BEST BUY CO INC, 10-K filed on 5/1/2012
Annual Report
Document and Entity Information (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Apr. 26, 2012
Aug. 27, 2011
Document and Entity Information [Abstract}
 
 
 
Entity Registrant Name
BEST BUY CO INC 
 
 
Current Fiscal Year End Date
--03-03 
 
 
Entity Voluntary Filers
No 
 
 
Document Fiscal Year Focus
2012 
 
 
Amendment Flag
false 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Common Stock, Shares Outstanding
 
342,198,524 
 
Entity Public Float
 
 
$ 6.6 
Document Fiscal Period Focus
FY 
 
 
Document Type
10-K 
 
 
Entity Central Index Key
0000764478 
 
 
Document Period End Date
Mar. 03, 2012 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Mar. 3, 2012
Feb. 26, 2011
CURRENT ASSETS
 
 
Cash and cash equivalents
$ 1,199 
$ 1,103 
Short-term investments
22 
Receivables
2,288 
2,348 
Merchandise inventories
5,731 
5,897 
Other current assets
1,079 
1,103 
Total current assets
10,297 
10,473 
Property and Equipment
 
 
Land and buildings
775 
766 
Leasehold improvements
2,367 
2,318 
Fixtures and equipment
4,981 
4,701 
Property under capital lease
129 
120 
Property, Plant and Equipment, Gross
8,252 
7,905 
Less accumulated depreciation
4,781 
4,082 
Net property and equipment
3,471 
3,823 
GOODWILL
1,335 
2,454 
TRADENAMES, NET
130 
133 
CUSTOMER RELATIONSHIPS, NET
229 
203 
EQUITY AND OTHER INVESTMENTS
140 
328 
OTHER ASSETS
403 
435 
TOTAL ASSETS
16,005 
17,849 
CURRENT LIABILITIES
 
 
Accounts payable
5,364 
4,894 
Unredeemed gift card liabilities
456 
474 
Accrued compensation and related expenses
539 
570 
Accrued liabilities
1,685 
1,471 
Accrued income taxes
288 
256 
Short-term debt
480 
557 
Current portion of long-term debt
43 
441 
Total current liabilities
8,855 
8,663 
LONG-TERM LIABILITIES
1,099 
1,183 
LONG-TERM DEBT
1,685 
711 
Contingencies and Commitments (Note 15)
   
   
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 — 341,400,000 and 392,590,000 shares, respectively
34 
39 
Additional paid-in capital
18 
Retained earnings
3,621 
6,372 
Accumulated other comprehensive income
90 
173 
Total Best Buy Co., Inc. shareholders' equity
3,745 
6,602 
Noncontrolling interests
621 
690 
Total equity
4,366 
7,292 
TOTAL LIABILITIES AND EQUITY
$ 16,005 
$ 17,849 
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $)
Mar. 3, 2012
Feb. 26, 2011
Preferred stock, par value (in dollars per share)
$ 1.00 
$ 1.00 
Preferred stock, Authorized shares
400,000 
400,000 
Preferred stock, Issued shares
Preferred stock, outstanding shares
Common stock, par value (in dollars per share)
$ 0.10 
$ 0.10 
Common stock, Authorized shares
1,000,000,000 
1,000,000,000 
Common stock, Issued shares
341,400,000 
392,590,000 
Common stock, outstanding shares
341,400,000 
392,590,000 
CONSOLIDATED STATEMENTS OF EARNINGS (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Revenue
$ 50,705 
$ 49,747 
$ 49,243 
Cost of goods sold
38,113 
37,197 
37,201 
Restructuring charges - cost of goods sold
19 
Gross profit
12,573 
12,541 
12,042 
Selling, general and administrative expenses
10,242 
10,029 
9,622 
Restructuring charges
39 
138 
52 
Goodwill impairment
1,207 
Operating income
1,085 
2,374 
2,368 
Other income (expense)
 
 
 
Gain on sale of investments
55 
Investment income and other
37 
43 
53 
Interest expense
(134)
(86)
(92)
Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates
1,043 
2,331 
2,329 
Income tax expense
709 
779 
835 
Equity in (loss) income of affiliates
(4)
Net (loss) earnings from continuing operations
330 
1,554 
1,495 
Loss from discontinued operations (Note 3), net of tax of $89, $65 and $33
(308)
(188)
(101)
Net earnings (loss) including noncontrolling interests
22 
1,366 
1,394 
Net loss (earnings) from continuing operations attributable to noncontrolling interests
(1,387)
(127)
(96)
Net loss (earnings) from discontinued operations attributable to noncontrolling interests
134 
38 
19 
Net earnings (loss) attributable to Best Buy Co., Inc.
$ (1,231)
$ 1,277 
$ 1,317 
Basic (loss) earnings per share attributable to Best Buy Co., Inc.
 
 
 
Continuing operations (in dollars per share)
$ (2.89)
$ 3.51 
$ 3.36 
Discontinued operations (in dollars per share)
$ (0.47)
$ (0.37)
$ (0.20)
Basic (in dollars per share)
$ (3.36)
$ 3.14 
$ 3.16 
Diluted (loss) earnings per share attributable to Best Buy Co., Inc.
 
 
 
Continuing operations (in dollars per share)
$ (2.89)
$ 3.44 
$ 3.29 
Discontinued operations (in dollars per share)
$ (0.47)
$ (0.36)
$ (0.19)
Diluted (in dollars per share)
$ (3.36)
$ 3.08 
$ 3.10 
Weighted-average common shares outstanding (in millions)
 
 
 
Basic (in shares)
366.3 
406.1 
416.8 
Diluted (in shares)
366.3 
416.5 
427.5 
CONSOLIDATED STATEMENTS OF EARNINGS (PARENTHETICAL) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Tax effect of discontinued operation
$ 89 
$ 65 
$ 33 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
OPERATING ACTIVITIES
 
 
 
Net earnings including noncontrolling interests
$ 22 
$ 1,366 
$ 1,394 
Adjustments to reconcile net earnings including noncontrolling interests to total cash provided by operating activities
 
 
 
Depreciation
897 
896 
838 
Amortization of definite-lived intangible assets
48 
82 
88 
Restructuring charges
288 
222 
52 
Goodwill impairment
1,207 
Stock-based compensation
120 
121 
118 
Realized gain on sale of investment
(55)
Deferred income taxes
28 
(134)
(30)
Excess tax benefits from stock-based compensation
(11)
(7)
Other, net
25 
11 
Changes in operating assets and liabilities, net of acquired assets and liabilities:
 
 
 
Receivables
41 
(371)
(63)
Merchandise inventories
120 
(400)
(609)
Other assets
(24)
40 
(98)
Accounts payable
574 
(443)
141 
Other liabilities
(23)
(156)
279 
Income taxes
25 
(33)
103 
Total cash provided by (used in) operating activities
3,293 
1,190 
2,206 
INVESTING ACTIVITIES
 
 
 
Additions to property and equipment, net of $18, $81 and $9 non-cash capital expenditures in fiscal 2012, 2011 and 2010, respectively
(766)
(744)
(615)
Purchases of investments
(112)
(267)
(16)
Sales of investments
290 
415 
56 
Acquisition of businesses, net of cash acquired
(174)
(7)
Proceeds from sale of business, net of cash transferred
21 
Change in restricted assets
40 
(2)
18 
Settlement of net investment hedges
12 
40 
Other, net
(2)
(4)
(16)
Total cash provided by (used in) investing activities
(724)
(569)
(540)
FINANCING ACTIVITIES
 
 
 
Repurchase of common stock
(1,500)
(1,193)
Issuance of common stock under employee stock purchase plan and for the exercise of stock options
67 
179 
138 
Dividends paid
(228)
(237)
(234)
Repayments of debt
(3,412)
(3,120)
(5,342)
Proceeds from issuance of debt
3,921 
3,021 
5,132 
Payment to noncontrolling interest (Note 2)
(1,303)
Acquisition of noncontrolling interests
(21)
(34)
Excess tax benefits from stock-based compensation
11 
Other, net
(23)
(15)
Total cash provided by (used in) financing activities
(2,478)
(1,357)
(348)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
13 
10 
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
96 
(723)
1,328 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
1,103 
1,826 
498 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
1,199 
1,103 
1,826 
Supplemental Disclosure of Cash Flow Information
 
 
 
Income taxes paid
568 
882 
732 
Interest paid
$ 89 
$ 68 
$ 78 
CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Statement of Cash Flows [Abstract]
 
 
 
Non-cash capital expenditures
$ 18 
$ 81 
$ 9 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)
In Millions, except Share data, unless otherwise specified
Total
Total Best Buy Co., Inc. Shareholder's Equity
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Noncontrolling Interest [Member]
Beginning balances at Feb. 28, 2009
$ 5,156 
$ 4,643 
$ 41 
$ 205 
$ 4,714 
$ (317)
$ 513 
Beginning balances (in shares) at Feb. 28, 2009
 
 
414,000,000 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings (loss)
1,394 
1,317 
1,317 
77 
Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
 
 
 
 
 
Foreign currency translation adjustments
405 
329 
329 
76 
Unrealized gains (losses) on available-for-sale securities
28 
28 
28 
Total comprehensive income (loss)
1,827 
1,674 
 
 
 
 
153 
Payment to noncontrolling interest
 
 
 
 
 
 
Purchase accounting adjustments
(22)
(22)
Stock options exercised
96 
96 
95 
Stock options exercised (in shares)
 
 
4,000,000 
 
 
 
 
Tax benefits (loss) from stock options, restricted stock and employee stock purchase plan
(19)
(19)
(19)
Issuance of common stock under employee stock purchase plan
42 
42 
42 
Issuance of common stock under employee stock purchase plan (in shares)
 
 
1,000,000 
 
 
 
 
Stock-based compensation
118 
118 
118 
Common stock dividends, $0.62 per share during the period ended March 3, 2012, $0.58 per share during the period ended February 26, 2011, and $0.56 per share during the period ended February 27, 2010, respectively
(234)
(234)
(234)
Ending balances at Feb. 27, 2010
6,964 
6,320 
42 
441 
5,797 
40 
644 
Ending balances (in shares) at Feb. 27, 2010
 
 
419,000,000 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings (loss)
1,366 
1,277 
1,277 
89 
Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
 
 
 
 
 
Foreign currency translation adjustments
34 
76 
76 
(42)
Unrealized gains (losses) on available-for-sale securities
58 
58 
58 
Cash flow hedging instruments - unrealized gains (losses)
(2)
(1)
(1)
(1)
Total comprehensive income (loss)
1,456 
1,410 
 
 
 
 
46 
Payment to noncontrolling interest
 
 
 
 
 
 
Stock options exercised
134 
134 
134 
Stock options exercised (in shares)
 
 
4,000,000 
 
 
 
 
Vesting of restricted stock (in shares)
 
 
1,000,000 
 
 
 
 
Vesting of restricted stock
Tax benefits (loss) from stock options, restricted stock and employee stock purchase plan
Issuance of common stock under employee stock purchase plan
45 
45 
45 
Issuance of common stock under employee stock purchase plan (in shares)
 
 
1,000,000 
 
 
 
 
Stock-based compensation
121 
121 
121 
Common stock dividends, $0.62 per share during the period ended March 3, 2012, $0.58 per share during the period ended February 26, 2011, and $0.56 per share during the period ended February 27, 2010, respectively
(238)
(238)
(238)
Repurchase of common stock
(1,193)
(1,193)
(3)
(726)
(464)
Repurchase of common stock (in shares)
 
 
(32,000,000)
 
 
 
 
Ending balances at Feb. 26, 2011
7,292 
6,602 
39 
18 
6,372 
173 
690 
Ending balances (in shares) at Feb. 26, 2011
 
 
393,000,000 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Net earnings (loss)
22 
(1,231)
(1,231)
1,253 
Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
 
 
 
 
 
Foreign currency translation adjustments
(21)
(9)
(9)
(12)
Unrealized gains (losses) on available-for-sale securities
(26)
(26)
(26)
Reclassification adjustment for gain on availbable-for-sale securities included in net earnings
(48)
(48)
(48)
Total comprehensive income (loss)
(73)
(1,314)
 
 
 
 
1,241 
Payment to noncontrolling interest
(1,303)
(1,303)
Dividend distribution
(7)
(7)
Stock options exercised
27 
27 
27 
Stock options exercised (in shares)
1,126,000 
 
1,000,000 
 
 
 
 
Tax benefits (loss) from stock options, restricted stock and employee stock purchase plan
(2)
(2)
(2)
Issuance of common stock under employee stock purchase plan
40 
40 
40 
Issuance of common stock under employee stock purchase plan (in shares)
 
 
2,000,000 
 
 
 
 
Stock-based compensation
120 
120 
120 
Common stock dividends, $0.62 per share during the period ended March 3, 2012, $0.58 per share during the period ended February 26, 2011, and $0.56 per share during the period ended February 27, 2010, respectively
(228)
(228)
(228)
Repurchase of common stock
(1,500)
(1,500)
(5)
(203)
(1,292)
Repurchase of common stock (in shares)
 
 
(55,000,000)
 
 
 
 
Ending balances at Mar. 03, 2012
$ 4,366 
$ 3,745 
$ 34 
$ 0 
$ 3,621 
$ 90 
$ 621 
Ending balances (in shares) at Mar. 03, 2012
 
 
341,000,000 
 
 
 
 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (PARENTHETICAL)
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Statement of Stockholders' Equity [Abstract]
 
 
 
Dividends declared per common share (in dollars per share)
$ 0.62 
$ 0.58 
$ 0.56 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

Description of Business

Unless the context otherwise requires, the use of the terms "we," "us" and "our" in these notes to consolidated financial statements refers to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries. We are a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances and related services.

Our enterprise consists of two operating segments which our Chief Executive Officer (our chief operating decision maker) reviews separately to make decisions about resource allocation and to assess performance: Domestic and International. We do not aggregate these operating segments in determining our reportable segments. The Domestic segment is comprised of store, call center and online operations in all states, districts and territories of the U.S., operating under the brand names Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video and Pacific Sales. U.S. Best Buy stores offer a wide variety of consumer electronics, computing and mobile phone products, entertainment products, appliances and related services. Best Buy Mobile offers a wide selection of mobile phones, accessories and related services. Geek Squad provides residential and commercial computer repair, support and installation services. Magnolia Audio Video stores offer high-end audio and video products and related services. Pacific Sales stores offer high-end home-improvement products including appliances, consumer electronics and related services.

The International segment is comprised of: (i) all Canada store, call center and online operations, operating under the brand names Best Buy, Best Buy Mobile, Cell Shop, Connect Pro, Future Shop and Geek Squad, (ii) all Europe store, call center and online operations, operating under the brand names The Carphone Warehouse, The Phone House and Geek Squad, (iii) all China store and call center operations, operating under the brand name Five Star and (iv) all Mexico store operations operating under the brand names Best Buy and Geek Squad. Our International segment offers products and services similar to those of our U.S. Best Buy stores. However, Best Buy Canada stores do not carry appliances and Five Star stores do not carry entertainment products. Further, our small-format stores and offerings in Europe are similar to our Best Buy Mobile format and offerings in the U.S., primarily offering mobile phones, voice and data service plans, and related accessories and services.

In support of our retail store operations, we also maintain Web sites for each of our brands including, but not limited to, BestBuy.com, BestBuy.ca, BestBuyMobile.com, CarphoneWarehouse.com, FutureShop.ca and PhoneHouse.com.

Basis of Presentation

The consolidated financial statements include the accounts of Best Buy Co., Inc. and its consolidated subsidiaries. Investments in unconsolidated entities over which we exercise significant influence but do not have control are accounted for using the equity method. We have eliminated all intercompany accounts and transactions.

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 on a two-month lag. Our policy is to accelerate recording the effect of events occurring in the lag period that significantly affect our consolidated financial statements. In November 2011, we announced plans to close our large-format Best Buy branded stores in the United Kingdom ("U.K."). However, a portion of the charges were not recorded until the stores were closed in January 2012. Accordingly, $82 of restructuring charges recorded in January 2012 related to the store closures were included in our fiscal 2012 results. Furthermore, in January 2012, we determined that the goodwill attributable to our Best Buy Europe reporting unit had been fully impaired. Accordingly, we recorded the $1,207 impairment charge in our fiscal 2012 results. Except for these restructuring activities and the goodwill impairment, no significant intervening event occurred in these operations that would have materially affected our financial condition, results of operations, liquidity or other factors had it been recorded during fiscal 2012. For further information about our fiscal 2012 restructuring and the nature of the charges we recorded, refer to Note 7, Restructuring Charges. For further information about the goodwill impairment, refer to Goodwill and Intangible Assets below, as well as Note 2, Profit Share Buy-Out.

In preparing the accompanying consolidated financial statements, we evaluated the period from March 4, 2012 through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. Other than the fiscal 2013 restructuring announced in March 2012, as described in Note 17, Subsequent Event, no such events were identified for this period.
Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. ("GAAP") requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts in the Consolidated Balance Sheets and Consolidated Statements of Earnings, as well as the disclosure of contingent liabilities. Future results could be materially affected if actual results were to differ from these estimates and assumptions.

Fiscal Year

Our fiscal year ends on the Saturday nearest the end of February. Fiscal 2012 included 53 weeks and fiscal 2011 and 2010 each included 52 weeks.

On November 2, 2011, our Board of Directors approved a change in our fiscal year-end from the Saturday nearest the end of February to the Saturday nearest the end of January, effective beginning with our fiscal year 2013. As a result of this change, our fiscal year 2013 transition period will be 11 months and will end on February 2, 2013, and we will begin 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 aligning our fiscal reporting periods with statutory filing requirements in certain foreign jurisdictions. We will begin filing our quarterly reports on Form 10-Q based on the new fiscal year-end beginning with the first quarter of fiscal year 2013. We also currently plan to report the first quarter of fiscal year 2013 as a three-month period, which will include the results of the last month of fiscal year 2012.

Cash and Cash Equivalents

Cash primarily consists of cash on hand and bank deposits. Cash equivalents consist of money market funds, U.S. Treasury bills, commercial paper and time deposits such as certificates of deposit with an original maturity of three months or less when purchased. The amounts of cash equivalents at March 3, 2012, and February 26, 2011, were $343 and $120, respectively, and the weighted-average interest rates were 0.1% and 0.3%, respectively.

Outstanding checks in excess of funds on deposit (book overdrafts) totaled $80 and $57 at March 3, 2012, and February 26, 2011, respectively, and are reflected within Accounts payable in our Consolidated Balance Sheets.

Receivables

Receivables consist principally of amounts due from mobile phone network operators for commissions earned; banks for customer credit card, certain debit card and electronic benefits transfer (EBT) transactions; and vendors for various vendor funding programs.

We establish allowances for uncollectible receivables based on historical collection trends and write-off history. Our allowances for uncollectible receivables were $72 and $107 at March 3, 2012, and February 26, 2011, respectively.

Merchandise Inventories

Merchandise inventories are recorded at the lower of cost using either the average cost or first-in first-out method, or market. In-bound freight-related costs from our vendors are included as part of the net cost of merchandise inventories. Also included in the cost of inventory are certain vendor allowances that are not a reimbursement of specific, incremental and identifiable costs to promote a vendor's products. Other costs associated with acquiring, storing and transporting merchandise inventories to our retail stores are expensed as incurred and included in cost of goods sold.

Our inventory valuation reflects adjustments for anticipated physical inventory losses (e.g., theft) that have occurred since the last physical inventory. Physical inventory counts are taken on a regular basis to ensure that the inventory reported in our consolidated financial statements is properly stated.

Our inventory valuation also reflects markdowns for the excess of the cost over the amount we expect to realize from the ultimate sale or other disposal of the inventory. Markdowns establish a new cost basis for our inventory. Subsequent changes in facts or circumstances do not result in the reversal of previously recorded markdowns or an increase in that newly established cost basis.

Restricted Assets

Restricted cash and investments in debt securities totaled $461 and $490, at March 3, 2012, and February 26, 2011, respectively, and are included in Other current assets or Equity and Other Investments in our Consolidated Balance Sheets. Such balances are pledged as collateral or restricted to use for vendor payables, general liability insurance, workers' compensation insurance and warranty programs.

Property and Equipment

Property and equipment are recorded at cost. We compute depreciation using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the period from the date the assets are placed in service to the end of the initial lease term. Leasehold improvements made significantly after the initial lease term are depreciated over the shorter of their estimated useful lives or the remaining lease term, including renewal periods, if reasonably assured. Accelerated depreciation methods are generally used for income tax purposes.

When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from our Consolidated Balance Sheets and any resulting gain or loss is reflected in our Consolidated Statements of Earnings.

Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated.

Costs associated with the acquisition or development of software for internal use are capitalized and amortized over the expected useful life of the software, from three to seven years. A subsequent addition, modification or upgrade to internal-use software is capitalized to the extent that it enhances the software's functionality or extends its useful life. Capitalized software is included in fixtures and equipment. Software maintenance and training costs are expensed in the period incurred.

Property under capital lease is comprised of buildings and equipment used in our retail operations and corporate support functions. The related depreciation for capital lease assets is included in depreciation expense. The carrying value of property under capital lease was $69 and $74 at March 3, 2012, and February 26, 2011, respectively, net of accumulated depreciation of $60 and $45, respectively.

Estimated useful lives by major asset category are as follows:
Asset
Life
(in years)
Buildings
25-50
Leasehold improvements
3-25
Fixtures and equipment
3-20
Property under capital lease
2-20


Impairment of Long-Lived Assets and Costs Associated With Exit Activities

Long-lived assets, such as property and equipment, are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Factors considered important that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or planned operating results, significant changes in the manner of use of the assets or significant changes in our business strategies. An impairment loss is recognized when the estimated undiscounted cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis).

When reviewing long-lived assets for impairment, we group long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For example, long-lived assets deployed at store locations are reviewed for impairment at the individual store level, which involves comparing the carrying value of all land, buildings, leasehold improvements, fixtures and equipment located at each store to the net cash flow projections for each store. In addition, we conduct separate impairment reviews at other levels as appropriate, for example to evaluate potential impairment of assets shared by several areas of operations, such as information technology systems.
The present value of costs associated with location closings, primarily future lease costs (net of expected sublease income), are charged to earnings when we have ceased using the specific location. We accelerate depreciation on property and equipment we expect to retire when a decision is made to abandon a location.

At March 3, 2012, and February 26, 2011, the obligation associated with location closings was $138 and $76, respectively, and is included within Accrued liabilities and Long-term liabilities in our Consolidated Balance Sheets. The obligation associated with location closings at March 3, 2012, included amounts associated with our fiscal 2012 and fiscal 2011 restructuring activities and the obligation associated with location closings at February 26, 2011, included amounts associated with our fiscal 2011 restructuring activities.

Leases

We conduct the majority of our retail and distribution operations from leased locations. The leases require payment of real estate taxes, insurance and common area maintenance, in addition to rent. The terms of our lease agreements generally range from 10 to 20 years. Most of the leases contain renewal options and escalation clauses, and certain store leases require
contingent rents based on factors such as specified percentages of revenue or the consumer price index.

For leases that contain predetermined fixed escalations of the minimum rent, we recognize the related rent expense on a straight-line basis from the date we take possession of the property to the end of the initial lease term. We record any difference between the straight-line rent amounts and amounts payable under the leases as part of deferred rent, in Accrued liabilities or Long-term liabilities, as appropriate.

Cash or lease incentives received upon entering into certain store leases ("tenant allowances") are recognized on a straight-line basis as a reduction to rent from the date we take possession of the property through the end of the initial lease term. We record the unamortized portion of tenant allowances as a part of deferred rent, in Accrued liabilities or Long-term liabilities, as appropriate.

At March 3, 2012, and February 26, 2011, deferred rent included in Accrued liabilities in our Consolidated Balance Sheets was $42 and $34, respectively, and deferred rent included in Long-term liabilities in our Consolidated Balance Sheets was $317 and $343, respectively.

We also lease certain equipment under noncancelable operating and capital leases. In addition, we have financing leases for which the gross cost of constructing the asset is included in property and equipment, and amounts reimbursed from the landlord are recorded as financing obligations. Assets acquired under capital and financing leases are depreciated over the shorter of the useful life of the asset or the lease term, including renewal periods, if reasonably assured.

Goodwill and Intangible Assets

Goodwill

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment annually in the fiscal fourth quarter, or when indications of potential impairment exist. We monitor the existence of potential impairment indicators throughout the fiscal year.

We test for goodwill impairment at the reporting unit level. Our reporting units are the components of operating segments which constitute businesses for which discrete financial information is available and is regularly reviewed by segment management. No components were aggregated in arriving at our reporting units. Our reporting units with goodwill balances at the beginning of fiscal 2012 were Best Buy Domestic, Best Buy Canada, Five Star China and Best Buy Europe.

The impairment test involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the fair value exceeds carrying value, then we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit's goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit's goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.

We carry forward the detailed determination of the fair value of a reporting unit in our annual goodwill impairment analysis if three criteria are met: (1) the assets and liabilities that make up the reporting unit have not changed significantly since the most recent detailed fair value determination; (2) the most recent detailed fair value determination resulted in an amount that exceeded the carrying amount of the reporting unit by a substantial margin; and (3) based on an analysis of events that have occurred since the most recent detailed fair value determination, the likelihood that current fair value is less than the current carrying amount of the reporting unit is remote. For all other reporting units, we perform a detailed determination of fair value of the reporting unit.

Our detailed impairment analysis involves the use of a discounted cash flow ("DCF") model. Significant management judgment is necessary to evaluate the impact of operating and macroeconomic changes on each reporting unit. Critical assumptions include projected comparable store sales growth, store count, gross profit rates, selling, general and administrative expense ("SG&A") rates, working capital fluctuations, capital expenditures and terminal growth rates, as well as an appropriate discount rate. Discount rates are determined separately for each reporting unit using the capital asset pricing model. We also use comparable market earnings multiple data and our company's market capitalization to corroborate our reporting unit valuations.

Goodwill Impairment

For the Best Buy Domestic, Best Buy Canada and Five Star China reporting units, we utilized the carry-forward methodology outlined above in completing the fiscal 2012 goodwill impairment reviews. For each of these reporting units, we determined that the fair value of goodwill remained substantially in excess of carrying values. No goodwill impairments were recorded in fiscal 2011 or fiscal 2010.

Refer to Note 2, Profit Share Buy-Out, for further information on the $1,207 goodwill impairment attributable to the Best Buy Europe reporting unit recorded in the fourth quarter of fiscal 2012.

Tradenames and Customer Relationships

We have an indefinite-lived tradename related to Pacific Sales included within our Domestic segment. We also have indefinite-lived tradenames related to Future Shop, Five Star, The Carphone Warehouse and The Phone House included within our International segment.

We have definite-lived intangible assets related to customer relationships acquired as part of our acquisition of mindSHIFT within our Domestic segment, and Best Buy Europe within our International segment.

Our valuation of identifiable intangible assets acquired is based on information and assumptions available to us at the time of acquisition, using income and market approaches to determine fair value. We amortize definite-lived intangible assets over their estimated useful lives. We do not amortize our indefinite-lived tradenames, but test for impairment annually, or when indications of potential impairment exist.

We utilize the relief from royalty method to determine the fair value of each of our indefinite-lived tradenames. If the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess. Significant management judgment is necessary to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates. Royalty rates used are consistent with those assumed for original purchase accounting. Other assumptions are consistent with those we use for goodwill impairment testing purposes.

The changes in the carrying amount of goodwill and indefinite-lived tradenames by segment were as follows in fiscal 2012, 2011 and 2010:
 
Goodwill
 
Indefinite-Lived Tradenames
 
Domestic

 
International

 
Total

 
Domestic

 
International

 
Total

Balances at February 28, 2009
$
434

 
$
1,769

 
$
2,203

 
$
32

 
$
72

 
$
104

Purchase accounting adjustments(1)

 
48

 
48

 

 

 

Changes in foreign currency exchange rates

 
201

 
201

 

 
8

 
8

Balances at February 27, 2010
434

 
2,018

 
2,452

 
32

 
80

 
112

Acquisitions

 
5

 
5

 

 

 

Impairments(2)

 

 

 
(10
)
 

 
(10
)
Sale of business(3)
(12
)
 

 
(12
)
 
(1
)
 

 
(1
)
Changes in foreign currency exchange rates

 
9

 
9

 

 
4

 
4

Balances at February 26, 2011
422

 
2,032

 
2,454

 
21

 
84

 
105

Acquisitions(4)
94

 

 
94

 
1

 

 
1

Impairments

 
(1,207
)
 
(1,207
)
 

 

 

Sale of business

 
(7
)
 
(7
)
 
(3
)
 
(2
)
 
(5
)
Changes in foreign currency exchange rates

 
1

 
1

 

 
1

 
1

Other(5)

 

 

 

 
28

 
28

Balances at March 3, 2012
$
516

 
$
819

 
$
1,335

 
$
19

 
$
111

 
$
130

(1)
The adjustment in fiscal 2010 related to the finalization of the purchase price allocations from our acquisitions of Best Buy Europe and Five Star.
(2)
As part of our fiscal 2011 restructuring activities, we recorded an impairment charge related to certain indefinite-lived tradenames in our Domestic segment. See Note 7, Restructuring Charges, for further information.
(3)
As a result of the sale of our Speakeasy business in the second quarter of fiscal 2011, we eliminated the carrying value of the related goodwill and indefinite-lived tradenames as of the date of sale.
(4)
Represents goodwill acquired, primarily as a result of the mindSHIFT acquisition. See Note 4, Acquisitions, for further information.
(5)
Represents the transfer of certain definite-lived tradenames (at their net book value) to indefinite-lived tradenames following our decision to no longer 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:
 
March 3, 2012
 
February 26, 2011
 
Gross Carrying
Amount
 
Cumulative
Impairment
 
Gross Carrying
Amount
 
Cumulative
Impairment
Goodwill
$
2,596

 
$
(1,261
)
 
$
2,519

 
$
(65
)


Our tradenames and customer relationships were as follows:
 
March 3, 2012
 
February 26, 2011
 
Tradenames

 
Customer
Relationships

 
Tradenames

 
Customer
Relationships

Indefinite-lived
$
130

 
$

 
$
105

 
$

Definite-lived

 
229

 
28

 
203

Total
$
130

 
$
229

 
$
133

 
$
203



The following table provides the gross carrying amount and related accumulated amortization of definite-lived intangible assets:
 
March 3, 2012
 
February 26, 2011
 
Gross Carrying
Amount

 
Accumulated Amortization

 
Gross Carrying
Amount

 
Accumulated Amortization

Tradenames
$

 
$

 
$
73

 
$
(45
)
Customer relationships
453

 
(224
)
 
383

 
(180
)
Total
$
453

 
$
(224
)
 
$
456

 
$
(225
)


Total amortization expense was $48, $82, and $88 in fiscal 2012, 2011, and 2010, respectively. At March 3, 2012, future amortization expense for identifiable intangible assets for the next five fiscal years was expected to be:
Fiscal Year
 
2013
$
40

2014
40

2015
40

2016
40

2017
22

Thereafter
47



Lease Rights

Lease rights represent costs incurred to acquire the lease of a specific commercial property. Lease rights are recorded at cost and are amortized to rent expense over the remaining lease term, including renewal periods, if reasonably assured. Amortization periods range up to 15 years, beginning with the date we take possession of the property.

The following table provides the gross carrying amount and related accumulated amortization of lease rights:
 
March 3, 2012
 
February 26, 2011
 
Gross Carrying
Amount

 
Accumulated
Amortization

 
Gross Carrying
Amount

 
Accumulated
Amortization

Lease rights
$
130

 
$
(73
)
 
$
131

 
$
(57
)


Lease rights amortization expense was $13, $14 and $18 in fiscal 2012, 2011 and 2010, respectively. We expect current lease rights amortization expense to be approximately $7 for each of the next five fiscal years.

Investments

Debt Securities

Our long-term investments in debt securities are comprised of auction-rate securities ("ARS"). Based on our ability to market and sell these instruments, we classify ARS as available-for-sale and carry them at fair value. ARS were intended to behave like short-term debt instruments because their interest rates reset periodically through an auction process, typically at intervals of seven, 28 and 35 days. Investments in these securities can be sold for cash at par value on the auction date if the auction is successful. The majority of our ARS are AAA/Aaa-rated and collateralized by student loans, which are guaranteed 95% to 100% by the U.S. government. We also hold ARS that are in the form of municipal revenue bonds, which are AA/Aa-rated and insured by bond insurers. We do not have any investments in securities that are collateralized by assets that include mortgages or subprime debt. Our intent with these investments is to recover the full principal amount through a successful auction process, a sale outside of the auction process, a refinancing or settlement upon maturity. See Note 5, Investments, for further information.

In accordance with our investment policy, we place our investments in debt securities with issuers who have high-quality credit and limit the amount of investment exposure to any one issuer. The primary objective of our investment activities is to preserve principal and maintain a desired level of liquidity to meet working capital needs. We seek to preserve principal and minimize exposure to interest rate fluctuations by limiting default risk, market risk and reinvestment risk.
Marketable Equity Securities

We also periodically invest in marketable equity securities and classify them as available-for-sale. Investments in marketable equity securities are included in Equity and Other Investments in our Consolidated Balance Sheets, and are reported at fair value based on quoted market prices. All unrealized holding gains and losses are reflected net of tax in accumulated other comprehensive income in shareholders' equity.

Other Investments

We also have investments that are accounted for on either the cost method or the equity method that we include in Equity and Other Investments in our Consolidated Balance Sheets.

We review the key characteristics of our debt, marketable equity securities and other investments portfolio and their classification in accordance with GAAP on a quarterly basis, or when indications of potential impairment exist. If a decline in the fair value of a security is deemed by management to be other-than-temporary, we write down the cost basis of the investment to fair value, and the amount of the write-down is included in net earnings.

Insurance

We are self-insured for certain losses related to health, workers' compensation and general liability claims, although we obtain third-party insurance coverage to limit our exposure to these claims. A portion of these self-insured losses are managed through a wholly-owned insurance captive. We estimate our self-insured liabilities using a number of factors, including historical claims experience, an estimate of incurred but not reported claims, demographic factors and severity factors, and utilizing valuations provided by independent third-party actuaries. Our self-insured liabilities included in the Consolidated Balance Sheets were as follows:
 
March 3,
2012

 
February 26, 2011

Accrued liabilities
$
77

 
$
81

Long-term liabilities
47

 
49

Total
$
124

 
$
130



Income Taxes

We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured pursuant to tax laws using rates we expect to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We recognize the effect of a change in income tax rates on deferred tax assets and liabilities in our Consolidated Statements of Earnings in the period that includes the enactment date. We record a valuation allowance to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized.

In determining our provision for income taxes, we use an annual effective income tax rate based on annual income, permanent differences between book and tax income, and statutory income tax rates. The effective income tax rate also reflects our assessment of the ultimate outcome of tax audits. We adjust our annual effective income tax rate as additional information on outcomes or events becomes available. Discrete events such as audit settlements or changes in tax laws are recognized in the period in which they occur.

Our income tax returns, like those of most companies, are periodically audited by U.S. federal, state and local and foreign tax authorities. These audits include questions regarding our tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any one time, multiple tax years are subject to audit by the various tax authorities. In evaluating the tax benefits associated with our various tax filing positions, we record a tax benefit for uncertain tax positions using the highest cumulative tax benefit that is more likely than not to be realized. A number of years may elapse before a particular matter, for which we have established a liability, is audited and effectively settled. We adjust our liability for unrecognized tax benefits in the period in which we determine the issue is effectively settled with the tax authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available. We include our liability for unrecognized tax benefits, including accrued penalties and interest, in Accrued income taxes and Long-term liabilities on our Consolidated Balance Sheets and in Income tax expense in our Consolidated Statements of Earnings.

Accrued Liabilities

The major components of accrued liabilities at March 3, 2012, and February 26, 2011, were deferred revenue, state and local tax liabilities, rent-related liabilities including accrued real estate taxes, loyalty program liabilities and self-insurance reserves.

Long-Term Liabilities

The major components of long-term liabilities at March 3, 2012, and February 26, 2011, were unrecognized tax benefits, rent-related liabilities, deferred revenue, deferred compensation plan liabilities and self-insurance reserves.

Foreign Currency

Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at our consolidated balance sheet date. For operations reported on a two-month lag, we use the exchange rates in effect two months prior to our consolidated balance sheet date. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component of shareholders' equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in SG&A, have not been significant.

Revenue Recognition

Our revenue arises primarily from sales of merchandise and services. We also record revenue from sales of extended warranties and other service contracts, commissions earned from various customer subscriptions, fees earned from private label and co-branded credit card agreements and amounts billed to customers for shipping and handling. Revenue excludes sales taxes collected.

We recognize revenue when the sales price is fixed or determinable, collection is reasonably assured and the customer takes possession of the merchandise, or in the case of services, the service has been provided. Revenue is recognized for store sales when the customer receives and pays for the merchandise. For online sales, we defer revenue and the related product costs for shipments that are in-transit to the customer, and recognize revenue at the time the customer receives the product. Online customers typically receive goods within a few days of shipment. Revenue from merchandise sales and services is reported net of sales returns, including an estimate of future returns based on historical return rates, with a corresponding reduction to cost of sales. Our sales returns reserve was $18 and $15, at March 3, 2012, and February 26, 2011, respectively.

We sell extended warranties and other service contracts that typically have terms ranging from three months to four years. We also receive commissions for customer subscriptions with various third parties, notably from mobile phone network operators. In instances where we are deemed to be the obligor on the service contract or subscription, the service and commission revenue is deferred and recognized ratably over the term of the service contract or subscription period. In instances where we are not deemed to be the obligor on the service contract or subscription, commissions are recognized in revenue when such commission has been earned, primarily driven by customer activation. Service and commission revenues earned from the sale of extended warranties represented 2.7%, 2.6% and 2.7% of revenue in fiscal 2012, 2011 and 2010, respectively.

For revenue transactions that involve multiple deliverables, we defer the revenue associated with any undelivered elements. The amount of revenue deferred in connection with the undelivered elements is determined using the relative fair value of each element, which is generally based on each element's relative retail price.

At March 3, 2012, and February 26, 2011, deferred revenue included within Accrued liabilities and Long-term liabilities in our Consolidated Balance Sheets was $565 and $499, respectively.

For additional information related to our credit card arrangements, see Credit Services and Financing, below.

For additional information regarding our customer loyalty programs, see Sales Incentives, below.

Gift Cards

We sell gift cards to our customers in our retail stores, through our Web sites and through selected third parties. We do not charge administrative fees on unused gift cards, and our gift cards do not have an expiration date. We recognize revenue from gift cards when: (i) the gift card is redeemed by the customer, or (ii) the likelihood of the gift card being redeemed by the customer is remote ("gift card breakage"), and we determine that we do not have a legal obligation to remit the value of unredeemed gift cards to the relevant jurisdictions. We determine our gift card breakage rate based upon historical redemption patterns. Based on our historical information, the likelihood of a gift card remaining unredeemed can be determined 24 months after the gift card is issued. At that time, we recognize breakage income for those cards for which the likelihood of redemption is deemed remote and we do not have a legal obligation to remit the value of such unredeemed gift cards to the relevant jurisdictions. Gift card breakage income is included in revenue in our Consolidated Statements of Earnings.

Gift card breakage income was as follows in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Gift card breakage income
$
54

 
$
51

 
$
41


Credit Services and Financing

In the U.S., we have private-label and co-branded credit card agreements with banks for the issuance of promotional financing and customer loyalty credit cards bearing the Best Buy brand. Under the agreements, the banks manage and directly extend credit to our customers. Cardholders who choose a private-label credit card can receive low- or zero-interest promotional financing on qualifying purchases.

The banks are the sole owner of the accounts receivable generated under the programs and absorb losses associated with non-payment by the cardholders and fraudulent usage of the accounts. Accordingly, we do not hold any consumer receivables related to these programs. We earn revenue from fees the banks pay to us based on the number of credit card accounts activated and card usage. In accordance with accounting guidance for revenue arrangements with multiple deliverables, we defer revenue received from cardholder account activations and recognize revenue on a straight-line basis over the remaining term of the applicable agreement with the banks. The banks may also reimburse us for certain costs such as tender costs and Reward Zone points associated with our programs. We pay financing fees, which are recognized as a reduction of revenue, to the banks, and these fees are variable based on certain factors such as the London Interbank Offered Rate ("LIBOR"), charge volume and/or the types of promotional financing offers.

We also have similar agreements for the issuance of private-label and/or co-branded credit cards with banks for our businesses in Canada, China and Mexico, which we account for consistent with the U.S. credit card agreements.

In addition to our private-label and co-branded credit cards, we also accept Visa®, MasterCard®, Discover®, JCB® and American Express® credit cards, as well as debit cards from all major international networks.

Sales Incentives

We frequently offer sales incentives that entitle our customers to receive a reduction in the price of a product or service. Sales incentives include discounts, coupons and other offers that entitle a customer to receive a reduction in the price of a product or service either at the point of sale or by submitting a claim for a refund or rebate. For sales incentives issued to a customer in conjunction with a sale of merchandise or services, for which we are the obligor, the reduction in revenue is recognized at the time of sale, based on the retail value of the incentive expected to be redeemed.

Customer Loyalty Programs

We have customer loyalty programs which allow members to earn points for each qualifying purchase. Points earned enable members to receive a certificate that may be redeemed on future purchases at our Best Buy branded stores. There are two ways that members may participate and earn loyalty points.

First, we have customer loyalty programs where members earn points for each purchase. Depending on the customer's membership level within our loyalty program, certificates expire either three or six months from the date of issuance. The retail value of points earned by our loyalty program members is included in accrued liabilities and recorded as a reduction of revenue at the time the points are earned, based on the percentage of points that are projected to be redeemed.
Second, under our co-branded credit card agreements with banks, we have a customer loyalty credit card bearing the Best Buy brand. Cardholders earn points for purchases made at our stores and related Web sites in the U.S., as well as purchases at other merchants. Points earned entitle cardholders to receive certificates that may be redeemed on future purchases at our stores and related Web sites. Certificates expire either three or six months from the date of issuance. The retail value of points earned by our cardholders is included in accrued liabilities and recorded as a reduction of revenue at the time the points are earned, based on the percentage of points that are projected to be redeemed.

We recognize revenue when: (i) a certificate is redeemed by the customer, (ii) a certificate expires or (iii) the likelihood of a certificate being redeemed by a customer is remote ("certificate breakage"). We determine our certificate breakage rate based upon historical redemption patterns.

Cost of Goods Sold and Selling, General and Administrative Expenses

The following table illustrates the primary costs classified in each major expense category:
Cost of Goods Sold
 
Total cost of products sold including:
 
 
 
Freight expenses associated with moving merchandise inventories from our vendors to our distribution centers;
 
 
 
Vendor allowances that are not a reimbursement of specific, incremental and identifiable costs to promote a vendor's products; and
 
 
 
Cash discounts on payments to merchandise vendors;
 
Cost of services provided including:
 
 
 
Payroll and benefits costs for services employees; and
 
 
 
Cost of replacement parts and related freight expenses;
 
Physical inventory losses;
 
Markdowns;
 
Customer shipping and handling expenses;
 
Costs associated with operating our distribution network, including payroll and benefit costs, occupancy costs, and depreciation; and
 
Freight expenses associated with moving merchandise inventories from our distribution centers to our retail stores.
SG&A
 
Payroll and benefit costs for retail and corporate employees;
 
Occupancy and maintenance costs of retail, services and corporate facilities;
 
Depreciation and amortization related to retail, services and corporate assets;
 
Advertising costs;
 
Vendor allowances that are a reimbursement of specific, incremental and identifiable costs to promote a vendor's products;
 
Tender costs, including bank charges and costs associated with credit and debit card interchange fees;
 
Charitable contributions;
 
Outside and outsourced service fees;
 
Long-lived asset impairment charges; and
 
Other administrative costs, such as supplies, and travel and lodging.


Vendor Allowances

We receive funds from vendors for various programs, primarily as reimbursements for costs such as markdowns, margin protection, advertising and sales incentives.

Vendor allowances provided as a reimbursement of specific, incremental and identifiable costs incurred to promote a vendor's products are included as an expense reduction when the cost is incurred. All other vendor allowances are generally in the form of receipt-based funds or sell-through credits. Receipt-based funds are generally determined based on our level of inventory purchases and initially deferred and recorded as a reduction of merchandise inventories. The deferred amounts are then included as a reduction of cost of goods sold when the related product is sold. Sell-through credits are generally based on the number of units we sell over a specified period and are recognized when the related product is sold.

Vendor allowances included in SG&A for reimbursement of specific, incremental and identifiable costs to promote and sell a vendor's products were $33, $69 and $139 in fiscal 2012, 2011 and 2010, respectively. A change in the form of vendor contracts in 2011 has led to a higher proportion of vendor allowances being classified within cost of goods sold.

Advertising Costs

Advertising costs, which are included in SG&A, are expensed the first time the advertisement runs. Advertising costs consist primarily of print and television advertisements as well as promotional events. Net advertising expenses were $995, $862 and $709 in fiscal 2012, 2011 and 2010, respectively. Allowances received from vendors for advertising of $98 in fiscal 2010 were classified as reductions of advertising expenses. As a result of a change in the form of vendor contracts, we received no allowances from vendors for advertising expenses that were deemed specific, incremental and identifiable in fiscal 2012 or fiscal 2011.

Pre-Opening Costs

Non-capital expenditures associated with opening new stores are expensed as incurred.

Stock-Based Compensation

We apply the fair value recognition provisions of accounting guidance as they relate to our stock-based compensation, which require us to recognize expense for the fair value of our stock-based compensation awards. We recognize compensation expense on a straight-line basis over the requisite service period of the award (or to an employee's eligible retirement date, if earlier).

New Accounting Standards

Goodwill Impairment — In September 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance simplifying how to test 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. As such, we will adopt the new guidance in our fiscal quarter ending May 5, 2012. We do not believe our adoption of the new guidance will 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 eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes 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. As such, we will adopt the new guidance in our fiscal quarter ending May 5, 2012.

Fair Value Measurement — In April 2011, the FASB issued new guidance to achieve common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards. This new guidance amends 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. As such, we will adopt the new guidance in our fiscal quarter ending May 5, 2012. We do not believe our adoption of the new guidance will have an impact on our consolidated financial position, results of operations or cash flows.
Profit Share Buy-Out
Profit Share Buy-Out
Profit Share Buy-Out

During fiscal 2008, we entered into a profit-sharing agreement with Carphone Warehouse Group plc ("Carphone Warehouse") (the "profit share agreement"). Under the terms of this agreement, Carphone Warehouse provided expertise and certain other resources to enhance our mobile telephone retail business ("Best Buy Mobile") in return for a share of incremental profits generated in excess of defined thresholds.
During fiscal 2009, we acquired a 50% controlling interest in the retail business of Carphone Warehouse, subsequently renamed Best Buy Europe Distributions Limited ("Best Buy Europe"), which included the profit share agreement with Best Buy Mobile. Carphone Warehouse holds a 50% noncontrolling interest in Best Buy Europe. Following the acquisition of Best Buy Europe, payments made by Best Buy Mobile to Best Buy Europe were recorded as SG&A expense in Best Buy Mobile (Domestic segment), and an SG&A reduction in Best Buy Europe (International segment). Carphone Warehouse's 50% share of the net earnings of Best Buy Europe, which includes the profit share agreement, is recorded in Net (earnings) from continuing operations attributable to noncontrolling interests within our Consolidated Statements of Earnings.

In November 2011, we announced strategic changes in respect of Best Buy Europe, including an agreement to buy out Carphone Warehouse's interest in the profit share agreement for $1,303 (the "Mobile buy-out"), subject to the approval of Carphone Warehouse shareholders. The Mobile buy-out was completed during the fourth quarter of fiscal 2012.

Financial Reporting Impact of the Mobile Buy-out

We accounted for the Mobile buy-out transaction as a $1,303 payment to terminate the future payments due under the profit share agreement with Best Buy Europe, thereby eliminating Carphone Warehouse's interest in the profits. This payment was presented within Net (earnings) from continuing operations attributable to noncontrolling interests in our Consolidated Statements of Earnings, consistent with the financial reporting of the previous recurring payments made pursuant to the profit share agreement. In the Consolidated Statements of Cash Flows, the payment to Carphone Warehouse is included within Payment to noncontrolling interest, as part of cash flows from financing activities.

Goodwill Impairment – Best Buy Europe

The Best Buy Europe reporting unit comprises our 50% controlling interest in Best Buy Europe, which includes the profit share agreement with Best Buy Mobile. Based upon the preliminary purchase price allocation for the Best Buy Europe acquisition in the second quarter of fiscal 2009, we recorded $1,491 of goodwill. The goodwill balance attributable to our Best Buy reporting unit has fluctuated over time as a result of changes in foreign currency exchange rates. No impairment had been recorded through the end of the third quarter of fiscal 2012.

At the time of the announcement of the Mobile buy-out in November 2011, we also announced the closure of our large-format Best Buy branded stores in the U.K. As of the end of the third quarter of fiscal 2012 and in light of these strategic decisions, we performed an interim evaluation of potential impairment of goodwill associated with the Best Buy Europe reporting unit. The fair value of the reporting unit, which reflected the exit plans for our large-format Best Buy branded stores in the U.K. and the fair value of the profit share agreement indicated by the Mobile buy-out price agreed upon with Carphone Warehouse, was determined to be in excess of the carrying value of the Best Buy Europe reporting unit as of the end of the third quarter of fiscal 2012. However, if the shareholders of Carphone Warehouse were to approve the Mobile buy-out, we estimated that substantially all of the goodwill associated with the Best Buy Europe reporting unit would be impaired in the absence of forecast cash flows to the reporting unit under the profit share agreement.

On January 24, 2012, the shareholders of Carphone Warehouse approved the Mobile buy-out and thus the transaction became unconditional. We conducted an impairment review of the goodwill associated with the Best Buy Europe reporting unit as of this date. Following the elimination of the profit share agreement from Best Buy Europe and the closure of large-format Best Buy branded stores in the U.K., the remaining fair value of the Best Buy Europe reporting unit is entirely attributable to its small-format store retail operations. Management determined the fair value of the reporting unit by reference to estimated future cash flows discounted to present value using a discount rate of 9.0%. The reporting unit fair value determined was also corroborated by reference to market data. The fair value determined was less than the carrying value of Best Buy Europe, and therefore further analysis was conducted to determine the implied fair value of goodwill. This included first determining the fair value of all identifiable tangible and intangible assets and liabilities attributable to Best Buy Europe, in a manner consistent with purchase accounting methodology. Once complete, the aggregate fair value of all assets and liabilities was compared to the reporting unit fair value determined, to ascertain the implied fair value of goodwill. Based on this analysis, it was determined that goodwill attributable to the Best Buy Europe reporting unit, representing $1,207 as of January 24, 2012, had been fully impaired. The impairment loss was recorded in the Goodwill impairment line within our Consolidated Statements of Earnings in the fourth quarter of fiscal 2012.

Acceleration of Intervening Event

The results of Best Buy Europe are recorded on a two-month lag. However, as described in Note 1, Summary of Significant Accounting Policies, the Mobile buy-out in January 2012 constituted a significant intervening event. Consequently, the recording of all accounting impacts arising from the Mobile buy-out, including the goodwill impairment, was accelerated and recorded in the fourth quarter of fiscal 2012 due to their significance to our consolidated financial statements.
Discontinued Operations
Discontinued Operations
Discontinued Operations

During fiscal 2011 and the first three quarters of fiscal 2012, we determined that the aggregate financial results from discontinued operations were not material, and therefore, we did not separately present discontinued operations in our consolidated financial statements. During the fourth quarter of fiscal 2012, we determined that with the discontinuation of our large-format Best Buy branded stores in the U.K., aggregate discontinued operations were material and would require separate presentation. We therefore commenced discontinued operations presentation during the fourth quarter of fiscal 2012, and included the results of all operations discontinued during fiscal 2012 and fiscal 2011. We did not discontinue any operations during fiscal 2010. The discontinued operations presentation has been retrospectively applied to all prior periods presented.

Discontinued operations comprise the following:

Domestic Segment

Speakeasy – During the second quarter of fiscal 2011, we completed the sale of Speakeasy to Covad Communications. Speakeasy's operations primarily comprised internet-based telephony services. In consideration for the sale of Speakeasy, Best Buy received cash consideration and a minority equity interest in the combined operations. We do not exercise significant influence over the combined operations. Based upon the fair value of the consideration received and the carrying value of Speakeasy at closing, we recorded a pre-tax gain on sale of $7 in the second quarter of fiscal 2011.

Napster – During the third quarter of fiscal 2012, we sold certain assets comprising the domestic operations of Napster, Inc. to Rhapsody International and ceased operations in the U.S. Napster's operations comprised digital media download and streaming services in the U.S. In consideration for the sale of these assets, Best Buy received a minority investment in Rhapsody International. We do not exercise significant influence over Rhapsody International.

International Segment

Best Buy China – During the fourth quarter of fiscal 2011, we announced the restructuring of our eight large-format Best Buy branded stores in China. The closure of Best Buy branded stores was completed in the first quarter of fiscal 2012. Our fiscal 2011 restructuring activities included plans to restructure the large-format Best Buy branded stores in China.

Best Buy Turkey – During the fourth quarter of fiscal 2011, we announced the closure of our two large-format Best Buy branded stores in Turkey. The exit activities were completed during the second quarter of fiscal 2012, at which time we recorded a $4 pre-tax gain on the sale of certain assets related to the stores.

Best Buy U.K. – During the third quarter of fiscal 2012, we announced the closure of our eleven large-format Best Buy branded stores in the U.K. We completed the exit activities associated with these stores during the fourth quarter of fiscal 2012.

Belgium – During the fourth quarter of fiscal 2012, Best Buy Europe sold its retail business in Belgium, consisting of 82 small-format The Phone House stores, to Belgacom S.A. As a result of the sale, a pre-tax gain of $5 was recorded in fiscal 2012.

The financial results of discontinued operations for fiscal 2012, 2011 and 2010 were as follows:
 
2012

 
2011

 
2010

Revenue
$
411

 
$
525

 
$
451

 
 
 
 
 
 
Restructuring charges(1)
229

 
75

 

 
 
 
 
 
 
Loss from discontinued operations before income tax benefit
(406
)
 
(260
)
 
(134
)
Income tax benefit
89

 
57

 
33

Gain on sale of discontinued operations
9

 
7

 

Income tax benefit on sale

 
8

 

Net loss from discontinued operations including noncontrolling interests
(308
)
 
(188
)
 
(101
)
Net loss from discontinued operations attributable to noncontrolling interests
134

 
38

 
19

Net loss from discontinued operations attributable to Best Buy Co., Inc.
$
(174
)
 
$
(150
)
 
$
(82
)
(1)
See Note 7, Restructuring Charges, for further discussion of the restructuring charges associated with discontinued operations.
Aquisitions
Acquisitions
Acquisitions

mindSHIFT

In December 2011, we acquired 100% of mindSHIFT Technologies, Inc. ("mindSHIFT"), a managed service provider for small- and mid-sized companies, for $175 (or $168 net of cash acquired). The acquisition date was the close of business on December 28, 2011. We have consolidated mindSHIFT in our financial results as part of our Domestic segment from the date of acquisition. We expect the allocation of the purchase price to the acquired assets and liabilities to be finalized in the first quarter of fiscal 2013. Of the $175 final purchase price, $74 was allocated to customer relationships and $91 was allocated to goodwill, with the remaining $10 allocated primarily to working capital and property, plant and equipment. The customer relationships will be amortized over a weighted average period of 15 years. None of the goodwill is deductible for tax purposes.

We entered into this transaction as mindSHIFT is the leading managed service provider for small and mid-sized business in the U.S. Coupled with our retail, Geek Squad services and Best Buy for Business operations, we anticipate that mindSHIFT will capture a greater share of the small-to-mid-sized managed service provider market.
Investments
Investments
  Investments

Investments were comprised of the following:
 
March 3,
2012

 
February 26,
2011

Short-term investments
 
 
 
Money market fund
$

 
$
2

U.S. Treasury bills

 
20

Total short-term investments
$

 
$
22

 
 
 
 
Equity and other investments
 
 
 
Debt securities (auction rate securities)
$
82

 
$
110

Marketable equity securities
3

 
146

Other investments
55

 
72

Total equity and other investments
$
140

 
$
328



Debt Securities

Our debt securities are comprised of 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 seven, 28 and 35 days. The auction process had historically provided a means by which we could rollover 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 Consolidated Balance Sheets at March 3, 2012.

We sold $27 of ARS at par during fiscal 2012. However, at March 3, 2012, our entire remaining ARS portfolio, consisting of 17 investments in ARS having an aggregate value at par of $88, was subject to failed auctions.

Our ARS portfolio consisted of the following, at fair value:
Description
Nature of collateral or guarantee
 
March 3,
2012

 
February 26,
2011

Student loan bonds
Student loans guaranteed 95% to 100% by the U.S. government
 
$
80

 
$
108

Municipal revenue bonds
100% insured by AAA/Aaa-rated bond insurers at March 3, 2012
 
2

 
2

Total fair value plus accrued interest(1)
 
 
$
82

 
$
110

(1)
The par value and weighted-average interest rates (taxable equivalent) of our ARS were $88 and $115 and 0.5% and 0.8%, respectively, at March 3, 2012, and February 26, 2011, respectively.

At March 3, 2012, our ARS portfolio was 88% AAA/Aaa-rated, 3% AA/Aa-rated and 9% 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 four to 30 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 $88 (par value) for impairment at March 3, 2012, based primarily on the methodology described in Note 6, Fair Value Measurements. As a result of this review, we determined that the fair value of our ARS portfolio at March 3, 2012, was $82. Accordingly, a $6 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 $(3) and $(3) unrealized loss, net of tax, recorded in accumulated other comprehensive income at March 3, 2012, and February 26, 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 Consolidated Balance Sheets, and are reported at fair value based on quoted market prices.

Our investments in marketable equity securities were as follows:
 
March 3,
2012

 
February 26,
2011

Common stock of TalkTalk Telecom Group PLC
$

 
$
62

Common stock of Carphone Warehouse Group plc

 
84

Other
3

 

Total
$
3

 
$
146



We purchased shares of The Carphone Warehouse Group PLC (“CPW”) common stock in fiscal 2008, representing nearly 3% of CPW’s then outstanding shares. In March 2010, CPW demerged into two new holding companies: TalkTalk Telecom Group PLC (“TalkTalk”), which is the holding company for the fixed line voice and broadband telecommunications business of the former CPW, and Carphone Warehouse Group plc, which includes the former CPW’s 50% ownership interest in Best Buy Europe. Accordingly, our investment in CPW was exchanged for equivalent levels of investment in TalkTalk and Carphone Warehouse. In the third quarter of fiscal 2012, we sold our shares of TalkTalk and Carphone Warehouse for $112 ($51 for TalkTalk and $61 for Carphone Warehouse) and recognized a $55 pre-tax gain on the sale.

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. Net unrealized gain, net of tax, included in accumulated other comprehensive income was $0 and $75 at March 3, 2012, and February 26, 2011, respectively.

Other Investments

The aggregate carrying values of investments accounted for using either the cost method or the equity method at March 3, 2012, and February 26, 2011, were $55 and $72, 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 that are Measured at Fair Value on a Recurring Basis

The fair value hierarchy requires the use of observable market data when available. In instances in which 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 March 3, 2012, and February 26, 2011, according to the valuation techniques we used to determine their fair values.
 
 
 
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 assets)
119

 
119

 

 

U.S. Treasury bills (restricted assets)
30

 
30

 

 

Foreign currency derivative instruments
1

 

 
1

 

Equity and other investments
 
 
 
 
 
 
 
Auction rate securities
82

 

 

 
82

Marketable equity securities
3

 
3

 

 

Other assets
 
 
 
 
 
 
 
Marketable securities that fund deferred compensation
83

 
83

 

 

Liabilities
 
 
 
 
 
 
 
Accrued liabilities
 
 
 
 
 
 
 
Foreign currency derivative instruments
2

 

 
2

 

Long-term liabilities
 
 
 
 
 
 
 
Deferred compensation
62

 
62

 

 


 
 
 
Fair Value Measurements Using Inputs Considered as
 
Fair Value at
February 26, 2011

 
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
$
70

 
$
70

 
$

 
$

Short-term investments
 
 
 
 
 
 
 
Money market fund
2

 

 
2

 

U.S. Treasury bills
20

 
20

 

 

Other current assets


 
 

 
 

 
 

Money market funds (restricted assets)
63

 
63

 

 

U.S. Treasury bills (restricted assets)
105

 
105

 

 

Foreign currency derivative instruments
2

 

 
2

 

Equity and other investments


 
 

 
 

 
 

Auction rate securities
110

 

 

 
110

Marketable equity securities
146

 
146

 

 

Other assets


 
 

 
 

 
 

Marketable securities that fund deferred compensation
83

 
83

 

 

Liabilities


 
 

 
 

 
 

Accrued liabilities
 
 
 
 
 
 
 
Foreign currency derivative instruments
1

 

 
1

 

Long-term liabilities


 
 

 
 

 
 

Deferred compensation
64

 
64

 

 

Foreign currency derivative instruments
2

 

 
2

 



The following table provides 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).
 
Debt securities — Auction rate securities only
 
Student
loan
bonds

 
Municipal
revenue
bonds

 
Total

Balances at February 27, 2010
$
261

 
$
19

 
$
280

Changes in unrealized losses in other comprehensive income
(1
)
 
1

 

Sales
(152
)
 
(18
)
 
(170
)
Balances at February 26, 2011
$
108

 
$
2

 
$
110

Changes in unrealized losses in other comprehensive income
(1
)
 

 
(1
)
Sales
(27
)
 

 
(27
)
Balances at March 3, 2012
$
80

 
$
2

 
$
82



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. Our money market fund investments not traded on a regular basis or in an active market, and for which we have been unable to obtain pricing information on an ongoing basis, were measured using inputs other than quoted market prices that are observable for the investments and, therefore, were classified as Level 2.

U.S. Treasury Bills. Our U.S. Treasury notes 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 an active market.

Auction Rate Securities. Our investments in ARS were classified as Level 3 as quoted prices were unavailable due to events described in Note 5, Investments. Due to limited market information, we utilized a 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.

Deferred Compensation. Our deferred compensation liabilities and 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 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.

With the exception of the goodwill impairment associated with our Best Buy Europe reporting unit described in Note 2, Profit Share Buy-Out, as well as the fixed asset and tradename impairments associated with our fiscal 2012 and fiscal 2011 restructuring activities described in Note 7, Restructuring Charges, we had no significant remeasurements of such assets or liabilities to fair value during fiscal 2012, 2011 and 2010. The following table summarizes the fair value remeasurments recorded for fiscal 2012 and 2011:
 
Fiscal 2012
 
Fiscal 2011
 
Impairments
 
Remaining Net
Carrying Value
 
Impairments
 
Remaining Net
Carrying Value
Continuing operations
 
 
 
 
 
 
 
Goodwill of Best Buy Europe reporting unit
$
1,207

 
$

 
$

 
$

Property and equipment
32

 

 
122

 
49

Total
$
1,239

 
$

 
$
122

 
$
49

Discontinued operations(1)
 
 
 
 
 
 
 
Property and equipment
$
111

 
$

 
$
25

 
$
2

Tradename
3

 

 
10

 
3

Total
$
114

 
$

 
$
35

 
$
5

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

All of the fair value remeasurments included in the table above were based on significant unobservable inputs (Level 3). Refer to Note 1, Summary of Significant Accounting Policies, as well as Note 2, Profit Share Buy-Out, for further information associated with the goodwill impairment. 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, as described in Note 1, Summary of Significant Accounting Policies. 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. 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.
Restructuring Charges
Restructuring Charges
Restructuring Charges

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 provided 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 discontinued operations in our Consolidated Statements of Earnings. Refer to Note 3, Discontinued Operations.

We incurred $243 of charges related to the fiscal 2012 restructuring during fiscal 2012. Of the total charges, $23 related to our Domestic segment and consisted primarily of IT asset impairments and other related costs. The remaining $220 of charges related to our International segment and consisted primarily property and equipment impairments, facility closure and other costs, employee termination benefits and inventory write-downs.

We do not expect to incur further material restructuring charges related to our fiscal 2012 restructuring activities in either our Domestic or International segments. We expect to substantially complete these restructuring activities in the first half of fiscal 2013.

All restructuring charges from continuing operations related to our fiscal 2012 restructuring activities are presented in Restructuring charges in our Consolidated Statements of Earnings, whereas all restructuring charges from discontinued operations related to our fiscal 2012 restructuring activities are presented in Loss from discontinued operations in our Consolidated Statements of Earnings. The composition of the restructuring charges we incurred in fiscal 2012 for our fiscal 2012 restructuring activities was as follows:
 
Domestic
 
International
 
Total
Continuing operations
 
 
 
 
 
Property and equipment impairments
$
17

 
$
15

 
$
32

Termination benefits
1

 

 
1

Facility closure and other costs
5

 

 
5

Total
23

 
15

 
38

Discontinued operations
 
 
 
 
 
Inventory write-downs

 
11

 
11

Property and equipment impairments

 
96

 
96

Termination benefits

 
16

 
16

Facility closure and other costs

 
82

 
82

Total

 
205

 
205

Total
$
23

 
$
220

 
$
243



The following table summarizes our restructuring accrual activity during fiscal 2012 related to termination benefits and facility closure and other costs associated with our fiscal 2012 restructuring activities:
 
Termination Benefits
 
Facility
Closure and
Other Costs
 
Total
Balance at February 26, 2011
$

 
$

 
$

Charges
17

 
87

 
104

Cash payments

 

 

Changes in foreign currency exchange rates

 
(2
)
 
(2
)
Balance at March 3, 2012
$
17


$
85

 
$
102



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 discontinued operations in our Consolidated Statements of Earnings. Refer to Note 3, Discontinued Operations.

We incurred $222 of charges related to the fiscal 2011 restructuring during the fourth quarter of fiscal 2011. Of the total charges, $50 related to our Domestic segment, primarily for employee termination benefits, property and equipment impairments, intangible asset impairments and inventory write-downs. The remaining $172 of the charges impacted our International segment and related primarily to property and equipment impairments (including the IT assets), inventory write-downs, facility closure and other costs and employee termination benefits.

In fiscal 2012, we incurred an additional $44 of charges related to the fiscal 2011 restructuring activities. Of the total charge, $45 related to our Domestic segment, consisting primarily of property and equipment impairments (notably IT assets), employee termination benefits, intangible asset impairments and other costs associated with the exit from certain digital delivery services within our entertainment product category. Within our Domestic segment, we also incurred additional inventory write-downs as we completed the exit from certain distribution facilities associated with our entertainment product category at the end of fiscal 2012. We do not expect to incur further material restructuring charges related to our fiscal 2011 restructuring activities in fiscal 2013. However, subsequent to the end of fiscal 2012, we sold the previously impaired distribution facility and equipment. Therefore, we will record a reduction in restructuring charges in the first quarter of fiscal 2013 for the amount of gain on sale, thus reducing the cumulative charges under the fiscal 2011 restructuring. The $(1) of net charges in our International segment in fiscal 2012 was the result of employee termination benefits, offset by adjustments to facility closure and other costs from the completion of our exit from the Turkey market and exiting of lease locations in China.

For continuing operations, the inventory write-downs related to our fiscal 2011 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 in our Consolidated Statements of Earnings. However, all restructuring charges from discontinued operations related to our fiscal 2011 restructuring activities are presented in Loss from discontinued operations in our Consolidated Statements of Earnings. The composition of the restructuring charges we incurred in fiscal 2012 and 2011, as well as the cumulative amount incurred through the end of fiscal 2012, for our fiscal 2011 restructuring activities, was as follows:
 
Domestic
 
International
 
Total
 
Fiscal 2012

 
Fiscal 2011

 
Cumulative Amount

 
Fiscal 2012

 
Fiscal 2011

 
Cumulative Amount

 
Fiscal 2012

 
Fiscal 2011

 
Cumulative Amount

Continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory write-downs
$
19

 
$
9

 
$
28

 
$

 
$

 
$

 
$
19

 
$
9

 
$
28

Property and equipment impairments

 
15

 
15

 

 
107

 
107

 

 
122

 
122

Termination benefits
(3
)
 
16

 
13

 

 

 

 
(3
)
 
16

 
13

Facility closure and other costs
4

 

 
4

 

 

 

 
4

 

 
4

Total
20

 
40

 
60

 

 
107

 
107

 
20

 
147

 
167

Discontinued operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory write-downs

 

 

 

 
15

 
15

 

 
15

 
15

Property and equipment impairments
15

 

 
15

 

 
25

 
25

 
15

 
25

 
40

Termination benefits
4

 

 
4

 
7

 
12

 
19

 
11

 
12

 
23

Intangible asset impairments
3

 
10

 
13

 

 

 

 
3

 
10

 
13

Facility closure and other costs
3

 

 
3

 
(8
)
 
13

 
5

 
(5
)
 
13

 
8

Total
25

 
10

 
35

 
(1
)
 
65

 
64

 
24

 
75

 
99

Total
$
45

 
$
50

 
$
95

 
$
(1
)
 
$
172

 
$
171

 
$
44

 
$
222

 
$
266



The following table summarizes our restructuring accrual activity during fiscal 2012 and 2011 related to termination benefits associated with our fiscal 2011 restructuring activities:
 
Termination Benefits
 
Facility
Closure and
Other Costs(1)
 
Total
Balance at February 27, 2010
$

 
$

 
$

Charges
28

 
13

 
41

Cash payments

 

 

Balance at February 26, 2011
28

 
13

 
41

Charges
11

 
6

 
17

Cash payments
(33
)
 
(14
)
 
(47
)
Adjustments
(3
)
 
4

 
1

Balance at March 3, 2012
$
3

 
$
9

 
$
12

(1)
Included within the facility closure and other costs adjustments is $10 from the first quarter of fiscal 2012, representing an adjustment to exclude non-cash charges or benefits, which had no impact on our Consolidated Statements of Earnings in fiscal 2012.

Fiscal 2010 Restructuring

In April 2009, we updated our Domestic store operating model, which included eliminating certain positions. In addition, in the first quarter of fiscal 2010, we incurred restructuring charges related to employee termination benefits and business reorganization costs at Best Buy Europe within our International segment. As a result of our restructuring efforts, we recorded charges of $52 in the first quarter of fiscal 2010.

All charges related to our fiscal 2010 restructuring activities are related to continuing operations and are presented in Restructuring charges in our Consolidated Statements of Earnings. The composition of the restructuring charges we incurred in fiscal 2010 for our fiscal 2010 restructuring activities was as follows:
 
Domestic

 
International

 
Total

Termination benefits
$
25

 
$
26

 
$
51

Facility closure costs

 
1

 
1

Total
$
25

 
$
27

 
$
52


The following table summarizes our restructuring accrual activity during fiscal 2011 related to termination benefits and facility closure costs associated with our fiscal 2010 restructuring activities:
 
Termination
Benefits

 
Facility
Closure Costs

 
Total

Balance at February 27, 2010
$
8

 
$
1

 
$
9

Charges

 

 

Cash payments
(8
)
 
(1
)
 
(9
)
Balance at February 26, 2011
$

 
$

 
$

Debt
Debt
Debt

Short-Term Debt

Short-term debt consisted of the following:
 
March 3, 2012
 
February 26, 2011
 
Principal
Balance

 
Interest
Rate

 
Principal
Balance

 
Interest
Rate

U.S. revolving credit facility – 364-day
$

 
%
 
$

 
%
U.S. revolving credit facility – five-year

 
%
 

 
%
Europe revolving credit facility
480

 
2.4
%
 

 
%
Europe receivables financing facility

 
%
 
455

 
3.7
%
Old Europe revolving credit facility

 
%
 
98

 
3.6
%
Canada revolving demand facility

 
%
 

 
%
China revolving demand facilities

 
%
 
4

 
4.8
%
Total short-term debt
$
480

 
 

 
$
557

 
 

 
Fiscal Year
2012

 
2011

Maximum month-end outstanding during the year
$
480

 
$
690

Average amount outstanding during the year
$
337

 
$
383

Weighted-average interest rate at year-end
2.4
%
 
3.7
%


U.S. Revolving Credit Facilities

In October 2011, Best Buy Co., Inc. entered into a $1,000 364-day senior unsecured revolving credit facility agreement (the “364-Day Facility Agreement”) and a $1,500 five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement” and, collectively the “Agreements”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, and a syndicate of banks. The Agreements replaced the $2,300 senior unsecured revolving credit facility, as amended (the “Credit Facility”), with a syndicate of banks, including JPMorgan acting as administrative agent. The Credit Facility was originally scheduled to expire in September 2012. At March 3, 2012, there were no borrowings outstanding and $2,453 was available under the Agreements.

The Agreements permit borrowings of up to $2,500 (which may be increased to up to $3,000 at our option under certain circumstances) and a $300 letter of credit sublimit. The 364-Day Facility Agreement and Five-Year Facility Agreement terminate in October 2012 (subject to a one-year term-out option) and October 2016, respectively.

Interest rates under the Agreements are variable and are determined at our option as: (i) the sum of (a) the greatest of JPMorgan's prime rate, the federal funds rate plus 0.5%, or the one-month London Interbank Offered Rate (“LIBOR”) plus 1.0% and (b) a margin (the “ABR Margin”) or (ii) the LIBOR plus a margin (the “LIBOR Margin”). In addition, a facility fee is assessed on the commitment amount. The ABR Margin, LIBOR Margin and the facility fee are based upon our current senior unsecured debt rating. Under the 364-Day Facility Agreement, the ABR Margin ranges from 0.0% to 0.525%, the LIBOR Margin ranges from 0.925% to 1.525%, and the facility fee ranges from 0.075% to 0.225%. Under the Five-Year Facility Agreement, the ABR Margin ranges from 0.0% to 0.475%, the LIBOR Margin ranges from 0.875% to 1.475%, and the facility fee ranges from 0.125% to 0.275%.

The Agreements are guaranteed by specified subsidiaries of Best Buy Co., Inc. and contain customary affirmative and negative covenants. Among other things, these covenants restrict Best Buy Co., Inc. and its subsidiaries' ability to incur certain types or amounts of indebtedness, incur liens on certain assets, make material changes in corporate structure or the nature of its business, dispose of material assets, engage in a change in control transaction, make certain foreign investments, enter into certain restrictive agreements, or engage in certain transactions with affiliates. The Agreements also contain covenants that require the maintenance of a maximum quarterly cash flow leverage ratio and a minimum quarterly interest coverage ratio. The Agreements contain customary default provisions including, but not limited to, failure to pay interest or principal when due and failure to comply with covenants. We were in compliance with all such covenants at March 3, 2012.

Europe Revolving Credit Facility

In July 2011, Best Buy Europe entered into a new £400 ($618 based on the exchange rate in effect as of the end of fiscal 2012) unsecured revolving credit facility agreement (the “RCF”) with ING Bank N.V., London Branch, as agent, and a syndicate of banks to finance its working capital needs. The RCF expires in July 2015. Best Buy Europe had £310 ($480) of borrowings under the RCF at March 3, 2012.

Interest rates under the RCF are variable, based on LIBOR plus an applicable margin based on Best Buy Europe’s fixed charges coverage ratio. The RCF includes a commitment fee of 40% of the applicable margin on unused available capacity, as well as a utilization fee ranging from 0.0% to 0.5% of the aggregate amount outstanding based on the percentage of the aggregate amount outstanding to the total RCF. The RCF also required an initial arrangement fee of 0.75%.

The RCF is guaranteed by certain subsidiaries of Best Buy Europe and does not provide for any recourse to Best Buy Co., Inc. The RCF contains customary affirmative and negative covenants. Among other things, these covenants restrict or prohibit Best Buy Europe’s ability to incur certain types or amounts of indebtedness, make material changes in the nature of its business, dispose of material assets, make guarantees, or engage in a change in control transaction. The RCF also contains covenants that require Best Buy Europe to comply with a maximum annual leverage ratio and a maximum fixed charges coverage ratio.

The RCF replaced the previous £350 Europe receivables financing facility (the “ERF”) between a subsidiary of Best Buy Europe and a syndicate of banks, including Barclays Bank PLC acting as administrative agent. The ERF was originally scheduled to expire in July 2012. The RCF also replaced Best Buy Europe’s previous £125 revolving credit facility (the “Old RCF”) with one of Best Buy Co., Inc.’s subsidiaries and Carphone Warehouse as lenders. The Old RCF was originally scheduled to expire in March 2013.

Canada Revolving Demand Facility

We have a $51 revolving demand facility available to our Canada operations including an additional seasonal facility of $50 Canadian dollars that is available from September through December of each year. There were no borrowings outstanding under the facility at March 3, 2012. There is no set expiration date for the facility. All borrowings under the facility are made available at the sole discretion of the lender and are payable on demand. Borrowings under the facility bear interest at rates specified in the credit agreement for the facility. Borrowings are secured by a guarantee of Best Buy Co., Inc.

China Revolving Demand Facilities

We have $126 in revolving demand facilities available to our China operations, of which no borrowings were outstanding at March 3, 2012. The facilities are renewed annually with the respective banks. All borrowings under these facilities bear interest at rates specified in the related credit agreements, are made available at the sole discretion of the respective lenders and are payable on demand. Certain of these facilities are secured by a guarantee of Best Buy Co., Inc.

Long-Term Debt

Long-term debt consisted of the following:
 
March 3,
2012

 
February 26,
2011

2013 Notes
$
500

 
$
500

2016 Notes
349

 

2021 Notes
648

 

Convertible debentures

 
402

Financing lease obligations, due 2013 to 2026, interest rates ranging from 3.0% to 8.1%
149

 
170

Capital lease obligations, due 2013 to 2035, interest rates ranging from 2.1% to 8.3%
81

 
79

Other debt, due 2018 to 2022, interest rates ranging from 2.6% to 6.7%
1

 
1

Total long-term debt
$
1,728

 
$
1,152

Less: current portion(1)
(43
)
 
(441
)
Total long-term debt, less current portion
$
1,685

 
$
711

(1)
Since holders of our convertible debentures could have required us to purchase all or a portion of the debentures on January 15, 2012, we classified the $402 for such debentures in the current portion of long-term debt at February 26, 2011.

2013 Notes

In June 2008, we sold $500 principal amount of notes due July 15, 2013 (the "2013 Notes"). The 2013 Notes bear interest at a fixed rate of 6.75% per year, payable semi-annually on January 15 and July 15 of each year, beginning January 15, 2009. The interest payable on the 2013 Notes is subject to adjustment if either Moody's Investors Service, Inc. or Standard & Poor's Ratings Services downgrades the rating assigned to the 2013 Notes to below investment grade. Net proceeds from the sale of the 2013 Notes were $496, after an initial issuance discount of $1 and other transaction costs.

We may redeem some or all of the 2013 Notes at any time, at a price equal to 100% of the principal amount of the 2013 Notes redeemed plus accrued and unpaid interest to the redemption date and an applicable make-whole amount as described in the indenture relating to the 2013 Notes. Furthermore, if a change of control triggering event occurs, we will be required to offer to purchase the remaining unredeemed Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the purchase date.

The 2013 Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and unsubordinated debt. The 2013 Notes contain covenants that, among other things, limit our ability and the ability of our North American subsidiaries to incur debt secured by liens, enter into sale and lease-back transactions and, in the case of such subsidiaries, incur unsecured debt.

2016 and 2021 Notes

In March 2011, we issued $350 principal amount of notes due March 15, 2016 (the “2016 Notes”) and $650 principal amount of notes due March 15, 2021 (the “2021 Notes” and, together with the 2016 Notes, the “Notes”). The 2016 Notes bear interest at a fixed rate of 3.75% per year, while the 2021 Notes bear interest at a fixed rate of 5.50% per year. Interest on the Notes is payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2011. The Notes were issued at a slight discount to par, which when coupled with underwriting discounts of $6, resulted in net proceeds from the sale of the Notes of $990.

We may redeem some or all of the Notes at any time at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes redeemed and (ii) the sum of the present values of each remaining scheduled payment of principal and interest on the Notes redeemed discounted to the redemption date on a semiannual basis, plus accrued and unpaid interest on the principal amount of the Notes to the redemption date as described in the indenture (including the supplemental indenture) relating to the Notes. Furthermore, if a change of control triggering event occurs, we will be required to offer to purchase the remaining unredeemed Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the purchase date.
The Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and unsubordinated debt. The Notes contain covenants that, among other things, limit our ability to incur debt secured by liens or to enter into sale and lease-back transactions.

Convertible Debentures

In January 2002, we sold 2.25% convertible subordinated debentures due January 15, 2022, having an aggregate principal amount of $402. During fiscal 2012, we repurchased and redeemed all of the remaining outstanding convertible debentures subject to the terms and conditions of the indenture governing the convertible debentures.

Other

The fair value of long-term debt approximated $1,756 and $1,210 at March 3, 2012, and February 26, 2011, respectively, based primarily on the ask prices quoted from external sources, compared to carrying values of $1,728 and $1,152, respectively.

At March 3, 2012, the future maturities of long-term debt, including capitalized leases, consisted of the following:
Fiscal Year
 
2013
$
40

2014
542

2015
40

2016
32

2017
369

Thereafter
705

Total long-term debt
$
1,728

Derivative Instruments
Derivative Instruments
Derivative Instruments

We manage our economic and transaction exposure to certain market-based risks through the use of foreign currency derivative instruments. Our objective in holding derivatives is to reduce the volatility of net earnings and cash flows associated with changes in foreign currency exchange rates. We do not hold or issue derivative financial instruments for trading or speculative purposes.

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

Cash Flow Hedges

We enter into foreign exchange forward contracts to hedge against the effect of exchange rate fluctuations on certain revenue streams denominated in non-functional currencies. The contracts have terms of up to two years. We report the effective portion of the gain or loss on a cash flow hedge as a component of other comprehensive income, and it is subsequently reclassified into net earnings in the period in which the hedged transaction affects net earnings or the forecasted transaction is no longer probable of occurring. We discontinued certain cash flow hedges and reclassified $5 into net earnings during the fourth quarter of fiscal 2011, as the forecasted transactions were no longer probable of occurring. We report the ineffective portion, if any, of the gain or loss in net earnings.

Derivatives Not Designated as Hedging Instruments

Derivatives not designated as hedging instruments include foreign exchange forward contracts used 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 forecasted inventory purchases denominated in non-functional currencies. The contracts generally have terms of up to six months. These derivative instruments are not designated in hedging relationships and, therefore, we record gains and losses on these contracts directly in net earnings.
Summary of Derivative Balances

The following table presents the gross fair values for derivative instruments and the corresponding classification at March 3, 2012 and February 26, 2011:
 
March 3, 2012
 
February 26, 2011
Contract Type
Assets

 
Liabilities

 
Assets

 
Liabilities

Cash flow hedges (foreign exchange forward contracts)
$

 
$

 
$
1

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

 
(2
)
 
2

 
(2
)
Total
$
1

 
$
(2
)
 
$
3

 
$
(4
)


The following tables present the effects of derivative instruments on other comprehensive income ("OCI") and on our Consolidated Statements of Earnings for fiscal 2012 and 2011:
 
2012
 
2011
Contract Type
Pre-tax Gain
Recognized
in OCI(1)

 
Gain Reclassified from Accumulated OCI to Earnings (Effective Portion)(2)

 
Pre-tax Gain
Recognized
in OCI(1)

 
Gain Reclassified from Accumulated OCI to Earnings (Effective Portion)(2)

Cash flow hedges (foreign exchange forward contracts)
$
7

 
$
5

 
$
9

 
$
12

Net investment hedges (foreign exchange swap contracts)

 

 
8

 

Total
$
7

 
$
5

 
$
17

 
$
12

(1)
Reflects the amount recognized in OCI prior to the reclassification of 50% to noncontrolling interests for the cash flow and net investment hedges, respectively.
(2)
Gain reclassified from accumulated OCI is included within Selling, general and administrative expenses in our Consolidated Statements of Earnings.

The following table presents the effects of derivatives not designated as hedging instruments on our Consolidated Statements of Earnings for fiscal 2012 and 2011:
 
Gain Recognized
within SG&A
Contract Type
2012

 
2011

No hedge designation (foreign exchange forward contracts)
$
5

 
$
13



The following table presents the notional amounts of our foreign currency exchange contracts at March 3, 2012 and February 26, 2011:
 
Notional Amount
Contract Type
March 3,
2012

 
February 26,
2011

Derivatives designated as cash flow hedging instruments
$

 
$
264

Derivatives not designated as hedging instruments
238

 
493

Total
$
238

 
$
757

Shareholders' Equity
Shareholders Equity Including Stock Compensation Plans, Earnings Per Share, Repurchase of Common Stock, Comprehensive Income
Shareholders' Equity

Stock Compensation Plans

Our 2004 Omnibus Stock and Incentive Plan, as amended (the "Omnibus Plan"), authorizes us to grant or issue non-qualified stock options, incentive stock options, share awards and other equity awards up to a total of 64.5 million shares. We have not granted incentive stock options under the Omnibus Plan. Under the terms of the Omnibus Plan, awards may be granted to our employees, officers, advisors, consultants and directors. Awards issued under the Omnibus Plan vest as determined by the Compensation and Human Resources Committee of our Board of Directors at the time of grant. At March 3, 2012, a total of 22.7 million shares were available for future grants under the Omnibus Plan.
Upon adoption and approval of the Omnibus Plan, all of our previous equity incentive compensation plans were terminated. However, existing awards under those plans continued to vest in accordance with the original vesting schedule and will expire at the end of their original term.

Our outstanding stock options have a 10-year term. Outstanding stock options issued to employees generally vest over a four-year period, and outstanding stock options issued to directors vest immediately upon grant. Share awards vest based either upon attainment of specified goals or upon continued employment. Outstanding share awards that are not time-based typically vest at the end of a three-year incentive period based either upon our total shareholder return ("TSR") compared to the TSR of companies that comprise Standard & Poor's 500 Index or growth in our common stock price ("market-based"), or upon the achievement of company or personal performance goals ("performance-based"). We have time-based share awards that vest in their entirety at the end of three- and four-year periods and time-based share awards where 25% of the award vests on the date of grant and 25% vests on each of the three anniversary dates thereafter.

Our 2003 Employee Stock Purchase Plan permitted and our 2008 Employee Stock Purchase Plan permits our employees to purchase our common stock at a 15% discount from the market price of the stock at the beginning or at the end of a semi-annual purchase period, whichever is less.

Stock-based compensation expense was as follows in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Stock options
$
76

 
$
90

 
$
85

Share awards
 
 
 
 
 
Market-based

 
4

 
8

Performance-based

 
(1
)
 
1

Time-based
33

 
16

 
10

Employee stock purchase plans
11

 
12

 
14

Total
$
120

 
$
121

 
$
118



Stock Options

Stock option activity was as follows in fiscal 2012:
 
Stock
Options

 
Weighted-
Average
Exercise Price
per Share

 
Weighted-Average
Remaining
Contractual
Term (in years)

 
Aggregate
Intrinsic Value

Outstanding at February 26, 2011
35,587,000

 
$
38.97

 
 

 
 

Granted
3,973,000

 
27.50

 
 

 
 

Exercised
(1,126,000
)
 
24.61

 
 

 
 

Forfeited/Canceled
(2,633,000
)
 
39.87

 
 

 
 

Outstanding at March 3, 2012
35,801,000

 
$
38.08

 
5.9

 
$
4

Vested or expected to vest at March 3, 2012
34,099,000

 
$
38.36

 
5.8

 
$
4

Exercisable at March 3, 2012
24,403,000

 
$
40.21

 
4.8

 
$
4



The weighted-average grant-date fair value of stock options granted during fiscal 2012, 2011 and 2010 was $7.94, $11.97 and $12.69, respectively, per share. The aggregate intrinsic value of our stock options (the amount by which the market price of the stock on the date of exercise exceeded the exercise price of the option) exercised during fiscal 2012, 2011 and 2010, was $6, $52 and $28, respectively. At March 3, 2012, there was $83 of unrecognized compensation expense related to stock options that is expected to be recognized over a weighted-average period of 1.3 years.

Net cash proceeds from the exercise of stock options were $27, $134 and $96 in fiscal 2012, 2011 and 2010, respectively.

The actual income tax benefit realized from stock option exercises was $2, $19 and $10, in fiscal 2012, 2011 and 2010, respectively.

In fiscal 2012, 2011 and 2010, we estimated the fair value of each stock option on the date of grant using a lattice model with the following assumptions:
Valuation Assumptions(1)
2012

 
2011

 
2010

Risk-free interest rate(2)
0.1% – 3.6%

 
0.2% – 3.9%

 
0.2% – 3.8%

Expected dividend yield
2.3
%
 
1.5
%
 
1.6
%
Expected stock price volatility(3)
37
%
 
36
%
 
42
%
Expected life of stock options (in years)(4)
6.2

 
6.1

 
6.1

(1)
Forfeitures are estimated using historical experience and projected employee turnover.
(2)
Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of our stock options.
(3)
We use an outside valuation advisor to assist us in projecting expected stock price volatility. We consider both the historical volatility of our stock price as well as implied volatilities from exchange-traded options on our stock.
(4)
We estimate the expected life of stock options based upon historical experience.

Market-Based Share Awards

The fair value of market-based share awards is determined based on generally accepted valuation techniques and the closing market price of our stock on the date of grant. A summary of the status of our nonvested market-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows:
Market-Based Share Awards
Shares

 
Weighted-Average Fair Value per Share

Outstanding at February 26, 2011
193,000

 
$
52.19

Granted

 

Vested

 

Forfeited/Canceled
(193,000
)
 
52.19

Outstanding at March 3, 2012

 
$



We recognize expense for market-based share awards on a straight-line basis over the requisite service period (or to an employee's eligible retirement date, if earlier). At March 3, 2012, compensation expense had been fully recognized.

Performance-Based Share Awards

The fair value of performance-based share awards is determined based on the closing market price of our stock on the date of grant. A summary of the status of our nonvested performance-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows:
Performance-Based Share Awards
Shares

 
Weighted-Average Fair Value per Share

Outstanding at February 26, 2011
2,179,000

 
$
41.64

Granted

 

Vested
(2,000
)
 
44.94

Forfeited/Canceled
(1,265,000
)
 
41.96

Outstanding at March 3, 2012
912,000

 
$
41.20



At March 3, 2012, there was no compensation expense related to nonvested performance-based share awards that we expect to recognize.

Time-Based Share Awards

The fair value of time-based share awards is determined based on the closing market price of our stock on the date of grant. A summary of the status of our nonvested time-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows:
Time-Based Share Awards
Shares

 
Weighted-Average Fair Value per Share

Outstanding at February 26, 2011
2,171,000

 
$
36.60

Granted
2,647,000

 
25.65

Vested
(665,000
)
 
35.01

Forfeited/Canceled
(229,000
)
 
33.55

Outstanding at March 3, 2012
3,924,000

 
$
29.63



At March 3, 2012, there was $80 of unrecognized compensation expense related to nonvested time-based share awards that we expect to recognize over a weighted-average period of 2.6 years.

Employee Stock Purchase Plans

In fiscal 2012, 2011 and 2010, we estimated the fair value of stock-based compensation expense associated with our employee stock purchase plans on the purchase date using the Black-Scholes option-pricing valuation model, with the following assumptions:
Valuation Assumptions
2012

 
2011

 
2010

Risk-free interest rate(1)
0.1
%
 
0.2
%
 
0.3
%
Expected dividend yield
2.4
%
 
1.4
%
 
1.5
%
Expected stock price volatility(2)
38
%
 
29
%
 
53
%
Expected life of employee stock purchase plan options (in months)(3)
6

 
6

 
6

(1)
Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of employee stock purchase plan shares.
(2)
We consider both the historical volatility of our stock price as well as implied volatilities from exchange-traded options on our stock.
(3)
Based on semi-annual purchase period.

In fiscal 2012, 2011 and 2010, 1.4 million, 1.3 million and 1.2 million shares, respectively, were purchased through our employee stock purchase plans. The weighted-average fair values of shares purchased pursuant to the plans during fiscal 2012, 2011 and 2010, were $6.76, $9.54 and $11.34, respectively. At March 3, 2012, and February 26, 2011, plan participants had accumulated $11 and $19, respectively, to purchase our common stock pursuant to these plans.

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 the potentially dilutive common shares been issued. Potentially dilutive securities include stock options, nonvested share awards and shares issuable under our employee stock purchase plan, as well as common shares that would have resulted from the assumed conversion of our convertible debentures. During the fourth quarter of fiscal 2012, we repurchased and redeemed all of the remaining outstanding convertible debentures (see Note 8, Debt). Since the potentially dilutive shares related to the convertible debentures are included in the computation, the related interest expense, net of tax, is added back to net earnings, as the interest would not have been paid if the convertible debentures had been converted to common stock. Nonvested market-based share awards and nonvested performance-based share awards are included in the average diluted shares outstanding each period if established market or performance criteria have been met at the end of the respective periods.

At March 3, 2012, options to purchase 35.8 million shares of common stock were outstanding as follows (shares in millions):
 
Exercisable
 
Unexercisable
 
Total
 
Shares

 
%

 
Weighted-
Average Price
per Share

 
Shares

 
%

 
Weighted-
Average Price
per Share

 
Shares

 
%

 
Weighted-
Average Price
per Share

In-the-money
3.6

 
15
%
 
$
25.28

 
2.8

 
25
%
 
$
25.07

 
6.4

 
18
%
 
$
25.19

Out-of-the-money
20.8

 
85
%
 
42.81

 
8.6

 
75
%
 
36.30

 
29.4

 
82
%
 
40.91

Total
24.4

 
100
%
 
$
40.21

 
11.4

 
100
%
 
$
27.30

 
35.8

 
100
%
 
$
38.08



The computation of dilutive shares outstanding excludes the out-of-the-money stock options because such outstanding options' exercise prices were greater than the average market price of our common shares and, therefore, the effect would be antidilutive (i.e., including such options would result in higher earnings per share).

The following table presents a reconciliation of the numerators and denominators of basic and diluted earnings per share in fiscal 2012, 2011 and 2010:
 
2012(1)

 
2011

 
2010

Numerator:
 
 
 
 
 
Net earnings from continuing operations
$
330

 
$
1,554

 
$
1,495

Net (earnings) from continuing operations attributable to noncontrolling interests
(1,387
)
 
(127
)
 
(96
)
Net (loss) earnings from continuing operations attributable to Best Buy Co., Inc., basic
(1,057
)
 
1,427

 
1,399

Adjustment for assumed dilution:
 
 
 
 
 
Interest on convertible debentures due in 2022, net of tax

 
6

 
6

Net (loss) earnings from continuing operations attributable to Best Buy Co., Inc., diluted
$
(1,057
)
 
$
1,433

 
$
1,405

Denominator (in millions):
 
 
 
 
 
Weighted-average common shares outstanding
366.3

 
406.1

 
416.8

Effect of potentially dilutive securities:
 
 
 
 
 
Shares from assumed conversion of convertible debentures

 
8.8

 
8.8

Stock options and other

 
1.6

 
1.9

Weighted-average common shares outstanding, assuming dilution
366.3

 
416.5

 
427.5

Net (loss) earnings per share from continuing operations attributable to Best Buy Co., Inc.
 
 
 
 
 
Basic
$
(2.89
)
 
$
3.51

 
$
3.36

Diluted
$
(2.89
)
 
$
3.44

 
$
3.29

(1)
The calculation of diluted (loss) per share for fiscal 2012 does not include potentially dilutive securities because their inclusion would be anti-dilutive (i.e., reduce the net loss per share).

Repurchase of Common Stock

In June 2011, our Board of Directors authorized a new $5,000 share repurchase program. The June 2011 program terminated and replaced our prior $5,500 share repurchase program authorized in June 2007. There is no expiration date governing the period over which we can repurchase shares under the June 2011 share repurchase program.

The following table presents the amount and cost of shares we repurchased and retired in fiscal 2012, 2011 and 2010 under the June 2011 program and the June 2007 program (shares in millions):
 
2012

 
2011

 
2010

June 2011 Program
 
 
 
 
 
Total number of shares repurchased
34.5

 

 

Total cost of shares repurchased
$
889

 
$

 
$

 
 
 
 
 
 
June 2007 Program
 
 
 
 
 
Total number of shares repurchased
20.1

 
32.6

 

Total cost of shares repurchased
$
611

 
$
1,193

 
$



At March 3, 2012, $4,111 remained available for additional purchases under the June 2011 share repurchase program. Repurchased shares have been retired and constitute authorized but unissued shares.

Comprehensive (Loss) Income

Comprehensive (loss) income is computed as net (loss) earnings plus certain other items that are recorded directly to shareholders' equity. In addition to net (loss) earnings, the significant components of comprehensive (loss) income include foreign currency translation adjustments and unrealized gains and losses, net of tax, on available-for-sale marketable equity securities and on derivative instruments. Foreign currency translation adjustments do not include a provision for income tax expense when earnings from foreign operations are considered to be indefinitely reinvested outside the U.S.

Comprehensive (loss) income attributable to Best Buy Co., Inc. was $(1,314), $1,410 and $1,674 in fiscal 2012, 2011 and 2010, respectively.

The components of accumulated other comprehensive income, net of tax, were as follows:
 
March 3,
2012

 
February 26,
2011

Foreign currency translation
$
93

 
$
102

Unrealized (losses) gains on available-for-sale investments
(3
)
 
72

Unrealized losses on derivative instruments (cash flow hedges)

 
(1
)
Total
$
90

 
$
173

Leases
Leases
Leases

The composition of net rent expense for all operating leases, including leases of property and equipment, was as follows in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Minimum rentals
$
1,192

 
$
1,141

 
$
1,111

Contingent rentals
2

 
2

 
2

Total rent expense
1,194

 
1,143

 
1,113

Less: sublease income
(19
)
 
(19
)
 
(20
)
Net rent expense
$
1,175

 
$
1,124

 
$
1,093



The future minimum lease payments under our capital, financing and operating leases by fiscal year (not including contingent rentals) at March 3, 2012, were as follows:
Fiscal Year
Capital
Leases

 
Financing
Leases

 
Operating
Leases

2013
$
21

 
$
32

 
$
1,216

2014
21

 
31

 
1,154

2015
18

 
29

 
1,063

2016
10

 
25

 
940

2017
3

 
20

 
792

Thereafter
23

 
43

 
2,352

Subtotal
96

 
180

 
$
7,517

Less: imputed interest
(15
)
 
(31
)
 
 

Present value
$
81

 
$
149

 
 



Total minimum lease payments have not been reduced by minimum sublease rent income of approximately $121 due under future noncancelable subleases.

During fiscal 2012 and 2011, we entered into agreements totaling $18 and $52, respectively, related to various IT equipment leases.
Benefit Plans
Benefit Plans
Benefit Plans

We sponsor retirement savings plans for employees meeting certain eligibility requirements. Participants may choose from various investment options including a fund comprised of our company stock. Participants can contribute up to 50% of their eligible compensation annually as defined by the plan document, subject to Internal Revenue Service ("IRS") limitations. We match 100% of the first 3% of participating employees' contributions and 50% of the next 2%. Employer contributions vest immediately. The total employer contributions were $69, $69 and $62 in fiscal 2012, 2011 and 2010, respectively.

We have a non-qualified, unfunded deferred compensation plan for highly compensated employees and members of our Board of Directors. Amounts contributed and deferred under our deferred compensation plan are credited or charged with the performance of investment options offered under the plan and elected by the participants. In the event of bankruptcy, the assets of the plan are available to satisfy the claims of general creditors. The liability for compensation deferred under the plan was $62 and $64 at March 3, 2012, and February 26, 2011, respectively, and is included in long-term liabilities. We manage the risk of changes in the fair value of the liability for deferred compensation by electing to match our liability under the plan with investment vehicles that offset a substantial portion of our exposure. The cash value of the investment vehicles, which includes funding for future deferrals, was $83 and $83 at March 3, 2012, and February 26, 2011, respectively, and is included in other assets. Both the asset and the liability are carried at fair value.
Income Taxes
Income Taxes
Income Taxes

The following is a reconciliation of the federal statutory income tax rate to income tax expense in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Federal income tax at the statutory rate
$
365

 
$
816

 
$
815

State income taxes, net of federal benefit
45

 
46

 
68

Benefit from foreign operations
(96
)
 
(86
)
 
(54
)
Non-taxable interest income

 

 
(1
)
Other

 
3

 
7

Goodwill impairment
395

 

 

Income tax expense
$
709

 
$
779

 
$
835

Effective income tax rate
68.0
%
 
33.4
%
 
35.9
%

Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates by jurisdiction was as follows in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

United States
$
1,537

 
$
1,739

 
$
1,944

Outside the United States
(494
)
 
592

 
385

Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates
$
1,043

 
$
2,331

 
$
2,329



Income tax expense was comprised of the following in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Current:
 
 
 
 
 
Federal
$
447

 
$
735

 
$
686

State
61

 
73

 
116

Foreign
173

 
105

 
63

 
681

 
913

 
865

Deferred:
 
 
 
 
 
Federal
94

 
(113
)
 
(13
)
State
1

 
(2
)
 
(11
)
Foreign
(67
)
 
(19
)
 
(6
)
 
28

 
(134
)
 
(30
)
Income tax expense
$
709

 
$
779

 
$
835



Deferred taxes are the result of differences between the bases of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities were comprised of the following:
 
March 3,
2012

 
February 26,
2011

Accrued property expenses
$
146

 
$
154

Other accrued expenses
108

 
122

Deferred revenue
128

 
141

Compensation and benefits
103

 
86

Stock-based compensation
157

 
137

Loss and credit carryforwards
310

 
303

Other
121

 
125

Total deferred tax assets
1,073

 
1,068

Valuation allowance
(204
)
 
(212
)
Total deferred tax assets after valuation allowance
869

 
856

Property and equipment
(376
)
 
(316
)
Convertible debt

 
(79
)
Goodwill and intangibles
(118
)
 
(123
)
Inventory
(85
)
 
(25
)
Other
(27
)
 
(22
)
Total deferred tax liabilities
(606
)
 
(565
)
Net deferred tax assets
$
263

 
$
291



Deferred tax assets and liabilities included in our Consolidated Balance Sheets were as follows:
 
March 3,
2012

 
February 26,
2011

Other current assets
$
226

 
$
261

Other assets
53

 
98

Other long-term liabilities
(16
)
 
(68
)
Net deferred tax assets
$
263

 
$
291



At March 3, 2012, we had total net operating loss carryforwards from international operations of $223, of which $99 will expire in various years through 2027 and the remaining amounts have no expiration. Additionally, we had acquired U.S. federal net operating loss carryforwards of $29 which expire between 2021 and 2030, and U.S. federal foreign tax credits of $58 which expire between 2015 and 2022.

At March 3, 2012, a valuation allowance of $204 had been established against certain international net operating loss carryforwards and other international deferred tax assets. The $8 decrease from February 26, 2011, is primarily due to valuation allowances on disposed operations, partially offset by valuation allowances arising in fiscal 2012.

We have not provided deferred taxes on unremitted earnings attributable to foreign operations that have been considered to be reinvested indefinitely. These earnings relate to ongoing operations and were $2,232 at March 3, 2012. It is not practicable to determine the income tax liability that would be payable if such earnings were not indefinitely reinvested.

The following table provides a reconciliation of changes in unrecognized tax benefits for fiscal 2012 and 2011:
Balance at February 27, 2010
$
393

Gross increases related to prior period tax positions
36

Gross decreases related to prior period tax positions
(90
)
Gross increases related to current period tax positions
40

Settlements with taxing authorities

Lapse of statute of limitations
(20
)
Balance at February 26, 2011
$
359

Gross increases related to prior period tax positions
69

Gross decreases related to prior period tax positions
(35
)
Gross increases related to current period tax positions
43

Settlements with taxing authorities
(20
)
Lapse of statute of limitations
(29
)
Balance at March 3, 2012
$
387



Unrecognized tax benefits of $239 and $233 at March 3, 2012, and February 26, 2011, respectively, would favorably impact our effective income tax rate if recognized.

We recognize interest and penalties (not included in the "unrecognized tax benefits" above), as well as interest received from favorable tax settlements, as components of income tax expense. No interest expense was recognized in fiscal 2012. At March 3, 2012, and February 26, 2011, we had accrued interest of $79 and $84, respectively. No penalties were recognized in fiscal 2012 or accrued for at March 3, 2012, and February 26, 2011, respectively.

We file a consolidated U.S. federal income tax return, as well as income tax returns in various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before fiscal 2004.

Because existing tax positions will continue to generate increased liabilities for us for unrecognized tax benefits over the next 12 months, and since we are routinely under audit by various taxing authorities, it is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months. An estimate of the amount or range of such change cannot be made at this time. However, we do not expect the change, if any, to have a material effect on our consolidated financial condition, results of operations or cash flows within the next 12 months.
Segments and Geographic Information
Segment and Geographic Information
Segment and Geographic Information

Segment Information

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 United States and its territories) and International (which is comprised of all operations outside the United States 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. Segment managers for the Domestic segment and the International segment have full responsibility for setting strategy, making operating decisions, allocating resources and assessing performance within their respective segments. Our CODM does not make operating or other decisions below the segment levels. Our CODM relies on internal management reporting that analyzes enterprise and segment results to the operating income level.

We do not aggregate our operating segments, so our 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.

The following tables present our business segment information in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Revenue
 
 
 
 
 
Domestic
$
37,615

 
$
37,070

 
$
37,138

International
13,090

 
12,677

 
12,105

Total revenue
$
50,705

 
$
49,747

 
$
49,243

Percentage of revenue, by revenue category
 
 
 
 
 
Domestic:
 
 
 
 
 
Consumer Electronics
36
%
 
37
%
 
39
%
Computing and Mobile Phones(1)
40
%
 
37
%
 
34
%
Entertainment
12
%
 
14
%
 
16
%
Appliances
5
%
 
5
%
 
4
%
Services
6
%
 
6
%
 
6
%
Other
1
%
 
1
%
 
1
%
Total
100
%
 
100
%
 
100
%
International:
 
 
 
 
 
Consumer Electronics
20
%
 
20
%
 
20
%
Computing and Mobile Phones(1)
56
%
 
55
%
 
52
%
Entertainment
5
%
 
6
%
 
7
%
Appliances
10
%
 
9
%
 
9
%
Services
9
%
 
10
%
 
12
%
Other
< 1%

 
< 1%

 
< 1%

Total
100
%
 
100
%
 
100
%
(1)
During the first quarter of fiscal 2012, the revenue category previously referred to as "Home Office" was renamed "Computing and Mobile Phones" to more clearly reflect the key products included within the revenue category. However, the composition of the products within this revenue category has not changed from the previous periods' disclosures.

 
2012

 
2011

 
2010

Operating income (loss)
 
 
 
 
 
Domestic
$
1,855

 
$
2,054

 
$
2,103

International(1)
(770
)
 
320

 
265

Total operating income
1,085

 
2,374

 
2,368

Other income (expense)
 
 
 
 
 
Gain on sale of investments
55

 

 

Investment income and other
37

 
43

 
53

Interest expense
(134
)
 
(86
)
 
(92
)
Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates
$
1,043

 
$
2,331

 
$
2,329

Assets
 
 
 
 
 
Domestic
$
9,592

 
$
9,610

 
$
10,431

International
6,413

 
8,239

 
7,871

Total assets
$
16,005

 
$
17,849

 
$
18,302

Capital expenditures
 
 
 
 
 
Domestic
$
488

 
$
481

 
$
385

International
278

 
263

 
230

Total capital expenditures
$
766

 
$
744

 
$
615

Depreciation
 
 
 
 
 
Domestic
$
612

 
$
615

 
$
574

International
267

 
261

 
245

Total depreciation
$
879

 
$
876

 
$
819

(1)
Included within our International segment's operating loss for fiscal 2012 is a $1.2 billion goodwill impairment charge.

Geographic Information

The following tables present our geographic information in fiscal 2012, 2011 and 2010:

 
2012

 
2011

 
2010

Net sales to customers
 
 
 
 
 
United States
$
37,615

 
$
37,070

 
$
37,138

Europe
5,228

 
5,316

 
5,444

Canada
5,635

 
5,468

 
5,065

China
2,069

 
1,779

 
1,562

Other
158

 
114

 
34

Total revenue
$
50,705

 
$
49,747

 
$
49,243

Long-lived assets
 
 
 
 
 
United States
$
2,507

 
$
2,741

 
$
2,960

Europe
352

 
438

 
464

Canada
432

 
474

 
462

China
161

 
147

 
152

Other
19

 
23

 
32

Total long-lived assets
$
3,471

 
$
3,823

 
$
4,070

Contingencies and Commitments
Contingencies and Commitments
Contingencies and Commitments

Contingencies

Employment Discrimination Action

In December 2005, a purported class action lawsuit captioned, Jasmen Holloway, et al. v. Best Buy Co., Inc., was filed against us in the U.S. District Court for the Northern District of California (the “Court”). This federal court action alleged that we discriminate against women and minority individuals on the basis of gender, race, color and/or national origin in our stores with respect to our employment policies and practices. The action sought an end to alleged discriminatory policies and practices, an award of back and front pay, punitive damages and injunctive relief, including rightful place relief for all class members. In June 2011, the plaintiffs filed a motion for preliminary approval of the parties' negotiated settlement including conditional certification of settlement classes and seeking a schedule for final approval. The proposed class action settlement terms included, in exchange for a release and dismissal of the action, certain changes to our personnel policies and procedures; payment to the nine named plaintiffs of $0.3 in the aggregate; and payment in an amount to be determined by the Court, not to exceed $10, of a portion of the plaintiffs' attorneys' fees and costs. In November 2011, the Court fully approved the proposed class action settlement and consent decree; certified the settlement class; and approved and directed distribution of the settlement. Final judgment dismissing the matter with prejudice was also entered in November 2011. All payments in respect of this class action were made in full by their due date, January 8, 2012. It is not reasonably possible that we will incur losses materially in excess of the amounts paid.

Securities Actions

In February 2011, a purported class action lawsuit captioned, IBEW Local 98 Pension Fund, individually and on behalf of all others similarly situated v. Best Buy Co., Inc., et al., was filed against us and certain of our executive officers in the U.S. District Court for the District of Minnesota. This federal court action alleges, among other things, that we and the officers named in the complaint violated Sections 10(b) and 20A of the Exchange Act and Rule 10b-5 under the Exchange Act in connection with press releases and other statements relating to our fiscal 2011 earnings guidance that had been made available to the public. Additionally, in March 2011, a similar purported class action was filed by a single shareholder, Rene LeBlanc, against us and certain of our executive officers in the same court. In July 2011, after consolidation of the IBEW Local 98 Pension Fund and Rene LeBlanc actions, a consolidated complaint captioned, IBEW Local 98 Pension Fund v. Best Buy Co., Inc., et al., was filed and served. We filed a motion to dismiss the consolidated complaint in September 2011, and in March 2012, subsequent to the end of fiscal 2012, the court issued a decision dismissing the action with prejudice. In April 2012, the plaintiffs filed a motion to alter or amend the court's decision on our motion to dismiss. As a result, the court's decision on the motion to dismiss is not final, and the time period for an appeal thereof is delayed until 30 days after a court order disposing of the plaintiff's new motion.

In June 2011, a purported shareholder derivative action captioned, Salvatore M. Talluto, Derivatively and on Behalf of Best Buy Co., Inc. v. Richard M. Schulze, et al., as Defendants and Best Buy Co., Inc. as Nominal Defendant, was filed against both present and former members of our Board of Directors serving during the relevant periods in fiscal 2011 and us as a nominal defendant in the U.S. District Court for the State of Minnesota. The lawsuit alleges that the director defendants breached their fiduciary duty, among other claims, including violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in failing to correct public misrepresentations and material misstatements and/or omissions regarding our fiscal 2011 earnings projections and, for certain directors, selling stock while in possession of material adverse non-public information. Additionally, in July 2011, a similar purported class action was filed by a single shareholder, Daniel Himmel, against us and certain of our executive officers in the same court. In November 2011, the respective lawsuits of Salvatore M. Talluto and Daniel Himmel were consolidated into a new action captioned, In Re: Best Buy Co., Inc. Shareholder Derivative Litigation, and a stay ordered until after a final resolution of the motion to dismiss in the consolidated IBEW Local 98 Pension Fund v. Best Buy Co., Inc., et al. case.

The plaintiffs in the above securities actions seek damages, including interest, equitable relief and reimbursement of the costs and expenses they incurred in the lawsuits. We believe the allegations in the above securities actions are without merit, and we intend to defend these actions vigorously. Based on our assessment of the facts underlying the claims in the above securities actions, their respective procedural litigation history, and the degree to which we intend to defend our company in these matters, the amount or range of reasonably possible losses, if any, cannot be estimated.

Other Legal Proceedings

We are involved in various other legal proceedings arising in the normal course of conducting business. For such legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our consolidated financial position, results of operations or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the variable treatment of claims made in many of these proceedings and the difficulty of predicting the settlement value of many of these proceedings, we are not able to estimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations or cash flows.

Commitments

We engage Accenture LLP ("Accenture") to assist us with improving our operational capabilities and reducing our costs in the information systems and human resources areas. We expect our future contractual obligations to Accenture to range from $155 to $205 per year through 2016, the end of the periods under contract.

We had outstanding letters of credit and bankers' acceptances for purchase obligations with an aggregate fair value of $561 at March 3, 2012.

At March 3, 2012, we had commitments for the purchase and construction of facilities valued at approximately $21. Also, at March 3, 2012, we had entered into lease commitments for land and buildings for 15 future locations. These lease commitments with real estate developers provide for minimum rentals ranging from 5 to 15 years, which if consummated based on current cost estimates, will approximate $3 annually over the initial lease terms. These minimum rentals are reported in the future minimum lease payments included in Note 11, Leases.
Related Party Transactions
Related Party Transactions
Related Party Transactions

Best Buy Europe had the following related party transactions and balances with CPW and Carphone Warehouse in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Payment made to Carphone Warehouse for their share of the profit share agreement buy-out (see Note 2, Profit Share Buy-Out)
$
1,303

 
$

 
$

Revenue earned (primarily commission revenue and fees for information technology services provided to CPW and Carphone Warehouse)

 
6

 
63

SG&A incurred (primarily payroll-related costs and rent paid to CPW and Carphone Warehouse)
20

 
8

 
6

Interest expense incurred on credit facility with CPW and Carphone Warehouse as lender
1

 
1

 
4

Accounts payable to CPW and Carphone Warehouse at the end of the fiscal year

 

 
4

Accounts receivable from CPW and Carphone Warehouse at the end of the fiscal year
1

 
2

 
31

Balance outstanding on credit facility from CPW and Carphone Warehouse at the end of the fiscal year (see Note 8, Debt)

 
98

 
206


As part of the strategic changes in respect of Best Buy Europe, we entered into an Option Agreement with Carphone Warehouse. The agreement grants each party a call option to acquire the other party's interest in Best Buy Europe, and both options will become exercisable in March 2015. We have the first opportunity to exercise our call option to purchase Carphone Warehouse's interest at fair value. If we choose not to exercise our call option, Carphone Warehouse will have the right to purchase our interest at a 10% discount to fair value. If neither party exercises their call option, further options will be exercisable every three years thereafter until one party decides to exercise their option, although Carphone Warehouse will no longer be entitled to the 10% discount. The fair value of the call options is nominal as of March 3, 2012.
Subsequent Event
Subsequent Event
Subsequent Event

In March 2012, subsequent to the end of fiscal 2012, we announced a transformation strategy consisting of a series of actions intended to improve operating performance. The announced actions include closure of approximately 50 large-format Best Buy branded stores in the U.S., changes to the store and corporate operating models, and other measures intended to reduce costs associated with product life-cycle management and supply chain. The costs of implementing the changes primarily consist of lease exit costs, employee severance and fixed asset impairments.

We will begin initiating the announced actions in the first quarter of fiscal 2013 and expect to complete the actions by the end of fiscal 2013. We expect to incur total pre-tax restructuring charges of between $300 and $350 related to the actions, of which between $30 and $40 will be non-cash. Given the timing of these actions, we estimate that between $140 and $160 of the charges will be recorded in the first quarter of fiscal 2013, consisting primarily of employee severance and fixed asset impairments triggered by our change in the intended use of those assets resulting from the strategic actions. The estimated costs associated with lease commitments on vacated stores will be recognized when stores are closed, expected to be throughout the remainder of fiscal 2013. The timing of lease payments for vacated stores is generally expected to follow the original lease terms, except to the extent we reach agreement with landlords for an alternative settlement.

The amount of the restructuring charges noted above are estimates, and the actual charges may vary materially based on various factors, including but not limited to the following: the timing of store closures; level of employee terminations; factors relating to real estate, such as sale proceeds and the timing and amount of sublease income and other related expenses; and changes in management’s assumptions.
Supplementary Financial Information
Supplementary Financial Information (Unaudited)
Supplementary Financial Information (Unaudited)

The following tables show selected operating results for each quarter and full year of fiscal 2012 and 2011 (unaudited):
 
Quarter
 
Fiscal
Year

 
1st

 
2nd

 
3rd

 
4th

 
Fiscal 2012
 
 
 
 
 
 
 
 
 
Revenue
$
10,812

 
$
11,259

 
$
12,004

 
$
16,630

 
$
50,705

Comparable store sales % change(1)
(1.8
)%
 
(2.9
)%
 
0.3
%
 
(2.4
)%
 
(1.7
)%
Gross profit
$
2,746

 
$
2,848

 
$
2,922

 
$
4,057

 
$
12,573

Operating income(2)
330

 
335

 
351

 
69

 
1,085

Net earnings (loss) from continuing operations
199

 
197

 
258

 
(324
)
 
330

Loss from discontinued operations, net of tax
(36
)
 
(37
)
 
(127
)
 
(108
)
 
(308
)
Net earnings (loss) including noncontrolling interests
163

 
160

 
131

 
(432
)
 
22

Net earnings (loss) attributable to Best Buy Co., Inc.(3)
136

 
177

 
154

 
(1,698
)
 
(1,231
)
Diluted earnings (loss) per share(4)
 
 
 
 
 
 
 
 
 
Continuing operations
0.41

 
0.52

 
0.62

 
(4.73
)
 
(2.89
)
Discontinued operations
(0.06
)
 
(0.05
)
 
(0.20
)
 
(0.16
)
 
(0.47
)
Diluted earnings (loss) per share
0.35

 
0.47

 
0.42

 
(4.89
)
 
(3.36
)

 
Quarter
 
Fiscal
Year

 
1st

 
2nd

 
3rd

 
4th

 
Fiscal 2011
 
 
 
 
 
 
 
 
 
Revenue
$
10,674

 
$
11,216

 
$
11,774

 
$
16,083

 
$
49,747

Comparable store sales % change(1)
2.9
%
 
(0.1
)%
 
(3.4
)%
 
(4.7
)%
 
(1.8
)%
Gross profit
$
2,762

 
$
2,888

 
$
2,962

 
$
3,929

 
$
12,541

Operating income(5)
348

 
456

 
433

 
1,137

 
2,374

Net earnings from continuing operations
208

 
274

 
280

 
792

 
1,554

Loss from discontinued operations, net of tax
(27
)
 
(17
)
 
(40
)
 
(104
)
 
(188
)
Net earnings including noncontrolling interests
181

 
257

 
240

 
688

 
1,366

Net earnings attributable to Best Buy Co., Inc.
155

 
254

 
217

 
651

 
1,277

Diluted earnings (loss) per share(4)
 
 
 
 
 
 
 
 
 
Continuing operations
0.41

 
0.62

 
0.61

 
1.84

 
3.44

Discontinued operations
(0.05
)
 
(0.02
)
 
(0.07
)
 
(0.22
)
 
(0.36
)
Diluted earnings per share
0.36

 
0.60

 
0.54

 
1.62

 
3.08

Note: Certain fiscal year totals may not add due to rounding.
(1)
Comprised of revenue from stores operating for at least 14 full months as well as revenue related to call centers, Web sites and our other comparable sales channels. Revenue we earn from sales of merchandise to wholesalers or dealers is not included within our comparable store sales calculation. Relocated, remodeled and expanded stores are excluded from our comparable store sales calculation until at least 14 full months after reopening. Acquired stores are included in our comparable store sales calculation beginning with the first full quarter following the first anniversary of the date of the acquisition. The portion of our calculation of the comparable store sales percentage change attributable to our International segment excludes the effect of fluctuations in foreign currency exchange rates. The method of calculating comparable store sales varies across the retail industry. As a result, our method of calculating comparable store sales may not be the same as other retailers' methods. The calculation of comparable store sales excludes the impact of the extra week of revenue in the fourth quarter of fiscal 2012, as well as revenue from discontinued operations for all periods presented.
(2)
Includes $1, $22 and $35 of restructuring charges recorded in the fiscal second, third and fourth quarters, respectively, related to measures we took to restructure our businesses, as well as a $1,207 goodwill impairment charge recorded in the fourth quarter related to our Best Buy Europe reporting unit.
(3)
Includes a $1,303 payment related to the Mobile buy-out recorded in the fourth quarter of fiscal 2012.
(4)
The sum of our quarterly diluted earnings per share does not equal our annual diluted earnings per share due to the impact of the timing of the repurchases of common stock and stock option exercises on quarterly and annual weighted-average shares outstanding.
(5)
Includes $147 of restructuring charges recorded in the fiscal fourth quarter related to measures we took to restructure our businesses.
Valuation and Qualifying Accounts
Valuation and Qualifying Accounts
Schedule II

Valuation and Qualifying Accounts
($ in millions)

 
Balance at
Beginning
of Period

 
Charged to
Expenses or
Other Accounts

 
Other(1)

 
Balance at
End of
Period

Year ended March 3, 2012
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
107

 
$
8

 
$
(43
)
 
$
72

Year ended February 26, 2011
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
101

 
$
46

 
$
(40
)
 
$
107

Year ended February 27, 2010
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
97

 
$
48

 
$
(44
)
 
$
101

(1)
Includes bad debt write-offs and recoveries, acquisitions and the effect of foreign currency fluctuations.
Summary of Significant Accounting Policies (Policies)
Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. ("GAAP") requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts in the Consolidated Balance Sheets and Consolidated Statements of Earnings, as well as the disclosure of contingent liabilities. Future results could be materially affected if actual results were to differ from these estimates and assumptions.

Fiscal Year

Our fiscal year ends on the Saturday nearest the end of February. Fiscal 2012 included 53 weeks and fiscal 2011 and 2010 each included 52 weeks.

On November 2, 2011, our Board of Directors approved a change in our fiscal year-end from the Saturday nearest the end of February to the Saturday nearest the end of January, effective beginning with our fiscal year 2013. As a result of this change, our fiscal year 2013 transition period will be 11 months and will end on February 2, 2013, and we will begin 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 aligning our fiscal reporting periods with statutory filing requirements in certain foreign jurisdictions. We will begin filing our quarterly reports on Form 10-Q based on the new fiscal year-end beginning with the first quarter of fiscal year 2013. We also currently plan to report the first quarter of fiscal year 2013 as a three-month period, which will include the results of the last month of fiscal year 2012.

Cash and Cash Equivalents

Cash primarily consists of cash on hand and bank deposits. Cash equivalents consist of money market funds, U.S. Treasury bills, commercial paper and time deposits such as certificates of deposit with an original maturity of three months or less when purchased. The amounts of cash equivalents at March 3, 2012, and February 26, 2011, were $343 and $120, respectively, and the weighted-average interest rates were 0.1% and 0.3%, respectively.

Outstanding checks in excess of funds on deposit (book overdrafts) totaled $80 and $57 at March 3, 2012, and February 26, 2011, respectively, and are reflected within Accounts payable in our Consolidated Balance Sheets.

Receivables

Receivables consist principally of amounts due from mobile phone network operators for commissions earned; banks for customer credit card, certain debit card and electronic benefits transfer (EBT) transactions; and vendors for various vendor funding programs.

We establish allowances for uncollectible receivables based on historical collection trends and write-off history. Our allowances for uncollectible receivables were $72 and $107 at March 3, 2012, and February 26, 2011, respectively.

Merchandise Inventories

Merchandise inventories are recorded at the lower of cost using either the average cost or first-in first-out method, or market. In-bound freight-related costs from our vendors are included as part of the net cost of merchandise inventories. Also included in the cost of inventory are certain vendor allowances that are not a reimbursement of specific, incremental and identifiable costs to promote a vendor's products. Other costs associated with acquiring, storing and transporting merchandise inventories to our retail stores are expensed as incurred and included in cost of goods sold.

Our inventory valuation reflects adjustments for anticipated physical inventory losses (e.g., theft) that have occurred since the last physical inventory. Physical inventory counts are taken on a regular basis to ensure that the inventory reported in our consolidated financial statements is properly stated.

Our inventory valuation also reflects markdowns for the excess of the cost over the amount we expect to realize from the ultimate sale or other disposal of the inventory. Markdowns establish a new cost basis for our inventory. Subsequent changes in facts or circumstances do not result in the reversal of previously recorded markdowns or an increase in that newly established cost basis.

Restricted Assets

Restricted cash and investments in debt securities totaled $461 and $490, at March 3, 2012, and February 26, 2011, respectively, and are included in Other current assets or Equity and Other Investments in our Consolidated Balance Sheets. Such balances are pledged as collateral or restricted to use for vendor payables, general liability insurance, workers' compensation insurance and warranty programs.

Property and Equipment

Property and equipment are recorded at cost. We compute depreciation using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the period from the date the assets are placed in service to the end of the initial lease term. Leasehold improvements made significantly after the initial lease term are depreciated over the shorter of their estimated useful lives or the remaining lease term, including renewal periods, if reasonably assured. Accelerated depreciation methods are generally used for income tax purposes.

When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from our Consolidated Balance Sheets and any resulting gain or loss is reflected in our Consolidated Statements of Earnings.

Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated.

Costs associated with the acquisition or development of software for internal use are capitalized and amortized over the expected useful life of the software, from three to seven years. A subsequent addition, modification or upgrade to internal-use software is capitalized to the extent that it enhances the software's functionality or extends its useful life. Capitalized software is included in fixtures and equipment. Software maintenance and training costs are expensed in the period incurred.

Property under capital lease is comprised of buildings and equipment used in our retail operations and corporate support functions. The related depreciation for capital lease assets is included in depreciation expense. The carrying value of property under capital lease was $69 and $74 at March 3, 2012, and February 26, 2011, respectively, net of accumulated depreciation of $60 and $45, respectively.

Impairment of Long-Lived Assets and Costs Associated With Exit Activities

Long-lived assets, such as property and equipment, are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Factors considered important that could result in an impairment review include, but are not limited to, significant underperformance relative to historical or planned operating results, significant changes in the manner of use of the assets or significant changes in our business strategies. An impairment loss is recognized when the estimated undiscounted cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on quoted market prices or other valuation techniques (e.g., discounted cash flow analysis).

When reviewing long-lived assets for impairment, we group long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For example, long-lived assets deployed at store locations are reviewed for impairment at the individual store level, which involves comparing the carrying value of all land, buildings, leasehold improvements, fixtures and equipment located at each store to the net cash flow projections for each store. In addition, we conduct separate impairment reviews at other levels as appropriate, for example to evaluate potential impairment of assets shared by several areas of operations, such as information technology systems.
The present value of costs associated with location closings, primarily future lease costs (net of expected sublease income), are charged to earnings when we have ceased using the specific location. We accelerate depreciation on property and equipment we expect to retire when a decision is made to abandon a location.

At March 3, 2012, and February 26, 2011, the obligation associated with location closings was $138 and $76, respectively, and is included within Accrued liabilities and Long-term liabilities in our Consolidated Balance Sheets. The obligation associated with location closings at March 3, 2012, included amounts associated with our fiscal 2012 and fiscal 2011 restructuring activities and the obligation associated with location closings at February 26, 2011, included amounts associated with our fiscal 2011 restructuring activities.

Leases

We conduct the majority of our retail and distribution operations from leased locations. The leases require payment of real estate taxes, insurance and common area maintenance, in addition to rent. The terms of our lease agreements generally range from 10 to 20 years. Most of the leases contain renewal options and escalation clauses, and certain store leases require
contingent rents based on factors such as specified percentages of revenue or the consumer price index.

For leases that contain predetermined fixed escalations of the minimum rent, we recognize the related rent expense on a straight-line basis from the date we take possession of the property to the end of the initial lease term. We record any difference between the straight-line rent amounts and amounts payable under the leases as part of deferred rent, in Accrued liabilities or Long-term liabilities, as appropriate.

Cash or lease incentives received upon entering into certain store leases ("tenant allowances") are recognized on a straight-line basis as a reduction to rent from the date we take possession of the property through the end of the initial lease term. We record the unamortized portion of tenant allowances as a part of deferred rent, in Accrued liabilities or Long-term liabilities, as appropriate.

At March 3, 2012, and February 26, 2011, deferred rent included in Accrued liabilities in our Consolidated Balance Sheets was $42 and $34, respectively, and deferred rent included in Long-term liabilities in our Consolidated Balance Sheets was $317 and $343, respectively.

We also lease certain equipment under noncancelable operating and capital leases. In addition, we have financing leases for which the gross cost of constructing the asset is included in property and equipment, and amounts reimbursed from the landlord are recorded as financing obligations. Assets acquired under capital and financing leases are depreciated over the shorter of the useful life of the asset or the lease term, including renewal periods, if reasonably assured.


Lease Rights

Lease rights represent costs incurred to acquire the lease of a specific commercial property. Lease rights are recorded at cost and are amortized to rent expense over the remaining lease term, including renewal periods, if reasonably assured. Amortization periods range up to 15 years, beginning with the date we take possession of the property.

Goodwill and Intangible Assets

Goodwill

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment annually in the fiscal fourth quarter, or when indications of potential impairment exist. We monitor the existence of potential impairment indicators throughout the fiscal year.

We test for goodwill impairment at the reporting unit level. Our reporting units are the components of operating segments which constitute businesses for which discrete financial information is available and is regularly reviewed by segment management. No components were aggregated in arriving at our reporting units. Our reporting units with goodwill balances at the beginning of fiscal 2012 were Best Buy Domestic, Best Buy Canada, Five Star China and Best Buy Europe.

The impairment test involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the fair value exceeds carrying value, then we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit's goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit's goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.

We carry forward the detailed determination of the fair value of a reporting unit in our annual goodwill impairment analysis if three criteria are met: (1) the assets and liabilities that make up the reporting unit have not changed significantly since the most recent detailed fair value determination; (2) the most recent detailed fair value determination resulted in an amount that exceeded the carrying amount of the reporting unit by a substantial margin; and (3) based on an analysis of events that have occurred since the most recent detailed fair value determination, the likelihood that current fair value is less than the current carrying amount of the reporting unit is remote. For all other reporting units, we perform a detailed determination of fair value of the reporting unit.

Our detailed impairment analysis involves the use of a discounted cash flow ("DCF") model. Significant management judgment is necessary to evaluate the impact of operating and macroeconomic changes on each reporting unit. Critical assumptions include projected comparable store sales growth, store count, gross profit rates, selling, general and administrative expense ("SG&A") rates, working capital fluctuations, capital expenditures and terminal growth rates, as well as an appropriate discount rate. Discount rates are determined separately for each reporting unit using the capital asset pricing model. We also use comparable market earnings multiple data and our company's market capitalization to corroborate our reporting unit valuations.

Goodwill Impairment

For the Best Buy Domestic, Best Buy Canada and Five Star China reporting units, we utilized the carry-forward methodology outlined above in completing the fiscal 2012 goodwill impairment reviews. For each of these reporting units, we determined that the fair value of goodwill remained substantially in excess of carrying values. No goodwill impairments were recorded in fiscal 2011 or fiscal 2010.

Refer to Note 2, Profit Share Buy-Out, for further information on the $1,207 goodwill impairment attributable to the Best Buy Europe reporting unit recorded in the fourth quarter of fiscal 2012.

Tradenames and Customer Relationships

We have an indefinite-lived tradename related to Pacific Sales included within our Domestic segment. We also have indefinite-lived tradenames related to Future Shop, Five Star, The Carphone Warehouse and The Phone House included within our International segment.

We have definite-lived intangible assets related to customer relationships acquired as part of our acquisition of mindSHIFT within our Domestic segment, and Best Buy Europe within our International segment.

Our valuation of identifiable intangible assets acquired is based on information and assumptions available to us at the time of acquisition, using income and market approaches to determine fair value. We amortize definite-lived intangible assets over their estimated useful lives. We do not amortize our indefinite-lived tradenames, but test for impairment annually, or when indications of potential impairment exist.

We utilize the relief from royalty method to determine the fair value of each of our indefinite-lived tradenames. If the carrying value exceeds the fair value, we recognize an impairment loss in an amount equal to the excess. Significant management judgment is necessary to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates. Royalty rates used are consistent with those assumed for original purchase accounting. Other assumptions are consistent with those we use for goodwill impairment testing purposes.
Investments

Debt Securities

Our long-term investments in debt securities are comprised of auction-rate securities ("ARS"). Based on our ability to market and sell these instruments, we classify ARS as available-for-sale and carry them at fair value. ARS were intended to behave like short-term debt instruments because their interest rates reset periodically through an auction process, typically at intervals of seven, 28 and 35 days. Investments in these securities can be sold for cash at par value on the auction date if the auction is successful. The majority of our ARS are AAA/Aaa-rated and collateralized by student loans, which are guaranteed 95% to 100% by the U.S. government. We also hold ARS that are in the form of municipal revenue bonds, which are AA/Aa-rated and insured by bond insurers. We do not have any investments in securities that are collateralized by assets that include mortgages or subprime debt. Our intent with these investments is to recover the full principal amount through a successful auction process, a sale outside of the auction process, a refinancing or settlement upon maturity. See Note 5, Investments, for further information.

In accordance with our investment policy, we place our investments in debt securities with issuers who have high-quality credit and limit the amount of investment exposure to any one issuer. The primary objective of our investment activities is to preserve principal and maintain a desired level of liquidity to meet working capital needs. We seek to preserve principal and minimize exposure to interest rate fluctuations by limiting default risk, market risk and reinvestment risk.
Marketable Equity Securities

We also periodically invest in marketable equity securities and classify them as available-for-sale. Investments in marketable equity securities are included in Equity and Other Investments in our Consolidated Balance Sheets, and are reported at fair value based on quoted market prices. All unrealized holding gains and losses are reflected net of tax in accumulated other comprehensive income in shareholders' equity.

Other Investments

We also have investments that are accounted for on either the cost method or the equity method that we include in Equity and Other Investments in our Consolidated Balance Sheets.

We review the key characteristics of our debt, marketable equity securities and other investments portfolio and their classification in accordance with GAAP on a quarterly basis, or when indications of potential impairment exist. If a decline in the fair value of a security is deemed by management to be other-than-temporary, we write down the cost basis of the investment to fair value, and the amount of the write-down is included in net earnings.

Insurance

We are self-insured for certain losses related to health, workers' compensation and general liability claims, although we obtain third-party insurance coverage to limit our exposure to these claims. A portion of these self-insured losses are managed through a wholly-owned insurance captive. We estimate our self-insured liabilities using a number of factors, including historical claims experience, an estimate of incurred but not reported claims, demographic factors and severity factors, and utilizing valuations provided by independent third-party actuaries.
Income Taxes

We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured pursuant to tax laws using rates we expect to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. We recognize the effect of a change in income tax rates on deferred tax assets and liabilities in our Consolidated Statements of Earnings in the period that includes the enactment date. We record a valuation allowance to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized.

In determining our provision for income taxes, we use an annual effective income tax rate based on annual income, permanent differences between book and tax income, and statutory income tax rates. The effective income tax rate also reflects our assessment of the ultimate outcome of tax audits. We adjust our annual effective income tax rate as additional information on outcomes or events becomes available. Discrete events such as audit settlements or changes in tax laws are recognized in the period in which they occur.

Our income tax returns, like those of most companies, are periodically audited by U.S. federal, state and local and foreign tax authorities. These audits include questions regarding our tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any one time, multiple tax years are subject to audit by the various tax authorities. In evaluating the tax benefits associated with our various tax filing positions, we record a tax benefit for uncertain tax positions using the highest cumulative tax benefit that is more likely than not to be realized. A number of years may elapse before a particular matter, for which we have established a liability, is audited and effectively settled. We adjust our liability for unrecognized tax benefits in the period in which we determine the issue is effectively settled with the tax authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available. We include our liability for unrecognized tax benefits, including accrued penalties and interest, in Accrued income taxes and Long-term liabilities on our Consolidated Balance Sheets and in Income tax expense in our Consolidated Statements of Earnings.

Accrued Liabilities

The major components of accrued liabilities at March 3, 2012, and February 26, 2011, were deferred revenue, state and local tax liabilities, rent-related liabilities including accrued real estate taxes, loyalty program liabilities and self-insurance reserves.

Long-Term Liabilities

The major components of long-term liabilities at March 3, 2012, and February 26, 2011, were unrecognized tax benefits, rent-related liabilities, deferred revenue, deferred compensation plan liabilities and self-insurance reserves.

Foreign Currency

Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at our consolidated balance sheet date. For operations reported on a two-month lag, we use the exchange rates in effect two months prior to our consolidated balance sheet date. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component of shareholders' equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in SG&A, have not been significant.

Revenue Recognition

Our revenue arises primarily from sales of merchandise and services. We also record revenue from sales of extended warranties and other service contracts, commissions earned from various customer subscriptions, fees earned from private label and co-branded credit card agreements and amounts billed to customers for shipping and handling. Revenue excludes sales taxes collected.

We recognize revenue when the sales price is fixed or determinable, collection is reasonably assured and the customer takes possession of the merchandise, or in the case of services, the service has been provided. Revenue is recognized for store sales when the customer receives and pays for the merchandise. For online sales, we defer revenue and the related product costs for shipments that are in-transit to the customer, and recognize revenue at the time the customer receives the product. Online customers typically receive goods within a few days of shipment. Revenue from merchandise sales and services is reported net of sales returns, including an estimate of future returns based on historical return rates, with a corresponding reduction to cost of sales. Our sales returns reserve was $18 and $15, at March 3, 2012, and February 26, 2011, respectively.

We sell extended warranties and other service contracts that typically have terms ranging from three months to four years. We also receive commissions for customer subscriptions with various third parties, notably from mobile phone network operators. In instances where we are deemed to be the obligor on the service contract or subscription, the service and commission revenue is deferred and recognized ratably over the term of the service contract or subscription period. In instances where we are not deemed to be the obligor on the service contract or subscription, commissions are recognized in revenue when such commission has been earned, primarily driven by customer activation. Service and commission revenues earned from the sale of extended warranties represented 2.7%, 2.6% and 2.7% of revenue in fiscal 2012, 2011 and 2010, respectively.

For revenue transactions that involve multiple deliverables, we defer the revenue associated with any undelivered elements. The amount of revenue deferred in connection with the undelivered elements is determined using the relative fair value of each element, which is generally based on each element's relative retail price.

At March 3, 2012, and February 26, 2011, deferred revenue included within Accrued liabilities and Long-term liabilities in our Consolidated Balance Sheets was $565 and $499, respectively.

For additional information related to our credit card arrangements, see Credit Services and Financing, below.

For additional information regarding our customer loyalty programs, see Sales Incentives, below.

Gift Cards

We sell gift cards to our customers in our retail stores, through our Web sites and through selected third parties. We do not charge administrative fees on unused gift cards, and our gift cards do not have an expiration date. We recognize revenue from gift cards when: (i) the gift card is redeemed by the customer, or (ii) the likelihood of the gift card being redeemed by the customer is remote ("gift card breakage"), and we determine that we do not have a legal obligation to remit the value of unredeemed gift cards to the relevant jurisdictions. We determine our gift card breakage rate based upon historical redemption patterns. Based on our historical information, the likelihood of a gift card remaining unredeemed can be determined 24 months after the gift card is issued. At that time, we recognize breakage income for those cards for which the likelihood of redemption is deemed remote and we do not have a legal obligation to remit the value of such unredeemed gift cards to the relevant jurisdictions. Gift card breakage income is included in revenue in our Consolidated Statements of Earnings.
Credit Services and Financing

In the U.S., we have private-label and co-branded credit card agreements with banks for the issuance of promotional financing and customer loyalty credit cards bearing the Best Buy brand. Under the agreements, the banks manage and directly extend credit to our customers. Cardholders who choose a private-label credit card can receive low- or zero-interest promotional financing on qualifying purchases.

The banks are the sole owner of the accounts receivable generated under the programs and absorb losses associated with non-payment by the cardholders and fraudulent usage of the accounts. Accordingly, we do not hold any consumer receivables related to these programs. We earn revenue from fees the banks pay to us based on the number of credit card accounts activated and card usage. In accordance with accounting guidance for revenue arrangements with multiple deliverables, we defer revenue received from cardholder account activations and recognize revenue on a straight-line basis over the remaining term of the applicable agreement with the banks. The banks may also reimburse us for certain costs such as tender costs and Reward Zone points associated with our programs. We pay financing fees, which are recognized as a reduction of revenue, to the banks, and these fees are variable based on certain factors such as the London Interbank Offered Rate ("LIBOR"), charge volume and/or the types of promotional financing offers.

We also have similar agreements for the issuance of private-label and/or co-branded credit cards with banks for our businesses in Canada, China and Mexico, which we account for consistent with the U.S. credit card agreements.

In addition to our private-label and co-branded credit cards, we also accept Visa®, MasterCard®, Discover®, JCB® and American Express® credit cards, as well as debit cards from all major international networks.

Sales Incentives

We frequently offer sales incentives that entitle our customers to receive a reduction in the price of a product or service. Sales incentives include discounts, coupons and other offers that entitle a customer to receive a reduction in the price of a product or service either at the point of sale or by submitting a claim for a refund or rebate. For sales incentives issued to a customer in conjunction with a sale of merchandise or services, for which we are the obligor, the reduction in revenue is recognized at the time of sale, based on the retail value of the incentive expected to be redeemed.

Customer Loyalty Programs

We have customer loyalty programs which allow members to earn points for each qualifying purchase. Points earned enable members to receive a certificate that may be redeemed on future purchases at our Best Buy branded stores. There are two ways that members may participate and earn loyalty points.

First, we have customer loyalty programs where members earn points for each purchase. Depending on the customer's membership level within our loyalty program, certificates expire either three or six months from the date of issuance. The retail value of points earned by our loyalty program members is included in accrued liabilities and recorded as a reduction of revenue at the time the points are earned, based on the percentage of points that are projected to be redeemed.
Second, under our co-branded credit card agreements with banks, we have a customer loyalty credit card bearing the Best Buy brand. Cardholders earn points for purchases made at our stores and related Web sites in the U.S., as well as purchases at other merchants. Points earned entitle cardholders to receive certificates that may be redeemed on future purchases at our stores and related Web sites. Certificates expire either three or six months from the date of issuance. The retail value of points earned by our cardholders is included in accrued liabilities and recorded as a reduction of revenue at the time the points are earned, based on the percentage of points that are projected to be redeemed.

We recognize revenue when: (i) a certificate is redeemed by the customer, (ii) a certificate expires or (iii) the likelihood of a certificate being redeemed by a customer is remote ("certificate breakage"). We determine our certificate breakage rate based upon historical redemption patterns.

Cost of Goods Sold and Selling, General and Administrative Expenses

The following table illustrates the primary costs classified in each major expense category:
Cost of Goods Sold
 
Total cost of products sold including:
 
 
 
Freight expenses associated with moving merchandise inventories from our vendors to our distribution centers;
 
 
 
Vendor allowances that are not a reimbursement of specific, incremental and identifiable costs to promote a vendor's products; and
 
 
 
Cash discounts on payments to merchandise vendors;
 
Cost of services provided including:
 
 
 
Payroll and benefits costs for services employees; and
 
 
 
Cost of replacement parts and related freight expenses;
 
Physical inventory losses;
 
Markdowns;
 
Customer shipping and handling expenses;
 
Costs associated with operating our distribution network, including payroll and benefit costs, occupancy costs, and depreciation; and
 
Freight expenses associated with moving merchandise inventories from our distribution centers to our retail stores.
SG&A
 
Payroll and benefit costs for retail and corporate employees;
 
Occupancy and maintenance costs of retail, services and corporate facilities;
 
Depreciation and amortization related to retail, services and corporate assets;
 
Advertising costs;
 
Vendor allowances that are a reimbursement of specific, incremental and identifiable costs to promote a vendor's products;
 
Tender costs, including bank charges and costs associated with credit and debit card interchange fees;
 
Charitable contributions;
 
Outside and outsourced service fees;
 
Long-lived asset impairment charges; and
 
Other administrative costs, such as supplies, and travel and lodging.


Cost of Goods Sold and Selling, General and Administrative Expenses

The following table illustrates the primary costs classified in each major expense category:
Cost of Goods Sold
 
Total cost of products sold including:
 
 
 
Freight expenses associated with moving merchandise inventories from our vendors to our distribution centers;
 
 
 
Vendor allowances that are not a reimbursement of specific, incremental and identifiable costs to promote a vendor's products; and
 
 
 
Cash discounts on payments to merchandise vendors;
 
Cost of services provided including:
 
 
 
Payroll and benefits costs for services employees; and
 
 
 
Cost of replacement parts and related freight expenses;
 
Physical inventory losses;
 
Markdowns;
 
Customer shipping and handling expenses;
 
Costs associated with operating our distribution network, including payroll and benefit costs, occupancy costs, and depreciation; and
 
Freight expenses associated with moving merchandise inventories from our distribution centers to our retail stores.
SG&A
 
Payroll and benefit costs for retail and corporate employees;
 
Occupancy and maintenance costs of retail, services and corporate facilities;
 
Depreciation and amortization related to retail, services and corporate assets;
 
Advertising costs;
 
Vendor allowances that are a reimbursement of specific, incremental and identifiable costs to promote a vendor's products;
 
Tender costs, including bank charges and costs associated with credit and debit card interchange fees;
 
Charitable contributions;
 
Outside and outsourced service fees;
 
Long-lived asset impairment charges; and
 
Other administrative costs, such as supplies, and travel and lodging.
Vendor Allowances

We receive funds from vendors for various programs, primarily as reimbursements for costs such as markdowns, margin protection, advertising and sales incentives.

Vendor allowances provided as a reimbursement of specific, incremental and identifiable costs incurred to promote a vendor's products are included as an expense reduction when the cost is incurred. All other vendor allowances are generally in the form of receipt-based funds or sell-through credits. Receipt-based funds are generally determined based on our level of inventory purchases and initially deferred and recorded as a reduction of merchandise inventories. The deferred amounts are then included as a reduction of cost of goods sold when the related product is sold. Sell-through credits are generally based on the number of units we sell over a specified period and are recognized when the related product is sold.

Vendor allowances included in SG&A for reimbursement of specific, incremental and identifiable costs to promote and sell a vendor's products were $33, $69 and $139 in fiscal 2012, 2011 and 2010, respectively. A change in the form of vendor contracts in 2011 has led to a higher proportion of vendor allowances being classified within cost of goods sold.

Advertising Costs

Advertising costs, which are included in SG&A, are expensed the first time the advertisement runs. Advertising costs consist primarily of print and television advertisements as well as promotional events. Net advertising expenses were $995, $862 and $709 in fiscal 2012, 2011 and 2010, respectively. Allowances received from vendors for advertising of $98 in fiscal 2010 were classified as reductions of advertising expenses. As a result of a change in the form of vendor contracts, we received no allowances from vendors for advertising expenses that were deemed specific, incremental and identifiable in fiscal 2012 or fiscal 2011.

Pre-Opening Costs

Non-capital expenditures associated with opening new stores are expensed as incurred.

Stock-Based Compensation

We apply the fair value recognition provisions of accounting guidance as they relate to our stock-based compensation, which require us to recognize expense for the fair value of our stock-based compensation awards. We recognize compensation expense on a straight-line basis over the requisite service period of the award (or to an employee's eligible retirement date, if earlier).

New Accounting Standards

Goodwill Impairment — In September 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance simplifying how to test 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. As such, we will adopt the new guidance in our fiscal quarter ending May 5, 2012. We do not believe our adoption of the new guidance will 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 eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes 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. As such, we will adopt the new guidance in our fiscal quarter ending May 5, 2012.

Fair Value Measurement — In April 2011, the FASB issued new guidance to achieve common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards. This new guidance amends 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. As such, we will adopt the new guidance in our fiscal quarter ending May 5, 2012. We do not believe our adoption of the new guidance will have an impact on our consolidated financial position, results of operations or cash flows.
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. Our money market fund investments not traded on a regular basis or in an active market, and for which we have been unable to obtain pricing information on an ongoing basis, were measured using inputs other than quoted market prices that are observable for the investments and, therefore, were classified as Level 2.

U.S. Treasury Bills. Our U.S. Treasury notes 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 an active market.

Auction Rate Securities. Our investments in ARS were classified as Level 3 as quoted prices were unavailable due to events described in Note 5, Investments. Due to limited market information, we utilized a 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.

Deferred Compensation. Our deferred compensation liabilities and 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 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.

With the exception of the goodwill impairment associated with our Best Buy Europe reporting unit described in Note 2, Profit Share Buy-Out, as well as the fixed asset and tradename impairments associated with our fiscal 2012 and fiscal 2011 restructuring activities described in Note 7, Restructuring Charges, we had no significant remeasurements of such assets or liabilities to fair value during fiscal 2012, 2011 and 2010. The following table summarizes the fair value remeasurments recorded for fiscal 2012 and 2011:
 
Fiscal 2012
 
Fiscal 2011
 
Impairments
 
Remaining Net
Carrying Value
 
Impairments
 
Remaining Net
Carrying Value
Continuing operations
 
 
 
 
 
 
 
Goodwill of Best Buy Europe reporting unit
$
1,207

 
$

 
$

 
$

Property and equipment
32

 

 
122

 
49

Total
$
1,239

 
$

 
$
122

 
$
49

Discontinued operations(1)
 
 
 
 
 
 
 
Property and equipment
$
111

 
$

 
$
25

 
$
2

Tradename
3

 

 
10

 
3

Total
$
114

 
$

 
$
35

 
$
5

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

All of the fair value remeasurments included in the table above were based on significant unobservable inputs (Level 3). Refer to Note 1, Summary of Significant Accounting Policies, as well as Note 2, Profit Share Buy-Out, for further information associated with the goodwill impairment. 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, as described in Note 1, Summary of Significant Accounting Policies. 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. 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.
Summary of Significant Accounting Policies (Tables)
Estimated useful lives by major asset category are as follows:
Asset
Life
(in years)
Buildings
25-50
Leasehold improvements
3-25
Fixtures and equipment
3-20
Property under capital lease
2-20

The changes in the carrying amount of goodwill and indefinite-lived tradenames by segment were as follows in fiscal 2012, 2011 and 2010:
 
Goodwill
 
Indefinite-Lived Tradenames
 
Domestic

 
International

 
Total

 
Domestic

 
International

 
Total

Balances at February 28, 2009
$
434

 
$
1,769

 
$
2,203

 
$
32

 
$
72

 
$
104

Purchase accounting adjustments(1)

 
48

 
48

 

 

 

Changes in foreign currency exchange rates

 
201

 
201

 

 
8

 
8

Balances at February 27, 2010
434

 
2,018

 
2,452

 
32

 
80

 
112

Acquisitions

 
5

 
5

 

 

 

Impairments(2)

 

 

 
(10
)
 

 
(10
)
Sale of business(3)
(12
)
 

 
(12
)
 
(1
)
 

 
(1
)
Changes in foreign currency exchange rates

 
9

 
9

 

 
4

 
4

Balances at February 26, 2011
422

 
2,032

 
2,454

 
21

 
84

 
105

Acquisitions(4)
94

 

 
94

 
1

 

 
1

Impairments

 
(1,207
)
 
(1,207
)
 

 

 

Sale of business

 
(7
)
 
(7
)
 
(3
)
 
(2
)
 
(5
)
Changes in foreign currency exchange rates

 
1

 
1

 

 
1

 
1

Other(5)

 

 

 

 
28

 
28

Balances at March 3, 2012
$
516

 
$
819

 
$
1,335

 
$
19

 
$
111

 
$
130

(1)
The adjustment in fiscal 2010 related to the finalization of the purchase price allocations from our acquisitions of Best Buy Europe and Five Star.
(2)
As part of our fiscal 2011 restructuring activities, we recorded an impairment charge related to certain indefinite-lived tradenames in our Domestic segment. See Note 7, Restructuring Charges, for further information.
(3)
As a result of the sale of our Speakeasy business in the second quarter of fiscal 2011, we eliminated the carrying value of the related goodwill and indefinite-lived tradenames as of the date of sale.
(4)
Represents goodwill acquired, primarily as a result of the mindSHIFT acquisition. See Note 4, Acquisitions, for further information.
(5)
Represents the transfer of certain definite-lived tradenames (at their net book value) to indefinite-lived tradenames following our decision to no longer 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:
 
March 3, 2012
 
February 26, 2011
 
Gross Carrying
Amount
 
Cumulative
Impairment
 
Gross Carrying
Amount
 
Cumulative
Impairment
Goodwill
$
2,596

 
$
(1,261
)
 
$
2,519

 
$
(65
)
Our tradenames and customer relationships were as follows:
 
March 3, 2012
 
February 26, 2011
 
Tradenames

 
Customer
Relationships

 
Tradenames

 
Customer
Relationships

Indefinite-lived
$
130

 
$

 
$
105

 
$

Definite-lived

 
229

 
28

 
203

Total
$
130

 
$
229

 
$
133

 
$
203



The following table provides the gross carrying amount and related accumulated amortization of definite-lived intangible assets:
 
March 3, 2012
 
February 26, 2011
 
Gross Carrying
Amount

 
Accumulated Amortization

 
Gross Carrying
Amount

 
Accumulated Amortization

Tradenames
$

 
$

 
$
73

 
$
(45
)
Customer relationships
453

 
(224
)
 
383

 
(180
)
Total
$
453

 
$
(224
)
 
$
456

 
$
(225
)
Total amortization expense was $48, $82, and $88 in fiscal 2012, 2011, and 2010, respectively. At March 3, 2012, future amortization expense for identifiable intangible assets for the next five fiscal years was expected to be:
Fiscal Year
 
2013
$
40

2014
40

2015
40

2016
40

2017
22

Thereafter
47

The following table provides the gross carrying amount and related accumulated amortization of lease rights:
 
March 3, 2012
 
February 26, 2011
 
Gross Carrying
Amount

 
Accumulated
Amortization

 
Gross Carrying
Amount

 
Accumulated
Amortization

Lease rights
$
130

 
$
(73
)
 
$
131

 
$
(57
)
Our self-insured liabilities included in the Consolidated Balance Sheets were as follows:
 
March 3,
2012

 
February 26, 2011

Accrued liabilities
$
77

 
$
81

Long-term liabilities
47

 
49

Total
$
124

 
$
130

Gift card breakage income was as follows in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Gift card breakage income
$
54

 
$
51

 
$
41


The following table illustrates the primary costs classified in each major expense category:
Cost of Goods Sold
 
Total cost of products sold including:
 
 
 
Freight expenses associated with moving merchandise inventories from our vendors to our distribution centers;
 
 
 
Vendor allowances that are not a reimbursement of specific, incremental and identifiable costs to promote a vendor's products; and
 
 
 
Cash discounts on payments to merchandise vendors;
 
Cost of services provided including:
 
 
 
Payroll and benefits costs for services employees; and
 
 
 
Cost of replacement parts and related freight expenses;
 
Physical inventory losses;
 
Markdowns;
 
Customer shipping and handling expenses;
 
Costs associated with operating our distribution network, including payroll and benefit costs, occupancy costs, and depreciation; and
 
Freight expenses associated with moving merchandise inventories from our distribution centers to our retail stores.
SG&A
 
Payroll and benefit costs for retail and corporate employees;
 
Occupancy and maintenance costs of retail, services and corporate facilities;
 
Depreciation and amortization related to retail, services and corporate assets;
 
Advertising costs;
 
Vendor allowances that are a reimbursement of specific, incremental and identifiable costs to promote a vendor's products;
 
Tender costs, including bank charges and costs associated with credit and debit card interchange fees;
 
Charitable contributions;
 
Outside and outsourced service fees;
 
Long-lived asset impairment charges; and
 
Other administrative costs, such as supplies, and travel and lodging.
Discontinued Operations (Tables)
Schedule of financial results of discontinued operations

The financial results of discontinued operations for fiscal 2012, 2011 and 2010 were as follows:
 
2012

 
2011

 
2010

Revenue
$
411

 
$
525

 
$
451

 
 
 
 
 
 
Restructuring charges(1)
229

 
75

 

 
 
 
 
 
 
Loss from discontinued operations before income tax benefit
(406
)
 
(260
)
 
(134
)
Income tax benefit
89

 
57

 
33

Gain on sale of discontinued operations
9

 
7

 

Income tax benefit on sale

 
8

 

Net loss from discontinued operations including noncontrolling interests
(308
)
 
(188
)
 
(101
)
Net loss from discontinued operations attributable to noncontrolling interests
134

 
38

 
19

Net loss from discontinued operations attributable to Best Buy Co., Inc.
$
(174
)
 
$
(150
)
 
$
(82
)
(1)
See Note 7, Restructuring Charges, for further discussion of the restructuring charges associated with discontinued operations.
Investments (Tables)
Investments were comprised of the following:
 
March 3,
2012

 
February 26,
2011

Short-term investments
 
 
 
Money market fund
$

 
$
2

U.S. Treasury bills

 
20

Total short-term investments
$

 
$
22

 
 
 
 
Equity and other investments
 
 
 
Debt securities (auction rate securities)
$
82

 
$
110

Marketable equity securities
3

 
146

Other investments
55

 
72

Total equity and other investments
$
140

 
$
328

Our ARS portfolio consisted of the following, at fair value:
Description
Nature of collateral or guarantee
 
March 3,
2012

 
February 26,
2011

Student loan bonds
Student loans guaranteed 95% to 100% by the U.S. government
 
$
80

 
$
108

Municipal revenue bonds
100% insured by AAA/Aaa-rated bond insurers at March 3, 2012
 
2

 
2

Total fair value plus accrued interest(1)
 
 
$
82

 
$
110

(1)
The par value and weighted-average interest rates (taxable equivalent) of our ARS were $88 and $115 and 0.5% and 0.8%, respectively, at March 3, 2012, and February 26, 2011, respectively.
Our investments in marketable equity securities were as follows:
 
March 3,
2012

 
February 26,
2011

Common stock of TalkTalk Telecom Group PLC
$

 
$
62

Common stock of Carphone Warehouse Group plc

 
84

Other
3

 

Total
$
3

 
$
146

Fair Value Measurements (Tables)
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 March 3, 2012, and February 26, 2011, according to the valuation techniques we used to determine their fair values.
 
 
 
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 assets)
119

 
119

 

 

U.S. Treasury bills (restricted assets)
30

 
30

 

 

Foreign currency derivative instruments
1

 

 
1

 

Equity and other investments
 
 
 
 
 
 
 
Auction rate securities
82

 

 

 
82

Marketable equity securities
3

 
3

 

 

Other assets
 
 
 
 
 
 
 
Marketable securities that fund deferred compensation
83

 
83

 

 

Liabilities
 
 
 
 
 
 
 
Accrued liabilities
 
 
 
 
 
 
 
Foreign currency derivative instruments
2

 

 
2

 

Long-term liabilities
 
 
 
 
 
 
 
Deferred compensation
62

 
62

 

 


 
 
 
Fair Value Measurements Using Inputs Considered as
 
Fair Value at
February 26, 2011

 
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
$
70

 
$
70

 
$

 
$

Short-term investments
 
 
 
 
 
 
 
Money market fund
2

 

 
2

 

U.S. Treasury bills
20

 
20

 

 

Other current assets


 
 

 
 

 
 

Money market funds (restricted assets)
63

 
63

 

 

U.S. Treasury bills (restricted assets)
105

 
105

 

 

Foreign currency derivative instruments
2

 

 
2

 

Equity and other investments


 
 

 
 

 
 

Auction rate securities
110

 

 

 
110

Marketable equity securities
146

 
146

 

 

Other assets


 
 

 
 

 
 

Marketable securities that fund deferred compensation
83

 
83

 

 

Liabilities


 
 

 
 

 
 

Accrued liabilities
 
 
 
 
 
 
 
Foreign currency derivative instruments
1

 

 
1

 

Long-term liabilities


 
 

 
 

 
 

Deferred compensation
64

 
64

 

 

Foreign currency derivative instruments
2

 

 
2

 


The following table provides 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).
 
Debt securities — Auction rate securities only
 
Student
loan
bonds

 
Municipal
revenue
bonds

 
Total

Balances at February 27, 2010
$
261

 
$
19

 
$
280

Changes in unrealized losses in other comprehensive income
(1
)
 
1

 

Sales
(152
)
 
(18
)
 
(170
)
Balances at February 26, 2011
$
108

 
$
2

 
$
110

Changes in unrealized losses in other comprehensive income
(1
)
 

 
(1
)
Sales
(27
)
 

 
(27
)
Balances at March 3, 2012
$
80

 
$
2

 
$
82

The following table summarizes the fair value remeasurments recorded for fiscal 2012 and 2011:
 
Fiscal 2012
 
Fiscal 2011
 
Impairments
 
Remaining Net
Carrying Value
 
Impairments
 
Remaining Net
Carrying Value
Continuing operations
 
 
 
 
 
 
 
Goodwill of Best Buy Europe reporting unit
$
1,207

 
$

 
$

 
$

Property and equipment
32

 

 
122

 
49

Total
$
1,239

 
$

 
$
122

 
$
49

Discontinued operations(1)
 
 
 
 
 
 
 
Property and equipment
$
111

 
$

 
$
25

 
$
2

Tradename
3

 

 
10

 
3

Total
$
114

 
$

 
$
35

 
$
5

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

Restructuring Charges (Tables)
The composition of the restructuring charges we incurred in fiscal 2010 for our fiscal 2010 restructuring activities was as follows:
 
Domestic

 
International

 
Total

Termination benefits
$
25

 
$
26

 
$
51

Facility closure costs

 
1

 
1

Total
$
25

 
$
27

 
$
52


The composition of the restructuring charges we incurred in fiscal 2012 and 2011, as well as the cumulative amount incurred through the end of fiscal 2012, for our fiscal 2011 restructuring activities, was as follows:
 
Domestic
 
International
 
Total
 
Fiscal 2012

 
Fiscal 2011

 
Cumulative Amount

 
Fiscal 2012

 
Fiscal 2011

 
Cumulative Amount

 
Fiscal 2012

 
Fiscal 2011

 
Cumulative Amount

Continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory write-downs
$
19

 
$
9

 
$
28

 
$

 
$

 
$

 
$
19

 
$
9

 
$
28

Property and equipment impairments

 
15

 
15

 

 
107

 
107

 

 
122

 
122

Termination benefits
(3
)
 
16

 
13

 

 

 

 
(3
)
 
16

 
13

Facility closure and other costs
4

 

 
4

 

 

 

 
4

 

 
4

Total
20

 
40

 
60

 

 
107

 
107

 
20

 
147

 
167

Discontinued operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory write-downs

 

 

 

 
15

 
15

 

 
15

 
15

Property and equipment impairments
15

 

 
15

 

 
25

 
25

 
15

 
25

 
40

Termination benefits
4

 

 
4

 
7

 
12

 
19

 
11

 
12

 
23

Intangible asset impairments
3

 
10

 
13

 

 

 

 
3

 
10

 
13

Facility closure and other costs
3

 

 
3

 
(8
)
 
13

 
5

 
(5
)
 
13

 
8

Total
25

 
10

 
35

 
(1
)
 
65

 
64

 
24

 
75

 
99

Total
$
45

 
$
50

 
$
95

 
$
(1
)
 
$
172

 
$
171

 
$
44

 
$
222

 
$
266

The composition of the restructuring charges we incurred in fiscal 2012 for our fiscal 2012 restructuring activities was as follows:
 
Domestic
 
International
 
Total
Continuing operations
 
 
 
 
 
Property and equipment impairments
$
17

 
$
15

 
$
32

Termination benefits
1

 

 
1

Facility closure and other costs
5

 

 
5

Total
23

 
15

 
38

Discontinued operations
 
 
 
 
 
Inventory write-downs

 
11

 
11

Property and equipment impairments

 
96

 
96

Termination benefits

 
16

 
16

Facility closure and other costs

 
82

 
82

Total

 
205

 
205

Total
$
23

 
$
220

 
$
243

The following table summarizes our restructuring accrual activity during fiscal 2012 and 2011 related to termination benefits associated with our fiscal 2011 restructuring activities:
 
Termination Benefits
 
Facility
Closure and
Other Costs(1)
 
Total
Balance at February 27, 2010
$

 
$

 
$

Charges
28

 
13

 
41

Cash payments

 

 

Balance at February 26, 2011
28

 
13

 
41

Charges
11

 
6

 
17

Cash payments
(33
)
 
(14
)
 
(47
)
Adjustments
(3
)
 
4

 
1

Balance at March 3, 2012
$
3

 
$
9

 
$
12

(1)
Included within the facility closure and other costs adjustments is $10 from the first quarter of fiscal 2012, representing an adjustment to exclude non-cash charges or benefits, which had no impact on our Consolidated Statements of Earnings in fiscal 2012.

The following table summarizes our restructuring accrual activity during fiscal 2011 related to termination benefits and facility closure costs associated with our fiscal 2010 restructuring activities:
 
Termination
Benefits

 
Facility
Closure Costs

 
Total

Balance at February 27, 2010
$
8

 
$
1

 
$
9

Charges

 

 

Cash payments
(8
)
 
(1
)
 
(9
)
Balance at February 26, 2011
$

 
$

 
$

The following table summarizes our restructuring accrual activity during fiscal 2012 related to termination benefits and facility closure and other costs associated with our fiscal 2012 restructuring activities:
 
Termination Benefits
 
Facility
Closure and
Other Costs
 
Total
Balance at February 26, 2011
$

 
$

 
$

Charges
17

 
87

 
104

Cash payments

 

 

Changes in foreign currency exchange rates

 
(2
)
 
(2
)
Balance at March 3, 2012
$
17


$
85

 
$
102

Debt (Tables)
Short-term debt consisted of the following:
 
March 3, 2012
 
February 26, 2011
 
Principal
Balance

 
Interest
Rate

 
Principal
Balance

 
Interest
Rate

U.S. revolving credit facility – 364-day
$

 
%
 
$

 
%
U.S. revolving credit facility – five-year

 
%
 

 
%
Europe revolving credit facility
480

 
2.4
%
 

 
%
Europe receivables financing facility

 
%
 
455

 
3.7
%
Old Europe revolving credit facility

 
%
 
98

 
3.6
%
Canada revolving demand facility

 
%
 

 
%
China revolving demand facilities

 
%
 
4

 
4.8
%
Total short-term debt
$
480

 
 

 
$
557

 
 

 
Fiscal Year
2012

 
2011

Maximum month-end outstanding during the year
$
480

 
$
690

Average amount outstanding during the year
$
337

 
$
383

Weighted-average interest rate at year-end
2.4
%
 
3.7
%
Long-term debt consisted of the following:
 
March 3,
2012

 
February 26,
2011

2013 Notes
$
500

 
$
500

2016 Notes
349

 

2021 Notes
648

 

Convertible debentures

 
402

Financing lease obligations, due 2013 to 2026, interest rates ranging from 3.0% to 8.1%
149

 
170

Capital lease obligations, due 2013 to 2035, interest rates ranging from 2.1% to 8.3%
81

 
79

Other debt, due 2018 to 2022, interest rates ranging from 2.6% to 6.7%
1

 
1

Total long-term debt
$
1,728

 
$
1,152

Less: current portion(1)
(43
)
 
(441
)
Total long-term debt, less current portion
$
1,685

 
$
711

(1)
Since holders of our convertible debentures could have required us to purchase all or a portion of the debentures on January 15, 2012, we classified the $402 for such debentures in the current portion of long-term debt at February 26, 2011.

At March 3, 2012, the future maturities of long-term debt, including capitalized leases, consisted of the following:
Fiscal Year
 
2013
$
40

2014
542

2015
40

2016
32

2017
369

Thereafter
705

Total long-term debt
$
1,728

Derivative Instruments (Tables)
The following table presents the gross fair values for derivative instruments and the corresponding classification at March 3, 2012 and February 26, 2011:
 
March 3, 2012
 
February 26, 2011
Contract Type
Assets

 
Liabilities

 
Assets

 
Liabilities

Cash flow hedges (foreign exchange forward contracts)
$

 
$

 
$
1

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

 
(2
)
 
2

 
(2
)
Total
$
1

 
$
(2
)
 
$
3

 
$
(4
)
The following tables present the effects of derivative instruments on other comprehensive income ("OCI") and on our Consolidated Statements of Earnings for fiscal 2012 and 2011:
 
2012
 
2011
Contract Type
Pre-tax Gain
Recognized
in OCI(1)

 
Gain Reclassified from Accumulated OCI to Earnings (Effective Portion)(2)

 
Pre-tax Gain
Recognized
in OCI(1)

 
Gain Reclassified from Accumulated OCI to Earnings (Effective Portion)(2)

Cash flow hedges (foreign exchange forward contracts)
$
7

 
$
5

 
$
9

 
$
12

Net investment hedges (foreign exchange swap contracts)

 

 
8

 

Total
$
7

 
$
5

 
$
17

 
$
12

(1)
Reflects the amount recognized in OCI prior to the reclassification of 50% to noncontrolling interests for the cash flow and net investment hedges, respectively.
(2)
Gain reclassified from accumulated OCI is included within Selling, general and administrative expenses in our Consolidated Statements of Earnings.

The following table presents the effects of derivatives not designated as hedging instruments on our Consolidated Statements of Earnings for fiscal 2012 and 2011:
 
Gain Recognized
within SG&A
Contract Type
2012

 
2011

No hedge designation (foreign exchange forward contracts)
$
5

 
$
13

The following table presents the notional amounts of our foreign currency exchange contracts at March 3, 2012 and February 26, 2011:
 
Notional Amount
Contract Type
March 3,
2012

 
February 26,
2011

Derivatives designated as cash flow hedging instruments
$

 
$
264

Derivatives not designated as hedging instruments
238

 
493

Total
$
238

 
$
757

Shareholders' Equity (Tables)
Stock-based compensation expense was as follows in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Stock options
$
76

 
$
90

 
$
85

Share awards
 
 
 
 
 
Market-based

 
4

 
8

Performance-based

 
(1
)
 
1

Time-based
33

 
16

 
10

Employee stock purchase plans
11

 
12

 
14

Total
$
120

 
$
121

 
$
118

Stock option activity was as follows in fiscal 2012:
 
Stock
Options

 
Weighted-
Average
Exercise Price
per Share

 
Weighted-Average
Remaining
Contractual
Term (in years)

 
Aggregate
Intrinsic Value

Outstanding at February 26, 2011
35,587,000

 
$
38.97

 
 

 
 

Granted
3,973,000

 
27.50

 
 

 
 

Exercised
(1,126,000
)
 
24.61

 
 

 
 

Forfeited/Canceled
(2,633,000
)
 
39.87

 
 

 
 

Outstanding at March 3, 2012
35,801,000

 
$
38.08

 
5.9

 
$
4

Vested or expected to vest at March 3, 2012
34,099,000

 
$
38.36

 
5.8

 
$
4

Exercisable at March 3, 2012
24,403,000

 
$
40.21

 
4.8

 
$
4

In fiscal 2012, 2011 and 2010, we estimated the fair value of each stock option on the date of grant using a lattice model with the following assumptions:
Valuation Assumptions(1)
2012

 
2011

 
2010

Risk-free interest rate(2)
0.1% – 3.6%

 
0.2% – 3.9%

 
0.2% – 3.8%

Expected dividend yield
2.3
%
 
1.5
%
 
1.6
%
Expected stock price volatility(3)
37
%
 
36
%
 
42
%
Expected life of stock options (in years)(4)
6.2

 
6.1

 
6.1

(1)
Forfeitures are estimated using historical experience and projected employee turnover.
(2)
Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of our stock options.
(3)
We use an outside valuation advisor to assist us in projecting expected stock price volatility. We consider both the historical volatility of our stock price as well as implied volatilities from exchange-traded options on our stock.
(4)
We estimate the expected life of stock options based upon historical experience.

A summary of the status of our nonvested market-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows:
Market-Based Share Awards
Shares

 
Weighted-Average Fair Value per Share

Outstanding at February 26, 2011
193,000

 
$
52.19

Granted

 

Vested

 

Forfeited/Canceled
(193,000
)
 
52.19

Outstanding at March 3, 2012

 
$

A summary of the status of our nonvested performance-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows:
Performance-Based Share Awards
Shares

 
Weighted-Average Fair Value per Share

Outstanding at February 26, 2011
2,179,000

 
$
41.64

Granted

 

Vested
(2,000
)
 
44.94

Forfeited/Canceled
(1,265,000
)
 
41.96

Outstanding at March 3, 2012
912,000

 
$
41.20

A summary of the status of our nonvested time-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows:
Time-Based Share Awards
Shares

 
Weighted-Average Fair Value per Share

Outstanding at February 26, 2011
2,171,000

 
$
36.60

Granted
2,647,000

 
25.65

Vested
(665,000
)
 
35.01

Forfeited/Canceled
(229,000
)
 
33.55

Outstanding at March 3, 2012
3,924,000

 
$
29.63

In fiscal 2012, 2011 and 2010, we estimated the fair value of stock-based compensation expense associated with our employee stock purchase plans on the purchase date using the Black-Scholes option-pricing valuation model, with the following assumptions:
Valuation Assumptions
2012

 
2011

 
2010

Risk-free interest rate(1)
0.1
%
 
0.2
%
 
0.3
%
Expected dividend yield
2.4
%
 
1.4
%
 
1.5
%
Expected stock price volatility(2)
38
%
 
29
%
 
53
%
Expected life of employee stock purchase plan options (in months)(3)
6

 
6

 
6

(1)
Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of employee stock purchase plan shares.
(2)
We consider both the historical volatility of our stock price as well as implied volatilities from exchange-traded options on our stock.
(3)
Based on semi-annual purchase period.

At March 3, 2012, options to purchase 35.8 million shares of common stock were outstanding as follows (shares in millions):
 
Exercisable
 
Unexercisable
 
Total
 
Shares

 
%

 
Weighted-
Average Price
per Share

 
Shares

 
%

 
Weighted-
Average Price
per Share

 
Shares

 
%

 
Weighted-
Average Price
per Share

In-the-money
3.6

 
15
%
 
$
25.28

 
2.8

 
25
%
 
$
25.07

 
6.4

 
18
%
 
$
25.19

Out-of-the-money
20.8

 
85
%
 
42.81

 
8.6

 
75
%
 
36.30

 
29.4

 
82
%
 
40.91

Total
24.4

 
100
%
 
$
40.21

 
11.4

 
100
%
 
$
27.30

 
35.8

 
100
%
 
$
38.08

The following table presents a reconciliation of the numerators and denominators of basic and diluted earnings per share in fiscal 2012, 2011 and 2010:
 
2012(1)

 
2011

 
2010

Numerator:
 
 
 
 
 
Net earnings from continuing operations
$
330

 
$
1,554

 
$
1,495

Net (earnings) from continuing operations attributable to noncontrolling interests
(1,387
)
 
(127
)
 
(96
)
Net (loss) earnings from continuing operations attributable to Best Buy Co., Inc., basic
(1,057
)
 
1,427

 
1,399

Adjustment for assumed dilution:
 
 
 
 
 
Interest on convertible debentures due in 2022, net of tax

 
6

 
6

Net (loss) earnings from continuing operations attributable to Best Buy Co., Inc., diluted
$
(1,057
)
 
$
1,433

 
$
1,405

Denominator (in millions):
 
 
 
 
 
Weighted-average common shares outstanding
366.3

 
406.1

 
416.8

Effect of potentially dilutive securities:
 
 
 
 
 
Shares from assumed conversion of convertible debentures

 
8.8

 
8.8

Stock options and other

 
1.6

 
1.9

Weighted-average common shares outstanding, assuming dilution
366.3

 
416.5

 
427.5

Net (loss) earnings per share from continuing operations attributable to Best Buy Co., Inc.
 
 
 
 
 
Basic
$
(2.89
)
 
$
3.51

 
$
3.36

Diluted
$
(2.89
)
 
$
3.44

 
$
3.29

(1)
The calculation of diluted (loss) per share for fiscal 2012 does not include potentially dilutive securities because their inclusion would be anti-dilutive (i.e., reduce the net loss per share).
The following table presents the amount and cost of shares we repurchased and retired in fiscal 2012, 2011 and 2010 under the June 2011 program and the June 2007 program (shares in millions):
 
2012

 
2011

 
2010

June 2011 Program
 
 
 
 
 
Total number of shares repurchased
34.5

 

 

Total cost of shares repurchased
$
889

 
$

 
$

 
 
 
 
 
 
June 2007 Program
 
 
 
 
 
Total number of shares repurchased
20.1

 
32.6

 

Total cost of shares repurchased
$
611

 
$
1,193

 
$

The components of accumulated other comprehensive income, net of tax, were as follows:
 
March 3,
2012

 
February 26,
2011

Foreign currency translation
$
93

 
$
102

Unrealized (losses) gains on available-for-sale investments
(3
)
 
72

Unrealized losses on derivative instruments (cash flow hedges)

 
(1
)
Total
$
90

 
$
173

Leases (Tables)
The composition of net rent expense for all operating leases, including leases of property and equipment, was as follows in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Minimum rentals
$
1,192

 
$
1,141

 
$
1,111

Contingent rentals
2

 
2

 
2

Total rent expense
1,194

 
1,143

 
1,113

Less: sublease income
(19
)
 
(19
)
 
(20
)
Net rent expense
$
1,175

 
$
1,124

 
$
1,093

The future minimum lease payments under our capital, financing and operating leases by fiscal year (not including contingent rentals) at March 3, 2012, were as follows:
Fiscal Year
Capital
Leases

 
Financing
Leases

 
Operating
Leases

2013
$
21

 
$
32

 
$
1,216

2014
21

 
31

 
1,154

2015
18

 
29

 
1,063

2016
10

 
25

 
940

2017
3

 
20

 
792

Thereafter
23

 
43

 
2,352

Subtotal
96

 
180

 
$
7,517

Less: imputed interest
(15
)
 
(31
)
 
 

Present value
$
81

 
$
149

 
 

Income Taxes (Tables)
The following is a reconciliation of the federal statutory income tax rate to income tax expense in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Federal income tax at the statutory rate
$
365

 
$
816

 
$
815

State income taxes, net of federal benefit
45

 
46

 
68

Benefit from foreign operations
(96
)
 
(86
)
 
(54
)
Non-taxable interest income

 

 
(1
)
Other

 
3

 
7

Goodwill impairment
395

 

 

Income tax expense
$
709

 
$
779

 
$
835

Effective income tax rate
68.0
%
 
33.4
%
 
35.9
%

Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates by jurisdiction was as follows in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

United States
$
1,537

 
$
1,739

 
$
1,944

Outside the United States
(494
)
 
592

 
385

Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates
$
1,043

 
$
2,331

 
$
2,329

Income tax expense was comprised of the following in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Current:
 
 
 
 
 
Federal
$
447

 
$
735

 
$
686

State
61

 
73

 
116

Foreign
173

 
105

 
63

 
681

 
913

 
865

Deferred:
 
 
 
 
 
Federal
94

 
(113
)
 
(13
)
State
1

 
(2
)
 
(11
)
Foreign
(67
)
 
(19
)
 
(6
)
 
28

 
(134
)
 
(30
)
Income tax expense
$
709

 
$
779

 
$
835

Deferred taxes are the result of differences between the bases of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities were comprised of the following:
 
March 3,
2012

 
February 26,
2011

Accrued property expenses
$
146

 
$
154

Other accrued expenses
108

 
122

Deferred revenue
128

 
141

Compensation and benefits
103

 
86

Stock-based compensation
157

 
137

Loss and credit carryforwards
310

 
303

Other
121

 
125

Total deferred tax assets
1,073

 
1,068

Valuation allowance
(204
)
 
(212
)
Total deferred tax assets after valuation allowance
869

 
856

Property and equipment
(376
)
 
(316
)
Convertible debt

 
(79
)
Goodwill and intangibles
(118
)
 
(123
)
Inventory
(85
)
 
(25
)
Other
(27
)
 
(22
)
Total deferred tax liabilities
(606
)
 
(565
)
Net deferred tax assets
$
263

 
$
291

Deferred tax assets and liabilities included in our Consolidated Balance Sheets were as follows:
 
March 3,
2012

 
February 26,
2011

Other current assets
$
226

 
$
261

Other assets
53

 
98

Other long-term liabilities
(16
)
 
(68
)
Net deferred tax assets
$
263

 
$
291

The following table provides a reconciliation of changes in unrecognized tax benefits for fiscal 2012 and 2011:
Balance at February 27, 2010
$
393

Gross increases related to prior period tax positions
36

Gross decreases related to prior period tax positions
(90
)
Gross increases related to current period tax positions
40

Settlements with taxing authorities

Lapse of statute of limitations
(20
)
Balance at February 26, 2011
$
359

Gross increases related to prior period tax positions
69

Gross decreases related to prior period tax positions
(35
)
Gross increases related to current period tax positions
43

Settlements with taxing authorities
(20
)
Lapse of statute of limitations
(29
)
Balance at March 3, 2012
$
387

Segment and Geographic Information (Tables)
The following tables present our business segment information in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Revenue
 
 
 
 
 
Domestic
$
37,615

 
$
37,070

 
$
37,138

International
13,090

 
12,677

 
12,105

Total revenue
$
50,705

 
$
49,747

 
$
49,243

Percentage of revenue, by revenue category
 
 
 
 
 
Domestic:
 
 
 
 
 
Consumer Electronics
36
%
 
37
%
 
39
%
Computing and Mobile Phones(1)
40
%
 
37
%
 
34
%
Entertainment
12
%
 
14
%
 
16
%
Appliances
5
%
 
5
%
 
4
%
Services
6
%
 
6
%
 
6
%
Other
1
%
 
1
%
 
1
%
Total
100
%
 
100
%
 
100
%
International:
 
 
 
 
 
Consumer Electronics
20
%
 
20
%
 
20
%
Computing and Mobile Phones(1)
56
%
 
55
%
 
52
%
Entertainment
5
%
 
6
%
 
7
%
Appliances
10
%
 
9
%
 
9
%
Services
9
%
 
10
%
 
12
%
Other
< 1%

 
< 1%

 
< 1%

Total
100
%
 
100
%
 
100
%
(1)
During the first quarter of fiscal 2012, the revenue category previously referred to as "Home Office" was renamed "Computing and Mobile Phones" to more clearly reflect the key products included within the revenue category. However, the composition of the products within this revenue category has not changed from the previous periods' disclosures.

 
2012

 
2011

 
2010

Operating income (loss)
 
 
 
 
 
Domestic
$
1,855

 
$
2,054

 
$
2,103

International(1)
(770
)
 
320

 
265

Total operating income
1,085

 
2,374

 
2,368

Other income (expense)
 
 
 
 
 
Gain on sale of investments
55

 

 

Investment income and other
37

 
43

 
53

Interest expense
(134
)
 
(86
)
 
(92
)
Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates
$
1,043

 
$
2,331

 
$
2,329

Assets
 
 
 
 
 
Domestic
$
9,592

 
$
9,610

 
$
10,431

International
6,413

 
8,239

 
7,871

Total assets
$
16,005

 
$
17,849

 
$
18,302

Capital expenditures
 
 
 
 
 
Domestic
$
488

 
$
481

 
$
385

International
278

 
263

 
230

Total capital expenditures
$
766

 
$
744

 
$
615

Depreciation
 
 
 
 
 
Domestic
$
612

 
$
615

 
$
574

International
267

 
261

 
245

Total depreciation
$
879

 
$
876

 
$
819

(1)
Included within our International segment's operating loss for fiscal 2012 is a $1.2 billion goodwill impairment charge.
The following tables present our geographic information in fiscal 2012, 2011 and 2010:

 
2012

 
2011

 
2010

Net sales to customers
 
 
 
 
 
United States
$
37,615

 
$
37,070

 
$
37,138

Europe
5,228

 
5,316

 
5,444

Canada
5,635

 
5,468

 
5,065

China
2,069

 
1,779

 
1,562

Other
158

 
114

 
34

Total revenue
$
50,705

 
$
49,747

 
$
49,243

Long-lived assets
 
 
 
 
 
United States
$
2,507

 
$
2,741

 
$
2,960

Europe
352

 
438

 
464

Canada
432

 
474

 
462

China
161

 
147

 
152

Other
19

 
23

 
32

Total long-lived assets
$
3,471

 
$
3,823

 
$
4,070

Related Party Transactions (Tables)
Schedule of Related Party Transactions
Best Buy Europe had the following related party transactions and balances with CPW and Carphone Warehouse in fiscal 2012, 2011 and 2010:
 
2012

 
2011

 
2010

Payment made to Carphone Warehouse for their share of the profit share agreement buy-out (see Note 2, Profit Share Buy-Out)
$
1,303

 
$

 
$

Revenue earned (primarily commission revenue and fees for information technology services provided to CPW and Carphone Warehouse)

 
6

 
63

SG&A incurred (primarily payroll-related costs and rent paid to CPW and Carphone Warehouse)
20

 
8

 
6

Interest expense incurred on credit facility with CPW and Carphone Warehouse as lender
1

 
1

 
4

Accounts payable to CPW and Carphone Warehouse at the end of the fiscal year

 

 
4

Accounts receivable from CPW and Carphone Warehouse at the end of the fiscal year
1

 
2

 
31

Balance outstanding on credit facility from CPW and Carphone Warehouse at the end of the fiscal year (see Note 8, Debt)

 
98

 
206


Supplementary Financial Information (Tables)
Schedule of supplementary financial informaiton
The following tables show selected operating results for each quarter and full year of fiscal 2012 and 2011 (unaudited):
 
Quarter
 
Fiscal
Year

 
1st

 
2nd

 
3rd

 
4th

 
Fiscal 2012
 
 
 
 
 
 
 
 
 
Revenue
$
10,812

 
$
11,259

 
$
12,004

 
$
16,630

 
$
50,705

Comparable store sales % change(1)
(1.8
)%
 
(2.9
)%
 
0.3
%
 
(2.4
)%
 
(1.7
)%
Gross profit
$
2,746

 
$
2,848

 
$
2,922

 
$
4,057

 
$
12,573

Operating income(2)
330

 
335

 
351

 
69

 
1,085

Net earnings (loss) from continuing operations
199

 
197

 
258

 
(324
)
 
330

Loss from discontinued operations, net of tax
(36
)
 
(37
)
 
(127
)
 
(108
)
 
(308
)
Net earnings (loss) including noncontrolling interests
163

 
160

 
131

 
(432
)
 
22

Net earnings (loss) attributable to Best Buy Co., Inc.(3)
136

 
177

 
154

 
(1,698
)
 
(1,231
)
Diluted earnings (loss) per share(4)
 
 
 
 
 
 
 
 
 
Continuing operations
0.41

 
0.52

 
0.62

 
(4.73
)
 
(2.89
)
Discontinued operations
(0.06
)
 
(0.05
)
 
(0.20
)
 
(0.16
)
 
(0.47
)
Diluted earnings (loss) per share
0.35

 
0.47

 
0.42

 
(4.89
)
 
(3.36
)

 
Quarter
 
Fiscal
Year

 
1st

 
2nd

 
3rd

 
4th

 
Fiscal 2011
 
 
 
 
 
 
 
 
 
Revenue
$
10,674

 
$
11,216

 
$
11,774

 
$
16,083

 
$
49,747

Comparable store sales % change(1)
2.9
%
 
(0.1
)%
 
(3.4
)%
 
(4.7
)%
 
(1.8
)%
Gross profit
$
2,762

 
$
2,888

 
$
2,962

 
$
3,929

 
$
12,541

Operating income(5)
348

 
456

 
433

 
1,137

 
2,374

Net earnings from continuing operations
208

 
274

 
280

 
792

 
1,554

Loss from discontinued operations, net of tax
(27
)
 
(17
)
 
(40
)
 
(104
)
 
(188
)
Net earnings including noncontrolling interests
181

 
257

 
240

 
688

 
1,366

Net earnings attributable to Best Buy Co., Inc.
155

 
254

 
217

 
651

 
1,277

Diluted earnings (loss) per share(4)
 
 
 
 
 
 
 
 
 
Continuing operations
0.41

 
0.62

 
0.61

 
1.84

 
3.44

Discontinued operations
(0.05
)
 
(0.02
)
 
(0.07
)
 
(0.22
)
 
(0.36
)
Diluted earnings per share
0.36

 
0.60

 
0.54

 
1.62

 
3.08

Note: Certain fiscal year totals may not add due to rounding.
(1)
Comprised of revenue from stores operating for at least 14 full months as well as revenue related to call centers, Web sites and our other comparable sales channels. Revenue we earn from sales of merchandise to wholesalers or dealers is not included within our comparable store sales calculation. Relocated, remodeled and expanded stores are excluded from our comparable store sales calculation until at least 14 full months after reopening. Acquired stores are included in our comparable store sales calculation beginning with the first full quarter following the first anniversary of the date of the acquisition. The portion of our calculation of the comparable store sales percentage change attributable to our International segment excludes the effect of fluctuations in foreign currency exchange rates. The method of calculating comparable store sales varies across the retail industry. As a result, our method of calculating comparable store sales may not be the same as other retailers' methods. The calculation of comparable store sales excludes the impact of the extra week of revenue in the fourth quarter of fiscal 2012, as well as revenue from discontinued operations for all periods presented.
(2)
Includes $1, $22 and $35 of restructuring charges recorded in the fiscal second, third and fourth quarters, respectively, related to measures we took to restructure our businesses, as well as a $1,207 goodwill impairment charge recorded in the fourth quarter related to our Best Buy Europe reporting unit.
(3)
Includes a $1,303 payment related to the Mobile buy-out recorded in the fourth quarter of fiscal 2012.
(4)
The sum of our quarterly diluted earnings per share does not equal our annual diluted earnings per share due to the impact of the timing of the repurchases of common stock and stock option exercises on quarterly and annual weighted-average shares outstanding.
(5)
Includes $147 of restructuring charges recorded in the fiscal fourth quarter related to measures we took to restructure our businesses.
Summary of Significant Accounting Policies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended
Mar. 3, 2012
M
Y
segments
Feb. 26, 2011
Feb. 27, 2010
Mar. 3, 2012
International [Member]
Mar. 3, 2012
International [Member]
Feb. 26, 2011
International [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Description of Business [Abstract]
 
 
 
 
 
 
 
Number of operating segments
 
 
 
 
 
 
Basis of Presentation [Abstract]
 
 
 
 
 
 
 
Reporting period lag for consolidation of financial results (in months)
2 months 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
 
 
$ 82 
Goodwill impairment
1,207 
1,207 
1,207 
 
Fiscal Year [Abstract]
 
 
 
 
 
 
 
Number of Weeks in Fiscal Year
P53W 
P52W 
P52W 
 
 
 
 
Cash and Cash Equivalents [Abstract]
 
 
 
 
 
 
 
Maximum term of original maturity to classify instrument as cash equivalents (in months)
 
 
 
 
 
 
Cash Equivalents
343 
120 
 
 
 
 
 
Weighted-average interest rate on cash equivalents (as a percent)
0.10% 
0.30% 
 
 
 
 
 
Outstanding checks in excess of funds on deposit
80 
57 
 
 
 
 
 
Receivables [Abstract]
 
 
 
 
 
 
 
Allowances for uncollectible receivables
72 
107 
 
 
 
 
 
Restricted Cash and Investments [Abstract]
 
 
 
 
 
 
 
Restricted cash and investments in debt securities
461 
490 
 
 
 
 
 
Property, Plant and Equipment [Abstract]
 
 
 
 
 
 
 
Carrying value of property under capital lease
69 
74 
 
 
 
 
 
Accumulated depreciation
60 
45 
 
 
 
 
 
Impairment of Long-Lived Assets and Costs Associated with Exit Activities [Abstract]
 
 
 
 
 
 
 
Obligation associated with location closings
138 
76 
 
 
 
 
 
Leases [Abstract]
 
 
 
 
 
 
 
Term of lease agreements, low end of the range (in years)
10 
 
 
 
 
 
 
Term of lease agreement, high end of the range (in years)
20 
 
 
 
 
 
 
Deferred rent, current
42 
34 
 
 
 
 
 
Deferred rent, noncurrent
317 
343 
 
 
 
 
 
Insurance [Abstract]
 
 
 
 
 
 
 
Self-insured liabilities included in accrued liabilities
77 
81 
 
 
 
 
 
Self-insured liabilities included in long-term liabilities
47 
49 
 
 
 
 
 
Total insured liabilities
124 
130 
 
 
 
 
 
Foreign Currency [Abstract]
 
 
 
 
 
 
 
Use of prior months' exchange rate to align operations reported (in months)
 
 
 
 
 
 
Revenue Recognition [Abstract]
 
 
 
 
 
 
 
Sales returns reserve
18 
15 
 
 
 
 
 
Term of extended warranties, low end of the range (in months)
 
 
 
 
 
 
Term of extended warranties, high end of the range (in years)
 
 
 
 
 
 
Percentage of commissions on sale of extended warranties to revenue (as a percent)
2.70% 
2.60% 
2.70% 
 
 
 
 
Deferred revenue
565 
499 
 
 
 
 
 
Gift Cards [Abstract]
 
 
 
 
 
 
 
Historical period used to determine the likelihood of a gift card remaining unredeemed (in months)
24 
 
 
 
 
 
 
Gift card breakage income
54 
51 
41 
 
 
 
 
Credit Services and Financing [Abstract]
 
 
 
 
 
 
 
Private label promotional credit card financing rate description
low- or zero 
 
 
 
 
 
 
Sales Incentives [Abstract]
 
 
 
 
 
 
 
Number of ways members may participate and earn loyalty points
 
 
 
 
 
 
Period of expiration for customer loyalty certificates, low end of range
3 months 
 
 
 
 
 
 
Period of expiration for customer loyalty certificates, high end of range
6 months 
 
 
 
 
 
 
Period of expiration for customer loyalty certificates, credit card, low end of range
3 months 
 
 
 
 
 
 
Period of expiration for customer loyalty certificates, credit card, high end of range
6 months 
 
 
 
 
 
 
Vendor Allowances [Abstract]
 
 
 
 
 
 
 
Vendor allowances received to promote and sell a vendor's products
33 
69 
139 
 
 
 
 
Marketing and Advertising Expense [Abstract]
 
 
 
 
 
 
 
Net advertising expenses
995 
862 
709 
 
 
 
 
Allowances received from vendors for advertising
$ 98 
 
 
 
 
 
 
Summary of Significant Accounting Policies (Details 2) (USD $)
In Millions, unless otherwise specified
Mar. 3, 2012
Feb. 26, 2011
Trade Names [Member]
 
 
Tradenames and Customer Relationships [Line Items]
 
 
Indefinite-lived
$ 130 
$ 105 
Definite-lived
28 
Total
130 
133 
Customer Relationships [Member]
 
 
Tradenames and Customer Relationships [Line Items]
 
 
Indefinite-lived
Definite-lived
229 
203 
Total
$ 229 
$ 203 
Summary of Significant Accounting Policies (Details 3)
12 Months Ended
Mar. 3, 2012
Y
Building [Member]
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives, minimum (in years)
25 
Estimated useful lives, maximum (in years)
50 
Leasehold Improvements [Member]
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives, minimum (in years)
Estimated useful lives, maximum (in years)
25 
Fixtures and equipment
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives, minimum (in years)
Estimated useful lives, maximum (in years)
20 
Assets Held under Capital Leases [Member]
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives, minimum (in years)
Estimated useful lives, maximum (in years)
20 
Summary of Significant Accounting Policies (Details 4) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Aug. 30, 2008
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Mar. 3, 2012
Domestic Segment [Member]
Feb. 26, 2011
Domestic Segment [Member]
Feb. 27, 2010
Domestic Segment [Member]
Mar. 3, 2012
International [Member]
Mar. 3, 2012
International [Member]
Feb. 26, 2011
International [Member]
Feb. 27, 2010
International [Member]
Goodwill [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Goodwill, balance at the beginning of the period
 
$ 2,454 
$ 2,452 
$ 2,203 
$ 422 
$ 434 
$ 434 
 
$ 2,032 
$ 2,018 
$ 1,769 
Purchase accounting adjustments
 
 
 
48 
 
 
 
 
 
48 
Acquisitions
1,491 
94 
 
94 
 
 
 
Impairments
 
(1,207)
 
(1,207)
(1,207)
 
Sale of business
 
(7)
(12)
 
(12)
 
 
(7)
 
Changes in foreign currency exchange rates
 
201 
 
201 
Other
 
 
 
 
 
 
 
 
Goodwill, balance at the end of the period
 
1,335 
2,454 
2,452 
516 
422 
434 
819 
819 
2,032 
2,018 
Indefinite-lived Intangible Assets [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Indefinite-lived tradenames, balance at the beginning of the period
 
105 
112 
104 
21 
32 
32 
 
84 
80 
72 
Acquisitions
 
 
 
 
 
Impairments
 
(10)
 
(10)
 
 
 
Sale of business
 
(5)
(1)
 
(3)
(1)
 
 
(2)
 
Changes in foreign currency exchange rates
 
 
Other
 
28 
 
 
 
 
 
28 
 
 
Indefinite-lived tradenames, balance at the end of the period
 
130 
105 
112 
19 
21 
32 
111 
111 
84 
80 
Goodwill, Impaired, Accumulated Impairment Loss [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Gross Carrying Amount
 
2,596 
2,519 
 
 
 
 
 
 
 
 
Cumulative Impairment
 
$ (1,261)
$ (65)
 
 
 
 
 
 
 
 
Summary of Significant Accounting Policies (Details 5) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross Carrying Amount
$ 453 
$ 456 
 
Accumulated Amortization
(224)
(225)
 
Finite-Lived Intangible Assets, Future Amortization Expense, Current and Five Succeeding Fiscal Years [Abstract]
 
 
 
Amortization expense
48 
82 
88 
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]
 
 
 
2013
40 
 
 
2014
40 
 
 
2015
40 
 
 
2016
40 
 
 
2017
22 
 
 
Thereafter
47 
 
 
Trade Names [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross Carrying Amount
73 
 
Accumulated Amortization
(45)
 
Customer Relationships [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross Carrying Amount
453 
383 
 
Accumulated Amortization
(224)
(180)
 
Lease rights [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross Carrying Amount
130 
131 
 
Accumulated Amortization
(73)
(57)
 
Amortization period (in years)
15 
 
 
Finite-Lived Intangible Assets, Future Amortization Expense, Current and Five Succeeding Fiscal Years [Abstract]
 
 
 
Amortization expense
13 
14 
18 
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]
 
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
 
2017
$ 7 
 
 
Summary of Significant Accounting Policies (Details 6)
12 Months Ended
Mar. 3, 2012
Investment Holdings [Line Items]
 
Interval of auction process
seven, 28 and 35 days 
Guaranteed or Insured Percentage, Low Range (as a percent)
95.00% 
Guaranteed or Insured Percentage, High Range (as a percent)
100.00% 
Profit Share Buy-Out (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Aug. 30, 2008
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Feb. 28, 2009
Best Buy Europe [Member]
Mar. 3, 2012
International [Member]
Mar. 3, 2012
International [Member]
Feb. 26, 2011
International [Member]
Feb. 28, 2009
Carphone Warehouse Group plc [Member]
Feb. 28, 2009
Carphone Warehouse Group plc [Member]
Best Buy Europe [Member]
Mar. 3, 2012
Best Buy Europe [Member]
Profit Share Buy-Out [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Percentage of controlling interest acquired
 
 
 
 
50.00% 
 
 
 
 
 
 
Percentage Noncontrolling Interests Held
 
 
 
 
 
 
 
 
50.00% 
 
 
Goodwill, Acquired During Period
$ 1,491 
$ 94 
$ 5 
 
 
 
$ 0 
$ 5 
 
 
 
Percent of after-tax income arising from the profit share agreement
 
 
 
 
 
 
 
 
 
50.00% 
 
Profit share agreement, buy-out price
 
 
 
 
 
 
 
 
 
 
1,303 
Goodwill impairment
 
$ 1,207 
$ 0 
$ 0 
 
$ 1,207 
$ 1,207 
$ 0 
 
 
 
Reporting period lag for consolidation of financial results (in months)
 
2 months 
 
 
 
 
 
 
 
 
 
Impairment of goodwill, discount rate (as a percent)
 
9.00% 
 
 
 
 
 
 
 
 
 
Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 3, 2012
Nov. 26, 2011
Aug. 27, 2011
May 28, 2011
Feb. 26, 2011
Nov. 27, 2010
Aug. 28, 2010
May 29, 2010
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 411 
$ 525 
$ 451 
Restructuring charges
 
 
 
 
 
 
 
 
229 
75 
Loss from discontinued operations before income tax benefit
 
 
 
 
 
 
 
 
(406)
(260)
(134)
Income tax benefit
 
 
 
 
 
 
 
 
89 
57 
33 
Gain on disposal of discontinued operations
 
 
 
 
 
 
 
 
Income tax benefit on sale
 
 
 
 
 
 
 
 
Net loss from discontinued operations including noncontrolling interests
(108)
(127)
(37)
(36)
(104)
(40)
(17)
(27)
(308)
(188)
(101)
Net loss from discountinued operations attributable to noncontrolling interests
 
 
 
 
 
 
 
 
134 
38 
19 
Net loss from discontinued operations
 
 
 
 
 
 
 
 
(174)
(150)
(82)
Domestic [Member] |
Speakeasy [Member]
 
 
 
 
 
 
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Gain on disposal of discontinued operations
 
 
 
 
 
 
 
 
 
 
International [Member] |
Best Buy China [Member]
 
 
 
 
 
 
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Number of stores closed
 
 
 
 
 
 
 
 
 
 
International [Member] |
Best Buy Turkey [Member]
 
 
 
 
 
 
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Gain on disposal of discontinued operations
 
 
 
 
 
 
 
 
 
 
Number of stores closed
 
 
 
 
 
 
 
 
 
 
International [Member] |
Best Buy U.K. [Member]
 
 
 
 
 
 
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Number of stores closed
11 
 
 
 
 
 
 
 
 
 
 
International [Member] |
Belgium [Member]
 
 
 
 
 
 
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Gain on disposal of discontinued operations
 
 
 
 
 
 
 
 
$ 5 
 
 
Number of stores sold
82 
 
 
 
 
 
 
 
 
 
 
Aquisitions (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 1 Months Ended 1 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Dec. 31, 2011
mindSHIFT Technologies [Member]
Dec. 28, 2011
mindSHIFT Technologies [Member]
Dec. 31, 2011
Customer Relationships [Member]
Y
Business Acquisition [Line Items]
 
 
 
 
 
 
Percentage of controlling interest acquired
 
 
 
 
100.00% 
 
Business acquisition purchase price
 
 
 
 
$ 175 
 
Business acquisition purchase price net of cash acquired
174 
168 
 
 
Purchase price allocated to customer relationships
 
 
 
 
74 
 
Purchase price allocated to goodwill
 
 
 
 
91 
 
Purchase price allocated to working capital accounts
 
 
 
 
10 
 
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life
 
 
 
 
 
15 
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount
 
 
 
 
$ 0 
 
Investments (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended
Mar. 3, 2012
investments
Feb. 26, 2011
Feb. 27, 2010
Mar. 31, 2010
company
Mar. 3, 2012
Money Market Funds [Member]
Feb. 26, 2011
Money Market Funds [Member]
Mar. 3, 2012
U.S. Treasury bills [Member]
Feb. 26, 2011
U.S. Treasury bills [Member]
Mar. 3, 2012
Debt Securities (Auction-Rate Securities) [Member]
Feb. 26, 2011
Debt Securities (Auction-Rate Securities) [Member]
Mar. 3, 2012
Student loan bonds [Member]
Feb. 26, 2011
Student loan bonds [Member]
Mar. 3, 2012
Municipal revenue bonds [Member]
Feb. 26, 2011
Municipal revenue bonds [Member]
Nov. 26, 2011
Marketable Equity Securities [Member]
Mar. 3, 2012
Marketable Equity Securities [Member]
Feb. 26, 2011
Marketable Equity Securities [Member]
Nov. 26, 2011
Common stock of Talk Talk Telecom Group PLC [Member]
Mar. 3, 2012
Common stock of Talk Talk Telecom Group PLC [Member]
Feb. 26, 2011
Common stock of Talk Talk Telecom Group PLC [Member]
Nov. 26, 2011
Common stock of Carphone Warehouse Group plc [Member]
Mar. 3, 2012
Common stock of Carphone Warehouse Group plc [Member]
Feb. 26, 2011
Common stock of Carphone Warehouse Group plc [Member]
Mar. 3, 2012
Marketable Equity Securities, Other [Member]
Feb. 26, 2011
Marketable Equity Securities, Other [Member]
Mar. 3, 2012
Other Investments [Member]
Feb. 26, 2011
Other Investments [Member]
Mar. 3, 2012
Auction Rate Securities, Interval 1 [Member]
Mar. 3, 2012
Auction Rate Securities, Interval 2 [Member]
Mar. 3, 2012
Auction Rate Securities, Interval 3 [Member]
Schedule of Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total short-term investments
$ 0 
$ 22 
 
 
$ 0 
$ 2 
$ 0 
$ 20 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total equity and other investments
140 
328 
 
 
 
 
 
 
82 
110 
 
 
 
 
 
146 
 
62 
 
84 
55 
72 
 
 
 
Securities redeemed
27 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in portfolio (investments)
17 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments, Fair Value Disclosure
82 
110 
 
 
 
 
 
 
82 
 
80 
108 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Auction Rate Securities, Par Value
 
 
 
 
 
 
 
 
88 
115 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guaranteed or Insured Percentage, Low Range (as a percent)
95.00% 
 
 
 
 
 
 
 
 
 
95.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guaranteed or Insured Percentage, High Range (as a percent)
100.00% 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage Insured by Rated Bond Insurers (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Interest Rate Percentage (as a percent)
 
 
 
 
 
 
 
 
0.50% 
0.80% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of Portfolio With Credit Rating AAA/Aaa (as a percent)
 
 
 
 
 
 
 
 
88.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of Portfolio With Credit Rating AA/Aa (as a percent)
 
 
 
 
 
 
 
 
3.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of Portfolio With Credit Rating A/A (as a percent)
 
 
 
 
 
 
 
 
9.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interval of auction rate securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7 days 
28 days 
35 days 
Auction Rate Securities, Maturity Date Range, Start (in years)
 
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Auction Rate Securities, Maturity Date Range, End (in years)
 
 
 
 
 
 
 
 
30 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax unrealized gain (loss) in accumulated other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax
(3)
72 
 
 
 
 
 
 
(3)
(3)
 
 
 
 
 
75 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marketable Equity Security, Ownership Percentage as of Purchase Date (as a percent)
3.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of companies formed after CPW demerger
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage ownership of former CPW in Best Buy Europe, included in Carphone Warehouse holding company (as a percent)
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from Sale of Available-for-sale Securities, Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
112 
 
 
51 
 
 
61 
 
 
 
 
 
 
 
 
 
Gain on sale of investments
$ 55 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
$ 55 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
Mar. 3, 2012
Feb. 26, 2011
ASSETS
 
 
Short-term investments
$ 82 
$ 110 
Fair Value [Member] |
Cash and Cash Equivalents [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Cash and cash equivalents
272 
70 
Fair Value [Member] |
Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Short-term investments
 
Fair Value [Member] |
Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member] |
US Treasury Securities [Member]
 
 
ASSETS
 
 
Short-term investments
 
20 
Fair Value [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Foreign currency derivative instruments
Fair Value [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Restricted cash
119 
63 
Fair Value [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member] |
US Treasury Securities [Member]
 
 
ASSETS
 
 
Restricted cash
30 
105 
Fair Value [Member] |
Equity and Other Investments [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Auction rate securities
82 
110 
Marketable equity securities
146 
Fair Value [Member] |
Other Assets [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Marketable equity securities that fund deferred compensation
83 
83 
Fair Value [Member] |
Accrued Liabilities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
LIABILITIES
 
 
Foreign currency derivative instruments
Fair Value [Member] |
Long-term Liabilities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
LIABILITIES
 
 
Deferred compensation
62 
64 
Foreign currency derivative instruments
 
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Cash and Cash Equivalents [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Cash and cash equivalents
272 
70 
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Short-term investments
 
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member] |
US Treasury Securities [Member]
 
 
ASSETS
 
 
Short-term investments
 
20 
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Foreign currency derivative instruments
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Restricted cash
119 
63 
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member] |
US Treasury Securities [Member]
 
 
ASSETS
 
 
Restricted cash
30 
105 
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Equity and Other Investments [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Auction rate securities
Marketable equity securities
146 
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Other Assets [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Marketable equity securities that fund deferred compensation
83 
83 
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Accrued Liabilities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
LIABILITIES
 
 
Foreign currency derivative instruments
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] |
Long-term Liabilities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
LIABILITIES
 
 
Deferred compensation
62 
64 
Foreign currency derivative instruments
 
Significant Other Observable Inputs (Level 2) [Member] |
Cash and Cash Equivalents [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Cash and cash equivalents
Significant Other Observable Inputs (Level 2) [Member] |
Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Short-term investments
 
Significant Other Observable Inputs (Level 2) [Member] |
Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member] |
US Treasury Securities [Member]
 
 
ASSETS
 
 
Short-term investments
 
Significant Other Observable Inputs (Level 2) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Foreign currency derivative instruments
Significant Other Observable Inputs (Level 2) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Restricted cash
Significant Other Observable Inputs (Level 2) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member] |
US Treasury Securities [Member]
 
 
ASSETS
 
 
Restricted cash
Significant Other Observable Inputs (Level 2) [Member] |
Equity and Other Investments [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Auction rate securities
Marketable equity securities
Significant Other Observable Inputs (Level 2) [Member] |
Other Assets [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Marketable equity securities that fund deferred compensation
Significant Other Observable Inputs (Level 2) [Member] |
Accrued Liabilities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
LIABILITIES
 
 
Foreign currency derivative instruments
Significant Other Observable Inputs (Level 2) [Member] |
Long-term Liabilities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
LIABILITIES
 
 
Deferred compensation
Foreign currency derivative instruments
 
Significant Unobservable Inputs (Level 3) [Member] |
Cash and Cash Equivalents [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Cash and cash equivalents
Significant Unobservable Inputs (Level 3) [Member] |
Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Short-term investments
 
Significant Unobservable Inputs (Level 3) [Member] |
Short-term Investments [Member] |
Fair Value, Measurements, Recurring [Member] |
US Treasury Securities [Member]
 
 
ASSETS
 
 
Short-term investments
 
Significant Unobservable Inputs (Level 3) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Foreign currency derivative instruments
Significant Unobservable Inputs (Level 3) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member] |
Money Market Funds [Member]
 
 
ASSETS
 
 
Restricted cash
Significant Unobservable Inputs (Level 3) [Member] |
Other Current Assets [Member] |
Fair Value, Measurements, Recurring [Member] |
US Treasury Securities [Member]
 
 
ASSETS
 
 
Restricted cash
Significant Unobservable Inputs (Level 3) [Member] |
Equity and Other Investments [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Auction rate securities
82 
110 
Marketable equity securities
Significant Unobservable Inputs (Level 3) [Member] |
Other Assets [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
ASSETS
 
 
Marketable equity securities that fund deferred compensation
Significant Unobservable Inputs (Level 3) [Member] |
Accrued Liabilities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
LIABILITIES
 
 
Foreign currency derivative instruments
Significant Unobservable Inputs (Level 3) [Member] |
Long-term Liabilities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
LIABILITIES
 
 
Deferred compensation
Foreign currency derivative instruments
 
$ 0 
Fair Value Measurements (Details 2) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Student loan bonds [Member]
 
 
Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation.
 
 
Balance at the beginning of the period
$ 108 
$ 261 
Changes in unrealized losses included in other comprehensive income
(1)
(1)
Sales
(27)
(152)
Balance at the end of the period
80 
108 
Municipal revenue bonds [Member]
 
 
Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation.
 
 
Balance at the beginning of the period
19 
Changes in unrealized losses included in other comprehensive income
Sales
(18)
Balance at the end of the period
Auction preferred securities
 
 
Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation.
 
 
Balance at the beginning of the period
110 
280 
Changes in unrealized losses included in other comprehensive income
(1)
Sales
(27)
(170)
Balance at the end of the period
$ 82 
$ 110 
Fair Value Measurements (Details 3) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Goodwill impairment
$ 1,207 
$ 0 
$ 0 
Continuing Operations [Member] |
Fair Value, Measurements, Nonrecurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Property and equipment, impairments
32 
122 
 
Property and equipment, remaining net carrying value
49 
 
Total impairments
1,239 
122 
 
Total remaining net carrying value
49 
 
Discontinued Operations [Member] |
Fair Value, Measurements, Nonrecurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Property and equipment, impairments
111 
25 
 
Property and equipment, remaining net carrying value
 
Total impairments
114 
35 
 
Total remaining net carrying value
 
Discontinued Operations [Member] |
Trade Names [Member] |
Fair Value, Measurements, Nonrecurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Tradename, impairments
10 
 
Tradename, remaining net carrying value
 
Best Buy Europe [Member] |
Continuing Operations [Member] |
Fair Value, Measurements, Nonrecurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Goodwill impairment
1,207 
 
Goodwill, remaining net carrying value
$ 0 
$ 0 
 
Restructuring Charges (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 3 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 3 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended
Mar. 3, 2012
Nov. 26, 2011
Aug. 27, 2011
Feb. 26, 2011
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
May 30, 2009
Restructuring Program 2010 [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
Domestic [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
International [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
Termination benefits [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
Termination benefits [Member]
Domestic [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
Termination benefits [Member]
International [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
Facility closure and other costs [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Feb. 27, 2010
Restructuring Program 2010 [Member]
Facility closure and other costs [Member]
International [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Domestic [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Domestic [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Domestic [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Domestic [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Domestic [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Domestic [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Domestic [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
International [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
International [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
International [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
International [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
International [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
International [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Domestic [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Domestic [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
International [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
International [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Inventory write-downs [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Domestic [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Domestic [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
International [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
International [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Property and equipment write-downs [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Termination benefits [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Termination benefits [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
Domestic [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Termination benefits [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
Domestic [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Termination benefits [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
International [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Termination benefits [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
International [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Termination benefits [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Termination benefits [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
Domestic [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
International [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Intangible asset impairments [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
International [Member]
Continuing Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
International [Member]
Discontinued Operations [Member]
Feb. 26, 2011
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2011 [Member]
Facility closure and other costs [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Domestic [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
International [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Inventory write-downs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Inventory write-downs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Inventory write-downs [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Property and equipment write-downs [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Property and equipment write-downs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Property and equipment write-downs [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Property and equipment write-downs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Property and equipment write-downs [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Property and equipment write-downs [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Termination benefits [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Termination benefits [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Termination benefits [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Termination benefits [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Termination benefits [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Termination benefits [Member]
International [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Facility closure and other costs [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Facility closure and other costs [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Facility closure and other costs [Member]
Domestic [Member]
Discontinued Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Facility closure and other costs [Member]
International [Member]
Continuing Operations [Member]
Mar. 3, 2012
Restructuring Program 2012 [Member]
Facility closure and other costs [Member]
International [Member]
Discontinued Operations [Member]
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring charges
$ 35 
$ 22 
$ 1 
$ 147 
$ 288 
$ 222 
$ 52 
$ 52 
$ 52 
$ 25 
$ 27 
$ 51 
$ 25 
$ 26 
$ 1 
$ 0 
$ 1 
$ 222 
$ 44 
$ 222 
 
$ 20 
$ 147 
 
$ 24 
$ 75 
 
$ 50 
$ 45 
$ 50 
 
$ 20 
$ 40 
 
$ 25 
$ 10 
 
$ 172 
$ (1)
$ 172 
 
$ 0 
$ 107 
 
$ (1)
$ 65 
 
$ 19 
$ 9 
 
$ 0 
$ 15 
 
$ 19 
$ 9 
 
$ 0 
$ 0 
 
$ 0 
$ 0 
 
$ 0 
$ 15 
 
$ 0 
$ 122 
 
$ 15 
$ 25 
 
$ 0 
$ 15 
 
$ 15 
$ 0 
 
$ 0 
$ 107 
 
$ 0 
$ 25 
 
$ (3)
$ 16 
 
$ 11 
$ 12 
 
$ (3)
$ 16 
 
$ 4 
$ 0 
 
$ 0 
$ 0 
 
$ 7 
$ 12 
 
$ 3 
$ 10 
 
$ 3 
$ 10 
 
$ 0 
$ 0 
 
$ 4 
$ 0 
 
$ (5)
$ 13 
 
$ 4 
$ 0 
 
$ 3 
$ 0 
 
$ 0 
$ 0 
 
$ (8)
$ 13 
 
$ 243 
$ 38 
$ 205 
$ 23 
$ 23 
$ 0 
$ 220 
$ 15 
$ 205 
$ 11 
$ 0 
$ 11 
$ 32 
$ 96 
$ 17 
$ 0 
$ 15 
$ 96 
$ 1 
$ 16 
$ 1 
$ 0 
$ 0 
$ 16 
$ 5 
$ 82 
$ 5 
$ 0 
$ 0 
$ 82 
Cumulative amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 266 
 
 
$ 167 
 
 
$ 99 
 
 
 
$ 95 
 
 
$ 60 
 
 
$ 35 
 
 
 
$ 171 
 
 
$ 107 
 
 
$ 64 
 
 
$ 28 
 
 
$ 15 
 
 
$ 28 
 
 
$ 0 
 
 
$ 0 
 
 
$ 15 
 
 
$ 122 
 
 
$ 40 
 
 
$ 15 
 
 
$ 15 
 
 
$ 107 
 
 
$ 25 
 
 
$ 13 
 
 
$ 23 
 
 
$ 13 
 
 
$ 4 
 
 
$ 0 
 
 
$ 19 
 
 
$ 13 
 
 
$ 13 
 
 
$ 0 
 
 
$ 4 
 
 
$ 8 
 
 
$ 4 
 
 
$ 3 
 
 
$ 0 
 
 
$ 5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring Charges (Details 2) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
May 28, 2011
Mar. 3, 2012
Feb. 26, 2011
Restructuring Program 2010 [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
 
 
$ 9 
Charges
 
 
Cash payments
 
 
(9)
Restructuring reserve, balance at the end of the period
 
 
Restructuring Program 2010 [Member] |
Facility closure and other costs [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
 
 
Charges
 
 
Cash payments
 
 
(1)
Restructuring reserve, balance at the end of the period
 
 
Restructuring Program 2010 [Member] |
Termination benefits [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
 
 
Charges
 
 
Cash payments
 
 
(8)
Restructuring reserve, balance at the end of the period
 
 
Restructuring Program 2011 [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
41 
41 
Charges
 
17 
41 
Cash payments
 
(47)
Adjustments
 
 
Restructuring reserve, balance at the end of the period
 
12 
41 
Restructuring Program 2011 [Member] |
Facility closure and other costs [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
13 
13 
Charges
 
13 
Cash payments
 
(14)
Adjustments
10 
 
Restructuring reserve, balance at the end of the period
 
13 
Restructuring Program 2011 [Member] |
Termination benefits [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
28 
28 
Charges
 
11 
28 
Cash payments
 
(33)
Adjustments
 
(3)
 
Restructuring reserve, balance at the end of the period
 
28 
Restructuring Program 2012 [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
 
Charges
 
104 
 
Cash payments
 
 
Changes in foreign currency exchange rates
 
(2)
 
Restructuring reserve, balance at the end of the period
 
102 
 
Restructuring Program 2012 [Member] |
Facility closure and other costs [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
 
Charges
 
87 
 
Cash payments
 
 
Changes in foreign currency exchange rates
 
(2)
 
Restructuring reserve, balance at the end of the period
 
85 
 
Restructuring Program 2012 [Member] |
Termination benefits [Member]
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
Restructuring reserve, balance at the beginning of the period
 
Charges
 
17 
 
Cash payments
 
 
Changes in foreign currency exchange rates
 
 
Restructuring reserve, balance at the end of the period
 
$ 17 
 
Debt (Details)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended
Mar. 3, 2012
USD ($)
Feb. 26, 2011
USD ($)
Mar. 3, 2012
Us revolving credit facility [Member]
USD ($)
Mar. 3, 2012
U.S. revolving credit facility - 364-Day [Member]
USD ($)
Oct. 31, 2011
U.S. revolving credit facility - 364-Day [Member]
USD ($)
Feb. 26, 2011
U.S. revolving credit facility - 364-Day [Member]
USD ($)
Mar. 3, 2012
U.S. revolving credit facility - Five-Year [Member]
USD ($)
Oct. 31, 2011
U.S. revolving credit facility - Five-Year [Member]
USD ($)
Feb. 26, 2011
U.S. revolving credit facility - Five-Year [Member]
USD ($)
Mar. 3, 2012
JPMorgan revolving credit facility [Member]
USD ($)
Mar. 3, 2012
Europe revolving credit facility [Member]
USD ($)
Mar. 3, 2012
Europe revolving credit facility [Member]
GBP (£)
Feb. 26, 2011
Europe revolving credit facility [Member]
USD ($)
Mar. 3, 2012
Europe receivables financing facility [Member]
USD ($)
Mar. 3, 2012
Europe receivables financing facility [Member]
GBP (£)
Feb. 26, 2011
Europe receivables financing facility [Member]
USD ($)
Mar. 3, 2012
Old Europe Revolving Credit Facility [Member]
USD ($)
Mar. 3, 2012
Old Europe Revolving Credit Facility [Member]
GBP (£)
Feb. 26, 2011
Old Europe Revolving Credit Facility [Member]
USD ($)
Mar. 3, 2012
Canada revolving demand facility [Member]
USD ($)
Mar. 3, 2012
Canada revolving demand facility [Member]
CAD ($)
Feb. 26, 2011
Canada revolving demand facility [Member]
USD ($)
Mar. 3, 2012
China revolving demand facilities [Member]
USD ($)
Feb. 26, 2011
China revolving demand facilities [Member]
USD ($)
Short-term Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-term debt
$ 480 
$ 557 
 
$ 0 
 
$ 0 
$ 0 
 
$ 0 
 
$ 480 
 
$ 0 
$ 0 
 
$ 455 
$ 0 
 
$ 98 
$ 0 
 
$ 0 
$ 0 
$ 4 
Weighted-average interest rate (as a percent)
 
 
 
   
 
   
   
 
   
 
2.40% 
2.40% 
   
   
   
3.70% 
   
   
3.60% 
   
   
   
   
4.80% 
Maximum month-end outstanding during the year
480 
690 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average amount outstanding during the year
337 
383 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average interest rate at year-end
2.40% 
3.70% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, current borrowing capacity
 
 
2,500 
 
1,000 
 
 
1,500 
 
2,300 
618 
400 
 
 
350 
 
 
125 
 
 
 
 
 
 
Line of credit facility, amount outstanding
 
 
 
 
 
 
 
 
 
480 
310 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Remaining Borrowing Capacity
 
 
2,453 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, maximum borrowing capacity
 
 
3,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
51 
 
 
126 
 
Additional seasonal facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50 
 
 
 
Line of credit facility, letter of credit sublimit
 
 
$ 300 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, basis spread on federal funds rate (as a percent)
 
 
0.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, basis spread on LIBOR (as a percent)
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, lower range on ABR (as a percent)
 
 
 
0.00% 
 
 
0.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, higher range on ABR (as a percent)
 
 
 
0.525% 
 
 
0.475% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, low end of the range, utilization fee (as a percent)
 
 
 
 
 
 
 
 
 
 
0.00% 
0.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, high end of the range, utilization fee (as a percent)
 
 
 
 
 
 
 
 
 
 
0.50% 
0.50% 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR margin, low end of the range (as a percent)
 
 
 
0.925% 
 
 
0.875% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR margin, high end of the range (as a percent)
 
 
 
1.525% 
 
 
1.475% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, lower range on facility fee (as a percent)
 
 
 
0.075% 
 
 
0.125% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, higher range on facility fee (as a percent)
 
 
 
0.225% 
 
 
0.275% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, unused capacity, commitment fee percentage of applicable margin (as a percent)
 
 
 
 
 
 
 
 
 
 
40.00% 
40.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Initial commitment fee (as a percent)
 
 
 
 
 
 
 
 
 
 
0.75% 
0.75% 
 
 
 
 
 
 
 
 
 
 
 
 
Debt (Details 2) (USD $)
In Millions, unless otherwise specified
1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Jun. 30, 2008
2013 Notes [Member]
Mar. 3, 2012
2013 Notes [Member]
Feb. 26, 2011
2013 Notes [Member]
Mar. 31, 2011
2016 and 2021 Notes [Member]
Mar. 3, 2012
2016 and 2021 Notes [Member]
Mar. 3, 2012
2016 Notes [Member]
Mar. 31, 2011
2016 Notes [Member]
Feb. 26, 2011
2016 Notes [Member]
Mar. 3, 2012
2021 Notes [Member]
Mar. 31, 2011
2021 Notes [Member]
Feb. 26, 2011
2021 Notes [Member]
Mar. 3, 2012
Convertible debentures [Member]
Nov. 26, 2011
Convertible debentures [Member]
Feb. 26, 2011
Convertible debentures [Member]
Jan. 31, 2002
Convertible debentures [Member]
Mar. 3, 2012
Financing Lease Obligations [Member]
Feb. 26, 2011
Financing Lease Obligations [Member]
Mar. 3, 2012
Capital Lease Obligations [Member]
Feb. 26, 2011
Capital Lease Obligations [Member]
Mar. 3, 2012
Other debt [Member]
Feb. 26, 2011
Other debt [Member]
Long-term Debt.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total long-term debt
$ 1,728 
$ 1,152 
 
$ 500 
$ 500 
 
 
$ 349 
 
$ 0 
$ 648 
 
$ 0 
$ 0 
 
$ 402 
$ 402 
$ 149 
$ 170 
$ 81 
$ 79 
$ 1 
$ 1 
Less: current portion
(43)
(441)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total long-term debt, less current portion
1,685 
711 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, fair value
1,756 
1,210 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument issued, principal amount
 
 
500 
 
 
 
 
 
350 
 
 
650 
 
 
 
 
 
 
 
 
 
 
 
Initial issuance discount and offering expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate (as a percent)
 
 
 
6.75% 
 
 
 
3.75% 
 
 
5.50% 
 
 
 
2.25% 
 
 
 
 
 
 
 
 
Underwriting discounts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net proceeds from the sale of the Notes
 
 
496 
 
 
990 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemption price, as percentage of principal amount of debt instrument (as a percent)
 
 
 
100.00% 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemption price upon control triggering event, percentage of principal amount (as a percent)
 
 
 
101.00% 
 
 
101.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Future maturities of long-term debt, including capitalized leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2012
40 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2013
542 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
40 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
32 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
369 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thereafter
$ 705 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Instruments (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Feb. 26, 2011
Mar. 3, 2012
Feb. 26, 2011
Gross fair values for derivative instruments
 
 
 
Gross fair values for derivative assets
$ 3 
$ 1 
$ 3 
Gross fair values for derivative liabilities
(4)
(2)
(4)
Pre-tax gain (loss) recognized in OCI
 
17 
Gain (loss) reclassified from accumulated OCI to earnings (effective portion)
 
12 
Cash flow hedges gain (loss) reclassified from accumulated OCI to earnings (effective portion)
 
 
Derivative Instruments Not Designated as Hedging Instruments, Contract Term 1
 
6 months 
 
Cash flow hedge contract term
 
P2Y 
 
Percent pre-tax gain (loss) recognized in OCI reclassified to noncontrolling interest (as a percent)
 
50.00% 
 
Derivatives designated as cash flow hedging instruments
264 
264 
Derivatives not designated as hedging instruments
493 
238 
493 
Total notional amount of derivatives
757 
238 
757 
Operating Expense [Member]
 
 
 
Gross fair values for derivative instruments
 
 
 
No hedge designation (foreign exchange forward contracts)
 
13 
Foreign Exchange Forward [Member] |
Cash Flow Hedging [Member]
 
 
 
Gross fair values for derivative instruments
 
 
 
Pre-tax gain (loss) recognized in OCI
 
Gain (loss) reclassified from accumulated OCI to earnings (effective portion)
 
12 
Foreign Exchange Forward [Member] |
Derivatives designated as hedging instruments [Member]
 
 
 
Gross fair values for derivative instruments
 
 
 
Gross fair values for derivative assets
Gross fair values for derivative liabilities
(2)
(2)
Foreign Exchange Forward [Member] |
No hedge designation [Member]
 
 
 
Gross fair values for derivative instruments
 
 
 
Gross fair values for derivative assets
Gross fair values for derivative liabilities
(2)
(2)
(2)
Foreign Exchange Swap Contracts [Member] |
Net Investment Hedging [Member]
 
 
 
Gross fair values for derivative instruments
 
 
 
Pre-tax gain (loss) recognized in OCI
 
Gain (loss) reclassified from accumulated OCI to earnings (effective portion)
 
$ 0 
$ 0 
Shareholders' Equity (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Y
Feb. 26, 2011
Y
Feb. 27, 2010
Y
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized under the Omnibus Plan (in shares)
64,500,000 
 
 
Number of shares available for future grants under the Omnibus Plan (in shares)
22,700,000 
 
 
Stock-based compensataion expense (in dollars)
$ 120 
$ 121 
$ 118 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
Outstanding at the beginning of the period (in shares)
35,587,000 
 
 
Granted (in shares)
3,973,000 
 
 
Exercised (in shares)
(1,126,000)
 
 
Forfeited/Canceled (in shares)
(2,633,000)
 
 
Outstanding at the end of the period (in shares)
35,801,000 
35,587,000 
 
Vested or expected to vest at the end of the period (in shares)
34,099,000 
 
 
Exercisable at the end of the period (in shares)
24,403,000 
 
 
Weighted Average Exercise Price [Roll Forward]
 
 
 
Outstanding at the beginning of the period (in dollars per share)
$ 38.97 
 
 
Granted (in dollars per share)
$ 27.50 
 
 
Exercised (in dollars per share)
$ 24.61 
 
 
Forfeited/Canceled (in dollars per share)
$ 39.87 
 
 
Outstanding at the end of the period (in dollars per share)
$ 38.08 
$ 38.97 
 
Vested or expected to vest at the end of the period (in dollars per share)
$ 38.36 
 
 
Exercisable at the end of the period (in dollars per share)
$ 40.21 
 
 
Weighted Average Remaining Contractual Term, Years [Abstract]
 
 
 
Outstanding at the end of the period (in years)
5.9 
 
 
Vested or expected to vest at the end of the period (in years)
5.8 
 
 
Exercisable at the end of the period (in years)
4.8 
 
 
Aggregate Intrinsic Value [Abstract]
 
 
 
Outstanding at the end of the period (in dollars)
 
 
Vested or expected to vest at the end of the period (in dollars)
 
 
Exercisable at the end of the period (in dollars)
 
 
Weighted-average grant-date fair value of stock options granted (in dollars per share)
$ 7.94 
$ 11.97 
$ 12.69 
Aggregate intrinsic value of stock options exercised (in dollars)
52 
28 
Net cash proceeds from the exercise of stock options (in dollars)
27 
134 
96 
Actual income tax benefit realized from stock option exercises (in dollars)
19 
10 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
 
 
 
Expected dividend yield (as a percent)
2.30% 
1.50% 
1.60% 
Expected stock price volatility (as a percent)
37.00% 
36.00% 
42.00% 
Expected life of stock options (in years)
6.2 
6.1 
6.1 
Employee Stock Option [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Term of stock options (in years)
10 years 
 
 
Vesting period (in years)
4 years 
 
 
Stock-based compensataion expense (in dollars)
76 
90 
85 
Aggregate Intrinsic Value [Abstract]
 
 
 
Unrecognized compensation (in dollars)
83 
 
 
Weighted-average period over which compensation expense is expected to be recognized (in years)
1.3 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
 
 
 
Risk-free interest rate low end of the range (as a percent)
0.10% 
0.20% 
0.20% 
Risk-free interest rate high end of the range (as a percent)
3.60% 
3.90% 
3.80% 
Market-based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensataion expense (in dollars)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
 
 
Outstanding at the beginning of the period (in shares)
193,000 
 
 
Granted (in shares)
 
 
Vested (in shares)
 
 
Forfeited/Canceled (in shares)
(193,000)
 
 
Outstanding at the end of the period (in shares)
193,000 
 
Weighted Average Fair Value Per Share [Roll Forward]
 
 
 
Outstanding at the beginning of the period (in dollars per share)
$ 52.19 
 
 
Granted (in dollars per share)
$ 0 
 
 
Vested (in dollars per share)
$ 0 
 
 
Forfeited/Canceled (in dollars per share)
$ 52.19 
 
 
Outstanding at the end of the period (in dollars per share)
$ 0 
$ 52.19 
 
Performance-based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensataion expense (in dollars)
(1)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
 
 
Outstanding at the beginning of the period (in shares)
2,179,000 
 
 
Granted (in shares)
 
 
Vested (in shares)
(2,000)
 
 
Forfeited/Canceled (in shares)
(1,265,000)
 
 
Outstanding at the end of the period (in shares)
912,000 
2,179,000 
 
Weighted Average Fair Value Per Share [Roll Forward]
 
 
 
Outstanding at the beginning of the period (in dollars per share)
$ 41.64 
 
 
Granted (in dollars per share)
$ 0.00 
 
 
Vested (in dollars per share)
$ 44.94 
 
 
Forfeited/Canceled (in dollars per share)
$ 41.96 
 
 
Outstanding at the end of the period (in dollars per share)
$ 41.20 
$ 41.64 
 
Time-based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Minimum term of vesting period, options vesting in their entirety (in years)
three-year 
 
 
Maximum term of vesting period, options vesting in their entirety (in years)
four-year 
 
 
Vesting percentage per increment, options vesting in annual increments
25% of the award vests on the date of grant and 25% vests on each of the three anniversary dates thereafter 
 
 
Annual vesting percentage, options vesting in annual increments
25.00% 
 
 
Stock-based compensataion expense (in dollars)
33 
16 
10 
Aggregate Intrinsic Value [Abstract]
 
 
 
Unrecognized compensation (in dollars)
80 
 
 
Weighted-average period over which compensation expense is expected to be recognized (in years)
2.6 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
 
 
Outstanding at the beginning of the period (in shares)
2,171,000 
 
 
Granted (in shares)
2,647,000 
 
 
Vested (in shares)
(665,000)
 
 
Forfeited/Canceled (in shares)
(229,000)
 
 
Outstanding at the end of the period (in shares)
3,924,000 
2,171,000 
 
Weighted Average Fair Value Per Share [Roll Forward]
 
 
 
Outstanding at the beginning of the period (in dollars per share)
$ 36.60 
 
 
Granted (in dollars per share)
$ 25.65 
 
 
Vested (in dollars per share)
$ 35.01 
 
 
Forfeited/Canceled (in dollars per share)
$ 33.55 
 
 
Outstanding at the end of the period (in dollars per share)
$ 29.63 
$ 36.60 
 
Employee Stock [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Issuance of common stock under employee stock purchase plan (in shares)
1,400,000 
1,300,000 
1,200,000 
Discounted purchase rate on the market price of the stock (as a percent)
15.00% 
 
 
Stock-based compensataion expense (in dollars)
11 
12 
14 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
 
 
 
Risk-free interest rate (as a percent)
0.10% 
0.20% 
0.30% 
Expected dividend yield (as a percent)
2.40% 
1.40% 
1.50% 
Expected stock price volatility (as a percent)
38.00% 
29.00% 
53.00% 
Expected life of employee stock purchase plan options (in months)
Weighted Average Fair Value Per Share [Roll Forward]
 
 
 
Weighted-average fair value of shares purchased (in dollars per share)
$ 6.76 
$ 9.54 
$ 11.34 
Amount accumulated by plan participants to purchase common stock (in dollars)
$ 11 
$ 19 
 
Shareholders' Equity (Details 2) (USD $)
In Millions, except Share data, unless otherwise specified
1 Months Ended 3 Months Ended 12 Months Ended
Jun. 30, 2011
Jun. 30, 2007
Mar. 3, 2012
Nov. 26, 2011
Aug. 27, 2011
May 28, 2011
Feb. 26, 2011
Nov. 27, 2010
Aug. 28, 2010
May 29, 2010
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Outstanding Options to Purchase Common Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable stock options (in shares)
 
 
24,403,000 
 
 
 
 
 
 
 
24,403,000 
 
 
Percentage of exercisable stock options (as a percent)
 
 
100.00% 
 
 
 
 
 
 
 
100.00% 
 
 
Exercisable stock options, weighted-average price (in dollars per share)
 
 
$ 40.21 
 
 
 
 
 
 
 
$ 40.21 
 
 
Unexercisable stock options (in shares)
 
 
11,400,000 
 
 
 
 
 
 
 
11,400,000 
 
 
Percentage of unexercisable stock options (as a percent)
 
 
100.00% 
 
 
 
 
 
 
 
100.00% 
 
 
Unexercisable stock options, weighted-average price (in dollars per share)
 
 
$ 27.30 
 
 
 
 
 
 
 
$ 27.30 
 
 
Total outstanding stock options (in shares)
 
 
35,801,000 
 
 
 
35,587,000 
 
 
 
35,801,000 
35,587,000 
 
Percentage of outstanding stock options (as a percent)
 
 
100.00% 
 
 
 
 
 
 
 
100.00% 
 
 
Outstanding stock options, weighted-average price (in dollars per share)
 
 
$ 38.08 
 
 
 
$ 38.97 
 
 
 
$ 38.08 
$ 38.97 
 
Numerator [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest
 
 
$ (324)
$ 258 
$ 197 
$ 199 
$ 792 
$ 280 
$ 274 
$ 208 
$ 330 
$ 1,554 
$ 1,495 
Net (earnings) from continuing operations attributable to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
(1,387)
(127)
(96)
Net (loss) earnings from continuing operations attributable to Best Buy Co., Inc., basic
 
 
 
 
 
 
 
 
 
 
(1,057)
1,427 
1,399 
Adjustment for assumed dilution:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on convertible debentures due in 2022, net of tax
 
 
 
 
 
 
 
 
 
 
Net earnings from continuing operations attributable to Best Buy Co., Inc., diluted
 
 
 
 
 
 
 
 
 
 
(1,057)
1,433 
1,405 
Denominator [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding (in shares)
 
 
 
 
 
 
 
 
 
 
366,300,000 
406,100,000 
416,800,000 
Effect of Potentially Dilutive Securities [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares from assumed conversion of convertible debentures (in shares)
 
 
 
 
 
 
 
 
 
 
8,800,000 
8,800,000 
Stock options and other (in shares)
 
 
 
 
 
 
 
 
 
 
1,600,000 
1,900,000 
Weighted-average common shares outstanding, assuming dilution (in shares)
 
 
 
 
 
 
 
 
 
 
366,300,000 
416,500,000 
427,500,000 
Earnings per share attributable to Best Buy Co., Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
 
 
 
 
 
 
 
 
 
 
$ (2.89)
$ 3.51 
$ 3.36 
Diluted (in dollars per share)
 
 
$ (4.73)
$ 0.62 
$ 0.52 
$ 0.41 
$ 1.84 
$ 0.61 
$ 0.62 
$ 0.41 
$ (2.89)
$ 3.44 
$ 3.29 
Share repurchases authorized (in shares)
5,000 
5,500 
 
 
 
 
 
 
 
 
 
 
 
Open Market Repurchases [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive Income (Loss) (in dollars)
 
 
 
 
 
 
 
 
 
 
(1,314)
1,410 
1,674 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation
 
 
93 
 
 
 
102 
 
 
 
93 
102 
 
Unrealized gains (losses) on available-for-sale investments
 
 
(3)
 
 
 
72 
 
 
 
(3)
72 
 
Unrealized losses on derivative instruments (cash flow hedges)
 
 
 
 
 
(1)
 
 
 
(1)
 
Total
 
 
90 
 
 
 
173 
 
 
 
90 
173 
 
In-the-money [Member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding Options to Purchase Common Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable stock options (in shares)
 
 
3,600,000 
 
 
 
 
 
 
 
3,600,000 
 
 
Percentage of exercisable stock options (as a percent)
 
 
15.00% 
 
 
 
 
 
 
 
15.00% 
 
 
Exercisable stock options, weighted-average price (in dollars per share)
 
 
$ 25.28 
 
 
 
 
 
 
 
$ 25.28 
 
 
Unexercisable stock options (in shares)
 
 
2,800,000 
 
 
 
 
 
 
 
2,800,000 
 
 
Percentage of unexercisable stock options (as a percent)
 
 
25.00% 
 
 
 
 
 
 
 
25.00% 
 
 
Unexercisable stock options, weighted-average price (in dollars per share)
 
 
$ 25.07 
 
 
 
 
 
 
 
$ 25.07 
 
 
Total outstanding stock options (in shares)
 
 
6,400,000 
 
 
 
 
 
 
 
6,400,000 
 
 
Percentage of outstanding stock options (as a percent)
 
 
18.00% 
 
 
 
 
 
 
 
18.00% 
 
 
Outstanding stock options, weighted-average price (in dollars per share)
 
 
$ 25.19 
 
 
 
 
 
 
 
$ 25.19 
 
 
Out-of-the-money [Member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding Options to Purchase Common Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable stock options (in shares)
 
 
20,800,000 
 
 
 
 
 
 
 
20,800,000 
 
 
Percentage of exercisable stock options (as a percent)
 
 
85.00% 
 
 
 
 
 
 
 
85.00% 
 
 
Exercisable stock options, weighted-average price (in dollars per share)
 
 
$ 42.81 
 
 
 
 
 
 
 
$ 42.81 
 
 
Unexercisable stock options (in shares)
 
 
8,600,000 
 
 
 
 
 
 
 
8,600,000 
 
 
Percentage of unexercisable stock options (as a percent)
 
 
75.00% 
 
 
 
 
 
 
 
75.00% 
 
 
Unexercisable stock options, weighted-average price (in dollars per share)
 
 
$ 36.30 
 
 
 
 
 
 
 
$ 36.30 
 
 
Total outstanding stock options (in shares)
 
 
29,400,000 
 
 
 
 
 
 
 
29,400,000 
 
 
Percentage of outstanding stock options (as a percent)
 
 
82.00% 
 
 
 
 
 
 
 
82.00% 
 
 
Outstanding stock options, weighted-average price (in dollars per share)
 
 
$ 40.91 
 
 
 
 
 
 
 
$ 40.91 
 
 
June 2011 share repurchase program [Member}
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding Options to Purchase Common Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Amounting remaining for additional share repurchases
 
 
 
 
 
 
 
 
 
 
4,111 
 
 
Open Market Repurchases [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total number of shares repurchased
 
 
 
 
 
 
 
 
 
 
34,500,000 
Total cost of shares repurchased
 
 
 
 
 
 
 
 
 
 
889 
June 2007 share repurchase program [Member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Open Market Repurchases [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total number of shares repurchased
 
 
 
 
 
 
 
 
 
 
20,100,000 
32,600,000 
Total cost of shares repurchased
 
 
 
 
 
 
 
 
 
 
$ 611 
$ 1,193 
$ 0 
Leases (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Operating Leases, Rent Expense, Net [Abstract]
 
 
 
Minimum rentals
$ 1,192 
$ 1,141 
$ 1,111 
Contingent rentals
Total rent expense
1,194 
1,143 
1,113 
Less: sublease income
(19)
(19)
(20)
Net rent expense
1,175 
1,124 
1,093 
Future minimum lease payments under capital leases
 
 
 
2013
21 
 
 
2014
21 
 
 
2015
18 
 
 
2016
10 
 
 
2017
 
 
Thereafter
23 
 
 
Subtotal
96 
 
 
Less: imputed interest
(15)
 
 
Present value
81 
 
 
Future minimum lease payments under financing leases
 
 
 
2013
32 
 
 
2014
31 
 
 
2015
29 
 
 
2016
25 
 
 
2017
20 
 
 
Thereafter
43 
 
 
Subtotal
180 
 
 
Less: imputed interest
(31)
 
 
Present value
149 
 
 
Future minimum lease payments under operating leases
 
 
 
2013
1,216 
 
 
2014
1,154 
 
 
2015
1,063 
 
 
2016
940 
 
 
2017
792 
 
 
Thereafter
2,352 
 
 
Subtotal
7,517 
 
 
Minimum sublease rent income excluded from minimum lease payments
121 
 
 
Information system and real estate capital leases, agreements' amount
$ 18 
$ 52 
 
Benefit Plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
 
 
 
Maximum percentage of a participant's elligible compensation that a participant may contribute annually to the plan (as a percent)
50.00% 
 
 
Percentage of participating employees contribution, matched 100% (as a percent)
3.00% 
 
 
Percentage of participating employees contribution, matched 50% (as a percent)
2.00% 
 
 
Percentage of matching contribution made by company, of first 3% of participating employees contributions (as a percent)
100.00% 
 
 
Percentage of matching contribution made by company, of next 2% of participating employees' contributions (as a percent)
50.00% 
 
 
Employer contribution
$ 69 
$ 69 
$ 62 
Non-qualified, unfunded deferred compensation plan [Member]
 
 
 
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
 
 
 
Deferred compensation liability
62 
64 
 
Deferred compensation plan assets
$ 83 
$ 83 
 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Reconciliation of the federal statutory income tax rate to income tax expense
 
 
 
Federal income tax at the statutory rate
$ 365 
$ 816 
$ 815 
State income taxes, net of federal benefit
45 
46 
68 
Benefit from foreign operations
(96)
(86)
(54)
Non-taxable interest income
(1)
Other
Goodwill Impairment
395 
Income tax expense
$ 709 
$ 779 
$ 835 
Effective income tax rate
68.00% 
33.40% 
35.90% 
Income Taxes (Details 2) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates
 
 
 
United States
$ 1,537 
$ 1,739 
$ 1,944 
Outside the United States
(494)
592 
385 
Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates
1,043 
2,331 
2,329 
Current:
 
 
 
Federal
447 
735 
686 
State
61 
73 
116 
Foreign
173 
105 
63 
Current income tax expense
681 
913 
865 
Deferred:
 
 
 
Federal
94 
(113)
(13)
State
(2)
(11)
Foreign
(67)
(19)
(6)
Deferred income tax expense
28 
(134)
(30)
Income tax expense
$ 709 
$ 779 
$ 835 
Income Taxes (Details 3) (USD $)
In Millions, unless otherwise specified
Mar. 3, 2012
Feb. 26, 2011
Components of deferred tax aassets and liabilities
 
 
Accrued property expenses
$ 146 
$ 154 
Other accrued expenses
108 
122 
Deferred revenue
128 
141 
Compensation and benefits
103 
86 
Stock-based compensation
157 
137 
Loss and credit carryforwards
310 
303 
Other
121 
125 
Total deferred tax assets
1,073 
1,068 
Valuation allowance
(204)
(212)
Total deferred tax assets after valuation allowance
869 
856 
Property and equipment
(376)
(316)
Convertible debt
(79)
Goodwill and intangibles
(118)
(123)
Inventory
(85)
(25)
Other
(27)
(22)
Total deferred tax liabilities
(606)
(565)
Net deferred tax assets
263 
291 
Other current assets
226 
261 
Other assets
53 
98 
Other long-term liabilities
(16)
(68)
Net deferred tax assets
$ 263 
$ 291 
Income Taxes (Details 4) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Income Tax Disclosure [Abstract]
 
Net Operating loss carryforwards from international operations
$ 223 
Net Operating loss carryforwards from international operations expire in various years
99 
U.S. federal net operating loss carryforwards which expire between 2021 and 2030
29 
U.S. federal foreign tax credits which expire between 2015 and 2022
58 
Valuation allowance, related to the international net operating loss carryforwards and other international deferred tax assets
204 
Decrease in the valuation allowance, related to the international net operating loss carryforwards and other international deferred tax assets
Unremitted earnings of foreign operations considered indefinitely reinvested
$ 2,232 
Income Taxes (Details 5) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Reconciliation of changes in unrecognized tax benefits
 
 
Balance at the beginning of the period
$ 359 
$ 393 
Gross increases related to prior period tax positions
69 
36 
Gross decreases related to prior period tax positions
(35)
(90)
Gross increases related to current period tax positions
43 
40 
Settlements with taxing authorities
(20)
Lapse of statute of limitations
(29)
(20)
Balance at the end of the period
387 
359 
Unrecognized tax benefits that would impact the effective tax rate if recognized
239 
233 
Interest expense recognized as component of income tax expense
 
Penalties recognized as component of income tax expense
Accrued interest in income tax expense
$ 79 
$ 84 
Segment and Geographic Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 3, 2012
Nov. 26, 2011
Aug. 27, 2011
May 28, 2011
Feb. 26, 2011
Nov. 27, 2010
Aug. 28, 2010
May 29, 2010
Mar. 3, 2012
segments
Feb. 26, 2011
Feb. 27, 2010
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Goodwill impairment
 
 
 
 
 
 
 
 
$ 1,207 
$ 0 
$ 0 
Number of reportable segments
 
 
 
 
 
 
 
 
 
 
Total revenue
16,630 
12,004 
11,259 
10,812 
16,083 
11,774 
11,216 
10,674 
50,705 
49,747 
49,243 
Operating income (loss)
69 
351 
335 
330 
1,137 
433 
456 
348 
1,085 
2,374 
2,368 
Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
Gain on sale of investments
 
 
 
 
 
 
 
 
55 
Investment income and other
 
 
 
 
 
 
 
 
37 
43 
53 
Interest expense
 
 
 
 
 
 
 
 
(134)
(86)
(92)
Earnings from continuing operations before income tax expense and equity in (loss) income of affiliates
 
 
 
 
 
 
 
 
1,043 
2,331 
2,329 
Total Assets
16,005 
 
 
 
17,849 
 
 
 
16,005 
17,849 
18,302 
Total capital expenditures
 
 
 
 
 
 
 
 
766 
744 
615 
Total depreciation
 
 
 
 
 
 
 
 
897 
896 
838 
Domestic [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Goodwill impairment
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
37,615 
37,070 
37,138 
Percentage of revenue, by revenue category (as a percent)
100.00% 
 
 
 
100.00% 
 
 
 
100.00% 
100.00% 
100.00% 
Operating income (loss)
 
 
 
 
 
 
 
 
1,855 
2,054 
2,103 
Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
Total Assets
9,592 
 
 
 
9,610 
 
 
 
9,592 
9,610 
10,431 
Total capital expenditures
 
 
 
 
 
 
 
 
488 
481 
385 
Domestic [Member] |
Consumer Electronics [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
36.00% 
 
 
 
37.00% 
 
 
 
36.00% 
37.00% 
39.00% 
Domestic [Member] |
Computing and Mobile Phones [Memeber]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
40.00% 
 
 
 
37.00% 
 
 
 
40.00% 
37.00% 
34.00% 
Domestic [Member] |
Entertainment [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
12.00% 
 
 
 
14.00% 
 
 
 
12.00% 
14.00% 
16.00% 
Domestic [Member] |
Appliances [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
5.00% 
 
 
 
5.00% 
 
 
 
5.00% 
5.00% 
4.00% 
Domestic [Member] |
Services [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
6.00% 
 
 
 
6.00% 
 
 
 
6.00% 
6.00% 
6.00% 
Domestic [Member] |
Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
1.00% 
 
 
 
1.00% 
 
 
 
1.00% 
1.00% 
1.00% 
International [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Goodwill impairment
1,207 
 
 
 
 
 
 
 
1,207 
 
Total revenue
 
 
 
 
 
 
 
 
13,090 
12,677 
12,105 
Percentage of revenue, by revenue category (as a percent)
100.00% 
 
 
 
100.00% 
 
 
 
100.00% 
100.00% 
100.00% 
Operating income (loss)
 
 
 
 
 
 
 
 
(770)
320 
265 
Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
Total Assets
6,413 
 
 
 
8,239 
 
 
 
6,413 
8,239 
7,871 
Total capital expenditures
 
 
 
 
 
 
 
 
278 
263 
230 
International [Member] |
Consumer Electronics [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
20.00% 
 
 
 
20.00% 
 
 
 
20.00% 
20.00% 
20.00% 
International [Member] |
Computing and Mobile Phones [Memeber]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
56.00% 
 
 
 
55.00% 
 
 
 
56.00% 
55.00% 
52.00% 
International [Member] |
Entertainment [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
5.00% 
 
 
 
6.00% 
 
 
 
5.00% 
6.00% 
7.00% 
International [Member] |
Appliances [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
10.00% 
 
 
 
9.00% 
 
 
 
10.00% 
9.00% 
9.00% 
International [Member] |
Services [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Percentage of revenue, by revenue category (as a percent)
9.00% 
 
 
 
10.00% 
 
 
 
9.00% 
10.00% 
12.00% 
Continuing Operations [Member]
 
 
 
 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
Total depreciation
 
 
 
 
 
 
 
 
879 
876 
819 
Continuing Operations [Member] |
Domestic [Member]
 
 
 
 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
Total depreciation
 
 
 
 
 
 
 
 
612 
615 
574 
Continuing Operations [Member] |
International [Member]
 
 
 
 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
Total depreciation
 
 
 
 
 
 
 
 
$ 267 
$ 261 
$ 245 
Maximum [Member] |
International [Member] |
Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
Maximum percentage of revenue, by revenue category (as a percent)
1.00% 
 
 
 
1.00% 
 
 
 
1.00% 
1.00% 
1.00% 
Segment and Geographic Information (Details 2) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 3, 2012
Nov. 26, 2011
Aug. 27, 2011
May 28, 2011
Feb. 26, 2011
Nov. 27, 2010
Aug. 28, 2010
May 29, 2010
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Geographic Areas, Revenues from External Customers [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 16,630 
$ 12,004 
$ 11,259 
$ 10,812 
$ 16,083 
$ 11,774 
$ 11,216 
$ 10,674 
$ 50,705 
$ 49,747 
$ 49,243 
Geographic Areas, Long-Lived Assets [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment, Net
3,471 
 
 
 
3,823 
 
 
 
3,471 
3,823 
4,070 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Geographic Areas, Revenues from External Customers [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
37,615 
37,070 
37,138 
Geographic Areas, Long-Lived Assets [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment, Net
2,507 
 
 
 
2,741 
 
 
 
2,507 
2,741 
2,960 
Europe [Member]
 
 
 
 
 
 
 
 
 
 
 
Geographic Areas, Revenues from External Customers [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
5,228 
5,316 
5,444 
Geographic Areas, Long-Lived Assets [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment, Net
352 
 
 
 
438 
 
 
 
352 
438 
464 
Canada [Member]
 
 
 
 
 
 
 
 
 
 
 
Geographic Areas, Revenues from External Customers [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
5,635 
5,468 
5,065 
Geographic Areas, Long-Lived Assets [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment, Net
432 
 
 
 
474 
 
 
 
432 
474 
462 
China [Member]
 
 
 
 
 
 
 
 
 
 
 
Geographic Areas, Revenues from External Customers [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
2,069 
1,779 
1,562 
Geographic Areas, Long-Lived Assets [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment, Net
161 
 
 
 
147 
 
 
 
161 
147 
152 
Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Geographic Areas, Revenues from External Customers [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
158 
114 
34 
Geographic Areas, Long-Lived Assets [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment, Net
$ 19 
 
 
 
$ 23 
 
 
 
$ 19 
$ 23 
$ 32 
Contingencies and Commitments (Details) (Employment Discrimination Action, USD $)
In Millions, unless otherwise specified
1 Months Ended
Jun. 30, 2011
plaintiffs
Employment Discrimination Action
 
Contingencies
 
Number of plaintiffs in a lawsuit
Payment made to plaintiffs as per settlement terms
$ 0.3 
Amount of plaintiffs' attorneys' fees and costs reimbursed by the entity
$ 10 
Contingencies and Commitments (Details 2) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Accenture Service Contract [Member]
 
Commitments [Line Items]
 
Long-term Future Contractual Obligations, Low End of the Range
$ 155 
Long-term Future Contractual Obligations, High End of the Range
205 
Outstanding letters of credit and bankers' acceptances [Member]
 
Commitments [Line Items]
 
Unrecorded Unconditional Purchase Obligation, Purchases
561 
Capital Additions [Member]
 
Commitments [Line Items]
 
Unrecorded Unconditional Purchase Obligation, Purchases
21 
Lease commitments for land and buildings [Member]
 
Commitments [Line Items]
 
Number of Future Locations
15 
Minimum Rentals Period, Low End of the Range
Minimum Rentals Period, High End of the Range
15 
Capital Leases, Future Minimum Payments Due, Annually
$ 3 
Related Party Transactions (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Related Party Transaction [Line Items]
 
 
 
Payment made to Carphone Warehouse for their share of the profit share agreement buy-out (see Note 2, Profit Share Buy-Out)
$ 1,303 
$ 0 
$ 0 
Discount from fair value of noncontrolling interests right to purchase joint venture within contract period, as a percent
10.00% 
 
 
Carphone Warehouse Group plc [Member] |
Best Buy Europe Distributions Limited [Member]
 
 
 
Related Party Transaction [Line Items]
 
 
 
Payment made to Carphone Warehouse for their share of the profit share agreement buy-out (see Note 2, Profit Share Buy-Out)
1,303 
Revenue earned (primarily commission revenue and fees for information technology services provided to CPW and Carphone Warehouse)
63 
SG&A incurred (primarily for rent and other payroll-related costs paid to CPW and Carphone Warehouse)
20 
Interest expense incurred on credit facility with CPW and Carphone Warehouse as lender
Accounts payable to CPW and Carphone Warehouse at the end of the fiscal year
Accounts receivable from CPW and Carphone Warehouse at the end of the fiscal year
31 
Balance outstanding on credit facility from CPW and Carphone Warehouse at the end of the fiscal year
$ 0 
$ 98 
$ 206 
Subsequent Event (Details) (Restructuring [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 11 Months Ended
May 5, 2012
Feb. 2, 2013
store
Restructuring [Member]
 
 
Subsequent Event [Line Items]
 
 
Number of stores to be closed
 
50 
Expected restructuring charges, low end of the range
$ 140 
$ 300 
Expected restructuring charges, high end of the range
160 
350 
Expected restructuring charges, expected noncash charge, low end of the range
 
30 
Expected restructuring charges, expected noncash charge, high end of the range
 
$ 40 
Supplementary Financial Information (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 3, 2012
Nov. 26, 2011
Aug. 27, 2011
May 28, 2011
Feb. 26, 2011
Nov. 27, 2010
Aug. 28, 2010
May 29, 2010
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Quarterly Financial Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 16,630 
$ 12,004 
$ 11,259 
$ 10,812 
$ 16,083 
$ 11,774 
$ 11,216 
$ 10,674 
$ 50,705 
$ 49,747 
$ 49,243 
Comparable store sales % change (as a percent)
(2.40%)
0.30% 
(2.90%)
(1.80%)
(4.70%)
(3.40%)
(0.10%)
2.90% 
(1.70%)
(1.80%)
 
Gross profit
4,057 
2,922 
2,848 
2,746 
3,929 
2,962 
2,888 
2,762 
12,573 
12,541 
12,042 
Operating income
69 
351 
335 
330 
1,137 
433 
456 
348 
1,085 
2,374 
2,368 
Net earnings (loss) from continuing operations
(324)
258 
197 
199 
792 
280 
274 
208 
330 
1,554 
1,495 
Loss from discontinued operations, net of tax
(108)
(127)
(37)
(36)
(104)
(40)
(17)
(27)
(308)
(188)
(101)
Net earnings (loss) including noncontrolling interests
(432)
131 
160 
163 
688 
240 
257 
181 
22 
1,366 
1,394 
Net earnings (loss) attributable to Best Buy Co., Inc.
(1,698)
154 
177 
136 
651 
217 
254 
155 
(1,231)
1,277 
1,317 
Diluted (loss) earnings per share
 
 
 
 
 
 
 
 
 
 
 
Continuing operations (in dollars per share)
$ (4.73)
$ 0.62 
$ 0.52 
$ 0.41 
$ 1.84 
$ 0.61 
$ 0.62 
$ 0.41 
$ (2.89)
$ 3.44 
$ 3.29 
Discontinued operations (in dollars per share)
$ (0.16)
$ (0.20)
$ (0.05)
$ (0.06)
$ (0.22)
$ (0.07)
$ (0.02)
$ (0.05)
$ (0.47)
$ (0.36)
$ (0.19)
Diluted (in dollars per share)
$ (4.89)
$ 0.42 
$ 0.47 
$ 0.35 
$ 1.62 
$ 0.54 
$ 0.60 
$ 0.36 
$ (3.36)
$ 3.08 
$ 3.10 
Months until inclusion in comparable store sales
 
 
 
 
 
 
 
 
14 months 
 
 
Restructuring charges
35 
22 
 
147 
 
 
 
288 
222 
52 
Goodwill impairment
 
 
 
 
 
 
 
 
1,207 
International [Member]
 
 
 
 
 
 
 
 
 
 
 
Quarterly Financial Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
13,090 
12,677 
12,105 
Operating income
 
 
 
 
 
 
 
 
(770)
320 
265 
Diluted (loss) earnings per share
 
 
 
 
 
 
 
 
 
 
 
Goodwill impairment
1,207 
 
 
 
 
 
 
 
1,207 
 
Best Buy Europe [Member]
 
 
 
 
 
 
 
 
 
 
 
Diluted (loss) earnings per share
 
 
 
 
 
 
 
 
 
 
 
Profit share agreement, buy-out price
$ 1,303 
 
 
 
 
 
 
 
$ 1,303 
 
 
Valuation and Qualifying Accounts (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Mar. 3, 2012
Feb. 26, 2011
Feb. 27, 2010
Activity in valuation and qualifying accounts
 
 
 
Balance at End of Period
$ 72 
$ 107 
 
Allowance for Doubtful Accounts [Member]
 
 
 
Activity in valuation and qualifying accounts
 
 
 
Balance at Beginning of Period
107 
101 
97 
Charged to Expenses or Other Accounts
46 
48 
Other
(43)
(40)
(44)
Balance at End of Period
$ 72 
$ 107 
$ 101