Big Lots 2008 Annual Report Download - page 74

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Also note that we provide the following cautionary discussion of risks, uncertainties, and assumptions relevant
to our businesses. There can be no assurances that we have correctly and completely identified, assessed, and
accounted for all factors that do or may affect our business, financial condition, results of operations, and
liquidity. These are factors that, individually or in the aggregate, we think could cause our actual results to
differ materially from expected and historical results. Additional risks not presently known to us or that we
presently believe to be immaterial also may adversely impact us. Should any risks or uncertainties develop into
actual events, these developments could have material adverse effects on our business, financial condition,
results of operations, and liquidity. Consequently, all of the forward-looking statements are qualified by these
cautionary statements, and there can be no assurance that the results or developments we anticipate will be
realized or that they will have the expected effects on our business or operations. We note these factors for
investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is
not possible to predict or identify all such factors. Consequently, you should not consider the following to be a
complete discussion of all potential risks or uncertainties.
Our ability to achieve the results contemplated by forward-looking statements is subject to a number of
factors, any one, or a combination, of which could materially affect our business, financial condition, results of
operations, or liquidity. These factors may include, but are not limited to:
The current conditions in the financial markets combined with the current economic conditions (including
falling home prices, increased levels of unemployment, foreclosures on mortgages, bankruptcies, and reduced
access to credit) are extraordinary and give rise to risks and uncertainties that may adversely affect our capital
resources, financial condition, results of operations, and liquidity including, but not limited to the following:
• Consumers may defer or elect to forego purchases in response to tighter credit and negative financial
news. Reduced consumer spending may reduce our net sales, which could lower our profitability and
limit our ability to convert merchandise inventories to cash.
• Fluctuating commodity prices, including but not limited to diesel fuel and other fuels used to
generate power by utilities, may affect our gross profit and operating profit margins.
• The impact of these conditions on our vendors’ businesses cannot be predicted. Our vendors may be
negatively impacted due to insufficient availability of credit to fund their operations or insufficient
demand for their products, which may affect their ability to fulfill their obligations to us.
• Our expectations regarding the demand for our merchandise may be inaccurate, which could cause
us to under buy or over buy certain categories or departments of merchandise, which could result in
customer dissatisfaction or excessive markdowns required to sell through the merchandise.
• The reaction of our competitors to the marketplace, including the emerging trend of liquidations
occurring at bankrupt retailers, may drive our competitors, some of whom are better capitalized than
us, to offer significant discounts or promotions on their merchandise, which could negatively affect
our sales and profit margins.
• A downgrade in our credit rating could negatively affect our ability to access capital or increase the
borrowing rates we pay.
• A further decline in the market value of our qualified defined benefit pension plan’s (“Pension Plan”)
investment portfolios may affect our financial condition, results of operations, and liquidity.
Additionally, many of the effects and consequences of the financial crisis and broad economic downturn are
currently unknown and beyond our control; any one or all of them could potentially have a material adverse
impact on our capital resources, financial condition, results of operations, and liquidity.
If we are unable to continue to successfully execute our operating strategies, our operating performance
could be significantly impacted.
There is a risk that we will be unable to continue to meet or exceed our operating performance targets and goals
in the future if our strategies and initiatives are unsuccessful. In 2008, we were able to meet or exceed many
of our operating performance targets and goals that we announced in 2007. When announced, we expected