Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Oct. 31, 2009 | 3 Months Ended
Nov. 01, 2008 | 9 Months Ended
Oct. 31, 2009 | 9 Months Ended
Nov. 01, 2008 |
Consolidated Statements of Operations | ||||
Sales | $14,789 | $14,588 | $43,717 | $43,861 |
Credit card revenues | 487 | 526 | 1,459 | 1,527 |
Total revenues | 15,276 | 15,114 | 45,176 | 45,388 |
Cost of sales | 10,229 | 10,130 | 30,080 | 30,332 |
Selling, general and administrative expenses | 3,255 | 3,245 | 9,405 | 9,436 |
Credit card expenses | 381 | 403 | 1,153 | 1,023 |
Depreciation and amortization | 537 | 469 | 1,487 | 1,352 |
Earnings before interest expense and income taxes | 874 | 867 | 3,051 | 3,245 |
Net interest expense | ||||
Nonrecourse debt collateralized by credit card receivables | 23 | 60 | 74 | 126 |
Other interest expense | 168 | 180 | 517 | 550 |
Interest income | (6) | (3) | (24) | |
Net interest expense | 191 | 234 | 588 | 652 |
Earnings before income taxes | 683 | 633 | 2,463 | 2,593 |
Provision for income taxes | 247 | 264 | 911 | 988 |
Net earnings | $436 | $369 | $1,552 | $1,605 |
Basic earnings per share (in dollars per share) | 0.58 | 0.49 | 2.06 | 2.07 |
Diluted earnings per share (in dollars per share) | 0.58 | 0.49 | 2.06 | 2.06 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 751.8 | 753.5 | 752 | 776.4 |
Diluted (in shares) | 755.7 | 756.6 | 754.3 | 780.1 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position (USD $) | |||
In Millions | Oct. 31, 2009
| Jan. 31, 2009
| Nov. 01, 2008
|
Assets | |||
Cash and cash equivalents, including marketable securities of $ 273, $302 and $397 | $864 | $864 | $918 |
Credit card receivables, net of allowance of $1,025, $1,010 and $765 | 7,023 | 8,084 | 7,999 |
Inventory | 9,382 | 6,705 | 9,050 |
Other current assets | 2,314 | 1,835 | 2,272 |
Total current assets | 19,583 | 17,488 | 20,239 |
Property and equipment | |||
Land | 5,754 | 5,767 | 5,727 |
Buildings and improvements | 22,250 | 20,430 | 20,454 |
Fixtures and equipment | 4,732 | 4,270 | 4,212 |
Computer hardware and software | 2,599 | 2,586 | 2,610 |
Construction-in-progress | 291 | 1,763 | 1,320 |
Accumulated depreciation | (10,035) | (9,060) | (8,798) |
Property and equipment, net | 25,591 | 25,756 | 25,525 |
Other noncurrent assets | 805 | 862 | 1,277 |
Total assets | 45,979 | 44,106 | 47,041 |
Liabilities and shareholders' investment | |||
Accounts payable | 7,641 | 6,337 | 7,590 |
Accrued and other current liabilities | 3,117 | 2,913 | 3,057 |
Unsecured debt and other borrowings | 577 | 1,262 | 2,849 |
Nonrecourse debt collateralized by credit card receivables | 1,063 | ||
Total current liabilities | 12,398 | 10,512 | 13,496 |
Unsecured debt and other borrowings | 11,432 | 12,000 | 11,966 |
Nonrecourse debt collateralized by credit card receivables | 4,463 | 5,490 | 5,478 |
Deferred income taxes | 804 | 455 | 589 |
Other noncurrent liabilities | 1,911 | 1,937 | 1,932 |
Total noncurrent liabilities | 18,610 | 19,882 | 19,965 |
Shareholders' investment | |||
Common stock | 63 | 63 | 63 |
Additional paid-in capital | 2,866 | 2,762 | 2,725 |
Retained earnings | 12,559 | 11,443 | 10,967 |
Accumulated other comprehensive loss | (517) | (556) | (175) |
Total shareholders' investment | 14,971 | 13,712 | 13,580 |
Total liabilities and shareholders' investment | $45,979 | $44,106 | $47,041 |
Common shares outstanding (in shares) | 752.2 | 752.7 | 752.8 |
1_Consolidated Statements of Fi
Consolidated Statements of Financial Position (Parenthetical) (USD $) | |||
In Millions | Oct. 31, 2009
| Jan. 31, 2009
| Nov. 01, 2008
|
Consolidated Statements of Financial Position | |||
Cash and cash equivalents, marketable securities | $273 | $302 | $397 |
Credit card receivables, allowance | $1,025 | $1,010 | $765 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 9 Months Ended
Oct. 31, 2009 | 9 Months Ended
Nov. 01, 2008 |
Operating activities | ||
Net earnings | $1,552 | $1,605 |
Reconciliation to cash flow | ||
Depreciation and amortization | 1,487 | 1,352 |
Share-based compensation expense | 72 | 43 |
Deferred income taxes | 451 | (32) |
Bad debt expense | 900 | 751 |
Loss on disposal of property and equipment, net | 85 | 33 |
Other non-cash items affecting earnings | 44 | 165 |
Changes in operating accounts providing/(requiring) cash | ||
Accounts receivable originated at Target | 190 | (313) |
Inventory | (2,677) | (2,270) |
Other current assets | (251) | (322) |
Other noncurrent assets | 27 | 5 |
Accounts payable | 1,303 | 869 |
Accrued and other current liabilities | (148) | (270) |
Other noncurrent liabilities | (8) | 4 |
Other | 160 | |
Cash flow provided by operations | 3,027 | 1,780 |
Investing activities | ||
Expenditures for property and equipment | (1,440) | (2,827) |
Proceeds from disposal of property and equipment | 25 | 26 |
Change in accounts receivable originated at third parties | (29) | (383) |
Other investments | 10 | (179) |
Cash flow required for investing activities | (1,434) | (3,363) |
Financing activities | ||
Change in commercial paper, net | 1,382 | |
Reductions of short-term notes payable | (500) | |
Additions to long-term debt | 3,557 | |
Reductions of long-term debt | (1,255) | (1,254) |
Dividends paid | (369) | (345) |
Repurchase of stock | (2,815) | |
Stock option exercises and related tax benefit | 31 | 34 |
Other | (8) | |
Cash flow (required for)/provided by financing activities | (1,593) | 51 |
Net increase/(decrease) in cash and cash equivalents | (1,532) | |
Cash and cash equivalents at beginning of period | 864 | 2,450 |
Cash and cash equivalents at end of period | $864 | $918 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (USD $) | |||||||||||||||||||
In Millions | Common Stock
| Additional Paid-in Capital
| Retained Earnings
| Pension and Other Benefit Liability Adjustments
| Derivative Instruments and Other
| Total
| |||||||||||||
Shareholders' investment, beginning balance (in shares) at Feb. 02, 2008 | 818.7 | ||||||||||||||||||
Shareholders' investment, beginning balance at Feb. 02, 2008 | $68 | $2,656 | $12,761 | ($134) | ($44) | $15,307 | |||||||||||||
Shareholders' investment, beginning balance (in shares) at Feb. 02, 2008 | 818.7 | ||||||||||||||||||
Shareholders' investment, beginning balance at Feb. 02, 2008 | 68 | 2,656 | 12,761 | (134) | (44) | 15,307 | |||||||||||||
Net earnings | 2,214 | 2,214 | |||||||||||||||||
Pension and other benefit liability adjustments, net of taxes of $25 for 2009 and $242 for 2008 | (376) | (376) | |||||||||||||||||
Unrealized losses on cash flow hedges, net of taxes of $2 for 2009 and $2 for 2008 | (2) | (2) | |||||||||||||||||
Total comprehensive income | 1,836 | ||||||||||||||||||
Dividends declared | (471) | [1] | (471) | [1] | |||||||||||||||
Repurchase of stock | (5) | (3,061) | (3,066) | ||||||||||||||||
Repurchase of stock (in shares) | -67.2 | ||||||||||||||||||
Stock options and awards | 106 | 106 | |||||||||||||||||
Stock options and awards (in shares) | 1.2 | ||||||||||||||||||
Shareholders' investment, ending balance at Jan. 31, 2009 | 63 | 2,762 | 11,443 | (510) | (46) | 13,712 | |||||||||||||
Shareholders' investment, ending balance (in shares) at Jan. 31, 2009 | 752.7 | ||||||||||||||||||
Net earnings | 1,552 | 1,552 | |||||||||||||||||
Pension and other benefit liability adjustments, net of taxes of $25 for 2009 and $242 for 2008 | 38 | 38 | |||||||||||||||||
Unrealized losses on cash flow hedges, net of taxes of $2 for 2009 and $2 for 2008 | 2 | 2 | |||||||||||||||||
Currency translation adjustment, net of taxes of $0 for 2009 | (1) | (1) | |||||||||||||||||
Total comprehensive income | 1,591 | ||||||||||||||||||
Dividends declared | (376) | [1] | (376) | [1] | |||||||||||||||
Repurchase of stock | (60) | (60) | |||||||||||||||||
Repurchase of stock (in shares) | -1.5 | ||||||||||||||||||
Stock options and awards | 104 | 104 | |||||||||||||||||
Stock options and awards (in shares) | 1 | ||||||||||||||||||
Shareholders' investment, ending balance at Oct. 31, 2009 | $63 | $2,866 | $12,559 | ($472) | ($45) | $14,971 | |||||||||||||
Shareholders' investment, ending balance (in shares) at Oct. 31, 2009 | 752.2 | ||||||||||||||||||
[1]Dividends declared per share were $0.17 and $0.16 for the three months ended October 31, 2009 and November 1, 2008, respectively, and $0.50 and $0.46 for the nine months ended October 31, 2009 and November 1, 2008, respectively. For the fiscal year ended January 31, 2009, dividends declared per share were $0.62. |
2_Consolidated Statements of Sh
Consolidated Statements of Shareholders' Equity (Parenthetical) (USD $) | |||
Pension and Other Benefit Liability Adjustments
| Derivative Instruments and Other
| Total
| |
Statement of Stockholders' Equity [Abstract] | |||
Pension and other benefit liability adjustments, tax | $242,000,000 | $242,000,000 | |
Unrealized losses on cash flow hedges, tax | 2,000,000 | 2,000,000 | |
Statement of Stockholders' Equity [Abstract] | |||
Pension and other benefit liability adjustments, tax | 25,000,000 | 25,000,000 | |
Unrealized losses on cash flow hedges, tax | 2,000,000 | 2,000,000 | |
Currency translation adjustment, tax | $0 | $0 |
Accounting Policies
Accounting Policies | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Accounting Policies | 1.Accounting Policies The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statement disclosures contained in the 2008 Form10-K for Target Corporation (Target or the Corporation). The same accounting policies are followed in preparing quarterly financial data as are followed in preparing annual data. See Note 1 in our Form10-K for the fiscal year ended January31, 2009 for those policies. In the opinion of management, all adjustments necessary for a fair statement of quarterly operating results are reflected herein and are of a normal, recurring nature. We evaluated subsequent events through December4, 2009, the date of the filing of this Form10-Q. 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. |
Earnings Per Share
Earnings Per Share | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Earnings Per Share | 2.Earnings Per Share Basic earnings per share (EPS) is net earnings divided by the weighted average number of common shares outstanding during the period. Diluted EPS includes the incremental shares assumed to be issued upon the exercise of stock options and the incremental shares assumed to be issued under performance share and restricted stock unit arrangements. Basic EPS Diluted EPS Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Earnings Per Share Oct.31 , Nov.1 , Oct.31 , Nov.1 , Oct.31 , Nov.1 , Oct.31 , Nov.1 , (millions, except per share data) 2009 2008 2009 2008 2009 2008 2009 2008 Net earnings $ 436 $ 369 $ 1,552 $ 1,605 $ 436 $ 369 $ 1,552 $ 1,605 Basic weighted average common shares outstanding 751.8 753.5 752.0 776.4 751.8 753.5 752.0 776.4 Incremental stock options, performance share units and restricted stock units 3.9 3.1 2.3 3.7 Weighted average common shares outstanding 751.8 753.5 752.0 776.4 755.7 756.6 754.3 780.1 Earnings per share $ 0.58 $ 0.49 $ 2.06 $ 2.07 $ 0.58 $ 0.49 $ 2.06 $ 2.06 For the October31, 2009 and November1, 2008 computations, 16.3 million and 13.7 million stock options, respectively, were excluded from the calculation of weighted average shares for diluted EPS because their effects were antidilutive. |
Fair Value Measurements
Fair Value Measurements | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Fair Value Measurements | 3.Fair Value Measurements The fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. A liabilitys fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Fair value measurements are categorized into one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs available at the measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). The following table presents financial assets and liabilities measured at fair value on a recurring basis: Fair Value Measurements Recurring Basis Fair Value at Fair Value at Fair Value at October31, 2009 January31, 2009 November1, 2008 (millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents Marketable securities $ 273 $ $ $ 302 $ $ $ 397 $ $ Other current assets Prepaid forward contracts 54 68 86 Equity swaps 1 1 Other noncurrent assets Interest rate swaps(a) 134 163 88 Company-owned life insurance investments(b) 292 296 438 Total $ 620 $ 134 $ $ 667 $ 163 $ $ 921 $ 88 $ Liabilities Other noncurrent liabilities Interest rate swaps $ $ 21 $ $ $ 30 $ $ $ $ Total $ $ 21 $ $ $ 30 $ $ $ $ (a) At November1, 2008, two interest rate swaps with a combined fair value of $25 million were designated as accounting hedges. (b) Company-owned life insurance investments consist of equity index funds and fixed income assets. Amounts are presented net of loans that are secured by some of these policies of $240 million at October31, 2009, $197 million at January31, 2009, and $441 million at November1, 2008. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). The fair value measurements related to long-lived assets held for sale and held and used in the following table were determined using available market prices at the measurement date based on recent investments or pending transactions of similar assets, third-party independent appraisals, valuation multiples and/or public comparables. We classify these measurements as Level 2. The fair value measurement of an intangible asset was determined using unobservable inputs that reflect our own assumptions regarding how market participants price the intangible assets at the measurement |
Credit Card Receivables
Credit Card Receivables | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Credit Card Receivables | 4. Credit Card Receivables Credit card receivables are recorded net of an allowance for expected losses. The allowance, recognized in an amount equal to anticipated future write-offs of existing receivables, was $1,025 million at October31, 2009, $1,010 million at January31, 2009 and $765 million at November1, 2008. This allowance includes provisions for uncollectible finance charges and other credit-related fees. We estimate future write-offs based on historical experience of delinquencies, risk scores, aging trends, and industry risk trends. Substantially all accounts continue to accrue finance charges until they are written off. Total receivables past due ninety days or more and still accruing finance charges were $370 million at October31, 2009, $393 million at January31, 2009 and $336 million at November1, 2008. Accounts are written off when they become 180 days past due. Under certain circumstances, we offer cardholder payment plans that modify finance charges and minimum payments, which meet the accounting definition of a troubled debt restructuring (TDRs). These concessions are made on an individual cardholder basis for economic or legal reasons specific to each individual cardholders circumstances. As a percentage of period-end gross receivables, receivables classified as TDRs were 6.7 percent at October31, 2009, 4.9 percent at January31, 2009, and 4.0 percent at November1, 2008. Receivables classified as TDRs are treated consistently with other aged receivables in determining our allowance for doubtful accounts. As a method of providing funding for our credit card receivables, we sell on an ongoing basis all of our consumer credit card receivables to Target Receivables Corporation (TRC), a wholly owned, bankruptcy remote subsidiary. TRC then transfers the receivables to the Target Credit Card Master Trust (the Trust), which from time to time will sell debt securities to third parties either directly or through a related trust. These debt securities represent undivided interests in the Trust assets. TRC uses the proceeds from the sale of debt securities and its share of collections on the receivables to pay the purchase price of the receivables to the Corporation. We consolidate the receivables within the Trust and any debt securities issued by the Trust, or a related trust, in our Consolidated Statements of Financial Position based upon the applicable accounting guidance. The receivables transferred to the Trust are not available to general creditors of the Corporation. The payments to the holders of the debt securities issued by the Trust or the related trust are made solely from the assets transferred to the Trust or the related trust and are nonrecourse to the general assets of the Corporation. Upon termination of the securitization program and repayment of all debt securities, any remaining assets could be distributed to the Corporation in a liquidation of TRC. In the second quarter of 2008, we sold an interest in our credit card receivables to a JPMorgan Chase affiliate (JPMC). The interest sold represented 47 percent of the receivables portfolio at the time of the transaction. This transaction was ac |
Contingencies
Contingencies | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Contingencies | 5. Contingencies We are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities. We do not believe that any of the currently identified claims or litigation will materially affect our results of operations, cash flows or financial condition. |
Notes Payable
Notes Payable | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Notes Payable | 6.Notes Payable We obtain short-term financing from time to time under our commercial paper program, a form of notes payable. There were no amounts outstanding under our commercial paper program at October31, 2009 or January31, 2009. Notes payable under this program totaled $1,382 at November1, 2008 and are included in the current portion of unsecured debt and other borrowings in the Consolidated Statement of Financial Position. |
Derivative Financial Instrument
Derivative Financial Instruments | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Derivative Financial Instruments | 7.Derivative Financial Instruments Derivative financial instruments are reported at fair value on the Consolidated Statements of Financial Position. Our derivative instruments have been primarily interest rate swaps. We use these derivatives to mitigate our interest rate risk. We have counterparty credit risk resulting from our derivative instruments. This risk lies primarily with two global financial institutions. We monitor this concentration of counterparty credit risk on an ongoing basis. Historically, the majority of our derivative instruments were designated as hedge instruments in accordance with applicable accounting guidance. The changes in market value of an interest rate swap, as well as the offsetting change in market value of the hedged debt, were recognized within earnings in the current period. We assessed at the inception of the derivative hedge whether the hedge was highly effective in offsetting changes in fair value or cash flows of hedged items. Ineffectiveness resulted when changes in the market value of the hedged debt were not completely offset by changes in the market value of the interest rate swap. For those derivative contracts whose terms met the conditions of the short-cut method, 100 percent hedge effectiveness was assumed. There was no ineffectiveness recognized during the three and nine months ended October31, 2009 and November1, 2008 related to our hedges. At October31, 2009, we had no derivative instruments designated as accounting hedges. During the first quarter of 2008, we terminated certain pay floating interest rate swaps with a combined notional amount of $3,125 million for cash proceeds of $160 million, which are classified within other operating cash flows in the Consolidated Statements of Cash Flows. Because these swaps were designated as hedges, concurrent with their terminations, we stopped making market value adjustments to the associated hedged debt. Gains realized upon termination are being amortized into earnings over the remaining life of the associated hedged debt. Additionally, during 2008, we de-designated certain pay floating interest rate swaps, and upon de-designation, these swaps no longer qualified for hedge accounting treatment. As a result of the de-designation, the unrealized gains on these swaps determined at the date of de-designation are being amortized into earnings over the remaining lives of the previously hedged items. Total net gains amortized into net interest expense for terminated and de-designated swaps were $13 million during the three months ended October31, 2009 and $14 million during the three months ended November1, 2008. Total net gains amortized into net interest expense for terminated and de-designated swaps were $46 million and $40 million during the nine months ended October31, 2009 and November1, 2008, respectively. The amount remaining on unamortized hedged debt valuation gains from terminated and de-designated interest rate swaps that will be amortized into earnings over the remaining lives totaled $216 million, $263 million and $206 million, at October31, 2009, January31, 2009 and November1, 2008. Simultaneous to the de-designa |
Income Taxes
Income Taxes | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Income Taxes | 8. Income Taxes We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations for years before 2006 and, with few exceptions, are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before 2003. We accrue for the effects of uncertain tax positions and the related potential penalties and interest. There were no material adjustments to our recorded liability for unrecognized tax benefits during the three and nine months ended October31, 2009. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next 12 months. During the three months ended October31, 2009, we filed income tax returns that included tax accounting method changes allowed under applicable tax regulations. These changes resulted in a substantial increase in tax deductions related to property and equipment, resulting in an increase in noncurrent deferred income tax liabilities of approximately $300 million and a corresponding increase in current income taxes receivable, which is classified as other current assets in the Consolidated Statements of Financial Position. These changes did not affect income tax expense during the quarter. |
Share Repurchase
Share Repurchase | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Share Repurchase | 9. Share Repurchase During the three months ended October31, 2009, we repurchased 0.3 million shares of our common stock, for a total cash investment of $14 million (average price per share of $43.80), of which $9 million was paid in prior periods. During the nine months ended October31, 2009, we repurchased 1.5 million shares of our common stock, for a total cash investment of $56 million (average price per share of $36.57), of which $42 million was paid in prior periods. All shares reacquired during the three and nine months ended October31, 2009 were delivered upon settlement of prepaid forward contracts. The prepaid forward contracts settled during the three months ended October31, 2009 had a total cash investment of $14 million and an aggregate market value of $15 million at their respective settlement dates. The prepaid forward contracts settled during the nine months ended October31, 2009 had a total cash investment of $56 million and an aggregate market value of $60 million at their respective settlement dates. In November2008 we announced a temporary suspension to our open-market share repurchase program. See Note 10, Pension, Postretirement Health Care and Other Benefits, for further details of our prepaid forward contracts. During the three months ended November1, 2008, we repurchased 2.5 million shares of our common stock, for a total cash investment of $140 million ($54.93 per share), all of which was paid in prior periods. During the nine months ended November1, 2008, we repurchased 66.8 million shares of our common stock for a total cash investment of $3,380 million ($50.54 per share), of which $453 million was paid in prior periods. Of the repurchases during the nine months ended November1, 2008, 30 million shares were acquired through the exercise of call options. Since the inception of our share repurchase program, which began in the fourth quarter of 2007, we have repurchased 95.2 million shares of our common stock, for a total cash investment of $4,897 million (average price per share of $51.42). |
Pension, Postretirement Health
Pension, Postretirement Health Care and Other Benefits | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Pension, Postretirement Health Care and Other Benefits | 10. Pension, Postretirement Health Care and Other Benefits We have qualified defined benefit pension plans covering team members who meet age and service requirements, including in certain circumstances date of hire. We also have unfunded, nonqualified pension plans for team members with qualified plan compensation restrictions. Benefits are provided based on years of service and team member compensation. Upon retirement, team members also become eligible for certain health care benefits if they meet minimum age and service requirements and agree to contribute a portion of the cost. Net Pension Expense and Pension Benefits Postretirement Health Care Benefits Postretirement Healthcare Three Months Ended Nine Month Ended Three Months Ended Nine Months Ended Expense Oct.31, Nov.1, Oct.31, Nov.1, Oct.31, Nov.1, Oct.31, Nov.1, (millions) 2009 2008 2009 2008 2009 2008 2009 2008 Service cost $ 25 $ 24 $ 75 $ 70 $ 2 $ 1 $ 5 $ 3 Interest cost 32 29 94 87 2 2 6 6 Expected return on assets (44 ) (41 ) (132 ) (121 ) Recognized losses 6 4 18 12 Recognized prior service cost (1 ) (1 ) (3 ) (3 ) Total $ 18 $ 15 $ 52 $ 45 $ 4 $ 3 $ 11 $ 9 In the first quarter of 2009, we made a discretionary contribution of $100 million to our qualified defined benefit pension plan. We are likely to make contributions of $100 million or more during the fourth quarter of 2009, depending on a variety of factors, including the return on our pension plan assets in the fourth quarter of 2009. During the three months ended October31, 2009, we amended our postretirement health care plan, resulting in a $46 million reduction to our recorded liability, with a corresponding increase to shareholders equity of $28 million, net of taxes of $18 million. At October31, 2009 our postretirement health care liability was $74 million. The financial benefits of this amendment will be recognized through a reduction of benefit plan expense over the next 6 years. We also maintain a nonqualified, unfunded deferred compensation plan for approximately 3,400 current and retired team members whose participation in our 401(k)plan is limited by statute or regulation. These team members choose from a menu of crediting rate alternatives that are the same as the investment choices in our 401(k)plan, including Target common stock. We credit an additional two percent per year to the accounts of all active participants, excluding executive officer participants, in part to recognize the risks inherent to their participation in a plan of this nature. We also maintain a nonqualified, unfunded deferred compensation plan that was frozen during 1996, covering 11 current and 50 retired participants. In this plan, deferred compensation earns returns tied to market levels of intere |
Segment Reporting
Segment Reporting | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Segment Reporting | 11. Segment Reporting Our measure of profit for each segment is a measure that management considers analytically useful in measuring the return we are achieving on our investment. Business Segment Results ThreeMonthsEndedOctober31,2009 ThreeMonthsEndedNovember1,2008 Credit Credit (millions) Retail Card Total Retail Card Total Sales/Credit card revenues $ 14,789 $ 487 $ 15,276 $ 14,588 $ 526 $ 15,114 Cost of sales 10,229 10,229 10,130 10,130 Bad debt expense(a) 301 301 314 314 Selling, general and administrative/Operations and marketing expenses(a),(b) 3,236 99 3,335 3,221 113 3,334 Depreciation and amortization 533 4 537 465 4 469 Earnings before interest expense and income taxes 791 83 874 772 95 867 Interest expense on nonrecourse debt collateralized by credit card receivables 23 23 60 60 Segment profit $ 791 $ 60 851 $ 772 $ 35 807 Unallocated (income) and expenses Other interest expense 168 180 Interest income (6 ) Earnings before income taxes $ 683 $ 633 (a) The combination of bad debt expense and operations and marketing expenses within the Credit Card Segment represent credit card expenses on the Consolidated Statements of Operations. (b) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $19 million for the three months ended October31, 2009 and $24 million for the three months ended November1, 2008 are recorded as a reduction to SGA expenses within the Retail Segment and an increase to operations and marketing expenses within the Credit Card Segment. Note: The sum of the segment amounts may not equal the total amounts due to rounding. BusinessSegmentResults NineMonthsEndedOctober31,2009 NineMonthsEndedNovember1,2008 Credit Credit (millions) Retail Card Total Retail Card Total Sales/Credit card revenues $ 43,717 $ 1,459 $ 45,176 $ 43,861 $ 1,527 $ 45,388 Cost of sales 30,080 30,080 30,332 30,332 Bad debt expense(a) 900 900 751 751 Selling, general and administrative/ Operations and marketing expenses(a), (b) 9,345 312 9,658 9,361 347 9,708 Depreciation and amortization 1,476 11 1,487 1,339 13 1,352 Earnings before interest expense and income taxes 2,816 236 3,051 2,829 416 3,245 Interest expense on nonrecourse debt collateralized by credit card receivables 74 74 126 126 Segment profit $ 2,816 $ 162 2,977 $ 2,829 $ 290 3,119 Unallocated (income) and expenses Other inte |
Subsequent Events
Subsequent Events | |
9 Months Ended
Oct. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements | |
Subsequent Events | 12. Subsequent Events On November6, 2009, the United States District Court of New York approved the distribution of settlement funds to class members for the Visa Check/Mastermoney Antitrust Litigation. Accordingly, we will record a gain of approximately $25 million (as a reduction of SGA expenses in the Consolidated Statements of Operations) and will likely receive the settlement proceeds in the fourth quarter of 2009. |
Document and Entity Information
Document and Entity Information (USD $) | |||
9 Months Ended
Oct. 31, 2009 | Dec. 02, 2009
| Aug. 02, 2008
| |
Document and Entity Information | |||
Entity Registrant Name | TARGET CORP | ||
Entity Central Index Key | 0000027419 | ||
Document Type | 10-Q | ||
Document Period End Date | 2009-10-31 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $33,662,914,485 | ||
Entity Common Stock, Shares Outstanding | 752,312,784 |