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Beginning with the first quarter of 2013, we will no longer report a U.S. Credit Card Segment. Income from the profit-
sharing arrangement, net of account servicing expenses, will be recognized as an offset to SG&A expenses.
8. Canadian Leasehold Acquisition
During 2011, we purchased the leasehold interests in 189 sites operated by Zellers in Canada, in exchange for
$1,861 million. In addition, we sold our right to acquire the leasehold interests in 54 of these sites to third-parties for
a total of $225 million. These transactions resulted in a final net purchase price of $1,636 million, which was
included in expenditures for property and equipment in the Consolidated Statements of Cash Flows.
As a result of the acquisition, the following net assets were recorded in our Canadian Segment: buildings and
improvements of $2,887 million; finite-lived intangible assets of $23 million; unsecured debt and other borrowings
of $1,274 million. The finite-lived intangible assets are recorded in other noncurrent assets on the Consolidated
Statements of Financial Position and have an amortization period ranging from 3-13 years.
The acquired sites were subleased back to Zellers for various terms, which all end no later than March 31, 2013.
9. Fair Value Measurements
Fair value measurements are categorized into one of three levels based on the lowest level of significant input used:
Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs available at the
measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be
corroborated by observable market data).
Fair Value at February 2, 2013 Fair Value at January 28, 2012
Fair Value Measurements – Recurring Basis
(millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Cash and cash equivalents
Short-term investments $130 $— $— $194 $— $—
Other current assets
Interest rate swaps (a) —4——20—
Prepaid forward contracts 73 — — 69 — —
Other noncurrent assets
Interest rate swaps (a) —85 — — 114 —
Company-owned life insurance
investments (b) — 269 — — 371 —
Total $ 203 $ 358 $ — $ 263 $ 505 $ —
Liabilities
Other current liabilities
Interest rate swaps (a) $— $ 2 $— $— $ 7 $—
Other noncurrent liabilities
Interest rate swaps (a) $— $54 $— $— $69 $—
Total $— $56 $— $— $76 $—
(a) There was one interest rate swap designated as an accounting hedge at February 2, 2013 and January 28, 2012. See Note 21 for
additional information on interest rate swaps.
(b) Company-owned life insurance investments consist of equity index funds and fixed income assets. Amounts are presented net of
nonrecourse loans that are secured by some of these policies. These loan amounts were $817 million at February 2, 2013 and $669 million
at January 28, 2012.
41
PART II