Restructuring Charges

Charges incurred in the three and nine months ended October 29, 2016, and October 31, 2015, for our restructuring activities were as follows ($ in millions):



	Three Months Ended					Nine Months Ended
	October 29, 2016			October 31, 2015		October 29, 2016			October 31, 2015
Renew Blue Phase 2	$	1		$	—	$	26		$	—
Canadian brand consolidation	(2		)	5		(1		)	189
Renew Blue⁽¹⁾	1			—		4			(2		)
Other restructuring activities⁽²⁾	1			2		1			2
Total restructuring charges	$	1		$	7	$	30		$	189

(1)

Represents activity related to our remaining vacant space liability, primarily in our International segment, for our Renew Blue restructuring program, which began in the fourth quarter of fiscal 2013. We may continue to incur immaterial adjustments to the liability for changes in sublease assumptions or potential lease buyouts. In addition, lease payments for vacated stores will continue until leases expire or are terminated. The remaining vacant space liability was $10 million at October 29, 2016.

(2)

Represents activity related to our remaining vacant space liability for U.S. large-format store closures in fiscal 2013. We may continue to incur immaterial adjustments to the liability for changes in sublease assumptions or potential lease buyouts. In addition, lease payments for vacated stores will continue until leases expire or are terminated. The remaining vacant space liability was $12 million at October 29, 2016.

Renew Blue Phase 2

In the first quarter of fiscal 2017, we took several strategic actions to eliminate and simplify certain components of our operations and restructure certain field and corporate teams as part of our Renew Blue Phase 2 plan. We recorded an expense of $1 million and $26 million related to Phase 2 of the plan during the three and nine months ended October 29, 2016, respectively. The expense consisted primarily of employee termination benefits and property and equipment impairments. All restructuring charges related to this plan are from continuing operations and are presented in restructuring charges in our Condensed Consolidated Statements of Earnings.

The composition of the restructuring charges we incurred during the three and nine months ended October 29, 2016, for Renew Blue Phase 2 was as follows ($ in millions):



	Domestic
	October 29, 2016
	Three Months Ended		Nine Months Ended
Property and equipment impairments	$	1	$	8
Termination benefits	—		18
Total Renew Blue Phase 2 restructuring charges	$	1	$	26

The following table summarizes our restructuring accrual activity during the nine months ended October 29, 2016, related to termination benefits as a result of Renew Blue Phase 2 ($ in millions):



	Termination Benefits
Balances at January 30, 2016	$	—
Charges	19
Cash payments	(16		)
Adjustments⁽¹⁾	(2		)
Balances at October 29, 2016	$	1

(1) Adjustments to termination benefits primarily represent changes in retention assumptions.

Canadian Brand Consolidation

In the first quarter of fiscal 2016, we consolidated the Future Shop and Best Buy stores and websites in Canada under the Best Buy brand. This resulted in the permanent closure of 66 Future Shop stores and the conversion of the remaining 65 Future Shop stores to the Best Buy brand. In the three and nine months ended October 29, 2016, we recognized benefits of $2 million and $1 million related to our Canadian brand consolidation, respectively, which was due to changes in our facility closure and other costs assumptions. In the third quarter of fiscal 2016, we incurred $5 million of restructuring charges related to lease exit costs and employee termination benefits. In the first nine months of 2016 we incurred $189 million of restructuring charges, which primarily consisted of lease exit costs, a tradename impairment, property and equipment impairments, employee termination benefits and inventory write-downs.

The inventory write-downs related to our Canadian brand consolidation are presented in restructuring charges – cost of goods sold in our Condensed Consolidated Statements of Earnings, and the remainder of the restructuring charges are presented in restructuring charges in our Condensed Consolidated Statements of Earnings.

The composition of total restructuring charges we incurred for the Canadian brand consolidation in the three and nine months ended October 29, 2016, and October 31, 2015, as well as the cumulative amount incurred through October 29, 2016, was as follows ($ in millions):



	International
	Three Months Ended						Nine Months Ended
	October 29, 2016			October 31, 2015			October 29, 2016			October 31, 2015		Cumulative Amount
Inventory write-downs	$	—		$	(1	)	$	—		$	4	$	3
Property and equipment impairments	—			—			—			30		30
Tradename impairment	—			—			—			40		40
Termination benefits	—			2			—			26		25
Facility closure and other costs	(2		)	4			(1		)	89		101
Total Canadian brand consolidation restructuring charges	$	(2	)	$	5		$	(1	)	$	189	$	199

The following tables summarize our restructuring accrual activity during the nine months ended October 29, 2016, and October 31, 2015, related to termination benefits and facility closure and other costs associated with the Canadian brand consolidation ($ in millions):



	Termination Benefits			Facility Closure and Other Costs			Total
Balances at January 30, 2016	$	2		$	64		$	66
Charges	—			1			1
Cash payments	(2		)	(29		)	(31		)
Adjustments⁽¹⁾	—			(2		)	(2		)
Changes in foreign currency exchange rates	—			3			3
Balances at October 29, 2016	$	—		$	37		$	37



	Termination Benefits			Facility Closure and Other Costs			Total
Balances at January 31, 2015	$	—		$	—		$	—
Charges	28			113			141
Cash payments	(22		)	(28		)	(50		)
Adjustments⁽¹⁾	(2		)	(9		)	(11		)
Changes in foreign currency exchange rates	—			(3		)	(3		)
Balances at October 31, 2015	$	4		$	73		$	77

(1) Adjustments to facility closure and other costs represent changes in sublease assumptions. Adjustments to termination benefits represent changes in retention assumptions.