v2.4.0.6
Segment Reporting
 3 Months Ended
May 04, 2013
Segment Reporting  
Segment Reporting

9. Segment Reporting

 

Through fiscal 2012, we operated as three business segments: U.S. Retail, U.S. Credit Card and Canadian. Following the sale of our credit card receivables portfolio described in Note 2, we operate as two segments: U.S. and Canadian. 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 May 4, 2013

 

Three Months Ended April 28, 2012

(millions)

 

U.S.

 

Canadian

 

Total

 

U.S.

 

Canadian

 

Total

 

Sales

 

$

16,620

 

$

86

 

$

16,706

 

$

16,537

 

$

—

 

$

16,537

 

Cost of sales

 

11,509

 

53

 

11,563

 

11,541

 

—

 

11,541

 

Selling, general and administrative expenses(a)

 

3,381

 

193

 

3,573

 

3,148

 

34

 

3,182

 

Depreciation and amortization

 

491

 

45

 

536

 

508

 

21

 

529

 

Segment profit

 

$

1,239

 

$

(205

)

$

1,034

 

$

1,340

 

$

(55

)

$

1,285

 

Gain on receivables transaction

 

 

 

 

 

391

 

 

 

 

 

—

 

Reduction of beneficial interest asset(a)

 

 

 

 

 

(17

)

 

 

 

 

—

 

Earnings before interest expense and income taxes

 

 

 

 

 

1,408

 

 

 

 

 

1,285

 

Net interest expense

 

 

 

 

 

629

 

 

 

 

 

184

 

Earnings before income taxes

 

 

 

 

 

$

779

 

 

 

 

 

$

1,101

 

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

Note: Prior period segment results have been revised to reflect the combination of our historical U.S. Retail Segment and U.S. Credit Card Segment into one U.S. Segment.

(a) For the three months ended May 4, 2013, the U.S. Segment recognizes within SG&A all amounts related to the profit-sharing arrangement with TD and related servicing expenses. For purposes of consolidated results, a portion of the profit-sharing is recognized as a reduction to the beneficial interest asset. As a result, SG&A expenses for the U.S. and Canadian Segments of $3,573 million plus the reduction of the beneficial interest asset of $17 million equals consolidated SG&A expenses. For the three months ended April 28, 2012, the combination of SG&A expenses and credit card expenses, less credit card revenues, in our Consolidated Statements of Operations equals total SG&A as reported in our business segment results, as revised.

 

Total Assets by Segment

(millions)

 

May 4,
2013

 

February 2,
2013

 

April 28,
2012

 

U.S.

 

$

38,591

 

$

43,289

 

$

42,597

 

Canadian

 

5,435

 

4,722

 

3,578

 

Total segment assets

 

44,026

 

48,011

 

46,175

 

Unallocated assets (a)

 

208

 

152

 

—

 

Total assets

 

$

44,234

 

$

48,163

 

$

46,175

 

Note: Prior period segment results have been revised to reflect the combination of our historical U.S. Retail Segment and U.S. Credit Card Segment into one U.S. Segment.

(a)  Represents the beneficial interest asset for the period ended May 4, 2013. For the period ended February 2, 2013, 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.