Best Buy (BBY) 10-K risk factor changes: FY2021 vs FY2020

Described below are certain risks [removed: that] we believe apply to our business and the industry in which we operate.

Price is of great importance to most [removed: customers,] [added: customers] and price transparency and comparability continues to increase, particularly as a result of digital technology.

Online and multi-channel retailers continue to focus on delivery services, with customers increasingly seeking faster, guaranteed delivery times and [removed: low-price] [added: low-cost] or free shipping.

For example, as our value proposition evolves to support the healthcare industry with technology, we [removed: may be] [added: are] subject to privacy and information security rules, such as the Health Insurance Portability and Accountability Act, and/or subject to increased potential liability risk.

In fiscal [removed: 2020,] [added: 2021] we continued to invest in our health strategy and our underlying purpose to enrich lives through technology.

- employees having access to customer devices, including the information held on those devices, which may increase our responsibility for the security of those devices and [added: the] privacy of the data they hold;

Our transformational activities within the organization are necessary to fully support our strategic vision for future customer and income growth, including our Building the New Blue [removed: strategy,] [added: Strategy,] and any decreased capability to undertake those activities may have a material [added: adverse] impact on achieving that strategy.

In fiscal [removed: 2020,] [added: 2021] our 20 largest suppliers accounted for approximately [removed: 79%] [added: 80%] of the merchandise we purchased, with five suppliers - Apple, Samsung, Hewlett-Packard, [removed: Sony and] LG [added: and Sony] - representing approximately [removed: 56%] [added: 57%] of total merchandise purchased.

Generally, our ability to negotiate favorable terms with our vendors is more difficult with vendors where our purchases represent a smaller proportion of their total revenues and/or when there is less [removed: competition.][added: competition for those products.]

In addition, our carriers [removed: also] may [added: also] serve customers through their own stores, websites, mobile applications and call centers or through other competing retail channels.

[removed: Changes] [added: In addition, changes] in market compensation rates may adversely affect our profitability.

The turnover rate in the retail sector is relatively [removed: high,] [added: high] and there is an ongoing need to recruit and train new employees.

Factors that affect our ability to maintain sufficient numbers of qualified employees [removed: include] [added: include, for example,] employee engagement, our reputation, unemployment rates, competition from other employers, availability of qualified personnel and our ability to offer appropriate compensation and benefit packages.

[removed: Market increases to employee hourly wage rates, increased cost pressure on employer-provided benefits, and our] [added: Our] ability to implement corresponding adjustments within our labor model and compensation and benefit packages could have a material [added: adverse] impact to the profitability of our business.

- the financial, operational and business impact of new regulations governing data privacy and [removed: security, such as the California Consumer Privacy Act ("CCPA");][added: security;]

- the impact of litigation trends, including [removed: class action] [added: class-action] lawsuits involving consumers and shareholders, and labor and employment matters; and

In particular, future trade disputes or future phases of trade negotiations with China could lead to the imposition of tariffs [added: or other trade actions] that could adversely affect our supply chain and our business and could require us to take action to mitigate those effects, as we did in fiscal 2020.

Further, the impact of potential changes in U.S. or other countries' tax laws and regulations or evolving interpretations of existing laws, including additional guidance and legislation related to the Tax Cuts and Jobs [added: Act and the Coronavirus Aid, Relief, and Economic Security (“CARES”)] Act, could adversely affect our financial condition and results of operations.

Macroeconomic pressures in the markets in which we operate, including, but not limited to, the effects of [removed: novel coronavirus disease (“COVID 19”)] [added: COVID-19,] may adversely affect consumer spending and our financial results.

Real GDP growth, consumer confidence, the COVID-19 [removed: pandemic discussed in the following risk factor,] [added: pandemic,] inflation, employment levels, oil prices, interest rates, tax rates, availability of consumer financing, housing market conditions, foreign currency exchange rate fluctuations, costs for items such as fuel and food and other macroeconomic trends can adversely affect consumer demand for the products and services that we offer.

Geopolitical issues around the world and how our markets are positioned can also impact [removed: the] macroeconomic conditions and could have a material adverse impact on our financial results.

As discussed above, our revenues are susceptible to volatility from various [removed: sources,] [added: sources] which can lead to periods of flat or declining revenues.

Some elements of our costs may be higher than our competitors' because of, for example, our extended retail footprint and structure, our [removed: differential] [added: hourly pay structure, our differentiated] service offerings or our levels of customer service.

We [removed: also] utilize complex information technology platforms to operate our websites and mobile applications.

Increasing costs associated with information security and privacy, such as increased investment in technology and qualified staff, costs of compliance, costs resulting from [removed: fraud,] [added: fraud] and costs of cyber and privacy insurance, could cause our business and results of operations to suffer materially.

Additionally, new laws, such as the [removed: CCPA,] [added: California Consumer Privacy Act,] are expanding our obligations to protect the privacy and security of customer data, requiring additional resources and creating incremental risk arising from a potential breach.

Assessing the viability of new ventures is typically subject to significant [removed: uncertainty] [added: uncertainty,] and the success of such new ventures can be adversely affected by many factors, including, for example:

A large proportion of our revenue and earnings is generated in the fiscal fourth quarter, which includes the majority of the holiday shopping [removed: season in the U.S., Canada and Mexico.][added: season.]

As a result of these factors, there is [removed: a] risk that our fiscal fourth quarter and annual results could be adversely affected.

If we fail to interpret, predict and react to these changes in a timely and effective manner, the consequences can include: failure to offer the products and services that our customers want; [removed: having] excess inventory, which may require heavy discounting or liquidation; inability to secure adequate access to brands or products for which consumer demand exceeds supply; delays in adapting our merchandising, marketing or supply chain capabilities to accommodate changes in product trends; and damage to our brand and reputation.

Approximately 25% of our fiscal [removed: 2020] [added: 2021] revenue was transacted using one of the company's branded cards.

We depend on our vendors' abilities to deliver products to us at the right location, [added: at the] right time and in the right quantities.

- damages or other loss to products; [removed: and]

- increasing transportation [removed: costs.][added: costs; and]

In recent years, we have observed an increase in the number and severity of certain [added: catastrophic] events in many of our markets.

Demand for the products and services we sell could decline if we fail to maintain positive brand perception and [removed: recognition through] [added: recognition through] a [removed: focused] [added: focus on] consumer [removed: experience approach.][added: experience.]

Recalls of products, particularly when combined with lack of available alternatives or [removed: our] difficulty in sourcing sufficient volumes of replacement products, could also have a material adverse impact on our revenue and profitability.

As an employer of [removed: nearly 125,000] [added: approximately 102,000] people in a large number of different jurisdictions, we are subject to risks related to employment laws and regulations including, for example:

- the organization of unions and related regulations that affect the nature of labor relations, changes to which the National Labor Relations Board [removed: continually] [added: frequently] considers;

- laws that impact minimum wage, sick time, paid leave and scheduling requirements [added: that] could directly or indirectly increase our payroll costs and/or impact the level of service we are able to provide.

The risks are categorized using the following headings: external, strategic, operational, regulatory and legal, and financial and market.

External Risks

The COVID-19 pandemic has subjected our business, operations and financial condition to a number of risks, and those risks may intensify or last for an extended period of time.

Risks Related to Sales and Customer Demand: At various times during fiscal 2021, the pandemic and the operational changes we have made have resulted in significant reductions in customer visits to, and spending at, our stores.

The extent to which the pandemic continues to impact our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict or assess, including the duration of the pandemic; the extent of the impact on global and regional economies and economic activity, including the duration and magnitude of its impact on unemployment rates, consumer discretionary spending and consumer confidence; actions governments take, including governments’ positions towards monetary and/or fiscal policy, including potential stimulus or the timing and nature of loosening of restrictions imposed in response to the pandemic and its resurgence; actions businesses and individuals take in their ongoing responses to the pandemic; and our ability to successfully navigate those impacts.

COVID-19 has caused consumers to allocate a higher share of wallet to consumer electronics.

After the pandemic, consumers might shift their spending back towards categories or industries that were affected by the pandemic and away from consumer electronic categories.

In addition, the pandemic has caused some products and services to be in high demand, and we may not be able to meet this demand in all of our categories due to product shortages or decisions by our vendors to allocate products to certain customers due to the circumstances resulting from the pandemic, and our vendors may increase prices, each of which may adversely impact our revenue and profitability.

The pandemic has, and may continue to, negatively impact our products and services that historically have been more likely to be purchased in a physical store than online.

Risks Related to Operations: The pandemic has forced us to make a number of operational changes.

Although we continue to offer a contactless, curbside model for those who prefer to shop that way, we could be required to return to a curbside-only model or close stores due to the current or future resurgence of the pandemic.

Our ability to continue to sell our products and services is highly dependent on our ability to maintain the safety of our customers and those employees who are needed to work at our stores and distribution facilities.

Failure to maintain the recommended or required safety standards as defined by the Centers for Disease Control and Prevention and local governments could also result in an increased risk of regulatory action or civil litigation.

The ability of our employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19.

While we are following the requirements of governmental authorities and taking preventative and protective measures to prioritize the safety of our customers and employees, these measures may not be successful, and we may be required to temporarily close distribution centers or stores from time to time, halt certain services or take other measures.

Additionally, while we have continued to prioritize the health and safety of our employees and customers as we continue to operate during the pandemic, we face an increased risk of litigation related to our operating environments.

Preparing for and responding to the continuing pandemic could divert management’s attention from our key strategic priorities; increase costs as we prioritize health and safety matters for our employees and customers; cause us to reduce, delay, alter or abandon initiatives that may otherwise increase our long-term value; or otherwise disrupt our business operations.

Risks Related to Profitability: To the extent COVID-19 continues to cause fundamental shifts in the channels in which customers choose to engage us, our profitability and our profitability rate may be adversely impacted.

For example, at various times in fiscal 2021, we continued to pay rent for a number of physical stores that were closed and not generating sales (and we may need to do so again in the future), our online mix of products and services generally produces lower gross profit rates than in-store sales, and we offer some products and services that historically are more likely to be purchased in a physical store than online.

We also do not offer or have limited digital and online offerings for certain products and services that have higher profitability rates.

To the extent we are not able to maintain or increase the level of customer traffic in our stores or maintain or enable a more profitable mix of sales in our digital and online channels, our profitability and profitability rates may be materially negatively impacted.

We have also incurred additional costs due to the operational changes we have made in response to the pandemic, and these costs have adversely impacted our profitability.

As a result of disruptions to our supply chain, primarily due to mandatory shutdowns in locations where our products are manufactured, we are experiencing, and may continue to experience, increased costs for shipping and transportation resources.

If we are unable to manage these costs and supply chain disruptions, our profitability may be adversely impacted.

Even after the COVID-19 pandemic subsides, we could experience a longer-term impact on our costs, for example, the need for enhanced health and hygiene requirements in one or more regions in attempts to counteract future outbreaks.

In the event of decreased store traffic, certain of our stores may not generate revenue sufficient to meet operating expenses, which could adversely affect the value of our owned and leased properties, potentially requiring us to record more significant non-cash impairment charges in future periods.

Risks Related to Our Debt and Global Financing Markets: Although we repaid in full the amounts we had borrowed under our revolving credit facility during fiscal 2021, we may find it necessary to increase our cash position and our short-term debt in the future in response to further resurgences of COVID-19.

In the event we are required to raise capital, our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the global financing markets, the availability of sufficient amounts of financing, our prospects, our credit ratings, and our business and industry outlook.

There is no guarantee that debt or equity financings will be available in the future to fund our obligations, or will be available on terms consistent with our expectations.

COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, as well as reactions to future pandemics or resurgences of COVID-19, could also precipitate or aggravate the other risk factors that we have identified in this section, which in turn could materially adversely affect our business, financial condition, liquidity, results of operations (including revenues and profitability) and/or stock price.

Further, COVID-19 may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

Future outbreaks, epidemics and/or pandemics could adversely impact our operating results.

The risk of or actual occurrence of national, international or global outbreaks, epidemics, and/or pandemics, could have a material adverse impact on our business, including but not limited to, our sales and customer demand, operations and supply chain, financial results, capital financing or other financing activities and all other stated risks identified in these risk factors.

Further, external social activism, tension and violence resulting from external events impacting social justice and inequality, and our position and response to them, may adversely affect our employees, customers, properties and the communities in which we operate.

In addition, consumer preferences may be influenced even further as the social and economic environment navigates through the COVID-19 pandemic.

Strategic Risks

The retail sector has experienced an immense increase in sales initiated online and using mobile applications, as well as online sales for both in-store or curbside pick-up.

Our increase in the starting hourly wage for all domestic employees implemented in fiscal 2021, as well as continued market pressure to increase employee hourly wage rates, increased cost pressure on employer-provided benefits.

- pressure on services attachment as a result of the sustained increase in consumer desire to purchase product offerings online and through mobile applications;

The COVID-19 pandemic has further demonstrated the necessity for transformation, and as a result, has increased pressure on the timeline of these activities.

The retail sector continues to experience a trend towards an increase in sales initiated online and using mobile applications, and some online-only businesses have lower operating costs.

[Table of Contents](#TOC)

- the impact of the general election on the development, or changes in, laws, regulations and policies.

With respect to the CCPA, which came into effect on January 1, 2020, the statute provides new privacy rights for California residents and requires companies to provide new disclosures to California consumers, allowing them to opt out of certain uses of their personal information.

In addition, the California Attorney General has issued proposed rules under the CCPA.

We cannot predict the impact of this first-of-its-kind statute and these rules that have not yet been finalized, in addition to potential privacy and security legislation in other states and the U.S. federal level, on our business or operations, but these legislative initiatives may require us to modify our data processing practices and policies, interfere with intended business operations or lead us to incur incremental expenses in an effort to comply.

The impact of COVID-19 is expected to adversely affect our business and our financial results.

Concerns have rapidly grown regarding the outbreak of COVID-19.

As the pandemic continues to grow, consumer fear about becoming ill with the virus and recommendations and/or mandates from federal, state and local authorities to avoid large gatherings of people or self-quarantine have increased, which will adversely affect traffic to our stores.

In particular, we recently announced a shift to enhanced curbside service only for all of our stores on an interim basis.

Further, all in-home installation and repair has been temporarily suspended and all in-home consultations are being conducted virtually.

The significant reduction in customer visits to, and spending at, our stores caused by COVID-19 will likely result in a loss of sales and profits and other material adverse effects.

We may further restrict the operations of our stores and distribution facilities if we deem this necessary or if recommended or mandated by authorities and these measures could have a further material impact on our sales and profits.

COVID-19 also impacted our supply chain for products we sell, particularly as a result of mandatory shutdowns in locations where our products are manufactured.

We could also see significant disruptions to our supply chain in the U.S. as well as significant deterioration in macroeconomic factors that typically affect us, such as consumer spending.

In addition, we expect to incur significant costs in our response to the pandemic, including, but not limited to, costs incurred to

implement the operational changes described above and certain payments to or other costs relating to employees who are not working during the pandemic.

The extent of the impact of COVID-19 on our business and financial results will also depend on future developments, including the duration and spread of the outbreak within the markets in which we operate and the related impact on consumer confidence and spending, all of which are highly uncertain.

Our information technology systems could also be adversely affected by changes that result from COVID-19, including for example, a significant increase in remote working of our employees and an increase in online orders due to restrictions on our retail operations.

- diseases, pandemics (including COVID-19), outbreaks and other health-related concerns, which have resulted in and could continue to result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas;

- our supply chain service location network strategy.

We operate retail locations in Canada and Mexico.

[removed: - Business] [added: Business] Strategy [added: and COVID-19 Update]

[removed: For such omitted disclosures, refer] [added: [Refer] to Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations*, of] [added: Operations,* in] our [removed: [Annual Report on] Form 10-K for the fiscal year ended February [removed: 2, 2019](https://www.sec.gov/Archives/edgar/data/764478/000076447819000009/bby-2019x10k.htm), filed with] [added: 1, 2020, for discussion of] the [removed: SEC on March 28,] [added: results of operations for the year ended February 1, 2020, compared to the year ended February 2,] 2019, which [removed: Item 7] is incorporated by reference [removed: herein.][added: herein.](https://www.sec.gov/Archives/edgar/data/764478/000076447820000017/bby-20200201x10k.htm)]

Our purpose is to enrich [removed: the] lives [removed: of consumers] through technology.

The Domestic segment is comprised of the [removed: operations] [added: operations, including our Best Buy Health business,] in all states, districts and territories of the U.S. under various brand names including Best Buy, Best Buy Business, Best Buy Express, Best Buy Health, CST, Geek Squad, GreatCall, Lively, Magnolia and Pacific Kitchen and Home and the domain names bestbuy.com and greatcall.com.

[removed: It now reflects certain revenue streams previously excluded from the comparable] [added: Comparable] sales [removed: calculation, such as] [added: also includes] credit card revenue, gift card breakage, commercial sales and sales of merchandise to wholesalers and dealers, as applicable.

[removed: Our comparable] [added: Comparable] sales [removed: calculation compares] [added: includes] revenue from stores, websites and call centers operating for at least 14 full [removed: months, as well as revenue related to certain other comparable sales channels for a particular period to the corresponding period in the prior year.][added: months.]

[removed: Relocated stores, as well as remodeled, expanded and downsized stores] [added: Stores] closed more than 14 days, [added: including but not limited to relocated, remodeled, expanded and downsized stores, or stores impacted by natural disasters,] are excluded from [removed: the] comparable sales [removed: calculation] until at least 14 full months after reopening.

Acquisitions are included in [removed: the] comparable sales [removed: calculation] beginning with the first full quarter following the first anniversary of the date of the acquisition.

[removed: The calculation of comparable] [added: Comparable] sales excludes the impact of revenue from discontinued operations and the effect of fluctuations in foreign currency exchange rates (applicable to our International segment only).

On March 1, 2018, we announced our intent to close all of our 257 remaining Best Buy Mobile stand-alone stores in the U.S. As a result, all revenue related to these stores has been excluded from [removed: the] [added: our] comparable sales calculation beginning in March 2018.

Consistent with our comparable sales policy, the results of GreatCall are included in our comparable sales calculation beginning in the fourth quarter of fiscal 2020, and the results of CST are [removed: excluded from] [added: included in] our comparable sales calculation [removed: for] [added: beginning in] the [removed: periods presented.][added: third quarter of fiscal 2021.]

This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), as well as certain adjusted or non-GAAP financial measures, such as constant currency, non-GAAP operating income, non-GAAP effective tax rate and non-GAAP diluted earnings per share [removed: ("EPS") from continuing operations.][added: ("EPS").]

Generally, our non-GAAP financial measures include adjustments for items such as restructuring charges, goodwill impairments, [added: price-fixing settlements,] gains and losses on investments, intangible asset amortization, certain acquisition-related costs and the tax effect of all such items.

[added: We] believe the disclosure of revenue changes in constant currency provides useful supplementary information to investors in light of significant fluctuations in currency rates.

Refer to the *Non-GAAP Financial Measures* section below for [removed: the] detailed [removed: reconciliation] [added: reconciliations] of items [removed: that impacted] [added: impacting] non-GAAP operating income, non-GAAP effective tax rate and non-GAAP diluted EPS [removed: from continuing operations] in the presented periods.

[removed: No] [added: Other than the restructuring charges incurred related to our decision to exit our operations in Mexico, no] such events were identified for the periods presented.

| Consolidated Performance Summary | [removed: 2020] [added: 2021] | | | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | |

| Revenue | $ | [removed: 43,638] [added: 47,262] | | | $ | [removed: 42,879] [added: 43,638] | | | $ | [removed: 42,151] [added: 42,879] | |

| Revenue % increase | | [removed: 1.8] [added: 8.3] | % | | | [removed: 1.7] [added: 1.8] | % | | | [removed: 7.0] [added: 1.7] | % |

| Comparable sales [removed: growth(1)] [added: growth] | | [removed: 2.1] [added: 9.7] | % | | | [removed: 4.8] [added: 2.1] | % | | | [removed: 5.6] [added: 4.8] | % |

| Gross profit | $ | [removed: 10,048] [added: 10,573] | | | $ | [removed: 9,961] [added: 10,048] | | | $ | [removed: 9,876] [added: 9,961] | |

| Gross profit as a % of [removed: revenue(2)] [added: revenue(1)] | | [removed: 23.0] [added: 22.4] | % | | | [removed: 23.2] [added: 23.0] | % | | | [removed: 23.4] [added: 23.2] | % |

| SG&A | $ | [removed: 7,998] [added: 7,928] | | | $ | [removed: 8,015] [added: 7,998] | | | $ | [removed: 8,023] [added: 8,015] | |

| SG&A as a % of [removed: revenue] [added: revenue(1)] | | [removed: 18.3] [added: 16.8] | % | | | [removed: 18.7] [added: 18.3] | % | | | [removed: 19.0] [added: 18.7] | % |

| Restructuring charges | $ | [removed: 41] [added: 254] | | | $ | [removed: 46] [added: 41] | | | $ | [removed: 10] [added: 46] | |

| Operating income | $ | [removed: 2,009] [added: 2,391] | | | $ | [removed: 1,900] [added: 2,009] | | | $ | [removed: 1,843] [added: 1,900] | |

| Operating income as a % of revenue | | [removed: 4.6] [added: 5.1] | % | | | [removed: 4.4] [added: 4.6] | % | | | 4.4 | % |

| Net earnings [removed: from continuing operations] | $ | [removed: 1,541] [added: 1,798] | | | $ | [removed: 1,464] [added: 1,541] | | | $ | [removed: 999] [added: 1,464] | |

| Diluted earnings per share | $ | [removed: 5.75] [added: 6.84] | | | $ | [removed: 5.20] [added: 5.75] | | | $ | [removed: 3.26] [added: 5.20] | |

[removed: (2)Because] [added: (1)Because] retailers vary in how they record costs of operating their supply chain between cost of sales and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers' corresponding rates.

Revenue, gross profit rate, SG&A rate and operating income rate changes in fiscal [removed: 2020] [added: 2021] were primarily driven by our Domestic segment.

| Domestic Segment Performance Summary | [removed: 2020] [added: 2021] | | | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | |

| Revenue | $ | [removed: 40,114] [added: 43,293] | | | $ | [removed: 39,304] [added: 40,114] | | | $ | [removed: 38,662] [added: 39,304] | |

| Revenue % increase | | [removed: 2.1] [added: 7.9] | % | | | [removed: 1.7] [added: 2.1] | % | | | [removed: 6.7] [added: 1.7] | % |

| Comparable sales growth(1) | | [removed: 2.3] [added: 9.2] | % | | | [removed: 4.8] [added: 2.3] | % | | | [removed: 5.6] [added: 4.8] | % |

| Gross profit | $ | [removed: 9,234] [added: 9,720] | | | $ | [removed: 9,144] [added: 9,234] | | | $ | [removed: 9,065] [added: 9,144] | |

| Gross profit as [added: a] % of revenue | | [removed: 23.0] [added: 22.5] | % | | | [removed: 23.3] [added: 23.0] | % | | | [removed: 23.4] [added: 23.3] | % |

| SG&A | $ | [removed: 7,286] [added: 7,239] | | | $ | [removed: 7,300] [added: 7,286] | | | $ | [removed: 7,304] [added: 7,300] | |

| SG&A as [added: a] % of revenue | | [removed: 18.2] [added: 16.7] | % | | | [removed: 18.6] [added: 18.2] | % | | | [removed: 18.9] [added: 18.6] | % |

| Restructuring charges | $ | [removed: 41] [added: 133] | | | $ | [removed: 47] [added: 41] | | | $ | [removed: 9] [added: 47] | |

During the third quarter of fiscal 2021 we made the decision to exit our operations in Mexico.

Fiscal 2021, fiscal 2020 and fiscal 2019 included 52 weeks.

Comparable sales is a metric used by management to evaluate the performance of our existing stores, websites and call centers by measuring the change in net sales for a particular period over the comparable prior-period of equivalent length.

Online sales are included in comparable sales.

Online sales represent those initiated on a website or app, regardless of whether customers choose to pick up product in store, curbside, at an alternative pick-up location or take delivery direct to their homes.

All periods presented apply this methodology consistently.

In March 2020, the World Health Organization declared the outbreak of novel coronavirus disease (“COVID-19”) as a pandemic.

All stores that were temporarily closed as a result of COVID-19 or operating a curbside-only operating model are included in comparable sales.

On November 24, 2020, we announced our decision to exit our operations in Mexico.

As a result, all revenue from Mexico operations has been excluded from our comparable sales calculation beginning in December of fiscal 2021.

We believe comparable sales is a meaningful supplemental metric for investors to evaluate revenue performance resulting from growth in existing stores, websites and call centers versus the portion resulting from opening new stores or closing existing stores.

In fiscal 2021 our Enterprise comparable sales grew 9.7% as we leveraged our unique capabilities, including our supply chain expertise, flexible store operating model and ability to shift quickly to digital, to meet what was clearly elevated demand for products that help customers work, learn, cook, entertain and connect in their homes.

We provided customers with multiple options for how, when and where they shopped with us to ensure it satisfied their need for safety and convenience.

The pandemic environment underscored our purpose to enrich lives through technology, and the capabilities we strengthened in fiscal 2021 will benefit us going forward as we execute our strategy.

Our strong financial performance allowed us to share our success with the community, our shareholders, and, importantly, our employees.

In the third quarter of fiscal 2021, we made a $40 million donation to the Best Buy Foundation to accelerate the progress towards our goal to reach 100 Teen Tech Centers across the U.S. We believe our Teen Tech Centers help to further our commitments towards economic and social justice in our communities by making a measurable difference in the lives of underserved teens who may not otherwise have access to technology.

In addition, we resumed our share repurchase program during the fourth quarter of fiscal 2021 and increased our quarterly dividend by 27% to $0.70 per share.

For our employees, we provided hourly appreciation pay for those who were working on the frontlines, paid recognition bonuses to field employees and established multiple hardship funds for anyone impacted physically, emotionally or financially by COVID-19.

Starting August 1, 2020, we also raised our starting wage to $15 per hour for all domestic employees and enhanced our employee benefits.

Throughout the pandemic and across all the ways customers can shop, we adhered to safety protocols that limited store capacity, followed strict social distancing practices and used proper protective equipment, including requiring our employees and customers to wear masks.

This COVID-19 pandemic and the shift in customer buying behavior underscores the importance of our strong multi-channel capabilities.

In fiscal 2021 our Domestic online revenue grew 144% compared to last year.

We believe it is essential to provide options that let customers choose what works best for them.

To best serve our customers during the pandemic, we had to be innovative and flexible.

Early in the year, we quickly rolled out enhanced curbside pick-up across our stores to provide our customers convenience when we made the difficult decision to close our stores in March 2020.

In May 2020 we developed an in-store appointment model that provided our customers with an option to shop in our stores as we prepared to open stores back up to customer shopping.

We developed solutions like virtual consultations with advisors and video chats with our store associates.

In addition, we made significant improvements to the functionality and customer experience of our app to support shopping, support and fulfillment.

We provided fulfillment options that customers have come to expect from all retailers like fast and free home delivery, in-store pick-up and curbside pick-up.

As we look forward, the environment is still evolving, and our operating model and supporting cost structure are evolving as well.

The pandemic has accelerated the evolution of retail and compelled us to change our operating model in the best interest of our employees and customers.

We have also expedited some planned strategic changes that we believe will allow us to emerge from this time even stronger.

During the third quarter of fiscal 2021 we made the difficult decision to exit our operations in Mexico and began taking other actions to more broadly align our organizational structure in support of our strategy.

As a result, we recorded $144 million of charges in our International segment in fiscal 2021, including $23 million of inventory markdowns within cost of sales and $121 million within restructuring charges primarily comprised of asset impairments, currency translation adjustments and termination benefits.

As of January 30, 2021, the exit was substantially complete and we do not expect to incur material future restructuring charges in fiscal 2022 related to the exit.

We also recorded $133 million of restructuring charges in our Domestic segment in fiscal 2021, primarily related to termination benefits associated with field and corporate organizational changes in support of our strategy, as well as impairments of technology assets held in service of our Mexico operations.

As we continue to evolve our Building the New Blue Strategy, it is possible that we will incur material future restructuring costs, but we are unable to forecast the timing and magnitude of such costs.

We believe the following will be permanent and structural implications of the pandemic relevant to Best Buy:

- Customer shopping behavior will be permanently changed in a way that is even more digital and puts customers entirely in control to shop how they want.

Our strategy is to embrace that reality, and lead, not follow.

Our MD&A is presented in the following sections:

- Overview

- Results of Operations

- Liquidity and Capital Resources

- Critical Accounting Estimates

- New Accounting Pronouncements

[Table of Contents](#TOC)

In March 2019, the SEC adopted the final rule under SEC Release No. 33-10618, *FAST Act Modernization and Simplification of Regulation S-K* (“FAST Act”).

The amendment aims to modernize and simplify certain reporting requirements and improve readability and navigability between disclosures.

On adoption of this amendment, we omitted analysis of the results of operations and cash flows for the year ended February 2, 2019, in comparison to the year ended February 3, 2018.

Fiscal 2020 and fiscal 2019 included 52 weeks, while fiscal 2018 included 53 weeks with the additional week occurring in the fiscal fourth quarter.

In the first quarter of fiscal 2020, we refined our methodology for calculating comparable sales.

The impact of adopting these changes is immaterial to all periods presented, and therefore prior-period comparable sales disclosures have not been restated.

We

Business Strategy

In fiscal 2020, we grew our Enterprise comparable sales by 2.1% on top of 4.8% in fiscal 2019, which represents our sixth consecutive year of positive Enterprise comparable sales.

We also increased GAAP diluted EPS by 10.6% to $5.75 and increased our non-GAAP diluted EPS by 14.1% to $6.07.

In addition, we recorded annual revenue of $43.6 billion, GAAP operating income of $2.0 billion and non-GAAP operating income of $2.1 billion in fiscal 2020.

Compared to fiscal 2019, our fiscal 2020 GAAP and non-GAAP operating income as a percentage of revenue increased approximately 20 basis points and approximately 30 basis points, respectively.

From a capital allocation standpoint, we returned $1.5 billion to our shareholders through share repurchases and dividends.

We continue to make progress on our Building the New Blue strategy and our purpose to enrich lives through technology.

Our strategy is to leverage our unique combination of tech and touch to meet every day human needs and build more and deeper relationships with customers.

We believe our strategy will translate to an economic model that delivers results by better serving existing customers, capturing new demand, entering new spaces and building capabilities while maintaining profitability over time.

During fiscal 2020 we continued to expand our Total Tech Support program, ending fiscal 2020 with almost 2.3 million members.

Having a service that provides members unlimited Geek Squad support for all their technology no matter where or when they bought it, is a compelling value proposition for our members.

We also expanded our In-Home Advisor program from 530 advisors to approximately 720 advisors and provided more than 250,000 free, in-home consultations to customers across the nation.

In Health, we continued to advance our initiatives designed to help seniors live longer in their homes with the help of technology.

We successfully integrated acquisitions that have given us the capabilities, infrastructure, talent and a base of customer relationships to build from.

We continued to elevate the customer experience around product fulfillment, enabled by the advancement of our supply chain transformation.

In parallel to the customer experience work, we continued to drive efficiencies and reduce costs in order to fund investments and offset pressures.

In addition to these accomplishments, we are proud of our progress in advancing our Corporate Social Responsibility and Sustainability efforts.

In fact, we were named to the top 5 on Barron’s annual “100 Most Sustainable Companies” list for the third consecutive year.

In September 2019, we set three fiscal 2025 targets focused on employees, customers and financials, which are:

to be one of the best companies to work for in the U.S., exemplified by being named to Fortune’s “100 Best Companies” to work for list;

to double the number of significant customer relationship events to 50 million, which includes Total Tech Support memberships, homes visited, active digital engagement, customers using our financial services offerings and senior lives supported; and

to deliver continued top- and bottom-line growth over time, specifically to get to $50 billion in revenue and a 5.0% non-GAAP operating income rate in fiscal 2025.

Looking to the future, our priorities will look to build upon our momentum and remain focused on achieving our fiscal 2025 targets.

We will continue to bring our deep consumer electronics expertise and ability to partner with vendors to commercialize their new technology, offering customers great products and solutions.

Our priorities will also include increasing our Total Tech Support member base, growing our Health business and continuing to expand our In-Home Advisor program.

We will also continue to innovate and design multi-channel experiences that solve customer needs across our website, app and other channels in ways that enhance the experience across online and physical shopping and continue with our supply chain transformation, including using automation and process improvements to expand fulfillment options, increase delivery speed and improve delivery and installation.

In addition, we have swapped [added: a portion of] our fixed-rate debt to floating-rate such that the interest expense on this debt will vary with short-term interest rates.

Refer to Note [removed: 5,] [added: 6,] *Derivative Instruments*, and Note [removed: 6,] [added: 8,] *Debt*, of the Notes to Consolidated Financial Statements, included in Item 8, [removed: *Financial Statements] [added: *Financial* *Statements] and Supplementary Data*, of this Annual Report on Form 10-K for further information regarding our interest rate swaps.

As of [removed: February 1, 2020,] [added: January 30, 2021,] we had [removed: $2.2] [added: $5.5] billion of cash and cash equivalents and [removed: $1.2 billion] [added: $500 million] of debt that has been swapped to floating rate, and therefore the net balance exposed to interest rate changes was [removed: $1.0] [added: $5.0] billion.

As of [removed: February 1, 2020,] [added: January 30, 2021,] a 50-basis point increase in short-term interest rates would have led to an estimated [removed: $5] [added: $25] million reduction in net interest expense, and conversely a 50-basis point decrease in short-term interest rates would have led to an estimated [removed: $5] [added: $25] million increase in net interest expense.

[added: Our primary objective in] holding derivatives is to reduce the volatility of net earnings and cash flows, as well as net asset value associated with changes in foreign currency exchange rates.

Refer to Note [removed: 5,] [added: 6,] *Derivative Instruments*, of the Notes to Consolidated Financial Statements, included in Item 8, *Financial Statements and Supplementary Data*, of this Annual Report on Form 10-K for further information regarding these instruments.

[removed: Foreign] [added: In fiscal 2021 foreign] currency exchange rate fluctuations were [removed: primarily] driven by the strength of the U.S. dollar compared to the [added: Mexican peso and the] Canadian dollar compared to the prior-year period, which had a negative overall impact on our revenue as [removed: our Canadian dollar revenue] [added: foreign currencies] translated into fewer U.S. dollars.

We estimate that foreign currency exchange rate fluctuations had a net unfavorable impact on our revenue of approximately [removed: $29] [added: $45] million and a net favorable impact on earnings of approximately [removed: $1] [added: $15] million in fiscal [removed: 2020.][added: 2021, excluding the reclassification of cumulative translation adjustments into earnings as a result of our exit from Mexico.]

In fiscal 2021 we entered into T-Lock contracts to hedge the base interest rate variability on a portion of our then-expected refinancing of our maturing 2021 Notes.

The T-Lock contracts were immaterial and cash settled upon issuance of our 2030 Notes in fiscal 2021.

The fair value of the T-Lock contracts upon settlement was released from Accumulated other comprehensive income on our Consolidated Balance Sheets and recorded in Interest expense on our Consolidated Statements of Earnings as interest is accrued over the life of the 2030 Notes.

The strength of the U.S. dollar compared to the Mexican peso also had a favorable impact on earnings as the operating loss in Mexican pesos translated into fewer U.S. dollars.

Our primary objective in

[Table of Contents](#TOC)

We do that by leveraging our combination of [removed: tech] [added: technology] and a human touch to meet our customers’ everyday needs, whether they come to us online, visit our stores or invite us into their homes.

The Domestic segment is comprised of the [removed: operations] [added: operations, including our Best Buy Health business,] in all states, districts and territories of the U.S. under various brand names including Best Buy, Best Buy Business, Best Buy Express, Best Buy Health, CST, Geek Squad, GreatCall, Lively, Magnolia and Pacific Kitchen and Home and the domain names bestbuy.com and greatcall.com.

[removed: On May 9, 2019,] [added: In fiscal 2020] we acquired all of the outstanding shares of Critical Signal Technologies, Inc. [removed: (“CST”), a health services company,] [added: (“CST”)] and [removed: on August 7, 2019, we acquired] the predictive healthcare technology business of BioSensics, LLC (“BioSensics”).

[removed: Additional information on these acquisitions is included in] [added: Refer to] Note 2, [removed: *Acquisitions*,] [added: *Restructuring*, and Note 3, *Acquisitions,*] of the Notes to Consolidated Financial Statements, included in Item 8, *Financial Statements and Supplementary Data*, of this Annual Report on Form [removed: 10-K.][added: 10-K for additional information.]

In addition, support capabilities (for example, human resources, [removed: finance] [added: finance, information technology] and real estate management) are generally performed at our corporate headquarters.

Our Canada and Mexico operations are similar to [removed: those] [added: operations] in our Domestic segment.

Computing and Mobile Phones - computing [added: (including desktops, notebooks] and [removed: peripherals, e-readers,] [added: peripherals),] mobile phones (including related mobile network carrier commissions), networking, tablets [added: (including e-readers)] and wearables (including smartwatches);

Entertainment - drones, gaming [removed: hardware] [added: (including hardware, peripherals] and [removed: software, peripherals,] [added: software),] movies, music, toys, virtual reality and other software;

Services - consultation, delivery, design, [added: health-related services,] installation, memberships, [removed: protection plans,] repair, set-up, technical support and [removed: health-related] [added: warranty-related] services; and

Other - beverages, snacks, sundry items and other product offerings within our International segment (including baby, [added: furniture,] luggage and sporting goods).

Customers who purchase [removed: products] [added: product] online have the choice to pick up product at a Best Buy store (including curbside pick-up [removed: in select] [added: at most] stores), at an alternative pick-up location or take delivery direct to their homes.

Most merchandise is shipped directly from manufacturers to our distribution centers located throughout the U.S. [removed: In order to meet release dates for certain products, merchandise may be shipped directly to our stores from suppliers.]

Our Canada and Mexico distribution models are similar to [removed: that of] our Domestic [removed: segment.][added: segment distribution models.]

In fiscal [removed: 2020,] [added: 2021] our 20 largest suppliers accounted for approximately [removed: 79%] [added: 80%] of the merchandise we purchased, with five suppliers – Apple, Samsung, Hewlett-Packard, [removed: Sony and] LG [added: and Sony] – representing approximately [removed: 56%] [added: 57%] of total merchandise purchased.

We also have a global sourcing operation to design, develop, test and contract-manufacture our exclusive [removed: brand] [added: brands] products.

We had [removed: 1,175] [added: 1,126] large-format and [removed: 56] [added: 33] small-format stores at the end of fiscal [removed: 2020] [added: 2021] throughout our Domestic and International segments.

We own or have the right to use valuable intellectual property such as trademarks, service marks and tradenames, including, but not limited to, *Best Buy, Best Buy [added: Essentials, Best Buy] Express, Best Buy Health, Best Buy Mobile, CST, Dynex, Geek Squad, GreatCall, Insignia, Jitterbug, Lively, Magnolia, Modal, My Best Buy, Pacific Kitchen and Home, Pacific Sales, Platinum, Rocketfish*, *5Star* and our *Yellow Tag* logo.

Some of our competitors have lower cost operating structures and seek to compete for sales primarily on [added: price.]

Environmental and Social [removed: Matters][added: Impact]

We strive to be a good corporate citizen in all [added: of] our interactions with stakeholders, including customers, employees, vendor partners, shareholders, the environment and communities in which we operate.

[removed: To accomplish this, we must maintain] [added: We believe in maintaining] a supportive and inclusive culture that values everyone’s talents, life experiences and [removed: backgrounds and offer compensation and benefits that maintain our competitiveness and reflect our values.][added: backgrounds.]

We are committed to supporting teens from [removed: underserved] [added: disinvested] communities [removed: as they build] [added: in building] brighter futures through technology, training and mentorship.

[removed: In fiscal 2020, we] [added: We also] made [removed: an] [added: our second] investment in [removed: partnership with U.S. Bank and X-Elio to build a] solar [removed: field] [added: energy] that is expected to produce [removed: 174,000] [added: 480,000] MWh of clean electricity per year.

We also [removed: set] [added: have] a [removed: new] goal to help our customers [removed: cut] [added: reduce] carbon emissions by 20 percent by 2030 [removed: through purchasing ENERGY STAR® certified products,] [added: (over a 2017 baseline),] which [added: we estimate] will save them $5 billion on utility [removed: bills.][added: bills by putting greater emphasis on ENERGY STAR® electronics, appliances and other energy-saving devices.]

In addition, we collected more than [removed: 204] [added: 161] million pounds of consumer electronics and appliances for recycling [removed: last year,] [added: in fiscal 2021,] bringing our total to more than [removed: 2.1] [added: 2] billion pounds.

At the end of fiscal [removed: 2020,] [added: 2021] we employed [removed: nearly 125,000 full-time, part-time and seasonal] [added: approximately 102,000] employees in the U.S., Canada and [removed: Mexico.][added: Mexico, comprised of approximately 60% full-time employees, 35% part-time employees and 5% seasonal/occasional employees.]

During the third quarter of fiscal 2021 we made the decision to exit our operations in Mexico and expect operations to cease during fiscal 2022.

In fiscal 2019 we acquired all of the outstanding shares of GreatCall, Inc. (“GreatCall”).

*Environmental*

In fiscal 2021 we signed The Climate Pledge, committing to be carbon neutral across our operations by 2040 – a decade earlier than our previous goal of 2050.

*Social Impact*

The primary way we do this is through our network of Best Buy Teen Tech Centers, places where teens can develop critical skills through hands-on activities that explore their interests in a variety of areas, such as software engineering, filmmaking, 3D design and music production.

Teens gain exposure to new career possibilities and benefit from positive adult and peer relationships.

Together with our partners, we are building a network of at least 100 Best Buy Teen Tech Centers, which we estimate will reach 30,000 teens annually.

We accelerated our progress towards this goal by making a $40 million donation to the Best Buy Foundation in the third quarter of fiscal 2021.

We are currently serving teens at 35 Best Buy Teen Tech Centers.

In fiscal 2021 we committed to provide $44 million by 2025 to expand college preparation and career opportunities for Black, Indigenous and People of Color (“BIPOC”) students, including adding 16 scholarships for Historically Black Colleges and Universities students and increasing scholarship funding for Best Buy Teen Tech Center youth.

We are a founding member of ConnectedMN, a public-private partnership helping disinvested communities across the state of Minnesota get access to the Internet and devices to facilitate distance learning as well as critical support services.

We are also committed to respecting and advancing human rights through our alignment with the United Nations Guiding Principles on Business and Human Rights.

Further, across all of the products and services we procure, we seek to mitigate risk, enhance the partnership with our suppliers and create value for all stakeholders through our Responsible Supply Chain Program.

We are active members of the Responsible Business Alliance, which allows us to partner with many of the brands we sell, including Apple, Intel, Microsoft and Samsung.

Collectively, we embrace a common Supplier Code of Conduct and audit methodology that creates business value by improving working and environmental conditions in the supply chain.

For more information on our environmental and social impact, please see our annual Environmental, Social & Governance Report, found on our website at *www.investors.bestbuy.com*.

Human Capital Management

We aim to attract, retain and develop the best employees.

*Training and Development*

Investing in our employees’ learning and development is a priority at Best Buy.

Our learning and development experience combines instructor-led classes and interactive online modules, along with one-on-one mentoring and coaching.

In fiscal 2021 our employees each received an average of 40 hours of training and we successfully transitioned all meetings and events to virtual environments due to COVID-19 restrictions.

*Inclusion and Diversity*

In fiscal 2021 we committed to making systemic, permanent changes that address social injustices to improve our company and our communities.

We are proud of the diversity within our Board of Directors, comprised of 45% female directors and 36% of directors who are People of Color as of March 18, 2021.

We are committed to filling one out of three new, non-hourly corporate positions with BIPOC (specifically Black, Latinx and Indigenous) employees.

We are also committed to filling one out of three new, non-hourly field roles with women.

In the next two years, our Digital and Technology team committed to hiring 1,000 new employees, of which we commit 30% will be BIPOC or female employees.

We are focused on taking steps to foster inclusion among all employee groups to create parity in retention rates, including transforming the composition of our senior leadership teams to be more in line with our Board of Directors.

*Benefits*

We are committed to taking care of our employees and rewarding them for their hard work and dedication through a competitive rewards package of pay, benefits, discounts and opportunities.

Our benefits package focuses on total employee well-being: physical, mental, financial and social.

In fiscal 2021 we increased the starting hourly wage for all domestic employees to $15 per hour.

And, to improve on pay predictability, a 4% increase in hourly rate replaced short-term incentive compensation for hourly store employees below the leadership level.

In support of the changing lives of our employees due to COVID-19, we enhanced our employee benefits package to include 100% coverage of COVID-related health care expenses, expanded caregiver leave, additional support for backup childcare, tutoring reimbursement and access to physical and mental health virtual visits.

*Safety*

In March 2020, the World Health Organization declared the outbreak of novel coronavirus disease ("COVID-19") as a pandemic.

In response to the pandemic, the safety of our employees and customers became a top priority.

We proactively closed stores at the beginning of the pandemic and then implemented a contactless, curbside-only operating model, and we continue to offer curbside pick-up at most stores today.

[Table of Contents](#TOC)

price.

Best Buy is an organization built on values-driven leadership and a clear purpose to enrich lives through technology.

For our business to succeed, we need to hire and retain the best employees.

We recently added two new benefit offerings: surrogacy assistance and increased adoption expense reimbursement.

They were the latest in a suite of expanded benefits, based on employee feedback, that included paid caregiver leave, paid time off for part-time employees and expanded mental health resources.

Best Buy has also continued to publicly show commitment to equality and non-discrimination.

We joined the Human Rights Campaign and 160 leading U.S. companies to support the Equality Act, federal legislation that would add protections for lesbian, gay, bisexual, transgender and queer (LGBTQ) people to U.S. civil rights laws.

We also signed an amicus brief with the U.S. Supreme Court to show support for Deferred Action for Childhood Arrivals (DACA) recipients.

The primary way we do this is through our network of Best Buy Teen Tech Centers.

The centers are safe, after-school learning spaces equipped with cutting-edge technology where youth learn new tech skills, stay on track with school, gain exposure to new career possibilities and benefit from positive adult and peer relationships.

We had 33 Teen Tech Centers operating at the end of fiscal 2020 and plan to have at least 60 operating over the next few years.

We continue to earn recognition from prestigious organizations, including being named to CDP’s Climate A List and ranking among *Barron’s* Most Sustainable Companies.

Please refer to the Corporate Responsibility and Sustainability section on our website for further information on environmental and social performance.

Number of Employees

We offer our employees a wide array of company-paid benefits that vary within our company due to customary local practices and statutory requirements, which we believe are competitive locally and in the aggregate relative to others in our industry.

For the fiscal year ended [removed: February 1, 2020][added: January 30, 2021]

][added: 3](https://www.sec.gov/Archives/edgar/data/764478/000076447821000024/bby-20210130x10kg001.jpg)]

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes [removed:  No]  [added: No ]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes [removed:  No]  [added: No ]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of [removed: August 2, 2019,] [added: July 31, 2020,] was approximately [removed: $13.9] [added: $20.0] billion, computed by reference to the price of [removed: $68.53] [added: $99.59] per share, the price at which the common equity was last sold on [removed: August 2, 2019,] [added: July 31, 2020,] as reported on the New York Stock Exchange-Composite Index.

As of March 18, [removed: 2020,] [added: 2021,] the registrant had [removed: 256,971,220] [added: 250,044,876] shares of its common stock, $0.10 par value per share, issued and outstanding.

Portions of the registrant's Definitive Proxy Statement relating to its [removed: 2020] [added: 2021] Regular Meeting of Shareholders ("Proxy Statement") are incorporated by reference into Part III.

BEST BUY FISCAL [removed: 2020] [added: 2021] FORM 10-K

| [Item 1A.](#Item1ARiskFactors) | [Risk Factors.](#Item1ARiskFactors) | [removed: 7] [added: 8] |

| [Item 1B.](#Item1BUnresolvedStaffComments) | [Unresolved Staff Comments.](#Item1BUnresolvedStaffComments) | [removed: 15] [added: 17] |

| [Item 2.](#Item2Properties) | [Properties.](#Item2Properties) | [removed: 16] [added: 18] |

| [Item 3.](#Item3LegalProceedings) | [Legal Proceedings.](#Item3LegalProceedings) | [removed: 18] [added: 19] |

| [Item 4.](#Item4MineSafetyDisclosures) | [Mine Safety Disclosures.](#Item4MineSafetyDisclosures) | [removed: 18] [added: 19] |

| | [Information about our Executive Officers](#ExecutiveOfficersoftheRegistrant) | [removed: 18] [added: 19] |

| [PART II](#PartII) | | [removed: 20] [added: 21] |

| [Item 5.](#Item5) | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](#Item5) | [removed: 20] [added: 21] |

| [Item [removed: 6.](#Item6)] [added: 6](#Item6).] | [Selected Financial Data.](#Item6) | [removed: 22] [added: 23] |

| [Item 7.](#Item7) | [Management's Discussion and Analysis of Financial Condition and Results of Operations.](#Item7) | [removed: 22] [added: 23] |

| [Item 7A.](#Item7A) | [Quantitative and Qualitative Disclosures About Market Risk.](#Item7A) | [removed: 34] [added: 35] |

| [Item 8.](#Item8) | [Financial Statements and Supplementary Data.](#Item8) | [removed: 36] [added: 37] |

| [Item 9.](#Item9) | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.](#Item9) | [removed: 67] [added: 68] |

| [Item 9A.](#Item9A) | [Controls and Procedures.](#Item9A) | [removed: 67] [added: 68] |

| [Item 12.](#Item12) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](#Item12) | [removed: 68] [added: 69] |

| [Item 13.](#Item13) | [Certain Relationships and Related Transactions, and Director Independence.](#Item13) | [removed: 68] [added: 69] |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

[Table of Contents](#TOC)

[Table of Contents](#TOC)

The location and total square footage of our Domestic segment stores [removed: and outlet centers] at the end of fiscal [removed: 2020] [added: 2021] were as follows:

[removed: | | U.S. Best Buy Stores | | | | U.S.] [added: (1)Includes 14] Best [removed: Buy Outlet Centers | | | | Pacific Sales Stores | | |][added: Buy Outlet Centers and 21 Pacific Sales store locations.]

| Alabama | | 11 | | | [removed: | \- | |] [added: Nebraska] | | [removed: \-] [added: 5] | |

| Alaska | | 2 | | | [removed: | \- | |] [added: Nevada] | | [removed: \-] [added: 9] | |

| District of Columbia | | 1 | | | [removed: | \- | |] [added: Ohio] | | [removed: \-] [added: 33] | |

| Florida | | 63 | | | [removed: | 1 | |] [added: Oklahoma] | | [removed: \-] [added: 12] | |

| Georgia | | [removed: 28 | | |] [added: 29] | [removed: 1] | | [added: Oregon] | | [removed: \-] [added: 11] | |

| Hawaii | | 2 | | | [removed: | \- | |] [added: Pennsylvania] | | [removed: \-] [added: 34] | |

| Kansas | | 7 | | | [removed: | \- | |] [added: Tennessee] | | [removed: \-] [added: 14] | |

| Louisiana | | 15 | | | [removed: | \- | |] [added: Utah] | | [removed: \-] [added: 11] | |

| Maine | | 3 | | | [removed: | \- | |] [added: Vermont] | | [removed: \-] [added: 1] | |

| Maryland | | [removed: 21 | | |] [added: 22] | [removed: 1] | | [added: Virginia] | | [removed: \-] [added: 32] | |

| Massachusetts | | 22 | | | [removed: | \- | |] [added: Washington] | | [removed: \-] [added: 20] | |

| Minnesota | | [removed: 18 | | |] [added: 19] | [removed: 1] | | [added: Wisconsin] | | [removed: \-] [added: 20] | |

| Mississippi | | 8 | | | [removed: | \- | |] [added: Wyoming] | | [removed: \-] [added: 1] | |

| [removed: New Hampshire | | 6 |] [added: Arizona] | | [added: 22] | [removed: \-] | | [added: New Hampshire] | | [removed: \-] [added: 6] | |

| [removed: New Jersey | | 24 |] [added: Arkansas] | | [added: 7] | [removed: \-] | | [added: New Jersey] | | [removed: \-] [added: 25] | |

| [removed: New Mexico | | 5 |] [added: California] | | [added: 137] | [removed: \-] | | [added: New Mexico] | | [removed: \-] [added: 5] | |

| [removed: New York | | 52 |] [added: Colorado] | | [added: 22] | [removed: \-] | | [added: New York] | | [removed: \-] [added: 50] | |

| [removed: North Carolina | | 31 |] [added: Connecticut] | | [added: 12] | [removed: \-] | | [added: North Carolina] | | [removed: \-] [added: 30] | |

| [removed: North Dakota | | 4 |] [added: Delaware] | | [added: 3] | [removed: \-] | | [added: North Dakota] | | [removed: \-] [added: 4] | |

| [removed: Puerto Rico | | 3 |] [added: Idaho] | | [added: 5] | [removed: \-] | | [added: Puerto Rico] | | [removed: \-] [added: 2] | |

| [removed: Rhode Island | | 1 |] [added: Illinois] | | [added: 42] | [removed: \-] | | [added: Rhode Island] | | [removed: \-] [added: 1] | |

| [removed: South Carolina | | 13 |] [added: Indiana] | | [added: 22] | [removed: \-] | | [added: South Carolina] | | [removed: \-] [added: 13] | |

| [removed: South Dakota | | 2 |] [added: Iowa] | | [added: 10] | [removed: \-] | | [added: South Dakota] | | [removed: \-] [added: 2] | |

| [removed: West Virginia | | 5 |] [added: Michigan] | | [added: 29] | [removed: \-] | | [added: West Virginia] | | [removed: \-] [added: 5] | |

| [removed: Total Domestic store count | | 977 |] [added: Missouri] | | [added: 18] | [removed: 11] | | [added: Total Domestic store count] | | [removed: 21] [added: 991] | |

| Square footage (in thousands) | | [removed: 37,894 | | | | 356 | | | | 571] [added: 3,754] | |

The ownership status of our [removed: Domestic segment] stores [removed: and outlet centers] at the end of fiscal [removed: 2020] [added: 2021] was as follows:

| [removed: Owned store locations] | | [removed: 24] | | | [added: Leased Locations] | [removed: \-] | | | [added: Owned Locations] | [removed: \-] | |

| [removed: Owned buildings and leased land] | [added: Leased Locations] | [removed: 35] | | | [added: Owned Locations] | [removed: \-] | | | [added: Owned Buildings and Leased Land] | [removed: \-] | |

The [removed: location,] ownership status and total square footage of space utilized for distribution [removed: centers, service centers, care centers, corporate and field offices of our Domestic segment] [added: centers] at the end of fiscal [removed: 2020] [added: 2021] were as follows:

The location and total square footage of our International segment stores at the end of fiscal [removed: 2020] [added: 2021] were as follows:

[removed: | | Best Buy‎ Stores | | | Best Buy‎Mobile Stores | | | Best Buy‎Express Stores | |][added: (1)Includes 33 Best Buy Mobile stores.]

| [removed: Canada] | [removed: | | | | |] [added: Canada Stores(1)] | | |

| Alberta | [removed: 18] | [removed: | | 8 | | | \-] [added: 25] | |

| British Columbia | [removed: 22] | [removed: | | 7 | | | \-] [added: 27] | |

| Manitoba | [removed: 4] | [removed: | | \- | | | \-] [added: 4] | |

| New Brunswick | [removed: 3] | [removed: | | \- | | | \-] [added: 3] | |

| Newfoundland | [removed: 1] | [removed: | | \- | | | \-] [added: 1] | |

Domestic Stores

| | U.S. Stores(1) | | | | | U.S. Stores(1) | | |

| Kentucky | | 9 | | | Texas | | 100 | |

International Stores

| | | | |

| --- | --- | --- | --- |

| | | | |

| | | | |

| Ciudad de Mexico | | 2 | |

| | | | |

Ownership and Leased Locations

| Domestic | | 934 | | | | 24 | | | | 33 | |

| International | | 165 | | | | 3 | | | | \- | |

Distribution Centers

| Domestic | | | | | | 10,426 | | | | 3,168 | |

| International | | | | | | 1,496 | | | | \- | |

Other Properties

We own our corporate headquarters buildings located in Richfield, Minnesota.

We also lease additional domestic and international office space to support and carry out our business operations.

Stores, Distribution Centers, Service Centers and Corporate Facilities

Domestic Segment

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Arizona | | 22 | | | | \- | | | | \- | |

| Arkansas | | 8 | | | | \- | | | | \- | |

| California | | 115 | | | | 2 | | | | 21 | |

| Colorado | | 21 | | | | \- | | | | \- | |

| Connecticut | | 12 | | | | \- | | | | \- | |

| Delaware | | 3 | | | | \- | | | | \- | |

| Idaho | | 5 | | | | \- | | | | \- | |

| Illinois | | 42 | | | | 1 | | | | \- | |

| Indiana | | 22 | | | | \- | | | | \- | |

| Iowa | | 10 | | | | \- | | | | \- | |

| Kentucky | | 9 | | | | \- | | | | \- | |

| Michigan | | 31 | | | | \- | | | | \- | |

| Missouri | | 18 | | | | 1 | | | | \- | |

| Montana | | 3 | | | | \- | | | | \- | |

| Nebraska | | 5 | | | | \- | | | | \- | |

| Nevada | | 9 | | | | \- | | | | \- | |

| Ohio | | 35 | | | | \- | | | | \- | |

| Oklahoma | | 13 | | | | \- | | | | \- | |

| Oregon | | 11 | | | | \- | | | | \- | |

| Pennsylvania | | 34 | | | | \- | | | | \- | |

| Tennessee | | 15 | | | | \- | | | | \- | |

| Texas | | 101 | | | | 2 | | | | \- | |

| Utah | | 11 | | | | \- | | | | \- | |

| Vermont | | 1 | | | | \- | | | | \- | |

| Virginia | | 33 | | | | \- | | | | \- | |

| Washington | | 19 | | | | 1 | | | | \- | |

| Wisconsin | | 21 | | | | \- | | | | \- | |

| Wyoming | | 1 | | | | \- | | | | \- | |

| Average square feet per store (in thousands) | | 39 | | | | 32 | | | | 27 | |

[Table of Contents](#TOC)

| | U.S. Best Buy | | | | U.S. Best Buy | | | | Pacific Sales | | |

| | Stores | | | | Outlet Centers | | | | Stores | | |

| Leased store locations | | 918 | | | | 11 | | | | 21 | |

| | Location | | | | Leased | | | | Owned | | |

| Distribution centers | 24 locations in 18 states | | | | | 10,734 | | | | 2,448 | |

| Geek Squad service center(1) | Louisville, Kentucky | | | | | 237 | | | | \- | |

| Corie S. Barry | | [removed: 45] [added: 46] | | Chief Executive Officer | | | [removed: 20] [added: 21] | |

| Matt Bilunas | | [removed: 47] [added: 48] | | Chief Financial Officer | | | [removed: 14] [added: 15] | |

| Matt Furman | | [removed: 49] [added: 50] | | Chief Communications and Public Affairs Officer | | | [removed: 8] [added: 9] | |

| Todd G. Hartman | | [removed: 53] [added: 54] | | General Counsel and Chief Risk and Compliance Officer | | | [removed: 14] [added: 15] | |

| R. Michael (Mike) Mohan | | [removed: 52] [added: 53] | | President and Chief Operating Officer | | | [removed: 16] [added: 17] | |

| [removed: Asheesh Saksena] [added: Deborah DiSanzo] | | [removed: 55] [added: 61] | | President, Best Buy Health | | | [removed: 4] [added: 0.5] | |

| Kamy Scarlett | | [removed: 56] [added: 57] | | Chief Human Resources Officer | | | [removed: 6] [added: 7] | |

| Brian Tilzer | | [removed: 49] [added: 50] | | Chief Digital and Technology Officer | | | [removed: 2] [added: 3] | |

| Mathew R. Watson | | [removed: 49] [added: 50] | | Senior Vice President, Controller and Chief Accounting Officer | | | [removed: 14] [added: 15] | |

Prior to her current role, she served as chief financial officer [removed: &] [added: and] chief strategic transformation officer responsible for overseeing all aspects of strategic transformation and growth, digital and technology, global finance, investor relations, enterprise risk and compliance, integration [removed: management] [added: management,] and Best Buy Health, which includes GreatCall.

Her prior roles include: the company’s chief strategic growth officer and the interim leader of Best Buy’s services organization from 2015 [removed: until] [added: to] 2016; senior vice president of domestic finance from 2013 to 2015; vice president, chief financial officer and business development of our home business group from 2012 to 2013; and vice president, finance of the home customer solutions group from 2010 to 2012.

He [removed: is] also [removed: charged with growing Best Buy’s] [added: leads the company’s] enterprise data and analytics capability.

In this role, he is responsible for overseeing all aspects of global finance and strategic planning, as well as audit, procurement and [removed: pricing functions.][added: financial services.]

Prior to becoming CFO, he was senior vice president of enterprise and merchandise finance since April 2017; vice president, finance for category, e-commerce and marketing from 2015 to 2017; and vice president, category finance from [removed: 2013 until 2014.][added: 2014 to 2015.]

He is a member of the board of directors for [removed: the Best Buy Foundation,] Dunwoody College of Technology and YMCA of the USA.

Prior to joining Best Buy, Mr. Hartman was a partner at [removed: the] Minneapolis law firm Robins Kaplan.

His responsibilities include oversight over all customer channels for Best Buy’s domestic [removed: business,] [added: business] including retail, [removed: e-commerce] [added: ecommerce] and customer experience, services, home, and Best Buy [removed: Business.][added: Direct.]

In addition, he leads category management, merchandising, marketing, supply [removed: chain,] [added: chain] and real estate for Best Buy’s core U.S. business.

Prior to his current role, he served as chief operating officer, [added: Best Buy] U.S. from [removed: September] 2018 [removed: until June] [added: to] 2019; senior executive vice president and chief merchandising and marketing officer from 2017 [removed: until September] [added: to] 2018; chief merchandising officer from 2014 to 2017; [removed: president, home from 2013 to 2014; senior vice president, general manager - home business group from 2011 to 2013; senior vice president, home theatre from 2008 to 2011;] and [removed: vice] president, home [removed: entertainment] from [removed: 2006] [added: 2013] to [removed: 2008.][added: 2014.]

[removed: Mr. Saksena] [added: She also] leads the incubation, strategy and corporate development teams focused on [added: scaling] health initiatives at Best Buy.

[removed: That] [added: Her oversight of Best Buy Health] includes GreatCall, a leading provider of connected health and personal emergency response services to the aging population, which Best Buy acquired in [removed: October] 2018.

In this role, she oversees talent development and the health and well-being of [removed: nearly 125,000] [added: the more than 100,000] Best Buy employees worldwide.

[removed: In addition to these responsibilities, she] [added: She] also served as our [removed: president,] [added: President,] U.S. [removed: retail stores] [added: Retail Stores] from January 2019 until [removed: February 2020] [added: January 2020,] and [removed: oversaw] [added: was responsible for] the execution and operation of all domestic Best Buy store locations.

[removed: Most recently, she was] [added: Ms. Scarlett joined Best Buy in 2014 as] senior vice president of retail and chief human resources officer for Best Buy [removed: Canada from 2014 to] [added: Canada, serving in that role until] May 2017.

She also previously held leadership roles at Loblaw Cos., Hudson’s Bay Co. and Dylex Inc. Ms. Scarlett serves on the [removed: board] [added: boards] of directors of [added: Floor & Decor, a specialty retailer, and the] Greater MSP.

In this role, he is responsible for all aspects of information technology and digital at Best Buy to create a seamless and superior [removed: multichannel] [added: multi-channel] customer experience in support of the company’s [removed: growth] strategy.

[added: With more than 25 years of experience in strategic business development,] operations and information technology, Mr. Tilzer has deep expertise in understanding, defining and delivering the technology necessary to provide a superior customer experience in a [removed: multichannel] [added: multi-channel] environment.

[removed: Prior to joining Best Buy, he served as chief digital officer at CVS Health, the largest pharmacy health care provider in the U.S.] He also has served as senior vice president of e-commerce for Staples and senior vice president of strategy and business development for Linens ’n Things.

Mr. Tilzer serves on the board of directors for Signet Jewelers, the largest retail jewelry chain in the U.S., Canada and [removed: the] United Kingdom.

Prior to joining [removed: Best Buy] [added: us] in 2005, Mr. Watson worked at KPMG, a professional audit, advisory and tax firm, from 1995 to 2005.

(As of March 18, 2021)

| Allison Peterson | | 46 | | Chief Customer Officer | | | 17 | |

Deborah DiSanzo joined Best Buy as our President, Best Buy Health in August 2020.

In this role she is responsible for the company’s health strategy, with a particular focus on bringing health technology into the home to help people live better, safer and more independent lives.

Prior to Best Buy, Ms. DiSanzo served as an instructor at the Harvard T.H. Chan School of Public Health from 2018 to 2020.

Prior to that, she led the IBM Watson Health team from 2015 to 2018, launching artificial intelligence offerings designed to help doctors, researchers, health care providers, pharmacists and insurers better serve patients around the world.

Ms. DiSanzo was CEO of Philips Healthcare from 2001 to 2014, where she and her team brought consumer-grade, automatic defibrillators to the market, making them first available in public places then, ultimately, in the homes of Americans across the country.

Ms. DiSanzo continues to teach at the Harvard T.H. Chan School of Public Health and serves on the boards of AstraZeneca, Novanta Inc. and Project Hope.

His other roles within the company include various leadership positions within merchandising.

Allison Peterson is our Chief Customer Officer, appointed in May 2020.

She is responsible for the holistic enterprise and customer strategy, including the development of innovative business initiatives, value propositions and experiences that create meaningful differentiation and brand love.

Ms. Peterson leads the company’s broader enterprise strategy, planning and corporate development and membership offerings.

Prior to her current role, she served as the company’s chief marketing officer from 2019 to 2020 and was president of e-commerce from 2017 to 2019.

Since joining Best Buy in 2004, Ms. Peterson has held several leadership roles within marketing and e-commerce, including from 2015 to 2017 as vice president of category marketing and vice president of brand strategy from 2014 to 2015.

In these roles she has been integral in defining the marketing strategy for the company and leading the shift from traditional to digital marketing.

Prior to joining Best Buy she worked for Target Corp. in merchandising and demand planning.

Ms. Peterson serves on the executive committee of the board of directors for the Children’s Theatre Company of Minneapolis.

Prior to joining Best Buy, he served as chief digital officer from 2013 to 2018 at CVS Health.

(As of March 18, 2020)

| Whit Alexander | | 41 | | Chief Transformation, Innovation and Membership Officer | | | 5 | |

Whit Alexander was appointed our Chief Transformation, Innovation and Membership Officer in December 2019.

In this role, he is responsible for maintaining the strategic plan and building new offerings and capabilities to deliver the company’s goals.

Mr. Alexander oversees Best Buy’s membership offerings, including financial services, the My Best Buy loyalty program and Total Tech Support.

He previously served as chief marketing officer from 2017 to 2018, leading the company’s marketing and financial services functions, and as senior vice president, personalization, loyalty &

[Table of Contents](#TOC)

strategy from 2015 to 2017.

Prior to joining Best Buy in 2015, Whit was with Target Corp. from 2012 to 2015.

Before that, he was a partner at McKinsey & Co. He serves on the board of directors for the YMCA of the Greater Twin Cities and the board of overseers for the Carlson School of Management.

Mr. Bilunas serves on the board of directors for the Children’s Hospital of Minnesota.

Asheesh Saksena was appointed our President, Best Buy Health in 2018.

In this role, he leads the company’s efforts to refine and implement our health strategy, with particular focus on ways to use technology and our in-home capabilities to help seniors live independently in their homes and provide peace of mind to the millions of people caring for aging relatives.

A highly strategic leader with more than 20 years of experience in creating and leading strategic growth, Mr. Saksena joined Best Buy in June 2016 as our chief strategic growth officer.

He previously served as the executive vice president of strategy and new business development from 2011 to 2016 at Cox Communications, one of the nation’s leading cable television providers.

Prior to that, he was the deputy chief strategy officer from 2008 until 2011 for Time Warner Cable.

He has also held leadership roles at Accenture and Tata Group.

Ms. Scarlett joined Best Buy in 2014.

With more than 25 years of experience in strategic business development,

On February [removed: 27, 2020,] [added: 25, 2021,] we announced an increase in our regular quarterly dividend from [removed: $0.50] [added: $0.55] per share to [removed: $0.55] [added: $0.70] per share.

As of March 18, [removed: 2020,] [added: 2021,] there were [removed: 2,167] [added: 2,081] holders of record of our common stock.

There is no expiration date governing the period over which we can repurchase shares under [removed: the February 2019] [added: this] authorization.

During fiscal [removed: 2020,] [added: 2021] we repurchased and retired [removed: 14.0] [added: 3.1] million shares at a cost of [removed: $1.0 billion.][added: $318 million.]

Between the end of fiscal [removed: 2020] [added: 2021] on [removed: February 1, 2020,] [added: January 30, 2021,] and March 18, [removed: 2020,] [added: 2021,] we repurchased an incremental [removed: 0.6] [added: 8.1] million shares of our common stock at a cost of [removed: $56] [added: $873] million.

The following table presents information regarding our repurchases of common stock during the fourth quarter of fiscal [removed: 2020:][added: 2021:]

(1)At the beginning of the fourth quarter of fiscal [removed: 2020,] [added: 2021,] there was [removed: $2.3] [added: $1.9] billion available for share repurchases under our February 2019 $3.0 billion share repurchase program.

The "Approximate Value of Shares that May Yet Be Purchased Under the Program" column reflects the [removed: $302] [added: $262] million we purchased in the fourth quarter of fiscal [removed: 2020] [added: 2021] pursuant to such program.

For additional information, see Note [removed: 7,] [added: 9,] *Shareholders' Equity*, of the Notes to the Consolidated Financial Statements included in Item 8, *Financial Statements and Supplementary Data*, of this Annual Report on Form 10-K.

The graph assumes an investment of $100 at the close of trading on January [removed: 31, 2015,] [added: 30, 2016,] the last trading day of fiscal [removed: 2015,] [added: 2016,] in our common stock, the S&P 500 and the S&P Retailing Group.

][added: 1](https://www.sec.gov/Archives/edgar/data/764478/000076447821000024/bby-20210130x10kg002.jpg)]

| Fiscal Years Ended | January [removed: 31, 2015 | | | | January] 30, 2016 | | | | January 28, 2017 | | | | February 3, 2018 | | | | February 2, 2019 | | | | February 1, 2020 | | | | [added: January 30, 2021 | | |]

On February 16, 2021, our Board approved a new $5.0 billion share repurchase program, replacing the existing program, which had $1.7 billion remaining available for repurchases as of January 30, 2021.

We temporarily suspended all share repurchases from March to November of fiscal 2021 to conserve liquidity in light of COVID-19-related uncertainties.

On February 25, 2021, we announced our plans to spend at least $2 billion on share repurchases in fiscal 2022.

| Nov. 1, 2020 through Nov. 28, 2020 | 103,308 | | | $ | 113.88 | | | 103,308 | | | $ | 1,923,000,000 | |

| Nov. 29, 2020 through Jan. 2, 2021 | 1,316,868 | | | $ | 103.45 | | | 1,316,868 | | | $ | 1,787,000,000 | |

| Jan. 3, 2021 through Jan. 30, 2021 | 1,029,350 | | | $ | 110.76 | | | 1,029,350 | | | $ | 1,673,000,000 | |

| Total fiscal 2021 fourth quarter | 2,449,526 | | | $ | 106.96 | | | 2,449,526 | | | $ | 1,673,000,000 | |

Share repurchases prior to February 16, 2021, will be made under our February 2019 $3.0 billion share repurchase program and thereafter will be made under our February 2021 $5.0 billion share repurchase program.

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Best Buy Co., Inc. | $ | 100.00 | | | $ | 162.91 | | | $ | 273.68 | | | $ | 230.58 | | | $ | 343.49 | | | $ | 453.59 | |

| S&P 500 | $ | 100.00 | | | $ | 120.04 | | | $ | 151.74 | | | $ | 148.23 | | | $ | 180.37 | | | $ | 211.48 | |

| S&P Retailing Group | $ | 100.00 | | | $ | 120.09 | | | $ | 174.49 | | | $ | 186.29 | | | $ | 219.46 | | | $ | 316.05 | |

Item 6.

Selected Financial Data.

The following table presents our selected financial data.

The table should be read in conjunction with Item 7, *Management's Discussion and Analysis of Financial Condition and Results of Operations*, and Item 8, *Financial Statements and Supplementary Data*, of this Annual Report on Form 10-K.

Five-Year Financial Highlights

*$ in millions, except per share amounts*

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | |

| Fiscal Year | | 2021 | | | | 2020(1) | | | | 2019 | | | | 2018(2) | | | | 2017 | | |

| Consolidated Statements of Earnings Data | | | | | | | | | | | | | | | | | | | | |

| Revenue | | $ | 47,262 | | | $ | 43,638 | | | $ | 42,879 | | | $ | 42,151 | | | $ | 39,403 | |

| Operating income | | $ | 2,391 | | | $ | 2,009 | | | $ | 1,900 | | | $ | 1,843 | | | $ | 1,854 | |

| Net earnings from continuing operations | | $ | 1,798 | | | $ | 1,541 | | | $ | 1,464 | | | $ | 999 | | | $ | 1,207 | |

| Gain from discontinued operations | | $ | \- | | | $ | \- | | | $ | \- | | | $ | 1 | | | $ | 21 | |

| Net earnings | | $ | 1,798 | | | $ | 1,541 | | | $ | 1,464 | | | $ | 1,000 | | | $ | 1,228 | |

| Per Share Data | | | | | | | | | | | | | | | | | | | | |

| Diluted net earnings from continuing operations | | $ | 6.84 | | | $ | 5.75 | | | $ | 5.20 | | | $ | 3.26 | | | $ | 3.74 | |

| Net gain from discontinued operations | | $ | \- | | | $ | \- | | | $ | \- | | | $ | \- | | | $ | 0.07 | |

| Diluted net earnings | | $ | 6.84 | | | $ | 5.75 | | | $ | 5.20 | | | $ | 3.26 | | | $ | 3.81 | |

| Cash dividends declared and paid | | $ | 2.20 | | | $ | 2.00 | | | $ | 1.80 | | | $ | 1.36 | | | $ | 1.57 | |

| Operating Statistics | | | | | | | | | | | | | | | | | | | | |

| Comparable sales growth(3) | | | 9.7 | % | | | 2.1 | % | | | 4.8 | % | | | 5.6 | % | | | 0.3 | % |

| Gross profit rate | | | 22.4 | % | | | 23.0 | % | | | 23.2 | % | | | 23.4 | % | | | 24.0 | % |

| Selling, general and administrative expenses rate | | | 16.8 | % | | | 18.3 | % | | | 18.7 | % | | | 19.0 | % | | | 19.2 | % |

| Operating income rate | | | 5.1 | % | | | 4.6 | % | | | 4.4 | % | | | 4.4 | % | | | 4.7 | % |

We have since temporarily suspended all share repurchases.

| Nov. 3, 2019 through Nov. 30, 2019 | 1,234,653 | | | $ | 75.72 | | | 1,234,653 | | | $ | 2,200,000,000 | |

| Dec. 1, 2019 through Jan. 4, 2020 | 1,352,678 | | | $ | 84.90 | | | 1,352,678 | | | $ | 2,085,000,000 | |

| Jan. 5, 2020 through Feb. 1, 2020 | 1,058,587 | | | $ | 89.17 | | | 1,058,587 | | | $ | 1,991,000,000 | |

| Total fiscal 2020 fourth quarter | 3,645,918 | | | $ | 83.03 | | | 3,645,918 | | | $ | 1,991,000,000 | |

[Table of Contents](#TOC)

| | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Best Buy Co., Inc. | $ | 100 | | | $ | 82.44 | | | $ | 134.30 | | | $ | 225.62 | | | $ | 190.08 | | | $ | 283.16 | | |

| S&P 500 | | 100 | | | | 99.33 | | | | 119.24 | | | | 150.73 | | | | 147.24 | | | | 179.17 | | |

| S&P Retailing Group | | 100 | | | | 118.07 | | | | 140.38 | | | | 203.32 | | | | 216.05 | | | | 253.36 | | |

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of [removed: February 1, 2020,] [added: January 30, 2021,] using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in *Internal Control — Integrated Framework (2013).* Based on our assessment, we have concluded that our internal control over financial reporting was effective as of [removed: February 1, 2020.][added: January 30, 2021.]

Deloitte & Touche LLP, the independent registered public accounting firm that audited our consolidated financial statements for the year ended [removed: February 1, 2020,] [added: January 30, 2021,] included in Item 8, *Financial Statements and Supplementary Data,* of this Annual Report on Form 10-K, has issued an unqualified attestation report on our internal control over financial reporting as of [removed: February 1, 2020.][added: January 30, 2021.]

| | *(duly authorized and principal executive officer)* | | | | *(duly authorized and principal [removed: executive] [added: financial] officer)* | | | | |

We have audited the accompanying consolidated balance sheets of Best Buy Co., Inc. and subsidiaries (the "Company") as of [removed: February 1, 2020] [added: January 30, 2021] and February [removed: 2, 2019,] [added: 1, 2020,] the related consolidated statements of earnings, comprehensive income, cash flows, and changes in shareholders' equity for each of the three years in the period ended [removed: February 1, 2020,] [added: January 30, 2021,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of [removed: February 1, 2020] [added: January 30, 2021] and February [removed: 2, 2019,] [added: 1, 2020,] and the results of its operations and its cash flows for each of the three years in the period ended [removed: February 1, 2020,] [added: January 30, 2021,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of [removed: February 1, 2020,] [added: January 30, 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March [removed: 23, 2020,] [added: 19, 2021,] expressed an unqualified opinion on the Company's internal control over financial reporting.

[removed: Purchases-based vendor allowances] [added: Allowances based on purchases] are initially deferred and recorded as a reduction of merchandise inventory and are recognized as a reduction to cost of sales when the associated inventory is sold.

[removed: Sales-based vendor allowances] [added: Allowances based on sales volumes] are based on merchandise sold and are calculated using an agreed upon amount for each unit sold and recognized as a reduction to cost of sales when the associated inventory is sold.

Other promotional allowances not specifically related to volume of purchases or sales, such as advertising and [removed: in-store product] placement are recognized [removed: ratably] as a reduction to cost of sales [added: ratably] over the [added: corresponding] performance [removed: period as the product promotion or placement is completed.][added: period.]

We tested the amount of deferred vendor allowances recorded as a reduction to inventory by developing an expectation for the amount [removed: based on the historical amounts recorded as a percentage of vendor allowances earned] and comparing our expectation to the amount recorded by management.

The goodwill balance was [removed: $984] [added: $986] million as of [removed: February 1, 2020,] [added: January 30, 2021,] of which [removed: $541] [added: $542] million was related to the Best Buy Health reporting unit.

We inquired of operating and sales management teams to determine whether the judgments and assumptions used in the future revenue projections were consistent with the strategy and [removed: long- range] [added: long-range] plans for the Best Buy Health reporting unit.

We have audited the internal control over financial reporting of Best Buy Co., Inc. and subsidiaries (the “Company”) as of [removed: February 1, 2020,] [added: January 30, 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of [removed: February 1, 2020,] [added: January 30, 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended [removed: February 1, 2020,] [added: January 30, 2021,] of the Company and our report dated March [removed: 23, 2020,] [added: 19, 2021,] expressed an unqualified opinion on those financial [removed: statements and included an explanatory paragraph regarding the Company’s adoption of a new accounting standard.][added: statements.]

*$ [added: and shares] in millions, except per share [removed: and share] amounts*

| | [added: January 30, 2021 | | | |] February 1, 2020 | | | | February 2, 2019 | | |

| Cash and cash equivalents | $ | [added: 5,494 | | | $ |] 2,229 | | | $ | 1,980 | |

| Receivables, net | | [removed: 1,149] [added: 1,061] | | | | [removed: 1,015] [added: 1,149] | |

| Merchandise inventories | | [removed: 5,174] [added: 5,612] | | | | [removed: 5,409] [added: 5,174] | |

| Other current assets | | [removed: 305] [added: 373] | | | | [removed: 466] [added: 305] | |

| Total current assets | | [removed: 8,857] [added: 12,540] | | | | [removed: 8,870] [added: 8,857] | |

| Land and buildings | | [removed: 650] [added: 658] | | | | [removed: 637] [added: 650] | |

| Leasehold improvements | | [removed: 2,203] [added: 2,192] | | | | [removed: 2,119] [added: 2,203] | |

| Fixtures and equipment | | [removed: 6,286] [added: 6,333] | | | | [removed: 5,865] [added: 6,286] | |

| Property under finance leases | | [removed: 89] [added: 73] | | | | [removed: \-] [added: 89] | |

| Gross property and equipment | | [removed: 9,228] [added: 9,256] | | | | [removed: 9,200] [added: 9,228] | |

| Less accumulated depreciation | | [removed: 6,900] [added: 6,996] | | | | [removed: 6,690] [added: 6,900] | |

| [removed: Net] [added: Total] property and [removed: equipment] [added: equipment, net] | [added: $] | [added: 2,260 | | | $ |] 2,328 | | | [added: $] | 2,510 | |

| Operating lease assets | | [removed: 2,709] [added: 2,612] | | | | [removed: \-] [added: 2,709] | |

| Goodwill | | [removed: 984] [added: 986] | | | | [removed: 915] [added: 984] | |

| Other assets | | [removed: 713] [added: 669] | | | | [removed: 606] [added: 713] | |

| [removed: Total assets] [added: Total assets] | $ | [added: 19,067 | | | $ |] 15,591 | | | $ | 12,901 | |

| Accounts payable | $ | [removed: 5,288] [added: 6,979] | | | $ | [removed: 5,257] [added: 5,288] | |

| Unredeemed gift card liabilities | | [removed: 281] [added: 317] | | | | [removed: 290] [added: 281] | |

| Deferred revenue | | [removed: 501] [added: 711] | | | | [removed: 446] [added: 501] | |

| Accrued compensation and related expenses | | [removed: 410] [added: 725] | | | | [removed: 482] [added: 410] | |

| Accrued liabilities | | [removed: 906] [added: 972] | | | | [removed: 982] [added: 906] | |

| Current portion of operating lease liabilities | | [removed: 660] [added: 693] | | | | [removed: \-] [added: 660] | |

| Current portion of long-term debt | | 14 | | | | [removed: 56] [added: 14] | |

The Company changed its method of accounting for leases in fiscal year 2020 due to the adoption of Accounting Standards Update No. 2016-02 *Leases* (Topic 842).

March 19, 2021

| | January 30, 2021 | | | | February 1, 2020 | | |

| Short-term debt | | 110 | | | | \- | |

| Cash flow hedges | | (2) | | | | \- | | | | \- | |

| Reclassification of cumulative translation adjustments into earnings due to exit of business | | 39 | | | | \- | | | | \- | |

| Fiscal Years Ended | January 30, 2021 | | | | February 1, 2020 | | | | February 2, 2019 | |

| Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | |

| Cash flow hedges | \- | | | | \- | | | | \- | | | | \- | | | | (2) | | | | (2) | |

| Reclassification of cumulative translation adjustments into earnings due to exit of business | \- | | | | \- | | | | \- | | | | \- | | | | 39 | | | | 39 | |

| Repurchase of common stock | (3) | | | | \- | | | | (175) | | | | (143) | | | | \- | | | | (318) | |

| Balances as of January 30, 2021 | 257 | | | $ | 26 | | | $ | \- | | | $ | 4,233 | | | $ | 328 | | | $ | 4,587 | |

During the third quarter of fiscal 2021 we made the decision to exit our operations in Mexico.

COVID-19

Except where otherwise directed by state and local authorities, we made the decision for the health and safety of our customers and employees to move our stores to a contactless, curbside-only operating model in the fiscal first quarter.

We also temporarily suspended in-home delivery, repair and consultation services.

At the beginning of the fiscal second quarter, we started welcoming customers back into our stores by offering an in-store consultation service to customers, by appointment only.

On June 15, 2020, we began allowing customers to shop without an appointment at more than 800 stores across the U.S. As of June 22, 2020, almost all of our stores were open for shopping.

We continue to offer contactless curbside pick-up and in-store consultations for customers who prefer to shop that way.

In light of the uncertainty surrounding the impact of COVID-19 and to maximize liquidity, we executed a short-term draw on the full amount of our $1.25 billion five year senior unsecured revolving credit facility (the “Facility”) on March 19, 2020, that remained outstanding until July 27, 2020, when the amounts we had borrowed under the Facility were repaid in full.

In March 2020 we also announced the temporary suspension of all share repurchases which we resumed in November 2020.

In the first quarter of fiscal 2021 we concluded that the COVID-19 pandemic’s impact on our store operations was a triggering event to review for potential impairments of our store assets.

As a result of this analysis, we recorded an immaterial asset impairment charge for a small number of stores within Selling, general and administrative (“SG&A”) expenses.

We also completed a review for potential impairments of our goodwill in the first quarter of fiscal 2021, concluding that no impairment had occurred.

A similar conclusion was reached upon completion of our annual goodwill impairment review during the fourth quarter of fiscal 2021.

On March 27, 2020, in response to the COVID-19 pandemic, the U.S. Congress enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which among other things, contains provisions for deferral of the employer portion of social security taxes incurred through the end of calendar 2020 and an employee retention credit, a refundable payroll credit for 50% of wages and health benefits paid to employees not providing services due to the COVID-19 pandemic.

As a result of the CARES Act, we deferred $142 million of qualified payroll taxes in fiscal 2021 and claimed the employee retention credit, which was treated as a government subsidy to offset related operating expenses.

Based on our analysis of the CARES Act, we reduced our SG&A expenses in fiscal 2021 by $81 million for employee retention credits.

The COVID-19 pandemic remains an evolving situation.

The extent of the impact of COVID-19 on our business and financial results will depend on future developments, including the duration of the outbreak within the markets in which we operate and the related impact on consumer confidence and spending, all of which are highly uncertain.

Fiscal 2021, fiscal 2020 and fiscal 2019 included 52 weeks.

In the first quarter of fiscal 2021 we prospectively adopted the following Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board, all of which had an immaterial impact on our results of operations, cash flows and financial position.

ASU 2016-13, *Measurement of Credit Losses on Financial Instruments*

ASU 2017-04, *Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment*

| \- | | | | | | | | | | | |

Receivables are stated at their carrying values, net of a reserve for expected credit losses, which is primarily based on historical collection trends.

We had $88 million and $32 million of write-offs in fiscal 2021 and fiscal 2020, respectively.

We review these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets might not be recoverable and monitor for the existence of potential impairment indicators throughout the fiscal year.

We record an impairment loss for any portion of the carrying value that is not recoverable.

| | January 30, 2021 | | | | February 1, 2020 | | |

[Table of Contents](#TOC)

As discussed in Note 1 to the Company’s financial statements, the Company adopted Accounting Standards Update No. 2016-02 *Leases (Topic 842)* as of February 3, 2019.

March 23, 2020

| Property under capital and financing leases | | \- | | | | 579 | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gain from discontinued operations, net of $0 tax expense | | \- | | | | \- | | | | 1 | |

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balances at January 28, 2017 | 311 | | | $ | 31 | | | $ | \- | | | $ | 4,399 | | | $ | 279 | | | $ | 4,709 | |

| Adoption of ASU 2016-09 | \- | | | | \- | | | | 10 | | | | (12) | | | | \- | | | | (2) | |

| Repurchase of common stock | (35) | | | | (4) | | | | (299) | | | | (1,706) | | | | \- | | | | (2,009) | |

Discontinued Operations

Discontinued operations in fiscal 2018 reflects the proceeds attributed to a non-compete clause from the sale of Best Buy Europe to Carphone Warehouse plc.

Fiscal 2020 and fiscal 2019 included 52 weeks and fiscal 2018 included 53 weeks, with the additional week occurring in the fourth quarter.

In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-04, *Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment*, which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge.

Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on the current Step 1).

We do not believe the new guidance, which is effective for fiscal years beginning after December 15, 2019, will have a material impact on our consolidated financial statements.

The updated guidance improves the disclosure requirements for fair value measurements.

We do not believe the updated guidance, which is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, will have a material impact on our consolidated financial statements.

This guidance requires companies to apply the internal-use software guidance in Accounting Standards Codification (“ASC”) 350-40 to implementation costs incurred in a hosting arrangement that is a service contract to determine whether to capitalize certain implementation costs or expense them as incurred.

Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, *Leases*, which requires the recognition of operating lease assets and lease liabilities on the balance sheet.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

Under the new standard, disclosures are required to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

In the first quarter of fiscal 2020, we adopted ASU 2016-02 using the “Comparatives Under 840 Option” approach to transition.

Under this method, financial information related to periods prior to adoption were as originally reported under the previous standard – ASC 840, *Leases*.

The effects of adopting the new standard (ASC 842, *Leases*) in fiscal 2020 were recognized as a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal first quarter.

We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward the historical lease classification as operating or capital leases.

We also elected to combine lease and non-lease components and to exclude short-term leases from our Consolidated Balance Sheets.

We did not elect the hindsight practical expedient in determining the lease term for existing leases as of February 3, 2019.

The most significant impact of adoption was the recognition of operating lease assets and operating lease liabilities of $2.7 billion and $2.8 billion, respectively, while our accounting for existing capital leases (now referred to as finance leases) remained substantially unchanged.

The cumulative impact of these changes decreased retained earnings by $22 million, which included a $3 million net-of-tax adjustment made during the second quarter of fiscal 2020 related to on-adoption impairment charges.

We expect the impact of adoption to be immaterial to our consolidated statements of earnings and consolidated statements of cash flows on an ongoing basis.

As part of our adoption, we also modified our control procedures and processes, none of which materially affected our internal control over financial reporting.

See Note 10, *Leases*, for additional lease disclosures.

The cumulative effect of the changes made to our Consolidated Balance Sheets for the adoption of this standard was as follows ($ in millions):

| | | | | | | . | | | | |

| | February 2, 2019‎As Reported | | | | ASU 2016-02 Adjustment on February 3, 2019 | | | | February 3, 2019‎As Reported | |

| Other assets | | 606 | | | | 5 | (d) | | | 611 |

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the [removed: SEC's] [added: U.S. Securities and Exchange Commission’s ("SEC”)] rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act), as of [removed: February 1, 2020.][added: January 30, 2021.]

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of [removed: February 1, 2020,] [added: January 30, 2021,] our disclosure controls and procedures were effective.

There were no changes in internal control over financial reporting during the fiscal fourth quarter ended [removed: February 1, 2020,] [added: January 30, 2021,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

[Table of Contents](#TOC)

The information required by this Item is incorporated by reference to the applicable information in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Regular Meeting of Shareholders, which is expected to be filed with the SEC on or before May 31, [removed: 2020.][added: 2021.]

Our Code of Business Ethics is available on our [removed: website,] [added: website at] *www.investors.bestbuy.com*.

We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of our Code of Business Ethics that applies to our principal executive officer, principal financial officer or principal accounting officer by posting such information within two business days of any such amendment or waiver on our [removed: website,] [added: website at] *www.investors.bestbuy.com*.

The information required by this Item is incorporated by reference to the applicable information in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Regular Meeting of Shareholders, which is expected to be filed with the SEC on or before May 31, [removed: 2020.][added: 2021.]

Information about our common stock that may be issued under our equity compensation plans as of [removed: February 1, 2020,] [added: January 30, 2021,] was as follows:

(1)Includes grants of stock options and restricted stock units (which may be market-based, performance-based or time-based) awarded under our [removed: 2004 Omnibus Stock and Incentive Plan, as amended, and our 2014] [added: Best Buy Co., Inc.] Omnibus [added: 2020] Incentive Plan.

Includes [removed: 3,750,565] [added: 3,624,848] shares of our common stock which have been reserved for issuance under our 2008 and 2003 Employee Stock Purchase Plans.

The information required by this Item is incorporated by reference to the applicable information in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Regular Meeting of Shareholders, which is expected to be filed with the SEC on or before May 31, [removed: 2020.][added: 2021.]

| Equity compensation plans approved by security holders | 3,554,273 | | | $ | 57.83 | | | 25,928,855 | |

| Equity compensation plans approved by security holders | 4,360,967 | | | $ | 54.38 | | | 13,126,195 | |

The information required by this Item is incorporated by reference to the applicable information in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Regular Meeting of Shareholders, which is expected to be filed with the SEC on or before May 31, [removed: 2020.][added: 2021.]

[Table of Contents](#TOC)

The information required by this Item is incorporated by reference to the applicable information in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Regular Meeting of Shareholders, which is expected to be filed with the SEC on or before May 31, [removed: 2020.][added: 2021.]

| | | | | [removed: | | | |] Incorporated by Reference | | | | | | [removed: | | | | | | | |] [added: Filed] |

| Exhibit No. | | [removed: | |] Exhibit Description | | [removed: | |] Form | | [removed: | |] Exhibit | | [removed: | |] Filing Date | | [removed: | | Filed Herewith | |] [added: Herewith] |

| [removed: |] [2.1](https://www.sec.gov/Archives/edgar/data/764478/000076447813000021/exhibit2143013.htm) | | [removed: | |] [Implementation Agreement, dated April 29, 2013, by and among Best Buy Co., Inc. , Best Buy UK Holdings LP, Best Buy Distributions Limited, New BBED Limited and Carphone Warehouse Group, plc](https://www.sec.gov/Archives/edgar/data/764478/000076447813000021/exhibit2143013.htm) | | [removed: | |] 8-K | | [removed: | |] 2.1 | | [removed: | |] 4/30/2013 | | | [removed: | | |]

| [removed: | [3.1](https://www.sec.gov/Archives/edgar/data/764478/000104746909005458/a2192787zdef14a.htm) | |] [added: [3.1](https://www.sec.gov/Archives/edgar/data/764478/000076447820000040/bby-20200611xex3_1.htm)] | | [Amended and Restated Articles of [removed: Incorporation](https://www.sec.gov/Archives/edgar/data/764478/000104746909005458/a2192787zdef14a.htm) | | | | DEF 14A | | | | n/a |] [added: Incorporation](https://www.sec.gov/Archives/edgar/data/764478/000076447820000040/bby-20200611xex3_1.htm)] | | [added: 8-K] | [removed: 5/12/2009] | [added: 3.1] | | [added: 6/12/2020] | | |

| [removed: |] [3.2](https://www.sec.gov/Archives/edgar/data/764478/000076447818000029/exhibit3161418.htm) | | [removed: | |] [Amended and Restated By-Laws](https://www.sec.gov/Archives/edgar/data/764478/000076447818000029/exhibit3161418.htm) | | [removed: | |] 8-K | | [removed: | |] 3.1 | | [removed: | |] 6/14/2018 | | | [removed: | | |]

| [removed: |] [4.1](https://www.sec.gov/Archives/edgar/data/764478/000104746911001822/a2202436zex-4_1.htm) | | [removed: | |] [Form of Indenture, to be dated as of March 11, 2011, between Best Buy Co., Inc. and U.S. Bank National Association, as successor trustee](https://www.sec.gov/Archives/edgar/data/764478/000104746911001822/a2202436zex-4_1.htm) | | [removed: | |] S-3ASR | | [removed: | |] 4.1 | | [removed: | |] 3/8/2011 | | | [removed: | | |]

| [removed: |] [4.2](https://www.sec.gov/Archives/edgar/data/764478/000110465911013761/a11-7701_1ex4d2.htm) | | [removed: | |] [Form of First Supplemental Indenture, to be dated as of March 11, 2011, between Best Buy Co., Inc. and U.S. Bank National Association, as successor trustee](https://www.sec.gov/Archives/edgar/data/764478/000110465911013761/a11-7701_1ex4d2.htm) | | [removed: | |] 8-K | | [removed: | |] 4.2 | | [removed: | |] 3/11/2011 | | | [removed: | | |]

| [removed: |] [4.3](https://www.sec.gov/Archives/edgar/data/764478/000110465913054728/a13-16198_5ex4d1.htm) | | [removed: | |] [Second Supplement Indenture, dated as of July 16, 2013, to the Indenture dated as of March 11, 2011, between Best Buy Co., Inc. and U.S. Bank National Association, as successor trustee](https://www.sec.gov/Archives/edgar/data/764478/000110465913054728/a13-16198_5ex4d1.htm) | | [removed: | |] 8-K | | [removed: | |] 4.1 | | [removed: | |] 7/16/2013 | | | [removed: | | |]

| [removed: |] [4.4](https://www.sec.gov/Archives/edgar/data/764478/000110465918059137/a18-31182_4ex4d1.htm) | | [removed: | |] [Third Supplemental Indenture, dated as of September 27, 2018, to the Indenture dated as of March 11, 2011, between Best Buy Co., Inc. and U.S. Bank National Association, as successor](https://www.sec.gov/Archives/edgar/data/764478/000110465918059137/a18-31182_4ex4d1.htm) | | [removed: | |] 8-K | | [removed: | |] 4.1 | | [removed: | |] 9/27/2018 | | | [removed: | | |]

| [removed: |] [10.1](https://www.sec.gov/Archives/edgar/data/764478/000076447818000015/exhibit10142018-rcf.htm) | | [removed: | |] [Five-Year Credit Agreement dated as of April 17, 2018, among Best Buy Co., Inc., the Subsidiary Guarantors, the Lenders and JPMorgan Chase Bank, N.A., as administrative agent](https://www.sec.gov/Archives/edgar/data/764478/000076447818000015/exhibit10142018-rcf.htm) | | [removed: | |] 8-K | | [removed: | |] 10.1 | | [removed: | |] 4/20/2018 | | | [removed: | | |]

| [removed: |] [*10.2](https://www.sec.gov/Archives/edgar/data/764478/000110465911039324/a11-18501_1ex99.htm) | | [removed: | |] [Best Buy Co., Inc. 2004 Omnibus Stock and Incentive Plan, as amended](https://www.sec.gov/Archives/edgar/data/764478/000110465911039324/a11-18501_1ex99.htm) | | [removed: | |] S-8 | | [removed: | |] 99 | | [removed: | |] 7/15/2011 | | | [removed: | | |]

| [removed: |] [*10.3](https://www.sec.gov/Archives/edgar/data/764478/000104746910004349/a2197223zex-10_7.htm) | | [removed: | |] [2010 Long-Term Incentive Program Award Agreement, as approved by the Board of Directors](https://www.sec.gov/Archives/edgar/data/764478/000104746910004349/a2197223zex-10_7.htm) | | [removed: | |] 10-K | | [removed: | |] 10.7 | | [removed: | |] 4/28/2010 | | | [removed: | | |]

| [removed: | [*10.4](https://www.sec.gov/Archives/edgar/data/764478/000104746910004349/a2197223zex-10_7.htm) | |] [added: [*10.4](https://www.sec.gov/Archives/edgar/data/764478/000076447812000093/bby8412ex103.htm)] | | [Form of Long-Term Incentive Program Buy-Out Award Agreement dated September 4, 2012, between Hubert Joly and Best Buy Co., [removed: Inc.](https://www.sec.gov/Archives/edgar/data/764478/000104746910004349/a2197223zex-10_7.htm) | |] [added: Inc.](https://www.sec.gov/Archives/edgar/data/764478/000076447812000093/bby8412ex103.htm)] | | 10-Q | | [removed: | |] 10.3 | | [removed: | |] 9/6/2012 | | | [removed: | | |]

| [removed: |] [*10.5](https://www.sec.gov/Archives/edgar/data/764478/000076447812000083/exhibit10182112.htm) | | [removed: | |] [Employment Agreement, dated August 19, 2012, between Hubert Joly and Best Buy Co., Inc.](https://www.sec.gov/Archives/edgar/data/764478/000076447812000083/exhibit10182112.htm) | | [removed: | |] 8-K | | [removed: | |] 10.1 | | [removed: | |] 8/21/2012 | | | [removed: | | |]

| [removed: |] [*10.6](https://www.sec.gov/Archives/edgar/data/764478/000076447813000011/exhibit99232513.htm) | | [removed: | |] [Letter Agreement, dated March 25, 2013, between Best Buy Co., Inc. and Richard M. Schulze](https://www.sec.gov/Archives/edgar/data/764478/000076447813000011/exhibit99232513.htm) | | [removed: | |] 8-K | | [removed: | |] 99.2 | | [removed: | |] 3/25/2013 | | | [removed: | | |]

| [removed: |] [*10.7](https://www.sec.gov/Archives/edgar/data/764478/000076447814000011/bby-2014ex1019.htm) | | [removed: | |] [Form of Best Buy Co., Inc. Long-Term Incentive Program Award](https://www.sec.gov/Archives/edgar/data/764478/000076447814000011/bby-2014ex1019.htm) | | [removed: | |] 10-K | | [removed: | |] 10.19 | | [removed: | |] 3/28/2014 | | | [removed: | | |]