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 $387 at November 26, 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 November 26, 2011, February 26, 2011, and November 27, 2010, condensed consolidating statements of earnings for the three and nine months ended November 26, 2011, and November 27, 2010, and condensed consolidating statements of cash flows for the nine months ended November 26, 2011, and November 27, 2010, and should be read in conjunction with the condensed consolidated financial statements herein.

Condensed Consolidating Balance Sheets

At November 26, 2011

(Unaudited)



	Best Buy Co., Inc.		Guarantor Subsidiary		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	1,249	$	220	$	923	$	—		$	2,392
Short-term investments	—		—		—		—			—
Receivables	—		1,478		1,734		—			3,212
Merchandise inventories	—		6,437		2,855		(72		)	9,220
Other current assets	182		48		867		(12		)	1,085
Intercompany receivable	—		—		13,225		(13,225		)	—
Intercompany note receivable	806		—		107		(913		)	—
Total current assets	2,237		8,183		19,711		(14,222		)	15,909

Property and Equipment, Net	200		1,737		1,630		—			3,567
Goodwill	—		6		2,414		—			2,420
Tradenames, Net	—		—		129		—			129
Customer Relationships, Net	—		—		165		—			165
Equity and Other Investments	141		—		5		—			146
Other Assets	170		35		206		1			412
Investments in Subsidiaries	14,561		254		2,623		(17,438		)	—

Total Assets	$	17,309	$	10,215	$	26,883	$	(31,659	)	$	22,748

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	479	$	58	$	9,527	$	—		$	10,064
Unredeemed gift card liabilities	—		361		67		—			428
Accrued compensation and related expenses	—		197		300		—			497
Accrued liabilities	41		925		1,022		(12		)	1,976
Accrued income taxes	11		—		—		—			11
Short-term debt	—		—		163		—			163
Current portion of long-term debt	388		23		16		—			427
Intercompany payable	8,573		4,652		—		(13,225		)	—
Intercompany note payable	108		500		305		(913		)	—
Total current liabilities	9,600		6,716		11,400		(14,150		)	13,566

Long-Term Liabilities	432		765		177		(255		)	1,119
Long-Term Debt	1,497		111		79		—			1,687

Equity
Shareholders’ equity	5,780		2,623		14,561		(17,254		)	5,710
Noncontrolling interests	—		—		666		—			666
Total equity	5,780		2,623		15,227		(17,254		)	6,376

Total Liabilities and Equity	$	17,309	$	10,215	$	26,883	$	(31,659	)	$	22,748

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 November 27, 2010

(Unaudited)



	Best Buy Co., Inc.		Guarantor Subsidiary		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	144	$	180	$	601	$	—		$	925
Short-term investments	—		—		2		—			2
Receivables	—		1,302		1,491		—			2,793
Merchandise inventories	—		7,161		3,010		(107		)	10,064
Other current assets	243		90		766		(54		)	1,045
Intercompany receivable	—		—		11,953		(11,953		)	—
Intercompany note receivable	1,578		—		2		(1,580		)	—
Total current assets	1,965		8,733		17,825		(13,694		)	14,829

Property and Equipment, Net	202		1,836		1,956		—			3,994
Goodwill	—		6		2,435		—			2,441
Tradenames, Net	—		—		145		—			145
Customer Relationships, Net	—		—		220		—			220
Equity and Other Investments	168		—		175		—			343
Other Assets	132		39		258		(49		)	380
Investments in Subsidiaries	12,405		195		2,371		(14,971		)	—

Total Assets	$	14,872	$	10,809	$	25,385	$	(28,714	)	$	22,352

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	479	$	54	$	9,325	$	—		$	9,858
Unredeemed gift card liabilities	—		359		65		—			424
Accrued compensation and related expenses	—		200		264		—			464
Accrued liabilities	—		843		1,130		(53		)	1,920
Accrued income taxes	31		—		—		—			31
Short-term debt	500		—		190		—			690
Current portion of long-term debt	—		21		12		—			33
Intercompany payable	6,692		5,261		—		(11,953		)	—
Intercompany note payable	15		500		1,065		(1,580		)	—
Total current liabilities	7,717		7,238		12,051		(13,586		)	13,420

Long-Term Liabilities	148		1,082		184		(248		)	1,166
Long-Term Debt	902		118		81		—			1,101

Equity
Shareholders’ equity	6,105		2,371		12,405		(14,880		)	6,001
Noncontrolling interests	—		—		664		—			664
Total equity	6,105		2,371		13,069		(14,880		)	6,665

Total Liabilities and Equity	$	14,872	$	10,809	$	25,385	$	(28,714	)	$	22,352

Condensed Consolidating Statements of Earnings

Three Months Ended November 26, 2011

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	4		$	8,039		$	12,886		$	(8,830	)	$	12,099

Cost of goods sold	—			6,063			11,420			(8,328		)	9,155
Restructuring charges - cost of goods sold	—			—			13			—			13

Gross profit	4			1,976			1,453			(502		)	2,931

Selling, general and administrative expenses	33			1,896			1,236			(549		)	2,616
Restructuring charges	—			—			137			—			137

Operating (loss) income	(29		)	80			80			47			178

Other income (expense)
Gain on sale of investments	—			—			55			—			55
Investment income and other	4			—			8			(4		)	8
Interest expense	(25		)	(3		)	(13		)	4			(37		)

(Loss) earnings before equity in earnings of subsidiaries	(50		)	77			130			47			204

Equity in earnings of subsidiaries	100			18			49			(167		)	—

Earnings before income tax expense and equity in loss of affiliates	50			95			179			(120		)	204

Income tax (benefit) expense	(57		)	28			101			—			72

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

Net earnings including noncontrolling interests	107			67			77			(120		)	131

Net loss attributable to noncontrolling interests	—			—			23			—			23

Net earnings attributable to Best Buy Co., Inc.	$	107		$	67		$	100		$	(120	)	$	154

Condensed Consolidating Statements of Earnings

Nine Months Ended November 26, 2011

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	12		$	22,838		$	33,055		$	(21,519	)	$	34,386

Cost of goods sold	—			17,061			28,788			(20,047		)	25,802
Restructuring charges - cost of goods sold	—			—			13			—			13

Gross profit	12			5,777			4,254			(1,472		)	8,571

Selling, general and administrative expenses	106			5,551			3,642			(1,616		)	7,683
Restructuring charges	—			(2		)	143			—			141

Operating (loss) income	(94		)	228			469			144			747

Other income (expense)
Gain on sale of investments	—			—			55			—			55
Investment income and other	14			—			25			(13		)	26
Interest expense	(71		)	(9		)	(35		)	13			(102		)

(Loss) earnings before equity in earnings of subsidiaries	(151		)	219			514			144			726

Equity in earnings of subsidiaries	420			36			142			(598		)	—

Earnings before income tax expense and equity in loss of affiliates	269			255			656			(454		)	726

Income tax (benefit) expense	(54		)	77			247			—			270

Equity in loss of affiliates	—			—			(2		)	—			(2		)

Net earnings including noncontrolling interests	323			178			407			(454		)	454

Net loss attributable to noncontrolling interests	—			—			13			—			13

Net earnings attributable to Best Buy Co., Inc.	$	323		$	178		$	420		$	(454	)	$	467

Condensed Consolidating Statements of Earnings

Three Months Ended November 27, 2010

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	4		$	7,984		$	13,469		$	(9,567	)	$	11,890

Cost of goods sold	—			5,962			11,994			(9,049		)	8,907

Gross profit	4			2,022			1,475			(518		)	2,983

Selling, general and administrative expenses	36			1,941			1,192			(571		)	2,598

Operating (loss) income	(32		)	81			283			53			385

Other income (expense)
Investment income and other	12			—			8			(12		)	8
Interest expense	(12		)	(4		)	(16		)	12			(20		)

(Loss) earnings before equity in earnings of subsidiaries	(32		)	77			275			53			373

Equity in earnings of subsidiaries	202			7			51			(260		)	—

Earnings before income tax expense	170			84			326			(207		)	373

Income tax expense	6			26			101			—			133

Net earnings including noncontrolling interests	164			58			225			(207		)	240

Net earnings attributable to noncontrolling interests	—			—			(23		)	—			(23		)

Net earnings attributable to Best Buy Co., Inc.	$	164		$	58		$	202		$	(207	)	$	217

Condensed Consolidating Statements of Earnings

Nine Months Ended November 27, 2010

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	12		$	23,059		$	34,166		$	(23,221	)	$	34,016

Cost of goods sold	—			17,081			29,750			(21,509		)	25,322

Gross profit	12			5,978			4,416			(1,712		)	8,694

Selling, general and administrative expenses	107			5,747			3,584			(1,853		)	7,585

Operating (loss) income	(95		)	231			832			141			1,109

Other income (expense)
Investment income and other	31			—			33			(31		)	33
Interest expense	(35		)	(10		)	(50		)	31			(64		)

(Loss) earnings before equity in earnings of subsidiaries	(99		)	221			815			141			1,078

Equity in earnings of subsidiaries	584			30			142			(756		)	—

Earnings before income tax expense	485			251			957			(615		)	1,078

Income tax expense	—			79			321			—			400

Net earnings including noncontrolling interests	485			172			636			(615		)	678

Net earnings attributable to noncontrolling interests	—			—			(52		)	—			(52		)

Net earnings attributable to Best Buy Co., Inc.	$	485		$	172		$	584		$	(615	)	$	626

Condensed Consolidating Statements of Cash Flows

Nine Months Ended November 26, 2011

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Total cash (used in) provided by operating activities	$	(26	)	$	(2,501	)	$	5,154		$	—	$	2,627

Investing activities
Additions to property and equipment	(4		)	(318		)	(294		)	—		(616		)
Purchases of investments	(91		)	—			(20		)	—		(111		)
Sales of investments	128			—			39			—		167
Change in restricted assets	—			—			(31		)	—		(31		)
Other, net	2			—			(9		)	—		(7		)
Total cash provided by (used in) investing activities	35			(318		)	(315		)	—		(598		)

Financing activities
Repurchase of common stock	(1,165		)	—			—			—		(1,165		)
Borrowings of debt	997			—			1,441			—		2,438
Repayments of debt	(15		)	(10		)	(1,845		)	—		(1,870		)
Dividends paid	(172		)	—			—			—		(172		)
Issuance of common stock under employee stock purchase plan and for the exercise of stock options	64			—			—			—		64
Other, net	(12		)	—			(10		)	—		(22		)
Change in intercompany receivable/payable	1,261			2,998			(4,259		)	—		—
Total cash provided by (used in) financing activities	958			2,988			(4,673		)	—		(727		)

Effect of exchange rate changes on cash	—			—			(13		)	—		(13		)

Increase in cash and cash equivalents	967			169			153			—		1,289

Cash and cash equivalents at beginning of period	282			51			770			—		1,103
Cash and cash equivalents at end of period	$	1,249		$	220		$	923		$	—	$	2,392

Condensed Consolidating Statements of Cash Flows

Nine Months Ended November 27, 2010

(Unaudited)



	Best Buy Co., Inc.			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Total cash (used in) provided by operating activities	$	(410	)	$	(3,758	)	$	4,713		$	—	$	545

Investing activities
Additions to property and equipment	—			(199		)	(330		)	—		(529		)
Purchases of investments	(245		)	—			—			—		(245		)
Sales of investments	382			—			1			—		383
Proceeds from sale of business	—			—			21			—		21
Change in restricted assets	—			—			(1		)	—		(1		)
Other, net	—			—			10			—		10
Total cash provided by (used in) investing activities	137			(199		)	(299		)	—		(361		)

Financing activities
Repurchase of common stock	(1,128		)	—			—			—		(1,128		)
Borrowings of debt	500			—			1,425			—		1,925
Repayments of debt	(1		)	(10		)	(1,873		)	—		(1,884		)
Dividends paid	(178		)	—			—			—		(178		)
Issuance of common stock under employee stock purchase plan and for the exercise of stock options	171			—			—			—		171
Other, net	13			—			(12		)	—		1
Change in intercompany receivable/payable	(130		)	4,094			(3,964		)	—		—
Total cash (used in) provided by financing activities	(753		)	4,084			(4,424		)	—		(1,093		)

Effect of exchange rate changes on cash	—			—			8			—		8

(Decrease) increase in cash and cash equivalents	(1,026		)	127			(2		)	—		(901		)

Cash and cash equivalents at beginning of period	1,170			53			603			—		1,826
Cash and cash equivalents at end of period	$	144		$	180		$	601		$	—	$	925