Best Buy 2012 Annual Report Download - page 51

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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 $459 million and $488 million at March 3, 2012, and
February 26, 2011, respectively.
Capital Expenditures
Our capital expenditures typically include investments in new stores, store remodeling, store relocations and expansions, new
distribution facilities and information technology enhancements. During fiscal 2012, we invested $766 million in property and
equipment, including opening over 300 new stores, remodeling certain stores (primarily store merchandising projects), and
upgrading our information technology systems and capabilities.
The following table presents our capital expenditures for each of the past three fiscal years ($ in millions):
2012 2011 2010
New stores $ 171 $ 193 $ 229
Store-related projects(1) 231 208 90
Information technology 353 327 275
Other 11 16 21
Total capital expenditures(2) $ 766 $ 744 $ 615
(1) Includes store remodels and expansions, as well as various merchandising projects.
(2) Total capital expenditures exclude non-cash capital expenditures of $18, $81 and $9 for fiscal 2012, 2011, and 2010, respectively. Non-cash capital
expenditures are comprised of capitalized leases, as well as additions to property and equipment included in accounts payable.
Refer to Note 15, 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 March 3, 2012.
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 or Standard & Poor's 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 $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. Furthermore, if a change of control triggering event occurs, we will be required to offer to
purchase the remaining unredeemed Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest
to the purchase date.
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 unsecured debt.
2016 and 2021 Notes
In March 2011, we issued $350 million principal amount of notes due March 15, 2016 (the “2016 Notes”) and $650 million
principal amount of notes due March 15, 2021 (the “2021 Notes” and, together with the 2016 Notes, the “Notes”). The 2016
Notes bear interest at a fixed rate of 3.75% per year, while the 2021 Notes bear interest at a fixed rate of 5.50% per year.
Interest on the Notes is payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2011. The
Notes were issued at a slight discount to par, which when coupled with underwriting discounts of $6 million, resulted in net
proceeds from the sale of the Notes of $990 million.