v2.4.0.6
Segment Reporting
 12 Months Ended
Feb. 02, 2013
Segment Reporting  
Segment Reporting

29. Segment Reporting

Our segment measure of profit is used by management to evaluate the return on our investment and to make operating decisions.

   
Business Segment Results
   2012(a)   2011   2010  
(millions)
   U.S.
Retail
   U.S.
Credit
Card
   Canadian
   Total
   U.S.
Retail
   U.S.
Credit
Card
   Canadian
   Total
   U.S.
Retail
   U.S.
Credit
Card
   Canadian
   Total
  
   

Sales/Credit card revenues

   $ 71,960   $ 1,341   $ —   $ 73,301   $ 68,466   $ 1,399   $ —   $ 69,865   $ 65,786   $ 1,604   $ —   $ 67,390  

Cost of sales

     50,568     —     —     50,568     47,860     —     —     47,860     45,725     —     —     45,725  

Bad debt expense (b)

     —     196     —     196     —     154     —     154     —     528     —     528  

Selling, general and administrative/Operations and marketing expenses (b)(c)

     14,342     562     272     15,176     13,774     550     74     14,398     13,367     433     —     13,801  

Depreciation and amortization

     2,031     13     97     2,142     2,067     17     48     2,131     2,065     19     —     2,084  
   

Segment EBIT (d)

     5,019     570     (369 )   5,219     4,765     678     (122 )   5,322     4,629     624     —     5,252  

Interest expense on nonrecourse debt collateralized by credit card receivables (e)

     —     13     —     13     —     72     —     72     —     83     —     83  
   

Segment profit/(loss)

   $ 5,019   $ 557   $ (369 ) $ 5,206   $ 4,765   $ 606   $ (122 ) $ 5,250   $ 4,629   $ 541   $ —   $ 5,169  

Unallocated (income) and expenses:

                                                                          

Other net interest expense (e)

                       749                       794                       674  

Adjustment related to receivables held for sale (f)

                       (152 )                     —                       —  
   

Earnings before income taxes

                     $ 4,609                     $ 4,456                     $ 4,495  
   

Note: The sum of the segment amounts may not equal the total amounts due to rounding.

(a)
Consisted of 53 weeks.
(b)
The combination of bad debt expense and operations and marketing expenses, less amounts the U.S. Retail Segment charges the U.S. Credit Card Segment for loyalty programs, within the U.S. Credit Card Segment represent credit card expenses on the Consolidated Statements of Operations. For the fourth quarter of 2012, bad debt expense was replaced by net write-offs in this calculation.
(c)
Effective with the October 2010 nationwide launch of our new 5% REDcard Rewards loyalty program, we changed the formula under which the U.S. Retail Segment charges the U.S. Credit Card Segment to better align with the attributes of the new program. Loyalty program charges were $300 million, $258 million and $102 million in 2012, 2011 and 2010, respectively. In all periods these amounts were recorded as reductions to SG&A expenses within the U.S. Retail Segment and increases to operations and marketing expenses within the U.S. Credit Card Segment.
(d)
The combination of Segment EBIT and the adjustment related to receivables held for sale represents earnings before interest expense and income taxes on the Consolidated Statements of Operations.
(e)
The combination of interest expense on nonrecourse debt collateralized by credit card receivables and other net interest expense represents net interest expense on the Consolidated Statements of Operations.
(f)
Represents the gain on receivables held for sale recorded in our Consolidated Statements of Operations, plus the difference between U.S. Credit Card Segment bad debt expense and net write-offs for the fourth quarter of 2012.

   
Total Assets by Segment
(millions)
   February 2,
2013
   January 28,
2012
  
   

U.S. Retail

   $ 37,404   $ 37,108  

U.S. Credit Card

     5,885     6,135  

Canadian

     4,722     3,387  
   

Total segment assets

   $ 48,011   $ 46,630  

Unallocated assets (a)

     152     —  
   

Total assets

   $ 48,163   $ 46,630  
   
(a)
Represents the net adjustment to eliminate our allowance for doubtful accounts and record our credit card receivables at lower of cost (par) or fair value.


   
Capital Expenditures by Segment
(millions)
   2012(a)
   2011
   2010
  
   

U.S. Retail

   $ 2,335   $ 2,466   $ 2,121  

U.S. Credit Card

     10     10     8  

Canadian

     932     1,892     —  
   

Total

   $ 3,277   $ 4,368   $ 2,129  
   
(a)
Consisted of 53 weeks.