BEST BUY CO INC, 10-Q filed on 12/5/2012
Quarterly Report
Document and Entity Information Document
9 Months Ended
Nov. 3, 2012
Nov. 30, 2012
Document Information [Line Items]
 
 
Entity Registrant Name
BEST BUY CO INC 
 
Current Fiscal Year End Date
--02-02 
 
Document Fiscal Year Focus
2013 
 
Amendment Flag
false 
 
Entity Current Reporting Status
Yes 
 
Entity Common Stock, Shares Outstanding
 
338,087,851 
Document Fiscal Period Focus
Q3 
 
Document Type
10-Q 
 
Entity Central Index Key
0000764478 
 
Document Period End Date
Nov. 03, 2012 
 
Entity Filer Category
Large Accelerated Filer 
 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Nov. 3, 2012
Mar. 3, 2012
Oct. 29, 2011
CURRENT ASSETS
 
 
 
Cash and cash equivalents
$ 309 
$ 1,199 
$ 2,073 
Short-term investments
20 
Receivables
2,250 
2,288 
1,968 
Merchandise inventories
8,156 
5,731 
7,780 
Other current assets
1,131 
1,079 
1,098 
Total current assets
11,846 
10,297 
12,939 
PROPERTY AND EQUIPMENT, NET
3,407 
3,471 
3,697 
GOODWILL
1,344 
1,335 
2,447 
TRADENAMES, NET
131 
130 
131 
CUSTOMER RELATIONSHIPS, NET
213 
229 
165 
EQUITY AND OTHER INVESTMENTS
91 
140 
279 
OTHER ASSETS
524 
403 
469 
TOTAL ASSETS
17,556 
16,005 
20,127 
CURRENT LIABILITIES
 
 
 
Accounts payable
7,933 
5,364 
7,557 
Unredeemed gift card liabilities
392 
456 
413 
Accrued compensation and related expenses
429 
539 
474 
Accrued liabilities
1,531 
1,685 
1,619 
Accrued income taxes
288 
43 
Short-term debt
310 
480 
163 
Current portion of long-term debt
544 
43 
442 
Total current liabilities
11,148 
8,855 
10,711 
LONG-TERM LIABILITIES
1,122 
1,099 
1,161 
LONG-TERM DEBT
1,158 
1,685 
1,692 
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 — 337,925,000, 341,400,000 and 357,941,000 shares, respectively
34 
34 
36 
Additional paid-in capital
40 
Retained earnings
3,328 
3,621 
5,676 
Accumulated other comprehensive income
105 
90 
145 
Total Best Buy Co., Inc. shareholders' equity
3,507 
3,745 
5,857 
Noncontrolling interests
621 
621 
706 
Total equity
4,128 
4,366 
6,563 
TOTAL LIABILITIES AND EQUITY
$ 17,556 
$ 16,005 
$ 20,127 
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $)
Nov. 3, 2012
Mar. 3, 2012
Oct. 29, 2011
Preferred stock, par value (in dollars per share)
$ 1 
$ 1 
$ 1 
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
337,925,000 
341,400,000 
357,941,000 
Common stock, outstanding shares
337,925,000 
341,400,000 
357,941,000 
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Nov. 3, 2012
Oct. 29, 2011
Nov. 3, 2012
Oct. 29, 2011
Revenue
$ 10,753 
$ 11,145 
$ 32,910 
$ 33,370 
Cost of goods sold
8,167 
8,292 
24,853 
24,834 
Gross profit
2,586 
2,853 
8,057 
8,536 
Selling, general and administrative expenses
2,538 
2,472 
7,496 
7,431 
Restructuring charges
36 
254 
Operating income
12 
381 
307 
1,101 
Other income (expense)
 
 
 
 
Investment income and other
13 
25 
25 
Interest expense
(31)
(37)
(94)
(98)
Earnings (loss) from continuing operations before income tax (benefit) expense and equity in loss of affiliates
(6)
344 
238 
1,028 
Income tax (benefit) expense
(2)
122 
84 
364 
Equity in loss of affiliates
(1)
(2)
(5)
(3)
Net earnings (loss) from continuing operations
(5)
220 
149 
661 
Gain (loss) from discontinued operations (Note 3), net of tax benefit (expense) of ($2), $17, $2 and $49
(46)
(3)
(137)
Net earnings including noncontrolling interests
174 
146 
524 
Net (earnings) loss from continuing operations attributable to noncontrolling interests
(8)
(47)
11 
(83)
Net (gain) loss from discontinued operations attributable to noncontrolling interests
(3)
29 
55 
Net earnings (loss) attributable to Best Buy Co., Inc.
(10)
156 
160 
496 
Basic earnings (loss) per share attributable to Best Buy Co., Inc.
 
 
 
 
Continuing operations
$ (0.04)
$ 0.48 
$ 0.47 
$ 1.53 
Discontinued operations
$ 0.01 
$ (0.05)
$ 0.00 
$ (0.21)
Basic earnings (loss) per share
$ (0.03)
$ 0.43 
$ 0.47 
$ 1.32 
Diluted earnings (loss) per share attributable to Best Buy Co., Inc.
 
 
 
 
Continuing operations
$ (0.04)
$ 0.47 
$ 0.47 
$ 1.51 
Discontinued operations
$ 0.01 
$ (0.05)
$ 0.00 
$ (0.21)
Diluted earnings (loss) per share
$ (0.03)
$ 0.42 
$ 0.47 
$ 1.30 
Dividends declared per common share (in dollars per share)
$ 0.17 
$ 0.16 
$ 0.49 
$ 0.46 
Weighted-average common shares outstanding (in millions)
 
 
 
 
Basic (in shares)
337.2 
363.4 
339.3 
376.9 
Diluted (in shares)
337.2 
372.4 
340.4 
386.2 
Comprehensive income including noncontrolling interests
34 
191 
511 
Comprehensive (income) loss attributable to noncontrolling interests
(25)
14 
(23)
Comprehensive income attributable to Best Buy Co., Inc.
$ 9 
$ 20 
$ 191 
$ 488 
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (PARENTHETICAL) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Nov. 3, 2012
Oct. 29, 2011
Nov. 3, 2012
Oct. 29, 2011
Income tax benefit (expense)
$ (2)
$ 17 
$ 2 
$ 49 
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 Jan. 29, 2011
$ 7,139 
$ 6,449 
$ 39 
$ 0 
$ 6,257 
$ 153 
$ 690 
Beginning balances (in shares) at Jan. 29, 2011
 
 
393 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Adjustment for fiscal year-end change (note 2) (in shares)
 
 
 
 
 
 
Adjustment for fiscal year-end change (note 2)
(153)
(153)
(18)
(115)
(20)
Ending balances at Feb. 26, 2011
7,292 
6,602 
39 
18 
6,372 
173 
690 
Ending balances (in shares) at Feb. 26, 2011
 
 
393 
 
 
 
 
Beginning balances at Jan. 29, 2011
7,139 
6,449 
39 
6,257 
153 
690 
Beginning balances (in shares) at Jan. 29, 2011
 
 
393 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings, nine months ended
524 
496 
496 
28 
Foreign currency translation adjustments
10 
10 
(5)
Unrealized (gains) losses on available-for-sale investments
(18)
(18)
(18)
Cash flow hedging instruments - unrealized gains (losses)
Dividend distribution
(7)
(7)
Stock-based compensation
99 
99 
99 
Stock options exercised (in shares)
 
 
 
 
 
 
Stock options exercised
28 
28 
28 
Issuance of common stock under employee stock purchase plan (in shares)
 
 
 
 
 
 
Issuance of common stock under employee stock purchase plan
39 
39 
39 
Tax benefit (deficit) from stock options exercised, restricted stock vesting and employee stock purchase plan
(2)
(2)
(2)
Common stock dividends, $0.49 per share during the period ended November 3, 2012 and $0.46 per share during the period ended October 29, 2011, respectively
(171)
(171)
(171)
Repurchase of common stock (in shares)
 
 
(38)
 
 
 
 
Repurchase of common stock
(1,073)
(1,073)
(3)
(164)
(906)
Ending balances at Oct. 29, 2011
6,563 
5,857 
36 
5,676 
145 
706 
Ending balances (in shares) at Oct. 29, 2011
 
 
358 
 
 
 
 
Beginning balances at Jan. 28, 2012
4,242 
3,621 
34 
3,513 
74 
621 
Beginning balances (in shares) at Jan. 28, 2012
 
 
346 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Adjustment for fiscal year-end change (note 2) (in shares)
 
 
 
 
 
 
Adjustment for fiscal year-end change (note 2)
(124)
(124)
(108)
(16)
Ending balances at Mar. 03, 2012
4,366 
3,745 
34 
3,621 
90 
621 
Ending balances (in shares) at Mar. 03, 2012
 
 
341 
 
 
 
 
Beginning balances at Jan. 28, 2012
4,242 
3,621 
 
3,513 
74 
621 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings, nine months ended
146 
160 
 
160 
   
(14)
Ending balances at Aug. 04, 2012
 
 
 
 
 
 
 
Beginning balances at Jan. 28, 2012
4,242 
3,621 
34 
3,513 
74 
621 
Beginning balances (in shares) at Jan. 28, 2012
 
 
346 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings, nine months ended
146 
 
 
 
 
 
Foreign currency translation adjustments
42 
28 
28 
14 
Unrealized (gains) losses on available-for-sale investments
Stock-based compensation
99 
99 
99 
Stock options exercised (in shares)
 
 
 
 
 
 
Stock options exercised
Issuance of common stock under employee stock purchase plan (in shares)
 
 
 
 
 
 
Issuance of common stock under employee stock purchase plan
24 
24 
24 
Tax benefit (deficit) from stock options exercised, restricted stock vesting and employee stock purchase plan
(29)
(29)
(29)
Common stock dividends, $0.49 per share during the period ended November 3, 2012 and $0.46 per share during the period ended October 29, 2011, respectively
(164)
(164)
(164)
Repurchase of common stock (in shares)
 
 
(11)
 
 
 
 
Repurchase of common stock
(237)
(237)
(56)
(181)
Ending balances at Nov. 03, 2012
$ 4,128 
$ 3,507 
$ 34 
$ 40 
$ 3,328 
$ 105 
$ 621 
Ending balances (in shares) at Nov. 03, 2012
 
 
338 
 
 
 
 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (PARENTHETICAL)
3 Months Ended 9 Months Ended
Nov. 3, 2012
Oct. 29, 2011
Nov. 3, 2012
Oct. 29, 2011
Statement of Stockholders' Equity [Abstract]
 
 
 
 
Dividends declared per common share (in dollars per share)
$ 0.17 
$ 0.16 
$ 0.49 
$ 0.46 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
9 Months Ended
Nov. 3, 2012
Oct. 29, 2011
OPERATING ACTIVITIES
 
 
Net earnings including noncontrolling interests
$ 146 
$ 524 
Adjustments to reconcile net earnings including noncontrolling interests to total cash provided by (used in) operating activities
 
 
Depreciation
657 
669 
Amortization of definite-lived intangible assets
30 
39 
Restructuring charges
251 
52 
Stock-based compensation
95 
99 
Deferred income taxes
(96)
(53)
Other, net
19 
13 
Changes in operating assets and liabilities
 
 
Receivables
216 
322 
Merchandise inventories
(1,330)
(393)
Other assets
(167)
(58)
Accounts payable
967 
938 
Other liabilities
(541)
(78)
Income taxes
(368)
(174)
Total cash provided by (used in) operating activities
(121)
1,900 
INVESTING ACTIVITIES
 
 
Additions to property and equipment
(522)
(580)
Purchases of investments
(13)
(111)
Sales of investments
68 
153 
Change in restricted assets
59 
(17)
Other, net
(4)
Total cash used in investing activities
(412)
(555)
FINANCING ACTIVITIES
 
 
Repurchase of common stock
(255)
(1,056)
Borrowings of debt
1,034 
2,467 
Repayments of debt
(1,234)
(1,886)
Dividends paid
(166)
(172)
Issuance of common stock under employee stock purchase plan and for the exercise of stock options
26 
67 
Other, net
(12)
(31)
Total cash used in financing activities
(607)
(611)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
48 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS BEFORE ADJUSTMENT
(1,092)
735 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 309 
$ 2,073 
Basis of Presentation
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 realized more of our revenue and earnings in the fiscal fourth quarter, which includes the majority of the holiday shopping season in the U.S., Europe and Canada than in any other fiscal quarter. 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 March 3, 2012.
 
Beginning in the first quarter of fiscal 2013, we changed our fiscal year-end. As a result of the change in our fiscal year-end, the comparable prior year financial statements have been recast to conform to the new fiscal calendar. The third quarter of fiscal 2013 included 13 weeks and the recast third quarter of 2012 included 13 weeks. The first nine months of fiscal 2013 included 40 weeks and the recast nine months of 2012 included 39 weeks. See Note 2, Fiscal Year-end Change, for further information.
 
In order to align our fiscal reporting periods and comply with statutory filing requirements in certain foreign jurisdictions, we consolidate the financial results of our Europe, China and Mexico operations ("lag entities") 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. There were no significant intervening events which would have materially affected our financial condition, results of operations or liquidity had they been recorded during the three months ended November 3, 2012.
 
In preparing the accompanying condensed consolidated financial statements, we evaluated the period from November 4, 2012 through the date the financial statements were issued, for material subsequent events requiring recognition or disclosure. Other than the verdict in the trade secrets action, as described in Note 14, Contingencies, no such events were identified for this period.

New Accounting Standards
 
Goodwill Impairment — In September 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance on the testing of goodwill for impairment. Under the new guidance, entities may make a qualitative assessment of the likelihood of goodwill impairment in order to determine whether a detailed quantitative analysis is required. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. Accordingly, we adopted the new guidance on March 4, 2012, and determined that it did not have an impact on our consolidated financial position, results of operations, or cash flows.

Comprehensive Income — In June 2011, the FASB issued new guidance on the presentation of comprehensive income. Specifically, the new guidance requires an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate but consecutive statements. The new guidance eliminated the previous option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changed the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. Accordingly, we adopted the new guidance on March 4, 2012, and have presented total comprehensive income in our Condensed Consolidated Statements of Earnings and Comprehensive Income.

Fair Value Measurement — In April 2011, the FASB issued new guidance to converge fair value measurement and disclosure guidance with International Financial Reporting Standards. This new guidance amended current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. Accordingly, we adopted the new guidance on March 4, 2012, and determined that it did not have an impact on our consolidated financial position, results of operations, or cash flows.
Fiscal Year-end Change
Fiscal Year-End Change
Fiscal Year-end Change

Beginning in the first quarter of fiscal 2013, we changed our fiscal year-end from the Saturday nearest the end of February to the Saturday nearest the end of January. As a result of this change, our fiscal year 2013 is an 11-month transition period ending on February 2, 2013. As a result of this change, in the first quarter of fiscal 2013, we also began consolidating the results of our Europe, China and Mexico operations on a one-month lag, compared to a two-month lag in fiscal year 2012, to continue to align our fiscal reporting periods with statutory filing requirements.

In order to allow an immediate transition to our new fiscal calendar and to maintain transparency and comparability of financial information included in our quarterly Form 10-Q filings, we are presenting such quarterly information on a three- and nine-month basis for both the current and prior fiscal years, in both instances based on the new fiscal calendar. Following the change to our fiscal calendar, the third quarter of fiscal 2013 is the three months ended November 3, 2012. Therefore, the Condensed Consolidated Statements of Earnings and Comprehensive Income, Consolidated Statements of Changes in Shareholders' Equity, and Consolidated Statements of Cash Flows reflect results for the three and nine month periods ended November 3, 2012. The results for the nine months ended November 3, 2012 include our fiscal month ended March 3, 2012 (“February 2012”) for operations that are not reported on a lag (primarily our Domestic segment and Canadian operations), which were also included in our results for the fiscal year ended March 3, 2012, included in our fiscal 2012 Form 10-K. The change in fiscal calendar does not impact our quarterly financial statements for our lag entities because the reduction in the lag period from two months to one month occurred concurrent with the change in our fiscal calendar.

The following table shows the fiscal months included in the third quarters of fiscal 2013 and 2012 under our new fiscal calendar, as well as the fiscal months included in the third quarter of fiscal 2012 under our previous fiscal calendar:
New Fiscal Calendar(1)
 
Previous Fiscal Calendar(1)
2013
 
2012
 
2012
August 2012 - October 2012
 
August 2011 - October 2011
 
September 2011 - November 2011
(1) 
For entities reported on a lag, the fiscal months included in the third quarters of fiscal 2013 and 2012 were July through September under both the new and previous fiscal calendars.

The Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Earnings and Comprehensive Income, Consolidated Statements of Changes in Shareholders' Equity, Consolidated Statements of Cash Flows, and corresponding Notes are presented based on the new fiscal calendar (November 3, 2012 for fiscal 2013 and October 29, 2011 for fiscal 2012) and the most recent audited fiscal year (March 3, 2012).

Results for February 2012 and February 2011

As a result of the overlap of February 2012 between the fourth quarter of fiscal 2012 (previous fiscal calendar) and the first quarter of fiscal 2013 (new fiscal calendar), $3,908 of revenue from February 2012 is included in our Condensed Consolidated Statements of Earnings and Comprehensive Income for the nine months ended November 3, 2012, which was also included in our results for the fiscal year ended March 3, 2012, included in our fiscal 2012 Form 10-K.

The following table provides a summary of the adjustment to Retained earnings within the Consolidated Statements of Changes in Shareholders' Equity as a result of the overlap of February 2012 between the fourth quarter of fiscal 2012 (previous fiscal calendar) and the first quarter of fiscal 2013 (new fiscal calendar), as well as the equivalent overlap in the prior-year period. The primary components of the net reconciling item to Retained earnings include the net earnings from the Domestic segment and Canadian operations, offset by the impact of share repurchases which reduced Retained earnings upon their retirement.
 
February 2012
 
February 2011
Net earnings
$
206

 
$
115

Impact of share repurchases(1)
(98
)
 

Net reconciling item to Retained earnings
$
108

 
$
115

(1)
Share repurchases reduced Retained earnings after the Additional paid-in capital balance was reduced to zero during February 2012.

In addition, the Consolidated Statements of Cash Flows includes a net reconciling item (adjustment) for the cash flows as a result of the overlap described above. The total adjustment for the overlap of February 2012 was $202, primarily due to $135 of cash used in financing activities and $46 of cash used in investing activities. The total adjustment for February 2011 was $235, due almost entirely to $228 of cash used in operating activities. The adjustments for both periods included the effect of exchange rate changes on our cash balances.
Discontinued Operations
Discontinued Operations
Discontinued Operations

Discontinued operations comprise: (i) Napster operations within our Domestic segment; (ii) large-format Best Buy branded store operations in China, Turkey, and the United Kingdom ("U.K.") within our International segment; and (iii) The Phone House stores in Belgium within our International Segment. The presentation of discontinued operations has been retrospectively applied to all prior periods presented.

The financial results of discontinued operations for the three and nine months ended November 3, 2012 and October 29, 2011, were as follows ($ in millions):
 
Three Months Ended
 
Nine Months Ended
 
November 3, 2012
 
October 29, 2011
 
November 3, 2012
 
October 29, 2011
 
 
 
(recast)
 
 
 
(recast)
Revenue
$

 
$
95

 
$
8

 
$
312

 
 
 
 
 
 
 
 
Restructuring charges(1)
(8
)
 
19

 
(3
)
 
48

 
 
 
 
 
 
 
 
Earnings (loss) from discontinued operations before income tax benefit (expense)
8

 
(63
)
 
(5
)
 
(190
)
Income tax benefit (expense)
(2
)
 
17

 
2

 
49

Gain on sale of discontinued operations

 

 

 
4

Net gain (loss) from discontinued operations, including noncontrolling interests
6

 
(46
)
 
(3
)
 
(137
)
Net (gain) loss from discontinued operations attributable to noncontrolling interests
(3
)
 
29

 
3

 
55

Net gain (loss) from discontinued operations attributable to Best Buy Co., Inc.
$
3

 
$
(17
)
 
$

 
$
(82
)
 
(1)  
See Note 7, Restructuring Charges, for further discussion of the restructuring charges associated with discontinued operations.
Investments
Investments
Investments
 
Investments were comprised of the following:
 
November 3, 2012
 
March 3, 2012
 
October 29, 2011
 
 
 
 
 
(recast)
Short-term investments
 

 
 

 
 

U.S. Treasury bills
$

 
$

 
$
20

 
 
 
 
 
 
Equity and other investments
 

 
 

 
 

Debt securities (auction rate securities)
21

 
82

 
84

Marketable equity securities
3

 
3

 
131

Other investments
67

 
55

 
64

Total equity and other investments
$
91

 
$
140

 
$
279


Debt Securities
 
Our debt securities are comprised of auction rate securities (“ARS”). ARS were intended to behave like short-term debt instruments because their interest rates reset periodically through an auction process, most commonly at intervals of 7, 28, and 35 days. The auction process had historically provided a means by which we could roll over the investment or sell these securities at par in order to provide us with liquidity, as needed. As a result, we classify our investments in ARS as available-for-sale and carry them at fair value.

In February 2008, auctions began to fail due to insufficient buyers, as the amount of securities submitted for sale in auctions exceeded the aggregate amount of the bids. For each failed auction, the interest rate on the security moves to a maximum rate specified for each security, and generally resets at a level higher than specified short-term interest rate benchmarks. To date, we have collected all interest due on our ARS and expect to continue to do so in the future. Due to persistent failed auctions and the uncertainty of when these investments could be liquidated at par, we have classified all of our investments in ARS as non-current assets within Equity and Other Investments in our Condensed Consolidated Balance Sheet as of November 3, 2012 and October 29, 2011.
 
We sold $1 of ARS at par during the third quarter of fiscal 2013. However, at November 3, 2012, our entire remaining ARS portfolio, consisting of six investments in ARS with an aggregate value at par of $23, was subject to failed auctions.
 
Our ARS portfolio consisted of the following, at fair value:
Description
 
Nature of collateral or guarantee
 
November 3, 2012
 
March 3,
2012
 
October 29, 2011
 
 
 
 
 
 
 
 
(recast)
Student loan bonds
 
Student loans guaranteed 95% to 100% by the U.S. government
 
$
19

 
$
80

 
$
82

Municipal revenue bonds
 
100% insured by AA/Aa-rated bond insurers at November 3, 2012
 
2

 
2

 
2

Total fair value plus accrued interest(1)
 
 
 
$
21

 
$
82

 
$
84

 
(1) 
The par value and weighted-average interest rates (taxable equivalent) of our ARS were $23, $88 and $89, and 0.81%, 0.50% and 0.51%, respectively, at November 3, 2012, March 3, 2012 and October 29, 2011, respectively.
 
At November 3, 2012, our ARS portfolio was 37% AAA/Aaa-rated, 30% AA/Aa-rated, and 33% A/A-rated.
 
The investment principal associated with failed auctions will not be accessible until successful auctions occur, a buyer is found outside of the auction process, the issuers establish a different form of financing to replace these securities, or final payments are due according to the contractual maturities of the debt issuances, which range from 10 to 29 years. We do not intend to sell our remaining ARS until we can recover the full principal amount through one of the means described above. In addition, we do not believe it is more likely than not that we would be required to sell our remaining ARS until we can recover the full principal amount based on our other sources of liquidity.

We evaluated our entire ARS portfolio of $23 (par value) for impairment at November 3, 2012, based primarily on the methodology described in Note 5, Fair Value Measurements. As a result of this review, we determined that the fair value of our ARS portfolio at November 3, 2012 was $21. Accordingly, a $2 pre-tax unrealized loss is recognized in accumulated other comprehensive income. This unrealized loss reflects a temporary impairment on all of our investments in ARS. The estimated fair value of our ARS portfolio could change significantly based on future market conditions. We will continue to assess the fair value of our ARS portfolio for substantive changes in relevant market conditions, changes in our financial condition, or other changes that may alter our estimates described above.

We may be required to record an additional unrealized holding loss or an impairment charge to earnings if we determine that our ARS portfolio has incurred a further decline in fair value that is temporary or other-than-temporary, respectively. Factors that we consider when assessing our ARS portfolio for other-than-temporary impairment include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period, the nature of the collateral or guarantees in place, and our intent and ability to hold an investment.
 
We had $(1), $(3) and $(3) of unrealized loss, net of tax, recorded in accumulated other comprehensive income at November 3, 2012, March 3, 2012 and October 29, 2011, respectively, related to our investments in debt securities.
 
Marketable Equity Securities
 
We invest in marketable equity securities and classify them as available-for-sale. Investments in marketable equity securities are classified as non-current assets within Equity and Other Investments in our Condensed Consolidated Balance Sheets and are reported at fair value based on quoted market prices.
 
Our investments in marketable equity securities were as follows:
 
November 3, 2012
 
March 3, 2012
 
October 29, 2011
 
 
 
 
 
(recast)
Common stock of TalkTalk Telecom Group PLC
$

 
$

 
$
74

Common stock of Carphone Warehouse Group plc

 

 
56

Other
3

 
3

 
1

Total
$
3

 
$
3

 
$
131

 
We review all investments for other-than-temporary impairment at least quarterly or as indicators of impairment exist. Indicators of impairment include the duration and severity of the decline in fair value, as well as the intent and ability to hold the investment to allow for a recovery in the market value of the investment. In addition, we consider qualitative factors that include, but are not limited to: (i) the financial condition and business plans of the investee, including its future earnings potential, (ii) the investee’s credit rating, and (iii) the current and expected market and industry conditions in which the investee operates. If a decline in the fair value of an investment is deemed by management to be other-than-temporary, the cost basis of the investment is written down to fair value, and the amount of the write-down is included in net earnings.

All unrealized holding gains or losses related to our investments in marketable equity securities are reflected net of tax in accumulated other comprehensive income in shareholders’ equity. The total unrealized gain, net of tax, included in accumulated other comprehensive income was $1, $0 and $62 at November 3, 2012, March 3, 2012 and October 29, 2011, respectively.
 
Other Investments
 
The aggregate carrying values of investments accounted for using either the cost method or the equity method at November 3, 2012, March 3, 2012 and October 29, 2011 were $67, $55 and $64, respectively.
Fair Value Measurements
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 November 3, 2012, March 3, 2012 and October 29, 2011, according to the valuation techniques we used to determine their fair values.
 
 
 
Fair Value Measurements
Using Inputs Considered as
 
Fair Value at
November 3, 2012
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
ASSETS
 

 
 

 
 

 
 

Other current assets
 

 
 

 
 

 
 

Foreign currency derivative instruments
$
2

 
$

 
$
2

 
$

Equity and other investments
 

 
 

 
 

 
 

Auction rate securities
21

 

 

 
21

Marketable equity securities
3

 
3

 

 

 
 
 
 
 
 
 
 
LIABILITIES
 

 
 

 
 

 
 

Accrued liabilities
 
 
 
 
 
 
 
Foreign currency derivative instruments
1

 

 
1

 


 
 
 
Fair Value Measurements
Using Inputs Considered as
 
Fair Value at
March 3, 2012
 
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
$
272

 
$
272

 
$

 
$

Other current assets
 

 
 

 
 

 
 

Money market funds (restricted cash)
119

 
119

 

 

U.S. Treasury bills (restricted cash)
30

 
30

 

 

Foreign currency derivative instruments
1

 

 
1

 

Equity and other investments
 

 
 

 
 

 
 

Auction rate securities
82

 

 

 
82

Marketable equity securities
3

 
3

 

 

 
 
 
 
 
 
 
 
LIABILITIES
 

 
 

 
 

 
 

Accrued liabilities
 

 
 

 
 

 
 

Foreign currency derivative instruments
2

 

 
2

 

 
 
 
 
Fair Value Measurements
Using Inputs Considered as
 
Fair Value at
October 29, 2011
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
(recast)
 
(recast)
 
(recast)
 
(recast)
ASSETS
 

 
 

 
 

 
 

Cash and cash equivalents
 
 
 
 
 
 
 
Money market funds
$
796

 
$
796

 
$

 
$

Short-term investments
 

 
 

 
 

 
 

U.S. Treasury bills
20

 
20

 

 

Other current assets
 

 
 

 
 

 
 

Money market funds (restricted assets)
163

 
163

 

 

U.S. Treasury bills (restricted assets)
20

 
20

 

 

Foreign currency derivative instruments
1

 

 
1

 

Equity and other investments
 

 
 

 
 

 
 

Auction rate securities
84

 

 

 
84

Marketable equity securities
131

 
131

 

 



The following tables provide a reconciliation between 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 eight months ended November 3, 2012 and October 29, 2011.
 
Debt securities-
Auction rate securities only
 
Student loan
bonds
 
Municipal
revenue bonds
 
Total
Balances at August 4, 2012
$
20

 
$
2

 
$
22

Changes in unrealized losses included in other comprehensive income

 

 

Sales
(1
)
 

 
(1
)
Balances at November 3, 2012
$
19

 
$
2

 
$
21

  
 
Debt securities-
Auction rate securities only
 
Student loan
bonds
 
Municipal
revenue bonds
 
Total
Balances at March 3, 2012
$
80

 
$
2

 
$
82

Changes in unrealized losses included in other comprehensive income
4

 

 
4

Sales
(65
)
 

 
(65
)
Balances at November 3, 2012
$
19

 
$
2

 
$
21


 
Debt securities-
Auction rate securities only
 
Student loan
bonds
 
Municipal
revenue bonds
 
Total
Balances at July 30, 2011
$
89

 
$
2

 
$
91

Changes in unrealized losses included in other comprehensive income
(3
)
 

 
(3
)
Sales
(4
)
 

 
(4
)
Balances at October 29, 2011 (recast)
$
82

 
$
2

 
$
84

 
 
Debt securities-
Auction rate securities only
 
Student loan
bonds
 
Municipal
revenue bonds
 
Total
Balances at February 26, 2011
$
108

 
$
2

 
$
110

Changes in unrealized losses included in other comprehensive income

 

 

Sales
(26
)
 

 
(26
)
Balances at October 29, 2011 (recast)
$
82

 
$
2

 
$
84



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 that are traded in an active market were measured at fair value using quoted market prices and, therefore, were classified as Level 1.

U.S. Treasury Bills.  Our U.S. Treasury bills were classified as Level 1 as they trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis.
 
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 active markets.
 
Auction Rate Securities.  Our investments in ARS were classified as Level 3 as quoted prices were unavailable due to events described in Note 4, Investments. Due to limited market information, we utilized a discounted cash flow (“DCF”) model to derive an estimate of fair value. The unobservable inputs and 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. Changes in these unobservable inputs are not likely to have a significant impact on the fair value measurement of our 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 active markets for which closing stock prices are readily available.

Assets and Liabilities 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 Condensed Consolidated Statements of Earnings and Comprehensive Income.

With the exception of fixed asset impairments associated with our restructuring activities described in Note 7, Restructuring Charges, we had no significant remeasurements of such assets or liabilities to fair value during the nine months ended November 3, 2012 and October 29, 2011.
The following table summarizes the fair value remeasurements recorded during the nine months ended November 3, 2012 and October 29, 2011:
 
Nine Months Ended
 
Nine Months Ended
 
November 3, 2012
 
October 29, 2011
 
Impairments
 
Remaining Net Carrying Value
 
Impairments
 
Remaining Net Carrying Value
 
 
 
 
 
(recast)
 
(recast)
Continuing operations
 
 
 
 
 
 
 
Property and equipment
$
29

 
$

 
$

 
$

Discontinued operations(1)
 
 
 
 
 
 
 
Property and equipment

 

 
15

 

Tradename

 

 
3

 

Total
$

 
$

 
$
18

 
$


(1) 
Fixed asset and tradename impairments associated with discontinued operations are recorded within Loss from discontinued operations in our Consolidated Statement of Earnings and Comprehensive Income.

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. In the case of these specific assets, for which their 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 short- and long-term debt. The fair values of cash, receivables, accounts payable, other payables, and short-term debt approximated carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. 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 8, Debt, for information about the fair value of our long-term debt.
Goodwill and Intangible Assets
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 eight months ended November 3, 2012 and October 29, 2011:
 
Goodwill
 
Indefinite-lived Tradenames
 
Domestic
 
International
 
Total
 
Domestic
 
International
 
Total
Balances at March 3, 2012
$
516

 
$
819

 
$
1,335

 
$
19

 
$
111

 
$
130

Changes in foreign currency exchange rates

 
(5
)
 
(5
)
 

 

 

Acquisitions
14

 

 
14

 

 

 

Balances at November 3, 2012
$
530

 
$
814

 
$
1,344

 
$
19

 
$
111

 
$
130

 

 
Goodwill
 
Indefinite-lived Tradenames
 
Domestic
 
International
 
Total
 
Domestic
 
International
 
Total
Balances at February 26, 2011
$
422

 
$
2,032

 
$
2,454

 
$
21

 
$
84

 
$
105

Sale of business

 

 

 
(3
)
 

 
(3
)
Changes in foreign currency exchange rates

 
(7
)
 
(7
)
 

 
1

 
1

Other(1)

 

 

 

 
28

 
28

Balances at October 29, 2011 (recast)
$
422

 
$
2,025

 
$
2,447

 
$
18

 
$
113

 
$
131

(1) 
Represents the transfer of certain definite-lived tradenames (at their net book value) to indefinite-lived tradenames following our decision not to phase out certain tradenames. We believe these tradenames will continue to contribute to our future cash flows indefinitely.

The following table provides the gross carrying amount of goodwill and cumulative goodwill impairment losses:
 
November 3, 2012
 
March 3, 2012
 
October 29, 2011
 
Gross
Carrying
Amount
 
Cumulative
Impairment
 
Gross
Carrying
Amount
 
Cumulative
Impairment
 
Gross
Carrying
Amount
 
Cumulative
Impairment
 
 
 
 
 
 
 
 
 
(recast)
 
(recast)
Goodwill
$
2,605

 
$
(1,261
)
 
$
2,596

 
$
(1,261
)
 
$
2,511

 
$
(64
)

 
The following table provides the gross carrying values and related accumulated amortization of definite-lived intangible assets:
 
November 3, 2012
 
March 3, 2012
 
October 29, 2011
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
 
 
 
 
 
 
 
 
(recast)
 
(recast)
Customer relationships
$
475

 
$
(262
)
 
$
453

 
$
(224
)
 
$
382

 
$
(217
)


Total amortization expense for the three months ended November 3, 2012 and October 29, 2011, was $10 and $9, respectively, and was $30 and $39 for the nine months then ended, respectively. The estimated future amortization expense for identifiable intangible assets is as follows:
Fiscal Year
 
Remainder of fiscal 2013
$
11

2014
42

2015
42

2016
42

2017
24

Thereafter
52

Restructuring Charges
Restructuring Charges
Restructuring Charges
 
Summary

Restructuring charges incurred in the nine months ended November 3, 2012 and October 29, 2011 for our fiscal 2013, fiscal 2012 and fiscal 2011 restructuring activities were as follows:
 
Nine Months Ended
 
November 3, 2012
 
October 29, 2011
 
 
 
(recast)
Continuing operations
 
 
 
Fiscal 2013 Europe restructuring
$
2

 
$

Fiscal 2013 U.S. restructuring
258

 

Fiscal 2012 restructuring
6

 

Fiscal 2011 restructuring
(12
)
 
4

Total
254

 
4

Discontinued operations
 
 
 
Fiscal 2012 restructuring
(5
)
 

Fiscal 2011 restructuring
2

 
48

Total (Note 3)
(3
)
 
48

Total
$
251

 
$
52


Fiscal 2013 Europe Restructuring

In the third quarter of fiscal 2013, we initiated a series of actions to restructure our Best Buy Europe operations in our International segment intended to improve operating performance. We preliminarily expect to incur pre-tax restructuring charges (primarily employee termination benefits, facility closure costs and property and equipment impairments) of between $40 and $60 related to this plan. We expect to substantially complete these restructuring activities in fiscal 2014. We incurred $2 of restructuring charges related to Europe termination benefits in the third quarter of fiscal 2013.

Fiscal 2013 U.S. Restructuring

In the first quarter of fiscal 2013, we initiated a series of actions to restructure operations in our Domestic segment intended to improve operating performance. The actions include closure of approximately 50 large-format Best Buy branded stores in the U.S. and changes to the store and corporate operating models. The costs of implementing the changes primarily consist of facility closure costs, employee termination benefits and property and equipment (primarily store fixtures) impairments.

We incurred $34 of charges related to the fiscal 2013 U.S. restructuring in the third quarter of fiscal 2013, consisting primarily of facility closure and other costs related to our closure of six stores. In the first nine months of fiscal 2013, we incurred $258 of restructuring charges related to the fiscal 2013 U.S. restructuring consisting primarily of facility closure and other costs, termination benefits and property and equipment impairments.

We do not expect to incur further material restructuring charges related to our fiscal 2013 U.S. restructuring activities, with the exception of lease payments for vacated stores which will continue until the lease expires or we otherwise terminate the lease.

The majority of restructuring charges related to our fiscal 2013 restructuring activities are from continuing operations and are presented in Restructuring charges in our Condensed Consolidated Statements of Earnings and Comprehensive Income. The composition of the restructuring charges we incurred in the nine months ended November 3, 2012 for our fiscal 2013 restructuring activities in the Domestic segment was as follows:
 
Nine Months Ended November 3, 2012
Continuing operations
 
Property and equipment impairments
$
28

Termination benefits
83

Facility closure and other costs, net
147

Total
$
258



The following table summarizes our restructuring accrual activity during the eight months ended November 3, 2012 related to termination benefits and facility closure and other costs associated with our 2013 U.S. restructuring activities:
 
Termination
Benefits
 
Facility
Closure and
Other Costs
 
Total
Balance at March 3, 2012
$

 
$

 
$

Charges
109

 
145

 
254

Cash payments
(65
)
 
(18
)
 
(83
)
Adjustments
(31
)
 
(3
)
 
(34
)
Balance at November 3, 2012
$
13

 
$
124

 
$
137



Fiscal 2012 Restructuring

In the third quarter of fiscal 2012, we implemented a series of actions to restructure operations in our Domestic and International segments. The actions within our Domestic segment included a decision to modify our strategy for certain mobile broadband offerings, and in our International segment we closed our large-format Best Buy branded stores in the U.K. to refocus our Best Buy Europe strategy on our small-format stores. In addition, we impaired certain information technology ("IT") assets supporting the restructured activities in our International segment. We view these restructuring activities as necessary to meet our long-term financial performance objectives by refocusing our investments on areas that provide profitable growth opportunities and meet our overall return expectations. All restructuring charges directly related to the large-format Best Buy branded stores in the U.K. are reported within (Gain) loss from discontinued operations in our Condensed Consolidated Statements of Earnings and Comprehensive Income. Refer to Note 3, Discontinued Operations.

We incurred $1 of charges related to the fiscal 2012 restructuring in the first nine months of fiscal 2013. Of the total charges, $6 related to our Domestic segment and consisted primarily of other costs resulting from the modified strategy for certain mobile broadband offerings. The offsetting $(5) gain in our International segment was primarily due to adjustments to estimated facility closure costs associated with the closure of our Best Buy branded stores in the U.K.

We do not expect to incur further material restructuring charges related to our fiscal 2012 restructuring activities in either our Domestic or International segments, as we have substantially completed these restructuring activities.

All restructuring charges from continuing operations related to our fiscal 2012 restructuring activities are presented in Restructuring charges in our Condensed Consolidated Statements of Earnings and Comprehensive Income, whereas all restructuring charges from discontinued operations related to our fiscal 2012 restructuring activities are presented in Gain (loss) from discontinued operations in our Condensed Consolidated Statements of Earnings and Comprehensive Income.

The composition of the restructuring charges we incurred in the nine months ended November 3, 2012, as well as the cumulative amount incurred through November 3, 2012, for our fiscal 2012 restructuring activities for both the Domestic and International segments was as follows:
 
Domestic
 
International
 
Total
 
Nine Months
Ended
November 3, 2012
 
Cumulative
Amount
through
November 3, 2012
 
Nine Months
Ended
November 3, 2012
 
Cumulative
Amount
through
November 3, 2012
 
Nine Months
Ended
November 3, 2012
 
Cumulative
Amount
through
November 3, 2012
Continuing operations
 
 
 
 
 
 
 
 
 
 
 
Property and equipment impairments
$
1

 
$
17

 
$

 
$
15

 
$
1

 
$
32

Termination benefits

 
1

 

 

 

 
1

Facility closure and other costs, net
5

 
5

 

 

 
5

 
5

Total
6

 
23

 

 
15

 
6

 
38

 
 
 
 
 
 
 
 
 
 
 
 
Discontinued operations
 
 
 
 
 
 
 
 
 
 
 
Inventory write-downs

 

 

 
11

 

 
11

Property and equipment impairments

 

 

 
96

 

 
96

Termination benefits

 

 
1

 
17

 
1

 
17

Facility closure and other costs, net

 

 
(6
)
 
76

 
(6
)
 
76

Total

 

 
(5
)
 
200

 
(5
)
 
200

Total
$
6

 
$
23

 
$
(5
)
 
$
215

 
$
1

 
$
238


The following table summarizes our restructuring accrual activity during the eight months ended November 3, 2012 related to termination benefits and facility closure and other costs associated with our 2012 restructuring activities:
 
Termination
Benefits
 
Facility
Closure and
Other Costs(1)
 
Total
Balance at March 3, 2012
$
17

 
$
85

 
$
102

Charges
1

 
2

 
3

Cash payments
(17
)
 
(81
)
 
(98
)
Adjustments

 
25

 
25

Changes in foreign currency exchange rates

 
3

 
3

Balance at November 3, 2012
$
1

 
$
34

 
$
35

(1) 
Included within the adjustments to facility closure and other costs is $34 from the first quarter of fiscal 2013, representing an adjustment to exclude non-cash charges or benefits, which had no impact on our Condensed Consolidated Statements of Earnings and Comprehensive Income in the first quarter of fiscal 2013.
 
Fiscal 2011 Restructuring

In the fourth quarter of fiscal 2011, we implemented a series of actions to restructure operations in our Domestic and International segments in order to improve performance and enhance customer service. The restructuring actions included plans to improve supply chain and operational efficiencies in our Domestic segment's operations, primarily focused on modifications to our distribution channels and exit from certain digital delivery services within our entertainment product category. The actions also included plans to exit the Turkey market and restructure the Best Buy branded stores in China. As part of the international restructuring, we also impaired certain IT assets supporting the restructured activities in our International segment. We view these restructuring activities as necessary to meet our long-term growth goals by investing in businesses that have the potential to meet our internal rate of return expectations. All restructuring charges directly related to Turkey and China, as well as the Domestic charges directly related to our exit from certain digital delivery services within our entertainment product category, are reported within (Gain) loss from discontinued operations in our Condensed Consolidated Statements of Earnings and Comprehensive Income. Refer to Note 3, Discontinued Operations.
 
During the first nine months of fiscal 2013, we recorded a net reduction to restructuring charges of $(10), which related primarily to our Domestic segment. The net reduction was largely the result of a gain recorded on the sale of a previously impaired distribution facility and equipment during the first quarter of fiscal 2013 (previously impaired through restructuring charges), partially offset by charges associated with the exit from certain digital delivery services within our entertainment product category.
 
We incurred $52 of charges related to the fiscal 2011 restructuring in the first nine months of fiscal 2012. Of the total charges, $27 related to our Domestic segment and consisted primarily of property and equipment impairments and facility closure costs associated with supply chain and operational improvements. Within our International segment, we incurred $25 of charges consisting primarily of termination benefits and facility closure costs related to actions taken to exit the Turkey market and restructure our Best Buy branded stores in China.
 
We do not expect to incur further material restructuring charges related to our fiscal 2011 restructuring activities in either our Domestic or International segments.
 
For continuing operations, the cumulative inventory write-downs related to our fiscal 2011 restructuring activities were presented in Restructuring charges — cost of goods sold in our Condensed Consolidated Statements of Earnings and Comprehensive Income in the periods in which the charges occurred. The remainder of the restructuring charges are presented in Restructuring charges in our Condensed Consolidated Statements of Earnings and Comprehensive Income. However, all restructuring charges from discontinued operations related to our fiscal 2011 restructuring activities are presented in Gain (loss) from discontinued operations in our Condensed Consolidated Statements of Earnings and Comprehensive Income.
The composition of the restructuring charges we incurred in the nine months ended November 3, 2012 and October 29, 2011, as well as the cumulative amount incurred through November 3, 2012, for our fiscal 2011 restructuring activities for both the Domestic and International segments was as follows:
 
Domestic
 
International
 
Total
 
Nine Months Ended
 
Cumulative
Amount
through
November 3, 2012
 
Nine Months Ended
 
Cumulative
Amount
through
November 3, 2012
 
Nine Months Ended
 
Cumulative
Amount
through
November 3, 2012
 
November 3,
2012
 
October 29,
2011
 
 
November 3,
2012
 
October 29,
2011
 
 
November 3,
2012
 
October 29,
2011
 
 
 
 
(recast)
 
 
 
 
 
(recast)
 
 
 
 
 
(recast)
 
 
Continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory write-downs
$

 
$

 
$
28

 
$

 
$

 
$

 
$

 
$

 
$
28

Property and equipment impairments(1)
(12
)
 
1

 
3

 

 
(1
)
 
107

 
(12
)
 

 
110

Termination benefits

 
(1
)
 
14

 

 

 

 

 
(1
)
 
14

Facility closure and other costs, net

 
5

 
4

 

 

 

 

 
5

 
4

Total
(12
)
 
5

 
49

 

 
(1
)
 
107

 
(12
)
 
4

 
156

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discontinued operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory write-downs

 

 

 

 

 
15

 

 

 
15

Property and equipment impairments

 
15

 
15

 

 

 
25

 

 
15

 
40

Intangible asset impairments

 
3

 
13

 

 

 

 

 
3

 
13

Termination benefits

 
4

 
4

 

 
20

 
19