Big Lots 2012 Annual Report Download - page 136

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 2 — Property and Equipment — Net
Property and equipment - net consist of:
February 2,
2013
January 28,
2012
(In thousands)
Land and land improvements........................................... $ 50,797 $ 45,130
Buildings and leasehold improvements ................................... 803,267 768,074
Fixtures and equipment ............................................... 674,684 637,658
Computer software costs .............................................. 114,572 87,290
Transportation equipment ............................................. 27,303 35,604
Construction-in-progress .............................................. 23,759 38,230
Property and equipment - cost .................................... 1,694,382 1,611,986
Less accumulated depreciation and amortization...................... 1,100,820 1,039,219
Property and equipment - net ..................................... $ 593,562 $ 572,767
Property and equipment - cost includes $4.2 million and $5.8 million at February 2, 2013 and January 28, 2012,
respectively, to recognize assets from capital leases. Accumulated depreciation and amortization includes $2.2
million and $2.7 million at February 2, 2013 and January 28, 2012, respectively, related to capital leases.
During 2012, 2011, and 2010 respectively, we invested $131.3 million, $131.3 million, and $107.6 million of cash in
capital expenditures and we recorded $106.3 million, $90.3 million, and $78.6 million of depreciation expense.
We incurred $1.0 million, $2.2 million, and less than $0.1 million in asset impairment charges in 2012, 2011,
and 2010, respectively. The charges in 2012 principally related to the write-down of long-lived assets at one U.S.
store and four Canadian stores identified as part of our annual store impairment review. The charges in 2011
relate to asset impairments from the valuation of the Company’s oldest airplane. The charges in 2010 principally
related to the write-down of long-lived assets at one U.S. store identified as part of our annual store impairment
review in 2010.
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 generally use actual historical cash flows to determine if stores had negative cash flows within the
past two years. For each store with 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.
Note 3 — Bank Credit Facility
On July 22, 2011, we entered into a $700 million five-year unsecured credit facility (“2011 Credit Agreement”).
The 2011 Credit Agreement replaced the $500 million three-year unsecured credit facility we entered into on
April 28, 2009 (“2009 Credit Agreement”). We did not incur any material termination penalties in connection
with the termination of the 2009 Credit Agreement.
The 2011 Credit Agreement expires on July 22, 2016. In connection with our entry into the 2011 Credit
Agreement, we paid bank fees and other expenses in the aggregate amount of $3.0 million, which are being
amortized over the term of the agreement. Borrowings under the 2011 Credit Agreement are available for
general corporate purposes, working capital, and to repay certain of our indebtedness. The 2011 Credit
Agreement includes a $10 million Canadian swing loan sublimit, a $30 million U.S. swing loan sublimit,
a $150 million letter of credit sublimit and a $200 million Canadian revolving credit loan subfacility. The