Big Lots 2010 Annual Report Download - page 125

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 1 — Summary of Significant Accounting Policies (Continued)
Subsequent Events
We have evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, we
are not aware of any events or transactions (other than those disclosed elsewhere) that occurred subsequent
to the balance sheet date but prior to filing that would require recognition or disclosure in our consolidated
financial statements.
Note 2 — Property and Equipment — Net
Property and equipment – net consist of:
January 29, 2011 January 30, 2010
(In thousands)
Land and land improvements .......................................... $ 45,104 $ 44,818
Buildings and leasehold improvements................................... 734,578 698,988
Fixtures and equipment ............................................... 605,492 635,377
Computer software costs .............................................. 84,738 68,175
Transportation equipment ............................................. 21,652 29,192
Construction-in-progress.............................................. 20,592 28,563
Property and equipment - cost .................................... 1,512,156 1,505,113
Less accumulated depreciation and amortization...................... 987,250 1,013,857
Property and equipment - net ..................................... $ 524,906 $ 491,256
Property and equipment - cost includes $7.3 million and $7.8 million at January 29, 2011 and January 30, 2010,
respectively, to recognize assets from capital leases. Accumulated depreciation and amortization includes $5.2
million and $4.3 million at January 29, 2011 and January 30, 2010, respectively, related to capital leases.
During 2010, we invested $107.6 million of cash in capital expenditures and we recorded $78.6 million of
depreciation expense. Additionally, in the fourth quarter of 2010, we completed a review of assets located in our
stores, which resulted in the retirement of fixtures and equipment that were no longer in-use and had a net book
value of less than $0.1 million. The assets that were retired had a gross cost and accumulated depreciation of
$80.8 million.
We incurred less than $0.1 million, $0.4 million, and $0.1 million in asset impairment charges in 2010, 2009,
and 2008, respectively. These charges principally related to the write-down of long-lived assets at one, four, and
six stores identified as part of our annual store impairment review in 2010, 2009, and 2008, respectively. Asset
impairment charges are included in selling and administrative expenses in our accompanying consolidated
statements of operations. We perform annual impairment reviews of our long-lived assets at the store level.
When we perform the annual impairment reviews, we first determine which stores had impairment indicators
present. We use actual historical cash flows to determine which stores had negative cash flows in each of the
past two years (on a rolling basis). For each store with two years of negative cash flows, we obtain future cash
flow estimates based on operating performance estimates specific to each store’s operations that are based
on assumptions currently being used to develop our company level operating plans. If the net book value of a
store’s long-lived assets is not recoverable by the expected future cash flows of the store, we estimate the fair
value of the store’s assets and recognize an impairment charge for the excess net book value of the store’s long-
lived assets over their fair value. The fair value of store assets is estimated based on information available in the
marketplace for similar assets.