292,282 # of MP3s sold on Black Friday and Saturday LAST year 320,000 # of MP3s we’ll sell Black Friday and Saturday THIS year +10%!!

295,000 # of MP3s we’ll sell on Black Friday in 6 hours!!

598,696 # of MP3s we sold December Wk 3 LAST year (The Biggest Week of the Year) 900,000 # of MP3s we’ll sell December Wk 3 THIS year +50%!!

7.4M # of MP3s, Accessories, Headphones, Speaker Docks sold LAST Holiday 8.4M # of MP3s, Accessories, Headphones, Speaker Docks we’ll sell THIS Holiday +1 million units!!

30.0% Category Gross Profit Rate

Debra Russell Director – MP3s, Accessories Aaron Tubbs TCED – Territory 5

We’re winning in the marketplace TODAY  Market Share Gains: –#1 Device share: 6 th consecutive month of gains –#1 Accessory share: 11 th consecutive month of gains –#1 HPs/Speakers share: 5 th consecutive month of gains  Ratio and Attach rates: –Highest EVER in all categories  Performance to Budget: –+8% YTD Complete solutions: – Bundles – Integrated Accessories on Serp – Breadth of accessory assortment Demonstrable experiences: – Test and try Devices, Speaker Docks, Headphones – Interactive displays: Beats by Dr. Dre, Bose, powered speakers You! – Knowledgeable associates – TRUST

How will we win this Holiday? Continue to offer our customers the best products, and the right solutions, to meet their individual needs. TRUST

We’ll help you….Enjoy your entertainment whenever and wherever you want  iPods: All new assortment  Zune HD  Portable Entertainment Devices: Archos, Flo TV  Sony MP3 player with integrated Speaker  SanDisk Sansa + Slot Radio

We’ll help you….Maximize your experience  Beats by Dr. Dre Headphones: Lady Gaga and Solo  Bose QC15 noise canceling headphones (semi-exclusive)  New brands: Ultimate Ears, Sennheiser, Koss, Klipsch

We’ll help you….Experience the latest and greatest  Powered Endcaps (Serp/Table): –Featuring iPod Touch: #1 Revenue driver –Featuring Beats by Dr. Dre +Lady Gaga  Serp/Table improvements –Excess fixtures removed to make room for bundle merchandising –Additional HPs/Spkrs on the Serp/Table –Better signage: Benefits focused  Headphone expansion –12 feet in almost all stores, closer to Devices –Expanded Bose headphone interactive (QC15)

We’ll help you…Get the right solution  Promotions –Bundles –Gift Card offers  Digital Solutions –Napster and iTunes: 2 great digital options –New educational signage  Trade-In –“Green” initiative, opportunity to trade up with trade-in –Competitive differentiator

We’ll help you…..Release your inner DJ  DJ Lifestyle/Beats Strategy: –Build, enhance our relationship with Youth, while driving incremental traffic to our stores and online channels –Offer customers a backstage pass to the latest/greatest technology –Create/OWN the DJ experience –BBY as destination for best sound quality products  What to expect this holiday: –In-Store merchandising: DJ experience in all stores including DJ gear, Beats Headphones, Accessories (experience varies by store) –In-store events: DJ demos, GOs, Artist meet and greets (Dr. Dre, Lady Gaga) –Marketing: TV spot (great gifts), Gift Guide, HD Loop –Comprehensive training

Key Takeaways: The best products, the right solutions  Bundles are KEY to our Holiday success: Utilize best practices to make it easy for customers to grab and go  Enable Velocity - Devices are sold everywhere. Customers may not wait for someone to unlock them  Bulk stack larger high velocity items – Bose Sound Docks  Shippers (Bose and Sony): Place in high traffic areas to maximize sales  Create a game plan daily!  Develop your localized plan to deliver the biggest bang for the buck

Thank You!!