Best Buy 2016 Annual Report Download - page 51

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Operating Activities
The decrease in cash provided by operating activities in fiscal 2016 compared to fiscal 2015 was primarily due to the timing of
inventory receipts and income tax payments. During fiscal 2016, we decided to bring Holiday inventory in early and the Super
Bowl shifted to the first quarter of fiscal 2017, which caused us to hold our inventory longer and settle our accounts payable
related to that inventory prior to year-end. In addition, we paid more income taxes in fiscal 2016 primarily due to the timing of
when payments were made.
The increase in cash provided by operating activities in fiscal 2015 compared to fiscal 2014 was primarily due to improved
management of working capital in fiscal 2015. Additionally, in fiscal 2014 there were larger cash outflows from accounts
payable, following unusually high balances at the end of fiscal 2013 due to timing of inventory receipts.
Investing Activities
The decrease in cash used in investing activities in fiscal 2016 compared to fiscal 2015 was primarily due to increased sales of
short-term investments partially offset by capital expenditures (see Capital Expenditures below).
The increase in cash used in investing activities in fiscal 2015 compared to fiscal 2014 was primarily due to increased
purchases of short-term investments in fiscal 2015.
Financing Activities
The increase in cash used by financing activities in fiscal 2016 compared to fiscal 2015 was primarily due to share repurchases
and dividend payments. In fiscal 2016, we purchased $1.0 billion of common stock as part of our June 2011 share repurchase
program. In addition, we increased our normal dividend from 2015 to 2016 and paid a special dividend in 2016.
The decrease in cash provided by financing activities in fiscal 2015 compared to fiscal 2014 was primarily due to decreased
borrowing and decreased proceeds from the issuance of common stock, primarily from the exercise of employee stock options.
Sources of Liquidity
Funds generated by operating activities, available cash and cash equivalents, short-term investments, our credit facilities, and
other debt arrangements and trade payables are our most significant sources of liquidity. We believe our sources of liquidity
will be sufficient to sustain operations and to finance anticipated capital investments and strategic initiatives. However, in the
event our liquidity is insufficient, we may be required to limit our spending. There can be no assurance that we will continue to
generate cash flows at or above current levels or that we will be able to maintain our ability to borrow under our existing credit
facilities or obtain additional financing, if necessary, on favorable terms.
On June 30, 2014, we entered into a new $1.25 billion five-year senior unsecured revolving credit facility (the "Five-Year
Facility Agreement") with a syndicate of banks that expires in June 2019. The Five-Year Facility Agreement replaced the
previous $1.5 billion unsecured revolving credit facility, which was originally scheduled to expire in October 2016, but was
terminated on June 30, 2014. At January 31, 2015, and January 30, 2016, we had no borrowings outstanding under the Five-
Year Facility Agreement. Refer to Note 5, Debt, of the Notes to Consolidated Financial Statements, included in Item 8,
Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information about our credit
facilities.
Our ability to access our revolving credit facility under the Five-Year Facility Agreement is subject to our compliance with the
terms and conditions of the facility, including financial covenants. The financial covenants require us to maintain certain
financial ratios. At January 30, 2016, we were in compliance with all such financial covenants. If an event of default were to
occur with respect to any of our other debt, it would likely constitute an event of default under our facilities as well.
An interest coverage ratio represents the ratio of pre-tax earnings before fixed charges (interest expense and the interest portion
of rent expense) to fixed charges. Our interest coverage ratio, calculated as reported in Exhibit No. 12.1 of this Annual Report
on Form 10-K, was 5.16 and 5.08 in fiscal 2016 and fiscal 2015, respectively.
Our credit ratings and outlooks at March 21, 2016, are summarized below. On August 15, 2015, Standard & Poor's Rating
Services ("Standard & Poor's") upgraded its long-term credit rating from BB to BB+ with a Stable outlook. On August 24,
2015, Moody's Investors Service, Inc. ("Moody's") upgraded its long-term credit rating from Baa2 to Baa1 with a Stable