Shareholders' Equity (Tables)

12 Months Ended

Mar. 03, 2012

Shareholders' Equity Disclosure [Abstract]

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

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

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


(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.

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	—		$	—

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

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

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


(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.

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

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


(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).

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	$	—

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