Best Buy 2011 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 2011 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 138

  • 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
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138

third quarter of fiscal 2010. Excluding the impact of the fiscal 2010 discrete foreign tax matters, the fiscal 2010 ETR
would have been 38.3%. Additionally, excluding the impact of the fiscal 2009 impairment charges, the fiscal 2009 ETR
would have been 36.8%.
Net Earnings Attributable to Noncontrolling Interests
The increase in net earnings attributable to noncontrolling interests in fiscal 2011 compared to fiscal 2010 was due to the
higher net earnings of Best Buy Europe, in which Carphone Warehouse Group plc has a 50% noncontrolling interest. The
increase in net earnings attributable to noncontrolling interests in fiscal 2010 compared to fiscal 2009 was due to having
a full year of earnings from Best Buy Europe in fiscal 2010, as we did not acquire Best Buy Europe until the second
quarter of fiscal 2009.
Impact of Inflation and Changing Prices
Highly competitive market conditions and the general economic environment minimized inflation’s impact on the selling
prices of our products and services, and on our expenses. In addition, price deflation and the continued commoditization
of key technology products limited our ability to increase our gross profit rate.
Liquidity and Capital Resources
Summary
We continue to closely manage our liquidity and capital resources. The key variables we use to manage liquidity
requirements and investments to support our growth strategies include discretionary SG&A spending, capital expenditures,
credit facilities and short-term borrowing arrangements, working capital and our share repurchase program.
Capital expenditures, particularly with respect to opening new stores and remodeling existing stores, is a component of our
cash flow and capital management strategy which, to a large extent, we can adjust in response to economic and other
changes in our business environment. In both fiscal 2011 and 2010, we moderated our capital spending in response to
the challenging economic environment relative to our recent historical trend.
We ended fiscal 2011 with $1.1 billion of cash and cash equivalents and short-term investments, compared to
$1.9 billion at the end of fiscal 2010. The decrease in cash and cash equivalents was due primarily to the $1.2 billion of
cash utilized in fiscal 2011 to repurchase shares of our common stock, as well as decreased cash generated from
operations in fiscal 2011 as compared to fiscal 2010. Working capital, the excess of current assets over current liabilities,
was $1.8 billion at the end of fiscal 2011, an increase from $1.6 billion at the end of fiscal 2010. Operating cash flow
decreased 46.1% to $1.2 billion in fiscal 2011 compared to fiscal 2010, while capital expenditures increased 21.0% to
$744 million.
Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for each of the past three
fiscal years ($ in millions):
2011 2010 2009
Total cash provided by (used in):
Operating activities $ 1,190 $2,206 $ 1,877
Investing activities (569) (540) (3,427)
Financing activities (1,357) (348) 591
Effect of exchange rate changes on cash 13 10 19
(Decrease) increase in cash and cash equivalents $ (723) $1,328 $ (940)
50