Consolidated Income Statements

(in US$ thousands except shares & per share amounts)

Period Ending December 31

Actuals
2010A

2011A

E
2012A

Current Case - Case A (Street) Case

Y/Y revenue growth (%)
COGS as a % of revenue
Selling expenses as a % of revenue

2013

-3%
74%
22%

Case A (Street)
Y/Y revenue growth (%)
COGS as a % of revenue
Selling expenses as a % of revenue

0.0%
73.8%
19.8%

1.0%
72.7%
20.8%

1.9%
73.2%
20.6%

-3.2%
73.5%
21.5%

Case B (Downside)
Y/Y revenue growth (%)
COGS as a % of revenue
Selling expenses as a % of revenue

0.0%
73.8%
19.8%

1.0%
72.7%
20.8%

1.9%
73.2%
20.6%

-5.0%
73.5%
21.5%

Case C (Upside)
Y/Y revenue growth (%)
COGS as a % of revenue
Selling expenses as a % of revenue

0.0%
73.8%
19.8%

1.0%
72.7%
20.8%

1.9%
73.2%
20.6%

1.0%
73.2%
20.6%

Case C (LBO)
Y/Y revenue growth (%)
COGS as a % of revenue
Selling expenses as a % of revenue

0.0%
73.8%
19.8%

1.0%
72.7%
20.8%

1.9%
73.2%
20.6%

1.0%
73.0%
20.2%

Estimates
2014

2015

2016

2017

2018

-2%
74%
22%

-2%
74%
22%

-2%
74%
22%

1%
74%
22%

1%
74%
22%

-2.0%
73.6%
21.6%

-2.0%
73.6%
21.6%

-2.0%
73.6%
21.6%

1.0%
73.6%
21.6%

1.0%
73.6%
21.6%

-4.0%
73.6%
21.6%

-3.0%
73.6%
21.6%

-2.0%
73.6%
21.6%

-1.0%
73.6%
21.6%

-1.0%
73.6%
21.6%

0.0%
73.2%
20.6%

0.0%
73.2%
20.6%

0.0%
73.2%
20.6%

0.0%
73.2%
20.6%

0.0%
73.2%
20.6%

1.0%
73.0%
20.2%

1.0%
73.0%
20.2%

1.0%
73.0%
20.2%

1.0%
73.0%
20.2%

1.0%
73.0%
20.2%

Consolidated Income Statements

(in US$ thousands except shares & per share amounts)
For the fiscal year ended March 3, 2012
Revenue
Y/Y revenue growth (%)
Cost of goods sold
COGS as a % of revenue
Gross profit
Gross profit margin (%)
Operating expenses
Selling, general and administrative
SG&A as a % of revenue
Other
Total operating expenses
Equity in earnings of unconsolidated affiliates
EBITDA
EBITDA margin (%)
Depreciation
Amortization
Adjusted EBIT
EBIT margin (%)
Operating income (GAAP)
Interest
Interest expense
Interest income
Gain on sale of investments
Net interest expense
Income before tax (IBT)
IBT margin (%)
Income tax expense
All-in effective tax rate (%)
Net income from continuing ops
Non-recurring events
Restructuring charges - COGS
Restructuring charges
Best Buy Europe transaction costs - SG&A
Goodwill impairment
Gain on sale of investments
Restructuring charges NCI
Best Buy Europe transaction costs - NCI
BBYM profit share buyout - NCI
Discontinued operations
Restructuring charges - COGS
Restructuring charges
Restructuring charges NCI
Total non-recurring events
Net income

Actuals
2010A
$49,243.0

36,363.0
74%
$12,880.0
26%

2011A
$49,747.0
1%
36,190.0
73%
$13,557.0
27%

2012A
$50,705.0
2%
37,130.0
73%
$13,575.0
27%

2013
49,082.4
-3%
36,075.6
74%
$13,006.8
27%

9,755.0
19.8%
0.0
9,755.0
0.0
3,125.0
6.3%
838.0
88.0
2,199.0
4.5%
2,368.0

10,325.0
20.8%
0.0
10,325.0
0.0
3,232.0
6.5%
896.0
82.0
2,254.0
4.5%
2,374.0

10,451.0
20.6%
0.0
10,451.0
0.0
3,124.0
6.2%
897.0
48.0
2,179.0
4.3%
1,085.0

10,552.7
21.5%
0.0
10,552.7
0.0
2,454.1
5.0%
905.2
46.5
1,502.4
3.1%
0.0

92.0
(53.0)
0.0
39.0
2,160.0
4%
836.0
39%
1,324.0

86.0
(43.0)
0.0
43.0
2,211.0
4%
781.0
35%
1,430.0

134.0
(37.0)
0.0
97.0
2,082.0
4%
705.0
34%
1,377.0

76.7
(0.3)
0.0
76.4
1,426.0
3%
482.9
34%
943.1

31.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
31.9

5.8
86.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
10.0
44.0
0.0
146.8

12.0
25.8
30.4
1,180.0
48.0
(4.0)
(13.0)
1,303.0
0.0
8.0
178.0
(85.0)
2,683.2

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

1,292.1

1,283.2

1,306.2

943.1

Dividend payout
% of net income
Per share dividend
Adjusted Earnings per share
Basic
Diluted
Earnings per share (GAAP)
Average common shares outstanding
Basic
Diluted

(234.0)
18.1%
0.55

(237.0)
18.5%
0.57

(228.0)
17.5%
0.62

(141.5)
15.0%
0.39

$3.10
$3.02

$3.16
$3.08

$3.10

$3.14

$3.57
$3.57
($3.36)

$2.57
$2.57
$0.00

416.8
427.5

406.1
416.5

366.3
366.3

366.3
366.3

Estimates
2014
48,100.8
-2%
35,402.2
74%
$12,698.6
26%

2015
47,138.8
-2%
34,694.1
74%
$12,444.6
26%

2016
46,196.0
-2%
34,000.3
74%
$12,195.7
26%

2017
46,658.0
1%
34,340.3
74%
$12,317.7
26%

2018
47,124.5
1%
34,683.7
74%
$12,440.9
26%

10,389.8
21.6%
0.0
10,389.8
0.0
2,308.8
4.8%
943.7
45.5
1,319.6
2.7%
0.0

10,182.0
21.6%
0.0
10,182.0
0.0
2,262.7
4.8%
981.7
44.6
1,236.3
2.6%
0.0

9,978.3
21.6%
0.0
9,978.3
0.0
2,217.4
4.8%
1,016.4
43.7
1,157.3
2.5%
0.0

10,078.1
21.6%
0.0
10,078.1
0.0
2,239.6
4.8%
1,050.6
44.2
1,144.9
2.5%
0.0

10,178.9
21.6%
0.0
10,178.9
0.0
2,262.0
4.8%
1,084.7
44.6
1,132.6
2.4%
0.0

9.9
(3.0)
0.0
6.9
1,312.7
3%
444.5
34%
868.2

0.0
(8.2)
0.0
(8.2)
1,244.5
3%
421.4
34%
823.1

0.0
(13.8)
0.0
(13.8)
1,171.1
3%
396.5
34%
774.5

0.0
(18.2)
0.0
(18.2)
1,163.0
2%
393.8
34%
769.2

0.0
(23.9)
0.0
(23.9)
1,156.5
2%
391.6
34%
764.9

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

868.2

823.1

774.5

769.2

764.9

(130.2)
15.0%
0.36

(123.5)
15.0%
0.34

(116.2)
15.0%
0.32

(115.4)
15.0%
0.31

(114.7)
15.0%
0.31

$2.37
$2.37
$0.00

$2.25
$2.25
$0.00

$2.11
$2.11
$0.00

$2.10
$2.10
$0.00

$2.09
$2.09
$0.00

366.3
366.3

366.3
366.3

366.3
366.3

366.3
366.3

366.3
366.3

Consolidated Statements of Cash Flows

(in US$ thousands)
Period Ending December 31

Actuals
2010A

2011A

1,394.0
838.0
0.0
88.0
52.0
0.0
118.0
0.0
(30.0)
(7.0)
0.0
103.0

1,366.0
896.0
0.0
82.0
222.0
0.0
121.0
0.0
(134.0)
(11.0)
11.0
(33.0)

(63.0)
(609.0)
(98.0)
141.0
0.0
0.0
279.0
(350.0)
2,206.0

(371.0)
(400.0)
40.0
(443.0)
0.0
0.0
(156.0)
(1,330.0)
1,190.0

Cash flows from investing activities

CAPEX [Purchase of property, leasehold improvements & equipment]
Proceeds from sale of property, leasehold improvements & equipment
Business acquisitions net of cash acquired [& net of intangibles/other]
Proceeds from sale of businesses [spin-offs]
Proceeds from sale of investments
Change in restricted assets
Settlement of investment hedges
Other
Total cash provided by (used for) investing activities

(615.0)
(16.0)
(7.0)
0.0
56.0
18.0
40.0
(16.0)
(540.0)

(744.0)
(267.0)
0.0
21.0
415.0
(2.0)
12.0
(4.0)
(569.0)

Cash flows from financing activities

Short-term borrowings (repayments)
Long-term borrowings (repayments)
Proceeds from issuance of common stock and additional paid-in capital
Repurchase of common stock [treasury stock]
Preferred Dividends Payable

0.0
(210.0)
138.0
0.0
0.0

0.0
(99.0)
179.0
(1,193.0)
0.0

Cash flows from operating activities

Net income after distributions
Depreciation and amortization
Acquired identifiable amortizable intangible assets, net of accum. amort.
Amortization of definite-lived intangible assets
Restructuring
Goodwill impairment
Stock-based compensation
Gain on sale
Deferred tax
Excess tax benefits
Other, net
Income taxes
Changes in operating operating working capital
Changes in trade accounts receivable
Changes in inventories
Changes in other current assets
Changes in accounts payable
Changes in gift card liabilities
Changes in accrued compensation
Changes in accrued liabilities
Net changes in working capital
Total cash provided by (used for) operating activities

Distributions
Payments to non-controlling interests
Other
Total cash provided by (used for) financing activities
Effect of exchange rate on cash
Total change in cash and cash equivalents
SUPPLEMENTAL DATA:
Cash flow before debt paydown

(234.0)
0.0
(42.0)
(348.0)
10.0

(237.0)
0.0
(7.0)
(1,357.0)
13.0

1,328.0

(723.0)

Actuals

Estimates
2012A

2013

2014

2015

2016

2017

2018

22.0
897.0
0.0
48.0
288.0
1,207.0
120.0
(55.0)
28.0
0.0
25.0
25.0

943.1
905.2
0.0
46.5
0.0
0.0
120.0
0.0
(30.0)
(11.0)
0.0
103.0

868.2
943.7
0.0
45.5
0.0
0.0
120.0
0.0
(134.0)
(11.0)
0.0
(33.0)

823.1
981.7
0.0
44.6
0.0
0.0
120.0
0.0
28.0
(11.0)
0.0
25.0

774.5
1,016.4
0.0
43.7
0.0
0.0
120.0
0.0
(30.0)
(11.0)
0.0
103.0

769.2
1,050.6
0.0
44.2
0.0
0.0
120.0
0.0
(134.0)
(11.0)
0.0
(33.0)

764.9
1,084.7
0.0
44.6
0.0
0.0
120.0
0.0
28.0
(11.0)
0.0
25.0

41.0
120.0
(24.0)
574.0
0.0
0.0
(23.0)
688.0
3,293.0

44.2
82.1
34.5
(380.7)
(5.9)
20.9
(91.6)
(296.5)
1,780.4

44.9
105.4
20.9
(93.0)
(9.0)
(8.6)
(24.6)
35.9
1,835.4

44.0
110.9
20.5
(97.8)
(8.8)
(11.0)
(31.4)
26.3
2,037.7

43.1
108.7
20.1
(95.9)
(8.6)
(10.8)
(30.7)
25.8
2,042.4

(21.1)
(53.2)
(9.8)
47.0
4.2
5.3
15.1
(12.6)
1,793.3

(21.3)
(53.8)
(9.9)
47.4
4.3
5.3
15.2
(12.8)
2,043.5

(766.0)
(112.0)
(174.0)
0.0
290.0
40.0
0.0
(2.0)
(724.0)

(749.5)
(112.0)
0.0
0.0
0.0
0.0
0.0
0.0
(861.5)

(770.5)
(112.0)
0.0
0.0
0.0
0.0
0.0
0.0
(882.5)

(760.0)
(112.0)
0.0
0.0
0.0
0.0
0.0
0.0
(872.0)

(693.0)
(112.0)
0.0
0.0
0.0
0.0
0.0
0.0
(805.0)

(683.3)
(112.0)
0.0
0.0
0.0
0.0
0.0
0.0
(795.3)

(683.3)
(112.0)
0.0
0.0
0.0
0.0
0.0
0.0
(795.3)

0.0
509.0
67.0
(1,500.0)
0.0

(523.0)
(1,403.4)
0.0
0.0
0.0

0.0
(281.6)
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

(228.0)
(1,303.0)
(23.0)
(2,478.0)
5.0

(141.5)
0.0
0.0
(2,067.9)
0.0

(130.2)
0.0
0.0
(411.8)
0.0

(123.5)
0.0
0.0
(123.5)
0.0

(116.2)
0.0
0.0
(116.2)
0.0

(115.4)
0.0
0.0
(115.4)
0.0

(114.7)
0.0
0.0
(114.7)
0.0

96.0

(1,149.0)

541.1

1,042.3

1,121.2

882.6

1,133.4

777.4

822.7

1,042.3

1,121.2

882.6

1,133.4

Operating Working Capital Schedule (OWC)

(in US$ thousands)
For the fiscal year ended March 3, 2012

Actuals
2011A

2012A

2013

Current assets
Trade accounts receivable
Days receivable
Inventories
Inventory turnover days
Other current assets
% of revenue
Total current assets

2,348.0
17.0
5897.0
58.7
1,103.0
2.2%
9,348.0

2,288.0
16.5
5731.0
56.4
1,079.0
2.1%
9,098.0

2,243.8
16.5
5,648.9
56.4
1,044.5
2.1%
8,937.2

Current liabilities
Accounts payable
Days payable
Gift card libilities
Days payable
Accrued compensation
Days payable
Accrued liabilities
Days payable
Total current liabilities

4,894.0
48.7
474.0
3.4
570.0
19.9
1,471.0
51.3
7,409.0

5,364.0
49.7
456.0
3.3
539.0
19.1
1,685.0
54.4
8,044.0

4,983.3
49.7
450.1
3.3
559.9
19.1
1,593.4
54.4
7,586.7

1,939.0

1,054.0
$885.0

1,350.5
($296.5)
Y

Total operating working capital

Change in total operating working capital
Match? (Y/N)

2010A

Estim

Estimates
2014

2015

2016

2017

2018

2,198.9
16.5
5,543.4
56.4
1,023.6
2.1%
8,766.0

2,155.0
16.5
5,432.6
56.4
1,003.1
2.1%
8,590.7

2,111.9
16.5
5,323.9
56.4
983.0
2.1%
8,418.8

2,133.0
16.5
5,377.2
56.4
992.9
2.1%
8,503.0

2,154.3
16.5
5,430.9
56.4
1,002.8
2.1%
8,588.1

4,890.3
49.7
441.1
3.3
551.3
19.1
1,568.8
54.4
7,451.4

4,792.5
49.7
432.3
3.3
540.2
19.1
1,537.4
54.4
7,302.4

4,696.7
49.7
423.6
3.3
529.4
19.1
1,506.6
54.4
7,156.4

4,743.6
49.7
427.9
3.3
534.7
19.1
1,521.7
54.4
7,227.9

4,791.1
49.7
432.2
3.3
540.1
19.1
1,536.9
54.4
7,300.2

1,314.5
$35.9
Y

1,288.2
$26.3
Y

1,262.5
$25.8
Y

1,275.1
($12.6)
Y

1,287.9
($12.8)
Y

Consolidated Balance Sheets

(in US$ thousands)
For the fiscal year ended March 3, 2012

Actuals
2010A

2011A

2012A

Assets
Current assets:
Cash and cash equivalents
Trade accounts receivable
Short term investments
Inventories
Other current assets
Total current assets
Property, plant and equipment, net
Goodwill
Acquired identifiable amortizable intangible assets, net of accum. amort.
Trader names & customer relationships
Equity and other investments
Other long-term assets
Total assets

1,103.0
2,348.0
22.0
5,897.0
1,103.0
10,473.0
3,823.0
2,454.0
0.0
336.0
328.0
435.0
17,849.0

1,199.0
2,288.0
0.0
5,731.0
1,079.0
10,297.0
3,471.0
1,335.0
0.0
359.0
140.0
403.0
16,005.0

Liabilities
Current liabilities:
Short term debt
Trade accounts payable
Unredeemed gift card liabilities
Accrued compensation
Accrued liabilities
Accrued income taxes
Other current liabilities
Total current liabilities
Long-term debt
Other long-term liabilities
Total liabilities

998.0
4,894.0
474.0
570.0
1,471.0
256.0
0.0
8,663.0
711.0
1,183.0
10,557.0

523.0
5,364.0
456.0
539.0
1,685.0
288.0
0.0
8,855.0
1,685.0
1,099.0
11,639.0

0.0
57.0
0.0
690.0
173.0
6,372.0
7,292.0

0.0
34.0
0.0
621.0
90.0
3,621.0
4,366.0

17,849.0

16,005.0

0.0

0.0

Stockholders' equity
Equity infusion + Co-Invest
Common stock par value and additional paid-in-capital
Less stock repurchased [treasury stock]
Non-controlling interests
Accumulated other comprehensive income (loss)
Retained earnings
Total stockholder equity
Total liabilities & stockholders' equity
SUPPLEMENTAL DATA:

Balance? (Y/N)

Estimates
2013

2014

2015

2016

2017

2018

50.0
2,243.8
0.0
5,648.9
1,044.5
8,987.2
3,427.2
1,335.0
0.0
312.5
140.0
403.0
14,605.0

591.1
2,198.9
0.0
5,543.4
1,023.6
9,357.1
3,366.0
1,335.0
0.0
267.0
140.0
403.0
14,868.1

1,633.4
2,155.0
0.0
5,432.6
1,003.1
10,224.1
3,256.2
1,335.0
0.0
222.4
140.0
403.0
15,580.6

2,754.6
2,111.9
0.0
5,323.9
983.0
11,173.5
3,044.8
1,335.0
0.0
178.6
140.0
403.0
16,274.9

3,637.3
2,133.0
0.0
5,377.2
992.9
12,140.3
2,789.6
1,335.0
0.0
134.5
140.0
403.0
16,942.3

4,770.7
2,154.3
0.0
5,430.9
1,002.8
13,358.7
2,500.2
1,335.0
0.0
89.9
140.0
403.0
17,826.8

0.0
4,983.3
450.1
559.9
1,593.4
361.0
0.0
7,947.7
281.6
1,099.0
9,328.3

0.0
4,890.3
441.1
551.3
1,568.8
194.0
0.0
7,645.4
0.0
1,099.0
8,744.4

0.0
4,792.5
432.3
540.2
1,537.4
247.0
0.0
7,549.4
0.0
1,099.0
8,648.4

0.0
4,696.7
423.6
529.4
1,506.6
320.0
0.0
7,476.4
0.0
1,099.0
8,575.4

0.0
4,743.6
427.9
534.7
1,521.7
153.0
0.0
7,380.9
0.0
1,099.0
8,479.9

0.0
4,791.1
432.2
540.1
1,536.9
206.0
0.0
7,506.2
0.0
1,099.0
8,605.2

0.0
143.0
0.0
621.0
90.0
4,422.7
5,276.7

0.0
252.0
0.0
621.0
90.0
5,160.6
6,123.6

0.0
361.0
0.0
621.0
90.0
5,860.2
6,932.2

0.0
470.0
0.0
621.0
90.0
6,518.6
7,699.6

0.0
579.0
0.0
621.0
90.0
7,172.4
8,462.4

0.0
688.0
0.0
621.0
90.0
7,822.5
9,221.5

14,605.0

14,868.1

15,580.6

16,274.9

16,942.3

17,826.8

0.0

0.0

0.0

0.0

0.0

0.0

Depreciation
(in US$ thousands)
For the fiscal year ended March 3, 2012
Property, plant & equipment on March 31,
Capital expenditures as of March 31,
Straight line depreciation
Years (PP&E)
Years (CAPEX)
Existing PP&E
2013 CAPEX
2014 CAPEX
2015 CAPEX
2016 CAPEX
2017 CAPEX
2018 CAPEX
Total book depreciation
As % of revenue
Amortization of definite-lived intangible as
As % of revenue

Actuals

Estimates

2010A

2011A

2012A

(615.0)
1.2%

(744.0)
1.5%

(766.0)
1.5%

838.0
2%
88.0
0.2%

896.0
2%
82.0
0.2%

897.0
2%
48.0
0.1%

2013
3,471.0
749.5
1.5%
4
20
867.8
37.5

905.2
2%
46.5
0.1%

2014
770.5
1.6%
20
867.8
37.5
38.5

943.7
2%
45.5
0.1%

Estimates
2015

2016

2017

2018

760.0
1.6%

693.0
1.5%

683.3
1.5%

683.3
1.5%

20
867.8
37.5
38.5
38.0

20
867.8
37.5
38.5
38.0
34.7

20
867.8
37.5
38.5
38.0
34.7
34.2

981.7
2%
44.6
0.1%

1,016.4
2%
43.7
0.1%

1,050.6
2%
44.2
0.1%

20
867.8
37.5
38.5
38.0
34.7
34.2
34.2
1,084.7
2%
44.6
0.1%

Debt Schedule
(in US$ thousands)
For the fiscal year ended March 3, 2012

Actuals
2013

2014

Cash available to pay down debt

Cash at beginning of year
Cash flow before debt paydown
Minimum cash cushion
Total cash available to pay down debt

1,199.0
777.4
(50.0)
1,926.4

50.0
822.7
(50.0)
822.7

Revolver
Debt (beginning of year)
Mandatory issuances / (retirements)
Non-mandatory issuances / (retirements)
Debt (end of year)
Interest expense
Interest rate

523.0
0.0
(523.0)
0.0
7.8
3.0%

0.0
0.0
0.0
0.0
0.0
3.0%

1,685.0
0.0
(1,403.4)
281.6
68.8
7.0%

281.6
0.0
(281.6)
0.0
9.9
7.0%

(1,926.4)

(281.6)

76.7

9.9

50.0
0.3
1%

591.1
3.0
1%

Long term debt

Short term debt (beginning of year)
Mandatory issuances / (retirements)
Non-mandatory issuances / (retirements)
Short term debt (end of year)
Short term interest expense
Short term interest rate

2010A

2011A

Estimates
2012A

523.0

1,685.0

Total issuances / (retirements)

Total interest expense
Cash at the end of the year
Interest income
Interest rate
Match? (Y/N)

1,199.0

Estimates
2015

2016

2017

2018

591.1
1,042.3
(50.0)
1,583.4

1,633.4
1,121.2
(50.0)
2,704.6

2,754.6
882.6
(50.0)
3,587.3

3,637.3
1,133.4
(50.0)
4,720.7

0.0
0.0
0.0
0.0
0.0
3.0%

0.0
0.0
0.0
0.0
0.0
3.0%

0.0
0.0
0.0
0.0
0.0
3.0%

0.0
0.0
0.0
0.0
0.0
3.0%

0.0
0.0
0.0
0.0
0.0
7.0%

0.0
0.0
0.0
0.0
0.0
7.0%

0.0
0.0
0.0
0.0
0.0
7.0%

0.0
0.0
0.0
0.0
0.0
7.0%

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

1,633.4
8.2
1%

2,754.6
13.8
1%

3,637.3
18.2
1%

4,770.7
23.9
1%

Sweep
100%

Sweep
100%

Discounted Cash Flow Analysis

(in US$ millions including shares & except per share amounts)

Actuals

For the fiscal year ended March 3, 2012

2010A

2011A

Unlevered Free Cash Flow

EBIT
Depreciation & Amortization
Deferred Taxes
Other
Changes in Working Capital
Capital Expenditures
Taxes
Total Unlevered Free Cash Flow

2012A

2,179.0
945.0
28.0
0.0
688.0
(766.0)

Net Present Value Calulation

Period
Discounted Cash Flow
Total Net Present Value

9.00%

Terminal Value
EBITDA Method
Exit Year EBITDA
Multiple
Terminal Value
Net Present Value
Perpetuity Method
Unlevered Free Cash Flow
Growth Rate
Terminal Value
Net Present Value

1,022.0
-2.0%
9,104.7
6,178.0

Discounted Cash Flow Total Valuation (Enterprise Value)

EBITDA Method
Perpetuity Method
Net Debt
Basic Share Count (millions)
Est. Fair Equity Value per share EBITDA Method
Est. Fair Equity Value per share Perpetuity Method

7,190.8
10,329.5
1,546.0
336.7
$16.77
$26.09

2,239.6
2.0x
4,479.2
3,039.3

EBITDA Method Sensitivity (WACC vs. Exit Multiple)

$16.8
1.5x
2.0x

8.0%

9.0%

10.0%

2.5x

Perpetuity Method Sensitivity (WACC vs. Growth)

$26.1
-2.5%
-2.0%
-1.5%

8.0%

9.0%

10.0%

Estimates
2013

2014

2015

2016

2017

1,502.4
951.7
(30.0)
0.0
(296.5)
(749.5)
(508.7)
869.4

1,319.6
989.3
(134.0)
0.0
35.9
(770.5)
(446.8)
993.5

1,236.3
1,026.4
28.0
0.0
26.3
(760.0)
(418.6)
1,138.3

1,157.3
1,060.1
(30.0)
0.0
25.8
(693.0)
(391.9)
1,128.3

1,144.9
1,094.7
(134.0)
0.0
(12.6)
(683.3)
(387.7)
1,022.0

0.5
832.8
4,151.5

1.5
873.0

2.5
917.7

3.5
834.5

4.5
693.5

Cost of Capital:
Risk Free Rate
Equity Risk Premium
Beta
Cost of Equity
Cost of Debt
Cost of Preferred Stock
WACC

Tax rate
34%

2.8% Stock Price

6.0% Diluted shares
1.48 Shares Outstanding
11.68% Equity value
Total debt
7.0% Cash
0.0% Minority interest
9.3% Enterprise value

Equity
Debt
Cap. Structure

$12.95
0
337
$4,359.8
2,226.0
-680.0
596.0
$6,501.8

$4,359.8
2,226.0
6,586

66%
34%

Comparable Companies Analysis

($ in millions)
Stock
symbol
Company
Direct Retail
GameStop Corp.
Conns Inc.
HHgregg, Inc.

GME
CONN
HGG

Stock price as
Market
of:11/29/2012 Capitalization
$26.21
$28.09
$7.44

$3,170
$915
$257

Enterprise
Value
$2,830
$1,220
$255
Median
Mean

Online
Apple Inc.
Amazon.com Inc.

AAPL
AMZN

$589.36
$251.27

$554,410
$113,810

$519,240
$106,680
Median
Mean

Best Buy Co., Inc.

BBY

$12.95

$4,360

Source: yahoo finance and Thomson Reuters.

Enterprise value
Share price
Shares outstanding (mm)
Options outstanding TSM
Diluted shares outstanding
Equity value
Calculation of Enterprise Value
Short-term debt
Long-term debt
Convertible debt
Convertible preferred
Preferred (ie. straight)
Minority interest
Less: Cash & equivalents
Enterprise value
Options
Outstanding
35.80
0.00
Total

$12.95
337
0
337
$4,360
1,061.0
1,165.0
0.0
0.0
0.0
596.0
(680.0)
$6,501.8
Strike
Price
$38.08
0.00

Fully Diluted
Shares
0
0
0

$6,501.8

Enterprise value / EBITDA

2013E
LTM
3.5x
10.9x
2.7x

3.6x
25.9x
2.7x

3.5x
5.7x

3.6x
10.7x

7.8x
28.5x

8.9x
51.1x

18.2x
18.2x

30.0x
30.0x

2.8x

1.9x

Comparable comps valuation analysis

2012 LTM EBITDA
2013E EBITDA
Implied enterprise value
Net debt
Implied equtiy value
Shares outstanding
Implied stock price value

Stats
3,178.0
2,454.1

Low
2.0x
1.5

High
3.0x
2.5

prise value / EBITDA

2014E

Enterprise value / Revenue

2013E
LTM
2014E

2013E

Price / Earnings
LTM
2014E

3.4x
8.9x
2.6x

0.3x
1.4x
0.1x

0.3x
1.5x
0.1x

0.3x
1.2x
0.1x

8.2x
18.4x
8.0x

NM
50.5x
3.6x

7.6x
14.7x
7.4x

3.4x
5.0x

0.3x
0.6x

0.3x
0.6x

0.3x
0.5x

8.2x
11.5x

27.1x
27.1x

7.6x
9.9x

6.5x
17.0x

2.7x
1.3x

3.3x
1.9x

2.3x
1.1x

11.9x
138.1x

13.4x
NM

10.1x
64.4x

11.7x
11.7x

2.0x
2.0x

2.6x
2.6x

1.7x
1.7x

75.0x
75.0x

13.4x
13.4x

37.3x
37.3x

3.0x

0.1x

0.1x

0.1x

6.2x

NM

6.0x

Enterprise value
Low
High
6,356
9,534
3,681
6,135
5,019
7,835
2,142
2,142
2,877
5,693
336.67
336.67
$8.54
$16.91

52 week ranage
Low

High
11.41
28.51

Comparable analysis
Low

$8.54

Share price
Shares outstanding
Equity value
Net debt
Enterprise value

$12.95

DCF Perpetuity method analysis

Comparable company analysis

52 w eek high low

DCF EBITDA method analysis

$0.00

$22.89

$8.54

$16.91

$11.41

$13.97

$10.00

$19.7

$20.00

$30.

mparable analysis
High
$16.91

DCF EBITDA method analysis

Low

High
$13.97
$19.78

$24 - $26

89

$30.28

$16.91

$28.51

$19.78

$20.00

$30.00

$40.00

$50.00

DCF Perpetuity method analysis

Low

High
$22.89
$30.28

Category Low
Spread
High
Current
DCF EBITD $13.97
$5.81
$19.78
$12.95
52 week hi $11.41
$17.10
$28.51
$12.95
Comparabl $8.54
$8.36
$16.91
$12.95
DCF Perpet $22.89
$7.39
$30.28
$12.95