Document Information Statement
Document Information Statement - shares | 3 Months Ended | |
May 02, 2020 | May 22, 2020 | |
Document Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | May 2, 2020 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --02-01 | |
Document Transition Report | false | |
Entity File Number | 1-9595 | |
Entity Registrant Name | BEST BUY CO., INC. | |
Entity Incorporation, State or Country Code | MN | |
Entity Address, Address Line One | 7601 Penn Avenue South | |
Entity Address, City or Town | Richfield | |
Entity Address, State or Province | MN | |
Entity Tax Identification Number | 41-0907483 | |
Entity Address, Postal Zip Code | 55423 | |
City Area Code | 612 | |
Local Phone Number | 291-1000 | |
Title of 12(b) Security | Common Stock, $0.10 par value per share | |
Trading Symbol | BBY | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 258,309,045 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000764478 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Current assets | |||
Cash and cash equivalents | $ 3,919 | $ 2,229 | $ 1,561 |
Receivables, net | 749 | 1,149 | 833 |
Merchandise inventories | 3,993 | 5,174 | 5,195 |
Other current assets | 335 | 305 | 425 |
Total current assets | 8,996 | 8,857 | 8,014 |
Property and equipment, net | 2,291 | 2,328 | 2,334 |
Operating lease assets | 2,631 | 2,709 | 2,708 |
Goodwill | 986 | 984 | 915 |
Other assets | 701 | 713 | 579 |
Total assets | 15,605 | 15,591 | 14,550 |
Current liabilities | |||
Accounts payable | 4,428 | 5,288 | 4,718 |
Unredeemed gift card liabilities | 257 | 281 | 265 |
Deferred revenue | 531 | 501 | 409 |
Accrued compensation and related expenses | 213 | 410 | 275 |
Accrued liabilities | 769 | 906 | 851 |
Short-term debt | 1,250 | ||
Current portion of operating lease liabilities | 683 | 660 | 639 |
Current portion of long-term debt | 673 | 14 | 14 |
Total current liabilities | 8,804 | 8,060 | 7,171 |
Long-term liabilities | 694 | 657 | 659 |
Long-term operating lease liabilities | 2,076 | 2,138 | 2,173 |
Long-term debt | 621 | 1,257 | 1,193 |
Contingencies (Note 10) | |||
Equity | |||
Preferred stock, $1.00 par value: Authorized - 400,000 shares; Issued and outstanding - none | |||
Common stock, $0.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 257 million, 256 million, and 267 million shares, respectively | 26 | 26 | 27 |
Additional paid-in capital | 15 | ||
Retained earnings | 3,126 | 3,158 | 3,038 |
Accumulated other comprehensive income | 243 | 295 | 289 |
Total equity | 3,410 | 3,479 | 3,354 |
Total liabilities and equity | $ 15,605 | $ 15,591 | $ 14,550 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Condensed Consolidated Balance Sheets [Abstract] | |||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
Preferred stock, authorized shares | 400,000 | 400,000 | 400,000 |
Preferred stock, issued shares | 0 | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 |
Common stock, authorized shares | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Common stock, issued shares | 257,000,000 | 256,000,000 | 267,000,000 |
Common stock, outstanding shares | 257,000,000 | 256,000,000 | 267,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Condensed Consolidated Statements of Earnings [Abstract] | ||
Revenue | $ 8,562 | $ 9,142 |
Cost of sales | 6,597 | 6,973 |
Gross profit | 1,965 | 2,169 |
Selling, general and administrative expenses | 1,735 | 1,835 |
Restructuring charges | 1 | |
Operating income | 229 | 334 |
Other income (expense): | ||
Investment income and other | 6 | 14 |
Interest expense | (17) | (18) |
Earnings before income tax expense | 218 | 330 |
Income tax expense | 59 | 65 |
Net earnings | $ 159 | $ 265 |
Basic earnings per share | $ 0.61 | $ 0.99 |
Diluted earnings per share | $ 0.61 | $ 0.98 |
Weighted-average common shares outstanding | ||
Basic | 258.3 | 267.6 |
Diluted | 260.4 | 271.5 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Net earnings | $ 159 | $ 265 |
Foreign currency translation adjustments, net of tax | (52) | (5) |
Comprehensive income | $ 107 | $ 260 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Operating activities | ||
Net earnings | $ 159 | $ 265 |
Adjustments to reconcile net earnings to total cash provided by operating activities: | ||
Depreciation and amortization | 207 | 200 |
Stock-based compensation | 15 | 36 |
Deferred income taxes | 15 | 13 |
Other, net | 6 | 1 |
Changes in operating assets and liabilities: | ||
Receivables | 383 | 182 |
Merchandise inventories | 1,136 | 207 |
Other assets | (12) | (14) |
Accounts payable | (816) | (519) |
Income taxes | 31 | 10 |
Other liabilities | (297) | (379) |
Total cash provided by operating activities | 827 | 2 |
Investing activities | ||
Additions to property and equipment | (178) | (193) |
Other, net | (1) | 1 |
Total cash used in investing activities | (179) | (192) |
Financing activities | ||
Repurchase of common stock | (62) | (98) |
Dividends paid | (141) | (134) |
Borrowings of debt | 1,250 | |
Other, net | 2 | 6 |
Total cash provided by (used in) financing activities | 1,049 | (226) |
Effect of exchange rate changes on cash and cash equivalents | (18) | (1) |
Increase (decrease) in cash, cash equivalents and restricted cash | 1,679 | (417) |
Cash, cash equivalents and restricted cash at beginning of period | 2,355 | 2,184 |
Cash, cash equivalents and restricted cash at end of period | $ 4,034 | $ 1,767 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning balances at Feb. 02, 2019 | $ 27 | $ 2,985 | $ 294 | $ 3,306 | |
Beginning balances (in shares) at Feb. 02, 2019 | 266 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net earnings | 265 | 265 | |||
Other comprehensive loss, net of tax: | |||||
Foreign currency translation adjustments, net of tax | (5) | (5) | |||
Stock-based compensation | $ 36 | 36 | |||
Issuance of common stock | 11 | 11 | |||
Issuance of common stock (in shares) | 2 | ||||
Common stock dividends | 2 | (136) | (134) | ||
Repurchase of common stock | (49) | (57) | (106) | ||
Repurchase of common stock (in shares) | (1) | ||||
Ending balances at May. 04, 2019 | $ 27 | 3,038 | 289 | 3,354 | |
Ending balances (in shares) at May. 04, 2019 | 267 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Cumulative effect of new accounting principle in period of adoption | Adoption of ASU 2014-09 [Member] | (19) | (19) | |||
Beginning balances at Feb. 01, 2020 | $ 26 | 3,158 | 295 | 3,479 | |
Beginning balances (in shares) at Feb. 01, 2020 | 256 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net earnings | 159 | 159 | |||
Other comprehensive loss, net of tax: | |||||
Foreign currency translation adjustments, net of tax | (52) | (52) | |||
Stock-based compensation | 15 | 15 | |||
Issuance of common stock | 6 | 6 | |||
Issuance of common stock (in shares) | 2 | ||||
Common stock dividends | 2 | (143) | (141) | ||
Repurchase of common stock | (8) | (48) | (56) | ||
Repurchase of common stock (in shares) | (1) | ||||
Ending balances at May. 02, 2020 | $ 26 | $ 15 | $ 3,126 | $ 243 | $ 3,410 |
Ending balances (in shares) at May. 02, 2020 | 257 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Condensed Consolidated Statements of Changes in Shareholders' Equity [Abstract] | ||
Dividends declared per common share | $ 0.55 | $ 0.50 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
May 02, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us” and “our” in these Notes to Condensed Consolidated Financial Statements refers to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the United States (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements. Historically, we have generated a large proportion of our revenue and earnings in the fiscal fourth quarter, which includes the majority of the holiday shopping season in the U.S., Canada and Mexico. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The interim financial statements and the related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020. The first three months of fiscal 2021 and fiscal 2020 included 13 weeks. In order to align our fiscal reporting periods and comply with statutory filing requirements, we consolidate the financial results of our Mexico operations on a one-month lag. Our policy is to accelerate recording the effect of events occurring in the lag period that significantly affect our condensed consolidated financial statements. No such events were identified for the reported periods. In preparing the accompanying condensed consolidated financial statements, we evaluated the period from May 2, 2020, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for the reported periods. COVID-19 In March 2020, the World Health Organization declared the outbreak of novel coronavirus disease ("COVID-19") as a pandemic. Except where otherwise directed by state and local authorities, on March 22, 2020, we made the decision for the health and safety of our customers and employees to move our stores to a contactless, curbside-only operating model. We also suspended in-home delivery, repair and consultation services on March 22, 2020, and resumed these offerings on April 27, 2020, after implementing new safety guidelines. In light of the uncertainty surrounding the impact of COVID-19 and to maximize liquidity, we executed a short-term draw on the full amount of our $ 1.25 billion five year senior unsecured revolving credit facility on March 19, 2020. See Note 4, Debt , for additional information. We also suspended all share repurchases. Since the pandemic had a significant impact on our store operations, we concluded this was a triggering event to review for potential impairments of our store assets. As a result of this analysis, we recorded an immaterial asset impairment charge for a small number of stores within Selling, general and administrative (“SG&A”) expenses for the three months ended May 2, 2020. We have goodwill in two reporting units – Best Buy Domestic and Best Buy Health – with carrying values as of May 2, 2020, of $ 444 million and $ 542 million, respectively. We test goodwill for impairment annually in the fiscal fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. Our most recent goodwill impairment analysis, completed during the fourth quarter of fiscal 2020, indicated an excess of fair value over carrying value for both reporting units. As a result of the impact of COVID-19 on our business, we completed a review for potential impairments of our goodwill in the first quarter of fiscal 2021. As a result of this analysis, we concluded that no impairment had occurred. On March 27, 2020, in response to the COVID-19 pandemic, the U.S. Congress enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which among other things, contains provisions for deferral of the employer portion of social security taxes incurred through the end of calendar 2020 and an employee retention credit, a refundable payroll credit for 50% of wages and health benefits paid to employees not providing services due to the COVID-19 pandemic. As a result of the CARES Act, we intend to defer qualified payroll taxes and claim the employee retention credit, which will be treated as a government subsidy to offset related operating expenses. Based on our preliminary analysis of the CARES Act, we reduced our SG&A expenses for the three months ended May 2, 2020, by $ 69 million for employee retention credits. We will continue to assess our treatment of the CARES Act to the extent additional guidance and regulations are issued. The COVID-19 pandemic remains a rapidly evolving situation. The extent of the impact of COVID-19 on our business and financial results will depend on future developments, including the duration and spread of the outbreak within the markets in which we operate and the related impact on consumer confidence and spending, all of which are highly uncertain. Adopted Accounting Pronouncements In the first quarter of fiscal 2021, we prospectively adopted the following Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board, all of which had an immaterial impact on our results of operations, cash flows and financial position. ASU 2016-13, Measurement of Credit Losses on Financial Instruments ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) ASU 2018-15, Intangibles-Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contrac t Total Cash, Cash Equivalents and Restricted Cash The reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the totals shown within the Condensed Consolidated Statements of Cash Flows was as follows ($ in millions): May 2, 2020 February 1, 2020 May 4, 2019 Cash and cash equivalents $ 3,919 $ 2,229 $ 1,561 Restricted cash included in Other current assets 115 126 206 Total cash, cash equivalents and restricted cash $ 4,034 $ 2,355 $ 1,767 Amounts included in restricted cash are pledged as collateral or restricted to use for workers’ compensation and general liability insurance claims. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May 02, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 2. Fair Value Measurements Fair value measurements are reported in one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). Recurring Fair Value Measurements Financial assets and liabilities accounted for at fair value were as follows ($ in millions): Fair Value at Balance Sheet Location (1) Fair Value Hierarchy May 2, 2020 February 1, 2020 May 4, 2019 Assets Money market funds (2) Cash and cash equivalents Level 1 $ 1,153 $ 524 $ 18 Commercial paper (2) Cash and cash equivalents Level 2 - 75 - Time deposits (3) Cash and cash equivalents Level 2 465 185 60 Money market funds (2) Other current assets Level 1 6 16 93 Time deposits (3) Other current assets Level 2 101 101 102 Foreign currency derivative instruments (4) Other current assets Level 2 6 1 - Interest rate swap derivative instruments (4) Other current assets Level 2 11 - - Marketable securities that fund deferred compensation (5) Other assets Level 1 45 48 46 Interest rate swap derivative instruments (4) Other assets Level 2 107 89 28 Liabilities Interest rate swap derivative instruments (4) Long-term liabilities Level 2 - - 6 (1) Balance sheet location is determined by the length to maturity from the current period-end date. (2) Valued at quoted market prices. (3) Valued at face value plus accrued interest, which approximates fair value. (4) Valued using readily observable market inputs. These instruments are custom, over-the-counter contracts with various bank counterparties that are not traded on an active market. (5) Valued using select mutual fund performance that trade with sufficient frequency and volume to obtain pricing information on an ongoing basis. Fair Value of Financial Instruments The fair values of cash, receivables, accounts payable, short-term debt and other payables approximated their carrying values because of the short-term nature of these instruments. With the exception of short-term debt, if these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy; short-term debt would be classified as Level 2. Fair values for other investments held at cost are not readily available, but we estimate that the carrying values for these investments approximate their fair values. Long-term debt is presented at carrying value on our Condensed Consolidated Balance Sheets. If our long-term debt were recorded at fair value, it would be classified as Level 2 in the fair value hierarchy. Long-term debt balances were as follows ($ in millions): May 2, 2020 February 1, 2020 May 4, 2019 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Long-term debt (1) $ 1,315 $ 1,268 $ 1,322 $ 1,239 $ 1,213 $ 1,173 (1) Excludes debt discounts, issuance costs and finance lease obligations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
May 02, 2020 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 3. Goodwill and Intangible Assets See Note 1, Basis of Presentation , for impairment considerations for the three months ended May 2, 2020, due to COVID-19. No impairment charges were recorded during the fiscal periods presented. Goodwill Balances related to goodwill were as follows ($ in millions): May 2, 2020 February 1, 2020 May 4, 2019 Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment Domestic $ 1,053 $ ( 67 ) $ 1,051 $ ( 67 ) $ 982 $ ( 67 ) International 608 ( 608 ) 608 ( 608 ) 608 ( 608 ) Total $ 1,661 $ ( 675 ) $ 1,659 $ ( 675 ) $ 1,590 $ ( 675 ) Indefinite-Lived Intangible Assets During the three months ended May 2, 2020, we made the decision to phase out our Pacific Sales tradename in our U.S. Best Buy stores over the coming years. Consequently, we reclassified the tradename from an indefinite-lived intangible asset to a definite-lived intangible asset and have no indefinite-lived intangible assets remaining as of May 2, 2020. The carrying value of the tradename was $ 18 million as of February 1, 2020, and May 4, 2019, respectively, and was recorded within Other assets on our Condensed Consolidated Balance Sheets. Definite-Lived Intangible Assets We have definite-lived intangible assets which are recorded within Other assets on our Condensed Consolidated Balance Sheets as follows ($ in millions): May 2, 2020 February 1, 2020 May 4, 2019 Weighted-Average Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Useful Life Remaining as of May 2, 2020 (in years) Customer relationships $ 339 $ 83 $ 339 $ 70 $ 258 $ 29 6.9 Tradenames 81 13 63 10 63 5 5.5 Developed technology 56 18 56 15 52 6 3.3 Total $ 476 $ 114 $ 458 $ 95 $ 373 $ 40 6.3 Amortization expense was as follows ($ in millions): Three Months Ended Statement of Earnings Location May 2, 2020 May 4, 2019 Amortization expense SG&A $ 19 $ 17 Amortization expense expected to be recognized in future periods is as follows ($ in millions): Amortization Expense Remainder of fiscal 2021 $ 61 Fiscal 2022 80 Fiscal 2023 79 Fiscal 2024 54 Fiscal 2025 16 Fiscal 2026 16 Thereafter 56 |
Debt
Debt | 3 Months Ended |
May 02, 2020 | |
Debt [Abstract] | |
Debt | 4. Debt Short-Term Debt We have a $ 1.25 billion five year senior unsecured revolving credit facility agreement (the “Facility”) with a syndicate of banks. In light of the uncertainty surrounding the impact of COVID-19 and to maximize liquidity, we executed a seven-day draw on the full amount of the Facility on March 19, 2020, and rolled this into a three-month draw on March 26, 2020. The Facility remained fully drawn as of May 2, 2020, at an interest rate of three-month LIBOR plus a margin rate of 1.015 %. There were no borrowings outstanding as of February 1, 2020, or May 4, 2019. Information regarding our short-term debt for the three months ended May 2, 2020, was as follows ($ in millions): Average Amount Outstanding Maximum Amount Outstanding Weighted Average Interest Rate Short-term debt $ 618 $ 1,250 2.3 % Long-Term Debt Long-term debt consisted of the following ($ in millions): May 2, 2020 February 1, 2020 May 4, 2019 Notes, 5.50 %, due March 15, 2021 $ 650 $ 650 $ 650 Notes, 4.45 %, due October 1, 2028 500 500 500 Interest rate swap valuation adjustments 118 89 23 Subtotal 1,268 1,239 1,173 Debt discounts and issuance costs ( 8 ) ( 6 ) ( 7 ) Finance lease obligations 34 38 41 Total long-term debt 1,294 1,271 1,207 Less current portion 673 14 14 Total long-term debt, less current portion $ 621 $ 1,257 $ 1,193 See Note 2, Fair Value Measurements , for the fair value of long-term debt. |
Revenue
Revenue | 3 Months Ended |
May 02, 2020 | |
Revenue [Abstract] | |
Revenue | 5. Revenue We generate all of our revenue from contracts with customers from the sale of products and services. Contract balances primarily consist of receivables and contract liabilities related to product merchandise not yet delivered to customers, unredeemed gift cards, services not yet completed, and options that provide a material right to customers, such as our customer loyalty programs. Contract balances were as follows ($ in millions): May 2, 2020 February 1, 2020 May 4, 2019 Receivables, net (1) $ 396 $ 567 $ 484 Short-term contract liabilities included in: Unredeemed gift cards 257 281 265 Deferred revenue 531 501 409 Accrued liabilities 45 139 139 Long-term contract liabilities included in: Long-term liabilities 8 9 10 (1) Receivables are recorded net of allowances for doubtful accounts of $ 29 million, $ 14 million and $ 12 million as of May 2, 2020, February 1, 2020, and May 4, 2019, respectively. During the first three months of fiscal 2021 and fiscal 2020, $ 492 million and $ 466 million of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods. See Note 9, Segments , for information on our revenue by reportable segment and product category. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
May 02, 2020 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | 6. Derivative Instruments We manage our economic and transaction exposure to certain risks by using foreign exchange forward contracts to hedge against the effect of Canadian dollar exchange rate fluctuations on a portion of our net investment in our Canadian operations, and interest rate swaps to mitigate the effect of interest rate fluctuations on our $ 650 million principal amount of notes due March 15, 2021, and our $ 500 million principal amount of notes due October 1, 2028. In addition, we use foreign currency forward contracts not designated as hedging instruments to manage the impact of fluctuations in foreign currency exchange rates relative to recognized receivable and payable balances denominated in non-functional currencies. Our derivative instruments designated as net investment hedges and interest rate swaps are recorded on our Condensed Consolidated Balance Sheets at fair value. See Note 2, Fair Value Measurements , for gross fair values of our outstanding derivative instruments and corresponding fair value classifications. Notional amounts of our derivative instruments were as follows ($ in millions): Contract Type May 2, 2020 February 1, 2020 May 4, 2019 Derivatives designated as net investment hedges $ 126 $ 129 $ 15 Derivatives designated as interest rate swaps 1,150 1,150 1,150 No hedge designation (foreign exchange contracts) 21 31 44 Total $ 1,297 $ 1,310 $ 1,209 Effects of our derivatives on our Condensed Consolidated Statements of Earnings were as follows ($ in millions): Gain (Loss) Recognized Three Months Ended Contract Type Statement of Earnings Location May 2, 2020 May 4, 2019 Interest rate swap contracts Interest expense $ 29 $ ( 2 ) Adjustments to carrying value of long-term debt Interest expense ( 29 ) 2 Total $ - $ - |
Earnings per Share
Earnings per Share | 3 Months Ended |
May 02, 2020 | |
Earnings per Share [Abstract] | |
Earnings per Share | 7. Earnings per Share We compute our basic earnings per share based on the weighted-average common shares outstanding and our diluted earnings per share based on the weighted-average common shares outstanding adjusted by the number of additional shares that would have been outstanding had potentially dilutive common shares been issued. Reconciliations of the numerators and denominators of basic and diluted earnings per share were as follows ($ and shares in millions, except per share amounts): Three Months Ended May 2, 2020 May 4, 2019 Numerator Net earnings $ 159 $ 265 Denominator Weighted-average common shares outstanding 258.3 267.6 Dilutive effect of stock compensation plan awards 2.1 3.9 Weighted-average common shares outstanding, assuming dilution 260.4 271.5 Potential shares which were anti-dilutive and excluded from weighted-average share computations 0.6 0.8 Basic earnings per share $ 0.61 $ 0.99 Diluted earnings per share $ 0.61 $ 0.98 |
Repurchase of Common Stock
Repurchase of Common Stock | 3 Months Ended |
May 02, 2020 | |
Repurchase of Common Stock [Abstract] | |
Shareholders' Equity | 8. Repurchase of Common Stock On February 23, 2019, our Board of Directors ("Board") authorized a $ 3.0 billion share repurchase program. There is no expiration date governing the period over which we can repurchase shares under the February 2019 authorization. Information regarding the shares we repurchased was as follows ($ and shares in millions, except per share amounts): Three Months Ended May 2, 2020 May 4, 2019 Total cost of shares repurchased $ 56 $ 106 Average price per share $ 86.30 $ 70.77 Number of shares repurchased 0.6 1.5 As of May 2, 2020, $ 1.9 billion of the $ 3.0 billion share repurchase authorization was available. On March 21, 2020, we announced the suspension of all share repurchases given the uncertainty surrounding the impact of COVID-19. |
Segments
Segments | 3 Months Ended |
May 02, 2020 | |
Segments [Abstract] | |
Segment and Geographic Information | 9. Segments Segment and product category revenue information was as follows ($ in millions): Three Months Ended May 2, 2020 May 4, 2019 Revenue by reportable segment Domestic $ 7,915 $ 8,481 International 647 661 Total revenue $ 8,562 $ 9,142 Revenue by product category Domestic Computing and Mobile Phones $ 3,805 $ 3,851 Consumer Electronics 2,219 2,662 Appliances 935 961 Entertainment 510 473 Services 421 497 Other 25 37 Total Domestic revenue $ 7,915 $ 8,481 International Computing and Mobile Phones $ 309 $ 305 Consumer Electronics 177 203 Appliances 58 59 Entertainment 57 36 Services 32 43 Other 14 15 Total International revenue $ 647 $ 661 Segment operating income (loss) was as follows ($ in millions): Three Months Ended May 2, 2020 May 4, 2019 Domestic $ 241 $ 332 International ( 12 ) 2 Total operating income 229 334 Other income (expense): Investment income and other 6 14 Interest expense ( 17 ) ( 18 ) Earnings before income tax expense $ 218 $ 330 Assets by segment were as follows ($ in millions): May 2, 2020 February 1, 2020 May 4, 2019 Domestic $ 14,320 $ 14,247 $ 13,332 International 1,285 1,344 1,218 Total assets $ 15,605 $ 15,591 $ 14,550 |
Contingencies
Contingencies | 3 Months Ended |
May 02, 2020 | |
Contingencies [Abstract] | |
Contingencies | 10. Contingencies We are involved in a number of legal proceedings. Where appropriate, we have made accruals with respect to these matters, which are reflected on our Condensed Consolidated Financial Statements. However, there are cases where liability is not probable or the amount cannot be reasonably estimated and, therefore, accruals have not been made. We provide disclosure of matters where we believe it is reasonably possible the impact may be material to our Condensed Consolidated Financial Statements. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
May 02, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us” and “our” in these Notes to Condensed Consolidated Financial Statements refers to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the United States (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements. Historically, we have generated a large proportion of our revenue and earnings in the fiscal fourth quarter, which includes the majority of the holiday shopping season in the U.S., Canada and Mexico. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The interim financial statements and the related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020. The first three months of fiscal 2021 and fiscal 2020 included 13 weeks. In order to align our fiscal reporting periods and comply with statutory filing requirements, we consolidate the financial results of our Mexico operations on a one-month lag. Our policy is to accelerate recording the effect of events occurring in the lag period that significantly affect our condensed consolidated financial statements. No such events were identified for the reported periods. In preparing the accompanying condensed consolidated financial statements, we evaluated the period from May 2, 2020, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for the reported periods. |
COVID-19 | COVID-19 In March 2020, the World Health Organization declared the outbreak of novel coronavirus disease ("COVID-19") as a pandemic. Except where otherwise directed by state and local authorities, on March 22, 2020, we made the decision for the health and safety of our customers and employees to move our stores to a contactless, curbside-only operating model. We also suspended in-home delivery, repair and consultation services on March 22, 2020, and resumed these offerings on April 27, 2020, after implementing new safety guidelines. In light of the uncertainty surrounding the impact of COVID-19 and to maximize liquidity, we executed a short-term draw on the full amount of our $ 1.25 billion five year senior unsecured revolving credit facility on March 19, 2020. See Note 4, Debt , for additional information. We also suspended all share repurchases. Since the pandemic had a significant impact on our store operations, we concluded this was a triggering event to review for potential impairments of our store assets. As a result of this analysis, we recorded an immaterial asset impairment charge for a small number of stores within Selling, general and administrative (“SG&A”) expenses for the three months ended May 2, 2020. We have goodwill in two reporting units – Best Buy Domestic and Best Buy Health – with carrying values as of May 2, 2020, of $ 444 million and $ 542 million, respectively. We test goodwill for impairment annually in the fiscal fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. Our most recent goodwill impairment analysis, completed during the fourth quarter of fiscal 2020, indicated an excess of fair value over carrying value for both reporting units. As a result of the impact of COVID-19 on our business, we completed a review for potential impairments of our goodwill in the first quarter of fiscal 2021. As a result of this analysis, we concluded that no impairment had occurred. On March 27, 2020, in response to the COVID-19 pandemic, the U.S. Congress enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which among other things, contains provisions for deferral of the employer portion of social security taxes incurred through the end of calendar 2020 and an employee retention credit, a refundable payroll credit for 50% of wages and health benefits paid to employees not providing services due to the COVID-19 pandemic. As a result of the CARES Act, we intend to defer qualified payroll taxes and claim the employee retention credit, which will be treated as a government subsidy to offset related operating expenses. Based on our preliminary analysis of the CARES Act, we reduced our SG&A expenses for the three months ended May 2, 2020, by $ 69 million for employee retention credits. We will continue to assess our treatment of the CARES Act to the extent additional guidance and regulations are issued. The COVID-19 pandemic remains a rapidly evolving situation. The extent of the impact of COVID-19 on our business and financial results will depend on future developments, including the duration and spread of the outbreak within the markets in which we operate and the related impact on consumer confidence and spending, all of which are highly uncertain. |
Adopted Accounting Pronouncements | Adopted Accounting Pronouncements In the first quarter of fiscal 2021, we prospectively adopted the following Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board, all of which had an immaterial impact on our results of operations, cash flows and financial position. ASU 2016-13, Measurement of Credit Losses on Financial Instruments ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) ASU 2018-15, Intangibles-Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contrac t |
Total Cash, Cash Equivalents and Restricted Cash | Total Cash, Cash Equivalents and Restricted Cash The reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the totals shown within the Condensed Consolidated Statements of Cash Flows was as follows ($ in millions): May 2, 2020 February 1, 2020 May 4, 2019 Cash and cash equivalents $ 3,919 $ 2,229 $ 1,561 Restricted cash included in Other current assets 115 126 206 Total cash, cash equivalents and restricted cash $ 4,034 $ 2,355 $ 1,767 Amounts included in restricted cash are pledged as collateral or restricted to use for workers’ compensation and general liability insurance claims. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
May 02, 2020 | |
Basis of Presentation [Abstract] | |
Total Cash, Cash Equivalents and Restricted Cash | May 2, 2020 February 1, 2020 May 4, 2019 Cash and cash equivalents $ 3,919 $ 2,229 $ 1,561 Restricted cash included in Other current assets 115 126 206 Total cash, cash equivalents and restricted cash $ 4,034 $ 2,355 $ 1,767 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 02, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | Fair Value at Balance Sheet Location (1) Fair Value Hierarchy May 2, 2020 February 1, 2020 May 4, 2019 Assets Money market funds (2) Cash and cash equivalents Level 1 $ 1,153 $ 524 $ 18 Commercial paper (2) Cash and cash equivalents Level 2 - 75 - Time deposits (3) Cash and cash equivalents Level 2 465 185 60 Money market funds (2) Other current assets Level 1 6 16 93 Time deposits (3) Other current assets Level 2 101 101 102 Foreign currency derivative instruments (4) Other current assets Level 2 6 1 - Interest rate swap derivative instruments (4) Other current assets Level 2 11 - - Marketable securities that fund deferred compensation (5) Other assets Level 1 45 48 46 Interest rate swap derivative instruments (4) Other assets Level 2 107 89 28 Liabilities Interest rate swap derivative instruments (4) Long-term liabilities Level 2 - - 6 (1) Balance sheet location is determined by the length to maturity from the current period-end date. (2) Valued at quoted market prices. (3) Valued at face value plus accrued interest, which approximates fair value. (4) Valued using readily observable market inputs. These instruments are custom, over-the-counter contracts with various bank counterparties that are not traded on an active market. (5) Valued using select mutual fund performance that trade with sufficient frequency and volume to obtain pricing information on an ongoing basis. |
Fair Value of Financial Instruments | May 2, 2020 February 1, 2020 May 4, 2019 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Long-term debt (1) $ 1,315 $ 1,268 $ 1,322 $ 1,239 $ 1,213 $ 1,173 (1) Excludes debt discounts, issuance costs and finance lease obligations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
May 02, 2020 | |
Goodwill and Intangible Assets [Abstract] | |
Gross Carrying Amount of Goodwill and Cumulative Goodwill Impairment | May 2, 2020 February 1, 2020 May 4, 2019 Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment Domestic $ 1,053 $ ( 67 ) $ 1,051 $ ( 67 ) $ 982 $ ( 67 ) International 608 ( 608 ) 608 ( 608 ) 608 ( 608 ) Total $ 1,661 $ ( 675 ) $ 1,659 $ ( 675 ) $ 1,590 $ ( 675 ) |
Definite-Lived Intangible Assets | May 2, 2020 February 1, 2020 May 4, 2019 Weighted-Average Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Useful Life Remaining as of May 2, 2020 (in years) Customer relationships $ 339 $ 83 $ 339 $ 70 $ 258 $ 29 6.9 Tradenames 81 13 63 10 63 5 5.5 Developed technology 56 18 56 15 52 6 3.3 Total $ 476 $ 114 $ 458 $ 95 $ 373 $ 40 6.3 |
Amortization Expense | Three Months Ended Statement of Earnings Location May 2, 2020 May 4, 2019 Amortization expense SG&A $ 19 $ 17 |
Amortization Expense Expected to be Recognized | Amortization Expense Remainder of fiscal 2021 $ 61 Fiscal 2022 80 Fiscal 2023 79 Fiscal 2024 54 Fiscal 2025 16 Fiscal 2026 16 Thereafter 56 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
May 02, 2020 | |
Debt [Abstract] | |
Schedule of Short-term Debt | Average Amount Outstanding Maximum Amount Outstanding Weighted Average Interest Rate Short-term debt $ 618 $ 1,250 2.3 % |
Schedule of Long-term Debt | May 2, 2020 February 1, 2020 May 4, 2019 Notes, 5.50 %, due March 15, 2021 $ 650 $ 650 $ 650 Notes, 4.45 %, due October 1, 2028 500 500 500 Interest rate swap valuation adjustments 118 89 23 Subtotal 1,268 1,239 1,173 Debt discounts and issuance costs ( 8 ) ( 6 ) ( 7 ) Finance lease obligations 34 38 41 Total long-term debt 1,294 1,271 1,207 Less current portion 673 14 14 Total long-term debt, less current portion $ 621 $ 1,257 $ 1,193 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
May 02, 2020 | |
Revenue [Abstract] | |
Contract Balances and Changes in Contract Balances | May 2, 2020 February 1, 2020 May 4, 2019 Receivables, net (1) $ 396 $ 567 $ 484 Short-term contract liabilities included in: Unredeemed gift cards 257 281 265 Deferred revenue 531 501 409 Accrued liabilities 45 139 139 Long-term contract liabilities included in: Long-term liabilities 8 9 10 (1) Receivables are recorded net of allowances for doubtful accounts of $ 29 million, $ 14 million and $ 12 million as of May 2, 2020, February 1, 2020, and May 4, 2019, respectively. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
May 02, 2020 | |
Derivative Instruments [Abstract] | |
Notional Amount of Derivative Instruments | Contract Type May 2, 2020 February 1, 2020 May 4, 2019 Derivatives designated as net investment hedges $ 126 $ 129 $ 15 Derivatives designated as interest rate swaps 1,150 1,150 1,150 No hedge designation (foreign exchange contracts) 21 31 44 Total $ 1,297 $ 1,310 $ 1,209 |
Effects of Interest Rate Derivatives and Adjustments to LTD on Earnings | Gain (Loss) Recognized Three Months Ended Contract Type Statement of Earnings Location May 2, 2020 May 4, 2019 Interest rate swap contracts Interest expense $ 29 $ ( 2 ) Adjustments to carrying value of long-term debt Interest expense ( 29 ) 2 Total $ - $ - |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
May 02, 2020 | |
Earnings per Share [Abstract] | |
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | Three Months Ended May 2, 2020 May 4, 2019 Numerator Net earnings $ 159 $ 265 Denominator Weighted-average common shares outstanding 258.3 267.6 Dilutive effect of stock compensation plan awards 2.1 3.9 Weighted-average common shares outstanding, assuming dilution 260.4 271.5 Potential shares which were anti-dilutive and excluded from weighted-average share computations 0.6 0.8 Basic earnings per share $ 0.61 $ 0.99 Diluted earnings per share $ 0.61 $ 0.98 |
Repurchase of Common Stock (Tab
Repurchase of Common Stock (Tables) | 3 Months Ended |
May 02, 2020 | |
Repurchase of Common Stock [Abstract] | |
Schedule of Share Repurchases | Three Months Ended May 2, 2020 May 4, 2019 Total cost of shares repurchased $ 56 $ 106 Average price per share $ 86.30 $ 70.77 Number of shares repurchased 0.6 1.5 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
May 02, 2020 | |
Segments [Abstract] | |
Revenue by Reportable Segment and Product Category | Three Months Ended May 2, 2020 May 4, 2019 Revenue by reportable segment Domestic $ 7,915 $ 8,481 International 647 661 Total revenue $ 8,562 $ 9,142 Revenue by product category Domestic Computing and Mobile Phones $ 3,805 $ 3,851 Consumer Electronics 2,219 2,662 Appliances 935 961 Entertainment 510 473 Services 421 497 Other 25 37 Total Domestic revenue $ 7,915 $ 8,481 International Computing and Mobile Phones $ 309 $ 305 Consumer Electronics 177 203 Appliances 58 59 Entertainment 57 36 Services 32 43 Other 14 15 Total International revenue $ 647 $ 661 |
Operating Income by Reportable Segment and Reconciliation to Earnings Before Income Tax Expense | Three Months Ended May 2, 2020 May 4, 2019 Domestic $ 241 $ 332 International ( 12 ) 2 Total operating income 229 334 Other income (expense): Investment income and other 6 14 Interest expense ( 17 ) ( 18 ) Earnings before income tax expense $ 218 $ 330 |
Assets by Reportable Segment | May 2, 2020 February 1, 2020 May 4, 2019 Domestic $ 14,320 $ 14,247 $ 13,332 International 1,285 1,344 1,218 Total assets $ 15,605 $ 15,591 $ 14,550 |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) | 3 Months Ended | ||
May 02, 2020USD ($)segment | Feb. 01, 2020USD ($) | May 04, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of Reportable Segments | segment | 2 | ||
Goodwill | $ 986,000,000 | $ 984,000,000 | $ 915,000,000 |
Employee retention credits | 69,000,000 | ||
Goodwill and intangible assets impairment charges | 0 | $ 0 | $ 0 |
Best Buy Domestic [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Goodwill | 444,000,000 | ||
Best Buy Health [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Goodwill | 542,000,000 | ||
Revolving Credit Facility [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 1,250,000,000 | ||
Debt instrument, term | 5 years |
Basis of Presentation (Total Ca
Basis of Presentation (Total Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 | Feb. 02, 2019 |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Cash and cash equivalents | $ 3,919 | $ 2,229 | $ 1,561 | |
Restricted cash included in Other current assets | 115 | 126 | 206 | |
Total cash, cash equivalents and restricted cash | $ 4,034 | $ 2,355 | $ 1,767 | $ 2,184 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Level 1 [Member] | Money market funds [Member] | |||
Assets | |||
Cash and cash equivalents | $ 1,153 | $ 524 | $ 18 |
Other current assets | 6 | 16 | 93 |
Level 1 [Member] | Marketable securities that fund deferred compensation [Member] | |||
Assets | |||
Other assets | 45 | 48 | 46 |
Level 2 [Member] | Time deposits [Member] | |||
Assets | |||
Cash and cash equivalents | 465 | 185 | 60 |
Other current assets | 101 | 101 | 102 |
Level 2 [Member] | Commercial paper [Member] | |||
Assets | |||
Cash and cash equivalents | 75 | ||
Level 2 [Member] | Foreign currency derivative instruments [Member] | |||
Assets | |||
Other current assets | 6 | 1 | |
Level 2 [Member] | Interest Rate Swap Derivative Instruments [Member] | |||
Assets | |||
Other current assets | 11 | ||
Other assets | $ 107 | $ 89 | 28 |
Liabilities | |||
Long-term liabilities | $ 6 |
Fair Value Measurements (Fair_2
Fair Value Measurements (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Carrying value | $ 1,268 | $ 1,239 | $ 1,173 |
Long-term debt [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Carrying value | 1,268 | 1,239 | 1,173 |
Level 2 [Member] | Long-term debt [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair Value | $ 1,315 | $ 1,322 | $ 1,213 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) | 3 Months Ended | ||
May 02, 2020 | Feb. 01, 2020 | May 04, 2019 | |
Intangible Assets [Line Items] | |||
Goodwill and intangible assets impairment charges | $ 0 | $ 0 | $ 0 |
Amortization expense | 19,000,000 | 17,000,000 | |
Tradename [Member] | |||
Intangible Assets [Line Items] | |||
Indefinite-lived intangible | $ 0 | ||
Definite-lived intangible assets | $ 18,000,000 | $ 18,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Gross Carrying Amount of Goodwill and Cumulative Goodwill Impairment) (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Goodwill [Line Items] | |||
Gross Carrying Amount | $ 1,661 | $ 1,659 | $ 1,590 |
Cumulative Impairment | (675) | (675) | (675) |
Domestic [Member] | |||
Goodwill [Line Items] | |||
Gross Carrying Amount | 1,053 | 1,051 | 982 |
Cumulative Impairment | (67) | (67) | (67) |
International [Member] | |||
Goodwill [Line Items] | |||
Gross Carrying Amount | 608 | 608 | 608 |
Cumulative Impairment | $ (608) | $ (608) | $ (608) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Definite-Lived Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
May 02, 2020 | Feb. 01, 2020 | May 04, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 476 | $ 458 | $ 373 |
Accumulated Amortization | $ 114 | 95 | 40 |
Weighted-Average Useful Life Remaining | 6 years 3 months 18 days | ||
Customer Relationships [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 339 | 339 | 258 |
Accumulated Amortization | $ 83 | 70 | 29 |
Weighted-Average Useful Life Remaining | 6 years 10 months 24 days | ||
Tradename [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 81 | 63 | 63 |
Accumulated Amortization | $ 13 | 10 | 5 |
Weighted-Average Useful Life Remaining | 5 years 6 months | ||
Developed Technology [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 56 | 56 | 52 |
Accumulated Amortization | $ 18 | $ 15 | $ 6 |
Weighted-Average Useful Life Remaining | 3 years 3 months 18 days |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Goodwill and Intangible Assets [Abstract] | ||
Amortization expense | $ 19 | $ 17 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets (Amortization Expense Expected to be Recognized) (Details) $ in Millions | May 02, 2020USD ($) |
Goodwill and Intangible Assets [Abstract] | |
Remainder of fiscal 2021 | $ 61 |
Fiscal 2022 | 80 |
Fiscal 2023 | 79 |
Fiscal 2024 | 54 |
Fiscal 2025 | 16 |
Fiscal 2026 | 16 |
Thereafter | $ 56 |
Debt (Narrative) (Short-Term De
Debt (Narrative) (Short-Term Debt) (Details) - USD ($) | 3 Months Ended | ||
May 02, 2020 | Feb. 01, 2020 | May 04, 2019 | |
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 1,250,000,000 | ||
Debt instrument, term | 5 years | ||
Outstanding borrowings | $ 0 | $ 0 | |
London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Variable interest rate | 1.015% |
Debt (Schedule of Short-term De
Debt (Schedule of Short-term Debt) (Details) $ in Millions | 3 Months Ended |
May 02, 2020USD ($) | |
Debt [Abstract] | |
Average Outstanding Amount | $ 618 |
Maximum Amount Outstanding | $ 1,250 |
Weighted Average Interest Rate | 2.30% |
Debt (Schedule of Long-Term Deb
Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Debt Instrument [Line Items] | |||
Total | $ 1,268 | $ 1,239 | $ 1,173 |
Debt discounts and issuance costs | (8) | (6) | (7) |
Finance lease obligations | 34 | 38 | 41 |
Total long-term debt | 1,294 | 1,271 | 1,207 |
Less current portion | 673 | 14 | 14 |
Total long-term debt, less current portion | 621 | 1,257 | 1,193 |
Interest Rate Swap Derivative Instruments [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate swap valuation adjustments | 118 | 89 | 23 |
Notes due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 650 | 650 | 650 |
Interest rate | 5.50% | ||
Notes due 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 500 | $ 500 | $ 500 |
Interest rate | 4.45% |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Revenue [Abstract] | ||
Revenue recognized | $ 492 | $ 466 |
Revenue (Contract Balances and
Revenue (Contract Balances and Changes in Contract Balances) (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Revenue [Abstract] | |||
Receivables, net | $ 396 | $ 567 | $ 484 |
Short-term contract liabilities included in: | |||
Unredeemed gift cards | 257 | 281 | 265 |
Deferred revenue | 531 | 501 | 409 |
Accrued liabilities | 45 | 139 | 139 |
Long-term contract liabilities included in: | |||
Long-term liabilities | 8 | 9 | 10 |
Receivables, allowance for doubtful accounts | $ 29 | $ 14 | $ 12 |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) | May 02, 2020USD ($) |
Notes due 2021 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Face Amount | $ 650,000,000 |
Notes due 2028 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Face Amount | $ 500,000,000 |
Derivative Instruments (Notiona
Derivative Instruments (Notional Amount of Derivative Instruments) (Details) - Not Designated As Hedging Instrument [Member] - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 1,297 | $ 1,310 | $ 1,209 |
Derivatives Designated As Net Investment Hedges [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | 126 | 129 | 15 |
Interest Rate Swap Derivative Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | 1,150 | 1,150 | 1,150 |
Foreign Exchange Forward Contracts [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 21 | $ 31 | $ 44 |
Derivative Instruments (Effects
Derivative Instruments (Effects of Interest Rate Derivatives and Adjustments to LTD on Earnings) (Details) - Designated As Hedging Instrument [Member] - Interest Expense [Member] - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Derivatives, Fair Value [Line Items] | ||
Gain (Loss) Recognized | ||
Interest Rate Swap Derivative Instruments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gain (Loss) Recognized | 29 | (2) |
Carrying Value Of Long Term Debt [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gain (Loss) Recognized | $ (29) | $ 2 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Earnings per Share [Abstract] | ||
Net earnings | $ 159 | $ 265 |
Weighted-average common shares outstanding (in shares) | 258.3 | 267.6 |
Dilutive effect of stock compensation plan awards | 2.1 | 3.9 |
Weighted-average common shares outstanding, assuming dilution | 260.4 | 271.5 |
Potential shares which were anti-dilutive and excluded from weighted-average share computations | 0.6 | 0.8 |
Basic earnings per share | $ 0.61 | $ 0.99 |
Diluted earnings per share | $ 0.61 | $ 0.98 |
Repurchase of Common Stock (Nar
Repurchase of Common Stock (Narrative) (Details) - February 2019 Share Repurchase Program [Member] - USD ($) $ in Billions | May 02, 2020 | Feb. 23, 2019 |
Stock Repurchases [Line Items] | ||
Stock Repurchase Program, Authorized Amount | $ 3 | $ 3 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 1.9 |
Repurchase of Common Stock (Sch
Repurchase of Common Stock (Schedule of share repurchases) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Repurchase of Common Stock [Abstract] | ||
Total cost of shares repurchased | $ 56 | $ 106 |
Average price per share | $ 86.30 | $ 70.77 |
Number of shares repurchased | 0.6 | 1.5 |
Segments (Revenue by Reportable
Segments (Revenue by Reportable Segment and Product Category) (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 8,562 | $ 9,142 |
Domestic Segment [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 7,915 | 8,481 |
Domestic Segment [Member] | Computing and Mobile Phones [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 3,805 | 3,851 |
Domestic Segment [Member] | Consumer Electronics [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 2,219 | 2,662 |
Domestic Segment [Member] | Appliances [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 935 | 961 |
Domestic Segment [Member] | Entertainment [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 510 | 473 |
Domestic Segment [Member] | Services [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 421 | 497 |
Domestic Segment [Member] | Other [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 25 | 37 |
International Segment [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 647 | 661 |
International Segment [Member] | Computing and Mobile Phones [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 309 | 305 |
International Segment [Member] | Consumer Electronics [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 177 | 203 |
International Segment [Member] | Appliances [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 58 | 59 |
International Segment [Member] | Entertainment [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 57 | 36 |
International Segment [Member] | Services [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 32 | 43 |
International Segment [Member] | Other [Member] | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 14 | $ 15 |
Segments (Operating Income by R
Segments (Operating Income by Reportable Segment and Reconciliation to Earnings Before Income Tax Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 02, 2020 | May 04, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating income | $ 229 | $ 334 |
Investment income and other | 6 | 14 |
Interest expense | (17) | (18) |
Earnings before income tax expense | 218 | 330 |
Domestic Segment [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating income | 241 | 332 |
International Segment [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating income | $ (12) | $ 2 |
Segments (Assets by Reportable
Segments (Assets by Reportable Segment) (Details) - USD ($) $ in Millions | May 02, 2020 | Feb. 01, 2020 | May 04, 2019 |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 15,605 | $ 15,591 | $ 14,550 |
Domestic Segment [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 14,320 | 14,247 | 13,332 |
International Segment [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 1,285 | $ 1,344 | $ 1,218 |