Best Buy 2016 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2016 Best Buy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

70
The aggregate financial results of all discontinued operations for fiscal 2016, 2015 and 2014 were as follows ($ in millions):
2016 2015 2014
Revenue $ 217 $ 1,564 $ 4,615
Restructuring charges(1) 1 18 110
Loss from discontinued operations before income tax benefit (expense)(2) (8)(12)(235)
Income tax benefit (expense)(3) (1)— 31
Gain on sale of discontinued operations(4) 99 1 32
Net earnings (loss) from discontinued operations including noncontrolling interests 90 (11)(172)
Net (earnings) loss from discontinued operations attributable to noncontrolling
interests —(2)9
Net earnings (loss) from discontinued operations attributable to Best Buy Co., Inc.
shareholders $ 90 $ (13)$ (163)
(1) See Note 4, Restructuring Charges, for further discussion of the restructuring charges associated with discontinued operations.
(2) Includes a $175 million impairment to write down the book value of our investment in Best Buy Europe to fair value in fiscal 2014.
(3) Income tax benefit for fiscal 2014 includes a $27 million benefit related to a tax allocation between continuing and discontinued operations and a $15
million benefit related to the impairment of our investment in Best Buy Europe. The fiscal 2014 effective tax rate for discontinued operations differs from
the statutory tax rate primarily due to the previously mentioned tax allocation, sale of mindSHIFT, restructuring charges and the impairment of our
investment in Best Buy Europe. The sale of mindSHIFT, restructuring charges and impairment generally included no related tax benefit. The deferred tax
assets related to the sale of mindSHIFT and restructuring charges generally resulted in an increase in the valuation allowance in an equal amount, of
which the investment impairment is not tax deductible.
(4) Gain in fiscal 2014 is primarily comprised of the following: $28 million gain (with no tax impact) from sale of Best Buy Europe fixed-line business in
Switzerland in the first quarter; $24 million gain (with no tax impact) from the sale of Best Buy Europe in the second quarter; and loss of $18 million
from sale of mindSHIFT in the fourth quarter. Gain in fiscal 2016 of $99 million is from sale of Five Star in the first quarter.
3. Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs:
Level 1 — Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement
date.
Level 2 — Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1,
either directly or indirectly, including:
• Quoted prices for similar assets or liabilities in active markets;
• Quoted prices for identical or similar assets in non-active markets;
• Inputs other than quoted prices that are observable for the asset or liability; and
• Inputs that are derived principally from or corroborated by other observable market data.
Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of
significant management judgment. These values are generally determined using pricing models for which the assumptions
utilize management's estimates of market participant assumptions.
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to
measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on
the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a
particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to
the asset or liability.