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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 30, 1999
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 Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific 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 19, 1999 was $31,308,051,019, based on the closing price of
$67.75 per share of Common Stock as reported on the New York Stock
Exchange--Composite Index and $4,211.25 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 19, 1999: 442,682,048
shares of common stock, par value $.1667.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of Registrant's 1998 Annual Report to Shareholders are
incorporated into Parts I and II.
2. Portions of Registrant's Proxy Statement dated April 12, 1999 are
incorporated into Part III.
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PART I
ITEM 1. BUSINESS.
The first paragraph of Fourth Quarter Results, Page 21; Analysis of
Financial Condition, Page 22; Performance Objectives, Page 23; Guest Credit,
Page 24; Business Segment Comparisons, excluding years 1993-1995, Page 25; first
textual paragraph of Summary of Accounting Policies--Organization, Page 26;
Quarterly Results (Unaudited), Page 36; the information relating to store
locations on Page 16 and the information relating to number of employees on Page
38, excluding years 1993-1995, of Registrant's 1998 Annual Report to
Shareholders are incorporated herein by reference. Registrant was incorporated
in Minnesota in 1902.
ITEM 2. PROPERTIES.
Leases, Pages 30-31 and the list of store locations on Page 16 of
Registrant's 1998 Annual Report to Shareholders are incorporated herein by
reference.
ITEM 3. LEGAL PROCEEDINGS.
Commitments and Contingencies, Page 29 of Registrant's 1998 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, 1999 and their
positions and ages, are as follows:
NAME TITLE AGE
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Robert J. Ulrich.............................. Chairman, Chief Executive Officer, Chairman of 55
the Executive Committee and Director of
Registrant; Chairman and Chief Executive
Officer of Target (a division of Registrant)
Kenneth B. Woodrow............................ President of Target 54
Larry V. Gilpin............................... Executive Vice President Team, Guest and 55
Community Relations of Target
Robert G. McMahon............................. Senior Vice President, Property Development of 50
Target
John E. Pellegrene............................ Executive Vice President, Marketing of Target 62
Gregg W. Steinhafel........................... Executive Vice President, Merchandising of 44
Target
Bart Butzer................................... President of Mervyn's (a subsidiary of 43
Registrant)
Linda L. Ahlers............................... President of the Department Store Division (a 48
division of Registrant)
James T. Hale................................. Senior Vice President, General Counsel and 58
Secretary of Registrant
Douglas A. Scovanner.......................... Senior Vice President and Chief Financial 43
Officer of Registrant
Vivian M. Stephenson.......................... Executive Vice President and Chief Information 61
Officer of Registrant
Gerald L. Storch.............................. President, Credit and New Businesses of 42
Registrant
JoAnn Bogdan.................................. Controller and Chief Accounting Officer of 46
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, 1999 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.
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.
2
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 1997 and Regional Senior Vice
President of Target from 1991 to 1997.
LINDA L. AHLERS President of the Department Store Division since 1996 and
Executive Vice President, Merchandising of the Department Store Division from
1995 to 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.
VIVIAN M. STEPHENSON Executive Vice President of Registrant since 1998 and
Senior Vice President of Registrant from 1995 to 1998. 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 New Businesses of Registrant since
1998. President, Credit and Senior Vice President, Strategic Business
Development of Registrant from 1997 to 1998. 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 36 of Registrant's
1998 Annual Report to Shareholders are incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The Data on years 1994-1998 in the Summary Financial and Operating Data
(excluding 1993 and Other Data), Page 38 of Registrant's 1998 Annual Report to
Shareholders is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Management's Discussion and Analysis, Pages 17-24 and the last textual
paragraph of Pension and Postretirement Health Care Benefits, Page 35 of
Registrant's 1998 Annual Report to Shareholders are incorporated herein by
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market risk exposure of market risk sensitive instruments is not material.
3
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pages 25-36 and 38 (excluding years 1993-1995 on Page 25 and 1993 and Other
Data in the Summary Financial and Operating Data on Page 38) and the Report of
Independent Auditors, Page 37 of Registrant's 1998 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 5-10 of Registrant's Proxy Statement dated
April 12, 1999, is incorporated herein by reference. See also Item X of Part I
hereof.
ITEM 11. EXECUTIVE COMPENSATION.
Executive Compensation, Pages 13-18, Report of the Compensation Committee on
Executive Compensation, pages 19-23 and Director Compensation, Page 8 of
Registrant's Proxy Statement dated April 12, 1999, are incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
"Largest Owners of the Corporation's Stock", Page 12 and "Stock Ownership of
Directors and Officers", Page 11 of Registrant's Proxy Statement dated April 12,
1999, 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 30, 1999,
January 31, 1998, and February 1, 1997.
Consolidated Statements of Financial Position at January 30, 1999, and
January 31, 1998.
Consolidated Statements of Cash Flows for the Years Ended January 30, 1999,
January 31, 1998, and February 1, 1997.
Consolidated Statements of Shareholders' Investment for the Years Ended
January 30, 1999, January 31, 1998, and February 1, 1997.
Information which is an integral part of the financial statements: Notes to
Consolidated Financial Statements on Pages 25-31 and 33-36 (excluding years
1993-1995 on Page 25) and the Report of Independent Auditors on Page 37 in
Registrant's 1998 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
None.
c) EXHIBITS
(2) Not applicable
(3)A. Restated Articles of Incorporation (as amended April 30, 1998). Incorporated by
reference to Exhibit (3)A. to Registrant's Form 10-Q Report for the quarter
ended May 2, 1998.
B. By-Laws (as amended through November 11, 1998). Incorporated by reference to
Exhibit (3)(ii). to Registrant's Form 10-Q Report for the quarter ended October
31, 1998.
(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 through
January 13, 1999
G. Supplemental Pension Plan II (f)
H. Supplemental Pension Plan III (g)
I. Deferred Compensation Plan Senior Management Group (h)
J. Deferred Compensation Plan Directors (i)
K. Income Continuance Policy, as amended through January 13, 1999
L. SMG Income Continuance Policy, as amended through January 13, 1999
M. SMG Executive Deferred Compensation Plan (j)
N. Director Deferred Compensation Plan (k)
(11) Not applicable
(12) Statements re Computations of Ratios
(13) 1998 Annual Report to Shareholders (only those portions specifically
incorporated by
reference herein shall be deemed filed with the Commission)
5
(16) Not applicable
(18) Not applicable
(21) List of Subsidiaries
(22) Not applicable
(23) Consent of Independent Auditors
(24) Powers of Attorney
(27) Financial Data Schedule for the fiscal year ended January 30, 1999.
(99)A. Registrant's Form 11-K Report
B. Registrant's Proxy Statement dated April 12, 1999 (only those portions
specifically incorporated by reference shall be deemed filed with the
Commission)(l)
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.
(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)G. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(g) Incorporated by reference to Exhibit (10)H. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(h) Incorporated by reference to Exhibit (10)I. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(i) Incorporated by reference to Exhibit (10)J. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(j) Incorporated by reference to Exhibit (10)M. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(k) Incorporated by reference to Exhibit (10)N. to the Registrant's Form 10-K
Report for the year ended February 1, 1997.
(l) Incorporated by reference to Registrant's Proxy Statement dated April 12,
1999.
6
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 12, 1999 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 12, 1999 EXECUTIVE OFFICER
/s/ DOUGLAS A. SCOVANNER
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Douglas A. Scovanner
SENIOR VICE PRESIDENT AND CHIEF
Dated: April 12, 1999 FINANCIAL OFFICER
/s/ J.A. BOGDAN
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JoAnn Bogdan
CONTROLLER AND CHIEF ACCOUNTING
Dated: April 12, 1999 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 12, 1999 ATTORNEY-IN-FACT
7
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EXHIBITS
FILED WITH
DAYTON HUDSON CORPORATION
FORM 10-K
FOR THE YEAR ENDED JANUARY 30, 1999
(10)F. Executive Long-Term Incentive Plan of 1981, as amended and restated through January
13, 1999
(10)K. Income Continuance Policy, as amended through January 13, 1999
(10)L. SMG Income Continuance Policy, as amended through January 13, 1999
(12) Statements re Computations of Ratios
(13) 1998 Annual Report to Shareholders
(21) List of Subsidiaries
(23) Consent of Independent Auditors
(24) Powers of Attorney
(27) Financial Data Schedule for the fiscal year ended January 30, 1999
(99)A. Registrant's Form 11-K Report
C. Cautionary Statements Relating to Forward-Looking Information
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