Best Buy 2005 Annual Report Download - page 39

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We believe our MD&A should be read in conjunction with
Item 7. Management’s Discussion and Analysis the Consolidated Financial Statements and related Notes
of Financial Condition and Results of included in Item 8, Financial Statements and
Operations. Supplementary Data, of this Annual Report on Form 10-K.
We believe transparency and understandability are the
primary goals of successful financial reporting. We Overview
remain committed to continuously increasing the Best Buy Co., Inc. is a specialty retailer of consumer
transparency of our financial reporting, providing our electronics, home-office products, entertainment software,
shareholders with informative financial disclosures and appliances and related services.
presenting an accurate view of our financial position and We operate two reportable segments: Domestic and
operating results. International. The Domestic segment is comprised of the
In accordance with Section 404 of the Sarbanes-Oxley operations of U.S. Best Buy and Magnolia Audio Video.
Act of 2002, our management, including our Chief U.S. Best Buy stores offer a wide variety of consumer
Executive Officer and Chief Financial Officer, conducted electronics, home-office products, entertainment software,
an evaluation of our internal control over financial appliances and related services, operating 668 stores in
reporting and concluded that such controls were effective 48 states and the District of Columbia at the end of fiscal
as of February 26, 2005. Our independent registered 2005. Magnolia Audio Video stores offer high-end audio
public accounting firm expressed an unqualified opinion and video products and services from 20 stores located in
on management’s assessment on the effectiveness of our California, Washington and Oregon at the end of fiscal
internal control over financial reporting. Management’s 2005. Magnolia Audio Video was acquired in the fourth
report on the effectiveness of our internal control over quarter of fiscal 2001.
financial reporting and the related report of our The International segment was established in connection
independent registered public accounting firm are with our acquisition of Future Shop in the third quarter of
included in Item 8, Financial Statements and fiscal 2002. At the end of fiscal 2005, the International
Supplementary Data, of this Annual Report on Form 10-K. segment consisted of 114 Future Shop stores operating
Management’s Discussion and Analysis of Financial throughout all Canadian provinces and 30 Canadian Best
Condition and Results of Operations (MD&A) is designed Buy stores operating in Ontario, Alberta, British
to provide a reader of our financial statements with a Columbia, Manitoba and Saskatchewan. Future Shop and
narrative from the perspective of our management on our Canadian Best Buy stores offer products and services
financial condition, results of operations, liquidity and similar to those offered by U.S. Best Buy stores, although
certain other factors that may affect our future results. Our Canadian Best Buy stores do not sell appliances.
MD&A is presented in nine sections: In support of our retail store operations, we also operate
• Overview Geek Squad, a provider of in-home computer repair,
• Strategic Initiatives support and installation services, Web sites for each of
• Results of Operations our brands (BestBuy.com, BestBuyCanada.ca,
• Liquidity and Capital Resources FutureShop.ca, MagnoliaAV.com and GeekSquad.com)
and an outlet store on eBay.
• Off-Balance-Sheet Arrangements and Contractual
Obligations
Strategic Initiatives
• Critical Accounting Estimates
During fiscal 2005, we advanced four strategic initiatives
• New Accounting Standards
that we believe will further enhance our business model
• Quarterly Results and Seasonality
• Outlook for Fiscal 2006
23