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On June 11,
2018,2020, the Compensation Committee approved an annual equity award for each of the then-serving non-management directors in the form of restricted stock units. The awards each had a value of $195,000, which translated into
2,6492,525 restricted stock units. The Compensation Committee also approved an additional equity award for the non-executive chairman having a value of $165,000, which translated into 1,747 restricted stock units. The restricted stock units are entitled to dividend equivalents, which are subject to the same restrictions and vesting criteria as the underlying units. All restricted stock units granted to our directors fully vest one year from the grant date and must be held until the director leaves the Board. Director equity awards are prorated through a director’s termination date if a director leaves the Board before the restricted stock units have vested, unless the director is terminated for Cause, in which case all unvested restricted stock units are forfeited.
The Compensation Committee also considers prorated
annual equity awards for new directors who are appointed to the Board between each annual grant. As such, the Compensation Committee approved prorated equity awards for new directors,
Ms. Kent (1,843Mr. Marte (906 restricted stock units) and Mr.
Woods (1,761Rendle (430 restricted stock units) in
November, 2018, and January, 2019, respectively.March 2021.
Director Compensation Table
The following table summarizes the compensation earned during fiscal
20192021 by our non-management directors:
Name(1) | Fees Earned or Paid In Cash | Stock Awards(2) | Option Awards(3) | All Other Compensation (4) | Total |
Lisa M. Caputo | $ | 90,000 | | $ | 195,072 | | $ | — | | $ | — | | $ | 161,124 | |
J. Patrick Doyle(5) | | 96,044 | | | 195,072 | | | — | | | — | | | 291,116 | |
Russell P. Fradin(6) | | 210,000 | | | 195,072 | | | — | | | — | | | 405,072 | |
Kathy J. Higgins Victor(7) | | 105,000 | | | 195,072 | | | — | | | — | | | 300,072 | |
David W. Kenny | | 90,000 | | | 195,072 | | | — | | | — | | | 285,072 | |
Cindy R. Kent(8) | | 31,648 | | | 122,430 | | | — | | | — | | | 154,078 | |
Karen L. McLoughlin | | 90,000 | | | 195,072 | | | — | | | — | | | 285,072 | |
Thomas L. Millner(9) | | 115,000 | | | 195,072 | | | — | | | — | | | 310,072 | |
Claudia F. Munce | | 90,000 | | | 195,072 | | | — | | | — | | | 285,072 | |
Richelle P. Parham(10) | | 77,637 | | | 195,072 | | | — | | | — | | | 272,709 | |
Gérard R. Vittecoq(11) | | 35,440 | | | — | | | — | | | 35,684 | | | 71,124 | |
Eugene A. Woods(12) | | 12,610 | | | 101,434 | | | — | | | — | | | 114,044 | |
| Lisa M. Caputo(5) | | | $81,209 | | | $195,056 | | | $— | | | $— | | | $276,265 | |
| J. Patrick Doyle(6) | | | 134,423 | | | 330,012 | | | — | | | — | | | 464,435 | |
| Russell P. Fradin(7) | | | 30,495 | | | — | | | — | | | 63,593 | | | 95,088 | |
| Kathy J. Higgins Victor(8) | | | 52,747 | | | 195,056 | | | — | | | 66,623 | | | 314,426 | |
| David W. Kenny(9) | | | 90,000 | | | 195,056 | | | — | | | — | | | 285,056 | |
| Cindy R. Kent(10) | | | 30,495 | | | — | | | — | | | — | | | 30,495 | |
| Mario J. Marte(11) | | | 6,593 | | | — | | | — | | | — | | | 6,593 | |
| Karen L. McLoughlin(12) | | | 86,250 | | | 195,056 | | | — | | | — | | | 281,306 | |
| Thomas L. Millner(13) | | | 93,750 | | | 195,056 | | | — | | | — | | | 288,806 | |
| Claudia F. Munce | | | 75,000 | | | 195,056 | | | — | | | — | | | 270,056 | |
| Richelle P. Parham | | | 75,000 | | | 195,056 | | | — | | | — | | | 270,056 | |
| Steven E. Rendle(14) | | | — | | | — | | | — | | | — | | | — | |
| Eugene A. Woods | | | 75,000 | | | 195,056 | | | — | | | — | | | 270,056 | |
(1)
| (1) | Ms. Barry and our former executive chairman and CEO Mr. Joly, our only management directordirectors during fiscal 2019,2021, did not receive any compensation for his serviceserving as a director.directors. |
| (2)
| The amounts in this column reflect the aggregate grant date fair value for restricted stock units granted to our non-management directors during fiscal 2019,2021, measured in accordance with ASC Topic 718. As of February 2, 2019,January 30, 2021, our non-management directors held outstanding stock units including both unvested restricted stock units and restricted stock units that have vested, but that are subject to a holding requirement until the director leaves the board (“deferred units”) as follows: Ms. Caputo — 2,7062,568 unvested units and 27,69433,665 deferred units; Mr. Doyle — 2,7064,345 unvested units and 18,31624,287 deferred units; Mr. Fradin — 2,7060 unvested units and 27,6940 deferred units; Ms. Higgins Victor — 2,7060 unvested units and 27,6940 deferred units; Mr. Kenny — 2,7062,568 unvested units and 23,67129,642 deferred units; Ms. Kent — 1,8590 unvested units and 0 deferred units; Mr. Marte – 0 unvested units and 0 deferred units; Ms. McLoughlin — 2,7062,568 unvested units and 13,53419,505 deferred units; Mr. Millner — 2,7062,568 unvested units and 22,15828,129 deferred units; Ms. Munce — 2,7062,568 unvested units and 11,31117,282 deferred units; Ms. Parham — 2,7062,568 unvested units and 05,971 deferred units; and Mr. Woods — 1,7612,568 unvested units and 04,977 deferred units. |
| (3)
| We did not grant stock option awards to our non-management directors in fiscal 2019.2021. As of February 2, 2019,January 30, 2021, none of our non-management directors held outstanding stock options as follows: Ms. Caputo — 12,500 stock options; Mr. Doyle — 0 stock options; Mr. Fradin — 0 stock options; Ms. Higgins Victor — 10,000 stock options; Mr. Kenny — 0 stock options; Ms. Kent — 0 stock options; Ms. McLoughlin — 0 stock options; Mr. Millner — 0 stock options; Ms. Munce — 0 stock options; Ms. Parham — 0 stock options; and Mr. Woods — 0 stock options. |
| (4)
| Pursuant to the terms of the restricted stock units granted to our non-management directors on June 19, 2013, directors are entitled to an accrual of dividend equivalents from the vesting date (June 19,14, 2014) through the date the restricted stock units are issued to the director as shares (upon their departure from the Board). DividendThese dividend equivalent accruals are settled in cash at the time the shares are delivered to the departing director. The amountamounts in this column reflectsreflect the dividend equivalent paymentpayments to Mr. Vittecoq upon his departure.Fradin and Ms. Higgins Victor following their departures this year. |
(5)
| (5)On September 17, 2020, Ms. Caputo became chair of the Nominating Committee. |
(6)
| Mr. Doyle served as our Lead Independent Director through June 11, 2020, when he became our non-executive Chairman. |
(7)
| Mr. Fradin’s Board service ended on June 11, 2020, at the conclusion of our 2020 Regular Meeting of Shareholders. |
(8)
| Ms. Higgins Victor’s Board service ended on September 17, 2020, when she retired from the Board for personal reasons. She was also chair of the Nominating Committee through that date. |
(9)
| Mr. Kenny is chair of the Compensation Committee. |
(10)
| Ms. Kent’s Board service ended on June 11, 2020, at the conclusion of our 2020 Regular Meeting of Shareholders. |
(11)
| Mr. Marte was appointed to the Board on January 7, 2021. |
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(12)
| Ms. McLoughlin is chair of the Finance and Investment Policy Committee on June 12, 2018. |
| (6) | Mr. Fradin is our Lead Independent Director. He is also chair of the Compensation Committee. |
| (7) | Ms. Higgins Victor is chair of the Nominating Committee. |
| (8) | Ms. Kent was appointed to the Board on September 28, 2018. |
| (9)(13)
| Mr. Millner is chair of the Audit Committee. |
(14)
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| (10) | Ms. ParhamMr. Rendle was appointed to the Board on March 16, 2018.18, 2021. He was not a director during fiscal 2021. |
| (11) | Mr. Vittecoq’s Board service ended June 12, 2018. |
| (12) | Mr. Woods was appointed to the Board on December 14, 2018. |
Director Stock Ownership Guidelines
The Compensation Committee has established stock ownership guidelines requiring our non-management directors to own, indirectly or directly, 10,000 shares. Historically, we have expected that, until the ownership target is met, directors would retain
50 percent50% of their granted equity (net of taxes). In further support of director stock ownership, we began in fiscal 2014 granting director equity subject to a holding requirement for the duration of a director’s service on the Board. In fiscal
2019,2021, all of our non-management directors were in compliance with the ownership guidelines, either by meeting the ownership target or by making progress towards the ownership target. Our stock ownership guidelines for executive officers are discussed in the
Compensation Discussion and Analysis — Executive Compensation Elements — Other Compensation section.
Deferred Compensation Plan
Each calendar year, we offer our directors the opportunity to defer up to
100 percent100% of their annual and committee chair retainers under the Deferred Compensation Plan which is described in the section
Compensation of Executive Officers — Nonqualified Deferred Compensation. No Company contributions or matching contributions are made for the benefit of directors under the Deferred Compensation Plan.
We reimburse all directors for travel and other necessary business expenses incurred in performance of their services for us. In addition, all directors are covered under a directors’ and officers’ indemnity insurance policy.
Pursuant to SEC rules, we are providing the following information about the ratio of the annual total compensation of our median employee to the annual total compensation of
Mr. Joly,Ms. Barry, our
Chairman and CEO. Due to the flexibility afforded by the rules of the SEC in calculating the pay ratio amount, the ratio we calculated may not be comparable to the CEO pay ratio presented by other companies.
For fiscal
2019,2021, our last completed fiscal year,
Mr. JolyMs. Barry had annual total compensation of
$17,382,486$12,033,503 as reflected in the
Compensation of Executive Officers — Summary Compensation Table section of this proxy statement. Our median employee’s annual total compensation for fiscal
20192021 was
$28,500.$30,542. As a result, we estimate that
Mr. Joly’sMs. Barry’s annual total compensation was approximately
605394 times that of our median employee.
In determining the median employee:
We prepared a list of all Best Buy employees as of November 1, 2018.January 30, 2021. As of November 1, 2018,January 30, 2021, we had approximately 127,580101,680 employees, including 111,83089,950 U.S. employees, and 15,75011,730 non-U.S. employees. In identifying our median employee, we included our approximately 13,29010,610 Canadian employees, but, in accordance with SEC rules, we excluded our employees in China and Mexico, where we have about 175140 and 2,290980 employees, respectively, representing approximately 1.9 percent1.1% in the aggregate of our worldwide workforce. After excluding employees in these countries, as of November 1, 2018,January 30, 2021, we had 125,114100,560 employees. Additionally, these numbers exclude approximately 1,200 GreatCall employees. We acquired the GreatCall business on October 1, 2018.
As permitted under SEC rules, we used compensation that would equate to W-2 wages for the prior twelve months as our consistently applied compensation measure, which we believe provides a reasonable estimate of annual compensation for our employees. We annualized W-2 wages for employees, other than occasional/seasonal employees, who were not employed for the full twelve months. The median amount was then identified from the annualized list.
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ITEM OF BUSINESS NO. 4 — RIGHT TO ACT BY WRITTEN CONSENT The Best Buy Board recommends a vote AGAINST this proposal and its opposition statement can be found below the proposal.
This shareholder proposal has been submitted by John Chevedden, 2215 Nelson Avenue, No. 205 Redondo Beach, CA 90278 (the beneficial owner of no less than 50 shares of Best Buy Common Stock). The proponent has requested we include the proposal and supporting statement in this proxy statement, and, if properly presented, the proposal will be voted on at the Regular Meeting of Shareholders.
This proposal and supporting statement are quoted verbatim below, and Best Buy is not responsible for any inaccuracies contained in them.
Summary of the Shareholder Proposal - Adopt a Mainstream Shareholder Right—Written Consent
Shareholders request that our board of directors take the steps necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This includes shareholder ability to initiate any appropriate topic for written consent.
Hundreds of major companies enable shareholder action by written consent. This proposal topic won majority shareholder support at 13 large companies in a single year. This included 67%-support at both Allstate and Sprint. This proposal topic also won 63%-support at Cigna Corp. (CI) in 2019. This proposal topic would have received higher votes than 63% to 67% at these companies if more shareholders had access to independent proxy voting advice.
The right for shareholders to act by written consent is gaining acceptance as a more important right than the right to call a special meeting. This also seems to be the conclusion of the Intel Corporation (INTC) shareholder vote at the 2019 Intel annual meeting.
The directors at Intel apparently thought they could divert shareholder attention away from written consent by making it less difficult for shareholders to call a special meeting. However Intel shareholders responded with greater support for written consent in 2019 compared to 2018.
After a 45%-vote (less than a majority vote) for a written consent shareholder proposal The Bank of New York Mellon Corporation (BK) said it adopted written consent in 2019.
A shareholder right to act by written consent affords Best Buy management strong protection for a holdout management mentality during the current rapid changing business environment. Due to the low shareholder participation in BBY annual meeting elections any action taken by written consent would still need 60% supermajority approval from the shares that normally cast ballots at the BBY annual meeting to equal a majority from the BBY shares outstanding.
The avalanche of bare bones online shareholder meetings in 2020 makes the shareholder right to act by written consent more valuable. Shareholders are so restricted in online meetings that management will never want a return to the more transparent in-person shareholder meeting format.
Shareholders are restricted in making their views known at online shareholder meetings because all constructive questions and comments can be screened out by management. For instance the Goodyear shareholder meeting was spoiled by a trigger-happy management mute button for shareholders. And AT&T, with 3000 institutional shareholders, would not even allow shareholders to speak.
Please vote yes:
Adopt a Mainstream Shareholder Right — Written Consent — Item 4
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The Board has carefully considered this proposal and does not believe that its adoption is in the best interests of Best Buy and its shareholders. The Board therefore unanimously recommends a vote AGAINST this proposal.
Action by Written Consent is Duplicative of Best Buy Shareholders’ Robust Right to Call Special Meetings. Best Buy shareholders have the right to call a special meeting:
○ | At a 25% threshold with respect to a special meeting for the purpose of considering any action to directly or indirectly facilitate or effect a merger; and |
○ | At a 10% threshold for all other matters. |
A right to act by written consent is duplicative of the existing shareholder right to call a special meeting. Our 10% stock ownership threshold for calling a special meeting (other than in connection with mergers) is lower than the most common threshold among S&P 500 companies that provide the right for shareholders to call a special meeting, which is 25% for all matters.
Shareholder Action by Written Consent Circumvents the Deliberative Shareholder Meeting Process. The Board believes that a shareholder meeting framework (whether at an annual or specially called shareholder meeting) better serves shareholders’ interests than action by written consent as it is an inherently more structured, democratic and open process. Action by written consent does not require that all shareholders receive notice of the written consent proposal, be given adequate time to review the subject matter of the proposal, be given the opportunity to consider alternative views on the proposal or be afforded the opportunity to debate the merits of the proposal at an open meeting. Shareholders also have greater ability in a meeting framework to change their minds and their votes prior to action being effective. Complete information about the proposed shareholder action is widely distributed beforehand through proxy statement materials, facilitating open and informed discussion prior to and in connection with the meeting. The meeting process also gives the Board time to analyze and provide a recommendation on the proposal and promotes well informed decision-making by shareholders and directors.
Written Consent Rights May Disenfranchise Shareholders and Have Other Potentially Negative Consequences. Unlike a shareholder meeting, the written consent process does not guarantee that all shareholders are informed of the proposed action or can participate in the decision. The proposal does not impose any ownership requirements on the shareholders soliciting written consent and, as a result, could be initiated by a single shareholder holding a very small number of shares. Written consent rights of the type proposed may encourage accumulation of short-term share ownership by a small group of investors (including those who accumulate a short-term voting position through borrowed shares) to advance a special agenda that may be contrary to the long-term best interests of Best Buy and its shareholders.
Additionally, a written consent process could lead various groups of shareholders to solicit written consents at the same time, potentially on a nearly continuous basis as different shareholder groups select their own special interest causes that may not be in the best long-term interests of all shareholders. These solicitations may be duplicative or conflicting. Addressing these solicitations would impose significant administrative and financial burdens on the Company without necessarily providing any corresponding benefit to shareholders.
Best Buy Has a Long-Standing Commitment to Sound Corporate Governance Practices and an Active Shareholder Engagement Program to Ensure Board Accountability. The ability to act by written consent is unnecessary because Best Buy continually evaluates shareholder feedback and developments in corporate governance, and implements appropriate changes to its corporate governance policies and practices that it believes are in the best interests of Best Buy and its shareholders. Best Buy has taken several actions in prior years in consideration of shareholder feedback elicited during its shareholder
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engagement process, including, among other actions, eliminating supermajority shareholder vote requirements in its Amended and Restated Articles of Incorporation in fiscal 2021, adopting proxy access and declassifying the Board. Our continual engagement with shareholders complements Best Buy’s good governance practices, which include the following:
| ✔ | | | Proxy Access for Director Nominations – Eligible shareholders can include their own nominees for the Board in our proxy statement and ballot in accordance with our By-laws. | |
| ✔ | | | Independent Board Leadership – The roles of Chair of the Board and CEO are separate at Best Buy. The Chairman of the Board is an independent director, as are all chairs of Board committees. | |
| ✔ | | | Annual Election of Directors – All Best Buy directors are elected annually by the shareholders. | |
| ✔ | | | Majority Voting for Election of Directors – Best Buy has a majority voting standard for election of directors in uncontested elections. | |
| ✔ | | | Majority Voting for Charter and By-law Amendments – As discussed above, Best Buy has no supermajority voting provisions; shareholders can approve charter and bylaw amendments with a majority vote. | |
| ✔ | | | Active Board Oversight on Environmental, Social and Governance Initiatives – The Board, with oversight by the Nominating, Corporate Governance and Public Policy Committee, is integrally involved in the Company’s ESG initiatives. | |
For all of the above reasons, the Board believes that this proposal is not in the best interest of all of our shareholders because of the risk of abuse associated with shareholder action by written consent, including bypassing procedural protections that offer transparency and advance notice, both of which are afforded with a shareholder meeting, as well as Best Buy shareholders’ existing right to call a special meeting with a 10% threshold (for all matters other than in connection with a merger), Best Buy’s commitment to good corporate governance and Best Buy’s strong shareholder engagement program.
Board Voting Recommendation The Board recommends that you vote AGAINST this proposal.
IT IS INTENDED THAT, UNLESS OTHERWISE INSTRUCTED, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED “AGAINST” THE PROPOSAL TO ACT BY WRITTEN CONSENT.
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Management and the Board are not aware of any other item of business that will be addressed at the Meeting. If an item properly comes up for vote at the Meeting, or at any postponement or adjournment of the Meeting, that is not described in the Meeting Notice, including adjournment of the Meeting and any other matters incident to the conduct of the Meeting, the Proxy Agents will vote the shares subject to your proxy in their discretion. Discretionary authority for them to do so is contained in the proxy.
PROPOSALS FOR THE NEXT REGULAR MEETING OF SHAREHOLDERS Any shareholder proposal intended to be presented for consideration at our
20202022 Regular Meeting of Shareholders and to be included in our proxy statement for that meeting must be received by our Secretary no later than January
2, 2020,5, 2022, at our principal executive office, addressed as follows:
Mr. Todd G. Hartman
General Counsel, Chief Risk & Compliance Officer and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423
In accordance
Our By-laws establish advance notice procedures with
our By-laws,respect to shareholder proposals and the nomination of candidates for election as directors and the proposal of any
shareholder proposal, including any director nominations, received andbusiness not intended to be
presented for consideration at our 2020 Regular Meeting of Shareholders, though not included in
ourthe corporation’s proxy statement,
other than nominations made by or at the direction of the board of directors or a committee of the board of directors. In order for
thatany matter to be “properly brought” before a meeting,
a shareholder must comply with advance notice requirements and provide us with certain information. Generally, to be timely, a shareholder’s notice must be received
byat our
Secretary at the address set forth above noprincipal executive offices not less than 120 days nor more than 150 days
and no less than 120 days beforeprior to the anniversary of the
prior year’s regularimmediately preceding annual meeting of shareholders. Accordingly, such proposals will be considered untimely if received before January
13, 2020,17, 2022, or after February
12, 2020.16, 2022. Any such shareholder proposal must also comply with the procedural requirements of our By-laws. The advance notice requirement in our By-laws supersedes the notice period in Rule 14a-4(c)(1) of the Securities Exchange Act of 1934 regarding discretionary proxy voting authority with respect to shareholder business.
By Order of the Board of Directors
| May 1, 2019 | Todd G. Hartman
Secretary |
Todd G. Hartman
Secretary
May 5, 2021
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Reconciliation of Non-GAAP Financial MeasuresThe following table reconciles
Reconciliations of operating income effective tax rateas a percent of revenue and diluted earnings per share from continuing operations(“EPS”) (GAAP financial measures) for the periods presented to non-GAAP operating income non-GAAP effective tax rateas a percent of revenue and non-GAAP diluted earnings per share from continuing operationsEPS (non-GAAP financial measures) were as follows:
| Operating income as a % of revenue | | | 5.1% | | | 4.6% | | | | |
| Restructuring charges(1) | | | 0.5% | | | 0.1% | | | | |
| Intangible asset amortization(2) | | | 0.2% | | | 0.2% | | | | |
| Non-GAAP operating income as a % of revenue | | | 5.8% | | | 4.9% | | | | |
| | | | | | | | | | | |
| Diluted EPS | | | $6.84 | | | $5.75 | | | | |
| Restructuring – inventory markdowns(3) | | | 0.09 | | | — | | | | |
| Price-fixing settlement(4) | | | (0.08) | | | — | | | | |
| Restructuring charges(1) | | | 0.97 | | | 0.15 | | | | |
| Intangible asset amortization(2) | | | 0.30 | | | 0.27 | | | | |
| Acquisition-related transaction costs(2) | | | — | | | 0.01 | | | | |
| Gain on investments, net(5) | | | (0.05) | | | — | | | | |
| Income tax impact of non-GAAP adjustments(6) | | | (0.16) | | | (0.11) | | | | |
| Non-GAAP diluted EPS | | | $7.91 | | | $6.07 | | | | |
For additional information regarding the nature of charges discussed below, refer to Note 2, Restructuring; Note 3, Acquisitions; Note 4, Goodwill and Intangible Assets; and Note 11, Income Taxes, of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for
the periods presented ($ in millions, except per share amounts): | Fiscal Year |
| 2019 | 2018 | 2017(1) |
Operating income | $ | 1,900 | | $ | 1,843 | | $ | 1,854 | |
Restructuring charges(2) | | 46 | | | 10 | | | 39 | |
Intangible asset amortization(3) | | 22 | | | — | | | — | |
Acquisition-related transaction costs(3) | | 13 | | | — | | | — | |
Tax reform-related item - employee bonus(4) | | 7 | | | 80 | | | — | |
Tax reform-related item - charitable contribution(4) | | — | | | 20 | | | — | |
Net CRT/LCD settlements(5) | | — | | | — | | | (161 | ) |
Other Canada brand consolidation charges - SG&A(6) | | — | | | — | | | 1 | |
Non-GAAP operating income | $ | 1,988 | | $ | 1,953 | | $ | 1,733 | |
| | | | | | | | | |
Diluted earnings per share from continuing operations | $ | 5.20 | | $ | 3.26 | | $ | 3.74 | |
Restructuring charges(2) | | 0.16 | | | 0.03 | | | 0.12 | |
Intangible asset amortization(3) | | 0.08 | | | — | | | — | |
Acquisition-related transaction costs(3) | | 0.05 | | | — | | | — | |
Tax reform - repatriation tax(4) | | (0.07 | ) | | 0.68 | | | — | |
Tax reform - deferred tax rate change(4) | | (0.02 | ) | | 0.24 | | | — | |
Tax reform-related item - employee bonus(4) | | 0.02 | | | 0.26 | | | — | |
Tax reform-related item - charitable contribution(4) | | — | | | 0.07 | | | — | |
Net CRT/LCD settlements(5) | | — | | | — | | | (0.50 | ) |
Other Canada brand consolidation charges - SG&A(6) | | — | | | — | | | 0.01 | |
(Gain) loss on sale of investments, net(7) | | (0.04 | ) | | 0.02 | | | (0.01 | ) |
Income tax impact of non-GAAP adjustments(8) | | (0.06 | ) | | (0.14 | ) | | 0.15 | |
Non-GAAP diluted earnings per share from continuing operations | $ | 5.32 | | $ | 4.42 | | $ | 3.51 | |
fiscal 2021.
| (1) | Beginning in the first quarter of fiscal 2018, we no longer exclude non-restructuring property and equipment impairment charges from our non-GAAP financial measures. To ensure our financial results are comparable, we have recast fiscal 2017 balances to conform to this presentation. Refer to the Overview section included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, within our Annual Report on Form 10-K for fiscal 2019 for more information. |
| (2) | Refer to Note 9, Restructuring Charges, in the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for fiscal 2019 for additional information regarding the nature of these charges. For fiscal 2019, $47 million related to the U.S. and a benefit of $1 million related to Canada. For fiscal 2018, $9 million related to the U.S. and $1 million related to Canada. For fiscal 2017, $31 million related to the U.S. and $8 million related to Canada. |
| (3)
| Represents charges associated with actions taken to better align the acquisition of GreatCall,Company’s organizational structure with its strategic focus and the decision to exit operations in Mexico in fiscal 2021, and charges and subsequent adjustments associated with U.S. retail operating model changes in fiscal 2020. |
(2)
| Represents charges associated with acquisitions, including (1) the non-cash amortization of definite-lived intangible assets, including customer relationships, tradenames and developed technology, and (2) acquisition-related transaction costs primarily comprised of professional fees. Refer to Note 2, Acquisition, in the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for fiscal 2019 for additional information. |
| (4)(3)
| Represents charges and subsequent adjustments resulting from the Tax Act enacted into law in the fourth quarterinventory markdowns recorded within cost of fiscal 2018, including amountssales associated with a deemed repatriation tax and the revaluation of deferred tax assets and liabilities, as well as tax reform-related items announceddecision to exit operations in response to future tax savings created by the Tax Act, including a one-time bonus for certain employees and a one-time contribution to the Best Buy Foundation.Mexico in fiscal 2021. |
| (5)(4)
| Represents CRT and LCDa price-fixing litigation settlements reached related to the U.S., net of related legal fees and costs. The settlements relatedsettlement received in relation to products purchased and sold in prior fiscal years. |
| (6)(5)
| Represents charges related to the Canadian brand consolidation initiatedan increase in the first quarterfair value of fiscal 2016, primarily due to retention bonuses and other store-related costs that were a direct result of the consolidation but did not qualify as restructuring charges. |
| (7) | Represents (gain) loss on sale of investments andminority equity investment impairments included in Investment income and other on our Consolidated Statements of Earnings. |
| (8)(6)
| Represents the summation of the calculated income tax charge related to each non-GAAP non-income tax adjustment. The non-GAAP adjustments primarily relate primarily to adjustments in the U.S. and Canada.Mexico. As such, the income tax charge is calculated using the statutory tax ratesrate of 24.5% for all U.S. non-GAAP items for all periods presented. There is no income tax charge for Mexico non-GAAP items, as there was no tax benefit recognized on these expenses in the U.S. (24.5%, 36.7% and 38.0% for fiscal 2019, fiscal 2018 and fiscal 2017, respectively) and Canada (26.9%, 26.6% and 26.6% for fiscal 2019, fiscal 2018 and fiscal 2017, respectively), applied to the non-GAAP adjustmentscalculation of each country.GAAP income tax expense. |
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| | | 20192021 Proxy Statement
| | | 7984
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