Best Buy 2013 Annual Report Download - page 51

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(2) The multiple of eight times annual rental expense in the calculation of our capitalized operating lease obligations is the multiple used for the retail sector
by one of the nationally recognized credit rating agencies that rate our creditworthiness, and we consider it to be an appropriate multiple for our lease
portfolio.
(3) We utilize net earnings including noncontrolling interests within our calculation; as such, net earnings and related cash flows attributable to
noncontrolling interests are available to service our debt and operating lease commitments.
(4) Depreciation and amortization expense includes impairments of fixed assets, investments and intangible assets (including impairments associated with
our fiscal restructuring activities).
Off-Balance-Sheet Arrangements and Contractual Obligations
Other than operating leases, we do not have any off-balance-sheet financing. A summary of our operating lease obligations by
fiscal year is included in the "Contractual Obligations" table below. Additional information regarding our operating leases is
available in Item 2, Properties, and Note 11, Leases, of the Notes to Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data, of this Transition Report on Form 10-K.
The following table presents information regarding our contractual obligations by fiscal year ($ in millions):
Payments Due by Period
Contractual Obligations Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years
Short-term debt obligations $ 596 $ 596 $ — $ — $ —
Long-term debt obligations 1,499 500 — 350 649
Capital lease obligations 80 24 36 5 15
Financing lease obligations 121 23 44 30 24
Interest payments 446 85 126 84 151
Operating lease obligations(1) 7,013 1,238 2,190 1,591 1,994
Purchase obligations(2) 3,622 2,199 976 316 131
Unrecognized tax benefits(3) 383
Deferred compensation(4) 58
Total $ 13,818 $ 4,665 $ 3,372 $ 2,376 $ 2,964
Note: For additional information refer to Note 8, Debt; Note 11, Leases; Note 13, Income Taxes and Note 15, Contingencies and Commitments, in the Notes to
Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Transition Report on Form 10-K.
(1) Operating lease obligations do not include payments to landlords covering real estate taxes and common area maintenance. These charges, if included,
would increase total operating lease obligations by $1.6 billion at February 2, 2013.
(2) Purchase obligations include agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms,
including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
Purchase obligations do not include agreements that are cancelable without penalty. Additionally, although they are not legally binding agreements, we
included open purchase orders in the table above. Substantially all open purchase orders are fulfilled within 30 days.
(3) Unrecognized tax benefits relate to uncertain tax positions recorded under accounting guidance that we adopted on March 4, 2007. As we are not able to
reasonably estimate the timing of the payments or the amount by which the liability will increase or decrease over time, the related balances have not
been reflected in the "Payments Due by Period" section of the table.
(4) Included in Long-term liabilities on our Consolidated Balance Sheet at February 2, 2013, was a $58 million obligation for deferred compensation. As the
specific payment dates for the deferred compensation are unknown, the related balances have not been reflected in the "Payments Due by Period" section
of the table.
Additionally, we have $2.7 billion in undrawn capacity on our credit facilities at February 2, 2013, which if drawn upon, would
be included as short-term debt in our Consolidated Balance Sheets.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our
financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect
the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates
and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our
consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates
and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because
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