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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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(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 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM
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COMMISSION FILE NUMBER 1-6049
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DAYTON HUDSON CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0215170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 NICOLLET MALL, MINNEAPOLIS, 55402-2055
MINNESOTA
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: 612/370-6948
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock, par value $.1667 per New York Stock Exchange
share Pacific Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
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 ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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. / /
Aggregate market value of the voting stock held by non-affiliates of the
Registrant on March 20, 1998 was $19,584,392,909, based on the closing price of
$42.53 per share of Common Stock as reported on the New York Stock
Exchange--Composite Index and $2,636.25 per share of Series B ESOP Convertible
Preferred Stock as determined by Duff & Phelps. (Excluded from this figure is
the voting stock held by Registrant's Directors and Executive Officers.)
Indicate the number of shares outstanding of each of Registrant's classes of
common stock, as of the latest practicable date. March 20, 1998: 438,699,386
shares of common stock, par value $.1667.
All references to Common Stock in this Form 10-K reflect the Registrant's
April 1998 two-for-one Common Stock split.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of Registrant's 1997 Annual Report to Shareholders are
incorporated into Parts I and II.
2. Portions of Registrant's Proxy Statement dated April 14, 1998 are
incorporated into Part III.
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PART I
ITEM 1. BUSINESS.
The first paragraph of Fourth Quarter Results, Page 20; Analysis of
Financial Condition, Page 21; Performance Objectives, Page 22; Guest Credit,
Page 23; Business Segment Comparisons, excluding years 1992-1994, Page 25; first
textual paragraph of Summary of Accounting Policies--Organization, Page 26;
Quarterly Results (Unaudited), Page 35; the information relating to store
locations on Page 16 and the information relating to number of employees on Page
37, excluding years 1992-1994, of Registrant's 1997 Annual Report to
Shareholders are incorporated herein by reference. Registrant was incorporated
in Minnesota in 1902.
ITEM 2. PROPERTIES.
Leases, Page 31 and the list of store locations on Page 16 of Registrant's
1997 Annual Report to Shareholders are incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS.
Commitments and Contingencies, Page 29 of Registrant's 1997 Annual Report to
Shareholders is incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
Not Applicable.
1
ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT.
The executive officers of the Registrant as of April 1, 1998 and their
positions and ages, are as follows:
NAME TITLE AGE
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Robert J. Ulrich.............................. Chairman, Chief Executive Officer, Chairman of 54
the Executive Committee and Director of
Registrant; Chairman and Chief Executive
Officer of Target (a division of Registrant)
Kenneth B. Woodrow............................ President of Target 53
Larry V. Gilpin............................... Executive Vice President Team, Guest and 54
Community Relations of Target
Robert G. McMahon............................. Senior Vice President, Property Development of 49
Target
John E. Pellegrene............................ Executive Vice President, Marketing of Target 61
Gregg W. Steinhafel........................... Executive Vice President, Merchandising of 43
Target
Bart Butzer................................... President of Mervyn's (a subsidiary of 42
Registrant)
Shannon M. Buscho............................. Executive Vice President, Stores of Mervyn's 46
Linda L. Ahlers............................... President of the Department Store Division (a 47
division of Registrant)
James T. Hale................................. Senior Vice President, General Counsel and 57
Secretary of Registrant
Douglas A. Scovanner.......................... Senior Vice President and Chief Financial 42
Officer of Registrant
Vivian M. Stephenson.......................... Senior Vice President and Chief Information 60
Officer of Registrant
Gerald L. Storch.............................. President, Credit and Senior Vice President, 41
Strategic Business Development of Registrant
JoAnn Bogdan.................................. Controller and Chief Accounting Officer of 45
Registrant
Each officer is elected by and serves at the pleasure of the Board of
Directors. There is no family relationship between any of the officers named nor
is there any arrangement or understanding pursuant to which any person was
selected as an officer. The period of service of each officer in the positions
listed and other business experience as of April 1, 1998 is set forth below.
ROBERT J. ULRICH Chairman of the Board, Chief Executive Officer, Chairman of
the Executive Committee and Director of Registrant since 1994. Chairman and
Chief Executive Officer of Target since 1987.
KENNETH B. WOODROW President of Target since 1994, Vice Chairman of Target
from 1993 to 1994 and Executive Vice President of Target from 1989 to 1993.
2
LARRY V. GILPIN Executive Vice President of Target since 1995 and Senior
Vice President of Target from 1981 to 1995.
ROBERT G. MCMAHON Senior Vice President of Target since 1991 and Vice
President of Target from 1990 to 1991.
JOHN E. PELLEGRENE Executive Vice President of Target since 1995 and Senior
Vice President of Target from 1988 to 1995.
GREGG W. STEINHAFEL Executive Vice President of Target since 1994 and Senior
Vice President and General Merchandise Manager of Target from 1987 to 1994.
BART BUTZER President of Mervyn's since March 1997 and Regional Senior Vice
President of Target from 1991 to 1997.
SHANNON M. BUSCHO Executive Vice President, Stores of Mervyn's since
December 1996 and Senior Vice President, Stores of Mervyn's from January 1996 to
December 1996. She has held various management positions at Mervyn's for over
five years and was first elected a Vice President in 1994.
LINDA L. AHLERS President of the Department Store Division since February
1996 and Executive Vice President, Merchandising of the Department Store
Division from August 1995 to February 1996. Senior Vice President of Target from
1989 to 1995.
JAMES T. HALE Senior Vice President, Secretary and General Counsel of
Registrant since 1981.
DOUGLAS A. SCOVANNER Senior Vice President and Chief Financial Officer of
Registrant since 1994. Treasurer of Registrant in 1994. Senior Vice President,
Finance of Fleming Companies, Inc. (a food wholesaler) from 1992 to 1994. Vice
President and Treasurer of Coca-Cola Enterprises, Inc. (a soft drink bottler)
from 1986 to 1992.
VIVIAN M. STEPHENSON Senior Vice President of Registrant since 1995. Senior
Vice President, MIS of Mervyn's from 1994 to 1995 and Vice President, MIS of
Mervyn's from 1990 to 1994.
GERALD L. STORCH President, Credit and Senior Vice President, Strategic
Business Development of Registrant since May 1997. Senior Vice President of
Registrant since 1993. Principal with McKinsey & Company (a consulting firm)
from 1982 to 1993.
JOANN BOGDAN Controller and Chief Accounting Officer of Registrant since
1993. Assistant Controller of Registrant from 1988 to 1993.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Dividends Declared Per Share and Common Stock price, Page 35 of Registrant's
1997 Annual Report to Shareholders are incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The Data on years 1993-1997 in the Summary Financial and Operating Data
(excluding 1992 and Other Data), Page 37.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Management's Discussion and Analysis, Pages 17-24 and the second textual
paragraph of Post-retirement Health Care Benefits, Page 34 of Registrant's 1997
Annual Report to Shareholders are incorporated herein by reference.
3
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pages 25-35 and 37 (excluding years 1992-1994 on Page 25 and 1992 and Other
Data in the Summary Financial and Operating Data on Page 37) and the Report of
Independent Auditors, Page 36 of Registrant's 1997 Annual Report to Shareholders
are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Election of Directors, Pages 6-11 of Registrant's Proxy Statement dated
April 14, 1998, is incorporated herein by reference. See also Item X of Part I
hereof.
ITEM 11. EXECUTIVE COMPENSATION.
Executive Compensation, Pages 12-17, Report of the Compensation Committee on
Executive Compensation, pages 18-22 and Director Compensation, Page 10 of
Registrant's Proxy Statement dated April 14, 1998, are incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
How many shares do the Corporation's directors and officers own? Page 4 and
Who are the largest owners of the Corporation's shares? Page 5 of Registrant's
Proxy Statement dated April 14, 1998, is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not Applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
a) FINANCIAL STATEMENTS:
Consolidated Results of Operations for the Years Ended January 31, 1998,
February 1, 1997 and February 3, 1996.
Consolidated Statements of Financial Position at January 31, 1998 and
February 1, 1997.
Consolidated Statements of Cash Flows for the Years Ended January 31, 1998,
February 1, 1997 and February 3, 1996.
Consolidated Statements of Shareholders' Investment for the Years Ended
January 31, 1998, February 1, 1997 and February 3, 1996.
Information which is an integral part of the financial statements: Notes to
Consolidated Financial Statements on Pages 25 - 27, 29, 31 and 33-35
(excluding years 1992-1994 on Page 25) and the Report of Independent
Auditors on Page 36 in Registrant's 1997 Annual Report to Shareholders.
4
The Registrant, through its special purpose subsidiary, Dayton Hudson
Receivables Corporation ("DHRC") entered into a securitization transaction under
which it transfers, on an ongoing basis, substantially all of its credit card
receivables to a trust. Separate financial information is filed for DHRC in its
separate Annual Report on Form 10-K.
b) REPORTS ON FORM 8-K
Form 8-K dated January 8, 1998, reporting December 1997 sales results.
c) EXHIBITS
(2) Not applicable
(3)A. Restated Articles of Incorporation (as amended July 17, 1996). Incorporated by
reference to Exhibit (3)A. to Registrant's Form 10-Q Report for the quarter
ended August 3, 1996.
B. By-Laws (as amended through September 13, 1995). Incorporated by reference to
Exhibit (3)B. to Registrant's Form 10-K Report for the year ended February 3,
1996.
(4)A. Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock, as amended. Incorporated by reference to Exhibit
A to Exhibit 1 to Registrant's Form 8-K Report dated September 12, 1996.
B. Certificate of Designation, Preference and Rights of Series B ESOP Convertible
Preferred Stock. Incorporated by reference to Exhibit (3)A. to Registrant's
Form 10-K Report for the year ended January 30, 1993.
C. Instruments defining the rights of security holders, including indentures.
Registrant agrees
to furnish the Commission on request copies of instruments with respect to
long-term
debt.
(9) Not applicable
(10)A. Executive Incentive Plan (PTOC&EVA) (a)
B. Director Stock Option Plan of 1995 (b)
C. Executive Incentive Plan (Personal Score) (c)
D. Excess Benefit Plan (d)
E. Supplemental Pension Plan I (e)
F. Executive Long-Term Incentive Plan of 1981, as amended and restated (f)
G. Supplemental Pension Plan II (g)
H. Supplemental Pension Plan III (h)
I. Deferred Compensation Plan Senior Management Group (i)
J. Deferred Compensation Plan Directors (j)
K. Income Continuance Policy (k)
L. SMG Income Continuance Policy (l)
M. SMG Executive Deferred Compensation Plan (m)
N. Director Deferred Compensation Plan (n)
(11) Not applicable
(12) Statements re Computations of Ratios
(13) 1997 Annual Report to Shareholders (only those portions specifically
incorporated by
reference herein shall be deemed filed with the Commission)
(16) Not applicable
(18) Not applicable
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(21) List of Subsidiaries
(22) Not applicable
(23) Consent of Independent Auditors
(24) Powers of Attorney
(27)A. Financial Data Schedules for the fiscal year ended January 31, 1998.
B. Restated Financial Data Schedules for the periods ended May 3, 1997, August 2,
1997 and November 1, 1997.
C. Restated Financial Data Schedules for the fiscal years ended February 3, 1996
and February 1, 1997 and for the periods ended May 4, 1996, April 3, 1996 and
November 2, 1996.
(99)A. Registrant's Form 11-K Report
B. Registrant's Proxy Statement dated April 14, 1998 (only those portions
specifically incorporated by reference shall be deemed filed with the
Commission)(o)
C. Cautionary Statements Relating to Forward-Looking Information
Copies of exhibits will be furnished upon written request and payment of
Registrant's reasonable expenses in furnishing the exhibits.
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(a) Incorporated by reference to Exhibit A to Registrant's Proxy Statement dated
April 19, 1995.
(b) Incorporated by reference to Exhibit B to Registrant's Proxy Statement dated
April 19, 1995.
(c) Incorporated by reference to Exhibit (10)C. to Registrant's Form 10-K Report
for the year ended January 29, 1994.
(d) Incorporated by reference to Exhibit (10)D. to Registrant's Form 10-K Report
for the year ended January 30, 1993 (the "1992 10-K").
(e) Incorporated by reference to Exhibit (10)E. to Registrant's Form 10-K Report
for the year ended February 1, 1997.
(f) Incorporated by reference to Exhibit (10)B. to Registrant's Form 10-Q Report
for the quarter ended October 29, 1994.
(g) Incorporated by reference to Exhibit (10)G. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(h) Incorporated by reference to Exhibit (10)H. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(i) Incorporated by reference to Exhibit (10)I. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(j) Incorporated by reference to Exhibit (10)J. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(k) Incorporated by reference to Exhibit (10)A. to Registrant's 1992 10-K.
(l) Incorporated by reference to Exhibit (10)B. to Registrant's 1992 10-K.
(m) Incorporated by reference to Exhibit (10)M. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(n) Incorporated by reference to Exhibit (10)N. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(o) Incorporated by reference to Registrant's Proxy Statement dated April 14,
1998 (only those portions specifically incorporated by reference shall be
deemed filed with the Commission).
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
DAYTON HUDSON CORPORATION
By: /s/ DOUGLAS A. SCOVANNER
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Douglas A. Scovanner
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
Dated: April 15, 1998 OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, the
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ BOB ULRICH
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Robert J. Ulrich
CHAIRMAN OF THE BOARD AND CHIEF
Dated: April 15, 1998 EXECUTIVE OFFICER
/s/ DOUGLAS A. SCOVANNER
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Douglas A. Scovanner
SENIOR VICE PRESIDENT AND CHIEF
Dated: April 15, 1998 FINANCIAL OFFICER
/s/ J.A. BOGDAN
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JoAnn Bogdan
CONTROLLER AND CHIEF ACCOUNTING
Dated: April 15, 1998 OFFICER
LIVIO D. DESIMONE SUSAN A. MCLAUGHLIN
ROGER A. ENRICO ANNE M. MULCAHY
WILLIAM W. GEORGE STEPHEN W. SANGER
MICHELE J. HOOPER JAMES A. SOLOMON D. TRUJILLO Directors
JOHNSON ROBERT J. ULRICH
RICHARD M. KOVACEVICH
Douglas A. Scovanner, by signing his name hereto, does hereby sign this
document pursuant to powers of attorney duly executed by the Directors named,
filed with the Securities and Exchange Commission on behalf of such Directors,
all in the capacities and on the date stated, such persons being all of the
Directors of the Registrant.
By: /s/ DOUGLAS A. SCOVANNER
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Douglas A. Scovanner
Dated: April 15, 1998 ATTORNEY-IN-FACT
7