300 Phillipi Rd., Columbus, OH 43228 X 614.278.6800 X www.biglots.com FINANCIAL HIGHLIGHTS (Unaudited Adjusted Results) COMPANY INFORMATION Fiscal Year ($ in thousands, except per share amounts and sales per selling square foot) 2 011 ( a ) 2 010 2009 Earnings Data Transfer Agent & Registrar Notice of Annual Meeting Net sales $ 5,202,269 $ 4,952,244 $ 4,726,772 Net sales increase 5.0% 4.8% 1.8% Computershare Investor Services The Annual Meeting of Shareholders will be held at Income from continuing operations (b) $ 207,235 $ 222,547 $ 195,627 250 Royall Street 9:00 a.m. EDT on Wednesday, May 23, 2012, at Income from continuing operations (decrease) increase (b) (6.9)% 13.8% 26.4% Canton, Massachusetts 02021 our corporate office, 300 Phillipi Road, Columbus, Earnings from continuing operations per share - diluted (b) $ 2.99 $ 2.83 $ 2.37 Earnings from continuing operations per share - diluted increase (b) 5.7% 19.4% 25.4% (800) 622-6757 (in the U.S., Canada & Puerto Rico) Ohio. Whether or not you plan to attend, you are Average diluted common shares outstanding (000's) 69,419 78,581 82,681 (781) 575-4735 (outside the U.S., Canada & Puerto Rico) encouraged to vote as soon as possible. In accordance Gross margin - % of net sales 39.8% 40.6% 40.6% Selling and administrative expenses - % of net sales (b) 31.4% 31.8% 32.3% www.computershare.com/investor or with the accompanying proxy statement, shareholders Depreciation expense - % of net sales 1.7% 1.6% 1.6% [email protected] who attend the meeting may withdraw their proxies Operating profit - % of net sales (b) 6.6% 7.2% 6.7% and vote in person if they so desire. Non-operating expense (income), including interest - % of net sales 0.1% 0.0% 0.0% Income from continuing operations - % of net sales (b) 4.0% 4.5% 4.1% Investment Inquiries Investor Relations Department Balance Sheet Data and Financial Ratios Cash and cash equivalents $ 68,547 $ 177,539 $ 283,733 300 Phillipi Road Inventories 825,195 762,146 731,337 Columbus, Ohio 43228 Property and equipment - net 572,767 524,906 491,256 Total assets 1,641,310 1,619,599 1,669,493 (614) 278-6622 Borrowings under bank credit facility 65,900 – – [email protected] Shareholders’ equity 823,233 946,793 1,001,412 Working capital $ 421,836 $ 509,788 $ 580,446 Current ratio 1.7 1.9 2.1 Independent Registered Public Accounting Firm Inventory turnover 3.6 3.6 3.7 Deloitte & Touche LLP Bank borrowings to total capitalization 7.4% 0.0% 0.0% Return on assets - continuing operations (b) 12.7% 13.5% 12.6% 220 E. Monument Avenue, Suite 500 Return on shareholders’ equity - continuing operations (b) 23.4% 22.8% 22.0% Dayton, Ohio 45402 Cash Flow Data Cash provided by operating activities (c) $ 318,471 $ 315,257 $ 392,026 NYSE Trading Symbol Cash used in investing activities (d) (120,712) (114,552) (77,937) Cash flow (e) $ 197,759 $ 200,705 $ 314,089 Store Data Stores open at end of the fiscal year 1,533 1,398 1,361 Gross square footage (000’s) 45,780 42,037 40,591 Selling square footage (000’s) 33,119 30,210 29,176 Increase in selling square footage 9.6% 3.5% 1.8% Telephone Average selling square footage per store 21,604 21,609 21,437 (614) 278-6800 Web Site $3.50 10.0% 1,550 www.biglots.com 1,533 8.0% 1,500 $3.00 E-mail $2.99 7. 2% $2.83 6.0% 6.7% 6.6% 1,450 [email protected] $2.50 $2.37 4.0% 1,400 1,398 $2.00 2.0% 1,350 1,361 $1.50 0.0% 1,300 2009 2010 2 011 2009 2010 2 011 2009 2010 2 011 Earnings from continuing Operating profit - Store count (a) operations per share - diluted (a) (b) % of net sales (a) ( b ) (a) Includes results of Big Lots Canada from July 18, 2011 (date of acquisition) through January 28, 2012. (b) This item is shown excluding the impact of certain items for fiscal year 2009. A reconciliation of the difference between GAAP and the non-GAAP financial measures presented in this table for fiscal year 2009 is shown on the following page. (c) Includes depreciation and amortization of $82,851, $74,041, and $71,501 for fiscal years 2011, 2010, and 2009, respectively. (d) Includes capital expenditures of $131,293, $107,563, and $78,708 for fiscal years 2011, 2010, and 2009, respectively. (e) Cash flow is calculated as cash provided by operating activities less cash used in investing activities. Fiscal Year ($ in thousands, except per share amounts and sales per selling square foot) 2 011 (a) 2010 2009 U.S. Segment Sales and Store Data Comparable store sales growth 0.1% 2.5% 0.7% Average sales per store $ 3,608 $ 3,556 $ 3,462 Sales per selling square foot $ 166 $ 166 $ 162 Stores open at end of the fiscal year 1,451 1,398 1,361 Canada Segment Sales and Store Data Average sales per store (a) $ 757 – – Sales per selling square foot (a) $ 39 – – Stores open at end of the fiscal year 82 – – The Unaudited Adjusted Results, which include financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP"), are presented in order to provide additional meaningful financial information for the period presented. The Unaudited Adjusted Results should not be construed as an alternative to the reported results determined in accordance with GAAP. Our definition of adjusted results may differ from similarly titled measures used by other companies. While it is not possible to predict future results, our management believes that the adjusted non-GAAP information is useful for the assessment of our ongoing operations. The Unaudited Adjusted Results should be read in conjunction with our Consolidated Financial Statements and the related Notes contained in our Form 10-K for fiscal 2011. The 2009 Unaudited Adjusted Results reflect lower selling and administrative expenses as a result of the adjustment for legal settlement agreement expense and lower operating profit as a result of the adjustment for gain on sale of real estate, both described and reconciled below ($ in thousands): Gain on Sale of Real Estate In fiscal 2009, we recognized $12,964 gain on sale of real estate ($8,163 net of tax) related to the sale of a company-owned and operated store in California which resulted in an increase of our operating profit. Legal Settlement In fiscal 2009, we recorded $4,000 expense ($2,420 net of tax) related to a legal settlement agreement which resulted in an increase of selling and administrative expenses. Fiscal Year 2009 Gain on Unaudited Sale of Legal Adjusted Results Reported (GAAP) Real Estate Settlement (non-GAAP) ($ in thousands, except per share amounts) Net sales $ 4,726,772 100.0 % $ – $ – $ 4,726,722 100.0 % Cost of sales 2,807,466 59.4 – – 2,807,466 59.4 Gross profit 1,919,306 40.6 – – 1,919,306 40.6 Selling and administrative expenses 1,532,356 32.4 – (4,000) 1,528,356 32.3 Depreciation expense 74,904 1.6 – – 74,904 1.6 Gain on sale of real estate (12,964) (0.3) 12,964 – – – Operating profit 325,010 6.9 (12,964) 4,000 316,046 6.7 Interest expense (1,840) (0.0) – – (1,840) (0.0) Other income (expense) 175 0.0 – – 175 0.0 Income from continuing operations before income taxes 323,345 6.8 (12,964) 4,000 314,381 6.7 Income tax expense 121,975 2.6 (4,801) 1,580 118,754 2.5 Income from continuing operations 201,370 4.3 (8,163) 2,420 195,627 4.1 Loss from discontinued operations (1,001) (0.0) – – (1,001) (0.0) Net income $ 200,369 4.2 % $ (8,163) $ 2,420 $ 194,626 4.1 % Earnings per common share - basic: (f) Continuing operations $ 2.47 $ (0.10) $ 0.03 $ 2.40 Discontinued operations (0.01) – – (0.01) Net income $ 2.45 $ (0.10) $ 0.03 $ 2.38 Earnings per common share - diluted: (f) Continuing operations $ 2.44 $ (0.10) $ 0.03 $ 2.37 Discontinued operations (0.01) – – (0.01) Net income $ 2.42 $ (0.10) $ 0.03 $ 2.35 (f) The earnings per share for continuing operations, discontinued operations and net income are separately calculated in accordance with Accounting Standards Codification ("ASC") 260; therefore, the sum of earnings per share for continuing operations and discontinued operations may differ, due to rounding, from the calculated earnings per share of net income. 2011 BIG LOTS, INC. ANNUAL REPORT ABOUT OUR COMPANY: Headquartered in Columbus, Ohio, Big Lots (NYSE: BIG) is a Fortune 500 company operating more than 1,450 BIG LOTS® stores in 48 states and over 80 LIQUIDATION WORLD® and LW® stores in Canada. For more than three decades, we’ve delighted our customers with a vibrant mix of exciting brands, unique products and closeout prices. Big Lots offers new merchandise every week at substantial savings over traditional discount retailers. Shoppers love our unexpected deals. We also carry attractive, affordable furniture, home furnishings, seasonal merchandise and hundreds of everyday items consumers want and need. Through excellent relationships with manufacturers, high-volume purchases and strict expense control, we pass tremendous savings on to our customers. DEAR SHAREHOLDERS: “Do what you said you were going GROWTH IS THE KEY to do.” It seems like such a simple Not many companies can say concept, and yet it’s so incredibly it these days, but WE ARE IN A important in business, and in life GROWTH MODE.