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Target Reports Second Quarter 2013 Earnings



  Target Reports Second Quarter 2013 Earnings

           Adjusted EPS up 6.1 percent to $1.19; GAAP EPS of $0.95

  * Target’s second quarter adjusted earnings per share of $1.19 were at the
    top of the expected range, despite a softer-than-expected U.S. comparable
    sales increase of 1.2 percent
  * Second quarter GAAP earnings per share of $0.95 were at the mid-point of
    the expected range, including (21) cents of dilution related to the
    Canadian Segment
  * Target opened 44 Canadian stores in the second quarter, bringing the total
    store count to 68 and passing the half-way mark to the goal of operating
    124 stores in Canada by year-end
  * In the second quarter, the Company returned more than $1.1 billion to
    shareholders through dividends and share repurchase

Business Wire

MINNEAPOLIS -- August 21, 2013

Target  Corporation (NYSE: TGT) today reported second quarter net earnings of
$611 million, or $0.95 per share, which includes EPS dilution related to the
Canadian Segment of (21) cents per share. Adjusted earnings per share, a
measure the Company believes is useful in providing period-to-period
comparisons of the results of its U.S. operations, were $1.19 in second
quarter 2013, up 6.1 percent from $1.12 in 2012. A reconciliation of non-GAAP
financial measures to GAAP measures is provided in the tables attached to this
press release. All earnings per share figures refer to diluted earnings per
share.

“Target’s second quarter financial results benefited from disciplined
execution of our strategy and strong expense control, offsetting
softer-than-expected sales,” said Gregg Steinhafel, chairman, president, and
chief executive officer of Target Corporation. “For the balance of this year,
our U.S. outlook envisions continued cautious spending by consumers in the
face of ongoing household budget pressures. In Canada, where we are only five
months into our market launch, we continue to learn, adjust and refine
operations in our existing stores as we prepare to open another 56 stores by
year-end.”

Fiscal 2013 Earnings Guidance

In third quarter 2013, the Company expects adjusted EPS of $0.80 to $0.90 and
GAAP EPS of $0.55 to $0.65. The 25-cent difference between the adjusted and
GAAP EPS ranges reflects expected dilution of approximately (22) cents related
to Canadian operations and (3) cents related to the expected reduction in the
beneficial interest asset^1.

For full-year 2013, Target now expects adjusted EPS will be near the low end
of its previous guidance of $4.70 to $4.90. GAAP EPS is expected to be
approximately 95 cents lower than adjusted EPS, due to:

  * Expected EPS dilution related to the Canadian Segment of approximately
    (82) cents;
  * Losses related to the early retirement of debt of (42) cents per share,
    and;
  * Net accounting gains of approximately 29 cents associated with the sale of
    Target’s entire consumer credit card receivables portfolio to TD Bank
    Group.

^1See the “Accounting Considerations” section of this release for more
information related to the beneficial interest asset.

U.S. Segment Results

As a reminder, following the sale of the U.S. credit card portfolio in March
2013, Target’s historical U.S. Retail Segment and U.S. Credit Card Segment
results were combined to form a new U.S. Segment. Selling, General and
Administrative (SG&A) expenses in the new U.S. Segment include income from the
profit-sharing arrangement with TD Bank Group, net of servicing expenses. In
prior periods, credit card revenues, net of credit card expenses, from the
historical U.S. Credit Card Segment have been classified within U.S. Segment
SG&A expenses.^2

In addition, beginning with fiscal 2013, Target made changes to certain vendor
agreements regarding payments received in support of marketing programs. As a
result, these payments are being recorded as a reduction to U.S. Segment cost
of sales rather than a reduction to SG&A expenses, creating equivalent
year-over-year increases in both gross margin and SG&A expense rates. This
change has no effect on U.S. Segment EBITDA and EBIT margin rates.

In second quarter 2013, sales increased 2.4 percent to $16.8 billion from
$16.5 billion last year, reflecting a 1.2 percent increase in comparable sales
combined with the contribution from new stores. Segment earnings before
interest expense and income taxes (EBIT) were $1,330 million in the second
quarter of 2013, an increase of 0.4 percent from $1,324 million in 2012.

Second quarter EBITDA margin rate was 10.8 percent, compared with 11.1 percent
in the revised U.S. Segment and 10.2 percent in the historical U.S. Retail
Segment in second quarter 2012. Second quarter EBIT margin rate was 7.9
percent, compared with 8.0 percent in the revised U.S. Segment and 7.2 percent
in the historical U.S. Retail Segment in second quarter 2012.

Second quarter gross margin rate increased to 31.4 percent in 2013 from 31.3
percent in 2012, reflecting approximately 0.2 percentage-points of benefit
from changes to the Company’s vendor agreements combined with underlying
category rate improvements, partially offset by the impact of the Company’s
integrated growth strategies. Second quarter SG&A expense rate was 20.6
percent in 2013, compared with 2012 rates of 20.2 percent in the revised U.S.
Segment and 21.1 percent in the historical U.S. Retail Segment. Compared with
the revised U.S. Segment in second quarter 2012, the increase was driven by a
smaller contribution from the credit card portfolio, which raised the SG&A
rate by approximately 0.6 percentage points, continued investments in
technology and supply chain in support of multichannel initiatives and the
change to Target’s vendor agreements. These pressures were partially offset by
favorable leverage of compensation expenses and the continued benefit of the
Company’s expense optimization efforts.

^2Quarterly and full-year historical information for the three most recently
completed years reflecting the impact of the reclassification, and the results
for our two segments, U.S. and Canadian, are attached as Exhibit (99) to our
current report on Form 8-K filed April 16, 2013.

Canadian Segment Results

The Canadian Segment generated sales of $275 million at a gross margin rate of
31.6 percent in second quarter 2013. Canadian Segment EBIT for the second
quarter was $(169) million, as gross margin of $87 million was offset by $207
million of start-up and operating expenses and $49 million of depreciation and
amortization. Canadian operations reduced Target’s GAAP earnings per share by
(21) cents in second quarter 2013^3.

^3This amount includes interest expense and tax expense that are not included
in the segment measure of profit. A reconciliation of non-GAAP measures is
included in the tables attached to this release.

Interest Expense and Taxes

In second quarter 2013, net interest expense decreased to $171 million from
$184 million in 2012, benefiting from debt retirement resulting from the use
of proceeds from the sale of the credit card portfolio.

The Company’s effective income tax rate was 36.4 percent in the second
quarter, compared with 34.3 percent in second quarter 2012. The 2012 effective
income tax rate benefited by approximately 2.2 percentage points from the
favorable resolution of various income tax matters.

Capital Returned to Shareholders

In second quarter 2013, the Company repurchased approximately 13.3 million
shares of its common stock at an average price of $69.57 for a total
investment of $927 million. Target also paid dividends of $231 million during
the quarter.

Year-to-date, the Company has repurchased approximately 21.9 million shares of
its common stock at an average price of $67.41 for a total investment of $1.47
billion, and paid dividends of $463 million.

Accounting Considerations

At the close of the sale of its entire U.S. consumer credit card receivables
portfolio to TD Bank Group in first quarter 2013, Target recognized a $225
million beneficial interest asset, which effectively represented a receivable
for the present value of future profit-sharing Target expected to receive on
the receivables sold. The Company estimates the asset will be reduced over the
four-year period following the close of the transaction, with larger
reductions in the early years. The beneficial interest asset was reduced by
$29 million in the second quarter 2013 and $45 million year-to-date 2013.

Miscellaneous

Target Corporation will webcast its second quarter earnings conference call at
9:30 a.m. CDT today. Investors and the media are invited to listen to the call
through the Company’s website at www.target.com/investors (click on “events &
presentations”). A telephone replay of the call will be available beginning at
approximately 11:30 a.m. CDT today through the end of business on August 23,
2013. The replay number is (855) 859-2056 (passcode: 78419579).

Statements in this release regarding third quarter and full year 2013 earnings
guidance 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 uncertainties which could
cause the Company’s actual results to differ materially. The most important
risks and uncertainties are described in Item 1A of the Company’s Form 10-K
for the fiscal year ended February 2, 2013.

In addition to the GAAP results provided in this release, the Company provides
adjusted diluted earnings per share for the three- and six-month periods ended
August 3, 2013 and July 28, 2012, respectively. This measure is not in
accordance with, or an alternative for, generally accepted accounting
principles in the United States. The most comparable GAAP measure is diluted
earnings per share. Management believes adjusted EPS is useful in providing
period-to-period comparisons of the results of the Company’s U.S. operations.
Adjusted EPS should not be considered in isolation or as a substitution for
analysis of the Company’s results as reported under GAAP. Other companies may
calculate adjusted EPS differently than the Company does, limiting the
usefulness of the measure for comparisons with other companies.

About Target

Minneapolis-based Target Corporation (NYSE: TGT) serves guests at 1,856 stores
– 1,788 in the United States and 68 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.

                                                                                 
TARGET CORPORATION
                                                                                            
Consolidated Statements of Operations
                 Three Months Ended                     Six Months Ended
(millions,       August 3,    July 28,                  August 3,    July 28,
except per
share data)      2013         2012         Change       2013         2012         Change    
(unaudited)
Sales            $ 17,117     $ 16,451     4.0      %   $ 33,823     $ 32,989     2.5      %
Credit card        -            328        (100.0 )       -            657        (100.0 )  
revenues
Total revenues     17,117       16,779     2.0            33,823       33,646     0.5
Cost of sales      11,745       11,297     4.0            23,308       22,838     2.1
Selling,
general and        3,698        3,588      3.0            7,287        6,981      4.4
administrative
expenses
Credit card        -            108        (100.0 )       -            228        (100.0 )
expenses
Depreciation
and                542          531        2.1            1,079        1,060      1.7
amortization
Gain on
receivables        -            -          n/a            (391   )     -          n/a       
transaction
Earnings
before
interest           1,132        1,255      (9.8   )       2,540        2,539      0.0
expense and
income taxes
Net interest       171          184        (6.7   )       801          366        118.3     
expense
Earnings
before income      961          1,071      (10.3  )       1,739        2,173      (19.9  )
taxes
Provision for      350          367        (4.9   )       629          772        (18.4  )  
income taxes
Net earnings     $ 611        $ 704        (13.2  ) %   $ 1,110      $ 1,401      (20.8  ) %
Basic earnings   $ 0.96       $ 1.07       (10.2  ) %   $ 1.74       $ 2.12       (17.9  ) %
per share
Diluted
earnings per     $ 0.95       $ 1.06       (10.4  ) %   $ 1.72       $ 2.10       (18.1  ) %
share
Weighted
average common
shares
outstanding
Basic              634.8        656.7      (3.3   ) %     638.4        661.5      (3.5   ) %
Dilutive
impact of          7.2          6.2                       7.3          6.1                  
share-based
awards^(a)
Diluted            642.0        662.9      (3.1   ) %     645.7        667.6      (3.3   ) %
^(a) Excludes 0.1 million and 2.2 million share-based awards for the three and six months
ended August 3, 2013, respectively, and 5.8 million and 8.7 million share-based awards for
the three and six months ended July 28, 2012, respectively, because their effects were
antidilutive.
                                                                                            
Subject to reclassification
 

                                                                
TARGET CORPORATION
                                                                   
Consolidated Statements of Financial Position
                              August 3,         February 2,       July 28,
(millions)                    2013              2013              2012
Assets                        (unaudited)                         (unaudited)
Cash and cash equivalents,
including short-term          $  1,018          $  784            $  1,442
investments of $249, $130
and $830
Inventory                        8,441             7,903             7,733
Other current assets             1,944             1,860             1,700
Credit card receivables,         -                 5,841             -
held for sale
Credit card receivables,
net of allowance of $0, $0       -                 -                 5,540    
and $365
Total current assets             11,403            16,388            16,415
Property and equipment
Land                             6,213             6,206             6,137
Buildings and improvements       29,336            28,653            27,394
Fixtures and equipment           5,351             5,362             5,192
Computer hardware and            2,532             2,567             2,333
software
Construction-in-progress         1,456             1,176             1,260
Accumulated depreciation         (13,483  )        (13,311  )        (12,542 )
Property and equipment,          31,405            30,653            29,774
net
Other noncurrent assets          1,354             1,122             1,136    
Total assets                  $  44,162         $  48,163         $  47,325   
Liabilities and
shareholders' investment
Accounts payable              $  7,078          $  7,056          $  6,505
Accrued and other current        3,705             3,981             3,539
liabilities
Current portion of
long-term debt and other         1,833             2,994             3,285    
borrowings
Total current liabilities        12,616            14,031            13,329
Long-term debt and other         12,655            14,654            15,229
borrowings
Deferred income taxes            1,331             1,311             1,173
Other noncurrent                 1,540             1,609             1,697    
liabilities
Total noncurrent                 15,526            17,574            18,099
liabilities
Shareholders' investment
Common stock                     53                54                54
Additional paid-in capital       4,335             3,925             3,721
Retained earnings                12,285            13,155            12,774
Accumulated other
comprehensive loss
Pension and other benefit        (480     )        (532     )        (596    )
liabilities
Currency translation
adjustment and cash flow         (173     )        (44      )        (56     )
hedges
Total shareholders'              16,020            16,558            15,897   
investment
Total liabilities and         $  44,162         $  48,163         $  47,325   
shareholders' investment
                                                                   
Common Stock Authorized 6,000,000,000 shares, $.0833 par value; 630,924,647,
645,294,423 and 653,907,367 shares issued and outstanding at August 3, 2013,
February 2, 2013 and July 28, 2012, respectively.
 
Preferred Stock Authorized 5,000,000 shares, $.01 par value; no shares were
issued or outstanding at August 3, 2013, February 2, 2013 or July 28, 2012.
                                                                   
Subject to reclassification
 

                                                          
TARGET CORPORATION
                                                               
Consolidated Statements of Cash Flows
                                     Six Months Ended
                                     August 3,                July 28,
(millions)(unaudited)                2013                     2012
Operating activities
Net earnings                         $    1,110               $   1,401
Reconciliation to cash flow
Depreciation and amortization             1,079                   1,060
Share-based compensation                  55                      48
expense
Deferred income taxes                     (136      )             (92      )
Bad debt expense^(a)                      41                      95
Gain on receivables transaction           (391      )             -
Loss on debt extinguishment               445                     -
Noncash (gains)/losses and                (2        )             (1       )
other, net
Changes in operating accounts:
Accounts receivable originated            157                     116
at Target
Proceeds on sale of accounts              2,703                   -
receivable originated at Target
Inventory                                 (527      )             185
Other current assets                      (56       )             72
Other noncurrent assets                   47                      (9       )
Accounts payable                          17                      (352     )
Accrued and other current                 (403      )             (150     )
liabilities
Other noncurrent liabilities              (30       )             98        
Cash flow provided by                     4,109                   2,471     
operations
Investing activities
Expenditures for property and             (1,917    )             (1,603   )
equipment
Proceeds from disposal of                 48                      18
property and equipment
Change in accounts receivable             121                     176
originated at third parties
Proceeds from sale of accounts
receivable originated at third            3,002                   -
parties
Cash paid for acquisitions, net           (58       )             -
of cash assumed
Other investments                         73                      (18      )
Cash flow provided by/(required           1,269                   (1,427   )
for) investing activities
Financing activities
Change in commercial paper, net           (163      )             -
Additions to long-term debt               -                       1,971
Reductions of long-term debt              (3,424    )             (1,011   )
Dividends paid                            (463      )             (399     )
Repurchase of stock                       (1,461    )             (1,130   )
Stock option exercises and                363                     183
related tax benefit
Other                                     -                       (16      )
Cash flow required for                    (5,148    )             (402     )
financing activities
Effect of exchange rate changes           4                       6         
on cash and cash equivalents
Net increase in cash and cash             234                     648
equivalents
Cash and cash equivalents at              784                     794       
beginning of period
Cash and cash equivalents at         $    1,018               $   1,442     
end of period
^(a) Includes net write-offs of credit card receivables prior to the sale of
receivables on March 13, 2013, and bad debt expense on credit card receivables
during the six months ended July 28, 2012.
                                                               
Subject to reclassification
                                                               

                                                                                         
TARGET CORPORATION
                                                              
U.S. Segment
                                                          
U.S. Segment     Three Months Ended                            Six Months Ended
Results
(millions)       August 3,    July 28,                         August 3,    July 28,
(unaudited)      2013         2012           Change            2013         2012            Change       
Sales            $ 16,841     $ 16,451       2.4         %     $ 33,462     $  32,989       1.4         %
Cost of            11,556       11,297       2.3                 23,067        22,838       1.0          
sales
Gross margin       5,285        5,154        2.5                 10,395        10,151       2.4
SG&A               3,462        3,322        4.2                 6,842         6,471        5.8          
expenses^(a)
EBITDA             1,823        1,832        (0.5    )           3,553         3,680        (3.5    )
Depreciation
and                493          508          (3.1    )           984           1,016        (3.2    )    
amortization
EBIT             $ 1,330      $ 1,324        0.4         %     $ 2,569      $  2,664        (3.6    )   %
Note: Prior period results have been revised to reflect the combination of our historical U.S. Retail
Segment and U.S. Credit Card Segment into one U.S. Segment.
^(a) SG&A includes credit card revenues and expenses for all periods presented prior to the March 2013 sale
of our U.S. consumer credit card portfolio to TD Bank. For the three and six months ended August 3, 2013,
SG&A also includes $183 million and $288 million, respectively, of profit sharing income from the
arrangement with TD Bank.
                                                                                                         
EBITDA is earnings before interest expense, income taxes, depreciation and amortization.
EBIT is earnings before interest expense and income taxes.
                                                                                                         
Prior period results have been revised to reflect the combination of our historical U.S. Retail Segment and
U.S. Credit Card Segment into one U.S. Segment.
                                                          
U.S. Segment                                                                2013 U.S. Segment Change vs.
Rate                          Three Months Ended July 28, 2012              2012
Analysis
               Three                         Impact of         Historical   U.S.
               Months Ended   U.S.           Historical        U.S.         Segment,        Historical
(unaudited)    August 3,      Segment,       U.S.              Retail       as              U.S. Retail  
               2013           as revised     Credit Card       Segment      revised^(b)     Segment^(c)
                                             Segment^(a)
Gross margin       31.4     %   31.3     %   -            pp     31.3     %    0.1       pp 0.1          pp
rate
SG&A expense       20.6         20.2         (0.9    )           21.1          0.4          (0.5    )
rate
EBITDA             10.8         11.1         0.9                 10.2          (0.3   )     0.6
margin rate
Depreciation
and                2.9          3.1          -                   3.1           (0.2   )     (0.2    )
amortization
expense rate
EBIT margin        7.9          8.0          0.8                 7.2           (0.1   )     0.7          
rate
                                                                                                         
U.S. Segment                                                                2013 U.S. Segment Change vs.
Rate                          Six Months Ended July 28, 2012                2012
Analysis
               Six                           Impact of         Historical   U.S.
               Months Ended   U.S.           Historical        U.S.         Segment,        Historical
(unaudited)    August 3,      Segment,       U.S.              Retail       as              U.S. Retail  
               2013           as revised     Credit Card       Segment      revised^(b)     Segment^(c)
                                             Segment^(a)
Gross margin       31.1     %   30.8     %   -            pp     30.8     %    0.3       pp 0.3          pp
rate
SG&A expense       20.4         19.6         (0.9    )           20.5          0.8          (0.1    )
rate
EBITDA             10.6         11.2         0.9                 10.3          (0.5   )     0.3
margin rate
Depreciation
and                2.9          3.1          -                   3.1           (0.1   )     (0.2    )
amortization
expense rate
EBIT margin        7.7          8.1          0.9                 7.2           (0.4   )     0.5          
rate
Rate analysis metrics are computed by dividing the applicable amount by sales.
^(a) Represents the impact of combining the historical U.S. Credit Card Segment and the U.S. Retail Segment
into one U.S. Segment. As compared to the historical U.S. Retail Segment results for the same period,
segment results, as revised, reflect lower SG&A rates and increased EBIT and EBITDA margin rates resulting
from the inclusion of credit card profits, net of expenses, within SG&A as compared to historical U.S.
Retail Segment results for the same period.
^(b) Represents the difference between the U.S. Segment rates for the three and six months ended August 3,
2013 and the U.S. Segment rates, as revised, for the three and six months ended July 28, 2012.
^(c) Represents the difference between the U.S. Segment rates for the three and six months ended August 3,
2013 and the historical U.S. Retail Segment rates for the three and six months ended July 28, 2012.
                                                          
Comparable       Three Months Ended                            Six Months Ended            
Sales
                 August 3,    July 28,                         August 3,    July 28,
(unaudited)      2013         2012                             2013         2012           
Comparable         1.2      %   3.1      %                       0.3      %    4.2        %
sales change
Drivers of
change in
comparable
sales:
Number of          (1.4   )     0.7                              (1.6   )      1.3
transactions
Average
transaction        2.7          2.4                              2.0           2.8
amount
Selling
price per          1.6          1.1                              0.5           1.8
unit
Units per          1.0          1.3                              1.4           1.0         
transaction
The comparable sales increases or decreases above are calculated by comparing sales in
fiscal year periods with comparable prior-year periods of equivalent length.
                                                          
REDcard          Three Months Ended                            Six Months Ended            
Penetration
                 August 3,    July 28,                         August 3,    July 28,
(unaudited)      2013         2012                             2013         2012           
Target             9.3      %   7.7      %                       8.9      %    7.4        %
Credit Cards
Target Debit       9.4          5.1                              9.0           4.8         
Card
Total
REDcard            18.7     %   12.8     %                       17.9     %    12.2       %
Penetration
Represents the percentage of Target sales that are paid for using REDcards.
                                                          
Number of
Stores and       Number of Stores                              Retail Square Feet^(a)
Retail
Square Feet
                 August 3,    February 2,    July 28,          August 3,    February 2,   July 28,
(unaudited)      2013         2013           2012              2013         2013          2012
General
merchandise      324          391            428               38,094       46,584        50,974
stores
Expanded
food             1,206        1,131          1,090             155,868      146,249       141,020
assortment
stores
SuperTarget      251          251            251               44,500       44,500        44,500
stores
CityTarget       7            5              3                 703          514           314
stores
Total            1,788        1,778          1,772             239,165      237,847       236,808
^(a)  In thousands; reflects total square feet, less office, distribution center and vacant space.
                                                                                                         
Subject to reclassification
                                                                                                         

 
TARGET CORPORATION
                                                                            
Canadian Segment
                                                                                     
Canadian Segment   Three Months Ended                  Six Months Ended
Results
                   August 3,   July 28,                August     July 28,
                                                       3,
(millions)         2013        2012         Change     2013       2012       Change  
(unaudited)
Sales              $ 275       $ -          n/a    %   $ 361      $ -        n/a    %
Cost of sales        188         -          n/a          241        -        n/a     
Gross margin         87          -          n/a          120        -        n/a
SG&A                 207         47         340.3        400        81       391.4   
expenses^(a)
EBITDA               (120  )     (47    )   155.3        (280 )     (81  )   243.8
Depreciation and     49          22         121.8        94         44       117.7   
amortization^(b)
EBIT               $ (169  )   $ (69    )   144.5  %   $ (374 )   $ (125 )   199.9  %
^(a) SG&A expenses include start-up and operating expenses.
^(b) Depreciation and amortization results from depreciation of capital lease assets
and leasehold interests. The lease payment obligation gave rise to interest expense
of $20 million and $19 million for the three months ended August 3, 2013 and July 28,
2012, respectively, and $39 million and $38 million of interest expense for the six
months ended August 3, 2013 and July 28, 2012, respectively.
                                                                                     
 
Canadian Segment   Three       Six
Rate Analysis      Months      Months
                   Ended       Ended
(unaudited)        August 3,   August 3,   
                   2013        2013
Gross margin         31.6    %   33.2     %
rate
SG&A expense         75.2        110.6
rate
EBITDA margin        (43.6 )     (77.4  )
rate
Depreciation and
amortization         17.9        26.1
expense rate
EBIT margin rate     (61.5 )     (103.6 )  
                                           
REDcard            Three       Six
Penetration        Months      Months
                   Ended       Ended
(unaudited)        August 3,   August 3,   
                   2013        2013
Target Credit        1.1     %   1.0      %
Cards
Target Debit         1.2         1.2       
Card
Total REDcard        2.3     %   2.2      %
Penetration
Represents the percentage of Target sales
that are paid for using REDcards.
                                                                   
Number of Stores                                       Retail Square
and Retail         Number of Stores                    Feet^(a)
Square Feet
                   August 3,   February                August     February
                               2,                      3,         2,
(unaudited)        2013        2013                    2013       2013
General
merchandise        68          -                       7,774      -
stores
^(a)  In thousands; reflects total square feet, less office, distribution
center and vacant space.
                                                                                     
Subject to reclassification
                                                                                     

                                                                               
TARGET CORPORATION
                                                                                 
Reconciliation of Non-GAAP Financial Measures
 
                  Three Months Ended               Six Months Ended
                  August     July 28,              August 3,   July 28,
                  3,
(unaudited)       2013       2012     Change       2013        2012             Change
GAAP diluted
earnings per      $ 0.95     $ 1.06     (10.4 )%   $ 1.72      $ 2.10              (18.1  )%
share
Adjustments         0.24       0.06                  0.52        0.13            
Adjusted
diluted           $ 1.19     $ 1.12     6.1   %    $ 2.24      $ 2.23              0.5    %
earnings per
share
A detailed reconciliation is provided below.
                                                                                 
(millions,
except per                            U.S.         Canadian    Other            Consolidated
share data)                                                                     GAAP Total
(unaudited)
Three Months
Ended August 3,
2013
Segment profit                        $ 1,330      $ (169  )   $ -              $  1,161
Net interest                            152          20          -                 171
expense
Reduction of
beneficial                              -            -           29                29      
interest asset
Earnings before                         1,178        (189  )     (29   )           961
income taxes
Provision for
income                                  416          (53   )     (14   ) ^(e)      350     
taxes^(b)
Net earnings                          $ 762        $ (136  )   $ (15   )        $  611     
Diluted
earnings per                          $ 1.19       $ (0.21 )   $ (0.02 )        $  0.95    
share^(c)
Three Months
Ended July 28,
2012
Segment profit                        $ 1,324      $ (69   )   $ -              $  1,255
Net interest                            164          19          -                 184     
expense
Earnings before                         1,160        (88   )     -                 1,071
income taxes
Provision for
income                                  418          (27   )     (23   ) ^(e)      367     
taxes^(b)
Net earnings                          $ 742        $ (61   )   $ 23             $  704     
Diluted
earnings per                          $ 1.12       $ (0.09 )   $ 0.03           $  1.06    
share^(c)
                                                                                 
Six Months
Ended August 3,
2013
Segment profit                        $ 2,569      $ (374  )   $ -              $  2,194
Net interest                            317          39          445     ^(d)      801
expense
Gain on
receivables                             -            -           (391  )           (391   )
transaction^(a)
Reduction of
beneficial                              -            -           45                45      
interest asset
Earnings before                         2,252        (413  )     (99   )           1,739
income taxes
Provision for
income                                  807          (125  )     (53   ) ^(e)      629     
taxes^(b)
Net earnings                          $ 1,445      $ (288  )   $ (46   )        $  1,110   
Diluted
earnings per                          $ 2.24       $ (0.45 )   $ (0.07 )        $  1.72    
share^(c)
Six Months
Ended July 28,
2012
Segment profit                        $ 2,664      $ (125  )   $ -              $  2,539
Net interest                            328          38          -                 366     
expense
Earnings before                         2,336        (163  )     -                 2,173
income taxes
Provision for
income                                  850          (47   )     (31   ) ^(e)      772     
taxes^(b)
Net earnings                          $ 1,486      $ (116  )   $ 31             $  1,401   
Diluted
earnings per                          $ 2.23       $ (0.17 )   $ 0.05           $  2.10    
share^(c)
Note: Our segment measure of profit is used by management to evaluate the return on our
investment and to make operating decisions. To provide additional transparency, we have
disclosed non-GAAP adjusted diluted earnings per share, which excludes the impact of our
2013 Canadian market entry, adjustments related to the sale of our U.S. credit card
receivables portfolio, favorable resolution of various income tax matters and the loss on
early retirement of debt. We believe this information is useful in providing
period-to-period comparisons of the results of our U.S. operations. The sum of the non-GAAP
adjustments may not equal the total adjustment amounts due to rounding.
                                                                                 
^(a)  Represents consideration received from the sale of our U.S. credit card receivables in
the first quarter of 2013 in excess of the recorded amount of the receivables. Consideration
included a beneficial interest asset of $225 million.
^(b)  Taxes are allocated to our business segments based on estimated income tax rates
applicable to the operations of the segment for the period.
^(c)  For the three and six months ended August 3, 2013 average diluted shares outstanding
were 642.0 million and 645.7 million, respectively, and for the three and six months ended
July 28, 2012, average diluted shares outstanding were 662.9 million and 667.6 million,
respectively.
^(d)  Represents the loss on early retirement of debt.
^(e)  Represents the effect of resolution of income tax matters. The results for the three
months ended August 3, 2013 include a $11 million tax benefit for the reduction of the
beneficial interest asset. The results for the six months ended August 3, 2013 also include
a $127 million tax expense for the gain on receivables transaction and the reduction of the
beneficial interest asset, and a $176 million tax benefit related to the loss on early
retirement of debt.
                                                                                 
Subject to reclassification
 

Contact:

Target  Corporation
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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