Target Reports Fourth Quarter and Fiscal 2012 Earnings
Target Reports Fourth Quarter and Fiscal 2012 Earnings
Target Reports Fourth Quarter and Fiscal 2012 Earnings
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<strong>Target</strong> Corporation Announces <strong>Fourth</strong> <strong>Quarter</strong> <strong>and</strong> <strong>Fiscal</strong> <strong>2012</strong> <strong>Earnings</strong> – Page 4 of 6<br />
Average receivables for the full year decreased 5.1 percent to $6.0 billion in <strong>2012</strong> from $6.3<br />
billion in 2011. <strong>Fiscal</strong> year <strong>2012</strong> portfolio spread to LIBOR was $555 million, or 9.1 percent,<br />
compared with $663 million, or 10.5 percent, in 2011. <strong>Fiscal</strong> year performance reflected a $95<br />
million reduction in the allowance for doubtful accounts, compared with a $260 million reduction in<br />
2011.<br />
2 The Company intends to continue reporting a U.S. Credit Card Segment until the credit card receivables transaction with TD Bank Group<br />
closes in 2013. The segment results will continue to be reported on the same basis as historical results.<br />
Canadian Segment Results<br />
<strong>Fourth</strong> quarter <strong>and</strong> full-year <strong>2012</strong> EBIT was $(148) million <strong>and</strong> $(369) million, respectively,<br />
due to start-up expenses, depreciation <strong>and</strong> amortization related to the Company’s expected market<br />
entry in 2013. Total expenses related to investments in <strong>Target</strong>’s Canadian market entry reduced<br />
<strong>Target</strong>’s earnings per share by approximately 18 cents in fourth quarter <strong>2012</strong> <strong>and</strong> 48 cents in fiscal<br />
<strong>2012</strong> 3 .<br />
3 This amount includes interest expense <strong>and</strong> tax expense that are not included in the segment measure of profit. A reconciliation of non-<br />
GAAP measures is included in the tables attached to this release.<br />
Interest Expense <strong>and</strong> Taxes<br />
Net interest expense for the fourth quarter was $204 million, compared with $292 million in<br />
fourth quarter 2011. Full-year interest expense was $762 million in <strong>2012</strong>, compared with $866<br />
million in 2011. Decreases in fourth quarter <strong>and</strong> full-year interest expense were due primarily to an<br />
$87 million charge related to the early retirement of debt in fourth quarter 2011.<br />
The Company’s effective income tax rate was 34.3 percent in the fourth quarter <strong>and</strong> 34.9<br />
percent for the full year <strong>2012</strong>. The full-year <strong>2012</strong> effective income tax rate includes the favorable<br />
resolution of various income tax matters that benefited EPS by approximately 9 cents. In 2011, the<br />
favorable resolution of various income tax matters increased fourth quarter EPS by approximately 10<br />
cents <strong>and</strong> increased full-year EPS by approximately 12 cents.<br />
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