Target Annual Report 2015

FY2015 Annual Report · Target

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2015 Annual Report

Welcome to our 2015 Annual Report
To explore key stories of the past year
and find out more about what’s in store,
visit target.com/abullseyeview. You can
also view our Annual Report online at
target.com/annualreport.

Financial Highlights (Note: Reflects amounts attributable to continuing operations.)

Sales
In Millions

EBIT
In Millions

Net Earnings
In Millions

Diluted EPS

6
6
4
,
8
6
$

0
6
9
,
1
7
$

9
7
2
,
1
7
$

8
1
6
,
2
7
$

5
8
7
,
3
7
$

3
4
4
,
5
$

0
4
7
,
5
$

0
7
1
,
5
$

5
3
5
,
4
$

0
3
5
,
5
$

9
4
0
,
3
$

5
1
3
,
3
$

4
9
6
,
2
$

9
4
4
,
2
$

1
2
3
,
3
$

6
4
.
4
$

0
0
.
5
$

0
2
.
4
$

3
8
.
3
$

5
2
.
5
$

‘11

‘12 ‘13 ‘14 ‘15

‘11

‘12 ‘13 ‘14 ‘15

‘11

‘12 ‘13 ‘14 ‘15

‘11

‘12 ‘13 ‘14 ‘15

2015 Growth: 1.6%
Five-year CAGR: 3.1%

2015 Growth: 22.0%
Five-year CAGR: 3.4%

2015 Growth: 35.6%
Five-year CAGR: 5.9%

2015 Growth: 37.2%
Five-year CAGR: 9.7%

Total Segment Sales: $73.8 Billion

26%

21%

19%

17%

Household
Essentials

Food & Pet
Supplies

Apparel &
Accessories

Hardlines

Home Furnishings
& Décor

Directors and Management

Directors

Executive Officers

Other Senior Officers

Roxanne S. Austin
President, Austin Investment
Advisors (6) (3)

Douglas M. Baker, Jr.
Chairman and Chief Executive
Officer, Ecolab Inc. (2) (5) (4)

Brian C. Cornell
Chairman of the
Board and Chief Executive Officer

Calvin Darden
Chairman, Darden Putnam Energy
& Logistics, LLC (2) (5)

Henrique De Castro
Former Chief Operating Officer,
Yahoo! Inc. (2) (3)

Robert L. Edwards
Former President and Chief
Executive Officer, AB Acquisition
LLC (Albertsons/Safeway) (1) (3)

Melanie L. Healey
Former Group President, North
America, The Procter & Gamble
Company (2) (3)

Timothy R. Baer
Executive Vice President, Chief
Legal Officer and Corporate
Secretary

Casey L. Carl
Executive Vice President and
Chief Strategy and Innovation
Officer

Brian C. Cornell
Chairman of the Board and Chief
Executive Officer

Jeffrey J. Jones II
Executive Vice President and
Chief Marketing Officer

Stephanie A. Lundquist
Executive Vice President and
Chief Human Resources Officer

Michael E. McNamara
Executive Vice President and
Chief Information Officer

John J. Mulligan
Executive Vice President and
Chief Operating Officer

Donald R. Knauss
Former Executive Chairman, The
Clorox Company (2) (5)

Janna A. Potts
Executive Vice President and
Chief Stores Officer

Jackie Hourigan Rice
Executive Vice President and
Chief Risk and Compliance
Officer

Cathy R. Smith
Executive Vice President and
Chief Financial Officer

Laysha L. Ward
Executive Vice President
and Chief Corporate Social
Responsibility Officer

Monica C. Lozano
Former Chairman, U.S. Hispanic
Media, Inc. (1) (5)

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

Anne M. Mulcahy
Chairman of the Board of
Trustees, Save the Children
Federation, Inc. (2) (6)

Derica W. Rice
Executive Vice
President, Global Services and
Chief Financial Officer, Eli Lilly &
Company (1) (6)

Kenneth L. Salazar
Partner, WilmerHale (6) (3)

John G. Stumpf
Chairman of the Board and Chief
Executive Officer, Wells Fargo &
Company (5) (6)

(1) Audit and Finance Committee

(2) Human Resources and
Compensation Committee

(3) Infrastructure and Investment
Committee

(4) Lead Independent Director

(5) Nominating and Governance
Committee

(6) Risk and Compliance
Committee

Patricia Adams
Executive Vice President,
Merchandising Product Group

Aaron Alt
Senior Vice President, Grocery
Transformation

Kristi Argyilan
Senior Vice President, Media and
Guest Engagement

David Best
Senior Vice President, Merchandising
Planning, Hardlines and Essentials

Dawn Block
Senior Vice President, Merchandising
Essentials & Beauty

Karl Bracken
Senior Vice President, Supply Chain
Transformation

John Butcher
Senior Vice President, Merchandising
Beauty & Dermstore

Kelly Caruso
President, Target Sourcing Services

Keith Colbourn
Senior Vice President, Loyalty and
Lifecycle Marketing

Joe Contrucci
Senior Vice President, Stores

Tony Costanzo
Senior Vice President, Stores

Corey Haaland
Senior Vice President, Treasurer

Robert Harrison
Senior Vice President, Chief
Accounting Officer and Controller

Christina Hennington
Senior Vice President, Merchandising
Transformation and Operations

Cynthia Ho
Senior Vice President, Target
Sourcing Services

Yu-Ping Kao
Senior Vice President, Human
Resources, Pay and Benefits

Navneet Kapoor
President and Managing Director,
Target India

Scott Kennedy
President, Target Financial and Retail
Services

Carson Landsgard
Senior Vice President, Distribution

Rodney Lastinger
Senior Vice President, Stores

Stephanie Lucy
Senior Vice President, Merchandise
Planning, Apparel and Accessories

Brad Maiorino
Senior Vice President and Chief
Information Security Officer

Tim Curoe
Senior Vice President, Talent &
Organizational Effectiveness

Scott Nygaard
Senior Vice President,
Merchandising, Hardlines

Anne Dament
Senior Vice President,
Merchandising, Grocery

Paritosh Desai
Senior Vice President, Enterprise
Data, Analytics and Business
Intelligence

Michael Fiddelke
Senior Vice President, Financial
Planning Analysis

Juan Galarraga
Senior Vice President, Store
Operations

Jamil Ghani
Senior Vice President, Enterprise
Strategy and Innovation

Jason Goldberger
President, Target.com & Mobile

Rick Gomez
Senior Vice President, Brand and
Category Marketing

Julie Guggemos
Senior Vice President, Product
Design and Development

Anu Gupta
Senior Vice President, Operational
Excellence

Tammy Redpath
Senior Vice President, Creative and
Marketing Operations

Ryan Rumbarger
Senior Vice President, Human
Resources, Stores and Operations

Jill Sando
Senior Vice President,
Merchandising, Home

Mark Schindele
Senior Vice President, Target
Properties

Samir Shah
Senior Vice President, Stores

Dustee Tucker Jenkins
Senior Vice President,
Communications

Arthur Valdez
Executive Vice President and Chief
Supply Chain & Logistics Officer

Todd Waterbury
Senior Vice President and Chief
Creative Officer

Michelle Wlazlo
Senior Vice President, Merchandising
Apparel & Accessories

A Growth Story Again

In 2015, Target drove profitable growth throughout the year with a
strategic framework that we are confident will keep our company
growing for years to come.

Central to our strategy – really, to everything we do – is a clear
understanding of what our guests expect. Listening to our guests
and investing the time and resources to get to know them better has
already helped us achieve:

• Positive traffic growth in each quarter of 2015, building on traffic

momentum from the end of 2014.

• Sales results on the high end of our comparable store sales

guidance for the year, driven primarily by our signature
businesses, which grew about three times faster than our
overall comp.

• Digital sales growth of more than 30 percent, which continued

to set the pace for U.S. retail.

• Full-year adjusted earnings per share of $4.69*, above our initial
guidance of $4.45 to $4.65, and 11 percent higher than in 2014.

Our team drove these results while also undertaking several key
strategic shifts. Some were challenging, like discontinuing our
Canadian operations and restructuring our U.S. headquarters. Some
were groundbreaking, like announcing our $1.9-billion transaction
with CVS Health. This partnership will deliver ongoing value by
growing traffic in our store pharmacies. Importantly, the transaction
also provided more than $1 billion of net cash to support our capital
deployment priorities, including the return of nearly $5 billion to
shareholders through dividends and share repurchase, well above
the goal we set at the beginning of 2015.

Above all, our team rallied around a set of key enterprise priorities
focused on the things that matter most to our guests. In the course
of the year, I visited with hundreds of guests in our stores and in their
homes. They shared with me the reasons they love Target, and the
times we’ve let them down. Those conversations, and the firsthand
input our team receives from our guests across all touchpoints, have
defined our priorities for the year.

Signature businesses – the categories for which our guests
turn to Target and in which they expect us to lead – namely Style,
Baby, Kids and Wellness. We’ll continue to invest in innovation and
inspiration, knowing that signature businesses play a unique role in
our results, driving the strongest growth in our portfolio. This year,
we will continue to focus on category roles, redefine and improve

our food position and further innovate in our merchandising, for an
experience that best suits our guests.

Target.com & mobile – what’s clear from talking to our guests is
that the easier we make it to shop across all of Target – physical and
digital – the happier they are. We’re focused on offering a rich digital
experience that deepens engagement in stores and online, and we’ll
continue to invest in digital capabilities that enable our guests to
seamlessly experience Target.

Local relevance and flexible formats – we’ve seen positive initial
results in creating locally relevant experiences in focus markets like
Chicago. And, with flexible-format stores making up the bulk of our
new-store openings, we’ll learn even more, as each store and its
assortment is custom-designed for the neighborhood it serves.

Target rewards – we know our guests love a great deal, and
current offerings like Cartwheel and REDcard Rewards offer fantastic
opportunities to save. This year, we’re focused on integrating our
loyalty vehicles as we continue to develop a broader rewards
portfolio for our guests – getting to know their attitudes, preferences
and behaviors more deeply, so we can deliver more personalized
promotions and experiences.

Retail foundations – getting the basics right is essential. When we
fall short on the basics, guests have a hard time getting excited about
any innovations we might envision. So, beneath all our efforts is a
relentless focus on getting the fundamentals right: modernizing our
supply chain, enhancing our technology, taking complexity out of our
systems, elevating the use of data and driving productivity across the
entire business.

The progress Target made as a team and a brand in 2015 is real, and
it’s sustainable. Yet, this is a team that takes nothing for granted and
is working every day to deliver the best experience for our guests.
We know that getting it right for them drives growth for us and strong
returns for our shareholders, and we’re committed to this formula for
value creation as we move confidently into the future.

Brian Cornell, Chairman and CEO

*A reconciliation of adjusted EPS from continuing operations to GAAP EPS from continuing operations is provided on page 23 of our Form 10-K.

Target 2015 Annual ReportFinancial Summary

Target 2015 Annual Report

FINANCIAL RESULTS: (in millions)
Sales (b)

Cost of sales

Selling, general and administrative expenses (SG&A)

Credit card expenses

Depreciation and amortization

Gain on sale (c)

Earnings from continuing operations before
interest expense and income taxes (EBIT)

Net interest expense

Earnings from continuing operations before income taxes

Provision for income taxes

Net earnings from continuing operations

Discontinued operations, net of tax

Net earnings /(loss)

PER SHARE:
Basic earnings/(loss) per share

Continuing operations

Discontinued operations

Net earnings/(loss) per share

Diluted earnings/(loss) per share

Continuing operations

Discontinued operations

Net earnings/(loss) per share

Cash dividends declared

FINANCIAL POSITION: (in millions)

Total assets (d)

Capital expenditures (e)

2015

2014

2013

2012 (a)

2011

$ 73,785

$ 72,618

$ 71,279

$ 73,301

$ 69,865

51,997

14,665

—

2,213

(620)

5,530

607

4,923

1,602

3,321

51,278

14,676

—

2,129

—

4,535

882

3,653

1,204

2,449

(4,085)

50,039

14,465

—

1,996

(391)

5,170

1,049

4,121

1,427

2,694

(723)

50,568

14,643

467

2,044

(161)

5,740

684

5,056

1,741

3,315

(316)

47,860

14,032

446

2,084

—

5,443

822

4,621

1,572

3,049

(120)

$ 3,363

(1,636)

1,971

2,999

2,929

5.29

0.07

5.35

5.25

0.07

5.31

2.20

3.86

(6.44)

(2.58)

3.83

(6.38)

(2.56)

1.99

4.24

(1.14)

3.10

4.20

(1.13)

3.07

1.65

5.05

(0.48)

4.57

5.00

(0.48)

4.52

1.38

4.49

(0.18)

4.31

4.46

(0.18)

4.28

1.15

$ 40,262

$ 41,172

$ 44,325

$ 47,878

$ 46,260

1,438

1,786

1,886

2,345

2,476

Long-term debt, including current portion (e)

$ 12,760

$ 12,725

$ 12,494

$ 16,260

$ 16,127

Net debt (e)(f)

Shareholders’ investment

SEGMENT FINANCIAL RATIOS: (g)

Comparable sales growth (h)

Gross margin (% of sales)

SG&A (% of sales)

EBIT margin (% of sales)

OTHER:

Common shares outstanding (in millions)

Operating cash flow provided by continuing

operations (in millions)

Sales per square foot (e)(i)

9,752

$ 11,205

$ 12,491

$ 16,185

$ 15,983

$ 12,957

$ 13,997

$ 16,231

$ 16,558

$ 15,821

2.1%

29.5%

19.6%

6.9%

1.3%

29.4%

20.0%

6.5%

(0.4)%

29.8%

20.2%

6.8%

2.7%

29.7%

19.1%

7.8%

3.0%

30.1%

19.1%

7.9%

602.2

640.2

632.9

645.3

669.3

5,140

307

5,131

302

7,519

298

5,568

299

5,520

294

Retail square feet (in thousands) (e)

239,539

239,963

240,054

237,847

235,721

Square footage growth (e)

Total number of stores (e)

Total number of distribution centers (e)

(a) Consisted of 53 weeks.

(0.2%)

1,792

—%

1,790

0.9%

1,793

0.9%

1,778

0.9%

1,763

(b) For 2012 and prior, includes sales generated by retail operations and credit card revenues.

(c) For 2015, includes the gain on the pharmacies and clinics transaction. For 2013, includes the gain on the receivables transaction. Refer to Form 10-K for more information.

(d) Prior year balances have been revised to reflect the impact of adopting ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs and ASU No. 2015-17, Balance Sheet

Classification of Deferred Taxes, described further in Form 10-K, Item 8, Financial Statements and Supplementary Data, Notes 20 and 23, respectively.

(e) Represents amounts attributable to continuing operations.

(f) Including current portion and short-term notes payable, net of short-term investments of $3,008 million, $1,520 million, $3 million, $75 million and $144 million in 2015, 2014, 2013, 2012 and

2011, respectively. Management believes this measure is an indicator of our level of financial leverage because short-term investments are available to pay debt maturity obligations.

(g) Effective January 15, 2015, we operate as a single segment which includes all of our continuing operations, excluding net interest expense, data breach related costs and certain other expenses
which are discretely managed.

(h) See definition of comparable sales in Form 10-K, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(i) Represents sales per square foot which is calculated using rolling four quarters average square feet. In 2015, sales per square feet decreased by approximately $2 due to the December 2015
sale of our pharmacy and clinic businesses. In 2012, sales per square foot was calculated excluding the 53rd week in order to provide a more useful comparison to other years. Using total
reported sales for 2012 (including the 53rd week) resulted in sales per square foot of $304.

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

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the fiscal year ended January 30, 2016

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from to

Commission file number 1-6049

TARGET CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota
(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

Common Stock, par value $0.0833 per share

Name of Each Exchange on Which Registered

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 x No o

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 o No x

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 x No o

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 x No o

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. x

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). See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule
126-2 of the Exchange Act.

Large accelerated filer x

Accelerated filer o Non-accelerated filer o

(Do not check if a smaller reporting company)

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of the voting stock held by non-affiliates of the registrant as of August 1, 2015 was $51,550,988,273, based on the
closing price of $81.85 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 4, 2016 were 599,982,121.

Portions of Target's Proxy Statement to be filed on or about April 25, 2016 are incorporated into Part III.

DOCUMENTS INCORPORATED BY REFERENCE

TABLE OF CONTENTS

PART I

Item 1

Item 1A

Item 1B

Item 2

Item 3

Item 4

Business

Risk Factors

Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures

Item 4A

Executive Officers

PART II

Item 5

Item 6

Item 7

Item 7A
Item 8

Item 9

Item 9A

Item 9B

PART III

Item 10

Item 11

Item 12

Item 13

Item 14

PART IV

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

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

Item 15

Exhibits, Financial Statement Schedules

Signatures

Exhibit Index

30
32

Item 1. Business

General

PART I

Target Corporation (Target, the Corporation or the Company) was incorporated in Minnesota in 1902. We offer our
customers, referred to as "guests," everyday essentials and fashionable, differentiated merchandise at discounted
prices. Our ability to deliver a preferred shopping experience to our guests is supported by our supply chain and
technology, our devotion to innovation, and our disciplined approach to managing our business and investing in future
growth. We operate as a single segment designed to enable guests to purchase products seamlessly in stores or
through our digital sales channels.

Prior to the first quarter of 2013, we operated a U.S. Credit Card Segment that offered credit to qualified guests through
our branded credit cards. In the first quarter of 2013, we sold our U.S. consumer credit card portfolio, and TD Bank
Group (TD) now underwrites, funds, and owns Target Credit Card and Target MasterCard consumer receivables in
the U.S. We perform account servicing and primary marketing functions and earn a substantial portion of the profits
generated by the portfolio. Refer to Note 9 of the Consolidated Financial Statements included in Item 8, Financial
Statements and Supplementary Data (the Financial Statements) for more information on the credit card receivables
transaction.

Prior to January 15, 2015, we operated a Canadian Segment. On January 15, 2015, we announced our exit from the
Canadian market, and Target Canada Co. and certain other wholly owned subsidiaries of Target filed for protection
(the Filing) in Canada under the Companies' Creditors Arrangement Act (CCAA) with the Ontario Superior Court of
Justice in Toronto (the Court). Following the Filing, we no longer consolidate our former Canadian retail operation.
Canadian financial results prior to the Filing are included in our financial statements and classified within discontinued
operations. See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) and Note 7 of the Financial Statements for more information.

Prior to December 16, 2015, we operated pharmacies and clinics in 1,672 and 79 of our stores, respectively. On
December 16, 2015, we sold our pharmacy and clinic businesses to CVS Pharmacy, Inc. (CVS). Following the sale,
CVS will operate the pharmacy and clinic businesses in our stores under a perpetual operating agreement, subject to
termination in limited circumstances. See MD&A and Note 6 of the Financial Statements for more information.

Discontinued operations in this Annual Report on Form 10-K refers only to our discontinued Canadian operations.

Financial Highlights

For information on key financial highlights and segment financial information, see the items referenced in Item 6,
Selected Financial Data, MD&A, and Note 30 of the Financial Statements.

Seasonality

A larger share of annual revenues and earnings traditionally occurs in the fourth quarter because it includes the peak
holiday sales period of November and December.

Merchandise

We sell a wide assortment of general merchandise and food. The majority of our general merchandise stores offer an
edited food assortment, including perishables, dry grocery, dairy, and frozen items. Nearly all of our stores larger than
170,000 square feet offer a full line of food items comparable to traditional supermarkets. Our small, flexible format
stores, generally smaller than 50,000 square feet, offer edited general merchandise and food assortments. Our digital
channels include a wide assortment of general merchandise, including many items found in our stores, along with a
complementary assortment such as additional sizes and colors sold only online.

A significant portion of our sales is from national brand merchandise. Approximately one-third of 2015 sales related to
our owned and exclusive brands, including but not limited to the following:

Owned Brands
Archer Farms®
Simply Balanced™
Boots & Barkley®
Circo®
Embark®
Gilligan & O'Malley®

Exclusive Brands
C9 by Champion®
Cherokee®
Mossimo®
Liz Lange® for Target
Kid Made Modern®

Market Pantry®
Merona®
Room Essentials®
Smith & Hawken®
Spritz™
Sutton & Dodge®

Threshold™
up & up®
Wine Cube®
Xhilaration®
Ava & Viv®
Sonia Kashuk®

DENIZEN® from Levi's®
Fieldcrest®
Genuine Kids® from OshKosh®
Just One You® made by carter's®

Nate Berkus for Target
Oh Joy!® for Target
Hand Made Modern®
Shaun White

We also sell merchandise through periodic exclusive design and creative partnerships and generate revenue from in-
store amenities such as Target Café and Target Photo, and leased or licensed departments such as Target Optical,
Portrait Studio, Starbucks, and other food service offerings. The majority of our stores also have a CVS pharmacy
from which we will generate ongoing annual, inflation adjusted occupancy-related income (see MD&A and Note 6 of
the Financial Statements for more information).

Distribution

The vast majority of merchandise is distributed to our stores through our network of 40 distribution centers. Common
carriers ship general merchandise to and from our distribution centers. Vendors or third party distributors ship certain
food items and other merchandise directly to our stores. Merchandise sold through our digital sales channels is
distributed to our guests via common carriers from our distribution centers, from vendors or third party distributors,
from our stores or through guest pick-up at our stores. Using our stores as fulfillment points allows improved product
availability and delivery times and also reduces shipping costs.

Employees

At January 30, 2016, we employed approximately 341,000 full-time, part-time and seasonal employees, referred to
as "team members." During the 2015 holiday sales period our employment levels peaked at approximately 390,000
team members. 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,
and/or length of service. These company-paid benefits include a pension plan, 401(k) plan, medical and dental plans,
disability insurance, paid vacation, tuition reimbursement, various team member assistance programs, life insurance,
and merchandise and other discounts. We believe our team member relations are good.

Working Capital

Our working capital needs are greater in the months leading up to the holiday sales period, which we typically finance
with cash flow provided by operations and short-term borrowings. Additional details are provided in the Liquidity and
Capital Resources section in MD&A.

Effective inventory management is key to our ongoing success, and we use various techniques including demand
forecasting and planning and various forms of replenishment management. We achieve effective inventory
management by staying in-stock in core product offerings, maintaining positive vendor relationships, and carefully
planning inventory levels for seasonal and apparel items to minimize markdowns.

Competition

We compete with traditional and internet retailers, including off-price general merchandise retailers, apparel retailers,
wholesale clubs, category specific retailers, drug stores, supermarkets, and other forms of retail commerce. Our ability
to positively differentiate ourselves from other retailers and provide a compelling value proposition largely determine
our competitive position within the retail industry.

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 owned brands.

Geographic Information

Virtually all of our revenues from continuing operations are generated within the United States. Through 2014, our
discontinued operations generated revenues in Canada. The vast majority of our long-lived assets are located within
the United States.

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/Investors as soon as reasonably practicable after we file such material with, or furnish it to, the U.S.
Securities and Exchange Commission (SEC). Our Corporate Governance Guidelines, Business Conduct Guide,
Corporate Social Responsibility Report, and the charters for the committees of our Board of Directors 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 many risks. Set forth below are the material risks that we face. For the convenience of the
reader, the risks are listed in the categories where those risks primarily apply, but they may also apply to other categories.

Competitive and Reputational Risks

Our continued success is dependent on positive perceptions of Target which, if eroded, could adversely affect
our business and our relationships with our guests and team members.

We believe that one of the reasons our guests prefer to shop at Target, our team members choose Target as a place
of employment and our vendors choose to do business with us is the reputation we have built over many years for
serving our four primary constituencies: guests, team members, shareholders, and the communities in which we
operate. 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. While reputations may take decades to build, any negative
incidents can quickly erode trust and confidence, particularly if they result in adverse mainstream and social media
publicity, governmental investigations, or litigation. Those types of incidents could have an adverse impact on
perceptions and lead to tangible adverse effects on our business, including consumer boycotts, lost sales, loss of new
store and technology development opportunities, or team member retention and recruiting difficulties. For example,
we experienced weaker than expected sales immediately following the announcement of a data breach that occurred
in the fourth quarter of 2013. More recently, the sale of our pharmacy and clinic assets to CVS means that CVS will
be operating clinics and pharmacies within our stores, and our guests’ perceptions of and experiences with CVS,
whether within our stores, at independent CVS locations, or otherwise may impact our reputation.

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 through a careful combination of price, merchandise assortment, store environment,
convenience, guest service, loyalty programs and marketing efforts. Our ability to create a personalized guest
experience through the collection and use of accurate and relevant guest data is important to our ability to differentiate
from other retailers. Guest perceptions regarding the cleanliness and safety of our stores, the functionality and reliability
of our digital channels, our in-stock levels, the effectiveness of our promotions, the attractiveness of our third party
offerings, such as the clinics and pharmacies owned and operated by CVS, 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 or the failure
of our strategies to drive traffic across all sales channels could have an adverse effect on our sales, gross margins,
and expenses.

We sell many products under our owned and exclusive brands. These brands are an important part of our business
because they differentiate us from other retailers, generally carry higher margins than equivalent national brand products
and represent a significant portion of our overall sales. If one or more of these brands experiences a loss of consumer
acceptance or confidence, or if we are unable to successfully protect our intellectual property rights in our owned and
exclusive brands, our sales and gross margins could be adversely affected.

The continuing migration and evolution of retailing to online and mobile channels has increased our challenges in
differentiating ourselves from other retailers. In particular, consumers are able to quickly and conveniently comparison
shop and determine real-time product availability using digital tools, which can lead to decisions based solely on price,
the functionality of the digital tools or a combination of those and other factors. We must compete by offering a consistent
and convenient shopping experience for our guests regardless of the ultimate sales channel; providing and maintaining
digital tools for our guests and team members that have the right features and are reliable and easy to use; working
with our vendors to offer unique and distinctive merchandise, offering certain services our guests desire in our stores
through third parties, such as CVS, offering a compelling guest loyalty program, and encouraging our guests to shop
with confidence with our price-match policy. Failures to effectively execute in these efforts, actions by our competitors
in response to these efforts, or failures of our vendors to manage their own channels, content and technology systems
could hurt our ability to differentiate ourselves from other retailers and, as a result, have an adverse effect on sales,
gross margins, and expenses.

If we are unable to successfully develop and maintain a relevant and reliable experience for our guests,
regardless of where our guest demand is ultimately fulfilled, our sales, results of operations and reputation
could be adversely affected.

Our business has evolved from an in-store experience to interaction with guests across multiple channels (in-store,
online, mobile and social media, among others). Our guests are using computers, tablets, mobile phones and other
devices to shop in our stores and online and provide feedback and public commentary about all aspects of our business.
We currently provide full and mobile versions of our website (Target.com), offer applications for mobile phones and
tablets, and interact with our guests through social media. Retailing is rapidly evolving so that the majority of our sales
in all of our channels are digitally enabled, and we must anticipate and meet changing guest expectations and counteract
new developments and technology investments by our competitors. Our evolving retailing efforts include implementing
new technology, software and processes to be able to fulfill guest orders directly from our vendors and from any point
within our system of stores and distribution centers. Providing flexible fulfillment options is complex and may not meet
guest expectations for accurate order fulfillment, faster and guaranteed delivery times, and low-price or free shipping.
If we are unable to attract and retain team members or contract with third parties having the specialized skills needed
to support these efforts, implement improvements to our guest‑facing technology in a timely manner, allow real-time
and accurate visibility to product availability when guests are ready to purchase, quickly and efficiently fulfill our guests
orders using the fulfillment and payment methods they demand, or provide a convenient and consistent experience
for our guests across all sales channels, 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 appeal to our guests, reliably function
as designed, integrate across all sales channels, or maintain the privacy of guest data, or if we are unable consistently
meet our guests' expectations, we may experience a loss of guest confidence and lost sales, 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 margins and
profitability could suffer.

A large part of our business is dependent on our ability to make trend‑right decisions and effectively manage our
inventory in a broad range of merchandise categories, including apparel, accessories, home décor, electronics, toys,
seasonal offerings, food and other merchandise. For example, our apparel and home décor assortment is continually
evolving and in other areas of our product assortment, including food, we are supporting guest wellness goals and
becoming more localized with items that appeal to local cultural and demographic tastes. Failure to obtain accurate
and relevant data on guest preferences, predict changing consumer tastes, preferences, spending patterns and other
lifestyle decisions, emphasize the correct categories, implement effective promotions, and personalize our offerings
to our guests may result in lost sales, spoilage, and increased inventory markdowns, which would lead to a deterioration
in our results of operations by hurting our sales, gross margins, and profitability.

Technology Investments and Infrastructure Risks

If our capital investments in technology, supply chain, new stores and remodeling existing stores do not
achieve appropriate returns, our competitive position, financial condition and results of operations may be
adversely affected.

Our business is becoming increasingly reliant on technology investments, and the returns on these investments can
be less predictable than building new stores and remodeling existing stores. We are currently making, and will continue
to make, significant technology investments to support our efforts to provide a consistent guest experience across all
sales channels, implement improvements to our guest‑facing technology, and evolve our supply chain and our inventory
management systems, information processes, and computer systems to more efficiently run our business and remain
competitive and relevant to our guests. These technology initiatives might not provide the anticipated benefits or may
provide them on a delayed schedule or at a higher cost. We must monitor and choose the right investments and
implement them at the right pace, which depends on our ability to accurately forecast our needs and is influenced by
the amount and pace of investments by our competitors. In addition, our growth also depends, in part, on our ability
to build new stores 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. Many of our expected new store
sites are smaller and non-standard footprints located in fully developed markets, which require changes to our supply
chain practices and are generally more time-consuming, expensive and uncertain undertakings than expansion into
undeveloped suburban and ex-urban markets. Targeting the wrong opportunities, failing to make the best investments,
or making an investment commitment significantly above or below our needs could result in the loss of our competitive
position and adversely impact our financial condition or results of operations.

A significant disruption in our computer systems and our inability to adequately maintain and update those
systems could adversely affect our operations and our ability to maintain guest confidence.

We rely extensively on our computer systems to manage and account for inventory, process guest transactions, manage
and maintain the privacy of guest data, communicate with our vendors and other third parties, service REDcard
accounts, summarize and analyze results, and on continued and unimpeded access to the Internet to use our computer
systems. 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 or reliably, we may incur substantial repair or replacement costs, experience data loss or theft
and impediments to our ability to manage inventories or process guest transactions, engage in additional promotional
activities to retain our guests, and encounter lost guest confidence, which could adversely affect our results of
operations.

We continually make significant technology investments that will help maintain and update our existing computer
systems. Implementing significant system changes increases the risk of computer system disruption. The potential
problems and interruptions associated with implementing technology initiatives could disrupt or reduce our operational
efficiency, and could negatively impact guest experience and guest confidence.

Data Security and Privacy Risks

If our efforts to protect the security of information about our guests, team members and vendors are
unsuccessful, we may face additional costly government enforcement actions and private litigation, and our
sales and reputation could suffer.

An important component of our business involves the receipt and storage of information about our guests, team
members, and vendors. We have programs in place to detect, contain and respond to data security incidents. However,
because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change
frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or
implement adequate preventive measures. In addition, hardware, software, or applications we develop or procure from
third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise
information security. Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third
parties with whom we do business, through fraud, trickery, or other forms of deceiving our team members, contractors,
vendors, and temporary staff.

Until the data breach in the fourth quarter of 2013, all incidents we experienced were insignificant. The data breach
we experienced in 2013 was significant and went undetected for several weeks. Both we and our vendors have
experienced data security incidents subsequent to the 2013 data breach; however, to date these other incidents have
not been material to our consolidated financial statements. Based on the prominence and notoriety of the 2013 data
breach, even minor additional data security incidents could draw greater scrutiny. If we or our vendors experience
additional significant data security breaches or fail to detect and appropriately respond to significant data security
breaches, we could be exposed to additional government enforcement actions and private litigation. In addition, our
guests could lose confidence in our ability to protect their information, which could cause them to discontinue using
our REDcards or loyalty programs, or stop shopping with us altogether.

Supply Chain and Third Party Risks

Interruptions in our supply chain or fulfillment network, increased commodity, supply chain and fulfillment
costs, or changes in our relationships with our vendors could adversely affect our gross margins, expenses
and results of operations.

We are dependent on our vendors to supply merchandise to our distribution centers, stores and our guests in a timely
and efficient manner. As we continue to add fulfillment capabilities or pursue strategies with different fulfillment
requirements, our fulfillment network becomes increasingly complex and operating it becomes more challenging. If
our fulfillment network does not operate properly or if a vendor fails to deliver on its commitments, whether due to
financial difficulties or other reasons, we could experience merchandise out-of-stocks, delivery delays or increased
delivery costs that could lead to lost sales and decreased guest confidence, and adversely affect our results of
operations.

In addition, a large portion of our merchandise is sourced, directly or indirectly, from outside the United States, with
China as our single largest source. Political or financial instability, currency fluctuations, trade restrictions, the outbreak

of pandemics, labor unrest, transport capacity and costs, port security, weather conditions, natural disasters or other
events that could slow or disrupt 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. There have been periodic labor disputes
impacting the U.S. ports that have caused us to make alternative arrangements to continue the flow of inventory, and
if these types of disputes recur or worsen, it may have a material impact on our costs or inventory supply. Changes in
the costs of procuring commodities used in our merchandise or the costs related to our supply chain, including vendor
costs, labor, fuel, tariffs, currency exchange rates and supply chain transparency initiatives, could have an adverse
effect on gross margins, expenses and results of operations. Changes in our relationships with our vendors also have
the potential to increase our expenses and adversely affect results of operations.

A disruption in relationships with third parties who provide us services in connection with certain aspects of
our business could adversely affect our operations.

We rely on third parties to support a variety of business functions, including portions of our technology development
and systems, our digital platforms and distribution network operations, credit and debit card transaction processing,
extensions of credit for our 5% REDcard Rewards loyalty program, the clinics and pharmacies operated by CVS within
our stores, the infrastructure supporting our guest contact centers, and aspects of our food offerings. If we are unable
to contract with third parties having the specialized skills needed to support those strategies or integrate their products
and services with our business, or if we fail to properly manage those third parties or if they fail to meet our performance
standards and expectations, including with respect to data security, then our reputation, sales, and results of operations
could be adversely affected. In addition, we could face increased costs associated with finding replacement providers
or hiring new team members to provide these services in-house. If our guests do not react favorably to CVS’s operations
or if our relationship with CVS is ineffective, our ability to discontinue the relationship is limited and our results of
operations may be adversely affected. In addition, if we wish to have clinics and pharmacies in any new stores, those
clinics and pharmacies must be owned and operated by CVS.

Legal, Regulatory, Global and Other External Risks

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

Virtually all of our sales are in 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 or consumer confidence could negatively affect
our business in many ways, including slowing sales growth or reduction in overall sales, and reducing gross margins.
These same considerations impact the success of our credit card program. Even though we no longer own a consumer
credit card receivables portfolio, we share in the economic performance of the credit card program with TD. Deterioration
in macroeconomic conditions could adversely affect the volume of new credit accounts, the amount of credit card
program balances and the ability of credit card holders to pay their balances. These conditions could result in us
receiving lower profit‑sharing payments.

Weather conditions where our stores are located may impact consumer shopping patterns, which alone or
together with natural disasters, particularly 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 natural disasters are more prevalent. Natural disasters in those states or in other areas where our sales are
concentrated could result in significant physical damage to or closure of one or more of our stores, distribution centers
or key vendors, and cause delays in the distribution of merchandise from our vendors to our distribution centers, stores,
and directly to guests, which could adversely affect our results of operations by increasing our costs and lowering our
sales.

We rely on a large, global and changing workforce of Target team members, contractors and temporary staffing.
If we do not effectively manage our workforce and the concentration of work in certain global locations, our
labor costs and results of operations could be adversely affected.

With approximately 341,000 team members, our workforce costs represent our largest operating expense, and our
business and regulatory compliance is dependent on our ability to attract, train, and retain the appropriate mix of
qualified team members, contractors, and temporary staffing and effectively organize and manage those resources
as our business and strategic priorities change. Many team members are in entry-level or part-time positions with
historically high turnover rates. Our ability to meet our changing 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, changing demographics, and our reputation and relevance within the labor market. If we are unable
to attract and retain adequate numbers and an appropriate mix of qualified team members, contractors and temporary
staffing, 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. 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.

We maintain a headquarters location in India where there has generally been greater political, financial, environmental
and health instability than the United States. An extended disruption of our operations in India could adversely affect
certain operations supporting stability and maintenance of our digital sales channels and information technology
development.

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.

Our failure to comply with federal, state, local, and international laws, or changes in these laws could increase
our costs, reduce our margins, and lower our sales.

Our business is subject to a wide array of laws and regulations in the United States and other countries in which we
operate. Significant workforce-related legislative changes could increase our expenses and adversely affect our
operations. Examples of possible workforce-related legislative changes 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, advance scheduling notice requirements, and health care mandates. In
addition, changes in the regulatory environment affecting privacy and information security, product safety, payment
methods and related fees, responsible sourcing, supply chain transparency, 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 other applicable laws and regulations, including wage and hour laws, the Foreign
Corrupt Practices Act and local anti-bribery 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 by increasing our costs,
reducing our margins, and lowering our sales.

Financial Risks

Changes in our effective income tax rate could adversely affect our net income.

A number of factors influence our effective income tax rate, including changes in tax law, tax treaties, interpretation of
existing laws, and our ability to sustain our reporting positions on examination. Changes in any of those factors could
change our effective tax rate, which could adversely affect our net income. In addition, our operations outside of the
United States may cause greater volatility in our effective tax rate.

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

We are dependent on a stable, liquid, and well-functioning financial system to fund our operations and capital
investments. In particular, we have historically relied on the public debt markets to fund portions of our capital
investments and the commercial paper market and bank credit facilities to fund seasonal needs for working capital.
Our continued access to these markets depends on multiple factors including the condition of debt capital markets,
our operating performance, and maintaining strong credit ratings. If rating agencies lower our credit ratings, it could
adversely impact our ability to access the debt markets, our cost of funds, and other terms for new debt issuances.
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 reduce our ability to
meet our capital requirements or fund our working capital needs, and lead to losses on derivative positions resulting
from counterparty failures, which could adversely affect our financial position and results of operations.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

U.S. Stores at
January 30, 2016
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

Stores
22
3
46
9
272
41
20
3
1
122
52
6
6
90
31
20
18
13
16
5
39
39
55
75
6
36

Retail Sq. Ft.
(in thousands)

3,150 Montana
504 Nebraska

6,136 Nevada
1,165 New Hampshire

35,674 New Jersey
6,215 New Mexico
2,672 New York

440 North Carolina
179 North Dakota

17,137 Ohio

7,099 Oklahoma
971 Oregon
664 Pennsylvania
12,307 Rhode Island

4,174 South Carolina
2,835 South Dakota
2,473 Tennessee
1,551 Texas
2,246 Utah

630 Vermont
4,952 Virginia
5,171 Washington
6,603 West Virginia

10,634 Wisconsin
743 Wyoming

4,736

Total

U.S. Stores and Distribution Centers at January 30, 2016

Owned

Leased

Owned buildings on leased land

Total
(a)

The 40 distribution centers have a total of 51,671 thousand square feet.

Stores
7
14
17
9
44
10
71
49
4
61
16
19
65
4
19
5
31
148
13
—
58
37
6
37
2

Retail Sq. Ft.
(in thousands)
780
2,006
2,230
1,148
5,837
1,185
9,747
6,496
554
7,659
2,285
2,280
8,549
517
2,359
580
3,990
20,822
1,953
—
7,671
4,328
755
4,560
187

1,792

239,539

Stores

1,537

103

152

1,792

Distribution
Centers (a)
33

—

We own our corporate headquarters buildings located in and around Minneapolis, Minnesota, and we lease and own
additional office space in Minneapolis and elsewhere in the United States. We also lease office space in 13 countries
for various support functions. Our properties are in good condition, well maintained, and suitable to carry on our
business.

For additional information on our properties, see the Capital Expenditures section in MD&A and Notes 14 and 22 of
the Financial Statements.

Item 3. Legal Proceedings

On January 15, 2015, Target Canada Co. and certain other wholly owned subsidiaries of Target (collectively Canada
Subsidiaries), filed for protection under the Companies’ Creditors Arrangement Act with the Ontario Superior Court of
Justice in Toronto (the Court). The Canada Subsidiaries comprise substantially all of our former Canadian operations
and our former Canadian Segment. The Canada Subsidiaries are in the process of liquidation. See MD&A and Note
7 of the Financial Statements for more information.

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:

On February 27, 2015, California Attorney General sent us a letter alleging, based on a series of compliance
checks, that we have not achieved compliance with California’s environmental laws and the provisions of the
injunction that was part of a settlement reached in 2011. No formal legal action has been commenced to date.

For a description of other legal proceedings, including a discussion of litigation and government inquiries related to
the Data Breach, see Note 19 of the Financial Statements.

Item 4. Mine Safety Disclosures

Not applicable.

Item 4A. Executive Officers

Executive officers are elected by, and serve at the pleasure of, the Board of Directors. There are no family relationships
between any of the officers named and any other executive officer or member of the Board of Directors, or any
arrangement or understanding pursuant to which any person was selected as an officer.

Name
Timothy R. Baer

Title and Business Experience
Executive Vice President, Chief Legal Officer and Corporate Secretary since March 2007.

Casey L. Carl

Brian C. Cornell

Executive Vice President and Chief Strategy and Innovation Officer since December
2014. President, Omnichannel and Senior Vice President, Enterprise Strategy from July
2014 to December 2014. President, Multichannel, from November 2011 to July 2014.
From July 2008 to November 2011, Mr. Carl held several leadership positions with Target
in Merchandising.

Chairman of the Board and Chief Executive Officer since August 2014. Chief Executive
Officer of PepsiCo Americas Foods, a division of PepsiCo, Inc., a multinational food and
beverage corporation, from March 2012 to July 2014. Chief Executive Officer and
President of Sam's Club, a division of Wal-Mart Stores, Inc., a discount retailer, and
Executive Vice President of Wal-Mart Stores, Inc. from April 2009 to January 2012.

Jeffrey J. Jones II

Executive Vice President and Chief Marketing Officer since April 2012. Partner and
President of McKinney Ventures LLC, an advertising agency, from March 2006 to March
2012.

Stephanie A.
Lundquist

Michael E.
McNamara

John J. Mulligan

Janna A. Potts

Executive Vice President and Chief Human Resources Officer since February 2016.
Senior Vice President, Human Resources from January 2015 to February 2016. Senior
Vice President, Stores and Distribution Human Resources from February 2014 to
January 2015. From March 2011 to January 2014 Ms. Lundquist held several leadership
positions with Target Canada.

Executive Vice President and Chief Information Officer since June 2015. Chief
Information Officer of Tesco PLC, a multinational grocery and general merchandise
retailer, from March 2011 to May 2015.

Executive Vice President and Chief Operating Officer since September 2015. Executive
Vice President and Chief Financial Officer from April 2012 to August 2015. Senior Vice
President, Treasury, Accounting and Operations from February 2010 to March 2012.

Executive Vice President and Chief Stores Officer since January 2016. Senior Vice
President, Stores and Supply Chain Human Resources from February 2015 to January
2016. Senior Vice President, Target Canada Stores and Distribution from March 2014
to January 2015. Senior Vice President, Store Operations from August 2009 to March
2014.

Jacqueline
Hourigan Rice

Executive Vice President and Chief Risk and Compliance Officer since December 2014.
Chief Compliance Officer of General Motors Company, a vehicle manufacturer, from
March 2013 to November 2014. Executive Director, Global Ethics & Compliance of
General Motors Company from January 2010 to February 2013.

Catherine R. Smith Executive Vice President and Chief Financial Officer since September 2015. Executive
Vice President and Chief Financial Officer of Express Scripts Holding Company, a
pharmacy benefit manager, from February 2014 to December 2014. Executive Vice
President of Strategy and Chief Financial Officer for Walmart International, a division of
Wal-mart Stores Inc., a discount retailer, from March 2010 to January 2014.

Laysha L. Ward

Executive Vice President and Chief Corporate Social Responsibility Officer since
December 2014. President, Community Relations and Target Foundation from July 2008
to December 2014.

Age
55

PART II

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 4, 2016, there were 15,416 shareholders of record. Dividends declared per share and the high
and low closing common stock price for each fiscal quarter during 2015 and 2014 are disclosed in Note 31 of the
Financial Statements.

In January 2012, our Board of Directors authorized the repurchase of $5 billion of our common stock and in June 2015
expanded the program by an additional $5 billion for a total authorization of $10 billion. There is no stated expiration
for the share repurchase program. Under this program, we have repurchased 94.6 million shares of common stock
through January 30, 2016, at an average price of $69.57, for a total investment of $6.6 billion. The table below presents
information with respect to Target common stock purchases made during the three months ended January 30, 2016,
by Target or any "affiliated purchaser" of Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.

Period

November 1, 2015 through November 28, 2015

Total Number
of Shares
Purchased (a)(b)

Average
Price
Paid per
Share (a)

Total Number of
Shares Purchased
as Part of the
Current Program (a)

Dollar Value of
Shares that May
Yet Be Purchased
Under the Program

Open market and privately negotiated purchases

4,291,434

74.57

4,291,434

4,360,899,740

November 29, 2015 through January 2, 2016

Open market and privately negotiated purchases

7,442,198

72.59

7,430,138

3,821,513,044

January 3, 2016 through January 30, 2016

Open market and privately negotiated purchases

5,600,350

17,333,982

71.42

72.70

5,600,350

3,421,513,081

17,321,922

3,421,513,081

The table above includes shares reacquired upon the noncash settlement of prepaid forward contracts. At
January 30, 2016, we held asset positions in prepaid forward contracts for 0.4 million shares of our common
stock, for a total cash investment of $18.2 million, or an average per share price of $41.13. During the fourth
quarter, no shares were reacquired under such contracts. Refer to Note 27 of the Financial Statements for
further details of these contracts.
The number of shares above includes shares of common stock reacquired from team members who tendered
owned shares to i) satisfy the tax withholding on equity awards as part of our long-term incentive plans or ii)
satisfy the exercise price on stock option exercises. For the three months ended January 30, 2016, 12,060
shares were reacquired at an weighted average per share price of $71.71 pursuant to our long-term incentive
plan.

Total

(a)

(b)

Target
S&P 500 Index
Peer Group

Fiscal Years Ended

January 29,
2011
100.00 $
100.00
100.00

January 28,
2012
94.08 $

105.33
111.14

February 2,
2013
117.57 $
123.87
141.62

February 1,
2014
111.51 $
149.02
171.29

January 31,
2015
149.56 $
170.22
212.31

January 30,
2016
151.35
169.09
231.19

The graph above compares the cumulative total shareholder return on our common stock for the last five fiscal years
with the cumulative total return on the S&P 500 Index and a peer group consisting of 18 online, general merchandise,
department store, food, and specialty retailers, which are large and meaningful competitors (Amazon.com, Inc., Best
Buy Co., Inc., Costco Wholesale Corporation, CVS Health Corporation, Dollar General Corporation, The Gap, Inc.,
The Home Depot, Inc., Kohl's Corporation, The Kroger Co., Lowe's Companies, Inc., Macy's, Inc., Publix Super Markets,
Inc., Rite Aid Corporation, Sears Holdings Corporation, Staples, Inc., The TJX Companies, Inc., Walgreens Boots
Alliance, Inc., and Wal-Mart Stores, Inc.) (Peer Group). Safeway, Inc. was included in the peer group used in previous
filings, but was removed because the company was acquired during 2015 and its equity is no longer publicly traded.
The peer group is consistent with the retail peer group used for our definitive Proxy Statement to be filed on or about
April 25, 2016.

The peer group is 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 and the Peer Group on January 29, 2011, and
reinvestment of all dividends.

Item 6. Selected Financial Data

(millions, except per share data)
Sales (b)
Net Earnings / (Loss)

Continuing operations

Discontinued operations

Net earnings / (loss)

Basic Earnings / (Loss) Per Share

Continuing operations

Discontinued operations

Basic earnings / (loss) per share

Diluted Earnings / (Loss) Per Share

Continuing operations

Discontinued operations

Diluted earnings / (loss) per share

Cash dividends declared per share

As of or for the Fiscal Year Ended

2015

2014

2013

2012 (a)

2011

2010

73,785 $

72,618 $

71,279 $

73,301 $

69,865 $

67,390

3,321

3,363

2,449
(4,085)
(1,636)

5.29

0.07

5.35

5.25

0.07

5.31

2.20

3.86
(6.44)
(2.58)

3.83
(6.38)
(2.56)
1.99

2,694
(723)
1,971

4.24
(1.14)
3.10

4.20
(1.13)
3.07

1.65

3,315
(316)
2,999

5.05
(0.48)
4.57

5.00
(0.48)
4.52

1.38

3,049
(120)
2,929

4.49
(0.18)
4.31

4.46
(0.18)
4.28

1.15

2,920

—

2,920

4.03

—

4.03

4.00

—

4.00

0.92

Total assets (c)
Long-term debt, including current portion

40,262

12,760

41,172

12,725

44,325

12,494

47,878

16,260

46,260

16,127

43,240

15,638

Note: This information should be read in conjunction with MD&A and the Financial Statements.
(a)

Consisted of 53 weeks.

(b)

(c)

For 2012 and prior, includes sales generated by our retail operations and credit card revenues.

Prior year balances have been revised to reflect the impact of adopting ASU No. 2015-03, Simplifying the Presentation of Debt
Issuance Costs and ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, described further in Notes 20 and 23 to the
Financial Statements, respectively.

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

Executive Summary

Fiscal 2015 included the following notable items:

• GAAP earnings per share were $5.31, including $0.07 related to discontinued operations.
•
•

Adjusted earnings per share from continuing operations were $4.69.
Comparable sales grew 2.1 percent. Digital channel sales growth of more than 30 percent contributed 0.8
percentage points to 2015 comparable sales growth.

• We sold our pharmacy and clinic businesses to CVS, recognizing a pretax gain of $620 million.
• We paid dividends of $1,362 million in 2015, an increase of 13.0 percent above 2014.
• We returned cash through share repurchase for the first time since second quarter 2013, with purchases of $3,441

million of common stock at an average price of $77.07 per share.

Sales were $73,785 million for 2015, an increase of $1,167 million or 1.6 percent from the prior year. Earnings from
continuing operations before interest expense and income taxes in 2015 increased by $995 million or 22.0 percent
from 2014 to $5,530 million. Operating cash flow provided by continuing operations was $5,140 million, $5,131 million,
and $7,519 million for 2015, 2014, and 2013, respectively. Proceeds from the sale of our pharmacy and clinic businesses
to CVS are included in investing cash flows provided by continuing operations. In 2013, operating cash flow provided
by continuing operations includes $2.7 billion of proceeds from the sale of our U.S. credit card receivables.

Earnings Per Share From
Continuing Operations

GAAP diluted earnings per share
Adjustments
Adjusted diluted earnings per share

2015

5.25 $
(0.56)
4.69 $

2014

3.83 $
0.39
4.22 $

Percent Change

2013

2015/2014

2014/2013

4.20
0.09
4.29

37.2%

(8.8)%

11.3%

(1.7)%

Note: Adjusted diluted earnings per share from continuing operations (Adjusted EPS), a non-GAAP metric, excludes the impact of certain matters
not related to our routine retail operations and the impact of our discontinued Canadian operations. Management believes that Adjusted EPS is
meaningful to provide period-to-period comparisons of our operating results. A reconciliation of non-GAAP financial measures to GAAP measures
is provided on page 23.

We report after-tax return on invested capital (ROIC) from continuing operations as we believe ROIC provides a
meaningful measure of the effectiveness of our capital allocation over time. For the trailing twelve months ended
January 30, 2016, ROIC was 16.0 percent, compared with 12.4 percent for the trailing twelve months ended January 31,
2015. Excluding the net gain on the sale of our pharmacy and clinic businesses, ROIC was 13.9 percent for the trailing
twelve months ended January 30, 2016. A reconciliation of ROIC is provided on page 24.

Pharmacies and Clinics Transaction

In December 2015, we closed the previously announced sale of our pharmacy and clinic businesses to CVS for cash
consideration of $1.9 billion. CVS now operates the pharmacy and clinic businesses in our stores under a perpetual
operating agreement, subject to termination in limited circumstances. No profit-sharing arrangement exists, but CVS
will make an annual, inflation-adjusted occupancy-related payment to us, starting at $20 million to $25 million in the
first year of the agreement. We also entered into a development agreement with CVS through which we may jointly
develop small-format stores.

In connection with the sale, we recognized a pretax gain of $620 million, which we recorded outside of segment results
and excluded from Adjusted EPS. We also recorded deferred income of $694 million, which we will amortize into
income evenly over the 23-year weighted average remaining accounting useful life of our stores.

During 2015, we used a portion of the $1.9 billion cash consideration to repurchase shares of our common stock and
settle approximately $200 million of retained pharmacy and clinic net liabilities. We expect to use the remaining proceeds
to pay approximately $500 million of related taxes and repurchase shares.

Had this transaction closed prior to this year, our 2015 reported sales and cost of goods sold would have been lower
by approximately $3.8 billion and $3.1 billion, respectively, with no notable effect on EBITDA or EBIT.

This transaction is expected to be accretive to EPS in every period following the closing, and should add 50 basis
points or more to ROIC over time. In addition, due to the lower sales base without a significant effect on profits, we
expect the transaction to have a favorable impact on our EBITDA and EBIT margin rates.

Refer to Note 6 of the Financial Statements for additional information about the transaction.

Analysis of Results of Operations

Segment Results

Percent Change

2014/2013
2015
(dollars in millions)
1.9 %
73,785 $
Sales
2.5
51,997
Cost of sales
0.5
21,788
Gross margin
SG&A expenses (a)
0.8
14,448
(0.3)
7,340
EBITDA
6.7
2,213
Depreciation and amortization
(3.1)%
5,127 $
EBIT
Note: Effective January 15, 2015, we operate as a single segment which includes all of our continuing operations, excluding net interest expense,
data breach related costs, and certain other expenses which are discretely managed. Our segment operations are designed to enable guests to
purchase products seamlessly in stores or through our digital sales channels. Beginning with the first quarter of 2015, segment EBIT includes the
impact of the reduction of the beneficial interest asset. For comparison purposes, prior years' segment EBIT has been revised. See Note 30 of our
Financial Statements for a reconciliation of our segment results to earnings before income taxes.
(a)

2015/2014
1.6%
1.4
2.1
(0.4)
7.4
3.9
8.9%

2014
72,618 $
51,278
21,340
14,503
6,837
2,129
4,708 $

2013
71,279
50,039
21,240
14,383
6,857
1,996
4,861

SG&A includes credit card revenues and expenses for all periods presented prior to the March 2013 sale of our U.S. consumer credit
card portfolio to TD. For 2015, 2014, and 2013, SG&A also includes $641 million, $629 million, and $555 million, respectively, of net
profit-sharing income from the arrangement with TD.

Rate Analysis

Gross margin rate

SG&A expense rate

EBITDA margin rate

Depreciation and amortization expense rate

EBIT margin rate

Note: Rate analysis metrics are computed by dividing the applicable amount by sales.

Sales

2015
29.5%
19.6

9.9

3.0

6.9

2014
29.4%
20.0

9.4

2.9

6.5

2013
29.8%
20.2

9.6

2.8

6.8

Sales include merchandise sales, net of expected returns, and gift card breakage. Refer to Note 2 of the Financial
Statements for a definition of gift card breakage. The increase in 2015 and 2014 sales reflects an increase in comparable
sales of 2.1 percent and 1.3 percent, respectively, and the contribution from new stores, partially offset by a decrease
in 2015 of approximately $550 million due to the sale of our pharmacy and clinic businesses. Inflation did not materially
affect sales in any period presented.

Sales by Channel

Stores
Digital

Total

2015
96.6%
3.4
100%

2014
97.4%
2.6
100%

2013
98.0%
2.0
100%

Comparable sales is a measure that highlights the performance of our existing stores and digital channel sales by
measuring the change in sales for a period over the comparable, prior-year period of equivalent length. Comparable
sales include all sales, except sales from stores open less than 13 months, digital acquisitions operating less than one
year, stores that have been closed, and digital acquisitions that we no longer operate. Pharmacy and clinic sales for
the comparable period following the sale to CVS are excluded from the calculation. Comparable sales measures vary
across the retail industry. As a result, our comparable sales calculation is not necessarily comparable to similarly titled
measures reported by other companies.

2014
1.3%

2013
(0.4)%

Comparable Sales

Comparable sales change

Drivers of change in comparable sales:

Number of transactions

Average transaction amount

Selling price per unit

Units per transaction

Contribution to Comparable Sales Change
Stores channel comparable sales change
Digital channel contribution to comparable sales change
Total comparable sales change

Note: Amounts may not foot due to rounding.

2015
2.1%

1.3

0.8

3.3
(2.4)

2015
1.3%
0.8
2.1%

(0.2)
1.5

3.2
(1.6)

2014
0.7%
0.7
1.3%

Sales by Product Category

Percentage of Sales

(2.7)
2.3

1.6

0.7

2013
(0.7)%
0.3
(0.4)%

2013
25%
18

17
100%

2015
26%
17

17
100%

2014
25%
18

17
100%

Household essentials (a)
Hardlines (b)
Apparel and accessories (c)
Food and pet supplies (d)
Home furnishings and décor (e)
Total
(a)

(b)

(c)

(d)

(e)

Includes pharmacy, beauty, personal care, baby care, cleaning, and paper products. Pharmacy represented 5 percent, 6 percent, and 6
percent in 2015, 2014, and 2013, respectively.
Includes electronics (including video game hardware and software), music, movies, books, computer software, sporting goods, and toys.
Includes apparel for women, men, boys, girls, toddlers, infants and newborns, as well as intimate apparel, jewelry, accessories, and
shoes.
Includes dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and pet supplies.
Includes furniture, lighting, kitchenware, small appliances, home décor, bed and bath, home improvement, automotive, and seasonal
merchandise such as patio furniture and holiday décor.

Further analysis of sales metrics is infeasible due to 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.

TD offers credit to qualified guests through Target-branded credit cards: the Target Credit Card and the Target
MasterCard Credit Card (Target Credit Cards). Additionally, we offer a branded proprietary Target Debit Card.
Collectively, we refer to these products as REDcards®. Guests receive a 5 percent discount on virtually all purchases
and free shipping at Target.com when they use a REDcard. We monitor the percentage of sales that are paid for using
REDcards (REDcard Penetration) because our internal analysis has indicated that a meaningful portion of incremental
purchases on our REDcards are also incremental sales for Target.

REDcard Penetration

Target Debit Card

Target Credit Cards

Total REDcard Penetration

2015
12.1%
10.1
22.3%

2014
11.2%
9.7
20.9%

2013
9.9%
9.3
19.3%

Note: Excluding pharmacy and clinic sales, total REDcard penetration would have been 23.2 percent, 21.9 percent, and 20.1 percent for 2015,
2014, and 2013, respectively. The sum of Target Credit Cards and Target Debit Card penetration may not equal Total REDcard Penetration due to
rounding.

Gross Margin Rate

29.8%

2013
GM
Rate

0.2%

29.4%

0.2%

(0.2)%

(0.1)%

(0.6)%

Promotions

Other

2014
GM
Rate

Category
Sales
Mix

Promotions

Shipping

Other

29.5%

2015
GM
Rate

Our gross margin rate was 29.5 percent in 2015, 29.4 percent in 2014, and 29.8 percent in 2013. The 2015 increase
was primarily due to favorable category sales mix and lower promotional activity relative to the highly promotional
period in 2014 following the 2013 data breach, partially offset by the impact of increased digital channel sales.

The 2014 decrease was primarily due to promotional activity.

Selling, General and Administrative Expense Rate

20.2%

0.4%

20.0%

0.2%

19.6%

(0.8)%

(0.4)%

(0.2)%

2013
SG&A
Rate

Cost
Saving
Initiatives

Technology

Other

2014
SG&A
Rate

Cost
Saving
Initiatives

Marketing
Expense

Other

2015
SG&A
Rate

Our SG&A expense rate was 19.6 percent in 2015, 20.0 percent in 2014, and 20.2 percent in 2013. The decrease in
2015 primarily resulted from cost saving initiatives and reduced marketing expense, partially offset by investments in
other initiatives, none of which were individually significant. We will continue to seek efficiency savings to reinvest in
our business; however, we do not expect the SG&A rate to continue to decline at the pace realized during 2014 and
2015.

The decrease in 2014 was primarily related to cost savings initiatives, partially offset by investments in technology and
other initiatives, none of which were individually significant.

Store Data

Change in Number of Stores
Beginning store count
Opened
Closed
Relocated
Ending store count
Number of stores remodeled during the year

Number of Stores and
Retail Square Feet

170,000 or more sq. ft.

50,000 to 169,999 sq. ft.

0 to 49,999 sq. ft.
Total
(a)

2015
1,790
15
(13)
—
1,792
9

2014
1,793
16
(19)
—
1,790
39

Number of Stores

Retail Square Feet (a)

January 30,
2016

January 31,
2015

January 30,
2016

January 31,
2015

278

1,505

9
1,792

280

1,509

1
1,790

49,688

189,677

174
239,539

50,037

189,905

21
239,963

In thousands, reflects total square feet less office, distribution center and vacant space.

Other Performance Factors

Other Selling, General and Administrative Expenses

We recorded $216 million, $174 million, and $81 million of selling, general and administrative expenses outside of the
segment during 2015, 2014, and 2013, respectively. Additional information about these items is provided within the
Reconciliation of Non-GAAP Financial Measures to GAAP Measures on page 23 and Note 30 of the Financial
Statements.

Net Interest Expense

Net interest expense from continuing operations was $607 million, $882 million, and $1,049 million for 2015, 2014,
and 2013, respectively. Net interest expense for 2014 and 2013 included a loss on early retirement of debt of $285
million and $445 million, respectively.

Provision for Income Taxes

Our effective income tax rate from continuing operations decreased to 32.5 percent in 2015, from 33.0 percent in 2014,
driven primarily by the $112 million tax benefit that resulted from releasing the valuation allowance on a capital loss
related to our Canada exit. This benefit is recorded in continuing operations as the release of the valuation allowance
is attributable to a capital gain generated by the CVS transaction. The tax rate benefit from this valuation allowance
release was partially offset by a year-over-year decrease in the favorable resolution of various income tax matters and
the rate impact of higher pretax earnings. The resolution of various income tax matters reduced tax expense by
$8 million and $35 million in 2015 and 2014, respectively. Note 23 of the Financial Statements provides a tax rate
reconciliation.

Our effective income tax rate from continuing operations decreased to 33.0 percent in 2014, from 34.6 percent in 2013,
driven primarily by the net tax effect of our global sourcing operations and the favorable resolution of various income
tax matters. The resolution of various income tax matters reduced tax expense by $35 million and $16 million in 2014
and 2013, respectively.

Discontinued Operations

On January 15, 2015, Target Canada Co. and certain other wholly owned subsidiaries of Target (collectively Canada
Subsidiaries), comprising substantially all of our former Canadian operations and our former Canadian Segment, filed
for protection (the Filing) under the Companies' Creditors Arrangement Act (CCAA) with the Ontario Superior Court of
Justice in Toronto (the Court) and were deconsolidated. As a result, we recorded a pretax impairment loss on
deconsolidation and other charges, collectively totaling $5.1 billion. The Canada Subsidiaries are executing a liquidation
through the CCAA process.

Income from discontinued operations, net of tax, was $42 million during 2015.

In the fourth quarter of 2015, we reached settlements with two entities that controlled guaranteed leases representing
approximately 46 percent of the recorded accrual at that time. Under the settlement terms, these entities have
subrogated to us their claims against the Canada Subsidiaries. The settlement amounts were materially consistent
with our previously recorded accruals.

For more information about our Canada exit, see Note 7 of the Financial Statements.

Reconciliation of Non-GAAP Financial Measures to GAAP Measures

To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share from continuing
operations (Adjusted EPS). This metric excludes the impact of the 2015 sale of our pharmacy and clinic businesses,
the 2013 sale of our U.S. consumer credit card receivables portfolio, losses on early retirement of debt, net expenses
related to the 2013 data breach, and other matters presented below. We believe this information is useful in providing
period-to-period comparisons of the results of our continuing operations. This measure is not in accordance with, or
an alternative to, generally accepted accounting principles in the United States (GAAP). The most comparable GAAP
measure is diluted earnings per share from continuing operations. Adjusted EPS from continuing operations should
not be considered in isolation or as a substitution for analysis of our results as reported under GAAP. Other companies
may calculate non-GAAP adjusted EPS from continuing operations differently than we do, limiting the usefulness of
the measure for comparisons with other companies. Prior year amounts have been revised to present Adjusted EPS
on a continuing operations basis.

(millions, except per share data)

Pretax

GAAP diluted earnings per share from
continuing operations

Adjustments

Gain on sale (a)
Restructuring costs (b)
Loss on early retirement of debt

Data breach-related costs, net of

insurance (c)

Other (d)
Resolution of income tax matters

Adjusted diluted earnings per share
from continuing operations

2015

Net of
Tax

Per
Share
Amounts

5.25

2014

Net of
Tax

Pretax

Per
Share
Amounts

3.83

2013

Net of
Tax

Pretax

Per
Share
Amounts

4.20

$ (620) $ (487) $

(0.77) $ — $

— $

— $ (391) $ (247) $

(0.38)

138

—

0.14

—

0.04

0.05

(8)

(0.01)

—

285

145

—

173

(35)

—

0.27

0.15

0.03

(0.06)

—

445

—

270

(16)

—

0.42

0.02

0.06

(0.03)

4.69

4.22

4.29

Note: The sum of the non-GAAP adjustments may not equal the total adjustment amounts due to rounding.
(a)

For 2015, includes the gain on the pharmacies and clinics transaction. Refer to Note 6 of the Financial Statements for more information.
For 2013, includes the gain on receivables transaction. Refer to Note 9 of the Financial Statements for more information.
Refer to Note 8 of the Financial Statements.
Refer to Note 19 of the Financial Statements.
For 2015, represents impairments related to our decision to wind down certain noncore operations. Refer to Note 16 of the Financial
Statements for more information. 2014 includes impairments of $16 million related to undeveloped land in the U.S. and $13 million of
expense related to converting co-branded card program to MasterCard. 2013 includes a $23 million workforce-reduction charge primarily
related to severance and benefits costs, a $22 million charge related to part-time team member health benefit changes, and $19 million
in impairment charges related to certain parcels of undeveloped land.

(b)

We have also disclosed after-tax return on invested capital for continuing operations (ROIC), which is a ratio based
on GAAP information, with the exception of adjustments made to capitalize operating leases. Operating leases are
capitalized as part of the ROIC calculation to control for differences in capital structure between us and our competitors.
We believe this metric provides a meaningful measure of the effectiveness of our capital allocation over time. Other
companies may calculate ROIC differently than we do, limiting the usefulness of the measure for comparisons with
other companies.

After-Tax Return on Invested Capital

Numerator

(dollars in millions)
Earnings from continuing operations before interest expense and
income taxes
+ Operating lease interest (a)(b)
Adjusted earnings from continuing operations before interest expense

and income taxes

- Income taxes (c)
Net operating profit after taxes

Trailing Twelve Months

January 30,
2016

January 31,
2015

5,530

4,535

5,617

1,827

3,790

4,624

1,524

3,100

Denominator
(dollars in millions)

Current portion of long-term debt and other borrowings

+ Noncurrent portion of long-term debt

+ Shareholders' equity
+ Capitalized operating lease obligations (b)(d)
- Cash and cash equivalents

- Net assets of discontinued operations

Invested capital
Average invested capital (e)

January 30,
2016
815

11,945

12,957

1,457

4,046

226

January 31,
2015

91 $

February 1,
2014
1,143

12,634

13,997

1,490

2,210

1,479

11,351

16,231

1,635

670

4,270

25,420

22,902

23,713

24,523 $
24,971

After-tax return on invested capital
(a) Represents the add-back to operating income driven by the hypothetical capitalization of our operating leases, using eight times our trailing
twelve months rent expense and an estimated interest rate of six percent.
(b) See the following Reconciliation of Capitalized Operating Leases table for the adjustments to our GAAP total rent expense to obtain the hypothetical
capitalization of operating leases and related operating lease interest.
(c) Calculated using the effective tax rate for continuing operations, which was 32.5 percent and 33.0 percent for the trailing twelve months ended
January 30, 2016 and January 31, 2015.
(d) Calculated as eight times our trailing twelve months rent expense.
(e) Average based on the invested capital at the end of the current period and the invested capital at the end of the prior period.
(f) Excluding the net gain on the sale of our pharmacy and clinic businesses, ROIC was 13.9 percent for the trailing twelve months ended January
30, 2016.

12.4%

16.0% (f)

Capitalized operating lease obligations and operating lease interest are not in accordance with, or an alternative for,
GAAP. The most comparable GAAP measure is total rent expense. Capitalized operating lease obligations and
operating lease interest should not be considered in isolation or as a substitution for analysis of our results as reported
under GAAP.

Reconciliation of Capitalized Operating Leases

Trailing Twelve Months

(dollars in millions)
Total rent expense

January 30,
2016

January 31,
2015

182 $

186 $

February 1,
2014
204

Capitalized operating lease obligations (total rent expense x 8)

Operating lease interest (capitalized operating lease obligations x 6%)

1,457

1,490

1,635

n/a

Analysis of Financial Condition

Liquidity and Capital Resources

Our period-end cash and cash equivalents balance increased to $4,046 million from $2,210 million in 2014, primarily
reflecting the proceeds from the sale of the pharmacy and clinic businesses. Due to the timing of the sale late in 2015,
we did not fully deploy the net proceeds by the end of 2015. Short-term investments of $3,008 million and $1,520 million
were included in cash and cash equivalents at the end of 2015 and 2014, 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 dollar limits on our
investments in individual funds or instruments.

Cash Flows

Our 2015 operations were funded by internally generated funds. Operating cash flow provided by continuing operations
was $5,140 million in 2015 compared with $5,131 million in 2014. Proceeds from the sale of our pharmacy and clinic
businesses to CVS are included in investing cash flows provided by continuing operations. These cash flows, combined
with period year-end cash position, allowed us to invest in the business, pay dividends and repurchase shares under
our share repurchase program.

Inventory

Year-end inventory was $8,601 million, compared with $8,282 million in 2014. The increase was due to investments
to drive growth in certain merchandise categories, improve in-stocks, and earlier receipts of certain merchandise.

Share Repurchases

In June 2015, our Board of Directors authorized a $5 billion expansion of our existing share repurchase program to
$10 billion. Under this program, we have repurchased 94.6 million shares of common stock through January 30, 2016,
at an average price of $69.57, for a total investment of $6.6 billion.

During 2015, we repurchased 44.7 million shares of our common stock, for a total investment of $3,441 million ($77.07
per share), including shares repurchased under accelerated share repurchase agreements. We did not repurchase
any shares on the open market during 2014. However, as described in Note 25 to the Financial Statements, we
reacquired 0.8 million shares upon the noncash settlement of prepaid forward contracts related to nonqualified deferred
compensation plans.

Dividends

We paid dividends totaling $1,362 million in 2015 and $1,205 million in 2014, an increase of 13.0 percent. We declared
dividends totaling $1,378 million ($2.20 per share) in 2015, a per share increase of 10.6 percent over 2014. We declared
dividends totaling $1,271 million ($1.99 per share) in 2014, a per share increase of 20.6 percent over 2013. We have
paid dividends every quarter since our 1967 initial public offering, and it is our intent to continue to do so in the future.

Short-term and Long-term Financing

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 and commercial paper 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 credit ratings. As of January 30,
2016, 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-
F2

If our credit ratings were lowered, our ability to access the debt markets, our cost of funds, and other terms 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 ratings will remain the same as described above.

In 2015, we funded our peak holiday sales period working capital needs through internally generated funds. In 2014,
we funded our peak holiday sales period working capital needs through internally generated funds and the issuance
of commercial paper.

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

2015

— $
—
—
—%

2014
590
129
—
0.11%

2013

1,465
408
80
0.13%

We have additional liquidity through a committed $2.25 billion revolving credit facility that expires in October 2018. No
balances were outstanding at any time during 2015, 2014, or 2013 under this 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. Additionally, at January 30, 2016, no notes or debentures contained provisions requiring
acceleration of payment upon a credit 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 credit ratings are either reduced and the resulting rating is non-investment grade, or our long-term credit
ratings are placed on watch for possible reduction and those ratings are subsequently reduced and the resulting rating
is non-investment grade.

We believe our sources of liquidity will continue to be adequate to maintain operations, finance anticipated expansion
and strategic initiatives, fund obligations incurred as a result of our exit from Canada, pay dividends, and execute
purchases under our share repurchase program for the foreseeable future. Our exit from Canada increased our after-
tax cash flows beginning in 2015. We continue to anticipate ample access to commercial paper and long-term financing.

Capital Expenditures

(millions)

Information technology, distribution and other

New stores

Store remodels and expansions

Total

2015

2014
$ 1,289 $ 1,306 $ 1,069
536

2013

115

381

281
$ 1,438 $ 1,786 $ 1,886

Capital expenditures decreased in 2015 from the prior year as we opened fewer large-format stores and realized
efficiency gains in technology, partially offset by increased guest experience and supply chain investments. Capital
expenditures were less than our initial expectations reflecting efficiency gains in technology combined with the impact
of project timing shifts as we aligned investments against specific initiatives to drive growth, invest in our supply chain,
and build out our omnichannel capabilities. Capital expenditures decreased in 2014 from the prior year due to fewer
remodels and new stores, partially offset by increased technology investments to support our omnichannel efforts and
security enhancements.

We expect capital expenditures in 2016 to return to a level comparable with 2013 and 2014.

Commitments and Contingencies

Contractual Obligations as of

Payments Due by Period

January 30, 2016

(millions)

Recorded contractual obligations:

Long-term debt (a)
Capital lease obligations (b)
Deferred compensation (c)
Real estate liabilities (d)
Tax contingencies (e)
Loss contingencies (f)

Unrecorded contractual obligations:

Interest payments – long-term debt
Operating leases (b)
Purchase obligations (g)
Real estate obligations (h)
Future contributions to retirement plans (i)

Contractual obligations
(a)

Less than

Total

1 Year

1-3

Years

3-5

Years

After 5

Years

$ 11,955 $
1,690

751 $
130

2,453 $
144

2,095 $
139

52
—

—

569

186

605

192

118

125

—
—

—

936

361

801

—
—

—

753

324

379

—

6,656

1,277

199

—
—

—

4,459

2,842

165

—

—
2,542 $

—
4,848 $

—

—
3,815 $ 15,598

499

52
—

—

6,717

3,713

1,950

227

—

$ 26,803 $

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

Represents principal payments only. See Note 20 of the Financial Statements for further information.
These payments also include $311 million and $90 million of legally binding minimum lease payments for stores that are expected to
open in 2016 or later for capital and operating leases, respectively. Capital lease obligations include interest. See Note 22 of the Financial
Statements for further information.
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.
Real estate liabilities include costs incurred but not paid related to the construction or remodeling of real estate and facilities.
Estimated tax contingencies of $215 million, including interest and penalties and primarily related to continuing operations, are not included
in the table above because we are not able to make reasonably reliable estimates of the period of cash settlement. See Note 23 of the
Financial Statements for further information.
Estimated loss contingencies, including those related to the Canada Exit and the 2013 data breach, are not included in the table above
because we are not able to make reasonably reliable estimates of the period of cash settlement. See Note 7 and Note 19 of the Financial
Statements for further information.
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.
Real estate obligations include commitments for the purchase, construction, or remodeling of real estate and facilities.
We have not included obligations under our pension plans in the contractual obligations table above because no additional amounts are
required to be funded as of January 30, 2016. Our historical practice regarding these plans has been to contribute amounts necessary
to satisfy minimum pension funding requirements, plus periodic discretionary amounts determined to be appropriate.

Off Balance Sheet Arrangements: Other than the unrecorded contractual obligations noted above, we do not have
any arrangements or relationships with entities that are not consolidated into the financial statements.

Critical Accounting Estimates

Our analysis of operations and financial condition is based on our consolidated financial statements prepared in
accordance with 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, except as discussed below regarding Canada
Exit-related costs, 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 & Finance 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 the majority of our 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. The cost of our
inventory includes the amount we pay to our suppliers to acquire inventory, freight costs incurred in connection with
the delivery of product to our distribution centers and stores, and import costs, reduced by vendor income and cash
discounts. The majority of our distribution center operating costs, including compensation and benefits, are expensed
to cost of sales in the period incurred. 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 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, including changing consumer demand, guest 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 $8,601 million and $8,282 million at January 30, 2016 and January 31, 2015,
respectively, and is further described in Note 12 of the Financial Statements.

Vendor income receivable: Cost of sales and SG&A expenses are partially offset by various forms of consideration
received from our vendors (Vendor Income). Vendor Income is earned for a variety of programs, such as volume
rebates, markdown allowances, promotions, advertising allowances, and compliance programs. We establish a
receivable for 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 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. Excluding pharmacy-related receivables, which were
insignificant at period-end, Vendor Income receivable was $379 million and $426 million at January 30, 2016 and
January 31, 2015, respectively. The Vendor Income receivable balance is described further in Note 4 of the Financial
Statements.

Long-lived assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amounts may not be recoverable. The evaluation is performed at the lowest level of identifiable
cash flows independent of other assets. An impairment loss would be recognized when estimated undiscounted future
cash flows from the operation and/or disposition of the assets are less than their carrying amount. 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. We recorded
impairments of $54 million, $124 million, and $77 million in 2015, 2014, and 2013, respectively, which are described
further in Note 14. As of January 30, 2016, a 10 percent decrease in the fair value of assets we intend to sell or close
would result in additional impairment of $7 million in 2015. Historically, we have not realized material losses upon sale
of long-lived assets.

Investments in and receivables from Canada Subsidiaries: We determined the fair value and recoverability of our
Canadian investments by comparing the estimated fair value of the underlying assets of the Canada Subsidiaries to
estimated liabilities. We estimated the fair value of the major asset classes using estimated selling price less cost to
sell, the income approach based on estimated market rents and capitalization rates, and discounted cash flow analysis
of the differential between estimated market rent and contractual rent payments, as appropriate. We also applied an
estimated liquidation discount to reflect the CCAA filing.

Outstanding liabilities include accounts payable and other liabilities, forward commitments, unsubordinated related
party payables, lease liabilities, and other potential claims. Potential claims include an accrual for the estimated probable
loss related to claims that may be asserted against the Canada Subsidiaries under certain contracts. Based on our
estimates, the fair value of liabilities exceeds the fair value of assets.

To assess the fair value and recoverability of amounts receivable from the Canada Subsidiaries, we estimated the fair
value of the underlying net assets of the Canada Subsidiaries available for distribution to their creditors in relation to
the estimated creditor claims and the priority of those claims.

Our estimates involve significant judgment and are based on currently available information, an assessment of the
validity of certain claims, and estimated payments by the Canada Subsidiaries. Our ultimate recovery is subject to the
final liquidation value of the Canada Subsidiaries and may vary significantly from our current estimates. See Note 7
of the Financial Statements for further information.

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 $498 million and $566 million at January 30, 2016 and January 31, 2015, 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 five percent increase or decrease in average claim
costs would impact our self-insurance expense by $25 million in 2015. Historically, adjustments to our estimates have
not been material. Refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk, for further disclosure
of the market risks associated with these exposures. We maintain insurance coverage to limit our exposure to certain
events, including network security matters.

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 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 appropriate. Liabilities for uncertain tax positions, including interest and penalties, were
$215 million and $195 million at January 30, 2016 and January 31, 2015, respectively, and primarily relate to continuing
operations. 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 23 of the Financial Statements.

Pension accounting: We maintain a funded qualified, defined benefit pension plan, as well as several smaller and
unfunded nonqualified plans 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 and the level
of benefits varies depending on team members' full-time or part-time status, date of hire, and/or length of service. The
benefit obligation and related expense for these plans are determined based on actuarial calculations using assumptions
about the expected long-term rate of return, the discount rate, and compensation growth rates. The assumptions, with
adjustments made for any significant plan or participant changes, are used to determine the period-end benefit obligation
and establish expense for the next year.

Our 2015 expected long-term rate of return on plan assets of 7.5 percent 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 8.4 percent, 7.2 percent, 6.8 percent, and 8.5 percent for the 5-year, 10-year, 15-year, and
20-year periods, respectively. A one percentage point decrease in our expected long-term rate of return would increase
annual expense by $35 million. Based on a change in our asset allocation policy in late 2015, our expected long-term
rate of return is 6.8 percent for 2016.

The discount rate used to determine benefit obligations is adjusted annually based on the interest rate for long-term
high-quality corporate bonds, using yields for maturities that are in line with the duration of our pension liabilities. Our
benefit obligation and related expense will fluctuate with changes in interest rates. A 0.5 percentage point decrease
to the weighted average discount rate would increase annual expense by $32 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 benefits are further described in Note 28 of the Financial Statements.

Legal and other contingencies: We are exposed to other 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. When a loss is probable, we record an accrual based on the reasonably estimable
loss or range of loss. When no point of loss is more likely than another, we record the lowest amount in the estimated

range of loss and disclose the estimated range. We do not record liabilities for reasonably possible loss contingencies,
but do disclose a range of reasonably possible losses if they are material and we are able to estimate such a range.
If we cannot provide a range of reasonably possible losses, we explain the factors that prevent us from determining
such a range. Historically, adjustments to our estimates have not been material.

We believe the accruals recorded in our consolidated financial statements properly reflect loss exposures that are both
probable and reasonably estimable. With the exception of Canada Exit-related loss exposures, we do not believe any
of the currently identified claims or litigation may materially affect 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, it may cause 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. Refer to Note 7 of the Financial Statements for
further information on the Canada Exit-related contingencies, respectively.

New Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases, to require organizations that lease assets to recognize
the rights and obligations created by those leases on the balance sheet. The new standard is effective in 2019, with
early adoption permitted. We are currently evaluating the effect the new standard will have on our financial statements.

We do not expect that any other recently issued accounting pronouncements will have a material effect on our financial
statements.

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: our financial performance,
statements regarding the adequacy of and costs associated with our sources of liquidity, the expected impact of the
pharmacies and clinics sale transaction on our financial performance and the anticipated use of proceeds, the continued
execution of our share repurchase program, our expected capital expenditures, the impact of changes in the expected
effective income tax rate on net income, the expected compliance with debt covenants, the expected impact of new
accounting pronouncements, our intentions regarding future dividends, contributions and payments related to our
pension plan, the expected returns on pension plan assets, the timing and financial impact of discontinuing
postretirement health care benefits that were offered to team members upon early retirement and prior to Medicare
eligibility, the expected timing and recognition of compensation expenses, the effects of macroeconomic conditions,
the adequacy of our reserves for general liability, workers' compensation and property loss, the expected outcome of,
and adequacy of our reserves for investigations, inquiries, claims and litigation, including those related to the 2013
data breach and discontinuing our Canadian operations, expected changes to our contractual obligations and liabilities,
the expected ability to recognize deferred tax assets and liabilities and the timing of such recognition, the process,
timing and effects of discontinuing our Canadian operations, the resolution of tax matters, changes in our assumptions
and expectations, and the expected benefits and timing of cash disbursements related to restructuring activities.

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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

At January 30, 2016, our exposure to market risk was primarily from interest rate changes on our debt obligations,
some of which are at a LIBOR-plus floating-rate. Our interest rate exposure is primarily due to differences between
our floating rate debt obligations compared to our floating rate short term investments. At January 30, 2016, our floating
rate short-term investments exceeded our floating rate debt by approximately $1,758 million. Based on our balance
sheet position at January 30, 2016, the annualized effect of a 0.1 percentage point decrease in floating interest rates
on our floating rate short-term investments, net of our debt obligations, would decrease earnings before income taxes
by approximately $2 million. In general, we expect our floating rate debt to exceed our floating rate short-term
investments over time, but that may vary in different interest rate environments. See further description of our debt
and derivative instruments in Notes 20 and 21 of the Notes to Financial Statements.

We record our general liability and workers' compensation liabilities at net present value; therefore, these liabilities
fluctuate with changes in interest rates. Based on our balance sheet position at January 30, 2016, 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 value of
our pension liabilities is inversely related to changes in interest rates. A 0.5 percentage point decrease to the weighted
average discount rate would increase annual expense by $32 million. 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
55 percent of the interest rate exposure of our funded status.

As more fully described in Note 15 and Note 27 of the 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.

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

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.

Brian C. Cornell
Chairman and Chief Executive Officer
March 11, 2016

Catherine R. Smith
Executive Vice President and
Chief Financial Officer

___________________________________________________________________________________________________________________

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 30, 2016 and January 31, 2015, and the related consolidated statements of operations, comprehensive
income, cash flows, and shareholders' investment for each of the three years in the period ended January 30, 2016. These financial
statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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 30, 2016 and January 31, 2015, and the consolidated results of their operations
and their cash flows for each of the three years in the period ended January 30, 2016, in conformity with U.S. generally accepted
accounting principles.

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 30, 2016, based on criteria established in Internal Control—
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and
our report dated March 11, 2016, expressed an unqualified opinion thereon.

Minneapolis, Minnesota
March 11, 2016

Report of Management on Internal Control over Financial Reporting

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 30, 2016, based on the framework in Internal Control—Integrated Framework (2013), issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework). 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 30, 2016, has been audited by Ernst & Young LLP, the independent
registered public accounting firm who has also audited our consolidated financial statements, as stated in their report which appears
on this page.

Brian C. Cornell
Chairman and Chief Executive Officer
March 11, 2016

Catherine R. Smith
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 30,
2016, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (2013 Framework) (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 30,
2016, 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 30, 2016 and January 31, 2015,
and the related consolidated statements of operations, comprehensive income, cash flows and shareholders' investment for each
of the three years in the period ended January 30, 2016, and our report dated March 11, 2016, expressed an unqualified opinion
thereon.

Minneapolis, Minnesota
March 11, 2016

Consolidated Statements of Operations

(millions, except per share data)
Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Depreciation and amortization
Gain on sale
Earnings from continuing operations before interest expense and income

taxes

Net interest expense
Earnings from continuing operations before income taxes
Provision for income taxes
Net earnings from continuing operations
Discontinued operations, net of tax
Net earnings / (loss)
Basic earnings / (loss) per share

Continuing operations
Discontinued operations

Net earnings / (loss) per share
Diluted earnings / (loss) per share

Continuing operations
Discontinued operations

Net earnings / (loss) per share

Weighted average common shares outstanding

Basic
Dilutive effect of share-based awards
Diluted

Antidilutive shares
Note: Per share amounts may not foot due to rounding.

See accompanying Notes to Consolidated Financial Statements.

2015
73,785 $
51,997
21,788
14,665
2,213
(620)

5,530
607
4,923
1,602
3,321
42
3,363 $

5.29 $
0.07
5.35 $

5.25 $
0.07
5.31 $

627.7
5.2
632.9
—

2014
72,618 $
51,278
21,340
14,676
2,129
—

4,535
882
3,653
1,204
2,449
(4,085)
(1,636) $

3.86 $
(6.44)
(2.58) $

3.83 $
(6.38)
(2.56) $

634.7
5.4
640.1
3.3

2013
71,279
50,039
21,240
14,465
1,996
(391)

5,170
1,049
4,121
1,427
2,694
(723)
1,971

4.24
(1.14)
3.10

4.20
(1.13)
3.07

635.1
6.7
641.8
2.3

Consolidated Statements of Comprehensive Income

(millions)

Net income / (loss)

Other comprehensive income / (loss), net of tax

Pension and other benefit liabilities, net of (benefit) / provision for taxes
of $(18), $(90), and $71

Currency translation adjustment and cash flow hedges, net of provision
for taxes of $2, $2, and $11

Other comprehensive income / (loss)

Comprehensive (loss) / income

See accompanying Notes to Consolidated Financial Statements.

2015
3,363 $

2014
(1,636) $

2013

1,971

(27)

(139)

110

(3)
(30)
3,333 $

431

292
(1,344) $

(425)
(315)
1,656

Consolidated Statements of Financial Position

(millions, except footnotes)

Assets

Cash and cash equivalents, including short-term investments of $3,008 and $1,520

Inventory

Assets of discontinued operations

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

Noncurrent assets of discontinued operations

Other noncurrent assets

Total assets

Liabilities and shareholders' investment

Accounts payable

Accrued and other current liabilities

Current portion of long-term debt and other borrowings

Liabilities of discontinued operations

Total current liabilities

Long-term debt and other borrowings

Deferred income taxes

Noncurrent liabilities of discontinued operations

Other noncurrent liabilities

Total noncurrent liabilities

Shareholders' investment

Common stock

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

Pension and other benefit liabilities

Currency translation adjustment and cash flow hedges

Total shareholders' investment

Total liabilities and shareholders' investment

January 30,
2016

January 31,
2015

4,046 $
8,601

322

1,161

14,130

6,125

27,059

5,347

2,617

315
(16,246)
25,217

840
40,262 $

7,418 $
4,236

815

153

12,622

11,945

823

1,897

14,683

5,348

8,188

2,210

8,282

1,058

2,074

13,624

6,127

26,613

5,329

2,552

424
(15,093)
25,952

717

879

41,172

7,759

3,783

103

11,736

12,634

1,160

193

1,452

15,439

4,899

9,644

(588)
(41)
12,957
40,262 $

(561)
(38)
13,997

41,172

Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 602,226,517 shares issued and outstanding at January 30, 2016; 640,213,987
shares issued and outstanding at January 31, 2015.

Preferred Stock Authorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding at January 30, 2016 or January 31, 2015.

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Cash Flows

(millions)

Operating activities

Net earnings / (loss)

Earnings / (losses) from discontinued operations, net of tax

Net earnings from continuing operations

Adjustments to reconcile net earnings to cash provided by operations:

Depreciation and amortization

Share-based compensation expense

Deferred income taxes

Gain on sale

Loss on debt extinguishment

Noncash (gains) / losses and other, net

Changes in operating accounts:

Accounts receivable originated at Target

Proceeds on sale of accounts receivable originated at Target

Inventory

Other assets

Accounts payable and accrued liabilities

Cash provided by operating activities—continuing operations

Cash provided by / (required for) operating activities—discontinued operations

Cash provided by operations

Investing activities

Expenditures for property and equipment

Proceeds from disposal of property and equipment

Proceeds from sale of businesses

Change in accounts receivable originated at third parties

Proceeds from sale of accounts receivable originated at third parties

Cash paid for acquisitions, net of cash assumed

Other investments

Cash provided by / (required for) investing activities—continuing operations

Cash provided by / (required for) investing activities—discontinued operations

Cash provided by / (required for) investing activities

Financing activities

Change in commercial paper, net

Additions to long-term debt

Reductions of long-term debt

Dividends paid

Repurchase of stock

Stock option exercises and related tax benefit

Cash 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 (a)
Cash and cash equivalents at end of period (b)
Supplemental information

Interest paid, net of capitalized interest

Income taxes (refunded) / paid

Property and equipment acquired through capital lease obligations

2015

2014

2013

3,363 $

(1,636) $

3,321

(4,085)

2,449

1,971

(723)

2,694

2,213

2,129

1,996

115

(322)

(620)

—

(12)

—

(316)

227

534

5,140

704

5,844

(1,438)

1,875

—

489

508

—

(85)

(1,362)

(3,438)

369

(4,516)

—

1,836

2,210

—

285

—

(512)

(115)

777

5,131

(692)

4,439

106

(391)

445

157

2,703

(504)

(79)

247

7,519

(999)

6,520

(1,786)

(1,886)

—

(20)

106

(1,605)

(321)

(1,926)

(80)

1,993

(2,079)

(1,205)

—

373

(998)

—

1,515

695

—

121

3,002

(157)

130

1,280

(1,551)

(271)

(890)

—

(3,463)

(1,006)

(1,461)

456

(6,364)

(89)

784

695

1,043

1,386

132

4,046 $

2,210 $

604 $

(127)

126

871 $

1,251

(a)

(b)

Includes cash of our discontinued operations of $25 million and $59 million at February 1, 2014 and February 2, 2013, respectively.
Includes cash of our discontinued operations of $25 million at February 1, 2014.

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Shareholders' Investment

Common
Stock
Shares

Stock
Par
Value

Additional
Paid-in
Capital

Retained
Earnings

Accumulated Other
Comprehensive
Income/(Loss)

(millions, except footnotes)

February 2, 2013

Net earnings

Other comprehensive income

Dividends declared

Repurchase of stock

Stock options and awards

February 1, 2014

Net loss

Other comprehensive loss

Dividends declared

Repurchase of stock

Stock options and awards

January 31, 2015

Net earnings

Other comprehensive income

Dividends declared

Repurchase of stock

Stock options and awards

January 30, 2016

645.3 $
—

—

—
(21.9)
9.5
632.9 $
—

—

—
(0.8)
8.1
640.2 $
—

—

—
(44.7)
6.7
602.2 $

54 $
—

—

—
(2)
1
53 $
—

—

—
53 $
—

—

—
(4)
1
50 $

3,925 $ 13,155 $

—

545

1,971

—
(1,051)
(1,476)
—

4,470 $ 12,599 $

—

429
4,899 $
—

—

449
5,348 $

(1,636)
—
(1,273)
(46)
—
9,644 $
3,363

—
(1,378)
(3,441)
—
8,188 $

292

—
(315)

Total
(576) $ 16,558
1,971
(315)
— (1,051)
— (1,478)
546
—
(891) $ 16,231
— (1,636)
292
— (1,273)
(46)
—
429
(599) $ 13,997
3,363
—
(30)
(30)
— (1,378)
— (3,445)
450
—
(629) $ 12,957

—

Dividends declared per share were $2.20, $1.99, and $1.65 in 2015, 2014, and 2013, respectively.

See accompanying Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements

1. Summary of Accounting Policies

Organization We are a general merchandise retailer selling products to our guests through our stores and digital
channels.

As more fully described in Note 7, in January 2015, we announced our exit from the Canadian market and filed for
protection (the Filing) under the Companies' Creditors Arrangement Act (CCAA) with the Ontario Superior Court of
Justice in Toronto (the Court). Our prefiling financial results in Canada and subsequent expenses directly attributable
to the Canada exit are included in our financial statements and classified within discontinued operations. Discontinued
operations refers only to our discontinued Canadian operations. Subsequent to the Filing, we operate as a single
segment that includes all of our continuing operations, which are designed to enable guests to purchase products
seamlessly in stores, online, or through mobile devices.

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. As of January 15, 2015, we deconsolidated substantially all of our Canadian operations following the Filing.
See Note 7 for more information.

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 2015 ended January 30, 2016, and consisted
of 52 weeks. Fiscal 2014 ended January 31, 2015, and consisted of 52 weeks. Fiscal 2013 ended February 1, 2014,
and consisted of 52 weeks. Fiscal 2016 will end January 28, 2017, and will consist of 52 weeks.

Accounting policies Our accounting policies are disclosed in the applicable Notes to the Consolidated Financial
Statements. Certain prior-year amounts have been reclassified to conform to current year presentation.

2. Revenues

Our retail stores generally record revenue at the point of sale. Digital channel sales include shipping revenue and are
recorded upon delivery to the guest. Total revenues do not include sales tax because we are a pass-through conduit
for collecting and remitting sales taxes. Generally, guests may return national brand merchandise within 90 days of
purchase and owned and exclusive brands within one year 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 $37 million, $32 million, and $29 million in 2015,
2014, and 2013, respectively.

Revenue from gift card sales is recognized upon gift card redemption. Our gift cards do not expire. 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 any period presented.

Guests receive a 5 percent discount on virtually all purchases and receive free shipping at Target.com when they use
their REDcard. The discounts associated with loyalty programs are included as reductions in sales in our Consolidated
Statements of Operations and were $1,067 million, $943 million, and $833 million in 2015, 2014, and 2013, respectively.

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

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

Cost of Sales

Total cost of products sold including
• Freight expenses associated with moving
merchandise from our vendors to our
distribution centers and our retail stores, and
among our distribution and retail facilities
• Vendor income that is not reimbursement of
specific, incremental, and identifiable costs
Inventory shrink
Markdowns
Outbound shipping and handling expenses
associated with sales to our guests
Payment term cash discounts
Distribution center costs, including compensation
and benefits costs
Import costs

Selling, General and Administrative Expenses
Compensation and benefit costs including
• Stores
• Headquarters
Occupancy and operating costs of retail and
headquarters facilities
Advertising, offset by vendor income that is a
reimbursement of specific, incremental, and
identifiable costs
Pre-opening costs of stores and other facilities
U.S. credit cards servicing expenses and profit
sharing
Litigation and defense costs and related insurance
recovery
Other administrative costs

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. 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, which primarily consist of newspaper circulars, internet advertisements, and media broadcast, are
expensed at first showing or distribution of the advertisement.

Advertising Costs
(millions)
Gross advertising costs
Vendor income
Net advertising costs

6. Pharmacies and Clinics Transaction

2015
1,472 $
38
1,434 $

2014
1,647 $
47
1,600 $

2013
1,623
75
1,548

In December 2015, we closed the previously announced sale of our pharmacy and clinic businesses to CVS for cash
consideration of $1.9 billion, recognizing a gain of $620 million, and deferred income of $694 million. This transaction
was accounted for as a sale, and following the transaction, the inventory and other assets sold are no longer reported
in our Consolidated Statement of Financial Position.

CVS now operates the pharmacy and clinic businesses in our stores under a perpetual operating agreement. No profit
sharing arrangement exists, but CVS will make an ongoing annual, inflation-adjusted occupancy-related payment to
us, starting at $20 million to $25 million in the first year of the agreement that will be recorded as a reduction to SG&A
expense. The operating agreement may only be terminated by mutual consent of both parties, or by either party if
(i) the other party suffers an adverse event that materially and adversely harms such other party’s goodwill or reputation

that could reasonably be expected to have a material adverse effect on the reputation or goodwill of the terminating
party if it continued its association with the nonterminating party, (ii) the other party breaches its obligations, which
breach remains uncured and results in a material adverse effect on the business or operations of the nonterminating
party in Target stores, (iii) the other party files for bankruptcy protection, or (iv) the other party is acquired by or
consolidated with certain identified competitors of the terminating party. We also entered a development agreement
with CVS through which we may jointly develop small-format stores.

Gain on Pharmacies and Clinics Transaction
(millions)
Cash consideration
Less:

Deferred income (a)
Inventory
Other assets
Pretax transaction costs and contingent liabilities (b)
Pretax gain on pharmacies and clinics transaction (c)

2015

1,868

694
447
13
94
620

(a)

(b)

(c)

Represents deferred income that will be recorded as a reduction to SG&A expense evenly over the 23-year weighted average
remaining accounting useful life of our stores. As of January 30, 2016, $690 million remains in other current and other noncurrent
liabilities.
Primarily relates to professional services, contract termination charges, severance, and impairment of certain assets not sold to CVS.
Recorded outside of segment results and excluded from Adjusted EPS.

Deferred income of $694 million represents the consideration received at the close of the sale related to CVS’s leasehold
interest in the related space within our stores. We estimated the fair value of this leasehold interest using a discounted
cash flow analysis.

The pharmacy and clinic inventory and other assets sold had the following balances as of January 31, 2015:

(millions)

Inventory included in other current assets

Other current assets

Other noncurrent assets

Total

7. Canada Exit

Background

January 31,
2015

508

522

On January 15, 2015, Target Canada Co. and certain other wholly owned subsidiaries of Target (collectively Canada
Subsidiaries), comprising substantially all of our former Canadian operations and our former Canadian Segment, filed
for protection under the CCAA with the Court and were deconsolidated. As a result, we recorded a pretax impairment
loss on deconsolidation and other related charges, collectively totaling $5.1 billion. The Canada Subsidiaries are in
the process of liquidation.

Subsequent to deconsolidation, we use the cost method to account for our equity investment in the Canada Subsidiaries,
which has been reflected as zero in our Consolidated Statement of Financial Position at January 30, 2016 and January
31, 2015 based on the estimated fair value of the Canada Subsidiaries' net assets.

Income / (Loss) on Discontinued Operations

Our Canadian exit represented a strategic shift in our business. For this reason, our Canadian Segment results for
all periods prior to deconsolidation and costs to exit are classified as discontinued operations.

Income / (Loss) on Discontinued Operations
(millions)
Sales
Cost of sales
SG&A expenses
Depreciation and amortization
Interest expense
Pretax loss from operations
Pretax exit costs
Income taxes
Income / (loss) from discontinued operations

2015

— $
—
—
—
—
—
(129)
171

42 $

2014
1,902 $
1,541
909
248
73
(869)
(5,105)
1,889
(4,085) $

2013
1,317
1,121
910
227
77
(1,018)
—
295
(723)

The 2015 and 2014 Canadian pretax exit costs totaled $129 million and $5,105 million, respectively, and included the
following:

Pretax Exit Costs
(millions)
Investment impairment
Contingent liabilities
Other exit costs
Total

Investments in Canada Subsidiaries

2015

6 $

62
61
129 $

2014
4,766
240
99
5,105

Target continues to indirectly own 100% of the common stock of the Canada Subsidiaries, but has deconsolidated
those entities because Target no longer has a controlling interest. At the date of deconsolidation, we adjusted our
investment in the Canada Subsidiaries to fair value with a corresponding charge to income. Because the estimated
amount of the Canada Subsidiaries' liabilities exceed the estimated fair value of the assets available for distribution
to its creditors, the fair value of Target’s equity investment approximates zero.

Target Corporation Amounts Receivable from Canada Subsidiaries

Prior to deconsolidation, Target Corporation made loans to the Canada Subsidiaries for the purpose of funding its
operations and had accounts receivable generated in the ordinary course of business. The loans, corresponding
interest and the accounts receivable were considered intercompany transactions and eliminated in the consolidated
Target Corporation financial statements. As of the deconsolidation date, the loans, associated interest, and accounts
receivable are now considered related party transactions and have been recognized in Target Corporation's
consolidated financial statements at $320 million and $326 million at January 30, 2016 and January 31, 2015,
respectively.

Recovery Estimates and Valuation Techniques

We assessed the recoverability of amounts receivable from the Canada Subsidiaries by comparing the estimated fair
value of the underlying net assets of the Canada Subsidiaries available for distribution to their creditors in relation to
the estimated creditor claims and the priority of those claims. The net assets were valued based on the liquidation
price received by the Canada Subsidiaries, less the operating costs incurred to execute the liquidation process.
Estimated creditor claims were valued based on our estimate of probable loss related to claims submitted to the Canada
Subsidiaries. Based on our estimates, creditor claims exceed net assets.

Our estimates involve significant judgment and are based on currently available information, an assessment of the
validity of certain claims and estimated payments by the Canada Subsidiaries. Our ultimate recovery is subject to the
final liquidation value of the Canada Subsidiaries. Further, the final liquidation value and ultimate recovery by the
creditors of the Canada Subsidiaries, including Target Corporation, is likely to be impacted by the manner in which the
Target Corporation guarantees described below are resolved.

Target Corporation Contingencies

The recorded expenses include an accrual for the estimated probable loss related to claims that may be asserted
directly against us (rather than against the Canada Subsidiaries), primarily under our guarantees of certain leases of
the Canada Subsidiaries. The beneficiaries of those guarantees may seek damages or other related relief as a result
of our exit from Canada. Our probable loss estimate is based on the expectation that claims will be asserted against
us and negotiated settlements will be reached, and not on any determination that it is probable we would be found
liable were these claims to be litigated. Our estimates involve significant judgment and are based on currently available
information, an assessment of the validity of certain claims and estimated payments by the Canada Subsidiaries in
the liquidation process, including estimated payments to the beneficiaries of the guarantees.

As part of a March 2016 settlement between the Canada Subsidiaries and all of their former landlords, we have agreed
to subordinate a portion of our intercompany claims and make certain cash contributions to the estate in exchange for
a full release from obligations under guarantees of certain leases. This agreement remains subject to creditor and
Court approval. The financial impact of this agreement is materially consistent with amounts recorded in our financial
statements. If the agreement is not approved by the creditors and the Court, it is reasonably possible that future
changes to our estimates of loss and the ultimate amount paid on these claims could be material to our results of
operations in future periods. We are not able to reasonably estimate a range of possible losses in excess of the year-
end accrual because there would be significant factual and legal issues to be resolved if the agreement is not approved.
Any such losses would be reported in discontinued operations.

Recorded Assets and Liabilities

Assets and Liabilities of Discontinued Operations
(millions)

Income tax benefit
Receivables from Canada Subsidiaries (a)
Receivables under the debtor-in-possession credit facility

Total assets

Accrued liabilities

Total liabilities

(a)

Represents loans and accounts receivable from Canada Subsidiaries.

Income Taxes

January 30,
2016

January 31,
2015

77 $

1,430

320

—

326

397 $

1,775

171

171 $

296

During 2015, we recognized net tax benefits of $171 million in discontinued operations, which primarily related to our
pretax exit costs and change in the estimated tax benefit from our investment losses in Canada. During 2014, we
recognized a tax benefit of $1,627 million in discontinued operations, which primarily related to a loss on our investment
in Canada and includes other tax benefits resulting from certain asset write-offs and liabilities paid or accrued to
facilitate the liquidation. The majority of these tax benefits were received in the first quarter of 2015, and we used
substantially all of the remainder in 2015 to reduce our estimated tax payments.

8. Restructuring Initiatives

In 2015, we initiated a series of headquarters workforce reductions intended to increase organizational effectiveness
and provide cost savings that can be reinvested in our growth initiatives. As a result, we recorded the following charges
within SG&A, the vast majority of which required cash expenditures:

Restructuring Costs (a)
(millions)
Severance
Pension and other
Total

(a)

Restructuring costs are not included in our segment results.

Accruals for restructuring costs are included in other current liabilities.

2015
128
10
138

Restructuring-Related Liabilities
(millions)
Restructuring liability as of January 31, 2015
Charges during period
Paid or otherwise settled
Restructuring liability as of January 30, 2016

9. Credit Card Receivables Transaction

Severance

Pension and
Other

— $

128
(125)

3 $

— $
10
(10)
— $

Total
—
138
(135)
3

In March 2013, we sold our entire U.S. consumer credit card portfolio to TD Bank Group (TD) and recognized a gain
of $391 million. This transaction was accounted for as a sale, and the receivables are no longer reported in our
Consolidated Statements of Financial Position. Consideration received included cash of $5.7 billion, equal to the gross
(par) value of the outstanding receivables at the time of closing, and a $225 million beneficial interest asset.

TD underwrites, funds, and owns Target Credit Card and Target MasterCard receivables, controls risk management
policies, and oversees regulatory compliance. We perform account servicing and primary marketing functions. We
earn a substantial portion of the profits generated by the Target Credit Card and Target MasterCard portfolios. We
earned $641 million, $629 million, and $555 million of net profit-sharing income during 2015, 2014, and 2013,
respectively, which reduced SG&A expense.

10. Fair Value Measurements

Fair value measurements are reported in 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, 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

Beneficial interest asset

Other noncurrent assets
Interest rate swaps(a)
Beneficial interest asset

Liabilities
Other current liabilities
Interest rate swaps(a)
Other noncurrent liabilities
Interest rate swaps(a)

Fair Value at

Pricing
Category

January 30,
2016

January 31,
2015

Level 1 $

3,008 $

1,520

Level 2

Level 1

Level 3

Level 2

Level 3

Level 2

—

(a)

See Note 21 for additional information on interest rate swaps.

Valuation Technique

Short-term investments - Carrying value approximates fair value because maturities are less than three months.
Prepaid forward contracts - Initially valued at transaction price. Subsequently valued by reference to the market price

of Target common stock.

Interest rate swaps - Valuation models are calibrated to initial trade price. Subsequent valuations are based on

observable inputs to the valuation model (e.g., interest rates and credit spreads).

Significant Financial Instruments not Measured at Fair Value (a)

2015

2014

(millions)
Debt (b)

Carrying
Amount

Fair
Value
$ 11,859 $ 13,385 $ 11,875 $ 14,089

Carrying
Amount

Fair
Value

(a)

(b)

The carrying amounts of certain other current assets, accounts payable, and certain accrued and other current liabilities approximate fair
value due to their short-term nature.
The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for the same
or similar types of financial instruments and would be classified as Level 2. These amounts exclude unamortized swap valuation
adjustments and capital lease obligations.

Refer to Note 7 for information about fair value measurements related to our discontinued Canadian operations.

11. 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 $3,008 million and $1,520 million at January 30, 2016 and January 31, 2015,
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 $375 million and $379 million at
January 30, 2016 and January 31, 2015, respectively.

12. Inventory

The majority of our inventory is 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. The cost of our inventory includes the
amount we pay to our suppliers to acquire inventory, freight costs incurred in connection with the delivery of product
to our distribution centers and stores, and import costs, reduced by vendor income and cash discounts. The majority
of our distribution center operating costs, including compensation and benefits, are expensed in the period incurred.
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
inventory retail value. 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
taken as a reduction of the retail value of inventory.

Certain other inventory is recorded at the lower of cost or market using the cost method. The valuation allowance for
inventory valued under a cost method was not material to our Consolidated Financial Statements as of the end of
fiscal 2015 or 2014.

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 $2,261 million, $2,040 million, and $1,833 million in 2015,
2014, and 2013, respectively.

13. Other Current Assets

Other Current Assets
(millions)

Income tax and other receivables

Vendor income receivable

Prepaid expenses
Pharmacy-related receivables(a)
Pharmacy and clinic assets held for sale (b)
Other

Total
(a)

(b)

January 30,
2016

January 31,
2015

352 $
379

214

—

168
1,161 $

426

231

274

510

207

2,074

We did not sell outstanding pharmacy-related receivables as part of the pharmacies and clinics transaction. See Note 6 for more
information on the pharmacies and clinics transaction.
See Note 6 for additional information relating to the pharmacy and clinic assets held for sale.

14. 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 and capital lease amortization expense for 2015,
2014, and 2013 was $2,191 million, $2,108 million, and $1,975 million, respectively. For income tax purposes,
accelerated depreciation methods are generally used. Repair and maintenance costs are expensed as incurred. 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 (Years)
8-39
2-15
2-7

Long-lived assets are reviewed for impairment when events or changes in circumstances, such as a decision to relocate
or close a store or make significant software changes, indicate that the asset's carrying value may not be recoverable.
For asset groups classified as held for sale, the carrying value is compared to the fair value less cost to sell. We
estimate fair value by obtaining market appraisals, valuations from third party brokers, or other valuation techniques.

(b)

Substantially all of the impairments are recorded in SG&A expense on the Consolidated Statements of Operations, primarily from completed
or planned store closures and software changes.
For 2015, represents long-lived asset impairments from our decision to wind down certain noncore operations. For 2014 and 2013,
represents impairments of undeveloped land.

Impairments (a)
(millions)
Impairments included in segment SG&A
Unallocated impairments (b)
Total impairments
(a)

15. Other Noncurrent Assets

Other Noncurrent Assets
(millions)

Goodwill and intangible assets
Company-owned life insurance investments (a)
Pension asset
Interest rate swaps (b)
Other

2015

2014

50 $
4
54 $

108 $
16
124 $

2013
58
19
77

January 30,
2016

January 31,
2015

277 $
308

162
840 $

298

322

193

879

Total
(a)

(b)

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.
See Notes 10 and 21 for additional information relating to our interest rate swaps.

16. Goodwill and Intangible Assets

Goodwill totaled $133 million and $147 million at January 30, 2016 and January 31, 2015, respectively. During 2015,
we announced our decision to wind down certain noncore operations. As a result, we recorded a $35 million pretax
impairment loss, which included approximately $23 million of intangible assets and $12 million of goodwill. These costs
were included in SG&A on our Consolidated Statements of Operations, but were not included in our segment results.
No impairments were recorded in 2015, 2014 or 2013 as a result of the annual goodwill impairment tests performed.

Intangible Assets

Leasehold
Acquisition Costs

Other (a)

Total

(millions)

Gross asset

Accumulated amortization

Net intangible assets
(a)

January 30,
2016

January 31,
2015

January 30,
2016

January 31,
2015

January 30,
2016

January 31,
2015

211 $
(127)

84 $

224 $
(133)

91 $

88 $
(27)
61 $

181 $
(117)

64 $

299 $
(154)
145 $

405
(250)
155

Other intangible assets relate primarily to trademarks. We sold $91 million of gross intangible assets with accumulated depreciation of
$88 million in connection with the sale of our pharmacy and clinics businesses. See Note 6 for additional information.

We use the straight-line method to amortize leasehold acquisition costs primarily 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 27 years and 8 years, respectively, at January 30, 2016. Amortization expense was $23 million, $22 million,
and $20 million in 2015, 2014, and 2013, respectively.

Estimated Amortization Expense
(millions)

Amortization expense

17. Accounts Payable

2016

2017

2018

2019

2020

18 $

16 $

12 $

11 $

At January 30, 2016 and January 31, 2015, we reclassified book overdrafts of $534 million and $682 million,
respectively, to accounts payable and $99 million and $82 million, respectively, to accrued and other current liabilities.

18. Accrued and Other Current Liabilities

Accrued and Other Current Liabilities
(millions)

Wages and benefits

Gift card liability, net of estimated breakage

Real estate, sales, and other taxes payable

Income tax payable

Dividends payable
Straight-line rent accrual (a)
Workers' compensation and general liability (b)
Interest payable

Project costs accrual

Other

Total
(a)

(b)

January 30,
2016

January 31,
2015

884 $
644

574

502

337

262

146

951

612

550

333

255

153

738
4,236 $

758

3,783

Straight-line rent accrual represents the amount of rent expense recorded that exceeds cash payments remitted in connection with
operating leases.
We retain a substantial portion of the risk related to general liability and workers' compensation claims. Liabilities associated with these
losses include estimates of both claims filed and losses incurred but not yet reported. We estimate our ultimate cost based on analysis
of historical data and actuarial estimates. General liability and workers' compensation liabilities are recorded at our estimate of their net
present value.

19. Commitments and Contingencies

Data Breach

As previously reported, in the fourth quarter of 2013, we experienced a data breach in which an intruder stole certain
payment card and other guest information from our network (the Data Breach) which resulted in a number of claims
against us, several of which have been finally or preliminarily resolved as follows:

Payment Card Network Claims. Each of the four major payment card networks made a written claim against us
regarding the Data Breach. During 2015 we entered into settlement agreements with all four networks.

Consumer Class Action. A class action suit was asserted on behalf of a class of guests whose information was
compromised in the Data Breach. This action was settled and received Court approval during 2015, but is being
appealed by several objecting parties. We believe the settlement terms will be maintained on appeal.

Financial Institutions Class Action. A class action was asserted on behalf of financial institution issuers of credit
cards impacted by the Data Breach. This action was settled and received preliminary Court approval in the fourth
quarter of 2015. A hearing for final Court approval of the settlement is scheduled for the second quarter of our
fiscal 2016.

Actions related to the Data Breach that remain pending are: (1) one action previously filed in Canada; (2) several
putative class action suits brought on behalf of shareholders; and (3) ongoing investigations by State Attorneys General
and the Federal Trade Commission.

Our accrual for estimated probable losses is based on actual settlements reached to date and the expectation of
negotiated settlements in the pending actions. We have not based our accrual on any determination that it is probable
we would be found liable for the losses we have accrued were these claims to be litigated. While our estimates may
change as new information becomes available, we do not believe any adjustments will be material.

Expenses Incurred and Amounts Accrued

Data Breach Balance Sheet Rollforward
(millions)
Balance at February 1, 2014
Expenses incurred/insurance receivable recorded (a)
Payments made/received

Balance at January 31, 2015
Expenses incurred/insurance receivable recorded (a)
Payments made/received

Balance at January 30, 2016
(a)

Liabilities

61 $

191
(81)
171 $

39
(130)

80 $

Insurance
Receivable
44

46
(30)
60

—
(40)
20

Includes expenditures and accruals for Data Breach-related costs and expected insurance recoveries as discussed below.

We recorded $39 million of pretax Data Breach-related expenses during 2015. Along with legal and other professional
services, expenses included an adjustment to the accrual based on refined estimates of our probable exposure. We
recorded $191 million of Data Breach-related expenses, partially offset by expected insurance proceeds of $46 million,
for net expenses of $145 million during 2014. These expenses were included in our Consolidated Statements of
Operations as SG&A, but were not part of segment results.

Since the Data Breach, we have incurred $291 million of cumulative expenses, partially offset by expected insurance
recoveries of $90 million, for net cumulative expenses of $201 million.

Canada Exit

See Note 7 for information related to Canada exit-related contingent liabilities.

Other Contingencies

We are exposed to other 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 these identified claims or litigation will be material to our results of
operations, cash flows, or financial condition.

Commitments

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 $1,950 million and $2,411 million at January 30, 2016 and January 31, 2015, respectively.
These purchase obligations are primarily due within three years and recorded as liabilities when inventory is received.
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. Real estate
obligations, which include commitments for the purchase, construction or remodeling of real estate and facilities, were
$279 million and $243 million at January 30, 2016 and January 31, 2015, respectively. These real estate obligations
are primarily due within one year, a portion of which are recorded as liabilities.

We issue letters of credit and surety bonds in the ordinary course of business. Trade letters of credit totaled $1,510
million and $1,447 million at January 30, 2016 and January 31, 2015, respectively, a portion of which are reflected in
accounts payable. Standby letters of credit and surety bonds, relating primarily to insurance and regulatory
requirements, totaled $438 million and $459 million at January 30, 2016 and January 31, 2015, respectively.

20. Notes Payable and Long-Term Debt

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03
amended ASC 835-30 Interest-Imputation of Debt Interest, to simplify the presentation of deferred issuance costs by
requiring they be classified as a direct reduction of the debt balances. We have retrospectively adopted this ASU for
the year ended January 30, 2016. As a result, $63 million and $71 million of deferred issuance costs have been
reclassified from Other noncurrent assets to Long-term debt and other borrowings in our Consolidated Statements of
Financial Position as of January 30, 2016 and January 31, 2015, respectively.

At January 30, 2016, the carrying value and maturities of our debt portfolio were as follows:

Debt Maturities

(dollars in millions)

Due 2016-2020

Due 2021-2025

Due 2026-2030

Due 2031-2035

Due 2036-2040

Due 2041-2045

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 30, 2016
Rate (a)

Balance

4.8% $
3.5

6.7

6.5

6.7

4.0

4.9

5,268

2,104

244

762

2,010

1,471

11,859

859
(815)
11,945

Required Principal Payments
(millions)

Total required principal payments

2016

751 $

2017
2,251 $

2018

201 $

2019
1,001 $

2020

1,094

In June 2014, we issued $1 billion of unsecured fixed rate debt at 2.3 percent that matures in June 2019 and $1 billion
of unsecured fixed rate debt at 3.5 percent that matures in July 2024. We used proceeds from these issuances to
repurchase $725 million of debt before its maturity at a market value of $1 billion, and for general corporate purposes
including the payment of $1 billion of debt maturities. We recognized a loss of $285 million on the early retirement,
which was recorded in net interest expense in our Consolidated Statements of Operations.

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

Commercial Paper
(dollars in millions)

Maximum daily amount outstanding during the year

Average amount outstanding during the year

Amount outstanding at year-end

Weighted average interest rate

2015

— $
—

—
—%

2014

590

129

—
0.11%

2013

$ 1,465
408

80
0.13%

No balances were outstanding at any time during 2015 or 2014 under our $2.25 billion revolving credit facility that
expires in October 2018.

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.

21. Derivative Financial Instruments

Our derivative instruments primarily consist of interest rate swaps, which are used to mitigate interest rate risk. As a
result of our use of derivative instruments, we have counterparty credit exposure to large global financial institutions.
We monitor this concentration of counterparty credit risk on an ongoing basis. See Note 10 for a description of the fair
value measurement of our derivative instruments and their classification on the Consolidated Statements of Financial
Position.

As of January 30, 2016 and January 31, 2015, three interest rate swaps with notional amounts totaling $1,250 million
were designated as fair value hedges. No ineffectiveness was recognized in 2015 or 2014.

Outstanding Interest Rate Swap Summary

January 30, 2016

(dollars in millions)

Weighted average rate:

Pay

Receive

Weighted average maturity

Notional
(a)

Designated

Pay Floating

De-Designated

Pay Floating

Pay Fixed

(a)

1.7%
3.1 years

1-month LIBOR
5.7%
0.5 years

1,250

500

3.8%
1-month LIBOR

0.5 years

500

There are three designated swaps at January 30, 2016. Two swaps have floating pay rates equal to 3-month LIBOR and one swap
has a floating pay rate equal to 1-month LIBOR.

Classification and
Fair Value
(millions)

Designated:

De-designated:

Total

Assets

Liabilities

Classification

Jan 30,
2016

Jan 31,
2015

Classification

Jan 30,
2016

Jan 31,
2015

Other noncurrent assets $
Other current assets

Other noncurrent assets

27 $
12

—
39 $

—

N/A $ — $

Other current liabilities

38 Other noncurrent liabilities

—
8 $

—

Periodic payments, valuation adjustments, and amortization of gains or losses on our derivative contracts had the
following effect on our Consolidated Statements of Operations:

Derivative Contracts – Effect on Results of Operations
(millions)
Type of Contract
Interest rate swaps

Classification of (Income)/Expense
Net interest expense

2015

2014

(36) $

(32) $

2013
(29)

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 $15 million, $34
million, and $52 million, at the end of 2015, 2014, and 2013, respectively.

22. 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 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 assets 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.
Rent income received from tenants who rent properties is recorded as a reduction to SG&A expense.

Rent Expense
(millions)

Property, equipment, and software
Rent income (a)
Total rent expense
(a)

Includes rental income from CVS. See Note 6 for further discussion.

2015

2014

2013

198 $
(16)
182 $

195 $
(9)
186 $

212
(8)
204

Total capital lease interest expense was $42 million, $38 million, and $39 million in 2015, 2014, and 2013, respectively,
and is included within net interest expense on the Consolidated Statements of Operations.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50
years or more. Certain leases also include options to purchase the leased property. Assets recorded under capital
leases as of January 30, 2016 and January 31, 2015 were $735 million and $711 million, respectively. These assets
are recorded net of accumulated amortization of $321 million and $242 million as of January 30, 2016 and January
31, 2015, respectively.

Capital Leases (b) Rent Income
130 $
73

Future Minimum Lease Payments
(millions)

Operating Leases (a)

2016

2017

2018

2019

2020

After 2020

Total future minimum lease payments
Less: Interest (c)
Present value of future minimum capital

lease payments (d)

186 $
183

178

167

157

2,842
3,713 $

1,277
1,690 $
831

859

Total

295

237

231

220

209

3,833

5,025

(21) $
(19)
(18)
(17)
(17)
(286)
(378) $

Note: Minimum lease payments exclude payments to landlords for real estate taxes and common area maintenance. Minimum lease payments
also exclude payments to landlords for fixed purchase options which we believe are reasonably assured of being exercised.
(a)

Total contractual lease payments include $1,995 million related to options to extend lease terms that are reasonably assured of being
exercised and also includes $90 million of legally binding minimum lease payments for stores that are expected to open in 2016 or later.
Capital lease payments include $614 million related to options to extend lease terms that are reasonably assured of being exercised and
also includes $311 million of legally binding minimum lease payments for stores that are expected to open in 2016 or later.
Calculated using the interest rate at inception for each lease.
Includes the current portion of $59 million.

(b)

(c)

(d)

23. Income Taxes

Earnings from continuing operations before income taxes were $4,923 million, $3,653 million, and $4,121 million during
2015, 2014, and 2013, including $373 million, $261 million, and $196 million earned by our foreign entities subject to
tax outside of the U.S.

Tax Rate Reconciliation – Continuing Operations

Federal statutory rate

State income taxes, net of the federal tax benefit

International

Change in valuation allowance

Other

Effective tax rate

Provision for Income Taxes
(millions)

Current:

Federal

State

International

Total current

Deferred:

Federal

State

International

Total deferred

Total provision

2015
35.0%
3.0
(2.3)
(2.3)
(0.9)
32.5%

2014
35.0%
2.2
(2.3)
—
(1.9)
33.0%

2013
35.0%
2.4
(1.2)
—
(1.6)
34.6%

2015

2014

2013

1,652 $
265

1,924

(272)
(50)
—
(322)
1,602 $

1,074 $
116

1,197

(2)
10
(1)
7
1,204 $

1,206

150

1,369

—

1,427

Net Deferred Tax Asset/(Liability)
(millions)

Gross deferred tax assets:

Accrued and deferred compensation

Accruals and reserves not currently deductible

Self-insured benefits

Prepaid store-in-store lease income

Other

Total gross deferred tax assets

Gross deferred tax liabilities:

Property and equipment

Inventory

Other

Total gross deferred tax liabilities

Total net deferred tax liability

January 30,
2016

January 31,
2015

476 $
323

199

270

531

316

223

—

176

1,358

1,246

(1,790)
(190)
(168)
(2,148)

(790) $

(1,946)
(307)
(123)
(2,376)
(1,130)

In 2014, we incurred a tax effected capital loss of $112 million within discontinued operations from our exit from Canada.
At that time, we neither had nor anticipated sufficient capital gains to absorb this capital loss, and established a full
valuation allowance within discontinued operations. In 2015, we released the entire $112 million valuation allowance
due to a capital gain resulting from the sale of our pharmacy and clinic businesses. The benefit of the valuation
allowance release is recorded in continuing operations.

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.

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 certain ongoing operations and were $685 million at
January 30, 2016 and $328 million at January 31, 2015. It is not practicable to determine the income tax liability that
would be payable if such earnings were repatriated.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17
amended ASC 740, Income Taxes, to simplify the presentation of deferred taxes by requiring deferred tax assets and
liabilities be classified as noncurrent on the balance sheet. We have retrospectively adopted this ASU for the year
ended January 30, 2016. As a result, $289 million and $188 million of current deferred tax assets from continuing
operations have been reclassified from other current assets to deferred income taxes in our Consolidated Statements
of Financial Position as of January 30, 2016 and January 31, 2015, respectively, and $74 million and $274 million of
current deferred tax assets from discontinued operations have been reclassified from assets of discontinued operations
to noncurrent assets of discontinued operations, respectively.

We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. The U.S.
Internal Revenue Service has completed exams on the U.S. federal income tax returns for years 2012 and prior. With
few exceptions, we 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

2015

2014

2013

155 $
10

14
(26)
—
153 $

183 $
10

17
(42)
(13)
155 $

216

28
(57)
(19)
183

If we were to prevail on all unrecognized tax benefits recorded, $99 million of the $153 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 30, 2016, January 31, 2015, and February 1, 2014, we recorded a net expense/(benefit)
from accrued penalties and interest of $5 million, $(12) million, and $(1) million, respectively. As of January 30, 2016,
January 31, 2015, and February 1, 2014 total accrued interest and penalties were $44 million, $40 million, and $58
million, respectively.

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.

24. Other Noncurrent Liabilities

Other Noncurrent Liabilities
(millions)
Deferred income liability (a)
Deferred compensation
Workers' compensation and general liability (b)
Income tax

Pension and postretirement health care benefits

January 30,
2016

January 31,
2015

660 $
454

353

122

254
1,897 $

—

507

413

128

151

253

1,452

Represents deferred income related to the pharmacies and clinics transaction. See Note 6 for more information.
See footnote (b) to the Accrued and Other Current Liabilities table in Note 18 for additional detail.

25. Share Repurchase

In 2015, our Board of Directors authorized a $5 billion expansion of our existing share repurchase program to $10
billion. Under this program, we have repurchased 94.6 million shares of common stock through January 30, 2016, at
an average price of $69.57, for a total investment of $6.6 billion.

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

Total investment
(a)

2015

44.7
77.07 $
3,441 $

2014

0.8
54.07 $
41 $

2013

21.9

67.41

1,474

Includes 0.1 million, 0.8 million, and 0.2 million shares delivered upon the non-cash settlement of prepaid contracts in 2015, 2014, and
2013, respectively. These contracts had an original cash investment of $3 million, $41 million, and $14 million, respectively, and an
aggregate market value of $7 million, $46 million, and $17 million. These contracts are among the investment vehicles used to reduce
our economic exposure related to our nonqualified deferred compensation plans. Note 27 provides the details of our positions in prepaid
forward contracts.

Other

Total
(a)

(b)

26. 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. The 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 31.5
million and 14.0 million at January 30, 2016 and January 31, 2015, respectively.

Compensation expense associated with share-based awards is recognized on a straight-line basis over the shorter
of the vesting period or the minimum required service period. Share-based compensation expense for continuing
operations recognized in the Consolidated Statements of Operations was $118 million, $73 million, and $106 million
in 2015, 2014, and 2013, respectively. The related income tax benefit was $46 million, $29 million, and $41 million in
2015, 2014, and 2013, respectively.

Share information includes all outstanding awards for continuing and discontinued operations.

Restricted Stock

We issue restricted stock units and performance-based restricted stock units generally with three-year cliff vesting
from the grant date (collectively restricted stock) to certain team members. The final number of shares issued under
performance-based restricted stock units will be based on our total shareholder return relative to a retail peer group
over a three-year performance period. 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.
The fair value for restricted stock is calculated based on the stock price on the date of grant, incorporating an analysis
of the total shareholder return performance measure where applicable. The weighted average grant date fair value
for restricted stock was $73.76, $70.50, and $62.76 in 2015, 2014, and 2013, respectively.

Restricted Stock Activity

Total Nonvested Units

Restricted
Stock (a)

Grant Date
Fair Value (b)
65.11

4,713 $
1,677
(704)
(1,460)
4,226 $

73.76

65.87

61.51

69.49

January 31, 2015

Granted

Forfeited

Vested

January 30, 2016
(a)

Represents the number of shares of restricted stock, in thousands. For performance-based restricted stock units, assumes attainment
of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding
restricted stock units and performance-based restricted stock units at January 30, 2016 was 3,471 thousand.
Weighted average per unit.

(b)

The expense recognized each period is partially dependent upon our estimate of the number of shares that will ultimately
be issued. At January 30, 2016, there was $149 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 to shares of Target common stock was $90 million, $40 million, and $28 million in 2015,
2014, and 2013, respectively.

Performance Share Units

We issue performance share units to certain team members that 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 certain
measures including domestic market share change, return on invested capital, and EPS growth. In 2015 we also issued
strategic alignment performance share units to certain team members. Issuance is based on performance against
four strategic metrics identified as vital to Target's success, including total sales growth, digital channel sales growth,
EBIT growth, and return on invested capital, over a two-year performance period. 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 $74.19, $73.12, and $57.22 in 2015, 2014, and 2013, respectively.

Performance Share Unit Activity

Total Nonvested Units

Performance
Share Units (a)

Grant Date
Fair Value (b)
63.16

3,600 $
2,190
(1,728)
(39)
4,023 $

74.19

60.48

55.58

70.70

January 31, 2015

Granted

Forfeited

Vested

January 30, 2016
(a)

Represents the number of performance share units, in thousands. Assumes attainment of maximum payout rates as set forth in the
performance criteria. Applying actual or expected payout rates, the number of outstanding units at January 30, 2016 was 1,812 thousand.
Weighted average per unit.

(b)

The expense recognized each period is dependent upon our estimate of the number of shares that will ultimately be
issued. Future compensation expense for unvested awards could reach a maximum of $230 million assuming payout
of all unvested awards. The unrecognized expense is expected to be recognized over a weighted average period of
2.0 years. The fair value of performance share units vested and converted was $2 million in 2015, $11 million in 2014,
and $14 million in 2013.

Stock Options

Through 2013, we granted nonqualified stock options to certain team members that generally vest and become
exercisable annually in equal amounts over a four-year period and expire 10 years after the grant date. We previously
granted options with a ten-year term to the non-employee members of our Board of Directors that vest immediately,
but are not exercisable until one year after the grant date.

Stock Option Activity

Stock Options

Total Outstanding

Number of
Options (a)

Exercise
Price (b)

Intrinsic
Value (c)
344

January 31, 2015
Granted
Expired/forfeited
Exercised/issued
January 30, 2016
(a)
In thousands.
Weighted average per share.
Represents stock price appreciation subsequent to the grant date, in millions.

16,725 $
—
(404)
(5,821)
10,500 $

53.04 $
—
55.77
52.07
53.47 $

(b)

(c)

199

Number of
Options (a)

Exercisable
Exercise
Price (b)

12,843 $

52.02 $

Intrinsic
Value (c)
277

9,405 $

52.57 $

187

Stock Option Exercises
(millions)

Cash received for exercise price

Intrinsic value

Income tax benefit

2015

2014

303 $
159

374 $
143

2013

422

197

The weighted average remaining life of exercisable options is 4.6 years, and the weighted average remaining life of
all outstanding options is 4.7 years. The total fair value of options vested was $23 million, $37 million, and $53 million
in 2015, 2014, and 2013, respectively.

27. Defined Contribution Plans

Team members who meet 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 2,500 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 executive officers, in part to recognize the risks inherent to their participation in this plan. We also maintain
a nonqualified, unfunded deferred compensation plan that was frozen during 1996, covering approximately 55
participants, all of whom are no longer at Target. 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. Our total liability under these plans was $497 million and $539 million at January 30,
2016 and January 31, 2015, respectively.

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.

There was no change in fair value for contracts indexed to our own common stock recognized in earnings during 2015.
The total change in fair value for contracts indexed to our own common stock recognized in earnings was pretax
income/(loss) of $11 million and $(5) million in 2014 and 2013, respectively. During 2015 and 2014, we made no
investments in prepaid forward contracts in our own common stock. Adjusting our position in these investment vehicles
may involve repurchasing shares of Target common stock when settling the forward contracts as described in Note 25.
The settlement dates of these instruments are regularly renegotiated with the counterparty.

Prepaid Forward Contracts on Target
Common Stock
(millions, except per share data)
January 31, 2015
January 30, 2016

Number of
Shares

0.5 $
0.4 $

Contractual
Price Paid per
Share
41.11 $
41.11 $

Contractual
Fair Value

38 $
32 $

Total Cash
Investment
21
18

Plan Expenses

(millions)

401(k) plan matching contributions expense

Nonqualified deferred compensation plans

Benefits expense (a)
Related investment expense (income) (b)

Nonqualified plan net expense
(a)

2015

2014

224 $

220 $

2013

229

15
20 $

52
(45)

7 $

41
(23)
18

(b)

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.

28. Pension and Postretirement Health Care Plans

We have qualified defined benefit pension plans covering team members who meet age and service requirements,
including date of hire in certain circumstances. Effective January 1, 2009, our U.S. qualified defined benefit pension
plan was closed to new participants, with limited exceptions. 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 each team members' date of hire, length of service and/or team member compensation. Effective April
1, 2016, we will discontinue the postretirement health care benefits that were offered to team members upon early
retirement and prior to Medicare eligibility. This decision resulted in a $58 million reduction in the projected
postretirement health care benefit obligation and a $43 million curtailment gain recorded in SG&A during 2015. As of
January 30, 2016, we have extinguished the remaining benefit obligation related to this plan.

Change in Projected Benefit Obligation

Qualified Plans

Nonqualified Plans

(millions)

Benefit obligation at beginning of period

Service cost

Interest cost

Actuarial (gain)/loss

Participant contributions

Benefits paid

Plan amendments

Benefit obligation at end of period

Change in Plan Assets

(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

Recognition of Funded/(Underfunded) Status

(millions)

Other noncurrent assets

Accrued and other current liabilities

Other noncurrent liabilities

Net amounts recognized

2015
3,844 $
108

152
(400)
6
(155)
3
3,558 $

2014
3,173 $
111

148

556

3
(147)
—
3,844 $

2015

43 $
1

2
(4)
—
(3)
—
39 $

2014

—
(3)
—

Qualified Plans

Nonqualified Plans

2015
3,784 $
(231)
203

6
(155)
3,607

3,558

2014
3,267 $
507

154

3
(147)
3,784

3,844

49 $

(60) $

2015

2014

— $
—

—
(3)
—

39
(39) $

—

—
(3)
—

43
(43)

Qualified Plans

Nonqualified Plans

2015

2014

2015

2014

66 $
(1)
(16)
49 $

— $
(1)
(59)
(60) $

— $
(6)
(33)
(39) $

—
(4)
(39)
(43)

Amounts in Accumulated Other Comprehensive Income
(millions)

Net actuarial loss

Prior service credits

Amounts in accumulated other comprehensive income

2015
1,022 $
(57)
965 $

2014

1,018
(69)
949

Change in Accumulated Other Comprehensive Income

(millions)

February 1, 2014

Net actuarial loss

Amortization of net actuarial losses

Amortization of prior service costs and transition

January 31, 2015

Net actuarial loss

Amortization of net actuarial losses

Amortization of prior service costs and transition

January 30, 2016

Expected Amortization of Amounts in Accumulated Other Comprehensive Income
(millions)

Net actuarial loss

Prior service credits

Total amortization expense

Net Pension Benefits Expense
(millions)

Service cost benefits earned during the period

Interest cost on projected benefit obligation

Expected return on assets

Amortization of losses

Amortization of prior service cost

Settlement and special termination charges

Total

Pretax Net of Tax

712 $
291
(65)
11
949 $
87
(82)
11
965 $

430

176
(40)
7

573

53
(50)
7

583

Pretax Net of Tax

46 $
(11)
35 $

28
(7)
21

2015

2014

109 $
154
(260)
82
(11)
4
78 $

112 $
149
(233)
65
(11)
—
82 $

2013

118

137
(235)
103
(11)
3

115

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

Fair value of plan assets for pension plans with an ABO in excess of plan assets
(a)

(b)

The present value of benefits earned to date assuming no future salary growth.
The present value of benefits earned to date by plan participants, including the effect of assumed future salary increases.

2015
3,550 $
65

2014

3,834

—

Assumptions

Benefit Obligation Weighted Average Assumptions

Discount rate
Average assumed rate of compensation increase

Net Periodic Benefit Expense Weighted Average Assumptions

Discount rate

Expected long-term rate of return on plan assets

Average assumed rate of compensation increase

2015
4.70%
3.00

2014
3.87%
3.00

2015
2014
2013
3.87% 4.77% 4.40%
7.50
7.50

8.00

3.00

The weighted average assumptions used to measure net periodic benefit expense each year are the rates as of the
beginning of the year (i.e., the prior measurement date). Based on a stable asset allocation, our most recent compound
annual rate of return on qualified plans' assets was 8.4 percent, 7.2 percent, 6.8 percent, and 8.5 percent for the 5-
year, 10-year, 15-year, and 20-year time 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.

We review the expected long-term rate of return annually, 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. Our expected annualized long-term rate of return assumptions as of January 30, 2016 were
8.0 percent for domestic and international equity securities, 5.0 percent for long-duration debt securities, 8.0 percent
for balanced funds, and 9.5 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.

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

Actual Allocation

Allocation
14%
9

9
100%

2015
16%
10

9
100%

2014
19%
12

10
100%

Equity securities include our common stock in amounts substantially less than 1 percent of total plan assets as of January 30, 2016 and
January 31, 2015.
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.

Domestic equity securities (a)
International equity securities

Debt securities

Balanced funds
Other (b)
Total
(a)

(b)

In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net
Asset Value per Share (or Its Equivalent). ASU 2015-07 amended ASC 820, Fair Value Measurements and Disclosures,
to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured
using the net asset value per share practical expedient. The amendment also removes the requirement to make certain
disclosures for these investments. We have retrospectively adopted this ASU for the year ended January 30, 2016.

Fair Value Measurements

(millions)

Cash and cash equivalents
Government securities (a)
Fixed income (b)
Other (c)

Investments valued using NAV per share (d)

Cash and cash equivalents

Common collective trusts
Fixed Income

Balanced funds

Private equity funds

Other

Total plan assets
(a)

Fair Value at

Pricing
Category

January 30,
2016

January 31,
2015
7

43 $

Level 1 $
Level 2

Level 2

470

979

1,500

455

544
49

756

141

162
3,607 $

349

571

948

204

1,102
53

1,152

171

154

3,784

(b)

(c)

(d)

Investments in government securities and long-term government bonds.
Investments in corporate and municipal bonds.
Investments in derivative investments.
In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its
equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are
intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

Position
Cash and cash equivalents

Carrying value approximates fair value.

Valuation Technique

Government securities
and fixed income

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

Derivatives

Contributions

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

Option derivatives - Valued at transaction price initially. Subsequent valuations
are based on observable inputs to the valuation model (e.g., underlying
investments).

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 2015 and 2014, we made discretionary contributions of $200 million and $150
million, respectively, to our qualified defined benefit pension plans. We are not required to make any contributions in
2016. However, depending on investment performance and plan funded status, we may elect to make a contribution.

Estimated Future Benefit Payments
(millions)

2016

2017

2018

2019

2020

2021-2025

29. Accumulated Other Comprehensive Income

Pension
Benefits

169

170

172

180

188

1,068

(millions)
January 31, 2015

Other comprehensive (loss)/income before

reclassifications

Amounts reclassified from AOCI
January 30, 2016

Cash Flow
Hedges
(22)

Currency
Translation
Adjustment
(16)

—
3 (a)

(19)

(6)
—
(22)

Pension and
Other
Benefit
(561)

Total
$ (599)

(23)
(4) (b)

(588)

(29)
(1)
$ (629)

(a)

(b)

Represents gains and losses on cash flow hedges, net of $2 million of taxes, which are recorded in net interest expense on the Consolidated
Statements of Operations.
Represents amortization of pension and other benefit liabilities, net of $14 million of taxes, which is recorded in SG&A expenses on the
Consolidated Statements of Operations. See Note 28 for additional information.

30. Segment Reporting

Our segment measure of profit is used by management to evaluate the return on our investment and to make operating
decisions. Effective January 15, 2015, following the deconsolidation of our former Canadian retail operation, we have
been operating as a single segment that includes all of our continuing operations, which are designed to enable guests
to purchase products seamlessly in stores or through our digital sales channels.

Business Segment Results

(millions)

Sales

Cost of sales

Gross margin
Selling, general, and administrative expenses (e)
Depreciation and amortization

Segment profit
Gain on sale (a)
Restructuring costs (b)(e)
Data breach-related costs, net of insurance (c)(e)
Other (d)(e)
Earnings from continuing operations before interest expense and income

taxes

Net interest expense

Earnings from continuing operations before income taxes

2015

2014

2013
$ 73,785 $ 72,618 $ 71,279
50,039

51,997

51,278

21,788

14,448

2,213

5,127

620
(138)
(39)
(39)

21,340

14,503

2,129

4,708

—

—
(145)
(29)

21,240

14,383

1,996

4,861

391

—
(17)
(64)

5,530

4,535

607
4,923 $

882
3,653 $

5,170

1,049

4,121

Note: The sum of the segment amounts may not equal the total amounts due to rounding.
(a)

(b)

(c)

(d)

(e)

For 2015, includes the gain on the pharmacies and clinics transaction. Refer to Note 6 for more information. For 2013, includes the gain
on receivables transaction. Refer to Note 9 for more information.
Refer to Note 8 for more information on restructuring costs.
Refer to Note 19 for more information on data breach-related costs.
For 2015, represents impairments related to our decision to wind down certain noncore operations. For 2014, includes impairments of
$16 million related to undeveloped land in the U.S. and $13 million of expense related to converting co-branded card program to MasterCard.
For 2013, includes a $23 million workforce-reduction charge primarily related to severance and benefits costs, a $22 million charge related
to part-time team member health benefit changes, and $19 million in impairment charges related to undeveloped land in the U.S.
The sum of segment SG&A expenses, restructuring costs, data breach-related costs, and other charges equal consolidated SG&A
expenses.

Total Assets by Segment
(millions)
U.S.
Assets of discontinued operations
Unallocated assets (a)
Total assets
(a)

Represents the insurance receivable related to the 2013 data breach.

January 30,
2016
39,845 $
397

January 31,
2015
39,337
1,775

20
40,262 $

60
41,172

31. Quarterly Results (Unaudited)

Due to the seasonal nature of our business, fourth quarter operating results typically represent a substantially larger
share of total year revenues and earnings because they include our peak sales period of November and December.
We follow the same accounting policies for preparing quarterly and annual financial data. The table below summarizes
quarterly results for 2015 and 2014:

Quarterly Results

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total Year

(millions, except per share data)

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

Sales

Cost of sales

Gross margin

$ 17,119 $ 16,657

$ 17,427 $ 16,957

$ 17,613 $ 17,254

$ 21,626 $ 21,751

$ 73,785 $ 72,618

11,911

11,748

12,051

11,798

12,440

12,171

15,594

15,563

51,997

51,278

5,208

4,909

5,376

5,159

5,173

5,083

6,032

6,188

21,788

21,340

Selling, general, and administrative

expenses

Depreciation and amortization

Gain on sale

Earnings before interest expense
and income taxes

Net interest expense

Earnings from continuing operations

before income taxes

Provision for income taxes

Net earnings from continuing

operations

Discontinued operations, net of

tax

Net earnings/(loss)

Basic earnings/(loss) per share

Continuing operations

Discontinued operations

Net earnings/(loss) per share

Diluted earnings/(loss) per share

Continuing operations

Discontinued operations

Net earnings/(loss) per share

Dividends declared per share

Closing common stock price:

3,514

3,376

3,495

3,599

3,736

3,644

3,921

4,058

14,665

14,676

540

—

511

—

551

—

537

—

1,154

1,022

1,330

1,023

155

999

348

651

152

870

299

571

148

1,182

409

773

433

590

199

391

561

—

876

151

725

249

476

535

—

904

146

758

232

526

562

(620)

545

—

2,213

2,129

(620)

—

2,169

1,585

5,530

4,535

152

151

607

882

2,017

1,434

596

1,421

474

960

4,923

1,602

3,653

1,204

3,321

2,449

(16)

(153)

(20)

(157)

(174)

(3,600)

(4,085)

635 $

418

1.02 $

0.90

(0.03)

(0.24)

0.99 $

0.66

1.01 $

0.89

(0.03)

(0.24)

0.98 $

0.52 $

0.66

0.43

753 $

234

1.21 $

0.62

(0.03)

(0.25)

1.18 $

0.37

1.21 $

0.61

(0.03)

(0.25)

1.18 $

0.56 $

0.37

0.52

549 $

352

$ 1,426 $ (2,640) $ 3,363 $ (1,636)

0.76 $

0.83

0.12

(0.28)

0.88 $

0.55

0.76 $

0.82

0.11

(0.27)

0.87 $

0.56 $

0.55

0.52

2.33 $

1.51

5.29 $

3.86

0.01

(5.64)

0.07

(6.44)

2.33 $ (4.14) $

5.35 $ (2.58)

2.31 $

1.49

5.25 $

3.83

0.01

(5.59)

0.07

(6.38)

2.32 $ (4.10) $

5.31 $ (2.56)

0.56 $

0.52

2.20 $

1.99

High

Low

83.57

74.25

62.54

55.07

85.01

77.26

61.38

55.34

80.87

72.94

63.93

57.50

78.23

67.59

77.13

61.12

85.01

67.59

77.13

55.07

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.

U.S. Sales by Product Category (a)

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total Year

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

Household essentials

28%

27%

28%

27%

21%

22%

26%

25%

Hardlines

Apparel and accessories

Food and pet supplies

Home furnishings and décor

Total

100%

Supplemental information
Pharmacy (b)
(a)

As a percentage of sales.
Included in household essentials.

(b)

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

Not applicable.

Item 9A. Controls and Procedures

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the most recently completed
fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

Evaluation of Disclosure 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.

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.

Item 9B. Other Information

Not applicable.

PART III

Certain information required by Part III is incorporated by reference from Target's definitive Proxy Statement to be filed
on or about April 25, 2016. 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

The following sections of Target's Proxy Statement to be filed on or about April 25, 2016, are incorporated herein by
reference:

Item One--Election of Directors
Stock Ownership Information--Section 16(a) Beneficial Ownership Reporting Compliance

•
•
• General Information About Corporate Governance and the Board of Directors

◦
◦

Business Ethics and Conduct
Committees

• Questions and Answers About Our Annual Meeting and Voting-Question 14

See also Item 4A, Executive Officers of Part I hereof.

Item 11. Executive Compensation

The following sections of Target's Proxy Statement to be filed on or about April 25, 2016, are incorporated herein by
reference:

•
•
•

Compensation Discussion and Analysis
Compensation Tables
Human Resources and Compensation Committee Report

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

The following sections of Target's Proxy Statement to be filed on or about April 25, 2016, are incorporated herein by
reference:

•

Stock Ownership Information--

◦
◦

Beneficial Ownership of Directors and Officers
Beneficial Ownership of Target’s Largest Shareholders
Compensation Tables--Equity Compensation Plan Information

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

The following sections of Target's Proxy Statement to be filed on or about April 25, 2016, are incorporated herein by
reference:

• General Information About Corporate Governance and the Board of Directors--

◦
◦
◦

Policy on Transactions with Related Persons
Director Independence
Committees

Item 14. Principal Accountant Fees and Services

The following section of Target's Proxy Statement to be filed on or about April 25, 2016, is incorporated herein by
reference:

•

Item Two-- Ratification of Appointment of Ernst & Young LLP As Independent Registered Public Accounting
Firm-Audit and Non-Audit Fees

PART IV

Item 15. Exhibits, Financial Statement Schedules

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

Financial Statements

•

•
•

•

•
•

Consolidated Statements of Operations for the Years Ended January 30, 2016, January 31, 2015, and
February 1, 2014
Consolidated Statements of Comprehensive Income for the Years Ended January 30, 2016, January 31,
2015, and February 1, 2014
Consolidated Statements of Financial Position at January 30, 2016 and January 31, 2015
Consolidated Statements of Cash Flows for the Years Ended January 30, 2016, January 31, 2015, and
February 1, 2014
Consolidated Statements of Shareholders' Investment for the Years Ended January 30, 2016, January 31,
2015, and February 1, 2014
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements

Financial Statement Schedules

None.

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

Exhibits

(2)A †

B †

E †

F ‡

G ‡

(3)A

(4)A

(10)A *

B *

C *

D *

E *

F *

G *

H *

I *

J *

K *

L *

M *

Amended and Restated Transaction Agreement dated September 12, 2011 among Zellers Inc.,
Hudson's Bay Company, Target Corporation and Target Canada Co. (1)
First Amending Agreement dated January 20, 2012 to Amended and Restated Transaction
Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target
Canada Co. (2)
Second Amending Agreement dated June 18, 2012 to Amended and Restated Transaction
Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target
Canada Co. (3)
Third Amending Agreement dated June 18, 2012 to Amended and Restated Transaction
Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target
Canada Co. (4)
Fourth Amending Agreement dated December 14, 2012 to Amended and Restated Transaction
Agreement among Zellers Inc., Hudson's Bay Company, Target Corporation and Target
Canada Co. (5)

Purchase and Sale Agreement dated October 22, 2012 among Target National Bank, Target
Receivables LLC, Target Corporation and TD Bank USA, N.A. (6)
First Amendment to Purchase and Sale Agreement dated March 13, 2013 among Target National
Bank, Target Receivables LLC, Target Corporation and TD Bank USA, N.A. (7)
Asset Purchase Agreement dated June 12, 2015 between Target Corporation and CVS Pharmacy,
Inc. (8)
Amended and Restated Articles of Incorporation (as amended through June 9, 2010) (9)
By-laws (as amended through November 11, 2015) (10)
Indenture, dated as of August 4, 2000 between Target Corporation and Bank One Trust Company,
N.A. (11)
First Supplemental Indenture dated as of May 1, 2007 to Indenture dated as of August 4, 2000
between Target Corporation and The Bank of New York Trust Company, N.A. (as successor in
interest to Bank One Trust Company N.A.) (12)
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 (13)
Target Corporation Long-Term Incentive Plan (as amended and restated effective June 8, 2011)
(14)

Target Corporation SPP I (2011 Plan Statement) (as amended and restated effective June 8, 2011)
(15)

Target Corporation SPP II (2011 Plan Statement) (as amended and restated effective June 8,
2011) (16)
Target Corporation SPP III (2014 Plan Statement) (as amended and restated effective January 1,
2014) (17)
Target Corporation Officer Deferred Compensation Plan (as amended and restated effective
June 8, 2011) (18)
Target Corporation Officer EDCP (2015 Plan Statement) (as amended and restated effective
January 1, 2015) (19)
Target Corporation Deferred Compensation Plan Directors (20)
Target Corporation DDCP (2013 Plan Statement) (as amended and restated effective December 1,
2013) (21)
Target Corporation Officer Income Continuance Policy Statement (as amended and restated
effective June 8, 2011) (22)
Target Corporation Executive Excess Long Term Disability Plan (as restated effective January 1,
2010 (23)
Director Retirement Program (24)
Target Corporation Deferred Compensation Trust Agreement (as amended and restated effective
January 1, 2009) (25)

N *

T s

U *

V *

W *

X *

Y *

Z *

AA *

BB *

CC *

DD *

EE *

FF *

GG *

HH *

II s

JJ *
KK s

LL *

MM *

(12)

(21)

(23)

(24)

(31)A

(31)B

(32)A

(32)B

Amendment to Target Corporation Deferred Compensation Trust Agreement (as amended and
restated effective January 1, 2009) (26)
Five-Year Credit Agreement dated as of October 14, 2011 among Target Corporation, Bank of
America, N.A. as Administrative Agent and the Banks listed therein (27)
Extension and Amendment dated August 28, 2012 to Five-Year Credit Agreement among Target
Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed therein (28)
Second Extension and Amendment dated September 3, 2013 to Five-Year Credit Agreement
among Target Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed
therein (29)
Third Amendment dated January 5, 2015 to Five-Year Credit Agreement among Target
Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed therein (30)
DIP Facility Term Sheet dated January 14, 2015 among Target Corporation, as DIP Lender, and
Target Canada Co. and its subsidiaries listed therein (31)
Credit Card Program Agreement dated October 22, 2012 among Target Corporation, Target
Enterprise, Inc. and TD Bank USA, N.A. (32)
Target Corporation 2011 Long-Term Incentive Plan (33)
Form of Amended and Restated Executive Non-Qualified Stock Option Agreement (34)
Form of Executive Restricted Stock Unit Agreement

Form of Executive Performance-Based Restricted Stock Unit Agreement

Form of Executive Performance Share Unit Agreement
Form of Non-Employee Director Non-Qualified Stock Option Agreement (35)
Form of Non-Employee Director Restricted Stock Unit Agreement
Form of Cash Retention Award (36)
Advisory Period Letter to Gregg W. Steinhafel, dated May 21, 2014 (37)
Restricted Stock Unit Agreement with John J. Mulligan, effective as of May 22, 2014 (38)
Employment Offer Letter to Brian C. Cornell, dated July 26, 2014 (39)
Make-Whole Restricted Stock Unit Agreement with Brian C. Cornell, effective as of August 21,
2014 (40)
Make-Whole Performance-Based Restricted Stock Unit Agreement with Brian C. Cornell, effective
as of August 21, 2014 (41)
Aircraft Time Sharing Agreement as of March 13, 2015 among Target Corporation and Brian C.
Cornell (42)
First Amendment dated February 24, 2015 to Credit Card Program Agreement among Target
Corporation, Target Enterprise, Inc. and TD Bank USA, N.A. (43)
Amended and Restated Target Corporation 2011 Long-Term Incentive Plan (44)
Pharmacy Operating Agreement dated December 16, 2015 between Target Corporation and CVS
Pharmacy, Inc.

Short-Term Incentive Plan Letter to Tina M. Tyler, dated January 14, 2016

Non-Competition, Non-Solicitation and Confidentiality Agreement with Tina M. Tyler, effective as of
January 27, 2016

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

101.SCH

101.CAL

101.DEF

101.LAB

101.PRE

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XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation Linkbase

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, Exhibits A and B to the First Amending Agreement, and
Exhibit A to the Fourth Amending Agreement which Target Corporation agrees to furnish supplementally to the Securities and
Exchange Commission upon request.
Excludes Schedules A through N, Annex A and Exhibits A-1 through C-2 referred to in the agreement and First Amendment, which Target
Corporation agrees to furnish supplementally to the Securities and Exchange Commission upon request.
Excludes the Seller Disclosure Schedule, Exhibits B through G and Schedules I and II referred to in the agreement which Target Corporation
agrees to furnish supplementally to the Securities and Exchange Commission upon request. Exhibit A is separately filed as Exhibit (10)
KK.
Certain portions of this exhibit have been omitted pursuant to a request for confidential treatement and have been filed separately with
the Securities and Exchange Commission.
Management contract or compensation plan or arrangement required to be filed as an exhibit to this Form 10-K.
Incorporated by reference to Exhibit (2)A to Target's Form 10-Q Report for the quarter ended October 29, 2011.
Incorporated by reference to Exhibit (2)B to Target's Form 10-K Report for the year ended January 28, 2012.
Incorporated by reference to Exhibit (2)C to Target's Form 10-Q Report for the quarter ended July 28, 2012.
Incorporated by reference to Exhibit (2)D to Target's Form 10-Q Report for the quarter ended July 28, 2012.
Incorporated by reference to Exhibit (2)E to Target's Form 10-K Report for the year ended February 2, 2013.
Incorporated by reference to Exhibit (2)E to Target's Form 10-Q Report for the quarter ended October 27, 2012.
Incorporated by reference to Exhibit (2)G to Target's Form 8-K Report filed March 13, 2013.
Incorporated by reference to Exhibit (2)H to Target's Form 10-Q Report for the quarter ended August 1, 2015.
Incorporated by reference to Exhibit (3)A to Target's Form 8-K Report filed June 10, 2010.
Incorporated by reference to Exhibit (3)A to Target's Form 8-K Report filed November 11, 2015.
Incorporated by reference to Exhibit 4.1 to Target's Form 8-K Report filed August 10, 2000.
Incorporated by reference to Exhibit 4.1 to the Registrant's Form 8-K Report filed May 1, 2007.
Incorporated by reference to Appendix A to the Registrant's Proxy Statement filed April 30, 2012.
Incorporated by reference to Exhibit (10)B to Target's Form 10-Q Report for the quarter ended July 30, 2011.
Incorporated by reference to Exhibit (10)C to Target's Form 10-Q Report for the quarter ended July 30, 2011.
Incorporated by reference to Exhibit (10)D to Target's Form 10-Q Report for the quarter ended July 30, 2011.
Incorporated by reference to Exhibit (10)E to Target's Form 10-K Report for the year ended February 1, 2014.
Incorporated by reference to Exhibit (10)F to Target's Form 10-Q Report for the quarter ended July 30, 2011.
Incorporated by reference to Exhibit (10)G to Target's 10-K Report for the year ended January 31, 2015.
Incorporated by reference to Exhibit (10)I to Target's Form 10-K Report for the year ended February 3, 2007.
Incorporated by reference to Exhibit (10)I to Target's Form 10-K Report for the year ended February 1, 2014.
Incorporated by reference to Exhibit (10)J to Target's Form 10-Q Report for the quarter ended July 30, 2011.
Incorporated by reference to Exhibit (10)A to Target's Form 10-Q Report for the quarter ended October 30, 2010.
Incorporated by reference to Exhibit (10)O to Target's Form 10-K Report for the year ended January 29, 2005.
Incorporated by reference to Exhibit (10)O to Target's Form 10-K Report for the year ended January 31, 2009.
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended July 30, 2011.
Incorporated by reference to Exhibit (10)O to Target's Form 10-Q Report for the quarter ended October 29, 2011.
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended October 27, 2012.
Incorporated by reference to Exhibit (10)Y to Target’s Form 10-Q Report for the quarter ended November 2, 2013.
Incorporated by reference to Exhibit (10)R to Target's Form 10-K Report for the year ended January 31, 2015.
Incorporated by reference to Exhibit (10)S to Target's Form 10-K Report for the year ended January 31, 2015.
Incorporated by reference to Exhibit (10)X to Target’s Form 10-Q/A Report for the quarter ended May 4, 2013.
Incorporated by reference to Appendix A to Target's Proxy Statement filed April 28, 2011.
Incorporated by reference to Exhibit (10)V to Target's Form 10-K Report for the year ended January 31, 2015.
Incorporated by reference to Exhibit (10)EE to Target's Form 8-K Report filed January 11, 2012.
Incorporated by reference to Exhibit (10)W to Target’s Form 10-K Report for year ended February 2, 2013.
Incorporated by reference to Exhibit (10)AA to Target's Form 10-Q Report for the quarter ended August 2, 2014.
Incorporated by reference to Exhibit (10)BB to Target's Form 10-Q Report for the quarter ended August 2, 2014.
Incorporated by reference to Exhibit (10)CC to Target's Form 10-Q Report for the quarter ended August 2, 2014.
Incorporated by reference to Exhibit (10)DD to Target's Form 10-Q Report for the quarter ended August 2, 2014.
Incorporated by reference to Exhibit (10)EE to Target's Form 10-Q Report for the quarter ended August 2, 2014.
Incorporated by reference to Exhibit (10)HH to Target's Form 10-K Report for the year ended January 31, 2015.
Incorporated by reference to Exhibit (10)II to Target's Form 10-Q Report for the quarter ended May 2, 2015.
Incorporated by reference to Exhibit (10)JJ to Target's Form 8-K Report filed June 12, 2015.

†

‡

*
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(31)
(32)
(33)
(34)
(35)
(36)
(37)
(38)
(39)
(40)
(41)
(42)
(43)
(44)

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:

Dated: March 11, 2016

Catherine R. Smith
Executive Vice President and Chief Financial Officer

___________________________________________________________________________________________________________________

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

Dated: March 11, 2016

Brian C. Cornell
Chairman of the Board and Chief Executive Officer

Dated: March 11, 2016

Catherine R. Smith
Executive Vice President and Chief Financial Officer

Dated: March 11, 2016

Robert M. Harrison
Senior Vice President, Chief Accounting Officer
and Controller

ROXANNE S. AUSTIN
DOUGLAS M. BAKER, JR.
CALVIN DARDEN
HENRIQUE DE CASTRO
ROBERT L. EDWARDS
MELANIE L. HEALEY

DONALD R. KNAUSS
MARY E. MINNICK
ANNE M. MULCAHY
DERICA W. RICE
KENNETH L. SALAZAR
JOHN G. STUMPF

Constituting a majority of the Board of Directors

Catherine R. Smith, 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:

Dated: March 11, 2016

Catherine R. Smith
Attorney-in-fact

Exhibit Index

Exhibit
(2)A

Description
Amended and Restated Transaction Agreement dated September 12,
2011 among Zellers Inc., Hudson's Bay Company, Target Corporation and
Target Canada Co.

Manner of Filing
Incorporated by Reference

(2)B

(2)C

(2)D

(2)E

(2)F

(2)G

(2)H

(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

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.

Second Amending Agreement dated June 18, 2012 to Amended and
Restated Transaction Agreement among Zellers Inc., Hudson's Bay
Company, Target Corporation and Target Canada Co.

Third Amending Agreement dated June 18, 2012 to Amended and
Restated Transaction Agreement among Zellers Inc., Hudson's Bay
Company, Target Corporation and Target Canada Co.

Fourth Amending Agreement dated December 14, 2012 to Amended and
Restated Transaction Agreement among Zellers Inc., Hudson's Bay
Company, Target Corporation and Target Canada Co.

Purchase and Sale Agreement dated October 22, 2012 among Target
National Bank, Target Receivables LLC, Target Corporation and TD Bank
USA, N.A.

First Amendment to Purchase and Sale Agreement dated March 13, 2013
among Target National Bank, Target Receivables LLC, Target Corporation
and TD Bank USA, N.A.

Incorporated by Reference

Asset Purchase Agreement dated June 12, 2015 between Target
Corporation and CVS Pharmacy, Inc.

Incorporated by Reference

Amended and Restated Articles of Incorporation (as amended June 9,
2010)

Incorporated by Reference

By-laws (as amended through November 11, 2015)

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.)

Incorporated by Reference

Target agrees to furnish to the Commission on request copies of other
instruments with respect to long-term debt.

Filed Electronically

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 (2014 Plan Statement) (as amended and
restated effective January 1, 2014)

Incorporated by Reference

Target Corporation Officer Deferred Compensation Plan (as amended and
restated effective June 8, 2011)

Incorporated by Reference

Target Corporation Officer EDCP (2015 Plan Statement) (as amended and
restated effective January 1, 2015)

Incorporated by Reference

Target Corporation Deferred Compensation Plan Directors

Target Corporation DDCP (2013 Plan Statement) (as amended and
restated effective December 1, 2013)

Target Corporation Officer Income Continuance Policy Statement (as
amended and restated effective June 8, 2011)

Incorporated by Reference

(10)K

(10)L

(10)M

(10)N

(10)O

(10)P

(10)Q

(10)R

(10)S

(10)T

(10)U

(10)V

(10)W

(10)X

(10)Y

(10)Z

(10)AA

(10)BB

(10)CC

(10)DD

(10)EE

(10)FF

(10)GG

(10)HH

(10)II

(10)JJ

(10)KK

(10)LL

(10)MM

Target Corporation Executive Excess Long Term Disability Plan (as
restated effective January 1, 2010)

Director Retirement Program

Target Corporation Deferred Compensation Trust Agreement (as
amended and restated effective January 1, 2009)

Amendment to Target Corporation Deferred Compensation Trust
Agreement (as amended and restated effective January 1, 2009)

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

Extension and Amendment dated August 28, 2012 to Five-Year Credit
Agreement among Target Corporation, Bank of America, N.A. as
Administrative Agent and the Banks listed therein

Second Extension and Amendment dated September 3, 2013 to Five-Year
Credit Agreement among Target Corporation, Bank of America, N.A. as
Administrative Agent and the Banks listed therein

Third Amendment dated January 5, 2015 to Five-Year Credit Agreement
among Target Corporation, Bank of America, N.A. as Administrative Agent
and the Banks listed therein

DIP Facility Term Sheet dated January 14, 2015 among Target
Corporation, as DIP Lender, and Target Canada Co. and its subsidiaries
listed therein

Incorporated by Reference

Credit Card Program Agreement dated October 22, 2012 among Target
Corporation, Target Enterprise, Inc. and TD Bank USA, N.A.

Incorporated by Reference

Target Corporation 2011 Long-Term Incentive Plan

Form of Amended and Restated Executive Non-Qualified Stock Option
Agreement

Incorporated by Reference

Form of Executive Restricted Stock Unit Agreement

Filed Electronically

Form of Executive Performance-Based Restricted Stock Unit Agreement

Filed Electronically

Form of Executive Performance Share Unit Agreement

Filed Electronically

Form of Non-Employee Director Non-Qualified Stock Option Agreement

Incorporated by Reference

Form of Non-Employee Director Restricted Stock Unit Agreement

Filed Electronically

Form of Cash Retention Award

Incorporated by Reference

Advisory Period Letter to Gregg W. Steinhafel, dated May 21, 2014

Incorporated by Reference

Restricted Stock Unit Agreement with John J. Mulligan, effective as of May
22, 2014

Incorporated by Reference

Employment Offer Letter to Brian C. Cornell, dated July 26, 2014

Incorporated by Reference

Make-Whole Restricted Stock Unit Agreement with Brian C. Cornell,
effective as of August 21, 2014

Incorporated by Reference

Make-Whole Performance-Based Restricted Stock Unit Agreement with
Brian C. Cornell, effective as of August 21, 2014

Incorporated by Reference

Aircraft Time Sharing Agreement as of March 13, 2015 among Target
Corporation and Brian C. Cornell

First Amendment dated February 24, 2015 to Credit Card Program
Agreement among Target Corporation, Target Enterprise, Inc. and TD
Bank USA, N.A.

Amended and Restated Target Corporation 2011 Long-Term Incentive
Plan

Incorporated by Reference

Pharmacy Operating Agreement dated December 16, 2015 between
Target Corporation and CVS Pharmacy, Inc.

Filed Electronically

Short-Term Incentive Plan Letter to Tina M. Tyler, dated January 14, 2016 Filed Electronically

Non-Competition, Non-Solicitation and Confidentiality Agreement with
Tina M. Tyler, effective as of January 27, 2016

Filed Electronically

(12)

Statements of Computations of Ratios of Earnings to Fixed Charges

Filed Electronically

(21)

(23)

(24)

(31)A

(31)B

(32)A

(32)B

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

Filed Electronically

Certification of the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

Filed Electronically

Certification of the Chief Executive Officer Pursuant to Section 18 U.S.C.
Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed Electronically

Certification of the Chief Financial Officer Pursuant to Section 18 U.S.C.
Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed Electronically

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Filed Electronically

Shareholder Information

Annual Meeting

The Annual Meeting of Shareholders is scheduled for June 8, 2016 at 9:00 a.m. (Pacific
Daylight Time) at Segerstrom Center for the Arts – Samueli Theater, 615 Town Center Drive,
Costa Mesa, CA 92626.

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: Target Corporation,
Attn: Investor Relations, 1000 Nicollet Mall, Minneapolis, Minnesota 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 Charters, are also available on the Internet at
www.target.com/investors.

Transfer Agent, Registrar and
Dividend Disbursing Agent

Wells Fargo Shareowner Services

Trustee, Employee Savings
401(K) and Pension Plans

State Street Bank and Trust Company

Stock Exchange Listing

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 Wells Fargo Shareowner Services at
1-800-794-9871, access their website at www.shareowneronline.com or write to: Wells Fargo
Shareowner Services, P.O. Box 64874, St. Paul, Minnesota 55164-0874.

Direct Stock Purchase/Dividend
Reinvestment Plan

Wells Fargo Shareowner Services administers a direct purchase 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
Wells Fargo Shareowner Services toll free at 1-800-794-9871 or write to: Wells Fargo
Shareowner Services, P.O. Box 64874, St. Paul, Minnesota 55164-0874.

Target 2015 Annual ReportWelcome to our 2015 Annual Report
To explore key stories of the past year
and find out more about what’s in store,
visit target.com/abullseyeview. You can
also view our Annual Report online at
target.com/annualreport.