Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TARGET CORP | a10-15976_18k.htm |
Exhibit 99
FOR IMMEDIATE RELEASE
TARGET CORPORATION ANNOUNCES SECOND QUARTER EARNINGS
MINNEAPOLIS, August 18, 2010 — Target Corporation (NYSE:TGT) today reported net earnings of $679 million for the quarter ended July 31, 2010, compared with $594 million in the quarter ended August 1, 2009. Earnings per share in the second quarter increased 17.0 percent to 92 cents from 79 cents in the same period a year ago. All earnings per share figures refer to diluted earnings per share.
“Our retail segment generated strong profitability, overcoming softer-than-expected sales,” said Gregg Steinhafel, chairman, president and chief executive officer of Target Corporation. “Growth in guest traffic and apparel sales remained robust, and teams across the company continued to exercise thoughtful control of expenses. Our credit card segment also enjoyed very strong results, as disciplined underwriting, superb execution and improving risk trends caused a sharp reduction in bad debt expense compared with last year. Regardless of the pace of recovery, we are well-positioned to continue to gain profitable market share.”
Retail Segment Results
Sales increased 3.8 percent in the second quarter to $15.1 billion in 2010 from $14.6 billion in 2009, due to the contribution from new stores combined with a 1.7 percent increase in comparable-store sales. Retail segment earnings before interest expense and income taxes (EBIT) were $1,096 million in the second quarter of 2010, an increase of 3.1 percent from $1,064 million in 2009.
Second quarter EBITDA and EBIT margin rates were 10.5 percent and 7.2 percent, respectively, compared with 10.6 percent and 7.3 percent in 2009. These changes were the result of slight changes in the gross margin rate, selling, general and administrative (SG&A) expense rate, and the depreciation and amortization (D&A) expense rate.
Second quarter gross margin rate was 32.0 percent, up from 31.9 percent in 2009. The impact of sales mix on gross margin rate was essentially neutral, as sales increased at a similar pace in both higher-margin and lower-margin categories.
Second quarter SG&A expense rate was 21.5 percent, up from 21.4 percent in 2009.
Credit Card Segment Results
Second quarter segment profit increased to $149 million from $63 million a year ago, as bad debt expense declined 54.5 percent from $303 million in second quarter 2009 to $138 million this year.
Second quarter average receivables decreased 15.1 percent to $7.1 billion in 2010 from $8.4 billion in 2009. Average receivables directly funded by Target increased in the second quarter to $3.0 billion from $2.9 billion in 2009.
Annualized segment pre-tax return on invested capital was 20.2 percent in the second quarter 2010, compared with 8.8 percent a year ago.
—more —
Interest Expense and Taxes
Net interest expense for the quarter decreased $9 million from second quarter 2009, driven by lower average debt balances partially offset by a higher average portfolio interest rate.
The company’s effective income tax rate for the second quarter was 37.2 percent in 2010, down from 37.9 percent in 2009.
Share Repurchase
In the second quarter, under the share repurchase program originally announced in November 2007 and resumed in January 2010, the company repurchased 17.5 million shares of its common stock at an average price of $51.72, for a total investment of $907 million.
Program-to-date through the end of the second quarter, the company has acquired 128.6 million shares of its common stock at an average price per share of $51.46, reflecting a total investment of $6.6 billion.
Miscellaneous
Target Corporation will webcast its second quarter earnings conference call at 9:30am CDT today. Investors and the media are invited to listen to the call through the company’s website at www.target.com/investors (click on “events + presentations” and then “archives + webcasts”). A telephone replay of the call will be available beginning at approximately 11:30am CDT today through the end of business on August 20, 2010. The replay number is (800) 642-1687 (passcode: 49644107).
Target Corporation’s retail segment includes large general merchandise and food discount stores and Target.com, a fully integrated on-line business. In addition, the company operates a credit card segment that offers branded proprietary credit card products. The company currently operates 1,743 Target stores in 49 states.
Target Corporation news releases are available at www.target.com.
###
(Tables Follow)
|
Contacts: |
John Hulbert (Investors) |
Eric Hausman (Financial Media) |
|
|
(612) 761-6627 |
(612) 761-2054 |
TARGET CORPORATION
Consolidated Statements of Operations
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
||||||||
|
|
|
July 31, |
|
August 1, |
|
|
|
July 31, |
|
August 1, |
|
|
|
||||
|
(millions, except per share data) |
|
2010 |
|
2009 |
|
Change |
|
2010 |
|
2009 |
|
Change |
|
||||
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
||||
|
Sales |
|
$ |
15,126 |
|
$ |
14,567 |
|
3.8 |
% |
$ |
30,283 |
|
$ |
28,928 |
|
4.7 |
% |
|
Credit card revenues |
|
406 |
|
500 |
|
(18.8 |
) |
841 |
|
972 |
|
(13.6 |
) |
||||
|
Total revenues |
|
15,532 |
|
15,067 |
|
3.1 |
|
31,124 |
|
29,900 |
|
4.1 |
|
||||
|
Cost of sales |
|
10,293 |
|
9,914 |
|
3.8 |
|
20,705 |
|
19,851 |
|
4.3 |
|
||||
|
Selling, general and administrative expenses |
|
3,263 |
|
3,136 |
|
4.0 |
|
6,405 |
|
6,150 |
|
4.1 |
|
||||
|
Credit card expenses |
|
214 |
|
388 |
|
(44.8 |
) |
494 |
|
772 |
|
(36.0 |
) |
||||
|
Depreciation and amortization |
|
496 |
|
478 |
|
3.7 |
|
1,012 |
|
950 |
|
6.5 |
|
||||
|
Earnings before interest expense and income taxes |
|
1,266 |
|
1,151 |
|
10.0 |
|
2,508 |
|
2,177 |
|
15.2 |
|
||||
|
Net interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Nonrecourse debt collateralized by credit card receivables |
|
21 |
|
24 |
|
(14.0 |
) |
44 |
|
51 |
|
(13.3 |
) |
||||
|
Other interest expense |
|
165 |
|
171 |
|
(3.5 |
) |
330 |
|
348 |
|
(5.3 |
) |
||||
|
Interest income |
|
(1 |
) |
(1 |
) |
(50.4 |
) |
(1 |
) |
(2 |
) |
(53.6 |
) |
||||
|
Net interest expense |
|
185 |
|
194 |
|
(4.6 |
) |
373 |
|
397 |
|
(6.0 |
) |
||||
|
Earnings before income taxes |
|
1,081 |
|
957 |
|
13.0 |
|
2,135 |
|
1,780 |
|
19.9 |
|
||||
|
Provision for income taxes |
|
402 |
|
363 |
|
10.9 |
|
785 |
|
664 |
|
18.2 |
|
||||
|
Net earnings |
|
$ |
679 |
|
$ |
594 |
|
14.3 |
% |
$ |
1,350 |
|
$ |
1,116 |
|
21.0 |
% |
|
Basic earnings per share |
|
$ |
0.93 |
|
$ |
0.79 |
|
17.6 |
% |
$ |
1.84 |
|
$ |
1.48 |
|
23.7 |
% |
|
Diluted earnings per share |
|
$ |
0.92 |
|
$ |
0.79 |
|
17.0 |
% |
$ |
1.82 |
|
$ |
1.48 |
|
23.1 |
% |
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
731.1 |
|
752.0 |
|
|
|
735.5 |
|
752.1 |
|
|
|
||||
|
Diluted |
|
736.6 |
|
754.4 |
|
|
|
741.1 |
|
754.2 |
|
|
|
||||
Subject to reclassification
TARGET CORPORATION
Consolidated Statements of Financial Position
|
|
|
July 31, |
|
January 30, |
|
August 1, |
|
|||
|
(millions) |
|
2010 |
|
2010 |
|
2009 |
|
|||
|
|
|
(unaudited) |
|
|
|
(unaudited) |
|
|||
|
Assets |
|
|
|
|
|
|
|
|||
|
Cash and cash equivalents, including marketable securities of $972, $1,617 and $385 |
|
$ |
1,540 |
|
$ |
2,200 |
|
$ |
957 |
|
|
Credit card receivables, net of allowance of $851, $1,016 and $1,004 |
|
6,137 |
|
6,966 |
|
7,288 |
|
|||
|
Inventory |
|
7,728 |
|
7,179 |
|
7,528 |
|
|||
|
Other current assets |
|
1,840 |
|
2,079 |
|
1,910 |
|
|||
|
Total current assets |
|
17,245 |
|
18,424 |
|
17,683 |
|
|||
|
Property and equipment |
|
|
|
|
|
|
|
|||
|
Land |
|
5,845 |
|
5,793 |
|
5,726 |
|
|||
|
Buildings and improvements |
|
22,568 |
|
22,152 |
|
21,530 |
|
|||
|
Fixtures and equipment |
|
4,602 |
|
4,743 |
|
4,481 |
|
|||
|
Computer hardware and software |
|
2,432 |
|
2,575 |
|
2,540 |
|
|||
|
Construction-in-progress |
|
772 |
|
502 |
|
978 |
|
|||
|
Accumulated depreciation |
|
(10,818 |
) |
(10,485 |
) |
(9,543 |
) |
|||
|
Property and equipment, net |
|
25,401 |
|
25,280 |
|
25,712 |
|
|||
|
Other noncurrent assets |
|
1,009 |
|
829 |
|
838 |
|
|||
|
Total assets |
|
$ |
43,655 |
|
$ |
44,533 |
|
$ |
44,233 |
|
|
Liabilities and shareholders’ investment |
|
|
|
|
|
|
|
|||
|
Accounts payable |
|
$ |
6,228 |
|
$ |
6,511 |
|
$ |
6,233 |
|
|
Accrued and other current liabilities |
|
3,057 |
|
3,120 |
|
3,004 |
|
|||
|
Unsecured debt and other borrowings |
|
782 |
|
796 |
|
517 |
|
|||
|
Nonrecourse debt collateralized by credit card receivables |
|
33 |
|
900 |
|
56 |
|
|||
|
Total current liabilities |
|
10,100 |
|
11,327 |
|
9,810 |
|
|||
|
Unsecured debt and other borrowings |
|
11,693 |
|
10,643 |
|
11,983 |
|
|||
|
Nonrecourse debt collateralized by credit card receivables |
|
4,044 |
|
4,475 |
|
5,458 |
|
|||
|
Deferred income taxes |
|
740 |
|
835 |
|
494 |
|
|||
|
Other noncurrent liabilities |
|
1,810 |
|
1,906 |
|
1,886 |
|
|||
|
Total noncurrent liabilities |
|
18,287 |
|
17,859 |
|
19,821 |
|
|||
|
Shareholders’ investment |
|
|
|
|
|
|
|
|||
|
Common stock |
|
60 |
|
62 |
|
63 |
|
|||
|
Additional paid-in capital |
|
3,085 |
|
2,919 |
|
2,822 |
|
|||
|
Retained earnings |
|
12,690 |
|
12,947 |
|
12,266 |
|
|||
|
Accumulated other comprehensive loss |
|
(567 |
) |
(581 |
) |
(549 |
) |
|||
|
Total shareholders’ investment |
|
15,268 |
|
15,347 |
|
14,602 |
|
|||
|
Total liabilities and shareholders’ investment |
|
$ |
43,655 |
|
$ |
44,533 |
|
$ |
44,233 |
|
|
Common shares outstanding |
|
722.6 |
|
744.6 |
|
751.9 |
|
|||
Subject to reclassification
TARGET CORPORATION
Consolidated Statements of Cash Flows
|
|
|
Six Months Ended |
|
||||
|
|
|
July 31, |
|
August 1, |
|
||
|
(millions) |
|
2010 |
|
2009 |
|
||
|
|
|
(unaudited) |
|
(unaudited) |
|
||
|
Operating activities |
|
|
|
|
|
||
|
Net earnings |
|
$ |
1,350 |
|
$ |
1,116 |
|
|
Reconciliation to cash flow |
|
|
|
|
|
||
|
Depreciation and amortization |
|
1,012 |
|
950 |
|
||
|
Share-based compensation expense |
|
52 |
|
48 |
|
||
|
Deferred income taxes |
|
148 |
|
64 |
|
||
|
Bad debt expense |
|
335 |
|
600 |
|
||
|
Loss/impairment of property and equipment, net |
|
10 |
|
74 |
|
||
|
Other non-cash items affecting earnings |
|
75 |
|
28 |
|
||
|
Changes in operating accounts providing/(requiring) cash |
|
|
|
|
|
||
|
Accounts receivable originated at Target |
|
241 |
|
154 |
|
||
|
Inventory |
|
(549 |
) |
(823 |
) |
||
|
Other current assets |
|
(76 |
) |
(59 |
) |
||
|
Other noncurrent assets |
|
(106 |
) |
19 |
|
||
|
Accounts payable |
|
(283 |
) |
(103 |
) |
||
|
Accrued and other current liabilities |
|
(247 |
) |
30 |
|
||
|
Other noncurrent liabilities |
|
(134 |
) |
(47 |
) |
||
|
Cash flow provided by operations |
|
1,828 |
|
2,051 |
|
||
|
Investing activities |
|
|
|
|
|
||
|
Expenditures for property and equipment |
|
(991 |
) |
(1,042 |
) |
||
|
Proceeds from disposal of property and equipment |
|
32 |
|
24 |
|
||
|
Change in accounts receivable originated at third parties |
|
254 |
|
42 |
|
||
|
Other investments |
|
(20 |
) |
4 |
|
||
|
Cash flow required for investing activities |
|
(725 |
) |
(972 |
) |
||
|
Financing activities |
|
|
|
|
|
||
|
Reductions of short-term notes payable |
|
|
|
— |
|
||
|
Additions to long-term debt |
|
997 |
|
— |
|
||
|
Reductions of long-term debt |
|
(1,339 |
) |
(754 |
) |
||
|
Dividends paid |
|
(252 |
) |
(241 |
) |
||
|
Repurchase of stock |
|
(1,285 |
) |
— |
|
||
|
Stock option exercises and related tax benefit |
|
116 |
|
9 |
|
||
|
Cash flow provided by/(required for) financing activities |
|
(1,763 |
) |
(986 |
) |
||
|
Net increase/(decrease) in cash and cash equivalents |
|
(660 |
) |
93 |
|
||
|
Cash and cash equivalents at beginning of period |
|
2,200 |
|
864 |
|
||
|
Cash and cash equivalents at end of period |
|
$ |
1,540 |
|
$ |
957 |
|
Subject to reclassification
TARGET CORPORATION
Retail Segment
Retail Segment Results
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
||||||||
|
|
|
July 31, |
|
August 1, |
|
|
|
July 31, |
|
August 1, |
|
|
|
||||
|
(millions) (unaudited) |
|
2010 |
|
2009 |
|
Change |
|
2010 |
|
2009 |
|
Change |
|
||||
|
Sales |
|
$ |
15,126 |
|
$ |
14,567 |
|
3.8 |
% |
$ |
30,283 |
|
$ |
28,928 |
|
4.7 |
% |
|
Cost of sales |
|
10,293 |
|
9,914 |
|
3.8 |
|
20,705 |
|
19,851 |
|
4.3 |
|
||||
|
Gross margin |
|
4,833 |
|
4,653 |
|
3.9 |
|
9,578 |
|
9,077 |
|
5.5 |
|
||||
|
SG&A expenses(a) |
|
3,246 |
|
3,115 |
|
4.2 |
|
6,370 |
|
6,109 |
|
4.3 |
|
||||
|
EBITDA |
|
1,587 |
|
1,538 |
|
3.2 |
|
3,208 |
|
2,968 |
|
8.1 |
|
||||
|
Depreciation and amortization |
|
491 |
|
474 |
|
3.5 |
|
1,003 |
|
942 |
|
6.4 |
|
||||
|
EBIT |
|
$ |
1,096 |
|
$ |
1,064 |
|
3.1 |
% |
$ |
2,205 |
|
$ |
2,026 |
|
8.9 |
% |
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 $17 million and $34 million for the three and six months ended July 31, 2010, respectively, and $21 million and $41 million for the three and six months ended August 1, 2009, respectively, are recorded as a reduction to SG&A expenses within the Retail Segment.
Retail Segment Rate Analysis
|
|
|
Three Months Ended |
|
Six Months Ended |
|
||||
|
|
|
July 31, |
|
August 1, |
|
July 31, |
|
August 1, |
|
|
(unaudited) |
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
Gross margin rate |
|
32.0 |
% |
31.9 |
% |
31.6 |
% |
31.4 |
% |
|
SG&A expense rate |
|
21.5 |
% |
21.4 |
% |
21.0 |
% |
21.1 |
% |
|
EBITDA margin rate |
|
10.5 |
% |
10.6 |
% |
10.6 |
% |
10.3 |
% |
|
Depreciation and amortization expense rate |
|
3.2 |
% |
3.3 |
% |
3.3 |
% |
3.3 |
% |
|
EBIT margin rate |
|
7.2 |
% |
7.3 |
% |
7.3 |
% |
7.0 |
% |
Retail Segment rate analysis metrics are computed by dividing the applicable amount by sales.
Comparable-Store Sales
|
|
|
Three Months Ended |
|
Six Months Ended |
|
||||
|
|
|
July 31, |
|
August 1, |
|
July 31, |
|
August 1, |
|
|
(unaudited) |
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
Comparable-store sales |
|
1.7 |
% |
(6.2 |
)% |
2.2 |
% |
(5.0 |
)% |
|
Drivers of changes in comparable-store sales: |
|
|
|
|
|
|
|
|
|
|
Number of transactions |
|
2.4 |
% |
(2.6 |
)% |
2.3 |
% |
(1.9 |
)% |
|
Average transaction amount |
|
(0.8 |
)% |
(3.7 |
)% |
(0.1 |
)% |
(3.1 |
)% |
|
Units per transaction |
|
2.0 |
% |
(2.6 |
)% |
1.6 |
% |
(2.9 |
)% |
|
Selling price per unit |
|
(2.7 |
)% |
(1.2 |
)% |
(1.7 |
)% |
(0.2 |
)% |
The comparable-store sales increases or decreases above are calculated by comparing sales in fiscal year periods with comparable prior year periods of equivalent length.
Number of Stores and Retail Square Feet
|
|
|
Number of Stores |
|
Retail Square Feet(a) |
|
||||||||
|
|
|
July 31, |
|
January 30, |
|
August 1, |
|
July 31, |
|
January 30, |
|
August 1, |
|
|
(unaudited) |
|
2010 |
|
2010 |
|
2009 |
|
2010 |
|
2010 |
|
2009 |
|
|
Target general merchandise stores |
|
1,492 |
|
1,489 |
|
1,472 |
|
187,971 |
|
187,449 |
|
184,663 |
|
|
SuperTarget stores |
|
251 |
|
251 |
|
247 |
|
44,504 |
|
44,492 |
|
43,739 |
|
|
Total |
|
1,743 |
|
1,740 |
|
1,719 |
|
232,475 |
|
231,941 |
|
228,402 |
|
(a) In thousands; reflects total square feet, less office, distribution center and vacant space.
Subject to reclassification
TARGET CORPORATION
Credit Card Segment
Credit Card Segment Results
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Six Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
|
July 31, 2010 |
|
August 1, 2009 |
|
July 31, 2010 |
|
August 1, 2009 |
|
||||||||||||
|
|
|
Amount |
|
Annualized |
|
Amount |
|
Annualized |
|
Amount |
|
Annualized |
|
Amount |
|
Annualized |
|
||||
|
(millions) (unaudited) |
|
(in millions) |
|
Rate(d) |
|
(in millions) |
|
Rate(d) |
|
(in millions) |
|
Rate(d) |
|
(in millions) |
|
Rate(d) |
|
||||
|
Finance charge revenue |
|
$ |
324 |
|
18.3 |
% |
$ |
377 |
|
18.1 |
% |
$ |
674 |
|
18.4 |
% |
$ |
732 |
|
17.2 |
% |
|
Late fees and other revenue |
|
54 |
|
3.0 |
|
91 |
|
4.3 |
|
113 |
|
3.1 |
|
178 |
|
4.2 |
|
||||
|
Third party merchant fees |
|
28 |
|
1.6 |
|
32 |
|
1.5 |
|
54 |
|
1.5 |
|
62 |
|
1.5 |
|
||||
|
Total revenues |
|
406 |
|
22.9 |
|
500 |
|
23.9 |
|
841 |
|
23.0 |
|
972 |
|
22.8 |
|
||||
|
Bad debt expense |
|
138 |
|
7.8 |
|
303 |
|
14.5 |
|
335 |
|
9.2 |
|
600 |
|
14.1 |
|
||||
|
Operations and marketing expenses(a) |
|
93 |
|
5.2 |
|
106 |
|
5.0 |
|
193 |
|
5.3 |
|
213 |
|
5.0 |
|
||||
|
Depreciation and amortization |
|
5 |
|
0.3 |
|
4 |
|
0.2 |
|
9 |
|
0.2 |
|
7 |
|
0.2 |
|
||||
|
Total expenses |
|
236 |
|
13.3 |
|
413 |
|
19.7 |
|
537 |
|
14.7 |
|
820 |
|
19.2 |
|
||||
|
EBIT |
|
170 |
|
9.6 |
|
87 |
|
4.2 |
|
304 |
|
8.3 |
|
152 |
|
3.6 |
|
||||
|
Interest expense on nonrecourse debt collateralized by credit card receivables |
|
21 |
|
|
|
24 |
|
|
|
44 |
|
|
|
51 |
|
|
|
||||
|
Segment profit |
|
$ |
149 |
|
|
|
$ |
63 |
|
|
|
$ |
260 |
|
|
|
$ |
101 |
|
|
|
|
Average gross credit card receivables funded by Target(b) |
|
$ |
2,950 |
|
|
|
$ |
2,853 |
|
|
|
$ |
2,656 |
|
|
|
$ |
3,027 |
|
|
|
|
Segment pretax ROIC(c) |
|
20.2 |
% |
|
|
8.8 |
% |
|
|
19.6 |
% |
|
|
6.7 |
% |
|
|
||||
(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 $17 million and $34 million for the three and six months ended July 31, 2010, respectively, and $21 million and $41 million for the three and six months ended August 1, 2009, respectively, 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 $4,148 million and $4,667 million for the three and six months ended July 31, 2010, respectively, and $5,508 million and $5,502 million for the three and six months ended August 1, 2009, respectively, of receivables funded by nonrecourse debt collateralized by credit card receivables.
(c) ROIC is return on invested capital, and this rate represents segment profit divided by average receivables funded by Target, expressed as an annualized rate.
(d) As an annualized percentage of average gross credit card receivables.
Spread Analysis - Total Portfolio
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Six Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
|
July 31, 2010 |
|
August 1, 2009 |
|
July 31, 2010 |
|
August 1, 2009 |
|
||||||||||||
|
|
|
Yield |
|
Yield |
|
Yield |
|
Yield |
|
||||||||||||
|
|
|
Amount |
|
Annualized |
|
Amount |
|
Annualized |
|
Amount |
|
Annualized |
|
Amount |
|
Annualized |
|
||||
|
(unaudited) |
|
(in millions) |
|
Rate |
|
(in millions) |
|
Rate |
|
(in millions) |
|
Rate |
|
(in millions) |
|
Rate |
|
||||
|
EBIT |
|
$ |
170 |
|
9.6 |
%(b) |
$ |
87 |
|
4.2 |
%(b) |
$ |
304 |
|
8.3 |
%(b) |
$ |
152 |
|
3.6 |
%(b) |
|
LIBOR(a) |
|
|
|
0.3 |
% |
|
|
0.3 |
% |
|
|
0.3 |
% |
|
|
0.4 |
% |
||||
|
Spread to LIBOR(c) |
|
$ |
164 |
|
9.3 |
%(b) |
$ |
81 |
|
3.9 |
%(b) |
$ |
293 |
|
8.0 |
%(b) |
$ |
135 |
|
3.2 |
%(b) |
(a) Balance-weighted average one-month LIBOR
(b) As a percentage of average gross credit card 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 |
|
|
|
Six Months Ended |
|
|
|
||||||||
|
|
|
July 31, |
|
August 1, |
|
|
|
July 31, |
|
August 1, |
|
|
|
||||
|
(millions) (unaudited) |
|
2010 |
|
2009 |
|
Change |
|
2010 |
|
2009 |
|
Change |
|
||||
|
Beginning gross credit card receivables |
|
$ |
7,260 |
|
$ |
8,457 |
|
(14.2 |
)% |
$ |
7,982 |
|
$ |
9,094 |
|
(12.2 |
)% |
|
Charges at Target |
|
765 |
|
843 |
|
(9.2 |
) |
1,484 |
|
1,646 |
|
(9.9 |
) |
||||
|
Charges at third parties |
|
1,522 |
|
1,768 |
|
(13.9 |
) |
2,948 |
|
3,432 |
|
(14.1 |
) |
||||
|
Payments |
|
(2,717 |
) |
(2,940 |
) |
(7.6 |
) |
(5,706 |
) |
(6,201 |
) |
(8.0 |
) |
||||
|
Other |
|
158 |
|
165 |
|
(4.7 |
) |
280 |
|
322 |
|
(13.1 |
) |
||||
|
Period-end gross credit card receivables |
|
$ |
6,988 |
|
$ |
8,293 |
|
(15.7 |
)% |
$ |
6,988 |
|
$ |
8,293 |
|
(15.7 |
)% |
|
Average gross credit card receivables |
|
$ |
7,098 |
|
$ |
8,361 |
|
(15.1 |
)% |
$ |
7,323 |
|
$ |
8,529 |
|
(14.1 |
)% |
|
Accounts with three or more payments (60+ days) past due as a percentage of period-end gross credit card receivables |
|
5.0 |
% |
5.8 |
% |
|
|
5.0 |
% |
5.8 |
% |
|
|
||||
|
Accounts with four or more payments (90+ days) past due as a percentage of period-end gross credit card receivables |
|
3.5 |
% |
4.1 |
% |
|
|
3.5 |
% |
4.1 |
% |
|
|
||||
|
Credit card penetration(a) |
|
5.1 |
% |
5.8 |
% |
|
|
4.9 |
% |
5.7 |
% |
|
|
||||
(a) Represents charges at Target (including sales taxes and gift cards) divided by sales (which excludes sales taxes and gift cards).
Allowance for Doubtful Accounts
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
||||||||
|
|
|
July 31, |
|
August 1, |
|
|
|
July 31, |
|
August 1, |
|
|
|
||||
|
(millions) (unaudited) |
|
2010 |
|
2009 |
|
Change |
|
2010 |
|
2009 |
|
Change |
|
||||
|
Allowance at beginning of period |
|
$ |
930 |
|
$ |
1,005 |
|
(7.5 |
)% |
$ |
1,016 |
|
$ |
1,010 |
|
0.6 |
% |
|
Bad debt provision |
|
138 |
|
303 |
|
(54.5 |
) |
335 |
|
600 |
|
(44.1 |
) |
||||
|
Net write-offs(a) |
|
(217 |
) |
(304 |
) |
(28.7 |
) |
(500 |
) |
(606 |
) |
(17.4 |
) |
||||
|
Allowance at end of period |
|
$ |
851 |
|
$ |
1,004 |
|
(15.3 |
)% |
$ |
851 |
|
$ |
1,004 |
|
(15.3 |
)% |
|
As a percentage of period-end gross credit card receivables |
|
12.2 |
% |
12.1 |
% |
|
|
12.2 |
% |
12.1 |
% |
|
|
||||
|
Net write-offs as a percentage of average gross credit card receivables (annualized) |
|
12.2 |
% |
14.5 |
% |
|
|
13.7 |
% |
14.2 |
% |
|
|
||||
(a) Net write-offs include the principal amount of losses (excluding accrued and unpaid finance charges) less current period principal recoveries.
Subject to reclassification