10. Segments
We operate two reportable segments: Domestic and International. The
Domestic segment includes U.S. Best Buy and Magnolia Hi-Fi stores. The
International segment is comprised of Future Shop and Canadian Best
Buy stores. As described in note 2, we have classified the results of
operations of Musicland as discontinued operations. The Musicland
business was previously included in our Domestic segment. The data
included below were revised to exclude amounts related to Musicland.
The following tables
present our business segment information for continuing operations for
each of the past three fiscal years:
2003
2002
2001
Revenue
Domestic
$ 19,303
$ 17,115
$ 15,189
International
1,643
596
—
Total revenue
$ 20,946
$ 17,711
$ 15,189
Operating Income
Domestic
$ 1,002
$ 886
$ 611
International
8
22
—
Total operating income
1,010
908
611
Net interest income
4
18
38
Earnings from continuing
operations before income tax expense
$ 1,014
$ 926
$ 649
2003
2002
2001
Assets
Domestic
$ 6,251
$ 5,672
$ 3,812
International
858
686
—
Total assets
$ 7,109
$ 6,358
$ 3,812
Capital Expenditures
Domestic
$ 667
$ 563
$ 657
International
58
18
—
Total capital
expenditures
$ 725
$ 581
$ 657
Depreciation and
Amortization
Domestic
$ 284
$ 237
$ 165
International
26
8
—
Total depreciation and
amortization
$ 310
$ 245
$ 165
11. Commitments and
Contingencies
At the end of fiscal 2003, we had commitments for the purchase and
construction of facilities valued at approximately $20.
We are involved in various legal proceedings arising during the normal
course of conducting business. Management believes that the resolution
of these proceedings, either individually or in the aggregate, will
not have a significant adverse impact on our consolidated financial
statements.
In November 2002, the FASB issued FIN No. 45, Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. FIN No. 45 provides guidance on
the recognition and disclosure of certain types of guarantees,
including product warranties. We assumed a liability for certain
extended service contracts when we acquired Future Shop in the third
quarter of fiscal 2002. Subsequent to the acquisition, extended
service contracts were sold on behalf of an unrelated third party,
without recourse. An accrued liability has been established for the
acquired extended service contracts based on historical trends in
product failure rates and the expected material and labor costs
necessary to provide the services. The remaining term of these
extended service contracts varies by product and extend up to four
years. The estimated remaining liability for extended service
contracts at March 1, 2003, is $28.
The following table
reconciles the changes in our liability for extended service contracts
for the year ended March 1, 2003:
