Item 2. Properties

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Stores, distribution centers and other properties:

Of the 5,784 stores we operated at December 31, 2021, 2,395 stores were owned, 3,318 stores were leased from unaffiliated parties, 24 of which were located in Mexico, and 71 stores were leased from entities that include one or more of our affiliated directors or members of their immediate family. Leases with unaffiliated parties generally provide for payment of a fixed base rent, payment of certain tax, insurance and maintenance expenses and an original term of, at a minimum, 10 years, subject to one or more renewals at our option. We have entered into separate master lease agreements with each of the affiliated entities for the occupancy of the stores covered thereby. Such master lease agreements with two of the five affiliated entities have been modified to extend the term of the lease agreement for specific stores. The master lease agreements or modifications thereto expire on dates ranging from December 31, 2022, to December 31, 2029. We believe that the lease agreements with the affiliated entities are on terms comparable to those of third parties.

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The following table provides information regarding our U.S. domestic regional DCs in operation as of December 31, 2021:

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In addition, we operate six small distribution centers in Mexico; these distribution centers do not serve U.S. stores and are immaterial in the aggregate. In 2021, the distribution operations of our Knoxville, Tennessee, DC finished merging into our Lebanon, Tennessee, DC and the existing store portion of our Knoxville, Tennessee, DC facility remains a large Hub that continues to provide same day parts availability in the Knoxville market. Additionally, we opened our new Horn Lake, Mississippi, DC in 2021, and when appropriate, we plan to merge our North Little Rock, Arkansas, DC into our new Horn Lake, Mississippi, DC. At that time, the existing store portion of our North Little Rock, Arkansas, DC facility will remain a large Hub that will continue to provide same day parts availability in the Little Rock market.

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We believe that our present facilities are in good condition, are sufficiently insured and are adequate for the conduct of our current operations. The store servicing capability of our 28 existing U.S. DCs is approximately 6,075 stores, providing a growth capacity of 300 to 450 U.S. stores. We believe the growth capacity in our DCs will provide us with the DC infrastructure needed for near-term expansion. However, as we expand our geographic footprint, we will continue to evaluate our existing distribution system infrastructure and will adjust our distribution system capacity as needed to support our future growth.

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Our corporate office operations occur primarily in Springfield, Missouri, and as of December 31, 2021, the total square footage was 0.6 million square feet, substantially all of which was owned.

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