I am having troubles doing this comparison of two companies. Im over thinking the work and need to get it simplified. I did most of the work just need you to check it over.

Go to the Course Resources page within the CourseSpecific Resources section. The Course Resources page is under Course Home. Complete your Title page on this tab. Please include your name, the course, the date, your instructor's name, and the title for the project. Complete one paragraph, profiling each company's business, including information such as a brief history, where they are located, number of employees, the products they sell, and so forth. Please reference any websites that you used for the Profiles on the Bibliography tab. The humble beginnings of Walmart is a story that started small, with a single discount store and the simple idea of selling more for less, has grown over the last 50 years into the largest retailer in the world. Each week, over 260 million customers and members visit our 11,695 stores under 59 banners in 28 countries and e-commerce websites in 11 countries. With fiscal year 2017 revenue of $485.9 billion, Walmart employs approximately 2.3 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. It's all part of our unwavering commitment to creating opportunities and bringing value to customers and communities around the world. The beginnings of target The first Target store opened in 1962 in the Minneapolis suburb of Roseville, Minn., with a focus on convenient shopping at competitive discount prices. Today, Target remains committed to providing a one-stop shopping experience for guests by delivering differentiated merchandise and outstanding value with its Expect More. Pay Less brand promise. Target currently is the second largest general merchandise retailer in America, with Target.com consistently being ranked as one of the most-visited retail Web sites. Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab, and also include your commentary. The 2014 financial statements used to calculate these ratios are available in the Investor Relations section of the Tootsie Roll and Hershey websites. Target Interpretation and comparison between the two companies' ratios (reading Chapter 13 will help you prepare the commentary). Walmart The comparison of the ratios is an important part of the project. A good approach is to briefly explain what the ratio tells us. Indicate whether a higher or lower ratio is better. Then compare the two companies on this basis. Remembereach ratio below requires a comparison. Earnings per Share of Common Stock (basic - common) Current Ratio As given in the income statement $ 1.05 $ 3.91 Current assets Current liabilities $264,621 $64,459 = 4.11 $2,247,047 $1,935,647 = 1.16 Gross margin Net sales $198,962 $539,895 = 36.9% $3,336,166 $7,421,768 = 45.0% Net income Net sales $63,298 $539,895 = 11.7% $846,912 $7,421,768 = 11.4% Inventory Turnover Cost of goods sold Average inventory $340,933 $66,118 5.2 times $4,085,602 $730,289 Days' inventory outstanding (DIO) 365 Inventory turnover 365 5.2 = 71 days 365 5.6 = Accounts Receivable Turnover Net sales (assume all sales are credit sales) Average net accounts receivable $539,895 $41,987 = 12.9 $478,614 $537,426 = 0.9 Days' Sales Outstanding (DSO) 365 Accounts receivable turnover 365 12.9 28.4 days 365 0.9 = 409.9 days Net sales Average total assets $539,895 $899,398 0.60 $7,421,768 $5,493,502 = 1.35 Gross (Profit) Margin Percentage Rate of Return (Net Profit Margin) on Sales Asset turnover Rate of Return on Total Assets (ROA) Debt Ratio Times-Interest-Earned Ratio Dividend Yield (Please follow the Course Project instructions to calculate the current dividend yield.) Rate of Return on Common Stockholders' Equity (ROE) Free cash flow Price-Earnings Ratio (Multiple) (Please see the Course Project instructions for the dates to use for this ratio.) Rate of return on sales times asset turnover = = 5.6 times 65 days = 7.0% = 15.4% Total Liabilities Total Assets $219,250 $910,386 = 24.1% $4,109,986 $5,629,516 = 73.0% Income from operations Interest expense $83,923 $99 = 847.7 1,389,575 83,532 = 16.6 Dividend per share of common stock (Yahoo Finance 12/24/2015) Market price per share of common stock (Yahoo Finance 12/24/2015) $0.36 $32.04 = 1.1% $2.33 $90.32 = 2.6% Net income - Preferred dividends Average common stockholders' equity $63,298 $685,721 9.2% $846,912 $1,567,791 = 54.0% = Net cash provided by operating activities minus cash payments earmarked for investments in plant assets Market price per share of common stock as of 12/31/2014 Earnings per share = $30.65 $1.05 = $ $78,065 29 492,274 = $103.93 $3.91 = 27 You all get the chance to play the role of financial analyst below. The summary should be a comparison of each company's performance for each major category of ratios listed below. Focus on major differences as you compare each company's performance. A nice way to conclude is to state which company you feel is the better investment and why. Measuring Ability to Pay Current Liabilities: Tootsie Roll has the advantage for the current ratio. Tootsie Roll has $4.11 in current assets for every dollar in current liabilities, while Hershey has only $1.16 in current assets for every dollar in current liabilities. Measuring Turnover: Hershey has the advantage for the inventory turnover and accounts receivable turnover ratios. Hershey turns over its inventory 5.6 times to Tootsie Roll's 5.2 times, and Hershey turns over its accounts receivable 13.8 times to Tootsie Roll's 12.9 times. Measuring Leverage - Overall Ability to Pay Debts: Tootsie Roll has significantly less debt than Hershey as evidenced by Tootsie Roll's 24.1% debt-to-asset ratio as compared to Hershey's 73% debt-to-asset ratio. Tootsie Roll can cover its interest expense 847.7 times with income before interest and taxes, while Hershey can only cover its interest expense 16.6 times with their income before interest and taxes. Tootsie Roll has the advantage for each of these ratios. Measuring Profitability: Hershey has the advantage for 4 of the 5 profitability ratios. Hershey has a significant edge in return on common stockholders' equity, with a 54% return on common stockholders' equity, as compared to Tootsie Roll's 9.2% return on common stockholders' equity. Hershey has a higher gross profit rate (45.0%-36.9%), while Tootise Roll has a higher net profit margin ratio (11.7%-11.4%). Hershey also has a significant advantage for asset turnover (1.35-.60) and rate of return on total assets (15.4%-7.0%). Analyzing Stock as an Investment: Hershey returns a 2.6% dividend yield to its investors, while Tootsie Roll's yield is 1.1%. Hershey has positive free cash flow of $492.2 million, while Tootsie Roll has positive free cash flow of $78.1 million. Free cash flow can be used to undertake acquisitions, pay additional dividends, pay down debt, or buy back stock. Conclusion: Tootsie Roll is the safer investment when you examine their ability to pay current liabilities and overall liabilities; however, Hershey has the advantage for the turnover and profitability ratios. For the conservative investor, Tootsie Roll looks like the way to go because of their strong current and times-interestearned ratios. For the growth-oriented investor, Hershey is the way to go because of their stronger profitability ratios and large amount of free cash flow. Your textbook and any information that you use to profile the companies should be cited as a reference below. Big Charts for Hershey (12/31/2014). Retrieved December 24, 2015 from http://bigcharts.marketwatch.com/historical/default.as symb=hsy&closeDate=12%2F31%2F14&x=0&y=0 Big Charts for Tootsie Roll (12/31/2014). Retrieved December 24, 2015 from http://bigcharts.marketwatch.com/historical/default symb=tr&closeDate=12%2F31%2F14&x=0&y=0 Harrison, W.T., Horngren C.T. & Thomas, C.W. (2015). Financial Accounting, 10th ed. Upper Saddle River, NJ: Pearson Educat %20Statement_2014.pdf HSY Profile (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q/pr?s=HSY+Profile HSY Stock Price (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q?s=hsy&ql=1 Tootsie Roll Industries 2014 Annual Report (2015). Retrieved December 24, 2015 from http://tootsie.com/financials/ TR Profile (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q/pr?s=TR+Profile TR Stock Price (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q?s=TR&ql=1 2016 Annual Report Visit our online Annual Report at Target.com/annualreport 1000 Nicollet Mall, Minneapolis, MN 55403 612.304.6073 2016 Annual Report Welcome to our 2016 Annual Report To explore key stories of the past year and find out more about what's in store, visit Target.com/abullseyeview. You can also view our Annual Report online at Target.com/annualreport. Financial Highlights $4.58 $5.25 $3.83 $2,669 $3,321 $2,449 $2,694 $4,969 $5,530 $4.20 Diluted EPS In Millions $4,535 $5,170 $5,740 $69,495 $73,785 $72,618 $71,279 $73,301 Net Earnings In Millions $5.00 EBIT In Millions $3,315 Sales (Note: Reflects amounts attributable to continuing operations.) '12 '13\t'14\t'15\t'16 '12 '13\t'14\t'15\t'16 '12 '13\t'14\t'15\t'16 '12 '13\t'14\t'15\t'16 2016 Growth: -5.8% (a) Five-year CAGR: 0.3% 2016 Growth: -10.1% Five-year CAGR: -1.8% 2016 Growth: -19.6% Five-year CAGR: -2.6% 2016 Growth: -12.7% Five-year CAGR: 0.5% Total Segment Sales: $69,495 Million 22% 22% 20% 19% 17% Household Essentials Food, Beverage & Pet Supplies Apparel & Accessories Home Furnishings & Decor Hardlines (a)\tThe 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 $3,815 million related to our former pharmacy and clinic businesses. Target 2016 Annual Report 2016 marked a significant year of transition at Target. Two years ago, we laid out an ambitious, multi-year strategy to put our company back on the path to long term profitable growth and create lasting shareholder value. We said this work would be a journey. And we knew it would take time to reimagine our operating model, reposition our asset base and build a new company that is prepared to compete and win in this new era of retail. I am pleased to report that in 2016, we made significant progress on our goals: S \u0007 ignature categories, including Style and Kids, gained market share, growing approximately three percentage points faster than our total comparable sales. O \u0007 ur digital channel sales have consistently outpaced the industry averages, with annual growth of nearly 30% over the last two years. O \u0007 ur small formats, which bring our brand to new guests in urban neighborhoods and college campuses, are producing outstanding results, generating much stronger sales productivity, healthy profit margins and return on investment. W \u0007 e introduced two new blockbuster brands for kidsCat & Jack and Pillowfortthat have consistently generated double digit comp sales increases since they launched. O \u0007 ur supply chain investments are beginning to bear fruit, driving efficiency for Target and elevating the shopping experience for our guests by offering greater choice, speed, ease and convenience. A \u0007 nd we've done all this while taking more than $2 billion in expense and cost of goods out of our business during the past two years. Taken together, these efforts have produced strong bottomline results. Our 2016 GAAP earnings per share (EPS) from continuing operations reached $4.58, and our Adjusted EPS reached $5.01, representing a nine percent average annual growth rate in Adjusted EPS since we embarked on this strategy two years ago. And during that same period, we returned nearly $10 billion to our shareholders through dividends and share repurchase. Yet, despite this progress, we haven't seen the growth we expected on the top line. Significant changes in consumer behavior are creating real challenges across our industry. Combine this change with an acceleration in the channel shift into digital shopping, and instead of building momentum in our business, we've seen a slowdown. Many of our competitors are struggling to compete in this environment, closing stores and exiting business lines. At Target, we are taking a fundamentally different approach. While others are exiting businesses and cutting investments, we are confidently investing in our future, creating a growth engine that we expect to drive consistent, sustainable, profitable growth, and market-share gains for many years to come. And we are, by no means, starting from scratch. The progress we made in 2016 was a direct result of a very deliberate strategy to align our teams behind several key priorities. And looking ahead for 2017, those priorities will not change. What will change is our pace. Beginning in 2017, we are embarking on capital investments of more than $7 billion during the next three years to advance and elevate our digital capabilities, open more than 100 new small format stores in priority markets, reimagine and reposition more than 600 existing stores, accelerate enterprise data and analytics capabilities, unveil more than a dozen new exclusive brands and continue to transform our supply chain into a smart network that leverages our inherent structural advantages in terms of proximity and scale. To support these changes and give our teams greater flexibility, we're planning to invest about $1 billion of our operating profits this year, which will enable us to grow faster over time. Given the headwinds facing our industry and the scale and depth of our investments, it will take time to realize share gains. We could make different choicesshut down stores, reduce payroll or service levelsin an effort to prop up our P&L in the short term, but that would be the wrong approach for Target. We are playing the long game. Investing to grow and investing to win. We have a strong balance sheet. A talented team. And we are asking shareholders to make a meaningful investment in our future, so we can build a new company that will produce greater value for our guests and our shareholders for many years to come. Brian Cornell, Chairman and CEO Financial Summary Target 2016 Annual Report 2016 2015 2014 2013 2012 (a) FINANCIAL RESULTS: (in millions) Sales (b) $\t69,495 $ 73,785 $ 72,618 $ 71,279 $\t73,301 Cost of Sales 48,872 51,997 51,278 50,039 50,568 Gross Margin 20,623 Selling, general and administrative expenses (SG&A) 13,356 14,665 14,676 14,465 14,643 Credit card expenses Depreciation and amortization 467 2,298 2,213 2,129 1,996 2,044 Gain on sale (c) Earnings from continuing operations before interest expense and income taxes (EBIT) 21,788 21,340 21,240 22,733 (620) (391) (161) 4,969 5,530 4,535 5,170 5,740 Net interest expense 1,004 607 882 1,049 684 Earnings from continuing operations before income taxes 3,965 4,923 3,653 4,121 5,056 Provision for income taxes 1,296 1,602 1,204 1,427 1,741 Net earnings from continuing operations 2,669 3,321 2,449 2,694 3,315 Discontinued operations, net of tax 68 42 (4,085) (723) (316) Net earnings / (loss) $\t2,737 $\t3,363 $ (1,636) $ 1,971 $\t4.62 $ 5.29 $ 3.86 $ 4.24 $ 2,999 PER SHARE: Basic earnings / (loss) per share Continuing operations Discontinued operations Net earnings / (loss) per share 0.12 $\t5.05 0.07 (6.44) (1.14) (0.48) $\t4.74 $ 5.35 $\t(2.58) $ 3.10 $\t4.57 $\t4.58 $ 5.25 $ 3.83 $ 4.20 $\t5.00 Diluted earnings / (loss) per share Continuing operations Discontinued operations 0.12 0.07 (6.38) (1.13) (0.48) Net earnings / (loss) per share $\t4.70 $ 5.31 $\t(2.56) $ 3.07 $ 4.52 Cash dividends declared $\t2.36 $ 2.20 $ 1.99 $ 1.65 $\t1.38 FINANCIAL POSITION: (in millions) Total assets $\t37,431 $ Capital expenditures (d) $\t1,547 $ 1,438 40,262 $ 1,786 $ 41,172 $ 44,325 $ 47,878 $ 1,886 $\t2,345 Long-term debt, including current portion (d) $ 12,749 $ 12,760 $ 12,725 $ 12,494 $\t16,260 Net debt (d)(e) $ 11,639 $ 9,752 $ 11,205 $ 12,491 $\t16,185 Shareholders' investment $\t10,953 $ 12,957 $ 13,997 $ 16,231 $\t16,558 SEGMENT FINANCIAL RATIOS: (f) Comparable sales growth (g) (0.5)% 2.1% 1.3% (0.4)% 2.7% Gross margin (% of sales) 29.7% 29.5% 29.4% 29.8% 29.7% SG&A (% of sales) 19.2% 19.6% 20.0% 20.2% 19.1% EBIT margin (% of sales) 7.1% 6.9% 6.5% 6.8% 7.8% 556.2 602.2 640.2 632.9 645.3 OTHER: Common shares outstanding (in millions) Operating cash flow provided by continuing operations (in millions) (h) $\t5,329 $ 5,254 $ 5,157 $ 7,572 $\t5,615 Sales per square foot (d)(i) $\t290 $ 307 $ 302 $ 298 $\t299 Retail square feet (in thousands) (d) 239,502 239,539 239,963 240,054 237,847 Square footage growth (d) % (0.2)% % 0.9% 0.9% Total number of stores (d) 1,802 1,792 1,790 1,793 1,778 Total number of distribution centers (d) 40 40 38 37 37 (a)\tConsisted of 53 weeks. (b)\tThe 2016 sales decline is primarily due to the Pharmacy Transaction. For 2012, includes credit card revenues. (c)\tFor 2015, includes the gain on the Pharmacy Transaction. For 2013 and 2012, includes gains related to the sale of our U.S. credit card receivables portfolio. (d)\tRepresents amounts attributable to continuing operations. (e)\tIncluding current portion and short-term notes payable, net of short-term investments of $1,110 million, $3,008 million, $1,520 million, $3 million, and $75 million in 2016, 2015, 2014, 2013, and 2012, 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. (f) Effective January 15, 2015, we operate as a single segment which includes all of our continuing operations, excluding net interest expense and the impact of certain other discretely managed items. (g)\tSee definition of comparable sales in Form 10-K, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. (h)\tPrior year balances have been revised to reflect the impact of adopting ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, described further in Form 10-K, Item 8, Financial Statements and Supplementary Data, Note 26. (i) Represents sales per square foot which is calculated using rolling four quarters average square feet. The 2016 decrease is primarily due to the Pharmacy Transaction. Our former pharmacy and clinic businesses contributed approximately $16 to 2015 sales per square foot. In 2012, sales per square foot was calculated excluding the 53rd week in order to provide a more useful comparison to other years. Using total reported sales for 2012 (including the 53rd week) resulted in sales per square foot of $304. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 28, 2017 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-6049 TARGET CORPORATION (Exact name of registrant as specified in its charter) Minnesota (State or other jurisdiction of incorporation or organization) 1000 Nicollet Mall, Minneapolis, Minnesota (Address of principal executive offices) 41-0215170 (I.R.S. Employer Identification No.) 55403 (Zip Code) Registrant's telephone number, including area code: 612/304-6073 Securities Registered Pursuant To Section 12(B) Of The Act: Title of Each Class Common Stock, par value $0.0833 per share Name of Each Exchange on Which Registered New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x 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. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Act). See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 126-2 of the Exchange Act. Large accelerated filer x Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x The aggregate market value of the voting stock held by non-affiliates of the registrant as of July 30, 2016 was $43,242,921,133, based on the closing price of $75.33 per share of Common Stock as reported on the New York Stock Exchange Composite Index. Indicate the number of shares outstanding of each of registrant's classes of Common Stock, as of the latest practicable date. Total shares of Common Stock, par value $0.0833, outstanding at March 2, 2017 were 552,675,341. DOCUMENTS INCORPORATED BY REFERENCE Portions of Target's Proxy Statement to be filed on or about May 1, 2017 are incorporated into Part III. TABLE OF CONTENTS PART I Item 1 Item 1A Item 1B Item 2 Item 3 Item 4 Item 4A PART II Item 5 Item 6 Item 7 Item 7A Item 8 Item 9 Item 9A Item 9B PART III Item 10 Item 11 Item 12 Item 13 Item 14 PART IV Item 15 Signatures Exhibit Index Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Executive Officers 2 5 10 11 12 12 13 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information 14 16 16 29 30 60 60 60 Directors, Executive Officers and Corporate Governance Executive Compensation 60 61 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services 61 61 61 Exhibits, Financial Statement Schedules 1 62 66 68 PART I Item 1. Business General Target Corporation (Target, the Corporation or the Company) was incorporated in Minnesota in 1902. We offer our customers, referred to as "guests," everyday essentials and fashionable, differentiated merchandise at discounted prices. Our ability to deliver a preferred shopping experience to our guests is supported by our supply chain and technology, our devotion to innovation, our loyalty offerings such as REDcard Rewards and Cartwheel, and our disciplined approach to managing our business and investing in future growth. We operate as a single segment designed to enable guests to purchase products seamlessly in stores or through our digital channels. Since 1946, we have given 5 percent of our profit to communities. We perform account servicing and primary marketing functions for, and earn a substantial portion of the profits generated by, the Target Credit Card and Target MasterCard consumer receivables portfolio, which is underwritten, funded, and owned by TD Bank Group (TD). Refer to Note 9 of the Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data (the Financial Statements) for more information on the credit card profit sharing. Prior to January 15, 2015, we operated a Canadian Segment. On January 15, 2015, we announced our exit from the Canadian market, and Target Canada Co. and certain other wholly owned subsidiaries of Target filed for protection (the Filing) in Canada under the Companies' Creditors Arrangement Act (CCAA) with the Ontario Superior Court of Justice in Toronto (the Court). Following the Filing, we no longer consolidate our former Canadian retail operation. Canadian financial results prior to the Filing are included in our financial statements and classified within discontinued operations. See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and Note 7 of the Financial Statements for more information. Prior to December 16, 2015, we operated 1,672 pharmacies and 79 clinics in our stores. On December 16, 2015, we sold our pharmacy and clinic businesses (Pharmacy Transaction) to CVS Pharmacy, Inc. (CVS). CVS now operates the pharmacy and clinic businesses in our stores under a perpetual operating agreement, subject to termination in limited circumstances. See MD&A and Note 6 of the Financial Statements for more information. Discontinued operations in this Annual Report on Form 10-K refers only to our discontinued Canadian operations. Financial Highlights For information on key financial highlights and segment financial information, see the items referenced in Item 6, Selected Financial Data, MD&A, and Note 30 of the Financial Statements. Seasonality A larger share of annual revenues and earnings traditionally occurs in the fourth quarter because it includes the peak holiday sales period of November and December. Merchandise We sell a wide assortment of general merchandise and food. The majority of our general merchandise stores offer an edited food assortment, including perishables, dry grocery, dairy, and frozen items. Nearly all of our stores larger than 170,000 square feet offer a full line of food items comparable to traditional supermarkets. Our small, flexible format stores, generally smaller than 50,000 square feet, offer curated general merchandise and food assortments. Our digital channels include a wide assortment of general merchandise, including many items found in our stores, along with a complementary assortment such as additional sizes and colors sold only online. 2 A significant portion of our sales is from national brand merchandise. Approximately one-third of 2016 sales related to our owned and exclusive brands, including but not limited to the following: Owned Brands Archer Farms Art Class Ava & Viv Boots & Barkley Cat & Jack Embark Gilligan & O'Malley Knox Rose Market Pantry Merona Pillowfort Room Essentials Simply Balanced Smith & Hawken Sonia Kashuk Spritz Sutton & Dodge Threshold up & up Wine Cube Wondershop Xhilaration Exclusive Brands C9 by Champion DENIZEN from Levi's Fieldcrest Genuine Kids from OshKosh Hand Made Modern Just One You made by carter's Kid Made Modern Liz Lange for Target Mossimo Nate Berkus for Target Oh Joy! for Target We also sell merchandise through periodic exclusive design and creative partnerships and generate revenue from instore amenities such as Target Caf and Target Photo, and leased or licensed departments such as Target Optical, Starbucks, and other food service offerings. The majority of our stores also have a CVS pharmacy from which we will generate ongoing annual, inflation adjusted occupancy-related income (see MD&A and Note 6 of the Financial Statements for more information). Distribution The vast majority of merchandise is distributed to our stores through our network of 40 distribution centers. Common carriers ship general merchandise to and from our distribution centers. Vendors or 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 our distribution centers, from vendors or third party distributors, from our stores or through guest pick-up at our stores. Using our stores as fulfillment points allows improved product availability and delivery times and also reduces shipping costs. Employees At January 28, 2017, we employed approximately 323,000 full-time, part-time and seasonal employees, referred to as "team members." During the 2016 holiday sales period our employment levels peaked at approximately 373,000 team members. We offer a broad range of company-paid benefits to our team members. Eligibility for and the level of benefits vary depending on team members' full-time or part-time status, compensation level, date of hire, and/or length of service. Company-paid benefits include a 401(k) plan, medical and dental plans, disability insurance, paid vacation, tuition reimbursement, various team member assistance programs, life insurance, a pension plan (closed to new participants, with limited exceptions), and merchandise and other discounts. We believe our team member relations are good. Working Capital Our working capital needs are greater in the months leading up to the holiday sales period, which we typically finance with cash flow provided by operations and short-term borrowings. Additional details are provided in the Liquidity and Capital Resources section in MD&A. Effective inventory management is key to our ongoing success, and we use various techniques including demand forecasting and planning and various forms of replenishment management. We achieve effective inventory management by staying in-stock in core product offerings, maintaining positive vendor relationships, and carefully planning inventory levels for seasonal and apparel items to minimize markdowns. 3 Competition We compete with traditional and internet retailers, including off-price general merchandise retailers, apparel retailers, wholesale clubs, category specific retailers, drug stores, supermarkets, and other forms of retail commerce. Our ability to positively differentiate ourselves from other retailers and provide a compelling value proposition largely determines our competitive position within the retail industry. Intellectual Property Our brand image is a critical element of our business strategy. Our principal trademarks, including Target, SuperTarget and our "Bullseye Design," have been registered with the U.S. Patent and Trademark Office. We also seek to obtain and preserve intellectual property protection for our owned brands. Geographic Information Virtually all of our revenues are generated within the United States. The vast majority of our long-lived assets are located within the United States. Available Information Our 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 investors.target.com as soon as reasonably practicable after we file such material with, or furnish it to, the U.S. Securities and Exchange Commission (SEC). Our Corporate Governance Guidelines, Business Conduct Guide, Corporate Social Responsibility Report, and the charters for the committees of our Board of Directors are also available free of charge in print upon request or at investors.target.com. 4 Item 1A. Risk Factors Our business is subject to many risks. Set forth below are the material risks we face. Risks are listed in the categories where they primarily apply, but other categories may also apply. Competitive and Reputational Risks 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 members. We believe that one of the reasons our guests prefer to shop at Target, our team members choose Target as a place of employment and our vendors choose to do business with us is the reputation we have built over many years for serving our four primary constituencies: guests, team members, shareholders, and the communities in which we operate. To be successful in the future, we must continue to preserve Target's reputation. Reputational value is based in large part on perceptions, and broad access to social media makes it easy for anyone to provide public feedback that can influence perceptions of Target. It may be difficult to control negative publicity, regardless of whether it is accurate. While reputations may take decades to build, any negative incidents can quickly erode trust and confidence, particularly if they result in negative mainstream and social media publicity, governmental investigations, or litigation. Negative incidents could lead to tangible adverse effects on our business, including consumer boycotts, lost sales, loss of new store and technology development opportunities, or team member retention and recruiting difficulties. In addition, vendors and others with whom we choose to do business may affect our reputation. For example, CVS operates clinics and pharmacies within our stores, and our guests' perceptions of and experiences with CVS may impact our reputation. If we are unable to positively differentiate ourselves from other retailers, our results of operations could be adversely affected. In the past, we have been able to compete successfully by differentiating our guests' shopping experience through a careful combination of price, merchandise assortment, store environment, convenience, guest service, loyalty programs and marketing efforts. Our ability to create a personalized guest experience through the collection and use of accurate and relevant guest data is important to our ability to differentiate from other retailers. Guest perceptions regarding the cleanliness and safety of our stores, the functionality, reliability, and speed of our digital channels and fulfillment options, our in-stock levels, the effectiveness of our promotions, the attractiveness of our third party offerings, such as the clinics and pharmacies owned and operated by CVS, and other factors also affect our ability to compete. No single competitive factor is dominant, and actions by our competitors on any of these factors or the failure of our strategies could have an adverse effect on our sales, gross margins, and expenses. We sell many products under our owned and exclusive brands. These brands are an important part of our business because they differentiate us from other retailers, generally carry higher margins than equivalent national brand products and represent a significant portion of our overall sales. If we are unable to successfully develop and support our owned and exclusive brands, if one or more of these brands experiences a loss of consumer acceptance or confidence, or if we are unable to successfully protect our intellectual property rights in these brands, our sales and gross margins could be adversely affected. The continuing migration and evolution of retailing to digital channels has increased our challenges in differentiating ourselves from other retailers. In particular, consumers are able to quickly and conveniently comparison shop and determine real-time product availability using digital tools, which can lead to decisions based solely on price, the functionality of the digital tools or a combination of those and other factors. We must compete by offering a consistent and convenient shopping experience for our guests regardless of the ultimate sales channel. We must provide our guests and team members digital tools that have the right features and are reliable and easy to use. Failures to effectively execute in these efforts, actions by our competitors in response to these efforts, or failures of our vendors to manage their own channels, content and technology systems could hurt our ability to differentiate ourselves from other retailers and, as a result, have an adverse effect on sales, gross margins, and expenses. If we are unable to successfully provide a relevant and reliable experience for our guests, regardless of where our guest demand is ultimately fulfilled, our sales, results of operations and reputation could be adversely affected. Our business has evolved from an in-store experience to interaction with guests across multiple channels (in-store, online, mobile and social media, among others). Our guests are using computers, tablets, mobile phones and other 5 devices to shop in our stores and online and provide feedback and public commentary about all aspects of our business. We must anticipate and meet changing guest expectations and counteract new developments and technology investments by our competitors. Our evolving retailing efforts include implementing new technology, software and processes to be able to fulfill guest orders directly from our vendors and from any point within our system of stores and distribution centers. Providing flexible fulfillment options is complex and may not meet guest expectations for accurate order fulfillment, faster and guaranteed delivery times, and low-price or free shipping. If we are unable to attract and retain team members or contract with third parties having the specialized skills needed to support these efforts, implement improvements to our guestfacing technology in a timely manner, collect accurate, relevant, and usable guest data to support our personalization efforts, allow real-time and accurate visibility to product availability when guests are ready to purchase, quickly and efficiently fulfill our guests orders using the fulfillment and payment methods they demand, or provide a convenient and consistent experience for our guests across all sales channels, our ability to compete and our results of operations could be adversely affected. In addition, if Target.com and our other guestfacing technology systems do not appeal to our guests, reliably function as designed, integrate across all sales channels, or maintain the privacy of guest data we may experience a loss of guest confidence and lost sales, which could adversely affect our reputation and results of operations. If we fail to anticipate and respond quickly to changing consumer preferences, our sales, gross margins and profitability could suffer. A large part of our business is dependent on our ability to make trendright decisions and effectively manage our inventory in a broad range of merchandise categories, including apparel, accessories, home dcor, electronics, toys, seasonal offerings, food and other merchandise. For example, our apparel and home dcor assortment is continually evolving and in other areas of our product assortment, including food, we are supporting guest wellness goals and offering more items that appeal to local cultural and demographic tastes. Failure to obtain accurate and relevant data on guest preferences, predict changing consumer tastes, preferences, spending patterns and other lifestyle decisions, emphasize the correct categories, implement effective promotions, and personalize our offerings to our guests may result in lost sales, spoilage, and increased inventory markdowns, which would lead to a deterioration in our results of operations by hurting our sales, gross margins, and profitability. Technology Investments and Infrastructure Risks If our capital investments in technology, supply chain, new stores and remodeling existing stores do not achieve appropriate returns, our competitive position, financial condition and results of operations may be adversely affected. Our business is becoming increasingly reliant on technology investments, and the returns on these investments can be less predictable than building new stores and remodeling existing stores. We are currently making, and will continue to make, significant technology investments to provide a consistent and improved guest experience across all sales channels and improve our supply chain and inventory management systems. These technology initiatives might not provide the anticipated benefits or desired return or may provide them on a delayed schedule or at a higher cost. Our business also depends, in part, on our ability to build new stores and remodel existing stores in a manner that achieves appropriate returns on our capital investment. We compete with other retailers and businesses for suitable locations for our stores. Many of our expected new store sites are smaller and 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. Targeting the wrong technology or store opportunities, failing to make the best investments, being unable to make new concepts scalable or making an investment commitment significantly above or below our needs could result in the loss of our competitive position and adversely impact our financial condition or results of operations. A significant disruption in our computer systems and our inability to adequately maintain and update those systems could adversely affect our operations and our ability to maintain guest confidence. 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 REDcard accounts, and summarize and analyze results. We also rely on continued and unimpeded access to the Internet to use our computer systems. Our systems are subject to damage or interruption from power outages, telecommunications failures, computer viruses, malicious attacks, security breaches, and catastrophic events. If our systems are damaged 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, engage in additional 6 promotional activities to retain our guests, and encounter lost guest confidence, which could adversely affect our results of operations. We continually make significant technology investments that are intended to help maintain and update our existing computer systems. Implementing significant system changes increases the risk of computer system disruption. The potential problems and interruptions associated with implementing technology initiatives could disrupt or reduce our operational efficiency, and could negatively impact guest experience and guest confidence. Data Security and Privacy Risks If our efforts to protect the security of information about our guests, team members and vendors are unsuccessful, we may face additional costly government enforcement actions and private litigation, and our sales and reputation could suffer. We regularly receive and store information about our guests, team members, and vendors. We have programs in place to detect, contain and respond to data security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. 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 security. Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our team members, contractors, vendors, and temporary staff. Until the data breach we experienced in the fourth quarter of 2013, all incidents we encountered were insignificant. The data breach we experienced in 2013 was significant and went undetected for several weeks. Both we and our vendors had data security incidents subsequent to the 2013 data breach; however, to date these other incidents have not been material to our consolidated financial statements. Based on the prominence and notoriety of the 2013 data breach, even minor additional data security incidents could draw greater scrutiny. If we, our vendors, or other third parties with whom we do business experience additional significant data security breaches or fail to detect and appropriately respond to significant data security breaches, we could be exposed to additional government enforcement actions and private litigation. In addition, our guests could lose confidence in our ability to protect their information, which could cause them to discontinue using our REDcards or loyalty programs, or stop shopping with us altogether. Supply Chain and Third Party Risks Changes in our relationships with our vendors, changes in tax policy or trade relations, interruptions in our supply chain or increased commodity or supply chain costs could adversely affect our results of operations. We are dependent on our vendors to supply merchandise to our distribution centers, stores and guests. As we continue to add capabilities, our fulfillment network becomes increasingly complex and operating it becomes more challenging. If our fulfillment network does not operate properly or if a vendor fails to deliver on its commitments, we could experience merchandise out-of-stocks, delivery delays or increased delivery costs, which could lead to lost sales and decreased guest confidence, and adversely affect our results of operations. A large portion of our merchandise is sourced, directly or indirectly, from outside the United States, with China as our single largest source. The results of the recent United States elections may signal a change in trade policy between the United States and other countries. Because a large portion of our merchandise is sourced, directly or indirectly, from outside the United States, major changes in tax policy or trade relations, such as the disallowance of tax deductions for imported merchandise or the imposition of additional tariffs or duties on imported products, could adversely affect our business, results of operations, effective income tax rate, liquidity and net income. Political or financial instability, currency fluctuations, changes in trade policy, trade restrictions, tariffs or duties, the outbreak of pandemics, 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. There have been periodic labor disputes impacting the United States ports that have caused us to make alternative arrangements to continue the flow of inventory, and if these types of disputes recur, worsen, or occur in other countries through which we source products, it may have a material impact on our costs or inventory supply. Changes in the costs of procuring commodities used in our merchandise or the costs related to our supply chain, including vendor costs, labor, fuel, tariffs, duties, currency exchange rates, and supply chain transparency initiatives, could have an 7 adverse effect on gross margins, expenses, and results of operations. Changes in our relationships with our vendors also have the potential to increase our expenses and adversely affect results of operations. A disruption in relationships with third party service providers could adversely affect our operations. We rely on third parties to support our business, including portions of our technology development and support, our digital platforms and fulfillment operations, credit and debit card transaction processing, extensions of credit for our 5% REDcard Rewards loyalty program, the clinics and pharmacies operated by CVS within our stores, the infrastructure supporting our guest contact centers, and aspects of our food offerings. If we are unable to contract with third parties having the specialized skills needed to support those strategies or integrate their products and services with our business, if we fail to properly manage those third parties, if they fail to meet our performance standards and expectations, including with respect to data security, then our reputation, sales, and results of operations could be adversely affected. In addition, we could face increased costs associated with finding replacement providers or hiring and retaining team members to provide these services in-house. An example of our reliance on third parties is our relationship with CVS. If our guests do not react favorably to CVS's operations or if our relationship with CVS is ineffective, our ability to discontinue the relationship is limited and our results of operations may be adversely affected. In addition, if we wish to have clinics and pharmacies in any new stores, those clinics and pharmacies must be owned and operated by CVS, which limits our flexibility in designing and operating new stores and new store concepts. Legal, Regulatory, Global and Other External Risks Our earnings are highly susceptible to the state of macroeconomic conditions and consumer confidence in the United States. Virtually all of our sales are in the United States, making our results highly dependent on United States consumer confidence and the health of the United States economy. In addition, a significant portion of our total sales is derived from stores located in five states: California, Texas, Florida, Minnesota and Illinois, resulting in further dependence on local economic conditions in these states. Deterioration in macroeconomic conditions or consumer confidence could negatively affect our business in many ways, including slowing sales growth, reducing overall sales, and reducing gross margins. These same considerations impact the success of our credit card program. Although we no longer own a consumer credit card receivables portfolio, we share in the economic performance of the credit card program with TD, which owns the receivables generated by our proprietary credit cards. Deterioration in macroeconomic conditions could adversely affect the volume of new credit accounts, the amount of credit card program balances and the ability of credit card holders to pay their balances. These conditions could result in us receiving lower profitsharing payments. Uncharacteristic or significant weather conditions, alone or together with natural disasters, could adversely affect our operations. Uncharacteristic or significant weather conditions can affect consumer shopping patterns, particularly in apparel and seasonal items, which could lead to lost sales or greater than expected markdowns and adversely affect our shortterm results of operations. In addition, our three largest states by total sales are California, Texas and Florida, areas where natural disasters are more prevalent. Natural disasters in those states or in other areas where our sales are concentrated could result in significant physical damage to or closure of one or more of our stores, distribution centers or key vendors, and cause delays in the distribution of merchandise from our vendors to our distribution centers, stores, and directly to guests, which could adversely affect our results of operations by increasing our costs and lowering our sales. 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 affected. With over 300,000 team members, our workforce costs represent our largest operating expense, and our business and regulatory compliance is dependent on our ability to attract, train, and retain the appropriate mix of qualified team members, contractors, and temporary staffing and effectively organize and manage those resources as our business and strategic priorities change. Many team members are in entry-level or part-time positions with historically high turnover rates. Our ability to meet our changing labor needs while controlling our costs is subject to external factors such as labor laws and regulations, unemployment levels, prevailing wage rates, collective bargaining efforts, health 8 care and other benefit costs, changing demographics, and our reputation and relevance within the labor market. If we are unable to attract and retain adequate numbers and an appropriate mix of qualified team members, contractors and temporary staffing, our operations, guest service levels, support functions, and competitiveness could suffer. Those factors, together with increasing wage and benefit costs, could adversely affect our results of operations. We are periodically subject to labor organizing efforts. If we become subject to one or more collective bargaining agreements in the future, it could adversely affect our labor costs and how we operate our business. We maintain a headquarters location in India and sourcing offices in China where there has generally been greater political, financial, environmental and health instability than the United States. An extended disruption of our operations in India or offices in China could adversely affect certain operations supporting stability and maintenance of our digital channels, information technology development, and sourcing operations. Failure to address product safety and sourcing concerns could adversely affect our sales and results of operations. If our merchandise offerings do not meet applicable safety standards or Target's or our guests' expectations regarding safety, supply chain transparency and integrity of sources of supply, we could experience lost sales and increased costs and be exposed to legal and reputational risk. All of our vendors must comply with applicable product safety laws, and we are dependent on them to ensure that the products we buy comply with all safety standards. Events that give rise to actual, potential or perceived product safety concerns, including food or drug contamination, could expose us to government enforcement action or private litigation and result in costly product recalls and other liabilities. All of our vendors must also comply with our Standards of Vendor Engagement, which cover a variety of expectations across multiple areas of social compliance, including supply chain transparency and sources of supply. We have a social compliance audit process, but we are also dependent on our vendors to ensure that the products we buy comply with our standards. Negative guest perceptions regarding the safety of the products we sell and events that give rise to actual, potential or perceived social compliance concerns could hurt our reputation and result in lost sales. For example, we recently terminated a relationship with a vendor that supplied us with cotton sheets that were represented to be 100 percent Egyptian cotton after we discovered that the vendor substituted non-Egyptian cotton. If that event or if similar events in the future cause our guests to seek alternative sources for their needs, we could lose sales and it may be difficult and costly for us to regain the confidence of our guests. Our failure to comply with federal, state, local, and international laws, or changes in these laws could increase our costs, reduce our margins, and lower our sales. Our business is subject to a wide array of laws and regulations in the United States and other countries in which we operate. Significant workforce-related legislative changes could increase our expenses and adversely affect our operations. Examples of possible workforce-related legislative changes include changes to an employer's obligation to recognize collective bargaining units, the process by which collective bargaining agreements are negotiated or imposed, minimum wage requirements, advance scheduling notice requirements, and health care mandates. In addition, changes in the regulatory environment affecting privacy and information security, product safety, payment methods and related fees, responsible sourcing, supply chain transparency, or environmental protection, among others, could cause our expenses to increase without an ability to pass through any increased expenses through higher prices. In addition, if we fail to comply with other applicable laws and regulations, including wage and hour laws, the Foreign Corrupt Practices Act and local anti-bribery laws, we could be subject to legal risk, including government enforcement action and class action civil litigation, which could adversely affect our results of operations by increasing our costs, reducing our margins, and lowering our sales. Financial Risks Changes in our effective income tax rate could adversely affect our business, results of operations, liquidity, and net income. A number of factors influence our effective income tax rate, including changes in tax law, tax treaties, interpretation of existing laws, and our ability to sustain our reporting positions on examination. Changes in any of those factors could change our effective tax rate, which could adversely affect our net income. In addition, our operations outside of the United States may cause greater volatility in our effective tax rate. 9 If we are unable to access the capital markets or obtain bank credit, our financial position, liquidity, and results of operations could suffer. We are dependent on a stable, liquid, and well-functioning financial system to fund our operations and capital investments. In particular, we have historically relied on the public debt markets to fund portions of our capital investments and the commercial paper market and bank credit facilities to fund seasonal needs for working capital. Our continued access to these markets depends on multiple factors including the condition of debt capital markets, our operating performance, and maintaining strong credit ratings. If rating agencies lower our credit ratings, it could adversely impact our ability to access the debt markets, our cost of funds, and other terms for new debt issuances. Each of the credit rating agencies reviews its rating periodically, and there is no guarantee our current credit rating will remain the same. In addition, we use a variety of derivative products to manage our exposure to market risk, principally interest rate and equity price fluctuations. Disruptions or turmoil in the financial markets could reduce our ability to meet our capital requirements or fund our working capital needs, and lead to losses on derivative positions resulting from counterparty failures, which could adversely affect our financial position and results of operations. Item 1B. Unresolved Staff Comments Not applicable. 10 Item 2. Properties Stores at January 28, 2017 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Stores 22 3 46 9 273 41 20 3 1 122 51 6 6 92 31 20 18 13 16 5 39 40 55 75 6 35 Retail Sq. Ft. (in thousands) 3,150 504 6,136 1,165 35,575 6,215 2,672 440 179 17,135 6,916 971 664 12,361 4,174 2,835 2,473 1,551 2,246 630 4,952 5,188 6,603 10,634 743 4,609 Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Total Stores 7 14 17 9 46 10 75 49 4 61 15 19 69 4 19 5 31 147 13 58 37 6 37 2 Retail Sq. Ft. (in thousands) 780 2,006 2,230 1,148 5,929 1,185 9,961 6,496 554 7,659 2,168 2,280 8,741 517 2,359 580 3,990 20,726 1,953 7,689 4,328 755 4,560 187 1,802 239,502 Stores and Distribution Centers at January 28, 2017 Stores 1,535 107 160 1,802 Owned Leased Owned buildings on leased land Total (a) Distribution Centers (a) 33 7 40 The 40 distribution centers have a total of 51,831 thousand square feet. We own our corporate headquarters buildings located in and around Minneapolis, Minnesota, and we lease and own additional office space elsewhere in the United States. We also lease office space in 12 countries for various support functions. Our properties are in good condition, well maintained, and suitable to carry on our business. For additional information on our properties, see the Capital Expenditures section in MD&A and Notes 14 and 22 of the Financial Statements. 11 Item 3. Legal Proceedings The following proceedings are being reported pursuant to Item 103 of Regulation S-K: Federal Securities Law Class Actions On May 17, 2016 and May 24, 2016, Target Corporation and certain present and former officers were named as defendants in two purported federal securities law class actions filed in the United States District Court for the District of Minnesota. The actions subsequently were consolidated under the caption In re: Target Corporation Securities Litigation, Case No. 0:16-cv-01315-JNE-BRT. The plaintiffs filed a Consolidated Amended Class Action Complaint (Consolidated Complaint) on November 14, 2016, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 relating to certain prior disclosures of Target about its expansion of retail operations into Canada (Canada Disclosure).Target, its former chief executive officer, its present chief operating officer, and the former president of Target Canada are named as defendants in the Consolidated Complaint. The plaintiff seeks to represent a class consisting of all purchasers of Target common stock between March 20, 2013 and August 4, 2014. The plaintiff seeks damages and other relief, including attorneys' fees, based on allegations that the defendants misled investors about the performance and prospects of Target Canada and that such conduct affected the value of Target common stock. On February 10, 2017, Target and the other defendants moved to dismiss the Consolidated Complaint. That motion has not yet been heard or decided. Target intends to vigorously defend this consolidated action. ERISA Class Actions On July 12, 2016 and July 15, 2016, Target Corporation, the Plan Investment Committee and Target's current chief operating officer were named as defendants in two purported Employee Retirement Income Security Act of 1974 (ERISA) class actions filed in the United States District Court for the District of Minnesota. The actions subsequently were consolidated under the caption In re: Target Corporation ERISA Litigation, Case No. 0:16cv-02400-JNE-BRT. The plaintiffs filed an Amended Class Action Complaint (Amended Complaint) on December 14, 2016, alleging violations of Sections 404 and 405 of ERISA relating to the Canada Disclosure. Target, the Plan Investment Committee, and seven present or former officers are named as defendants in the Amended Complaint. The plaintiffs seek to represent a class consisting of all persons who were participants in or beneficiaries of the Target Corporation 401(k) Plan or the Target Corporation Ventures 401(k) Plan (collectively, the Plans) at any time between February 27, 2013 and May 19, 2014 and whose Plan accounts included investments in Target stock. The plaintiffs seek damages, an injunction and other unspecified equitable relief, and attorneys' fees, expenses, and costs, based on allegations that the defendants breached their fiduciary duties by failing to take action to prevent Plan participants from continuing to purchase Target stock during the class period at prices that allegedly were artificially inflated. On February 24, 2017, Target and the other defendants moved to dismiss the Amended Complaint. That motion has not yet been heard or decided. Target intends to vigorously defend this consolidated action. 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