Best Buy 2013 Annual Report Download - page 89

89
intangible asset impairments and inventory write-downs. The remaining $172 million of the charges impacted our International
segment and related primarily to property and equipment impairments (including the IT assets), inventory write-downs, facility
closure and other costs and employee termination benefits.
In fiscal 2012, we incurred an additional $44 million of charges related to the fiscal 2011 restructuring activities. Of the total
charge, $45 million related to our Domestic segment, consisting primarily of property and equipment impairments (notably IT
assets), employee termination benefits, intangible asset impairments and other costs associated with the exit from certain digital
delivery services within our entertainment product category. Within our Domestic segment, we also incurred additional
inventory write-downs as we completed the exit from certain distribution facilities associated with our entertainment product
category at the end of fiscal 2012. The $1 million of net benefit in our International segment in fiscal 2012 was the result of
employee termination benefits, offset by adjustments to facility closure and other costs from the completion of our exit from the
Turkey market and exiting of lease locations in China.
During fiscal 2013 (11-month), we recorded a net reduction to restructuring charges of $13 million, which related primarily to
our Domestic segment. The net reduction was largely the result of a gain recorded on the sale of a previously impaired
distribution facility and equipment during the first quarter of fiscal 2013 (11-month) (previously impaired through restructuring
charges), partially offset by charges associated with the exit from certain digital delivery services within our entertainment
product category. We do not expect to incur further material restructuring charges related to our fiscal 2011 restructuring
activities in either our Domestic or International segments.
For continuing operations, the inventory write-downs related to our fiscal 2011 restructuring activities are presented in
Restructuring charges — cost of goods sold in our Consolidated Statements of Earnings, and the remainder of the restructuring
charges are presented in Restructuring charges in our Consolidated Statements of Earnings. However, all restructuring charges
from discontinued operations related to our fiscal 2011 restructuring activities are presented in Loss from discontinued
operations in our Consolidated Statements of Earnings. The composition of the restructuring charges we incurred in fiscal 2013
(11-month), 2012, and 2011 as well as the cumulative amount incurred through the end of fiscal 2013 (11-month), for our fiscal
2011 restructuring activities, was as follows ($ in millions):
Domestic International Total
11-
Month
2013
12-
Month
2012
12-
Month
2011 Cumulative Amount
11-
Month
2013
12-
Month
2012
12-
Month
2011 Cumulative Amount
11-
Month
2013
12-
Month
2012
12-
Month
2011 Cumulative Amount
Continuing operations
Inventory write-downs $ — $ 19 $ 9 $ 28 $ — $ — $ — $ — $ — $ 19 $ 9 $ 28
Property & equipment
impairments(1) (12) — 15 3 — — 107 107 (12) — 122 110
Termination benefits — (3) 16 13 — — — — — (3) 16 13
Facility closure and
other costs — 4 — 4 — — — — — 4 — 4
Total (12) 20 40 48 — — 107 107 (12) 20 147 155
Discontinued operations
Inventory write-downs — — — — — — 15 15 — — 15 15
Property & equipment
impairments — 15 — 15 — — 25 25 — 15 25 40
Termination benefits — 4 — 4 — 7 12 19 — 11 12 23
Intangible asset
impairments — 3 10 13 — — — — — 3 10 13
Facility closure and
other costs — 3 — 3 (1) (8) 13 4 (1) (5) 13 7
Total — 25 10 35 (1) (1) 65 63 (1) 24 75 98
Total $ (12) $ 45 $ 50 $ 83 $ (1) $ (1) $ 172 $ 170 $ (13) $ 44 $ 222 $ 253
(1) Included within the property and equipment impairments is a gain on sale of previously impaired property and equipment.
Table of Contents