Best Buy 2012 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2012 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 117

  • 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

49
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):
2012 2011 2010
Total cash provided by (used in):
Operating activities $ 3,293 $ 1,190 $ 2,206
Investing activities (724)(569)(540)
Financing activities (2,478)(1,357)(348)
Effect of exchange rate changes on cash 5 13 10
Increase (decrease) in cash and cash equivalents $ 96 $ (723) $ 1,328
Operating Activities
The increase in cash provided by operating activities in fiscal 2012 compared to fiscal 2011 was primarily related to the
normalization of accounts payable during fiscal 2012, following unusually low balances at the end of fiscal 2011 due to the
timing of merchandise receipts in the fourth quarter, as well as efforts to reduce inventory levels throughout fiscal 2012, which
were unusually high at the end of fiscal 2011.
The decrease in cash provided by operating activities in fiscal 2011 compared to fiscal 2010 was due primarily to an increase in
cash used for accounts payable, as well as a decrease in cash provided by accounts receivable. The increase in cash used for
accounts payable was due primarily to the timing and level of inventory receipts compared to vendor payments as we
approached fiscal 2011 year-end. As we reduced inventory receipts in January and February 2011 in response to lower holiday
sales trends, our total accounts payable declined. Cash used for inventory was also lower in fiscal 2011 compared to fiscal 2010
because the fiscal 2011 year-over-year increase in inventory was lower than in the prior year due to focused efforts to manage
inventory levels in light of comparable store sales declines. The decrease in cash provided by accounts receivable was due
primarily to the timing of several large payments due from our vendors at the end of fiscal 2011. Other fluctuations in cash
from operating activities were due primarily to higher incentive compensation payments in fiscal 2011 (relating to our fiscal
2010 performance) and other miscellaneous timing differences.
Investing Activities
The increase in cash used in investing activities in fiscal 2012 compared to fiscal 2011 was mainly due to cash used for our
acquisition of mindSHIFT Technologies, Inc. and decreased sales of auction rate securities ("ARS") in fiscal 2012 compared to
fiscal 2011.
Cash used in investing activities was relatively flat in fiscal 2011 compared to fiscal 2010, as an increase in cash used for
capital expenditures was offset by an increase in cash provided by the sale of a portion of our ARS during fiscal 2011. See
Auction Rate Securities and Restricted Cash and Capital Expenditures below for additional information.
Financing Activities
The increase in cash used in financing activities in fiscal 2012 compared to fiscal 2011 was primarily the result of $1.3 billion
of cash we used for the Mobile buy-out, an increase in cash used to repurchase our common stock and the repurchase of
convertible debentures during fiscal 2012, partially offset by the issuance of $1.0 billion of long-term debt securities in the first
quarter of fiscal 2012.
The increase in cash used in financing activities in fiscal 2011 compared to fiscal 2010 was primarily the result of $1.2 billion
of cash we used to repurchase our common stock in fiscal 2011. We had no repurchases in fiscal 2010.
Sources of Liquidity
Funds generated by operating activities, available cash and cash equivalents, and our credit facilities continue to be our most
significant sources of liquidity. We believe our sources of liquidity will be sufficient to sustain operations and to finance
anticipated expansion plans and strategic initiatives in fiscal 2013. However, in the event our liquidity is insufficient, we may
be required to limit our spending on future expansion plans, share repurchases or other business opportunities. There can be no