Best Buy 2008 Annual Report Download - page 87

$ in millions, except per share amounts or as otherwise noted
facility fee are based upon our then current senior Agreement. The Credit Agreement contains certain
unsecured debt rating. The LIBOR margin ranges from reporting and operating covenants. We were in
0.32% to 0.60%, and the facility fee ranges from 0.08% compliance with all such covenants at March 1, 2008.
to 0.15%. Our International segment also has revolving demand
The Credit Agreement is guaranteed by certain of our facilities available of $86 to finance working capital
subsidiaries and contains customary affirmative and requirements for our China operations. The facilities are
negative covenants. Among other things, these covenants renewed annually with the respective banks. At March 1,
restrict or prohibit our ability to incur certain types or 2008, there was an aggregate of $36 in borrowings
amounts of indebtedness, incur liens on certain assets, outstanding under the facilities. Certain borrowings are
make material changes to our corporate structure or the secured by a guarantee of Best Buy Co., Inc. and bear
nature of our business, dispose of material assets, allow interest at rates specified in the credit agreements. The
non-material subsidiaries to make guarantees, engage in credit agreements for the facilities contain certain reporting
a change in control transaction, or engage in certain and operating covenants. We were in compliance with all
transactions with our affiliates. The Credit Agreement also such covenants at March 1, 2008.
contains covenants that require us to maintain a maximum
quarterly cash flow leverage ratio and a minimum Convertible Debentures
quarterly interest coverage ratio. The Credit Agreement In January 2002, we sold convertible subordinated
contains customary default provisions including, but not debentures having an aggregate principal amount of
limited to, failure to pay interest or principal when due $402. The proceeds from the offering, net of $6 in
and failure to comply with covenants. We were in offering expenses, were $396. The debentures mature in
compliance with all such covenants at March 1, 2008. 2022 and are callable at par, at our option, for cash on
Concurrent with the execution of the Credit Agreement, we or after January 15, 2007.
borrowed $1,350 under the Credit Agreement and used Holders may require us to purchase all or a portion of
$1,150 of the proceeds to repay the outstanding balance their debentures on January 15, 2012, and January 15,
on the Bridge Facility. Accordingly, the Bridge Facility was 2017, at a purchase price equal to 100% of the principal
terminated effective September 19, 2007. The remaining amount of the debentures plus accrued and unpaid
$200 borrowed under the Credit Agreement was used for interest up to but not including the date of purchase. We
general corporate purposes. have the option to settle the purchase price in cash, stock,
At March 1, 2008, $120 was outstanding and $2,380 or a combination of cash and stock. On January 15,
was available under the Credit Agreement. Amounts 2007, holders had the option to require us to purchase all
outstanding under letters of credit may reduce amounts or a portion of their debentures, at a purchase price equal
available under the Credit Agreement. to 100% of the principal amount of the debentures plus
accrued and unpaid interest up to but not including the
Our International segment has a $25 revolving demand date of purchase. However, no debentures were so
facility for our Canada operations, of which $20 is purchased.
available from February through July and $25 is available
from August through January of each year. There is no set The debentures become convertible into shares of our
expiration date for this facility. There were no borrowings common stock at a conversion rate of 21.7391 shares per
outstanding under this facility at March 1, 2008, and $0.001 principal amount of debentures, equivalent to an
March 3, 2007. Outstanding letters of credit and letters of initial conversion price of $46.00 per share, if the closing
guarantee reduced the amount available under this facility price of our common stock exceeds a specified price for
to $19 and $16 at March 1, 2008, and March 3, 2007, 20 consecutive trading days in a 30-trading day period
respectively. All borrowings under this facility are made preceding the date of conversion, if our credit rating falls
available at the sole discretion of the lender and are below specified levels, if the debentures are called for
payable on demand. Borrowings under this facility are redemption or if certain specified corporate transactions
unsecured and bear interest at rates specified in the Credit occur. During a portion of fiscal 2007, our closing stock
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