Target (TGT) 10-Q 24 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 30, 2016	Aug. 18, 2016
Document and Entity Information
Entity Registrant Name	TARGET CORP
Entity Central Index Key	27,419
Document Type	10-Q
Document Period End Date	Jul. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--01-28
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		574,864,718
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015
Income Statement [Abstract]
Sales	$ 16,169	$ 17,427	$ 32,364	$ 34,546
Cost of sales	11,102	12,051	22,286	23,962
Gross margin	5,067	5,376	10,078	10,584
Selling, general and administrative expenses	3,249	3,495	6,402	7,009
Depreciation and amortization	570	551	1,116	1,090
Earnings from continuing operations before interest expense and income taxes	1,248	1,330	2,560	2,485
Net interest expense	307	148	722	305
Earnings from continuing operations before income taxes	941	1,182	1,838	2,180
Provision for income taxes	316	409	599	756
Net earnings from continuing operations	625	773	1,239	1,424
Discontinued operations, net of tax	55	(20)	73	(36)
Net earnings	$ 680	$ 753	$ 1,312	$ 1,388
Basic earnings / (loss) per share
Continuing operations (in dollars per share)	$ 1.07	$ 1.21	$ 2.10	$ 2.23
Discontinued operations (in dollars per share)	0.09	(0.03)	0.12	(0.06)
Net earnings per share (in dollars per share)	1.17	1.18	2.22	2.17
Diluted earnings / (loss) per share
Continuing operations (in dollars per share)	1.07	1.21	2.08	2.21
Discontinued operations (in dollars per share)	0.09	(0.03)	0.12	(0.06)
Net earnings per share (in dollars per share)	$ 1.16	$ 1.18	$ 2.20	$ 2.16
Weighted average common shares outstanding
Basic (in shares)	582.2	635.8	590.3	638.3
Dilutive impact of share-based awards (in shares)	4.6	5.2	5	5.4
Diluted (in shares)	586.8	641	595.3	643.7
Antidilutive shares (in shares)	0.2	0	0.1	0
Dividends declared per share (in dollars per share)	$ 0.60	$ 0.56	$ 1.16	$ 1.08

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015
Statement of Comprehensive Income [Abstract]
Net earnings	$ 680	$ 753	$ 1,312	$ 1,388
Other comprehensive income, net of tax
Pension and other benefit liabilities, net of taxes of $3, $5, $8 and $76	5	8	12	117
Currency translation adjustment and cash flow hedges, net of taxes of $0, $1, $1 and $1	0	0	5	1
Other comprehensive income	5	8	17	118
Comprehensive income	$ 685	$ 761	$ 1,329	$ 1,506

Consolidated Statements of Com4

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015
Statement of Comprehensive Income [Abstract]
Pension and other benefit liabilities, taxes	$ 3	$ 5	$ 8	$ 76
Currency translation adjustment and cash flow hedges, taxes	$ 0	$ 1	$ 1	$ 1

Consolidated Statements of Fina

Consolidated Statements of Financial Position - USD ($) $ in Millions	Jul. 30, 2016	Jan. 30, 2016	Aug. 01, 2015
Assets
Cash and cash equivalents, including short term investments of $303, $3,008 and $1,985	$ 1,480	$ 4,046	$ 2,742
Inventory	8,631	8,601	8,261
Current assets of discontinued operations	83	322	133
Other current assets	1,309	1,161	2,104
Total current assets	11,503	14,130	13,240
Property and equipment
Land	6,111	6,125	6,120
Buildings and improvements	27,315	27,059	26,726
Fixtures and equipment	5,282	5,347	5,145
Computer hardware and software	2,504	2,617	2,550
Construction-in-progress	232	315	494
Accumulated depreciation	(16,510)	(16,246)	(15,452)
Property and equipment, net	24,934	25,217	25,583
Noncurrent assets of discontinued operations	17	75	420
Other noncurrent assets	834	840	950
Total assets	37,288	40,262	40,193
Liabilities and shareholders’ investment
Accounts payable	6,811	7,418	6,944
Accrued and other current liabilities	3,544	4,236	3,768
Current portion of long-term debt and other borrowings	647	815	841
Current liabilities of discontinued operations	1	153	60
Total current liabilities	11,003	12,622	11,613
Long-term debt and other borrowings	12,063	11,945	11,817
Deferred income taxes	754	823	1,192
Noncurrent liabilities of discontinued operations	19	18	276
Other noncurrent liabilities	1,872	1,897	1,353
Total noncurrent liabilities	14,708	14,683	14,638
Shareholders’ investment
Common stock	48	50	53
Additional paid-in capital	5,562	5,348	5,271
Retained earnings	6,579	8,188	9,099
Accumulated other comprehensive loss
Pension and other benefit liabilities	(576)	(588)	(444)
Currency translation adjustment and cash flow hedges	(36)	(41)	(37)
Total shareholders’ investment	11,577	12,957	13,942
Total liabilities and shareholders’ investment	$ 37,288	$ 40,262	$ 40,193

Consolidated Statements of Fin6

Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions	Jul. 30, 2016	Jan. 30, 2016	Aug. 01, 2015
Statement of Financial Position [Abstract]
Cash and cash equivalents, short-term investments	$ 303	$ 3,008	$ 1,985
Common stock, shares authorized	6,000,000,000	6,000,000,000	6,000,000,000
Common stock, par value (in dollars per share)	$ 0.0833	$ 0.0833	$ 0.0833
Common stock, shares issued	574,801,225	602,226,517	630,446,029
Common stock, shares outstanding	574,801,225	602,226,517	630,446,029
Preferred stock, shares authorized	5,000,000	5,000,000	5,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares issued	0	0	0
Preferred stock, shares outstanding	0	0	0

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015	Jan. 30, 2016
Operating activities
Net earnings	$ 680	$ 753	$ 1,312	$ 1,388	$ 3,363
Earnings / (losses) from discontinued operations, net of tax	55	(20)	73	(36)
Net earnings from continuing operations	625	773	1,239	1,424
Adjustments to reconcile net earnings to cash provided by operations:
Depreciation and amortization	570	551	1,116	1,090
Share-based compensation expense			67	54
Deferred income taxes			(79)	(45)
Loss on debt extinguishment			422	0
Noncash (gains) / losses and other, net			(14)	26
Changes in operating accounts
Inventory			(29)	18
Other assets			140	156
Accounts payable and accrued liabilities			(1,466)	(683)
Cash provided by operating activities—continuing operations			1,396	2,040
Cash provided by operating activities—discontinued operations			92	823
Cash provided by operations			1,488	2,863
Investing activities
Expenditures for property and equipment			(684)	(710)
Proceeds from disposal of property and equipment			14	13
Proceeds from sale of business			0	8
Other investments			1	38
Cash required for investing activities—continuing operations			(669)	(651)
Cash provided by investing activities—discontinued operations			0	19
Cash required for investing activities			(669)	(632)
Financing activities
Additions to long-term debt			1,979	0
Reductions of long-term debt			(2,611)	(54)
Dividends paid			(666)	(665)
Repurchase of stock			(2,238)	(1,251)
Stock option exercises			151	271
Cash required for financing activities			(3,385)	(1,699)
Net (decrease) / increase in cash and cash equivalents			(2,566)	532
Cash and cash equivalents at beginning of period			4,046	2,210	2,210
Cash and cash equivalents at end of period	$ 1,480	$ 2,742	$ 1,480	$ 2,742	$ 4,046

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Investment - USD ($) $ in Millions	3 Months Ended	6 Months Ended		12 Months Ended
	Jul. 30, 2016	Jul. 30, 2016	Aug. 01, 2015	Jan. 30, 2016
Increase (Decrease) in Shareholders' Investment
Beginning balance (in shares)		602,226,517
Beginning balance		$ 12,957	$ 13,997	$ 13,997
Net earnings	$ 680	1,312	1,388	3,363
Other comprehensive income	$ 5	17	$ 118	(30)
Dividends declared		(680)		(1,378)
Repurchase of stock		(2,243)		(3,445)
Stock options and awards		$ 214		$ 450
Ending balance (in shares)	574,801,225	574,801,225	630,446,029	602,226,517
Ending balance	$ 11,577	$ 11,577	$ 13,942	$ 12,957
Common Stock
Increase (Decrease) in Shareholders' Investment
Beginning balance (in shares)		602,200,000	640,200,000	640,200,000
Beginning balance		$ 50	$ 53	$ 53
Repurchase of stock (in shares)		(30,400,000)		(44,700,000)
Repurchase of stock		$ (2)		$ (4)
Stock options and awards (in shares)		3,000,000		6,700,000
Stock options and awards		$ 0		$ 1
Ending balance (in shares)	574,800,000	574,800,000		602,200,000
Ending balance	$ 48	$ 48		$ 50
Additional Paid-in Capital
Increase (Decrease) in Shareholders' Investment
Beginning balance		5,348	4,899	4,899
Stock options and awards		214		449
Ending balance	5,562	5,562		5,348
Retained Earnings
Increase (Decrease) in Shareholders' Investment
Beginning balance		8,188	9,644	9,644
Net earnings		1,312		3,363
Dividends declared		(680)		(1,378)
Repurchase of stock		(2,241)		(3,441)
Ending balance	6,579	6,579		8,188
Accumulated Other Comprehensive Income/(Loss)
Increase (Decrease) in Shareholders' Investment
Beginning balance		(629)	$ (599)	(599)
Other comprehensive income		17		(30)
Ending balance	$ (612)	$ (612)		$ (629)

Accounting Policies

Accounting Policies	6 Months Ended
	Jul. 30, 2016
Accounting Policies [Abstract]
Accounting Policies	Accounting Policies These financial statements should be read in conjunction with the financial statement disclosures in our 2015 Form 10-K. We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly operating results are reflected herein and are of a normal, recurring nature. Certain prior-year amounts have been reclassified to conform to the current year presentation. Unless otherwise noted, amounts presented within the Notes to Consolidated Financial Statements refer to our continuing operations. Due to the seasonal nature of our business, quarterly revenues, expenses, earnings, and cash flows are not necessarily indicative of the results that may be expected for the full year.

Discontinued Operations

Discontinued Operations	6 Months Ended
	Jul. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Discontinued Operations As part of a March 2016 settlement between Target Canada Co. and certain other wholly owned subsidiaries of Target (collectively Canada Subsidiaries) and all of their former landlords, we agreed to subordinate a portion of our intercompany claims and make certain cash contributions to the Target Canada Co. estate in exchange for a full release from our obligations under guarantees of certain leases of the Canada Subsidiaries. The settlement was contingent upon the Canada Subsidiaries' creditors' and the court's approval of a plan of compromise and arrangement to complete the controlled, orderly, and timely wind-down of the Canada Subsidiaries (Plan). During the second quarter of 2016, a Plan was approved. The net pretax financial impact of the settlement and Plan was materially consistent with amounts previously recorded in our financial statements. For the three and six months ended July 30, 2016, net earnings from discontinued operations primarily reflect tax benefits from investment losses in Canada recognized upon court approval of the Canada Subsidiaries' liquidation plan. During the second quarter of 2016, we made cash contributions of $27 million to the Target Canada Co. estate and received cash distributions of $160 million . Assets and Liabilities of Discontinued Operations (millions) July 30, January 30, August 1, Income tax benefit $ 41 $ 77 $ 234 Receivables from Canada Subsidiaries 59 320 319 Total assets $ 100 $ 397 $ 553 Accrued liabilities $ 20 $ 171 $ 336 Total liabilities $ 20 $ 171 $ 336

Restructuring Initiatives

Restructuring Initiatives	6 Months Ended
	Jul. 30, 2016
Restructuring and Related Activities [Abstract]
Restructuring Initiatives	Restructuring Initiatives In 2015, we initiated a series of headquarters workforce reductions intended to increase organizational effectiveness and provide cost savings that can be reinvested in our growth initiatives. As a result, we recorded $11 million and $114 million of severance and other benefits-related charges within selling, general, and administrative expenses (SG&A) during the three and six months ended August 1, 2015. The vast majority of these expenses required cash expenditures and were not included in our segment results. An accrual for restructuring costs of $14 million was included in other current liabilities as of August 1, 2015. No balance remained as of July 30, 2016.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jul. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements Fair value measurements are reported in one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). Fair Value Measurements - Recurring Basis Fair Value at (millions) Pricing Category July 30, January 30, August 1, Assets Cash and cash equivalents Short-term investments Level 1 $ 303 $ 3,008 $ 1,985 Other current assets Prepaid forward contracts Level 1 31 32 36 Beneficial interest asset Level 3 13 19 29 Interest rate swaps (a) Level 2 — 12 25 Other noncurrent assets Interest rate swaps (a) Level 2 28 27 16 Beneficial interest asset Level 3 6 12 19 Liabilities Other current liabilities Interest rate swaps (a) Level 2 — 8 16 (a) See Note 7 for additional information on interest rate swaps. Significant Financial Instruments not Measured at Fair Value (a) (millions) July 30, 2016 January 30, 2016 August 1, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Debt (b) $ 11,712 $ 13,542 $ 11,859 $ 13,385 $ 11,854 $ 13,365 (a) The carrying amounts of certain other current assets, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature. (b) The carrying amount and estimated fair value of debt exclude unamortized swap valuation adjustments and capital lease obligations.

Notes Payable and Long-Term Deb

Notes Payable and Long-Term Debt	6 Months Ended
	Jul. 30, 2016
Debt Disclosure [Abstract]
Notes Payable and Long-Term Debt	Notes Payable and Long-Term Debt We obtain short-term financing from time to time under our commercial paper program, a form of notes payable. No balances were outstanding at any time during 2016 or 2015. In April 2016, we issued unsecured fixed rate debt of $1 billion at 2.5% that matures in April 2026 and $1 billion at 3.625% that matures in April 2046. During the first and second quarter of 2016, we used cash on hand and proceeds from these issuances to repurchase $565 million and $824 million of debt, respectively, before its maturity at a market value of $820 million and $981 million , respectively. We recognized a loss on early retirement of approximately $261 million and $161 million in first and second quarter, respectively, which was recorded in net interest expense in our Consolidated Statements of Operations.

Data Breach

Data Breach	6 Months Ended
	Jul. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Data Breach	Data Breach In prior periods we have separately reported on our accrual for estimated probable losses and cumulative expenses with respect to the data breach we experienced in the fourth quarter of 2013 (the Data Breach). As of the date of this filing we have resolved the most significant claims relating to the Data Breach and there were no material changes to our loss contingency assessment relating to the few remaining claims during the second quarter. We do not expect there to be any material changes to the assessment of our exposure from this event, and we will no longer be providing separate reporting with respect to the Data Breach.

Derivative Financial Instrument

Derivative Financial Instruments	6 Months Ended
	Jul. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	Derivative Financial Instruments Our derivative instruments primarily consist of interest rate swaps, which are used to mitigate interest rate risk. As a result of our use of derivative instruments, we have counterparty credit exposure to large global financial institutions. We monitor this concentration of counterparty credit risk on an ongoing basis. See Note 4 for a description of the fair value measurement of our derivative instruments and their classification on the Consolidated Statements of Financial Position. As of July 30, 2016 and August 1, 2015 , interest rate swaps with notional amounts totaling $1,000 million and $1,250 million , respectively, were designated as fair value hedges. No ineffectiveness was recognized during the three months ended July 30, 2016 or August 1, 2015 . Periodic payments, valuation adjustments, and amortization of gains or losses on our derivative contracts had the following effect on our Consolidated Statements of Operations: Derivative Contracts - Effect on Results of Operations (millions) Three Months Ended Six Months Ended Type of Contract Classification of (Income)/Expense July 30, August 1, July 30, August 1, Interest rate swaps Net interest expense $ (8 ) $ (9 ) $ (16 ) $ (18 ) The amount remaining on unamortized hedged debt valuation gains from terminated or de-designated interest rate swaps that will be amortized into earnings over the remaining lives of the underlying debt totaled $8 million , $15 million , and $25 million , at July 30, 2016 , January 30, 2016 , and August 1, 2015 , respectively.

Share Repurchase

Share Repurchase	6 Months Ended
	Jul. 30, 2016
Equity [Abstract]
Share Repurchase	Share Repurchase Under our current $10 billion share repurchase program, we have repurchased 125.0 million shares of common stock through July 30, 2016 at an average price of $70.57 , for a total investment of $8.8 billion . Share Repurchases Six Months Ended (a) (millions, except per share data) July 30, August 1, Total number of shares purchased 30.4 15.2 Average price paid per share $ 73.70 $ 81.41 Total investment $ 2,243 $ 1,240 Note: Excludes shares withheld to settle employee statutory tax withholding related to the vesting of share-based awards. (a) Includes 0.2 million and 0.1 million shares delivered upon the noncash settlement of prepaid contracts during the six months ended July 30, 2016 and August 1, 2015, respectively. These contracts had an original cash investment of $12 million and $3 million , respectively, and aggregate market value of $13 million and $7 million . These contracts are among the investment vehicles used to reduce our economic exposure related to our nonqualified deferred compensation plans. Note 10 provides the details of our positions in prepaid forward contracts.

Share-Based Compensation

Share-Based Compensation	6 Months Ended
	Jul. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	Share-Based Compensation During the first quarter of 2016, we adopted Accounting Standards Update (ASU) No. 2016-09, Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). As a result of adoption, we recognized $1 million and $18 million of excess tax benefits related to share-based payments in our provision for income taxes for the three and six months ended July 30, 2016. These items were historically recorded in additional paid-in capital. In addition, for each period presented, cash flows related to excess tax benefits are classified as an operating activity along with other income tax cash flows. Cash paid on employees' behalf related to shares withheld for tax purposes is classified as a financing activity. Retrospective application of the cash flow presentation requirements resulted in increases to both net cash provided by operations and net cash required for financing activities of $74 million for the six months ended August 1, 2015. Our compensation expense each period continues to reflect estimated forfeitures.

Pension and Other Benefits

Pension and Other Benefits	6 Months Ended
	Jul. 30, 2016
Compensation and Retirement Disclosure [Abstract]
Pension and Other Benefits	Pension and Other Benefits Pension Benefits We provide pension plan benefits to certain eligible team members. Net Pension Benefits Expense Three Months Ended Six Months Ended (millions) July 30, August 1, July 30, August 1, Service cost $ 20 $ 27 $ 41 $ 55 Interest cost 35 39 69 77 Expected return on assets (65 ) (65 ) (129 ) (130 ) Amortization of losses 13 19 25 42 Amortization of prior service cost (3 ) (3 ) (6 ) (6 ) Settlement charges — — — 2 Total $ — $ 17 $ — $ 40 Other Benefits We offer unfunded nonqualified deferred compensation plans to certain team members. We mitigate some of our risk of these plans through investing in vehicles, including company-owned life insurance and prepaid forward contracts in our own common stock, that offset a substantial portion of our economic exposure to the returns of these plans. These investment vehicles are general corporate assets and are marked to market with the related gains and losses recognized in the Consolidated Statements of Operations in the period they occur. The total change in fair value for contracts indexed to our own common stock recognized in earnings was pretax (loss)/income of ($2) million and $1 million for the three and six months ended July 30, 2016 , respectively, and pretax income of $1 million and $4 million for the three and six months ended August 1, 2015 , respectively. During the six months ended July 30, 2016 and August 1, 2015 , we made no investments in prepaid forward contracts in our own common stock. Adjusting our position in these investment vehicles may involve repurchasing shares of Target common stock when settling the forward contracts as described in Note 8. The settlement dates of these instruments are regularly renegotiated with the counterparty. At July 30, 2016 , January 30, 2016 and August 1, 2015, we held asset positions in prepaid forward contracts for 0.4 million shares of our common stock, for a total cash investment of $17 million , $18 million and $18 million ( $41.11 per share) and a contractual fair value of $31 million , $32 million and $36 million , respectively.

Accumulated Other Comprehensive

Accumulated Other Comprehensive (Loss) / Income	6 Months Ended
	Jul. 30, 2016
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated Other Comprehensive Income	Accumulated Other Comprehensive (Loss) / Income (millions) Cash Flow Hedges Currency Translation Adjustment Pension and Other Benefits Total January 30, 2016 $ (19 ) $ (22 ) $ (588 ) $ (629 ) Other comprehensive income before reclassifications — 2 3 5 Amounts reclassified from AOCI 3 (a) — 9 (b) 12 July 30, 2016 $ (16 ) $ (20 ) $ (576 ) $ (612 ) (a) Represents gains and losses on cash flow hedges, net of $1 million of taxes. (b) Represents amortization of pension and other benefit liabilities, net of $6 million of taxes.

Segment Reporting

Segment Reporting	6 Months Ended
	Jul. 30, 2016
Segment Reporting [Abstract]
Segment Reporting	Segment Reporting Our segment measure of profit is used by management to evaluate performance and make operating decisions. We operate as a single segment that includes all of our continuing operations, which are designed to enable guests to purchase products seamlessly in stores, online or through mobile devices. Business Segment Results Three Months Ended Six Months Ended (millions) July 30, August 1, July 30, August 1, Sales $ 16,169 $ 17,427 $ 32,364 $ 34,546 Cost of sales 11,102 12,051 22,286 23,962 Gross margin 5,067 5,376 10,078 10,584 Selling, general, and administrative expenses (d) 3,256 3,475 6,398 6,883 Depreciation and amortization 570 551 1,116 1,090 Segment profit 1,241 1,350 2,564 2,611 Restructuring costs (a)(d) — (11 ) — (114 ) Pharmacy transaction-related costs (b)(d) 7 — (4 ) — Data Breach-related costs (c)(d) — (9 ) — (12 ) Earnings from continuing operations before interest expense and income taxes 1,248 1,330 2,560 2,485 Net interest expense 307 148 722 305 Earnings from continuing operations before income taxes $ 941 $ 1,182 $ 1,838 $ 2,180 Note: Amounts may not foot due to rounding. (a) Refer to Note 3 for more information on restructuring costs. (b) Represents contract termination charges, severance and other items related to the December 2015 sale of our former pharmacy and clinic businesses to CVS. (c) Refer to Note 6 for more information on Data Breach-related costs. (d) The sum of segment SG&A expenses, restructuring costs, pharmacy transaction-related costs, and Data Breach-related costs equal consolidated SG&A expenses. Reconciliation of Segment Assets to Total Assets (millions) July 30, January 30, August 1, Segment assets $ 37,182 $ 39,845 $ 39,585 Assets of discontinued operations 100 397 553 Unallocated assets (a) 6 20 55 Total assets $ 37,288 $ 40,262 $ 40,193 (a) Represents the insurance receivable related to the Data Breach.

Discontinued Operations (Tables

Discontinued Operations (Tables)	6 Months Ended
	Jul. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]
Schedule of Assets and Liabilities of Discontinued Operations	Assets and Liabilities of Discontinued Operations (millions) July 30, January 30, August 1, Income tax benefit $ 41 $ 77 $ 234 Receivables from Canada Subsidiaries 59 320 319 Total assets $ 100 $ 397 $ 553 Accrued liabilities $ 20 $ 171 $ 336 Total liabilities $ 20 $ 171 $ 336

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jul. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of Fair Value Measurements - Recurring Basis	Fair value measurements are reported in one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). Fair Value Measurements - Recurring Basis Fair Value at (millions) Pricing Category July 30, January 30, August 1, Assets Cash and cash equivalents Short-term investments Level 1 $ 303 $ 3,008 $ 1,985 Other current assets Prepaid forward contracts Level 1 31 32 36 Beneficial interest asset Level 3 13 19 29 Interest rate swaps (a) Level 2 — 12 25 Other noncurrent assets Interest rate swaps (a) Level 2 28 27 16 Beneficial interest asset Level 3 6 12 19 Liabilities Other current liabilities Interest rate swaps (a) Level 2 — 8 16 (a) See Note 7 for additional information on interest rate swaps.
Schedule of Significant Financial Instruments not Measured at Fair Value	Significant Financial Instruments not Measured at Fair Value (a) (millions) July 30, 2016 January 30, 2016 August 1, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Debt (b) $ 11,712 $ 13,542 $ 11,859 $ 13,385 $ 11,854 $ 13,365 (a) The carrying amounts of certain other current assets, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature. (b) The carrying amount and estimated fair value of debt exclude unamortized swap valuation adjustments and capital lease obligations.

Derivative Financial Instrume23

Derivative Financial Instruments (Tables)	6 Months Ended
	Jul. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Derivative Contracts - Effect on Results of Operations	Periodic payments, valuation adjustments, and amortization of gains or losses on our derivative contracts had the following effect on our Consolidated Statements of Operations: Derivative Contracts - Effect on Results of Operations (millions) Three Months Ended Six Months Ended Type of Contract Classification of (Income)/Expense July 30, August 1, July 30, August 1, Interest rate swaps Net interest expense $ (8 ) $ (9 ) $ (16 ) $ (18 )

Share Repurchase (Tables)

Share Repurchase (Tables)	6 Months Ended
	Jul. 30, 2016
Equity [Abstract]
Schedule of Share Repurchase (excluding ASR)	Share Repurchases Six Months Ended (a) (millions, except per share data) July 30, August 1, Total number of shares purchased 30.4 15.2 Average price paid per share $ 73.70 $ 81.41 Total investment $ 2,243 $ 1,240 Note: Excludes shares withheld to settle employee statutory tax withholding related to the vesting of share-based awards. (a) Includes 0.2 million and 0.1 million shares delivered upon the noncash settlement of prepaid contracts during the six months ended July 30, 2016 and August 1, 2015, respectively. These contracts had an original cash investment of $12 million and $3 million , respectively, and aggregate market value of $13 million and $7 million . These contracts are among the investment vehicles used to reduce our economic exposure related to our nonqualified deferred compensation plans. Note 10 provides the details of our positions in prepaid forward contracts.

Pension and Other Benefits (Tab

Pension and Other Benefits (Tables)	6 Months Ended
	Jul. 30, 2016
Compensation and Retirement Disclosure [Abstract]
Schedule of Net Pension and Postretirement Health Care Benefits Expense	We provide pension plan benefits to certain eligible team members. Net Pension Benefits Expense Three Months Ended Six Months Ended (millions) July 30, August 1, July 30, August 1, Service cost $ 20 $ 27 $ 41 $ 55 Interest cost 35 39 69 77 Expected return on assets (65 ) (65 ) (129 ) (130 ) Amortization of losses 13 19 25 42 Amortization of prior service cost (3 ) (3 ) (6 ) (6 ) Settlement charges — — — 2 Total $ — $ 17 $ — $ 40

Accumulated Other Comprehensi26

Accumulated Other Comprehensive (Loss) / Income (Tables)	6 Months Ended
	Jul. 30, 2016
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Summary of the Changes in Accumulated Other Comprehensive Income (AOCI) by Component	(millions) Cash Flow Hedges Currency Translation Adjustment Pension and Other Benefits Total January 30, 2016 $ (19 ) $ (22 ) $ (588 ) $ (629 ) Other comprehensive income before reclassifications — 2 3 5 Amounts reclassified from AOCI 3 (a) — 9 (b) 12 July 30, 2016 $ (16 ) $ (20 ) $ (576 ) $ (612 ) (a) Represents gains and losses on cash flow hedges, net of $1 million of taxes. (b) Represents amortization of pension and other benefit liabilities, net of $6 million of taxes.

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Jul. 30, 2016
Segment Reporting [Abstract]
Schedule of Business Segment Results and Reconciliation of Segment Assets to Total Assets	We operate as a single segment that includes all of our continuing operations, which are designed to enable guests to purchase products seamlessly in stores, online or through mobile devices. Business Segment Results Three Months Ended Six Months Ended (millions) July 30, August 1, July 30, August 1, Sales $ 16,169 $ 17,427 $ 32,364 $ 34,546 Cost of sales 11,102 12,051 22,286 23,962 Gross margin 5,067 5,376 10,078 10,584 Selling, general, and administrative expenses (d) 3,256 3,475 6,398 6,883 Depreciation and amortization 570 551 1,116 1,090 Segment profit 1,241 1,350 2,564 2,611 Restructuring costs (a)(d) — (11 ) — (114 ) Pharmacy transaction-related costs (b)(d) 7 — (4 ) — Data Breach-related costs (c)(d) — (9 ) — (12 ) Earnings from continuing operations before interest expense and income taxes 1,248 1,330 2,560 2,485 Net interest expense 307 148 722 305 Earnings from continuing operations before income taxes $ 941 $ 1,182 $ 1,838 $ 2,180 Note: Amounts may not foot due to rounding. (a) Refer to Note 3 for more information on restructuring costs. (b) Represents contract termination charges, severance and other items related to the December 2015 sale of our former pharmacy and clinic businesses to CVS. (c) Refer to Note 6 for more information on Data Breach-related costs. (d) The sum of segment SG&A expenses, restructuring costs, pharmacy transaction-related costs, and Data Breach-related costs equal consolidated SG&A expenses. Reconciliation of Segment Assets to Total Assets (millions) July 30, January 30, August 1, Segment assets $ 37,182 $ 39,845 $ 39,585 Assets of discontinued operations 100 397 553 Unallocated assets (a) 6 20 55 Total assets $ 37,288 $ 40,262 $ 40,193 (a) Represents the insurance receivable related to the Data Breach.

Discontinued Operations (Detail

Discontinued Operations (Details) - Canada Exit - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2016	Jan. 30, 2016	Aug. 01, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash contribution paid to affiliate	$ 27
Cash distribution received from affiliate	160
Assets and Liabilities of Discontinued Operations
Income tax benefit	41	$ 77	$ 234
Receivables from Canada Subsidiaries	59	320	319
Total	100	397	553
Accrued liabilities	20	171	336
Total liabilities	$ 20	$ 171	$ 336

Restructuring Initiatives (Det

Restructuring Initiatives (Details) - 2015 Restructuring - USD ($)	3 Months Ended	6 Months Ended
	Aug. 01, 2015	Aug. 01, 2015	Jul. 30, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring balance	$ 14,000,000	$ 14,000,000	$ 0
SG&A
Restructuring Cost and Reserve [Line Items]
Severance and other benefits-related charges	$ 11,000,000	$ 114,000,000

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Millions	Jul. 30, 2016	Jan. 30, 2016	Aug. 01, 2015
Other current assets
Other current assets	$ 1,309	$ 1,161	$ 2,104
Other noncurrent assets
Other noncurrent assets	834	840	950
Fair value measured on recurring basis | Level 1 | Prepaid forward contracts
Other current assets
Other current assets	31	32	36
Fair value measured on recurring basis | Level 1 | Short-term investments
Cash and cash equivalents
Short-term investments	303	3,008	1,985
Fair value measured on recurring basis | Level 2 | Interest rate swaps
Other current assets
Other current assets	0	12	25
Other noncurrent assets
Other noncurrent assets	28	27	16
Other current liabilities
Interest rate swaps	0	8	16
Fair value measured on recurring basis | Level 3 | Beneficial interest asset
Other current assets
Other current assets	13	19	29
Other noncurrent assets
Other noncurrent assets	$ 6	$ 12	$ 19

Fair Value Measurements - Sch31

Fair Value Measurements - Schedule of Significant Financial Instruments not Measured at Fair Value (Details) - USD ($) $ in Millions	Jul. 30, 2016	Jan. 30, 2016	Aug. 01, 2015
Carrying Amount
Financial Instruments, Balance Sheet Groupings
Debt	$ 11,712	$ 11,859	$ 11,854
Fair Value
Financial Instruments, Balance Sheet Groupings
Debt	$ 13,542	$ 13,385	$ 13,365

Notes Payable and Long-Term D32

Notes Payable and Long-Term Debt (Details) - Unsecured Debt - USD ($)	3 Months Ended
	Jul. 30, 2016	Apr. 30, 2016
Debt Instrument [Line Items]
Repurchased amount	$ 824,000,000	$ 565,000,000
Market value	981,000,000	820,000,000
Loss on early retirement	161,000,000	$ 261,000,000
Unsecured Fixed Rate 2.5 % Debt Maturing April 2026
Debt Instrument [Line Items]
Unsecured fixed rate debt	$ 1,000,000,000
Interest rate	2.50%
Unsecured Fixed Rate 3.625 % Debt Maturing April 2046
Debt Instrument [Line Items]
Unsecured fixed rate debt	$ 1,000,000,000
Interest rate	3.625%

Derivative Financial Instrume33

Derivative Financial Instruments - Narrative (Details) - USD ($)	6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jan. 30, 2016
Derivative Contracts - Effect on Results of Operations (millions)
Amount remaining on unamortized hedged debt valuation gains	$ 8,000,000	$ 25,000,000	$ 15,000,000
Designated as Hedging Instrument | Interest Rate Swaps
Derivative Contracts - Effect on Results of Operations (millions)
Notional amount	1,000,000,000	1,250,000,000
Amount of ineffectiveness recognized	$ 0	$ 0

Derivative Financial Instrume34

Derivative Financial Instruments - Derivative Contracts - Effect on Results of Operations (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015
Interest rate swaps
Derivative Contracts - Effect on Results of Operations (millions)
Net interest expense	$ (8)	$ (9)	$ (16)	$ (18)

Share Repurchase - Narrative (D

Share Repurchase - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions	6 Months Ended		12 Months Ended	14 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jan. 30, 2016	Jul. 30, 2016
Loss Contingencies [Line Items]
Cumulative shares of common stock repurchased (in shares)	30.4	15.2
Total investment	$ 2,243,000,000	$ 1,240,000,000
Shares delivered upon noncash settlement	0.2	0.1
Total cash investment	$ 2,243,000,000		$ 3,445,000,000
Repurchase of Share Repurchase Program 2015
Loss Contingencies [Line Items]
New amount of existing share repurchase program	10,000,000,000			$ 10,000,000,000
Cumulative shares of common stock repurchased (in shares)				125
Price per share (in dollars per share)				$ 70.57
Total investment				$ 8,800,000,000
Cash Investment
Loss Contingencies [Line Items]
Total cash investment	12,000,000	$ 3,000,000
Prepaid Forward Contracts Market Value
Loss Contingencies [Line Items]
Aggregate market value	$ 13,000,000	$ 7,000,000

Share Repurchase - Schedule of

Share Repurchase - Schedule of Share Repurchases (excluding ASR) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015
Equity [Abstract]
Total number of shares purchased	30.4	15.2
Average price paid per share (in dollars per share)	$ 73.70	$ 81.41
Total investment	$ 2,243	$ 1,240

Share-Based Compensation (Detai

Share-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jul. 30, 2016	Jul. 30, 2016	Aug. 01, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in net cash provided by operations		$ 1,488	$ 2,863
Increase in net cash required for financing activities		(3,385)	(1,699)
Accounting Standards Update 2016-09, Statutory Tax Withholding Component | New Accounting Pronouncement, Early Adoption, Effect
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Excess tax benefits	$ 1	$ 18
Increase in net cash provided by operations			74
Increase in net cash required for financing activities			$ 74

Pension and Other Benefits - Sc

Pension and Other Benefits - Schedule of Net Pension and Postretirement Health Care Benefits Expense (Details) - Pension Plan - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015
Net Pension Benefits Expense
Service cost	$ 20	$ 27	$ 41	$ 55
Interest cost	35	39	69	77
Expected return on assets	(65)	(65)	(129)	(130)
Amortization of losses	13	19	25	42
Amortization of prior service cost	(3)	(3)	(6)	(6)
Settlement charges	0	0	0	2
Total	$ 0	$ 17	$ 0	$ 40

Pension and Other Benefits - Na

Pension and Other Benefits - Narrative (Details) - Forward Contracts - USD ($) $ / shares in Units, shares in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015	Jan. 30, 2016
Defined Benefit Plan Disclosure [Line Items]
Pretax income	$ (2,000,000)	$ 1,000,000	$ 1,000,000	$ 4,000,000
Investments			$ 0	$ 0
Shares of common stock			0.4	0.4	0.4
Cash investment	17,000,000	18,000,000	$ 17,000,000	$ 18,000,000	$ 18,000,000
Share price (in dollars per share)			$ 41.11	$ 41.11	$ 41.11
Contractual fair value	$ 31,000,000	$ 36,000,000	$ 31,000,000	$ 36,000,000	$ 32,000,000

Accumulated Other Comprehensi40

Accumulated Other Comprehensive (Loss) / Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			$ 12,957	$ 13,997
Ending balance	$ 11,577	$ 13,942	11,577	13,942
Net amount of taxes	316	$ 409	599	756
Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			(19)
Other comprehensive income before reclassifications			0
Amounts reclassified from AOCI			3
Ending balance	(16)		(16)
Cash Flow Hedges | Amount reclassified from other comprehensive income
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net amount of taxes			1
Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			(22)
Other comprehensive income before reclassifications			2
Amounts reclassified from AOCI			0
Ending balance	(20)		(20)
Pension and Other Benefits
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			(588)
Other comprehensive income before reclassifications			3
Amounts reclassified from AOCI			9
Ending balance	(576)		(576)
Pension and Other Benefits | Amount reclassified from other comprehensive income
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net amount of taxes			6
Total
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			(629)	$ (599)
Other comprehensive income before reclassifications			5
Amounts reclassified from AOCI			12
Ending balance	$ (612)		$ (612)

Segment Reporting - Business Se

Segment Reporting - Business Segment Results (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2016	Aug. 01, 2015	Jul. 30, 2016	Aug. 01, 2015
Segment Reporting [Abstract]
Sales	$ 16,169	$ 17,427	$ 32,364	$ 34,546
Cost of sales	11,102	12,051	22,286	23,962
Gross margin	5,067	5,376	10,078	10,584
Selling, general and administrative expenses	3,256	3,475	6,398	6,883
Depreciation and amortization	570	551	1,116	1,090
Segment profit	1,241	1,350	2,564	2,611
Restructuring costs	0	(11)	0	(114)
Pharmacy transaction-related costs	7	0	(4)	0
Data Breach-related costs	0	(9)	0	(12)
Earnings from continuing operations before interest expense and income taxes	1,248	1,330	2,560	2,485
Net interest expense	307	148	722	305
Earnings from continuing operations before income taxes	$ 941	$ 1,182	$ 1,838	$ 2,180

Segment Reporting - Reconciliat

Segment Reporting - Reconciliation of Segment Assets to Total Assets (Details) - USD ($) $ in Millions	Jul. 30, 2016	Jan. 30, 2016	Aug. 01, 2015
Segment Reporting Information 2 [Line Items]
Total assets	$ 37,288	$ 40,262	$ 40,193
Assets of discontinued operations
Segment Reporting Information 2 [Line Items]
Total assets	100	397	553
Segment assets
Segment Reporting Information 2 [Line Items]
Total assets	37,182	39,845	39,585
Unallocated assets
Segment Reporting Information 2 [Line Items]
Total assets	$ 6	$ 20	$ 55