Best Buy 2003 Annual Report Download - page 166
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March 1,
2003 March 2,
2002 March 3,
2001
Revenue $ 1,727 $ 1,886 $ 138
Cost of goods sold 1,114 1,226 91
Gross profit 613 660 47
Selling, general and administrative expenses 685 631 54
Long−lived asset impairment charge 166 — —
Operating (loss) income (238) 29 (7)
Interest expense (6) (19) (1)
(Loss) earnings before income taxes (244) 10 (8)
Income tax (benefit) expense(1) (119) 10 (3)
Loss before cumulative effect of change in accounting principles (125) — (5)
Cumulative effect of change in accounting principle for goodwill
(note 1), net of $0 tax (308) — —
Cumulative effect of change in accounting principle for vendor
allowances (note 1), net of $5 tax (8) — —
Loss from discontinued operations, net of tax $ (441) $ — $ (5)
(1) Fiscal 2003 includes a $25 tax benefit as described below.
The current and noncurrent assets and liabilities of Musicland as of March 1, 2003, and March 2, 2002, were as follows:
March 1,
2003 March 2,
2002
Cash and cash equivalents $ 2 $ —
Receivables 3 9
Merchandise inventories 316 383
Other current assets 76 56
Current assets of discontinued operations $ 397 $ 448
Net property and equipment $ 69 $ 236
Other assets 88 325
Noncurrent assets of discontinued operations $ 157 $ 561
Accounts payable $ 208 $ 282
Accrued compensation and related expenses 14 31
Accrued liabilities 98 105
Current liabilities of discontinued operations $ 320 $ 418
Long−term liabilities $ 20 $ 16
Long−term debt 5 5
Noncurrent liabilities of discontinued operations $ 25 $ 21
We recorded a deferred tax asset of $25 as of March 1, 2003, in conjunction with the classification of Musicland as discontinued
operations. This tax benefit resulted from differences between the basis of assets and liabilities for financial reporting and income tax
purposes arising at acquisition, which will be realized upon the disposition of Musicland. Although realization is not assured, we
believe it is more likely than not that this deferred tax asset will be realized. Such differences also gave rise to a $41 deferred tax asset
associated with a capital loss carryover. We have provided a full valuation allowance against this $41 deferred tax asset because of the
uncertainties regarding realization of the benefit.
53
$ in millions, except per share amounts