|
|||
Property and equipment acquired through capital lease obligations
|
88
|
|
132
|
|
251
|
|
(a)
|
Includes net write-offs of credit card receivables prior to the sale of our U.S. consumer credit card receivables on March 13, 2013, and bad debt expense on credit card receivables during the twelve months ended February 2, 2013.
|
(b)
|
Includes cash of our discontinued operations of
$25 million
,
$59 million
and
$98 million
for 2014, 2013 and 2012, respectively.
|
(c)
|
Includes cash of our discontinued operations of
$25 million
and
$59 million
for 2013 and 2012, respectively.
|
(millions, except footnotes)
|
Common
Stock
Shares
|
|
Stock
Par
Value
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Income/(Loss)
|
|
Total
|
|
|||||
January 28, 2012
|
669.3
|
|
$
|
56
|
|
$
|
3,487
|
|
$
|
12,959
|
|
$
|
(681
|
)
|
$
|
15,821
|
|
Net earnings
|
—
|
|
—
|
|
—
|
|
2,999
|
|
—
|
|
2,999
|
|
|||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
105
|
|
105
|
|
|||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
(903
|
)
|
—
|
|
(903
|
)
|
|||||
Repurchase of stock
|
(32.2
|
)
|
(3
|
)
|
—
|
|
(1,900
|
)
|
—
|
|
(1,903
|
)
|
|||||
Stock options and awards
|
8.2
|
|
1
|
|
438
|
|
—
|
|
—
|
|
439
|
|
|||||
February 2, 2013
|
645.3
|
|
$
|
54
|
|
$
|
3,925
|
|
$
|
13,155
|
|
$
|
(576
|
)
|
$
|
16,558
|
|
Net earnings
|
—
|
|
—
|
|
—
|
|
1,971
|
|
—
|
|
1,971
|
|
|||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(315
|
)
|
(315
|
)
|
|||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
(1,051
|
)
|
—
|
|
(1,051
|
)
|
|||||
Repurchase of stock
|
(21.9
|
)
|
(2
|
)
|
—
|
|
(1,476
|
)
|
—
|
|
(1,478
|
)
|
|||||
Stock options and awards
|
9.5
|
|
1
|
|
545
|
|
—
|
|
—
|
|
546
|
|
|||||
February 1, 2014
|
632.9
|
|
$
|
53
|
|
$
|
4,470
|
|
$
|
12,599
|
|
$
|
(891
|
)
|
$
|
16,231
|
|
Net loss
|
—
|
|
—
|
|
—
|
|
(1,636
|
)
|
—
|
|
(1,636
|
)
|
|||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
292
|
|
292
|
|
|||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
(1,273
|
)
|
—
|
|
(1,273
|
)
|
|||||
Repurchase of stock
|
(0.8
|
)
|
—
|
|
—
|
|
(46
|
)
|
—
|
|
(46
|
)
|
|||||
Stock options and awards
|
8.1
|
|
—
|
|
429
|
|
—
|
|
—
|
|
429
|
|
|||||
January 31, 2015
|
640.2
|
|
$
|
53
|
|
$
|
4,899
|
|
$
|
9,644
|
|
$
|
(599
|
)
|
$
|
13,997
|
|
Cost of Sales
|
Selling, General and Administrative Expenses
|
Total cost of products sold including
• Freight expenses associated with moving
merchandise from our vendors to our
distribution centers and our retail stores, and
among our distribution and retail facilities
• Vendor income that is not reimbursement of
specific, incremental and identifiable costs
Inventory shrink
Markdowns
Outbound shipping and handling expenses
associated with sales to our guests
Payment term cash discounts
Distribution center costs, including compensation
and benefits costs
Import costs
|
Compensation and benefit costs including
• Stores
• Headquarters
Occupancy and operating costs of retail and
headquarters facilities
Advertising, offset by vendor income that is a
reimbursement of specific, incremental and
identifiable costs
Pre-opening costs of stores and other facilities
U.S. credit cards servicing expenses and profit
sharing
Litigation and defense costs and related insurance
recovery
Other administrative costs
|
Advertising Costs
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Gross advertising costs
|
$
|
1,647
|
|
$
|
1,623
|
|
$
|
1,620
|
|
Vendor income
(a)
|
47
|
|
75
|
|
231
|
|
|||
Net advertising costs
|
$
|
1,600
|
|
$
|
1,548
|
|
$
|
1,389
|
|
(a)
|
A 2013 change to certain merchandise vendor contracts resulted in more vendor funding being recognized as a reduction of our cost of sales rather than offsetting advertising expenses.
|
Loss on Discontinued Operations
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Sales
|
$
|
1,902
|
|
$
|
1,317
|
|
$
|
—
|
|
Cost of sales
|
1,541
|
|
1,121
|
|
—
|
|
|||
SG&A expenses
|
909
|
|
910
|
|
272
|
|
|||
Depreciation and amortization
|
248
|
|
227
|
|
97
|
|
|||
Interest expense
|
73
|
|
77
|
|
78
|
|
|||
Pretax loss from operations
|
(869
|
)
|
(1,018
|
)
|
(447
|
)
|
|||
Pretax exit costs
|
(5,105
|
)
|
—
|
|
—
|
|
|||
Income taxes
|
1,889
|
|
295
|
|
131
|
|
|||
Loss on discontinued operations
|
$
|
(4,085
|
)
|
$
|
(723
|
)
|
$
|
(316
|
)
|
Fourth Quarter Pretax Exit Costs
(millions)
|
2014
|
|
|
Investment impairment on deconsolidation
|
$
|
4,766
|
|
Contingent liabilities
|
240
|
|
|
Employee trust
|
73
|
|
|
Other exit costs
|
26
|
|
|
Total
|
$
|
5,105
|
|
Asset
|
|
Valuation Technique
(a)
|
Pricing Category
|
Inventory
|
|
Estimated selling price less costs to sell
|
Level 3
|
Owned property
|
|
Income approach based on estimated market rents and cap rates
|
Level 3
|
Leased property, including leasehold improvements
|
|
Discounted cash flow analysis of the differential between estimated market rent and contractual rent payments
|
Level 3
|
(a)
|
An estimated liquidation discount was applied to reflect the CCAA filing.
|
Assets and Liabilities of Discontinued Operations
(millions)
|
||||||||
|
January 31,
2015 |
|
|
|
February 1,
2014 |
|
||
Equity investment in Canada Subsidiaries
|
$
|
—
|
|
|
Inventory
|
$
|
488
|
|
Income tax benefit
|
1,430
|
|
|
Property and equipment, net
|
4,966
|
|
||
Receivables from Canada Subsidiaries
(a)
|
326
|
|
|
Other
|
800
|
|
||
Receivables under the debtor-in-possession credit facility
|
19
|
|
|
|
|
|||
Total assets
|
$
|
1,775
|
|
|
Total assets
|
$
|
6,254
|
|
|
|
|
Capital lease obligations
|
$
|
1,210
|
|
||
Accrued liabilities
|
$
|
296
|
|
|
Accounts payable and other liabilities
|
775
|
|
|
Total liabilities
|
$
|
296
|
|
|
Total liabilities
|
$
|
1,985
|
|
(a)
|
Represents the fair value of loans and accounts receivable from Canada Subsidiaries.
|
Profit-Sharing Arrangement
(millions)
|
2014
|
|
|
2013
(a)
|
|
||
Profit-sharing included in segment SG&A
|
$
|
682
|
|
|
$
|
653
|
|
Reduction of beneficial interest asset
(b)
|
(53
|
)
|
|
(98
|
)
|
||
Net impact to SG&A expense
|
$
|
629
|
|
|
$
|
555
|
|
(a)
|
Segment SG&A also reflected credit card revenues earned in 2013 prior to the close of the transaction.
|
(b)
|
On a consolidated basis, profit-sharing income is offset by reductions of the beneficial interest asset.
|
Fair Value Measurements - Recurring Basis
|
|
Fair Value at
|
||||||
(millions)
|
Pricing Category
|
January 31, 2015
|
|
|
February 1, 2014
|
|
||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
|
|
|
|
|
||
Short-term investments
|
Level 1
|
$
|
1,520
|
|
|
$
|
3
|
|
Other current assets
|
|
|
|
|
|
|
||
Interest rate swaps
(a)
|
Level 2
|
—
|
|
|
1
|
|
||
Prepaid forward contracts
|
Level 1
|
38
|
|
|
73
|
|
||
Beneficial interest asset
(b)
|
Level 3
|
43
|
|
|
71
|
|
||
Other noncurrent assets
|
|
|
|
|
|
|
||
Interest rate swaps
(a)
|
Level 2
|
65
|
|
|
62
|
|
||
Company-owned life insurance investments
(c)
|
Level 2
|
322
|
|
|
305
|
|
||
Beneficial interest asset
(b)
|
Level 3
|
31
|
|
|
56
|
|
||
Liabilities
|
|
|
|
|
|
|
||
Other noncurrent liabilities
|
|
|
|
|
|
|
||
Interest rate swaps
(a)
|
Level 2
|
24
|
|
|
39
|
|
(a)
|
See Note 19 for additional information on interest rate swaps.
|
(b)
|
Note 7 includes a rollforward of the Level 3 beneficial interest asset.
|
(c)
|
Company-owned life insurance investments consist of equity index funds and fixed income assets. Amounts are presented net of nonrecourse loans that are secured by some of these policies. These loan amounts totaled
$773 million
at
January 31, 2015
and
$790 million
at
February 1, 2014
.
|
Valuation Technique
|
Short-term investments - Carrying value approximates fair value because maturities are less than three months.
|
Prepaid forward contracts - Initially valued at transaction price. Subsequently valued by reference to the market price of Target common stock.
|
Interest rate swaps - Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation model (e.g., interest rates and credit spreads).
|
Company-owned life insurance investments - Includes investments in separate accounts that are valued based on market rates credited by the insurer.
|
Beneficial interest asset - Valued using a cash-flow based economic-profit model, which includes inputs of the forecasted performance of the receivables portfolio and a market-based discount rate. Internal data is used to forecast expected payment patterns and write-offs, revenue, and operating expenses (credit EBIT yield) related to the credit card portfolio. Changes in macroeconomic conditions in the United States could affect the estimated fair value. A one percentage point change in the forecasted EBIT yield would impact our fair value estimate by approximately $11 million. A one percentage point change in the forecasted discount rate would impact our fair value estimate by approximately $2 million. As described in Note 7, this beneficial interest asset effectively represents a receivable for the present value of future profit-sharing we expect to receive on the receivables sold. As a result, a portion of the profit-sharing payments we receive from TD will reduce the beneficial interest asset. As the asset is reduced over time, changes in the forecasted credit EBIT yield and the forecasted discount rate will have a smaller impact on the estimated fair value.
|
(a)
|
The carrying amounts of certain other current assets, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature.
|
(b)
|
The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for similar types of financial instruments and would be classified as Level 2. These amounts exclude unamortized swap valuation adjustments and capital lease obligations.
|
Other Current Assets
(millions)
|
January 31,
2015 |
|
February 1,
2014 |
|
||
Pharmacy, income tax and other receivables
|
$
|
629
|
|
$
|
570
|
|
Vendor income receivable
|
493
|
|
536
|
|
||
Prepaid expenses
|
231
|
|
255
|
|
||
Deferred taxes
|
188
|
|
155
|
|
||
Other
|
213
|
|
316
|
|
||
Total
|
$
|
1,754
|
|
$
|
1,832
|
|
Estimated Useful Lives
|
Life (Years)
|
Buildings and improvements
|
8-39
|
Fixtures and equipment
|
2-15
|
Computer hardware and software
|
2-7
|
Impairments
(a)
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Impairments included in segment SG&A
|
$
|
108
|
|
$
|
58
|
|
$
|
37
|
|
Unallocated impairments
(b)
|
16
|
|
19
|
|
—
|
|
|||
Total impairments
|
$
|
124
|
|
$
|
77
|
|
$
|
37
|
|
(a)
|
Substantially all of the impairments are recorded in selling, general and administrative expense on the Consolidated Statements of Operations, primarily from completed or planned store closures and software changes.
|
(b)
|
Represents impairments of undeveloped land.
|
Other Noncurrent Assets
(millions)
|
January 31,
2015 |
|
February 1,
2014 |
|
||
Goodwill and intangible assets
|
$
|
302
|
|
$
|
331
|
|
Company-owned life insurance investments
(a)
|
322
|
|
305
|
|
||
Interest rate swaps
(b)
|
65
|
|
62
|
|
||
Other
|
228
|
|
409
|
|
||
Total
|
$
|
917
|
|
$
|
1,107
|
|
(a)
|
Company-owned life insurance policies on approximately
4,000
team members who have been designated highly compensated under the Internal Revenue Code and have given their consent to be insured. Amounts are presented net of loans that are secured by some of these policies.
|
(b)
|
See Notes 8 and 19 for additional information relating to our interest rate swaps.
|
Intangible Assets
|
Leasehold
Acquisition Costs
|
|
Other
(a)
|
|
Total
|
|||||||||||||||
(millions)
|
January 31,
2015 |
|
February 1,
2014 |
|
|
January 31,
2015 |
|
February 1,
2014 |
|
|
January 31,
2015 |
|
February 1,
2014 |
|
||||||
Gross asset
|
$
|
224
|
|
$
|
225
|
|
|
$
|
181
|
|
$
|
180
|
|
|
$
|
405
|
|
$
|
405
|
|
Accumulated amortization
|
(133
|
)
|
(126
|
)
|
|
(117
|
)
|
(106
|
)
|
|
(250
|
)
|
(232
|
)
|
||||||
Net intangible assets
|
$
|
91
|
|
$
|
99
|
|
|
$
|
64
|
|
$
|
74
|
|
|
$
|
155
|
|
$
|
173
|
|
(a)
|
Other intangible assets relate primarily to acquired customer lists and trademarks.
|
Estimated Amortization Expense
(millions)
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
|||||
Amortization expense
|
$
|
21
|
|
$
|
17
|
|
$
|
14
|
|
$
|
9
|
|
$
|
8
|
|
Accrued and Other Current Liabilities
(millions)
|
January 31,
2015 |
|
February 1,
2014 |
|
||
Wages and benefits
|
$
|
951
|
|
$
|
865
|
|
Gift card liability, net of estimated breakage
|
609
|
|
516
|
|
||
Real estate, sales and other taxes payable
|
550
|
|
529
|
|
||
Dividends payable
|
333
|
|
272
|
|
||
Straight-line rent accrual
(a)
|
255
|
|
242
|
|
||
Workers' compensation and general liability
(b)
|
153
|
|
152
|
|
||
Interest payable
|
76
|
|
78
|
|
||
Project costs accrual
|
69
|
|
165
|
|
||
Income tax payable
|
26
|
|
216
|
|
||
Other
|
761
|
|
575
|
|
||
Total
|
$
|
3,783
|
|
$
|
3,610
|
|
(a)
|
Straight-line rent accrual represents the amount of rent expense recorded that exceeds cash payments remitted in connection with operating leases.
|
(b)
|
We retain a substantial portion of the risk related to general liability and workers' compensation claims. Liabilities associated with these losses include estimates of both claims filed and losses incurred but not yet reported. We estimate our ultimate cost based on analysis of historical data and actuarial estimates. General liability and workers' compensation liabilities are recorded at our estimate of their net present value.
|
Data Breach Balance Sheet Rollforward
(millions)
|
Liabilities
|
|
|
Insurance receivable
|
|
||
Balance at February 1, 2014
|
$
|
61
|
|
|
$
|
44
|
|
Expenses incurred/insurance receivable recorded
(a)
|
191
|
|
|
46
|
|
||
Payments made/received
|
(81
|
)
|
|
(30
|
)
|
||
Balance at January 31, 2015
|
$
|
171
|
|
|
$
|
60
|
|
(a)
|
Includes expenditures and accruals for Data Breach-related costs and expected insurance recoveries as discussed below.
|
Debt Maturities
|
January 31, 2015
|
||||
(dollars in millions)
|
Rate
(a)
|
|
Balance
|
|
|
Due 2015-2019
|
4.9
|
%
|
$
|
4,230
|
|
Due 2020-2024
|
3.8
|
|
3,209
|
|
|
Due 2025-2029
|
6.7
|
|
252
|
|
|
Due 2030-2034
|
6.5
|
|
770
|
|
|
Due 2035-2039
|
6.7
|
|
2,014
|
|
|
Due 2040-2044
|
4.0
|
|
1,471
|
|
|
Total notes and debentures
|
5.0
|
|
11,946
|
|
|
Swap valuation adjustments
|
|
|
61
|
|
|
Capital lease obligations
|
|
|
789
|
|
|
Less: Amounts due within one year
|
|
|
(91
|
)
|
|
Long-term debt
|
|
|
$
|
12,705
|
|
(a)
|
Reflects the weighted average stated interest rate as of year-end.
|
Required Principal Payments
(millions)
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
|||||
Total required principal payments
|
$
|
27
|
|
$
|
751
|
|
$
|
2,251
|
|
$
|
201
|
|
$
|
1,001
|
|
Commercial Paper
(dollars in millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Maximum daily amount outstanding during the year
|
$
|
590
|
|
$
|
1,465
|
|
$
|
970
|
|
Average amount outstanding during the year
|
129
|
|
408
|
|
120
|
|
|||
Amount outstanding at year-end
|
—
|
|
80
|
|
970
|
|
|||
Weighted average interest rate
|
0.11
|
%
|
0.13
|
%
|
0.16
|
%
|
(a)
|
There are
three
designated swaps at January 31, 2015.
Two
swaps have floating pay rates equal to
3-month LIBOR
and
one
swap has a floating pay rate equal to
1-month LIBOR
.
|
Classification and Fair Value
(millions)
|
Assets
|
|
Liabilities
|
||||||||||||
Classification
|
Jan 31,
2015 |
|
Feb 1,
2014 |
|
|
Classification
|
Jan 31,
2015 |
|
Feb 1,
2014 |
|
|||||
Designated:
|
Other current assets
|
$
|
—
|
|
$
|
1
|
|
|
N/A
|
$
|
—
|
|
$
|
—
|
|
|
Other noncurrent assets
|
27
|
|
—
|
|
|
N/A
|
—
|
|
—
|
|
||||
De-designated:
|
Other noncurrent assets
|
38
|
|
62
|
|
|
Other noncurrent liabilities
|
24
|
|
39
|
|
||||
Total
|
|
$
|
65
|
|
$
|
63
|
|
|
|
$
|
24
|
|
$
|
39
|
|
Derivative Contracts – Effect on Results of Operations
(millions)
|
||||||||||
Type of Contract
|
Classification of Income/(Expense)
|
2014
|
|
2013
|
|
2012
|
|
|||
Interest rate swaps
|
Net interest expense
|
$
|
32
|
|
$
|
29
|
|
$
|
44
|
|
Rent Expense
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Property, equipment and software
|
$
|
195
|
|
$
|
212
|
|
$
|
216
|
|
Rent income
|
(9
|
)
|
(8
|
)
|
(9
|
)
|
|||
Total rent expense
|
$
|
186
|
|
$
|
204
|
|
$
|
207
|
|
Future Minimum Lease Payments
(millions)
|
Operating Leases
(a)
|
|
Capital Leases
(b)
|
|
Rent Income
|
|
Total
|
|
||||
2015
|
$
|
186
|
|
$
|
123
|
|
$
|
(6
|
)
|
$
|
303
|
|
2016
|
178
|
|
94
|
|
(5
|
)
|
267
|
|
||||
2017
|
170
|
|
58
|
|
(5
|
)
|
223
|
|
||||
2018
|
165
|
|
55
|
|
(4
|
)
|
216
|
|
||||
2019
|
154
|
|
54
|
|
(3
|
)
|
205
|
|
||||
After 2019
|
2,974
|
|
1,019
|
|
(13
|
)
|
3,980
|
|
||||
Total future minimum lease payments
|
$
|
3,827
|
|
$
|
1,403
|
|
$
|
(36
|
)
|
$
|
5,194
|
|
Less: Interest
(c)
|
|
|
614
|
|
|
|
|
|
||||
Present value of future minimum capital lease payments
(d)
|
|
|
$
|
789
|
|
|
|
|
|
(a)
|
Total contractual lease payments include
$2,046 million
related to options to extend lease terms that are reasonably assured of being exercised and also includes
$67 million
of legally binding minimum lease payments for stores that are expected to open in 2015 or later.
|
(b)
|
Capital lease payments include
$612 million
related to options to extend lease terms that are reasonably assured of being exercised and also includes
$59 million
of legally binding minimum lease payments for stores that are expected to open in 2015 or later. Capital leases also include
$41 million
of legally binding payments for distribution centers opening in 2015.
|
(c)
|
Calculated using the interest rate at inception for each lease.
|
(d)
|
Includes the current portion of
$63 million
.
|
Tax Rate Reconciliation – Continuing Operations
|
2014
|
|
2013
|
|
2012
|
|
Federal statutory rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
State income taxes, net of the federal tax benefit
|
2.2
|
|
2.4
|
|
1.8
|
|
International
|
(2.3
|
)
|
(1.2
|
)
|
(1.0
|
)
|
Other
|
(1.9
|
)
|
(1.6
|
)
|
(1.4
|
)
|
Effective tax rate
|
33.0
|
%
|
34.6
|
%
|
34.4
|
%
|
Provision for Income Taxes
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Current:
|
|
|
|
||||||
Federal
|
$
|
1,074
|
|
$
|
1,206
|
|
$
|
1,521
|
|
State
|
116
|
|
150
|
|
144
|
|
|||
International
|
7
|
|
13
|
|
9
|
|
|||
Total current
|
1,197
|
|
1,369
|
|
1,674
|
|
|||
Deferred:
|
|
|
|
||||||
Federal
|
(2
|
)
|
56
|
|
64
|
|
|||
State
|
10
|
|
—
|
|
6
|
|
|||
International
|
(1
|
)
|
2
|
|
(3
|
)
|
|||
Total deferred
|
7
|
|
58
|
|
67
|
|
|||
Total provision
|
$
|
1,204
|
|
$
|
1,427
|
|
$
|
1,741
|
|
Net Deferred Tax Asset/(Liability)
(millions)
|
January 31,
2015 |
|
February 1,
2014 |
|
||
Gross deferred tax assets:
|
|
|
||||
Accrued and deferred compensation
|
$
|
531
|
|
$
|
509
|
|
Accruals and reserves not currently deductible
|
316
|
|
348
|
|
||
Self-insured benefits
|
223
|
|
231
|
|
||
Other
|
176
|
|
97
|
|
||
Total gross deferred tax assets
|
1,246
|
|
1,185
|
|
||
Gross deferred tax liabilities:
|
|
|
||||
Property and equipment
|
(1,946
|
)
|
(1,978
|
)
|
||
Inventory
|
(307
|
)
|
(270
|
)
|
||
Other
|
(123
|
)
|
(130
|
)
|
||
Total gross deferred tax liabilities
|
(2,376
|
)
|
(2,378
|
)
|
||
Total net deferred tax liability
|
$
|
(1,130
|
)
|
$
|
(1,193
|
)
|
Reconciliation of Liability for Unrecognized Tax Benefits
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Balance at beginning of period
|
$
|
183
|
|
$
|
216
|
|
$
|
236
|
|
Additions based on tax positions related to the current year
|
10
|
|
15
|
|
10
|
|
|||
Additions for tax positions of prior years
|
17
|
|
28
|
|
19
|
|
|||
Reductions for tax positions of prior years
|
(42
|
)
|
(57
|
)
|
(42
|
)
|
|||
Settlements
|
(13
|
)
|
(19
|
)
|
(7
|
)
|
|||
Balance at end of period
|
$
|
155
|
|
$
|
183
|
|
$
|
216
|
|
Other Noncurrent Liabilities
(millions)
|
January 31,
2015 |
|
February 1,
2014 |
|
||
Deferred compensation
|
$
|
507
|
|
$
|
491
|
|
Workers' compensation and general liability
(a)
|
413
|
|
423
|
|
||
Income tax
|
128
|
|
174
|
|
||
Pension and postretirement health care benefits
|
151
|
|
115
|
|
||
Other
|
253
|
|
268
|
|
||
Total
|
$
|
1,452
|
|
$
|
1,471
|
|
(a)
|
See footnote (c) to the Accrued and Other Current Liabilities table in Note 16 for additional detail.
|
Share Repurchases
(millions, except per share data)
|
2014
|
|
2013
|
|
2012
|
|
|||
Total number of shares purchased
(a)
|
0.8
|
|
21.9
|
|
32.2
|
|
|||
Average price paid per share
|
$
|
54.07
|
|
$
|
67.41
|
|
$
|
58.96
|
|
Total investment
|
$
|
41
|
|
$
|
1,474
|
|
$
|
1,900
|
|
(a)
|
Includes
0.8 million
,
0.2 million
and
0.5 million
shares delivered upon the non-cash settlement of prepaid contracts in 2014, 2013, and 2012, respectively. These contracts had an original cash investment of
$41 million
,
$14 million
and
$25 million
, respectively, and an aggregate market value of
$46 million
,
$17 million
and
$29 million
. These contracts are among the investment vehicles used to reduce our economic exposure related to our nonqualified deferred compensation plans. Note 25 provides the details of our positions in prepaid forward contracts.
|
Stock Option Activity
|
Stock Options
|
||||||||||||||||
|
Total Outstanding
|
|
Exercisable
|
||||||||||||||
|
Number of
Options
(a)
|
|
Exercise
Price
(b)
|
|
Intrinsic
Value
(c)
|
|
|
Number of
Options
(a)
|
|
Exercise
Price
(b)
|
|
Intrinsic
Value
(c)
|
|
||||
February 1, 2014
|
24,854
|
|
$
|
52.19
|
|
$
|
136
|
|
|
16,824
|
|
$
|
50.64
|
|
$
|
109
|
|
Granted
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||
Expired/forfeited
|
(634
|
)
|
55.05
|
|
|
|
|
|
|
|
|
|
|
||||
Exercised/issued
|
(7,495
|
)
|
50.04
|
|
|
|
|
|
|
|
|
|
|
||||
January 31, 2015
|
16,725
|
|
$
|
53.04
|
|
$
|
344
|
|
|
12,843
|
|
$
|
52.02
|
|
$
|
277
|
|
(a)
|
In thousands.
|
(b)
|
Weighted average per share.
|
(c)
|
Represents stock price appreciation subsequent to the grant date, in millions.
|
Black-Scholes Model Valuation Assumptions
|
2013
|
|
2012
|
|
Dividend yield
|
2.4
|
%
|
2.4
|
%
|
Volatility
(a)
|
22
|
%
|
23
|
%
|
Risk-free interest rate
(b)
|
1.4
|
%
|
1.0
|
%
|
Expected life in years
(c)
|
5.5
|
|
5.5
|
|
Stock options grant date fair value
|
$ 11.14
|
$ 9.70
|
(a)
|
Volatility represents an average of market estimates for implied volatility of Target common stock.
|
(b)
|
The risk-free interest rate is an interpolation of the relevant U.S. Treasury security maturities as of each applicable grant date.
|
(c)
|
The expected life is estimated based on an analysis of options already exercised and any foreseeable trends or changes in recipients' behavior.
|
Stock Option Exercises
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
Cash received for exercise price
|
$
|
374
|
|
$
|
422
|
|
$
|
331
|
|
Intrinsic value
|
143
|
|
197
|
|
139
|
|
|||
Income tax benefit
|
41
|
|
77
|
|
55
|
|
Performance Share Unit Activity
|
Total Nonvested Units
|
||||
|
Performance
Share Units
(a)
|
|
Grant Date
Fair Value
(b)
|
|
|
February 1, 2014
|
2,870
|
|
$
|
55.37
|
|
Granted
|
1,438
|
|
73.12
|
|
|
Forfeited
|
(490
|
)
|
56.44
|
|
|
Vested
|
(218
|
)
|
48.72
|
|
|
January 31, 2015
|
3,600
|
|
$
|
63.16
|
|
(a)
|
Assumes attainment of maximum payout rates as set forth in the performance criteria based in thousands of share units. Applying actual or expected payout rates, the number of outstanding units at
January 31, 2015
was
1,136 thousand
.
|
(b)
|
Weighted average per unit.
|
Restricted Stock Activity
|
Total Nonvested Units
|
||||
|
Restricted
Stock
(a)
|
|
Grant Date
Fair Value
(b)
|
|
|
February 1, 2014
|
3,935
|
|
$
|
58.98
|
|
Granted
|
1,992
|
|
70.50
|
|
|
Forfeited
|
(436
|
)
|
59.11
|
|
|
Vested
|
(778
|
)
|
51.77
|
|
|
January 31, 2015
|
4,713
|
|
$
|
65.11
|
|
(a)
|
Represents the number of restricted stock units, in thousands. For performance-based restricted stock units, assumes attainment of maximum payout rates as set forth in the performance criteria based in thousands of share units. Applying actual or expected payout rates, the number of outstanding restricted stock units at
January 31, 2015
was
3,897 thousand
.
|
(b)
|
Weighted average per unit.
|
Prepaid Forward Contracts on Target Common Stock
(millions, except per share data)
|
Number of Shares
|
|
Contractual Price Paid per Share
|
|
Contractual Fair Value
|
|
Total Cash Investment
|
|
|||
February 1, 2014
|
1.3
|
|
$
|
48.81
|
|
$
|
73
|
|
$
|
63
|
|
January 31, 2015
|
0.5
|
|
$
|
41.11
|
|
$
|
38
|
|
$
|
21
|
|
Plan Expenses
|
|
|
|
||||||
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|||
401(k) plan matching contributions expense
|
$
|
220
|
|
$
|
229
|
|
$
|
218
|
|
|
|
|
|
||||||
Nonqualified deferred compensation plans
|
|
|
|
||||||
Benefits expense
(a)
|
52
|
|
41
|
|
78
|
|
|||
Related investment income
(b)
|
(45
|
)
|
(23
|
)
|
(43
|
)
|
|||
Nonqualified plan net expense
|
$
|
7
|
|
$
|
18
|
|
$
|
35
|
|
(a)
|
Includes market-performance credits on accumulated participant account balances and annual crediting for additional benefits earned during the year.
|
(b)
|
Includes investment returns and life-insurance proceeds received from company-owned life insurance policies and other investments used to economically hedge the cost of these plans.
|
Change in Projected Benefit Obligation
|
Pension Benefits
|
|
Postretirement
Health Care Benefits
|
|||||||||||||||||
|
Qualified Plans
|
|
Nonqualified Plans
|
|
||||||||||||||||
(millions)
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
||||||
Benefit obligation at beginning of period
|
$
|
3,173
|
|
$
|
3,164
|
|
|
$
|
35
|
|
$
|
37
|
|
|
$
|
73
|
|
$
|
121
|
|
Service cost
|
111
|
|
117
|
|
|
1
|
|
1
|
|
|
5
|
|
6
|
|
||||||
Interest cost
|
148
|
|
136
|
|
|
1
|
|
1
|
|
|
2
|
|
2
|
|
||||||
Actuarial (gain)/loss
|
556
|
|
(125
|
)
|
|
9
|
|
—
|
|
|
(10
|
)
|
(3
|
)
|
||||||
Participant contributions
|
3
|
|
1
|
|
|
—
|
|
—
|
|
|
4
|
|
5
|
|
||||||
Benefits paid
|
(147
|
)
|
(122
|
)
|
|
(3
|
)
|
(4
|
)
|
|
(9
|
)
|
(14
|
)
|
||||||
Plan amendments
|
—
|
|
2
|
|
|
—
|
|
—
|
|
|
(9
|
)
|
(44
|
)
|
||||||
Benefit obligation at end of period
|
$
|
3,844
|
|
$
|
3,173
|
|
|
$
|
43
|
|
$
|
35
|
|
|
$
|
56
|
|
$
|
73
|
|
Change in Plan Assets
|
Pension Benefits
|
|
Postretirement
Health Care Benefits
|
|||||||||||||||||
|
Qualified Plans
|
|
Nonqualified Plans
|
|
||||||||||||||||
(millions)
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
||||||
Fair value of plan assets at beginning of period
|
$
|
3,267
|
|
$
|
3,223
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Actual return on plan assets
|
507
|
|
161
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Employer contributions
|
154
|
|
4
|
|
|
3
|
|
4
|
|
|
5
|
|
9
|
|
||||||
Participant contributions
|
3
|
|
1
|
|
|
—
|
|
—
|
|
|
4
|
|
5
|
|
||||||
Benefits paid
|
(147
|
)
|
(122
|
)
|
|
(3
|
)
|
(4
|
)
|
|
(9
|
)
|
(14
|
)
|
||||||
Fair value of plan assets at end of period
|
3,784
|
|
3,267
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Benefit obligation at end of period
|
3,844
|
|
3,173
|
|
|
43
|
|
35
|
|
|
56
|
|
73
|
|
||||||
Funded/(underfunded) status
|
$
|
(60
|
)
|
$
|
94
|
|
|
$
|
(43
|
)
|
$
|
(35
|
)
|
|
$
|
(56
|
)
|
$
|
(73
|
)
|
Recognition of Funded/(Underfunded) Status
|
Qualified Plans
|
|
Nonqualified Plans
(a)
|
||||||||||
(millions)
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
||||
Other noncurrent assets
|
$
|
—
|
|
$
|
112
|
|
|
$
|
—
|
|
$
|
—
|
|
Accrued and other current liabilities
|
(1
|
)
|
(2
|
)
|
|
(8
|
)
|
(9
|
)
|
||||
Other noncurrent liabilities
|
(59
|
)
|
(16
|
)
|
|
(91
|
)
|
(99
|
)
|
||||
Net amounts recognized
|
$
|
(60
|
)
|
$
|
94
|
|
|
$
|
(99
|
)
|
$
|
(108
|
)
|
(a)
|
Includes postretirement health care benefits.
|
Amounts in Accumulated Other Comprehensive Income
|
Pension Plans
|
|
Postretirement
Health Care Plans
|
||||||||||
|
|||||||||||||
(millions)
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
||||
Net actuarial loss
|
$
|
1,018
|
|
$
|
792
|
|
|
$
|
33
|
|
$
|
49
|
|
Prior service credits
|
(69
|
)
|
(80
|
)
|
|
(55
|
)
|
(62
|
)
|
||||
Amounts in accumulated other comprehensive income
|
$
|
949
|
|
$
|
712
|
|
|
$
|
(22
|
)
|
$
|
(13
|
)
|
Change in Accumulated Other Comprehensive Income
|
Pension Benefits
|
|
Postretirement
Health Care Benefits
|
||||||||||
|
|||||||||||||
(millions)
|
Pretax
|
|
Net of Tax
|
|
|
Pretax
|
|
Net of Tax
|
|
||||
February 2, 2013
|
$
|
856
|
|
$
|
517
|
|
|
$
|
24
|
|
$
|
15
|
|
Net actuarial loss
|
(52
|
)
|
(32
|
)
|
|
(3
|
)
|
(2
|
)
|
||||
Amortization of net actuarial losses
|
(103
|
)
|
(62
|
)
|
|
(6
|
)
|
(4
|
)
|
||||
Amortization of prior service costs and transition
|
11
|
|
7
|
|
|
16
|
|
10
|
|
||||
Plan amendments
|
—
|
|
—
|
|
|
(44
|
)
|
(27
|
)
|
||||
February 1, 2014
|
712
|
|
430
|
|
|
(13
|
)
|
(8
|
)
|
||||
Net actuarial gain
|
291
|
|
176
|
|
|
(10
|
)
|
(6
|
)
|
||||
Amortization of net actuarial losses
|
(65
|
)
|
(40
|
)
|
|
(6
|
)
|
(3
|
)
|
||||
Amortization of prior service costs and transition
|
11
|
|
7
|
|
|
16
|
|
10
|
|
||||
Plan amendment
|
—
|
|
—
|
|
|
(9
|
)
|
(5
|
)
|
||||
January 31, 2015
|
$
|
949
|
|
$
|
573
|
|
|
$
|
(22
|
)
|
$
|
(12
|
)
|
Net Pension and Postretirement Health Care
Benefits Expense
|
Pension Benefits
|
|
Postretirement
Health Care Benefits
|
||||||||||||||||
|
|||||||||||||||||||
(millions)
|
2014
|
|
2013
|
|
2012
|
|
|
2014
|
|
2013
|
|
2012
|
|
||||||
Service cost benefits earned during the period
|
$
|
112
|
|
$
|
118
|
|
$
|
121
|
|
|
$
|
5
|
|
$
|
6
|
|
$
|
10
|
|
Interest cost on projected benefit obligation
|
149
|
|
137
|
|
139
|
|
|
2
|
|
2
|
|
3
|
|
||||||
Expected return on assets
|
(233
|
)
|
(235
|
)
|
(220
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of losses
|
65
|
|
103
|
|
103
|
|
|
6
|
|
6
|
|
3
|
|
||||||
Amortization of prior service cost
|
(11
|
)
|
(11
|
)
|
—
|
|
|
(16
|
)
|
(16
|
)
|
(10
|
)
|
||||||
Settlement and Special Termination Charges
|
—
|
|
3
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Total
|
$
|
82
|
|
$
|
115
|
|
$
|
143
|
|
|
$
|
(3
|
)
|
$
|
(2
|
)
|
$
|
6
|
|
Defined Benefit Pension Plan Information
(millions)
|
2014
|
|
|
2013
|
|
||
Accumulated benefit obligation (ABO) for all plans
(a)
|
$
|
3,834
|
|
|
$
|
3,149
|
|
Projected benefit obligation for pension plans with an ABO in excess of plan assets
(b)
|
65
|
|
|
54
|
|
||
Total ABO for pension plans with an ABO in excess of plan assets
|
56
|
|
|
48
|
|
(a)
|
The present value of benefits earned to date assuming
no
future salary growth.
|
(b)
|
The present value of benefits earned to date by plan participants, including the effect of assumed future salary increases.
|
Benefit Obligation Weighted Average Assumptions
|
Pension Benefits
|
|
Postretirement
Health Care Benefits
|
||||||
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
Discount rate
|
3.87
|
%
|
4.77
|
%
|
|
2.74
|
%
|
3.30
|
%
|
Average assumed rate of compensation increase
|
3.00
|
|
3.00
|
|
|
n/a
|
|
n/a
|
|
Net Periodic Benefit Expense Weighted Average Assumptions
|
Pension Benefits
|
|
Postretirement
Health Care Benefits
|
||||||||||
|
|||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
|
2014
|
|
2013
|
|
2012
|
|
Discount rate
|
4.77
|
%
|
4.40
|
%
|
4.65
|
%
|
|
3.30
|
%
|
2.75
|
%
|
3.60
|
%
|
Expected long-term rate of return on plan assets
|
7.50
|
|
8.00
|
|
8.00
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
Average assumed rate of compensation increase
|
3.00
|
|
3.00
|
|
3.50
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
Health Care Cost Trend Rates – 1% Change
(millions)
|
1% Increase
|
|
1% Decrease
|
|
||
Effect on total of service and interest cost components of net periodic postretirement health care benefit expense
|
$
|
1
|
|
$
|
(1
|
)
|
Effect on the health care component of the accumulated postretirement benefit obligation
|
4
|
|
(4
|
)
|
Asset Category
|
Current Targeted
|
|
Actual Allocation
|
|||
|
Allocation
|
|
2014
|
|
2013
|
|
Domestic equity securities
(a)
|
19
|
%
|
19
|
%
|
21
|
%
|
International equity securities
|
12
|
|
12
|
|
12
|
|
Debt securities
|
25
|
|
28
|
|
26
|
|
Balanced funds
|
30
|
|
31
|
|
28
|
|
Other
(b)
|
14
|
|
10
|
|
13
|
|
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Equity securities include our common stock in amounts substantially less than
1 percent
of total plan assets as of
January 31, 2015
and
February 1, 2014
.
|
(b)
|
Other assets include private equity, mezzanine and high-yield debt, natural resources and timberland funds, multi-strategy hedge funds, derivative instruments and a
4 percent
allocation to real estate.
|
Fair Value Measurements
|
|
Fair Value at January 31, 2015
|
|
Fair Value at February 1, 2014
|
||||||||||||||||||||
(millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||||
Cash and cash equivalents
|
$
|
211
|
|
$
|
7
|
|
$
|
204
|
|
$
|
—
|
|
$
|
150
|
|
$
|
6
|
|
$
|
144
|
|
$
|
—
|
|
Common collective trusts
(a)
|
1,102
|
|
—
|
|
1,102
|
|
—
|
|
1,000
|
|
—
|
|
1,000
|
|
—
|
|
||||||||
Government securities
(b)
|
349
|
|
—
|
|
349
|
|
—
|
|
282
|
|
—
|
|
282
|
|
—
|
|
||||||||
Fixed income
(c)
|
624
|
|
—
|
|
624
|
|
—
|
|
541
|
|
—
|
|
541
|
|
—
|
|
||||||||
Balanced funds
(d)
|
1,152
|
|
—
|
|
1,152
|
|
—
|
|
903
|
|
—
|
|
903
|
|
—
|
|
||||||||
Private equity funds
(e)
|
171
|
|
—
|
|
—
|
|
171
|
|
221
|
|
—
|
|
—
|
|
221
|
|
||||||||
Other
(f)
|
175
|
|
—
|
|
51
|
|
124
|
|
170
|
|
—
|
|
43
|
|
127
|
|
||||||||
Total plan assets
|
$
|
3,784
|
|
$
|
7
|
|
$
|
3,482
|
|
$
|
295
|
|
$
|
3,267
|
|
$
|
6
|
|
$
|
2,913
|
|
$
|
348
|
|
(a)
|
Passively managed index funds with holdings in domestic and international equities.
|
(b)
|
Investments in government securities and passively managed index funds with holdings in long-term government bonds.
|
(c)
|
Investments in corporate bonds, mortgage-backed securities and passively managed index funds with holdings in long-term corporate bonds.
|
(d)
|
Investments in equities, nominal and inflation-linked fixed income securities, commodities and public real estate.
|
(e)
|
Includes investments in venture capital, mezzanine and high-yield debt, natural resources and timberland funds.
|
(f)
|
Investments in multi-strategy hedge funds (including domestic and international equity securities, convertible bonds and other alternative investments), real estate and derivative investments.
|
Level 3 Reconciliation
|
Actual Return on Plan Assets
(a)
|
|
|
|
||||||||||||||
(millions)
|
Balance at
Beginning of
Period
|
|
Relating to
Assets Still Held
at the Reporting
Date
|
|
Relating to
Assets Sold
During the
Period
|
|
Purchases,
Sales and
Settlements
|
|
Transfer in
and/or out
of Level 3
|
|
Balance at
End of
Period
|
|
||||||
2013
|
|
|
|
|
|
|
||||||||||||
Private equity funds
|
$
|
236
|
|
$
|
7
|
|
$
|
26
|
|
$
|
(48
|
)
|
$
|
—
|
|
$
|
221
|
|
Other
|
122
|
|
14
|
|
1
|
|
(10
|
)
|
—
|
|
127
|
|
||||||
2014
|
|
|
|
|
|
|
||||||||||||
Private equity funds
|
$
|
221
|
|
$
|
(21
|
)
|
$
|
13
|
|
$
|
(42
|
)
|
$
|
—
|
|
$
|
171
|
|
Other
|
127
|
|
6
|
|
5
|
|
(14
|
)
|
—
|
|
124
|
|
(a)
|
Represents realized and unrealized gains (losses) from changes in values of those financial instruments only for the period in which the instruments were classified as Level 3.
|
Position
|
|
Valuation Technique
|
Cash and cash equivalents
|
|
These investments are cash holdings and investment vehicles valued using the Net Asset Value (NAV) provided by the administrator of the fund. The NAV for the investment vehicles is based on the value of the underlying assets owned by the fund minus applicable costs and liabilities, and then divided by the number of shares outstanding.
|
Equity securities
|
|
Valued at the closing price reported on the major market on which the individual securities are traded.
|
Common collective trusts/ balanced funds/ certain multi-strategy hedge funds
|
|
Valued using the NAV provided by the administrator of the fund. The NAV is a quoted transactional price for participants in the fund, which do not represent an active market.
|
Fixed income and government securities
|
|
Valued using matrix pricing models and quoted prices of securities with similar characteristics.
|
Private equity/ real estate/ certain multi-strategy hedge funds/ other
|
|
Valued by deriving Target's proportionate share of equity investment from audited financial statements. Private equity and real estate investments require significant judgment on the part of the fund manager due to the absence of quoted market prices, inherent lack of liquidity, and the long term of such investments. Certain multi-strategy hedge funds represent funds of funds that include liquidity restrictions and for which timely valuation information is not available.
|
Estimated Future Benefit Payments
(millions)
|
Pension
Benefits
|
|
Postretirement
Health Care Benefits
|
|
||
2015
|
$
|
161
|
|
$
|
4
|
|
2016
|
170
|
|
5
|
|
||
2017
|
180
|
|
5
|
|
||
2018
|
189
|
|
6
|
|
||
2019
|
197
|
|
7
|
|
||
2020-2024
|
1,113
|
|
33
|
|
(millions)
|
Cash Flow
Hedges
|
|
|
Currency
Translation
Adjustment
|
|
|
Pension and
Other
Benefit
|
|
|
Total
|
|
||||
February 1, 2014
|
$
|
(25
|
)
|
|
$
|
(444
|
)
|
|
$
|
(422
|
)
|
|
$
|
(891
|
)
|
Other comprehensive (loss)/income before reclassifications
|
—
|
|
|
(302
|
)
|
|
(165
|
)
|
|
(467
|
)
|
||||
Amounts reclassified from AOCI
|
3
|
|
(a)
|
730
|
|
(b)
|
26
|
|
(c)
|
759
|
|
||||
January 31, 2015
|
$
|
(22
|
)
|
|
$
|
(16
|
)
|
|
$
|
(561
|
)
|
|
$
|
(599
|
)
|
(a)
|
Represents gains and losses on cash flow hedges, net of
$2 million
of taxes, which are recorded in net interest expense on the Consolidated Statements of Operations.
|
(b)
|
Represents Canadian accumulated currency translation adjustments deconsolidated on January 15, 2015. See Note 6 for additional information.
|
(c)
|
Represents amortization of pension and other benefit liabilities, net of
$17 million
of taxes, which is recorded in SG&A expenses on the Consolidated Statements of Operations. See Note 26 for additional information.
|
Business Segment Results
|
2014
|
|
2013
|
|
2012
(a)
|
||||||
(millions)
|
|
|
|||||||||
Sales
|
$
|
72,618
|
|
|
$
|
71,279
|
|
|
$
|
71,960
|
|
Cost of sales
|
51,278
|
|
|
50,039
|
|
|
50,568
|
|
|||
Selling, general and administrative expenses
(f)
|
14,450
|
|
|
14,285
|
|
|
13,759
|
|
|||
Depreciation and amortization
|
2,129
|
|
|
1,996
|
|
|
2,044
|
|
|||
Segment profit
|
$
|
4,761
|
|
|
$
|
4,959
|
|
|
$
|
5,589
|
|
Data Breach-related costs, net of insurance receivable
(b)(f)
|
(145
|
)
|
|
(17
|
)
|
|
—
|
|
|||
Reduction of beneficial interest asset
(c)(f)
|
(53
|
)
|
|
(98
|
)
|
|
—
|
|
|||
Other
(d)(f)
|
(29
|
)
|
|
(64
|
)
|
|
—
|
|
|||
Gain on receivables transaction
(e)
|
—
|
|
|
391
|
|
|
152
|
|
|||
Earnings from continuing operations before interest expense and income taxes
|
4,535
|
|
|
5,170
|
|
|
5,740
|
|
|||
Net interest expense
|
882
|
|
|
1,049
|
|
|
684
|
|
|||
Earnings from continuing operations before income taxes
|
$
|
3,653
|
|
|
$
|
4,121
|
|
|
$
|
5,056
|
|
(a)
|
Consisted of
53
weeks.
|
(b)
|
Refer to Note 17 for more information on Data Breach related costs.
|
(c)
|
Refer to Note 7 for more information on TD profit sharing amounts and the reduction of the beneficial interest asset.
|
(d)
|
For 2014, includes impairments of
$16 million
related to undeveloped land in the U.S. and
$13 million
of expense related to converting co-branded card program to MasterCard. For 2013, includes and
$23 million
workforce-reduction charge primarily related to severance and benefits costs, a
$22 million
charge related to part-time team member health benefit changes, and
$19 million
in impairment charges related to undeveloped land in the U.S.
|
(e)
|
Represents the gain on receivables transaction recorded in our Consolidated Statements of Operations, plus, for 2012, the difference between bad debt expense and net write-offs for the fourth quarter. Refer to Note 7 for more information on our credit card receivables transaction.
|
(f)
|
The sum of segment SG&A expenses, reduction of beneficial interest asset, Data Breach-related costs and other charges equal consolidated SG&A expenses.
|
Total Assets by Segment
(millions)
|
January 31,
2015 |
|
February 1,
2014 |
|
||
U.S.
|
$
|
39,495
|
|
$
|
38,128
|
|
Assets of discontinued operations
|
1,775
|
|
6,254
|
|
||
Unallocated assets
(a)
|
134
|
|
171
|
|
||
Total assets
|
$
|
41,404
|
|
$
|
44,553
|
|
(a)
|
At January 31, 2015, represents the beneficial interest asset of
$74 million
and insurance receivable related to the Data Breach of
$60 million
. At February 1, 2014, represents the beneficial interest asset of
$127 million
and insurance receivable related to the Data Breach of
$44 million
.
|
Quarterly Results
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total Year
|
|||||||||||||||||||||||||
(millions, except per share data)
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
||||||||||
Sales
|
$
|
16,657
|
|
$
|
16,620
|
|
|
$
|
16,957
|
|
$
|
16,841
|
|
|
$
|
17,254
|
|
$
|
16,925
|
|
|
$
|
21,751
|
|
$
|
20,893
|
|
|
$
|
72,618
|
|
$
|
71,279
|
|
Cost of sales
|
11,748
|
|
11,510
|
|
|
11,798
|
|
11,557
|
|
|
12,171
|
|
11,849
|
|
|
15,563
|
|
15,124
|
|
|
51,278
|
|
50,039
|
|
||||||||||
Selling, general and administrative expenses
|
3,376
|
|
3,397
|
|
|
3,599
|
|
3,490
|
|
|
3,644
|
|
3,632
|
|
|
4,058
|
|
3,946
|
|
|
14,676
|
|
14,465
|
|
||||||||||
Depreciation and amortization
|
511
|
|
491
|
|
|
537
|
|
493
|
|
|
535
|
|
503
|
|
|
545
|
|
508
|
|
|
2,129
|
|
1,996
|
|
||||||||||
Gain on receivables transaction
|
—
|
|
(391
|
)
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
(391
|
)
|
||||||||||
Earnings before interest expense and income taxes
|
1,022
|
|
1,613
|
|
|
1,023
|
|
1,301
|
|
|
904
|
|
941
|
|
|
1,585
|
|
1,315
|
|
|
4,535
|
|
5,170
|
|
||||||||||
Net interest expense
|
152
|
|
610
|
|
|
433
|
|
152
|
|
|
146
|
|
145
|
|
|
151
|
|
142
|
|
|
882
|
|
1,049
|
|
||||||||||
Earnings from continuing operations before income taxes
|
870
|
|
1,003
|
|
|
590
|
|
1,149
|
|
|
758
|
|
796
|
|
|
1,434
|
|
1,173
|
|
|
3,653
|
|
4,121
|
|
||||||||||
Provision for income taxes
|
299
|
|
358
|
|
|
199
|
|
403
|
|
|
232
|
|
273
|
|
|
474
|
|
393
|
|
|
1,204
|
|
1,427
|
|
||||||||||
Net earnings from continuing operations
|
571
|
|
645
|
|
|
391
|
|
746
|
|
|
526
|
|
523
|
|
|
960
|
|
780
|
|
|
2,449
|
|
2,694
|
|
||||||||||
Discontinued operations, net of tax
|
(153
|
)
|
(147
|
)
|
|
(157
|
)
|
(134
|
)
|
|
(174
|
)
|
(182
|
)
|
|
(3,600
|
)
|
(260
|
)
|
|
(4,085
|
)
|
(723
|
)
|
||||||||||
Net earnings/(loss)
|
$
|
418
|
|
$
|
498
|
|
|
$
|
234
|
|
$
|
611
|
|
|
$
|
352
|
|
$
|
341
|
|
|
$
|
(2,640
|
)
|
$
|
520
|
|
|
$
|
(1,636
|
)
|
$
|
1,971
|
|
Basic earnings/(loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Continuing operations
|
$
|
0.90
|
|
$
|
1.00
|
|
|
$
|
0.62
|
|
$
|
1.17
|
|
|
$
|
0.83
|
|
$
|
0.83
|
|
|
$
|
1.51
|
|
$
|
1.23
|
|
|
$
|
3.86
|
|
$
|
4.24
|
|
Discontinued operations
|
(0.24
|
)
|
(0.23
|
)
|
|
(0.25
|
)
|
(0.21
|
)
|
|
(0.28
|
)
|
(0.29
|
)
|
|
(5.64
|
)
|
(0.41
|
)
|
|
(6.44
|
)
|
(1.14
|
)
|
||||||||||
Net earnings/(loss) per share
|
$
|
0.66
|
|
$
|
0.78
|
|
|
$
|
0.37
|
|
$
|
0.96
|
|
|
$
|
0.55
|
|
$
|
0.54
|
|
|
$
|
(4.14
|
)
|
$
|
0.82
|
|
|
$
|
(2.58
|
)
|
$
|
3.10
|
|
Diluted earnings/(loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Continuing operations
|
$
|
0.89
|
|
$
|
0.99
|
|
|
$
|
0.61
|
|
$
|
1.16
|
|
|
$
|
0.82
|
|
$
|
0.82
|
|
|
$
|
1.49
|
|
$
|
1.22
|
|
|
$
|
3.83
|
|
$
|
4.20
|
|
Discontinued operations
|
(0.24
|
)
|
(0.23
|
)
|
|
(0.25
|
)
|
(0.21
|
)
|
|
(0.27
|
)
|
(0.29
|
)
|
|
(5.59
|
)
|
(0.41
|
)
|
|
(6.38
|
)
|
(1.13
|
)
|
||||||||||
Net earnings/(loss) per share
|
$
|
0.66
|
|
$
|
0.77
|
|
|
$
|
0.37
|
|
$
|
0.95
|
|
|
$
|
0.55
|
|
$
|
0.54
|
|
|
$
|
(4.10
|
)
|
$
|
0.81
|
|
|
$
|
(2.56
|
)
|
$
|
3.07
|
|
Dividends declared per share
|
0.43
|
|
0.36
|
|
|
0.52
|
|
0.43
|
|
|
0.52
|
|
0.43
|
|
|
0.52
|
|
0.43
|
|
|
1.99
|
|
1.65
|
|
||||||||||
Closing common stock price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
High
|
62.54
|
|
70.67
|
|
|
61.38
|
|
73.32
|
|
|
63.93
|
|
71.99
|
|
|
77.13
|
|
66.89
|
|
|
77.13
|
|
73.32
|
|
||||||||||
Low
|
55.07
|
|
60.85
|
|
|
55.34
|
|
68.29
|
|
|
57.50
|
|
62.13
|
|
|
61.12
|
|
56.64
|
|
|
55.07
|
|
56.64
|
|
U.S. Sales by Product Category
(a)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total Year
|
|||||||||||||||
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
Household essentials
|
27
|
%
|
27
|
%
|
|
27
|
%
|
27
|
%
|
|
27
|
%
|
26
|
%
|
|
22
|
%
|
22
|
%
|
|
25
|
%
|
25
|
%
|
Hardlines
|
15
|
|
15
|
|
|
15
|
|
15
|
|
|
15
|
|
15
|
|
|
24
|
|
24
|
|
|
18
|
|
18
|
|
Apparel and accessories
|
19
|
|
20
|
|
|
20
|
|
20
|
|
|
19
|
|
20
|
|
|
17
|
|
17
|
|
|
19
|
|
19
|
|
Food and pet supplies
|
23
|
|
22
|
|
|
20
|
|
20
|
|
|
21
|
|
21
|
|
|
19
|
|
19
|
|
|
21
|
|
21
|
|
Home furnishings and décor
|
16
|
|
16
|
|
|
18
|
|
18
|
|
|
18
|
|
18
|
|
|
18
|
|
18
|
|
|
17
|
|
17
|
|
Total
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
(a)
|
As a percentage of sales.
|
•
|
Item One--Election of Directors
|
•
|
Stock Ownership Information--Section 16(a) Beneficial Ownership Reporting Compliance
|
•
|
General Information About Corporate Governance and the Board of Directors
|
◦
|
Business Ethics and Conduct
|
◦
|
Committees
|
•
|
Questions and Answers About Our Annual Meeting and Voting-Question 14
|
•
|
Compensation Discussion and Analysis
|
•
|
Compensation Tables
|
•
|
Compensation Committee Report
|
•
|
Stock Ownership Information--
|
◦
|
Beneficial Ownership of Directors and Officers
|
◦
|
Beneficial Ownership of Target’s Largest Shareholders
|
•
|
Compensation Tables--Equity Compensation Plan Information
|
•
|
General Information About Corporate Governance and the Board of Directors--
|
◦
|
Policy on Transactions with Related Persons
|
◦
|
Director Independence
|
◦
|
Committees
|
•
|
Ratification of Appointment of Ernst & Young LLP As Independent Registered Public Accounting Firm-Audit and Non-Audit Fees
|
a)
|
Financial Statements
|
•
|
Consolidated Statements of Operations for the Years Ended January 31, 2015, February 1, 2014 and February 2, 2013
|
•
|
Consolidated Statements of Comprehensive Income for the Years Ended January 31, 2015, February 1, 2014 and February 2, 2013
|
•
|
Consolidated Statements of Financial Position at January 31, 2015 and February 1, 2014
|
•
|
Consolidated Statements of Cash Flows for the Years Ended January 31, 2015, February 1, 2014 and February 2, 2013
|
•
|
Consolidated Statements of Shareholders' Investment for the Years Ended January 31, 2015, February 1, 2014 and February 2, 2013
|
•
|
Notes to Consolidated Financial Statements
|
•
|
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements
|
Financial Statement Schedules
|
|
None.
|
|
Other schedules have not been included either because they are not applicable or because the information is included elsewhere in this Report.
|
b)
|
Exhibits
|
(2)A
|
†
|
Amended and Restated Transaction Agreement dated September 12, 2011 among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
(1)
|
B
|
†
|
First Amending Agreement dated January 20, 2012 to Amended and Restated Transaction Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
(2)
|
C
|
|
Second Amending Agreement dated June 18, 2012 to Amended and Restated Transaction Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
(3)
|
D
|
|
Third Amending Agreement dated June 18, 2012 to Amended and Restated Transaction Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
(4)
|
E
|
†
|
Fourth Amending Agreement dated December 14, 2012 to Amended and Restated Transaction Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
(5)
|
F
|
‡
|
Purchase and Sale Agreement dated October 22, 2012 among Target National Bank, Target Receivables LLC, Target Corporation and TD Bank USA, N.A.
(6)
|
G
|
‡
|
First Amendment to Purchase and Sale Agreement dated March 13, 2013 among Target National Bank, Target Receivables LLC, Target Corporation and TD Bank USA, N.A.
(7)
|
(3)A
|
|
Amended and Restated Articles of Incorporation (as amended through June 9, 2010)
(8)
|
B
|
|
By-Laws (as amended through September 9, 2009)
(9)
|
(4)A
|
|
Indenture, dated as of August 4, 2000 between Target Corporation and Bank One Trust Company, N.A.
(10)
|
B
|
|
First Supplemental Indenture dated as of May 1, 2007 to Indenture dated as of August 4, 2000 between Target Corporation and The Bank of New York Trust Company, N.A. (as successor in interest to Bank One Trust Company N.A.)
(11)
|
C
|
|
Target agrees to furnish to the Commission on request copies of other instruments with respect to long-term debt.
|
(10)A
|
*
|
Target Corporation Officer Short-Term Incentive Plan
(12)
|
B
|
*
|
Target Corporation Long-Term Incentive Plan (as amended and restated effective June 8, 2011)
(13)
|
C
|
*
|
Target Corporation SPP I (2011 Plan Statement) (as amended and restated effective June 8, 2011)
(14)
|
D
|
*
|
Target Corporation SPP II (2011 Plan Statement) (as amended and restated effective June 8, 2011)
(15)
|
E
|
*
|
Target Corporation SPP III (2014 Plan Statement) (as amended and restated effective January 1, 2014)
(16)
|
F
|
*
|
Target Corporation Officer Deferred Compensation Plan (as amended and restated effective June 8, 2011)
(17)
|
G
|
*
|
Target Corporation Officer EDCP (2015 Plan Statement) (as amended and restated effective January 1, 2015)
|
H
|
*
|
Target Corporation Deferred Compensation Plan Directors
(18)
|
I
|
*
|
Target Corporation DDCP (2013 Plan Statement) (as amended and restated effective December 1, 2013)
(19)
|
J
|
*
|
Target Corporation Officer Income Continuance Policy Statement (as amended and restated effective June 8, 2011)
(20)
|
K
|
*
|
Target Corporation Executive Excess Long Term Disability Plan (as restated effective January 1, 2010
(21)
|
L
|
*
|
Director Retirement Program
(22)
|
M
|
*
|
Target Corporation Deferred Compensation Trust Agreement (as amended and restated effective January 1, 2009)
(23)
|
N
|
*
|
Amendment to Target Corporation Deferred Compensation Trust Agreement (as amended and restated effective January 1, 2009)
(24)
|
O
|
|
Five-Year Credit Agreement dated as of October 14, 2011 among Target Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed therein
(25)
|
P
|
|
Extension and Amendment dated August 28, 2012 to Five-Year Credit Agreement among Target Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed therein
(26)
|
Q
|
|
Second Extension and Amendment dated September 3, 2013 to Five-Year Credit Agreement among Target Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed therein
(27)
|
R
|
|
Third Amendment dated January 5, 2015 to Five-Year Credit Agreement among Target Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed therein
|
S
|
|
DIP Facility Term Sheet dated January 14, 2015 among Target Corporation, as DIP Lender, and Target Canada Co. and its subsidiaries listed therein
|
T
|
w
|
Credit Card Program Agreement dated October 22, 2012 among Target Corporation, Target Enterprise, Inc. and TD Bank USA, N.A.
(28)
|
U
|
*
|
Target Corporation 2011 Long-Term Incentive Plan
(29)
|
V
|
*
|
Form of Amended and Restated Executive Non-Qualified Stock Option Agreement
|
W
|
*
|
Form of Executive Restricted Stock Unit Agreement
|
X
|
*
|
Form of Executive Performance-Based Restricted Stock Unit Agreement
|
Y
|
*
|
Form of Executive Performance Share Unit Agreement
|
Z
|
*
|
Form of Non-Employee Director Non-Qualified Stock Option Agreement
(30)
|
AA
|
*
|
Form of Non-Employee Director Restricted Stock Unit Agreement
|
BB
|
*
|
Form of Cash Retention Award
(31)
|
CC
|
*
|
Advisory Period Letter to Gregg W. Steinhafel, dated May 21, 2014
(32)
|
DD
|
*
|
Restricted Stock Unit Agreement with John J. Mulligan, effective as of May 22, 2014
(33)
|
EE
|
*
|
Employment Offer Letter to Brian C. Cornell, dated July 26, 2014
(34)
|
FF
|
*
|
Make-Whole Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21, 2014
(35)
|
GG
|
*
|
Make-Whole Performance-Based Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21, 2014
(36)
|
HH
|
*
|
Aircraft Time Sharing Agreement as of March 13, 2015 among Target Corporation and Brian C. Cornell
|
(12)
|
|
Statements of Computations of Ratios of Earnings to Fixed Charges
|
(21)
|
|
List of Subsidiaries
|
(23)
|
|
Consent of Independent Registered Public Accounting Firm
|
(24)
|
|
Powers of Attorney
|
(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 Pursuant to Section 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 Pursuant to Section 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
|
†
|
Excludes the Disclosure Letter and Schedule A referred to in the agreement, Exhibits A and B to the First Amending Agreement, and Exhibit A to the Fourth Amending Agreement which Target Corporation agrees to furnish supplementally to the Securities and Exchange Commission upon request.
|
‡
|
Excludes Schedules A through N, Annex A and Exhibits A-1 through C-2 referred to in the agreement and First Amendment, which Target Corporation agrees to furnish supplementally to the Securities and Exchange Commission upon request.
|
w
|
Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.
|
*
|
Management contract or compensation plan or arrangement required to be filed as an exhibit to this Form 10-K.
|
(1)
|
Incorporated by reference to Exhibit (2)A to Target's Form 10-Q Report for the quarter ended October 29, 2011.
|
(2)
|
Incorporated by reference to Exhibit (2)B to Target's Form 10-K Report for the year ended January 28, 2012.
|
(3)
|
Incorporated by reference to Exhibit (2)C to Target's Form 10-Q Report for the quarter ended July 28, 2012.
|
(4)
|
Incorporated by reference to Exhibit (2)D to Target's Form 10-Q Report for the quarter ended July 28, 2012.
|
(5)
|
Incorporated by reference to Exhibit (2)E to Target's Form 10-K Report for the year ended February 2, 2013.
|
(6)
|
Incorporated by reference to Exhibit (2)E to Target's Form 10-Q Report for the quarter ended October 27, 2012.
|
(7)
|
Incorporated by reference to Exhibit (2)G to Target's Form 8-K Report filed March 13, 2013.
|
(8)
|
Incorporated by reference to Exhibit (3)A to Target's Form 8-K Report filed June 10, 2010.
|
(9)
|
Incorporated by reference to Exhibit (3)B to Target's Form 8-K Report filed September 10, 2009.
|
(10)
|
Incorporated by reference to Exhibit 4.1 to Target's Form 8-K Report filed August 10, 2000.
|
(11)
|
Incorporated by reference to Exhibit 4.1 to the Registrant's Form 8-K Report filed May 1, 2007.
|
(12)
|
Incorporated by reference to Appendix A to the Registrant's Proxy Statement filed April 30, 2012.
|
(13)
|
Incorporated by reference to Exhibit (10)B to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(14)
|
Incorporated by reference to Exhibit (10)C to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(15)
|
Incorporated by reference to Exhibit (10)D to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(16)
|
Incorporated by reference to Exhibit (10)E to Target's Form 10-K Report for the year ended February 1, 2014.
|
(17)
|
Incorporated by reference to Exhibit (10)F to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(18)
|
Incorporated by reference to Exhibit (10)I to Target's Form 10-K Report for the year ended February 3, 2007.
|
(19)
|
Incorporated by reference to Exhibit (10)I to Target's Form 10-K Report for the year ended February 1, 2014.
|
(20)
|
Incorporated by reference to Exhibit (10)J to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(21)
|
Incorporated by reference to Exhibit (10)A to Target's Form 10-Q Report for the quarter ended October 30, 2010.
|
(22)
|
Incorporated by reference to Exhibit (10)O to Target's Form 10-K Report for the year ended January 29, 2005.
|
(23)
|
Incorporated by reference to Exhibit (10)O to Target's Form 10-K Report for the year ended January 31, 2009.
|
(24)
|
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(25)
|
Incorporated by reference to Exhibit (10)O to Target's Form 10-Q Report for the quarter ended October 29, 2011.
|
(26)
|
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended October 27, 2012.
|
(27)
|
Incorporated by reference to Exhibit (10)Y to Target’s Form 10-Q Report for the quarter ended November 2, 2013.
|
(28)
|
Incorporated by reference to Exhibit (10)X to Target’s Form 10-Q/A Report for the quarter ended May 4, 2013.
|
(29)
|
Incorporated by reference to Appendix A to Target's Proxy Statement filed April 28, 2011.
|
(30)
|
Incorporated by reference to Exhibit (10)EE to Target's Form 8-K Report filed January 11, 2012.
|
(31)
|
Incorporated by reference to Exhibit (10)W to Target’s Form 10-K Report for year ended February 2, 2013.
|
(32)
|
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(33)
|
Incorporated by reference to Exhibit (10)BB to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(34)
|
Incorporated by reference to Exhibit (10)CC to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(35)
|
Incorporated by reference to Exhibit (10)DD to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(36)
|
Incorporated by reference to Exhibit (10)EE to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
|
|
|
|
TARGET CORPORATION
|
|
|
By:
|
|
Dated: March 13, 2015
|
|
John J. Mulligan
Executive Vice President, Chief Financial
Officer and Chief Accounting Officer
|
|
|
Dated: March 13, 2015
|
Brian C. Cornell
Chairman of the Board and Chief Executive Officer
|
|
|
Dated: March 13, 2015
|
John J. Mulligan
Executive Vice President, Chief Financial Officer and
Chief Accounting Officer
|
ROXANNE S. AUSTIN
DOUGLAS M. BAKER, JR.
CALVIN DARDEN
HENRIQUE DE CASTRO
JAMES A. JOHNSON
|
|
MARY E. MINNICK
ANNE M. MULCAHY
DERICA W. RICE
KENNETH L. SALAZAR
JOHN G. STUMPF
|
|
Constituting a majority of the Board of Directors
|
|
By:
|
|
Dated: March 13, 2015
|
|
John J. Mulligan
Attorney-in-fact
|
Exhibit
|
Description
|
Manner of Filing
|
(2)A
|
Amended and Restated Transaction Agreement dated September 12, 2011 among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
|
Incorporated by Reference
|
(2)B
|
First Amending Agreement dated January 20, 2012 to Amended and Restated Transaction Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
|
Incorporated by Reference
|
(2)C
|
Second Amending Agreement dated June 18, 2012 to Amended and Restated Transaction Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
|
Incorporated by Reference
|
(2)D
|
Third Amending Agreement dated June 18, 2012 to Amended and Restated Transaction Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
|
Incorporated by Reference
|
(2)E
|
Fourth Amending Agreement dated December 14, 2012 to Amended and Restated Transaction Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co.
|
Incorporated by Reference
|
(2)F
|
Purchase and Sale Agreement dated October 22, 2012 among Target National Bank, Target Receivables LLC, Target Corporation and TD Bank USA, N.A.
|
Incorporated by Reference
|
(2)G
|
First Amendment to Purchase and Sale Agreement dated March 13, 2013 among Target National Bank, Target Receivables LLC, Target Corporation and TD Bank USA, N.A.
|
Incorporated by Reference
|
(3)A
|
Amended and Restated Articles of Incorporation (as amended June 9, 2010)
|
Incorporated by Reference
|
(3)B
|
By-Laws (as amended through September 9, 2009)
|
Incorporated by Reference
|
(4)A
|
Indenture, dated as of August 4, 2000 between Target Corporation and Bank One Trust Company, N.A.
|
Incorporated by Reference
|
(4)B
|
First Supplemental Indenture dated as of May 1, 2007 to Indenture dated as of August 4, 2000 between Target Corporation and The Bank of New York Trust Company, N.A. (as successor in interest to Bank One Trust Company N.A.)
|
Incorporated by Reference
|
(4)C
|
Target agrees to furnish to the Commission on request copies of other instruments with respect to long-term debt.
|
Filed Electronically
|
(10)A
|
Target Corporation Officer Short-Term Incentive Plan
|
Incorporated by Reference
|
(10)B
|
Target Corporation Long-Term Incentive Plan (as amended and restated effective June 8, 2011)
|
Incorporated by Reference
|
(10)C
|
Target Corporation SPP I (2011 Plan Statement) (as amended and restated effective June 8, 2011)
|
Incorporated by Reference
|
(10)D
|
Target Corporation SPP II (2011 Plan Statement) (as amended and restated effective June 8, 2011)
|
Incorporated by Reference
|
(10)E
|
Target Corporation SPP III (2014 Plan Statement) (as amended and restated effective January 1, 2014)
|
Incorporated by Reference
|
(10)F
|
Target Corporation Officer Deferred Compensation Plan (as amended and restated effective June 8, 2011)
|
Incorporated by Reference
|
(10)G
|
Target Corporation Officer EDCP (2015 Plan Statement) (as amended and restated effective January 1, 2015)
|
Filed Electronically
|
(10)H
|
Target Corporation Deferred Compensation Plan Directors
|
Incorporated by Reference
|
(10)I
|
Target Corporation DDCP (2013 Plan Statement) (as amended and restated effective December 1, 2013)
|
Incorporated by Reference
|
(10)J
|
Target Corporation Officer Income Continuance Policy Statement (as amended and restated effective June 8, 2011)
|
Incorporated by Reference
|
(10)K
|
Target Corporation Executive Excess Long Term Disability Plan (as restated effective January 1, 2010)
|
Incorporated by Reference
|
(10)L
|
Director Retirement Program
|
Incorporated by Reference
|
|
SECTION 1 INTRODUCTION; DEFINITIONS
|
1
|
|
|
||
|
1.1
|
Name of Plan; History
|
1
|
|
|
|
|
1.2
|
Definitions
|
2
|
|
|
|
|
|
1.2.1
|
Account
|
2
|
|
|
|
|
1.2.2
|
Affiliate
|
2
|
|
|
|
|
1.2.3
|
Base Salary
|
2
|
|
|
|
|
1.2.4
|
Beneficiary
|
2
|
|
|
|
|
1.2.5
|
Board
|
2
|
|
|
|
|
1.2.6
|
Bonus
|
2
|
|
|
|
|
1.2.7
|
Certified Earnings
|
2
|
|
|
|
|
1.2.8
|
Change-in-Control.
|
3
|
|
|
|
|
1.2.9
|
Code
|
3
|
|
|
|
|
1.2.10
|
[Intentionally left blank.]
|
4
|
|
|
|
|
1.2.11
|
Company
|
4
|
|
|
|
|
1.2.12
|
Company’s Fiscal Year
|
4
|
|
|
|
|
1.2.13
|
Crediting Rate Alternative
|
4
|
|
|
|
|
1.2.14
|
Deferral Credit
|
4
|
|
|
|
|
1.2.15
|
Disabled
|
4
|
|
|
|
|
1.2.16
|
Discretionary Credit
|
4
|
|
|
|
|
1.2.17
|
Earnings Credit
|
4
|
|
|
|
|
1.2.18
|
EDCP
|
4
|
|
|
|
|
1.2.19
|
Effective Date
|
4
|
|
|
|
|
1.2.20
|
Eligible Compensation
|
4
|
|
|
|
|
1.2.21
|
Employee
|
4
|
|
|
|
|
1.2.22
|
Enhancement
|
5
|
|
|
|
|
1.2.23
|
ERISA
|
5
|
|
|
|
|
1.2.24
|
ESBP
|
5
|
|
|
|
|
1.2.25
|
ESBP Benefit
|
5
|
|
|
|
|
1.2.26
|
ESBP Benefit Transfer Credits
|
5
|
|
|
|
|
1.2.27
|
Newly Eligible Employee
|
5
|
|
|
|
|
1.2.28
|
Officer
|
5
|
|
|
|
|
1.2.29
|
Participant
|
5
|
|
|
|
|
1.2.30
|
Participating Employer
|
5
|
|
|
|
|
1.2.31
|
Performance Share Award
|
6
|
|
|
|
|
1.2.32
|
Plan
|
6
|
|
|
|
|
1.2.33
|
Plan Administrator
|
6
|
|
|
|
|
1.2.34
|
Plan Rules
|
6
|
|
|
|
|
1.2.35
|
Plan Statement
|
6
|
|
|
|
|
1.2.36
|
Plan Year
|
6
|
|
|
|
|
1.2.37
|
Restoration Match Credit
|
6
|
|
|
|
|
1.2.38
|
Signing Bonus
|
6
|
|
|
|
|
1.2.39
|
SPP Benefit
|
6
|
|
|
|
|
1.2.40
|
SPP Benefit Transfer Credit
|
6
|
|
|
|
|
1.2.41
|
Specified Employee
|
6
|
|
|
|
|
1.2.42
|
Target 401(k) Plan
|
7
|
|
|
|
|
1.2.43
|
Target Pension Plan
|
7
|
|
|
|
|
1.2.44
|
Termination of Employment.
|
7
|
|
|
|
|
1.2.45
|
Trust
|
7
|
|
|
|
|
1.2.46
|
Unforeseeable Emergency
|
7
|
|
|
|
|
1.2.47
|
Valuation Date
|
7
|
|
|
|
|
1.2.48
|
Year of Service
|
8
|
|
|
|
|
|
|
|
|
|
|
SECTION 2 PARTICIPATION AND DEFERRAL ELECTIONS
|
9
|
|
|
||
|
2.1
|
Eligibility.
|
9
|
|
|
|
|
2.2
|
Special Rules for Participating Employees
|
9
|
|
|
|
|
2.3
|
Termination of Participation
|
9
|
|
|
|
|
2.4
|
Rehires and Transfers.
|
10
|
|
|
|
|
2.5
|
Effect on Employment.
|
10
|
|
|
|
|
2.6
|
Condition of Participation
|
10
|
|
|
|
|
2.7
|
Deferral Elections
|
11
|
|
|
|
|
2.8
|
Base Salary Deferrals
|
11
|
|
|
|
|
2.9
|
Bonus Deferrals
|
12
|
|
|
|
|
2.10
|
Performance Share Award Deferrals
|
12
|
|
|
|
|
2.11
|
Special Code Section 162(m) Deferral Elections
|
12
|
|
|
|
|
2.12
|
Cancellation of Deferral Elections.
|
13
|
|
|
|
|
|
|
|
|
||
|
SECTION 3 CREDITS TO ACCOUNTS
|
14
|
|
|
||
|
3.1
|
Elective Deferral Credit
|
14
|
|
|
|
|
3.2
|
Restoration Match Credit.
|
14
|
|
|
|
|
3.3
|
SPP Benefit Transfer Credits.
|
15
|
|
|
|
|
3.4
|
ESBP Benefit Transfer Credits.
|
16
|
|
|
|
|
3.5
|
Discretionary Credits
|
17
|
|
|
|
|
|
|
|
|
|
|
|
SECTION 4 ADJUSTMENTS OF ACCOUNTS
|
18
|
|
|
||
|
4.1
|
Establishment of Accounts
|
18
|
|
|
|
|
4.2
|
Adjustments of Accounts
|
18
|
|
|
|
|
4.3
|
Investment Adjustment
|
18
|
|
|
|
|
4.4
|
Enhancement.
|
18
|
|
|
|
|
4.5
|
Account Adjustments Upon a Change-in-Control or Plan Termination.
|
19
|
|
|
|
|
|
|
|
|
|
|
|
SECTION 5 VESTING
|
20
|
|
|
||
|
5.1
|
Deferral Credits and Restoration Match Credits
|
20
|
|
|
|
|
5.2
|
Discretionary Credits
|
20
|
|
|
|
|
5.3
|
Enhancement.
|
20
|
|
|
|
|
5.4
|
SPP Benefit Transfer Credit
|
20
|
|
|
|
|
5.5
|
ESBP Benefit Transfer Credit
|
20
|
|
|
|
|
5.6
|
Failure to Cooperate; Misinformation or Failure to Disclose
|
20
|
|
|
|
|
|
|
|
|||
|
SECTION 6 DISTRIBUTION
|
21
|
|
|
||
|
6.1
|
Distribution Elections
|
21
|
|
|
|
|
6.2
|
General Rule
|
21
|
|
|
|
|
6.3
|
Six-Month Suspension for Specified Employees
|
24
|
|
|
|
|
6.4
|
Distribution on Account of Death; Distribution Following Death
|
24
|
|
|
|
|
6.5
|
Distribution on Account of Unforeseeable Emergency.
|
24
|
|
|
|
|
6.6
|
Designation of Beneficiaries.
|
25
|
|
|
|
6.7
|
Facility of Payment.
|
26
|
|
|
|
|
6.8
|
Tax Withholding
|
27
|
|
|
|
|
6.9
|
Payments Upon Rehire
|
27
|
|
|
|
|
6.10
|
Application for Distribution
|
27
|
|
|
|
|
6.11
|
Acceleration of Distributions
|
27
|
|
|
|
|
6.12
|
Delay of Distributions
|
27
|
|
|
|
|
|
|
|
|
||
|
SECTION 7 SOURCE OF PAYMENTS; NATURE OF INTEREST
|
28
|
|
|
||
|
7.1
|
Source of Payments.
|
28
|
|
|
|
|
7.2
|
Unfunded Obligation
|
28
|
|
|
|
|
7.3
|
Establishment of Trust
|
28
|
|
|
|
|
7.4
|
Spendthrift Provision
|
28
|
|
|
|
|
7.5
|
Compensation Recovery (Recoupment)
|
29
|
|
|
|
|
|
|
|
|
|
|
|
SECTION 8 ADOPTION, AMENDMENT AND TERMINATION
|
30
|
|
|
||
|
8.1
|
Adoption
|
30
|
|
|
|
|
8.2
|
Amendment.
|
30
|
|
|
|
|
8.3
|
Termination and Liquidation.
|
30
|
|
|
|
|
|
|
|
|
|
|
|
SECTION 9 CLAIM PROCEDURES
|
32
|
|
|
||
|
9.1
|
Claims Procedure
|
32
|
|
|
|
|
9.2
|
Rules and Regulations.
|
33
|
|
|
|
|
9.3
|
Limitations and Exhaustion.
|
34
|
|
|
|
|
|
|
|
|
||
|
SECTION 10 PLAN ADMINISTRATION
|
36
|
|
|
||
|
10.1
|
Plan Administration
|
36
|
|
|
|
|
10.2
|
Conflict of Interest
|
36
|
|
|
|
|
10.3
|
Service of Process
|
37
|
|
|
|
|
10.4
|
Choice of Law
|
37
|
|
|
|
|
10.5
|
Responsibility for Delegate
|
37
|
|
|
|
|
10.6
|
Expenses
|
37
|
|
|
|
|
10.7
|
Errors in Computations
|
37
|
|
|
|
|
10.8
|
Indemnification
|
37
|
|
|
|
|
10.9
|
Notice
|
37
|
|
|
|
|
|
|
|
|
||
|
SECTION 11 CONSTRUCTION
|
38
|
|
|
||
|
11.1
|
ERISA Status
|
38
|
|
|
|
|
11.2
|
IRC Status
|
38
|
|
|
|
|
11.3
|
Rules of Document Construction
|
38
|
|
|
|
|
11.4
|
References to Laws
|
38
|
|
|
|
|
11.5
|
Appendices
|
38
|
|
|
|
|
|
|
|
|
|
|
|
APPENDIX A
|
39
|
|
|
||
|
|
|
|
|
|
|
|
APPENDIX B
|
41
|
|
|
(a)
|
the
limits imposed by Code section 401(a)(17) will not apply;
|
(b)
|
deferrals under Section 2.8 of this Plan are included as Base Salary; and
|
(c)
|
Bonus and Signing Bonus amounts are not included as Base Salary.
|
(a)
|
the limits imposed by Code section 401(a)(17) will not apply;
|
(b)
|
deferrals under Section 2.9 of this Plan are included as Bonus; and
|
(c)
|
Signing Bonus amounts are not included as Bonus.
|
(a)
|
Individuals who are Continuing Directors cease for any reason to constitute 50% or more of the directors of the Company; or
|
(b)
|
30% or more of the outstanding voting power of the Voting Stock of the Company is acquired or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by any Person, other than an entity resulting from a Business Combination in which clauses (x) and (y) of Section 1.2.8(c) apply; or
|
(c)
|
the consummation of a merger or consolidation of the Company with or into another entity, a statutory share exchange, a sale or other disposition (in one transaction or a series of transactions) of all or substantially all of the Company’s assets or a similar business combination (each, a “Business Combination”), in each case unless, immediately following such Business Combination, (x) all or substantially all of the beneficial owners (within the meaning of Rule 13d-3 under the Exchange Act) of the Company’s Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the voting power of the then outstanding shares of voting stock (or comparable voting equity interests) of the surviving or acquiring entity resulting from such Business Combination (including such beneficial ownership of an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), in substantially the same proportions (as compared to the other beneficial owners of the Company’s Voting Stock immediately prior to such Business Combination) as their beneficial ownership of the Company’s Voting Stock immediately prior to such Business Combination, and (y) no Person beneficially owns, directly or indirectly, 30% or more of the voting power of the outstanding voting stock (or comparable equity interests) of the surviving or acquiring entity (other than a direct or indirect parent entity of the surviving or acquiring entity, that, after giving effect to the Business Combination, beneficially owns, directly or indirectly, 100% of the outstanding voting stock (or comparable equity interests) of the surviving or acquiring entity); or
|
(d)
|
approval by the shareholders of a definitive agreement or plan to liquidate or dissolve the Company.
|
(a)
|
For purposes of determining entitlement to or the amount of benefits under the Plan, “Termination of Employment” means a severance of a Participant’s employment relationship with each Participating Employer and all Affiliates, for any reason.
|
(b)
|
For purposes of determining when a distribution will be made under the Plan, a “Termination of Employment” will be deemed to occur if, based on the relevant facts and circumstances to the Participant, the Participating Employer, all Affiliates and Participant reasonably anticipate that the level of bona fide future services to be performed by the Participant for the Participating Employer and all Affiliates will permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36-month period.
|
(c)
|
A bona fide leave of absence that is six months or less, or during which an individual retains a reemployment right, will not cause a Termination of Employment. In the case of a leave of absence without a right of reemployment that exceeds the time periods described in this paragraph, a Termination of Employment will be deemed to occur once the leave of absence exceeds six months.
|
(d)
|
Notwithstanding the foregoing, a Termination of Employment shall not occur unless such termination also qualifies as a “separation from service,” as defined under Code section 409A and related guidance thereunder.
|
(a)
|
is a “qualified employee” as that term is defined in the Target 401(k) Plan; and
|
(b)
|
is an Officer.
|
(a)
|
The Employee will become a Participant in this Plan immediately upon satisfying the requirements to participate hereunder.
|
(b)
|
The Employee’s deferral elections made under the EDCP will transfer to the Plan and continue as an election made under Section 2.
|
(c)
|
The Employee’s account maintained under the EDCP will be transferred to the Employee’s Account under this Plan.
|
(d)
|
The Employee’s distribution elections made under the EDCP (including any default distributions) will transfer to this Plan and continue as the distribution elections made under this Plan.
|
(e)
|
The Employee’s beneficiary designation made under the EDCP will be treated as the Employee’s Beneficiary designation under this Plan until changed in accordance with Section 6.7.
|
(a)
|
the first part of the election will apply with respect to the first paycheck issued during the applicable Plan Year through the last paycheck issued prior to the end of the Company’s Fiscal Year ending in the Plan Year, and
|
(b)
|
the second part will apply to the paychecks issued after the beginning of the Company’s Fiscal Year beginning in such Plan Year and issued prior to the end of such Plan Year.
|
(a)
|
The Bonus amounts that satisfy the requirements of performance-based compensation under Code section 162(m), and
|
(b)
|
All other Bonus amounts as determined by the Plan Administrator.
|
(a)
|
An election to defer Base Salary amounts for the Plan Year during which the hardship withdrawal was made will be cancelled. Further, no Base Salary deferral election will be effective for the next Plan Year if the hardship withdrawal occurs after June 30, and on or before December 31 of the calendar year.
|
(b)
|
Any election to defer Bonus or Performance Share Award amounts in effect at the time of the hardship withdrawal will be cancelled. Further, no deferral election for a Bonus related to service in the next Plan Year will be effective if the hardship withdrawal occurs after June 30, and on or before December 31 of the calendar year.
|
(a)
|
The maximum matching contribution percentage the Participant is eligible to receive on deferrals under the applicable Target 401(k) Plan multiplied by the Participant’s Base Salary and Bonus that is deferred under this Plan during the Plan Year; and
|
(b)
|
The maximum matching contribution percentage the Participant is eligible to receive on deferrals under the applicable Target 401(k) Plan multiplied by the Participant’s Plan Year Base Salary and Bonus that is not deferred under this Plan during the Plan Year and that exceeds the compensation limit in effect under Code section 401(a)(17) for such Plan Year;
|
(a)
|
A Participant who satisfies the requirements of Section 3.3.1 receives an initial SPP Benefit Transfer Credit on or about the April 30 (or immediately preceding business day) immediately following the calendar year in which the Participant becomes eligible under Section 3.3.1, in an amount equal to the actuarial lump sum present value on March 31 (or immediately preceding business day) for the Participant’s SPP Benefit accrued through the preceding December 31. In the case of Participant who is an Executive officer, such transfer will be made and determined on or about the last business day prior to the end of the Company’s Fiscal Year.
|
(b)
|
Upon a Plan termination on account of a Change-in-Control under Section 8.3.2, the Plan Administrator shall credit the initial SPP Benefit Transfer Credit to a Participant’s Account as of the Plan termination effective date in an amount equal to the actuarial lump sum present value on the Plan termination effective date.
|
(a)
|
For each Plan Year, the annual SPP Benefit Transfer Credit will be the difference between (i) the SPP Benefit determined as the last day of the Plan Year expressed as the actuarial lump sum present value on the determination date and (ii) the aggregate amount of the previous SPP Benefit Transfer Credits to the Participant’s Account increased by assumed earnings at an annual rate equal to the sum of the average of the applicable Stable Value Crediting Rate Alternative for the Plan Year plus two percent (2%) determined from the crediting date through the earlier of June 5, 2012 or the determination date and after June 5, 2012 at an annual rate equal to the sum of the average of the applicable Intermediate-Term Bond Crediting Rate Alternative for the Plan Year plus two percent (2%) from the later of June 5 or the crediting date through the determination date; provided that with respect to periods that a Participant does not receive the Enhancement on their Account, the annual rate will be equal to the average of the applicable Stable Value Crediting Rate Alternative, through June 5, 2012, or the Intermediate-Term Bond Crediting Rate Alternative, after June 5, 2012, as applicable.
|
(b)
|
If the amount of the annual or final SPP Benefit Transfer Credit is positive, a credit will be made to the Participant’s Account. If the amount of the SPP Benefit Transfer Credit is negative and (i) the Participant is an executive Officer on the determination date, or (ii) the Participant is an Employee and member of
|
(c)
|
The annual SPP Benefit Transfer Credit (including a negative credit) will be made to the Participant’s Account as of the April 30 (or immediately preceding business day) following the determination date. In the case of a Participant who is an executive Officer, the Plan Administrator, in its sole discretion, may cause such transfer will be made and determined on or about the last business day prior to the end of the Company’s Fiscal Year.
|
(d)
|
For purposes of this section, “determination date” means on or about March 31; provided that in the case of a Participant who is an executive Officer, the Plan Administrator, in its sole discretion, may cause the “determination date” to be on or about the last business day prior to the end of the Company’s Fiscal Year.
|
(e)
|
Upon a Plan termination on account of a Change-in-Control under Section 8.3.2, the Plan Administrator shall credit to a Participant’s Account as of the Plan termination effective date an SPP Benefit Transfer Credit as determined in this Section 3.3.3 as of the Plan termination effective date.
|
(f)
|
Notwithstanding the foregoing, a Participant’s final SPP Benefit Transfer Credit will be determined within 60 days following his or her Termination of Employment as defined under Section 1.2.44(a).
|
(g)
|
Notwithstanding the foregoing, determination of the amount of a Participant’s SPP Benefit Transfer Credit under Paragraph (b) is subject to the calculation of the Participant’s SPP III benefit, if any, under Section A-4.3 of Appendix A.
|
(a)
|
For each Plan Year, the annual ESBP Benefit Transfer Credit will be the difference between (i) the ESBP Benefit determined as of the last day of the Plan Year as expressed as the actuarial lump sum present value on the determination date, and (ii) the aggregate amount of the previous ESBP Benefit Transfer Credits to the Participant’s Account increased by earnings at an annual rate equal to the sum of the average of the applicable Stable Value Crediting Rate Alternatives plus two percent (2%), from the crediting dates through the earlier of June 5, 2012 or the determination date and after June 5, 2012 at an annual rate equal to the sum of the average of the applicable Intermediate-Term Bond
|
(b)
|
The credit to the Participant’s Account will be made as of the April 30 (or immediately preceding business day) following the determination date.
|
(c)
|
For purposes of this section, “determination date” means on or about March 30.
|
(d)
|
Upon a Change-in-Control, the Plan Administrator shall credit to a Participant’s Account as of the date of the Change-in-Control an ESBP Benefit Transfer Credit as determined in this Section 3.4. as of the date of the Change-in-Control.
|
(e)
|
Notwithstanding the foregoing, a final annual ESBP Benefit Transfer Credit will be made to the Participant’s Account 60 days following a Participant’s Termination of Employment as defined under Section 1.2.44(a).
|
(a)
|
Installments.
A series of annual installments made over either five (5) years or ten (10) years commencing at a time provided under Section 6.2.2(a) or (b). For purposes of Code section 409A, installment payments will be treated as a series of separate payments at all times.
|
(b)
|
Lump Sum.
A single lump sum payment.
|
(a)
|
Termination of Employment.
Within 60 days following the Participant’s Termination of Employment, other than on account of death.
|
(b)
|
One-Year Anniversary of Termination of Employment.
Within 60 days following the one-year anniversary of the Participant’s Termination of Employment, other than on account of death.
|
(c)
|
Fixed Payment Date.
Within 60 days of January 1 of the calendar year elected by the Participant at the time of deferral. If a Participant has a Termination of Employment as defined in Section 1.2.44 prior to the fixed payment date, such amount shall be paid on the earlier of: (i) within 60 days following January 1 in the tenth year following the year of the Termination of Employment, or (ii) January 1 of the calendar year elected by the Participant at the time of deferral. The Plan Administrator will establish Plan Rules, procedures and limitations on establishing the number and times of the fixed payment dates available for Participants to elect.
|
(d)
|
Payouts in 2008 and 2009.
During 2007 and 2008, consistent with transition relief available under Code section 409A, and subject to Plan Rules:
|
(i)
|
Participants had an opportunity to elect during 2007 to receive a distribution of all or a portion of their Account valued as of December 31, 2007 to be distributed in January 2008.
|
(ii)
|
Participants had an opportunity to elect during 2007 to receive a distribution of all or a portion of their Bonus Deferral Credits for 2007 and Performance Share Awards in 2004, if any, to be credited under this Plan in 2008, to be distributed on the date such Bonus Deferral Credits or Performance Share Awards would otherwise have been credited to this Plan, or, with respect to such Performance Share Awards, such other date as specified in the election form.
|
(iii)
|
Participants had an opportunity to elect during 2008 to receive a distribution of all or a portion of their Account valued as of December 31, 2008 to be distributed in January 2009.
|
(iv)
|
Participants had an opportunity to elect during 2008 to receive a distribution of all or a portion of their Bonus Deferral Credits for 2008, if any, to be credited under this Plan in 2009, to be distributed on the date such Bonus Deferral Credits would otherwise have been credited to this Plan.
|
(a)
|
In the case of SPP Benefit Transfer Credits, other than those pursuant to Appendix A, Section A-4.3 - a single lump sum within 60 days following the one-year anniversary of the Participant’s Termination of Employment.
|
(b)
|
In the case of SPP Benefit Transfer Credits pursuant to Appendix A, Section A-4.3:
|
(i)
|
Twenty-four (24) monthly installment payments commencing within 60 days following the Participant’s Termination of Employment;
|
(ii)
|
Each monthly installment payment will be determined by dividing: (A) the amount of the vested portion of the Account attributable to Appendix A, Section A-4.3 and an amount of Earnings Credits equal to the investment adjustment that would have been credited on such SPP Benefit Transfer Credits at the Stable Value Crediting Rate Alternative through the most recent Valuation Date preceding the earlier of June 5, 2012 or date the installment is due, and after June 5, 2012, at the Intermediate-Term Bond Crediting Rate Alternative through the most recent Valuation Date preceding the date the installment is due, by (B) twenty-four (24), less the number of monthly installment payments that have previously been made from the Plan.
|
(c)
|
In all other cases - a single lump sum payment within 60 days following the Participant’s Termination of Employment.
|
(a)
|
Deferral and Restoration Match Credits.
|
(i)
|
Lump Sum Distribution.
If Deferral or Restoration Match Credits are due after the complete distribution of the Participant’s vested Account balance, or subaccount balance to which such Deferral or Restoration Match Credit relate, then such subsequent credits will be made to the Account and paid to the Participant in a single lump sum cash payment within 60 days of being credited to the Account.
|
(ii)
|
Installment Distribution.
If Deferral or Restoration Match Credits are due after a related installment distribution occurs, then such subsequent credits will be made to the Account and included in the Account balance to determine the amount of the remaining scheduled payments as applicable.
|
(b)
|
SPP or ESBP Benefit Transfer Credit.
The SPP Benefit Transfer Credit other than those pursuant to Appendix A, Section A-4.3 or ESBP Benefit Transfer Credit, as applicable, arising after a Participant’s Termination of Employment pursuant to Sections 3.3.3(f) and 3.4.1(e) shall be distributed as follows:
|
(i)
|
For amounts accruing prior to January 1, 2014, in a single lump sum within 60 days following the Termination of Employment; and
|
(ii)
|
For amounts accruing on or after January 1, 2014,
|
(A)
|
If the SPP Benefit Transfer Credit is due after the complete distribution of the Participant’s vested Account balance, or subaccount balance to which such Credit relates, then such Credit will be made to the Account and paid to the Participant in a single lump sum payment within 60 days of being credited to the Account;
|
(B)
|
If the SPP Benefit Transfer Credit is due after a related installment distribution occurs, then such subsequent Credit will be made to the Account and included in the Account balance to determine the amount of the remaining scheduled payments as applicable; and
|
(C)
|
If the SPP Benefit Transfer Credit is due prior to the commencement of payment to which such credit relates, distribution shall be made at the time and in the manner elected by the Participant or pursuant to the Plan’s rule, all as provided in Section 6.2.2.
|
(a)
|
Each Participant may designate one or more primary Beneficiaries or secondary Beneficiaries to receive all or a specified part of such Participant’s vested Account in the event of such Participant’s death. If fewer than all designated primary or secondary Beneficiaries predecease the Participant, then the amount of such predeceased Beneficiary’s portion shall be allocated to the remaining primary or secondary Beneficiaries, as the case may be.
|
(b)
|
The Participant may change or revoke any such designation from time to time without notice to or consent from any spouse, any person named as Beneficiary or any other person.
|
(c)
|
No such designation, change or revocation shall be effective unless completed and filed with the Plan Administrator in accordance with Plan Rules during the Participant’s lifetime.
|
(a)
|
fails to designate a Beneficiary,
|
(b)
|
designates a Beneficiary and thereafter revokes such designation without naming another Beneficiary, or
|
(c)
|
designates one or more Beneficiaries and all such Beneficiaries so designated fail to survive the Participant, such Participant’s vested Account, shall be payable to the first class of the following classes of automatic Beneficiaries:
|
(a)
|
If there is not sufficient evidence that a person designated as a Beneficiary was living at the time of the death of the Participant, it shall be deemed that the Beneficiary was not living at the time of the death of the Participant.
|
(b)
|
The automatic Beneficiaries specified in Section 6.6.2 and the Beneficiaries designated by the Participant shall become fixed at the time of the Participant’s death (subject to Section 6.6.3) so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary hereunder, such remaining payments shall be payable to the representative of such Beneficiary’s estate.
|
(c)
|
If the Participant designates as a Beneficiary the person who is the Participant’s spouse on the date of the designation, either by name or by relationship, or both, the dissolution, annulment or other legal termination of the marriage between the Participant and such person shall automatically revoke such designation. The foregoing shall not prevent the Participant from designating a former spouse as a beneficiary on a form that is both executed by the Participant and received by the Plan Administrator (i) after the date of the legal termination of the marriage between the Participant and such former spouse and (ii) during the Participant’s lifetime.
|
(d)
|
A finalized marriage (other than a common law marriage) of a Participant subsequent to the date of filing of a Beneficiary designation shall revoke such designation unless the Participant’s new spouse had previously been designated as the Beneficiary.
|
(e)
|
Any designation of a nonspouse Beneficiary by name that is accompanied by a description of relationship to the Participant shall be given effect without regard to whether the relationship to the Participant exists either then or at the Participant’s death.
|
(f)
|
Any designation of a Beneficiary only by statement of relationship to the Participant shall be effective only to designate the person or persons standing in such relationship to the Participant at the Participant’s death.
|
(a)
|
to the duly appointed guardian, conservator or other legal representative of such individual, or
|
(b)
|
to a person or institution entrusted with the care or maintenance of the incompetent or disable Participant or Beneficiary, provided such person or institution has satisfied the Plan Administrator that the payment will be used for the best interest and assist in the care of such individual, and provided further, that no prior claim for said payment has been made by a duly appointed guardian, conservator or other legal representative of such individual.
|
(a)
|
To the extent necessary or reasonable to comply with any changes in law, the Board may at any time terminate and liquidate this Plan, provided such termination and liquidation satisfies the requirements of Code section 409A.
|
(b)
|
To the extent that a Participant’s benefit under the Plan will be immediately included in the income of the Participant, as determined by a court of competent jurisdiction or the Internal Revenue Service, to the extent permitted under Code section 409A, the Board may terminate and liquidate this Plan,
in whole or in part, as it relates to the impacted Participant.
|
(a)
|
The Plan will be terminated effective as of the first date on which there has occurred both (i) a Change-in-Control under Section 1.2.8, and (ii) a funding of the Trust on account of such Change-in-Control (referred to herein as the “Plan termination effective date”) unless, prior to such Plan termination effective date, the Board affirmatively determines that the Plan will not be terminated as of such
|
(b)
|
The determination by the Board under paragraph (a) constitutes a determination that such termination will satisfy the requirements of Code section 409A, including an agreement by the Company that it will take such additional action or refrain from taking such action as may be necessary to satisfy the requirements necessary to terminate and liquidate the Plan under paragraph (c) below.
|
(c)
|
In the event the Board does not affirmatively determine not to terminate the Plan as provided in paragraph (a), such termination shall be subject to either (i) or (ii), as follows:
|
(i)
|
If the Change-in-Control qualifies as a “change in control event” for purposes of Code section 409A, payment of all amounts under the Plan will be accelerated and made in a lump sum as soon a administratively practicable but not more than 90 days following the Plan termination effective date, provided the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(B) have been satisfied.
|
(ii)
|
If the Change-in-Control does not qualify as a “change in control event” for purposes of Code section 409A, payment of all amounts under the Plan will be accelerated and made in a lump sum as soon as administratively practicable but not more than 60 days following the 12 month anniversary of the Plan termination effective date, provided the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(C) have been satisfied.
|
(a)
|
If the claim is denied in whole or in part, the Plan Administrator shall notify the claimant of the adverse benefit determination within ninety (90) days after receipt of the claim.
|
(b)
|
The ninety (90) day period for making the claim determination may be extended for ninety (90) days if the Plan Administrator determines that special circumstances require an extension of time for determination of the claim, provided that the Plan Administrator notifies the claimant, prior to the expiration of the initial ninety (90) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.
|
(a)
|
The specific reasons for the adverse determinations,
|
(b)
|
references to the specific provisions of this Plan Statement (or other applicable Plan document) on which the adverse determination is based,
|
(c)
|
a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary, and
|
(d)
|
a description of the claim and review procedures, including the time limits applicable to such procedure, and a statement of the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse determination on review.
|
(a)
|
The sixty (60) day period for deciding the claim on review may be extended for sixty (60) days if the Plan Administrator determines that special circumstances require an extension of time for determination of the claim, provided that the Plan Administrator notifies the claimant, prior to the expiration of the initial sixty (60) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.
|
(b)
|
In the event that the time period is extended due to a claimant’s failure to submit information necessary to decide a claim on review, the claimant shall have sixty (60) days within which to provide the necessary information and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of sixty (60) days.
|
(c)
|
The Plan Administrator’s review of a denied claim shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
|
(a)
|
the specific reasons for the denial,
|
(b)
|
references to the specific provisions of this Plan Statement (or other applicable Plan document) on which the adverse determination is based,
|
(c)
|
a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits,
|
(d)
|
a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain information about such procedures, and
|
(e)
|
a statement of the claimant’s right to bring an action under ERISA section 502(a).
|
(a)
|
No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the established claim procedures. The Plan Administrator may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the Plan Administrator upon request.
|
(b)
|
All decisions on claims and on requests for a review of denied claims shall be made by the Plan Administrator unless delegated as provided for in the Plan, in which case references in this Section 9 to the Plan Administrator shall be treated as references to the Plan Administrator’s delegate.
|
(c)
|
Claimants may be represented by a lawyer or other representative at their own expense, but the Plan Administrator reserves the right to require the claimant to furnish written authorization and establish reasonable procedures for determining whether an individual has been authorized to act on behalf of a claimant. A claimant’s representative shall be entitled to copies of all notices given to the claimant.
|
(d)
|
The decision of the Plan Administrator on a claim and on a request for a review of a denied claim may be provided to the claimant in electronic form instead of in writing at the discretion of the Plan Administrator.
|
(e)
|
In connection with the review of a denied claim, the claimant or the claimant’s representative shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information necessary to make a benefit determination accompanies the filing.
|
(f)
|
The time period within which a benefit determination will be made shall begin to run at the time a claim or request for review is filed in accordance with the claims procedures, without regard to whether all the information necessary to make a benefit determination accompanies the filing.
|
(g)
|
The claims and review procedures shall be administered with appropriate safeguards to that benefit claim determinations are made in accordance with governing plan documents and, where appropriate, the plan provisions have been applied consistently with respect to similarly situated claimants.
|
(h)
|
The Plan Administrator may, in its discretion, rely on any applicable statute of limitation or deadline as a basis for denial of any claim.
|
(a)
|
the date the Participant knew (or reasonably should have known) of the general nature of the dispute giving rise to the action, or
|
(b)
|
the date the claim was denied.
|
(a)
|
no Participant or Beneficiary shall be permitted to litigate any such matter unless a timely claim has been filed under these administrative procedures and these administrative procedures have been exhausted, and
|
(b)
|
determinations by the Plan Administrator (including determinations as to whether the claim was timely filed shall be afforded the maximum deference permitted by law.
|
(a)
|
Appoint one or more individuals or entities and delegate such of his or her powers and duties as he or she deems desirable to any individual or entity, in which case every reference herein made to Plan Administrator shall be deemed to mean or include the individual or entity as to matters within their jurisdiction. Such individual may be an officer or other employee of a Participating Employer or Affiliate, provided that any delegation to an employee of a Participating Employer or Affiliate will automatically terminate when he or she ceases to be an employee. Any delegation may be rescinded at any time; and
|
(b)
|
Select, employ and compensate from time to time such agents or consultants as the Plan Administrator may deem necessary or advisable in carrying out its duties and to rely on the advice and information provided by them.
|
(a)
|
The monthly pension benefit the Participant would be entitled to under the Target Pension Plan, based on the “traditional formula,” if such formula were applied
|
(i)
|
without regard to the maximum benefit limitation required by Code section 415;
|
(ii)
|
without regard to the maximum compensation limitation under Code section 401(a)(17);
|
(iii)
|
as if the definition of “certified earnings” under the Target Pension Plan for a plan year included compensation that would have been paid in the plan year in the absence of the Participant’s election to defer payment of
|
(iv)
|
without regard to the alternative benefit formula of Sections 4.6(a)(3) and 4.6(b)(2) of the Target Pension Plan.
|
(b)
|
The monthly pension benefit the Participant is entitled to receive under the Target Pension Plan on account of the “traditional formula.”
|
(a)
|
The amount that would have been credited each quarter (including both “pay credits” and “interest credits”) to the Participant’s “personal pension account” under the Target Pension Plan, if such account were applied:
|
(i)
|
without regard to the maximum benefit limitations required by Code section 415;
|
(ii)
|
without regard to the maximum compensation limitation under Code section 401(a)(17);
|
(iii)
|
as if the definition of “certified earnings” under the Target Pension Plan for a calendar quarter included compensation that would have been paid during such calendar quarter in the absence of the Participant’s election to defer payment of the compensation to a later date pursuant to the provisions of a deferred compensation plan;
|
(iv)
|
as if a distribution had been made from such account equal to any SPP Benefit Transfer Credits made under Section 3.3.
|
(b)
|
The amount of the credits actually made to the Participant’s “personal pension account” under the Target Pension Plan.
|
(a)
|
The monthly pension benefits determined under Section A-4.1(a) determined by treating the Participant as five (5) years older than his or her actual age solely for purposes of determining the early commencement factor (but in no case shall the Participant’s age be deemed to be greater than age 65); provided, however, the early commencement factor shall be equal to the factor in effect under this Paragraph (a) on February 1, 2013, or, if greater, the Participant’s actual early commencement factor under the Target Pension Plan.
|
(b)
|
The monthly pension benefits determined under Section A-4.1(a).
|
1.
|
Definitions.
The following terms shall have the following meanings for all purposes of this Agreement:
|
2.
|
Agreement to Lease.
Operator agrees to lease the Aircraft to Lessee from time to time on an “as needed and as available” basis, and to provide a fully qualified flight crew for all Lessee’s flights, in accordance with the terms and conditions of this Agreement. Nothing contained herein shall obligate or entitle Lessee to any minimum usage of the Aircraft.
|
3.
|
Term and Termination.
The initial term of this Agreement shall commence on the Effective Date and continue for a period of one year. Thereafter, this Agreement shall renew for additional and successive one year periods, until terminated as provided below. For purposes of this Agreement “
Term
” means the initial term and all successive one year renewal periods until this Agreement is terminated as provided below. This Agreement may be terminated by either Party at any time upon thirty (30) days prior written notice to the other Party, and this Agreement shall terminate automatically: (i) upon a final determination that there has been a total loss of all of the Aircraft; and (ii) on the date that Lessee ceases to be employed by Target Corporation or any of its affiliated companies, whether as a result of resignation, retirement, death or other termination.
|
4.
|
Applicable Regulations.
The Parties hereto intend that this Agreement shall constitute, and this Agreement shall be interpreted as, a
Time Sharing Agreement
as defined in Section 91.501(c)(1) of the FAR. The Parties agree that for all flights under this Agreement, the Aircraft shall be operated under the pertinent provisions of Subpart F of Part 91 of the FAR. If any provision of this Agreement is determined to be inconsistent with any of the requirements of the provisions of Subpart F of Part 91 of the FAR, such provision shall be deemed amended in any respect necessary to bring it into compliance with such requirements.
|
5.
|
Non-Exclusivity.
Lessee acknowledges that the Aircraft is leased to Lessee hereunder on a non-exclusive basis, and that the Aircraft will also be subject to use by Operator, and may also be subject to non-exclusive leases and lease to others during the Term.
|
6.
|
Flight Charges.
For each flight (as defined below) conducted under this Agreement, Operator shall keep a log of the flight, and Lessee shall pay Operator the sum of the expenses of operating such flight to the extent prescribed by FAR 91.501(d) or any successor provision (
i.e.
which shall not exceed the sum of the expenses set forth in subsections 6.1 - 6.10 below). For purposes of this Agreement, “
flight
” means a flight from a departure point to a single destination.
|
6.1
|
fuel, oil, lubricants, and other additives;
|
6.2
|
travel expenses of the crew, including food, lodging and ground transportation;
|
6.3
|
hangar and tie down costs away from the Aircraft’s Operating Base;
|
6.4
|
insurance obtained for the specific flight;
|
6.5
|
landing fees, airport taxes and similar assessments;
|
6.6
|
customs, foreign permit, and similar fees directly related to the flight;
|
6.7
|
in-flight food and beverages;
|
6.8
|
passenger ground transportation;
|
6.9
|
flight planning and weather contract services; and
|
6.10
|
an additional charge equal to 100% of the expenses listed in Section 6.1.
|
7.
|
Invoices and Payment.
Operator will initially pay all expenses related to the operation of the Aircraft when and as such expenses are incurred, provided that within thirty (30) days after the last day of any calendar month during which any flight for the account of Lessee has been conducted, Operator shall provide an invoice to Lessee for an amount determined in accordance with Section 6 above; provided that with regard to expenses that remain indeterminable as of the date of any invoice, such expenses shall be included in the next regularly-provided invoice after such expenses have been determined. Lessee shall remit the full amount of any such invoice, together with any applicable Taxes under Section 8, to Operator promptly within thirty (30) days following Lessee’s receipt of the invoice date. Payment shall be made in the form of a check payable to “Target Corporation” at the following address:
|
8.
|
Taxes.
Lessee shall be responsible for, shall indemnify and hold harmless Operator against, any Taxes which may be assessed or levied as a result of the lease of the Aircraft to Lessee, or the use of the Aircraft by Lessee, including without limitation, any “federal excise tax” or “
FET
” imposed under Internal Revenue Code §4261 resulting from Lessee’s (or his guests’) use of the Aircraft under this Agreement. Lessee shall remit to Operator all such Taxes together with each payment made pursuant to Section 7.
|
9.
|
Scheduling Flights.
Lessee shall submit requests for flight time and proposed flight schedules to the Operator as far in advance of any given flight as reasonably possible. Lessee shall provide at least the following information for each proposed flight as far in advance as reasonably possible prior to scheduled departure: departure airport; destination airport; date and time of departure; the names of all passengers; the nature and extent of luggage and/or cargo to be carried; the date and time of return flight, if any; and any other information concerning the proposed flight that may be pertinent or required by Operator or Operator’s flight crew.
|
10.
|
Title and Registration.
Operator has exclusive legal and equitable title to the Aircraft. Lessee acknowledges that title to the Aircraft shall remain vested in Operator. Lessee undertakes, to the extent permitted by Applicable Law, to do all such further acts, deeds, assurances or things as may be necessary or desirable, in Operator’s reasonable opinion, to protect or preserve Operator’s title to the Aircraft.
|
11.
|
Aircraft Maintenance.
Operator shall be solely responsible for maintenance, preventive maintenance and required or otherwise necessary inspections of the Aircraft, and shall take such requirements into account in scheduling the Aircraft. No period of maintenance, preventative maintenance, or inspection shall be delayed or postponed for the purpose of scheduling the Aircraft, unless said maintenance or inspection can be safely conducted at a later time in compliance with all Applicable Law, and within the sound discretion of the Pilot in Command.
|
12.
|
Flight Crews.
Operator shall provide, at its sole cost, to Lessee a qualified flight crew for each flight conducted in accordance with this Agreement. The members of the flight crew may be either employees or independent contractors of Operator. In either event, the flight crew shall be and remain under the exclusive command and control of Operator in all phases of all flights conducted hereunder.
|
13.
|
OPERATIONAL CONTROL.
THE PARTIES EXPRESSLY AGREE THAT OPERATOR SHALL HAVE AND MAINTAIN SOLE OPERATIONAL CONTROL OF THE AIRCRAFT AND EXCLUSIVE POSSESSION, COMMAND AND CONTROL
|
14.
|
Authority of Pilot In Command.
Notwithstanding that Operator shall have Operational Control of the Aircraft during any flight conducted pursuant to this Agreement, Operator and Lessee expressly agree that the Pilot in Command, in his or her sole discretion, may terminate any flight, refuse to commence any flight, or take any other flight-related action which in the judgment of the Pilot in Command is necessary to ensure the safety of the Aircraft, the flight crew, the passengers, and persons and property on the ground. The Pilot in Command shall have final and complete authority to postpone or cancel any flight for any reason or condition that in his or her judgment would compromise the safety of the flight. No such action of the Pilot in Command shall create or support any liability of Operator to Lessee for loss, injury, damage or delay.
|
15.
|
Passengers and Baggage.
Lessee may carry on the Aircraft on all flights under this Agreement such passengers and baggage/cargo as Lessee in its sole but reasonable discretion shall determine; provided, however, that the passengers to be carried on such flights shall be limited to those permitted under the pertinent provisions of Part 91 of the FAR, and that the number of such passengers shall in no event exceed the number of passenger seats legally available in the Aircraft and the total load, including fuel and oil in such quantities as the Pilot in Command shall determine to be required, shall not exceed the maximum allowable load for the Aircraft.
|
16.
|
Prohibited Items.
Lessee shall not cause or permit to be carried on board the Aircraft, and shall not cause or permit any passenger to carry on board the Aircraft, any contraband, prohibited dangerous goods, or prohibited controlled substances on the Aircraft at any time.
|
17.
|
Force Majeure.
Operator shall not be liable for delay or failure to furnish the Aircraft and/or flight crew pursuant to this Agreement when such failure is caused by government regulation or authority, mechanical difficulty, war, civil commotion, strikes or labor disputes, weather conditions, acts of God or other unforeseen or unanticipated circumstances.
|
18.
|
Lessee Representations and Warranties.
Lessee represents and warrants that:
|
18.1
|
Lessee will use the Aircraft solely for and on account of his own personal use, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo for compensation or hire.
|
18.2
|
Lessee shall refrain from incurring any mechanic’s or other lien in connection with inspection, preventative maintenance, maintenance or storage of the Aircraft,
|
|
whether permissible or impermissible under this Agreement, nor shall there be any attempt by Lessee to convey, mortgage, assign, lease, sublease, or any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien.
|
18.3
|
During the Term of this Agreement, Lessee will abide by and conform to all Applicable Laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to the use of the Aircraft by a time sharing lessee.
|
19.
|
No Assignments.
Neither this Agreement nor any Party’s interest herein shall be assignable to any other party whatsoever.
|
20.
|
Modification.
This Agreement may not be modified, altered, or amended except by written agreement executed by both Parties.
|
21.
|
Notices
. All notices and other communications under this Agreement shall be in writing (except as otherwise permitted herein) and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by personal delivery, by first class mail properly addressed and postage prepaid or by a reputable overnight courier service, addressed as follows:
|
If to Lessee:
|
Brian C. Cornell
|
If to Operator:
|
Target Corporation
|
22.
|
Entire Agreement.
This Agreement constitutes the entire agreement of the Parties as of the Effective Date and supersedes all prior or independent, oral or written agreements, understandings, statements, representations, commitments, promises, and warranties made with respect to the subject matter of this Agreement.
|
23.
|
Prohibited or Unenforceable Provisions.
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibitions or unenforceability in any jurisdiction. To
|
24.
|
Governing Law.
This Agreement has been negotiated and delivered in the State of Minnesota and shall in all respects be governed by, and construed in accordance with, the laws of the State of Minnesota, including all matters of construction, validity and performance, without giving effect to its conflict of laws provisions.
|
25.
|
DISCLAIMER.
THE AIRCRAFT IS BEING LEASED BY THE OPERATOR TO THE LESSEE HEREUNDER ON A COMPLETELY “AS IS, WHERE IS,” BASIS, WHICH IS ACKNOWLEDGED AND AGREED TO BY THE LESSEE. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND OPERATOR HAS NOT MADE AND SHALL NOT BE CONSIDERED OR DEEMED TO HAVE MADE (WHETHER BY VIRTUE OF HAVING LEASED THE AIRCRAFT UNDER THIS AGREEMENT, OR HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR TO ANY PART THEREOF, AND SPECIFICALLY, WITHOUT LIMITATION, IN THIS RESPECT OPERATOR DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES CONCERNING THE TITLE, AIRWORTHINESS, VALUE, CONDITION, DESIGN, MERCHANTABILITY, COMPLIANCE WITH SPECIFICATIONS, CONSTRUCTION AND CONDITION OF THE AIRCRAFT, OR FITNESS FOR A PARTICULAR USE OF THE AIRCRAFT AND AS TO THE ABSENCE OF LATENT AND OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AND AS TO THE ABSENCE OF ANY INFRINGEMENT OR THE LIKE, HEREUNDER OF ANY PATENT, TRADEMARK OR COPYRIGHT, AND AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT OR ANY PART THEREOF OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF. LESSEE HEREBY WAIVES, RELEASES, DISCLAIMS AND RENOUNCES ALL EXPECTATION OF OR RELIANCE UPON ANY SUCH AND OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF OPERATOR AND RIGHTS, CLAIMS AND REMEDIES OF LESSEE AGAINST OPERATOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO (I) ANY IMPLIED WARRANTY OF MERCHANTABILITY OF FITNESS FOR ANY PARTICULAR USE, (II) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (III) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF
|
26.
|
COUNTERPARTS.
This Agreement may be executed by the Parties hereto in two (2) or more separate counterparts, each and all of which when so executed and delivered shall be an original, and all of which shall together constitute but one and the same instrument.
|
27.
|
TRUTH IN LEASING.
|
Type of Aircraft
|
U.S. Registration Number
|
Manufacturer Serial Number
|
Cessna Citation X
|
N484T
|
750-0199
|
Cessna Citation X
|
N585T
|
750-0197
|
Cessna Citation X
|
N686T
|
750-0211
|
Gulfstream G550
|
N383T
|
5007
|
(i)
|
the commencement, continuation, prosecution or resolution of any Target Canada Proceeding;
|
(ii)
|
the taking by the Borrower or any of its direct or indirect Subsidiaries (including without limitation any member of the Target Canada Group) of any corporate action in respect of any Target Canada Proceeding or the commencement, continuation, prosecution or resolution thereof;
|
(iii)
|
the acceleration of the maturity of any Debt or other obligations of any member of the Target Canada Group as a result of the commencement of a Target Canada Proceeding;
|
(iv)
|
the failure of any member of the Target Canada Group to pay any of its Debts or other obligations on a timely basis following the commencement of a Target Canada Proceeding;
|
(v)
|
the occurrence of any other event or condition following the commencement of a Target Canada Proceeding resulting in the acceleration of, or enabling any Person to accelerate, the maturity of any Debt or other obligations of any member of the Target Canada Group;
|
(vi)
|
the demand for payment by the Borrower or any of its other Subsidiaries, whether based upon guaranty agreements issued by the Borrower or any theory of suretyship, or the commencement or threatened commencement against the Borrower or any of its other Subsidiaries of any action, suit or proceeding seeking payment by such Person, of any Debt or other payment obligations of any member of the Target Canada Group following the commencement of a Target Canada Proceeding, or the failure by the Borrower or any such other Subsidiary to pay any Debt or other payment obligations of any member of the Target Canada Group on a timely basis to the extent the Borrower or such other Subsidiary is contesting its obligation to pay such Debt or other payment obligations in good faith by appropriate proceedings;
|
(vii)
|
the rendering against any member of the Target Canada Group of any judgments or orders following commencement of a Target Canada Proceeding or the failure of any such judgments or orders to be satisfied or stayed; or
|
(viii)
|
the taking by any creditors or other third parties of any other actions (including without limitation the commencement or threatened commencement of any other actions, suits or proceedings or the exercise or threatened exercise of any other rights or remedies) against or in respect of any member of the Target Canada Group or the property or assets or any member of the Target Canada Group following the commencement of a Target Canada Proceeding,
|
|
||
|
|
|
|
TARGET CORPORATION
|
|
|
|
|
|
By:
|
/s/ Sara Ross
|
|
Name:
|
Sara Ross
|
|
Title:
|
Assistant Treasurer
|
|
|
ADMINISTRATIVE AGENT
:
|
|
|
|
|
|
BANK OF AMERICA, N.A.,
as
|
|
|
Administrative Agent
|
|
|
|
|
By:
|
/s/ J. Casey Cosgrove
|
|
Name:
|
J. Casey Cosgrove
|
|
Title:
|
Director
|
|
|
|
|
|
BANK OF AMERICA, N.A.
|
|
|
|
|
By:
|
/s/ J. Casey Cosgrove
|
|
Name:
|
J. Casey Cosgrove
|
|
Title
|
Director
|
|
|
CITIBANK, N.A.
|
|
|
|
|
By:
|
/s/ Nicholas Pateros
|
|
Name:
|
Nicholas Pateros
|
|
Title
|
Vice President
|
|
|
JPMORGAN CHASE BANK, N.A.
|
|
|
|
|
By:
|
/s/ Barry Bergman
|
|
Name:
|
Barry Bergman
|
|
Title
|
Managing Director
|
|
|
WELLS FARGO BANK, NATIONAL
|
|
|
ASSOCIATION
|
|
|
|
|
By:
|
/s/ Mark Halldorson
|
|
Name:
|
Mark H. Halldorson
|
|
Title
|
Director
|
|
|
U.S. BANK NATIONAL
|
|
|
ASSOCIATION
|
|
|
|
|
By:
|
/s/ Michael J. Staloch
|
|
Name:
|
Michael J. Staloch
|
|
Title
|
Senior Vice President
|
|
|
THE BANK OF
|
|
|
TOKYO-MITSUBISHI, LTD.
|
|
|
|
|
By:
|
/s/ Victor Pierzchalski
|
|
Name:
|
Victor Pierzchalski
|
|
Title
|
Authorized Signatory
|
|
|
BARCLAYS BANK PLC
|
|
|
|
|
By:
|
/s/ Ronnie Glenn
|
|
Name:
|
Ronnie Glenn
|
|
Title
|
Vice President
|
|
|
MIZUHO CORPORATE BANK,
|
|
|
LTD.
|
|
|
|
|
By:
|
/s/ David Lim
|
|
Name:
|
David Lim
|
|
Title
|
Authorized Signatory
|
|
|
GOLDMAN SACHS BANK USA
|
|
|
|
|
By:
|
/s/ Michelle Latzoni
|
|
Name:
|
Michelle Latzoni
|
|
Title
|
Authorized Signatory
|
|
|
HSBC BANK USA, NATIONAL
|
|
|
ASSOCIATION
|
|
|
|
|
By:
|
/s/ Alan Vitulich
|
|
Name:
|
Alan Vitulich
|
|
Title
|
Director
|
|
|
ROYAL BANK OF CANADA
|
|
|
|
|
By:
|
/s/ Simone G. Vinocour McKeever
|
|
Name:
|
Simone G. Vinocour McKeever
|
|
Title
|
Authorized Signatory
|
|
|
FIFTH THIRD BANK
|
|
|
|
|
By:
|
/s/ Gary S. Losey
|
|
Name:
|
Gary S. Losey
|
|
Title
|
VP - Corporate Banking
|
|
|
TORONTO DOMINION
|
|
|
(NEW YORK) LLC
|
|
|
|
|
By:
|
/s/ Massod Fikree
|
|
Name:
|
Masood Fikree
|
|
Title
|
Authorized Signatory
|
|
|
DEUTSCHE BANK AG NEW YORK
|
|
|
BRANCH
|
|
|
|
|
By:
|
/s/ Virginia Cosenza
|
|
Name:
|
Virginia Cosenza
|
|
Title
|
Vice President
|
|
|
|
|
By:
|
/s/ Andreas Neumeier
|
|
Name:
|
Andreas Neumeier
|
|
Title
|
Managing Director
|
|
|
STATE STREET BANK & TRUST
|
|
|
COMPANY
|
|
|
|
|
By:
|
/s/ Andrei Bourdine
|
|
Name:
|
Andrei Bourdine
|
|
Title
|
Vice President
|
|
|
SUMITOMO MITSUI BANKING
|
|
|
CORPORATION
|
|
|
|
|
By:
|
/s/ David Kee
|
|
Name:
|
David Kee
|
|
Title
|
Managing Director
|
|
|
THE BANK OF NEW YORK
|
|
|
MELLON
|
|
|
|
|
By:
|
/s/ William M. Feathers
|
|
Name:
|
William M. Feathers
|
|
Title
|
Vice President
|
|
|
FIRST HAWAIIAN BANK
|
|
|
|
|
By:
|
/s/ Derek Chang
|
|
Name:
|
Derek Chang
|
|
Title
|
Vice President
|
DIP BORROWER
|
Target Canada Co. and its subsidiaries (collectively, the “
Borrower
”)
|
||||
DIP LENDER
|
Target Corporation (the “
DIP Lender
”)
|
||||
STATUS OF EXISTING FACILITY
|
Effective upon the date upon which the Borrower obtains the Initial Order under the CCAA (the
“Filing Date”
), the Borrower acknowledges and agrees the amount owing to Nicollet Enterprise 1 S.à r.l. (the “
Parent
”) pursuant to the Loan Facility Agreement dated as of May 18, 2011, between Borrower and Parent (f/k/a TSS S.à r.l.), as amended on March 28, 2014, on October 30, 2014 and on January 2, 2015 (as so amended, the
“Existing Credit Agreement”
) is CDN $3,068,729,437.67 (together with fees, costs, expenses and other charges now or hereafter payable by the Borrower pursuant thereto), and is subject to the stay of proceedings contained in the Initial Order, but is owing without offset, right of compensation, defence or counterclaim of any nature, kind or description whatsoever. Notwithstanding the foregoing, Borrower and Parent have entered into a Subordination and Postponement Agreement dated as of January 12, 2015 pursuant to which the claims and rights of the Parent under the Existing Credit Agreement may be subordinated to other Proven Claims in the CCAA proceeding, all as more fully set forth therein.
|
USE OF PROCEEDS AND PROJECTED CASH FLOWS
|
The Borrower has provided to the DIP Lender prior to the execution of this Term Sheet the cash flow projections (as the same may be amended from time to time as described below, the “
Cash Flow Projections
”) set out in Schedule A reflecting the projected cash requirements of the Target Canada Group for the 13 week period commencing on the Filing Date calculated on a weekly basis. The expenditures set out in the Cash Flow Projections may not be exceeded without the consent of the DIP Lender other than a cumulative variance in the actual expenditures from the Filing Date forward in an aggregate amount less than 20% which variance has been approved by the Monitor and nonetheless still subject to the Maximum Amount (as defined below),
|
||||
|
Every four weeks, the Borrower will provide the DIP Lender with an updated weekly budget of the following 13 week period in reasonably similar form to the Cash Flow Projections attached as Schedule A hereto (as updated, the “
Updated Cash Flow Projections
”) describing the Borrower’s updated cash flow requirements which shall be prepared by the Borrower in good faith and approved by the Monitor. Updated Cash Flow Projections which have been approved by the Monitor and do not project the DIP Facility exceeding the Maximum Amount then shall be the Cash Flow Projections for the purpose of this Term Sheet.
|
||||
|
Advances under the DIP Facility (“
DIP Advances
”) shall only be used for working capital and general corporate purposes of the Borrower and its subsidiaries while under CCAA protection to pay those expenses contemplated by the Initial Order, any other Restructuring Court Order (as defined below) and in conformance with the Cash Flow Projections (the “
Contemplated Expenses
”).
|
||||
|
All material expenditures by the Borrower shall be consistent with Cash Flow Projections and shall be subject in each case to the overall limit on the availability of DIP Advances imposed by the Maximum Amount.
|
||||
|
Notwithstanding anything to the contrary herein, none of the proceeds of the DIP Advances may be used in connection with (a) any investigation (including discovery proceedings), initiation or prosecution of any claims, causes of action, motions, applications, actions, or other litigation against the DIP Lender, or (b) the initiation or prosecution of any claims, causes of action, motions, applications, actions, or other
|
|
litigation against the DIP Lender in such capacity in respect of this Term Sheet.
|
||||
MAXIMUM AMOUNT
|
The maximum amount (“
Maximum Amount
”) available under the credit facility (the “
DIP Facility
”) will be USD $175,000,000.
|
||||
MATURITY DATE
|
The earlier of (i) the date on which the stay of proceedings pursuant to the Initial Order, as amended from time to time, finally expires without being extended, (ii) the date on which the CCAA proceedings are terminated or (iii) January 15, 2016, or such later date as may be agreed to in writing by the DIP Lender, in its sole discretion (the “
Maturity Date
”).
|
||||
|
The commitment in respect of the DIP Facility shall expire on the Maturity Date and all amounts outstanding under the DIP Facility (the “
Obligations
”) shall be repaid in full on the Maturity Date without the DIP Lender being required to make demand upon the Borrower or to give notice that the DIP Facility has expired and the Obligations are due and payable, subject to the order of the Court.
|
||||
DIP FACILITY
|
The DIP Facility will be a non-revolving term multi-draw credit facility up to the Maximum Amount, and will be available until the Maturity Date, subject to and upon the terms and conditions set out in this Term Sheet and the DIP Credit Documentation. All DIP Advances shall be deposited into the Borrower’s existing bank accounts at Bank of America (the “
Borrower’s Accounts
”) and withdrawn strictly to pay those Contemplated Expenses and otherwise in accordance with the terms hereof and the Initial Order. Each Borrower under the DIP Facility shall be jointly and severally liable for the amounts borrowed by any Borrower and interest thereon.
|
INTEREST RATE
|
The Borrower shall pay the DIP Lender interest (“
Interest
”) on the principal outstanding amount of the DIP Advances and all other Obligations from time to time owing hereunder from the date of each DIP Advance or the date such other Obligation arises, as applicable, both before and after maturity, demand, default, or judgment and until actual payment in full, at the rate of 5% per annum payable on the Maturity Date; provided, however, that upon the occurrence of an Event of Default that is continuing the rate shall automatically become 7% per annum until the Maturity Date.
All payments under or in respect of the DIP Facility shall be made free and clear of any withholding tax unless the Borrower is required to make such withholding under applicable law. If such withholding is required, any payments under the DIP Facility shall be made net of applicable withholding and there shall be no additional amounts payable by the Borrower in respect of withholding tax.
|
||||
|
For the purpose of the
Interest Act
(Canada), the yearly rate of interest applicable to amounts owing under this note will be calculated on the basis of a 365 day year.
|
||||
|
If any provision of this Term Sheet or the DIP Credit Documentation would obligate the Borrower to make any payment of interest or other amount payable to the DIP Lender in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by the DIP Lender of interest at a criminal rate (as construed under the
Criminal Code
(Canada)), then notwithstanding that provision, that amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or result in a receipt by the DIP Lender of interest at a criminal rate.
|
||||
DIP SECURITY
|
All Obligations of the Borrower under or in connection with the DIP Facility and any of the DIP Credit Documentation shall be secured by a Court Ordered Charge on all real and personal property now leased, owned or hereafter acquired by the Borrower (the “
DIP Lender’s Charge
”) without need for any further loan or security documentation or filings in any personal property security registration regime or real property system.
|
|
Any repayment of principal hereunder will not increase or decrease the remaining amount available under the DIP Facility then available under this Term Sheet.
|
||||
ADDITIONAL CONDITIONS PRECEDENT TO DIP FUNDING TO THE BORROWER
|
The DIP Lender’s obligation to make any DIP Advance hereunder is subject to, and conditional upon, all of the following conditions precedent being satisfied at the time each such DIP Advance is to be made:
|
||||
|
1.
|
The Borrower shall have commenced proceedings under the CCAA and an Initial Order in form and substance acceptable to the DIP Lender, acting reasonably, shall have been entered by the Court (as amended from time to time, the “
Initial Order
”) and shall be in full force and effect and shall have not been stayed, reversed, vacated, rescinded, modified or amended in any respect materially adversely affecting the DIP Lender solely in its capacity as DIP Lender, unless otherwise agreed by the DIP Lender, acting reasonably.
|
|||
|
2.
|
There shall not exist any continuing Event of Default or Pending Event of Default as hereinafter defined (including any Event of Default or Pending Event of Default that would result from making the contemplated DIP Advance).
|
|||
|
3.
|
Other than the proceedings contemplated by the Initial Order and regulatory compliance matters, there shall not exist in Canada in respect of the Borrower or any subsidiary any action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental authority which is not stayed by the Initial Order.
|
|||
|
4.
|
Each Restructuring Court Order (defined below) shall be in full force and effect and not have been stayed, reversed, vacated, rescinded, modified or amended in any respect materially adversely affecting the DIP Lender, solely in its capacity as DIP Lender unless otherwise agreed by the DIP Lender, acting reasonably.
|
|
5.
|
The Borrower shall have complied in all material respects with all applicable laws, regulations and policies in relation to its business and the Initial Order, except to the extent stayed or excused under applicable provisions of the CCAA or any Restructuring Court Order (defined below).
|
|||
|
6.
|
There shall be no Liens ranking ahead of the DIP Lender’s Charge, except for the other Court Ordered Charges and Permitted Priority Liens arising by operation of law in the ordinary course of business without any contractual grant of security.
|
|||
AFFIRMATIVE COVENANTS
|
The Borrower covenants and agrees, and agrees to cause each of its subsidiaries, to do the following:
|
||||
|
1.
|
Allow the DIP Lender and its financial advisor(s) (the “
DIP Advisors
”) full access to the books and records of the Target Canada Group on reasonable notice and during normal business hours and cause management thereof to fully co-operate with all reasonable requests of the DIP Advisors.
|
|||
|
2.
|
Provide to the DIP Lender an oral or brief written weekly status update and plan regarding the restructuring process and information which may otherwise be confidential subject to same being maintained as confidential by the DIP Lender and the DIP Advisors, subject to usual exceptions.
|
|||
|
3.
|
Use reasonable efforts to keep the DIP Lender and the DIP Advisors apprised on a timely basis of all material developments with respect to the activities and affairs of the Target Canada Group.
|
|||
|
4.
|
Deliver to the DIP Lender such information as may from time to time be reasonably requested by the DIP Lender or the DIP Advisors (including any information pertaining to non-debtor affiliates and/or subsidiaries of the Target Canada Group), at the reasonable times requested.
|
|
5.
|
Consult with the DIP Lender with respect to the asset sale and disposition process established in the CCAA proceedings (the “
Approved Sale Process
”), and any amendments thereto, and deliver to the DIP Lender draft copies of any court materials in respect of the CCAA Proceeding (including, without limitation, any notices of motion, affidavits, other evidence, and forms of orders) which the Borrower intends to file with the Court for review and comment by the DIP Lender no later than 2 Business Days prior to the date on which the Borrower serves and files such court materials (or as soon as possible in exigent circumstances where it is not reasonably practicable to provide copies 2 Business Days in advance).
|
|||
|
6.
|
Use the proceeds of the DIP Facility only for the purposes of working capital and general corporate purposes of the Borrower consistent with the restrictions set out herein.
|
|||
|
7.
|
Every week (by noon Central time on the 5
th
Business Day for the preceding week) provide to the DIP Lender and DIP Advisors the following:
|
|||
|
|
(i)
|
statement of receipts and disbursements for the past week, showing variances on a weekly and cumulative basis (with reference to the Cash Flow Projections) and, for all material variances (favourable or unfavourable) for any line item, an explanation of such variance;
|
|
|
|
|
(ii)
|
statement of accounts receivable and accounts payable; and
|
|
|
|
|
(iii)
|
asset sales process update report regarding the Approved Sale Process from the Financial Advisor (defined below), senior management and/or the Monitor;
|
|
|
8.
|
Maintain all cash and cash equivalents, and deposit all proceeds of receivables of the Borrower in the Borrower’s Accounts unless otherwise agreed by the DIP Lender.
|
|||
|
9.
|
Comply with the provisions of the Court orders made in the CCAA Proceedings (the “
Restructuring Court Orders
” and each a “
Restructuring Court Order
”).
|
|||
|
10.
|
Forthwith notify the DIP Lender and DIP Advisors of the occurrence of any Event of Default or Pending Event of Default, or of any event or circumstance that may constitute a material adverse change from the Cash Flow Projections.
|
|||
|
11.
|
Duly and punctually pay or cause to be paid to the DIP Lender all principal and interest payable by it under this Term Sheet and under any other DIP Credit Documentation on the dates, at the places and in the amounts and manner set forth herein.
|
|||
|
12.
|
Comply in all material respects with all applicable laws, rules and regulations applicable to their businesses in the CCAA Proceedings, including, without limitation, environmental laws.
|
|||
|
13.
|
Retain Lazard Freres & Co. LLC as financial advisor (the “
Financial Advisor
”), such retention to be ratified by the Court, on terms and conditions acceptable to the Borrower and the DIP Lender acting reasonably, to conduct the Approved Sale Process in the CCAA Proceedings in accordance with a plan approved by the Monitor, the DIP Lender and the Court as it may be amended from time to time in accordance with the terms hereof.
|
|||
|
14.
|
Conclude substantially all “going out of business” sales and disposition of its retail inventory by June 1, 2015 or as may otherwise be agreed by Monitor and DIP Lender.
|
NEGATIVE COVENANTS
|
The Borrower covenants and agrees, and covenants and agrees to cause its subsidiaries, not to do the following other than with the prior written consent of the DIP Lender:
|
||||
|
1.
|
Transfer, lease or otherwise dispose of all or any part of its assets outside the ordinary course of business (but excluding disposition of retail inventory by the Agent through “going out of business sales” or similar sales) except in accordance with the Initial Order and Approved Sale Process without the prior written consent of the DIP Lender. For greater certainty, in the case of any transfer, lease or disposition of any property, assets or undertaking of any of the Borrower or any subsidiaries thereof, all proceeds of such transfer, lease or disposition shall be subject to the provisions herein under “Mandatory Repayments” to the extent applicable and subject to the exceptions contained therein.
|
|||
|
2.
|
Make any payment of principal or interest in respect of existing (pre-Filing Date) indebtedness (other than indebtedness secured by Permitted Priority Liens) or declare or pay any dividends except as contemplated by the Cash Flow Projections and as approved by the Monitor and the DIP Lender or the Court, it being understood that such covenant shall not require consent for critical supplier/service provider payments made in accordance with the Initial Order.
|
|||
|
3.
|
Create or permit to exist indebtedness for borrowed money other than existing (pre-Filing Date) debt and debt contemplated by this DIP Facility.
|
|||
|
4.
|
Enter into or amend any material transaction, agreement, contract, guarantee, or arrangement of any kind or nature outside the ordinary course of business, or make any payments, except for those transactions, agreements, contracts, arrangements or payments which are contemplated by the Cash Flow Projections, effected pursuant to the wind down and liquidation process and approved by the Monitor or approved by the DIP Lender.
|
|||
|
5.
|
Enter into or agree to enter into any investments other than cash equivalents or acquisitions of any kind, direct or indirect, in any business.
|
|
6.
|
Create or permit to exist any Liens on any of its properties or assets other than the Court Ordered Charges and Permitted Priority Liens.
|
|||
|
7.
|
Amalgamate, consolidate with or merge into, or enter into any similar transaction with any other entity other than in accordance with any Plan of Compromise or Arrangement.
|
|||
|
8.
|
Amend its corporate charter or take any action to cause the dissolution of the Borrower entity other than in accordance with any Plan of Compromise or Arrangement.
|
|||
|
9.
|
Seek or obtain any Restructuring Court Order that materially adversely affects the DIP Lender solely in its capacity as DIP Lender except with the prior written consent of the DIP Lender.
|
|||
EVENTS OF DEFAULT
|
The occurrence of any one or more of the following events shall constitute an event of default (“
Event of Default
”) under this Term Sheet
|
||||
|
|
(a)
|
breach by the Borrower in the observance or performance of any material provision, covenant (affirmative or negative) or agreement contained in this Term Sheet or other DIP Credit Documentation and such breach shall continue unremedied for more than 10 Business Days after the Borrower becomes aware of such breach (or such other period as may be mutually agreed); provided, however, that a breach of the reporting requirements under “Affirmative Covenants” Section 7 must be remedied within 3 Business Days after such report was due;
|
|
|
|
(b)
|
(i) any order shall be entered reversing, amending, varying, supplementing, staying, vacating or otherwise modifying in any respect in a manner materially affecting the DIP Lender any Restructuring Court Order without the prior written consent of the DIP Lender, (ii) any Restructuring Court Order shall cease to be in full force and effect in a manner that has a material adverse effect on the interests of the DIP Lender, or (iii) Borrower or any subsidiary shall fail to comply in any material respect that has an adverse affect on the interests of the DIP Lender with any Restructuring Court Order;
|
|
|
|
|
(c)
|
this Term Sheet or any other DIP Credit Documentation shall cease to be effective or shall be contested by the Borrower;
|
|
|
|
|
(d)
|
any Restructuring Court Order is issued by the Court (or any other court of competent jurisdiction) that materially adversely affects the DIP Lender, without the prior written consent of the DIP Lender;
|
|
|
|
|
(e)
|
the CCAA proceedings are terminated or dismissed or converted to a receivership, proposal in bankruptcy or bankruptcy proceeding or any order is granted by the Court (or any court of competent jurisdiction) granting relief from the stay of proceedings in the Initial Order (as extended from time to time until the Maturity Date with the consent of the DIP Lender, which the DIP Lender will consent to provided that no Event of Default has occurred hereunder, the “
Stay of Proceedings
”), unless agreed by the DIP Lender in its sole discretion;
|
|
|
|
|
(f)
|
the Stay of Proceedings expires without being extended;
|
|
|
|
(g)
|
any plan of compromise or arrangement is proposed, filed or sanctioned by the Court in a form and in substance that is not acceptable to the DIP Lender if such plan of compromise or arrangement does not either provide for the repayment of the obligations under the DIP Facility in full by the Maturity Date or designate the DIP Lender as unaffected by such plan;
|
|
|
|
|
(h)
|
any Updated Cash Flow Projections delivered to the DIP Lender reflect a material adverse change to the Borrower or there occurs any negative variance greater than 20% for all expenditures, on a cumulative basis from the Filing Date as compared to the Cash Flow Projections, excluding timing variances;
|
|
|
|
|
(i)
|
the Borrower makes any material payments of any kind not permitted by the Initial Order or the Term Sheet;
|
|
|
|
|
(j)
|
there occurs a material amendment, waiver, modification or alteration to the Approved Sale Process without the prior written consent of the Monitor or approval of the Court;
|
|
|
|
|
(k)
|
if one or more of the Monitor, counsel to the Monitor, counsel to the Borrower, or the Financial Advisor withdraws its services on behalf of the Borrower and/or terminates its engagement with the Borrower in accordance with the provisions of the Initial Order or otherwise, and an alternative professional is not appointed (which, in the case of the Financial Advisor or Monitor, any such alternative professional must be approved by the DIP Lender), or if alternative arrangements are not made acceptable to the DIP Lender, in each case, within 5 Business Days;
|
|
|
|
|
(l)
|
failure of the Borrower to pay principal or interest when due under this Term Sheet or any other DIP Credit Documentation;
|
|
|
|
|
(m)
|
borrowings under the DIP Facility exceed the Maximum Amount.
|
|
REMEDIES
|
Upon the occurrence of an Event of Default, the DIP Lender may, upon three (3) Business Days’ prior written notice to the Borrower and the Monitor, (i) terminate the DIP Facility, (ii) apply to the Court for the appointment of an interim receiver or a receiver and manager of the undertaking, property and assets of the Borrower or for the appointment of a trustee in bankruptcy of the Borrower, (iii) exercise the powers and rights of a secured party under the
Personal Property Security Act
(Ontario) or any legislation of similar effect applicable to the DIP Lender’s Charge, and (iv) exercise all such other rights and remedies under the DIP Credit Documentation and the Restructuring Court Orders.
|
||||
FURTHER ASSURANCES
|
The Borrower shall at its expense, from time to time do, execute and deliver, or will cause to be done, executed and delivered, all such further acts, documents (including, without limitation, certificates, declarations, affidavits, reports and opinions) and things as the DIP Lender may reasonably request for the purpose of giving effect to this Term Sheet and the DIP Lender’s Charge, perfecting, protecting and maintaining the Liens created by the DIP Lender’s Charge or establishing compliance with the representations, warranties and conditions of this Term Sheet or any other DIP Credit Documentation.
|
||||
CURRENCY
|
Unless otherwise specified herein, all references to dollar amounts (without further description) shall mean Canadian Dollars. All payments hereunder shall be made in U.S. Dollars.
|
||||
ENTIRE AGREEMENT
|
This Term Sheet, including the Schedules hereto and the DIP Credit Documentation, constitutes the entire agreement between the parties relating to the subject matter hereof. To the extent that there is any inconsistency between this Term Sheet and any of the other DIP Credit Documentation, this Term Sheet shall govern.
|
||||
AMENDMENTS, WAIVERS, ETC.
|
No waiver or delay on the part of the DIP Lender in exercising any right or privilege hereunder or under any other DIP Credit Documentation will operate as a waiver hereof or thereof unless made in writing and signed by an authorized officer of the DIP Lender. Any consent to be provided by the DIP Lender shall be granted or withheld solely in its capacity as and having regard to its interests as DIP Lender.
|
ASSIGNABILITY
|
The DIP Lender’s rights and obligations under this Term Sheet are fully assignable, to an affiliate of the DIP Lender or with the consent of the Borrower, acting reasonably, before an Event of Default to any other entity and are freely assignable after an Event of Default has occurred and is continuing. The Target Canada Group hereby consents to the disclosure of any confidential information in respect of the Target Canada Group to any potential assignee provided such potential assignee agrees in writing to keep such information confidential.
|
||||
SEVERABILITY
|
Any provision in any DIP Credit Documentation which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
|
||||
COUNTERPARTS AND FACSIMILE SIGNATURES
|
This Term Sheet may be executed in any number of counterparts and by facsimile or e-mail transmission, each of which when executed and delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same instrument. Any party may execute this Term Sheet by signing any counterpart of it.
|
||||
GOVERNING LAW AND JURISDICTION
|
This Term Sheet shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein. The Borrower irrevocably submits to the non-exclusive courts of the Province of Ontario, waives any objections on the ground of venue or forum non conveniens or any similar grounds, and consents to service of process by mail or in any other manner permitted by relevant law.
|
||||
ADDITIONAL DEFINITIONS
|
Capitalized terms not otherwise defined herein shall have the following meanings:
|
|
|
“
Agent
” means the party that shall liquidate the inventory and furniture, fixtures and equipment of the Borrower and its subsidiaries during the CCAA proceedings pursuant to an agency agreement to be approved by the Court.
“
Business Day
” means each day other than a Saturday or Sunday or a statutory or civic holiday that banks are open for business in both Toronto, Ontario, Canada and Minneapolis, Minnesota, United States.
“
Court Ordered Charges
” means charges granted by the Court over the assets, properties and undertakings of the Borrower pursuant to the Initial Order and any other Restructuring Court Order, which shall include, without limitation, an administration charge, DIP Lender's Charge, directors' charge, Agent’s charge and key employee retention plan charge.
|
|||
|
|
“
DIP Credit Documentation
” means this Term Sheet, the Order of the Court approving it and any other definitive documentation in respect of the DIP Facility that are in form and substance satisfactory to the DIP Lender.
|
|||
|
|
“
Filing Date
” means the date upon which the Borrower obtains the Initial Order under the CCAA.
|
|||
|
|
“
Liens
” means all mortgages, pledges, charges, encumbrances, hypothecs, liens and security interests of any kind or nature whatsoever.
|
|||
|
|
“
Pending Event of Default
” means an event that, but for the requirement for the giving of notice, lapse of time, or both, would constitute an Event of Default.
|
|||
|
|
“Permitted Priority Liens”
means: (i) specific purchase-money security interests or capital leases; (ii) statutory superpriority deemed trusts and liens for unpaid employee source deductions; (iii) liens for unpaid municipal property taxes or utilities that are given first priority over other liens by statute; and (iv) such other permitted liens as may be agreed to in writing by the DIP Lender.
|
|||
|
|
“
Target Canada Group”
means the Borrower and its direct and indirect subsidiaries.
|
|
|
TARGET CANADA CO.
, as Borrower
|
|
By:
|
/s/ Aaron E. Alt
|
||
|
Name: Aaron E. Alt
|
||
|
Title: Chief Executive Officer, President and Treasurer
|
|
|
TARGET CORPORATION
, as DIP Lender
|
|
By:
|
/s/ Sara J. Ross
|
||
|
Name: Sara J. Ross
|
||
|
Title:
Assistant Treasurer
|
|
|
TARGET CANADA HEALTH CO.
, as Borrower
|
|
By:
|
/s/ Mark J. Wong
|
||
|
Name: Mark J. Wong
|
||
|
Title:
Vice President and Secretary
|
|
|
TARGET CANADA MOBILE GP CO.
, as Borrower
|
|
By:
|
/s/ Mark J. Wong
|
||
|
Name: Mark J. Wong
|
||
|
Title:
President and Secretary
|
|
|
TARGET CANADA PHARMACY (BC) CORP.
, as Borrower
|
|
By:
|
/s/ Mark J. Wong
|
||
|
Name: Mark J. Wong
|
||
|
Title:
Vice President and Secretary
|
|
|
TARGET CANADA PHARMACY (ONTARIO) CORP.
, as Borrower
|
|
By:
|
/s/ Mark J. Wong
|
||
|
Name: Mark J. Wong
|
||
|
Title:
Vice President and Secretary
|
|
|
TARGET CANADA PHARMACY CORP.
, as Borrower
|
|
By:
|
/s/ Mark J. Wong
|
||
|
Name: Mark J. Wong
|
||
|
Title:
Vice President and Secretary
|
|
|
TARGET CANADA PHARMACY (SK)
CORP. , as Borrower |
|
By:
|
/s/ Mark J. Wong
|
||
|
Name:
Mark J. Wong
|
||
|
Title:
Vice President and Secretary
|
|
|
TARGET CANADA PHARMACY FRANCHISING LP
, as Borrower
by its general partner,
TARGET CANADA HEALTH CO.
|
|
By:
|
/s/ Mark J. Wong
|
||
|
Name:
Mark J. Wong
|
||
|
Title:
Vice President and Secretary
|
|
|
TARGET CANADA MOBILE LP
, as Borrower
by its general partner,
TARGET CANADA MOBILE GP CO.
|
|
By:
|
/s/ Mark J. Wong
|
||
|
Name:
Mark J. Wong
|
||
|
Title:
Vice President and Secretary
|
Ratio of Earnings to Fixed Charges
|
|
Fiscal Year Ended
|
|||||||||
(dollars in millions)
|
|
January 31, 2015
|
|
February 1, 2014
|
|
February 2, 2013
|
|
January 28, 2012
|
|
January 29, 2011
|
|
Earnings from continuing operations before income taxes
|
|
$3,653
|
$4,121
|
$5,056
|
$4,621
|
$4,495
|
|||||
Capitalized interest, net
|
|
(1
|
)
|
(14
|
)
|
(12
|
)
|
6
|
|
2
|
|
Adjusted earnings from continuing operations before income taxes
|
|
3,652
|
|
4,107
|
|
5,044
|
|
4,627
|
|
4,497
|
|
Fixed charges:
|
|
|
|
|
|
|
|||||
Interest expense
(a)
|
|
619
|
|
641
|
|
721
|
|
750
|
|
776
|
|
Interest portion of rental expense
|
|
108
|
|
108
|
|
106
|
|
110
|
|
110
|
|
Total fixed charges
|
|
727
|
|
749
|
|
827
|
|
860
|
|
886
|
|
Earnings from continuing operations before income taxes and fixed charges
(b)
|
|
$4,379
|
$4,856
|
$5,871
|
$5,487
|
$5,383
|
|||||
Ratio of earnings to fixed charges
|
|
6.02
|
|
6.48
|
|
7.10
|
|
6.38
|
|
6.08
|
|
(a)
|
Includes interest on debt and capital leases (including capitalized interest) and amortization of debt issuance costs. Excludes interest income, the loss on early retirement of debt and interest associated with uncertain tax positions, which is recorded within income tax expense.
|
|
/s/ Roxanne S. Austin
|
|
Roxanne S. Austin
|
|
/s/ Douglas M. Baker, Jr.
|
|
Douglas M. Baker, Jr.
|
|
/s/ Brian C. Cornell
|
|
Brian C. Cornell
|
|
/s/ Calvin Darden
|
|
Calvin Darden
|
|
/s/ Henrique De Castro
|
|
Henrique De Castro
|
|
/s/ James A. Johnson
|
|
James A. Johnson
|
|
/s/ Mary E. Minnick
|
|
Mary E. Minnick
|
|
/s/ Anne M. Mulcahy
|
|
Anne M. Mulcahy
|
|
/s/ Derica W. Rice
|
|
Derica W. Rice
|
|
/s/ Kenneth L. Salazar
|
|
Kenneth L. Salazar
|
|
/s/ John G. Stumpf
|
|
John G. Stumpf
|
1.
|
I have reviewed this Annual Report on Form 10-K of Target Corporation;
|
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
|
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: March 13, 2015
|
|
/s/ Brian C. Cornell
|
Brian C. Cornell
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Target Corporation;
|
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
|
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: March 13, 2015
|
|
/s/ John J. Mulligan
|
John J. Mulligan
|
Executive Vice President and Chief Financial Officer
|
Date: March 13, 2015
|
|
/s/ Brian C. Cornell
|
Brian C. Cornell
|
Chairman and Chief Executive Officer
|
Date: March 13, 2015
|
|
/s/ John J. Mulligan
|
John J. Mulligan
|
Executive Vice President and Chief Financial Officer
|