BEST BUY CO INC, 10-Q filed on 12/4/2015
Quarterly Report
Document and Entity Information Document
9 Months Ended
Oct. 31, 2015
Dec. 1, 2015
Document Information [Line Items]
 
 
Entity Registrant Name
BEST BUY CO INC 
 
Entity Central Index Key
0000764478 
 
Document Type
10-Q 
 
Document Period End Date
Oct. 31, 2015 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--01-30 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
342,719,728 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q3 
 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Oct. 31, 2015
Jan. 31, 2015
Nov. 1, 2014
Current assets
 
 
 
Cash and cash equivalents
$ 1,697 
$ 2,432 
$ 1,929 
Short-term investments
1,650 
1,456 
1,209 
Receivables, net
1,061 
1,280 
1,066 
Merchandise inventories
6,651 
5,174 
6,900 
Other current assets
676 
703 
959 
Current assets held for sale
684 
Total current assets
11,735 
11,729 
12,063 
Property and equipment, net
2,329 
2,295 
2,524 
Goodwill
425 
425 
425 
Intangibles, net
18 
57 
99 
Other assets
636 
583 
651 
Non-current assets held for sale
32 
167 
Total assets
15,175 
15,256 
15,762 
Current liabilities
 
 
 
Accounts payable
6,184 
5,030 
6,626 
Unredeemed gift card liabilities
379 
411 
381 
Deferred revenue
330 
326 
449 
Accrued compensation and related expenses
306 
372 
305 
Accrued liabilities
790 
782 
788 
Accrued income taxes
23 
230 
33 
Current portion of long-term debt
383 1
41 
44 
Current liabilities held for sale
585 
Total current liabilities
8,395 
7,777 
8,626 
Long-term liabilities
874 
881 
972 
Long-term debt
1,256 
1,580 
1,591 
Long-term liabilities held for sale
18 
Best Buy Co., Inc. shareholders’ equity
 
 
 
Preferred stock, $1.00 par value: Authorized — 400,000 shares; Issued and outstanding — none
Common stock, $0.10 par value: Authorized — 1.0 billion shares; Issued and outstanding — 344,863,000, 351,468,000 and 350,407,000 shares, respectively
34 
35 
35 
Additional paid-in capital
185 
437 
377 
Retained earnings
4,135 
4,141 
3,689 
Accumulated other comprehensive income
296 
382 
468 
Total Best Buy Co., Inc. shareholders’ equity
4,650 
4,995 
4,569 
Noncontrolling interests
Total equity
4,650 
5,000 
4,573 
Total liabilities and equity
$ 15,175 
$ 15,256 
$ 15,762 
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $)
Oct. 31, 2015
Jan. 31, 2015
Nov. 1, 2014
Preferred stock, par value (in dollars per share)
$ 1.00 
$ 1.00 
$ 1.00 
Preferred stock, authorized shares
400,000 
400,000 
400,000 
Preferred stock, issued shares
Preferred stock, outstanding shares
Common stock, par value (in dollars per share)
$ 0.10 
$ 0.10 
$ 0.10 
Common stock, authorized shares
1,000,000,000 
1,000,000,000 
1,000,000,000 
Common stock, issued shares
344,863,000 
351,468,000 
350,407,000 
Common stock, outstanding shares
344,863,000 
351,468,000 
350,407,000 
CONSOLIDATED STATEMENTS OF EARNINGS (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 31, 2015
Nov. 1, 2014
Oct. 31, 2015
Nov. 1, 2014
Revenue
$ 8,819 
$ 9,032 
$ 25,905 
$ 26,130 
Cost of goods sold
6,708 
6,956 
19,661 
20,109 
Restructuring charges – cost of goods sold
(1)
Gross profit
2,112 
2,076 
6,240 
6,021 
Selling, general and administrative expenses
1,874 
1,866 
5,451 
5,369 
Restructuring charges
185 
12 
Operating income
230 
205 
604 
640 
Other income (expense)
 
 
 
 
Gain on sale of investments
Investment income and other
14 
10 
Interest expense
(20)
(22)
(60)
(68)
Earnings from continuing operations before income tax (benefit) expense
213 
188 
560 
589 
Income tax (benefit) expense
84 
72 
230 
(133)
Net earnings from continuing operations
129 
116 
330 
722 
Gain (loss) from discontinued operations (Note 2), net of tax benefit (expense) of $-, $3, $3 and $(1)
(4)
(9)
88 
(7)
Net earnings including noncontrolling interests
125 
107 
418 
715 
Net earnings from discontinued operations attributable to noncontrolling interests
(1)
Net earnings attributable to Best Buy Co., Inc. shareholders
$ 125 
$ 107 
$ 418 
$ 714 
Basic earnings (loss) per share attributable to Best Buy Co., Inc. shareholders
 
 
 
 
Continuing operations (in dollars per share)
$ 0.37 
$ 0.33 
$ 0.95 
$ 2.07 
Discontinued operations (in dollars per share)
$ (0.01)
$ (0.03)
$ 0.25 
$ (0.02)
Basic earnings per share (in dollars per share)
$ 0.36 
$ 0.30 
$ 1.20 
$ 2.05 
Diluted earnings (loss) per share attributable to Best Buy Co., Inc. shareholders
 
 
 
 
Continuing operations (in dollars per share)
$ 0.37 
$ 0.33 
$ 0.93 
$ 2.04 
Discontinued operations (in dollars per share)
$ (0.01)
$ (0.03)
$ 0.25 
$ (0.02)
Diluted earnings per share (in dollars per share)
$ 0.36 
$ 0.30 
$ 1.18 
$ 2.02 
Dividends declared per common share (in dollars per share)
$ 0.23 
$ 0.19 
$ 1.20 
$ 0.53 
Weighted-average common shares outstanding (in millions)
 
 
 
 
Basic (in shares)
344.7 
350.1 
348.9 
349.0 
Diluted (in shares)
349.0 
354.0 
353.6 
352.5 
CONSOLIDATED STATEMENTS OF EARNINGS (PARENTHETICAL) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 31, 2015
Nov. 1, 2014
Oct. 31, 2015
Nov. 1, 2014
Income tax benefit (expense)
$ 0 
$ 3 
$ 3 
$ (1)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Oct. 31, 2015
Nov. 1, 2014
Oct. 31, 2015
Nov. 1, 2014
Net earnings including noncontrolling interests
$ 125 
$ 107 
$ 418 
$ 715 
Foreign currency translation adjustments
(2)
(25)
(19)
(22)
Unrealized loss on available-for-sale investments
(1)
(2)
Reclassification of foreign currency translation adjustments into earnings due to sale of business
(67)
Comprehensive income including noncontrolling interests
123 
81 
332 
691 
Comprehensive income attributable to noncontrolling interests
(1)
Comprehensive income attributable to Best Buy Co., Inc. shareholders
$ 123 
$ 81 
$ 332 
$ 690 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)
In Millions, unless otherwise specified
Total
Total Best Buy Co., Inc. [Member]
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Noncontrolling Interests [Member]
Beginning balances at Feb. 01, 2014
$ 3,989 
$ 3,986 
$ 35 
$ 300 
$ 3,159 
$ 492 
$ 3 
Beginning balances (in shares) at Feb. 01, 2014
 
 
347 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings, nine months ended
715 
714 
714 
Foreign currency translation adjustments
(22)
(22)
(22)
Unrealized losses on available-for-sale investments
(2)
(2)
(2)
Reclassification of foreign currency translation adjustments into earnings due to sale of business
 
 
 
 
 
 
Stock-based compensation
64 
64 
64 
Restricted stock vested and stock options exercised (in shares)
 
 
 
 
 
 
Restricted stock vested and stock options exercised
19 
19 
19 
Issuance of common stock under employee stock purchase plan (in shares)
 
 
 
 
 
 
Issuance of common stock under employee stock purchase plan
Tax benefit (deficit) from stock options exercised, restricted stock vesting and employee stock purchase plan
(14)
(14)
(14)
Common stock dividends
(184)
(184)
(184)
Ending balances at Nov. 01, 2014
4,573 
4,569 
35 
377 
3,689 
468 
Ending balances (in shares) at Nov. 01, 2014
 
 
350 
 
 
 
 
Beginning balances at Aug. 02, 2014
 
 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings, nine months ended
107 
 
 
 
 
 
 
Foreign currency translation adjustments
(25)
 
 
 
 
 
 
Unrealized losses on available-for-sale investments
(1)
(1)
 
 
 
 
 
Reclassification of foreign currency translation adjustments into earnings due to sale of business
 
 
 
 
 
 
Ending balances at Nov. 01, 2014
4,573 
4,569 
 
 
 
 
 
Beginning balances at Jan. 31, 2015
5,000 
4,995 
35 
437 
4,141 
382 
Beginning balances (in shares) at Jan. 31, 2015
 
 
352 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings, nine months ended
418 
418 
418 
Foreign currency translation adjustments
(19)
(19)
(19)
Unrealized losses on available-for-sale investments
 
 
 
 
 
 
Reclassification of foreign currency translation adjustments into earnings due to sale of business
(67)
(67)
(67)
Sale of noncontrolling interest
(5)
(5)
Stock-based compensation
80 
80 
80 
 
 
 
Restricted stock vested and stock options exercised (in shares)
 
 
 
 
 
 
Restricted stock vested and stock options exercised
36 
36 
36 
Issuance of common stock under employee stock purchase plan (in shares)
 
 
 
 
 
 
Issuance of common stock under employee stock purchase plan
Tax benefit (deficit) from stock options exercised, restricted stock vesting and employee stock purchase plan
Common stock dividends
(421)
(421)
(424)
Stock Repurchased During Period, Shares
11.3 
 
(11.0)
 
 
 
 
Stock Repurchased During Period, Value
(388)
(388)
(1)
(387)
 
 
 
Ending balances at Oct. 31, 2015
$ 4,650 
$ 4,650 
$ 34 
$ 185 
$ 4,135 
$ 296 
$ 0 
Ending balances (in shares) at Oct. 31, 2015
 
 
345 
 
 
 
 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (PARENTHETICAL)
3 Months Ended 9 Months Ended
Oct. 31, 2015
Nov. 1, 2014
Oct. 31, 2015
Nov. 1, 2014
Statement of Stockholders' Equity [Abstract]
 
 
 
 
Dividends declared per common share (in dollars per share)
$ 0.23 
$ 0.19 
$ 1.20 
$ 0.53 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
9 Months Ended
Oct. 31, 2015
Nov. 1, 2014
Operating activities
 
 
Net earnings including noncontrolling interests
$ 418 
$ 715 
Adjustments to reconcile net earnings to total cash provided by (used in) operating activities:
 
 
Depreciation
494 
484 
Restructuring charges
189 
17 
Gain on sale of business, net
(99)
(1)
Stock-based compensation
80 
63 
Deferred income taxes
(43)
(381)
Other, net
Changes in operating assets and liabilities:
 
 
Receivables
229 
237 
Merchandise inventories
(1,494)
(1,541)
Other assets
20 
14 
Accounts payable
1,152 
1,526 
Other liabilities
(271)
(263)
Income taxes
(215)
(100)
Total cash provided by operating activities
463 
774 
Investing activities
 
 
Additions to property and equipment
(493)
(425)
Purchases of investments
(2,012)
(2,067)
Sales of investments
1,816 
1,084 
Proceeds from sale of business, net of cash transferred upon sale
102 
38 
Change in restricted assets
(45)
25 
Settlement of net investment hedges
14 
Other, net
Total cash used in investing activities
(618)
(1,342)
Financing activities
 
 
Repurchase of common stock
(385)
Repayments of debt
(18)
(19)
Dividends paid
(421)
(185)
Issuance of common stock
44 
27 
Other, net
19 
Total cash used in financing activities
(761)
(175)
Effect of exchange rate changes on cash
(13)
(6)
Decrease in cash and cash equivalents
(929)
(749)
Cash and cash equivalents at beginning of period, excluding held for sale
2,432 
2,678 
Cash and cash equivalents held for sale at beginning of period
194 
 
Cash and cash equivalents at end of period
$ 1,697 
$ 1,929 
Basis of Presentation (Notes)
Basis of Presentation
Basis of Presentation
 
Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us,” and “our” in these Notes to Condensed Consolidated Financial Statements refers to Best Buy Co., Inc. and its consolidated subsidiaries.
 
In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the United States (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements.

Historically, we have generated a higher proportion of our revenue and earnings in the fiscal fourth quarter, which includes the majority of the holiday shopping season in the U.S., Canada and Mexico. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The interim financial statements and the related notes in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015. The first nine months of fiscal 2016 and fiscal 2015 included 39 weeks.

In order to align our fiscal reporting periods and comply with statutory filing requirements, we consolidate the financial results of our Mexico operations on a one-month lag. Our policy is to accelerate recording the effect of events occurring in the lag period that significantly affect our consolidated financial statements. No such events were identified for this period.

In preparing the accompanying condensed consolidated financial statements, we evaluated the period from November 1, 2015, through the date the financial statements were issued, for material subsequent events requiring recognition or disclosure. No such events were identified for this period.

Discontinued Operations
Discontinued Operations
Discontinued Operations

Discontinued operations are primarily comprised of Jiangsu Five Star Appliance Co., Limited ("Five Star") within our International segment. Following the sale of Five Star in February 2015, we continue to hold one retail property in Shanghai, China, which remains held for sale at October 31, 2015, as we continue to actively market the property. The presentation of discontinued operations has been retrospectively applied to all prior periods presented.

The composition of assets and liabilities disposed of as a result of the sale of Five Star was as follows ($ in millions):
 
February 13, 2015
Cash and cash equivalents
$
125

Receivables
113

Merchandise inventories
252

All other assets
461

Total assets
$
951

 
 
Accounts payable
$
478

All other liabilities
128

Total liabilities
$
606



The aggregate financial results of discontinued operations were as follows ($ in millions):

 
Three Months Ended
 
Nine Months Ended
 
October 31, 2015
 
November 1, 2014
 
October 31, 2015
 
November 1, 2014
Revenue
$

 
$
347

 
$
217

 
$
1,181

 
 
 
 
 
 
 
 
Restructuring charges

 
4

 

 
5

 
 
 
 
 
 
 
 
Loss from discontinued operations before income tax benefit (expense)
(4
)
 
(12
)
 
(14
)
 
(8
)
Income tax benefit (expense)

 
3

 
3

 
(1
)
Gain on sale of discontinued operations

 

 
99

 
2

Net gain (loss) from discontinued operations, including noncontrolling interests
(4
)
 
(9
)
 
88

 
(7
)
Net earnings from discontinued operations attributable to noncontrolling interests

 

 

 
(1
)
Net gain (loss) from discontinued operations attributable to Best Buy Co., Inc. shareholders
$
(4
)
 
$
(9
)
 
$
88

 
$
(8
)
Fair Value Measurements (Notes)
Fair Value Measurements
Fair Value Measurements
 
Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs:
 
Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.
 
Level 2 — Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:
 
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets in non-active markets;
Inputs other than quoted prices that are observable for the asset or liability; and
Inputs that are derived principally from or corroborated by other observable market data.
 
Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 
The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The following tables set forth by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis at October 31, 2015, January 31, 2015, and November 1, 2014, according to the valuation techniques we used to determine their fair values ($ in millions).
 
 
 
Fair Value Measurements
Using Inputs Considered as
 
Fair Value at
October 31, 2015
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
ASSETS
 

 
 

 
 

 
 

Cash and cash equivalents
 

 
 

 
 

 
 

Money market funds
$
2

 
$
2

 
$

 
$

Commercial paper
108

 

 
108

 

Time deposits
222

 

 
222

 

Short-term investments
 

 
 

 
 

 
 

Corporate bonds
333

 

 
333

 

Commercial paper
288

 

 
288

 

Time deposits
1,029

 

 
1,029

 

Other current assets
 
 
 
 
 
 
 
Foreign currency derivative instruments
14

 

 
14

 

Time deposits
79

 

 
79

 

Other assets
 

 
 

 
 

 
 

Interest rate swap derivative instruments
10

 

 
10

 

Auction rate securities
2

 

 

 
2

Marketable securities that fund deferred compensation
96

 
96

 

 

 
 
 
Fair Value Measurements
Using Inputs Considered as
 
Fair Value at
January 31, 2015
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
ASSETS
 

 
 

 
 

 
 

Cash and cash equivalents
 

 
 

 
 

 
 

Money market funds
$
265

 
$
265

 
$

 
$

Corporate bonds
13

 

 
13

 

Commercial paper
165

 

 
165

 

Time deposits
100

 

 
100

 

Short-term investments
 

 
 

 
 

 
 

Corporate bonds
276

 

 
276

 

Commercial paper
306

 

 
306

 

Time deposits
874

 

 
874

 

Other current assets
 

 
 

 
 

 
 

Foreign currency derivative instruments
30

 

 
30

 

Time deposits
83

 

 
83

 

Other assets
 

 
 

 
 

 
 

Interest rate swap derivative instruments
1

 

 
1

 

Auction rate securities
2

 

 

 
2

Marketable securities that fund deferred compensation
97

 
97

 

 

 
 
 
 
 
 
 
 
ASSETS HELD FOR SALE
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
 
Money market funds
16

 
16

 

 

Time deposits
124

 

 
124

 

 
 
 
 
Fair Value Measurements
Using Inputs Considered as
 
Fair Value at
November 1, 2014
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
ASSETS
 

 
 

 
 

 
 

Cash and cash equivalents
 
 
 
 
 
 
 
Money market funds
$
74

 
$
74

 
$

 
$

Corporate bonds
31

 

 
31

 

Commercial paper
91

 

 
91

 

Time deposits
66

 

 
66

 

Short-term investments
 

 
 

 
 

 
 

Corporate bonds
97

 

 
97

 

Commercial paper
381

 

 
381

 

Time deposits
731

 

 
731

 

Other current assets
 

 
 

 
 

 
 

Foreign currency derivative instruments
4

 

 
4

 

Time deposits
181

 

 
181

 

Other assets
 

 
 

 
 

 
 

Auction rate securities
9

 

 

 
9

Marketable equity securities
9

 
9

 

 

Marketable securities that fund deferred compensation
97

 
97

 

 


There was no change in the beginning and ending balances of items measured at fair value on a recurring basis in the tables above that used significant unobservable inputs (Level 3) for the three and nine months ended October 31, 2015.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
 
Money Market Funds. Our money market fund investments were measured at fair value as they trade in an active market using quoted market prices and therefore, were classified as Level 1.

Corporate Bonds. Our corporate bond investments were measured at fair value using quoted market prices. They were classified as Level 2 as they trade in a non-active market for which bond prices are readily available.
 
Commercial Paper. Our investments in commercial paper were measured using inputs based upon quoted prices for similar instruments in active markets and, therefore, were classified as Level 2.

Time Deposits. Our time deposits are balances held with banking institutions that cannot be withdrawn for specified terms without a penalty. Time deposits are held at face value plus accrued interest, which approximates fair value, and are classified as Level 2.
 
Foreign Currency Derivative Instruments. Comprised primarily of foreign currency forward contracts and foreign currency swap contracts, our foreign currency derivative instruments were measured at fair value using readily observable market inputs, such as quotations on forward foreign exchange points and foreign interest rates. Our foreign currency derivative instruments were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

Interest Rate Swap Derivative Instruments. Our interest rate swap contracts were measured at fair value using readily observable inputs, such as the LIBOR interest rate. Our interest rate swap derivative instruments were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.
 
Auction Rate Securities. Our investments in auction rate securities ("ARS") were classified as Level 3 as quoted prices were unavailable. Due to limited market information, we utilized a discounted cash flow ("DCF") model to derive an estimate of fair value. The assumptions we used in preparing the DCF model included estimates with respect to the amount and timing of future interest and principal payments, forward projections of the interest rate benchmarks, the probability of full repayment of the principal considering the credit quality and guarantees in place, and the rate of return required by investors to own such securities given the current liquidity risk associated with ARS.
 
Marketable Equity Securities. Our marketable equity securities were measured at fair value using quoted market prices. They were classified as Level 1 as they trade in an active market for which closing stock prices are readily available.
 
Marketable Securities that Fund Deferred Compensation. The assets that fund our deferred compensation consist of investments in mutual funds. These investments were classified as Level 1 as the shares of these mutual funds trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis
 
Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets, goodwill and other intangible assets, which are remeasured when the derived fair value is below carrying value on our Condensed Consolidated Balance Sheets. For these assets, we do not periodically adjust carrying value to fair value, except in the event of impairment. When we determine that impairment has occurred, the carrying value of the asset is reduced to fair value and the difference is recorded within operating income in our Consolidated Statements of Earnings.

The following table summarizes the fair value remeasurements for non-restructuring property and equipment impairments and restructuring impairments recorded during the nine months ended October 31, 2015, and November 1, 2014 ($ in millions):
 
Nine Months Ended
 
Nine Months Ended
 
October 31, 2015
 
November 1, 2014
 
Impairments
 
Remaining Net Carrying Value(1)
 
Impairments
 
Remaining Net Carrying Value(1)
Continuing operations
 
 
 
 
 
 
 
Property and equipment (non-restructuring)
$
34

 
$
10

 
$
27

 
$
17

Restructuring activities(2)
 
 
 
 
 
 
 
Tradename
40

 

 

 

Property and equipment
30

 

 

 

Total continuing operations
$
104

 
$
10

 
$
27

 
$
17

Discontinued operations
 
 
 
 
 
 
 
Property and equipment
$

 
$

 
$
1

 
$

Total discontinued operations
$

 
$

 
$
1

 
$

(1)
Remaining net carrying value approximates fair value.
(2)
See Note 5, Restructuring Charges, for additional information.

All of the fair value remeasurements included in the table above were based on significant unobservable inputs (Level 3). Fixed asset fair values were derived using a DCF model to estimate the present value of net cash flows that the asset or asset group was expected to generate. The key inputs to the DCF model generally included our forecasts of net cash generated from revenue, expenses and other significant cash outflows, such as capital expenditures, as well as an appropriate discount rate. For the tradename, fair value was derived using the relief from royalty method. In the case of assets for which the impairment was the result of restructuring activities, no future cash flows have been assumed as the assets will cease to be used and expected sale values are nominal.

Fair Value of Financial Instruments

Our financial instruments, other than those presented in the disclosures above, include cash, receivables, other investments, accounts payable, other payables, and long-term debt. The fair values of cash, receivables, accounts payable and other payables approximated carrying values because of the short-term nature of these instruments. Fair values for other investments held at cost are not readily available, but we estimate that the carrying values for these investments approximate fair value. See Note 6, Debt, for information about the fair value of our long-term debt.
Goodwill and Intangible Assets (Notes)
Goodwill and Intangible Assets
Goodwill and Intangible Assets
 
The changes in the carrying values of goodwill and indefinite-lived tradenames by segment were as follows in the nine months ended October 31, 2015, and November 1, 2014 ($ in millions):
 
Goodwill
 
Indefinite-lived Tradenames
 
Domestic
 
Domestic
 
International
 
Total
Balances at January 31, 2015
$
425

 
$
18

 
$
39

 
$
57

Changes in foreign currency exchange rates

 

 
1

 
1

Canada brand restructuring(1)

 

 
(40
)
 
(40
)
Balances at October 31, 2015
$
425

 
$
18

 
$

 
$
18

 
(1)
Represents the Future Shop tradename impaired as a result of the Canadian brand consolidation in the first quarter of fiscal 2016. See Note 5, Restructuring Charges, for further discussion of the Canadian brand consolidation.
 
Goodwill
 
Indefinite-lived Tradenames
 
Domestic
 
Domestic
 
International
 
Total
Balances at February 1, 2014
$
425

 
$
19

 
$
82

 
$
101

Changes in foreign currency exchange rates

 

 
(2
)
 
(2
)
Balances at November 1, 2014
$
425

 
$
19

 
$
80

 
$
99



The following table provides the gross carrying amount of goodwill and cumulative goodwill impairment ($ in millions):
 
October 31, 2015
 
January 31, 2015
 
November 1, 2014
 
Gross
Carrying
Amount
 
Cumulative
Impairment
 
Gross
Carrying
Amount(1)
 
Cumulative
Impairment(1)
 
Gross
Carrying
Amount
 
Cumulative
Impairment
Goodwill
$
1,100

 
$
(675
)
 
$
1,100

 
$
(675
)
 
$
1,308

 
$
(883
)

(1)
Excludes the gross carrying amount and cumulative impairment related to Five Star, which was held for sale at January 31, 2015. The sale was completed on February 13, 2015.

Restructuring Charges (Notes)
Restructuring Charges
Restructuring Charges

Charges incurred in the nine months ended October 31, 2015, and November 1, 2014, for our restructuring activities were as follows ($ in millions):
 
Nine Months Ended
 
October 31, 2015
 
November 1, 2014
Continuing operations
 
 
 
Canadian brand consolidation
$
189

 
$

Renew Blue
(2
)
 
18

Other restructuring activities(1)
2

 
(6
)
Total continuing operations
189

 
12

Discontinued operations
 
 
 
Renew Blue

 
5

Total restructuring charges
$
189

 
$
17


(1)
Represents activity related to our remaining vacant space liability for U.S. large-format store closures in fiscal 2013. We may continue to incur immaterial adjustments to the liability for changes in sublease assumptions or potential lease buyouts. In addition, lease payments for vacated stores will continue until leases expire or are terminated. The remaining vacant space liability was $18 million at October 31, 2015.

Canadian Brand Consolidation

In the first quarter of fiscal 2016, we consolidated the Future Shop and Best Buy stores and websites in Canada under the Best Buy brand. This resulted in the permanent closure of 66 Future Shop stores and the conversion of the remaining 65 Future Shop stores to the Best Buy brand. In the first nine months of fiscal 2016, we incurred $189 million of restructuring charges related to implementing these changes, which primarily consisted of lease exit costs, a tradename impairment, property and equipment impairments, employee termination benefits and inventory write-downs. In addition, in the first nine months of fiscal 2016, we incurred $9 million of non-restructuring charges related to the changes. We expect to incur total pre-tax charges in the range of $210 million to $250 million related to this action, which includes restructuring charges and other non-restructuring charges. While we expect the majority of these costs to be borne in fiscal 2016, we expect to continue transformation of our Canadian operations throughout fiscal 2017 and fiscal 2018. The total expected charges include approximately $140 million to $180 million of cash charges.

The inventory write-downs related to our Canadian brand consolidation are presented in restructuring charges – cost of goods sold in our Consolidated Statements of Earnings, and the remainder of the restructuring charges are presented in restructuring charges in our Consolidated Statements of Earnings. The composition of total restructuring charges we incurred for the Canadian brand consolidation in the first nine months of fiscal 2016 was as follows ($ in millions):
 
International
Continuing operations
 
Inventory write-downs
$
4

Property and equipment impairments
30

Tradename impairment
40

Termination benefits
26

Facility closure and other costs
89

Total continuing operations
$
189



The following tables summarize our restructuring accrual activity during the nine months ended October 31, 2015, related to termination benefits and facility closure and other costs associated with Canadian brand consolidation ($ in millions):
 
Termination
Benefits
 
Facility
Closure and
Other Costs
 
Total
Balances at January 31, 2015
$

 
$

 
$

Charges
28

 
113

 
141

Cash payments
(22
)
 
(28
)
 
(50
)
Adjustments(1)
(2
)
 
(9
)
 
(11
)
Changes in foreign currency exchange rates

 
(3
)
 
(3
)
Balances at October 31, 2015
$
4

 
$
73

 
$
77


(1) The adjustments related to termination benefits relate to higher-than-expected employee retention. Adjustments to facility closure and other costs represent changes in sublease assumptions.

Renew Blue

In the fourth quarter of fiscal 2013, we launched the Renew Blue strategy, which included initiatives intended to reduce costs and improve operating performance. These initiatives included focusing on core business activities, reducing headcount, updating our store operating model and optimizing our real estate portfolio. These cost reduction initiatives represented one of the key Renew Blue priorities. We recognized a $2 million benefit and incurred $18 million of restructuring charges related to Renew Blue in the first nine months of fiscal 2016 and 2015, respectively. The charges in the first nine months of fiscal 2015 were primarily comprised of employee termination benefits. We expect to continue to implement cost reduction initiatives throughout the remainder of fiscal 2016 and into fiscal 2017, as we further analyze our operations and strategies.

For continuing operations, the inventory write-downs related to our Renew Blue restructuring activities are presented in restructuring charges - cost of goods sold in our Consolidated Statements of Earnings and the remainder of the restructuring charges are presented in restructuring charges. The restructuring charges from discontinued operations related to this plan are presented in discontinued operations, net of tax.

The composition of the restructuring charges we incurred for this program in the nine months ended October 31, 2015, and November 1, 2014, as well as the cumulative amount incurred from fiscal 2013 through October 31, 2015, was as follows ($ in millions):
 
Domestic
 
International
 
Total
 
Nine Months Ended
 
Cumulative
Amount
 
Nine Months Ended
 
Cumulative
Amount
 
Nine Months Ended
 
Cumulative
Amount
 
October 31, 2015
 
November 1, 2014
 
 
October 31, 2015
 
November 1, 2014
 
 
October 31, 2015
 
November 1, 2014
 
Continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory write-downs
$

 
$

 
$
1

 
$

 
$

 
$

 
$

 
$

 
$
1

Property and equipment impairments

 

 
14

 

 
1

 
25

 

 
1

 
39

Termination benefits
(2
)
 
11

 
159

 

 
3

 
38

 
(2
)
 
14

 
197

Investment impairments

 

 
43

 

 

 

 

 

 
43

Facility closure and other costs
1

 
1

 
5

 
(1
)
 
2

 
50

 

 
3

 
55

Total continuing operations
(1
)
 
12

 
222

 
(1
)
 
6

 
113

 
(2
)
 
18

 
335

Discontinued operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment impairments

 

 

 

 

 
1

 

 

 
1

Termination benefits

 

 

 

 
2

 
16

 

 
2

 
16

Facility closure and other costs

 

 

 

 
3

 
11

 

 
3

 
11

Total Discontinued Operations

 

 

 

 
5

 
28

 

 
5

 
28

Total
$
(1
)
 
$
12

 
$
222

 
$
(1
)
 
$
11

 
$
141

 
$
(2
)
 
$
23

 
$
363



The following tables summarize our restructuring accrual activity during the nine months ended October 31, 2015, and November 1, 2014, related to termination benefits and facility closure and other costs associated with this program ($ in millions):
 
Termination
Benefits
 
Facility
Closure and
Other Costs
 
Total
Balances at January 31, 2015
$
16

 
$
23

 
$
39

Charges

 

 

Cash payments
(7
)
 
(8
)
 
(15
)
Adjustments(1)
(8
)
 
(5
)
 
(13
)
Changes in foreign currency exchange rates

 

 

Balances at October 31, 2015
$
1

 
$
10

 
$
11


(1)
Adjustments to termination benefits were due to higher-than-expected employee retention. In addition, adjustments include the remaining liabilities eliminated as a result of the sale of Five Star, as described in Note 2, Discontinued Operations.
 
Termination
Benefits
 
Facility
Closure and
Other Costs
 
Total
Balances at February 1, 2014
$
111

 
$
51

 
$
162

Charges
35

 
12

 
47

Cash payments
(117
)
 
(16
)
 
(133
)
Adjustments(1)
(19
)
 
(5
)
 
(24
)
Changes in foreign currency exchange rates

 
(6
)
 
(6
)
Balances at November 1, 2014
$
10

 
$
36

 
$
46


(1)
Adjustments to termination benefits were due to higher-than-expected employee retention. Adjustments to facility closure and other costs represent changes in sublease assumptions.
Debt (Notes)
Debt
Debt

Long-term debt consisted of the following ($ in millions):
 
October 31, 2015
 
January 31, 2015
 
November 1, 2014
2016 Notes
$
350

 
$
349

 
$
350

2018 Notes
500

 
500

 
500

2021 Notes
649

 
649

 
649

Interest rate swap valuation adjustments
10

 
1

 

Financing lease obligations
88

 
69

 
77

Capital lease obligations
42

 
52

 
59

Other debt

 
1

 

   Total long-term debt
1,639

 
1,621

 
1,635

Less: current portion(1)
(383
)
 
(41
)
 
(44
)
   Total long-term debt, less current portion
$
1,256

 
$
1,580

 
$
1,591

 
(1)
Our 2016 Notes due March 15, 2016, are classified in the current portion of long-term debt as of October 31, 2015.

The fair value of total long-term debt approximated $1,718 million, $1,677 million, and $1,672 million at October 31, 2015, January 31, 2015, and November 1, 2014, respectively, based primarily on the market prices quoted from external sources, compared with carrying values of $1,639 million, $1,621 million, and $1,635 million, respectively. If long-term debt was measured at fair value in the financial statements, it would be classified primarily as Level 2 in the fair value hierarchy.

See Note 5, Debt, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015, for additional information regarding the terms of our debt facilities, debt instruments and other obligations.
Derivative Instruments (Notes)
Derivative Instruments
Derivative Instruments

We manage our economic and transaction exposure to certain risks through the use of foreign currency derivative instruments. Our objective in holding these derivatives is to reduce the volatility of net earnings and cash flows, as well as net asset value associated with changes in foreign currency exchange rates. We do not hold derivative instruments for trading or speculative purposes. We have no derivatives that have credit risk-related contingent features, and we mitigate our credit risk by engaging with major financial institutions as our counterparties.

We record all foreign currency derivative instruments on our Condensed Consolidated Balance Sheets at fair value and evaluate hedge effectiveness prospectively and retrospectively when electing to apply hedge accounting. We formally document all hedging relations at inception for derivative hedges and the underlying hedged items, as well as the risk management objectives and strategies for undertaking the hedge transaction. In addition, we have derivatives which are not designated as hedging instruments.

Net Investment Hedges

We use foreign exchange forward contracts to hedge against the effect of Canadian dollar exchange rate fluctuations on a portion of our net investment in our Canadian operations. The contracts have terms up to 12 months. For a net investment hedge, we recognize changes in the fair value of the derivative as a component of foreign currency translation within other comprehensive income to offset a portion of the change in translated value of the net investment being hedged, until the investment is sold or liquidated. We limit recognition in net earnings of amounts previously recorded in other comprehensive income to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. We report the ineffective portion of the gain or loss, if any, in net earnings.

Interest Rate Swaps

We use "receive fixed-rate, pay variable-rate" interest rate swaps to partially mitigate the effect of interest rate fluctuations on our 2018 Notes and 2021 Notes. Our interest rate swap contracts are considered perfect hedges because the critical terms and notional amounts match those of our fixed-rate debt being hedged and are therefore accounted as a fair value hedge using the shortcut method. Under the shortcut method, we recognize the change in the fair value of the derivatives with an offsetting change to the carrying value of the debt. Accordingly, there is no impact on our Consolidated Statements of Earnings from the fair value of the derivatives.

Derivatives Not Designated as Hedging Instruments

We use foreign currency forward contracts to manage the impact of fluctuations in foreign currency exchange rates relative to recognized receivable and payable balances denominated in non-functional currencies and on certain forecast inventory purchases denominated in non-functional currencies. The contracts generally have terms of up to 12 months. These derivative instruments are not designated in hedging relationships, and, therefore, we record gains and losses on these contracts directly to net earnings.

Summary of Derivative Balances

The following table presents the gross fair values for outstanding derivative instruments and the corresponding classification at October 31, 2015, January 31, 2015 and November 1, 2014 ($ in millions):
 
October 31, 2015
 
January 31, 2015
 
November 1, 2014
Contract Type
Assets
 
Liabilities
 
Assets
 
Liabilities
 
Assets
 
Liabilities
Derivatives designated as net investment hedges(1)
$
12

 
$

 
$
19

 
$

 
$
1

 
$

Derivatives designated as interest rate swaps(2)
10

 

 
1

 

 

 

No hedge designation (foreign exchange forward contracts)(1)
2

 

 
11

 

 
3

 

Total
$
24

 
$

 
$
31

 
$

 
$
4

 
$

(1)
The fair value is recorded in other current assets or accrued liabilities.
(2)
The fair value is recorded in other assets or long-term liabilities.
    
The following table presents the effects of derivative instruments on Other Comprehensive Income ("OCI") and on our Consolidated Statements of Earnings for the three and nine months ended October 31, 2015, and November 1, 2014, respectively ($ in millions):
 
Three Months Ended
 
Three Months Ended
 
Nine Months Ended
 
Nine Months Ended
 
October 31, 2015
 
November 1, 2014
 
October 31, 2015
 
November 1, 2014
Contract Type
Pre-tax Gain(Loss) Recognized in OCI
 
Gain(Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion)
 
Pre-tax Gain(Loss) Recognized in OCI
 
Gain(Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion)
 
Pre-tax Gain(Loss) Recognized in OCI
 
Gain(Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion)
 
Pre-tax Gain(Loss) Recognized in OCI
 
Gain(Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion)
Derivatives designated as net investment hedges
$

 
$

 
$
1

 
$

 
$
6

 
$

 
$
1

 
$



The following tables present the effects of derivative instruments on our Consolidated Statements of Earnings for the three and nine months ended October 31, 2015, and November 1, 2014, respectively ($ in millions):
 
Gain (Loss) Recognized within SG&A
 
Gain (Loss) Recognized within SG&A
 
Three Months Ended
 
Three Months Ended
 
Nine Months Ended
 
Nine Months Ended
Contract Type
October 31, 2015
 
November 1, 2014
 
October 31, 2015
 
November 1, 2014
No hedge designation (foreign exchange forward contracts)
$
1

 
$
4

 
$
(3
)
 
$



 
Gain (Loss) Recognized within Interest Expense
 
Gain (Loss) Recognized within Interest Expense
 
Three Months Ended
 
Three Months Ended
 
Nine Months Ended
 
Nine Months Ended
Contract Type
October 31, 2015
 
November 1, 2014
 
October 31, 2015
 
November 1, 2014
Interest rate swap gain (loss)
$
(3
)
 
$

 
$
9

 
$

Adjustments to carrying value of long-term debt
3

 

 
(9
)
 

Net impact on Consolidated Statements of Earnings
$

 
$

 
$

 
$



The following table presents the notional amounts of our derivative instruments at October 31, 2015, January 31, 2015 and November 1, 2014 ($ in millions):
 
Notional Amount
Contract Type
October 31, 2015
 
January 31, 2015
 
November 1, 2014
Derivatives designated as net investment hedges
$
222

 
$
197

 
$
106

Derivatives designated as interest rate swaps
750

 
145

 

No hedge designation (foreign exchange forward contracts)
195

 
212

 
111

Total
$
1,167

 
$
554

 
$
217

Earnings per Share (Notes)
Earnings per Share
Earnings per Share
 
We compute our basic earnings per share based on the weighted-average number of common shares outstanding and our diluted earnings per share based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had potentially dilutive common shares been issued. Potentially dilutive securities include stock options, nonvested share awards and shares issuable under our employee stock purchase plan. Nonvested market-based share awards and nonvested performance-based share awards are included in the average diluted shares outstanding for each period if established market or performance criteria have been met at the end of the respective periods.

The following table presents a reconciliation of the numerators and denominators of basic and diluted earnings per share from continuing operations attributable to Best Buy Co., Inc. ($ and shares in millions):
 
Three Months Ended
 
Nine Months Ended
 
October 31, 2015
 
November 1, 2014
 
October 31, 2015
 
November 1, 2014
Numerator
 

 
 

 
 
 
 
Net earnings from continuing operations attributable to Best Buy Co., Inc.
$
129

 
$
116

 
$
330

 
$
722

 


 


 
 
 
 
Denominator
 
 
 
 
 
 
 
Weighted-average common shares outstanding
344.7

 
350.1

 
348.9

 
349.0

Effect of potentially dilutive securities:
 
 
 
 
 
 
 
Nonvested share awards
4.3

 
3.9

 
4.7

 
3.5

Weighted-average common shares outstanding, assuming dilution
349.0

 
354.0

 
353.6

 
352.5

 
 
 
 
 
 
 
 
Net earnings per share from continuing operations attributable to Best Buy Co., Inc.
 
 
 
 
 
 
 
Basic
$
0.37

 
$
0.33

 
$
0.95

 
$
2.07

Diluted
$
0.37

 
$
0.33

 
$
0.93

 
$
2.04



The computation of weighted-average common shares outstanding, assuming dilution, excluded options to purchase 10.1 million and 11.6 million shares of our common stock for the three months ended October 31, 2015, and November 1, 2014, respectively, and options to purchase 10.0 million and 13.8 million shares of our common stock for the nine months ended October 31, 2015, and November 1, 2014, respectively. These amounts were excluded as the options’ exercise prices were greater than the average market price of our common stock for the periods presented, and, therefore, the effect would be anti-dilutive (i.e., including such options would result in higher earnings per share).
Comprehensive Income (Notes)
Comprehensive Income
Comprehensive Income
 
The following tables provide a reconciliation of the components of accumulated other comprehensive income, net of tax, attributable to Best Buy Co., Inc. for the three and nine months ended October 31, 2015, and November 1, 2014, respectively ($ in millions):
 
Foreign Currency Translation
 
Available-For-Sale Investments
 
Total
Balances at August 1, 2015
$
298

 
$

 
$
298

Foreign currency translation adjustments
(2
)
 

 
(2
)
Balances at October 31, 2015
$
296

 
$

 
$
296

 
 
 
 
 
 
 
Foreign Currency Translation
 
Available-For-Sale Investments
 
Total
Balances at January 31, 2015
$
382

 
$

 
$
382

Foreign currency translation adjustments
(19
)
 

 
(19
)
Reclassification of foreign currency translation adjustments into earnings due to sale of business
(67
)
 

 
(67
)
Balances at October 31, 2015
$
296

 
$

 
$
296



 
Foreign Currency Translation
 
Available-For-Sale Investments
 
Total
Balances at August 2, 2014
$
488

 
$
6

 
$
494

Foreign currency translation adjustments
(25
)
 

 
(25
)
Unrealized losses on available-for-sale investments

 
(1
)
 
(1
)
Balances at November 1, 2014
$
463

 
$
5

 
$
468

 
 
 
 
 
 
 
Foreign Currency Translation
 
Available-For-Sale Investments
 
Total
Balances at February 1, 2014
$
485

 
$
7

 
$
492

Foreign currency translation adjustments
(22
)
 

 
(22
)
Unrealized losses on available-for-sale investments

 
(2
)
 
(2
)
Balances at November 1, 2014
$
463

 
$
5

 
$
468



The gains and losses on our net investment hedges, which are included in foreign currency translation, were not material for the periods presented. There is generally no tax impact related to foreign currency translation adjustments, as the earnings are considered permanently reinvested. In addition, there were no material tax impacts related to unrealized gains or losses on available-for-sale investments in the periods presented.
Repurchase of Common Stock (Notes)
Schedule of Repurchases of Common Stock [Table Text Block]
10.    Repurchase of Common Stock

We have a $5.0 billion share repurchase program that was authorized by our Board of Directors in June 2011. At the beginning of fiscal 2016, there was $4.0 billion available for share repurchases. There is no expiration date governing the period over which we can repurchase shares under the June 2011 share repurchase program. On March 3, 2015, we announced that we planned to resume share repurchases under the 2011 program, with the intent to purchase $1.0 billion in the 3 years following the announcement. We anticipate continuing to purchase shares in the near term, which could result in our reaching the $1.0 billion threshold prior to the three years previously disclosed.

For the three and nine months ended October 31, 2015, we repurchased 1.8 million and 11.3 million shares of our common stock at a cost of $64 million and $388 million, respectively. No shares were repurchased during the three and nine months ended November 1, 2014. At October 31, 2015, approximately $3.6 billion remained available for additional purchases under the June 2011 share repurchase program. Between the end of the third quarter of fiscal 2016 and December 3, 2015, we repurchased an incremental 3.0 million shares of our common stock at a cost of $95 million. Repurchased shares have been retired and constitute authorized, but unissued shares.
Income Taxes (Notes)
Income Tax Disclosure [Text Block]
Income Taxes
 
In the first quarter of fiscal 2015, we filed an election with the Internal Revenue Service to treat a U.K. subsidiary as a disregarded entity such that its assets were deemed to be assets held directly by a U.S. entity for U.S. tax purposes. This tax-only election resulted in the elimination of our outside basis difference in the U.K. subsidiary. Additionally, the election resulted in the recognition of a deferred tax asset (and corresponding income tax benefit) for the remaining unrecognized inside tax basis in the U.K. subsidiary’s intangible asset. Excluding the $353 million income tax benefit related to this election, our effective tax rate in the first nine months of fiscal 2015 would have been 37.3%. See Note 10, Income Taxes, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015, for additional information.
Segments (Notes)
Segments
Segments
 
Our chief operating decision maker ("CODM") is our Chief Executive Officer. Our business is organized into two segments: Domestic (which is comprised of all operations within the U.S. and its territories) and International (which is comprised of all operations outside the U.S. and its territories). Our CODM has ultimate responsibility for enterprise decisions. Our CODM determines, in particular, resource allocation for, and monitors performance of, the consolidated enterprise, the Domestic segment and the International segment. The Domestic and International segment managers have responsibility for operating decisions, allocating resources and assessing performance within their respective segments. Our CODM relies on internal management reporting that analyzes enterprise results to the net earnings level and segment results to the operating income level.
 
We aggregate our Canada and Mexico businesses into one International operating segment. Our Domestic and International operating segments also represent our reportable segments. The accounting policies of the segments are the same as those described in Note 1, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015.

Revenue by reportable segment was as follows ($ in millions):
 
Three Months Ended
 
Nine Months Ended
 
October 31, 2015
 
November 1, 2014
 
October 31, 2015
 
November 1, 2014
Domestic
$
8,090

 
$
7,992

 
$
23,858

 
$
23,358

International