Target Announces Closing of Credit Card Portfolio Sale to TD Bank Group

  Target Announces Closing of Credit Card Portfolio Sale to TD Bank Group

Business Wire

MINNEAPOLIS -- March 13, 2013

Target Corporation (NYSE:TGT) announced today that it has completed the sale
of its entire consumer credit card portfolio to TD Bank Group (TSX and NYSE:
TD) for $5.7 billion, the gross value of the outstanding receivables (“par”)
at the time of closing. As previously announced, the two companies have
entered into a seven-year program agreement under which TD will also
underwrite, fund and own future Target Credit Card and Target Visa receivables
in the United States. Under the program agreement, TD will control risk
management policies and oversee regulatory compliance and Target will continue
to perform account servicing functions.

"We’re pleased that we’ve completed the sale of our credit card portfolio,"
said Gregg Steinhafel, chairman, president and chief executive officer of
Target Corporation. "We look forward to working with TD Bank Group, a premier
financial institution, to provide innovative financial products to our guests
and profitably grow the portfolio over time."

Under the seven-year program agreement, which applies to Target’s U.S. credit
card operations, Target will maintain the current deep integration between its
financial services operations and its retail operations. The agreement does
not have any impact on Target’s 5% REDcard Rewards program. Target team
members will continue to provide all servicing for Target Credit Card and
Target Visa accounts. The portfolio sale and program agreement are designed to
have minimal impact on Target's current cardholders, guests and the Target
team members who support financial products and services.

Accounting Considerations, Earnings Impacts and Deployment of Proceeds
As previously announced, Target’s fiscal 2012 GAAP earnings per share
reflected a pre-tax gain of $161 million related to the accounting treatment
of the consumer credit card receivables as “held for sale” assets. In
addition, in first quarter 2013 Target estimates it will recognize an
additional pre-tax gain of approximately $393 million on the sale of its
portfolio. At the time of the company’s October 23, 2012 announcement of the
sale agreement with TD, Target posted details on the accounting aspects of
this transaction on its investor relations website, available at
www.Target.com/investors.

Target expects to deploy proceeds from the sale in a manner that will preserve
its strong investment-grade credit ratings. Specifically, the company expects
to apply approximately 90 percent of net transaction proceeds to reduce the
company’s net debt position, with the remainder applied to share repurchase
over time. Concurrent with this release Target announced that it has commenced
tender offers to apply cash proceeds of up to $1.2 billion to retire certain
long-term debt securities.

Under the terms of the program agreement, Target will continue to earn a
substantial portion of the profits generated by the credit card portfolio.
Beginning with first quarter 2013, Target will no longer report a Credit Card
segment and the income from the profit-sharing arrangement, net of account
servicing expenses, will be recognized as an offset to SG&A expense in a new
U.S. Segment.

Target continues to expect that net income from the portfolio profit-sharing
arrangement, combined with the benefit of debt reduction and share repurchase
resulting from deployment of proceeds from the sale, will result in mild
dilution to Target’s adjusted earnings per share in the first 12 months
following closing*. Specifically, Target expects that in the 12 months
following closing its adjusted earnings per share will be approximately 10
cents lower compared with a scenario in which Target continued to fund its
portfolio. Based on its forecast for income from profit sharing combined with
the expected benefit from share repurchase and interest savings, Target
expects that the adjusted EPS impact of this transaction will become neutral
over time. The company expects to provide additional detail on the impact of
the sale and debt tender offers on its 2013 financial results following final
settlement of the debt tender offers, which is expected to occur in first
quarter 2013.


*Target calculates adjusted earnings per share to measure the results from
operations in its U.S. businesses. Accordingly, adjusted earnings per share
excludes the impact of Target’s Canadian Segment and other non-segment
expenses related to its Canadian market entry.

Miscellaneous
For additional details on Target’s credit card portfolio transaction with TD
please refer to Target’s October 23, 2012 press release, which is available on
the company’s website at www.Target.com/investors.

Statements in this release related to the deployment of proceeds and the
transaction’s expected impact on earnings performance are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements speak only as of the date they are made and are
subject to risks and uncertaintieswhich could causethe company'sactual
resultsto differ materially.The most important risks and uncertainties are
described inItem 1Aof the company'sForm 10-K for the fiscal year ended
January 28, 2012 and Form 10-Q for the fiscal quarter ended July 28, 2012.

About Target
Minneapolis-based Target Corporation (NYSE: TGT) serves guests at 1,787 stores
– 1,784 in the United States and three in Canada -- and at Target.com. Since
1946, Target has given 5 percent of its profit through community grants and
programs; today, that giving equals more than $4 million a week. For more
information about Target’s commitment to corporate responsibility, visit
Target.com/corporateresponsibility.

For more information, visit Target.com/Pressroom.

Contact:

Target Contacts:
John Hulbert, Investors, 612-761-6627
or
Stacey Wempen, Financial Media, 612-761-6785
or
Target Media Hotline, 612-696-3400
 
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