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Accounting Standards Adopted (Notes)
 9 Months Ended
Nov. 03, 2018
Accounting Changes and Error Corrections [Abstract]  
Accounting Standards Adopted
Accounting Standards Adopted

Revenue Recognition

We adopted Accounting Standards Update (ASU) No. 2014-09—Revenue from Contracts with Customers (Topic 606), as of February 4, 2018, using the full retrospective approach. The new standard did not materially affect our consolidated net earnings, financial position, or cash flows. The new standard resulted in minor changes to the timing of recognition of revenues for certain promotional gift card programs.

For the three and nine months ended October 28, 2017, we reclassified profit-sharing income under our credit card program agreement to Other Revenue from Selling, General and Administrative Expenses (SG&A). In addition, we reclassified certain advertising, rental, and other miscellaneous revenues, none of which was individually significant, from Sales and SG&A to Other Revenues.

Leases

We adopted ASU No. 2016-02—Leases (Topic 842), as of February 4, 2018, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at adoption and in comparative periods that approximates the results of a full retrospective approach. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements.
In addition, we elected the hindsight practical expedient to determine the lease term for existing leases. Our election of the hindsight practical expedient resulted in the shortening of lease terms for certain existing leases and the useful lives of corresponding leasehold improvements. In our application of hindsight, we evaluated the performance of the leased stores and the associated markets in relation to our overall real estate strategies, which resulted in the determination that most renewal options would not be reasonably certain in determining the expected lease term.

Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of approximately $1.3 billion and $1.4 billion, respectively, as of February 4, 2018. The difference between the additional lease assets and lease liabilities, net of the deferred tax impact, was recorded as an adjustment to retained earnings. The standard did not materially impact our consolidated net earnings and had no impact on cash flows.

Pensions

In the first quarter of 2018, we adopted ASU No. 2017-07—Compensation – Retirement Benefits (Topic 715) using the full retrospective approach. The new standard 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. For the three and nine months ended October 28, 2017, we reclassified $(15) million and $(44) million, respectively, of non-service cost components of net benefit cost to Net Other (Income) / Expense from SG&A on our Consolidated Statements of Operations.

Effect of Accounting Standards Adoption on Consolidated Statement of Operations
 
 
 
 
 
 
Three Months
Ended
Effect of the Adoption of
 
Three Months
Ended
 
ASC
Topic 606
(Revenue
Recognition)
 
ASC
Topic 842
(Leases)
 
ASU
2017-07
(Pension)
 
(millions, except per share data) (unaudited)
October 28,
2017
As Previously Reported
 
 
 
October 28,
2017
As Adjusted
Sales
$
16,667

$
(20
)

(a) 
$
—

 
$
—

 
$
16,647

Other revenue
—

227

(a) 
—

 
—

 
227

Total revenue
16,667

207

 
—

 
—

 
16,874

Cost of sales
11,712

—

 
—

 
—

 
11,712

Selling, general and administrative expenses
3,512

207

(a) 
(2
)
(b) 
15

(c) 
3,733

Depreciation and amortization (exclusive of depreciation included in cost of sales)
574

—

 
9

(b) 
—

 
582

Operating income
869

—

 
(7
)
 
(15
)
 
847

Net interest expense
254

—

 
(3
)
(b) 
—

 
251

Net other (income) / expense
—

—

 
—

 
(15
)
(c) 
(15
)
Earnings from continuing operations before income taxes
615

—

 
(4
)
 
—

 
611

Provision for income taxes
137

—

 
(1
)
 
—

 
135

Net earnings from continuing operations
478

—

 
(3
)
 
—

 
476

Discontinued operations, net of tax
2

—

 
—

 
—

 
2

Net earnings
$
480

$
—

 
$
(3
)
 
$
—

 
$
478

Basic earnings per share
 
 
 
 
 
 
 
 
Continuing operations
$
0.88

 
 
 
 
 
 
$
0.87

Discontinued operations
—

 
 
 
 
 
 
—

Net earnings per share
$
0.88

 
 
 
 
 
 
$
0.88

Diluted earnings per share
 
 
 
 
 
 
 
 
Continuing operations
$
0.87

 
 
 
 
 
 
$
0.87

Discontinued operations
—

 
 
 
 
 
 
—

Net earnings per share
$
0.88

 
 
 
 
 
 
$
0.87

Note: Per share amounts may not foot due to rounding. The sum of "As Previously Reported" amounts and effects of the adoption of the new standards may not equal "As Adjusted" amounts due to rounding.

Footnote explanations are provided on page 8.

Effect of Accounting Standards Adoption on Consolidated Statement of Operations
 
 
 
 
 
 
Nine Months
Ended
Effect of the Adoption of
 
Nine Months
Ended
 
ASC
Topic 606
(Revenue
Recognition)
 
ASC
Topic 842
(Leases)
 
ASU
2017-07
(Pension)
 
(millions, except per share data) (unaudited)
October 28,
2017
As Previously Reported
 
 
 
October 28,
2017
As Adjusted
Sales
$
49,113

$
(61
)

(a) 
$
—

 
$
—

 
$
49,052

Other revenue
—

679

(a) 
—

 
—

 
679

Total revenue
49,113

618

 
—

 
—

 
49,731

Cost of sales
34,330

—

 
—

 
—

 
34,330

Selling, general and administrative expenses
10,027

618

(a) 
(4
)
(b) 
44

(c) 
10,686

Depreciation and amortization (exclusive of depreciation included in cost of sales)
1,596

—

 
24

(b) 
—

 
1,620

Operating income
3,160

—

 
(20
)
 
(44
)
 
3,095

Net interest expense
532

—

 
(10
)
(b) 
—

 
521

Net other (income) / expense
—

—

 
—

 
(44
)
(c) 
(44
)
Earnings from continuing operations before income taxes
2,628

—

 
(10
)
 
—

 
2,618

Provision for income taxes
802

—

 
(4
)
 
—

 
798

Net earnings from continuing operations
1,826

—

 
(6
)
 
—

 
1,820

Discontinued operations, net of tax
7

—

 
—

 
—

 
7

Net earnings
$
1,833

$
—

 
$
(6
)
 
$
—

 
$
1,827

Basic earnings per share
 
 
 
 
 
 
 
 
Continuing operations
$
3.33

 
 
 
 
 
 
$
3.31

Discontinued operations
0.01

 
 
 
 
 
 
0.01

Net earnings per share
$
3.34

 
 
 
 
 
 
$
3.33

Diluted earnings per share
 
 
 
 
 
 
 
 
Continuing operations
$
3.31

 
 
 
 
 
 
$
3.30

Discontinued operations
0.01

 
 
 
 
 
 
0.01

Net earnings per share
$
3.32

 
 
 
 
 
 
$
3.31

Note: Per share amounts may not foot due to rounding. The sum of "As Previously Reported" amounts and effects of the adoption of the new standards may not equal "As Adjusted" amounts due to rounding.
(a) 
For the three and nine months ended October 28, 2017, we reclassified $170 million and $512 million, respectively, of profit-sharing income under our credit card program agreement to Other Revenue from SG&A. In addition, we reclassified certain advertising, rental, and other miscellaneous revenues, none of which was individually significant, from Sales and SG&A to Other Revenues.
(b) 
Relates to lease-term changes under the hindsight practical expedient.
(c) 
Relates to non-service cost components reclassified to Net Other (Income) / Expense from SG&A.








Effect of Accounting Standards Adoption on Consolidated Statement of Financial Position
 
 
 
 
 
 
 
 
 
Effect of the Adoption of
 
 
(millions) (unaudited)
February 3,
2018
As Previously Reported
 
ASC
Topic 606
(Revenue
Recognition)
 
ASC
Topic 842
(Leases)
 
February 3,
2018
As Adjusted
Assets
 
 
 

 
 
 
 
Cash and cash equivalents
$
2,643

 
$
—

 
$
—

 
$
2,643

Inventory
8,657

 
(60
)
(a) 
—

 
8,597

Other current assets
1,264

 
60

(a) 
(24
)
(b) 
1,300

Total current assets
12,564

 
—

 
(24
)
 
12,540

Property and equipment
 

 
 
 
 
 
 

Land
6,095

 
—

 
—

 
6,095

Buildings and improvements
28,396

 
—

 
(265
)
(c) 
28,131

Fixtures and equipment
5,623

 
—

 
—

 
5,623

Computer hardware and software
2,645

 
—

 
—

 
2,645

Construction-in-progress
440

 
—

 
—

 
440

Accumulated depreciation
(18,181
)
 
—

 
(217
)
(c) 
(18,398
)
Property and equipment, net
25,018

 
—

 
(482
)
 
24,536

Operating lease assets
—

 
—

 
1,884

(d) 
1,884

Other noncurrent assets
1,417

 
—

 
(74
)
(e) 
1,343

Total assets
$
38,999

 
$
—

 
$
1,304

 
$
40,303

Liabilities and shareholders’ investment
 

 
 
 
 
 
 

Accounts payable
$
8,677

 
$
—

 
$
—

 
$
8,677

Accrued and other current liabilities
4,254

 
(14
)
(k) 
(146
)
(f) 
4,094

Current portion of long-term debt and other borrowings
270

 
—

 
11

(g) 
281

Total current liabilities
13,201

 
(14
)
 
(135
)
 
13,052

Long-term debt and other borrowings
11,317

 
—

 
(200
)
(g) 
11,117

Noncurrent operating lease liabilities
—

 
—

 
1,924

(h) 
1,924

Deferred income taxes
713

 
4

 
(24
)
 
693

Other noncurrent liabilities
2,059

 
—

 
(192
)
(i) 
1,866

Total noncurrent liabilities
14,089

 
4

 
1,508

 
15,600

Shareholders’ investment
 

 
 
 
 
 
 

Common stock
45

 
—

 
—

 
45

Additional paid-in capital
5,858

 
—

 
—

 
5,858

Retained earnings
6,553

 
10

(k) 
(69
)
(j) 
6,495

Accumulated other comprehensive loss
(747
)
 
—

 
—

 
(747
)
Total shareholders’ investment
11,709

 
10

 
(69
)
 
11,651

Total liabilities and shareholders’ investment
$
38,999

 
$
—

 
$
1,304

 
$
40,303

Note: The sum of "As Previously Reported" amounts and effects of the adoption of the new standards may not equal "As Adjusted" amounts due to rounding.

Footnote explanations are provided on page 10.
Effect of Accounting Standards Adoption on Consolidated Statement of Financial Position
 
 
 
 
 
 
 
 
 
Effect of the Adoption of
 
 
(millions) (unaudited)
October 28,
2017
As Previously Reported
 
ASC
Topic 606
(Revenue
Recognition)
 
ASC
Topic 842
(Leases)
 
October 28,
 2017
As Adjusted
Assets
 
 
 

 
 
 
 
Cash and cash equivalents
$
2,725

 
$
—

 
$
—

 
$
2,725

Inventory
10,586

 
(69
)
(a) 
—

 
10,517

Other current assets
1,398

 
69

(a) 
(23
)
(b) 
1,444

Total current assets
14,709

 
—

 
(23
)
 
14,686

Property and equipment
 

 
 
 
 
 
 

Land
6,087

 
—

 
—

 
6,087

Buildings and improvements
28,310

 
—

 
(363
)
(c) 
27,946

Fixtures and equipment
5,548

 
—

 
—

 
5,548

Computer hardware and software
2,658

 
—

 
—

 
2,658

Construction-in-progress
389

 
—

 
—

 
389

Accumulated depreciation
(17,880
)
 
—

 
(99
)
(c) 
(17,979
)
Property and equipment, net
25,112

 
—

 
(462
)
 
24,649

Operating lease assets
—

 
—

 
1,861

(d) 
1,861

Other noncurrent assets
887

 
—

 
(74
)
(e) 
813

Total assets
$
40,708

 
$
—

 
$
1,302

 
$
42,009

Liabilities and shareholders’ investment
 

 
 
 
 
 
 

Accounts payable
$
9,986

 
$
—

 
$
—

 
$
9,986

Accrued and other current liabilities
4,036

 
(14
)
(k) 
(149
)
(f) 
3,875

Current portion of long-term debt and other borrowings
1,354

 
—

 
12

(g) 
1,366

Total current liabilities
15,376

 
(14
)
 
(137
)
 
15,227

Long-term debt and other borrowings
11,277

 
—

 
(187
)
(g) 
11,090

Noncurrent operating lease liabilities
—

 
—

 
1,901

(h) 
1,901

Deferred income taxes
944

 
6

 
(34
)
 
915

Other noncurrent liabilities
1,974

 
—

 
(189
)
(i) 
1,784

Total noncurrent liabilities
14,195

 
6

 
1,491

 
15,690

Shareholders’ investment
 

 
 
 
 
 
 

Common stock
45

 
—

 
—

 
45

Additional paid-in capital
5,762

 
—

 
—

 
5,762

Retained earnings
5,940

 
8

(k) 
(52
)
(j) 
5,895

Accumulated other comprehensive loss
(610
)
 
—

 
—

 
(610
)
Total shareholders’ investment
11,137

 
8

 
(52
)
 
11,092

Total liabilities and shareholders’ investment
$
40,708

 
$
—

 
$
1,302

 
$
42,009

Note: The sum of "As Previously Reported" amounts and effects of the adoption of the new standards may not equal "As Adjusted" amounts due to rounding.

(a) 
Represents estimated merchandise returns, which were reclassified from Inventory to Other Current Assets.
(b) 
Represents prepaid rent reclassified to Operating Lease Assets.
(c) 
For both periods presented, represents impact of changes in finance lease terms and related leasehold improvements (net of accumulated depreciation) under the hindsight practical expedient and derecognition of approximately $135 million of non-Target owned properties that were consolidated under previously existing build-to-suit accounting rules.
(d) 
Represents capitalization of operating lease assets and reclassification of leasehold acquisition costs, straight-line rent accrual, and tenant incentives.
(e) 
Represents reclassification of leasehold acquisition costs to Operating Lease Assets.
(f) 
Represents reclassification of straight-line rent accrual to Operating Lease Assets, partially offset by recognition of the current portion of operating lease liabilities.
(g) 
Represents the impact of changes in financing lease terms for certain leases due to the election of the hindsight practical expedient.
(h) 
Represents recognition of operating lease liabilities.
(i) 
For both periods presented, represents derecognition of approximately $135 million of liabilities related to non-Target owned properties that were consolidated under previously existing build-to-suit accounting rules and reclassification of tenant incentives to Operating Lease Assets.
(j) 
Represents the retained earnings impact of lease-term changes due to the use of hindsight, primarily from the shortening of lease terms for certain existing leases and useful lives of corresponding leasehold improvements.
(k) 
Primarily represents the impact of a change in timing of revenue recognition for certain promotional gift card programs.