calculation of after-tax return on invested capital
Numerator | ||||||||||||||||||||||||||||||||
(dollars in millions) (unaudited) | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2018(a) | Q2 2018(a) | Q1 2018(a) | Q4 2017(a)(b) | Q3 2017(b) | Q2 2017(b) | Q1 2017(b) | Q4 2016(b) | ||||||||||||||||||||
Operating income | $ | 4,577 | $ | 4,395 | $ | 4,204 | $ | 4,110 | $ | 4,122 | $ | 4,150 | $ | 4,110 | $ | 4,224 | $ | 4,418 | $ | 4,601 | $ | 4,723 | $ | 4,864 | ||||||||
+ Net other income / (expense) | $ | 45 | $ | 42 | $ | 33 | $ | 27 | $ | 35 | $ | 41 | $ | 51 | $ | 59 | $ | 69 | $ | 80 | $ | 93 | $ | 88 | ||||||||
EBIT | $ | 4,622 | $ | 4,437 | $ | 4,237 | $ | 4,137 | $ | 4,157 | $ | 4,191 | $ | 4,161 | $ | 4,283 | $ | 4,487 | $ | 4,681 | $ | 4,816 | $ | 4,952 | ||||||||
+ Operating lease interest (c) | 86 | 85 | 84 | 83 | 83 | 81 | 80 | 79 | 77 | 76 | 75 | 74 | ||||||||||||||||||||
- Income taxes (d)(e) | 1,043 | 937 | 878 | 856 | 524 | 589 | 692 | 867 | 1,413 | 1,564 | 1,633 | 1,643 | ||||||||||||||||||||
Net operating profit after taxes | $ | 3,665 | $ | 3,585 | $ | 3,443 | $ | 3,364 | $ | 3,716 | $ | 3,683 | $ | 3,549 | $ | 3,495 | $ | 3,151 | $ | 3,193 | $ | 3,258 | $ | 3,383 | ||||||||
Denominator | ||||||||||||||||||||||||||||||||
(dollars in millions) (unaudited) | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2018 | Q2 2018 | Q1 2018 | Q4 2017(b) | Q3 2017(b) | Q2 2017(b) | Q1 2017(b) | Q4 2016(b) | Q3 2016(b) | Q2 2016(b) | Q1 2016(b) | Q4 2015 | ||||||||||||||||
Current portion of long-term debt and other | ||||||||||||||||||||||||||||||||
borrowings | $ | 1,159 | $ | 1,153 | $ | 1,056 | $ | 1,052 | $ | 1,535 | $ | 1,044 | $ | 283 | $ | 281 | $ | 1,366 | $ | 1,365 | $ | 1,729 | $ | 1,729 | $ | 739 | $ | 653 | $ | 1,634 | $ | 815 |
+ Noncurrent portion of long-term debt | 10,513 | 10,365 | 11,357 | 10,223 | 10,104 | 10,108 | 11,107 | 11,117 | 11,090 | 10,706 | 10,916 | 10,862 | 11,939 | 11,894 | 12,431 | 11,945 | ||||||||||||||||
+ Shareholders' equity | 11,545 | 11,836 | 11,117 | 11,297 | 11,080 | 11,167 | 11,158 | 11,651 | 11,092 | 11,055 | 10,979 | 10,915 | 11,030 | 11,538 | 12,506 | 12,965 | ||||||||||||||||
+ Operating lease liabilities (f) | 2,390 | 2,285 | 2,231 | 2,170 | 2,208 | 2,183 | 2,157 | 2,072 | 2,041 | 2,032 | 2,049 | 1,970 | 1,925 | 1,894 | 1,902 | 1,457 | ||||||||||||||||
- Cash and cash equivalents | 969 | 1,656 | 1,173 | 1,556 | 825 | 1,180 | 1,060 | 2,643 | 2,725 | 2,291 | 2,680 | 2,512 | 1,231 | 1,480 | 4,036 | 4,046 | ||||||||||||||||
- Net assets of discontinued operations (g) | - | - | - | - | - | - | - | 2 | 4 | 10 | 17 | 62 | 60 | 80 | 249 | 226 | ||||||||||||||||
Invested capital | $ | 24,638 | $ | 23,983 | $ | 24,588 | $ | 23,186 | $ | 24,102 | $ | 23,322 | $ | 23,645 | $ | 22,476 | $ 22,860 | $ 22,857 | $ 22,976 | $ 22,902 | $ | 24,342 | $ | 24,419 | $ | 24,188 | $ | 22,910 | ||||
Average invested capital (h) | $24,369 | $23,652 | $24,116 | $22,831 | $ | 23,481 | $ | 23,090 | $ | 23,310 | $ | 22,689 | $23,601 | $23,639 | $23,582 | $22,906 | ||||||||||||||||
After-tax return on invested capital (e) (i) | 15.0% | 15.2% | 14.3% | 14.7% | 15.8% | 16.0% | 15.2% | 15.4% | 13.4% | 13.5% | 13.8% | 14.8% | ||||||||||||||||||||
After-tax return on invested capital excluding | ||||||||||||||||||||||||||||||||
discrete impacts of Tax Act (e) | 15.1% | 15.0% | 14.1% | 14.6% | 13.9% | 14.2% | 13.5% | 13.6% |
- The trailing 12 months ended November 3, 2018, August 4, 2018, May 5, 2018, and February 3, 2018 consisted of 53 weeks compared with 52 weeks in the comparable periods presented.
- Beginning with the first quarter 2018, we adopted the new accounting standards for revenue recognition, leases, and pensions. We are presenting certain prior period results on a basis consistent with the new standards and conformed to the current period presentation. We provided additional information about the impact of the new accounting standards on previously reported financial information in a Form 8-K filed on May 11, 2018.
- Represents the add-back to operating income to reflect the hypothetical interest expense we would incur if the property under our operating leases were owned or accounted for as finance leases. Calculated using the discount rate for each lease and recorded as a component of rent expense within SG&A expense on our Consolidated Statements of Operations.
- Calculated using the effective tax rate for continuing operations.
- The effective tax rate for the trailing twelve months ended November 2, 2019, August 3, 2019, May 4, 2019, February 2, 2019, November 3, 2018, August 4, 2018, May 5, 2018, and February 3, 2018, includes discrete tax benefits of the Tax Cuts and Jobs Act (Tax Act). The effective tax rate for these periods also includes the impact of the new lower federal income tax rate.
- Total short-term and long-term operating lease liabilities included within Accrued and Other Current Liabilities and Noncurrent Operating Lease Liabilities on the Consolidated Statements of Financial Position.
- Included in Other Assets and Liabilities on the Consolidated Statements of Financial Position.
- Average based on the invested capital at the end of the current period and the invested capital at the end of the comparable prior period.
- Additional information as previously reported is available under "summary financials" on investors.target.com.
Last Updated: 11/20/2019
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Target Corporation published this content on 20 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 November 2019 12:44:01 UTC