Long-Term Debt Maturities

Entity Registrant Name BEST BUY CO INC
CIK 0000764478
Accession number 0000764478-14-000011
Link to XBRL instance http://www.sec.gov/Archives/edgar/data/764478/000076447814000011/bby-20140201.xml
Fiscal year end --02-01
Fiscal year focus 2014
Fiscal period focus FY
Current balance sheet date 2014-02-01
Current year-to-date income statement start date 2013-02-03

Commentary All disclosures are as expected.

Level 1 (Note level) Text Block concept us-gaap:DebtDisclosureTextBlock
Debt
 
Short-Term Debt
 
Short-term debt consisted of the following ($ in millions):
 
February 1, 2014
 
February 2, 2013
 
Principal
Balance
 
Interest
Rate
 
Principal
Balance
 
Interest
Rate
Europe revolving credit facility(1)
$

 
%
 
$
596

 
2.0
%
 
 
12-Month
 
11-Month
Fiscal Year
 
2014
 
2013
Maximum month-end amount outstanding during the year(1)
 
$
597

 
$
596

Average amount outstanding during the year(1)
 
135

 
477


(1)
Amounts relate to our previous £400 million Europe unsecured revolving credit facility agreement (the "RCF"). Interest rates under the previous RCF were variable, based on LIBOR plus an applicable margin based on Best Buy Europe's fixed charges coverage ratio. As described in Note 4, Discontinued Operations, we sold our interest in Best Buy Europe on June 26, 2013.

U.S. Revolving Credit Facilities

On June 25, 2013, we entered into a $500 million 364-day senior unsecured revolving credit facility agreement (the "364-Day Facility Agreement") with a syndicate of lenders. The 364-Day Facility Agreement replaces the previous $1.0 billion senior unsecured revolving credit facility with a syndicate of banks, which was originally scheduled to expire on August 30, 2013, but was terminated on June 25, 2013.

The interest rate under the 364-Day Facility Agreement is variable and is determined at the registrant's option as either: (i) the sum of (a) the greatest of (1) JPMorgan's prime rate, (2) the federal funds rate plus 0.5%, and (3) the one-month London Interbank Offered Rate (“LIBOR”) plus 1.0%, and (b) a variable margin rate (the “ABR Margin”); or (ii) the LIBOR plus a variable margin rate (the “LIBOR Margin”). In addition, a facility fee is assessed on the commitment amount. The ABR Margin, LIBOR Margin and the facility fee are based upon our current senior unsecured debt rating by Standard and Poor's Rating Services and Moody's Investors Services, Inc. Under the 364-Day Facility Agreement, the ABR Margin ranges from 0.0% to 0.6%, the LIBOR Margin ranges from 0.925% to 1.6%, and the facility fee ranges from 0.075% to 0.275%. The 364-Day Facility Agreement terminates in June 2014 (subject to a one-year term-out option).

On October 7, 2011, we entered into a $1.5 billion five-year unsecured revolving credit facility agreement (the "Five-Year Facility Agreement and, collectively with the 364-Day Facility Agreement, the "Agreements") with a syndicate of banks. The interest rates under the Five-Year Facility Agreement is variable and determined at our option as: (i) the sum of (a) the greatest of JPMorgan's prime rate, the federal funds rate plus 0.5%, or the one-month London Interbank Offered Rate (“LIBOR”) plus 1.0%, and (b) a margin (the “ABR Margin”); or (ii) the LIBOR plus a margin (the “LIBOR Margin”). In addition, a facility fee is assessed on the commitment amount. The ABR Margin, LIBOR Margin and the facility fee are based upon our long-term credit ratings. Under the Five-Year Facility Agreement, the ABR Margin ranges from 0.0% to 0.475%, the LIBOR Margin ranges from 0.875% to 1.475%, and the facility fee ranges from 0.125% to 0.275%. The Five-Year Facility Agreement terminates in October 2016.

The Agreements permit borrowings of up to $2.0 billion (which may be increased to up to $2.5 billion at our option under certain circumstances) and a $300 million letter of credit sublimit. At February 1, 2014, and February 2, 2013, there were no borrowings outstanding and at February 1, 2014, $2.0 billion was available under the Agreements.
 
The Agreements are guaranteed by specified subsidiaries of Best Buy Co., Inc. and contain customary affirmative and negative covenants. Among other things, these covenants restrict Best Buy Co., Inc. or its subsidiaries' ability to incur certain types or amounts of indebtedness, incur liens on certain assets, make material changes in corporate structure or the nature of its business, dispose of material assets, engage in a change in control transaction, make certain foreign investments, enter into certain restrictive agreements or engage in certain transactions with affiliates. The Agreements also contain covenants that require us to maintain a maximum quarterly cash flow leverage ratio and a minimum quarterly interest coverage ratio. The Agreements contain customary default provisions including, but not limited to, failure to pay interest or principal when due and failure to comply with covenants.

Canada Revolving Demand Facility

We have $4 million in a revolving demand facility available to our Canada operations. There were no borrowings outstanding under the facility at February 1, 2014, or February 2, 2013. There is no set expiration date for the facility. All borrowings under the facility are made available at the sole discretion of the lender and are payable on demand. Borrowings under the facility bear interest at rates specified in the credit agreement for the facility. Borrowings are secured by a guarantee of Best Buy Co., Inc.

China Revolving Demand Facilities

We have $158 million in revolving demand facilities available to our China operations, of which no borrowings were outstanding at February 1, 2014, or February 2, 2013. The facilities are renewed annually with the respective banks. All borrowings under these facilities bear interest at rates specified in the related credit agreements, are made available at the sole discretion of the respective lenders and are payable on demand. Certain of these facilities are secured by a guarantee of Best Buy Co., Inc.
Long-Term Debt
 
Long-term debt consisted of the following ($ in millions):
 
February 1, 2014
 
February 2, 2013
2013 Notes
$

 
$
500

2016 Notes
349

 
349

2018 Notes
500

 

2021 Notes
649

 
648

Financing lease obligations, due 2015 to 2026, interest rates ranging from 3.0% to 8.1%
95

 
122

Capital lease obligations, due 2015 to 2036, interest rates ranging from 1.9% to 9.3%
63

 
80

Other debt, due 2017, interest rate 6.7%
1

 
1

Total long-term debt
1,657

 
1,700

Less: current portion(1)
(45
)
 
(547
)
Total long-term debt, less current portion
$
1,612

 
$
1,153

(1)
Our 2013 Notes due July 15, 2013, which we retired on July 15, 2013, are classified in the current portion of long-term debt as of February 2, 2013.

2013 Notes
 
We retired our $500 million principal amount of notes plus accrued interest when they matured on July 15, 2013, using available cash.
 
2018 Notes
 
On July 16, 2013, we completed the sale of $500 million principal amount of notes due August 1, 2018 (the “2018 Notes”). The 2018 Notes bear interest at a fixed rate of 5.00% per year, payable semi-annually on February 1 and August 1 of each year, beginning on February 1, 2014. Net proceeds from the sale of the 2018 Notes were $495 million, after underwriting and issue discounts totaling $5 million.
 
We may redeem some or all of the 2018 Notes at any time, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2018 Notes to be redeemed and (2) the sum of the present values of each remaining scheduled payment of principal and interest on the 2018 Notes to be redeemed discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 50 basis points. Furthermore, if a change of control triggering event occurs, we will be required to offer to purchase the remaining unredeemed 2018 Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the purchase date.
 
The 2018 Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and unsubordinated debt. The 2018 Notes contain covenants that, among other things, limit our ability and the ability of our subsidiaries to incur debt secured by liens and enter into sale and lease-back transactions.
 
2016 and 2021 Notes
 
In March 2011, we issued $350 million principal amount of notes due March 15, 2016 (the “2016 Notes”) and $650 million 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 on September 15, 2011. The Notes were issued at a slight discount to par, which when coupled with underwriting discounts of $6 million, resulted in net proceeds from the sale of the Notes of $990 million.
 
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 and (ii) the sum of the present values of each remaining scheduled payment of principal and interest discounted to the redemption date on a semiannual basis, plus accrued and unpaid interest on the principal amount 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, we will be required to offer to purchase the remaining unredeemed Notes at a price equal to 101% of their principal amount, 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 to incur debt secured by liens or to enter into sale and lease-back transactions.
 
Other
 
The fair value of long-term debt approximated $1,690 million and $1,652 million at February 1, 2014, and February 2, 2013, respectively, based primarily on the ask prices quoted from external sources, compared to carrying values of $1,657 million and $1,700 million, respectively. If our long-term debt was recorded at fair value, it would be classified as Level 1.
 
At February 1, 2014, the future maturities of long-term debt, including capitalized leases, consisted of the following ($ in millions):
Fiscal Year
 
 
2015
 
$
45

2016
 
38

2017
 
372

2018
 
16

2019
 
509

Thereafter
 
677

Total long-term debt
 
$
1,657

Level 4 (Note level) Text Block concept - Maturities of Long Term Debt us-gaap:ScheduleOfMaturitiesOfLongTermDebtTableTextBlock
At February 1, 2014, the future maturities of long-term debt, including capitalized leases, consisted of the following ($ in millions):
Fiscal Year
 
 
2015
 
$
45

2016
 
38

2017
 
372

2018
 
16

2019
 
509

Thereafter
 
677

Total long-term debt
 
$
1,657

Level 4 (Note level) Text Block concept - Debt Instruments us-gaap:ScheduleOfDebtInstrumentsTextBlock
Long-term debt consisted of the following ($ in millions):
 
February 1, 2014
 
February 2, 2013
2013 Notes
$

 
$
500

2016 Notes
349

 
349

2018 Notes
500

 

2021 Notes
649

 
648

Financing lease obligations, due 2015 to 2026, interest rates ranging from 3.0% to 8.1%
95

 
122

Capital lease obligations, due 2015 to 2036, interest rates ranging from 1.9% to 9.3%
63

 
80

Other debt, due 2017, interest rate 6.7%
1

 
1

Total long-term debt
1,657

 
1,700

Less: current portion(1)
(45
)
 
(547
)
Total long-term debt, less current portion
$
1,612

 
$
1,153

(1)
Our 2013 Notes due July 15, 2013, which we retired on July 15, 2013, are classified in the current portion of long-term debt as of February 2, 2013.


Level 4 Details Key Concepts: Long-term Debt Maturities

Description Fact value US GAAP XBRL Concept
Year 1 (Current portion) 45,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths
Year 2 38,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInYearTwo
Year 3 372,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInYearThree
Year 4 16,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFour
Year 5 509,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFive
Thereafter 677,000,000 us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalAfterYearFive
Total Long-term Debt 1,657,000,000 us-gaap:LongTermDebt
CHECK 0

*


(Classified balance sheet) Deferred tax assets (liabilities), net components current/noncurrent asset/liability

Description Fact value US GAAP XBRL Concept
Current portion 45,000,000 us-gaap:LongTermDebtCurrent
Noncurrent portion 1,612,000,000 us-gaap:LongTermDebtAndCapitalLeaseObligations
Total Long-Term Debt 1,657,000,000 us-gaap:LongTermDebt
CHECK 0

*


*

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