January 15, 2015 / 1:42 PM / in 3 years

BRIEF-Target Corp plans to discontinue Canadian operations

Jan 15 (Reuters) - Target Corp -

* Target Corporation announces plans to discontinue Canadian operations

* Target says Target Canada takes steps to ensure a fair and orderly exit, seeks court approval to begin liquidation process under the CCAA

* Says Target Canada stores will remain open during the liquidation process

* Target Canada is also seeking court approval to engage Lazard to advise Target Canada in connection with the sale of its real estate assets

* Target Canada is seeking the appointment of Alvarez & Marsal Canada as monitor in the CCAA proceedings

* Expects to report approximately $5.4 billion of pre-tax losses on discontinued operations in fourth quarter of 2014

* Says expects to report approximately $275 million of pre-tax losses on discontinued operations in fiscal 2015

* Says seeking court’s approval to voluntarily make cash contributions of C$70 million (about US$59 million) into an employee trust

* Upon court approval, proposed trust would provide that nearly all Target Canada-based employees receive a minimum of 16 weeks of compensation

* Cash costs to discontinue Canadian operations expected to be $500 million to $600 million, most of which will occur in 2015 fiscal year or later

* Committed to provide US$175 million debtor-in-possession credit facility to finance target canada’s operations during ccaa proceedings

* Expects decision will increase its earnings in fiscal 2015 and beyond, and increase its cash flow in fiscal 2016 and beyond

* Expects to report q4 adjusted eps of $1.43 to $1.47, about 6 cents ahead of expectations for u.s. Segment performance at beginning of quarter

* Q4 GAAP results expected to include losses related to liquidation of Target Canada, net of taxes, net expenses related to 2013 data breach

* Has sufficient resources to fund these expected costs, including cash on hand and ongoing cash generation by its u.s. Business

* Now expects to report Q4 2014 U.S. Comparable sales of about 3 percent versus prior guidance of about 2 percent

* Says not able to provide an estimate of its expected fourth quarter 2014 GAAP EPS

* Says as a result of the decision, Target Corporation will operate as a single segment that includes all U.S. Operations

* Impact of reduction of beneficial interest asset recognized for 2013 sale of credit card portfolio to reduce Q4 GAAP EPS by about 2 cents

* Will host a call with investors today, approximately two hours after the conclusion of the court hearing of the CCAA application Source text for Eikon: Further company coverage:

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