Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 29, 2017 | May 16, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | TARGET CORP | |
Entity Central Index Key | 27,419 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 29, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-03 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 551,708,283 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Income Statement [Abstract] | ||
Sales | $ 16,017 | $ 16,196 |
Cost of sales | 11,134 | 11,185 |
Gross margin | 4,883 | 5,011 |
Selling, general and administrative expenses | 3,132 | 3,153 |
Depreciation and amortization | 573 | 546 |
Earnings from continuing operations before interest expense and income taxes | 1,178 | 1,312 |
Net interest expense | 144 | 415 |
Earnings from continuing operations before income taxes | 1,034 | 897 |
Provision for income taxes | 357 | 283 |
Net earnings from continuing operations | 677 | 614 |
Discontinued operations, net of tax | 4 | 18 |
Net earnings | $ 681 | $ 632 |
Basic earnings per share | ||
Continuing operations (in dollars per share) | $ 1.23 | $ 1.03 |
Discontinued operations (in dollars per share) | 0.01 | 0.03 |
Net earnings per share (in dollars per share) | 1.23 | 1.06 |
Diluted earnings per share | ||
Continuing operations (in dollars per share) | 1.22 | 1.02 |
Discontinued operations (in dollars per share) | 0.01 | 0.03 |
Net earnings per share (in dollars per share) | $ 1.23 | $ 1.05 |
Weighted average common shares outstanding | ||
Basic (in shares) | 552.4 | 598.3 |
Dilutive impact of share-based awards (in shares) | 2.8 | 5.5 |
Diluted (in shares) | 555.2 | 603.8 |
Antidilutive shares (in shares) | 3 | 0 |
Dividends declared per share (in dollars per share) | $ 0.60 | $ 0.56 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 681 | $ 632 |
Other comprehensive income | ||
Pension and other benefit liabilities, net of taxes of $5 and $5 | 7 | 7 |
Currency translation adjustment and cash flow hedges, net of taxes of $1 and $1 | 5 | 5 |
Other comprehensive income | 12 | 12 |
Comprehensive income | $ 693 | $ 644 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Pension and other benefit liabilities, taxes | $ 5 | $ 5 |
Currency translation adjustment and cash flow hedges, taxes | $ 1 | $ 1 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Assets | |||
Cash and cash equivalents, including short term investments of $1,135, $1,110 and $2,931 | $ 2,680 | $ 2,512 | $ 4,036 |
Inventory | 7,986 | 8,309 | 8,459 |
Assets of discontinued operations | 26 | 69 | 354 |
Other current assets | 1,047 | 1,100 | 1,099 |
Total current assets | 11,739 | 11,990 | 13,948 |
Property and equipment | |||
Land | 6,105 | 6,106 | 6,120 |
Buildings and improvements | 27,740 | 27,611 | 27,198 |
Fixtures and equipment | 5,177 | 5,503 | 5,112 |
Computer hardware and software | 2,546 | 2,651 | 2,437 |
Construction-in-progress | 379 | 200 | 242 |
Accumulated depreciation | (17,265) | (17,413) | (16,060) |
Property and equipment, net | 24,682 | 24,658 | 25,049 |
Noncurrent assets of discontinued operations | 10 | 12 | 81 |
Other noncurrent assets | 787 | 771 | 830 |
Total assets | 37,218 | 37,431 | 39,908 |
Liabilities and shareholders’ investment | |||
Accounts payable | 6,537 | 7,252 | 6,391 |
Accrued and other current liabilities | 4,137 | 3,737 | 3,833 |
Current portion of long-term debt and other borrowings | 1,717 | 1,718 | 1,627 |
Liabilities of discontinued operations | 1 | 1 | 168 |
Total current liabilities | 12,392 | 12,708 | 12,019 |
Long-term debt and other borrowings | 11,086 | 11,031 | 12,596 |
Deferred income taxes | 869 | 861 | 841 |
Noncurrent liabilities of discontinued operations | 18 | 18 | 18 |
Other noncurrent liabilities | 1,832 | 1,860 | 1,889 |
Total noncurrent liabilities | 13,805 | 13,770 | 15,344 |
Shareholders’ investment | |||
Common stock | 46 | 46 | 49 |
Additional paid-in capital | 5,674 | 5,661 | 5,520 |
Retained earnings | 5,927 | 5,884 | 7,593 |
Accumulated other comprehensive loss | (626) | (638) | (617) |
Total shareholders’ investment | 11,021 | 10,953 | 12,545 |
Total liabilities and shareholders’ investment | $ 37,218 | $ 37,431 | $ 39,908 |
Consolidated Statements of Fin6
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Statement of Financial Position [Abstract] | |||
Cash and cash equivalents, short-term investments | $ 1,135 | $ 1,110 | $ 2,931 |
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 | 551,657,501 | 556,156,228 | 593,583,619 |
Common stock, shares outstanding | 551,657,501 | 556,156,228 | 593,583,619 |
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 | 12 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | Jan. 28, 2017 | |
Operating activities | |||
Net earnings | $ 681 | $ 632 | $ 2,737 |
Earnings from discontinued operations, net of tax | 4 | 18 | |
Net earnings from continuing operations | 677 | 614 | |
Adjustments to reconcile net earnings to cash provided by operations | |||
Depreciation and amortization | 573 | 546 | |
Share-based compensation expense | 16 | 35 | |
Deferred income taxes | 3 | 12 | |
Loss on debt extinguishment | 0 | 261 | |
Noncash (gains) / losses and other, net | (28) | (29) | |
Changes in operating accounts | |||
Inventory | 323 | 142 | |
Other assets | 22 | 99 | |
Accounts payable | (715) | (1,024) | |
Accrued and other liabilities | 384 | (403) | |
Cash provided by operating activities—continuing operations | 1,255 | 253 | |
Cash provided by / (required for) operating activities—discontinued operations | 48 | (6) | |
Cash provided by operations | 1,303 | 247 | |
Investing activities | |||
Expenditures for property and equipment | (486) | (285) | |
Proceeds from disposal of property and equipment | 13 | 3 | |
Other investments | (9) | 3 | |
Cash required for investing activities | (482) | (279) | |
Financing activities | |||
Additions to long-term debt | 0 | 1,979 | |
Reductions of long-term debt | (8) | (863) | |
Dividends paid | (332) | (336) | |
Repurchase of stock | (317) | (898) | |
Stock option exercises | 4 | 140 | |
Cash (required for) / provided by financing activities | (653) | 22 | |
Net increase / (decrease) in cash and cash equivalents | 168 | (10) | |
Cash and cash equivalents at beginning of period | 2,512 | 4,046 | 4,046 |
Cash and cash equivalents at end of period | $ 2,680 | $ 4,036 | $ 2,512 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Investment - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | Jan. 28, 2017 | |
Increase (Decrease) in Shareholders' Investment | |||
Beginning balance (in shares) | 556,156,228 | ||
Beginning balance | $ 10,953 | $ 12,957 | $ 12,957 |
Net earnings | 681 | 632 | 2,737 |
Other comprehensive loss | 12 | $ 12 | (9) |
Dividends declared | (333) | (1,359) | |
Repurchase of stock | (305) | (3,686) | |
Stock options and awards | $ 13 | $ 313 | |
Ending balance (in shares) | 551,657,501 | 593,583,619 | 556,156,228 |
Ending balance | $ 11,021 | $ 12,545 | $ 10,953 |
Common Stock | |||
Increase (Decrease) in Shareholders' Investment | |||
Beginning balance (in shares) | 556,200,000 | 602,200,000 | 602,200,000 |
Beginning balance | $ 46 | $ 50 | $ 50 |
Repurchase of stock (in shares) | (4,900,000) | (50,900,000) | |
Repurchase of stock | $ 0 | $ (4) | |
Stock options and awards (in shares) | 400,000 | 4,900,000 | |
Stock options and awards | $ 0 | $ 0 | |
Ending balance (in shares) | 551,700,000 | 556,200,000 | |
Ending balance | $ 46 | $ 46 | |
Additional Paid-in Capital | |||
Increase (Decrease) in Shareholders' Investment | |||
Beginning balance | 5,661 | 5,348 | 5,348 |
Stock options and awards | 13 | 313 | |
Ending balance | 5,674 | 5,661 | |
Retained Earnings | |||
Increase (Decrease) in Shareholders' Investment | |||
Beginning balance | 5,884 | 8,188 | 8,188 |
Net earnings | 681 | 2,737 | |
Dividends declared | (333) | (1,359) | |
Repurchase of stock | (305) | (3,682) | |
Ending balance | 5,927 | 5,884 | |
Accumulated Other Comprehensive(Loss)/Income | |||
Increase (Decrease) in Shareholders' Investment | |||
Beginning balance | (638) | $ (629) | (629) |
Other comprehensive loss | 12 | (9) | |
Ending balance | $ (626) | $ (638) |
Accounting Policies
Accounting Policies | 3 Months Ended |
Apr. 29, 2017 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies These financial statements should be read in conjunction with the financial statement disclosures in our 2016 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. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 29, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are reported in one of three levels reflecting the valuation techniques used to to determine fair value. Fair Value Measurements - Recurring Basis Fair Value at (millions) Pricing Category April 29, January 28, April 30, Assets Cash and cash equivalents Short-term investments Level 1 $ 1,135 $ 1,110 $ 2,931 Other current assets Prepaid forward contracts Level 1 37 26 35 Beneficial interest asset Level 3 9 12 16 Interest rate swaps (a) Level 2 — 1 5 Other noncurrent assets Interest rate swaps (a) Level 2 4 4 26 Beneficial interest asset Level 3 — — 9 Liabilities Other current liabilities Interest rate swaps (a) Level 2 — — 3 (a) See Note 5 for additional information on interest rate swaps. Significant Financial Instruments not Measured at Fair Value (a) (millions) April 29, 2017 January 28, 2017 April 30, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Debt (b) $ 11,717 $ 12,610 $ 11,715 $ 12,545 $ 13,280 $ 14,974 (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. |
Revenues
Revenues | 3 Months Ended |
Apr. 29, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Revenues | Revenues In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). We plan to adopt the standard in the first quarter of fiscal 2018 using the full retrospective approach. We do not expect the standard to materially affect our consolidated net earnings, financial position, or cash flows. We are evaluating the impact the standard has on our determination of whether we act as principal or agent in certain vendor arrangements where the purchase and sale of inventory is virtually simultaneous. We currently record revenue and related costs gross, with approximately 3 percent of consolidated sales made under such arrangements. Due to the varying terms of these arrangements, the presentation required under the standard will depend on contract-specific terms and, in some instances, may result in net presentation of these amounts. Any change to net presentation would not impact gross margin or earnings. We are also evaluating the presentation of certain ancillary income streams, including credit card profit sharing income. |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 3 Months Ended |
Apr. 29, 2017 | |
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 the three months ended April 29, 2017 and April 30, 2016. 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 three months ended April 30, 2016, we used cash on hand and proceeds from these issuances to repurchase $565 million of debt before its maturity at a market value of $820 million . We recognized a loss on early retirement of approximately $261 million , which was recorded in net interest expense in our Consolidated Statements of Operations. In May 2016, we used cash on hand and proceeds from the April issuances to repurchase an additional $824 million of debt before its maturity at a market value of $981 million . We recognized an additional loss on early retirement of approximately $160 million in the second quarter of 2016. The $824 million of debt repurchased during the second quarter of 2016 was classified as current in our Consolidated Statements of Financial Position at April 30, 2016. In May 2017, we used cash on hand to repay $598 million of debt at its maturity. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Apr. 29, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Our derivative instruments primarily consist of interest rate swaps, which we use 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 3 for a description of the fair value measurement of our derivative instruments and their classification on the Consolidated Statements of Financial Position. As of April 29, 2017 and April 30, 2016 , interest rate swaps with notional amounts totaling $1,000 million and $1,250 million , respectively, were designated fair value hedges. No ineffectiveness was recognized during the three months ended April 29, 2017 or April 30, 2016 . As of April 29, 2017 , one interest rate swap with a notional amount of $250 million was not designated a fair value hedge because it was de-designated concurrent with the repurchase of debt during the first half of 2016. As of April 30, 2016 , two interest rate swaps, each with a notional amount of $500 million , were not designated fair value hedges. These two interest rate swaps had largely offsetting terms and matured during the second quarter of 2016. During the three months ended April 29, 2017 and April 30, 2016, we recorded income of $4 million and $8 million , respectively, within net interest expense on our Consolidated Statements of Operations related to periodic payments, valuation adjustments, and amortization of gains or losses on our interest rate swaps. |
Leases
Leases | 3 Months Ended |
Apr. 29, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. We must adopt the standard no later than the first quarter of 2019, which begins on February 3, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We plan to adopt the standard in the first quarter of 2018. We expect to elect the package of practical expedients, including the use of hindsight to determine the lease term. While lease classification will remain unchanged, hindsight may result in different accounting lease terms for certain leases and affect the timing of related depreciation, interest, and rent expense. We do not expect to apply the recognition requirements to short-term leases and will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. While we are continuing to assess the standard, we anticipate this standard will have a material impact on our Consolidated Statements of Financial Position, but will not materially affect our consolidated net earnings. We believe the addition of retail-store and office-space operating leases to our balance sheet will represent the most significant change. We also expect a reduction to the amount of finance lease assets and liabilities on our Consolidated Statements of Financial Position, primarily due to our use of hindsight to reduce certain lease terms. We do not believe the new standard will have a notable impact on our liquidity. The standard will have no impact on our debt-covenant compliance under our current agreements. |
Share Repurchase
Share Repurchase | 3 Months Ended |
Apr. 29, 2017 | |
Equity [Abstract] | |
Share Repurchase | Share Repurchase Three Months Ended (millions, except per share data) April 29, April 30, Total number of shares purchased 4.9 11.4 Average price paid per share $ 61.68 $ 78.37 Total investment $ 305 $ 893 |
Pension Benefits
Pension Benefits | 3 Months Ended |
Apr. 29, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension Benefits | Pension Benefits We provide pension plan benefits to certain eligible team members. Net Pension Benefits Expense Three Months Ended (millions) April 29, April 30, Service cost $ 21 $ 21 Interest cost 34 34 Expected return on assets (61 ) (64 ) Amortization of losses 15 12 Amortization of prior service cost (3 ) (3 ) Settlement charges — — Total $ 6 $ — In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715) , which requires employers to disaggregate and present separately the current service cost component from the other components of net benefit cost within the Consolidated Statement of Operations. We plan to adopt the standard in the first quarter of fiscal 2018. We are evaluating the presentation of the other components of net benefit cost. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) / Income | 3 Months Ended |
Apr. 29, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive (Loss) / Income | Accumulated Other Comprehensive (Loss) / Income (millions) Cash Flow Hedges Currency Translation Adjustment Pension and Other Benefits Total January 28, 2017 $ (16 ) $ (21 ) $ (601 ) $ (638 ) Other comprehensive income before reclassifications — 4 — 4 Amounts reclassified from AOCI 1 (a) — 7 (b) 8 April 29, 2017 $ (15 ) $ (17 ) $ (594 ) $ (626 ) (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 $5 million of taxes. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Apr. 29, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our segment measure of profit (segment earnings before interest expense and income taxes) 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 or through our digital channels. Business Segment Results Three Months Ended (millions) April 29, April 30, Sales $ 16,017 $ 16,196 Cost of sales 11,134 11,185 Gross margin 4,883 5,011 Selling, general, and administrative expenses (b) 3,132 3,142 Depreciation and amortization 573 546 Segment earnings before interest expense and income taxes 1,178 1,323 Pharmacy Transaction-related costs (a)(b) — (11 ) Earnings from continuing operations before interest expense and income taxes 1,178 1,312 Net interest expense 144 415 Earnings from continuing operations before income taxes $ 1,034 $ 897 Note: Amounts may not foot due to rounding. (a) For the three months ended April 30, 2016, represents items related to the December 2015 sale of our former pharmacy and clinic businesses to CVS (Pharmacy Transaction). (b) The sum of segment SG&A expenses and Pharmacy Transaction-related costs equal consolidated SG&A expenses. Reconciliation of Segment Assets to Total Assets (millions) April 29, January 28, April 30, Segment assets $ 37,182 $ 37,350 $ 39,457 Assets of discontinued operations 36 81 435 Unallocated assets (a) — — 16 Total assets $ 37,218 $ 37,431 $ 39,908 (a) Represents the insurance receivable related to the 2013 data breach. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Apr. 29, 2017 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). We plan to adopt the standard in the first quarter of fiscal 2018 using the full retrospective approach. We do not expect the standard to materially affect our consolidated net earnings, financial position, or cash flows. We are evaluating the impact the standard has on our determination of whether we act as principal or agent in certain vendor arrangements where the purchase and sale of inventory is virtually simultaneous. We currently record revenue and related costs gross, with approximately 3 percent of consolidated sales made under such arrangements. Due to the varying terms of these arrangements, the presentation required under the standard will depend on contract-specific terms and, in some instances, may result in net presentation of these amounts. Any change to net presentation would not impact gross margin or earnings. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. We must adopt the standard no later than the first quarter of 2019, which begins on February 3, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We plan to adopt the standard in the first quarter of 2018. We expect to elect the package of practical expedients, including the use of hindsight to determine the lease term. While lease classification will remain unchanged, hindsight may result in different accounting lease terms for certain leases and affect the timing of related depreciation, interest, and rent expense. We do not expect to apply the recognition requirements to short-term leases and will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. While we are continuing to assess the standard, we anticipate this standard will have a material impact on our Consolidated Statements of Financial Position, but will not materially affect our consolidated net earnings. We believe the addition of retail-store and office-space operating leases to our balance sheet will represent the most significant change. We also expect a reduction to the amount of finance lease assets and liabilities on our Consolidated Statements of Financial Position, primarily due to our use of hindsight to reduce certain lease terms. We do not believe the new standard will have a notable impact on our liquidity. The standard will have no impact on our debt-covenant compliance under our current agreements. In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715) , which requires employers to disaggregate and present separately the current service cost component from the other components of net benefit cost within the Consolidated Statement of Operations. We plan to adopt the standard in the first quarter of fiscal 2018. We are evaluating the presentation of the other components of net benefit cost. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements - Recurring Basis | Fair value measurements are reported in one of three levels reflecting the valuation techniques used to to determine fair value. Fair Value Measurements - Recurring Basis Fair Value at (millions) Pricing Category April 29, January 28, April 30, Assets Cash and cash equivalents Short-term investments Level 1 $ 1,135 $ 1,110 $ 2,931 Other current assets Prepaid forward contracts Level 1 37 26 35 Beneficial interest asset Level 3 9 12 16 Interest rate swaps (a) Level 2 — 1 5 Other noncurrent assets Interest rate swaps (a) Level 2 4 4 26 Beneficial interest asset Level 3 — — 9 Liabilities Other current liabilities Interest rate swaps (a) Level 2 — — 3 (a) See Note 5 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) April 29, 2017 January 28, 2017 April 30, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Debt (b) $ 11,717 $ 12,610 $ 11,715 $ 12,545 $ 13,280 $ 14,974 (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. |
Share Repurchase (Tables)
Share Repurchase (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
Equity [Abstract] | |
Schedule of Share Repurchase (excluding ASR) | Three Months Ended (millions, except per share data) April 29, April 30, Total number of shares purchased 4.9 11.4 Average price paid per share $ 61.68 $ 78.37 Total investment $ 305 $ 893 |
Pension Benefits (Tables)
Pension Benefits (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
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 (millions) April 29, April 30, Service cost $ 21 $ 21 Interest cost 34 34 Expected return on assets (61 ) (64 ) Amortization of losses 15 12 Amortization of prior service cost (3 ) (3 ) Settlement charges — — Total $ 6 $ — |
Accumulated Other Comprehensi23
Accumulated Other Comprehensive (Loss) / Income (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
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 28, 2017 $ (16 ) $ (21 ) $ (601 ) $ (638 ) Other comprehensive income before reclassifications — 4 — 4 Amounts reclassified from AOCI 1 (a) — 7 (b) 8 April 29, 2017 $ (15 ) $ (17 ) $ (594 ) $ (626 ) (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 $5 million of taxes. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 29, 2017 | |
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 or through our digital channels. Business Segment Results Three Months Ended (millions) April 29, April 30, Sales $ 16,017 $ 16,196 Cost of sales 11,134 11,185 Gross margin 4,883 5,011 Selling, general, and administrative expenses (b) 3,132 3,142 Depreciation and amortization 573 546 Segment earnings before interest expense and income taxes 1,178 1,323 Pharmacy Transaction-related costs (a)(b) — (11 ) Earnings from continuing operations before interest expense and income taxes 1,178 1,312 Net interest expense 144 415 Earnings from continuing operations before income taxes $ 1,034 $ 897 Note: Amounts may not foot due to rounding. (a) For the three months ended April 30, 2016, represents items related to the December 2015 sale of our former pharmacy and clinic businesses to CVS (Pharmacy Transaction). (b) The sum of segment SG&A expenses and Pharmacy Transaction-related costs equal consolidated SG&A expenses. Reconciliation of Segment Assets to Total Assets (millions) April 29, January 28, April 30, Segment assets $ 37,182 $ 37,350 $ 39,457 Assets of discontinued operations 36 81 435 Unallocated assets (a) — — 16 Total assets $ 37,218 $ 37,431 $ 39,908 (a) Represents the insurance receivable related to the 2013 data breach. |
Revenues (Details)
Revenues (Details) | 3 Months Ended |
Apr. 29, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Percentage of sales accounted for as vendor sales to customers | 3.00% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Millions | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Cash and cash equivalents | |||
Short-term investments | $ 1,135 | $ 1,110 | $ 2,931 |
Other current assets | |||
Other current assets | 1,047 | 1,100 | 1,099 |
Other noncurrent assets | |||
Other noncurrent assets | 787 | 771 | 830 |
Fair value measured on recurring basis | Level 1 | Prepaid forward contracts | |||
Other current assets | |||
Other current assets | 37 | 26 | 35 |
Fair value measured on recurring basis | Level 1 | Short-term investments | |||
Cash and cash equivalents | |||
Short-term investments | 1,135 | 1,110 | 2,931 |
Fair value measured on recurring basis | Level 2 | Interest rate swaps | |||
Other current assets | |||
Other current assets | 0 | 1 | 5 |
Other noncurrent assets | |||
Other noncurrent assets | 4 | 4 | 26 |
Other current liabilities | |||
Interest rate swaps | 0 | 0 | 3 |
Fair value measured on recurring basis | Level 3 | Beneficial interest asset | |||
Other current assets | |||
Other current assets | 9 | 12 | 16 |
Other noncurrent assets | |||
Other noncurrent assets | $ 0 | $ 0 | $ 9 |
Fair Value Measurements - Sch27
Fair Value Measurements - Schedule of Significant Financial Instruments not Measured at Fair Value (Details) - USD ($) $ in Millions | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Carrying Amount | |||
Financial Instruments, Balance Sheet Groupings | |||
Debt | $ 11,717 | $ 11,715 | $ 13,280 |
Fair Value | |||
Financial Instruments, Balance Sheet Groupings | |||
Debt | $ 12,610 | $ 12,545 | $ 14,974 |
Notes Payable and Long-Term D28
Notes Payable and Long-Term Debt (Details) - USD ($) | May 01, 2017 | Jul. 30, 2016 | Apr. 30, 2016 | Apr. 29, 2017 | May 28, 2016 |
Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Repurchased amount | $ 824,000,000 | $ 565,000,000 | $ 824,000,000 | ||
Market value | 820,000,000 | $ 981,000,000 | |||
Loss on early retirement | $ 160,000,000 | 261,000,000 | |||
Unsecured Debt | 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 Debt | 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% | ||||
Commercial Paper | |||||
Debt Instrument [Line Items] | |||||
Amount outstanding | $ 0 | $ 0 | |||
Subsequent Event | Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Repayments of Debt | $ 598,000,000 |
Derivative Financial Instrume29
Derivative Financial Instruments - Narrative (Details) - Interest Rate Swaps | 3 Months Ended | |
Apr. 29, 2017USD ($)instrument | Apr. 30, 2016USD ($)instrument | |
Derivative Contracts - Effect on Results of Operations (millions) | ||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (4,000,000) | $ (8,000,000) |
Designated as Hedging Instrument | ||
Derivative Contracts - Effect on Results of Operations (millions) | ||
Notional amount | 1,000,000,000 | 1,250,000,000 |
Amount of ineffectiveness recognized | 0 | 0 |
Not Designated as Hedging Instrument | ||
Derivative Contracts - Effect on Results of Operations (millions) | ||
Notional amount | $ 250,000,000 | $ 1,000,000,000 |
Number of derivative instruments | instrument | 1 | 2 |
Share Repurchase - Schedule of
Share Repurchase - Schedule of Share Repurchases (excluding ASR) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Equity [Abstract] | ||
Total number of shares purchased | 4.9 | 11.4 |
Average price paid per share (in dollars per share) | $ 61.68 | $ 78.37 |
Total investment | $ 305 | $ 893 |
Pension Benefits - Schedule of
Pension Benefits - Schedule of Net Pension and Postretirement Health Care Benefits Expense (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Net Pension Benefits Expense | ||
Service cost | $ 21 | $ 21 |
Interest cost | 34 | 34 |
Expected return on assets | (61) | (64) |
Amortization of losses | 15 | 12 |
Amortization of prior service cost | (3) | (3) |
Settlement charges | 0 | 0 |
Total | $ 6 | $ 0 |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive (Loss) / Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 10,953 | $ 12,957 |
Ending balance | 11,021 | 12,545 |
Net amount of taxes | 357 | 283 |
Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (16) | |
Other comprehensive income before reclassifications | 0 | |
Amounts reclassified from AOCI | 1 | |
Ending balance | (15) | |
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 | (21) | |
Other comprehensive income before reclassifications | 4 | |
Amounts reclassified from AOCI | 0 | |
Ending balance | (17) | |
Pension and Other Benefits | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (601) | |
Other comprehensive income before reclassifications | 0 | |
Amounts reclassified from AOCI | 7 | |
Ending balance | (594) | |
Pension and Other Benefits | Amount reclassified from other comprehensive income | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Net amount of taxes | 5 | |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (638) | $ (629) |
Other comprehensive income before reclassifications | 4 | |
Amounts reclassified from AOCI | 8 | |
Ending balance | $ (626) |
Segment Reporting - Business Se
Segment Reporting - Business Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 29, 2017 | Apr. 30, 2016 | |
Segment Reporting [Abstract] | ||
Sales | $ 16,017 | $ 16,196 |
Cost of sales | 11,134 | 11,185 |
Gross margin | 4,883 | 5,011 |
Selling, general and administrative expenses | 3,132 | 3,142 |
Depreciation and amortization | 573 | 546 |
Segment profit | 1,178 | 1,323 |
Pharmacy transaction related costs | 0 | (11) |
Earnings from continuing operations before interest expense and income taxes | 1,178 | 1,312 |
Net interest expense | 144 | 415 |
Earnings from continuing operations before income taxes | $ 1,034 | $ 897 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Assets to Total Assets (Details) - USD ($) $ in Millions | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 |
Segment Reporting Information 2 [Line Items] | |||
Total assets | $ 37,218 | $ 37,431 | $ 39,908 |
Assets of discontinued operations | |||
Segment Reporting Information 2 [Line Items] | |||
Total assets | 36 | 81 | 435 |
Segment assets | |||
Segment Reporting Information 2 [Line Items] | |||
Total assets | 37,182 | 37,350 | 39,457 |
Unallocated assets | |||
Segment Reporting Information 2 [Line Items] | |||
Total assets | $ 0 | $ 0 | $ 16 |