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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) March 3, 2022
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BEST BUY CO., INC.
(Exact name of registrant as specified in its charter)
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Minnesota	‌	1-9595	‌	41-0907483	
(State or other jurisdiction
of incorporation)	‌	(Commission
File Number)	‌	(IRS Employer
Identification No.)	
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7601 Penn Avenue South	‌	‌	
Richfield, Minnesota	‌	55423	
(Address of principal executive offices)	‌	(Zip Code)	
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Registrant’s telephone number, including area code (612) 291-1000
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class	Trading symbol	Name of exchange on which registered	
Common Stock, $0.10 par value per share	BBY	New York Stock Exchange	
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company 
If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
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Item 2.02 Results of Operations and Financial Condition.
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On March 3, 2022, Best Buy Co., Inc. (“Best Buy” or the “registrant”) issued a news release announcing its results of operations for the fourth quarter and fiscal year ended January 29, 2022.
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The registrant is scheduled to conduct a combined earnings and investor update webcast at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) on March 3, 2022. A video webcast of the event and a question-and-answer session, as well as the presentation materials, will be available both live and after the event on the registrant’s website at investors.bestbuy.com.
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The news release issued on March 3, 2022, is furnished as Exhibit 99 to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that Section unless the registrant specifically incorporates it by reference in a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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Item 7.01 Regulation FD Disclosure.
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On March 3, 2022, Best Buy will host a combined earnings and investor update webcast. At the event, members of Best Buy’s executive team will discuss the registrant’s quarterly and full year results, share updates on strategic initiatives and provide forward-looking financial targets. Following the prepared remarks, the registrant will host a virtual question-and-answer session.
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The event will begin at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) until approximately 10:30 a.m. Eastern Time (9:30 a.m. Central Time). A video webcast of the event and a question-and-answer session, as well as the presentation materials, will be available both live and after the event on the registrant’s website at investors.bestbuy.com.
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Best Buy’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the registrant. This report will not be deemed an admission as to the materiality of any information disclosed solely to satisfy the requirements of Regulation FD.
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Item 9.01 Financial Statements and Exhibits.
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(d) Exhibits.
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The following are furnished as Exhibits to this Current Report on Form 8-K.

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Exhibit No.	‌	Description of Exhibit	
99	‌	News release issued March 3, 2022 (furnished pursuant to Item 2.02). Any internet address provided in this release is for information purposes only and is not intended to be a hyperlink. Accordingly, no information at any internet address is included herein.	
104	‌	Cover Page Interactive Data File (embedded within the Inline XBRL document).	
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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‌	‌	BEST BUY CO., INC.	
‌	‌	(Registrant)	
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Date: March 3, 2022	By:	/s/ MATHEW R. WATSON	
‌	‌	Mathew R. Watson	
‌	‌	Senior Vice President, Finance – Controller and Chief Accounting Officer	
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Exhibit 99

Best Buy Reports Fourth Quarter Results
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	·		Q4 Comparable Sales Decreased 2.3% Compared to 12.6% Growth in Q4 FY21	
	·		Q4 GAAP Diluted EPS of $2.62	
	·		Q4 Non-GAAP Diluted EPS of $2.73	
	·		FY22 GAAP Operating Income Rate of 5.9%	
	·		FY22 Non-GAAP Operating Income Rate of 6.0%	
	·		Increased Quarterly Dividend 26% to $0.88 per Share	
	·		Expects FY23 Non-GAAP Diluted EPS of $8.85 to $9.15	
	·		Expects FY25 Revenue of $53.5 billion to $56.5 billion	
	·		Expects FY25 Non-GAAP Operating Income Rate of 6.3% to 6.8%	
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MINNEAPOLIS, March 3, 2022 -- Best Buy Co., Inc. (NYSE: BBY) today announced results for the 13-week fourth quarter ended January 29, 2022 (“Q4 FY22”), as compared to the 13-week fourth quarter ended January 30, 2021 (“Q4 FY21”).

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﻿	Q4 FY22	Q4 FY21	FY22	FY21	
Revenue ($ in millions)	 	 	 	 	 	 	 	 	 	 	 	 	
Enterprise	$	16,365 	 	$	16,937 	 	$	51,761 	 	$	47,262 	 	
Domestic segment	$	14,993 	 	$	15,400 	 	$	47,830 	 	$	43,293 	 	
International segment	$	1,372 	 	$	1,537 	 	$	3,931 	 	$	3,969 	 	
Enterprise comparable sales % change1	 	(2.3)	%	 	12.6 	%	 	10.4 	%	 	9.7 	%	
Domestic comparable sales % change1	 	(2.1)	%	 	12.4 	%	 	11.0 	%	 	9.2 	%	
Domestic comparable online sales % change1	 	(11.2)	%	 	89.3 	%	 	(12.0)	%	 	144.4 	%	
International comparable sales % change1	 	(3.8)	%	 	14.9 	%	 	3.3 	%	 	15.0 	%	
Operating Income	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP operating income as a % of revenue	 	4.9 	%	 	6.1 	%	 	5.9 	%	 	5.1 	%	
Non-GAAP operating income as a % of revenue	 	5.1 	%	 	6.9 	%	 	6.0 	%	 	5.8 	%	
Diluted Earnings per Share ("EPS")	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP diluted EPS	$	2.62 	 	$	3.10 	 	$	9.84 	 	$	6.84 	 	
Non-GAAP diluted EPS	$	2.73 	 	$	3.48 	 	$	10.01 	 	$	7.91 	 	
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For GAAP to non-GAAP reconciliations of the measures referred to in the above table, please refer to the attached supporting schedule.
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“Our teams showed remarkable execution and dedication to serving our customers throughout the important gift-giving season,” said Corie Barry, Best Buy CEO. “In Q4, we drove improvement in year-over-year customer satisfaction metrics across almost all areas, particularly for in-store, online and chat experiences. And even with online sales at almost 40% of our Domestic revenue, we reached our fastest holiday delivery times ever, shipping

 

 
products to customer homes more than 25% faster than last year and two years ago. I am truly grateful for, and continue to be impressed by, our associates' dedication, resourcefulness and flat-out determination.”
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“Q4 sales of $16.4 billion were impacted by more constrained inventory than expected, including some high-demand holiday items, and the temporary reduction in store hours in January due to Omicron-induced staffing challenges,” continued Barry. “We are deliberately investing in our future and furthering our competitive differentiation which, as expected, impacted our Q4 profitability. The biggest areas of investment were our new membership program, technology and Best Buy Health, all core to our future growth potential.”
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Barry continued, “FY22 was another record year. In addition to record revenue and earnings, our leaders drove new ways of operating and our employees worked tirelessly to meet our customers’ technology needs with excellent service. From a financial perspective, our comparable sales growth was 10.4% on top of a very strong 9.7% last year, with revenue up $8.1 billion over the past two years. Compared to last year, our GAAP EPS was up 44% to $9.84 and our non-GAAP EPS was up 27% to $10.01.”
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“In the past two years, our total cash provided by operating activities was $8.2 billion and we generated more than $6.5 billion in free cash flow,” said Matt Bilunas, Best Buy CFO. “In FY22, we returned $4.2 billion to shareholders in the form of share repurchases and dividends. Today, we are announcing a 26% increase in our quarterly dividend to $0.88 per share and our plan to spend approximately $1.5 billion in share repurchases in FY23.”
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Financial Outlook
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“In FY23, we are leveraging our position of strength by continuing to invest in our future to deliver growth over the long term. While we expect sales growth and earnings to look different in FY23, our outlook for FY25 delivers strong revenue growth and operating income rate expansion well beyond FY22,” Bilunas continued. “The two largest variables in our FY23 financial outlook on a year-over-year basis are the short-term industry decline as we lap high growth and government stimulus, and the investment in our new membership program, Best Buy Totaltech, which we believe will drive longer-term value. As we look to FY25, we expect the consumer electronics industry will return to the level we saw this past year, which is much higher than pre-pandemic levels, and that Totaltech, Best Buy Health and other initiatives will drive meaningful growth.”
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In conjunction with today’s earnings release, the company is expected to host a combined earnings and investor update webcast at 8:00 a.m. Eastern Time during which members of the executive team will discuss quarterly results, share updates on strategic initiatives and provide more details on the following financial targets:
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FY23:
	·		Revenue of $49.3 billion to $50.8 billion	
	·		Comparable sales decline of 1.0% to 4.0%	
	·		Enterprise non-GAAP operating income rate2 of approximately 5.4%	
	·		Non-GAAP effective income tax rate2 of approximately 24.5%	
	·		Share repurchases of approximately $1.5 billion	
	·		Non-GAAP diluted EPS2 of $8.85 to $9.15	
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FY25:
	·		Enterprise revenue of $53.5 billion to $56.5 billion	
	·		Enterprise non-GAAP operating income rate2 of 6.3% to 6.8%	
	·		Enterprise non-GAAP operating income2 of $3.4 billion to $3.8 billion	
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Domestic Segment Q4 FY22 Results
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Domestic Revenue
Domestic revenue of $14.99 billion decreased 2.6% versus last year. The decrease was primarily driven by a comparable sales decline of 2.1% and the loss of revenue from permanent store closures in the past year.
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From a merchandising perspective, the largest drivers of comparable sales growth on a weighted basis were appliances, virtual reality, home theater and headphones. These growth drivers were more than offset by declines in gaming, mobile phones, tablets and services.
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Domestic online revenue of $5.91 billion decreased 11.2% on a comparable basis, and as a percentage of total Domestic revenue, online revenue was approximately 39.4% versus 43.2% last year. 
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Domestic Gross Profit Rate
Domestic GAAP gross profit rate was 20.0% versus 20.9% last year. On a non-GAAP basis, the gross profit rate was 20.0% versus 20.7% last year. The lower GAAP and non-GAAP gross profit rates were primarily driven by lower services margin rates, including pressure associated with the company’s new Totaltech membership offering, which was partially offset by higher profit-sharing revenue from the company’s private label and co-branded credit card arrangement. The GAAP gross profit rate in FY21 also included the benefit of a $21 million price-fixing settlement received in relation to products purchased and sold in prior fiscal years.  
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Domestic Selling, General and Administrative Expenses (“SG&A”)
Domestic GAAP SG&A was $2.30 billion, or 15.3% of revenue, versus $2.15 billion, or 14.0% of revenue, last year. On a non-GAAP basis, SG&A was $2.27 billion, or 15.1% of revenue, versus $2.13 billion, or 13.8% of revenue, last year. Both GAAP and non-GAAP SG&A increased primarily due to: (1) advertising expense; (2) technology investments; (3) store and call center labor; and (4) Best Buy Health.
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International Segment Q4 FY22 Results
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International Revenue
International revenue of $1.4 billion decreased 10.7% versus last year. This decrease was primarily driven by the closure of Mexico in FY22 and a comparable sales decline of 3.8% in Canada. These items were partially offset by the benefit of approximately 150 basis points of favorable foreign currency exchange rates.
 
International Gross Profit Rate
International GAAP gross profit rate was 22.9% versus 21.6% last year. On a non-GAAP basis, the gross profit rate was 22.9% versus 20.8% last year. The higher GAAP and non-GAAP gross profit rates were primarily driven by sales mixing out of Mexico, which had a lower gross profit rate than Canada, and a larger percentage of revenue from the higher margin services category in Canada. The GAAP gross profit rate in FY21 also included a $13 million benefit associated with more favorable than expected inventory markdowns in Mexico.
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International SG&A
International SG&A was $206 million, or 15.0% of revenue, versus $216 million, or 14.1% of revenue, last year. SG&A decreased primarily due to the closure of Mexico, which was partially offset by increased store payroll expense in Canada and the impact of foreign exchange rates.
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Dividends and Share Repurchases
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In Q4 FY22, the company returned a total of $1.94 billion to shareholders through share repurchases of $1.77 billion and dividends of $166 million. For the full year, the company returned a total of $4.2 billion to shareholders through share repurchases of $3.5 billion and dividends of $688 million. 
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Today, the company announced its board of directors approved a 26% increase in the regular quarterly dividend to $0.88 per share. The regular quarterly dividend will be payable on April 14, 2022, to shareholders of record as of the close of business on March 24, 2022.
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In addition, the company’s board of directors approved a new $5.0 billion share repurchase authorization, replacing the existing authorization dated February 2021, which had $1.6 billion in repurchases remaining at the end of FY22.
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Combined Q4 FY22 Earnings and Investor Update Webcast
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Best Buy is scheduled to conduct a video webcast from 8:00 a.m. to approximately 10:30 a.m. Eastern Time on March 3, 2022. Members of the executive team will discuss the company’s quarterly results, share updates on strategic initiatives and provide forward-looking financial targets. Following the prepared remarks, the company will host a virtual Q&A session. A video webcast of the event will be available at www.investors.bestbuy.com, both live and after the event.
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Notes:
(1) Comparable sales include revenue from all stores that were temporarily closed or operating an enhanced curbside-only operating model as a result of COVID-19. The method of calculating comparable sales varies across the retail industry, including the treatment of store closures as a result of COVID-19. As a result, our method of calculating comparable sales may not be the same as other retailers’ methods. On November 24, 2020, the company announced its decision to exit its operations in Mexico. As a result, all revenue from Mexico operations has been excluded from the comparable sales calculation beginning in fiscal December FY21. For additional information on comparable sales, please see our most recent Annual Report on Form 10-K, and our subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”), and available at www.investors.bestbuy.com. 
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(2) A reconciliation of the projected non-GAAP operating income, non-GAAP operating income rate and non-GAAP diluted EPS, which are forward-looking non-GAAP financial measures, to the most directly comparable GAAP financial measures, is not provided because the company is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. These GAAP measures may include the impact of such items as restructuring charges; price-fixing settlements; goodwill impairments; gains and losses on investments; intangible asset amortization; certain acquisition-related costs; and the tax effect of all such items. Historically, the company has excluded these items from non-GAAP financial measures. The company currently expects to continue to exclude these items in future disclosures of non-GAAP financial measures and may also exclude other items that may arise (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments, such as a decision to exit part of the business or reaching settlement of a legal dispute, are inherently unpredictable as to if or when they may occur. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.
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Forward-Looking and Cautionary Statements:
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect management’s current views and estimates regarding future market conditions, company performance and financial results, operational investments, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as “anticipate,” “believe,” “assume,” “estimate,” “expect,” “intend,” “foresee,” “project,” “guidance,” “plan,” “outlook,” and other words and terms of similar meaning. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: the duration and scope of the ongoing COVID-19 pandemic and its resurgence and the impact on demand for our products and services, levels of consumer confidence and our supply chain; the effects and duration of steps we have taken and will continue to take in response to the pandemic, including the implementation of our interim and evolving operating model; actions governments, businesses and individuals have taken and will continue to take in response to the pandemic and their impact on economic activity and consumer spending; the pace of recovery when the ongoing COVID-19 pandemic subsides; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; competition (including from multi-channel retailers, e-commerce business, technology service providers, traditional store-based retailers, vendors and mobile network carriers), our expansion strategies, our focus on services as a strategic priority, our reliance on key vendors and mobile network carriers, our ability to attract and retain qualified employees, changes in market compensation rates, risks arising from statutory, regulatory and legal developments, macroeconomic pressures in the markets in which we operate, failure to effectively manage our costs, our reliance on our information technology systems, our ability to prevent or effectively respond to a privacy or security breach, our ability to effectively manage strategic ventures, alliances or acquisitions, our dependence on cash flows and net earnings generated during the fourth fiscal quarter, susceptibility of our products to technological advancements, product life cycle preferences and changes in consumer preferences, economic or regulatory developments that might affect our ability to provide attractive promotional financing, interruptions and other supply chain issues, catastrophic events, health crises, pandemics, our ability to maintain positive brand perception and recognition, product safety and quality concerns, changes to labor or employment laws or regulations, our ability to effectively manage our real estate portfolio, constraints in the capital markets or our vendor credit terms, changes in our credit ratings, any material disruption in our relationship with or the services of third-party vendors, risks related to our exclusive brand products and risks associated with vendors that source products outside of the U.S., including trade restrictions or changes in the costs of imports (including existing or new tariffs or duties and changes in the amount of any such tariffs or duties) and risks arising from our international activities.
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A further list and description of these risks, uncertainties and other matters can be found in the company’s annual report and other reports filed from time to time with the SEC, including, but not limited to, Best Buy’s Annual Report on Form 10-K filed with the SEC on March 19, 2021 and its Quarterly Reports on Form 10-Q filed with the SEC. Best Buy cautions that the foregoing list of important factors is not complete, and any forward-looking statements speak only as of the date they are made, and Best Buy assumes no obligation to update any forward-looking statement that it may make.
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Investor Contact:	 Media Contact:	
Mollie O'Brien	   Carly Charlson	
mollie.obrien@bestbuy.com	   carly.charlson@bestbuy.com	
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BEST BUY CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
($ and shares in millions, except per share amounts)
(Unaudited and subject to reclassification)
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﻿	Three Months Ended	 	Twelve Months Ended	
﻿	January 29, 2022	 	January 30, 2021	 	January 29, 2022	 	January 30, 2021	
Revenue	$	16,365 	 	 	$	16,937 	 	 	$	51,761 	 	 	$	47,262 	 	
Cost of sales	 	13,052 	 	 	 	13,394 	 	 	 	40,121 	 	 	 	36,689 	 	
Gross profit	 	3,313 	 	 	 	3,543 	 	 	 	11,640 	 	 	 	10,573 	 	
Gross profit %	 	20.2 	%	 	 	20.9 	%	 	 	22.5 	%	 	 	22.4 	%	
Selling, general and administrative expenses	2,505 	 	 	 	2,368 	 	 	 	8,635 	 	 	 	7,928 	 	
SG&A %	 	15.3 	%	 	 	14.0 	%	 	 	16.7 	%	 	 	16.8 	%	
Restructuring charges	 	5 	 	 	 	142 	 	 	 	(34)	 	 	 	254 	 	
Operating income	 	803 	 	 	 	1,033 	 	 	 	3,039 	 	 	 	2,391 	 	
Operating income %	 	4.9 	%	 	 	6.1 	%	 	 	5.9 	%	 	 	5.1 	%	
Other income (expense):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gain on sale of investments	 	 -	 	 	 	1 	 	 	 	 -	 	 	 	1 	 	
Investment income and other	 	3 	 	 	 	18 	 	 	 	10 	 	 	 	37 	 	
Interest expense	 	(6)	 	 	 	(9)	 	 	 	(25)	 	 	 	(52)	 	
Earnings before income tax expense	 	800 	 	 	 	1,043 	 	 	 	3,024 	 	 	 	2,377 	 	
Income tax expense	 	172 	 	 	 	227 	 	 	 	574 	 	 	 	579 	 	
Effective tax rate	 	21.4 	%	 	 	21.6 	%	 	 	19.0 	%	 	 	24.3 	%	
Equity in income (loss) of affiliates	 	(2)	 	 	 	 -	 	 	 	4 	 	 	 	 -	 	
Net earnings	$	626 	 	 	$	816 	 	 	$	2,454 	 	 	$	1,798 	 	
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Basic earnings per share	$	2.65 	 	 	$	3.15 	 	 	$	9.94 	 	 	$	6.93 	 	
Diluted earnings per share	$	2.62 	 	 	$	3.10 	 	 	$	9.84 	 	 	$	6.84 	 	
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Weighted-average common shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	236.6 	 	 	 	259.4 	 	 	 	246.8 	 	 	 	259.6 	 	
Diluted	 	239.0 	 	 	 	263.2 	 	 	 	249.3 	 	 	 	263.0 	 	
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BEST BUY CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
(Unaudited and subject to reclassification)
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﻿	January 29, 2022	 	January 30, 2021	
Assets	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	
Cash and cash equivalents	$	2,936 	 	 	$	5,494 	 	
Receivables, net	 	1,042 	 	 	 	1,061 	 	
Merchandise inventories	 	5,965 	 	 	 	5,612 	 	
Other current assets	 	596 	 	 	 	373 	 	
Total current assets	 	10,539 	 	 	 	12,540 	 	
Property and equipment, net	 	2,250 	 	 	 	2,260 	 	
Operating lease assets	 	2,654 	 	 	 	2,612 	 	
Goodwill	 	1,384 	 	 	 	986 	 	
Other assets	 	677 	 	 	 	669 	 	
Total assets	$	17,504 	 	 	$	19,067 	 	
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Liabilities and equity	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	
Accounts payable	$	6,803 	 	 	$	6,979 	 	
Unredeemed gift card liabilities	 	316 	 	 	 	317 	 	
Deferred revenue	 	1,103 	 	 	 	711 	 	
Accrued compensation and related expenses	 	845 	 	 	 	725 	 	
Accrued liabilities	 	946 	 	 	 	972 	 	
Short-term debt	 	 -	 	 	 	110 	 	
Current portion of operating lease liabilities	 	648 	 	 	 	693 	 	
Current portion of long-term debt	 	13 	 	 	 	14 	 	
Total current liabilities	 	10,674 	 	 	 	10,521 	 	
Long-term operating lease liabilities	 	2,061 	 	 	 	2,012 	 	
Long-term liabilities	 	533 	 	 	 	694 	 	
Long-term debt	 	1,216 	 	 	 	1,253 	 	
Equity	 	3,020 	 	 	 	4,587 	 	
Total liabilities and equity	$	17,504 	 	 	$	19,067 	 	

 
7

 

 

﻿
﻿
﻿
BEST BUY CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
(Unaudited and subject to reclassification)
﻿
﻿	 	 	 	 	 	 	 	
﻿	Twelve Months Ended	
﻿	January 29, 2022	 	January 30, 2021	
Operating activities	 	 	 	 	 	 	 	
Net earnings	$	2,454 	 	 	$	1,798 	 	
Adjustments to reconcile net earnings to total cash provided by operating activities:	 	 	 	 	 	
Depreciation and amortization	 	869 	 	 	 	839 	 	
Restructuring charges	 	(34)	 	 	 	254 	 	
Stock-based compensation	 	141 	 	 	 	135 	 	
Deferred income taxes	 	14 	 	 	 	(36)	 	
Other, net	 	11 	 	 	 	3 	 	
Changes in operating assets and liabilities, net of acquired assets and liabilities:	 	 	 	 	 	
Receivables	 	17 	 	 	 	73 	 	
Merchandise inventories	 	(328)	 	 	 	(435)	 	
Other assets	 	(14)	 	 	 	(51)	 	
Accounts payable	 	(201)	 	 	 	1,676 	 	
Income taxes	 	(156)	 	 	 	173 	 	
Other liabilities	 	479 	 	 	 	498 	 	
Total cash provided by operating activities	 	3,252 	 	 	 	4,927 	 	
﻿	 	 	 	 	 	 	 	
Investing activities	 	 	 	 	 	 	 	
Additions to property and equipment	 	(737)	 	 	 	(713)	 	
Purchases of investments	 	(233)	 	 	 	(620)	 	
Sales of investments	 	66 	 	 	 	546 	 	
Acquisitions, net of cash acquired	 	(468)	 	 	 	 -	 	
Other, net	 	 -	 	 	 	(1)	 	
Total cash used in investing activities	 	(1,372)	 	 	 	(788)	 	
﻿	 	 	 	 	 	 	 	
Financing activities	 	 	 	 	 	 	 	
Repurchase of common stock	 	(3,502)	 	 	 	(312)	 	
Issuance of common stock	 	29 	 	 	 	28 	 	
Dividends paid	 	(688)	 	 	 	(568)	 	
Borrowings of debt	 	 -	 	 	 	1,892 	 	
Repayments of debt	 	(133)	 	 	 	(1,916)	 	
Other, net	 	(3)	 	 	 	 -	 	
Total cash used in financing activities	 	(4,297)	 	 	 	(876)	 	
﻿	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents	 	(3)	 	 	 	7 	 	
Increase (decrease) in cash, cash equivalents and restricted cash	 	(2,420)	 	 	 	3,270 	 	
Cash, cash equivalents and restricted cash at beginning of period	 	5,625 	 	 	 	2,355 	 	
Cash, cash equivalents and restricted cash at end of period	$	3,205 	 	 	$	5,625 	 	
﻿
﻿
﻿
﻿
﻿
﻿
﻿
﻿
﻿

 
8

 

 

BEST BUY CO., INC.
SEGMENT INFORMATION
($ in millions)
(Unaudited and subject to reclassification)
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended	 	Twelve Months Ended	
Domestic Segment Results	January 29, 2022	 	January 30, 2021	 	January 29, 2022	 	January 30, 2021	
Revenue	$	14,993 	 	 	$	15,400 	 	 	$	47,830 	 	 	$	43,293 	 	
Comparable sales % change	 	(2.1)	%	 	 	12.4 	%	 	 	11.0 	%	 	 	9.2 	%	
Comparable online sales % change	 	(11.2)	%	 	 	89.3 	%	 	 	(12.0)	%	 	 	144.4 	%	
Gross profit	$	2,999 	 	 	$	3,211 	 	 	$	10,702 	 	 	$	9,720 	 	
Gross profit as a % of revenue	 	20.0 	%	 	 	20.9 	%	 	 	22.4 	%	 	 	22.5 	%	
SG&A	$	2,299 	 	 	$	2,152 	 	 	$	7,946 	 	 	$	7,239 	 	
SG&A as a % of revenue	 	15.3 	%	 	 	14.0 	%	 	 	16.6 	%	 	 	16.7 	%	
Operating income	$	695 	 	 	$	971 	 	 	$	2,795 	 	 	$	2,348 	 	
Operating income as a % of revenue	 	4.6 	%	 	 	6.3 	%	 	 	5.8 	%	 	 	5.4 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Domestic Segment Non-GAAP Results1	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	$	2,999 	 	 	$	3,190 	 	 	$	10,702 	 	 	$	9,699 	 	
Gross profit as a % of revenue	 	20.0 	%	 	 	20.7 	%	 	 	22.4 	%	 	 	22.4 	%	
SG&A	$	2,271 	 	 	$	2,132 	 	 	$	7,853 	 	 	$	7,159 	 	
SG&A as a % of revenue	 	15.1 	%	 	 	13.8 	%	 	 	16.4 	%	 	 	16.5 	%	
Operating income	$	728 	 	 	$	1,058 	 	 	$	2,849 	 	 	$	2,540 	 	
Operating income as a % of revenue	 	4.9 	%	 	 	6.9 	%	 	 	6.0 	%	 	 	5.9 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended	 	Twelve Months Ended	
International Segment Results	January 29, 2022	 	January 30, 2021	 	January 29, 2022	 	January 30, 2021	
Revenue	$	1,372 	 	 	$	1,537 	 	 	$	3,931 	 	 	$	3,969 	 	
Comparable sales % change	 	(3.8)	%	 	 	14.9 	%	 	 	3.3 	%	 	 	15.0 	%	
Gross profit	$	314 	 	 	$	332 	 	 	$	938 	 	 	$	853 	 	
Gross profit as a % of revenue	 	22.9 	%	 	 	21.6 	%	 	 	23.9 	%	 	 	21.5 	%	
SG&A	$	206 	 	 	$	216 	 	 	$	689 	 	 	$	689 	 	
SG&A as a % of revenue	 	15.0 	%	 	 	14.1 	%	 	 	17.5 	%	 	 	17.4 	%	
Operating income	$	108 	 	 	$	62 	 	 	$	244 	 	 	$	43 	 	
Operating income as a % of revenue	 	7.9 	%	 	 	4.0 	%	 	 	6.2 	%	 	 	1.1 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
International Segment Non-GAAP Results1	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	$	314 	 	 	$	319 	 	 	$	932 	 	 	$	876 	 	
Gross profit as a % of revenue	 	22.9 	%	 	 	20.8 	%	 	 	23.7 	%	 	 	22.1 	%	
SG&A	$	206 	 	 	$	216 	 	 	$	689 	 	 	$	689 	 	
SG&A as a % of revenue	 	15.0 	%	 	 	14.1 	%	 	 	17.5 	%	 	 	17.4 	%	
Operating income	$	108 	 	 	$	103 	 	 	$	243 	 	 	$	187 	 	
Operating income as a % of revenue	 	7.9 	%	 	 	6.7 	%	 	 	6.2 	%	 	 	4.7 	%	
(1)For GAAP to non-GAAP reconciliations, please refer to the attached supporting schedule titled Reconciliation of Non-GAAP Financial Measures.

 
9

 

 

BEST BUY CO., INC.
REVENUE CATEGORY SUMMARY
(Unaudited and subject to reclassification)
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	
﻿	Revenue Mix	 	Comparable Sales	
﻿	Three Months Ended	 	Three Months Ended	
Domestic Segment	January 29, 2022	 	January 30, 2021	 	January 29, 2022	 	January 30, 2021	
Computing and Mobile Phones	42 	%	 	43 	%	 	(6.0)	%	 	16.4 	%	
Consumer Electronics	34 	%	 	32 	%	 	2.9 	%	 	(1.3)	%	
Appliances	13 	%	 	12 	%	 	7.9 	%	 	36.0 	%	
Entertainment	8 	%	 	9 	%	 	(9.5)	%	 	31.4 	%	
Services	3 	%	 	4 	%	 	(14.8)	%	 	4.9 	%	
Other	 -	%	 	 -	%	 	N/A	 	 	N/A	 	
Total	100 	%	 	100 	%	 	(2.1)	%	 	12.4 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	
﻿	Revenue Mix	 	Comparable Sales	
﻿	Three Months Ended	 	Three Months Ended	
International Segment	January 29, 2022	 	January 30, 2021	 	January 29, 2022	 	January 30, 2021	
Computing and Mobile Phones	40 	%	 	42 	%	 	(6.0)	%	 	20.5 	%	
Consumer Electronics	35 	%	 	34 	%	 	(3.8)	%	 	2.4 	%	
Appliances	9 	%	 	9 	%	 	(1.2)	%	 	26.8 	%	
Entertainment	10 	%	 	10 	%	 	(6.9)	%	 	59.5 	%	
Services	4 	%	 	3 	%	 	23.0 	%	 	(18.0)	%	
Other	2 	%	 	2 	%	 	2.8 	%	 	6.5 	%	
Total	100 	%	 	100 	%	 	(3.8)	%	 	14.9 	%	

 
10

 

 

﻿
BEST BUY CO., INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
($ in millions, except per share amounts)
(Unaudited and subject to reclassification)
﻿
The following information provides reconciliations of the most comparable financial measures presented in accordance with accounting principles generally accepted in the U.S. (GAAP financial measures) to presented non-GAAP financial measures. The company believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating current period performance and in assessing future performance. For these reasons, internal management reporting also includes non-GAAP financial measures. Generally, presented non-GAAP financial measures include adjustments for items such as restructuring charges, price-fixing settlements, goodwill impairments, gains and losses on investments, intangible asset amortization, certain acquisition-related costs and the tax effect of all such items. In addition, certain other items may be excluded from non-GAAP financial measures when the company believes this provides greater clarity to management and investors. These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for, the GAAP financial measures presented in this earnings release and the company’s financial statements and other publicly filed reports. Non-GAAP financial measures as presented herein may not be comparable to similarly titled measures used by other companies.
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended	 	Three Months Ended	
﻿	January 29, 2022	 	January 30, 2021	
﻿	Domestic	 	International	 	Consolidated	 	Domestic	 	International	 	Consolidated	
Gross profit	$	2,999 	 	 	$	314 	 	 	$	3,313 	 	 	$	3,211 	 	 	$	332 	 	 	$	3,543 	 	
% of revenue	 	20.0 	%	 	 	22.9 	%	 	 	20.2 	%	 	 	20.9 	%	 	 	21.6 	%	 	 	20.9 	%	
Restructuring - inventory markdowns1	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(13)	 	 	 	(13)	 	
Price-fixing settlement2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(21)	 	 	 	 -	 	 	 	(21)	 	
Non-GAAP gross profit	$	2,999 	 	 	$	314 	 	 	$	3,313 	 	 	$	3,190 	 	 	$	319 	 	 	$	3,509 	 	
% of revenue	 	20.0 	%	 	 	22.9 	%	 	 	20.2 	%	 	 	20.7 	%	 	 	20.8 	%	 	 	20.7 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
SG&A	$	2,299 	 	 	$	206 	 	 	$	2,505 	 	 	$	2,152 	 	 	$	216 	 	 	$	2,368 	 	
% of revenue	 	15.3 	%	 	 	15.0 	%	 	 	15.3 	%	 	 	14.0 	%	 	 	14.1 	%	 	 	14.0 	%	
Intangible asset amortization3	 	(22)	 	 	 	 -	 	 	 	(22)	 	 	 	(20)	 	 	 	 -	 	 	 	(20)	 	
Acquisition-related transaction costs3	 	(6)	 	 	 	 -	 	 	 	(6)	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Non-GAAP SG&A	$	2,271 	 	 	$	206 	 	 	$	2,477 	 	 	$	2,132 	 	 	$	216 	 	 	$	2,348 	 	
% of revenue	 	15.1 	%	 	 	15.0 	%	 	 	15.1 	%	 	 	13.8 	%	 	 	14.1 	%	 	 	13.9 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	$	695 	 	 	$	108 	 	 	$	803 	 	 	$	971 	 	 	$	62 	 	 	$	1,033 	 	
% of revenue	 	4.6 	%	 	 	7.9 	%	 	 	4.9 	%	 	 	6.3 	%	 	 	4.0 	%	 	 	6.1 	%	
Restructuring - inventory markdowns1	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(13)	 	 	 	(13)	 	
Price-fixing settlement2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(21)	 	 	 	 -	 	 	 	(21)	 	
Intangible asset amortization3	 	22 	 	 	 	 -	 	 	 	22 	 	 	 	20 	 	 	 	 -	 	 	 	20 	 	
Acquisition-related transaction costs3	 	6 	 	 	 	 -	 	 	 	6 	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Restructuring charges4	 	5 	 	 	 	 -	 	 	 	5 	 	 	 	88 	 	 	 	54 	 	 	 	142 	 	
Non-GAAP operating income	$	728 	 	 	$	108 	 	 	$	836 	 	 	$	1,058 	 	 	$	103 	 	 	$	1,161 	 	
% of revenue	 	4.9 	%	 	 	7.9 	%	 	 	5.1 	%	 	 	6.9 	%	 	 	6.7 	%	 	 	6.9 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	 	 	 	 	 	 	 	 	 	21.4 	%	 	 	 	 	 	 	 	 	 	 	21.6 	%	
Price-fixing settlement2	 	 	 	 	 	 	 	 	 	 -	%	 	 	 	 	 	 	 	 	 	 	0.2 	%	
Intangible asset amortization3	 	 	 	 	 	 	 	 	 	 -	%	 	 	 	 	 	 	 	 	 	 	(0.1)	%	
Restructuring charges4	 	 	 	 	 	 	 	 	 	 -	%	 	 	 	 	 	 	 	 	 	 	(0.8)	%	
Gain on investments, net	 	 	 	 	 	 	 	 	 	 -	%	 	 	 	 	 	 	 	 	 	 	0.1 	%	
Non-GAAP effective tax rate	 	 	 	 	 	 	 	 	 	21.4 	%	 	 	 	 	 	 	 	 	 	 	21.0 	%	
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended	 	Three Months Ended	
﻿	January 29, 2022	 	January 30, 2021	
﻿	Pretax Earnings	 	Net of Tax5	 	Per Share	 	Pretax Earnings	 	Net of Tax5	 	Per Share	
Diluted EPS	 	 	 	 	 	 	 	 	$	2.62 	 	 	 	 	 	 	 	 	 	 	$	3.10 	 	
Restructuring - inventory markdowns1	$	 -	 	 	$	 -	 	 	 	 -	 	 	$	(13)	 	 	$	(13)	 	 	 	(0.05)	 	
Price-fixing settlement2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(21)	 	 	 	(15)	 	 	 	(0.06)	 	
Intangible asset amortization3	 	22 	 	 	 	18 	 	 	 	0.08 	 	 	 	20 	 	 	 	15 	 	 	 	0.06 	 	
Acquisition-related transaction costs3	 	6 	 	 	 	5 	 	 	 	0.02 	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Restructuring charges4	 	5 	 	 	 	3 	 	 	 	0.01 	 	 	 	142 	 	 	 	121 	 	 	 	0.46 	 	
Gain on investments, net	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(12)	 	 	 	(9)	 	 	 	(0.03)	 	
Non-GAAP diluted EPS	 	 	 	 	 	 	 	 	$	2.73 	 	 	 	 	 	 	 	 	 	 	$	3.48 	 	

 
11

 

 
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Twelve Months Ended	 	Twelve Months Ended	
﻿	January 29, 2022	 	January 30, 2021	
﻿	Domestic	 	International	 	Consolidated	 	Domestic	 	International	 	Consolidated	
Gross profit	$	10,702 	 	 	$	938 	 	 	$	11,640 	 	 	$	9,720 	 	 	$	853 	 	 	$	10,573 	 	
% of revenue	 	22.4 	%	 	 	23.9 	%	 	 	22.5 	%	 	 	22.5 	%	 	 	21.5 	%	 	 	22.4 	%	
Restructuring - inventory markdowns1	 	 -	 	 	 	(6)	 	 	 	(6)	 	 	 	 -	 	 	 	23 	 	 	 	23 	 	
Price-fixing settlement2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(21)	 	 	 	 -	 	 	 	(21)	 	
Non-GAAP gross profit	$	10,702 	 	 	$	932 	 	 	$	11,634 	 	 	$	9,699 	 	 	$	876 	 	 	$	10,575 	 	
% of revenue	 	22.4 	%	 	 	23.7 	%	 	 	22.5 	%	 	 	22.4 	%	 	 	22.1 	%	 	 	22.4 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
SG&A	$	7,946 	 	 	$	689 	 	 	$	8,635 	 	 	$	7,239 	 	 	$	689 	 	 	$	7,928 	 	
% of revenue	 	16.6 	%	 	 	17.5 	%	 	 	16.7 	%	 	 	16.7 	%	 	 	17.4 	%	 	 	16.8 	%	
Intangible asset amortization3	 	(82)	 	 	 	 -	 	 	 	(82)	 	 	 	(80)	 	 	 	 -	 	 	 	(80)	 	
Acquisition-related transaction costs3	 	(11)	 	 	 	 -	 	 	 	(11)	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Non-GAAP SG&A	$	7,853 	 	 	$	689 	 	 	$	8,542 	 	 	$	7,159 	 	 	$	689 	 	 	$	7,848 	 	
% of revenue	 	16.4 	%	 	 	17.5 	%	 	 	16.5 	%	 	 	16.5 	%	 	 	17.4 	%	 	 	16.6 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	$	2,795 	 	 	$	244 	 	 	$	3,039 	 	 	$	2,348 	 	 	$	43 	 	 	$	2,391 	 	
% of revenue	 	5.8 	%	 	 	6.2 	%	 	 	5.9 	%	 	 	5.4 	%	 	 	1.1 	%	 	 	5.1 	%	
Restructuring - inventory markdowns1	 	 -	 	 	 	(6)	 	 	 	(6)	 	 	 	 -	 	 	 	23 	 	 	 	23 	 	
Price-fixing settlement2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(21)	 	 	 	 -	 	 	 	(21)	 	
Intangible asset amortization3	 	82 	 	 	 	 -	 	 	 	82 	 	 	 	80 	 	 	 	 -	 	 	 	80 	 	
Acquisition-related transaction costs3	 	11 	 	 	 	 -	 	 	 	11 	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Restructuring charges4	 	(39)	 	 	 	5 	 	 	 	(34)	 	 	 	133 	 	 	 	121 	 	 	 	254 	 	
Non-GAAP operating income	$	2,849 	 	 	$	243 	 	 	$	3,092 	 	 	$	2,540 	 	 	$	187 	 	 	$	2,727 	 	
% of revenue	 	6.0 	%	 	 	6.2 	%	 	 	6.0 	%	 	 	5.9 	%	 	 	4.7 	%	 	 	5.8 	%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	 	 	 	 	 	 	 	 	 	19.0 	%	 	 	 	 	 	 	 	 	 	 	24.3 	%	
Price-fixing settlement2	 	 	 	 	 	 	 	 	 	 -	%	 	 	 	 	 	 	 	 	 	 	0.2 	%	
Intangible asset amortization3	 	 	 	 	 	 	 	 	 	0.1 	%	 	 	 	 	 	 	 	 	 	 	(0.6)	%	
Restructuring charges4	 	 	 	 	 	 	 	 	 	(0.1)	%	 	 	 	 	 	 	 	 	 	 	(1.0)	%	
Gain on investments, net	 	 	 	 	 	 	 	 	 	 -	%	 	 	 	 	 	 	 	 	 	 	0.1 	%	
Non-GAAP effective tax rate	 	 	 	 	 	 	 	 	 	19.0 	%	 	 	 	 	 	 	 	 	 	 	23.0 	%	
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Twelve Months Ended	 	Twelve Months Ended	
﻿	January 29, 2022	 	January 30, 2021	
﻿	Pretax Earnings	 	Net of Tax5	 	Per Share	 	Pretax Earnings	 	Net of Tax5	 	Per Share	
Diluted EPS	 	 	 	 	 	 	 	 	$	9.84 	 	 	 	 	 	 	 	 	 	 	$	6.84 	 	
Restructuring - inventory markdowns1	$	(6)	 	 	$	(6)	 	 	 	(0.02)	 	 	$	23 	 	 	$	23 	 	 	 	0.09 	 	
Price-fixing settlement2	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(21)	 	 	 	(15)	 	 	 	(0.06)	 	
Intangible asset amortization3	 	82 	 	 	 	62 	 	 	 	0.25 	 	 	 	80 	 	 	 	60 	 	 	 	0.23 	 	
Acquisition-related transaction costs3	 	11 	 	 	 	10 	 	 	 	0.04 	 	 	 	 -	 	 	 	 -	 	 	 	 -	 	
Restructuring charges4	 	(34)	 	 	 	(24)	 	 	 	(0.10)	 	 	 	254 	 	 	 	222 	 	 	 	0.84 	 	
Gain on investments, net	 	 -	 	 	 	 -	 	 	 	 -	 	 	 	(12)	 	 	 	(9)	 	 	 	(0.03)	 	
Non-GAAP diluted EPS	 	 	 	 	 	 	 	 	$	10.01 	 	 	 	 	 	 	 	 	 	 	$	7.91 	 	
(1)Represents inventory markdown adjustments recorded within cost of sales associated with the decision to exit operations in Mexico.
(2)Represents a price-fixing litigation settlement received in relation to products purchased and sold in prior fiscal years.
(3)Represents charges associated with acquisitions, including: (1) the non-cash amortization of definite-lived intangible assets, including customer relationships, tradenames and developed technology; and (2) acquisition-related transaction and due diligence costs, primarily comprised of professional fees.
(4)Represents charges and subsequent adjustments primarily related to actions taken in the Domestic segment to better align the company’s organizational structure with its strategic focus and the decision to exit operations in Mexico in the International segment.
(5)The non-GAAP adjustments primarily relate to the U.S. and Mexico. As such, the income tax charge is generally calculated using the statutory tax rate of 24.5% for U.S. non-GAAP items for all periods presented. There is no income tax charge for Mexico non-GAAP items and a minimal amount of U.S. non-GAAP items, as there was no tax benefit recognized on these expenses in the calculation of GAAP income tax expense.
﻿

 
12

 

 
Return on Assets and Non-GAAP Return on Investment
﻿
The tables below provide calculations of return on assets ("ROA") (GAAP financial measure) and non-GAAP return on investment (“ROI”) (non-GAAP financial measure) for the periods presented. The company believes ROA is the most directly comparable financial measure to ROI. Non-GAAP ROI is defined as non-GAAP adjusted operating income after tax divided by average invested operating assets. All periods presented below apply this methodology consistently. The company believes non-GAAP ROI is a meaningful metric for investors to evaluate capital efficiency because it measures how key assets are deployed by adjusting operating income and total assets for the items noted below. This method of determining non-GAAP ROI may differ from other companies' methods and therefore may not be comparable to those used by other companies.
﻿
﻿	 	 	 	 	 	 	 	
Return on Assets ("ROA")	January 29, 20221	 	January 30, 20211	
Net earnings	$	2,454 	 	 	$	1,798 	 	
Total assets	 	18,743 	 	 	 	18,408 	 	
ROA	 	13.1 	%	 	 	9.8 	%	
﻿	 	 	 	 	 	 	 	
Non-GAAP Return on Investment ("ROI")	January 29, 20221	 	January 30, 20211	
Numerator	 	 	 	 	 	 	 	
Operating income	$	3,039 	 	 	$	2,391 	 	
Add: Non-GAAP operating income adjustments2	 	53 	 	 	 	336 	 	
Add: Operating lease interest3	 	108 	 	 	 	111 	 	
Less: Income taxes4	 	(784)	 	 	 	(695)	 	
Add: Depreciation	 	787 	 	 	 	759 	 	
Add: Operating lease amortization5	 	657 	 	 	 	665 	 	
Adjusted operating income after tax	$	3,860 	 	 	$	3,567 	 	
﻿	 	 	 	 	 	 	 	
Denominator	 	 	 	 	 	 	 	
Total assets	$	18,743 	 	 	$	18,408 	 	
Less: Excess cash6	 	(3,055)	 	 	 	(4,071)	 	
Add: Accumulated depreciation and amortization7	 	6,957 	 	 	 	7,114 	 	
Less: Adjusted current liabilities8	 	(10,122)	 	 	 	(9,189)	 	
Average invested operating assets	$	12,523 	 	 	$	12,262 	 	
﻿	 	 	 	 	 	 	 	
Non-GAAP ROI	 	30.8 	%	 	 	29.1 	%	
	(1)		Income statement accounts represent the activity for the trailing 12 months ended as of each of the balance sheet dates. Balance sheet accounts represent the average account balances for the trailing 12 months ended as of each of the balance sheet dates.	
	(2)		Non-GAAP operating income adjustments include continuing operations adjustments for restructuring charges, intangible asset amortization, acquisition-related transaction costs and price-fixing settlements. Additional details regarding these adjustments are included in the Reconciliation of Non-GAAP Financial Measures schedule in this earnings release.	
	(3)		Operating lease interest represents the add-back to operating income to approximate the total interest expense that the company would incur if its operating leases were owned and financed by debt. The add-back is approximated by multiplying average operating lease assets by 4%, which approximates the interest rate on the company’s operating lease liabilities.	
	(4)		Income taxes are approximated by using a blended statutory rate at the Enterprise level based on statutory rates from the countries in which the company does business, which primarily consists of the U.S. with a statutory rate of 24.5% for the periods presented.	
	(5)		Operating lease amortization represents operating lease cost less operating lease interest. Operating lease cost includes short-term leases, which are immaterial, and excludes variable lease costs as these costs are not included in the operating lease asset balance.	
	(6)		Excess cash represents the amount of cash, cash equivalents and short-term investments greater than $1 billion, which approximates the amount of cash the company believes is necessary to run the business and may fluctuate over time.	
	(7)		Accumulated depreciation and amortization represents accumulated depreciation related to property and equipment and accumulated amortization related to definite-lived intangible assets.	
	(8)		Adjusted current liabilities represent total current liabilities less short-term debt and the current portions of operating lease liabilities and long-term debt.	

 
13

 

 

Free Cash Flow
($ in millions)
(Unaudited and subject to reclassification)
﻿
The table below provides a reconciliation of cash provided by operating activities (GAAP financial measure) to free cash flow (non-GAAP financial measure) for the periods presented. The company believes free cash flow, which measures our ability to generate additional cash from our ongoing business operations, is a relevant supplementary measure for investors in evaluating the company’s financial performance. In addition, it is one factor used by the company in determining the amount of cash available for acquisitions, dividends, share repurchases and other discretionary investments. This method of determining free cash flow may differ from other companies' methods and therefore may not be comparable to those used by other companies.
﻿
﻿	 	 	 	 	 	 	 	
﻿	Twelve Months Ended	
﻿	January 29, 2022	 	January 30, 2021	
Cash provided by operating activities	$	3,252 	 	 	$	4,927 	 	
Less: Additions to property and equipment, net	 	(737)	 	 	 	(713)	 	
Free cash flow	$	2,515 	 	 	$	4,214 	 	
﻿

14