Best Buy 2015 Annual Report Download - page 52

Table of Contents
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incentives, including stock options and our employee stock purchase plan, and optimizing our capital structure. We consider
several factors in determining whether to make share repurchases including, among other things, our cash needs, the
availability of funding, our future business plans and the market price of our stock. If we decide to make future share
repurchases, we expect that cash provided by future operating activities, as well as available cash and cash equivalents, will be
the sources of funding for our share repurchase program.
In fiscal 2015 and fiscal 2014, we did not repurchase or retire any shares. In fiscal 2013 (11-month), we repurchased and retired
6.3 million shares at a cost of $122 million. At the end of fiscal 2015 (12-month), $4.0 billion of the $5.0 billion share
repurchase program authorized by our Board in June 2011 was available for future share repurchases. Repurchased shares have
been retired and constitute authorized but unissued shares.
In fiscal 2004, our Board initiated the payment of a regular quarterly cash dividend on our common stock. A quarterly cash
dividend has been paid in each subsequent quarter. The payment of cash dividends is subject to customary legal and contractual
restrictions. During fiscal 2015, we made four cash dividend payments totaling $0.72 per share, or $251 million in the
aggregate.
On March 3, 2015, we announced a plan to return capital to shareholders. The plan includes a special, one-time dividend of
$0.51 per share, or approximately $180 million, and a 21% increase in our regular quarterly dividend to $0.23 per share. We
plan to resume share repurchases under the June 2011 program, with the intent to repurchase $1.0 billion in shares over the next
three years.
Other Financial Measures
Our debt to earnings ratio was 1.3 as of January 31, 2015, compared to 2.4 as of February 1, 2014, due primarily to an increase
in net earnings in the 12 months ended January 31, 2015 compared to the prior year. Our adjusted debt to EBITDAR ratio,
which includes capitalized operating lease obligations in its calculation, was 2.8 and 3.2 as of January 31, 2015 and February 1,
2014, respectively. The decrease in the ratio was due to a decrease in capitalized operating lease obligations and an increase in
EBITDAR.
Our adjusted debt to EBITDAR ratio is considered a non-GAAP financial measure and should be considered in addition to,
rather than as a substitute for, the most directly comparable ratio determined in accordance with GAAP. We have included this
information in our MD&A as we view the adjusted debt to EBITDAR ratio as an important indicator of our creditworthiness.
Furthermore, we believe that our adjusted debt to EBITDAR ratio is important for understanding our financial position and
provides meaningful additional information about our ability to service our long-term debt and other fixed obligations and to
fund our future growth. We also believe our adjusted debt to EBITDAR ratio is relevant because it enables investors to compare
our indebtedness to that of retailers who own, rather than lease, their stores. Our decision to own or lease real estate is based on
an assessment of our financial liquidity, our capital structure, our desire to own or to lease the location, the owner’s desire to
own or to lease the location, and the alternative that results in the highest return to our shareholders.
Our adjusted debt to EBITDAR ratio is calculated as follows:
Adjusted debt to EBITDAR = Adjusted debt
EBITDAR
The most directly comparable GAAP financial measure to our adjusted debt to EBITDAR ratio is our debt to net earnings ratio,
which excludes capitalized operating lease obligations from debt in the numerator of the calculation and does not adjust net
earnings in the denominator of the calculation.