Best Buy 2000 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2000 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 52

  • 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

43
$ in thousands, except per share amounts
Best Buy Co., Inc. Fiscal 2000 Annual Report
6. Operating Lease Commitments and Related-Party Transactions
The Company currently owns the majority of its corporate headquarters facilities and conducts essentially
all of its retail and the majority of its distribution operations from leased locations. 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. In addition to rent, the leases require payment of real estate taxes, insurance
and common area maintenance. Most of the leases contain renewal options and escalation clauses, and several
require contingent rents based on specified percentages of sales. Certain leases also contain covenants related
to maintenance of financial ratios. The Company also leases various equipment under operating leases.
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:
2000 1999 1998
Minimum rentals $ 227,500 $ 186,100 $ 161,500
Percentage rentals 500 500 400
$ 228,000 $ 186,600 $ 161,900
As of February 26, 2000, three stores were leased from the Company’s CEO and principal shareholder,
or partnerships in which he is a partner. Rent under these leases during the past three fiscal years and one
additional store, leased from his spouse, for which the lease expired in January 1998, was as follows:
2000 1999 1998
Minimum rentals $ 1,000 $ 800 $ 900
Percentage rentals 300 400 400
$ 1,300 $ 1,200 $ 1,300
Notes to Consolidated Financial Statements