Big Lots 2011 Annual Report Download - page 176

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 7 — Share-Based Plans (Continued)
During 2011, 2010, and 2009, the following activity occurred under our share-based compensation plans:
(in thousands) 2011 2010 2009
Total intrinsic value of stock options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,747 $32,537 $5,079
Total fair value of restricted stock vested ............................... $11,618 $31,150 $6,954
The total unearned compensation cost related to all share-based awards outstanding at January 28, 2012 was
approximately $26.3 million. This compensation cost is expected to be recognized through January 2016 based
on existing vesting terms with the weighted-average remaining expense recognition period being approximately
1.7 years from January 28, 2012.
Note 8 — Employee Benefit Plans
Pension Benefits
We maintain the Pension Plan and Supplemental Pension Plan covering certain employees whose hire
date was on or before April 1, 1994. Benefits under each plan are based on credited years of service and
the employee’s compensation during the last five years of employment. The Supplemental Pension Plan is
maintained for certain highly compensated executives whose benefits were frozen in the Pension Plan in
1996. The Supplemental Pension Plan is designed to pay benefits in the same amount as if the participants
continued to accrue benefits under the Pension Plan. We have no obligation to fund the Supplemental Pension
Plan, and all assets and amounts payable under the Supplemental Pension Plan are subject to the claims of our
general creditors.
The components of net periodic pension expense were comprised of the following:
2011 2010 2009
(in thousands)
Service cost - benefits earned in the period .......................... $ 2,211 $ 2,433 $ 2,261
Interest cost on projected benefit obligation ......................... 3,496 3,254 3,726
Expected investment return on plan assets .......................... (4,627) (4,249) (3,172)
Amortization of prior service cost ................................. (34) (34) (34)
Amortization of transition obligation............................... 13 13 13
Amortization of actuarial loss .................................... 1,796 2,217 2,691
Settlement loss ................................................ 298 1,785 175
Net periodic pension cost..................................... $ 3,153 $ 5,419 $ 5,660
In 2011, 2010, and 2009, we incurred pretax non-cash settlement charges of $0.3 million, $1.8 million and
$0.2 million, respectively. The settlement charges were caused by lump sum benefit payments made to plan
participants in excess of combined annual service cost and interest cost for each year.
The weighted-average assumptions used to determine net periodic pension expense were:
2011 2010 2009
Discount rate .......................................................... 5.7% 5.7% 7.3%
Rate of increase in compensation levels ..................................... 3.9% 3.5% 3.5%
Expected long-term rate of return .......................................... 8.0% 8.0% 8.0%
The weighted-average assumptions used to determine benefit obligations were:
2011 2010
Discount rate ................................................................. 5.0% 5.7%
Rate of increase in compensation levels ............................................ 3.5% 3.9%