Best Buy 2013 Annual Report Download - page 45

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45
Discontinued Operations
Discontinued operations consists of our large-format Best Buy branded stores in China, Turkey and the U.K., and The Phone
House retail stores in Belgium in our International segment, as well as Napster and Speakeasy in our Domestic segment.
The decrease in both loss from discontinued operations and loss from discontinued operations attributable to noncontrolling
interests in fiscal 2013 (11-month) compared to fiscal 2012 (11-month recast) was the result of the above listed operations
having been largely inactive during the current year period, whereas we were still operating our U.K. and Belgium stores, as
well as Napster, during fiscal 2012 (11-month recast). In addition, we recognized a benefit from positive adjustments to
estimated facility closure costs associated with the closure of our Best Buy branded stores in the U.K. in fiscal 2013 (11-
month).
The increase in loss from discontinued operations in fiscal 2012 compared to fiscal 2011 was primarily the result of increased
restructuring charges. Net loss from discontinued operations included $186 million (net of taxes) of restructuring charges in
fiscal 2012 compared to $54 million (net of taxes) in fiscal 2011. The fiscal 2012 restructuring charges included inventory
write-downs, property and equipment impairments, facility closure costs, employee termination benefits and other costs
primarily related to the closure of our 11 large-format Best Buy branded stores in the U.K. The fiscal 2011 restructuring charges
included inventory write-downs, property and equipment impairments, employee termination benefits and facility closure costs
as a result of our decision to exit the Turkey market and close our Best Buy branded stores in China.
The increase in net loss from discontinued operations attributable to noncontrolling interests in fiscal 2012 compared to fiscal
2011 was the result of increased losses from our large-format Best Buy branded stores in the U.K. due to restructuring activities
undertaken to close the stores. The U.K. stores are part of Best Buy Europe, our consolidated subsidiary in which CPW holds a
50% noncontrolling interest.
Net Earnings from Continuing Operations Attributable to Noncontrolling Interests
The decrease in net earnings from continuing operations attributable to noncontrolling interests in fiscal 2013 (11-month)
compared to fiscal 2012 (11-month recast) was due to the Mobile buy-out in the fourth quarter of fiscal 2012 (11-month recast).
As a result of the Mobile buy-out, CPW is no longer entitled to a portion of the profit share payments to Best Buy Europe
Distributions Limited ("Best Buy Europe"), our subsidiary in which CPW holds a 50% noncontrolling interest. In addition, net
earnings from continuing operations attributable to noncontrolling interests also decreased due to a decline in net earnings of
Best Buy Europe.
The increase in net earnings from continuing operations attributable to noncontrolling interests in fiscal 2012 compared to
fiscal 2011 was due to the strategic changes in respect of Best Buy Europe announced in November 2011. The strategic changes
included the Mobile buy-out, which was completed during the fourth quarter of fiscal 2012. The $1.3 billion payment related to
the Mobile buy-out was presented within the Net earnings from continuing operations attributable to noncontrolling interests
line in the Consolidated Statements of Earnings. In the Consolidated Statement of Cash Flows, the payment to Carphone
Warehouse is included within the Payment to noncontrolling interest line, as part of cash flows from financing activities.
Refer to Note 3, Profit Share Buy-Out, of the Notes to Consolidated Financial Statements, included in Item 8, Financial
Statements and Supplementary Data, of this Transition Report on Form 10-K for further information about the Mobile buy-out.
Impact of Inflation and Changing Prices
Highly competitive market conditions and the general economic environment minimized inflation's impact on the selling prices
of our products and services, and on our expenses. In addition, price deflation and the continued commoditization of key
technology products limited our ability to increase our gross profit rate.
Liquidity and Capital Resources
Summary
We closely manage our liquidity and capital resources. Key variables we use to manage our liquidity requirements include the
level of investment to support our growth strategies, discretionary SG&A spending, capital expenditures, credit facilities and
short-term borrowing arrangements and working capital management. Capital expenditures are a component of our cash flow
and capital management strategy which, to a large extent, we can adjust in response to economic and other changes in our
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