Best Buy 2011 Annual Report Download - page 56

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The most directly comparable GAAP financial measure to our adjusted debt to EBITDAR ratio is our debt to net earnings
ratio, which excludes capitalized operating lease obligations from debt in the numerator of the calculation and does not
adjust net earnings in the denominator of the calculation.
The following table presents a reconciliation of our debt to net earnings ratio to our adjusted debt to EBITDAR ratio ($ in
millions):
2011(1) 2010(1)
Debt (including current portion) $ 1,709 $ 1,802
Capitalized operating lease obligations (8 times rental expense)(2) 9,271 9,013
Adjusted debt $10,980 $10,815
Net earnings including noncontrolling interests(3) $ 1,366 $ 1,394
Interest expense, net 36 40
Income tax expense 714 802
Depreciation and amortization expense(4) 1,145 930
Rental expense 1,159 1,127
EBITDAR $ 4,420 $ 4,293
Debt to net earnings ratio 1.3 1.3
Adjusted debt to EBITDAR ratio 2.5 2.5
(1) Debt is reflected as of the balance sheet dates for each of the respective fiscal year-ends, while rental expense and the other
components of EBITDAR represent activity for the 12 months ended as of each of the respective balance sheet dates.
(2) The multiple of eight times annual rental expense in the calculation of our capitalized operating lease obligations is the multiple
used for the retail sector by one of the nationally recognized credit rating agencies that rate our creditworthiness, and we consider it
to be an appropriate multiple for our lease portfolio.
(3) We utilize net earnings including noncontrolling interests within our calculation as such net earnings and related cash flows
attributable to noncontrolling interests are available to service our debt and operating lease commitments.
(4) Depreciation and amortization expense includes impairments of fixed assets, investments, goodwill and intangible assets (including
impairments associated with our fiscal 2011 restructuring).
Off-Balance-Sheet Arrangements and Contractual Obligations
Other than operating leases, we do not have any off-balance-sheet financing. A summary of our operating lease
obligations by fiscal year is included in the ‘‘Contractual Obligations’’ table below. Additional information regarding our
operating leases is available in Item 2, Properties, and Note 9, Leases, of the Notes to Consolidated Financial Statements,
included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
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