Best Buy 2013 Annual Report Download - page 92

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92
facilities bear interest 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 ($ in millions):
February 2, 2013 March 3, 2012
2013 Notes $ 500 $ 500
2016 Notes 349 349
2021 Notes 648 648
Financing lease obligations, due 2014 to 2019, interest rates ranging from 3.0% to 8.1% 122 149
Capital lease obligations, due 2014 to 2036, interest rates ranging from 2.1% to 8.3% 80 81
Other debt, due 2018 to 2022, interest rates ranging from 3.8% to 6.7% 1 1
Total long-term debt $ 1,700 $ 1,728
Less: current portion(1) (547)(43)
Total long-term debt, less current portion $ 1,153 $ 1,685
(1) Our 2013 Notes due July 15, 2013, are classified in the current portion of long-term debt as of February 2, 2013.
2013 Notes
In June 2008, we sold $500 million principal amount of notes due July 15, 2013 (the "2013 Notes"). Prior to August 6, 2012,
the 2013 Notes bore interest at a fixed rate of 6.75% per year. As a result of credit downgrades on August 6, 2012 and
November 21, 2012, the 2013 Notes bore interest at a fixed rate of 7.25% from July 16, 2012 to January 15, 2013, and currently
bear interest at a fixed rate of 7.25%. Interest on the 2013 Notes is 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 million, after an initial issuance discount of $1 million 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 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 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 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.
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