Best Buy 2005 Annual Report Download - page 54

of short-term and long-term investments in debt securities, available for additional working capital needs or
as well as reduced capital spending in fiscal 2005 as a investment opportunities. There can be no assurance,
result of completing the construction of our new corporate however, that we will continue to generate cash flows at
headquarters in April 2003 and the timing of new store or above current levels or that we will be able to maintain
projects. Refer to the ‘‘Capital Expenditures’’ section of this our ability to borrow under our revolving credit facilities.
MD&A for additional information. In fiscal 2005, we used In December 2004, we entered into an agreement for a
cash for the construction of new retail locations, $200 million revolving credit facility that is guaranteed by
information systems, distribution center improvements and certain of our subsidiaries. The new revolving credit
other store projects, including the conversion of 67 U.S. facility expires on December 22, 2009, and replaced a
Best Buy stores to our customer centricity platform. The $200 million revolving credit facility that was to expire on
primary purposes of the cash investment activity were to March 21, 2005. Borrowings under the new revolving
support our expansion plans, improve our operational credit facility are unsecured and bear interest at rates
efficiency and enhance shareholder value. specified in the agreement. As of February 26, 2005,
Financing Activities and February 28, 2004, $139 million and $197 million,
respectively, were available under these facilities. There
Cash used in financing activities was $459 million for were no borrowings outstanding under either of these
fiscal 2005, compared with $87 million for fiscal 2004 facilities for any period presented. However, outstanding
and cash provided by financing activities of $30 million letters of credit reduced amounts available under these
for fiscal 2003. The change from fiscal 2004 to fiscal facilities.
2005 was due primarily to the redemption in June 2004
of our convertible debentures due in 2021 for We also have inventory financing programs through
$355 million and repurchases of our common stock, which certain suppliers receive payments from a
which were partially offset by increased proceeds from designated finance company on invoices we owe them. At
the issuance of common stock in connection with our February 26, 2005, and February 28, 2004, $68 million
stock-based compensation programs. During fiscal 2005, and $70 million, respectively, were outstanding and
we repurchased $200 million of our common stock $157 million and $140 million, respectively, were
pursuant to stock repurchase programs authorized by our available for use under these inventory financing facilities.
Board of Directors in fiscal 2005 and fiscal 2000. In March 2004, our International segment entered into an
Discontinued Operations agreement for a $20 million revolving demand facility, of
which $16 million is available from February through July
Net cash used in discontinued operations was $0 for and $20 million is available from August through January
fiscal 2005, compared with $53 million for fiscal 2004 of each year. There is no set expiration date for this
and $79 million for fiscal 2003. There was no cash used facility. There were no borrowings outstanding under this
in discontinued operations in fiscal 2005 due to the sale facility at February 26, 2005. Outstanding letters of credit
of our interest in Musicland during the second quarter of and letters of guarantee reduced the amount available
fiscal 2004. under this facility to $15 million at February 26, 2005.
All borrowings under this facility are made available at
Sources of Liquidity
the sole discretion of the lender and are payable on
Funds generated by operating activities, available cash demand. Borrowings under this facility are unsecured and
and cash equivalents, and short-term investments continue bear interest at rates specified in the agreement. The
to be our most significant sources of liquidity. We believe agreement for this facility contains certain reporting and
funds generated from the expected results of operations, operating covenants. This facility replaced a $41 million
available cash and cash equivalents, and short-term unsecured credit facility, which was canceled on March 1,
investments will be sufficient to finance anticipated 2004. There were no borrowings outstanding under this
expansion plans and strategic initiatives for the next fiscal facility at February 28, 2004.
year. In addition, our revolving credit facilities are
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