Best Buy 2015 Annual Report Download - page 85

Table of Contents
78
Long-Term Debt
Long-term debt consisted of the following ($ in millions):
January 31, 2015 February 1, 2014
2016 Notes 349 349
2018 Notes 500 500
2021 Notes 649 649
Interest rate swap valuation adjustments 1 —
Financing lease obligations, due 2016 to 2026, interest rates ranging from 3.0% to 8.1% 69 95
Capital lease obligations, due 2016 to 2035, interest rates ranging from 1.9% to 9.3% 52 63
Other debt, due 2017, interest rate 6.7% 1 1
Total long-term debt 1,621 1,657
Less: current portion (41)(45)
Total long-term debt, less current portion $ 1,580 $ 1,612
2018 Notes
On July 16, 2013, we completed the sale of $500 million principal amount of notes due August 1, 2018 (the “2018 Notes”). The
2018 Notes bear interest at a fixed rate of 5.00% per year, payable semi-annually on February 1 and August 1 of each year,
beginning on February 1, 2014. Net proceeds from the sale of the 2018 Notes were $495 million, after underwriting and issue
discounts totaling $5 million.
We may redeem some or all of the 2018 Notes at any time, at a redemption price equal to the greater of (1) 100% of the
principal amount of the 2018 Notes to be redeemed and (2) the sum of the present values of each remaining scheduled payment
of principal and interest on the 2018 Notes to be redeemed discounted to the redemption date on a semi-annual basis at the
Treasury Rate plus 50 basis points. Furthermore, if a change of control triggering event occurs, we will be required to offer to
purchase the remaining unredeemed 2018 Notes at a price equal to 101% of their principal amount, plus accrued and unpaid
interest to the purchase date.
The 2018 Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and
unsubordinated debt. The 2018 Notes contain covenants that, among other things, limit our ability and the ability of our
subsidiaries to incur debt secured by liens and enter into sale and lease-back transactions.
2016 and 2021 Notes
In March 2011, we issued $350 million principal amount of notes due March 15, 2016 (the “2016 Notes”) and $650 million
principal amount of notes due March 15, 2021 (the “2021 Notes” and, together with the 2016 Notes, the “Notes”). The 2016
Notes bear interest at a fixed rate of 3.75% per year, while the 2021 Notes bear interest at a fixed rate of 5.50% per year.
Interest on the Notes is payable semi-annually on March 15 and September 15 of each year, beginning on September 15, 2011.
The Notes were issued at a slight discount to par, which when coupled with underwriting discounts of $6 million, resulted in
net proceeds from the sale of the Notes of $990 million.
We may redeem some or all of the Notes at any time at a redemption price equal to the greater of (i) 100% of the principal
amount and (ii) the sum of the present values of each remaining scheduled payment of principal and interest discounted to the
redemption date on a semiannual basis, plus accrued and unpaid interest on the principal amount to the redemption date as
described in the indenture (including the supplemental indenture) relating to the Notes. Furthermore, if a change of control
triggering event occurs, we will be required to offer to purchase the remaining unredeemed Notes at a price equal to 101% of
their principal amount, plus accrued and unpaid interest to the purchase date.
The Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and unsubordinated
debt. The Notes contain covenants that, among other things, limit our ability to incur debt secured by liens or to enter into sale
and lease-back transactions.