Financial Summary 2017 As Adjusto al 2016 As Adested 2015 As Adjusted by 2019 2018 FINANCIAL RESULTS Gn millions) Sales $74,433 923 $69,414 857 75,356 Other revenue Total revenue Cost of sales Selling, general and administrative expenses (SG&A) Depreciation and amortization (exclusive of depreciation included in cost of sales) Operating income Net interest expenses Net other income expense Earnings from continuing operations before income taxes Prosion for income taxes Net earnings from continuing operations Discontinued operations, net of tax Net emings $77,130 982 78,112 54,864 16,233 2,357 4,658 477 (9) 4,190 921 53.299 15,723 2.224 4,110 461 (27) $71,786 928 72,714 51,125 15,140 2,225 4,224 653 (59) 3,630 722 70,271 49,145 14,217 2,045 4,864 991 (88) 3,961 1.295 2,666 $73,717 777 74,494 52 241 15,406 1.969 4,878 607 (652) 4,923 1,602 3,676 746 3,269 3,321 2,930 7 2.908 6 12 68 42 $3,281 $2,937 $2,914 $2.734 $3,363 PER SHARE Net earnings $3,281 $2,937 $2,914 $2,734 $3,363 $6.39 $5.29 $5.54 0.01 $5.55 $5.32 0.01 $4.61 0.12 0.02 0.07 $6.42 $6.32 $4.73 $5.35 PER SHARE Basic earnings per share Continuing operations Discontinued operations Net earings per share Diluted earnings per share Continuing operations Discontinued operations Neteamings per share Cash dividends declared FINANCIAL POSITION in Millions) $5.29 0.01 $5.25 0.07 $6.34 0.02 $6.36 $2.62 $5.50 0.01 $5.51 $2.54 $4.58 0.12 $4.69 $2.36 $5.29 $5.31 $2.46 $2.20 $42,779 $3,027 $11,499 $9,689 $11,833 $41,290 $3,516 $11.275 $10,506 $11,297 $40,303 $2.533 $11,398 $10,267 $11,651 $38,724 $1,547 $12,591 $11,481 $10,915 $40.262 $1,438 $12,760 59,752 $12.957 Capital expenditures Long-term debit including current portion , Net dat Shareholders investment FINANCIAL RATIOS Comparable sales growth Gros margin of sales SGRAS of total revenue Operating income margin (of total revenue) 3.4% 28.9% 20.8% 6.0% 5.0% 28.4% 20.9% 5.5% 1.3% 28.8% 20.8% 5.8% (0.5)% 29.2% 20.2% 6.9% 21% 29.1% 20.7% 6.5% 504.2 $7,099 517.8 $5,970 541.7 $6,861 556.2 $5,337 6022 $5,254 OTHER Common shares outstanding in millions) Operating cash flow provided by continuing operations (in millions) Revenue per square foot Retail square feet in thousands) Square footage growth Total number of stores Total number of distribution centers $314 $293 239,502 $310 239,539 239,581 $326 240,516 0.4% 1,868 42 $298 239,355 (0.13% 1,822 0.1% 1,844 40 1,802 (0.2)% 1,792 40 41 40 la Consisted of 53 weeks 6) The financial summary data for fiscal year 2015 does not reflect adoption of Accounting Standards Update (ASU) No. 2016-02-Leases (Topic 842). a The 2016 sales decline is primarily due to the December 2015 sale of our pharmacy and clinic businesses (Pharmacy Transaction) to CVS Pharmacy, Inc. 2015 sales includes 53,815 million related to our former pharmacy and clinic businesses. Id includes losses on early retirement of debt of $10 million, $123 million, and $422 million for 2019, 2017, and 2016, respectively. fal For 2015, includes the gain on the sale of our pharmacy and clinic businesses. For 2018 and 2017. includes $36 million and $343 million, respectively, of discrete tax benefits related to the Tax Cuts and Jobs Act of 2017. lg including current portion of long-term debt and other borrowings, net of short-term investments of $1,810 million, $769 million, $1,131 million, $1,110 million, and $3,008 million in 2019. 2018, 2017, 2016, and 2015, respectively. Management believes this measure is an indicator of our level of financial leverage because short-term investments are available to pay debt maturity obligations. For 2017 and earlier, only short-term investments held by U.S. entities were used to calculate net debt because amounts held by entities located outside the US were restricted for use. See definition of comparable sales in Form 10-K, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Represents revenue per square foot which is calculated using rolling four quarters average square feet. In 2017, revenue per square foot was calculated excluding the 53rd week in order to provide a more useful comparison to other years. Using total reported revenue for 2017 (including the 53rd week) resulted in revenue per square foot of $303. The 2015 decrease is primarily due to the Pharmacy Transaction. Our former pharmacy and clinic businesses contributed approximately $16 to 2015 revenue per square foot. Required Information Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 3, 2018. are available here. This material is also available under the Investor Relations link at the company's website (www.target.com). Required: 1. Does Target use average cost, FIFO, or LIFO as its inventory cost flow assumption? 3. Calculate the gross profit ratio and the inventory turnover ratio for the fiscal year ended February 3, 2018. Compare Target's ratios with the industry averages of 24.5% and 71 times. Determine whether Target's ratios indicate the company is more/less profitable and sells its inventory more/less frequently compared to the industry average. Complete this question by entering your answers in the tabs below. Required 1 Required 3 Does Target use average cost, FIFO, or LIFO as its inventory cost flow assumption: Average cost FIFO LIFO Required 3 > Required Information Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 3, 2018. are available here. This material is also available under the Investor Relations link at the company's website (www.target.com) Requlred: 1. Does Target use average cost, FIFO, or LIFO as its inventory cost flow assumption? 3. Calculate the gross profit ratio and the inventory turnover ratio for the fiscal year ended February 3, 2018. Compare Target's ratios with the industry averages of 24.5% and 71 times. Determine whether Target's ratios indicate the company is more/less profitable and sells its inventory more/less frequently compared to the industry average. Complete this question by entering your answers in the tabs below. Required 1 Required 3 calculate the gross profit ratio and the inventory turnover ratio for the fiscal year ended February 3, 2018. Compare Target's Tatics with the industry averages of 24.5% and 7.1 times. Determine whether Target's ratios indicate the company is more/less profitable and sells its inventory more/less frequently compared to the industry average. (Round "Gross profit ratio" to decimal place and "Inventory turnover ratio' to 2 decimal places.) Show less % times Gross profit ratio Inventory tumover ratio Gross profit ratio indicates that the company is inventory turnover ratio indicates that the company sells its inventory more profitable less frequently Required 1 2. In addition to the purchase price. what additional expenditures does the company include in the initial cost of merchandise? Financial Summary 2017 As Adjusto al 2016 As Adested 2015 As Adjusted by 2019 2018 FINANCIAL RESULTS Gn millions) Sales $74,433 923 $69,414 857 75,356 Other revenue Total revenue Cost of sales Selling, general and administrative expenses (SG&A) Depreciation and amortization (exclusive of depreciation included in cost of sales) Operating income Net interest expenses Net other income expense Earnings from continuing operations before income taxes Prosion for income taxes Net earnings from continuing operations Discontinued operations, net of tax Net emings $77,130 982 78,112 54,864 16,233 2,357 4,658 477 (9) 4,190 921 53.299 15,723 2.224 4,110 461 (27) $71,786 928 72,714 51,125 15,140 2,225 4,224 653 (59) 3,630 722 70,271 49,145 14,217 2,045 4,864 991 (88) 3,961 1.295 2,666 $73,717 777 74,494 52 241 15,406 1.969 4,878 607 (652) 4,923 1,602 3,676 746 3,269 3,321 2,930 7 2.908 6 12 68 42 $3,281 $2,937 $2,914 $2.734 $3,363 PER SHARE Net earnings $3,281 $2,937 $2,914 $2,734 $3,363 $6.39 $5.29 $5.54 0.01 $5.55 $5.32 0.01 $4.61 0.12 0.02 0.07 $6.42 $6.32 $4.73 $5.35 PER SHARE Basic earnings per share Continuing operations Discontinued operations Net earings per share Diluted earnings per share Continuing operations Discontinued operations Neteamings per share Cash dividends declared FINANCIAL POSITION in Millions) $5.29 0.01 $5.25 0.07 $6.34 0.02 $6.36 $2.62 $5.50 0.01 $5.51 $2.54 $4.58 0.12 $4.69 $2.36 $5.29 $5.31 $2.46 $2.20 $42,779 $3,027 $11,499 $9,689 $11,833 $41,290 $3,516 $11.275 $10,506 $11,297 $40,303 $2.533 $11,398 $10,267 $11,651 $38,724 $1,547 $12,591 $11,481 $10,915 $40.262 $1,438 $12,760 59,752 $12.957 Capital expenditures Long-term debit including current portion , Net dat Shareholders investment FINANCIAL RATIOS Comparable sales growth Gros margin of sales SGRAS of total revenue Operating income margin (of total revenue) 3.4% 28.9% 20.8% 6.0% 5.0% 28.4% 20.9% 5.5% 1.3% 28.8% 20.8% 5.8% (0.5)% 29.2% 20.2% 6.9% 21% 29.1% 20.7% 6.5% 504.2 $7,099 517.8 $5,970 541.7 $6,861 556.2 $5,337 6022 $5,254 OTHER Common shares outstanding in millions) Operating cash flow provided by continuing operations (in millions) Revenue per square foot Retail square feet in thousands) Square footage growth Total number of stores Total number of distribution centers $314 $293 239,502 $310 239,539 239,581 $326 240,516 0.4% 1,868 42 $298 239,355 (0.13% 1,822 0.1% 1,844 40 1,802 (0.2)% 1,792 40 41 40 la Consisted of 53 weeks 6) The financial summary data for fiscal year 2015 does not reflect adoption of Accounting Standards Update (ASU) No. 2016-02-Leases (Topic 842). a The 2016 sales decline is primarily due to the December 2015 sale of our pharmacy and clinic businesses (Pharmacy Transaction) to CVS Pharmacy, Inc. 2015 sales includes 53,815 million related to our former pharmacy and clinic businesses. Id includes losses on early retirement of debt of $10 million, $123 million, and $422 million for 2019, 2017, and 2016, respectively. fal For 2015, includes the gain on the sale of our pharmacy and clinic businesses. For 2018 and 2017. includes $36 million and $343 million, respectively, of discrete tax benefits related to the Tax Cuts and Jobs Act of 2017. lg including current portion of long-term debt and other borrowings, net of short-term investments of $1,810 million, $769 million, $1,131 million, $1,110 million, and $3,008 million in 2019. 2018, 2017, 2016, and 2015, respectively. Management believes this measure is an indicator of our level of financial leverage because short-term investments are available to pay debt maturity obligations. For 2017 and earlier, only short-term investments held by U.S. entities were used to calculate net debt because amounts held by entities located outside the US were restricted for use. See definition of comparable sales in Form 10-K, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Represents revenue per square foot which is calculated using rolling four quarters average square feet. In 2017, revenue per square foot was calculated excluding the 53rd week in order to provide a more useful comparison to other years. Using total reported revenue for 2017 (including the 53rd week) resulted in revenue per square foot of $303. The 2015 decrease is primarily due to the Pharmacy Transaction. Our former pharmacy and clinic businesses contributed approximately $16 to 2015 revenue per square foot. Required Information Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 3, 2018. are available here. This material is also available under the Investor Relations link at the company's website (www.target.com). Required: 1. Does Target use average cost, FIFO, or LIFO as its inventory cost flow assumption? 3. Calculate the gross profit ratio and the inventory turnover ratio for the fiscal year ended February 3, 2018. Compare Target's ratios with the industry averages of 24.5% and 71 times. Determine whether Target's ratios indicate the company is more/less profitable and sells its inventory more/less frequently compared to the industry average. Complete this question by entering your answers in the tabs below. Required 1 Required 3 Does Target use average cost, FIFO, or LIFO as its inventory cost flow assumption: Average cost FIFO LIFO Required 3 > Required Information Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 3, 2018. are available here. This material is also available under the Investor Relations link at the company's website (www.target.com) Requlred: 1. Does Target use average cost, FIFO, or LIFO as its inventory cost flow assumption? 3. Calculate the gross profit ratio and the inventory turnover ratio for the fiscal year ended February 3, 2018. Compare Target's ratios with the industry averages of 24.5% and 71 times. Determine whether Target's ratios indicate the company is more/less profitable and sells its inventory more/less frequently compared to the industry average. Complete this question by entering your answers in the tabs below. Required 1 Required 3 calculate the gross profit ratio and the inventory turnover ratio for the fiscal year ended February 3, 2018. Compare Target's Tatics with the industry averages of 24.5% and 7.1 times. Determine whether Target's ratios indicate the company is more/less profitable and sells its inventory more/less frequently compared to the industry average. (Round "Gross profit ratio" to decimal place and "Inventory turnover ratio' to 2 decimal places.) Show less % times Gross profit ratio Inventory tumover ratio Gross profit ratio indicates that the company is inventory turnover ratio indicates that the company sells its inventory more profitable less frequently Required 1 2. In addition to the purchase price. what additional expenditures does the company include in the initial cost of merchandise