Shareholders' Equity (Tables)
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12 Months Ended |
Mar. 03, 2012
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Shareholders' Equity Disclosure [Abstract] |
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Stock-based compensation expense |
Stock-based compensation expense was as follows in fiscal 2012, 2011 and 2010: | | | | | | | | | | | | | | 2012 |
| | 2011 |
| | 2010 |
| Stock options | $ | 76 |
| | $ | 90 |
| | $ | 85 |
| Share awards | | | | | | Market-based | — |
| | 4 |
| | 8 |
| Performance-based | — |
| | (1 | ) | | 1 |
| Time-based | 33 |
| | 16 |
| | 10 |
| Employee stock purchase plans | 11 |
| | 12 |
| | 14 |
| Total | $ | 120 |
| | $ | 121 |
| | $ | 118 |
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Stock option activity |
Stock option activity was as follows in fiscal 2012: | | | | | | | | | | | | | | | | Stock Options |
| | Weighted- Average Exercise Price per Share |
| | Weighted-Average Remaining Contractual Term (in years) |
| | Aggregate Intrinsic Value |
| Outstanding at February 26, 2011 | 35,587,000 |
| | $ | 38.97 |
| | |
| | |
| Granted | 3,973,000 |
| | 27.50 |
| | |
| | |
| Exercised | (1,126,000 | ) | | 24.61 |
| | |
| | |
| Forfeited/Canceled | (2,633,000 | ) | | 39.87 |
| | |
| | |
| Outstanding at March 3, 2012 | 35,801,000 |
| | $ | 38.08 |
| | 5.9 |
| | $ | 4 |
| Vested or expected to vest at March 3, 2012 | 34,099,000 |
| | $ | 38.36 |
| | 5.8 |
| | $ | 4 |
| Exercisable at March 3, 2012 | 24,403,000 |
| | $ | 40.21 |
| | 4.8 |
| | $ | 4 |
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Assumption used to estimate the fair value of stock option on the date of grant using a lattice model |
In fiscal 2012, 2011 and 2010, we estimated the fair value of each stock option on the date of grant using a lattice model with the following assumptions: | | | | | | | | | | Valuation Assumptions(1) | 2012 |
| | 2011 |
| | 2010 |
| Risk-free interest rate(2) | 0.1% – 3.6% |
| | 0.2% – 3.9% |
| | 0.2% – 3.8% |
| Expected dividend yield | 2.3 | % | | 1.5 | % | | 1.6 | % | Expected stock price volatility(3) | 37 | % | | 36 | % | | 42 | % | Expected life of stock options (in years)(4) | 6.2 |
| | 6.1 |
| | 6.1 |
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| | (1) | Forfeitures are estimated using historical experience and projected employee turnover. |
| | (2) | Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of our stock options. |
| | (3) | We use an outside valuation advisor to assist us in projecting expected stock price volatility. We consider both the historical volatility of our stock price as well as implied volatilities from exchange-traded options on our stock. |
| | (4) | We estimate the expected life of stock options based upon historical experience. |
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Summary of the status of nonvested market-based share awards |
A summary of the status of our nonvested market-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows: | | | | | | | | Market-Based Share Awards | Shares |
| | Weighted-Average Fair Value per Share |
| Outstanding at February 26, 2011 | 193,000 |
| | $ | 52.19 |
| Granted | — |
| | — |
| Vested | — |
| | — |
| Forfeited/Canceled | (193,000 | ) | | 52.19 |
| Outstanding at March 3, 2012 | — |
| | $ | — |
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Summary of the status of nonvested performance-based share awards |
A summary of the status of our nonvested performance-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows: | | | | | | | | Performance-Based Share Awards | Shares |
| | Weighted-Average Fair Value per Share |
| Outstanding at February 26, 2011 | 2,179,000 |
| | $ | 41.64 |
| Granted | — |
| | — |
| Vested | (2,000 | ) | | 44.94 |
| Forfeited/Canceled | (1,265,000 | ) | | 41.96 |
| Outstanding at March 3, 2012 | 912,000 |
| | $ | 41.20 |
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Summary of the status of nonvested time-based share awards |
A summary of the status of our nonvested time-based share awards at March 3, 2012, and changes during fiscal 2012, is as follows: | | | | | | | | Time-Based Share Awards | Shares |
| | Weighted-Average Fair Value per Share |
| Outstanding at February 26, 2011 | 2,171,000 |
| | $ | 36.60 |
| Granted | 2,647,000 |
| | 25.65 |
| Vested | (665,000 | ) | | 35.01 |
| Forfeited/Canceled | (229,000 | ) | | 33.55 |
| Outstanding at March 3, 2012 | 3,924,000 |
| | $ | 29.63 |
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Assumptions used to estimate the fair value of stock-based compensation expense associated with employee stock purchase plans on the purchase date using the Black-Scholes option-pricing valuation model |
In fiscal 2012, 2011 and 2010, we estimated the fair value of stock-based compensation expense associated with our employee stock purchase plans on the purchase date using the Black-Scholes option-pricing valuation model, with the following assumptions: | | | | | | | | | | Valuation Assumptions | 2012 |
| | 2011 |
| | 2010 |
| Risk-free interest rate(1) | 0.1 | % | | 0.2 | % | | 0.3 | % | Expected dividend yield | 2.4 | % | | 1.4 | % | | 1.5 | % | Expected stock price volatility(2) | 38 | % | | 29 | % | | 53 | % | Expected life of employee stock purchase plan options (in months)(3) | 6 |
| | 6 |
| | 6 |
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| | (1) | Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of employee stock purchase plan shares. |
| | (2) | We consider both the historical volatility of our stock price as well as implied volatilities from exchange-traded options on our stock. |
| | (3) | Based on semi-annual purchase period. |
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Summary of stock options outstanding |
At March 3, 2012, options to purchase 35.8 million shares of common stock were outstanding as follows (shares in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Exercisable | | Unexercisable | | Total | | Shares |
| | % |
| | Weighted- Average Price per Share |
| | Shares |
| | % |
| | Weighted- Average Price per Share |
| | Shares |
| | % |
| | Weighted- Average Price per Share |
| In-the-money | 3.6 |
| | 15 | % | | $ | 25.28 |
| | 2.8 |
| | 25 | % | | $ | 25.07 |
| | 6.4 |
| | 18 | % | | $ | 25.19 |
| Out-of-the-money | 20.8 |
| | 85 | % | | 42.81 |
| | 8.6 |
| | 75 | % | | 36.30 |
| | 29.4 |
| | 82 | % | | 40.91 |
| Total | 24.4 |
| | 100 | % | | $ | 40.21 |
| | 11.4 |
| | 100 | % | | $ | 27.30 |
| | 35.8 |
| | 100 | % | | $ | 38.08 |
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Reconciliation of the numerators and denominators of basic and diluted earnings per share |
The following table presents a reconciliation of the numerators and denominators of basic and diluted earnings per share in fiscal 2012, 2011 and 2010: | | | | | | | | | | | | | | 2012(1) |
| | 2011 |
| | 2010 |
| Numerator: | | | | | | Net earnings from continuing operations | $ | 330 |
| | $ | 1,554 |
| | $ | 1,495 |
| Net (earnings) from continuing operations attributable to noncontrolling interests | (1,387 | ) | | (127 | ) | | (96 | ) | Net (loss) earnings from continuing operations attributable to Best Buy Co., Inc., basic | (1,057 | ) | | 1,427 |
| | 1,399 |
| Adjustment for assumed dilution: | | | | | | Interest on convertible debentures due in 2022, net of tax | — |
| | 6 |
| | 6 |
| Net (loss) earnings from continuing operations attributable to Best Buy Co., Inc., diluted | $ | (1,057 | ) | | $ | 1,433 |
| | $ | 1,405 |
| Denominator (in millions): | | | | | | Weighted-average common shares outstanding | 366.3 |
| | 406.1 |
| | 416.8 |
| Effect of potentially dilutive securities: | | | | | | Shares from assumed conversion of convertible debentures | — |
| | 8.8 |
| | 8.8 |
| Stock options and other | — |
| | 1.6 |
| | 1.9 |
| Weighted-average common shares outstanding, assuming dilution | 366.3 |
| | 416.5 |
| | 427.5 |
| Net (loss) earnings per share from continuing operations attributable to Best Buy Co., Inc. | | | | | | Basic | $ | (2.89 | ) | | $ | 3.51 |
| | $ | 3.36 |
| Diluted | $ | (2.89 | ) | | $ | 3.44 |
| | $ | 3.29 |
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| | (1) | The calculation of diluted (loss) per share for fiscal 2012 does not include potentially dilutive securities because their inclusion would be anti-dilutive (i.e., reduce the net loss per share). |
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Repurchases of common stock |
The following table presents the amount and cost of shares we repurchased and retired in fiscal 2012, 2011 and 2010 under the June 2011 program and the June 2007 program (shares in millions): | | | | | | | | | | | | | | 2012 |
| | 2011 |
| | 2010 |
| June 2011 Program | | | | | | Total number of shares repurchased | 34.5 |
| | — |
| | — |
| Total cost of shares repurchased | $ | 889 |
| | $ | — |
| | $ | — |
| | | | | | | June 2007 Program | | | | | | Total number of shares repurchased | 20.1 |
| | 32.6 |
| | — |
| Total cost of shares repurchased | $ | 611 |
| | $ | 1,193 |
| | $ | — |
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Components of accumulated other comprehensive income, net of tax |
The components of accumulated other comprehensive income, net of tax, were as follows: | | | | | | | | | | March 3, 2012 |
| | February 26, 2011 |
| Foreign currency translation | $ | 93 |
| | $ | 102 |
| Unrealized (losses) gains on available-for-sale investments | (3 | ) | | 72 |
| Unrealized losses on derivative instruments (cash flow hedges) | — |
| | (1 | ) | Total | $ | 90 |
| | $ | 173 |
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