Earnings per Share

3 Months Ended

May 28, 2011

Earnings per Share

Earnings per Share

8. Earnings per Share

We compute our basic earnings per share based on the weighted-average number of common shares outstanding and our diluted earnings per share based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive shares of common stock include stock options, nonvested share awards and shares issuable under our employee stock purchase plan, as well as common shares that would have resulted from the assumed conversion of our convertible debentures. Since the potentially dilutive shares related to the convertible debentures are included in the computation, the related interest expense, net of tax, is added back to net earnings, as the interest would not have been paid if the convertible debentures had been converted to common stock. Nonvested market based share awards and nonvested performance based share awards are included in the average diluted shares outstanding each period if established market or performance criteria have been met at the end of the respective periods.

The following table presents a reconciliation of the numerators and denominators of basic and diluted earnings per share attributable to Best Buy Co., Inc. (shares in millions):

	Three Months Ended
	May 28, 2011		May 29, 2010
Numerator
Net earnings attributable to Best Buy Co., Inc., basic	$	136	$	155
Adjustment for assumed dilution:
Interest on convertible debentures, net of tax	1		1
Net earnings attributable to Best Buy Co., Inc., diluted	$	137	$	156
Denominator
Weighted-average common shares outstanding	387.7		420.3
Effect of potentially dilutive securities:
Shares from assumed conversion of convertible debentures	8.8		8.8
Stock options and other	0.7		2.6
Weighted-average common shares outstanding, assuming dilution	397.2		431.7
Earnings per share attributable to Best Buy Co., Inc.
Basic	$	0.35	$	0.37
Diluted	$	0.35	$	0.36

The computation of weighted-average common shares outstanding, assuming dilution excluded options to purchase 29.2 million and 11.2 million shares of our common stock for the three months ended May 28, 2011, and May 29, 2010, respectively. These amounts were excluded as the options’ exercise prices were greater than the average market price of our common stock for the periods presented and, therefore, the effect would be antidilutive (i.e., including such options would result in higher earnings per share).