Best Buy 2005 Annual Report Download - page 96

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$ in millions, except per share amounts
The future minimum lease payments under our capital, financing and operating leases by fiscal year (not including
contingent rentals) as of February 26, 2005, are as follows:
Capital Financing Operating
Fiscal Year Leases Leases Leases
2006 $6 $16 $ 541
2007 2 15 541
2008 2 15 524
2009 2 14 511
2010 2 14 486
Thereafter 1 79 3,247
Subtotal 15 153 $5,850
Less: imputed interest (2) (46)
Present value of lease obligations $13 $107
Total minimum lease payments have not been reduced by minimum sublease rent income of approximately $90 due
under future noncancelable subleases.
8. Benefit Plans 9. Income Taxes
We sponsor retirement savings plans for employees The following is a reconciliation of income tax expense to
meeting certain age and service requirements. The plans the federal statutory tax rate for continuing operations for
provide for company-matching contributions, which are the past three fiscal years:
subject to annual approval by our Board. The total
2005 2004 2003
matching contributions were $14, $13 and $13 in fiscal
Federal income tax at the
2005, 2004 and 2003, respectively.
statutory rate $ 505 $ 454 $ 355
We have a non-qualified, unfunded deferred State income taxes, net of
compensation plan for certain management employees
federal benefit 29 27 35
and our Board whose contributions are limited under
Distributed earnings of
qualified defined contribution plans. Amounts contributed
foreign subsidiaries — 13 —
and deferred under the deferred compensation plan are
Non-taxable interest income (22) (19) (10)
credited or charged with the performance of investment
Other (3) 21 12
options offered under the plan and elected by the
participants. The liability for compensation deferred under Income tax expense $ 509 $ 496 $ 392
this plan was $64 and $58 at February 26, 2005, and Effective income tax rate 35.3% 38.3% 38.7%
February 28, 2004, respectively, and is included in
long-term liabilities. We manage the risk of changes in Like most companies, we have our income tax returns
the fair value of the liability for deferred compensation by periodically audited by domestic and foreign tax
electing to match our liability under the plan with authorities. These audits include questions regarding our
investment vehicles that offset a substantial portion of our tax filing positions, including the timing and amount of
exposure. The cash value of the investment vehicles, which deductions and the allocation of income among various
includes funding for future deferrals, was $73 and $70 at tax jurisdictions. At any one time, multiple tax years are
February 26, 2005, and February 28, 2004, respectively, subject to audit by the various tax authorities. In
and is included in other assets. Both the asset and the evaluating the exposures associated with our various tax
liability are carried at fair value. filing positions, we record reserves for probable
80