calculation of after-tax return on invested capital

Numerator

(dollars in millions) (unaudited)

Q3 2019

Q2 2019

Q1 2019

Q4 2018

Q3 2018(a)

Q2 2018(a)

Q1 2018(a)

Q4 2017(a)(b)

Q3 2017(b)

Q2 2017(b)

Q1 2017(b)

Q4 2016(b)

Operating income

$

4,577

$

4,395

$

4,204

$

4,110

$

4,122

$

4,150

$

4,110

$

4,224

$

4,418

$

4,601

$

4,723

$

4,864

+ Net other income / (expense)

$

45

$

42

$

33

$

27

$

35

$

41

$

51

$

59

$

69

$

80

$

93

$

88

EBIT

$

4,622

$

4,437

$

4,237

$

4,137

$

4,157

$

4,191

$

4,161

$

4,283

$

4,487

$

4,681

$

4,816

$

4,952

+ Operating lease interest (c)

86

85

84

83

83

81

80

79

77

76

75

74

- Income taxes (d)(e)

1,043

937

878

856

524

589

692

867

1,413

1,564

1,633

1,643

Net operating profit after taxes

$

3,665

$

3,585

$

3,443

$

3,364

$

3,716

$

3,683

$

3,549

$

3,495

$

3,151

$

3,193

$

3,258

$

3,383

Denominator

(dollars in millions) (unaudited)

Q3 2019

Q2 2019

Q1 2019

Q4 2018

Q3 2018

Q2 2018

Q1 2018

Q4 2017(b)

Q3 2017(b)

Q2 2017(b)

Q1 2017(b)

Q4 2016(b)

Q3 2016(b)

Q2 2016(b)

Q1 2016(b)

Q4 2015

Current portion of long-term debt and other

borrowings

$

1,159

$

1,153

$

1,056

$

1,052

$

1,535

$

1,044

$

283

$

281

$

1,366

$

1,365

$

1,729

$

1,729

$

739

$

653

$

1,634

$

815

+ Noncurrent portion of long-term debt

10,513

10,365

11,357

10,223

10,104

10,108

11,107

11,117

11,090

10,706

10,916

10,862

11,939

11,894

12,431

11,945

+ Shareholders' equity

11,545

11,836

11,117

11,297

11,080

11,167

11,158

11,651

11,092

11,055

10,979

10,915

11,030

11,538

12,506

12,965

+ Operating lease liabilities (f)

2,390

2,285

2,231

2,170

2,208

2,183

2,157

2,072

2,041

2,032

2,049

1,970

1,925

1,894

1,902

1,457

- Cash and cash equivalents

969

1,656

1,173

1,556

825

1,180

1,060

2,643

2,725

2,291

2,680

2,512

1,231

1,480

4,036

4,046

- Net assets of discontinued operations (g)

-

-

-

-

-

-

-

2

4

10

17

62

60

80

249

226

Invested capital

$

24,638

$

23,983

$

24,588

$

23,186

$

24,102

$

23,322

$

23,645

$

22,476

$ 22,860

$ 22,857

$ 22,976

$ 22,902

$

24,342

$

24,419

$

24,188

$

22,910

Average invested capital (h)

$24,369

$23,652

$24,116

$22,831

$

23,481

$

23,090

$

23,310

$

22,689

$23,601

$23,639

$23,582

$22,906

After-tax return on invested capital (e) (i)

15.0%

15.2%

14.3%

14.7%

15.8%

16.0%

15.2%

15.4%

13.4%

13.5%

13.8%

14.8%

After-tax return on invested capital excluding

discrete impacts of Tax Act (e)

15.1%

15.0%

14.1%

14.6%

13.9%

14.2%

13.5%

13.6%

  1. The trailing 12 months ended November 3, 2018, August 4, 2018, May 5, 2018, and February 3, 2018 consisted of 53 weeks compared with 52 weeks in the comparable periods presented.
  2. Beginning with the first quarter 2018, we adopted the new accounting standards for revenue recognition, leases, and pensions. We are presenting certain prior period results on a basis consistent with the new standards and conformed to the current period presentation. We provided additional information about the impact of the new accounting standards on previously reported financial information in a Form 8-K filed on May 11, 2018.
  3. Represents the add-back to operating income to reflect 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 expense on our Consolidated Statements of Operations.
  4. Calculated using the effective tax rate for continuing operations.
  5. The effective tax rate for the trailing twelve months ended November 2, 2019, August 3, 2019, May 4, 2019, February 2, 2019, November 3, 2018, August 4, 2018, May 5, 2018, and February 3, 2018, includes discrete tax benefits of the Tax Cuts and Jobs Act (Tax Act). The effective tax rate for these periods also includes the impact of the new lower federal income tax rate.
  6. Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities on the Consolidated Statements of Financial Position.
  7. Included in Other Assets and Liabilities on the Consolidated Statements of Financial Position.
  8. 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.
  9. Additional information as previously reported is available under "summary financials" on investors.target.com.

Last Updated: 11/20/2019

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Target Corporation published this content on 20 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 November 2019 12:44:01 UTC