FINANCIAL SERVICES (Tables)

6 Months Ended

Jul. 29, 2016

Components of the Company's financing receivables

The following table summarizes the components of the Company's financing receivables segregated by portfolio segment as of July 29, 2016 and January 29, 2016:



	July 29, 2016									January 29, 2016
	Revolving			Fixed-term			Total			Revolving			Fixed-term			Total
	(in millions)
Financing Receivables, net:
Customer receivables, gross	$	1,043		$	3,786		$	4,829		$	1,173		$	3,637		$	4,810
Allowances for losses	(100		)	(56		)	(156		)	(118		)	(58		)	(176		)
Customer receivables, net	943			3,730			4,673			1,055			3,579			4,634
Residual interest	—			465			465			—			458			458
Financing receivables, net	$	943		$	4,195		$	5,138		$	1,055		$	4,037		$	5,092
Short-term	$	943		$	1,924		$	2,867		$	1,055		$	1,860		$	2,915
Long-term	$	—		$	2,271		$	2,271		$	—		$	2,177		$	2,177

Changes in the allowance for financing receivable losses

The following table summarizes the changes in the allowance for financing receivable losses for the respective periods:



	Three Months Ended
	July 29, 2016									July 31, 2015
	Revolving			Fixed-term			Total			Revolving			Fixed-term			Total
	(in millions)
Allowance for financing receivable losses:
Balance at beginning of period	$	107		$	58		$	165		$	134		$	53		$	187
Charge-offs, net of recoveries	(23		)	(2		)	(25		)	(21		)	(7		)	(28		)
Provision charged to income statement	16			—			16			14			4			18
Balance at end of period	$	100		$	56		$	156		$	127		$	50		$	177

	Six Months Ended
	July 29, 2016									July 31, 2015
	Revolving			Fixed-term			Total			Revolving			Fixed-term			Total
	(in millions)
Allowance for financing receivable losses:
Balance at the beginning of period	$	118		$	58		$	176		$	145		$	49		$	194
Charge-offs, net of recoveries	(48		)	(5		)	(53		)	(52		)	(9		)	(61		)
Provision charged to income statement	30			3			33			34			10			44
Balance at end of period	$	100		$	56		$	156		$	127		$	50		$	177

Aging of the Company's customer financing receivables, gross, including accrued interest

The following table summarizes the aging of the Company's customer financing receivables, gross, including accrued interest, as of July 29, 2016 and January 29, 2016, segregated by class:



	July 29, 2016								January 29, 2016
	Current		Past Due 1 — 90 Days		Past Due > 90 Days		Total		Current		Past Due 1 — 90 Days		Past Due > 90 Days		Total
	(in millions)
Revolving — DPA	$	725	$	84	$	27	$	836	$	812	$	99	$	36	$	947
Revolving — DBC	186		17		4		207		202		20		4		226
Fixed-term — Consumer and Small Commercial	318		13		2		333		315		13		1		329
Fixed-term — Medium and Large Commercial	3,303		129		21		3,453		3,131		171		6		3,308
Total customer receivables, gross	$	4,532	$	243	$	54	$	4,829	$	4,460	$	303	$	47	$	4,810

Credit quality indicators

The following table summarizes customer receivables, gross, including accrued interest, by credit quality indicator segregated by class, as of July 29, 2016 and January 29, 2016. The categories shown in the table below segregate customer receivables based on the relative degrees of credit risk. The credit quality indicators for DPA revolving accounts are measured primarily as of each quarter-end date, while all other indicators are generally updated on a periodic basis.

For DPA revolving receivables shown in the table below, the Company makes credit decisions based on proprietary scorecards, which include the customer's credit history, payment history, credit usage, and other credit agency-related elements. The higher quality category includes prime accounts generally of a higher credit quality that are comparable to U.S. customer FICO scores of 720 or above. The mid-category represents the mid-tier accounts that are comparable to U.S. customer FICO scores from 660 to 719. The lower category is generally sub-prime and represents lower credit quality accounts that are comparable to U.S customer FICO scores below 660. For the DBC revolving receivables and fixed-term commercial receivables shown in the table below, an internal grading system is utilized that assigns a credit level score based on a number of considerations, including liquidity, operating performance, and industry outlook. The grading criteria and classifications for the fixed-term products differ from those for the revolving products as loss experience varies between these product and customer groups. The credit quality categories cannot be compared between the different classes as loss experience varies substantially between the classes.



	July 29, 2016								January 29, 2016
	Higher		Mid		Lower		Total		Higher		Mid		Lower		Total
	(in millions)
Revolving — DPA	$	139	$	248	$	449	$	836	$	148	$	270	$	529	$	947
Revolving — DBC	$	62	$	61	$	84	$	207	$	68	$	65	$	93	$	226
Fixed-term — Consumer and Small Commercial	$	95	$	144	$	94	$	333	$	93	$	136	$	100	$	329
Fixed-term — Medium and Large Commercial	$	1,604	$	1,153	$	696	$	3,453	$	1,597	$	1,075	$	636	$	3,308

Financing receivables held by the consolidated VIEs

The following table shows financing receivables held by the consolidated VIEs as of the respective dates:



	July 29, 2016		January 29, 2016
	(in millions)
Financing receivables held by consolidated VIEs, net:
Short-term, net	$	2,057	$	2,125
Long-term, net	1,255		1,215
Financing receivables held by consolidated VIEs, net	$	3,312	$	3,340

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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