10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACTOF 1934

For the quarterly period ended August 1, 2009

Commission File Number 1-6049

TARGET CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota	41-0215170
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1000 Nicollet Mall, Minneapolis, Minnesota	55403
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 612/304-6073

Former name, former address and former fiscal year, if changed since last report: N/A

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).            Yes  x   No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Act).

Large accelerated filer  x   Accelerated filer  o   Non-accelerated filer  o   Smaller Reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes o  No x

Indicate the number of shares outstanding of each of registrant’s classes of common stock, as of the latest practicable date. Total shares of common stock, par value $.0833, outstanding at August 26, 2009 were 751,859,198.

TARGET CORPORATION

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Operations	1
	Consolidated Statements of Financial Position	2
	Consolidated Statements of Cash Flows	3
	Consolidated Statements of Shareholders’ Investment	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Submission of Matters to a Vote of Security Holders	24
Item 5.	Other Information	25
Item 6.	Exhibits	25
Signature		26
Exhibit Index		27

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

Consolidated Statements of Operations

	Three Months Ended						Six Months Ended
	August 1		,	August 2		,	August 1		,	August 2		,
(millions, except per share data) (unaudited)	2009			2008			2009			2008
Sales	$	14,567		$	14,971		$	28,928		$	29,273
Credit card revenues	500			501			972			1,001
Total revenues	15,067			15,472			29,900			30,274
Cost of sales	9,914			10,304			19,851			20,202
Selling, general and administrative expenses	3,136			3,153			6,150			6,190
Credit card expenses	388			347			772			620
Depreciation and amortization	478			448			950			884
Earnings before interest expense and income taxes	1,151			1,220			2,177			2,378
Net interest expense
Nonrecourse debt collateralized by credit card receivables	24			48			51			67
Other interest expense	171			179			348			369
Interest income	(1		)	(10		)	(2		)	(19		)
Net interest expense	194			217			397			417
Earnings before income taxes	957			1,003			1,780			1,961
Provision for income taxes	363			369			664			724
Net earnings	$	594		$	634		$	1,116		$	1,237
Basic earnings per share	$	0.79		$	0.82		$	1.48		$	1.57
Diluted earnings per share	$	0.79		$	0.82		$	1.48		$	1.56
Weighted average common shares outstanding
Basic	752.0			770.3			752.1			787.9
Diluted	754.4			773.9			754.2			791.8

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Financial Position

	August 1,			January 31,			August 2,
(millions)	2009			2009			2008
Assets	(unaudited		)				(unaudited		)
Cash and cash equivalents, including marketable securities of $385, $302 and $904	$	957		$	864		$	1,527
Credit card receivables, net of allowance of $1,004, $1,010 and $661	7,288			8,084			7,980
Inventory	7,528			6,705			7,313
Other current assets	1,910			1,835			1,800
Total current assets	17,683			17,488			18,620
Property and equipment
Land	5,726			5,767			5,687
Buildings and improvements	21,530			20,430			19,511
Fixtures and equipment	4,481			4,270			4,031
Computer hardware and software	2,540			2,586			2,498
Construction-in-progress	978			1,763			1,851
Accumulated depreciation	(9,543		)	(9,060		)	(8,426		)
Property and equipment, net	25,712			25,756			25,152
Other noncurrent assets	838			862			1,368
Total assets	$	44,233		$	44,106		$	45,140
Liabilities and shareholders’ investment
Accounts payable	$	6,233		$	6,337		$	6,606
Accrued and other current liabilities	3,004			2,913			3,030
Unsecured debt and other borrowings	517			1,262			1,723
Nonrecourse debt collateralized by credit card receivables	56			—			—
Total current liabilities	9,810			10,512			11,359
Unsecured debt and other borrowings	11,983			12,000			12,465
Nonrecourse debt collateralized by credit card receivables	5,458			5,490			5,467
Deferred income taxes	494			455			534
Other noncurrent liabilities	1,886			1,937			1,858
Total noncurrent liabilities	19,821			19,882			20,324
Shareholders’ investment
Common stock	63			63			63
Additional paid-in capital	2,822			2,762			2,707
Retained earnings	12,266			11,443			10,861
Accumulated other comprehensive loss	(549		)	(556		)	(174		)
Total shareholders’ investment	14,602			13,712			13,457
Total liabilities and shareholders’ investment	$	44,233		$	44,106		$	45,140
Common shares outstanding	751.9			752.7			755.0

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows

	Six Months Ended
	August 1		,	August 2		,
(millions) (unaudited)	2009			2008
Operating activities
Net earnings	$	1,116		$	1,237
Reconciliation to cash flow
Depreciation and amortization	950			884
Share-based compensation expense	48			37
Deferred income taxes	64			14
Bad debt provision	600			437
Loss on disposal of property and equipment, net	74			24
Other non-cash items affecting earnings	28			106
Changes in operating accounts providing / (requiring) cash
Accounts receivable originated at Target	154			(150		)
Inventory	(823		)	(533		)
Other current assets	(59		)	(104		)
Other noncurrent assets	19			(17		)
Accounts payable	(103		)	(115		)
Accrued and other current liabilities	30			(179		)
Other noncurrent liabilities	(47		)	(47		)
Other	—			160
Cash flow provided by operations	2,051			1,754
Investing activities
Expenditures for property and equipment	(1,042		)	(1,956		)
Proceeds from disposal of property and equipment	24			17
Change in accounts receivable originated at third parties	42			(213		)
Other investments	4			(53		)
Cash flow required for investing activities	(972		)	(2,205		)
Financing activities
Reductions of short-term notes payable	—			(500		)
Additions to long-term debt	—			3,557
Reductions of long-term debt	(754		)	(503		)
Dividends paid	(241		)	(224		)
Repurchase of stock	—			(2,815		)
Stock option exercises and related tax benefit	9			21
Other	—			(8		)
Cash flow required for financing activities	(986		)	(472		)
Net increase / (decrease) in cash and cash equivalents	93			(923		)
Cash and cash equivalents at beginning of period	864			2,450
Cash and cash equivalents at end of period	$	957		$	1,527

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Shareholders’ Investment

											Accumulated Other Comprehensive Income/(Loss)
(millions, except footnotes)	Common Stock Shares		Stock Par Value			Additional Paid-in Capital		Retained Earnings			Pension and Other Benefit Liability Adjustments			Derivative Instruments and Other			Total
February 2, 2008	818.7		$	68		$	2,656	$	12,761		$	(134	)	$	(44	)	$	15,307
Net earnings	—		—			—		2,214			—			—			2,214
Other comprehensive income
Pension and other benefit liability adjustments, net of taxes of $242	—		—			—		—			(376		)	—			(376		)
Unrealized losses on cash flow hedges, net of taxes of $2	—		—			—		—			—			(2		)	(2		)
Total comprehensive income																	1,836
Dividends declared	—		—			—		(471		)	—			—			(471		)
Repurchase of stock	(67.2	)	(5		)	—		(3,061		)	—			—			(3,066		)
Stock options and awards	1.2		—			106		—			—			—			106
January 31, 2009	752.7		$	63		$	2,762	$	11,443		$	(510	)	$	(46	)	$	13,712
(unaudited)
Net earnings	—		—			—		1,116			—			—			1,116
Other comprehensive income
Pension and other benefit liability adjustments, net of taxes of $4	—		—			—		—			7			—			7
Unrealized losses on cash flow hedges, net of taxes of $1	—		—			—		—			—			1			1
Currency translation adjustment, net of taxes of $0	—		—			—		—			—			(1		)	(1		)
Total comprehensive income																	1,123
Dividends declared	—		—			—		(249		)	—			—			(249		)
Repurchase of stock	(1.2	)	—			—		(44		)	—			—			(44		)
Stock options and awards	0.4		—			60		—			—			—			60
August 1, 2009	751.9		$	63		$	2,822	$	12,266		$	(503	)	$	(46	)	$	14,602

Dividends declared per share were $0.17 and $0.16 for the three months ended August 1, 2009 and August 2, 2008, respectively, and $0.33 and $0.30 for the six months ended August 1, 2009 and August 2, 2008, respectively. For the fiscal year ended January 31, 2009, dividends declared per share were $0.62.

See accompanying Notes to Consolidated Financial Statements.

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Notes to Consolidated Financial Statements

1.  Accounting Policies

The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statement disclosures contained in the 2008 Form 10-K for Target Corporation (the Corporation). The same accounting policies are followed in preparing quarterly financial data as are followed in preparing annual data. See Note 1 in our Form 10-K for the fiscal year ended January 31, 2009 for those policies. In the opinion of management, all adjustments necessary for a fair statement of quarterly operating results are reflected herein and are of a normal, recurring nature.

We have performed an evaluation of events that have occurred subsequent to August 1, 2009, and as of August 28, 2009 (the date of the filing of this Form 10-Q). There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the Consolidated Financial Statements as of or for the three and six-month periods ending August 1, 2009.

Due to the seasonal nature of our business, quarterly revenues, expenses, earnings and cash flows are not necessarily indicative of the results that may be expected for the full year.

2.  Earnings Per Share

Basic earnings per share (EPS) is net earnings divided by the weighted average number of common shares outstanding during the period. Diluted EPS includes 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.

	Basic EPS								Diluted EPS
	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
Earnings Per Share	Aug. 1,		Aug. 2,		Aug. 1,		Aug. 2,		Aug. 1,		Aug. 2,		Aug. 1,		Aug. 2,
(millions, except per share data)	2009		2008		2009		2008		2009		2008		2009		2008
Net earnings	$	594	$	634	$	1,116	$	1,237	$	594	$	634	$	1,116	$	1,237
Basic weighted average common shares outstanding	752.0		770.3		752.1		787.9		752.0		770.3		752.1		787.9
Incremental stock options, performance share units and restricted stock units	—		—		—		—		2.4		3.6		2.1		3.9
Weighted average common shares outstanding	752.0		770.3		752.1		787.9		754.4		773.9		754.2		791.8
Earnings per share	$	0.79	$	0.82	$	1.48	$	1.57	$	0.79	$	0.82	$	1.48	$	1.56

For the August 1, 2009 and August 2, 2008 computations, 25.5 million and 10.2 million stock options, respectively, were excluded from the calculation of weighted average shares for diluted EPS because their effects were antidilutive.

3.   Fair Value Measurements

The 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.

Assets and liabilities recorded at fair value are categorized using defined hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair value measurements: 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). Assets and liabilities measured at fair value are categorized based upon the lowest level of significant input to the valuations.  In determining fair value we use observable market data when available. Additionally, we consider both counterparty credit risk and our own creditworthiness in determining fair value. We attempt to mitigate credit risk to third parties by entering into netting and collateral arrangements. In those instances, the net exposure is then measured considering the counterparty’s creditworthiness.

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In the first quarter of 2008, we adopted the fair value measurement guidance for financial assets and liabilities. In the first quarter of 2009, we adopted the fair value measurement guidance for nonfinancial assets and liabilities.

The following table presents financial assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurements – Recurring Basis		Fair Value at August 1, 2009						Fair Value at January 31, 2009						Fair Value at August 2, 2008
(millions)		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents Marketable securities		$	385	$	—	$	—	$	302	$	—	$	—	$	904	$	—	$	—
Other current assets
Prepaid forward contracts		59		—		—		68		—		—		109		—		—
Equity swaps		1		—		—		1		—		—		2		—		—
Interest rate swaps(a)		—		—		—		—		—		—		—		1		—
Other noncurrent assets
Interest rate swaps(b)		—		131		—		—		163		—		—		79		—
Company-owned life insurance investments(c)		323		—		—		296		—		—		528		—		—
Total		$	768	$	131	$	—	$	667	$	163	$	—	$	1,543	$	80	$	—
Liabilities
Other noncurrent liabilities Interest rate swaps		$	—	$	14	$	—	$	—	$	30	$	—	$	—	$	—	$	—
Total		$	—	$	14	$	—	$	—	$	30	$	—	$	—	$	—	$	—
(a)	Designated as an accounting hedge.
(b)	At August 2, 2008, two interest rate swaps with a combined fair value of $15 million were designated as accounting hedges.
(c)	Company owned life insurance investments consist of equity index funds and fixed income assets. Amounts are presented net of loans that are secured by some of these policies of $196 million at August 1, 2009, $197 million at January 31, 2009, and $407 million at August 2, 2008.

Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment).

The fair value measurements related to long-lived assets held for sale and held and used were determined using available market prices at the measurement date based on recent investments or pending transactions of similar assets, third-party independent appraisals, valuation multiples and/or public comparables. We classify these measurements as Level 2. The fair value measurement of an intangible asset was determined using unobservable inputs that reflect our own assumptions regarding how market participants price the intangible assets at the measurement date. We classify these measurements as Level 3.

The following table presents the carrying amounts of nonfinancial assets that were measured at fair value on a nonrecurring basis and any resulting gain or loss included in earnings:

Fair Value Measurements –
Nonrecurring	Other current assets			Property and equipment			Other noncurrent assets
Basis	Long-lived assets			Long-lived assets			Intangible
(millions)	held for sale(a)			held and used(b)			asset
Measured as of May 2, 2009:
Carrying amount	$	30		$	11		$	—
Fair value measurement	24			6			—
Gain/(Loss)	(6		)	(5		)	—
Measured as of August 1, 2009:
Carrying amount	15			51			5
Fair value measurement	11			34			—
Gain/(Loss)	(4		)	(17		)	(5		)

(a)Reported measurement is fair value less cost to sell. Costs to sell were approximately $1 million at August 1, 2009 and May 2, 2009.

(b)Real estate and buildings marketed for sale by the Corporation that have exceeded the period to be classified as held for sale. Reported measurement is fair value less cost to sell. Costs to sell were approximately $2 million at August 1, 2009. There were no costs to sell at May 2, 2009.

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The following table presents the carrying amounts and estimated fair values of financial instruments not measured at fair value in the Consolidated Statements of Financial Position. The fair value of marketable securities is determined using available market prices at the reporting date.  The fair value of debt is measured using a discounted cash flow analysis based on our current market interest rates for similar types of financial instruments.

Financial Instruments Not Measured at Fair Value	August 1, 2009
	Carrying		Fair
(millions)	Amount		Value
Financial assets
Other current assets
Marketable securities(a)	$	18	$	18
Other noncurrent assets
Marketable securities(a)	3		3
Total	$	21	$	21
Financial liabilities
Total debt(b)	$	17,637	$	18,502
Total	$	17,637	$	18,502

(a)Amounts include held-to-maturity government and money market investments that are held to satisfy the capital requirements of Target Bank and Target National Bank.

(b)Represents the sum of nonrecourse debt collateralized by credit card receivables and unsecured debt and other borrowings excluding unamortized swap valuation adjustments and capital lease obligations.

The carrying amounts of credit card receivables, net of allowance, accounts payable, and certain accrued and other current liabilities approximate fair value at August 1, 2009.

4.  Credit Card Receivables

Credit card receivables are recorded net of an allowance for expected losses. The allowance, recognized in an amount equal to anticipated future write-offs of existing receivables, was $1,004 million at August 1, 2009, $1,010 million at January 31, 2009 and $661 million at August 2, 2008. This allowance includes provisions for uncollectible finance charges and other credit-related fees. We estimate future write-offs based on historical experience of delinquencies, risk scores, aging trends, and industry risk trends. Substantially all accounts continue to accrue finance charges until they are written off. Total receivables past due ninety days or more and still accruing finance charges were $340 million at August 1, 2009, $393 million at January 31, 2009 and $267 million at August 2, 2008. Accounts are written off when they become 180 days past due.

Under certain circumstances, we offer payment plans to cardholders that restructure the terms of finance charges and minimum payments that meet the accounting definition of a troubled debt restructuring (TDRs). These concessions are made on an individual cardholder basis for economic or legal reasons specific to each individual cardholder’s circumstances. As a percentage of period end gross receivables, receivables classified as TDRs were 6.5 percent at August 1, 2009, 4.9 percent at January 31, 2009, and 3.6 percent at August 2, 2008. Receivables classified as TDRs are treated consistently with other aged receivables in determining our allowance for doubtful accounts.

As a method of providing funding for our credit card receivables, we sell on an ongoing basis all of our consumer credit card receivables to Target Receivables Corporation (TRC), a wholly owned, bankruptcy remote subsidiary. TRC then transfers the receivables to the Target Credit Card Master Trust (the Trust), which from time to time will sell debt securities to third parties either directly or through a related trust. These debt securities represent undivided interests in the Trust assets. TRC uses the proceeds from the sale of debt securities and its share of collections on the receivables to pay the purchase price of the receivables to the Corporation.

We consolidate the receivables within the Trust and any debt securities issued by the Trust, or a related trust, in our Consolidated Statements of Financial Position based upon the applicable accounting guidance. The receivables transferred to the Trust are not available to general creditors of the Corporation. The payments to the holders of the debt securities issued by the Trust or the related trust are made solely from the assets transferred to the Trust or the related trust and are

7

nonrecourse to the general assets of the Corporation. Upon termination of the securitization program and repayment of all debt securities, any remaining assets could be distributed to the Corporation in a liquidation of TRC.

In the second quarter of 2008, we sold an interest in our credit card receivables to a JPMorgan Chase affiliate (JPMC). The interest sold represented 47 percent of the receivables portfolio at the time of the transaction. This transaction was accounted for as a secured borrowing, and accordingly, the credit card receivables and the note payable issued are reflected in our Consolidated Statements of Financial Position. Notwithstanding this accounting treatment, the accounts receivable assets that collateralize the note payable supply the cash flow to pay principal and interest to the note holder; the receivables are not available to general creditors of the Corporation; and the payments to JPMC are made solely from the trust assets and are nonrecourse to the general assets of the Corporation. Periodic interest payments due on the note are satisfied provided the cash flows from the trust assets are sufficient. If the cash flows are less than the periodic interest, the available amount, if any, is paid with respect to interest. Interest shortfalls will be paid to the extent subsequent cash flows from the assets in the trust are sufficient.

5.  Contingencies

We are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities. We do not believe that any of the currently identified claims or litigation will materially affect our results of operations, cash flows or financial condition.

6.   Notes Payable

We obtain short-term financing from time to time under our commercial paper program, a form of notes payable. There were no amounts outstanding under our commercial paper program at August 1, 2009, January 31, 2009, or August 2, 2008.

7.      Derivative Financial Instruments

Derivative financial instruments are reported at fair value on the Consolidated Statements of Financial Position. Our derivative instruments have been primarily interest rate swaps. We use these derivatives to mitigate our interest rate risk.  We have counterparty credit risk resulting from our derivative instruments. This risk lies primarily with two global financial institutions.  We monitor this concentration of counterparty credit risk on an ongoing basis.

Historically, the majority of our derivative instruments were designated as hedge instruments in accordance with applicable accounting guidance.  The changes in market value of an interest rate swap, as well as the offsetting change in market value of the hedged debt, were recognized within earnings in the current period.  We assessed at the inception of the derivative hedge whether the hedge was highly effective in offsetting changes in fair value or cash flows of hedged items. Ineffectiveness resulted when changes in the market value of the hedged debt were not completely offset by changes in the market value of the interest rate swap. For those derivative contracts whose terms met the conditions of the “short-cut method”, 100 percent hedge effectiveness was assumed.  There was no ineffectiveness recognized during the three and six months ended August 1, 2009 and August 2, 2008 related to our hedges. At August 1, 2009, we had no derivative instruments designated as accounting hedges.

During the first quarter of 2008, we terminated certain “pay floating” interest rate swaps with a combined notional amount of $3,125 million for cash proceeds of $160 million, which are classified within other operating cash flows in the Consolidated Statements of Cash Flows. Because these swaps were designated as hedges, concurrent with their terminations, we stopped making market value adjustments to the associated hedged debt. Gains realized upon termination are being amortized into earnings over the remaining life of the associated hedged debt.

Additionally, during 2008, we de-designated certain “pay floating” interest rate swaps, and upon de-designation, these swaps no longer qualified for hedge accounting treatment. As a result of the de-designation, the unrealized gains on these swaps determined at the date of de-designation are being amortized into earnings over the remaining lives of the previously hedged items.

Total net gains amortized into net interest expense for terminated and de-designated swaps were $15 million during each of the three months ended August 1, 2009 and August 2, 2008.  Total net gains amortized into net interest expense for terminated and de-designated swaps were $33 million and $26 million during the six months ended August 1, 2009 and August 2, 2008, respectively. The amount remaining on unamortized hedged debt valuation gains from terminated and de-

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designated interest rate swaps that will be amortized into earnings over the remaining lives totaled $230 million, $263 million and $221 million, at August 1, 2009, January 31, 2009 and August 2, 2008.

Simultaneous to the de-designations during 2008, we entered into “pay fixed” swaps to economically hedge the risks associated with the de-designated “pay floating” swaps. These swaps are not designated as hedging instruments and along with the de-designated “pay floating” swaps are measured at fair value. Changes in fair value measurements are a component of net interest expense on the Consolidated Statements of Operations.

Periodic payments, valuation adjustments and amortization of gains or losses from the termination or de-designation of derivative contracts are summarized below:

Derivative Contracts – Effect on Results of Operations		Three Months Ended				Six Months Ended
	Classification of	August 1,		August 2,		August 1,		August 2,
(millions)	Income/(Expense)	2009		2008		2009		2008
Interest Rate Swaps	Other interest expense	$	16	$	19	$	32	$	32

For further description of the fair value measurement of derivative contracts and their classification on the Consolidated Statement of Financial Position, see Note 3, Fair Value Measurements.

8.  Income Taxes

We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 1999.

We accrue for the effects of open uncertain tax positions and the related potential penalties and interest. There were no material adjustments to our recorded liability for unrecognized tax benefits during the three and six months ended August 1, 2009. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next 12 months; however, we do not expect the change to have a significant effect on our consolidated results of operations or financial position.

9.  Share Repurchase

During the three months ended August 1, 2009, we repurchased 0.5 million shares of our common stock, for a total cash investment of $20 million (average price per share of $41.13), all of which was paid in prior periods. During the six months ended August 1, 2009, we repurchased 1.2 million shares of our common stock, for a total cash investment of $42 million (average price per share of $34.62), of which $33 million was paid in prior periods.  All shares reacquired during the three and six months ended August 1, 2009 were delivered upon settlement of prepaid forward contracts.  The prepaid forward contracts settled during the three months ended August 1, 2009 had a total cash investment of $20 million and an aggregate market value of $21 million at their respective settlement dates.  The prepaid forward contracts settled during the six months ended August 1, 2009 had a total cash investment of $42 million and an aggregate market value of $44 million at their respective settlement dates. In November 2008 we announced a temporary suspension to our open-market share repurchase program.  See Note 10, Pension, Postretirement Health Care and Other Benefits, for further details of our prepaid forward contracts.

During the three months ended August 2, 2008, we repurchased 33.8 million shares of our common stock, for a total cash investment of $1,668 million ($49.30 per share), of which $233 million was paid in prior periods.  During the six months ended August 2, 2008, we repurchased 64.3 million shares of our common stock for a total cash investment of $3,241 million ($50.37 per share), of which $372 million was paid in prior periods. Of the repurchases during the three and six months ended August 2, 2008, 20 million and 30 million shares, respectively, were acquired through the exercise of call options.

Since the inception of our current share repurchase program, which began in the fourth quarter of 2007, we have repurchased 94.9 million shares of our common stock, for a total cash investment of $4,882 million (average price per share of $51.44).

10.  Pension, Postretirement Health Care and Other Benefits

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We have qualified defined benefit pension plans covering team members who meet age and service requirements, including in certain circumstances date of hire. We also have unfunded, nonqualified pension plans for team members with qualified plan compensation restrictions. Benefits are provided based on years of service and team member compensation. Upon retirement, team members also become eligible for certain health care benefits if they meet minimum age and service requirements and agree to contribute a portion of the cost.

Net Pension Expense and	Pension Benefits												Postretirement Health Care Benefits
Postretirement Healthcare	Three Months Ended						Six Month Ended						Three Months Ended				Six Months Ended
Expense	Aug. 1,			Aug. 2,			Aug. 1,			Aug. 2,			Aug. 1,		Aug. 2,		Aug. 1,		Aug. 2,
(millions)	2009			2008			2009			2008			2009		2008		2009		2008
Service cost	$	25		$	23		$	50		$	46		$	2	$	1	$	3	$	2
Interest cost	31			29			62			58			2		2		4		4
Expected return on assets	(44		)	(40		)	(88		)	(80		)	—		—		—		—
Recognized losses	6			4			12			8			—		—		—		—
Recognized prior service cost	(1		)	(1		)	(2		)	(2		)	—		—		—		—
Total	$	17		$	15		$	34		$	30		$	4	$	3	$	7	$	6

In the 2009 first quarter, we made a discretionary contribution of $100 million to our qualified defined benefit pension plan.

We also maintain a nonqualified, unfunded deferred compensation plan for approximately 3,500 current and retired team members whose participation in our 401(k) plan is limited by statute or regulation. These team members choose from a menu of crediting rate alternatives that are the same as the investment choices in our 401(k) plan, including Target common stock. We credit an additional two percent per year to the accounts of all active participants, excluding executive officer participants, in part to recognize the risks inherent to their participation in a plan of this nature. We also maintain a nonqualified, unfunded deferred compensation plan that was frozen during 1996, covering 11 current and 51 retired participants. In this plan, deferred compensation earns returns tied to market levels of interest rates plus an additional six percent return, with a minimum of 12 percent and a maximum of 20 percent, as determined by the plan’s terms.

We control some of our risk of offering the nonqualified plans by investing in vehicles that offset a substantial portion of our economic exposure to the returns of the plans.  These investment vehicles include company owned life insurance on approximately 3,600 highly compensated, current and former team members who have given their consent to be insured and prepaid forward contracts in our own common stock. All of these investments are general corporate assets and are marked-to-market with the related gains and losses recognized in the Consolidated Statements of Operations in the period they occur.

The total change in fair value for contracts indexed to our own common stock recorded in earnings was pre-tax income/(loss) of $6million and $(26) million for the three months ended August 1, 2009 and August 2, 2008, respectively, and a pre-tax gain/(loss) of $25 million and $(30) million for the six months ended August 1, 2009 and August 2, 2008, respectively. For the six months ended August 1, 2009 and August 2, 2008, we invested approximately $9 million and $112 million, respectively, in such investment instruments, and these investments are included in the Consolidated Statements of Cash Flows within other investing activities. Adjusting our position in these investment vehicles may involve repurchasing shares of Target common stock when settling the forward contracts. For the three and six months ended August 1, 2009, these repurchases totaled 0.5million and 1.2 million shares, respectively, and for the three and six months ended August 2, 2008, these repurchases totaled 0.6 million and 1.8 million shares, respectively, and are included in the total share repurchases described in Note 9, Share Repurchase.

At August 1, 2009, January 31, 2009 and August 2, 2008, our outstanding interest in contracts indexed to our common stock were:

Prepaid Forward Contracts on Target Common Stock		Contractual
	Number of	Price Paid		Fair		Total Cash
(millions, except per share data)	Shares	per Share		Value		Investment
August 2, 2008	2.5	$	54.91	$	109	$	140
January 31, 2009	2.2	39.98		68		88
August 1, 2009	1.3	41.11		59		55

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11.  Segment Reporting

Our measure of profit for each segment is a measure that management considers analytically useful in measuring the return we are achieving on our investment.

Business Segment Results		Three Months Ended August 1, 2009							Three Months Ended August 2, 2008
				Credit							Credit
(millions)		Retail		Card		Total			Retail		Card		Total
Sales/Credit card revenues		$	14,567	$	500	$	15,067		$	14,971	$	501	$	15,472
Cost of sales		9,914		—		9,914			10,304		—		10,304
Bad debt expense(a)		—		303		303			—		256		256
Selling, general and administrative/Operations and marketing expenses(a), (b)		3,115		106		3,221			3,126		118		3,244
Depreciation and amortization		474		4		478			443		5		448
Earnings before interest expense and
income taxes		1,064		87		1,151			1,098		122		1,220
Interest expense on nonrecourse debt
collateralized by credit card receivables		—		24		24			—		48		48
Segment profit		$	1,064	$	63	1,127			$	1,098	$	74	1,172
Unallocated (income) and expenses
Other interest expense						171							179
Interest income						(1		)					(10		)
Earnings before income taxes						$	957						$	1,003
(a)	The combination of bad debt expense and operations and marketing expenses within the Credit Card Segment represent credit card expenses on the Consolidated Statements of Operations.
(b)	New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $21 million for the three months ended August 1, 2009 and $27 million for the three months ended August 2, 2008 are recorded as a reduction to SG&A expenses within the Retail Segment and an increase to operations and marketing expenses within the Credit Card Segment.

Note: The sum of the segment amounts may not equal the total amounts due to rounding.

Business Segment Results		Six Months Ended August 1, 2009							Six Months Ended August 2, 2008
				Credit							Credit
(millions)		Retail		Card		Total			Retail		Card		Total
Sales/Credit card revenues		$	28,928	$	972	$	29,900		$	29,273	$	1,001	$	30,274
Cost of sales		19,851		—		19,851			20,202		—		20,202
Bad debt expense(a)		—		600		600			—		437		437
Selling, general and administrative/Operations and marketing expenses(a), (b)		6,109		213		6,322			6,139		234		6,373
Depreciation and amortization		942		7		950			876		8		884
Earnings before interest expense and
income taxes		2,026		152		2,177			2,056		322		2,378
Interest expense on nonrecourse debt
collateralized by credit card receivables		—		51		51			—		67		67
Segment profit		$	2,026	$	101	2,126			$	2,056	$	255	2,311
Unallocated (income) and expenses
Other interest expense						348							369
Interest income						(2		)					(19		)
Earnings before income taxes						$	1,780						$	1,961
(a)	The combination of bad debt expense and operations and marketing expenses within the Credit Card Segment represent credit card expenses on the Consolidated Statements of Operations.
(b)	New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $41 million for the six months ended August 1, 2009 and $51 million for the six months ended August 2, 2008 are recorded as a reduction to SG&A expenses within the Retail Segment and an increase to operations and marketing expenses within the Credit Card Segment.

Note: The sum of the segment amounts may not equal the total amounts due to rounding.

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Total Assets by Segment	August 1, 2009						January 31, 2009						August 2, 2008
			Credit						Credit						Credit
(millions)	Retail		Card		Total		Retail		Card		Total		Retail		Card		Total
Total assets	$	36,551	$	7,682	$	44,233	$	35,651	$	8,455	$	44,106	$	36,983	$	8,157	$	45,140

Substantially all of our revenues are generated in, and long-lived assets are located in, the United States.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

Our financial results for the second quarter reflect the challenging economy in which we operated. Our Retail Segment’s results reflect strong gross margin rate performance and disciplined expense control. These results were achieved in light of our previously reported decline in overall and comparable store sales. Despite continuing to operate in a constrained consumer credit environment, our Credit Card Segment’s portfolio continues to exhibit stability and modest profitability.

Cash flow provided by operations was $2,051 million and $1,754 million for the six months ended August 1, 2009 and August 2, 2008, respectively. We opened 23 new stores during the three months ended August 1, 2009, or 21 stores net of 2 relocations. During the three months ended August 2, 2008, we opened 43 new stores representing 35 stores net of 8 relocations.

Analysis of Results of Operations

Retail Segment

Retail Segment Results	Three Months Ended						Six Months Ended
	August 1,		August 2,		Percent		August 1,			August 2,		Percent
(millions)	2009		2008		Change		2009			2008		Change
Sales	$	14,567	$	14,971	(2.7	)%	$	28,928		$	29,273	(1.2	)%
Cost of sales	9,914		10,304		(3.8	)	19,851			20,202		(1.7	)
Gross margin	4,653		4,667		(0.3	)	9,077			9,071		0.1
SG&A expenses(a)	3,115		3,126		(0.4	)	6,109			6,139		(0.5	)
EBITDA	1,538		1,541		(0.2	)	2,968			2,932		1.2
Depreciation and amortization	474		443		6.9		942			876		7.7
EBIT	$	1,064	$	1,098	(3.1	)%	$		2,026	$	2,056	(1.5	)%

EBITDA is earnings before interest expense, income taxes, depreciation and amortization.

EBIT is earnings before interest expense and income taxes.

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $21 million and $41 million for the three and six months ended August 1, 2009, respectively, and $27 million and $51 million for the three and six months ended August 2, 2008, respectively, are recorded as a reduction to SG&A expenses within the Retail Segment.

Retail Segment Rate Analysis	Three Months Ended		Six Months Ended
	August 1,	August 2,	August 1,	August 2,
	2009	2008	2009	2008
Gross margin rate	31.9%	31.2%	31.4%	31.0%
SG&A expense rate	21.4%	20.9%	21.1%	21.0%
EBITDA margin rate	10.6%	10.3%	10.3%	10.0%
Depreciation and amortization expense rate	3.3%	3.0%	3.3%	3.0%
EBIT margin rate	7.3%	7.3%	7.0%	7.0%

Retail Segment rate analysis metrics are computed by dividing the applicable amount by sales.

Sales

Sales include merchandise sales, net of expected returns, from our stores and our online business, as well as gift card breakage. Comparable-store sales is a measure that indicates the performance of our existing stores by measuring the growth in sales for such stores for a period over the comparable, prior-year period of equivalent length. The method of calculating

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comparable-store sales varies across the retail industry. As a result, our comparable-store sales calculation is not necessarily comparable to similarly titled measures reported by other companies.

Comparable-store sales are sales from our online business and sales from general merchandise and SuperTarget stores open longer than one year, including:

·sales from stores that have been remodeled or expanded while remaining open

·sales from stores that have been relocated to new buildings of the same format within the same trade area, in which the new store opens at about the same time as the old store closes

Comparable-store sales do not include:

·sales from general merchandise stores that have been converted, or relocated within the same trade area, to a SuperTarget store format

·sales from stores that were intentionally closed to be remodeled, expanded or reconstructed

Comparable-Store Sales	Three Months Ended		Six Months Ended
	August 1,	August 2,	August 1,	August 2,
	2009	2008	2009	2008
Comparable-store sales	(6.2)%	(0.4)%	(5.0)%	(0.6)%
Drivers of changes in comparable-store sales:
Number of transactions	(2.6)%	(2.0)%	(1.9)%	(1.9)%
Average transaction amount	(3.7)%	1.6%	(3.1)%	1.4%
Units per transaction	(2.6)%	(1.5)%	(2.9)%	(1.2)%
Selling price per unit	(1.2)%	3.2%	(0.2)%	2.6%

The comparable-store sales increases or decreases above are calculated by comparing sales in fiscal year periods with comparable prior fiscal year periods of equivalent length.

Transaction-level metrics are influenced by a broad array of macroeconomic, competitive and consumer behavioral factors, and comparable-store sales rates are negatively impacted by transfer of sales to new stores.

Gross Margin Rate

Gross margin rate represents gross margin (sales less cost of sales) as a percentage of sales. See Note 3 in our Form 10-K for the fiscal year ended January 31, 2009 for a description of expenses included in cost of sales. Markup is the difference between an item’s cost and its retail price (expressed as a percentage of its retail price). Factors that affect markup include vendor offerings and negotiations, vendor income, sourcing strategies, market forces like raw material and freight costs, and competitive influences. Markdowns are the reduction in the original or previous price of retail merchandise. Factors that affect markdowns include inventory management, competitive influences and economic conditions.

For the three months ended August 1, 2009, our consolidated gross margin rate was 31.9 percent, compared with 31.2 percent in the same period last year. Our 2009 gross margin rate was adversely affected by sales mix; sales in nondiscretionary merchandise categories that yield lower gross margin rates outpaced sales in our higher margin apparel and home merchandise categories. The impact of sales mix on gross margin rate was an approximate 0.5 percentage point reduction for the three months ended August 1, 2009. This mix impact was more than offset by favorable markup and markdown rate performance and favorable supply chain expense rates.  The impact of rate performance within merchandise categories on gross margin rate was an approximate 1.2 percentage point increase for the three months ended August 1, 2009. Approximately half of this increase is attributable to lower transportation costs, driven by lower crude oil costs and excess transportation industry capacity.

For the six months ended August 1, 2009, our gross margin rate was 31.4 percent compared with 31.0 percent in the same period last year. The impact of sales mix on gross margin rate was an approximate 0.7 percentage point reduction for the six months ended August 1, 2009. The offsetting impact of rate performance within merchandise categories on gross margin rate was an approximate 1.1 percentage point increase for the six months ended August 1, 2009.

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Selling, General and Administrative Expense Rate

Our selling, general and administrative (SG&A) expense rate represents SG&A expenses as a percentage of sales. See Note 3 in our Form 10-K for the fiscal year ended January 31, 2009 for a description of expenses included in SG&A expenses. SG&A expenses exclude depreciation and amortization, as well as expenses associated with our credit card operations, which are reflected separately in our Consolidated Statements of Operations.

SG&A expenses declined $11 million and $30 million between the respective three and six month periods as a result of overall productivity gains in our stores. This decrease was achieved even with 71 additional stores open at the end of the second quarter of 2009 than we had at the end of the second quarter of 2008.

For the three and six months ended August 1, 2009, SG&A expense rate was 21.4 percent and 21.1 percent, compared with 20.9 percent and 21.0 for the same periods last year. The increase of the 2009 SG&A expense rates is a result of sales declining at a rate greater than the decline of SG&A expenses.

Depreciation and Amortization Expense Rate

Our depreciation and amortization expense rate represents depreciation and amortization expense as a percentage of sales. For the three and six months ended August 1, 2009, our depreciation and amortization expense rate was 3.3 percent compared with 3.0 percent for the same periods last year.  The rate unfavorability was due to growth of these expenses in line with our historical capital investment while sales decreased between the comparative periods.

Store Data

During the three months ended August 1, 2009, we opened 23 new stores, including 21 general merchandise stores (19 net of 2 store relocations) and 2 SuperTarget stores. During the three months ended August 2, 2008, we opened 43 new stores, including 30 general merchandise stores (22 net of 8 store relocations) and 13 SuperTarget stores.

Number of Stores and Retail Square Feet	Number of Stores			Retail Square Feet(a)
	August 1,	Jan. 31,	August 2,	August 1,	Jan. 31,	August 2,
	2009	2009	2008	2009	2009	2008
Target general merchandise stores	1,472	1,443	1,417	184,663	180,321	176,171
SuperTarget stores	247	239	231	43,739	42,267	40,828
Total	1,719	1,682	1,648	228,402	222,588	216,999

(a) In thousands; reflects total square feet, less office, distribution center and vacant space.

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Credit Card Segment

Credit card revenues are comprised of finance charges, late fees and other revenues, and third party merchant fees, or the amounts received from merchants who accept the Target Visa credit card.

Credit Card Segment Results	Three Months Ended					Three Months Ended
	August 1, 2009					August 2, 2008
	Amount			Annualized		Amount			Annualized
(millions)	(in millions)			Rate(d)		(in millions)			Rate(d)
Finance charge revenue	$	377		18.1	%	$	340		16.0	%
Late fees and other revenue	91			4.3		121			5.7
Third party merchant fees	32			1.5		40			1.9
Total revenues	500			23.9		501			23.5
Bad debt expense	303			14.5		256			12.0
Operations and marketing expenses(a)	106			5.0		118			5.5
Depreciation and amortization	4			0.2		5			0.2
Total expenses	413			19.7		379			17.8
EBIT	87			4.2		122			5.8
Interest expense on nonrecourse debt collateralized by credit card Receivables	24					48
Segment profit	$	63				$	74
Average receivables funded by Target(b)	$	2,853				$	3,636
Segment pretax ROIC(c)	8.8		%			8.2		%

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $21 million for the three months ended August 1, 2009  and $27 million for the three months ended August 2, 2008, respectively,are recorded as an increase to operations and marketing expenses within the Credit Card Segment.

(b) Amounts represent the portion of average gross credit card receivables funded by Target. These amounts exclude $5,508 million for the three months ended August 1,2009 and $4,875 million for the three months ended August 2, 2008 of receivables funded by nonrecourse debt collateralized by credit card receivables.

(c) ROIC is return on invested capital, and this rate equals our segment profit divided by average gross credit card receivables funded by Target, expressed as an annualized rate.

(d) As an annualized percentage of average gross credit card receivables.

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Credit Card Segment Results	Six Months Ended					Six Months Ended
	August 1, 2009					August 2, 2008
	Amount			Annualized		Amount			Annualized
(millions)	(in millions)			Rate(d)		(in millions)			Rate(d)
Finance charge revenue	$	732		17.2	%	$	694		16.4	%
Late fees and other revenue	178			4.2		229			5.4
Third party merchant fees	62			1.5		78			1.9
Total revenues	972			22.8		1,001			23.6
Bad debt expense	600			14.1		437			10.3
Operations and marketing expenses(a)	213			5.0		234			5.5
Depreciation and amortization	7			0.2		8			0.2
Total expenses	820			19.2		679			16.0
EBIT	152			3.6		322			7.6
Interest expense on nonrecourse debt collateralized by credit card Receivables	51					67
Segment profit	$	101				$	255
Average receivables funded by Target(b)	$	3,027				$	4,952
Segment pretax ROIC(c)	6.7		%			10.3		%

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $41 million for the six months ended August 1, 2009 and $51 million for the six months ended August 2, 2008, respectively,are recorded as an increase to operations and marketing expenses within the Credit Card Segment.

(b) Amounts represent the portion of average gross credit card receivables funded by Target. These amounts exclude $5,502 million for the six months ended August 1,2009 and $3,528 million for the six months ended August 2, 2008 of receivables funded by nonrecourse debt collateralized by credit card receivables.

(c) ROIC is return on invested capital, and this rate equals our segment profit divided by average gross credit card receivables funded by Target, expressed as an annualized rate.

(d) As an annualized percentage of average gross credit card receivables.

Spread Analysis - Total Portfolio	Three Months Ended August 1, 2009				Three Months Ended August 2, 2008
	Yield				Yield
	Amount		Annualized		Amount		Annualized
	(in millions)		Rate		(in millions)		Rate
EBIT	$	87	4.2%	(b)	$	122	5.8%	(b)
LIBOR(a)			0.3%				2.5%
Spread to LIBOR(c)	$	81	3.9%	(b)	$	70	3.3%	(b)

(a) Balance-weighted one-month LIBOR

(b) As a percentage of average gross credit card receivables.

(c) Spread to LIBOR is a metric used to analyze the performance of our total credit card portfolio because the vast majority of our portfolio earned finance charge revenue at rates tied to the Prime Rate, and the interest rate on all nonrecourse debt securitized by credit card receivables is tied to LIBOR.

Spread Analysis - Total Portfolio	Six Months Ended August 1, 2009				Six Months Ended August 2, 2008
	Yield				Yield
	Amount		Annualized		Amount		Annualized
	(in millions)		Rate		(in millions)		Rate
EBIT	$	152	3.6%	(b)	$	322	7.6%	(b)
LIBOR(a)			0.4%				2.7%
Spread to LIBOR(c)	$	135	3.2%	(b)	$	208	4.9%	(b)

(a) Balance-weighted one-month LIBOR

(b) As a percentage of average gross credit card receivables.

(c) Spread to LIBOR is a metric used to analyze the performance of our total credit card portfolio because the vast majority of our portfolio earned finance charge revenue at rates tied to the Prime Rate, and the interest rate on all nonrecourse debt securitized by credit card receivables is tied to LIBOR.

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Our primary measure of Segment profit in our Credit Card Segment is the EBIT generated by our total credit card receivables portfolio less the interest expense on nonrecourse debt collateralized by credit card receivables. We analyze this measure of profit in light of the amount of capital we have invested in our credit card receivables. In addition, we measure the performance of our overall credit card receivables portfolio by calculating the dollar spread to LIBOR at the portfolio level. This metric approximates the overall financial performance of the entire credit card portfolio we manage by measuring the difference between EBIT earned on the portfolio and a hypothetical benchmark rate financing cost applied to the entire portfolio. For the 2009 first quarter, the vast majority of our portfolio accrued finance charge revenue at rates tied to the Prime Rate, and the interest rate on all nonrecourse debt securitized by credit card receivables is tied to LIBOR. We implemented a terms change to our portfolio, effective in April 2009, that establishes a minimum annual percentage rate (APR) applied to cardholder account balances. Under this terms change, finance charges will accrue at a fixed APR if the benchmark Prime Rate is less than 6%; if the Prime Rate is greater than 6%, finance charges will accrue at the benchmark Prime Rate, plus a spread.

Credit Card Segment profit for the three months ended August 1, 2009 declined to $63 million from $74 million for the three months ended August 2, 2008. Revenues for the 2009 three months were negatively impacted by a lower Prime Rate index and lower levels of late fees assessed, almost entirely offset by terms changes implemented in 2008 and 2009.  Segment expenses increased during the three months by $35 million, driven by an increase in bad debt expense of $47 million over the comparable period as more accounts were written off, offset by lower rewards expense and strong expense management. Interest expense was favorably impacted by the lower LIBOR rates during 2009 compared with 2008. This portfolio performance, combined with the lower average receivables funded by Target, resulted in an increase in segment pretax ROIC from 8.2% in 2008 to 8.8% in 2009.

During the six months ended August 1, 2009, Credit Card Segment profit declined to $101 million from $255 million in the same period last year as a result of a decline in the spread to LIBOR earned on the overall portfolio and a 38.9 percent reduction in Target’s investment in average gross credit card receivables. Segment revenues decreased due to a decline in late fee revenue and third party merchant fees, moderately offset by higher finance charge revenue resulting from the terms changes implemented between the comparative periods. Segment expenses for the six months ended August 1, 2009 were $820 million, an increase of $140 million, or 20.7 percent, from the same period last year, reflecting higher bad debt expense, slightly offset by lower operating and marketing expenses.

Receivables Rollforward Analysis	Three Months Ended						Six Months Ended
	August 1,			August 2,			August 1,			August 2,
(millions)	2009			2008			2009			2008
Beginning gross credit card receivables	$	8,457		$	8,420		$	9,094		$	8,624
Charges at Target	843			1,021			1,646			1,968
Charges at third parties	1,768			2,258			3,432			4,406
Payments	(2,940		)	(3,358		)	(6,201		)	(6,988		)
Other	165			300			322			631
Period-end gross credit card receivables	$	8,293		$	8,641		$	8,293		$	8,641
Average gross credit card receivables	$	8,361		$	8,511		$	8,529		$	8,479
Accounts with three or more payments (60+ days) past due as a percentage of period-end gross credit card receivables	5.8		%	4.5		%	5.8		%	4.5		%
Accounts with four or more payments (90+ days) past due as a percentage of period-end gross credit card receivables	4.1		%	3.1		%	4.1		%	3.1		%

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Allowance for Doubtful Accounts	Three Months Ended						Six Months Ended
	August 1,			August 2,			August 1,			August 2,
(millions)	2009			2008			2009			2008
Allowance at beginning of period	$	1,005		$	590		$	1,010		$	570
Bad debt provision	303			256			600			437
Net write-offs(a)	(304		)	(185		)	(606		)	(346		)
Allowance at end of period	$	1,004		$	661		$	1,004		$	661
As a percentage of period-end gross
credit card receivables	12.1		%	7.6		%	12.1		%	7.6		%
Net write-offs as a percentage of average gross credit card receivables (annualized)	14.5		%	8.7		%	14.2		%	8.2		%

(a) Net write-offs include the principal amount of losses (excluding accrued and unpaid finance charges) less current period principal recoveries.

Our period-end gross credit card receivables at August 1, 2009 were $8,293 million compared with $8,641 million at August 2, 2008, a decrease of 4.0 percent. Average gross credit card receivables for the three and six months ended August 1, 2009 decreased 1.8 percent and increased 0.6 percent, respectively, compared with the same 2008 periods. This change was driven by risk management and underwriting initiatives that have significantly reduced available credit lines for higher-risk cardholders, a reduction in charge activity resulting from reductions in card usage by our guests, offset in part by the impact of an industry-wide decline in payment rates.

Other Performance Factors

Net Interest Expense

Net interest expense was $194 million and $397 million for the three and six months ended August 1, 2009, respectively, decreasing $22 million (10.3 percent) and $21 million (5.1 percent), respectively, from the same periods last year. The annualized average portfolio interest rate was 4.7 percent for the six months ended August 1, 2009 compared with 5.5 percent for the six months ended August 2, 2008.

Provision for Income Taxes

Our effective income tax rate for the second quarter of 2009 was 37.9 percent compared with 36.8 percent for the second quarter of 2008. The year-to-date effective tax rate increased to 37.3 percent in 2009 from 36.9 percent in 2008. The increase in the effective rates between periods is primarily due to transactional items and favorable resolution of specific tax uncertainties that lowered the 2008 effective rates but did not recur in 2009. The 2009 effective income tax rates are also higher due to a comparatively smaller proportion of earnings subject to rate differences between taxing jurisdictions than in 2008. The effects of these rate increases were partially offset by comparatively higher capital market returns on investments used to economically hedge the market risk in deferred compensation plans. Gains and losses on these investments are not taxable. The capital market returns from these investments in 2009 were higher compared to 2008.

Analysis of Financial Condition

Liquidity and Capital Resources

Historically, we have funded our operations and growth through internally generated funds and, if needed, debt financing. Cash flow provided by operations was $2,051 million for the six months ended August 1, 2009 compared with $1,754 million for the same period last year. The first of our two large 2009 debt maturities, $750 million, was paid during the three months ended August 1, 2009, and our final 2009 large debt maturity, $500 million, was paid in August.

Our period-end gross credit card receivables were $8,293 million at the end of the second quarter of 2009 compared with $8,641 million at the end of the second quarter of 2008, a decrease of 4.0 percent. This change was driven by risk management and underwriting initiatives that have significantly reduced available credit lines for higher-risk cardholders, a reduction in charge activity resulting from reductions in card usage by our guests, offset in part by an industry-wide decline in payment rates.

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Inventory levels increased $215 million, or 2.9 percent from August 2, 2008 to August 1, 2009, reflecting increased inventory levels required to support comparatively higher retail square footage. Accounts payable decreased by 5.6 percent over the same period.

Capital expenditures for the three and six months ended August 1, 2009 were $502 million and $1,042 million, respectively, compared with $1,006 million and $1,956 million for the three and six months ended August 2, 2008, respectively. This decrease was driven by lower capital expenditures for new stores, remodels and technology-related assets.  In light of the current operating environment, we have fewer opportunities to productively invest capital and continue to forecast capital expenditures for 2009 full year at slightly over $2 billion.

During the three months ended August 1, 2009 and through settlement of prepaid forward contracts, we repurchased 0.5 million shares of our common stock for a total cash investment of $20 million ($41.13 per share), all of which was outlaid prior to that period. During the six months ended August 1, 2009 and through settlement of prepaid forward contracts, we repurchased 1.2 million shares of our common stock for a total cash investment of $42 million ($34.62 per share), of which $33 million was outlaid prior to that period. During the three months ended August 2, 2008, we repurchased 33.8 million shares of our common stock for a total cash investment of $1,668 million ($49.30 per share), of which $233 million was outlaid prior to that period. During the six months ended August 2, 2008, we repurchased 64.3 million shares of our common stock for a total cash investment of $3,241 million ($50.37 per share), of which $372 million was outlaid prior to that period. Of the repurchases during the three and six months ended August 2, 2008, 20 million and 30 million shares, respectively, were acquired through the exercise of call options.

We paid dividends totaling $120 million and $241 million during the three and six months ended August 1, 2009, respectively, an increase of 10.0 percent and 7.5 percent, respectively, from the same period last year. We declared dividends totaling $128 million ($0.17 per share) and $249 million ($0.33 per share) during the three and six months ended August 1, 2009, respectively, an increase of 6.7 percent and 7.9 percent, respectively, over the same period last year. We have paid dividends every quarter since our first dividend was declared following our 1967 initial public offering, and it is our intent to continue to do so in the future.

Our financing strategy is to ensure liquidity and access to capital markets, to manage our net exposure to floating interest rate volatility, and to maintain a balanced spectrum of debt maturities. Within these parameters, we seek to minimize our borrowing costs.

Maintaining strong investment-grade debt ratings is a key part of our financing strategy. Our current debt ratings are as follows:

Debt Ratings	Moody’s	Standard and Poor’s	Fitch
Long-term debt	A2	A+	A
Commercial paper	P-1	A-1	F1
Securitized receivables(a)	Aa2	AA	n/a

(a) These rated securitized receivables exclude the interest in our credit card receivables sold to JPMC.

An additional source of liquidity is available to us through a committed $1.9 billion unsecured revolving credit facility obtained through a group of banks in April 2007, which will expire in April 2012. No balances were outstanding at any time during 2009 or 2008 under this credit facility.

Most of our long-term debt obligations contain covenants related to secured debt levels. In addition to a secured debt level covenant, our credit facility also contains a debt leverage covenant. We are, and expect to remain, in compliance with these covenants. Additionally, at August 1, 2009, no notes or debentures contained provisions requiring acceleration of payment upon a debt rating downgrade, except that certain outstanding notes allow the note holders to put the notes to us if within a matter of months of each other we experience both (i) a change in control; and (ii) our long-term debt ratings are either reduced and the resulting rating is non-investment grade, or our long-term debt ratings are placed on watch for possible reduction and those ratings are subsequently reduced and the resulting rating is non-investment grade.

New Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (SFAS 141(R)), which changes the accounting for business combinations and their effects on the financial statements. In April 2009, the FASB issued FSP FAS 141(R)-1, which amends the accounting for contingencies acquired in a business combination. SFAS 141(R), as amended, will generally only impact the accounting for future business combinations and therefore adoption has no current effect on

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our consolidated net earnings, cash flows or financial position.

In December 2007, the FASB issued SFAS No. 160, “Accounting and Reporting of Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (SFAS 160). SFAS 160 requires entities to report non-controlling interests in subsidiaries as equity in their consolidated financial statements. We adopted SFAS 160 at the beginning of fiscal 2009, and the adoption had no effect on our consolidated net earnings, cash flows or financial position.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (SFAS 165), which established accounting principles and disclosure requirements for subsequent events. We adopted SFAS 165 during the second quarter of 2009, and the adoption had no effect on our consolidated net earnings, cash flows or financial position.

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets an amendment of FASB Statement No. 140” (SFAS 166), which amends the derecognition guidance in FASB Statement No. 140 and eliminates the exemption from consolidation for qualifying special-purpose entities. This statement will be effective for the Corporation beginning in fiscal 2010 and adoption is not anticipated to affect our consolidated net earnings, cash flows or financial position.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167), which amends the consolidation guidance applicable to variable interest entities. The amendments will significantly affect the overall consolidation analysis under FASB Interpretation No. 46(R). This statement will be effective for the Corporation beginning in fiscal 2010 and adoption is not anticipated to affect our consolidated net earnings, cash flows or financial position.

In February 2008, the FASB issued FASB Staff Position FAS 157-2 (FSP FAS 157-2), which deferred the effective date of SFAS No. 157, “Fair Value Measurements”  for one year, as it relates to nonfinancial assets and liabilities. We adopted FSP FAS 157-2 for nonfinancial assets and liabilities at the beginning of 2009, and the adoption had no effect on our consolidated net earnings, cash flows or financial position.

In December 2008, the FASB issued FSP FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (FSP FAS 132(R)-1), which amends SFAS No. 132(R), “Employers’ Disclosures about Pensions and Other Postretirement Benefits” to require more detailed disclosures about employers’ plan assets, including employers’ investment strategies, major categories of plan assets, concentrations of risk within plan assets, and valuation techniques used to measure the fair value of plan assets. FSP FAS 132(R)-1 will be effective at the end of fiscal 2009.  We intend to adopt these additional disclosure requirements on the effective date.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments”, which amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments” and Accounting Principles Board (APB) Opinion No. 28, “Interim Financial Reporting.” The FSP requires the SFAS 107 disclosures about the fair value of financial instruments to be presented in interim financial statements in addition to annual financial statements. We adopted FSP FAS 107-1 and APB 28-1 during the second quarter of 2009, and because the FSP only required additional disclosures, the adoption did not affect our consolidated net earnings, cash flows or financial position.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments”, which modifies the recognition requirements for other-than-temporary impairment of debt securities and enhances existing disclosures with regards to other-than-temporary impairment for debt and equity securities. We adopted FSP FAS 115-2 and FAS 124-2 at the end of the first quarter of 2009. The application of the FSP had no effect on our consolidated net earnings, cash flows or financial position.

In April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability has Significantly Decreased and Identifying Transactions That Are Not Orderly”, which offers guidance on the determination of the fair value of assets and liabilities under SFAS No. 157 in the current economic environment and reaffirms that the exit price remains the objective of a fair-value measurement. We early adopted FSP FAS 157-4 in the first quarter of 2009. The application of the FSP did not have an effect on our consolidated net earnings, cash flows or financial position.

In June 2009, the FASB established that the “FASB Accounting Standards Codification” (Codification) will become the single official source of authoritative US GAAP (other than guidance issued by the SEC), superseding existing FASB, American Institute of Certified Public Accountants (AICPA), Emerging Issues Task Force (EITF), and related literature. After that date, only one level of authoritative US GAAP will exist. All other literature will be considered non-authoritative.

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The Codification does not change US GAAP. The Codification becomes effective for interim and annual periods ending on or after September 15, 2009. We will utilize the Codification beginning in the third quarter of fiscal 2009.

Outlook for Fiscal Year 2009

In the third and fourth quarters of 2009, the single biggest variable in our performance remains the pace of sales in our Retail Segment.  From a comparison standpoint, last year’s third and fourth quarter comparable-store sales numbers create the potential for better year-over-year trends, even without any change in this year’s pace of sales. This is most notable in the fourth quarter, when we will be comparing against a 5.9 percent comparable-store sales decline in 2008. However, we continue to be cautious in our outlook, and our fourth quarter inventory commitments are not based on any expected improvement in our sales trend other than the benefit provided by a relatively easier comparison.

With regard to gross margin rate, we believe underlying trends of sales mix and margin rate within categories are likely to continue, although with different likely year-over-year outcomes in the next two quarters.  Specifically, we envision moderate gross margin rate compression in the third quarter as we expect a smaller benefit from lower year-over-year transportation costs than we experienced in the second quarter.  In the fourth quarter, we expect to return to gross margin rate expansion as we cycle against last-year’s unusually high seasonal markdowns.

Considering our Retail Segment expenses, we continue to expect strong control across the enterprise, but expect that the year-over-year trends in dollars will not be as strong in the second half of this year as they were in the first half, due to timing of some expenses and particularly because expenses in the fourth quarter of 2008 were very lean.  For the full year, this likely will mean a low single-digit percentage increase in expense dollars.

In our Credit Card Segment, we expect year-over-year reductions in gross receivables to continue for the balance of this year, with year-end 2009 gross receivables approximately a billion dollars lower than year-end 2008. We expect the decline to occur as a result of tighter underwriting standards as well as reduced cardholder charge activity. We expect dollar delinquencies to remain stable, and we expect quarterly dollar write-offs in the next two quarters to be similar to our experience in the first two quarters of 2009, with some likelihood for a slightly better result in the third quarter.

We continue to expect to generate in excess of $4 billion of cash flow from operations this year and continue to expect to reinvest slightly more than $2 billion of capital in our Retail Segment.  As expected, our cash flow has enabled the retirement of our debt maturities this year with internally generated cash flow, as we retired our second and final large 2009 maturity subsequent to quarter-end.  As a result, it remains likely that we would only approach the term debt markets in 2009 if presented with a unique opportunity.

Forward-Looking Statements

This report contains forward-looking statements, which are based on our current assumptions and expectations.  These statements are typically accompanied by the words “expect,” “may,” “could,” “believe,” “would,” “might,” “anticipates,” or words of similar import. The principal forward-looking statements in this report include: the adequacy of our reserves in light of the expected outcome of litigation and tax uncertainties; for our Retail Segment, our outlook for comparable-store sales, inventory commitments, sales mix, gross margin rate and SG&A expense levels; for our Credit Card Segment, our outlook for gross receivable portfolio size, dollar delinquencies and future write-offs of current receivables, portfolio performance, profitability, and returns on invested capital; the expected cash flow from operations; our estimated earnings per share; the expected compliance with debt covenants; the anticipated impact of new accounting pronouncements; our forecasted capital expenditures; our intentions regarding future dividends; and the number of stores to be opened in 2009.

All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Although we believe there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The most important factors which could cause our actual results to differ from our forward-looking statements are set forth on our description of risk factors in Item 1A to our Form 10-K for the fiscal year ended January 31, 2009, which should be read in conjunction with the forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the other primary risk exposures or management of market risks from those disclosed in our Form 10-Q for the quarter ended May 2, 2009 or Form 10-K for the fiscal year ended January 31, 2009.

Item 4.  Controls and Procedures

As of the end of the period covered by this quarterly report, we conducted an evaluation, under supervision and with the participation of management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (Exchange Act). Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the Securities and Exchange Commission (SEC) under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

We are a defendant in a civil lawsuit filed by the California Attorney General in October 2008 alleging that we sold certain products that contained volatile organic compounds in excess of regulated limits (windshield washer fluid and air fresheners) and other products that were not approved for sale in California (gas cans and gas generators). The case is in its early stages and settlement discussions are continuing. We anticipate that any resolution of this matter is likely to exceed $100,000 but will not be material to our financial position, results of operations or cash flows. In addition, we are also one of many defendants in a lawsuit filed on February 13, 2008, by the State of California involving environmental matters that may involve potential monetary sanctions in excess of $100,000. The allegation, initially made by the California Air Resources Board in April 2006, involves a non-food product (hairspray) that allegedly contained levels of a volatile organic compound in excess of permissible levels. We anticipate that the settlement, to be fully indemnified by the vendor, is likely to exceed $100,000 but will not be material to our financial position, results of operations or cash flows.  In addition, we are a defendant in a civil lawsuit filed by the California Attorney General in June 2009 alleging that we did not handle and dispose of certain unsold products as a hazardous waste.  The case is in its early stages.  We anticipate that this lawsuit may involve potential monetary sanctions in excess of $100,000, but will not be material to our financial position, results of operations or cash flows.

We are the subject of an ongoing Environmental Protection Agency (EPA) investigation for alleged violations of the Clean Air Act (CAA).  In March 2009, the EPA issued a Finding of Violation (FOV) related to alleged violations of the CAA, specifically the National Emission Standards for Hazardous Air Pollutants (NESHAP) promulgated by the EPA for asbestos.  The FOV pertains to the remodeling of 36 Target stores that occurred between January 1, 2003 and October 28, 2007. The EPA FOV process is ongoing and no specific relief has been sought to date by the EPA. We anticipate that any resolution of this matter will be in the form of monetary  penalties  that are likely to exceed $100,000 but will not be material to our financial position, results of operations or cash flows.

For a description of other legal proceedings, see Note 5 of the Notes to Consolidated Financial Statements included in Item 1, Financial Statements.

The American Jobs Creation Act of 2004 requires SEC registrants to disclose if they have been required to pay certain penalties for failing to disclose to the Internal Revenue Service their participation in listed transactions. We have not been required to pay any of the penalties set forth in Section 6707A(e)(2) of the Internal Revenue Code.

Item 1A.  Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended January 31, 2009.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information with respect to purchases of Target common stock made during the quarter ended August 1, 2009, by the Corporation or any “affiliated purchaser” of the Corporation, as defined in Rule 10b-18(a)(3) under the Exchange Act.

In November 2007, our Board of Directors authorized the repurchase of $10 billion of our common stock. Since the inception of this share repurchase program, we have repurchased 94.9 million common shares for a total cash investment of $4,882 million ($51.44 per share). In November 2008 we announced that, in light of our business outlook, we were temporarily suspending our open-market share repurchase program.

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				Total Number	Approximate
				of Shares	Dollar Value of
				Purchased as	Shares that
	Total			Part of	May Yet Be
	Number	Average		Publicly	Purchased
	of Shares	Price Paid		Announced	Under the
Period	Purchased	per Share		Program	Program
May 3, 2009 through May 30, 2009	—	$	—	94,412,936	$	5,138,031,949
May 31, 2009 through July 4, 2009	—	—		94,412,936	5,138,031,949
July 5, 2009 through August 1, 2009	496,551	41.13		94,909,487	5,117,606,373
	496,551	$	41.13	94,909,487	$	5,117,606,373

The table above includes shares of common stock reacquired from team members who wish to tender owned shares to satisfy the tax withholding on equity awards as part of our long-term incentive plans or to satisfy the exercise price on stock option exercises.  In the second quarter of 2009, no suchshares were acquired.

The table above includes shares reacquired upon settlement of prepaid forward contracts. For the three months ended August 1, 2009, 0.5 million shares were reacquired through these contracts. At August 1, 2009, we held asset positions in prepaid forward contracts for 1.3million shares of our common stock, for a total cash investment of $55 million, or $41.11 per share.

Item 3.  Defaults Upon Senior Securities

Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

a)Target Corporation held its Annual Shareholders’ Meeting on May 28, 2009.

b)The shareholders voted to determine that the number of directors constituting the Company’s Board of Directors will be 12.  The vote was 407,148,127 for, 150,929,833 against, and 1,584,659 abstentions.

c)The shareholders voted for the election of four nominees to serve as Class III directors for three-year terms expiring in 2012 and until their successors are elected. The vote was as follows:

Name of Candidate	For	Against	Withold/Abstain
Mary N. Dillon	418,082,033	5,522,651	1,249,395
George W. Tamke	415,836,385	7,565,105	1,452,593
Solomon D. Trujillo	411,115,136	9,408,797	1,579,882
Richard M. Kovacevich	408,431,847	6,755,349	9,640,577
James L. Donald	123,561,947	—	14,007,691
William A. Ackman	107,687,703	—	27,130,665
Ronald J. Gilson1	45,931,607	86,975,381	1,899,590
Michael L. Ashner	45,166,506	—	89,651,862
Richard W. Vague	43,581,336	—	91,237,032

1 Mr. Gilson was a contingent nominee and was standing for election only if the proposal described in b) above was rejected by shareholders, which would have resulted in a Board consisting of 13 directors.

The directors elected at the meeting are: Mary N. Dillon, George W. Tamke, Solomon D. Trujillo and Richard M. Kovacevich. Other directors whose terms of office continued after the meeting were: Roxanne S. Austin, Calvin Darden, James A. Johnson, Mary E. Minnick, Anne M. Mulcahy, Derica W. Rice, Stephen W. Sanger and Gregg W. Steinhafel.

d)The shareholders voted to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of Target Corporation for fiscal year 2009. The vote was 550,451,924 for, 7,061,773 against and 2,148,997 abstentions.

e)The shareholders voted to approve the performance measures available under the Target Corporation Long-Term   Incentive Plan.  The vote was 537,347,855 for, 17,634,471 against and 4,674,551 abstentions.

f)The shareholders voted on a shareholder proposal to adopt a policy to require an annual advisory vote on executive compensation.  The vote was 233,412,303 for, 284,456,300 against, and 41,791,329 abstentions.

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Item 5.  Other Information

Not applicable.

Item 6.  Exhibits

(3)A	Restated Articles of Incorporation (as amended May 24, 2007) (1)
(3)B	By-laws (as amended through November 11, 1998) (2)
(10)D	Target Corporation Long-Term Incentive Plan (as amended May 28, 2009)
(12)	Statements of Computations of Ratios of Earnings to Fixed Charges
(31)A	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(31)B	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(32)A	Certification of the Chief Executive Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(32)B	Certification of the Chief Financial Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

(1)	Incorporated by reference to Exhibit (3)A to the Registrant’s Form 8-K Report filed May 25, 2007
(2)	Incorporated by reference to Exhibit (3)(ii) to the Registrant’s Form 10-Q for the quarter ended October 31, 1998

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Signature

Pursuant to the requirements 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.

	TARGET CORPORATION
Dated: August 28, 2009	By:	/s/ Douglas A. Scovanner
		Douglas A. Scovanner
		Executive Vice President,
		Chief Financial Officer
		and Chief Accounting Officer

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EXHIBIT INDEX

Exhibit	Description	Manner of Filing
(3)A	Restated Articles of Incorporation (as amended May 24, 2007)	Incorporated by Reference
(3)B	By-Laws (as amended through November 11, 1998)	Incorporated by Reference
(10)D	Target Corporation Long-Term Incentive Plan (as amended on May 28, 2009)	Filed Electronically
(12)	Statements of Computations of Ratios of Earnings to Fixed Charges	Filed Electronically
(31)A	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Electronically
(31)B	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Electronically
(32)A	Certification of the Chief Executive Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed Electronically
(32)B	Certification of the Chief Financial Officer As Adopted Pursuant to 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed Electronically
101.INS	XBRL Instance Document	Filed Electronically
101.SCH	XBRL Taxonomy Extension Schema	Filed Electronically
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed Electronically
101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed Electronically
101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed Electronically
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed Electronically

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EX-10.(D)

Exhibit 10(D)

TARGET CORPORATION

LONG-TERM INCENTIVE PLAN

(As amended and restated on May 28, 2009)

ARTICLE I

ESTABLISHMENT OF THE PLAN

1.1PLAN NAME.  This plan is known as the “Target Corporation Long-Term Incentive Plan” (hereinafter called the “Plan”).

1.2PURPOSE.  The purpose of the Plan is to advance the performance and long-term growth of the Company by offering long-term incentives to directors and employees of the Company and its Subsidiaries and such other Participants who the Plan Committee determines will contribute to such performance and growth inuring to the benefit of the shareholders of the Company.  This Plan is also intended to facilitate recruiting and retaining personnel of outstanding ability.

ARTICLE II

DEFINITIONS

2.1AWARD.  An “Award” is a grant of Stock Options, Stock Appreciation Rights, Dividend Equivalents, Performance Awards, Restricted Stock or Restricted Stock Units under the Plan.

2.2BOARD.  The “Board” is the Board of Directors of the Company.

2.3CASH PROCEEDS.  “Cash Proceeds” means the cash actually received by the Company for the purchase price payable upon exercise of a Stock Option plus the maximum tax benefit that could be realized by the Company as a result of the exercise of such Stock Options, which tax benefit shall be determined by multiplying (a) the amount that is deductible as a result of any such Stock Option exercise (currently equal to the amount upon which the Participant’s tax withholding obligation is calculated), times (b) the maximum federal corporate income tax rate for the year of exercise.  To the extent a Participant pays the exercise price and/or withholding taxes with shares, Cash Proceeds shall not be calculated with respect to the amounts so paid.

2.4CHANGE IN CONTROL.  A “Change in Control” shall be deemed to have occurred if:

(a)50% or more of the directors of the Company shall be persons other than persons

(i)for whose election proxies shall have been solicited by the Board, or

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(ii)who are then serving as directors appointed by the Board to fill vacancies on the Board caused by death or resignation (but not by removal) or to fill newly-created directorships, or

(b)30% or more of the outstanding voting power of the Voting Stock of the Company is acquired or beneficially owned (as defined in Article IV of the Restated Articles of Incorporation, as amended, of the Company) by any person (as defined in Article IV of the Restated Articles of Incorporation, as amended, of the Company), other than an entity resulting from a Business Combination in which clauses (x) and (y) of Section 2.4(c) apply, or

(c)the consummation of a merger or consolidation of the Company with or into another entity, a statutory share exchange, a sale or other disposition (in one transaction or a series of transactions) of all or substantially all of the Company’s assets or a similar business combination (each, a “Business Combination”), in each case unless, immediately following such Business Combination, (x) all or substantially all of the beneficial owners of the Company’s Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the voting power of the then outstanding shares of voting stock (or comparable voting equity interests) of the surviving or acquiring entity resulting from such Business Combination (including such beneficial ownership of an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), in substantially the same proportions (as compared to the other beneficial owners of the Company’s Voting Stock immediately prior to such Business Combination) as their beneficial ownership of the Company’s Voting Stock immediately prior to such Business Combination, and (y) no person (as defined in Article IV of the Restated Articles of Incorporation, as amended, of the Company) beneficially owns, directly or indirectly, 30% or more of the voting power of the outstanding voting stock (or comparable equity interests) of the surviving or acquiring entity (other than a direct or indirect parent entity of the surviving or acquiring entity, that, after giving effect to the Business Combination, beneficially owns, directly or indirectly, 100% of the outstanding voting stock (or comparable equity interests) of the surviving or acquiring entity), or

(d)approval by the shareholders of a definitive agreement or plan to liquidate or dissolve the Company.

For purposes of this Section 2.4, “Voting Stock” has the same meaning as defined in Article IV of the Restated Articles of Incorporation, as amended, of the Company.

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2.5CODE.  The “Code” is the Internal Revenue Code of 1986, as amended, and rules and regulations thereunder, as now in force or as hereafter amended.

2.6COMPANY.  The “Company” is Target Corporation, a Minnesota corporation, and any successor thereof.

2.7COMMON STOCK.  “Common Stock” is the common stock, $.0833 par value per share (as such par value may be adjusted from time to time) of the Company.

2.8DATE OF GRANT.  The “Date of Grant” of an Award is the date designated in the resolution by the Plan Committee as the date of an Award, which shall not be earlier than the date of the resolution and action thereon by the Plan Committee.  In the absence of a designated date or a fixed method of computing such date being specifically set forth in the Plan Committee’s resolution, then the Date of Grant shall be the date of the Plan Committee’s resolution or action.

2.9DIVIDEND EQUIVALENT.  A “Dividend Equivalent” is a right to receive an amount equal to the regular cash dividend paid on one share of Common Stock.  Dividend Equivalents may only be granted in connection with the grant of an Award that is based on but does not consist of shares of Common Stock (whether or not restricted).  The number of Dividend Equivalents so granted shall not exceed the number of related stock-based rights.  (For example, the number of Dividend Equivalents granted in connection with a grant of Stock Appreciation Rights may equal the number of such Stock Appreciation Rights, even though the number of shares actually paid upon exercise of those Stock Appreciation Rights necessarily will be less than the number of Stock Appreciation Rights and Dividend Equivalents granted.)  Dividend Equivalents shall be subject to such terms and conditions as may be established by the Plan Committee, but they shall expire no later than the date on which their related stock-based rights are either exercised, expire or are forfeited (whichever occurs first).  The amounts payable due to a grant of Dividend Equivalents may be paid in cash, either currently or deferred, or converted into shares of Common Stock, as determined by the Plan Committee.

2.10EXCHANGE ACT.  The “Exchange Act” is the Securities Exchange Act of 1934, as amended, and rules and regulations thereunder, as now in force or as hereafter amended.

2.11FAIR MARKET VALUE.

(a)Solely for purposes of determining the exercise price of a Stock Option or Stock Appreciation Right, “Fair Market Value” of a share of Common Stock on any date is the Volume Weighted Average Price for such stock as reported for such stock by Bloomberg L.P. on such date, or in the absence of such report the Volume Weighted Average Price for such stock as reported for such stock by the New York Stock Exchange on such date or, if no sale has been recorded by Bloomberg L.P. or the New York Stock

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Exchange on such date, then on the last preceding date on which any such sale shall have been made in the order of primacy indicated above.

(b)For all other purposes of the Plan, “Fair Market Value” of a share of Common Stock shall be the amount determined by the Company using such criteria as it shall determine, in its sole discretion, to be appropriate for valuation.

2.12INCENTIVE STOCK OPTIONS.  An “Incentive Stock Option” is a Stock Option that is intended to qualify as an “incentive stock option” under Section 422 of the Code.

2.13NON-QUALIFIED OPTIONS.  A “Non-Qualified Option” is a Stock Option that is not intended to qualify as an “incentive stock option” under Section 422 of the Code.

2.14PARTICIPANT.  A “Participant” is a person who has been designated as such by the Plan Committee and granted an Award under this Plan pursuant to Article III hereof.

2.15PERFORMANCE GOALS.  “Performance Goals” are the performance conditions, if any, established pursuant to Section 4.1 hereof by the Plan Committee in connection with an Award.

2.16PERFORMANCE PERIOD.  The “Performance Period” with respect to a Performance Award is a period of not less than one calendar year or one fiscal year of the Company, beginning not earlier than the year in which such Performance Award is granted, which may be referred to herein and by the Plan Committee by use of the calendar or fiscal year in which a particular Performance Period commences.

2.17PERFORMANCE AWARD.  A “Performance Award” is any of: a number of shares of Common Stock subject to Performance Goals (“Performance Shares”), a right to receive a number of shares of Common Stock subject to Performance Goals (“Performance Share Units”), or a cash amount subject to Performance Goals (“Performance Units”), determined (in all cases) in accordance with Article IV of this Plan based on the extent to which the applicable Performance Goals are achieved.  A Performance Award shall be of no value to a Participant unless and until earned in accordance with Article IV hereof.

2.18PLAN COMMITTEE.  The “Plan Committee” is the committee described in Section 8.1 hereof.

2.19PLAN YEAR.  The “Plan Year” shall be a fiscal year of the Company falling within the term of this Plan.

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2.20RESTRICTED STOCK.  “Restricted Stock” is Common Stock granted subject to terms and conditions, including a risk of forfeiture, established by the Plan Committee pursuant to Article VI of this Plan.

2.21RESTRICTED STOCK UNIT.  A “Restricted Stock Unit” is a right to receive one share of Common Stock at a future date that has been granted subject to terms and conditions, including a risk of forfeiture, established by the Plan Committee pursuant to Article VI of this Plan.

2.22STOCK APPRECIATION RIGHT.  A “Stock Appreciation Right” is a right to receive, upon exercise of that right, an amount, which may be paid in cash, shares of Common Stock or a combination thereof in the discretion of the Plan Committee, equal to the difference between the Fair Market Value of one share of Common Stock as of the date of exercise and the exercise price for that right as determined by the Plan Committee on or before the Date of Grant.  Stock Appreciation Rights may be granted in tandem with Stock Options or other Awards or may be freestanding.

2.23STOCK OPTION.  A “Stock Option” is a right to purchase from the Company at any time not more than ten years following the Date of Grant, one share of Common Stock for an exercise price not less than the Fair Market Value of a share of Common Stock on the Date of Grant, subject to such terms and conditions established pursuant to Article V hereof.  Stock Options may be either Non-Qualified Options or Incentive Stock Options.

2.24SUBSIDIARY CORPORATION.  The terms “Subsidiary” or “Subsidiary Corporation” mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, in which each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain as determined at the point in time when reference is made to such “Subsidiary” or “Subsidiary Corporation” in this Plan.

ARTICLE III

GRANTING OF AWARDS TO PARTICIPANTS

3.1ELIGIBLE PARTICIPANTS.  Awards may be granted by the Plan Committee to any employee of the Company or a Subsidiary Corporation, including any employee who is also a director of the Company or a Subsidiary Corporation.  Awards other than grants of Incentive Stock Options may also be granted to (a) a director of the Company who is not an employee of the Company or a Subsidiary Corporation and (b) any individual or entity, other than an employee, who provides services to the Company or a Subsidiary Corporation in the capacity of an advisor or consultant. References in this Plan to “employment” and similar terms (except “employee”) shall include the providing of services in the capacity of a director, advisor or consultant, and references to termination of employment shall mean termination of the relationship (employee, director, advisor or consultant) under which the Award was granted, even if the person

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continues in another relationship. A person who has been engaged by the Company for employment shall be eligible for Awards other than Incentive Stock Options, provided such person actually reports for and commences such employment within 90 days after the Date of Grant.  Incentive Stock Options may be granted only to individuals who are employees on the Date of Grant.

3.2DESIGNATION OF PARTICIPANTS.  At any time and from time to time during the Plan Year, the Plan Committee may designate the employees of the Company and its Subsidiaries and other Participants eligible for Awards.

3.3ALLOCATION OF AWARDS.  Contemporaneously with the designation of a Participant pursuant to Section 3.2 hereof, the Plan Committee shall determine the size, type and Date of Grant for each Award, taking into consideration such factors as it deems relevant, which may include the following:

(a)the total number of shares of Common Stock available for Awards under the Plan;

(b)the work assignment or the position of the Participant and its sensitivity and/or impact in relationship to the profitability and growth of the Company and its Subsidiaries; and

(c)the Participant’s performance in reference to such factors.

The Plan Committee may grant a Participant only one type of Award or it may grant any combination of Awards in whatever relationship one to the other, if any, as the Plan Committee in its discretion so determines.

3.4NOTIFICATION TO PARTICIPANTS AND DELIVERY OF DOCUMENTS.  As soon as practicable after such determinations have been made, each Participant shall be notified of (a) his/her designation as a Participant, (b) the Date of Grant, (c) the number and type of Awards granted to the Participant, (d) in the case of Performance Awards, the Performance Period and Performance Goals, and (e) in the case of Restricted Stock or Restricted Stock Units, the Restriction Period. The Participant shall thereafter be supplied with written evidence of any such Awards.

ARTICLE IV

PERFORMANCE AWARDS

4.1ESTABLISHMENT OF PERFORMANCE GOALS.  Performance Goals applicable to a Performance Award shall be established by the Plan Committee in its absolute discretion on or before the Date of Grant and not more than a reasonable period of time after the beginning of the relevant Performance Period.  Such Performance Goals may include or be based upon any one or more of the following criteria:  net sales; comparable store sales; total revenue; gross margin rate; selling, general and administrative expense rate; earnings before interest, taxes, depreciation and

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amortization; earnings before interest and taxes; earnings before taxes; net earnings; earnings per share; Target Corporation share price; total shareholder return; return on equity; return on sales; return on assets; return on invested capital; cash flow return on investment; economic value added; credit card segment profitability; credit card segment pre-tax return on invested capital; credit card spread to LIBOR; operating cash flow; free cash flow; working capital; interest coverage; net debt to earnings before interest, taxes, depreciation, amortization and rent expense ratio; debt leverage; and total net debt.  Performance Goals may be absolute in their terms or be measured against or in relationship to the performance of other companies or indices, whether comparably, similarly or otherwise situated to the Company.  Performance Goals may be based on the Company’s consolidated results or the results of any segment or other subset of the Company’s business, and may be calculated in accordance with generally accepted accounting principles or any other management accounting principle.  At any time prior to distribution of a Performance Award, the Plan Committee may, in its sole discretion, modify the Performance Goals applicable to such Performance Award if it determines that unforeseen events have occurred which have had a substantial effect on the Performance Goals and such unforeseen events would otherwise make application of the original Performance Goals unfair; provided, however, that no such change or modification may be made to the extent it increases the amount of compensation payable to any Participant who is a “covered employee” within the meaning of Code Section 162(m).

4.2LEVELS OF PERFORMANCE REQUIRED TO EARN PERFORMANCE AWARDS.  At or about the same time that Performance Goals are established for a specific period, the Plan Committee shall in its absolute discretion establish the percentage of the Performance Awards granted for such Performance Period which shall be earned by the Participant for various levels of performance measured in relation to achievement of Performance Goals for such Performance Period.

4.3OTHER RESTRICTIONS.  The Plan Committee shall determine the terms and conditions applicable to any Performance Award, which may include restrictions on the delivery of Common Stock payable in connection with the Performance Award and restrictions that could result in the future forfeiture of all or part of any Common Stock earned. The Plan Committee may provide that shares of Common Stock issued in connection with a Performance Award be held in escrow and/or legended.

4.4NOTIFICATION TO PARTICIPANTS.  Promptly after the Plan Committee has established or modified the Performance Goals with respect to a Performance Award, the Participant shall be provided with written notice of the Performance Goals so established or modified.

4.5MEASUREMENT OF PERFORMANCE AGAINST PERFORMANCE GOALS.  The Plan Committee shall, as soon as practicable after the close of a Performance Period, determine:

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(a)the extent to which the Performance Goals for such Performance Period have been achieved; and

(b)the percentage of the Performance Awards earned as a result.

Notwithstanding the foregoing, if and to the extent the applicable Performance Award agreement permits, the Plan Committee may, in its sole discretion, reduce the percentage of any Performance Award otherwise determined for a Performance Period, and such reduced percentage shall be the amount earned by the Participant. All determinations of the Plan Committee shall be absolute and final as to the facts and conclusions therein made and be binding on all parties. Promptly after the Plan Committee has made the foregoing determination, each Participant who has earned Performance Awards shall be notified, in writing thereof. For all purposes of this Plan, notice shall be deemed to have been given the date action is taken by the Plan Committee making the determination.  Participants may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of all or any portion of their Performance Awards during the Performance Period, except that Performance Awards may be transferable by assignment by a Participant to the extent provided in the applicable Performance Award agreement.

4.6TREATMENT OF PERFORMANCE AWARDS EARNED.  Upon the Plan Committee’s determination that a percentage of any Performance Awards have been earned for a Performance Period, Participants to whom such earned Performance Awards have been granted and who have been (or were) in the employ of the Company or a Subsidiary thereof continuously from the Date of Grant, subject to the exceptions set forth at Section 4.9 and Section 4.10 hereof, shall be entitled, subject to the other conditions of this Plan, to payment in accordance with the terms and conditions of their Performance Awards.  Such terms and conditions may permit or require that any applicable tax withholding be deducted from the amount payable.  Performance Awards shall under no circumstances become earned or have any value whatsoever for any Participant who is not in the employ of the Company or its Subsidiaries continuously during the entire Performance Period for which such Performance Award was granted, except as provided at Section 4.9 or Section 4.10 hereof.

4.7DISTRIBUTION.  Distributions payable pursuant to Section 4.6 above shall be made as soon as practicable after the Plan Committee determines the Performance Awards have been earned unless the provisions of Section 4.8 hereof are applicable to a Participant.

4.8DEFERRAL OF RECEIPT OF PERFORMANCE AWARD DISTRIBUTIONS.  With the consent of the Plan Committee, a Participant who has been granted a Performance Award may by compliance with the then applicable procedures under the Plan irrevocably elect in writing to defer receipt of all or any part of any distribution associated with that Performance Award.  The terms and conditions of any such deferral, including but not limited to, the period of time for, and form of, election; the manner and method of payout; the plan and form in which the deferred amount shall be held; the interest equivalent or other payment that shall accrue pending its payout; and

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the use and form of Dividend Equivalents in respect of stock-based units resulting from such deferral, shall be as determined by the Plan Committee.  The Plan Committee may, at any time and from time to time, but prospectively only, amend, modify, change, suspend or cancel any and all of the rights, procedures, mechanics and timing parameters relating to such deferrals. An election made prior to December 31, 2008 to defer receipt of any distribution associated with a Performance Award relating to Performance Periods ending after December 31, 2004 is subject to the provisions of Appendix A.

4.9NON-DISQUALIFYING TERMINATION OF EMPLOYMENT.  Except for Section 4.10 hereof, the only exceptions to the requirement of continuous employment during a Performance Period for Performance Award distribution are termination of a Participant’s employment by reason of death (in which event the Performance Award may be transferable by will or the laws of descent and distribution only to such Participant’s beneficiary designated to receive the Performance Award or to the Participant’s applicable legal representatives, heirs or legatees), total and permanent disability, with the consent of the Plan Committee, normal or late retirement or early retirement, with the consent of the Plan Committee, or transfer of an executive in a spin-off, with the consent of the Plan Committee, occurring during the Performance Period applicable to the subject Performance Award. In such instance a distribution of the Performance Award shall be made at the end of the Performance Period, and the percentage of the total Performance Award that would have been earned during the Performance Period shall be earned and paid out; provided, however, in a spin-off situation the Plan Committee may set additional conditions, such as, without limiting the generality of the foregoing, continuous employment with the spin-off entity. If a Participant’s termination of employment does not meet the criteria set forth above, but the Participant had at least 15 years of employment with the Company or a Subsidiary or any combination thereof, the Plan Committee may allow distribution of the percentage (or a portion thereof) of the total Performance Award that is earned for the Performance Period, subject to any conditions that the Plan Committee shall determine.

4.10CHANGE IN CONTROL.  In the event of a Change in Control, the Performance Period shall be deemed to have ended and a pro rata portion of all outstanding Performance Awards under the Plan shall be deemed to have been earned. Specifically, the pro rata amount earned shall be determined by multiplying 100% of each Performance Award by a fraction, the numerator of which shall be the number of months that have elapsed in the applicable Performance Period prior to the Change in Control and the denominator of which shall be the total number of months in the Performance Period. Distribution of the amount deemed earned shall be made within ten days after the Change in Control or later if so provided in the applicable Award agreement, a related deferral election or, if applicable, Appendix A.

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ARTICLE V

STOCK OPTIONS AND

STOCK APPRECIATION RIGHTS

5.1NON-QUALIFIED OPTION.  Non-Qualified Options granted under the Plan are Stock Options that are not intended to be Incentive Stock Options under the provisions of Section 422 of the Code. Non-Qualified Options shall be evidenced by written agreements in such form and not inconsistent with the Plan as the Plan Committee shall in its sole discretion approve from time to time, which agreements shall specify the number of shares to which they pertain and the purchase price of such shares.

5.2INCENTIVE STOCK OPTION.  Incentive Stock Options granted under the Plan are Stock Options that are intended to be “incentive stock options” under Section 422 of the Code, and the Plan shall be administered, except with respect to the right to exercise options after termination of employment, to qualify Incentive Stock Options issued hereunder as incentive stock options under Section 422 of the Code. An Incentive Stock Option shall not be granted to an employee who owns, or is deemed under Section 424(d) of the Code to own, stock of the Company (or of any parent or Subsidiary of the Company) possessing more than 10% of the total combined voting power of all classes of stock therein. The aggregate Fair Market Value (determined as of the time the option is granted) of the stock with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all incentive stock option plans of the Company or any parent or Subsidiary of the Company) shall not exceed $100,000. Incentive Stock Options shall be evidenced by written agreements in such form and not inconsistent with the Plan as the Plan Committee shall in its sole discretion approve from time to time, which agreements shall specify the number of shares to which they pertain and the purchase price of such shares.

5.3OPTION TERMS.  Stock Options granted under this Plan shall be subject to the following terms and conditions:

(a)Option Period.  Each Stock Option shall expire and all rights to purchase shares thereunder shall cease not more than ten years after its Date of Grant or on such date prior thereto as may be fixed by the Plan Committee, or on such other date as is provided by this Plan in the event of termination of employment, death or reorganization.  No Stock Option shall permit the purchase of any shares thereunder during the first year after its Date of Grant, except as provided in Section 5.5 hereof or as otherwise determined by the Plan Committee.

(b)Exercise Price.  The purchase price per share payable upon exercise of a Stock Option shall not be less than the Fair Market Value of a share of Common Stock on the Date of Grant of the Stock Option.

(c)Transferability and Termination of Options.  During the lifetime of an individual to whom a Stock Option is granted, the Stock Option may be exercised only by such individual and only while such individual is an employee of the Company or a Subsidiary and only if the Participant has been continuously so employed by any one or combination thereof since the Date of Grant of the Stock Option, provided, however, that if the

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employment of such Participant by the Company or a Subsidiary Corporation terminates, the Stock Option may additionally be exercised as follows, or in any other manner provided by the Plan Committee, but in no event later than ten years after the Date of Grant of the Stock Option, except as set forth in (ii) and (v) below:

(i)If a Participant’s termination of employment occurs by reason of normal or late retirement under any retirement plan of the Company or its Subsidiaries, such Participant’s Stock Options may be exercised within five years after the date of such termination of employment.  If a Participant’s termination of employment occurs by reason of early retirement under any retirement plan of the Company or its Subsidiaries, or by reason of the transfer of a Participant in a spin-off, or by reason of total and permanent disability, as determined by the Plan Committee, without retirement, then such Participant’s Stock Options shall be exercisable for a period of up to five years after the date of such termination of employment if the Plan Committee consents to such an extension.  During the extension period, the right to exercise Stock Options, if any, accruing in installments, shall continue unless the Plan Committee provides otherwise; provided, however, that if the Stock Options are Incentive Stock Options all installments shall be immediately exercisable; and provided further, that the Plan Committee may set additional conditions, such as, without limiting the generality of the foregoing, an agreement to not provide services to a competitor of the Company and its Subsidiaries and/or continuous employment with a spin-off entity.

(ii)If a Participant’s termination of employment occurs by reason of death, then such Participant’s outstanding Stock Options shall all become immediately exercisable and may be exercised within five years after the date of death or the life of the option, whichever is less, but in the case of Non-Qualified Options in no event less than one year after the date of death, unless the Plan Committee provides otherwise.

(iii)If a Participant’s termination of employment occurs for any reason other than as specified in Section 5.3(c)(i) or (ii) hereof, the Participant has been employed by the Company or a Subsidiary or any combination for more than 15 years, and if the Plan Committee so approves, then such Participant’s Stock Options may be exercised within a period of up to five years after the date of termination of employment.  During the extension period, the right to exercise options, if any, accruing in installments shall continue

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unless the Plan Committee provides otherwise; provided, however, the Plan Committee may set additional conditions.

(iv)If a Participant’s termination of employment occurs for any reason other than as specified in Section 5.3(c)(i) or (ii) hereof and the Plan Committee has not approved an extension, then, except as provided below and only with respect to installments that have as of the date of termination already accrued, such Participant’s Stock Options may be exercised within ninety days after the date of such termination of employment except in the case of Participants who would at the time be subject to the provisions of Section 16(b) of the Exchange Act, in which instance the period of exercise shall be two hundred ten days after termination.  Notwithstanding the foregoing, those Participants whose employment is terminated because of deliberate and serious disloyal or dishonest conduct in the course of employment that justifies and results in prompt discharge for specific cause under the established policies and practices of the Company as interpreted by the Plan Committee shall have no additional period after termination of employment in which to exercise their options. Examples of such deliberate and serious disloyal or dishonest conduct would include material unlawful conduct, material and conscious falsification or unauthorized disclosure of important records, embezzlement or unauthorized conversion of property, serious violation of conflict of interest or vendor relations policies, and misuse or disclosure of significant trade secrets or other information likely to be of use to the detriment of the Company or its interests.

(v)Rights accruing to a Participant under Sections 5.3(c)(i), 5.3(c)(iii) and 5.3(c)(iv) may, upon the death of a Participant subsequent to his/her termination of employment, be exercised by his/her duly designated beneficiary or otherwise by his/her applicable legal representatives, heirs or legatees to the extent vested in and unexercised or perfected by the Participant at the date of his/her death.  In the case of Non-Qualified Options, the period for such exercise shall not expire less than one year after the date of the Participant’s death, unless the Plan Committee provides otherwise.

(vi)Absence on a leave of absence approved by the Plan Committee shall not be deemed a termination or interruption of continuous employment for the purposes of the Plan.

No Stock Option shall be assignable or transferable by the individual to whom it is granted, except that it may be transferable (X) by assignment by the Participant to the extent provided in the applicable option agreement (or as subsequently allowed by the Plan Committee), or (Y) by

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will or the laws of descent and distribution in accordance with the provisions of this Plan.  Upon the death of the Participant an option may only be exercised by such individual’s beneficiary designated to exercise the option or otherwise by his/her applicable legal representatives, heirs or legatees, and only within the specific time period set forth above and only to the extent vested in and unexercised by the Participant at the date of his/her death, except as provided in Section 5.3(c)(ii).

In no event, whether by the Participant directly or by his/her proper assignee or beneficiary or other representative, shall any option be exercisable at any time after its expiration date as stated in the option agreement, except as provided in Section 5.3(c)(ii) and (v).  When an option is no longer exercisable it shall be deemed for all purposes and without further act to have lapsed and terminated.  The Plan Committee may, in its sole discretion, determine solely for the purposes of the Plan that a Participant is permanently and totally disabled, and the acts and decisions of the Plan Committee made in good faith in relation to any such determination shall be conclusive upon all persons and interests affected thereby.

(d)Exercise of Options.  An individual entitled to exercise Stock Options may, subject to their terms and conditions and the terms and conditions of the Plan, exercise them in whole or in part by delivery of written notice of exercise to the Company at its principal office or such other manner as the Company may direct, specifying the number of whole shares of Common Stock with respect to which the Stock Options are being exercised.  Before shares may be issued, payment must be made in full, in legal United States tender, in the amount of the purchase price of the shares to be purchased at the time and any amounts for withholding as provided in Section 10.8 hereof; provided, however, in lieu of paying for the exercise price in cash as described above, the individual may pay (subject to such conditions and procedures as the Plan Committee may establish) all or part of such exercise price by tendering (either actually or by attestation) owned and unencumbered shares of Common Stock acceptable to the Plan Committee and having a Fair Market Value on the date of exercise of the Stock Options equal to or less than the exercise price of the Stock Options exercised, with cash, as set forth above, for the remainder, if any, of the purchase price; provided, further, that the Plan Committee may permit a Participant to elect to pay the exercise price by authorizing a third party to sell shares of Common Stock (or a sufficient portion of the shares) acquired upon exercise of the Stock Options and remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from such exercise.  Subject to rules established by the Plan Committee, the withholdings required by Section 10.8 hereof may be satisfied by the Company withholding shares of Common Stock issued on exercise that have a Fair Market Value on the

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date of exercise of the Stock Options equal to or less than the withholding required by Section 10.8 hereof.

(e)Repricing Prohibited.  Subject to Sections 5.5, 7.3 and 10.7, outstanding Stock Options granted under this Plan shall not be repriced.

5.4STOCK APPRECIATION RIGHTS.  Stock Appreciation Rights may be granted to Participants either alone (“freestanding”) or in tandem with other Awards, including Performance Awards, Stock Options and Restricted Stock.  Stock Appreciation Rights granted in tandem with Incentive Stock Options must be granted at the same time as the Incentive Stock Options are granted.  Stock Appreciation Rights granted in tandem with any other Award may be granted at any time prior to the earlier of the exercise or expiration of such Award.  Stock Appreciation Rights granted in tandem with Stock Options shall terminate and no longer be exercisable upon the termination or exercise of the related Stock Options.  The Plan Committee shall establish the terms and conditions applicable to any Stock Appreciation Rights, which terms and conditions need not be uniform but may not be inconsistent with the terms of the Plan.  Freestanding Stock Appreciation Rights shall generally be subject to terms and conditions substantially similar to those described in Section 5.3 for Stock Options, including the requirements of 5.3(a), (b) and (e) regarding the maximum period, minimum price and prohibition on repricing.

5.5CHANGE IN CONTROL.  In the event of a Change in Control:

(a)If the Company is the surviving entity and any adjustments necessary to preserve the value of the Participant’s outstanding Stock Options and Stock Appreciation Rights have been made, or the Company’s successor at the time of the Change in Control irrevocably assumes the Company’s obligations under this Plan or replaces the Participant’s outstanding Stock Options and Stock Appreciation Rights with stock options and stock appreciation rights having substantially the same value and having terms and conditions no less favorable to the Participant than those applicable to the Participant’s Stock Options and Stock Appreciation Rights immediately prior to the Change in Control (collectively, an “Equitable Assumption or Replacement”), then such Awards or their replacement awards shall become immediately exercisable in full only if within two years after the Change in Control the Participant’s employment:

(i)is terminated without “Cause”, which for purposes of this Section 5.5 shall mean (x) willful and continued failure to substantially perform the Participant’s duties (other than failure resulting from incapacity due to physical or mental illness) after receipt of a written demand for such performance specifically identifying such failure, or (y) the willful engaging by the Participant in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company or its successor;

(ii)terminates with “Good Reason”, which for purposes of this Section 5.5 shall mean any material diminution of the Participant’s position,

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authority, duties or responsibilities (including the assignment of duties materially inconsistent with the Participant’s position or a material increase in the time Participant is required by the Company or its successor to travel), any reduction in salary or in the Participant’s aggregate bonus and incentive opportunities, any material reduction in the aggregate value of the Participant’s employee benefits (including retirement, welfare and fringe benefits), or relocation to a principal work site that is more than 40 miles from the Participant’s principal work site immediately prior to the Change in Control; or

(iii)terminates under circumstances that entitle the Participant to accelerated exercisability under any individual employment agreement between the Participant and the Company, a Subsidiary, or any successor thereof.

(b)If there is no Equitable Assumption or Replacement, then without any action by the Plan Committee or the Board, each outstanding Stock Option and Stock Appreciation Right granted under the Plan that has not been previously exercised or otherwise lapsed and terminated shall become immediately exercisable in full; provided, however, that the Plan Committee, in its sole discretion, and without the consent of any Participant affected thereby, may determine that a cash payment shall be made promptly following the Change in Control in lieu of all or any portion of the outstanding Stock Options and Stock Appreciation Rights granted under this Plan.  The amount payable with respect to each share of Common Stock subject to an affected Stock Option and each affected Stock Appreciation Right shall equal the excess of the Fair Market Value of a share of Common Stock immediately prior to such Change in Control over the exercise price of such Stock Option or Stock Appreciation Right.  After such a determination by the Plan Committee, each Stock Option and Stock Appreciation Right, with respect to which a cash payment is to be made shall terminate, and the Participant shall have no further rights thereunder except the right to receive such cash payment.

ARTICLE VI

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

6.1RESTRICTION PERIOD.  At the time an Award of Restricted Stock or Restricted Stock Units is made, the Plan Committee shall establish the terms and conditions applicable to such Award, including the period of time (the “Restriction Period”) during which certain restrictions established by the Plan Committee shall apply to the Award.  The Restriction Period shall not be less than three years, provided, however, that for Awards to non-employee directors of the Company, the terms of the Award may allow for the ratable release of the restrictions over a minimum period of one year. Each such Award, and designated portions of the same Award, may have a different Restriction Period, at the discretion of the Plan Committee. Except as permitted or

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pursuant to Sections 6.4, 6.5 or 10.7 hereof, the Restriction Period applicable to a particular Award shall not be changed.

6.2RESTRICTED STOCK TERMS AND CONDITIONS.  Restricted Stock shall be represented by a stock certificate registered in the name of the Participant granted such Restricted Stock.  Such Participant shall have the right to enjoy all shareholder rights during the Restriction Period except that:

(a)The Participant shall not be entitled to delivery of the stock certificate until the Restriction Period shall have expired.

(b)The Company may either issue shares subject to such restrictive legends and/or stop-transfer instructions as it deems appropriate or provide for retention of custody of the Common Stock during the Restriction Period.

(c)The Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Common Stock during the Restriction Period, except that it may be transferable by assignment by the Participant to the extent provided in the applicable Restricted Stock Award agreement.

(d)A breach of the terms and conditions established by the Plan Committee with respect to the Restricted Stock shall cause a forfeiture of the Restricted Stock, and any dividends withheld thereon.

(e)Dividends payable in cash or in shares of stock or otherwise may be either currently paid or withheld by the Company for the Participant’s account.  At the discretion of the Plan Committee, interest may be paid on the amount of cash dividends withheld, including cash dividends on stock dividends, at a rate and subject to such terms as determined by the Plan Committee.

Provided, however, and the provisions of Section 6.4 to the contrary notwithstanding, in lieu of the foregoing, the Plan Committee may provide that no shares of Common Stock be issued until the Restriction Period is over and further provide that the shares of Common Stock issued after the Restriction Period has been completed, be issued in escrow and/or be legended and that the Common Stock be subject to restrictions including the forfeiture of all or a part of the shares.

6.3PAYMENT FOR RESTRICTED STOCK.  A Participant shall not be required to make any payment for Restricted Stock unless the Plan Committee so requires.

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6.4FORFEITURE PROVISIONS.  Subject to Section 6.5, in the event a Participant terminates employment during a Restriction Period for the Participant’s Restricted Stock or Restricted Stock Units, such Awards will be forfeited; provided, however, that the Plan Committee may provide for proration or full payout in the event of (a) a termination of employment because of normal or late retirement, (b) with the consent of the Plan Committee, early retirement or spin-off, (c) death, (d) total and permanent disability, as determined by the Plan Committee, (e) with the consent of the Plan Committee, termination of employment after 15 years of employment with the Company or a Subsidiary or any combination thereof, or (f) in the case of a non-employee director, a departure from the Board following the completion of the director’s term of office, all subject to any other conditions the Plan Committee may determine. Any Restricted Stock Unit that is not, in all cases, due and payable not later than the 15th day of the third month following the calendar year, or if later, the Company’s fiscal year, in which the Restricted Stock Unit ceases to be subject to a “substantial risk of forfeiture” within the meaning Section 409A of the Code, will be subject to the provisions of Appendix A.

6.5CHANGE IN CONTROL.  In the event of a Change in Control, restrictions on a fraction of each Participant’s outstanding Restricted Stock and Restricted Stock Units granted under the Plan will lapse.  The numerator of such fraction with respect to an Award shall be the number of months that have elapsed in the applicable Restriction Period prior to the Change in Control and the denominator shall be the number of months in such Restriction Period. Distribution of any shares not previously distributed shall be made within ten days after the Change in Control or later if so provided in the applicable Award agreement, a related deferral election or if applicable, Appendix A.

6.6DEFERRAL OF RECEIPT OF RESTRICTED STOCK UNITS.  With the consent of the Plan Committee, a Participant who has been granted a Restricted Stock Unit may by compliance with the then applicable procedures under the Plan irrevocably elect in writing to defer receipt of all or any part of any distribution associated with that Award.  The terms and conditions of any such deferral, including but not limited to, the period of time for, and form of, election; the manner and method of payout; the plan and form in which the deferred amount shall be held; the interest equivalent or other payment that shall accrue pending its payout; and the use and form of Dividend Equivalents in respect of stock-based units resulting from such deferral, shall be as determined by the Plan Committee.  The Plan Committee may, at any time and from time to time, but prospectively only, amend, modify, change, suspend or cancel any and all of the rights, procedures, mechanics and timing parameters relating to such deferrals. An election made prior to December 31, 2008 to defer receipt of any distribution associated with a Restricted Stock Unit relating to a Restriction Period ending after December 31, 2004 is subject to the provisions of Appendix A.

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ARTICLE VII

SHARES OF STOCK SUBJECT TO THE PLAN; MAXIMUM AWARDS

7.1SHARES AVAILABLE.  Subject to the other provisions of this Article VII, the total number of shares available for grant as Awards pursuant to the Plan shall not exceed in the aggregate 81,000,000 shares of Common Stock.  (This limit includes the 44,000,000 shares that were originally made available under this Plan.)  Solely for the purpose of applying the limitation in the preceding sentence and subject to the replenishment and adjustment provisions of Sections 7.2 and 7.3 below:

(a)each Award granted under this Plan prior to May 19, 2004 (the date the Plan was last approved by shareholders) shall reduce the number of shares available for grant by one share for every one share granted;

(b)each Stock Option or Stock Appreciation Right granted under this Plan on or after May 19, 2004 shall reduce the number of shares available for grant by one share for every one share granted;

(c)each Award granted under this Plan on or after May 19, 2004 that may result in the issuance of Common Stock, other than a Stock Option, Stock Appreciation Right, or Dividend Equivalent, shall reduce the number of shares available for grant by two shares for every one share granted;

(d)each Dividend Equivalent that the Corporation has determined may result in the issuance of Common Stock shall reduce the number of shares available for grant by two shares for every share that would be issuable if the accumulated value of the Dividend Equivalent were converted into Common Stock at Fair Market Value, but such reduction shall only occur if the corresponding dividends payable to shareholders were paid in cash; and

(e)if Awards are granted in tandem, so that only one of the Awards may actually be exercised, only the Award that results in the greater reduction in the number of shares available for grant shall result in a reduction of the shares so available, and the other Award shall be disregarded.

Shares available for grant under the Plan may be authorized and unissued shares, treasury shares held by the Company or shares purchased or held by the Company or a Subsidiary for purposes of the Plan, or any combination thereof.  Shares issued upon assumption or conversion of outstanding stock-based awards granted by an acquired company shall be disregarded in applying the limitation set forth in this Section 7.1.

7.2SHARES AGAIN AVAILABLE.  In the event all or any portion of an Award is forfeited or cancelled, expires, is settled for cash, or otherwise does not result in the issuance of all or a portion of the shares subject to the Award in connection with the exercise or settlement of such Award, the number of shares not issued that were deducted for such Award pursuant to Section 7.1 above shall be restored and may again be used for Awards under the Plan. If a Participant uses shares of Common Stock to pay a purchase or exercise price or tax withholding, either by having the Company withhold shares or tendering shares (either actually or by attestation), an equal number of such shares shall

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be restored and may again be used for Awards under the Plan.  In addition, shares may be reacquired on the open market by the Company using the Cash Proceeds received by the Company from the exercise on or after May 19, 2004 of Stock Options granted under the Plan to restore an equal number of shares that may again be used for Awards under the Plan; provided, however, that the number of shares so restored does not exceed the number that could be purchased at Fair Market Value with the Cash Proceeds on the date of exercise of the Stock Option giving rise to such Cash Proceeds.

If one of the events described in the first sentence of the preceding paragraph occurs with respect to an award that was granted under a Prior Plan (as defined in Section 10.11) but was outstanding on May 19, 2004, the total number of shares available for grant under this Plan shall be increased by one share for each share subject to that award that is not issued.

Notwithstanding anything in this Section 7.2 to the contrary and solely for purposes of determining whether shares are available for the issuance of Incentive Stock Options, the maximum aggregate number of shares that may be granted under this Plan shall be determined without regard to any shares restored pursuant to this Section 7.2 that, if taken into account, would cause the Plan to fail the requirement under Code Section 422 that the Plan designate the maximum aggregate number of shares that may be issued.

7.3RELEVANT CHANGE ADJUSTMENTS.  In the event of any equity restructuring (within the meaning of Financial Accounting Standards No. 123 (revised 2004)) other than: (1) any distribution of securities or other property by the Company to shareholders in a spin-off or split-up that does not qualify as a tax-free spin-off or split-up under Section 355 of the Code (or any successor provision of the Code); or (2) any cash dividend (including extraordinary cash dividends), appropriate adjustments in the number of shares available for grant and in any outstanding Awards, including adjustments in the size of the Award and in the exercise price per share of Stock Options and Stock Appreciation Rights, shall be made by the Plan Committee to give effect to such equity restructuring to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. No such adjustment shall be required to reflect the events described in clauses (1) and (2) above, or any other change in capitalization that does not constitute an equity restructuring, however such adjustment may be made: (x) if necessary to comply with Section 409A of the Code, the adjustment qualifies as a substitution or assumption under Treasury Regulation Section 1.424-1; and (y) the Plan Committee affirmatively determines, in its discretion, that such an adjustment is appropriate.

7.4MAXIMUM PER PARTICIPANT AWARD.  During any consecutive thirty-six month period, no Participant may receive Awards that, in the aggregate, could result in that Participant receiving, earning or acquiring, subject to the adjustments described in Section 7.3:

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(a)Stock Options and Stock Appreciation Rights for, in the aggregate, more than 4,000,000 shares of Common Stock;

(b)Performance Shares, Restricted Stock and Restricted Stock Units for, in the aggregate, more than 700,000 shares of Common Stock;

(c)A number of Dividend Equivalents greater than the number of shares of Common Stock the Participant could receive, earn or acquire in connection with the related stock-based Awards granted to the Participant; and

(d)Performance Units with a value exceeding $15,000,000.

In addition, during any consecutive thirty-six month period, no Participant who is a non-employee director may receive Awards that, in the aggregate, could result in that Participant receiving, earning or acquiring, subject to the adjustments described in Section 7.3, more than 75,000 shares of Common Stock.  For purposes of applying the limits described in this Section 7.4, if Awards subject to the same limit are granted in tandem, so that only one of the Awards may actually be exercised, only one of the Awards shall be counted.

ARTICLE VIII

ADMINISTRATION

8.1PLAN COMMITTEE.  The Plan will be administered by a committee of two or more members of the Compensation Committee of the Board who are appointed from time to time by the Board and who are outside, independent Board members who, in the judgment of the Board, are qualified to administer the Plan as contemplated by (a) Rule 16b-3 of the Securities and Exchange Act of 1934 (or any successor rule), (b) Section 162(m) of the Code, as amended, and the regulations thereunder (or any successor Section and regulations), and (c) any rules and regulations of a stock exchange on which Common Stock is traded.  Any member of the committee administering the Plan who does not satisfy or ceases to satisfy the qualifications set out in the preceding sentence may recuse himself or herself from any vote or other action taken by such committee.  The Board may, at any time and in its complete discretion, remove any member of such committee and may fill any vacancy on such committee.

8.2POWERS.  The Plan Committee shall have and exercise all of the powers and responsibilities granted expressly or by implication to it by the provisions of the Plan.  Subject to and as limited by such provisions, the Plan Committee may from time to time enact, amend and rescind such rules, regulations and procedures with respect to the administration of the Plan as it deems appropriate or convenient.

8.3INTERPRETATION.  All questions arising under the Plan, any Award agreement, or any rule, regulation or procedure adopted by the Plan Committee shall be determined by the Plan Committee, and its determination thereof shall be conclusive and binding upon all parties.

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8.4COMMITTEE PROCEDURE.  Any action required or permitted to be taken by the Plan Committee under the Plan shall require the affirmative vote of a majority of a quorum of the members of the Plan Committee.  A majority of all members of the Plan Committee shall constitute a “quorum” for Plan Committee business. The Plan Committee may act by written determination instead of by affirmative vote at a meeting, provided that any written determination shall be signed by all members of the Plan Committee, and any such written determination shall be as fully effective as a majority vote of a quorum at a meeting.

8.5DELEGATION.  The Plan Committee may delegate all or any part of its authority under the Plan to a subcommittee of directors and/or officers of the Company for purposes of determining and administering Awards granted to persons who are not then subject to the reporting requirements of Section 16 of the Exchange Act.

ARTICLE IX

REDUCTION IN AWARDS

9.1WHEN APPLICABLE.  Anything in this Plan to the contrary notwithstanding, the provisions of this Article IX shall apply to a Participant if an independent auditor selected by the Plan Committee (the “Auditor”) determines that each of (a) and (b) below are applicable.

(a)Payments or distributions hereunder, determined without application of this Article IX, either alone or together with other payments in the nature of compensation to the Participant which are contingent on a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, or otherwise (but after any elimination or reduction of such payments under the terms of the Company’s Officer Income Continuance Policy Statement, as amended), would result in any portion of the payments hereunder being subject to an excise tax on excess parachute payments imposed under Section 4999 of the Code.

(b)The excise tax imposed on the Participant under Section 4999 of the Code on excess parachute payments, from whatever source, would result in a lesser net aggregate present value of payments and distributions to the Participant (after subtraction of the excise tax) than if payments and distributions to the Participant were reduced to the maximum amount that could be made without incurring the excise tax.

9.2REDUCED AMOUNT.  Under this Article IX the payments and distributions under this Plan shall be reduced (but not below zero) so that the present value of such payments and distributions shall equal the Reduced Amount. The “Reduced Amount” (which may be zero) shall be an amount expressed in present value which maximizes the aggregate present value of payments and distributions under this Plan

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which can be made without causing any such payment to be subject to the excise tax under Section 4999 of the Code. The determinations and reductions under this Section 9.2 shall be made after eliminations or reductions, if any, have been made under the Company’s Officer Income Continuance Policy Statement, as amended.

9.3PROCEDURE.  If the Auditor determines that this Article IX is applicable to a Participant, it shall so advise the Plan Committee in writing. The Plan Committee shall then promptly give the Participant notice to that effect together with a copy of the detailed calculation supporting such determination which shall include a statement of the Reduced Amount. Such notice shall also include a description of which and how much of the Awards shall be eliminated or reduced (as long as their aggregate present value equals the Reduced Amount). For purposes of this Article IX, Awards shall be reduced in the following order: (1) Stock Options with an exercise price above the then Fair Market Value of a share of Common Stock that have a positive value for purposes of Section 280G of the Code, as determined under applicable IRS guidance; (2) pro rata among Awards that constitute deferred compensation subject to Section 409A of the Code; and (3) if a further reduction is necessary to reach the Reduced Amount, among the Awards that are not subject to Section 409A of the Code. Present value shall be determined in accordance with Section 280G of the Code. All the foregoing determinations made by the Auditor under this Article IX shall be made as promptly as practicable after it is determined that excess parachute payments (as defined in Section 280G of the Code) will be made to the Participant if an elimination or reduction is not made. As promptly as practicable, the Company shall provide to or for the benefit of the Participant such amounts and shares as are then due to the Participant under this Plan and shall promptly provide to or for the benefit of the Participant in the future such amounts and shares as become due to the Participant under this Plan.

9.4CORRECTIONS.  As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Auditor hereunder, it is possible that payments or distributions under this Plan will have been made which should not have been made (“Overpayment”) or that additional payments or distributions which will have not been made could have been made (“Underpayment”), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Auditor, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant which the Auditor believes has a high probability of success, determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to the Participant which the Participant shall repay together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by the Participant if and to the extent such payment would not reduce the amount which is subject to the excise tax under Section 4999 of the Code. In the event that the Auditor, based upon controlling precedent, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid to or for the benefit of the Participant together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

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9.5NON-CASH BENEFITS.  In making its determination under this Article IX, the value of any non-cash benefit shall be determined by the Auditor in accordance with the principles of Section 280G(d)(3) of the Code.

9.6DETERMINATIONS BINDING.  All determinations made by the Auditor under this Article IX shall be binding upon the Company, the Plan Committee and the Participant.

ARTICLE X

GENERAL PROVISIONS

10.1AMENDMENT OR TERMINATION OF PLAN.  The Board may at any time amend, suspend, discontinue or terminate the Plan (including the making of any necessary enabling, conforming and procedural amendments to the Plan to authorize and implement the granting of Incentive Stock Options or other income tax preferred stock options which may be authorized by federal law subsequent to the effective date of this Plan); provided, however, that no amendment by the Board shall, without further approval of the shareholders of the Company, increase the total number of shares of Common Stock which may be made subject to the Plan, except as provided at Section 7.3 hereof, or make any other change for which shareholder approval is required by law or under the applicable rules of the New York Stock Exchange.  No action taken pursuant to this Section 10.1 of the Plan shall, without the consent of the Participant, adversely affect any Awards which have been previously granted to a Participant except pursuant to Section 10.5 of the Plan.

10.2NON-ALIENATION OF RIGHTS AND BENEFITS.  Except as expressly provided herein, no right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the person entitled to such right or benefit. If any Participant or beneficiary hereunder should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit hereunder (other than as expressly provided herein), then such right or benefit shall, in the sole discretion of the Plan Committee, cease and in such event the Company may hold or apply the same or any or no part thereof for the benefit of the Participant or beneficiary, his/her spouse, children or other dependents or any of them in any such manner and in such proportion as the Plan Committee in its sole discretion may deem proper.

10.3NO RIGHTS AS SHAREHOLDER.  The granting of Awards under the Plan shall not entitle a Participant or any other person succeeding to his/her rights, to any dividend, voting or other right as a shareholder of the Company unless and until the issuance of a stock certificate to the Participant or such other person pursuant to the provisions of the Plan and then only subsequent to the date of issuance thereof.

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10.4LIMITATION OF LIABILITY OR OBLIGATION OF THE COMPANY.  As illustrative only of the limitations of liability or obligation of the Company and not intended to be exhaustive thereof, nothing in the Plan shall be construed:

(a)to give any employee of the Company any right to be granted any Award other than at the sole discretion of the Plan Committee;

(b)to give any Participant any rights whatsoever with respect to shares of Common Stock except as specifically provided in the Plan;

(c)to limit in any way the right of the Company or any Subsidiary to terminate, change or modify, with or without cause, the employment of any Participant at any time; or

(d)to be evidence of any agreement or understanding, express or implied, that the Company or any Subsidiary will employ any Participant in any particular position at any particular rate of compensation or for any particular period of time.

Payments and other benefits received by a Participant under an Award shall not be deemed part of a Participant’s regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or any Subsidiary, unless expressly so provided by such other plan, contract or arrangement or the Plan Committee determines that an Award or portion of an Award should be included to reflect competitive compensation practices or to recognize that an Award has been made in lieu of a portion of competitive cash compensation.

10.5GOVERNMENT REGULATIONS.  Notwithstanding any other provisions of the Plan seemingly to the contrary, the obligation of the Company with respect to Awards granted under the Plan shall at all times be subject to any and all applicable laws, rules and regulations and such approvals by any government agencies as may be required or deemed by the Board or Plan Committee as reasonably necessary or appropriate for the protection of the Company.

In connection with any sale, issuance or transfer hereunder, the Participant acquiring the shares shall, if requested by the Company, give assurances satisfactory to counsel of the Company that the shares are being acquired for investment and not with a view to resale or distribution thereof and assurances in respect of such other matters as the Company may deem desirable to assure compliance with all applicable legal requirements.

10.6NON-EXCLUSIVITY OF THE PLAN.  Neither the adoption of the Plan by the Board nor the submission of the Plan to shareholders of the Company for approval shall be construed as creating any limitations on the power or authority of the Board to

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adopt such other or additional incentive or other compensation arrangements of whatever nature as the Board may deem necessary or desirable or preclude or limit the continuation of any other plan, practice or arrangement for the payment of compensation or fringe benefits to employees generally, or to any class or group of employees, which the Company or any Subsidiary now has lawfully put into effect, including, without limitation, any retirement, pension, savings, profit sharing or stock purchase plan, insurance, death and disability benefits, and executive short term incentive plans.

10.7REORGANIZATION.  In case the Company is merged or consolidated with another corporation, or in case the property or stock of the Company is acquired by another corporation, or in case of a separation, reorganization or liquidation of the Company (for purposes hereof any such occurrence being referred to as an “Event”), the Plan Committee or a comparable committee of any corporation assuming the obligations of the Company hereunder, shall either:

(a)make appropriate provision for the protection of any outstanding stock-based Awards granted thereunder by the substitution on an equitable basis of appropriate stock, stock units, stock options or stock appreciation rights of the Company, or of the merged, consolidated or otherwise reorganized corporation which will be issuable in respect to the Awards.  Stock to be issued pursuant to such substitute awards shall be limited so that the excess of the aggregate fair market value of the shares subject to such substitute awards immediately after such substitution over the purchase price thereof (if any) is not more than the excess of the aggregate fair market value of the shares subject to such substitute awards immediately before such substitution over the purchase price thereof (if any); or

(b)upon written notice to the Participant, declare that all Performance Awards granted to the Participant are deemed earned, that the Restriction Period of all Restricted Stock and Restricted Stock Units has been eliminated and that all outstanding Stock Options and Stock Appreciation Rights shall accelerate and become exercisable in full but that all outstanding Stock Options and Stock Appreciation Rights, whether or not exercisable prior to such acceleration, must be exercised within the period of time set forth in such notice or they will terminate.  In connection with any declaration pursuant to this Section 10.7(b), the Plan Committee may, but shall not be obligated to, cause a cash payment to be made to each Participant who holds a Stock Option or Stock Appreciation Right that is terminated in an amount equal to the product obtained by multiplying (x) the amount (if any) by which the Event Proceeds Per Share (as hereinafter defined) exceeds the exercise price per share covered by such Stock Option times (y) the number of shares of Common Stock covered by such Stock Option or Stock Appreciation Right.  For purposes of this Section 10.7(b), “Event Proceeds Per Share” shall mean the cash plus the fair market value, as determined in good faith by the Plan Committee, of the non-cash

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consideration to be received per share by the shareholders of the Company upon the occurrence of the Event.

10.8WITHHOLDING TAXES, ETC.  All distributions under the Plan shall be subject to any required withholding taxes and other withholdings and, in case of distributions in Common Stock, the Participant or other recipient may, as a condition precedent to the delivery of Common Stock, be required to pay to his/her participating employer the excess, if any, of the amount of required withholding over the withholdings, if any, from any distributions in cash under the Plan.  All or a portion of such payment may, in the discretion of the Plan Committee and upon the election of the Participant, be made (a) by withholding from shares that would otherwise be delivered to the Participant a number of shares sufficient to satisfy the remaining required tax withholding or (b) by tendering (either actually or by attestation) owned and unencumbered shares of Common Stock acceptable to the Plan Committee and having a Fair Market Value on the date of tender equal to or less than the remaining required tax withholding.  No distribution under the Plan shall be made in fractional shares of Common Stock, but the proportional market value thereof shall be paid in cash.

10.9GENERAL RESTRICTION.  Each Award shall be subject to the requirement that, if at any time the Board shall determine, in its discretion, that the listing, registration or qualification of the shares subject to such option and/or right upon any securities exchange or under any state or federal law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with the granting of such Award or the issue or purchase of shares respectively thereunder, such Award may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board.

10.10USE OF PROCEEDS.  The proceeds derived by the Company from the sale of the stock pursuant to Awards granted under the Plan shall constitute general funds of the Company.

10.11PRIOR PLANS.  Notwithstanding the adoption of this Plan by the Board, the Company’s Executive Long Term Incentive Plan of 1981 and the Director Stock Option Plan of 1995, as the same have been amended from time to time (the “Prior Plans”), shall remain in effect, and all grants and awards heretofore made under the Prior Plans shall be governed by the terms of the Prior Plans. The Plan Committee shall not, however, make any additional grants pursuant to the Prior Plans.

10.12DURATION OF PLAN.  This Plan shall remain in effect until the earliest of the following events occurs: (a) distribution of all shares of Common Stock subject to the Plan, (b) termination of this Plan pursuant to Section 10.1 hereof, or (c) May 19, 2014; provided, however, that Awards made before the termination or expiration of this Plan may be exercised, vested, settled or otherwise effectuated after such date in accordance with the terms of such Awards.

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10.13SEVERABILITY.  In the event any provision of this Plan shall be held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

10.14GOVERNING LAW.  To the extent that federal laws do not otherwise control, this Plan and all determinations made and actions taken pursuant to this Plan shall be governed by the laws of Minnesota and construed accordingly.

10.15HEADINGS.  The headings of the Articles and their subparts in this Plan are for convenience of reading only and are not meant to be of substantive significance and shall not add to or detract from the meaning of such Article or subpart to which it refers.

10.16STOCK CERTIFICATES.  Notwithstanding anything in the Plan to the contrary, to the extent the Plan provides for the issuance of stock certificates to reflect the issuance of shares of Common Stock or Restricted Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange on which the Common Stock is traded.

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APPENDIX A

A-1PURPOSE AND EFFECT. This Appendix A to the Target Corporation Long-Term Incentive Plan modifies the terms of any deferred Performance Award and any Restricted Stock Unit that is subject to Section 409A of the Code that was awarded prior to December 31, 2008 and that is paid or payable after December 31, 2008. The provisions of this Appendix A will supersede any inconsistent terms of any award that is covered by this Appendix A. Awards covered by this Appendix A (collectively referred to herein as “Appendix A Awards”) include:

(a)Any Performance Award deferred prior to December 31, 2008 for a Performance Period ending after December 31, 2004 (“Deferred Performance Share Unit”);

(b)Any Restricted Stock Unit (other than a Deferred Restricted Stock Unit defined below) for which distribution is not, in all cases, due and payable not later than the 15th day of the third month following the calendar year, or if later, the Company’s fiscal year, in which the Restricted Stock Unit ceases to be subject to a “substantial risk of forfeiture” within the meaning of Section 409A of the Code; and

(c)Any Restricted Stock Unit relating to a Restriction Period ending after December 31, 2004 for which an election was made prior to December 31, 2008 to defer receipt of any distribution associated with such Restricted Stock Unit (“Deferred Restricted Stock Unit”).

A-2DEFINITIONS. The capitalized terms in this Addendum that are not defined below, shall have the same meaning as in the Agreement, or, if not defined in the Agreement, as defined in the Plan.

(a)Company. For purposes of this Addendum, Company includes any person that would be treated as a single employer with the Company under Section 414(b) or 414(c) of the Code.

(b)Disabled. An employee Participant will be Disabled if, by reason of any medically-determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, Participant (i) is unable to engage in any substantial gainful activity or (ii) is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. An employee Participant will be deemed to be Disabled if he or she is determined to be totally disabled by the Social Security Administration.

(c)Termination of Employment. For purposes of determining an employee Participant’s entitlement to payment of an Appendix A Award, “Termination

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of Employment” means a severance of such Participant’s employment relationship with the Company, for any reason. For purposes of determining when a distribution will be made under Appendix A, a “Termination of Employment” will be deemed to occur if, based on the relevant facts and circumstances to the Participant, the Company and Participant reasonably anticipate that future services to be performed by the Participant for the Company will permanently decrease to no more than 20% of the average level of services performed over the immediately preceding 36-month period. A bona fide leave of absence that is six months or less, or during which an individual retains a reemployment right, will not cause a Termination of Employment. In the case of a leave of absence without a right of reemployment that exceeds the time periods described in this paragraph, a Termination of Employment will be deemed to occur once the leave of absence exceeds six months. Notwithstanding the foregoing, a Termination of Employment shall not occur unless such termination also qualifies as a “separation from service,” as defined under Section 409A of the Code and related guidance thereunder.

(d)Trust. Trust means the Target Corporation Deferred Compensation Trust, established by agreement dated January 1, 2005, by and between the Company and State Street Bank and Trust Company, as amended, or similar trust agreement.

A-3PAYMENT OF EMPLOYEE PARTICIPANT’S RESTRICTED STOCK UNITS. The vested amount of an employee Participant’s Restricted Stock Units and Deferred Restricted Stock Units shall convert to shares of Common Stock and shall be issued to or on behalf of the Participant upon the earlier of the following:

(a)the employee Participant’s death;

(b)the date the employee Participant becomes Disabled;

(c)for a Participant’s Deferred Restricted Stock Units, the later of the Vesting Date or the first day of the month next following the date that is six (6) months after the employee Participant’s Termination of Employment; and for a Participant’s Restricted Stock Units that are not Deferred Restricted Stock Units, the earlier of the Vesting Date or the first day of the month next following the date that is six (6) months after the employee Participant’s Termination of Employment; or

(d)the termination and liquidation of employee Participant’s Restricted Stock Units or Deferred Restricted Stock Units under Section A-7 below.

Payments under Paragraphs (a), (b) and (c) will be made within 90 days of such distribution event and payment on account of Paragraph (d) will be made in accordance with Section A-7.

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A-4PAYMENT OF NON-EMPLOYEE DIRECTOR PARTICIPANT’S RESTRICTED STOCK UNITS. The vested amount of a non-employee director Participant’s Restricted Stock Units shall convert to shares of Common Stock and shall be issued to or on behalf of the Participant upon the earlier of the following:

(a) the date of the Participant’s death; or

(b) the date the non-employee director Participant ceases to be a member of the Board of Directors of the Company, provided the Participant has ceased all contractual relationships as an independent contractor with the Company and has experienced a “separation from service” under Section 409A of the Code, provided further, if the Participant is a “specified employee,” as defined under Section 409A of the Code, on the date of his or her separation from service, payment will be suspended for six (6) months following the Participant’s separation from service, or, if earlier, until the Participant’s death.

A-5PAYMENT OF DEFERRED PERFORMANCE AWARD.  The vested amount of the percentage of a Participant’s Deferred Performance Share Units shall convert to shares of Common Stock and shall be issued to or on behalf of a Participant as soon as practicable, but not more than 90 days, after the later of the following:

(a) the end of the Performance Period; or

(b) the first of the following events to occur:

(1)the Participant’s death;

(2)the date the Participant becomes Disabled;

(3)the first day of the month next following the date that is six (6) months after the Participant’s Termination of Employment;

(4)the fixed distribution date, if any, designated by the Participant pursuant to a written distribution election made in accordance with Plan procedures; or

(5)the termination and liquidation of the Participant’s Deferred Performance Share units under Section A-7 below.

A-6FUNDING UPON A CHANGE IN CONTROL. In the event a Change in Control causes the Trust to be funded, the Company shall:

(a)determine the amount of the Company’s obligation to Participants who are entitled to a distribution of Appendix A Awards, by multiplying the number of Units earned as of the Change in Control by the Fair Market Value of one share of Common Stock on the date of the Change in Control;

(b)credit the amounts determined in paragraph (a) to a bookkeeping account in the name of each applicable Participant;

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(c)on and after the date of the Change in Control, credit to such bookkeeping accounts investment earnings at an annual rate equal to the sum of the 10-Year United States Treasury Note rate plus 2%.  The 10-Year United States Treasury Note rate will be determined on the date of the Change in Control, or if no such rate is available on that date, the immediately preceding date such rate is available, and such rate will be reset each calendar quarter as necessary; and

(d)transfer cash or other property to the Trust as provided under the Trust.  Such transfer shall be made to the extent permitted by, subject to, and in accordance with, the terms of the Trust.

A-7AWARD TERMINATION AND LIQUIDATION ON ACCOUNT OF A CHANGE IN CONTROL.  Upon a Change in Control the Appendix A Awards will terminate and payment of all amounts under such Awards will be accelerated if and to the extent provided in this Section A-7.

(a)The Appendix A Awards will be terminated effective as of the first date on which there has occurred both (i) a Change in Control under Section 2.4(a) and (ii) a funding of the Trust on account of such Change in Control (referred to herein as the “Appendix A termination effective date”) unless, prior to such Appendix A termination effective date the Board affirmatively determines that the Appendix A Awards will not be terminated as of such effective date. The Board will be deemed to have taken action to irrevocably terminate the Appendix A Awards as of the Appendix A termination effective date by its failure to affirmatively determine that the Appendix A Awards will not terminate as of such date.

(b)The determination by the Board under paragraph (a) constitutes a determination that such termination will satisfy the requirements of Section 409A of the Code, including an agreement by the Company that it will take such additional action or refrain from taking such action as may be necessary to satisfy the requirements necessary to terminate and liquidate the Appendix A Awards under paragraph (c) below.

(c)In the event the Board does not affirmatively determine not to terminate the Appendix A Awards as provided in paragraph (a), such termination shall be subject to either (1) or (2) as follows:

1.If the Change in Control qualifies as a “change in control event” under Section 409A of the Code, payment of all Appendix A Awards will be accelerated and made in a lump sum as soon as administratively practicable but not more than 90 days following the Appendix A termination effective date, provided the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(B) have been satisfied.

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2.If the Change in Control does not qualify as a “change in control event” for purposes of Section 409A of the Code, payment of all Appendix A Awards will be accelerated and made in a lump sum as soon as administratively practicable but not more than 60 days following the 12 month anniversary of the Appendix A termination effective date, provided, the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(C) have been satisfied.

A-8LIMITATIONS ON TRANSFER. Awards subject to this Appendix A may not be assigned or transferred by a Participant during their lifetime, other than to a former spouse incident to divorce if and to the extent required by a qualified domestic relations order and permitted under the terms of the applicable Award agreement, and the Awards shall not be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or hypothecation, execution, attachment or similar process. Any attempt to anticipate, alienate, sell, assign, transfer, pledge, encumber, hypothecate, charge or otherwise dispose of an Award in a manner contrary to the provisions hereof, and the levy of any attachment or similar process upon the awards, shall be null and void.

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EX-12

Exhibit (12)

TARGET CORPORATION

Computations of Ratios of Earnings to Fixed Charges for the

Six Months Ended August 1, 2009 and August 2, 2008

and for the Most Recent Five Fiscal Years

	Six Months Ended						Fiscal Year Ended
	August 1,			August 2,			Jan. 31,			Feb. 2,			Feb. 3,			Jan. 28,			Jan. 29,
(millions)	2009			2008			2009			2008			2007			2006			2005
Ratio of Earnings to Fixed Charges
Earnings from continuing operations before income taxes	$	1,780		$	1,961		$	3,536		$	4,625		$	4,497		$	3,860		$	3,031
Capitalized interest	(11		)	(31		)	(48		)	(66		)	(47		)	(42		)	(18		)
Adjusted earnings from continuing operations before income tax	1,769			1,930			3,488			4,559			4,450			3,818			3,013
Fixed charges:
Interest expense(a)	419			474			956			747			646			532			607
Interest portion of rental expense	52			51			103			94			88			84			85
Total fixed charges	471			525			1,059			841			734			616			692
Earnings from continuing operations before income taxes and fixed charges	$	2,240		$	2,455		$	4,547		$	5,400		$	5,184		$	4,434		$	3,705
Ratio of earnings to fixed charges	4.76			4.67			4.29			6.42			7.06			7.21			5.35

Note: Computations are based on continuing operations.

(a)Includes interest on debt and capital leases (including capitalized interest) and amortization of debt issuance costs.  Excludes interest income and interest associated with unrecognized tax benefits, which is recorded within income tax expense.

EX-31.(A)

Exhibit (31)A

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Certifications

I, Gregg W. Steinhafel, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Target Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
		a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
		a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
		b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 28, 2009

/s/ Gregg W. Steinhafel

Gregg W. Steinhafel

Chief Executive Officer

EX-31.(B)

Exhibit (31)B

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Certifications

I, Douglas A. Scovanner, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Target Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
		a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
		a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
		b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 28, 2009

/s/ Douglas A. Scovanner

Douglas A. Scovanner

Executive Vice President and Chief Financial Officer

EX-32.(A)

Exhibit (32)A

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

AS ADOPTED PURSUANT TO 18 U.S.C. SECTION 1350

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Target Corporation, a Minnesota corporation (“the Company”), for the quarter ended August 1, 2009, as filed with the Securities and Exchange Commission on the date hereof (“the Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: August 28, 2009

/s/ Gregg W. Steinhafel

Gregg W. Steinhafel

Chief Executive Officer

EX-32.(B)

Exhibit (32)B

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

AS ADOPTED PURSUANT TO 18 U.S.C. SECTION 1350

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Target Corporation, a Minnesota corporation (“the Company”), for the quarter ended August 1, 2009, as filed with the Securities and Exchange Commission on the date hereof (“the Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

1.   the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: August 28, 2009

/s/ Douglas A. Scovanner

Douglas A. Scovanner

Executive Vice President and Chief Financial Officer