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Asset | Life (in years) | |
Buildings | 25-50 | |
Leasehold improvements | 3-25 | |
Fixtures and equipment | 3-20 | |
Property under capital lease | 2-20 | |
Goodwill | Indefinite-Lived Tradenames | ||||||||||||||||||||||
Domestic | International | Total | Domestic | International | Total | ||||||||||||||||||
Balances at February 27, 2010 | $ | 434 | $ | 2,018 | $ | 2,452 | $ | 32 | $ | 80 | $ | 112 | |||||||||||
Acquisitions | — | 5 | 5 | — | — | — | |||||||||||||||||
Impairments(1) | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||
Sale of business(2) | (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(3) | 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(4) | — | — | — | — | 28 | 28 | |||||||||||||||||
Balances at March 3, 2012 | 516 | 819 | 1,335 | 19 | 111 | 130 | |||||||||||||||||
Acquisitions(5) | 15 | — | 15 | — | — | — | |||||||||||||||||
Impairments | (3 | ) | (819 | ) | (822 | ) | — | — | — | ||||||||||||||
Changes in foreign currency exchange rates | — | — | — | — | 1 | 1 | |||||||||||||||||
Balances at February 2, 2013 | $ | 528 | $ | — | $ | 528 | $ | 19 | $ | 112 | $ | 131 | |||||||||||
(1) | 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. |
(2) | 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. |
(3) | Represents goodwill acquired, primarily as a result of the mindSHIFT acquisition in fiscal 2012. |
(4) | 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. |
(5) | Represents goodwill acquired, primarily as a result of an acquisition made by mindSHIFT in fiscal 2013 (11-month). |
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Cumulative Impairment | Gross Carrying Amount | Cumulative Impairment | ||||||||||||
Goodwill | $ | 2,608 | $ | (2,080 | ) | $ | 2,596 | $ | (1,261 | ) | |||||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Tradenames | Customer Relationships | Tradenames | Customer Relationships | ||||||||||||
Indefinite-lived | $ | 131 | $ | — | $ | 130 | $ | — | |||||||
Definite-lived | — | 203 | — | 229 | |||||||||||
Total | $ | 131 | $ | 203 | $ | 130 | $ | 229 | |||||||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Customer relationships | $ | 475 | $ | (272 | ) | $ | 453 | $ | (224 | ) | |||||
Fiscal Year | ||||
2014 | $ | 42 | ||
2015 | 42 | |||
2016 | 42 | |||
2017 | 24 | |||
2018 | 6 | |||
Thereafter | 47 | |||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Lease rights | $ | 132 | $ | (73 | ) | $ | 130 | $ | (73 | ) | |||||
February 2, 2013 | March 3, 2012 | ||||||
Accrued liabilities | $ | 77 | $ | 77 | |||
Long-term liabilities | 47 | 47 | |||||
Total | $ | 124 | $ | 124 | |||
11-Month | 12-Month | |||||||||||
2013 | 2012 | 2011 | ||||||||||
Gift card breakage income | $ | 46 | $ | 54 | $ | 51 | ||||||
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. | |||
|
|||
New Fiscal Calendar(1) | Previous Fiscal Calendar(1) | |||
2013 (11-Month) | 2012 | 2011 | ||
March 2012 - January 2013 | March 2011 - February 2012 | March 2010 - February 2011 | ||
(1) | For entities reported on a lag, the fiscal months included in fiscal 2013 (11-month) were February through December, and in fiscal 2012 and 2011 were January through December. |
One Month Ended | |||||||
January 31, 2012 | January 31, 2011 | ||||||
(unaudited) | (unaudited) | ||||||
Revenue | $ | 628 | $ | 732 | |||
Gross profit | 133 | 166 | |||||
Operating income (loss) | (16 | ) | 20 | ||||
Net earnings (loss) from continuing operations | (19 | ) | 15 | ||||
Loss from discontinued operations, net of tax | (6 | ) | (43 | ) | |||
Net loss including noncontrolling interests | (25 | ) | (28 | ) | |||
Net loss attributable to Best Buy Co., Inc. shareholders(1) | (14 | ) | (33 | ) | |||
(1) | The net loss attributable to Best Buy Co., Inc. shareholders for the one month ended January 31, 2012 represents the adjustment to Retained earnings within the Consolidated Statements of Changes in Shareholders' Equity as a result of the exclusion of January results for entities reported on a lag. |
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Revenue | $ | 2 | $ | 411 | $ | 525 | |||||
Restructuring charges(1) | (2 | ) | 229 | 75 | |||||||
Gain (loss) from discontinued operations before income tax benefit | 3 | (406 | ) | (260 | ) | ||||||
Income tax benefit (expense) | (2 | ) | 89 | 57 | |||||||
Gain on sale of discontinued operations | — | 9 | 7 | ||||||||
Income tax benefit on sale | — | — | 8 | ||||||||
Net gain (loss) from discontinued operations including noncontrolling interests | 1 | (308 | ) | (188 | ) | ||||||
Net loss from discontinued operations attributable to noncontrolling interests | 1 | 134 | 38 | ||||||||
Net gain (loss) from discontinued operations attributable to Best Buy Co., Inc. shareholders | $ | 2 | $ | (174 | ) | $ | (150 | ) | |||
(1) | See Note 7, Restructuring Charges, for further discussion of the restructuring charges associated with discontinued operations. |
|
|||
February 2, 2013 | March 3, 2012 | ||||||
Equity and other investments | |||||||
Debt securities (auction rate securities) | $ | 21 | $ | 82 | |||
Marketable equity securities | 27 | 3 | |||||
Other investments | 38 | 55 | |||||
Total equity and other investments | $ | 86 | $ | 140 | |||
Description | Nature of collateral or guarantee | February 2, 2013 | March 3, 2012 | |||||||
Student loan bonds | Student loans guaranteed 95% to 100% by the U.S. government | $ | 19 | $ | 80 | |||||
Municipal revenue bonds | 100% insured by AAA/Aaa-rated bond insurers at February 2, 2013 | 2 | 2 | |||||||
Total fair value plus accrued interest(1) | $ | 21 | $ | 82 | ||||||
(1) | The par value and weighted-average interest rates (taxable equivalent) of our ARS were $23 million and $88 million and 0.4% and 0.5%, respectively, at February 2, 2013, and March 3, 2012, respectively. |
|
|||
• | 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. |
Fair Value Measurements Using Inputs Considered as | |||||||||||||||
Fair Value at February 2, 2013 | 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 | $ | 520 | $ | 520 | $ | — | $ | — | |||||||
Other current assets | |||||||||||||||
Foreign currency derivative instruments | 1 | — | 1 | — | |||||||||||
Equity and other investments | |||||||||||||||
Auction rate securities | 21 | — | — | 21 | |||||||||||
Marketable equity securities | 27 | 27 | — | — | |||||||||||
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 | — | — | |||||||||||
Liabilities | |||||||||||||||
Accrued liabilities | |||||||||||||||
Foreign currency derivative instruments | 2 | — | 2 | — | |||||||||||
Debt securities — Auction rate securities only | |||||||||||
Student loan bonds | Municipal revenue bonds | Total | |||||||||
Balances at February 26, 2011 | $ | 108 | $ | 2 | $ | 110 | |||||
Changes in unrealized losses in other comprehensive income | (1 | ) | — | (1 | ) | ||||||
Sales | (27 | ) | — | (27 | ) | ||||||
Balances at March 3, 2012 | $ | 80 | $ | 2 | $ | 82 | |||||
Changes in unrealized losses in other comprehensive income | 4 | — | 4 | ||||||||
Sales | (65 | ) | — | (65 | ) | ||||||
Balances at February 2, 2013 | $ | 19 | $ | 2 | $ | 21 | |||||
11-Month 2013 | 12-Month 2012 | ||||||||||||||
Impairments | Remaining Net Carrying Value | Impairments | Remaining Net Carrying Value | ||||||||||||
Continuing operations | |||||||||||||||
Goodwill | $ | 822 | $ | — | $ | 1,207 | $ | — | |||||||
Property and equipment | 70 | — | 32 | — | |||||||||||
Investments | 27 | 38 | — | — | |||||||||||
Total | $ | 919 | $ | 38 | $ | 1,239 | $ | — | |||||||
Discontinued operations(1) | |||||||||||||||
Property and equipment | $ | — | $ | — | $ | 111 | $ | — | |||||||
Tradename | — | — | 3 | — | |||||||||||
Total | $ | — | $ | — | $ | 114 | $ | — | |||||||
(1) | Property and equipment and tradename impairments associated with discontinued operations are recorded within Loss from discontinued operations in our Consolidated Statements of Earnings. |
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Continuing operations | |||||||||||
Renew Blue | $ | 171 | $ | — | $ | — | |||||
Fiscal 2013 Europe restructuring | 36 | — | — | ||||||||
Fiscal 2013 U.S. restructuring | 257 | — | — | ||||||||
Fiscal 2012 restructuring | (1 | ) | 38 | — | |||||||
Fiscal 2011 restructuring | (12 | ) | 20 | 147 | |||||||
Total | 451 | 58 | 147 | ||||||||
Discontinued operations | |||||||||||
Fiscal 2012 restructuring | (1 | ) | 205 | — | |||||||
Fiscal 2011 restructuring | (1 | ) | 24 | 75 | |||||||
Total (Note 4) | (2 | ) | 229 | 75 | |||||||
Total | $ | 449 | $ | 287 | $ | 222 | |||||
Domestic | International | Total | |||||||||
Continuing operations | |||||||||||
Inventory write-downs | $ | 1 | $ | — | $ | 1 | |||||
Property and equipment impairments | 7 | 23 | 30 | ||||||||
Termination benefits | 46 | 9 | 55 | ||||||||
Investment impairments | 27 | — | 27 | ||||||||
Facility closure and other costs | 3 | 55 | 58 | ||||||||
Total | $ | 84 | $ | 87 | $ | 171 | |||||
Termination Benefits | Facility Closure and Other Costs | Total | |||||||||
Balance at March 3, 2012 | $ | — | $ | — | $ | — | |||||
Charges | 55 | 54 | 109 | ||||||||
Cash payments | (1 | ) | — | (1 | ) | ||||||
Balance at February 2, 2013 | $ | 54 | $ | 54 | $ | 108 | |||||
International | |||
Continuing operations | |||
Property and equipment impairments | $ | 12 | |
Termination benefits | 19 | ||
Facility closure and other costs | 5 | ||
Total | $ | 36 | |
Termination Benefits | Facility Closure and Other Costs | Total | |||||||||
Balance at March 3, 2012 | $ | — | $ | — | $ | — | |||||
Charges | 19 | 5 | 24 | ||||||||
Cash payments | (19 | ) | — | (19 | ) | ||||||
Balance at February 2, 2013 | $ | — | $ | 5 | $ | 5 | |||||
Domestic | |||
Continuing operations | |||
Property and equipment impairments | $ | 29 | |
Termination benefits | 77 | ||
Facility closure and other costs | 151 | ||
Total | $ | 257 | |
Termination Benefits | Facility Closure and Other Costs | Total | |||||||||
Balance at March 3, 2012 | $ | — | $ | — | $ | — | |||||
Charges | 109 | 152 | 261 | ||||||||
Cash payments | (65 | ) | (33 | ) | (98 | ) | |||||
Adjustments | (40 | ) | (6 | ) | (46 | ) | |||||
Balance at February 2, 2013 | $ | 4 | $ | 113 | $ | 117 | |||||
Domestic | International | Total | |||||||||||||||||||||||||||||||||
11-Month 2013 | 12-Month 2012 | Cumulative Amount | 11-Month 2013 | 12-Month 2012 | Cumulative Amount | 11-Month 2013 | 12-Month 2012 | Cumulative Amount | |||||||||||||||||||||||||||
Continuing operations | |||||||||||||||||||||||||||||||||||
Property and equipment impairments | $ | — | $ | 17 | $ | 17 | $ | — | $ | 15 | $ | 15 | $ | — | $ | 32 | $ | 32 | |||||||||||||||||
Termination benefits | — | 1 | 1 | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||
Facility closure and other costs | (1 | ) | 5 | 4 | — | — | — | (1 | ) | 5 | 4 | ||||||||||||||||||||||||
Total | (1 | ) | 23 | 22 | — | 15 | 15 | (1 | ) | 38 | 37 | ||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Inventory write-downs | — | — | — | — | 11 | 11 | — | 11 | 11 | ||||||||||||||||||||||||||
Property and equipment impairments | — | — | — | — | 96 | 96 | — | 96 | 96 | ||||||||||||||||||||||||||
Termination benefits | — | — | — | 1 | 16 | 17 | 1 | 16 | 17 | ||||||||||||||||||||||||||
Facility closure and other costs | — | — | — | (2 | ) | 82 | 80 | (2 | ) | 82 | 80 | ||||||||||||||||||||||||
Total | — | — | — | (1 | ) | 205 | 204 | (1 | ) | 205 | 204 | ||||||||||||||||||||||||
Total | $ | (1 | ) | $ | 23 | $ | 22 | $ | (1 | ) | $ | 220 | $ | 219 | $ | (2 | ) | $ | 243 | $ | 241 | ||||||||||||||
Termination Benefits | Facility Closure and Other Costs(1) | 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 | ||||||||
Charges | 1 | 2 | 3 | ||||||||
Cash payments | (18 | ) | (83 | ) | (101 | ) | |||||
Adjustments | — | 28 | 28 | ||||||||
Changes in foreign currency exchange rates | — | 4 | 4 | ||||||||
Balance at February 2, 2013 | $ | — | $ | 36 | $ | 36 | |||||
(1) | Included within the the adjustments to facility closure and other costs is $34 million from the first quarter of fiscal 2013 (11-month), representing an adjustment to exclude non-cash charges or benefits, which had no impact on our Consolidated Statements of Earnings in fiscal 2013 (11-month). |
Domestic | International | Total | |||||||||||||||||||||||||||||||||||||||||||||
11-Month 2013 | 12-Month 2012 | 12-Month 2011 | Cumulative Amount | 11-Month 2013 | 12-Month 2012 | 12-Month 2011 | Cumulative Amount | 11-Month 2013 | 12-Month 2012 | 12-Month 2011 | Cumulative Amount | ||||||||||||||||||||||||||||||||||||
Continuing operations | |||||||||||||||||||||||||||||||||||||||||||||||
Inventory write-downs | $ | — | $ | 19 | $ | 9 | $ | 28 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 19 | $ | 9 | $ | 28 | |||||||||||||||||||||||
Property & equipment impairments(1) | (12 | ) | — | 15 | 3 | — | — | 107 | 107 | (12 | ) | — | 122 | 110 | |||||||||||||||||||||||||||||||||
Termination benefits | — | (3 | ) | 16 | 13 | — | — | — | — | — | (3 | ) | 16 | 13 | |||||||||||||||||||||||||||||||||
Facility closure and other costs | — | 4 | — | 4 | — | — | — | — | — | 4 | — | 4 | |||||||||||||||||||||||||||||||||||
Total | (12 | ) | 20 | 40 | 48 | — | — | 107 | 107 | (12 | ) | 20 | 147 | 155 | |||||||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||||||||||||||
Inventory write-downs | — | — | — | — | — | — | 15 | 15 | — | — | 15 | 15 | |||||||||||||||||||||||||||||||||||
Property & 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 | (1 | ) | (8 | ) | 13 | 4 | (1 | ) | (5 | ) | 13 | 7 | |||||||||||||||||||||||||||||||
Total | — | 25 | 10 | 35 | (1 | ) | (1 | ) | 65 | 63 | (1 | ) | 24 | 75 | 98 | ||||||||||||||||||||||||||||||||
Total | $ | (12 | ) | $ | 45 | $ | 50 | $ | 83 | $ | (1 | ) | $ | (1 | ) | $ | 172 | $ | 170 | $ | (13 | ) | $ | 44 | $ | 222 | $ | 253 | |||||||||||||||||||
Termination Benefits | Facility Closure and Other Costs(1) | Total | |||||||||
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 | ||||||||
Charges | — | — | — | ||||||||
Cash payments | (2 | ) | (8 | ) | (10 | ) | |||||
Adjustments | (1 | ) | (1 | ) | (2 | ) | |||||
Changes in foreign currency exchange rates | — | — | — | ||||||||
Balance at February 2, 2013 | $ | — | $ | — | $ | — | |||||
(1) | Included within the facility closure and other costs adjustments is $10 million 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. |
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February 2, 2013 | March 3, 2012 | ||||||||||||
Principal Balance | Interest Rate | Principal Balance | Interest Rate | ||||||||||
U.S. revolving credit facility – 364-day | $ | — | — | % | $ | — | — | % | |||||
U.S. revolving credit facility – 5-year | — | — | % | — | — | % | |||||||
Europe revolving credit facility | 596 | 2.0 | % | 480 | 2.4 | % | |||||||
Canada revolving demand facility | — | — | % | — | — | % | |||||||
China revolving demand facilities | — | — | % | — | — | % | |||||||
Total short-term debt | $ | 596 | $ | 480 | |||||||||
11-Month | 12-Month | |||||||
Fiscal Year | 2013 | 2012 | ||||||
Maximum month-end amount outstanding during the year | $ | 596 | $ | 480 | ||||
Average amount outstanding during the year | $ | 477 | $ | 337 | ||||
Weighted-average interest rate at year-end | 2.0 | % | 2.4 | % | ||||
February 2, 2013 | March 3, 2012 | ||||||
2013 Notes | $ | 500 | $ | 500 | |||
2016 Notes | 349 | 349 | |||||
2021 Notes | 648 | 648 | |||||
Financing lease obligations, due 2014 to 2019, interest rates ranging from 3.0% to 8.1% | 122 | 149 | |||||
Capital lease obligations, due 2014 to 2036, interest rates ranging from 2.1% to 8.3% | 80 | 81 | |||||
Other debt, due 2018 to 2022, interest rates ranging from 3.8% to 6.7% | 1 | 1 | |||||
Total long-term debt | $ | 1,700 | $ | 1,728 | |||
Less: current portion(1) | (547 | ) | (43 | ) | |||
Total long-term debt, less current portion | $ | 1,153 | $ | 1,685 | |||
(1) | Our 2013 Notes due July 15, 2013, are classified in the current portion of long-term debt as of February 2, 2013. |
Fiscal Year | ||||
2014 | $ | 547 | ||
2015 | 45 | |||
2016 | 35 | |||
2017 | 370 | |||
2018 | 15 | |||
Thereafter | 688 | |||
Total long-term debt | $ | 1,700 | ||
|
|||
February 2, 2013 | March 3, 2012 | |||||||||||||||
Contract Type | Assets | Liabilities | Assets | Liabilities | ||||||||||||
No hedge designation (foreign exchange forward contracts) | $ | 1 | $ | — | $ | 1 | $ | (2 | ) | |||||||
11-Month | 12-Month | |||||||||||||||
2013 | 2012 | |||||||||||||||
Contract Type | Pre-tax Gain Recognized in OCI(1) | Loss 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) | $ | — | $ | (1 | ) | $ | 7 | $ | 5 | |||||||
(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. |
Gain Recognized within SG&A | ||||||||
11-Month | 12-Month | |||||||
Contract Type | 2013 | 2012 | ||||||
No hedge designation (foreign exchange forward contracts) | $ | 2 | $ | 5 | ||||
Notional Amount | ||||||||
Contract Type | February 2, 2013 | March 3, 2012 | ||||||
Derivatives not designated as hedging instruments | $ | 173 | $ | 238 | ||||
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Minimum rentals | $ | 1,080 | $ | 1,192 | $ | 1,141 | |||||
Contingent rentals | 1 | 2 | 2 | ||||||||
Total rent expense | 1,081 | 1,194 | 1,143 | ||||||||
Less: sublease income | (16 | ) | (19 | ) | (19 | ) | |||||
Net rent expense | $ | 1,065 | $ | 1,175 | $ | 1,124 | |||||
Fiscal Year | Capital Leases | Financing Leases | Operating Leases(1) | |||||||||
2014 | $ | 27 | $ | 30 | $ | 1,238 | ||||||
2015 | 25 | 28 | 1,156 | |||||||||
2016 | 17 | 25 | 1,034 | |||||||||
2017 | 5 | 19 | 888 | |||||||||
2018 | 3 | 15 | 703 | |||||||||
Thereafter | 20 | 28 | 1,994 | |||||||||
Subtotal | 97 | 145 | $ | 7,013 | ||||||||
Less: imputed interest | (17 | ) | (23 | ) | ||||||||
Present value | $ | 80 | $ | 122 | ||||||||
(1) | Operating lease obligations do not include payments to landlords covering real estate taxes and common area maintenance. These charges, if included, would increase total operating lease obligations by $1.6 billion at February 2, 2013. |
|
|||
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Federal income tax at the statutory rate | $ | (65 | ) | $ | 365 | $ | 816 | ||||
State income taxes, net of federal benefit | (3 | ) | 45 | 46 | |||||||
(Benefit) expense from foreign operations | 7 | (96 | ) | (86 | ) | ||||||
Other | 5 | — | 3 | ||||||||
Goodwill impairments (non-deductible) | 287 | 395 | — | ||||||||
Income tax expense | $ | 231 | $ | 709 | $ | 779 | |||||
Effective income tax rate | (124.2 | )% | 68.0 | % | 33.4 | % | |||||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
United States | $ | 281 | $ | 1,537 | $ | 1,739 | |||||
Outside the United States | (467 | ) | (494 | ) | 592 | ||||||
Earnings (loss) from continuing operations before income tax expense and equity in income (loss) of affiliates | $ | (186 | ) | $ | 1,043 | $ | 2,331 | ||||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Current: | |||||||||||
Federal | $ | 174 | $ | 447 | $ | 735 | |||||
State | (3 | ) | 61 | 73 | |||||||
Foreign | 79 | 173 | 105 | ||||||||
250 | 681 | 913 | |||||||||
Deferred: | |||||||||||
Federal | 27 | 94 | (113 | ) | |||||||
State | (2 | ) | 1 | (2 | ) | ||||||
Foreign | (44 | ) | (67 | ) | (19 | ) | |||||
(19 | ) | 28 | (134 | ) | |||||||
Income tax expense | $ | 231 | $ | 709 | $ | 779 | |||||
February 2, 2013 | March 3, 2012 | ||||||
Accrued property expenses | $ | 194 | $ | 146 | |||
Other accrued expenses | 119 | 108 | |||||
Deferred revenue | 153 | 128 | |||||
Compensation and benefits | 95 | 103 | |||||
Stock-based compensation | 137 | 157 | |||||
Loss and credit carryforwards | 266 | 310 | |||||
Other | 125 | 121 | |||||
Total deferred tax assets | 1,089 | 1,073 | |||||
Valuation allowance | (228 | ) | (204 | ) | |||
Total deferred tax assets after valuation allowance | 861 | 869 | |||||
Property and equipment | (343 | ) | (376 | ) | |||
Goodwill and intangibles | (127 | ) | (118 | ) | |||
Inventory | (90 | ) | (85 | ) | |||
Other | (22 | ) | (27 | ) | |||
Total deferred tax liabilities | (582 | ) | (606 | ) | |||
Net deferred tax assets | $ | 279 | $ | 263 | |||
February 2, 2013 | March 3, 2012 | ||||||
Other current assets | $ | 228 | $ | 226 | |||
Other assets | 66 | 53 | |||||
Other current liabilities | (5 | ) | — | ||||
Other long-term liabilities | (10 | ) | (16 | ) | |||
Net deferred tax assets | $ | 279 | $ | 263 | |||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Balance at beginning of period | $ | 387 | $ | 359 | $ | 393 | |||||
Gross increases related to prior period tax positions | 10 | 69 | 36 | ||||||||
Gross decreases related to prior period tax positions | (22 | ) | (35 | ) | (90 | ) | |||||
Gross increases related to current period tax positions | 37 | 43 | 40 | ||||||||
Settlements with taxing authorities | (10 | ) | (20 | ) | — | ||||||
Lapse of statute of limitations | (19 | ) | (29 | ) | (20 | ) | |||||
Balance at end of period | $ | 383 | $ | 387 | $ | 359 | |||||
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Revenue | |||||||||||
Domestic | $ | 33,343 | $ | 37,615 | $ | 37,070 | |||||
International | 11,742 | 13,090 | 12,677 | ||||||||
Total revenue | $ | 45,085 | $ | 50,705 | $ | 49,747 | |||||
Percentage of revenue, by revenue category | |||||||||||
Domestic: | |||||||||||
Consumer Electronics | 33 | % | 36 | % | 37 | % | |||||
Computing and Mobile Phones | 44 | % | 40 | % | 37 | % | |||||
Entertainment | 10 | % | 12 | % | 14 | % | |||||
Appliances | 6 | % | 5 | % | 5 | % | |||||
Services | 6 | % | 6 | % | 6 | % | |||||
Other | 1 | % | 1 | % | 1 | % | |||||
Total | 100 | % | 100 | % | 100 | % | |||||
International: | |||||||||||
Consumer Electronics | 18 | % | 20 | % | 20 | % | |||||
Computing and Mobile Phones | 61 | % | 56 | % | 55 | % | |||||
Entertainment | 4 | % | 5 | % | 6 | % | |||||
Appliances | 10 | % | 10 | % | 9 | % | |||||
Services | 7 | % | 9 | % | 10 | % | |||||
Other | < 1% | < 1% | < 1% | ||||||||
Total | 100 | % | 100 | % | 100 | % | |||||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Operating income (loss) | |||||||||||
Domestic | $ | 734 | $ | 1,855 | $ | 2,054 | |||||
International(1) | (859 | ) | (770 | ) | 320 | ||||||
Total operating income (loss) | (125 | ) | 1,085 | 2,374 | |||||||
Other income (expense) | |||||||||||
Gain on sale of investments | 18 | 55 | — | ||||||||
Investment income and other | 33 | 37 | 43 | ||||||||
Interest expense | (112 | ) | (134 | ) | (86 | ) | |||||
Earnings (loss) from continuing operations before income tax expense and equity in income (loss) of affiliates | $ | (186 | ) | $ | 1,043 | $ | 2,331 | ||||
Assets | |||||||||||
Domestic | $ | 10,874 | $ | 9,592 | $ | 9,610 | |||||
International | 5,913 | 6,413 | 8,239 | ||||||||
Total assets | $ | 16,787 | $ | 16,005 | $ | 17,849 | |||||
Capital expenditures | |||||||||||
Domestic | $ | 488 | $ | 488 | $ | 481 | |||||
International | 217 | 278 | 263 | ||||||||
Total capital expenditures | $ | 705 | $ | 766 | $ | 744 | |||||
Depreciation | |||||||||||
Domestic | $ | 561 | $ | 612 | $ | 615 | |||||
International | 233 | 267 | 261 | ||||||||
Total depreciation | $ | 794 | $ | 879 | $ | 876 | |||||
(1) | Included within our International segment's operating loss for fiscal 2013 (11-month) and fiscal 2012 is a $819 million and a $1.2 billion goodwill impairment charge, respectively. |
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Net sales to customers | |||||||||||
United States | $ | 33,343 | $ | 37,615 | $ | 37,070 | |||||
Europe | 5,136 | 5,228 | 5,316 | ||||||||
Canada | 4,818 | 5,635 | 5,468 | ||||||||
China | 1,575 | 2,069 | 1,779 | ||||||||
Other | 213 | 158 | 114 | ||||||||
Total revenue | $ | 45,085 | $ | 50,705 | $ | 49,747 | |||||
Long-lived assets | |||||||||||
United States | $ | 2,404 | $ | 2,507 | $ | 2,741 | |||||
Europe | 352 | 352 | 438 | ||||||||
Canada | 341 | 432 | 474 | ||||||||
China | 142 | 161 | 147 | ||||||||
Other | 31 | 19 | 23 | ||||||||
Total long-lived assets | $ | 3,270 | $ | 3,471 | $ | 3,823 | |||||
|
|||
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Payment made to Carphone Warehouse for its share of the profit share agreement buy-out (see Note 3, Profit Share Buy-Out) | $ | — | $ | 1,303 | $ | — | |||||
Revenue earned (primarily commission revenue and fees for information technology services provided to CPW and Carphone Warehouse) | — | — | 6 | ||||||||
SG&A incurred (primarily payroll-related costs and rent paid to CPW and Carphone Warehouse) | 1 | 20 | 8 | ||||||||
Interest expense incurred on credit facility with CPW and Carphone Warehouse as lender | — | 1 | 1 | ||||||||
Accounts payable to CPW and Carphone Warehouse at the end of the fiscal year | 1 | — | — | ||||||||
Accounts receivable from CPW and Carphone Warehouse at the end of the fiscal year | — | 1 | 2 | ||||||||
Balance outstanding on credit facility from CPW and Carphone Warehouse at the end of the fiscal year | — | — | 98 | ||||||||
|
|||
Quarter | 11-Month | ||||||||||||||||||
1st | 2nd | 3rd | 4th | 2013(1) | |||||||||||||||
Revenue | $ | 11,610 | $ | 10,547 | $ | 10,753 | $ | 16,711 | $ | 45,085 | |||||||||
Comparable store sales % change(2) | (5.3 | )% | (3.2 | )% | (4.3 | )% | (0.8 | )% | (2.9 | )% | |||||||||
Gross profit | $ | 2,907 | $ | 2,564 | $ | 2,586 | $ | 3,781 | $ | 10,649 | |||||||||
Operating income (loss)(3) | 262 | 33 | 12 | (145 | ) | (125 | ) | ||||||||||||
Net earnings (loss) from continuing operations | 161 | (7 | ) | (5 | ) | (377 | ) | (421 | ) | ||||||||||
Gain (loss) from discontinued operations, net of tax | (9 | ) | — | 6 | (2 | ) | 1 | ||||||||||||
Net earnings (loss) including noncontrolling interests | 152 | (7 | ) | 1 | (379 | ) | (420 | ) | |||||||||||
Net earnings (loss) attributable to Best Buy Co., Inc. shareholders | $ | 158 | $ | 12 | $ | (10 | ) | $ | (409 | ) | $ | (441 | ) | ||||||
Diluted earnings (loss) per share(4) | |||||||||||||||||||
Continuing operations | $ | 0.47 | $ | 0.04 | $ | (0.04 | ) | $ | (1.21 | ) | $ | (1.31 | ) | ||||||
Discontinued operations | (0.01 | ) | — | 0.01 | — | 0.01 | |||||||||||||
Diluted earnings (loss) per share | $ | 0.46 | $ | 0.04 | $ | (0.03 | ) | $ | (1.21 | ) | $ | (1.30 | ) | ||||||
Quarter | 12-Month | ||||||||||||||||||
1st | 2nd | 3rd | 4th | 2012 | |||||||||||||||
Revenue | $ | 10,812 | $ | 11,259 | $ | 12,004 | $ | 16,630 | $ | 50,705 | |||||||||
Comparable store sales % change(2) | (1.8 | )% | (2.9 | )% | 0.3 | % | (2.4 | )% | (1.7 | )% | |||||||||
Gross profit | $ | 2,746 | $ | 2,848 | $ | 2,922 | $ | 4,057 | $ | 12,573 | |||||||||
Operating income(5) | 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. shareholders(6) | $ | 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 | ) | |||||||
(1) | On November 2, 2011, our Board of Directors approved a change to our fiscal year-end from the Saturday nearest the end of February to the Saturday nearest the end of January. In the first quarter of fiscal 2013 (11-month), we began reporting our quarterly results on the basis of our new fiscal year-end. As such, the results for the month of February 2012, which are included in the audited results for fiscal 2012, were also included in the reported first quarter of fiscal 2013 (11-month). However, the results for the month of February 2012 are not included in the results for the full year of fiscal 2013 (11-month). Thus, the four quarters of fiscal year 2013 (11-month) are not additive. |
(2) | Comprised of revenue from stores operating for at least 14 full months as well as revenue related to call centers, websites 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. |
(3) | Includes $127 million, $91 million, $36 million and $203 million of restructuring charges recorded in the fiscal first, second, third and fourth quarters, respectively, and $451 million for the 11 months ended February 2, 2013, related to measures we took to restructure our businesses. Also included in the fourth quarter and 11 months ended February 2, 2013, is a $822 million goodwill impairment charge related to our Canada, Five Star, and U.S. reporting units. |
(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 $1 million, $22 million and $35 million 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 $1.2 billion goodwill impairment charge recorded in the fourth quarter related to our Best Buy Europe reporting unit. |
(6) | Includes a $1.3 billion payment related to the Mobile buy-out recorded in the fourth quarter of fiscal 2012. |
|
|||
Balance at Beginning of Period | Charged to Expenses or Other Accounts | Other(1) | Balance at End of Period | ||||||||||||
Year ended February 2, 2013 | |||||||||||||||
Allowance for doubtful accounts | $ | 72 | $ | 34 | $ | (14 | ) | $ | 92 | ||||||
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 | ||||||
(1) | Includes bad debt write-offs and recoveries, acquisitions and the effect of foreign currency fluctuations. |
|
|||
Goodwill | Indefinite-Lived Tradenames | ||||||||||||||||||||||
Domestic | International | Total | Domestic | International | Total | ||||||||||||||||||
Balances at February 27, 2010 | $ | 434 | $ | 2,018 | $ | 2,452 | $ | 32 | $ | 80 | $ | 112 | |||||||||||
Acquisitions | — | 5 | 5 | — | — | — | |||||||||||||||||
Impairments(1) | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||
Sale of business(2) | (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(3) | 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(4) | — | — | — | — | 28 | 28 | |||||||||||||||||
Balances at March 3, 2012 | 516 | 819 | 1,335 | 19 | 111 | 130 | |||||||||||||||||
Acquisitions(5) | 15 | — | 15 | — | — | — | |||||||||||||||||
Impairments | (3 | ) | (819 | ) | (822 | ) | — | — | — | ||||||||||||||
Changes in foreign currency exchange rates | — | — | — | — | 1 | 1 | |||||||||||||||||
Balances at February 2, 2013 | $ | 528 | $ | — | $ | 528 | $ | 19 | $ | 112 | $ | 131 | |||||||||||
(1) | 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. |
(2) | 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. |
(3) | Represents goodwill acquired, primarily as a result of the mindSHIFT acquisition in fiscal 2012. |
(4) | 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. |
(5) | Represents goodwill acquired, primarily as a result of an acquisition made by mindSHIFT in fiscal 2013 (11-month). |
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Cumulative Impairment | Gross Carrying Amount | Cumulative Impairment | ||||||||||||
Goodwill | $ | 2,608 | $ | (2,080 | ) | $ | 2,596 | $ | (1,261 | ) | |||||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Tradenames | Customer Relationships | Tradenames | Customer Relationships | ||||||||||||
Indefinite-lived | $ | 131 | $ | — | $ | 130 | $ | — | |||||||
Definite-lived | — | 203 | — | 229 | |||||||||||
Total | $ | 131 | $ | 203 | $ | 130 | $ | 229 | |||||||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Customer relationships | $ | 475 | $ | (272 | ) | $ | 453 | $ | (224 | ) | |||||
Fiscal Year | ||||
2014 | $ | 42 | ||
2015 | 42 | |||
2016 | 42 | |||
2017 | 24 | |||
2018 | 6 | |||
Thereafter | 47 | |||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Lease rights | $ | 132 | $ | (73 | ) | $ | 130 | $ | (73 | ) | |||||
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 | ||||
• | 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. | |||
|
|||
Asset | Life (in years) | |
Buildings | 25-50 | |
Leasehold improvements | 3-25 | |
Fixtures and equipment | 3-20 | |
Property under capital lease | 2-20 | |
Goodwill | Indefinite-Lived Tradenames | ||||||||||||||||||||||
Domestic | International | Total | Domestic | International | Total | ||||||||||||||||||
Balances at February 27, 2010 | $ | 434 | $ | 2,018 | $ | 2,452 | $ | 32 | $ | 80 | $ | 112 | |||||||||||
Acquisitions | — | 5 | 5 | — | — | — | |||||||||||||||||
Impairments(1) | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||
Sale of business(2) | (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(3) | 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(4) | — | — | — | — | 28 | 28 | |||||||||||||||||
Balances at March 3, 2012 | 516 | 819 | 1,335 | 19 | 111 | 130 | |||||||||||||||||
Acquisitions(5) | 15 | — | 15 | — | — | — | |||||||||||||||||
Impairments | (3 | ) | (819 | ) | (822 | ) | — | — | — | ||||||||||||||
Changes in foreign currency exchange rates | — | — | — | — | 1 | 1 | |||||||||||||||||
Balances at February 2, 2013 | $ | 528 | $ | — | $ | 528 | $ | 19 | $ | 112 | $ | 131 | |||||||||||
(1) | 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. |
(2) | 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. |
(3) | Represents goodwill acquired, primarily as a result of the mindSHIFT acquisition in fiscal 2012. |
(4) | 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. |
(5) | Represents goodwill acquired, primarily as a result of an acquisition made by mindSHIFT in fiscal 2013 (11-month). |
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Cumulative Impairment | Gross Carrying Amount | Cumulative Impairment | ||||||||||||
Goodwill | $ | 2,608 | $ | (2,080 | ) | $ | 2,596 | $ | (1,261 | ) | |||||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Tradenames | Customer Relationships | Tradenames | Customer Relationships | ||||||||||||
Indefinite-lived | $ | 131 | $ | — | $ | 130 | $ | — | |||||||
Definite-lived | — | 203 | — | 229 | |||||||||||
Total | $ | 131 | $ | 203 | $ | 130 | $ | 229 | |||||||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Tradenames | Customer Relationships | Tradenames | Customer Relationships | ||||||||||||
Indefinite-lived | $ | 131 | $ | — | $ | 130 | $ | — | |||||||
Definite-lived | — | 203 | — | 229 | |||||||||||
Total | $ | 131 | $ | 203 | $ | 130 | $ | 229 | |||||||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Customer relationships | $ | 475 | $ | (272 | ) | $ | 453 | $ | (224 | ) | |||||
Fiscal Year | ||||
2014 | $ | 42 | ||
2015 | 42 | |||
2016 | 42 | |||
2017 | 24 | |||
2018 | 6 | |||
Thereafter | 47 | |||
February 2, 2013 | March 3, 2012 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Lease rights | $ | 132 | $ | (73 | ) | $ | 130 | $ | (73 | ) | |||||
February 2, 2013 | March 3, 2012 | ||||||
Accrued liabilities | $ | 77 | $ | 77 | |||
Long-term liabilities | 47 | 47 | |||||
Total | $ | 124 | $ | 124 | |||
11-Month | 12-Month | |||||||||||
2013 | 2012 | 2011 | ||||||||||
Gift card breakage income | $ | 46 | $ | 54 | $ | 51 | ||||||
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. | |||
|
|||
New Fiscal Calendar(1) | Previous Fiscal Calendar(1) | |||
2013 (11-Month) | 2012 | 2011 | ||
March 2012 - January 2013 | March 2011 - February 2012 | March 2010 - February 2011 | ||
(1) | For entities reported on a lag, the fiscal months included in fiscal 2013 (11-month) were February through December, and in fiscal 2012 and 2011 were January through December. |
One Month Ended | |||||||
January 31, 2012 | January 31, 2011 | ||||||
(unaudited) | (unaudited) | ||||||
Revenue | $ | 628 | $ | 732 | |||
Gross profit | 133 | 166 | |||||
Operating income (loss) | (16 | ) | 20 | ||||
Net earnings (loss) from continuing operations | (19 | ) | 15 | ||||
Loss from discontinued operations, net of tax | (6 | ) | (43 | ) | |||
Net loss including noncontrolling interests | (25 | ) | (28 | ) | |||
Net loss attributable to Best Buy Co., Inc. shareholders(1) | (14 | ) | (33 | ) | |||
(1) | The net loss attributable to Best Buy Co., Inc. shareholders for the one month ended January 31, 2012 represents the adjustment to Retained earnings within the Consolidated Statements of Changes in Shareholders' Equity as a result of the exclusion of January results for entities reported on a lag. |
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Revenue | $ | 2 | $ | 411 | $ | 525 | |||||
Restructuring charges(1) | (2 | ) | 229 | 75 | |||||||
Gain (loss) from discontinued operations before income tax benefit | 3 | (406 | ) | (260 | ) | ||||||
Income tax benefit (expense) | (2 | ) | 89 | 57 | |||||||
Gain on sale of discontinued operations | — | 9 | 7 | ||||||||
Income tax benefit on sale | — | — | 8 | ||||||||
Net gain (loss) from discontinued operations including noncontrolling interests | 1 | (308 | ) | (188 | ) | ||||||
Net loss from discontinued operations attributable to noncontrolling interests | 1 | 134 | 38 | ||||||||
Net gain (loss) from discontinued operations attributable to Best Buy Co., Inc. shareholders | $ | 2 | $ | (174 | ) | $ | (150 | ) | |||
(1) | See Note 7, Restructuring Charges, for further discussion of the restructuring charges associated with discontinued operations. |
|
|||
February 2, 2013 | March 3, 2012 | ||||||
Equity and other investments | |||||||
Debt securities (auction rate securities) | $ | 21 | $ | 82 | |||
Marketable equity securities | 27 | 3 | |||||
Other investments | 38 | 55 | |||||
Total equity and other investments | $ | 86 | $ | 140 | |||
Description | Nature of collateral or guarantee | February 2, 2013 | March 3, 2012 | |||||||
Student loan bonds | Student loans guaranteed 95% to 100% by the U.S. government | $ | 19 | $ | 80 | |||||
Municipal revenue bonds | 100% insured by AAA/Aaa-rated bond insurers at February 2, 2013 | 2 | 2 | |||||||
Total fair value plus accrued interest(1) | $ | 21 | $ | 82 | ||||||
(1) | The par value and weighted-average interest rates (taxable equivalent) of our ARS were $23 million and $88 million and 0.4% and 0.5%, respectively, at February 2, 2013, and March 3, 2012, respectively. |
|
|||
Fair Value Measurements Using Inputs Considered as | |||||||||||||||
Fair Value at February 2, 2013 | 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 | $ | 520 | $ | 520 | $ | — | $ | — | |||||||
Other current assets | |||||||||||||||
Foreign currency derivative instruments | 1 | — | 1 | — | |||||||||||
Equity and other investments | |||||||||||||||
Auction rate securities | 21 | — | — | 21 | |||||||||||
Marketable equity securities | 27 | 27 | — | — | |||||||||||
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 | — | — | |||||||||||
Liabilities | |||||||||||||||
Accrued liabilities | |||||||||||||||
Foreign currency derivative instruments | 2 | — | 2 | — | |||||||||||
Debt securities — Auction rate securities only | |||||||||||
Student loan bonds | Municipal revenue bonds | Total | |||||||||
Balances at February 26, 2011 | $ | 108 | $ | 2 | $ | 110 | |||||
Changes in unrealized losses in other comprehensive income | (1 | ) | — | (1 | ) | ||||||
Sales | (27 | ) | — | (27 | ) | ||||||
Balances at March 3, 2012 | $ | 80 | $ | 2 | $ | 82 | |||||
Changes in unrealized losses in other comprehensive income | 4 | — | 4 | ||||||||
Sales | (65 | ) | — | (65 | ) | ||||||
Balances at February 2, 2013 | $ | 19 | $ | 2 | $ | 21 | |||||
11-Month 2013 | 12-Month 2012 | ||||||||||||||
Impairments | Remaining Net Carrying Value | Impairments | Remaining Net Carrying Value | ||||||||||||
Continuing operations | |||||||||||||||
Goodwill | $ | 822 | $ | — | $ | 1,207 | $ | — | |||||||
Property and equipment | 70 | — | 32 | — | |||||||||||
Investments | 27 | 38 | — | — | |||||||||||
Total | $ | 919 | $ | 38 | $ | 1,239 | $ | — | |||||||
Discontinued operations(1) | |||||||||||||||
Property and equipment | $ | — | $ | — | $ | 111 | $ | — | |||||||
Tradename | — | — | 3 | — | |||||||||||
Total | $ | — | $ | — | $ | 114 | $ | — | |||||||
(1) | Property and equipment and tradename impairments associated with discontinued operations are recorded within Loss from discontinued operations in our Consolidated Statements of Earnings. |
|
|||
Domestic | International | Total | |||||||||||||||||||||||||||||||||||||||||||||
11-Month 2013 | 12-Month 2012 | 12-Month 2011 | Cumulative Amount | 11-Month 2013 | 12-Month 2012 | 12-Month 2011 | Cumulative Amount | 11-Month 2013 | 12-Month 2012 | 12-Month 2011 | Cumulative Amount | ||||||||||||||||||||||||||||||||||||
Continuing operations | |||||||||||||||||||||||||||||||||||||||||||||||
Inventory write-downs | $ | — | $ | 19 | $ | 9 | $ | 28 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 19 | $ | 9 | $ | 28 | |||||||||||||||||||||||
Property & equipment impairments(1) | (12 | ) | — | 15 | 3 | — | — | 107 | 107 | (12 | ) | — | 122 | 110 | |||||||||||||||||||||||||||||||||
Termination benefits | — | (3 | ) | 16 | 13 | — | — | — | — | — | (3 | ) | 16 | 13 | |||||||||||||||||||||||||||||||||
Facility closure and other costs | — | 4 | — | 4 | — | — | — | — | — | 4 | — | 4 | |||||||||||||||||||||||||||||||||||
Total | (12 | ) | 20 | 40 | 48 | — | — | 107 | 107 | (12 | ) | 20 | 147 | 155 | |||||||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||||||||||||||
Inventory write-downs | — | — | — | — | — | — | 15 | 15 | — | — | 15 | 15 | |||||||||||||||||||||||||||||||||||
Property & 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 | (1 | ) | (8 | ) | 13 | 4 | (1 | ) | (5 | ) | 13 | 7 | |||||||||||||||||||||||||||||||
Total | — | 25 | 10 | 35 | (1 | ) | (1 | ) | 65 | 63 | (1 | ) | 24 | 75 | 98 | ||||||||||||||||||||||||||||||||
Total | $ | (12 | ) | $ | 45 | $ | 50 | $ | 83 | $ | (1 | ) | $ | (1 | ) | $ | 172 | $ | 170 | $ | (13 | ) | $ | 44 | $ | 222 | $ | 253 | |||||||||||||||||||
Domestic | International | Total | |||||||||
Continuing operations | |||||||||||
Inventory write-downs | $ | 1 | $ | — | $ | 1 | |||||
Property and equipment impairments | 7 | 23 | 30 | ||||||||
Termination benefits | 46 | 9 | 55 | ||||||||
Investment impairments | 27 | — | 27 | ||||||||
Facility closure and other costs | 3 | 55 | 58 | ||||||||
Total | $ | 84 | $ | 87 | $ | 171 | |||||
Domestic | International | Total | |||||||||||||||||||||||||||||||||
11-Month 2013 | 12-Month 2012 | Cumulative Amount | 11-Month 2013 | 12-Month 2012 | Cumulative Amount | 11-Month 2013 | 12-Month 2012 | Cumulative Amount | |||||||||||||||||||||||||||
Continuing operations | |||||||||||||||||||||||||||||||||||
Property and equipment impairments | $ | — | $ | 17 | $ | 17 | $ | — | $ | 15 | $ | 15 | $ | — | $ | 32 | $ | 32 | |||||||||||||||||
Termination benefits | — | 1 | 1 | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||
Facility closure and other costs | (1 | ) | 5 | 4 | — | — | — | (1 | ) | 5 | 4 | ||||||||||||||||||||||||
Total | (1 | ) | 23 | 22 | — | 15 | 15 | (1 | ) | 38 | 37 | ||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Inventory write-downs | — | — | — | — | 11 | 11 | — | 11 | 11 | ||||||||||||||||||||||||||
Property and equipment impairments | — | — | — | — | 96 | 96 | — | 96 | 96 | ||||||||||||||||||||||||||
Termination benefits | — | — | — | 1 | 16 | 17 | 1 | 16 | 17 | ||||||||||||||||||||||||||
Facility closure and other costs | — | — | — | (2 | ) | 82 | 80 | (2 | ) | 82 | 80 | ||||||||||||||||||||||||
Total | — | — | — | (1 | ) | 205 | 204 | (1 | ) | 205 | 204 | ||||||||||||||||||||||||
Total | $ | (1 | ) | $ | 23 | $ | 22 | $ | (1 | ) | $ | 220 | $ | 219 | $ | (2 | ) | $ | 243 | $ | 241 | ||||||||||||||
International | |||
Continuing operations | |||
Property and equipment impairments | $ | 12 | |
Termination benefits | 19 | ||
Facility closure and other costs | 5 | ||
Total | $ | 36 | |
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Continuing operations | |||||||||||
Renew Blue | $ | 171 | $ | — | $ | — | |||||
Fiscal 2013 Europe restructuring | 36 | — | — | ||||||||
Fiscal 2013 U.S. restructuring | 257 | — | — | ||||||||
Fiscal 2012 restructuring | (1 | ) | 38 | — | |||||||
Fiscal 2011 restructuring | (12 | ) | 20 | 147 | |||||||
Total | 451 | 58 | 147 | ||||||||
Discontinued operations | |||||||||||
Fiscal 2012 restructuring | (1 | ) | 205 | — | |||||||
Fiscal 2011 restructuring | (1 | ) | 24 | 75 | |||||||
Total (Note 4) | (2 | ) | 229 | 75 | |||||||
Total | $ | 449 | $ | 287 | $ | 222 | |||||
Domestic | |||
Continuing operations | |||
Property and equipment impairments | $ | 29 | |
Termination benefits | 77 | ||
Facility closure and other costs | 151 | ||
Total | $ | 257 | |
Termination Benefits | Facility Closure and Other Costs | Total | |||||||||
Balance at March 3, 2012 | $ | — | $ | — | $ | — | |||||
Charges | 55 | 54 | 109 | ||||||||
Cash payments | (1 | ) | — | (1 | ) | ||||||
Balance at February 2, 2013 | $ | 54 | $ | 54 | $ | 108 | |||||
Termination Benefits | Facility Closure and Other Costs(1) | Total | |||||||||
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 | ||||||||
Charges | — | — | — | ||||||||
Cash payments | (2 | ) | (8 | ) | (10 | ) | |||||
Adjustments | (1 | ) | (1 | ) | (2 | ) | |||||
Changes in foreign currency exchange rates | — | — | — | ||||||||
Balance at February 2, 2013 | $ | — | $ | — | $ | — | |||||
(1) | Included within the facility closure and other costs adjustments is $10 million 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. |
Termination Benefits | Facility Closure and Other Costs(1) | 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 | ||||||||
Charges | 1 | 2 | 3 | ||||||||
Cash payments | (18 | ) | (83 | ) | (101 | ) | |||||
Adjustments | — | 28 | 28 | ||||||||
Changes in foreign currency exchange rates | — | 4 | 4 | ||||||||
Balance at February 2, 2013 | $ | — | $ | 36 | $ | 36 | |||||
(1) | Included within the the adjustments to facility closure and other costs is $34 million from the first quarter of fiscal 2013 (11-month), representing an adjustment to exclude non-cash charges or benefits, which had no impact on our Consolidated Statements of Earnings in fiscal 2013 (11-month). |
Termination Benefits | Facility Closure and Other Costs | Total | |||||||||
Balance at March 3, 2012 | $ | — | $ | — | $ | — | |||||
Charges | 109 | 152 | 261 | ||||||||
Cash payments | (65 | ) | (33 | ) | (98 | ) | |||||
Adjustments | (40 | ) | (6 | ) | (46 | ) | |||||
Balance at February 2, 2013 | $ | 4 | $ | 113 | $ | 117 | |||||
Termination Benefits | Facility Closure and Other Costs | Total | |||||||||
Balance at March 3, 2012 | $ | — | $ | — | $ | — | |||||
Charges | 19 | 5 | 24 | ||||||||
Cash payments | (19 | ) | — | (19 | ) | ||||||
Balance at February 2, 2013 | $ | — | $ | 5 | $ | 5 | |||||
|
|||
February 2, 2013 | March 3, 2012 | ||||||||||||
Principal Balance | Interest Rate | Principal Balance | Interest Rate | ||||||||||
U.S. revolving credit facility – 364-day | $ | — | — | % | $ | — | — | % | |||||
U.S. revolving credit facility – 5-year | — | — | % | — | — | % | |||||||
Europe revolving credit facility | 596 | 2.0 | % | 480 | 2.4 | % | |||||||
Canada revolving demand facility | — | — | % | — | — | % | |||||||
China revolving demand facilities | — | — | % | — | — | % | |||||||
Total short-term debt | $ | 596 | $ | 480 | |||||||||
11-Month | 12-Month | |||||||
Fiscal Year | 2013 | 2012 | ||||||
Maximum month-end amount outstanding during the year | $ | 596 | $ | 480 | ||||
Average amount outstanding during the year | $ | 477 | $ | 337 | ||||
Weighted-average interest rate at year-end | 2.0 | % | 2.4 | % | ||||
February 2, 2013 | March 3, 2012 | ||||||
2013 Notes | $ | 500 | $ | 500 | |||
2016 Notes | 349 | 349 | |||||
2021 Notes | 648 | 648 | |||||
Financing lease obligations, due 2014 to 2019, interest rates ranging from 3.0% to 8.1% | 122 | 149 | |||||
Capital lease obligations, due 2014 to 2036, interest rates ranging from 2.1% to 8.3% | 80 | 81 | |||||
Other debt, due 2018 to 2022, interest rates ranging from 3.8% to 6.7% | 1 | 1 | |||||
Total long-term debt | $ | 1,700 | $ | 1,728 | |||
Less: current portion(1) | (547 | ) | (43 | ) | |||
Total long-term debt, less current portion | $ | 1,153 | $ | 1,685 | |||
(1) | Our 2013 Notes due July 15, 2013, are classified in the current portion of long-term debt as of February 2, 2013. |
Fiscal Year | ||||
2014 | $ | 547 | ||
2015 | 45 | |||
2016 | 35 | |||
2017 | 370 | |||
2018 | 15 | |||
Thereafter | 688 | |||
Total long-term debt | $ | 1,700 | ||
|
|||
February 2, 2013 | March 3, 2012 | |||||||||||||||
Contract Type | Assets | Liabilities | Assets | Liabilities | ||||||||||||
No hedge designation (foreign exchange forward contracts) | $ | 1 | $ | — | $ | 1 | $ | (2 | ) | |||||||
11-Month | 12-Month | |||||||||||||||
2013 | 2012 | |||||||||||||||
Contract Type | Pre-tax Gain Recognized in OCI(1) | Loss 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) | $ | — | $ | (1 | ) | $ | 7 | $ | 5 | |||||||
(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. |
Gain Recognized within SG&A | ||||||||
11-Month | 12-Month | |||||||
Contract Type | 2013 | 2012 | ||||||
No hedge designation (foreign exchange forward contracts) | $ | 2 | $ | 5 | ||||
Notional Amount | ||||||||
Contract Type | February 2, 2013 | March 3, 2012 | ||||||
Derivatives not designated as hedging instruments | $ | 173 | $ | 238 | ||||
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Minimum rentals | $ | 1,080 | $ | 1,192 | $ | 1,141 | |||||
Contingent rentals | 1 | 2 | 2 | ||||||||
Total rent expense | 1,081 | 1,194 | 1,143 | ||||||||
Less: sublease income | (16 | ) | (19 | ) | (19 | ) | |||||
Net rent expense | $ | 1,065 | $ | 1,175 | $ | 1,124 | |||||
Fiscal Year | Capital Leases | Financing Leases | Operating Leases(1) | |||||||||
2014 | $ | 27 | $ | 30 | $ | 1,238 | ||||||
2015 | 25 | 28 | 1,156 | |||||||||
2016 | 17 | 25 | 1,034 | |||||||||
2017 | 5 | 19 | 888 | |||||||||
2018 | 3 | 15 | 703 | |||||||||
Thereafter | 20 | 28 | 1,994 | |||||||||
Subtotal | 97 | 145 | $ | 7,013 | ||||||||
Less: imputed interest | (17 | ) | (23 | ) | ||||||||
Present value | $ | 80 | $ | 122 | ||||||||
(1) | Operating lease obligations do not include payments to landlords covering real estate taxes and common area maintenance. These charges, if included, would increase total operating lease obligations by $1.6 billion at February 2, 2013. |
|
|||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Federal income tax at the statutory rate | $ | (65 | ) | $ | 365 | $ | 816 | ||||
State income taxes, net of federal benefit | (3 | ) | 45 | 46 | |||||||
(Benefit) expense from foreign operations | 7 | (96 | ) | (86 | ) | ||||||
Other | 5 | — | 3 | ||||||||
Goodwill impairments (non-deductible) | 287 | 395 | — | ||||||||
Income tax expense | $ | 231 | $ | 709 | $ | 779 | |||||
Effective income tax rate | (124.2 | )% | 68.0 | % | 33.4 | % | |||||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
United States | $ | 281 | $ | 1,537 | $ | 1,739 | |||||
Outside the United States | (467 | ) | (494 | ) | 592 | ||||||
Earnings (loss) from continuing operations before income tax expense and equity in income (loss) of affiliates | $ | (186 | ) | $ | 1,043 | $ | 2,331 | ||||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Current: | |||||||||||
Federal | $ | 174 | $ | 447 | $ | 735 | |||||
State | (3 | ) | 61 | 73 | |||||||
Foreign | 79 | 173 | 105 | ||||||||
250 | 681 | 913 | |||||||||
Deferred: | |||||||||||
Federal | 27 | 94 | (113 | ) | |||||||
State | (2 | ) | 1 | (2 | ) | ||||||
Foreign | (44 | ) | (67 | ) | (19 | ) | |||||
(19 | ) | 28 | (134 | ) | |||||||
Income tax expense | $ | 231 | $ | 709 | $ | 779 | |||||
February 2, 2013 | March 3, 2012 | ||||||
Accrued property expenses | $ | 194 | $ | 146 | |||
Other accrued expenses | 119 | 108 | |||||
Deferred revenue | 153 | 128 | |||||
Compensation and benefits | 95 | 103 | |||||
Stock-based compensation | 137 | 157 | |||||
Loss and credit carryforwards | 266 | 310 | |||||
Other | 125 | 121 | |||||
Total deferred tax assets | 1,089 | 1,073 | |||||
Valuation allowance | (228 | ) | (204 | ) | |||
Total deferred tax assets after valuation allowance | 861 | 869 | |||||
Property and equipment | (343 | ) | (376 | ) | |||
Goodwill and intangibles | (127 | ) | (118 | ) | |||
Inventory | (90 | ) | (85 | ) | |||
Other | (22 | ) | (27 | ) | |||
Total deferred tax liabilities | (582 | ) | (606 | ) | |||
Net deferred tax assets | $ | 279 | $ | 263 | |||
February 2, 2013 | March 3, 2012 | ||||||
Other current assets | $ | 228 | $ | 226 | |||
Other assets | 66 | 53 | |||||
Other current liabilities | (5 | ) | — | ||||
Other long-term liabilities | (10 | ) | (16 | ) | |||
Net deferred tax assets | $ | 279 | $ | 263 | |||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Balance at beginning of period | $ | 387 | $ | 359 | $ | 393 | |||||
Gross increases related to prior period tax positions | 10 | 69 | 36 | ||||||||
Gross decreases related to prior period tax positions | (22 | ) | (35 | ) | (90 | ) | |||||
Gross increases related to current period tax positions | 37 | 43 | 40 | ||||||||
Settlements with taxing authorities | (10 | ) | (20 | ) | — | ||||||
Lapse of statute of limitations | (19 | ) | (29 | ) | (20 | ) | |||||
Balance at end of period | $ | 383 | $ | 387 | $ | 359 | |||||
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11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Revenue | |||||||||||
Domestic | $ | 33,343 | $ | 37,615 | $ | 37,070 | |||||
International | 11,742 | 13,090 | 12,677 | ||||||||
Total revenue | $ | 45,085 | $ | 50,705 | $ | 49,747 | |||||
Percentage of revenue, by revenue category | |||||||||||
Domestic: | |||||||||||
Consumer Electronics | 33 | % | 36 | % | 37 | % | |||||
Computing and Mobile Phones | 44 | % | 40 | % | 37 | % | |||||
Entertainment | 10 | % | 12 | % | 14 | % | |||||
Appliances | 6 | % | 5 | % | 5 | % | |||||
Services | 6 | % | 6 | % | 6 | % | |||||
Other | 1 | % | 1 | % | 1 | % | |||||
Total | 100 | % | 100 | % | 100 | % | |||||
International: | |||||||||||
Consumer Electronics | 18 | % | 20 | % | 20 | % | |||||
Computing and Mobile Phones | 61 | % | 56 | % | 55 | % | |||||
Entertainment | 4 | % | 5 | % | 6 | % | |||||
Appliances | 10 | % | 10 | % | 9 | % | |||||
Services | 7 | % | 9 | % | 10 | % | |||||
Other | < 1% | < 1% | < 1% | ||||||||
Total | 100 | % | 100 | % | 100 | % | |||||
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Operating income (loss) | |||||||||||
Domestic | $ | 734 | $ | 1,855 | $ | 2,054 | |||||
International(1) | (859 | ) | (770 | ) | 320 | ||||||
Total operating income (loss) | (125 | ) | 1,085 | 2,374 | |||||||
Other income (expense) | |||||||||||
Gain on sale of investments | 18 | 55 | — | ||||||||
Investment income and other | 33 | 37 | 43 | ||||||||
Interest expense | (112 | ) | (134 | ) | (86 | ) | |||||
Earnings (loss) from continuing operations before income tax expense and equity in income (loss) of affiliates | $ | (186 | ) | $ | 1,043 | $ | 2,331 | ||||
Assets | |||||||||||
Domestic | $ | 10,874 | $ | 9,592 | $ | 9,610 | |||||
International | 5,913 | 6,413 | 8,239 | ||||||||
Total assets | $ | 16,787 | $ | 16,005 | $ | 17,849 | |||||
Capital expenditures | |||||||||||
Domestic | $ | 488 | $ | 488 | $ | 481 | |||||
International | 217 | 278 | 263 | ||||||||
Total capital expenditures | $ | 705 | $ | 766 | $ | 744 | |||||
Depreciation | |||||||||||
Domestic | $ | 561 | $ | 612 | $ | 615 | |||||
International | 233 | 267 | 261 | ||||||||
Total depreciation | $ | 794 | $ | 879 | $ | 876 | |||||
(1) | Included within our International segment's operating loss for fiscal 2013 (11-month) and fiscal 2012 is a $819 million and a $1.2 billion goodwill impairment charge, respectively. |
11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Net sales to customers | |||||||||||
United States | $ | 33,343 | $ | 37,615 | $ | 37,070 | |||||
Europe | 5,136 | 5,228 | 5,316 | ||||||||
Canada | 4,818 | 5,635 | 5,468 | ||||||||
China | 1,575 | 2,069 | 1,779 | ||||||||
Other | 213 | 158 | 114 | ||||||||
Total revenue | $ | 45,085 | $ | 50,705 | $ | 49,747 | |||||
Long-lived assets | |||||||||||
United States | $ | 2,404 | $ | 2,507 | $ | 2,741 | |||||
Europe | 352 | 352 | 438 | ||||||||
Canada | 341 | 432 | 474 | ||||||||
China | 142 | 161 | 147 | ||||||||
Other | 31 | 19 | 23 | ||||||||
Total long-lived assets | $ | 3,270 | $ | 3,471 | $ | 3,823 | |||||
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11-Month | 12-Month | ||||||||||
2013 | 2012 | 2011 | |||||||||
Payment made to Carphone Warehouse for its share of the profit share agreement buy-out (see Note 3, Profit Share Buy-Out) | $ | — | $ | 1,303 | $ | — | |||||
Revenue earned (primarily commission revenue and fees for information technology services provided to CPW and Carphone Warehouse) | — | — | 6 | ||||||||
SG&A incurred (primarily payroll-related costs and rent paid to CPW and Carphone Warehouse) | 1 | 20 | 8 | ||||||||
Interest expense incurred on credit facility with CPW and Carphone Warehouse as lender | — | 1 | 1 | ||||||||
Accounts payable to CPW and Carphone Warehouse at the end of the fiscal year | 1 | — | — | ||||||||
Accounts receivable from CPW and Carphone Warehouse at the end of the fiscal year | — | 1 | 2 | ||||||||
Balance outstanding on credit facility from CPW and Carphone Warehouse at the end of the fiscal year | — | — | 98 | ||||||||
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Quarter | 11-Month | ||||||||||||||||||
1st | 2nd | 3rd | 4th | 2013(1) | |||||||||||||||
Revenue | $ | 11,610 | $ | 10,547 | $ | 10,753 | $ | 16,711 | $ | 45,085 | |||||||||
Comparable store sales % change(2) | (5.3 | )% | (3.2 | )% | (4.3 | )% | (0.8 | )% | (2.9 | )% | |||||||||
Gross profit | $ | 2,907 | $ | 2,564 | $ | 2,586 | $ | 3,781 | $ | 10,649 | |||||||||
Operating income (loss)(3) | 262 | 33 | 12 | (145 | ) | (125 | ) | ||||||||||||
Net earnings (loss) from continuing operations | 161 | (7 | ) | (5 | ) | (377 | ) | (421 | ) | ||||||||||
Gain (loss) from discontinued operations, net of tax | (9 | ) | — | 6 | (2 | ) | 1 | ||||||||||||
Net earnings (loss) including noncontrolling interests | 152 | (7 | ) | 1 | (379 | ) | (420 | ) | |||||||||||
Net earnings (loss) attributable to Best Buy Co., Inc. shareholders | $ | 158 | $ | 12 | $ | (10 | ) | $ | (409 | ) | $ | (441 | ) | ||||||
Diluted earnings (loss) per share(4) | |||||||||||||||||||
Continuing operations | $ | 0.47 | $ | 0.04 | $ | (0.04 | ) | $ | (1.21 | ) | $ | (1.31 | ) | ||||||
Discontinued operations | (0.01 | ) | — | 0.01 | — | 0.01 | |||||||||||||
Diluted earnings (loss) per share | $ | 0.46 | $ | 0.04 | $ | (0.03 | ) | $ | (1.21 | ) | $ | (1.30 | ) | ||||||
Quarter | 12-Month | ||||||||||||||||||
1st | 2nd | 3rd | 4th | 2012 | |||||||||||||||
Revenue | $ | 10,812 | $ | 11,259 | $ | 12,004 | $ | 16,630 | $ | 50,705 | |||||||||
Comparable store sales % change(2) | (1.8 | )% | (2.9 | )% | 0.3 | % | (2.4 | )% | (1.7 | )% | |||||||||
Gross profit | $ | 2,746 | $ | 2,848 | $ | 2,922 | $ | 4,057 | $ | 12,573 | |||||||||
Operating income(5) | 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. shareholders(6) | $ | 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 | ) | |||||||
(1) | On November 2, 2011, our Board of Directors approved a change to our fiscal year-end from the Saturday nearest the end of February to the Saturday nearest the end of January. In the first quarter of fiscal 2013 (11-month), we began reporting our quarterly results on the basis of our new fiscal year-end. As such, the results for the month of February 2012, which are included in the audited results for fiscal 2012, were also included in the reported first quarter of fiscal 2013 (11-month). However, the results for the month of February 2012 are not included in the results for the full year of fiscal 2013 (11-month). Thus, the four quarters of fiscal year 2013 (11-month) are not additive. |
(2) | Comprised of revenue from stores operating for at least 14 full months as well as revenue related to call centers, websites 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. |
(3) | Includes $127 million, $91 million, $36 million and $203 million of restructuring charges recorded in the fiscal first, second, third and fourth quarters, respectively, and $451 million for the 11 months ended February 2, 2013, related to measures we took to restructure our businesses. Also included in the fourth quarter and 11 months ended February 2, 2013, is a $822 million goodwill impairment charge related to our Canada, Five Star, and U.S. reporting units. |
(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 $1 million, $22 million and $35 million 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 $1.2 billion goodwill impairment charge recorded in the fourth quarter related to our Best Buy Europe reporting unit. |
(6) | Includes a $1.3 billion payment related to the Mobile buy-out recorded in the fourth quarter of fiscal 2012. |
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