Target Reports Third Quarter 2012 Earnings

In addition to the GAAP results provided in this release, the company provides adjusted diluted earnings per share for the three and nine months ended October 27, 2012 and October 29, 2011. This measure is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. The most comparable GAAP measure is diluted earnings per share. Management believes adjusted EPS is useful in providing period-to-period comparisons of the results of the company’s U.S. operations. Adjusted EPS should not be considered in isolation or as a substitution for analysis of the company’s results as reported under GAAP. Other companies may calculate adjusted EPS differently than the company does, limiting the usefulness of the measure for comparisons with other companies.

About Target

Minneapolis-based Target Corporation (NYSE:TGT) serves guests at 1,782 stores across the United States and at Target.com. The company plans to open its first stores in Canada in 2013. Since 1946, Target has given 5 percent of its profit through community grants and programs; today, that giving equals more than $4 million a week. For more information about Target’s commitment to corporate responsibility, visit Target.com/hereforgood.

For more information, visit Target.com/Pressroom.

TARGET CORPORATION
Consolidated Statements of Operations
			Three Months Ended													Nine Months Ended
			October 27,				October 29,									October 27,				October 29,
(millions, except per share data) (unaudited)			2012				2011				Change					2012				2011				Change
Sales			$	16,601			$	16,054			3.4		%			$	49,589			$	47,529			4.3		%
Credit card revenues				328				348			(5.8	)					986				1,048			(6.0	)
Total revenues				16,929				16,402			3.2						50,575				48,577			4.1
Cost of sales				11,569				11,165			3.6						34,406				32,874			4.7
Selling, general and administrative expenses				3,704				3,525			5.1						10,686				10,230			4.4
Credit card expenses				106				109			(3.4	)					333				283			17.4
Depreciation and amortization				542				546			(0.7	)					1,603				1,568			2.2
Gain on receivables held for sale				(156	)			-			n/a						(156	)			-			n/a
Earnings before interest expense and income taxes				1,164				1,057			10.1						3,703				3,622			2.3
Net interest expense				192				200			(4.1	)					558				574			(2.7	)
Earnings before income taxes				972				857			13.4						3,145				3,048			3.2
Provision for income taxes				335				302			10.8						1,107				1,100			0.6
Net earnings			$	637			$	555			14.8		%			$	2,038			$	1,948			4.6		%
Basic earnings per share			$	0.97			$	0.82			18.0		%			$	3.09			$	2.85			8.3		%
Diluted earnings per share			$	0.96			$	0.82			17.6		%			$	3.06			$	2.84			7.9		%
Weighted average common shares outstanding
Basic				654.8				673.2			(2.7	)	%				659.3				682.2			(3.4	)	%
Diluted				662.2				678.3			(2.4	)	%				665.8				686.9			(3.1	)	%

TARGET CORPORATION
Consolidated Statements of Financial Position
			October 27,					January 28,					October 29,
(millions)			2012					2012					2011
Assets			(unaudited)										(unaudited)
Cash and cash equivalents, including short-term investments of $800, $194 and $66			$	1,469				$	794				$	821
Credit card receivables, held for sale				5,647					-					-
Credit card receivables, net of allowance of $0, $430 and $431				-					5,927					5,713
Inventory				9,533					7,918					9,890
Other current assets				1,846					1,810					1,948
Total current assets				18,495					16,449					18,372
Property and equipment
Land				6,188					6,122					6,069
Buildings and improvements				27,800					26,837					26,850
Fixtures and equipment				5,280					5,141					5,153
Computer hardware and software				2,418					2,468					2,457
Construction-in-progress				1,365					963					546
Accumulated depreciation				(12,982	)				(12,382	)				(12,035	)
Property and equipment, net				30,069					29,149					29,040
Other noncurrent assets				1,015					1,032					1,035
Total assets			$	49,579				$	46,630				$	48,447
Liabilities and shareholders' investment
Accounts payable			$	8,050				$	6,857				$	8,053
Accrued and other current liabilities				3,631					3,644					3,273
Unsecured debt and other borrowings				2,528					3,036					2,313
Nonrecourse debt collateralized by credit card receivables				1,500					750					500
Total current liabilities				15,709					14,287					14,139
Unsecured debt and other borrowings				14,526					13,447					12,897
Nonrecourse debt collateralized by credit card receivables				-					250					3,259
Deferred income taxes				1,279					1,191					1,199
Other noncurrent liabilities				1,713					1,634					1,689
Total noncurrent liabilities				17,518					16,522					19,044
Shareholders' investment
Common stock				55					56					56
Additional paid-in capital				3,854					3,487					3,431
Retained earnings				13,069					12,959					12,340
Accumulated other comprehensive loss
Pension and other benefit liabilities				(581	)				(624	)				(516	)
Currency translation adjustment and cash flow hedges				(45	)				(57	)				(47	)
Total shareholders' investment				16,352					15,821					15,264
Total liabilities and shareholders' investment			$	49,579				$	46,630				$	48,447
Common shares outstanding				654.5					669.3					671.4

TARGET CORPORATION
Consolidated Statements of Cash Flows
			Nine Months Ended
			October 27,					October 29,
(millions) (unaudited)			2012					2011
Operating activities
Net earnings			$	2,038				$	1,948
Reconciliation to cash flow
Depreciation and amortization				1,603					1,568
Share-based compensation expense				74					61
Deferred income taxes				73					397
Bad debt expense				141					67
Gain on receivables held for sale				(156	)				-
Non-cash (gains)/losses and other, net				(15	)				76
Changes in operating accounts:
Accounts receivable originated at Target				97					120
Inventory				(1,615	)				(2,294	)
Other current assets				(98	)				(131	)
Other noncurrent assets				-					49
Accounts payable				1,193					1,428
Accrued and other current liabilities				(109	)				(360	)
Other noncurrent liabilities				122					46
Cash flow provided by operations				3,348					2,975
Investing activities
Expenditures for property and equipment				(2,338	)				(3,750	)
Proceeds from disposal of property and equipment				35					7
Change in accounts receivable originated at third parties				192					253
Other investments				86					(114	)
Cash flow required for investing activities				(2,025	)				(3,604	)
Financing activities
Change in commercial paper, net				-					1,211
Additions to long-term debt				1,971					1,000
Reductions of long-term debt				(1,024	)				(272	)
Dividends paid				(635	)				(549	)
Repurchase of stock				(1,230	)				(1,693	)
Stock option exercises and related tax benefit				279					66
Other				(16	)				1
Cash flow required for financing activities				(655	)				(236	)
Effect of exchange rate changes on cash and cash equivalents				7					(26	)
Net increase (decrease) in cash and cash equivalents				675					(891	)
Cash and cash equivalents at beginning of period				794					1,712
Cash and cash equivalents at end of period			$	1,469				$	821

TARGET CORPORATION
U.S. Retail Segment
U.S. Retail Segment Results			Three Months Ended													Nine Months Ended
			October 27,				October 29,									October 27,				October 29,
(millions) (unaudited)			2012				2011				Change					2012				2011				Change
Sales			$	16,601			$	16,054			3.4		%			$	49,589			$	47,529			4.3		%
Cost of sales				11,569				11,165			3.6						34,406				32,874			4.7
Gross margin				5,032				4,889			2.9						15,183				14,655			3.6
SG&A expenses (a)				3,553				3,433			3.5						10,315				9,988			3.3
EBITDA				1,479				1,456			1.6						4,868				4,667			4.3
Depreciation and amortization				516				525			(1.7	)					1,526				1,527			(0.1	)
EBIT			$	963			$	931			3.4		%			$	3,342			$	3,140			6.4		%

EBITDA is earnings before interest expense, income taxes, depreciation and amortization.

EBIT is earnings before interest expense and income taxes.

(a) Loyalty program charges were $78 million and $74 million for the three months ended October 27, 2012 and October 29, 2011, respectively, and $217 million and $189 million for the nine months ended October 27, 2012 and October 29, 2011, respectively. In all periods, these amounts were recorded as reductions to SG&A expenses within the U.S. Retail Segment and increases to operations and marketing expenses within the U.S. Credit Card Segment.

U.S. Retail Segment Rate Analysis			Three Months Ended						Nine Months Ended
			October 27,			October 29,			October 27,			October 29,
(unaudited)			2012			2011			2012			2011
Gross margin rate			30.3	%		30.5	%		30.6	%		30.8	%
SG&A expense rate			21.4			21.4			20.8			21.0
EBITDA margin rate			8.9			9.1			9.8			9.8
Depreciation and amortization expense rate			3.1			3.3			3.1			3.2
EBIT margin rate			5.8			5.8			6.7			6.6
Rate analysis metrics are computed by dividing the applicable amount by sales.
Comparable-Store Sales			Three Months Ended						Nine Months Ended
			October 27,			October 29,			October 27,			October 29,
(unaudited)			2012			2011			2012			2011
Comparable-store sales change			2.9	%		4.3	%		3.7	%		3.4	%
Drivers of change in comparable-store sales:
Number of transactions			0.5			0.3			1.0			0.4
Average transaction amount			2.4			4.1			2.7			3.1
Selling price per unit			1.2			1.6			1.6			0.2
Units per transaction			1.2			2.5			1.0			2.9
The comparable-store sales increases or decreases above are calculated by comparingsales in fiscal year periods with comparable prior-year periods of equivalent length.
REDcard Penetration			Three Months Ended						Nine Months Ended
			October 27,			October 29,			October 27,			October 29,
(unaudited)			2012			2011			2012			2011
Target Credit Cards			8.0	%		6.9	%		7.6	%		6.5	%
Target Debit Cards			6.0			2.6			5.2			2.1
Total Store REDcard Penetration			14.0	%		9.5	%		12.8	%		8.6	%
Represents the percentage of Target store sales that are paid for using REDcards.

Number of Stores and Retail Square Feet			Number of Stores									Retail Square Feet (a)
			October 27,			January 28,			October 29,			October 27,			January 28,			October 29,
(unaudited)			2012			2012			2011			2012			2012			2011
Target general merchandise stores			395			637			640			47,038			76,999			77,349
Expanded food assortment stores			1,130			875			875			146,087			114,219			114,218
SuperTarget stores			251			251			252			44,500			44,503			44,681
CityTarget stores			5			-			-			514			-			-
Total			1,781			1,763			1,767			238,139			235,721			236,248
(a) In thousands; reflects total square feet, less office, distribution center and vacant space.

TARGET CORPORATION
U.S. Credit Card Segment
U.S. Credit Card Segment Results			Three Months Ended							Three Months Ended							Nine Months Ended							Nine Months Ended
			October 27, 2012							October 29, 2011							October 27, 2012							October 29, 2011
							Annualized							Annualized							Annualized							Annualized
(millions) (unaudited)			Amount				Rate (d)			Amount				Rate (d)			Amount				Rate (d)			Amount				Rate (d)
Finance charge revenue			$	265			18.0	%		$	279			18.1	%		$	801			17.9	%		$	849			18.0	%
Late fees and other revenue				44			3.0				47			3.1				126			2.8				133			2.8
Third party merchant fees				19			1.3				22			1.4				59			1.3				66			1.4
Total revenues				328			22.3				348			22.5				986			22.1				1,048			22.2
Bad debt expense				46			3.1				40			2.6				141			3.2				67			1.4
Operations and marketing expenses (a)				138			9.4				143			9.2				409			9.2				405			8.6
Depreciation and amortization				3			0.2				4			0.3				11			0.2				13			0.3
Total expenses				187			12.7				187			12.1				561			12.5				485			10.3
EBIT				141			9.6				161			10.4				425			9.5				563			11.9
Interest expense on nonrecourse debt
collateralized by credit card receivables				3							18							8							55
Segment profit			$	138						$	143						$	417						$	508
Average receivables funded by Target (b)			$	4,393						$	2,427						$	4,557						$	2,443
Segment pretax ROIC (c)				12.5	%						23.6	%						12.2	%						27.7	%

(a) See footnote (a) to our U.S. Retail Segment Results table for an explanation of our loyalty program charges.

(b) Amounts represent the portion of average credit card receivables, at par, funded by Target. These amounts exclude $1,500 million and $1,395 million for the three and nine months ended October 27, 2012, respectively, and $3,754 million and $3,843 million for the three and nine months ended October 29, 2011, respectively, of receivables funded by nonrecourse debt collateralized by credit card receivables.

(c) ROIC is return on invested capital, and this rate equals our segment profit divided by average credit card receivables, at par, funded by Target, expressed as an annualized rate.

(d) As an annualized percentage of average credit card receivables, at par.

Spread Analysis - Total Portfolio			Three Months Ended									Three Months Ended									Nine Months Ended									Nine Months Ended
			October 27, 2012									October 29, 2011									October 27, 2012									October 29, 2011
			Yield									Yield									Yield									Yield
			Amount				Annualized					Amount				Annualized					Amount				Annualized					Amount				Annualized
(unaudited)			(in millions)				Rate					(in millions)				Rate					(in millions)				Rate					(in millions)				Rate
EBIT			$	141			9.6	%	(c)			$	161			10.4	%	(c)			$	425			9.5	%	(c)			$	563			11.9	%	(c)
LIBOR (a)							0.2	%								0.2	%								0.2	%								0.2	%
Spread to LIBOR (b)			$	138			9.3	%	(c)			$	158			10.2	%	(c)			$	415			9.3	%	(c)			$	552			11.7	%	(c)

Note: Annualized rates are calculated on a standalone basis.

(a) Balance-weighted one-month LIBOR.

(b) Spread to LIBOR is a metric used to analyze the performance of our total credit card portfolio because the majority of our portfolio earns finance charge revenue at rates tied to the Prime Rate, and the interest rate on all nonrecourse debt collateralized by credit card receivables is tied to LIBOR.

(c) As an annualized percentage of average credit card receivables, at par.

Receivables Rollforward Analysis			Three Months Ended											Nine Months Ended
			October 27,				October 29,							October 27,				October 29,
(millions) (unaudited)			2012				2011				Change			2012				2011				Change
Beginning credit card receivables, at par			$	5,905			$	6,202			(4.8	)	%	$	6,357			$	6,843			(7.1	)	%
Charges at Target				1,456				1,205			20.8				4,142				3,348			23.7
Charges at third parties				1,143				1,283			(10.9	)			3,488				3,886			(10.2	)
Payments				(2,902	)			(2,784	)		4.2				(8,837	)			(8,577	)		3.0
Other				234				238			(2.1	)			686				644			6.4
Period-end credit card receivables, at par				5,836		(a)		6,144			(5.0	)			5,836		(a)		6,144			(5.0	)
Average credit card receivables, at par			$	5,893			$	6,181			(4.7	)		$	5,952			$	6,287			(5.3	)
Accounts with three or more payments (60+ days) past due as a percentage
of period-end credit card receivables, at par				2.8	%			3.3	%						2.8	%			3.3	%
Accounts with four or more payments (90+ days) past due as a percentage
of period-end credit card receivables, at par				1.9	%			2.2	%						1.9	%			2.2	%
Allowance for Doubtful Accounts			Three Months Ended											Nine Months Ended
			October 27,				October 29,							October 27,				October 29,
(millions) (unaudited)			2012				2011				Change			2012				2011				Change
Allowance at beginning of period			$	365			$	480			(23.8	)	%	$	430			$	690			(37.7	)	%
Bad debt expense				46				40			15.3				141				67			109.8
Write-offs (b)				(95	)			(122	)		(21.0	)			(326	)			(448	)		(27.1	)
Recoveries (b)				29				33			(12.6	)			100				122			(17.6	)
Segment allowance at end of period				345		(a)		431			(20.1	)			345		(a)		431			(20.1	)
As a percentage of period-end credit
card receivables, at par				5.9	%			7.0	%						5.9	%			7.0	%
Net write-offs as an annualized percentage of
average credit card receivables, at par				4.5	%			5.7	%						5.1	%			6.9	%

(a) Period-end credit card receivables, at par, less the segment allowance of $345 million, plus the gain on receivables held for sale of $156 million represents credit card receivables, held for sale as reported on the Consolidated Statements of Financial Position.

(b) Write-offs include the principal amount of losses (excluding accrued and unpaid finance charges), and recoveries include current period collections on previously written-off balances. These amounts combined represent net write-offs.

TARGET CORPORATION
Canadian Segment
Canadian Segment Results			Three Months Ended														Nine Months Ended
			October 27,					October 29,									October 27,					October 29,
(millions) (unaudited)			2012					2011					Change				2012					2011					Change
Sales			$	-				$	-				-	%			$	-				$	-				-	%
Cost of sales				-					-				-					-					-				-
Gross margin				-					-				-					-					-				-
SG&A expenses (a)				72					18				317.4					154					53				188.4
EBITDA				(72	)				(18	)			317.4					(154	)				(53	)			188.4
Depreciation and amortization (b)				24					17				36.7					67					28				139.3
EBIT			$	(96	)			$	(35	)			177.2	%			$	(221	)			$	(81	)			171.5	%

EBITDA is earnings/(loss) before interest expense, income taxes, depreciation and amortization.
EBIT is earnings/(loss) before interest expense and income taxes.
(a) SG&A expenses include start-up costs consisting primarily of compensation, benefits and consulting expenses.
(b) Depreciation and amortization results from depreciation of capital lease assets and leasehold interests. For the three and nine months ended October 27, 2012, the lease payment obligation also gave rise to $20 million and $58 million of interest expense, respectively, compared with $15 million and $25 million for the three and nine months ended October 29, 2011, respectively, recorded in our Consolidated Statements of Operations.

TARGET CORPORATION
Reconciliation of Non-GAAP Financial Measures
			Three Months Ended													Nine Months Ended
			October 27,				October 29,									October 27,				October 29,
(unaudited)			2012				2011				Change					2012				2011					Change
GAAP diluted earnings per share			$	0.96			$	0.82				17.6	%			$	3.06			$	2.84					7.9	%
Adjustments				(0.06	)			0.04									0.06				0.09
Adjusted diluted earnings per share			$	0.90			$	0.86				4.3	%			$	3.12			$	2.93					6.8	%
A detailed reconciliation is provided below.
(millions, except per share data) (unaudited)			U.S. Retail				U.S.Credit Card				Total U.S.					Canadian				Other					ConsolidatedGAAP Total
Three Months Ended October 27, 2012
Segment profit			$	963			$	138			$	1,100				$	(96	)		$	-				$	1,005
Other net interest expense (a)												168					20				-					189
Gain on receivables held for sale												-					-				(156	)				(156	)
Earnings before income taxes												932					(116	)			156					972
Provision for income taxes (b)												337					(33	)			31		(d)			335
Net earnings											$	595				$	(83	)		$	125				$	637
Diluted earnings per share (c)											$	0.90				$	(0.13	)		$	0.19				$	0.96
Three Months Ended October 29, 2011
Segment profit			$	931			$	143			$	1,074				$	(35	)		$	-				$	1,039
Other net interest expense (a)												167					15				-					182
Earnings before income taxes												907					(50	)			-					857
Provision for income taxes (b)												323					(15	)			(6	)	(d)			302
Net earnings											$	584				$	(35	)		$	6				$	555
Diluted earnings per share (c)											$	0.86				$	(0.05	)		$	0.01				$	0.82
Nine Months Ended October 27, 2012
Segment profit			$	3,342			$	417			$	3,759				$	(221	)		$	-				$	3,539
Other net interest expense (a)												491					58				-					550
Gain on receivables held for sale												-					-				(156	)				(156	)
Earnings before income taxes												3,268					(279	)			156					3,145
Provision for income taxes (b)												1,187					(80	)			-		(d)			1,107
Net earnings											$	2,081				$	(199	)		$	156				$	2,038
Diluted earnings per share (c)											$	3.12				$	(0.30	)		$	0.23				$	3.06
Nine Months Ended October 29, 2011
Segment profit			$	3,140			$	508			$	3,648				$	(81	)		$	-				$	3,567
Other net interest expense (a)												494					25				-					519
Earnings before income taxes												3,154					(106	)			-					3,048
Provision for income taxes (b)												1,144					(30	)			(15	)	(d)			1,100
Net earnings											$	2,010				$	(76	)		$	15				$	1,948
Diluted earnings per share (c)											$	2.93				$	(0.11	)		$	0.02				$	2.84

Note: Our segment measure of profit is used by management to evaluate the return on our investment and to make operating decisions. To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share, which excludes the impact of our planned 2013 Canadian market entry, the gain on receivables held for sale and favorable resolution of various income tax matters. We believe this information is useful in providing period-to-period comparisons of the results of our U.S. operations. The sum of the non-GAAP adjustments may not equal the total adjustment amounts due to rounding.

(a) Represents interest expense, net of interest income, not included in U.S. Credit Card segment profit. For the three and nine months ended October 27, 2012, U.S. Credit Card segment profit included $3 million and $8 million of interest expense on nonrecourse debt collateralized by credit card receivables, compared with $18 million and $55 million in the respective prior year periods. These amounts, along with other net interest expense, equal consolidated GAAP net interest expense.

(b) Taxes are allocated to our business segments based on estimated income tax rates applicable to the operations of the segment for the period.

(c) For the three and nine months ended October 27, 2012, average diluted shares outstanding were 662.2 million and 665.8 million, respectively, and for the three and nine months ended October 29, 2011, average diluted shares outstanding were 678.3 million and 686.9 million, respectively.

(d) Represents the effect of the resolution of income tax matters. The results for the three and nine months ended October 27, 2012 also include a $57 million tax effect related to the gain on receivables held for sale.

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