Best Buy 2011 Annual Report Download - page 101

$ in millions, except per share amounts or as otherwise noted
JPMorgan Revolving Credit Facility
We have a $2.3 billion five-year unsecured revolving credit facility, as amended (the ‘‘Credit Facility’’), with a syndicate of
banks, including JPMorgan Chase Bank, N.A., acting as administrative agent. Amounts outstanding under letters of credit,
if any, reduce amounts available under the Credit Facility. The Credit Facility expires in September 2012. At February 26,
2011, there were no borrowings outstanding and $2.3 billion was available under the Credit Facility. At April 20, 2011,
we had no borrowings outstanding under the Credit Facility.
Interest rates under the Credit Facility are variable and are determined at our option at: (i) the greater of the federal funds
rate plus 0.5% or JPMorgan’s prime rate, or (ii) the LIBOR plus an applicable LIBOR margin. A facility fee is assessed on
the commitment amount. Both the LIBOR margin and the facility fee were set based upon our then current senior
unsecured debt rating. The LIBOR margin ranges from 0.32% to 0.60%, and the facility fee ranges from 0.08% to 0.15%.
The Credit Facility is guaranteed by certain of our subsidiaries and contains customary affirmative and negative covenants.
Among other things, these covenants restrict or prohibit our ability to incur certain types or amounts of indebtedness, incur
liens on certain assets, make material changes to our corporate structure or the nature of our business, dispose of
material assets, allow non-material subsidiaries to make guarantees, engage in a change in control transaction, or
engage in certain transactions with our affiliates. The Credit Facility also contains covenants that require us to maintain a
maximum quarterly cash flow leverage ratio and a minimum quarterly interest coverage ratio. We were in compliance with
all such covenants at February 26, 2011.
ARS Revolving Credit Line
We previously had a revolving credit line with UBS secured by the par value of our UBS-brokered ARS. However, pursuant
to the settlement described in Note 3, Investments, the revolving credit line expired by its terms during the second quarter
of fiscal 2011 when UBS bought back all of our UBS-brokered ARS.
Europe Receivables Financing Facility
A subsidiary of Best Buy Europe has a £350 ($548) receivables financing facility (the ‘‘ERF’’) with a syndication of banks,
including Barclays Bank PLC acting as administrative agent, to finance the working capital needs of Best Buy Europe. The
ERF is secured by certain mobile phone network operator receivables of subsidiaries of Best Buy Europe, which are
included within receivables in our consolidated balance sheets. Availability on the ERF is based on a percentage of the
available acceptable receivables, as defined in the ERF agreement, and was £323 ($506) at February 26, 2011. Of the
amount available, we had drawn £291 ($455) at February 26, 2011. The ERF expires on July 3, 2012.
Interest rates under the ERF are variable, based on the three-month LIBOR plus a margin of 3.0%, with a commitment fee
of 1.5% on unused available capacity. The ERF also required an initial commitment fee of 2.75%.
The ERF is not guaranteed by Best Buy Co., Inc., or any of our subsidiaries, nor does it provide for any recourse to
Best Buy Co., Inc. The ERF contains customary affirmative and negative covenants. Among other things, these covenants
restrict or prohibit Best Buy Europe’s ability to incur certain types or amounts of indebtedness, incur additional
encumbrances on its receivables, make material changes in the nature of its business, dispose of material assets, make
guarantees, or engage in a change in control transaction. The ERF also contains covenants that require Best Buy Europe
to comply with a maximum annual leverage ratio, a minimum annual interest coverage ratio and a minimum fixed
charges coverage ratio.
Europe Revolving Credit Facility
In connection with a £475 revolving credit facility available to Best Buy Europe, with CPW as lender, Best Buy Co., Inc.
was named as guarantor, for up to 50% of the amount outstanding. Concurrent with entering into the ERF, we amended
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