Best Buy 2007 Annual Report Download - page 34

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19
PART I
At the end of fiscal 2007, we operated 121 Future Shop
stores, 47 Canada Best Buy stores, 135 Five Star stores and
one China Best Buy store, totaling approximately 7.9
million retail square feet.
Our International segment leases approximately 1.1 million
square feet of distribution center space in Brampton,
Ontario, and approximately 0.4 million square feet of
distribution center space in Burnaby, British Columbia to
service our Canada operations.
We also lease approximately 0.6 million square feet of
distribution center space in Jiangsu province, and an
additional 0.6 million square feet of distribution center
space throughout the Five Star retail chain to support our
Five Star distribution network.
The principal office for our Canada operations is located in
a 141,000-square-foot leased facility in Burnaby, British
Columbia. The principal office for our Five Star operations
is located in a 46,000-square-foot owned facility in
Nanjing, Jiangsu. The principal office for our China Best
Buy operations is located in a 27,000-square-foot leased
facility in Shanghai.
Global Sourcing
In support of our global sourcing initiative, we lease office
space in China totaling approximately 32,000 square feet
at the end of fiscal 2007.
Operating Leases
Almost all of our stores and a majority of our distribution
facilities are leased. Terms of the lease agreements
generally range from 10 to 20 years. Most of the leases
contain renewal options and escalation clauses.
Additional information regarding our operating leases is
available in Note 8, Leases, of the Notes to Consolidated
Financial Statements, included in Item 8, Financial
Statements and Supplementary Data, of this Annual Report
on Form 10-K.
Item 3.Legal Proceedings.
On December 8, 2005, a purported class action lawsuit
captioned, Jasmen Holloway, et al. v. Best Buy Co., Inc.,
was filed against us in the U.S. District Court for the
Northern District of California. This federal court action
alleges that we discriminate against women and minority
individuals on the basis of gender, race, color and/or
national origin in our stores with respect to recruitment,
hiring, job assignments, transfers, promotions,
compensation, allocation of weekly hours and other terms
and conditions of employment. The plaintiffs seek an end to
discriminatory policies and practices, an award of back and
front pay, punitive damages and injunctive relief, including
rightful place relief for all class members. We believe the
allegations are without merit and intend to defend this
action vigorously.
We are involved in various other legal proceedings arising
in the normal course of conducting business. We believe
the amounts provided in our consolidated financial
statements, as prescribed by GAAP, are adequate in light of
the probable and estimable liabilities. The resolution of
those proceedings is not expected to have a material effect
on our results of operations or financial condition.