Best Buy 2011 Annual Report Download - page 19

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Defending against lawsuits and other proceedings may involve significant expense and divert management’s attention and
resources from other matters.
Changes to the National Labor Relations Act or other labor-related statutes or regulations could have a
material adverse impact on our business.
The National Labor Relations Board is considering changes to labor regulations which could significantly impact the nature
of labor relations in the U.S. and how union elections and contract negotiations are conducted. At February 26, 2011,
none of our U.S. stores had employees represented by labor unions or working under collective bargaining agreements.
Changes in labor-related statutes or regulations could make it easier for unions to be formed, and employers of newly
unionized employees may face mandatory, binding arbitration of labor scheduling, costs and standards, which could
increase our costs of doing business and materially adversely affect our results of operations.
Additional legislation or rulemaking relating to environmental matters, including but not limited to, energy
emissions, could have a material adverse impact on our business.
Environmental legislation or rulemaking efforts could impose unexpected costs or impact us more directly than other
companies due to our operations as a global consumer electronics retailer with over 4,000 stores and 90 distribution
centers worldwide.
Specifically, legislation that aims to control and reduce energy emissions has been considered by the U.S. Congress as
well as governing bodies internationally, particularly in Europe. Should such legislation pass, we anticipate that energy
costs within our operations would increase such as the expense to power our stores. In addition, rulemaking is being
considered that could impose higher safety and compliance standards on transporting certain goods. Any significant
rulemaking could increase the cost to transport our goods. Passage of any such legislation or rulemaking could materially
adversely affect our results of operations.
Regulatory developments in the U.S. could impact the promotional financing offers available to our credit
card customers and have a material adverse impact on our revenue and profitability.
We offer promotional financing in the U.S. through credit cards issued by third party banks that manage and directly
extend credit to our customers. The cardholders can receive low- or no-interest promotional financing on qualifying
purchases. Promotional financing credit card sales accounted for 18%, 17% and 18% of our Domestic segment’s revenue
in fiscal 2011, 2010 and 2009, respectively.
Recent economic developments, particularly in the financial markets, have resulted in increased legislative and regulatory
actions affecting credit cards. Recently enacted legislative and regulatory changes that focus on a variety of credit-related
matters, such as the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (‘‘Credit CARD Act’’), included
new rules and restrictions affecting interest rates, penalties and fees, contract terms, credit limits, billing practices and
payment application. While we believe that neither the Credit CARD Act nor other recently enacted legislation or
regulation related to credit matters have had a material adverse impact on our operations to date, if future legislative or
regulatory restrictions or prohibitions arise that affect our ability to offer promotional financing and we are unable to
adjust our operations in a timely manner, our revenue and profitability may be materially adversely affected.
Changes to our credit card agreements could adversely impact our ability to facilitate the provision of
consumer credit to our customers and could materially adversely impact our results of operations.
We have agreements with third party banks for the issuance of promotional financing and customer loyalty credit cards
bearing the Best Buy brand. Under the agreements, the banks manage and directly extend credit to our customers. The
banks are the sole owner of the accounts receivable generated under the credit card programs and absorb losses
associated with non-payment by the cardholders and fraudulent usage of the accounts. We earn revenue from fees the
banks pay to us based on the number of credit card accounts activated and card usage. The banks also reimburse us for
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