Best Buy 2011 Annual Report Download - page 119

$ in millions, except per share amounts or as otherwise noted
under the Megapath name. Upon closing of the Speakeasy sale, we received cash consideration and a minority equity
interest in the combined company. Based upon the fair value of the consideration received and the carrying value of
Speakeasy at closing, we recorded a pre-tax gain on sale of $7 in the second quarter of fiscal 2011, which is included
within investment income and other in our consolidated statements of earnings.
15. Related Party Transactions
Best Buy Europe had the following related party transactions and balances with CPW and Carphone Warehouse in fiscal
2011, 2010 and 2009:
2011 2010 2009
Revenue earned (primarily commission revenue and fees for information technology services
provided to CPW and Carphone Warehouse) $ 6 $ 63 $ 12
SG&A incurred (primarily for rent and other payroll-related costs paid to CPW and Carphone
Warehouse) 8629
Interest expense incurred on credit facility with CPW and Carphone Warehouse as lender 1 4 15
Accounts payable to CPW and Carphone Warehouse at the end of the fiscal year — 4 108
Accounts receivable from CPW and Carphone Warehouse at the end of the fiscal year 2 31 60
Balance outstanding on credit facility from CPW and Carphone Warehouse at the end of the
fiscal year (see Note 6, Debt) 98 206 584
16. Subsequent Event
In March 2011, we sold $350 principal amount of notes due March 15, 2016 (the ‘‘2016 Notes’’) and $650 principal
amount of notes due March 15, 2021 (the ‘‘2021 Notes’’, and together with the 2016 Notes, the ‘‘Notes’’). The 2016
Notes bear interest at a fixed rate of 3.75% per year, while the 2021 Notes bear interest at a fixed rate of 5.50% per
year. Interest on the Notes is payable semi-annually on March 15 and September 15 of each year, beginning
September 15, 2011. The Notes were issued at a slight discount to par, which when coupled with underwriting discounts
of $6, resulted in net proceeds from the sale of the Notes of $990.
We may redeem some or all of the Notes at any time at a redemption price equal to the greater of (i) 100% of the
principal amount of the Notes redeemed and (ii) the sum of the present values of each remaining scheduled payment of
principal and interest on the Notes redeemed discounted to the redemption date on a semiannual basis, plus accrued and
unpaid interest on the principal amount of the Notes to the redemption date as described in the indenture (including the
supplemental indenture) relating to the Notes. Furthermore, if a change of control triggering event occurs, unless we have
previously exercised our option to redeem the Notes, we will be required to offer to purchase the Notes at a price equal
to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the purchase date.
The Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and
unsubordinated debt. The Notes contain covenants that, among other things, limit our ability and the ability of our North
American subsidiaries to incur debt secured by liens or to enter into sale and lease-back transactions.
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