Best Buy 2005 Annual Report Download - page 78

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Notes to Consolidated Financial Statements
$ in millions, except per share amounts
Basis of Presentation
1. Summary of Significant Accounting Policies
The consolidated financial statements include the accounts
Description of Business
of Best Buy Co., Inc. and its subsidiaries.
Best Buy Co., Inc. is a specialty retailer of consumer
We have eliminated all intercompany accounts and
electronics, home-office products, entertainment software,
transactions. All subsidiaries are wholly owned.
appliances and related services, with fiscal 2005 revenue
from continuing operations of $27.4 billion. Reclassifications
We operate two reportable segments: Domestic and
To maintain consistency and comparability, certain
International. The Domestic segment is comprised of U.S.
amounts from previously reported consolidated financial
Best Buy and Magnolia Audio Video operations. U.S. Best
statements have been reclassified to conform to the
Buy stores offer a wide variety of consumer electronics,
current-year presentation.
home-office equipment, entertainment software,
appliances and related services. At February 26, 2005, In the fourth quarter of fiscal 2005, we reclassified certain
we operated 668 U.S. Best Buy stores in 48 states and transportation and distribution costs from selling, general
the District of Columbia. Magnolia Audio Video stores and administrative expenses (SG&A) to cost of goods
offer high-end audio and video products and related sold. Prior periods have been reclassified to conform to
services. At February 26, 2005, we operated 20 the current-year presentation.
Magnolia Audio Video stores in California, Washington Other reclassifications that affected our consolidated
and Oregon. The International segment is comprised of financial statements are described in Cash and Cash
Future Shop and Best Buy operations in Canada. At Equivalents and Property and Equipment, below; Note 3,
February 26, 2005, we operated 114 Future Shop stores Investments in Debt Securities; Note 4, Debt; and Note 7,
throughout all Canadian provinces and 30 Canadian Best Leases.
Buy stores in Ontario, Alberta, British Columbia, These reclassifications have no effect on previously
Manitoba and Saskatchewan. Future Shop and Canadian reported net earnings.
Best Buy stores offer products and services similar to those
offered by U.S. Best Buy stores except that Canadian Best Use of Estimates in the Preparation of Financial
Buy stores do not sell appliances. Statements
In support of our retail store operations, we also operate The preparation of financial statements in conformity with
Geek Squad, a computer repair and service provider, and accounting principles generally accepted in the United
Web sites for each of our brands (BestBuy.com, States (GAAP) requires us to make estimates and
BestBuyCanada.ca, FutureShop.ca, MagnoliaAV.com and assumptions. These estimates and assumptions affect the
GeekSquad.com). reported amounts in the consolidated balance sheets and
In fiscal 2004, we sold our interest in Musicland Stores statements of earnings, as well as the disclosure of
Corporation. As described in Note 2, Discontinued contingent liabilities. Future results could differ from these
Operations, we have classified Musicland’s financial estimates and assumptions.
results as discontinued operations for all periods
presented. Prior to fiscal 2003, the Musicland business Fiscal Year
was included in our Domestic segment. These Notes to Our fiscal year ends on the Saturday nearest the end of
Consolidated Financial Statements, except where February. Fiscal 2005, 2004 and 2003 each included
otherwise indicated, relate to continuing operations only. 52 weeks.
62