Target Reports Fourth Quarter and Fiscal 2012 Earnings

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TARGET CORPORATION Canadian Segment Canadian Segment Results February 2, January 28, February 2, January 28, (millions) (unaudited) 2013 2012 Change 2013 2012 Change Sales $ - $ - - % $ - $ - - % Cost of sales - - - - - - Gross margin - - - - - - SG&A expenses (a) 118 20 478.8 272 74 268.7 EBITDA (118) (20) 478.8 (272) (74) 268.7 Depreciation and amortization (b) Three Months Ended Twelve Months Ended 30 20 52.5 97 48 103.2 EBIT $ (148) $ (40) 268.1 % $ (369) $ (122) 203.5 % Note: The three and twelve months ended February 2, 2013 consisted of 14 weeks and 53 weeks, respectively, compared with 13 weeks and 52 weeks in the comparable prior-year periods. (a) SG&A expenses include start-up costs consisting primarily of compensation, benefits and third-party service expenses. (b) Depreciation and amortization results from depreciation of capital lease assets and leasehold interests. For the three and twelve months ended February 2, 2013, the lease payment obligation also gave rise to $20 million and $78 million of interest expense, respectively, compared with $19 million and $44 million for the three and twelve months ended January 28, 2012, respectively, recorded in our Consolidated Statements of Operations. Subject to reclassification CONFIDENTIAL Draft - 5 2/21/13 8:07 AM
TARGET CORPORATION Reconciliation of Non-GAAP Financial Measures Three Months Ended Twelve Months Ended February 2, January 28, February 2, January 28, (unaudited) 2013 2012 Change 2013 2012 Change GAAP diluted earnings per share $ 1.47 $ 1.45 0.9% $ 4.52 $ 4.28 5.6% Adjustments 0.18 0.04 0.24 0.13 Adjusted diluted earnings per share A detailed reconciliation is provided below. $ 1.65 $ 1.49 10.1% $ 4.76 $ 4.41 7.9% (millions, except per share data) (unaudited) U.S. Retail U.S. Credit Card Total U.S. Canadian Other Consolidated GAAP Total Three Months Ended February 2, 2013 Segment profit $ 1,677 $ 141 $ 1,817 $ (148) $ - $ 1,669 Other net interest expense (a) 181 20 - 201 Adjustment related to receivables held for sale (b) - - 4 4 Earnings before income taxes 1,636 (168) (4) 1,464 Provision for income taxes (c) 557 (51) (e) (3) 503 Net earnings $ 1,079 $ (117) $ (1) $ 961 Diluted earnings per share (d) Three Months Ended January 28, 2012 $ 1.65 $ (0.18) $ - $ 1.47 Segment profit $ 1,625 $ 98 $ 1,723 $ (40) $ - $ 1,683 Other net interest expense (a) 169 19 87 (f) 275 Earnings before income taxes 1,554 (59) (87) 1,408 Provision for income taxes (c) 545 (16) (e) (102) 427 Net earnings $ 1,009 $ (43) $ 15 $ 981 Diluted earnings per share (d) $ 1.49 $ (0.06) $ 0.02 $ 1.45 Twelve Months Ended February 2, 2013 Segment profit $ 5,019 $ 557 $ 5,576 $ (369) $ - $ 5,206 Other net interest expense (a) 672 78 - 749 Adjustment related to receivables held for sale (b) - - (152) (152) Earnings before income taxes 4,904 (447) 152 4,609 Provision for income taxes (c) 1,744 (132) (e) (3) 1,610 Net earnings $ 3,160 $ (315) $ 155 $ 2,999 Diluted earnings per share (d) Twelve Months Ended January 28, 2012 $ 4.76 $ (0.48) $ 0.23 $ 4.52 Segment profit $ 4,765 $ 606 $ 5,371 $ (122) $ - $ 5,250 Other net interest expense (a) 663 44 87 (f) 794 Earnings before income taxes 4,708 (166) (87) 4,456 Provision for income taxes (c) 1,690 (47) (e) (117) 1,527 Net earnings $ 3,018 $ (119) $ 30 $ 2,929 Diluted earnings per share (d) $ 4.41 $ (0.17) $ 0.04 $ 4.28 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 adjustment related to receivables held for sale, favorable resolution of various income tax matters and the loss on early retirement of debt. We believe this information is useful in providing period-to-period comparisons of the results of our U.S. operations. The sum of the non-GAAP adjustments may not equal the total adjustment amounts due to rounding. Note: The three and twelve months ended February 2, 2013 consisted of 14 weeks and 53 weeks, respectively, compared with 13 weeks and 52 weeks in the comparable prior-year periods. (a) Represents interest expense, net of interest income, not included in U.S. Credit Card segment profit. For the three and twelve months ended February 2, 2013, U.S. Credit Card segment profit included $3 million and $13 million of interest expense on nonrecourse debt collateralized by credit card receivables, respectively, compared with $17 million and $72 million in the respective prior year periods. These amounts, along with other net interest expense, equal consolidated GAAP net interest expense. (b) Represents the gain on receivables held for sale recorded in our Consolidated Statements of Operations, plus the difference between U.S. Credit Card Segment bad debt expense and net write-offs for the three months ended February 2, 2013. (c) Taxes are allocated to our business segments based on income tax rates applicable to the operations of the segment for the period. (d) For the three and twelve months ended February 2, 2013, average diluted shares outstanding were 655.8 million and 663.3 million, respectively. For the three and twelve months ended January 28, 2012, average diluted shares outstanding were 675.0 million and 683.9 million, respectively. (e) Represents the effect of the resolution of income tax matters. The results for the three and twelve months ended February 2, 2013 also include a $(2) million and $55 million tax provision/(benefit) for the adjustment related to receivables held for sale, respectively, while the results for the three and twelve months ended January 28, 2012 include the tax effect of the loss on early retirement of debt of $32 million in both periods. (f) Represents the loss on early retirement of debt. Subject to reclassification CONFIDENTIAL Draft - 5 2/21/13 8:07 AM
Page 1 and 2: FOR IMMEDIATE RELEASE Contacts: Joh
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Target Reports Fourth Quarter and Fiscal 2012 Earnings

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