Target

2011 
Annual  
Report

TARGET 2011 ANNUAL REPORT

Financial 
Highlights
Total Revenues 
$69.87B

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( Earnings before Interest 
  Expense and Income Taxes )

EBIT 
$5.32B

Net Earnings 
$2.93B

Diluted EPS 
$4.28

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2011 Growth: 3.7%
Five-year CAGR: 3.3%

2011 Growth: 1.3%
Five-year CAGR: 1.0%

2011 Growth: 0.3%
Five-year CAGR: 1.0%

2011 Growth: 7.0%
Five-year CAGR: 5.9%

Sales Mix 
$68.5 Billion

25% 
Household 
Essentials

19% 
Hardlines

19% 
Apparel & 
Accessories

19% 
Food & 
Pet Supplies

18% 
Home 
Furnishings 
& Décor

Retail sales, does not include credit card revenues.

 
 
 
TARGET 2011 ANNUAL REPORT  |  1

To Our 
Shareholders
Target turns 50 this year, and, while our 2011 financial 
results represent a single-year’s achievement, it’s an 
achievement based on our nearly five decades in business.

Sales reached a new high of $68.5 billion, 
we set a new record for earnings per 
share, and our shopping experience clearly 
resonated with consumers across the 
country. All year long, our team executed 
with spirit, discipline and the thoughtful 
approach to innovation that comes 
with a half-century’s perspective. As a 
result, Target is well positioned to deliver 
continued profitable growth and meaningful 
shareholder reward. 

In 1962, discount retailing as we know it 
didn’t exist. Then, Target and our best-
known discount-store peers opened for 
business, responding to growing consumer 
demand for value and convenience—
demands that are still paramount today. 

When Target opened, we set out not only 
to meet these demands, but to create a 
different kind of experience. We believed 
we could offer our guests high-quality, well-
designed merchandise at low prices. We 
believed we could create a comfortable, 
fun shopping environment that offered 
the convenience of self service and a 
friendly team available to help. We believed 
we could save guests time by selling a 
well-curated assortment of groceries and 

commodities alongside fashions for their 
families and homes. And we believed 
it was our responsibility to help create 
strong, healthy, safe communities.  

These beliefs continue to guide our 
business and were evident throughout 
2011 in our: 

•	Differentiated	product	assortment—at	 
exceptional values—of trusted national 
brands, quality owned brands and 
exclusive offerings, including our design  
collaborations with Missoni and Calypso  
St. Barth and celebrity  partnerships 
with Shaun White and Gwen Stefani;
•	Ambitious	store-remodel	program,	

which, combined with new 
store openings, brought fresh-
food assortments and our latest 
merchandising reinventions to more 
than 400 additional stores in 2011;
•	Increased	investment	in	delivering	a	

superior brand experience that allows 
guests to shop where, when and how 
they like – and will attract more urban 
guests in 2012, as we open our new 
CityTarget stores, and more Canadian 
guests in 2013;

•	Even	stronger	guest	loyalty,	evidenced	
by more frequent visits and increased 

spending across categories by guests 
who saved an additional 5% when they 
used	their	Target	REDcard;

•	Fun	and	aspirational	marketing	approach	
that reflects guests as they are—and as 
they want to be;

•	Continuing	legacy	of	giving	and	service,	
including our School Library Makeover 
program, through which team members 
revitalized 42 elementary-school libraries 
around the country;

•	And	our	steadfast	commitment	to	high	

standards for the way we conduct 
business and support our team members’ 
personal, career and financial goals.

Looking ahead, we’ve set ambitious goals 
of increasing annual sales to $100 billion 
or more and growing our earnings per 
share to at least $8 by 2017. As we have 
since 1962, we’ll achieve our goals by 
balancing disciplined management with 
our never-ending quest to deliver what’s 
new and what’s next for our guests, and 
by leveraging the energy and talents of our 
365,000 team members. With our tremen-
dous team and our collective commitment 
to the principles that have driven our 
success so far, I’m endlessly optimistic 
about Target’s next 50 years in business.

Gregg Steinhafel | Chairman,  
President	and	CEO,	Target

2  |  TARGET 2011 ANNUAL REPORT

1)	2007	For	Less	campaign	|	2)	2008	Hello	Goodbuy	campaign	|	3)	2004	Raining	Bullseyes	branding	ad	|	4)	2010	Harlem	store	opening	sneak	preview	invitation	newspaper	insert 
5) 1960s Target Private Label potato chips | 6) 1972 newspaper insert | 7) 2000 Target.com promotional ad | 8) 2007 5% Giving campaign | 9) 2004 $2 Million a Week campaign 
10)	2006	first	GO	International	ad	|	11)	1990	Chip	Ganassi’s	Target-sponsored	IndyCar	–	the	sponsorship	continues	today

4113982617510TARGET 2011 ANNUAL REPORT  |  3

14

50 Years...

12)	1999	Sign	of	the	Times	campaign	|	13)	2006	Target/Cooper	Hewitt	New	York	Times	insert	|	14)	1990	What	to	Wear	campaign	|	15)	2009	up	&	up	owned	brand	launch 
16)	2011	Harajuku	Mini	campaign	|	17)	2008	Circle	Dot	branding	ad	|	18)	1978	T-0056	Burnsville,	Minn.	|	19)	2005	Red	and	White	branding	ad	|	20)	1968	Target	Days	newspaper	insert 
21)	1960s	T-0008	Fridley,	Minn.	|	22)	2010	PFresh	Coming	Soon	direct	mail	|	23)	2003	Living	in	the	Red	campaign	|	24)	1999	Fashion	And	…	campaign

2417231622191315122018214  |  TARGET 2011 ANNUAL REPORT

...And Still  
Growing

At Target, we’re committed to providing long-
term value for our guests, and our store growth 
strategy is an important piece of that equation. 
This year, we remodeled a record number of 
stores to include the latest merchandising 
strategies in Home, Beauty and Shoes, plus 
an extended Grocery assortment. This layout, 
now the most common across the chain, gives 
guests one more reason to visit Target for 
everything on their shopping lists. 

In 2011, we also opened 21 new stores across 
the country—including locations in large 
markets such as Los Angeles and Phoenix as 
well as our fourth store in Hawaii. 

Later this year, we’ll also welcome new guests 
to our first small-format, urban CityTarget 
stores in the heart of Chicago, Seattle, Los 
Angeles and San Francisco. Beginning in 
2013, Target plans to open 125 to 135 stores 
in Canada. Over time, we believe we can 
profitably operate 200 or more Canadian Target 
stores. Operations are already well under way to 
prepare for the day we welcome our first guests.

2011 
To reduce costs, drive profitability and gain 
greater control of the quality and freshness of 
the products we offer our guests, we took over 
management of two food distribution centers we 
previously operated in partnership with another 
grocer. Our expanded food assortment grew to 
more than half of our stores last year.

1962 
The doors open to 
the first Target store 
in Roseville, Minn., 
complete with a full 
grocery assortment.  
Heralded as a “new 
idea in discount 
stores,” Target 
differentiates itself 
from other retailers by 
combining the best 
department store 
features—fashion, 
quality and service—
with the low prices of a 
discounter.

TARGET 2011 ANNUAL REPORT  |  5

2012 
Our first CityTarget 
stores will open in 
Chicago, Seattle,  
San Francisco and  
Los Angeles.

2013 
Hello, Canada! In 
Spring 2013 the first of 
our Canadian stores will 
open, with the potential 
to operate 200 or more 
stores throughout 
Canada over time.

As we build and  
remodel our stores, we’re  
taking steps that are good for  
business as well as the environment. 
Those steps include using energy-
efficient LED lights and motion sensors  
in our refrigerated cases, and 
participating in the Environmental 
Protection Agency’s GreenChill  
program in an effort to reduce  
emissions and decrease  
their impact on the 
environment.

6  |  TARGET 2011 ANNUAL REPORT

Perfecting the 
Experience

When our doors opened in 1962, we 
committed to providing guests a shopping 
experience with department-store-inspired 
service and dime-store-inspired value. 

In recent years, we’ve built on that 
commitment by becoming our guests’ favorite 
one-stop shopping destination with a broader 
food assortment, including perishables, in the 
convenience of their local Target store.

Today, the shopping experience we offer  
our guests extends well beyond the walls of 
our stores—to our Target mobile apps and  
Target.com. And for a society that is 
increasingly online and on-the-go, that 
engagement includes social media. 

Not only do channels like Facebook and 
Twitter allow us to connect with guests and 
provide them with great deals, but they also 
create a two-way dialogue to help us make 
their Target experience the best it can be.

By leveraging innovative technologies, we are 
delivering highly relevant and differentiated 
shopping solutions that are personal, simple, 
and accessible—anywhere, anytime.

2011 
The newly redesigned Target.com offers robust 
features that encourage guests to create product 
reviews, add photos and videos, and interact with 
other guests.

2005 
The “Can I Help You 
Find Something?” 
guest service initiative 
launches, making 
team members even 
more available to help 
guests find everything 
they are looking for. 

TARGET 2011 ANNUAL REPORT  |  7

Our 5% Rewards program—where REDcard users 
automatically receive 5 percent off nearly all 
purchases at Target and Target.com— is building 
loyalty among guests. Millions of new accounts 
were created by the end of 2011.

Building on the success of this program, this  
year we introduced REDcard Free Shipping on 
Target.com. Launched just in time for the holidays, 
the program gives REDcard guests a much-valued 
shopping benefit: free shipping with no minimum 
spending on nearly everything at Target.com —in 
addition to 5% Rewards. 

Our mobile apps for 
iPhone, iPad and 
Android make it easy 
for guests to find 
the nearest Target 
store, check product 
availability, view 
the Weekly Ad, refill 
prescriptions and more  
from their mobile device.

8  |  TARGET 2011 ANNUAL REPORT

Where Style 
Meets Value

Great design, high quality and affordable 
prices bring our “Expect More. Pay Less.” 
brand promise to life for our guests every day. 

Bringing the unexpected to our guests—from 
cheap-chic collections by both emerging 
designers and storied fashion houses to 
marketing events aimed at getting Target 
noticed by guests and noted in the media— 
is not only integral to our brand and business, 
but key in surprising and delighting our guests. 

This innovative spirit allows us to deliver on the 
“expect more” half of our brand promise and is 
an essential part of what makes Target, Target. 
In everything we do, we aim to make sure it’s 
big, bold and worthy of the Bullseye.

1984 
Target unveils our first 
official owned brand, 
Honors, in Apparel. 
Now a critical part of 
our business strategy, 
owned brands give 
guests exclusive 
access to products 
they can only find  
at Target.

1994 
Our brand promise, 
“Expect More. Pay 
Less.” reflects the 
unique shopping 
experience guests can 
only find at Target: 
great quality and 
design at an incredible 
price, in a fun, clean 
and inviting store 
environment.

2011 
The news of our largest 
designer partnership 
to date, featuring more 
than 400 products 
touting variations of 
Missoni’s signature 
zig-zag look, broke on 
Vogue.com in July 2011. 
The buzz grew to a 
fever-pitch by the time 
the collection hit stores 
in September. In the 
spring, it was a taste of 
the tropics when luxury 
lifestyle brand Calypso 
St. Barth® partnered 
with Target for an 
affordable, limited-
edition collection 
featuring items across 
many categories, 
including Apparel, 
Accessories and Home. 

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TARGET 2011 ANNUAL REPORT  |  9

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10  |  TARGET 2011 ANNUAL REPORT

Summer at Target brought eye-
popping in-store marketing and 
larger-than-life events as part of the 
Make Summer Funner campaign. 
Target supersized two iconic summer 
items – the sandbox and sprinkler—
for families, friends and guests in 
Chicago and Houston.

Spritz, our new Target- 
exclusive party supplies brand, 
struck a major chord with guests 
wanting to put their own spin 
on birthday bashes and holiday 
gatherings. Developed based on 
guest research, the line provides 
well-designed products in a  
kid- and mom-friendly in-store 
environment.

Merona, our largest 
owned brand in 
Apparel, celebrated 
its 20th anniversary in 
2011 with a look that’s 
always in style.

199120012011TARGET 2011 ANNUAL REPORT  |  11

The Vintage Varsity collection 
sported unique prints unearthed at 
the Hamilton Wood Type & Printing 
Museum in Wisconsin, celebrating a 
timeless style at a comfortable price.

With new products like 
Archer Farms Direct 
Trade Coffee, Gelato 
and Market Pantry 
frozen meals, Target’s 
owned brands offer 
our guests access to 
quality products at a 
low price.

12  |  TARGET 2011 ANNUAL REPORT

From Basics  
to Wow

Beyond the unexpected, our guests continue 
to look for great value in categories across 
the entire store, from everyday basics to small 
splurges for themselves and their families. And 
we deliver. A wide range of national brands, 
owned brands and exclusives that can only 
be found at Target, offer exceptional quality at 
affordable prices.

And by tailoring our product offerings, we 
ensure our guests can find exactly what they 
want and need in their local Target store, 
whether that’s Goya black beans in Miami,  
or an extended assortment of winter coats  
in Minnesota.

We’re also customizing our marketing to ensure 
it resonates with multicultural guests. In 2011, 
we created our first Spanish-language TV 
commercials for Black Friday, and ran our first 
Spanish-language TV ads on a major network 
as part of the ALMA awards broadcast on NBC.

2011 
With a surprise event at our Harlem store, eye-
catching signage in stores and personal reflections 
in her Target ad, Target was the ultimate destination 
for Beyoncé’s latest album, “4.” We continued  
to drive newness each week with additional  
new releases, including Michael Buble’s chart-
topping “Christmas,” Tony Bennett’s 71st album, 
“Duets II,” and Gloria Estefan’s “Little Miss Havana,” 
exclusively sold at Target.

1999 
Makeup artist Sonia 
Kashuk partners with 
Target to introduce 
the Sonia Kashuk 
Professional Makeup 
Collection with 
high-quality beauty 
products that don’t 
break the bank. 
Over the years, the 
collection has grown to 
include fragrance, skin 
care, nail color and 
accessories.

TARGET 2011 ANNUAL REPORT  |  13

In 2011, Target’s Beauty business became 
one of the top-growing categories, offering 
guests everyday essentials alongside 
differentiated beauty assortments, all for a 
great value. In 2012, we’ll continue to grow 
our Beauty business by rolling out store 
updates known as “Destination Beauty” 
to an additional 300 stores. Enhancements 
include interactive screens and custom-
designed fixtures that provide a more 
engaging shopping experience.

Inspired by Japanese street style 
and infused with a pop-art aesthetic,  
Harajuku Mini for Target was about 
“being creative, expressing your 
own individuality and having fun 
getting dressed,” says singer and 
the line’s designer Gwen Stefani.

First came the clothing, 
then the shoes and 
then came Shaun White 
Home. The collection 
features an assortment 
for today’s tween 
ranging from funky 
bedding and storage 
bins to an eight-eyed 
piggy bank.

Take a peek at our Spanish-
language TV spots at Target.com/
SpanishLanguageSpots

14  |  TARGET 2011 ANNUAL REPORT

We’re Part of 
Something 
Bigger

Whether we’re on the sales floor, at home  
with friends and family, or volunteering in  
the community, Target team members are 
always looking for ways to make the world a 
little brighter.

We do our best to help build strong, healthy 
and safe communities where our team 
members and guests live and work. In June, 
we introduced our corporate responsibility 
goals at Target.com/hereforgood. These 
commitments—from putting more U.S. kids on 
the path to graduation to reducing our impact 
on the environment—will be our road map and 
report card in the years to come.

Another important way we support communities 
is through our giving, a philosophy that is, and 
always has been, a cornerstone of our company. 
Each year, we’ve given 5 percent of our income 
to the community, and this year, that amounted 
to a total of $209 million in dollars and product. 

More than dollars alone, we give our time. We 
believe the time we give is just as important as 
the 5 percent of our income. In 2011, our team 
members gave more than 474,500 volunteer 
hours of service in their communities, and we’ve 
challenged ourselves to raise that number to 
700,000 hours each year by the end of 2015.

2000 
The Dayton Hudson 
Foundation is renamed 
the Target Foundation, 
and continues to carry 
on the legacy of our 
founder, George D. 
Dayton, and his goal 
to “aid in promoting 
the welfare of mankind 
anywhere in the world.”

2011 
In good times and 
bad, we support the 
communities in which 
we do business. This 
year, Target gave more 
than $1.4 million to aid 
relief efforts for floods, 
wildfires, hurricanes 
and other disasters 
around the world.

1997 
Guests can now 
support their favorite 
local schools by 
designating a portion 
of their REDcard 
purchases through 
Target’s Take Charge 
of Education program. 
Our September 2011 
payout brought total 
donation dollars to 
$324 million given 
to schools since the 
program began.

Target team member volunteers have helped 
transform 118 school libraries since 2007. Learn 
more at Target.com/SLMhighlights

We made a splash 
when we announced 
we’re working toward 
an entirely sustainable 
and traceable seafood 
assortment by the 
end of 2015, and 
we’re partnering with 
nonprofit FishWise to 
help us reach this goal. 

Throughout the year,  
team members, celebrity friends  
and community partners teamed up  
to help renovate and dedicate new 
libraries and other spaces at 42 U.S. 
schools. Through this and other programs  
like Take Charge of Education, Book 
Festivals, Target Field Trip Grants  
and more, we’re on track to give  
$1 billion to education by  
the end of 2015.

16  |  TARGET 2011 ANNUAL REPORT

Growing 
from Within

We’re committed to helping our team members 
live well and achieve their goals, knowing 
that their diverse perspectives, talent and 
commitment make both our company and our 
communities the best they can be. 

We support team members’ path to health and 
well-being through resources, services and 
benefits programs for eligible team members, 
spouses, domestic partners and other 
dependents including health insurance, a team 
member discount and domestic partner leave 
of absence, similar to Family Medical Leave Act 
(FMLA) benefits. And we cultivate talent and 
leadership through career development and 
networking opportunities.

1993 
Target begins calling 
customers “guests” 
and employees “team 
members” to show 
our commitment to 
providing the best 
possible experience for 
those who shop and 
work in our stores.

1
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2011 
DiversityInc magazine 
ranked Target No. 44  
on its list of “Top 
50 Companies for 
Diversity.” Target was 
also recognized by 
Fortune magazine as  
No. 10 on its list of “Top  
Companies for Leaders”  
in North America,  
and by BusinessWeek  
magazine as part of its  
list of “IDEAL Employers  
for Undergrads.”  
See other awards at 
Target.com/awards.

TARGET 2011 ANNUAL REPORT  |  17

Our commitment to building strong 
relationships with community 
partners sometimes helps our team 
members grow in their careers 
too. This year, Senior Investigator 
Katie Dempsey of Target’s Assets 
Protection team in Ellicott City, Md., 
became the first private-sector 
employee ever to be invited to work at 
the Federal Emergency Management 
Agency (FEMA) headquarters. She 
spent several months at their home 
base in Washington, D.C., sharing 
information about how Target helps 
communities prepare for and recover 
from disasters.

Through our partnership 
with The Alliance to 
Make US Healthiest, 
Target was among the 
first four companies 
to participate in its 
HealthLead accred-
itation program. The 
certification recognizes 
our commitment to 
health and well-being, 
best-in-class services 
and support for our 
team members.

At Target, we believe in building a team of people with different 
backgrounds, distinct experiences and unique points of view. 
Learn more at Target.com/DiversityVideo

More than 1,700 team  
members across the country  
became well-being captains at  
their store, distribution center and  
headquarters locations. These captains  
plan activities that promote wellness  
in the areas of health, relationships,  
career, financial stability and  
community involvement—and  
track their team’s progress.

18  |  TARGET 2011 ANNUAL REPORT

Year-end 
Store Count 
and Square 
Footage by 
State

 sales per No. of reTaIl sq. fT.   CapITa Group sTores (ThousaNds)  Over $300  California 252 33,483 Colorado 41 6,200 Minnesota 74 10,627 North Dakota 4 554 Group ToTal 371 50,864 $201–$300  Arizona 48 6,382 Connecticut 20 2,672 Florida 124 17,375 Illinois 87 11,895  Iowa 22 3,015 Kansas 19 2,577 Maryland 36 4,667 Massachusetts 36 4,735 Montana 7 780 Nebraska 14 2,006 New Hampshire 9 1,148 New Jersey 43 5,671 South Dakota 5 580 Texas 148 20,838 Virginia 56 7,454 Wisconsin 38 4,633 Group ToTal 712 96,428 $151–$200  Delaware 3 413 Georgia 55 7,517 Indiana 33 4,377 Michigan 59 7,031 Missouri 36 4,735 Nevada 19 2,461TARGET 2011 ANNUAL REPORT  |  19

Total stores 
1,763
Total sq. feet 
235,721  

(in thousands)

Sales per capita is defined as sales by  
state divided by state population.

 sales per No. of reTaIl sq. fT.   CapITa Group sTores (ThousaNds)  $151–$200 (continued)  New York 66 8,996 North Carolina 47 6,225 Ohio 64 8,006 Oklahoma 15 2,157 Oregon 18 2,201 Pennsylvania 63 8,238 Tennessee 32 4,096 Utah 12 1,818 Washington 35 4,098 Group ToTal 557 72,369 $101–$150  Alabama 20 2,867 Alaska 3 504 District of Columbia 1 179 Hawaii 4 695 Louisiana 16 2,246 Maine 5 630 New Mexico 9 1,024 Rhode Island 4 517 South Carolina 18 2,224 Group ToTal 80 10,886 $0–$100  Arkansas 9 1,165 Idaho 6 664 Kentucky 14 1,660 Mississippi 6 743 Vermont 0 0 West Virginia 6 755 Wyoming 2 187 Group ToTal 43 5,17420  |  TARGET 2011 ANNUAL REPORT

FiNANCiAL RESULTS: (in millions)

Sales   

Credit card revenues 

Total revenues 

Cost of sales 

Selling, general and administrative expenses (b) 

Credit card expenses 

Depreciation	and	amortization	

Earnings	before interest expense and income taxes (c) 

Net	interest	expense	

Earnings	before	income	taxes	

Provision for income taxes 

Net	earnings	

PER ShARE:

Basic earnings per share 

Diluted	earnings	per	share	

Cash dividends declared 

FiNANCiAL POSiTiON: (in millions)

Total assets 

Capital expenditures 

Long-term debt, including current portion 

Net	debt	(d)	

Shareholders’ investment 

U.S. RETAiL SEGMENT FiNANCiAL RATiOS:

Comparable-store sales growth (e) 

Gross margin (% of sales) 

SG&A	(%	of	sales)	(f)	

EBIT	margin	(%	of	sales)	

OThER:

Common shares outstanding (in millions) 

Cash flow provided by operations (in millions) 

Revenues per square foot (g)(h) 

Retail square feet (in thousands) 

Square footage growth 

Total number of stores 

  General merchandise 

Expanded	food	assortment	

SuperTarget 

Total number of distribution centers 

2011 

2010 

2009 

2008 

2007 

2006 (a)

$  68,466 

$  65,786 

$  63,435 

$  62,884 

$  61,471 

$ 

57,878

1,399 

69,865 

47,860 

14,106 

446 

2,131	

5,322 

866	

4,456	

1,527 

1,604 

67,390 

45,725 

13,469 

860 

2,084	

5,252 

757	

4,495	

1,575 

1,922 

65,357 

44,062 

13,078 

1,521 

2,023	

4,673 

801	

3,872	

1,384 

2,064 

64,948 

44,157 

12,954 

1,609 

1,826 

4,402 

866 

3,536 

1,322 

1,896 

63,367 

42,929 

12,670 

837 

1,659 

5,272 

647 

4,625 

1,776 

1,612

59,490

40,366

11,852

707

1,496

5,069

572

4,497

1,710

$	

2,929		

$	

2,920	

$ 

2,488 

$ 

2,214 

$ 

2,849 

$ 

2,787

$ 

$ 

$	

4,368 

17,483 

17,289	

3.0% 

30.1% 

20.1%	

7.0%	

669.3 

5,434 

294 

$ 

$ 

$ 

$	

$ 

4.31 

4.28	

1.15 

$ 

$	

$ 

4.03 

4.00	

0.92 

$ 

$ 

$ 

3.31 

3.30 

0.67 

$  46,630 

$  43,705 

$  44,533 

$ 

$ 

2,129 

15,726 

$ 

$ 

1,729 

16,814 

$ 

$ 

$ 

$ 

$ 

$ 

2.87 

2.86 

0.62 

$ 

$ 

$ 

3.37 

3.33 

0.54 

44,106 

3,547 

18,752 

$  44,560 

$ 

4,369 

$  17,090 

$	 14,597	

$  15,288 

$  18,562 

$  15,239 

$  15,821 

$  15,487 

$  15,347 

$ 

13,712 

$  15,307 

2.1% 

30.5% 

20.3%	

7.0%	

(2.5%) 

30.5% 

20.5%	

6.9%	

(2.9%) 

29.8% 

20.4% 

6.5% 

3.0% 

30.2% 

20.4% 

7.1% 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

$ 

3.23

3.21

0.46

37,349

3,928

10,037

9,756

15,633

4.8%

30.3%

20.3%

7.4%

704.0 

5,271 

290 

$ 

$ 

744.6 

5,881 

287 

$ 

$ 

752.7 

4,430 

301 

$ 

$ 

818.7 

4,125 

318 

$ 

$ 

859.8

4,862

316

$ 

$ 

  235,721 

  233,618 

  231,952 

  222,588 

  207,945 

192,064

0.9% 

1,763 

637 

875	

251 

37 

0.7% 

1,750 

1,037 

462	

251 

37 

4.2% 

1,740 

1,381 

108	

251 

37 

7.0% 

1,682 

1,441 

2	

239 

34 

8.3% 

1,591 

1,381 

n/a	

210 

32 

7.7%

1,488

1,311

n/a

177

29

(a)  Consisted of 53 weeks. 
(b)	 Also	referred	to	as	SG&A.	
(c)	 Also	referred	to	as	EBIT.	
(d)  Including current portion and short-term notes payable, net of short-term investments of $194 million, $1,129 million, $1,526 million, $190 million, $1,851 million, and $281 million, 

respectively. Management believes this measure is a more appropriate indicator of our level of financial leverage because short-term investments are available to pay debt 
maturity obligations.

(e)	 See	definition	of	comparable-store	sales	in	Item	7,	Management’s	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations.
(f)	 Effective	with	the	October	2010	nationwide	launch	of	our	5%	REDcard	Rewards	loyalty	program,	we	changed	the	formula	under	which	the	U.S.	Retail	Segment	charges	the	U.S.	
Credit Card Segment to better align with the attributes of this program. Loyalty program charges were $258 million, $102 million, $89 million, $117 million, $114 million, and $109 
million,	respectively.	In	all	periods	these	amounts	were	recorded	as	reductions	to	SG&A	expenses	within	the	U.S.	Retail	Segment	and	increases	to	operations	and	marketing	
expenses	within	the	U.S.	Credit	Card	Segment.

(g)  Thirteen-month average retail square feet. 
(h)  In 2006, revenues per square foot were calculated with 52 weeks of revenues (the 53rd week of revenues was excluded) because management believes that these numbers 

provide	a	more	useful	analytical	comparison	to	other	years.	Using	our	revenues	for	the	53-week	year	under	generally	accepted	accounting	principles,	2006	revenues	per	square	
foot were $322.

Financial Summary 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
	
		
	
	
 
 
 
  
 
 
 
 
	
		
	
	
 
 
	
		
	
	
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
	
	
	
	
 
 
	
	
	
	
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
	
	
	
	
	
	
	
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
	
	
	
	
	
	
	
	
	
	
	
	
 
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)

(cid:2) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the fiscal year ended January 28, 2012

OR

(cid:3) 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

4MAR201019540886

TARGET CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota
(State or other jurisdiction of
incorporation or organization)

1000 Nicollet Mall, Minneapolis, Minnesota
(Address of principal executive offices)

41-0215170
(I.R.S. Employer
Identification No.)

55403
(Zip Code)

Securities Registered Pursuant To Section 12(B) Of The Act:

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

Title of Each Class

Name of Each Exchange on Which Registered

Common Stock, par value $0.0833 per share

New York Stock Exchange

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:2) No (cid:3)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:3)  No (cid:2)
Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from
their obligations under those Sections.

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 (cid:2) No (cid:3)
Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files. Yes (cid:2) No (cid:3)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. (cid:2)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company (as defined in Rule 12b-2 of the Act).
Accelerated filer (cid:3)
Large accelerated filer (cid:2)

Smaller reporting company (cid:3)

Non-accelerated filer (cid:3)
(Do not check if a smaller
reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:3) No (cid:2)
Aggregate market value of the voting stock held by non-affiliates of the registrant on July 30, 2011 was $34,696,113,355, based on the closing
price of $51.49 per share of Common Stock as reported on the New York Stock Exchange Composite Index.

Indicate the number of shares outstanding of each of registrant’s classes of Common Stock, as of the latest practicable date. Total shares of
Common Stock, par value $0.0833, outstanding at March 12, 2012 were 668,486,970.

1. Portions of Target’s Proxy Statement to be filed on or about April 30, 2012 are incorporated into Part III.

DOCUMENTS INCORPORATED BY REFERENCE

T A B L E  O F  C O N T E N T S

P A R T  I

Item 1
Item 1A
Item 1B
Item 2
Item 3
Item 4
Item 4A

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Executive Officers

P A R T  I I

Item 5

Item 6
Item 7

Item 7A
Item 8
Item 9

Item 9A
Item 9B

Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results
of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Controls and Procedures
Other Information

P A R T  I I I

Item 10
Item 11
Item 12

Item 13
Item 14

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services

P A R T  I V

Item 15

Exhibits and Financial Statement Schedules

Signatures
Schedule II – Valuation and Qualifying Accounts
Exhibit Index
Exhibit 12 – Computations of Ratios of Earnings to Fixed Charges for each of the Five Years in
the Period Ended January 28, 2012

P
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I

P
A
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T

I

I

P
A
R
T

I

I

I

P
A
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I

V

2
4
8
9
10
10
10

12
14

14
28
29

61
61
61

62
62

62
62
62

63

66
67
68

70

1

 
 
 
 
Item 1. Business

General

P A R T  I

Target Corporation (the Corporation or Target) was incorporated in Minnesota in 1902. We operate as three

reportable segments: U.S. Retail, U.S. Credit Card and Canadian.

Our U.S. Retail Segment includes all of our merchandising operations, including our fully integrated online
business. We offer both everyday essentials and fashionable, differentiated merchandise at discounted prices. Our
ability to deliver a shopping experience that is preferred by our customers, referred to as ‘‘guests,’’ is supported by
our strong supply chain and technology infrastructure, a devotion to innovation that is ingrained in our organization
and culture, and our disciplined approach to managing our current business and investing in future growth. As a
component of the U.S. Retail Segment, our online presence is designed to enable guests to purchase products
seamlessly either online or by locating them in one of our stores with the aid of online research and location tools.
Our online shopping site offers similar merchandise categories to those found in our stores, excluding food items
and household essentials.

Our U.S. Credit Card Segment offers credit to qualified guests through our branded proprietary credit cards,
the Target Visa and the Target Card. Additionally, we offer a branded proprietary Target Debit Card. Collectively,
these REDcards(cid:2) help strengthen the bond with our guests, drive incremental sales and contribute to our results of
operations.

Our Canadian Segment was initially reported in the first quarter of 2011 as a result of our purchase of leasehold
interests in Canada from Zellers, Inc. (Zellers). This segment includes costs incurred in the U.S. and Canada related
to our planned 2013 Canadian retail market entry.

Financial Highlights

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 2011 ended January 28, 2012, and consisted of
52 weeks. Fiscal 2010 ended January 29, 2011, and consisted of 52 weeks. Fiscal 2009 ended January 30, 2010,
and consisted of 52 weeks. Fiscal 2012 will end on February 2, 2013, and will consist of 53 weeks.

For information on key financial highlights, see the items referenced in Item 6, Selected Financial Data, and
Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Annual
Report on Form 10-K.

Seasonality

Due to the seasonal nature of our business, a larger share of annual revenues and earnings traditionally occurs

in the fourth quarter because it includes the peak sales period from Thanksgiving to the end of December.

Merchandise

We  operate  Target  general  merchandise  stores,  the  majority  of  which  offer  a  wide  assortment  of  general
merchandise and a more limited food assortment than traditional supermarkets. During the past three years we
completed  store  remodels  that  enabled  us  to  offer  an  expanded  food  assortment  in  many  of  our  general
merchandise stores. The expanded food assortment includes some perishables and some additional dry, dairy and
frozen items. In addition, we operate SuperTarget(cid:2) stores with general merchandise items and a full line of food
items comparable to that of traditional supermarkets. Target.com offers a wide assortment of general merchandise
including many items found in our stores and a complementary assortment, such as extended sizes and colors,
sold only online. A significant portion of our sales is from national brand merchandise. We also sell many products
under  our  owned  and  exclusive  brands.  Owned  brands  include  merchandise  sold  under  private-label  brands
including, but not limited to, Archer Farms(cid:2), Archer Farms(cid:2) Simply Balanced(cid:3), Boots & Barkley(cid:2), choxie(cid:2), Circo(cid:2),

2

Durabuilt(cid:2),  Embark(cid:2),  Gilligan  &  O’Malley(cid:2),  itso(cid:2),  Market  Pantry(cid:2),  Merona(cid:2),  Play  Wonder(cid:2),  Prospirit(cid:2),  Room
Essentials(cid:2),  Smith  &  Hawken(cid:2),  Spritz(cid:3),  Sutton  &  Dodge(cid:2),  Target  Home(cid:3),  up  &  up(cid:2),  Wine  Cube(cid:2),  and
Xhilaration(cid:2). In addition, we sell merchandise under exclusive brands including, but not limited to, Assets(cid:2) by Sarah
Blakely,  Auro(cid:2)  by  Goldtoe,  Boots  No7,  C9  by  Champion(cid:2),  Chefmate(cid:2),  Cherokee(cid:2),  Converse(cid:2)  One  Star(cid:2),
dENiZEN(cid:3) by Levi’s(cid:2), Fieldcrest(cid:2), Genuine Kids by OshKosh(cid:2), Giada De Laurentiis(cid:3) for Target(cid:2), Harajuku Mini for
Target(cid:2),  Just  One  You  made  by  Carter’s,  Kitchen  Essentials(cid:2)  from  Calphalon(cid:2),  Liz  Lange(cid:2)  for  Target,  Michael
Graves Design(cid:3), Mossimo(cid:2), Nick & Nora(cid:2), Papyrus, Paul Frank(cid:2) for Target, Shaun White, Simply Shabby Chic(cid:2),
Sonia Kashuk(cid:2) and Thomas O’Brien(cid:2) Vintage Modern. We also sell merchandise through unique programs such
as ClearRx(cid:2) and GO International(cid:2), and through periodic exclusive design and other creative partnerships. We also
generate  revenue  from  in-store  amenities  such  as  Target  Caf´eSM,  Target  Clinic(cid:2),  Target  Pharmacy(cid:2)  and  Target
Photo(cid:2), and from leased or licensed departments such as Target Optical(cid:2), Pizza Hut, Portrait Studio and Starbucks.
Effective  inventory  management  is  key  to  our  ongoing  success.  We  utilize  various  techniques  including
demand forecasting and planning and various forms of replenishment management. We achieve effective inventory
management by being in-stock in core product offerings, maintaining positive vendor relationships, and carefully
planning inventory levels for seasonal and apparel items to minimize markdowns.

P
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Sales by Product Category

Household essentials
Hardlines
Apparel and accessories
Food and pet supplies
Home furnishings and d´ecor
Total

Percentage of Sales

2011

25%
19
19
19
18
100%

2010

24%
20
20
17
19
100%

2009

23%
22
20
16
19
100%

Household essentials includes pharmacy, beauty, personal care, baby care, cleaning and paper products.

Hardlines  includes  electronics  (including  video  game  hardware  and  software),  music,  movies,  books,

computer software, sporting goods and toys.

Apparel and accessories includes apparel for women, men, boys, girls, toddlers, infants and newborns. It also

includes intimate apparel, jewelry, accessories and shoes.

Food and pet supplies includes dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat,

produce and pet supplies.

Home furnishings and d´ecor includes furniture, lighting, kitchenware, small appliances, home d´ecor, bed and

bath, home improvement, automotive and seasonal merchandise such as patio furniture and holiday d´ecor.

Distribution

The vast majority of our merchandise is distributed through our network of distribution centers. We operated 37
distribution centers at January 28, 2012. General merchandise is shipped to and from our distribution centers by
common carriers. In addition, third parties distribute certain food items. Merchandise sold through Target.com is
distributed through our own distribution network, through third parties, or shipped directly from vendors.

Employees

At  January  28,  2012,  we  employed  approximately  365,000  full-time,  part-time  and  seasonal  employees,
referred to as ‘‘team members.’’ During our peak sales period from Thanksgiving to the end of December, our
employment levels peaked at approximately 414,000 team members. We consider our team member relations to
be good. We offer a broad range of company-paid benefits to our team members. Eligibility for, and the level of,
these benefits varies, depending on team members’ full-time or part-time status, compensation level, date of hire

3

 
and/or length of service. These company-paid benefits include a pension plan, 401(k) plan, medical and dental
plans,  a  retiree  medical  plan,  disability  insurance,  paid  vacation,  tuition  reimbursement,  various  team  member
assistance programs, life insurance and merchandise discounts.

Working Capital

Because of the seasonal nature of our business, our working capital needs are greater in the months leading
up to our peak sales period from Thanksgiving to the end of December. The increase in working capital during this
time is typically financed with cash flow provided by operations and short-term borrowings.

Additional  details  are  provided  in  the  Liquidity  and  Capital  Resources  section  in  Item  7,  Management’s

Discussion and Analysis of Financial Condition and Results of Operations.

Competition

In our U.S. Retail Segment, we compete with traditional and off-price general merchandise retailers, apparel
retailers, internet retailers, wholesale clubs, category specific retailers, drug stores, supermarkets and other forms
of retail commerce in the U.S. Our ability to positively differentiate ourselves from other retailers largely determines
our competitive position within the U.S. retail industry. In our Canadian Segment, we will compete with similar retail
categories and will be focused on positively differentiating ourselves within the Canadian retail market.

In our U.S. Credit Card Segment, our primary mission is to deliver financial products and services that drive
sales and deepen guest relationships at Target. Our financial products compete with those of other issuers for
market  share  of  sales  volume.  Our  ability  to  positively  differentiate  the  value  of  our  financial  products  primarily
through  our  rewards  programs,  terms,  credit  line  management,  and  guest  service  determines  our  competitive
position among credit card issuers.

Intellectual Property

Our brand image is a critical element of our business strategy. Our principal trademarks, including Target,
SuperTarget and our ‘‘Bullseye Design,’’ have been registered with the U.S. Patent and Trademark Office. We also
seek to obtain and preserve intellectual property protection for our private-label brands.

Geographic Information

All of our revenues are generated within the United States and a vast majority of our long-lived assets are
located within the U.S. as well. As we expand our operations internationally, a modest percentage of our revenues
and long-lived assets will be located in Canada.

Available Information

Our  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  ‘‘Investor  Relations’’  and  ‘‘SEC  Filings’’)  as  soon  as  reasonably
practicable after we file such material with, or furnish it to, the Securities and Exchange Commission (SEC). Our
Corporate  Governance  Guidelines,  Business  Conduct  Guide,  Corporate  Responsibility  Report  and  the  position
descriptions for our Board of Directors and Board committees are also available free of charge in print upon request
or at www.Target.com/Investors.

Item 1A. Risk Factors

Our business is subject to a variety of risks. The most important of these is our ability to remain relevant to our
guests  with  a  brand  they  trust.  Meeting  our  guests’  expectations  requires  us  to  manage  various  strategic,
operational, compliance, reputational, and financial risks. Set forth below are the most significant risks that we face.

4

If we are unable to positively differentiate ourselves from other retailers, our results of operations could be
adversely affected.

The  retail  business  is  highly  competitive.  In  the  past  we  have  been  able  to  compete  successfully  by
differentiating  our  guests’  shopping  experience  by  creating  an  attractive  value  proposition  through  a  careful
combination  of  price,  merchandise  assortment,  convenience,  guest  service  and  marketing  efforts.  Guest
perceptions regarding the cleanliness and safety of our stores, our in-stock levels, the convenience and reliability of
our multichannel guest experience and other factors also affect our ability to compete. No single competitive factor
is dominant, and actions by our competitors on any of these factors could have an adverse effect on our sales,
gross margin and expenses.

P
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I

Our continued success is substantially dependent on positive perceptions of Target, including our owned
and exclusive brands.

We believe that one of the reasons our guests prefer to shop at Target and our team members choose Target as
a place of employment is the reputation we have built over many years of serving our four primary constituencies:
guests, team members, the communities in which we operate and shareholders. To be successful in the future, we
must continue to preserve, grow and leverage the value of Target’s reputation. Reputational value is based in large
part on perceptions of subjective qualities, and even isolated incidents that erode trust and confidence, particularly
if they result in adverse publicity, governmental investigations or litigation, can have an adverse impact on these
perceptions and lead to tangible adverse effects on our business, including consumer boycotts, loss of new store
development opportunities, or team member recruiting difficulties.

In addition, we sell many products under our owned and exclusive brands, such as Market Pantry, up & up,
Target Home, Merona and Mossimo. These brands generally carry higher margins than national brand products,
and represent a growing portion of our overall sales, totaling approximately one-third of sales in 2011. If one or more
of these brands experiences a loss of consumer acceptance or confidence, our sales and gross margin rate could
be adversely affected.

If we are unable to successfully maintain a relevant multichannel experience for our guests, our results of
operations could be adversely affected.

Our guests are increasingly using computers, tablets, mobile phones and other devices to shop in our stores
and online. As part of our multichannel strategy, we offer full and mobile versions of our website (Target.com) and
applications for mobile phones and tablets. In addition, we use social media as a way to interact with our guests and
enhance  their  shopping  experiences.  Multichannel  retailing  is  rapidly  evolving  and  we  must  keep  pace  with
changing guest expectations and new developments by our competitors. If we are unable to attract and retain team
members or contract third parties with the specialized skills needed to support our multichannel platforms, or are
unable to implement improvements to our guest-facing technology in a timely manner, our ability to compete and
our  results  of  operations  could  be  adversely  affected.  In  addition,  if  Target.com  and  our  other  guest-facing
technology systems do not function as designed, we may experience a loss of guest confidence, data security
breaches, lost sales or be exposed to fraudulent purchases, which could adversely affect our reputation and results
of operations.

If we fail to anticipate and respond quickly to changing consumer preferences, our sales, gross margin and
profitability could suffer.

A substantial part of our business is dependent on our ability to make trend-right decisions in apparel, home
d´ecor,  seasonal  offerings,  food  and  other  merchandise.  Failure  to  accurately  predict  constantly  changing
consumer tastes, preferences, spending patterns and other lifestyle decisions may result in lost sales, spoilage and
increased inventory markdowns, which would lead to a deterioration in our results of operations.

5

 
We are highly susceptible to the state of macroeconomic conditions and consumer confidence in the United
States.

All of our stores are currently located within the United States, making our results highly dependent on U.S.
consumer confidence and the health of the U.S. economy. In addition, a significant portion of our total sales is
derived  from  stores  located  in  five  states:  California,  Texas,  Florida,  Minnesota  and  Illinois,  resulting  in  further
dependence  on  local  economic  conditions  in  these  states.  Deterioration  in  macroeconomic  conditions  and
consumer  confidence  could  negatively  affect  our  business  in  many  ways,  including  slowing  sales  growth  or
reduction in overall sales, and reducing gross margins.

In addition to the impact of macroeconomic conditions on our retail sales, these same considerations impact
the success of our U.S. Credit Card Segment. Deterioration in macroeconomic conditions can adversely affect
cardholders’ ability to pay their balances, and we may not be able to fully anticipate and respond to changes in the
risk profile of our cardholders when extending credit, resulting in higher bad debt expense. Demand for consumer
credit  is  also  impacted  by  consumer  choices  regarding  payment  methods,  and  our  performance  could  be
adversely affected by consumer decisions to use third-party debit cards or other forms of payment.

If  we  do  not  effectively  manage  our  large  and  growing  workforce,  our  results  of  operations  could  be
adversely affected.

With approximately 365,000 team members, our workforce costs represent our largest operating expense, and
our business is dependent on our ability to attract, train and retain qualified team members. Many of those team
members are in entry-level or part-time positions with historically high turnover rates. Our ability to meet our labor
needs while controlling our costs is subject to external factors such as unemployment levels, prevailing wage rates,
collective bargaining efforts, health care and other benefit costs and changing demographics. If we are unable to
attract and retain adequate numbers of qualified team members, our operations, guest service levels and support
functions could suffer. Those factors, together with increasing wage and benefit costs, could adversely affect our
results of operations. As of March 15, 2012, none of our team members were working under collective bargaining
agreements. We are periodically subject to labor organizing efforts. If we become subject to one or more collective
bargaining agreements in the future, it could adversely affect our labor costs and how we operate our business.

Lack of availability of suitable locations in which to build new stores could slow our growth, and difficulty in
executing  plans  for  new  stores,  expansions  and  remodels  could  increase  our  costs  and  capital
requirements.

Our future growth is dependent, in part, on our ability to build new stores and expand and remodel existing
stores in a manner that achieves appropriate returns on our capital investment. We compete with other retailers and
businesses  for  suitable  locations  for  our  stores.  In  addition,  for  many  sites  we  are  dependent  on  a  third  party
developer’s ability to acquire land, obtain financing and secure the necessary zoning changes and permits for a
larger project, of which our store may be one component. Turmoil in the financial markets may make it difficult for
third party developers to obtain financing for new projects. Local land use and other regulations applicable to the
types of stores we desire to construct may affect our ability to find suitable locations and also influence the cost of
constructing, expanding and remodeling our stores. A significant portion of our expected new store sites is located
in fully developed markets, which is generally a more time-consuming and expensive undertaking than expansion
into undeveloped suburban and ex-urban markets.

Interruptions in our supply chain or increased commodity prices and supply chain costs could adversely
affect our results.

We are dependent on our vendors to supply merchandise in a timely and efficient manner. If a vendor fails to
deliver on its commitments, whether due to financial difficulties or other reasons, we could experience merchandise
out-of-stocks that could lead to lost sales. In addition, a large portion of our merchandise is sourced, directly or

6

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indirectly, from outside the United States, with China as our single largest source. Political or financial instability,
trade restrictions, the outbreak of pandemics, labor unrest, transport capacity and costs, port security or other
events that could slow port activities and affect foreign trade are beyond our control and could disrupt our supply of
merchandise  and/or  adversely  affect  our  results  of  operations.  In  addition,  changes  in  the  costs  of  procuring
commodities used in our merchandise or the costs related to our supply chain, including labor, fuel, tariffs, and
currency exchange rates could have an adverse effect on gross margin, expenses and results of operations.

Failure to address product safety concerns could adversely affect our sales and results of operations.

If  our  merchandise  offerings,  including  food,  drug  and  children’s  products,  do  not  meet  applicable  safety
standards or our guests’ expectations regarding safety, we could experience lost sales and increased costs and be
exposed to legal and reputational risk. All of our vendors must comply with applicable product safety laws, and we
are dependent on them to ensure that the products we buy comply with all safety standards. Events that give rise to
actual, potential or perceived product safety concerns, including food or drug contamination, could expose us to
government  enforcement  action  or  private  litigation  and  result  in  costly  product  recalls  and  other  liabilities.  In
addition, negative guest perceptions regarding the safety of the products we sell could cause our guests to seek
alternative sources for their needs, resulting in lost sales. In those circumstances, it may be difficult and costly for us
to regain the confidence of our guests.

If we fail to protect the security of personal information about our guests and team members, we could be
subject to costly government enforcement actions or private litigation and our reputation could suffer.

The nature of our business involves the receipt and storage of personal information about our guests and team
members. If we experience a data security breach, we could be exposed to government enforcement actions and
private litigation. In addition, our guests could lose confidence in our ability to protect their personal information,
which could cause them to discontinue usage of our credit card products, decline to use our pharmacy services, or
stop shopping at our stores or Target.com altogether. The loss of confidence from a data security breach involving
team members could hurt our reputation and cause team member recruiting and retention challenges.

Our failure to comply with federal, state or local laws, or changes in these laws could increase our expenses.

Our business is subject to a wide array of laws and regulations. Significant legislative changes that affect our
relationship  with  our  workforce  could  increase  our  expenses  and  adversely  affect  our  operations.  Examples  of
possible  legislative  changes  affecting  our  relationship  with  our  workforce  include  changes  to  an  employer’s
obligation  to  recognize  collective  bargaining  units,  the  process  by  which  collective  bargaining  agreements  are
negotiated  or  imposed,  minimum  wage  requirements,  and  health  care  mandates.  In  addition,  changes  in  the
regulatory environment regarding topics such as banking and consumer credit, Medicare reimbursements, privacy
and information security, product safety or environmental protection, among others, could cause our expenses to
increase without an ability to pass through any increased expenses through higher prices. In addition, if we fail to
comply with applicable laws and regulations, particularly wage and hour laws, we could be subject to legal risk,
including government enforcement action and class action civil litigation, which could adversely affect our results of
operations.

Weather conditions where our stores are located may impact consumer shopping patterns, which alone or
together with natural disasters in areas where our sales are concentrated, could adversely affect our results
of operations.

Uncharacteristic  or  significant  weather  conditions  can  affect  consumer  shopping  patterns,  particularly  in
apparel and seasonal items, which could lead to lost sales or greater than expected markdowns and adversely
affect our short-term results of operations. In addition, our three largest states, by total sales, are California, Texas
and Florida, areas where hurricanes and earthquakes are more prevalent. Those natural disasters could result in

7

 
significant physical damage to or closure of one or more of our stores or distribution centers, and cause delays in
the distribution of merchandise from our vendors to our distribution centers and stores, which could adversely
affect our results of operations.

Changes in our effective income tax rate could affect our results of operations.

Our effective income tax rate is influenced by a number of factors. Changes in the tax laws, the interpretation of
existing laws, or our failure to sustain our reporting positions on examination could adversely affect our effective tax
rate. In addition, our effective income tax rate is influenced inversely by capital market returns due to the tax-free
nature of investment vehicles used to economically hedge our deferred compensation liabilities.

If we are unable to access the capital markets or obtain bank credit, our growth plans, liquidity and results of
operations could suffer.

We are dependent on a stable, liquid and well-functioning financial system to fund our operations and growth
plans. In particular, we have historically relied on the public debt markets to raise capital for new store development
and other capital expenditures, the commercial paper market and bank credit facilities to fund seasonal needs for
working capital, and the asset-backed securities markets to partially fund our accounts receivable portfolio. Our
continued access to these markets depends on multiple factors including the condition of debt capital markets, our
operating performance and maintaining strong debt ratings. If our credit ratings were lowered, our ability to access
the debt markets and our cost of funds for new debt issuances could be adversely impacted. Each of the credit
rating agencies reviews its rating periodically, and there is no guarantee our current credit rating will remain the
same. In addition, we use a variety of derivative products to manage our exposure to market risk, principally interest
rate and equity price fluctuations. Disruptions or turmoil in the financial markets could adversely affect our ability to
meet our capital requirements, fund our working capital needs or lead to losses on derivative positions resulting
from counterparty failures.

A significant disruption in our computer systems could adversely affect our operations.

We rely extensively on our computer systems to manage inventory, process guest transactions and summarize
results.  Our  systems  are  subject  to  damage  or  interruption  from  power  outages,  telecommunications  failures,
computer viruses and malicious attacks, security breaches and catastrophic events. If our systems are damaged or
fail to function properly, we may incur substantial costs to repair or replace them, and may experience loss of critical
data and interruptions or delays in our ability to manage inventories or process guest transactions, which could
adversely affect our results of operations.

Our plan to expand retail operations into Canada could adversely affect our financial results.

Our plan to enter the Canadian retail market is our first expansion of retail operations outside of the United
States. Our ability to successfully open the expected number of Canadian Target stores on schedule depends, in
large  measure,  upon  our  ability  to  remodel  existing  assets,  build  our  supply  chain  capabilities  and  technology
systems and recruit, hire and retain qualified team members. In addition, access to local suppliers of certain types
of goods may limit our ability to offer the expected assortment of merchandise in certain markets. The effective
execution  of  our  strategy  is  also  contingent  on  our  ability  to  design  new  marketing  programs  that  positively
differentiate us from other retailers in Canada. If we do not effectively execute our expansion plan in Canada, our
financial performance could be adversely affected.

Item 1B. Unresolved Staff Comments

Not applicable.

8

Item 2. Properties

At January 28, 2012, we had 1,763 stores in 49 states and the District of Columbia:

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri

Number of Stores
20
3
48
9
252
41
20
3
1
124
55
4
6
87
33
22
19
14
16
5
36
36
59
74
6
36

Retail Sq. Ft.
(in thousands)
2,867
504
6,382
1,165
33,483
6,200
2,672
413
179
17,375
7,517
695
664
11,895
4,377
3,015
2,577
1,660
2,246
630
4,667
4,735
7,031
10,627
743
4,735

Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

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Number of
Stores
7
14
19
9
43
9
66
47
4
64
15
18
63
4
18
5
32
148
12
—
56
35
6
38
2

Retail Sq. Ft.
(in thousands)
780
2,006
2,461
1,148
5,671
1,024
8,996
6,225
554
8,006
2,157
2,201
8,238
517
2,224
580
4,096
20,838
1,818
—
7,454
4,098
755
4,633
187

The following table summarizes the number of owned or leased stores and distribution centers in the United

States at January 28, 2012:

Total

1,763

235,721

Owned
Leased
Combined (a)
Total
(a) Properties within the ‘‘combined’’ category are primarily owned buildings on leased land.
(b) The 37 distribution centers have a total of 48,473 thousand square feet.

Stores
1,512
86
165
1,763

Distribution
Centers (b)
30
7
—
37

We have announced plans to open our first 60 Canadian stores beginning in March or early April 2013, located
in  Alberta,  British  Columbia,  Ontario,  Manitoba  and  Saskatchewan.  We  are  also  currently  in  the  process  of
constructing 3 distribution centers in Canada.

We  own  our  corporate  headquarters  buildings  located  in  Minneapolis,  Minnesota,  and  we  lease  and  own
additional office space in the United States. We lease our Canadian headquarters in Mississauga, Ontario. Our
international sourcing operations have 24 office locations in 17 countries, all of which are leased. We also lease
office space in Bangalore, India, where we operate various support functions. Our properties are in good condition,
well maintained and suitable to carry on our business.

9

 
For  additional  information  on  our  properties,  see  also  the  Capital  Expenditures  section  in  Item  7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations and Notes 13 and 21 of
the Notes to Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data.

Item 3. Legal Proceedings

The following governmental enforcement proceedings relating to environmental matters are reported pursuant
to instruction 5(C) of Item 103 of Regulation S-K because they involve potential monetary sanctions in excess of
$100,000:

We  are  the  subject  of  an  ongoing  Environmental  Protection  Agency  (EPA)  investigation  for  alleged
violations of the Clean Air Act (CAA). In March 2009, the EPA issued a Finding of Violation (FOV) related to
alleged  violations  of  the  CAA,  specifically  the  National  Emission  Standards  for  Hazardous  Air  Pollutants
(NESHAP) promulgated by the EPA for asbestos. The FOV pertains to the remodeling of 36 Target stores that
occurred between January 1, 2003 and October 28, 2007. The EPA FOV process is ongoing and no specific
relief has been sought to date by the EPA.

Item 4. Mine Safety Disclosures

Not applicable.

Item 4A. Executive Officers

The executive officers of Target as of March 15, 2012 and their positions and ages are as follows:

Name
Timothy R. Baer
Anthony S. Fisher
John D. Griffith
Beth M. Jacob

Title
Executive Vice President, General Counsel and Corporate Secretary
President, Target Canada
Executive Vice President, Property Development
Executive Vice President, Technology Services and Chief Information
Officer
Executive Vice President, Human Resources
Executive Vice President, Stores
Executive Vice President and Chief Financial Officer
President, Financial and Retail Services
Chairman of the Board, President and Chief Executive Officer
Executive Vice President, Merchandising
President, Community Relations and Target Foundation
Note: John J. Mulligan, 46, will replace Mr. Scovanner as Executive Vice President and Chief Financial Officer, effective April 1, 2012. From that
date until his planned retirement in November 2012, Mr. Scovanner will continue to be employed by Target in a non-executive officer capacity.

Jodeen A. Kozlak
Tina M. Schiel
Douglas A. Scovanner
Terrence J. Scully
Gregg W. Steinhafel
Kathryn A. Tesija
Laysha L. Ward

50
48
46
56
59
57
49
44

Age
51
37
50

10

Each  officer  is  elected  by  and  serves  at  the  pleasure  of  the  Board  of  Directors.  There  is  neither  a  family
relationship between any of the officers named and any other executive officer or member of the Board of Directors
nor any arrangement or understanding pursuant to which any person was selected as an officer. The service period
of each officer in the positions listed and other business experience for the past five years is listed below.

Timothy R. Baer

Executive Vice President, General Counsel and Corporate Secretary since March 2007.

Anthony S. Fisher

President, Target Canada since January 2011. Vice President, Merchandise Operations
from February 2010 to January 2011. From January 1999 to February 2010, Mr. Fisher
held  several  leadership  positions  with  Target  in  Merchandise  and  Merchandise
Planning.

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John D. Griffith

Executive Vice President, Property Development since February 2005.

Beth M. Jacob

Executive Vice President and Chief Information Officer since January 2010. Senior Vice
President and Chief Information Officer from July 2008 to January 2010. Vice President,
Guest Operations, Target Financial Services from August 2006 to July 2008.

Jodeen A. Kozlak

Executive Vice President, Human Resources since March 2007.

John J. Mulligan

Tina M. Schiel

Executive Vice President and Chief Financial Officer, effective April 1, 2012. Senior Vice
President, Treasury, Accounting and Operations since February 2010. Vice President,
Pay and Benefits from February 2007 to February 2010.

Executive  Vice  President,  Stores  since  January  2011.  Senior  Vice  President,  New
Business Development from February 2010 to January 2011. Senior Vice President,
Stores from February 2001 to February 2010.

Douglas A. Scovanner

Executive Vice President and Chief Financial Officer since February 2000.

Terrence J. Scully

President, Financial and Retail Services since March 2003.

Gregg W. Steinhafel

Chief Executive Officer since May 2008. President since August 1999. Director since
January 2007. Chairman of the Board since February 2009.

Kathryn A. Tesija

Laysha L. Ward

Executive  Vice  President,  Merchandising  since  May  2008.  Senior  Vice  President,
Merchandising from July 2001 to April 2008.

President,  Community  Relations  and  Target  Foundation  since  July  2008.  Vice
President, Community Relations from February 2003 to July 2008.

11

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

Purchases of Equity Securities

Our common stock is listed on the New York Stock Exchange under the symbol ‘‘TGT.’’ We are authorized to
issue up to 6,000,000,000 shares of common stock, par value $0.0833, and up to 5,000,000 shares of preferred
stock, par value $0.01. At March 12, 2012, there were 16,879 shareholders of record. Dividends declared per share
and the high and low closing common stock price for each fiscal quarter during 2011 and 2010 are disclosed in
Note  29  of  the  Notes  to  Consolidated  Financial  Statements,  included  in  Item  8,  Financial  Statements  and
Supplementary Data.

In November 2007, our Board of Directors authorized the repurchase of $10 billion of our common stock. Since
the inception of this share repurchase program, we have repurchased 188.6 million common shares for a total cash
investment of $9,721 million ($51.54 per share). In January 2012, our Board of Directors authorized a new $5 billion
share  repurchase  program.  Upon  completion  of  the  current  program,  we  expect  to  begin  repurchasing  shares
under this new authorization primarily through open-market transactions.

The table below presents information with respect to Target common stock purchases made during the three
months ended January 28, 2012, by Target or any ‘‘affiliated purchaser’’ of Target, as defined in Rule 10b-18(a)(3)
under the Exchange Act.

Period
October 30, 2011 through
November 26, 2011

November 27, 2011 through

December 31, 2011
January 1, 2012 through

January 28, 2012

Total Number
of Shares
Purchased (a)(b)

Average
Price Paid
per Share (a)

Total Number of
Shares Purchased
as Part of
Publicly Announced
Programs (a)

Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the
Programs

500,000

2,460,638

123,772
3,084,410

$ 52.35

52.46

50.20
$52.35

186,030,743

$ 413,469,141

188,483,902

284,784,698

188,607,674
188,607,674

5,278,571,598
$5,278,571,598

(a) The table above includes shares reacquired upon settlement of prepaid forward contracts. For the three months ended January 28, 2012,
0.2 million shares were reacquired through these contracts. At January 28, 2012, we held asset positions in prepaid forward contracts for
1.4 million shares of our common stock, for a total cash investment of $61 million, or an average per share price of $44.21. Refer to Notes 24
and 26 of the Notes to Consolidated Financial Statements for further details of these contracts.

(b) The number of shares above includes shares of common stock reacquired from team members who wish to tender owned shares to satisfy
the tax withholding on equity awards as part of our long-term incentive plans or to satisfy the exercise price on stock option exercises. For
the three months ended January 28, 2012, 7,479 shares were reacquired at an average per share price of $53.48 pursuant to our long-term
incentive plan.

12

Comparison of Cumulative Five Year Total Return

140

120

100

)
$
(

s
r
a

l
l

o
80D

60

40

Target

S&P 500 Index

Previous Peer Group

Current Peer Group

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2007

2008

2009

2010

2011

2012

14MAR201216093899

Target
S&P 500 Index
Previous Peer Group
Current Peer Group

Fiscal Years Ended

February 3,
2007
$100.00
100.00
100.00
100.00

February 2,
2008
$ 92.80
98.20
94.02
91.44

January 31,
2009
$ 51.45
59.54
68.93
70.87

January 30,
2010
$ 85.96
79.27
94.17
86.95

January 29,
2011
$ 92.57
96.12
112.57
97.40

January 28,
2012
$ 87.09
101.24
127.02
107.81

The graph above compares the cumulative total shareholder return on our common stock for the last five fiscal
years with (i) the cumulative total return on the S&P 500 Index, (ii) the peer group used in previous filings consisting
of  the  companies  comprising  the  S&P  500  Retailing  Index  and  the  S&P  500  Food  and  Staples  Retailing  Index
(Previous Peer Group), and (iii) a new peer group consistent with the group used in our annual proxy statement
filings  (Current  Peer  Group)  over  the  same  period.  The  Previous  Peer  Group  index  consists  of  40  general
merchandise, food and drug retailers. The Current Peer Group consists of 14 general merchandise, department
store,  food  and  specialty  retailers  which  are  large  and  meaningful  competitors.  This  group  includes  Best  Buy,
Costco, CVS Caremark, Home Depot, J. C. Penney, Kohl’s, Kroger, Lowe’s, Macy’s, Safeway, Sears, Supervalu,
Walgreens, and Walmart. The change in peer groups was made in order to move from a published industry index to
a group consisting of the same companies we use as our retail peer group for our definitive Proxy Statement to be
filed on or about April 30, 2012.

Both peer groups are weighted by the market capitalization of each component company. The graph assumes
the investment of $100 in Target common stock, the S&P 500 Index, the Previous Peer Group and the Current Peer
Group on February 3, 2007, and reinvestment of all dividends.

13

 
 
Item 6. Selected Financial Data

(millions, except per share data)
Financial Results:
Total revenues
Net earnings

Per Share:
Basic earnings per share
Diluted earnings per share
Cash dividends declared per share

Financial Position:
Total assets
Long-term debt, including current portion
(a) Consisted of 53 weeks.

As of or for the Year Ended

2011

2010

2009

2008

2007

2006 (a)

$69,865
2,929

$67,390
2,920

$65,357
2,488

$64,948
2,214

$63,367
2,849

$59,490
2,787

4.31
4.28
1.15

4.03
4.00
0.92

3.31
3.30
0.67

2.87
2.86
0.62

3.37
3.33
0.54

3.23
3.21
0.46

46,630
17,483

43,705
15,726

44,533
16,814

44,106
18,752

44,560
16,590

37,349
10,037

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

Operations

Executive Summary

Consolidated revenues were $69,865 million for 2011, an increase of $2,475 million or 3.7 percent from the
prior year. Consolidated earnings before interest expense and income taxes for 2011 increased by $70 million or
1.3 percent over 2010 to $5,322 million. Cash flow provided by operations was $5,434 million, $5,271 million and
$5,881 million for 2011, 2010 and 2009, respectively. Diluted earnings per share in 2011 increased 7.0 percent to
$4.28 from $4.00 in the prior year. Adjusted diluted earnings per share, which we believe is useful in providing
period-to-period comparisons of the results of our U.S. operations, increased 14.3 percent to $4.41 in 2011 from
$3.86 in the prior year.

Percent Change

2011/2010

2010/2009

Earnings Per Share

2011
$4.28
0.13
$4.41

2010
$ 4.00
(0.14)
$ 3.86

2009
$ 3.30
(0.04)
$ 3.26

GAAP diluted earnings per share
Adjustments (a)
Adjusted diluted earnings per share
Note: A reconciliation of non-GAAP financial measures to GAAP measures is provided on page 20.
(a) Adjustments represent the diluted EPS impact of our 2013 Canadian market entry, favorable resolution of various income tax matters and

14.3%

7.0%

21.4%

18.4%

the loss on early retirement of debt.

Our financial results for 2011 in our U.S. Retail Segment reflect increased sales of 4.1 percent over the same
period last year due to a 3.0 percent comparable-store increase combined with the contribution from new stores. In
2011  we  experienced  a  slight  reduction  in  U.S.  Retail  Segment  EBITDA  margin  rate  compared  to  2010,  due
primarily  to  a  decrease  in  gross  margin  rate,  partially  offset  by  a  favorable  selling,  general  and  administrative
(SG&A) expense rate. U.S. Retail Segment EBIT margin rate in 2011 was consistent with the 2010 rate. We opened
21 new stores in 2011 (13 net of 5 relocations and 3 closures). During 2010, we opened 13 new stores (10 net of 1
relocation and 2 closures).

In the U.S. Credit Card Segment, we achieved an increase in segment profit primarily due to declining bad debt

expense driven by improved trends in key measures of risk in our accounts receivable portfolio.

14

Our Canadian Segment was initially reported in our first quarter 2011 financial results, as a result of entering
into an agreement to purchase the leasehold interests in up to 220 sites in Canada operated by Zellers Inc. (Zellers).
We acquired leasehold interests in 189 Zellers sites for $1,861 million, and sold our right to acquire 54 of these sites
to third-party retailers and landlords for $225 million. These transactions resulted in a final net purchase price of
$1,636 million. We believe this transaction will allow us to open 125 to 135 Target stores in Canada, primarily during
2013. During 2011, Canadian Segment start-up costs totaled $74 million, and primarily consisted of compensation,
benefits and consulting expenses. These expenses are reported in selling, general and administrative expense
within the consolidated statement of operations.

Management’s Discussion and Analysis is based on our Consolidated Financial Statements in Item 8, Financial

Statements and Supplementary Data.

Analysis of Results of Operations

U.S. Retail Segment

Percent Change

2010/2009

2011/2010

U.S. Retail Segment Results
(millions)
Sales
Cost of sales
Gross margin
SG&A expenses (a)
EBITDA
Depreciation and amortization
EBIT
EBITDA is earnings before interest expense, income taxes, depreciation and amortization.
EBIT is earnings before interest expense and income taxes.
Note: See Note 28 to our Consolidated Financial Statements for a reconciliation of our segment results to earnings before income taxes.
(a) Effective with the October 2010 nationwide launch of our 5% REDcard Rewards loyalty program, we changed the formula under which the
U.S. Retail Segment charges the U.S. Credit Card Segment to better align with the attributes of this program. Loyalty program charges
were $258 million in 2011, $102 million in 2010 and $89 million in 2009. In all periods, these amounts were recorded as reductions to
SG&A  expenses  within  the  U.S.  Retail  Segment  and  increases  to  operations  and  marketing  expenses  within  the  U.S.  Credit  Card
Segment.

2011
$68,466
47,860
20,606
13,774
6,832
2,067
$ 4,765

2010
$65,786
45,725
20,061
13,367
6,694
2,065
$ 4,629

2009
$63,435
44,062
19,373
12,989
6,384
2,008
$ 4,376

4.1%
4.7
2.7
3.0
2.1
0.1
2.9%

3.7%
3.8
3.5
2.9
4.9
2.8
5.8%

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U.S. Retail Segment Rate Analysis
Gross margin rate
SG&A expense rate
EBITDA margin rate
Depreciation and amortization expense rate
EBIT margin rate
Rate analysis metrics are computed by dividing the applicable amount by sales.

2011
30.1%
20.1
10.0
3.0
7.0

2010
30.5%
20.3
10.2
3.1
7.0

2009
30.5%
20.5
10.1
3.2
6.9

Sales

Sales include merchandise sales, net of expected returns, from our stores and our online business, as well as
gift card breakage. Refer to Note 2 of the Notes to Consolidated Financial Statements for a definition of gift card
breakage. Total sales for the U.S. Retail Segment for 2011 were $68,466 million, compared with $65,786 million in
2010 and $63,435 million in 2009. All periods were 52-week years. Growth in total sales between 2011 and 2010, as
well  as  between  2010  and  2009,  resulted  from  higher  comparable-store  sales  and  additional  stores  opened.
Inflation did not materially affect sales during 2011 or 2010. During 2009, we experienced a deflationary impact on
sales of approximately 3.6 percentage points.

Refer to the Merchandise section in Item 1, Business, for additional product category information.

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Comparable-store sales is a measure that highlights the performance of our existing stores by measuring the
change in sales for such stores for a period over the comparable, prior-year period of equivalent length. The method
of  calculating  comparable-store  sales  varies  across  the  retail  industry.  As  a  result,  our  comparable-store  sales
calculation is not necessarily comparable to similarly titled measures reported by other companies.
Comparable-store sales are sales from our online business and stores open longer than one year, including:

(cid:129) sales from stores that have been remodeled or expanded while remaining open (including our current store

remodel program)

(cid:129) sales from stores that have been relocated to new buildings of the same format within the same trade area, in

which the new store opens at about the same time as the old store closes

Comparable-store sales do not include:

(cid:129) sales from general merchandise stores that have been converted, or relocated within the same trade area, to

a SuperTarget store format

(cid:129) sales from stores that were intentionally closed to be remodeled, expanded or reconstructed

Comparable-Store Sales
Comparable-store sales change
Drivers of change in comparable-store sales:

Number of transactions
Average transaction amount

Units per transaction
Selling price per unit

2011

3.0%

0.4
2.6
2.3
0.3

2010
2.1%

2.0
0.1
2.5
(2.3)

2009
(2.5)%

(0.2)
(2.3)
(1.5)
(0.8)

In 2011, the change in comparable-store sales was driven by a slight increase in the number of transactions
and  an  increase  in  the  average  transaction  amount,  reflecting  an  increase  in  units  per  transaction  and  a  slight
increase in selling price per unit. In 2010, the change in comparable-store sales was driven by an increase in the
number of transactions and a slight increase in the average transaction amount, reflecting an increase in units per
transaction  largely  offset  by  a  decrease  in  selling  price  per  unit.  The  collective  interaction  of  a  broad  array  of
macroeconomic, competitive and consumer behavioral factors, as well as sales mix, and transfer of sales to new
stores makes further analysis of sales metrics infeasible.

Our U.S. Credit Card Segment offers credit to qualified guests through our branded proprietary credit cards:
the  Target  Visa  Credit  Card  and  the  Target  Credit  Card  (Target  Credit  Cards).  Additionally,  we  offer  a  branded
proprietary Target Debit Card. Collectively, we refer to these products as REDcards(cid:2). Beginning October 2010,
guests receive a 5 percent discount on virtually all purchases at checkout every day when they use a REDcard at
any Target store or on Target.com.

We monitor the percentage of store sales that are paid for using REDcards (REDcard Penetration), because
our internal analysis has indicated that a meaningful portion of the incremental purchases on our REDcards are also
incremental sales for Target, with the remainder representing a shift in tender type.

REDcard Penetration
Target Credit Cards
Target Debit Card
Total Store REDcard Penetration

Gross Margin Rate

2011

6.8%
2.5
9.3%

2010

5.2%
0.7
5.9%

2009

5.2%
0.4%
5.6%

Gross margin rate represents gross margin (sales less cost of sales) as a percentage of sales. See Note 3 of the
Notes  to  Consolidated  Financial  Statements  for  a  description  of  costs  included  in  cost  of  sales.  Markup  is  the
difference between an item’s cost and its retail price (expressed as a percentage of its retail price). Factors that
affect markup include vendor offerings and negotiations, vendor income, sourcing strategies, market forces like
raw material and freight costs, and competitive influences. Markdowns are the reduction in the original or previous

16

price of retail merchandise. Factors that affect markdowns include inventory management, competitive influences
and economic conditions.

Our gross margin rate was 30.1 percent in 2011, decreasing from 30.5 percent in the prior year, reflecting the
impact  of  our  integrated  growth  strategies  of  5%  REDcard  Rewards  and  remodel  program,  partially  offset  by
underlying rate improvements within categories. The REDcard Rewards program reduces category gross margin
rates because it drives incremental sales among guests who receive 5% off on virtually all items purchased in our
stores and online. The remodel program reduces the overall gross margin rate because it drives incremental sales
with a stronger-than-average mix in lower-than-average gross margin rate product categories, primarily food.

Our gross margin rate was 30.5 percent in 2010, unchanged from prior year, as margin rates within categories
were generally stable and the impact of sales mix was essentially neutral. There were no other significant variances
in the drivers of gross margin rate.

Selling, General and Administrative Expense Rate

Our selling, general and administrative expense rate represents SG&A expenses as a percentage of sales. See
Note 3 of the Notes to Consolidated Financial Statements for a description of costs included in SG&A expenses.
SG&A  expenses  exclude  depreciation  and  amortization,  as  well  as  expenses  associated  with  our  credit  card
operations, which are reflected separately in our Consolidated Statements of Operations.

SG&A expense rate was 20.1 percent in 2011 compared with 20.3 percent in 2010 and 20.5 percent in 2009.
The change in the rate in 2011 was primarily due to increased charges to the U.S. Credit Segment and favorable
leverage  on  store  hourly  payroll  expense.  The  change  in  the  SG&A  expense  rate  in  2010  was  primarily  due  to
favorable leverage of overall compensation expenses.

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Depreciation and Amortization Expense Rate

Our  depreciation  and  amortization  expense  rate  represents  depreciation  and  amortization  expense  as  a
percentage  of  sales.  In  2011,  our  depreciation  and  amortization  expense  rate  was  3.0  percent  compared  with
3.1 percent in 2010 and 3.2 percent in 2009.

Store Data

Number of Stores

January 29, 2011
Opened
Format conversion
Closed (a)
January 28, 2012
Retail Square Feet (b)
(thousands)
January 29, 2011
Opened
Format conversion
Closed (a)
January 28, 2012

Target general
merchandise stores
1,037
—
(393)
(7)
637

Target general
merchandise stores
127,292
—
(49,494)
(799)
76,999

Expanded food
assortment stores
462
20
393
—
875

Expanded food
assortment stores
61,823
2,802
49,594
—
114,219

SuperTarget
stores
251
1
—
(1)
251

SuperTarget
stores
44,503
177
—
(177)
44,503

Includes 5 store relocations in the same trade area and 3 stores closed without replacement.

(a)
(b) Reflects total square feet less office, distribution center and vacant space.

Total
1,750
21
—
(8)
1,763

Total
233,618
2,979
100
(976)
235,721

17

 
U.S. Credit Card Segment

We offer credit to qualified guests through the Target Credit Cards. Our credit card program supports our core
retail operations and remains an important contributor to our overall profitability and engagement with our guests.
Beginning October 2010, guests receive a 5 percent discount on virtually all purchases at checkout, every day,
when they use a REDcard at any Target store or on Target.com.

Credit card revenues are comprised of finance charges, late fees and other revenue, and third party merchant

fees, which are amounts received from merchants who accept the Target Visa credit card.

In January 2011, we announced our plan to actively pursue the sale of our credit card receivables portfolio. In
January 2012, we announced that we temporarily suspended our efforts to sell the receivables portfolio until later in
2012. We intend to execute a transaction only if appropriate strategic and financial conditions are met, and we will
classify the credit card receivables portfolio as held for sale when a transaction that allows us to meet our objectives
has been agreed upon with a potential buyer.

U.S Credit Card Segment
Results

(millions)
Finance charge revenue
Late fees and other revenue
Third-party merchant fees
Total revenue
Bad debt expense
Operations and marketing

expenses (a)

Depreciation and amortization
Total expenses
EBIT
Interest expense on
nonrecourse debt
collateralized by credit card
receivables
Segment profit
Average receivables funded by

Target (b)

2011

2010

2009

Amount
$1,131
179
89
1,399
154

550
17
721
678

72
$ 606

$2,514

Rate (d)

17.9%
2.8
1.4
22.1
2.4

8.7
0.3
11.4
10.7

Amount
$1,302
197
105
1,604
528

433
19
980
624

83
$ 541

$2,771

Rate (d)

18.3%
2.8
1.5
22.6
7.4

6.1
0.3
13.8
8.8

Amount
$1,450
349
123
1,922
1,185

425
14
1,624
298

97
$ 201

$2,866

Rate (d)

17.4%
4.2
1.5
23.0
14.2

5.1
0.2
19.4
3.5

Segment pretax ROIC (c)
Note: See Note 28 to our Consolidated Financial Statements for a reconciliation of our segment results to earnings before income taxes.
(a) See footnote (a) to our U.S. Retail Segment Results table on page 15 for an explanation of our loyalty program charges.
(b) Amounts represent the portion of average gross credit card receivables funded by Target. For 2011, 2010 and 2009, these amounts
exclude $3,801 million, $4,335 million and $5,484 million, respectively, of receivables funded by nonrecourse debt collateralized by credit
card receivables.

19.5%

24.1%

7.0%

(c) ROIC is return on invested capital, and this rate equals our segment profit divided by average gross credit card receivables funded by

Target, expressed as an annualized rate.

(d) As an annualized percentage of average gross credit card receivables.

2011

Spread Analysis – Total
Portfolio
(millions)
EBIT
LIBOR  (a)
Spread to LIBOR (b)
(a) Balance-weighted one-month LIBOR.
(b) Spread to LIBOR is a metric used to analyze the performance of our total credit card portfolio because the majority of our portfolio earned
finance charge revenue at rates tied to the Prime Rate, and the interest rate on all nonrecourse debt securitized by credit card receivables
is tied to LIBOR.

8.8% (c)
0.3%
8.5% (c)

Rate
10.7% (c)

Amount
$678

Amount
$298

Amount
$624

10.5% (c)

0.2%

$663

2009

2010

$270

$604

Rate

Rate

3.5% (c)
0.3%
3.2% (c)

(c) As a percentage of average gross credit card receivables.

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Our primary measure of segment profit is the EBIT generated by our total credit card receivables portfolio less
the interest expense on nonrecourse debt collateralized by credit card receivables. We analyze this measure of
profit in light of the amount of capital we have invested in our credit card receivables. In addition, we measure the
performance of our overall credit card receivables portfolio by calculating the dollar spread to LIBOR at the portfolio
level.  This  metric  approximates  overall  financial  performance  of  the  entire  credit  card  portfolio  we  manage  by
measuring the difference between EBIT earned on the portfolio and a hypothetical benchmark rate financing cost
applied to the entire portfolio. The interest rate on all nonrecourse debt securitized by credit card receivables is tied
to LIBOR.

In 2011, segment profit increased to $606 million from $541 million, driven mostly by a decline in bad debt
expense, partially offset by lower total revenues. The reduction in our investment in the portfolio combined with
these  results  produced  a  strong  improvement  in  segment  ROIC.  Segment  revenues  were  $1,399  million,  a
decrease  of  $205  million,  or  12.8  percent,  from  the  prior  year,  which  was  primarily  driven  by  lower  average
receivables  resulting  in  reduced  finance  charge  revenue.  Segment  expenses  were  $721  million,  a  decrease  of
$259 million, or 26.5 percent, from prior year driven by lower bad debt expense due to improved trends in key
measures of risk. Segment interest expense on nonrecourse debt declined due to a decrease in nonrecourse debt
securitized by credit card receivables.

In 2010, segment profit increased to $541 million from $201 million, driven mostly by favorability in bad debt
expense.  The  reduction  in  our  investment  in  the  portfolio  combined  with  these  results  produced  a  strong
improvement in segment ROIC. Segment revenues were $1,604 million, a decrease of $318 million, or 16.5 percent,
from the prior year, which was primarily driven by lower average receivables as well as reduced late fees. Segment
expenses were $980 million, a decrease of $644 million, or 39.7 percent, from prior year driven primarily by lower
bad debt expense due to lower actual and expected write-offs. Segment interest expense on nonrecourse debt
declined due to a decrease in nonrecourse debt securitized by credit card receivables.

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Receivables Rollforward Analysis
(millions)

Beginning gross credit card receivables
Charges at Target
Charges at third parties
Payments
Other
Period-end gross credit card receivables
Average gross credit card receivables
Accounts with three or more payments (60+ days) past
due as a percentage of period-end gross credit card
receivables

Accounts with four or more payments (90+ days) past
due as a percentage of period-end gross credit card
receivables

2011

2010

2009

2011/2010

2010/2009

Percent Change

$ 6,843
5,098
5,192
(11,653)
877
$ 6,357
$ 6,314

$ 7,982
3,699
5,815
(11,283)
630
$ 6,843
$ 7,106

$ 9,094
3,553
6,763
(12,065)
637
$ 7,982
$ 8,351

(14.3)%
37.8
(10.7)
3.3
39.3
(7.1)%
(11.1)%

(12.2)%
4.1
(14.0)
(6.5)
(1.1)
(14.3)%
(14.9)%

3.3%

4.2%

6.3%

2.3%

3.1%

4.7%

Allowance for Doubtful Accounts
(millions)

Allowance at beginning of period
Bad debt expense
Write-offs (a)
Recoveries (a)
Allowance at end of period
As a percentage of period-end gross credit card receivables
Net write-offs as a percentage of average gross credit card

2011

2010

2009

2011/2010

2010/2009

Percent Change

$ 690
154
(572)
158
$ 430

6.8%

$ 1,016
528
(1,007)
153
690
10.1%

$

$ 1,010
1,185
(1,287)
108
$ 1,016

12.7%

(32.1)%
(70.8)
(43.2)
3.0
(37.7)%

0.6%

(55.4)
(21.8)
40.2
(32.1)%

receivables (annualized)

6.6%

12.0%

14.1%

(a) Write-offs include the principal amount of losses (excluding accrued and unpaid finance charges), and recoveries include current period

principal collections on previously written-off balances. These amounts combined represent net write-offs.

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Period-end  and  average  gross  receivables  have  declined  because  of  an  increase  in  payment  rates  and  a
decrease in Target Visa Credit Card charges at third-parties, partially offset by an increase in charges at Target over
the past two years. The decrease in charges on our credit cards at third parties is primarily due to the fact that we no
longer  issue  new  Target  Visa  accounts  and  we  undertook  risk  management  and  underwriting  initiatives  that
reduced available credit lines for higher-risk cardholders during 2009 and 2010.

We expect to report period-over-period declines in segment profit in 2012, primarily because our 2011 results

benefited from significant allowance reductions.

Canadian Segment

During  2011,  start-up  costs  totaled  $74  million  and  primarily  consisted  of  compensation,  benefits  and
consulting  expenses.  These  expenses  are  reported  in  SG&A  expense  within  the  consolidated  statement  of
operations.  Additionally,  we  recorded  $48  million  in  depreciation  for  2011  related  to  capital  lease  assets  and
leasehold interests acquired in our Zellers asset purchase.

We have begun to invest capital to prepare for site renovation, establish supply chain capabilities and build

supporting infrastructure.

Other Performance Factors

Net Interest Expense

Net interest expense, including interest expense on nonrecourse debt collateralized by credit card receivables
detailed in the U.S. Credit Card Segment Results above, was $866 million for 2011, increasing 14.4 percent, or
$109 million from 2010. This increase is due to an $87 million loss on early retirement of debt, $44 million of interest
on  Canadian  capitalized  leases  and  higher  average  debt  balances,  partially  offset  by  a  lower  average  portfolio
interest rate.

In 2010, net interest expense was $757 million, decreasing 5.5 percent or $44 million from 2009 due to lower
average debt balances and a $16 million charge related to the early retirement of long-term debt in 2009, partially
offset by a higher average portfolio interest rate.

Provision for Income Taxes

Our effective income tax rate was 34.3 percent in 2011 and 35.1 percent in 2010. The decrease in the effective
rate between periods is primarily due to a reduction in the structural domestic effective tax rate. This was slightly
offset by the unfavorable impact of losses in Canada which are tax effected at a lower rate than the U.S. rate. Various
income tax matters were resolved in 2011 and 2010 which reduced tax expense by $85 million and $102 million,
respectively. A tax rate reconciliation is provided in Note 22 to our Consolidated Financial Statements.

Our effective income tax rate was 35.1 percent in 2010 and 35.7 percent in 2009. The decrease in the effective
rate between periods is primarily due to the favorable resolution of various income tax matters, as noted above.
We expect a 2012 consolidated effective income tax rate of 36.7 percent to 37.7 percent, excluding the impact

of resolution of income tax matters.

Reconciliation of Non-GAAP Financial Measures to GAAP Measures

Our segment measure of profit is used by management to evaluate the return on our investment and to make
operating decisions. To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings
per share, which excludes the impact of our 2013 Canadian market entry, favorable resolution of various income tax
matters and the loss on early retirement of debt. We believe this information is useful in providing period-to-period
comparisons of the results of our U.S. operations. This measure is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. The most comparable GAAP measure is diluted
earnings per share. Non-GAAP adjusted EPS should not be considered in isolation or as a substitution for analysis

20

of our results as reported under GAAP. Other companies may calculate non-GAAP adjusted EPS differently than we
do, limiting the usefulness of the measure for comparisons with other companies.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

(millions, except per share data)

U.S. Retail

U.S.
Credit Card

Total U.S.

Canada Other

Consolidated
GAAP Total

2011
Segment profit
Other net interest expense (a)

Earnings before income taxes

Provision for income taxes (b)

Net earnings

Diluted earnings per share (c)
2010
Segment profit
Other net interest expense (a)

Earnings before income taxes

Provision for income taxes (b)

Net earnings

Diluted earnings per share (c)
2009
Segment profit
Other net interest expense (a)

Earnings before income taxes

Provision for income taxes (b)

Net earnings

$4,765

$606

$ 4,629

$541

$ 4,376

$201

$5,371
663

4,708
1,690

$ (122) $ —

44

87 (d)

(166)
(47)

(87)

(117) (e)

$3,018

$ (119) $ 30

$ 4.41

$(0.17) $0.04

$ 5,169
674

4,495
1,677

$ — $ —
—

—

—
—

—

(102) (e)

$ 2,818

$ — $ 102

$ 3.86

$ — $ 0.14

$ 4,576
687

3,889
1,426

$ — $ —

—

—
—

16 (d)

(16)
(41) (e)

$ 2,463

$ — $ 25

$5,250
794

4,456
1,527

$2,929

$ 4.28

$5,169
674

4,495
1,575

$2,920

$ 4.00

$4,576
704

3,872
1,384

$2,488

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Diluted earnings per share (c)
Note: A non-GAAP financial measures summary is provided on page 14. The sum of the non-GAAP adjustments may not equal the total
adjustment amounts due to rounding.
(a) Represents interest expense, net of interest income, not included in U.S. Credit Card segment profit. For 2011, 2010 and 2009, U.S. Credit
Card segment profit included $72 million, $83 million and $97 million of interest expense on nonrecourse debt collateralized by credit card
receivables, respectively. These amounts, along with other interest expense, equal consolidated GAAP interest expense.
In 2011, taxes are allocated to our business segments based on income tax rates applicable to the operations of the segment for the
period.

$ — $ 0.04

$ 3.30

$ 3.26

(b)

(c) For 2011, 2010 and 2009, average diluted shares outstanding were 683.9 million, 729.4 million and 754.8 million, respectively.
(d) Represents the loss on early retirement of debt.
(e) Represents the effect of resolution of income tax matters. The 2011 and 2009 results also include tax effects of $32 million and $6 million,

respectively, related to losses on early retirement of debt.

Analysis of Financial Condition

Liquidity and Capital Resources

Our period-end cash and cash equivalents balance was $794 million compared with $1,712 million in 2010.
Short-term investments (highly liquid investments with an original maturity of three months or less from the time of
purchase) of $194 million and $1,129 million were included in cash and cash equivalents at the end of 2011 and
2010,  respectively.  Our  investment  policy  is  designed  to  preserve  principal  and  liquidity  of  our  short-term
investments.  This  policy  allows  investments  in  large  money  market  funds  or  in  highly  rated  direct  short-term
instruments that mature in 60 days or less. We also place certain dollar limits on our investments in individual funds
or instruments.

21

 
Our 2011 operations were funded by both internally and externally generated funds. Cash flow provided by
operations was $5,434 million in 2011 compared with $5,271 million in 2010. During 2011, Target issued $3.5 billion
of debt that matures between January 2013 and January 2022. This cash flow, combined with our prior year-end
cash  position,  allowed  us  to  fund  capital  expenditures,  retire  outstanding  debt  obligations,  pay  dividends  and
continue  purchases  under  our  share  repurchase  program.  During  2011,  we  also  completed  our  real  estate
transaction with Zellers. This transaction resulted in a final net purchase price of $1,636 million.

Our 2011 period-end gross credit card receivables were $6,357 million compared with $6,843 million in 2010, a
decrease of 7.1 percent. Average gross credit card receivables in 2011 decreased 11.1 percent compared with
2010 levels. This change was driven by the factors indicated in the U.S. Credit Card Segment above.

During  2011  we  retired  our  2008  credit  card  financing  with  JPMorgan  Chase  by  making  principal  and
make-whole  payments  totaling  $3,080  million.  As  of  January  28,  2012,  $1  billion  of  our  credit  card  receivables
portfolio was funded by third parties. We intend to pursue a sale of our credit card receivables portfolio, which may
provide additional liquidity in 2012.

Year-end inventory levels increased $322 million, or 4.2 percent from 2010. Inventory levels were higher to
support traffic-driving strategic initiatives, such as our remodel program, including expanded food assortment and
pharmacy  offerings,  in  addition  to  comparatively  higher  retail  square  footage.  Accounts  payable  increased  by
$232 million, or 3.5 percent over the same period.

During  2011,  we  repurchased  37.2  million  shares  of  our  common  stock  for  a  total  cash  investment  of
$1,894 million ($50.89 per share) under a $10 billion share repurchase plan authorized by our Board of Directors in
November 2007. In 2010, we repurchased 47.8 million shares of our common stock for a total cash investment of
$2,508  million  ($52.44  per  share).  During  January  2012,  our  Board  of  Directors  authorized  a  $5  billion  share
repurchase plan. We expect to begin repurchasing shares under this new authorization upon completion of the
current program. We intend to complete this new program primarily through open market transactions in the next 2
to 3 years.

We paid dividends totaling $750 million in 2011 and $609 million in 2010, an increase of 23.1 percent. We
declared dividends totaling $777 million ($1.15 per share) in 2011, an increase of 17.8 percent over 2010. In 2010,
we declared dividends totaling $659 million ($0.92 per share), an increase of 31.1 percent over 2009. We have paid
dividends every quarter since our first dividend was declared following our 1967 initial public offering, and it is our
intent to continue to do so in the future.

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

Our ability to access the long-term debt, commercial paper and securitized debt markets has provided us with
ample  sources  of  liquidity.  Our  continued  access  to  these  markets  depends  on  multiple  factors  including  the
condition  of  debt  capital  markets,  our  operating  performance  and  maintaining  strong  debt  ratings.  The  ratings
assigned to our debt by the credit rating agencies affect both the pricing and terms of any new financing. As of
January 28, 2012 our credit ratings were as follows:

Credit Ratings

Long-term debt
Commercial paper

Moody’s

A2
P-1

Standard and
Poor’s

A+
A-1

Fitch
A(cid:4)
F2

If our credit ratings were lowered, our ability to access the debt markets and our cost of funds for new debt
issuances could be adversely impacted. Each of the credit rating agencies reviews its rating periodically and there
is no guarantee our current credit rating will remain the same as described above.

As a measure of our financial condition, we monitor our interest coverage ratio, representing the ratio of pretax
earnings before fixed charges to fixed charges. Fixed charges include interest expense and the interest portion of
rent expense. Our interest coverage ratio was 5.9x in 2011, 6.1x in 2010 and 5.1x in 2009.

22

In 2011, we funded our peak sales season working capital needs through our commercial paper program and
used the cash generated from that sales season to repay the commercial paper issued. In 2010, we funded our
working capital needs through internally generated funds and long-term debt issuance.

Commercial Paper
(millions)

Maximum daily amount outstanding during the year
Average amount outstanding during the year
Amount outstanding at year-end
Weighted average interest rate

2011

$1,211
244
—
0.11%

2010

$—
—
—
—

An additional source of liquidity is available to us through a committed $2.25 billion revolving credit facility
obtained through a group of banks in October 2011, which will expire in October 2016. This new revolving credit
facility replaced a $2 billion revolving credit facility that was scheduled to expire in April 2012. No balances were
outstanding at any time during 2011 or 2010 under either facility.

Most  of  our  long-term  debt  obligations  contain  covenants  related  to  secured  debt  levels.  In  addition  to  a
secured  debt  level  covenant,  our  credit  facility  also  contains  a  debt  leverage  covenant.  We  are,  and  expect  to
remain, in compliance with these covenants, and these covenants have no practical effect on our ability to pay
dividends. Additionally, at January 28, 2012, no notes or debentures contained provisions requiring acceleration of
payment upon a debt rating downgrade, except that certain outstanding notes allow the note holders to put the
notes  to  us  if  within  a  matter  of  months  of  each  other  we  experience  both  (i)  a  change  in  control;  and  (ii)  our
long-term debt ratings are either reduced and the resulting rating is non-investment grade, or our long-term debt
ratings are placed on watch for possible reduction and those ratings are subsequently reduced and the resulting
rating is non-investment grade.

We expect approximately $3.3 billion of capital expenditures in 2012, reflecting an estimated $2.5 billion in our
U.S. Retail Segment and approximately $800 million in our Canadian Segment. We believe our sources of liquidity
will continue to be adequate to maintain operations and to finance anticipated expansion and strategic initiatives
during  2012,  and  we  continue  to  anticipate  ample  access  to  long-term  financing.  See  the  Commitments  and
Contingencies  table  on  page  24  for  detailed  information  on  material  commitments  and  contingencies  as  of
January 28, 2012.

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Capital Expenditures

Capital expenditures were $4,368 million in 2011 compared with $2,129 million in 2010 and $1,729 million in

2009. This increase was driven by our purchase of Zellers leases in Canada as well as store remodels.

Capital Expenditures (a)
(millions)

U.S.

2011
Canada

Total

New stores
Remodels and expansions
Information technology, distribution and other
Total
(a) See Note 28 to our Consolidated Financial Statements for capital expenditures by segment.

$1,619
—
273
$1,892

$ 439
1,289
748
$2,476

$2,058
1,289
1,021
$4,368

2010

$ 574
966
589
$2,129

2009

$ 899
294
536
$1,729

23

 
Commitments and Contingencies

At January 28, 2012, our contractual obligations were as follows:

Contractual Obligations

(millions)
Recorded Contractual Obligations:

Long-term debt (a)

Unsecured
Nonrecourse

Capital lease obligations (b)
Real estate liabilities (c)
Deferred compensation (d)
Tax contingencies (e)

Unrecorded Contractual Obligations:
Interest payments – long-term debt

Unsecured
Nonrecourse
Operating lease (b)
Real estate obligations (f)
Purchase obligations (g)
Future contributions to retirement

plans (h)

Contractual obligations

Payments Due by Period

Total

Less than
1 Year

1-3
Years

3-5
Years

After 5
Years

$14,680
1,000
4,340
54
455
—

9,722
4
3,888
430
1,396

$3,001
750
122
54
47
—

691
4
194
301
492

—
$35,969

—
$5,656

$1,502
250
241
—
103
—

1,204
—
354
129
782

—
$4,565

$ 778
—
241
—
114
—

1,161
—
295
—
28

—
$2,617

$ 9,399
—
3,736
—
191
—

6,666
—
3,045
—
94

—
$23,131

(a) Required  principal  payments  only.  Excludes  fair  market  value  adjustments  recorded  in  long-term  debt,  as  required  by  derivative  and

hedging accounting rules.

(b) Total  contractual  lease  payments  include  $2,894  million  and  $1,910  million  of  capital  lease  payments  and  operating  lease  payments,
respectively, related to options to extend the lease term that are reasonably assured of being exercised. These payments also include
$828 million and $171 million of legally binding minimum lease payments for stores that are expected to open in 2012 or later for capital and
operating leases, respectively. Capital lease obligations include interest.

(c) Real estate liabilities include costs incurred but not paid related to the construction or remodeling of real estate and facilities.
(d) Deferred compensation obligations include commitments related to our nonqualified deferred compensation plans. The timing of deferred
compensation payouts is estimated based on payments currently made to former employees and retirees, forecasted investment returns,
and the projected timing of future retirements.

(e) Estimated tax contingencies of $318 million, including interest and penalties, are not included in the table above because we are not able to

make reasonably reliable estimates of the period of cash settlement.

(f) Real estate obligations include commitments for the purchase, construction or remodeling of real estate and facilities.
(g) Purchase  obligations  include  all  legally  binding  contracts  such  as  firm  minimum  commitments  for  inventory  purchases,  merchandise
royalties, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts. We issue
inventory purchase orders in the normal course of business, which represent authorizations to purchase that are cancelable by their terms.
We do not consider purchase orders to be firm inventory commitments; therefore, they are excluded from the table above. If we choose to
cancel a purchase order, we may be obligated to reimburse the vendor for unrecoverable outlays incurred prior to cancellation. We also
issue trade letters of credit in the ordinary course of business, which are excluded from this table as these obligations are conditioned on
terms of the letter of credit being met.

(h) We have not included obligations under our pension and postretirement health care benefit plans in the contractual obligations table above
because no additional amounts are required to be funded as of January 28, 2012. Our historical practice regarding these plans has been to
contribute amounts necessary to satisfy minimum pension funding requirements, plus periodic discretionary amounts determined to be
appropriate.

Off  Balance  Sheet  Arrangements We  do  not  have  any  arrangements  or  relationships  with  entities  that  are  not
consolidated into the financial statements or financial guarantees that are reasonably likely to materially affect our
liquidity or the availability of capital resources.

24

Critical Accounting Estimates

Our analysis of operations and financial condition is based on our consolidated financial statements, prepared
in  accordance  with  U.S.  generally  accepted  accounting  principles  (GAAP).  Preparation  of  these  consolidated
financial statements requires us to make estimates and assumptions affecting the reported amounts of assets and
liabilities at the date of the consolidated financial statements, reported amounts of revenues and expenses during
the  reporting  period  and  related  disclosures  of  contingent  assets  and  liabilities.  In  the  Notes  to  Consolidated
Financial Statements, we describe the significant accounting policies used in preparing the consolidated financial
statements. Our estimates are evaluated on an ongoing basis and are drawn from historical experience and other
assumptions that we believe to be reasonable under the circumstances. Actual results could differ under other
assumptions or conditions. However, we do not believe there is a reasonable likelihood that there will be a material
change in future estimates or assumptions. Our senior management has discussed the development and selection
of our critical accounting estimates with the Audit Committee of our Board of Directors. The following items in our
consolidated financial statements require significant estimation or judgment:

Inventory and cost of sales We use the retail inventory method to account for substantially all inventory and the
related cost of sales. Under this method, inventory is stated at cost using the last-in, first-out (LIFO) method as
determined by applying a cost-to-retail ratio to each merchandise grouping’s ending retail value. Cost includes the
purchase  price  as  adjusted  for  vendor  income.  Since  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  shrink  and  markdowns.  Our  shrink  estimate  is  based  on  historical  losses  verified  by  ongoing
physical inventory counts. Historically, our actual physical inventory count results have shown our estimates to be
reliable.  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. Relevant economic conditions
include  changing  consumer  demand,  customer  preferences,  changing  consumer  credit  markets  or  increasing
competition. We believe these risks are largely mitigated because our inventory typically turns in less than three
months. Inventory was $7,918 million and $7,596 million at January 28, 2012 and January 29, 2011, respectively,
and is further described in Note 11 of the Notes to Consolidated Financial Statements.

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Vendor income receivable Cost of sales and SG&A expenses are partially offset by various forms of consideration
received from our vendors. This ‘‘vendor income’’ is earned for a variety of vendor-sponsored programs, such as
volume  rebates,  markdown  allowances,  promotions  and  advertising  allowances,  as  well  as  for  our  compliance
programs.  We  establish  a  receivable  for  the  vendor  income  that  is  earned  but  not  yet  received.  Based  on  the
agreements in place, this receivable is computed by estimating when we have completed our performance and
when  the  amount  is  earned.  The  majority  of  all  year-end  vendor  income  receivables  are  collected  within  the
following fiscal quarter, and we do not believe there is a reasonable likelihood that the assumptions used in our
estimate will change significantly. Historically, adjustments to our vendor income receivable have not been material.
Vendor  income  receivable  was  $589  million  and  $517  million  at  January  28,  2012  and  January  29,  2011,
respectively, and is described further in Note 4 of the Notes to Consolidated Financial Statements.

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-related  fees.  We  estimate  future  write-offs  based  on  historical  experience  of
delinquencies, risk scores, aging trends and industry risk trends. Substantially all past-due accounts accrue finance
charges until they are written off. Accounts are automatically written off when they become 180 days past due.
Management believes the allowance for doubtful accounts is appropriate to cover anticipated losses in our credit
card accounts receivable under current conditions; however, unexpected, significant deterioration in any of the
factors  mentioned  above  or  in  general  economic  conditions  could  materially  change  these  expectations.  Our
allowance for doubtful accounts related to our credit card receivables decreased $260 million, from $690 million, or
10.1 percent of gross credit card receivables, at January 29, 2011 to $430 million, or 6.8 percent of gross credit card

25

 
receivables, at January 28, 2012. Credit card receivables and our allowance for doubtful accounts are described in
Note 10 of the Notes to Consolidated Financial Statements.

Long-lived assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset (or asset group) may not be recoverable. An impairment loss would be
recognized when estimated undiscounted future cash flows from the operation and disposition of the asset group
are less than the carrying amount of the asset group. Asset groups have identifiable cash flows independent of
other asset groups. Measurement of an impairment loss would be based on the excess of the carrying amount of
the asset group over its fair value. Fair value is measured using discounted cash flows or independent opinions of
value, as appropriate. A 10 percent decrease in the fair value of assets we intend to sell as of January 28, 2012
would result in additional impairment of $6 million in 2011. Historically, we have not realized material losses upon
sale of long-lived assets.

Insurance/self-insurance We  retain  a  substantial  portion  of  the  risk  related  to  certain  general  liability,  workers’
compensation,  property  loss  and  team  member  medical  and  dental  claims.  However,  we  maintain  stop-loss
coverage to limit the exposure related to certain risks. Liabilities associated with these losses include estimates of
both claims filed and losses incurred but not yet reported. We use actuarial methods which consider a number of
factors to estimate our ultimate cost of losses. General liability and workers’ compensation liabilities are recorded at
our  estimate  of  their  net  present  value;  other  liabilities  referred  to  above  are  not  discounted.  Our  workers’
compensation and general liability accrual was $646 million and $628 million at January 28, 2012 and January 29,
2011,  respectively.  We  believe  that  the  amounts  accrued  are  appropriate;  however,  our  liabilities  could  be
significantly  affected  if  future  occurrences  or  loss  developments  differ  from  our  assumptions.  For  example,  a
5 percent increase or decrease in average claim costs would impact our self-insurance expense by $32 million in
2011. Historically, adjustments to our estimates have not been material. Refer to Item 7A for further disclosure of the
market risks associated with these exposures.

Income taxes We pay income taxes based on the tax statutes, regulations and case law of the various jurisdictions
in which we operate. Significant judgment is required in determining the timing and amounts of deductible and
taxable items and in evaluating the ultimate resolution of tax matters in dispute with tax authorities. The benefits of
uncertain  tax  positions  are  recorded  in  our  financial  statements  only  after  determining  whether  it  is  likely  the
uncertain  tax  positions  would  withstand  challenge  by  taxing  authorities.  We  periodically  reassess  these
probabilities, and record any changes in the financial statements as deemed appropriate. Liabilities for tax positions
considered uncertain, including interest and penalties, were $318 million and $397 million at January 28, 2012 and
January 29, 2011, respectively. We believe the resolution of these matters will not have a material adverse impact on
our consolidated financial statements. Income taxes are described further in Note 22 of the Notes to Consolidated
Financial Statements.

Pension  and  postretirement  health  care  accounting We  fund  and  maintain  a  qualified  defined  benefit  pension
plan. We also maintain several smaller nonqualified plans and a postretirement health care plan for certain current
and retired team members. The costs for these plans are determined based on actuarial calculations using the
assumptions described in the following paragraphs. Eligibility for, and the level of, these benefits varies depending
on team members’ full-time or part-time status, date of hire and/or length of service.

Our  expected  long-term  rate  of  return  on  plan  assets  of  8.0%  is  determined  by  the  portfolio  composition,
historical long-term investment performance and current market conditions. Our compound annual rate of return on
qualified plans’ assets was 5.1 percent, 7.8 percent and 8.3 percent for the 5-year, 10-year and 15-year periods,
respectively. Benefits expense recorded during the year is partially dependent upon the long-term rate of return
used. A one percentage point decrease in the expected long-term rate of return used to determine net pension and
postretirement health care benefits expense would increase annual expense by $26 million.

The discount rate used to determine benefit obligations is adjusted annually based on the interest rate for
long-term high-quality corporate bonds as of the measurement date, using yields for maturities that are in line with
the duration of our pension liabilities. Therefore, these liabilities fluctuate with changes in interest rates. Historically,

26

this  same  discount  rate  has  also  been  used  to  determine  net  pension  and  postretirement  health  care  benefits
expense for the following plan year. Benefits expense recorded during the year is partially dependent upon the
discount rates used, and a 0.5 percentage point decrease to the weighted average discount rate used to determine
net pension and postretirement health care benefits expense would increase annual expense by $25 million.

Based  on  our  experience,  we  use  a  graduated  compensation  growth  schedule  that  assumes  higher
compensation growth for younger, shorter-service pension-eligible team members than it does for older, longer-
service pension-eligible team members.

Pension and postretirement health care benefits are further described in Note 27 of the Notes to Consolidated

Financial Statements.

Legal contingencies We are exposed to claims and litigation arising in 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. Historically, adjustments to our estimates have not been material. We believe the recorded
reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities. We
do not believe that any of the currently identified claims or litigation matters will have a material adverse impact on
our results of operations, cash flows or financial condition. However, litigation is subject to inherent uncertainties,
and unfavorable rulings could occur. If an unfavorable ruling were to occur, there may be a material adverse impact
on the results of operations, cash flows or financial condition for the period in which the ruling occurs, or future
periods.

New Accounting Pronouncements

We  do  not  expect  that  any  recently  issued  accounting  pronouncements  will  have  a  material  effect  on  our
financial  statements,  although  we  will  be  presenting  a  separate  Statement  of  Comprehensive  Income  in
accordance with Accounting Standard Update 2011-05, ‘‘Comprehensive Income (Topic 220)’’ beginning in 2012.

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Forward-Looking Statements

This  report  contains  forward-looking  statements,  which  are  based  on  our  current  assumptions  and
expectations.  These  statements  are  typically  accompanied  by  the  words  ‘‘expect,’’  ‘‘may,’’  ‘‘could,’’  ‘‘believe,’’
‘‘would,’’ ‘‘might,’’ ‘‘anticipates,’’ or words of similar import. The principal forward-looking statements in this report
include: For our U.S. Credit Card Segment, aggregate portfolio risks and the level of, the allowance for doubtful
accounts, anticipated segment profit, and the pursuit and timing of a portfolio sale; for our Canadian Segment, our
performance,  timing  and  amount  of  future  capital  investments  in  Canada;  on  a  consolidated  basis,  statements
regarding the adequacy of and costs associated with our sources of liquidity, the continued execution of our share
repurchase program and the expected duration of the approved programs, our expected capital expenditures, the
expected effective income tax rate, the expected compliance with debt covenants, the expected impact of new
accounting pronouncements, our intentions regarding future dividends, contributions related to our pension and
postretirement health care plans, the expected returns on pension plan assets, the impact of future changes in
foreign  currency,  the  effects  of  macroeconomic  conditions,  the  adequacy  of  our  reserves  for  general  liability,
workers’  compensation,  property  loss,  the  expected  outcome  of  claims  and  litigation,  the  expected  ability  to
recognize deferred tax assets and liabilities, including foreign net operating loss carryforwards, and the resolution
of tax matters.

All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Although we believe
there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The
most important factors which could cause our actual results to differ from our forward-looking statements are set
forth on our description of risk factors in Item 1A to this Form 10-K, which should be read in conjunction with the
forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and
we do not undertake any obligation to update any forward-looking statement.

27

 
Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk results primarily from interest rate changes on our debt obligations, some of which
are at a LIBOR-plus floating-rate, and on our credit card receivables, the majority of which are assessed finance
charges  at  a  Prime-based  floating-rate.  To  manage  our  net  interest  margin,  we  generally  maintain  levels  of
floating-rate debt to generate similar changes in net interest expense as finance charge revenues fluctuate. The
degree of floating asset and liability matching may vary over time and in different interest rate environments. At
January 28, 2012, the amount of floating-rate credit card assets exceeded the amount of net floating-rate debt
obligations by approximately $2 billion. As a result, based on our balance sheet position at January 28, 2012, the
annualized effect of a 0.1 percentage point decrease in floating interest rates on our floating rate debt obligations,
net of our floating rate credit card assets and short-term investments, would be to decrease earnings before income
taxes by approximately $2 million. See further description of our debt and derivative instruments in Notes 19 and 20
of the Notes to Consolidated Financial Statements.

We  record  our  general  liability  and  workers’  compensation  liabilities  at  net  present  value;  therefore,  these
liabilities fluctuate with changes in interest rates. Periodically, in certain interest rate environments, we economically
hedge a portion of our exposure to these interest rate changes by entering into interest rate forward contracts that
partially mitigate the effects of interest rate changes. Based on our balance sheet position at January 28, 2012, the
annualized effect of a 0.5 percentage point decrease in interest rates would be to decrease earnings before income
taxes by $9 million.

In addition, we are exposed to market return fluctuations on our qualified defined benefit pension plans. The
annualized effect of a one percentage point decrease in the return on pension plan assets would decrease plan
assets by $29 million at January 28, 2012. The value of our pension liabilities is inversely related to changes in
interest rates. To protect against declines in interest rates, we hold high-quality, long-duration bonds and interest
rate swaps in our pension plan trust. At year-end, we had hedged 35 percent of the interest rate exposure of our
funded status.

As more fully described in Note 14 and Note 26 of the Notes to Consolidated Financial Statements, we are
exposed  to  market  returns  on  accumulated  team  member  balances  in  our  nonqualified,  unfunded  deferred
compensation plans. We control the risk of offering the nonqualified plans by making investments in life insurance
contracts  and  prepaid  forward  contracts  on  our  own  common  stock  that  offset  a  substantial  portion  of  our
economic  exposure  to  the  returns  on  these  plans.  The  annualized  effect  of  a  one  percentage  point  change  in
market returns on our nonqualified defined contribution plans (inclusive of the effect of the investment vehicles
used to manage our economic exposure) would not be significant.

Our  investment  in  Canada  during  2011  has  exposed  us  to  market  risk  associated  with  foreign  currency
exchange rate fluctuations between the Canadian dollar and the U.S. dollar that we were not exposed to in previous
years. Similar foreign currency risk will exist as new Target stores are opened in Canada and inventory is purchased
in both U.S. and Canadian dollars. During 2011, gains and losses due to fluctuations in exchange rates were not
significant.  Currently,  we  do  not  have  significant  direct  exposure  to  other  foreign  currency  exchange  rate
fluctuations, as all of our stores are located in the United States, and the vast majority of imported merchandise is
purchased in U.S. dollars.

There have been no other material changes in our primary risk exposures or management of market risks since

the prior year.

28

Item 8. Financial Statements and Supplementary Data

Report of Management on the Consolidated Financial Statements

Management is responsible for the consistency, integrity and presentation of the information in the Annual Report. The
consolidated financial statements and other information presented in this Annual Report have been prepared in accordance with
accounting principles generally accepted in the United States and include necessary judgments and estimates by management.
To  fulfill  our  responsibility,  we  maintain  comprehensive  systems  of  internal  control  designed  to  provide  reasonable
assurance that assets are safeguarded and transactions are executed in accordance with established procedures. The concept
of reasonable assurance is based upon recognition that the cost of the controls should not exceed the benefit derived. We
believe our systems of internal control provide this reasonable assurance.

The Board of Directors exercised its oversight role with respect to the Corporation’s systems of internal control primarily
through its Audit Committee, which is comprised of independent directors. The Committee oversees the Corporation’s systems
of internal control, accounting practices, financial reporting and audits to assess whether their quality, integrity and objectivity
are sufficient to protect shareholders’ investments.

In addition, our consolidated financial statements have been audited by Ernst & Young LLP, independent registered public

accounting firm, whose report also appears on this page.

4MAR200909320639

Gregg W. Steinhafel
Chief Executive Officer and President
March 15, 2012

1APR200416064753

Douglas A. Scovanner
Executive Vice President and
Chief Financial Officer

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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
(the Corporation) as of January 28, 2012 and January 29, 2011, and the related consolidated statements of operations, cash
flows, and shareholders’ investment for each of the three years in the period ended January 28, 2012. Our audits also included
the  financial  statement  schedule  listed  in  Item  15(a).  These  financial  statements  and  schedule  are  the  responsibility  of  the
Corporation’s management. Our responsibility is to express an opinion on these financial statements and schedule 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. 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 28, 2012 and January 29, 2011, and the consolidated results of their
operations  and  their  cash  flows  for  each  of  the  three  years  in  the  period  ended  January  28,  2012,  in  conformity  with  U.S.
generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, 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  also  have  audited,  in  accordance  with  the  standards  of  the  Public  Company  Accounting  Oversight  Board
(United States), the Corporation’s internal control over financial reporting as of January 28, 2012, 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 15, 2012, expressed an unqualified opinion thereon.

Minneapolis, Minnesota
March 15, 2012

29

 
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  28,  2012,  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  internal  control  over  financial  reporting  as  of  January  28,  2012,  has  been  audited  by  Ernst  &  Young  LLP,  the
independent registered accounting firm who has also audited our consolidated financial statements, as stated in their report
which appears on this page.

4MAR200909320639

Gregg W. Steinhafel
Chief Executive Officer and President
March 15, 2012

1APR200416064753

Douglas A. Scovanner
Executive Vice President and
Chief Financial Officer

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
The Board of Directors and Shareholders
Target Corporation

We  have  audited  Target  Corporation  and  subsidiaries’  (the  Corporation)  internal  control  over  financial  reporting  as  of
January  28,  2012,  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  included  in  the  accompanying  Report  of  Management  on  Internal  Control  over  Financial  Reporting.  Our
responsibility is to express an opinion on 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
(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,  assessing  the  risk  that  a  material  weakness  exists,  testing  and
evaluating the design and operating effectiveness of internal control based on the assessed risk, 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, the Corporation maintained, in all material respects, effective internal control over financial reporting as of

January 28, 2012, based on the COSO criteria.

We  also  have  audited,  in  accordance  with  the  standards  of  the  Public  Company  Accounting  Oversight  Board
(United States), the consolidated statements of financial position of Target Corporation and subsidiaries as of January 28, 2012
and January 29, 2011, and the related consolidated statements of operations, cash flows and shareholders’ investment for each
of the three years in the period ended January 28, 2012, and our report dated March 15, 2012, expressed an unqualified opinion
thereon.

Minneapolis, Minnesota
March 15, 2012

30

Consolidated Statements of Operations

(millions, except per share data)

Sales
Credit card revenues
Total revenues
Cost of sales
Selling, general and administrative expenses
Credit card expenses
Depreciation and amortization
Earnings before interest expense and income taxes
Net interest expense

Nonrecourse debt collateralized by credit card receivables
Other interest expense
Interest income
Net interest expense
Earnings before income taxes
Provision for income taxes
Net earnings
Basic earnings per share
Diluted earnings per share
Weighted average common shares outstanding

Basic
Diluted

See accompanying Notes to Consolidated Financial Statements.

2011

2010

2009

$68,466
1,399
69,865
47,860
14,106
446
2,131
5,322

72
797
(3)
866
4,456
1,527
$ 2,929
$ 4.31
$ 4.28

$65,786
1,604
67,390
45,725
13,469
860
2,084
5,252

83
677
(3)
757
4,495
1,575
$ 2,920
4.03
$
4.00
$

$63,435
1,922
65,357
44,062
13,078
1,521
2,023
4,673

97
707
(3)
801
3,872
1,384
$ 2,488
$ 3.31
$ 3.30

679.1
683.9

723.6
729.4

752.0
754.8

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Consolidated Statements of Financial Position

(millions, except footnotes)
Assets
Cash and cash equivalents, including short-term investments of $194 and $1,129
Credit card receivables, net of allowance of $430 and $690
Inventory
Other current assets

Total current assets
Property and equipment

Land
Buildings and improvements
Fixtures and equipment
Computer hardware and software
Construction-in-progress
Accumulated depreciation
Property and equipment, net

Other noncurrent assets
Total assets
Liabilities and shareholders’ investment
Accounts payable
Accrued and other current liabilities
Unsecured debt and other borrowings
Nonrecourse debt collateralized by credit card receivables

Total current liabilities

Unsecured debt and other borrowings
Nonrecourse debt collateralized by credit card receivables
Deferred income taxes
Other noncurrent liabilities

Total noncurrent liabilities

Shareholders’ investment

Common stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total shareholders’ investment

Total liabilities and shareholders’ investment

January 28,
2012

January 29,
2011

$

794
5,927
7,918
1,810
16,449

6,122
26,837
5,141
2,468
963
(12,382)
29,149
1,032
$ 46,630

$ 6,857
3,644
3,036
750
14,287
13,447
250
1,191
1,634
16,522

56
3,487
12,959
(681)
15,821
$ 46,630

$ 1,712
6,153
7,596
1,752
17,213

5,928
23,081
4,939
2,533
567
(11,555)
25,493
999
$ 43,705

$ 6,625
3,326
119
—
10,070
11,653
3,954
934
1,607
18,148

59
3,311
12,698
(581)
15,487
$ 43,705

Common  Stock  Authorized  6,000,000,000  shares,  $0.0833  par  value;  669,292,929  shares  issued  and  outstanding  at  January  28,  2012;
704,038,218 shares issued and outstanding at January 29, 2011.

Preferred Stock Authorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding at January 28, 2012 or January 29, 2011.

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows

(millions)

Operating activities
Net earnings
Reconciliation to cash flow

Depreciation and amortization
Share-based compensation expense
Deferred income taxes
Bad debt expense
Non-cash (gains)/losses and other, net
Changes in operating accounts:

Accounts receivable originated at Target
Inventory
Other current assets
Other noncurrent assets
Accounts payable
Accrued and other current liabilities
Other noncurrent liabilities
Cash flow provided by operations
Investing activities

Expenditures for property and equipment
Proceeds from disposal of property and equipment
Change in accounts receivable originated at third parties
Other investments

Cash flow required for investing activities
Financing activities

Additions to short-term debt
Additions to long-term debt
Reductions of long-term debt
Dividends paid
Repurchase of stock
Stock option exercises and related tax benefit
Other

Cash flow required for financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

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2011

2010

2009

$ 2,929

$ 2,920

$ 2,488

2,131
90
371
154
22

(187)
(322)
(150)
43
232
218
(97)
5,434

(4,368)
37
259
(108)
(4,180)

1,500
1,994
(3,125)
(750)
(1,842)
89
(6)
(2,140)
(32)
(918)
1,712
794

$

2,084
109
445
528
(145)

(78)
(417)
(124)
(212)
115
149
(103)
5,271

2,023
103
364
1,185
143

(57)
(474)
(129)
(114)
174
257
(82)
5,881

(2,129)
69
363
(47)
(1,744)

(1,729)
33
(10)
3
(1,703)

—
1,011
(2,259)
(609)
(2,452)
294
—
(4,015)
—
(488)
2,200
$ 1,712

—
—
(1,970)
(496)
(423)
47
—
(2,842)
—
1,336
864
$ 2,200

Cash paid for income taxes was $1,109 million, $1,259 million and $1,040 million during 2011, 2010 and 2009, respectively. Cash paid for
interest (net of interest capitalized) was $816 million, $752 million and $805 million during 2011, 2010 and 2009, respectively.

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Shareholders’ Investment

Accumulated Other
Comprehensive
Income/(Loss)

(millions, except footnotes)
January 31, 2009
Net earnings

Other comprehensive income

Pension and other benefit liability
adjustments, net of taxes of $17

Cash flow hedges, net of taxes

of $2

Currency translation adjustment,

net of taxes of $0

Total comprehensive income

Dividends declared
Repurchase of stock
Stock options and awards
January 30, 2010
Net earnings

Other comprehensive income

Pension and other benefit liability
adjustments, net of taxes of $4

Cash flow hedges, net of taxes

of $2

Currency translation adjustment,

net of taxes of $1

Total comprehensive income

Dividends declared
Repurchase of stock
Stock options and awards
January 29, 2011
Net earnings

Other comprehensive income

Pension and other benefit liability
adjustments, net of taxes of $56

Cash flow hedges, net of taxes

of $2

Currency translation adjustment, net

of taxes of $13

Total comprehensive income

Dividends declared
Repurchase of stock
Stock options and awards
January 28, 2012

Stock

Common Stock Additional
Par
Shares Value
$63
—

752.7
—

Pension and
Other
Benefit
Paid-in Retained
Liability
Capital Earnings Adjustments
$(510)
$2,762
—
—

$11,443
2,488

—

—

—

—

—

—

—

—

—

—

—

—

—
(9.9)
1.8
744.6
—

—
(1)
—
$62
—

—
—
157
$2,919
—

(503)
(481)
—
$12,947
2,920

—

—

—

—

—

—

—

—

—

—

—

—

—
(47.8)
7.2
704.0
—

—
(4)
1
$59
—

—
—
392
$3,311
—

(659)
(2,510)
—
$12,698
2,929

—

—

—

—

—

—

—

—

—

—

—

—

—
(37.2)
2.5
669.3

—
(3)
—
$56

—
(777)
— (1,891)
—
$12,959

176
$3,487

(27)

—

—

—
—
—
$(537)
—

(4)

—

—

—
—
—
$(541)
—

(83)

—

—

—
—
—
$(624)

Derivative
Instruments,
Foreign
Currency
and Other

Total
$(46) $13,712
— 2,488

—

4

(27)

4

(2)

(2)
2,463
(503)
(482)
157
$(44) $15,347
— 2,920

—
—
—

—

3

(4)

3

1

1
2,920
—
(659)
— (2,514)
393
—
$(40) $15,487
— 2,929

—

3

(83)

3

(20)

(20)
2,829
—
(777)
— (1,894)
176
—
$(57) $15,821

Dividends declared per share were $1.15, $0.92 and $0.67 in 2011, 2010 and 2009, respectively.

See accompanying Notes to Consolidated Financial Statements.

34

Notes to Consolidated Financial Statements

1. Summary of Accounting Policies

Organization Target Corporation (Target, the Corporation, or the Company) operates three reportable segments:
U.S. Retail, U.S. Credit Card and Canadian. Our U.S. Retail Segment includes all of our merchandising operations,
including  our  fully  integrated  online  business.  Our  U.S.  Credit  Card  Segment  offers  credit  to  qualified  guests
through our branded proprietary credit cards; the Target Visa Credit Card and the Target Credit Card (Target Credit
Cards). Additionally, we offer a branded proprietary Target Debit Card. Collectively, we refer to these products as
REDcards(cid:2), which strengthen the bond with our guests, drive incremental sales and contribute to our results of
operations. Our Canadian Segment was initially reported in the first quarter of 2011 as a result of our purchase of
leasehold interests in Canada from Zellers, Inc. (Zellers). This segment includes costs incurred in the U.S. and
Canada related to our planned 2013 Canadian retail market entry.

Consolidation The consolidated financial statements include the balances of the Corporation and its subsidiaries
after  elimination  of  intercompany  balances  and  transactions.  All  material  subsidiaries  are  wholly  owned.  We
consolidate variable interest entities where it has been determined that the Corporation is the primary beneficiary of
those  entities’  operations,  including  a  bankruptcy  remote  subsidiary  through  which  we  sell  certain  accounts
receivable as a method of providing funding for our accounts receivable.

Use  of  estimates The  preparation  of  our  consolidated  financial  statements  in  conformity  with  U.S.  generally
accepted  accounting  principles  (GAAP)  requires  management  to  make  estimates  and  assumptions  affecting
reported  amounts  in  the  consolidated  financial  statements  and  accompanying  notes.  Actual  results  may  differ
significantly 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 2011 ended January 28, 2012, and consisted
of 52 weeks. Fiscal 2010 ended January 29, 2011, and consisted of 52 weeks. Fiscal 2009 ended January 30, 2010,
and consisted of 52 weeks. Fiscal 2012 will end February 2, 2013, and will consist of 53 weeks.

Accounting policies Our accounting policies are disclosed in the applicable Notes to the Consolidated Financial
Statements.

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

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2. Revenues

Our retail stores generally record revenue at the point of sale. Sales from our online business include shipping
revenue  and  are  recorded  upon  delivery  to  the  guest.  Total  revenues  do  not  include  sales  tax  as  we  consider
ourselves  a  pass-through  conduit  for  collecting  and  remitting  sales  taxes.  Generally,  guests  may  return
merchandise within 90 days of purchase. Revenues are recognized net of expected returns, which we estimate
using  historical  return  patterns  as  a  percentage  of  sales.  Commissions  earned  on  sales  generated  by  leased
departments are included within sales and were $22 million in 2011, $20 million in 2010 and $18 million in 2009.
Revenue from gift card sales is recognized upon gift card redemption. Our gift cards do not have expiration
dates. Based on historical redemption rates, a small and relatively stable percentage of gift cards will never be
redeemed, referred to as ‘‘breakage.’’ Estimated breakage revenue is recognized over time in proportion to actual
gift card redemptions and was not material in 2011, 2010 and 2009.

Credit card revenues are recognized according to the contractual provisions of each credit card agreement.
When accounts are written off, uncollected finance charges and late fees are recorded as a reduction of credit card
revenues. Target retail sales charged on our credit cards totaled $4,686 million, $3,455 million and $3,328 million in
2011, 2010 and 2009, respectively.

35

 
In October 2010, guests began to receive a 5 percent discount on virtually all purchases at checkout every day
when they use a REDcard at any Target store or on Target.com. The discounts associated with loyalty programs are
included  as  reductions  in  sales  in  our  Consolidated  Statements  of  Operations  and  were  $340  million  in  2011,
$162 million in 2010 and $94 million in 2009.

3. Cost of Sales and Selling, General and Administrative Expenses

The following table illustrates the primary costs classified in each major expense category:

Cost of Sales
Total cost of products sold including
(cid:129) Freight expenses associated with moving

merchandise from our vendors to our distribution
centers and our retail stores, and among our
distribution and retail facilities

(cid:129) Vendor income that is not reimbursement of
specific, incremental and identifiable costs

Inventory shrink
Markdowns
Outbound shipping and handling expenses

associated with sales to our guests

Payment term cash discounts
Distribution center costs, including compensation

and benefits costs

Selling, General and Administrative Expenses
Compensation and benefit costs including
(cid:129) Stores
(cid:129) Headquarters
Occupancy and operating costs of retail and

headquarters facilities

Advertising, offset by vendor income that is a
reimbursement of specific, incremental and
identifiable costs

Pre-opening costs of stores and other facilities
Other administrative costs

Note: The classification of these expenses varies across the retail industry.

4. Consideration Received from Vendors

We receive consideration for a variety of vendor-sponsored programs, such as volume rebates, markdown
allowances,  promotions  and  advertising  allowances  and  for  our  compliance  programs,  referred  to  as  ‘‘vendor
income.’’ Vendor income reduces either our inventory costs or SG&A expenses based on the provisions of the
arrangement. Promotional and advertising allowances are intended to offset our costs of promoting and selling
merchandise in our stores. Under our compliance programs, vendors are charged for merchandise shipments that
do not meet our requirements (violations), such as late or incomplete shipments. These allowances are recorded
when violations occur. Substantially all consideration received is recorded as a reduction of cost of sales.

We establish a receivable for vendor income that is earned but not yet received. Based on provisions of the
agreements in place, this receivable is computed by estimating the amount earned when we have completed our
performance. We perform detailed analyses to determine the appropriate level of the receivable in the aggregate.
The majority of year-end receivables associated with these activities are collected within the following fiscal quarter.
We have not historically had significant write-offs for these receivables.

5. Advertising Costs

Advertising costs are expensed at first showing or distribution of the advertisement and were $1,360 million in
2011,  $1,292  million  in  2010  and  $1,167  million  in  2009.  Vendor  income  that  offset  advertising  expenses  was
$256 million, $216 million and $179 million in 2011, 2010 and 2009, respectively. Newspaper circulars, internet
advertisements and media broadcast made up the majority of our advertising costs in all three years.

36

6. Earnings per Share

Basic  earnings  per  share  (EPS)  is  calculated  as  net  earnings  divided  by  the  weighted  average  number  of
common shares outstanding during the period. Diluted EPS includes the potentially dilutive impact of share-based
awards outstanding at period end, consisting of the incremental shares assumed to be issued upon the exercise of
stock options and the incremental shares assumed to be issued under performance share and restricted stock unit
arrangements.

Earnings Per Share
(millions, except per share data)
Net earnings
Basic weighted average common shares outstanding
Dilutive impact of share-based awards (a)
Diluted weighted average common shares outstanding
Basic earnings per share
Diluted earnings per share

2011
$2,929
679.1
4.8
683.9
$ 4.31
$ 4.28

2010
$2,920
723.6
5.8
729.4
$ 4.03
$ 4.00

2009
$2,488
752.0
2.8
754.8
$ 3.31
$ 3.30

(a) Excludes 15.5 million, 10.9 million and 22.9 million share-based awards for 2011, 2010 and 2009, respectively, because their effects were

antidilutive.

7. Canadian Leasehold Acquisition

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In January 2011, we entered into an agreement to purchase the leasehold interests in up to 220 sites in Canada
operated  by  Zellers,  in  exchange  for  $1,861  million.  We  have  completed  this  real  estate  acquisition  with  the
selection of 189 Zellers sites. We believe this transaction will allow us to open 125 to 135 Target stores in Canada,
primarily during 2013. We sold our right to acquire the leasehold interests in 54 sites to third-party retailers and
landlords, for a total of $225 million. These transactions resulted in a final net purchase price of $1,636 million,
which is included in expenditures for property and equipment in the Consolidated Statement of Cash Flows.

At the time of acquisition, we recorded the assets in our Canadian Segment at their estimated fair values.

Leasehold Acquisition Summary
(millions)
Assets

Capital lease assets
Intangible assets (a)

Total assets

Liabilities

Capital lease obligations

Balance Sheet Classification

Buildings and improvements
Other noncurrent assets

Total

$2,887
23
2,910

Unsecured debt and other borrowings

$1,274

(a) Amortization period of acquired intangible assets range from 3 to 13 years.

The acquired sites are being subleased back to Zellers for terms through March 2013, or earlier, at our option.

8. Fair Value Measurements

Fair value measurements are categorized into one of three levels based on the lowest level of significant input
used:  Level  1  (unadjusted  quoted  prices  in  active  markets);  Level  2  (observable  market  inputs  available  at  the

37

 
measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be
corroborated by observable market data).

Fair Value Measurements – Recurring Basis
(millions)
Assets
Cash and cash equivalents
Short-term investments

Other current assets

Interest rate swaps (a)
Prepaid forward contracts

Other noncurrent assets
Interest rate swaps (a)
Company-owned life insurance

investments (b)

Total
Liabilities
Other current liabilities

Interest rate swaps (a)
Other noncurrent liabilities
Interest rate swaps (a)
Total

Fair Value at January 28, 2012

Fair Value at January 29, 2011

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

$ 194

$ —

$—

$1,129

$ —

$—

—
69

—

—
$ 263

$ —

—
$ —

20
—

114

371
$505

$ 7

69
$ 76

—
—

—

—
$—

$—

—
$—

—
63

—

—
$1,192

$ —

—
$ —

—
—

139

358
$497

$ —

54
$ 54

—
—

—

—
$—

$—

—
$—

(a) There was one interest rate swap designated as an accounting hedge at January 28, 2012, and none at January 29, 2011. See Note 20 for

additional information on interest rate swaps.

(b) Company-owned life insurance investments consist of equity index funds and fixed income assets. Amounts are presented net of loans

that are secured by some of these policies of $669 million at January 28, 2012, and $645 million at January 29, 2011.

Position
Short-term

investments

Cash equivalents approximate fair value because maturities are less than three months.

Valuation Technique

Prepaid forward

contracts

Initially valued at transaction price. Subsequently valued by reference to the market price of
Target common stock.

Interest rate swaps

Company-owned life

insurance
investments

Valuation models are calibrated to initial trade price. Subsequent valuations are based on
observable inputs to the valuation model (e.g., interest rates and credit spreads). Model inputs
are changed only when corroborated by market data. A credit risk adjustment is made on
each swap using observable market credit spreads.

Includes investments in separate accounts that are valued based on market rates credited by
the insurer.

Certain assets are measured at fair value on a nonrecurring basis; that is, the assets are not measured at fair
value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example,
when there is evidence of impairment). The fair value measurements related to long-lived assets in the following
table were determined using available market prices at the measurement date based on recent investments or

38

pending  transactions  of  similar  assets,  third-party  independent  appraisals,  valuation  multiples  or  public
comparables, less cost to sell where appropriate. We classify these measurements as Level 2.

Fair Value Measurements – Nonrecurring Basis

(millions)

Measured during the year ended January 28, 2012:

Carrying amount
Fair value measurement

Gain/(loss)

Measured during the year ended January 29, 2011:

Carrying amount
Fair value measurement

Gain/(loss)

Other current assets

Long-lived assets held for sale

Property and equipment
Long-lived assets held and used (a)

$ 12
11

$ (1)

$ 9
7

$ (2)

$126
89

$ (37)

$127
101

$ (26)

(a) Primarily relates to real estate and buildings intended for sale in the future but not currently meeting the held for sale criteria.

The  following  table  presents  the  carrying  amounts  and  estimated  fair  values  of  financial  instruments  not
measured at fair value in the Consolidated Statements of Financial Position. The fair value of marketable securities
is determined using available market prices at the reporting date. The fair value of debt is generally measured using
a discounted cash flow analysis based on current market interest rates for similar types of financial instruments.

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Financial Instruments Not Measured at Fair Value

(millions)
Financial assets
Other current assets

Marketable securities (a)

Other non current assets

Marketable securities (a)
Total

Financial liabilities
Total debt (b)

Total

January 28, 2012
Carrying
Amount

January 29, 2011
Fair
Value

Fair Carrying
Amount

Value

$

$

35

$

6
41

$

35

6
41

$

$

32

$

4
36

$

32

4
36

$15,680
$15,680

$18,142
$18,142

$15,241
$15,241

$16,661
$16,661

(a) Held-to-maturity investments that are held to satisfy the regulatory requirements of Target Bank and Target National Bank.
(b) Represents the sum of nonrecourse debt collateralized by credit card receivables and unsecured debt and other borrowings excluding

unamortized swap valuation adjustments and capital lease obligations.

Based  on  various  inputs  and  assumptions,  including  discussions  with  third  parties  in  the  context  of  our
intended sale, we believe the gross balance of our credit card receivables approximates fair value at January 28,
2012. The carrying amounts of accounts payable and certain accrued and other current liabilities approximate fair
value at January 28, 2012.

9. Cash Equivalents

Cash equivalents include highly liquid investments with an original maturity of three months or less from the
time of purchase. These investments were $194 million and $1,129 million at January 28, 2012, and January 29,
2011, respectively. Cash equivalents also include amounts due from third-party financial institutions for credit and
debit card transactions. These receivables typically settle in less than five days and were $330 million at January 28,
2012, and $313 million at January 29, 2011. Payables due to Visa resulting from the use of Target Visa Cards are
included within cash equivalents and were $35 million and $36 million at January 28, 2012, and January 29, 2011,
respectively.

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10. Credit Card Receivables

Credit card receivables are recorded net of an allowance for doubtful accounts and are our only significant
class of financing receivables. Substantially all past-due accounts accrue finance charges until they are written off.
Accounts are written off when they become 180 days past due.

Age of Credit Card Receivables

(millions)
Current
1-29 days past due
30-59 days past due
60-89 days past due
90+ days past due
Period-end gross credit card receivables

Allowance for Doubtful Accounts

January 28, 2012

January 29, 2011

Percent of
Amount Receivables
91.1%
4.1
1.5
1.0
2.3
100%

$5,791
260
97
62
147
$6,357

Amount
$6,132
292
131
79
209
$6,843

Percent of
Receivables
89.6%
4.3
1.9
1.1
3.1
100%

The allowance for doubtful accounts is recognized in an amount equal to the anticipated future write-offs of
existing receivables and includes provisions for uncollectible finance charges and other credit-related fees. We
estimate  future  write-offs  on  the  entire  credit  card  portfolio  collectively  based  on  historical  experience  of
delinquencies, risk scores, aging trends and industry risk trends.

Allowance for Doubtful Accounts
(millions)
Allowance at beginning of period
Bad debt expense
Write-offs (a)
Recoveries (a)
Allowance at end of period
(a) Write-offs include the principal amount of losses (excluding accrued and unpaid finance charges), and recoveries include current period

2010
$ 1,016
528
(1,007)
153
690

2009
$ 1,010
1,185
(1,287)
108
$ 1,016

2011
$ 690
154
(572)
158
$ 430

$

principal collections on previously written-off balances. These amounts combined represent net write-offs.

Deterioration of the macroeconomic conditions in the United States could adversely affect the risk profile of our
credit card receivables portfolio based on credit card holders’ ability to pay their balances. If such deterioration
were  to  occur,  it  could  lead  to  an  increase  in  bad  debt  expense.  We  monitor  both  the  credit  quality  and  the
delinquency status of the credit card receivables portfolio. We consider accounts 30 or more days past due as
delinquent, and we update delinquency status daily. We also monitor risk in the portfolio by assigning internally
generated scores to each account and by obtaining current FICO scores, a nationally recognized credit scoring
model, for a statistically representative sample of accounts each month. The credit-quality segmentation presented
below is consistent with the approach used in determining our allowance for doubtful accounts.

Receivables Credit Quality
(millions)
Nondelinquent accounts (Current and 1-29 days past due)

FICO score of 700 or above
FICO score of 600 to 699
FICO score below 600

Total nondelinquent accounts
Delinquent accounts (30+ days past due)
Period-end gross credit card receivables

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January 28,
2012

January 29,
2011

$2,882
2,463
706
6,051
306
$6,357

$2,819
2,737
868
6,424
419
$6,843

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Under  certain  circumstances,  we  offer  cardholder  payment  plans  that  meet  the  accounting  definition  of  a
troubled  debt  restructuring  (TDR).  These  plans  modify  finance  charges,  minimum  payments  and/or  extend
payment  terms.  Modified  terms  do  not  change  the  balance  of  the  loan.  These  concessions  are  made  on  an
individual cardholder basis for economic or legal reasons specific to each individual cardholder’s circumstances.
Cardholders are not allowed additional charges while participating in a payment plan. As of January 28, 2012, and
January 29, 2011, there were 118 thousand and 151 thousand modified contracts with outstanding receivables of
$276 million and $400 million, respectively.

Troubled Debt Restructurings
(millions)
Average receivables
Finance charges

2011
$330
20

2010
$445
30

2009
$526
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Troubled Debt Restructurings Defaulted During the Period (a)
(dollars in millions, contracts in thousands)
Number of contracts
Amount defaulted (b)
(a)
(b) Represents account balance at the time of default. We define default as not paying the full fixed payment amount for two consecutive

Includes loans modified within the twelve months prior to each respective period end.

2011
13
$ 37

2010
28
$ 96

2009
59
$199

billing cycles.

Receivables in cardholder payment plans that meet the definition of a TDR are treated consistently with other
receivables in determining our allowance for doubtful accounts. Accounts that complete their assigned payment
plan are no longer considered TDRs. Payments received on troubled debt restructurings are first applied to finance
charges and fees, then to the unpaid principal balance.

Funding for Credit Card Receivables

As  a  method  of  providing  funding  for  our  credit  card  receivables,  we  sell,  on  an  ongoing  basis,  all  of  our
consumer  credit  card  receivables  to  Target  Receivables  LLC  (TR  LLC),  formerly  known  as  Target  Receivables
Corporation (TRC), a wholly owned, bankruptcy remote subsidiary. TR LLC then transfers the receivables to the
Target Credit Card Master Trust (the Trust), which from time to time will sell debt securities to third parties, either
directly or through a related trust. These debt securities represent undivided interests in the Trust assets. TR LLC
uses  the  proceeds  from  the  sale  of  debt  securities  and  its  share  of  collections  on  the  receivables  to  pay  the
purchase price of the receivables to the Corporation.

We consolidate the receivables within the Trust and any debt securities issued by the Trust, or a related trust, in
our Consolidated Statements of Financial Position. The receivables transferred to the Trust are not available to
general creditors of the Corporation.

During  2006  and  2007,  we  sold  an  interest  in  our  credit  card  receivables  by  issuing  a  Variable  Funding
Certificate. Parties who hold the Variable Funding Certificate receive interest at a variable short-term market rate.
The Variable Funding Certificate matures in 2012 and 2013.

In the second quarter of 2008, we sold a 47 percent interest in our credit card receivables to JPMorgan Chase
(JPMC). Under the terms of this arrangement, TR LLC repaid JPMC $226 million and $566 million during 2011 and
2010, respectively. In addition, we repaid the remaining principal balance on the note payable to JPMC in January
2012, including a make-whole premium, for $2,854 million, resulting in an $87 million loss on early retirement of
debt, which was recorded within interest expense and excluded from segment profit.

All  interests  in  our  Credit  Card  Receivables  issued  by  the  Trust  are  accounted  for  as  secured  borrowings.
Interest and principal payments are satisfied provided the cash flows from the Trust assets are sufficient and are
nonrecourse  to  the  general  assets  of  the  Corporation.  If  the  cash  flows  are  less  than  the  periodic  interest,  the
available amount, if any, is paid with respect to interest. Interest shortfalls will be paid to the extent subsequent cash

41

 
flows from the assets in the Trust are sufficient. Future principal payments will be made from the third party’s pro
rata share of cash flows from the Trust assets.

Securitized Borrowings
(millions)
2008 Series (a)
2006/2007 Series
Total
(a) The debt balance for the 2008 Series is net of a 7% discount from JPMC. The unamortized portion of this discount was $107 million as of

January 28, 2012
Debt Balance Collateral
$ —
1,266
$1,266

Debt Balance
$2,954
1,000
$3,954

Collateral
$3,061
1,266
$4,327

$ —
1,000
$1,000

January 29, 2011

January 29, 2011.

11. Inventory

Substantially all inventory and the related cost of sales are accounted for under the retail inventory accounting
method (RIM) using the last-in, first-out (LIFO) method. Inventory is stated at the lower of LIFO cost or market. Cost
includes purchase price as reduced by vendor income. Inventory is also reduced for estimated losses related to
shrink and markdowns. The LIFO provision is calculated based on inventory levels, markup rates and internally
measured retail price indices.

Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to
the retail value inventory. RIM is an averaging method that has been widely used in the retail industry due to its
practicality. The use of RIM will result in inventory being valued at the lower of cost or market because permanent
markdowns are currently taken as a reduction of the retail value of inventory.

We routinely enter into arrangements with vendors whereby we do not purchase or pay for merchandise until
the merchandise is ultimately sold to a guest. Activity under this program is included in sales and cost of sales in the
Consolidated  Statements  of  Operations,  but  the  merchandise  received  under  the  program  is  not  included  in
inventory in our Consolidated Statements of Financial Position because of the virtually simultaneous purchase and
sale of this inventory. Sales made under these arrangements totaled $1,630 million in 2011, $1,581 million in 2010
and $1,470 million in 2009.

12. Other Current Assets

Other Current Assets
(millions)
Vendor income receivable
Other receivables (a)
Deferred taxes
Other
Total
(a)

January 29,
2011
$ 517
405
379
451
$1,752
Includes pharmacy receivables and income taxes receivable. We have not historically had significant write-offs for these receivables.

January 28,
2012
$ 589
411
275
535
$1,810

13. Property and Equipment

Property  and  equipment  is  depreciated  using  the  straight-line  method  over  estimated  useful  lives  or  lease
terms if shorter. We amortize leasehold improvements purchased after the beginning of the initial lease term over
the shorter of the assets’ useful lives or a term that includes the original lease term, plus any renewals that are
reasonably assured at the date the leasehold improvements are acquired. Depreciation expense for 2011, 2010
and 2009 was $2,107 million, $2,060 million and $1,999 million, respectively. For income tax purposes, accelerated
depreciation  methods  are  generally  used.  Repair  and  maintenance  costs  are  expensed  as  incurred  and  were

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$666 million in 2011, $726 million in 2010 and $632 million in 2009. Facility pre-opening costs, including supplies
and payroll, are expensed as incurred.

Estimated Useful Lives
Buildings and improvements
Fixtures and equipment
Computer hardware and software

Life (in years)
8-39
3-15
4-7

Long-lived  assets  are  reviewed  for  impairment  when  events  or  changes  in  circumstances  indicate  that  the
asset’s  carrying  value  may  not  be  recoverable.  Impairments  of  $38  million  in  2011,  $28  million  in  2010  and
$49 million in 2009 were recorded as a result of the reviews performed. Additionally, due to project scope changes,
we wrote off capitalized construction-in-progress costs of $5 million in 2011, $6 million in 2010 and $37 million in
2009.

14. Other Noncurrent Assets

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Other Noncurrent Assets
(millions)
Company-owned life insurance investments (a)
Goodwill and intangible assets
Interest rate swaps (b)
Other
Total
(a) Company-owned life insurance policies on approximately 4,000 team members who have been designated highly compensated under
the Internal Revenue Code and have given their consent to be insured. Amounts are presented net of loans that are secured by some of
these policies.

January 28,
2012
$ 371
242
114
305
$1,032

January 29,
2011
$ 358
223
139
279
$ 999

(b) See Notes 8 and 20 for additional information relating to our interest rate swaps.

15. Goodwill and Intangible Assets

Goodwill totaled $59 million at January 28, 2012 and January 29, 2011. No material impairments were recorded

in 2011, 2010 or 2009, as a result of the goodwill impairment tests performed.

Intangible Assets

Leasehold Acquisition
Costs

Other (a)

Total

(millions)
Gross asset
Accumulated amortization
Net intangible assets
(a) Other intangible assets relate primarily to acquired customer lists and trademarks.

January 28,
2012
$146
(87)
$ 59

January 28,
2012
$ 243
(119)
$ 124

January 29,
2011
$ 227
(111)
$ 116

January 29,
2011
$121
(73)
$ 48

January 28,
2012
$ 389
(206)
$ 183

January 29,
2011
$ 348
(184)
$ 164

We use the straight-line method to amortize leasehold acquisition costs over 9 to 39 years and other definite-
lived intangibles over 3 to 15 years. The weighted average life of leasehold acquisition costs and other intangible
assets was 28 years and 5 years, respectively, at January 28, 2012. Amortization expense for 2011, 2010 and 2009
was $24 million, each year.

Estimated Amortization Expense
(millions)
Amortization expense

2012
$22

2013
$19

2014
$16

2015
$16

2016
$15

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16. Accounts Payable

At January 28, 2012 and January 29, 2011, we reclassified book overdrafts of $575 million and $558 million,

respectively, to accounts payable.

17. Accrued and Other Current Liabilities

Accrued and Other Current Liabilities
(millions)
Wages and benefits
Real estate, sales and other taxes payable
Gift card liability (a)
Income tax payable
Straight-line rent accrual (b)
Dividends payable
Workers’ compensation and general liability (c)
Interest payable
Other
Total
(a) Gift card liability represents the amount of unredeemed gift cards, net of estimated breakage.
(b) Straight-line  rent  accrual  represents  the  amount  of  rent  expense  recorded  that  exceeds  cash  payments  remitted  in  connection  with

January 28,
2012
$ 898
547
467
257
215
202
164
109
785
$3,644

January 29,
2011
$ 921
497
422
144
200
176
158
103
705
$3,326

operating leases.

(c) See footnote (a) to the Other Noncurrent Liabilities table on page 50 for additional detail.

18. Commitments and Contingencies

Purchase  obligations,  which  include  all  legally  binding  contracts,  such  as  firm  commitments  for  inventory
purchases, merchandise royalties, equipment purchases, marketing-related contracts, software acquisition/license
commitments and service contracts, were $1,396 million and $1,907 million at January 28, 2012 and January 29,
2011,  respectively.  We  issue  inventory  purchase  orders,  which  represent  authorizations  to  purchase  that  are
cancelable by their terms. We do not consider purchase orders to be firm inventory commitments. If we choose to
cancel a purchase order, we may be obligated to reimburse the vendor for unrecoverable outlays incurred prior to
cancellation. We also issue trade letters of credit in the ordinary course of business, which are not obligations given
they are conditioned on terms of the letter of credit being met.

Trade letters of credit totaled $1,516 million and $1,522 million at January 28, 2012 and January 29, 2011,
respectively, a portion of which are reflected in accounts payable. Standby letters of credit, relating primarily to
retained risk on our insurance claims, totaled $66 million and $71 million at January 28, 2012 and January 29, 2011,
respectively.

We are exposed to claims and litigation arising in 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. We believe the recorded reserves in our consolidated financial statements are adequate in light of the
probable and estimable liabilities. We do not believe that any of the currently identified claims or litigation will be
material to our results of operations, cash flows or financial condition.

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19. Notes Payable and Long-Term Debt

At January 28, 2012, the carrying value and maturities of our debt portfolio were as follows:

Debt Maturities
(millions)

Due fiscal 2012-2016
Due fiscal 2017-2021
Due fiscal 2022-2026
Due fiscal 2027-2031
Due fiscal 2032-2036
Due fiscal 2037

Total notes and debentures
Swap valuation adjustments
Capital lease obligations
Less:

Amounts due within one year

Long-term debt
(a) Reflects the weighted-average stated interest rate as of year-end.

January 28, 2012

Rate (a)

2.8%
4.8
8.7
6.8
6.3
6.8
4.6

Balance
$ 6,281
4,604
64
680
551
3,500
15,680
114
1,689

(3,786)
$13,697

Required principal payments on notes and debentures over the next five years are as follows:

Required Principal Payments
(millions)
Unsecured
Nonrecourse
Total required principal payments

2012
$3,001
750
$3,751

2013
$501
250
$751

2014
$1,001
—
$1,001

2015
$27
—
$27

2016
$751
—
$751

We periodically obtain short-term financing under our commercial paper program, a form of notes payable.

Commercial Paper
(millions)
Maximum daily amount outstanding during the year
Average amount outstanding during the year
Amount outstanding at year-end
Weighted average interest rate

2011
$1,211
244
—
0.11%

2010
$—
—
—
—

In October 2011, we entered into a five-year $2.25 billion revolving credit facility with a group of banks. The new
facility replaced our existing credit agreement and will expire in October 2016. No balances were outstanding at any
time during 2011 or 2010 under this or the prior revolving credit facility.

In January 2012, we issued $1 billion of fixed rate debt at 2.9% that matures in January 2022 and $1.5 billion of
floating rate debt at three-month LIBOR plus 3 basis points that matures in January 2013. In July 2011, we issued
$350 million of fixed rate debt at 1.125% and $650 million of floating rate debt at three-month LIBOR plus 17 basis
points, both of which mature in July 2014. In July 2010, we issued $1 billion of fixed rate debt at 3.875% that matures
in July 2020.

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As further explained in Note 10, we maintain an accounts receivable financing program through which we sell
credit card receivables to a bankruptcy remote, wholly owned subsidiary, which in turn transfers the receivables to a
Trust. The Trust, either directly or through related trusts, sells debt securities to third parties.

Nonrecourse Debt Collateralized by Credit Card Receivables
(millions)
Balance at beginning of period

Issued
Accretion (a)
Repaid (b)

2011
$ 3,954
—
41
(2,995)
$ 1,000

2010
$ 5,375
—
45
(1,466)
$ 3,954

Balance at end of period
(a) Represents the accretion of the 7 percent discount on the 47 percent interest in credit card receivables sold to JPMC.
(b)

Includes repayments of $226 million and $566 million for the 2008 series of secured borrowings during 2011 and 2010 due to declines in
gross credit card receivables and payment of $2,769 million, excluding the make-whole premium, to repurchase and retire in full this
series of secured borrowings.

Other than debt backed by our credit card receivables, substantially all of our outstanding borrowings are
senior, unsecured obligations. Most of our long-term debt obligations contain covenants related to secured debt
levels. In addition to a secured debt level covenant, our credit facility also contains a debt leverage covenant. We
are, and expect to remain, in compliance with these covenants, which have no practical effect on our ability to pay
dividends.

20. Derivative Financial Instruments

Historically  our  derivative  instruments  have  primarily  consisted  of  interest  rate  swaps,  which  are  used  to
mitigate our interest rate risk. We have counterparty credit risk resulting from our derivative instruments, primarily
with  large  global  financial  institutions.  We  monitor  this  concentration  of  counterparty  credit  risk  on  an  ongoing
basis. See Note 8 for a description of the fair value measurement of our derivative instruments.

In July 2011, in conjunction with our $350 million fixed rate debt issuance, we entered into an interest rate swap
with a matching notional amount, under which we pay a variable rate and receive a fixed rate. This swap has been
designated as a fair value hedge for accounting purposes. At the inception of the hedge, we assessed whether the
swap was highly effective in offsetting changes in fair value of the hedged item and concluded the hedge was
perfectly  effective.  Therefore,  no  ineffectiveness  was  recorded  in  2011.  We  had  no  derivative  instruments
designated as accounting hedges in 2010 or 2009.

Outstanding Interest Rate Swap Summary

January 28, 2012

Designated Swap
Pay Floating

De-designated Swaps

Pay Floating

Pay Fixed

three-month LIBOR
1.0%
2.5 years
$350

one-month LIBOR

2.6%
5.0% one-month LIBOR
2.4 years
$1,250

2.4 years
$1,250

(dollars in millions)
Weighted average rate:

Pay
Receive

Weighted average maturity
Notional

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Derivative Contracts – Type, Statement of Financial Position Classification and Fair Value
(millions)

Type of Contract
Designated as hedging instrument:

Interest rate swap

Not designated as hedging

instruments:
Interest rate swaps

Interest rate swaps

Asset

Liability

Classification

Jan. 28,
2012

Jan. 29,
2011

Classification

Jan. 28,
2012

Jan. 29,
2011

Other noncurrent
assets

$ 3

$ —

N/A

$ —

$ —

Other current
assets
Other noncurrent
assets

20

111

—

Other current
liabilities
139 Other noncurrent
liabilities

7

69

—

54

Total

$134

$139

$ 76

$ 54

Periodic payments, valuation adjustments and amortization of gains or losses on our derivative contracts had

the following impact on our Consolidated Statement of Operations:

Derivative Contracts – Effect on Results of Operations
(millions)

Type of Contract
Interest rate swaps

Classification of Income/(Expenses)
Other interest expense

2011
$41

2010
$51

2009
$65

The amount remaining on unamortized hedged debt valuation gains from terminated or de-designated interest
rate swaps that will be amortized into earnings over the remaining lives of the underlying debt totaled $111 million,
$152 million and $197 million, at the end of 2011, 2010 and 2009, respectively.

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21. Leases

We lease certain retail locations, warehouses, distribution centers, office space, land, equipment and software.
Assets held under capital leases are included in property and equipment. Operating lease rentals are expensed on
a straight-line basis over the life of the lease beginning on the date we take possession of the property. At lease
inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably
assured.  The  exercise  of  lease  renewal  options  is  at  our  sole  discretion.  The  expected  lease  term  is  used  to
determine whether a lease is capital or operating and is used to calculate straight-line rent expense. Additionally,
the depreciable life of leased buildings and leasehold improvements is limited by the expected lease term.

Rent expense is included in SG&A expenses. Some of our lease agreements include rental payments based on
a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for
inflation. Certain leases require us to pay real estate taxes, insurance, maintenance and other operating expenses
associated  with  the  leased  premises.  These  expenses  are  classified  in  SG&A,  consistent  with  similar  costs  for
owned locations. Sublease income received from tenants who rent properties is recorded as a reduction to SG&A
expense.

Rent Expense
(millions)
Property and equipment
Software
Sublease income (a)
Total rent expense
(a) Sublease income in 2011 includes $51 million related to sites acquired in our Canadian leasehold acquisition that are being subleased to

2011
$193
33
(61)
$165

2009
$187
27
(13)
$201

2010
$188
25
(13)
$200

Zellers through March 2013, or earlier, at our option.

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Total  capital  lease  interest  expense  was  $69  million  in  2011  (including  $44  million  of  interest  expense  on
Canadian capitalized leases), $16 million in 2010, and $10 million in 2009  and is included within  other interest
expense on the Consolidated Statements of Operations.

Most long-term leases include one or more options to renew, with renewal terms that can extend the lease term
from one to 50 years. Certain leases also include options to purchase the leased property. Assets recorded under
capital leases as of January 28, 2012 and January 29, 2011 were $1,752 million and $380 million, respectively.

$

Operating Leases (a) Capital Leases (b) Sublease Income

Future Minimum Lease Payments
(millions)
2012
2013
2014
2015
2016
After 2016
Total future minimum lease payments
Less: Interest (c)
Present value of future minimum capital lease payments (d)
(a) Total contractual lease payments include $1,910 million related to options to extend lease terms that are reasonably assured of being
exercised and also includes $171 million of legally binding minimum lease payments for stores that are expected to open in 2012 or later.
(b) Capital lease payments include $2,894 million related to options to extend lease terms that are reasonably assured of being exercised.
(c) Calculated using the interest rate at inception for each lease.
(d)

Total
$ (84) $ 232
303
274
267
260
(71) 6,710
$ (182) $8,046

122
118
123
121
120
3,736
$ 4,340
(2,651)
$ 1,689

$ 194
197
157
151
144
3,045
$3,888

Includes the current portion of $22 million.

(12)
(6)
(5)
(4)

The  acquisition  of  leasehold  interests  in  Canada  contributed  additional  discounted  future  minimum  capital

lease payments of $1.3 billion, reflected in the table above.

22. Income Taxes

Tax Rate Reconciliation
Federal statutory rate
State income taxes, net of the federal tax benefit
International
Other
Effective tax rate

2011
35.0%
1.0
(0.7)
(1.0)
34.3%

2010
35.0%
1.4
(0.6)
(0.7)
35.1%

2009
35.0%
2.8
(0.3)
(1.8)
35.7%

Certain discrete state income tax items reduced our effective tax rate by 2.0 percentage points, 2.4 percentage

points and 0.7 percentage points in 2011, 2010 and 2009, respectively.

Provision for Income Taxes
(millions)
Current:

Federal
State
International

Total current
Deferred:
Federal
State
International
Total deferred
Total provision

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2011

2010

2009

$1,069
74
13
1,156

427
—
(56)
371
$1,527

$1,086
40
4
1,130

388
57
—
445
$1,575

$ 877
141
2
1,020

339
25
—
364
$1,384

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Net Deferred Tax Asset/(Liability)
(millions)
Gross deferred tax assets:

Accrued and deferred compensation
Allowance for doubtful accounts
Accruals and reserves not currently deductible
Self-insured benefits
Foreign operating loss carryforward
Other

Total gross deferred tax assets
Gross deferred tax liabilities:
Property and equipment
Deferred credit card income
Inventory
Other

Total gross deferred tax liabilities
Total net deferred tax liability

January 28,
2012

January 29,
2011

$

489
157
347
257
43
149
1,442

(1,930)
(102)
(162)
(109)
(2,303)
$ (861)

$

451
229
373
251
—
67
1,371

(1,607)
(145)
(77)
(97)
(1,926)
$ (555)

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary
differences between financial statement carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year the
temporary differences are expected to be recovered or settled. Tax rate changes affecting deferred tax assets and
liabilities are recognized in income at the enactment date.

At  January  28,  2012,  foreign  net  operating  loss  carryforwards  of  $166  million  are  available  to  offset  future

income. These carryforwards expire in 2031 and are expected to be fully utilized prior to expiration.

We have not recorded deferred taxes when earnings from foreign operations are considered to be indefinitely
invested outside the U.S. These accumulated net earnings relate to ongoing operations and were $300 million at
January 28, 2012 and $333 million at January 29, 2011. It is not practicable to determine the income tax liability that
would be payable if such earnings were not indefinitely reinvested.

We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. We
are no longer subject to U.S. federal income tax examinations for years before 2010 and, with few exceptions, are
no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before 2003.

Reconciliation of Liability for Unrecognized Tax Benefits
(millions)
Balance at beginning of period
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Settlements
Balance at end of period

2011
$ 302
12
31
(101)
(8)
$ 236

2010
$ 452
16
68
(222)
(12)
$ 302

2009
$434
119
47
(61)
(87)
$452

If we were to prevail on all unrecognized tax benefits recorded, $155 million of the $236 million reserve would
benefit  the  effective  tax  rate.  In  addition,  the  reversal  of  accrued  penalties  and  interest  would  also  benefit  the
effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax
expense. During the years ended January 28, 2012, January 29, 2011 and January 30, 2010, we recorded a benefit
from the reversal of accrued penalties and interest of $12 million, $28 million and $10 million, respectively. We had
accrued for the payment of interest and penalties of $82 million at January 28, 2012, $95 million at January 29, 2011
and $127 million at January 30, 2010.

It  is  reasonably  possible  that  the  amount  of  the  unrecognized  tax  benefits  with  respect  to  our  other
unrecognized tax positions will increase or decrease during the next twelve months; however, an estimate of the
amount or range of the change cannot be made at this time.

49

 
The January 30, 2010 liability for uncertain tax positions included $133 million for tax positions for which the
ultimate deductibility was highly certain, but for which there was uncertainty about the timing of such deductibility.
During 2010, we filed a tax accounting method change that resolved the uncertainty surrounding the timing of
deductions for these tax positions, resulting in a $133 million decrease to our liability for unrecognized tax benefits
and no impact on income tax expense in 2010.

23. Other Noncurrent Liabilities

Other Noncurrent Liabilities
(millions)
Workers’ compensation and general liability (a)
Deferred compensation
Income tax
Pension and postretirement health care benefits
Other
Total
(a) We retain a substantial portion of the risk related to certain general liability and workers’ compensation claims. Liabilities associated with
these losses include estimates of both claims filed and losses incurred but not yet reported. We estimate our ultimate cost based on
analysis of historical data and actuarial estimates. General liability and workers’ compensation liabilities are recorded at our estimate of
their net present value.

January 28,
2012
$ 482
421
224
225
282
$1,634

January 29,
2011
$ 470
396
313
128
300
$1,607

24. Share Repurchase

We repurchase shares primarily through open market transactions under a $10 billion share repurchase plan
authorized by our Board of Directors in November 2007. As of January 28, 2012, we have $279 million remaining
capacity on this authorization. In January 2012, our Board of Directors authorized a new $5 billion share repurchase
plan.  We  expect  to  begin  repurchasing  shares  under  this  new  authorization  upon  completion  of  the  current
program.

Share Repurchases
(millions, except per share data)
Total number of shares purchased
Average price paid per share
Total investment

2011
37.2
$50.89
$1,894

2010
47.8
$52.44
$2,508

2009
9.9
$48.54
$ 479

Of the shares reacquired, a portion was delivered upon settlement of prepaid forward contracts as follows:

Settlement of Prepaid Forward Contracts (a)
(millions)
Total number of shares purchased
Total cash investment
Aggregate market value (b)
(a) These  contracts  are  among  the  investment  vehicles  used  to  reduce  our  economic  exposure  related  to  our  nonqualified  deferred

2011
1.0
$52
$52

2010
1.1
$56
$61

2009
1.5
$56
$60

compensation plans. The details of our positions in prepaid forward contracts have been provided in Note 26.

(b) At their respective settlement dates.

50

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25. Share-Based Compensation

We maintain a long-term incentive plan (the Plan) for key team members and non-employee members of our
Board of Directors. Our long-term incentive plan allows us to grant equity-based compensation awards, including
stock options, stock appreciation rights, performance share units, restricted stock units, restricted stock awards or
a combination of awards (collectively, share-based awards). The number of unissued common shares reserved for
future grants under the Plan was 32.5 million at January 28, 2012 and 17.5 million at January 29, 2011.

Total  share-based  compensation  expense  recognized  in  the  Consolidated  Statements  of  Operations  was
$90 million, $109 million and $103 million in 2011, 2010 and 2009, respectively. The related income tax benefit was
$35 million, $43 million and $40 million in 2011, 2010 and 2009, respectively.

Stock Options

We grant nonqualified stock options to certain team members under the Plan that generally vest and become
exercisable annually in equal amounts over a four-year period and expire 10 years after the grant date. We also
grant options with a ten-year term to the non-employee members of our Board of Directors which vest immediately,
but are not exercisable until one year after the grant date.

Stock Option Activity

Stock Options

January 29, 2011
Granted
Expired/forfeited
Exercised/issued
January 28, 2012
In thousands.
(a)
(b) Weighted average per share.
(c) Represents stock price appreciation subsequent to the grant date, in millions.

Number of
Options (a)
34,650
7,485
(1,690)
(2,291)
38,154

Exercise
Price (b)
$ 46.87
48.90
49.16
40.38
$47.59

Total Outstanding

Intrinsic
Value (c)
$288

Number of
Options (a)
20,813

Exercisable
Exercise
Price (b)
$ 47.06

Intrinsic
Value (c)
$172

$166

23,283

$47.06

$121

We use a Black-Scholes valuation model to estimate the fair value of the options at grant date based on the
assumptions noted in the following table. Volatility represents an average of market estimates for implied volatility of
Target common stock. The expected life is estimated based on an analysis of options already exercised and any
foreseeable trends or changes in recipients’ behavior. The risk-free interest rate is an interpolation of the relevant
U.S. Treasury security maturities as of each applicable grant date.

Valuation Assumptions

Dividend yield
Volatility
Risk-free interest rate
Expected life in years

Stock options grant date fair value

Stock Option Exercises (millions)
Cash received for exercise price
Intrinsic value
Income tax benefit

2011

2.5%
27%
1.0%
5.5
$9.20

2011
$93
27
11

2010

1.8%
26%
2.1%
5.5
$12.51

2009

1.4%
31%
2.7%
5.5
$14.18

2010
$271
132
52

2009
$62
21
8

Compensation expense associated with stock options is recognized on a straight-line basis over the shorter of
the vesting period or the minimum required service period. At January 28, 2012, there was $109 million of total
unrecognized compensation expense related to nonvested stock options, which is expected to be recognized over

51

 
a weighted average period of 1.4 years. The weighted average remaining life of currently exercisable options is
5.0 years, and the weighted average remaining life of all outstanding options is 6.6 years. The total fair value of
options vested was $75 million, $87 million and $85 million in 2011, 2010 and 2009, respectively.

Performance Share Units

We have issued performance share units to certain team members annually since January 2003. These units
represent shares potentially issuable in the future. Issuance is based upon our performance relative to a retail peer
group over a three-year performance period on two measures: domestic market share change and EPS growth.
The fair value of performance share units is calculated based on the stock price on the date of grant. The weighted
average grant date fair value for performance share units was $48.63 in 2011, $52.62 in 2010 and $27.18 in 2009.

Performance Share Unit Activity

Total Nonvested Units

January 29, 2011
Granted
Forfeited
Vested
January 28, 2012
(a) Assumes attainment of maximum payout rates as set forth in the performance criteria based in thousands of share units. Applying actual

Performance
Share Units (a)
1,984
476
(908)
—
1,552

Grant Date
Price (b)
$42.10
48.63
49.09
—
$39.93

or expected payout rates, the number of outstanding units at January 28, 2012 was 1,128 thousand.

(b) Weighted average per unit.

Compensation expense associated with unvested performance share units is recognized on a straight-line
basis over the shorter of the vesting period or the minimum required service period. The expense recognized each
period is dependent upon our estimate of the number of shares that will ultimately be issued. Future compensation
expense for currently unvested awards could reach a maximum of $19 million assuming payout of all unvested
awards. The unrecognized expense is expected to be recognized over a weighted average period of 0.8 years. The
fair value of performance share units vested and converted was not significant in 2011, 2010 and 2009.

Restricted Stock

We  issue  restricted  stock  units  and  restricted  stock  awards  (collectively  restricted  stock)  to  certain  team
members with three-year cliff vesting from the date of grant. We also regularly issue restricted stock units to our
Board of Directors, which vest quarterly over a one-year period and are settled in shares of Target common stock
upon departure from the Board. Restricted stock units represent shares potentially issuable in the future whereas
restricted stock awards represent shares issued upon grant that are restricted. The fair value for restricted stock
units and restricted stock awards is calculated based on the stock price on the date of grant. The weighted average
grant date fair value for restricted stock was $49.42 in 2011, $55.17 in 2010 and $49.41 in 2009.

Restricted Stock Activity

January 29, 2011
Granted
Forfeited
Vested
January 28, 2012
(a) Represents the number of restricted stock units and restricted stock awards, in thousands.
(b) Weighted average per unit.

Total Nonvested Units
Restricted
Stock (a)
1,138
816
(99)
(245)
1,610

Grant Date
Price (b)
$48.29
49.42
46.03
34.25
$50.76

52

Compensation expense associated with unvested restricted stock is recognized on a straight-line basis over
the shorter of the vesting period or the minimum required service period. The expense recognized each period is
dependent upon our estimate of the number of shares that will ultimately be issued. At January 28, 2012, there was
$44  million  of  total  unrecognized  compensation  expense  related  to  restricted  stock,  which  is  expected  to  be
recognized over a weighted average period of 1.3 years. The fair value of restricted stock vested and converted was
$9 million in 2011, $3 million in 2010 and $12 million in 2009.

26. Defined Contribution Plans

Team members who meet certain eligibility requirements can participate in a defined contribution 401(k) plan
by  investing  up  to  80  percent  of  their  compensation,  as  limited  by  statute  or  regulation.  Generally,  we  match
100  percent  of  each  team  member’s  contribution  up  to  5  percent  of  total  compensation.  Company  match
contributions are made to funds designated by the participant.

In addition, we maintain a nonqualified, unfunded deferred compensation plan for approximately 3,500 current
and retired team members whose participation in our 401(k) plan is limited by statute or regulation. These team
members choose from a menu of crediting rate alternatives that are the same as the investment choices in our
401(k) plan, including Target common stock. We credit an additional 2 percent per year to the accounts of all active
participants, excluding members of our management executive committee, in part to recognize the risks inherent to
their participation in a plan of this nature. We also maintain a nonqualified, unfunded deferred compensation plan
that was frozen during 1996, covering substantially fewer than 100 participants, most of whom are retired. In this
plan, deferred compensation earns returns tied to market levels of interest rates plus an additional 6 percent return,
with a minimum of 12 percent and a maximum of 20 percent, as determined by the plan’s terms.

We  mitigate  some  of  our  risk  of  offering  the  nonqualified  plans  through  investing  in  vehicles,  including
company-owned life insurance and prepaid forward contracts in our own common stock, that offset a substantial
portion of our economic exposure to the returns of these plans. These investment vehicles are general corporate
assets and are marked to market with the related gains and losses recognized in the Consolidated Statements of
Operations in the period they occur.

The total change in fair value for contracts indexed to our own common stock recognized in earnings was
pretax income/(loss) of $(4) million in 2011, $4 million in 2010 and $36 million in 2009. During 2011 and 2010, we
invested $61 million and $41 million, respectively, in such investment instruments, and this activity is included in the
Consolidated Statements of Cash Flows within other investing activities. Adjusting our position in these investment
vehicles  may  involve  repurchasing  shares  of  Target  common  stock  when  settling  the  forward  contracts  as
described in Note 24. The settlement dates of these instruments are regularly renegotiated with the counterparty.

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Prepaid Forward Contracts on Target Common Stock

(millions, except per share data)
January 29, 2011
January 28, 2012

Plan Expenses
(millions)
401(k) Plan:

Matching contributions expense

Nonqualified Deferred Compensation Plans:

Benefits expense (a)
Related investment income (b)

Nonqualified plan net expense
(a)

Number of
Shares
1.2
1.4

Contractual
Price Paid
per Share
$ 44.09
$44.21

Contractual
Fair Value
$63
$69

Total Cash
Investment
$51
$61

2011

$197

$ 38
(10)
$ 28

2010

$190

$ 63
(31)
$ 32

2009

$178

$ 83
(77)
$ 6

Includes market-performance credits on accumulated participant account balances and annual crediting for additional benefits earned
during the year.
Includes investment returns and life-insurance proceeds received from company-owned life insurance policies and other investments
used to economically hedge the cost of these plans.

(b)

53

 
27. Pension and Postretirement Health Care Plans

We  have  qualified  defined  benefit  pension  plans  covering  team  members  who  meet  age  and  service
requirements, including in certain circumstances, date of hire. We also have unfunded nonqualified pension plans
for team members with qualified plan compensation restrictions. Eligibility for, and the level of, these benefits varies
depending  on  team  members’  date  of  hire,  length  of  service  and/or  team  member  compensation.  Upon  early
retirement and prior to Medicare eligibility, team members 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. Effective January 1,
2009, our qualified defined benefit pension plan was closed to new participants, with limited exceptions.

Change in Projected Benefit Obligation

Pension Benefits

(millions)
Benefit obligation at beginning of period
Service cost
Interest cost
Actuarial (gain)/loss
Participant contributions
Benefits paid
Benefit obligation at end of period

Qualified Plans
2011
$2,525
116
135
349
1
(111)
$3,015

2010
$2,227
114
127
160
2
(105)
$2,525

Nonqualified Plans

2011
$ 31
1
2
7
—
(3)
$ 38

2010
$ 33
1
2
(2)
—
(3)
$ 31

Change in Plan Assets

Pension Benefits

(millions)
Fair value of plan assets at beginning of period
Actual return on plan assets
Employer contributions
Participant contributions
Benefits paid
Fair value of plan assets at end of period
Benefit obligation at end of period
Funded/(underfunded) status

Qualified Plans
2011
$2,515
364
152
1
(111)
2,921
3,015
$ (94)

2010
$2,157
308
153
2
(105)
2,515
2,525
$ (10)

Nonqualified Plans

2011
$ —
—
3
—
(3)
—
38
$(38)

2010
$ —
—
3
—
(3)
—
31
$(31)

Postretirement
Health Care Benefits

2011
$ 94
10
4
—
6
(14)
$ 100

2010
$ 87
9
4
3
6
(15)
$ 94

Postretirement
Health Care Benefits

2011
$ —
—
8
6
(14)
—
100
$(100)

2010
$ —
—
9
6
(15)
—
94
$ (94)

Recognition of Funded/(Underfunded) Status
(millions)
Other noncurrent assets
Accrued and other current liabilities
Other noncurrent liabilities
Net amounts recognized

(a)

Includes postretirement health care benefits.

Qualified Plans
2011
$ 3
(1)
(96)
$(94)

2010
$ 5
(1)
(14)
$(10)

Nonqualified Plans (a)
2010
$ —
(11)
(114)
$(125)

2011
$ —
(9)
(129)
$(138)

The following table summarizes the amounts recorded in accumulated other comprehensive income, which

have not yet been recognized as a component of net periodic benefit expense:

Amounts in Accumulated Other Comprehensive Income

(millions)
Net actuarial loss
Prior service credits
Amounts in accumulated other comprehensive income

Pension Plans
2011
$1,027
—
$1,027

2010
$895
(1)
$894

Postretirement
Health Care Plans

2011
$ 44
(41)
$ 3

2010
$ 48
(51)
$ (3)

54

The following table summarizes the changes in accumulated other comprehensive income for the years ended

January 28, 2012 and January 29, 2011, related to our pension and postretirement health care plans:

Change in Accumulated Other Comprehensive Income

(millions)
January 30, 2010
Net actuarial loss
Amortization of net actuarial losses
Amortization of prior service costs and transition
January 29, 2011
Net actuarial loss
Amortization of net actuarial losses
Amortization of prior service costs and transition
January 28, 2012

Pension Benefits
Pretax
$ 895
40
(44)
3
$ 894
198
(67)
2
$1,027

Net of tax
$544
25
(27)
1
$543
120
(41)
1
$623

Postretirement
Health Care Benefits

Pretax
$(12)
3
(4)
10
$ (3)
—
(4)
10
$ 3

Net of tax
$(7)
2
(3)
6
$(2)
—
(2)
6
$ 2

The following table summarizes the amounts in accumulated other comprehensive income expected to be

amortized and recognized as a component of net periodic benefit expense in 2012:

Expected Amortization of Amounts in Accumulated Other Comprehensive Income
(millions)
Net actuarial loss
Prior service credits
Total amortization expense

Pretax
$106
(10)
$ 96

Net of tax
$64
(6)
$58

The following table summarizes our net pension and postretirement health care benefits expense for the years

2011, 2010 and 2009:

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Net Pension and Postretirement Health Care Benefits Expense

(millions)
Service cost of benefits earned during the period
Interest cost on projected benefit obligation
Expected return on assets
Amortization of losses
Amortization of prior service cost
Total

Pension Benefits
2010
$ 115
129
(191)
44
(3)
$ 94

2011
$ 117
137
(206)
67
(2)
$ 113

2009
$ 100
125
(177)
24
(2)
$ 70

Postretirement
Health Care Benefits
2011
2010
$ 10
9
$
4
4
—
—
4
4
(10)
(10)
8
7

2009
7
$
6
—
2
(2)
$ 13

$

$

Prior service cost amortization is determined using the straight-line method over the average remaining service

period of team members expected to receive benefits under the plan.

Defined Benefit Pension Plan Information
(millions)
Accumulated benefit obligation (ABO) for all plans (a)
Projected benefit obligation for pension plans with an ABO in excess of plan assets (b)
Total ABO for pension plans with an ABO in excess of plan assets
(a) The present value of benefits earned to date assuming no future salary growth.
(b) The present value of benefits earned to date by plan participants, including the effect of assumed future salary increases.

2011
$2,872
55
48

2010
$2,395
47
42

55

 
Assumptions

Weighted average assumptions used to determine benefit obligations as of the measurement date were as

follows:

Weighted Average Assumptions

Discount rate
Average assumed rate of compensation increase

Pension Benefits

2011
4.65%
3.50%

2010
5.50%
4.00%

Postretirement
Health Care Benefits
2010
4.35%
n/a

2011
3.60%
n/a

Weighted average assumptions used to determine net periodic benefit expense for each fiscal year were as

follows:

Weighted Average Assumptions

Pension Benefits

Postretirement
Health Care Benefits
2010 (a)

2009 (a)

Discount rate
Expected long-term rate of return on plan assets
Average assumed rate of compensation increase
(a) Due to the remeasurement from the plan amendment in the third quarter of 2009, the discount rate was decreased from 6.50 percent to

4.85%
n/a
n/a

6.50%
n/a
n/a

2011
5.50%
8.00%
4.00%

2010
5.85%
8.00%
4.00%

2009
6.50%
8.00%
4.25%

2011
4.35%
n/a
n/a

4.85 percent.

The discount rate used to measure net periodic benefit expense each year is the rate as of the beginning of the
year (e.g., the prior measurement date). With an essentially stable asset allocation over the following time periods,
our  most  recent  compound  annual  rate  of  return  on  qualified  plans’  assets  was  5.1  percent,  7.8  percent  and
8.3 percent for the 5-year, 10-year and 15-year periods, respectively.

The market-related value of plan assets, which is used in calculating expected return on assets in net periodic
benefit cost, is determined each year by adjusting the previous year’s value by expected return, benefit payments
and  cash  contributions.  The  market-related  value  is  adjusted  for  asset  gains  and  losses  in  equal  20  percent
adjustments over a five- year period.

Our expected annualized long-term rate of return assumptions as of January 28, 2012 were 8.5 percent for
domestic and international equity securities, 5.5 percent for long-duration debt securities, 8.5 percent for balanced
funds and 10.0 percent for other investments. These estimates are a judgmental matter in which we consider the
composition of our asset portfolio, our historical long-term investment performance and current market conditions.
We review the expected long-term rate of return on an annual basis, and revise it as appropriate. Additionally, we
monitor the mix of investments in our portfolio to ensure alignment with our long-term strategy to manage pension
cost and reduce volatility in our assets.

An increase in the cost of covered health care benefits of 7.5 percent was assumed for 2011 and is assumed for

2012. The rate will be reduced to 5.0 percent in 2019 and thereafter.

Health Care Cost Trend Rates – 1% Change
(millions)
Effect on total of service and interest cost components of net periodic postretirement

health care benefit expense

Effect on the health care component of the accumulated postretirement benefit

obligation

1% Increase

1% Decrease

$1

7

$(1)

(7)

56

Plan Assets

Our asset allocation policy is designed to reduce the long-term cost of funding our pension obligations. The
plan invests with both passive and active investment managers depending on the investment’s asset class. The
plan also seeks to reduce the risk associated with adverse movements in interest rates by employing an interest
rate hedging program, which may include the use of interest rate swaps, total return swaps and other instruments.

Asset Category

Current targeted
allocation

Actual Allocation

2011

2010

18%
Domestic equity securities (a)
10
International equity securities
25
Debt securities
26
Balanced funds
21
Other (b)
Total
100%
(a) Equity securities include our common stock in amounts substantially less than 1 percent of total plan assets as of January 28, 2012 and

19%
12
25
30
14
100%

19%
11
29
25
16
100%

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January 29, 2011.

(b) Other assets include private equity, mezzanine and high-yield debt, natural resources and timberland funds, multi-strategy hedge funds,

derivative instruments and a 4 percent allocation to real estate.

Fair Value Measurements
(millions)
Cash and cash equivalents
Common collective trusts (a)
Equity securities (b)
Government securities (c)
Fixed income (d)
Balanced funds (e)
Private equity funds (f)
Other (g)
Total

Contributions in transit (h)

Total plan assets

Total
$ 263
653
—
356
466
744
283
156
$2,921
—
$2,921

Fair Value at January 28, 2012
Level 3
Level 2
Level 1
$ 252
$11
653
—
—
—
356
—
466
—
744
—
—
—
41
—
$2,512
$11

—
—
—
—
—
283
115
$398

Total
$ — $ 195
490
36
259
397
596
327
130
$2,430
85
$2,515

Fair Value at January 29, 2011
Level 3
Level 2
Level 1
$ —
$ 195
$—
—
490
—
—
—
36
—
259
—
—
397
—
—
596
—
327
—
—
127
3
—
$454
$1,940
$36

(a) Passively managed index funds with holdings in domestic and international equities.
(b)
(c)
(d)

Investments in U.S. small-, mid- and large-cap companies.
Investments in government securities and passively managed index funds with holdings in long-term government bonds.
Investments in corporate bonds, mortgage-backed securities and passively managed index funds with holdings in long-term corporate
bonds.
Investments in equities, nominal and inflation-linked fixed income securities, commodities and public real estate.
Includes investments in venture capital, mezzanine and high-yield debt, natural resources and timberland funds.
Investments in multi-strategy hedge funds (including domestic and international equity securities, convertible bonds and other alternative
investments), real estate and derivative investments.

(e)
(f)
(g)

(h) Represents  $20  million  in  contributions  to  equity  securities  and  $65  million  in  contributions  to  balanced  funds  held  by  investment

managers, but not yet invested in the respective funds as of January 29, 2011.

Level 3 Reconciliation

Actual return on plan assets (a)
Relating to
assets sold
during the
period

Relating to
assets still held
at the reporting
date

Balance at
beginning of
period

Purchases,
sales and
settlements

Transfer in
and/or out of
Level 3

Balance at
end of period

(millions)
2010
Private equity funds
Other
2011
Private equity funds
Other
(a) Represents realized and unrealized gains (losses) from changes in values of those financial instruments only for the period in which the

$(64)
(21)

$(49)
(1)

$336
119

$327
127

$327
127

$283
115

$ (6)
9

$26
—

$28
7

$12
2

$—
—

$—
—

instruments were classified as Level 3.

57

 
Position
Cash and cash equivalents

Valuation Technique

These investments are cash holdings and investment vehicles valued using the Net
Asset Value (NAV) provided by the administrator of the fund. The NAV for the
investment vehicles is based on the value of the underlying assets owned by the fund
minus applicable costs and liabilities, and then divided by the number of shares
outstanding.

Equity securities

Valued at the closing price reported on the major market on which the individual
securities are traded.

Common collective trusts/
balanced funds/certain multi-
strategy hedge funds

Valued using the NAV provided by the administrator of the fund. The NAV is a quoted
transactional price for participants in the fund, which do not represent an active market.

Fixed income and
government securities

Valued using matrix pricing models and quoted prices of securities with similar
characteristics.

Private equity/real estate/
certain multi-strategy hedge
funds/other

Valued by deriving Target’s proportionate share of equity investment from audited
financial statements. Private equity and real estate investments require significant
judgment on the part of the fund manager due to the absence of quoted market prices,
inherent lack of liquidity, and the long-term nature of such investments. Certain multi-
strategy hedge funds represent funds of funds that include liquidity restrictions and for
which timely valuation information is not available.

Contributions

Our obligations to plan participants can be met over time through a combination of company contributions to
these plans and earnings on plan assets. In 2011 and 2010, we made discretionary contributions of $152 million
and $153 million, respectively, to our qualified defined benefit pension plans. We are not required to make any
contributions in 2012. However, depending on investment performance and plan funded status, we may elect to
make a contribution. We expect to make contributions in the range of $5 million to $10 million to our postretirement
health care benefit plan in 2012.

Estimated Future Benefit Payments

Benefit payments by the plans, which reflect expected future service as appropriate, are expected to be paid as

follows:

Estimated Future Benefit Payments
(millions)
2012
2013
2014
2015
2016
2017-2021

28. Segment Reporting

Pension
Benefits
$131
140
149
157
165
958

Postretirement
Health Care Benefits
$ 6
7
7
8
9
63

Our  Canadian  Segment  was  initially  reported  in  our  first  quarter  2011  financial  results,  in  connection  with

entering into an agreement to purchase leasehold interests in Canada as disclosed in Note 7.

58

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Our segment measure of profit is used by management to evaluate the return on our investment and to make

operating decisions.

Business Segment Results

2011

(millions)

Retail

Card Canadian

Total

U.S.
U.S. Credit

2010

U.S.
U.S. Credit

2009

U.S.
U.S. Credit

Retail

Card Canadian

Total

Retail

Card Canadian

Total

Sales/Credit card revenues
Cost of sales
Bad debt expense (a)
Selling, general and administrative/

Operations and marketing
expenses (a)(b)

Depreciation and amortization

Earnings/(loss) before interest expense

$68,466 $1,399
—
154

47,860
—

$ — $69,865 $65,786 $1,604
—
528

— 47,860 45,725
154
—
—

$— $67,390 $63,435 $1,922
—
— 1,185

— 45,725 44,062
528
—

$— $65,357
— 44,062
— 1,185

13,774
2,067

550
17

74 14,398 13,367
48
2,065

2,131

433
19

— 13,801 12,989
2,008
— 2,084

425
14

— 13,414
— 2,023

and income taxes

4,765

678

(122)

5,322

4,629

624

— 5,252

4,376

298

— 4,673

Interest expense on nonrecourse debt

collateralized by credit card
receivables

Segment profit/(loss)
Unallocated (income) and expenses

Other interest expense
Interest income

Earnings before income taxes

—

72

$ 4,765 $ 606

—

83
$(122) $ 5,250 $ 4,629 $ 541

72

—

—

83

—

97

$— $ 5,169 $ 4,376 $ 201

—

97

$— $ 4,576

797
(3)

$ 4,456

677
(3)

$ 4,495

707
(3)

$ 3,872

Note: The sum of the segment amounts may not equal the total amounts due to rounding.
(a) The combination of bad debt expense and operations and marketing expenses, less amounts the U.S. Retail Segment charges the U.S.
Credit Card Segment for loyalty programs, within the U.S. Credit Card Segment represent credit card expenses on the Consolidated
Statements of Operations.

(b) Effective with the October 2010 nationwide launch of our new 5% REDcard Rewards loyalty program, we changed the formula under
which the U.S. Retail Segment charges the U.S. Credit Card Segment to better align with the attributes of the new program. Loyalty
program charges were $258 million in 2011, $102 million in 2010 and $89 million in 2009. In all periods these amounts were recorded as
reductions to SG&A expenses within the U.S. Retail Segment and increases to operations and marketing expenses within the U.S. Credit
Card Segment.

Total Assets by Segment
(millions)
U.S. Retail
U.S. Credit Card
Canadian
Total

Capital Expenditures by Segment
(millions)
U.S. Retail
U.S. Credit Card
Canadian
Total

29. Quarterly Results (Unaudited)

January 28,
2012
$37,108
6,135
3,387
$46,630

January 29,
2011
$37,324
6,381
—
$43,705

2011
$2,466
10
1,892
$4,368

2010
$ 2,121
8
—
$ 2,129

2009
$ 1,717
12
—
$ 1,729

Due to the seasonal nature of our business, fourth quarter operating results typically represent a substantially
larger share of total year revenues and earnings because they include our peak sales period from Thanksgiving

59

 
through the end of December. We follow the same accounting policies for preparing quarterly and annual financial
data. The table below summarizes quarterly results for 2011 and 2010:

Quarterly Results

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total Year

(millions, except per share data)

Sales
Credit card revenues

Total revenues
Cost of sales
Selling, general and administrative

expenses

Credit card expenses
Depreciation and amortization

Earnings before interest expense and

income taxes

Net interest expense

Nonrecourse debt collateralized by

credit card receivables

Other interest expense
Interest income

Net interest expense

Earnings before income taxes
Provision for income taxes
Net earnings

Basic earnings per share
Diluted earnings per share
Dividends declared per share
Closing common stock price:

High
Low

2011

2011

2010

2010

2010
$15,580 $15,158 $15,895 $15,126 $16,054 $15,226 $20,937 $20,277 $68,466 $65,786
1,604
69,865 67,390
47,860 45,725

384
21,288 20,661
14,986 14,458

435
15,935 15,593
10,838 10,412

379
16,402 15,605
11,165 10,562

406
16,240 15,532
10,872 10,293

1,399

2010

2010

2011

2011

2011

355

345

348

351

3,233
88
512

3,143
280
516

3,473
86
509

3,263
214
496

3,525
109
546

3,345
198
533

3,876
162
564

3,720
167
538

14,106 13,469
860
2,084

446
2,131

1,264

1,242

1,300

1,266

1,057

967

1,700

1,778

5,322

5,252

19
164
—

183

23
165
(1)

187

18
174
(1)

191

21
165
(1)

185

18
184
(2)

200

20
175
(1)

194

17
276
(1)

292

19
172
(1)

190

72
797
(3)

866

83
677
(3)

757

1,081
392
$
689 $
$ 0.99 $
0.99
0.25

1,109
1,055
405
384
671 $
704 $
0.91 $ 1.03 $
0.90
0.17

1.03
0.30

857
1,081
302
402
679 $
555 $
0.93 $ 0.82 $
0.92
0.25

0.82
0.30

1,588
553

4,456
1,527

773
238
535 $
0.75 $ 1.46 $
0.74
0.25

1,408
4,495
427
1,575
981 $ 1,035 $ 2,929 $ 2,920
1.46 $ 4.31 $ 4.03
4.28
4.00
1.45
1.15
0.92
0.25

1.45
0.30

55.39
49.10

58.05
48.64

51.81
46.33

57.13
49.00

55.56
46.44

55.05
50.72

54.75
48.51

60.77
53.48

55.56
46.33

60.77
48.64

Note: 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 and all other quarterly amounts may not equal the total year due to
rounding.

Sales by Product Category (a)

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total Year

Household essentials
Hardlines
Apparel and accessories
Food and pet supplies
Home furnishings and d´ecor
Total

(a) As a percentage of sales.

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

26%
17
20
20
17

26%
18
20
18
18

26%
16
21
18
19

26%
17
21
16
20

26%
15
20
20
19

26%
16
21
18
19

21%
26
18
17
18

20%
27
18
16
19

25%
19
19
19
18

24%
20
20
17
19

100% 100%

100% 100%

100% 100%

100% 100%

100% 100%

60

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, we 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 our 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, our chief
executive officer and chief financial officer concluded that our 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 SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by us in reports filed under the Exchange
Act  is  accumulated  and  communicated  to  our  management,  including  our  principal  executive  and  principal
financial  officers,  or  persons  performing  similar  functions,  as  appropriate,  to  allow  timely  decisions  regarding
required disclosure.

There were no changes in our internal control over financial reporting during the fourth quarter of fiscal 2011
that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
For  the  Report  of  Management  on  Internal  Control  and  the  Report  of  Independent  Registered  Public
Accounting Firm on Internal Control over Financial Reporting, see Item 8, Financial Statements and Supplementary
Data.

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Item 9B. Other Information

Not applicable.

61

 
P A R T  I I I

Certain information required by Part III is incorporated by reference from Target’s definitive Proxy Statement to
be filed on or about April 30, 2012. 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, Executive Officers and Corporate Governance

Election  of  Directors,  Section  16(a)  Beneficial  Ownership  Reporting  Compliance,  Additional  Information—
Business Ethics and Conduct, and General Information About the Board of Directors and Corporate Governance—
Committees,  of  Target’s  Proxy  Statement  to  be  filed  on  or  about  April  30,  2012,  are  incorporated  herein  by
reference. See also Item 4A, Executive Officers of Part I hereof.

Item 11. Executive Compensation

Executive  Compensation  and  Director  Compensation,  of  Target’s  Proxy  Statement  to  be  filed  on  or  about

April 30, 2012, is incorporated herein by reference.

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

Stockholder Matters

Beneficial Ownership of Certain Shareholders and Equity Compensation Plan Information, of Target’s Proxy

Statement to be filed on or about April 30, 2012, is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Certain  Relationships  and  General  Information  About  the  Board  of  Directors  and  Corporate  Governance—
Director Independence, of Target’s Proxy Statement to be filed on or about April 30, 2012, are incorporated herein
by reference.

Item 14. Principal Accountant Fees and Services

Audit and Non-audit Fees, of Target’s Proxy Statement to be filed on or about April 30, 2012, are incorporated

herein by reference.

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Item 15. Exhibits and Financial Statement Schedules

The following information required under this item is filed as part of this report:

a) Financial Statements

Consolidated Statements of Operations for the Years Ended January 28, 2012, January 29, 2011 and

January 30, 2010

Consolidated Statements of Financial Position at January 28, 2012 and January 29, 2011
Consolidated Statements of Cash Flows for the Years Ended January 28, 2012, January 29, 2011 and

January 30, 2010

Consolidated Statements of Shareholders’ Investment for the Years Ended January 28, 2012, January 29,

2011 and January 30, 2010

Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements

Financial Statement Schedules

For the Years Ended January 28, 2012, January 29, 2011 and January 30, 2010:

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

(2)A † Amended  and  Restated  Transaction  Agreement  dated  September  12,  2011  among  Zellers  Inc.,

Hudson’s Bay Company, Target Corporation and Target Canada Co. (1)

(3)A
B
(4)A

B ‡ First  Amending  Agreement  dated  January  20,  2012  to  Amended  and  Restated  Transaction
Agreement among Zellers Inc., Hudson’s Bay Company, Target Corporation and Target Canada Co.
Amended and Restated Articles of Incorporation (as amended through June 9, 2010) (2)
By-Laws (as amended through September 9, 2009) (3)
Indenture, dated as of August 4, 2000 between Target Corporation and Bank One Trust Company,
N.A. (4)
First  Supplemental  Indenture  dated  as  of  May  1,  2007  to  Indenture  dated  as  of  August  4,  2000
between Target Corporation and The Bank of New York Trust Company, N.A. (as successor in interest
to Bank One Trust Company N.A.) (5)
Target agrees to furnish to the Commission on request copies of other instruments with respect to
long-term debt.

B

C

(10)A * Target Corporation Officer Short-Term Incentive Plan (6)

B * Target Corporation Long-Term Incentive Plan (as amended and restated effective June 8, 2011) (7)
C * Target Corporation SPP I (2011 Plan Statement) (as amended and restated effective June 8, 2011) (8)
D * Target Corporation SPP II (2011 Plan Statement) (as amended and restated effective June 8, 2011)

(9)

E * Target Corporation SPP III (2011 Plan Statement) (as amended and restated effective June 8, 2011)

(10)

F

* Target Corporation Officer Deferred Compensation Plan (as amended and restated effective June 8,

2011) (11)

63

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G * Target Corporation Officer EDCP (2011 Plan Statement) (as amended and restated effective June 8,

2011) (12)

H * Amended and Restated Deferred Compensation Plan Directors (13)
I

* Target Corporation DDCP (2011 Plan Statement) (as amended and restated effective June 8, 2011)

(14)

J

* Target Corporation Officer Income Continuance Policy Statement (as amended and restated effective

June 8, 2011) (15)

K * Target Corporation Executive Excess Long Term Disability Plan (16)
L
M * Target  Corporation  Deferred  Compensation  Trust  Agreement  (as  amended  and  restated  effective

* Director Retirement Program (17)

January 1, 2009) (18)

N * Agreement between Target Corporation, Target Enterprise, Inc. and Troy Risch (19)
O

Five-Year  Credit  Agreement  dated  as  of  October  14,  2011  among  Target  Corporation,  Bank  of
America, N.A. as Administrative Agent and the Banks listed therein (20)
Amended and Restated Pooling and Servicing Agreement dated as of April 28, 2000 among Target
Receivables  Corporation,  Target  National  Bank  (formerly  known  as  Retailers  National  Bank),  and
Wells  Fargo  Bank,  National  Association  (formerly  known  as  Norwest  Bank  Minnesota,  National
Association) (21)
Amendment No. 1 dated as of August 22, 2001 to Amended and Restated Pooling and Servicing
Agreement  among  Target  Receivables  Corporation,  Target  National  Bank  (formerly  known  as
Retailers National Bank) and Wells Fargo Bank, National Association (formerly known as Norwest
Bank Minnesota, National Association) (22)
Amendment No. 2 dated as of January 31, 2011 to Amended and Restated Pooling and Servicing
Agreement  among  Target  Receivables  LLC  (formerly  known  as  Target  Receivables  Corporation),
Target National Bank (formerly known as Retailers National Bank) and Wells Fargo Bank, National
Association (formerly known as Wells Fargo Bank Minnesota, National Association) (23)
Amendment No. 3 dated as of January 26, 2012 to Amended and Restated Pooling and Servicing
Agreement  among  Target  Receivables  LLC  (formerly  known  as  Target  Receivables  Corporation),
Target National Bank (formerly known as Retailers National Bank) and Wells Fargo Bank, National
Association (formerly known as Wells Fargo Bank Minnesota, National Association)

P

Q

R

S

* Target Corporation 2011 Long-Term Incentive Plan (24)

T
U * Amendment  to  Target  Corporation  Deferred  Compensation  Trust  Agreement  (as  amended  and

restated effective January 1, 2009) (25)

V * Form of Executive Non-Qualified Stock Option Agreement (26)
W * Form of Executive Restricted Stock Unit Agreement (27)
X * Form of Executive Performance Share Unit Agreement
Y * Form of Non-Employee Director Non-Qualified Stock Option Agreement (28)
Z
(12)
(21)
(23)
(24)
(31)A
(31)B
(32)A

* Form of Non-Employee Director Restricted Stock Unit Agreement (29)
Statements of Computations of Ratios of Earnings to Fixed Charges
List of Subsidiaries
Consent of Independent Registered Public Accounting Firm
Powers of Attorney
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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
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
XBRL Instance Document
XBRL Taxonomy Extension Schema
XBRL Taxonomy Extension Calculation Linkbase

(32)B

101.INS
101.SCH
101.CAL

64

101.DEF
101.LAB
101.PRE

XBRL Taxonomy Extension Definition Linkbase
XBRL Taxonomy Extension Label Linkbase
XBRL Taxonomy Extension Presentation Linkbase

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

furnishing the exhibits.

† Excludes the Disclosure Letter and Schedule A referred to in the agreement, which Target Corporation agrees to furnish supplementally to

the Securities and Exchange Commission upon request.

‡ Excludes Exhibits A and B referred to in the agreement, which Target Corporation agrees to furnish supplementally to the Securities and

Exchange Commission upon request.

* Management contract or compensation plan or arrangement required to be filed as an exhibit to this Form 10-K.
(1) Incorporated by reference to Exhibit (2)A to Target’s Form 10-Q Report for the quarter ended October 29, 2011.
(2) Incorporated by reference to Exhibit (3)A to Target’s Form 8-K Report filed June 10, 2010.
(3) Incorporated by reference to Exhibit (3)B to Target’s Form 8-K Report filed September 10, 2009.
(4) Incorporated by reference to Exhibit 4.1 to Target’s Form 8-K Report filed August 10, 2000.
(5) Incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K Report filed May 1, 2007.
(6) Incorporated by reference to Appendix B to the Registrant’s Proxy Statement filed April 9, 2007.
(7) Incorporated by reference to Exhibit (10)B to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(8) Incorporated by reference to Exhibit (10)C to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(9) Incorporated by reference to Exhibit (10)D to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(10) Incorporated by reference to Exhibit (10)E to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(11) Incorporated by reference to Exhibit (10)F to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(12) Incorporated by reference to Exhibit (10)G to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(13) Incorporated by reference to Exhibit (10)I to Target’s Form 10-K Report for the year ended February 3, 2007.
(14) Incorporated by reference to Exhibit (10)I to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(15) Incorporated by reference to Exhibit (10)J to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(16) Incorporated by reference to Exhibit (10)A to Target’s Form 10-Q Report for the quarter ended October 30, 2010.
(17) Incorporated by reference to Exhibit (10)O to Target’s Form 10-K Report for the year ended January 29, 2005.
(18) Incorporated by reference to Exhibit (10)O to Target’s Form 10-K Report for the year ended January 31, 2009.
(19) Incorporated by reference to Exhibit (10)N to Target’s Form 10-K Report for the year ended January 29, 2011.
(20) Incorporated by reference to Exhibit (10)O to Target’s Form 10-Q Report for the quarter ended October 29, 2011.
(21) Incorporated by reference to Exhibit (10)D to Target’s Form 10-Q Report for the quarter ended August 2, 2008.
(22) Incorporated by reference to Exhibit (10)E to Target’s Form 10-Q Report for the quarter ended August 2, 2008.
(23) Incorporated by reference to Exhibit (10)X to Target’s Form 10-K Report for the year ended January 29, 2011.
(24) Incorporated by reference to Appendix A to Target’s Proxy Statement filed April 28, 2011.
(25) Incorporated by reference to Exhibit (10)AA to Target’s Form 10-Q Report for the quarter ended July 30, 2011.
(26) Incorporated by reference to Exhibit (10)BB to Target’s Form 8-K Report filed January 11, 2012.
(27) Incorporated by reference to Exhibit (10)CC to Target’s Form 8-K Report filed January 11, 2012.
(28) Incorporated by reference to Exhibit (10)EE to Target’s Form 8-K Report filed January 11, 2012.
(29) Incorporated by reference to Exhibit (10)FF to Target’s Form 8-K Report filed January 11, 2012.

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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.

SIGNATURES

TARGET CORPORATION

By:

1APR200416064753

Douglas A. Scovanner
Executive Vice President, Chief Financial
Officer and Chief Accounting Officer

Dated: March 15, 2012

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.

Dated: March 15, 2012

Dated: March 15, 2012

ROXANNE S. AUSTIN
CALVIN DARDEN
MARY N. DILLON
JAMES A. JOHNSON
MARY E. MINNICK
ANNE M. MULCAHY

4MAR200909320639

Gregg W. Steinhafel
Chairman of the Board, Chief Executive Officer
and President

1APR200416064753

Douglas A. Scovanner
Executive Vice President, Chief Financial Officer and
Chief Accounting Officer

DERICA W. RICE
STEPHEN W. SANGER
JOHN G. STUMPF
SOLOMON D. TRUJILLO

Directors

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:

1APR200416064753

Douglas A. Scovanner
Attorney-in-fact

Dated: March 15, 2012

66

TARGET CORPORATION
Schedule II—Valuation and Qualifying Accounts
Fiscal Years 2011, 2010 and 2009

(millions)

Column A

Description

Allowance for doubtful accounts:

2011
2010
2009

Sales returns reserves (a):

Column B

Column C

Column D

Column E

Balance at
Beginning of
Period

Additions
Charged to
Cost, Expenses

Deductions

Balance at End
of Period

$ 690
$1,016
$1,010

154
528
1,185

(414)
(854)
(1,179)

$ 430
$ 690
$1,016

2011
2010
2009

38
41
29
(a) These amounts represent the gross margin effect of sales returns during the respective years. Expected merchandise returns after year-end

(1,238)
(1,149)
(1,106)

1,238
1,146
1,118

38
38
41

$
$
$

$
$
$

for sales made before year-end were $98 million, $97 million and $99 million for 2011, 2010 and 2009, respectively.

67

Exhibit

Description

Exhibit Index

Amended and Restated Transaction Agreement dated
September 12, 2011 among Zellers Inc., Hudson’s Bay Company,
Target Corporation and Target Canada Co.
First Amending Agreement dated January 20, 2012 to Amended
and Restated Transaction Agreement among Zellers Inc., Hudson’s
Bay Company, Target Corporation and Target Canada Co.
Amended and Restated Articles of Incorporation (as amended
June 9, 2010)
By-Laws (as amended through September 9, 2009)
Indenture, dated as of August 4, 2000 between Target Corporation
and Bank One Trust Company, N.A.
First Supplemental Indenture dated as of May 1, 2007 to Indenture
dated as of August 4, 2000 between Target Corporation and The
Bank of New York Trust Company, N.A. (as successor in interest to
Bank One Trust Company N.A.)
Target agrees to furnish to the Commission on request copies of
other instruments with respect to long-term debt.
Target Corporation Officer Short-Term Incentive Plan
Target Corporation Long-Term Incentive Plan (as amended and
restated effective June 8, 2011)
Target Corporation SPP I (2011 Plan Statement) (as amended and
restated effective June 8, 2011)
Target Corporation SPP II (2011 Plan Statement) (as amended and
restated effective June 8, 2011)
Target Corporation SPP III (2011 Plan Statement) (as amended and
restated effective June 8, 2011)
Target Corporation Officer Deferred Compensation Plan (as
amended and restated effective June 8, 2011)
Target Corporation Officer EDCP (2011 Plan Statement) (as
amended and restated effective June 8, 2011)
Amended and Restated Deferred Compensation Plan Directors
Target Corporation DDCP (2011 Plan Statement) (as amended and
restated effective June 8, 2011)
Target Corporation Officer Income Continuance Policy Statement
(as amended and restated effective June 8, 2011)
Target Corporation Executive Excess Long Term Disability Plan
Director Retirement Program
Target Corporation Deferred Compensation Trust Agreement (as
amended and restated effective January 1, 2009)
Agreement between Target Corporation, Target Enterprise, Inc. and
Troy Risch
Five-Year Credit Agreement dated as of October 14, 2011 among
Target Corporation, Bank of America, N.A. as Administrative Agent
and the Banks listed therein

(2)A

(2)B

(3)A

(3)B
(4)A

(4)B

(4)C

(10)A
(10)B

(10)C

(10)D

(10)E

(10)F

(10)G

(10)H
(10)I

(10)J

(10)K
(10)L
(10)M

(10)N

(10)O

68

Manner of Filing

Incorporated by Reference

Filed Electronically

Incorporated by Reference

Incorporated by Reference
Incorporated by Reference

Incorporated by Reference

Filed Electronically

Incorporated by Reference
Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference
Incorporated by Reference

Incorporated by Reference

Incorporated by Reference
Incorporated by Reference
Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Exhibit

Description

(10)P

(10)S

(10)R

(10)Q

(10)T
(10)U

Amended and Restated Pooling and Servicing Agreement dated as
of April 28, 2000 among Target Receivables Corporation, Target
National Bank (formerly known as Retailers National Bank), and
Wells Fargo Bank, National Association (formerly known as
Norwest Bank Minnesota, National Association)
Amendment No. 1 dated as of August 22, 2001 to Amended and
Restated Pooling and Servicing Agreement among Target
Receivables Corporation, Target National Bank (formerly known as
Retailers National Bank) and Wells Fargo Bank, National
Association (formerly known as Norwest Bank Minnesota, National
Association)
Amendment No. 2 dated as of January 31, 2011 to Amended and
Restated Pooling and Servicing Agreement among Target
Receivables LLC (formerly known as Target Receivables
Corporation), Target National Bank (formerly known as Retailers
National Bank) and Wells Fargo Bank, National Association
(formerly known as Wells Fargo Bank Minnesota, National
Association)
Amendment No. 3 dated as of January 26, 2012 to Amended and
Restated Pooling and Servicing Agreement among Target
Receivables LLC (formerly known as Target Receivables
Corporation), Target National Bank (formerly known as Retailers
National Bank) and Wells Fargo Bank, National Association
(formerly known as Wells Fargo Bank Minnesota, National
Association)
Target Corporation 2011 Long-Term Incentive Plan
Amendment to Target Corporation Deferred Compensation Trust
Agreement (as amended and restated effective January 1, 2009)
Form of Executive Non-Qualified Stock Option Agreement
Form of Executive Restricted Stock Unit Agreement
Form of Executive Performance Share Unit Agreement
Form of Non-Employee Director Non-Qualified Stock Option
Agreement
Form of Non-Employee Director Restricted Stock Unit Agreement
Statements of Computations of Ratios of Earnings to Fixed
Charges
List of Subsidiaries
Consent of Independent Registered Public Accounting Firm
Powers of Attorney
Certification of the Chief Executive Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
Certification of the Chief Financial Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
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
Certification of the Chief Financial Officer Pursuant to Section 18
U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
101.INS
XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema
101.CAL
101.DEF
101.LAB
101.PRE

XBRL Taxonomy Extension Calculation Linkbase
XBRL Taxonomy Extension Definition Linkbase
XBRL Taxonomy Extension Label Linkbase
XBRL Taxonomy Extension Presentation Linkbase

(10)V
(10)W
(10)X
(10)Y

(21)
(23)
(24)
(31)A

(10)Z
(12)

(32)B

(31)B

(32)A

Manner of Filing

Incorporated by Reference

Incorporated by Reference

Incorporated by Reference

Filed Electronically

Incorporated by Reference
Incorporated by Reference

Incorporated by Reference
Incorporated by Reference
Filed Electronically
Incorporated by Reference

Incorporated by Reference
Filed Electronically

Filed Electronically
Filed Electronically
Filed Electronically
Filed Electronically

Filed Electronically

Filed Electronically

Filed Electronically

Filed Electronically
Filed Electronically
Filed Electronically
Filed Electronically
Filed Electronically
Filed Electronically

69

Exhibit 12

TARGET CORPORATION
Computations of Ratios of Earnings to Fixed Charges for each of the
Five Years in the Period Ended January 28, 2012

Ratio of Earnings to Fixed Charges

(millions)
Earnings from continuing operations

before income taxes
Capitalized interest, net
Adjusted earnings from continuing
operations before income taxes

Fixed charges:

Interest expense (a)
Interest portion of rental expense

Total fixed charges
Earnings from continuing

operations before income taxes
and fixed charges

Ratio of earnings to fixed charges

January 28,
2012

January 29,
2011

Fiscal Year Ended
January 30,
2010

January 31,
2009

February 2,
2008

$4,456
5

$4,495
2

$3,872
(9)

$3,536
(48)

4,461

4,497

3,863

797
111
908

776
110
886

830
105
935

3,488

956
103
1,059

$4,625
(66)

4,559

747
94
841

$5,369
5.91

$5,383
6.08

$4,798
5.13

$4,547
4.29

$5,400
6.42

(a)

Includes  interest  on  debt  and  capital  leases  (including  capitalized  interest)  and  amortization  of  debt  issuance  costs.  Excludes  interest
income and interest associated with unrecognized tax benefit liabilities, which is recorded within income tax expense.

70

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TARGET 2011 ANNUAL REPORT

ANNUAL MEETING

The Annual Meeting of Shareholders is 
scheduled for June 13, 2012 at 1:30 p.m. (Central 
Daylight Time) at the State Street CityTarget 
store, 1 South State Street, Chicago, IL, 60603.

TRANSFER AGENT, 
REGISTRAR 
AND DIVIDEND 
DISBURSING AGENT

Computershare Shareowner Services

SHAREHOLDER 
INFORMATION

Quarterly and annual shareholder information, 
including the Form 10-Q and Form 10-K Annual 
Report, which are filed with the Securities 
and Exchange Commission, is available at no 
charge to shareholders. To obtain copies of 
these materials, you may send an e-mail to 
Investorrelations@Target.com, call 1-800-775-3110, 
or write to: Director, Investor Communications 
(TPN-1146), Target Corporation, 1000 Nicollet Mall,  
Minneapolis, MN 55403. These documents as well 
as other information about Target Corporation, 
including our Business Conduct Guide, Corporate 
Governance Guidelines, Corporate Responsibility 
Report and Board of Director Committee Position 
Descriptions, are also available on the Internet at 
Target.com/investors.

TRUSTEE, 
EMPLOYEE SAVINGS 
401(K) AND PENSION 
PLANS

State Street Bank and Trust Company

STOCK EXCHANGE 
LISTINGS

Trading Symbol: TGT
New York Stock Exchange

SHAREHOLDER 
ASSISTANCE

For assistance regarding individual stock records, 
lost certificates, name or address changes, 
dividend or tax questions, call Computershare 
Shareowner Services (formerly BNY Mellon 
Shareowner Services) at 1-800-794-9871, access 
their website at www.bnymellon.com/shareowner/
equityaccess, or write to: Computershare 
Shareowner Services, P.O. Box 358015, 
Pittsburgh, PA 15252-8015.

SALES 
INFORMATION

Comments regarding our sales results are 
provided periodically throughout the year on 
a recorded telephone message accessible 
by calling 866-526-7639. Our current sales 
disclosure practice includes a sales recording  
on the day of our monthly sales release.

DIRECT STOCK 
PURCHASE/
DIVIDEND 
REINVESTMENT 
PLAN

Computershare Shareowner Services  
administers a direct service investment plan that 
allows interested investors to purchase Target 
Corporation stock directly, rather than through 
a broker, and become a registered shareholder 
of the company. The program offers many 
features including dividend reinvestment. For 
detailed information regarding this program, call 
Computershare Shareowner Services toll free 
at 1-866-353-7849 or write to: Computershare 
Shareowner Services, P.O. Box 358035, 
Pittsburgh, PA 15252-8035.

© 2012 Target Brands, Inc. Archer Farms, the Bullseye Design, the Bullseye Dog, CityTarget, Expect More. Pay Less., Go International, Market Pantry, 
Merona, REDcard, Spritz, SuperTarget, Take Charge of Education, Target and up & up are trademarks of Target Brands, Inc.

Shareholder InformationTARGET 2011 ANNUAL REPORT

Jodeen A. Kozlak
Executive Vice 
President,  
Human Resources

Terrence J. Scully
President,  
Target Financial and 
Retail Services

DIRECTORS

Roxanne S. Austin
President,  
Austin Investment 
Advisors
(1) (4)

Calvin Darden
Chairman,  
Darden Development 
Group, LLC 
(2) (5)

Mary N. Dillon
President and Chief 
Executive Officer, 
United States Cellular 
Corporation 
(2) (3)

James A. Johnson
Vice Chairman,  
Perseus, LLC 
(2) (3)

OTHER OFFICERS

Janna Adair-Potts
Senior Vice President, 
Stores Operations

Patricia Adams
Senior Vice President,  
Merchandising, Apparel  
and Accessories

Lalit Ahuja
Chairman and President,  
Target India

Stacia Andersen
Senior Vice President, 
Merchandising, Home

Jose Barra
Senior Vice President, 
Merchandising, Health 
and Beauty 

Bryan Berg
Senior Vice President, 
Stores, Target Canada

Mary E. Minnick
Partner,  
Lion Capital LLP 
(1) (3)

Anne M. Mulcahy
Chairman of the  
Board of Trustees,  
Save the Children 
Federation, Inc. 
(4) (5)

Derica W. Rice
Executive Vice 
President, Global 
Services and  
Chief Financial 
Officer,  
Eli Lilly & Company 
(1) (4)

Stephen W. Sanger
Former Chairman of 
the Board and Chief 
Executive Officer, 
General Mills, Inc. 
(2) (5)

Tom Butterfield
Senior Vice President, 
Strategy and 
Operations, Target 
Technology Services

Casey Carl
President, 
Multichannel, and  
Senior Vice President,  
Merchandising, 
Hardlines

Naomi Cramer
Senior Vice President, 
Human Resources, 
Field

Tricia Dirks
Senior Vice President, 
Human Resources, 
Organizational 
Effectiveness

Barbara Dugan
Senior Vice President, 
Target Sourcing 
Services and Global 
Human Resources 
and Administration

Gregg W. Steinhafel
Chairman, President 
and Chief Executive 
Officer, Target

John G. Stumpf
Chairman of the 
Board, President 
and Chief Executive 
Officer,  
Wells Fargo & 
Company
(1) (4)

Solomon D. Trujillo
Former Chief 
Executive Officer, 
Telestra Corporation 
Limited
(3) (5)

ExECUTIvE OFFICERS

Timothy R. Baer
Executive Vice 
President,  
General Counsel and 
Corporate Secretary

Anthony S. Fisher
President,  
Target Canada

John D. Griffith
Executive Vice 
President,  
Property 
Development

Beth M. Jacob
Executive Vice 
President,  
Target Technology 
Services and Chief 
Information Officer

John J. Mulligan
Executive Vice 
President and Chief 
Financial Officer 
Effective 4/1/12

Tina M. Schiel
Executive Vice 
President,  
Stores

Douglas A. Scovanner
Executive Vice 
President and Chief 
Financial Officer
Retiring 3/31/12

Bryan Everett
Senior Vice President, 
Stores

Susan Kahn
Senior Vice President, 
Communications

Shawn Gensch
Senior Vice President, 
Marketing

Corey Haaland
Senior Vice President, 
Financial Planning 
Analysis and Tax

Cynthia Ho
Senior Vice President, 
Target Sourcing 
Services, Global 
Sourcing

Derek Jenkins
Senior Vice President, 
External Affairs, 
Target Canada

Navneet Kapoor
Senior Vice President, 
Target Technology 
Services and 
Managing Director, 
Target India

Sid Keswani
Senior Vice President, 
Stores

Richard Maguire
Senior Vice President, 
Supply Chain,  
Target Canada

Timothy Mantel
President, Target 
Sourcing Services

Annette Miller
Senior Vice President, 
Merchandising, 
Grocery

John Morioka
Senior Vice President, 
Merchandising, 
Target Canada

Scott Nelson
Senior Vice President, 
Real Estate

Mike Robbins
Senior Vice President,  
Distribution 
Operations

Mark Schindele
Senior Vice President, 
Merchandising 
Operations 

Keri Jones
Senior Vice President, 
Merchandise Planning

Todd Marshall
Senior Vice President,  
Marketing Operations

Samir Shah
Senior Vice President, 
Stores

Gregg W. Steinhafel
Chairman, President 
and Chief Executive 
Officer

Kathryn A. Tesija
Executive Vice 
President, 
Merchandising

Laysha L. Ward
President,  
Community Relations 
and Target Foundation

(1)  Audit Committee
(2)  Compensation Committee
(3)  Corporate Responsibility  
  Committee
(4)  Finance Committee
(5)  Nominating and  
  Governance Committee

Mitchell Stover
Senior Vice President, 
Distribution

Cary Strouse
Senior Vice President, 
Stores

Rich varda
Senior Vice President, 
Store Design

Jane Windmeier
Senior Vice President, 
Global Finance 
Systems and Chief 
Financial Officer, 
Target Canada

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Directors and Management 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1000 Nicollet Mall 
Minneapolis, MN 55403 
612.304.6073 
Target.com