Best Buy 2008 Annual Report Download - page 38

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The International segment is comprised of all Canada Financial Reporting Changes
store, call center and online operations, including Best To maintain consistency and comparability, we reclassified
Buy, Future Shop and Geek Squad, as well as all China certain prior-year amounts to conform to the current-year
store and online operations, including Best Buy, Five Star presentation as described in Note 1, Summary of
and Geek Squad. Our International segment offers Significant Accounting Policies, of the Notes to
products and services similar to our Domestic segment’s Consolidated Financial Statements in this Annual Report
offerings. However, Canada Best Buy stores do not carry on Form 10-K.
appliances, the China Best Buy store and Five Star stores
We adopted the provisions of Financial Accounting
do not carry entertainment software, and Geek Squad
Standards Board (‘‘FASB’’) Interpretation (‘‘FIN’’) No. 48,
services in Canada and China are offered only through
Accounting for Uncertainty in Income Taxes — an
our Best Buy stores. At the end of fiscal 2008, we
Interpretation of FASB Statement No. 109, effective
operated 51 Canada Best Buy stores in Alberta, British
March 4, 2007. FIN No. 48 provides guidance regarding
Columbia, Manitoba, Nova Scotia, Ontario, Quebec and
the recognition, measurement, presentation and disclosure
Saskatchewan; 131 Future Shop stores throughout all of
in the financial statements of tax positions taken or
Canada’s provinces; 160 Five Star stores located in seven
expected to be taken on a tax return, including the
of China’s 34 provinces; and one China Best Buy store in
decision whether to file or not to file in a particular
Shanghai.
jurisdiction. See Note 8, Income Taxes, of the Notes to
In support of our retail store operations, we also operate Consolidated Financial Statements in this Annual Report
Web sites for each of our brands (BestBuy.com, BestBuy.ca, on Form 10-K.
BestBuy.com.cn, BestBuyMobile.com, Five-Star.cn,
FutureShop.ca, GeekSquad.com, GeekSquad.ca, Business Strategy and Core Philosophies
MagnoliaAV.com, PacificSales.com and Speakeasy.net). Our business, broadly defined, is about meeting the wants
and needs of consumers. We believe that our assets
Our business, like that of many U.S. retailers, is seasonal.
position us to solve more customer problems than ever.
Historically, we have realized more of our revenue and
Specifically, our assets include approximately 150,000
earnings in the fiscal fourth quarter, which includes the
engaged employees; valuable relationships with vendors
majority of the holiday shopping season in the U.S. and
all over the world; continuing and emerging relationships
Canada, than in any other fiscal quarter. The timing of
with companies like Apple, Dell and The Carphone
new store openings, costs associated with the development
Warehouse Group PLC (‘‘CPW’’); and all of the other
of new businesses, as well as general economic conditions
mutually enriching business relationships that our people
may affect our future results.
continue to establish and develop wherever we go, from
Asia to Silicon Valley. We also generate significant positive
Acquisition
cash flows. All of these assets are at our disposal as we
Speakeasy, Inc. envision how we will deepen our relationships with
On May 1, 2007, we acquired Speakeasy, Inc. customers and increase shareholder value.
(‘‘Speakeasy’’) for $103 million in cash, or $89 million Our business strategy is customer centricity. We define
net of cash acquired, which included transaction costs and customer centricity through its parts, which we call our
the repayment of $5 million of Speakeasy’s debt. We three core philosophies: inviting our employees to
acquired Speakeasy, an independent U.S. broadband, contribute their unique ideas and experiences in service of
voice, data and information technology services provider, customers; treating customers uniquely and honoring their
to strengthen our portfolio of technology solutions. The differences; and meeting customers’ unique needs,
premium we paid, in excess of the fair value of the net end-to-end.
assets acquired, was primarily for the synergies we believe
We start with a view of all of our customers, including
Speakeasy will generate by providing new technology
what their problems are and what their desires are. We try
solutions for our existing and future customers, as well as
to match that against everything we know about the
to obtain Speakeasy’s skilled, established workforce.
solutions that now exist, or that could be created. Then we
Speakeasy contributed revenue of $78 million to our
figure out how to get customers the right solutions by
consolidated financial results in fiscal 2008.
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