Best Buy 2014 Annual Report Download - page 49

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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 3.86 and 0.45 in fiscal 2014 (12-month) and 2013 (11-month), respectively.
Our credit ratings and outlooks at March 24, 2014, are summarized below. On September 4, 2013, Fitch Ratings Ltd. ("Fitch")
reaffirmed its BB- long-term credit rating and changed its outlook from Negative to Stable. On August 21, 2013, Standard &
Poor's Ratings Services (“Standard & Poor's") reaffirmed its BB long-term credit rating and changed its outlook from Negative
to Stable. On May 28, 2013, Moody's Investors Service, Inc. ("Moody's") reaffirmed its Baa2 long-term credit rating and
changed its outlook from Developing to Negative.
Rating Agency Rating Outlook
Standard & Poor's BB Stable
Moody's Baa2 Negative
Fitch BB- 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 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 $308 million and $363 million at February 1, 2014, and
February 2, 2013, respectively. The decrease in restricted cash and cash equivalents was primarily due to the sale of our 50%
interest in Best Buy Europe.
Capital Expenditures
Our capital expenditures typically include investments in new stores, store remodeling, store relocations and expansions,
distribution facilities and information technology enhancements. During fiscal 2014 (12-month), we invested $487 million
(excluding Best Buy Europe) in property and equipment, primarily related to upgrading our information technology systems
and capabilities, and store-related projects.
The following table presents our capital expenditures for each of the past three fiscal years and fiscal 2012 (11-month recast) ($
in millions):
12-Month 11-Month 12-Month
2014 2013 2012 2012
(recast)
New stores $ 9 $ 52 $ 107 $ 107
Store-related projects(1) 115 149 158 165
Information technology(2) 353 331 274 319
Other 10 51 9 11
Total capital expenditures(3)(4) $ 487 $ 583 $ 548 $ 602
(1) Includes store remodels and various merchandising projects.
(2) Includes e-commerce projects.
(3) Excludes $60 million, $122 million, $161 million and $164 million for fiscal 2014 (12-month), 2013 (11-month), 2012 (11-month recast) and 2012 (12-
month), respectively, related to Best Buy Europe, which was sold on June 26, 2013.
(4) Total capital expenditures exclude non-cash capital expenditures of $13 million, $29 million, $13 million and $18 million for fiscal 2014 (12-month),
2013 (11-month), 2012 (11-month recast) and 2012 (12-month), respectively. Non-cash capital expenditures are comprised of capitalized leases, as well
as additions to property and equipment included in accounts payable.