JB Hi Fi : Off-Market Buy-Back Booklet

Off-Market Share Buy-Back Booklet

2022

For personal use only

JB Hi-Fi Limited (ABN 80 093 220 136)

Off-Market Share Buy-Back Booklet

This is an important booklet. It invites you to make an offer to sell your Shares to JB Hi-Fi in the Buy-Back. It contains information to assist you in making a decision as to whether to participate in the Buy-Back.

It does not provide financial product advice and has been prepared without taking into account your particular objectives, financial situations, taxation circumstances or needs. You should consider the appropriateness of the Buy-Back having regard to these factors. If you are in any doubt as to the action you should take, please consult your financial, taxation or other professional adviser.

The distribution of this booklet in some jurisdictions outside of Australia and New Zealand may be restricted by law and does not constitute an invitation to participate in any place where, or to any person to whom, it would be unlawful to do so. Persons who come into possession of this booklet should seek advice on it and observe any restrictions on distributing it.

Copies of this booklet, and all materials related to it, are not available and should not be sent or otherwise distributed in or into the United States or Canada because this Buy-Back Invitation is not being made, directly or indirectly, in the United States or Canada.

Authorised by the JB Hi-Fi Limited Board 14 February 2022

JB Hi-FiLimited ABN 80 093 220 136

For personal use only

TABLE OF CONTENTS

		Page
Important dates	2
Chairman's letter	3
1.	Key features of the Buy-Back	4
	An overview of the key features of the Buy-Back and how to participate
2.	Detailed information about the Buy-Back and the Tender process	6
	Detailed information about the Buy-Back and tender process
3.	Australian tax implications for shareholders	15
	Information about the tax treatment of the Buy-Back, Capital Component, Dividend Component
	and franking credits
4.	Effect of the Buy-Back on JB Hi-Fi	21
	Information about the effect of the Buy-Back on the JB Hi-Fi Group including its balance sheet
5.	Additional information on the Buy-Back	24
	Information about other aspects of the Buy-Back
6.	How do I participate in the Buy-Back?	27
	Detailed information about how to participate and the different Tender Forms
7.	Definitions and interpretations	33
	Defines the capitalised words used in this booklet and sets out other rules of interpretation

Corporate directory

Eligibility to participate

You will be eligible to participate in the Buy-Back if Shares are registered in your name on the Buy-Back Record Date (Thursday, 24 February 2022) which, in accordance with the Settlement Rules, confer an entitlement to receive this Invitation, and you are not otherwise an Ineligible Shareholder.

You will be ineligible to participate in the Buy-Back if you are an Excluded Foreign Shareholder or a person who only holds Restricted Shares.

An Excluded Foreign Shareholder is a person who resides outside of Australia and New Zealand and also includes any person who is (or who is acting for the account or benefit of a person who is) in the United States, a US Person or a resident of Canada.

In addition, it has been determined that directors and members of senior management of JB Hi-Fi involved in determining the final pricing, size and implementation of the Buy-Back will not participate in the Buy-Back.

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For personal use only

IMPORTANT DATES

Buy-Back dates

Announcement of Buy-Back (Announcement Date)	Monday, 14 February 2022
Last day that Shares can be acquired on market to be eligible to participate in
the Buy-Back and to qualify for franking credit entitlements in respect of the	Tuesday, 22 February 2022
Buy-Back consideration
Buy-BackEx-Entitlement Date: the date that Shares commence trading on
an ex-Buy-Back basis. Shares acquired on market on or after this date will	Wednesday, 23 February 2022
generally not confer an entitlement to participate in the Buy-Back
Buy-Back Record Date: determination of shareholders entitled to participate in	Thursday, 24 February 2022
the Buy-Back at 7.00pm (Melbourne time)
Tender Period opens
Distribution of invitations to Eligible Shareholders to participate in the Buy-Back	Monday, 7 March 2022
is expected to be completed
Closing Date: Tenders must be submitted online or received by the Registry	Friday, 8 April 2022
no later than 5.00pm (Melbourne time)
Buy-Back Date: Announcement of Buy-Back Price and scale back (if any) to	Monday, 11 April 2022
ASX and entry into Buy-Back Contracts
Buy-Back Price paid to successful shareholders	Wednesday, 20 April 2022
Interim Dividend dates
Announcement date	Monday, 14 February 2022
Ex-entitlement date	Wednesday, 23 February 2022
Record date	Thursday, 24 February 2022
Payment date	Friday, 11 March 2022

While JB Hi-Fi does not anticipate any changes to these dates and times, it reserves the right to vary them by announcement to the ASX. Such an announcement will be taken to amend this booklet (and the other Buy-Back Documents) accordingly. JB Hi-Fi may, in its absolute discretion, also decide not to proceed with the Buy-Back or to vary the size of the Buy-Back, subject to a number of factors, such as shareholder demand, market conditions and future capital requirements.

This booklet is dated 14 February 2022 and is current as at that date (except where otherwise indicated).

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CHAIRMAN'S LETTER

For personal use only

Dear Shareholder

On behalf of the Board, I am pleased to announce a capital return of up to $250 million to shareholders by way of an off-marketbuy-back of JB Hi-Fi Shares (Buy-Back).

JB Hi-Fi is conducting the Buy-Back to efficiently return surplus capital to shareholders. JB Hi-Fi seeks to maintain an optimal capital structure while ensuring adequate capital is retained to sustain the future development of the business. Due to JB Hi-Fi's continued strong financial performance and strong cashflow generation, JB Hi-Fi has surplus capital and a significant franking credit balance. After returning capital to shareholders via the Buy-Back, JB Hi-Fi will still maintain a conservative gearing position with the financial flexibility to pursue growth opportunities. The Board believes that the Buy-Back can be completed without adversely affecting JB Hi-Fi's capacity to pay fully franked dividends for the foreseeable future.

The Buy-Back is expected to improve the efficiency of JB Hi-Fi's capital structure and is a demonstration of JB Hi-Fi's commitment to maximising returns to shareholders.

The Board considered a number of ways to return surplus capital to shareholders and concluded that an off-marketbuy-back is the most efficient and value-enhancing mechanism to distribute JB Hi-Fi's surplus capital and franking credits, while offering you as a shareholder advantages which are not available at this time from other methods of returning capital.

The Buy-Back is expected to improve earnings per share and return on equity, resulting from a reduction in shares on issue, which will benefit ongoing shareholders.

The Buy-Back will be conducted by way of a tender process. Participation is voluntary and you can tailor your participation to suit your own circumstances. For example, you can choose to tender some or all of your Shares in the Buy-Back. Additionally, you can choose to tender your Shares at specified discounts of between 8% to 14% (inclusive) in 1% intervals to the Market Price, or as

a Final Price Tender which is a Tender in which you elect to receive the Buy-Back Price as determined by JB Hi-Fi. You also have the option to make your Tender conditional on the Buy-Back Price being no less than a specified Minimum Price.

JB Hi-Fi has applied for a class ruling from the Australian Taxation Office (ATO). It is expected that the class ruling, when issued, will confirm that the Buy-Back Price will comprise a capital component of $3.18, with the remainder treated as a dividend which will be fully franked. This class ruling cannot be given by the ATO until the buy-back has closed. After the final class ruling is issued, it will be available on the ATO website, with a link to be made available on the JB Hi-FiBuy-Back website at (https://jbhifibuyback.com.au).

Depending on your circumstances, this may potentially make selling your Shares in the Buy-Back more appealing than selling your Shares on the ASX. General information on the Australian taxation implications for participants is provided in Section 3 of this Buy-Back booklet.

The decision to participate in the Buy-Back is entirely voluntary. As the Buy-Back will have different taxation consequences for different shareholders, your decision as to whether to participate should be determined by your own personal circumstances. In making your decision to participate, I encourage you to seek professional advice in relation to your particular circumstances.

I also encourage you to read this booklet carefully. If, after reading this booklet, you have any queries in relation to the Buy-Back, please see the JB Hi-FiBuy-Back website at https://jbhifibuyback.com.au or contact the shareholder information line on

1300 302 417 (within Australia) or [phone] (outside Australia).

If you do not wish to participate in the Buy-Back, you do not need to take any action.

If you wish to participate, please ensure your completed and signed Tender Form is received by the Registry by no later than 5.00pm (Melbourne time) on the Closing Date (8 April 2022).

Yours sincerely,

Stephen Goddard

Chairman

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