BEST BUY CO INC 10-Q

Item 1. Financial Statements Condensed Consol idated Balance Sheets $ in millions, except per share amounts (unaudited) May 3, 2025 February 1, 2025 May 4, 2024 Assets Current assets Cash and cash equivalents $ 1,147 $ 1,578 $ 1,214 Receivables, net 744 1,044 770 Merchandise inventories 5,194 5,085 5,225 Other current assets 500 517 544 Total current assets 7,585 8,224 7,753 Property and equipment, net 2,089 2,122 2,196 Operating lease assets 2,821 2,833 2,771 Goodwill 908 908 1,383 Other assets 725 695 649 Total assets $ 14,128 $ 14,782 $ 14,752 Liabilities and equity Current liabilities Accounts payable $ 4,670 $ 4,980 $ 4,664 Unredeemed gift card liabilities 246 253 242 Deferred revenue 891 951 923 Accrued compensation and related expenses 367 464 380 Accrued liabilities 617 741 812 Current portion of operating lease liabilities 611 617 613 Current portion of long-term debt 10 10 15 Total current liabilities 7,412 8,016 7,649 Long-term operating lease liabilities 2,277 2,282 2,222 Long-term debt 1,153 1,144 1,134 Long-term liabilities 523 532 665 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 - 211.3 million, 211.4 million and 216.1 million shares, respectively 22 22 22 Additional paid-in capital - - 26 Retained earnings 2,428 2,486 2,722 Accumulated other comprehensive income 313 300 312 Total equity 2,763 2,808 3,082 Total liabilities and equity $ 14,128 $ 14,782 $ 14,752 NOTE: The Consolidated Balance Sheet as of February 1, 2025, 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 May 3, 2025 May 4, 2024 Revenue $ 8,767 $ 8,847 Cost of sales 6,718 6,783 Gross profit 2,049 2,064 Selling, general and administrative expenses 1,721 1,737 Restructuring charges 109 15 Operating income 219 312 Other income (expense): Investment income and other 15 25 Interest expense ( 12 ) ( 12 ) Earnings before income tax expense and equity in income (loss) of affiliates 222 325 Income tax expense 19 80 Equity in income (loss) of affiliates ( 1 ) 1 Net earnings $ 202 $ 246 Basic earnings per share $ 0.95 $ 1.14 Diluted earnings per share $ 0.95 $ 1.13 Weighted-average common shares outstanding: Basic 212.0 216.2 Diluted 213.0 217.2 See Notes to Condensed Consolidated Financial Statements. ‎ 4 Table of Contents Conde nsed Consolidated Statements of Comprehensive Income $ in millions (unaudited) Three Months Ended May 3, 2025 May 4, 2024 Net earnings $ 202 $ 246 Foreign currency translation adjustments, net of tax 13 ( 5 ) Comprehensive income $ 215 $ 241 See Notes to Condensed Consolidated Financial Statements. ‎ 5 Table of Contents Condens ed Consolidated Statements of Cash Flows $ in millions (unaudited) Three Months Ended May 3, 2025 May 4, 2024 Operating activities Net earnings $ 202 $ 246 Adjustments to reconcile net earnings to total cash provided by operating activities: Depreciation and amortization 211 219 Restructuring charges 109 15 Stock-based compensation 40 38 Deferred income taxes ( 51 ) 14 Other, net ( 2 ) ( 2 ) Changes in operating assets and liabilities: Receivables 298 168 Merchandise inventories ( 95 ) ( 273 ) Other assets 7 ( 8 ) Accounts payable ( 330 ) 43 Income taxes 7 13 Other liabilities ( 362 ) ( 317 ) Total cash provided by operating activities 34 156 Investing activities Additions to property and equipment ( 166 ) ( 152 ) Other, net - ( 15 ) Total cash used in investing activities ( 166 ) ( 167 ) Financing activities Repurchase of common stock ( 100 ) ( 50 ) Dividends paid ( 202 ) ( 202 ) Other, net ( 3 ) - Total cash used in financing activities ( 305 ) ( 252 ) Effect of exchange rate changes on cash and cash equivalents 4 ( 3 ) Decrease in cash, cash equivalents and restricted cash ( 433 ) ( 266 ) Cash, cash equivalents and restricted cash at beginning of period 1,868 1,793 Cash, cash equivalents and restricted cash at end of period $ 1,435 $ 1,527 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 February 1, 2025 211.4 $ 22 $ - $ 2,486 $ 300 $ 2,808 Net earnings, three months ended May 3, 2025 - - - 202 - 202 Other comprehensive income: Foreign currency translation adjustments, net of tax - - - - 13 13 Stock-based compensation - - 40 - - 40 Issuance of common stock 1.5 - 2 - - 2 Common stock dividends, $ 0.95 per share - - 6 ( 208 ) - ( 202 ) Repurchase of common stock ( 1.6 ) - ( 48 ) ( 52 ) - ( 100 ) Balances at May 3, 2025 211.3 $ 22 $ - $ 2,428 $ 313 $ 2,763 Balances at February 3, 2024 215.4 $ 22 $ 31 $ 2,683 $ 317 $ 3,053 Net earnings, three months ended May 4, 2024 - - - 246 - 246 Other comprehensive loss: Foreign currency translation adjustments, net of tax - - - - ( 5 ) ( 5 ) Stock-based compensation - - 38 - - 38 Issuance of common stock 1.4 - 4 - - 4 Common stock dividends, $ 0.94 per share - - 5 ( 207 ) - ( 202 ) Repurchase of common stock ( 0.7 ) - ( 52 ) - - ( 52 ) Balances at May 4, 2024 216.1 $ 22 $ 26 $ 2,722 $ 312 $ 3,082 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 terms “Best Buy,” “we,” “us”, “our” and the “company” 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 1, 2025. The first three months of fiscal 2026 and fiscal 2025 each included 13 weeks. In preparing the accompanying condensed consolidated financial statements, we evaluated the period from May 3, 2025, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified. Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disclosure of specific expense categories in the notes to financial statements. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact of the ASU and expect to include updated expense disclosures in our fiscal 2028 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 $ 569 million, $ 398 million and $ 505 million as of May 3, 2025, February 1, 2025, and May 4, 2024, 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): May 3, 2025 February 1, 2025 May 4, 2024 Cash and cash equivalents $ 1,147 $ 1,578 $ 1,214 Restricted cash included in Other current assets 288 290 313 Total cash, cash equivalents and restricted cash $ 1,435 $ 1,868 $ 1,527 Amounts included in restricted cash are primarily restricted to cover product protection plans provided under our membership offerings and self-insurance liabilities. 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. 8 Table of Contents 2. Restructuring Restructuring charges were as follows ($ in millions): Three Months Ended May 3, 2025 May 4, 2024 Best Buy Health Optimization and China Sourcing Initiative $ 111 $ - Fiscal 2024 Restructuring Initiative ( 2 ) 16 Fiscal 2023 Resource Optimization Initiative - ( 1 ) Total $ 109 $ 15 Best Buy Health Optimization and China Sourcing Initiative In the first quarter of fiscal 2026, we commenced a restructuring initiative primarily focused on optimizing our Best Buy Health business by taking actions to maximize value and improve profitability in light of its performance against our original forecasting. These actions include the decision to exit a component of the business within fiscal 2026. In addition, we also made significant changes to reduce our exposure to tariffs, particularly in China. All charges incurred related to this initiative were from continuing operations in our Domestic segment and presented within Restructuring charges on our Condensed Consolidated Statements of Earnings. The composition of restructuring charges incurred related to this initiative were as follows ($ in millions): Three Months Ended May 3, 2025 Asset impairments and other costs (1) $ 73 Termination benefits 38 Total $ 111 (1) Primarily represents the full impairment of net assets related to a component of our Best Buy Health business and other exit costs. The remaining carrying value of net assets approximates fair value and was immaterial as of May 3, 202 5. There were no cash payments related to this initiative during the first quarter of fiscal 2026 and our restructuring accrual liabilities as of May 3, 2025, were $ 66 million, reflecting expected future cash payments primarily during fiscal 2026. We currently do not expect to incur material future restructuring charges related to this initiative . 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. We do not expect to incur material future restructuring charges related to this initiative. 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 Three Months Ended Cumulative Amount May 3, 2025 May 4, 2024 As of May 3, 2025 Domestic $ ( 2 ) $ 17 $ 164 International - ( 1 ) 8 Total $ ( 2 ) $ 16 $ 172 Restructuring accrual activity related to this initiative was as follows ($ in millions): Termination Benefits Domestic International Total Balances at February 1, 2025 $ 80 $ 5 $ 85 Cash payments ( 6 ) - ( 6 ) Adjustments (1) ( 2 ) - ( 2 ) Balances at May 3, 2025 $ 72 $ 5 $ 77 (1) Represents adjustments primarily related to higher-than-expected employee retention from previously planned organizational changes. 9 Table of Contents 3. Goodwill and Intangible Assets Goodwill Goodwill balances by segment were as follows ($ in millions): May 3, 2025 February 1, 2025 May 4, 2024 Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment Gross Carrying Amount Cumulative Impairment Domestic $ 1,450 $ ( 542 ) $ 1,450 $ ( 542 ) $ 1,450 $ ( 67 ) International 608 ( 608 ) 608 ( 608 ) 608 ( 608 ) Total $ 2,058 $ ( 1,150 ) $ 2,058 $ ( 1,150 ) $ 2,058 $ ( 675 ) ‎ In fiscal 2025, we recorded a goodwill impairment of $ 475 million within the Domestic segment for the Best Buy Health reporting unit. The restructuring activity that commenced in the first quarter of fiscal 2026 was a triggering event to evaluate the Best Buy Health reporting unit for impairment. No further goodwill impairment was identified. Refer to Note 2, Restructuring , for additional information. Definite-Lived Intangible Assets We have definite-lived intangible assets recorded within Other assets on our Condensed Consolidated Balance Sheets as follows ($ in millions): May 3, 2025 February 1, 2025 May 4, 2024 Gross Carrying ‎ Amount (1) Accumulated ‎ Amortization (1) Gross Carrying ‎ Amount Accumulated ‎ Amortization Gross Carrying ‎ Amount Accumulated ‎ Amortization Weighted-Average Useful Life Remaining ‎ as of May 3, 2025 (in years) Customer relationships $ 339 $ 282 $ 360 $ 285 $ 360 $ 278 8.2 Tradenames 87 76 92 79 108 72 1.4 Developed technology 56 56 64 61 64 60 - Total $ 482 $ 414 $ 516 $ 425 $ 532 $ 410 7.1 (1) Gross carrying amount and accumulated amortization as of May 3, 2025, excludes $ 34 million and $ 16 million, respectively, of definite-lived intangible assets related to the exit of a component of our Best Buy Health business. See Note 2, Restructuring , for additional information. Amortization expense was as follows ($ in millions): Three Months Ended Statement of Earnings Location May 3, 2025 May 4, 2024 Amortization expense Selling, general and administrative expenses $ 5 $ 6 Amortization expense expected to be recognized in future periods is as follows ($ in millions): Amortization Expense Remainder of fiscal 2026 $ 11 Fiscal 2027 13 Fiscal 2028 8 Fiscal 2029 7 Fiscal 2030 6 Fiscal 2031 5 Thereafter 18 10 Table of Contents 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). 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 May 3, 2025 February 1, 2025 May 4, 2024 Assets Money market funds (2) Cash and cash equivalents Level 1 $ 79 $ 439 $ 234 Time deposits (3) Cash and cash equivalents Level 2 232 150 110 Money market funds (2) Other current assets Level 1 142 140 184 Time deposits (3) Other current assets Level 2 50 50 51 Marketable securities that fund deferred compensation (4) Other assets Level 1 38 39 49 Liabilities Interest rate swap derivative instruments (5) Long-term liabilities Level 2 8 14 27 (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. Nonrecurring Fair Value Measurements In the first quarter of fiscal 2026, we recorded asset impairments and other costs related to our Best Buy Health Optimization and China Sourcing Initiative. Refer to Note 2, Restructuring , 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): May 3, 2025 February 1, 2025 May 4, 2024 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Long-term debt (1) $ 1,043 $ 1,142 $ 1,031 $ 1,136 $ 994 $ 1,123 (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 . ‎ 11 Table of Contents Notional amounts of our derivative instruments were as follows ($ in millions): Contract Type May 3, 2025 February 1, 2025 May 4, 2024 Derivatives designated as net investment hedges $ 119 $ 119 $ 191 Derivatives designated as fair value hedges (interest rate swaps) 500 500 500 No hedge designation (foreign exchange contracts) 54 42 57 Total $ 673 $ 661 $ 748 Effects of our derivative instruments on our Condensed Consolidated Statements of Earnings were as follows ($ in millions): Gain (Loss) Recognized Three Months Ended Statement of Earnings Location May 3, 2025 May 4, 2024 Interest rate swaps Interest expense $ 6 $ ( 15 ) Adjustments to carrying value of long-term debt Interest expense ( 6 ) 15 Total $ - $ - 6. Debt Short-Term Debt U.S. Revolving Credit Facility On April 18, 2025, we entered into a $ 1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks. The Five-Year Facility Agreement replaced the previous $ 1.25 billion senior unsecured revolving credit facility (the “Previous Facility”) with a syndicate of banks, which was entered into April 2023 and scheduled to expire April 2028, but was terminated on April 18, 2025. The Five-Year Facility Agreement permits borrowings of up to $ 1.25 billion and expires in April 2030. There were no borrowings outstanding under the Five-Year Facility Agreement as of May 3, 2025, or the Previous Facility as of February 1, 2025, or May 4, 2024. The interest rate under the Five-Year Facility Agreement is variable and is determined at our option as: (i) the sum of (a) the greatest of (1) U.S. Bank National Association’s prime rate, (2) the greater of the federal funds effective rate and the overnight bank funding rate plus, in each case, 0.5 %, and (3) Adjusted Term Secured Overnight Financing Rate (the “Adjusted Term SOFR”) for an interest period of one month plus 1 %, and (b) a variable margin rate (the “ABR Margin”); or (ii) Adjusted Term SOFR for the applicable interest period plus a variable margin rate (the “Term SOFR Margin”). In addition, a facility fee is assessed on the commitment amount. The ABR Margin, Term SOFR Margin and the facility fee are based upon our current senior unsecured debt rating. Under the Five-Year Facility Agreement, the ABR Margin ranges from 0.000 % to 0.015 %, the Term SOFR Margin ranges from 0.565 % to 1.015 %, and the facility fee ranges from 0.060 % to 0.110 %. The Five-Year Facility Agreement is guaranteed by certain of our subsidiaries and contains customary affirmative and negative covenants. Among other things, these covenants restrict our and certain of our subsidiaries’ abilities to incur liens on certain assets; make material changes in corporate structure or the nature of our business; dispose of material assets; engage in certain mergers, consolidations and certain other fundamental changes; or engage in certain transactions with affiliates. The Five-Year Facility Agreement also contains a covenant that requires the registrant to maintain a maximum quarterly cash flow leverage ratio. The Five-Year Facility Agreement contains customary default provisions, including, but not limited to, failure to pay interest or principal when due and failure to comply with covenants. Long-Term Debt Long-term debt consisted of the following ($ in millions): May 3, 2025 February 1, 2025 May 4, 2024 Notes, 4.45 %, due October 1, 2028 ("2028 Notes") $ 500 $ 500 $ 500 Notes, 1.95 %, due October 1, 2030 ("2030 Notes") 650 650 650 Interest rate swap valuation adjustments ( 8 ) ( 14 ) ( 27 ) Subtotal 1,142 1,136 1,123 Debt discounts and issuance costs ( 6 ) ( 7 ) ( 8 ) Finance lease obligations 27 25 34 Total long-term debt 1,163 1,154 1,149 Less current portion 10 10 15 Total long-term debt, less current portion $ 1,153 $ 1,144 $ 1,134 Fair Value and Future Maturities See Note 4, Fair Value Measurements , for the fair value of long-term debt. Both the 2028 Notes and the 2030 Notes mature within the next five fiscal years. 12 Table of Contents 7. Revenue We generate substantially all of our revenue from contracts with customers from the sale of products and services. Contract balances primarily relate to unfulfilled membership benefits and services not yet completed, product merchandise not yet delivered to customers, unredeemed gift cards and deferred revenue from our private label and co-branded credit card arrangement. Contract balances were as follows ($ in millions): May 3, 2025 February 1, 2025 May 4, 2024 Receivables, net (1) $ 461 $ 504 $ 453 Short-term contract liabilities included in: Unredeemed gift card liabilities 246 253 242 Deferred revenue 891 951 923 Accrued liabilities 59 50 57 Long-term contract liabilities included in: Long-term liabilities 221 229 239 (1) Receivables are recorded net of allowances for expected credit losses of $ 15 million, $ 20 million and $ 17 million as of May 3, 2025, February 1, 2025, and May 4, 2024, respectively. During the first three months of fiscal 2026 and fiscal 2025, $ 614 million and $ 642 million of revenue was recognized, respectively, that was included in the contract liabilities at the beginning of the respective periods. 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 2026 $ 24 Fiscal 2027 33 Fiscal 2028 29 Fiscal 2029 26 Fiscal 2030 26 Fiscal 2031 26 Thereafter 89 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 the potentially dilutive common shares been issued as calculated using the treasury stock method. 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 May 3, 2025 May 4, 2024 Numerator Net earnings $ 202 $ 246 Denominator Weighted-average common shares outstanding 212.0 216.2 Dilutive effect of stock compensation plan awards 1.0 1.0 Weighted-average common shares outstanding, assuming dilution 213.0 217.2 Potential shares which were anti-dilutive and excluded from weighted-average share computations 0.3 0.6 Basic earnings per share $ 0.95 $ 1.14 Diluted earnings per share $ 0.95 $ 1.13 13 Table of Contents 9. Repurchase of Common Stock On February 28, 2022, our Board of Directors approved a $ 5.0 billion share repurchase program. The program had $ 3.2 billion remaining available for repurchases as of May 3, 2025. There is no expiration date governing the period over which we can repurchase shares under this authorization . Information regarding the shares we repurchased and retired was as follows ($ and shares in millions, except per share amounts): Three Months Ended May 3, 2025 May 4, 2024 Total cost of shares repurchased $ 100 $ 52 Average price per share $ 64.39 $ 77.81 Number of shares repurchased and retired 1.6 0.7 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. 11. Segments Segment and category revenue information was as follows ($ in millions): Three Months Ended May 3, 2025 May 4, 2024 Domestic: Computing and Mobile Phones $ 3,792 $ 3,588 Consumer Electronics 2,237 2,364 Appliances 1,001 1,090 Entertainment 449 520 Services 579 578 Other 69 63 Total Domestic revenue $ 8,127 $ 8,203 International: Computing and Mobile Phones $ 324 $ 318 Consumer Electronics 173 173 Appliances 57 60 Entertainment 42 46 Services 37 39 Other 7 8 Total International revenue 640 644 Total revenue $ 8,767 $ 8,847 ‎ 14 Table of Contents Adjusted operating income by segment and the reconciliation to consolidated earnings before income tax expense and equity in income (loss) of affiliates were as follows ($ in millions): Three Months Ended May 3, 2025 May 4, 2024 Domestic (1) International Total Domestic (1) International Total Revenue $ 8,127 $ 640 $ 8,767 $ 8,203 $ 644 $ 8,847 Cost of sales 6,219 499 6,718 6,286 497 6,783 Adjusted SG&A (2) 1,579 137 1,716 1,592 139 1,731 Adjusted operating income $ 329 $ 4 $ 333 $ 325 $ 8 $ 333 Restructuring charges 109 15 Intangible asset amortization 5 6 Operating income 219 312 Other income (expense): Investment income and other 15 25 Interest expense ( 12 ) ( 12 ) Earnings before income tax expense and equity in income (loss) of affiliates $ 222 $ 325 (1) Domestic segment adjusted operating income includes certain operations that are based in foreign tax jurisdictions and primarily relate to sourcing products into the U.S. (2) Adjusted SG&A excludes amortization of definite-lived intangible assets associated with acquisitions. Other information by segment was as follows ($ in millions): Three Months Ended May 3, 2025 May 4, 2024 Assets Domestic $ 12,835 $ 13,483 International 1,293 1,269 Total assets $ 14,128 $ 14,752 Capital expenditures Domestic $ 150 $ 138 International 16 14 Total capital expenditures $ 166 $ 152 Depreciation and amortization Domestic $ 201 $ 209 International 10 10 Total depreciation and amortization $ 211 $ 219 ‎ 15 Table of Contents