article 1.doc

Article 1

Best Buy Co., Inc. (ticker: BBY, exchange: New York Stock Exchange) News Release - 9-Jan-2002

Best Buy To Conduct Offering Of $350 Million In Convertible Subordinated Debentures MINNEAPOLIS, Jan 9, 2002 (BUSINESS WIRE) -- Best Buy Co., Inc. (NYSE:BBY) today announced that it has begun a private offering of approximately $350 million in convertible subordinated debentures. The securities will mature in 20 years and will not be callable until January 20, 2007. In addition, the securities will be convertible into shares of Best Buy common stock under specified conditions.

The Company said that the proceeds from the offering are expected to be used for general corporate purposes.

This press release does not constitute an offer to sell nor an offer to buy securities. The offering is being made only to qualified institutional buyers. The securities being offered and the shares of common stock issuable upon conversion of the convertible securities have not been registered under the U.S. or state securities laws. In addition, these securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Statements made in this news release, other than those concerning historical financial information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding information currently available, and are made pursuant to the "safe harbor" provisions of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. The Company's actual results could differ materially from those expressed in the forward-looking statements. Factors that could cause results to vary include, among others, those expressed in the Company's filings with the Securities and Exchange Commission. The Company has no obligation to publicly update or revise any of the forward-looking statements that may be in this news release.

About Best Buy Co., Inc.Minneapolis-based Best Buy Co., Inc. (NYSE:BBY) is North America's number one specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Company operates retail stores and commercial Web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca); Magnolia Hi-Fi (MagnoliaHiFi.com), Media Play (MediaPlay.com), On Cue (OnCue.com), Sam Goody (SamGoody.com), and Suncoast (Suncoast.com). The Company reaches consumers through more than 1,800 retail stores in the U.S., Canada, Puerto Rico and the U.S. Virgin Islands. CONTACT: Best Buy Co., Inc., Minneapolis Media Contact: Jim McManus, 952/996-4131 [email protected] or Investor Contact: Jennifer Driscoll, 952/947-2350 [email protected]

Article 2


Best Buy's December Sales Increase 43% to $3.86 Billion; Company raises Q4 EPS guidance to $1.35 - $1.40 LAS VEGAS, Jan 9, 2002 (BUSINESS WIRE) -- Best Buy Co., Inc. (NYSE:BBY) December Sales Summary (Dollars in billions) Total Total Sales Comparable Store Sales Sales Change(1) Change ---------------- --------- ------------- -------------------------- Total Company $3.86 43% 6.2%(2) Best Buy $3.16 18% 6.2% Musicland $0.41 2% 3.8% International(3) $0.28 21% 16.6% Year-to-Date Sales Summary (Dollars in billions) Total Total Sales Comparable Store Sales Sales Change(1) Change ---------------- --------- ------------- -------------------------- Total Company $16.48 31% 1.8%(2) Best Buy $14.38 15% 1.8% Musicland $1.62 (1%) (0.6%) International(3) $0.40 21% 17.9%1 The change in total Company sales reflects acquisitions of businesses from their dates of acquisition. The change in Musicland and International total sales is based on the prior year's pro forma sales for acquired businesses.2 The total Company comparable store sales figure represents only Best Buy stores open at least 14 months.3 Total sales of Burnaby, B.C.-based Future Shop stores (International) are expressed in U.S. dollars, but Future Shop total sales change and comparable store sales figures are calculated based on Canadian dollar sales.Best Buy Co., Inc. (NYSE:BBY), from the Consumer Electronics Show, today reported total December sales of $3.86 billion, an increase of 43 percent.

The increase in sales for the five-week period ended Jan. 5 was driven by a gain in comparable store sales of 6.2 percent and the addition of 65 Best Buy stores in the past 12 months. Sales also benefited from the inclusion of sales from Musicland's approximately 1,300 stores, which were acquired in January 2001, and from Future Shop's 95 stores in Canada, which were acquired in November 2001.

Strong sales of digital and video gaming products contributed to a comparable store sales increase of 6.2 percent at Best Buy stores during the month, despite the nation's recession and on top of a 3.7-percent increase in December of fiscal 2001. Strong sales of digital products, including digital televisions, digital cameras, digital camcorders and DVD hardware, drove the results, along with significant increases in video gaming product sales. Comparable store sales increased 9.2 percent after adjusting for the calendar shift, which included more post-

Thanksgiving shopping days in the third quarter.

At Musicland stores -- which include Media Play, On Cue, Sam Goody and Suncoast stores -- comparable store sales for the month were up 3.8 percent. Comparable store sales at Future Shop stores, which comprise the Best Buy International segment, increased by 16.6 percent.

"December sales exceeded our expectations for all of the businesses, reflecting both the strength of new products and outstanding execution across the organization," said Brad Anderson, vice chairman, president and chief operating officer of Best Buy. "Based on these results, we are expecting our earnings for the fiscal fourth quarter to exceed 50 percent, exceeding our earlier guidance."

In the first 10 months of the fiscal year (44 weeks), total sales grew 31 percent to $16.48 billion, reflecting 59 new Best Buy stores, as well as the acquisitions of Musicland, Future Shop and Magnolia Hi-Fi stores. Comparable store sales for the first 10 months were up 1.8 percent.

"Customer traffic is up, and the momentum of our business is encouraging," Anderson added. "This extraordinary performance is a reflection of our employees' commitment to our customers and the increasing appeal of our store brands."

Best Buy Stores Benefit from Digital Product CycleBest Buy stores generated total sales of $3.16 billion in the period, up 18 percent. Entertainment software sales posted the largest gains in the month, driven by sales of video gaming hardware and software and DVD movies. Sales of digital televisions, digital cameras, digital camcorders, DVD hardware and home theater systems propelled an increase in sales of consumer electronics, which is expected to be the Company's largest category in fiscal 2003. Sales of home office products declined due to a modest decline in sales of desktop computers, which was partially offset by gains in notebook computers and peripherals. Sales of major appliances drove positive comparable store sales in the category, marking a turnaround in the year-to-date trend.

"Sales of digital products -- including DVD hardware and software, digital cameras and camcorders and digital TVs -- are on track to be 19 percent of sales this quarter, compared with 15 percent in the prior year's quarter," Anderson said. "Yet it remains fairly early in the digital product cycle. Digital products are expected to grow to 23 percent of Best Buy sales by the fourth quarter of the next fiscal year."

BestBuy.com Traffic RisesAs sales at Best Buy stores have grown, its online channel has played an integral role. This past holiday season, 19 percent of total store sales were significantly influenced by customers' visits to BestBuy.com. BestBuy.com also had one of the highest traffic levels of all sites this holiday season, up 20 percent over last year and ranking third among competitive Internet retailers in the November/December holiday period, according to industry rankings. John Walden, president of BestBuy.com, said, "Best Buy's technology-oriented consumer is responding well to the integrated information and sales experience offered by Best Buy stores and BestBuy.com. We believe we are at the forefront of discovering the power of clicks-and-mortar." Sales from Other Store Brands IncreaseSales at Musicland stores of $414 million rose 2 percent compared with the prior year's pro forma sales, despite a decline in mall traffic. The increase reflected market share growth and the remerchandising of most Sam Goody stores to include more DVD movies, video gaming hardware and software, and consumer electronics. Comparable store sales of video game hardware and software, including two new gaming platforms, posted triple-digit gains. Amid strong new releases and a growing installed base of DVD hardware, comparable store sales of DVD movies increased in the high double digits. Sales of prerecorded music continued to

decline.

Musicland currently operates approximately 640 Sam Goody stores, 400 Suncoast mall stores, 76 Media Play superstores and 220 On Cue rural stores.

At Future Shop, Canada's largest, fastest-growing national retailer and e-tailer of consumer electronic products, comparable store sales increased 16.6 percent, which contributed to total sales of $275 million U.S. The month included a significant increase in sales during the week of Christmas and during Boxing Day, Canada's largest shopping day of the year. The most significant increases were in sales of video game hardware and software, DVD hardware and software, digital cameras and digital televisions. Sales of wireless communications devices, notebook computers and major appliances also increased.

Sales at Magnolia Hi-Fi, the Company's Pacific Northwest-based retailer of high-end consumer electronics, posted single-digit comparable store sales declines in the period due to the recession and high unemployment in Washington. Magnolia Hi-Fi operates 13 stores in Washington, Oregon and California.

Fourth-Quarter Earnings to Exceed Analyst Estimates"Sales and gross margins exceeded our expectations," said Darren Jackson, senior vice president and CFO of Best Buy. "Given the strength of our holiday performance and the current momentum of the business, our fourth-quarter earnings are anticipated to be $1.35 to $1.40 per share, which would put us on track to increase earnings nearly 30 percent for the current fiscal year." According to First Call, the current consensus estimate for Best Buy's fourth-quarter earnings is $1.27 per share.

Best Buy's December sales conference call is scheduled to begin at 10 a.m. EST today and will be available on its Web site, both live and after the call, at www.BestBuy.com. Investors may access the call by clicking on "Investor Relations."

Statements made in this news release, other than those concerning historical financial information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding information currently available, and are made pursuant to the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. The Company's actual results could differ materially from those expressed in the forward-looking statements. Factors that could cause results to vary include, among others, those expressed in the Company's filings with the Securities and Exchange Commission. The Company has no obligation to publicly update or revise any of the forward-looking statements that may be in this news release.

About Best Buy Co., Inc.Minneapolis-based Best Buy Co., Inc. is North America's No. 1 specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Company operates retail stores and web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca), Magnolia Hi-Fi (MagnoliaHiFi.com), Media Play (MediaPlay.com), On Cue (OnCue.com), Sam Goody (SamGoody.com) and Suncoast (Suncoast.com). The Company reaches consumers through nearly 1,900 retail stores in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. CONTACT: Best Buy Co., Inc. Jennifer Driscoll, 952/250-5497 (cellular) [email protected]

Article 3


Best Buy Expects Earnings Growth of 18-21% in Fiscal 2003; Company Announces Preliminary Store Expansion Plans

LAS VEGAS, Jan 9, 2002 (BUSINESS WIRE) -- Best Buy Co., Inc. (NYSE:BBY), from the Consumer Electronics Show, today provided initial guidance for its fiscal 2003 results, based on current business trends, comparable store sales gains and new store growth plans.

Earnings growth is anticipated to be 18 to 21 percent in fiscal 2003, on top of projected earnings growth in the current fiscal year of nearly 30 percent. Growth drivers are expected to be an increased market presence in the U.S., including new store openings in the coming year, as well as the benefits of remerchandising many of the Company's Sam Goody stores and contributions from the Future Shop acquisition.

Richard M. Schulze, founder, chairman and CEO, said, "Best Buy's goal is to be a consistent top-quartile performer among all retailers. I am pleased that we are on track to deliver at that level yet again in the current fiscal year. We intend to build on the current year's success with another strong performance in fiscal 2003."

The Company, which is North America's leading specialty retailer of entertainment and digital technology products, expects total sales to grow by 17 to 20 percent in fiscal 2003. This growth is expected to be the result of new stores opening, the addition of Future Shop, and comparable store sales gains in the low single digits. Driving these gains are digital products (particularly televisions, cameras, camcorders and DVD hardware), gaming hardware and software and improved sales of appliances.

Best Buy Stores to Enter Five StatesThe Company expects to open approximately 60 Best Buy stores in major U.S. markets during its 2003 fiscal year, which begins on March 3. Approximately half of the new stores are anticipated to be 30,000 square feet, and the other half will be 45,000 square feet. While many new stores will solidify Best Buy's presence in existing markets, plans also include grand openings in five new states: Alaska, Idaho, Utah, West Virginia and Wyoming. The Company expects to continue its New York market expansion plan with eight to 10 new stores in the New York area, including its first store in Manhattan. In addition, Best Buy anticipates opening a flagship store in downtown San Francisco.

All of the U.S. Best Buy stores are expected to open in the Company's newest store format, which was designed specifically to highlight digital technology. The new look and feel of the stores make it easier for customers to choose the latest in technology and entertainment products by using space more efficiently and by improving customer service.

Brad Anderson, vice chairman, president and chief operating officer, said, "We have made meaningful market share gains in the current year. Our plans for next year will allow us to grow share further while staying on track to have 600 Best Buy stores by fiscal 2004."

The Company's growth plans extend to its other brands as well. It expects to open up to six new Magnolia Hi-Fi stores in California in fiscal 2003. Building on its acquisition of Future

Shop, the Company also anticipates opening approximately 10 of its 30,000-square-foot stores in Canada. All of these new stores are expected to help build the Company's momentum throughout North America and strengthen its market share with consumers.

The Company has not yet announced its growth plans for Musicland. Those plans, as well as the results of its recent remerchanding of Sam Goody mall stores and rural On Cue test stores, are expected to be announced when fourth-quarter earnings are released on April 2.

As part of its growth management, the Company regularly evaluates the performance of existing stores for expansion, closing or relocation opportunities. Such activities, which would be determined at the end of the fiscal year, currently are not expected to have a material impact on the Company.

Anderson added, "Our long-term growth strategy is to be a global brand, with Best Buy at the core, surrounded by other strong brands. Best Buy wants to continue to find ways to serve new consumers and new markets in order to continue our top-quartile growth."

Best Buy's December sales conference call is scheduled to begin at 10 a.m. EDT today and will be available on the Company's Web site, both live and after the call, at www.BestBuy.com. Investors may access the call by clicking on "Investor Relations."


About Best Buy Co., Inc.Minneapolis-based Best Buy Co., Inc. is North America's No. 1 specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Company operates retail stores and web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca), Magnolia Hi-Fi (MagnoliaHiFi.com), Media Play (MediaPlay.com), On Cue (OnCue.com), Sam Goody (SamGoody.com) and Suncoast (Suncoast.com). The Company reaches consumers through nearly 1,900 retail stores in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. CONTACT: Best Buy Co., Inc. Laurie Bauer, 612/961-8096 cellular [email protected] or Jennifer Driscoll, 952/250-5497 cellular [email protected]

Article 4

Best Buy Co., Inc. (ticker: BBY, exchange: New York Stock Exchange) News Release - 18-Dec-2001

Best Buy Third-Quarter Earnings Increase 40% to $80 Million, or $0.37 Per Share MINNEAPOLIS, Dec 18, 2001 (BUSINESS WIRE) -- Best Buy Co., Inc. (NYSE:BBY): ---------------------------------------------------------------------- Total Company Third quarter performance summary ----------------------------------($ in millions, except per share amounts) ---------------------------------- This Last Last year year year pro forma(1)----------------------------------- ----------------------------------Total company sales $4,756 $3,732 $4,263Total store sales % change 27% 20% N/AComparable store sales change(2) 1.6% 5.9% N/AGross profit margin as % of sales 21.6% 18.5% 20.5%SG&A expenses as % of sales 18.9% 16.2% 18.4%Earnings per diluted share $0.37 $0.27 $0.23----------------------------------------------------------------------(1) The pro forma information presents the combined results of operations of Best Buy, Musicland and Future Shop. Musicland was acquired in the fourth quarter of fiscal 2001. Its results of operations are reflected as if Musicland had been acquired at the beginning of fiscal 2001 and includes amortization of goodwill. Future Shop was acquired at the beginning of November fiscal 2002. Its results of operations are reflected as if Future Shop had been acquired at the beginning of November fiscal 2001 and do not include amortization of goodwill.(2) Includes only sales at Best Buy stores open at least 14 months.---------------------------------------------------------------------- Total Company Nine months performance summary ----------------------------------($ in millions, except per share amounts) ---------------------------------- This Last Last year year Year pro forma(1)----------------------------------- ----------------------------------Total company sales $12,617 $9,865 $11,206Total store sales % change 28% 21% N/AComparable store sales change(2) 0.6% 6.7% N/AGross profit margin as % of sales 22.4% 19.7% 21.7%SG&A expenses as % of sales 19.5% 16.6% 18.9%Earnings per diluted share $1.03 $0.97 $0.87----------------------------------------------------------------------(1) The pro forma information presents the combined results of operations of Best Buy, Musicland and Future Shop. Musicland was acquired in the fourth quarter of fiscal 2001. Its results of operations are reflected as if Musicland had been acquired at the

beginning of fiscal 2001 and includes amortization of goodwill. Future Shop was acquired at the beginning of November fiscal 2002. Its results of operations are reflected as if Future Shop had been acquired at the beginning of November fiscal 2001 and do not include amortization of goodwill.(2) Includes only sales at Best Buy stores open at least 14 months.Best Buy Co., Inc. (NYSE:BBY) today reported net earnings of $80 million, or $0.37 per diluted share, for the quarter ended Dec. 1, 2001, up 40 percent from $57 million, or $0.27 per diluted share, for the quarter ended Nov. 25, 2000.

"Our 40-percent increase in earnings feels simply extraordinary in light of the challenges in the quarter. I am convinced that our employees' commitment to our customers made the difference," said Best Buy Founder, Chairman & CEO Richard M. Schulze. "Our Best Buy stores continued to gain market share, and our New York-area stores led the country with double-digit comparable store sales growth. Our Musicland stores met our targets despite reduced mall traffic, as our remerchandising of Sam Goody began to take hold. Also, our entry into Canada with Future Shop stores is off to a great start. Given the tragic events at the beginning of the quarter, we are both fortunate and pleased with our performance."

As reported on Dec. 6, total sales for the third quarter increased 27 percent to $4.8 billion from $3.7 billion a year ago. The sales increase reflected the addition of 65 Best Buy stores in the past 12 months, which brought the total to 478 stores, as well as the inclusion of sales from approximately 1,300 Musicland Group stores and a month of sales from 95 Future Shop stores. Comparable store sales rose 1.6 percent, benefiting from an extra week of holiday sales in this year's third quarter.

"Our improving sales trend and our strong finish to the third quarter lead us to be optimistic about the holiday selling season," Schulze added. "We are focused on doing the best job for technology and entertainment customers, and we believe our market share continues to grow in many of the digital product categories."

Gross profit margins for the Company were 21.6 percent of sales in the quarter, up by 3.1 percent of sales compared with last year's third quarter. The inclusion of Musicland results in the current year increased the Company's total gross profit margin by 1.2 percent of sales in the quarter. The balance of the gross profit margin improvement reflects changes in product mix, improved inventory management and a stable promotional environment.

The SG&A expense rate was 18.9 percent of sales for the quarter versus 16.2 percent of sales in the third quarter of fiscal 2001. The inclusion of Musicland's higher expense structure accounted for nearly two-thirds of the increase, adding 1.8 percent of sales to the SG&A rate in the quarter. In addition, slower comparable store sales growth had a deleveraging impact on the expense rate. The rate increase was partially offset by productivity gains and the elimination of the launch costs of BestBuy.com, which were in the prior year's quarter. The SG&A expense rate was up modestly compared to the prior year's third quarter on pro forma basis.

Total operating income was 2.7 percent of sales for the quarter, up by 0.4 percent of sales compared with last year's third-quarter rate, as gross profits grew faster than SG&A expenses. Net interest income was $3 million in the third quarter compared with net interest income of $8 million for the same period last year. The decrease in interest income was primarily due to lower yields on the investment portfolio.

For the first nine months, the Company's total sales rose 28 percent to $12.6 billion, driven by the additional Best Buy stores and the inclusion of Musicland's results. Comparable store sales

were up 0.6 percent, following a 6.7-percent increase last year, as strength in consumer electronics and entertainment software offset soft sales of desktop computers. Gross profit margins in the first nine months rose by 2.7 percent of sales to 22.4 percent primarily due to favorable changes in product mix as well as improved inventory control at Best Buy stores, and inclusion of Musicland results, which added 1.4 percent of sales.

SG&A expenses rose by 2.9 percent of sales to 19.5 percent in the first nine months. Musicland's higher expense structure accounted for the majority of the increase. Total Company operating income rose to 2.9 percent of sales. Year-to-date earnings per share increased 6 percent to $1.03, including $0.16 cents per share of dilution from Musicland. Future Shop earnings did not materially impact the quarter or year-to-date results. The prior year's earnings per share in the first nine months were $0.97.

Darren Jackson, Senior Vice President - Finance and CFO, said, "December sales are off to a good start and meeting our expectations. Comparable store sales are expected to be flat to up 2 percent in the fourth quarter, reflecting the 2-percentage-point negative impact of the calendar shift. The promotional activity has picked up. Yet, we still expect earnings to grow at least 40 percent in the fourth quarter. We anticipate earnings per share in the range of $1.25 to $1.30 in the fourth quarter. That range includes accretion from Musicland of approximately 14 to 16 cents per share and accretion from Future Shop of 1 to 2 cents per share. Overall, earnings appear to be on track to grow 23 to 25 percent in the current fiscal year."

----------------------------------------------------------------------Third Quarter ($ in millions) Nine Months----------------------------------------------------------------------This Last Best Buy performance This Last year year summary(1) yearyear----------------------------------------------------------------------$4,213 $3,732 Sales $11,293 $9,865 Comparable store sales 1.6% 5.9% %change(2) 0.6% 6.7% Gross profit margin as 20.4% 18.5% % of sales21.0% 19.7% SG&A expenses as 17.0% 16.2% % of sales 17.4% 16.6% $144$85 Operating income $402 $309 Operating income as 3.4% 2.3% % ofsales 3.6% 3.1%----------------------------------------------------------------------(1) Includes aggregation of results at all of the Company's businesses other than Musicland and Future Shop. Future Shop will be reported in a separate segment beginning with the fourth quarter.(2) Includes only sales at Best Buy stores open at least 14 months.Total Best Buy store sales grew 13 percent to $4.2 billion due to new store growth and a 1.6-percent comparable store sales gain in the quarter. Without the calendar shift, comparable store sales would have declined by 0.8 percent. Best Buy opened 39 stores in the quarter compared to 40 in the same quarter a year ago.

Gross profit margins at Best Buy stores improved by 1.9 percent of sales, reflecting a higher-margin product mix, lower markdowns and strong inventory management. SG&A expenses rose by 0.8 percent of sales, due to the deleveraging impact slower comparable store sales has on fixed costs. Operating income at Best Buy stores increased 1.1 percent to $144 million, or to 3.4 percent of sales. Average Best Buy store inventories decreased by 2 percent compared with a year ago due to controlled purchases.

---------------------------------------------------------------------- Third Quarter ($ in millions) Nine Months---------------------------------------------------------------------- This Last year Musicland performance This Last year

year pro forma summary(1) year pro forma---------------------------------------------------------------------- $420 $424 Sales $1,201 $1,234 Comparable store sales 0.3% (2.2%) % change (2.1%) 0.9% Gross profit margin as 33.7% 37.0% % of sales 35.2% 37.4% SG&A expenses as 37.7% 36.9% % of sales 38.2% 37.3% Operating income $(17) $--- (loss) $(37) $2 Operating income as -4.0% 0.1% % of sales -3.1% 0.2%----------------------------------------------------------------------(1) Pro forma results of operations of Musicland are presented as though it had been acquired at the beginning of the 2001 fiscal year and include amortization of goodwill.Musicland comparable store sales in the third quarter were up slightly, despite declines in mall traffic and weakness in sales of prerecorded music. Sales of entertainment software, including DVD movies and video gaming, were very strong, and sales of consumer electronics increased modestly. Musicland's store count was 1,327 stores, up slightly. Gross profit margins declined by 3.3 percent of sales, somewhat more than expected, as a result of the repositioning of the product mix. SG&A expenses increased, reflecting the costs to implement the remerchandising of the Sam Goody stores. Musicland's financial results, which are seasonally slower in the first three quarters of the year, produced a quarterly operating loss of $17 million. The segment's results were in line with management's expectations. Musicland's results also included approximately $4 million in goodwill amortization for the quarter.

The Company will conduct a conference call for analysts, institutional investors and news media at 10 a.m. EDT today. Individuals may access the live call via the Internet on the Company's Web site at www.BestBuy.com by clicking on the "About Us" link and then selecting the "Investor Relations" link. The call will be posted on the "Investor's Overview." Following the live event, the call will be posted on the Audio Archive page of Best Buy's Web site and may be accessed at any time. Best Buy's quarterly financial results and news releases can be found on the Internet at the Company's Web site, www.BestBuy.com, or accessed via Business Wire's Web site at www.businesswire.com.

The Company is expected to announce its December sales on Jan. 9, 2002, and its fourth-quarter sales (for the period ending on March 3) on March 7, 2002.


About Best Buy Co., Inc.Minneapolis-based Best Buy Co., Inc. is North America's No. 1 specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Company operates retail stores and web sites under the names: Best Buy (BestBuy.com), Future Shop

(FutureShop.ca), Magnolia Hi-Fi (MagnoliaHiFi.com), Media Play (MediaPlay.com), On Cue (OnCue.com), Sam Goody (SamGoody.com) and Suncoast (Suncoast.com). The Company reaches consumers through nearly 1,900 retail stores in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. BEST BUY CO., INC. CONSOLIDATED STATEMENTS OF EARNINGS ($ in millions, except per share amounts) (Unaudited) THIRD QUARTER NINE MONTHS Last Last This Last year pro This Last year pro year year forma(1) year year forma(1) ------------------------ ------------------------Revenues $4,756 $3,732 $4,263 $12,617 $9,865 $11,206Cost of goods sold 3,728 3,043 3,391 9,795 7,922 8,774 ------- ------- ------- -------- ------- -------Gross profit 1,028 689 872 2,822 1,943 2,432Selling, general & administrative expenses 899 604 785 2,455 1,634 2,119 ------- ------- ------- -------- ------- -------Operating income 129 85 87 367 309 313Net interest income (expense) 3 8 (5) (6) 25 (8) ------- ------- ------- -------- ------- -------Earnings before income tax expense 132 93 82 361 334 305Income tax expense 52 36 32 141 128 119 ------- ------- ------- -------- ------- -------Net earnings $80 $57 $50 $220 $206 $186 ======= ======= ======= ======== ======= =======Net earnings per share Basic $0.38 $0.28 $0.24 $1.05 $1.00 $0.90 Diluted $0.37 $0.27 $0.23 $1.03 $0.97 $0.87Weighted number of shares (in millions) Basic 211.1 207.7 207.7 210.1 206.3 206.3 Diluted 214.8 213.0 213.0 214.5 212.7 212.7(1) The pro forma information presents the combined results of operations of Best Buy, Musicland and Future Shop. Musicland was acquired in the fourth quarter of fiscal 2001. Its results of operations are reflected as if Musicland had been acquired at the beginning of fiscal 2001 and includes amortization of goodwill. Future Shop was acquired at the beginning of November fiscal 2002. Its results of operations are reflected as if Future Shop had been acquired at the beginning of November fiscal 2001 and do not include amortization of goodwill. BEST BUY CO., INC. CONSOLIDATED CONDENSED BALANCE SHEETS ($ in millions) (Unaudited) Dec. 1, Nov. 25, 2001 2000 ---------- -----------ASSETS Current assets

Cash & cash equivalents $ 843 $ 729 Receivables 387 427 Recoverable costs from developed properties 83 111 Merchandise inventories 3,459 2,328 Other current assets 132 58 ---------- ----------- Total current assets 4,904 3,653 Net property & equipment 1,753 1,050 Goodwill, net 750 - ---------- ----------- Other assets 95 79 ---------- ----------- TOTAL ASSETS $7,502 $4,782 ========== ===========LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities Accounts payable $3,571 $2,483 Accrued compensation 236 106 Accrued liabilities 898 426 ---------- ----------- Total current liabilities 4,705 3,015 Long-term liabilities 290 120 Long-term debt 364 21 Shareholders' equity 2,143 1,626 ---------- ----------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $7,502 $4,782 ========== ===========CONTACT: Best Buy Co., Inc., Minneapolis Susan Hoff, 952/947-2443 [email protected] or Jennifer Driscoll, 952/947-2350 [email protected]

Article 5

Best Buy Co., Inc. (ticker: BBY, exchange: New York Stock Exchange) News Release - 6-Dec-2001

Best Buy's Third-Quarter Sales Increase 27% to $4.76 Billion; Company Expects Earnings Growth of More Than 30%, Exceeding Analyst Estimates

MINNEAPOLIS, Dec 6, 2001 (BUSINESS WIRE) -- Third-Quarter Sales Summary (U.S. dollars in billions) Total Total Sales Comparable Store Sales Change Sales Change------------------- ---------- ------------- -----------------------Total Company $4.76 (a)27% (aa)1.6%Best Buy $4.19 12% 1.6%Musicland $0.42 -1% 0.3% Year-to-Date Sales Summary (U.S. dollars in billions) Total Total Sales Comparable Store Sales Change Sales Change------------------- ---------- ------------- -----------------------Total Company $12.62 (a)28% (aa)0.6%Best Buy $11.22 14% 0.6%Musicland $1.20 -3% -2.1%(a) The change in total Company sales reflects sales from Musicland,Magnolia Hi-Fi and Future Shop stores from their dates of acquisition.(aa) The total Company comparable store sales figure represents onlyBest Buy stores open at least 14 months. Musicland and Magnolia Hi-Fiwill be included in total Company comparable store sales in the firstquarter of fiscal 2003.Best Buy Co., Inc. (NYSE:BBY) today reported total sales of $4.76 billion, an increase of 27 percent, for the Company's fiscal 2002 third quarter, which ended on Dec. 1. The increase was driven by a gain in comparable store sales of 1.6 percent, which exceeded analyst estimates, and the addition of 65 Best Buy stores in the past 12 months. Sales also benefited from the inclusion of sales from Musicland's approximately 1,300 stores, which were acquired in fiscal 2001, and from Future Shop's 95 stores in Canada, which were acquired in November 2001.

Comparable store sales at Best Buy stores in the third quarter rose 1.6 percent, as sales dropped following the tragic events of Sept. 11 but then strengthened throughout the quarter. The increase was on top of comparable store sales gains of a strong 5.9 percent in the third quarter of fiscal 2001. At Musicland stores -- which include Media Play, On Cue, Sam Goody and Suncoast stores - comparable store sales for the quarter were up 0.3 percent. The Company's comparable store sales were lifted approximately 2.4 percent by a

calendar shift, which placed more post-Thanksgiving shopping days in the quarter.

"We are proud to say that earnings per share will grow more than 30 percent this quarter, which is particularly impressive given the unusual pressures on our performance this past quarter," said Brad Anderson, vice chairman, president and chief operating officer of Best Buy. "This level of achievement is a testament to the commitment and determination of all of our employees. I would like to thank them for remaining focused during such difficult times."

In the first nine months of the fiscal year, total sales grew 28 percent to $12.62 billion, reflecting new Best Buy stores as well as the acquisitions of Musicland, Future Shop and Magnolia Hi-Fi stores. The Company's comparable store sales for the first nine months were up 0.6 percent.

"We believe that we continue to gain market share as a result of the growing appeal of the Best Buy brand and our attention to customer needs," Anderson added.

Best Buy Stores See Large Gains in Sales of Video Gaming and DVD Movies

Best Buy stores' sales mix, by major product category, was as follows:

Quarter Ended Nine Months Ended------------------ -----------------12/01/01 11/25/00 Sales Mix Summary 12/1/01 11/25/00-------- -------- --------------------------- ------- -------- 33% 35% Home Office 33% 35% 32% 32% Consumer Electronics 32% 31% 21% 19% Entertainment Software 20% 18% 6% 7% Appliances 7% 8% 8% 7% Other 8% 8%--------- -------- -------- -------- 100% 100% TOTAL 100% 100%--------- -------- -------- --------Entertainment software sales posted the most impressive gains in the quarter, driven by sales of video gaming hardware and software as well as DVD movies. The launch of two new gaming platforms (Microsoft's XBox and Nintendo's Gamecube) was among the highlights of the quarter. Consumer electronics also grew, led by increases in sales of digital televisions, digital cameras, home theater systems and DVD hardware. Best Buy introduced broadband cable and XM Radio during the quarter. Home office sales declined in the mix, although sales of wireless communications and notebook computers increased. Sales of desktop computers, which had declined significantly in the past three quarters, improved but remained soft. The launch of a new operating system, Microsoft XP, contributed to sales of computers and peripherals.

Digital products - including DVD hardware and software, digital cameras and camcorders, digital TVs and wireless communications devices - comprised 17 percent of sales in the third quarter, up from 11 percent last year.

Best Buy opened 39 stores during its fiscal third quarter, including 14 of the 30,000-square-foot stores and 25 of the 45,000-square-foot stores. The openings, which bring the store count to 478, included the new markets of Seattle; New Orleans; and Hartford, Conn.; and a new state, Vermont.

Sales from Acquired Stores Also Improve

Sales at Musicland stores were up slightly compared with the third quarter of fiscal 2001, amid a decline in mall traffic, particularly after Sept. 11. Sales of prerecorded music and consumer electronics declined. However, sales of DVD movies continued to increase significantly, benefiting from the remerchandising of Sam Goody stores as well as an increase in the installed base of DVD hardware and strong new software releases. Sales of video game hardware and software also jumped. Gaming products now are sold at approximately 700 Musicland stores, up from 80 stores 18 months ago.

During the quarter, the Company began testing the introduction of new products at 20 rural On Cue stores and a transformed store environment at seven Sam Goody stores. Musicland currently operates approximately 610 Sam Goody mall stores, 382 Suncoast mall stores, 76 Media Play superstores and 233 On Cue rural stores.

Sales at Magnolia Hi-Fi, the Company's Pacific Northwest-based retailer of high-end consumer electronics, posted double-digit comparable store sales declines in the third quarter. However, sales of digital TVs and DVD hardware continued to grow. Magnolia Hi-Fi operates 13 stores in Washington, Oregon and California.

The quarter included a month of sales, or approximately $124 million, from Future Shop, which the Company acquired through a cash tender offer on Nov. 4. Future Shop is Canada's largest, fastest-growing national retailer and e-tailer of consumer electronic products. It operates 95 stores and has 8,000 employees. Future Shop had quarterly net sales of approximately $350 million, up 6 percent, on a comparable store sales increase of 6 percent. Future Shop's results will be reported each quarter as part of a new Best Buy International segment, beginning with the fourth quarter of the current fiscal year.

Third-Quarter Earnings to Beat Expectations"We're pleased that our earnings per share again will exceed analysts' estimates for the quarter. We currently estimate earnings of 36 cents per share or better," said Darren Jackson, senior vice president and CFO of Best Buy. According to First Call, the current consensus estimate for Best Buy's third-quarter earnings is 34 cents per share. "We expect earnings to exceed our original guidance, due to improving sales trends, combined with stronger-than-expected margins, more focused promotional activity and diligent expense control," Jackson added.

Best Buy is scheduled to release its third-quarter earnings on Tuesday, Dec. 18. Its earnings conference call is scheduled to begin at 10 a.m. EDT on Dec. 18 and will be available on its Web site, both live and after the call, at www.BestBuy.com. Investors may access the call by clicking on "Investor Relations."


About Best Buy Co., Inc.Minneapolis-based Best Buy Co., Inc. is North America's No. 1 specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The

Company operates retail stores and web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca), Magnolia Hi-Fi (MagnoliaHi-Fi.com), Media Play (MediaPlay.com), On Cue (OnCue.com), Sam Goody (SamGoody.com) and Suncoast (Suncoast.com). The Company reaches consumers through nearly 1,900 retail stores in the United States, Canada, Puerto Rico and the U.S. Virgin Islands.

Article 6

Best Buy Completes Future Shop Acquisition

MINNEAPOLIS--(BUSINESS WIRE)--Nov. 5, 2001--Best Buy Co., Inc. (NYSE:BBY), the largest consumer electronics retailer in the U.S., today announced the completion of its acquisition of Future Shop Ltd., Canada's leading consumer electronics retailer. Future Shop became a wholly owned subsidiary of Best Buy effective on November 4, 2001, and there will no longer be trading of Future Shop shares on the Toronto Stock Exchange.

"The completed acquisition of Future Shop is an exciting step for both companies," said Best Buy Chairman & CEO Richard M. Schulze. "It helps achieve Best Buy's goal of becoming a global leader in the technology and entertainment industry, and provides Future Shop with the resources of a multi-national organization committed to growth and expansion throughout Canada."

As part of the acquisition, Hassan Khosrowshahi - who founded Future Shop in 1982 - has stepped down as Chairman and CEO. Future Shop President & COO Kevin Layden will remain at the helm, reporting to Best Buy President and COO Brad Anderson. Layden said, "The post-merger integration process will be a collaborative effort, maximizing the talent and expertise of Future Shop employees. We look forward to being a part of the Best Buy family."

About Best Buy Co., Inc. -- Minneapolis-based Best Buy Co., Inc. (NYSE:BBY) is the number one specialty retailer of consumer electronics, personal computers, entertainment software and appliances in the U.S. The Company operates retail stores and commercial web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca); Magnolia Hi-Fi (MagnoliaHiFi.com), Media Play (MediaPlay.com), On Cue (OnCue.com), Sam Goody (SamGoody.com), and Suncoast (Suncoast.com). The Company reaches consumers through more than 1,800 retail stores nationwide, in Canada, in Puerto Rico and in the U.S. Virgin Islands.

About Future Shop

Future Shop, a wholly owned subsidiary of Best Buy Co., Inc. (NYSE:BBY), is Canada's largest, fastest-growing national retailer and e-tailer of consumer electronic products for the digital age, with 91 stores and the nation's premier Internet-based electronics superstore, at FutureShop.ca. Future Shop and its 7,300 associates are committed to providing Canadians with expert service; the latest digital products such as DVD movies and wireless Internet devices; and a wide selection of televisions, computers, music and appliances. For more information about Future Shop, visit the company's Web site at www.FutureShop.ca.

Statements made in this news release, other than those concerning historical financial information, should be considered forward looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding information currently available, and are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results could differ materially from those expressed in the forward-looking statements. Factors that could cause results to vary include, among others; those identified in the Company's filings with the Securities and Exchange Commission. The Company has no obligation to publicly update or revise any of the forward-looking statements that may be in this news release.

Article 7Best Buy Announces Future Shop Takeover Bid Results; All Regulatory Approvals Received, Tender Offer Expires

MINNEAPOLIS--(BUSINESS WIRE)--Nov. 1, 2001--Best Buy Co., Inc. (NYSE:BBY), today

announced the successful expiration of its the tender offer for Burnaby, BC-based Future

Shop Ltd. (TSE:FSS.) following the receipt of all necessary regulatory approvals. A total of

32,784,000 common shares of Future Shop had been tendered as of 5 p.m., PST, on Oct.

31, 2001, under Best Buy's CDN $17.00 per share (or approximately US $10.80 per share)

cash takeover bid for all outstanding common shares. This represents approximately 98

percent of Future Shop's common shares on a fully diluted basis.

Best Buy expects to take up all Future Shop common shares deposited under the takeover

bid on Nov. 4, 2001. Payment for the common shares deposited is to be made by

Computershare Trust Company of Canada, the depositary for the takeover bid.

Best Buy intends to acquire those Future Shop common shares, which have not been

deposited, as soon as possible through the exercise of its compulsory acquisition rights. As

a result, on Nov. 4, 2001, Future Shop is expected to become a wholly owned subsidiary of

Best Buy. Future Shop will be delisted from the Toronto Stock Exchange beginning on Nov.

5, 2001.

"We are pleased that the transaction was cleared before the beginning of the important

holiday selling season," said Best Buy Founder, Chairman & CEO Richard M. Schulze. "Our

focus now is on delivering to consumers the technology and entertainment gifts they want."

This news release is neither an offer to purchase nor a solicitation of an offer to sell shares

of Future Shop. Future Shop shareholders are advised to read the takeover bid circular and

the directors' circular regarding the takeover bid referred to in this announcement. The

takeover bid circular (including an offer to purchase and related documents) and the

directors' circular contain important information, including the terms and conditions of the

takeover bid, which should be read carefully before any decision is made with respect to the

takeover bid.

The takeover bid circular, the directors' circular and certain related documents are available

at the Canadian Securities Administrator's Web site at www.sedar.com and may be

obtained from the Dealer Manager or the Information Agent for the takeover bid, as set forth

in the documents.

Statements made in this news release, other than those concerning historical information,

should be considered forward-looking and subject to various risks and uncertainties. Such

forward-looking statements are based on management's beliefs and assumptions regarding

information currently available, and are made pursuant to the "safe harbor" provisions of

Section 27A of the Securities Act of 1993, as amended, and section 21E of the Securities

Exchange Act of 1934, as amended. Best Buy's actual results could differ materially from

those expressed in the forward looking-statements. Factors that could cause results to vary

include, among others, those expressed in Best Buy's filing with the U.S. Securities and

Exchange Commission. Best Buy has no obligation to publicly update or revise any of the

forward-looking statements that may be in this news release.

About Future Shop

Future Shop is Canada's largest, fastest-growing national retailer and e-tailer of consumer

electronic products for the digital age, with 91 stores and the nation's premier Internet-

based electronics superstore, at Future Shop.ca. Future Shop and its 7,300 associates are

committed to providing Canadians with expert service; the latest digital products such as

DVD movies and wireless Internet devices; and a wide selection of televisions, computers,

music and appliances. For more information about Future Shop, visit the company's Web

site at www.FutureShop.com.

Article 8Best Buy To Extend Offer For Future Shop Common Stock

MINNEAPOLIS & BURNABY, British Columbia, Sep 28, 2001 (BUSINESS WIRE) -- Best Buy Co., Inc. (NYSE:BBY) and Future Shop Ltd. (TSE:FSS) today announced that Best Buy will extend its takeover bid for all common shares of Burnaby, B.C.-based Future Shop because the transaction has not yet been cleared by Canadian regulators. Following the extension, the takeover bid will expire at 5 p.m., Vancouver time, on Oct. 31, 2001, unless it is extended further in accordance with the terms of the takeover bid. The takeover was originally scheduled to expire on Oct. 4, 2001.

"The Competition Bureau has indicated to us that they expect the review process will be completed within their normal timetable, which would be in early November. However, based on discussions with the Bureau, we are reasonably optimistic that the review process will be completed by the end of October," said Brad Anderson, Vice Chairman, President and Chief Operating Officer of Best Buy.

The takeover bid circular, the directors' circular and certain related documents are available at the Canadian Securities Administrator's Web site at www.sedar.com and may be obtained from the Dealer Manager or the Information Agent for the takeover bid, as set forth in the documents.

This press release is neither an offer to purchase nor a solicitation of an offer to sell shares of Future Shop. Future Shop's shareholders are advised to read the takeover bid circular and the directors' circular regarding the takeover bid referred to in this news release. The takeover bid circular (including an offer to purchase and related documents) and the directors' circular contain important information, including the terms and conditions of the takeover bid, which should be read carefully before any decision is made with respect to the takeover bid. The takeover bid is subject to certain conditions described in the takeover bid circular, such as receipt of requisite regulatory clearances and there being tendered at least 66-2/3 percent of Future Shop's outstanding shares on a fully diluted basis.

Statements made in this news release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding information currently available, and are made pursuant to the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Best Buy's actual results could differ materially from those expressed in the forward-looking statements. Factors that could cause results to vary include, among others, those expressed in Best Buy's filings with the U.S. Securities and Exchange Commission. Best Buy has no obligation to publicly update or revise any of the forward-looking statements that may be in this news release.

Article 9Best Buy Second-Quarter Earnings Increase 10% to $85 Million, or $0.39 Per Share

MINNEAPOLIS--(BUSINESS WIRE)--Sept. 18, 2001--Best Buy Co., Inc. (NYSE:BBY):

--------------------------------- -----------------------------------Total Company Second Quarter performance summary ----------------------------------- ($ in millions, except per This Last Last year share amounts) year year pro forma(1) --------------------------------- -----------------------------------Total company sales $4,164 $3,169 $3,569 Total store sales % change 31% 18% N/A Comparable store sales change(2) 2.8% 5.1% N/A Gross profit margin as % of sales 22.8% 20.5% 22.5% SG&A expenses as % of sales 19.2% 16.8% 19.2% Earnings per diluted share $0.39 $0.36 $0.33 EPS impact of Musicland ($0.05) N/A ($0.03) ----------------------------------------------------------------------

(1) Pro forma information reflects combined results of operations of Best Buy and Musicland, as though Musicland had been acquired at the beginning of the 2001 fiscal year, including amortization of goodwill.

(2) Includes only sales at Best Buy stores open at least 14 months.

Best Buy Co., Inc. (NYSE:BBY) today reported net earnings of $85 million, or $0.39 per diluted share, for the second quarter ended Sept. 1, 2001, up 10 percent compared with $77 million, or $0.36 per diluted share, in the second quarter of last year.

"We saw continued gains in sales of higher-margin products, such as digital products," said Best Buy Founder, Chairman & CEO Richard M. Schulze. "The combination of stronger-than-expected consumer interest, a more profitable sales mix and tight controls on spending drove our earnings well above expectations. Both Best Buy and Musicland produced bottom-line results that were ahead of plan. I'm pleased with our ability to deliver these results in such challenging economic times. However, our enthusiasm over our second-quarter results is tempered by the tragic events of last week. "

Total sales for the second quarter increased 31 percent to $4.2 billion from $3.2 billion a year ago. The sales increase reflected the addition of 66 Best Buy stores in the past 12 months, which brought the total to 439 stores, as well as the inclusion of sales from approximately 1,300 Musicland Group stores. Comparable store sales rose 2.8 percent amid strength in sales of entertainment software and digital products. "We benefited from consumer preference for our store format and our products," Schulze added. "We anticipate that digital products, which reached 15 percent of sales at Best Buy stores in the second quarter, could represent 18 or 19 percent of sales in the fourth quarter."

Gross profit margins for the Company were 22.8 percent of sales in the quarter, up 2.3 percent of sales compared with last year's second quarter. Sales in the entertainment software and consumer electronics product categories increased faster than sales in the home office category, which is principally made up of lower-margin personal computers. The inclusion of Musicland results in the current year increased the Company's total gross profit margin by 1.4 percent of sales in the quarter.

The SG&A expense rate was 19.2 percent of sales for the quarter versus 16.8 percent of sales in the second quarter of fiscal 2001. The inclusion of Musicland's higher expense structure accounted for nearly the entire increase, adding 2.0 percent of sales to the SG&A rate in the quarter. In addition, the costs associated with operating more new stores increased the expense rate, although that was partially offset by productivity gains throughout the business. On a pro forma basis the SG&A expense rate was essentially flat compared to the prior year's second quarter. Total operating income was 3.6 percent of sales for the quarter, equal to last year's second-quarter rate, as operating gains at Best Buy stores were offset by lower operating margins at Musicland.

Net interest expense was $10 million in the second quarter compared with net interest income of $9 million for the same period last year. The increase in costs was due to financing costs associated with the acquisitions of Musicland and Magnolia Hi-Fi, including an expense of $8.4 million (approximately 2 cents per share) related to the premium on $153 million of debt retired in August. In addition, the Company experienced lower yields on its investment portfolio.

----------------------------------------------------------------------Total Company Six Months performance summary -------------------------------- ($ in millions, except per This Last Last year share amounts) year year pro forma(1) ------------------------------------- --------------------------------Total company sales $7,861 $6,133 $6,943 Total store sales % change 28% 21% N/A Comparable store sales change(2) (0.1%) 7.2% N/A Gross profit margin as % of sales 22.8% 20.5% 22.5% SG&A expenses as % of sales 19.8% 16.8% 19.2% Earnings per diluted share $0.65 $0.70 $0.64 EPS impact of Musicland ($0.11) N/A ($0.06) ----------------------------------------------------------------------

For the first six months, the Company's total sales rose 28 percent to $7.9 billion, driven by the additional Best Buy stores and the inclusion of Musicland's results. Comparable store sales were even with the prior year's period, as strength in consumer electronics and entertainment software offset soft sales of desktop computers. Gross profit margins in the first six months rose by 2.3 percent of sales due to favorable changes in product mix as well as improved inventory control at Best Buy stores, and inclusion of Musicland results, which added 1.4 percent of sales. SG&A expenses rose by 3.0 percent of sales. Musicland's higher expense structure accounted for the majority of the increase, while the balance came from investments in new stores and infrastructure at Best Buy. Total Company operating income,

impacted by Musicland's lower operating margin, declined to 3.0 percent of sales. Year-to-date earnings per share totaled $0.65, which includes $0.11 cents per share of dilution from Musicland. The prior year's earnings per share in the first half were $0.70.

Darren Jackson, Senior Vice President - Finance and CFO, said, "It is premature to speculate on how consumers and the flow of product might be affected by the events of last week. We will monitor the situation closely and gauge our business carefully. Currently, we would expect comparable store sales to be flat to a positive 2 percent for the third quarter. We also would anticipate earnings per share in the range of 34 cents to 36 cents in the third quarter."

---------------------------------------------------------------------- Second Quarter ($ in millions) Six Months---------------------------------------------------------------------- This Last Best Buy performance This Last year year summary(1) year year---------------------------------------------------------------------- $3,768 $3,169 Sales $7,080 $6,133 Comparable store sales 2.8% 5.1% % change(2) (0.1%) 7.2% Gross profit margin as 21.4% 20.5% % of sales 21.4% 20.5% SG&A expenses as 17.2% 16.8% % of sales 17.7% 16.8% $157 $115 Operating income $258 $224 Operating income as 4.2% 3.6% % of sales 3.6% 3.7%----------------------------------------------------------------------

(1) Includes aggregation of results at all of the Company's businesses other than Musicland.


Total Best Buy store sales grew 19 percent to $3.8 billion on account of new store growth and a 2.8-percent comparable store sales gain in the quarter. The comparable store gains were broadbased, as sales increased in virtually every region of the country. During the second quarter, Best Buy opened nine new stores. The Company expects to open approximately 45 additional Best Buy stores during the current fiscal year.

Gross profit margins at Best Buy stores improved by 0.9 percent of sales, reflecting a higher-margin product mix and strong inventory management. SG&A expenses rose by 0.4 percent of sales, due to depreciation of investments in infrastructure and the cost of operating additional new stores, offset by productivity gains. Operating income at Best Buy stores increased 37 percent to $157 million, or to 4.2 percent of sales. Average Best Buy store inventories decreased 4 percent compared with a year ago due to continued tight controls over purchases.

----------------------------------------------------------------------

Second Quarter ($ in millions) Six Months---------------------------------------------------------------------- This Last year This Last year year pro forma Musicland performance year pro forma summary(1) ---------------------------------------------------------------------- $396 $400 Sales $781 $810 Comparable store sales (0.4%) (1.1%) % change (3.3%) 2.2% Gross profit margin as 35.9% 38.6% % of sales 35.9% 37.7% SG&A expenses as 38.1% 38.2% % of sales 38.4% 37.5% ($9) $2 Operating income (loss) ($20) $2 Operating income (loss) as (2.3%) 0.4% % of sales (2.6%) 0.2%----------------------------------------------------------------------

(1) Pro forma results of operations of Musicland are presented as though it had been acquired at the beginning of the 2001 fiscal year and include amortization of goodwill.

Musicland comparable store sales in the second quarter were essentially flat as double-digit gains in sales of entertainment software, including DVD movies and video gaming, were offset by continued softness in sales of prerecorded music. Musicland's store count was unchanged. Gross profit margins declined by 2.7 percent of sales, as expected, as a result of a less favorable product mix, including reduced sales of higher-margin prerecorded music and higher sales of lower-margin DVD movies. SG&A expenses declined slightly, reflecting stringent cost control. Musicland's financial results, which are seasonally slower in the first half of the year, produced an operating loss of $9 million. The segment's results were slightly better than management's expectations due to cost controls, synergies from the acquisition and lower-than-expected remerchandising costs. Musicland's results also included approximately $4 million in goodwill amortization for the quarter.


Statements made in this news release, other than those concerning historical financial information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding information currently available, and are made pursuant to the "safe harbor" provisions of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. The Company's actual results could differ materially from those expressed in the forward-looking statements. Factors that could

cause results to vary include, among others, those expressed in the Company's filings with the Securities and Exchange Commission. The Company has no obligation to publicly update or revise any of the forward-looking statements that may be in this news release.

About Best Buy Co., Inc.

Minneapolis-based Best Buy Co., Inc. (NYSE:BBY) is the nation's No. 1 specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Company operates retail stores and commercial web sites under the names: Best Buy (BestBuy.com), Magnolia Hi-Fi (MagnoliaHiFi.com), Media Play (MediaPlay.com), On Cue (OnCue.com), Sam Goody (SamGoody.com), and Suncoast (Suncoast.com). The Company reaches consumers through more than 1,700 retail stores nationwide, in Puerto Rico and in the U.S. Virgin Islands.

BEST BUY CO., INC. CONSOLIDATED STATEMENTS OF EARNINGS

($ in millions, except per share amounts)

(Unaudited)

SECOND QUARTER SIX MONTHS Last Last This Last year pro This Last year pro year year forma(1) year year forma(1) ------------------------ ----------------------

Revenues $ 4,164 $ 3,169 $ 3,569 $7,861 $6,133 $6,943

Cost of goods sold 3,216 2,521 2,766 6,067 4,879 5,384 ------- ------- -------- ------ ------ --------

Gross profit 948 648 803 1,794 1,254 1,559

Selling, general & administrative expenses 800 533 685 1,556 1,030 1,333 ------- ------- -------- ------ ------ --------

Operating income 148 115 118 238 224 226

Net interest income (expense) (10) 9 (2) (9) 17 (4) ------- ------- -------- ------ ------ --------

Earnings before income tax expense 138 124 116 229 241 222

Income tax expense 53 47 46 89 92 87 ------- ------- -------- ------ ------ --------

Net earnings $ 85 $ 77 $ 70 $ 140 $ 149 $ 135 ======= ======= ======== ====== ====== ========

Net earnings per share Basic $ 0.40 $ 0.37 $ 0.34 $ 0.67 $ 0.72 $ 0.66 Diluted $ 0.39 $ 0.36 $ 0.33 $ 0.65 $ 0.70 $ 0.64

Weighted number of shares (in millions) Basic 210.5 207.1 207.1 209.7 205.6 205.6 Diluted 215.2 213.5 213.5 214.3 212.5 212.5

(1) The pro forma column presents the combined results of operations of Best Buy and Musicland for the quarter and six-month periods last year, as though the acquisition of Musicland had been completed as of the beginning of fiscal 2001 and includes the amortization of goodwill. -0- *T

BEST BUY CO., INC. CONSOLIDATED CONDENSED BALANCE SHEETS

($ in millions)

(Unaudited)

Sept. 1, Aug. 26, 2001 2000 -------------- --------------ASSETS Current assets Cash & cash equivalents $ 961 $ 845 Receivables 236 201 Recoverable costs from developed properties 98 116 Merchandise inventories 2,092 1,457 Other current assets 116 57 -------------- -------------- Total current assets 3,503 2,676

Net property & equipment 1,558 889

Goodwill, net 376 - Other assets 84 79 -------------- --------------

TOTAL ASSETS $ 5,521 $ 3,644 ============== ==============

LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 2,058 $ 1,479 Accrued compensation & related expenses 142 114 Accrued liabilities 647 324 -------------- -------------- Total current liabilities 2,847 1,917 Long-term liabilities 273 141

Long-term debt 362 22

Shareholders' equity 2,039 1,564 -------------- --------------

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 5,521 $ 3,644 ============== ==============

Article 10Best Buy to Sell $300 Million in Convertible Debentures; Bonds Convert At $86.87 Per Share

MINNEAPOLIS--(BUSINESS WIRE)--June 22, 2001--Best Buy Co., Inc. (NYSE:BBY) today announced that it will sell, pursuant to a private offering, approximately $300 million in convertible debentures. The initial purchasers of the securities will have a 13-day option to purchase up to an additional $45 million in debentures to cover over-allotments.

The debentures mature in 20 years and would not be callable until June 2004. In addition, the purchasers would be able to require the Company to repurchase the debt on certain occasions. The debentures would be convertible into shares of Best Buy common stock at a conversion price of $86.87 per share (a 37-percent premium over the June 21 closing price of $63.41 on the New York Stock Exchange) if the closing price of the Company's common stock exceeds $104.24 for a specified period of time, or otherwise upon the occurrence of certain events.

The debentures have a total yield to maturity of 2.75 percent, with an initial accretion rate of 1.75 percent. The debentures would have an accreted value at maturity of at least $1,000 per debenture (and more if there were to be an increase in the accretion rate). The debentures also would pay semiannual cash interest at the rate of 1.00 percent per annum on the original issue price.

The Company said that the proceeds from the offering are expected to be used for general corporate purposes.

"The proceeds replenish the liquidity that was used to purchase Musicland and Magnolia Hi-Fi as well as to refinance higher-interest rate bonds that were retired in March and May of this year," said Darren R. Jackson, Senior Vice President - Finance, Treasurer and Chief Financial Officer of Best Buy. "The financing vehicle we've chosen takes advantage of favorable market conditions. We expect this financing to be accretive to earnings and to increase our Economic Value Added, or EVA. It also adds to our strong financial position, which gives us more flexibility in uncertain economic times."

This press release does not constitute an offer to sell nor an offer to buy securities. The offering is being made only to qualified institutional buyers. The securities being offered and the shares of common stock issuable upon conversion of the convertible securities have not been registered under the U.S. or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.


Article 11Best Buy Reports Better-Than-Expected First-Quarter Earnings of $55 Million; Gross Profit Margins Continue to Improve

MINNEAPOLIS--(BUSINESS WIRE)--June 19, 2001--

----------------------------------------------------------------------Snapshot ($ in millions, except per share amounts) Actual Pro Forma(a) -----------------------------------Quarter Ended: 6/2/01 5/27/00 5/27/00 -----------------------------------Total Company Sales $3,697 $2,964 $3,374Total Store Sales % Change 25% 24% N/AComparable Store Sales Change(b) -3.1% 9.5% N/AGross Profit Margin as % of Sales 22.9% 20.4% 22.4%SG&A Expenses as % of Sales 20.4% 16.8% 19.2%Earnings Per Share $0.26 $0.34 $0.31EPS Impact of Musicland -$0.06 N/A -$0.03----------------------------------------------------------------------

(a) Unaudited pro forma combined results of operations of Best Buy andMusicland, as though Musicland had been acquired at the beginning ofthe fiscal year.

(b) Includes only sales at Best Buy stores open at least 14 months.

Best Buy Co., Inc. (NYSE:BBY) today reported first-quarter net earnings of $55 million, or $0.26 per diluted share, compared with $72 million, or $0.34 per diluted share, in the first quarter of fiscal 2001.

"We had expected earnings to decline in a decelerating economy," said Best Buy Founder, Chairman & CEO Richard M. Schulze. "Overall, our earnings exceeded Wall Street's expectations. Both Best Buy and Musicland produced bottom-line results that were ahead of plan. I remain confident that we are on track to deliver earnings growth of 16 to 18 percent this year."

The Company attributed the earnings decline to modest comparable store sales declines, which were partially offset by improved gross profit margins. The inclusion of Musicland's financial results, which are seasonally slower in the first half of the year, reduced earnings by approximately 6 cents per share, slightly better than management's expectations.

---------------------------------------------------------------------- Best Buy Stores(1) ($ in millions) Musicland Stores----------------------------------------------------------------------

6/2/01 5/27/00 Segment Performance Summary 6/2/01 5/27/00 (unaudited) PF(3)----------------------------------------------------------------------$3,312 $2,964 Sales $385 $410 -3.1%(2) 9.5%(2) Comparable Store Sales % Change -6.1% 5.9% 21.4% 20.4% Gross Profit Margin as % of Sales 35.9% 36.7% 18.3% 16.8% SG&A Expense as % of Sales 38.7% 36.7%

$101 $109 Operating Income (Loss) -$11 $0 3.0% 3.7% Operating Income as % of Sales -2.9% 0.0%----------------------------------------------------------------------

(1) Includes aggregation of results at all of the Company's businessesother than Musicland.


(3) Pro forma results of operations of Musicland, as though it hadbeen acquired at the beginning of the fiscal year.

Total sales for the first quarter increased 25 percent to $3.697 billion from $2.964 billion a year ago. The sales increase reflected the addition of 69 Best Buy stores in the past 12 months, which brought the total to 430 stores, as well as the inclusion of sales from approximately 1,300 Musicland stores. Comparable store sales declined 3.1 percent at Best Buy stores, as anticipated, as the strength of video and digital products muted significant softness in sales of personal computers, prerecorded music and appliances. Digital TVs, digital camcorders, DVD movies, video games and wireless communications devices experienced the largest comparable store sales gains in the quarter. Musicland comparable store sales declined 6.1 percent due to softness in sales of prerecorded music, which was partially offset by significant gains in DVD software. At both businesses, comparable store sales strengthened during the last month of the quarter.

"I am encouraged by our strengthening sales trend at the end of the quarter," Schulze added. "We are well positioned to take advantage of the expansion of the digital product cycle and gaming trends, particularly as the economy improves."

Gross profit margins for the Company were 22.9 percent of sales in the quarter, up 2.5 percent of sales compared with last year's first quarter. Gross profit margins at Best Buy stores improved a full percentage point, reflecting a higher-margin product mix and continued improvement in inventory management. Sales in the higher-margin consumer electronics and entertainment software product categories increased faster than sales in the home office category, which is principally made up of lower-margin personal computers. The inclusion of Musicland results in the current year increased the Company's total gross profit margin by 1.5 percent of sales in the quarter. On a year-over-year basis, Musicland's gross profit margins were down slightly because of higher sales of lower-margin DVD movies.

Selling, general and administrative expenses (SG&A) rose to 20.4 percent of sales for the quarter versus 16.8 percent of sales in the first quarter of fiscal 2001. The inclusion of Musicland's higher expense base structure added 2.1 percent of sales to the SG&A rate in the quarter. The loss of leverage on fixed costs for the Company as a whole in the slower sales growth environment also increased the SG&A rate as compared with last year. In addition, the costs associated with operating BestBuy.com (which was in development a year ago) and 69 new stores increased the expense rate, although that was partially offset by productivity gains throughout the business.

Total operating income was 2.4 percent of sales for the quarter, compared with 3.7 percent in the first quarter last year, reflecting the impact of comparable store sales declines on expense leverage. Operating income from Best Buy stores was 3.0 percent of sales. Musicland's operating loss of $11 million included approximately $4 million in goodwill amortization for the quarter.

Net interest income was $1 million in the first quarter compared with $8 million for the same period last year, reflecting a reduction in cash balances after the Company's acquisition of Musicland and Magnolia Hi-Fi in the fourth quarter of last year and lower interest rates.

During the first quarter, Best Buy opened 11 new stores, and Musicland closed a net of five stores. The Company remains on track to open approximately 60 Best Buy stores, approximately 30 On Cue stores and two Magnolia Hi-Fi stores in the current fiscal year.

Average Best Buy store inventories were unchanged compared with the prior year's quarter due to continued tight controls over purchases. Best Buy's 12-month turns for the quarter ended June 2 were 7.4 times, up from 7.3 times the prior year, due to improved inventory management.

Schulze said, "We expect comparable store sales to be essentially flat during the second quarter, as growth in other product areas is muted by continued weakness in sales of desktop computers, resulting in earnings per share in the range of 29 cents to 31 cents. We expect modest comparable store sales improvement in the second half of the fiscal year, along with continued improvement in our product mix and on-plan performance from Musicland. Given those assumptions and no significant decline in the overall economy, we continue to anticipate earnings per share of $2.16 to $2.21 for the fiscal year."



About Best Buy Co., Inc.

Minneapolis-based Best Buy Co., Inc. (NYSE:BBY) is the nation's No. 1 specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Company operates retail stores and commercial web sites under the names: Best Buy (BestBuy.com), Magnolia Hi-Fi (MagnoliaHiFi.com), Media Play (MediaPlay.com), On Cue (OnCue.com), Sam Goody (SamGoody.com), and Suncoast (Suncoast.com). The Company reaches consumers through more than 1,700 retail stores nationwide, in Puerto Rico and in the U.S. Virgin Islands.

BEST BUY CO., INC. CONSOLIDATED STATEMENTS OF EARNINGS

($ in millions, except per share amounts) (Unaudited)

THREE MONTHS ENDED

Pro Forma(a) June 2, May 27, May 27, 2001 2000 2000 ------- ------- -------

Revenues $ 3,697 $ 2,964 $ 3,374

Cost of goods sold 2,851 2,358 2,618 ------- ------- -------

Gross profit 846 606 756 Gross profit percent 22.9% 20.4% 22.4%

Selling, general & administrative expenses 756 497 648 SG&A percent 20.4% 16.8% 19.2% ------- ------- -------

Operating income 90 109 108

Net interest income (expense) 1 8 (2) ------- ------- -------

Earnings before income tax expense 91 117 106

Income tax expense 36 45 41 Effective tax rate 39.1% 38.3% 39.1% ------- ------- -------

Net earnings $ 55 $ 72 $ 65 ======= ======= =======

Net earnings per share Basic $ 0.26 $ 0.35 $ 0.32 Diluted $ 0.26 $ 0.34 $ 0.31

Weighted number of shares (millions) Basic 208.8 204.0 204.0 Diluted 213.4 211.5 211.5

(a) The pro forma column presents the combined results of operationsof Best Buy and Musicland for the three months ended May 27, 2000, asthough the acquisition of Musicland had been completed as of thebeginning of fiscal 2001 and includes the amortization ofacquisition-related intangibles.

BEST BUY CO., INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited)

June 2, May 27, 2001 2000 ------ ------ASSETS Current assets Cash & cash equivalents $ 466 $ 765 Receivables 193 202 Recoverable costs 100 106 Merchandise inventories 1,981 1,314 Other current assets 111 67 ------ ------ Total current 2,851 2,454 assets

Net property & equipment 1,496 744

Goodwill, net 381 --

Other assets 81 63 ------ ------

TOTAL ASSETS $4,809 $3,261 ====== ======

LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities Accounts payable $1,822 $1,223 Accrued compensation expenses 141 90 Accrued liabilities 553 321 Current portion of long-term debt 19 16 ------ ------ Total current 2,535 1,650 liabilities

Long-term liabilities 170 141

Long-term debt 177 13

Shareholders' equity 1,927 1,457 ------ ------

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $4,809 $3,261 ====== ======

article 1.doc

Business

total company sales

best buy stores

inclusion of sales

international total

total sales of burnaby

comparable store sales

best buys

canadian dollar sales