Condensed Consolidating Financial Information

The rules of the U.S. Securities and Exchange Commission require that condensed consolidating financial information be provided for a subsidiary that has guaranteed the debt of a registrant issued in a public offering, where the guarantee is full and unconditional and where the voting interest of the subsidiary is 100%-owned by the registrant. Our convertible debentures, which had an aggregate principal balance and carrying amount of $402 at August 27, 2011, are jointly and severally guaranteed by our 100%-owned indirect subsidiary Best Buy Stores, L.P. (“Guarantor Subsidiary”). Investments in subsidiaries of Best Buy Stores, L.P., which have not guaranteed the convertible debentures (“Non-Guarantor Subsidiaries”), are required to be presented under the equity method, even though all such subsidiaries meet the requirements to be consolidated under GAAP.

Set forth below are condensed consolidating financial statements presenting the financial position, results of operations, and cash flows of (i) Best Buy Co., Inc., (ii) the Guarantor Subsidiary, (iii) the Non-Guarantor Subsidiaries, and (iv) the eliminations necessary to arrive at consolidated information for our company. The balance sheet eliminations relate primarily to the elimination of intercompany profit in inventory held by the Guarantor Subsidiary and consolidating entries to eliminate intercompany receivables, payables and subsidiary investment accounts. The statement of earnings eliminations relate primarily to the sale of inventory from a Non-Guarantor Subsidiary to the Guarantor Subsidiary.

We file a consolidated U.S. federal income tax return. Income taxes are allocated in accordance with our tax allocation agreement. U.S. affiliates receive no tax benefit for taxable losses, but are allocated taxes at the required effective income tax rate if they have taxable income.

The following tables present condensed consolidating balance sheets as of August 27, 2011, February 26, 2011, and August 28, 2010, condensed consolidating statements of earnings for the three and six months ended August 27, 2011, and August 28, 2010, and condensed consolidating statements of cash flows for the six months ended August 27, 2011, and August 28, 2010, and should be read in conjunction with the condensed consolidated financial statements herein.

Condensed Consolidating Balance Sheets

At August 27, 2011

(Unaudited)



	Best Buy Co., Inc.		Guarantor Subsidiary		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	943	$	52	$	1,045	$	—		$	2,040
Short-term investments	80		—		—		—			80
Receivables	1		522		1,422		—			1,945
Merchandise inventories	—		4,329		2,125		(51		)	6,403
Other current assets	157		57		831		(12		)	1,033
Intercompany receivable	—		—		9,843		(9,843		)	—
Intercompany note receivable	895		—		106		(1,001		)	—
Total current assets	2,076		4,960		15,372		(10,907		)	11,501

Property and Equipment, Net	200		1,742		1,819		—			3,761
Goodwill	—		6		2,480		—			2,486
Tradenames, Net	—		—		134		—			134
Customer Relationships, Net	—		—		179		—			179
Equity and Other Investments	143		—		141		—			284
Other Assets	226		35		223		—			484
Investments in Subsidiaries	14,487		241		2,556		(17,284		)	—

Total Assets	$	17,132	$	6,984	$	22,904	$	(28,191	)	$	18,829

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	341	$	62	$	5,427	$	—		$	5,830
Unredeemed gift card liabilities	—		347		63		—			410
Accrued compensation and related expenses	—		174		315		—			489
Accrued liabilities	51		711		829		(11		)	1,580
Accrued income taxes	2		—		—		—			2
Short-term debt	—		—		392		—			392
Current portion of long-term debt	403		23		18		—			444
Intercompany payable	8,132		1,711		—		(9,843		)	—
Intercompany note payable	106		501		394		(1,001		)	—
Total current liabilities	9,035		3,529		7,438		(10,855		)	9,147

Long-Term Liabilities	466		781		174		(245		)	1,176
Long-Term Debt	1,496		118		82		—			1,696

Equity
Shareholders’ equity	6,135		2,556		14,487		(17,091		)	6,087
Noncontrolling interests	—		—		723		—			723
Total equity	6,135		2,556		15,210		(17,091		)	6,810

Total Liabilities and Equity	$	17,132	$	6,984	$	22,904	$	(28,191	)	$	18,829

Condensed Consolidating Balance Sheets

At February 26, 2011

(Unaudited)



	Best Buy Co., Inc.		Guarantor Subsidiary		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	282	$	51	$	770	$	—		$	1,103
Short-term investments	20		—		2		—			22
Receivables	3		738		1,607		—			2,348
Merchandise inventories	—		3,973		1,999		(75		)	5,897
Other current assets	234		117		752		—			1,103
Intercompany receivable	—		—		9,300		(9,300		)	—
Intercompany note receivable	854		—		91		(945		)	—
Total current assets	1,393		4,879		14,521		(10,320		)	10,473

Property and Equipment, Net	200		1,803		1,820		—			3,823
Goodwill	—		6		2,448		—			2,454
Tradenames, Net	—		—		133		—			133
Customer Relationships, Net	—		—		203		—			203
Equity and Other Investments	162		—		166		—			328
Other Assets	181		36		273		(55		)	435
Investments in Subsidiaries	14,030		229		2,444		(16,703		)	—

Total Assets	$	15,966	$	6,953	$	22,008	$	(27,078	)	$	17,849

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	361	$	101	$	4,432	$	—		$	4,894
Unredeemed gift card liabilities	—		404		70		—			474
Accrued compensation and related expenses	—		200		370		—			570
Accrued liabilities	13		625		833		—			1,471
Accrued income taxes	256		—		—		—			256
Short-term debt	—		—		557		—			557
Current portion of long-term debt	402		23		16		—			441
Intercompany payable	7,497		1,665		138		(9,300		)	—
Intercompany note payable	103		500		342		(945		)	—
Total current liabilities	8,632		3,518		6,758		(10,245		)	8,663

Long-Term Liabilities	160		863		447		(287		)	1,183
Long-Term Debt	500		128		83		—			711

Equity
Shareholders’ equity	6,674		2,444		14,030		(16,546		)	6,602
Noncontrolling interests	—		—		690		—			690
Total equity	6,674		2,444		14,720		(16,546		)	7,292

Total Liabilities and Equity	$	15,966	$	6,953	$	22,008	$	(27,078	)	$	17,849

Condensed Consolidating Balance Sheets

At August 28, 2010

(Unaudited)



	Best Buy Co., Inc.		Guarantor Subsidiary		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	136	$	29	$	678	$	—		$	843
Short-term investments	—		—		2		—			2
Receivables	1		500		1,219		—			1,720
Merchandise inventories	—		4,387		2,032		(73		)	6,346
Other current assets	242		74		733		(1		)	1,048
Intercompany receivable	—		—		8,604		(8,604		)	—
Intercompany note receivable	1,566		—		7		(1,573		)	—
Total current assets	1,945		4,990		13,275		(10,251		)	9,959

Property and Equipment, Net	211		1,798		1,906		—			3,915
Goodwill	—		6		2,359		—			2,365
Tradenames, Net	—		—		147		—			147
Customer Relationships, Net	—		—		227		—			227
Equity and Other Investments	166		—		127		—			293
Other Assets	92		27		375		(38		)	456
Investments in Subsidiaries	12,043		296		2,411		(14,750		)	—

Total Assets	$	14,457	$	7,117	$	20,827	$	(25,039	)	$	17,362

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	350	$	34	$	5,189	$	—		$	5,573
Unredeemed gift card liabilities	—		344		56		—			400
Accrued compensation and related expenses	1		191		275		—			467
Accrued liabilities	18		670		901		—			1,589
Accrued income taxes	27		—		—		—			27
Short-term debt	—		—		383		—			383
Current portion of long-term debt	—		20		12		—			32
Intercompany payable	6,869		1,735		—		(8,604		)	—
Intercompany note payable	19		500		1,054		(1,573		)	—
Total current liabilities	7,284		3,494		7,870		(10,177		)	8,471

Long-Term Liabilities	185		1,089		245		(338		)	1,181
Long-Term Debt	902		123		63		—			1,088

Equity
Shareholders’ equity	6,086		2,411		12,042		(14,524		)	6,015
Noncontrolling interests	—		—		607		—			607
Total equity	6,086		2,411		12,649		(14,524		)	6,622

Total Liabilities and Equity	$	14,457	$	7,117	$	20,827	$	(25,039	)	$	17,362

Condensed Consolidating Statements of Earnings

Three Months Ended August 27, 2011

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	4		$	7,591		$	9,810		$	(6,058	)	$	11,347

Cost of goods sold	—			5,625			8,381			(5,531		)	8,475

Gross profit	4			1,966			1,429			(527		)	2,872

Selling, general and administrative expenses	37			1,890			1,233			(577		)	2,583
Restructuring charges	—			—			2			—			2

Operating (loss) income	(33		)	76			194			50			287

Other income (expense)
Investment income and other	6			—			5			(5		)	6
Interest expense	(23		)	(3		)	(13		)	5			(34		)

(Loss) earnings before equity in earnings of subsidiaries	(50		)	73			186			50			259

Equity in earnings of subsidiaries	175			9			48			(232		)	—

Earnings before income tax expense and equity in loss of affiliates	125			82			234			(182		)	259

Income tax (benefit) expense	(2		)	25			76			—			99

Equity in loss of affiliates	—			—			—			—			—

Net earnings including noncontrolling interests	127			57			158			(182		)	160

Net loss attributable to noncontrolling interests	—			—			17			—			17

Net earnings attributable to Best Buy Co., Inc.	$	127		$	57		$	175		$	(182	)	$	177

Condensed Consolidating Statements of Earnings

Six Months Ended August 27, 2011

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	8		$	14,799		$	20,169		$	(12,689	)	$	22,287

Cost of goods sold	—			10,998			17,368			(11,719		)	16,647

Gross profit	8			3,801			2,801			(970		)	5,640

Selling, general and administrative expenses	73			3,655			2,406			(1,067		)	5,067
Restructuring charges	—			(2		)	6			—			4

Operating (loss) income	(65		)	148			389			97			569

Other income (expense)
Investment income and other	10			—			17			(9		)	18
Interest expense	(46		)	(6		)	(22		)	9			(65		)

(Loss) earnings before equity in earnings of subsidiaries	(101		)	142			384			97			522

Equity in earnings of subsidiaries	320			18			93			(431		)	—

Earnings before income tax expense and equity in loss of affiliates	219			160			477			(334		)	522

Income tax expense	3			49			146			—			198

Equity in loss of affiliates	—			—			(1		)	—			(1		)

Net earnings including noncontrolling interests	216			111			330			(334		)	323

Net earnings attributable to noncontrolling interests	—			—			(10		)	—			(10		)

Net earnings attributable to Best Buy Co., Inc.	$	216		$	111		$	320		$	(334	)	$	313

Condensed Consolidating Statements of Earnings

Three Months Ended August 28, 2010

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	4		$	7,780		$	10,162		$	(6,607	)	$	11,339

Cost of goods sold	—			5,739			8,674			(5,992		)	8,421

Gross profit	4			2,041			1,488			(615		)	2,918

Selling, general and administrative expenses	34			1,970			1,166			(663		)	2,507

Operating (loss) income	(30		)	71			322			48			411

Other income (expense)
Investment income and other	11			—			14			(12		)	13
Interest expense	(11		)	(3		)	(19		)	12			(21		)

(Loss) earnings before equity in earnings of subsidiaries	(30		)	68			317			48			403

Equity in earnings of subsidiaries	248			27			109			(384		)	—

Earnings before income tax expense	218			95			426			(336		)	403

Income tax expense (benefit)	12			(41		)	175			—			146

Net earnings including noncontrolling interests	206			136			251			(336		)	257

Net earnings attributable to noncontrolling interests	—			—			(3		)	—			(3		)

Net earnings attributable to Best Buy Co., Inc.	$	206		$	136		$	248		$	(336	)	$	254

Condensed Consolidating Statements of Earnings

Six Months Ended August 28, 2010

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	8		$	15,075		$	20,697		$	(13,654	)	$	22,126

Cost of goods sold	—			11,119			17,756			(12,460		)	16,415

Gross profit	8			3,956			2,941			(1,194		)	5,711

Selling, general and administrative expenses	71			3,806			2,392			(1,282		)	4,987

Operating (loss) income	(63		)	150			549			88			724

Other income (expense)
Investment income and other	19			—			25			(19		)	25
Interest expense	(23		)	(6		)	(34		)	19			(44		)

(Loss) earnings before equity in earnings of subsidiaries	(67		)	144			540			88			705

Equity in earnings of subsidiaries	382			23			91			(496		)	—

Earnings before income tax expense	315			167			631			(408		)	705

Income tax (benefit) expense	(6		)	53			220			—			267

Net earnings including noncontrolling interests	321			114			411			(408		)	438

Net earnings attributable to noncontrolling interests	—			—			(29		)	—			(29		)

Net earnings attributable to Best Buy Co., Inc.	$	321		$	114		$	382		$	(408	)	$	409

Condensed Consolidating Statements of Cash Flows

Six Months Ended August 27, 2011

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Total cash (used in) provided by operating activities	$	(151	)	$	200		$	1,488		$	—	$	1,537

Investing activities
Additions to property and equipment	(2		)	(191		)	(218		)	—		(411		)
Purchases of investments	(86		)	—			(20		)	—		(106		)
Sales of investments	43			—			23			—		66
Proceeds from sale of business	—			—			—			—		—
Change in restricted assets	—			—			(45		)	—		(45		)
Settlement of net investment hedges	—			—			—			—		—
Other, net	—			—			—			—		—
Total cash (used in) investing activities	(45		)	(191		)	(260		)	—		(496		)

Financing activities
Repurchase of common stock	(846		)	—			—			—		(846		)
Borrowings of debt	997			—			999			—		1,996
Repayments of debt	—			(6		)	(1,181		)	—		(1,187		)
Dividends paid	(115		)	—			—			—		(115		)
Issuance of common stock under employee stock purchase plan and for the exercise of stock options	49			—			—			—		49
Excess tax benefits from stock-based compensation	—			—			—			—		—
Other, net	(8		)	—			6			—		(2		)
Change in intercompany receivable/payable	780			(2		)	(778		)	—		—
Total cash provided by (used in) financing activities	857			(8		)	(954		)	—		(105		)

Effect of exchange rate changes on cash	—			—			1			—		1

Increase in cash and cash equivalents	661			1			275			—		937

Cash and cash equivalents at beginning of period	282			51			770			—		1,103
Cash and cash equivalents at end of period	$	943		$	52		$	1,045		$	—	$	2,040

Condensed Consolidating Statements of Cash Flows

Six Months Ended August 28, 2010

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Total cash provided by (used in) operating activities	$	199		$	(472	)	$	357		$	—	$	84

Investing activities
Additions to property and equipment	—			(129		)	(213		)	—		(342		)
Purchases of investments	(241		)	—			—			—		(241		)
Sales of investments	378			—			1			—		379
Proceeds from sale of business	—			—			21			—		21
Change in restricted assets	—			—			12			—		12
Settlement of net investment hedges	—			—			12			—		12
Other, net	—			—			(1		)	—		(1		)
Total cash provided by (used in) investing activities	137			(129		)	(168		)	—		(160		)

Financing activities
Repurchase of common stock	(667		)	—			—			—		(667		)
Borrowings of debt	—			—			955			—		955
Repayments of debt	(1		)	(6		)	(1,200		)	—		(1,207		)
Dividends paid	(118		)	—			—			—		(118		)
Issuance of common stock under employee stock purchase plan and for the exercise of stock options	113			—			—			—		113
Excess tax benefits from stock-based compensation	10			—			—			—		10
Other, net	—			—			9			—		9
Change in intercompany receivable/payable	(707		)	583			124			—		—
Total cash (used in) provided by financing activities	(1,370		)	577			(112		)	—		(905		)

Effect of exchange rate changes on cash	—			—			(2		)	—		(2		)

(Decrease) increase in cash and cash equivalents	(1,034		)	(24		)	75			—		(983		)

Cash and cash equivalents at beginning of period	1,170			53			603			—		1,826
Cash and cash equivalents at end of period	$	136		$	29		$	678		$	—	$	843