Best Buy 2006 Annual Report Download - page 64

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50
repurchase program authorized by our Board in April 2005.
There is nostatedexpiration dategoverning the period over
which we can makeour share repurchases.
We are revising our earnings guidance practices and plan
to continue providing annual guidance, including revenue
and earnings per share expectations. We will no longer
provide a specific forecast for quarterly earnings per share,
which is consistent with management’s focus on long-term
revenue andearnings growth generation. We don’t expect
the quarterly seasonality of our business to change, and
anticipate that on a separate basis, each of the first three
quarters of fiscal 2007 will contribute 12% to 15% of the
year’s earnings.
We intend to update our annual earnings guidance when
we are reasonably confident that annual results are
expected to change materially.
Item 7A. Quantitative and Qualitative Disclosures
About Market Risk.
Our debt is not subject to material interest-rate volatility
risk. The rates on asubstantial portion of our debt may be
reset, but not more than one percentage point higher than
the current rates. If the rates on the debt were to be reset
one percentage point higher, our annual interest expense
would increase by approximately$4 million. We do not
manage our debt interest-rate volatility risk through the use
of derivative instruments.
We have market risk arisingfrom changes in foreign
currency exchange rates related to our operations in
Canada. A 10%adverse change in the foreign currency
exchange rate would not have a significant impact on our
results of operations or financial position. We do not
manage our foreign currency exchange rate risk through the
use of derivative instruments.
Changes in the overall level of interest rates affect interest
incomegenerated from our short-term andlong-term
investments in debt securities. If overall interest rates were
one percentage point lower than current rates, our annual
interest income would decline by approximately $32 million
based on our short-term and long-term investments as of
February 25,2006. We donot manage ourinvestment
interest-rate volatility risk through the use of derivative
instruments.
Overall, there have been no material changesin our
primary risk exposures or management of market risks since
the prioryear. We do not expect any material changes in
our primary risk exposures or management of market risks
for the foreseeable future.