Big Lots 2013 Annual Report Download - page 189

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
We are the largest broadline closeout retailer in the U.S. At February 1, 2014, we operated 1,570 stores in the United States of
America (“U.S.”) and Canada. Our goal is to strengthen and build upon our leadership position in broadline closeout retailing
by providing our customers with great savings on brand-name closeouts and other value-priced merchandise.
During the first quarter of 2014, we ceased all operations in Canada. Please see the Canadian Segment section of note 13 to
the consolidated financial statements for further information on the wind down of our operations in Canada.
Basis of Presentation
The consolidated financial statements include Big Lots, Inc. and all of its subsidiaries, have been prepared in accordance with
accounting principles generally accepted in the United States of America (“GAAP”), and include all of our accounts. We
consolidate all majority-owned and controlled subsidiaries. All intercompany accounts and transactions have been eliminated.
Management Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and
liabilities at the date of the financial statements. The use of estimates, judgments, and assumptions creates a level of
uncertainty with respect to reported or disclosed amounts in our consolidated financial statements or accompanying notes. On
an ongoing basis, management evaluates its estimates, judgments, and assumptions, including those that management considers
critical to the accurate presentation and disclosure of our consolidated financial statements and accompanying notes.
Management bases its estimates, judgments, and assumptions on historical experience, current trends, and various other factors
that it believes are reasonable under the circumstances. Because of the inherent uncertainty in using estimates, judgments, and
assumptions, actual results may differ from these estimates.
Fiscal Periods
Our fiscal year ends on the Saturday nearest to January 31, which results in fiscal years consisting of 52 or 53 weeks. Unless
otherwise stated, references to years in this report relate to fiscal years rather than calendar years. Fiscal year 2013 (“2013”) is
comprised of the 52 weeks that began on February 3, 2013 and ended on February 1, 2014. Fiscal year 2012 (“2012”) was
comprised of the 53 weeks that began on January 29, 2012 and ended on February 2, 2013. Fiscal year 2011 (“2011”) was
comprised of the 52 weeks that began on January 30, 2011 and ended on January 28, 2012.
Segment Reporting
We manage our broadline closeout retailing business based on two segments: the U.S. and Canada.
Cash and Cash Equivalents
Cash and cash equivalents primarily consist of amounts on deposit with financial institutions, outstanding checks, credit and
debit card receivables, and highly liquid investments, including money market funds and variable rate demand notes, which are
unrestricted to withdrawal or use and which have an original maturity of three months or less. We review cash and cash
equivalent balances on a bank by bank basis in order to identify book overdrafts. Book overdrafts occur when the amount of
outstanding checks exceed the cash deposited at a given bank. We reclassify book overdrafts, if any, to accounts payable on
our consolidated balance sheets. Amounts due from banks for credit and debit card transactions are typically settled in less than
seven days, and at February 1, 2014 and February 2, 2013, totaled $24.5 million and $24.6 million, respectively.
Restricted Cash
Our restricted cash served as collateral, in place of an irrevocable stand-by letter of credit, to provide financial assurance that
we would fulfill our obligations with respect to cash requirements associated with self-insurance. The cash was on deposit with
our insurance carrier.