Best Buy 2011 Annual Report Download - page 53

Our liquidity is also affected by restricted cash balances that are pledged as collateral or restricted to use for vendor
payables, general liability insurance, workers’ compensation insurance and customer warranty and insurance programs.
Restricted cash and cash equivalents, which are included in other current assets, were $488 million and $482 million at
February 26, 2011, and February 27, 2010, respectively.
Capital Expenditures
A component of our long-term strategy is our capital expenditure program. This program includes, among other things,
investments in new stores, store remodeling, store relocations and expansions, new distribution facilities and information
technology enhancements. During fiscal 2011, we invested $744 million in property and equipment, including opening
147 new stores, expanding and remodeling certain stores, and upgrading our information technology systems and
capabilities. The 21.0% increase in our capital expenditures compared to the prior fiscal year was due primarily to
increased spending on information technology and additional store-related projects.
The following table presents our capital expenditures for each of the past three fiscal years ($ in millions):
2011 2010 2009
New stores $193 $229 $ 387
Store-related projects(1) 208 90 333
Information technology 327 275 494
Other 16 21 89
Total capital expenditures(2) $744 $615 $1,303
(1) Includes store remodels and expansions, as well as various merchandising projects.
(2) Total capital expenditures exclude non-cash capital expenditures of $81, $9 and $42 for fiscal 2011, 2010, and 2009, respectively.
Non-cash capital expenditures are comprised of capitalized leases of $52, $9 and $35, as well as additions to property and
equipment included in accounts payable of $29, $0 and $7, respectively, for each fiscal year.
Refer to Note 13, Contingencies and Commitments, 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
regarding our significant commitments for capital expenditures at February 26, 2011.
Debt and Capital
2013 Notes
In June 2008, we sold $500 million principal amount of notes due July 15, 2013 (the ‘‘2013 Notes’’). The 2013 Notes
bear interest at a fixed rate of 6.75% per year, payable semi-annually on January 15 and July 15 of each year, beginning
January 15, 2009. The interest payable on the 2013 Notes is subject to adjustment if either Moody’s Investors Service,
Inc. or Standard & Poor’s Ratings Services downgrades the rating assigned to the 2013 Notes to below investment grade.
Net proceeds from the sale of the 2013 Notes were $496 million, after an initial issuance discount of approximately
$1 million and other transaction costs.
We may redeem some or all of the 2013 Notes at any time, at a price equal to 100% of the principal amount of the
2013 Notes redeemed plus accrued and unpaid interest to the redemption date and an applicable make-whole amount
as described in the indenture relating to the 2013 Notes.
The 2013 Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and
unsubordinated debt. The 2013 Notes contain covenants that, among other things, limit our ability and the ability of our
North American subsidiaries to incur debt secured by liens, enter into sale and lease-back transactions and, in the case of
such subsidiaries, incur debt.
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