Target 2014 Annual Report Download - page 43

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open during the liquidation. To assist with the exit plan, the Court approved the appointment of a monitor and certain
other financial advisors.
As a result of the Filing, we no longer have a controlling interest in the Canada Subsidiaries. For this reason, we
deconsolidated the Canada Subsidiaries effective January 15, 2015, which resulted in a pretax impairment loss on
deconsolidation and other charges, collectively totaling $5.1 billion. The pretax loss on deconsolidation includes the
derecognition of the carrying amounts of the Canada Subsidiaries' assets, liabilities and accumulated other
comprehensive loss and the recording of our remaining interests at fair value.
Subsequent to deconsolidation, we will use the cost method to account for our equity investment in the Canada
Subsidiaries, which has been reflected as zero in our Consolidated Statement of Financial Position at January 31,
2015 based on the estimated fair value of the Canada Subsidiaries' net assets. Loans to and accounts receivable from
the Canada Subsidiaries are recorded at an estimated fair value of $326 million.
Loss on Discontinued Operations
Our Canadian exit represents a strategic shift in our business. For this reason, our Canadian Segment results for all
periods prior to the January 15, 2015 deconsolidation and costs to exit are classified as discontinued operations.
Loss on Discontinued Operations
(millions) 2014 2013 2012
Sales $ 1,902 $ 1,317 $ —
Cost of sales 1,541 1,121 —
SG&A expenses
Depreciation and amortization
Interest expense
909
248
73
910
227
77
272
97
78
Pretax loss from operations (869) (1,018) (447)
Pretax exit costs
Income taxes
(5,105)
1,889
—
295
—
131
Loss on discontinued operations $ (4,085) $ (723) $ (316)
The fourth quarter Canadian pretax exit costs totaled $5,105 million and included the following:
Fourth Quarter Pretax Exit Costs
(millions) 2014
Investment impairment on deconsolidation
Contingent liabilities
Employee trust
Other exit costs
$ 4,766
240
73
26
Total $ 5,105
Investments in Canada Subsidiaries
Target continues to indirectly own 100% of the common stock of the Canada Subsidiaries, but has deconsolidated
those entities because Target no longer has a controlling interest. At the date of deconsolidation, we adjusted our
investment in the Canada Subsidiaries to fair value with a corresponding charge to income. Because the estimated
amount of the Canada Subsidiaries' liabilities exceeded the estimated fair value of the assets available for distribution
to its creditors, the fair value of Target’s equity investment approximates zero.
Target Corporation Amounts Receivable from Canada Subsidiaries
Prior to deconsolidation, Target Corporation made loans to the Canada Subsidiaries for the purpose of funding its
operations and had accounts receivable generated in the ordinary course of business. The loans, corresponding
interest and the accounts receivable were considered intercompany transactions and eliminated in the consolidated
Target Corporation financial statements. As of the deconsolidation date, the loans, associated interest and accounts
38