Best Buy 2003 Annual Report Download - page 150

Payments Due
2004 2005 2006 2007 2008 Thereafter
Operating leases $ 92 $ 89 $ 68 $ 54 $ 44 $ 147
Long−term debt — — — — 5 —
Purchase commitments — — — — — —
Total $ 92 $ 89 $ 68 $ 54 $ 49 $ 147
Note: For more information regarding long−term debt, operating leases and purchase commitments, refer to notes 4, 7 and 11,
respectively, in the Notes to Consolidated Financial Statements beginning on page 47.
The following table presents information regarding available commercial commitments and their expiration dates by fiscal year for
continuing operations only; there are no available commercial commitments related to discontinued operations ($ in millions):
Expires
Amount 2004 2005 2006 2007 Thereafter
Lines of credit(1) $ 212 $ 15 $ — $ 197 $ — $ —
Inventory financing line(2) 174 174 — — — —
Total $ 386 $ 189 $ — $ 197 $ — $ —
(1) $3 of our $200 line of credit was committed to stand−by letters of credit, and $22 of our $37 line was utilized.
(2) $26 of the inventory financing line was utilized.
Debt and Capital
In fiscal 2002, we sold convertible debentures due June 27, 2021, and January 15, 2022, with an initial principal amount at maturity of
$492 million and $402 million, respectively. The proceeds from the offerings, net of offering expenses, were $726 million. We may
redeem, and holders of the debentures may require us to purchase, all or part of the debentures on certain dates or upon the occurrence
of certain events as specified in the respective indentures. In addition, in the event that certain conditions are satisfied, holders may
surrender their debentures for conversion, which would increase the number of shares of our
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common stock outstanding and have a dilutive impact on our reported earnings per share. The shares related to the convertible
debentures were not included in our diluted earnings−per−share computation in fiscal 2003 or 2002, as the criteria for conversion of
the debentures were not met. For additional information regarding the convertible debentures, refer to note 4 of the Notes to
Consolidated Financial Statements on page 55.
Our ability to access our credit facilities is subject to our compliance with the terms and conditions of the credit facilities, including
financial covenants. The financial covenants require us to maintain certain financial ratios and a minimum net worth. As of the end of
fiscal 2003, we were in compliance with all such covenants. In the event we were to default on any of our other debt, it would
constitute a default under our credit facilities as well.
Our decision to own or lease real estate is based on an assessment of our financial liquidity, capital structure, our desire to own or to
lease the location and the alternative that results in the highest returns to our shareholders. For those sites developed using working
capital, we often sell and lease back those properties under long−term lease agreements. Through the end of fiscal 2003, $59 million in
leases related to new stores had been financed under the master lease program. The master lease program is now complete and there
will be no further new store development under this program. The program is set to expire on January 1, 2006, and is renewable for
one year, subject to lenders’ consent.
In fiscal 2000, our Board of Directors authorized the purchase of up to $400 million of our common stock from time to time through
open−market purchases. The stock purchase program has no stated expiration date. Approximately 2.9 million shares were purchased
under this plan during fiscal 2000 at a cost of $100 million. No additional purchases were made under the stock purchase program in
fiscal 2003, 2002 or 2001.
Critical Accounting Policies