Best Buy 2011 Annual Report Download - page 66

Long-term investments in debt securities
At February 26, 2011, our long-term investments in debt securities were comprised of ARS. These investments are not
subject to material interest rate risk. A hypothetical 100-basis-point change in the interest rate on such investments at
February 26, 2011, and February 27, 2010, would change our annual pre-tax earnings by $1 million and $3 million,
respectively. We do not manage interest rate risk on our investments in debt securities through the use of derivative
instruments.
Other Market Risks
Investments in auction rate securities
At February 26, 2011, we held $110 million in investments in ARS, which includes a $5 million pre-tax temporary
impairment, compared to $280 million in investments in ARS and a $5 million pre-tax temporary impairment at
February 27, 2010. Given current conditions in the ARS market as described above in the Liquidity and Capital Resources
section, included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of
this Annual Report on Form 10-K, we may incur additional temporary unrealized losses or other-than-temporary realized
losses in the future if market conditions were to persist and we were unable to recover the cost of our ARS investments. A
hypothetical 100-basis-point loss from the par value of these investments at February 26, 2011, and February 27, 2010,
would result in an impairment of $1 million and $3 million, respectively.
Item 8. Financial Statements and Supplementary Data.
Management’s Report on the Consolidated Financial Statements
Our management is responsible for the preparation, integrity and objectivity of the accompanying consolidated financial
statements and the related financial information. The consolidated financial statements have been prepared in conformity
with GAAP and necessarily include certain amounts that are based on estimates and informed judgments. Our
management also prepared the related financial information included in this Annual Report on Form 10-K and is
responsible for its accuracy and consistency with the consolidated financial statements.
The accompanying consolidated financial statements have been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, which conducted its audits in accordance with the standards of the Public Company
Accounting Oversight Board (U.S.). The independent registered public accounting firm’s responsibility is to express an
opinion as to the fairness with which such financial statements present our financial position, results of operations and
cash flows in accordance with GAAP.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed under the
supervision of our principal executive officer and principal financial officer, and effected by our Board, management and
other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP, and includes those policies and procedures that:
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the
dispositions of our assets;
(2) Provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with
authorizations of our management and Board; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on our financial statements.
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