EX-99.B 3 a08-15791_1ex99db.htm EX-99.B

Exhibit (99)B

 

 

2005 Retail Segment

 

Retail Segment Results

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(millions) (unaudited)

 

Apr 30, 2005

 

Jul 30, 2005

 

 

Jul 30, 2005

 

Oct 29, 2005

 

 

Oct 29, 2005

 

Jan 28, 2006

 

 

Jan 28, 2006

 

Sales

 

$

11,171

 

$

11,667

 

 

$

22,838

 

$

11,863

 

 

$

34,701

 

$

16,570

 

 

$

 51,271

 

Cost of sales

 

7,755

 

8,038

 

 

15,793

 

8,250

 

 

24,043

 

11,745

 

 

35,788

 

Gross margin

 

3,416

 

3,629

 

 

7,045

 

3,613

 

 

10,658

 

4,825

 

 

15,483

 

SG&A expenses (a)

 

2,277

 

2,416

 

 

4,693

 

2,548

 

 

7,241

 

2,985

 

 

10,228

 

EBITDA

 

1,139

 

1,213

 

 

2,352

 

1,065

 

 

3,417

 

1,840

 

 

5,255

 

Depreciation and amortization

 

337

 

343

 

 

680

 

351

 

 

1,031

 

366

 

 

1,396

 

EBIT

 

$

802

 

$

870

 

 

$

1,672

 

$

714

 

 

$

2,386

 

$

1,474

 

 

$

 3,859

 

EBITDA is earnings before interest expense, income taxes, depreciation and amortization.

 

EBIT is earnings before interest expense and income taxes.

 

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $19 million in the first quarter, $24 million in the second quarter, $22 million in the third quarter and $33 million in the fourth quarter are recorded as a reduction to SG&A expenses within the Retail Segment.

 

Retail Segment Rate Analysis

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(unaudited)

 

Apr 30, 2005

 

Jul 30, 2005

 

 

Jul 30, 2005

 

Oct 29, 2005

 

 

Oct 29, 2005

 

Jan 28, 2006

 

 

Jan 28, 2006

 

Gross margin rate

 

30.6%

 

31.1%

 

 

30.8%

 

30.5%

 

 

30.7%

 

29.1%

 

 

30.2%

 

SG&A expense rate

 

20.4%

 

20.7%

 

 

20.6%

 

21.5%

 

 

20.9%

 

18.0%

 

 

19.9%

 

EBITDA margin rate

 

10.2%

 

10.4%

 

 

10.3%

 

9.0%

 

 

9.8%

 

11.1%

 

 

10.3%

 

Depreciation and amortization expense rate

 

3.0%

 

2.9%

 

 

3.0%

 

3.0%

 

 

3.0%

 

2.2%

 

 

2.7%

 

EBIT margin rate

 

7.2%

 

7.4%

 

 

7.3%

 

6.0%

 

 

6.9%

 

8.9%

 

 

7.5%

 

 


 

 

2006 Retail Segment

 

(53 week fiscal year)

 

Retail Segment Results

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(millions) (unaudited)

 

Apr 29, 2006

 

Jul 29, 2006

 

 

Jul 29, 2006

 

Oct 28, 2006

 

 

Oct 28, 2006

 

Feb 3, 2007

 

 

Feb 3, 2007

 

Sales

 

$

12,493

 

$

12,959

 

 

$

25,453

 

$

13,156

 

 

$

38,609

 

$

19,269

 

 

$

 57,878

 

Cost of sales

 

8,694

 

8,920

 

 

17,614

 

9,133

 

 

26,747

 

13,619

 

 

40,366

 

Gross margin

 

3,799

 

4,039

 

 

7,839

 

4,023

 

 

11,862

 

5,650

 

 

17,512

 

SG&A expenses (a)

 

2,633

 

2,728

 

 

5,361

 

2,887

 

 

8,247

 

3,497

 

 

11,745

 

EBITDA

 

1,166

 

1,311

 

 

2,478

 

1,136

 

 

3,615

 

2,153

 

 

5,767

 

Depreciation and amortization

 

330

 

367

 

 

697

 

385

 

 

1,083

 

398

 

 

1,481

 

EBIT

 

$

836

 

$

944

 

 

$

1,781

 

$

751

 

 

$

2,532

 

$

1,755

 

 

$

 4,286

 

EBITDA is earnings before interest expense, income taxes, depreciation and amortization.

 

EBIT is earnings before interest expense and income taxes.

 

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $25 million in the first quarter, $25 million in the second quarter, $22 million in the third quarter and $37 million in the fourth quarter are recorded as a reduction to SG&A expenses within the Retail Segment.

 

Retail Segment Rate Analysis

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(unaudited)

 

Apr 29, 2006

 

Jul 29, 2006

 

 

Jul 29, 2006

 

Oct 28, 2006

 

 

Oct 28, 2006

 

Feb 3, 2007

 

 

Feb 3, 2007

 

Gross margin rate

 

30.4%

 

31.2%

 

 

30.8%

 

30.6%

 

 

30.7%

 

29.3%

 

 

30.3%

 

SG&A expense rate

 

21.1%

 

21.0%

 

 

21.1%

 

21.9%

 

 

21.4%

 

18.1%

 

 

20.3%

 

EBITDA margin rate

 

9.3%

 

10.1%

 

 

9.7%

 

8.6%

 

 

9.4%

 

11.2%

 

 

10.0%

 

Depreciation and amortization expense rate

 

2.6%

 

2.8%

 

 

2.7%

 

2.9%

 

 

2.8%

 

2.1%

 

 

2.6%

 

EBIT margin rate

 

6.7%

 

7.3%

 

 

7.0%

 

5.7%

 

 

6.6%

 

9.1%

 

 

7.4%

 

 


 

 

2007 Retail Segment

 

 

Retail Segment Results

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(millions) (unaudited)

 

May 5, 2007

 

Aug 4, 2007

 

 

Aug 4, 2007

 

Nov 3, 2007

 

 

Nov 3, 2007

 

Feb 2, 2008

 

 

Feb 2, 2008

 

Sales

 

$

13,623

 

$

14,167

 

 

$

27,790

 

$

14,342

 

 

$

42,132

 

$

19,340

 

 

$

61,471

 

Cost of sales

 

9,416

 

9,696

 

 

19,112

 

10,035

 

 

29,147

 

13,782

 

 

42,929

 

Gross margin

 

4,207

 

4,471

 

 

8,678

 

4,307

 

 

12,985

 

5,558

 

 

18,542

 

SG&A expenses (a)

 

2,839

 

3,046

 

 

5,885

 

3,167

 

 

9,052

 

3,505

 

 

12,557

 

EBITDA

 

1,368

 

1,425

 

 

2,793

 

1,140

 

 

3,933

 

2,053

 

 

5,985

 

Depreciation and amortization

 

388

 

401

 

 

788

 

425

 

 

1,213

 

431

 

 

1,643

 

EBIT

 

$

980

 

$

1,024

 

 

$

2,005

 

$

715

 

 

$

2,720

 

$

1,622

 

 

$

4,342

 

 

EBITDA is earnings before interest expense, income taxes, depreciation and amortization.

 

EBIT is earnings before interest expense and income taxes.

 

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $24 million in the first quarter, $25 million in the second quarter, $24 million in the third quarter and $41 million in the fourth quarter are recorded as a reduction to SG&A expenses within the Retail Segment.

 

Retail Segment Rate Analysis

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(unaudited)

 

May 5, 2007

 

Aug 4, 2007

 

 

Aug 4, 2007

 

Nov 3, 2007

 

 

Nov 3, 2007

 

Feb 2, 2008

 

 

Feb 2, 2008

 

Gross margin rate

 

30.9%

 

31.6%

 

 

31.2%

 

30.0%

 

 

30.8%

 

28.7%

 

 

30.2%

 

SG&A expense rate

 

20.8%

 

21.5%

 

 

21.2%

 

22.1%

 

 

21.5%

 

18.1%

 

 

20.4%

 

EBITDA margin rate

 

10.0%

 

10.1%

 

 

10.0%

 

7.9%

 

 

9.3%

 

10.6%

 

 

9.7%

 

Depreciation and amortization expense rate

 

2.8%

 

2.8%

 

 

2.8%

 

3.0%

 

 

2.9%

 

2.2%

 

 

2.7%

 

EBIT margin rate

 

7.2%

 

7.2%

 

 

7.2%

 

5.0%

 

 

6.5%

 

8.4%

 

 

7.1%

 

 


 

2005 Credit Card Segment

 

 

Credit Card Segment Results

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(millions) (unaudited)

 

Apr 30, 2005

 

Jul 30, 2005

 

 

Jul 30, 2005

 

Oct 29, 2005

 

 

Oct 29, 2005

 

Jan 28, 2006

 

 

Jan 28, 2006

 

Finance charge revenue

 

$

205

 

$

219

 

 

$

424

 

$

232

 

 

$

656

 

$

259

 

 

$

915

 

Late fees and other revenue

 

74

 

74

 

 

148

 

79

 

 

227

 

83

 

 

310

 

Third party merchant fees

 

27

 

30

 

 

57

 

32

 

 

89

 

35

 

 

124

 

Total revenues

 

306

 

323

 

 

629

 

343

 

 

972

 

377

 

 

1,349

 

Bad debt expense

 

106

 

111

 

 

217

 

120

 

 

337

 

129

 

 

466

 

Operations and marketing expenses (a)

 

92

 

100

 

 

192

 

103

 

 

295

 

113

 

 

406

 

Depreciation and amortization

 

3

 

3

 

 

6

 

3

 

 

9

 

3

 

 

13

 

Total expenses

 

201

 

214

 

 

415

 

226

 

 

641

 

245

 

 

885

 

EBIT

 

105

 

109

 

 

214

 

117

 

 

331

 

132

 

 

464

 

Interest expense on nonrecourse debt collateralized by credit card receivables

 

6

 

6

 

 

12

 

7

 

 

19

 

17

 

 

37

 

Segment profitability

 

$

99

 

$

103

 

 

$

202

 

$

110

 

 

$

312

 

$

115

 

 

$

427

 

Average receivables funded by Target (b)

 

$

4,572

 

$

4,578

 

 

$

4,586

 

$

4,749

 

 

$

4,642

 

$

4,371

 

 

$

4,594

 

Segment pretax ROIC (c)

 

8.6%

 

9.0%

 

 

8.8%

 

9.3%

 

 

9.0%

 

10.5%

 

 

9.3%

 

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $19 million in the first quarter, $24 million in the second quarter, $22 million in the third quarter and $33 million in the fourth quarter are recorded as an increase to Operations and Marketing expenses within the Credit Card Segment.

 

(b) Amounts represent the portion of average credit card receivables funded by Target. These amounts exclude $750 million, $750 million, $750 million, $750 million, $750 million $1,551 million and $950 million, respectively, of receivables funded by nonrecourse debt collateralized by credit card receivables.

 

(c) ROIC is return on invested capital, and this rate represents segment profitability divided by average receivables funded by Target, expressed as an annualized rate.

 


 

2006 Credit Card Segment

 

(53 week fiscal year)

 

Credit Card Segment Results

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(millions) (unaudited)

 

Apr 29, 2006

 

Jul 29, 2006

 

 

Jul 29, 2006

 

Oct 28, 2006

 

 

Oct 28, 2006

 

Feb 3, 2007

 

 

Feb 3, 2007

 

Finance charge revenue

 

$

259

 

$

273

 

 

$

532

 

$

279

 

 

$

812

 

$

305

 

 

$

1,117

 

Late fees and other revenue

 

80

 

80

 

 

160

 

101

 

 

261

 

95

 

 

356

 

Third party merchant fees

 

31

 

35

 

 

65

 

34

 

 

98

 

41

 

 

139

 

Total revenues

 

370

 

388

 

 

757

 

414

 

 

1,171

 

441

 

 

1,612

 

Bad debt expense

 

88

 

93

 

 

181

 

97

 

 

278

 

102

 

 

380

 

Operations and marketing expenses (a)

 

97

 

102

 

 

198

 

107

 

 

306

 

130

 

 

434

 

Depreciation and amortization

 

4

 

3

 

 

7

 

4

 

 

11

 

4

 

 

15

 

Total expenses

 

189

 

198

 

 

386

 

208

 

 

595

 

236

 

 

829

 

EBIT

 

181

 

190

 

 

371

 

206

 

 

576

 

205

 

 

783

 

Interest expense on nonrecourse debt collateralized by credit card receivables

 

20

 

22

 

 

42

 

27

 

 

69

 

29

 

 

98

 

Segment profitability

 

$

161

 

$

168

 

 

$

329

 

$

179

 

 

$

507

 

$

176

 

 

$

685

 

Average receivables funded by Target (b)

 

$

4,280

 

$

4,286

 

 

$

4,295

 

$

4,231

 

 

$

4,276

 

$

4,618

 

 

$

4,379

 

Segment pretax ROIC (c)

 

15.1%

 

15.6%

 

 

15.3%

 

17.0%

 

 

15.8%

 

14.2%

 

 

15.3%

 

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $25 million in the first quarter, $25 million in the second quarter, $22 million in the third quarter and $37 million in the fourth quarter are recorded as an increase to Operations and Marketing expenses within the Credit Card Segment.

 

(b) Amounts represent the portion of average credit card receivables funded by Target. These amounts exclude $1,650 million, $1,650 million, $1,650 million, $1,892 million, $1,731 million $1,926 million and $1,782 million, respectively, of receivables funded by nonrecourse debt collateralized by credit card receivables.

 

(c) ROIC is return on invested capital, and this rate represents segment profitability divided by average receivables funded by Target, expressed as an annualized rate.

 


 

 

2007 Credit Card Segment

 

 

Credit Card Segment Results

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months Ended

 

 

Twelve Months
Ended

 

(millions) (unaudited)

 

May 5, 2007

 

Aug 4, 2007

 

 

Aug 4, 2007

 

Nov 3, 2007

 

 

Nov 3, 2007

 

Feb 2, 2008

 

 

Feb 2, 2008

 

Finance charge revenue

 

$

296

 

$

305

 

 

$

601

 

$

334

 

 

$

935

 

$

373

 

 

$

1,308

 

Late fees and other revenue

 

88

 

109

 

 

197

 

113

 

 

311

 

112

 

 

422

 

Third party merchant fees

 

34

 

39

 

 

73

 

46

 

 

118

 

47

 

 

166

 

Total revenues

 

418

 

453

 

 

871

 

493

 

 

1,364

 

532

 

 

1,896

 

Bad debt expense

 

86

 

95

 

 

182

 

130

 

 

311

 

170

 

 

481

 

Operations and marketing expenses (a)

 

108

 

112

 

 

218

 

116

 

 

335

 

134

 

 

469

 

Depreciation and amortization

 

4

 

3

 

 

8

 

4

 

 

12

 

4

 

 

16

 

Total expenses

 

198

 

210

 

 

408

 

250

 

 

658

 

308

 

 

966

 

EBIT

 

220

 

243

 

 

463

 

243

 

 

706

 

224

 

 

930

 

Interest expense on nonrecourse debt collateralized by credit card receivables

 

26

 

30

 

 

57

 

41

 

 

98

 

35

 

 

133

 

Segment profitability

 

$

194

 

$

213

 

 

$

406

 

$

202

 

 

$

608

 

$

189

 

 

$

797

 

Average receivables funded by Target (b)

 

$

4,723

 

$

4,534

 

 

$

4,648

 

$

4,479

 

 

$

4,612

 

$

5,627

 

 

$

4,888

 

Segment pretax ROIC (c)

 

16.4%

 

18.8%

 

 

17.5%

 

18.0%

 

 

17.6%

 

13.4%

 

 

16.3%

 

(a) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these discounts to our Credit Card Segment, and the reimbursements of $24 million in the first quarter, $25 million in the second quarter, $24 million in the third quarter and $41 million in the fourth quarter are recorded as an increase to Operations and Marketing expenses within the Credit Card Segment.

 

(b) Amounts represent the portion of average credit card receivables funded by Target. These amounts exclude $1,859 million, $2,184 million, $2,022 million, $2,845 million, $2,296 million $2,658 million and $2,387 million, respectively, of receivables funded by nonrecourse debt collateralized by credit card receivables.

 

(c) ROIC is return on invested capital, and this rate represents segment profitability divided by average receivables funded by Target, expressed as an annualized rate.

 


 

 

2005 Credit Card Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spread Analysis - Total Portfolio

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

Apr 30, 2005

 

Jul 30, 2005

 

 

Jul 30, 2005

 

 

Oct 29, 2005

 

 

Oct 29, 2005

 

 

Jan 28, 2006

 

 

Jan 28, 2006

 

 

 

Yield

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

 

Amount

 

Annualized

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

(unaudited)

 

(in millions)

 

Rate

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

EBIT

 

$

105

 

 

7.8%

 (b)

$

109

 

 

8.2%

 (b)

 

$

214

 

 

8.0%

 (b)

 

$

117

 

 

8.5%

 (b)

 

$

331

 

 

8.2%

 (b)

 

$

132

 

 

8.9%

 (b)

 

$

464

 

 

8.4%

 (b)

LIBOR (a)

 

 

 

2.8%

 

 

 

3.3%

 

 

 

 

3.0%

 

 

 

 

3.8%

 

 

 

 

3.3%

 

 

 

 

4.3%

 

 

 

 

3.5%

 

Spread to LIBOR (c)

 

$

67

 

5.0%

 (b)

$

66

 

4.9%

 (b)

 

$

133

 

5.0%

 (b)

 

$

65

 

4.7%

 (b)

 

$

198

 

4.9%

 (b)

 

$

68

 

4.6%

 (b)

 

$

267

 

4.9%

 (b)

(a) Average one-month LIBOR rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) As a percentage of average receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c) Spread to LIBOR is a metric used to analyze the performance of our total credit card portfolio because the vast majority of our portfolio earns finance charge revenue at rates tied to the Prime Rate, and the interest rate on all nonrecourse debt securitized by credit card receivables is tied to LIBOR.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables Rollforward Analysis

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

(millions) (unaudited)

 

Apr 30, 2005

 

Jul 30, 2005

 

 

Jul 30, 2005

 

 

Oct 29, 2005

 

 

Oct 29, 2005

 

 

Jan 28, 2006

 

 

Jan 28, 2006

 

Beginning receivables

 

 

 

$

5,456

 

 

 

$

5,251

 

 

 

 

 

$

5,456

 

 

 

 

$

5,421

 

 

 

 

$

5,456

 

 

 

 

$

5,544

 

 

 

 

$

5,456

 

Charges at Target

 

 

 

829

 

 

 

926

 

 

 

 

 

1,755

 

 

 

 

928

 

 

 

 

2,683

 

 

 

 

1,316

 

 

 

 

3,999

 

Charges at third parties

 

 

 

1,541

 

 

 

1,701

 

 

 

 

 

3,242

 

 

 

 

1,765

 

 

 

 

5,007

 

 

 

 

2,009

 

 

 

 

7,016

 

Payments

 

 

 

(2,763

)

 

 

(2,672

)

 

 

 

 

(5,435

)

 

 

 

(2,790

)

 

 

 

(8,225

)

 

 

 

(3,019

)

 

 

 

(11,243

)

Other

 

 

 

188

 

 

 

215

 

 

 

 

 

403

 

 

 

 

220

 

 

 

 

623

 

 

 

 

267

 

 

 

 

889

 

Period-end receivables

 

 

 

$

5,251

 

 

 

$

5,421

 

 

 

 

 

$

5,421

 

 

 

 

$

5,544

 

 

 

 

$

5,544

 

 

 

 

$

6,117

 

 

 

 

$

6,117

 

Average receivables

 

 

 

$

5,322

 

 

 

$

5,328

 

 

 

 

 

$

5,336

 

 

 

 

$

5,499

 

 

 

 

$

5,392

 

 

 

 

$

5,922

 

 

 

 

$

5,544

 

Accounts with three or more payments (60+ days)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  past due as a percentage of period-end receivables

 

 

 

3.0%

 

 

 

3.0%

 

 

 

 

 

3.0%

 

 

 

 

3.2%

 

 

 

 

3.2%

 

 

 

 

2.8%

 

 

 

 

2.8%

 

Accounts with four or more payments (90+ days)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  past due as a percentage of period-end receivables

 

 

 

2.2%

 

 

 

2.0%

 

 

 

 

 

2.0%

 

 

 

 

2.2%

 

 

 

 

2.2%

 

 

 

 

1.9%

 

 

 

 

1.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Doubtful Accounts

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

(millions) (unaudited)

 

Apr 30, 2005

 

Jul 30, 2005

 

 

Jul 30, 2005

 

 

Oct 29, 2005

 

 

Oct 29, 2005

 

 

Jan 28, 2006

 

 

Jan 28, 2006

 

Allowance at beginning of period

 

 

 

$

387

 

 

 

$

394

 

 

 

 

 

$

387

 

 

 

 

$

409

 

 

 

 

$

387

 

 

 

 

$

417

 

 

 

 

$

387

 

Bad debt provision

 

 

 

106

 

 

 

111

 

 

 

 

 

217

 

 

 

 

120

 

 

 

 

337

 

 

 

 

129

 

 

 

 

466

 

Net write-offs

 

 

 

(99

)

 

 

(96

)

 

 

 

 

(195

)

 

 

 

(112

)

 

 

 

(307

)

 

 

 

(95

)

 

 

 

(402

)

Allowance at end of period

 

 

 

$

394

 

 

 

$

409

 

 

 

 

 

$

409

 

 

 

 

$

417

 

 

 

 

$

417

 

 

 

 

$

451

 

 

 

 

$

451

 

As a percentage of period-end receivables

 

 

 

7.5%

 

 

 

7.5%

 

 

 

 

 

7.5%

 

 

 

 

7.5%

 

 

 

 

7.5%

 

 

 

 

7.4%

 

 

 

 

7.4%

 

Net write-offs as a percentage of average receivables
(annualized)

 

 

 

7.4%

 

 

 

7.2%

 

 

 

 

 

7.3%

 

 

 

 

8.1%

 

 

 

 

7.6%

 

 

 

 

6.5%

 

 

 

 

7.2%

 

 

 


 

 

2006 Credit Card Metrics

(53 week fiscal year)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spread Analysis - Total Portfolio

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

Apr 29, 2006

 

Jul 29, 2006

 

 

Jul 29, 2006

 

 

Oct 28, 2006

 

 

Oct 28, 2006

 

 

Feb 3, 2007

 

 

Feb 3, 2007

 

 

 

Yield

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

 

Amount

 

Annualized

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

(unaudited)

 

(in millions)

 

Rate

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

EBIT

 

$

181

 

 

12.2%

 (b)

$

190

 

 

12.8%

 (b)

 

$

371

 

 

12.5%

 (b)

 

$

206

 

 

13.5%

 (b)

 

$

576

 

 

12.8%

 (b)

 

$

205

 

 

11.7%

 (b)

 

$

783

 

 

12.5%

 (b)

LIBOR (a)

 

 

 

4.7%

 

 

 

5.2%

 

 

 

 

5.0%

 

 

 

 

5.3%

 

 

 

 

5.1%

 

 

 

 

5.3%

 

 

 

 

5.2%

 

Spread to LIBOR (c)

 

$

111

 

7.5%

 (b)

$

112

 

7.6%

 (b)

 

$

222

 

7.5%

 (b)

 

$

124

 

8.2%

 (b)

 

$

347

 

7.7%

 (b)

 

$

104

 

6.4%

 (b)

 

$

450

 

7.3%

 (b)

(a) Average one-month LIBOR rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) As a percentage of average receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c) Spread to LIBOR is a metric used to analyze the performance of our total credit card portfolio because the vast majority of our portfolio earns finance charge revenue at rates tied to the Prime Rate, and the interest rate on all nonrecourse debt securitized by credit card receivables is tied to LIBOR.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables Rollforward Analysis

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

(millions) (unaudited)

 

Apr 29, 2006

 

Jul 29, 2006

 

 

Jul 29, 2006

 

 

Oct 28, 2006

 

 

Oct 28, 2006

 

 

Feb 3, 2007

 

 

Feb 3, 2007

 

Beginning receivables

 

 

 

$

6,117

 

 

 

$

5,844

 

 

 

 

 

$

6,117

 

 

 

 

$

6,041

 

 

 

 

$

6,117

 

 

 

 

$

6,148

 

 

 

 

$

6,117

 

Charges at Target

 

 

 

917

 

 

 

1,012

 

 

 

 

 

1,929

 

 

 

 

970

 

 

 

 

2,899

 

 

 

 

1,440

 

 

 

 

4,339

 

Charges at third parties

 

 

 

1,718

 

 

 

1,936

 

 

 

 

 

3,654

 

 

 

 

1,860

 

 

 

 

5,514

 

 

 

 

2,317

 

 

 

 

7,831

 

Payments

 

 

 

(3,208

)

 

 

(3,058

)

 

 

 

 

(6,266

)

 

 

 

(3,043

)

 

 

 

(9,309

)

 

 

 

(3,523

)

 

 

 

(12,832

)

Other

 

 

 

300

 

 

 

307

 

 

 

 

 

607

 

 

 

 

320

 

 

 

 

927

 

 

 

 

329

 

 

 

 

1,256

 

Period-end receivables

 

 

 

$

5,844

 

 

 

$

6,041

 

 

 

 

 

$

6,041

 

 

 

 

$

6,148

 

 

 

 

$

6,148

 

 

 

 

$

6,711

 

 

 

 

$

6,711

 

Average receivables

 

 

 

$

5,930

 

 

 

$

5,936

 

 

 

 

 

$

5,945

 

 

 

 

$

6,123

 

 

 

 

$

6,007

 

 

 

 

$

6,544

 

 

 

 

$

6,161

 

Accounts with three or more payments (60+ days)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  past due as a percentage of period-end receivables

 

 

 

3.0%

 

 

 

3.4%

 

 

 

 

 

3.4%

 

 

 

 

3.9%

 

 

 

 

3.9%

 

 

 

 

3.5%

 

 

 

 

3.5%

 

Accounts with four or more payments (90+ days)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  past due as a percentage of period-end receivables

 

 

 

1.9%

 

 

 

2.2%

 

 

 

 

 

2.2%

 

 

 

 

2.5%

 

 

 

 

2.5%

 

 

 

 

2.4%

 

 

 

 

2.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Doubtful Accounts

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

(millions) (unaudited)

 

Apr 29, 2006

 

Jul 29, 2006

 

 

Jul 29, 2006

 

 

Oct 28, 2006

 

 

Oct 28, 2006

 

 

Feb 3, 2007

 

 

Feb 3, 2007

 

Allowance at beginning of period

 

 

 

$

451

 

 

 

$

476

 

 

 

 

 

$

451

 

 

 

 

$

501

 

 

 

 

$

451

 

 

 

 

$

514

 

 

 

 

$

451

 

Bad debt provision

 

 

 

88

 

 

 

93

 

 

 

 

 

181

 

 

 

 

97

 

 

 

 

278

 

 

 

 

102

 

 

 

 

380

 

Net write-offs

 

 

 

(63

)

 

 

(68

)

 

 

 

 

(131

)

 

 

 

(84

)

 

 

 

(215

)

 

 

 

(99

)

 

 

 

(314

)

Allowance at end of period

 

 

 

$

476

 

 

 

$

501

 

 

 

 

 

$

501

 

 

 

 

$

514

 

 

 

 

$

514

 

 

 

 

$

517

 

 

 

 

$

517

 

As a percentage of period-end receivables

 

 

 

8.1%

 

 

 

8.3%

 

 

 

 

 

8.3%

 

 

 

 

8.4%

 

 

 

 

8.4%

 

 

 

 

7.7%

 

 

 

 

7.7%

 

Net write-offs as a percentage of average receivables
(annualized)

 

 

 

4.3%

 

 

 

4.6%

 

 

 

 

 

4.4%

 

 

 

 

5.5%

 

 

 

 

4.8%

 

 

 

 

6.1%

 

 

 

 

5.1%

 

 


 

 

2007 Credit Card Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spread Analysis - Total Portfolio

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

May 5, 2007

 

Aug 4, 2007

 

 

Aug 4, 2007

 

 

Nov 3, 2007

 

 

Nov 3, 2007

 

 

Feb 2, 2008

 

 

Feb 2, 2008

 

 

 

Yield

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

Yield

 

 

 

Amount

 

Annualized

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

 

Amount

 

Annualized

 

(unaudited)

 

(in millions)

 

Rate

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

 

(in millions)

 

Rate

 

EBIT

 

$

220

 

 

13.4%

(b)

$

243

 

 

14.5%

(b)

 

$

463

 

 

13.9%

(b)

 

$

243

 

 

13.3%

(b)

 

$

706

 

 

13.6%

(b)

 

$

224

 

 

10.8%

(b)

 

$

930

 

 

12.8%

(b)

LIBOR (a)

 

 

 

5.3%

 

 

 

5.3%

 

 

 

 

5.3%

 

 

 

 

5.3%

 

 

 

 

5.3%

 

 

 

 

4.5%

 

 

 

 

5.1%

 

Spread to LIBOR (c)

 

$

132

 

8.1%

(b)

$

154

 

9.2%

(b)

 

$

286

 

8.6%

(b)

 

$

146

 

8.0%

(b)

 

$

431

 

8.3%

(b)

 

$

131

 

6.3%

(b)

 

$

558

 

7.7%

(b)

(a) Average one-month LIBOR rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) As a percentage of average receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c) Spread to LIBOR is a metric used to analyze the performance of our total credit card portfolio because the vast majority of our portfolio earns finance charge revenue at rates tied to the Prime Rate, and the interest rate on all nonrecourse debt securitized by credit card receivables is tied to LIBOR.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables Rollforward Analysis

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

(millions) (unaudited)

 

May 5, 2007

 

Aug 4, 2007

 

 

Aug 4, 2007

 

 

Nov 3, 2007

 

 

Nov 3, 2007

 

 

Feb 2, 2008

 

 

Feb 2, 2008

 

Beginning receivables

 

 

 

 

$

6,711

 

 

 

 

$

6,510

 

 

 

 

 

$

6,711

 

 

 

 

 

$

6,906

 

 

 

 

 

$

6,711

 

 

 

 

 

$

7,652

 

 

 

 

 

$

6,711

 

Charges at Target

 

 

 

 

942

 

 

 

 

1,049

 

 

 

 

 

1,991

 

 

 

 

 

1,062

 

 

 

 

 

3,053

 

 

 

 

 

1,437

 

 

 

 

 

4,491

 

Charges at third parties

 

 

 

 

1,889

 

 

 

 

2,202

 

 

 

 

 

4,091

 

 

 

 

 

2,615

 

 

 

 

 

6,706

 

 

 

 

 

2,692

 

 

 

 

 

9,398

 

Payments

 

 

 

 

(3,344

)

 

 

 

(3,205

)

 

 

 

 

(6,549

)

 

 

 

 

(3,299

)

 

 

 

 

(9,848

)

 

 

 

 

(3,540

)

 

 

 

 

(13,388

)

Other

 

 

 

 

312

 

 

 

 

350

 

 

 

 

 

662

 

 

 

 

 

368

 

 

 

 

 

1,030

 

 

 

 

 

383

 

 

 

 

 

1,412

 

Period-end receivables

 

 

 

 

$

6,510

 

 

 

 

$

6,906

 

 

 

 

 

$

6,906

 

 

 

 

 

$

7,652

 

 

 

 

 

$

7,652

 

 

 

 

 

$

8,624

 

 

 

 

 

$

8,624

 

Average receivables

 

 

 

 

$

6,582

 

 

 

 

$

6,718

 

 

 

 

 

$

6,670

 

 

 

 

 

$

7,324

 

 

 

 

 

$

6,908

 

 

 

 

 

$

8,285

 

 

 

 

 

$

7,275

 

Accounts with three or more payments (60+ days)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  past due as a percentage of period-end receivables

 

 

 

 

3.2%

 

 

 

 

3.5%

 

 

 

 

 

3.5%

 

 

 

 

 

3.8%

 

 

 

 

 

3.8%

 

 

 

 

 

4.0%

 

 

 

 

 

4.0%

 

Accounts with four or more payments (90+ days)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  past due as a percentage of period-end receivables

 

 

 

 

2.1%

 

 

 

 

2.3%

 

 

 

 

 

2.3%

 

 

 

 

 

2.6%

 

 

 

 

 

2.6%

 

 

 

 

 

2.7%

 

 

 

 

 

2.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Doubtful Accounts

 

Three Months Ended

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Twelve Months Ended

 

(millions) (unaudited)

 

May 5, 2007

 

Aug 4, 2007

 

 

Aug 4, 2007

 

 

Nov 3, 2007

 

 

Nov 3, 2007

 

 

Feb 2, 2008

 

 

Feb 2, 2008

 

Allowance at beginning of period

 

 

 

 

$

517

 

 

 

 

$

504

 

 

 

 

 

$

517

 

 

 

 

 

$

509

 

 

 

 

 

$

517

 

 

 

 

 

$

532

 

 

 

 

 

$

517

 

Bad debt provision

 

 

 

 

86

 

 

 

 

95

 

 

 

 

 

182

 

 

 

 

 

130

 

 

 

 

 

311

 

 

 

 

 

170

 

 

 

 

 

481

 

Net write-offs

 

 

 

 

(99

)

 

 

 

(90

)

 

 

 

 

(190

)

 

 

 

 

(107

)

 

 

 

 

(296

)

 

 

 

 

(132

)

 

 

 

 

(428

)

Allowance at end of period

 

 

 

 

$

504

 

 

 

 

$

509

 

 

 

 

 

$

509

 

 

 

 

 

$

532

 

 

 

 

 

$

532

 

 

 

 

 

$

570

 

 

 

 

 

$

570

 

As a percentage of period-end receivables

 

 

 

 

7.7%

 

 

 

 

7.4%

 

 

 

 

 

7.4%

 

 

 

 

 

7.0%

 

 

 

 

 

7.0%

 

 

 

 

 

6.6%

 

 

 

 

 

6.6%

 

Net write-offs as a percentage of average receivables (annualized)

 

 

 

 

6.0%

 

 

 

 

5.4%

 

 

 

 

 

5.7%

 

 

 

 

 

5.8%

 

 

 

 

 

5.7%

 

 

 

 

 

6.4%

 

 

 

 

 

5.9%