8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 14, 2008

BEST BUY CO., INC.

(Exact name of registrant as specified in its charter)

Minnesota	1-9595	41-0907483
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
7601 Penn Avenue South
Richfield, Minnesota		55423
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (612) 291-1000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01   Regulation FD Disclosure

On October 14, 2008, The Carphone Warehouse Group PLC (“CPW”) released its trading statement for its fiscal second quarter ended September 27, 2008.  In the news release, CPW reported the fiscal second quarter highlights and strategic and financial goals for Best Buy Europe, a venture between Best Buy Co., Inc. (“Best Buy” or the “registrant”) and CPW, which is owned 50% by the registrant.The news release issued by CPW on October 14, 2008, is furnished as Exhibit No. 99.1 to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability of that Section, unless the registrant specifically incorporates it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.

In addition, on October 14, 2008, representatives of the registrant and CPW are holding an investor presentation to be webcast to discuss the registrant’s strategic update for its International segment, including Best Buy Europe. The registrant is furnishing, as Exhibit 99.2 to this Current Report on Form 8-K, the slide presentation to be used on the October 14, 2008 webcast, and which the registrant may use from time to time in presentations related to its International segment and Best Buy Europe. The slide presentation is furnished pursuant to Item 7.01 of this Current Report on Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless the registrant specifically incorporates it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. By filing this Current Report on Form 8-K and furnishing the slide presentation, the registrant makes no admission as to the materiality of the information included in the slide presentation. The registrant undertakes no duty or obligation to publicly update or revise the information included in the slide presentation, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the U.S. Securities and Exchange Commission (the “SEC”), through press releases or through other public disclosure. The registrant intends to post the slide presentation in the “For Our Investors” section of its Web site located at www.BestBuy.com, though it reserves the right to discontinue such posting at any time.

Some of the matters discussed in this Current Report on Form 8-K (including Exhibits 99.1 and 99.2) constitute forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements other than those made solely with respect to historical fact and are based on the intent, belief or current expectations of the registrant and its management.  The registrant’s business and operations are subject to a variety of risks and uncertainties that might cause actual results to differ materially from those projected by any forward-looking statements. Factors that could cause such differences include, but are not limited to, those factors set forth in the slide presentation attached hereto as Exhibit 99.2 and the risk factors set forth in the registrant’s filings with the SEC.

ITEM 9.01     Exhibits

(d) The following exhibits are furnished as exhibits to this report.

Number	Description
99.1	News release issued by The Carphone Warehouse Group PLC dated October 14, 2008
99.2	Slide presentation used for joint webcast of Best Buy Co., Inc. and The Carphone Warehouse Group PLC dated October 14, 2008

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		BEST BUY CO., INC.
		(Registrant)
Date: October 14, 2008	By:	/s/ JAMES L. MUEHLBAUER
		James L. Muehlbauer
		Executive Vice President – Finance and Chief
		Financial Officer

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EX-99.1

Exhibit 99.1

Tuesday 14 October 2008

For immediate release

The Carphone Warehouse Group PLC

Trading update and strategic update on Best Buy Europe

Good performance in Q2; longer term prospects attractive

Carphone Warehouse today announces its second quarter trading update for the 13 weeks to 27 September 2008.

Second quarter highlights

·Total connections up 9% to 3.1m

·Subscription connections up 21% to 1.3m, with significant market share gains

·Best Buy Mobile continues to perform very strongly

·41,000 broadband net adds before the sale of 6,000 AOL cable customers; base now 2.8m

·106,000 broadband customers unbundled, taking the on-net base to 2.0m

·Strong financial position; remaining cautious on immediate economic outlook

Best Buy Europe strategic and financial goals

·Best Buy Europe is the new name for the venture that incorporates all of Carphone Warehouse’s existing retail operations, its profit share from Best Buy Mobile and its consumer electronics operations in Europe due to launch in 2009

·Best Buy Europe to double revenues and EBIT* by March 2013

·Introduction of large format Best Buy stores in the UK in 2009

·Continued evolution of Carphone Warehouse format

·Current year start-up costs of up to £20m

·Next financial year start-up costs of up to £30m and capex of £40m

·Mid-teens % post-tax ROIC on big box roll-out

* Based on Carphone Warehouse’s Distribution division financial performance in the year to March 2008, under IFRS, before any purchase accounting applied by Best Buy

Charles Dunstone, Chief Executive Officer, said:

“Trading in the second quarter was good, as we continued to invest in margin to drive strong volume growth, and we made significant market share gains as a result.  Subscription growth has been excellent, and the decline in the rate of pre-pay growth is to be expected given the wider consumer environment.  The telecoms business continues to perform well, with a strong focus on operational improvements and customer service enhancements.  We expect headline EPS for the first half to be 4.0p-4.2p, reflecting a weighting of Distribution profits towards the second quarter and the phasing of telecoms marketing costs.

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“Our plans for the Distribution venture, now named Best Buy Europe, are making very good progress, and we are confident of building a significant and profitable big box consumer electronics business in Europe over the coming years.  We believe that investing in our business, people and proposition now is money well spent: consumer electronics retailing should be a vibrant, interactive and service-led experience for customers and our goal is to deliver exactly this.

“The immediate consumer outlook remains very uncertain.  However, in the retail business, we have secured our best ever Christmas line-up and will work hard to increase our share of customer spending.  In telecoms, we are well positioned as a value player with a highly efficient network, providing good visibility of cash flows in the coming years.  Our robust balance sheet and the quality of our assets leave us well placed to ride out the downturn and emerge in an even stronger position on the other side.”

Distribution (Best Buy Europe)

Total connections were up 9% to 3.1m year-on-year.  Growth was driven by subscription connections, which were up 21% to 1.3m.  In particular, we continued to see strong year-on-year growth in mobile broadband sales, supported by the roll-out of our laptop proposition into most of our stores across Europe.  In the UK, the iPhone 3G also boosted sales and appeared to be predominantly incremental business, delivering us material market share gains.  Subscription margins were lower, as in the first quarter, as a result of the increase in mobile broadband connections within the mix, and our own trading strategy that has been focused on delivering volume and growing our market share.

Pre-pay connections were up 2% to 1.7m.  After a prolonged period of strong growth, the pre-pay market now appears to be coming under pressure from a weaker consumer backdrop.  However, we have a very strong Christmas offering and we believe that growing interest in music and other applications can provide support to this part of the market.

We opened 16 net new stores in the period, taking the total portfolio to 2,430.  With our plans for Best Buy Europe announced today, we are pursuing a more measured approach to opening small stores in the existing format, and will concentrate our resources on trialling a new format offering a wider array of connectivity services, as well as launching big box consumer electronics stores.

Best Buy Mobile in the US has continued to trade very strongly.  We are now present in all of Best Buy’s stores, and our new format standalone stores are also delivering promising results.  We have recently extended the model into Canada with both standalone store and store-within-a-store formats.  During the quarter, Best Buy Mobile became the only independent channel in the US to sell the iPhone.

UK Fixed Line

Broadband net adds during the quarter were 41,000, with the overall base increasing by 35,000 as we sold a base of 6,000 AOL-branded cable customers to Virgin Media. Market growth has continued its slowing trend and we have been focusing on retention and improving our proposition rather than aggressive customer recruitment.  The TalkTalk base grew by 82,000, continuing its good momentum and reflecting its position at the value end of the market.  Churn at TalkTalk continues to fall, enhancing the overall value of our customer base.  The AOL base fell by 47,000 as we reined in marketing under the AOL brand and lost some customers in the network migration process.

We unbundled a net 106,000 customers, taking our total unbundled base to over 2 million.  73% of our broadband customers are now on our own network.  We continue to make good progress with our network unification project, connecting gigabit fibreoptic cable backhaul to our busier exchanges to cap our usage-related costs.

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Our base of non-broadband customers fell by 137,000 to 1.3m, with the rate of decline slowing compared to the previous few quarters.

Best Buy Europe growth strategy

Today we are announcing our initial plans for the launch of big box consumer electronics stores, branded Best Buy, in Europe.  In addition, we are sharing our long term financial goals for the entire Best Buy Europe venture (incorporating the existing Carphone Warehouse and Phone House chains, the new Best Buy stores, alternative channels and the profit share from Best Buy Mobile) and giving short term guidance on start-up costs and capex for the new format.

We believe that Europe is a highly attractive market for consumer electronics retailing.  Market growth is forecast to be strong, but the customer experience is often poor and we intend to introduce a differentiated proposition with a strong emphasis on service.  In addition, we will focus primarily on larger stores of 30,000 square feet or more, where the overall economics are typically more attractive than for smaller stores.  Our first stores will open in the UK next year, supported by an integrated multi-channel offering allowing customers to interact with us however they choose.

Our goal is to double revenues and operating profit for Best Buy Europe between the March 2008 year and the March 2013 year, assuming reasonable economic conditions.  We expect the roll-out of the Best Buy-branded stores and alternate channels to generate a post-tax ROIC % in the mid-teens.  In the short term, we expect start-up costs of up to £20m in the current financial year and up to £30m in the year to March 2010, with capex in that year of up to £40m, incorporating new stores, IT and supply chain costs, and our multi-channel strategy.  The exact costs and capex will depend to a significant extent on the timing and rate of new store openings.  The costs and capex will be funded out of the venture’s existing facilities.

Conference call and presentation

There will be a conference call to discuss the trading update at 2pm UK time (8am Chicago time).  The dial-in number is +44 203 037 9107 for UK and international callers, or 1 866 966 5335 for US callers.  The call will also be webcast at www.cpwplc.com.

The presentation to investors and analysts on our European strategy will be audio webcast from 3.30pm UK time (9.30 am Chicago time) at www.cpwplc.com.  For the Q&A segment at approximately 5.45pm UK time (11.45am Chicago time) there will be a conference call, with the same numbers as above.

Next trading update

The group will publish its interim results on 18 November 2008.  Slides will be available on the website, cpwplc.com, and there will be a conference call but no meeting.

For Further Information

For analyst and institutional enquiries
Roger Taylor	07715 170 090
Peregrine Riviere	07909 907 193
For media enquiries
Shane Conway	07932 199 659
Anthony Carlisle(Citigate Dewe Rogerson)	07973 611 888
	020 7638 9571

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Operating Statistics

·Connections and store numbers

	13 weeks to 27 September 2008
Connections (000s)	2008	2007	% change
Subscription	1,275	1,054	21	%
Pre-pay	1,664	1,630	2	%
SIM-free	166	154	8	%
Group	3,105	2,839	9	%

	26 weeks to 27 September 2008
Connections (000s)	2008	2007	% change
Subscription	2,347	2,038	15	%
Pre-pay	3,092	2,861	8	%
SIM-free	305	288	6	%
Group	5,744	5,187	11	%
Own stores	2,209	2,141	3	%
Franchises	221	196	13	%
Total stores	2,430	2,337	4	%

·Customer bases

	As at 27 September 2008
(000s)	2008	2007
Insurance	2,353	2,352
TPHT base	1,869	1,632
UK MVNO base	511	519
Broadband base	2,788	2,486
Of which unbundled	2,027	1,377
Other billed customer base	1,325	2,051

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EX-99.2

Exhibit 99.2

Best Buy International Strategic Update October 14, 2008 Chicago, IL

2 Safe Harbor Forward-Looking and Cautionary Statements: This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the U.S. Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect management’s current views and estimates regarding future market conditions, company performance and financial results, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,” “plan,” “outlook,” and other words and terms of similar meaning. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: general economic conditions, acquisitions and development of new businesses, divestitures, product availability, sales volumes, pricing actions and promotional activities of competitors, profit margins, weather, changes in law or regulations, foreign currency fluctuation, availability of suitable real estate locations, our ability to react to a disaster recovery situation, and the impact of labor markets and new product introductions on overall profitability. A further list and description of risks, uncertainties and other matters can be found in Best Buy’s annual report and other reports filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, Best Buy’s Annual Report on Form 10-K filed with the SEC on 30 April 2008. Management cautions that the foregoing list of important factors is not complete and assumes no obligation to update any forward-looking statement that it may make.

3 Today’s Agenda Best Buy International Strategic Update Evolution of Carphone’s Retail Model Best Buy Mobile Overview European Marketplace & Opportunity U.K. Launch Strategy & Goals Current U.S. Strategies Q&A Session

4 Robert Willett Chief Executive Officer Best Buy International Enterprise Chief Information Officer Chairman, Best Buy Europe

5 1,036 United States – Best Buy – Magnolia Audio Video – Pacific Sales Kitchen & Bath Centers 185 Canada – Future Shop – Best Buy 162 China – Five Star Appliance – Best Buy China 2,415 Europe – The Carphone Warehouse – The Phone House Multiple Web Sites and Call Centers Source: Numbers are as at the end of Q2 F2008 World’s Largest Consumer Electronics Retailer Founded in 1966 | Based in Minneapolis

6 Sales Growth & Operating Profitability 8.3 10.1 12.5 15.2 17.7 20.9 24.6 27.4 30.8 35.9 40.0 3.5% 4.3% 4.0% 5.1% 4.8% 5.3% 5.3% 5.3% 5.6% 2.0% 5.4% F98 F99 F00 F01 F02 F03 F04 F05 F06 F07 F08 Revenue Operating Profit Rate Source: Company public filings -- in U.S. billions -- CAGR ~17.0 % Historically, we have doubled our size every 5 years

7 The Quest For Value 17% 16% 19% 20% 22% 21% 20% F02 F03 F04 F05 F06 F07 F08 ROIC (Non-GAAP) Source: ROIC obtained via company public filings. We Produce An ROIC Among The Highest In The U.S. Retail Industry

What Are The Strategic Issues Facing Best Buy?

9 What is the next source of top-line growth? What am I famous for in each brand? What do my brands stand for today and tomorrow? Which innovations are important for me to respond to? How do I build relationships with customers across each brand? How can technology help me? How do I run a cost effective operation and avoid complexity? How do I develop a results-driven organization? How do I develop a confident, resilient, organization, retaining and equipping people for change? What Are The Strategic Issues Facing Best Buy? The WHATs The HOWs

10 The Enterprise Growth Imperative Agenda We have to increase our momentum and focus to meet shareholder expectations – this is the context for international $20 $40 $80 F2003 F2008 F2013 Growth Goal: Double in 5 Years -- in U.S. billions --

What Are Our Strategic Responses?

12 Product and Exclusive Brand Format / Channel Geographic Reach US Canada Europe Global Extension Channel Extension Mass Products Private Label: Insignia, Rocketfish Newchannels.com Core Format New formats e.g. Five Star BBYMobile Call Centers Magnolia Future Shop Range Extension China Solutions Services Most Retailers BBY Target Wal-Mart Tesco * * * Services Exclusive Brands Geek Squad We’re Differentiating Through Co-Creation, Services, Solutions Mexico, Turkey

13 The WHAT – Our Growth Agenda Objectives · To be #1 in the market for customer experience. · To achieve the highest market share in the local markets we serve.·  To be the #1 place to work. · To produce the highest level of operating profit in the local market over time. · To be the partner of choice for vendors, government leaders, and communities. · To be the investor’s choice with focus on profitable growth and capital efficiency. · To leverage infrastructure and capability build out across all countries (Best Buy in a box). · To leverage innovation across the enterprise. Learn slowly and carefully. Scale fast

14 The WHAT – The Co-Creation Experience Install Repair Research Contact Store Pickup Home Shipment Home Delivery Order Management Online Sites Call Centers Kiosks Stores Service Commerce Experience Shop Fulfill Schedule Sign Up Learn Customer Subscriptions 1. Mass 2. Targeted 3. Personalized 4. Co-Creation > Interaction > Seamless Multi- Contact Experience > Community & Social Networks Co-Create the Purchase How?

15 United States Fcst Count: 1,400 Canada Fcst Count: 200 - 250 China 5-10 NSOs Fcst Count: 250 - 300 Mexico 1-2 NSOs Fcst Count: 60 - 80 Europe 1-3 NSOs Turkey 1-2 NSOs The HOW - A Balanced “Big Box” Portfolio Over 5 Years Fcst Count: 100 - 200

16 Canada & China Learnings Canada Focus management attention around CORE / OPTIMIZE / TRANSFORM Dual brands strategy. Keeping brands distinct is essential Utilize private label to improve margins and differentiation Shared infrastructure and capabilities Build international leadership team China Focus on harmonization and stabilization. Build brand, culture, values Differentiating through customer-focused operating models versus Gome, etc. Operating model that leverages customer centricity and services A focus on basic retailing can drive significant results. E.g. comps, attachment rates Sourcing to build private label capability and innovation agenda with local manufacturers The build out of systems and infrastructure to create efficiency

17 Market Screening Factors Retail Market Cultural Competitive and Distributive Economic and Socioeconomic Financial Rate of Technology Adoption CE Market Size and Growth Assessing And Analyzing Markets Market screening permits management to identify a small number of desirable markets based on macro and micro environmental factors Political Legal

18 International Leadership Team Charles Dunstone CEO Carphone Warehouse Roger Taylor CFO Carphone Warehouse David Berg COO International John Noble CFO International Neville Roberts CIO International Marise Kumar CCEO International Todd Soller CIO Domestic Shawn Score Pres. BBY Mobile Dan Currie SVP, Supply Chain Jeanine Thompson VP, International HR Tasso Koken SVP, Merchandising Paul Antoniadis CEO – Best Buy Branded Operations, Europe

19 Organizational Structure Best Buy International Carphone Warehouse Best Buy Mobile Best Buy Europe “Big Box” Services Marketing and Public Relations Finance Real Estate Merchandising, Supply Chain, Information Technology Human Resources, Legal, Governance China BBY, Five Star & Geek Squad Mexico BBY, Geek Squad Canada BBY, FS, Geek Turkey BBY & Geek Best Buy Europe Best Buy - Other Countries Geek U.K. & Spain

20 Summary • We believe our strategy of customer centricity has the flexibility to travel well internationally • We are excited about the European growth opportunity in terms of market size and the potential for the returns we’re seeking • We’re learning from those who have gone before us, and from our experiences in other countries • The pace of expansion will be based on our results • We’ve added talent to support our growth, including the Carphone team and other executives with extensive international experience

21 Charles Dunstone CEO, The Carphone Warehouse Group

22 Creating a wireless world Launching Wireless White City and beyond

23 Customers live in a wireless world I can talk and text anywhere I can communicate and enjoy content on any device anywhere Talk, text, IM, email Music, video, games Phones, UMPCs, laptops, gaming consoles etc. Fixed BB with WiFi, mobile BB

24 What if we could do the same to laptops, as we have to mobile phones?

25 Wireless Camp for 7,000+ people

26 41% YOY broadband growth 0 5,000 10,000 15,000 20,000 25,000 Wk01 Wk02 Wk03 Wk04 Wk05 Wk06 Wk07 Wk08 Wk09 Wk10 Wk11 Wk12 Wk13 Wk14 Wk15 Wk16 Wk17 Wk18 Wk19 Wk20 Wk21 Wk22 BEL FRA GER IRE NET POR SPA SWE UK Broadband connections, by fiscal week

27 0 2,000 4,000 6,000 8,000 10,000 W k 0 1 W k 0 2 W k 0 3 W k 0 4 W k 0 5 W k 0 6 W k 0 7 W k 0 8 W k 0 9 W k 1 0 W k 1 1 W k 1 2 W k 1 3 W k 1 4 W k 1 5 W k 1 6 W k 1 7 W k 1 8 W k 1 9 W k 2 0 W k 2 1 W k 2 2 BE FR GER IE NL PT SP SW UK 10% share of U.K. laptop market Units of laptops sold, by fiscal week

28 Webbook Fujitsu- Siemens Toshiba Sacramento 15SP Toshiba New Orleans 15S Toshiba Hampton 10S Acer Aspire 5315 Increasing propensity to trade up Laptop trade-up, % 2 23 Wk 2 Wk 22 By calendar week

29 Improving accessories penetration Accessories attach, % 2 38 Wk 2 Wk 22

30 • Free or competitively priced laptop was top reason to buy at CPW • 68% of broadband and laptop customers said it was "very important" that their mobile phone came with a laptop • 33% of broadband and laptop customers had not actually intended to buy a laptop but did • 64% of people intending to get mobile broadband in next 6 months would be interested in a laptop with it • We believe the campaign had unusually high awareness from word of mouth “Doing to laptops what we did to mobile phones” makes sense to customers

31 Now entering stage 3 of our evolution Internet Anywhere Email Anywhere Music Anywhere TV Anywhere Talk Anywhere Stream 1: Trade Wireless Now Focus for growth in 2008/09; becomes part of BAU Stream 2: The Wireless World Pilot in 2008/09 for roll out in 2009/10 & INSURANCE ADDITIONAL SERVICES AND BUNDLED SOLUTIONS New Products Evolution New Proposition Transformation New Business Revolution

32 Creating a wireless world Launching Wireless White City and Beyond

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34 Extended laptops and peripherals

35 All phones, with hero BlackBerry and smart phone display

36 TV and music

37 Geek Squad, content & solutions

38 Digital TV and broadband

39 Gaming

40 Rolling out “Wireless World” White City + 4 pilot stores Web, Direct, up to 50 Wireless stores Best Wireless components in many stores

41 Jude Buckley Chief Merchant and Marketing Officer, Best Buy Mobile Shawn Score President, Best Buy Mobile

42 of Americans thought there had to be a better way to buy a mobile phone.

43 Joint Venture Lessons Culture and values Brand Big box expertise Traffic Reward Zone Employee Engagement Consumer electronics vendor relationships Geek Squad Operating model Small box expertise Commercial terms After-sales support/repairs Walk Out Working offer Global vendor relationships Training

44 Walk Out Working

45 Unique Handset Selection BlackBerry Storm BlackBerry Bold Apple iPhone Samsung Instinct

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48 DVD Movie Best Buy Mobile Story

49 51% 54% 30.0% 40.0% 50.0% 60.0% Oct FY08 Nov FY08 Dec FY08 Jan FY08 Feb FY08 Mar FY09 Apr FY09 May FY09 Jun FY09 Jul FY09 Source: company internal data Net Promoter Score (NPS)

50 A Tale of Two Experiences Before: • A few New York test stores • Negative comparable store sales in U.S. mobile phones • Market share of 1-2% in the category • No power with vendors Now: • Nearly 1,000 Best Buy Mobile locations • Nearly triple-digit comparable store sales • Market share of ~4%, goal of 10% share • Apple iPhone

51 David Berg Chief Operating Officer Best Buy International Board Member Best Buy Europe China JV Best Buy Children’s Foundation

52 Why Europe? Why A Partner?

53 We wanted to expand to Europe because: – Europe is a huge market; combined GDPs of EU countries is greater than the GDP of the U.S. – Diversification and benefits from purchasing, sourcing, best practices, brand power We want to expand to Europe now because: – Current lack of a consistent, customer-centric CE retail experience presents a compelling opportunity – Existing CE retailers are stagnating as they struggle to keep pace with the consumer’s evolving needs – Desire to contribute new growth into the enterprise – We believe a multi-format / channel approach will be the winning strategy Context Around The Rationale For European Expansion

54 We wanted to go to Europe with a partner because: – Local experience and expertise is critical for success in European retail – Accelerates and de-risks entry and expansion in an important but challenging market The Carphone Warehouse is the best partner because: – Our deep and longstanding relationship; excellent reputation and proven history of success – Complimentary retail capabilities that we believe will enhance and differentiate our combined retail offering – CPW’s natural evolution whereby it is increasing its store sizes and evolving its merchandise mix – Aligned, relentless commitment to customer centricity Context Around The Rationale For European Expansion

55 An Opportunity To Leverage Our Complementary Strengths Relative Competencies Key Competencies and Capabilities Combined Big Box Expertise . . . Small Box Expertise . . . Sourcing . . . Merchandizing Expertise . . . Vendor Relationships . . . Acquisition / Integration Expertise . . . Financial Services . . . Services Capabilities (Geek Squad) . . . Private Label Capabilities . . . B2B Capabilities . . . Flexibility to Change . . . Product / Service Bundling . . . Billing / CRM Platform . . . Insurance Capabilities . . . Subscription Service Sales . . . MVNO Capabilities . . . Online / Direct Capabilities . . . North American Presence . . . European Presence . . . Asian Presence . . . Management Talent . . . Innovative & Growth Oriented . . . Customer Centric . . . Employee Powered . . . People /Culture Operational Capabilities Geography Retail Capabilities

56 Innovative High energy Employee focused Can do Optimistic Customer focused Passionate Organic Best Buy cheer Chalk- talk Passionate, organic Hurricane Katrina Blue shirts Geek Squad Best practice driven Inclusive relationships American dream Work hard, play hard Ready to change the world 6K start-up Bold actions Trust based Non-hierarchical High energy, can do Two Continents, Two Teams, One Culture We believe that the collection of beliefs, expectations, and values learned and shared by our teams from one generation of employees to another, will continue to convey a sense of identity and add to the stability of our organizations as a social system

A Comparison of Europe and U.S.

58 Key considerations for Best Buy Europe will be store size and location, as Europeans drive less and are less accustomed to out of town shopping than US shoppers. Comparison of U.S. and Europe Sources: Euromonitor, Economic Intelligence Unit, CIA World Factbook, Datamonitor, US Census, CBS News Report, IMF Report, U.S. Federal Reserve 1 Median of Germany, France, Italy, and Spain 2 As of March 2008, Defined as Lending Rate to Households for UK and Europe. For US, it is the conventional mortgage rate on commitments for fixed-rate first mortgages provided by the Federal Reserve as of March 2008 United States United Kingdom Europe1 Economic Average Personal Disposable Income ($) 32,951 28,972 25,552 Lending Rate (%)2 5.9 5.3 5.2 Gasoline - Price per Gallon ($) / Increase vs. Year Ago (%) $4.10 / 30.1% $8.74 / 19.4% $8.44 / 27.6% Home Ownership (%) 68.1 70.8 66.4 Demographic Average Household Size 2.7 2.4 2.5 Population Density (people per sq km) 33 251 156 Population Living in Urban Areas (%) 81.4 89.9 76.2 Median Age (Years) 36.7 39.9 41.8 New Car Registrations per 1,000 people 53.5 39.4 36.9 Distance Driven per Year (km) 19,524 12,632 12,080 Consumer Electronics Box Size (sq.ft.) ~20,000 - 40,000 ~10,000 - 20,000 ~10,000 - 30,000 Store Location Out of Town High Street, Out of Town High Street, Out of Town CE Per Capita Spend ($) 619.6 690.6 448.1

59 The Competitive Landscape

60 Competitive Landscape Overview of Key European Competitors European CE Market Position #1 #2 #3 # of Countries 15 15 12 # of Stores 702 1,369 692 LFY Revenue (£mm) £11,711 £8,546 £4,513 5-Year Revenue CAGR (%) 12.3% 7.3% 7.7% LFY EBIT (£mm) £420 £194 £139 LFY EBIT Margin (%) 3.6% 2.3% 3.1% Average Store Size (Sq. Ft.) ~34,000 ~13,000 ~13,000 LFY Sales / Sq. ft. (£) £528 £484 £504 Current Share Price (£) N/A £0.49 £1.12 % of 52 Week High N/A 34% 35% EV / EBITDA N/A 2.4x 2.3x Scale and diversification Leader in most markets Brand / service reputation Localized operating model Multi-channel capabilities Innovative (e.g., Darty Box) Dual brand strategy Tech Guys Coherent strategy Limited services offering Declining margins Declining margins Price orientated Underperforming assets Unproven growth initiatives Uncertain ownership Brand / service reputation Limited scale Strengths Challenges

61 What Is The Approach To Seizing The Opportunity?

62 Invite Employee Ideas Honor Unique Customers Provide End-to-End Solutions Customer Centricity | “Secret Sauce”

63 Customer Centricity Market Entry Methodology 1. Identify customers’ unmet needs and competitive landscape 2. Identify customer value segments 3. Sort by domain 4. Create unique customer value propositions 5. Align store operating/customer model

What Are Consumers Telling Us?

65 Everything is so wired you can’t touch it or you’ll set an alarm off Consumer Views of European Competitors Some Major Retailers Have Damaged Consumer Confidence In Shopping For Electronics Products stacked in boxes Products chained to bench or behind glass Products crammed together Security guards follow you Product menus don’t function Stores dirty and messy No passion or knowledge of product Poorly trained ‘kids’ High pressure on commission Force extras/ insurance on customers Rude, sexist, offensive For some too frantic, others ignored

66 .And Bring The Connected World To Our Customers “ personalized offers of subscription services bundled for my needs and budget, not just what the providers want to sell to me” “ fast and easy subscription services availability, qualification, activation, and scheduling process available where and when I want it” “ to experience products and services the way they would work in my home before I buy them” “ help in making my purchase decisions to ensure that I am selecting products and services that are compatible with each other” “to connect with others, express myself and manage my life” “ my entertainment content on demand wherever I am, physical or digital” “ to buy and manage all my licensed and personal content together easily and seamlessly” “ what I buy to work with what I already have at home” “ to share and hear the opinions of others like me who have made purchase decisions that I am contemplating” Our business plan is based on our customers’ desire for seamless connectivity, services, and content. They want solutions that enable a desired experience, and to purchase such solutions from helpful, knowledgeable sales associates as technology gets more complicated and interrelated. IN SHORT, THEY WANT HELP REALIZING THE BENEFITS OF THE NEW CONNECTED WORLD

67 ~$175 B ~$160 B ~$80 B ~$17 B NewCo < 3% Share BBY ~ 21% Share Dual Brand ~ 1% Share Dual Brand ~ 35% Share CE Market Source: Verdict, Mintel, Euromonitor, OC&C analysis, and internal data The Global Opportunity

68 Roger Taylor CFO, The Carphone Warehouse Group

69 What is Best Buy Europe?

70 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 U.K. France Germany Russia Italy Spain Turkey Poland 0% 5% 10% 15% 20% 25% Market Size 5-Yr Growth % (U.S. $ billions) European Electronics Market Source: internal company estimates

71 16,143 28,065 26,258 23,334 12,702 8,490 9,610 8,250 8,071 7,411 6,443 20,914 17,275 9,688 8,793 4,396 6,619 3,923 6,026 6,975 Decomposition of growth in EU-5 consumer electronics excluding mobile phones, 2007- 2012, £ millions * Includes downloads Source: Verdict, Euromonit or, Mintel 36% 18% 11% 18% PERCENTAGE OF TOTAL CE GROWTH CAGR 2002-07 % 27 6 20 -3 12 4 2 6 12 -6 CAGR 2007-12 % 10 2 13 -1 3 6 5 3 12 -3 5 6 TOTAL CAGR 103,216 2007 MARKET GROWTH IN TELEVISIONS 6,059 GROWTH IN MDA 3,675 GROWTH IN IN-CAR 5,933 NET GROWTH IN OTHER 2012 MARKET 136,169 In-car Gaming Entertainment* Televisions SDAs MDA Photo Other AV Portable media Computing 11,922 GROWTH IN COMPUTING 5,344 16% In the EU-5, CAGR of 6% is forecast to 2012

72 U.K. market to provide 5% CAGR to 2012 4,808 9,467 8,507 5,439 3,877 3,611 3,271 1,867 1,787 1,607 1,503 6,364 4,778 3,359 1,847 1,635 1,758 1,177 880 674 Decomposition of growth in UK consumer electronics excluding mobile phones, 2007-2012, £ millions CAGR 2002-07 % 34 -4 3 12 -2 9 7 2 22 10 CAGR 2007-12 % 5 -2 2 0 -2 3 6 3 15 5 6 5 TOTAL CAGR 30,012 2007 MARKET GROWTH IN TELEVISIONS 2143 GROWTH IN MDA 518 GROWTH IN GAMING 212 NET GROWTH IN OTHER 2012 MARKET 38,205 In-car Gaming Entertainment* Televisions SDAs MDA Photo Other AV Portable media Computing 4,658 GROWTH IN COMPUTING (major domestic appliances) Source: Verdict, Euromonitor, Mintel

73 The U.K. market is segmented between a wide variety of players BROAD-BASED PLAYERS WITH ELECTRONICS DEPARTMENTS CATEGORY-SPECIALIST RETAILERS MULTI-CATEGORY CONSUMER ELECTRONICS RETAILERS MULTIPLE WEBSITES – FEW WITH CRITICAL MASS, e.g., * * * ONLINE PURE PLAYS DUAL-CHANNEL: PHYSICAL AND ONLINE INTEGRATED MULTI-CHANNEL: PHYSICAL, ONLINE, AND COLLECT IN STORE

74 Sales by channel in U.K. 2007, %, £ billions* 17 11 17 42 27 61 36 64 26 36 27 12 30 8 29 40 24 24 Televisions 29 2 Entertainment 4.8 Portable media 23 Other AV 26 Gaming SDAs 26 Photo 18 35** Mobile phones 23 28 48 39 33 33 20 19 18 13 12 8 In-car 36 Computing 4.8 1.2 1.8 3.4 1.6 1.8 1.0 4.3 0.7 3.6 n/a*** 100%= Electrical multiples (e.g. Comet, Currys) Supermarkets (e.g . Tesco) Category specialists/ independents (e.g., Game, HMV) * Category definitions: Electrical multiples are electrical retailers with more than 10 stores; Category specialists/independent include stores specialised in a particular category and electrical stores with few store s; Supermarkets are retailers selling predominantly food/ beverages/ tobacco; Other includes Internet, mail order, mixed retailers (i.e. department stores and mass merchandisers) and other stores * * Includes kitchen specialists, grocery retailers, internet, department stores and catalogue showrooms *** Remainder is spilt with 44% to mass-market retailers, 3% to electrical independent retailers, 15% to department stores, 19% to other Source : Euromonitor, EUK, GfK, Mintel Other MDA Electricals chains dominate in larger categories, but not in smaller, higher margin segments

75 ...which is an important difference between the U.K. & U.S. markets

76 Most major players are focused on the mass market Proportion of electricals visitors by socio-demographic group, % 18 21 24 23 11 31 32 30 29 30 21 25 26 29 53 21 29 26 30 21 20 19 6 AB DE C1 C2 24 UK POPULATION 18 21 24 23 11 31 32 30 29 30 21 25 26 29 53 21 29 26 Less wealthy More wealthy

77 Price is a driver of loyalty for most, but service and quality are highly valued when in evidence 8 5 5 41 17 Proportion of electricals loyals mentioning driver of loyalty, % 3 3 3 6 14 51 51 Price Range 40 Convenience Service Quality Layout Ambience Facilities 1 3 3 5 8 41 41 62 3 3 4 6 14 48 42 29 2 2 4 8 15 52 48 32 40 49 40 8 5 5 41 17 3 3 3 6 14 51 51 Source: Verdict

78 The New Role of the Experience Source: Accenture 2007 Customer Satisfaction Research Poor Quality of Service/Goods 45% Lower Price 35% Representative Knowledge 26% Custom Solutions 65% and Top Customer Reasons for Switching Providers 59% Customer Service/ Experience 55% Price 34% Product 34% Convenience Top Customer Reasons for Choosing a Provider

79 What are the key elements of Best Buy in the U.K.? The Connected World Family Interactivity Multi-channel After-sales Advice Personalisation Environment Convenience Specialists

80 The multi-channel imperative Best Buy’s U.S. multi-channel customers are its best customers – Multi-channel customers transact twice as much as single channel customers, spending 95% more and generating 80% more margin A multi-channel business model is an essential element to Best Buy’s growth strategy Transactional Business Model Premise-based Reactive Episodic Slow to evolve Expensive to maintain Relationship-based Business Model Virtually-based Proactive Evergreen Rapid evolution Cost-effective

81 Shifting channel spend ~1/3 Of CE goods in Best Buy’s categories to be sold online by 2012 ~2/3 Of CE goods in Best Buy’s categories to be web-influenced by 2012 Web Purchased Store Purchased Web Influenced Source: Forrester’s October 2006, “US eCommerce: Five-Year Forecast And Data Over view”

82 U.K. online growth has outstripped the growth of the U.S. online business and looks set to continue Source: Management Ventures Inc. 2008 Online sales as a % of total retail sales 2000 - 2013

83 Geek Squad will be an integral element Expert Support Expert Advice

84 We are developing a full set of propositions to support the full lifecycle of customer needs Activate •B Maximise Protection • Help (inspire) me to buy the right things • Start my experience today • Dispose/ upgrade/ re-purpose • Teach me how to use it • Maximise my benefits • Protect my experience • Protect my content • Help me when it breaks Assurance Transition

85 European ‘big box’ property market • Generally, government planning policy in all EU markets continues to be protectionist to the town centres and inner cities, unlike the U.S. mall expansion • However, the pipeline of new retail park ‘big box’ space remains strong despite the economic slow down • The new retail space pipeline in Europe is expected to grow by 16% over the next 3 to 4 years – about 170 million sq ft of new space • Spain is due to open an additional 25 million sq ft of new retail space by end of 2009 both in and out of town

86 Retail parks >10,000m2 stock & pipeline until 2011 UK Netherlands Belgium Germany Spain Poland Austria Ireland Italy Portugal Sweeden Hungary CZ France 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Stock > 10,000m2 Pipeline > 10,000m2

87 We’re targeting rents of £25-40/sq. ft 0 10 20 30 40 50 60 70 80 90 100 0 100 200 300 400 500 600 700 800 900 1000 Number of Retail Parks Highest rent achieved by Sq. Ft

88 Property strategy • Stores to be 25-30,000 sq ft • Preferably “bulky goods” planning consent – up to 30% cheaper than “open A1” (no restrictions on products) • Geographically clustered at launch • No shortage of opportunities in present climate

89 Average store sizes of incumbents are 15-20k sq ft >30 >20-30 15-20 10-15 0-10 17,900 19,700 14,600 12,000 PC WORLD COMET CURRYS ARGOS AVERAGE STORE SIZE* sq ft BREAKDOWN OF OUT-OF-TOWN STORE SIZE* ‘000 sq ft, % *Gross size, includes warehousing Source: GOAD database, Trevor Wood associates database, McKinsey 26 30 5 19 39 5 2 7 43 8 29 25 9 39 12 22 43 23 15

90 .....larger stores are expected to generate larger returns U.K. first store expected to open: Summer 2009

91 Targeted expansion in Europe Summer 2009 ...then... ...moving towards... CPW TPH CPW TPH CPW TPH CPW TPH CPW TPH CPW TPH CPW TPH CPW TPH CPW T TPH CPW TPH CPW TPH CPW TPH CPW TPH CPW TPH CPW TPH CPW TPH CPW TPH

92 Company operating model Exec Operating Board Geek Squad Marketing / PR Finance Property HR IT / Supply Chain / BCF Legal / Governance Stores plus alternate channels Shared services

93 Typical store economics • Based on a 30,000-sq-ft store • Sales/ sq ft £600-700 – 3-4 years’ maturity profile • Store margin 7%+ at maturity (net of marketing) • Central overhead ~2.0% of sales, longer term leverage • £2m capex per store, plus ~£1.5m working capital • Source: company internal data

94 Short-term financial impact • Start-up costs of up to £20m in current year and up to £30m in 09/10 • Small capex this year; up to £40m next year covering stores, IT and logistics, and multi channel strategy • All dependent on rate of new store openings Source: company internal data

95 Financial goals for BBY Europe • Our goal is to double revenue and operating income between March 2008 and March 2013* • Base figures are £3.1bn ($5.6bn) and £175m ($315m), respectively* • Guidance includes Best Buy Mobile profit share but not its revenue • Post-tax ROIC on big box rollout anticipated in mid-teens • A subsidiary of Best Buy Co., Inc. acquired a 50% interest in Best Buy Europe on June 30, 2008. Base figures are presented on a stand-alone basis for Best Buy Europe and do not reflect US GAAP adjustments, purchase accounting or the adjustment for minority interest (as The Carphone Warehouse holds a 50% minority interest in Best Buy Europe). As such, these base figures do not reflect the full actual results that will be reported by Best Buy Co., Inc., in its consolidated statements of earnings.

96 £6-7 billion @ 5% EBIT by 2013 Revenue goal Source: internal company estimates

97 Brian Dunn President and Chief Operating Officer, Best Buy

98 The Company We Keep

99 The Company We Keep

100 Recap of our Strategic Update Carphone’s retail model continues to evolve Best Buy Mobile exemplifies our ability to work together successfully The European marketplace offers tremendous opportunity We plan to leverage what we learn across all of our markets We believe our strategy has global application

101 Your Questions

102 Return on Invested Capital (ROIC) ROIC = NOPAT (as adjusted) Adj. avg. invested capital Operating Income + Net Rent Expense - Depreciation portion of rent - Tax Expense = NOPAT Total Equity + Long-term debt + Capitalized operating leases - Excess cash = Adj. avg. invested capital * Please refer to the company’s annual report for additional information on ROIC