|
12. 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 |
|
Three Months Ended October 27, 2012 |
|
Three Months Ended October 29, 2011 |
|
|
|
|
|
|
U.S. |
|
|
|
|
|
|
|
U.S. |
|
|
|
|
|
|
|
|
U.S. |
|
Credit |
|
|
|
|
|
U.S. |
|
Credit |
|
|
|
|
|
|
(millions) |
|
Retail |
|
Card |
|
Canadian |
|
Total |
|
Retail |
|
Card |
|
Canadian |
|
Total |
|
|
Sales/Credit card revenues |
|
$ |
16,601 |
|
$ |
328 |
|
$ |
— |
|
$ |
16,929 |
|
$ |
16,054 |
|
$ |
348 |
|
$ |
— |
|
$ |
16,402 |
|
|
Cost of sales |
|
11,569 |
|
— |
|
— |
|
11,569 |
|
11,165 |
|
— |
|
— |
|
11,165 |
|
|
Bad debt expense(a) |
|
— |
|
46 |
|
— |
|
46 |
|
— |
|
40 |
|
— |
|
40 |
|
|
Selling, general and administrative/ Operations and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenses(a), (b) |
|
3,553 |
|
138 |
|
72 |
|
3,764 |
|
3,433 |
|
143 |
|
18 |
|
3,594 |
|
|
Depreciation and amortization |
|
516 |
|
3 |
|
24 |
|
542 |
|
525 |
|
4 |
|
17 |
|
546 |
|
|
Segment EBIT (c) |
|
963 |
|
141 |
|
(96 |
) |
1,008 |
|
931 |
|
161 |
|
(35 |
) |
1,057 |
|
|
Interest expense on nonrecourse debt collateralized by credit card receivables (d) |
|
— |
|
3 |
|
— |
|
3 |
|
— |
|
18 |
|
— |
|
18 |
|
|
Segment profit/(loss) |
|
$ |
963 |
|
$ |
138 |
|
$ |
(96 |
) |
$ |
1,005 |
|
$ |
931 |
|
$ |
143 |
|
$ |
(35 |
) |
$ |
1,039 |
|
|
Unallocated (income) and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other net interest expense (d) |
|
|
|
|
|
|
|
189 |
|
|
|
|
|
|
|
182 |
|
|
Gain on receivables held for sale (e) |
|
|
|
|
|
|
|
(156 |
) |
|
|
|
|
|
|
|
— |
|
|
Earnings before income taxes |
|
|
|
|
|
|
|
$ |
972 |
|
|
|
|
|
|
|
$ |
857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Segment Results |
|
Nine Months Ended October 27, 2012 |
|
Nine Months Ended October 29, 2011 |
|
|
|
|
|
|
U.S. |
|
|
|
|
|
|
|
U.S. |
|
|
|
|
|
|
|
|
U.S. |
|
Credit |
|
|
|
|
|
U.S. |
|
Credit |
|
|
|
|
|
|
(millions) |
|
Retail |
|
Card |
|
Canadian |
|
Total |
|
Retail |
|
Card |
|
Canadian |
|
Total |
|
|
Sales/Credit card revenues |
|
$ |
49,589 |
|
$ |
986 |
|
$ |
— |
|
$ |
50,575 |
|
$ |
47,529 |
|
$ |
1,048 |
|
$ |
— |
|
$ |
48,577 |
|
|
Cost of sales |
|
34,406 |
|
— |
|
— |
|
34,406 |
|
32,874 |
|
— |
|
— |
|
32,874 |
|
|
Bad debt expense(a) |
|
— |
|
141 |
|
— |
|
141 |
|
— |
|
67 |
|
— |
|
67 |
|
|
Selling, general and administrative/ Operations and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenses(a), (b) |
|
10,315 |
|
409 |
|
154 |
|
10,878 |
|
9,988 |
|
405 |
|
53 |
|
10,446 |
|
|
Depreciation and amortization |
|
1,526 |
|
11 |
|
67 |
|
1,603 |
|
1,527 |
|
13 |
|
28 |
|
1,568 |
|
|
Segment EBIT (c) |
|
3,342 |
|
425 |
|
(221 |
) |
3,547 |
|
3,140 |
|
563 |
|
(81 |
) |
3,622 |
|
|
Interest expense on nonrecourse debt collateralized by credit card receivables (d) |
|
— |
|
8 |
|
— |
|
8 |
|
— |
|
55 |
|
— |
|
55 |
|
|
Segment profit/(loss) |
|
$ |
3,342 |
|
$ |
417 |
|
$ |
(221 |
) |
$ |
3,539 |
|
$ |
3,140 |
|
$ |
508 |
|
$ |
(81 |
) |
$ |
3,567 |
|
|
Unallocated (income) and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other net interest expense (d) |
|
|
|
|
|
|
|
550 |
|
|
|
|
|
|
|
519 |
|
|
Gain on receivables held for sale (e) |
|
|
|
|
|
|
|
(156 |
) |
|
|
|
|
|
|
|
— |
|
|
Earnings before income taxes |
|
|
|
|
|
|
|
$ |
3,145 |
|
|
|
|
|
|
|
$ |
3,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The sum of the segment amounts may not equal the total amounts due to rounding.
(a) 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.
(b) Loyalty program charges were $78 million and $74 million for the three months ended October 27, 2012 and October 29, 2011, respectively, and $217 million and $189 million for the nine months ended October 27, 2012 and October 29, 2011, 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.
(c) The combination of Segment EBIT and the gain on receivables held for sale represents earnings before interest expense and income taxes on the Consolidated Statements of Operations.
(d) The combination of interest expense on nonrecourse debt collateralized by credit card receivables and other net interest expense represent net interest expense on the Consolidated Statements of Operations.
(e) Refer to Note 3 for more information on our credit card receivables transaction.
|
Total Assets by Segment |
|
October 27, |
|
January 28, |
|
October 29, |
|
|
(millions) |
|
2012 |
|
2012 |
|
2011 |
|
|
U.S. Retail |
|
$ |
39,717 |
|
$ |
37,108 |
|
$ |
39,142 |
|
|
U.S. Credit Card |
|
5,736 |
|
6,135 |
|
5,978 |
|
|
Canadian |
|
3,970 |
|
3,387 |
|
3,327 |
|
|
Total segment assets |
|
49,423 |
|
46,630 |
|
48,447 |
|
|
Unallocated assets (a) |
|
156 |
|
— |
|
— |
|
|
Total assets |
|
$ |
49,579 |
|
$ |
46,630 |
|
$ |
48,447 |
|
(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. |