Company: BBY
Filing Date: 2025-09-05
Form Type: 10-Q
Source: 0000764478-25-000040
Chunk: 84

Company: BEST BUY CO INC
Filing Date: 2025-09-05
Form: 10-Q
Item: Part II, Item 2
Chunk 84
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 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 MeasurementsIn the second quarter and first six months of fiscal 2026, we recorded asset impairments and other costs as a result of restructuring initiatives that commenced in the first and second quarters of fiscal 2026. These fair value remeasurements were based on significant unobservable inputs (Level 3). Refer to Note 2, Restructuring, for additional information.Fair Value of Financial InstrumentsThe 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 2, 2025February 1, 2025August 3, 2024Fair ValueCarrying ValueFair ValueCarrying ValueFair ValueCarrying ValueLong-term debt(1)$1,077$1,150$1,031$1,136$1,058$1,148(1)Excludes debt discounts, 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