Financial Astrology of Best Buy Co., Inc.

FINANCIAL ASTROLOGY

First Trade Date for Best Buy Co., Inc.

Company Name	First Trade Date (yyyy-mm-dd)
Best Buy Co., Inc.	1987-07-20

Company Name	Symbol
Best Buy Co., Inc.	BBY
History and Business of Company (this information may include date of incorporation)
We are a specialty retailer of consumer electronics, home-office equipment, entertainment software and appliances with revenue from continuing operations of $20.9 billion for our fiscal year ended March 1, 2003. We operate retail stores and commercial Web sites as part of continuing operations under the brand names Best Buy (BestBuy.com), Future Shop (FutureShop.ca) and Magnolia Hi-Fi (MagnoliaHiFi.com). We began in 1966 as an audio components retailer, and with the introduction of the videocassette recorder in the early 1980's, expanded into video products. In 1983, we revised our marketing strategy and began using mass-merchandising techniques, which included offering a wider variety of products and operating stores under a "superstore" concept. In 1989, we dramatically changed our method of retailing by introducing a self-service, noncommissioned, discount-style store concept designed to give the customer more control over the purchasing process. In fiscal 2000, we introduced a small-market Best Buy store concept that offers merchandise in the same product categories as larger stores, with a product assortment tailored to each respective community. The Best Buy store concept has evolved to include more interactive displays and, for certain products, a higher level of customer service, with the latest version designed to increase labor efficiency and to improve merchandising. In fiscal 2004, we plan to enhance our store formats and customize product offerings to meet the needs of customers in different markets. This plan is consistent with customer centricity, one of the four key strategic priorities we formalized in fiscal 2003. In fiscal 2000, we established Best Buy stores' online shopping site, BestBuy.com. Our clicks-and-mortar strategy is designed to empower consumers to research and purchase products seamlessly either online or in retail stores. The online site offers products in all of Best Buy stores' principal product categories. In fiscal 2004, we expect to unveil a Web site with enhanced features including the ability to offer online consumers an even broader product assortment than we carry in Best Buy stores. Acquisitions - In the fourth quarter of fiscal 2001, we acquired the common stock of Magnolia Hi-Fi, Inc. (Magnolia Hi-Fi) for $88 million in cash, including transaction costs. Magnolia Hi-Fi is a Seattle-based, high-end retailer of audio and video products that operated 19 stores in Washington, Oregon and California as of March 1, 2003. We acquired Magnolia Hi-Fi to access new customers. In the third quarter of fiscal 2002, we acquired all of the common stock of Future Shop Ltd. (Future Shop) for $368 million, net of cash acquired, including transaction costs. Future Shop, which operated 104 stores as of March 1, 2003, is Canada's largest consumer electronics retailer and offers product categories similar to that of Best Buy stores. We acquired Future Shop to further our expansion plans, leverage our expertise in consumer electronics retailing and increase shareholder value. The acquisition marked our initial expansion into international operations. In the third quarter of fiscal 2003, we acquired all of the common stock of Geek Squad, Inc. (Geek Squad) for approximately $3 million, net of cash acquired, including transaction costs. Geek Squad provides residential consumer computer support. We acquired Geek Squad to further our plans of providing technology support services to customers. Additional information regarding our acquisitions is included in note 3 of the Notes to Consolidated Financial Statements on page 54 of our Annual Report, contained in Exhibit 13.1 to this report, and is incorporated herein by reference. In fiscal 2003, we put on hold any major acquisitions or expansion beyond North America to focus on our core business. Discontinued Operations - In addition to the acquisitions described above, in the fourth quarter of fiscal 2001, we acquired the common stock of Musicland Stores Corporation (Musicland) for $425 million, including transaction costs, plus long-term debt valued at $271 million. Musicland is primarily a mall-based national retailer of movies, prerecorded music and other entertainment-related products. At the end of fiscal 2003, Musicland operated 1,195 retail stores in 48 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico, and commercial Web sites under the brand names Media Play (MediaPlay.com), Sam Goody (SamGoody.com) and Suncoast (Suncoast.com). The original strategy behind the Musicland acquisition was to bring Best Buy's core competencies in retailing consumer electronics to new consumer segments, including segments typically underserved by our Best Buy stores. However, the Musicland business did not meet our financial objectives. After carefully considering several alternatives, we determined that the interests of our shareholders, employees, vendors and landlords would be best served by a sale of the business. Accordingly, during the fourth quarter of fiscal 2003, we committed to a plan to sell our interest in Musicland. We have retained a national investment banking firm to assist with the sale process, as well as additional professionals to assist in other areas of the plan. Musicland's financial results have been classified separately as discontinued operations in our consolidated financial statements for all periods presented. The sale of our interest in Musicland will allow us to focus on our consumer electronics stores, which are the core profit drivers for our business. Additional information regarding Discontinued Operations is included in Management's Discussion and Analysis of Results of Operations and Financial Condition beginning on page 20 of our Annual Report and note 2 of the Notes to Consolidated Financial Statements beginning on page 52 of our Annual Report, incorporated herein by reference.

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