Best Buy 2016 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2016 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 116

  • 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

44
outlook. On August 26, 2015, Fitch Ratings Limited ("Fitch") upgraded its long-term credit rating from BB to BBB- with a
Stable outlook.
Rating Agency Rating Outlook
Standard & Poor's BB+ Stable
Moody's Baa1 Stable
Fitch BBB- Stable
Credit rating agencies review their ratings periodically and, therefore, the credit rating assigned to us by each agency may be
subject to revision at any time. Accordingly, we are not able to predict whether our current credit ratings will remain as
disclosed above. Factors that can affect our credit ratings include changes in our operating performance, the economic
environment, conditions in the retail and consumer electronics industries, our financial position and changes in our business
strategy. If further changes in our credit ratings were to occur, they could impact, among other things, interest costs for certain
of our credit facilities, our future borrowing costs, access to capital markets, vendor financing terms and future new-store
leasing costs.
Restricted Cash
Our liquidity is also affected by restricted cash balances that are pledged as collateral or restricted to use for general liability
insurance and workers' compensation insurance. Restricted cash and cash equivalents related to our continuing operations,
which are included in other current assets, remained flat at $185 million and $184 million at January 30, 2016, and January 31,
2015, respectively.
Capital Expenditures
Our capital expenditures typically include investments in our stores, distribution capabilities and information technology
enhancements (including e-commerce). During fiscal 2016, we invested $649 million in property and equipment, primarily
related to upgrading our information technology systems and capabilities, and store-related projects.
The following table presents our capital expenditures for each of the past three fiscal years ($ in millions):
2016 2015 2014
New stores $ 5 $ 3 $ 8
Store-related projects(1) 241 177 110
E-commerce and information technology 390 355 350
Other 13 16 9
Total capital expenditures(2)(3) $ 649 $ 551 $ 477
(1) Includes store remodels and various merchandising projects.
(2) Excludes $10 million and $70 million for fiscal 2015 and 2014, respectively, related to Five Star and Best Buy Europe.
(3) Total capital expenditures exclude non-cash capital expenditures of $92 million, $14 million and $13 million for fiscal 2016, fiscal 2015 and 2014,
respectively. Non-cash capital expenditures are comprised of capitalized leases, as well as additions to property and equipment included in accounts
payable.
In fiscal 2017, we estimate cash capital expenditures of approximately $650 million to $700 million, with the focus on retail
store, e-commerce and information technology projects.
Debt and Capital
We have $350 million principal amount of notes due March 15, 2016 (the “2016 Notes”), $500 million principal amount of
notes due August 1, 2018 (the “2018 Notes”) and $650 million principal amount of notes due March 15, 2021 (the “2021
Notes”). 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 2016 Notes, 2018 Notes and
2021 Notes. In March 2016, we paid the balance of the 2016 Notes using existing cash resources.
Other