Best Buy 2001 Annual Report Download - page 51

Download and view the complete annual report

Please find page 51 of the 2001 Best Buy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 56

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56

52
$ in thousands, except per share amounts
6. Operating Lease Commitments
The Company currently both owns and leases portions of its corporate facilities and conducts essentially all of its retail and the
majority of its distribution operations from leased locations. The terms of the lease agreements generally range from three to 16 years
for Best Buy stores and three to 20 years for M usicland stores. The leases require payment of real estate taxes, insurance and common
area maintenance in addition to rent. M ost of the leases contain renewal options and escalation clauses, and the majority of the
Musicland stores and several Best Buy stores require contingent rents based on specified percentages of sales. Certain M usicland
store leases provide the Company with an early cancellation option if sales for a designated period do not reach a specified level
as defined in the lease. Certain leases contain covenants related to maintenance of financial ratios. Also, the Company leases
various equipment under operating leases. Transaction costs associated with the sale and leaseback of properties and any gain or
loss are recognized over the terms of the lease agreements. Proceeds from the sale and leaseback of properties are included in
the net change in recoverable costs from developed properties.
The composition of total rental expenses for all operating leases during the past three fiscal years, including leases of buildings and
equipment, was as follows:
2001 2000 1999
Minimum rentals $299,090 $227,500 $186 ,100
Percentage rentals 615 500 500
$299,705 $228,000 $186 ,600
Best Buy Co., Inc.N otes