Best Buy 2007 Annual Report Download - page 31

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16
overhead costs, causing our business and results of
operations to suffer materially.
Failure to protect the integrity and security of our
customers’ information could expose us to litigation and
materially damage our standing with our customers.
The increasing costs associated with information security —
such as increased investment in technology, the costs of
compliance with consumer protection laws and costs
resulting from consumer fraud — could cause our business
and results of operations to suffer materially. Additionally,
the success of our online operations depends upon the
secure transmission of confidential information over public
networks, including the use of cashless payments. While we
are taking significant steps to protect customer and
confidential information, there can be no assurance that
advances in computer capabilities, new discoveries in the
field of cryptography or other developments will prevent the
compromise of our customer transaction processing
capabilities and personal data. If any such compromise of
our information security were to occur, it could have a
material adverse effect on our reputation, business,
operating results and financial condition and may increase
the costs we incur to protect against such information
security breaches.
Failure in our pursuit or execution of new business
ventures, strategic alliances and acquisitions could have a
material adverse impact on our business.
Our growth strategy includes expansion via new business
ventures, strategic alliances and acquisitions. While we
employ several different valuation methodologies to assess
a potential growth opportunity, we can give no assurance
that new business ventures and strategic alliances will
positively affect our financial performance. Acquisitions may
result in the diversion of our capital and our management’s
attention from other business issues and opportunities. We
may not be able to assimilate or integrate successfully
companies that we acquire, including their personnel,
financial systems, distribution, operations and general
operating procedures. If we fail to assimilate or integrate
acquired companies successfully, our business could suffer
materially. We may also encounter challenges in achieving
appropriate internal control over financial reporting in
connection with the integration of an acquired company. In
addition, the integration of any acquired company, and its
financial results, into ours may have a material adverse
effect on our operating results.
We are highly dependent on the cash flows and net
earnings we generate during our fourth fiscal quarter,
which includes the majority of the holiday selling season.
Approximately one-third of our revenue and more than
one-half of our net earnings are generated in our fourth
fiscal quarter, which includes the majority of the holiday
selling season in the United Sates and Canada. Unexpected
events or developments such as natural disasters, man-
made disasters and adverse economic conditions in our
fourth quarter could have a material adverse effect on our
revenue and earnings.
The foregoing should not be construed as an exhaustive list
of all factors that could cause actual results to differ
materially from those expressed in forward-looking
statements made by us or on our behalf.
Item 1B. Unresolved Staff Comments.
Not applicable.