Best Buy 2008 Annual Report Download - page 24

materially adversely affect our operations and financial materially adversely affect our financial performance.
results. The most significant compliance and litigation risks Other factors which may materially adversely impact our
we face are: International operations include foreign trade, monetary,
tax and fiscal policies both of the U.S. and of other
• The difficulty in complying with sometimes countries; laws, regulations and other activities of foreign
conflicting regulations in local, national or governments, agencies and similar organizations; and
international jurisdictions and new or changing maintaining facilities in countries which have historically
regulations that affect how we operate; been less stable than the U.S..
• The impact of changes in tax laws (or Additional risks inherent in our International operations
interpretations thereof) and accounting standards; generally include, among others, the costs and difficulties
and of managing international operations, adverse tax
• The impact of litigation trends, including class consequences and greater difficulty in enforcing intellectual
action lawsuits involving consumers and property rights in countries other than the U.S.. The various
shareholders, and labor and employment matters. risks inherent in doing business in the U.S. generally also
exist when doing business outside of the U.S., and may be
Defending against lawsuits and other proceedings may
exaggerated by the difficulty of doing business in
involve significant expense and divert management’s
numerous sovereign jurisdictions due to differences in
attention and resources from other matters.
culture, laws and regulations.
Our International activities subject us to risks
We rely heavily on our management information
associated with the legislative, judicial, accounting,
systems for inventory management, distribution
regulatory, political and economic conditions
and other functions. If our systems fail to perform
specific to the countries or regions in which we
these functions adequately or if we experience an
operate, which could materially adversely affect
interruption in their operation, our business and
our financial performance.
results of operations could be materially adversely
We have a presence in various foreign countries including affected.
Bermuda, Canada, China, Luxembourg, Mexico, the
The efficient operation of our business is dependent on
Republic of Mauritius, Turkey, Turks and Caicos, and the
our management information systems. We rely heavily on
United Kingdom. During fiscal 2008, our International
our management information systems to manage our
operations generated 17% of our revenue. Our growth
order entry, order fulfillment, pricing, point-of-sale and
strategy includes expansion into new or existing
inventory replenishment processes. The failure of our
international markets, and we expect that our International
management information systems to perform as we
operations will account for a larger portion of our revenue
anticipate could disrupt our business and could result in
in the future. Our future operating results in these
decreased revenue, increased overhead costs and excess
countries and in other countries or regions throughout the
or out-of-stock inventory levels, causing our business and
world where we may operate in the future could be
results of operations to suffer materially.
materially adversely affected by a variety of factors, many
of which are beyond our control including political
A disruption in our relationship with Accenture,
conditions, economic conditions, legal and regulatory
who manages our information technology and
constraints and foreign currency regulations.
human resources operations and conducts certain
In addition, foreign currency exchange rates and procurement activities, could materially adversely
fluctuations may have an impact on our future costs or on affect our business and results of operations.
future cash flows from our International operations, and
We have engaged Accenture LLP (‘‘Accenture’’), a global
could materially adversely affect our financial
management consulting, technology services and
performance. Moreover, the economies of some of the
outsourcing company, to manage significant portions of
countries in which we have operations have in the past
our information technology and human resources
suffered from high rates of inflation and currency
operations as well as to conduct certain procurement
devaluations, which, if they occurred again, could
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