Best Buy Confirms Significant Decline in Fiscal Third Quarter 2013 Earnings

  Best Buy Confirms Significant Decline in Fiscal Third Quarter 2013 Earnings

                      Previously Announced on October 24

                   Adjusted (non-GAAP) diluted EPS of $0.03

                             GAAP EPS of ($0.04)

Business Wire

MINNEAPOLIS -- November 20, 2012

Best Buy Co., Inc. (NYSE: BBY) today announced a GAAP net loss from continuing
operations of $13 million, or $0.04 per share, for the three months ended
November 3, 2012 compared to net earnings from continuing operations of $173
million, or $0.47 per diluted share for the prior-year period. Excluding
previously announced restructuring charges, adjusted (non-GAAP) net earnings
from continuing operations for the third quarter of fiscal 2013 were $10
million, or $0.03 per diluted share compared to $173 million and $0.47 for the
prior-year period. Comparable store sales were down during the quarter and
adjusted (non-GAAP) operating income declined significantly.

                                                                   
                                       Three Months Ended
                                       Nov. 3, 2012  Oct. 29, 2011   Change
Comparable store sales % change^1      (4.3%)         (0.7%)          (360bps)
Adjusted (non-GAAP) operating          $48            $381            (87%)
income^2
GAAP Operating income                  $12            $381            (97%)
Adjusted (non-GAAP) diluted EPS from   $0.03          $0.47           (94%)
continuing operations^2
GAAP EPS from continuing operations    ($0.04)        $0.47           --
Adjusted return on invested            10.1%          10.7%           (60bps)
capital^3
                                                                      

“In line with trends experienced over the last three years, Best Buy’s third
quarter financial performance was clearly unsatisfactory. On November 13, we
shared our candid assessment of Best Buy’s situation and unveiled Renew Blue,
a set of priorities to begin re-invigorating the company’s performance and
rejuvenating Best Buy. The results we are reporting today only strengthen our
sense of urgency and purpose," said Hubert Joly, Best Buy president and CEO.

Domestic Segment

Operating Income

Excluding restructuring charges primarily related to previously announced
store closures, the Domestic segment operating income for the three months
ended November 3, 2012 declined to $50 million ($16 million on a GAAP basis)
from $249 million in the prior-year period. The decline was due to a lower
gross profit rate, higher SG&A expense and lower revenue.

Revenue

The Domestic segment revenue was $7.7 billion and declined 4.7 percent
compared to the prior year period. The Domestic segment revenue decline
reflected a 4.0 percent comparable store sales decline and the impact of store
closures.

Best Buy recorded revenue of $431 million in its online business, with growth
in excess of 10 percent, and registered positive comparable store sales growth
in mobile phones, appliances and tablets/eReaders. This growth was more than
offset by comparable store sales declines in notebooks, gaming, digital
imaging and televisions. The company believes that tablet and notebook
comparable store sales were negatively impacted by slower consumer purchasing
in anticipation of major product launches.

Gross Profit

Domestic segment gross profit was $1.9 billion and decreased 9 percent,
reflecting a rate decline of 100 basis points compared to the prior-year
period. The gross profit dollars were helped by the growth of mobile phones
but the rate suffered from unfavorable product mix in mobile phones and
televisions, as well as from the impact of product transitions ahead of key
new launches.

Selling, General and Administrative Expenses (“SG&A”)^4

Domestic segment SG&A expense was $1.8 billion and increased 1 percent
compared to the prior-year period. This increase was due to increased training
and higher compensation costs for sales associates, as well as executive
transition costs. Excluding the impact of these costs and the absence of the
Best Buy Mobile profit share payment, Domestic SG&A expense was approximately
flat compared to the prior-year period.

International Segment

Operating Income

Excluding previously announced restructuring charges, the International
segment reported an adjusted operating loss of $2 million ($4 million on a
GAAP basis) for the three months ended November 3, 2012. The decline was due
to Canada, Europe and China, driven by lower revenue in Canada and China and
lower gross profit in Europe.

Revenue

The International segment revenue was $3.1 billion and declined less than one
percent compared to the prior-year period. Comparable store sales declined 5.2
percent, as comparable store sales growth in Europe was more than offset by
declines in Canada and China.

Gross Profit

International segment gross profit was $731 million and declined 11 percent,
reflecting a rate decline of 280 basis points compared to the prior-year
period. The rate decline was driven primarily by Europe and due largely to
increased mix of lower-margin wholesale sales, and a price competitive
environment for mobile phones coupled with mix into more expensive handsets.

Selling, General and Administrative Expenses^4

International segment SG&A expense was $733 million and increased 7 percent
compared to the prior-year period. Excluding the impact from the absence of
the Best Buy Mobile profit share payment, International SG&A expense was flat
compared to the prior-year period.

Please see the table titled “Reconciliation of Non-GAAP Financial Measures”
attached to this release for more detail.

Dividends

On October 2, 2012, the company paid a quarterly dividend of $0.17 per common
share outstanding, or $57 million in the aggregate.

Fiscal 2013 Financial Guidance

The company currently expects to generate free cash flow^5 in the range of
$850 million to $1.05 billion for fiscal 2013. This amount compares with the
company’s previously communicated range of $1.25 to $1.5 billion that had been
provided on August 21, 2012. The company’s free cash flow guidance excludes
the impact of previously announced restructuring activities and includes a
change in restricted cash related to working capital.

Holiday Sales Results

The company is planning to announce revenue results for the nine weeks ending
January 5, 2013 (fiscal November and December) on January 11, 2013.

Conference Call

Best Buy is scheduled to conduct an earnings conference call at 9:00 a.m.
Eastern Time (8:00 a.m. Central Time) on November 20, 2012. A webcast of the
call is expected to be available on its Web site at www.investors.bestbuy.com 
both live and after the call. A telephone replay is also available starting at
approximately 12:00 pm Eastern Time (11:00 a.m. Central Time) on November 20
through November 27. The dial-in number for the replay is 800-406-7325
(domestic) or 303-590-3030 (international), and the access code is 4573748.

(1) ^ Best Buy’s comparable store sales is comprised of revenue at stores,
call centers, and websites operating for at least 14 full months as well as
revenue related to other comparable sales channels. Relocated stores, as well
as remodeled, expanded, and downsized stores closed more than 14 days, are
excluded from the comparable store sales calculation until at least 14 full
months after reopening. Acquired stores are included in the comparable store
sales calculation beginning with the first full quarter following the first
anniversary of the date of the acquisition. The portion of the calculation of
the comparable store sales percentage change attributable to the International
segment excludes the effect of fluctuations in foreign currency exchange
rates. The method of calculating comparable store sales varies across the
retail industry. As a result, Best Buy’s method of calculating comparable
store sales may not be the same as other retailers’ methods.

(2) The company defines adjusted operating income for the periods presented as
its reported operating income for those periods calculated in accordance with
accounting principles generally accepted in the U.S. (“GAAP”) adjusted to
exclude the effects of previously announced restructuring charges. In
addition, the company defines adjusted net earnings and adjusted diluted
earnings per share for the periods presented as its reported net earnings and
diluted earnings per share calculated in accordance with GAAP adjusted to
exclude the effects of the restructuring charges.

These non-GAAP financial measures provide investors with an understanding of
the company’s operating income, net earnings, and diluted earnings per share
adjusted to exclude the effect of the items described above. These non-GAAP
financial measures assist investors in making a ready comparison of the
company’s operating income, net earnings, and diluted earnings per share for
its fiscal quarter ended November 3, 2012, against the company’s results for
the respective prior-year periods and against third party estimates of the
company’s diluted earnings per share for those periods that may not have
included the effect of such items. Additionally, management uses these
non-GAAP financial measures as an internal measure to analyze trends, allocate
resources, and analyze underlying operating performance. Please see
“Reconciliation of Non-GAAP Financial Measures” attached to this release for
more detail.

(3) The company defines adjusted return on invested capital ("ROIC") as
adjusted net operating profit after taxes divided by average invested capital
for the periods presented (including both continuing and discontinued
operations). Adjusted net operating profit after taxes is defined as our
operating income for the periods presented calculated in accordance with GAAP
adjusted to exclude the effects of: (i) operating lease interest; (ii)
investment income; (iii) net earnings attributable to noncontrolling
interests; (iv) income taxes; (v) all restructuring charges in costs of goods
sold and operating expenses, goodwill and tradename impairments, and costs
related to the purchase of CPW's share of the Best Buy Mobile profit share
agreement ("Best Buy Europe transaction costs"); and (vi) the noncontrolling
interest impact of the restructuring charges, Best Buy Europe transaction
costs and the purchase of CPW's share of the Best Buy Mobile profit share
agreement. Average invested capital is defined as the average of our total
assets for the trailing four quarters in relation to the periods presented
adjusted to: (i) exclude excess cash and cash equivalent and short-term
investments; (ii) include capitalized operating lease obligations calculated
using a multiple of eight times rental expenses; (iii) exclude our total
liabilities, less our outstanding debt; and (iv) exclude equity of
noncontrolling interests.

This non-GAAP financial measure provides investors with a supplemental measure
to evaluate how effectively the company is investing its capital and deploying
its assets. Management uses this non-GAAP financial measure to assist in
allocating resources, and trends in the measure may fluctuate over time as
management balances long-term initiatives with possible short-term impacts.
Our ROIC calculation utilizes total operations in order to provide a measure
that includes the results of and capital invested in all operations, including
those businesses that are no longer continuing operations. Please see
“Reconciliation of Non-GAAP Financial Measures” attached to this release for
more detail.

(4) As a reminder, year-over-year SG&A comparisons for both Domestic and
International segments were impacted by the absence of the Best Buy Mobile
profit share payment in fiscal 2013 as a result of the purchase of Carphone
Warehouse Group plc’s (“CPWs”) share of the Best Buy Mobile profit share
agreement in the fourth quarter of fiscal 2012. These intercompany profit
share payments previously increased Domestic segment SG&A expense while
lowering International segment SG&A and had no impact on the company’s
consolidated SG&A.

(5) Best Buy defines free cash flow as total cash (used in) provided by
operating activities less additions to property and equipment. This non-GAAP
financial measure assists investors in making a ready comparison of the
company’s expected free cash flow for the year ending February 2, 2013,
against the company’s results for the respective prior-year periods and
against management’s previously provided expectations. The company’s free cash
flow guidance excludes the impact of previously announced restructuring
activities and includes an expected benefit from a change in restricted cash
related to working capital, which is included within investing activities on
the condensed consolidated statements of cash flows.

Forward-Looking and Cautionary Statements:

This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 as contained in Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934 that reflect management’s current views and estimates regarding
future market conditions, company performance and financial results, business
prospects, new strategies, the competitive environment and other events. You
can identify these statements by the fact that they use words such as
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,”
“guidance,” “plan,” “outlook,” and other words and terms of similar meaning.
These statements involve a number of risks and uncertainties that could cause
actual results to differ materially from the potential results discussed in
the forward-looking statements. Among the factors that could cause actual
results and outcomes to differ materially from those contained in such
forward-looking statementsare the following: general economic conditions,
changes in consumer preferences, credit market constraints, acquisitions and
development of new businesses, divestitures, product availability, sales
volumes, pricing actions and promotional activities of competitors, profit
margins, weather, natural or man-made disasters, changes in law or
regulations, foreign currency fluctuation, availability of suitable real
estate locations, the company’s ability to react to a disaster recovery
situation, the impact of labor markets and new product introductions on
overall profitability, failure to achieve anticipated benefits of announced
transactions, integration challenges relating to new ventures and
unanticipated costs associated with previously announced or future
restructuring activities. A further list and description of these risks,
uncertainties and other matters can be found in the company’s annual report
and other reports filed from time to time with the Securities and Exchange
Commission, including, but not limited to, Best Buy’s Annual Report on Form
10-K filed with the SEC on May 1, 2012. Best Buy cautions that the foregoing
list of important factors is not complete, and any forward-looking statements
speak only as of the date they are made, and Best Buy assumes no obligation to
update any forward-looking statement that it may make.

About Best Buy Co., Inc.

Best Buy Co., Inc. (NYSE: BBY) is the global leader in consumer electronics,
with more than 1,400 large and small-format locations, more than 160,000
employees, $50B in annual revenue and the 11^th largest retail website in the
United States. Our “Blue Shirt” sales associates and Geek Squad agents are the
authority on consumer electronics, delivering unbiased, knowledgeable advice
hundreds of millions of times a year and offering unmatched support for the
lifetime of the products we sell. Shop our competitively priced products and
services at http://www.bestbuy.com/ or stop by one of our Best Buy or Best Buy
Mobile stores to touch, test and try the latest technology. To learn more
about Best Buy, visit us at http://www.investors.bestbuy.com/. Find us on
Facebook at https://www.facebook.com/bestbuy and follow us on Twitter at
@BestBuy.


BEST BUY CO., INC.
CONSOLIDATED STATEMENTS OF EARNINGS
($ in millions, except per share amounts)
(Unaudited and subject to reclassification)
                                                               
                   Three Months Ended                Nine Months Ended
                   Nov. 3, 2012     Oct. 29, 2011    Nov. 3, 2012   Oct. 29,
                                                                    2011
Revenue            $  10,753        $  11,145        $  32,910      $ 33,370
Cost of goods        8,167          8,292          24,853      24,834 
sold
Gross profit          2,586            2,853            8,057         8,536
Gross profit %        24.0    %        25.6    %        24.5    %     25.6   %
Selling,
general and           2,538            2,472            7,496         7,431
administrative
expenses
SG&A %                23.6    %        22.2    %        22.8    %     22.3   %
Restructuring        36             -              254         4      
charges
Operating             12               381              307           1,101
income
Operating             0.1     %        3.4     %        0.9     %     3.3    %
income %
Other income
(expense):
Investment
income and            13               -                25            25
other
Interest             (31     )       (37     )       (94     )    (98    )
expense
(Loss) earnings
from continuing
operations
before income         (6      )        344              238           1,028
tax expense and
equity in loss
of affiliates
Income tax
(benefit)             (2      )        122              84            364
expense
Effective tax         34.7    %        35.6    %        35.4    %     35.4   %
rate
Equity in loss       (1      )       (2      )       (5      )    (3     )
of affiliates
Net (loss)
earnings from         (5      )        220              149           661
continuing
operations
Gain (loss)
from
discontinued         6              (46     )       (3      )    (137   )
operations, net
of tax
Net earnings
including             1                174              146           524
noncontrolling
interest
Net (earnings)
loss from
continuing
operations            (8      )        (47     )        11            (83    )
attributable to
noncontrolling
interests
Net (earnings)
loss from
discontinued
operations           (3      )       29             3           55     
attributable to
noncontrolling
interests
Net (loss)
earnings
attributable to    $  (10     )     $  156          $  160        $ 496    
Best Buy Co.,
Inc.
                                                                    
Amounts
attributable to
Best Buy Co.,
Inc.
Net (loss)
earnings from      $  (13     )     $  173           $  160         $ 578
continuing
operations
Net earnings
(loss) from          3              (17     )       -           (82    )
discontinued
operations
Net (loss)
earnings
attributable to    $  (10     )     $  156          $  160        $ 496    
Best Buy Co.,
Inc.
                                                                    
Basic (loss)
earnings per
share
attributable to
Best Buy Co.,
Inc.
Continuing         $  (0.04   )     $  0.48          $  0.47        $ 1.53
operations
Discontinued       $  0.01         $  (0.05   )     $  -          $ (0.21  )
operations
Basic (loss)
earnings per       $  (0.03   )     $  0.43         $  0.47       $ 1.32   
share
                                                                    
Diluted (loss)
earnings per
share
attributable to
Best Buy Co.,
Inc.^(1)
Continuing         $  (0.04   )     $  0.47          $  0.47        $ 1.51
operations
Discontinued       $  0.01         $  (0.05   )     $  -          $ (0.21  )
operations
Diluted (loss)
earnings per       $  (0.03   )     $  0.42         $  0.47       $ 1.30   
share
                                                                    
Dividends
declared per
Best Buy Co.,      $  0.17          $  0.16          $  0.49        $ 0.46
Inc. common
share
                                                                    
Weighted
average Best
Buy Co., Inc.
common shares
outstanding (in
millions)
Basic                 337.2            363.4            339.3         376.9
Diluted               337.2            372.4            340.4         386.2
                                                                    
(1) The calculation of diluted earnings per share assumes the conversion of
the company's previously outstanding convertible debentures due in 2022 into
8.8 million shares common stock in the three and nine months ended October 29,
2011, and adds back the related after-tax interest expense of $1.4 and $4.2
for the three and nine months ended October 29, 2011, respectively.


BEST BUY CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
(Unaudited and subject to reclassification)
                                                
                                    
                                    Nov. 3, 2012   Oct. 29, 2011
ASSETS
Current assets
Cash and cash equivalents           $   309        $    2,073
Short-term investments                  -               20
Receivables                             2,250           1,968
Merchandise inventories                 8,156           7,780
Other current assets                   1,131          1,098
Total current assets                    11,846          12,939
Net property & equipment                3,407           3,697
Goodwill                                1,344           2,447
Tradenames                              131             131
Customer relationships                  213             165
Equity and other investments            91              279
Other assets                           524            469
TOTAL ASSETS                        $   17,556     $    20,127
                                                   
LIABILITIES & EQUITY
Current liabilities
Accounts payable                    $   7,933      $    7,557
Accrued liabilities                     2,361           2,549
Short-term debt                         310             163
Current portion of long-term debt      544            442
Total current liabilities               11,148          10,711
Long-term liabilities                   1,122           1,161
Long-term debt                          1,158           1,692
Equity                                 4,128          6,563
TOTAL LIABILITIES & EQUITY          $   17,556     $    20,127
                                                        

BEST BUY CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
(Unaudited and subject to reclassification)
                                                              
                                                  Nine Months Ended
                                                  Nov. 3, 2012   Oct. 29, 2011
OPERATING ACTIVITIES
Net earnings including noncontrolling interests   $  146         $  524
Adjustments to reconcile net earnings to total
cash (used in) provided by operating
activities:
Depreciation and amortization of definite-lived      687            708
intangible assets
Other, net                                           269            111
Changes in operating assets and liabilities,
net of acquired assets and liabilities:
Receivables                                          216            322
Merchandise inventories                              (1,330  )      (393    )
Accounts payable                                     967            938
Other assets and liabilities                        (1,076  )     (310    )
Total cash (used in) provided by operating           (121    )      1,900
activities
                                                                 
INVESTING ACTIVITIES
Additions to property and equipment                  (522    )      (580    )
Other, net                                          110          25      
Total cash used in investing activities              (412    )      (555    )
                                                                 
FINANCING ACTIVITIES
Repurchase of common stock                           (255    )      (1,056  )
(Repayments) borrowings of debt, net                 (200    )      581
Other, net                                          (152    )     (136    )
Total cash used in financing activities              (607    )      (611    )
                                                                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH              48             1
ADJUSTMENT FOR CHANGE IN FISCAL YEAR                202          235     
                                                                 
(DECREASE) INCREASE IN CASH AND CASH                 (890    )      970
EQUIVALENTS
                                                                 
CASH AND CASH EQUIVALENTS AT BEGINNING OF           1,199        1,103   
PERIOD
                                                                 
CASH AND CASH EQUIVALENTS AT END OF PERIOD        $  309        $  2,073   
                                                                            

BEST BUY CO., INC.
SEGMENT INFORMATION
($ in millions)
(Unaudited and subject to reclassification)
                                                            
Domestic Segment Performance Summary
                             Three Months Ended
                             Nov. 3, 2012          Oct. 29,        Change
                                                   2011
Revenue                      $7,673                $8,055          (5%)
Comparable store sales       (4.0%)                0.1%            (410bps)
% change^1
Gross profit                 $1,855                $2,033          (9%)
% of revenue                 24.2%                 25.2%           (100bps)
SG&A                         $1,805                $1,784          1%
% of revenue                 23.5%                 22.1%           140bps
Restructuring charges        $34                   $0              N/A
Operating income             $16                   $249            (94%)
% of revenue                 0.2%                  3.1%            (290bps)
Adjusted (non-GAAP)          $50                   $249            (80%)
operating income^2
% of revenue                 0.7%                  3.1%            (240bps)
                                                                   
Revenue per square
foot (Domestic               $856                  $846            1%
segment)^3
Adjusted operating
income per square foot       $36                   $43             (16%)
(Domestic segment)^3
                                                                   
International Segment
Performance Summary
                             Three Months Ended
                             Nov. 3, 2012          Oct. 29,        Change
                                                   2011
Revenue                      $3,080                $3,090          (0%)
Comparable store sales       (5.2%)                (3.2%)          (200bps)
% change^1
Gross profit                 $731                  $820            (11%)
% of revenue                 23.7%                 26.5%           (280bps)
SG&A                         $733                  $688            7%
% of revenue                 23.8%                 22.3%           150bps
Restructuring charges        $2                    $0              N/A
Operating (loss)             ($4)                  $132            --
income
% of revenue                 (0.1%)                4.3%            (440bps)
Adjusted (non-GAAP)
operating (loss)             ($2)                  $132            --
income^2
% of revenue                 (0.1%)                4.3%            (440bps)
                                                                   
(1) Best Buy’s comparable store sales is comprised of revenue at stores, call
centers, and Web sites operating for at least 14 full months as well as
revenue related to other comparable sales channels. Relocated stores, as well
as remodeled, expanded and downsized stores closed more than 14 days, are
excluded from the comparable store sales calculation until at least 14 full
months after reopening. Acquired stores are included in the comparable store
sales calculation beginning with the first full quarter following the first
anniversary of the date of the acquisition. The portion of the calculation of
the comparable store sales percentage change attributable to the International
segment excludes the effect of fluctuations in foreign currency exchange
rates. The method of calculating comparable store sales varies across the
retail industry. As a result, Best Buy’s method of calculating comparable
store sales may not be the same as other retailers’ methods.

(2) Excludes the impact of previously announced restructuring charges. Please
see table titled “Reconciliation of Non-GAAP Financial Measures” at the back
of this release.

(3) Revenue per square foot is equal to the sum of Domestic segment trailing
twelve months revenue divided by the average quarterly retail square footage
for all U.S. stores, over the same period. Adjusted operating income per
square foot is equal to the sum of Domestic segment trailing twelve months
adjusted operating income divided by the average quarterly retail square
footage for all U.S. stores, over the same period.


BEST BUY CO., INC.
REVENUE CATEGORY SUMMARY
(Unaudited and subject to reclassification)
                                                            
Domestic Segment
Summary
                        Revenue Mix Summary         Comparable Store Sales
                        Three Months Ended          Three Months Ended
                        Nov. 3,       Oct. 29,      Nov. 3,         Oct. 29,
                        2012          2011          2012            2011
Consumer                31%           33%           (8.4%)          (5.1%)
Electronics
Computing and           45%           43%           0.9%            5.9%
Mobile Phones
Entertainment           9%            10%           (18.5%)         (12.0%)
Appliances              7%            6%            10.8%           14.9%
Services^1              7%            7%            (4.6%)          0.5%
Other                   1%            1%            n/a             n/a
Total                   100%          100%          (4.0%)          0.1%
                                                                    
                                                                    
                                                                    
International
Segment Summary
                        Revenue Mix Summary         Comparable Store Sales
                        Three Months Ended          Three Months Ended
                        Nov. 3,       Oct. 29,      Nov. 3,         Oct. 29,
                        2012          2011          2012            2011
Consumer                16%           19%           (17.5%)         (2.8%)
Electronics
Computing and           65%           57%           2.4%            (3.7%)
Mobile Phones
Entertainment           3%            4%            (16.6%)         (3.3%)
Appliances              9%            10%           (9.4%)          (7.2%)
Services^1              7%            10%           (10.8%)         3.7%
Other                   <1%           <1%           n/a             n/a
Total                   100%          100%          (5.2%)          (3.2%)
                                                                    
(1) The "Services" revenue category consists primarily of service contracts,
extended warranties, computer related services, product repair and delivery
and installation for home theater, mobile audio and appliances.


BEST BUY CO., INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
CONTINUING OPERATIONS
($ in millions, except per share amounts)
(Unaudited and subject to reclassification)
                                                             
The following information provides reconciliations of non-GAAP financial
measures from continuing operations to the most comparable financial measures
calculated and presented in accordance with accounting principles generally
accepted in the U.S. (“GAAP”). The company has provided non-GAAP financial
measures, which are not calculated or presented in accordance with GAAP, as
information supplemental and in addition to the financial measures presented
in the accompanying news release that are calculated and presented in
accordance with GAAP. Such non-GAAP financial measures should not be
considered superior to, as a substitute for, or as an alternative to, and
should be considered in conjunction with, the GAAP financial measures
presented in the news release. The non- GAAP financial measures in the
accompanying news release may differ from similar measures used by other
companies.
The following tables reconcile operating income, net earnings and diluted
earnings per share for the periods presented for continuing operations (GAAP
financial measures) to adjusted operating income, adjusted net earnings and
adjusted diluted earnings per share for continuing operations (non-GAAP
financial measures) for the periods presented.
                                                                    
                         Three Months Ended            Three Months Ended
                         Nov. 3, 2012                  Oct. 29, 2011
                         $             % of Rev.       $            % of Rev.
Domestic -
Continuing
Operations
Operating income         $16           0.2%            $249         3.1%
Restructuring            34            0.4%            0            n/a
charges
Adjusted operating       $50           0.7%            $249         3.1%
income
                                                                    
International -
Continuing
Operations
Operating (loss)         ($4)          (0.1%)          $132         4.3%
income
Restructuring            2             0.1%            0            n/a
charges
Adjusted operating       ($2)          (0.1%)          $132         4.3%
(loss) income
                                                                    
Consolidated -
Continuing
Operations
Operating income         $12           0.1%            $381         3.4%
Restructuring            36            0.3%            0            n/a
charges
Adjusted operating       $48           0.4%            $381         3.4%
income
                                                                    
Net (loss) earnings      ($13)                         $173
After-tax impact of
restructuring            23                            0
charges
Adjusted net             $10                           $173
earnings
                                                                    
Diluted EPS              ($0.04)                       $0.47
Per share impact of
restructuring            0.07                          0.00
charges
Adjusted diluted EPS     $0.03                         $0.47
                                                                    
                         Nine Months Ended             Nine Months Ended
                         Nov. 3, 2012                  Oct. 29, 2011
                         $             % of Rev.       $            % of Rev.
Domestic -
Continuing
Operations
Operating income         $394          1.6%            $854         3.5%
Restructuring            252           1.0%            5            0.0%
charges
Adjusted operating       $646          2.7%            $859         3.5%
income
                                                                    
International -
Continuing
Operations
Operating (loss)         ($87)         (1.0%)          $247         2.8%
income
Restructuring            2             n/a             (1)          (0.0%)
charges
Adjusted operating       ($85)         (1.0%)          $246         2.7%
(loss) income
                                                                    
Consolidated -
Continuing
Operations
Operating income         $307          0.9%            $1,101       3.3%
Restructuring            254           0.8%            4            0.0%
charges
Adjusted operating       $561          1.7%            $1,105       3.3%
income
                                                                    
Net earnings             $160                          $578
After-tax impact of
restructuring            164                           3
charges
Adjusted net             $324                          $581
earnings
                                                                    
Diluted EPS              $0.47                         $1.51
Per share impact of
restructuring            0.48                          0.00
charges
Adjusted diluted EPS     $0.95                         $1.51
                                                                    

BEST BUY CO., INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
($ in millions)
(Unaudited and subject to reclassification)
                                                    
The following information provides a reconciliation of a non-GAAP financial
measure to the most comparable financial measure calculated and presented in
accordance with GAAP. The company has provided the non-GAAP financial measure,
which is not calculated or presented in accordance with GAAP, as information
supplemental and in addition to the financial measure that is calculated and
presented in accordance with GAAP. Such non-GAAP financial measure should not
be considered superior to, as a substitute for, or as an alternative to, and
should be considered in conjunction with, the GAAP financial measure. The
non-GAAP financial measure in the accompanying news release may differ from
similar measures used by other companies.

The following table includes the calculation of Adjusted ROIC for total
operations, which includes both continuing and discontinued operations
(non-GAAP financial measures), along with a reconciliation to the calculation
of return on total assets ("ROA") (GAAP financial measure) for the periods
presented.

Calculation of Return on Invested Capital^(1)
                             Nov. 3, 2012^(2)            Oct. 29, 2011^(2)
Net Operating Profit
After Taxes (NOPAT)
Operating income -           $     186                   $     2,224
continuing operations
Operating loss -                  (241        )              (294       )
discontinued operations
Total operating (loss)             (55         )               1,930
income
Add: Operating lease               594                         600
interest^(3)
Add: Investment income             47                          38
Less: Net earnings
attributable to                    (1,212      )               (66        )
noncontrolling interest
(NCI)
Less: Income taxes^(4)            (845        )              (999       )
NOPAT                        $     (1,471      )         $     1,503
Add: Restructuring
charges and                        1,760                       245
impairments^(5)
Add: NCI impact of BBYM
profit share buyout and           1,202                     -          
restructuring charges
Adjusted NOPAT               $     1,491                 $     1,748
                                                         
Average Invested
Capital
Total assets                 $     16,665                $     19,587
Less: Excess Cash^(6)              (447        )               (1,601     )
Add: Capitalized
operating lease                    9,498                       9,596
obligations^(7)
Total liabilities                  (12,466     )               (12,635    )
Exclude: Debt^(8)                  2,119                       2,177
Less: Noncontrolling              (618        )              (713       )
interests
Average invested             $     14,751               $     16,411     
capital
                                                         
Adjusted Return on                10.1        %              10.7       %
invested capital (ROIC)
                                                         
Calculation of Return on Assets^(1)
                             Nov. 3, 2012^(2)            Oct. 29, 2011^(2)
Net (loss) earnings
including                    $     (447        )         $     1,220
noncontrolling
interests
Total assets                      16,665                    19,587     
Return on assets (ROA)            (2.7        %)             6.2        %
                                                         
(1) The calculations of Return on Invested Capital and Return on Assets use
total operations, which includes both continuing and discontinued operations.
(2) Income statement accounts represent the activity for the 12 months ended
as of each of the balance sheet dates. Balance sheet accounts represent the
average account balances for the 4 quarters ended as of each of the balance
sheet dates.
(3) Operating lease interest represents the add-back to operating income
driven by our capitalized lease obligations and represents fifty percent of
our annual rental expense which is the multiple used for the retail sector by
one of the nationally recognized credit rating agencies that rates our
creditworthiness, and we consider it to be an appropriate multiple for our
lease portfolio.
(4) Income taxes are calculated using a blended statutory rate at the
enterprise level based on statutory rates from the countries we do business
in.
(5) Includes all restructuring charges in costs of goods sold and operating
expenses, goodwill and tradename impairments, and the Best Buy Europe
transaction costs.
(6) Cash and cash equivalents and short term investments are capped at the
greater of 1% of revenue or actual amounts on hand. The cash and cash
equivalents and short term investments in excess of the cap are subtracted
from our calculation of average invested capital to show their exclusion from
total assets.
(7) The multiple of eight times annual rental expense in the calculation of
our capitalized operating lease obligations is the multiple used for the
retail sector by one of the nationally recognized credit rating agencies that
rates our creditworthiness, and we consider it to be an appropriate multiple
for our lease portfolio.
(8) Debt includes short-term debt, current portion of long-term debt and
long-term debt and is added back to our calculation of average invested
capital to show its exclusion from total liabilities.

Contact:

Best Buy Co., Inc.
Investor Contacts:
Bill Seymour, 612-291-6122
Vice President, Investor Relations
bill.seymour@bestbuy.com
or
Mollie O’Brien, 612-291-7735
Director, Investor Relations
mollie.obrien@bestbuy.com
or
Media Contact:
Amy von Walter, 612-291-4490
Senior Director, Public Relations
amy.vonwalter@bestbuy.com