Big Lots 2012 Annual Report Download - page 151

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 11 — Acquisition
On July 18, 2011, we completed our acquisition of Liquidation World Inc. Under the terms of our acquisition
agreement, we invested approximately $1.9 million in cash to purchase all outstanding shares of Liquidation
World Inc. As part of the acquisition, we assumed the liabilities and acquired all assets and leasehold rights of
Liquidation World Inc. On July 19, 2011, we changed the name of Liquidation World Inc. to Big Lots Canada,
Inc. (“Big Lots Canada”). The results of Big Lots Canada since the acquisition date are included in our
consolidated financial statements. The following table summarized both the preliminary and the final allocation
of the purchase price to the fair value of assets acquired and liabilities assumed.
Preliminary
Allocation Revisions
Allocation
As Revised
(In thousands)
Financial assets .............................................. $ 3,149 $ 715 $ 3,864
Inventory ................................................... 7,299 1,568 8,867
Other current assets ........................................... 2,278 133 2,411
Property and equipment ....................................... 10,172 (344) 9,828
Goodwill ................................................... 21,507 (7,589) 13,918
Other intangibles ............................................. 1,285 (226) 1,059
Debt ....................................................... (16,664) — (16,664)
Accounts payable and accrued liabilities .......................... (27,157) 5,743 (21,414)
$ 1,869 $ 1,869
Other intangibles consist of tradename and lease assets and liabilities, which at the date of acquisition had
useful lives of up to 11.2 years.
Note 12 — Goodwill
The changes in the carrying amount of goodwill, which is generally not deductible for income tax purposes, for
the fiscal years 2012 and 2011 were as follows:
2012 2011
(In thousands)
Beginning of year ........................................................ $12,282 $ —
Goodwill from acquisition .............................................. — 21,507
Goodwill adjustments .................................................. 1,191 (8,780)
Foreign currency impact ................................................ 49 (445)
End of year ............................................................. $13,522 $12,282
The goodwill from acquisition was the result of our acquisition of Liquidation World Inc. in the second quarter
of 2011, and primarily related to fair value adjustments on our intangible assets and liabilities associated with
the acquired operating leases. For a discussion of the acquisition, see note 11.
Note 13 — Discontinued Operations
Our discontinued operations for 2012, 2011, and 2010, were comprised of the following:
2012 2011 2010
(In thousands)
Closed stores ....................................................... $ 2 $ (19) $ 81
KB Toys matters .................................................... (78) (264) (118)
Total income (loss) from discontinued operations, pretax ................. $(76) $(283) $ (37)
Closed Stores
In 2005, we determined that the results of 130 stores closed in 2005 should be reported as discontinued
operations for all periods presented. For 2012, 2011, and 2010, the closed stores’ operating income (loss) is
comprised of exit-related costs, utilities, and security expenses on leased properties with remaining terms.