For over a century, Target Corporation has created value for our guests by offering financial services and products that include proprietary credit cards, the Target Visa card and an array of unique store-branded gift cards. These cards strengthen the relationships we enjoy with our retail guests, provide them with attractive payment alternatives and savings opportunities and contribute to our overall revenue and earnings growth.

During 2002, we continued to invest in our proprietary credit card and gift card programs at all three of our divisions, reflecting our commitment to make shopping at Target, Mervyn’s and Marshall Field’s more convenient, more exciting and more rewarding. Additionally, Target Financial Services enhanced the shopping experience for millions of our guests — by providing broader utility and financial flexibility, improved loyalty programs, and the promise of smart chip technology — through the continued roll-out of our Target Visa card. By year-end, we had issued nearly nine million Target Visa cards, had reached nearly four billion dollars in Target Visa receivables and had begun piloting the use of electronic coupons to provide additional savings to our Target Visa cardholders. As we further leverage the capabilities of the smart chip, our knowledge of our guests’ shopping preferences and our vendor partnerships, we expect to deliver even greater value to our guests in the future through customized promotional offers.

Going forward, we remain committed to offering financial services and products that are valuable to our guests and contribute meaningfully to our growth in sales and profitability. While we are excited about the opportunities for electronic coupons and other potential smart chip applications, we continue to manage our credit card operations with the discipline and conservatism that have been our hallmarks for decades. We believe that our experience in financial services and our proven track record of performance position us well to provide substantial benefits to our guests and superior returns to our shareholders in the years ahead.