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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 30, 2016
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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 25, 2016 are incorporated into Part III.
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U.S. Stores at
January 30, 2016
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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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46
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6,136
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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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272
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35,674
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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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122
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17,137
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Ohio
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61
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7,659
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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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6
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971
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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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90
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12,307
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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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31
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4,174
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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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20
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2,835
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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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13
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1,551
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Texas
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148
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20,822
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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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39
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4,952
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Virginia
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58
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7,671
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Massachusetts
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39
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5,171
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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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55
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6,603
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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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10,634
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Wisconsin
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37
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4,560
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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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1,792
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239,539
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U.S. Stores and Distribution Centers at January 30, 2016
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Stores
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Distribution
Centers
(a)
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Owned
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1,537
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33
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Leased
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103
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7
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Owned buildings on leased land
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152
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—
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Total
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1,792
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40
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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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55
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Casey L. Carl
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Executive Vice President and 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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40
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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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57
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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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48
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Stephanie A. Lundquist
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Executive Vice President and Chief Human Resources Officer since February 2016. Senior Vice President, Human Resources from January 2015 to February 2016. Senior Vice President, Stores and Distribution Human Resources from February 2014 to January 2015. From March 2011 to January 2014 Ms. Lundquist held several leadership positions with Target Canada.
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40
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Michael E. McNamara
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Executive Vice President and Chief Information Officer since June 2015. Chief Information Officer of Tesco PLC, a multinational grocery and general merchandise retailer, from March 2011 to May 2015.
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51
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John J. Mulligan
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Executive Vice President and Chief Operating Officer since September 2015. Executive Vice President and Chief Financial Officer from April 2012 to August 2015. Senior Vice President, Treasury, Accounting and Operations from February 2010 to March 2012.
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50
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Janna A. Potts
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Executive Vice President and Chief Stores Officer since January 2016. Senior Vice President, Stores and Supply Chain Human Resources from February 2015 to January 2016. Senior Vice President, Target Canada Stores and Distribution from March 2014 to January 2015. Senior Vice President, Store Operations from August 2009 to March 2014.
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48
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Jacqueline Hourigan Rice
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Executive Vice President and 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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44
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Catherine R. Smith
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Executive Vice President and Chief Financial Officer since September 2015. Executive Vice President and Chief Financial Officer of Express Scripts Holding Company, a pharmacy benefit manager, from February 2014 to December 2014. Executive Vice President of Strategy and Chief Financial Officer for Walmart International, a division of Wal-mart Stores Inc., a discount retailer, from March 2010 to January 2014.
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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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48
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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)
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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 1, 2015 through November 28, 2015
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Open market and privately negotiated purchases
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4,291,434
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$
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74.57
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4,291,434
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$
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4,360,899,740
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November 29, 2015 through January 2, 2016
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Open market and privately negotiated purchases
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7,442,198
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72.59
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7,430,138
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3,821,513,044
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January 3, 2016 through January 30, 2016
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Open market and privately negotiated purchases
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5,600,350
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71.42
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5,600,350
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3,421,513,081
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Total
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17,333,982
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$
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72.70
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17,321,922
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$
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3,421,513,081
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(a)
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The table above includes shares reacquired upon the noncash settlement of prepaid forward contracts. At January 30, 2016, we held asset positions in prepaid forward contracts for 0.4 million shares of our common stock, for a total cash investment of $18.2 million, or an average per share price of $41.13. During the fourth quarter, no shares were reacquired under such contracts. Refer to Note
27
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 30, 2016, 12,060 shares were reacquired at an weighted average per share price of $71.71 pursuant to our long-term incentive plan.
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Fiscal Years Ended
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|||||||||||||||||
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January 29,
2011 |
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January 28,
2012 |
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February 2,
2013 |
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February 1,
2014 |
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January 31,
2015 |
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January 30,
2016 |
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Target
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$
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100.00
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$
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94.08
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$
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117.57
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$
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111.51
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$
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149.56
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$
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151.35
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S&P 500 Index
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100.00
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105.33
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123.87
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149.02
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170.22
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169.09
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Peer Group
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100.00
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111.14
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141.62
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171.29
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212.31
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231.19
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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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2015
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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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|
||||||
Sales
(b)
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$
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73,785
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|
$
|
72,618
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$
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71,279
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$
|
73,301
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$
|
69,865
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$
|
67,390
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Net Earnings
/
(Loss)
|
|
|
|
|
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||||||||||||
Continuing operations
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3,321
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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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||||||
Discontinued operations
|
42
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|
(4,085
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)
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(723
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)
|
(316
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)
|
(120
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)
|
—
|
|
||||||
Net earnings /
(loss)
|
3,363
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|
(1,636
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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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||||||
Basic Earnings
/
(Loss) Per Share
|
|
|
|
|
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||||||||||||
Continuing operations
|
5.29
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|
3.86
|
|
4.24
|
|
5.05
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|
4.49
|
|
4.03
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|
||||||
Discontinued operations
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0.07
|
|
(6.44
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)
|
(1.14
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)
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(0.48
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)
|
(0.18
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)
|
—
|
|
||||||
Basic earnings /
(loss) per share
|
5.35
|
|
(2.58
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)
|
3.10
|
|
4.57
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|
4.31
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|
4.03
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||||||
Diluted Earnings
/
(Loss) Per Share
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
5.25
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|
3.83
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|
4.20
|
|
5.00
|
|
4.46
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|
4.00
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||||||
Discontinued operations
|
0.07
|
|
(6.38
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)
|
(1.13
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)
|
(0.48
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)
|
(0.18
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)
|
—
|
|
||||||
Diluted earnings /
(loss) per share
|
5.31
|
|
(2.56
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)
|
3.07
|
|
4.52
|
|
4.28
|
|
4.00
|
|
||||||
Cash dividends declared per share
|
2.20
|
|
1.99
|
|
1.65
|
|
1.38
|
|
1.15
|
|
0.92
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Total assets
(c)
|
40,262
|
|
41,172
|
|
44,325
|
|
47,878
|
|
46,260
|
|
43,240
|
|
||||||
Long-term debt, including current portion
|
12,760
|
|
12,725
|
|
12,494
|
|
16,260
|
|
16,127
|
|
15,638
|
|
(a)
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Consisted of 53 weeks.
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(b)
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For 2012 and prior, includes sales generated by our retail operations and credit card revenues.
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(c)
|
Prior year balances have been revised to reflect the impact of adopting ASU No. 2015-03,
Simplifying the Presentation of Debt Issuance Costs
and ASU No. 2015-17,
Balance Sheet Classification of Deferred Taxes
, described further in Notes 20 and 23 to the Financial Statements, respectively.
|
•
|
GAAP earnings per share were
$5.31
, including
$0.07
related to discontinued operations.
|
•
|
Adjusted earnings per share from continuing operations were
$4.69
.
|
•
|
Comparable sales grew
2.1
percent. Digital channel sales growth of more than 30 percent contributed 0.8 percentage points to 2015 comparable sales growth.
|
•
|
We sold our pharmacy and clinic businesses to CVS, recognizing a pretax gain of $620 million.
|
•
|
We paid dividends of
$1,362 million
in 2015, an increase of
13.0
percent above 2014.
|
•
|
We returned cash through share repurchase for the first time since second quarter 2013, with purchases of
$3,441 million
of common stock at an average price of
$77.07
per share.
|
Earnings Per Share From
Continuing Operations
|
|
|
|
Percent Change
|
|||||||||
2015
|
|
2014
|
|
2013
|
|
2015/2014
|
|
2014/2013
|
|
||||
GAAP diluted earnings per share
|
$
|
5.25
|
|
$
|
3.83
|
|
$
|
4.20
|
|
37.2
|
%
|
(8.8
|
)%
|
Adjustments
|
(0.56
|
)
|
0.39
|
|
0.09
|
|
|
|
|
|
|||
Adjusted diluted earnings per share
|
$
|
4.69
|
|
$
|
4.22
|
|
$
|
4.29
|
|
11.3
|
%
|
(1.7
|
)%
|
|
|
|
|
Percent Change
|
|||||||||
(dollars in millions)
|
2015
|
|
2014
|
|
2013
|
|
2015/2014
|
|
2014/2013
|
|
|||
Sales
|
$
|
73,785
|
|
$
|
72,618
|
|
$
|
71,279
|
|
1.6
|
%
|
1.9
|
%
|
Cost of sales
|
51,997
|
|
51,278
|
|
50,039
|
|
1.4
|
|
2.5
|
|
|||
Gross margin
|
21,788
|
|
21,340
|
|
21,240
|
|
2.1
|
|
0.5
|
|
|||
SG&A expenses
(a)
|
14,448
|
|
14,503
|
|
14,383
|
|
(0.4
|
)
|
0.8
|
|
|||
EBITDA
|
7,340
|
|
6,837
|
|
6,857
|
|
7.4
|
|
(0.3
|
)
|
|||
Depreciation and amortization
|
2,213
|
|
2,129
|
|
1,996
|
|
3.9
|
|
6.7
|
|
|||
EBIT
|
$
|
5,127
|
|
$
|
4,708
|
|
$
|
4,861
|
|
8.9
|
%
|
(3.1
|
)%
|
(a)
|
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 2015, 2014, and 2013, SG&A also includes $641 million, $629 million, and $555 million, respectively, of net profit-sharing income from the arrangement with TD.
|
Rate Analysis
|
2015
|
|
2014
|
|
2013
|
|
Gross margin rate
|
29.5
|
%
|
29.4
|
%
|
29.8
|
%
|
SG&A expense rate
|
19.6
|
|
20.0
|
|
20.2
|
|
EBITDA margin rate
|
9.9
|
|
9.4
|
|
9.6
|
|
Depreciation and amortization expense rate
|
3.0
|
|
2.9
|
|
2.8
|
|
EBIT margin rate
|
6.9
|
|
6.5
|
|
6.8
|
|
Comparable Sales
|
2015
|
|
2014
|
|
2013
|
|
Comparable sales change
|
2.1
|
%
|
1.3
|
%
|
(0.4
|
)%
|
Drivers of change in comparable sales:
|
|
|
|
|||
Number of transactions
|
1.3
|
|
(0.2
|
)
|
(2.7
|
)
|
Average transaction amount
|
0.8
|
|
1.5
|
|
2.3
|
|
Selling price per unit
|
3.3
|
|
3.2
|
|
1.6
|
|
Units per transaction
|
(2.4
|
)
|
(1.6
|
)
|
0.7
|
|
Contribution to Comparable Sales Change
|
2015
|
|
2014
|
|
2013
|
|
Stores channel comparable sales change
|
1.3
|
%
|
0.7
|
%
|
(0.7
|
)%
|
Digital channel contribution to comparable sales change
|
0.8
|
|
0.7
|
|
0.3
|
|
Total comparable sales change
|
2.1
|
%
|
1.3
|
%
|
(0.4
|
)%
|
Sales by Product Category
|
Percentage of Sales
|
|||||
|
2015
|
|
2014
|
|
2013
|
|
Household essentials
(a)
|
26
|
%
|
25
|
%
|
25
|
%
|
Hardlines
(b)
|
17
|
|
18
|
|
18
|
|
Apparel and accessories
(c)
|
19
|
|
19
|
|
19
|
|
Food and pet supplies
(d)
|
21
|
|
21
|
|
21
|
|
Home furnishings and décor
(e)
|
17
|
|
17
|
|
17
|
|
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
(a)
|
Includes pharmacy, beauty, personal care, baby care, cleaning, and paper products. Pharmacy represented 5 percent, 6 percent, and 6 percent in 2015, 2014, and 2013, respectively.
|
(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
|
2015
|
|
2014
|
|
Beginning store count
|
1,790
|
|
1,793
|
|
Opened
|
15
|
|
16
|
|
Closed
|
(13
|
)
|
(19
|
)
|
Relocated
|
—
|
|
—
|
|
Ending store count
|
1,792
|
|
1,790
|
|
Number of stores remodeled during the year
|
9
|
|
39
|
|
Number of Stores and
Retail Square Feet |
Number of Stores
|
|
Retail Square Feet
(a)
|
||||||
January 30, 2016
|
|
January 31, 2015
|
|
|
January 30, 2016
|
|
January 31, 2015
|
|
|
170,000 or more sq. ft.
|
278
|
|
280
|
|
|
49,688
|
|
50,037
|
|
50,000 to 169,999 sq. ft.
|
1,505
|
|
1,509
|
|
|
189,677
|
|
189,905
|
|
0 to 49,999 sq. ft.
|
9
|
|
1
|
|
|
174
|
|
21
|
|
Total
|
1,792
|
|
1,790
|
|
|
239,539
|
|
239,963
|
|
(a)
|
In thousands, reflects total square feet less office, distribution center and vacant space.
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||||||||
(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
|
|
|
|
|
|
$
|
5.25
|
|
|
|
|
|
|
$
|
3.83
|
|
|
|
|
|
|
$
|
4.20
|
|
||||||||||||
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gain on sale
(a)
|
|
$
|
(620
|
)
|
|
$
|
(487
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(391
|
)
|
|
$
|
(247
|
)
|
|
$
|
(0.38
|
)
|
Restructuring costs
(b)
|
|
138
|
|
|
87
|
|
|
0.14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
285
|
|
|
173
|
|
|
0.27
|
|
|
445
|
|
|
270
|
|
|
0.42
|
|
|||||||||
Data breach-related costs, net of insurance
(c)
|
|
39
|
|
|
28
|
|
|
0.04
|
|
|
145
|
|
|
94
|
|
|
0.15
|
|
|
17
|
|
|
11
|
|
|
0.02
|
|
|||||||||
Other
(d)
|
|
39
|
|
|
29
|
|
|
0.05
|
|
|
29
|
|
|
18
|
|
|
0.03
|
|
|
64
|
|
|
40
|
|
|
0.06
|
|
|||||||||
Resolution of income tax matters
|
|
—
|
|
|
(8
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
(35
|
)
|
|
(0.06
|
)
|
|
—
|
|
|
(16
|
)
|
|
(0.03
|
)
|
|||||||||
Adjusted diluted earnings per share from continuing operations
|
|
|
|
|
|
$
|
4.69
|
|
|
|
|
|
|
$
|
4.22
|
|
|
|
|
|
|
$
|
4.29
|
|
(a)
|
For 2015, includes the gain on the pharmacies and clinics transaction. Refer to Note
6
of the Financial Statements for more information. For 2013, includes the gain on receivables transaction. Refer to Note
9
of the Financial Statements for more information.
|
(b)
|
Refer to Note
8
of the Financial Statements.
|
(c)
|
Refer to Note
19
of the Financial Statements.
|
(d)
|
For 2015, represents impairments related to our decision to wind down certain noncore operations. Refer to Note
16
of the Financial Statements for more information. 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.
|
After-Tax Return on Invested Capital
|
|
|
||||||||||
|
|
|
|
|
||||||||
Numerator
|
|
Trailing Twelve Months
|
|
|
||||||||
(dollars in millions)
|
|
January 30,
2016 |
|
|
January 31,
2015 |
|
|
|
||||
Earnings from continuing operations before interest expense and income taxes
|
|
$
|
5,530
|
|
|
$
|
4,535
|
|
|
|
||
+ Operating lease interest
(a)(b)
|
|
87
|
|
|
89
|
|
|
|
||||
Adjusted earnings from continuing operations before interest expense and income taxes
|
|
5,617
|
|
|
4,624
|
|
|
|
||||
- Income taxes
(c)
|
|
1,827
|
|
|
1,524
|
|
|
|
||||
Net operating profit after taxes
|
|
$
|
3,790
|
|
|
$
|
3,100
|
|
|
|
Denominator
(dollars in millions)
|
|
January 30,
2016 |
|
|
January 31,
2015 |
|
|
February 1,
2014 |
|
|||
Current portion of long-term debt and other borrowings
|
|
$
|
815
|
|
|
$
|
91
|
|
|
$
|
1,143
|
|
+ Noncurrent portion of long-term debt
|
|
11,945
|
|
|
12,634
|
|
|
11,351
|
|
|||
+ Shareholders' equity
|
|
12,957
|
|
|
13,997
|
|
|
16,231
|
|
|||
+ Capitalized operating lease obligations
(b)(d)
|
|
1,457
|
|
|
1,490
|
|
|
1,635
|
|
|||
- Cash and cash equivalents
|
|
4,046
|
|
|
2,210
|
|
|
670
|
|
|||
- Net assets of discontinued operations
|
|
226
|
|
|
1,479
|
|
|
4,270
|
|
|||
Invested capital
|
|
$
|
22,902
|
|
|
$
|
24,523
|
|
|
$
|
25,420
|
|
Average invested capital
(e)
|
|
$
|
23,713
|
|
|
$
|
24,971
|
|
|
|
After-tax return on invested capital
|
|
16.0
|
%
|
(f)
|
12.4
|
%
|
|
|
Reconciliation of Capitalized Operating Leases
|
|
Trailing Twelve Months
|
||||||||||||
(dollars in millions)
|
|
January 30,
2016 |
|
|
January 31,
2015 |
|
|
February 1,
2014 |
|
|||||
Total rent expense
|
|
$
|
182
|
|
|
$
|
186
|
|
|
$
|
204
|
|
||
Capitalized operating lease obligations (total rent expense x 8)
|
|
1,457
|
|
|
1,490
|
|
|
1,635
|
|
|||||
Operating lease interest (capitalized operating lease obligations x 6%)
|
|
87
|
|
|
89
|
|
|
n/a
|
|
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)
|
2015
|
|
2014
|
|
2013
|
|
|||
Maximum daily amount outstanding during the year
|
$
|
—
|
|
$
|
590
|
|
$
|
1,465
|
|
Average amount outstanding during the year
|
—
|
|
129
|
|
408
|
|
|||
Amount outstanding at year-end
|
—
|
|
—
|
|
80
|
|
|||
Weighted average interest rate
|
—
|
%
|
0.11
|
%
|
0.13
|
%
|
Capital Expenditures
|
2015
|
|
2014
|
|
2013
|
||||||
(millions)
|
|
|
|||||||||
Information technology, distribution and other
|
$
|
1,289
|
|
|
$
|
1,306
|
|
|
$
|
1,069
|
|
New stores
|
115
|
|
|
381
|
|
|
536
|
|
|||
Store remodels and expansions
|
34
|
|
|
99
|
|
|
281
|
|
|||
Total
|
$
|
1,438
|
|
|
$
|
1,786
|
|
|
$
|
1,886
|
|
Contractual Obligations as of
|
Payments Due by Period
|
||||||||||||||
January 30, 2016
|
|
Less than
|
|
1-3
|
|
3-5
|
|
After 5
|
|
||||||
(millions)
|
Total
|
|
1 Year
|
|
Years
|
|
Years
|
|
Years
|
|
|||||
Recorded contractual obligations:
|
|
|
|
|
|
||||||||||
Long-term debt
(a)
|
$
|
11,955
|
|
$
|
751
|
|
$
|
2,453
|
|
$
|
2,095
|
|
$
|
6,656
|
|
Capital lease obligations
(b)
|
1,690
|
|
130
|
|
144
|
|
139
|
|
1,277
|
|
|||||
Deferred compensation
(c)
|
499
|
|
57
|
|
118
|
|
125
|
|
199
|
|
|||||
Real estate liabilities
(d)
|
52
|
|
52
|
|
—
|
|
—
|
|
—
|
|
|||||
Tax contingencies
(e)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Loss contingencies
(f)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Unrecorded contractual obligations:
|
|
|
|
|
|
||||||||||
Interest payments – long-term debt
|
6,717
|
|
569
|
|
936
|
|
753
|
|
4,459
|
|
|||||
Operating leases
(b)
|
3,713
|
|
186
|
|
361
|
|
324
|
|
2,842
|
|
|||||
Purchase obligations
(g)
|
1,950
|
|
605
|
|
801
|
|
379
|
|
165
|
|
|||||
Real estate obligations
(h)
|
227
|
|
192
|
|
35
|
|
—
|
|
—
|
|
|||||
Future contributions to retirement plans
(i)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Contractual obligations
|
$
|
26,803
|
|
$
|
2,542
|
|
$
|
4,848
|
|
$
|
3,815
|
|
$
|
15,598
|
|
(a)
|
Represents principal payments only. See Note
20
of the Financial Statements for further information.
|
(b)
|
These payments also include $311 million and $90 million of legally binding minimum lease payments for stores that are expected to open in 2016 or later for capital and operating leases, respectively. Capital lease obligations include interest. See Note
22
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 $215 million, including interest and penalties and primarily related to continuing operations, 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
23
of the Financial Statements for further information.
|
(f)
|
Estimated loss contingencies, including those related to the Canada Exit and the 2013 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
7
and Note
19
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 plans in the contractual obligations table above because no additional amounts are required to be funded as of
January 30, 2016
. 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 11, 2016
|
|
Catherine R. Smith
Executive Vice President and
Chief Financial Officer
|
Minneapolis, Minnesota
March 11, 2016
|
|
|
|
|
Brian C. Cornell
Chairman and Chief Executive Officer
March 11, 2016 |
|
Catherine R. Smith
Executive Vice President and
Chief Financial Officer
|
Minneapolis, Minnesota March 11, 2016 |
|
(millions, except per share data)
|
2015
|
|
2014
|
|
2013
|
|
|||
Sales
|
$
|
73,785
|
|
$
|
72,618
|
|
$
|
71,279
|
|
Cost of sales
|
51,997
|
|
51,278
|
|
50,039
|
|
|||
Gross margin
|
21,788
|
|
21,340
|
|
21,240
|
|
|||
Selling, general and administrative expenses
|
14,665
|
|
14,676
|
|
14,465
|
|
|||
Depreciation and amortization
|
2,213
|
|
2,129
|
|
1,996
|
|
|||
Gain on sale
|
(620
|
)
|
—
|
|
(391
|
)
|
|||
Earnings from continuing operations before interest expense and income taxes
|
5,530
|
|
4,535
|
|
5,170
|
|
|||
Net interest expense
|
607
|
|
882
|
|
1,049
|
|
|||
Earnings from continuing operations before income taxes
|
4,923
|
|
3,653
|
|
4,121
|
|
|||
Provision for income taxes
|
1,602
|
|
1,204
|
|
1,427
|
|
|||
Net earnings from continuing operations
|
3,321
|
|
2,449
|
|
2,694
|
|
|||
Discontinued operations, net of tax
|
42
|
|
(4,085
|
)
|
(723
|
)
|
|||
Net earnings
/
(loss)
|
$
|
3,363
|
|
$
|
(1,636
|
)
|
$
|
1,971
|
|
Basic earnings
/
(loss) per share
|
|
|
|
||||||
Continuing operations
|
$
|
5.29
|
|
$
|
3.86
|
|
$
|
4.24
|
|
Discontinued operations
|
0.07
|
|
(6.44
|
)
|
(1.14
|
)
|
|||
Net earnings
/
(loss) per share
|
$
|
5.35
|
|
$
|
(2.58
|
)
|
$
|
3.10
|
|
Diluted earnings
/
(loss) per share
|
|
|
|
||||||
Continuing operations
|
$
|
5.25
|
|
$
|
3.83
|
|
$
|
4.20
|
|
Discontinued operations
|
0.07
|
|
(6.38
|
)
|
(1.13
|
)
|
|||
Net earnings
/
(loss) per share
|
$
|
5.31
|
|
$
|
(2.56
|
)
|
$
|
3.07
|
|
Weighted average common shares outstanding
|
|
|
|
||||||
Basic
|
627.7
|
|
634.7
|
|
635.1
|
|
|||
Dilutive effect of share-based awards
|
5.2
|
|
5.4
|
|
6.7
|
|
|||
Diluted
|
632.9
|
|
640.1
|
|
641.8
|
|
|||
Antidilutive shares
|
—
|
|
3.3
|
|
2.3
|
|
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Net income
/
(loss)
|
$
|
3,363
|
|
$
|
(1,636
|
)
|
$
|
1,971
|
|
Other comprehensive income
/
(loss), net of tax
|
|
|
|
||||||
Pension and other benefit liabilities, net of (benefit)
/
provision for taxes of $(18), $(90), and $71
|
(27
|
)
|
(139
|
)
|
110
|
|
|||
Currency translation adjustment and cash flow hedges, net of provision for taxes of $2, $2, and $11
|
(3
|
)
|
431
|
|
(425
|
)
|
|||
Other comprehensive income
/
(loss)
|
(30
|
)
|
292
|
|
(315
|
)
|
|||
Comprehensive (loss)
/
income
|
$
|
3,333
|
|
$
|
(1,344
|
)
|
$
|
1,656
|
|
(millions, except footnotes)
|
January 30,
2016 |
|
January 31,
2015 |
|
||
Assets
|
|
|
||||
Cash and cash equivalents, including short-term investments of $3,008 and $1,520
|
$
|
4,046
|
|
$
|
2,210
|
|
Inventory
|
8,601
|
|
8,282
|
|
||
Assets of discontinued operations
|
322
|
|
1,058
|
|
||
Other current assets
|
1,161
|
|
2,074
|
|
||
Total current assets
|
14,130
|
|
13,624
|
|
||
Property and equipment
|
|
|
||||
Land
|
6,125
|
|
6,127
|
|
||
Buildings and improvements
|
27,059
|
|
26,613
|
|
||
Fixtures and equipment
|
5,347
|
|
5,329
|
|
||
Computer hardware and software
|
2,617
|
|
2,552
|
|
||
Construction-in-progress
|
315
|
|
424
|
|
||
Accumulated depreciation
|
(16,246
|
)
|
(15,093
|
)
|
||
Property and equipment, net
|
25,217
|
|
25,952
|
|
||
Noncurrent assets of discontinued operations
|
75
|
|
717
|
|
||
Other noncurrent assets
|
840
|
|
879
|
|
||
Total assets
|
$
|
40,262
|
|
$
|
41,172
|
|
Liabilities and shareholders' investment
|
|
|
||||
Accounts payable
|
$
|
7,418
|
|
$
|
7,759
|
|
Accrued and other current liabilities
|
4,236
|
|
3,783
|
|
||
Current portion of long-term debt and other borrowings
|
815
|
|
91
|
|
||
Liabilities of discontinued operations
|
153
|
|
103
|
|
||
Total current liabilities
|
12,622
|
|
11,736
|
|
||
Long-term debt and other borrowings
|
11,945
|
|
12,634
|
|
||
Deferred income taxes
|
823
|
|
1,160
|
|
||
Noncurrent liabilities of discontinued operations
|
18
|
|
193
|
|
||
Other noncurrent liabilities
|
1,897
|
|
1,452
|
|
||
Total noncurrent liabilities
|
14,683
|
|
15,439
|
|
||
Shareholders' investment
|
|
|
||||
Common stock
|
50
|
|
53
|
|
||
Additional paid-in capital
|
5,348
|
|
4,899
|
|
||
Retained earnings
|
8,188
|
|
9,644
|
|
||
Accumulated other comprehensive loss
|
|
|
||||
Pension and other benefit liabilities
|
(588
|
)
|
(561
|
)
|
||
Currency translation adjustment and cash flow hedges
|
(41
|
)
|
(38
|
)
|
||
Total shareholders' investment
|
12,957
|
|
13,997
|
|
||
Total liabilities and shareholders' investment
|
$
|
40,262
|
|
$
|
41,172
|
|
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Operating activities
|
|
|
|
||||||
Net earnings
/
(loss)
|
$
|
3,363
|
|
$
|
(1,636
|
)
|
$
|
1,971
|
|
Earnings
/
(losses) from discontinued operations, net of tax
|
42
|
|
(4,085
|
)
|
(723
|
)
|
|||
Net earnings from continuing operations
|
3,321
|
|
2,449
|
|
2,694
|
|
|||
Adjustments to reconcile net earnings to cash provided by operations:
|
|
|
|
||||||
Depreciation and amortization
|
2,213
|
|
2,129
|
|
1,996
|
|
|||
Share-based compensation expense
|
115
|
|
71
|
|
106
|
|
|||
Deferred income taxes
|
(322
|
)
|
7
|
|
58
|
|
|||
Gain on sale
|
(620
|
)
|
—
|
|
(391
|
)
|
|||
Loss on debt extinguishment
|
—
|
|
285
|
|
445
|
|
|||
Noncash (gains)
/
losses and other, net
|
(12
|
)
|
40
|
|
87
|
|
|||
Changes in operating accounts:
|
|
|
|
||||||
Accounts receivable originated at Target
|
—
|
|
—
|
|
157
|
|
|||
Proceeds on sale of accounts receivable originated at Target
|
—
|
|
—
|
|
2,703
|
|
|||
Inventory
|
(316
|
)
|
(512
|
)
|
(504
|
)
|
|||
Other assets
|
227
|
|
(115
|
)
|
(79
|
)
|
|||
Accounts payable and accrued liabilities
|
534
|
|
777
|
|
247
|
|
|||
Cash provided by operating activities—continuing operations
|
5,140
|
|
5,131
|
|
7,519
|
|
|||
Cash provided by
/
(
required for) operating activities—discontinued operations
|
704
|
|
(692
|
)
|
(999
|
)
|
|||
Cash provided by operations
|
5,844
|
|
4,439
|
|
6,520
|
|
|||
Investing activities
|
|
|
|
||||||
Expenditures for property and equipment
|
(1,438
|
)
|
(1,786
|
)
|
(1,886
|
)
|
|||
Proceeds from disposal of property and equipment
|
28
|
|
95
|
|
70
|
|
|||
Proceeds from sale of businesses
|
1,875
|
|
—
|
|
—
|
|
|||
Change in accounts receivable originated at third parties
|
—
|
|
—
|
|
121
|
|
|||
Proceeds from sale of accounts receivable originated at third parties
|
—
|
|
—
|
|
3,002
|
|
|||
Cash paid for acquisitions, net of cash assumed
|
—
|
|
(20
|
)
|
(157
|
)
|
|||
Other investments
|
24
|
|
106
|
|
130
|
|
|||
Cash provided by
/
(required for) investing activities—continuing operations
|
489
|
|
(1,605
|
)
|
1,280
|
|
|||
Cash provided by
/
(
required for) investing activities—discontinued operations
|
19
|
|
(321
|
)
|
(1,551
|
)
|
|||
Cash provided by
/
(
required for) investing activities
|
508
|
|
(1,926
|
)
|
(271
|
)
|
|||
Financing activities
|
|
|
|
||||||
Change in commercial paper, net
|
—
|
|
(80
|
)
|
(890
|
)
|
|||
Additions to long-term debt
|
—
|
|
1,993
|
|
—
|
|
|||
Reductions of long-term debt
|
(85
|
)
|
(2,079
|
)
|
(3,463
|
)
|
|||
Dividends paid
|
(1,362
|
)
|
(1,205
|
)
|
(1,006
|
)
|
|||
Repurchase of stock
|
(3,438
|
)
|
—
|
|
(1,461
|
)
|
|||
Stock option exercises and related tax benefit
|
369
|
|
373
|
|
456
|
|
|||
Cash required for financing activities
|
(4,516
|
)
|
(998
|
)
|
(6,364
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
—
|
|
26
|
|
|||
Net increase
/
(decrease) in cash and cash equivalents
|
1,836
|
|
1,515
|
|
(89
|
)
|
|||
Cash and cash equivalents at beginning of period
(a)
|
2,210
|
|
695
|
|
784
|
|
|||
Cash and cash equivalents at end of period
(b)
|
$
|
4,046
|
|
$
|
2,210
|
|
$
|
695
|
|
Supplemental information
|
|
|
|
||||||
Interest paid, net of capitalized interest
|
$
|
604
|
|
$
|
871
|
|
$
|
1,043
|
|
Income taxes (refunded)
/
paid
|
(127
|
)
|
1,251
|
|
1,386
|
|
|||
Property and equipment acquired through capital lease obligations
|
126
|
|
88
|
|
132
|
|
(millions, except footnotes)
|
Common
Stock
Shares
|
|
Stock
Par
Value
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Income/(Loss)
|
|
Total
|
|
|||||
February 2, 2013
|
645.3
|
|
$
|
54
|
|
$
|
3,925
|
|
$
|
13,155
|
|
$
|
(576
|
)
|
$
|
16,558
|
|
Net earnings
|
—
|
|
—
|
|
—
|
|
1,971
|
|
—
|
|
1,971
|
|
|||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
(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 loss
|
—
|
|
—
|
|
—
|
|
—
|
|
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
|
|
Net earnings
|
—
|
|
—
|
|
—
|
|
3,363
|
|
—
|
|
3,363
|
|
|||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
(30
|
)
|
(30
|
)
|
|||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
(1,378
|
)
|
—
|
|
(1,378
|
)
|
|||||
Repurchase of stock
|
(44.7
|
)
|
(4
|
)
|
—
|
|
(3,441
|
)
|
—
|
|
(3,445
|
)
|
|||||
Stock options and awards
|
6.7
|
|
1
|
|
449
|
|
—
|
|
—
|
|
450
|
|
|||||
January 30, 2016
|
602.2
|
|
$
|
50
|
|
$
|
5,348
|
|
$
|
8,188
|
|
$
|
(629
|
)
|
$
|
12,957
|
|
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)
|
2015
|
|
2014
|
|
2013
|
|
|||
Gross advertising costs
|
$
|
1,472
|
|
$
|
1,647
|
|
$
|
1,623
|
|
Vendor income
|
38
|
|
47
|
|
75
|
|
|||
Net advertising costs
|
$
|
1,434
|
|
$
|
1,600
|
|
$
|
1,548
|
|
Gain on Pharmacies and Clinics Transaction
(millions)
|
2015
|
|
|
Cash consideration
|
$
|
1,868
|
|
Less:
|
|
||
Deferred income
(a)
|
694
|
|
|
Inventory
|
447
|
|
|
Other assets
|
13
|
|
|
Pretax transaction costs and contingent liabilities
(b)
|
94
|
|
|
Pretax gain on pharmacies and clinics transaction
(c)
|
$
|
620
|
|
(a)
|
Represents deferred income that will be recorded as a reduction to SG&A expense evenly over the
23
-year weighted average remaining accounting useful life of our stores. As of January 30, 2016,
$690 million
remains in other current and other noncurrent liabilities.
|
(b)
|
Primarily relates to professional services, contract termination charges, severance, and impairment of certain assets not sold to CVS.
|
(c)
|
Recorded outside of segment results and excluded from Adjusted EPS.
|
(millions)
|
|
January 31,
2015 |
|
|
Inventory included in other current assets
|
|
$
|
508
|
|
Other current assets
|
|
2
|
|
|
Other noncurrent assets
|
|
12
|
|
|
Total
|
|
$
|
522
|
|
Income
/
(Loss) on Discontinued Operations
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Sales
|
$
|
—
|
|
$
|
1,902
|
|
$
|
1,317
|
|
Cost of sales
|
—
|
|
1,541
|
|
1,121
|
|
|||
SG&A expenses
|
—
|
|
909
|
|
910
|
|
|||
Depreciation and amortization
|
—
|
|
248
|
|
227
|
|
|||
Interest expense
|
—
|
|
73
|
|
77
|
|
|||
Pretax loss from operations
|
—
|
|
(869
|
)
|
(1,018
|
)
|
|||
Pretax exit costs
|
(129
|
)
|
(5,105
|
)
|
—
|
|
|||
Income taxes
|
171
|
|
1,889
|
|
295
|
|
|||
Income
/
(loss) from discontinued operations
|
$
|
42
|
|
$
|
(4,085
|
)
|
$
|
(723
|
)
|
Pretax Exit Costs
(millions)
|
2015
|
|
2014
|
|
||
Investment impairment
|
$
|
6
|
|
$
|
4,766
|
|
Contingent liabilities
|
62
|
|
240
|
|
||
Other exit costs
|
61
|
|
99
|
|
||
Total
|
$
|
129
|
|
$
|
5,105
|
|
Assets and Liabilities of Discontinued Operations
(millions)
|
January 30,
2016 |
|
|
January 31,
2015 |
|
||
Income tax benefit
|
$
|
77
|
|
|
$
|
1,430
|
|
Receivables from Canada Subsidiaries
(a)
|
320
|
|
|
326
|
|
||
Receivables under the debtor-in-possession credit facility
|
—
|
|
|
19
|
|
||
Total assets
|
$
|
397
|
|
|
$
|
1,775
|
|
|
|
|
|
||||
Accrued liabilities
|
$
|
171
|
|
|
296
|
|
|
Total liabilities
|
$
|
171
|
|
|
$
|
296
|
|
(a)
|
Represents loans and accounts receivable from Canada Subsidiaries.
|
(a)
|
Restructuring costs are not included in our segment results.
|
Restructuring-Related Liabilities
(millions)
|
Severance
|
|
|
Pension and
Other
|
|
|
Total
|
|
|||
Restructuring liability as of January 31, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges during period
|
128
|
|
|
10
|
|
|
138
|
|
|||
Paid or otherwise settled
|
(125
|
)
|
|
(10
|
)
|
|
(135
|
)
|
|||
Restructuring liability as of January 30, 2016
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Fair Value Measurements - Recurring Basis
|
|
Fair Value at
|
||||||
(millions)
|
Pricing Category
|
January 30, 2016
|
|
|
January 31, 2015
|
|
||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
|
|
|
|
|
||
Short-term investments
|
Level 1
|
$
|
3,008
|
|
|
$
|
1,520
|
|
Other current assets
|
|
|
|
|
|
|
||
Interest rate swaps
(a)
|
Level 2
|
12
|
|
|
—
|
|
||
Prepaid forward contracts
|
Level 1
|
32
|
|
|
38
|
|
||
Beneficial interest asset
|
Level 3
|
19
|
|
|
43
|
|
||
Other noncurrent assets
|
|
|
|
|
|
|
||
Interest rate swaps
(a)
|
Level 2
|
27
|
|
|
65
|
|
||
Beneficial interest asset
|
Level 3
|
12
|
|
|
31
|
|
||
Liabilities
|
|
|
|
|
|
|
||
Other current liabilities
|
|
|
|
|
|
|
||
Interest rate swaps
(a)
|
Level 2
|
8
|
|
|
—
|
|
||
Other noncurrent liabilities
|
|
|
|
|
|
|
||
Interest rate swaps
(a)
|
Level 2
|
—
|
|
|
24
|
|
(a)
|
See Note
21
for additional information on interest rate swaps.
|
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).
|
(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 the same or 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 30,
2016 |
|
January 31,
2015 |
|
||
Income tax and other receivables
|
$
|
352
|
|
$
|
426
|
|
Vendor income receivable
|
379
|
|
426
|
|
||
Prepaid expenses
|
214
|
|
231
|
|
||
Pharmacy-related receivables
(a)
|
48
|
|
274
|
|
||
Pharmacy and clinic assets held for sale
(b)
|
—
|
|
510
|
|
||
Other
|
168
|
|
207
|
|
||
Total
|
$
|
1,161
|
|
$
|
2,074
|
|
(a)
|
We did not sell outstanding pharmacy-related receivables as part of the pharmacies and clinics transaction. See Note
6
for more information on the pharmacies and clinics transaction.
|
(b)
|
See Note 6 for additional information relating to the pharmacy and clinic assets held for sale.
|
Estimated Useful Lives
|
Life (Years)
|
Buildings and improvements
|
8-39
|
Fixtures and equipment
|
2-15
|
Computer hardware and software
|
2-7
|
Impairments
(a)
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Impairments included in segment SG&A
|
$
|
50
|
|
$
|
108
|
|
$
|
58
|
|
Unallocated impairments
(b)
|
4
|
|
16
|
|
19
|
|
|||
Total impairments
|
$
|
54
|
|
$
|
124
|
|
$
|
77
|
|
(a)
|
Substantially all of the impairments are recorded in SG&A expense on the Consolidated Statements of Operations, primarily from completed or planned store closures and software changes.
|
(b)
|
For 2015, represents long-lived asset impairments from our decision to wind down certain noncore operations. For 2014 and 2013, represents impairments of undeveloped land.
|
Other Noncurrent Assets
(millions)
|
January 30,
2016 |
|
January 31,
2015 |
|
||
Goodwill and intangible assets
|
$
|
277
|
|
$
|
298
|
|
Company-owned life insurance investments
(a)
|
308
|
|
322
|
|
||
Pension asset
|
66
|
|
1
|
|
||
Interest rate swaps
(b)
|
27
|
|
65
|
|
||
Other
|
162
|
|
193
|
|
||
Total
|
$
|
840
|
|
$
|
879
|
|
(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
10
and
21
for additional information relating to our interest rate swaps.
|
Intangible Assets
|
Leasehold
Acquisition Costs
|
|
Other
(a)
|
|
Total
|
|||||||||||||||
(millions)
|
January 30,
2016 |
|
January 31,
2015 |
|
|
January 30,
2016 |
|
January 31,
2015 |
|
|
January 30,
2016 |
|
January 31,
2015 |
|
||||||
Gross asset
|
$
|
211
|
|
$
|
224
|
|
|
$
|
88
|
|
$
|
181
|
|
|
$
|
299
|
|
$
|
405
|
|
Accumulated amortization
|
(127
|
)
|
(133
|
)
|
|
(27
|
)
|
(117
|
)
|
|
(154
|
)
|
(250
|
)
|
||||||
Net intangible assets
|
$
|
84
|
|
$
|
91
|
|
|
$
|
61
|
|
$
|
64
|
|
|
$
|
145
|
|
$
|
155
|
|
(a)
|
Other intangible assets relate primarily to trademarks. We sold
$91 million
of gross intangible assets with accumulated depreciation of
$88 million
in connection with the sale of our pharmacy and clinics businesses. See Note 6 for additional information.
|
Estimated Amortization Expense
(millions)
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
|||||
Amortization expense
|
$
|
18
|
|
$
|
16
|
|
$
|
12
|
|
$
|
11
|
|
$
|
11
|
|
Accrued and Other Current Liabilities
(millions)
|
January 30,
2016 |
|
January 31,
2015 |
|
||
Wages and benefits
|
$
|
884
|
|
$
|
951
|
|
Gift card liability, net of estimated breakage
|
644
|
|
612
|
|
||
Real estate, sales, and other taxes payable
|
574
|
|
550
|
|
||
Income tax payable
|
502
|
|
26
|
|
||
Dividends payable
|
337
|
|
333
|
|
||
Straight-line rent accrual
(a)
|
262
|
|
255
|
|
||
Workers' compensation and general liability
(b)
|
146
|
|
153
|
|
||
Interest payable
|
76
|
|
76
|
|
||
Project costs accrual
|
73
|
|
69
|
|
||
Other
|
738
|
|
758
|
|
||
Total
|
$
|
4,236
|
|
$
|
3,783
|
|
(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
|
|
Expenses incurred/insurance receivable recorded
(a)
|
39
|
|
|
—
|
|
||
Payments made/received
|
(130
|
)
|
|
(40
|
)
|
||
Balance at January 30, 2016
|
$
|
80
|
|
|
$
|
20
|
|
(a)
|
Includes expenditures and accruals for Data Breach-related costs and expected insurance recoveries as discussed below.
|
Debt Maturities
|
January 30, 2016
|
||||
(dollars in millions)
|
Rate
(a)
|
|
Balance
|
|
|
Due 2016-2020
|
4.8
|
%
|
$
|
5,268
|
|
Due 2021-2025
|
3.5
|
|
2,104
|
|
|
Due 2026-2030
|
6.7
|
|
244
|
|
|
Due 2031-2035
|
6.5
|
|
762
|
|
|
Due 2036-2040
|
6.7
|
|
2,010
|
|
|
Due 2041-2045
|
4.0
|
|
1,471
|
|
|
Total notes and debentures
|
4.9
|
|
11,859
|
|
|
Swap valuation adjustments
|
|
|
42
|
|
|
Capital lease obligations
|
|
|
859
|
|
|
Less: Amounts due within one year
|
|
|
(815
|
)
|
|
Long-term debt
|
|
|
$
|
11,945
|
|
(a)
|
Reflects the weighted average stated interest rate as of year-end.
|
Required Principal Payments
(millions)
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
|||||
Total required principal payments
|
$
|
751
|
|
$
|
2,251
|
|
$
|
201
|
|
$
|
1,001
|
|
$
|
1,094
|
|
Commercial Paper
(dollars in millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Maximum daily amount outstanding during the year
|
$
|
—
|
|
$
|
590
|
|
$
|
1,465
|
|
Average amount outstanding during the year
|
—
|
|
129
|
|
408
|
|
|||
Amount outstanding at year-end
|
—
|
|
—
|
|
80
|
|
|||
Weighted average interest rate
|
—
|
%
|
0.11
|
%
|
0.13
|
%
|
(a)
|
There are
three
designated swaps at January 30, 2016.
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 30,
2016 |
|
Jan 31,
2015 |
|
|
Classification
|
Jan 30,
2016 |
|
Jan 31,
2015 |
|
|||||
Designated:
|
Other noncurrent assets
|
$
|
27
|
|
$
|
27
|
|
|
N/A
|
$
|
—
|
|
$
|
—
|
|
De-designated:
|
Other current assets
|
12
|
|
—
|
|
|
Other current liabilities
|
8
|
|
—
|
|
||||
|
Other noncurrent assets
|
—
|
|
38
|
|
|
Other noncurrent liabilities
|
—
|
|
24
|
|
||||
Total
|
|
$
|
39
|
|
$
|
65
|
|
|
|
$
|
8
|
|
$
|
24
|
|
Derivative Contracts – Effect on Results of Operations
(millions)
|
||||||||||
Type of Contract
|
Classification of (Income)/Expense
|
2015
|
|
2014
|
|
2013
|
|
|||
Interest rate swaps
|
Net interest expense
|
$
|
(36
|
)
|
$
|
(32
|
)
|
$
|
(29
|
)
|
Rent Expense
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Property, equipment, and software
|
$
|
198
|
|
$
|
195
|
|
$
|
212
|
|
Rent income
(a)
|
(16
|
)
|
(9
|
)
|
(8
|
)
|
|||
Total rent expense
|
$
|
182
|
|
$
|
186
|
|
$
|
204
|
|
Future Minimum Lease Payments
(millions)
|
Operating Leases
(a)
|
|
Capital Leases
(b)
|
|
Rent Income
|
|
Total
|
|
||||
2016
|
$
|
186
|
|
$
|
130
|
|
$
|
(21
|
)
|
$
|
295
|
|
2017
|
183
|
|
73
|
|
(19
|
)
|
237
|
|
||||
2018
|
178
|
|
71
|
|
(18
|
)
|
231
|
|
||||
2019
|
167
|
|
70
|
|
(17
|
)
|
220
|
|
||||
2020
|
157
|
|
69
|
|
(17
|
)
|
209
|
|
||||
After 2020
|
2,842
|
|
1,277
|
|
(286
|
)
|
3,833
|
|
||||
Total future minimum lease payments
|
$
|
3,713
|
|
$
|
1,690
|
|
$
|
(378
|
)
|
$
|
5,025
|
|
Less: Interest
(c)
|
|
|
831
|
|
|
|
|
|
||||
Present value of future minimum capital lease payments
(d)
|
|
|
$
|
859
|
|
|
|
|
|
(a)
|
Total contractual lease payments include
$1,995 million
related to options to extend lease terms that are reasonably assured of being exercised and also includes
$90 million
of legally binding minimum lease payments for stores that are expected to open in 2016 or later.
|
(b)
|
Capital lease payments include
$614 million
related to options to extend lease terms that are reasonably assured of being exercised and also includes
$311 million
of legally binding minimum lease payments for stores that are expected to open in 2016 or later.
|
(c)
|
Calculated using the interest rate at inception for each lease.
|
(d)
|
Includes the current portion of
$59 million
.
|
Tax Rate Reconciliation – Continuing Operations
|
2015
|
|
2014
|
|
2013
|
|
Federal statutory rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
State income taxes, net of the federal tax benefit
|
3.0
|
|
2.2
|
|
2.4
|
|
International
|
(2.3
|
)
|
(2.3
|
)
|
(1.2
|
)
|
Change in valuation allowance
|
(2.3
|
)
|
—
|
|
—
|
|
Other
|
(0.9
|
)
|
(1.9
|
)
|
(1.6
|
)
|
Effective tax rate
|
32.5
|
%
|
33.0
|
%
|
34.6
|
%
|
Provision for Income Taxes
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Current:
|
|
|
|
||||||
Federal
|
$
|
1,652
|
|
$
|
1,074
|
|
$
|
1,206
|
|
State
|
265
|
|
116
|
|
150
|
|
|||
International
|
7
|
|
7
|
|
13
|
|
|||
Total current
|
1,924
|
|
1,197
|
|
1,369
|
|
|||
Deferred:
|
|
|
|
||||||
Federal
|
(272
|
)
|
(2
|
)
|
56
|
|
|||
State
|
(50
|
)
|
10
|
|
—
|
|
|||
International
|
—
|
|
(1
|
)
|
2
|
|
|||
Total deferred
|
(322
|
)
|
7
|
|
58
|
|
|||
Total provision
|
$
|
1,602
|
|
$
|
1,204
|
|
$
|
1,427
|
|
Net Deferred Tax Asset/(Liability)
(millions)
|
January 30,
2016 |
|
January 31,
2015 |
|
||
Gross deferred tax assets:
|
|
|
||||
Accrued and deferred compensation
|
$
|
476
|
|
$
|
531
|
|
Accruals and reserves not currently deductible
|
323
|
|
316
|
|
||
Self-insured benefits
|
199
|
|
223
|
|
||
Prepaid store-in-store lease income
|
270
|
|
—
|
|
||
Other
|
90
|
|
176
|
|
||
Total gross deferred tax assets
|
1,358
|
|
1,246
|
|
||
Gross deferred tax liabilities:
|
|
|
||||
Property and equipment
|
(1,790
|
)
|
(1,946
|
)
|
||
Inventory
|
(190
|
)
|
(307
|
)
|
||
Other
|
(168
|
)
|
(123
|
)
|
||
Total gross deferred tax liabilities
|
(2,148
|
)
|
(2,376
|
)
|
||
Total net deferred tax liability
|
$
|
(790
|
)
|
$
|
(1,130
|
)
|
Reconciliation of Liability for Unrecognized Tax Benefits
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Balance at beginning of period
|
$
|
155
|
|
$
|
183
|
|
$
|
216
|
|
Additions based on tax positions related to the current year
|
10
|
|
10
|
|
15
|
|
|||
Additions for tax positions of prior years
|
14
|
|
17
|
|
28
|
|
|||
Reductions for tax positions of prior years
|
(26
|
)
|
(42
|
)
|
(57
|
)
|
|||
Settlements
|
—
|
|
(13
|
)
|
(19
|
)
|
|||
Balance at end of period
|
$
|
153
|
|
$
|
155
|
|
$
|
183
|
|
Other Noncurrent Liabilities
(millions)
|
January 30,
2016 |
|
January 31,
2015 |
|
||
Deferred income liability
(a)
|
$
|
660
|
|
$
|
—
|
|
Deferred compensation
|
454
|
|
507
|
|
||
Workers' compensation and general liability
(b)
|
353
|
|
413
|
|
||
Income tax
|
122
|
|
128
|
|
||
Pension and postretirement health care benefits
|
54
|
|
151
|
|
||
Other
|
254
|
|
253
|
|
||
Total
|
$
|
1,897
|
|
$
|
1,452
|
|
(a)
|
Represents deferred income related to the pharmacies and clinics transaction. See Note
6
for more information.
|
(b)
|
See footnote
(b)
to the Accrued and Other Current Liabilities table in Note
18
for additional detail.
|
Share Repurchases
(millions, except per share data)
|
2015
|
|
2014
|
|
2013
|
|
|||
Total number of shares purchased
(a)
|
44.7
|
|
0.8
|
|
21.9
|
|
|||
Average price paid per share
|
$
|
77.07
|
|
$
|
54.07
|
|
$
|
67.41
|
|
Total investment
|
$
|
3,441
|
|
$
|
41
|
|
$
|
1,474
|
|
(a)
|
Includes
0.1 million
,
0.8 million
, and
0.2 million
shares delivered upon the non-cash settlement of prepaid contracts in 2015, 2014, and 2013, respectively. These contracts had an original cash investment of
$3 million
,
$41 million
, and
$14 million
, respectively, and an aggregate market value of
$7 million
,
$46 million
, and
$17 million
. These contracts are among the investment vehicles used to reduce our economic exposure related to our nonqualified deferred compensation plans. Note
27
provides the details of our positions in prepaid forward contracts.
|
Restricted Stock Activity
|
Total Nonvested Units
|
||||
|
Restricted
Stock
(a)
|
|
Grant Date
Fair Value
(b)
|
|
|
January 31, 2015
|
4,713
|
|
$
|
65.11
|
|
Granted
|
1,677
|
|
73.76
|
|
|
Forfeited
|
(704
|
)
|
65.87
|
|
|
Vested
|
(1,460
|
)
|
61.51
|
|
|
January 30, 2016
|
4,226
|
|
$
|
69.49
|
|
(a)
|
Represents the number of shares of restricted stock, in thousands. For performance-based restricted stock units, assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding restricted stock units and performance-based restricted stock units at
January 30, 2016
was
3,471 thousand
.
|
(b)
|
Weighted average per unit.
|
Performance Share Unit Activity
|
Total Nonvested Units
|
||||
|
Performance
Share Units
(a)
|
|
Grant Date
Fair Value
(b)
|
|
|
January 31, 2015
|
3,600
|
|
$
|
63.16
|
|
Granted
|
2,190
|
|
74.19
|
|
|
Forfeited
|
(1,728
|
)
|
60.48
|
|
|
Vested
|
(39
|
)
|
55.58
|
|
|
January 30, 2016
|
4,023
|
|
$
|
70.70
|
|
(a)
|
Represents the number of performance share units, in thousands. Assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding units at
January 30, 2016
was
1,812 thousand
.
|
(b)
|
Weighted average per unit.
|
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)
|
|
||||
January 31, 2015
|
16,725
|
|
$
|
53.04
|
|
$
|
344
|
|
|
12,843
|
|
$
|
52.02
|
|
$
|
277
|
|
Granted
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||
Expired/forfeited
|
(404
|
)
|
55.77
|
|
|
|
|
|
|
|
|
|
|
||||
Exercised/issued
|
(5,821
|
)
|
52.07
|
|
|
|
|
|
|
|
|
|
|
||||
January 30, 2016
|
10,500
|
|
$
|
53.47
|
|
$
|
199
|
|
|
9,405
|
|
$
|
52.57
|
|
$
|
187
|
|
(a)
|
In thousands.
|
(b)
|
Weighted average per share.
|
(c)
|
Represents stock price appreciation subsequent to the grant date, in millions.
|
Stock Option Exercises
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Cash received for exercise price
|
$
|
303
|
|
$
|
374
|
|
$
|
422
|
|
Intrinsic value
|
159
|
|
143
|
|
197
|
|
|||
Income tax benefit
|
77
|
|
41
|
|
77
|
|
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
|
|
|||
January 31, 2015
|
0.5
|
|
$
|
41.11
|
|
$
|
38
|
|
$
|
21
|
|
January 30, 2016
|
0.4
|
|
$
|
41.11
|
|
$
|
32
|
|
$
|
18
|
|
Plan Expenses
|
|
|
|
||||||
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
401(k) plan matching contributions expense
|
$
|
224
|
|
$
|
220
|
|
$
|
229
|
|
|
|
|
|
||||||
Nonqualified deferred compensation plans
|
|
|
|
||||||
Benefits expense
(a)
|
5
|
|
52
|
|
41
|
|
|||
Related investment expense (income)
(b)
|
15
|
|
(45
|
)
|
(23
|
)
|
|||
Nonqualified plan net expense
|
$
|
20
|
|
$
|
7
|
|
$
|
18
|
|
(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
|
Qualified Plans
|
|
Nonqualified Plans
|
||||||||||
(millions)
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||
Benefit obligation at beginning of period
|
$
|
3,844
|
|
$
|
3,173
|
|
|
$
|
43
|
|
$
|
35
|
|
Service cost
|
108
|
|
111
|
|
|
1
|
|
1
|
|
||||
Interest cost
|
152
|
|
148
|
|
|
2
|
|
1
|
|
||||
Actuarial (gain)/loss
|
(400
|
)
|
556
|
|
|
(4
|
)
|
9
|
|
||||
Participant contributions
|
6
|
|
3
|
|
|
—
|
|
—
|
|
||||
Benefits paid
|
(155
|
)
|
(147
|
)
|
|
(3
|
)
|
(3
|
)
|
||||
Plan amendments
|
3
|
|
—
|
|
|
—
|
|
—
|
|
||||
Benefit obligation at end of period
|
$
|
3,558
|
|
$
|
3,844
|
|
|
$
|
39
|
|
$
|
43
|
|
Change in Plan Assets
|
Qualified Plans
|
|
Nonqualified Plans
|
||||||||||
(millions)
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||
Fair value of plan assets at beginning of period
|
$
|
3,784
|
|
$
|
3,267
|
|
|
$
|
—
|
|
$
|
—
|
|
Actual return on plan assets
|
(231
|
)
|
507
|
|
|
—
|
|
—
|
|
||||
Employer contributions
|
203
|
|
154
|
|
|
3
|
|
3
|
|
||||
Participant contributions
|
6
|
|
3
|
|
|
—
|
|
—
|
|
||||
Benefits paid
|
(155
|
)
|
(147
|
)
|
|
(3
|
)
|
(3
|
)
|
||||
Fair value of plan assets at end of period
|
3,607
|
|
3,784
|
|
|
—
|
|
—
|
|
||||
Benefit obligation at end of period
|
3,558
|
|
3,844
|
|
|
39
|
|
43
|
|
||||
Funded/(underfunded) status
|
$
|
49
|
|
$
|
(60
|
)
|
|
$
|
(39
|
)
|
$
|
(43
|
)
|
Recognition of Funded/(Underfunded) Status
|
Qualified Plans
|
|
Nonqualified Plans
|
||||||||||
(millions)
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||
Other noncurrent assets
|
$
|
66
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Accrued and other current liabilities
|
(1
|
)
|
(1
|
)
|
|
(6
|
)
|
(4
|
)
|
||||
Other noncurrent liabilities
|
(16
|
)
|
(59
|
)
|
|
(33
|
)
|
(39
|
)
|
||||
Net amounts recognized
|
$
|
49
|
|
$
|
(60
|
)
|
|
$
|
(39
|
)
|
$
|
(43
|
)
|
Amounts in Accumulated Other Comprehensive Income
|
|
|||||
(millions)
|
2015
|
|
2014
|
|
||
Net actuarial loss
|
$
|
1,022
|
|
$
|
1,018
|
|
Prior service credits
|
(57
|
)
|
(69
|
)
|
||
Amounts in accumulated other comprehensive income
|
$
|
965
|
|
$
|
949
|
|
Change in Accumulated Other Comprehensive Income
|
|
|
||||
(millions)
|
Pretax
|
|
Net of Tax
|
|
||
February 1, 2014
|
$
|
712
|
|
$
|
430
|
|
Net actuarial loss
|
291
|
|
176
|
|
||
Amortization of net actuarial losses
|
(65
|
)
|
(40
|
)
|
||
Amortization of prior service costs and transition
|
11
|
|
7
|
|
||
January 31, 2015
|
$
|
949
|
|
$
|
573
|
|
Net actuarial loss
|
87
|
|
53
|
|
||
Amortization of net actuarial losses
|
(82
|
)
|
(50
|
)
|
||
Amortization of prior service costs and transition
|
11
|
|
7
|
|
||
January 30, 2016
|
$
|
965
|
|
$
|
583
|
|
Net Pension Benefits Expense
|
|
|
|
||||||
(millions)
|
2015
|
|
2014
|
|
2013
|
|
|||
Service cost benefits earned during the period
|
$
|
109
|
|
$
|
112
|
|
$
|
118
|
|
Interest cost on projected benefit obligation
|
154
|
|
149
|
|
137
|
|
|||
Expected return on assets
|
(260
|
)
|
(233
|
)
|
(235
|
)
|
|||
Amortization of losses
|
82
|
|
65
|
|
103
|
|
|||
Amortization of prior service cost
|
(11
|
)
|
(11
|
)
|
(11
|
)
|
|||
Settlement and special termination charges
|
4
|
|
—
|
|
3
|
|
|||
Total
|
$
|
78
|
|
$
|
82
|
|
$
|
115
|
|
Defined Benefit Pension Plan Information
(millions)
|
2015
|
|
|
2014
|
|
||
Accumulated benefit obligation (ABO) for all plans
(a)
|
$
|
3,550
|
|
|
$
|
3,834
|
|
Projected benefit obligation for pension plans with an ABO in excess of plan assets
(b)
|
65
|
|
|
65
|
|
||
Total ABO for pension plans with an ABO in excess of plan assets
|
60
|
|
|
56
|
|
||
Fair value of plan assets for pension plans with an ABO in excess of plan assets
|
10
|
|
|
—
|
|
(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
|
|
|||
|
2015
|
|
2014
|
|
Discount rate
|
4.70
|
%
|
3.87
|
%
|
Average assumed rate of compensation increase
|
3.00
|
|
3.00
|
|
Asset Category
|
Current Targeted
|
|
Actual Allocation
|
|||
|
Allocation
|
|
2015
|
|
2014
|
|
Domestic equity securities
(a)
|
14
|
%
|
16
|
%
|
19
|
%
|
International equity securities
|
9
|
|
10
|
|
12
|
|
Debt securities
|
45
|
|
44
|
|
28
|
|
Balanced funds
|
23
|
|
21
|
|
31
|
|
Other
(b)
|
9
|
|
9
|
|
10
|
|
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 30, 2016
and
January 31, 2015
.
|
(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
|
||||||
(millions)
|
Pricing Category
|
January 30, 2016
|
|
|
January 31, 2015
|
|
||
Cash and cash equivalents
|
Level 1
|
$
|
43
|
|
|
$
|
7
|
|
Government securities
(a)
|
Level 2
|
470
|
|
|
349
|
|
||
Fixed income
(b)
|
Level 2
|
979
|
|
|
571
|
|
||
Other
(c)
|
Level 2
|
8
|
|
|
21
|
|
||
|
|
1,500
|
|
|
948
|
|
||
Investments valued using NAV per share
(d)
|
|
|
|
|
||||
Cash and cash equivalents
|
|
455
|
|
|
204
|
|
||
Common collective trusts
|
|
544
|
|
|
1,102
|
|
||
Fixed Income
|
|
49
|
|
|
53
|
|
||
Balanced funds
|
|
756
|
|
|
1,152
|
|
||
Private equity funds
|
|
141
|
|
|
171
|
|
||
Other
|
|
162
|
|
|
154
|
|
||
Total plan assets
|
|
$
|
3,607
|
|
|
$
|
3,784
|
|
(a)
|
Investments in government securities and long-term government bonds.
|
(b)
|
Investments in corporate and municipal bonds.
|
(c)
|
Investments in derivative investments.
|
(d)
|
In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
|
Position
|
|
Valuation Technique
|
Cash and cash equivalents
|
|
Carrying value approximates fair value.
|
Government securities
and fixed income
|
|
Valued using matrix pricing models and quoted prices of securities with similar characteristics.
|
Derivatives
|
|
Swap derivatives - Valued initially using models calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation model (e.g., interest rates and credit spreads). Model inputs are changed only when corroborated by market data. A credit risk adjustment is made on each swap using observable market credit spreads.
Option derivatives - Valued at transaction price initially. Subsequent valuations are based on observable inputs to the valuation model (e.g., underlying investments).
|
Estimated Future Benefit Payments
(millions)
|
Pension
Benefits
|
|
|
2016
|
$
|
169
|
|
2017
|
170
|
|
|
2018
|
172
|
|
|
2019
|
180
|
|
|
2020
|
188
|
|
|
2021-2025
|
1,068
|
|
(millions)
|
Cash Flow
Hedges
|
|
|
Currency
Translation
Adjustment
|
|
|
Pension and
Other
Benefit
|
|
|
Total
|
|
||||
January 31, 2015
|
$
|
(22
|
)
|
|
$
|
(16
|
)
|
|
$
|
(561
|
)
|
|
$
|
(599
|
)
|
Other comprehensive (loss)/income before reclassifications
|
—
|
|
|
(6
|
)
|
|
(23
|
)
|
|
(29
|
)
|
||||
Amounts reclassified from AOCI
|
3
|
|
(a)
|
—
|
|
|
(4
|
)
|
(b)
|
(1
|
)
|
||||
January 30, 2016
|
$
|
(19
|
)
|
|
$
|
(22
|
)
|
|
$
|
(588
|
)
|
|
$
|
(629
|
)
|
(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 amortization of pension and other benefit liabilities, net of
$14 million
of taxes, which is recorded in SG&A expenses on the Consolidated Statements of Operations. See Note
28
for additional information.
|
Business Segment Results
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
(millions)
|
|
|
|||||||||
Sales
|
$
|
73,785
|
|
|
$
|
72,618
|
|
|
$
|
71,279
|
|
Cost of sales
|
51,997
|
|
|
51,278
|
|
|
50,039
|
|
|||
Gross margin
|
21,788
|
|
|
21,340
|
|
|
21,240
|
|
|||
Selling, general, and administrative expenses
(e)
|
14,448
|
|
|
14,503
|
|
|
14,383
|
|
|||
Depreciation and amortization
|
2,213
|
|
|
2,129
|
|
|
1,996
|
|
|||
Segment profit
|
5,127
|
|
|
4,708
|
|
|
4,861
|
|
|||
Gain on sale
(a)
|
620
|
|
|
—
|
|
|
391
|
|
|||
Restructuring costs
(b)(e)
|
(138
|
)
|
|
—
|
|
|
—
|
|
|||
Data breach-related costs, net of insurance
(c)(e)
|
(39
|
)
|
|
(145
|
)
|
|
(17
|
)
|
|||
Other
(d)(e)
|
(39
|
)
|
|
(29
|
)
|
|
(64
|
)
|
|||
Earnings from continuing operations before interest expense and income taxes
|
5,530
|
|
|
4,535
|
|
|
5,170
|
|
|||
Net interest expense
|
607
|
|
|
882
|
|
|
1,049
|
|
|||
Earnings from continuing operations before income taxes
|
$
|
4,923
|
|
|
$
|
3,653
|
|
|
$
|
4,121
|
|
(a)
|
For 2015, includes the gain on the pharmacies and clinics transaction. Refer to Note
6
for more information. For 2013, includes the gain on receivables transaction. Refer to Note
9
for more information.
|
(b)
|
Refer to Note
8
for more information on restructuring costs.
|
(c)
|
Refer to Note
19
for more information on data breach-related costs.
|
(d)
|
For 2015, represents impairments related to our decision to wind down certain noncore operations. 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 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 undeveloped land in the U.S.
|
(e)
|
The sum of segment SG&A expenses, restructuring costs, data breach-related costs, and other charges equal consolidated SG&A expenses.
|
Total Assets by Segment
(millions)
|
January 30,
2016 |
|
January 31,
2015 |
|
||
U.S.
|
$
|
39,845
|
|
$
|
39,337
|
|
Assets of discontinued operations
|
397
|
|
1,775
|
|
||
Unallocated assets
(a)
|
20
|
|
60
|
|
||
Total assets
|
$
|
40,262
|
|
$
|
41,172
|
|
(a)
|
Represents the insurance receivable related to the 2013 data breach.
|
Quarterly Results
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total Year
|
|||||||||||||||||||||||||
(millions, except per share data)
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||||||||
Sales
|
$
|
17,119
|
|
$
|
16,657
|
|
|
$
|
17,427
|
|
$
|
16,957
|
|
|
$
|
17,613
|
|
$
|
17,254
|
|
|
$
|
21,626
|
|
$
|
21,751
|
|
|
$
|
73,785
|
|
$
|
72,618
|
|
Cost of sales
|
11,911
|
|
11,748
|
|
|
12,051
|
|
11,798
|
|
|
12,440
|
|
12,171
|
|
|
15,594
|
|
15,563
|
|
|
51,997
|
|
51,278
|
|
||||||||||
Gross margin
|
5,208
|
|
4,909
|
|
|
5,376
|
|
5,159
|
|
|
5,173
|
|
5,083
|
|
|
6,032
|
|
6,188
|
|
|
21,788
|
|
21,340
|
|
||||||||||
Selling, general, and administrative expenses
|
3,514
|
|
3,376
|
|
|
3,495
|
|
3,599
|
|
|
3,736
|
|
3,644
|
|
|
3,921
|
|
4,058
|
|
|
14,665
|
|
14,676
|
|
||||||||||
Depreciation and amortization
|
540
|
|
511
|
|
|
551
|
|
537
|
|
|
561
|
|
535
|
|
|
562
|
|
545
|
|
|
2,213
|
|
2,129
|
|
||||||||||
Gain on sale
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(620
|
)
|
—
|
|
|
(620
|
)
|
—
|
|
||||||||||
Earnings before interest expense and income taxes
|
1,154
|
|
1,022
|
|
|
1,330
|
|
1,023
|
|
|
876
|
|
904
|
|
|
2,169
|
|
1,585
|
|
|
5,530
|
|
4,535
|
|
||||||||||
Net interest expense
|
155
|
|
152
|
|
|
148
|
|
433
|
|
|
151
|
|
146
|
|
|
152
|
|
151
|
|
|
607
|
|
882
|
|
||||||||||
Earnings from continuing operations before income taxes
|
999
|
|
870
|
|
|
1,182
|
|
590
|
|
|
725
|
|
758
|
|
|
2,017
|
|
1,434
|
|
|
4,923
|
|
3,653
|
|
||||||||||
Provision for income taxes
|
348
|
|
299
|
|
|
409
|
|
199
|
|
|
249
|
|
232
|
|
|
596
|
|
474
|
|
|
1,602
|
|
1,204
|
|
||||||||||
Net earnings from continuing operations
|
651
|
|
571
|
|
|
773
|
|
391
|
|
|
476
|
|
526
|
|
|
1,421
|
|
960
|
|
|
3,321
|
|
2,449
|
|
||||||||||
Discontinued operations, net of tax
|
(16
|
)
|
(153
|
)
|
|
(20
|
)
|
(157
|
)
|
|
73
|
|
(174
|
)
|
|
5
|
|
(3,600
|
)
|
|
42
|
|
(4,085
|
)
|
||||||||||
Net earnings/(loss)
|
$
|
635
|
|
$
|
418
|
|
|
$
|
753
|
|
$
|
234
|
|
|
$
|
549
|
|
$
|
352
|
|
|
$
|
1,426
|
|
$
|
(2,640
|
)
|
|
$
|
3,363
|
|
$
|
(1,636
|
)
|
Basic earnings/(loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Continuing operations
|
$
|
1.02
|
|
$
|
0.90
|
|
|
$
|
1.21
|
|
$
|
0.62
|
|
|
$
|
0.76
|
|
$
|
0.83
|
|
|
$
|
2.33
|
|
$
|
1.51
|
|
|
$
|
5.29
|
|
$
|
3.86
|
|
Discontinued operations
|
(0.03
|
)
|
(0.24
|
)
|
|
(0.03
|
)
|
(0.25
|
)
|
|
0.12
|
|
(0.28
|
)
|
|
0.01
|
|
(5.64
|
)
|
|
0.07
|
|
(6.44
|
)
|
||||||||||
Net earnings/(loss) per share
|
$
|
0.99
|
|
$
|
0.66
|
|
|
$
|
1.18
|
|
$
|
0.37
|
|
|
$
|
0.88
|
|
$
|
0.55
|
|
|
$
|
2.33
|
|
$
|
(4.14
|
)
|
|
$
|
5.35
|
|
$
|
(2.58
|
)
|
Diluted earnings/(loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Continuing operations
|
$
|
1.01
|
|
$
|
0.89
|
|
|
$
|
1.21
|
|
$
|
0.61
|
|
|
$
|
0.76
|
|
$
|
0.82
|
|
|
$
|
2.31
|
|
$
|
1.49
|
|
|
$
|
5.25
|
|
$
|
3.83
|
|
Discontinued operations
|
(0.03
|
)
|
(0.24
|
)
|
|
(0.03
|
)
|
(0.25
|
)
|
|
0.11
|
|
(0.27
|
)
|
|
0.01
|
|
(5.59
|
)
|
|
0.07
|
|
(6.38
|
)
|
||||||||||
Net earnings/(loss) per share
|
$
|
0.98
|
|
$
|
0.66
|
|
|
$
|
1.18
|
|
$
|
0.37
|
|
|
$
|
0.87
|
|
$
|
0.55
|
|
|
$
|
2.32
|
|
$
|
(4.10
|
)
|
|
$
|
5.31
|
|
$
|
(2.56
|
)
|
Dividends declared per share
|
$
|
0.52
|
|
$
|
0.43
|
|
|
$
|
0.56
|
|
$
|
0.52
|
|
|
$
|
0.56
|
|
$
|
0.52
|
|
|
$
|
0.56
|
|
$
|
0.52
|
|
|
$
|
2.20
|
|
$
|
1.99
|
|
Closing common stock price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
High
|
83.57
|
|
62.54
|
|
|
85.01
|
|
61.38
|
|
|
80.87
|
|
63.93
|
|
|
78.23
|
|
77.13
|
|
|
85.01
|
|
77.13
|
|
||||||||||
Low
|
74.25
|
|
55.07
|
|
|
77.26
|
|
55.34
|
|
|
72.94
|
|
57.50
|
|
|
67.59
|
|
61.12
|
|
|
67.59
|
|
55.07
|
|
U.S. Sales by Product Category
(a)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total Year
|
|||||||||||||||
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
Household essentials
|
28
|
%
|
27
|
%
|
|
28
|
%
|
28
|
%
|
|
28
|
%
|
27
|
%
|
|
21
|
%
|
22
|
%
|
|
26
|
%
|
25
|
%
|
Hardlines
|
14
|
|
15
|
|
|
14
|
|
15
|
|
|
13
|
|
15
|
|
|
24
|
|
24
|
|
|
17
|
|
18
|
|
Apparel and accessories
|
20
|
|
19
|
|
|
21
|
|
20
|
|
|
19
|
|
19
|
|
|
18
|
|
17
|
|
|
19
|
|
19
|
|
Food and pet supplies
|
22
|
|
23
|
|
|
20
|
|
20
|
|
|
22
|
|
21
|
|
|
19
|
|
19
|
|
|
21
|
|
21
|
|
Home furnishings and décor
|
16
|
|
16
|
|
|
17
|
|
17
|
|
|
18
|
|
18
|
|
|
18
|
|
18
|
|
|
17
|
|
17
|
|
Total
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
|
100
|
%
|
100
|
%
|
Supplemental information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pharmacy
(b)
|
6
|
%
|
6
|
%
|
|
6
|
%
|
6
|
%
|
|
6
|
%
|
6
|
%
|
|
3
|
%
|
5
|
%
|
|
5
|
%
|
6
|
%
|
(a)
|
As a percentage of sales.
|
(b)
|
Included in household essentials.
|
•
|
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
|
•
|
Human Resources and 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
|
•
|
Item Two-- 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 30, 2016
,
January 31, 2015
, and
February 1, 2014
|
•
|
Consolidated Statements of Comprehensive Income for the Years Ended
January 30, 2016
,
January 31, 2015
, and
February 1, 2014
|
•
|
Consolidated Statements of Financial Position at
January 30, 2016
and
January 31, 2015
|
•
|
Consolidated Statements of Cash Flows for the Years Ended
January 30, 2016
,
January 31, 2015
, and
February 1, 2014
|
•
|
Consolidated Statements of Shareholders' Investment for the Years Ended
January 30, 2016
,
January 31, 2015
, and
February 1, 2014
|
•
|
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)
|
H
|
|
Asset Purchase Agreement dated June 12, 2015 between Target Corporation and CVS Pharmacy, Inc. (
8
)
|
(3)A
|
|
Amended and Restated Articles of Incorporation (as amended through June 9, 2010)
(9)
|
B
|
|
By-laws (as amended through November 11, 2015)
(10)
|
(4)A
|
|
Indenture, dated as of August 4, 2000 between Target Corporation and Bank One Trust Company, N.A.
(11)
|
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.)
(12)
|
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
(13)
|
B
|
*
|
Target Corporation Long-Term Incentive Plan (as amended and restated effective June 8, 2011)
(14)
|
C
|
*
|
Target Corporation SPP I (2011 Plan Statement) (as amended and restated effective June 8, 2011)
(15)
|
D
|
*
|
Target Corporation SPP II (2011 Plan Statement) (as amended and restated effective June 8, 2011)
(16)
|
E
|
*
|
Target Corporation SPP III (2014 Plan Statement) (as amended and restated effective January 1, 2014)
(17)
|
F
|
*
|
Target Corporation Officer Deferred Compensation Plan (as amended and restated effective June 8, 2011)
(18)
|
G
|
*
|
Target Corporation Officer EDCP (2015 Plan Statement) (as amended and restated effective January 1, 2015)
(19)
|
H
|
*
|
Target Corporation Deferred Compensation Plan Directors
(20)
|
I
|
*
|
Target Corporation DDCP (2013 Plan Statement) (as amended and restated effective December 1, 2013)
(21)
|
J
|
*
|
Target Corporation Officer Income Continuance Policy Statement (as amended and restated effective June 8, 2011)
(22)
|
K
|
*
|
Target Corporation Executive Excess Long Term Disability Plan (as restated effective January 1, 2010
(23)
|
L
|
*
|
Director Retirement Program
(24)
|
M
|
*
|
Target Corporation Deferred Compensation Trust Agreement (as amended and restated effective January 1, 2009)
(25)
|
N
|
*
|
Amendment to Target Corporation Deferred Compensation Trust Agreement (as amended and restated effective January 1, 2009)
(26)
|
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
(27)
|
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
(28)
|
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
(29)
|
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
(30)
|
S
|
|
DIP Facility Term Sheet dated January 14, 2015 among Target Corporation, as DIP Lender, and Target Canada Co. and its subsidiaries listed therein
(31)
|
T
|
s
|
Credit Card Program Agreement dated October 22, 2012 among Target Corporation, Target Enterprise, Inc. and TD Bank USA, N.A.
(32)
|
U
|
*
|
Target Corporation 2011 Long-Term Incentive Plan
(33)
|
V
|
*
|
Form of Amended and Restated Executive Non-Qualified Stock Option Agreement
(34)
|
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
(35)
|
AA
|
*
|
Form of Non-Employee Director Restricted Stock Unit Agreement
|
BB
|
*
|
Form of Cash Retention Award
(36)
|
CC
|
*
|
Advisory Period Letter to Gregg W. Steinhafel, dated May 21, 2014
(37)
|
DD
|
*
|
Restricted Stock Unit Agreement with John J. Mulligan, effective as of May 22, 2014
(38)
|
EE
|
*
|
Employment Offer Letter to Brian C. Cornell, dated July 26, 2014
(39)
|
FF
|
*
|
Make-Whole Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21, 2014
(40)
|
GG
|
*
|
Make-Whole Performance-Based Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21, 2014
(41)
|
HH
|
*
|
Aircraft Time Sharing Agreement as of March 13, 2015 among Target Corporation and Brian C. Cornell
(42)
|
II
|
s
|
First Amendment dated February 24, 2015 to Credit Card Program Agreement among Target Corporation, Target Enterprise, Inc. and TD Bank USA, N.A.
(43)
|
JJ
|
*
|
Amended and Restated Target Corporation 2011 Long-Term Incentive Plan
(44)
|
KK
|
s
|
Pharmacy Operating Agreement dated December 16, 2015 between Target Corporation and CVS Pharmacy, Inc.
|
LL
|
*
|
Short-Term Incentive Plan Letter to Tina M. Tyler, dated January 14, 2016
|
MM
|
*
|
Non-Competition, Non-Solicitation and Confidentiality Agreement with Tina M. Tyler, effective as of January 27, 2016
|
(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.
|
|
Excludes the Seller Disclosure Schedule, Exhibits B through G and Schedules I and II referred to in the agreement which Target Corporation agrees to furnish supplementally to the Securities and Exchange Commission upon request. Exhibit A is separately filed as Exhibit (10)KK.
|
w
|
Certain portions of this exhibit have been omitted pursuant to a request for confidential treatement 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 (2)H to Target's Form 10-Q Report for the quarter ended August 1, 2015.
|
(9)
|
Incorporated by reference to Exhibit (3)A to Target's Form 8-K Report filed June 10, 2010.
|
(10)
|
Incorporated by reference to Exhibit (3)A to Target's Form 8-K Report filed November 11, 2015.
|
(11)
|
Incorporated by reference to Exhibit 4.1 to Target's Form 8-K Report filed August 10, 2000.
|
(12)
|
Incorporated by reference to Exhibit 4.1 to the Registrant's Form 8-K Report filed May 1, 2007.
|
(13)
|
Incorporated by reference to Appendix A to the Registrant's Proxy Statement filed April 30, 2012.
|
(14)
|
Incorporated by reference to Exhibit (10)B to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(15)
|
Incorporated by reference to Exhibit (10)C to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(16)
|
Incorporated by reference to Exhibit (10)D to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(17)
|
Incorporated by reference to Exhibit (10)E to Target's Form 10-K Report for the year ended February 1, 2014.
|
(18)
|
Incorporated by reference to Exhibit (10)F to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(19)
|
Incorporated by reference to Exhibit (10)G to Target's 10-K Report for the year ended January 31, 2015.
|
(20)
|
Incorporated by reference to Exhibit (10)I to Target's Form 10-K Report for the year ended February 3, 2007.
|
(21)
|
Incorporated by reference to Exhibit (10)I to Target's Form 10-K Report for the year ended February 1, 2014.
|
(22)
|
Incorporated by reference to Exhibit (10)J to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(23)
|
Incorporated by reference to Exhibit (10)A to Target's Form 10-Q Report for the quarter ended October 30, 2010.
|
(24)
|
Incorporated by reference to Exhibit (10)O to Target's Form 10-K Report for the year ended January 29, 2005.
|
(25)
|
Incorporated by reference to Exhibit (10)O to Target's Form 10-K Report for the year ended January 31, 2009.
|
(26)
|
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended July 30, 2011.
|
(27)
|
Incorporated by reference to Exhibit (10)O to Target's Form 10-Q Report for the quarter ended October 29, 2011.
|
(28)
|
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended October 27, 2012.
|
(29)
|
Incorporated by reference to Exhibit (10)Y to Target’s Form 10-Q Report for the quarter ended November 2, 2013.
|
(30)
|
Incorporated by reference to Exhibit (10)R to Target's Form 10-K Report for the year ended January 31, 2015.
|
(31)
|
Incorporated by reference to Exhibit (10)S to Target's Form 10-K Report for the year ended January 31, 2015.
|
(32)
|
Incorporated by reference to Exhibit (10)X to Target’s Form 10-Q/A Report for the quarter ended May 4, 2013.
|
(33)
|
Incorporated by reference to Appendix A to Target's Proxy Statement filed April 28, 2011.
|
(34)
|
Incorporated by reference to Exhibit (10)V to Target's Form 10-K Report for the year ended January 31, 2015.
|
(35)
|
Incorporated by reference to Exhibit (10)EE to Target's Form 8-K Report filed January 11, 2012.
|
(36)
|
Incorporated by reference to Exhibit (10)W to Target’s Form 10-K Report for year ended February 2, 2013.
|
(37)
|
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(38)
|
Incorporated by reference to Exhibit (10)BB to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(39)
|
Incorporated by reference to Exhibit (10)CC to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(40)
|
Incorporated by reference to Exhibit (10)DD to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(41)
|
Incorporated by reference to Exhibit (10)EE to Target's Form 10-Q Report for the quarter ended August 2, 2014.
|
(42)
|
Incorporated by reference to Exhibit (10)HH to Target's Form 10-K Report for the year ended January 31, 2015.
|
(43)
|
Incorporated by reference to Exhibit (10)II to Target's Form 10-Q Report for the quarter ended May 2, 2015.
|
(44)
|
Incorporated by reference to Exhibit (10)JJ to Target's Form 8-K Report filed June 12, 2015.
|
|
|
|
|
TARGET CORPORATION
|
|
|
By:
|
|
Dated: March 11, 2016
|
|
Catherine R. Smith
Executive Vice President and Chief Financial Officer
|
|
|
Dated: March 11, 2016
|
Brian C. Cornell
Chairman of the Board and Chief Executive Officer
|
|
|
Dated: March 11, 2016
|
Catherine R. Smith
Executive Vice President and Chief Financial Officer
|
|
|
Dated: March 11, 2016
|
Robert M. Harrison
Senior Vice President, Chief Accounting Officer
and Controller
|
ROXANNE S. AUSTIN
DOUGLAS M. BAKER, JR.
CALVIN DARDEN
HENRIQUE DE CASTRO
ROBERT L. EDWARDS
MELANIE L. HEALEY
|
|
DONALD R. KNAUSS
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 11, 2016
|
|
Catherine R. Smith
Attorney-in-fact
|
Pharmacy Operating Agreement
|
|
Page 2
|
Pharmacy Operating Agreement
|
|
Page 3
|
Pharmacy Operating Agreement
|
|
Page 4
|
Pharmacy Operating Agreement
|
|
Page 5
|
Pharmacy Operating Agreement
|
|
Page 6
|
Pharmacy Operating Agreement
|
|
Page 7
|
Pharmacy Operating Agreement
|
|
Page 8
|
Pharmacy Operating Agreement
|
|
Page 9
|
Pharmacy Operating Agreement
|
|
Page 10
|
Pharmacy Operating Agreement
|
|
Page 11
|
Pharmacy Operating Agreement
|
|
Page 12
|
Pharmacy Operating Agreement
|
|
Page 13
|
Pharmacy Operating Agreement
|
|
Page 14
|
Pharmacy Operating Agreement
|
|
Page 15
|
Pharmacy Operating Agreement
|
|
Page 16
|
Pharmacy Operating Agreement
|
|
Page 17
|
Pharmacy Operating Agreement
|
|
Page 18
|
Pharmacy Operating Agreement
|
|
Page 19
|
Pharmacy Operating Agreement
|
|
Page 20
|
Pharmacy Operating Agreement
|
|
Page 21
|
Pharmacy Operating Agreement
|
|
Page 22
|
Pharmacy Operating Agreement
|
|
Page 23
|
Pharmacy Operating Agreement
|
|
Page 24
|
Pharmacy Operating Agreement
|
|
Page 25
|
Pharmacy Operating Agreement
|
|
Page 26
|
Pharmacy Operating Agreement
|
|
Page 27
|
Pharmacy Operating Agreement
|
|
Page 28
|
Pharmacy Operating Agreement
|
|
Page 29
|
Pharmacy Operating Agreement
|
|
Page 30
|
Pharmacy Operating Agreement
|
|
Page 31
|
Pharmacy Operating Agreement
|
|
Page 32
|
16.
|
Insurance & Waiver of Subrogation
|
17.
|
Indemnification
|
Pharmacy Operating Agreement
|
|
Page 33
|
Pharmacy Operating Agreement
|
|
Page 34
|
18.
|
Term and Termination
.
|
18.3
|
Either Party may terminate this Agreement:
|
Pharmacy Operating Agreement
|
|
Page 35
|
Pharmacy Operating Agreement
|
|
Page 36
|
Pharmacy Operating Agreement
|
|
Page 37
|
19.
|
Effect of Termination and Surrender
.
|
19.1
|
Effect of Termination
.
|
Pharmacy Operating Agreement
|
|
Page 38
|
Pharmacy Operating Agreement
|
|
Page 39
|
Pharmacy Operating Agreement
|
|
Page 40
|
Pharmacy Operating Agreement
|
|
Page 41
|
Pharmacy Operating Agreement
|
|
Page 42
|
Pharmacy Operating Agreement
|
|
Page 43
|
Pharmacy Operating Agreement
|
|
Page 44
|
(i)
|
if to Target,
|
Pharmacy Operating Agreement
|
|
Page 45
|
(ii)
|
if to CVS,
|
Pharmacy Operating Agreement
|
|
Page 46
|
Pharmacy Operating Agreement
|
|
Page 47
|
Pharmacy Operating Agreement
|
|
Page 48
|
Pharmacy Operating Agreement
|
|
Page 49
|
•
|
Medical marijuana
|
•
|
Infusion services
|
1.
|
Charges for which Payment Processing Services are engaged must relate only to valid and legitimate purchases by Patients of CVS Products or Pharmacy Services actually provided at and by the Pharmacy submitting the charges.
|
2.
|
Payment Processing Services can only be used for payment immediately after the purchases for which charges are imposed and cannot be used for past due amounts or amounts billed to a Patient for payment in the future.
|
3.
|
No fees or other charges or conditions will be imposed upon a Patient for the use by a Patient of a credit, debit or pre-paid card to pay at the Target POS in the Pharmacy unless permitted as a Target Operating Standard.
|
4.
|
Prompts on the Target POS equipment provided must be followed.
|
5.
|
Patients will be given a receipt for all payments for which Payment Processing Services are engaged as may be required by applicable payment card network rules.
|
6.
|
Payment Processing Services may not be engaged for cash advances unless permitted as a Target Operating Standard.
|
7.
|
Any and all additional procedures and policies provided by Target to CVS relating to Payment Processing Services, provided such procedures and policies are reasonable or are required by a payment network, acquiring bank, settling bank or any other entity with rights to impose such procedures and policies upon CVS.
|
8.
|
If CVS becomes aware that the Target POS or any portion thereof is lost, stolen, damaged, tampered with or subject to unauthorized use, CVS shall immediately (or cause Pharmacy Personnel to immediately) notify Target of such occurrence. Such notice shall be provided to Target both according to the terms of Section 25.8 and by sending an email to
security@target.com
.
|
Community Solicitations
Use of Store Parking Lots, Sidewalks, Facilities
|
TARGET
CORPORATE POLICIES
|
||
Number:
|
100-50-10
|
Effective:
|
04/2014
|
Sponsor:
|
Assets Protection
|
Supersedes:
|
02/2013
|
No Solicitation/No Distribution by Team Member
|
TARGET
CORPORATE POLICIES
|
||
Number:
|
200-40-13
|
Effective:
|
03/2014
|
Sponsor:
|
Human Resources – Labor Relations
|
Supersedes:
|
11/2009
|
•
|
name and identifying number for all active Pharmacy Personnel,
|
•
|
name and identifying number for all Pharmacy Personnel hired by CVS during the preceding month,
|
•
|
name and identifying number for all Pharmacy Personnel whose employment terminated during the preceding month.
|
1.
|
Commercial general liability, including bodily injury, property damage, personal and advertising injury liability, and contractual liability covering operations, independent contractor and products/completed operations hazards, with limits of not less than $1,000,000 for any one occurrence and $2,000,000 annual aggregate, endorsed to include the other Party, its officers, directors and employees as additional insureds;
|
2.
|
Workers’ compensation as provided for under any workers’ compensation or similar law in the jurisdiction where work is performed with an employer’s liability limit of not less than $500,000 for bodily injury by accident or disease;
|
3.
|
Business auto liability covering ownership, maintenance or use of all owned, hired and non-owned autos used in connection with this Agreement with limits of not less than $1,000,000 combined single limit per accident for bodily injury and property damage liability, endorsed to include the other Party, its officers, directors and employees as additional insureds;
|
4.
|
Umbrella/excess liability with limits of not less than $50,000,000 per occurrence and annual aggregate in excess of the commercial general liability, business auto liability and employer’s liability including the other Party, its officers, directors and employees as additional insureds;
|
5.
|
solely with respect to CVS, professional or druggist liability coverage with limits of not less than $50,000,000 per occurrence, endorsed to include Target, its officers, directors and employees as additional insureds;
|
6.
|
“All Risk” property insurance covering not less than the full replacement cost of the property owned or leased by such Party at the Stores, with a waiver of subrogation in favor of the other Party; and
|
7.
|
Network/Cyber-Liability/E-Commerce insurance covering acts, errors, or omissions arising out of such Party’s obligations under this Agreement in an amount not less than $50,000,000 per occurrence and $100,000,000 annual
|
1.
|
Consideration
. In exchange for entering into this Agreement, Target agrees to pay Ms. Tyler the total amount of Three Million Dollars ($3,000,000) (the “Consideration”). Target will pay this amount, less applicable withholdings as determined by Target, as follows: (1) in one increment of One Million Dollars ($1,000,000) paid on or about January 13, 2017, (2) in one increment of One Million Dollars ($1,000,000) paid on or about January 12, 2018, and (3) in one increment of One Million Dollars ($1,000,000) paid on or about January 11, 2019.
|
2.
|
Target Employment
. Nothing in this Agreement alters the nature, status or termination of Ms. Tyler’s employment with Target.
|
3.
|
Ms. Tyler’s Covenant
. In consideration of this Agreement, and in recognition of the facts that, as a result of her employment with Target, Ms. Tyler has had access to and gained knowledge of confidential and/or proprietary information or trade secrets pertaining to Target, has been identified with its good will within the retail industry and corporate community, has developed strong relationships with other Target employees whom Target wishes to retain, and that Target has expended time, resources and money to obtain or develop these protectable interests, all of which have significant value to Target, Ms. Tyler agrees for the benefit of Target, and as a material condition to her receipt of the consideration described in Paragraph 1, as follows:
|
a.
|
Non-Competition
. Ms. Tyler will not, during her employment and for a period of three (3) years following the date of her termination from Target, perform services directly or indirectly (including as an employee, independent contractor, consultant, officer, director, or similar relationship), to Amazon.com, Inc.; Best Buy Co., Inc.; Costco Wholesale Corporation; CVS Health Corporation; Dollar General Corporation; The Gap, Inc.; The Home Depot, Inc.; J.C. Penney Company, Inc.; Kohl’s Corporation; The Kroger Co.; Lowe’s Companies; Macy’s, Inc.; Publix Super Markets, Inc.; Rite Aid Corporation; Safeway Inc.; Sears Holdings Corporation; Staples, Inc.; The TJX Companies, Inc.; Walgreens Boots Alliance, Inc.; and Wal-Mart Stores, Inc.; or any parent, subsidiary, division, or affiliate of any such company (examples of affiliates include entities under common control, joint venture partners and e-commerce affiliates) (“Competitive Entities”). Ms. Tyler expressly agrees that due to the nature of the confidential and/or proprietary information to which she has had access, and her position as a representative identified with the company’s good will while a Target employee, the three (3) year world-wide restriction on her ability to work for the Competitive Entities set forth above is reasonable and appropriate. Restrictions on Ms. Tyler’s ability to work for the entities set forth above may be modified or waived at any time at the discretion of Brian Cornell, or the then-acting Chief Executive Officer, in accordance with the procedure described in Paragraph 8. Any such waiver or modification must be made in writing.
|
b.
|
Non-Solicitation
. Ms. Tyler will not, during her employment and for a period of three (3) years following the date of her termination from Target, recruit, solicit or entice, directly or indirectly, for employment or performance of services, any employee of Target or any of its affiliated companies, unless Ms. Tyler has a written agreement signed by the Executive Vice President of Human Resources, in accordance with the procedure described in Paragraph 8, allowing Ms. Tyler to recruit persons named in that agreement.
|
c
.
|
Confidentiality
.
|
(i)
|
Ms.Tyler acknowledges and agrees that confidential information of Target and any of its affiliates is a valuable, special and unique asset. Such confidential information includes without limitation:
|
(A)
|
employee data and information (including, but not limited to, personnel decisions relating to employees and applicants), and
|
(B)
|
present, past and future strategies, plans, and proposals (including but not limited to, customer, marketing, merchandising, sourcing, store operations, technology, assets protection, distribution, benefits and compensation strategies, plans and proposals), and
|
(C)
|
financial information, and
|
(D)
|
present, past and future personnel and labor relations strategies, plans, practices, policies, training programs and goals.
|
(ii)
|
Ms.Tyler will not, during or after the date of her termination from Target, use or disclose or cause or permit to be used or disclosed any such information or any other information Target treats as confidential, to any person, firm, corporation, association or other entity for any reason or purpose whatsoever. For avoidance of doubt, nothing in this Agreement shall prohibit Ms. Tyler from communicating with a government agency, regulator or legal authority concerning any possible violations of federal or state law or regulation; however, Ms. Tyler is not authorized to share communications covered and protected from disclosure by Target’s attorney-client privilege.
|
d.
|
Consultation and Cooperation
. Following the date of her termination from Target, Target may request that Ms. Tyler consult or cooperate (including, without limitation, providing truthful information to Target or serving as a witness or testifying at Target’s request without subpoena), and Ms. Tyler agrees to be available at mutually agreeable times to perform such duties and provide such cooperation in connection with the various business and legal matters in which Ms. Tyler was involved or of which Ms. Tyler has knowledge as result of her employment with Target. In so consulting or cooperating, Ms. Tyler shall be reimbursed her reasonable out-of-pocket expenses.
|
e.
|
Remedies for Breach of These Covenants
.
|
(i)
|
Ms.Tyler acknowledges that any breach of the covenants in Paragraph 3 will cause irreparable harm to Target for which money damages could not reasonably or adequately compensate Target. Accordingly, Target shall be entitled to seek all available forms of injunctive relief (whether temporary, preliminary, or permanent) to enforce the covenant, in addition to repayment of any consideration provided hereunder by Target to the date of breach, damages recoverable by law and all other available remedies. Ms. Tyler consents to the issuance of injunctive relief without the necessity of Target posting a bond or, if a court requires a bond to be posted, with a bond of no greater than Five Hundred Dollars ($500) in principal amount.
|
(ii)
|
In addition to any other remedies available to Target, in the event Ms. Tyler breaches any of her obligations under Paragraphs 3.a., b., c., or d. of this Agreement, then Target (A) will be relieved of all liability and obligation to make any further payments under this Agreement, and (B) may demand the return of any payments previously paid to Ms. Tyler under this Agreement.
|
4.
|
Extension of Covenants
. Ms. Tyler agrees that if she violates any of the covenants in Paragraph 3, the restrictions therein shall be extended for the amount of time during which a court determines that she was in violation of that Paragraph.
|
5.
|
Enforceability
. If any one or more of the provisions of this Agreement is held invalid, illegal, or unenforceable in any respect, such provision shall be severable, and the
|
6.
|
Assignment
. The parties agree that the rights and obligations under this Agreement shall inure to and be binding on Target, and its successors and assigns, but the rights and obligations of Ms. Tyler under this Agreement are personal and may not be assigned to any other person or entity. However, if Ms. Tyler dies before all the Consideration is paid, the remaining Consideration will be paid to her estate.
|
7.
|
Counterparts
. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
|
8.
|
Amendment; Waivers
. This Agreement may not be modified, amended, waived or discharged in any manner except by an instrument in writing signed by both parties hereto. The execution of any such modification, amendment or waiver shall be in the sole discretion of an authorized officer of Target. The waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.
|
9.
|
Entire Agreement
. This Agreement embodies the entire agreement and understanding between Target and Ms. Tyler pertaining to the payment of the consideration described in Paragraph 1 hereof. For the sake of clarity, Target and Ms. Tyler have simultaneously executed an Income Continuance Agreement which contains parallel covenants. The Income Continuance Agreement is supported by independent consideration and is intended to operate separately and independently of this Agreement.
|
10.
|
Code Section 409A
. For all purposes under Section 409A of the Internal Revenue Code (“Section 409A), each payment under this Agreement shall be treated as a separate payment. It is the intention of the parties that the January 13, 2017, payment be exempt from the requirements of Section 409A because it is a short term deferral under Treas. Reg. Sec. 1.409A-1(b)(4), and that the balance of the payments, are intended to comply both in form and operation with the requirements of Section 409A, and this Agreement will be construed and administered in a manner consistent with such intent. Target reserves the right to adopt such rules, regulations or procedures that are deemed necessary or appropriate to comply with the requirements of Section 409A. Any payments that are subject to the requirements of Section 409A may be accelerated or delayed only if and to the extent otherwise permitted under Section 409A.
|
11.
|
Reporting
. Until all Consideration is paid pursuant to this Agreement, Ms. Tyler shall promptly inform Target of the name and business address of each business or person for which Ms. Tyler performs services, and shall provide a summary description of the nature and principal business locations of each such business or person. Ms. Tyler shall also provide her title, principal duties, address and phone number. Significant changes to employment, services, duties or location must be promptly reported. Such
|
12.
|
Governing Law
. This Agreement will be construed and interpreted in accordance with the laws of the State of Minnesota as interpreted by Minnesota state and federal courts.
|
13.
|
Jurisdiction
. Any action or proceeding seeking to enforce or interpret any provision of, or based upon any right arising out of, this Agreement may be brought against any of the parties in the federal or state courts located in Minneapolis, Minnesota, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding, and waives any objection to venue therein.
|
14.
|
Effective Date
. This Agreement shall be effective on the earliest date it is executed by all parties hereto (the “Effective Date”).
|
15.
|
Authorization
. Target affirms that this Agreement is duly authorized by all necessary parties.
|
Dated: January 19, 2016
|
/s/ Tina Tyler
TINA TYLER
|
Dated: January 27, 2016
|
TARGET CORPORATION
By:
/s/ Jodee Kozlak
Its:
CHRO
|
Dated: January 27, 2016
|
TARGET ENTERPRISE, INC.
By:
/s/ Jodee Kozlak
Its:
CHRO
|
Ratio of Earnings to Fixed Charges
|
|
Fiscal Year Ended
|
|||||||||
(dollars in millions)
|
|
January 30, 2016
|
|
January 31, 2015
|
|
February 1, 2014
|
|
February 2, 2013
|
|
January 28, 2012
|
|
Earnings from continuing operations before income taxes
|
|
$4,923
|
$3,653
|
$4,121
|
$5,056
|
$4,621
|
|||||
Capitalized interest, net
|
|
16
|
|
(1
|
)
|
(14
|
)
|
(12
|
)
|
6
|
|
Adjusted earnings from continuing operations before income taxes
|
|
4,939
|
|
3,652
|
|
4,107
|
|
5,044
|
|
4,627
|
|
Fixed charges:
|
|
|
|
|
|
|
|||||
Interest expense
(a)
|
|
616
|
|
619
|
|
641
|
|
721
|
|
750
|
|
Interest portion of rental expense
|
|
108
|
|
108
|
|
108
|
|
106
|
|
110
|
|
Total fixed charges
|
|
724
|
|
727
|
|
749
|
|
827
|
|
860
|
|
Earnings from continuing operations before income taxes and fixed charges
|
|
$5,663
|
$4,379
|
$4,856
|
$5,871
|
$5,487
|
|||||
Ratio of earnings to fixed charges
|
|
7.82
|
|
6.02
|
|
6.48
|
|
7.10
|
|
6.38
|
|
(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.
|
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/s/ Roxanne S. Austin
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Roxanne S. Austin
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/s/ Douglas M. Baker, Jr.
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Douglas M. Baker, Jr.
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/s/ Brian C. Cornell
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Brian C. Cornell
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/s/ Calvin Darden
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Calvin Darden
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/s/ Henrique De Castro
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Henrique De Castro
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/s/ Robert L. Edwards
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Robert L. Edwards
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/s/ Melanie L. Healey
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Melanie L. Healey
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/s/ Donald R. Knauss
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Donald R. Knauss
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/s/ Monica Lozano
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Monica Lozano
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/s/ Mary E. Minnick
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Mary E. Minnick
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/s/ Anne M. Mulcahy
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Anne M. Mulcahy
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/s/ Derica W. Rice
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Derica W. Rice
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/s/ Kenneth L. Salazar
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Kenneth L. Salazar
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/s/ John G. Stumpf
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John G. Stumpf
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1.
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I have reviewed this Annual Report on Form 10-K of Target Corporation;
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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a.
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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
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b.
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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.
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Date: March 11, 2016
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/s/ Brian C. Cornell
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Brian C. Cornell
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Chairman and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of Target Corporation;
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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a.
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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
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b.
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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.
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Date: March 11, 2016
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/s/ Catherine R. Smith
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Catherine R. Smith
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Executive Vice President and Chief Financial Officer
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Date: March 11, 2016
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/s/ Brian C. Cornell
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Brian C. Cornell
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Chairman and Chief Executive Officer
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Date: March 11, 2016
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/s/ Catherine R. Smith
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Catherine R. Smith
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Executive Vice President and Chief Financial Officer
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