Big Lots 2011 Annual Report Download - page 184

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10 — Commitments, Contingencies and Legal Proceedings (Continued)
plaintiffs’ class certification motion. In April 2010, the court granted, with prejudice, our motion to deny class
certification. Accordingly, the claims of one plaintiff remained before the court. The Caron matter is similar in
nature to the Sample matter described below.
In June 2010, a representative enforcement action was filed against us in the Superior Court of California,
Alameda County, alleging that we violated certain California wage and hour laws for missed meal and rest
periods and other wage and hour claims (“Sample matter”). The plaintiff seeks to recover, on her behalf and
on behalf of a California statewide class consisting of all other individuals who are similarly situated, damages
resulting from allegedly unpaid overtime, unpaid meal period premiums, unpaid rest period premiums, unpaid
business expenses, non-payment of wages at termination, untimely payment of wages, noncompliant wage
statements, failure to provide seating, and attorneys’ fees and costs. In December 2011, we entered into a
confidential settlement agreement with the plaintiffs in the Caron and Sample matters. The settlement remains
subject to objection and requires court approval to become final. We currently believe that the Caron and
Sample matters will collectively be resolved without a material effect on our financial condition, results of
operations, or liquidity.
In February 2011, a class action complaint was filed against us in the Superior Court of California, Los Angeles
County, alleging that we violated certain California wage and hour laws (“Martinez matter”). The plaintiffs
seek to recover, on behalf of the named plaintiff and a California statewide class consisting of all other similarly
situated current and former warehouse employees, damages for alleged missed meal periods, unpaid meal
period premiums, unpaid overtime, unpaid vested vacation, unpaid wages at termination, untimely payment of
wages, noncompliant wage statements, failure to keep accurate payroll records, and attorneys’ fees and costs.
We answered the plaintiff’s complaint in March 2011. The parties engaged in limited discovery. In February
2012, we entered into a confidential settlement agreement with the plaintiffs and the court preliminarily
approved the settlement in March 2012. The settlement remains subject to objection and requires further court
approval to become final. We currently believe that the Martinez matter will be resolved without a material
effect on our financial condition, results of operations, or liquidity.
We are involved in other legal actions and claims arising in the ordinary course of business. We currently
believe that each such action and claim will be resolved without a material effect on our financial condition,
results of operations, or liquidity. However, litigation involves an element of uncertainty. Future developments
could cause these actions or claims to have a material effect on our financial condition, results of operations,
and liquidity.
For a discussion of discontinued operations, including KB Toys matters, see note 13.
We are self-insured for certain losses relating to property, general liability, workers’ compensation, and
employee medical and dental benefit claims, a portion of which is paid by employees, and we have purchased
stop-loss coverage in order to limit significant exposure in these areas. Accrued insurance liabilities are
actuarially determined based on claims filed and estimates of claims incurred but not reported.
We have purchase obligations for outstanding purchase orders for merchandise issued in the ordinary course
of our business that are valued at $514.0 million, the entirety of which represents obligations due within one
year of January 28, 2012. In addition, we have a purchase commitment for future inventory purchases totaling
$80.8 million at January 28, 2012. We paid $28.0 million, $29.7 million, and $28.9 million related to this
commitment during 2011, 2010, and 2009, respectively. We are not required to meet any periodic minimum
purchase requirements under this commitment. The term of the commitment extends until the purchase
requirement is satisfied. We have additional purchase obligations in the amount of $221.2 million primarily
related to distribution and transportation, information technology, print advertising, energy procurement, and
other store security, supply, and maintenance commitments.