As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/10/06  Target Corp                       10-K        1/28/06   14:2.4M                                   Merrill Corp-MD/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report Pursuant to Section 13 and 15(D)      HTML    213K 
 2: EX-10.M     Material Contracts                                  HTML     12K 
 3: EX-10.P     Material Contracts                                  HTML    126K 
 4: EX-12       Statements Regarding Computation of Ratios          HTML     40K 
 5: EX-13       Annual Report to Security Holders                   HTML   1.10M 
 6: EX-21       Subsidiaries of the Registrant                      HTML     12K 
 7: EX-23       Consents of Experts and Counsel                     HTML     12K 
 8: EX-24       Power of Attorney                                   HTML     53K 
 9: EX-31.A     302 Certification                                   HTML     16K 
10: EX-31.B     302 Certification                                   HTML     16K 
11: EX-32.A     906 Certification                                   HTML     11K 
12: EX-32.B     906 Certification                                   HTML     11K 
13: EX-99.A     Miscellaneous Exhibit                               HTML     16K 
14: EX-99.C     Miscellaneous Exhibit                               HTML     19K 

PART I

Item 1.   Business.

General

Target Corporation (Target) was incorporated in Minnesota in 1902. Target operates large-format general merchandise discount stores in the United States, which include Target and SuperTarget stores. We offer both everyday essentials and fashionable, differentiated merchandise at exceptional prices. Our ability to deliver a shopping experience that is preferred by our guests is supported by our strong supply chain and technology network, a devotion to innovation which is ingrained in our organization and culture, and our disciplined approach to managing our current business and investing in future growth. We operate as a single business segment.

Our credit card operation represents an integral component of our core retail business. Through our branded proprietary credit (or REDcard) products, we strengthen the bond with our guests, drive incremental sales and contribute meaningfully to earnings. We also operate Target.com, an online business, which is small relative to our overall size, but is growing at a much more rapid annual pace than our stores and provides important benefits to our stores and to our credit card operation.

We are committed to consistently delighting our guests, providing a workplace that is preferred by our team members and investing to improve the quality of life in communities where we operate. In this way, we believe we will continue to achieve profitable market share growth and deliver superior shareholder value for many years to come.

Financial Highlights

For information on key financial highlights for fiscal year 2005, see the items referenced in Item 6 of this Form 10-K.

Seasonality

Due to the seasonal nature of our business, a substantially larger share of total year revenues and earnings occur in the fourth quarter because it includes the holiday shopping season.

Merchandise

Target offers a wide assortment of general merchandise and a more limited assortment of food items in our stores. SuperTarget stores offer a full line of food items along with general merchandise. A significant portion of Target’s sales is from nationally-advertised merchandise. In addition, Target sells merchandise under our own private-label brands including, but not limited to, Market Pantry®, Archer Farms®, Merona®, Xhilaration® , ChoxieTM, TrutechTM, and Target Limited Edition, and through unique programs such as ClearRxSM and Global Bazaar. Target also sells merchandise under licensed brands including, but not limited to, Cherokee, Mossimo, Isaac Mizrahi for Target, Michael Graves Design, Sonia Kashuk, Woolrich, Liz Lange for Target, Simply Shabby Chic, Waverly, Fieldcrest, Thomas O’Brien, and Smith & Hawken. Target also generates revenue from in-store amenities such as Food Avenue®, pharmacies, and photo labs, and leased or licensed departments such as Target Optical and Starbucks.1

1        Cherokee is a registered trademark of Cherokee Inc. Mossimo is a registered trademark of Mossimo, Inc. Isaac Mizrahi is a trademark of IM Ready Made LLC. Michael Graves Design is a trademark of Michael Graves, Architect, P.A. Sonia Kashuk is a trademark of Sonia Kashuk, Inc. Woolrich is a registered trademark of John Rich & Sons Investment Holding Company. Liz Lange for Target is a registered trademark of Elizabeth Lange, Inc. Simply Shabby Chic is a trademark of Rachel Ashwell Designs, Inc. Waverly is a registered trademark of F. Schumacher & Co. Fieldcrest is a registered trademark of Official Pillowtex, LLC. Thomas O’Brien is a registered trademark of TOB International Marketing Corp. Smith & Hawken is a registered trademark of Smith & Hawken, Ltd. Starbucks is a trademark of Starbucks U.S. Brands, LLC. All rights reserved.

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During the fiscal year ended January 28, 2006, percentage of sales by product category for Target were as follows:

 

Distribution

The majority of Target’s merchandise is distributed through a network of 23 regional distribution centers and three import warehouses. Certain food items are distributed by third parties. Merchandise sold through Target.com is either distributed by Target through our own distribution center, through third parties, or shipped directly from vendors.

Employees

At the end of fiscal year 2005, Target employed approximately 338,000 full-time, part-time and seasonal team members. We consider our employee relations to be good.

Working Capital

Because of the seasonal nature of our business, our working capital needs are greater in the last two fiscal quarters of each year. The increase in working capital needs during this time is typically financed with cash flow from operations and short term borrowings. See further discussion in the Liquidity and Capital Resources section, Pages 19-20, of Target’s 2005 Annual Report to Shareholders incorporated herein by reference.

Competition

Target’s retail merchandising business is conducted under highly competitive conditions. Our stores compete with national and local department, specialty, off-price, discount, supermarket and drug store chains, independent retail stores and Internet businesses which sell similar lines of merchandise. Target also competes with other companies for new store sites.

We believe the principal methods of competing in this industry include brand recognition, customer service, store location, differentiated offerings, value, quality, fashion, price, advertising, depth of selection and credit availability. We believe that we have a competitive advantage with regard to these factors. Additionally, Target is a leader in supporting the communities in which we do business.

Intellectual Property

Our brand image is a critical element of our business strategy and our principal trademarks, including Target, SuperTarget and our “bullseye” design, have been registered with the U.S. Patent and Trademark Office.

Geographic Information

Substantially all of Target’s revenues are generated in, and long-lived assets are located in, the United States.

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Available Information

Target’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at www.target.com (click on “Investors” and “SEC Filings”) as soon as reasonably practicable after we file such material with, or furnish it to, the SEC. Target’s Corporate Governance Profile, Business Conduct Guide and the position descriptions for Target’s Board of Directors and Board committees are also available free of charge in print upon request or at www.target.com (click on “Investors” and “Corporate Governance”).

Item 1a.   Risk Factors.

For discussion of risk factors and cautionary statements relating to forward-looking information, see Exhibit (99)C to this Form 10-K, which is incorporated herein by reference.

Item 1b.   Unresolved Staff Comments.

Not Applicable.

Item 2.   Properties.

At year-end 2005, we owned 1,166 stores, leased 77 stores, and operated 154 “combined” stores for a total of 1,397 locations. Stores within the “combined” category are primarily owned buildings on leased land. At year-end we owned 22 regional distribution centers and two import warehouses, owned one distribution center on leased land, and leased one import warehouse on leased land for a total of 23 regional distribution centers and three import warehouses. Target owns its corporate headquarters buildings located in Minneapolis, Minnesota, and leases some additional office space in the area. The Associated Merchandising Corporation, a wholly-owned subsidiary of Target which is headquartered in New York City, New York, has 38 office locations in 28 countries, all of which are leased.

For additional information on our properties see also: Total number of distribution centers, Page 16; Capital Expenditures, Page 20; Note 13, Property and Equipment, Pages 30-31; Note 22, Leases, Pages 33-34; and the Year-end 2005 Store Count and Square Footage by State, inside back cover of Target’s 2005 Annual Report to Shareholders are incorporated herein by reference.

Item 3.   Legal Proceedings.

The last two paragraphs of Note 18, Commitments and Contingencies, Page 32, of Target’s 2005 Annual Report to Shareholders are incorporated herein by reference.

The American Jobs Creation Act of 2004 requires SEC registrants to disclose if they have been required to pay certain penalties for failing to disclose to the Internal Revenue Service their participation in listed transactions. Target has not been required to pay any of the penalties set forth in Section 6707A(e)(2) of the Internal Revenue Code.

Item 4.    Submission of Matters to a Vote of Security Holders.

Not Applicable.

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PART II

Item 5.   Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Target’s common stock is listed on The New York Stock Exchange and the Pacific Exchange under the symbol “TGT.”  Target is authorized to issue up to 6,000,000,000 shares of common stock, par value $.0833, and up to 5,000,000 shares of preferred stock, par value $.01. At March 20, 2006, there were 18,166 shareholders of record. Dividends declared per share and the high and low closing common stock price for each fiscal quarter during 2005 and 2004, Page 39, of Target’s 2005 Annual Report to Shareholders are incorporated herein by reference.

The following table presents information with respect to purchases of Target common stock made during the three months ended January 28, 2006, by Target or any “affiliated purchaser” of Target, as defined in Rule 10b-18(a)(3) under the Exchange Act.

(1)          In June of 2004, our Board of Directors authorized the repurchase of $3 billion of our common stock. In November 2005, our Board of Directors increased the aggregate authorization of our current share repurchase program to $5 billion. The repurchase of our common stock is expected to be made primarily in open market transactions, subject to market conditions, and is expected to be completed over two to three years. Since the inception of this share repurchase program, we have repurchased a total of 51.6 million shares of our common stock at a total investment of $2,473 million ($47.95 per share).

(2)          In addition to shares purchased under our share repurchase program, we acquire shares of common stock held by team members who wish to tender owned shares to satisfy the exercise price on option exercises or tax withholding on equity awards as part of our long-term incentive plans. From October 30, 2005 through January 28, 2006, we acquired 2,332 shares at an average price of $53.62 which were tendered pursuant to our long-term incentive plans and are not included in the table above.

Item 6.   Selected Financial Data.

Total revenues, Earnings from continuing operations, Per Share data, Total assets and Long-term debt, Page 16, of Target’s 2005 Annual Report to Shareholders are incorporated herein by reference.

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis, Pages 17-23 of Target’s 2005 Annual Report to Shareholders are incorporated herein by reference.

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Item 7a.   Quantitative and Qualitative Disclosures About Market Risk.

Market Risk, Page 21; and Note 21, Interest Rate Swaps, Page 33, of Target’s 2005 Annual Report to Shareholders are incorporated herein by reference.

Item 8.   Financial Statements and Supplementary Data.

New Accounting Pronouncements, Page 23; Financial Statements and Notes, Pages 24-39; and the Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements, Page 40, of Target’s 2005 Annual Report to Shareholders are incorporated herein by reference.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not Applicable.

Item 9a.   Controls and Procedures.

As of the end of the period covered by this annual report, Target conducted an evaluation, under supervision and with the participation of management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of Target’s disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (Exchange Act). Based upon that evaluation, Target’s chief executive officer and chief financial officer concluded that Target’s disclosure controls and procedures are effective. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the Securities and Exchange Commission (SEC) under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

During the third quarter of 2005, we completed the implementation of a new suite of web-based procedures, systems and reports designed to increase the efficiency of processing transactions and to produce more accurate and timely financial information for our Payroll and Human Resource teams.

Except for the preceding change, there were no changes in our internal control over financial reporting during fiscal year 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Report of Management on Internal Control and the Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting, Page 40, of Target’s 2005 Annual Report to Shareholders, are incorporated herein by reference.

Item 9b.   Other Information.

Not applicable.

6

PART IV

Item 15.   Exhibits and Financial Statement Schedules.

a)     Financial Statements

The financial statements listed below are included in Target’s 2005 Annual Report to Shareholders and are incorporated by reference herein or filed as part of this Annual Report on Form 10-K in Exhibit 13.

Consolidated Statements of Operations for the Years Ended January 28, 2006, January 29, 2005, and January 31, 2004, Page 24.

Consolidated Statements of Financial Position at January 28, 2006 and January 29, 2005, Page 25.

Consolidated Statements of Cash Flows for the Years Ended January 28, 2006, January 29, 2005, and January 31, 2004, Page 26.

Consolidated Statements of Shareholders’ Investment for the Years Ended January 28, 2006, January 29, 2005, and January 31, 2004, Page 27.

Notes to Consolidated Financial Statements, Pages 28-39.

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements, Page 40.

Target, through its special purpose subsidiary, Target Receivables Corporation (TRC), has entered into a securitization transaction under which it transfers, on an ongoing basis, substantially all of its credit card receivables to a trust. Separate financial information is filed for TRC in its separate Annual Report on Form 10-K.

Financial Statement Schedule

For the Years Ended January 28, 2006, January 29, 2005, and January 31, 2004.

II—Valuation and Qualifying Accounts

Other schedules have not been included either because they are not applicable or because the information is included elsewhere in this Report.

b)     Exhibits

(3)A.			Restated Articles of Incorporation (as amended January 9, 2002) (1)
B.			By-Laws (as amended through November 11, 1998) (2)
(4)A.			Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, as amended (3)
B.			Amended and Restated Rights Agreement, dated as of August 5, 2002, between the Registrant and Mellon Investor Services LLC, as Rights Agent (4)
C.			Indenture, dated August 4, 2000 between Target Corporation and Bank One Trust Company, N.A. (23)
D.			Registrant agrees to furnish to the Commission on request copies of other instruments with respect to long-term debt.
(10)A.	*		Executive Short-Term Incentive Plan (5)
B.	*		Performance measures for fiscal 2005 under Executive Short-Term Incentive Plan (6)
C.	*		Director Stock Option Plan of 1995 (7)
D.	*		Supplemental Pension Plan I (8)

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E.	*		Executive Long-Term Incentive Plan of 1981 (9)
F.	*		Supplemental Pension Plan II (10)
G.	*		Supplemental Pension Plan III (11)
H.	*		Deferred Compensation Plan Senior Management Group (12)
I.	*		Deferred Compensation Plan Directors (13)
J.	*		Income Continuance Policy Statement (14)
K.	*		SMG Income Continuance Policy Statement (15)
L.	*		SMG Executive Deferred Compensation Plan (16)
M.	*		Amendment to SMG Executive Deferred Compensation Plan dated January 11, 2006
N.	*		Director Deferred Compensation Plan (17)
O.	*		Executive Excess Long-Term Disability Plan (18)
P.	*		Long-Term Incentive Plan, as amended November 9, 2005
Q.	*		Performance Criteria for January 2006 performance share unit awards under Target’s Long-Term Incentive Plan (19)
R.	*		Director Retirement Program (20)
S.	*		Director Compensation Program (21)
T.			Five-year credit agreement dated as of June 9, 2005 among Target Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed therein (22)
(12)			Statements re: Computations of Ratios
(13)			2005 Annual Report to Shareholders (only those portions specifically incorporated by reference herein shall be deemed filed with the Commission)
(21)			List of Subsidiaries
(23)			Consent of Independent Registered Public Accounting Firm
(24)			Powers of Attorney
(31)A.			Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(31)B.			Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(32)A.			Certification of the Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(32)B.			Certification of the Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(99)A.			Redemption Terms for Certain Redeemable Debt Securities
(99)C.			Risk Factors and Cautionary Statements Relating to Forward-Looking Information

 

Copies of exhibits will be furnished upon written request and payment of Registrant’s reasonable expenses in furnishing the exhibits.

 

*		Management contract or compensation plan or arrangement required to be filed as an exhibit to this Form 10-K.
(1)		Incorporated by reference to Exhibit (3)A to Target’s Form 10-K Report for the year ended February 2, 2002.
(2)		Incorporated by reference to Exhibit (3)(ii) to Target’s Form 10-Q Report for the quarter ended October 31, 1998.

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(3)		Incorporated by reference to Exhibit A to Exhibit 1 to Target’s Registration Statement on Form 8-A dated September 19, 2001.
(4)		Incorporated by reference to Exhibit 10 to Target’s Form 10-Q Report for the quarter ended August 3, 2002.
(5)		Incorporated by reference to Exhibit (10)A to Target’s Form 10-K Report for the year ended February 2, 2002.
(6)		Incorporated by reference to Item 1.01 on Target’s Form 8-K Report filed March 15, 2005
(7)		Incorporated by reference to Exhibit (10)C to Target’s Form 10-Q Report for the quarter ended August 2, 2003.
(8)		Incorporated by reference to Exhibit 10(E) to Target’s Form 10-K Report for the year ended February 1, 1997, and Amendment thereto, incorporated by reference to Exhibit (10)G to Target’s Form 10-Q Report for the quarter ended November 2, 2002.
(9)		Incorporated by reference to Exhibit (10)B to Target’s Form 10-Q Report for the quarter ended August 2, 2003.
(10)		Incorporated by reference to Exhibit (10)G to Target’s Form 10-K Report for the year ended February 1, 1997, and Amendment thereto, incorporated by reference to Exhibit (10)G to Target’s Form 10-Q Report for the quarter ended November 2, 2002.
(11)		Incorporated by reference to Exhibit 10(H) to Target’s Form 10-K Report for the year ended February 1, 1997, and Amendment thereto, incorporated by reference to Exhibit 10(G) to Target’s Form 10-Q Report for the quarter ended November 2, 2002.
(12)		Incorporated by reference to Exhibit (10)G to Target’s Form 10-K Report for the year ended February 1, 2003.
(13)		Incorporated by reference to Exhibit (10)H to Target’s Form 10-K Report for the year ended February 1, 2003.
(14)		Incorporated by reference to Exhibit (10)K to Target’s Form 10-K Report for the year ended January 30, 1999.
(15)		Incorporated by reference to Exhibit (10)L to Target’s Form 10-K Report for the year ended January 30, 1999.
(16)		Incorporated by reference to Exhibit 4.4 to Target’s Registration Statement on Form S-8 (File No. 333-75782) filed on December 21, 2001 and Amendment thereto, incorporated by reference to Exhibit 10(F) to Target’s Form 10-Q for the quarter ended November 2, 2002.
(17)		Incorporated by reference to Exhibit 4.2 to Target’s Registration Statement on Form S-8 (File No. 333-75782) filed on December 21, 2001.
(18)		Incorporated by reference to Exhibit (10)O to Target’s Form 10-K Report for the year ended February 3, 2001.
(19)		Incorporated by reference to description of performance criteria in Item 1.01 on Target’s Form 8-K Report filed January 13, 2006.
(20)		Incorporated by reference to Exhibit (10)O to Target’s Form 10-K Report for the year ended January 29, 2005.
(21)		Incorporated by reference to Item 1.01 on Target’s Form 8-K Report filed November 15, 2005.
(22)		Incorporated by reference to Exhibit (10) to Target’s Form 10-Q Report for the quarter ended July 29, 2005.
(23)		Incorporated by reference to Exhibit 4.1 to Target’s Form 8-K Report filed August 10, 2000.

 

10

TARGET CORPORATION
Schedule II - Valuation and Qualifying Accounts
Fiscal Years 2005, 2004 and 2003

(Millions of Dollars)

 

EXHIBIT INDEX

Exhibit		Description		Manner of Filing
(3)A.		Restated Articles of Incorporation (as amended January 9, 2002)		Incorporated by Reference
(3)B.		By-Laws (as amended through November 11, 1998)		Incorporated by Reference
(4)A.		Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, as amended		Incorporated by Reference
(4)B.		Amended and Restated Rights Agreement, dated as of August 5, 2002 between the Registrant and Mellon Investor Services LLC., as Rights Agent		Incorporated by Reference
(4)C.		Indenture, dated August 4, 2000 between Target Corporation and Bank One Trust Company, N.A.		Incorporated by Reference
(10)A.		Executive Short-Term Incentive Plan		Incorporated by Reference
(10)B.		Performance measures for fiscal 2005 under Executive Short-Term Incentive Plan		Incorporated by Reference
(10)C.		Director Stock Option Plan of 1995		Incorporated by Reference
(10)D.		Supplemental Pension Plan I		Incorporated by Reference
(10)E.		Executive Long-Term Incentive Plan of 1981		Incorporated by Reference
(10)F.		Supplemental Pension Plan II		Incorporated by Reference
(10)G.		Supplemental Pension Plan III		Incorporated by Reference
(10)H.		Deferred Compensation Plan Senior Management Group		Incorporated by Reference
(10)I.		Deferred Compensation Plan Directors		Incorporated by Reference
(10)J.		Income Continuance Policy Statement		Incorporated by Reference
(10)K.		SMG Income Continuance Policy Statement		Incorporated by Reference
(10)L.		SMG Executive Deferred Compensation Plan		Incorporated by Reference
(10)M.		Amendment to SMG Executive Deferred Compensation Plan dated January 11, 2006		Filed Electronically
(10)N.		Director Deferred Compensation Plan		Incorporated by Reference
(10)O.		Executive Excess Long-Term Disability Plan		Incorporated by Reference
(10)P.		Long-Term Incentive Plan, as amended November 9, 2005		Filed Electronically
(10)Q.		Performance Criteria for January 2006 Performance Share Unit Awards Under Target’s Long-Term Incentive Plan		Incorporated by Reference

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(10)R.		Director Retirement Program		Incorporated by Reference
(10)S.		Director Compensation Program		Incorporated by Reference
(10)T.		Five-year credit agreement dated as of June 9, 2005 among Target Corporation, Bank of America, N.A. as Administrative Agent and the Banks listed therein		Incorporated by Reference
(12)		Statements re: Computations of Ratios		Filed Electronically
(13)		2005 Annual Report to Shareholders		Filed Electronically
(21)		List of Subsidiaries		Filed Electronically
(23)		Consent of Independent Registered Public Accounting Firm		Filed Electronically
(24)		Powers of Attorney		Filed Electronically
(31)A.		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		Filed Electronically
(31)B.		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		Filed Electronically
(32)A.		Certification of the Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		Filed Electronically
(32)B.		Certification of the Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		Filed Electronically
(99)A.		Redemption Terms for Certain Redeemable Debt Securities		Filed Electronically
(99)C.		Risk Factors and Cautionary Statements Relating to Forward-Looking Information		Filed Electronically

 

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/01/06  SEC                               UPLOAD¶     9/21/17    1:20K  Target Corp.
 7/28/06  SEC                               UPLOAD¶     9/21/17    1:37K  Target Corp.
 7/28/06  SEC                               UPLOAD¶     9/21/17    1:56K  Target Corp.