Big Lots 2013 Annual Report Download - page 215

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The following table summarizes the components of our wind down activities associated with our Canadian segment and the
related liabilities for 2013:
(In thousands) Severance
Contract
Termination
Costs Total
Balance at Februar
y
2, 2013 $
—
$
—
$
—
Charges 2,739 1,276 4,015
Adjustments
—
—
—
Payments (319)
—
(319)
Period change 2,420 1,276 3,696
Balance at Februar
y
1, 2014 $2,420 $ 1,276 $ 3,696
During February 2014, we closed all stores in our Canadian segment, which will result in an estimated additional severance
charge associated with this exit activity in the range of $1.0 million to $2.0 million. In addition, contract termination costs,
primarily associated with our stores operating leases, will be recorded upon the cessation of our Canadian segment's operations
during the first quarter of 2014, which we estimate will be in the range of $28.0 million to $31.0 million.
NOTE 14 – DISCONTINUED OPERATIONS
Our discontinued operations for 2013, 2012, and 2011, were comprised of the following:
(In thousands) 2013 2012 2011
Wholesale business $(4,371)$423 $ 1,899
Closed stores
—
2 (19)
KB Toys matters 5,248 (78)(264)
Total income (loss) from discontinued operations, pretax $877 $347 $ 1,616
Wholesale Business
During the third quarter of 2013, we announced our intention to wind down the operations of our wholesale business, within
our U.S. segment. During the fourth quarter of 2013, we executed our wind down plan and ceased the operations of our
wholesale business; therefore, we determined the results of our wholesale business should be reported as discontinued
operations for all periods presented. The results of operations of our wholesale business primarily consist of sales of product to
wholesale customers, the costs associated with those products, and selling and administrative expenses, including personnel,
purchasing, warehousing, distributing, occupancy and overhead costs. Please see the Wholesale Business section of note 13 to
the consolidated financial statements for further information of the costs incurred during 2013.
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 2013, 2012, and 2011, the closed stores' operating income (loss) is comprised of exit-related costs,
utilities, and security expenses on leased properties with remaining terms.
KB Toys Matters
We acquired the KB Toys business from Melville Corporation (now known as CVS New York, Inc., and together with its
subsidiaries “CVS”) in May 1996. As part of that acquisition, we provided, among other things, an indemnity to CVS with
respect to any losses resulting from KB Toys' failure to pay all monies due and owing under any KB Toys lease or mortgage
obligation. While we controlled the KB Toys business, we provided guarantees with respect to a limited number of additional
KB Toys store leases. We sold the KB Toys business to KB Acquisition Corp. (“KBAC”), an affiliate of Bain Capital, pursuant
to a Stock Purchase Agreement. KBAC similarly agreed to indemnify us with respect to all lease and mortgage obligations.
These guarantee and lease obligations are collectively referred to as the “KB Lease Obligations.”