Discontinued Operations
During the fourth quarter of fiscal 2012, we commenced discontinued operations presentation. The presentation of discontinued operations has been retrospectively applied to all prior periods presented. Discontinued operations comprise the following:
Domestic Segment
Speakeasy – During the second quarter of fiscal 2011, we completed the sale of Speakeasy to Covad Communications. Speakeasy's operations primarily comprised internet-based telephony services. In consideration for the sale of Speakeasy, Best Buy received cash consideration and a minority equity interest in the combined operations. We do not exercise significant influence over the combined operations. Based upon the fair value of the consideration received and the carrying value of Speakeasy at closing, we recorded a pre-tax gain on sale of $7 million in the second quarter of fiscal 2011.
Napster – During the third quarter of fiscal 2012, we sold certain assets comprising the domestic operations of Napster, Inc. to Rhapsody International and ceased operations in the U.S. Napster's operations comprised digital media download and streaming services in the U.S. In consideration for the sale of these assets, Best Buy received a minority investment in Rhapsody International. We do not exercise significant influence over Rhapsody International.
International Segment
Best Buy China – During the fourth quarter of fiscal 2011, we announced the restructuring of our eight large-format Best Buy branded stores in China. The closure of Best Buy branded stores was completed in the first quarter of fiscal 2012. Our fiscal 2011 restructuring activities included plans to restructure the large-format Best Buy branded stores in China.
Best Buy Turkey – During the fourth quarter of fiscal 2011, we announced the closure of our two large-format Best Buy branded stores in Turkey. The exit activities were completed during the second quarter of fiscal 2012, at which time we recorded a $4 million pre-tax gain on the sale of certain assets related to the stores.
Best Buy U.K. – During the third quarter of fiscal 2012, we announced the closure of our 11 large-format Best Buy branded stores in the U.K. We completed the exit activities associated with these stores during the fourth quarter of fiscal 2012.
Belgium – During the fourth quarter of fiscal 2012, Best Buy Europe sold its retail business in Belgium, consisting of 82 small-format The Phone House stores, to Belgacom S.A. As a result of the sale, a pre-tax gain of $5 million was recorded in fiscal 2012.
The financial results of discontinued operations for fiscal 2013 (11-month), 2012 and 2011 were as follows ($ in millions):
|
| | | | | | | | | | | |
| 11-Month | | 12-Month |
| 2013 | | 2012 | | 2011 |
| | | | | |
Revenue | $ | 2 |
| | $ | 411 |
| | $ | 525 |
|
| | | | | |
Restructuring charges(1) | (2 | ) | | 229 |
| | 75 |
|
| | | | | |
Gain (loss) from discontinued operations before income tax benefit | 3 |
| | (406 | ) | | (260 | ) |
Income tax benefit (expense) | (2 | ) | | 89 |
| | 57 |
|
Gain on sale of discontinued operations | — |
| | 9 |
| | 7 |
|
Income tax benefit on sale | — |
| | — |
| | 8 |
|
Net gain (loss) from discontinued operations including noncontrolling interests | 1 |
| | (308 | ) | | (188 | ) |
Net loss from discontinued operations attributable to noncontrolling interests | 1 |
| | 134 |
| | 38 |
|
Net gain (loss) from discontinued operations attributable to Best Buy Co., Inc. shareholders | $ | 2 |
| | $ | (174 | ) | | $ | (150 | ) |
| |
(1) | See Note 7, Restructuring Charges, for further discussion of the restructuring charges associated with discontinued operations. |
