Target 2013 Annual Report Download - page 7

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2
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," both everyday essentials and fashionable, differentiated merchandise at discounted
prices. Our ability to deliver a preferred shopping experience to our guests is supported by our strong supply chain
and technology infrastructure, a devotion to innovation that is ingrained in our organization and culture, and our
disciplined approach to managing our business and investing in future growth.
We operate as two reportable segments: U.S. and Canadian. Our U.S. Segment includes all of our U.S. retail operations,
which are designed to enable guests to purchase products seamlessly in stores, online or through mobile devices.
The U.S. Segment also includes our credit card servicing activities and certain centralized operating and corporate
activities not allocated to our Canadian Segment. Our Canadian Segment includes all of our Canadian retail operations,
including 124 stores opened during 2013. We currently do not have a digital sales channel within our Canadian Segment.
Prior to the first quarter of 2013, we operated a U.S. Credit Card Segment that offered credit to qualified guests through
our branded credit cards: the Target Credit Card and the Target Visa Credit Card. In the first quarter of 2013, we sold
our U.S. consumer credit card portfolio, and TD Bank Group (TD) now underwrites, funds and owns Target Credit Card
and Target Visa consumer receivables in the U.S. We perform account servicing and primary marketing functions and
earn a substantial portion of the profits generated by the portfolio. Following the sale of our U.S. consumer credit card
portfolio to TD, we combined our historical U.S. Retail Segment and U.S. Credit Card Segment into one U.S. Segment.
Refer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, and Note 6
of the Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data, for more
information on the credit card receivables transaction and segment change.
Data Breach
During the fourth quarter of 2013, we experienced a data breach in which an intruder stole certain payment card
and other guest information from our network (the Data Breach). For further information about the Data Breach, see
Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Financial Highlights
For information about our fiscal years, see Item 8, Financial Statements and Supplemental Data - Note 1, Summary
of Accounting Policies, of this Annual Report on Form 10-K.
For information on key financial highlights and segment financial information, see the items referenced in Item 6,
Selected Financial Data, Item 7, Management's Discussion and Analysis of Financial Condition and Results of
Operations and Item 8, Financial Statements and Supplemental Data — Note 28, Segment Reporting, of this Annual
Report on Form 10-K.
Seasonality
A larger share of annual revenues and earnings traditionally occurs in the fourth quarter because it includes the peak
sales period from Thanksgiving to the end of December.
Merchandise
We sell a wide assortment of general merchandise and food. Our general merchandise and CityTarget stores offer an
edited food assortment, including perishables, dry grocery, dairy and frozen items, while our SuperTarget stores offer
a full line of food items comparable to traditional supermarkets. Our digital channels include a wide assortment of
general merchandise, including many items found in our stores and a complementary assortment, such as extended
sizes and colors, that are only sold online.