What changed in this filing

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Item 1. Financial Statements

2023-11-22 compared with 2023-08-25 · 52 added, 43 removed, 316 unchanged (23% of the section changed)

1 unchanged sentence

Consolidated Statements of Operations

Three Months Ended Six Months Ended

(millions, except per share data) (unaudited) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Three Months Ended Nine Months Ended

(millions, except per share data) (unaudited) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Sales $ 25,004 $ 26,122 $ 74,336 $ 76,605

22 unchanged sentences

Consolidated Statements of Comprehensive Income

Three Months Ended Six Months Ended

(millions) (unaudited) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Three Months Ended Nine Months Ended

(millions) (unaudited) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Net earnings $ 971 $ 712 $ 2,756 $ 1,904

10 unchanged sentences

Consolidated Statements of Financial Position

(millions, except footnotes) (unaudited) July 29,

(millions, except footnotes) (unaudited) October 28,

2023 January 28,

2023 July 30,

2023 October 29,

Cash and cash equivalents $ 1,910 $ 2,229 $ 954

31 unchanged sentences

Common Stock Authorized 6,000,000,000 shares, $ 0.0833 par value;

461,600,640 , 460,346,947 , and 460,236,393 shares issued and outstanding as of July 29, 2023, January 28, 2023, and July 30, 2022, respectively.

461,651,176 , 460,346,947 , and 460,297,654 shares issued and outstanding as of October 28, 2023, January 28, 2023, and October 29, 2022, respectively.

Preferred Stock Authorized 5,000,000 shares, $ 0.01 par value;

6 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended

(millions) (unaudited) July 29, 2023 July 30, 2022

Nine Months Ended

(millions) (unaudited) October 28, 2023 October 29, 2022

Operating activities

10 unchanged sentences

Accrued and other liabilities 528 ( 578 )

Cash provided by (required for) operating activities 3,398 ( 47 )

Cash provided by operating activities

Investing activities

5 unchanged sentences

Change in commercial paper, net — 2,104

Additions to long-term debt — 991

Reductions of long-term debt ( 114 ) ( 139 )

62 unchanged sentences

July 29, 2023 461.6 $ 38 $ 6,610 $ 5,767 $ ( 425 ) $ 11,990

We declared $ 1.10 and $ 1.08 dividends per share for the three months ended July 29, 2023 and July 30, 2022, respectively, and $ 4.14 per share for the fiscal year ended January 28, 2023.

Net earnings — — — 971 — 971

Other comprehensive loss

— — — — ( 5 ) ( 5 )

Dividends declared — — — ( 513 ) — ( 513 )

Stock options and awards 0.1 — 71 — — 71

October 28, 2023 461.7 $ 38 $ 6,681 $ 6,225 $ ( 430 ) $ 12,514

We declared $ 1.10 and $ 1.08 dividends per share for the three months ended October 28, 2023 and October 29, 2022, respectively, and $ 4.14 per share for the fiscal year ended January 28, 2023.

See accompanying Notes to Consolidated Financial Statements .

35 unchanged sentences

We also earn revenues from a variety of other sources, most notably credit card profit-sharing income from our arrangement with TD Bank Group (TD).

Revenue Three Months Ended Six Months Ended

(millions) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Revenue Three Months Ended Nine Months Ended

(millions) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Apparel & accessories (a)

22 unchanged sentences

Sales are recognized net of expected returns, which we estimate using historical return patterns and our expectation of future returns.

As of July 29, 2023, January 28, 2023, and July 30, 2022, the accrual for estimated returns was $ 177 million, $ 174 million, and $ 175 million, respectively.

As of October 28, 2023, January 28, 2023, and October 29, 2022, the accrual for estimated returns was $ 207 million, $ 174 million, and $ 209 million, respectively.

Revenue from Target gift card sales is recognized upon gift card redemption, which is typically within one year of issuance.

1 unchanged sentence

2023 Gift Cards Issued During Current Period But Not Redeemed (b)

Revenue Recognized From Beginning Liability July 29,

Revenue Recognized From Beginning Liability October 28,

Gift card liability (a)

14 unchanged sentences

Financial Instruments Measured On a Recurring Basis Fair Value

(millions) Classification Measurement Level July 29, 2023 January 28, 2023 July 30, 2022

(millions) Classification Measurement Level October 28, 2023 January 28, 2023 October 29, 2022

Short-term investments Cash and Cash Equivalents Level 1 $ 1,004 $ 1,343 $ —

5 unchanged sentences

Significant Financial Instruments Not Measured at Fair Value (a)

July 29, 2023 January 28, 2023 July 30, 2022

October 28, 2023 January 28, 2023 October 29, 2022

Value Carrying

11 unchanged sentences

The arrangements can be terminated by either party with notice ranging up to 120 days.

Our outstanding vendor obligations eligible for early payment under these arrangements totaled $ 3.7 billion, $ 3.4 billion, and $ 4.6 billion as of July 29, 2023, January 28, 2023, and July 30, 2022, respectively, and are included within Accounts Payable on our Consolidated Statements of Financial Position.

Our outstanding vendor obligations eligible for early payment under these arrangements totaled $ 4.5 billion, $ 3.4 billion, and $ 4.5 billion as of October 28, 2023, January 28, 2023, and October 29, 2022, respectively, and are included within Accounts Payable on our Consolidated Statements of Financial Position.

Our outstanding vendor obligations do not represent actual receivables sold by our vendors to the financial institutions, which may be lower.

5 unchanged sentences

We review long-lived assets for impairment when store performance expectations, events, or changes in circumstances—such as a decision to relocate or close a store, office, or distribution center, discontinue a project, or make significant software changes—indicate that the asset’s carrying value may not be recoverable.

We recognized impairment charges of $ 33 million for the three and six months ended July 29, 2023.

We recognized impairment charges of $ 27 million and $ 50 million for the three and six months ended July 30, 2022, respectively.

We recognized impairment charges of $ 64 million and $ 98 million for the three and nine months ended October 28, 2023, respectively.

We recognized impairment charges of $ 5 million and $ 55 million for the three and nine months ended October 29, 2022, respectively.

These impairment charges are included in Selling, General and Administrative Expenses (SG&A).

1 unchanged sentence

We obtain short-term financing from time to time under our commercial paper program.

For the six months ended July 29, 2023 and July 30, 2022, the maximum amounts outstanding were $ 90 million and $ 1.5 billion, respectively, and the average daily amounts outstanding were $ 2 million and $ 538 million, respectively, at a weighted average annual interest rate of 4.9 percent and 1.1 percent, respectively.

No balances were outstanding as of July 29, 2023.

As of July 30, 2022, $ 1.5 billion was outstanding and is classified within Current Portion of Long-Term Debt and Other Borrowings on our Consolidated Statements of Financial Position.

For the three months ended October 28, 2023, there were no commercial paper amounts outstanding.

For the three months ended October 29, 2022, the maximum amount outstanding was $ 2.1 billion and the average daily amount outstanding was $ 1.1 billion, at a weighted average annual interest rate of 2.8 percent.

For the nine months ended October 28, 2023 and October 29, 2022, the maximum amounts outstanding were $ 90 million and $ 2.1 billion, respectively, and the average daily amounts outstanding were $ 1 million and $ 713 million, respectively, at a weighted average annual interest rate of 4.8 percent and 1.9 percent, respectively.

No balances were outstanding as of October 28, 2023.

As of October 29, 2022, $ 2.1 billion was outstanding and is classified within Current Portion of Long-Term Debt and Other Borrowings on our Consolidated Statements of Financial Position.

In October 2023, we obtained a new committed $ 1.0 billion 364 -day unsecured revolving credit facility that will expire in October 2024 and terminated our prior 364 -day credit facility.

We also exercised our option to extend our existing five-year unsecured revolving credit facility, which has a maximum committed capacity of $ 3.0 billion and now expires in October 2028.

No balances were outstanding under either credit facility at any time during 2023 or 2022.

Derivative Financial Instruments

2 unchanged sentences

Note 3 to the Consolidated Financial Statements provides the fair value and classification of these instruments.

We were party to interest rate swaps with notional amounts totaling $ 2.45 billion as of July 29, 2023 and January 28, 2023, and $ 2.25 billion as of July 30, 2022.

We were party to interest rate swaps with notional amounts totaling $ 2.45 billion as of October 28, 2023, January 28, 2023, and October 29, 2022.

We pay a floating rate and receive a fixed rate under each of these agreements.

All of the agreements are designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during the three and six months ended July 29, 2023 and July 30, 2022.

All of the agreements are designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during the three and nine months ended October 28, 2023 and October 29, 2022.

During 2023, we amended interest rate swaps with notional amounts totaling $ 1.5 billion to replace the London Interbank Offered Rate (LIBOR) with the daily Secured Overnight Financing Rate (SOFR) as part of our planned reference rate reform activities.

These amendments did not result in any change to our application of hedge accounting or any impact to our consolidated financial statements.

We were party to forward-starting interest rate swaps with notional amounts totaling $ 2.15 billion as of July 30, 2022.

We were party to forward-starting interest rate swaps with notional amounts totaling $ 1.45 billion as of October 29, 2022.

During 2022, we terminated all remaining forward-starting interest rate swap agreements.

The resulting gains upon termination were recorded in Accumulated Other Comprehensive Loss and will be recognized as a reduction to Net Interest Expense over the respective term of the debt.

Effect of Hedges on Debt

July 29, 2023 January 28, 2023 July 30, 2022

Long-term debt and other borrowings

Carrying amount of hedged debt $ 2,305 $ 2,366 $ 2,263

Cumulative hedging adjustments, included in carrying amount ( 136 ) ( 74 ) 22

TARGET CORPORATION

2 unchanged sentences

NOTES Index to Notes

Effect of Hedges on Net Interest Expense Three Months Ended Six Months Ended

(millions) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Effect of Hedges on Debt

October 28, 2023 January 28, 2023 October 29, 2022

Long-term debt and other borrowings

Carrying amount of hedged debt $ 2,245 $ 2,366 $ 2,294

Cumulative hedging adjustments, included in carrying amount ( 197 ) ( 74 ) ( 146 )

Effect of Hedges on Net Interest Expense Three Months Ended Nine Months Ended

(millions) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Gain (loss) on fair value hedges recognized in Net Interest Expense

5 unchanged sentences

We periodically repurchase shares of our common stock under a board-authorized repurchase program through a combination of open market transactions, accelerated share repurchase (ASR) arrangements, and other privately negotiated transactions with financial institutions.

We did no t repurchase any of our shares during the six months ended July 29, 2023.

Share Repurchase Activity Three Months Ended Six Months Ended

(millions, except per share data) July 29, 2023 July 30, 2022 (a)

July 29, 2023 July 30, 2022 (a)

We did no t repurchase any of our shares during the nine months ended October 28, 2023.

Share Repurchase Activity Three Months Ended Nine Months Ended

(millions, except per share data) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Number of shares purchased — — — 12.5

1 unchanged sentence

Total investment $ — $ — $ — $ 2,646

(a) Includes activity related to the ASR arrangement that we entered into during the first quarter of 2022 because final settlement occurred in the second quarter of 2022.

Under the ASR arrangement, we repurchased 12.5 million shares for a total cash investment of $ 2.6 billion.

We did not enter into an ASR arrangement during any other periods presented.

Pension Benefits

We provide pension plan benefits to eligible team members.

Net Pension Benefits Expense Three Months Ended Six Months Ended

(millions) Classification July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Net Pension Benefits Expense Three Months Ended Nine Months Ended

(millions) Classification October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Service cost benefits earned SG&A $ 19 $ 22 $ 58 $ 68

11 unchanged sentences

January 28, 2023 $ 300 $ ( 23 ) $ ( 696 ) $ ( 419 )

Other comprehensive income (loss) before reclassifications, net of tax — ( 1 ) — ( 1 )

Amounts reclassified from AOCI, net of tax ( 13 ) — 3 ( 10 )

July 29, 2023 $ 291 $ ( 23 ) $ ( 693 ) $ ( 425 )

October 28, 2023 $ 287 $ ( 24 ) $ ( 693 ) $ ( 430 )

TARGET CORPORATION

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements