Target 2010 Annual Report Download - page 61

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6. Earnings per Share
Basic earnings per share (EPS) is calculated as net earnings divided by the weighted average number of
common shares outstanding during the period. Diluted EPS includes the potentially dilutive impact of stock-based
awards outstanding at period end, consisting of the incremental shares assumed to be issued upon the exercise of
stock options and the incremental shares assumed to be issued under performance share and restricted stock unit
arrangements.
Earnings Per Share
(millions, except per share data) 2010 2009 2008
Net earnings $2,920 $2,488 $2,214
Basic weighted average common shares outstanding 723.6 752.0 770.4
Dilutive impact of stock-based awards 5.8 2.8 3.2
Diluted weighted average common shares outstanding 729.4 754.8 773.6
Basic earnings per share $ 4.03 $ 3.31 $ 2.87
Diluted earnings per share $ 4.00 $ 3.30 $ 2.86
For the 2010, 2009 and 2008 EPS computations, 10.9 million, 22.9 million and 17.4 million stock options,
respectively, were excluded from the calculation of weighted average shares for diluted EPS because their effects
were antidilutive.
7. Other Comprehensive Income/(Loss)
Other comprehensive income/(loss) includes revenues, expenses, gains and losses that are excluded from net
earnings under GAAP and are recorded directly to shareholders’ investment. In 2010, 2009 and 2008, other
comprehensive income/(loss) included gains and losses on certain hedge transactions, foreign currency
translation adjustments and amortization of pension and postretirement plan amounts, net of related taxes.
Significant items affecting other comprehensive income/(loss) are shown in the Consolidated Statements of
Shareholders’ Investment.
8. Fair Value Measurements
Fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable,
willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new
obligor, not the amount that would be paid to settle the liability with the creditor. Fair value measurements are
categorized into one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted
prices in active markets); Level 2 (observable market inputs available at the measurement date, other than quoted
prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market
data).
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PART II