UNITED STATES
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) 
☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 28, 2017July 30, 2022
OR
☐    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
 
targetbullseyea05a02a02a10.jpgtgt-20220730_g1.jpg
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)

612-304-6073
(Registrant’s telephone number, including area code)
Minnesota41-0215170
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1000 Nicollet Mall, Minneapolis, Minnesota55403
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: 612/304-6073
Former name, former address and former fiscal year, if changed since last report: N/A
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.0833 per shareTGTNew York Stock Exchange
 
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 ☒ No ☐
Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company, (as defined" and "emerging growth company" in Rule 12b-2 of the Exchange Act).
Act.
Large accelerated filerx
☒
Accelerated filero
 Non-accelerated filer  o
☐
Non-accelerated filer
☐Smaller reporting companyo
☐
Emerging growth companyo☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o☐     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No x☒
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 November 14, 2017August 19, 2022, were 543,572,649.



TARGET CORPORATION
TABLE OF CONTENTS
460,262,630.

Table of Contents
Index to Notes
TARGET CORPORATION

TABLE OF CONTENTS
Item 1.
Consolidated Statements of Operations
1
Consolidated Statements of Comprehensive Income
2
Consolidated Statements of Financial Position
3
Consolidated Statements of Cash Flows
4
Consolidated Statements of Shareholders’ Investment
5
Notes to Consolidated Financial Statements
68
Item 2.
1213
Item 3.
2322
Item 4.
2322
Item 1.
2423
Item 1A.
2423
Item 2.
2523
Item 3.
2523
Item 4.
2523
Item 5.
2523
Item 6.
2624
2725





FINANCIAL STATEMENTS
Table of Contents
Index to Notes
PART I. FINANCIAL INFORMATION


Item 1. Financial Statements


Consolidated Statements of Operations    
 Three Months EndedSix Months Ended
(millions, except per share data) (unaudited)July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Sales$25,653 $24,826 $50,483 $48,705 
Other revenue384 334 724 652 
Total revenue26,037 25,160 51,207 49,357 
Cost of sales20,142 17,280 38,603 33,996 
Selling, general and administrative expenses5,002 4,849 9,764 9,358 
Depreciation and amortization (exclusive of depreciation included in cost of sales)572 564 1,173 1,162 
Operating income321 2,467 1,667 4,841 
Net interest expense112 104 224 212 
Net other (income) / expense(8)(7)(23)(350)
Earnings before income taxes217 2,370 1,466 4,979 
Provision for income taxes34 553 274 1,065 
Net earnings$183 $1,817 $1,192 $3,914 
Basic earnings per share$0.40 $3.68 $2.57 $7.89 
Diluted earnings per share$0.39 $3.65 $2.55 $7.82 
Weighted average common shares outstanding
Basic461.5 493.1 463.8 495.8 
Diluted463.6 497.5 466.8 500.4 
Antidilutive shares1.3 — 1.0 — 
Consolidated Statements of Operations       
 Three Months Ended Nine Months Ended
(millions, except per share data) (unaudited)October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Sales$16,667
 $16,441
 $49,113
 $48,805
Cost of sales (a)
11,712
 11,536
 34,330
 33,957
Gross margin4,955
 4,905
 14,783
 14,848
Selling, general and administrative expenses3,512
 3,339
 10,027
 9,741
Depreciation and amortization (exclusive of depreciation included in cost of sales) (a)
574
 505
 1,596
 1,486
Earnings from continuing operations before interest expense and income taxes869
 1,061
 3,160
 3,621
Net interest expense254
 142
 532
 864
Earnings from continuing operations before income taxes615
 919
 2,628
 2,757
Provision for income taxes137
 311
 802
 910
Net earnings from continuing operations478
 608
 1,826
 1,847
Discontinued operations, net of tax2
 —
 7
 73
Net earnings$480
 $608
 $1,833
 $1,920
Basic earnings per share       
Continuing operations$0.88
 $1.07
 $3.33
 $3.16
Discontinued operations—
 —
 0.01
 0.12
Net earnings per share$0.88
 $1.07
 $3.34
 $3.29
Diluted earnings per share       
Continuing operations$0.87
 $1.06
 $3.31
 $3.14
Discontinued operations—
 —
 0.01
 0.12
Net earnings per share$0.88
 $1.06
 $3.32
 $3.26
Weighted average common shares outstanding       
Basic544.5
 570.1
 548.7
 583.5
Dilutive impact of share-based awards3.4
 4.7
 3.1
 5.0
Diluted547.9
 574.8
 551.8
 588.5
Antidilutive shares4.5
 0.2
 4.1
 0.1
Dividends declared per share$0.62
 $0.60
 $1.84
 $1.76

Note: Per share amounts may not foot due to rounding. 
(a) Refer to Note 3 for information about a reclassification of supply chain-related depreciation expense to cost of sales.

See accompanying Notes to Consolidated Financial Statements.

Statements.
1



TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q1
Consolidated Statements of Comprehensive Income  
 Three Months EndedNine Months Ended
(millions) (unaudited)October 28,
2017
 October 29,
2016
October 28,
2017
 October 29,
2016
Net earnings$480
 $608
$1,833
 $1,920
Other comprehensive income 
  
 
  
Pension and other benefit liabilities, net of taxes of $5, $3, $15 and $118
 6
22
 17
Currency translation adjustment and cash flow hedges, net of taxes of $1, $1, $2, and $2(2) —
6
 5
Other comprehensive income6
 6
28
 22
Comprehensive income$486
 $614
$1,861
 $1,942
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
Consolidated Statements of Comprehensive Income  
 Three Months EndedSix Months Ended
(millions) (unaudited)July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Net earnings$183 $1,817 $1,192 $3,914 
Other comprehensive income, net of tax    
Pension benefit liabilities11 20 22 42 
Cash flow hedges and currency translation adjustment(28)(8)162 1 
Other comprehensive income(17)12 184 43 
Comprehensive income$166 $1,829 $1,376 $3,957 

See accompanying Notes to Consolidated Financial Statements.

Statements.
2



TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q2
Consolidated Statements of Financial Position 
  
  
(millions) (unaudited)October 28,
2017
 January 28,
2017
 October 29,
2016
Assets   
  
Cash and cash equivalents$2,725
 $2,512
 $1,231
Inventory10,586
 8,309
 10,057
Assets of discontinued operations6
 69
 62
Other current assets1,392
 1,100
 1,492
Total current assets14,709
 11,990
 12,842
Property and equipment 
  
  
Land6,087
 6,106
 6,106
Buildings and improvements28,310
 27,611
 27,518
Fixtures and equipment5,548
 5,503
 5,467
Computer hardware and software2,658
 2,651
 2,538
Construction-in-progress389
 200
 219
Accumulated depreciation(17,880) (17,413) (16,946)
Property and equipment, net25,112
 24,658
 24,902
Noncurrent assets of discontinued operations9
 12
 17
Other noncurrent assets878
 771
 842
Total assets$40,708
 $37,431
 $38,603
Liabilities and shareholders’ investment 
  
  
Accounts payable$9,986
 $7,252
 $8,250
Accrued and other current liabilities4,036
 3,737
 3,662
Current portion of long-term debt and other borrowings1,354
 1,718
 729
Total current liabilities15,376
 12,707
 12,641
Long-term debt and other borrowings11,277
 11,031
 12,097
Deferred income taxes944
 861
 920
Liabilities of discontinued operations11
 19
 19
Other noncurrent liabilities1,963
 1,860
 1,857
Total noncurrent liabilities14,195
 13,771
 14,893
Shareholders’ investment 
  
  
Common stock45
 46
 47
Additional paid-in capital5,762
 5,661
 5,598
Retained earnings5,940
 5,884
 6,031
Accumulated other comprehensive loss(610) (638) (607)
Total shareholders’ investment11,137
 10,953
 11,069
Total liabilities and shareholders’ investment$40,708
 $37,431
 $38,603
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
Consolidated Statements of Financial Position   
(millions, except footnotes) (unaudited)July 30,
2022		January 29,
2022		July 31,
2021
Assets 
Cash and cash equivalents$1,117 $5,911 $7,368 
Inventory15,320 13,902 11,259 
Other current assets2,016 1,760 1,604 
Total current assets18,453 21,573 20,231 
Property and equipment
Land6,161 6,164 6,148 
Buildings and improvements33,694 32,985 32,133 
Fixtures and equipment6,744 6,407 5,892 
Computer hardware and software2,684 2,505 2,260 
Construction-in-progress2,245 1,257 944 
Accumulated depreciation(21,708)(21,137)(20,133)
Property and equipment, net29,820 28,181 27,244 
Operating lease assets2,542 2,556 2,503 
Other noncurrent assets1,655 1,501 1,407 
Total assets$52,470 $53,811 $51,385 
Liabilities and shareholders’ investment
Accounts payable$14,891 $15,478 $12,632 
Accrued and other current liabilities5,905 6,098 5,600 
Current portion of long-term debt and other borrowings1,649 171 1,190 
Total current liabilities22,445 21,747 19,422 
Long-term debt and other borrowings13,453 13,549 11,589 
Noncurrent operating lease liabilities2,543 2,493 2,462 
Deferred income taxes1,862 1,566 1,146 
Other noncurrent liabilities1,575 1,629 1,906 
Total noncurrent liabilities19,433 19,237 17,103 
Shareholders’ investment
Common stock38 39 41 
Additional paid-in capital6,502 6,421 6,332 
Retained earnings4,421 6,920 9,200 
Accumulated other comprehensive loss(369)(553)(713)
Total shareholders’ investment10,592 12,827 14,860 
Total liabilities and shareholders’ investment$52,470 $53,811 $51,385 
Common Stock Authorized 6,000,000,000 shares, $.0833$0.0833 par value; 543,913,318, 556,156,228460,236,393, 471,274,073 and 563,676,785489,651,196 shares issued and outstanding at October 28, 2017, as of July 30, 2022, January 28, 201729, 2022, and October 29, 2016,July 31, 2021, respectively.

Preferred Stock Authorized 5,000,000 shares, $.01$0.01 par value; no shares were issued or outstanding during any period presented.

See accompanying Notes to Consolidated Financial Statements.

Statements.
3



TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q3
Consolidated Statements of Cash Flows   
 Nine Months Ended
(millions) (unaudited)October 28,
2017
 October 29,
2016
Operating activities 
  
Net earnings$1,833
 $1,920
Earnings from discontinued operations, net of tax7
 73
Net earnings from continuing operations1,826
 1,847
Adjustments to reconcile net earnings to cash provided by operations 
  
Depreciation and amortization1,784
 1,686
Share-based compensation expense81
 85
Deferred income taxes37
 83
Loss on debt extinguishment123
 422
Noncash losses / (gains) and other, net
189
 (5)
Changes in operating accounts 
  
Inventory(2,277) (1,455)
Other assets(89) (14)
Accounts payable2,738
 832
Accrued and other liabilities2
 (711)
Cash provided by operating activities—continuing operations4,414
 2,770
Cash provided by operating activities—discontinued operations
75
 111
Cash provided by operations4,489
 2,881
Investing activities 
  
Expenditures for property and equipment(2,049) (1,184)
Proceeds from disposal of property and equipment27
 23
Other investments(62) 23
Cash required for investing activities(2,084) (1,138)
Financing activities 
  
Change in commercial paper, net—
 89
Additions to long-term debt739
 1,977
Reductions of long-term debt(1,087) (2,625)
Dividends paid(1,001) (1,011)
Repurchase of stock(757) (3,034)
Prepayment of accelerated share repurchase(111) (120)
Stock option exercises25
 166
Cash required for financing activities(2,192) (4,558)
Net increase / (decrease) in cash and cash equivalents
213
 (2,815)
Cash and cash equivalents at beginning of period2,512
 4,046
Cash and cash equivalents at end of period$2,725
 $1,231
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
Consolidated Statements of Cash Flows  
 Six Months Ended
(millions) (unaudited)July 30, 2022July 31, 2021
Operating activities  
Net earnings$1,192 $3,914 
Adjustments to reconcile net earnings to cash (required for) provided by operating activities:  
Depreciation and amortization1,329 1,300 
Share-based compensation expense122 138 
Deferred income taxes227 143 
Gain on Dermstore sale— (335)
Noncash losses / (gains) and other, net
108 7 
Changes in operating accounts: 
Inventory(1,418)(606)
Other assets(179)3 
Accounts payable(784)(311)
Accrued and other liabilities(644)(831)
Cash (required for) provided by operating activities(47)3,422 
Investing activities  
Expenditures for property and equipment(2,523)(1,338)
Proceeds from disposal of property and equipment4 15 
Proceeds from Dermstore sale— 356 
Other investments1 (5)
Cash required for investing activities(2,518)(972)
Financing activities  
Change in commercial paper, net1,545 — 
Reductions of long-term debt(113)(72)
Dividends paid(842)(676)
Repurchase of stock(2,821)(2,850)
Stock option exercises2 5 
Cash required for financing activities(2,229)(3,593)
Net decrease in cash and cash equivalents(4,794)(1,143)
Cash and cash equivalents at beginning of period5,911 8,511 
Cash and cash equivalents at end of period$1,117 $7,368 
Supplemental information
Leased assets obtained in exchange for new finance lease liabilities$107 $182 
Leased assets obtained in exchange for new operating lease liabilities97 386 
 

See accompanying Notes to Consolidated Financial Statements.

Statements.
4



TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q4
Consolidated Statements of Shareholders’ Investment
 Common
 Stock
 Additional
  
 Accumulated Other
  
 Stock
 Par
 Paid-in
 Retained
 Comprehensive
  
(millions) (unaudited)Shares
 Value
 Capital
 Earnings
 
(Loss) / Income

 Total
January 30, 2016602.2
 $50
 $5,348
 $8,188
 $(629) $12,957
Net earnings—
 —
 —
 2,737
 —
 2,737
Other comprehensive loss—
 —
 —
 —
 (9) (9)
Dividends declared—
 —
 —
 (1,359) —
 (1,359)
Repurchase of stock(50.9) (4) —
 (3,682) —
 (3,686)
Stock options and awards4.9
 —
 313
 —
 —
 313
January 28, 2017556.2
 $46
 $5,661
 $5,884
 $(638) $10,953
Net earnings—
 —
 —
 1,833
 —
 1,833
Other comprehensive income—
 —
 —
 —
 28
 28
Dividends declared—
 —
 —
 (1,016) —
 (1,016)
Repurchase of stock(13.3) (1) —
 (750) —
 (751)
Stock to be received upon settlement of ASR—
 —
 —
 (11) —
 (11)
Stock options and awards1.0
 —
 101
 —
 —
 101
October 28, 2017543.9
 $45
 $5,762
 $5,940
 $(610) $11,137
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
Consolidated Statements of Shareholders’ Investment
 CommonStockAdditional Accumulated Other 
 StockParPaid-inRetainedComprehensive 
(millions) (unaudited)SharesValueCapitalEarnings
(Loss) / Income
Total
January 30, 2021500.9 $42 $6,329 $8,825 $(756)$14,440 
Net earnings— — — 2,097 — 2,097 
Other comprehensive income— — — — 31 31 
Dividends declared— — — (343)— (343)
Repurchase of stock(6.1)(1)— (1,207)— (1,208)
Stock options and awards1.3 — (58)— — (58)
May 1, 2021496.1 $41 $6,271 $9,372 $(725)$14,959 
Net earnings— — — 1,817 — 1,817 
Other comprehensive income— — — — 12 12 
Dividends declared— — — (445)— (445)
Repurchase of stock(6.6)— — (1,544)— (1,544)
Stock options and awards0.2 — 61 — — 61 
July 31, 2021489.7 $41 $6,332 $9,200 $(713)$14,860 
Net earnings— — — 1,488 — 1,488 
Other comprehensive income— — — — 26 26 
Dividends declared— — — (439)— (439)
Repurchase of stock(8.8)(1)— (2,180)— (2,181)
Stock options and awards— — 49 — — 49 
October 30, 2021480.9 $40 $6,381 $8,069 $(687)$13,803 
Net earnings— — — 1,544 — 1,544 
Other comprehensive income— — — — 134 134 
Dividends declared— — — (428)— (428)
Repurchase of stock(9.8)(1)— (2,265)— (2,266)
Stock options and awards0.2 — 40 — — 40 
January 29, 2022471.3 $39 $6,421 $6,920 $(553)$12,827 

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q5
FINANCIAL STATEMENTS
Table of Contents
Index to Notes
Consolidated Statements of Shareholders’ Investment
 CommonStockAdditional Accumulated Other 
 StockParPaid-inRetainedComprehensive 
(millions) (unaudited)SharesValueCapitalEarnings
(Loss) / Income
Total
January 29, 2022471.3 $39 $6,421 $6,920 $(553)$12,827 
Net earnings— — — 1,009 — 1,009 
Other comprehensive income— — — — 201 201 
Dividends declared— — — (426)— (426)
Repurchase of stock(0.1)— — (10)— (10)
Accelerated share repurchase pending final settlement(8.9)(1)(751)(1,998)— (2,750)
Stock options and awards1.4 1 (78)— — (77)
April 30, 2022463.7 $39 $5,592 $5,495 $(352)$10,774 
Net earnings— — — 183 — 183 
Other comprehensive income— — — — (17)(17)
Dividends declared— — — (502)— (502)
Repurchase of stock(3.6)(1)870 (755)— 114 
Stock options and awards0.1 — 40 — — 40 
July 31, 2022460.2 $38 $6,502 $4,421 $(369)$10,592 

We declared $1.08 and $0.90 dividends per share for the three months ended July 30, 2022, and July 31, 2021, and $3.38 per share for the fiscal year ended January 29, 2022.

See accompanying Notes to Consolidated Financial Statements.Statements.


5

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q6
FINANCIAL STATEMENTS
Table of Contents
INDEX
Index to Notes

INDEX TO NOTES
8
Note 1
8
Note 2
8
Note 3
9
Note 4
10
Note 5
10
Note 6
10
Note 7
10
Note 8
11
Note 9
11
Note 10
12
Note 11
12


TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q7
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
Notes to Consolidated Financial Statements (unaudited)

1. Accounting Policies

These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the Securities and Exchange Commission applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States generally accepted accounting principles (U.S. GAAP) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the financial statement disclosures in our 20162021 Form 10-K.


We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for

We operate as a fair presentationsingle segment that is designed to enable guests to purchase products seamlessly in stores or through our digital channels. Nearly all of quarterly operating resultsour revenues are reflected herein andgenerated in the U.S. The vast majority of our long-lived assets are of a normal, recurring nature. Certain prior-year amounts have been reclassified to conform to the current year presentation. Note 3 provides more information about a reclassification of supply chain-related depreciation expense to cost of sales. Unless otherwise noted, amounts presentedlocated within the Notes to Consolidated Financial Statements refer to our continuing operations.U.S.

Due to the seasonal nature of our business, quarterly revenues, expenses, earnings, and cash flows are not necessarily indicative of the results that may be expected for the full year.


2. RevenuesDermstore Sale


In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). We plan to adopt the standardFebruary 2021, we sold our wholly owned subsidiary Dermstore LLC (Dermstore) for $356 million in the first quartercash and recognized a $335 million pretax gain, which is included in Net Other (Income) / Expense. Dermstore represented less than 1 percent of fiscal 2018 using the full retrospective approach. We do not expect the standard to materially affect our consolidated revenues, operating income and net earnings, financial position, or cash flows. We expect minor changes to the timing of recognition of revenues related to promotional gift cards.assets.


We are nearly complete with our evaluation of the impact the standard has on our determination of whether we act as principal or agent in certain vendor arrangements where the purchase and sale of inventory are virtually simultaneous. We record revenue and related costs on a gross basis for
TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q8
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
3. Revenues

General merchandise sales represent the vast majority of these arrangements, which represent approximately 3 percentour revenues. We also earn revenues from a variety of our consolidated sales. We expect to conclude that we should continue to record these transactions on a gross basis.

We expect to present certain other income streams, includingsources, most notably credit card profit sharingprofit-sharing income from our arrangement with TD Bank Group (TD).

RevenuesThree Months EndedSix Months Ended
(millions)July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Apparel and accessories (a)
$4,617 $4,751 $8,856 $9,020 
Beauty and household essentials (b)
7,208 6,726 14,261 13,090 
Food and beverage (c)
5,268 4,687 10,773 9,543 
Hardlines (d)
3,866 3,867 7,579 7,813 
Home furnishings and décor (e)
4,647 4,748 8,918 9,158 
Other47 47 96 81 
Sales25,653 24,826 50,483 48,705 
Credit card profit sharing181 172 366 343 
Other203 162 358 309 
Other revenue384 334 724 652 
Total revenue$26,037 $25,160 $51,207 $49,357 
(a)Includes apparel for women, men, boys, girls, toddlers, infants and newborns, as well as jewelry, accessories, and shoes.
(b)Includes beauty and personal care, baby gear, cleaning, paper products, and pet supplies.
(c)Includes dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and food service in anour stores.
(d)Includes electronics (including video game hardware and software), toys, entertainment, sporting goods, and luggage.
(e)Includes furniture, lighting, storage, kitchenware, small appliances, home décor, bed and bath, home improvement, school/office supplies, greeting cards and party supplies, and other seasonal merchandise.

Merchandise sales — We record almost all retail store revenues at the point of sale. Digitally originated sales may include shipping revenue line onand are recorded upon delivery to the guest or upon guest pickup at the store. Sales are recognized net of expected returns, which we estimate using historical return patterns and our Consolidated Statementsexpectation of Operations upon adoption.

3. Costfuture returns. As of SalesJuly 30, 2022, January 29, 2022, and Selling, General and Administrative Expenses

Beginning inJuly 31, 2021, the second quarter of 2017, we reclassified supply chain-related depreciation expense to cost of sales whereas itaccrual for estimated returns was previously included in depreciation and amortization on our Consolidated Statements of Operations. We reclassified prior year amounts to reflect this change. This reclassification increased cost of sales by $60$175 million, $165 million, and $189$176 million, respectively.

Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance.

Gift Card Liability ActivityJanuary 29,
2022
Gift Cards Issued During Current Period But Not Redeemed (b)
Revenue Recognized From Beginning LiabilityJuly 30,
2022
(millions)
Gift card liability (a)
$1,202 $423 $(660)$965 
(a)Included in Accrued and Other Current Liabilities.
(b)Net of estimated breakage.

Credit card profit sharing — We receive payments under a credit card program agreement with TD. Under the agreement, we receive a percentage of the profits generated by the Target Credit Card and Target MasterCard receivables in exchange for the threeperforming account servicing and nine months ended October 28, 2017, respectively,primary marketing functions. TD underwrites, funds, and $65 millionowns Target Credit Card and $200 million for the threeTarget MasterCard receivables, controls risk management policies, and nine months ended October 29, 2016, respectively, with equal and offsetting decreases to depreciation and amortization. This reclassification had no impact on sales, earnings before interest expense and income taxes, net earnings or earnings per share.oversees regulatory compliance.

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


TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q9
FINANCIAL STATEMENTS
Table of Contents
Cost of SalesSelling, General and Administrative Expenses
Total cost of products sold including:
•   Freight expenses associated with moving
    merchandise from our vendors to and between our
    distribution centers and our retail stores
•   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 and depreciation
Import costsNOTES
Compensation and benefit costs for stores and
    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 and exit costs of stores and other facilities
U.S. credit cards servicing expenses and profit
    sharing
Costs associated with accepting 3rd party bank issued
    payment cards
Litigation and defense costs and related insurance
    recovery
Other administrative costsIndex to Notes
Note: The classification of these expenses varies across the retail industry.
Other — Includes advertising, Shipt membership and service revenues, commissions earned on third-party sales through Target.com, rental income, and other miscellaneous revenues.




6



4. Fair Value Measurements

Fair value measurements are reported in one of three levels reflecting the valuation techniquessignificant inputs used to determine fair value.

Financial Instruments Measured On a Recurring BasisFair Value
(millions)ClassificationMeasurement LevelJuly 30, 2022January 29, 2022July 31, 2021
Assets   
Short-term investmentsCash and Cash EquivalentsLevel 1$189 $4,985 $6,439 
Prepaid forward contractsOther Current AssetsLevel 126 35 44 
Interest rate swapsOther Current AssetsLevel 234 17 — 
Interest rate swapsOther Noncurrent AssetsLevel 2290 135 160 
Liabilities   
Interest rate swapsOther Noncurrent LiabilitiesLevel 26 — — 

Fair Value Measurements - Recurring Basis Fair Value at
(millions)Pricing CategoryOctober 28,
2017
 January 28,
2017
 October 29,
2016
Assets  
  
  
Cash and cash equivalents  
  
  
Short-term investments held by U.S. entitiesLevel 1$953
 $1,110
 $—
Short-term investments held by entities located outside the U.S. (a)
Level 11,050
 762
 514
Other current assets  
  
  
Prepaid forward contractsLevel 130
 26
 28
Beneficial interest assetLevel 33
 12
 10
Interest rate swaps (b)
Level 2—
 1
 —
Other noncurrent assets  
  
  
Interest rate swaps (b)
Level 21
 4
 19
Beneficial interest assetLevel 3—
 —
 5
Significant Financial Instruments Not Measured at Fair Value (a)

(millions)
July 30, 2022January 29, 2022July 31, 2021
Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Long-term debt, including current portion (b)
$11,511 $11,529 $11,568 $12,808 $10,620 $12,594 
(a) Amounts may be subject to tax if repatriated.
(b) See Note 8 for additional information on interest rate swaps.
Significant Financial Instruments not Measured at Fair Value (a)

(millions)
October 28, 2017 January 28, 2017 October 29, 2016
Carrying
Amount

Fair
Value

 
Carrying
Amount

Fair
Value

 
Carrying
Amount

Fair
Value

Debt (b)
$11,522
$12,403
 $11,715
$12,545
 $11,802
$13,171
(a)The carrying amounts of certain other current assets, commercial paper, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature.
(b)The carrying amount and estimated 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 commercial paper, unamortized swap valuation adjustments, and capital lease obligations.liabilities.


5. Cash and Cash Equivalents

Cash equivalents include highly liquid investments with an original maturity of three months or less from the time of purchase. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions, which typically settle in 5 days or less.
(millions)October 28,
2017
January 28,
2017
October 29,
2016
    
Cash held by U.S. entities$242
$257
$247
Cash held by entities located outside the U.S. (a)
34
17
35
Short-term investments held by U.S. entities953
1,110
—
Short-term investments held by entities located outside the U.S. (a)
1,050
762
514
Receivables from third-party financial institutions for credit and debit card transactions446
366
435
Cash and cash equivalents$2,725
$2,512
$1,231
(a) Amounts may be subject to tax if repatriated.


7



6. Property and Equipment


We review long-lived assets for impairment when store performance expectations, events, or changes in circumstances—such as a decision to relocate or close a store, office, or distribution center, discontinue a project, or make significant software changes or discontinue projects—changes—indicate that the asset’s carrying value may not be recoverable. We recognized impairment lossescharges of $1$27 million and $89$50 million duringfor the three and ninesix months ended October 28, 2017, respectively, primarily resulting from planned or completed store closures and supply chain changes for the nine month period. Storm-related write-offs of property and equipment, net of insurance recoveries, were immaterial.July 30, 2022, respectively. We recognized impairment lossescharges of $9$39 million and $37$81 million duringfor the three and ninesix months ended October 29, 2016, respectively, primarily resulting from planned or completed store closures. The impairments are recorded in selling, general and administrative expense on the Consolidated Statements of Operations andJuly 31, 2021, respectively. These impairment charges are included in segment results.Selling, General and Administrative Expenses (SG&A).


7. Notes Payable6. Commercial Paper and Long-Term Debt

In October 2017, we issued unsecured fixed rate debt of $750 million at 3.9% that matures in November 2047. During the three months ended October 28, 2017, we repurchased $344 million of debt before its maturity at a market value of $463 million. We recognized a loss on early retirement of approximately $123 million, which was recorded in net interest expense in our Consolidated Statements of Operations.

In May 2017, we used cash on hand to repay $598 million of debt at its maturity.

In April 2016, we issued unsecured fixed rate debt of $1 billion at 2.5% that matures in April 2026 and $1 billion at 3.625% that matures in April 2046. During the first and second quarter of 2016, we repurchased $565 million and $824 million of debt, respectively, before its maturity at a market value of $820 million and $981 million, respectively. We recognized a loss on early retirement of approximately $261 million and $161 million in first and second quarter of 2016, respectively, which was recorded in net interest expense in our Consolidated Statements of Operations.

We obtain short-term financing from time to time under our commercial paper program,program. For the six months ended July 30, 2022, the maximum amount outstanding was $1.5 billion, and the average daily amount outstanding was $538 million, at a formweighted average annual interest rate of notes payable.1.1 percent. As of July 30, 2022, $1.5 billion was outstanding and is classified within Current Portion of Long-Term Debt and Other Borrowings on our Consolidated Statement of Financial Position. No balances were outstanding at any time during the nine months ended October 28, 2017. For the three and nine months ended October 29, 2016, the maximum amount outstanding was $89 million and the average daily amounts outstanding were $3 million and $1 million, respectively, at a weighted average annual interest rate of 0.43 percent. At October 29, 2016, $89 million was outstanding.2021.


8.7. Derivative Financial Instruments

Our derivative instruments primarily consist of interest rate swaps which we useused to mitigate interest rate risk. As a result, of our use of derivative instruments, we have counterparty credit exposure to large global financial institutions. Weinstitutions, which we monitor this concentration of counterparty credit risk on an ongoing basis. See Note 4 for a description of to the Consolidated Financial Statements provides the fair value measurementand classification of our derivative instruments and their classification on the Consolidated Statements of Financial Position.these instruments.

As of October 28, 2017 and October 29, 2016,
TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q10
FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes
We were party to interest rate swaps with notional amounts totaling $1,000 million were$2.25 billion as of July 30, 2022, and $1.5 billion as of January 29, 2022, and July 31, 2021. We pay a floating rate and receive a fixed rate under each of these agreements. All of the agreements are designated as fair value hedges.No ineffectiveness was recognizedhedges, and all were considered to be perfectly effective under the shortcut method during the three and ninesix months ended October 28, 2017 or October 29, 2016.July 30, 2022, and July 31, 2021.


As of October 28, 2017 and October 29, 2016, oneWe were party to forward-starting interest rate swapswaps with a notional amountamounts totaling $2.15 billion as of July 30, 2022, and January 29, 2022, and $250 million was notas of July 31, 2021. We use these derivative financial instruments, which have been designated aas cash flow hedges, to hedge the interest rate exposure of anticipated future debt issuances during the next three years. Based on the fair value hedge because it was de-designated concurrent withof these swaps as of July 30, 2022, Accumulated Other Comprehensive Loss (AOCI) included an unrealized gain of $296 million. Any unrealized gain or loss at the repurchasetime of debt during the first half of 2016.

We recorded income of $2 millionissuance will be reclassified and $8 million during the three and nine months ended October 28, 2017, respectively, and $5 million and $21 million during the three and nine months ended October 29, 2016, respectively, within netimpact Net Interest Expense as we record interest expense on our Consolidated Statements of Operations related to periodic payments, valuation adjustments, and amortization of gains or losses on our interest rate swaps.the associated debt.

Effect of Hedges on Debt
(millions)
July 30, 2022January 29, 2022July 31, 2021
Long-term debt and other borrowings
Carrying amount of hedged debt$2,263 $1,572 $1,649 
Cumulative hedging adjustments, included in carrying amount22 77 154 
9. Leases

Effect of Hedges on Net Interest ExpenseThree Months EndedSix Months Ended
(millions)July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swap designated as fair value hedges$49 $22 $(55)$(29)
Hedged debt(49)(22)55 29 
Total$— $— $— $— 
In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

We must adopt the standard no later than the first quarter of 2019, which begins on February 3, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements.

8




We plan to adopt the standard in the first quarter of 2018. We will take advantage of the transition package of practical expedients permitted within the new standard, which among other things, allows us to carryforward the historical lease classification. In addition, we are electing the hindsight practical expedient to determine the reasonably certain lease term for existing leases. While lease classification will remain unchanged, hindsight will result in generally shorter accounting lease terms and useful lives of the corresponding leasehold improvements. We will make an accounting policy election that will keep leases with an initial term of 12 months or less off of the balance sheet and will result in recognizing those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term.

While we are continuing to assess all potential impacts of the standard, we expect total liabilities to increase by $1.3-$1.5 billion, with an offsetting increase to leased assets of $1.2-$1.4 billion as of the date of adoption. The difference between these amounts will be recorded as an adjustment to retained earnings. We do not believe the standard will materially affect our consolidated net earnings. These estimates — based on our current lease portfolio — may change as we continue to evaluate the new standard and as we implement a new lease accounting information system. The estimates could also change due to changes in the lease portfolio, which could include (a) lease volume, (b) lease commencement dates, and (c) renewal option and lease termination expectations. We will update our estimates each quarter as changes occur.

We do not believe the new standard will have a notable impact on our liquidity. The standard will have no impact on our debt-covenant compliance under our current agreements.

10.8. Income Taxes


 Three Months Ended Nine Months Ended
(dollars in millions)October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Income tax expense$137
 $311
 $802
 $910
Effective tax rate (a)
22.3% 33.8% 30.5% 33.0%
(a)For the three and six months ended July 30, 2022, our effective tax rate was 15.8 percent and 18.7 percent, respectively, compared with 23.4 percent and 21.4 percent for the three and six months ended July 31, 2021, respectively. For the three month period, the decrease reflects lower pretax earnings during the three months ended October 28, 2017, the incomeJuly 30, 2022, resulting in a larger tax rate decreased 11.5%benefit from ongoing and discrete tax items, compared with the threeprior year. For the six month period, the decrease reflects lower pretax earnings during the six months ended October 29, 2016. Benefits from our global sourcing operations drove 9.6 percentage pointsJuly 30, 2022, compared with the prior year, partially offset by the impacts of the decline (3.7 percentage points of which is due to lower earnings before income taxes). This includes $55 million of prior-period discrete tax benefits primarily related to our global sourcing operations. Forduring the ninesix months ended October 28, 2017,July 31, 2021, including the resolution of certain income tax rate decreased 2.5% compared with the nine months ended October 29, 2016. Benefits from our global sourcing operations drove 2.7 percentage points of rate decline. This includes $56 million of prior-period discrete tax benefits primarily related to our global sourcing operations.matters.


11.9. Share Repurchase


 Nine Months Ended
(millions, except per share data)October 28,
2017
 October 29,
2016
Total number of shares purchased10.8
 38.5
Average price paid per share$56.80
 $72.87
Total investment$611
 $2,807
Note: Accelerated shareWe periodically repurchase (ASR) activity in 2017 and 2016 is omitted because the transactions were not fully settled as of October 28, 2017 and October 29, 2016.

During the third quarter of 2017, we entered into an ASR to repurchase $150 to $250 millionshares of our common stock under the existing $5 billiona board-authorized repurchase program through a combination of open market transactions, accelerated share repurchase program.(ASR) arrangements, and other privately negotiated transactions with financial institutions.

Share Repurchase ActivityThree Months EndedSix Months Ended
(millions, except per share data)
July 31, 2022 (a)
July 31, 2021
July 31, 2022 (a)
July 31, 2021
Number of shares purchased12.5 6.6 12.5 12.7 
Average price paid per share$211.58 $233.81 $211.57 $213.06 
Total investment$2,636 $1,535 $2,646 $2,700 
(a)    Includes activity related to the ASR arrangement entered in first quarter 2022 because final settlement occurred in second quarter 2022. Under the agreement, we prepaid $250 million and received an initial delivery of 2.5 million shares, which were retired, resulting in a $139 million reduction to shareholders' investment. As of October 28, 2017, $11 million is included in the Consolidated Statement of Financial Position as an additional reduction to shareholders' investment because the minimum repurchase will be $150 million. The remaining $100 million is included in other current assets. The ASR is not accounted for as a derivative instrument.

In November 2017, the ASR settled. We received an additional 0.3 million shares, which were retired, and $89 million for the remaining amount not settled in shares. In total,arrangement, we repurchased 2.812.5 million shares under the ASR for a total cash investment of $161 million ($57.78 per share).

$2.6 billion. We did not enter into any other ASR arrangements during the periods presented.
9

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q11


FINANCIAL STATEMENTS
Table of Contents
NOTES
Index to Notes

During the third quarter of 2016, we entered into an ASR to repurchase $250 to $350 million of our common stock. Under the agreement, we prepaid $350 million and received an initial delivery of 3.4 million shares, which were retired, resulting in a $230 million reduction to shareholders' investment. As of October 29, 2016, $20 million was included in the Consolidated Statement of Financial Position as an additional reduction to shareholders' investment because the minimum repurchase was $250 million. The remaining $100 million was included in other current assets. The ASR was not accounted for as a derivative instrument.

In November 2016, the ASR settled. We received an additional 1.3 million shares, which were retired, and $36 million for the remaining amount not settled in shares. In total, we repurchased 4.6 million shares under the ASR for a total cash investment of $314 million ($67.67 per share).

12.10. Pension Benefits

We provide pension plan benefits to certain eligible team members.


Net Pension Benefits ExpenseThree Months Ended Nine Months Ended
(millions)October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Service cost$21
 $20
 $63
 $61
Interest cost34
 34
 103
 103
Expected return on assets(61) (64) (184) (193)
Amortization of losses15
 12
 45
 37
Amortization of prior service cost(3) (2) (8) (8)
Total$6
 $—
 $19
 $—

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715), which requires employers to disaggregate and present separately the current service cost component from the other components of net benefit cost within the Consolidated Statement of Operations. We plan to adopt the standard in the first quarter of fiscal 2018. We expect to reclassify the other components of net benefit cost to an other income and expense line on our Consolidated Statements of Operations upon adoption.
Net Pension Benefits ExpenseThree Months EndedSix Months Ended
(millions)ClassificationJuly 30, 2022July 31, 2021July 30, 2022July 31, 2021
Service cost benefits earnedSG&A$23 $24 $46 $48 
Interest cost on projected benefit obligationNet Other (Income) / Expense30 24 59 48 
Expected return on assetsNet Other (Income) / Expense(58)(59)(117)(118)
Amortization of lossesNet Other (Income) / Expense15 28 30 57 
Amortization of prior service costNet Other (Income) / Expense10 (1)10 (1)
Total$20 $16 $28 $34 
 
13.11. Accumulated Other Comprehensive Income (Loss)/ Income

Change in Accumulated Other Comprehensive Income (Loss)Cash Flow
Hedges		Currency Translation AdjustmentPensionTotal
(millions)
January 29, 2022$49 $(19)$(583)$(553)
Other comprehensive income (loss) before reclassifications, net of tax163 (1)— 162 
Amounts reclassified from AOCI, net of tax— — 22 22 
July 30, 2022$212 $(20)$(561)$(369)


TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q12
(millions)
Cash Flow
Hedges

 
Currency
Translation
Adjustment

 
Pension and
Other
Benefits

 Total
January 28, 2017$(16) $(21) $(601) $(638)
Other comprehensive income before reclassifications—
 3
 1
 4
Amounts reclassified from AOCI3
(a) 
—
 21
(b) 
24
October 28, 2017$(13) $(18) $(579) $(610)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
FINANCIAL SUMMARY
Index to Notes
(a)Represents amortization of gains and losses on cash flow hedges, net of $2 million of taxes.
(b)Represents amortization of pension and other benefit liabilities, net of $15 million of taxes.


10



14. Segment Reporting
Our segment measure of profit (segment earnings before interest expense and income taxes) is used by management to evaluate performance and make operating decisions. 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 or through our digital channels. Virtually all of our consolidated revenues are generated in the United States. The vast majority of our long–lived assets are located within the United States.
Business Segment ResultsThree Months Ended Nine Months Ended
(millions)October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Sales$16,667
 $16,441
 $49,113
 $48,805
Cost of sales (a)
11,712
 11,536
 34,330
 33,957
Gross margin4,955
 4,905
 14,783
 14,848
Selling, general, and administrative expenses (c)
3,512
 3,343
 10,027
 9,741
Depreciation and amortization (exclusive of depreciation included in cost of sales) (a)
574
 505
 1,596
 1,486
Segment earnings before interest expense and income taxes869
 1,057
 3,160
 3,621
Pharmacy Transaction-related costs (b)(c)
—
 4
 —
 —
Earnings from continuing operations before interest expense and income taxes869
 1,061
 3,160
 3,621
Net interest expense254
 142
 532
 864
Earnings from continuing operations before income taxes$615
 $919
 $2,628
 $2,757
Note: Amounts may not foot due to rounding.
(a) Refer to Note 3 for information about the impact of a reclassification of supply chain-related depreciation expense.
(b) Represents items related to the December 2015 sale of our former pharmacy and clinic businesses to CVS (Pharmacy Transaction).
(c) The sum of segment SG&A expenses and Pharmacy Transaction-related costs equal consolidated SG&A expenses.

Reconciliation of Segment Assets to Total Assets
(millions)
October 28,
2017
 January 28,
2017
 October 29,
2016
Segment assets$40,693
 $37,350
 $38,524
Assets of discontinued operations15
 81
 79
Total assets$40,708
 $37,431
 $38,603


11



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

ExecutiveFinancial Summary

ThirdSecond quarter 2017 includes2022 included the following notable items:


•GAAP diluted earnings per share from continuing operations were $0.87.$0.39.
•Adjusted diluted earnings per share from continuing operations were $0.91.$0.39.
•Total revenue increased 3.5 percent, reflecting total sales growth of 3.3 percent and a 14.8 percent increase in other revenue.
•Comparable sales increased 0.92.6 percent, driven by a 1.42.7 percent increase in traffic.
◦Comparable digital channelstores originated sales grew 1.3 percent.
◦Comparable digitally originated sales increased 249.0 percent.
We devoted $847•Operating income of $321 million to capital investment, paid dividendswas 87.0 percent lower than the comparable prior-year period, driven primarily by a decrease in gross margin, reflecting inventory actions taken as a result of $339 million,lower-than-expected sales in our discretionary categories (Apparel and returned $171 million through share repurchases, including ASR transactions initiated during the quarterAccessories, Hardlines, and settled in November 2017.Home Furnishings and Décor) and supply chain disruptions, as well as increased freight and merchandise costs. See Business Environment below for additional information.


Sales were $16,667 million$25.7 billion for the three months ended October 28, 2017,July 30, 2022, an increase of $226 million$0.8 billion, or 1.43.3 percent, from the same period incomparable prior-year period. Cash flow required for operating activities was $47 million for the prior year. During the third quarter of 2017, Hurricanes Harvey and Irma caused widespread damage in Texas and Florida and resulted in temporary closure of some of our stores. The net sales impact and storm-related costs, net of insurance recoveries, was immaterial. Operatingsix months ended July 30, 2022, compared with $3.4 billion cash flow provided by continuing operations was $4,414 million and $2,770 millionoperating activities for the ninesix months ended October 28, 2017 and October 29, 2016, respectively.July 31, 2021. The drivers of the operating cash flow increase is primarily due to increased payables leverage driven by changes in vendor payment terms during the nine months ended October 28, 2017, compared to the nine months ended October 29, 2016. The operating cash flow increase is also partially due to the payment of approximately $500 million of taxes during the first quarter of 2016, primarily related to the December 2015 sale of our pharmacy and clinic businesses (Pharmacy Transaction)decrease are described on page 20. These increases were partially offset by a larger inventory increase during the nine months ended October 28, 2017 compared to the nine months ended October 29, 2016, due to an earlier increase for the holiday season.

Earnings Per ShareThree Months EndedSix Months Ended
July 30, 2022July 31, 2021ChangeJuly 30, 2022July 31, 2021Change
GAAP diluted earnings per share$0.39 $3.65 (89.2)%$2.55 $7.82 (67.4)%
Adjustments— (0.01)0.03 (0.48)
Adjusted diluted earnings per share$0.39 $3.64 (89.2)%$2.59 $7.34 (64.8)%
Earnings Per Share from Continuing OperationsThree Months Ended  
 Nine Months Ended  
October 28,
2017
 October 29,
2016
 Change
 October 28,
2017
 October 29,
2016
 Change
GAAP diluted earnings per share$0.87
 $1.06
 (17.7)% $3.31
 $3.14
 5.4 %
Adjustments0.04
 (0.01)   0.03
 0.42
  
Adjusted diluted earnings per share$0.91
 $1.04
 (13.1)% $3.34
 $3.56
 (6.2)%
Note: Amounts may not foot due to rounding. Adjusted diluted earnings per share from continuing operations (Adjusted EPS), a non-GAAP metric, excludes the impact of certain items not related to our routine retail operations.items. Management believes that Adjusted EPS is meaningful to provideuseful in providing period-to-period comparisons of the results of our operating results.operations. A reconciliation of non-GAAP financial measures to GAAP measures is provided provided on page 18.18.


We report after-tax return on invested capital (ROIC) from continuing operations because we believe ROIC provides a meaningful measure of the effectiveness of our capital allocation effectiveness over time. For the trailing twelve months ended October 28, 2017,July 30, 2022, after-tax ROIC was 13.718.4 percent, compared with 16.331.7 percent for the trailing twelve months ended October 29, 2016. Excluding the net gain on the Pharmacy Transaction, ROIC was 14.3 percent for the trailing twelve months ended October 29, 2016. A reconciliationJuly 31, 2021. The calculation of ROIC is provided onpage 20.19.



Business Environment

During the first two quarters of 2022, we have seen a shift in consumer demand away from discretionary categories (Apparel and Accessories, Hardlines, and Home Furnishings and Décor), resulting in lower-than-expected sales and higher-than-expected inventories in these areas. In response to this shift in demand, we took several actions to address our inventory position and create additional flexibility in a rapidly changing environment, including increasing promotional and clearance markdowns, removing excess inventory, and cancelling purchase orders. These factors, net of pricing actions we have taken to address the impact of merchandise and freight cost inflation, have resulted in decreased profitability in the first half of 2022 compared to the prior-year period. Additionally, in response to continued disruption in our supply chain, we have ordered and are receiving merchandise earlier, and added incremental holding capacity near U.S. ports to add flexibility in the portions of the supply chain most affected by external volatility. We believe that the actions we have taken, including the reduction of orders for Fall merchandise in our discretionary categories, reduce our risks and provide additional flexibility to focus on serving guests in a rapidly changing environment. The Gross Margin Rate analysis on page 16 and the Inventory section on page 20 provide additional information.

12

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q13


MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF RESULTS OF OPERATIONS
Analysis of Results of Operations

Segment Results
Summary of Operating IncomeThree Months Ended Six Months Ended 
(dollars in millions)July 30, 2022July 31, 2021ChangeJuly 30, 2022July 31, 2021Change
Sales$25,653 $24,826 3.3 %$50,483 $48,705 3.7 %
Other revenue384 334 14.8 724 652 10.9 
Total revenue26,037 25,160 3.5 51,207 49,357 3.7 
Cost of sales20,142 17,280 16.6 38,603 33,996 13.6 
Selling, general and administrative expenses5,002 4,849 3.1 9,764 9,358 4.3 
Depreciation and amortization (exclusive of depreciation included in cost of sales)572 564 1.5 1,173 1,162 0.9 
Operating income$321 $2,467 (87.0)%$1,667 $4,841 (65.6)%

 Three Months Ended  
 Nine Months Ended  
(dollars in millions)October 28,
2017
 October 29,
2016
 Change
 October 28,
2017
 October 29,
2016
 Change
Sales$16,667
 $16,441
 1.4 % $49,113
 $48,805
 0.6 %
Cost of sales (a)
11,712
 11,536
 1.5
 34,330
 33,957
 1.1
Gross margin4,955
 4,905
 1.0
 14,783
 14,848
 (0.4)
SG&A expenses (b)
3,512
 3,343
 5.1
 10,027
 9,741
 2.9
Depreciation and amortization (exclusive of depreciation included in cost of sales) (a)
574
 505
 13.7
 1,596
 1,486
 7.4
EBIT$869
 $1,057
 (17.8)% $3,160
 $3,621
 (12.7)%
Rate AnalysisThree Months EndedSix Months Ended
July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Gross margin rate21.5 %30.4 %23.5 %30.2 %
SG&A expense rate19.2 19.3 19.1 19.0 
Depreciation and amortization expense rate (exclusive of depreciation included in cost of sales)2.2 2.2 2.3 2.4 
Operating income margin rate1.2 9.8 3.3 9.8 
Note: See Note 14 of our Financial Statements for a reconciliation of our segment results to earnings before income taxes.
(a) Refer to Note 3 of the Financial Statements for information about a reclassification of supply chain-related depreciation expense toGross margin rate is calculated as gross margin (sales less cost of sales) divided by sales.
(b) SG&A expenses include $170 million and $512 million net profit-sharing income under our credit card program agreement for the three and nine months ended October 28, 2017, respectively, and $168 million and $489 million for the three and nine months ended October 29, 2016, respectively.

Rate AnalysisThree Months EndedNine Months Ended
 October 28,
2017
 October 29,
2016
October 28,
2017
 October 29,
2016
Gross margin rate (a)
29.7% 29.8%30.1% 30.4%
SG&A expense rate21.1
 20.3
20.4
 20.0
Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate (a)
3.4
 3.1
3.2
 3.0
EBIT margin rate5.2
 6.4
6.4
 7.4
Note: Rate analysis metrics All other rates are computedcalculated by dividing the applicable amount by sales.total revenue.
(a)Reclassifying supply chain-related depreciation expense to cost of sales reduced the gross margin and depreciation and amortization rates by 0.4 percentage points for all periods presented.


13



Sales

Sales include all merchandise sales, net of expected returns, and our estimate of gift card breakage. Digital channelWe use comparable sales include all sales initiated through mobile applications and our conventional websites. Digital channel sales may be fulfilled through our distribution centers, our vendors, or our stores.

Sales by ChannelThree Months Ended Nine Months Ended
 October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Stores95.7% 96.5% 95.7% 96.5%
Digital4.3
 3.5
 4.3
 3.5
Total100% 100% 100% 100%

Sales by Product CategoryThree Months Ended Nine Months Ended
 October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Household essentials (a)
25% 25% 25% 25%
Apparel and accessories21
 21
 21
 21
Food and beverage (a)
20
 21
 21
 21
Home furnishings and décor20
 19
 18
 19
Hardlines14
 14
 15
 14
Total100% 100% 100% 100%
(a) For all periods presented, pet supplies, which represented approximately 2 percent of total sales, has been reclassified from food and beverage to household essentials.

Comparable sales is a measure that highlightsevaluate the performance of our stores and digital channelschannel 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 we have owned less than 13 months, stores that have been closed, and digital acquisitions that we no longer operate. 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. Digitally originated sales include all sales initiated through mobile applications and our websites. Our stores fulfill the majority of digitally originated sales, including shipment from stores to guests, store Order Pickup or Drive Up, and delivery via Shipt. Digitally originated sales may also be fulfilled through our distribution centers, our vendors, or other third parties.

Sales growth—from both comparable sales and new stores—represents an important driver of our long-term profitability. We expect that comparable sales growth will drive the majority of our total sales growth. We believe that our ability to successfully differentiate our guests’ shopping experience through a careful combination of merchandise assortment, price, convenience, guest experience, and other factors will, over the long-term, drive both increasing shopping frequency (traffic) and the amount spent each visit (average transaction amount).

Comparable SalesThree Months EndedSix Months Ended
 July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Comparable sales change2.6 %8.9 %3.0 %15.3 %
Drivers of change in comparable sales    
Number of transactions (traffic)2.7 12.7 3.3 14.8 
Average transaction amount0.0 (3.4)(0.3)0.5 

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q14
Comparable SalesThree Months Ended Nine Months Ended
 October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Comparable sales change0.9 % (0.2)% 0.3 % — %
Drivers of change in comparable sales 
  
  
  
Number of transactions1.4
 (1.2) 0.9
 (1.0)
Average transaction amount(0.5) 1.0
 (0.6) 1.0
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF RESULTS OF OPERATIONS
Comparable Sales by ChannelThree Months EndedSix Months Ended
 July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Stores originated comparable sales change1.3 %8.7 %2.3 %13.0 %
Digitally originated comparable sales change9.0 9.9 6.1 27.3 

Sales by ChannelThree Months EndedSix Months Ended
 July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Stores originated82.1 %83.0 %81.9 %82.3 %
Digitally originated17.9 17.0 18.1 17.7 
Total100 %100 %100 %100 %

Sales by Fulfillment ChannelThree Months EndedSix Months Ended
 July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Stores96.6 %96.6 %96.6 %96.4 %
Other3.4 3.4 3.4 3.6 
Total100 %100 %100 %100 %
Note: Amounts may not foot dueSales fulfilled by stores include in-store purchases and digitally originated sales fulfilled by shipping merchandise from stores to rounding.guests, Order Pickup, Drive Up, and Shipt.


Sales by Product CategoryThree Months EndedSix Months Ended
July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Apparel and accessories18 %19 %18 %18 %
Beauty and household essentials28 27 28 27 
Food and beverage21 19 21 20 
Hardlines15 16 15 16 
Home furnishings and décor18 19 18 19 
Total100 %100 %100 %100 %
Contribution to Comparable Sales ChangeThree Months Ended Nine Months Ended
 October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Stores channel comparable sales change—% (1.0)% (0.6)% (0.7)%
Digital channel contribution to comparable sales change0.8
 0.7
 0.9
 0.6
Total comparable sales change0.9% (0.2)% 0.3 % — %

Note: Amounts may not foot dueNote 3 to rounding.

the Financial Statements provides additional product category sales information. The collective interaction of a broad array of macroeconomic, competitive, and consumer behavioral factors, as well as sales mix and the transfer of sales to new stores, makes further analysis of sales metrics infeasible.


14




We monitor the percentage of salespurchases that are paid for using REDcards (REDcardRedCards (RedCard Penetration) because our internal analysis has indicated that a meaningful portion of the incremental purchases on REDcardsRedCards are also incremental sales for Target. Guests receive a 5 percent discount on virtually all purchases when they use a REDcardRedCard at Target. RedCard sales increased for the three and six months ended July 30, 2022, and July 31, 2021; however, RedCard penetration declined as total Sales increased at a faster pace.

REDcard PenetrationThree Months Ended Nine Months Ended
RedCard PenetrationRedCard PenetrationThree Months EndedSix Months Ended
October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
 July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Target Debit Card12.9% 12.9% 13.1% 12.9%Target Debit Card11.2 %11.6 %11.4 %11.9 %
Target Credit Cards11.4
 11.4
 11.3
 11.0
Target Credit Cards8.9 8.7 8.8 8.6 
Total REDcard Penetration24.2% 24.3% 24.4% 23.9%
Total RedCard PenetrationTotal RedCard Penetration20.1 %20.3 %20.2 %20.4 %
Note: Amounts may not foot due to rounding.



TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q15
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF RESULTS OF OPERATIONS
Gross Margin Rate
tgt2015q2gmrateqtra07.jpg
tgt-2017729_chartx20282a01.jpgQuarter-to-Date

tgt-20220730_g3.jpg

Year-to-Date
tgt-20220730_g4.jpg
For the three and nine months ended October 28, 2017,July 30, 2022, our gross margin rate was 29.721.5 percent and 30.1 percent, respectively, compared with 29.8 percent and 30.4 percent in the comparable periods last year.prior-year period. For the six months ended July 30, 2022, our gross margin rate was 23.5 percent compared with 30.2 percent in the comparable prior-year period. For both the three and ninesix months ended October 28, 2017,July 30, 2022, the decrease was primarily due to increased digital fulfillment costs. The rate was also affected byreflected the net impact of

•merchandising pressure, including
◦higher clearance and promotional markdown rates, which were largely the result of inventory impairments and other items, including benefits from cost savings initiatives,actions taken in our discretionary categories; and
◦higher merchandise and freight costs and higher inventory shrink, partially offset by the net impactsbenefit of retail price increases;
•supply chain pressure related to increased compensation and headcount in our efforts to improve pricingdistribution centers, costs of managing excess inventory, and promotions.higher last-mile shipping cost; and

•unfavorable mix in the relative growth rates of higher and lower margin categories.



Business Environment on page 13 provides additional information.
15




Selling, General, and Administrative Expense Rate
tgt-2015050_chartx49372a09.jpg
tgt-2017729_chartx23049a01.jpg


For the three and nine months ended October 28, 2017,July 30, 2022, our SG&A expense rate was 21.119.2 percent and 20.4compared with 19.3 percent respectively, compared to 20.3 percent and 20.0 percent infor the comparable periods last year. The increaseprior-year period. For the six months ended July 30, 2022, our SG&A expense rate was primarily due to higher compensation due to both bonus expense and store wages, partially offset by cost savings driven by efficiency in our technology operations and,19.1 percent compared with 19.0 percent for the third quarter, timing of marketing campaigns.

Depreciation and Amortization Expense Rate

comparable prior-year end. For both the three and ninesix months ended October 28, 2017,July 30, 2022, the rates reflected lower incentive compensation, and the net impact of cost increases across our depreciation and amortization (exclusive of depreciation includedbusiness, including investments in cost of sales) expense rate was 3.4 percent and 3.2 percent, respectively,hourly team member wages, compared to 3.1 percent and 3.0 percent in the comparable periods last year. These increases were primarily due to higher accelerated depreciation for planned store remodels.prior-year periods.


TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q16
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF RESULTS OF OPERATIONS
Store Data

Change in Number of StoresThree Months EndedSix Months Ended
July 30, 2022July 31, 2021July 30, 2022July 31, 2021
Beginning store count1,933 1,909 1,926 1,897 
Opened5 2 12 14 
Closed(1)(2)(1)(2)
Ending store count1,937 1,909 1,937 1,909 
Change in Number of StoresThree Months Ended Nine Months Ended
 October 28,
2017
 October 29,
2016
 October 28,
2017
 October 29,
2016
Beginning store count1,816
 1,797
 1,802
 1,792
Opened12
 5
 26
 11
Closed—
 (2) —
 (3)
Ending store count1,828
 1,800
 1,828
 1,800


Number of Stores and
Retail Square Feet		Number of Stores
Retail Square Feet (a)
July 30, 2022January 29, 2022July 31, 2021July 30, 2022January 29, 2022July 31, 2021
170,000 or more sq. ft.273 274 273 48,798 49,071 48,798 
50,000 to 169,999 sq. ft.1,521 1,516 1,510 190,734 190,205 189,624 
49,999 or less sq. ft.143 136 126 4,256 4,008 3,709 
Total1,937 1,926 1,909 243,788 243,284 242,131 

16



Number of Stores and
Retail Square Feet		Number of Stores 
Retail Square Feet (a)
October 28,
2017
January 28,
2017
October 29,
2016
 October 28,
2017
January 28,
2017
October 29,
2016
170,000 or more sq. ft.276
276
278
 49,326
49,328
49,685
50,000 to 169,999 sq. ft.1,508
1,504
1,503
 190,038
189,620
189,496
49,999 or less sq. ft.44
22
19
 1,268
554
464
Total1,828
1,802
1,800
 240,632
239,502
239,645
(a)In thousands,thousands; reflects total square feet less office, distribution center, and vacant space.
 
Other Performance Factors


Net Interest Expense

Net interest expense from continuing operations was $254$112 million and $532$224 million for the three and ninesix months ended October 28, 2017,July 30, 2022, respectively, compared to $142with $104 million and $864$212 million forin the comparable periods last year. Netprior-year periods. The increase in net interest expense was primarily due to higher average debt and commercial paper levels for the three and ninesix months ended October 28, 2017 included a net loss on early retirement of debt of $123 million. July 30, 2022, compared with the prior-year periods.

Net interest expenseOther (Income) / Expense

Net Other (Income) / Expense was $(8) million and $(23) million for the ninethree and six months ended October 29, 2016July 30, 2022, respectively, compared with $(7) million and $(350) million in the comparable prior-year periods. The six months ended July 31, 2021, included a lossthe $335 million pretax gain on early retirementthe February 2021 sale of debt of $422 million.Dermstore. Note 2 to the Financial Statements provides additional information.


Provision for Income Taxes
 
Our effective income tax rate from continuing operations for the three and ninesix months ended October 28, 2017July 30, 2022, was 22.315.8 percent and 30.518.7 percent, respectively, compared with 33.823.4 percent and 33.021.4 percent forin the respective comparable periods last year.prior-year periods. For the three and nine months ended October 28, 2017,month period, the decrease was primarily due to prior-period discrete tax benefits related to our global sourcing operations. The rate decrease for both the three and nine months ended October 28, 2017, was also due to a benefit from our global sourcing operations related to our 2017 taxes, the rate impact ofreflects lower pretax earnings in the current year resulting in a larger tax rate benefit from ongoing and the resolution of otherdiscrete tax matters.items. For the nine months ended October 28, 2017, these items weresix month period, the decrease reflects lower pretax earnings in the current period, partially offset by the recognitionimpacts of excessdiscrete tax benefits related to share-based payments forin the nine months ended October 29, 2016.prior-year period, including the resolution of certain income tax matters. Our effective tax rate is generally more volatile at lower amounts of pretax income because the impact of discrete, deductible, and nondeductible tax items and credits is greater.



17

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q17


MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Index to Notes
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 certain items 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 for, generally accepted accounting principles in the United States (GAAP).to, U.S. GAAP. The most comparable GAAP measure is diluted earnings per share from continuing operations.share. Adjusted EPS should not be considered in isolation or as a substitution for analysis of our results as reported underin accordance with GAAP. Other companies may calculate Adjusted EPS differently, limiting the usefulness of the measure for comparisons with other companies.


Reconciliation of Non-GAAP Adjusted EPSThree Months Ended
July 30, 2022July 31, 2021
(millions, except per share data)PretaxNet of TaxPer SharePretaxNet of TaxPer Share
GAAP diluted earnings per share$0.39 $3.65 
Adjustments
Other (a)
$— $— $— $(5)$(4)$(0.01)
Adjusted diluted earnings per share$0.39 $3.64 
  Three Months Ended
  October 28, 2017 October 29, 2016
(millions, except per share data) Pretax
 Net of Tax
 Per Share Amounts
 Pretax
 Net of Tax
 Per Share Amounts
GAAP diluted earnings per share from continuing operations     $0.87
     $1.06
Adjustments            
Loss on early retirement of debt $123
 $75
 $0.14
 $—
 $—
 $—
Pharmacy Transaction-related costs —
 —
 —
 (4) (3) —
Income tax matters (a)
 —
 (55) (0.10) —
 (5) (0.01)
Adjusted diluted earnings per share from continuing operations     $0.91
     $1.04


  Nine Months Ended
  October 28, 2017 October 29, 2016
(millions, except per share data) Pretax
 Net of Tax
 Per Share Amounts
 Pretax
 Net of Tax
 Per Share Amounts
GAAP diluted earnings per share from continuing operations     $3.31
     $3.14
Adjustments            
Loss on early retirement of debt $123
 $75
 $0.14
 $422
 $257
 $0.44
Pharmacy Transaction-related costs —
 —
 —
 —
 —
 —
Income tax matters (a)
 —
 (56) (0.10) —
 (8) (0.01)
Adjusted diluted earnings per share from continuing operations     $3.34
     $3.56
Reconciliation of Non-GAAP Adjusted EPSSix Months Ended
July 30, 2022July 31, 2021
(millions, except per share data)PretaxNet of TaxPer SharePretaxNet of TaxPer Share
GAAP diluted earnings per share$2.55 $7.82 
Adjustments
Gain on Dermstore sale$— $— $— $(335)$(269)$(0.54)
Other (a)
20 15 0.03 36 27 0.05 
Adjusted diluted earnings per share$2.59 $7.34 
Note: Amounts may not foot due to rounding.
(a) Represents income from income tax matters not relatedOther items unrelated to current period operations. For the three and nine months ended October 28, 2017, primarily represents prior-period discrete tax benefits related to our global sourcing operations.operations, none of which were individually significant.




18



We have presented consolidated earnings from continuing operationsEarnings before interest expense and income taxes (EBIT) and earnings before interest expense, income taxes, depreciation, and amortization (EBITDA), are non-GAAP financial measures, because wemeasures. We believe that these measures provide meaningful information about our operational efficiency compared towith our competitors by excluding the impact of differences in tax jurisdictions and structures, debt levels, and, for EBITDA, capital investment. These measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States (GAAP).to, GAAP. The most comparable GAAP measure is net earnings from continuing operations. Consolidatedearnings. EBIT and EBITDA should not be considered in isolation or as a substitution for analysis of our results as reported underin accordance with GAAP. Other companies may calculate consolidated EBIT and EBITDA differently, limiting the usefulness of the measuremeasures for comparisons with other companies.

EBIT and EBITDA Three Months Ended   Nine Months Ended  EBIT and EBITDAThree Months Ended Six Months Ended 

(millions) (unaudited)
 October 28,
2017		 October 29,
2016		 Change October 28,
2017		 October 29,
2016		 Change
Net earnings from continuing operations $478
 $608
 (21.5)% $1,826
 $1,847
 (1.1)%
(dollars in millions)(dollars in millions)July 30, 2022July 31, 2021ChangeJuly 30, 2022July 31, 2021Change
Net earningsNet earnings$183 $1,817 (89.9)%$1,192 $3,914 (69.6)%
+ Provision for income taxes 137
 311
 (55.8) 802
 910
 (11.9)+ Provision for income taxes34 553 (93.8)274 1,065 (74.3)
+ Net interest expense 254
 142
 79.1
 532
 864
 (38.4)+ Net interest expense112 104 8.0 224 212 5.8 
EBIT 869
 1,061
 (18.1) 3,160
 3,621
 (12.7)EBIT$329 $2,474 (86.7)%$1,690 $5,191 (67.4)%
+ Total depreciation and amortization (a)
 633
 570
 11.1
 1,784
 1,686
 5.8
+ Total depreciation and amortization (a)
650 633 2.8 1,329 1,300 2.3 
EBITDA $1,502
 $1,631
 (7.9)% $4,944
 $5,307
 (6.8)%EBITDA$979 $3,107 (68.5)%$3,019 $6,491 (53.5)%
(a)Represents total depreciation and amortization, including amounts classified within depreciationDepreciation and amortizationAmortization and within costCost of sales on our Consolidated Statements of Operations.Sales.


19

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q18




MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Index to Notes
We have also disclosed after-tax ROIC, which is a ratio based on GAAP information, with the exception of adjustments madethe add-back of operating lease interest 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.income. We believe this metric provides a meaningful measure ofis useful in assessing the effectiveness of our capital allocation over time. Other companies may calculate ROIC differently, limiting the usefulness of the measure for comparisons with other companies.


After-Tax Return on Invested Capital
(dollars in millions)
Trailing Twelve Months
NumeratorJuly 30, 2022July 31, 2021
Operating income$5,773 $8,611 
 + Net other income / (expense)54 346 
EBIT5,827 8,957 
 + Operating lease interest (a)
88 84 
  - Income taxes (b)
1,282 1,918 
Net operating profit after taxes$4,633 $7,123 
After-Tax Return on Invested Capital  
     
Numerator Trailing Twelve Months  
(dollars in millions) October 28,
2017
 October 29,
2016
  
Earnings from continuing operations before interest expense and income taxes $4,508
 $5,790
  
+ Operating lease interest (a)(b)
 78
 72
  
Adjusted earnings from continuing operations before interest expense and income taxes 4,586
 5,862
  
- Income taxes (c)
 1,420
 1,849
  
Net operating profit after taxes $3,166
 $4,013
  


DenominatorJuly 30, 2022July 31, 2021August 1, 2020
Current portion of long-term debt and other borrowings$1,649 $1,190 $109 
 + Noncurrent portion of long-term debt13,453 11,589 14,188 
 + Shareholders' investment10,592 14,860 12,578 
 + Operating lease liabilities (c)
2,823 2,695 2,448 
  - Cash and cash equivalents1,117 7,368 7,284 
Invested capital$27,400 $22,966 $22,039 
Average invested capital (d)
$25,183 $22,502 
After-tax return on invested capital18.4 %31.7 %
Denominator
(dollars in millions) 
 October 28,
2017
 October 29,
2016
 October 31,
2015
Current portion of long-term debt and other borrowings $1,354
 $729
 $825
+ Noncurrent portion of long-term debt 11,277
 12,097
 11,887
+ Shareholders' equity 11,137
 11,069
 13,256
+ Capitalized operating lease obligations (b)(d)
 1,298
 1,192
 1,503
- Cash and cash equivalents 2,725
 1,231
 1,977
- Net assets of discontinued operations 4
 60
 197
Invested capital $22,337
 $23,796
 $25,298
Average invested capital (e)
 $23,067
 $24,547
  
After-tax return on invested capital (f)
 13.7% 16.3%  
(a)Represents the add-back to operating income to reflectdriven by the hypothetical interest expense we would incur if the property under our operating leases were owned or accounted for as capital leases,finance leases. Calculated using eight times our trailing twelve monthsthe discount rate for each lease and recorded as a component of rent expense within SG&A. Operating lease interest is added back to operating income in the ROIC calculation to control for differences in capital structure between us and an estimated interest rate of six percent.our competitors.
(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,rates, which was 31.0were 21.7 percent and 31.521.2 percent for the trailing twelve months ended October 28, 2017July 30, 2022, and October 29, 2016,July 31, 2021, respectively. For the trailing twelve months ended October 28, 2017July 30, 2022, and October 29, 2016,July 31, 2021, includes tax effect of $1,396 million$1.3 billion and $1,826 million, respectively,$1.9 billion related to EBIT, and $24$19 million and $23$18 million, respectively, related to operating lease interest.
(d) Calculated as eight times our trailing twelve months rent expense.(c)Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities, respectively.
(e)(d)Average based on the invested capital at the end of the current period and the invested capital at the end of the comparable prior period.
(f) Excluding the net gain on the Pharmacy Transaction, ROIC was 14.3 percent for the trailing twelve months ended October 29, 2016.

Capitalized operating lease obligations and operating lease interest are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. 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.



20



TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q19
Reconciliation of Capitalized Operating Leases Trailing Twelve Months
(dollars in millions)  October 28,
2017
 October 29,
2016
 October 31,
2015
Total rent expense $162
 $149
 $188
Capitalized operating lease obligations (total rent expense x 8) 1,298
 1,192
 1,503
Operating lease interest (capitalized operating lease obligations x 6%) 78
 72
 n/a

MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF FINANCIAL CONDITION
Index to Notes
Analysis of Financial Condition

Liquidity and Capital Resources

Capital Allocation

We follow a disciplined and balanced approach to capital allocation based on the following priorities, ranked in order of importance: first, we fully invest in opportunities to profitably grow our business, create sustainable long-term value, and maintain our current operations and assets; second, we maintain a competitive quarterly dividend and seek to grow it annually; and finally, we return any excess cash to shareholders by repurchasing shares within the limits of our credit rating goals.

Our cash and cash equivalents balance was $2,725 million at October 28, 2017, compared with $1,231 million for the same period in 2016. As$1.1 billion, $5.9 billion, and $7.4 billion as of October 28, 2017, $1,084 million ofJuly 30, 2022, January 29, 2022, and July 31, 2021, respectively. Our cash and cash equivalents were held at entities located outside the United Statesbalance includes short-term investments of $189 million, $5.0 billion, and may be subject to taxation if repatriated.$6.4 billion as of July 30, 2022, January 29, 2022, and July 31, 2021, respectively. Our investment policy is designed to preserve principal and liquidity of our short-term investments. This policy allows investments in large money market funds or in highly rated direct short-term instruments that mature in 60 days or less. We also place certain dollar limits on our investments in individual funds or instruments.

Capital Allocation

We follow a disciplined and balanced approach to capital allocation, based on the following priorities, ranked in order of importance: first, we fully invest in opportunities to grow our business profitably, create sustainable long-term value, and maintain our current operations and assets; second, we maintain a competitive quarterly dividend and seek to grow it annually; and finally, we return excess cash to shareholders by repurchasing shares within the limits of our credit rating goals.

Operating Cash Flows
 
Operating cash flow provided by continuing operations was $4,414Cash flows required for operating activities were $47 million for the ninesix months ended October 28, 2017,July 30, 2022, compared with $2,770 million$3.4 billion of cash flows provided by operating activities for the same period in 2016. Thesix months ended July 31, 2021. For the six months ended July 30, 2022, operating cash flow increase isflows decreased as a result of lower earnings, increased inventory levels and lower accounts payable leverage due to increased payables leverage primarily driven by changes in vendor payment terms duringdecreased inventory turnover, compared with the ninesix months ended October 28, 2017,July 31, 2021.

Inventory

Inventory was $15.3 billion as of July 30, 2022, compared with $13.9 billion and $11.3 billion at January 29, 2022, and July 31, 2021, respectively. The increase over the balance as of July 31, 2021, primarily reflects the following:
•our decision to the nine months ended October 29, 2016. The operating cash flow increase is also partiallymove merchandise receipt timing earlier due to the payment of approximately $500 million of taxes during the first quarter of 2016, primarily related to the Pharmacy Transaction. These increases wereexpected supply chain volatility,
•investments in our inventory position in our frequency categories (Food and Beverage and Beauty and Household Essentials),
•lower-than-expected sales in our discretionary categories, partially offset by a larger inventory increaseactions taken during the ninecurrent year to reduce excess inventory in these categories, and
•increases in unit costs across all of our categories.

The increase was amplified by unintentionally low inventory levels last year resulting from supply chain disruptions, and demand shifts, described within the Business Environment section on page 13.

Investing Cash Flows

Investing cash flows included capital investments of $2.5 billion and $1.3 billion for the six months ended October 28, 2017 compared toJuly 30, 2022, and July 31, 2021, respectively. The increase primarily reflects an increase in store remodel activity, investment in supply chain, and the nineimpact of inflation on these projects. For the six months ended October 29, 2016, due to an earlier increase for the holiday season. In October 2017, we issued $750July 31, 2021, investing cash flows included $356 million of unsecured debt that matures in 2047. Combined with our prior year-end cash position, these proceeds and operating cash flows allowed us to invest infrom the business, retire debt, pay dividends, and repurchase shares under our share repurchase program.sale of Dermstore.
Share Repurchases
We returned $171 million and $772 million to shareholders through share repurchase during the three and nine months ended October 28, 2017, respectively, and $878 million and $3,121 million during the three and nine months ended October 29, 2016, respectively. For the three and nine months ended October 28, 2017 and October 29, 2016, these amounts include $161 million and $314 million, respectively, repurchased through ASR transactions initiated during the third quarter with the final settlement in November 2017 and November 2016, respectively. See Part II, Item 2 of this Quarterly Report on Form 10-Q and Note 11 to the Financial Statements for more information.

Dividends
 
We paid dividends totaling $339$417 million ($0.620.90 per share) and $1,001$841 million ($1.821.80 per share) for the three and ninesix months ended October 28, 2017,July 30, 2022, respectively, and $345$336 million ($0.600.68 per share) and $1,011$676 million ($1.721.36 per share) for the three and ninesix months ended October 29, 2016,July 31, 2021, respectively, a per share increase of 3.3 percent and 5.8 percent, respectively.32.4 percent. We declared dividends totaling $341$502 million ($0.621.08 per share) in thirdduring the second quarter 2017,of 2022 and $445 million ($0.90 per share) during the second quarter of 2021, a per share increase of 3.3 percent over the $342 million ($0.60 per share) of declared dividends during the third quarter of 2016.20.0 percent. 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.

21

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q20


MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
ANALYSIS OF FINANCIAL CONDITION
Index to Notes
Short-term
Share Repurchase

We returned $2.6 billion to shareholders through share repurchase during the six months ended July 30, 2022. See Part II, Item 2, Unregistered Sales of Equity Securities and Long-term Use of Proceeds of this Quarterly Report on Form 10-Q and Note 9 to the Financial Statements for more information.

Financing

Our financing strategy is to ensure liquidity and access to capital markets, to maintain a balanced spectrum of debt maturities, and to manage our net exposure to floating interest rate volatility. 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 October 28, 2017July 30, 2022, our credit ratings were as follows:

Credit RatingsMoody’sStandard and Poor’sFitch
Long-term debtA2AA-A
Commercial paperP-1A-1F2F1

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.

We have additional liquidity through athe ability to obtain short-term financing from time to time under our commercial paper program and credit facility. Our committed $2.5 billion revolving credit facility obtained through a group of banks in October 2016. In October 2017, we extended this credit facility by one year, which now expires in October 2022. This unsecured revolving credit facility replaced a $2.25$3.0 billion unsecured revolving credit facility that was scheduled to expireexpires in October 2018.2026 and backstops our commercial paper program. No balances were outstanding under eitherour credit facility at any time during 20172022 or 2016.2021. As of July 30, 2022, we had $1.5 billion outstanding under our commercial paper program. We did not have any balances outstanding under our commercial paper program as of July 31, 2021. Note 6 to the Financial Statements provides additional information.

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, as of October 28, 2017,July 30, 2022, 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;control and (ii) our long-term debtcredit ratings are either reduced and the resulting rating is noninvestmentnon-investment grade, or our long-term debtcredit ratings are placed on watch for possible reduction and those ratings are subsequently reduced and the resulting rating is noninvestmentnon-investment grade.

We believe our sources of liquidity, namely operating cash flows, credit facility capacity, and access to capital markets, will continue to be adequate to maintain operations,meet our contractual obligations, working capital and planned capital expenditures, finance anticipated expansion and strategic initiatives, fund debt maturities, pay dividends, and execute purchases under our share repurchase program for the foreseeable future. We continue to anticipate ample access to commercial paper and long-term financing.

Contractual Obligations and Commitments
As of the date of this report, other than the new borrowings and payments discussed in Note 7 of the Financial Statements, there were no material changes to our contractual obligations and commitments outside the ordinary course of business since January 28, 2017 as reported in our 2016 Form 10-K.
New Accounting Pronouncements


Refer to Note 2, Note 9, and Note 12 of the Financial Statements for a description of new accounting pronouncements related to revenues, leases, and pension benefits, respectively. We do not expect any other recently issued accounting pronouncements willto have a material effect on our financial statements.


TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q21
MANAGEMENT'S DISCUSSION AND ANALYSIS & SUPPLEMENTAL INFORMATION
Table of Contents
FORWARD LOOKING STATEMENTS & CONTROLS AND PROCEDURES
Index to Notes
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.words. 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 funding of debt maturities, 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,and new lease commitments, the expected compliance with debt covenants, the expected impact of new accounting pronouncements, our intentions regarding future dividends, the expected return on plan assets, the expected outcome of, and adequacy of our reserves for, claims, litigation and the resolution of tax matters, and changes in our assumptions and expectations.


22



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 onin our description of risk factors included inPart I, Item 1A, Risk Factorsof our Form 10-K for the fiscal year ended January 28, 2017,29, 2022, 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 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk of our Form 10-K for the fiscal year ended January 28, 2017.29, 2022.

Item 4. Controls and Procedures

Changes in Internal Control Over Financial Reporting

ThereDuring the most recently completed fiscal quarter, there were no changes in our internal control over financial reporting during the third quarter of 2017 that havewhich 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 quarterly 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 at thea reasonable assurance level. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the Securities and Exchange Commission (SEC)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.



23

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q22


SUPPLEMENTAL INFORMATION
Table of Contents
Index to Notes
PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The following update to a previously reported proceedingNo response is being reported pursuant torequired under Item 103 of Regulation S-K:S-K.


The Federal Securities Law Class Actions and ERISA Class Actions relating to certain prior disclosures of Target about its expansion of retail operations into Canada (the “Canada Disclosure”) were previously described in described in Target’s annual report on Form 10-K for the fiscal year ended January 28, 2017 and in Target’s quarterly report on Form 10-Q for the fiscal quarter ended July 29, 2017. Both the Federal Securities Law Class Actions and the ERISA Class Actions were dismissed by the United States District Court for the District of Minnesota on July 31, 2017. During the quarter ended October 28, 2017, the plaintiffs in both cases sought to refile their claims, as described below. Target intends to continue to vigorously defend these actions.

Federal Securities Law Class Actions

On August 29, 2017 the plaintiff filed a motion to alter or amend the final judgment entered by the United States District Court for the District of Minnesota on July 31, 2017 dismissing the Federal Securities Law Class Actions. The plaintiffs also asked the Court for permission to file a Second Amended Class Action Complaint (the “Second Complaint)”, which, like the prior complaint, alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 relating to the Canada Disclosure. Target, its former chief executive officer, its present chief operating officer, and the former president of Target Canada are named as defendants in the Second Complaint. The plaintiff seeks to represent a class consisting of all purchasers of Target common stock between March 20, 2013 and August 4, 2014. The plaintiff seeks damages and other relief, including attorneys’ fees, based on allegations that the defendants misled investors about the performance and prospects of Target Canada and that such conduct affected the market price of Target common stock. On October 16, 2017, Target and the other defendants filed their opposition to plaintiff’s motion to alter or amend the final judgment dismissing the Federal Securities Law Class Actions. The plaintiff’s motion has not yet been heard or decided.

ERISA Class Actions

On August 30, 2017 the plaintiffs in the ERISA Class Actions, which were dismissed on July 31, 2017, filed a new ERISA Class Action (the “Second ERISA Class Action”) in the United States District Court for the District of Minnesota, which, like the prior ERISA Class Actions, alleges violations of Sections 404 and 405 of ERISA relating to the Canada Disclosure. The Second ERISA Class Action is captioned Dormani, et al. v. Target Corporation, et al., Case No. 0:17-cv-04049-JNE-BRT. Target, the Plan Investment Committee, and seven present or former officers are named as defendants in the Second ERISA Class Action Complaint. The plaintiffs seek to represent a class consisting of all persons who were participants in or beneficiaries of the Target Corporation 401(k) Plan or the Target Corporation Ventures 401(k) Plan (collectively, the “Plans”) at any time between February 27, 2013 and August 6, 2014 and whose Plan accounts included investments in Target stock. The plaintiffs seek damages, an injunction and other unspecified equitable relief, and attorneys’ fees, expenses, and costs, based on allegations that the defendants breached their fiduciary duties under ERISA by failing to take action to prevent Plan participants from continuing to purchase Target stock during the class period at prices that allegedly were artificially inflated. On November 13, 2017, Target and the other defendants filed a motion to dismiss the Second ERISA Class Action. The motion has not yet been heard or decided.

Item 1A. Risk Factors

There have been no material changes to the risk factors described in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the fiscal year ended January 28, 2017.29, 2022.


24



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On September 20, 2016,August 11, 2021, our Board of Directors authorized a new $5$15 billion share repurchase program. We began repurchasing shares under this new authorization during the fourth quarter of 2016. There isprogram with no stated expiration for the share repurchase program.expiration. Under the program, we have repurchased 14.523.8 million shares of common stock through October 28, 2017, at an average price of $60.27,$223.52, for a total investment of $0.9 billion, excluding the August 2017 ASR because the transaction was not fully settled as of October 28, 2017.$5.3 billion. The table below presents information with respect to Target common stock purchases made during the three months ended October 28, 2017,July 30, 2022, by Target or any "affiliated purchaser" of Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.


Share Repurchase ActivityTotal Number
of Shares
Purchased		Average
Price
Paid per
Share		Total Number of
Shares Purchased
as Part of Publicly Announced Programs		Dollar Value of
Shares that May
Yet Be Purchased
Under Publicly Announced Programs
Period
May 1, 2022 through May 28, 2022
Open market and privately negotiated purchases— $— — $12,316,056,660 
May 29, 2022 through July 2, 2022
Open market and privately negotiated purchases— — — 12,316,056,660 
March 2022 ASR (a)
3,569,904 211.58 3,569,904 9,680,505,231 
July 3, 2022 through July 30, 2022
Open market and privately negotiated purchases— — — 9,680,505,231 
Total3,569,904 $211.58 3,569,904 $9,680,505,231 
Period
Total Number
of Shares
Purchased

 
Average
Price
Paid per
Share

 
Total Number of
Shares Purchased
as Part of Publicly Announced Programs

 
Dollar Value of
Shares that May
Yet Be Purchased
Under Publicly Announced Programs

July 30, 2017 through August 26, 2017       
August 2017 ASR (a)
2,500,000
 TBD
 2,500,000
 $3,884,046,448
August 27, 2017 through September 30, 2017       
Open market and privately negotiated purchases169,233
 58.74
 169,233
 3,874,106,311
October 1, 2017 through October 28, 2017       
Open market and privately negotiated purchases—
 —
 —
 3,874,106,311
Total2,669,233
 TBD
 2,669,233
 $3,874,106,311
(a)In November 2017,Represents the contract was settled and weincremental shares received an additional 0.3 million shares, which were retired, and $89 millionupon final settlement of the accelerated share repurchase (ASR) agreement initiated in first quarter 2022. $211.58 represents the average price paid per share for the remaining amount not settled in shares. The $8912.5 million in addition to the amount reflected in the table, is available under the program. Wetotal shares repurchased a total of 2.8 million shares under the ASR, for total cash investmentwhich consists of $161the 8.9 million or an average per share price of $57.78. Refershares initially delivered in first quarter 2022 and the 3.6 million shares received upon final settlement in second quarter 2022. Note 9 to Note 11 of the Financial Statements for further details about the ASR contract.provides additional information.


Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.



25

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q23


SUPPLEMENTAL INFORMATION
Table of Contents
Index to Notes
Item 6. Exhibits

(3)A
(3)B
(10)LLE
(10)MM
Amendment dated October 25, 2017 to Target Corporation Deferred Compensation Trust AgreementSPP I (2022 Plan Statement) (as amended and restated effective JanuaryMay 1, 2009)2022)
(12)(10)F
(31)A(10)J
(10)KK
(31)A
(31)B
(32)A
(32)B
101.INSXBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


(1)Incorporated by reference to Exhibit (3)A to the Registrant’s Form 8-K Report filed June 10, 2010.
 
(2)Incorporated by reference to Exhibit (3)AB to the Registrant’s Form 8-K Report filed November 12, 2015.



April 2, 2020.
26

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q24


SUPPLEMENTAL INFORMATION
Table of Contents
Index to Notes
SIGNATURESIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TARGET CORPORATION
Dated: August 26, 2022By: /s/ Michael J. Fiddelke
Michael J. Fiddelke
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
TARGET CORPORATION/s/ Matthew A. Liegel
Matthew A. Liegel
Dated: November 20, 2017By: /s/ Cathy R. Smith
Cathy R. Smith
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
/s/ Robert M. Harrison
Robert M. Harrison
Senior Vice President, Chief Accounting Officer
and Controller



27

TARGET CORPORATION
tgt-20220730_g2.jpg
Q2 2022 Form 10-Q25