Best Buy 2011 Annual Report Download - page 34

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (‘‘MD&A’’) is intended to provide
a reader of our financial statements with a narrative from the perspective of our management on our financial condition,
results of operations, liquidity and certain other factors that may affect our future results. Unless otherwise noted,
transactions and other factors significantly impacting our financial condition, results of operations and liquidity are
discussed in order of magnitude. Our MD&A is presented in seven sections:
• Overview
• Business Strategy and Core Philosophies
• Results of Operations
• Liquidity and Capital Resources
• Off-Balance-Sheet Arrangements and Contractual Obligations
• Critical Accounting Estimates
• New Accounting Standards
In order to align our fiscal reporting periods and comply with statutory filing requirements in certain foreign jurisdictions,
we consolidate the financial results of our Europe, China, Mexico and Turkey operations on a two-month lag. Consistent
with such consolidation, the financial and non-financial information presented in our MD&A relative to these operations is
also presented on a two-month lag.
Our policy is to accelerate recording the effect of events occurring in the lag period that significantly affect our
consolidated financial statements. Except for our fiscal 2011 restructuring, for which we recorded the effects of certain
restructuring charges, no significant intervening event occurred in these operations that would have materially affected our
financial condition, results of operations, liquidity or other factors had it been recorded during fiscal 2011. Accordingly,
the $171 million of restructuring charges related to our International segment were included in our fiscal 2011 results.
Our MD&A should be read in conjunction with the Consolidated Financial Statements and related Notes included in
Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
Our fiscal year ends on the Saturday nearest the end of February. Fiscal 2011, 2010 and 2009 each included 52 weeks.
Overview
We are a multi-national retailer of consumer electronics, home office products, entertainment products, appliances and
related services. We operate two reportable segments: Domestic and International. The Domestic segment is comprised of
all operations within the U.S. and its territories. The International segment is comprised of all operations outside the U.S.
and its territories.
Our business, like that of many retailers, is seasonal. Historically, we have realized more of our revenue and earnings in
the fiscal fourth quarter, which includes the majority of the holiday shopping season in the U.S., Europe and Canada, than
in any other fiscal quarter.
While some of the products and services we offer are viewed by consumers as essential, others continue to be viewed as
discretionary purchases. Consequently, our results of operations are susceptible to changes in consumer confidence levels
and macroeconomic factors such as unemployment, consumer credit availability and the condition of the housing market.
Recently, consumers have maintained a cautious approach to discretionary spending due to continued economic
pressures. Consequently, customer traffic and spending patterns continue to be difficult to predict. Other factors that
directly impact our performance are product life-cycle shifts (including the adoption of new technology) and the
competitive consumer electronics retail environment. As a result of these factors, predicting our future revenue and net
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