Bed, Bath and Beyond 2012 Annual Report Download - page 34

Nonqualified Deferred Compensation Plan
The Company has a nonqualified deferred compensation plan (‘‘NQDC’’) for the benefit of employees defined by the Internal
Revenue Service as highly compensated. Participants of the NQDC may defer annual pre-tax compensation subject to statutory
and plan limitations. In addition, a certain percentage of an employee’s contributions may be matched by the Company and
vest over a specified period of time, subject to certain plan limitations. The Company’s match was approximately $0.5 million,
$0.4 million and $0.4 million in fiscal 2012, 2011 and 2010, respectively, which was expensed as incurred.
Changes in the fair value of the trading securities related to the NQDC and the corresponding change in the associated liability
are included within interest income and selling, general and administrative expenses respectively, in the consolidated
statements of earnings. Historically, these changes have resulted in no impact to the consolidated statements of earnings.
Defined Benefit Plan
The Company has a non-contributory defined benefit pension plan for the CTS employees, hired on or before July 31, 2003,
who meet specified age and length-of-service requirements. The benefits are based on years of service and the employee’s
compensation near retirement. The Company recognizes the overfunded or underfunded status of the pension plan as an
asset or liability in its statement of financial position and recognizes changes in the funded status in the year in which the
changes occur. For the years ended March 2, 2013, February 25, 2012 and February 26, 2011, the net periodic pension cost was
not material to the Company’s results of operations. The Company has a $14.4 million and $14.6 million liability, which is
included in deferred rent and other liabilities as of March 2, 2013 and February 25, 2012, respectively. In addition, as of
March 2, 2013 and February 25, 2012, the Company recognized a loss of $3.8 million, net of taxes of $2.5 million, and a loss of
$3.9 million, net of taxes of $2.6 million, respectively, within accumulated other comprehensive loss.
11. COMMITMENTS AND CONTINGENCIES
The Company maintains employment agreements with its Co-Chairmen, which extend through June 30, 2013. The agreements
provide for a base salary (which may be increased by the Board of Directors), termination payments, postretirement benefits
and other terms and conditions of employment. In addition, the Company maintains employment agreements with other
executives which provide for severance pay and, in some instances, certain other supplemental retirement benefits.
The Company records an estimated liability related to its various claims and legal actions arising in the ordinary course of
business when and to the extent that it concludes a liability is probable and the amount of the loss can be reasonably
estimated. Such estimated loss is based on available information and advice from outside counsel, where appropriate. As
additional information becomes available, the Company reassesses the potential liability related to claims and legal actions
and revises its estimated liabilities, as appropriate. The Company expects the ultimate disposition of these matters will not
have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. The
Company also cannot predict the nature and validity of claims which could be asserted in the future, and future claims could
have a material impact on its earnings.
12. SUPPLEMENTAL CASH FLOW INFORMATION
The Company paid income taxes of $550.6 million, $568.6 million and $487.4 million in fiscal 2012, 2011 and 2010, respectively.
In addition, the Company had interest payments of approximately $6.0 million in fiscal 2012. The amount of interest paid by
the Company in fiscal 2011 was not material and the Company did not have any interest payments in fiscal 2010.
The Company recorded an accrual for capital expenditures of $37.0 million, $28.8 million and $17.8 million as of March 2,
2013, February 25, 2012 and February 26, 2011, respectively.
13. STOCK-BASED COMPENSATION
The Company measures all employee stock-based compensation awards using a fair value method and records such expense,
net of estimated forfeitures, in its consolidated financial statements. Currently, the Company’s stock-based compensation
relates to restricted stock awards and stock options. The Company’s restricted stock awards are considered nonvested share
awards.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
BED BATH & BEYOND 2012 ANNUAL REPORT
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