TARGET CORP (Form: 10-K, Received: 04/11/2005 17:18:12)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 29, 2005
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from _______________ to _______________

Commission File Number 1-6049

TARGET CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota		41-0215170
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1000 Nicollet Mall, Minneapolis, Minnesota		55403
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 612/304-6073

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

	Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $.0833 per share		New York Stock Exchange Pacific Exchange
Preferred Share Purchase Rights		New York Stock Exchange Pacific Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes x No o

Aggregate market value of the voting stock held by non-affiliates of the Registrant on July 31, 2004 was $39,300,535,713, based on the closing price of $43.60 per share of Common Stock as reported on the New York Stock Exchange—Composite Index. (Excluded from this figure is the voting stock held by Registrant’s Directors and Executive Officers.)

Indicate the number of shares outstanding of each of Registrant’s classes of Common Stock, as of the latest practicable date. March 21, 2005: 885,553,006 shares of Common Stock, par value $.0833.

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of Target’s 2004 Annual Report to Shareholders are incorporated into Parts I, II and IV.

2. Portions of Target’s Proxy Statement filed on April 11, 2005 are incorporated into Part III. (The Report of the Compensation Committee, the Report of the Audit Committee and the stock performance graph contained in Target’s Proxy Statement are expressly not incorporated by reference in this Form 10-K.)

PART I

Item 1. Business.

Executive Summary, Page 17; the first two paragraphs of Analysis of Continuing Operations, Page 17; Analysis of Financial Condition, Pages 19-21; Credit Card Contribution, Page 18; first textual paragraph of Summary of Accounting Policies—Organization, Page 28; Quarterly Results (Unaudited), Page 37; the number of stores by state, inside back cover; the information relating to total stores, inside front cover under Financial Highlights—Continuing Operations, excluding years 2000-2001, and Discontinued Operations, Pages 21 and 29, of Target’s 2004 Annual Report to Shareholders are incorporated herein by reference. Target was incorporated in Minnesota in 1902. At the end of fiscal 2004, Target employed approximately 292,000 people.

Competition

Target’s retail merchandising business is conducted under highly competitive conditions in the discount segment. Its stores compete with national and local department, specialty, off-price, discount, grocery and drug store chains, independent retail stores and Internet businesses which handle similar lines of merchandise. Target also competes with other companies for new store sites.

Target believes the principal methods of competing in its industry include brand recognition, customer service, store location, differentiated offerings, value, quality, fashion, price, advertising, depth of selection and credit availability. Target is a leader in supporting the communities in which it does business and believes that it has a competitive advantage with regard to these competitive factors.

Available Information

Target’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at www.target.com (click on “Investors” and “Financial Reports & Filings”) as soon as reasonably practicable after we file such material with, or furnish it to, the SEC. Target’s Corporate Governance Profile, Business Conduct Guide and the position descriptions for Target’s Board of Directors and Board committees are also available free of charge in print upon request or at www.target.com (click on “Investors” and “Corporate Governance”).

Item 2. Properties.

Leases, Page 32; and the number of stores by state, inside back cover of Target’s 2004 Annual Report to Shareholders are incorporated herein by reference.

Item 3. Legal Proceedings.

Commitments and Contingencies, Page 31, of Target’s 2004 Annual Report to Shareholders is incorporated herein by reference.

Item 4. Submission of Matters to a Vote of Security Holders.

Not Applicable.

Item X. Executive Officers.

The executive officers of Target as of March 21, 2005 and their positions and ages, are as follows:

Name		Title	Age
Robert J. Ulrich	Chairman of the Board, Chief Executive Officer, Chairman of the Executive Committee and Director		61
Timothy R. Baer	Senior Vice President, General Counsel and Corporate Secretary		44
Todd V. Blackwell	Executive Vice President, Human Resources, Assets Protection and TSS/AMC		43
Bart Butzer	Executive Vice President, Stores		48
Michael R. Francis	Executive Vice President, Marketing		42
John D. Griffith	Executive Vice President, Property Development		43
Douglas A. Scovanner	Executive Vice President and Chief Financial Officer		49
Terrence J. Scully	President, Target Financial Services		52
Paul L. Singer	Senior Vice President, Technology Services and Chief Information Officer		51
Gregg W. Steinhafel	President		50
Gerald L. Storch	Vice Chairman		48

Each officer is elected by and serves at the pleasure of the Board of Directors. There is no family relationship between any of the officers named nor is there any arrangement or understanding pursuant to which any person was selected as an officer. The period of service of each officer in the positions listed and other business experience as of March 21, 2005 is set forth below.

Robert J. Ulrich Chairman of the Board, Chief Executive Officer, Chairman of the Executive Committee and Director of Target since April 1994.

Timothy R. Baer Senior Vice President, General Counsel and Corporate Secretary since June 2004. Senior Vice President from April 2004 to May 2004. Vice President from February 2002 to March 2004. Assistant General Counsel from July 1994 to January 2002.

Todd V. Blackwell Executive Vice President, Human Resources, Assets Protection and TSS/AMC since February 2003. Senior Vice President, Human Resources of Target from September 2000 to February 2003. Senior Vice President, Stores of Mervyn’s (a former subsideriary of Target) from December 1998 to September 2000.

Bart Butzer Executive Vice President, Stores since April 2001. President of Mervyn’s from March 1997 to April 2001.

Michael R. Francis Executive Vice President, Marketing since February 2003. Senior Vice President, Marketing from January 2001 to February 2003. Senior Vice President, Marketing and Visual Merchandising of Marshall Field’s (a former division of Target) from April 1996 to January 2001.

John D. Griffith Executive Vice President, Property Development since February 2005. Senior Vice President, Property Development from February 2000 to January 2005. Vice President, Construction from January 1999 to February 2000.

Douglas A. Scovanner Executive Vice President and Chief Financial Officer since February 2000. Senior Vice President and Chief Financial Officer from June 1994 to February 2000.

Terrence J. Scully President, Target Financial Services since March 2003. Vice President, Target Financial Services, from April 1998 to February 2003.

Paul L. Singer Senior Vice President, Technology Services and Chief Information Officer since April 2000. Senior Vice President, Information Services from February 1999 to April 2000.

Gregg W. Steinhafel President since August 1999.

Gerald L. Storch Vice Chairman since January 2001. President, Financial Services and New Businesses from May 1998 to January 2001.

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

The following table presents information with respect to purchases of Target common stock made during the three months ended January 29, 2005, by Target or any “affiliated purchaser” of Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.

Period	Total Number of Shares Purchased(2)		Average Price Paid per Share(2)			Total Number of Shares Purchased as Part of Publicly Announced Program(1)(2)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(1)
October 31, 2004 through November 27, 2004		—		$	—		22,429,359	$	2,024,662,600
November 28, 2004 through January 1, 2005		—		—			22,429,359	2,024,662,600
January 2, 2005 through January 29, 2005		6,057,000		49.51			28,486,359	1,724,763,665
Total		6,057,000		$	49.51		28,486,359	$1,724,763,665

(1) In June of 2004, our Board of Directors authorized the repurchase of $3 billion of our common stock. The repurchase of our common stock is expected to be made primarily in open market transactions, subject to market conditions, and is expected to be completed over two to three years. Since the inception of this share repurchase program, we have repurchased a total of approximately 28 million shares of our common stock at a total cost of approximately $1,275 million ($44.77 per share).

(2) In addition to shares purchased under our share repurchase program, we acquire shares of common stock held by employees who wish to tender owned shares to satisfy the exercise price on option exercises or tax withholding on equity awards as part of our long-term incentive plans. From October 31, 2004 through January 29, 2005, there were no such repurchases.

Dividends declared per share and Closing common stock price, Page 37, of Target’s 2004 Annual Report to Shareholders are incorporated herein by reference.

Item 6. Selected Financial Data.

Total revenues, Earnings before income taxes, Per share data, Total assets and Long-term debt, excluding 1999 information, Page 16, of Target’s 2004 Annual Report to Shareholders are incorporated herein by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis, Pages 17-23; and the second textual paragraph of Pension and Postretirement Health Care Benefits—Assumptions, Page 36, of Target’s 2004 Annual Report to Shareholders are incorporated herein by reference.

Item 7a. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk, Page 21; and Derivatives, Page 32, of Target’s 2004 Annual Report to Shareholders are incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.

Pages 24-37; and the Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements, Page 38, of Target’s 2004 Annual Report to Shareholders are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not Applicable.

Item 9a. Controls and Procedures.

As of the end of the period covered by this annual report, Target conducted an evaluation, under supervision and with the participation of management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of Target’s disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based upon that evaluation, Target’s chief executive officer and chief financial officer concluded that Target’s disclosure controls and procedures are effective. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the Securities and Exchange Commission (“SEC”) under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

The Report of Management on Internal Control and the Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting, Page 38, of Target’s 2004 Annual Report to Shareholders, are incorporated herein by reference.

Item 9b. Other Information.

Not applicable.

PART III

Certain information required by Part III is incorporated by reference from Target’s definitive Proxy Statement filed on April 11, 2005. Except for those portions specifically incorporated in this Form 10-K by reference to Target’s Proxy Statement, no other portions of the Proxy Statement are deemed to be filed as part of this Form 10-K.

Item 10. Directors and Executive Officers of the Registrant.

Election of Directors, Pages 5-27; Audit Committee, Page 27; Section 16(a) Beneficial Ownership Reporting Compliance, Page 30; and Business Ethics and Conduct, Page 29, of Target’s Proxy Statement filed on April 11, 2005, are incorporated herein by reference. See also Item X of Part I hereof.

Item 11. Executive Compensation.

Executive Compensation, Pages 15-21; and Director Compensation, Page 8, of Target’s Proxy Statement filed on April 11, 2005, are incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plan Information

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)			(b)			(c)
Equity compensation plans approved by security holders		33,598,674	(1)		$	32.59		51,560,249
Equity compensation plans not approved by security holders		0			—			0
Total		33,598,674			$	32.59		51,560,249

(1) This amount includes 482,490 performance shares granted in fiscal 2002, 496,084 performance shares granted in fiscal 2003 and 628,785 performance shares granted in fiscal 2004, which represent the maximum number of shares issuable pursuant to outstanding performance awards under Target’s Long-Term Incentive Plan. The actual number of performance shares that will be issued, if any, depends on Target’s financial performance over a period of time. Performance shares do not have an exercise price and thus they have been excluded from the weighted-average exercise price calculation in column (b).

Largest Owners of Target’s Shares, Page 14; and Share Ownership of Directors and Officers, Pages 13-14, of Target’s Proxy Statement filed on April 11, 2005, are incorporated by reference.

Item 13. Certain Relationships and Related Transactions.

Not Applicable.

Item 14. Principal Accounting Fees and Services.

Audit and Non-audit Fees, Page 28, of Target’s Proxy Statement filed on April 11, 2005, is incorporated herein by reference.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

a) Financial Statements

Consolidated Results of Operations for the Years Ended January 29, 2005, January 31, 2004 and February 1, 2003.

Consolidated Statements of Financial Position at January 29, 2005 and January 31, 2004.

Consolidated Statements of Cash Flows for the Years Ended January 29, 2005, January 31, 2004 and February 1, 2003.

Consolidated Statements of Shareholders’ Investment for the Years Ended January 29, 2005,
January 31, 2004 and February 1, 2003.

Notes to Consolidated Financial Statements, Pages 28-37, of Target’s 2004 Annual Report to Shareholders.

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements, Page 38, of Target’s 2004 Annual Report to Shareholders.

Target, through its special purpose subsidiary, Target Receivables Corporation (“TRC”), has entered into a securitization transaction under which it transfers, on an ongoing basis, substantially all of its credit card receivables to a trust. Separate financial information is filed for TRC in its separate Annual Report on Form 10-K.

Financial Statement Schedule

For the Years Ended January 29, 2005, January 31, 2004 and February 1, 2003.

II—Valuation and Qualifying Accounts.

Other schedules have not been included either because they are not applicable or because the information is included elsewhere in this Report.

b) Exhibits

(3)A.		Restated Articles of Incorporation (as amended January 9, 2002) (1)
B.		By-Laws (as amended through November 11, 1998) (2)
(4)A.		Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, as amended (3)
B.		Amended and Restated Rights Agreement, dated as of August 5, 2002, between the Registrant and Mellon Investor Services LLC, as Rights Agent (4)
C.		Registrant agrees to furnish to the Commission on request copies of instruments with respect to long-term debt.
(10)A.	*	Executive Short-Term Incentive Plan (5)
B.	*	Director Stock Option Plan of 1995 (6)
C.	*	Supplemental Pension Plan I (7)
D.	*	Executive Long-Term Incentive Plan of 1981 (8)
E.	*	Supplemental Pension Plan II (9)
F.	*	Supplemental Pension Plan III (10)
G.	*	Deferred Compensation Plan Senior Management Group (11)

H.	*	Deferred Compensation Plan Directors (12)
I.	*	Income Continuance Policy Statement (13)
J.	*	SMG Income Continuance Policy Statement (14)
K.	*	SMG Executive Deferred Compensation Plan (15)
L.	*	Director Deferred Compensation Plan (16)
M.	*	Executive Excess Long-Term Disability Plan (17)
N.	*	Long-Term Incentive Plan (18)
O.	*	Director Retirement Program
(12)		Statements re: Computations of Ratios
(13)		2004 Annual Report to Shareholders (only those portions specifically incorporated by reference herein shall be deemed filed with the Commission)
(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
(99)A.		Registrant’s Form 11-K Report for the year ended December 31, 2004
C.		Cautionary Statements Relating to Forward-Looking Information

Copies of exhibits will be furnished upon written request and payment of Registrant’s reasonable expenses in furnishing the exhibits.

*		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 (3)A to Target’s Form 10-K Report for the year ended February 2, 2002.
(2)		Incorporated by reference to Exhibit (3)(ii) to Target’s Form 10-Q Report for the quarter ended October 31, 1998.
(3)		Incorporated by reference to Exhibit A to Exhibit 1 to Target’s Registration Statement on Form 8-A dated September 19, 2001.
(4)		Incorporated by reference to Exhibit 10 to Target’s Form 10-Q Report for the quarter ended August 3, 2002.
(5)		Incorporated by reference to Exhibit (10)A to Target’s Form 10-K Report for the year ended February 2, 2002.
(6)		Incorporated by reference to Exhibit (10)C to Target’s Form 10-Q Report for the quarter ended August 2, 2003.

(7)		Incorporated by reference to Exhibit 10(E) to Target’s Form 10-K Report for the year ended February 1, 1997, and Amendment thereto, incorporated by reference to Exhibit (10)G to Target’s Form 10-Q Report for the quarter ended November 2, 2002.
(8)		Incorporated by reference to Exhibit (10)B to Target’s Form 10-Q Report for the quarter ended August 2, 2003.
(9)		Incorporated by reference to Exhibit (10)G to Target’s Form 10-K Report for the year ended February 1, 1997, and Amendment thereto, incorporated by reference to Exhibit (10)G to Target’s Form 10-Q Report for the quarter ended November 2, 2002.
(10)		Incorporated by reference to Exhibit 10(H) to Target’s Form 10-K Report for the year ended February 1, 1997, and Amendment thereto, incorporated by reference to Exhibit 10(G) to Target’s Form 10-Q Report for the quarter ended November 2, 2002.
(11)		Incorporated by reference to Exhibit (10)G to Target’s Form 10-K Report for the year ended February 1, 2003.
(12)		Incorporated by reference to Exhibit (10)H to Target’s Form 10-K Report for the year ended February 1, 2003.
(13)		Incorporated by reference to Exhibit (10)K to Target’s Form 10-K Report for the year ended January 30, 1999.
(14)		Incorporated by reference to Exhibit (10)L to Target’s Form 10-K Report for the year ended January 30, 1999.
(15)		Incorporated by reference to Exhibit 4.4 to Target’s Registration Statement on Form S-8 (File No. 333-75782) filed on December 21, 2001 and Amendment thereto, incorporated by reference to Exhibit (10)F to Target’s Form 10-Q for the quarter ended November 2, 2002.
(16)		Incorporated by reference to Exhibit 4.2 to Target’s Registration Statement on Form S-8 (File No. 333-75782) filed on December 21, 2001.
(17)		Incorporated by reference to Exhibit (10)O to Target’s Form 10-K Report for the year ended February 3, 2001.
(18)		Incorporated by reference to Appendix B of Target’s Proxy Statement filed on April 5, 2004.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Target has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TARGET CORPORATION
	By:	/s/ DOUGLAS A. SCOVANNER
		Douglas A. Scovanner
Dated: April 11, 2005		Executive Vice President, Chief Financial Officer and Chief Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the report has been signed below by the following persons on behalf of Target and in the capacities and on the dates indicated.

		/s/ ROBERT J. ULRICH
		Robert J. Ulrich
Dated: April 11, 2005		Chairman of the Board and Chief Executive Officer
		/s/ DOUGLAS A. SCOVANNER
		Douglas A. Scovanner
Dated: April 11, 2005		Executive Vice President, Chief Financial Officer and Chief Accounting Officer

ROXANNE S. AUSTIN	STEPHEN W. SANGER
CALVIN DARDEN	WARREN R. STALEY
MICHELE J. HOOPER	GEORGE W. TAMKE
JAMES A. JOHNSON	SOLOMON D. TRUJILLO
RICHARD M. KOVACEVICH	ROBERT J. ULRICH	Directors
ANNE M. MULCAHY

Douglas A. Scovanner, by signing his name hereto, does hereby sign this document pursuant to powers of attorney duly executed by the Directors named, filed with the Securities and Exchange Commission on behalf of such Directors, all in the capacities and on the date stated.

	By:	/s/ DOUGLAS A. SCOVANNER
		Douglas A. Scovanner
Dated: April 11, 2005		Attorney-in-fact

TARGET CORPORATION
Schedule II - Valuation and Qualifying Accounts
Fiscal Years 2004, 2003 and 2002

(Millions of Dollars)

Column A	Column B			Column C			Column D			Column E
Description	Balance at beginning of Period			Additions charged to cost, expenses, revenues			Deductions			Balance at end of period
Accounts receivable reserves:
2004		$	352		$	451		$(416	)		$	387
2003		$	320		$	476		$(444	)		$	352
2002		$	180		$	391		$(251	)		$	320

EXHIBIT INDEX

Exhibit	Description	Manner of Filing
(3)A.	Restated Articles of Incorporation (as amended January 9, 2002)	Incorporated by Reference

(3)B.	By-Laws (as amended through November 11, 1998)	Incorporated by Reference

(4)A.	Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, as amended	Incorporated by Reference

(4)B.	Amended and Restated Rights Agreement, dated as of August 5, 2002 between the Registrant and Mellon Investor Services LLC., as Rights Agent	Incorporated by Reference

(10)A.	Executive Short-Term Incentive Plan	Incorporated by Reference

(10)B.	Director Stock Option Plan of 1995	Incorporated by Reference

(10)C.	Supplemental Pension Plan I	Incorporated by Reference

(10)D.	Executive Long-Term Incentive Plan of 1981	Incorporated by Reference

(10)E.	Supplemental Pension Plan II	Incorporated by Reference

(10)F.	Supplemental Pension Plan III	Incorporated by Reference

(10)G.	Deferred Compensation Plan Senior Management Group	Incorporated by Reference

(10)H.	Deferred Compensation Plan Directors	Incorporated by Reference

(10)I.	Income Continuance Policy Statement	Incorporated by Reference

(10)J.	SMG Income Continuance Policy Statement	Incorporated by Reference

(10)K.	SMG Executive Deferred Compensation Plan	Incorporated by Reference

(10)L.	Director Deferred Compensation Plan	Incorporated by Reference

(10)M.	Executive Excess Long-Term Disability Plan	Incorporated by Reference

(10)N.	Long-Term Incentive Plan	Incorporated by Reference

(10)O.	Director Retirement Program	Filed Electronically

(12)	Statements re: Computations of Ratios	Filed Electronically

(13)	2004 Annual Report to Shareholders	Filed Electronically

(21)	List of Subsidiaries	Filed Electronically

(23)	Consent of Independent Registered Public Accounting Firm	Filed Electronically

(24)	Powers of Attorney	Filed Electronically

(31)A.	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Electronically

(31)B.	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Electronically

(32)A.	Certification of the Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed Electronically

(32)B.	Certification of the Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed Electronically

(99)A.	Registrant’s Form 11-K Report for the year ended December 31, 2004	Filed Electronically

(99)C.	Cautionary Statements Relating to Forward-Looking Information	Filed Electronically

Exhibit 10.O

Exhibit O.

Description of Director Retirement Program

Non-management directors who were elected prior to 1997 remain eligible to receive a one-time payment under our Director Retirement Program, which was terminated at the end of 1996. The amount of the payment is equal to the present value of the product of the annual director’s fee in effect in 1996 ($25,000) and the number of years of service through 1996. The discount rate used to calculate the present value is a corporate bond benchmark index in effect at the end of the year prior to the year in which an eligible director retires. The payment is made in February of the year following retirement.

Exhibit 12

TARGET CORPORATION
Computations of Ratios of Earnings to Fixed Charges for the
Twelve Months Ended January 29, 2005 and January 31, 2004
and for the Five Years Ended January 29, 2005

(Millions of Dollars)

	Fiscal Year Ended
	Jan. 29,			Jan. 31,			Feb. 1,			Feb. 2,			Feb. 3,
	2005			2004			2003			2002			2001
Ratio of Earnings to Fixed Charges:
Earnings:
Net earnings	$	3,198		$	1,809		$	1,623		$	1,340		$	1,247
Earnings from discontinued operations, net of tax	(75		)	(190		)	(247		)	(239		)	(285		)
Gain on disposal of discontinued operations, net of tax	(1,238		)	—			—			—			—
Provision for income taxes	1,146			984			851			675			600
Earnings from continuing operations before income tax	3,031			2,603			2,227			1,776			1,562
Fixed charges:
Interest expense	607			569			618			517			465
Interest portion of rental expense	85			68			48			50			63
Total fixed charges	692			637			666			567			528
Less:
Capitalized interest	(18		)	(8		)	(13		)	(33		)	(31		)
Fixed charges in earnings	674			629			653			534			497
Earnings available for fixed charges	$	3,705		$3,232			$	2,880		$2,310			$2,059
Ratio of earnings to fixed charges	5.35			5.07			4.33			4.07			3.90

Note: Computation is based on continuing operations.

Exhibit 13

Financial Highlights – Continuing Operations

Year-end 2004 Store Count and Square Footage by State

	No. of
Market Share Group	Stores	Retail Sq Ft.
		(in thousands)
10%+ Market Share
Arizona	39	4,618
California	193	23,895
Colorado	30	4,039
Illinois	71	9,233
Iowa	21	2,833
Maryland	28	3,494
Minnesota	63	8,373
Nebraska	11	1,397
New Jersey	32	4,137
North Dakota	4	505
Group Total	492	62,524

7.5%-9.9% Market Share
Florida	83	10,604
Georgia	40	5,126
Indiana	34	4,252
Kansas	16	2,188
Massachusetts	20	2,512
Montana	7	767
Nevada	14	1,736
New York	44	5,880
North Carolina	34	4,226
Rhode Island	2	254
South Dakota	4	417
Texas	114	14,964
Utah	9	1,428
Virginia	35	4,508
Washington	31	3,573
Wisconsin	31	3,590
Group Total	518	66,025

5.0%-7.4% Market Share
Connecticut	9	1,199
Delaware	2	268
Michigan	51	5,727
Missouri	26	3,369
New Hampshire	5	649
New Mexico	8	872
Ohio	47	5,648
Oregon	17	2,029
Pennsylvania	31	3,956
South Carolina	17	2,097
Tennessee	23	2,723
Group Total	236	28,537

2.5%-4.9% Market Share
Alabama	10	1,540
Idaho	5	536
Kentucky	12	1,360
Louisiana	11	1,552
Maine	2	250
Oklahoma	10	1,273
Wyoming	2	187
Group Total	52	6,698

0.0%-2.4% Market Share
Arkansas	4	492
Mississippi	3	364
Vermont	0	0
West Virginia	3	375
Group Total	10	1,231
Total	1,308	165,015

For purposes of this schedule, market share is defined as Target sales by state as a percentage of U.S. General Merchandise Store sales, including department stores, discount stores, supercenters and warehouse clubs. See map on page 3. For other purposes, broader or narrower measures of market share may be more appropriate.

FINANCIAL SUMMARY – CONTINUING OPERATIONS

	2004		2003		2002		2001		2000

Total revenues	$	46,839	$	42,025	$	37,410	$	33,021	$	29,740

Earnings before income taxes	$	3,031	$	2,603	$	2,227	$	1,776	$	1,562

Per Share:

Basic earnings per share	$	2.09	$	1.78	$	1.52	$	1.22	$	1.06

Diluted earnings per share	$	2.07	$	1.76	$	1.51	$	1.21	$	1.06

Cash dividends declared	$	0.310	$	0.270	$	0.240	$	0.225	$	0.215

Financial Position: (in millions)

Total assets	$	32,293	$	27,390	$	24,506	$	19,808	$	15,349

Long-term debt	$	9,034	$	10,155	$	10,119	$	8,055	$	5,598

MANAGEMENT’S DISCUSSION AND ANALYSIS

Executive Summary

Target Corporation operates large-format general merchandise discount stores in the United States and a much smaller, rapidly growing on-line business. We drive incremental merchandise sales and profitability through increases in our comparable-store sales and through contributions from new stores. Additionally, our credit card operations represent an integral component of our retail business. We focus on delighting our guests by offering both everyday essentials and fashionable, differentiated merchandise at exceptional prices. Our ability to deliver a shopping experience that is preferred by our guests is supported by our strong supply chain and technology network, a devotion to innovation which is ingrained in our organization and culture, and our disciplined approach to managing our current business and investing in future growth. Although our industry is highly competitive and subject to macro-economic conditions, we believe we are well-positioned to deliver continued profitable market share growth for many years to come.

In 2004, we completed the disposition of two segments of our business, Marshall Field’s and Mervyn’s, and recorded a total gain on the sale of $1,999 million ($1.36 per share). As a result, our current and prior year financial statements have been restated to reflect the results of these businesses as discontinued operations. See Notes to Consolidated Financial Statements on page 29. Also during 2004, we elected to adopt the provisions of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R) under the modified retrospective transition method. All prior period financial statements have been restated to recognize compensation cost in the amounts previously reported in the Notes to Consolidated Financial Statements under the provisions of SFAS No. 123, “Accounting for Stock-Based Compensation.”

Management’s Discussion and Analysis is based on our Consolidated Financial Statements as shown on pages 24-27.

Analysis of Continuing Operations

Revenues and Comparable-store Sales

Sales include merchandise sales, net of expected returns, from our stores and our on-line business. Total revenues include sales and net credit card revenues. Net credit card revenues represent income derived from finance charges, late fees and other revenues from use of our Target Visa and proprietary Target Card. Comparable-store sales are sales from stores open longer than one year, including stores that were moved to a new location or remodeled as a general merchandise store. General merchandise stores that are converted to a SuperTarget store format are removed from the comparable-store sales calculation until they are open longer than one year. Sales from our on-line business are not included in comparable store sales.

Factors Affecting Revenue Growth

	2004		2003		2002
Sales growth	11.6	%	12.1	%	12.0	%
Net credit card revenue growth	5.5	%	23.2	%	112.6	%
Total revenue growth	11.5	%	12.3	%	13.3	%
Estimated impact of deflation on sales	(1.4	)%	(4.2	)%	(3.8	)%

The revenue increases in both 2004 and 2003 were driven by new store expansion, growth in comparable-store sales and increases in net credit revenues. In 2005, we expect these same factors to contribute to a low double digit percentage increase in revenues. Inflation/deflation is not expected to have a significant effect on sales growth.

Gross Margin Rate

Gross margin rate represents gross margin (sales less cost of sales) as a percent of sales. Cost of sales primarily include purchases, markdowns, shortage, and other costs associated with our merchandise. These costs are partially offset by various forms of consideration earned from our vendors, which we refer to as “vendor income.” Refer to the Critical Accounting Estimates section on page 21 for further discussion of retail inventory accounting and vendor income.

In 2004, our consolidated gross margin rate increased 0.6 percentage points to a rate of 31.2 percent primarily due to an increase in markup. We have continued to lower our product costs through strategic sourcing initiatives such as increasing our direct import penetration.

In 2003, our consolidated gross margin rate increased by 0.4 percentage points to a rate of 30.6 percent. The growth was attributable to the adoption of Emerging Issues Task Force (EITF) Issue No. 02-16 “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor.” The adoption resulted in a reclassification of a portion of our vendor income from selling, general and administrative expenses to cost of sales and had a slight negative impact on net earnings. See further discussions in the Notes to Consolidated Financial Statements on page 28.

Consolidated gross margin rate in 2005 is expected to be approximately equal to or slightly greater than 2004.

Selling, General and Administrative Expense Rate

Our selling, general and administrative (SG&A) expense rate represents payroll, benefits, advertising, distribution, buying and occupancy, start-up and other expenses as a percentage of sales. SG&A expense excludes depreciation and amortization and expenses associated with our credit card operations, which are reflected separately in our Consolidated Results of Operations. In 2004 and 2003 approximately $72 million and $58 million, respectively, of vendor income was recorded as an offset to SG&A expenses as it met the specific, incremental and identifiable criteria of EITF No. 02-16. In 2002, approximately $195 million of vendor income was recorded as an offset to SG&A expenses. This vendor income primarily represented advertising reimbursements.

In 2004, our consolidated SG&A expense rate increased to 21.4 percent compared to 21.2 percent in 2003. Approximately half of the year-over-year increase was attributable to a change in the method of accounting for leases. See further discussions in the Notes to Consolidated Financial Statements on page 32. The primary driver of the remaining increase was higher workers’ compensation costs.

In 2003, our consolidated SG&A expense rate rose to 21.2 percent compared to 20.5 percent in 2002 primarily due to the reclassification of vendor income.

In 2005, we expect our SG&A expense rate to be equal to or increase slightly from 2004, reflecting our belief that certain expenses, such as health care costs, will increase at a faster pace than sales.

Depreciation and Amortization

In 2004, depreciation and amortization increased 14.6 percent to $1,259 million compared to 2003. Depreciation and amortization expense grew faster than sales partially due to accelerated depreciation on existing stores that were planned to be closed, or torn down and rebuilt. In 2003, depreciation and amortization increased 13.6 percent to $1,098 million compared to 2002 due to new store growth. In 2005, we expect depreciation and amortization to increase in line with our sales growth.

Credit Card Contribution

We offer credit to qualified guests through our branded credit cards: the Target Visa and proprietary Target Card. Our credit card products strategically support earnings growth by driving sales at our stores and through the continued growth of our credit card contribution.

Our credit card revenues are primarily derived from finance charges, late fees and other revenues. Also, third-party merchant fees are paid to us by merchants who have accepted the Target Visa credit card. In 2004 and 2003, our net credit card revenues increased 5.5 percent and 23.2 percent, respectively, due to continued growth in the Target Visa portfolio.

Credit card expenses include a bad debt provision as well as operations and marketing expenses supporting our credit card portfolio. In 2004, our bad debt provision decreased $25 million to $451 million, primarily due to improved quality of the portfolio. In 2003, our bad debt provision increased $85 million to $476 million, primarily due to the substantial growth of the Target Visa portfolio. In 2004, 2003 and 2002, the allowance for doubtful accounts as a percent of year-end receivables was 7.1 percent, 7.1 percent and 7.0 percent, respectively.

In 2004, operations and marketing expense increased to $286 million from $246 million in 2003 and $238 million in 2002, primarily due to the growth of the Target Visa portfolio.

We expect our 2005 credit card operations to grow at a rate similar to our growth rate in 2004. Our pre-tax credit card contribution as a percent of total average receivables is expected to continue to be in line with recent performance. The impact of the change to our revenue related to a prime-based floating rate instead of a fixed rate, as discussed on pages 19 and 21, will be determined by future changes in the prime rate.

Credit Card Contribution

(millions)	2004			2003			2002
Revenues:
Finance charges, late fees and other revenues	$	1,059		$	1,015		$	821
Merchant fees
Intracompany	65			49			49
Third-party	98			82			70
Total revenues	1,222			1,146			940
Expenses:
Bad debt provision	451			476			391
Operations and marketing	286			246			238
Total expenses	737			722			629
Pre-tax credit card contribution	$	485		$	424		$	311
As a percent of average receivables	9.8		%	9.1		%	8.8		%

Receivables

(millions, before allowance)	2004			2003			2002
Year-end receivables	$	5,456		$	4,973		$	4,601
Average receivables	$	4,927		$	4,661		$	3,515
Past Due
Accounts with three or more payments past due as a percent of year-end receivables:	3.5		%	4.2		%	4.0		%

Allowance for Doubtful Accounts

(millions)	2004			2003			2002
Allowance at beginning of year	$	352		$	320		$	180
Bad debt provision	451			476			391
Net write-offs	(416		)	(444		)	(251		)
Allowance at end of year	$	387		$	352		$	320
As a percent of year-end receivables	7.1		%	7.1		%	7.0		%

Other Credit Card Contribution Information

	2004		2003		2002
Total revenues as a percent of average receivables:	24.8	%	24.6	%	26.7	%
Net write-offs as a percent of average receivables:	8.4	%	9.5	%	7.1	%

Net Interest Expense

In 2004, net interest expense was $570 million, $14 million higher than 2003. This increase was due to a $74 million higher loss on debt called or repurchased and a higher average portfolio interest rate resulting from the unfavorable mix effect of higher balances of short-term investments and higher market rates. This increase was partially offset by significantly lower average debt, net of investments, due to cash received from the dispositions of Marshall Field’s and Mervyn’s. The average portfolio interest rate was 5.5 percent in 2004 and 4.9 percent in 2003. The $542 million of debt called or repurchased during 2004 resulted in a loss of $89 million (approximately $.06 per share) and had an average interest rate of 7.0 percent and an average remaining life of 24 years.

In 2003, net interest expense was $556 million, $28 million lower than 2002. The decrease was due to a lower average portfolio interest rate and a smaller loss on debt called or repurchased, partially offset by higher average debt outstanding. The average portfolio interest rate in 2003 was 4.9 percent compared with 5.6 percent in 2002. The $297 million of debt called or repurchased during 2003 resulted in a loss of $15 million (approximately $.01 per share) and had an average interest rate of 7.8 percent and an average remaining life of 20 years.

Excluding any effect of future debt repurchases, we expect net interest expense in 2005 to be lower than 2004 due to lower loss on debt repurchase and lower average net debt balances in the first half of the year. Additionally, the majority of our credit card receivables will be assessed finance charges at a prime-based floating rate instead of a fixed rate in 2005. In order to protect our credit card economics in light of future changes in the prime rate, we plan to maintain a sufficient level of floating-rate debt to achieve parallel changes in our finance charge revenue and interest expense.

Analysis of Financial Condition

Liquidity and Capital Resources

Our financial condition remains strong. In assessing our financial condition, we consider factors such as cash flows provided or used by operations, capital expenditures and debt service obligations. Cash flow provided by operations increased to $3,821 million in 2004 from $3,213 million in 2003, primarily due to higher net income. During 2004, cash provided from the divestiture of Marshall Field’s and Mervyn’s (before consideration of associated taxes) was $4,881 million.

Our year-end receivables (before allowance) increased 9.7 percent, or $483 million, to $5,456 million. The growth in year-end receivables was driven by growth in issuance and usage of the Target Visa credit card during 2004. Average receivables in 2004 increased 5.7 percent.

Year-end inventory levels increased $853 million, or 18.8 percent. The increase in inventory was a result of additional square footage and same store sales growth, as well as the refinement of our measurement of the point in our supply chain at which effective ownership of direct imports occurs. This growth was primarily funded by an $823 million increase in accounts payable over the same period.

In June 2004, our Board of Directors authorized the repurchase of $3 billion of our common stock which we expect to complete over two to three years. This authorization replaced our previous repurchase programs that were authorized by our Board of Directors in January 1999 and March 2000. During 2004, we repurchased 29 million shares at a total cost of $1,290 million ($44.68 per share).

Our financing strategy is to ensure liquidity and access to capital markets, to manage our net exposure to floating rates and to maintain a balanced spectrum of debt maturities. Within these parameters, we seek to minimize our cost of borrowing.

Management believes that cash flows from operations, together with current levels of cash equivalents, proceeds from long-term financing activities and issuance of short-term debt will be sufficient to fund capital expenditures, share repurchases, growth in receivables, maturities of long-term debt, and other cash requirements, including seasonal buildup in inventories.

A key to our liquidity and access to capital markets is maintaining strong investment-grade debt ratings.

Credit Ratings

		Standard
	Moody’s	and Poor’s	Fitch
Long-term debt	A2	A+	A+
Commercial paper	P-1	A-1	F1
Securitized receivables	Aaa	AAA	n/a

Further liquidity is provided by $1,600 million of committed lines of credit obtained through a group of 25 banks. Of these credit lines, an $800 million credit facility expires in June 2005 and includes a one-year term-out option to June 2006. The remaining $800 million credit facility expires in June 2008. There were no balances outstanding at any time during 2004 or 2003 under these agreements. These committed credit lines, as well as most of our long-term debt obligations, contain certain financial covenants. We are, and expect to remain, in compliance within these covenants. No material debt instrument contains provisions requiring acceleration of payment upon a debt rating downgrade.

Interest coverage ratio represents the ratio of pre-tax earnings before fixed charges (interest expense and the interest portion of rent expense) to fixed charges. Our interest coverage ratio calculated under generally accepted accounting principles was 5.4x, 5.1x and 4.3x in 2004, 2003 and 2002, respectively. These ratios are adversely affected by the losses from discretionary debt repurchase transactions and they exclude the historical income from discontinued operations. Management believes that adjustments for these two issues are necessary to make the coverage ratio a more useful and consistent indicator of creditworthiness.

Capital Expenditures

Capital expenditures were $3,068 million in 2004, compared with $2,738 million in 2003 and $3,040 million in 2002. Our higher spending level in 2004 is primarily due to the increase in new store expansion, our remodel program and more land purchases in lieu of leases. Net property and equipment increased $1,707 million in 2004, compared with an increase of $1,612 million in 2003. Over the past five years, Target’s net retail square footage has grown at a compound annual rate of 9.8 percent.

Approximately 76 percent and 78 percent of total capital expenditures in 2004 and 2003, respectively, were for new stores, expansions and remodels. Other capital investments were for information system hardware and software, distribution capacity and other infrastructure to support store growth.

Number of Stores

	January 29,			January 31,
	2005	Opened	Closed *	2004
Target General Merchandise Stores	1,172	80	15	1,107
SuperTarget Stores	136	18	—	118
Total	1,308	98	15	1,225

Retail Square Feet

	January 29,			January 31,
(thousands)	2005	Opened	Closed*	2004
Target General Merchandise Stores	140,953	10,950	1,635	131,638
SuperTarget Stores	24,062	3,137	—	20,925
Total	165,015	14,087	1,635	152,563

* Typically relates to stores that have been relocated to a new store in the same trade area.

At year-end 2004, we owned 1,071 stores, leased 86 stores and operated 151 “combined” stores for a total of 1,308 locations. Stores within the “combined” category are primarily owned buildings on leased land.

In 2005, we expect to invest $3,200 million to $3,400 million, mostly in new store square footage, as well as the distribution infrastructure and systems to support this growth. Our estimated 2005 store opening program reflects net square footage growth of approximately 8 percent, reflecting 105 to 110 new stores partially offset by closings and relocations. In addition, we expect to substantially remodel approximately 75 stores, some of which will also be expanded.

Commitments and Contingencies

At January 29, 2005, our debt, lease and royalty contractual obligations were as follows:

Contractual Obligations

	Payments Due by Period
			Less than		1-3		3-5		After 5
(millions)	Total		1 Year		Years		Years		Years
Long-term debt *	$	9,402	$	501	$	2,072	$	2,202	$	4,627
Interest payments **	4,580		532		943		711		2,394
Capital lease obligations	189		12		25		25		127
Operating leases ***	3,049		146		279		219		2,405
Merchandise royalties	102		49		49		4		—

Contractual cash obligations	$	17,322	$	1,240	$	3,368	$	3,161	$	9,553

* Required principal payments only. Excludes SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” fair market value adjustments recorded in long-term debt.

** Includes payments on $750 million of floating-rate long-term debt secured by credit card receivables which matures in 2007. These payments are calculated assuming rates of 3.25 percent, 3.75 percent and 4.25 percent, for 2005, 2006, and 2007, respectively. Excludes payments received or made relating to interest rate swaps discussed on page 32.

*** Total contractual lease payments include certain options to extend the lease term, in the amount of $1,415 million, that are expected to be exercised because the investment in leasehold improvements is significant.

Commitments for the purchase, construction, lease or remodeling of real estate, facilities and equipment were approximately $544 million at year-end 2004.

Throughout the year, we enter into various commitments to purchase inventory. In addition to the accounts payable reflected in our Consolidated Statements of Financial Position on page 25, we had commitments with various vendors for the purchase of inventory as of January 29, 2005. The previous table excludes these commitments because they are cancelable by their terms.

Market Risk

Our exposure to market risk results primarily from changes in interest rates on our debt obligations, as well as the effect of market returns on our non-qualified defined contribution and qualified defined benefit pension plans. We hold derivative instruments primarily to manage our exposure to these risks, and all derivative instruments are matched against specific debt obligations or other liabilities. There have been no material changes in the primary risk exposures or management of the risks since the prior year. See further discussions in the Notes to Consolidated Financial Statements on pages 31-36.

The annualized effect of a one percentage point increase in floating interest rates on our interest rate swap agreements and other floating-rate debt obligations, net of floating-rate cash equivalents, at January 29, 2005 would be to increase interest expense by approximately $19 million. The annualized effect of a one percentage point change in equity market returns on our non-qualified defined contribution plans (inclusive of the effect of derivative instruments used to hedge or manage these exposures) would not be significant. The annualized effect of a one percentage point decrease in the return on pension plan assets would be to decrease plan assets by $17 million. The resulting impact on net pension expense would be determined consistent with the provisions of SFAS No. 87, “Employers’ Accounting for Pensions.” In 2005, the majority of our credit card receivables will be assessed finance charges at a prime-based floating rate instead of a fixed rate. The impact of this change to our revenue will be determined by future changes in the prime rate. In order to protect our credit card economics in light of future changes in the prime rate, we plan to maintain a sufficient level of floating-rate debt to achieve parallel changes in our finance charge revenue and interest expense.

Analysis of Discontinued Operations

In 2004, revenues and earnings from discontinued operations were lower than prior years due to only a partial year of results, which excluded the holiday season.

The financial results included in discontinued operations were as follows:

	January 29,		January 31,		February 1,
(millions)	2005		2004		2003
Revenue	$	3,095	$	6,138	$	6,507
Earnings from discontinued operations before income taxes	121		306		399
Earnings from discontinued operations, net of $46, $116 and $152 tax, respectively	75		190		247
Gain on sale of discontinued operations, net of $761 tax	1,238		—		—
Total income from discontinued operations, net of tax	$	1,313	$	190	$	247

Critical Accounting Estimates

Our analysis of operations and financial condition is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the related disclosures of contingent assets and liabilities. In the Notes to Consolidated Financial Statements, we describe our significant accounting policies used in preparation of the consolidated financial statements. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.

The following items in our consolidated financial statements require significant estimation or judgment:

Inventory and cost of sales We account for substantially all of our inventory and the related cost of sales under the retail inventory method. Under the retail inventory method, inventory is stated at cost, which is determined by applying a cost-to-retail ratio to each merchandise grouping’s ending retail value. Since this inventory value is adjusted regularly to reflect market conditions, our inventory methodology reflects the lower of cost or market. We reduce inventory for estimated losses related to shortage and markdowns. Shortage is based upon historical losses verified by prior physical inventory counts. Markdowns designated for clearance activity are recorded when the salability of the merchandise has diminished. Inventory is at risk of obsolescence if economic conditions change, such as shifting consumer demand, changing consumer credit markets, or increasing competition. These risks are mitigated because substantially all of our inventory sells in less than six months. Inventory is described in the Notes to Consolidated Financial Statements on page 30.

Vendor income receivable Cost of sales is partially offset by various forms of consideration earned from our vendors. We receive income for a variety of vendor-sponsored programs such as volume rebates, markdown allowances, promotions and advertising, and for our compliance programs. We establish a receivable for the vendor income that is earned but not yet received from our vendors. This receivable is based on provisions of the programs in place, and is computed by estimating the point at which we’ve completed our performance under the agreement and the amount is earned. Due to the complexity and diversity of the individual agreements with vendors, we perform detailed analyses and review historical trends to determine an appropriate level of the receivable in aggregate. See further discussions in the Notes to Consolidated Financial Statements on page 28.

Allowance for doubtful accounts When receivables are recorded, we recognize an allowance for doubtful accounts in an amount equal to anticipated future write-offs. This allowance includes provisions for uncollectible finance charges and other credit fees. We estimate future write-offs based on delinquencies, risk scores, aging trends, industry risk trends and our historical experience. Management believes that the allowance for doubtful accounts is adequate to cover anticipated losses in our credit card accounts receivable under current conditions; however, significant deterioration in any of the factors mentioned above or in general economic conditions could materially change these expectations. Net accounts receivable and its related allowance are described in the Notes to Consolidated Financial Statements on page 30.

Analysis of assets for impairment We review assets at the lowest level for which there are identifiable cash flows, which is usually at the store level. The carrying amount of store assets is compared to the expected undiscounted future cash flows to be generated by those assets over the estimated remaining useful life of the store. No impairments were recorded in 2004 or 2003 as a result of the tests performed.

We evaluate goodwill for impairment on an annual basis or more often if an event occurs or circumstances change that indicate impairment might exist. Goodwill is evaluated for impairment through the comparison of fair value of the related reporting unit to its carrying value. No impairments were recorded in 2004, 2003 and 2002 as a result of the tests performed. See further discussions in the Notes to Consolidated Financial Statements on pages 30-31.

Pension and postretirement health care accounting We fund and maintain a qualified defined-benefit pension plan and maintain certain related non-qualified plans as well. Our pension costs are determined based on actuarial calculations using key assumptions including our expected long-term rate of return on qualified plan assets, the discount rate and our estimate of future compensation increases. We also maintain a postretirement health care plan for certain retired employees. Postretirement health care costs are calculated based on actuarial calculations using key assumptions, including the discount rate and health care cost trend rates. Pension and postretirement health care benefits are further described in the Notes to Consolidated Financial Statements on pages 35-36.

Insurance/self-insurance We retain a portion of the risk related to certain general liability, workers’ compensation, property loss and employee medical and dental claims. Liabilities associated with these losses include estimates of both claims filed and claims incurred but not yet reported. We estimate our ultimate cost based upon analysis of historical data and actuarial estimates. General liability and workers’ compensation liabilities are recorded at our estimate of their net present value; other liabilities are not discounted. We believe the amounts accrued are adequate, although our ultimate loss may differ from the amounts provided. We maintain stop-loss coverage to limit the exposure related to certain risks.

Income taxes We pay income taxes based on the tax statutes, regulations and case law of the various jurisdictions in which we operate. Our effective income tax rate from continuing operations was 37.8 percent, 37.8 percent and 38.2 percent in 2004, 2003 and 2002, respectively. The income tax provision includes estimates for certain unresolved matters in dispute with state and federal tax authorities. Management believes the resolution of such disputes will not have a material impact on our financial statements. Our effective income tax rate in 2005 is expected to be approximately 37.5 to 38.1 percent. Income taxes are further described in the Notes to Consolidated Financial Statements on page 33.

New Accounting Pronouncements

2005 Adoptions

SFAS No. 151, “Inventory Costs, an amendment of ARB No. 43, Chapter 4” was issued in November 2004 and is effective for fiscal years beginning after June 15, 2005 with early adoption permitted. SFAS No. 151 clarifies that abnormal amounts of idle facilities expense, freight, handling costs and spoilage are to be recognized as current period charges and provides guidance on the allocation of overhead. We do not expect this statement to have an impact on our net earnings, cash flows or financial position upon adoption.

SFAS No. 153, “Exchanges of Nonmonetary Assets – An Amendment of APB Opinion No. 29,” was issued in December 2004 and is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005 with earlier application permitted. SFAS No. 153 addresses the measurement of exchanges of nonmonetary assets. We do not expect this statement to have an impact on our net earnings, cash flows or financial position upon adoption.

2004 Adoptions

Financial Accounting Standards Board (FASB) Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51” (FIN No. 46) was issued in January 2003 and was effective the first reporting period that ended after March 15, 2004. FIN No. 46 requires the consolidation of entities in which an enterprise absorbs a majority of the entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interest in the entity. The adoption of FIN No. 46 did not have a material impact on our net earnings, cash flows or financial position.

The Medicare Prescription Drug, Improvements and Modernization Act of 2003 (The Act) was signed into law in December 2003. The Act introduces a prescription drug benefit under Medicare (Medicare Part D), as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D. In May 2004, the FASB issued Staff Position (FSP) No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.” This FSP is effective for interim or annual periods beginning after June 15, 2004. Final regulations that would define actuarial equivalency have not yet been issued. However, we have made a preliminary determination that our plans will be actuarially equivalent. As a result, we recorded a reduction in our accumulated post-retirement benefit obligation of $7 million in the third quarter of 2004. In addition, the expense amounts shown in the Pension and Postretirement Health Care Benefits Note reflect a $1 million reduction due to the amortization of the actuarial gain and reduction in interest cost due to the effects of the Act.

The American Jobs Creation Act of 2004 (The Act) was signed into law in October 2004. The Act introduces a tax deduction for qualified production activities and a special one-time dividend received deduction for repatriation of certain foreign earnings to a U.S. taxpayer. In December 2004, the FASB issued Staff Position (FSP) No. 109-1, “Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004” and FSP No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004,” both were effective upon issuance. The adoption of FSP No. 109-1 and FSP No. 109-2 did not have a material impact on our net earnings, cash flows, financial position or effective tax rate.

SFAS No. 123R, “Share-Based Payment” was issued in December 2004 and eliminates accounting for share-based compensation transactions using the intrinsic value method prescribed in APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and requires instead that such transactions be accounted for using a fair-value-based method. We have elected to adopt the provisions of SFAS No. 123R in 2004 under the modified retrospective transition method. All prior period financial statements have been restated to recognize compensation cost in the amounts previously reported in the Notes to Consolidated Financial Statements under the provisions of SFAS No. 123, “Accounting for Stock-Based Compensation.”

Forward-looking Statements

This Annual Report, including the preceding Management’s Discussion and Analysis, contains forward-looking statements regarding our performance, liquidity and the adequacy of our capital resources. Those statements are based on our current assumptions and expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. We caution that the forward-looking statements are qualified by the risks and challenges posed by increased competition (including the effects of competitor liquidation activities), shifting consumer demand, changing consumer credit markets, changing health care costs, changing capital markets and general economic conditions, hiring and retaining effective team members, sourcing merchandise from domestic and international vendors, investing in new business strategies, achieving our growth objectives, the outbreak of war and other significant national and international events, and other risks and uncertainties. As a result, while we believe that there is a reasonable basis for the forward-looking statements, you should not place undue reliance on those statements. You are encouraged to review Exhibit (99)C attached to our Form 10-K Report for the year-ended January 29, 2005, which contains additional important factors that may cause actual results to differ materially from those projected in the forward-looking statements.

CONSOLIDATED RESULTS OF OPERATIONS

(millions, except per share data)	2004		2003		2002
Sales	$	45,682	$	40,928	$	36,519
Net credit card revenues	1,157		1,097		891
Total revenues	46,839		42,025		37,410
Cost of sales	31,445		28,389		25,498
Selling, general and administrative expense	9,797		8,657		7,505
Credit card expense	737		722		629
Depreciation and amortization	1,259		1,098		967
Earnings from continuing operations before interest expense and income taxes	3,601		3,159		2,811
Net interest expense	570		556		584
Earnings from continuing operations before income taxes	3,031		2,603		2,227
Provision for income taxes	1,146		984		851
Earnings from continuing operations	$	1,885	$	1,619	$	1,376
Earnings from discontinued operations, net of $46, $116 and $152 tax	$	75	$	190	$	247
Gain on disposal of discontinued operations, net of $761 tax	$	1,238	$	—	$	—
Net earnings	$	3,198	$	1,809	$	1,623
Basic earnings per share
Continuing operations	$	2.09	$	1.78	$	1.52
Discontinued operations	$	0.08	$	0.21	$	0.27
Gain from discontinued operations	$	1.37	$	—	$	—
Basic earnings per share	$	3.54	$	1.99	$	1.79
Diluted earnings per share
Continuing operations	$	2.07	$	1.76	$	1.51
Discontinued operations	$	0.08	$	0.21	$	0.27
Gain from discontinued operations	$	1.36	$	—	$	—
Diluted earnings per share	$	3.51	$	1.97	$	1.78
Weighted average common shares outstanding:
Basic	903.8		911.0		908.0
Diluted	912.1		919.2		914.3

See Notes to Consolidated Financial Statements throughout pages 28-37.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	January 29,			January 31,
(millions)	2005			2004
Assets
Cash and cash equivalents	$	2,245		$	708
Accounts receivable, net	5,069			4,621
Inventory	5,384			4,531
Other current assets	1,224			1,000
Current assets of discontinued operations	—			2,092
Total current assets	13,922			12,952
Property and equipment
Land	3,804			3,312
Buildings and improvements	12,518			11,022
Fixtures and equipment	4,988			4,577
Construction-in-progress	962			969
Accumulated depreciation	(5,412		)	(4,727		)
Property and equipment, net	16,860			15,153
Other non-current assets	1,511			1,377
Non-current assets of discontinued operations	—			1,934
Total assets	$	32,293		$	31,416
Liabilities and shareholders investment
Accounts payable	$	5,779		$	4,956
Accrued liabilities	1,633			1,288
Income taxes payable	304			382
Current portion of long-term debt and notes payable	504			863
Current liabilities of discontinued operations	—			825
Total current liabilities	8,220			8,314
Long-term debt	9,034			10,155
Deferred income taxes	973			632
Other non-current liabilities	1,037			917
Non-current liabilities of discontinued operations	—			266
Shareholders’ investment
Common stock*	74			76
Additional paid-in-capital	1,810			1,530
Retained earnings	11,148			9,523
Accumulated other comprehensive income	(3		)	3
Total shareholders’ investment	13,029			11,132
Total liabilities and shareholders’ investment	$	32,293		$	31,416

* Common Stock Authorized 6,000,000,000 shares, $.0833 par value; 890,643,966 shares issued and outstanding at January 29, 2005; 911,808,051 shares issued and outstanding at January 31, 2004.

Preferred Stock Authorized 5,000,000 shares, $.01 par value; no shares were issued or outstanding at January 29, 2005 or January 31, 2004

See Notes to Consolidated Financial Statements throughout pages 28-37.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions)	2004			2003			2002

Operating activities
Net earnings	$	3,198		$	1,809		$	1,623
Earnings from and gain on disposal of discontinued operations, net of tax	1,313			190			247
Earnings from continuing operations	1,885			1,619			1,376
Reconciliation to cash flow:
Depreciation and amortization	1,259			1,098			967
Deferred tax provision	233			208			208
Bad debt provision	451			476			391
Loss on disposal of fixed assets, net	59			41			54
Other non-cash items affecting earnings	133			67			179
Changes in operating accounts providing/(requiring) cash:
Accounts receivable originated at Target	(209		)	(279		)	(454		)
Inventory	(853		)	(579		)	(370		)
Other current assets	(37		)	(196		)	13
Other non-current assets	(147		)	(166		)	(136		)
Accounts payable	823			721			545
Accrued liabilities	319			85			3
Income taxes payable	(78		)	99			(80		)
Other	(17		)	19			29
Cash flow provided by operations	3,821			3,213			2,725
Investing activities
Expenditures for property and equipment	(3,068		)	(2,738		)	(3,040		)
Proceeds from disposals of fixed assets	56			67			32
Change in accounts receivable originated at third parties	(690		)	(538		)	(1,768		)
Proceeds from sale of discontinued operations	4,881			—			—
Cash flow provided by/(required for) investing activities	1,179			(3,209		)	(4,776		)
Financing activities
Decrease in notes payable, net	—			(100		)	—
Additions to long-term debt	10			1,200			3,116
Reductions of long-term debt	(1,487		)	(1,179		)	(1,098		)
Dividends paid	(272		)	(237		)	(218		)
Repurchase of stock	(1,290		)	(48		)	(3		)
Stock option exercises	146			36			27
Other	56			(10		)	(20		)
Cash flow (required for)/provided by financing activities	(2,837		)	(338		)	1,804
Net cash (required)/provided by discontinued operations	(626		)	292			508
Net increase/(decrease) in cash and cash equivalents	1,537			(42		)	261
Cash and cash equivalents at beginning of year	708			750			489
Cash and cash equivalents at end of year	$	2,245		$	708		$	750

Amounts presented herein are on a cash basis and therefore may differ from those shown in other sections of this Annual Report. Consistent with the provisions of SFAS No. 95, “Statement of Cash Flows,” cash flows related to accounts receivable are classified as either Provided by Operations or From Investing Activities, depending on their origin.

Cash paid for income taxes was $1,742 million, $781 million and $853 million during 2004, 2003 and 2002, respectively. Cash paid for interest (including interest capitalized) was $498 million, $550 million and $526 million during 2004, 2003 and 2002, respectively.

See Notes to Consolidated Financial Statements throughout pages 28-37.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ INVESTMENT

											Accumulated
	Common		Stock			Additional					Other
	Stock		Par			Paid-in		Retained			Comprehensive
(millions, except footnotes)	Shares		Value			Capital		Earnings			Income			Total

February 2, 2002	905.2		$	75		$	1,193	$	6,628		$	—		$	7,896
Consolidated net earnings	—		—			—		1,623			—			1,623
Other comprehensive income	—		—			—		—			4			4
Total comprehensive income														1,627
Dividends declared	—		—			—		(218		)	—			(218		)
Repurchase of stock	(.5	)	—			—		(16		)	—			(16		)
Issuance of stock for ESOP	3.0		1			105		—			—			106
Stock options and awards	2.1		—			102		—			—			102
February 1, 2003	909.8		76			1,400		8,017			4			9,497
Consolidated net earnings	—		—			—		1,809			—			1,809
Other comprehensive income	—		—			—		—			(1		)	(1		)
Total comprehensive income														1,808
Dividends declared	—		—			—		(246		)	—			(246		)
Repurchase of stock	(1.5	)	—			—		(57		)	—			(57		)
Issuance of stock for ESOP	0.6		—			17		—			—			17
Stock options and awards	2.9		—			113		—			—			113
January 31, 2004	911.8		76			1,530		9,523			3			11,132
Consolidated net earnings	—		—			—		3,198			—			3,198
Other comprehensive income	—		—			—		—			(6		)	(6		)
Total comprehensive income														3,192
Dividends declared	—		—			—		(280		)	—			(280		)
Repurchase of stock	(28.9	)	(3		)	—		(1,293		)	—			(1,296		)
Issuance of stock for ESOP	—		—			—		—			—			—
Stock options and awards	7.7		1			280		—			—			281
January 29, 2005	890.6		$	74		$	1,810	$	11,148		$	(3	)	$	13,029

Common Stock Authorized 6,000,000,000 shares, $.0833 par value; 890,643,966 shares issued and outstanding at January 29, 2005; 911,808,051 shares issued and outstanding at January 31, 2004; 909,801,560 shares issued and outstanding at February 1, 2003.

In June of 2004, our Board of Directors authorized the repurchase of $3 billion of our common stock. The repurchase of our common stock is expected to be made primarily in open market transactions, subject to market conditions, and is expected to be completed over two to three years. This authorization replaced our previous repurchase programs that were authorized by our Board of Directors in January 1999 and March 2000. In 2004, we repurchased a total of 29 million shares of our common stock at a total cost of approximately $1,290 million ($44.68 per share)

Preferred Stock Authorized 5,000,000 shares, $.01 par value; no shares were issued or outstanding at January 29, 2005, January 31, 2004 or February 1, 2003.

Junior Preferred Stock Rights In 2001, we declared a distribution of preferred share purchase rights. Terms of the plan provide for a distribution of one preferred share purchase right for each outstanding share of our common stock. Each right will entitle shareholders to buy one twelve-hundredth of a share of a new series of junior participating preferred stock at an exercise price of $125.00, subject to adjustment. The rights will be exercisable only if a person or group acquires ownership of 20 percent or more of our common stock or announces a tender offer to acquire 30 percent or more of our common stock.

Dividends Dividends declared per share were $0.31, $0.27 and $0.24 in 2004, 2003 and 2002, respectively.

See Notes to Consolidated Financial Statements throughout pages 28-37.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Accounting Policies

Organization Target Corporation operates large-format general merchandise discount stores in the United States and a much smaller, rapidly growing on-line business. Additionally, our credit card operations represent an integral component of our retail business.

Consolidation The financial statements include the balances of the Corporation and its subsidiaries after elimination of material intercompany balances and transactions. All material subsidiaries are wholly owned.

Use of Estimates The preparation of our financial statements, in conformity with accounting principles generally accepted in the United States (GAAP), requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates.

Fiscal Year Our fiscal year ends on the Saturday nearest January 31. Unless otherwise stated, references to years in this report relate to fiscal years rather than to calendar years. Fiscal years 2004, 2003 and 2002 each consisted of 52 weeks.

Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation.

Stock-based Compensation In December 2004, the Financial Accounting Standards Board finalized Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R). SFAS No. 123R eliminates accounting for share-based compensation transactions using the intrinsic value method prescribed in APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and requires instead that such transactions be accounted for using a fair-value-based method. We adopted SFAS No. 123, “Accounting for Stock-Based Compensation,” in accordance with the prospective transition method prescribed in SFAS No. 148, “Accounting for Stock-Based Compensation –Transition and Disclosure” in the first quarter of 2003. Therefore, the fair value based method has been applied prospectively to awards granted subsequent to February 1, 2003 (the last day of our 2002 fiscal year). We have elected to adopt the provisions of SFAS No. 123R in 2004 under the modified retrospective transition method. All prior period financial statements have been restated to recognize compensation cost in the amounts previously reported in the Notes to Consolidated Financial Statements under the provisions of SFAS No. 123. Information related to outstanding stock options and performance shares is disclosed on pages 33-34.

Revenues

The contribution to revenue from sales is recognized when the sales occur and are net of expected returns. Revenue from gift card sales is recognized upon redemption of the gift card. Commissions earned on sales generated by leased departments are included within sales and were $46 million in 2004, $32 million in 2003 and $19 million in 2002. Net credit card revenues are comprised of finance charges and late fees from credit card holders, as well as third-party merchant fees earned from the use of our Target Visa credit card. Net credit card revenues are recognized according to the contractual provisions of each applicable credit card agreement. If an account is written-off, any uncollected finance charges or late fees are recorded as a reduction of credit card revenue. The amount of our retail sales charged to our credit cards was $3,269 million, $3,006 million and $2,980 million in 2004, 2003 and 2002, respectively.

Consideration Received from Vendors

We receive income for a variety of vendor-sponsored programs such as volume rebates, markdown allowances, promotions and advertising, and for our compliance programs. Promotional and advertising allowances are intended to offset our costs of promoting and selling the vendor’s merchandise in our stores and are recognized when we incur the cost or complete the promotion. Under our compliance programs, vendors are charged for merchandise shipments that do not meet our requirements, such as late or incomplete shipments, and we record these allowances when the violation occurs. Vendor income either reduces our inventory costs or our operating expenses based on the requirements of Emerging Issues Task Force (EITF) Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor” as discussed below.

In the first quarter of 2003, we adopted EITF No. 02-16 which resulted in the reclassification of certain vendor income items from operating expenses to inventory purchases and recognized into income as the vendors’ merchandise is sold. The guidance was applied on a prospective basis only as required by EITF No. 02-16. This guidance had no material impact on sales, cash flows or financial position for any period.

In the fourth quarter of 2003, we adopted EITF No. 03-10, “Application of Issue 02-16 by Resellers to Sales Incentives Offered to Consumers by Manufacturers,” which amends EITF No. 02-16. In accordance with EITF No. 03-10, if certain criteria are met, consideration received from a vendor for honoring the vendor’s sales incentives offered directly to consumers (i.e. manufacturer’s coupons) should not be recorded as a reduction of the cost of the reseller’s purchases from the vendor. The adoption of EITF No. 03-10 did not have a material impact on net earnings, cash flows or financial position.

Buying, Occupancy and Distribution Expenses

Buying expenses primarily consist of salaries and expenses incurred by our merchandising operations, while occupancy expenses primarily consist of rent, property taxes and other operating costs of our retail, distribution and headquarters facilities. Buying and occupancy expenses classified in selling, general and administrative expenses were $1,421 million, $1,213 million and $1,063 million in 2004, 2003 and 2002, respectively. In addition, we recorded $1,035 million, $910 million and $789 million of depreciation expense for our retail, distribution and headquarters facilities in 2004, 2003 and 2002, respectively.

Advertising Costs

Advertising costs, included in selling, general and administrative expense, are expensed at first showing of the advertisement and were $888 million, $872 million and $666 million for 2004, 2003 and 2002, respectively. Advertising vendor income used to reduce advertising expenses was approximately $72 million, $58 million and $173 million for 2004, 2003 and 2002, respectively. Television and radio broadcast and newspaper circulars make up the majority of our advertising costs in all three years.

Discontinued Operations

On March 10, 2004, we began a review of strategic alternatives for our Marshall Field’s and Mervyn’s businesses, which included but was not limited to the possible sale of one or both as ongoing businesses to existing retailers or other qualified buyers.

On June 9, 2004, we agreed to sell Marshall Field’s and the Mervyn’s stores located in Minnesota to The May Department Store Company (May). We completed the sale of Marshall Field’s on July 31, 2004 and the sale of the Minnesota Mervyn’s stores on August 24, 2004. May acquired total assets and liabilities with a net carrying value of $1,563 million in exchange for $3,240 million cash consideration, resulting in a gain on the sale of $1,677 million or $1.14 per share.

On July 29, 2004, we agreed to sell the remaining Mervyn’s retail stores and distribution centers to an investment consortium including Sun Capital Partners, Inc., Cerberus Capital Management, L.P., and Lubert-Adler/Klaff and Partners, L.P. and to sell Mervyn’s credit card receivables to GE Consumer Finance, a unit of General Electric Company, for total cash consideration of $1,641 million. This sale transaction was completed as of August 28, 2004, resulting in a gain of $322 million or $.22 per share.

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the financial results of Marshall Field’s and Mervyn’s are reported as discontinued operations for all periods presented.

In connection with the sale of Marshall Field’s, May is purchasing transition support services from us until the end of first quarter 2005. We are providing transition services to the buyer of Mervyn’s for a fee until the earlier of August 2007 or the date on which an alternative long-term solution for providing these services is in place. The fees received for providing these services exceed our marginal costs, but when an allocable share of our fixed costs is included, the consideration received is essentially equal to our total costs.

The financial results included in discontinued operations were as follows:

	January 29,		January 31,		February 1,
(millions)	2005		2004		2003

Revenue	$	3,095	$	6,138	$	6,507
Earnings from discontinued operations before income taxes	121		306		399
Earnings from discontinued operations, net of $46, $116 and $152 tax, respectively	75		190		247
Gain on sale of discontinued operations, net of $761 tax	1,238		—		—
Total income from discontinued operations, net of tax	$	1,313	$	190	$	247

There were no assets or liabilities of Marshall Field’s or Mervyn’s included in our Consolidated Statements of Financial Position at January 29, 2005. The major classes of assets and liabilities of discontinued operations in the Consolidated Statements of Financial Position on January 31, 2004 were as follows:

	January 31,
(millions)	2004

Cash and cash equivalents	$	8
Accounts receivable, net	1,155
Inventory	812
Other	117
Current assets of discontinued operations	$	2,092
Property and equipment, net	$	1,816
Other	118
Non-current assets of discontinued operations	$	1,934
Accounts payable	$	492
Accrued liabilities	330
Current portion of long-term debt and notes payable	3
Current liabilities of discontinued operations	$	825
Long-term debt	$	62
Deferred income taxes	—
Other	204
Non-current liabilities of discontinued operations	$	266

Earnings per Share

Basic earnings per share (EPS) is net earnings divided by the average number of common shares outstanding during the period. Diluted EPS includes the incremental shares that are assumed to be issued on the exercise of stock options.

(millions, except	Basic EPS						Diluted EPS
per share data)	2004		2003		2002		2004		2003		2002

Net earnings	$	3,198	$	1,809	$	1,623	$	3,198	$	1,809	$	1,623
Basic weighted average common shares outstanding	903.8		911.0		908.0		903.8		911.0		908.0
Stock options	—		—		—		8.3		8.2		6.3
Weighted average common shares outstanding	903.8		911.0		908.0		912.1		919.2		914.3
Earnings per share	$	3.54	$	1.99	$	1.79	$	3.51	$	1.97	$	1.78

The shares related to stock options shown above do not include shares issuable upon exercise of approximately 4.5 million and 13.2 million at January 31, 2004 and February 1, 2003, respectively, because the effect would have been antidilutive. There were no antidilutive shares issuable upon exercise at January 29, 2005.

Other Comprehensive Income

Other comprehensive income includes revenues, expenses, gains and losses that are excluded from net earnings under GAAP. In 2004 and 2003, other comprehensive income primarily included gains and losses on certain hedge transactions and the change in our minimum pension liability, net of related taxes.

Cash Equivalents

Cash equivalents represent short-term investments with a maturity of three months or less from the time of purchase and were $1,732 million, $244 million and $357 million in 2004, 2003 and 2002, respectively. The increase of $1,488 in 2004 compared to 2003 is primarily due to investment of the remaining proceeds at year end from the divestitures of Marshall Field’s and Mervyn’s.

Accounts Receivable

Accounts receivable are recorded net of an allowance for expected losses. The allowance, recognized in an amount equal to the anticipated future write-offs based on delinquencies, risk scores, aging trends, industry risk trends and our historical experience, was $387 million at January 29, 2005 and $352 million at January 31, 2004.

Through our special purpose subsidiary, Target Receivables Corporation (TRC), we transfer, on an ongoing basis, substantially all of our receivables to the Target Credit Card Master Trust (the Trust) in return for certificates representing undivided interests in the Trust’s assets. TRC owns the undivided interest in the Trust’s assets, other than the Trust’s assets securing the financing transactions entered into by the Trust and the 2 percent of Trust assets held by Target National Bank (TNB). TNB is a wholly owned subsidiary of the Corporation that also services receivables. SFAS No. 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (a replacement of SFAS No. 125)” is the accounting guidance applicable to such transactions. SFAS No. 140 requires that we include the receivables within the Trust and any debt securities issued by the Trust in our Consolidated Statement of Financial Position. Notwithstanding this accounting treatment, the receivables within the Trust are owned by our wholly-owned, bankruptcy remote subsidiary, TRC, and thus are not available to general creditors of Target.

Inventory

Substantially all of our inventory and the related cost of sales are accounted for under the retail inventory accounting method using the last-in, first-out (LIFO) basis. Inventory is stated at the lower of LIFO cost or market. Inventory also includes a LIFO provision that is calculated based on inventory levels, markup rates and internally generated retail price indices. Our only accumulated LIFO reserve relates to Target Commercial Interiors and is immaterial to our consolidated financial statements. Because we have experienced price deflation recently, we have not recorded a LIFO provision for Target Stores.

Other Current Assets

Other current assets as of January 29, 2005 and January 31, 2004 consist of the following:

	2004		2003
Vendor income and other receivables	$	428	$	391
Deferred taxes	344		236
Other	452		373
Total	$	1,224	$	1,000

In addition to vendor income, other receivables relate primarily to pharmacy receivables and merchandise sourcing services provided to third parties.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives. Depreciation expense for the years 2004, 2003 and 2002 was $1,232 million, $1,068 million and $942 million, respectively. Accelerated depreciation methods are generally used for income tax purposes. Repair and maintenance costs were $453 million, $393 million and $355 million in 2004, 2003 and 2002, respectively.

Estimated useful lives by major asset category are as follows:

Asset		Life (in years)
Buildings and improvements		8-39
Fixtures and equipment		4-15
Computer hardware and software		4

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” all long-lived assets are reviewed when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We review assets at the lowest level for which there are identifiable cash flows, which is usually at the store level. The carrying amount of the store assets is compared to the expected undiscounted future cash flows to be generated by those assets over the estimated remaining useful life of the store. Cash flows are projected for each store based upon historical results and expectations. In cases where the expected future cash flows and fair value are less than the carrying amount of the assets, those stores are considered impaired and the assets are written down to fair value. Fair value is based on appraisals or other reasonable methods to estimate fair value. Impairment losses are included in depreciation expense for assets held and in use and included within selling, general and administrative expense on assets classified as held for sale. No impairments were recorded in 2004 or 2003 as a result of the tests performed.

Other Non-current Assets

Other non-current assets as of January 29, 2005 and January 31, 2004 consist of the following:

	2004		2003
Prepaid pension expense	$	711	$	580
Cash value of life insurance	439		363
Goodwill and intangible assets	206		229
Other	155		205
Total	$	1,511	$	1,377

Goodwill and Intangible Assets

Goodwill and intangible assets are recorded within other non-current assets at cost less accumulated amortization. Amortization is computed on intangible assets with definite useful lives using the straight-line method over estimated useful lives that range from three to fifteen years. Amortization expense for the years 2004, 2003 and 2002 was $27 million, $30 million and $25 million, respectively. At January 29, 2005 and January 31, 2004, goodwill and intangible assets by major classes were as follows:

							Leasehold
							Acquisition
	Goodwill						Costs						Other						Total
(millions)	2004			2003			2004			2003			2004			2003			2004			2003

Gross asset	$	80		$	80		$	185		$	182		$	201		$	200		$	466		$	462
Accumulated amortization	(20		)	(20		)	(52		)	(34		)	(188		)	(179		)	(260		)	(233		)
Net goodwill and intangible assets	$	60		$	60		$	133		$	148		$	13		$	21		$	206		$	229

As required, we adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” during the first quarter of 2002. In 2004, 2003 and 2002, the adoption of this statement reduced annual amortization expense of certain intangible assets by approximately $5 million (less than $.01 per share). The estimated aggregate amortization expense of our definite-lived intangible assets for each of the five succeeding fiscal years, 2005 to 2009, is expected to be $24 million, $22 million, $20 million, $19 million and $19 million, respectively. During 2004, goodwill with an approximate carrying value of $63 million was sold as part of the Marshall Field’s transaction. There was no goodwill included in the Mervyn’s sale transaction that also occurred in 2004.

Discounted cash flow models were used in determining fair value for the purposes of the required annual goodwill impairment analysis. No impairments were recorded in 2004, 2003 and 2002 as a result of the tests performed.

Accounts Payable

Our accounting policy is to reduce accounts payable when checks to vendors clear the bank from which they were drawn. Outstanding checks included in accounts payable were $992 million and $966 million at year-end 2004 and 2003, respectively.

Accrued Liabilities

Accrued liabilities as of January 29, 2005 and January 31, 2004 consist of the following:

	2004		2003
Wages and benefits	$	412	$	369
Taxes payable	287		245
Gift card liability	214		169
Other	720		505
Total	$	1,633	$	1,288

Taxes payable consist of real estate, employee withholdings and sales tax liabilities. Gift card liability represents the amount of gift cards that have been issued but have not been presented for redemption.

Commitments and Contingencies

At January 29, 2005, our obligations included notes and debentures of $9,447 million (discussed in detail under Notes Payable and Long-term Debt below), the present value of capital lease obligations of $91 million and total future payments of operating leases with total contractual lease payments of $3,049 million, including certain options to extend the lease term that are expected to be exercised in the amount of $1,415 million (discussed in detail under Leases on page 32). In addition, commitments for the purchase, construction, lease or remodeling of real estate, facilities and equipment were approximately $544 million at year-end 2004. Merchandise royalty commitments of approximately $102 million are due during the five-year period ending in 2009. Throughout the year, we enter into various commitments to purchase inventory. In addition to the accounts payable reflected in our Consolidated Statements of Financial Position on page 25, we had commitments with various vendors for the purchase of inventory as of January 29, 2005. These purchase commitments are cancelable by their terms.

We expect to receive a share of the proceeds from the $3 billion Visa/MasterCard antitrust litigation settlement, as we are a member of the class action lawsuit. However, the amount and timing of the payment are not certain at this time.

We are exposed to claims and litigation arising out of the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents. Our policy is to disclose pending lawsuits and other known claims that we expect may have a material impact on our results of operations, cash flows or financial condition. Other than the matter discussed above, we do not believe any of the currently identified claims and litigated matters meet this criterion, either individually or in the aggregate.

Notes Payable and Long-term Debt

At January 29, 2005, no notes payable were outstanding. The average amount of notes payable outstanding during 2004 was $55 million at a weighted average interest rate of 1.3 percent. In 2004, notes payable balances fluctuated significantly during the year due to seasonal financing needs, proceeds from sale of Marshall Field’s and Mervyn’s and other factors. On July 28, 2004, our short-term borrowing reached $1,422 million, its highest level for the year.

At January 31, 2004, no notes payable were outstanding. The average amount of notes payable outstanding during 2003 was $377 million at a weighted average interest rate of 1.2 percent. On October 31, 2003, our short-term borrowing reached $1,409 million, its highest level for the year.

At January 29, 2005, two committed credit agreements totaling $1,600 million were in place through a group of 25 banks at specified rates. Of these credit lines, an $800 million credit facility expires in June 2005 and includes a one-year term-out option to June 2006. The remaining $800 million credit facility expires in June 2008. There were no balances outstanding at any time during 2004 or 2003 under these agreements.

In 2004, we issued no long-term debt. We called or repurchased $542 million of long-term debt with an average remaining life of 24 years and a weighted average interest rate of 7.0 percent, resulting in a pre-tax loss of $89 million (approximately $.06 per share), reflected in interest expense.

In 2003, we issued $500 million of long-term debt maturing in 2008 at 3.38 percent, $200 million of long-term debt maturing in 2018 at 4.88 percent and $500 million of long-term debt maturing in 2013 at 4.00 percent. We also called or repurchased $297 million of long-term debt with an average remaining life of 20 years and a weighted average interest rate of 7.8 percent, resulting in a pre-tax loss of $15 million (approximately $.01 per share), reflected in interest expense.

The portion of long-term debt secured by credit card receivables was $750 million at January 29, 2005. On January 31, 2004, we had $1,500 million of long-term debt secured by credit card receivables, $750 million of which was classified as current portion of long-term debt.

At year-end, our debt portfolio, including adjustments related to swap transactions discussed in the following derivatives section, was as follows:

Notes Payable and Long-term Debt

	January 29, 2005					January 31, 2004
(millions)	Rate *		Balance			Rate *		Balance
Notes payable	—	%	$	—		—	%	$	—
Notes and debentures:
Due 2004-2008	4.0		4,045			3.1		4,953
Due 2009-2013	5.9		3,726			5.8		3,795
Due 2014-2018	3.3		234			2.3		227
Due 2019-2023	9.3		213			9.3		214
Due 2024-2028	6.7		325			6.7		400
Due 2029-2033	6.6		904			6.7		1,300

Total notes payable, notes and debentures **	5.2	%	$	9,447		4.7	%	$	10,889
Capital lease obligations			91					129
Less: current portion			(504		)			(863		)
Notes payable and long-term debt			$	9,034				$	10,155

* Reflects the weighted average stated interest rate as of year-end, including the impact of interest rate swaps.

** The estimated fair value of total notes payable, notes and debentures, using a discounted cash flow analysis based on our incremental interest rates for similar types of financial instruments, was $10,171 million at January 29, 2005 and $11,681 million at January 31, 2004.

Required principal payments on long-term debt over the next five years, excluding capital lease obligations, are $501 million in 2005, $751 million in 2006, $1,321 million in 2007, $1,451 million in 2008 and $751 million in 2009.

Derivatives

Our derivative instruments are primarily interest rate swaps which hedge the fair value of certain debt by effectively converting interest from a fixed rate to a variable rate. We also hold derivative instruments to manage our exposure to risks associated with the effect of equity market returns on our non-qualified defined contribution plans as discussed on page 34.

At January 29, 2005 and January 31, 2004, interest rate swaps were outstanding in notional amounts totaling $2,850 million and $2,150 million, respectively. The change in market value of an interest rate swap as well as the offsetting change in market value of the hedged debt is recognized into earnings in the current period. Ineffectiveness would result when changes in the market value of the hedged debt are not completely offset by changes in the market value of the interest rate swap. There was no ineffectiveness recognized in 2004 or 2003 related to these instruments. The fair value of outstanding interest rate swaps and net unamortized gains from terminated interest rate swaps was $45 million at January 29, 2005 and $97 million at January 31, 2004.

During 2004, we entered into two interest rate swaps with notional amounts of $200 million and two interest rate swaps with notional amounts of $250 million. We also terminated an interest rate swap with a notional amount of $200 million, resulting in a loss of $16 million that will be amortized into expense over the remaining life of the hedged debt. During 2003, we entered into interest rate swaps with notional amounts of $200 million, $500 million and $400 million. We also terminated an interest rate swap with a notional amount of $400 million, resulting in a gain of $24 million that will be amortized into income over the remaining life of the hedged debt. In 2004 and 2003, the gains and losses amortized into income for terminated swaps were not material to our results of operations.

Interest Rate Swaps Outstanding at Year-end

(millions)

January 29, 2005						January 31, 2004
Notional		Receive		Pay		Notional		Receive		Pay
Amount		Fixed		Floating *		Amount		Fixed		Floating *
$	500	7.5	%	2.4	%	$	500	7.5	%	1.2	%
200		5.8		3.3		—		—		—
550		4.6		3.3		550		4.6		1.3
500		4.4		3.2		500		4.4		1.2
400		4.4		3.3		400		4.4		1.4
200		3.9		2.4		—		—		—
250		3.8		2.5		—		—		—
250		3.8		2.4		—		—		—
—		—		—		200		4.9		1.1
$	2,850					$	2,150

* Reflects floating interest rate accrued at the end of the year.

The weighted average life of the interest rate swaps was approximately 3 years at January 29, 2005.

Leases

Assets held under capital leases are included in property and equipment and are charged to depreciation and interest over the life of the lease. Operating leases are not capitalized and lease rentals are expensed on a straight-line basis over the life of the lease. Rent expense on buildings, classified in selling, general and administrative expense, includes percentage rents that are based on a percentage of retail sales over contractual levels. Total rent expense was $240 million in 2004, $150 million in 2003 and $150 million in 2002. Most of the long-term leases include options to renew, with terms varying from one to 50 years. Certain leases also include options to purchase the property.

Future minimum lease payments required under noncancelable lease agreements existing at January 29, 2005, were:

Future Minimum Lease Payments

	Operating			Capital
(millions)	Leases			Leases

2005	$	146		$	12
2006	142			12
2007	137			13
2008	117			13
2009	102			12
After 2009	2,405			127
Total future minimum lease payments	$	3,049	***	$	189
Less: Interest *				(98		)
Present value of minimum capital lease payments				$	91	**

* Calculated using the interest rate at inception for each lease.

** Includes current portion of $3 million.

*** Total contractual lease payments include certain options to extend lease terms, in the amount of $1,415, that are expected to be exercised because the investment in leasehold improvement is significant.

Income Taxes

Reconciliation of tax rates is as follows:

Tax Rate Reconciliation

	2004		2003		2002
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	3.3		3.3		3.4
Dividends on ESOP stock	(0.2	)	(0.2	)	(0.2	)
Work opportunity tax credits	(0.2	)	(0.2	)	(0.2	)
Other	(0.1	)	(0.1	)	0.2
Effective tax rate	37.8	%	37.8	%	38.2	%

The components of the provision for income taxes were:

Income Tax Provision: Expense

(millions)	2004		2003		2002
Current:
Federal	$	908	$	669	$	550
State	144		107		93
	1,052		776		643
Deferred:
Federal	83		184		185
State	11		24		23
	94		208		208
Total	$	1,146	$	984	$	851

The components of the net deferred tax asset/(liability) were:

Net Deferred Tax Asset/(Liability)

	January 29,			January 31,
(millions)	2005			2004
Gross deferred tax assets:
Deferred compensation	$	332		$	297
Self-insured benefits	179			143
Accounts receivable valuation allowance	147			133
Inventory	47			44
Postretirement health care obligation	38			42
Other	128			53
	871			712
Gross deferred tax liabilities:
Property and equipment	(1,136		)	(806		)
Pension	(268		)	(218		)
Other	(96		)	(84		)
	(1,500		)	(1,108		)
Total	$	(629	)	$	(396	)

In the Consolidated Statement of Financial Position, the current deferred tax asset balance is the net of all current deferred tax assets and current deferred tax liabilities. The non-current deferred tax liability is the net of all non-current deferred tax assets and non-current deferred tax liabilities.

Approximately $566 million of the proceeds attributable to the real properties sold in the Marshall Field’s and Mervyn’s dispositions were used to acquire replacement properties which will be used in our business. Approximately $371 million of the gain related to the sold real properties was deferred for income tax purposes as required by Section 1031 of the Internal Revenue Code until such time as the replacement properties are disposed.

Other Non-current Liabilities

Other non-current liabilities as of January 29, 2005 and January 31, 2004 consist of the following:

	2004		2003
Deferred compensation	$	528	$	464
Worker’s compensation and general liability	317		286
Other	192		167
Total	$	1,037	$	917

Share Repurchase

In June 2004, our Board of Directors authorized the repurchase of $3 billion of our common stock, which we expect to complete over two to three years. This authorization replaced our previous repurchase programs that were authorized by our Board of Directors in January 1999 and March 2000. We repurchased 29 million shares at an average price per share of $44.68 during 2004, at a total cost of $1,290 million.

Stock-based Compensation

We maintain a long-term incentive plan for key employees and non-employee members of our Board of Directors. Our long-term incentive plan allows for the grant of equity-based compensation awards, including stock options, performance share awards, restricted stock awards, or a combination of awards. A majority of the awards are non-qualified stock options that vest annually in equal amounts over a four-year period. Therefore, in accordance with SFAS No. 23R, we recognize compensation expense for these awards on a straight-line basis over the four-year vesting period. These options generally expire no later than ten years after the date of the grant. Options granted to the non-employee members of our Board of Directors vest after one year and have a ten-year term. Performance share awards represent shares issuable in the future based upon attainment of specified levels of future financial performance. We use a three or four year performance measurement period for performance share awards. The number of unissued common shares reserved for future grants under the stock-based compensation plans was 51,560,249 at January 29, 2005 and 19,279,658 at January 31, 2004.

Options and Performance Share Awards Outstanding

	Options									Performance
	Total Outstanding					Currently Exercisable				Shares
(options and shares	Number of		Average		Average	Number of	Average		Average	Potentially
in thousands)	Options		Price *		Life **	Options	Price *		Life **	Issuable
February 2, 2002	31,315		$	24.07	5.7	17,629	$	17.04	5.7	—
Granted	6,096		30.60							552
Canceled	(561	)	35.55
Exercised	(2,063	)	12.22

February 1, 2003	34,787		$	25.73	5.5	21,931	$	20.89	5.4	552
Granted	4,638		38.34							573
Canceled	(407	)	34.77
Exercised	(2,859	)	12.58

January 31, 2004	36,159		$	28.28	6.2	23,689	$	24.48	5.2	1,125
Granted	4,072		49.12							629
Canceled/forfeited	(513	)	35.32							(73	)
Exercised/earned	(7,727	)	20.95							(73	)
January 29, 2005	31,991		$	32.59	5.8	22,102	$	28.79	5.3	1,608

* Weighted average exercise price.

** Weighted average contractual life remaining in years.

Total compensation expense related to stock-based compensation, which is the total fair value of shares vested was $60 million, $57 million and $49 million, during 2004, 2003 and 2002, respectively. The weighted-average grant date fair value of options granted during 2004, 2003 and 2002 was $13.10, $11.04 and $10.07, respectively. The total intrinsic value of options (the amount by which the stock price exceeded the strike price of the option on the date of exercise) that were exercised during 2004, 2003 and 2002 was $201 million, $72 million and $66 million, respectively.

Nonvested Options and Performance Share Awards

	Weighted Average				Weighted Average
(options and shares in thousands)	Stock Options		Fair Value at Grant Date		Performance Shares		Fair Value at Grant Date
Nonvested at February 1, 2004	12,470		$	11.07	1,125		$	34.33
Granted	4,072		13.10		419		49.43
Vested/earned	(6,237	)	11.25		(73	)	34.44
Forfeited/cancelled	(416	)	11.00		(73	)	34.44
Nonvested at January 29, 2005	9,889		$	11.83	1,398		$	38.84

As of January 29, 2005, there was $104 million of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted under our plans. That cost is expected to be recognized over a weighted-average period of 1.5 years.

We have elected to adopt the provisions of SFAS No. 123R in 2004 under the modified retrospective transition method. The beginning balances of deferred taxes, paid-in capital and retained earnings for 2003 have been restated by $54 million, $143 million and $90 million, respectively, to recognize compensation cost for fiscal years 1996 through 2002 in the amounts previously reported in the Notes to Consolidated Financial Statements under the provisions of SFAS No. 123. The requirements of SFAS No. 123R are discussed on page 23.

The Black-Scholes model was used to estimate the fair value of the options at grant date based on the following assumptions:

	2004		2003		2002
Dividend yield	.7	%	.8	%	.8	%
Volatility	22	%	29	%	35	%
Risk-free interest rate	3.8	%	3.0	%	3.0	%
Expected life in years	5.5		5.0		5.0

Defined Contribution Plans

Employees who meet certain eligibility requirements can participate in a defined contribution 401(k) plan by investing up to 80 percent of their compensation. Highly compensated employees, however, are further limited by federal law and related regulation. Subject to these limits, we match 100 percent of each employee’s contribution up to 5 percent of total compensation. Our contribution to the plan is initially invested in Target Corporation common stock but once vested after a period of three years the amounts are free to be diversified. Benefits expense related to these matching contributions was $118 million, $117 million and $111 million in 2004, 2003 and 2002, respectively.

In addition, we maintain other non-qualified, unfunded plans that allow participants who are otherwise limited by qualified plan statutes or regulations. They can defer compensation including remaining company match amounts, and earn returns tied to the results of either our 401(k) plan investment choices, including Target stock, or in the case of a frozen plan, market levels of interest rates, plus an additional return determined by the terms of each plan. We recognized benefits expense for these non-qualified plans of $63 million and $86 million in 2004 and 2003, respectively, and income of $20 million in 2002. We manage the risk of offering these retirement savings plans through a variety of activities, which include investing in vehicles that offset a substantial portion of our exposure to these returns. Including the impact of these related investments, net benefits expense from these plans was $23 million, $28 million, and $16 million in 2004, 2003, and 2002, respectively. We adjusted our position in some of the investment vehicles resulting in the repurchase of 0.8 million, 1.5 million and 0.5 million shares of our common stock in 2004, 2003 and 2002, respectively.

In 2004 and 2003, certain retired executives accepted our offer to exchange our obligation to them under our frozen non-qualified plan for cash or deferrals in our current non-qualified plans, which resulted in expense of $17 million in both years. Additionally, during 2002, certain non-qualified pension and survivor benefits owed to current executives were exchanged for deferrals in our current non-qualified plans and certain retired executives accepted our offer to exchange our obligation to them in our frozen non-qualified plan for deferrals in our current plans. These exchanges resulted in expense of $33 million. We expect lower future expenses as a result of these transactions because they were designed to be economically neutral or slightly favorable to us.

Participants in our non-qualified plans deferred compensation of $33 million, $42 million and $35 million in 2004, 2003 and 2002, respectively.

Pension and Postretirement Health Care Benefits

We have a qualified defined benefit pension plan that covers all U.S. employees who meet certain age, length of service and hours worked per year requirements. We also have unfunded non-qualified pension plans for employees who have qualified plan compensation restrictions. Benefits are provided based upon years of service and the employee’s compensation. Retired employees also become eligible for certain health care benefits if they meet minimum age and service requirements and agree to contribute a portion of the cost. Prior to the end of 2004, but after the measurement date, we merged our three qualified U.S. pension plans into one plan. The expected impact of this merger on future accounting results is immaterial.

The Medicare Prescription Drug, Improvements and Modernization Act of 2003 (the Act) was signed into law in December 2003. As a result of the Act we recorded a reduction in our accumulated post-retirement benefit obligation of $7 million in 2004. In addition, the expense amounts shown in the table below reflect a $1 million reduction due to the amortization of the actuarial gain and reduction in interest cost due to the effects of the Act.

Obligations and Funded Status at October31, 2004

	Pension Benefits												Postretirement
							Non-qualified						Health Care
	Qualified Plans						Plans						Benefits
(millions)	2004			2003			2004			2003			2004			2003
Change in Benefit Obligation
Benefit obligation at beginning of measurement period	$	1,333		$	1,078		$	29		$	23		$	123		$	116
Service cost	78			73			1			1			3			2
Interest cost	82			74			2			2			7			8
Actuarial loss	68			164			4			6			(6		)	7
Benefits paid	(65		)	(56		)	(3		)	(3		)	(13		)	(10		)
Plan amendments	19			—			1			—			(7		)	—
Settlement	—			—			—			—			—			—
Benefit obligation at end of measurement period	$	1,515		$	1,333		$	34		$	29		$	107		$	123
Change in Plan Assets
Fair value of plan assets at beginning of measurement period	$	1,405		$	1,058		$	—		$	—		$	—		$	—
Actual return on plan assets	157			203			—			—			—			—
Employer contribution	201			200			3			3			13			10
Benefits paid	(65		)	(56		)	(3		)	(3		)	(13		)	(10		)
Fair value of plan assets at end of measurement period	$	1,698		$	1,405		$	—		$	—		$	—		$	—
Funded status	$	183		$	72		$	(34	)	$	(29	)	$	(107	)	$	(123	)
Unrecognized actuarial loss	584			587			15			12			6			12
Unrecognized prior service cost	(39		)	(65		)	2			3			—			1
Net amount recognized	$	728		$	594		$	(17	)	$	(14	)	$	(101	)	$	(110	)

Amounts recognized in the Statements of Financial Position consist of:

	Pension Benefits												Postretirement
							Non-qualified						Health Care
	Qualified Plans						Plans						Benefits
(millions)	2004			2003			2004			2003			2004			2003
Prepaid benefit cost	$	733		$	600		$	—		$	—		$	—		$	—
Accrued benefit cost	(11		)	(6		)	(24		)	(20		)	(101		)	(110		)
Intangible assets	—			—			2			3			n/a			n/a
Accumulated OCI	6			—			5			3			n/a			n/a
Net amount recognized	$	728		$	594		$	(17	)	$	(14	)	$	(101	)	$	(110	)

The accumulated benefit obligation for all defined benefit pension plans was $1,501 million and $1,237 million at October 31, 2004 and 2003, respectively. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with an accumulated benefit obligation in excess of plan assets were $49 million, $45 million and $5 million, respectively, as of October 31, 2004 and $34 million, $30 million and $1 million, respectively, as of October 31, 2003.

Net Pension and Postretirement Health Care Benefits Expense

	Pension Benefits									Postretirement Health Care Benefits
(millions)	2004			2003			2002			2004			2003		2002
Service cost benefits earned during the period	$	79		$	74		$	58		$	3		$	2	$	2
Interest cost on projected benefit obligation	84			75			75			7			8		8
Expected return on assets	(122		)	(114		)	(108		)	—			—		—
Recognized losses	36			18			10			1			1		1
Recognized prior service cost	(7		)	(7		)	1			—			—		—
Settlement/curtailment charges	1			—			(12		)	(7		)	—		—
Total	$	71		$	46		$	24		$	4		$	11	$	11

The amortization of any prior service cost is determined using a straight-line amortization of the cost over the average remaining service period of employees expected to receive benefits under the plan. Curtailment gains recorded in 2004 were a result of the sale of Marshall Field’s and Mervyn’s. These curtailment gains are included in the gain on disposal of discontinued operations as a result of freezing the benefits for Marshall Field’s and Mervyn’s employees and retaining the related assets and obligations of the plans.

Assumptions

Weighted average assumptions used to determine benefit obligations at October 31:

	Pension Benefits				Postretirement Health Care Benefits
	2004		2003		2004		2003
Discount rate	5.75	%	6.25	%	5.75	%	6.25	%
Average assumed rate of compensation increase	2.75	%	3.25	%	n/a		n/a

Weighted average assumptions used to determine net periodic benefit cost for years ended October 31:

	Pension Benefits				Postretirement Health Care Benefits
	2004		2003		2004		2003
Discount rate	6.25	%	7.00	%	6.25	%	7.00	%
Expected long-term rate of return on plan assets	8.00	%	8.50	%	n/a		n/a
Average assumed rate of compensation increase	3.25	%	4.00	%	n/a		n/a

Our rate of return on qualified plans’ assets has averaged 4.9 percent and 10.2 percent per year over the 5-year and 10-year periods, respectively, ending October 31, 2004 (our measurement date).

An increase in the cost of covered health care benefits of 6 percent was assumed for 2004. The rate is assumed to be 10 percent in 2005 and is reduced by 1 percent annually to 5 percent in 2010 and thereafter. The health care cost trend rate assumption may have a significant effect on the amounts reported.

A one percent change in assumed health care cost trend rates would have the following effects:

	1% Increase		1% Decrease
Effect on total of service and interest cost components of net periodic postretirement health care benefit cost	$	—	$	—
Effect on the health care component of the postretirement benefit obligation	$	4	$	(4	)

Additional Information

Our pension plan weighted average asset allocations at October 31, 2004 and 2003 by asset category are as follows:

Asset Category

	2004		2003
Equity securities	58	%	56	%
Debt securities	26		26
Other	16		18
Total	100	%	100	%

Our asset allocation strategy for 2005 targets 55 percent in equity securities, 25 percent in debt securities and 20 percent in other assets. Equity securities include our common stock in amounts substantially less than 1 percent of total plan assets at October 31, 2004 and 2003. Other assets include private equity, mezzanine and distressed debt and timber and less than a 5 percent allocation to real estate. Our expected long-term rate of return assumptions as of October 31, 2004 are 8.5 percent, 5 percent and 10 percent for equity securities, debt securities and other assets, respectively.

Contributions

Given the qualified pension plans’ funded position, we are not required to make any contributions in 2005. In similar situations in the past, we have chosen to make discretionary contributions for various purposes, including minimizing Pension Benefit Guaranty Corporation premium payments and maintaining the fully-funded status of the plans. In 2005, such discretionary contributions could range from $0 to $50 million. We expect to make contributions in the range of $5 million to $15 million to our other postretirement benefit plans in 2005.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

(millions)	Pension Benefits		Postretirement Health Care Benefits
2005	$	59	$	8
2006	62		8
2007	66		8
2008	70		9
2009	75		9
2010–2014	$	476	$	53

Quarterly Results (Unaudited)

Due to the seasonal nature of our business, fourth quarter operating results typically represent a substantially larger share of total year revenues and earnings due to the inclusion of the holiday shopping season. The same accounting policies are followed in preparing quarterly financial data as are followed in preparing annual data. The table below summarizes results by quarter for 2004 and 2003:

	First Quarter				Second Quarter				Third Quarter					Fourth Quarter					Total Year
(millions, except per share data)	2004		2003		2004		2003		2004		2003			2004			2003		2004				2003
Total revenues	$	10,180	$	8,928	$	10,556	$	9,594	$	10,909	$		9,827	$		15,194	$	13,676	$			46,839	$	42,025

Gross margin	$	3,140	$	2,706	$	3,268	$	2,874	$	3,300	$		2,909	$		4,529	$	4,050	$			14,237	$	12,539

Earnings from continuing operations	$	392	$	313	$	360	$	322	$	324	$		262	$		809	$	722	$		1,885		$	1,619

Earnings from discontinued operations, net of $25, $18, $19, $18, $2, $18, $62, $46 and $116 tax	$	40	$	29	$	31	$	29	$	4	$		31	$		—	$	101	$		75		$	190

Gain/(loss) on disposal of discontinued operations, net of $650, $132, $(21), and $761 tax (c)	$	—	$	—	$	1,019	$	—	$	203	$		—	$		16	$	—	$	1,238			$	—

Net earnings (a) (b)	$	432	$	342	$	1,410	$	351	$	531	$		293	$		825	$	823	$	3,198			$	1,809

Basic earnings per share (d)

Continuing operations	$	0.43	$	0.34	$	0.40	$	0.35	$	0.36	$		0.29	$		0.91	$	0.79	$	2.09			$	1.78

Discontinued operations	$	0.04	$	0.03	$	0.03	$	0.03	$	—	$		0.03	$		—	$	0.11	$	0.08			$	0.21

Gain from discontinued operations	$	—	$	—	$	1.12	$	—	$	0.23	$		—	$		0.01	$	—	$	1.37			$	—

Basic earnings per share (a) (b)	$	0.47	$	0.37	$	1.55	$	0.38	$	0.59	$		0.32	$		0.92	$	0.90	$	3.54			$	1.99

Diluted earnings per share (d)

Continuing operations	$	0.43	$	0.34	$	0.39	$	0.35	$	0.36	$		0.29	$		0.90	$	0.79	$	2.07			$	1.76

Discontinued operations	$	0.04	$	0.03	$	0.03	$	0.03	$	—	$		0.03	$		—	$	0.11	$	0.08			$	0.21

Gain from discontinued operations	$	—	$	—	$	1.11	$	—	$	0.23	$		—	$		0.01	$	—	$	1.36			$	—

Diluted earnings per share (a) (b)	$	0.47	$	0.37	$	1.53	$	0.38	$	0.59	$		0.32	$		0.91	$	0.90	$	3.51			$	1.97

Dividends declared per share (d)	$	.070	$	.060	$	.080	$	.070	$	.080	$		.070	$		.080	$	.070	$	.310			$	.270

Closing common stock price (e)

High	$	45.63	$	33.44	$	46.43	$	39.82	$	50.02	$	41.54		$		52.43	$	40.15	$	52.43			$	41.54

Low	$	38.59	$	26.06	$	40.80	$	33.06	$	40.42	$	37.55		$	48.50		$	37.05	$	38.59			$	26.06

(a) Net earnings for first, second and third quarter of 2004 and all four quarters of 2003 has been adjusted to reflect the impact of the SFAS No. 123R restatement for those periods. The amount of the restatement was $6 million for each of the three quarters in 2004 and $8 million for each of the four quarters in 2003. The restatement impact on per share amounts for each respective quarter was all less than $0.01 per share.

(b) Target adjusted its method of accounting for leases related to a specific category of owned store locations on leased land which resulted in a non-cash adjustment, primarily attributable to an increase in the straight-line rent accrual, of $65 million ($0.04 per share) in the fourth quarter of 2004.

(c) Minor tax adjustments related to the dispositions of Marshall Field’s and Mervyn’s were recorded in fourth quarter 2004.

(d) Per share amounts are computed independently for each of the quarters presented. The sum of the quarters may not equal the total year amount due to the impact of changes in average quarterly shares outstanding.

(e) Our common stock is listed on the New York Stock Exchange and Pacific Exchange. At March 21, 2005, there were 18,030 registered shareholders and the closing common stock price was $50.28 per share.

Report of Independent Registered Public Accounting Firm
on Consolidated Financial Statements

The Board of Directors and Shareholders

Target Corporation

We have audited the accompanying consolidated statements of financial position of Target Corporation and subsidiaries as of January 29, 2005, and January 31, 2004, and the related consolidated results of operations, cash flows and shareholders’ investment for each of the three years in the period ended January 29, 2005. These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Target Corporation and subsidiaries at January 29, 2005, and January 31, 2004, and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 29, 2005, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the PCAOB (United States), the effectiveness of the Corporation’s internal control over financial reporting as of January 29, 2005, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 25, 2005, expressed an unqualified opinion thereon.

As discussed in the Stock-based Compensation note to the financial statements, effective February 1, 2004, the Corporation adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” using the modified retrospective transition method.

Minneapolis, Minnesota	/s/ Ernst & Young LLP
March 25, 2005

Report of Management on Internal Control

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we assessed the effectiveness of our internal control over financial reporting as of January 29, 2005 based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment we conclude that the Corporation’s internal control over financial reporting is effective based on those criteria.

Our management’s assessment of the effectiveness of our internal control over financial reporting as of January 29, 2005 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

/s/ Robert J. Ulrich		/s/ Douglas A. Scovanner
Robert J. Ulrich		Douglas A. Scovanner
Chairman of the Board and		Executive Vice President and
Chief Executive Officer		Chief Financial Officer
March 25, 2005

Report of Independent Registered Public Accounting Firm
on Internal Control over Financial Reporting

The Board of Directors and Shareholders

Target Corporation

We have audited management’s assessment, included in the accompanying Report of Management on Internal Control, that Target Corporation and subsidiaries maintained effective internal control over financial reporting as of January 29, 2005, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Corporation’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Target Corporation and subsidiaries maintained effective internal control over financial reporting as of January 29, 2005, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Corporation maintained, in all material respects, effective internal control over financial reporting as of January 29, 2005, based on the COSO criteria.

We also have audited, in accordance with the standards of the PCAOB (United States), the consolidated statements of financial position of Target Corporation and subsidiaries as of January 29, 2005, and January 31, 2004, and the related consolidated results of operations, cash flows, and shareholders’ investment for each of the three years in the period ended January 29, 2005, of Target Corporation and subsidiaries, and our report dated March 25, 2005, expressed an unqualified opinion thereon.

Minneapolis, Minnesota	/s/ Ernst & Young LLP
March 25, 2005

Exhibit (21)

Target Corporation

(A Minnesota Corporation)

List of Subsidiaries

(As of January 29, 2005)

AMC Dominican Republic, S.A. (Dominican Republic)

AMC Guatemala Sociedad Anonima (Guatemala)

AMC Honduras, S.A. (Honduras)

AMC El Salvador, S.A. (El Salvador)

AMC Nicaragua, S.A. (Nicaragua)

AMC(s) Pte., Ltd. (Singapore)

Amcrest Corporation (NY)

Amcrest France Sarl (Paris, France)

The Associated Merchandising Corporation (NY)

Associated Merchandising Corporation GmBH (Frankfurt, Germany)

Associated Merchandising Korea Corporation (Korea)

Boulder Bridge I Development Corporation (MN)

Boulder Bridge II Development Corporation (MN)

Boulder Bridge III Development Corporation (CA)

Dayton Credit Company (MN)

Dayton Development Company (MN)

Deerfield Assumption LLC (DE)

Eighth Street Development Company (MN)

Highbridge Company (MN)

Highbridge Music Company (MN)

Merchant’s Festival LLC (GA)

Red Tail LLC (DE)

Retail Properties, Inc. (DE)

STL of Nebraska, Inc. (MN)

Strata Merchandising, Ltd. (London, England)

SuperTarget Liquor of Colorado, Inc. (MN)

SuperTarget Liquor of Missouri, Inc. (MN)

SuperTarget Liquor of Texas, Inc. (TX)

Target Bank (UT)

Target Brands, Inc. (MN)

Target Bridges, Inc. (DE)

Target Capital Corporation (MN)

Target Commercial Interiors, Inc. (MN)

Target Connect, Inc. (MN)

Target Customs Brokers, Inc. (MN)

Target Foundation (a MN not-for-profit organization)

Target Global Trade, Inc. (MN)

Target Insurance Agency, Inc. (MN)

Target National Bank (a national banking association)

Target Technology Services India Private Limited (India)

Target Receivables Corporation (MN)

Target Services, Inc. (MN)

Target Stores, Inc. (MN)

Westbury Holding Company (MN)

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Annual Report (Form 10-K) of Target Corporation of our reports dated March 25, 2005, with respect to the consolidated financial statements of Target Corporation, Target Corporation management's assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Target Corporation, included in the 2004 Annual Report to Shareholders of Target Corporation.

Our audits also included the financial statement schedule of Target Corporation listed in Item 15(a). This schedule is the responsibility of Target Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We consent to the incorporation by reference in Registration Statement Numbers 333-65347 and 333-82500 on Form S-3 and Registration Statement Numbers 33-6918, 33-64013, 333-30311, 33-66050, 333-75782, 333-27435, 333-86373, 333-103920, 333-112260 and 333-116096 on Form S-8 of our reports dated March 25, 2005, with respect to the consolidated financial statements of Target Corporation, Target Corporation management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Target Corporation, incorporated by reference, and our report included in the proceeding paragraph with respect to the financial statement schedule of Target Corporation included, in this Annual Report (Form 10-K) of Target Corporation.

/s/ Ernst & Young LLP
Minneapolis, Minnesota
April 11, 2005

Exhibit 24

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of TARGET CORPORATION, a Minnesota corporation (the “Corporation”), does hereby make, constitute and appoint ROBERT J. ULRICH, DOUGLAS A. SCOVANNER, STEPHEN C. KOWALKE, TIMOTHY R. BAER, DAVID L. DONLIN and JEFFREY A. PROULX and each or any one of them, the undersigned’s true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as director and/or officer of the Corporation to (1) a Form 10-K, Annual Report, or other applicable form, pursuant to the Securities Exchange Act of 1934, as amended (the “1934 Act”), including any and all exhibits, schedules, supplements, certifications and supporting documents thereto, including, but not limited to, the Form 11-K Annual Reports of the Corporation’s 401(k) Plan and similar plans pursuant to the 1934 Act, and all amendments, supplementations and corrections thereto, to be filed by the Corporation with the Securities and Exchange Commission (the “SEC”), as required in connection with its registration under the 1934 Act, as amended; (2) one or more Forms 3, 4 or 5 pursuant to the 1934 Act and all related documents, amendments, supplementations and corrections thereto, to be filed with the SEC as required under the 1934 Act; and (3) one or more Registration Statements, on Form S-3, Form S-8, Form 144 or other applicable forms, and all amendments, including post-effective amendments, thereto, to be filed by the Corporation with the SEC in connection with the registration under the Securities Act of 1933, as amended, of debentures or other securities of the Corporation, and to file the same, with all exhibits thereto and other supporting documents, with the SEC.

The undersigned also grants to said attorneys-in-fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers herein expressly granted. This Power of Attorney shall remain in effect until revoked in writing by the undersigned.

IN WITNESS WHEREOF, the undersigned has signed below as of this 22nd day of January, 2005.


							/s/ Roxanne S. Austin
							Roxanne S. Austin

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 17th day of January, 2005.

							/s/ Calvin Darden
							Calvin Darden

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 13th day of January, 2005.

							/s/ Michele J. Hooper
							Michele J. Hooper

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 21st day of January, 2005.

							/s/ James A. Johnson
							James A. Johnson

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 17th day of January, 2005.

							/s/ Richard M. Kovacevich
							Richard M. Kovacevich

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 14th day of January, 2005.

							/s/ Anne M. Mulcahy
							Anne M. Mulcahy

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 26th day of January, 2005.

							/s/ Stephen W. Sanger
							Stephen W. Sanger

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 14th day of January, 2005.

							/s/ Warren R. Staley
							Warren R. Staley

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 24th day of January, 2005.

							/s/ George W. Tamke
							George W. Tamke

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 9th day of March, 2005.

							/s/ Solomon D. Trujillo
							Solomon D. Trujillo

TARGET CORPORATION

Power of Attorney

of Director and/or Officer

IN WITNESS WHEREOF, the undersigned has signed below as of this 21st day of January, 2005.

							/s/ Bob Ulrich
							Bob Ulrich

Exhibit (31)A

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Certifications

I, Robert J. Ulrich, certify that:

1. I have reviewed this Annual Report on Form 10-K of Target Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 11, 2005


/s/ Robert J. Ulrich
Robert J. Ulrich
Chairman of the Board and Chief Executive Officer

Exhibit (31)B

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Certifications

I, Douglas A. Scovanner, certify that:

1. I have reviewed this Annual Report on Form 10-K of Target Corporation;

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 11, 2005


/s/ Douglas A. Scovanner
Douglas A. Scovanner
Executive Vice President and Chief Financial Officer

Exhibit (32)A

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K (the “Form 10-K”) of Target Corporation, a Minnesota corporation (“the Company”), for the fiscal year ended January 29, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: April 11, 2005


/s/ Robert J. Ulrich
Robert J. Ulrich
Chairman of the Board and Chief Executive Officer

Exhibit (32)B

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 11, 2005


/s/ Douglas A. Scovanner
Douglas A. Scovanner
Executive Vice President and Chief Financial Officer

Exhibit 99.A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

(Mark One)

ý		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the fiscal year ended December 31, 2004

OR

o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from to

Commission File Number 1-6049

A. Full title of the plan and address of the plan, if different from that of the issuer named below: Target Corporation 401(k) Plan.

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

TARGET CORPORATION

1000 Nicollet Mall

Minneapolis, Minnesota 55403

AUDITED FINANCIAL STATEMENTS AND SCHEDULES

Target Corporation 401(k) Plan
Years Ended December 31, 2004 and 2003

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Form S-8, Nos. 33-66050, 333-27435, and 333-103920) pertaining to the Target Corporation 401(k) Plan of our report dated April 4, 2005, with respect to the financial statements and schedules of the Target Corporation 401(k) Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2004.

	/s/ Ernst & Young LLP

Minneapolis, Minnesota
April 11, 2005

Target Corporation 401(k) Plan

Audited Financial Statements and Schedules

Years Ended December 31, 2004 and 2003

Contents

Report of Independent Registered Public Accounting Firm

Audited Financial Statements

Statements of Net Assets Available for Benefits
Statements of Changes in Net Assets Available for Benefits
Notes to Financial Statements

Schedules

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
Schedule H, Line 4j – Schedule of Reportable Transactions

Report of Independent Registered Public Accounting Firm

The Board of Directors

Target Corporation

We have audited the accompanying statements of net assets available for benefits of the Target Corporation 401(k) Plan (the Plan) as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2004 and 2003, and the changes in net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2004, and reportable transactions for the year then ended are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee

Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the Plan’s management. These supplemental schedules have been subjected to the auditing procedures applied in the audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.

	/s/ Ernst & Young LLP

Minneapolis, Minnesota
April 4, 2005

Target Corporation 401(k) Plan

Statements of Net Assets Available for Benefits

(In Thousands)

December 31, 2004

	Total		Participant- Directed Funds			Non- Participant- Directed Employer Match Funds
Assets
Securities sold but not settled	$	4,958	$	1,851		$	3,107
Receivables:
Participants’ 401(k) and after-tax contributions	3,771		3,771			—
Employer contribution	2,344		—			2,344
Interest	2,357		2,321			36
Total receivables	8,472		6,092			2,380

Investments	4,520,249		2,696,886			1,823,363
Total assets	4,533,679		2,704,829			1,828,850

Liabilities
Expenses payable	58		37			21
Unsettled transfers	—		(338		)	338
Total liabilities	58		(301		)	359
Net assets available for benefits	$	4,533,621	$	2,705,130		$	1,828,491

See accompanying notes.

Target Corporation 401(k) Plan

Statements of Net Assets Available for Benefits (continued)

(In Thousands)

December 31, 2003

	Total		Participant- Directed Funds		Non- Participant- Directed Employer Match Funds
Assets
Securities sold but not settled	$	3,497	$	1,329	$	2,168
Receivables:
Participants’ 401(k) and after-tax contributions	33		33		—
Employer contribution	21		—		21
Interest	2,233		2,227		6
Total receivables	2,287		2,260		27

Investments	3,818,479		2,345,553		1,472,926
Total assets	3,824,263		2,349,142		1,475,121

Liabilities
Investment settlements payable	143		143		—
Expenses payable	178		164		14
Withdrawals payable to participants	201		145		56
Total liabilities	522		452		70
Net assets available for benefits	$	3,823,741	$	2,348,690	$	1,475,051

See accompanying notes.

Target Corporation 401(k) Plan

Statements of Changes in Net Assets Available for Benefits

(In Thousands)

Year Ended December 31, 2004

	Total			Participant- Directed Funds			Non- Participant- Directed Employer Match Funds
Participants’ 401(k) and after-tax contributions	$	202,727		$	202,727		$	—
Employer contributions	122,447			—			122,447
Investment income:
Interest (net)	28,714			27,618			1,096
Dividends	17,794			6,680			11,114
Total investment income	46,508			34,298			12,210
	371,682			237,025			134,657

Distributions to participants	(550,618		)	(459,842		)	(90,776		)
Trustee fees	(1,085		)	(790		)	(295		)
Administration fees	(9,377		)	(5,824		)	(3,553		)
	(561,080		)	(466,456		)	(94,624		)

Net realized and unrealized appreciation in fair value of investments	899,278			536,243			363,035
Interfund transfers	—			49,628			(49,628		)
Net increase	709,880			356,440			353,440

Net assets available for benefits at beginning of year	3,823,741			2,348,690			1,475,051
Net assets available for benefits at end of year	$	4,533,621		$	2,705,130		$	1,828,491

See accompanying notes.

Target Corporation 401(k) Plan

Statements of Changes in Net Assets Available for Benefits (continued)

(In Thousands)

Year Ended December 31, 2003

	Total			Participant- Directed Funds			Non- Participant- Directed Employer Match Funds
Participants’ 401(k) and after-tax contributions	$	190,308		$	190,308		$	—
Employer contributions	116,624			—			116,624
Investment income:
Interest (net)	25,887			24,781			1,106
Dividends	16,267			6,199			10,068
Total investment income	42,154			30,980			11,174
	349,086			221,288			127,798

Distributions to participants	(271,391		)	(198,505		)	(72,886		)
Trustee fees	(869		)	(536		)	(333		)
Administration fees	(8,819		)	(5,592		)	(3,227		)
	(281,079		)	(204,633		)	(76,446		)

Net realized and unrealized appreciation in fair value of investments	683,969			364,915			319,054
Interfund transfers	—			70,021			(70,021		)
Net increase	751,976			451,591			300,385

Net assets available for benefits at beginning of year	3,071,765			1,897,099			1,174,666
Net assets available for benefits at end of year	$	3,823,741		$	2,348,690		$	1,475,051

See accompanying notes.

Target Corporation 401(k) Plan

Notes to Financial Statements

December 31, 2004

1. Description of the Plan

Employees of Target Corporation (the Company) who meet certain eligibility requirements of age and hours worked can participate in the Target Corporation 401(k) Plan (the Plan). Under the terms of the Plan, participants can invest up to 80% of their current gross cash compensation in the Plan, within Employee Retirement Income Security Act (ERISA) limits, in any combination of before-tax and/or after-tax contributions.

Participants identified as “highly compensated,” as defined by Internal Revenue Code (Code) Section 414(q), are not allowed to make after-tax contributions and are limited to contributions of up to 5% of gross cash compensation (to a limit of $205,000 of compensation) on a before-tax basis, subject to certain Internal Revenue Service (IRS) limitations.

The Company matches 100% of all participants’ 401(k) before- and after-tax contributions up to 5% of each participant’s gross cash compensation. The Company’s contributions to the Plan are invested in Company stock. These contributions are reflected in the column titled “Non-Participant-Directed Employer Match Funds” on the financial statements. Participants are allowed to direct the investment of employer match funds to other plan investment options upon achieving full vesting, as described below, in their employer match contributions. At December 31, 2004, $65 million of the $1.8 billion in investments classified as “Non-Participant-Directed Employer Match Funds” cannot be directed to other investment options because such full vesting has not yet been achieved.

Participants become 20% vested in employer matching contributions immediately upon meeting plan eligibility requirements, 40% one year later, 70% two years later, and fully vested three years after becoming eligible to participate in the Plan. Participant contributions are fully vested at all times. Participants who leave the Plan forfeit unvested Company contributions, which are then used to reduce future Company contributions. For the years ended December 31, 2004 and 2003, forfeitures were $4.322 million and $3.232 million, respectively. Pursuant to the sale of Marshall Field’s and Mervyn’s during the plan year, participants of these companies discontinued contributions to the Plan. In accordance with the sale, affected participants’ accounts became fully vested.

Participants may receive benefits upon termination, death, disability, or retirement as either a lump-sum amount equal to the vested value of their account or in installments, subject to certain plan restrictions. Participants may also withdraw some or all of their account balances prior to termination, subject to certain plan restrictions.

Expenses, including fund management fees (which are netted against investment interest income), trustee fees, monthly processing costs (including recordkeeping fees), quarterly statement preparation and distribution, and other third-party administrative expenses are the significant expenses paid by the Plan.

The Plan allows for two types of loans, one for the purchase of a primary residence, the other a general purpose loan, subject to certain restrictions, as defined in the Plan. Participants may have one of each outstanding at any given time. Repayment of loans, including interest, is allocated to participants’ investment accounts in accordance with each participant’s investment election in effect at the time of the repayment.

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts.

For more detailed information regarding the Plan, participants may refer to the Summary Plan Description (SPD) available from the Company.

2. Accounting Policies

Accounting Method

All investments are carried at fair market value except fully benefit-responsive investment contracts which are stated at contract value. Contract value represents contributions made under the contract, plus interest at the contract rate, less funds used to pay plan benefits. Common stock is valued at the quoted market price on the last business day of the plan year. Collective investment fund values are based on the fair value of the underlying securities (as determined by quoted market prices) as of the last business day of the plan year. Participant loans are valued at the unpaid principal balance, which approximates fair value.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

3. Investments (In Thousands)

The Plan allows participants to choose from among 14 investment funds. Participants may change their fund designations for past and future contributions on a daily basis.

The yield on the Plan’s investment contracts for the years ended December 31, 2004 and 2003, ranged from 4.53% to 5.17% and 5.07% to 5.75%, respectively. According to the contracts, rates are adjusted quarterly. Fair value of the investment contracts was estimated to be approximately 103% and 105% of contract value for the years ended December 31, 2004 and 2003, respectively. Under the contracts, the issuer does not guarantee payment of withdrawals at contract value as a result of premature termination of the contract by the Plan or upon plan termination.

Fair value for synthetic contracts was estimated based on the market values of the underlying securities. Related wrap instruments for synthetic contracts were valued at the difference between the fair value of the underlying securities and the contract value attributable by the wrapper to such assets.

The Plan’s investments are held by State Street Bank, the trustee. The Plan’s investments, including investments bought and sold as well as held during the year, appreciated in fair value as follows:

	Net Appreciation in Fair Value During Year
Year ended December 31, 2004:
Collective investment funds	$	96,670
Target Corporation common stock	802,608
	$	899,278
Year ended December 31, 2003:
Collective investment funds	$	154,583
Target Corporation common stock	529,386
	$	683,969

The fair value of individual investments representing 5% or more of the Plan’s net assets is as follows:

	December 31
	2004		2003

Target Corporation common stock	$	2,910,089	$	2,371,885

State Street Bank & Trust Co. Flagship S&P 500 Index Fund	260,605		249,491

AIG Financial Products Group Annuity Contract No. 130221	277,228		260,086

Pacific Mutual Life Insurance Co. Group Annuity Contract No. 26255	277,228		242,721

4. Transactions With Parties in Interest (In Thousands)

During the years ended December 31, 2004 and 2003, the Plan engaged in the following transactions related to the Company’s common stock:

	2004		2003

Number of common shares purchased	3,678		4,983
Cost of common shares purchased	$	161,231	$	173,356

Number of common shares sold	8,800		6,916
Market value of common shares sold	$	396,715	$	240,834
Cost of common shares sold	$	185,984	$	135,426

Number of common shares distributed in kind	608		306
Market value of common shares distributed in kind	$	28,920	$	10,797
Cost of common shares distributed in kind	$	13,271	$	6,005

Dividends received	$	17,794	$	16,266

During 2004 and 2003, the Plan received match-related dividends of $11.114 million and $10.068 million, respectively, on Target Corporation common stock.

5. Reconciliation of Financial Statements to Form 5500 (In Thousands)

The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:

	December 31
	2004			2003
Net assets available for benefits per the financial statements	$	4,533,621		$	3,823,741
Amounts payable to terminating participants	(1,026		)	(843		)
Net assets available for benefits per the Form 5500	$	4,532,595		$	3,822,898

The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:

	Year Ended December 31, 2004

Benefits paid to participants per the financial statements	$	550,618
Subtract amounts payable to terminating participants at December 31, 2003	(843		)
Add amounts payable to terminating participants at December 31, 2004	1,026
Benefits paid to participants per the Form 5500	$	550,801

6. Income Tax Status

The Plan has received a determination letter from the IRS dated September 12, 2001, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Subsequent to this issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan, as amended, is qualified and the related trust is tax-exempt.

Schedules

Target Corporation 401(k) Plan

EIN : 41-0215170

Plan #002

Schedule H, Line 4i – Schedule of Assets
(Held at End of Year)

December 31, 2004

Face Amount or Number of Shares/Units	Identity of Issue and Description of Investment	Cost		Market Value Current Value

CASH EQUIVALENTS

2,641,894	*State Street Bank & Trust Co. Short-Term Investment Fund	$	2,641,894	$	2,641,894

GROUP ANNUITY CONTRACTS

277,228,247	American International Life Group (AIG) Financial Products Group Annuity Contract No. 130221, 5.61%, due 7/1/04	277,228,247		277,228,247

277,228,247	Pacific Mutual Life Insurance Co. Group Annuity Contract No. 26255, 5.52%, due 1/1/10	277,228,247		277,228,247
	TOTAL GROUP ANNUITY CONTRACTS	554,456,494		554,456,494

COMINGLED INVESTMENT FUNDS

1,178,228	*State Street Bank & Trust Co. Flagship FD Series A	190,348,802		260,605,250

6,222,231	*State Street Bank & Trust Co. Bond Market Index Fund	98,072,298		110,556,600

153,549	Barclays Global Investors BGI Real Estate Fund	21,628,601		24,891,818

1,066,607	*State Street Bank & Trust Co. Treasury Inflation Protected	16,029,741		16,620,939

3,290,675	Northwest Bank Stable Return Fund	121,280,578		122,755,346

1,731,389	Managed Synthetic	20,000,000		26,269,059

Face Amount or Number of Shares/Units	Identity of Issue and Description of Investment	Cost		Market Value Current Value

COMINGLED INVESTMENT FUNDS (continued)

13,919,291	*State Street Bank & Trust Co. Russell 3000 Fund	$	117,001,263	$	135,866,195

5,434,496	*State Street Bank & Trust Co. Russell 2000 Fund	83,723,228		112,629,931

3,060,744	*State Street Bank & Trust Co. EAFE Series T	31,128,082		45,155,163

2,100,232	*State Street Bank & Trust Co. Daily EAFE	20,126,678		26,053,383

777,105	Barclays Global Investors U.S. Tactical Asset Allocation Fund F	12,471,348		14,345,360

1,917,916	*State Street Bank & Trust Co. Emerging Market Index Fund Series T	18,904,081		22,982,389

7,790,752	Barclays Global Investors S&P 500 Growth	72,040,207		78,788,837
	TOTAL COMINGLED INVESTMENT FUNDS	822,754,907		997,520,270

COMMON STOCK

56,038,685	*Target Corporation	1,220,069,699		2,910,088,912

PARTICIPANT LOANS

55,541,650	Participant loans, interest rates ranging from 5.00% to 5.25%	55,541,650		55,541,650
	TOTAL ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR	$	2,655,464,644	$	4,520,249,220

*Indicates a party in interest to the Plan.

Target Corporation 401(k) Plan

EIN : 41-0215170

Plan #002

Schedule H, Line 4j – Schedule of Reportable Transactions

Year Ended December 31, 2004

Identity of Party Involved	Description of Asset	Purchase Price		Selling Price		Cost of Asset		Current Value of Asset on Transaction Date		Net Gain/ (Loss)

Category (iii) – Series of Transactions in Excess of 5% of Plan Assets

Norwest Bank	120 purchase transactions	$	478,517,946			$	478,517,946	$	478,517,946
Stable Return Fund	149 sales transactions			$	529,985,098	525,492,027		529,985,098		$	4,493,071

State Street Bank & Trust Co.	Purchased 702,496,988 units in 245 transactions	702,496,988				702,496,988		702,496,988
Short-Term Investment Fund	Sold 698,048,940 units in 258 transactions			698,048,940		698,048,940		698,048,940

Target Corporation	Purchased 3,678,437 units in 20 transactions	161,231,267				161,231,267		161,231,267
Common Stock	Sold 9,407,594 units in 281 transactions			425,635,703		362,723,102		425,635,703		62,912,601

There were no category (i), (ii), or (iv) transactions for the year ended December 31, 2004.

Exhibit 99C

Statements Relating to Forward-Looking Information

Target and its representatives may, from time to time, make written or oral forward-looking statements. Those statements relate to developments, results, conditions or other events that management expects or anticipates will occur in the future. Without limiting the foregoing, those statements may relate to future revenues, earnings, store openings and store conversions, market conditions, new strategies and the competitive environment. Forward-looking statements are based on management’s then current views and assumptions and, as a result, are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.

Any such forward-looking statements are qualified by the following, which contain certain of the important factors that could cause actual results to differ materially from those predicted by the forward-looking statements:

Competitive Pressures

The retail business is highly competitive. Each of our operations competes for customers, employees, locations, products, services and other important aspects of its business with many other local, regional and national retailers. Those competitors, some of which have a greater market presence than Target, include traditional and off-price store-based retailers, Internet and catalog businesses, drug stores, supermarkets, entertainment and travel providers and other forms of retail commerce. Unanticipated changes in the pricing and other practices of those competitors, including the effects of competitor liquidation activities, may impact our expected results.

Consumer Trends

It is difficult to predict what merchandise consumers will demand, particularly merchandise that is trend driven. A substantial part of our business is dependent on our ability to make trend right decisions for a wide variety of goods and services. Failure to accurately predict constantly changing consumer tastes, preferences, spending patterns and other lifestyle decisions could adversely affect short-term results and long-term relationships with our guests.

Credit Card Operations

Our credit card operations facilitate sales in our stores and generate additional revenue from fees related to extending credit. Our ability to extend credit to our guests depends on many factors including compliance with federal and state banking and consumer protection laws, any of which may change from time to time. Changes in credit card use, payment patterns and default rates may result from a variety of economic, legal, social and other factors that we cannot control or predict with certainty. Changes that adversely impact our ability to extend credit and collect payments could negatively affect our results. In addition, our finance charge revenue is subject to changes in market levels of interest rates.

General Economic Conditions

General economic factors that are beyond our control impact our forecasts and actual performance. These factors include interest rates, recession, inflation, deflation, consumer credit availability, consumer debt levels, tax rates and policy, unemployment trends, energy costs and other matters that influence consumer confidence and spending. Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude.

Labor Conditions and Costs

Our performance is dependent on attracting and retaining a large and growing number of quality team members. Many of those team members are in entry-level or part-time positions with historically high rates of turnover. Our ability to meet our labor needs while controlling our costs is subject to external factors such as unemployment levels, minimum wage legislation and changing demographics. In addition, our labor costs are influenced by heath care and workers’ compensation costs, both of which have been rising in recent years.

Product Sourcing

The products we sell are sourced from a wide variety of domestic and international vendors. All of our vendors must comply with applicable laws and our required standards of conduct. Our ability to find qualified vendors and access products in a timely and efficient manner is a significant challenge which is typically even more difficult with respect to goods sourced outside the United States. Political or financial instability, trade restrictions, tariffs, currency exchange rates, transport capacity and costs and other factors relating to foreign trade are beyond our control and could impact our business.

Other Factors

Other factors that could cause actual results to differ materially from those predicted include:

• weather;

• c hanges in the availability or cost of capital;

• the availability of suitable new store locations on acceptable terms;

• shifts in the seasonality of shopping patterns;

• labor strikes or other work interruptions;

• the impact of excess retail capacity in our markets;

• changes in the cost to us of accepting various payment methods, such as debit cards, and changes in the rate of utilization of these payment methods by our guests;

• material acquisitions or dispositions;

• investments in new business strategies;

• the success or failure of significant new business ventures or technologies;

• adverse results in material litigation;

• actions taken or omitted to be taken by legislative, regulatory, judicial and other governmental authorities and officials;

• our ability to react in a timely manner and maintain our critical business processes and information systems capabilities in a disaster recovery situation; or

• natural disasters, the outbreak of war, acts of terrorism or other significant national or international events.

The foregoing list of important factors is not exclusive and management does not undertake to revise any forward-looking statement to reflect events or circumstances that occur after the date the statement is made.