BEST BUY CO INC 10-Q

Item 1. Financial Statements Condensed Consol idated Balance Sheets $ in millions, except per share amounts (unaudited) August 3, 2024 February 3, 2024 July 29, 2023 Assets Current assets Cash and cash equivalents $ 1,387 $ 1,447 $ 1,093 Receivables, net 871 939 856 Merchandise inventories 5,706 4,958 5,651 Other current assets 598 553 704 Total current assets 8,562 7,897 8,304 Property and equipment, net 2,183 2,260 2,305 Operating lease assets 2,860 2,758 2,813 Goodwill 1,383 1,383 1,383 Other assets 636 669 513 Total assets $ 15,624 $ 14,967 $ 15,318 Liabilities and equity Current liabilities Accounts payable $ 5,542 $ 4,637 $ 5,471 Unredeemed gift card liabilities 243 253 250 Deferred revenue 940 1,000 996 Accrued compensation and related expenses 347 486 377 Accrued liabilities 756 902 709 Current portion of operating lease liabilities 610 618 615 Current portion of long-term debt 13 13 15 Total current liabilities 8,451 7,909 8,433 Long-term operating lease liabilities 2,316 2,199 2,254 Long-term debt 1,157 1,152 1,145 Long-term liabilities 593 654 651 Contingencies (Note 10) Equity Best Buy Co., Inc. Shareholders' Equity Preferred stock, $ 1.00 par value: Authorized - 400,000 shares; Issued and outstanding - none - - - Common stock, $ 0.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 215.0 million, 215.4 million and 217.9 million shares, respectively 22 22 22 Additional paid-in capital - 31 - Retained earnings 2,775 2,683 2,491 Accumulated other comprehensive income 310 317 322 Total equity 3,107 3,053 2,835 Total liabilities and equity $ 15,624 $ 14,967 $ 15,318 NOTE: The Consolidated Balance Sheet as of February 3, 2024, has been condensed from the audited consolidated financial statements. See Notes to Condensed Consolidated Financial Statements . ‎ 3 Table of Contents Condensed Consolidated Statements of Earnings $ and shares in millions, except per share amounts (unaudited) Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Revenue $ 9,288 $ 9,583 $ 18,135 $ 19,050 Cost of sales 7,102 7,363 13,885 14,680 Gross profit 2,186 2,220 4,250 4,370 Selling, general and administrative expenses 1,810 1,879 3,547 3,727 Restructuring charges ( 7 ) ( 7 ) 8 ( 16 ) Operating income 383 348 695 659 Other income (expense): Gain on sale of subsidiary, net - 21 - 21 Investment income and other 21 12 46 33 Interest expense ( 13 ) ( 12 ) ( 25 ) ( 24 ) Earnings before income tax expense and equity in income of affiliates 391 369 716 689 Income tax expense 101 96 181 171 Equity in income of affiliates 1 1 2 - Net earnings $ 291 $ 274 $ 537 $ 518 Basic earnings per share $ 1.35 $ 1.25 $ 2.49 $ 2.37 Diluted earnings per share $ 1.34 $ 1.25 $ 2.47 $ 2.36 Weighted-average common shares outstanding: Basic 216.0 218.6 216.1 218.7 Diluted 217.1 219.0 217.2 219.5 See Notes to Condensed Consolidated Financial Statements. ‎ 4 Table of Contents Conde nsed Consolidated Statements of Comprehensive Income $ in millions (unaudited) Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Net earnings $ 291 $ 274 $ 537 $ 518 Foreign currency translation adjustments, net of tax ( 2 ) 5 ( 7 ) - Comprehensive income $ 289 $ 279 $ 530 $ 518 See Notes to Condensed Consolidated Financial Statements. ‎ 5 Table of Contents Condens ed Consolidated Statements of Cash Flows $ in millions (unaudited) Six Months Ended August 3, 2024 July 29, 2023 Operating activities Net earnings $ 537 $ 518 Adjustments to reconcile net earnings to total cash provided by operating activities: Depreciation and amortization 437 473 Restructuring charges 8 ( 16 ) Stock-based compensation 74 75 Gain on sale of subsidiary, net - ( 21 ) Other, net 12 2 Changes in operating assets and liabilities: Receivables 66 289 Merchandise inventories ( 761 ) ( 508 ) Other assets ( 11 ) ( 32 ) Accounts payable 904 ( 206 ) Income taxes ( 183 ) ( 148 ) Other liabilities ( 266 ) ( 245 ) Total cash provided by operating activities 817 181 Investing activities Additions to property and equipment ( 335 ) ( 395 ) Net proceeds from sale of subsidiary - 14 Other, net ( 17 ) - Total cash used in investing activities ( 352 ) ( 381 ) Financing activities Repurchase of common stock ( 148 ) ( 158 ) Dividends paid ( 405 ) ( 402 ) Other, net ( 4 ) - Total cash used in financing activities ( 557 ) ( 560 ) Effect of exchange rate changes on cash and cash equivalents ( 3 ) ( 2 ) Decrease in cash, cash equivalents and restricted cash ( 95 ) ( 762 ) Cash, cash equivalents and restricted cash at beginning of period 1,793 2,253 Cash, cash equivalents and restricted cash at end of period $ 1,698 $ 1,491 See Notes to Condensed Consolidated Financial Statements. ‎ 6 Table of Contents Condensed Consolidated Statements of Changes in Shareholders' Equity $ and shares in millions, except per share amounts (unaudited) Common Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Balances at May 4, 2024 216.1 $ 22 $ 26 $ 2,722 $ 312 $ 3,082 Net earnings, three months ended August 3, 2024 - - - 291 - 291 Other comprehensive loss: Foreign currency translation adjustments, net of tax - - - - ( 2 ) ( 2 ) Stock-based compensation - - 36 - - 36 Issuance of common stock - - 1 - - 1 Common stock dividends, $ 0.94 per share - - 4 ( 207 ) - ( 203 ) Repurchase of common stock ( 1.1 ) - ( 67 ) ( 31 ) - ( 98 ) Balances at August 3, 2024 215.0 $ 22 $ - $ 2,775 $ 310 $ 3,107 Balances at February 3, 2024 215.4 $ 22 $ 31 $ 2,683 $ 317 $ 3,053 Net earnings, six months ended August 3, 2024 - - - 537 - 537 Other comprehensive loss: Foreign currency translation adjustments, net of tax - - - - ( 7 ) ( 7 ) Stock-based compensation - - 74 - - 74 Issuance of common stock 1.4 - 5 - - 5 Common stock dividends, $ 1.88 per share - - 9 ( 414 ) - ( 405 ) Repurchase of common stock ( 1.8 ) - ( 119 ) ( 31 ) - ( 150 ) Balances at August 3, 2024 215.0 $ 22 $ - $ 2,775 $ 310 $ 3,107 Balances at April 29, 2023 218.5 $ 22 $ - $ 2,454 $ 317 $ 2,793 Net earnings, three months ended July 29, 2023 - - - 274 - 274 Other comprehensive income: Foreign currency translation adjustments, net of tax - - - - 5 5 Stock-based compensation - - 37 - - 37 Issuance of common stock 0.3 - 6 - - 6 Common stock dividends, $ 0.92 per share - - 3 ( 204 ) - ( 201 ) Repurchase of common stock ( 0.9 ) - ( 46 ) ( 33 ) - ( 79 ) Balances at July 29, 2023 217.9 $ 22 $ - $ 2,491 $ 322 $ 2,835 Balances at January 28, 2023 218.1 $ 22 $ 21 $ 2,430 $ 322 $ 2,795 Net earnings, six months ended July 29, 2023 - - - 518 - 518 Stock-based compensation - - 75 - - 75 Issuance of common stock 1.8 - 10 - - 10 Common stock dividends, $ 1.84 per share - - 7 ( 410 ) - ( 403 ) Repurchase of common stock ( 2.0 ) - ( 113 ) ( 47 ) - ( 160 ) Balances at July 29, 2023 217.9 $ 22 $ - $ 2,491 $ 322 $ 2,835 See Notes to Condensed Consolidated Financial Statements. ‎ 7 Table of Contents Notes to Condensed Consolidated Financial Statements (unaudited) 1. Basis of Presentation Unless the context otherwise requires, the use of the terms “Best Buy,” “we,” “us” and “our” in these Notes to Condensed Consolidated Financial Statements refers to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the U.S. (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements. A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping season. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The interim financial statements and the related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024. The first six months of fiscal 2025 and fiscal 2024 each included 26 weeks. In preparing the accompanying condensed consolidated financial statements, we evaluated the period from August 3, 2024, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified. Sale of Subsidiary In the second quarter of fiscal 2024, we completed the sale of a Mexico subsidiary subsequent to our exit from operations in Mexico and recognized a $ 21 million gain within Gain on sale of subsidiary, net on our Condensed Consolidated Statements of Earnings for the three and six months ended July 29, 2023. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which enhances reportable segment disclosure requirements primarily through expanded disclosures around significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of the ASU and expect to include updated segment expense disclosures in our fiscal 2025 Form 10-K. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires disclosure of specific categories meeting a quantitative threshold within the income tax rate reconciliation, as well as disaggregation of income taxes paid by jurisdiction. This ASU, which can be applied either prospectively or retrospectively, is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of the ASU and expect to include updated income tax disclosures in our fiscal 2026 Form 10-K. Supply Chain Financing We have a supply chain financing program with an independent financial institution, whereby some of our suppliers have the opportunity to receive accounts payable settlements early, at a discount, facilitated by the financial institution. Our liability associated with the funded participation in the program, which is primarily included in Accounts payable on our Condensed Consolidated Balance Sheets, was $ 729 million, $ 426 million and $ 609 million as of August 3, 2024, February 3, 2024, and July 29, 2023, respectively. Total Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the total shown on our Condensed Consolidated Statements of Cash Flows as follows ($ in millions): August 3, 2024 February 3, 2024 July 29, 2023 Cash and cash equivalents $ 1,387 $ 1,447 $ 1,093 Restricted cash included in Other current assets 311 346 398 Total cash, cash equivalents and restricted cash $ 1,698 $ 1,793 $ 1,491 Amounts included in restricted cash are primarily restricted to cover product protection plans provided under our membership offerings and self-insurance liabilities. 8 Table of Contents Reclassification Certain reclassifications of immaterial amounts previously reported have been made to the accompanying Condensed Consolidated Statements of Cash Flows to maintain consistency and comparability between periods presented. 2. Restructuring Restructuring charges were as follows ($ in millions): Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Fiscal 2024 Restructuring Initiative $ ( 6 ) $ - $ 10 $ - Fiscal 2023 Resource Optimization Initiative ( 1 ) ( 7 ) ( 2 ) ( 16 ) Total $ ( 7 ) $ ( 7 ) $ 8 $ ( 16 ) Fiscal 2024 Restructuring Initiative During the fourth quarter of fiscal 2024, we commenced an enterprise-wide restructuring initiative intended to accomplish the following: (1) align field labor resources with where customers want to shop to optimize the customer experience; (2) redirect corporate resources for better alignment with our strategy; and (3) right-size resources to better align with our revenue outlook for fiscal 2025. All charges incurred related to this initiative were comprised of employee termination benefits from continuing operations and were presented within Restructuring charges on our Condensed Consolidated Statements of Earnings as follows ($ in millions): Three Months Ended Six Months Ended Cumulative Amount August 3, 2024 August 3, 2024 As of August 3, 2024 Domestic $ ( 7 ) $ 10 $ 173 International 1 - 8 Total $ ( 6 ) $ 10 $ 181 Restructuring accrual activity related to this initiative was as follows ($ in millions): Termination Benefits Domestic International Total Balances at February 3, 2024 $ 163 $ 8 $ 171 Charges 17 1 18 Cash payments ( 66 ) ( 1 ) ( 67 ) Adjustments (1) ( 7 ) ( 1 ) ( 8 ) Balances at August 3, 2024 $ 107 $ 7 $ 114 (1) Represents adjustments primarily related to higher-than-expected employee retention from previously planned organizational changes. We do not expect to incur material future restructuring charges related to this initiative. Fiscal 2023 Resource Optimization Initiative During the second quarter of fiscal 2023, we commenced an enterprise-wide initiative to better align our spending with critical strategies and operations, as well as to optimize our cost structure. All charges incurred related to this initiative were comprised of employee termination benefits from continuing operations and were presented within Restructuring charges on our Condensed Consolidated Statements of Earnings. We recorded reductions to employee termination benefits in all periods presented, primarily within our Domestic segment, related to higher-than-expected employee retention. Cumulative charges incurred related to this initiative as of August 3, 2024, were $ 125 million, comprised of $ 122 million and $ 3 million within our Domestic and International segments, respectively. We do not expect to incur material future restructuring charges related to this initiative, and no material liability remains as of August 3, 2024. 9 Table of Contents 3. Goodwill and Intangible Assets Goodwill Goodwill balances were as follows as of August 3, 2024, February 3, 2024, and July 29, 2023 ($ in millions): Gross Carrying Amount Cumulative Impairment Domestic $ 1,450 $ ( 67 ) International 608 ( 608 ) Total $ 2,058 $ ( 675 ) No impairment charges were recorded during the periods presented. Indefinite-Lived Intangible Assets In the second quarter of fiscal 2025, we reclassified our Yardbird tradename from a definite-lived intangible asset to an indefinite-lived intangible asset to better reflect our expectations of the long-term use of the tradename. The carrying value of the tradename was $ 16 million as of August 3, 2024, and was recorded within Other assets on our Consolidated Balance Sheets. Definite-Lived Intangible Assets We have definite-lived intangible assets recorded within Other assets on our Condensed Consolidated Balance Sheets as follows ($ in millions): August 3, 2024 February 3, 2024 July 29, 2023 Gross Carrying ‎ Amount Accumulated ‎ Amortization Gross Carrying ‎ Amount Accumulated ‎ Amortization Gross Carrying ‎ Amount Accumulated ‎ Amortization Weighted-Average Useful Life Remaining ‎ as of August 3, 2024 (in years) Customer relationships $ 360 $ 280 $ 360 $ 276 $ 360 $ 264 9.6 Tradenames 92 75 108 69 108 63 2.2 Developed technology 64 60 64 59 64 57 3.3 Total $ 516 $ 415 $ 532 $ 404 $ 532 $ 384 8.1 Amortization expense was as follows ($ in millions): Three Months Ended Six Months Ended Statement of Earnings Location August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Amortization expense Selling, general and administrative expenses $ 5 $ 21 $ 11 $ 41 Amortization expense expected to be recognized in future periods is as follows ($ in millions): Amortization Expense Remainder of fiscal 2025 $ 9 Fiscal 2026 18 Fiscal 2027 16 Fiscal 2028 10 Fiscal 2029 8 Fiscal 2030 7 Thereafter 33 4 . Fair Value Measurements Fair value measurements are reported in one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). 10 Table of Contents Recurring Fair Value Measurements Financial assets and liabilities accounted for at fair value were as follows ($ in millions): Fair Value as of Balance Sheet Location (1) Fair Value Hierarchy August 3, 2024 February 3, 2024 July 29, 2023 Assets Money market funds (2) Cash and cash equivalents Level 1 $ 212 $ 330 $ 104 Time deposits (3) Cash and cash equivalents Level 2 136 60 117 Money market funds (2) Other current assets Level 1 147 182 167 Time deposits (3) Other current assets Level 2 51 50 60 Marketable securities that fund deferred compensation (4) Other assets Level 1 38 48 47 Liabilities Interest rate swap derivative instruments (5) Long-term liabilities Level 2 2 11 20 (1) Balance sheet location is determined by the length to maturity at date of purchase and whether the assets are restricted for particular use. (2) Valued at quoted market prices in active markets at period end. (3) Valued at face value plus accrued interest at period end, which approximates fair value. (4) Valued using the performance of mutual funds that trade with sufficient frequency and volume to obtain pricing information on an ongoing basis. (5) Valued using readily observable market inputs. These instruments are custom, over-the-counter contracts with various bank counterparties that are not traded on an active market. See Note 5, Derivative Instruments , for additional information. Fair Value of Financial Instruments The fair values of cash, certain restricted cash, receivables, accounts payable and other payables approximated their carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. Fair values for other investments held at cost are not readily available, but we estimate that the carrying values for these investments approximate their fair values. Long-term debt is presented at carrying value on our Condensed Consolidated Balance Sheets. If our long-term debt were recorded at fair value, it would be classified as Level 2 in the fair value hierarchy. Long-term debt balances were as follows ($ in millions): August 3, 2024 February 3, 2024 July 29, 2023 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Long-term debt (1) $ 1,058 $ 1,148 $ 1,022 $ 1,139 $ 991 $ 1,130 (1) Excludes debt discou nts, issuance costs and finance lease obligations. 5. Derivative Instruments We manage our economic and transaction exposure to certain risks by using foreign exchange forward contracts to hedge against the effect of Canadian dollar exchange rate fluctuations on a portion of our net investment in our Canadian operations and by using interest rate swaps to mitigate interest rate risk on our $ 500 million of principal amount of notes due October 1, 2028. In addition, we use foreign currency forward contracts not designated as hedging instruments to manage the impact of fluctuations in foreign currency exchange rates relative to recognized receivable and payable balances denominated in non-functional currencies. Our derivative instruments designated as net investment hedges and fair value hedges are recorded on our Condensed Consolidated Balance Sheets at fair value. The gross fair values of our outstanding derivative instruments and corresponding fair value classifications are included in Note 4, Fair Value Measurements . Notional amounts of our derivative instruments were as follows ($ in millions): Contract Type August 3, 2024 February 3, 2024 July 29, 2023 Derivatives designated as net investment hedges $ 103 $ 100 $ 102 Derivatives designated as fair value hedges (interest rate swaps) 500 500 500 No hedge designation (foreign exchange contracts) 59 66 50 Total $ 662 $ 666 $ 652 11 Table of Contents Effects of our derivative instruments on our Condensed Consolidated Statements of Earnings were as follows ($ in millions): Gain (Loss) Recognized Three Months Ended Six Months Ended Statement of Earnings Location August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Interest rate swaps Interest expense $ 24 $ ( 10 ) $ 9 $ ( 14 ) Adjustments to carrying value of long-term debt Interest expense ( 24 ) 10 ( 9 ) 14 Total $ - $ - $ - $ - 6. Debt Short-Term Debt U.S. Revolving Credit Facility We have a $ 1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks that expires in April 2028. There were no borrowings outstanding under the Five-Year Facility Agreement as of August 3, 2024, February 3, 2024, or July 29, 2023. Long-Term Debt Long-term debt consisted of the following ($ in millions): August 3, 2024 February 3, 2024 July 29, 2023 Notes, 4.45 %, due October 1, 2028 $ 500 $ 500 $ 500 Notes, 1.95 %, due October 1, 2030 650 650 650 Interest rate swap valuation adjustments ( 2 ) ( 11 ) ( 20 ) Subtotal 1,148 1,139 1,130 Debt discounts and issuance costs ( 7 ) ( 8 ) ( 9 ) Finance lease obligations 29 34 39 Total long-term debt 1,170 1,165 1,160 Less current portion 13 13 15 Total long-term debt, less current portion $ 1,157 $ 1,152 $ 1,145 Fair Value and Future Maturities See Note 4, Fair Value Measurements , for the fair value of long-term debt. Other than the $ 500 million of principal amount of notes due October 1, 2028, we do no t have any future maturities of long-term debt within the next five fiscal years. 7. Revenue We generate substantially all of our revenue from contracts with customers from the sale of products and services. Contract balances primarily consist of receivables and liabilities related to unfulfilled membership benefits and services not yet completed, product merchandise not yet delivered to customers, deferred revenue from our private label and co-branded credit card arrangement and unredeemed gift cards. Contract balances were as follows ($ in millions): August 3, 2024 February 3, 2024 July 29, 2023 Receivables, net (1) $ 474 $ 512 $ 485 Short-term contract liabilities included in: Unredeemed gift card liabilities 243 253 250 Deferred revenue 940 1,000 996 Accrued liabilities 64 53 64 Long-term contract liabilities included in: Long-term liabilities 233 245 254 (1) Receivables are recorded net of allowances for expected credit losses of $ 16 million, $ 23 million and $ 18 million as of August 3, 2024, February 3, 2024, and July 29, 2023, respectively. During the first six months of fiscal 2025 and fiscal 2024, $ 893 million and $ 1,026 million of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods. 12 Table of Contents Estimated revenue from our contract liability balances expected to be recognized in future periods if the performance of the contract is expected to have an initial duration of more than one year is as follows ($ in millions): Fiscal Year Amount Remainder of fiscal 2025 $ 17 Fiscal 2026 33 Fiscal 2027 27 Fiscal 2028 25 Fiscal 2029 25 Fiscal 2030 25 Thereafter 112 See Note 11, Segments , for information on our revenue by reportable segment and product category. 8. Earnings per Share We compute our basic earnings per share based on the weighted-average number of common shares outstanding and our diluted earnings per share based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had potentially dilutive common shares been issued. Reconciliations of the numerators and denominators of basic and diluted earnings per share were as follows ($ and shares in millions, except per share amounts): Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Numerator Net earnings $ 291 $ 274 $ 537 $ 518 Denominator Weighted-average common shares outstanding 216.0 218.6 216.1 218.7 Dilutive effect of stock compensation plan awards 1.1 0.4 1.1 0.8 Weighted-average common shares outstanding, assuming dilution 217.1 219.0 217.2 219.5 Potential shares which were anti-dilutive and excluded from weighted-average share computations - 1.1 - 1.3 Basic earnings per share $ 1.35 $ 1.25 $ 2.49 $ 2.37 Diluted earnings per share $ 1.34 $ 1.25 $ 2.47 $ 2.36 9. Repurchase of Common Stock On February 28, 2022, our Board of Directors approved a $ 5.0 billion share repurchase program. There is no expiration date governing the period over which we can repurchase shares under this authorization . Information regarding share repurchases was as follows ($ and shares in millions, except per share amounts): Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Total cost of shares repurchased $ 98 $ 69 $ 150 $ 150 Average price per share $ 82.57 $ 76.88 $ 80.86 $ 76.48 Total number of shares repurchased 1.1 0.9 1.8 2.0 As of August 3, 2024, $ 3.6 billion of the $ 5.0 billion share repurchase authorization was available. Between the end of the second quarter of fiscal 2025 on August 3, 2024, and September 4, 2024, we repurchased an incremental 0.4 million shares of our common stock at a cost of $ 39 million. We currently expect total share repurchases of approximately $ 500 million in fiscal 2025. 10. Contingencies We are involved in a number of legal proceedings. Where appropriate, we have made accruals with respect to these matters, which are reflected on our Condensed Consolidated Financial Statements. However, there are cases where liability is not probable or the amount cannot be reasonably estimated and, therefore, accruals have not been made. We provide disclosure of matters where we believe it is reasonably possible the impact may be material to our Condensed Consolidated Financial Statements. 13 Table of Contents 11. Segments Reportable segment and product category revenue information was as follows ($ in millions): Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Revenue by reportable segment Domestic $ 8,623 $ 8,890 $ 16,826 $ 17,691 International 665 693 1,309 1,359 Total revenue $ 9,288 $ 9,583 $ 18,135 $ 19,050 Revenue by product category Domestic: Computing and Mobile Phones $ 3,792 $ 3,674 $ 7,380 $ 7,362 Consumer Electronics 2,478 2,658 4,842 5,250 Appliances 1,177 1,384 2,267 2,723 Entertainment 498 544 1,018 1,135 Services 590 550 1,168 1,087 Other 88 80 151 134 Total Domestic revenue $ 8,623 $ 8,890 $ 16,826 $ 17,691 International: Computing and Mobile Phones $ 308 $ 309 $ 626 $ 625 Consumer Electronics 186 194 359 378 Appliances 86 92 146 151 Entertainment 39 50 85 110 Services 38 38 77 74 Other 8 10 16 21 Total International revenue $ 665 $ 693 $ 1,309 $ 1,359 Operating income by reportable segment and the reconciliation to consolidated earnings before income tax expense and equity in income of affiliates was as follows ($ in millions): Three Months Ended Six Months Ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Domestic $ 367 $ 329 $ 670 $ 619 International 16 19 25 40 Total operating income 383 348 695 659 Other income (expense): Gain on sale of subsidiary, net - 21 - 21 Investment income and other 21 12 46 33 Interest expense ( 13 ) ( 12 ) ( 25 ) ( 24 ) Earnings before income tax expense and equity in income of affiliates $ 391 $ 369 $ 716 $ 689 Assets by reportable segment were as follows ($ in millions): August 3, 2024 February 3, 2024 July 29, 2023 Domestic $ 14,471 $ 13,660 $ 14,028 International 1,153 1,307 1,290 Total assets $ 15,624 $ 14,967 $ 15,318 14 Table of Contents