Adjusted EPS of $0.84; GAAP EPS of $0.54

• While Target’s third quarter U.S. comparable sales increase of 0.9 percent was near the low end of prior guidance, adjusted earnings per share of $0.84 were near the mid-point of the expected range
• Third quarter GAAP earnings per share of $0.54 were below expectations as a result of higher-than-expected dilution of (29) cents related to the Canadian Segment
• Target opened 32 stores in the third quarter - 23 in Canada and 9 in the U.S.; the Company remains on track to have 124 Canadian Target stores open by year end

MINNEAPOLIS--(BUSINESS WIRE)--Nov. 21, 2013-- Target Corporation (NYSE: TGT) today reported third quarter net earnings of $341 million, or $0.54 per share, which includes EPS dilution related to the Canadian Segment of (29) cents per share. Adjusted earnings per share, a measure the Company believes is useful in providing period-to-period comparisons of the results of its U.S. operations, were $0.84 in third quarter 2013, down 6.0 percent from $0.90 in 2012. A reconciliation of non-GAAP financial measures to GAAP measures is provided in the tables attached to this press release. All earnings per share figures refer to diluted earnings per share.

“Target’s third quarter financial results reflect continued strong execution in our U.S. Segment in an environment where consumer spending remains constrained,” said Gregg Steinhafel, chairman, president, and chief executive officer of Target Corporation. “As our focus shifts to the fourth quarter, we are intently focused on delivering outstanding merchandise, an easy, fun shopping experience and an unbeatable combination of everyday low prices, weekly ad discounts, 5% REDcard Rewards and price match policies throughout the U.S. and Canada. And, in our Canadian Segment, we are also focused on improving performance as we transition from opening to operating our 124 stores.”

Fiscal 2013 Earnings Guidance

In fourth quarter 2013, the Company expects adjusted EPS of $1.50 to $1.60, Canadian Segment dilution of (22) to (32) cents and (2) cents related to the expected reduction in the beneficial interest asset¹. This performance would lead to fourth quarter GAAP EPS in a range centered around $1.26.

For full-year 2013, Target now expects adjusted EPS of $4.59 to $4.69, Canadian Segment dilution of ($0.95) to ($1.05) and a net impact of approximately (12) cents related to:

• Losses related to the early retirement of debt of (42) cents per share, and;
• Net accounting gains of approximately 28 cents associated with the sale of Target’s entire consumer credit card receivables portfolio to TD Bank Group, and;
• Non-recurring tax benefits of approximately 2 cents.

This performance would lead to full-year 2013 GAAP EPS in a range centered around $3.52.

¹See the “Accounting Considerations” section of this release for more information related to the beneficial interest asset.

U.S. Segment Results

As a reminder, following the sale of the U.S. credit card portfolio in March 2013, Target’s historical U.S. Retail Segment and U.S. Credit Card Segment results were combined to form a new U.S. Segment. Selling, General and Administrative (SG&A) expenses in the new U.S. Segment include income from the profit-sharing arrangement with TD Bank Group, net of servicing expenses. In prior periods, credit card revenues, net of credit card expenses, from the historical U.S. Credit Card Segment have been classified within U.S. Segment SG&A expenses.²

In addition, beginning with fiscal 2013, Target made changes to certain vendor agreements regarding payments received in support of marketing programs. As a result, these payments are being recorded as a reduction to U.S. Segment cost of sales rather than a reduction to SG&A expenses, creating equivalent year-over-year increases in both gross margin and SG&A expense rates. This change has no effect on U.S. Segment EBITDA and EBIT margin rates.

In third quarter 2013, sales increased 2.0 percent to $16.9 billion from $16.6 billion last year, reflecting a 0.9 percent increase in comparable sales combined with the contribution from new stores. Segment earnings before interest expense and income taxes (EBIT) were $977 million in the third quarter of 2013, a decrease of 11.4 percent from $1,104 million in 2012.

Third quarter EBITDA margin rate was 8.7 percent, compared with 9.8 percent in the revised U.S. Segment and 8.9 percent in the historical U.S. Retail Segment in third quarter 2012. Third quarter EBIT margin rate was 5.8 percent, compared with 6.6 percent in the revised U.S. Segment and 5.8 percent in the historical U.S. Retail Segment in third quarter 2012.

Third quarter gross margin rate decreased to 30.0 percent in 2013 from 30.3 percent in 2012, reflecting category rate pressure from seasonal markdowns combined with the impact of Target’s integrated growth strategies, partially offset by approximately 0.2 percentage-points of benefit from changes to the Company’s vendor agreements. Third quarter SG&A expense rate was 21.2 percent in 2013, compared with 2012 rates of 20.5 percent in the revised U.S. Segment and 21.4 percent in the historical U.S. Retail Segment. Compared with the revised U.S. Segment in third quarter 2012, the increase was driven by a smaller contribution from the credit card portfolio, which raised the SG&A rate by approximately 0.6 percentage points, continued investments in technology and supply chain in support of multichannel initiatives and the change to Target’s vendor agreements. These pressures were partially offset by favorable leverage of compensation expenses and the continued benefit of the Company’s expense optimization efforts.

²Quarterly and full-year historical information for the three most recently completed years reflecting the impact of the reclassification, and the results for our two segments, U.S. and Canadian, are attached as Exhibit (99) to our current report on Form 8-K filed April 16, 2013.

Canadian Segment Results

In third quarter 2013 the Canadian Segment generated sales of $333 million at a gross margin rate of 14.8 percent, driven by efforts to clear excess inventory. Canadian Segment EBIT for the third quarter was $(238) million, as gross margin of $49 million was offset by $221 million of start-up and operating expenses and $66 million of depreciation and amortization. Canadian operations reduced Target’s GAAP earnings per share by (29) cents in third quarter 2013³.

³This amount includes interest expense and tax expense that are not included in the segment measure of profit. A reconciliation of non-GAAP measures is included in the tables attached to this release.

Interest Expense and Taxes

In third quarter 2013, net interest expense decreased to $165 million from $192 million in 2012, benefiting from debt retirement resulting from the use of proceeds from the sale of the credit card portfolio.

The Company’s effective income tax rate was 36.6 percent in the third quarter, compared with 34.5 percent in third quarter 2012. The increase of 2.1 percentage points was driven by a lower year-over-year benefit associated with the favorable resolution of various income tax matters combined with the net effect of increased losses related to Canadian operations.

Capital Returned to Shareholders

In third quarter 2013, the Company paid dividends of $271 million. Target did not repurchase any shares of its common stock during the quarter, reflecting current performance and the Company’s commitment to maintain its strong investment-grade credit ratings.

Year-to-date, the Company has repurchased approximately 21.9 million shares of its common stock at an average price of $67.41 for a total investment of $1.47 billion, and paid dividends of $734 million.

Accounting Considerations

At the close of the sale of its entire U.S. consumer credit card receivables portfolio to TD Bank Group in first quarter 2013, Target recognized a $225 million beneficial interest asset, which effectively represented a receivable for the present value of future profit-sharing Target expected to receive on the receivables sold. The Company estimates the asset will be reduced over the four-year period following the close of the transaction, with larger reductions in the early years. The beneficial interest asset was reduced by $36 million in the third quarter 2013 and $82 million year-to-date 2013.

The Company’s third quarter 2012 GAAP EPS included a benefit of approximately 15 cents related to the agreement to sell the entire U.S. consumer credit card receivables portfolio to TD Bank Group. The benefit was driven by a change in the accounting treatment of Target’s receivables from “held for investment” to “held for sale” at the time of the announcement.

Miscellaneous

Target Corporation will webcast its third quarter earnings conference call at 9:30 a.m. CST today. Investors and the media are invited to listen to the call through the Company’s website at www.target.com/investors (click on “events & presentations”). A telephone replay of the call will be available beginning at approximately 11:30 a.m. CST today through the end of business on November 23, 2013. The replay number is (855) 859-2056 (passcode: 78421689).

Statements in this release regarding fourth quarter and full year 2013 earnings guidance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements speak only as of the date they are made and are subject to risks and uncertainties which could cause the Company’s actual results to differ materially. The most important risks and uncertainties are described in Item 1A of the Company’s Form 10-K for the fiscal year ended February 2, 2013.

In addition to the GAAP results provided in this release, the Company provides adjusted diluted earnings per share for the three- and nine-month periods ended November 2, 2013 and October 27, 2012, respectively. This measure is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. The most comparable GAAP measure is diluted earnings per share. Management believes adjusted EPS is useful in providing period-to-period comparisons of the results of the Company’s U.S. operations. Adjusted EPS should not be considered in isolation or as a substitution for analysis of the Company’s results as reported under GAAP. Other companies may calculate adjusted EPS differently than the Company does, limiting the usefulness of the measure for comparisons with other companies.

About Target

Minneapolis-based Target Corporation (NYSE: TGT) serves guests at 1,919 stores - 1,797 in the United States and 122 in Canada - and at Target.com. Since 1946, Target has given 5 percent of its profit through community grants and programs; today, that giving equals more than $4 million a week. For more information about Target’s commitment to corporate responsibility, visit target.com/corporateresponsibility.

TARGET CORPORATION
Consolidated Statements of Operations
			Three Months Ended														Nine Months Ended
			November 2,					October 27,									November 2,					October 27,
(millions, except per share data) (unaudited)			2013					2012					Change				2013					2012					Change
Sales			$	17,258				$	16,601				4.0	%			$	51,081				$	49,589				3.0	%
Credit card revenues			—					328					(100.0	)			—					986					(100.0	)
Total revenues			17,258					16,929					1.9				51,081					50,575					1.0
Cost of sales			12,133					11,569					4.9				35,441					34,406					3.0
Selling, general and administrative expenses			3,853					3,704					4.0				11,140					10,686					4.3
Credit card expenses			—					106					(100.0	)			—					333					(100.0	)
Depreciation and amortization			569					542					4.8				1,648					1,603					2.8
Gain on receivables transaction			—					(156		)			(100.0	)			(391		)			(156		)			149.9
Earnings before interest expense and income taxes			703					1,164					(39.6	)			3,243					3,703					(12.4	)
Net interest expense			165					192					(14.1	)			965					558					72.9
Earnings before income taxes			538					972					(44.6	)			2,278					3,145					(27.6	)
Provision for income taxes			197					335					(41.3	)			827					1,107					(25.3	)
Net earnings			$	341				$	637				(46.4	)%			$	1,451				$	2,038				(28.8	)%
Basic earnings per share			$	0.54				$	0.97				(44.4	)%			$	2.28				$	3.09				(26.2	)%
Diluted earnings per share			$	0.54				$	0.96				(44.3	)%			$	2.26				$	3.06				(26.3	)%
Weighted average common shares outstanding
Basic			631.3					654.8					(3.6	)%			636.0					659.3					(3.5	)%
Dilutive impact of share-based awards(a)			6.1					7.4									7.0					6.5
Diluted			637.4					662.2					(3.7	)%			643.0					665.8					(3.4	)%
(a) Excludes 2.4 million and 2.3 million share-based awards for the three and nine months ended November 2, 2013, respectively, and 0.6 million and 6.0 million share-based awards for the three and nine months ended October 27, 2012, respectively, because their effects were antidilutive.
Subject to reclassification

TARGET CORPORATION
Consolidated Statements of Financial Position
			November 2,					February 2,					October 27,
(millions)			2013					2013					2012
			(unaudited)										(unaudited)
Assets
Cash and cash equivalents, including short-term investments of $3, $130 and $800			$	706				$	784				$	1,469
Inventory			10,376					7,903					9,533
Other current assets			2,071					1,860					1,846
Credit card receivables, held for sale			—					5,841					5,647
Total current assets			13,153					16,388					18,495
Property and equipment
Land			6,241					6,206					6,188
Buildings and improvements			30,257					28,653					27,800
Fixtures and equipment			5,535					5,362					5,280
Computer hardware and software			2,644					2,567					2,418
Construction-in-progress			958					1,176					1,365
Accumulated depreciation			(13,909		)			(13,311		)			(12,982		)
Property and equipment, net			31,726					30,653					30,069
Other noncurrent assets			1,494					1,122					1,015
Total assets			$	46,373				$	48,163				$	49,579
Liabilities and shareholders’ investment
Accounts payable			$	8,806				$	7,056				$	8,050
Accrued and other current liabilities			3,623					3,981					3,631
Current portion of long-term debt and other borrowings			2,122					2,994					4,028
Total current liabilities			14,551					14,031					15,709
Long-term debt and other borrowings			12,665					14,654					14,526
Deferred income taxes			1,466					1,311					1,279
Other noncurrent liabilities			1,535					1,609					1,713
Total noncurrent liabilities			15,666					17,574					17,518
Shareholders’ investment
Common stock			53					54					55
Additional paid-in capital			4,403					3,925					3,854
Retained earnings			12,353					13,155					13,069
Accumulated other comprehensive loss
Pension and other benefit liabilities			(468		)			(532		)			(581		)
Currency translation adjustment and cash flow hedges			(185		)			(44		)			(45		)
Total shareholders’ investment			16,156					16,558					16,352
Total liabilities and shareholders’ investment			$	46,373				$	48,163				$	49,579
Common Stock Authorized 6,000,000,000 shares, $.0833 par value; 631,759,510, 645,294,423 and 654,465,209 shares issued and outstanding at November 2, 2013, February 2, 2013 and October 27, 2012, respectively.
Preferred Stock Authorized 5,000,000 shares, $.01 par value; no shares were issued or outstanding at November 2, 2013, February 2, 2013 or October 27, 2012.
Subject to reclassification

TARGET CORPORATION
Consolidated Statements of Cash Flows
			Nine Months Ended
			November 2,					October 27,
(millions) (unaudited)			2013					2012
Operating activities
Net earnings			$	1,451				$	2,038
Adjustments to reconcile net earnings to cash provided by operations
Depreciation and amortization			1,648					1,603
Share-based compensation expense			81					74
Deferred income taxes			—					73
Bad debt expense(a)			41					141
Gain on receivables transaction			(391		)			(156		)
Loss on debt extinguishment			445					—
Noncash losses/(gains) and other, net			3					(15		)
Changes in operating accounts:
Accounts receivable originated at Target			157					97
Proceeds on sale of accounts receivable originated at Target			2,703					—
Inventory			(2,461		)			(1,615		)
Other current assets			(210		)			(98		)
Other noncurrent assets			32					—
Accounts payable			1,744					1,193
Accrued and other current liabilities			(463		)			(109		)
Other noncurrent liabilities			(27		)			122
Cash provided by operations			4,753					3,348
Investing activities
Expenditures for property and equipment			(2,839		)			(2,338		)
Proceeds from disposal of property and equipment			73					35
Change in accounts receivable originated at third parties			121					192
Proceeds from sale of accounts receivable originated at third parties			3,002					—
Cash paid for acquisitions, net of cash assumed			(157		)			—
Other investments			111					86
Cash provided by/(required for) investing activities			311					(2,025		)
Financing activities
Change in commercial paper, net			107					—
Additions to long-term debt			—					1,971
Reductions of long-term debt			(3,453		)			(1,024		)
Dividends paid			(734		)			(635		)
Repurchase of stock			(1,461		)			(1,230		)
Stock option exercises and related tax benefit			395					279
Other			—					(16		)
Cash required for financing activities			(5,146		)			(655		)
Effect of exchange rate changes on cash and cash equivalents			4					7
Net (decrease)/increase in cash and cash equivalents			(78		)			675
Cash and cash equivalents at beginning of period			784					794
Cash and cash equivalents at end of period			$	706				$	1,469
(a) Includes net write-offs of credit card receivables prior to the sale of receivables on March 13, 2013, and bad debt expense on credit card receivables during the nine months ended October 27, 2012.
Subject to reclassification

TARGET CORPORATION
U.S. Segment
			Three Months Ended														Nine Months Ended
U.S. Segment Results			November 2,					October 27,									November 2,					October 27,
(millions) (unaudited)			2013					2012					Change				2013					2012					Change
Sales			$	16,925				$	16,601				2.0	%			$	50,387				$	49,589				1.6	%
Cost of sales			11,849					11,569					2.4				34,916					34,406					1.5
Gross margin			5,076					5,032					0.9				15,471					15,183					1.9
SG&A expenses(a)			3,595					3,409					5.4				10,437					9,879					5.6
EBITDA			1,481					1,623					(8.8	)			5,034					5,304					(5.1	)
Depreciation and amortization			504					519					(3.1	)			1,488					1,537					(3.2	)
EBIT			$	977				$	1,104				(11.4	)%			$	3,546				$	3,767				(5.9	)%
Note: Prior period results have been revised to reflect the combination of our historical U.S. Retail Segment and U.S. Credit Card Segment into one U.S. Segment.
(a)SG&A includes credit card revenues and expenses for all periods presented prior to the March 2013 sale of our U.S. consumer credit card portfolio to TD Bank. For the three and nine months ended November 2, 2013, SG&A also includes $184 million and $471 million, respectively, of profit sharing income from the arrangement with TD Bank.
EBITDA is earnings before interest expense, income taxes, depreciation and amortization.
EBIT is earnings before interest expense and income taxes.

							Three Months Ended October 27, 2012												2013 U.S. Segment Change vs. 2012
			Three Months								Impact of
			Ended								Historical U.S.				Historical									Historical
U.S. Segment Rate Analysis			November 2,				U.S. Segment,				Credit Card				U.S. Retail				U.S. Segment,					U.S. Retail
(unaudited)			2013				as revised				Segment(a)				Segment				as revised					Segment
Gross margin rate			30.0	%			30.3	%			—		pp		30.3	%			(0.3	)pp				(0.3	)pp
SG&A expense rate			21.2				20.5				(0.9	)			21.4				0.7					(0.2	)
EBITDA margin rate			8.7				9.8				0.9				8.9				(1.1	)				(0.2	)
Depreciation and amortization expense rate			3.0				3.1				—				3.1				(0.1	)				(0.1	)
EBIT margin rate			5.8				6.6				0.8				5.8				(0.8	)				—
							Nine Months Ended October 27, 2012												2013 U.S. Segment Change vs. 2012
			Nine Months								Impact of
			Ended								Historical U.S.				Historical									Historical
U.S. Segment Rate Analysis			November 2,				U.S. Segment,				Credit Card				U.S. Retail				U.S. Segment,					U.S. Retail
(unaudited)			2013				as revised				Segment(a)				Segment				as revised					Segment
Gross margin rate			30.7	%			30.6	%			—		pp		30.6	%			0.1		pp			0.1		pp
SG&A expense rate			20.7				19.9				(0.9	)			20.8				0.8					(0.1		)
EBITDA margin rate			10.0				10.7				0.9				9.8				(0.7		)			0.2
Depreciation and amortization expense rate			3.0				3.1				—				3.1				(0.1		)			(0.1		)
EBIT margin rate			7.0				7.6				0.9				6.7				(0.6		)			0.3
Rate analysis metrics are computed by dividing the applicable amount by sales.
(a) Represents the impact of combining the historical U.S. Credit Card Segment and the U.S. Retail Segment into one U.S. Segment. Compared with the historical U.S. Retail Segment results for the same period, segment results, as revised, reflect lower SG&A rates and increased EBIT and EBITDA margin rates resulting from the inclusion of credit card profits, net of expenses, within SG&A compared with historical U.S. Segment results for the same period.

			Three Months Ended								Nine Months Ended
Comparable Sales			November 2,				October 27,				November 2,				October 27,
(unaudited)			2013				2012				2013				2012
Comparable sales change			0.9	%			2.9	%			0.5	%			3.7	%
Drivers of change in comparable sales:
Number of transactions			(1.3	)			0.5				(1.5	)			1.0
Average transaction amount			2.2				2.4				2.1				2.7
Selling price per unit			3.3				1.2				1.5				1.6
Units per transaction			(1.1	)			1.2				0.6				1.0
The comparable sales increases or decreases above are calculated by comparing sales in fiscal year periods with comparable prior-year periods of equivalent length.

			Three Months Ended								Nine Months Ended
REDcard Penetration			November 2,				October 27,				November 2,				October 27,
(unaudited)			2013				2012				2013				2012
Target Credit Cards			9.5	%			8.0	%			9.1	%			7.6	%
Target Debit Card			10.4				6.0				9.5				5.2
Total REDcard Penetration			19.9	%			14.0	%			18.6	%			12.8	%
Represents the percentage of Target sales that are paid for using REDcards.

			Number of Stores												Retail Square Feet(a)
Number of Stores and Retail Square Feet			November 2,				February 2,				October 27,				November 2,				February 2,				October 27,
(unaudited)			2013				2013				2012				2013				2013				2012
General merchandise stores			293				391				395				34,273				46,584				47,038
Expanded food assortment stores			1,245				1,131				1,130				160,891				146,249				146,087
SuperTarget stores			251				251				251				44,500				44,500				44,500
CityTarget stores			8				5				5				820				514				514
Total			1,797				1,778				1,781				240,484				237,847				238,139
(a) In thousands: reflects total square feet, less office, distribution center and vacant space.
Subject to reclassification

TARGET CORPORATION
Canadian Segment
			Three Months Ended															Nine Months Ended
Canadian Segment Results			November 2,					October 27,										November 2,					October 27,
(millions)(unaudited)			2013					2012					Change					2013					2012					Change
Sales			$	333				$	—				n/a		%			$	694				$	—				n/a		%
Cost of sales			284					—					n/a					525					—					n/a
Gross margin			49					—					n/a					169					—					n/a
SG&A expenses(a)			221					72					206.2					621					154					304.1
EBITDA			(172		)			(72		)			138.2					(452		)			(154		)			194.1
Depreciation and amortization(b)			66					24					177.5					160					67					138.8
EBIT			$	(238	)			$	(96	)			147.9		%			$	(612	)			$	(221	)			177.3		%
(a)SG&A expenses include start-up and operating expenses.
(b)Depreciation and amortization results from depreciation of capital lease assets and leasehold interests. The lease payment obligation gave rise to interest expense of $20 million for the three months ended both November 2, 2013 and October 27, 2012, and $59 million and $58 million of interest expense for the nine months ended November 2, 2013 and October 27, 2012, respectively.

Canadian Segment Rate Analysis			Three Months Ended				Nine Months Ended
(unaudited)			November 2, 2013				November 2, 2013
Gross margin rate			14.8	%			24.4	%
SG&A expense rate			66.6				89.5
EBITDA margin rate			(51.8	)			(65.1	)
Depreciation and amortization expense rate			19.7				23.1
EBIT margin rate			(71.5	)			(88.2	)
REDcard Penetration			Three Months Ended				Nine Months Ended
(unaudited)			November 2, 2013				November 2, 2013
Target Credit Cards			1.4	%			1.2	%
Target Debit Card			1.5				1.4
Total REDcard Penetration			2.9	%			2.6	%
Represents the percentage of Target sales that are paid for using REDcards.

			Number of Stores								Retail Square Feet(a)
Number of Stores and Retail Square Feet			November 2,				October 27,				November 2,				October 27,
(unaudited)			2013				2012				2013				2012
General merchandise stores			91				—				10,325				—
(a) In thousands; reflects total square feet, less office, distribution center and vacant space.
Subject to reclassification

TARGET CORPORATION
Reconciliation of Non-GAAP Financial Measures
			Three Months Ended														Nine Months Ended
			November 2,					October 27,									November 2,					October 27,
(unaudited)			2013					2012					Change				2013					2012					Change
GAAP diluted earnings per share			$	0.54				$	0.96				(44.3	)%			$	2.26				$	3.06				(26.3	)%
Adjustments			0.30					(0.06		)							0.82					0.06
Adjusted diluted earnings per share			$	0.84				$	0.90				(6.0	)%			$	3.08				$	3.12				(1.3	)%
A detailed reconciliation is provided below.

																					Consolidated
(millions, except per share data) (unaudited)			U.S.					Canadian					Other								GAAP Total
Three Months Ended November 2, 2013
Segment profit			$	977				$	(238	)			$	—							$	739
Net interest expense			145					20					—								165
Reduction of beneficial interest asset			—					—					36								36
Earnings before income taxes			832					(258		)			(36		)						538
Provision for income taxes(b)			294					(76		)			(21		)			(e)			197
Net earnings			$	538				$	(182	)			$	(15	)						$	341
Diluted earnings per share(c)			$	0.84				$	(0.29	)			$	(0.02	)						$	0.54
Three Months Ended October 27, 2012
Segment profit			$	1,104				$	(96	)			$	—							$	1,008
Net interest expense			172					20					—								192
Gain on receivables held for sale			—					—					(156		)						(156		)
Earnings before income taxes			932					(116		)			156								972
Provision for income taxes(b)			337					(33		)			31					(e)			335
Net earnings			$	595				$	(83	)			$	125							$	637
Diluted earnings per share(c)			$	0.90				$	(0.13	)			$	0.19							$	0.96
Nine Months Ended November 2, 2013
Segment profit			$	3,546				$	(612	)			$	—							$	2,934
Net interest expense			462					59					445					(d)			965
Gain on receivables transaction(a)			—					—					(391		)						(391		)
Reduction of beneficial interest asset			—					—					82								82
Earnings before income taxes			3,084					$	(671	)			$	(136	)						$	2,278
Provision for income taxes(b)			1,101					$	(201	)			$	(74	)			(e)			$	827
Net earnings			$	1,983				(470		)			(62		)						1,451
Diluted earnings per share(c)			$	3.08				$	(0.73	)			$	(0.10	)						$	2.26
Nine Months Ended October 27, 2012
Segment profit			3,767					(221		)			—								3,547
Net interest expense			499					58					—								558
Gain on receivables held for sale			—					—					(156		)						(156		)
Earnings before income taxes			3,268					(279		)			156								3,145
Provision for income taxes(b)			1,187					(80		)			—					(e)			1,107
Net earnings			$	2,081				$	(199	)			$	156							$	2,038
Diluted earnings per share(c)			$	3.12				$	(0.30	)			$	0.23							$	3.06
Note: Our segment measure of profit is used by management to evaluate the return on our investment and to make operating decisions. To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share, which excludes the impact of our 2013 Canadian market entry, adjustments related to the sale of our U.S. credit card receivables portfolio, favorable resolution of various income tax matters and the loss on early retirement of debt. We believe this information is useful in providing period-to-period comparisons of the results of our U.S. operations. The sum of the non-GAAP adjustments may not equal the total adjustment amounts due to rounding.
(a) Represents consideration received from the sale of our U.S. credit card receivables in the first quarter of 2013 in excess of the recorded amount of the receivables. Consideration included a beneficial interest asset of $225 million.
(b) Taxes are allocated to our business segments based on estimated income tax rates applicable to the operations of the segment for the period.
(c) For the three and nine months ended November 2, 2013, average diluted shares outstanding were 637.4 million and 643.0 million, respectively, and for the three and nine months ended October 27, 2012, average diluted shares outstanding were 662.2 million and 665.8 million, respectively.
(d) Represents the loss on early retirement of debt.
(e) Includes the effect of resolution of income tax matters. The results for the three and nine months ended November 2, 2013 include a $14 million and $31 million tax benefit, respectively, for the reduction of the beneficial interest asset. The results for the nine months ended November 2, 2013 also include a $144 million tax expense for the gain on receivables transaction and a $176 million tax benefit related to the loss on early retirement of debt. The results for the three and nine months ended October 27, 2012 also include a $57 million tax effect related to the gain on receivables held for sale.
Subject to reclassification

Source: Target Corporation

Target Corporation
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