Big Lots 2014 Annual Report Download - page 131

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Subsequent Events
We have evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, we are not aware of
any events or transactions (other than those disclosed elsewhere) that occurred subsequent to the balance sheet date but prior to
filing that would require recognition or disclosure in our consolidated financial statements.
NOTE 2 – PROPERTY AND EQUIPMENT - NET
Property and equipment - net consist of:
(In thousands) January 31, 2015 February 1, 2014
Land and land improvements $ 51,044 $ 50,830
Buildings and leasehold improvements 838,663 835,117
Fixtures and equipment 716,315 692,152
Computer software costs 129,994 128,787
Transportation equipment 7,408 26,763
Construction-in-progress 17,632 6,791
Property and equipment - cost 1,761,056 1,740,440
Less accumulated depreciation and amortization 1,210,501 1,170,758
Property and equipment - net $ 550,555 $ 569,682
Property and equipment - cost includes $24.3 million and $4.2 million at January 31, 2015 and February 1, 2014, respectively,
to recognize assets from capital leases. Accumulated depreciation and amortization includes $4.4 million and $3.2 million at
January 31, 2015 and February 1, 2014, respectively, related to capital leases.
During 2014, 2013, and 2012 respectively, we invested $93.5 million, $104.8 million, and $131.3 million of cash in capital
expenditures and we recorded $119.7 million, $113.2 million, and $103.1 million of depreciation expense.
We incurred $3.5 million, $7.8 million, and $1.0 million in asset impairment charges in 2014, 2013, and 2012, respectively.
The charges in 2014 were primarily related to our corporate aircraft. During 2014, we made the decision to no longer own and
operate corporate aircraft and entered into sales agreements for both our corporate aircraft. We sold our older corporate aircraft
during the third quarter of 2014. At January 31, 2015, we still had possession of our newer corporate aircraft, but subsequent to
January 31, 2015, we completed the sale of that asset. When determining the fair value of the newer corporate aircraft, we
utilized other inputs that could be corroborated by observable market data; therefore the newer corporate aircraft was
considered to be Level 2. Additionally, we wrote down the value of long-lived assets at three stores identified as part of our
annual store impairment review. The total charges in 2013 principally related to the write-down of long-lived assets related to
our former Canadian operations. With no expected future cash flows from our former Canadian operations beyond the first
quarter of 2014, we impaired our property and equipment to its estimated salvage value at February 1, 2014, which resulted in
an impairment charge of $6.5 million, which has been included in results from discontinued operations. The remaining charges
in 2013 related to our continuing operations, which principally consisted of the write-down of long-lived assets at seven stores
identified as part of our annual store impairment review. The charges in 2012 principally related to the write-down of long-
lived assets at five stores identified as part of our annual store impairment review, four of the stores were related to our
discontinued Canadian operations.
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.