<PAGE>
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 ACT OF 1934.
For the quarterly period ended July 29, 1995
--------------
Commission file number 1-6049
------
Dayton Hudson Corporation
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-0215170
--------------------------------------------------------------------------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)
777 Nicollet Mall Minneapolis, Minnesota 55402-2055
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 370-6948
--------------------------------------------------------------------------------
None
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
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 and
(2) has been subject to such filing requirements for the past 90 days.
The number of shares outstanding of common stock as of July 29, 1995 was
71,848,902.
<PAGE>
DAYTON HUDSON CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NO.
<S> <C> <C>
PART I FINANCIAL INFORMATION:
ITEM 1 - FINANCIAL STATEMENTS
Condensed Consolidated Results of Operations for the Three 1
Months, Six Months and Twelve Months ended July 29, 1995 and
July 30, 1994
Condensed Consolidated Statements of Financial Position at July 2
29, 1995, January 28, 1995 and July 30, 1994
Condensed Consolidated Statements of Cash Flows for the Six 3
Months ended July 29, 1995 and July 30, 1994
Notes to Condensed Consolidated Financial Statements 4
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS 5-9
AND FINANCIAL CONDITION
PART II OTHER INFORMATION:
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 10
Signatures 11
Exhibit Index 12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED Dayton Hudson Corporation
RESULTS OF OPERATIONS and Subsidiaries
(Millions of Dollars, Except Per Share Data) Three Months Ended Six Months Ended Twelve Months Ended
-----------------------------------------------------------------------------------------------------------------------
JULY 29, July 30, JULY 29, July 30, JULY 29, July 30,
(Unaudited) 1995 1994 1995 1994 1995 1994
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES $5,236 $4,802 $9,993 $9,267 $22,037 $ 20,173
COSTS AND EXPENSES
Cost of retail sales, buying and
occupancy 3,896 3,519 7,400 6,772 16,264 14,783
Selling, publicity and administrative 941 874 1,834 1,694 3,771 3,423
Depreciation 143 131 283 260 554 508
Interest expense, net 108 105 215 211 430 432
Taxes other than income taxes 101 92 196 185 384 361
-----------------------------------------------------------------------------------------------------------------------
Total Costs and Expenses 5,189 4,721 9,928 9,122 21,403 19,507
-----------------------------------------------------------------------------------------------------------------------
Earnings Before Income Taxes 47 81 65 145 634 666
Provision for Income Taxes 19 32 26 57 249 257
-----------------------------------------------------------------------------------------------------------------------
NET EARNINGS $ 28 $ 49 $ 39 $ 88 $ 385 $ 409
=======================================================================================================================
PRIMARY EARNINGS PER SHARE $ 0.32 $ 0.62 $ 0.41 $ 1.10 $ 5.07 $ 5.45
FULLY DILUTED EARNINGS PER SHARE $ 0.32 $ 0.61 $ 0.41 $ 1.07 $ 4.87 $ 5.21
=======================================================================================================================
DIVIDENDS DECLARED PER COMMON SHARE $ 0.44 $ 0.42 $ 0.88 $ 0.84 $ 1.72 $ 1.66
AVERAGE COMMON SHARES OUTSTANDING
(MILLIONS):
Primary 72.3 72.0 72.2 72.0 72.1 71.9
Fully Diluted 72.4 76.3 72.3 76.3 76.3 76.2
=======================================================================================================================
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS Dayton Hudson Corporation
OF FINANCIAL POSITION and Subsidiaries
JULY 29, January 28, July 30,
(Millions of Dollars) 1995 1995* 1994
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS (UNAUDITED) (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 175 $ 147 $ 169
Accounts receivable 1,596 1,810 1,418
Merchandise inventories 3,111 2,777 2,860
Other 172 225 129
---------------------------------------------------------------------------------------------------
Total Current Assets 5,054 4,959 4,576
PROPERTY AND EQUIPMENT 9,670 9,009 8,679
Accumulated depreciation (2,817) (2,624) (2,508)
------ ------ ------
Net Property and Equipment 6,853 6,385 6,171
OTHER 346 353 342
---------------------------------------------------------------------------------------------------
TOTAL ASSETS $12,253 $11,697 $11,089
===================================================================================================
LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES
Notes payable and current portion
of long-term debt $ 284 $ 209 $ 178
Accounts payable 2,165 1,961 1,842
Other 1,019 1,220 994
---------------------------------------------------------------------------------------------------
Total Current Liabilities 3,468 3,390 3,014
LONG-TERM DEBT 4,969 4,488 4,599
DEFERRED INCOME TAXES AND OTHER 581 582 545
CONVERTIBLE PREFERRED STOCK 355 360 365
LOAN TO ESOP (136) (166) (192)
COMMON SHAREHOLDERS' INVESTMENT 3,016 3,043 2,758
---------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND COMMON
SHAREHOLDERS' INVESTMENT $12,253 $11,697 $11,089
===================================================================================================
COMMON SHARES OUTSTANDING (MILLIONS) 71.8 71.7 71.6
===================================================================================================
</TABLE>
* The January 28, 1995 Consolidated Statement of Financial Position is
condensed from the audited financial statements.
See accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
CONDENSED CONSOLIDATED Dayton Hudson Corporation
STATEMENTS OF CASH FLOWS and Subsidiaries
<TABLE>
<CAPTION>
(Millions of Dollars) Six Months Ended
---------------------------------------------------------------------
(Unaudited) JULY 29, July 30,
1995 1994
---------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 39 $ 88
Reconciliation to cash flow:
Depreciation 283 260
Deferred tax provision (17) (38)
Other noncash items affecting earnings 42 49
Changes in operating accounts
providing/(requiring)cash:
Accounts receivable 214 118
Merchandise inventories (334) (363)
Accounts payable 204 188
Other (133) 6
---------------------------------------------------------------------
Cash Flow Provided by Operations 298 308
---------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for property, net (760) (496)
---------------------------------------------------------------------
Cash Flow Required for Investing
Activities (760) (496)
---------------------------------------------------------------------
Net Financing Requirements (462) (188)
---------------------------------------------------------------------
FINANCING ACTIVITIES
Increase in notes payable 157 -
Additions to long-term debt 543 272
Reduction of long-term debt (144) (144)
Dividends paid (73) (72)
Other 7 (20)
---------------------------------------------------------------------
Cash Flow Provided by Financing
Activities 490 36
---------------------------------------------------------------------
Net Increase/(Decrease) in Cash and
Cash Equivalents 28 (152)
Cash and Cash Equivalents at Beginning
of Period 147 321
---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 175 $ 169
=====================================================================
</TABLE>
Amounts in this statement are presented on a cash basis and therefore may
differ from those shown elsewhere in this 10-Q report. Cash paid for interest
(including interest capitalized) in the first six months of 1995 and 1994 was
$216 million and $213 million, respectively. Cash paid for income tax payments
was $158 million and $175 million during the first six months of 1995 and 1994,
respectively.
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
NOTES TO CONDENSED CONSOLIDATED Dayton Hudson Corporation
FINANCIAL STATEMENTS and Subsidiaries
ACCOUNTING POLICIES
The accompanying condensed consolidated financial statements should be read in
conjunction with the financial statement disclosures contained in the
Corporation's 1994 Annual Shareholders' Report throughout pages 21-32. As
explained on page 31 of the Annual Report, the same accounting policies are
followed in preparing quarterly financial data as are followed in preparing
annual data. In the opinion of management, all adjustments necessary for a
fair presentation of quarterly operating results are reflected herein and are
of a normal, recurring nature.
Due to the seasonal nature of the retail industry, earnings for periods which
exclude the Christmas season are not indicative of the operating results that
may be expected for the full fiscal year.
PER SHARE DATA
Primary earnings per share equal net earnings, less dividend requirements on
ESOP preferred stock, divided by the average number of common shares and common
share equivalents outstanding during the period.
Fully diluted earnings per share assumes conversion of the ESOP preferred stock
into common stock, unless the conversion is not dilutive. Net earnings are
adjusted for the additional expense required to fund the ESOP debt service
which results from the assumed replacement of the ESOP preferred dividends with
common stock dividends, unless the assumed conversion is not dilutive. For the
three- and six-months ended July 29, 1995, fully diluted average common shares
outstanding and fully diluted net earnings exclude the assumed conversion of
ESOP preferred stock as it was not dilutive.
Earnings per share are calculated independently for each of the periods
presented and therefore the sum of the quarters may not equal the year-to-date
or twelve-month amounts.
References to earnings per share relate to fully diluted earnings per share.
SUBSEQUENT EVENT
Subsequent to the end of the second quarter, the Corporation entered into an
accounts receivable securitization transaction. In this transaction, Dayton
Hudson Receivables Corporation, a subsidiary, will sell to the public $400
million of fixed-rate certificates backed by the Corporation's credit card
receivables. This issue of asset backed certificates will have a maturity of
three years and a certificate rate of 6.10 percent. Proceeds from the sale of
the certificates will be used to repay outstanding debt, to fund internal
credit expansion and for general corporate purposes.
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
SECOND QUARTER 1995
ANALYSIS OF OPERATIONS
Second quarter net earnings were $28 million, compared with $49 million for
second quarter last year. For the first half of 1995, net earnings decreased
56% to $39 million from $88 million for the same period a year ago. Earnings
per share for the second quarter were $.32, compared with $.61 per share last
year. For the six-month period ended July 29, 1995, earnings per share were
$.41 compared with $1.07 for the same period last year.
The following table illustrates the impact of the major factors contributing to
the changes in earnings per share:
<TABLE>
<CAPTION>
Three Six
Months Months
-------------------------------------------------------
<S> <C> <C>
1994 Earnings Per Share $ .61 $ 1.07
Changes in earnings per share:
Revenues .25 .55
Gross margin rate (.47) (.84)
Operating expense rate (.06) (.38)
Start-up expense .05 .04
Interest expense, net (.02) (.03)
Corporate expense and other (.04) -
-------------------------------------------------------
1995 Earnings Per Share $ .32 $ .41
=======================================================
</TABLE>
Our second quarter and six-month earnings shortfalls were primarily due to
weak sales and earnings performance at Mervyn's. In addition, the Department
Store Division's (DSD) earnings declined. Target continued to report solid
results.
The revenue increases reflect the continued strong sales volume growth at
Target, as well as increased finance charge and late fee revenues at all three
operating divisions. The overall gross margin rate was unfavorable to last
year, reflecting increased promotional markdowns at both Mervyn's and DSD.
The overall operating expense rate for the second quarter increased slightly
compared with last year as a result of lower sales leveraging at Mervyn's and
higher buying and occupancy costs at all three operating divisions combined
with higher store payroll costs at Target partially offset by the positive
effect of the business mix. The operating expense rate for the six-month
period was higher due to lack of sales leverage at Mervyn's and increased
buying and occupancy costs at all three operating divisions.
Due to strong growth at Target, our lowest margin and expense rate division,
the Corporation's overall revenue growth and operating expense rate were
favorably affected, while the gross margin rate was unfavorably affected.
5
<PAGE>
Revenues
--------
For the three- and six-month periods ended July 29, 1995, total revenues
increased 9% and 8%, respectively. Comparable-store revenues (revenues from
stores open longer than a year) increased 3% and 2%, respectively.
Revenues by business segment were as follows :
<TABLE>
<CAPTION>
(Millions of dollars) Three Months Ended Percentage Change
------------------- -------------------
JULY 29, July 30, All Comparable
1995 1994 Stores Stores
------- ------ ------ ----------
<S> <C> <C> <C> <C>
Target $3,514 $3,084 14% 6%
Mervyn's 1,030 1,051 (2) (4)
Department Store Division 692 667 4 4
------ ------ -- --
TOTAL $5,236 $4,802 9% 3%
====== ====== == ==
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Percentage Change
------------------- -------------------
JULY 29, July 30, All Comparable
1995 1994 Stores Stores
------- ------- ------ ----------
<S> <C> <C> <C> <C>
Target $6,671 $5,903 13% 5%
Mervyn's 1,944 2,011 (3) (5)
Department Store Division 1,378 1,353 2 2
------ ------ -- --
TOTAL $9,993 $9,267 8% 2%
====== ====== == ==
</TABLE>
Target's strong revenue growth reflects new store growth combined with a 6%
improvement in base business revenues. While Mervyn's total and comparable-
store revenues declined in the second quarter and six-month period, we are
optimistic that the repositioning efforts will result in steadily improving
performance beginning with the third quarter. DSD's total and comparable-
store revenues showed a modest improvement due to an increase in promotional
efforts.
Operating Profit
----------------
Overall operating profit declined 15% and 21% for the quarter and six-month
period, respectively, primarily the result of weak sales and earnings at
Mervyn's and lower earnings at DSD. (Operating profit is LIFO earnings from
operations before corporate expense, interest and income taxes.)
6
<PAGE>
TARGET reported a moderate improvement in operating profit for the three- and
six-month periods compared with the same periods last year. The second quarter
earnings growth was driven by strong revenue increases and lower charges for
store closings and relocations. Excluding the effect of these charges,
Target's operating profit was even with last year's exceptionally strong
second quarter. The gross margin rate declined slightly in the second quarter
due to slightly lower markup. Target's gross margin rate for the first half of
1995 was approximately equal to last year. Target's operating expense rate
increased for the second quarter and six-month period principally due to
higher store expenses associated with wage rate increases as well as enhanced
guest services, partially offset in the second quarter by lower store closing
and relocation expenses.
MERVYN'S operating profit was essentially zero for the second quarter and six-
month period. The gross margin rate deteriorated in both periods, reflecting
a significant increase in promotional markdowns. The operating expense rates
increased reflecting lower sales leveraging. In addition, for the six-month
period the operating expense rate reflects increased marketing expenses.
Looking forward, the promotional markdown rate for the fall season is expected
to stabilize at second quarter 1995's level, but increase compared to the
prior year, with the continuing implementation of Mervyn's promotional
strategy. This increase is expected to be offset by higher markup and lower
clearance markdowns. Mervyn's long-term objective is to balance its profit
formula by restoring the gross margin rate to recent historical levels and by
improving the operating expense rate leveraging through improved sales
performance.
The key components of Mervyn's new strategy, which will be fully implemented
during the third quarter, include an increased emphasis on national brands, a
higher percentage of merchandise on sale each week, greater use of advertising
circulars, a broader assortment of merchandise, and the introduction of a
California theme to merchandise and advertising. Through this strategy,
Mervyn's repositioning efforts are expected to result in improving performance
beginning in the third quarter.
DSD'S second quarter and six-month operating profit declined compared to the
same periods last year. The gross margin rates deteriorated due to increased
promotional markdowns, partially offset by increased markup. The operating
expense rates rose principally due to increases in marketing expenses,
depreciation on newly remodeled stores and buying and occupancy costs
partially offset by store efficiencies.
In the second half of 1995, the impact of the accounts receivable
securitization transaction will be reflected proportionately (based on
respective receivable balances) in each division's operating profit results as
a reduction of finance charge revenue as well as a reduction of bad debt
expense. The net decrease in total operating profit in the second half of 1995
of approximately $9 million is expected to be offset by savings realized
through reduced interest expense due to the replacement of debt with the
proceeds from the accounts receivable securitization transaction.
Other Performance Factors
-------------------------
The last-in first-out (LIFO) provision was zero for the three- and six-month
periods ended July 29, 1995 and July 30, 1994. Management does not currently
expect a material LIFO charge or credit for the total year. The cumulative
LIFO provision was $61 million at July 29, 1995 and January 28, 1995, and $80
million at July 30, 1994.
7
<PAGE>
Net interest expense increased $3 million ( $.02 per share) in the second
quarter and $4 million ($.03 per share) in the first half of 1995 compared
with the same periods last year as higher average debt balances were
substantially offset by lower average portfolio interest rates. Looking
forward, this trend is expected to continue through the second half of 1995.
In addition, interest expense savings will be realized through the
securitization of accounts receivable.
The estimated annual effective income tax rate is 39.5% for 1995. This
compares with an estimated rate of 39.0% in 1994.
ANALYSIS OF FINANCIAL CONDITION
Our financial condition remains strong. Our ratio of debt (including the
present value of operating leases) to total capitalization was 60% at the end
of second quarter 1995, compared with 59% a year ago and 57% at year end. The
higher rate at the end of second quarter reflects the additional capital
invested in new stores and store remodels, as well as credit expansion.
At July 29, 1995, working capital was $1,586 million, or 2% higher than a year
ago. Accounts receivable increased 13% compared to a year ago reflecting the
planned growth of internal credit balances associated with changes in payment
terms at DSD and Mervyn's, and the expansion of Target's proprietary credit
card. Compared to year-end, accounts receivable decreased 12%, the typical
reduction from a seasonal high balance. As a result of the securitization
transaction, accounts receivable will be reduced by $400 million.
Merchandise inventories and accounts payable increased 9% and 18%,
respectively, compared to second quarter 1994, primarily as a result of new
store growth and enhanced accounts payable leveraging. Also, due to new store
growth, merchandise inventories and accounts payable increased 12% and 10%,
respectively, compared to year-end.
Capital expenditures for the first half of 1995 were $762 million, compared
with $496 million for the same period a year ago. Approximately 64% of these
expenditures were made by Target, 25% by Mervyn's, 10% by DSD and 1% by
Corporate. Mervyn's capital expenditures primarily represent the acquisition
and remodel of several real estate sites in the Minneapolis-St. Paul market.
8
<PAGE>
STORE DATA
At July 29, 1995, Target operated 645 stores in 32 states, Mervyn's operated
294 stores in 16 states and DSD operated 63 stores in nine states, for a total
of 1,002 stores in 33 states. During the quarter, the Corporation opened 22
Target stores and seven Mervyn's stores.
Retail square footage was as follows:
<TABLE>
<CAPTION>
JULY 29, January 28, July 30,
(In thousands) 1995 1995 1994
-------------------------------------------------
<S> <C> <C> <C>
Target 68,198 64,446 61,331
Mervyn's 24,148 23,130 22,828
DSD 13,824 13,824 13,824
-------------------------------------------------
Total 106,170 101,400 97,983
-------------------------------------------------
</TABLE>
9
<PAGE>
PART II. OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
(2). Not applicable
(4). Instruments defining the rights of security holders, including
indentures. Registrant agrees to furnish the Commission on
request copies of instruments with respect to long-term debt.
(10). Not applicable
(11). Statements re Computations of Per Share Earnings
(12). Statements re Computations of Ratios
(15). Not applicable
(18). Not applicable
(19). Not applicable
(22). Not applicable
(23). Not applicable
(24). Not applicable
(27). Financial Data Schedule
(99). Not applicable
b) Reports on Form 8-K. Registrant did not file any reports on Form 8-K
during the quarter ended July 29, 1995.
10
<PAGE>
Signatures
----------
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.
DAYTON HUDSON CORPORATION
Registrant
Date: September 8, 1995 By /s/ Douglas A. Scovanner
-------------------------------
Douglas A. Scovanner
Senior Vice President and
Chief Financial Officer
Date: September 8, 1995 By /s/ J.A. Bogdan
-------------------------------
JoAnn Bogdan
Controller and
Chief Accounting Officer
11
<PAGE>
Exhibit Index
-------------
(11). Statements re Computations of Per Share Earnings
(12). Statements re Computations of Ratios
(27). Financial Data Schedule
12
<PAGE>
EXHIBIT (11)
DAYTON HUDSON CORPORATION AND SUBSIDIARIES
COMPUTATIONS OF PER SHARE EARNINGS
(MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Twelve Months Ended
---------------------------------- ---------------------------------- ---------------------------------
July 29, 1995 July 30, 1994 July 29, 1995 July 30, 1994 July 29, 1995 July 30, 1994
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
Earnings Shares Earnings Shares Earnings Shares Earnings Shares Earnings Shares Earnings Shares
-------- ------ -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Primary Computations
--------------------
Net earnings $ 28 $ 49 $ 39 $ 88 $ 385 $ 409
Less: Dividend
requirements on ESOP
preferred shares, net
of tax benefit on
unallocated shares (5) (4) (10) (9) (19) (17)
----- ------ ----- ----- ----- -----
Adjusted net earnings $ 23 $ 45 $ 29 $ 79 $ 366 $ 392
===== ====== ===== ===== ===== =====
Average common shares
outstanding 71.8 71.6 71.8 71.6 71.7 71.5
Average number of common
share equivalents:
Stock options 0.2 0.2 0.1 0.2 0.2 0.2
Performance shares 0.3 0.2 0.3 0.2 0.2 0.2
---- ---- ---- ---- ---- ----
Adjusted common
equivalent shares
outstanding--primary 72.3 72.0 72.2 72.0 72.1 71.9
==== ==== ==== ==== ==== ====
PRIMARY EARNINGS PER SHARE $0.32 $ 0.62 $ .41 $1.10 $5.07 $5.45
===== ====== ===== ===== ===== =====
Fully Diluted Computations
--------------------------
Net earnings $ 28 $ 49 $ 39 $ 88 $ 385 $ 409
Less: Dividend
requirements on ESOP
preferred shares,
net of tax benefit
on unallocated shares (5)/a/ - (10/a/ - - -
Less: Earnings impact of
assumed ESOP preferred
share conversion, net
of tax benefit on
unallocated shares -/a/ (3) -/a/ (6) (13) (12)
----- ------ ----- ----- ----- -----
Adjusted net earnings $ 23 $ 46 $ 29 $ 82 $ 372 $ 397
===== ====== ===== ===== ===== =====
Average common and common
equivalent
shares-primary 72.3 72.0 72.2 72.0 72.1 71.9
Additional common stock
equivalents
attributable to
application of the
treasury stock method 0.1 0.1 0.1 0.1 - -
Assumed conversion of ESOP
preferred shares -/a/ 4.2 -/a/ 4.2 4.2 4.3
---- ---- ---- ---- ---- ----
Adjusted common equivalent
shares outstanding--fully
diluted 72.4 76.3 72.3 76.3 76.3 76.2
==== ==== ==== ==== ==== ====
FULLY DILUTED EARNINGS PER
SHARE $0.32 $ 0.61 $0.41 $1.07 $4.87 $5.21
===== ====== ===== ===== ===== =====
AVERAGE ALLOCATED ESOP
PREFERRED SHARES
OUTSTANDING (IN MILLIONS) 2.5 2.1 2.4 2.0 2.1 1.6
==== ==== ==== ==== ==== ====
</TABLE>
/a/ ESOP preferred shares are not dilutive. See Notes to Condensed
Consolidated Financial Statements.
<PAGE>
EXHIBIT (12)
DAYTON HUDSON CORPORATION AND SUBSIDIARIES
COMPUTATIONS OF RATIOS OF EARNINGS TO FIXED CHARGES
FOR THE SIX MONTHS ENDED JULY 29, 1995 AND JULY 30, 1994
AND FOR THE FIVE YEARS ENDED JANUARY 28, 1995
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
Six Months Ended Fiscal Year Ended
--------------------- --------------------------------------------------------
July 29, July 30, Jan 28, Jan 29, Jan 30, Feb 1, Feb 2,
1995 1994 1995 1994 1993 1992 1991
------- ------- ------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Consolidated net earnings............... $ 39 $ 88 $ 434 $ 375 $ 383 $ 301 $ 412
Income taxes............................ 26 57 280 232 228 171 249
----- ----- ------ ------ ------ ----- ------
Total earnings...................... 65 145 714 607 611 472 661
----- ----- ------ ------ ------ ----- ------
Fixed charges:
Interest expense........................ 226 217 439 459 454 421 333
Dividends on preferred stock
(pre-tax basis)...................... 19 19 39 39 39 39 39
Interest portion of rental expense...... 32 25 56 45 43 39 46
----- ----- ------ ------ ------ ----- ------
Total fixed charges................. 277 261 534 543 536 499 418
Less:
Dividends on preferred stock
(pre-tax basis)...................... (19) (19) (39) (39) (39) (39) (39)
Capitalized interest.................... (8) (3) (7) (5) (6) (11) (8)
----- ----- ------ ------ ------ ----- ------
Fixed charges in earnings............ 250 239 488 499 491 449 371
----- ----- ------ ------ ------ ----- ------
Earnings available for fixed charges....... $ 315 $ 384 $1,202 $1,106 $1,102 $ 921 $1,032
===== ===== ====== ====== ====== ===== ======
Ratio of earnings to fixed charges......... 1.14 1.47 2.25 2.04 2.06 1.85 2.47
===== ===== ====== ====== ====== ===== ======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
Dayton Hudson Corporation's Form 10-Q for the second quarter ended July 29, 1995
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-03-1996
<PERIOD-START> JAN-29-1995
<PERIOD-END> JUL-29-1995
<CASH> 175
<SECURITIES> 0
<RECEIVABLES> 1651
<ALLOWANCES> 55
<INVENTORY> 3111
<CURRENT-ASSETS> 5054
<PP&E> 9670
<DEPRECIATION> 2817
<TOTAL-ASSETS> 12253
<CURRENT-LIABILITIES> 3468
<BONDS> 4969
<COMMON> 355
0
72
<OTHER-SE> 2944
<TOTAL-LIABILITY-AND-EQUITY> 12253
<SALES> 9802
<TOTAL-REVENUES> 9993
<CGS> 7400
<TOTAL-COSTS> 7400
<OTHER-EXPENSES> 2270
<LOSS-PROVISION> 43
<INTEREST-EXPENSE> 215
<INCOME-PRETAX> 65
<INCOME-TAX> 26
<INCOME-CONTINUING> 39
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0.41
</TABLE>
