Target (TGT) 10-K risk factor changes: FY2019 vs FY2019

[removed: Competitive] [added: Competitive] and Reputational [removed: Risks][added: Risks]

[removed: Our] [added: Our] continued success is dependent on positive perceptions of Target which, if eroded, could adversely affect our business and our relationships with our guests and team [removed: members.][added: members.]

We believe that one of the reasons our [removed: guests prefer to shop at Target, our] [added: guests,] team [removed: members choose Target as a place of employment,] [added: members,] and [removed: our] vendors choose [removed: to do business with us] [added: Target] is the [added: positive] reputation we have built over many years for serving our four primary constituencies: guests, team members, shareholders, and the communities in which we operate.

[removed: If] [added: If] we are unable to positively differentiate ourselves from other retailers, our results of operations could be adversely [removed: affected.][added: affected.]

[removed: If] [added: If] we are unable to successfully provide a relevant and reliable experience for our guests across multiple channels, our sales, results of operations and reputation could be adversely [removed: affected.][added: affected.]

Providing [removed: flexible] [added: multiple] fulfillment options and implementing new technology is complex and may not meet expectations for accurate order fulfillment, faster and guaranteed delivery times, [removed: low-price] [added: low-cost] or free shipping, and desired payment methods.

[removed: If] [added: If] we do not anticipate and respond quickly to changing consumer preferences, our sales and profitability could [removed: suffer.][added: suffer.]

A large part of our business is dependent on our ability to make [removed: trend‑right] [added: trend-right] decisions and effectively manage our inventory in a broad range of merchandise categories, including apparel, accessories, home décor, electronics, toys, seasonal offerings, food, and other merchandise.

[removed: Investments] [added: Investments] and Infrastructure [removed: Risks][added: Risks]

[removed: If] [added: If] our capital investments in remodeling existing stores, building new stores, and improving technology and supply chain infrastructure do not achieve appropriate returns, our competitive position, financial condition and results of operations could be adversely [removed: affected.][added: affected.]

Our [removed: current] store remodel program is larger than historic levels and is being implemented using a custom approach based on the condition of each store and characteristics of the surrounding neighborhood.

We are [removed: currently] making, and expect to continue to make, significant investments in technology and selective acquisitions to improve guest experiences across multiple channels and improve [added: the speed, accuracy, and cost efficiency of] our supply chain and inventory management systems.

[removed: A] [added: A] significant disruption in our computer systems and our inability to adequately maintain and update those systems could adversely affect our operations and negatively affect our [removed: guests.][added: guests.]

Our systems are subject to damage or interruption from power outages, telecommunications failures, computer viruses, malicious attacks, security breaches, [removed: and] catastrophic [removed: events.][added: events, and implementation errors.]

If our systems are [removed: damaged] [added: damaged, disrupted] or fail to function properly or reliably, we may incur substantial repair or replacement costs, experience data loss or theft and impediments to our ability to manage inventories or process guest transactions, and encounter lost guest confidence, which could require additional promotional activities to attract guests and otherwise adversely affect our results of operations.

[removed: Data Security] [added: Information Security, Cybersecurity] and [added: Data] Privacy [removed: Risks][added: Risks]

[removed: If] [added: If] our efforts to provide information [removed: security] [added: security, cybersecurity and data privacy] are unsuccessful or if we are unable to meet increasingly demanding regulatory requirements, we may face additional costly government enforcement actions and private litigation, and our reputation and results of operations could [removed: suffer.][added: suffer.]

We regularly receive and store information about our guests, team members, [removed: vendors] [added: vendors,] and other third parties.

In addition, hardware, software, or applications we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information [removed: security.][added: security, cybersecurity, and data privacy.]

In addition, our guests could lose confidence in our ability to protect their information, discontinue using our [removed: REDcards] [added: RedCards] or loyalty programs, or stop shopping with us altogether, which could adversely affect our [added: reputation,] sales, [removed: reputation] and results of operations.

The legal and regulatory environment regarding information security, cybersecurity, and [added: data] privacy is increasingly demanding and has enhanced requirements for [removed: handling] [added: using and treating] personal data.

Complying with new data protection [removed: requirements] [added: requirements, such as those imposed by the recently effective California data privacy laws,] may cause us to incur substantial costs, require changes to our business practices, limit our ability to obtain data used to provide a differentiated guest experience, and expose us to further litigation and regulatory risks, each of which could adversely affect our results of operations.

[removed: Supply] [added: Supply] Chain and [removed: Third Party Risks][added: Third-Party Risks]

[removed: Changes] [added: Changes] in our relationships with our vendors, changes in tax or trade policy, interruptions in our supply chain or increased commodity or supply chain costs could adversely affect our results of [removed: operations.][added: operations.]

As we continue to add [removed: capabilities,] [added: capabilities to quickly move the appropriate amount of inventory at optimal operational costs through our entire supply chain,] operating our fulfillment network becomes more complex and challenging.

A large portion of our merchandise is sourced, directly or indirectly, from outside the U.S., with China as our single largest source, so any major changes in tax or trade policy, such as the imposition of additional tariffs or duties on imported products, [added: between the U.S. and countries from which we source merchandise] could require us to take certain actions, [removed: such as] [added: including for example] raising prices on products we [removed: sell,] [added: sell and seeking alternative sources of supply from vendors in other countries with whom we have less familiarity,] which could adversely affect our [added: reputation, sales, and our] results of operations.

Political or financial instability, currency fluctuations, the outbreak of [removed: pandemics,] [added: pandemics or other illnesses (such as the recent coronavirus),] labor unrest, transport capacity and costs, port security, weather conditions, natural disasters or other events that could slow or disrupt port activities and affect foreign trade are beyond our control and could materially disrupt our supply of merchandise, increase our costs, and/or adversely affect our results of operations.

[removed: A] [added: A] disruption in relationships with [removed: third party] [added: third-party] service providers could adversely affect our [removed: operations.][added: operations.]

[removed: Legal,] [added: Legal,] Regulatory, Global and Other External [removed: Risks][added: Risks]

[removed: Our] [added: Our] earnings depend on the state of macroeconomic conditions and consumer confidence in the [removed: U.S.][added: U.S.]

[removed: Although we no longer own a consumer credit card receivables portfolio, we] [added: We] share in the profits generated by the credit card program with TD Bank Group (TD), which owns the receivables generated by our proprietary credit cards.

These conditions could result in us receiving lower [removed: profit‑sharing] [added: profit-sharing] payments.

[removed: Uncharacteristic] [added: Uncharacteristic] or significant weather conditions, [removed: alone or together with] natural disasters, [added: and other catastrophic events] could adversely affect our [removed: operations.][added: results of operations.]

Natural disasters in those states or in other areas where our sales [added: or operations] are concentrated could result in significant physical damage to or closure of one or more of our stores, distribution [removed: centers] [added: centers, facilities,] or key [removed: vendors, and cause delays in the distribution of merchandise from our vendors to our distribution centers, stores, and guests, which could adversely affect our results of operations by increasing our costs and lowering our sales.][added: vendors.]

[removed: We] [added: We] rely on a large, global and changing workforce of team members, contractors and temporary staffing.

If we do not effectively manage our workforce and the concentration of work in certain global locations, our labor costs and results of operations could be adversely [removed: affected.][added: affected.]

[removed: Failure] [added: Failure] to address product safety and sourcing concerns could adversely affect our sales and results of [removed: operations.][added: operations.]

Events that give rise to actual, potential or perceived product safety concerns, including food or drug [removed: contamination,] [added: contamination and product defects,] could expose us to government enforcement action or private litigation and result in costly product recalls and other liabilities.

Our sourcing [removed: vendors] [added: vendors, including any third parties selling through our digital channels,] must also meet our expectations across multiple areas of social compliance, including supply chain transparency and responsible sourcing.

We have a social compliance audit [removed: process,] [added: process that perform audits on a regular basis,] but we [added: cannot continuously monitor every vendor, so we] are also dependent on our vendors to ensure that the products we buy comply with our standards.

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 4 | | |

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| | | | RISK FACTORS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 5 | | |

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| | | | RISK FACTORS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

We rely extensively on computer systems throughout our business.

For example, during the past year we experienced disruptions in our point-of-sale system that prevented our ability to process debit or credit transactions, negatively impacted some guests’ experiences, and generated negative publicity.

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 6 | | |

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| | | | RISK FACTORS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 7 | | |

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| | | | RISK FACTORS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

In addition, natural disasters and other catastrophic events, such as the recent coronavirus outbreak, in areas where we or our vendors have operations, could cause delays in the distribution of merchandise from our vendors to our distribution centers, stores, and guests, affect consumer purchasing power, or reduce consumer demand, which could adversely affect our results of operations by increasing our costs and lowering our sales.

If we need to seek alternative sources of supply from vendors with whom we have less familiarity, the risk of our standards not being met may increase.

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 8 | | |

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| | | | RISK FACTORS & UNRESOLVED STAFF COMMENTS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

Our expenses could increase and our operations could be adversely affected by law changes or adverse judicial developments involving an employer's obligation to recognize collective bargaining units, minimum wage requirements, advance scheduling notice requirements, health care mandates, the classification of exempt and non-exempt employees, and the classification of workers as either employees or independent contractors (particularly as it applies to our Shipt subsidiary, a technology company that connects Shipt members through its online marketplace with a network of independent contractors who select, purchase, and deliver groceries and household essentials ordered from Target and other retailers).

Many of our expected new store sites are smaller, non-standard footprints located in fully developed markets, which require changes to our supply chain practices and are generally more time-consuming, expensive and uncertain undertakings than expansion into undeveloped suburban and ex-urban markets.

We rely extensively on our computer systems to manage and account for inventory, process guest transactions, manage and maintain the privacy of guest data, communicate with our vendors and other third parties, service Target-branded credit and debit card accounts, and summarize and analyze results.

Our expenses could increase, and our operations could be adversely affected by significant legislative changes or other legal developments on workforce-related issues, including an employer's obligation to recognize collective bargaining units, the process by which collective bargaining agreements are negotiated or imposed, the classification of exempt and non-exempt employees, the distinction between employees and contractors, minimum wage requirements, advance scheduling notice requirements, and health care mandates.

Fiscal [removed: 2018] [added: 2019] included the following notable items:

[removed: | • |] [added: -] GAAP earnings per share from continuing operations were [removed: $5.50. |][added: $6.34.]

[removed: | • |] [added: -] Adjusted earnings per share [added: from continuing operations] were [removed: $5.39. |][added: $6.39.]

[removed: | • |] [added: -] Total revenue increased [removed: 3.6] [added: 3.7] percent, driven by a comparable sales increase and sales from new [removed: stores, partially offset by fiscal 2017 containing 53 weeks. |][added: stores.]

[removed: | • |] [added: -] Comparable sales increased [removed: 5.0] [added: 3.4] percent, driven by a [removed: 5.0] [added: 2.7] percent increase in traffic. [removed: |]

[removed: | ◦ | Comparable] [added: ◦Comparable] store sales grew [removed: 3.2] [added: 1.4] percent. [removed: |]

[removed: | ◦ | Comparable digital] [added: ◦Digital] channel sales increased [removed: 36] [added: 29] percent, contributing [removed: 1.8] [added: 1.9] percentage points to comparable sales growth. [removed: |]

Operating cash flow provided by continuing operations was [removed: $5,970] [added: $7,099] million for [removed: 2018, a decrease] [added: 2019, an increase] of [removed: $891] [added: $1,129] million, or [removed: 13.0] [added: 18.9] percent, from [removed: $6,861] [added: $5,970] million for [removed: 2017.][added: 2018.]

| [removed: Earnings] [added: Earnings] Per Share [removed: From Continuing Operations] [added: From Continuing Operations] | | | | | | | | | | [added: | |] Percent Change | | | | [added: | | | | |]

| [added: | | | 2019 | | |] 2018 | | | 2017 [removed: As Adjusted (a)(b)] [added: (a)] | | | [removed: 2016 As Adjusted (b)] [added: 2019/2018] | | | 2018/2017 | | [removed: 2017/2016] | | | [added: |]

| GAAP diluted earnings per share | [added: | |] $ | [added: 6.34 | | $ |] 5.50 | | $ | 5.29 | | [removed: $] [added: 15.4] | [removed: 4.58] | [added: %] | 4.0 | [added: |] % | [removed: 15.5] | [removed: %] | [added: |]

| Adjustments | [removed: (0.10] | | [removed: )] [added: 0.05] | [removed: (0.60] | | [removed: )] [added: (0.10)] | [removed: 0.42] | | [added: (0.60)] | | | | | [added: | | | | | | |]

| Adjusted diluted earnings per share | [added: | |] $ | [added: 6.39 | | $ |] 5.39 | | $ | 4.69 | | [removed: $] [added: 18.4] | [removed: 5.00] | [added: %] | 15.1 | [added: |] % | [removed: (6.3] | [removed: )%] | [added: |]

A reconciliation of non-GAAP financial measures to GAAP measures is provided on [removed: page 21.][added: [page 21](#i2240ff3e90b94c9b90ef0a9188b2d860_2418).]

[removed: | (a) | Consisted] [added: (a)Consisted] of 53 weeks. [removed: |]

For the trailing twelve months ended February [removed: 2, 2019,] [added: 1, 2020,] ROIC was [removed: 14.7] [added: 16.0] percent, compared with [removed: 15.4] [added: 14.7] percent for the trailing twelve months ended February [removed: 3, 2018.][added: 2, 2019.]

[removed: Analysis] [added: Analysis] of Results of [removed: Operations][added: Operations]

| [added: Summary of Operating Income] | | | | | | | | | | [added: | |] Percent Change | | | | [added: | | | | |]

| (dollars in millions) | [added: | | 2019 | | |] 2018 | | | 2017 [removed: As Adjusted] (a) | | | [removed: 2016 As Adjusted] [added: 2019/2018] | | | 2018/2017 | | [removed: 2017/2016] | | [added: | |]

| Sales | [added: | |] $ | [added: 77,130 | | $ |] 74,433 | | $ | 71,786 | | [removed: $] [added: 3.6] | [removed: 69,414] | [added: %] | 3.7 | [added: |] % | [removed: 3.4] | [removed: %] | [added: |]

| Other revenue | [added: | | 982 | | |] 923 | | | 928 | | | [removed: 857] [added: 6.3] | | | [removed: (0.5] [added: (0.5)] | [removed: )] | [removed: 8.3] | | [added: | |]

| Total revenue | [added: | | 78,112 | | |] 75,356 | | | 72,714 | | | [removed: 70,271] [added: 3.7] | | | 3.6 | | [removed: 3.5] | | [added: | |]

| Cost of sales | [added: | | 54,864 | | |] 53,299 | | | 51,125 | | | [removed: 49,145] [added: 2.9] | | | 4.3 | | [removed: 4.0] | | [added: | |]

| SG&A expenses | [added: | | 16,233 | | |] 15,723 | | | 15,140 | | | [removed: 14,217] [added: 3.2] | | | 3.9 | | [removed: 6.5] | | [added: | |]

| Depreciation and amortization (exclusive of depreciation included in cost of sales) | [added: | | 2,357 | | |] 2,224 | | | 2,225 | | | [removed: 2,045] [added: 6.0] | | | [removed: (0.1] [added: (0.1)] | [removed: )] | [removed: 8.8] | | [added: | |]

| Operating income | [added: | |] $ | [added: 4,658 | | $ |] 4,110 | | $ | 4,224 | | [removed: $] [added: 13.3] | [removed: 4,864] | [added: %] | [removed: (2.7] [added: (2.7)] | [removed: )%] | [removed: (13.1] [added: %] | [removed: )%] | [added: | |]

| [removed: Rate Analysis] [added: Rate Analysis] | [added: | | 2019 | | |] 2018 | | [added: |] 2017 [removed: As Adjusted] (a) | | [removed: 2016 As Adjusted] | [removed: |]

| Gross margin rate | [removed: 28.4] | [added: | 28.9 | |] % | [removed: 28.8] [added: 28.4] | [added: |] % | [removed: 29.2] [added: 28.8] | [added: |] % |

| SG&A expense rate | [removed: 20.9] | | 20.8 | | [removed: 20.2] | [added: 20.9] | [added: | | 20.8 | | |]

| Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate | [added: | |] 3.0 | | [removed: 3.1] | [added: 3.0] | [removed: 2.9] | | [added: 3.1 | | |]

| Operating income margin rate | [added: | | 6.0 | | |] 5.5 | | [removed: 5.8] | [added: 5.8] | [removed: 6.9] | |

[removed: Sales][added: Sales]

Sales include all merchandise sales, net of expected returns, and [added: our estimate of] gift card breakage.

[removed: Comparable] [added: [Note](#i2240ff3e90b94c9b90ef0a9188b2d860_100) [2](#i2240ff3e90b94c9b90ef0a9188b2d860_100) to the Financial Statements defines gift card "breakage." We use comparable] sales [removed: is a measure that highlights] [added: to evaluate] the performance of our stores and digital channel sales by measuring the change in sales for a period over the comparable, prior-year period of equivalent length.

[removed: Digital channel] [added: Digitally originated] sales include all sales initiated through mobile applications and our websites.

Our stores fulfill the majority of [removed: digital channel] [added: digitally originated] sales, including [removed: through] [added: shipment from stores to guests,] store [removed: pick up] [added: Order Pick Up] or [removed: drive up] [added: Drive Up,] and delivery via [removed: our wholly owned subsidiary,] Shipt.

[removed: Digital channel] [added: Digitally originated] sales may also be fulfilled through our distribution centers, our vendors, or other third parties.

The increase in [removed: 2018] [added: 2019] sales compared [removed: with 2017] [added: to 2018] is due to a [removed: 5.0] [added: 3.4] percent comparable sales increase and the contribution from new [removed: stores, partially offset by the extra week in 2017, which contributed $1,167 million of sales, or 1.6 percent of 2017 sales.][added: stores.]

| [removed: Comparable Sales] [added: Comparable Sales] | [added: | | 2019 | | |] 2018 | | [removed: 2017] | [added: 2017] | [removed: 2016] | |

| Comparable sales change | [removed: 5.0] | [added: | 3.4 | |] % | [removed: 1.3] [added: 5.0] | [added: |] % | [removed: (0.5] [added: 1.3] | [removed: )%] | [added: % |]

Executive Overview

Over the last several years, we have made strategic investments to build a durable operating and financial model that further differentiates Target and is designed to drive sustainable sales and profit growth.

We have done this through an investment strategy focused on:

Elevating the shopping experiences and winning with high-touch service

- During the past three years, we have remodeled more than 700 stores, including nearly 300 during 2019.

We plan to remodel approximately 300 in 2020.

- We have grown our stores network and now have over 100 small format stores in key urban markets and on college campuses.

- We have redesigned our store operating model – redefining roles for hundreds of thousands of team members to deliver better guest service.

- We have invested significantly in our team, including a $13 starting hourly wage with a commitment to $15 by the end of 2020.

Curation at Scale

- We have delivered a steady stream of newness and exclusives across our assortment.

We have introduced over 25 new owned and exclusive brands, including the 2019 launch of our new food and beverage owned brand, Good & Gather, which we expect will become our largest owned brand.

Delivering Ease and Convenience through Same Day Services

- We have expanded our digital fulfillment capabilities, which elevate the shopping experience and give our guests new reasons to choose Target.

During 2019, over 70% of our comparable digital sales growth was driven by same-day fulfillment options: Order Pickup, Drive Up, and delivery via our wholly owned subsidiary, Shipt.

These investments are translating into tangible financial results summarized below.

Financial Summary

- Operating income of $4,658 million was 13.3 percent higher than the comparable prior-year period.

Sales were $77,130 million for 2019, an increase of $2,697 million or 3.6 percent from the prior year.

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 16 | | |

| | | | MANAGEMENT'S DISCUSSION AND ANALYSIS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | EXECUTIVE SUMMARY & ANALYSIS OF OPERATIONS | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

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The calculation of ROIC is provided on [page 2](#i2240ff3e90b94c9b90ef0a9188b2d860_2425)[2](#i2240ff3e90b94c9b90ef0a9188b2d860_2425).

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(a)Consisted of 53 weeks.

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(a)Consisted of 53 weeks.

A discussion regarding Results of Operations and Analysis of Financial Condition for the year ended February 2, 2019, as compared to the year ended February 3, 2018, is included in Part II, Item 7, MD&A to our Annual Report on Form 10-K for the fiscal year ended February 2, 2019.

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 17 | | |

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| | | | MANAGEMENT'S DISCUSSION AND ANALYSIS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | ANALYSIS OF OPERATIONS | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

Executive Summary

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| • | We returned $3.4 billion to shareholders through dividends and share repurchases. |

As described in Note 2 to the Financial Statements, certain prior-year amounts have been adjusted to reflect the impact of adopting Accounting Standards Update (ASU) No. 2014-09—Revenue from Contracts with Customers (Topic 606), ASU No. 2016-02—Leases (Topic 842), and ASU No. 2017-07—Compensation – Retirement Benefits (Topic 715) throughout this document to conform to the current year presentation.

Sales were $74,433 million for 2018, an increase of $2,647 million or 3.7 percent from the prior year, due to a comparable sales increase of 5.0 percent and the contribution from new stores, partially offset by the impact of the extra week in 2017.

Operating income in 2018 decreased by $114 million or 2.7 percent from 2017 to $4,110 million.

The Analysis of Results of Operations discussion provides more information.

Refer to the Cash Flows discussion within the Liquidity and Capital Resources section of MD&A on page 24 for additional information.

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| (b) | Lease standard adoption resulted in a $0.03 and $0.02 reduction in GAAP and Adjusted EPS, respectively, for 2017, and a less than $0.01 and $0.01 reduction in GAAP and Adjusted EPS, respectively, for 2016. |

Excluding the discrete impacts of the Tax Cuts and Jobs Act (Tax Act), ROIC was 14.6 percent and 13.6 percent for the trailing twelve months ended February 2, 2019, and February 3, 2018, respectively.

A reconciliation of ROIC is provided on page 23.

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Note 3 of the Financial Statements defines gift card "breakage".

The increase in 2017 sales is due to a comparable sales increase of 1.3 percent, the extra week in 2017, and the contribution from new stores.

The extra week contributed 1.7 percentage points of increase over 2016.

Inflation did not materially affect sales in any period presented.

In 2018, we refined our calculation of REDcard Penetration.

The prior period amounts have been updated to conform with the current methodology, resulting in an increase of 0.2 percentage points to the Total REDcard Penetration for 2017 and 2016.

The 2018 decrease was primarily due to increased digital fulfillment and supply chain costs.

The benefit of merchandising strategies, including cost savings initiatives and efforts to improve pricing and promotions, was partially offset by the impact of our sales mix.

The 2017 decrease was primarily due to increased digital fulfillment costs and supply chain costs.

Benefits from cost savings initiatives were offset by net investments in pricing and promotions.

Our SG&A expense rate was 20.9 percent in 2018, 20.8 percent in 2017, and 20.2 percent in 2016.

The increase in 2018 was primarily due to higher compensation, primarily driven by store wages, partially offset by cost savings across multiple expense categories.

The increase in 2017 was primarily due to higher compensation costs, including both bonus expense and store wages, partially offset by cost savings primarily driven by efficiency in our technology operations.

Depreciation and Amortization Expense Rate

Our depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate was 3.0 percent in 2018, 3.1 percent in 2017, and 2.9 percent in 2016.

The 2018 decrease was primarily due to the rate impact of higher sales.

The 2017 increase was primarily due to higher accelerated depreciation for planned store remodels, partially offset by the rate impact of the 53rd week of sales.

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Net interest expense for 2017 and 2016 included losses on early retirement of debt of $123 million and $422 million, respectively.

The lower 2018 benefit of discrete Tax Act-related items was substantially offset by the full-year benefit of a 21 percent federal statutory rate in 2018 compared with a 33.7 percent blended federal statutory rate in 2017.

Our 2017 effective income tax rate from continuing operations decreased to 19.9 percent, from 32.7 percent in 2016, driven primarily by the impact of the Tax Act.

[removed: At] [added: As of] February [removed: 2, 2019,] [added: 1, 2020,] our exposure to market risk was primarily from interest rate changes on our debt obligations, some of which are at a London Interbank Offered Rate [removed: (LIBOR)-plus floating-rate.][added: (LIBOR).]

[removed: At] [added: As of] February [removed: 2, 2019,] [added: 1, 2020,] our floating rate [removed: debt] [added: short-term investments] exceeded our floating rate [removed: short-term investments] [added: debt] by approximately [removed: $700] [added: $300] million.

Based on our balance sheet position [removed: at] [added: as of] February [removed: 2, 2019,] [added: 1, 2020,] the annualized effect of a 0.1 percentage point increase in floating interest rates on our floating rate debt obligations, net of our floating rate short-term investments, would not be significant.

See further description of our debt and derivative instruments in [removed: Notes 16] [added: [Notes](#i2240ff3e90b94c9b90ef0a9188b2d860_151) [15](#i2240ff3e90b94c9b90ef0a9188b2d860_151)] and [removed: 17] [added: [16](#i2240ff3e90b94c9b90ef0a9188b2d860_157)] to the Financial Statements.

Based on our balance sheet position [removed: at] [added: as of] February [removed: 2, 2019,] [added: 1, 2020,] the annualized effect of a 0.5 percentage point decrease in interest rates would be to decrease earnings before income taxes by $6 million.

In addition, we are exposed to market return fluctuations on our qualified defined benefit pension [removed: plans.][added: plan.]

A 1 percentage point decrease to the weighted average discount rate would increase annual expense by [removed: $68] [added: $61] million.

At year-end, we had hedged 60 percent of the interest rate exposure of our [removed: funded status.][added: plan liabilities.]

As more fully described in [removed: Notes 12 and 23] [added: [Note](#i2240ff3e90b94c9b90ef0a9188b2d860_184) [](#i2240ff3e90b94c9b90ef0a9188b2d860_184)[22](#i2240ff3e90b94c9b90ef0a9188b2d860_184)] to the Financial Statements, we are exposed to market returns on accumulated team member balances in our nonqualified, unfunded deferred compensation plans.

In 2017, the United Kingdom's Financial Conduct Authority announced the intent to phase out LIBOR by the end of 2021.

As a result, we may amend our contracts that use LIBOR as a benchmark, but do not expect these changes will have a material impact on our financial statements, liquidity and access to capital markets.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 29 | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | FINANCIAL STATEMENTS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | INDEX | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

[removed: General][added: General]

We offer [added: to] our customers, referred to as "guests," everyday essentials and fashionable, differentiated merchandise at discounted prices.

[removed: Financial Highlights][added: Financial Highlights]

For information on key financial highlights, see [removed: Item 6, Selected] [added: [Part II](#i2240ff3e90b94c9b90ef0a9188b2d860_34), [Item 6](#i2240ff3e90b94c9b90ef0a9188b2d860_40), [Selected] Financial [removed: Data,] [added: Data](#i2240ff3e90b94c9b90ef0a9188b2d860_40),] and [removed: Item 7, Management's] [added: [Part II](#i2240ff3e90b94c9b90ef0a9188b2d860_34), [Item 7](#i2240ff3e90b94c9b90ef0a9188b2d860_43), [Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations] [added: Operations](#i2240ff3e90b94c9b90ef0a9188b2d860_43)] (MD&A).

[removed: Seasonality][added: Seasonality]

[removed: Merchandise][added: Merchandise]

Approximately one-third of [removed: 2018] [added: 2019] sales [removed: is] [added: was] related to our owned and exclusive brands, including but not limited to the following:

| Owned Brands | | | [added: | | | | | |]

| A New Day™ | [removed: JoyLab™] | [added: | Hyde & EEK! Boutique™ | | |] Smartly™ | [added: | |]

| [removed: Art Class™] [added: Archer Farms®] | [added: | |] Kona Sol™ | [added: | |] Sonia Kashuk® | [added: | |]

| [removed: Ava & Viv®] [added: Art Class™] | [added: | |] Made By Design™ | [added: | |] Spritz™ | [added: | |]

| Boots & Barkley® | [removed: Market Pantry®] | [added: | Opalhouse™ | | |] Sutton & Dodge® | [added: | |]

| [removed: Cat & Jack™] [added: Cloud Island™] | [added: | |] Original Use™ | [added: | |] Universal Thread™ | [added: | |]

| [removed: Gilligan & O'Malley®] [added: Everspring™] | [added: | |] Project 62™ | [added: | |] Wild Fable™ | [added: | |]

| Goodfellow & [removed: Co.™] [added: Co™] | [added: | |] Room Essentials® | [removed: Wine Cube®] | [added: | Xhilaration® | | |]

| Exclusive Brands | | | [added: | | | | | |]

| [removed: C9 by Champion® |] Hand Made Modern® | [removed: Kid Made Modern®] | [added: | Rosé Bae™ | | | | | |]

[removed: Distribution][added: Distribution]

The vast majority of merchandise is distributed to our stores through our network of [removed: 40] distribution centers.

Common carriers ship [removed: general] merchandise to and from our distribution centers.

Vendors or [removed: third party] [added: third-party] distributors ship certain food items and other merchandise directly to our stores.

Merchandise sold through our digital channels is distributed to our guests via common carriers (from stores, distribution centers, vendors, and [removed: third party] [added: third-party] distributors), delivery via our [removed: wholly-owned] [added: wholly owned] subsidiary, Shipt, Inc. (Shipt), and through guest pick-up at our stores.

[removed: Using our] [added: Our] stores [removed: as fulfillment points] [added: fulfill the majority of the digitally originated sales, which] allows improved product [removed: availability and] [added: availability, faster] delivery [removed: times] [added: times,] and [removed: also reduces] [added: reduced] shipping costs.

[removed: Employees][added: Employees]

[removed: At] [added: As of] February [removed: 2, 2019,] [added: 1, 2020,] we employed approximately [removed: 360,000] [added: 368,000] full-time, [removed: part-time] [added: part-time,] and seasonal employees, referred to as "team members." Because of the seasonal nature of the retail business, employment levels peak in the holiday season.

[removed: Working Capital][added: Working Capital]

The [removed: Liquidity and Capital Resources] [added: [Liquidity and](#i2240ff3e90b94c9b90ef0a9188b2d860_52) [Capital Resources](#i2240ff3e90b94c9b90ef0a9188b2d860_52)] section in MD&A provides additional details.

[removed: Competition][added: Competition]

We compete with traditional and internet retailers, including [added: department stores,] off-price general merchandise retailers, [removed: apparel retailers,] wholesale clubs, [removed: category specific] [added: category-specific] retailers, drug stores, supermarkets, and other forms of retail commerce.

[removed: Intellectual Property][added: Intellectual Property]

[removed: Our principal trademarks, including Target, SuperTarget] [added: Pay Less." brand promise,] and our "Bullseye Design," have been registered with the United States (U.S.) Patent and Trademark Office.

[removed: Geographic Information][added: Geographic Information]

[removed: Available Information][added: Available Information]

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| All in Motion™ | | | JoyLab™ | | | Smith & Hawken® | | |

| Auden™ | | | Market Pantry® | | | Stars Above™ | | |

| Ava & Viv® | | | More Than Magic™ | | | Sun Squad™ | | |

| Cat & Jack™ | | | Open Story™ | | | Threshold™ | | |

| Colsie™ | | | Pillowfort™ | | | up & up® | | |

| Good & Gather™ | | | Prologue™ | | | Wondershop™ | | |

| Hearth & Hand™ with Magnolia | | | Shade & Shore™ | | | | | |

| heyday™ | | | Simply Balanced™ | | | | | |

| | | | | | | | | |

| California Roots™ | | | Isabel Maternity™ by Ingrid & Isabel® | | | The Collection | | |

| Defy & Inspire™ | | | Just One You® made by carter's® | | | Wine Cube® | | |

| Fieldcrest® | | | Kristin Ess | | | Who What Wear™ | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 2 | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | BUSINESS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

Customer Loyalty Programs

Our guests receive a 5 percent discount on nearly all purchases and receive free shipping at Target.com when they use their Target Debit Card, Target Credit Card, or Target™ MasterCard® (collectively, RedCards™).

We also seek to drive customer loyalty and trip frequency through our Target Circle program, where members earn 1 percent rewards on nearly all non-RedCard purchases and other benefits.

Our principal trademarks, including Target, our "Expect More.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 3 | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | BUSINESS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

| | | |

| --- | --- | --- |

| Archer Farms® | Knox Rose™ | Smith & Hawken® |

| Bullseye's Playground™ | Opalhouse™ | Threshold™ |

| Cloud Island™ | Pillowfort™ | up & up® |

| Embark® | Prologue™ | Who What Wear™ |

| heyday™ | Shade & Shore™ | Wondershop™ |

| Hyde & Eek! Boutique™ | Simply Balanced™ | Xhilaration® |

| DENIZEN® from Levi's® | Hearth & Hand™ with Magnolia | Nate Berkus™ for Target |

| Fieldcrest® | Isabel Maternity™ by Ingrid & Isabel® | Oh Joy!® for Target |

| Genuine Kids® from OshKosh® | Just One You® made by carter's® | Umbro™ for Target |

[removed: Federal] [added: Federal] Securities Law Class [removed: Actions][added: Actions]

[removed: ERISA] [added: ERISA] Class [removed: Actions][added: Actions]

On July 16, 2018, the plaintiffs appealed the Court's [removed: dismissal.][added: dismissal to the Appeals Court.]

For a description of other legal proceedings, see [removed: Note 15 of] [added: [Note](#i2240ff3e90b94c9b90ef0a9188b2d860_148) [14](#i2240ff3e90b94c9b90ef0a9188b2d860_148) to] the Financial Statements.

The appeal has been argued before the U.S. Court of Appeals for the Eighth Circuit (the Appeals Court), and we are awaiting a decision.

The Appeals Court has not yet heard oral arguments or issued a decision.

That appeal has not yet been heard or decided.

The following governmental enforcement proceedings relating to environmental matters are reported pursuant to instruction 5(C) of Item 103 of Regulation S-K because they involve potential monetary sanctions in excess of $100,000:

On February 27, 2015, the California Attorney General sent us a letter alleging, based on a series of compliance checks, that we have not achieved compliance with California’s environmental laws and the provisions of the injunction that was part of a settlement reached in 2011.

On December 5, 2018, the Alameda County Superior Court entered judgment approving a settlement regarding those allegations.

The settlement requires Target to pay $4.4 million for civil penalties, enforcement costs and supplemental environmental projects, and spend $3 million on certain past and future additional internal compliance measures.

| [added: UNITED STATES] SECURITIES AND EXCHANGE [removed: COMMISSION] [added: COMMISSION] | | | [added: | | | | | | | | | | | |]

[removed: | |] Washington, D.C. 20549 [removed: | |]

[removed: | FORM 10-K | | |][added: FORM 10-K]

[removed: | (Mark One) | |][added: (Mark One)]

[removed: | x | ANNUAL] [added: ☒ ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934 |][added: 1934]

[removed: |] For the fiscal year ended February [removed: 2, 2019 | |][added: 1, 2020]

[removed: | o | TRANSITION] [added: ☐ TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934 |][added: 1934]

[removed: |] For the transition period from [added: ____] to [removed: | |][added: ____]

[removed: |] Commission [removed: file number] [added: File Number] 1-6049 [removed: | |]

[removed: ][added: ]

[removed: TARGET CORPORATION][added: TARGET CORPORATION]

[removed: | Minnesota] (State or other jurisdiction of incorporation or organization) [removed: | | 41-0215170] (I.R.S. Employer Identification No.) [removed: |]

[removed: | 1000] [added: 1000] Nicollet Mall, Minneapolis, Minnesota [removed: (Address of principal executive offices) | | 55403 (Zip Code) |][added: 55403]

Securities [removed: Registered Pursuant To] [added: registered pursuant to] Section [removed: 12(B) Of The] [added: 12(g) of the] Act: [added: None]

| Title of [removed: Each Class] [added: each class] | | [added: | | | | Trading Symbol(s) | | | | | |] Name of [removed: Each Exchange] [added: each exchange] on [removed: Which Registered] [added: which registered] | [added: | |]

| [removed: Common Stock,] [added: Common stock,] par value $0.0833 per [removed: share] [added: share] | | [removed: New] [added: | | | | TGT | | | | | | New] York Stock [removed: Exchange] [added: Exchange] | [added: | |]

[removed: |] Securities registered pursuant to Section [removed: 12(g)] [added: 12(b)] of the [removed: Act: None | | |][added: Securities Exchange Act of 1934:]

Yes [removed: o] [added: ☐] No x

[removed: Note] [added: *Note*] – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

| [added: | | |] Large accelerated filer [added: | | |] x | | [added: |] Accelerated filer [added: | | |] o | | [added: | | | |] Non-accelerated filer [added: | | |] o | | [added: | | | |]

| [added: | | |] Smaller reporting company [removed: o] | | | [added: ☐ | | |] Emerging growth company [removed: o] | | | [added: ☐ | | | | | |]

The aggregate market value of the voting stock held by non-affiliates of the registrant as of August [removed: 4, 2018,] [added: 2, 2019,] was [removed: $42,763,636,334] [added: $41,576,546,635] based on the closing price of [removed: $81.45] [added: $81.52] per share of Common Stock as reported on the New York Stock Exchange Composite Index.

Total shares of Common Stock, par value $0.0833, outstanding [removed: at] [added: as of] March [removed: 7, 2019,] [added: 5, 2020,] were [removed: 516,333,213.][added: 500,961,951.]

[removed: | DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE |][added: REFERENCE]

[removed: |] Portions of Target's Proxy Statement for the Annual Meeting of Shareholders to be held on June [removed: 12, 2019,] [added: 10, 2020,] are incorporated into Part III. [removed: |]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

[removed: | [PART I](#s554B691B8F7F5C118A5065042AD0E819) | | | |][added: PART I]

| [Item [removed: 1](#s072FB9F2AA8A546C8A4574D25AF4AB08)] [added: 1](#i2240ff3e90b94c9b90ef0a9188b2d860_13)] | | [removed: [Business](#s072FB9F2AA8A546C8A4574D25AF4AB08)] | [removed: [2](#s072FB9F2AA8A546C8A4574D25AF4AB08)] | [added: | | [Business](#i2240ff3e90b94c9b90ef0a9188b2d860_13) | | | [2](#i2240ff3e90b94c9b90ef0a9188b2d860_13) | | | | | | | | |]

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| [Item [removed: 7A](#s811CA369927955C18333F2CB974B6B11)] [added: 7A](#i2240ff3e90b94c9b90ef0a9188b2d860_61)] | | [added: | | | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s811CA369927955C18333F2CB974B6B11)] [added: Risk](#i2240ff3e90b94c9b90ef0a9188b2d860_61)] | [removed: [31](#s811CA369927955C18333F2CB974B6B11)] | [added: | [29](#i2240ff3e90b94c9b90ef0a9188b2d860_61) | | | | | | | | |]

| [Item [removed: 8](#s9799455DC7205B92988420E17419A583)] [added: 8](#i2240ff3e90b94c9b90ef0a9188b2d860_64)] | | [added: | | | |] [Financial Statements and Supplementary [removed: Data](#s9799455DC7205B92988420E17419A583)] [added: Data](#i2240ff3e90b94c9b90ef0a9188b2d860_64)] | [removed: [32](#s9799455DC7205B92988420E17419A583)] | [added: | [30](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | | | | | | | |]

| [Item [removed: 9](#s14EB0CA0924750A5BBD0A840D0BB89D1)] [added: 9](#i2240ff3e90b94c9b90ef0a9188b2d860_208)] | | [added: | | | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s14EB0CA0924750A5BBD0A840D0BB89D1)] [added: Disclosure](#i2240ff3e90b94c9b90ef0a9188b2d860_208)] | [removed: [64](#s14EB0CA0924750A5BBD0A840D0BB89D1)] | [added: | [60](#i2240ff3e90b94c9b90ef0a9188b2d860_208) | | | | | | | | |]

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OR

Minnesota 41-0215170

(Address of principal executive offices) (Zip Code)

Former name, former address and former fiscal year, if changed since last report: N/A

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| | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

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| [PART II](#i2240ff3e90b94c9b90ef0a9188b2d860_34) | | | | | | | | | | | | | | | | | |

| [PART IV](#i2240ff3e90b94c9b90ef0a9188b2d860_235) | | | | | | | | | | | | | | | | | |

| [SIGNATURES](#i2240ff3e90b94c9b90ef0a9188b2d860_244) | | | | | | | | | | | | | | | [66](#i2240ff3e90b94c9b90ef0a9188b2d860_244) | | |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 1 | | |

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| | | | BUSINESS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

10-K 1 tgt-20190202x10k.htm 10-K

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| UNITED STATES | | |

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| OR | |

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| [PART II](#s697CE7E6B0085E2C959EB501DAC8086A) | | | |

| [PART IV](#s03A80F4350B75F3DA9CF8BDD9D7FA771) | | | |

| [Signatures](#sF9D27C44A4E555A2BEBC2C043E7B7194) | | | [70](#sF9D27C44A4E555A2BEBC2C043E7B7194) |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 9 | | |

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| | | | PROPERTIES | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

| [removed: Stores at] [added: Stores as of] February [removed: 2, 2019] [added: 1, 2020] | [added: | |] Stores | | [added: |] Retail Sq. Ft. (in thousands) | | | | [added: | | Stores as of February 1, 2020 | | |] Stores | | [added: |] Retail Sq. Ft. (in thousands) | | [added: |]

| Alabama | [added: | |] 22 | | [added: |] 3,132 | | | [added: | | |] Montana | [added: | |] 7 | | [added: |] 777 | | [added: |]

| Alaska | [added: | |] 3 | | [added: |] 504 | | | [added: | | |] Nebraska | [added: | |] 14 | | [removed: 2,006] | [added: 2,005] | [added: | |]

| Arizona | [removed: 47] | | [removed: 6,187] [added: 46] | | | [added: 6,080 | | | | | |] Nevada | [added: | |] 17 | | [added: |] 2,242 | | [added: |]

| Arkansas | [added: | |] 9 | | [added: |] 1,165 | | | [added: | | |] New Hampshire | [added: | |] 9 | | [added: |] 1,148 | | [added: |]

| California | [removed: 287] | | [removed: 36,042] [added: 297] | | | [added: 36,474 | | | | | |] New Jersey | [added: | |] 47 | | [added: |] 5,992 | | [added: |]

| Colorado | [added: | |] 42 | | [removed: 6,245] | [added: 6,244] | | [added: | | | |] New Mexico | [added: | |] 10 | | [added: |] 1,185 | | [added: |]

| Connecticut | [removed: 20] | | [removed: 2,672] [added: 21] | | | [added: 2,731 | | | | | |] New York | [removed: 82] | | [removed: 10,134] [added: 84] | | [added: | 10,178 | | |]

| Delaware | [added: | |] 3 | | [added: |] 440 | | | [added: | | |] North Carolina | [added: | |] 51 | | [added: |] 6,540 | | [added: |]

| District of Columbia | [removed: 1] | | [removed: 179] [added: 5] | | | [added: 342 | | | | | |] North Dakota | [added: | |] 4 | | [added: |] 554 | | [added: |]

| Georgia | [added: | |] 50 | | [added: |] 6,820 | | | [added: | | |] Oklahoma | [added: | |] 15 | | [removed: 2,168] | [added: 2,167] | [added: | |]

| Hawaii | [added: | |] 7 | | [added: |] 1,111 | | | [added: | | |] Oregon | [added: | |] 20 | | [added: |] 2,312 | | [added: |]

| Idaho | [added: | |] 6 | | [added: |] 664 | | | [added: | | |] Pennsylvania | [added: | |] 75 | | [added: |] 9,094 | | [added: |]

| Illinois | [removed: 94] | | [removed: 11,926] [added: 95] | | | [added: 11,950 | | | | | |] Rhode Island | [added: | |] 4 | | [added: |] 517 | | [added: |]

| Indiana | [added: | |] 31 | | [added: |] 4,174 | | | [added: | | |] South Carolina | [added: | |] 19 | | [added: |] 2,359 | | [added: |]

| Iowa | [added: | |] 20 | | [added: |] 2,835 | | | [added: | | |] South Dakota | [added: | |] 5 | | [added: |] 580 | | [added: |]

| Kansas | [added: | |] 17 | | [added: |] 2,385 | | | [added: | | |] Tennessee | [added: | |] 30 | | [added: |] 3,816 | | [added: |]

| Kentucky | [removed: 13] | | [removed: 1,551] [added: 14] | | | [added: 1,571 | | | | | |] Texas | [added: | |] 150 | | [added: |] 20,919 | | [added: |]

| Louisiana | [added: | |] 15 | | [added: |] 2,120 | | | [added: | | |] Utah | [added: | |] 14 | | [added: |] 1,979 | | [added: |]

| Maine | [added: | |] 5 | | [added: |] 630 | | | [added: | | |] Vermont | [added: | |] 1 | | [added: |] 60 | | [added: |]

| Michigan | [added: | |] 53 | | [removed: 6,370] | [added: 6,286] | | [added: | | | |] West Virginia | [added: | |] 6 | | [added: |] 755 | | [added: |]

| Minnesota | [added: | |] 73 | | [added: |] 10,315 | | | [added: | | |] Wisconsin | [added: | |] 36 | | [removed: 4,430] | [added: 4,427] | [added: | |]

| Mississippi | [added: | |] 6 | | [added: |] 743 | | | [added: | | |] Wyoming | [added: | |] 2 | | [added: |] 187 | | [added: |]

| Missouri | [added: | |] 35 | | [added: |] 4,608 | | | | | | | | [added: | | | | | | |]

| [removed: Stores] [added: Stores] and Distribution Centers [removed: at] [added: as of] February [removed: 2, 2019] [added: 1, 2020] | [added: | |] Stores | | [added: |] Distribution Centers (a) | | [added: |]

| Owned buildings on leased land | [removed: 158] | | [added: 157 | | |] — | | [added: |]

[removed: (a) The 40] [added: (a)The 42] distribution centers have a total of [removed: 51,688 thousand] [added: 53.2 million] square feet.

We own our corporate headquarters buildings located in and around Minneapolis, Minnesota, and we lease and own additional office space elsewhere in [added: Minneapolis and] the U.S. We also lease office space in [removed: 11 countries for various support functions.][added: other countries.]

For additional information on our properties, see the [removed: Capital Expenditures] [added: [Capital Expenditures](#i2240ff3e90b94c9b90ef0a9188b2d860_2648)] section in MD&A and [removed: Notes 11] [added: [Notes](#i2240ff3e90b94c9b90ef0a9188b2d860_127) [10](#i2240ff3e90b94c9b90ef0a9188b2d860_127)] and [removed: 18 of Item 8, Financial] [added: [17](#i2240ff3e90b94c9b90ef0a9188b2d860_163) to [Part II](#i2240ff3e90b94c9b90ef0a9188b2d860_34), [Item 8](#i2240ff3e90b94c9b90ef0a9188b2d860_64), [Financial] Statements and Supplementary [removed: Data] [added: Data](#i2240ff3e90b94c9b90ef0a9188b2d860_64)] (the Financial Statements).

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| Florida | | | 124 | | | 17,053 | | | | | | Ohio | | | 64 | | | 7,829 | | |

| Maryland | | | 40 | | | 4,960 | | | | | | Virginia | | | 59 | | | 7,713 | | |

| Massachusetts | | | 47 | | | 5,467 | | | | | | Washington | | | 39 | | | 4,377 | | |

| | | | | | | | | | | | | Total | | | 1,868 | | | 240,516 | | |

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| Owned | | | 1,526 | | | 33 | | |

| Leased | | | 185 | | | 9 | | |

| Total | | | 1,868 | | | 42 | | |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 10 | | |

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| | | | LEGAL PROCEEDINGS & MINE SAFETY DISCLOSURES | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

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| Florida | 123 | | 17,015 | | | Ohio | 63 | | 7,703 | |

| Maryland | 39 | | 4,860 | | | Virginia | 59 | | 7,714 | |

| Massachusetts | 46 | | 5,388 | | | Washington | 37 | | 4,329 | |

| | | | | | | Total | 1,844 | | 239,581 | |

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| Owned | 1,525 | | 33 | |

| Leased | 161 | | 7 | |

| Total | 1,844 | | 40 | |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 11 | | |

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| | | | EXECUTIVE OFFICERS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

| Name | [added: | |] Title and Business Experience | [added: | |] Age | | [added: |]

| Brian C. Cornell | [added: | |] Chairman of the Board and Chief Executive Officer since August 2014. [removed: Chief Executive Officer of PepsiCo Americas Foods, a division of PepsiCo, Inc., a multinational food and beverage corporation, from March 2012 to July 2014.] | [removed: 60] | | [added: 61 | | |]

| Rick H. Gomez | [added: | |] Executive Vice President and Chief [added: Marketing, Digital & Strategy Officer since December 2019. Executive Vice President and Chief] Marketing & Digital Officer [removed: since] [added: from] January [added: 2019 to December] 2019. Executive Vice President and Chief Marketing Officer from January 2017 to January 2019. Senior Vice President, Brand and Category Marketing from April 2013 to January 2017. | [removed: 49] | | [added: 50 | | |]

| Melissa K. Kremer | [added: | |] Executive Vice President and Chief Human Resources Officer since January 2019. Senior Vice President, Talent and Organizational Effectiveness from October 2017 to January 2019. Vice President, Human Resources, Merchandising, Strategy & Innovation, from September 2015 to October 2017. From February 2012 until September 2015, Ms. Kremer held several leadership positions in Human Resources, supporting Merchandising, Target.com & Mobile, Enterprise Strategy & Multichannel. | [removed: 41] | | [added: 42 | | |]

| Don H. Liu | [added: | |] Executive Vice President, Chief Legal & Risk Officer and Corporate Secretary since October 2017. Executive Vice President, Chief Legal Officer and Corporate Secretary from August 2016 to September 2017. Executive Vice President, General Counsel and Corporate Secretary of Xerox Corporation from July 2014 to August [removed: 2016, and Senior Vice President, General Counsel and Corporate Secretary from March 2007 to July 2014.] [added: 2016.] | [removed: 57] | | [added: 58 | | |]

| Stephanie A. Lundquist | [added: | |] Executive Vice President and President, Food & Beverage since January 2019. Executive Vice President and Chief Human Resources Officer from February 2016 to January 2019. Senior Vice President, Human Resources from January 2015 to February 2016. [removed: Senior Vice President, Stores and Distribution Human Resources from February 2014 to January 2015.] | [removed: 43] | | [added: 44 | | |]

| Michael E. McNamara | [added: | |] Executive Vice President and Chief Information Officer since January 2019. Executive Vice President and Chief Information & Digital Officer from September 2016 to January 2019. Executive Vice President and Chief Information Officer from June 2015 to September 2016. Officer of Tesco PLC, a multinational grocery and general merchandise retailer, from March 2011 to May 2015. | [removed: 54] | | [added: 55 | | |]

| John J. Mulligan | [added: | |] Executive Vice President and Chief Operating Officer since September 2015. Executive Vice President and Chief Financial Officer from April 2012 to August 2015. | [removed: 53] | | [added: 54 | | |]

| [removed: Janna A. Potts] [added: Mark J. Schindele] | [added: | |] Executive Vice President and Chief Stores Officer since January [removed: 2016. Senior Vice President, Stores and Supply Chain Human Resources from February 2015 to January 2016.] [added: 2020.] Senior Vice President, Target [removed: Canada Stores and Distribution] [added: Properties] from [removed: March 2014] [added: January 2015] to January [removed: 2015.] [added: 2020.] | [added: | |] 51 | | [added: |]

| Laysha L. Ward | [added: | |] Executive Vice President and Chief External Engagement Officer since January 2017. [added: Executive Vice President and] Chief Corporate Social Responsibility Officer from December 2014 to January 2017. [removed: President, Community Relations and Target Foundation from July 2008 to December 2014.] | [removed: 51] | | [added: 52 | | |]

[removed: PART II][added: PART II]

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| Michael J. Fiddelke | | | Executive Vice President and Chief Financial Officer since November 2019. Senior Vice President, Operations from August 2018 to October 2019. Senior Vice President, Merchandising Capabilities from March 2017 to August 2018. Senior Vice President, Financial Planning & Analysis from July 2015 to March 2017. Vice President, Pay & Benefits from March 2013 to July 2015. | | | 43 | | |

| A. Christina Hennington | | | Executive Vice President and Chief Merchandising Officer, Hardlines, Essentials and Capabilities since January 2020. Senior Vice President, Group Merchandise Manager, Essentials, Beauty, Hardlines and Services from January 2019 to January 2020. Senior Vice President, Merchandising Essentials, Beauty and Wellness from April 2017 to January 2019. Senior Vice President, Merchandising Transformation and Operations from August 2015 to April 2017. Senior Vice President, Health and Beauty from May 2014 to August 2015. | | | 45 | | |

| Jill K. Sando | | | Executive Vice President and Chief Merchandising Officer, Style and Owned Brands since January 2020. Senior Vice President, Group Merchandise Manager, Apparel & Accessories and Home from January 2019 to January 2020. Senior Vice President, Home from May 2014 to January 2019. | | | 51 | | |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 12 | | |

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| | | | OTHER INFORMATION | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

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| Minsok Pak | Executive Vice President and Chief Strategy & Innovation Officer since August 2017. Senior Vice President of Shopper Marketing & Channel Development, LEGO Retail, LEGO Group, a developer and producer of toys, from April 2016 to July 2017. Partner, Digital Transformation, McKinsey & Company, a global management consulting firm, from April 2014 to April 2016. Managing Director, Actium Corporation, a private equity firm, from June 2010 to April 2014. | 50 | |

| Cathy R. Smith | Executive Vice President and Chief Financial Officer since September 2015. Executive Vice President and Chief Financial Officer of Express Scripts Holding Company, a pharmacy benefit manager, from February 2014 to December 2014. | 55 | |

| Mark J. Tritton | Executive Vice President and Chief Merchandising Officer since June 2016. President of Nordstrom Product Group, of Nordstrom Inc., a fashion specialty retailer, from June 2009 to June 2016. | 55 | |

[removed: At] [added: As of] March [removed: 7, 2019,] [added: 5, 2020,] there were [removed: 14,331] [added: 14,019] shareholders of record.

Dividends declared per share for each fiscal quarter during [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] are disclosed in [removed: Note 26 of] [added: [Note](#i2240ff3e90b94c9b90ef0a9188b2d860_202) [25](#i2240ff3e90b94c9b90ef0a9188b2d860_202) to] the Financial Statements.

On September 20, 2016, our Board of Directors authorized a $5 billion share repurchase [removed: program.][added: program (2016 Program).]

There is no stated expiration for the share repurchase [removed: program.][added: programs.]

Under [removed: this program,] [added: the 2016 Program,] we [added: had] repurchased [removed: 48.6] [added: 64.5] million shares of common stock through February [removed: 2, 2019,] [added: 1, 2020,] at an average price of [removed: $69.13,] [added: $75.55,] for a total investment of [removed: $3.4] [added: $4.9] billion.

The table below presents information with respect to Target common stock purchases made during the three months ended February [removed: 2, 2019,] [added: 1, 2020,] by Target or any "affiliated purchaser" of Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.

| [removed: Period] [added: Share Repurchase Activity] | [added: | |] Total Number of Shares Purchased [added: (b)] | | | [added: | | |] Average Price Paid per Share | | | | [added: | |] Total Number of Shares Purchased as Part of Publicly Announced Programs | | | [added: | | |] Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Programs | | |

| November [removed: 4, 2018] [added: 3, 2019] through [removed: December 1, 2018] [added: November 30, 2019] | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Open market and privately negotiated purchases | [removed: —] | | [added: 42,836] | [added: | | | | |] $ | [removed: —] [added: 126.41] | | | [removed: —] | | [added: 42,836] | [added: | | | | |] $ | [removed: 1,808,949,841] [added: 5,274,490,965] | |

| December [removed: 2, 2018] [added: 1, 2019] through January [removed: 5, 2019] [added: 4, 2020] | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| January [removed: 6, 2019] [added: 5, 2020] through February [removed: 2, 2019] [added: 1, 2020] | | | | | | | | | | | | | | [added: | | | | | | | | | |]

[removed: | (a) | Represents] [added: (a)Represents] the incremental shares received upon final settlement of the accelerated share repurchase (ASR) [removed: agreement] [added: arrangement] initiated in third quarter [removed: 2018. |][added: 2019.]

[removed: ][added: ]

| | [added: | |] Fiscal Years Ended | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| | [removed: February 1, 2014] | | [removed: |] January 31, 2015 | | | January 30, 2016 | | | January 28, 2017 | | | February 3, 2018 | | | February 2, 2019 | | | [added: February 1, 2020 | | | | | | | | | | | | | | | | | |]

The graph above compares the cumulative total shareholder return on our common stock for the last five fiscal years with (i) the cumulative total return on the S&P 500 [removed: Index and] [added: Index,] (ii) the peer group [added: used in previous filings] consisting of 17 online, general merchandise, department store, food, and specialty retailers (Amazon.com, Inc., Best Buy Co., Inc., Costco Wholesale Corporation, CVS Health Corporation, Dollar General Corporation, Dollar Tree, Inc., The Gap, Inc., The Home Depot, Inc., Kohl's Corporation, The Kroger Co., Lowe's Companies, Inc., Macy's, Inc., Rite Aid Corporation, Sears Holdings Corporation, The TJX Companies, Inc., Walgreens Boots Alliance, Inc., and Walmart Inc.) [removed: (Peer] [added: (Previous Peer Group), and (iii) a new peer group consisting of the companies in the Previous Peer Group, plus Nordstrom, Inc., but excluding Sears Holdings Corporation, which filed for bankruptcy protection and is no longer publicly traded, and The Gap, Inc., which announced its intention to enter a transformational period for its brands (Current Peer] Group).

The [added: Current] Peer Group is consistent with the retail peer group used for our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on June [removed: 12, 2019,] [added: 10, 2020,] excluding Publix Super Markets, Inc., which is not quoted on a public stock exchange.

The graph assumes the investment of $100 in Target common stock, the S&P 500 Index, and the Peer Group on [removed: February 1, 2014,] [added: January 30, 2015,] and reinvestment of all dividends.

On September 19, 2019, our Board of Directors authorized a new $5 billion share repurchase program (2019 Program).

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| Period | | | | | | | | | | | | | | | | | | | | | | | |

| Open market and privately negotiated purchases | | | 515,087 | | | | | | 124.21 | | | | | | 514,737 | | | | | | 5,210,557,849 | | |

| October 2019 ASR (a) | | | 275,916 | | | | | | 117.64 | | | | | | 275,916 | | | | | | 5,337,294,566 | | |

| Open market and privately negotiated purchases | | | 1,830,760 | | | | | | 116.08 | | | | | | 1,830,760 | | | | | | 5,124,785,446 | | |

| Total | | | 2,664,599 | | | | | | $ | 117.81 | | | | | 2,664,249 | | | | | | $ | 5,124,785,446 | |

(b)Includes shares of common stock reacquired from team members who tendered owned shares to satisfy the exercise price and tax withholding on stock option exercises.

For the three months ended February 1, 2020, 350 shares were reacquired at a weighted average price per share of $128.81 pursuant to our long-term incentive plan.

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 13 | | |

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| | | | OTHER INFORMATION | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

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| Target | | | $ | 100.00 | | $ | 101.21 | | $ | 91.94 | | $ | 109.76 | | $ | 110.65 | | $ | 177.66 | | | | | | | | | | | | | | | | |

| S&P 500 Index | | | 100.00 | | | 99.33 | | | 120.06 | | | 147.48 | | | 147.40 | | | 179.17 | | | | | | | | | | | | | | | | | |

| Current Peer Group | | | 100.00 | | | 109.53 | | | 121.71 | | | 175.63 | | | 183.05 | | | 222.19 | | | | | | | | | | | | | | | | | |

| Previous Peer Group | | | 100.00 | | | 109.11 | | | 121.15 | | | 174.97 | | | 182.10 | | | 220.86 | | | | | | | | | | | | | | | | | |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 14 | | |

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| | | | OTHER INFORMATION | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

We began repurchasing shares under this authorization during the fourth quarter of 2016.

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| Open market and privately negotiated purchases | 1,242,920 | | | 64.83 | | | | 1,242,920 | | | 1,728,366,804 | | |

| October 2018 ASR (a) | 2,224,074 | | | 77.98 | | | | 2,224,074 | | | 1,731,980,648 | | |

| Open market and privately negotiated purchases | 1,285,280 | | | 69.74 | | | | 1,285,280 | | | 1,642,349,966 | | |

| Total | 4,752,274 | | | $ | 72.31 | | | 4,752,274 | | | $ | 1,642,349,966 | |

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| Target | $ | 100.00 | | $ | 134.13 | | $ | 135.76 | | $ | 123.33 | | $ | 147.22 | | $ | 148.42 | |

| S&P 500 Index | 100.00 | | | 114.22 | | | 113.46 | | | 137.14 | | | 168.46 | | | 168.36 | | |

| Peer Group | 100.00 | | | 124.37 | | | 135.70 | | | 150.68 | | | 217.62 | | | 226.48 | | |

| [added: Selected Financial Data] | [added: | |] For the Fiscal Year | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| (millions, except per share data) | [added: | | 2019 | | |] 2018 | | | [removed: 2017 As Adjusted] [added: *As Adjusted*] (a)(b) | | | [removed: 2016 As Adjusted] [added: *As Adjusted*] (b) | | | [removed: 2015 As Adjusted] [added: *As Adjusted*] (b) | | | [removed: 2014 (b)] | | | [added: | | | | | | | | |]

| Sales | [added: | |] $ | [added: 77,130 | | $ |] 74,433 | | $ | 71,786 | | $ | 69,414 | | $ | 73,717 | | [removed: $] | [removed: 72,618] | | [added: | | | | | | | | |]

| Total revenue | [added: | | 78,112 | | |] 75,356 | | | 72,714 | | | 70,271 | | | 74,494 | | | [removed: 72,618] | | | [added: | | | | | | | | |]

| [removed: Net Earnings / (Loss)] [added: Net Earnings] | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Continuing operations | [added: | | 3,269 | | |] 2,930 | | | 2,908 | | | 2,666 | | | 3,321 | | | [removed: 2,449] | | | [added: | | | | | | | | |]

| Discontinued operations | [added: | | 12 | | |] 7 | | | 6 | | | 68 | | | 42 | | | [removed: (4,085] | | [removed: )] | [added: | | | | | | | | |]

| Net earnings [removed: / (loss)] | [added: | | 3,281 | | |] 2,937 | | | 2,914 | | | 2,734 | | | 3,363 | | | [removed: (1,636] | | [removed: )] | [added: | | | | | | | | |]

| [removed: Basic] [added: Basic] Earnings [removed: / (Loss)] Per [removed: Share] [added: Share] | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Continuing operations | [added: | | 6.39 | | |] 5.54 | | | 5.32 | | | 4.61 | | | 5.29 | | | [removed: 3.86] | | | [added: | | | | | | | | |]

| Discontinued operations | [added: | | 0.02 | | |] 0.01 | | | 0.01 | | | 0.12 | | | 0.07 | | | [removed: (6.44] | | [removed: )] | [added: | | | | | | | | |]

| Basic earnings [removed: / (loss)] per share | [added: | | 6.42 | | |] 5.55 | | | 5.32 | | | 4.73 | | | 5.35 | | | [removed: (2.58] | | [removed: )] | [added: | | | | | | | | |]

| [removed: Diluted] [added: Diluted] Earnings [removed: / (Loss)] Per [removed: Share] [added: Share] | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Continuing operations | [added: | | 6.34 | | |] 5.50 | | | 5.29 | | | 4.58 | | | 5.25 | | | [removed: 3.83] | | | [added: | | | | | | | | |]

| Discontinued operations | [added: | | 0.02 | | |] 0.01 | | | 0.01 | | | 0.12 | | | 0.07 | | | [removed: (6.38] | | [removed: )] | [added: | | | | | | | | |]

| Diluted earnings [removed: / (loss)] per share | [added: | | 6.36 | | |] 5.51 | | | 5.29 | | | 4.69 | | | 5.31 | | | [removed: (2.56] | | [removed: )] | [added: | | | | | | | | |]

| Cash dividends declared per share | [added: | | 2.62 | | |] 2.54 | | | 2.46 | | | 2.36 | | | 2.20 | | | [removed: 1.99] | | | [added: | | | | | | | | |]

| | [added: | |] February [added: 1, 2020 | | | February] 2, 2019 | | | February 3, 2018 [removed: As Adjusted] [added: *As Adjusted*] (b) | | | January 28, 2017 [removed: As Adjusted] [added: *As Adjusted*] (b) | | | January 30, 2016 (b) | | | [removed: January 31, 2015 (b)] | | | [added: | | | | | | | | |]

| Total assets | [added: | | 42,779 | | |] 41,290 | | | 40,303 | | | 38,724 | | | 40,262 | | | [removed: 41,172] | | | [added: | | | | | | | | |]

| Long-term debt, including current portion | [added: | | 11,499 | | |] 11,275 | | | 11,398 | | | 12,591 | | | 12,760 | | | [removed: 12,725] | | | [added: | | | | | | | | |]

[removed: | (a) | Consisted] [added: (a)Consisted] of 53 weeks. [removed: |]

[removed: | (b) | The] [added: (b)The] selected financial data for fiscal years 2017, 2016, and 2015 and as of February 3, 2018 and January 28, 2017, reflect the adoption of Accounting Standards Update (ASU) No. [removed: 2014-09—Revenue] [added: 2014-09—*Revenue] from Contracts with Customers (Topic [removed: 606).] [added: 606).*] The selected financial data for fiscal years 2017 and 2016 and as of February 3, 2018 and January 28, 2017, reflect the adoption of ASU No. [removed: 2016-02—Leases] [added: 2016-02—*Leases] (Topic [removed: 842). Note 2 of the Financial Statements provides additional information.] [added: 842)* (Lease Standard)*.*] The selected financial data [removed: for fiscal year 2014 and] as of January 30, 2016, [removed: and January 31, 2015, do] [added: does] not reflect adoption of Topic 606 [removed: and] [added: or] Topic 842. [removed: |]

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| | | | As of | | | | | | | | | | | | | | | | | | | | | | | | | | |

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| TARGET CORPORATION | | |  | | | 2019 Form 10-K | | | 15 | | |

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| | | | MANAGEMENT'S DISCUSSION AND ANALYSIS | | | [Table of Contents](#i2240ff3e90b94c9b90ef0a9188b2d860_7) | | |

| | | | EXECUTIVE SUMMARY & ANALYSIS OF OPERATIONS | | | [Index to Financial Statements](#i2240ff3e90b94c9b90ef0a9188b2d860_64) | | |

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| | As of | | | | | | | | | | | | | | |

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[removed: Report] [added: Report] of Management on the Consolidated Financial [removed: Statements][added: Statements]

| Brian C. Cornell Chairman and Chief Executive Officer March [removed: 13, 2019] [added: 11, 2020] | | [removed: Cathy R. Smith] [added: | | | | Michael J. Fiddelke] Executive Vice President and Chief Financial Officer | [added: | |]

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: Opinion] [added: Opinion] on the Financial [removed: Statements][added: Statements]

We have audited the accompanying consolidated statements of financial position of Target Corporation (the Corporation) as of February [removed: 2, 2019] [added: 1, 2020] and February [removed: 3, 2018,] [added: 2, 2019,] the related consolidated statements of operations, comprehensive income, cash flows and shareholders' investment for each of the three years in the period ended February [removed: 2, 2019,] [added: 1, 2020,] and the related notes (collectively referred to as the [removed: "consolidated] [added: “consolidated] financial [removed: statements").][added: statements”).]

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation at February [removed: 2, 2019] [added: 1, 2020] and February [removed: 3, 2018,] [added: 2, 2019,] and the results of its operations and its cash flows for each of the three years in the period ended February [removed: 2, 2019,] [added: 1, 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Corporation's internal control over financial reporting as of February [removed: 2, 2019,] [added: 1, 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March [removed: 13, 2019,] [added: 11, 2020] expressed an unqualified opinion thereon.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: |] Minneapolis, Minnesota [removed: March 13, 2019 | |]

[removed: Report] [added: Report] of Management on Internal Control over Financial [removed: Reporting][added: Reporting]

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we assessed the effectiveness of our internal control over financial reporting as of February [removed: 2, 2019,] [added: 1, 2020,] based on the framework in [removed: Internal] [added: *Internal] Control—Integrated Framework [removed: (2013),] [added: (2013)*,] issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Our internal control over financial reporting as of February [removed: 2, 2019,] [added: 1, 2020,] has been audited by Ernst & Young LLP, the independent registered public accounting firm who has also audited our consolidated financial statements, as stated in their report which appears on this page.

[removed: Opinion] [added: Opinion] on Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited Target Corporation’s internal control over financial reporting as of February [removed: 2, 2019,] [added: 1, 2020,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Target Corporation (the Corporation) maintained, in all material respects, effective internal control over financial reporting as of February [removed: 2, 2019,] [added: 1, 2020,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Corporation as of February [removed: 2, 2019] [added: 1, 2020] and February [removed: 3, 2018,] [added: 2, 2019,] the related consolidated statements of operations, comprehensive income, cash flows and shareholders' investment for each of the three years in the period ended February [removed: 2, 2019,] [added: 1, 2020,] and the related notes and our report dated March [removed: 13, 2019] [added: 11, 2020] expressed an unqualified opinion thereon.

[removed: Definition] [added: Definition] and Limitations of Internal Control Over Financial [removed: Reporting][added: Reporting]