Bed, Bath and Beyond 2014 Annual Report Download - page 34

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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 up until 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 February 28, 2015, March 1, 2014 and March 2, 2013, the net periodic pension cost was not
material to the Company’s results of operations. The Company has a $18.4 million and $9.2 million liability, which is included in
deferred rent and other liabilities as of February 28, 2015 and March 1, 2014, respectively. In addition, as of February 28, 2015
and March 1, 2014, the Company recognized a loss of $6.1 million, net of taxes of $4.0 million, and a loss of $0.5 million, net of
taxes of $0.4 million, respectively, within accumulated other comprehensive loss.
11. COMMITMENTS AND CONTINGENCIES
The Company maintains employment agreements with its Co-Chairmen, which extend through February 25, 2017. 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 $554.4 million, $562.4 million and $550.6 million in fiscal 2014, 2013 and 2012, respectively.
In addition, the Company had interest payments of approximately $48.2 million, $9.2 million and $6.0 million in fiscal 2014,
2013 and 2012, respectively.
The Company recorded an accrual for capital expenditures of $57.8 million, $50.2 million and $37.0 million as of February 28,
2015, March 1, 2014 and March 2, 2013, 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, stock options and performance share units. The Company’s restricted stock awards are
considered nonvested share awards.
Stock-based compensation expense for the fiscal year ended February 28, 2015, March 1, 2014 and March 2, 2013 was
approximately $66.5 million ($42.4 million after tax or $0.22 per diluted share), $56.2 million ($35.6 million after tax or $0.17
per diluted share) and approximately $47.2 million ($30.0 million after tax or $0.13 per diluted share), respectively. In addition,
the amount of stock-based compensation cost capitalized for the years ended February 28, 2015 and March 1, 2014 was
approximately $1.9 million and $1.6 million, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
BED BATH & BEYOND 2014 ANNUAL REPORT
32