Best Buy 2011 Annual Report Download - page 98

$ in millions, except per share amounts or as otherwise noted
asset group was expected to generate. The key inputs to the DCF model generally included our forecasts of net cash
generated from revenue, expenses and other significant cash outflows, such as capital expenditures, as well as an
appropriate discount rate. For the tradename, fair value was derived using the relief from royalty method, as described in
Note 1, Summary of Significant Accounting Policies.
Fair Value of Financial Instruments
Our financial instruments, other than those presented in the disclosures above, include cash, receivables, other
investments, accounts payable, other payables and short- and long-term debt. The fair values of cash, receivables,
accounts payable, other payables and short-term debt approximated carrying values because of the short-term nature of
these instruments. Fair values for other investments held at cost are not readily available, but we estimate that the carrying
values for these investments approximate fair value. See Note 6, Debt, for information about the fair value of our long-
term debt.
5. Restructuring Charges
Fiscal 2011 Restructuring
In the fourth quarter of fiscal 2011, we implemented a series of actions to restructure operations in our domestic and
international businesses. The restructuring actions included plans to exit the Turkey market, restructure the Best Buy
branded stores in China and improve efficiencies in our Domestic segment’s operations. As part of the international
restructuring, we also impaired certain information technology (‘‘IT’’) assets supporting the restructured activities in our
International segment. We view these restructuring activities as necessary to meet our long-term growth goals by investing
in businesses that have the potential to meet our internal rate of return expectations. We believe these actions will improve
the financial performance of our International segment and increase efficiency, enhance customer service and reduce costs
in our Domestic segment’s operations.
We incurred $222 of charges related to the restructuring in the fourth quarter of fiscal 2011. Of the total charges, $51
related to our Domestic segment, primarily for inventory write-downs, property and equipment impairments, employee
termination benefits and intangible asset impairments. The remaining $171 of the charges impacted our International
segment, related to inventory write-downs, property and equipment impairments, employee termination benefits, and
facility closure and other costs primarily associated with stores and corporate offices in Turkey and China. Property and
equipment impairments in our International segment included IT asset impairments.
We expect further restructuring charges related to these actions to impact both our Domestic and International segments in
fiscal 2012. We expect to incur approximately $5 of restructuring charges in our Domestic segment in fiscal 2012, related
to facility closure costs. In addition, we expect to incur between $10 and $15 of restructuring charges in our International
segment in fiscal 2012, primarily related to employee termination benefits and facility closure and other costs. We expect
to be substantially complete with these restructuring activities in fiscal 2012.
The inventory write-downs related to our fiscal 2011 restructuring are presented in the restructuring charges — cost of
goods sold line item in our consolidated statements of earnings, and the remainder of the restructuring charges are
included in the restructuring charges line item in our consolidated statements of earnings. The composition of the
98