Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TARGET CORP | tgt_formx8-kx01x15x2015.htm |
| EX-99.A - TARGET CORPORATION'S NEWS RELEASE DATED JANUARY 15, 2015 - TARGET CORP | exhibit99atargetcorporatio.htm |
Exhibit (99)B
Unaudited Pro Forma Consolidated Financial Information
The following unaudited pro forma consolidated financial statements are based on the consolidated financial statements of Target, and are adjusted to give effect to the the events described in the Form 8-K to which this exhibit is attached as if those events occurred at an earlier date. As specified in Article 11 of Regulation S-X, the unaudited pro forma Consolidated Statements of Operations for fiscal years 2013, 2012 and 2011 and the nine months ended November 1, 2014 are adjusted to reflect such transactions as if they occurred on January 30, 2011. The unaudited pro forma Consolidated Statement of Financial Position is adjusted to reflect such events as if they occurred on November 1, 2014, the last day of the most recently filed period.
The unaudited pro forma consolidated financial statements are provided for illustrative purposes only and, therefore, are not necessarily indicative of the operating results or financial position that might have been achieved had the events described in the Form 8-K to which this exhibit is attached occurred as of an earlier date, nor are they indicative of operating results and financial position that may occur in the future. The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and notes thereto in the Annual Report on Form 10-K for the fiscal year ended February 1, 2014 and the Quarterly Report on Form 10-Q for the quarter ended November 1, 2014.
Consolidated Pro Forma Statement of Financial Position
November 1, 2014 | |||||||||||
(millions) (unaudited) | Historical Target Consolidated | Pro Forma Adjustments | (a) | Pro Forma Target | |||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 780 | $ | (62 | ) | $ | 718 | ||||
Inventory | 11,066 | (603 | ) | 10,463 | |||||||
Other current assets | 1,992 | 1,301 | (b) | 3,293 | |||||||
Total current assets | 13,838 | 636 | 14,474 | ||||||||
Property and equipment, net | 30,886 | (4,846 | ) | 26,040 | |||||||
Other noncurrent assets | 1,737 | (489 | ) | (c) | 1,248 | ||||||
Total assets | $ | 46,461 | $ | (4,699 | ) | $ | 41,762 | ||||
Liabilities and shareholders’ investment | |||||||||||
Accounts payable | $ | 9,229 | $ | (390 | ) | $ | 8,839 | ||||
Accrued and other current liabilities | 3,801 | (45 | ) | (d) | 3,756 | ||||||
Current portion of long-term debt and other borrowings | 495 | (12 | ) | 483 | |||||||
Total current liabilities | 13,525 | (447 | ) | 13,078 | |||||||
Long-term debt and other borrowings | 13,809 | (1,186 | ) | 12,623 | |||||||
Deferred income taxes | 1,279 | — | 1,279 | ||||||||
Other noncurrent liabilities | 1,475 | 295 | (e) | 1,770 | |||||||
Total noncurrent liabilities | 16,563 | (891 | ) | 15,672 | |||||||
Shareholders’ investment | |||||||||||
Total shareholders’ investment | 16,373 | (3,361 | ) | (f) | 13,012 | ||||||
Total liabilities and shareholders’ investment | $ | 46,461 | $ | (4,699 | ) | $ | 41,762 | ||||
(a) Adjustments to deconsolidate Target Canada at November 1, 2014.
(b) Includes estimated tax impact as a result of the deconsolidation.
(c) Includes the fair value of our loans receivable from Target Canada. Prior to deconsolidation, these loans were considered intercompany notes payable by Target Canada and were eliminated in consolidation. Subsequent to the deconsolidation, these amounts are recorded as balances with Target Canada (related party notes receivable) at an estimated fair value based on the retained interest determined by the recoverability of the carrying amount and whether the related party notes receivable are considered secured or unsecured. We have estimated a recovery rate based upon the estimated fair value of the net assets of Target Canada available for distribution in relation to the secured and unsecured claims in the CCAA filing.
(d) Includes a liability for Target's expected cash contribution into a trust for the benefit of the employees of Target Canada.
(e) Includes contingent liabilities retained by Target Corporation after the deconsolidation.
(f) The adjustment to retained earnings includes the impairment loss on our investment in Target Canada and the estimated tax impact as a result of the deconsolidation. The unaudited pro forma consolidated statements of operations do not include the estimated impairment loss on our investment or the estimated tax impact because of their non-recurring nature.
Consolidated Pro Forma Statements of Operations
Nine Months Ended November 1, 2014 | |||||||||||
(millions, except per share data) (unaudited) | Historical Target Consolidated | Pro Forma Adjustments | (a) | Pro Forma Target | |||||||
Sales | $ | 52,188 | $ | (1,321 | ) | $ | 50,867 | ||||
Cost of sales | 36,787 | (1,072 | ) | 35,715 | |||||||
Selling, general and administrative expenses | 11,303 | (685 | ) | (b) | 10,618 | ||||||
Depreciation and amortization | 1,791 | (207 | ) | 1,584 | |||||||
Earnings before interest expense and income taxes | 2,307 | 643 | 2,950 | ||||||||
Net interest expense | 788 | (57 | ) | 731 | |||||||
Earnings before income taxes | 1,519 | 700 | 2,219 | ||||||||
Provision for income taxes | 515 | 202 | 717 | ||||||||
Net earnings from continuing operations | $ | 1,004 | $ | 498 | $ | 1,502 | |||||
Basic earnings per share from continuing operations | $ | 1.58 | $ | 0.78 | $ | 2.36 | |||||
Diluted earnings per share from continuing operations | $ | 1.57 | $ | 0.77 | $ | 2.35 | |||||
Weighted average common shares outstanding | |||||||||||
Basic | 633.6 | — | 633.6 | ||||||||
Dilutive impact of share-based awards | 5.1 | — | 5.1 | ||||||||
Diluted | 638.7 | — | 638.7 | ||||||||
Antidilutive shares | 4.2 | — | 4.2 | ||||||||
Year Ended February 1, 2014 | |||||||||||
(millions, except per share data) (unaudited) | Historical Target Consolidated | Pro Forma Adjustments | (a) | Pro Forma Target | |||||||
Sales | $ | 72,596 | $ | (1,317 | ) | $ | 71,279 | ||||
Cost of sales | 51,160 | (1,121 | ) | 50,039 | |||||||
Selling, general and administrative expenses | 15,375 | (910 | ) | 14,465 | |||||||
Depreciation and amortization | 2,223 | (227 | ) | 1,996 | |||||||
Gain on receivables transaction | (391 | ) | — | (391 | ) | ||||||
Earnings before interest expense and income taxes | 4,229 | 941 | 5,170 | ||||||||
Net interest expense | 1,126 | (77 | ) | 1,049 | |||||||
Earnings before income taxes | 3,103 | 1,018 | 4,121 | ||||||||
Provision for income taxes | 1,132 | 295 | 1,427 | ||||||||
Net earnings from continuing operations | $ | 1,971 | $ | 723 | $ | 2,694 | |||||
Basic earnings per share from continuing operations | $ | 3.10 | $ | 1.14 | $ | 4.24 | |||||
Diluted earnings per share from continuing operations | $ | 3.07 | $ | 1.13 | $ | 4.20 | |||||
Weighted average common shares outstanding | |||||||||||
Basic | 635.1 | — | 635.1 | ||||||||
Dilutive impact of share-based awards | 6.7 | — | 6.7 | ||||||||
Diluted | 641.8 | — | 641.8 | ||||||||
Antidilutive shares | 2.3 | — | 2.3 | ||||||||
Year Ended February 2, 2013 | |||||||||||
(millions, except per share data) (unaudited) | Historical Target Consolidated | Pro Forma Adjustments | (a) | Pro Forma Target | |||||||
Sales | $ | 71,960 | $ | — | $ | 71,960 | |||||
Credit card revenues | 1,341 | — | 1,341 | ||||||||
Total revenues | 73,301 | — | 73,301 | ||||||||
Cost of sales | 50,568 | — | 50,568 | ||||||||
Selling, general and administrative expenses | 14,914 | (272 | ) | 14,642 | |||||||
Credit card expenses | 467 | — | 467 | ||||||||
Depreciation and amortization | 2,142 | (97 | ) | 2,045 | |||||||
Gain on receivables transaction | (161 | ) | — | (161 | ) | ||||||
Earnings before interest expense and income taxes | 5,371 | 369 | 5,740 | ||||||||
Net interest expense | 762 | (78 | ) | 684 | |||||||
Earnings before income taxes | 4,609 | 447 | 5,056 | ||||||||
Provision for income taxes | 1,610 | 132 | 1,742 | ||||||||
Net earnings from continuing operations | $ | 2,999 | $ | 315 | $ | 3,314 | |||||
Basic earnings per share from continuing operations | $ | 4.57 | $ | 0.48 | $ | 5.05 | |||||
Diluted earnings per share from continuing operations | $ | 4.52 | $ | 0.48 | $ | 5.00 | |||||
Weighted average common shares outstanding | |||||||||||
Basic | 656.7 | — | 656.7 | ||||||||
Dilutive impact of share-based awards | 6.6 | — | 6.6 | ||||||||
Diluted | 663.3 | — | 663.3 | ||||||||
Antidilutive shares | 5.0 | — | 5.0 | ||||||||
Year Ended January 28, 2012 | |||||||||||
(millions, except per share data) (unaudited) | Historical Target Consolidated | Pro Forma Adjustments | (a) | Pro Forma Target | |||||||
Sales | $ | 68,466 | $ | — | $ | 68,466 | |||||
Credit card revenues | 1,399 | — | 1,399 | ||||||||
Total revenues | 69,865 | — | 69,865 | ||||||||
Cost of sales | 47,860 | — | 47,860 | ||||||||
Selling, general and administrative expenses | 14,106 | (74 | ) | 14,032 | |||||||
Credit card expenses | 446 | — | 446 | ||||||||
Depreciation and amortization | 2,131 | (48 | ) | 2,083 | |||||||
Earnings before interest expense and income taxes | 5,322 | 122 | 5,444 | ||||||||
Net interest expense | 866 | (44 | ) | 822 | |||||||
Earnings before income taxes | 4,456 | 166 | 4,622 | ||||||||
Provision for income taxes | 1,527 | 47 | 1,574 | ||||||||
Net earnings from continuing operations | $ | 2,929 | $ | 119 | $ | 3,048 | |||||
Basic earnings per share from continuing operations | $ | 4.31 | $ | 0.18 | $ | 4.49 | |||||
Diluted earnings per share from continuing operations | $ | 4.28 | $ | 0.17 | $ | 4.46 | |||||
Weighted average common shares outstanding | |||||||||||
Basic | 679.1 | — | 679.1 | ||||||||
Dilutive impact of share-based awards | 4.8 | — | 4.8 | ||||||||
Diluted | 683.9 | — | 683.9 | ||||||||
Antidilutive shares | 15.5 | — | 15.5 | ||||||||
Note: Amounts may not foot due to rounding.
(a) Reflects the deconsolidation of Target Canada's statement of operations for the nine months ended November 1, 2014 and for the years ended February 1, 2014, February 2, 2013 and January 28, 2012.
(b) Includes the third quarter 2014 impairment of a Canadian operating store of $16 million recorded outside of the Canadian Segment which will not have a continuing effect on Target.