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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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Item 1.
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Financial Statements
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August 1, 2015
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January 31, 2015
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August 2, 2014
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||||||
Assets
|
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|
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|
||||
Current assets
|
|
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||||||
Cash and cash equivalents
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$
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1,800
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$
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2,432
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$
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2,141
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Short-term investments
|
1,695
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1,456
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939
|
|
|||
Receivables, net
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1,025
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1,280
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1,005
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|||
Merchandise inventories
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4,995
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5,174
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5,583
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|||
Other current assets
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730
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703
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943
|
|
|||
Current assets held for sale
|
—
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684
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—
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|
|||
Total current assets
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10,245
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|
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11,729
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|
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10,611
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|
|||
Property and equipment, net
|
2,235
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2,295
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2,532
|
|
|||
Goodwill
|
425
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425
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425
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|
|||
Intangibles, net
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18
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57
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|
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100
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|
|||
Other assets
|
610
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583
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|
|
681
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|
|||
Non-current assets held for sale
|
33
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|
|
167
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—
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|
|||
Total assets
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$
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13,566
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$
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15,256
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$
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14,349
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|
||||||
Liabilities and equity
|
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|
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|
||||||
Current liabilities
|
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|
|
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|||
Accounts payable
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$
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4,680
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$
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5,030
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$
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5,244
|
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Unredeemed gift card liabilities
|
371
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|
411
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371
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|||
Deferred revenue
|
316
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|
326
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|
442
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|||
Accrued compensation and related expenses
|
285
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|
372
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287
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|
|||
Accrued liabilities
|
778
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|
782
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|
796
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|||
Accrued income taxes
|
26
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230
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68
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|||
Current portion of long-term debt
|
382
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|
41
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|
43
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|
|||
Current liabilities held for sale
|
—
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|
585
|
|
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—
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|
|||
Total current liabilities
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6,838
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7,777
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7,251
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|||
Long-term liabilities
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879
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881
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976
|
|
|||
Long-term debt
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1,227
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1,580
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1,592
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|
|||
Long-term liabilities held for sale
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—
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|
18
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—
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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, $0.10 par value: Authorized — 1.0 billion shares; Issued and outstanding — 344,258,000, 351,468,000 and 349,548,000 shares, respectively
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34
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35
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35
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Additional paid-in capital
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198
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437
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348
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|||
Retained earnings
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4,092
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4,141
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3,649
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|||
Accumulated other comprehensive income
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298
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382
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494
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|||
Total Best Buy Co., Inc. shareholders’ equity
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4,622
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4,995
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4,526
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|||
Noncontrolling interests
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—
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5
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4
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|||
Total equity
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4,622
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5,000
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4,530
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|||
Total liabilities and equity
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$
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13,566
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$
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15,256
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$
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14,349
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Three Months Ended
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Six Months Ended
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||||||||||||
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August 1, 2015
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August 2, 2014
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August 1, 2015
|
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August 2, 2014
|
||||||||
Revenue
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$
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8,528
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$
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8,459
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$
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17,086
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$
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17,098
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Cost of goods sold
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6,433
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6,481
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12,953
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13,153
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|
||||
Restructuring charges – cost of goods sold
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(3
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)
|
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—
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5
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—
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||||
Gross profit
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2,098
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1,978
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4,128
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3,945
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||||
Selling, general and administrative expenses
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1,811
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1,748
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3,577
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3,503
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|
||||
Restructuring charges
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(1
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)
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5
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177
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7
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|
||||
Operating income
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288
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225
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374
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435
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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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2
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2
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|
||||
Investment income and other
|
4
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6
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11
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|
10
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|
||||
Interest expense
|
(20
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)
|
|
(23
|
)
|
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(40
|
)
|
|
(46
|
)
|
||||
Earnings from continuing operations before income tax (benefit) expense
|
272
|
|
|
210
|
|
|
347
|
|
|
401
|
|
||||
Income tax (benefit) expense
|
108
|
|
|
73
|
|
|
146
|
|
|
(205
|
)
|
||||
Net earnings from continuing operations
|
164
|
|
|
137
|
|
|
201
|
|
|
606
|
|
||||
Gain from discontinued operations (Note 2), net of tax benefit (expense) of $-, $(7), $3 and $(4)
|
—
|
|
|
10
|
|
|
92
|
|
|
2
|
|
||||
Net earnings including noncontrolling interests
|
164
|
|
|
147
|
|
|
293
|
|
|
608
|
|
||||
Net earnings from discontinued operations attributable to noncontrolling interests
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Net earnings attributable to Best Buy Co., Inc. shareholders
|
$
|
164
|
|
|
$
|
146
|
|
|
$
|
293
|
|
|
$
|
607
|
|
|
|
|
|
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|
||||||||
Basic earnings per share attributable to Best Buy Co., Inc. shareholders
|
|
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|
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|
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|
||||||
Continuing operations
|
$
|
0.47
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|
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$
|
0.39
|
|
|
$
|
0.57
|
|
|
$
|
1.74
|
|
Discontinued operations
|
—
|
|
|
0.03
|
|
|
0.26
|
|
|
—
|
|
||||
Basic earnings per share
|
$
|
0.47
|
|
|
$
|
0.42
|
|
|
$
|
0.83
|
|
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$
|
1.74
|
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|
|
|
|
|
|
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|
||||||||
Diluted earnings per share attributable to Best Buy Co., Inc. shareholders
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.46
|
|
|
$
|
0.39
|
|
|
$
|
0.57
|
|
|
$
|
1.73
|
|
Discontinued operations
|
—
|
|
|
0.03
|
|
|
0.25
|
|
|
—
|
|
||||
Diluted earnings per share
|
$
|
0.46
|
|
|
$
|
0.42
|
|
|
$
|
0.82
|
|
|
$
|
1.73
|
|
|
|
|
|
|
|
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|
||||||||
Dividends declared per common share
|
$
|
0.23
|
|
|
$
|
0.17
|
|
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$
|
0.97
|
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$
|
0.34
|
|
|
|
|
|
|
|
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|
||||||||
Weighted-average common shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
349.6
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|
|
349.3
|
|
|
351.0
|
|
|
348.4
|
|
||||
Diluted
|
353.9
|
|
|
352.2
|
|
|
355.8
|
|
|
351.6
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Net earnings including noncontrolling interests
|
$
|
164
|
|
|
$
|
147
|
|
|
$
|
293
|
|
|
$
|
608
|
|
Foreign currency translation adjustments
|
(32
|
)
|
|
—
|
|
|
(17
|
)
|
|
3
|
|
||||
Unrealized loss on available-for-sale investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Reclassification of foreign currency translation adjustments into earnings due to sale of business
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
||||
Comprehensive income including noncontrolling interests
|
132
|
|
|
147
|
|
|
209
|
|
|
610
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Comprehensive income attributable to Best Buy Co., Inc. shareholders
|
$
|
132
|
|
|
$
|
146
|
|
|
$
|
209
|
|
|
$
|
609
|
|
|
Best Buy Co., Inc.
|
|
|
|
|
|||||||||||||||||||||||||
|
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 January 31, 2015
|
352
|
|
|
$
|
35
|
|
|
$
|
437
|
|
|
$
|
4,141
|
|
|
$
|
382
|
|
|
$
|
4,995
|
|
|
$
|
5
|
|
|
$
|
5,000
|
|
Net earnings, six months ended August 1, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
293
|
|
|
—
|
|
|
293
|
|
|
—
|
|
|
293
|
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||||||
Reclassification of foreign currency translation adjustments into earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
(67
|
)
|
|
—
|
|
|
(67
|
)
|
|||||||
Sale of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
55
|
|
|||||||
Restricted stock vested and stock options exercised
|
1
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|||||||
Issuance of common stock under employee stock purchase plan
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Tax benefit from stock options exercised, restricted stock vesting and employee stock purchase plan
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Common stock dividends, $0.97 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(342
|
)
|
|
—
|
|
|
(342
|
)
|
|
—
|
|
|
(342
|
)
|
|||||||
Repurchase of common stock
|
(9
|
)
|
|
(1
|
)
|
|
(323
|
)
|
|
—
|
|
|
—
|
|
|
(324
|
)
|
|
—
|
|
|
(324
|
)
|
|||||||
Balances at August 1, 2015
|
344
|
|
|
$
|
34
|
|
|
$
|
198
|
|
|
$
|
4,092
|
|
|
$
|
298
|
|
|
$
|
4,622
|
|
|
$
|
—
|
|
|
$
|
4,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
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
|
|
|
Six Months Ended
|
||||||
|
August 1, 2015
|
|
August 2, 2014
|
||||
Operating activities
|
|
|
|
||||
Net earnings including noncontrolling interests
|
$
|
293
|
|
|
$
|
608
|
|
Adjustments to reconcile net earnings to total cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation
|
326
|
|
|
319
|
|
||
Restructuring charges
|
182
|
|
|
8
|
|
||
Gain on sale of business, net
|
(99
|
)
|
|
(1
|
)
|
||
Stock-based compensation
|
55
|
|
|
40
|
|
||
Deferred income taxes
|
(41
|
)
|
|
(394
|
)
|
||
Other, net
|
10
|
|
|
8
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
268
|
|
|
301
|
|
||
Merchandise inventories
|
168
|
|
|
(205
|
)
|
||
Other assets
|
(9
|
)
|
|
17
|
|
||
Accounts payable
|
(335
|
)
|
|
120
|
|
||
Other liabilities
|
(284
|
)
|
|
(270
|
)
|
||
Income taxes
|
(226
|
)
|
|
(64
|
)
|
||
Total cash provided by operating activities
|
308
|
|
|
487
|
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
|
|
||
Additions to property and equipment
|
(293
|
)
|
|
(258
|
)
|
||
Purchases of investments
|
(1,303
|
)
|
|
(1,194
|
)
|
||
Sales of investments
|
1,064
|
|
|
479
|
|
||
Proceeds from sale of business, net of cash transferred upon sale
|
92
|
|
|
37
|
|
||
Change in restricted assets
|
(46
|
)
|
|
26
|
|
||
Settlement of net investment hedges
|
8
|
|
|
—
|
|
||
Other, net
|
—
|
|
|
3
|
|
||
Total cash used in investing activities
|
(478
|
)
|
|
(907
|
)
|
||
|
|
|
|
||||
Financing activities
|
|
|
|
|
|
||
Repurchase of common stock
|
(321
|
)
|
|
—
|
|
||
Repayments of debt
|
(13
|
)
|
|
(12
|
)
|
||
Dividends paid
|
(341
|
)
|
|
(118
|
)
|
||
Issuance of common stock
|
28
|
|
|
17
|
|
||
Other, net
|
7
|
|
|
(1
|
)
|
||
Total cash used in financing activities
|
(640
|
)
|
|
(114
|
)
|
||
Effect of exchange rate changes on cash
|
(16
|
)
|
|
(3
|
)
|
||
Decrease in cash and cash equivalents
|
(826
|
)
|
|
(537
|
)
|
||
Cash and cash equivalents at beginning of period, excluding held for sale
|
2,432
|
|
|
2,678
|
|
||
Cash and cash equivalents held for sale at beginning of period
|
194
|
|
|
—
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,800
|
|
|
$
|
2,141
|
|
1.
|
Basis of Presentation
|
2.
|
Discontinued Operations
|
|
February 13, 2015
|
||
Cash and cash equivalents
|
$
|
125
|
|
Receivables
|
113
|
|
|
Merchandise inventories
|
252
|
|
|
All other assets
|
461
|
|
|
Total assets
|
$
|
951
|
|
|
|
||
Accounts payable
|
$
|
478
|
|
All other liabilities
|
128
|
|
|
Total liabilities
|
$
|
606
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Revenue
(1)
|
$
|
5
|
|
|
$
|
437
|
|
|
$
|
217
|
|
|
$
|
834
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gain (loss) from discontinued operations before income tax benefit
|
—
|
|
|
15
|
|
|
(10
|
)
|
|
4
|
|
||||
Income tax benefit (expense)
|
—
|
|
|
(7
|
)
|
|
3
|
|
|
(4
|
)
|
||||
Gain on sale of discontinued operations
|
—
|
|
|
2
|
|
|
99
|
|
|
2
|
|
||||
Net gain from discontinued operations, including noncontrolling interests
|
—
|
|
|
10
|
|
|
92
|
|
|
2
|
|
||||
Net earnings from discontinued operations attributable to noncontrolling interests
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Net gain from discontinued operations attributable to Best Buy Co., Inc. shareholders
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
92
|
|
|
$
|
1
|
|
•
|
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 1, 2015 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
65
|
|
|
—
|
|
|
65
|
|
|
—
|
|
||||
Short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds
|
402
|
|
|
—
|
|
|
402
|
|
|
—
|
|
||||
Commercial paper
|
240
|
|
|
—
|
|
|
240
|
|
|
—
|
|
||||
Other current assets
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivative instruments
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap derivative instruments
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Auction rate securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Marketable securities that fund deferred compensation
|
98
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
|
|
Fair Value Measurements
Using Inputs Considered as
|
||||||||||||
|
Fair Value at
January 31, 2015 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
$
|
265
|
|
|
$
|
265
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate bonds
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Commercial paper
|
165
|
|
|
—
|
|
|
165
|
|
|
—
|
|
||||
Short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate bonds
|
276
|
|
|
—
|
|
|
276
|
|
|
—
|
|
||||
Commercial paper
|
306
|
|
|
—
|
|
|
306
|
|
|
—
|
|
||||
Other current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency derivative instruments
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap derivative instruments
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Auction rate securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Marketable securities that fund deferred compensation
|
97
|
|
|
97
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
ASSETS HELD FOR SALE
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
16
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
|
|
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
|
|
|
—
|
|
||||
U.S. Treasury bills
|
100
|
|
|
100
|
|
|
—
|
|
|
—
|
|
||||
Other current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency derivative instruments
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Auction rate securities
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Marketable equity securities
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Marketable securities that fund deferred compensation
|
98
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
||||||||||||
|
Impairments
|
|
Remaining Net Carrying Value
(1)
|
|
Impairments
|
|
Remaining Net Carrying Value
(1)
|
||||||||
Continuing operations
|
|
|
|
|
|
|
|
||||||||
Property and equipment (non-restructuring)
|
$
|
26
|
|
|
$
|
9
|
|
|
$
|
21
|
|
|
$
|
8
|
|
Restructuring activities
(2)
|
|
|
|
|
|
|
|
||||||||
Tradename
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Property and equipment
|
30
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total continuing operations
|
$
|
96
|
|
|
$
|
9
|
|
|
$
|
22
|
|
|
$
|
8
|
|
(1)
|
Remaining net carrying value approximates fair value.
|
(2)
|
See Note 5,
Restructuring Charges
, for additional information.
|
|
Goodwill
|
|
Indefinite-lived Tradenames
|
||||||||||||
|
Domestic
|
|
Domestic
|
|
International
|
|
Total
|
||||||||
Balances at January 31, 2015
|
$
|
425
|
|
|
$
|
18
|
|
|
$
|
39
|
|
|
$
|
57
|
|
Changes in foreign currency exchange rates
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Canada brand restructuring
(1)
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
(40
|
)
|
||||
Balances at August 1, 2015
|
$
|
425
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
(1)
|
Represents the Future Shop tradename impaired as a result of the Canadian brand consolidation in the first quarter of fiscal 2016. See Note 5,
Restructuring Charges
, for further discussion of the Canadian brand consolidation.
|
|
Goodwill
|
|
Indefinite-lived Tradenames
|
||||||||||||
|
Domestic
|
|
Domestic
|
|
International
|
|
Total
|
||||||||
Balances at February 1, 2014
|
$
|
425
|
|
|
$
|
19
|
|
|
$
|
82
|
|
|
$
|
101
|
|
Changes in foreign currency exchange rates
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Balances at August 2, 2014
|
$
|
425
|
|
|
$
|
19
|
|
|
$
|
81
|
|
|
$
|
100
|
|
|
August 1, 2015
|
|
January 31, 2015
|
|
August 2, 2014
|
||||||||||||||||||
|
Gross
Carrying
Amount
(1)
|
|
Cumulative
Impairment
(1)
|
|
Gross
Carrying
Amount
(1)
|
|
Cumulative
Impairment
(1)
|
|
Gross
Carrying
Amount
|
|
Cumulative
Impairment
|
||||||||||||
Goodwill
|
$
|
1,100
|
|
|
$
|
(675
|
)
|
|
$
|
1,100
|
|
|
$
|
(675
|
)
|
|
$
|
1,308
|
|
|
$
|
(883
|
)
|
(1)
|
Excludes the gross carrying amount and cumulative impairment related to Five Star, which was held for sale at January 31, 2015. The sale was completed on February 13, 2015.
|
|
Six Months Ended
|
||||||
|
August 1, 2015
|
|
August 2, 2014
|
||||
Continuing operations
|
|
|
|
||||
Canadian brand consolidation
|
$
|
184
|
|
|
$
|
—
|
|
Renew Blue
|
(2
|
)
|
|
13
|
|
||
Other restructuring activities
(1)
|
—
|
|
|
(6
|
)
|
||
Total continuing operations
|
182
|
|
|
7
|
|
||
Discontinued operations
|
|
|
|
||||
Renew Blue
|
—
|
|
|
1
|
|
||
Total restructuring charges
|
$
|
182
|
|
|
$
|
8
|
|
(1)
|
Represents activity related to our remaining vacant space liability for U.S. large-format store closures in fiscal 2013. We may continue to incur immaterial adjustments to the liability for changes in sublease assumptions or potential lease buyouts. In addition, lease payments for vacated stores will continue until leases expire or are terminated. The remaining vacant space liability was
$19 million
at August 1, 2015.
|
|
International
|
||
Continuing operations
|
|
||
Inventory write-downs
|
$
|
5
|
|
Property and equipment impairments
|
30
|
|
|
Tradename impairment
|
40
|
|
|
Termination benefits
|
24
|
|
|
Facility closure and other costs
|
85
|
|
|
Total continuing operations
|
$
|
184
|
|
|
Termination
Benefits
|
|
Facility
Closure and
Other Costs
|
|
Total
|
||||||
Balances at January 31, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
27
|
|
|
104
|
|
|
131
|
|
|||
Cash payments
|
(21
|
)
|
|
(18
|
)
|
|
(39
|
)
|
|||
Adjustments
(1)
|
(2
|
)
|
|
(4
|
)
|
|
(6
|
)
|
|||
Changes in foreign currency exchange rates
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||
Balances at August 1, 2015
|
$
|
4
|
|
|
$
|
79
|
|
|
$
|
83
|
|
|
Domestic
|
|
International
|
|
Total
|
||||||||||||||||||||||||||||||
|
Six Months Ended
|
|
Cumulative
Amount |
|
Six Months Ended
|
|
Cumulative
Amount |
|
Six Months Ended
|
|
Cumulative
Amount |
||||||||||||||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
|
August 1, 2015
|
|
August 2, 2014
|
|
|
August 1, 2015
|
|
August 2, 2014
|
|
|||||||||||||||||||||
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Inventory write-downs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Property and equipment impairments
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
1
|
|
|
25
|
|
|
—
|
|
|
1
|
|
|
39
|
|
|||||||||
Termination benefits
|
(2
|
)
|
|
7
|
|
|
159
|
|
|
—
|
|
|
5
|
|
|
38
|
|
|
(2
|
)
|
|
12
|
|
|
197
|
|
|||||||||
Investment impairments
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||||||
Facility closure and other costs
|
1
|
|
|
—
|
|
|
5
|
|
|
(1
|
)
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|||||||||
Total continuing operations
|
(1
|
)
|
|
7
|
|
|
222
|
|
|
(1
|
)
|
|
6
|
|
|
113
|
|
|
(2
|
)
|
|
13
|
|
|
335
|
|
|||||||||
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Property and equipment impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||||
Termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||||||
Facility closure and other costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
11
|
|
|
—
|
|
|
1
|
|
|
11
|
|
|||||||||
Total Discontinued Operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
28
|
|
|
—
|
|
|
1
|
|
|
28
|
|
|||||||||
Total
|
$
|
(1
|
)
|
|
$
|
7
|
|
|
$
|
222
|
|
|
$
|
(1
|
)
|
|
$
|
7
|
|
|
$
|
141
|
|
|
$
|
(2
|
)
|
|
$
|
14
|
|
|
$
|
363
|
|
|
Termination
Benefits
|
|
Facility
Closure and
Other Costs
|
|
Total
|
||||||
Balances at January 31, 2015
|
$
|
16
|
|
|
$
|
23
|
|
|
$
|
39
|
|
Charges
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash payments
|
(7
|
)
|
|
(6
|
)
|
|
(13
|
)
|
|||
Adjustments
(1)
|
(8
|
)
|
|
(5
|
)
|
|
(13
|
)
|
|||
Changes in foreign currency exchange rates
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balances at August 1, 2015
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
13
|
|
(1)
|
Adjustments to termination benefits were due to higher-than-expected employee retention. In addition, adjustments include the remaining liabilities eliminated as a result of the sale of Five Star, as described in Note 2,
Discontinued Operations
.
|
|
Termination
Benefits
|
|
Facility
Closure and
Other Costs
|
|
Total
|
||||||
Balances at February 1, 2014
|
$
|
111
|
|
|
$
|
51
|
|
|
$
|
162
|
|
Charges
|
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.
|
|
August 1, 2015
|
|
January 31, 2015
|
|
August 2, 2014
|
||||||
2016 Notes
|
$
|
350
|
|
|
$
|
349
|
|
|
$
|
350
|
|
2018 Notes
|
500
|
|
|
500
|
|
|
500
|
|
|||
2021 Notes
|
649
|
|
|
649
|
|
|
649
|
|
|||
Interest rate swap valuation adjustments
|
13
|
|
|
1
|
|
|
—
|
|
|||
Financing lease obligations
|
52
|
|
|
69
|
|
|
83
|
|
|||
Capital lease obligations
|
45
|
|
|
52
|
|
|
52
|
|
|||
Other debt
|
—
|
|
|
1
|
|
|
1
|
|
|||
Total long-term debt
|
1,609
|
|
|
1,621
|
|
|
1,635
|
|
|||
Less: current portion
(1)
|
(382
|
)
|
|
(41
|
)
|
|
(43
|
)
|
|||
Total long-term debt, less current portion
|
$
|
1,227
|
|
|
$
|
1,580
|
|
|
$
|
1,592
|
|
(1)
|
Our 2016 Notes due March 15, 2016, are classified in the current portion of long-term debt as of
August 1, 2015
.
|
|
August 1, 2015
|
|
January 31, 2015
|
|
August 2, 2014
|
||||||||||||||||||
Contract Type
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||
Derivatives designated as net investment hedges
(1)
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives designated as interest rate swaps
(2)
|
13
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
No hedge designation (foreign exchange forward contracts)
(1)
|
4
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Total
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
(1)
|
The fair value is recorded in other current assets or accrued liabilities.
|
(2)
|
The fair value is recorded in other assets or long-term liabilities.
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||||||||||||||||||
Contract Type
|
Pre-tax Gain(Loss) Recognized in OCI
|
|
Gain(Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion)
|
|
Pre-tax Gain(Loss) Recognized in OCI
|
|
Gain(Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion)
|
|
Pre-tax Gain(Loss) Recognized in OCI
|
|
Gain(Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion)
|
|
Pre-tax Gain(Loss) Recognized in OCI
|
|
Gain(Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion)
|
||||||||||||||||
Derivatives designated as net investment hedges
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Gain (Loss) Recognized within SG&A
|
|
Gain (Loss) Recognized within SG&A
|
||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||
Contract Type
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
No hedge designation (foreign exchange forward contracts)
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
Gain (Loss) Recognized within Interest Expense
|
|
Gain (Loss) Recognized within Interest Expense
|
||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||
Contract Type
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Interest rate swap gain
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
—
|
|
Long-term debt loss
|
(8
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
||||
Net impact on Consolidated Statements of Earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Notional Amount
|
||||||||||
Contract Type
|
August 1, 2015
|
|
January 31, 2015
|
|
August 2, 2014
|
||||||
Derivatives designated as net investment hedges
|
$
|
207
|
|
|
$
|
197
|
|
|
$
|
—
|
|
Derivatives designated as interest rate swaps
|
750
|
|
|
145
|
|
|
—
|
|
|||
No hedge designation (foreign exchange forward contracts)
|
163
|
|
|
212
|
|
|
95
|
|
|||
Total
|
$
|
1,120
|
|
|
$
|
554
|
|
|
$
|
95
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings from continuing operations attributable to Best Buy Co., Inc.
|
$
|
164
|
|
|
$
|
137
|
|
|
$
|
201
|
|
|
$
|
606
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
349.6
|
|
|
349.3
|
|
|
351.0
|
|
|
348.4
|
|
||||
Effect of potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Nonvested share awards
|
4.3
|
|
|
2.9
|
|
|
4.8
|
|
|
3.2
|
|
||||
Weighted-average common shares outstanding, assuming dilution
|
353.9
|
|
|
352.2
|
|
|
355.8
|
|
|
351.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net earnings per share from continuing operations attributable to Best Buy Co., Inc.
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.47
|
|
|
$
|
0.39
|
|
|
$
|
0.57
|
|
|
$
|
1.74
|
|
Diluted
|
$
|
0.46
|
|
|
$
|
0.39
|
|
|
$
|
0.57
|
|
|
$
|
1.73
|
|
|
Foreign Currency Translation
|
|
Available-For-Sale Investments
|
|
Total
|
||||||
Balances at May 2, 2015
|
$
|
330
|
|
|
$
|
—
|
|
|
330
|
|
|
Foreign currency translation adjustments
|
(32
|
)
|
|
—
|
|
|
(32
|
)
|
|||
Balances at August 1, 2015
|
$
|
298
|
|
|
$
|
—
|
|
|
$
|
298
|
|
|
|
|
|
|
|
||||||
|
Foreign Currency Translation
|
|
Available-For-Sale Investments
|
|
Total
|
||||||
Balances at January 31, 2015
|
$
|
382
|
|
|
$
|
—
|
|
|
$
|
382
|
|
Foreign currency translation adjustments
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||
Reclassification of foreign currency translation adjustments into earnings due to sale of business
|
(67
|
)
|
|
—
|
|
|
(67
|
)
|
|||
Balances at August 1, 2015
|
$
|
298
|
|
|
$
|
—
|
|
|
$
|
298
|
|
|
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
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Domestic
|
$
|
7,878
|
|
|
$
|
7,585
|
|
|
$
|
15,768
|
|
|
$
|
15,366
|
|
International
|
650
|
|
|
874
|
|
|
1,318
|
|
|
1,732
|
|
||||
Total revenue
|
$
|
8,528
|
|
|
$
|
8,459
|
|
|
$
|
17,086
|
|
|
$
|
17,098
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Domestic
|
$
|
309
|
|
|
$
|
258
|
|
|
$
|
613
|
|
|
$
|
484
|
|
International
|
(21
|
)
|
|
(33
|
)
|
|
(239
|
)
|
|
(49
|
)
|
||||
Total operating income
|
288
|
|
|
225
|
|
|
374
|
|
|
435
|
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Gain on sale of investments
|
—
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||
Investment income and other
|
4
|
|
|
6
|
|
|
11
|
|
|
10
|
|
||||
Interest expense
|
(20
|
)
|
|
(23
|
)
|
|
(40
|
)
|
|
(46
|
)
|
||||
Earnings from continuing operations before income tax (benefit) expense
|
$
|
272
|
|
|
$
|
210
|
|
|
$
|
347
|
|
|
$
|
401
|
|
|
August 1, 2015
|
|
January 31, 2015
|
|
August 2, 2014
|
||||||
Domestic
|
$
|
12,335
|
|
|
$
|
12,998
|
|
|
$
|
11,847
|
|
International
|
1,231
|
|
|
2,258
|
|
|
2,502
|
|
|||
Total assets
|
$
|
13,566
|
|
|
$
|
15,256
|
|
|
$
|
14,349
|
|
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
|
•
|
New Accounting Pronouncements
|
1.
|
Industry trends.
We believe that overall consumer demand for technology products and services, including appliances and mobile phones, is growing. This is driven by technology and product innovation and by macro factors such as population growth, the housing recovery and healthy living trends that are driving momentum in our appliances, home theater, connected home and health & wearables categories, which we believe will remain positive catalysts in quarters to come. In addition, the increasing complexity and interoperability of technology products, and the advent of the “the Internet of Things”, are making Best Buy’s operating model increasingly relevant as customers want and need more help selecting, installing, connecting, integrating, using, maintaining and taking full advantage of their products.
|
2.
|
Strategic investments.
We believe that the investments that we have made in our Renew Blue strategy to offer advice, service and convenience at competitive prices are driving successful results, as evidenced by (1) the market share gains we have achieved in the NPD-tracked categories; (2) our growth in appliances and mobile phones; and (3) the overall positive Domestic segment comparable sales and expanded operating income rate that we have delivered both last year and year-to-date this year.
|
3.
|
Competitive advantages
. We believe we have three distinct competitive advantages that are helping us win with customers, are driving better financial results and are hard for competitors to replicate. The first competitive advantage is our ability to serve our customers online, in-store and in their home. We offer a digital shopping experience to our customers, online and in our new mobile app. We also have stores within 15 minutes of 70% of the U.S. population that not only provide advice, service and convenience to our in-store customers but also operate as local distribution centers to provide online customers with greater inventory availability and faster delivery. Through Geek Squad, we are able to provide an array of services to our customers remotely, in our stores and in their home. The second competitive advantage is our positioning in the marketplace which allows us to benefit from early adopters who choose Best Buy when new, exciting technology is released. Our strong merchandising and vendor partnerships allow us to showcase the best products more quickly and effectively than many of our competitors. Our third competitive advantage is our close vendor partnerships. Not only do we showcase the best of what our vendors offer, we are also benefiting from the material investments that several of the world’s leading technology companies are making in our stores. With these partnerships, we are able to bring to life interactive technology experiences that make the Best Buy operating model more relevant for customers. We believe the continued growth in our vendor partnerships demonstrates their value not only to our customers and Best Buy, but also to our vendor partners.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Revenue
|
$
|
8,528
|
|
|
$
|
8,459
|
|
|
$
|
17,086
|
|
|
$
|
17,098
|
|
Revenue % gain (decline)
|
0.8
|
%
|
|
(3.1
|
)%
|
|
(0.1
|
)%
|
|
(3.2
|
)%
|
||||
Comparable sales % gain (decline)
(1)
|
3.8
|
%
|
|
(2.2
|
)%
|
|
2.2
|
%
|
|
(2.0
|
)%
|
||||
Comparable sales % gain (decline), excluding estimated impact of installment billing
(1)(2)
|
2.7
|
%
|
|
(2.2
|
)%
|
|
1.0
|
%
|
|
(2.0
|
)%
|
||||
Restructuring charges – cost of goods sold
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Gross profit
|
$
|
2,098
|
|
|
$
|
1,978
|
|
|
$
|
4,128
|
|
|
$
|
3,945
|
|
Gross profit as a % of revenue
(3)
|
24.6
|
%
|
|
23.4
|
%
|
|
24.2
|
%
|
|
23.1
|
%
|
||||
SG&A
|
$
|
1,811
|
|
|
$
|
1,748
|
|
|
$
|
3,577
|
|
|
$
|
3,503
|
|
SG&A as a % of revenue
(3)
|
21.2
|
%
|
|
20.7
|
%
|
|
20.9
|
%
|
|
20.5
|
%
|
||||
Restructuring charges
|
$
|
(1
|
)
|
|
$
|
5
|
|
|
$
|
177
|
|
|
$
|
7
|
|
Operating income
|
$
|
288
|
|
|
$
|
225
|
|
|
$
|
374
|
|
|
$
|
435
|
|
Operating income as a % of revenue
|
3.4
|
%
|
|
2.7
|
%
|
|
2.2
|
%
|
|
2.5
|
%
|
||||
Net earnings from continuing operations
|
$
|
164
|
|
|
$
|
137
|
|
|
$
|
201
|
|
|
$
|
606
|
|
Earnings from discontinued operations
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
92
|
|
|
$
|
1
|
|
Net earnings attributable to Best Buy Co., Inc. shareholders
|
$
|
164
|
|
|
$
|
146
|
|
|
$
|
293
|
|
|
$
|
607
|
|
Diluted earnings per share from continuing operations
|
$
|
0.46
|
|
|
$
|
0.39
|
|
|
$
|
0.57
|
|
|
$
|
1.73
|
|
Diluted earnings per share
|
$
|
0.46
|
|
|
$
|
0.42
|
|
|
$
|
0.82
|
|
|
$
|
1.73
|
|
(1)
|
Enterprise comparable sales for the second quarter of fiscal 2015 includes revenue from our International segment. Excluding the International segment, Enterprise comparable sales would have been
(2.0)%
and
(1.6)%
for the
three
and
six
months ended August 2, 2014, respectively, i.e., equal to Domestic segment comparable sales.
|
(2)
|
Represents comparable sales excluding the estimated 1.1% and 1.2% of revenue benefit from installment billing in the
second quarter
of fiscal
2016
and the first
six
months of fiscal
2016
, respectively.
|
(3)
|
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
January 31, 2015
.
|
|
Three Months Ended
|
|
Six Months Ended
|
||
|
August 1, 2015
|
|
August 1, 2015
|
||
Comparable sales impact
|
3.3
|
%
|
|
1.9
|
%
|
Non-comparable sales
(1)
|
(1.3
|
)%
|
|
(0.9
|
)%
|
Impact of foreign currency exchange rate fluctuations
|
(1.2
|
)%
|
|
(1.1
|
)%
|
Total revenue increase (decrease)
|
0.8
|
%
|
|
(0.1
|
)%
|
(1)
|
Non-comparable sales reflects the impact of net store opening and closing activity, including the Canadian brand consolidation activity, as well as 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 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Operating income
|
$
|
288
|
|
|
$
|
225
|
|
|
$
|
374
|
|
|
$
|
435
|
|
Net CRT settlements
(1)
|
(8
|
)
|
|
—
|
|
|
(75
|
)
|
|
—
|
|
||||
Restructuring charges – cost of goods sold
|
(3
|
)
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Other Canadian brand consolidation charges
(2)
|
2
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Non-restructuring asset impairments
|
14
|
|
|
12
|
|
|
25
|
|
|
21
|
|
||||
Restructuring charges
|
(1
|
)
|
|
5
|
|
|
177
|
|
|
7
|
|
||||
Non-GAAP operating income
|
$
|
292
|
|
|
$
|
242
|
|
|
$
|
511
|
|
|
$
|
463
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings from continuing operations
|
$
|
164
|
|
|
$
|
137
|
|
|
$
|
201
|
|
|
$
|
606
|
|
After-tax impact of net CRT settlements
(1)
|
(9
|
)
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
||||
After-tax impact of restructuring charges - cost of goods sold
|
(1
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
After-tax impact of other Canadian brand consolidation charges
(2)
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
After-tax impact of non-restructuring asset impairments
|
11
|
|
|
8
|
|
|
18
|
|
|
14
|
|
||||
After-tax impact of restructuring charges
|
8
|
|
|
4
|
|
|
133
|
|
|
5
|
|
||||
After-tax impact of gain on sale of investments
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Income tax impact of Europe legal entity reorganization
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
(353
|
)
|
||||
Non-GAAP net earnings from continuing operations
|
$
|
174
|
|
|
$
|
148
|
|
|
$
|
305
|
|
|
$
|
271
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share from continuing operations
|
$
|
0.46
|
|
|
$
|
0.39
|
|
|
$
|
0.57
|
|
|
$
|
1.73
|
|
Per share impact of net CRT settlements
(1)
|
(0.03
|
)
|
|
—
|
|
|
(0.15
|
)
|
|
—
|
|
||||
Per share impact of restructuring charges - cost of goods sold
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
||||
Per share impact of other Canadian brand consolidation charges
(2)
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
||||
Per share impact of non-restructuring asset impairments
|
0.03
|
|
|
0.02
|
|
|
0.05
|
|
|
0.04
|
|
||||
Per share impact of restructuring charges
|
0.03
|
|
|
0.01
|
|
|
0.37
|
|
|
0.01
|
|
||||
Per share impact of gain on sale of investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Per share income tax effect of Europe legal entity reorganization
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.01
|
)
|
||||
Non-GAAP diluted earnings per share from continuing operations
|
$
|
0.49
|
|
|
$
|
0.42
|
|
|
$
|
0.86
|
|
|
$
|
0.77
|
|
(1)
|
Represents $10 million of CRT litigation settlements reached in the second quarter of fiscal 2016 and recorded in cost of goods sold, net of $2 million of related legal fees and costs recorded in SG&A in the second quarter of fiscal 2016. For the first six months of fiscal 2016, represents $88 million of CRT litigation settlements reached and recorded in cost of goods sold, net of $13 million of related legal fees and costs recorded in SG&A.
|
(2)
|
Represents charges related to the Canadian brand consolidation, primarily retention expenses and other store-related costs that did not qualify as restructuring charges.
|
(3)
|
Represents the acceleration of a non-cash tax benefit of $353 million as a result of reorganizing certain European legal entities to simplify our overall structure in the first quarter of fiscal 2015.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Revenue
|
$
|
7,878
|
|
|
$
|
7,585
|
|
|
$
|
15,768
|
|
|
$
|
15,366
|
|
Revenue % gain (decline)
|
3.9
|
%
|
|
(2.4
|
)%
|
|
2.6
|
%
|
|
(2.3
|
)%
|
||||
Comparable sales % gain (decline)
(1)
|
3.8
|
%
|
|
(2.0
|
)%
|
|
2.2
|
%
|
|
(1.6
|
)%
|
||||
Comparable sales % gain (decline) excluding estimated impact of installment billing
(1)(2)
|
2.7
|
%
|
|
(2.0
|
)%
|
|
1.0
|
%
|
|
(1.6
|
)%
|
||||
Gross profit
|
$
|
1,946
|
|
|
$
|
1,778
|
|
|
$
|
3,832
|
|
|
$
|
3,541
|
|
Gross profit as a % of revenue
|
24.7
|
%
|
|
23.4
|
%
|
|
24.3
|
%
|
|
23.0
|
%
|
||||
SG&A
|
$
|
1,636
|
|
|
$
|
1,521
|
|
|
$
|
3,220
|
|
|
$
|
3,056
|
|
SG&A as a % of revenue
|
20.8
|
%
|
|
20.1
|
%
|
|
20.4
|
%
|
|
19.9
|
%
|
||||
Restructuring charges
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
Operating income
|
$
|
309
|
|
|
$
|
258
|
|
|
$
|
613
|
|
|
$
|
484
|
|
Operating income as a % of revenue
|
3.9
|
%
|
|
3.4
|
%
|
|
3.9
|
%
|
|
3.1
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Selected Online Revenue Data
|
|
|
|
|
|
|
|
||||||||
Online revenue as a % of total segment revenue
|
8.6
|
%
|
|
7.7
|
%
|
|
8.6
|
%
|
|
7.9
|
%
|
||||
Comparable online sales % gain
(1)
|
17.0
|
%
|
|
22.0
|
%
|
|
10.8
|
%
|
|
25.7
|
%
|
(1)
|
Comparable online sales is included in the comparable sales calculation.
|
(2)
|
Represents comparable sales excluding the estimated 1.1% and 1.2% of revenue benefit from installment billing in the
second quarter
and the first
six
months of fiscal
2016
, respectively.
|
|
Three Months Ended
|
|
Six Months Ended
|
||
|
August 1, 2015
|
|
August 1, 2015
|
||
Comparable sales impact
|
3.7
|
%
|
|
2.1
|
%
|
Non-comparable sales
(1)
|
0.2
|
%
|
|
0.5
|
%
|
Total revenue increase
|
3.9
|
%
|
|
2.6
|
%
|
(1)
|
Non-comparable sales reflects the impact of net store opening and closing activity, as well as 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 2016
|
|
Fiscal 2015
|
||||||||||||||||||||
|
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
|
1,049
|
|
|
—
|
|
|
(2
|
)
|
|
1,047
|
|
|
1,053
|
|
|
—
|
|
|
—
|
|
|
1,053
|
|
Best Buy Mobile stand-alone
|
362
|
|
|
—
|
|
|
(6
|
)
|
|
356
|
|
|
406
|
|
|
—
|
|
|
(15
|
)
|
|
391
|
|
Pacific Sales stand-alone
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
30
|
|
|
—
|
|
|
(1
|
)
|
|
29
|
|
Magnolia Audio Video stand-alone
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Total Domestic segment stores
|
1,442
|
|
|
—
|
|
|
(9
|
)
|
|
1,433
|
|
|
1,493
|
|
|
—
|
|
|
(16
|
)
|
|
1,477
|
|
|
Revenue Mix
|
|
Comparable Sales
|
||||||||
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||
Consumer Electronics
|
32
|
%
|
|
31
|
%
|
|
7.3
|
%
|
|
0.2
|
%
|
Computing and Mobile Phones
|
47
|
%
|
|
47
|
%
|
|
1.5
|
%
|
|
(5.9
|
)%
|
Entertainment
|
6
|
%
|
|
6
|
%
|
|
(2.0
|
)%
|
|
16.1
|
%
|
Appliances
|
10
|
%
|
|
9
|
%
|
|
20.7
|
%
|
|
8.2
|
%
|
Services
|
5
|
%
|
|
6
|
%
|
|
(13.1
|
)%
|
|
(8.9
|
)%
|
Other
|
<1%
|
|
|
1
|
%
|
|
n/a
|
|
|
n/a
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
3.8
|
%
|
|
(2.0
|
)%
|
•
|
Consumer Electronics:
The
7.3%
comparable sales gain was driven primarily by an increase in the sales of large screen televisions.
|
•
|
Computing and Mobile Phones:
The
1.5%
comparable sales gain primarily resulted from sales of mobile phones due to the impact of installment billing plans and higher year-over-year selling prices. This gain is partially offset by the continued industry softness in tablets.
|
•
|
Entertainment:
The
2.0%
comparable sales decline was driven by declines in movies and music due to continued industry declines, partially offset by a slight gain in gaming due to successful promotions.
|
•
|
Appliances:
The
20.7%
comparable sales gain was a result of gains in major appliances primarily driven by the addition of Pacific Kitchen & Home stores-within-a-store and effective promotional events.
|
•
|
Services:
The
13.1%
comparable sales decline was primarily driven by the reduction of frequency and severity of claims on our extended warranties, which has reduced our repair revenue, and to a much lesser extent, declining attach rates.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 1, 2015
|
|
August 2, 2014
|
|
August 1, 2015
|
|
August 2, 2014
|
||||||||
Revenue
|
$
|
650
|
|
|
$
|
874
|
|
|
$
|
1,318
|
|
|
$
|
1,732
|
|
Revenue % decline
|
(25.6
|
)%
|
|
(8.9
|
)%
|
|
(23.9
|
)%
|
|
(10.8
|
)%
|
||||
Comparable sales % decline
(1)
|
n/a
|
|
|
(3.8
|
)%
|
|
n/a
|
|
|
(5.2
|
)%
|
||||
Restructuring charges – cost of goods sold
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Gross profit
|
$
|
152
|
|
|
$
|
200
|
|
|
$
|
296
|
|
|
$
|
404
|
|
Gross profit as a % of revenue
|
23.4
|
%
|
|
22.9
|
%
|
|
22.5
|
%
|
|
23.3
|
%
|
||||
SG&A
|
$
|
175
|
|
|
$
|
227
|
|
|
$
|
357
|
|
|
$
|
447
|
|
SG&A as a % of revenue
|
26.9
|
%
|
|
26.0
|
%
|
|
27.1
|
%
|
|
25.8
|
%
|
||||
Restructuring charges
|
$
|
(2
|
)
|
|
$
|
6
|
|
|
$
|
178
|
|
|
$
|
6
|
|
Operating loss
|
$
|
(21
|
)
|
|
$
|
(33
|
)
|
|
$
|
(239
|
)
|
|
$
|
(49
|
)
|
Operating loss as a % of revenue
|
(3.2
|
)%
|
|
(3.8
|
)%
|
|
(18.1
|
)%
|
|
(2.8
|
)%
|
(1)
|
The consolidation is expected to have a material impact on a year-over-year basis on the Canadian retail stores and the website. As such, beginning in the first quarter of fiscal 2016, all store and website revenue has been removed from the comparable sales base and an International segment (comprised of Canada and Mexico) comparable sales metric will not be provided.
|
|
Three Months Ended
|
|
Six Months Ended
|
||
|
August 1, 2015
|
|
August 1, 2015
|
||
Non-comparable sales
(1)
|
(14.0
|
)%
|
|
(13.0
|
)%
|
Impact of foreign currency exchange rate fluctuations
|
(11.6
|
)%
|
|
(10.9
|
)%
|
Total revenue decrease
|
(25.6
|
)%
|
|
(23.9
|
)%
|
(1)
|
Non-comparable sales reflects the impact of net store opening and closing activity, including the Canadian brand consolidation activity, as well as 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 2016
|
|
Fiscal 2015
|
|||||||||||||||||||||||
|
Total Stores at Beginning of Second Quarter
|
|
Stores Opened
|
|
Stores Converted
|
|
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
|
|
Best Buy
|
136
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
72
|
|
Best Buy Mobile stand-alone
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
Mexico
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Best Buy
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
Express
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Total International segment stores
|
215
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
215
|
|
|
284
|
|
|
—
|
|
|
(2
|
)
|
|
282
|
|
|
Revenue Mix
|
||||
|
Three Months Ended
|
||||
|
August 1, 2015
|
|
August 2, 2014
|
||
Consumer Electronics
|
31
|
%
|
|
31
|
%
|
Computing and Mobile Phones
|
48
|
%
|
|
49
|
%
|
Entertainment
|
7
|
%
|
|
7
|
%
|
Appliances
|
7
|
%
|
|
6
|
%
|
Services
|
6
|
%
|
|
6
|
%
|
Other
|
1
|
%
|
|
1
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
August 1, 2015
|
|
January 31, 2015
|
|
August 2, 2014
|
||||||
Cash and cash equivalents
|
$
|
1,800
|
|
|
$
|
2,432
|
|
|
$
|
2,141
|
|
Short-term investments
|
1,695
|
|
|
1,456
|
|
|
939
|
|
|||
Total cash and cash equivalents and short-term investments
|
$
|
3,495
|
|
|
$
|
3,888
|
|
|
$
|
3,080
|
|
|
Six Months Ended
|
||||||
|
August 1, 2015
|
|
August 2, 2014
|
||||
Total cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
308
|
|
|
$
|
487
|
|
Investing activities
|
(478
|
)
|
|
(907
|
)
|
||
Financing activities
|
(640
|
)
|
|
(114
|
)
|
||
Effect of exchange rate changes on cash
|
(16
|
)
|
|
(3
|
)
|
||
Decrease in cash and cash equivalents
|
$
|
(826
|
)
|
|
$
|
(537
|
)
|
Rating Agency
|
|
Rating
|
|
Outlook
|
Standard & Poor's
|
|
BB+
|
|
Stable
|
Moody's
|
|
Baa1
|
|
Stable
|
Fitch
|
|
BBB-
|
|
Stable
|
Non-GAAP debt to EBITDAR =
|
Non-GAAP debt
|
|
EBITDAR
|
|
|
August 1, 2015
(1)
|
|
January 31, 2015
(1)
|
|
August 2, 2014
(1)
|
||||||
Debt (including current portion)
|
$
|
1,609
|
|
|
$
|
1,621
|
|
|
$
|
1,635
|
|
Capitalized operating lease obligations (8 times rental expense)
(2)
|
6,447
|
|
|
6,653
|
|
|
6,724
|
|
|||
Non-GAAP debt
|
$
|
8,056
|
|
|
$
|
8,274
|
|
|
$
|
8,359
|
|
|
|
|
|
|
|
||||||
Net earnings including noncontrolling interests
(3)
|
$
|
841
|
|
|
$
|
1,246
|
|
|
$
|
956
|
|
Interest expense, net
|
56
|
|
|
63
|
|
|
62
|
|
|||
Income tax (benefit) expense
|
492
|
|
|
141
|
|
|
(31
|
)
|
|||
Depreciation and amortization expense
|
655
|
|
|
642
|
|
|
626
|
|
|||
Rental expense
|
806
|
|
|
832
|
|
|
841
|
|
|||
Restructuring charges and other
(4)
|
151
|
|
|
47
|
|
|
240
|
|
|||
EBITDAR
|
$
|
3,001
|
|
|
$
|
2,971
|
|
|
$
|
2,694
|
|
|
|
|
|
|
|
||||||
Debt to net earnings ratio
|
1.9
|
|
|
1.3
|
|
|
1.7
|
|
|||
Non-GAAP debt to EBITDAR ratio
|
2.7
|
|
|
2.8
|
|
|
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 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)
|
Includes the impact of restructuring charges, non-restructuring asset impairments and CRT-related litigation settlements.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Fiscal Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
(1)
|
||||||
May 3, 2015 through May 30, 2015
|
|
1,227,550
|
|
|
$
|
35.20
|
|
|
1,227,550
|
|
|
$
|
3,946,000,000
|
|
May 31, 2015 through July 4, 2015
|
|
5,053,664
|
|
|
$
|
34.07
|
|
|
5,053,664
|
|
|
$
|
3,773,000,000
|
|
July 5, 2015 through August 1, 2015
|
|
3,233,494
|
|
|
$
|
33.47
|
|
|
3,233,494
|
|
|
$
|
3,665,000,000
|
|
Total Fiscal 2016 Second Quarter
|
|
9,514,708
|
|
|
$
|
34.02
|
|
|
9,514,708
|
|
|
|
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. Long-Term Incentive Program Award Agreement for Directors (2015)
|
|
|
|
10.2
|
|
Form of Best Buy Co., Inc. Long-Term Incentive Program Award Agreement for Non-U.S. Directors (2015)
|
|
|
|
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 2016, filed with the SEC on September 4, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets at August 1, 2015, January 31, 2015, and August 2, 2014, (ii) the Consolidated Statements of Earnings for the three and six months ended August 1, 2015 and August 2, 2014, (iii) the Consolidated Statements of Comprehensive Income for the three and six months ended August 1, 2015 and August 2, 2014, (iv) the Consolidated Statements of Cash Flows for the six months ended August 1, 2015 and August 2, 2014, (v) the Consolidated Statements of Changes in Shareholders’ Equity for the six months ended August 1 , 2015 and August 2, 2014, 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 4, 2015
|
By:
|
/s/ HUBERT JOLY
|
|
|
Hubert Joly
|
|
|
Chairman and Chief Executive Officer
|
|
|
(duly authorized and principal executive officer)
|
|
|
|
Date: September 4, 2015
|
By:
|
/s/ SHARON L. McCOLLAM
|
|
|
Sharon L. McCollam
|
|
|
Chief Administrative Officer and Chief Financial Officer
|
|
|
(duly authorized and principal financial officer)
|
|
|
|
Date: September 4, 2015
|
By:
|
/s/ MATHEW R. WATSON
|
|
|
Mathew R. Watson
|
|
|
Vice President, Finance – Controller and Chief Accounting Officer
|
|
|
(duly authorized and principal accounting officer)
|
1.
|
Grant of Award
. In consideration of your service on the Board of Directors of the Company (“
Board
”), the Company hereby grants to you the award set forth in the Award Notification (the “
Award
”) subject to the terms and conditions of this Agreement and the Best Buy Co., Inc. 2014 Omnibus Incentive Plan (the “
Plan
”). In the event of any conflict between this Agreement and the Plan, 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.
|
2.
|
Restricted Stock Units
. A “
Restricted
Stock Unit
” is a right to receive a share of the Company’s common stock (“
Share
”) upon the lapse of the restrictions set forth in this Agreement.
|
(a)
|
Restrictions
. During the time you serve on the Board (the “
Holding Period
”), the Restricted Stock Units are subject to the restrictions described in this Agreement and the Plan (the “
Restrictions
”). During the Holding Period, the Restricted Stock Units may not be assigned, transferred (other than by will or the laws of descent and distribution), pledged or hypothecated (whether by operation of law or otherwise) or otherwise conveyed or encumbered, and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition contrary to the provisions this Agreement or the Plan, or the levy of any execution, attachment or similar process upon the Restricted Stock Units, shall be void and unenforceable against the Company. The Restricted Stock Units are subject to forfeiture to Best Buy as provided in this Agreement and the Plan.
|
(b)
|
Vesting
. Except as otherwise set forth herein, so long as your service on the Board continues, the Restricted Stock Units shall vest in accordance with the schedule stated in the Award Notification. If your service on the Board is terminated prior to the date your Restricted Stock Units have vested for any reason other than Cause, a pro rata portion (based on your length of service during the vesting period) of the Restricted Stock Units will vest as of such termination date. If your service on the Board is terminated prior to the Vesting Date for Cause, all Restricted Stock Units will be forfeited as of the date of termination.
|
(c)
|
Issuance of Shares; Holding Period
.
Within 30 days after the end of the Holding
Period, the Shares underlying the Restricted Stock Units that have vested will be delivered to you
|
3.
|
Restrictive Covenants and Remedies
. By accepting the Award, you specifically agree to the restrictive covenants contained in this Section 3 (the “
Restrictive Covenants
”) and you agree that the Restrictive Covenants and the remedies described herein are reasonable and necessary to protect the legitimate interests of the Company Group.
|
(a)
|
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
|
(b)
|
Non-Solicitation
. During the Holding Period and for one year following the termination of your service on the Board, you shall not:
|
(i)
|
induce or attempt to induce any employee of the Company Group to leave the employ of Company Group, or in any way interfere adversely with the relationship between any such employee and Company Group;
|
(ii)
|
induce or attempt to induce any employee of Company Group to work for, render services to, provide advice to, or supply Confidential Information of Company Group to any third Person;
|
(iii)
|
employ, or otherwise pay for services rendered by, any employee of Company Group in any business enterprise with which you may be associated, connected or affiliated;
|
(iv)
|
induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of Company Group to cease doing business with 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 Company Group; or
|
(v)
|
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 of Company Group to carry out any such activity
.
|
(c)
|
Partial Invalidity
. If any portion of this Section 3 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.
|
(d)
|
Remedy for Breach
. You agree that a breach of any of the Restrictive Covenants would cause material and irreparable harm to the Company Group that would be difficult or impossible to measure, and that monetary damages for any such harm would, therefore, be an inadequate remedy. Accordingly, you agree that if you breach any Restrictive Covenant, the Company Group shall be entitled, in addition to and without limitation upon all other remedies the Company Group 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 the Company Group in lieu of, or prior to or pending determination in any arbitration proceeding. You further agree that the duration of the Restrictive Covenant shall be extended by the same amount of time that you are in breach of any Restrictive Covenant.
|
(e)
|
Claw Back & Recovery
.
|
(i)
|
In the event (i) you breach any of the Restrictive Covenants, (ii) you engage in conduct materially adverse to the interests of the Company, including any material violations of any Company policy, (iii) you engage in intentional misconduct that caused or contributed to the restatement of any financial statements of the Company, (iv) you materially violate the terms of any agreement to which you and a member of the Company Group is a party or (v) you engage in a criminal act, fraud, or violation of any securities laws, then notwithstanding any other provision of this Agreement to the contrary, the Company, 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):
|
(A)
|
cause the immediate forfeiture of any of your then unvested Restricted Stock Units;
|
(B)
|
require you to immediately return to the Company any Shares that were previously Restricted Stock Units that are still under your control; and
|
(C)
|
require you to promptly pay to the Company an amount equal to the fair market value of all Shares included in your Award that are no longer under your control (as measured on the date of issuance of any Shares issued under any Restricted Stock Units).
|
(ii)
|
The Committee shall have sole discretion to determine what constitutes the conduct described in Section 3(e)(i) above.
|
(iii)
|
In addition to the Company’s rights set forth above, you agree your Award and the value of any portion of your Award no longer under your control, shall be subject to recovery by the Company 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.
|
(f)
|
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 Section 3.
|
4.
|
General Terms and Conditions.
|
(a)
|
Rights as a Stockholder
. You will have no rights as a shareholder with respect to any Shares issuable under the Restricted Stock Units until you have actually received such Shares in accordance with the terms of this Agreement and the Plan. This means that you will not have the right to vote as a shareholder nor the right to receive dividend payments. Upon issuance of Shares, you will have all of the rights of a shareholder with respect to the Shares unless Shares are forfeited or recovered under this Agreement or the Plan.
|
(b)
|
Participant’s Acknowledgements
.
|
(i)
|
Committee’s Sole Discretion
. The Committee has sole discretion to make decisions regarding your Award, and to interpret all terms of this Agreement. You agree that all decisions regarding and interpretations of this Agreement by the Committee are binding, conclusive, final and non-appealable.
|
(ii)
|
Taxes
. You are liable for any for any federal, state and other taxes incurred upon the lapse of a substantial risk of forfeiture (
e.g
., employment taxes) or upon delivery of Shares underlying the Restricted Stock Units (
e.g
., income taxes), and any subsequent disposition of any Shares (
e.g
., capital gain taxes). You authorize the Company, or its agents, to satisfy its obligations with regard to all withholding by withholding from such Shares a number of Shares having a Fair Market Value equal to the amount of all taxes required to be withheld by the Company (not to exceed the minimum rate required under applicable law). In lieu of the foregoing, prior to any such vesting date, you may elect such other method to satisfy such obligations acceptable to the Company.
|
(iii)
|
Consultation With Professional Tax Advisors
. You acknowledge that the grant, exercise, vesting or any payment with respect to the Award, and the sale or other taxable disposition of the Shares acquired as a result of the Award may have tax consequences under federal, state, local or international tax laws. You further acknowledge that you are relying solely on your own professional tax and investment advisors with respect to any and all such matters (and are not relying, in any manner, on the Company or any of its employees or representatives). You understand and agree that any and all tax consequences resulting from the Award and its grant, exercise, vesting or any payment with respect thereto, and the sale or other taxable disposition of the Shares acquired pursuant to the
|
(a)
|
Section 409A.
Anything herein to the contrary notwithstanding, this Agreement shall be interpreted so as to comply with or satisfy an exemption from Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively, “
Section 409A
”). The Committee may in good faith make the minimum modifications to this Agreement as it may deem appropriate to comply with Section 409A while to the maximum extent reasonably possible maintaining the original intent and economic benefit to you and the Company Group of the applicable provision.
|
(i)
|
To the extent required by Section 409A(a)(2)(B)(i), to the extent that you are a specified employee, Shares (or cash equivalent value of Shares) underlying Restricted Stock Units and Performance Share Awards that become payable 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, (x) any reference to your termination of service under this Agreement shall mean your separation from service, (y) the occurrence of your “separation from service” will be determined in accordance with the default provisions of Treasury Regulation Section 1.409A-1(h) and (z) 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). Notwithstanding anything in this Agreement to the contrary, your service shall not be deemed to have been terminated unless and until you have incurred a “separation from service” within the meaning of Section 409A.
|
(ii)
|
For purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii), your right to receive any installment payments under this Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment under this Agreement shall at all times be considered a separate and distinct payment.
|
(a)
|
Severability
. In the event that any provision in the Plan or this Agreement is held to be invalid, illegal or unenforceable or would disqualify the Plan or this Agreement under any law, the invalid, illegal or unenforceable provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or this Agreement, such provision shall be stricken as to the applicable jurisdiction or Shares, and the remainder of the Plan or this Agreement shall remain in full force and effect.
|
(b)
|
Governing Law, Jurisdiction and Venue.
The laws of Minnesota, without regard to the conflict of law provisions, shall apply to all questions concerning this Agreement. You and the Company 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.
|
(c)
|
Costs of Enforcement
. In addition to any other remedy to which any member of the Company Group is entitled under this Agreement, you agree that the Company Group shall be entitled to recover from you any costs, expenses (including reasonable legal fees) or disbursements reasonably incurred by the Company Group to enforce any provision of this Agreement, or to otherwise defend itself from any claim brought by you or any of your beneficiaries against any member of the Company Group under any provision of this Agreement.
|
5.
|
Definitions
.
Capitalized terms used but not defined in this Agreement are defined in the Plan or, if not defined therein, will have the following meanings:
|
(a)
|
“
Cause
” for termination of your service with the Company Group shall, solely for purposes of this Agreement, is deemed to exist if you:
|
(i)
|
are charged with, convicted of or enter a plea of guilty or
nolo contendere
to: (a) a felony, (b) any crime involving moral turpitude, dishonesty, breach of trust or unethical business conduct, or (c) any crime involving the business of the Company Group;
|
(ii)
|
in the performance of your duties for the Company Group or otherwise to the detriment of the Company Group, engage in: (a) dishonesty that is harmful to the Company Group, monetarily or otherwise, (b) willful or gross misconduct, (c) willful or gross neglect, (d) fraud, (e) misappropriation, (f) embezzlement, or (g) theft;
|
(iii)
|
disobey the directions of the Board, or any individual or individuals the Board authorizes to act on its or their behalf, acting within the scope of its or their authority;
|
(iv)
|
fail to comply with the policies or practices of the Company Group;
|
(v)
|
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;
|
(vi)
|
are determined, in the sole judgment of the Board or any individual or individuals the Board authorizes to act on its or their behalf, to have engaged in a pattern of poor performance;
|
(vii)
|
are determined, in the sole judgment of the Board or any individual or individuals the Board authorizes to act on its or their behalf, to have willfully engaged in conduct that is harmful to the Company Group, monetarily or otherwise;
|
(viii)
|
breach any provision of this Agreement or any other agreement between you and any member of the Company Group; or
|
(ix)
|
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.
|
(b)
|
“
Company Group
” means, collectively, Best Buy Co., Inc. and its subsidiaries.
|
(c)
|
“
Committee
” means the Compensation and Human Resources Committee of the Board of Directors of Best Buy Co., Inc.
|
(d)
|
“
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
|
1.
|
Grant of Award
. In consideration of your service on the Board of Directors of the Company (“
Board
”), the Company hereby grants to you the award set forth in the Award Notification (the “
Award
”) subject to the terms and conditions of this Agreement and the Best Buy Co., Inc. 2014 Omnibus Incentive Plan (the “
Plan
”). In the event of any conflict between this Agreement and the Plan, 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.
|
2.
|
Restricted Stock Units
. A “
Restricted
Stock Unit
” is a right to receive a share of the Company’s common stock (“
Share
”) upon the lapse of the restrictions set forth in this Agreement.
|
(a)
|
Restrictions
. During the time you serve on the Board (the “
Holding Period
”), the Restricted Stock Units are subject to the restrictions described in this Agreement and the Plan (the “
Restrictions
”). During the Holding Period, the Restricted Stock Units may not be assigned, transferred (other than by will or the laws of descent and distribution), pledged or hypothecated (whether by operation of law or otherwise) or otherwise conveyed or encumbered, and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition contrary to the provisions this Agreement or the Plan, or the levy of any execution, attachment or similar process upon the Restricted Stock Units, shall be void and unenforceable against the Company. The Restricted Stock Units are subject to forfeiture to Best Buy as provided in this Agreement and the Plan.
|
(b)
|
Vesting
. Except as otherwise set forth herein, so long as your service on the Board continues, the Restricted Stock Units shall vest in accordance with the schedule stated in the Award Notification. If your service on the Board is terminated prior to the date your Restricted Stock Units have vested for any reason other than Cause, a pro rata portion (based on your length of service during the vesting period) of the Restricted Stock Units will vest as of such termination date. If your service on the Board is terminated prior to the Vesting Date for Cause, all Restricted Stock Units will be forfeited as of the date of termination.
|
(c)
|
Issuance of Shares; Holding Period
.
Within 30 days after the end of the Holding
Period, the Shares underlying the Restricted Stock Units that have vested will be delivered to you
|
3.
|
Restrictive Covenants and Remedies
. By accepting the Award, you specifically agree to the restrictive covenants contained in this Section 3 (the “
Restrictive Covenants
”) and you agree that the Restrictive Covenants and the remedies described herein are reasonable and necessary to protect the legitimate interests of the Company Group.
|
(a)
|
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 to the Company and thereafter, to maintain the confidentiality of the Company Group’s Confidential Information and to use such Confidential Information for the exclusive benefit of the Company Group.
|
(b)
|
Non-Solicitation
. During the Holding Period and for one year following the termination of your service on the Board, you shall not:
|
(i)
|
induce or attempt to induce any employee of the Company Group to leave the employ of Company Group, or in any way interfere adversely with the relationship between any such employee and Company Group;
|
(ii)
|
induce or attempt to induce any employee of Company Group to work for, render services to, provide advice to, or supply Confidential Information of Company Group to any third Person;
|
(iii)
|
employ, or otherwise pay for services rendered by, any employee of Company Group in any business enterprise with which you may be associated, connected or affiliated;
|
(iv)
|
induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of Company Group to cease doing business with 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 Company Group; or
|
(v)
|
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 of Company Group to carry out any such activity
.
|
(c)
|
Partial Invalidity
. If any portion of this Section 3 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.
|
(d)
|
Remedy for Breach
. You agree that a breach of any of the Restrictive Covenants would cause material and irreparable harm to the Company Group that would be difficult or impossible to measure, and that monetary damages for any such harm would, therefore, be an inadequate remedy. Accordingly, you agree that if you breach any Restrictive Covenant, the Company Group shall be entitled, in addition to and without limitation upon all other remedies the Company Group 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 the Company Group in lieu of, or prior to or pending determination in any arbitration proceeding. You further agree that the duration of the Restrictive Covenant shall be extended by the same amount of time that you are in breach of any Restrictive Covenant.
|
(e)
|
Claw Back & Recovery
.
|
(i)
|
In the event (i) you breach any of the Restrictive Covenants, (ii) you engage in conduct materially adverse to the interests of the Company, including any material violations of any Company policy, (iii) you engage in intentional misconduct that caused or contributed to the restatement of any financial statements of the Company, (iv) you materially violate the terms of any agreement to which you and a member of the Company Group is a party or (v) you engage in a criminal act, fraud, or violation of any securities laws, then notwithstanding any other provision of this Agreement to the contrary, the Company, 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):
|
(A)
|
cause the immediate forfeiture of any of your then unvested Restricted Stock Units;
|
(B)
|
require you to immediately return to the Company any Shares that were previously Restricted Stock Units that are still under your control; and
|
(C)
|
require you to promptly pay to the Company an amount equal to the fair market value of all Shares included in your Award that are no longer under your control (as measured on the date of issuance of any Shares issued under any Restricted Stock Units).
|
(ii)
|
The Committee shall have sole discretion to determine what constitutes the conduct described in Section 3(e)(i) above.
|
(iii)
|
In addition to the Company’s rights set forth above, you agree your Award and the value of any portion of your Award no longer under your control, shall be subject to recovery by the Company 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.
|
(f)
|
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 fees or other compensation, fringe benefits or vacation pay) against any amounts you owe under this Section 3. You also agree that if the Company 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 the Company.
|
4.
|
General Terms and Conditions.
|
(a)
|
Rights as a Stockholder
. You will have no rights as a shareholder with respect to any Shares issuable under the Restricted Stock Units until you have actually received such Shares in accordance with the terms of this Agreement and the Plan. This means that you will not have the right to vote as a shareholder nor the right to receive dividend payments. Upon issuance of Shares, you will have all of the rights of a shareholder with respect to the Shares unless Shares are forfeited or recovered under this Agreement or the Plan.
|
(b)
|
Nature of Grant.
In accepting the Award, you acknowledge, understand and agree that:
|
(i)
|
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;
|
(ii)
|
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;
|
(iii)
|
all decisions with respect to future grants of restricted stock units, if any, will be at the sole discretion of Best Buy;
|
(iv)
|
you are voluntarily participating in the Plan;
|
(v)
|
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;
|
(vi)
|
the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
|
(vii)
|
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
|
(viii)
|
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;
|
(ix)
|
and 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.
|
(c)
|
Participant’s Acknowledgements
.
|
(i)
|
Committee’s Sole Discretion
. The Committee has sole discretion to make decisions regarding your Award, and to interpret all terms of this Agreement. You agree that all decisions regarding and interpretations of this Agreement by the Committee are binding, conclusive, final and non-appealable.
|
(ii)
|
Taxes
.
|
(A)
|
Regardless of any action the Company 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 (“
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 the Company. You further acknowledge that the Company (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including, but not limited to, the grant or vesting of the Restricted Stock 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 Restricted Stock 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 Award Date and the date of any relevant taxable event, as applicable, you acknowledge that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
|
(B)
|
To the extent the Company has a withholding obligation with respect to Tax-Related Items, you authorize the Company or its agent, at the Company’s discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:
|
(1)
|
withholding from any cash compensation paid to you by the Company;
|
(2)
|
withholding from proceeds of the sale of Shares acquired upon settlement of the Restricted Stock Units either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization); or
|
(3)
|
withholding in Shares to be issued upon settlement of the Restricted Stock Units.
|
(C)
|
To avoid negative accounting treatment, the Company 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 Restricted Stock 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.
|
(D)
|
You shall pay to the Company any amount of Tax-Related Items that the Company 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 Section 4(c)(iii). The Company 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.
|
(E)
|
You further acknowledge that you are relying solely on your own professional tax and investment advisors with respect to any and all such matters (and are not relying, in any manner, on the Company or any of its employees or representatives).
|
(a)
|
Severability
. In the event that any provision in the Plan or this Agreement is held to be invalid, illegal or unenforceable or would disqualify the Plan or this Agreement under any law, the invalid, illegal or unenforceable provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or this Agreement, such provision shall be stricken as to the applicable jurisdiction or Shares, and the remainder of the Plan or this Agreement shall remain in full force and effect.
|
(b)
|
Governing Law, Jurisdiction and Venue.
The laws of Minnesota, without regard to the conflict of law provisions, shall apply to all questions concerning this Agreement. You and the Company 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.
|
(c)
|
Costs of Enforcement
. In addition to any other remedy to which any member of the Company Group is entitled under this Agreement, you agree that the Company Group shall be entitled to recover from you any costs, expenses (including reasonable legal fees) or disbursements reasonably incurred by the Company Group to enforce any provision of this Agreement, or to otherwise defend itself from any claim brought by you or any of your beneficiaries against any member of the Company Group under any provision of this Agreement.
|
(d)
|
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 the Company 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.
|
(e)
|
Imposition of Other Requirements
. The Company 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 the Company 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.
|
(f)
|
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, the Company 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 the Company shall, in its absolute discretion, deem necessary or advisable. You understand that the Company 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.
|
(g)
|
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.
|
(h)
|
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.
|
(i)
|
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.
|
(j)
|
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.
|
5.
|
Definitions
.
Capitalized terms used but not defined in this Agreement are defined in the Plan or, if not defined therein, will have the following meanings:
|
(a)
|
“
Cause
” for termination of your service with the Company Group shall, solely for purposes of this Agreement, is deemed to exist if you:
|
(i)
|
are charged with, convicted of or enter a plea of guilty or
nolo contendere
to: (a) a felony (or a crime of comparable magnitude under applicable law), (b) any crime involving moral turpitude, dishonesty, breach of trust or unethical business conduct, or (c) any crime involving the business of the Company Group;
|
(ii)
|
in the performance of your duties for the Company Group or otherwise to the detriment of the Company Group, engage in: (a) dishonesty that is harmful to the Company Group, monetarily or otherwise, (b) willful or gross misconduct, (c) willful or gross neglect, (d) fraud, (e) misappropriation, (f) embezzlement, or (g) theft;
|
(iii)
|
disobey the directions of the Board, or any individual or individuals the Board authorizes to act on its or their behalf, acting within the scope of its or their authority;
|
(iv)
|
fail to comply with the policies or practices of the Company Group;
|
(v)
|
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;
|
(vi)
|
are determined, in the sole judgment of the Board or any individual or individuals the Board authorizes to act on its or their behalf, to have engaged in a pattern of poor performance;
|
(vii)
|
are determined, in the sole judgment of the Board or any individual or individuals the Board authorizes to act on its or their behalf, to have willfully engaged in conduct that is harmful to the Company Group, monetarily or otherwise;
|
(viii)
|
breach any provision of this Agreement or any other agreement between you and any member of the Company Group; or
|
(ix)
|
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.
|
(b)
|
“
Company Group
” means, collectively, Best Buy Co., Inc. and its subsidiaries.
|
(c)
|
“
Committee
” means the Compensation and Human Resources Committee of the Board of Directors of Best Buy Co., Inc.
|
(d)
|
“
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 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 your service, 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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: September 4, 2015
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/s/ HUBERT JOLY
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Hubert Joly
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Chairman and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Best Buy Co., Inc.;
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2.
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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;
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3.
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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;
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4.
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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
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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
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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.
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Date: September 4, 2015
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/s/ SHARON L. McCOLLAM
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|
Sharon L. McCollam
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|
Chief Administrative Officer and Chief Financial Officer
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Date: September 4, 2015
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/s/ HUBERT JOLY
|
|
Hubert Joly
|
|
Chairman and Chief Executive Officer
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Date: September 4, 2015
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/s/ SHARON L. McCOLLAM
|
|
Sharon L. McCollam
|
|
Chief Administrative Officer and Chief Financial Officer
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