Big Lots 2012 Annual Report Download - page 112

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32
receipts collected from stores for merchandise sales and other miscellaneous deposits; and (2) cash outflows
such as check clearings for the acquisition of merchandise, wire and other electronic transactions for the
acquisition of merchandise, payroll and other operating expenses, income and other taxes, employee benefits,
and other miscellaneous disbursements.
Cash provided by operating activities decreased by $37.4 million to $281.1 million in 2012 compared to
$318.5 million in 2011. The decrease was primarily driven by the decrease in net income of $30.0 million
to $177.1 million in 2012 from $207.1 million in 2011. In addition, the decrease was impacted by growth in
our inventories in comparison to our accounts payable, which resulted in a $26.3 million use of cash. These
decreases were partially offset by an increase in depreciation and amortization expense of $12.7 million to
$95.6 million in 2012 from $82.9 million in 2011. From an operational perspective, our accounts payable
leverage ratio (accounts payable divided by inventory) remained relatively consistent at 43% at February 2, 2013
compared to 42% at January 28, 2012. Our inventories increased as a result of our net store growth in
the U.S., increases in same store inventories in the U.S., and growth in the assortment of our Canadian
stores’ inventories.
Cash used in investing activities increased by $9.7 million to $130.4 million in 2012 compared to $120.7 million
in 2011. The increase was primarily due to a non-recurring return of an $8.0 million deposit with an insurance
carrier in 2011 that caused an $8.0 million cash flow change from 2011 to 2012.
Cash used in financing activities decreased by $148.0 million to $158.3 million in 2012 compared to
$306.3 million in 2011. The primary driver of the decrease in cash used in financing activities in 2012 and
2011 was a decrease in share repurchase activities of $60.8 million. In 2012, we acquired $298.5 million
of our common shares ($98.5 million under the 2011 Repurchase Program and $200.0 million under the
2012 Repurchase Program), as compared to the $359.3 million of our common shares we acquired in 2011
($57.8 million under the 2010 Repurchase Program and $301.5 million under the 2011 Repurchase Program).
Also contributing to the decrease was our increased receipt of proceeds from borrowings under our bank credit
facility which accounts for $39.4 million. In addition, during the second quarter of 2011, we used $16.7 million
to repay the outstanding notes payable we assumed in connection with our acquisition of Liquidation World
Inc., driving a $16.7 million change in cash flow from 2012 to 2011. In 2012, we received proceeds from the
exercise of stock options of $33.3 million, compared to $10.4 million in 2011. The exercise of stock options also
generated excess tax benefits of $8.1 million and $2.7 million in 2012 and 2011, respectively.
Based on historical and expected financial results, we believe that we have or, if necessary, have the ability
to obtain, adequate resources to fund ongoing and seasonal working capital requirements, proposed capital
expenditures, new projects, and currently maturing obligations.
Contractual Obligations
The following table summarizes payments due under our contractual obligations at February 2, 2013:
Payments Due by Period (1)
(In thousands) Tot a l
Less than
1 year 1 to 3 years 3 to 5 years
More than
5 years
Obligations under bank credit facility (2) ..... $ 171,367 $ 167 $ — $171,200 $ —
Operating lease obligations (3) (4) ............ 1,308,608 328,858 495,133 283,872 200,745
Capital lease obligations (4) ................ 2,273 1,266 1,005 2 —
Purchase obligations (4) (5) . . . . . . . . . . . . . . . . . 668,657 598,055 48,926 21,617 59
Other long-term liabilities (6) .............. 33,197 6,267 5,583 5,560 15,787
Total contractual obligations (7) .......... $2,184,102 $934,613 $550,647 $482,251 $216,591
(1) The disclosure of contractual obligations in this table is based on assumptions and estimates that we
believe to be reasonable as of the date of this report. Those assumptions and estimates may prove to be
inaccurate; consequently, the amounts provided in the table may differ materially from those amounts
that we ultimately incur. Variables that may cause the stated amounts to vary from the amounts actually