Best Buy 2003 Annual Report Download - page 171

Denominator (in millions):
Weighted average common shares outstanding 321.1 316.0 310.0
Effect of dilutive securities:
Employee stock options 3.7 6.5 9.0
Weighted average common shares outstanding assuming dilution 324.8 322.5 319.0
Basic earnings per share—continuing operations $ 1.93 $ 1.80 $ 1.29
Diluted earnings per share—continuing operations $ 1.91 $ 1.77 $ 1.26
Repurchase of Common Stock
In fiscal 2000, our Board of Directors authorized the purchase of up to $400 of our common stock from time to time through open
market purchases. This program has no stated expiration date. As of March 1, 2003, 2.9 million shares had been purchased and retired
at a cost of $100. No shares were purchased in fiscal 2003, 2002 or 2001.
58
$ in millions, except per share amounts
6. Net Interest Income
Net interest income in fiscal 2003, 2002 and 2001 was comprised of the following:
2003 2002 2001
Interest expense $ (30) $ (21) $ (7)
Loss on early retirement of debt — (8) —
Capitalized interest 5 1 —
Interest income 23 27 44
Net interest (expense) income (2) (1) 37
Interest expense allocated to discontinued operations (6) (19) (1)
Net interest income from continuing operations $ 4 $ 18 $ 38
We allocated interest expense to discontinued operations based upon debt that was attributable to the operations, including an $8 loss
on the early retirement of debt in fiscal 2002.
7. Operating Lease Commitments
We lease portions of our corporate facilities and conduct the majority of our retail and distribution operations from leased locations.
The terms of the lease agreements generally range from one to 20 years. The leases require payment of real estate taxes, insurance and
common area maintenance in addition to rent. Most of the leases contain renewal options and escalation clauses, and certain store
leases require contingent rents based on specified percentages of revenue. In addition, certain store leases provide us an early
cancellation option if revenue for a specified period were not to reach a specified level as defined in the lease. Other leases contain
covenants related to maintenance of financial ratios. Also, we lease certain equipment under operating leases. Transaction costs
associated with the sale and lease back of properties and any gain or loss are recognized over the terms of the lease agreements.
Proceeds from the sale and lease back of properties are included in the net change in recoverable costs from developed properties.
The composition of rental expenses for all operating leases during the past three fiscal years, including leases of buildings and
equipment, was as follows:
2003 2002 2001
Minimum rentals $ 439 $ 366 $ 286
Percentage rentals 1 1 1
Total rent expense for continuing operations $ 440 $ 367 $ 287
Minimum rentals $ 144 $ 152 $ 13
Percentage rentals 1 1 —