Big Lots 2012 Annual Report Download - page 137

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 3 — Bank Credit Facility (Continued)
interest rates, pricing and fees under the 2011 Credit Agreement fluctuate based on our debt rating. The 2011
Credit Agreement allows us to select our interest rate for each borrowing from multiple interest rate options.
The interest rate options are generally derived from the prime rate, LIBOR, or CDOR. We may prepay
revolving loans made under the 2011 Credit Agreement. The 2011 Credit Agreement contains financial and
other covenants, including, but not limited to, limitations on indebtedness, liens and investments, as well as
the maintenance of two financial ratios – a leverage ratio and a fixed charge coverage ratio. A violation of any
of the covenants could result in a default under the 2011 Credit Agreement that would permit the lenders to
restrict our ability to further access the 2011 Credit Agreement for loans and letters of credit and require the
immediate repayment of any outstanding loans under the 2011 Credit Agreement. At February 2, 2013, we had
$171.2 million borrowings outstanding under the 2011 Credit Agreement and $5.4 million was committed to
outstanding letters of credit, leaving $523.4 million available under the 2011 Credit Agreement.
Note 4 — Fair Value Measurements
In connection with our nonqualified deferred compensation plan, we had mutual fund investments of $20.7
million and $19.6 million at February 2, 2013 and January 28, 2012, respectively, which were recorded in other
assets. These investments were classified as trading securities and were recorded at their fair value. The fair
values of mutual fund investments were Level 1 valuations under the fair value hierarchy because each fund’s
quoted market value per share was available in an active market.
The fair values of our long-term obligations are estimated based on the quoted market prices for the same or
similar issues and the current interest rates offered for similar instruments. These fair value measurements
are classified as Level 2 within the fair value hierarchy. Given the variable rate features and relatively short
maturity of the instruments underlying our long-term obligations, the carrying value of these instruments
approximates the fair value.
Note 5 — Leases
Leased property consisted primarily of 1,518 of our retail stores, 0.5 million square feet of warehouse space, and
certain transportation, information technology and other office equipment. Many of the store leases obligate us
to pay for our applicable portion of real estate taxes, CAM, and property insurance. Certain store leases provide
for contingent rents, have rent escalations, and have tenant allowances or other lease incentives. Many of our
leases contain provisions for options to renew or extend the original term for additional periods.
Total rent expense, including real estate taxes, CAM, and property insurance, charged to continuing operations
for operating leases consisted of the following:
(In thousands) 2012 2011 2010
Minimum leases ............................................. $309,923 $285,081 $261,197
Contingent leases ............................................ 460 637 587
Total rent expense......................................... $310,383 $285,718 $261,784
Future minimum rental commitments for leases, excluding closed store leases, real estate taxes, CAM, and
property insurance, at February 2, 2013, were as follows:
Fiscal Year (In thousands)
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 254,510
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214,327
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,663
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,420
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,888
Thereafter.................................. 152,366
Total leases .............................. $1,005,174