Best Buy 2012 Annual Report Download - page 93

$ in millions, except per share amounts or as otherwise noted
93
at rates specified in the related credit agreements, are made available at the sole discretion of the respective lenders and are
payable on demand. Certain of these facilities are secured by a guarantee of Best Buy Co., Inc.
Long-Term Debt
Long-term debt consisted of the following:
March 3,
2012 February 26, 2011
2013 Notes $ 500 $ 500
2016 Notes 349 —
2021 Notes 648 —
Convertible debentures — 402
Financing lease obligations, due 2013 to 2026, interest rates ranging from 3.0% to 8.1% 149 170
Capital lease obligations, due 2013 to 2035, interest rates ranging from 2.1% to 8.3% 81 79
Other debt, due 2018 to 2022, interest rates ranging from 2.6% to 6.7% 1 1
Total long-term debt $ 1,728 $ 1,152
Less: current portion(1) (43)(441)
Total long-term debt, less current portion $ 1,685 $ 711
(1) Since holders of our convertible debentures could have required us to purchase all or a portion of the debentures on January 15, 2012, we classified the
$402 for such debentures in the current portion of long-term debt at February 26, 2011.
2013 Notes
In June 2008, we sold $500 principal amount of notes due July 15, 2013 (the "2013 Notes"). The 2013 Notes bear interest at a
fixed rate of 6.75% per year, payable semi-annually on January 15 and July 15 of each year, beginning January 15, 2009. The
interest payable on the 2013 Notes is subject to adjustment if either Moody's Investors Service, Inc. or Standard & Poor's
Ratings Services downgrades the rating assigned to the 2013 Notes to below investment grade. Net proceeds from the sale of
the 2013 Notes were $496, after an initial issuance discount of $1 and other transaction costs.
We may redeem some or all of the 2013 Notes at any time, at a price equal to 100% of the principal amount of the 2013 Notes
redeemed plus accrued and unpaid interest to the redemption date and an applicable make-whole amount as described in the
indenture relating to the 2013 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 2013 Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and
unsubordinated debt. The 2013 Notes contain covenants that, among other things, limit our ability and the ability of our North
American subsidiaries to incur debt secured by liens, enter into sale and lease-back transactions and, in the case of such
subsidiaries, incur unsecured debt.
2016 and 2021 Notes
In March 2011, we issued $350 principal amount of notes due March 15, 2016 (the “2016 Notes”) and $650 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 September 15, 2011. The Notes were issued at a
slight discount to par, which when coupled with underwriting discounts of $6, resulted in net proceeds from the sale of the
Notes of $990.
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 of the Notes redeemed and (ii) the sum of the present values of each remaining scheduled payment of principal and
interest on the Notes redeemed discounted to the redemption date on a semiannual basis, plus accrued and unpaid interest on
the principal amount of the Notes 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.