Restructuring Charges

Charges incurred in the six months ended August 2, 2014, and August 3, 2013, for our restructuring activities were as follows ($ in millions):



	Six Months Ended
	August 2, 2014			August 3, 2013
Continuing operations
Renew Blue	$	14		$	21
Fiscal 2013 U.S. restructuring	(6		)	(8		)
Total continuing operations	8			13
Discontinued operations
Fiscal 2013 Europe restructuring	—			95
Fiscal 2012 restructuring	—			5
Total discontinued operations (Note 2)	—			100
Total restructuring charges	$	8		$	113

Renew Blue

In the fourth quarter of fiscal 2013, we began implementing initiatives intended to reduce costs and improve operating performance. These initiatives included focusing on core business activities, reducing headcount, updating our store operating model and optimizing our real estate portfolio. These cost reduction initiatives represented one of the key Renew Blue priorities for fiscal 2014 and cost reduction continues to be a priority in fiscal 2015. We incurred $14 million and $21 million of restructuring charges related to Renew Blue initiatives during the first six months of fiscal 2015 and 2014, respectively. The charges in the first six months of fiscal 2015 were primarily due to employee termination benefits. The charges in the first six months of fiscal 2014 were primarily comprised of employee termination benefits, facility closure costs, and property and equipment impairments. We expect to continue to implement cost reduction initiatives throughout fiscal 2015, as we further analyze our operations and strategies.

All restructuring charges related to this program are from continuing operations and are presented in restructuring charges in our Consolidated Statements of Earnings. The composition of the restructuring charges we incurred for this program in the six months ended August 2, 2014, and August 3, 2013, as well as the cumulative amount incurred through August 2, 2014, was as follows ($ in millions):



	Domestic						International						Total
	Six Months Ended				Cumulative Amount		Six Months Ended				Cumulative Amount		Six Months Ended				Cumulative Amount
	August 2, 2014		August 3, 2013		Cumulative Amount		August 2, 2014		August 3, 2013		Cumulative Amount		August 2, 2014		August 3, 2013		Cumulative Amount
Continuing operations
Inventory write-downs	$	—	$	—	$	1	$	—	$	—	$	—	$	—	$	—	$	1
Property and equipment impairments	—		2		14		1		1		26		1		3		40
Termination benefits	7		8		159		5		6		42		12		14		201
Investment impairments	—		—		43		—		—		—		—		—		43
Facility closure and other costs	—		—		3		1		4		62		1		4		65
Total	$	7	$	10	$	220	$	7	$	11	$	130	$	14	$	21	$	350

The following tables summarize our restructuring accrual activity during the six months ended August 2, 2014, and August 3, 2013, related to termination benefits and facility closure and other costs associated with this program ($ in millions):



	Termination Benefits			Facility Closure and Other Costs			Total
Balances at February 1, 2014	$	111		$	51		$	162
Charges	28			7			35
Cash payments	(106		)	(9		)	(115		)
Adjustments⁽¹⁾	(16		)	(4		)	(20		)
Changes in foreign currency exchange rates	—			(5		)	(5		)
Balances at August 2, 2014	$	17		$	40		$	57


(1)	Adjustments to termination benefits were due to higher-than-expected employee retention. Adjustments to facility closure and other costs represent changes in sublease assumptions and reductions in our remaining lease obligations.



	Termination Benefits			Facility Closure and Other Costs			Total
Balances at February 2, 2013	$	54		$	54		$	108
Charges	15			9			24
Cash payments	(53		)	(11		)	(64		)
Adjustments	(5		)	8			3
Changes in foreign currency exchange rates	—			(3		)	(3		)
Balances at August 3, 2013	$	11		$	57		$	68

Fiscal 2013 U.S. Restructuring

In the first quarter of fiscal 2013, we initiated a series of actions to restructure operations in our Domestic segment intended to improve operating performance. The actions included closure of 49 large-format Best Buy branded stores in the U.S. and changes to the store and corporate operating models. The costs of implementing the changes were primarily comprised of facility closure costs, employee termination benefits, and property and equipment (primarily store fixtures) impairments. We recognized a reduction to restructuring charges of $6 million and $8 million in the six months ended August 2, 2014, and August 3, 2013, as a result of changes in sublease assumptions and the buyout of a lease for less than the remaining vacant space liability. We have completed activities under this restructuring program and do not expect to incur further material restructuring charges, with the exception of potential additional adjustments to facility closure and other costs. In addition, lease payments for vacated stores will continue until leases expire or are terminated.

The restructuring charges related to this program are from continuing operations and are presented in restructuring charges in our Consolidated Statements of Earnings. The composition of the restructuring charges we incurred for this program in the six months ended August 2, 2014 and August 3, 2013, as well as the cumulative amount incurred through August 2, 2014, was as follows ($ in millions):



	Six Months Ended						Cumulative Amount
	August 2, 2014			August 3, 2013			Cumulative Amount
Continuing operations
Property and equipment impairments	$	—		$	—		$	29
Termination benefits	—			—			77
Facility closure and other costs	(6		)	(8		)	139
Total	$	(6	)	$	(8	)	$	245



	Facility Closure and Other Costs
Balances at February 1, 2014	$	58
Charges	1
Cash payments	(11		)
Adjustments	(6		)
Balances at August 2, 2014	$	42



	Termination Benefits			Facility Closure and Other Costs			Total
Balances at February 2, 2013	$	4		$	113		$	117
Charges	—			3			3
Cash payments	(2		)	(31		)	(33		)
Adjustments⁽¹⁾	(2		)	(13		)	(15		)
Balances at August 3, 2013	$	—		$	72		$	72


(1)	Adjustments to facility closure and other costs represent reductions in our remaining lease obligations.

Fiscal 2013 Europe Restructuring

In the third quarter of fiscal 2013, we initiated a series of actions to restructure our Best Buy Europe operations in our International segment intended to improve operating performance. As described in Note 2, Discontinued Operations, we completed the sale of our 50% ownership interest in Best Buy Europe on June 26, 2013. This program ended as of the date of sale, at which time we wrote off all remaining restructuring liabilities. The cumulative amount of charges we incurred under this program was $131 million, which included $95 million in the first six months of fiscal 2014, primarily related to property and equipment impairments and termination benefits. All restructuring charges related to this program are reported within gain (loss) from discontinued operations in our Consolidated Statements of Earnings.

The following table summarizes our restructuring accrual activity during the six months ended August 3, 2013, related to termination benefits and facility closure and other costs associated with this program ($ in millions):



	Termination Benefits			Facility Closure and Other Costs			Total
Balances at February 2, 2013	$	—		$	5		$	5
Charges	36			2			38
Cash payments	(2		)	(7		)	(9		)
Adjustments⁽¹⁾	(34		)	—			(34		)
Balances at August 3, 2013	$	—		$	—		$	—


(1)	Represents the remaining liability written off as a result of the sale of Best Buy Europe, as described in Note 2, Discontinued Operations.

Fiscal 2012 Restructuring

In the third quarter of fiscal 2012, we implemented a series of actions to restructure operations in our Domestic and International segments. The actions within our Domestic segment included a decision to modify our strategy for certain mobile broadband offerings. In our International segment, we closed our large-format Best Buy branded stores in the U.K. and impaired certain information technology assets supporting the restructured operations. The cumulative amount of charges we incurred under this program was $246 million, comprised of $22 million within our Domestic segment and $224 million within our International segment, primarily related to property and equipment impairments and facility closure and other costs. We incurred $5 million of charges related to this program in the first six months of fiscal 2014, representing a change in sublease assumptions. We did not incur any charges related to this program in the first six months of fiscal 2015 and do not expect to incur further material restructuring charges related to this program, as we have completed these restructuring activities.

The following table summarizes our restructuring accrual activity during the six months ended August 3, 2013, related to facility closure and other costs associated with this program ($ in millions):



	Facility Closure and Other Costs
Balances at February 2, 2013	$	36
Cash payments	(33		)
Adjustments⁽¹⁾	(1		)
Changes in foreign currency exchange rates	(2		)
Balances at August 3, 2013	$	—


(1)	Included within Adjustments is a $5 million charge related to a change in sublease assumptions, offset by a $6 million adjustment to write off the remaining liability as a result of the sale of Best Buy Europe, as described in Note 2, Discontinued Operations.