Summary- Best Buy 3yjt

Sonali Chougule(2591289) Group Number: 1, ACT688 Retail Company: BEST BUY Row: E; Seat: 2

SUMMARY: BEST BUY Best Buy is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances and related services. They also operate retail stores and call centers and conduct online retail operations under a variety of brand names such as Best Buy (BestBuy.com, BestBuy.ca), Best Buy Mobile, The Carphone Warehouse (CarphoneWarehouse.com), Five Star, Future Shop (FutureShop.ca), Geek Squad etc. During fiscal 2012, Best Buy operated two reportable segments Domestic and International. The International segment is comprised of Canada, Europe, China, Mexico operations. Number of Domestic stores for 2012 is 1,447 and that of International stores is 2,861 which lead to total of 4,308. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide financial statements from the perspective of management on financial condition, results of operations, liquidity and certain other factors that may affect future results of Best Buy. Best Buys common stock is traded on the New York Stock Exchange under symbol BBY. In order to align fiscal reporting periods and comply with statutory filing requirements in certain foreign jurisdictions, Best Buy consolidate the financial results of Best Buy Europe, China and Mexico operations on a two-month lag. Fiscal year of the company ends on the Saturday nearest the end of February. For fiscal 2012, first two quarterly cash dividend was $0.15 per share and for the remaining two quarters it was $0.16 per share. Revenue increased 1.9% this increase was driven primarily by the net addition of 235 new stores during fiscal 2012. Revenue for 2012 was $ 50,705 compare to 2011 $ 49,747. Operating income is 1,085 for 2012 and 2,374 for 2011. Gross profit rate is 24.8 % and Current ratio was 1.2 for 2010, 2011 and 2012. According to managements Best Buy expects to reduce costs in targeted areas by $800 million by fiscal 2015 with $250 million of the cost reductions expected to be realized in fiscal 2013. Fiscal 2012 included a net loss of $1.2 billion from total operations compared to net earnings of $1.3 billion in fiscal 2011. The net loss in fiscal 2012 was primarily due to decision to buy out of the Best Buy Mobile profit share agreement for $1.3, as well as the resulting $1.2 billion goodwill impairment in Best Buy Europe reporting unit. Gross profit rate decreased by 0.4% of revenue to 24.8% of revenue. Best Buy ended fiscal 2012 with $1.2 billion of cash and cash equivalents, compared to $1.1 billion at the end of fiscal 2011. Operating cash flow increased to $3.3 billion in fiscal 2012 compared to fiscal 2011 operating cash flow of $1.2 billion. Best buy repurchased and retired 54.6 million shares of Best Buy common stock at a cost of $1.5 billion during fiscal 2012. International segment's operating loss for fiscal 2012 is a $1.2 billion goodwill impairment charge. Internal Control: Best Buys management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under

the Exchange Act). Best Buys internal control over financial reporting is designed under the supervision of Best Buys principal executive officer and principal financial officer, and effected by Best Buy Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and includes those policies and procedures which pertain to the maintenance of records that in reasonable detail accurately and fairly reflect Best Buy transactions and the dispositions of Best Buy assets; which provides reasonable assurance that Best Buy transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that Best Buy receipts and expenditures are being made only in accordance with authorizations of Best Buys management and Board; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Best Buy assets that could have a material effect on Best Buys financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Best Buy assessed the effectiveness of Best Buy internal control over financial reporting as of March 3, 2012, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a t initiative of the five private sector organizations and is dedicated to providing thought leadership through the development of frameworks and guidance on enterprise risk management, internal control and fraud deterrence. During Best Buy assessment, management did not identify any material weakness in internal control over financial reporting. Deloitte & Touché LLP, the independent ed public ing firm that audited Best Buy consolidated financial statements for the year ended March 3, 2012, has issued an unqualified attestation report on Best Buy internal control over financial reporting as of March 3, 2012. According to Auditors letter they have audited the internal control over financial reporting of Best Buy Co., Inc. and subsidiaries (the "Company") as of March 3, 2012, based on criteria established in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Auditors conducted Best Buy audit in accordance with the standards of the Public Company ing Oversight Board (United States). Those standards require that Best Buy plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. SAS#114: AU Section 380-The Auditor’s Communication with those Charged with Governance. This standard is effective for audits of financial statements for periods beginning on or after December 15, 2006. This section establishes standards and provides guidance on the auditor's communication with those charged with governance in relation to an audit of financial statements. Recognizing the importance of effective two-way communication to the audit, SAS#114 provides a framework for the auditor's communication with those charged with governance. Auditor’s must communicate with those charged with governance matters related to the financial statement audit that are, in the auditor's professional judgment, significant and relevant to the responsibilities of those charged with governance in overseeing the financial reporting process. It helps to obtain information relevant to the audit from those charged with governance. The auditor should communicate the auditor's responsibilities under generally accepted

auditing standards and should discuss any disagreements with management, whether or not satisfactorily resolved, about matters that individually or in the aggregate could be significant to the entity's financial statements or the auditor's report.

FINAL REPORT (BEST BUY)

SONALI CHOUGULE (2591289) ACT-688, GROUP # 1

Row: E; Seat: 2