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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Minnesota
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41-0907483
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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7601 Penn Avenue South
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Richfield, Minnesota
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55423
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Condensed Consolidated Balance Sheets as of August 2, 2014, February 1, 2014, and August 3, 2013
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Consolidated Statements of Earnings for the three and six months ended August 2, 2014 and August 3, 2013
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Item 1.
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Financial Statements
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August 2, 2014
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February 1, 2014
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August 3, 2013
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||||||
Assets
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Current assets
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||||||
Cash and cash equivalents
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$
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2,141
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$
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2,678
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$
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1,910
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Short-term investments
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939
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223
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—
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Receivables, net
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1,005
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1,308
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1,188
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Merchandise inventories
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5,583
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5,376
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5,437
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Other current assets
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943
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900
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879
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Total current assets
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10,611
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10,485
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9,414
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Property and equipment, net
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2,532
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2,598
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2,744
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Goodwill
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425
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425
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528
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Intangibles, net
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100
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101
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177
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Other assets
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681
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404
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421
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Total assets
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$
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14,349
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$
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14,013
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$
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13,284
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||||||
Liabilities and equity
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||||||
Current liabilities
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Accounts payable
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$
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5,244
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$
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5,122
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$
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4,968
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Unredeemed gift card liabilities
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371
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406
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358
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Deferred revenue
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442
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399
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409
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Accrued compensation and related expenses
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287
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444
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343
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Accrued liabilities
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796
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873
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776
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Accrued income taxes
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68
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147
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130
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Current portion of long-term debt
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43
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45
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44
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Total current liabilities
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7,251
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7,436
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7,028
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Long-term liabilities
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976
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976
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1,017
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Long-term debt
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1,592
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1,612
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1,634
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Equity
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Best Buy Co., Inc. shareholders’ equity
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Preferred stock, $1.00 par value: Authorized — 400,000 shares; Issued and outstanding — none
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—
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—
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—
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Common stock, $0.10 par value: Authorized — 1.0 billion shares; Issued and outstanding — 349,548,000, 346,751,000 and 340,967,000 shares, respectively
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35
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35
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34
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Additional paid-in capital
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348
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300
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109
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Retained earnings
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3,649
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3,159
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2,930
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Accumulated other comprehensive income
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494
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492
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529
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Total Best Buy Co., Inc. shareholders’ equity
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4,526
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3,986
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3,602
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Noncontrolling interests
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4
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3
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3
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Total equity
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4,530
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3,989
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3,605
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Total liabilities and equity
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$
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14,349
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$
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14,013
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$
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13,284
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Three Months Ended
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Six Months Ended
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August 2, 2014
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August 3, 2013
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August 2, 2014
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August 3, 2013
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Revenue
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$
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8,896
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$
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9,266
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$
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17,931
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$
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18,613
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Cost of goods sold
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6,841
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6,808
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13,856
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13,997
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Gross profit
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2,055
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2,458
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4,075
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4,616
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Selling, general and administrative expenses
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1,812
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2,038
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3,632
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4,022
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Restructuring charges
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5
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7
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8
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13
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Operating income
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238
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413
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435
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581
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Other income (expense)
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Gain on sale of investments
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2
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14
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2
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14
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Investment income and other
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8
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5
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14
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10
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Interest expense
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(23
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)
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(26
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)
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(46
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)
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(53
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)
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Earnings from continuing operations before income tax (benefit) expense
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225
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406
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405
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552
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Income tax (benefit) expense
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79
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169
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(202
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)
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218
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Net earnings from continuing operations
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146
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237
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607
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334
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Gain (loss) from discontinued operations (Note 2), net of tax benefit (expense) of ($1), $38, ($1) and $24
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1
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11
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1
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(159
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)
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Net earnings including noncontrolling interests
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147
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248
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608
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175
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Net earnings from continuing operations attributable to noncontrolling interests
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(1
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)
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—
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(1
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)
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—
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||||
Net loss from discontinued operations attributable to noncontrolling interests
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—
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18
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—
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10
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Net earnings attributable to Best Buy Co., Inc. shareholders
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$
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146
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$
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266
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$
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607
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$
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185
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Basic earnings (loss) per share attributable to Best Buy Co., Inc. shareholders
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Continuing operations
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$
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0.42
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$
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0.69
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$
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1.74
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$
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0.98
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Discontinued operations
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—
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0.09
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—
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(0.44
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)
|
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Basic earnings per share
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$
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0.42
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$
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0.78
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$
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1.74
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$
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0.54
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Diluted earnings (loss) per share attributable to Best Buy Co., Inc. shareholders
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Continuing operations
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$
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0.42
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$
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0.69
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$
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1.73
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$
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0.97
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Discontinued operations
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—
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0.08
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—
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(0.43
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)
|
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Diluted earnings per share
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$
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0.42
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$
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0.77
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$
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1.73
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$
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0.54
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Dividends declared per common share
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$
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0.17
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$
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0.17
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$
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0.34
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$
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0.34
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Weighted-average common shares outstanding (in millions)
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|
||||||
Basic
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349.3
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340.4
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348.4
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|
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339.7
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|
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Diluted
|
352.2
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344.4
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351.6
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343.0
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Three Months Ended
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Six Months Ended
|
||||||||||||
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August 2, 2014
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August 3, 2013
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August 2, 2014
|
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August 3, 2013
|
||||||||
Net earnings including noncontrolling interests
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$
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147
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$
|
248
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$
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608
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$
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175
|
|
Foreign currency translation adjustments
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—
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(41
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)
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3
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(104
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)
|
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Unrealized loss on available-for-sale investments
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—
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(3
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)
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(1
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)
|
|
—
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|
||||
Reclassification of foreign currency translation adjustments into earnings due to sale of business
|
—
|
|
|
654
|
|
|
—
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|
|
654
|
|
||||
Reclassification of losses on available-for-sale investments into earnings
|
—
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|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Comprehensive income including noncontrolling interests
|
147
|
|
|
860
|
|
|
610
|
|
|
727
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
(1
|
)
|
|
(147
|
)
|
|
(1
|
)
|
|
(125
|
)
|
||||
Comprehensive income attributable to Best Buy Co., Inc. shareholders
|
$
|
146
|
|
|
$
|
713
|
|
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$
|
609
|
|
|
$
|
602
|
|
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Best Buy Co., Inc.
|
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|
|||||||||||||||||||||||||
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Common
Shares
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Best Buy
Co., Inc.
|
|
Non-
controlling
Interests
|
|
Total
|
|||||||||||||||
Balances at February 1, 2014
|
347
|
|
|
$
|
35
|
|
|
$
|
300
|
|
|
$
|
3,159
|
|
|
$
|
492
|
|
|
$
|
3,986
|
|
|
$
|
3
|
|
|
$
|
3,989
|
|
Net earnings, six months ended August 2, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
607
|
|
|
—
|
|
|
607
|
|
|
1
|
|
|
608
|
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||||
Unrealized losses on available-for-sale investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
|||||||
Restricted stock vested and stock options exercised
|
2
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||||
Issuance of common stock under employee stock purchase plan
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Tax deficit from stock options exercised, restricted stock vesting and employee stock purchase plan
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||||
Common stock dividends, $0.34 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(117
|
)
|
|
—
|
|
|
(117
|
)
|
|
—
|
|
|
(117
|
)
|
|||||||
Balances at August 2, 2014
|
349
|
|
|
$
|
35
|
|
|
$
|
348
|
|
|
$
|
3,649
|
|
|
$
|
494
|
|
|
$
|
4,526
|
|
|
$
|
4
|
|
|
$
|
4,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at February 2, 2013
|
338
|
|
|
$
|
34
|
|
|
$
|
54
|
|
|
$
|
2,861
|
|
|
$
|
112
|
|
|
$
|
3,061
|
|
|
$
|
654
|
|
|
$
|
3,715
|
|
Net earnings (loss), six months ended August 3, 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
185
|
|
|
—
|
|
|
185
|
|
|
(10
|
)
|
|
175
|
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
(93
|
)
|
|
(11
|
)
|
|
(104
|
)
|
|||||||
Unrealized gains (losses) on available-for-sale investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||||
Sale of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(776
|
)
|
|
(776
|
)
|
|||||||
Reclassification of foreign currency translation adjustments into earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
508
|
|
|
508
|
|
|
146
|
|
|
654
|
|
|||||||
Reclassification of losses on available-for-sale investments into earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
|||||||
Restricted stock vested and stock options exercised
|
2
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||||
Issuance of common stock under employee stock purchase plan
|
1
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||||
Tax deficit from stock options exercised, restricted stock vesting and employee stock purchase plan
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||||
Common stock dividends, $0.34 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(116
|
)
|
|
—
|
|
|
(116
|
)
|
|
—
|
|
|
(116
|
)
|
|||||||
Balances at August 3, 2013
|
341
|
|
|
$
|
34
|
|
|
$
|
109
|
|
|
$
|
2,930
|
|
|
$
|
529
|
|
|
$
|
3,602
|
|
|
$
|
3
|
|
|
$
|
3,605
|
|
|
Six Months Ended
|
||||||
|
August 2, 2014
|
|
August 3, 2013
|
||||
Operating activities
|
|
|
|
||||
Net earnings including noncontrolling interests
|
$
|
608
|
|
|
$
|
175
|
|
Adjustments to reconcile net earnings including noncontrolling interests to total cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
319
|
|
|
375
|
|
||
Amortization of definite-lived intangible assets
|
—
|
|
|
12
|
|
||
Restructuring charges
|
8
|
|
|
113
|
|
||
(Gain) loss on sale of business, net
|
(1
|
)
|
|
123
|
|
||
Stock-based compensation
|
40
|
|
|
45
|
|
||
Deferred income taxes
|
(394
|
)
|
|
(3
|
)
|
||
Other, net
|
8
|
|
|
15
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Receivables
|
301
|
|
|
145
|
|
||
Merchandise inventories
|
(205
|
)
|
|
569
|
|
||
Other assets
|
17
|
|
|
(59
|
)
|
||
Accounts payable
|
120
|
|
|
(1,114
|
)
|
||
Other liabilities
|
(270
|
)
|
|
(392
|
)
|
||
Income taxes
|
(64
|
)
|
|
15
|
|
||
Total cash provided by operating activities
|
487
|
|
|
19
|
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
|
|
||
Additions to property and equipment
|
(258
|
)
|
|
(301
|
)
|
||
Purchases of investments
|
(1,194
|
)
|
|
(3
|
)
|
||
Sales of investments
|
479
|
|
|
36
|
|
||
Proceeds from sale of business, net of cash transferred upon sale
|
37
|
|
|
67
|
|
||
Change in restricted assets
|
26
|
|
|
—
|
|
||
Other, net
|
3
|
|
|
(2
|
)
|
||
Total cash used in investing activities
|
(907
|
)
|
|
(203
|
)
|
||
|
|
|
|
||||
Financing activities
|
|
|
|
|
|
||
Borrowings of debt
|
—
|
|
|
2,414
|
|
||
Repayments of debt
|
(12
|
)
|
|
(2,021
|
)
|
||
Dividends paid
|
(118
|
)
|
|
(116
|
)
|
||
Issuance of common stock under employee stock purchase plan and for the exercise of stock options
|
17
|
|
|
22
|
|
||
Other, net
|
(1
|
)
|
|
(7
|
)
|
||
Total cash provided by (used in) financing activities
|
(114
|
)
|
|
292
|
|
||
Effect of exchange rate changes on cash
|
(3
|
)
|
|
(24
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
(537
|
)
|
|
84
|
|
||
Cash and cash equivalents at beginning of period
|
2,678
|
|
|
1,826
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,141
|
|
|
$
|
1,910
|
|
1.
|
Basis of Presentation
|
2.
|
Discontinued Operations
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||
Revenue
|
$
|
—
|
|
|
$
|
1,287
|
|
|
$
|
—
|
|
|
$
|
2,750
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring charges
(1)
|
—
|
|
|
47
|
|
|
—
|
|
|
100
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations before income tax benefit
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
(235
|
)
|
||||
Income tax benefit
(2)
|
—
|
|
|
38
|
|
|
—
|
|
|
24
|
|
||||
Gain on sale of discontinued operations
|
2
|
|
|
24
|
|
|
2
|
|
|
52
|
|
||||
Income tax expense on sale
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Net gain (loss) from discontinued operations, including noncontrolling interests
|
1
|
|
|
11
|
|
|
1
|
|
|
(159
|
)
|
||||
Net loss from discontinued operations attributable to noncontrolling interests
|
—
|
|
|
18
|
|
|
—
|
|
|
10
|
|
||||
Net gain (loss) from discontinued operations attributable to Best Buy Co., Inc. shareholders
|
$
|
1
|
|
|
$
|
29
|
|
|
$
|
1
|
|
|
$
|
(149
|
)
|
(1)
|
See Note 5,
Restructuring Charges
, for further discussion of the restructuring charges associated with discontinued operations.
|
(2)
|
Income tax benefit for the three months ended August 3, 2013 includes a
$27 million
benefit related to a tax allocation between continuing and discontinued operations. The effective tax rate for discontinued operations for the three and six months ended August 3, 2013 differs from the statutory tax rate primarily due to the previously mentioned tax allocation, restructuring charges and the
$175 million
impairment of our investment in Best Buy Europe, which generally included no related tax benefit. The deferred tax assets related to the restructuring charges generally resulted in an increase in the valuation allowance in an equal amount, while the investment impairment is not tax deductible.
|
•
|
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
August 2, 2014 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
$
|
211
|
|
|
$
|
211
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
111
|
|
|
—
|
|
|
111
|
|
|
—
|
|
||||
Short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper
|
364
|
|
|
—
|
|
|
364
|
|
|
—
|
|
||||
Treasury bills
|
100
|
|
|
100
|
|
|
—
|
|
|
—
|
|
||||
Other current assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivative instruments
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Auction rate securities
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Marketable securities that fund deferred compensation
|
98
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
|
|
Fair Value Measurements
Using Inputs Considered as
|
||||||||||||
|
Fair Value at
February 1, 2014 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
$
|
53
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
80
|
|
|
—
|
|
|
80
|
|
|
—
|
|
||||
Treasury bills
|
263
|
|
|
263
|
|
|
—
|
|
|
—
|
|
||||
Short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper
|
100
|
|
|
—
|
|
|
100
|
|
|
—
|
|
||||
Other current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency derivative instruments
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Auction rate securities
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Marketable securities that fund deferred compensation
|
96
|
|
|
96
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency derivative instruments
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
|
|
Fair Value Measurements
Using Inputs Considered as
|
||||||||||||
|
Fair Value at
August 3, 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
|
$
|
334
|
|
|
$
|
334
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency derivative instruments
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Auction rate securities
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||
Marketable equity securities
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Marketable securities that fund deferred compensation
|
91
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
||||||||||||
|
Impairments
|
|
Remaining Net Carrying Value
(1)
|
|
Impairments
|
|
Remaining Net Carrying Value
(1)
|
||||||||
Continuing operations
|
|
|
|
|
|
|
|
||||||||
Property and equipment (non-restructuring)
|
$
|
31
|
|
|
$
|
8
|
|
|
$
|
19
|
|
|
$
|
—
|
|
Restructuring activities
(2)
|
|
|
|
|
|
|
|
||||||||
Property and equipment
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total continuing operations
|
$
|
31
|
|
|
$
|
8
|
|
|
$
|
22
|
|
|
$
|
—
|
|
Discontinued operations
(3)
|
|
|
|
|
|
|
|
||||||||
Property and equipment
(4)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
220
|
|
|
$
|
—
|
|
Tradename
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
224
|
|
|
$
|
—
|
|
(1)
|
Remaining net carrying value approximates fair value.
|
(2)
|
See Note 5,
Restructuring Charges
, for additional information.
|
(3)
|
Property and equipment and tradename impairments associated with discontinued operations are recorded within gain (loss) from discontinued operations in our Consolidated Statements of Earnings.
|
(4)
|
Includes the
$175 million
impairment to write down the book value of our investment in Best Buy Europe to fair value based on expected net proceeds as described in Note 2,
Discontinued Operations
. The impairment was calculated based on the fair value and foreign currency translation adjustment associated with the business and was applied to the fixed assets.
|
|
Goodwill
|
|
Indefinite-lived Tradenames
|
||||||||||||||||||||
|
Domestic
|
|
International
|
|
Total
|
|
Domestic
|
|
International
|
|
Total
|
||||||||||||
Balances at February 1, 2014
|
$
|
425
|
|
|
$
|
—
|
|
|
$
|
425
|
|
|
$
|
19
|
|
|
$
|
82
|
|
|
$
|
101
|
|
Changes in foreign currency exchange rates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Balances at August 2, 2014
|
$
|
425
|
|
|
$
|
—
|
|
|
$
|
425
|
|
|
$
|
19
|
|
|
$
|
81
|
|
|
$
|
100
|
|
|
Goodwill
|
|
Indefinite-lived Tradenames
|
||||||||||||||||||||
|
Domestic
|
|
International
|
|
Total
|
|
Domestic
|
|
International
|
|
Total
|
||||||||||||
Balances at February 2, 2013
|
$
|
528
|
|
|
$
|
—
|
|
|
$
|
528
|
|
|
$
|
19
|
|
|
$
|
112
|
|
|
$
|
131
|
|
Changes in foreign currency exchange rates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Sale of Best Buy Europe
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
||||||
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Balances at August 3, 2013
|
$
|
528
|
|
|
$
|
—
|
|
|
$
|
528
|
|
|
$
|
19
|
|
|
$
|
84
|
|
|
$
|
103
|
|
|
August 2, 2014
|
|
February 1, 2014
|
|
August 3, 2013
|
||||||||||||||||||
|
Gross
Carrying
Amount
(1)
|
|
Cumulative
Impairment
(1)
|
|
Gross
Carrying
Amount
(1)
|
|
Cumulative
Impairment
(1)
|
|
Gross
Carrying
Amount
|
|
Cumulative
Impairment
|
||||||||||||
Goodwill
|
$
|
1,308
|
|
|
$
|
(883
|
)
|
|
$
|
1,308
|
|
|
$
|
(883
|
)
|
|
$
|
1,412
|
|
|
$
|
(884
|
)
|
(1)
|
Excludes the gross carrying amount and cumulative impairment related to mindSHIFT goodwill, which was sold during the fourth quarter of fiscal 2014.
|
|
Six Months Ended
|
||||||
|
August 2, 2014
|
|
August 3, 2013
|
||||
Continuing operations
|
|
|
|
||||
Renew Blue
|
$
|
14
|
|
|
$
|
21
|
|
Fiscal 2013 U.S. restructuring
|
(6
|
)
|
|
(8
|
)
|
||
Total continuing operations
|
8
|
|
|
13
|
|
||
Discontinued operations
|
|
|
|
||||
Fiscal 2013 Europe restructuring
|
—
|
|
|
95
|
|
||
Fiscal 2012 restructuring
|
—
|
|
|
5
|
|
||
Total discontinued operations (Note 2)
|
—
|
|
|
100
|
|
||
Total restructuring charges
|
$
|
8
|
|
|
$
|
113
|
|
|
Domestic
|
|
International
|
|
Total
|
||||||||||||||||||||||||||||||
|
Six Months Ended
|
|
Cumulative
Amount |
|
Six Months Ended
|
|
Cumulative
Amount |
|
Six Months Ended
|
|
Cumulative
Amount |
||||||||||||||||||||||||
|
August 2,
2014 |
|
August 3,
2013 |
|
|
August 2,
2014 |
|
August 3,
2013 |
|
|
August 2,
2014 |
|
August 3,
2013 |
|
|||||||||||||||||||||
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Inventory write-downs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Property and equipment impairments
|
—
|
|
|
2
|
|
|
14
|
|
|
1
|
|
|
1
|
|
|
26
|
|
|
1
|
|
|
3
|
|
|
40
|
|
|||||||||
Termination benefits
|
7
|
|
|
8
|
|
|
159
|
|
|
5
|
|
|
6
|
|
|
42
|
|
|
12
|
|
|
14
|
|
|
201
|
|
|||||||||
Investment impairments
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||||||
Facility closure and other costs
|
—
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
4
|
|
|
62
|
|
|
1
|
|
|
4
|
|
|
65
|
|
|||||||||
Total
|
$
|
7
|
|
|
$
|
10
|
|
|
$
|
220
|
|
|
$
|
7
|
|
|
$
|
11
|
|
|
$
|
130
|
|
|
$
|
14
|
|
|
$
|
21
|
|
|
$
|
350
|
|
|
Termination
Benefits
|
|
Facility
Closure and
Other Costs
|
|
Total
|
||||||
Balances at February 1, 2014
|
$
|
111
|
|
|
$
|
51
|
|
|
$
|
162
|
|
Charges
|
28
|
|
|
7
|
|
|
35
|
|
|||
Cash payments
|
(106
|
)
|
|
(9
|
)
|
|
(115
|
)
|
|||
Adjustments
(1)
|
(16
|
)
|
|
(4
|
)
|
|
(20
|
)
|
|||
Changes in foreign currency exchange rates
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||
Balances at August 2, 2014
|
$
|
17
|
|
|
$
|
40
|
|
|
$
|
57
|
|
(1)
|
Adjustments to termination benefits were due to higher-than-expected employee retention. Adjustments to facility closure and other costs represent changes in sublease assumptions and reductions in our remaining lease obligations.
|
|
Termination
Benefits
|
|
Facility
Closure and
Other Costs
|
|
Total
|
||||||
Balances at February 2, 2013
|
$
|
54
|
|
|
$
|
54
|
|
|
$
|
108
|
|
Charges
|
15
|
|
|
9
|
|
|
24
|
|
|||
Cash payments
|
(53
|
)
|
|
(11
|
)
|
|
(64
|
)
|
|||
Adjustments
|
(5
|
)
|
|
8
|
|
|
3
|
|
|||
Changes in foreign currency exchange rates
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||
Balances at August 3, 2013
|
$
|
11
|
|
|
$
|
57
|
|
|
$
|
68
|
|
|
Six Months Ended
|
|
Cumulative Amount
|
||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
|||||||
Continuing operations
|
|
|
|
|
|
||||||
Property and equipment impairments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29
|
|
Termination benefits
|
—
|
|
|
—
|
|
|
77
|
|
|||
Facility closure and other costs
|
(6
|
)
|
|
(8
|
)
|
|
139
|
|
|||
Total
|
$
|
(6
|
)
|
|
$
|
(8
|
)
|
|
$
|
245
|
|
|
Facility
Closure and
Other Costs
|
||
Balances at February 1, 2014
|
$
|
58
|
|
Charges
|
1
|
|
|
Cash payments
|
(11
|
)
|
|
Adjustments
|
(6
|
)
|
|
Balances at August 2, 2014
|
$
|
42
|
|
|
Termination
Benefits
|
|
Facility
Closure and
Other Costs
|
|
Total
|
||||||
Balances at February 2, 2013
|
$
|
4
|
|
|
$
|
113
|
|
|
$
|
117
|
|
Charges
|
—
|
|
|
3
|
|
|
3
|
|
|||
Cash payments
|
(2
|
)
|
|
(31
|
)
|
|
(33
|
)
|
|||
Adjustments
(1)
|
(2
|
)
|
|
(13
|
)
|
|
(15
|
)
|
|||
Balances at August 3, 2013
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
72
|
|
(1)
|
Adjustments to facility closure and other costs represent reductions in our remaining lease obligations.
|
|
Termination
Benefits |
|
Facility
Closure and Other Costs |
|
Total
|
||||||
Balances at February 2, 2013
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Charges
|
36
|
|
|
2
|
|
|
38
|
|
|||
Cash payments
|
(2
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|||
Adjustments
(1)
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|||
Balances at August 3, 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Represents the remaining liability written off as a result of the sale of Best Buy Europe, as described in Note 2,
Discontinued Operations
.
|
|
Facility
Closure and
Other Costs
|
||
Balances at February 2, 2013
|
$
|
36
|
|
Cash payments
|
(33
|
)
|
|
Adjustments
(1)
|
(1
|
)
|
|
Changes in foreign currency exchange rates
|
(2
|
)
|
|
Balances at August 3, 2013
|
$
|
—
|
|
(1)
|
Included within Adjustments is a
$5 million
charge related to a change in sublease assumptions, offset by a
$6 million
adjustment to write off the remaining liability as a result of the sale of Best Buy Europe, as described in Note 2,
Discontinued Operations
.
|
|
August 2, 2014
|
|
February 1, 2014
|
|
August 3, 2013
|
||||||
2016 Notes
|
$
|
350
|
|
|
$
|
349
|
|
|
$
|
349
|
|
2018 Notes
|
500
|
|
|
500
|
|
|
500
|
|
|||
2021 Notes
|
649
|
|
|
649
|
|
|
648
|
|
|||
Financing lease obligations
|
83
|
|
|
95
|
|
|
109
|
|
|||
Capital lease obligations
|
52
|
|
|
63
|
|
|
71
|
|
|||
Other debt
|
1
|
|
|
1
|
|
|
1
|
|
|||
Total long-term debt
|
1,635
|
|
|
1,657
|
|
|
1,678
|
|
|||
Less: current portion
|
(43
|
)
|
|
(45
|
)
|
|
(44
|
)
|
|||
Total long-term debt, less current portion
|
$
|
1,592
|
|
|
$
|
1,612
|
|
|
$
|
1,634
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings from continuing operations
|
$
|
146
|
|
|
$
|
237
|
|
|
$
|
607
|
|
|
$
|
334
|
|
Net earnings from continuing operations attributable to noncontrolling interests
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Net earnings from continuing operations attributable to Best Buy Co., Inc.
|
$
|
145
|
|
|
$
|
237
|
|
|
$
|
606
|
|
|
$
|
334
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
349.3
|
|
|
340.4
|
|
|
348.4
|
|
|
339.7
|
|
||||
Effect of potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Nonvested share awards
|
2.9
|
|
|
4.0
|
|
|
3.2
|
|
|
3.3
|
|
||||
Weighted-average common shares outstanding, assuming dilution
|
352.2
|
|
|
344.4
|
|
|
351.6
|
|
|
343.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net earnings per share from continuing operations attributable to Best Buy Co., Inc.
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.42
|
|
|
$
|
0.69
|
|
|
$
|
1.74
|
|
|
$
|
0.98
|
|
Diluted
|
$
|
0.42
|
|
|
$
|
0.69
|
|
|
$
|
1.73
|
|
|
$
|
0.97
|
|
|
Foreign Currency Translation
|
|
Available-For-Sale Investments
|
|
Total
|
||||||
Balances at February 1, 2014
|
$
|
485
|
|
|
$
|
7
|
|
|
$
|
492
|
|
Foreign currency translation adjustments
|
3
|
|
|
—
|
|
|
3
|
|
|||
Unrealized losses on available-for-sale investments
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Balances at August 2, 2014
|
$
|
488
|
|
|
$
|
6
|
|
|
$
|
494
|
|
|
Foreign Currency Translation
|
|
Available-For-Sale Investments
|
|
Total
|
||||||
Balances at May 4, 2013
|
$
|
80
|
|
|
$
|
2
|
|
|
$
|
82
|
|
Foreign currency translation adjustments
|
(60
|
)
|
|
—
|
|
|
(60
|
)
|
|||
Reclassification of foreign currency translation adjustments into earnings due to sale of business
|
508
|
|
|
—
|
|
|
508
|
|
|||
Unrealized losses on available-for-sale investments
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Reclassification of losses on available-for-sale investments into earnings
|
—
|
|
|
1
|
|
|
1
|
|
|||
Balances at August 3, 2013
|
$
|
528
|
|
|
$
|
1
|
|
|
$
|
529
|
|
|
Foreign Currency Translation
|
|
Available-For-Sale Investments
|
|
Total
|
||||||
Balances at February 2, 2013
|
$
|
113
|
|
|
$
|
(1
|
)
|
|
$
|
112
|
|
Foreign currency translation adjustments
|
(93
|
)
|
|
—
|
|
|
(93
|
)
|
|||
Reclassification of foreign currency translation adjustments into earnings due to sale of business
|
508
|
|
|
—
|
|
|
508
|
|
|||
Unrealized gains on available-for-sale investments
|
—
|
|
|
1
|
|
|
1
|
|
|||
Reclassification of losses on available-for-sale investments into earnings
|
—
|
|
|
1
|
|
|
1
|
|
|||
Balances at August 3, 2013
|
$
|
528
|
|
|
$
|
1
|
|
|
$
|
529
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||
Domestic
|
$
|
7,585
|
|
|
$
|
7,775
|
|
|
$
|
15,366
|
|
|
$
|
15,721
|
|
International
|
1,311
|
|
|
1,491
|
|
|
2,565
|
|
|
2,892
|
|
||||
Total revenue
|
$
|
8,896
|
|
|
$
|
9,266
|
|
|
$
|
17,931
|
|
|
$
|
18,613
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||
Domestic
|
$
|
258
|
|
|
$
|
420
|
|
|
$
|
484
|
|
|
$
|
642
|
|
International
|
(20
|
)
|
|
(7
|
)
|
|
(49
|
)
|
|
(61
|
)
|
||||
Total operating income
|
238
|
|
|
413
|
|
|
435
|
|
|
581
|
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Gain on sale of investments
|
2
|
|
|
14
|
|
|
2
|
|
|
14
|
|
||||
Investment income and other
|
8
|
|
|
5
|
|
|
14
|
|
|
10
|
|
||||
Interest expense
|
(23
|
)
|
|
(26
|
)
|
|
(46
|
)
|
|
(53
|
)
|
||||
Earnings from continuing operations before income tax (benefit) expense
|
$
|
225
|
|
|
$
|
406
|
|
|
$
|
405
|
|
|
$
|
552
|
|
|
August 2, 2014
|
|
February 1, 2014
|
|
August 3, 2013
|
||||||
Domestic
|
$
|
11,847
|
|
|
$
|
11,146
|
|
|
$
|
10,606
|
|
International
|
2,502
|
|
|
2,867
|
|
|
2,678
|
|
|||
Total assets
|
$
|
14,349
|
|
|
$
|
14,013
|
|
|
$
|
13,284
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Overview
|
•
|
Business Strategy Update
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance-Sheet Arrangements and Contractual Obligations
|
•
|
Significant Accounting Policies and Estimates
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||
Revenue
|
$
|
8,896
|
|
|
$
|
9,266
|
|
|
$
|
17,931
|
|
|
$
|
18,613
|
|
Revenue % decline
|
(4.0
|
)%
|
|
(0.4
|
)%
|
|
(3.7
|
)%
|
|
(5.3
|
)%
|
||||
Comparable sales % decline
|
(2.7
|
)%
|
|
(0.6
|
)%
|
|
(2.3
|
)%
|
|
(1.0
|
)%
|
||||
Gross profit
|
$
|
2,055
|
|
|
$
|
2,458
|
|
|
$
|
4,075
|
|
|
$
|
4,616
|
|
Gross profit as a % of revenue
(1)
|
23.1
|
%
|
|
26.5
|
%
|
|
22.7
|
%
|
|
24.8
|
%
|
||||
SG&A
|
$
|
1,812
|
|
|
$
|
2,038
|
|
|
$
|
3,632
|
|
|
$
|
4,022
|
|
SG&A as a % of revenue
(1)
|
20.4
|
%
|
|
22.0
|
%
|
|
20.3
|
%
|
|
21.6
|
%
|
||||
Restructuring charges
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
13
|
|
Operating income
|
$
|
238
|
|
|
$
|
413
|
|
|
$
|
435
|
|
|
$
|
581
|
|
Operating income as a % of revenue
|
2.7
|
%
|
|
4.5
|
%
|
|
2.4
|
%
|
|
3.1
|
%
|
||||
Net earnings from continuing operations
(2)
|
$
|
145
|
|
|
$
|
237
|
|
|
$
|
606
|
|
|
$
|
334
|
|
Gain (loss) from discontinued operations
(3)
|
$
|
1
|
|
|
$
|
29
|
|
|
$
|
1
|
|
|
$
|
(149
|
)
|
Net earnings attributable to Best Buy Co., Inc. shareholders
|
$
|
146
|
|
|
$
|
266
|
|
|
$
|
607
|
|
|
$
|
185
|
|
Diluted earnings per share from continuing operations
|
$
|
0.42
|
|
|
$
|
0.69
|
|
|
$
|
1.73
|
|
|
$
|
0.97
|
|
Diluted earnings per share
|
$
|
0.42
|
|
|
$
|
0.77
|
|
|
$
|
1.73
|
|
|
$
|
0.54
|
|
(1)
|
Because retailers vary in how they record costs of operating their supply chain between cost of goods sold and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers’ corresponding rates. For additional information regarding costs classified in cost of goods sold and SG&A, refer to Note 1,
Summary of Significant Accounting Policies
, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended
February 1, 2014
.
|
(2)
|
Includes both net earnings from continuing operations and net earnings from continuing operations attributable to noncontrolling interests.
|
(3)
|
Includes both net gain (loss) from discontinued operations and net loss from discontinued operations attributable to noncontrolling interests.
|
|
Three Months Ended
|
|
Six Months Ended
|
||
|
August 2, 2014
|
|
August 2, 2014
|
||
Comparable sales impact
|
(2.6
|
)%
|
|
(2.2
|
)%
|
Non-comparable sales
(1)
|
(0.6
|
)%
|
|
(0.7
|
)%
|
Impact of foreign currency exchange rate fluctuations
|
(0.6
|
)%
|
|
(0.6
|
)%
|
Net store changes
|
(0.2
|
)%
|
|
(0.2
|
)%
|
Total revenue decrease
|
(4.0
|
)%
|
|
(3.7
|
)%
|
(1)
|
Non-comparable sales reflects the impact of revenue streams not included within our comparable sales calculation, such as credit card revenue, gift card breakage, commercial sales, and sales of merchandise to wholesalers and dealers.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||
Operating income
|
$
|
238
|
|
|
$
|
413
|
|
|
$
|
435
|
|
|
$
|
581
|
|
Net LCD settlements
(1)
|
—
|
|
|
(229
|
)
|
|
—
|
|
|
(229
|
)
|
||||
Non-restructuring asset impairments
|
13
|
|
|
15
|
|
|
22
|
|
|
27
|
|
||||
Restructuring charges
|
5
|
|
|
7
|
|
|
8
|
|
|
13
|
|
||||
Non-GAAP operating income
|
$
|
256
|
|
|
$
|
206
|
|
|
$
|
465
|
|
|
$
|
392
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings from continuing operations
|
$
|
145
|
|
|
$
|
237
|
|
|
$
|
606
|
|
|
$
|
334
|
|
After-tax impact of net LCD settlements
(1)
|
—
|
|
|
(147
|
)
|
|
—
|
|
|
(147
|
)
|
||||
After-tax impact of non-restructuring asset impairments
|
8
|
|
|
10
|
|
|
14
|
|
|
19
|
|
||||
After-tax impact of restructuring charges
|
4
|
|
|
5
|
|
|
6
|
|
|
9
|
|
||||
After-tax impact of gain on sale of investments
|
(1
|
)
|
|
(9
|
)
|
|
(1
|
)
|
|
(9
|
)
|
||||
Income tax impact of Best Buy Europe sale
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||
Income tax impact of Europe legal entity reorganization
|
—
|
|
|
—
|
|
|
(353
|
)
|
|
—
|
|
||||
Non-GAAP net earnings from continuing operations
|
$
|
156
|
|
|
$
|
112
|
|
|
$
|
272
|
|
|
$
|
222
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share from continuing operations
|
$
|
0.42
|
|
|
$
|
0.69
|
|
|
$
|
1.73
|
|
|
$
|
0.97
|
|
Per share impact of net LCD settlements
(1)
|
—
|
|
|
(0.43
|
)
|
|
—
|
|
|
(0.43
|
)
|
||||
Per share impact of non-restructuring asset impairments
|
0.02
|
|
|
0.03
|
|
|
0.04
|
|
|
0.06
|
|
||||
Per share impact of restructuring charges
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
||||
Per share impact of gain on sale of investments
|
—
|
|
|
(0.03
|
)
|
|
—
|
|
|
(0.03
|
)
|
||||
Per share impact of income tax impact of Best Buy Europe sale
|
—
|
|
|
0.05
|
|
|
—
|
|
|
0.05
|
|
||||
Per share impact of income tax impact of Europe legal entity reorganization
|
—
|
|
|
—
|
|
|
(1.01
|
)
|
|
—
|
|
||||
Non-GAAP diluted earnings per share from continuing operations
|
$
|
0.44
|
|
|
$
|
0.32
|
|
|
$
|
0.77
|
|
|
$
|
0.65
|
|
(1)
|
Amounts for the six months ended August 3, 2013, exclude the pre-tax impact of $44 million of net proceeds from LCD settlements reached in the first quarter of fiscal 2014, as we did not adjust for LCD settlements prior to the material settlements reached in the second quarter of fiscal 2014.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||
Revenue
|
$
|
7,585
|
|
|
$
|
7,775
|
|
|
$
|
15,366
|
|
|
$
|
15,721
|
|
Revenue % gain (decline)
|
(2.4
|
)%
|
|
0.1
|
%
|
|
(2.3
|
)%
|
|
(5.1
|
)%
|
||||
Comparable sales % decline
(1)
|
(2.0
|
)%
|
|
(0.4
|
)%
|
|
(1.6
|
)%
|
|
(0.8
|
)%
|
||||
Gross profit
|
$
|
1,778
|
|
|
$
|
2,125
|
|
|
$
|
3,541
|
|
|
$
|
3,984
|
|
Gross profit as a % of revenue
|
23.4
|
%
|
|
27.3
|
%
|
|
23.0
|
%
|
|
25.3
|
%
|
||||
SG&A
|
$
|
1,521
|
|
|
$
|
1,704
|
|
|
$
|
3,056
|
|
|
$
|
3,340
|
|
SG&A as a % of revenue
|
20.1
|
%
|
|
21.9
|
%
|
|
19.9
|
%
|
|
21.2
|
%
|
||||
Restructuring charges
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Operating income
|
$
|
258
|
|
|
$
|
420
|
|
|
$
|
484
|
|
|
$
|
642
|
|
Operating income as a % of revenue
|
3.4
|
%
|
|
5.4
|
%
|
|
3.1
|
%
|
|
4.1
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Selected Online Revenue Data
|
|
|
|
|
|
|
|
||||||||
Online revenue as a % of total segment revenue
|
7.7
|
%
|
|
6.1
|
%
|
|
7.9
|
%
|
|
6.2
|
%
|
||||
Comparable online sales % growth
(1)
|
22.0
|
%
|
|
10.5
|
%
|
|
25.7
|
%
|
|
13.4
|
%
|
(1)
|
Comparable online sales is included in the comparable sales calculation.
|
|
Three Months Ended
|
|
Six Months Ended
|
||
|
August 2, 2014
|
|
August 2, 2014
|
||
Comparable sales impact
|
(1.9
|
)%
|
|
(1.6
|
)%
|
Non-comparable sales
(1)
|
(0.5
|
)%
|
|
(0.6
|
)%
|
Net store changes
|
—
|
%
|
|
(0.1
|
)%
|
Total revenue decrease
|
(2.4
|
)%
|
|
(2.3
|
)%
|
(1)
|
Non-comparable sales reflects the impact of revenue streams not included within our comparable sales calculation, such as credit card revenue, gift card breakage, commercial sales, and sales of merchandise to wholesalers and dealers.
|
|
Fiscal 2015
|
|
Fiscal 2014
|
||||||||||||||||||||
|
Total Stores at Beginning of Second Quarter
|
|
Stores Opened
|
|
Stores Closed
|
|
Total Stores at End of Second Quarter
|
|
Total Stores at Beginning of Second Quarter
|
|
Stores Opened
|
|
Stores Closed
|
|
Total Stores at End of Second Quarter
|
||||||||
Best Buy
|
1,053
|
|
|
—
|
|
|
—
|
|
|
1,053
|
|
|
1,055
|
|
|
—
|
|
|
—
|
|
|
1,055
|
|
Best Buy Mobile stand-alone
|
406
|
|
|
—
|
|
|
(15
|
)
|
|
391
|
|
|
419
|
|
|
—
|
|
|
(3
|
)
|
|
416
|
|
Pacific Sales stand-alone
|
30
|
|
|
—
|
|
|
(1
|
)
|
|
29
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
Magnolia Audio Video stand-alone
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Total Domestic segment stores
|
1,493
|
|
|
—
|
|
|
(16
|
)
|
|
1,477
|
|
|
1,512
|
|
|
—
|
|
|
(3
|
)
|
|
1,509
|
|
|
Revenue Mix
|
|
Comparable Sales
|
||||||||
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||
Consumer Electronics
|
31
|
%
|
|
30
|
%
|
|
0.2
|
%
|
|
(5.5
|
)%
|
Computing and Mobile Phones
|
47
|
%
|
|
49
|
%
|
|
(5.9
|
)%
|
|
5.8
|
%
|
Entertainment
|
6
|
%
|
|
5
|
%
|
|
16.1
|
%
|
|
(29.8
|
)%
|
Appliances
|
9
|
%
|
|
8
|
%
|
|
8.2
|
%
|
|
14.2
|
%
|
Services
|
6
|
%
|
|
7
|
%
|
|
(8.9
|
)%
|
|
1.5
|
%
|
Other
|
1
|
%
|
|
1
|
%
|
|
n/a
|
|
|
n/a
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
(2.0
|
)%
|
|
(0.4
|
)%
|
•
|
Consumer Electronics:
The
0.2%
comparable sales gain was driven primarily by an increase in the sales of large screen televisions. This gain was partially offset by a decrease in the sales of digital imaging products due to industry declines consistent with those experienced in prior quarters.
|
•
|
Computing and Mobile Phones:
The
5.9%
comparable sales decline primarily resulted from a decline in mobile phones due to less successful promotions compared to the prior year, as well as a decline in tablets from industry softness similar to the prior quarter. These declines were partially offset by increased sales of notebook computers driven by student offerings.
|
•
|
Entertainment:
The
16.1%
comparable sales gain was driven primarily by gaming sales due to new console launches in the fourth quarter of fiscal 2014, partially offset by declines in movies and music due to continued industry declines and rationalization of the store space dedicated to these products.
|
•
|
Appliances:
The
8.2%
comparable sales gain was a result of gains in major appliances driven by the emphasis on dedicated labor in select stores, the addition of Pacific Kitchen & Home stores-within-a-store, and effective promotions.
|
•
|
Services:
The
8.9%
comparable sales decline was primarily driven by lower mobile repair revenue due to successfully implementing initiatives to decrease claim severity and frequency, lower attach rates, and higher mobile warranty premium costs which translate into lower commission revenue.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||||||
Revenue
|
$
|
1,311
|
|
|
$
|
1,491
|
|
|
$
|
2,565
|
|
|
$
|
2,892
|
|
Revenue % decline
|
(12.1
|
)%
|
|
(2.9
|
)%
|
|
(11.3
|
)%
|
|
(6.3
|
)%
|
||||
Comparable sales % decline
(1)
|
(6.7
|
)%
|
|
(1.8
|
)%
|
|
(6.3
|
)%
|
|
(2.3
|
)%
|
||||
Gross profit
|
$
|
277
|
|
|
$
|
333
|
|
|
$
|
534
|
|
|
$
|
632
|
|
Gross profit as a % of revenue
|
21.1
|
%
|
|
22.3
|
%
|
|
20.8
|
%
|
|
21.9
|
%
|
||||
SG&A
|
$
|
291
|
|
|
$
|
334
|
|
|
$
|
576
|
|
|
$
|
682
|
|
SG&A as a % of revenue
|
22.2
|
%
|
|
22.4
|
%
|
|
22.5
|
%
|
|
23.6
|
%
|
||||
Restructuring charges
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
11
|
|
Operating loss
|
$
|
(20
|
)
|
|
$
|
(7
|
)
|
|
$
|
(49
|
)
|
|
$
|
(61
|
)
|
Operating loss as a % of revenue
|
(1.5
|
)%
|
|
(0.5
|
)%
|
|
(1.9
|
)%
|
|
(2.1
|
)%
|
(1)
|
Comparable online sales is included in the comparable sales calculation.
|
|
Three Months Ended
|
|
Six Months Ended
|
||
|
August 2, 2014
|
|
August 2, 2014
|
||
Comparable sales impact
|
(6.4
|
)%
|
|
(6.0
|
)%
|
Impact of foreign currency exchange rate fluctuations
|
(3.2
|
)%
|
|
(3.9
|
)%
|
Net store changes
|
(1.3
|
)%
|
|
(0.7
|
)%
|
Non-comparable sales
(1)
|
(1.2
|
)%
|
|
(0.7
|
)%
|
Total revenue decrease
|
(12.1
|
)%
|
|
(11.3
|
)%
|
(1)
|
Non-comparable sales reflects the impact of revenue streams not included within our comparable sales calculation, such as credit card revenue, gift card breakage, commercial sales, and sales of merchandise to wholesalers and dealers.
|
|
Fiscal 2015
|
|
Fiscal 2014
|
||||||||||||||||||||
|
Total Stores at Beginning of Second Quarter
|
|
Stores Opened
|
|
Stores Closed
|
|
Total Stores at End of Second Quarter
|
|
Total Stores at Beginning of Second Quarter
|
|
Stores Opened
|
|
Stores Closed
|
|
Total Stores at End of Second Quarter
|
||||||||
Canada
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Future Shop
|
137
|
|
|
—
|
|
|
(2
|
)
|
|
135
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
Best Buy
|
72
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
72
|
|
Best Buy Mobile stand-alone
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
|
China
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Five Star
|
186
|
|
|
—
|
|
|
(2
|
)
|
|
184
|
|
|
208
|
|
|
—
|
|
|
(11
|
)
|
|
197
|
|
Mexico
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Best Buy
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
14
|
|
|
1
|
|
|
—
|
|
|
15
|
|
Express
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total International segment stores
|
470
|
|
|
—
|
|
|
(4
|
)
|
|
466
|
|
|
489
|
|
|
1
|
|
|
(11
|
)
|
|
479
|
|
|
Revenue Mix
|
|
Comparable Sales
|
||||||||
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
August 2, 2014
|
|
August 3, 2013
|
|
August 2, 2014
|
|
August 3, 2013
|
||||
Consumer Electronics
|
26
|
%
|
|
28
|
%
|
|
(12.6
|
)%
|
|
(7.3
|
)%
|
Computing and Mobile Phones
|
37
|
%
|
|
36
|
%
|
|
(5.5
|
)%
|
|
(2.2
|
)%
|
Entertainment
|
5
|
%
|
|
4
|
%
|
|
12.2
|
%
|
|
(27.7
|
)%
|
Appliances
|
27
|
%
|
|
27
|
%
|
|
(5.3
|
)%
|
|
13.7
|
%
|
Services
|
4
|
%
|
|
5
|
%
|
|
(7.5
|
)%
|
|
(7.2
|
)%
|
Other
|
1
|
%
|
|
< 1%
|
|
|
n/a
|
|
|
n/a
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
(6.7
|
)%
|
|
(1.8
|
)%
|
•
|
Consumer Electronics:
The
12.6%
comparable sales decline was driven primarily by a decrease in the sales of televisions in China and digital imaging products across the segment. The decline in sales of televisions in China was due to the end of a government subsidized energy-efficiency program which benefited the prior year. Additionally, the decrease in digital imaging products was a result of device convergence and industry trends, similar to trends seen in the Domestic segment.
|
•
|
Computing and Mobile Phones
: The
5.5%
comparable sales decline was primarily driven by mobile phones in Canada due to regulatory changes, which have resulted in overall market softness and had a negative impact on pricing.
|
•
|
Entertainment:
The
12.2%
comparable sales gain was primarily driven by Canada due to growth in gaming from new console launches in the fourth quarter of fiscal 2014. This growth was partially offset by a decline in movies and music, as a result of similar trends to those experienced in our Domestic segment.
|
•
|
Appliances:
The
5.3%
comparable sales decline was primarily due to a decrease in sales of appliances in China due to the end of a government subsidized energy-efficiency program which benefited the prior year.
|
•
|
Services
: The
7.5%
comparable sales decline was primarily due to a decrease in sales of warranties in Canada driven by the elimination of three-year warranty plans for mobile phones and a comparable sales decline in other applicable categories.
|
|
August 2, 2014
|
|
February 1, 2014
|
|
August 3, 2013
|
||||||
Cash and cash equivalents
|
$
|
2,141
|
|
|
$
|
2,678
|
|
|
$
|
1,910
|
|
Short-term investments
|
939
|
|
|
223
|
|
|
—
|
|
|||
Total cash and cash equivalents and short-term investments
|
$
|
3,080
|
|
|
$
|
2,901
|
|
|
$
|
1,910
|
|
|
Six Months Ended
|
||||||
|
August 2, 2014
|
|
August 3, 2013
|
||||
Total cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
487
|
|
|
$
|
19
|
|
Investing activities
|
(907
|
)
|
|
(203
|
)
|
||
Financing activities
|
(114
|
)
|
|
292
|
|
||
Effect of exchange rate changes on cash
|
(3
|
)
|
|
(24
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
$
|
(537
|
)
|
|
$
|
84
|
|
Rating Agency
|
|
Rating
|
|
Outlook
|
Standard & Poor's
|
|
BB
|
|
Stable
|
Moody's
|
|
Baa2
|
|
Stable
|
Fitch
|
|
BB
|
|
Stable
|
Non-GAAP debt to EBITDAR =
|
Non-GAAP debt
|
|
EBITDAR
|
|
|
August 2, 2014
(1)
|
|
February 1, 2014
(1)
|
|
August 3, 2013
(1)
|
||||||
Debt (including current portion)
|
$
|
1,635
|
|
|
$
|
1,657
|
|
|
$
|
1,678
|
|
Capitalized operating lease obligations (8 times rental expense)
(2)
|
7,429
|
|
|
7,484
|
|
|
7,555
|
|
|||
Non-GAAP debt
|
$
|
9,064
|
|
|
$
|
9,141
|
|
|
$
|
9,233
|
|
|
|
|
|
|
|
||||||
Net earnings (loss) including noncontrolling interests
(3)
|
$
|
962
|
|
|
$
|
689
|
|
|
$
|
(135
|
)
|
Goodwill impairment
|
—
|
|
|
—
|
|
|
822
|
|
|||
Interest expense, net
|
54
|
|
|
53
|
|
|
71
|
|
|||
Income tax (benefit) expense
|
(22
|
)
|
|
398
|
|
|
464
|
|
|||
Depreciation and amortization expense
(4)
|
658
|
|
|
692
|
|
|
771
|
|
|||
Rental expense
|
929
|
|
|
935
|
|
|
944
|
|
|||
EBITDAR
|
$
|
2,581
|
|
|
$
|
2,767
|
|
|
$
|
2,937
|
|
|
|
|
|
|
|
||||||
Debt to net earnings (loss) ratio
|
1.7
|
|
|
2.4
|
|
|
(12.4
|
)
|
|||
Non-GAAP debt to EBITDAR ratio
|
3.5
|
|
|
3.3
|
|
|
3.1
|
|
(1)
|
Debt is reflected as of the balance sheet dates for each of the respective fiscal periods, while rental expense and the other components of EBITDAR represent activity for the 12 months ended as of each of the respective dates.
|
(2)
|
The multiple of eight times annual rental expense in the calculation of our capitalized operating lease obligations is the multiple used for the retail sector by one of the nationally recognized credit rating agencies that rate our creditworthiness, and we consider it to be an appropriate multiple for our lease portfolio.
|
(3)
|
We utilize net earnings (loss) including noncontrolling interests within our calculation; as such, net earnings and related cash flows attributable to noncontrolling interests are available to service our debt and operating lease commitments.
|
(4)
|
Depreciation and amortization expense includes impairments of fixed assets, investments and intangible assets (including impairments associated with our fiscal restructuring activities) and excludes $229 million of net LCD-related legal settlements that occurred in the second quarter of fiscal 2014. Amounts include the impact of net proceeds from LCD settlements of $44 million, $16 million and $13 million reached in the first quarter of fiscal 2014, fourth quarter of fiscal 2013 and third quarter of fiscal 2013, respectively. We did not exclude LCD settlements prior to the material settlements reached in the second quarter of fiscal 2014.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 6.
|
Exhibits
|
3.1
|
|
Restated Articles of Incorporation (incorporated herein by reference to the Definitive Proxy Statement filed by Best Buy Co., Inc. on May 12, 2009)
|
|
|
|
3.2
|
|
Amended and Restated By-Laws (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Best Buy Co., Inc. on September 26, 2013)
|
|
|
|
10.1
|
|
Form of Best Buy Co., Inc. Director Restricted Stock Unit Award Agreement (2014)
|
|
|
|
10.2
|
|
Form of Best Buy Co., Inc. Director Restricted Stock Unit Award Agreement for Non-U.S. Directors (2014)
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(1)
|
|
|
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(1)
|
|
|
|
101
|
|
The following financial information from our Quarterly Report on Form 10-Q for the second quarter of fiscal 2015, filed with the SEC on September 10, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets at August 2, 2014; February 1, 2014; and August 3, 2013, (ii) the Consolidated Statements of Earnings for the three and six months ended August 2, 2014 and August 3, 2013, (iii) the Consolidated Statements of Comprehensive Income for the three and six months ended August 2, 2014 and August 3, 2013, (iv) the Consolidated Statements of Cash Flows for the six months ended August 2, 2014 and August 3, 2013, (v) the Consolidated Statements of Changes in Shareholders’ Equity for the six months ended August 2, 2014 and August 3, 2013, and (vi) the Notes to Condensed Consolidated Financial Statements.
|
(1)
|
The certifications in Exhibit 32.1 and Exhibit 32.2 to this Quarterly Report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
|
|
BEST BUY CO., INC.
|
|
|
(Registrant)
|
|
|
|
|
Date: September 10, 2014
|
By:
|
/s/ HUBERT JOLY
|
|
|
Hubert Joly
|
|
|
President and Chief Executive Officer
|
|
|
(duly authorized and principal executive officer)
|
|
|
|
Date: September 10, 2014
|
By:
|
/s/ SHARON L. McCOLLAM
|
|
|
Sharon L. McCollam
|
|
|
Chief Administrative Officer and Chief Financial Officer
|
|
|
(duly authorized and principal financial officer and principal accounting officer)
|
I.
|
The Award
. As of the Award Date set forth above, Best Buy Co., Inc. (“
Best Buy
”) grants to you the number of restricted stock units (the “
Units
”) stated in the Award Notification (the “
Award
”) accompanying this Agreement (this “
Agreement
”), on the terms and subject to the conditions contained in this Agreement and the Best Buy Co., Inc. 2004 Omnibus Stock and Incentive Plan, as amended (the “
Plan
”). Capitalized terms not defined in the body of this Agreement are defined in Section 5 below. By your acceptance of this Award, you acknowledge receipt of a copy of the Prospectus for the Plan and your agreement to the terms and conditions of the Plan and this Agreement.
|
II.
|
Units.
|
2.1
|
Vesting; Holding Period
. Each Unit entitles you to receive 1 share of common stock of Best Buy (the “
Shares
”).
All of the Units will vest in full on the one-year anniversary of the Award Date (the “
Vesting Date
”). Within 30 days after conclusion of your service on the Board of Directors of Best Buy (the “
Board
”), each vested Unit will be exchanged for 1 share of common stock of Best Buy (the “
Shares
”).
|
2.2
|
Transfer Restrictions
. While you are serving on the Board, you may not sell, assign, pledge or otherwise transfer any vested or unvested Units (or any interest in or right to the Units), other than by will or the laws of descent and distribution, and any such attempted transfer will be null and void (the “
Transfer Restrictions
”). If your service on the Board is terminated prior to the Vesting Date for any reason other than Cause, a pro rata portion (based on your length of service during the vesting period) of the Units will vest as of such termination date. All unvested Units will be forfeited as of such date. If your service on the Board is terminated prior to the Vesting Date for Cause, all Units will be forfeited as of the date of termination.
|
2.3
|
Other Restrictions
. The Units are subject to forfeiture to Best Buy as provided in this Agreement and the Plan.
|
2.4
|
Limitation of Rights Regarding Shares
. Until issuance of the Shares, you will not have any rights of a shareholder with respect to your Units.
|
2.5
|
Income Taxes
. You are liable for any federal and state income or other taxes incurred by you upon the lapse of the Transfer Restrictions, and any subsequent disposition of the Units. Best Buy recommends that you consult with your own tax advisor regarding the tax consequences of the Units.
|
III.
|
Restrictive Covenant and Forfeiture.
By accepting this Award, you agree to the Transfer Restrictions and the restrictions and agreements contained in this Article III (the “
Restrictive Covenants
”) and you agree that the Restrictive Covenants and the remedies described in this Article III are reasonable and necessary to protect the legitimate interests of Best Buy. Notwithstanding anything in this Agreement, if you are an attorney, the Restrictive Covenants apply to you only to the extent they are not inconsistent with the rules of professional conduct applicable to you.
|
3.1
|
Confidentiality.
In consideration of the Award, you acknowledge that the Company Group operates in a competitive environment and has a substantial interest in protecting its Confidential Information, and you agree, during your service with the Company Group and thereafter, to maintain the confidentiality of the Confidential Information and to use such Confidential Information for the exclusive benefit of the Company Group.
|
3.2
|
Non-Solicitation
. During the time period you serve on the Board and ending on the first anniversary of the date of your termination of service, you shall not:
|
(a)
|
solicit, induce or attempt to induce any employee, contract worker, consultant or other independent agent of the Company Group to cease employment or engagement with the Company Group, or in any way interfere adversely with the relationship between any such employee, contract worker, consultant or other independent agent and the Company Group;
|
(b)
|
induce or attempt to induce any employee, contract worker, consultant or other independent agent of the Company Group to work for, render services to, provide advice to, or supply Confidential Information to any third person or entity;
|
(c)
|
knowingly employ, or otherwise knowingly pay for services rendered by, any employee of the Company Group in any business enterprise with which you may be associated, connected or affiliated;
|
(d)
|
induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of the Company Group to cease doing business with the Company Group, or in any way interfere with the then existing business relationship between any such customer, supplier, licensee, licensor or other business relation and the Company Group; or
|
(e)
|
assist, solicit, or encourage any other person, directly or indirectly, in carrying out any activity set forth above that would be prohibited by any of the provisions of this Agreement if such activity were carried out by you. In particular, you will not, directly or indirectly, induce any employee, contract worker, consultant or other independent agent of the Company Group to carry out any such activity.
|
3.3
|
Violations
. In the event (a) you breach any of the Restrictive Covenants, (b) you engage in conduct materially adverse to the interests of the Company Group, including any material violations of any Company Group policy, (c) you engage in intentional misconduct that caused or contributed to the restatement of any financial statements of Best Buy, (d) you materially violate the terms of any agreement to which you and a member of the Company Group is a party or (e) you engage in a criminal act, fraud, or violation of any securities laws, then notwithstanding any other provision of this Agreement to the contrary, Best Buy, in its sole discretion, may take one or more of the following actions with respect to your Award (and shall, in any event, take all action required by applicable law):
|
(i)
|
require you to immediately return to Best Buy any Units or Shares still under your control; and
|
(ii)
|
require you to promptly reimburse Best Buy the fair market value of any such Units or Shares that are no longer under your control.
|
3.4
|
Recovery Policy.
Amounts paid under the Agreement shall be subject to recovery by Best Buy in accordance with and to the maximum extent required under the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act and any implementing regulations adopted pursuant thereto.
|
3.5
|
Right of Set-Off
. By accepting the Award, you agree that any member of the Company Group may set off any amount owed to you (including wages or other compensation, fringe benefits or vacation pay) against any amounts you owe under this Article III.
|
3.6
|
Partial Invalidity
. If any portion of this Article III is determined by any court of competent jurisdiction to be unenforceable in any respect, it shall be interpreted to be valid to the maximum extent for which it reasonably may be enforced, and enforced as so interpreted, all as determined by such court in such action. You acknowledge the uncertainty of the law in this respect and expressly stipulate that this Agreement is to be given the construction that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.
|
3.7
|
Remedy for Breach
. You agree that a breach of any of the Restrictive Covenants would cause material and irreparable harm to Best Buy that would be difficult or impossible to measure, and that damages or other legal remedies available to Best Buy for any such injury would, therefore, be an inadequate remedy for any such breach. Accordingly, you agree that if you breach any Restrictive Covenant, Best Buy shall be entitled, in addition to and without limitation upon all other remedies Best Buy may have under this Agreement, at law or otherwise, to obtain injunctive or other appropriate equitable relief, without bond or other security, to restrain any such breach. Such equitable relief in any court shall be available to Best Buy in lieu of, or prior to or pending determination in any arbitration proceeding. You further agree that the duration of the Restrictive Covenants shall be extended by the same amount of time that you are in breach of any Restrictive Covenant.
|
IV.
|
General Terms and Conditions
.
|
4.1
|
Service and Terms of Plan
. This Agreement does not guarantee your continued service with Best Buy. This award is granted pursuant to the Plan and is subject to its terms. In the event of any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.
|
4.2
|
Governing Law, Jurisdiction and Venue
. The Award and the provisions of this Agreement are governed by, and subject to, the laws of the State of Minnesota, without regard to the conflict of law provisions, as provided in the Plan. You and Best Buy agree that the state and federal courts located in the State of Minnesota shall have personal jurisdiction over the parties to this Agreement, and that the sole venues to adjudicate any dispute arising under this Agreement shall be the District Courts of Hennepin County, State of Minnesota and the United States District Court for the District of Minnesota; and each party waives any argument that any other forum would be more convenient or proper.
|
4.3
|
409A Compliance
. Notwithstanding any provision of this Agreement to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of service that are considered deferred compensation under Section 409A of the Internal Revenue Code, references to your “termination of service” (and corollary terms) with Best Buy shall be construed to refer to your “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with Best Buy. To the extent required by Section 409A(a)(2)(B)(i), to the extent that you are a specified employee, payment to you upon your separation from service will be delayed and paid promptly after the earlier of the date that is six (6) months after the date of such separation from service or the date of your death after such separation from service. For purposes hereof, whether you are a “specified employee” will be determined in accordance with the default provisions of Treasury Regulation Section 1.409A-1(i) with the “identification date” to be December 31 and the “effective date” to be the April 1 following the identification date (as such terms are used under such regulation).
|
V.
|
Definitions.
The following capitalized terms used herein will have the following meanings:
|
5.1
|
"
Affiliate
" means an entity controlled directly or indirectly by Best Buy, where “control” will mean the right, either directly or indirectly, to elect a majority of the directors thereof without the consent or acquiescence of any third party.
|
5.2
|
“
Cause
” means you:
|
(a)
|
are charged with, convicted of or enter a plea of guilty or
nolo contendere
to: (i) a felony, (ii) any crime involving moral turpitude, dishonesty, breach of trust or unethical business conduct, or (iii) any crime involving the business of the Company Group;
|
(b)
|
in the performance of your duties for the Board or otherwise to the detriment of the Company Group, engage in: (i) dishonesty that is harmful to the Company Group, monetarily or otherwise, (ii) willful or gross misconduct, (iii) willful or gross neglect, (iv) fraud, (v) misappropriation, (vi) embezzlement, or (vii) theft;
|
(c)
|
fail to comply with the applicable policies or practices of the Company Group;
|
(d)
|
are adjudicated in any civil suit, or acknowledge in writing in any agreement or stipulation, to have committed any theft, embezzlement, fraud, or other act of dishonesty involving any other person;
|
(e)
|
are determined, in the sole judgment of the Board or any individual or individuals the Board authorizes to act on its behalf, to have willfully engaged in conduct that is harmful to the Company Group, monetarily or otherwise;
|
(f)
|
breach any provision of this Agreement (including but not limited to any Restrictive Covenants) or any other agreement between you and any member of the Company Group; or
|
(g)
|
engage in any activity intended to benefit any entity at the expense of the Company Group or intended to benefit any competitor of the Company Group.
|
5.3
|
“
Committee
” means the Compensation and Human Resources Committee of the Board (or its duly appointed agent).
|
5.4
|
“
Company Group
” means, collectively, Best Buy and its Affiliates.
|
5.5
|
“
Confidential Information
” means all “Confidential Information” as that term is defined in Best Buy’s Confidentiality Policy, and includes, without limitation, any and all information in whatever form, whether written, electronically stored, orally transmitted or memorized relating to trade secrets, customer lists, records and other information regarding customers, price lists and pricing policies, financial information, records, ledgers and information, purchase orders, agreements and related data, business development and strategic plans, products and technologies, product tests, manufacturing costs, product or service pricing, sales and marketing plans, research and development plans, personnel and employment records, files, data and policies (regardless of whether the information pertains to you or other employees of the Company Group), tax information, business and sales methods and operations, business correspondence, memoranda and other records, inventions, improvements and discoveries, processes and methods, business operations and related data formulae, computer records and related data, know-how, research and development, trademark, technology, technical information, copyrighted material, and any other confidential or proprietary data and information which you encounter during employment, all of which are held, possessed and/or owned by the Company Group and all of which are used in the operations and business of the Company Group. Confidential Information does not include information which is or becomes generally known within the Company Group’s industry through no act or omission by you.
|
I.
|
The Award
. As of the Award Date set forth above, Best Buy Co., Inc. (“
Best Buy
”) grants to you the number of restricted stock units (the “
Units
”) stated in the Award Notification (the “
Award
”) accompanying this Agreement (this “
Agreement
”), on the terms and subject to the conditions contained in this Agreement and the Best Buy Co., Inc. 2004 Omnibus Stock and Incentive Plan, as amended (the “
Plan
”). Capitalized terms not defined in the body of this Agreement are defined in Section 9 below. By your acceptance of this Award, you acknowledge receipt of a copy of the Prospectus for the Plan and your agreement to the terms and conditions of the Plan and this Agreement.
|
II.
|
Units.
|
2.1
|
Vesting; Holding Period
. Each Unit entitles you to receive 1 share of common stock of Best Buy (the “
Shares
”).
All of the Units will vest in full on the one-year anniversary of the Award Date (the “
Vesting Date
”). Within 30 days after conclusion of your service on the Board of Directors of Best Buy (the “
Board
”), each vested Unit will be exchanged for 1 share of common stock of Best Buy (the “
Shares
”).
|
2.2
|
Transfer Restrictions
. While you are serving on the Board, you may not sell, assign, pledge or otherwise transfer any vested or unvested Units (or any interest in or right to the Units), other than by will or the laws of descent and distribution, and any such attempted transfer will be null and void (the “
Transfer Restrictions
”). If your service on the Board is terminated prior to the Vesting Date for any reason other than Cause, a pro rata portion (based on your length of service during the vesting period) of the Units will vest as of such termination date. All unvested Units will be forfeited as of such date. If your service on the Board is terminated prior to the Vesting Date for Cause, all Units will be forfeited as of the date of termination.
|
2.3
|
Other Restrictions
. The Units are subject to forfeiture to Best Buy as provided in this Agreement and the Plan.
|
2.4
|
Limitation of Rights Regarding Shares
. Until issuance of the Shares, you will not have any rights of a shareholder with respect to your Units.
|
2.5
|
Income Taxes
. You are liable for any Tax-Related Items (as defined in Section 5 below). Best Buy recommends that you consult with your own tax advisor regarding the tax consequences of the Units.
|
III.
|
Restrictive Covenant and Forfeiture
.
By accepting the Award, you agree to the Transfer Restrictions and the restrictions and agreements contained in this Article III (the “
Restrictive Covenants
”); and you agree that the Restrictive Covenants and the remedies described in this Article III are reasonable and necessary to protect the legitimate interests of Best Buy. Notwithstanding anything in this Agreement, if you are an attorney, the Restrictive Covenants apply to you only to the extent they are not inconsistent with the rules of professional conduct applicable to you.
|
3.1
|
Confidentiality
. In consideration of the Award, you acknowledge that the Company Group operates in a competitive environment and has a substantial interest in protecting its Confidential Information, and you agree, during your service with the Company Group and thereafter, to maintain the confidentiality of the Confidential Information and to use such Confidential Information for the exclusive benefit of the Company Group.
|
3.2
|
Non-Solicitation
. During the time period you serve on the Board and ending on the first anniversary of the date of your termination of service, you shall not:
|
(a)
|
solicit, induce or attempt to induce any employee, contract worker, consultant or other independent agent of the Company Group to cease employment or engagement with the Company Group, or in any way interfere adversely with the relationship between any such employee, contract worker, consultant or other independent agent and the Company Group;
|
(b)
|
induce or attempt to induce any employee, contract worker, consultant or other independent agent of the Company Group to work for, render services to, provide advice to, or supply Confidential Information to any third person or entity;
|
(c)
|
knowingly employ, or otherwise knowingly pay for services rendered by, any employee of the Company Group in any business enterprise with which you may be associated, connected or affiliated;
|
(d)
|
induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of the Company Group to cease doing business with the Company Group, or in any way interfere with the then existing business relationship between any such customer, supplier, licensee, licensor or other business relation and the Company Group; or
|
(e)
|
assist, solicit, or encourage any other person, directly or indirectly, in carrying out any activity set forth above that would be prohibited by any of the provisions of this Agreement if such activity were carried out by you. In particular, you will not, directly or indirectly, induce any employee, contract worker, consultant or other independent agent of the Company Group to carry out any such activity.
|
3.3
|
Violations
. In the event (a) you breach any of the Restrictive Covenants, (b) you engage in conduct materially adverse to the interests of the Company Group, including any material violations of any Company Group policy, (c) you engage in intentional misconduct that caused or contributed to the restatement of any financial statements of Best Buy, (d) you materially violate the terms of any agreement to which you and a member of the Company Group is a party or (e) you engage in a criminal act, fraud, or violation of any securities laws, then notwithstanding any other provision of this Agreement to the contrary, Best Buy, in its sole discretion, may take one or more of the following actions with respect to your Award (and shall, in any event, take all action required by applicable law):
|
(i)
|
require you to immediately return to Best Buy any Units or Shares still under your control; and
|
(ii)
|
require you to promptly reimburse Best Buy the fair market value of any such Units or Shares that are no longer under your control.
|
3.4
|
Recovery Policy
. Amounts paid under the Agreement shall be subject to recovery by Best Buy in accordance with and to the maximum extent required under the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
|
3.5
|
Right of Set-Off
. By accepting the Award, you consent to a deduction from any amounts any member of the Company Group owes you from time to time (including amounts owed to you as fees, wages or other compensation or fringe benefits, as well as any other amounts owed to you by any member of the Company Group), to the extent of the amounts you owe any member of the Company Group under this Section 3.5. Whether or not Best Buy elects to make any set-off in whole or in part, if Best Buy does not recover by means of set-off the full amount you owe, calculated as set forth above, you agree to immediately pay the unpaid balance to Best Buy.
|
3.6
|
Partial Invalidity
. If any portion of this Article III is determined by any court of competent jurisdiction to be unenforceable in any respect, it shall be interpreted to be valid to the maximum extent for which it reasonably may be enforced, and enforced as so interpreted, all as determined by such court in such action. You acknowledge the uncertainty of the law in this respect and expressly stipulate that this Agreement is to be given the construction that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.
|
3.7
|
Remedy for Breach
. You agree that a breach of any of the Restrictive Covenants would cause material and irreparable harm to Best Buy that would be difficult or impossible to measure, and that damages or other legal remedies available to Best Buy for any such injury would, therefore, be an inadequate remedy for any such breach. Accordingly, you agree that if you breach any Restrictive Covenant, Best Buy shall be entitled, in addition to and without limitation upon all other remedies Best Buy may have under this Agreement, at law or otherwise, to obtain injunctive or other appropriate equitable relief, without bond or other security, to restrain any such breach. Such equitable relief in any court shall be available to Best Buy in lieu of, or prior to or pending determination in any arbitration proceeding. You further agree that the duration of the Restrictive Covenants shall be extended by the same amount of time that you are in breach of any Restrictive Covenant.
|
IV.
|
Nature of Grant
. In accepting the Award, you acknowledge, understand and agree that:
|
4.1
|
the Plan is established voluntarily by Best Buy, it is discretionary in nature and it may be modified, amended, suspended or terminated by Best Buy at any time;
|
4.2
|
the grant of the Units is voluntary and occasional and does not create any contractual or other right to receive future grants of restricted stock units, or benefits in lieu of restricted stock units, even if restricted stock units have been granted in the past;
|
4.3
|
all decisions with respect to future grants of restricted stock units, if any, will be at the sole discretion of Best Buy;
|
4.4
|
you are voluntarily participating in the Plan;
|
4.5
|
the Award and your participation in the Plan will not create a right to continued service on the Board or derogate from any right of Best Buy’s shareholders to remove you from the Board at any time in accordance with Best Buy’s bylaws and any applicable law;
|
4.6
|
the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
|
4.7
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the Units resulting from your ceasing to provide service to Best Buy (for any reason whatsoever) and, in consideration of the grant of Units to which you are otherwise not entitled, you irrevocably agree never to institute any claim against Best Buy, waive your ability, if any, to bring any such claim and release Best Buy from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims;
|
4.8
|
unless otherwise provided in the Plan or by Best Buy in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and
|
4.9
|
Best Buy shall not be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Units or any amounts due to you pursuant to the settlement of the Units or the subsequent sale of any Shares acquired upon settlement.
|
V.
|
Responsibility for Taxes
.
|
5.1
|
Regardless of any action Best Buy
takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“
Tax-Related Items
”), you acknowledge that the ultimate liability for all Tax-Related Items is and remains your responsibility and may exceed the amount, if any, actually withheld by Best Buy. You further acknowledge that Best Buy (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units, including, but not limited to, the grant or vesting of the Units, the issuance of Shares upon settlement of the Units, the subsequent sale of such Shares and the receipt of any dividends or dividend equivalents; and (b) does not commit to and is under no obligation to structure the terms of the Award or any aspect of the Units to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you have become subject to Tax-Related Items in more than one jurisdiction between the date of award and the date of any relevant taxable event, as applicable, you acknowledge that Best Buy
may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
|
5.2
|
To the extent Best Buy has a withholding obligation with respect to Tax-Related Items, you authorize Best Buy or its agent, at Best Buy’s discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:
|
(a)
|
withholding from any cash compensation paid to you by Best Buy;
|
(b)
|
withholding from proceeds of the sale of Shares acquired upon settlement of the Units either through a voluntary sale or through a mandatory sale arranged by Best Buy (on your behalf pursuant to this authorization); or
|
(c)
|
withholding in Shares to be issued upon settlement of the Units.
|
5.3
|
To avoid negative accounting treatment, Best Buy may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan.
|
5.4
|
You shall pay to Best Buy any amount of Tax-Related Items that Best Buy may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means described in this Article V. Best Buy may refuse to issue or deliver the Shares or the proceeds of the sale of Shares if you fail to comply with your obligations in connection with the Tax-Related Items.
|
VI.
|
No Advice Regarding Award
. Best Buy is not providing any tax, legal or financial advice, nor is Best Buy making any recommendations regarding your participation in the Plan or your acquisition or sale of the Shares. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.
|
VII.
|
Data Privacy.
You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement and any other award materials by Best Buy for the exclusive purpose of implementing, administering and managing your participation in the Plan.
|
VIII.
|
General Terms and Conditions
.
|
8.1
|
Service and Terms of Plan
. This Agreement does not guarantee your continued service with Best Buy. This Award is granted pursuant to the Plan and is subject to its terms. In the event of any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.
By your acceptance of this Award, you acknowledge receipt of a copy of the Prospectus for the Plan and your agreement to the terms and conditions of the Plan and this Agreement.
|
8.2
|
Electronic Delivery and Participation
. Best Buy may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by Best Buy or a third party designated by Best Buy. Further, the parties hereto shall be entitled to rely on delivery of a facsimile or other electronic copy of this Agreement, and delivery by either party of such facsimile or electronic copy shall be legally effective to create a valid and binding agreement between the parties in accordance with the terms hereof.
|
8.3
|
Language
. If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
8.4
|
Governing Law, Jurisdiction and Venue
. The Award and the provisions of this Agreement are governed by, and subject to, the laws of the State of Minnesota, without regard to the conflict of law provisions, as provided in the Plan. You and Best Buy agree that the state and federal courts located in the State of Minnesota shall have personal jurisdiction over the parties to this Agreement, and that the sole venues to adjudicate any dispute arising under this Agreement shall be the District Courts of Hennepin County, State of Minnesota and the United States District Court for the District of Minnesota; and each party waives any argument that any other forum would be more convenient or proper.
|
8.5
|
Appendix.
Notwithstanding any provisions in this Agreement, the grant of Units shall be subject to any special terms and conditions set forth in the attached country-specific appendix to this Agreement (the “
Appendix
”). If you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent Best Buy determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Agreement.
|
8.6
|
Imposition of Other Requirements
. Best Buy reserves the right to impose other requirements on your participation in the Plan, on the Units and on any Shares acquired under the Plan, to the extent Best Buy determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
8.7
|
Compliance with Law
. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, Best Buy shall not be required to deliver any Shares issuable upon settlement of the Units prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“
SEC
”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval Best Buy shall, in its absolute discretion, deem necessary or advisable. You understand that Best Buy is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, you agree that Best Buy shall have unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of the Shares.
|
8.8
|
Insider Trading Restrictions/Market Abuse Laws
. You acknowledge that, depending on your country, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to acquire or sell Shares or rights to Shares under the Plan during such times as you are considered to have “inside information” regarding Best Buy (as defined by applicable laws in your country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Best Buy insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you are advised to speak to your personal advisor on this matter.
|
8.9
|
Waiver
. You acknowledge that a waiver by Best Buy of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other award recipient.
|
IX.
|
Definitions. The following capitalized terms used herein will have the following meanings:
|
9.1
|
“
Affiliate
” means an entity controlled directly or indirectly by Best Buy, where “control” will mean the right, either directly or indirectly, to elect a majority of the directors thereof without the consent or acquiescence of any third party.
|
9.2
|
“
Cause
” means you:
|
(a)
|
are charged with, convicted of or enter a plea of guilty or
nolo contendere
to: (i) a felony (or a crime of comparable magnitude under applicable law), (ii) any crime involving moral turpitude, dishonesty, breach of trust or unethical business conduct, or (iii) any crime involving the business of the Company Group;
|
(b)
|
in the performance of your duties for the Board or otherwise to the detriment of the Company Group, engage in: (i) dishonesty that is harmful to the Company Group, monetarily or otherwise, (ii) willful or gross misconduct, (iii) willful or gross neglect, (iv) fraud, (v) misappropriation, (vi) embezzlement, or (vii) theft;
|
(c)
|
fail to comply with the policies or practices of the Company Group;
|
(d)
|
are adjudicated in any civil suit, or acknowledge in writing in any agreement or stipulation, to have committed any theft, embezzlement, fraud, or other act of dishonesty involving any other person;
|
(e)
|
are determined, in the sole judgment of the Board or any individual or individuals the Board authorizes to act on its behalf, to have willfully engaged in conduct that is harmful to the Company Group, monetarily or otherwise;
|
(f)
|
breach any provision of this Agreement (including but not limited to any Restrictive Covenants) or any other agreement between you and any member of the Company Group; or
|
(g)
|
engage in any activity intended to benefit any entity at the expense of the Company Group or intended to benefit any competitor of the Company Group.
|
9.3
|
“
Committee
” means the Compensation and Human Resources Committee of the Board (or its duly appointed agent).
|
9.4
|
“
Company Group
” means, collectively, Best Buy and its Affiliates.
|
9.5
|
“
Confidential Information
” means all “Confidential Information” as that term is defined in Best Buy’s Confidentiality Policy, and includes, without limitation, any and all information in whatever form, whether written, electronically stored, orally transmitted or memorized relating to trade secrets, customer lists, records and other information regarding customers, price lists and pricing policies, financial information, records, ledgers and information, purchase orders, agreements and related data, business development and strategic plans, products and technologies, product tests, manufacturing costs, product or service pricing, sales and marketing plans, research and development plans, personnel and employment records, files, data and policies (regardless of whether the information pertains to you or other employees of the Company Group), tax information, business and sales methods and operations, business correspondence, memoranda and other records, inventions, improvements and discoveries, processes and methods, business operations and related data formulae, computer records and related data, know-how, research and development, trademark, technology, technical information, copyrighted material, and any other confidential or proprietary data and information which you encounter during employment, all of which are held, possessed and/or owned by the Company Group and all of which are used in the operations and business of the Company Group. Confidential Information does not include information which is or becomes generally known within the Company Group’s industry through no act or omission by you.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Best Buy Co., Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: September 10, 2014
|
/s/ HUBERT JOLY
|
|
Hubert Joly
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Best Buy Co., Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: September 10, 2014
|
/s/ SHARON L. McCOLLAM
|
|
Sharon L. McCollam
|
|
Chief Administrative Officer and Chief Financial Officer
|
Date: September 10, 2014
|
/s/ HUBERT JOLY
|
|
Hubert Joly
|
|
President and Chief Executive Officer
|
Date: September 10, 2014
|
/s/ SHARON L. McCOLLAM
|
|
Sharon L. McCollam
|
|
Chief Administrative Officer and Chief Financial Officer
|