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UNITED ST ATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT T O SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended February 1, 2020 OR ☐ TRANSITION REPORT PURSUANT T O SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number 1-6049 TARGET CORPORA TION (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 Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, par value $0. 0833 per share TGT New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x Note-Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229. 405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company (as defined in Rule 12b-2 of the Exchange Act). Large accelerated filerx Accelerated filero Non-accelerated filero Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x The aggregate market value of the voting stock held by non-affiliates of the registrant as of August 2, 2019, was $41,576,546,635 based on the closing price of $81. 52 per share of Common Stock as reported on the New York Stock Exchange Composite Index. 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 $0. 0833, outstanding as of March 5, 2020, were 500,961,951. DOCUMENTS INCORPORATED BY REFERENCE Portions of Target's Proxy Statement for the Annual Meeting of Shareholders to be held on June 10, 2020, are incorporated into Part III.

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MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Index to Financial Statements Reconciliation of Non-GAAP Financial Measures to GAAP Measures To provide additional transparency, we have disclosed non-GAAP adjusted diluted earnings per share from continuing operations (Adjusted EPS). This metric excludes certain items presented below. We believe this information is useful in providing period-to-period comparisons of the results of our continuing operations. This measure is not in accordance with, or an alternative to, generally accepted accounting principles in the U. S. (GAAP). The most comparable GAAP measure is diluted earnings per share from continuing operations. Adjusted EPS should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. Other companies may calculate Adjusted EPS differently than we do, limiting the usefulness of the measure for comparisons with other companies. Reconciliation of Non-GAAP Adjusted EPS 2019 2018 2017 (a) (millions, except per share data) Pretax Net of Tax Per Share Amounts Pretax Net of Tax Per Share Amounts Pretax Net of Tax Per Share Amounts GAAP diluted earnings per share from continuing operations $ 6. 34 $ 5. 50 $ 5. 29 Adjustments Loss on investment (b) $ 41 $ 31 $ 0. 06 $ — $ — $ — $ — $ — $ — Tax Act (c) — — — — (36) (0. 07) — (343) (0. 62) Loss on debt extinguishment 10 8 0. 01 — — — 123 75 0. 14 Other (d) (17) (13) (0. 02) — — — (5) (3) (0. 01) Other income tax matters (e) — — — — (18) (0. 03) — (57) (0. 10) Adjusted diluted earnings per share from continuing operations $ 6. 39 $ 5. 39 $ 4. 69 Note: Amounts may not foot due to rounding. (a)Consisted of 53 weeks. (b)Includes an unrealized loss on our investment in Casper Sleep, Inc., which is not core to our continuing operations. (c)Represents discrete items related to the Tax Act. Refer to the Provision for Income Taxes discussion within MD&A and Note 18 to the Financial Statements. (d)For 2019 and 2017, represents insurance recoveries related to the 2013 data breach. (e)Represents benefits from the resolution of certain income tax matters unrelated to current period operations. Earnings from continuing operations before interest expense and income taxes (EBIT) and earnings from continuing operations before interest expense, income taxes, depreciation, and amortization (EBITDA) are non-GAAP financial measures. We believe these measures provide meaningful information about our operational efficiency compared with our competitors by excluding the impact of differences in tax jurisdictions and structures, debt levels, and for EBITDA, capital investment. These measures are not in accordance with, or an alternative to, GAAP. The most comparable GAAP measure is net earnings from continuing operations. EBIT and EBITDA should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. Other companies may calculate EBIT and EBITDA differently, limiting the usefulness of the measures for comparisons with other companies. EBIT and EBITDA Percent Change (dollars in millions) 2019 2018 2017 (a)2019/2018 2018/2017 Net earnings from continuing operations $ 3,269 $ 2,930 $ 2,908 11. 6 % 0. 7 % + Provision for income taxes 921 746 722 23. 4 3. 5 + Net interest expense 477 461 653 3. 3 (29. 3) EBIT $ 4,667 $ 4,137 $ 4,283 12. 8 % (3. 4)% + Total depreciation and amortization (b) 2,604 2,474 2,476 5. 3 (0. 1) EBITDA $ 7,271 $ 6,611 $ 6,759 10. 0 % (2. 2)% (a)Consisted of 53 weeks. (b)Represents total depreciation and amortization, including amounts classified within Depreciation and Amortization and within Cost of Sales. TARGET CORPORATION 2019 Form 10-K 21

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MANAGEMENT'S DISCUSSION AND ANALYSIS Table of Contents RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Index to Financial Statements We have also disclosed after-tax ROIC, which is a ratio based on GAAP information, with the exception of the add-back of operating lease interest to operating income. We believe this metric is useful in assessing the effectiveness of our capital allocation over time. Other companies may calculate ROIC differently, limiting the usefulness of the measure for comparisons with other companies. After-Tax Return on Invested Capital (dollars in millions) Trailing T welve Months N u m e r a t o r February 1, 2020February 2, 2019 Operating income $ 4,658 $ 4,110 + Net other income / (expense) 9 27 EBIT 4,667 4,137 + Operating lease interest (a) 86 83 -Income taxes (b) 1,045 856 Net operating profit after taxes $ 3,708 $ 3,364 D e n o m i n a t o r February 1, 2020February 2, 2019February 3, 2018 Current portion of long-term debt and other borrowings $ 161 $ 1,052 $ 281 + Noncurrent portion of long-term debt 11,338 10,223 11,117 + Shareholders' investment 11,833 11,297 11,651 + Operating lease liabilities (c) 2,475 2,170 2,072 -Cash and cash equivalents 2,577 1,556 2,643 Invested capital $ 23,230 $ 23,186 $ 22,478 Average invested capital (d) $ 23,208 $ 22,832 After-tax return on invested capital 16. 0 % 14. 7 % (a)Represents the add-back to operating income driven by the hypothetical interest expense we would incur if the property under our operating leases were owned or accounted for as finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within SG&A Expenses. Operating lease interest is added back to operating income in the ROIC calculation to control for differences in capital structure between us and our competitors. (b)Calculated using the effective tax rates for continuing operations, which were 22. 0 percent and 20. 3 percent for the trailing twelve months ended February 1, 2020, and February 2, 2019, respectively. For the trailing twelve months ended February 1, 2020, and February 2, 2019, includes tax effect of $1,026 million and $839 million, respectively, related to EBIT, and $19 million and $17 million, respectively, related to operating lease interest. (c)Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities. (d)Average based on the invested capital at the end of the current period and the invested capital at the end of the comparable prior period. TARGET CORPORATION 2019 Form 10-K 22

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FINANCIAL STATEMENTS Table of Contents Index to Financial Statements Consolidated Statements of Operations (millions, except per share data) 2019 2018 2017 Sales $ 77,130 $ 74,433 $ 71,786 Other revenue 982 923 928 Total revenue 78,112 75,356 72,714 Cost of sales 54,864 53,299 51,125 Selling, general and administrative expenses 16,233 15,723 15,140 Depreciation and amortization (exclusive of depreciation included in cost of sales) 2,357 2,224 2,225 Operating income 4,658 4,110 4,224 Net interest expense 477 461 653 Net other (income) / expense (9) (27) (59) Earnings from continuing operations before income taxes 4,190 3,676 3,630 Provision for income taxes 921 746 722 Net earnings from continuing operations 3,269 2,930 2,908 Discontinued operations, net of tax 12 7 6 Net earnings $ 3,281 $ 2,937 $ 2,914 Basic earnings per share Continuing operations $ 6. 39 $ 5. 54 $ 5. 32 Discontinued operations 0. 02 0. 01 0. 01 Net earnings per share $ 6. 42 $ 5. 55 $ 5. 32 Diluted earnings per share Continuing operations $ 6. 34 $ 5. 50 $ 5. 29 Discontinued operations 0. 02 0. 01 0. 01 Net earnings per share $ 6. 36 $ 5. 51 $ 5. 29 Weighted average common shares outstanding Basic 510. 9 528. 6 546. 8 Diluted 515. 6 533. 2 550. 3 Antidilutive shares — — 4. 1 Note: Per share amounts may not foot due to rounding. See accompanying Notes to Consolidated Financial Statements. TARGET CORPORATION 2019 Form 10-K 34

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FINANCIAL STATEMENTS Table of Contents Index to Financial Statements Consolidated Statements of Financial Position (millions, except footnotes)February 1, 2020February 2, 2019 Assets Cash and cash equivalents $ 2,577 $ 1,556 Inventory 8,992 9,497 Other current assets 1,333 1,466 Total current assets 12,902 12,519 Property and equipment Land 6,036 6,064 Buildings and improvements 30,603 29,240 Fixtures and equipment 6,083 5,912 Computer hardware and software 2,692 2,544 Construction-in-progress 533 460 Accumulated depreciation (19,664) (18,687) Property and equipment, net 26,283 25,533 Operating lease assets 2,236 1,965 Other noncurrent assets 1,358 1,273 Total assets $ 42,779 $ 41,290 Liabilities and shareholders' investment Accounts payable $ 9,920 $ 9,761 Accrued and other current liabilities 4,406 4,201 Current portion of long-term debt and other borrowings 161 1,052 Total current liabilities 14,487 15,014 Long-term debt and other borrowings 11,338 10,223 Noncurrent operating lease liabilities 2,275 2,004 Deferred income taxes 1,122 972 Other noncurrent liabilities 1,724 1,780 Total noncurrent liabilities 16,459 14,979 Shareholders' investment Common stock 42 43 Additional paid-in capital 6,226 6,042 Retained earnings 6,433 6,017 Accumulated other comprehensive loss (868) (805) Total shareholders' investment 11,833 11,297 Total liabilities and shareholders' investment $ 42,779 $ 41,290 Common Stock Authorized 6,000,000,000 shares, $0. 0833 par value; 504,198,962 shares issued and outstanding as of February 1, 2020; 517,761,600 shares issued and outstanding as of February 2, 2019. Preferred Stock Authorized 5,000,000 shares, $0. 01 par value; no shares were issued or outstanding during any period presented. See accompanying Notes to Consolidated Financial Statements. TARGET CORPORATION 2019 Form 10-K 36

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FINANCIAL STATEMENTS Table of Contents Index to Financial Statements Consolidated Statements of Cash Flows (millions) 2019 2018 2017 Operating activities Net earnings $ 3,281 $ 2,937 $ 2,914 Earnings from discontinued operations, net of tax 12 7 6 Net earnings from continuing operations 3,269 2,930 2,908 Adjustments to reconcile net earnings to cash provided by operations: Depreciation and amortization 2,604 2,474 2,476 Share-based compensation expense 147 132 112 Deferred income taxes 178 322 (188) Loss on debt extinguishment 10 — 123 Noncash losses / (gains) and other, net 29 95 208 Changes in operating accounts: Inventory 505 (900) (348) Other assets 18 (299) (156) Accounts payable 140 1,127 1,307 Accrued and other liabilities 199 89 419 Cash provided by operating activities—continuing operations 7,099 5,970 6,861 Cash provided by operating activities—discontinued operations 18 3 74 Cash provided by operations 7,117 5,973 6,935 Investing activities Expenditures for property and equipment (3,027) (3,516) (2,533) Proceeds from disposal of property and equipment 63 85 31 Cash paid for acquisitions, net of cash assumed — — (518) Other investments 20 15 (55) Cash required for investing activities (2,944) (3,416) (3,075) Financing activities Additions to long-term debt 1,739 — 739 Reductions of long-term debt (2,069) (281) (2,192) Dividends paid (1,330) (1,335) (1,338) Repurchase of stock (1,565) (2,124) (1,046) Stock option exercises 73 96 108 Cash required for financing activities (3,152) (3,644) (3,729) Net (decrease) / increase in cash and cash equivalents 1,021 (1,087) 131 Cash and cash equivalents at beginning of period 1,556 2,643 2,512 Cash and cash equivalents at end of period $ 2,577 $ 1,556 $ 2,643 Supplemental information Interest paid, net of capitalized interest $ 492 $ 476 $ 678 Income taxes paid 696 373 934 Leased assets obtained in exchange for new finance lease liabilities 379 130 139 Leased assets obtained in exchange for new operating lease liabilities 464 246 212 See accompanying Notes to Consolidated Financial Statements. TARGET CORPORATION 2019 Form 10-K 37

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements Significant Financial Instruments not Measured at Fair Value (a) As of February 1, 2020As of February 2, 2019 (millions)Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current portion (b) $ 9,992 $11,864 $10,247 $10,808 (a)The carrying amounts of certain other current assets, commercial paper, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature. (b)The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for the same or similar types of financial instruments and would be classified as Level 2. These amounts exclude commercial paper, unamortized swap valuation adjustments, and lease liabilities. 7. Cash and Cash Equivalents Cash equivalents include highly liquid investments with an original maturity of three months or less from the time of purchase. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions. These receivables typically settle in five days or less. Cash and Cash Equivalents (millions)February 1, 2020February 2, 2019 Cash $ 326 $ 359 Short-term investments 1,810 769 Receivables from third-party financial institutions for credit and debit card transactions 441 428 Cash and cash equivalents (a) $ 2,577 $ 1,556 (a)We have access to these funds without any significant restrictions, taxes or penalties. As of February 1, 2020 and February 2, 2019, we reclassified book overdrafts of $209 million and $242 million, respectively, to Accounts Payable and $23 million and $25 million, respectively, to Accrued and Other Current Liabilities. 8. Inventory The vast majority of our inventory is accounted for under the retail inventory accounting method (RIM) using the last-in, first-out (LIFO) method. Inventory is stated at the lower of LIFO cost or market. Inventory cost includes the amount we pay to our suppliers to acquire inventory, freight costs incurred to deliver product to our distribution centers and stores, and import costs, reduced by vendor income and cash discounts. Distribution center operating costs, including compensation and benefits, are expensed in the period incurred. Inventory is also reduced for estimated losses related to shrink and markdowns. The LIFO provision is calculated based on inventory levels, markup rates, and internally measured retail price indices. Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the inventory retail value. RIM is an averaging method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market because permanent markdowns are taken as a reduction of the retail value of inventory. 9. Other Current Assets Other Current Assets (millions)February 1, 2020February 2, 2019 Income tax and other receivables $ 498 $ 632 Vendor income receivable 464 468 Prepaid expenses 154 157 Other 217 209 Total $ 1,333 $ 1,466 TARGET CORPORATION 2019 Form 10-K 43

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements 13. Accrued and Other Current Liabilities Accrued and Other Current Liabilities (millions)February 1, 2020February 2, 2019 Wages and benefits $ 1,158 $ 1,229 Gift card liability, net of estimated breakage 935 840 Real estate, sales, and other taxes payable 601 601 Dividends payable 333 331 Current portion of operating lease liabilities 200 166 Workers' compensation and general liability (a) 155 142 Interest payable 69 62 Other 955 830 Total $ 4,406 $ 4,201 (a)We retain a substantial portion of the risk related to general liability and workers' compensation claims. We estimate our ultimate cost based on analysis of historical data and actuarial estimates. General liability and workers' compensation liabilities are recorded at our estimate of their net present value. 14. Commitments and Contingencies 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. When a loss is probable, we record an accrual based on the reasonably estimable loss or range of loss. When no point of loss is more likely than another, we record the lowest amount in the estimated range of loss and, if material, disclose the estimated range of loss. We do not record liabilities for reasonably possible loss contingencies, but do disclose a range of reasonably possible losses if they are material and we are able to estimate such a range. If we cannot provide a range of reasonably possible losses, we explain the factors that prevent us from determining such a range. Historically, adjustments to our estimates have not been material. 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 these identified claims or litigation will be material to our results of operations, cash flows, or financial condition. Commitments Purchase obligations, which include all legally binding contracts such as firm commitments for inventory purchases, merchandise royalties, equipment purchases, marketing-related contracts, software acquisition/license commitments, and service contracts, were $676 million and $992 million as of February 1, 2020 and February 2, 2019, respectively. These purchase obligations are primarily due within three years and recorded as liabilities when goods are received or services rendered. Real estate obligations, which include legally binding minimum lease payments for leases signed but not yet commenced, and commitments for the purchase, construction, or remodeling of real estate and facilities, were $1,403 million and $1,134 million as of February 1, 2020 and February 2, 2019, respectively. Over half of these real estate obligations are due within five years, a portion of which are recorded as liabilities. We issue letters of credit and surety bonds in the ordinary course of business. Trade letters of credit totaled $1,544 million and $1,746 million as of February 1, 2020 and February 2, 2019, respectively, a portion of which are reflected in accounts payable. Standby letters of credit and surety bonds, relating primarily to insurance and regulatory requirements, totaled $468 million and $403 million as of February 1, 2020 and February 2, 2019, respectively. TARGET CORPORATION 2019 Form 10-K 45

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements 15. Commercial Paper and Long-Term Debt As of February 1, 2020, the carrying value and maturities of our debt portfolio were as follows: Debt Maturities February 1, 2020 (dollars in millions) Rate (a) Balance Due 2020-2024 3. 8 %$ 2,205 Due 2025-2029 3. 3 2,180 Due 2030-2034 4. 2 1,305 Due 2035-2039 6. 8 1,109 Due 2040-2044 4. 0 1,466 Due 2045-2049 3. 7 1,727 Total notes and debentures 4. 1 9,992 Swap valuation adjustments 137 Finance lease liabilities 1,370 Less: Amounts due within one year (161) Long-term debt and other borrowings $ 11,338 (a)Reflects the dollar weighted average stated interest rate as of year-end. Required Principal Payments (millions) 2020 2021 2022 2023 2024 Total required principal payments $ 94 $ 1,056 $ 63 $ — $ 1,000 In January 2020, we issued $750 million of 10-year unsecured fixed rate debt at 2. 350 percent, and separately, we redeemed $1,000 million of 3. 875 percent unsecured fixed rate debt before its maturity. We recognized a loss on early retirement of approximately $10 million, which was recorded in Net Interest Expense. In March 2019, we issued $1,000 million of 10-year unsecured fixed rate debt at 3. 375 percent, and in June 2019, we repaid $1,000 million of 2. 3 percent unsecured fixed rate debt at maturity. In October 2017, we issued $750 million of 30-year unsecured fixed rate debt at 3. 9 percent. In addition to debt repaid at its maturity during 2017, during October 2017, we redeemed $344 million of debt before its maturity at a value of $463 million. We recognized a loss on early retirement of approximately $123 million, which was recorded in Net Interest Expense. We obtain short-term financing from time to time under our commercial paper program. Commercial Paper (dollars in millions) 2019 2018 2017 Maximum daily amount outstanding during the year $ 744 $ 658 $ — Average amount outstanding during the year 41 63 — Amount outstanding at year-end — — — Weighted average interest rate 2. 36 % 2. 00 % — % We have a committed $2. 5 billion revolving credit facility that expires in October 2023. No balances were outstanding under our credit facility at any time during 2019, 2018, or 2017. Substantially all of our outstanding borrowings are senior, unsecured obligations. 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, which have no practical effect on our ability to pay dividends. TARGET CORPORATION 2019 Form 10-K 46

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements 16. Derivative Financial Instruments Our derivative instruments consist of interest rate swaps used to mitigate interest rate risk. As a result, we have counterparty credit exposure to large global financial institutions, which we monitor on an ongoing basis. Note 6 provides the fair value and classification of these instruments. During 2019, we entered into interest rate swaps with a total notional amount of $1,000 million. Under the swap agreements, we pay a floating rate equal to 1-month London Interbank Offered Rate (LIBOR) and receive a weighted average fixed rate of 2. 5 percent. The agreements have a weighted average remaining maturity of 9. 2 years. Under the two previously existing swap agreements, each with a notional of $250 million, which mature during 2024 and 2026, respectively, we pay a floating rate equal to 1-month LIBOR and receive a weighted average fixed rate of 2. 9 percent. As of February 1, 2020 and February 2, 2019, interest rate swaps with notional amounts totaling $1,500 million were designated as fair value hedges, and all were perfectly effective during 2019 and 2018. Effect of Hedges on Debt (millions)February 1, 2020February 2, 2019 Current portion of long-term debt and other borrowings Carrying amount of hedged debt $ — $ 996 Cumulative hedging adjustments, included in carrying amount — (3) Long-term debt and other borrowings Carrying amount of hedged debt 1,630 508 Cumulative hedging adjustments, included in carrying amount 137 10 Effect of Hedges on Net Interest Expense (millions) 2019 2018 2017 Gain (loss) on fair value hedges recognized in Net Interest Expense Interest rate swap designated as fair value hedges $ 130 $ 13 $ (10) Hedged debt (130) (13) 10 Total $ — $ — $ — 17. Leases We lease certain retail stores, warehouses, distribution centers, office space, land, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and nonlease components for new and reassessed leases. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We rent or sublease certain real estate to third parties. Our lease and sublease portfolio consists mainly of operating leases with CVS Pharmacy Inc. (CVS) for space within our stores. TARGET CORPORATION 2019 Form 10-K 47

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements Leases (millions) Classification February 1, 2020February 2, 2019 Assets Operating Operating Lease Assets $ 2,236 $ 1,965 Finance Buildings and Improvements, net of Accumulated Depreciation (a) 1,180 872 Total leased assets $ 3,416 $ 2,837 Liabilities Current Operating Accrued and Other Current Liabilities $ 200 $ 166 Finance Current Portion of Long-term Debt and Other Borrowings 67 53 Noncurrent Operating Noncurrent Operating Lease Liabilities 2,275 2,004 Finance Long-term Debt and Other Borrowings 1,303 968 Total lease liabilities $ 3,845 $ 3,191 Note: We use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. (a)Finance lease assets are recorded net of accumulated amortization of $441 million and $371 million as of February 1, 2020 and February 2, 2019, respectively. Lease Cost (millions) Classification 2019 2018 2017 Operating lease cost (a) SG&A Expenses $ 287 $ 251 $ 221 Finance lease cost Amortization of leased assets Depreciation and Amortization (b) 82 65 63 Interest on lease liabilities Net Interest Expense 51 42 42 Sublease income (c) Other Revenue (13) (11) (9) Net lease cost $ 407 $ 347 $ 317 (a)Includes short-term leases and variable lease costs, which are immaterial. (b)Supply chain-related amounts are included in Cost of Sales. (c)Sublease income excludes rental income from owned properties of $48 million, $47 million, and $47 million for 2019, 2018, and 2017, respectively, which is included in Other Revenue. TARGET CORPORATION 2019 Form 10-K 48

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements 18. Income Taxes Earnings from continuing operations before income taxes were $4,190 million, $3,676 million, and $3,630 million during 2019, 2018, and 2017, respectively, including $653 million, $565 million, and $566 million earned by our foreign entities subject to tax outside of the U. S. During 2019, we reached an agreement with the IRS on certain tax positions related to our global sourcing operations, and as a result, we reclassified $169 million and $156 million of previously disclosed 2018 and 2017 earnings, respectively, from foreign to domestic to conform to the current period classification. Tax Rate Reconciliation-Continuing Operations 2019 2018 2017 Federal statutory rate 21. 0 % 21. 0 % 33. 7 % State income taxes, net of the federal tax benefit 3. 7 3. 6 2. 2 International (1. 4) (1. 3) (4. 6) Tax Act (a) — (1. 0) (9. 5) Excess tax benefit related to share-based payments (0. 4) (0. 3) (0. 1) Federal tax credits (0. 8) (1. 1) (0. 8) Other (0. 1) (0. 6) (1. 0) Effective tax rate 22. 0 % 20. 3 % 19. 9 % (a)Represents the discrete benefit of remeasuring our net deferred tax liabilities at the new lower U. S. corporate income tax rate. Provision for Income Taxes (millions) 2019 2018 2017 Current: Federal $ 536 $ 257 $ 746 State 169 116 105 International 38 51 59 Total current 743 424 910 Deferred: Federal 150 263 (229) State 29 57 27 International (1) 2 14 Total deferred 178 322 (188) Total provision $ 921 $ 746 $ 722 In December 2017, the U. S. government enacted the Tax Cuts and Jobs Act tax reform legislation (the Tax Act), which among other matters reduced the U. S. corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. In 2017, we recorded a provisional $343 million net tax benefit primarily related to the remeasurement of certain deferred tax assets and liabilities, including $372 million of benefit from the new lower rate, partially offset by $29 million of deferred income tax expense from our foreign operations. During 2018, we completed our Tax Act accounting and recorded adjustments to previously-recorded provisional amounts, resulting in a $36 million tax benefit primarily related to the remeasurement of deferred tax assets and liabilities. Beginning with 2018, we are subject to a new tax on global intangible low-taxed income that is imposed on foreign earnings. We have made an accounting election to record this tax as a period cost and thus have not adjusted any of the deferred tax assets or liabilities of our foreign subsidiaries for the new tax. Net impacts of this new tax were immaterial and are included in our provision for income taxes for 2019 and 2018. TARGET CORPORATION 2019 Form 10-K 50

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements Net Deferred Tax Asset / (Liability) (millions)February 1, 2020February 2, 2019 Gross deferred tax assets: Accrued and deferred compensation $ 264 $ 248 Accruals and reserves not currently deductible 169 181 Self-insured benefits 124 114 Deferred occupancy income 148 157 Lease liabilities 1,000 823 Other 58 40 Total gross deferred tax assets 1,763 1,563 Gross deferred tax liabilities: Property and equipment (1,767) (1,557) Leased assets (880) (731) Inventory (156) (140) Other (74) (95) Total gross deferred tax liabilities (2,877) (2,523) Total net deferred tax liability $ (1,114) $ (960) Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year the temporary differences are expected to be recovered or settled. Tax rate changes affecting deferred tax assets and liabilities are recognized at the enactment date. We recognized a net tax benefit of $36 million and $372 million in 2018 and 2017, respectively, primarily because we remeasured our net deferred tax liabilities using the new lower U. S. corporate tax rate. Beginning in 2017, due to changes effected by the Tax Act and other reasons, we have not asserted indefinite reinvestment in our foreign operations. Because of this change, we recorded a deferred tax charge of $29 million during 2017. We file a U. S. federal income tax return and income tax returns in various states and foreign jurisdictions. The U. S. Internal Revenue Service (IRS) has completed exams on the U. S. federal income tax returns for years 2017 and prior. With few exceptions, we are no longer subject to state and local or non-U. S. income tax examinations by tax authorities for years before 2013. Reconciliation of Liability for Unrecognized Tax Benefits (millions) 2019 2018 2017 Balance at beginning of period $ 300 $ 325 $ 153 Additions based on tax positions related to the current year 28 58 112 Additions for tax positions of prior years 13 10 142 Reductions for tax positions of prior years (69) (91) (71) Settlements (112) (2) (11) Balance at end of period $ 160 $ 300 $ 325 As a result of the 2019 agreement with the IRS on certain tax positions related to our global sourcing operations, we reclassified $149 million of our liability for unrecognized tax benefits to taxes payable. This settlement had an insignificant effect on 2019 income tax expense. TARGET CORPORATION 2019 Form 10-K 51

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements Compensation expense associated with share-based awards is recognized on a straight-line basis over the required service period and reflects estimated forfeitures. Share-based compensation expense recognized in Selling, General and Administrative Expenses was $152 million, $134 million, and $115 million in 2019, 2018, and 2017, respectively. The related income tax benefit was $27 million, $26 million, and $26 million in 2019, 2018, and 2017, respectively. Restricted Stock Units We issue restricted stock units and performance-based restricted stock units generally with 3-year cliff or 4-year graduated vesting from the grant date (collectively restricted stock units) to certain team members. The final number of shares issued under performance-based restricted stock units is based on our total shareholder return relative to a retail peer group over a 3-year performance period. We also regularly issue restricted stock units to our Board of Directors, which vest quarterly over a 1-year period and are settled in shares of Target common stock upon departure from the Board. The fair value for restricted stock units is calculated based on the stock price on the date of grant, incorporating an analysis of the total shareholder return performance measure where applicable. The weighted average grant date fair value for restricted stock units was $80. 01, $72. 65, and $56. 19 in 2019, 2018, and 2017, respectively. Restricted Stock Unit Activity Total Nonvested Units Restricted Stock (a)Grant Date Fair Value (b) February 2, 2019 3,815 $ 66. 86 Granted 2,157 80. 01 Forfeited (556) 71. 74 Vested (1,100) 66. 76 February 1, 2020 4,316 $ 72. 93 (a)Represents the number of shares of restricted stock units, in thousands. For performance-based restricted stock units, assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding restricted stock units and performance-based restricted stock units as of February 1, 2020 was 4,278 thousand. (b)Weighted average per unit. The expense recognized each period is partially dependent upon our estimate of the number of shares that will ultimately be issued. As of February 1, 2020, there was $149 million of total unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted average period of 2. 5 years. The fair value of restricted stock units vested and converted to shares of Target common stock was $89 million, $119 million, and $87 million in 2019, 2018, and 2017, respectively. Performance Share Units We issue performance share units to certain team members that represent shares potentially issuable in the future. Issuance is based upon our performance, generally relative to a retail peer group, over a 3-year performance period on certain measures primarily including sales growth, after-tax return on invested capital, and EPS growth. The fair value of performance share units is calculated based on the stock price on the date of grant. The weighted average grant date fair value for performance share units was $86. 81, $70. 94, and $55. 93 in 2019, 2018, and 2017, respectively. TARGET CORPORATION 2019 Form 10-K 53

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements Performance Share Unit Activity Total Nonvested Units Performance Share Units (a)Grant Date Fair Value (b) February 2, 2019 3,623 $ 67. 47 Granted 1,447 86. 81 Forfeited (875) 66. 64 Vested (620) 72. 32 February 1, 2020 3,575 $ 72. 80 (a)Represents the number of performance share units, in thousands. Assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding performance share units as of February 1, 2020 was 1,944 thousand. (b)Weighted average per unit. The expense recognized each period is partially dependent upon our estimate of the number of shares that will ultimately be issued. Future compensation expense for unvested awards could reach a maximum of $158 million assuming payout of all unvested awards. The unrecognized expense is expected to be recognized over a weighted average period of 2. 1 years. The fair value of performance share units vested and converted to shares of Target common stock was $50 million in 2019, $43 million in 2018, and $30 million in 2017. Stock Options In May 2017, we granted price-vested stock options (price-vested options) to certain team members, which have met the market condition and will become exercisable in 2020 pending service condition achievement. Shares received upon exercise, net of exercise costs and taxes, are subject to a 1-year post-exercise holding period. The fair value of the price-vested options was estimated using a lattice model. Through 2013, we granted nonqualified stock options to certain team members. All are vested and currently exercisable. Stock Option Activity Stock Options Total Outstanding Exercisable Number of Options (a)Exercise Price (b)Intrinsic Value (c)Number of Options (a)Exercise Price (b)Intrinsic Value (c) February 2, 2019 3,990 $ 55. 49 $ 63 2,039 $ 55. 38 $ 32 Granted — — Expired/forfeited (188) 55. 63 Exercised/issued (1,324) 55. 03 February 1, 2020 2,478 $ 55. 72 $ 136 714 $ 56. 02 $ 39 (a)In thousands. (b)Weighted average per share. (c)Represents stock price appreciation subsequent to the grant date, in millions. Stock Option Exercises (millions) 2019 2018 2017 Cash received for exercise price $ 73 $ 96 $ 109 Intrinsic value 59 50 34 Income tax benefit 15 12 13 As of February 1, 2020, there was $1 million of total unrecognized compensation expense related to price-vested options, which is expected to be recognized over a weighted average period of 0. 3 years. The weighted average remaining life of exercisable options is 2. 1 years, and the weighted average remaining life of all outstanding options is 3. 5 years. No options vested in 2019, 2018 or 2017. TARGET CORPORATION 2019 Form 10-K 54

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements 22. Defined Contribution Plans Team members who meet eligibility requirements can participate in a defined contribution 401(k) plan by investing up to 80 percent of their eligible earnings, as limited by statute or regulation. We match 100 percent of each team member's contribution up to 5 percent of eligible earnings. Company match contributions are made to funds designated by the participant, none of which are based on Target common stock. In addition, we maintain an unfunded, nonqualified deferred compensation plan for a broad management group 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 generally the same as the investment choices in our 401(k) plan, but also includes a fund based on Target common stock. We credit an additional 2 percent per year to the accounts of all active participants, excluding executive officers, in part to recognize the risks inherent to their participation in this plan. We also maintain a frozen, unfunded, nonqualified deferred compensation plan covering approximately 50 participants. Our total liability under these plans was $551 million and $517 million as of February 1, 2020 and February 2, 2019, respectively. We mitigate our risk of offering the nonqualified plans through investing in company-owned life insurance and prepaid forward contracts that substantially offset our economic exposure to the returns of these plans. 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. See Notes 6 and 11 for additional information. Plan Expenses (millions) 2019 2018 2017 401(k) plan matching contributions expense $ 237 $ 229 $ 219 Nonqualified deferred compensation plans Benefits expense 80 18 83 Related investment expense (income) (53) 6 (48) Nonqualified plan net expense $ 27 $ 24 $ 35 23. Pension Plans We have a U. S. qualified defined benefit pension plan covering team members who meet age and service requirements, including date of hire in certain circumstances. Effective January 1, 2009, our qualified defined benefit pension plan was closed to new participants, with limited exceptions. We also have unfunded nonqualified pension plans for team members with qualified plan compensation restrictions, as well as international plans. Eligibility for, and the level of, these benefits varies depending on each team member's date of hire, length of service and/or team member compensation. Funded Status Qualified Plan Nonqualified and International Plans (millions) 2019 2018 2019 2018 Projected benefit obligations $ 4,492 $ 3,905 $ 66 $ 53 Fair value of plan assets 4,430 3,915 11 10 Funded / (underfunded) status $ (62) $ 10 $ (55) $ (43) Contributions and Estimated Future Benefit Payments Our obligations to plan participants can be met over time through a combination of company contributions to these plans and earnings on plan assets. We are not required to make any contributions to our qualified defined benefit pension plan in 2020. However, depending on investment performance and plan funded status, we may elect to make a contribution. TARGET CORPORATION 2019 Form 10-K 55

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements Estimated Future Benefit Payments (millions)Pension Benefits 2020 $ 304 2021 207 2022 216 2023 224 2024 232 2025-2029 1,266 Cost of Plans Net Pension Benefits Expense (millions) Classification 2019 2018 2017 Service cost benefits earned SG&A Expenses $ 93 $ 95 $ 86 Interest cost on projected benefit obligation Net Other (Income) / Expense 149 146 140 Expected return on assets Net Other (Income) / Expense (248) (246) (250) Amortization of losses Net Other (Income) / Expense 62 82 61 Amortization of prior service cost Net Other (Income) / Expense (11) (11) (11) Settlement charges Net Other (Income) / Expense 1 4 1 Total $ 46 $ 70 $ 27 Assumptions Benefit Obligation Weighted Average Assumptions 2019 2018 Discount rate 3. 13 % 4. 28 % Average assumed rate of compensation increase 3. 00 3. 00 Net Periodic Benefit Expense Weighted Average Assumptions 2019 2018 2017 Discount rate 4. 28 % 3. 93 % 4. 40 % Expected long-term rate of return on plan assets 6. 30 6. 30 6. 55 Average assumed rate of compensation increase 3. 00 3. 00 3. 00 The weighted average assumptions used to measure net periodic benefit expense each year are the rates as of the beginning of the year (i. e., the prior measurement date). Our most recent compound annual rate of return on qualified plan assets was 6. 6 percent, 9. 0 percent, 7. 2 percent, and 6. 3 percent for the 5-year, 10-year, 15-year, and 20-year time periods, respectively. The market-related value of plan assets is used in calculating the expected return on assets. Historical differences between expected and actual returns are deferred and recognized in the market-related value over a 5-year period from the year in which they occur. We review the expected long-term rate of return annually and revise it as appropriate. Additionally, we monitor the mix of investments in our portfolio to ensure alignment with our long-term strategy to manage pension cost and reduce volatility in our assets. Our 2019 expected annualized long-term rate of return assumptions were 6. 5 percent for domestic equity securities, 8. 0 percent for international equity securities, 4. 5 percent for long-duration debt securities, 8. 0 percent for diversified funds, and 7. 0 percent for other investments. These estimates are a judgmental matter in which we consider the composition of our asset portfolio, our historical long-term investment performance, and current market conditions. TARGET CORPORATION 2019 Form 10-K 56

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FINANCIAL STATEMENTS Table of Contents NOTES Index to Financial Statements Benefit Obligation Change in Projected Benefit Obligation Qualified Plan Nonqualified and International Plans (millions) 2019 2018 2019 2018 Benefit obligation at beginning of period $ 3,905 $ 4,061 $ 53 $ 63 Service cost 90 93 3 2 Interest cost 146 145 3 1 Actuarial (gain) / loss 615 (167) 11 (1) Participant contributions 11 6 — — Benefits paid (275) (233) (4) (12) Benefit obligation at end of period (a) $ 4,492 $ 3,905 $ 66 $ 53 (a)Accumulated benefit obligation—the present value of benefits earned to date assuming no future salary growth—is materially consistent with the projected benefit obligation in each period presented. Plan Assets Change in Plan Assets Qualified Plan Nonqualified and International Plans (millions) 2019 2018 2019 2018 Fair value of plan assets at beginning of period $ 3,915 $ 4,107 $ 10 $ 11 Actual return on plan assets 729 (65) — (1) Employer contributions 50 100 5 12 Participant contributions 11 6 — — Benefits paid (275) (233) (4) (12) Fair value of plan assets at end of period $ 4,430 $ 3,915 $ 11 $ 10 Our asset allocation policy is designed to reduce the long-term cost of funding our pension obligations. The plan invests with both passive and active investment managers depending on the investment. The plan also seeks to reduce the risk associated with adverse movements in interest rates by employing an interest rate hedging program, which may include the use of interest rate swaps, total return swaps, and other instruments. Asset Category Current Targeted Actual Allocation Allocation 2019 2018 Domestic equity securities (a) 15 % 14 % 13 % International equity securities 10 10 9 Debt securities 45 46 47 Diversified funds 25 25 24 Other (b) 5 5 7 Total 100 % 100 % 100 % (a)Equity securities include our common stock in amounts substantially less than 1 percent of total plan assets in both periods presented. (b)Other assets include private equity, mezzanine and high-yield debt, natural resources and timberland funds, multi-strategy hedge funds, derivative instruments, and real estate. TARGET CORPORATION 2019 Form 10-K 57

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