Best Buy 2011 Annual Report Download - page 93

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$ in millions, except per share amounts or as otherwise noted
Our ARS portfolio consisted of the following, at fair value:
February 26, February 27,
Description Nature of collateral or guarantee 2011 2010
Student loan bonds Student loans guaranteed 95% to 100% by the $108 $261
U.S. government
Municipal revenue bonds 100% insured by AAA/Aaa-rated bond insurers 2 19
at February 26, 2011
Total fair value plus accrued interest(1) $110 $280
(1) The par value and weighted-average interest rates (taxable equivalent) of our ARS were $115 and $285 and 0.8% and 1.1%,
respectively, at February 26, 2011, and February 27, 2010, respectively.
At February 26, 2011, our ARS portfolio was 73% AAA/Aaa-rated, 2% AA/Aa-rated and 25% A/A-rated.
The investment principal associated with failed auctions will not be accessible until successful auctions occur, a buyer is
found outside of the auction process, the issuers establish a different form of financing to replace these securities, or final
payments are due according to the contractual maturities of the debt issuances, which range from five to 32 years. We
intend to hold our ARS until we can recover the full principal amount through one of the means described above, and
have the ability to do so based on our other sources of liquidity.
We evaluated our entire ARS portfolio of $115 (par value) for impairment at February 26, 2011, based primarily on the
methodology described in Note 4, Fair Value Measurements. As a result of this review, we determined that the fair value
of our ARS portfolio at February 26, 2011, was $110. Accordingly, a $5 pre-tax unrealized loss is recognized in
accumulated other comprehensive income. This unrealized loss reflects a temporary impairment on all of our investments
in ARS. The estimated fair value of our ARS portfolio could change significantly based on future market conditions. We will
continue to assess the fair value of our ARS portfolio for substantive changes in relevant market conditions, changes in our
financial condition or other changes that may alter our estimates described above.
We may be required to record an additional unrealized holding loss or an impairment charge to earnings if we determine
that our ARS portfolio has incurred a further decline in fair value that is temporary or other-than-temporary, respectively.
Factors that we consider when assessing our ARS portfolio for other-than-temporary impairment include the duration and
severity of the impairment, the reason for the decline in value, the potential recovery period and the nature of the
collateral or guarantees in place, as well as our intent and ability to hold an investment.
We had $(3) unrealized loss, net of tax, recorded in accumulated other comprehensive income at February 26, 2011, and
February 27, 2010, related to our investments in debt securities.
Marketable Equity Securities
We invest in marketable equity securities and classify them as available-for-sale. Investments in marketable equity securities
are classified as non-current assets within equity and other investments in our consolidated balance sheets, and are
reported at fair value based on quoted market prices.
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