Bed, Bath and Beyond 2004 Annual Report Download - page 11

BED BATH & BEYOND ANNUAL REPORT 2004
9
Self Insurance: The Company utilizes a combination of insurance and self insurance for a number of risks including
workers compensation, general liability, automobile liability and employee related health care benefits (a portion
of which is paid by its employees). Liabilities associated with the risks that the Company retains are estimated by con-
sidering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Although
the Company’s claims experience has not displayed substantial volatility in the past, actual experience could material-
ly vary from its historical experience in the future. Factors that affect these estimates include but are not limited to:
inflation, the number and severity of claims and regulatory changes. In the future, if the Company concludes an
adjustment to self insurance accruals is required, the liability will be adjusted accordingly.
Litigation: The Company records an estimated liability related to various claims and legal actions arising in the ordi-
nary course of business which is based on available information and advice from outside counsel, where appropriate.
As additional information becomes available, the Company reassesses the potential liability related to its pending
litigation and revises its estimates as appropriate. The Company cannot predict the nature and validity of claims
which could be asserted in the future, and future claims could have a material impact on its earnings.
Store Opening, Expansion, Relocation and Closing Costs: Store opening, expansion, relocation and closing costs,
including estimates for markdowns, asset residual values and projected occupancy costs, are charged to earnings as
incurred. Prior to the adoption of SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,”
which was effective for any exit or disposal activity initiated after December 31, 2002, costs related to store reloca-
tions and closings were provided for in the period in which management approved the relocation or closing of a
store. Actual costs related to store relocations and closings could differ from these estimates.
FORWARD LOOKING STATEMENTS
This Annual Report and, in particular, Management’s Discussion and Analysis of Financial Condition and Results of
Operations, and the Shareholder Letter, contain forward looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended. The Company’s actual results and future financial condition may
differ materially from those expressed in any such forward looking statements as a result of many factors that may
be outside the Company’s control. Such factors include, without limitation: general economic conditions, changes in
the retailing environment and consumer spending habits, demographics and other macroeconomic factors that may
impact the level of spending for the types of merchandise sold by the Company; unusual weather patterns; competi-
tion from existing and potential competitors; competition from other channels of distribution; pricing pressures;
the ability to find suitable locations at acceptable occupancy costs to support the Company’s expansion program; and
the cost of labor, merchandise and other costs and expenses.