Best Buy 2005 Annual Report Download - page 56

The following table presents our capital expenditures for each of the past three fiscal years ($ in millions):
Fiscal Year 2005 2004 2003
New stores $182 $215 $219
Store-related projects(1) 145 111 96
Corporate campus(2) — 29 131
Information technology 115 112 185
Other 60 78 94
Total capital expenditures $502 $545 $725
(1) Includes store remodels, relocations and/or expansions, as well as various merchandising projects.
(2) Construction of our new corporate campus was completed during fiscal 2004.
annum. The interest rate may be reset, but not below
Debt and Capital 2.25% or above 3.25%, on July 15, 2006; July 15,
In January 2002, we sold convertible subordinated 2011; and July 15, 2016. One of our subsidiaries has
debentures having an aggregate principal amount of guaranteed the convertible debentures.
$402 million. The proceeds from the offering, net of In June 2004, we redeemed our convertible debentures
$6 million in offering expenses, were $396 million. The due in 2021 for $355 million. During the fourth quarter
debentures mature in 2022 and are callable at par, at of fiscal 2005, in connection with the review of our lease
our option, for cash on or after January 15, 2007. accounting practices, we recorded a $107 million
Holders may require us to purchase all or a portion of financing lease obligation for leases that did not qualify
their debentures on January 15, 2007; January 15, for sale-leaseback accounting treatment.
2012; and January 15, 2017, at a purchase price equal
to 100% of the principal amount of the debentures plus We also have a master lease program which was used
accrued and unpaid interest up to but not including the for the purpose of constructing and leasing new retail
date of purchase. We have the option to settle the locations. At the end of fiscal 2005, $55 million in leases
purchase price in cash, stock, or a combination of cash related to new stores were outstanding under the master
and stock. The debentures will be convertible into shares lease program. The master lease program was completed
of our common stock at a conversion rate of 14.4927 in fiscal 2003 and there has been no further new-store
shares per $0.001 principal amount of debentures, development under this program. On May 4, 2005, we
equivalent to an initial conversion price of $69.00 per repaid the outstanding balance of $54 million on the
share, if the closing price of our common stock exceeds a master lease program.
specified price for a specified period of time, if our credit
Share Repurchases and Dividends
rating falls below specified levels, if the debentures are
called for redemption or if certain specified corporate In June 2004, our Board of Directors authorized a
transactions occur. At February 26, 2005, none of the $500 million share repurchase program. The new
criteria for conversion had been met. However, upon the program, which became effective on June 24, 2004,
adoption for fiscal 2005 of EITF Issue No. 04-08, the terminated and replaced a $400 million share repurchase
calculation of our diluted earnings per share now includes program authorized by our Board of Directors in fiscal
the conversion of our convertible debentures into 2000. During fiscal 2005, we purchased and retired
5.8 million shares of our common stock, and adds back 2.3 million shares at a cost of $118 million under the
related after-tax interest of $6.5 million. The adoption of $500 million share repurchase program, and 1.6 million
EITF Issue No. 04-08 reduced diluted earnings per share shares at a cost of $82 million under the $400 million
by $0.03 for fiscal 2005. Prior-year amounts have been share repurchase program.
restated to conform to the current-year presentation. The
debentures have an initial interest rate of 2.25% per
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