Best Buy 2014 Annual Report Download - page 66

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61
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Unless the context otherwise requires, the use of the terms "Best Buy", "we," "us" and "our" in these Notes to Consolidated
Financial Statements refers to Best Buy Co., Inc. and, as applicable, its consolidated subsidiaries.
Discontinued Operations
On June 26, 2013, we sold our 50% ownership interest in Best Buy Europe Distributions Limited (“Best Buy Europe”) to
Carphone Warehouse Group plc ("CPW"). On February 1, 2014, we sold mindSHIFT Technologies, Inc. ("mindSHIFT") to
Ricoh Americas Holdings, Inc. ("Ricoh"). The results of Best Buy Europe and mindSHIFT for all periods have been presented
as discontinued operations. See Note 4, Discontinued Operations, for further information.
Description of Business
We are a multi-national, multi-channel retailer of technology products, including mobile phones, tablets and computers, large
and small appliances, televisions, digital imaging, entertainment products and related accessories. We also offer technology
services – including technical support, repair and installation – under the Geek Squad brand. We have two operating segments:
Domestic and International. The Domestic segment is comprised of store, online and call center operations in all states, districts
and territories of the U.S., operating under the brand names Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video
and Pacific Sales. The International segment is comprised of: (i) all Canada store, online and call center operations, operating
under the brand names Best Buy, Best Buy Mobile, Cell Shop, Connect Pro, Future Shop and Geek Squad, (ii) all China store
and call center operations, operating under the brand names Five Star and Best Buy Mobile, and (iii) all Mexico store
operations operating under the brand names Best Buy, Best Buy Express and Geek Squad.
In addition to our retail store operations, we also operate websites including BestBuy.com, BestBuy.ca and FutureShop.ca.
Fiscal Year
On November 2, 2011, our Board of Directors approved a change in our fiscal year-end from the Saturday nearest the end of
February to the Saturday nearest the end of January, effective beginning with our fiscal year 2013. As a result of this change,
our fiscal year 2013 was an 11-month transition period beginning March 4, 2012, through February 2, 2013. Concurrent with
the change, we began consolidating the results of our Europe, China and Mexico operations on a one-month lag, compared to a
two-month lag in prior years, to continue aligning the fiscal reporting periods of our international operations with statutory
filing requirements. In these consolidated statements, including the notes thereto, financial results for fiscal 2013 are for an 11-
month period. Corresponding results for fiscal 2014 and fiscal 2012 are both for 12-month periods. In addition, our
Consolidated Statements of Earnings and Consolidated Statements of Cash Flows also include an unaudited 11-month fiscal
2012 (recast). Fiscal 2014 included 52 weeks, fiscal 2013 (11-month) included 48 weeks and fiscal 2012 included 53 weeks.
Basis of Presentation
The consolidated financial statements include the accounts of Best Buy Co., Inc. and its consolidated subsidiaries. All
intercompany balances and transactions are eliminated upon consolidation.
In order to align our fiscal reporting periods and comply with statutory filing requirements, we consolidate the financial results
of our Europe, China and Mexico operations on a lag. Due to our fiscal year-end change, this was a one-month lag in fiscal
2014 and 2013 (11-month) and a two-month lag in fiscal 2012. Our policy is to accelerate recording the effect of events
occurring in the lag period that significantly affect our consolidated financial statements. In fiscal 2012, we recorded $82
million of restructuring charges recorded in January 2012 related to our large-format Best Buy branded store closures in the
United Kingdom ("U.K.") as well as a $1.2 billion goodwill impairment charge attributable to our Best Buy Europe reporting
unit. Except for these restructuring activities and the goodwill impairment in fiscal 2012, 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 2014 or 2013 (11-month). For further information about our restructuring and the
nature of the charges we recorded, refer to Note 6, Restructuring Charges. For further information about the goodwill
impairment, refer to Goodwill and Intangible Assets below, as well as Note 3, Profit Share Buy-Out.