Best Buy 2011 Annual Report Download - page 52

insufficient, we may be required to limit our future expansion plans or we may not be able to pursue business
opportunities. 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.
We have a $2.3 billion five-year unsecured revolving credit facility, as amended (the ‘‘Credit Facility’’), with a syndicate of
banks, with no borrowings outstanding at February 26, 2011. The Credit Facility expires in September 2012. At April 20,
2011, we had no borrowings outstanding under the Credit Facility.
We have $813 million available under secured and unsecured revolving credit facilities related to our International
segment operations, of which $557 million was outstanding at February 26, 2011.
We previously had a revolving credit line with UBS AG and its affiliates (collectively, ‘‘UBS’’) secured by the par value of
our UBS-brokered ARS. However, pursuant to the settlement described in Note 3, Investments, of the Notes to
Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report
on Form 10-K, the revolving credit line expired by its terms during the second quarter of fiscal 2011 when UBS bought
back all of our UBS-brokered ARS.
Our ability to access our credit facilities is subject to our compliance with the terms and conditions of our facilities,
including financial covenants. The financial covenants require us to maintain certain financial ratios. At February 26,
2011, 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 credit 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 5.78 and 6.08 in fiscal 2011 and 2010, respectively.
Our credit ratings and outlooks at April 20, 2011, are summarized below and are consistent with the ratings and outlooks
reported in our Annual Report on Form 10-K for the fiscal year ended February 27, 2010.
Rating Agency Rating Outlook
Fitch Ratings Ltd. BBB+ Negative
Moody’s Investors Service, Inc. Baa2 Stable
Standard & Poor’s Ratings Services BBBStable
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.
We are not aware of any current circumstances which could cause our credit ratings to be significantly downgraded. If a
downgrade were to occur, it could adversely impact, among other things, our future borrowing costs, access to capital
markets, vendor financing terms and future new-store occupancy costs. In addition, the conversion rights of the holders of
our convertible debentures could be accelerated if our credit ratings were to be downgraded.
Auction Rate Securities and Restricted Cash
At February 26, 2011, and February 27, 2010, we had $110 million and $280 million, respectively, invested in ARS
recorded at fair value within short-term investments and equity and other investments (long-term) in our consolidated
balance sheets. The majority of our ARS portfolio is AAA/Aaa-rated and collateralized by student loans, which are
guaranteed 95% to 100% by the U.S. government. Due to the auction failures that began in mid-February 2008, we have
been unable to liquidate some of our ARS. The investment principal associated with our ARS subject to failed auctions will
not be accessible until successful auctions occur, a buyer is found outside of the auction process, the issuers establish a
different form of financing to replace these securities, or final payments are due according to the contractual maturities of
the debt issues, which range from five to 32 years. We intend to hold our ARS until we can recover the full principal
amount through one of the means described above, and have the ability to do so based on our other sources of liquidity.
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