Segment Reporting

6 Months Ended

Aug. 03, 2013

Segment Reporting

Segment Reporting

9. Segment Reporting

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 August 3, 2013								Three Months Ended July 28, 2012
(millions)	U.S.		Canadian			Total			U.S.		Canadian			Total
Sales	$	16,841	$	275		$	17,117		$	16,451	$	—		$	16,451
Cost of sales	11,556		188			11,745			11,297		—			11,297
Selling, general and administrative expenses(a)	3,462		207			3,669			3,322		47			3,368
Depreciation and amortization	493		49			542			508		22			531
Segment profit	$	1,330	$	(169	)	$	1,161		$	1,324	$	(69	)	$	1,255
Gain on receivables transaction						—								—
Reduction of beneficial interest asset(a)						(29		)						—
Earnings before interest expense and income taxes						1,132								1,255
Net interest expense						171								184
Earnings before income taxes						$	961							$	1,071

Business Segment Results	Six Months Ended August 3, 2013								Six Months Ended July 28, 2012
(millions)	U.S.		Canadian			Total			U.S.		Canadian			Total
Sales	$	33,462	$	361		$	33,823		$	32,989	$	—		$	32,989
Cost of sales	23,067		241			23,308			22,838		—			22,838
Selling, general and administrative expenses(a)	6,842		400			7,242			6,471		81			6,552
Depreciation and amortization	984		94			1,079			1,016		44			1,060
Segment profit	2,569		(374		)	2,194			2,664		(125		)	2,539
Gain on receivables transaction						391								—
Reduction of beneficial interest asset(a)						(45		)						—
Earnings before interest expense and income taxes						2,540								2,539
Net interest expense						801								366
Earnings before income taxes						$	1,739							$	2,173

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

Note: 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. 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) Our U.S. Segment includes all TD profit-sharing amounts in segment EBIT; however, under GAAP, some amounts received from TD reduce the beneficial interest asset and are not recorded in consolidated earnings.  Segment SG&A expenses plus these amounts equal consolidated SG&A expenses.

Total Assets by Segment (millions)	August 3, 2013		February 2, 2013		July 28, 2012
U.S.	$	37,810	$	43,289	$	43,475
Canadian	6,172		4,722		3,850
Total segment assets	43,982		48,011		47,325
Unallocated assets (a)	180		152		—
Total assets	$	44,162	$	48,163	$	47,325

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 August 3, 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.