Best Buy 2016 Annual Report Download - page 50

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42
(2) Represents charges related to the Canadian brand consolidation, primarily due to retention bonuses and other store-related costs, that did not qualify as
restructuring charges.
(3) Represents the acceleration of a non-cash tax benefit of $353 million as a result of reorganizing certain European legal entities to simplify our overall
structure in the first quarter of fiscal 2015.
(4) Income tax impact of Non-GAAP adjustments is the summation of the calculated income tax charge related to each non-GAAP non-income tax
adjustment. Income tax charge is calculated using the statutory tax rates in effect during the period of the related non-GAAP adjustment.
(5) Represents the tax impact of the Best Buy Europe sale and resulting required tax allocation between continuing and discontinued operations.
Non-GAAP operating income for fiscal 2016 increased $69 million compared to fiscal 2015. The increase was driven by
increased revenue in the Domestic segment, increased Enterprise gross profit rate and continued SG&A cost reductions in both
segments primarily due to the realization of our Renew Blue cost reduction initiatives and tighter expense management. The
increase in non-GAAP operating income resulted in a year-over-year increase in non-GAAP net earnings from continuing
operations and non-GAAP diluted earnings per share from continuing operations in fiscal 2016 compared to fiscal 2015.
Non-GAAP operating income for fiscal 2015 increased $334 million compared to fiscal 2014, and non-GAAP operating
income as a percent of revenue increased to 3.7%. The increase in non-GAAP operating income was driven by SG&A cost
reductions in both segments primarily due to the realization of our Renew Blue cost reduction initiatives and tighter expense
management, partially offset by a decline in revenue in our International segment. The increase in non-GAAP operating income
resulted in a year-over-year increase in non-GAAP net earnings from continuing operations and non-GAAP diluted earnings
per share from continuing operations in fiscal 2015 compared to fiscal 2014.
Liquidity and Capital Resources
Summary
We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including the level
of investment required to support our business strategies, the performance of our business, capital expenditures, credit facilities
and short-term borrowing arrangements and working capital management. Capital expenditures are a component of our cash
flow and capital management strategy which, to a large extent, we can adjust in response to economic and other changes in our
business environment. We have a disciplined approach to capital allocation, which focuses on investing in key priorities that
support our Renew Blue transformation.
The following table summarizes our cash and cash equivalents and short-term investments at January 30, 2016, and January 31,
2015 ($ in millions):
January 30, 2016 January 31, 2015
Cash and cash equivalents $ 1,976 $ 2,432
Short-term investments 1,305 1,456
Total cash and cash equivalents and short-term investments $ 3,281 $ 3,888
The decrease in cash and cash equivalents from January 31, 2015, was primarily due to a resumption of share repurchases, a
special dividend and an increase in the regular quarterly dividend. This was partially offset by cash generated from operating
activities.
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):
2016 2015 2014
Total cash provided by (used in):
Operating activities $ 1,322 $ 1,935 $ 1,094
Investing activities (419)(1,712)(517)
Financing activities (1,515)(223) 319
Effect of exchange rate changes on cash (38)(52)(44)
Increase (decrease) in cash and cash equivalents $ (650)$ (52) $ 852