Best Buy 2007 Annual Report Download - page 67

Download and view the complete annual report

Please find page 67 of the 2007 Best Buy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 119

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119

52
Item 7A.Quantitative and Qualitative Disclosures
About Market Risk.
Our debt is not subject to material interest-rate volatility
risk. The rates on a substantial 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 arising from changes in foreign
currency exchange rates related to our International
operations. 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
income generated from our short-term and long-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 $29 million based
on our short-term and long-term investments as of March 3,
2007. We do not manage our investment interest-rate
volatility risk through the use of derivative instruments.
Overall, there have been no material changes in our
primary risk exposures or management of market risks since
the prior year. We do not expect any material changes in
our primary risk exposures or management of market risks
for the foreseeable future.