Best Buy 2014 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 2014 Best Buy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

45
Refer to Note 13, Contingencies and Commitments, of the Notes to Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information regarding our
significant commitments for capital expenditures at February 1, 2014.
Debt and Capital
We have $350 million principal amount of notes due March 15, 2016 (the “2016 Notes”), $500 million principal amount of
notes due August 2, 2018 (the “2018 Notes”) and $650 million principal amount of notes due March 15, 2021 (the “2021
Notes”). Refer to Note 7, Debt, of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements
and Supplementary Data, of this Annual Report on Form 10-K for further information about our 2016 Notes, 2018 Notes and
2021 Notes.
Other
At February 1, 2014 and February 2, 2013, we had $95 million and $122 million, respectively, outstanding under financing
lease obligations.
Share Repurchases and Dividends
From time to time, we repurchase our common stock in the open market pursuant to programs approved by our Board. We may
repurchase our common stock for a variety of reasons, such as acquiring shares to offset dilution related to equity-based
incentives, including stock options and our employee stock purchase plan, and optimizing our capital structure. We consider
several factors in determining whether to make share repurchases including, among other things, our cash needs, the
availability of funding, our future business plans and the market price of our stock. If we decide to make future share
repurchases, we expect that cash provided by future operating activities, as well as available cash and cash equivalents, will be
the sources of funding for our share repurchase program.
In fiscal 2014 (12-month), we did not repurchase or retire any shares. We repurchased and retired 6.3 million shares at a cost of
$122 million in fiscal 2013 (11-month). In fiscal 2012 (12-month), we repurchased and retired 54.6 million shares at a cost of
$1.5 billion. At the end of fiscal 2014 (12-month), $4.0 billion of the $5.0 billion share repurchase program authorized by our
Board in June 2011 was available for future share repurchases. Repurchased shares have been retired and constitute authorized
but unissued shares.
In fiscal 2004, our Board initiated the payment of a regular quarterly cash dividend on our common stock. A quarterly cash
dividend has been paid in each subsequent quarter. The payment of cash dividends is subject to customary legal and
contractual restrictions. During fiscal 2014 (12-month), we made four cash dividend payments totaling $0.68 per share, or
$233 million in the aggregate.
Other Financial Measures
Our debt to earnings ratio was 2.4 as of February 1, 2014, compared to (6.3) as of February 2, 2013, due primarily to net
earnings in the 12 months ended February 1, 2014, compared to a net loss in the comparable period ended February 2, 2013.
Our adjusted debt to EBITDAR ratio, which includes capitalized operating lease obligations in its calculation, was 3.3 and 2.9
as of February 1, 2014 and February 2, 2013, respectively. The ratio increased as a decrease in EBITDAR was only partially
offset by a decrease in capitalized operating lease obligations.
Our adjusted debt to EBITDAR ratio is considered a non-GAAP financial measure and should be considered in addition to,
rather than as a substitute for, the most directly comparable ratio determined in accordance GAAP. We have included this
information in our MD&A as we view the adjusted debt to EBITDAR ratio as an important indicator of our creditworthiness.
Furthermore, we believe that our adjusted debt to EBITDAR ratio is important for understanding our financial position and
provides meaningful additional information about our ability to service our long-term debt and other fixed obligations and to
fund our future growth. We also believe our adjusted debt to EBITDAR ratio is relevant because it enables investors to compare
our indebtedness to that of retailers who own, rather than lease, their stores. Our decision to own or lease real estate is based on
an assessment of our financial liquidity, our capital structure, our desire to own or to lease the location, the owner’s desire to
own or to lease the location, and the alternative that results in the highest return to our shareholders.