Best Buy 2012 Annual Report Download - page 81

$ in millions, except per share amounts or as otherwise noted
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Acceleration of Intervening Event
The results of Best Buy Europe are recorded on a two-month lag. However, as described in Note 1, Summary of Significant
Accounting Policies, the Mobile buy-out in January 2012 constituted a significant intervening event. Consequently, the
recording of all accounting impacts arising from the Mobile buy-out, including the goodwill impairment, was accelerated and
recorded in the fourth quarter of fiscal 2012 due to their significance to our consolidated financial statements.
3. Discontinued Operations
During fiscal 2011 and the first three quarters of fiscal 2012, we determined that the aggregate financial results from
discontinued operations were not material, and therefore, we did not separately present discontinued operations in our
consolidated financial statements. During the fourth quarter of fiscal 2012, we determined that with the discontinuation of our
large-format Best Buy branded stores in the U.K., aggregate discontinued operations were material and would require separate
presentation. We therefore commenced discontinued operations presentation during the fourth quarter of fiscal 2012, and
included the results of all operations discontinued during fiscal 2012 and fiscal 2011. We did not discontinue any operations
during fiscal 2010. The discontinued operations presentation has been retrospectively applied to all prior periods presented.
Discontinued operations comprise the following:
Domestic Segment
Speakeasy – During the second quarter of fiscal 2011, we completed the sale of Speakeasy to Covad Communications.
Speakeasy's operations primarily comprised internet-based telephony services. In consideration for the sale of Speakeasy, Best
Buy received cash consideration and a minority equity interest in the combined operations. We do not exercise significant
influence over the combined operations. Based upon the fair value of the consideration received and the carrying value of
Speakeasy at closing, we recorded a pre-tax gain on sale of $7 in the second quarter of fiscal 2011.
Napster – During the third quarter of fiscal 2012, we sold certain assets comprising the domestic operations of Napster, Inc. to
Rhapsody International and ceased operations in the U.S. Napster's operations comprised digital media download and
streaming services in the U.S. In consideration for the sale of these assets, Best Buy received a minority investment in
Rhapsody International. We do not exercise significant influence over Rhapsody International.
International Segment
Best Buy China – During the fourth quarter of fiscal 2011, we announced the restructuring of our eight large-format Best Buy
branded stores in China. The closure of Best Buy branded stores was completed in the first quarter of fiscal 2012. Our fiscal
2011 restructuring activities included plans to restructure the large-format Best Buy branded stores in China.
Best Buy Turkey – During the fourth quarter of fiscal 2011, we announced the closure of our two large-format Best Buy
branded stores in Turkey. The exit activities were completed during the second quarter of fiscal 2012, at which time we
recorded a $4 pre-tax gain on the sale of certain assets related to the stores.
Best Buy U.K. – During the third quarter of fiscal 2012, we announced the closure of our eleven large-format Best Buy branded
stores in the U.K. We completed the exit activities associated with these stores during the fourth quarter of fiscal 2012.
Belgium – During the fourth quarter of fiscal 2012, Best Buy Europe sold its retail business in Belgium, consisting of 82 small-
format The Phone House stores, to Belgacom S.A. As a result of the sale, a pre-tax gain of $5 was recorded in fiscal 2012.