0001171843-17-003900.txt : 20170630 0001171843-17-003900.hdr.sgml : 20170630 20170630125353 ACCESSION NUMBER: 0001171843-17-003900 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 56 CONFORMED PERIOD OF REPORT: 20170527 FILED AS OF DATE: 20170630 DATE AS OF CHANGE: 20170630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BED BATH & BEYOND INC CENTRAL INDEX KEY: 0000886158 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES [5700] IRS NUMBER: 112250488 STATE OF INCORPORATION: NY FISCAL YEAR END: 0225 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20214 FILM NUMBER: 17941234 BUSINESS ADDRESS: STREET 1: 650 LIBERTY AVENUE CITY: UNION STATE: NJ ZIP: 07083 BUSINESS PHONE: 2013791520 MAIL ADDRESS: STREET 1: 715 MORRIS AVENUE CITY: SPRINGFIELD STATE: NJ ZIP: 07081 10-Q 1 f10q_063017p.htm FORM 10-Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-Q

 

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

For the quarterly period ended May 27, 2017

 

Commission File Number 0-20214

 

BED BATH & BEYOND INC.

(Exact name of registrant as specified in its charter)

 

New York   11-2250488
(State of incorporation)   (IRS Employer Identification No.)
     
650 Liberty Avenue, Union, New Jersey    07083
(Address of principal executive offices)    (Zip Code)

 

Registrant’s telephone number, including area code: 908/688-0888

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

  Yes  ☒      No  ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

  Yes  ☒      No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  ☒   Accelerated filer  ☐
Non-accelerated filer  ☐ (Do not check if a smaller reporting company)  

Smaller reporting company  ☐

Emerging growth company ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

  Yes  ☐      No  ☒

 

Number of shares outstanding of the issuer’s Common Stock:

 

Class   Outstanding at May 27, 2017
Common Stock - $0.01 par value   144,729,975

 

 
 

 

BED BATH & BEYOND INC. AND SUBSIDIARIES

 

INDEX

 

       
PART I - FINANCIAL INFORMATION  
       
  Item 1. Financial Statements (unaudited)  
       
  Consolidated Balance Sheets
May 27, 2017 and February 25, 2017
 
       
  Consolidated Statements of Earnings
Three Months Ended May 27, 2017 and May 28, 2016
 
     
  Consolidated Statements of Comprehensive Income
Three Months Ended May 27, 2017 and May 28, 2016
 
       
  Consolidated Statements of Cash Flows
Three Months Ended May 27, 2017 and May 28, 2016
 
       
  Notes to Consolidated Financial Statements  
       
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations  
       
  Item 3. Quantitative and Qualitative Disclosures about Market Risk  
       
  Item 4. Controls and Procedures  
       
PART II - OTHER INFORMATION  
       
  Item 1. Legal Proceedings  
       
  Item 1A. Risk Factors  
       
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  
       
  Item 6. Exhibits  
       
  Signatures  
       
  Exhibit Index  
       
  Certifications  

 

 - 2 - 
 

 

BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except per share data)

 (unaudited)

 

 

   May 27, 
 2017
  February 25, 
 2017
       
Assets          
Current assets:          
 Cash and cash equivalents  $469,320   $488,329 
 Merchandise inventories   2,962,936    2,905,660 
 Other current assets   217,917    197,912 
           
Total current assets   3,650,173    3,591,901 
           
Long term investment securities   96,121    89,592 
Property and equipment, net   1,817,594    1,837,129 
Goodwill   707,643    697,085 
Other assets   604,270    606,948 
           
Total assets  $6,875,801   $6,822,655 
           
Liabilities and Shareholders' Equity          
Current liabilities:          
Accounts payable  $1,178,811   $1,179,088 
Accrued expenses and other current liabilities   509,501    484,114 
Merchandise credit and gift card liabilities   319,496    309,478 
Current income taxes payable   117,211    59,821 
           
Total current liabilities   2,125,019    2,032,501 
           
Deferred rent and other liabilities   520,040    511,303 
Income taxes payable   66,431    67,971 
Long term debt   1,491,719    1,491,603 
           
Total liabilities   4,203,209    4,103,378 
           
Shareholders' equity:          
Preferred stock - $0.01 par value; authorized - 1,000 shares; no shares issued or outstanding   -    - 
           
Common stock - $0.01 par value; authorized - 900,000 shares; issued 341,276 and 339,533, respectively; outstanding 144,730 and 146,274 shares, respectively   3,413    3,395 
Additional paid-in capital   2,006,939    1,974,781 
Retained earnings   11,057,826    11,003,890 
Treasury stock, at cost; 196,546 and 193,259 shares, respectively   (10,342,863)   (10,215,539)
Accumulated other comprehensive loss   (52,723)   (47,250)
           
Total shareholders' equity   2,672,592    2,719,277 
           
Total liabilities and shareholders' equity  $6,875,801   $6,822,655 

 

See accompanying Notes to Consolidated Financial Statements.

 

 - 3 - 
 

 

 BED BATH & BEYOND INC. AND SUBSIDIARIES

 Consolidated Statements of Earnings

 (in thousands, except per share data)

 (unaudited)

                     

 

   Three Months Ended
       
   May 27,
 2017
  May 28,
 2016
       
Net sales  $2,742,141   $2,738,084 
           
Cost of sales   1,742,026    1,714,492 
           
Gross profit   1,000,115    1,023,592 
           
Selling, general and administrative expenses   853,104    810,566 
           
Operating profit   147,011    213,026 
           
Interest expense, net   16,580    16,315 
           
Earnings before provision for income taxes   130,431    196,711 
           
Provision for income taxes   55,148    74,092 
           
Net earnings  $75,283   $122,619 
           
Net earnings per share - Basic  $0.53   $0.81 
Net earnings per share - Diluted  $0.53   $0.80 
           
Weighted average shares outstanding - Basic   141,331    152,157 
Weighted average shares outstanding - Diluted   142,141    153,752 
           
Dividends declared per share  $0.150   $0.125 

 

See accompanying Notes to Consolidated Financial Statements.

 

 - 4 - 
 

 

 BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

 (in thousands, unaudited)

                     

 

   Three Months Ended
   May 27,
 2017
  May 28,
 2016
       
Net earnings  $75,283   $122,619 
           
Other comprehensive (loss) income:          
           
Change in temporary impairment of auction rate securities, net of taxes   166    (276)
Pension adjustment, net of taxes   199    241 
Currency translation adjustment   (5,838)   7,363 
           
Other comprehensive (loss) income   (5,473)   7,328 
           
Comprehensive income  $69,810   $129,947 

 

See accompanying Notes to Consolidated Financial Statements. 

 

 - 5 - 
 

 

BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands, unaudited)

 

 

   Three Months Ended
       
   May 27,
2017
  May 28,
2016
       
Cash Flows from Operating Activities:          
           
Net earnings  $75,283   $122,619 
Adjustments to reconcile net earnings to net cash provided by operating activities:          
Depreciation and amortization   74,912    70,445 
Stock-based compensation   21,490    20,748 
Deferred income taxes   (6,571)   4,153 
Other   555    (479)
Increase in assets, net of effect of acquisitions:          
Merchandise inventories   (59,916)   (71,933)
Trading investment securities   (6,256)   (7,515)
Other current assets   (20,146)   (32,502)
Other assets   (631)   (11,946)
Increase (decrease) in liabilities, net of effect of acquisitions:          
Accounts payable   24,567    66,260 
Accrued expenses and other current liabilities   25,591    42,631 
Merchandise credit and gift card liabilities   10,172    8,319 
Income taxes payable   55,805    (4,932)
Deferred rent and other liabilities   9,779    3,300 
           
Net cash provided by operating activities   204,634    209,168 
           
Cash Flows from Investing Activities:          
           
Redemption of held-to-maturity investment securities   -    63,742 
Capital expenditures   (80,760)   (89,455)
Payment for acquisition, net of cash acquired   (4,344)   - 
           
Net cash used in investing activities   (85,104)   (25,713)
           
Cash Flows from Financing Activities:          
           
Proceeds from exercise of stock options   10,161    19,246 
Payment of dividends   (18,161)   - 
Repurchase of common stock, including fees   (127,324)   (178,124)
           
Net cash used in financing activities   (135,324)   (158,878)
           
Effect of exchange rate changes on cash and cash equivalents   (3,215)   4,119 
           
Net (decrease) increase in cash and cash equivalents   (19,009)   28,696 
           
Cash and cash equivalents:          
           
Beginning of period   488,329    515,573 
End of period  $469,320   $544,269 

 

 

 See accompanying Notes to Consolidated Financial Statements.

 

 - 6 - 
 

 

BED BATH & BEYOND INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

 

1) Basis of Presentation

 

The accompanying consolidated financial statements have been prepared without audit. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals and elimination of intercompany balances and transactions) necessary to present fairly the financial position of Bed Bath & Beyond Inc. and subsidiaries (the "Company") as of May 27, 2017 and February 25, 2017 and the results of its operations, comprehensive income and cash flows for the three months ended May 27, 2017 and May 28, 2016, respectively.

 

The accompanying unaudited consolidated financial statements are presented in accordance with the requirements for Form 10-Q and consequently do not include all the disclosures normally required by U.S. generally accepted accounting principles (“GAAP”). Reference should be made to Bed Bath & Beyond Inc.'s Annual Report on Form 10-K for the fiscal year ended February 25, 2017 for additional disclosures, including a summary of the Company's significant accounting policies, and to subsequently filed Forms 8-K.

 

Certain reclassifications have been made to the fiscal 2016 consolidated balance sheet and statement of cash flows to conform to the fiscal 2017 consolidated balance sheet and statement of cash flows presentation.

 

The Company accounts for its operations as two operating segments: North American Retail and Institutional Sales. The Institutional Sales operating segment, which is comprised of Linen Holdings, does not meet the quantitative thresholds under GAAP and therefore is not a reportable segment. Net sales outside of the U.S. for the Company were not material for the three months ended May 27, 2017 and May 28, 2016.

 

The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and certain juvenile products. Sales of domestics merchandise and home furnishings accounted for approximately 36.2% and 63.8% of net sales, respectively, for the three months ended May 27, 2017 and approximately 36.6% and 63.4% of net sales, respectively, for the three months ended May 28, 2016.

 

As the Company operates in the retail industry, its results of operations are affected by general economic conditions and consumer spending habits.

 

2) Acquisitions

 

On June 13, 2016, the Company acquired One Kings Lane, Inc., an online authority in home décor and design, offering a unique collection of select home goods, designer and vintage items. Since the date of acquisition, the results of One Kings Lane’s operations, which were not material, have been included in the Company’s results of operations and no proforma disclosure of financial information has been presented. One Kings Lane is included in the North American Retail operating segment.

 

On November 23, 2016, the Company acquired PersonalizationMall.com, LLC (“PMall”), an industry-leading online retailer of personalized products, for an aggregate purchase price of approximately $189.4 million. Since the date of acquisition, the result of PMall’s operations, which were not material, have been included in the Company’s results of operations and no proforma disclosure of financial information has been presented. PMall is included in the North American Retail operating segment.

 

The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed at the date of acquisition for PMall. The Company is in the process of finalizing the valuation of certain assets acquired and liabilities assumed; thus, the amounts below are subject to change until the anniversary of the acquisition.

 

 - 7 - 
 

 

(in millions)  As of November 23, 2016
    
Current assets  $15.1 
Property and equipment and other non-current assets   9.3 
Goodwill   185.5 
Intangible assets   10.4 
Total assets acquired   220.3 
      
Accounts payable and other liabilities   (30.9)
      
Total net assets acquired  $189.4 

 

Included within intangible assets above is approximately $10.0 million for tradenames, which is not subject to amortization. The tradenames and goodwill are expected to be deductible for tax purposes.

 

On January 27, 2017, the Company acquired certain assets including the brand, website and certain intellectual property assets and assumed certain contractual obligations of Chef Central, a retailer of kitchenware, cookware and homeware items catering to cooking and baking enthusiasts. Since the date of acquisition, the results of Chef Central’s operations, which were not material, have been included in the Company’s results of operations and no proforma disclosure of financial information has been presented. Chef Central is included in the North American Retail operating segment.

 

On March 6, 2017, the Company acquired Decorist, Inc., an online interior design platform that provides personalized home design services. Since the date of acquisition, the results of Decorist’s operations, which were not material, have been included in the Company’s results of operations for the three months ended May 27, 2017, and no proforma disclosure of financial information has been presented. Decorist is included in the North American Retail operating segment.

 

3) Recent Accounting Pronouncements

 

In November 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This guidance requires an entity to classify deferred tax assets and liabilities as noncurrent assets and liabilities on the balance sheet. ASU 2015-17 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, with earlier adoption permitted. ASU 2015-17 can be adopted either prospectively or retrospectively to each prior reporting period presented. At the beginning of the first quarter of fiscal 2017, the Company adopted this guidance retrospectively, which resulted in decreases to other current assets of $218.8 million and deferred rent and other liabilities of $23.4 million and an increase to other assets of $195.5 million as of February 25, 2017.

 

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 requires, on a prospective basis, recognition of excess tax benefits and tax deficiencies (resulting from an increase or decrease in the fair value of an award from grant date to the vesting or exercise date) in the provision for income taxes as a discrete item in the period in which they occur. The ASU also changes the classification of excess tax benefits from a financing activity to an operating activity in the Company’s consolidated statements of cash flows. In addition, ASU 2016-09 allows companies to make an accounting policy election to either estimate expected forfeitures or account for them as they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The Company adopted ASU 2016-09 during the first quarter of fiscal 2017. During the three months ended May 27, 2017, the Company recognized in income tax expense a discrete tax expense of $7.6 million related to tax deficiencies. Additionally, the Company elected to account for forfeitures as an estimate of the number of awards that are expected to vest, which is consistent with its accounting policy prior to adoption of ASU 2016-09. The Company adopted the provisions of ASU 2016-09 related to changes in the consolidated statements of cash flows on a retrospective basis. As such, excess tax benefits are now classified as an operating activity in the Company’s Consolidated Statements of Cash Flows instead of as a financing activity. As a result, excess tax benefits of $1.3 million for the three months ended May 28, 2016 were reclassified from financing activities to operating activities. ASU 2016-09 also requires that the value of shares withheld from employees upon vesting of stock awards in order to satisfy any applicable tax withholding requirements is presented within financing activities in the Company’s Consolidated Statements of Cash Flows, which is consistent with the Company’s historical presentation, and therefore had no impact to the Company.

 

 - 8 - 
 

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This guidance deferred the effective date of ASU 2014-09 for one year from the original effective date. In accordance with the deferral, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In 2016, the FASB issued several amendments to clarify various aspects of the implementation guidance. ASU 2014-09 can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company does not expect to adopt this ASU until required, and has not yet selected the transition method. The Company is in the process of analyzing its revenue streams and quantifying the effects, if any, to the areas discussed above, and currently does not expect the adoption of this standard will have a material impact on its consolidated financial position, results of operations, or cash flows.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This guidance requires an entity to recognize lease liabilities and a right-of-use asset for all leases on the balance sheet and to disclose key information about the entity's leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with earlier adoption permitted. ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures, but expects that it will result in a significant increase in the assets and liabilities recorded on the consolidated balance sheet.

 

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of identifiable assets, the set of assets would not represent a business. Also, in order to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to produce outputs. Under the update, fewer sets of assets are expected to be considered businesses. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The adoption of this guidance is not expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows.

 

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill to measure the amount of impairment loss, if any, under the second step of the current goodwill impairment test. Under the update, the goodwill impairment loss would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The adoption of this guidance is not expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows.

 

4) Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., “the exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The hierarchy for inputs used in measuring fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability must be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value. The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows:

 

 - 9 - 
 

 

• Level 1 – Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

 

• Level 2 – Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

 

• Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

 

As of May 27, 2017, the Company’s financial assets utilizing Level 1 inputs included long term trading investment securities traded on active securities exchanges. The Company did not have any financial assets utilizing Level 2 inputs. Financial assets utilizing Level 3 inputs included long term investments in auction rate securities consisting of preferred shares of closed end municipal bond funds (See “Investment Securities,” Note 6). 

 

Fair Value of Financial Instruments

 

The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, long term debt and certain other liabilities. The Company’s investment securities include auction rate securities, which are stated at their approximate fair value. The book value of the financial instruments, excluding the Company’s long term debt, is representative of their fair values. The fair value of the Company’s long term debt is approximately $1.407 billion as of May 27, 2017, which is based on quoted prices in active markets for identical instruments (i.e., Level 1 valuation), compared to the carrying value of approximately $1.500 billion.

 

5) Cash and Cash Equivalents

 

Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle within five business days, of $100.6 million and $86.6 million as of May 27, 2017 and February 25, 2017, respectively.

 

6) Investment Securities

 

The Company’s investment securities as of May 27, 2017 and February 25, 2017 are as follows:

 

(in millions)  May 27,
2017
  February 25,
2017
Available-for-sale securities:          
Long term  $19.5   $19.3 
           
Trading securities:          
Long term   76.6    70.3 
Total investment securities  $96.1   $89.6 

 

Auction Rate Securities

 

As of May 27, 2017 and February 25, 2017, the Company’s long term available-for-sale investment securities represented approximately $20.3 million par value of auction rate securities consisting of preferred shares of closed end municipal bond funds, less temporary valuation adjustments of approximately $0.8 million and $1.0 million, respectively. Since these valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive loss, net of a related tax benefit, and did not affect the Company’s net earnings.

 

Long Term Trading Investment Securities

 

The Company’s long term trading investment securities, which are provided as investment options to the participants of the nonqualified deferred compensation plan, are stated at fair market value. The values of these trading investment securities included in the table above are approximately $76.6 million and $70.3 million as of May 27, 2017 and February 25, 2017, respectively.

 

 - 10 - 
 

 

7) Property and Equipment

 

As of May 27, 2017 and February 25, 2017, included in property and equipment, net is accumulated depreciation of approximately $2.9 billion and $2.8 billion, respectively.

 

8) Long Term Debt

 

Senior Unsecured Notes

 

On July 17, 2014, the Company issued $300 million aggregate principal amount of 3.749% senior unsecured notes due August 1, 2024, $300 million aggregate principal amount of 4.915% senior unsecured notes due August 1, 2034 and $900 million aggregate principal amount of 5.165% senior unsecured notes due August 1, 2044 (collectively, the “Notes”). Interest on the Notes is payable semi-annually on February 1 and August 1 of each year.

 

The Notes were issued under an indenture (the “Base Indenture”), as supplemented by a first supplemental indenture (together, with the Base Indenture, the “Indenture”), which contains various restrictive covenants, which are subject to important limitations and exceptions that are described in the Indenture. The Company was in compliance with all covenants related to the Notes as of May 27, 2017.

 

Revolving Credit Agreement

 

The Company has a $250 million five year senior unsecured revolving credit facility agreement (“Revolver”), expiring in August 2019, with various lenders. During the three months ended May 27, 2017, the Company did not have any borrowings under the Revolver.

 

The Revolver contains customary affirmative and negative covenants and also requires the Company to maintain a minimum leverage ratio. The Company was in compliance with all covenants related to the Revolver as of May 27, 2017.

 

Deferred financing costs associated with the Notes and the Revolver of approximately $10.1 million were capitalized. In the accompanying Consolidated Balance Sheets, the deferred financing costs are included in long term debt, net of amortization, for the Notes and are included in other assets, net of amortization, for the Revolver. These deferred financing costs for the Notes and the Revolver are being amortized over the term of each of the Notes and the term of the Revolver and such amortization is included in interest expense, net in the Consolidated Statements of Earnings. Interest expense related to the Notes and the Revolver, including the commitment fee and the amortization of deferred financing costs, was approximately $18.2 million and $18.7 million for the three months ended May 27, 2017 and May 28, 2016, respectively.

 

Lines of Credit

 

At May 27, 2017, the Company maintained two uncommitted lines of credit of $100 million each, with expiration dates of August 30, 2017 and February 25, 2018, respectively. These uncommitted lines of credit are currently and are expected to be used for letters of credit in the ordinary course of business. During the first three months of fiscal 2017, the Company did not have any direct borrowings under the uncommitted lines of credit. Although no assurances can be provided, the Company intends to renew both uncommitted lines of credit before the respective expiration dates.

 

9) Shareholders’ Equity

 

The Company has authorization to make repurchases from time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules and regulations.

 

Between December 2004 and September 2015, the Company’s Board of Directors authorized, through several share repurchase programs, the repurchase of $11.950 billion of its shares of common stock. The Company also acquires shares of its common stock to cover employee related taxes withheld on vested restricted stock and performance stock unit awards. In the first three months of fiscal 2017, the Company repurchased approximately 3.3 million shares of its common stock for a total cost of approximately $127.3 million, bringing the aggregate total of common stock repurchased to approximately 196.5 million shares for a total cost of approximately $10.3 billion since the initial authorization in December 2004. The Company has approximately $1.6 billion remaining of authorized share repurchases as of May 27, 2017.

 

 - 11 - 
 

 

During fiscal 2016, the Company’s Board of Directors authorized a quarterly dividend program. Quarterly dividends of $0.125 per share in each quarter, totaling $0.50 per share for fiscal 2016 were declared by the Company’s Board of Directors, of which $0.375 per share was paid in fiscal 2016. On April 5, 2017, the Company’s Board of Directors declared a quarterly dividend of $0.15 per share to be paid on July 18, 2017 to shareholders of record at the close of business on June 16, 2017. Subsequent to the end of the first quarter of fiscal 2017, on June 22, 2017, the Company’s Board of Directors declared a quarterly dividend of $0.15 per share to be paid on October 17, 2017 to shareholders of record as of the close of business on September 15, 2017. The Company expects to pay quarterly cash dividends on its common stock in the future, subject to the determination by the Board of Directors, based on an evaluation of the Company’s earnings, financial condition and requirements, business conditions and other factors.

 

Cash dividends, if any, are accrued as a liability on the Company’s consolidated balance sheets and recorded as a decrease to additional paid-in capital when declared.

 

10) Stock-Based Compensation

 

The Company measures all employee stock-based compensation awards using a fair value method and records such expense, net of estimated forfeitures, in its consolidated financial statements. Currently, the Company’s stock-based compensation relates to restricted stock awards, stock options and performance stock units. The Company’s restricted stock awards are considered nonvested share awards.

 

Stock-based compensation expense for the three months ended May 27, 2017 and May 28, 2016 was approximately $21.5 million ($12.4 after tax or $0.09 per diluted share) and $20.7 million ($12.9 million after tax or $0.08 per diluted share), respectively. In addition, the amount of stock-based compensation cost capitalized for both the three months ended May 27, 2017 and May 28, 2016 was approximately $0.5 million.

 

Incentive Compensation Plans

 

The Company currently grants awards under the Bed Bath & Beyond 2012 Incentive Compensation Plan (the “2012 Plan”), which amended and restated the Bed Bath & Beyond 2004 Incentive Compensation Plan (the “2004 Plan”). The 2012 Plan includes an aggregate of 43.2 million common shares authorized for issuance and the ability to grant incentive stock options. Outstanding awards that were covered by the 2004 Plan continue to be in effect under the 2012 Plan.

 

The 2012 Plan is a flexible compensation plan that enables the Company to offer incentive compensation through stock options (whether nonqualified stock options or incentive stock options), restricted stock awards, stock appreciation rights, performance awards and other stock based awards, including cash awards. Under the 2012 Plan, grants are determined by the Compensation Committee for those awards granted to executive officers and by an appropriate committee for all other awards granted. Awards of stock options and restricted stock generally vest in five equal annual installments beginning one to three years from the date of grant. Awards of performance stock units generally vest over a period of four years from the date of grant dependent on the Company’s achievement of performance-based tests and subject, in general, to the executive remaining in the Company’s service on specified vesting dates.

 

The Company generally issues new shares for stock option exercises, restricted stock awards and vesting of performance stock units.

 

Stock Options

 

Stock option grants are issued at fair market value on the date of grant and generally become exercisable in either three or five equal annual installments beginning one year from the date of grant for options issued since May 10, 2010, and beginning one to three years from the date of grant for options issued prior to May 10, 2010, in each case, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Option grants expire eight years after the date of grant. All option grants are nonqualified. As of May 27, 2017, unrecognized compensation expense related to the unvested portion of the Company’s stock options was $25.0 million, which is expected to be recognized over a weighted average period of 3.7 years.

 

 - 12 - 
 

 

The fair value of the stock options granted was estimated on the date of the grant using a Black-Scholes option-pricing model that uses the assumptions noted in the following table.

 

   Three Months Ended
Black-Scholes Valuation Assumptions  (1)  May 27, 2017  May 28, 2016
       
Weighted Average Expected Life (in years)  (2)   6.7    6.6 
Weighted Average Expected Volatility  (3)   26.49%   26.96%
Weighted Average Risk Free Interest Rates  (4)   2.17%   1.46%
Expected Dividend Yield (5)   1.60%   1.10%

 

(1) Forfeitures are estimated based on historical experience.

(2) The expected life of stock options is estimated based on historical experience.

(3) Expected volatility is based on the average of historical and implied volatility. The historical volatility is determined by observing actual prices of the Company’s stock over a period commensurate with the expected life of the awards. The implied volatility represents the implied volatility of the Company’s call options, which are actively traded on multiple exchanges, had remaining maturities in excess of twelve months, had market prices close to the exercise prices of the employee stock options and were measured on the stock option grant date.

(4) Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of the stock options.

(5) Expected dividend yield is estimated based on anticipated dividend payouts.

 

Changes in the Company’s stock options for the three months ended May 27, 2017 were as follows:

 

(Shares in thousands)  Number of Stock Options  Weighted Average
Exercise Price
Options outstanding, beginning of period   3,906   $56.48 
Granted   694    37.50 
Exercised   (359)   28.33 
Forfeited or expired   -    - 
Options outstanding, end of period   4,241   $55.76 
Options exercisable, end of period   2,441   $60.38 

 

The weighted average fair value for the stock options granted during the first three months of fiscal 2017 and 2016 was $9.50 and $11.87, respectively. The weighted average remaining contractual term for options outstanding as of May 27, 2017 was 4.82 years and the aggregate intrinsic value was $0. The weighted average remaining contractual term for options exercisable as of May 27, 2017 was 3.35 years and the aggregate intrinsic value was $0. The total intrinsic value for stock options exercised during the first three months of fiscal 2017 and 2016 was $3.9 and $8.3 million, respectively.

 

Net cash proceeds from the exercise of stock options for the first three months of fiscal 2017 were $10.2 and the net associated income tax expense was $0.2 million.

 

Restricted Stock

 

Restricted stock awards are issued and measured at fair market value on the date of grant and generally become vested in five equal annual installments beginning one to three years from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Vesting of restricted stock is based solely on time vesting. As of May 27, 2017, unrecognized compensation expense related to the unvested portion of the Company’s restricted stock awards was $160.8 million, which is expected to be recognized over a weighted average period of 4.9 years.

 

 

 - 13 - 
 

 

Changes in the Company’s restricted stock for the three months ended May 27, 2017 were as follows:

 

(Shares in thousands)  Number of Restricted
Shares
  Weighted Average
Grant-Date Fair
Value
Unvested restricted stock, beginning of period   3,492   $58.12 
Granted   1,118    37.59 
Vested   (527)   60.96 
Forfeited   (50)   53.16 
Unvested restricted stock, end of period   4,033   $52.12 

 

Performance Stock Units

 

Performance stock units (“PSUs”) are issued and measured at fair market value on the date of grant. Vesting of PSUs awarded to certain of the Company’s executives is dependent on the Company’s achievement of a performance-based test during a one-year period from the date of grant and during a three-year period from the date of grant and, assuming achievement of the performance-based test, time vesting over periods of up to four years, subject, in general, to the executive remaining in the Company’s service on specified vesting dates. Performance during the one-year period will be based on Earnings Before Interest and Taxes (“EBIT”) margin relative to a peer group of the Company and performance during the three-year period will be based on Return on Invested Capital (“ROIC”) or a combination of EBIT margin and ROIC relative to such peer group. The awards based on EBIT margin and ROIC range from a floor of zero to a cap of 150% of target achievement. PSUs are converted into shares of common stock upon payment following vesting. Upon grant of the PSUs, the Company recognizes compensation expense related to these awards based on the assumption that 100% of the target award will be achieved. The Company evaluates the target assumption on a quarterly basis and adjusts compensation expense related to these awards, as appropriate. As of May 27, 2017, unrecognized compensation expense related to the unvested portion of the Company’s performance stock units was $41.2 million, which is expected to be recognized over a weighted average period of 2.2 years.

 

Changes in the Company’s PSUs for the three months ended May 27, 2017 were as follows:

 

(Shares in thousands)  Number of Performance
Stock Units
  Weighted Average
Grant-Date Fair
Value
Unvested performance stock units, beginning of period   1,014   $55.19 
Granted   660    37.50 
Vested   (322)   57.28 
Forfeited   -    - 
Unvested performance stock units, end of period   1,352   $46.06 

 

11) Earnings per Share

 

The Company presents earnings per share on a basic and diluted basis. Basic earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method.

 

Stock-based awards for the three months ended May 27, 2017 and May 28, 2016 of approximately 7.2 million and 4.7 million, respectively were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive.

 

12) Supplemental Cash Flow Information

 

The Company paid income taxes of $8.7 million and $75.2 million in the first three months of fiscal 2017 and 2016, respectively. In addition, the Company had interest payments of approximately $2.2 million in the first three months of fiscal 2017 and 2016.

 

The Company recorded an accrual for capital expenditures of $34.1 million and $29.1 million as of May 27, 2017 and May 28, 2016, respectively. In addition, the Company recorded an accrual for dividends payable of $23.6 million and $19.4 million as of May 27, 2017 and May 26, 2016, respectively.

 

 - 14 - 
 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Overview

 

Bed Bath & Beyond Inc. and subsidiaries (the “Company”) is an omnichannel retailer selling a wide assortment of domestics merchandise and home furnishings which operates under the names Bed Bath & Beyond (“BBB”), Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! (collectively, “CTS”), Harmon, Harmon Face Values, or Face Values (collectively, “Harmon”), buybuy BABY (“Baby”) and World Market, Cost Plus World Market, or Cost Plus (collectively, “Cost Plus World Market”). Customers can purchase products either in-store, online, with a mobile device or through a customer contact center. The Company generally has the ability to have customer purchases picked up in-store or shipped direct to the customer from the Company’s distribution facilities, stores or vendors. In addition, the Company operates Of a Kind, an e-commerce website that features specially commissioned, limited edition items from emerging fashion and home designers; One Kings Lane, an authority in home décor and design, offering a unique collection of select home goods, designer and vintage items; PersonalizationMall.com (“PMall”), an industry-leading online retailer of personalized products; Chef Central, a retailer of kitchenware, cookware and homeware items catering to cooking and baking enthusiasts; and Decorist, an online interior design platform that provides personalized home design services. The Company also operates Linen Holdings, a provider of a variety of textile products, amenities and other goods to institutional customers in the hospitality, cruise line, healthcare and other industries. Additionally, the Company is a partner in a joint venture which operates eight retail stores in Mexico under the name Bed Bath & Beyond.

 

The Company accounts for its operations as two operating segments: North American Retail and Institutional Sales. The Institutional Sales operating segment, which is comprised of Linen Holdings, does not meet the quantitative thresholds under U.S. generally accepted accounting principles and therefore is not a reportable segment.

 

The Company’s mission is to be trusted by its customers as the expert for the home and heart-felt life events. These include certain life events that evoke strong emotional connections such as getting married, moving to a new home, having a baby, going to college and decorating a room, which the Company supports through its wedding and baby registries, new mover and student life programs, and its design consultation services. The Company’s strategy is based on building and delivering a strong foundation of differentiated products, and services and solutions, while driving operational excellence.

 

Through its growing analytics capabilities and personalized targeted marketing strategy, the Company strives to more efficiently and effectively understand the needs and wants of its customers as they travel through various life stages and express life interests. The Company offers an extensive selection of high quality domestics merchandise and home furnishings across all channels, concepts and countries in which it operates and strives to provide a noticeably better shopping experience through best-in-class services and solutions.

 

The integration of retail store and customer facing digital channels allows the Company to provide its customers with a seamless shopping experience. In-store purchases are primarily fulfilled from that store’s inventory, or may also be shipped to a customer from one of the Company’s distribution facilities, from a vendor, or from another store. Online purchases, including web and mobile, can be shipped to a customer from the Company’s distribution facilities, directly from vendors, or from a store. The Company’s customers can also choose to pick up online orders in a store, as well as return online purchases to a store. Customers can also make online purchases through one of the Company’s customer contact centers and in-store through The Beyond Store, the Company’s proprietary, web-based platform. These capabilities allow the Company to better serve customers across various channels.

 

By focusing on the Company’s mission and remaining grounded in its customer-centric culture, along with maintaining strong financial discipline, the Company believes it will strengthen its position as the customer’s first choice for the home and heart-felt life events and continue to achieve long-term success.

 

Operating in the highly competitive retail industry, the Company, along with other retail companies, is influenced by a number of factors including, but not limited to, general economic conditions including the housing market, unemployment levels and commodity prices; the overall macroeconomic environment and related changes in the retailing environment; consumer preferences, spending habits and adoption of new technologies; unusual weather patterns and natural disasters; competition from existing and potential competitors across all channels of distribution; potential supply chain disruption; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company’s plans for new stores; and the ability to assess and implement technologies in support of the Company’s development of its omnichannel capabilities. The Company cannot predict whether, when or the manner in which these factors could affect the Company’s operating results.

 

 - 15 - 
 

 

The results of operations for the quarter ended May 27, 2017 include Decorist since the date of acquisition, March 6, 2017.

 

The following represents an overview of the Company’s financial performance for the periods indicated:

 

For the three months ended May 27, 2017, the Company’s net sales were $2.742 billion, an increase of approximately 0.1% as compared with the three months ended May 28, 2016.

 

Comparable sales for the three months ended May 27, 2017 decreased by approximately 2.0% as compared to a decrease of approximately 0.5% for the three months ended May 28, 2016. For the three months ended May 27, 2017, comparable sales consummated through customer facing digital channels increased in excess of 20% over the corresponding period in the prior year, while comparable sales consummated in-store declined in the mid-single-digit percentage range.

 

Comparable sales include sales consummated through all retail channels which have been operating for twelve full months following the opening period (typically four to six weeks). The Company is an omnichannel retailer with capabilities that allow a customer to use more than one channel when making a purchase, including in-store, online, with a mobile device or through a customer contact center, and have it fulfilled, in most cases, either through in-store customer pickup or by direct shipment to the customer from one of the Company’s distribution facilities, stores or vendors.

 

Sales consummated on a mobile device while physically in a store location are recorded as customer facing digital channel sales. Customer orders taken in-store by an associate through The Beyond Store, the Company’s proprietary, web-based platform are recorded as in-store sales. Customer orders reserved online and picked up in a store are recorded as in-store sales. In-store sales are reduced by sales originally consummated from customer facing digital channels and subsequently returned in-store.

 

Stores relocated or expanded are excluded from comparable sales if the change in square footage would cause meaningful disparity in sales over the prior period. In the case of a store to be closed, such store’s sales are not considered comparable once the store closing process has commenced. One Kings Lane is excluded from the comparable sales calculation for the three months ended May 27, 2017 and will continue to be excluded until a point following the anniversary of the acquisition, after the currently in process re-platforming of One King Lane’s systems and integration of its support services have been in place for a period of time such that there would be a meaningful comparison in One Kings Lane’s sales over the prior period. PMall, Chef Central and Decorist are also excluded from the comparable sales calculation for the three months ended May 27, 2017 and will continue to be excluded until after the anniversary of the respective acquisition. Linen Holdings is excluded from the comparable sales calculations and will continue to be excluded on an ongoing basis as it represents non-retail activity.

 

Gross profit for the three months ended May 27, 2017 was $1.000 billion, or 36.5% of net sales, compared with $1.024 billion, or 37.4% of net sales, for the three months ended May 28, 2016.

 

Selling, general and administrative expenses (“SG&A”) for the three months ended May 27, 2017 were $853.1 million, or 31.1% of net sales, compared with $810.6 million, or 29.6% of net sales, for the three months ended May 28, 2016.

 

Interest expense, net for the three months ended May 27, 2017 was $16.6 million compared with $16.3 million for the three months ended May 28, 2016.

 

The effective tax rate for the three months ended May 27, 2017 was 42.3% compared with 37.7% for the three months ended May 28, 2016. For the three months ended May 27, 2017, the effective tax rate included the effect of the adoption of ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Share-Based Payment Accounting, which increased the tax rate by approximately 5.9%, and increased income tax expense by approximately $7.6 million. Also, the tax rates included discrete tax items resulting in net benefits of approximately $2.0 million and $0.5 million, respectively, for the three months ended May 27, 2017 and May 28, 2016.

 

 - 16 - 
 

 

For the three months ended May 27, 2017, net earnings per diluted share were $0.53 ($75.3 million) as compared with net earnings per diluted share of $0.80 ($122.6 million) for the three months ended May 28, 2016. The decrease in net earnings per diluted share for the three months ended May 27, 2017 is the result of the decrease in net earnings due to the items described above, partially offset by the impact of the Company’s repurchases of its common stock. The adoption of ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Share-Based Payment Accounting, in the first quarter of fiscal 2017 had an unfavorable impact of approximately $0.05 per diluted share.

 

Capital expenditures for the three months ended May 27, 2017 and May 28, 2016 were $80.8 million and $89.5 million, respectively. In the first three months of fiscal 2017, more than 40% of the capital expenditures were for technology projects, including investments in the Company’s digital capabilities, and the development and deployment of new systems and equipment in its stores. The remaining capital expenditures were primarily related to investments in stores, the Company’s new Las Vegas distribution facility, and its new customer contact center in Florida. The Company continues to review and prioritize its capital needs and remains committed to making the required investments in its infrastructure to help position the Company for continued growth and success.

 

Several of the Company’s key initiatives include: continuing to improve the presentation and content as well as the functionality, general search and navigation across its customer facing digital channels; improving customer data integration and customer relations management capabilities; continuing to enhance service offerings to its customers; continuing to strengthen and deepen its information technology, analytics, marketing and e-commerce groups; and creating more flexible fulfillment options that will improve the Company’s delivery capabilities and lower the Company’s shipping costs. These and other investments are expected to, among other things, provide a seamless and compelling customer experience across the Company’s omnichannel retail platform.

 

During the three months ended May 27, 2017, the Company opened 1 new store and closed 1 store. The Company plans to continue to actively manage its real estate portfolio in order to permit store sizes, layouts, locations and offerings to evolve over time to optimize market profitability and will renovate or reposition stores within markets when appropriate. Over the past several years, the Company’s pace of its store openings has slowed, and the Company has increased the number of store closings. If the Company cannot reach acceptable terms with its landlords as leases come up for renewal, the Company would expect the pace of store closings to increase as a result of its assumptions regarding bricks and mortar store traffic in future years as well as the continuation of the Company’s market optimization strategy. Additionally, the Company expects to continue to invest in technology related projects, including the deployment of new systems and equipment in its stores, enhancements to the Company’s customer facing digital channels, ongoing investment in its data warehouse and data analytics and the continued development and deployment of a new point of sale system.

 

During fiscal 2016, the Company’s Board of Directors authorized a quarterly dividend program. Quarterly dividends of $0.125 per share in each quarter, totaling $0.50 per share for fiscal 2016 were declared by the Company’s Board of Directors, of which $0.375 per share was paid in fiscal 2016. On April 5, 2017, the Company’s Board of Directors declared a quarterly dividend of $0.15 per share to be paid on July 18, 2017 to shareholders of record at the close of business on June 16, 2017. Subsequent to the end of the first quarter of fiscal 2017, on June 22, 2017, the Company’s Board of Directors declared a quarterly dividend of $0.15 per share to be paid on October 17, 2017 to shareholders of record as of the close of business on September 15, 2017. The Company expects to pay quarterly cash dividends on its common stock in the future, subject to the determination by the Board of Directors, based on an evaluation of the Company’s earnings, financial condition and requirements, business conditions and other factors.

 

During the three months ended May 27, 2017 and May 28, 2016, the Company repurchased approximately 3.3 million and 3.8 million shares, respectively, of its common stock at a total cost of approximately $127.3 million and $178.1 million, respectively. The Company’s share repurchase program may be influenced by several factors, including business and market conditions. The Company reviews its alternatives with respect to its capital structure on an ongoing basis.

 

Results of Operations

 

Net Sales

 

Net sales for the three months ended May 27, 2017 were $2.742 billion, an increase of $4.1 million or approximately 0.1% compared with net sales of $2.738 billion for the corresponding quarter last year, due to an increase of approximately 2.1% in the Company’s non-comparable sales including PMall, One Kings Lane and new stores, largely offset by a decrease of approximately 2.0% in comparable sales.

 

 - 17 - 
 

 

The decrease in comparable sales for the three months ended May 27, 2017 was approximately 2.0% as compared to a decrease of approximately 0.5% for the three months ended May 28, 2016. The decrease in comparable sales for the three months ended May 27, 2017 was due to a decrease in the number of transactions in stores, partially offset by an increase in the average transaction amount.

 

The Company’s comparable sales metric considers sales consummated through all retail channels – in-store, online, with a mobile device or through a customer contact center. Customers today may take advantage of the Company’s omnichannel environment by using more than one channel when making a purchase. The Company believes in an integrated and seamless customer experience. A few examples are: a customer may be assisted by an in-store associate to create a wedding or baby registry, while the guests may ultimately purchase a gift from the Company’s websites; or a customer may research a particular item, and read other customer reviews on the Company’s websites before visiting a store to consummate the actual purchase; or a customer may reserve an item online for in-store pick up; or while in a store, a customer may make the purchase on a mobile device for in home delivery from either a distribution facility, a store or directly from a vendor. In addition, the Company accepts returns in-store without regard to the channel in which the purchase was consummated, therefore resulting in reducing store sales by sales originally consummated through customer facing digital channels. As the Company’s retail operations are integrated and it cannot reasonably track the channel in which the ultimate sale is initiated, the Company can however provide directional information on where the sale was consummated.

 

For the three months ended May 27, 2017, comparable sales consummated through customer facing digital channels increased in excess of 20% over the corresponding period in the prior year, while comparable sales consummated in-store declined in the mid-single-digit percentage range.

 

For the three months ended May 27, 2017, comparable sales represented $2.613 billion of net sales. For the three months ended May 28, 2016, comparable sales represented $2.651 billion.

 

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 36.2% and 63.8% of net sales, respectively, for the three months ended May 27, 2017 and approximately 36.6% and 63.4% of net sales for the three months ended May 28, 2016.

 

Gross Profit

 

Gross profit for the three months ended May 27, 2017 was $1.000 billion, or 36.5% of net sales, compared with $1.024 billion, or 37.4% of net sales, for the three months ended May 28, 2016. The decrease in the gross profit margin as a percentage of net sales for the three months ended May 27, 2017 was primarily attributed to, in order of magnitude, an increase in net direct to customer shipping expense as a result, in part, of the bedbathandbeyond.com free shipping threshold of $29 for the entire first quarter of fiscal 2017 as compared to $49 for approximately half of the first quarter of fiscal 2016 and an increase in coupon expense, resulting from an increase in redemptions partially offset by a decrease in the average coupon amount. The inclusion of One Kings Lane reduced gross profit margin as a percentage of net sales by approximately 4 basis points, while the inclusion of PMall improved gross profit margin by approximately 16 basis points.

 

Selling, General and Administrative Expenses

 

SG&A for the three months ended May 27, 2017 was $853.1 million, or 31.1% of net sales, compared with $810.6 million, or 29.6% of net sales, for the three months ended May 28, 2016. The increase in SG&A, as a percentage of net sales was primarily attributable to, in order of magnitude, an increase in advertising expenses, due in part to the growth in digital advertising, payroll and payroll related items (including salaries) and an increase in technology expenses and related depreciation. The inclusion of One Kings Lane and PMall increased SG&A, as a percentage of net sales, by approximately 28 and 5 basis points, respectively.

 

Operating Profit

 

Operating profit for the three months ended May 27, 2017 was $147.0 million, or 5.4% of net sales, compared with $213.0 million, or 7.8% of net sales, during the comparable period last year. The changes in operating profit as a percentage of net sales were the result of the reductions in gross profit margin and the increases in SG&A as a percentage of net sales as described above.

 

 - 18 - 
 

 

The Company believes operating margin compression is likely to continue in fiscal 2017 as a result of several items, including increases in, as a percentage of net sales, coupon expense, net direct to customer shipping expense, payroll and payroll-related expense, and technology expenses, including depreciation related to the Company’s ongoing investments.

 

Interest Expense, net

 

Interest expense, net for the three months ended May 27, 2017 was $16.6 million compared to $16.3 million for the three months ended May 28, 2016. For the three months ended May 27, 2017 and May 28, 2016, interest expense, net primarily related to interest on the senior unsecured notes issued in July 2014.

 

Income Taxes

 

The effective tax rate for the three months ended May 27, 2017 was 42.3% compared with 37.7% for the three months ended May 28, 2016. For the three months ended May 27, 2017, the effective tax rate included the effect of the adoption of ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Share-Based Payment Accounting, which increased the tax rate by approximately 5.9%, and increased income tax expense by approximately $7.6 million. The effect of this adoption in fiscal 2017 is expected to vary by quarter, and as anticipated, was heavily weighted toward the first quarter. The adoption of the standard does not affect the Company’s cash outflows for income taxes. Also, the tax rate for the three months ended May 27, 2017 included a net benefit of approximately $2.0 million, primarily due to the recognition of favorable discrete state tax items and the tax rate for the three months ended May 28, 2016 included a net benefit of approximately $0.5 million.

 

Potential volatility in the effective tax rate from year to year may occur as the Company is required each year to determine whether new information changes the assessment of both the probability that a tax position will effectively be sustained and the appropriateness of the amount of recognized benefit. 

 

Net Earnings

 

As a result of the factors described above, net earnings for the three months ended May 27, 2017 were $75.3 million, compared with $122.6 million for the corresponding period in fiscal 2016.

 

Growth

 

In the 24-year period from the beginning of fiscal 1992 to the end of the first quarter of fiscal 2017, the chain has grown from 34 stores to 1,546 stores plus the Company’s interactive platforms, including websites and applications, and distribution facilities. Total store square footage, net of openings and closings, grew from approximately 0.9 million square feet at the beginning of fiscal 1992 to approximately 43.6 million square feet at the end of the first quarter of fiscal 2017.

 

In addition, as of May 27, 2017, the Company has distribution facilities totaling approximately 7.1 million square feet, supporting the growth of its customer facing digital channels as well as its stores and its institutional sales segment. In fiscal 2017, the Company plans to open a 525,000 square foot distribution facility in Las Vegas, Nevada. The new facility will replace a smaller distribution facility in that area, which will close in late 2017, and provide additional capacity to support the growth of the Company’s customer facing digital channels.

 

The Company plans to continue to invest in its infrastructure and its operations, including its digital, web and mobile capabilities, to reach its long-term objectives, including providing a better omnichannel experience for its customers. Additionally, in connection with leveraging its merchandise offerings and optimizing its operations, the Company continues to expand, across selected stores, the number of specialty departments such as health and beauty care, baby, specialty food, and beverage. Also, the Company is committed to the continued growth of its merchandise categories and channels and is growing the number of items it is able to have shipped directly to customers from a vendor. The continued growth of the Company is dependent, in part, upon the Company’s ability to execute these and other key initiatives successfully.

 

The Company has built its management structure with a view towards its growth and believes that, as a result, it has the necessary management depth.

 

 - 19 - 
 

 

Liquidity and Capital Resources

 

The Company has been able to finance its operations, including its growth and acquisitions, substantially through internally generated funds. For fiscal 2017, the Company believes that it can continue to finance its operations, including its growth, cash dividends, planned capital expenditures, debt service obligations and share repurchases, through existing and internally generated funds. In addition, if necessary, the Company could borrow under its $250 million revolving credit facility or the available balances under its lines of credit. The Company continues to expect capital expenditures for fiscal 2017 to be relatively similar to fiscal 2016, subject to the timing and composition of projects, with more than half for information technology projects in support of the Company’s growing omnichannel capabilities. In addition, the Company reviews its alternatives with respect to its capital structure on an ongoing basis.

 

Fiscal 2017 compared to Fiscal 2016

 

Net cash provided by operating activities for the three months ended May 27, 2017 was $204.6 million, compared with $209.2 million in the corresponding period in fiscal 2016. Year over year, the Company experienced a decrease in net earnings, partially offset by an increase in cash provided by the net components of working capital (primarily income taxes payable, merchandise inventories, other current assets and other assets, partially offset by accounts payable and accrued expenses and other current liabilities).

 

Retail inventory was approximately $2.9 billion as of May 27, 2017, which includes the inventory balances from One Kings Lane and PMall, which were acquired during the second and third quarters of fiscal 2016, respectively and May 28, 2016.

 

Net cash used in investing activities for the three months ended May 27, 2017 was $85.1 million, compared with $25.7 million in the corresponding period of fiscal 2016. For the three months ended May 27, 2017, net cash used in investing activities was primarily due to $80.8 million of capital expenditures. For the three months ended May 28, 2016, net cash used in investing activities was primarily due to $89.5 million of capital expenditures, partially offset by $63.7 million of redemptions of investment securities.

 

Net cash used in financing activities for the three months ended May 27, 2017 was $135.3 million, compared with $158.9 million in the corresponding period of fiscal 2016. The decrease in net cash used in financing activities was primarily due to a decrease in common stock repurchases of $50.8 million, partially offset by $18.2 million for the payment of dividends.

 

Seasonality

 

The Company’s business is subject to seasonal influences. Generally, its sales volumes are higher in the calendar months of August, November and December, and lower in February.

 

Critical Accounting Policies

 

See “Critical Accounting Policies” under Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 25, 2017 (“2016 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) and incorporated by reference herein. There were no changes to the Company’s critical accounting policies during the first three months of fiscal 2017.

 

Forward-Looking Statements

 

This Form 10-Q may contain forward-looking statements. Many of these forward-looking statements can be identified by use of words such as may, will, expect, anticipate, approximate, estimate, assume, continue, model, project, plan, and similar words and phrases. The Company’s actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors. Such factors include, without limitation: general economic conditions including the housing market, a challenging overall macroeconomic environment and related changes in the retailing environment; consumer preferences, spending habits and adoption of new technologies; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by the Company; civil disturbances and terrorist acts; unusual weather patterns and natural disasters; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; liquidity; the ability to attract and retain qualified employees in all areas of the organization; the cost of labor, merchandise and other costs and expenses; potential supply chain disruption due to trade restrictions, political instability, labor disturbances, product recalls, financial or operational instability of suppliers or carriers, and other items; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company’s plans for new stores; the ability to assess and implement technologies in support of the Company’s development of its omnichannel capabilities; the ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets it serves; uncertainty in financial markets; volatility in the price of the Company’s common stock and its effect, and the effect of other factors, on the Company’s capital allocation strategy; disruptions to the Company’s information technology systems including but not limited to security breaches of systems protecting consumer and employee information; reputational risk arising from challenges to the Company’s or a third party supplier’s compliance with various laws, regulations or standards, including those related to labor, health, safety, privacy or the environment; reputational risk arising from third-party merchandise or service vendor performance in direct home delivery or assembly of product for customers; changes to statutory, regulatory and legal requirements, including without limitation proposed changes affecting international trade; changes to, or new tax laws or interpretation of existing tax laws, including without limitation the proposed border adjustment tax; new, or developments in existing, litigation, claims or assessments; changes to, or new, accounting standards; foreign currency exchange rate fluctuations; and the integration of acquired businesses. The Company does not undertake any obligation to update its forward-looking statements.

 

 - 20 - 
 

 

Available Information

 

The Company makes available as soon as reasonably practicable after filing with the SEC, free of charge, through its website, www.bedbathandbeyond.com, the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, electronically filed or furnished pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

The Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s investment securities. The Company’s market risks at May 27, 2017 are similar to those disclosed in Item 7A of the Company’s 2016 Form 10-K.

 

As of May 27, 2017, the Company’s investments include cash and cash equivalents of approximately $469.3 million and long term investments in auction rate securities of approximately $19.5 million at weighted average interest rates of 0.45% and 0.15%, respectively. The book value of these investments is representative of their fair values.

 

The Company’s senior unsecured notes have fixed interest rates and are not subject to interest rate risk. As of May 27, 2017, the fair value of the senior unsecured notes was $1.407 billion, which is based on quoted prices in active markets for identical instruments compared to the carrying value of approximately $1.500 billion.

 

Item 4. Controls and Procedures

 

(a)Disclosure Controls and Procedures

 

The Company’s management, with the participation of its Principal Executive Officer and Principal Financial Officer, have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 240.13a-15(e) and 15d-15(e)) as of May 27, 2017 (the end of the period covered by this quarterly report on Form 10-Q). Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that the Company’s current disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

 

(b)Changes in Internal Control over Financial Reporting

 

There were no changes in the Company’s internal controls over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

 

 - 21 - 
 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

The Company is party to various legal proceedings arising in the ordinary course of business, which the Company does not believe to be material to the Company’s business or financial condition.

 

Item 1A. Risk Factors

 

In addition to the other information set forth in this Form 10-Q, carefully consider the factors discussed under “Risk Factors” in the Company’s 2016 Form 10-K as filed with the Securities and Exchange Commission. These risks could materially adversely affect the Company’s business, financial condition and results of operations. These risks are not the only risks the Company faces. The Company’s operations could also be affected by additional factors that are not presently known to the Company or by factors that the Company currently considers immaterial to its business.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

The Company’s purchases of its common stock during the first quarter of fiscal 2017 were as follows:

 

            Approximate Dollar
         Total Number of  Value of Shares
         Shares Purchased as  that May Yet Be
         Part of Publicly  Purchased Under
   Total Number of  Average Price  Announced Plans  the Plans or
Period  Shares Purchased (1)  Paid per Share (2)  or Programs (1)  Programs (1) (2)
February 26, 2017 - March 25, 2017   1,111,300   $40.04    1,111,300   $1,692,079,815 
March 26, 2017 - April 22, 2017   984,000   $38.93    984,000   $1,653,771,336 
April 23, 2017 - May 27, 2017   1,191,700   $37.34    1,191,700   $1,609,276,315 
Total   3,287,000   $38.73    3,287,000   $1,609,276,315 

 

(1) Between December 2004 and September 2015, the Company's Board of Directors authorized, through several share repurchase programs, the repurchase of $11.950 billion of its shares of common stock. The Company has authorization to make repurchases from time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules and regulations. Shares purchased, as indicated in this table, also include shares withheld to cover employee related taxes on vested restricted shares and performance stock unit awards.

(2) Excludes brokerage commissions paid by the Company.

 

Item 6. Exhibits

 

The exhibits to this Report are listed in the Exhibit Index included elsewhere herein.

 

 - 22 - 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  BED BATH & BEYOND INC.  
                   (Registrant)  
       
       
Date:  June 30, 2017 By: /s/ Susan E. Lattmann  
    Susan E. Lattmann  
    Chief Financial Officer and Treasurer 
    (Principal Financial and Accounting Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 - 23 - 
 

 

EXHIBIT INDEX

 

 

Exhibit No.   Exhibit
     
3.1   Amended By-Laws of Bed Bath & Beyond Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the Commission on May 16, 2017)
     
10.1   Form of Standard Performance Stock Unit Agreement under 2012 Incentive Compensation Plan (effective 2017)
     
10.2   Form of Performance Stock Unit Agreement under 2012 Incentive Compensation Plan (effective 2017) for Steven H. Temares.
     
31.1   Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
31.2   Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
32   Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
101.INS   XBRL Instance Document
     
101.SCH   XBRL Taxonomy Extension Schema Document
     
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
     
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document
     
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document

 

 

 

 

 

 

 

- 24 -

 

 

EX-10.1 2 exh_101.htm EXHIBIT 10.1

Exhibit 10.1

 

 

This PERFORMANCE STOCK UNIT AGREEMENT is entered into as of ____________, 20__ (the “Grant Date”), between BED BATH & BEYOND INC. (the “Company”) and ____________________ (“you”).

 

1.       Performance Stock Unit Grant. Subject to the restrictions, terms and conditions of the Plan and this Agreement, the Company hereby awards you the number of Performance Stock Units (the “Performance Stock Units”) specified in paragraph 7 below. The Performance Stock Units are subject to certain restrictions as set forth in the Plan and this Agreement.

 

2.       The Plan. The Performance Stock Units are entirely subject to the terms of the Company’s 2012 Incentive Compensation Plan, as amended from time to time (the “Plan”). A description of key terms of the Plan is set forth in the Prospectus for the Plan. Capitalized terms used but not defined in this Agreement have the meanings set forth in the Plan.

 

3.       Restrictions on Transfer. You will not sell, transfer, pledge, hypothecate, assign or otherwise dispose of (any such action, a “Transfer”) the Performance Stock Units, except as set forth in the Plan or this Agreement. Any attempted Transfer in violation of the Plan or this Agreement will be void and of no effect.

 

4.       Payment. With respect to each Performance Stock Unit that vests in accordance with the schedule set forth in paragraph 8 below, you will be entitled to receive a number of shares of Common Stock equal to one times the Payment Percentage set forth opposite the Achievement Percentage in paragraph 7 below. Subject to paragraph 5 below, and further subject to satisfaction of the Performance Goals, you will be paid such share(s) of Common Stock with respect to each vested Performance Stock Unit within thirty (30) days following the later of: (i) the applicable vesting date set forth in paragraph 8 below (the “Time-Based Vesting Date”); and (ii) the date of certification of the Achievement Percentage attained with respect to the applicable Performance Goal (as defined below) by the Committee (the “Performance-Based Vesting Date”), to the extent administratively practicable. The later of the Time-Based Vesting Date and the Performance-Based Vesting Date shall be referred to as the “Vesting Date.”

 

5.       Forfeiture; Certain Terminations. Except as provided in this paragraph: (i) upon your Termination, all unvested Performance Stock Units shall immediately be forfeited without compensation; and (ii) upon the failure to attain a Performance Goal (as defined below), any unvested Performance Stock Units subject to any such unachieved Performance Goal shall immediately be forfeited without compensation. Notwithstanding anything herein to the contrary, the Performance Stock Units will vest in full upon a Termination by reason of your death or Disability. In the event of your Termination by the Company without Cause or, if provided in an agreement between you and the Company in effect as of the Grant Date, by you for Good Reason or due to a Constructive Termination without Cause, as each such term (or concept of like import) is defined in that agreement, the Performance Stock Units will vest upon, and subject to, the certification by the Committee of attainment of the applicable Performance Goal regardless of whether or not you are employed on the date of certification.

 

6.       Rights with Regard to Performance Stock Units. On and after the Grant Date, you will have the right to receive dividend equivalents with respect to the shares of Common Stock underlying the Performance Stock Units ultimately achieved under the Performance Goal described in paragraph 7, subject to the terms and conditions of this paragraph. Notwithstanding anything herein to the contrary, in no event shall a dividend equivalent be issued or paid with respect to any Performance Stock Unit that has been forfeited pursuant to paragraph 5. If the Company pays a dividend (whether in cash or stock) on its Common Stock shares, or its Common Stock shares are split, or the Company pays to holders of its Common Stock other shares, securities, monies, warrants, rights, options or property representing a dividend or distribution in respect of the Common Stock, then the Company will credit a deemed dividend or distribution to a book entry account on your behalf with respect to each share of Common Stock underlying the Performance Stock Units held by you, provided that your right to actually receive such cash or property shall be subject to the same restrictions as the Performance Stock Units to which the cash or property relates, and the cash or property shall be paid to you at the same time you receive the payment of the shares of Common Stock underlying the Performance Stock Units. Unless otherwise determined by the Committee, dividend equivalents shall not be deemed to be reinvested in Common Stock and shall be treated as uninvested at all times, without crediting any interest or earnings. Except as provided in this paragraph, you will have no rights as a holder of Common Stock with respect to the Performance Stock Units unless and until the Performance Stock Units become vested hereunder and you become the holder of record of the Common Stock underlying the Performance Stock Units.

 

7.       Grant Size; Performance Goals. Performance Stock Units covered by this award: _____________. Twenty-five percent (25%) of the Performance Stock Units will be subject to a one-year performance goal (the “One-Year Goal”) based on the Company’s EBIT Margin, as defined and approved by the Committee, and the remaining seventy-five percent (75%) of the Performance Stock Units will be subject to three-year performance goals (the “Three-Year Goals”) based on the Company’s ROIC and EBIT Margin, each as defined and approved by the Committee. In allocating the Performance Stock Units between the One-Year Goal and the Three-Year Goals, any remaining fractional share of Common Stock underlying the Performance Stock Units shall be allocated to the One-Year Goal. The One-Year Goal and the Three-Year Goals (each a “Performance Goal”) have been set forth in a resolution adopted by the Committee and separately communicated to you (the “Resolution”). The following schedules set forth the Achievement Percentages and Payment Percentages applicable to Performance Stock Units subject to each Performance Goal, in the event that over the periods in which the Performance Stock Units are subject to a One-Year Goal and the Three-Year Goals, as applicable (the “Performance Period”), the Company’s Total Shareholder Return (as calculated pursuant to the formula described in the Resolution) is either flat or positive:

 

Performance Stock Units Subject to One-Year EBIT Margin Goal (25% Weighting)

Performance Stock Units Subject to Three-Year Goals (75% Weighting)

Three-Year Goals = Three Year ROIC Goal (2/3 Weighting out of 75%) and Three-Year EBIT Margin Goal (1/3 Weighting out of 75%)

Achievement Percentage (% of Peer Group Average)1

Payment Percentage of Common Stock Underlying PSUs

Achievement Percentage (% of Peer Group Average) Payment Percentage of Common Stock Underlying PSUs
       
180% or Greater 150% 180% or Greater 150%
145-179% 110% 145-179% 110%
100-144% 100% 100-144% 100%
70-99% 90% 70-99% 90%
60-69% 75% 60-69% 75%
50-59% 50% 50-59% 50%
40-49% 25% 40-49% 25%
<40% 0% <40% 0%

 

 

_________________________

1 The “Peer Group Average” applicable to the One-Year Goal and the Three-Year Goals is based on the peer group of companies selected by the Committee prior to the Grant Date and separately communicated to you.

 

 
 

 

The following schedules set forth the Achievement Percentages and Payment Percentages applicable to Performance Stock Units subject to each Performance Goal, in the event that over the Performance Period, the Company’s Total Shareholder Return (as calculated pursuant to the formula described in the Resolution) is negative:

 

Performance Stock Units Subject to One-Year EBIT Margin Goal (25% Weighting)

Performance Stock Units Subject to Three-Year Goals (75% Weighting)

Three-Year Goals = Three Year ROIC Goal (2/3 Weighting out of 75%) and Three-Year EBIT Margin Goal (1/3 Weighting out of 75%)

Achievement Percentage (% of Peer Group Average)2

Payment Percentage of Common Stock Underlying PSUs

Achievement Percentage (% of Peer Group Average) Payment Percentage of Common Stock Underlying PSUs
       
180% or Greater 100% 180% or Greater 100%
145-179% 100% 145-179% 100%
100-144% 100% 100-144% 100%
70-99% 90% 70-99% 90%
60-69% 75% 60-69% 75%
50-59% 50% 50-59% 50%
40-49% 25% 40-49% 25%
<40% 0% <40% 0%

 

8.       Vesting Schedule. Except in the case of death or Disability, your vesting in any portion of the Performance Stock Units is contingent on attainment of the applicable Performance Goal and on the subsequent certification of that attainment by the Committee. In the event a Performance Goal is not attained during the one-year performance period or the three-year performance period, as applicable, all of the Performance Stock Units subject to such Performance Goal shall be forfeited without compensation. Subject to the attainment of the applicable Performance Goal and the subsequent certification described above, unless you experience a Termination before the applicable Vesting Date, the Performance Stock Units will become vested in accordance with the following vesting schedules:

 

Vesting Date

Percent Vested Subject to

One-Year Goal

Percent Vested Subject to

Three-Year Goals

1st anniversary of Grant Date 100% N/A
2nd anniversary of Grant Date N/A N/A
3rd anniversary of Grant Date N/A 100%

 

For purposes of the payment of applicable withholding taxes required by applicable law, the number of shares of Common Stock underlying the Performance Stock Units to which you become entitled on payment shall be automatically reduced by the Company to cover the applicable minimum statutorily required withholding obligation, except that you may elect to pay some or all of the amount of such obligation in cash in a manner acceptable to the Company. In the event that the amount of tax withholding is automatically reduced, it is the intent of this Agreement that any deemed “sale” of the shares of Common Stock underlying the Performance Stock Units withheld will be exempt from liability under Section 16(b) of the Exchange Act pursuant to Rule 16b-3. All unscheduled and scheduled blackout periods (each, a “BP”) are determined by the Company. If any shares of Common Stock underlying vested Performance Stock Units are scheduled to be paid during a BP to which you are subject, (i) you will be paid the applicable shares of Common Stock on the scheduled payment date (net of any shares withheld by the Company to pay minimum required taxes), but (ii) you will be unable to sell such shares of Common Stock until the earliest date on which all BPs to which you are subject have expired.

 

Subject to paragraph 5 above, all vesting will occur only on the appropriate Vesting Date, with no proportionate or partial vesting in the period prior to any such date. Except as otherwise provided in the preceding paragraph, when any Performance Stock Unit becomes vested, the Company (unless it determines a delay is required under applicable law or rules) will, on the payment date described in paragraph 4 above (or promptly thereafter) issue and deliver to you a stock certificate registered in your name or will promptly recognize ownership of your shares through uncertificated book entry or another similar method, subject to applicable federal, state and local tax withholding in the manner described herein or otherwise acceptable to the Committee. Subject to the provisions of this Agreement, you will be permitted to transfer shares of Common Stock following your receipt thereof, but only to the extent permitted by applicable law or rule.

 

9.       Code Section 409A. Although the Company does not guarantee the particular tax treatment of any payment under this Agreement, payments made under this Agreement are intended to comply with, or be exempt from, the applicable requirements of Section 409A of the Code and the Plan and this Agreement shall be limited, construed and interpreted in accordance with such intent.  To the extent any payment made under this Agreement constitutes “non-qualified deferred compensation” pursuant to Section 409A of the Code, the provisions of Section 13.13(b) of the Plan (including, without limitation, the six-month delay relating to “specified employees”) shall apply.

 

10.    Notice. Any notice or communication to the Company concerning the Performance Stock Units must be in writing and delivered in person, or by U.S. mail, to the following address (or another address specified by the Company): Bed Bath & Beyond Inc., Finance Department – Stock Administration, 650 Liberty Avenue, Union, New Jersey 07083.

 

BED BATH & BEYOND INC.

 

 

By:        
  An Authorized Officer   Recipient (You)  

 

 

 

 

 

_________________________

2 The “Peer Group Average” applicable to the One-Year Goal and the Three-Year Goals is based on the peer group of companies selected by the Committee prior to the Grant Date and separately communicated to you.

EX-10.2 3 exh_102.htm EXHIBIT 10.2

Exhibit 10.2

 

This PERFORMANCE STOCK UNIT AGREEMENT is entered into as of May 10, 2017 (the “Grant Date”), between BED BATH & BEYOND INC. (the “Company”) and Steven H. Temares (“you”).

 

1.       Performance Stock Unit Grant. Subject to the restrictions, terms and conditions of the Plan and this Agreement, the Company hereby awards you the number of Performance Stock Units (the “Performance Stock Units”) specified in paragraph 8 below. The Performance Stock Units are subject to certain restrictions as set forth in the Plan and this Agreement.

 

2.       The Plan. The Performance Stock Units are entirely subject to the terms of the Company’s 2012 Incentive Compensation Plan, as amended from time to time (the “Plan”). A description of key terms of the Plan is set forth in the Prospectus for the Plan. Capitalized terms used but not defined in this Agreement have the meanings set forth in the Plan.

 

3.       Restrictions on Transfer. You will not sell, transfer, pledge, hypothecate, assign or otherwise dispose of (any such action, a “Transfer”) the Performance Stock Units, except as set forth in the Plan or this Agreement. Any attempted Transfer in violation of the Plan or this Agreement will be void and of no effect.

 

4.       Payment. With respect to each Performance Stock Unit that vests in accordance with the schedule set forth in paragraph 8 below, you will be entitled to receive a number of shares of Common Stock equal to one times the Payment Percentage set forth opposite the Achievement Percentage in paragraph 8 below. Subject to paragraph 6 below, and further subject to satisfaction of the Performance Goals, you will be paid such share(s) of Common Stock with respect to each vested Performance Stock Unit within thirty (30) days following the later of: (i) the applicable vesting date set forth in paragraph 9 below (the “Time-Based Vesting Date”); and (ii) the date of certification of the Achievement Percentage attained with respect to the applicable Performance Goal (as defined below) by the Committee (the “Performance-Based Vesting Date”), to the extent administratively practicable. The later of the Time-Based Vesting Date and the Performance-Based Vesting Date shall be referred to as the “Vesting Date.”

 

5.       Holding Period. Other than with respect to any shares of Common Stock used to cover tax withholdings as expressly permitted under paragraph 9 hereof, you hereby irrevocably agree not to, directly or indirectly, (i) Transfer (except as otherwise provided herein) any shares of the Subject Securities (as defined below) issued to you hereunder, or (ii) enter into any swap or other derivative transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Subject Securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise (such restrictions in clauses (i) and (ii), the “Sale Restrictions”), other than a Transfer by will or by the laws of descent and distribution.  The aggregate number of shares of Common Stock issuable in respect of the Performance Stock Units as of the Grant Date shall be referred to as the “Subject Securities.”  Notwithstanding the foregoing, “Subject Securities” shall not include any portion of the Performance Stock Units that have been forfeited or canceled under the terms of this Agreement. The Subject Securities shall be released from, and no longer subject to, the Sale Restrictions on the first day after the second anniversary of each applicable Time-Based Vesting Date, i.e., on the first day after the third anniversary of the Grant Date and on the first day after the fifth anniversary of the Grant Date, as applicable.  Notwithstanding the foregoing, one hundred percent (100%) of the Subject Securities shall be released from, and no longer subject to, the Sale Restrictions immediately upon your death, Disability, a Change of Control (as such term is defined in the Amended and Restated Supplemental Executive Retirement Benefit Agreement between you and the Company dated November 16, 2009), or a Termination of your employment by the Company without Cause. In all events, the holding and disposition of any shares of Common Stock acquired hereunder shall be subject to any limitation under the Plan and this Agreement, any applicable policies of the Company and the terms of applicable law.

 

6.       Forfeiture; Certain Terminations. Except as provided in this paragraph: (i) upon your Termination, all unvested Performance Stock Units shall immediately be forfeited without compensation; and (ii) upon the failure to attain a Performance Goal (as defined below), any unvested Performance Stock Units subject to any such unachieved Performance Goal shall immediately be forfeited without compensation. Notwithstanding anything herein to the contrary, the Performance Stock Units will vest in full upon a Termination by reason of your death or Disability. In the event of your Termination by the Company without Cause or, if provided in an agreement between you and the Company in effect as of the Grant Date, by you for Good Reason or due to a Constructive Termination without Cause, as each such term (or concept of like import) is defined in that agreement, the Performance Stock Units will vest upon, and subject to, the certification by the Committee of attainment of the applicable Performance Goal regardless of whether or not you are employed on the date of certification.

 

7.       Rights with Regard to Performance Stock Units. On and after the Grant Date, you will have the right to receive dividend equivalents with respect to the shares of Common Stock underlying the Performance Stock Units ultimately achieved under the Performance Goal described in paragraph 8, subject to the terms and conditions of this paragraph. Notwithstanding anything herein to the contrary, in no event shall a dividend equivalent be issued or paid with respect to any Performance Stock Unit that has been forfeited pursuant to paragraph 6. If the Company pays a dividend (whether in cash or stock) on its Common Stock shares, or its Common Stock shares are split, or the Company pays to holders of its Common Stock other shares, securities, monies, warrants, rights, options or property representing a dividend or distribution in respect of the Common Stock, then the Company will credit a deemed dividend or distribution to a book entry account on your behalf with respect to each share of Common Stock underlying the Performance Stock Units held by you, provided that your right to actually receive such cash or property shall be subject to the same restrictions as the Performance Stock Units to which the cash or property relates, and the cash or property shall be paid to you at the same time you receive the payment of the shares of Common Stock underlying the Performance Stock Units. Unless otherwise determined by the Committee, dividend equivalents shall not be deemed to be reinvested in Common Stock and shall be treated as uninvested at all times, without crediting any interest or earnings. Except as provided in this paragraph, you will have no rights as a holder of Common Stock with respect to the Performance Stock Units unless and until the Performance Stock Units become vested hereunder and you become the holder of record of the Common Stock underlying the Performance Stock Units.

 

8.       Grant Size; Performance Goals. Performance Stock Units covered by this award: _____________. Twenty-five percent (25%) of the Performance Stock Units will be subject to a one-year performance goal (the “One-Year Goal”) based on the Company’s EBIT Margin, as defined and approved by the Committee, and the remaining seventy-five percent (75%) of the Performance Stock Units will be subject to three-year performance goals (the “Three-Year Goals”) based on the Company’s ROIC and EBIT Margin, each as defined and approved by the Committee. In allocating the Performance Stock Units between the One-Year Goal and the Three-Year Goals, any remaining fractional share of Common Stock underlying the Performance Stock Units shall be allocated to the One-Year Goal. The One-Year Goal and the Three-Year Goals (each a “Performance Goal”) have been set forth in a resolution adopted by the Committee and separately communicated to you (the “Resolution”). The following schedules set forth the Achievement Percentages and Payment Percentages applicable to Performance Stock Units subject to each Performance Goal, in the event that over the periods in which the Performance Stock Units are subject to a One-Year Goal and the Three-Year Goals, as applicable (the “Performance Period”), the Company’s Total Shareholder Return (as calculated pursuant to the formula described in the Resolution) is either flat or positive:

 

 
 

 

Performance Stock Units Subject to One-Year EBIT Margin Goal (25% Weighting)

Performance Stock Units Subject to Three-Year Goals (75% Weighting)

Three-Year Goals = Three Year ROIC Goal (2/3 Weighting out of 75%) and Three-Year EBIT Margin Goal (1/3 Weighting out of 75%)

Achievement Percentage (% of Peer Group Average)1

Payment Percentage of Common Stock Underlying PSUs

Achievement Percentage (% of Peer Group Average) Payment Percentage of Common Stock Underlying PSUs
       
180% or Greater 150% 180% or Greater 150%
145-179% 110% 145-179% 110%
100-144% 100% 100-144% 100%
70-99% 90% 70-99% 90%
60-69% 75% 60-69% 75%
50-59% 50% 50-59% 50%
40-49% 25% 40-49% 25%
<40% 0% <40% 0%

 

The following schedules set forth the Achievement Percentages and Payment Percentages applicable to Performance Stock Units subject to each Performance Goal, in the event that over the Performance Period, the Company’s Total Shareholder Return (as calculated pursuant to the formula described in the Resolution) is negative:

 

Performance Stock Units Subject to One-Year EBIT Margin Goal (25% Weighting)

Performance Stock Units Subject to Three-Year Goals (75% Weighting)

Three-Year Goals = Three Year ROIC Goal (2/3 Weighting out of 75%) and Three-Year EBIT Margin Goal (1/3 Weighting out of 75%)

Achievement Percentage (% of Peer Group Average)2

Payment Percentage of Common Stock Underlying PSUs

Achievement Percentage (% of Peer Group Average) Payment Percentage of Common Stock Underlying PSUs
       
180% or Greater 100% 180% or Greater 100%
145-179% 100% 145-179% 100%
100-144% 100% 100-144% 100%
70-99% 90% 70-99% 90%
60-69% 75% 60-69% 75%
50-59% 50% 50-59% 50%
40-49% 25% 40-49% 25%
<40% 0% <40% 0%

 

9.       Vesting Schedule. Except in the case of death or Disability, your vesting in any portion of the Performance Stock Units is contingent on attainment of the applicable Performance Goal and on the subsequent certification of that attainment by the Committee. In the event a Performance Goal is not attained during the one-year performance period or the three-year performance period, as applicable, all of the Performance Stock Units subject to such Performance Goal shall be forfeited without compensation. Subject to the attainment of the applicable Performance Goal and the subsequent certification described above, unless you experience a Termination before the applicable Vesting Date, the Performance Stock Units will become vested in accordance with the following vesting schedules:

 

Vesting Date

Percent Vested Subject to

One-Year Goal

Percent Vested Subject to

Three-Year Goals

1st anniversary of Grant Date 100% N/A
2nd anniversary of Grant Date N/A N/A
3rd anniversary of Grant Date N/A 100%

 

For purposes of the payment of applicable withholding taxes required by applicable law, the number of shares of Common Stock underlying the Performance Stock Units to which you become entitled on payment shall be automatically reduced by the Company to cover the applicable minimum statutorily required withholding obligation, except that you may elect to pay some or all of the amount of such obligation in cash in a manner acceptable to the Company. In the event that the amount of tax withholding is automatically reduced, it is the intent of this Agreement that any deemed “sale” of the shares of Common Stock underlying the Performance Stock Units withheld will be exempt from liability under Section 16(b) of the Exchange Act pursuant to Rule 16b-3. All unscheduled and scheduled blackout periods (each, a “BP”) are determined by the Company. If any shares of Common Stock underlying vested Performance Stock Units are scheduled to be paid during a BP to which you are subject, (i) you will be paid the applicable shares of Common Stock on the scheduled payment date (net of any shares withheld by the Company to pay minimum required taxes), but (ii) you will be unable to sell such shares of Common Stock until the earliest date on which all BPs to which you are subject have expired.

 

Subject to paragraph 6 above, all vesting will occur only on the appropriate Vesting Date, with no proportionate or partial vesting in the period prior to any such date. Except as otherwise provided in the preceding paragraph, when any Performance Stock Unit becomes vested, the Company (unless it determines a delay is required under applicable law or rules) will, on the payment date described in paragraph 4 above (or promptly thereafter) issue and deliver to you a stock certificate registered in your name or will promptly recognize ownership of your shares through uncertificated book entry or another similar method, subject to applicable federal, state and local tax withholding in the manner described herein or otherwise acceptable to the Committee. Subject to the provisions of this Agreement, you will be permitted to transfer shares of Common Stock following your receipt thereof, but only to the extent permitted by applicable law or rule.

 

 

_________________________

1 The “Peer Group Average” applicable to the One-Year Goal and the Three-Year Goals is based on the peer group of companies selected by the Committee prior to the Grant Date and separately communicated to you.

2 The “Peer Group Average” applicable to the One-Year Goal and the Three-Year Goals is based on the peer group of companies selected by the Committee prior to the Grant Date and separately communicated to you.

 

 
 

 

10.    Code Section 409A. Although the Company does not guarantee the particular tax treatment of any payment under this Agreement, payments made under this Agreement are intended to comply with, or be exempt from, the applicable requirements of Section 409A of the Code and the Plan and this Agreement shall be limited, construed and interpreted in accordance with such intent.  To the extent any payment made under this Agreement constitutes “non-qualified deferred compensation” pursuant to Section 409A of the Code, the provisions of Section 13.13(b) of the Plan (including, without limitation, the six-month delay relating to “specified employees”) shall apply.

 

11.    Notice. Any notice or communication to the Company concerning the Performance Stock Units must be in writing and delivered in person, or by U.S. mail, to the following address (or another address specified by the Company): Bed Bath & Beyond Inc., Finance Department – Stock Administration, 650 Liberty Avenue, Union, New Jersey 07083.

 

BED BATH & BEYOND INC.

 

 

By:        
  An Authorized Officer   Steven H. Temares  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EX-31.1 4 exh_311.htm EXHIBIT 31.1

Exhibit 31.1

 

CERTIFICATION

 

I, Steven H. Temares, certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of Bed Bath & Beyond Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:  June 30, 2017 /s/ Steven H. Temares  
  Steven H. Temares
  Chief Executive Officer

EX-31.2 5 exh_312.htm EXHIBIT 31.2

Exhibit 31.2 

 

CERTIFICATION

 

I, Susan E. Lattmann, certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of Bed Bath & Beyond Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:  June 30, 2017 /s/ Susan E. Lattmann  
  Susan E. Lattmann
  Chief Financial Officer and Treasurer
  (Principal Financial and Accounting Officer)

EX-32 6 exh_32.htm EXHIBIT 32

Exhibit 32

 

CERTIFICATION

 

The undersigned, the Principal Executive Officer and Principal Financial Officer of Bed Bath & Beyond Inc. (the “Company”), hereby certify, to the best of their knowledge and belief, that the Form 10-Q of the Company for the quarterly period ended May 27, 2017, (the “Periodic Report”) accompanying this certification fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. The foregoing certification is provided solely for purposes of complying with the provisions of Section 906 of the Sarbanes - Oxley Act of 2002 and is not intended to be used for any other purposes.

 

 

Date:  June 30, 2017 /s/ Steven H. Temares  
  Steven H. Temares
  Chief Executive Officer
   
   
  /s/ Susan E. Lattmann  
  Susan E. Lattmann
  Chief Financial Officer and Treasurer
  (Principal Financial and Accounting Officer)

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Since the date of acquisition, the results of One Kings Lane&#x2019;s operations, which were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> material, have been included in the Company&#x2019;s results of operations and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> proforma disclosure of financial information has been presented. One Kings Lane is included in the North American Retail operating segment.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 23, 2016, </div>the Company acquired PersonalizationMall.com, LLC (&#x201c;PMall&#x201d;), an industry-leading online retailer of personalized products, for an aggregate purchase price of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$189.4</div> million. Since the date of acquisition, the result of PMall&#x2019;s operations, which were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> material, have been included in the Company&#x2019;s results of operations and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> proforma disclosure of financial information has been presented. PMall is included in the North American Retail operating segment.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed at the date of acquisition for PMall. The Company is in the process of finalizing the valuation of certain assets acquired and liabilities assumed; thus, the amounts below are subject to change until the anniversary of the acquisition.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"></div> <!-- Field: /Page --> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify">&nbsp;</div> <div style=" font-size: 10pt; text-align: center; margin: 0pt 0"></div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">(in millions)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt; border-bottom: Black 1.1pt solid">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">As of November 23, 2016</td> </tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; text-align: right">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; font-size: 10pt; text-align: left">Current assets</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 18%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15.1</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Property and equipment and other non-current assets</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9.3</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Goodwill</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">185.5</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.1pt">Intangible assets</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.4</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Total assets acquired</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">220.3</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.1pt">Accounts payable and other liabilities</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(30.9</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total net assets acquired</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">189.4</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: center; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">Included within intangible assets above is approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.0</div> million for tradenames, which is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> subject to amortization. The tradenames and goodwill are expected to be deductible for tax purposes.</div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 27, 2017, </div>the Company acquired certain assets including the brand, website and certain intellectual property assets and assumed certain contractual obligations of Chef Central, a retailer of kitchenware, cookware and homeware items catering to cooking and baking enthusiasts. Since the date of acquisition, the results of Chef Central&#x2019;s operations, which were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> material, have been included in the Company&#x2019;s results of operations and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> proforma disclosure of financial information has been presented. Chef Central is included in the North American Retail operating segment.</div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 6, 2017, </div>the Company acquired Decorist, Inc., an online interior design platform that provides personalized home design services. Since the date of acquisition, the results of Decorist&#x2019;s operations, which were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> material, have been included in the Company&#x2019;s results of operations for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> proforma disclosure of financial information has been presented. Decorist is included in the North American Retail operating segment.</div></div></div> 15100000 10000000 10400000 30900000 189400000 34100000 29100000 469320000 488329000 515573000 544269000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div>) Cash and Cash Equivalents</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle within <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div> business days, of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$100.6</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$86.6</div> million as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2017, </div>respectively.</div></div></div> -19009000 28696000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12</div>) Supplemental Cash Flow Information </div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company paid income taxes of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$8.7</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$75.2</div> million in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016,</div> respectively. In addition, the Company had interest payments of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.2</div></div> million in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016.</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company recorded an accrual for capital expenditures of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$34.1</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$29.1</div> million as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016, </div>respectively. In addition, the Company recorded an accrual for dividends payable of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$23.6</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$19.4</div> million as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 26, 2016, </div>respectively.</div></div></div> 0.375 0.125 0.50 0.15 0.15 0.125 0.125 0.125 0.15 0.01 0.01 900000000 900000000 341276000 339533000 144730000 146274000 3413000 3395000 69810000 129947000 0.362 0.638 0.366 0.634 1742026000 1714492000 100600000 86600000 300000000 300000000 900000000 0.03749 0.04915 0.05165 P5Y 76600000 70300000 10100000 74912000 70445000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>) Stock-Based Compensation </div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company measures all employee stock-based compensation awards using a fair value method and records such expense, net of estimated forfeitures, in its consolidated financial statements. Currently, the Company&#x2019;s stock-based compensation relates to restricted stock awards, stock options and performance stock units. The Company&#x2019;s restricted stock awards are considered nonvested share awards.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Stock-based compensation expense for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016 </div>was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$21.5</div> million (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$12.4</div> after tax or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.09</div> per diluted share) and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$20.7</div> million (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$12.9</div> million after tax or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.08</div> per diluted share), respectively. In addition, the amount of stock-based compensation cost capitalized for both the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016 </div>was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.5</div></div> million.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Incentive Compensation Plans </div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company currently grants awards under the Bed Bath &amp; Beyond <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2012</div> Incentive Compensation Plan (the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&#x201c;2012</div> Plan&#x201d;), which amended and restated the Bed Bath &amp; Beyond <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2004</div> Incentive Compensation Plan (the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">&#x201c;2004</div> Plan&#x201d;). The <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2012</div> Plan includes an aggregate of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">43.2</div> million common shares authorized for issuance and the ability to grant incentive stock options. Outstanding awards that were covered by the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2004</div> Plan continue to be in effect under the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2012</div> Plan.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2012</div> Plan is a flexible compensation plan that enables the Company to offer incentive compensation through stock options (whether nonqualified stock options or incentive stock options), restricted stock awards, stock appreciation rights, performance awards and other stock based awards, including cash awards. Under the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2012</div> Plan, grants are determined by the Compensation Committee for those awards granted to executive officers and by an appropriate committee for all other awards granted. Awards of stock options and restricted stock generally vest in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div> equal annual installments beginning <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> years from the date of grant. Awards of performance stock units generally vest over a period of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">four</div> years from the date of grant dependent on the Company&#x2019;s achievement of performance-based tests and subject, in general, to the executive remaining in the Company&#x2019;s service on specified vesting dates.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company generally issues new shares for stock option exercises, restricted stock awards and vesting of performance stock units.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Stock Options</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Stock option grants are issued at fair market value on the date of grant and generally become exercisable in either <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div> equal annual installments beginning <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> year from the date of grant for options issued since <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 10, 2010, </div>and beginning <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> years from the date of grant for options issued prior to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 10, 2010, </div>in each case, subject, in general, to the recipient remaining in the Company&#x2019;s service on specified vesting dates. Option grants expire <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">eight</div> years after the date of grant. All option grants are nonqualified. As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>unrecognized compensation expense related to the unvested portion of the Company&#x2019;s stock options was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$25.0</div> million, which is expected to be recognized over a weighted average period of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.7</div> years.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <!-- Field: /Page --> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">The fair value of the stock options granted was estimated on the date of the grant using a Black-Scholes option-pricing model that uses the assumptions noted in the following table.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Three Months Ended</td> </tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">Black-Scholes Valuation Assumptions&nbsp;&nbsp;(1)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">May 27, 2017</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">May 28, 2016</td> </tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; font-size: 10pt; text-align: left">Weighted Average Expected Life (in years)&nbsp;&nbsp;(2)</td> <td style="width: 2%; font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.7</div></td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.6</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Weighted Average Expected Volatility&nbsp;&nbsp;(3)</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26.49</div></td> <td style="font-size: 10pt; font-weight: bold; text-align: left">%</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26.96</div></td> <td style="font-size: 10pt; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Weighted Average Risk Free Interest Rates&nbsp;&nbsp;(4)</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.17</div></td> <td style="font-size: 10pt; font-weight: bold; text-align: left">%</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.46</div></td> <td style="font-size: 10pt; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected Dividend Yield (5)</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.60</div></td> <td style="font-size: 10pt; font-weight: bold; text-align: left">%</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.10</div></td> <td style="font-size: 10pt; text-align: left">%</td> </tr> </table> </div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 9pt">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div>)&nbsp;Forfeitures are estimated based on historical experience.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 9pt">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div>)&nbsp;The expected life of stock options is estimated based on historical experience.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 9pt">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div>)&nbsp;Expected volatility is based on the average of historical and implied volatility. The historical volatility is determined by observing actual prices of the Company&#x2019;s stock over a period commensurate with the expected life of the awards. The implied volatility represents the implied volatility of the Company&#x2019;s call options, which are actively traded on multiple exchanges, had remaining maturities in excess of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">twelve</div> months, had market prices close to the exercise prices of the employee stock options and were measured on the stock option grant date.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 9pt">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4</div>)&nbsp;Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of the stock options.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif; font-size: 9pt">(<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div>) Expected dividend yield is estimated based on anticipated dividend payouts.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Changes in the Company&#x2019;s stock options for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>were as follows:</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">(Shares in thousands)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Number of Stock Options</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Weighted Average <br /> Exercise Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; font-size: 10pt">Options outstanding, beginning of period</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,906</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">56.48</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Granted</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">694</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">37.50</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Exercised</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(359</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">28.33</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.1pt">Forfeited or expired</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 2.5pt">Options outstanding, end of period</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,241</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">55.76</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 2.5pt">Options exercisable, end of period</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,441</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60.38</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The weighted average fair value for the stock options granted during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div> was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$9.50</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$11.87,</div> respectively. The weighted average remaining contractual term for options outstanding as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.82</div> years and the aggregate intrinsic value was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.</div> The weighted average remaining contractual term for options exercisable as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.35</div> years and the aggregate intrinsic value was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.</div> The total intrinsic value for stock options exercised during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div> was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.9</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$8.3</div> million, respectively.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Net cash proceeds from the exercise of stock options for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.2</div> and the net associated income tax expense was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.2</div> million.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">&nbsp;</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Restricted Stock</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Restricted stock awards are issued and measured at fair market value on the date of grant and generally become vested in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div> equal annual installments beginning <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> years from the date of grant, subject, in general, to the recipient remaining in the Company&#x2019;s service on specified vesting dates. Vesting of restricted stock is based solely on time vesting. As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>unrecognized compensation expense related to the unvested portion of the Company&#x2019;s restricted stock awards was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$160.8</div> million, which is expected to be recognized over a weighted average period of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.9</div> years.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div><div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <!-- Field: Page; Sequence: 13; Value: 2 --> <!-- Field: /Page --> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Changes in the Company&#x2019;s restricted stock for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>were as follows:</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">(Shares in thousands)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Number of Restricted <br /> Shares</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Weighted Average <br /> Grant-Date Fair <br /> Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; font-size: 10pt; text-align: left">Unvested restricted stock, beginning of period</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,492</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58.12</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Granted</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,118</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">37.59</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Vested</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(527</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60.96</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 1.1pt">Forfeited</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(50</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53.16</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Unvested restricted stock, end of period</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,033</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">52.12</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Performance Stock Units</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Performance stock units (&#x201c;PSUs&#x201d;) are issued and measured at fair market value on the date of grant. Vesting of PSUs awarded to certain of the Company&#x2019;s executives is dependent on the Company&#x2019;s achievement of a performance-based test during a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div>-year period from the date of grant and during a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>-year period from the date of grant and, assuming achievement of the performance-based test, time vesting over periods of up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">four</div> years, subject, in general, to the executive remaining in the Company&#x2019;s service on specified vesting dates. Performance during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div>-year period will be based on Earnings Before Interest and Taxes (&#x201c;EBIT&#x201d;) margin relative to a peer group of the Company and performance during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>-year period will be based on Return on Invested Capital (&#x201c;ROIC&#x201d;) or a combination of EBIT margin and ROIC relative to such peer group. The awards based on EBIT margin and ROIC range from a floor of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">zero</div> to a cap of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">150%</div> of target achievement. PSUs are converted into shares of common stock upon payment following vesting. Upon grant of the PSUs, the Company recognizes compensation expense related to these awards based on the assumption that <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100%</div> of the target award will be achieved. The Company evaluates the target assumption on a quarterly basis and adjusts compensation expense related to these awards, as appropriate. As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>unrecognized compensation expense related to the unvested portion of the Company&#x2019;s performance stock units was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$41.2</div> million, which is expected to be recognized over a weighted average period of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.2</div> years.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Changes in the Company&#x2019;s PSUs for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>were as follows:</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">(Shares in thousands)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Number of Performance <br /> Stock Units</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Weighted Average <br /> Grant-Date Fair <br /> Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; font-size: 10pt; text-align: left">Unvested performance stock units, beginning of period</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,014</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">55.19</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Granted</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">660</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">37.50</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Vested</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(322</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">57.28</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 1.1pt">Forfeited</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Unvested performance stock units, end of period</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,352</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46.06</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table> </div></div> 23600000 19400000 0.53 0.81 0.53 0.80 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11</div>) Earnings per Share</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company presents earnings per share on a basic and diluted basis. Basic earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Stock-based awards for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016 </div>of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.2</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.7</div> million, respectively were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive.</div></div></div> -3215000 4119000 500000 500000 P3Y255D P4Y328D P2Y73D 160800000 41200000 25000000 200000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4</div>) Fair Value Measurements</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., &#x201c;the exit price&#x201d;) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The hierarchy for inputs used in measuring fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company&#x2019;s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In certain cases, the inputs used to measure fair value <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>fall into different levels of the fair value hierarchy. In such cases, an asset or liability must be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value.&nbsp;The fair value hierarchy is broken down into <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> levels based on the reliability of inputs as follows:</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <!-- Field: /Page --> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&#x2022; Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div> &#x2013; Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> entail a significant degree of judgment.</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 1in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&#x2022; Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> &#x2013; Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 1in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&#x2022; Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div> &#x2013; Valuations based on inputs that are unobservable and significant to the overall fair value measurement.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>the Company&#x2019;s financial assets utilizing Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div> inputs included long term trading investment securities traded on active securities exchanges. The Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have any financial assets utilizing Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> inputs. Financial assets utilizing Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div> inputs included long term investments in auction rate securities consisting of preferred shares of closed end municipal bond funds (See &#x201c;Investment Securities,&#x201d; Note <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6</div>).&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Fair Value of Financial Instruments</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company&#x2019;s financial instruments include cash and cash equivalents, investment securities, accounts payable, long term debt and certain other liabilities. The Company&#x2019;s investment securities include auction rate securities, which are stated at their approximate fair value. The book value of the financial instruments, excluding the Company&#x2019;s long term debt, is representative of their fair values. The fair value of the Company&#x2019;s long term debt is approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.407</div> billion as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>which is based on quoted prices in active markets for identical instruments (i.e., Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div> valuation), compared to the carrying value of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.500</div> billion.</div></div></div> 185500000 707643000 697085000 1000115000 1023592000 130431000 196711000 7600000 55148000 74092000 8700000 75200000 24567000 66260000 55805000 -4932000 25591000 42631000 59916000 71933000 20146000 32502000 631000 11946000 6256000 7515000 18200000 18700000 -16580000 -16315000 2200000 2200000 2962936000 2905660000 96100000 89600000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6</div>) Investment Securities</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company&#x2019;s investment securities as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2017 </div>are as follows:</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; font-style: italic; border-bottom: Black 1.1pt solid">(in millions)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">May 27, <br /> 2017</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">February 25, <br /> 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Available-for-sale securities:</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 60%; font-size: 10pt; text-align: left; padding-left: 10pt">Long term</td> <td style="width: 2%; font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left">$</td> <td style="width: 16%; font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19.5</div></td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 16%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19.3</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Trading securities:</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.1pt; padding-left: 10pt">Long term</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">76.6</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">70.3</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total investment securities</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">96.1</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">89.6</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table> </div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Auction Rate Securities</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2017, </div>the Company&#x2019;s long term available-for-sale investment securities represented approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$20.3</div></div> million par value of auction rate securities consisting of preferred shares of closed end municipal bond funds, less temporary valuation adjustments of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.8</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.0</div> million, respectively. Since these valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive loss, net of a related tax benefit, and did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> affect the Company&#x2019;s net earnings.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">&nbsp;</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Long Term Trading Investment Securities</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company&#x2019;s long term trading investment securities, which are provided as investment options to the participants of the nonqualified deferred compensation plan, are stated at fair market value. The values of these trading investment securities included in the table above are approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$76.6</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$70.3</div> million as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2017, </div>respectively.</div></div></div> 4203209000 4103378000 6875801000 6822655000 2125019000 2032501000 250000000 100000000 100000000 1500000000 1407000000 1491719000 1491603000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8</div>) Long Term Debt</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Senior Unsecured Notes</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July 17, 2014, </div>the Company issued <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$300</div> million aggregate principal amount of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.749%</div> senior unsecured notes due <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 1, 2024, </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$300</div> million aggregate principal amount of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.915%</div> senior unsecured notes due <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 1, 2034 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$900</div> million aggregate principal amount of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.165%</div> senior unsecured notes due <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 1, 2044 (</div>collectively, the &#x201c;Notes&#x201d;). Interest on the Notes is payable semi-annually on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 1 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 1 </div>of each year.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Notes were issued under an indenture (the &#x201c;Base Indenture&#x201d;), as supplemented by a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> supplemental indenture (together, with the Base Indenture, the &#x201c;Indenture&#x201d;), which contains various restrictive covenants, which are subject to important limitations and exceptions that are described in the Indenture. The Company was in compliance with all covenants related to the Notes as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017.</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Revolving Credit Agreement</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company has a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$250</div> million <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div> year senior unsecured revolving credit facility agreement (&#x201c;Revolver&#x201d;), expiring in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 2019, </div>with various lenders. During the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>the Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have any borrowings under the Revolver.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Revolver contains customary affirmative and negative covenants and also requires the Company to maintain a minimum leverage ratio. The Company was in compliance with all covenants related to the Revolver as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017.</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Deferred financing costs associated with the Notes and the Revolver of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.1</div> million were capitalized. In the accompanying Consolidated Balance Sheets, the deferred financing costs are included in long term debt, net of amortization, for the Notes and are included in other assets, net of amortization, for the Revolver. These deferred financing costs for the Notes and the Revolver are being amortized over the term of each of the Notes and the term of the Revolver and such amortization is included in interest expense, net in the Consolidated Statements of Earnings. Interest expense related to the Notes and the Revolver, including the commitment fee and the amortization of deferred financing costs, was approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$18.2</div> million and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$18.7</div> million for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016, </div>respectively.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">&nbsp;</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-style: italic;">Lines of Credit </div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">At <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>the Company maintained <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> uncommitted lines of credit of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$100</div></div> million each, with expiration dates of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 30, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2018, </div>respectively. These uncommitted lines of credit are currently and are expected to be used for letters of credit in the ordinary course of business. During the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> the Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have any direct borrowings under the uncommitted lines of credit. Although <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> assurances can be provided, the Company intends to renew both uncommitted lines of credit before the respective expiration dates.</div></div></div> 96121000 89592000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; font-style: italic; border-bottom: Black 1.1pt solid">(in millions)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">May 27, <br /> 2017</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">February 25, <br /> 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Available-for-sale securities:</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 60%; font-size: 10pt; text-align: left; padding-left: 10pt">Long term</td> <td style="width: 2%; font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left">$</td> <td style="width: 16%; font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19.5</div></td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 16%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19.3</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Trading securities:</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.1pt; padding-left: 10pt">Long term</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">76.6</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">70.3</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total investment securities</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">96.1</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">89.6</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table></div> -135324000 -158878000 -85104000 -25713000 204634000 209168000 75283000 122619000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div>) Recent Accounting Pronouncements</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">&nbsp;</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 2015, </div>the FASB issued Accounting Standards Update (&#x201c;ASU&#x201d;) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2015</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,</div> <div style="display: inline; font-style: italic;">Income Taxes (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740</div>): Balance Sheet Classification of Deferred Taxes</div>. This guidance requires an entity to classify deferred tax assets and liabilities as noncurrent assets and liabilities on the balance sheet. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2015</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17</div> is effective for annual reporting periods beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2016, </div>including interim periods within that reporting period, with earlier adoption permitted. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2015</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17</div> can be adopted either prospectively or retrospectively to each prior reporting period presented. At the beginning of the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> the Company adopted this guidance retrospectively, which resulted in decreases to other current assets of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$218.8</div>&nbsp;million and deferred rent and other liabilities of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$23.4</div>&nbsp;million and an increase to other assets of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$195.5</div>&nbsp;million as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2017.</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 2016, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09,</div> <div style="display: inline; font-style: italic;">Compensation - Stock Compensation (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">718</div>): Improvements to Employee Share-Based Payment Accounting</div>, which simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> requires, on a prospective basis, recognition of excess tax benefits and tax deficiencies (resulting from an increase or decrease in the fair value of an award from grant date to the vesting or exercise date) in the provision for income taxes as a discrete item in the period in which they occur. The ASU also changes the classification of excess tax benefits from a financing activity to an operating activity in the Company&#x2019;s consolidated statements of cash flows. In addition, ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> allows companies to make an accounting policy election to either estimate expected forfeitures or account for them as they occur. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> is effective for fiscal years beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2016, </div>and interim periods within those years, with early adoption permitted. The Company adopted ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div> During the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017, </div>the Company recognized in income tax expense a discrete tax expense of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$7.6</div>&nbsp;million related to tax deficiencies. Additionally, the Company elected to account for forfeitures as an estimate of the number of awards that are expected to vest, which is consistent with its accounting policy prior to adoption of ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09.</div> The Company adopted the provisions of ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> related to changes in the consolidated statements of cash flows on a retrospective basis. As such, excess tax benefits are now classified as an operating activity in the Company&#x2019;s Consolidated Statements of Cash Flows instead of as a financing activity. As a result, excess tax benefits of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.3</div>&nbsp;million for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016 </div>were reclassified from financing activities to operating activities. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> also requires that the value of shares withheld from employees upon vesting of stock awards in order to satisfy any applicable tax withholding requirements is presented within financing activities in the Company&#x2019;s Consolidated Statements of Cash Flows, which is consistent with the Company&#x2019;s historical presentation, and therefore had <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> impact to the Company.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <!-- Field: /Page --> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 2014, </div>the Financial Accounting Standards Board (&#x201c;FASB&#x201d;) issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2014</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09,</div> <div style="display: inline; font-style: italic;">Revenue from Contracts with Customers (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606</div>)</div>. This guidance requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July 2015, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2015</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,</div> <div style="display: inline; font-style: italic;">Revenue from Contracts with Customers (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606</div>): Deferral of the Effective Date</div>. This guidance deferred the effective date of ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2014</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> year from the original effective date. In accordance with the deferral, ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2014</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> is effective for annual reporting periods beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2017, </div>including interim periods within that reporting period. In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016,</div> the FASB issued several amendments to clarify various aspects of the implementation guidance. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2014</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09</div> can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> expect to adopt this ASU until required, and has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> yet selected the transition method. The Company is in the process of analyzing its revenue streams and quantifying the effects, if any, to the areas discussed above, and currently does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> expect the adoption of this standard will have a material impact on its consolidated financial position, results of operations, or cash flows.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2016, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02,</div> <div style="display: inline; font-style: italic;">Leases (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">842</div>)</div>. This guidance requires an entity to recognize lease liabilities and a right-of-use asset for all leases on the balance sheet and to disclose key information about the entity's leasing arrangements. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02</div> is effective for annual reporting periods beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2018, </div>including interim periods within that reporting period, with earlier adoption permitted. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02</div> must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures, but expects that it will result in a significant increase in the assets and liabilities recorded on the consolidated balance sheet.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 2017, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">01,</div> <div style="display: inline; font-style: italic;">Business Combinations (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">805</div>): Clarifying the Definition of a Business</div>. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">01</div> requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of identifiable assets, the set of assets would <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> represent a business. Also, in order to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to produce outputs. Under the update, fewer sets of assets are expected to be considered businesses. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">01</div> is effective for annual reporting periods beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2017, </div>including interim periods within that reporting period. The adoption of this guidance is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows.</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 2017, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">04,</div> <div style="display: inline; font-style: italic;">Intangibles &#x2013; Goodwill and Other (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">350</div>): Simplifying the Test for Goodwill Impairment</div>. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">04</div> eliminates the requirement to calculate the implied fair value of goodwill to measure the amount of impairment loss, if any, under the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">second</div> step of the current goodwill impairment test. Under the update, the goodwill impairment loss would be measured as the amount by which a reporting unit&#x2019;s carrying value exceeds its fair value, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> to exceed the carrying amount of goodwill. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">04</div> is effective for annual reporting periods beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2019, </div>with early adoption permitted. The adoption of this guidance is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows.</div></div></div> 2 147011000 213026000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div>) Basis of Presentation </div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The accompanying consolidated financial statements have been prepared without audit. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals and elimination of intercompany balances and transactions) necessary to present fairly the financial position of Bed Bath &amp; Beyond Inc. and subsidiaries (the &quot;Company&quot;) as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2017 </div>and the results of its operations, comprehensive income and cash flows for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016, </div>respectively.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The accompanying unaudited consolidated financial statements are presented in accordance with the requirements for Form <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>-Q and consequently do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> include all the disclosures normally required by U.S. generally accepted accounting principles (&#x201c;GAAP&#x201d;). Reference should be made to Bed Bath &amp; Beyond Inc.'s Annual Report on Form <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div>-K for the fiscal year ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2017 </div>for additional disclosures, including a summary of the Company's significant accounting policies, and to subsequently filed Forms <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8</div>-K.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Certain reclassifications have been made to the fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div> consolidated balance sheet and statement of cash flows to conform to the fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> consolidated balance sheet and statement of cash flows presentation.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company accounts for its operations as <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> operating segments: North American Retail and Institutional Sales. The Institutional Sales operating segment, which is comprised of Linen Holdings, does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> meet the quantitative thresholds under GAAP and therefore is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> a reportable segment. Net sales outside of the U.S. for the Company were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> material for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016.</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and certain juvenile products. Sales of domestics merchandise and home furnishings accounted for approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">36.2%</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">63.8%</div> of net sales, respectively, for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">36.6%</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">63.4%</div> of net sales, respectively, for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 28, 2016.</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">As the Company operates in the retail industry, its results of operations are affected by general economic conditions and consumer spending habits.</div></div></div> 217917000 197912000 604270000 606948000 -199000 -241000 -5838000 7363000 -5473000 7328000 166000 -276000 -555000 479000 127324000 10300000000 178124000 18161000 0 4344000 80760000 89455000 0.01 0.01 1000000 1000000 0 0 0 0 0 0 218800000 23400000 195500000 1300000 0 0 63742000 10161000 19246000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7</div>) Property and Equipment</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 25, 2017, </div>included in property and equipment, net is accumulated depreciation of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.9</div> billion and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2.8</div> billion, respectively.</div></div></div> 1817594000 1837129000 11057826000 11003890000 2742141000 2738084000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">(in millions)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt; border-bottom: Black 1.1pt solid">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">As of November 23, 2016</td> </tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; text-align: right">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; font-size: 10pt; text-align: left">Current assets</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 18%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15.1</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Property and equipment and other non-current assets</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9.3</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Goodwill</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">185.5</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.1pt">Intangible assets</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.4</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Total assets acquired</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">220.3</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.1pt">Accounts payable and other liabilities</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(30.9</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total net assets acquired</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">189.4</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">(Shares in thousands)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Number of Restricted <br /> Shares</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Weighted Average <br /> Grant-Date Fair <br /> Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; font-size: 10pt; text-align: left">Unvested restricted stock, beginning of period</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,492</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58.12</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Granted</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,118</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">37.59</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Vested</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(527</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60.96</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 1.1pt">Forfeited</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(50</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53.16</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Unvested restricted stock, end of period</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,033</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">52.12</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">(Shares in thousands)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Number of Stock Options</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Weighted Average <br /> Exercise Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; font-size: 10pt">Options outstanding, beginning of period</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,906</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">56.48</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Granted</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">694</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">37.50</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Exercised</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(359</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">28.33</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.1pt">Forfeited or expired</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 2.5pt">Options outstanding, end of period</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,241</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">55.76</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 2.5pt">Options exercisable, end of period</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,441</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60.38</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table></div> <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Three Months Ended</td> </tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">Black-Scholes Valuation Assumptions&nbsp;&nbsp;(1)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">May 27, 2017</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">May 28, 2016</td> </tr> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; font-size: 10pt; text-align: left">Weighted Average Expected Life (in years)&nbsp;&nbsp;(2)</td> <td style="width: 2%; font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.7</div></td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.6</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Weighted Average Expected Volatility&nbsp;&nbsp;(3)</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26.49</div></td> <td style="font-size: 10pt; font-weight: bold; text-align: left">%</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26.96</div></td> <td style="font-size: 10pt; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Weighted Average Risk Free Interest Rates&nbsp;&nbsp;(4)</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.17</div></td> <td style="font-size: 10pt; font-weight: bold; text-align: left">%</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.46</div></td> <td style="font-size: 10pt; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected Dividend Yield (5)</td> <td style="font-size: 10pt; font-weight: bold">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</td> <td style="font-size: 10pt; font-weight: bold; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.60</div></td> <td style="font-size: 10pt; font-weight: bold; text-align: left">%</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.10</div></td> <td style="font-size: 10pt; text-align: left">%</td> </tr> </table></div> 853104000 810566000 21490000 20748000 P5Y P4Y P3Y P5Y P5Y P4Y 50000 53.16 1118000 660000 37.59 37.50 3492000 4033000 1014000 1352000 58.12 52.12 55.19 46.06 527000 322000 60.96 57.28 0.016 0.011 0.0217 0.0146 0.2649 0.2696 43200000 2441000 60.38 3900000 8300000 694000 9.50 11.87 0 3906000 4241000 56.48 55.76 28.33 37.50 <div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;"> <tr style="vertical-align: bottom"> <td nowrap="nowrap" style="font-size: 10pt; font-weight: bold; border-bottom: Black 1.1pt solid">(Shares in thousands)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Number of Performance <br /> Stock Units</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.1pt">&nbsp;</td> <td nowrap="nowrap" colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.1pt solid">Weighted Average <br /> Grant-Date Fair <br /> Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; font-size: 10pt; text-align: left">Unvested performance stock units, beginning of period</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,014</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> <td style="width: 2%; font-size: 10pt">&nbsp;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">55.19</div></td> <td style="width: 1%; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Granted</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">660</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">37.50</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Vested</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(322</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt">&nbsp;</td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">57.28</div></td> <td style="font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 1.1pt">Forfeited</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 1.1pt">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="border-bottom: Black 1.1pt solid; font-size: 10pt; text-align: left">&nbsp;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Unvested performance stock units, end of period</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,352</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> <td style="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46.06</div></td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</td> </tr> </table></div> P8Y P6Y255D P6Y219D 0 P3Y127D P4Y299D 359000 11950000000 1600000000 2672592000 2719277000 <div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9</div>) Shareholders&#x2019; Equity</div></div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">The Company has authorization to make repurchases from time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules&nbsp;and regulations.</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">Between <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2004</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 2015, </div>the Company&#x2019;s Board of Directors authorized, through several share repurchase programs, the repurchase of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$11.950</div> billion of its shares of common stock. The Company also acquires shares of its common stock to cover employee related taxes withheld on vested restricted stock and performance stock unit awards. In the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> the Company repurchased approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.3</div> million shares of its common stock for a total cost of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$127.3</div> million, bringing the aggregate total of common stock repurchased to approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">196.5</div> million shares for a total cost of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.3</div> billion since the initial authorization in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2004.</div> The Company has approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.6</div> billion remaining of authorized share repurchases as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 27, 2017.</div></div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div> <!-- Field: Page; Sequence: 11; Value: 2 --> <!-- Field: /Page --> <div style=" font: 10pt Courier; margin: 0pt 0; text-align: justify"><div style="display: inline; font-family: Times New Roman, Times, Serif"></div></div><div style=" font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">During fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016,</div> the Company&#x2019;s Board of Directors authorized a quarterly dividend program. Quarterly dividends of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.125</div></div></div></div> per share in each quarter, totaling <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.50</div> per share for fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div> were declared by the Company&#x2019;s Board of Directors, of which <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.375</div> per share was paid in fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016.</div> On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 5, 2017, </div>the Company&#x2019;s Board of Directors declared a quarterly dividend of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.15</div> per share to be paid on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July 18, 2017 </div>to shareholders of record at the close of business on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 16, 2017. </div>Subsequent to the end of the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> June 22, 2017, </div>the Company&#x2019;s Board of Directors declared a quarterly dividend of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.15</div> per share to be paid on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> October 17, 2017 </div>to shareholders of record as of the close of business on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 15, 2017. </div>The Company expects to pay quarterly cash dividends on its common stock in the future, subject to the determination by the Board of Directors, based on an evaluation of the Company&#x2019;s earnings, financial condition and requirements, business conditions and other factors.</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">&nbsp;</div></div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0"><div style="display: inline; font-family: Times New Roman, Times, Serif">Cash dividends, if any, are accrued as a liability on the Company&#x2019;s consolidated balance sheets and recorded as a decrease to additional paid-in capital when declared.</div></div></div> 76600000 70300000 196546000 193259000 3300000 196500000 10342863000 10215539000 142141000 153752000 141331000 152157000 Forfeitures are estimated based on historical experience. 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This period may be explicit or implicit based on the terms of the award, and may be presented in a variety of ways (for example, year, month and year, day, month and year, quarter of a year). us-gaap_AssetsCurrent Total current assets Accrued expenses and other current liabilities Long-term Debt, Type [Axis] Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] Entity Filer Category Entity Current Reporting Status Entity Voluntary Filers Long-term Debt, Type [Domain] Entity Well-known Seasoned Issuer us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice Options outstanding, weighted average exercise price, beginning of period (in dollars per share) Options outstanding, weighted average exercise price, end of period (in dollars per share) Options forfeited or expired, weighted average exercise price (in dollars per share) us-gaap_StockRepurchaseProgramRemainingAuthorizedRepurchaseAmount1 Stock Repurchase Program, Remaining Authorized Repurchase Amount Options granted, weighted average exercise price (in dollars per share) Options exercised, weighted average exercise price (in dollars per share) Reclassification of Deferred Tax Assets From Other Current Assets to Other Assets [Member] Represents the reclassification of deferred tax assets from other current assets to other assets. us-gaap_StockRepurchaseProgramAuthorizedAmount1 Stock Repurchase Program, Authorized Amount Adjustments to reconcile net earnings to net cash provided by operating activities: Entity Central Index Key Reclassification of Deferred Tax Assets and Liabilities From Other Current and Deferred Rent and Other Liabilities to Other Assets [Member] Represents the reclassification of deferred tax assets and liabilities from other current and deferred rent and other liabilities to other assets. Entity Registrant Name February 25, 2017 [Member] Represents the date as of February 25, 2017. Reclassification of Deferred Tax Liabilities From Deferred Rent and Other Liabilities to Other Assets [Member] Represents the reclassification of deferred tax liabilities from deferred rent and other liabilities to other assets. Entity [Domain] Legal Entity [Axis] Uncommitted Line of Credit Expiring February 25, 2018 [Member] Represents information pertaining to an uncommitted line of credit that has an expiration date of February 25, 2018. us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber Options outstanding, beginning of period (in shares) Options outstanding, end of period (in shares) bbby_ShareBasedCompensationArrangementByShareBasedPaymentAwardRequisiteServicePeriod Share Based Compensation Arrangement By Share Based Payment Award Requisite Service Period Description of the estimated period of time over which an employee is required to provide service in exchange for the equity-based payment award before the vesting period commences. This period may be explicit or implicit based on the terms of the award, and may be presented in a variety of ways (for example, year, month and year, day, month and year, quarter of a year). Three Months Ended May 28, 2016 [Member] Represents the period of three months ended May 28, 2016. Options forfeited or expired (in shares) Merchandise credit and gift card liabilities Carrying value as of the balance sheet date of the liability for merchandise credits and outstanding gift cards. Retail customers receive merchandise credits when products are returned and purchase gift cards that can be redeemed at a later date for merchandise; those unredeemed represent a liability of the entity because the revenue is being deferred. Other current assets Net earnings Net earnings Entity Common Stock, Shares Outstanding (in shares) bbby_ShareBasedCompensationArrangementByShareBasedPaymentAwardTargetAwardPercentage Share Based Compensation Arrangement By Share Based Payment Award Target Award Percentage Represents the percentage of target achievement based on various levels of EBIT margin and ROIC relative to a peer group. us-gaap_IncomeTaxesPaid Income Taxes Paid us-gaap_InterestPaid Interest Paid Liabilities and Shareholders' Equity Reclassification of Excess Tax Benefits from Financing to Operating Activities [Member] Represents the reclassification of excess tax benefits from financing to operating activities. us-gaap_DeferredFinanceCostsGross Debt Issuance Costs, Gross Scenario Assumption [Member] Information pertaining to a scenario assumption. us-gaap_Assets Total assets Additional paid-in capital Merchandise inventories Shareholders' equity: us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized One-year Performance Period Awards [Member] Period of performance award. us-gaap_SharebasedCompensationArrangementBySharebasedPaymentAwardExpirationPeriod Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period Trading Symbol us-gaap_PaymentsToAcquirePropertyPlantAndEquipment Capital expenditures us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod1 Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period Vesting [Domain] us-gaap_StockholdersEquity Total shareholders' equity Plan Name [Axis] Selling, general and administrative expenses bbby_NumberOfBusinessDaysForSettlementOfCreditAndDebitCardReceivable Number of Business Days for Settlement of Credit and Debit Card Receivable Represents the number of business days for the settlement of credit and debit card receivables. us-gaap_DebtInstrumentTerm Debt Instrument, Term Vesting [Axis] Plan Name [Domain] us-gaap_EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedShareBasedAwardsOtherThanOptions Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options us-gaap_Liabilities Total liabilities us-gaap_CapitalExpendituresIncurredButNotYetPaid Capital Expenditures Incurred but Not yet Paid us-gaap_EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedPeriodForRecognition1 Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition Performance Shares [Member] us-gaap_EmployeeServiceShareBasedCompensationTaxBenefitFromExerciseOfStockOptions Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options us-gaap_EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options Cost of sales The 2024 Notes [Member] Information pertaining to the 2024 Notes. Restricted Stock [Member] Senior Unsecured Notes [Member] Information pertaining to the senior unsecured notes. The 2034 Notes [Member] Information pertaining to the 2034 Notes. us-gaap_EmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsCapitalizedAmount Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount Revolver [Member] Information pertaining to the senior unsecured revolving credit facility agreement. Employee Stock Option [Member] The 2044 Notes [Member] Information pertaining to the 2044 Notes. Cash Flows from Operating Activities: Statement [Line Items] Deferred income taxes The noncash component of income tax expense for the period representing the increase (decrease) in the entity's deferred tax assets and liabilities pertaining to continuing operations. Disclosure of Compensation Related Costs, Share-based Payments [Text Block] Statement of Comprehensive Income [Abstract] us-gaap_InterestExpense Interest Expense Merchandise credit and gift card liabilities bbby_IncreaseDecreaseInMerchandiseCreditAndGiftCardLiabilities The net change during the reporting period in the amount of liability for merchandise credits and outstanding gift cards. Retail customers receive merchandise credits when products are returned and purchase gift cards that can be redeemed at a later date for merchandise; those unredeemed represent a liability of the entity because the revenue is being deferred. Change in temporary impairment of auction rate securities, net of taxes Fair Value Disclosures [Text Block] us-gaap_OtherComprehensiveIncomeDefinedBenefitPlansAdjustmentNetOfTaxPortionAttributableToParent Pension adjustment, net of taxes Deferred rent and other liabilities bbby_IncreaseDecreaseInDeferredRentAndOtherLiabilities The net change during the reporting period in the aggregate amount of (1) deferred rent liability, which is the cumulative difference between the rental income or payments required by a lease agreement and the rental income or expense recognized on a straight-line basis, or other systematic and rational basis more representative of the time pattern in which use or benefit is granted or derived from the leased property, expected to be recognized in income or expense, by the lessor or lessee, respectively, more than one year after the balance sheet date, and (2) the net change during the reporting period in the aggregate carrying amount of noncurrent liabilities that are expected to be paid after one year (or the normal operating cycle, if longer). Senior Unsecured Notes and Revolver [Member] Represents the Senior Unsecured Notes and Revolver. Goodwill Employee Stock Option Issued Since May 10, 2010 [Member] Information pertaining to employee stock option issued since May 10, 2010. Current assets: Property and equipment, net us-gaap_LongTermDebtFairValue Long-term Debt, Fair Value us-gaap_AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment Accounting Standards Update 2016-09 [Member] Debt Instrument [Axis] Currency translation adjustment Debt Instrument, Name [Domain] us-gaap_DebtInstrumentInterestRateStatedPercentage Debt Instrument, Interest Rate, Stated Percentage us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease Net (decrease) increase in cash and cash equivalents us-gaap_TableTextBlock Notes Tables Effect of exchange rate changes on cash and cash equivalents us-gaap_Investments Total investment securities us-gaap_DebtInstrumentFaceAmount Debt Instrument, Face Amount us-gaap_NetCashProvidedByUsedInFinancingActivitiesContinuingOperations Net cash used in financing activities us-gaap_NetCashProvidedByUsedInInvestingActivitiesContinuingOperations Net cash used in investing activities Domestic Merchandise [Member] Represents domestic merchandise. Business Acquisition, Acquiree [Domain] Earnings Per Share [Text Block] us-gaap_NetCashProvidedByUsedInOperatingActivitiesContinuingOperations Net cash provided by operating activities Home Furnishings [Member] Represents home furnishings. Business Acquisition [Axis] bbby_AvailableForSaleSecuritiesTemporaryImpairmentAdjustmentAccumulatedOtherComprehensiveIncomeLoss Available-for-sale Securities Temporary Impairment Adjustment Accumulated Other Comprehensive Income (Loss) This element represents the temporary valuation adjustment related to available-for-sale investment securities which is recorded in accumulated other comprehensive (loss) income. EX-101.PRE 12 bbby-20170527_pre.xml XBRL PRESENTATION FILE XML 13 R1.htm IDEA: XBRL DOCUMENT v3.7.0.1
Document And Entity Information
3 Months Ended
May 27, 2017
shares
Document Information [Line Items]  
Entity Registrant Name BED BATH & BEYOND INC
Entity Central Index Key 0000886158
Trading Symbol bbby
Current Fiscal Year End Date --02-24
Entity Filer Category Large Accelerated Filer
Entity Current Reporting Status Yes
Entity Voluntary Filers No
Entity Well-known Seasoned Issuer Yes
Entity Common Stock, Shares Outstanding (in shares) 144,729,975
Document Type 10-Q
Document Period End Date May 27, 2017
Document Fiscal Year Focus 2017
Document Fiscal Period Focus Q1
Amendment Flag false
XML 14 R2.htm IDEA: XBRL DOCUMENT v3.7.0.1
Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
May 27, 2017
Feb. 25, 2017
Current assets:    
Cash and cash equivalents $ 469,320 $ 488,329
Merchandise inventories 2,962,936 2,905,660
Other current assets 217,917 197,912
Total current assets 3,650,173 3,591,901
Long term investment securities 96,121 89,592
Property and equipment, net 1,817,594 1,837,129
Goodwill 707,643 697,085
Other assets 604,270 606,948
Total assets 6,875,801 6,822,655
Liabilities and Shareholders' Equity    
Accounts payable 1,178,811 1,179,088
Accrued expenses and other current liabilities 509,501 484,114
Merchandise credit and gift card liabilities 319,496 309,478
Current income taxes payable 117,211 59,821
Total current liabilities 2,125,019 2,032,501
Deferred rent and other liabilities 520,040 511,303
Income taxes payable 66,431 67,971
Long term debt 1,491,719 1,491,603
Total liabilities 4,203,209 4,103,378
Shareholders' equity:    
Preferred stock - $0.01 par value; authorized - 1,000 shares; no shares issued or outstanding 0 0
Common stock - $0.01 par value; authorized - 900,000 shares; issued 341,276 and 339,533, respectively; outstanding 144,730 and 146,274 shares, respectively 3,413 3,395
Additional paid-in capital 2,006,939 1,974,781
Retained earnings 11,057,826 11,003,890
Treasury stock, at cost; 196,546 and 193,259 shares, respectively (10,342,863) (10,215,539)
Accumulated other comprehensive loss (52,723) (47,250)
Total shareholders' equity 2,672,592 2,719,277
Total liabilities and shareholders' equity $ 6,875,801 $ 6,822,655
XML 15 R3.htm IDEA: XBRL DOCUMENT v3.7.0.1
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
shares in Thousands
May 27, 2017
Feb. 25, 2017
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized (in shares) 1,000 1,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 900,000 900,000
Common stock, shares issued (in shares) 341,276 339,533
Common stock, shares outstanding (in shares) 144,730 146,274
Treasury stock, shares (in shares) 196,546 193,259
XML 16 R4.htm IDEA: XBRL DOCUMENT v3.7.0.1
Consolidated Statements of Earnings (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
May 27, 2017
May 28, 2016
Net sales $ 2,742,141 $ 2,738,084
Cost of sales 1,742,026 1,714,492
Gross profit 1,000,115 1,023,592
Selling, general and administrative expenses 853,104 810,566
Operating profit 147,011 213,026
Interest expense, net 16,580 16,315
Earnings before provision for income taxes 130,431 196,711
Provision for income taxes 55,148 74,092
Net earnings $ 75,283 $ 122,619
Net earnings per share - Basic (in dollars per share) $ 0.53 $ 0.81
Net earnings per share - Diluted (in dollars per share) $ 0.53 $ 0.80
Weighted average shares outstanding - Basic (in shares) 141,331 152,157
Weighted average shares outstanding - Diluted (in shares) 142,141 153,752
Dividends declared per share (in dollars per share) $ 0.15 $ 0.125
XML 17 R5.htm IDEA: XBRL DOCUMENT v3.7.0.1
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
May 27, 2017
May 28, 2016
Net earnings $ 75,283 $ 122,619
Other comprehensive (loss) income:    
Change in temporary impairment of auction rate securities, net of taxes 166 (276)
Pension adjustment, net of taxes 199 241
Currency translation adjustment (5,838) 7,363
Other comprehensive (loss) income (5,473) 7,328
Comprehensive income $ 69,810 $ 129,947
XML 18 R6.htm IDEA: XBRL DOCUMENT v3.7.0.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
May 27, 2017
May 28, 2016
Cash Flows from Operating Activities:    
Net earnings $ 75,283 $ 122,619
Adjustments to reconcile net earnings to net cash provided by operating activities:    
Depreciation and amortization 74,912 70,445
Stock-based compensation 21,490 20,748
Deferred income taxes (6,571) 4,153
Other 555 (479)
Increase in assets, net of effect of acquisitions:    
Merchandise inventories (59,916) (71,933)
Trading investment securities (6,256) (7,515)
Other current assets (20,146) (32,502)
Other assets (631) (11,946)
Increase (decrease) in liabilities, net of effect of acquisitions:    
Accounts payable 24,567 66,260
Accrued expenses and other current liabilities 25,591 42,631
Merchandise credit and gift card liabilities 10,172 8,319
Income taxes payable 55,805 (4,932)
Deferred rent and other liabilities 9,779 3,300
Net cash provided by operating activities 204,634 209,168
Cash Flows from Investing Activities:    
Redemption of held-to-maturity investment securities 63,742
Capital expenditures (80,760) (89,455)
Payment for acquisition, net of cash acquired (4,344)
Net cash used in investing activities (85,104) (25,713)
Cash Flows from Financing Activities:    
Proceeds from exercise of stock options 10,161 19,246
Payment of dividends (18,161) 0
Repurchase of common stock, including fees (127,324) (178,124)
Net cash used in financing activities (135,324) (158,878)
Effect of exchange rate changes on cash and cash equivalents (3,215) 4,119
Net (decrease) increase in cash and cash equivalents (19,009) 28,696
Cash and cash equivalents:    
Beginning of period 488,329 515,573
End of period $ 469,320 $ 544,269
XML 19 R7.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 1 - Basis of Presentation
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
1
) Basis of Presentation
 
The accompanying consolidated financial statements have been prepared without audit. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals and elimination of intercompany balances and transactions) necessary to present fairly the financial position of Bed Bath & Beyond Inc. and subsidiaries (the "Company") as of
May 27, 2017
and
February 25, 2017
and the results of its operations, comprehensive income and cash flows for the
three
months ended
May 27, 2017
and
May 28, 2016,
respectively.
 
The accompanying unaudited consolidated financial statements are presented in accordance with the requirements for Form
10
-Q and consequently do
not
include all the disclosures normally required by U.S. generally accepted accounting principles (“GAAP”). Reference should be made to Bed Bath & Beyond Inc.'s Annual Report on Form
10
-K for the fiscal year ended
February 25, 2017
for additional disclosures, including a summary of the Company's significant accounting policies, and to subsequently filed Forms
8
-K.
 
Certain reclassifications have been made to the fiscal
2016
consolidated balance sheet and statement of cash flows to conform to the fiscal
2017
consolidated balance sheet and statement of cash flows presentation.
 
The Company accounts for its operations as
two
operating segments: North American Retail and Institutional Sales. The Institutional Sales operating segment, which is comprised of Linen Holdings, does
not
meet the quantitative thresholds under GAAP and therefore is
not
a reportable segment. Net sales outside of the U.S. for the Company were
not
material for the
three
months ended
May 27, 2017
and
May 28, 2016.
 
The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and certain juvenile products. Sales of domestics merchandise and home furnishings accounted for approximately
36.2%
and
63.8%
of net sales, respectively, for the
three
months ended
May 27, 2017
and approximately
36.6%
and
63.4%
of net sales, respectively, for the
three
months ended
May 28, 2016.
 
As the Company operates in the retail industry, its results of operations are affected by general economic conditions and consumer spending habits.
XML 20 R8.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 2 - Acquisitions
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
2
) Acquisitions
 
On
June 13, 2016,
the Company acquired One Kings Lane, Inc., an online authority in home décor and design, offering a unique collection of select home goods, designer and vintage items. Since the date of acquisition, the results of One Kings Lane’s operations, which were
not
material, have been included in the Company’s results of operations and
no
proforma disclosure of financial information has been presented. One Kings Lane is included in the North American Retail operating segment.
 
On
November 23, 2016,
the Company acquired PersonalizationMall.com, LLC (“PMall”), an industry-leading online retailer of personalized products, for an aggregate purchase price of approximately
$189.4
million. Since the date of acquisition, the result of PMall’s operations, which were
not
material, have been included in the Company’s results of operations and
no
proforma disclosure of financial information has been presented. PMall is included in the North American Retail operating segment.
 
The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed at the date of acquisition for PMall. The Company is in the process of finalizing the valuation of certain assets acquired and liabilities assumed; thus, the amounts below are subject to change until the anniversary of the acquisition.
 
(in millions)   As of November 23, 2016
     
Current assets   $
15.1
 
Property and equipment and other non-current assets    
9.3
 
Goodwill    
185.5
 
Intangible assets    
10.4
 
Total assets acquired    
220.3
 
         
Accounts payable and other liabilities    
(30.9
)
         
Total net assets acquired   $
189.4
 
 
Included within intangible assets above is approximately
$10.0
million for tradenames, which is
not
subject to amortization. The tradenames and goodwill are expected to be deductible for tax purposes.
 
On
January 27, 2017,
the Company acquired certain assets including the brand, website and certain intellectual property assets and assumed certain contractual obligations of Chef Central, a retailer of kitchenware, cookware and homeware items catering to cooking and baking enthusiasts. Since the date of acquisition, the results of Chef Central’s operations, which were
not
material, have been included in the Company’s results of operations and
no
proforma disclosure of financial information has been presented. Chef Central is included in the North American Retail operating segment.
 
On
March 6, 2017,
the Company acquired Decorist, Inc., an online interior design platform that provides personalized home design services. Since the date of acquisition, the results of Decorist’s operations, which were
not
material, have been included in the Company’s results of operations for the
three
months ended
May 27, 2017,
and
no
proforma disclosure of financial information has been presented. Decorist is included in the North American Retail operating segment.
XML 21 R9.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 3 - Recent Accounting Pronouncements
3 Months Ended
May 27, 2017
Notes to Financial Statements  
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]
3
) Recent Accounting Pronouncements
 
In
November 2015,
the FASB issued Accounting Standards Update (“ASU”)
2015
-
17,
Income Taxes (Topic
740
): Balance Sheet Classification of Deferred Taxes
. This guidance requires an entity to classify deferred tax assets and liabilities as noncurrent assets and liabilities on the balance sheet. ASU
2015
-
17
is effective for annual reporting periods beginning after
December 15, 2016,
including interim periods within that reporting period, with earlier adoption permitted. ASU
2015
-
17
can be adopted either prospectively or retrospectively to each prior reporting period presented. At the beginning of the
first
quarter of fiscal
2017,
the Company adopted this guidance retrospectively, which resulted in decreases to other current assets of
$218.8
 million and deferred rent and other liabilities of
$23.4
 million and an increase to other assets of
$195.5
 million as of
February 25, 2017.
 
In
March 2016,
the FASB issued ASU
2016
-
09,
Compensation - Stock Compensation (Topic
718
): Improvements to Employee Share-Based Payment Accounting
, which simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU
2016
-
09
requires, on a prospective basis, recognition of excess tax benefits and tax deficiencies (resulting from an increase or decrease in the fair value of an award from grant date to the vesting or exercise date) in the provision for income taxes as a discrete item in the period in which they occur. The ASU also changes the classification of excess tax benefits from a financing activity to an operating activity in the Company’s consolidated statements of cash flows. In addition, ASU
2016
-
09
allows companies to make an accounting policy election to either estimate expected forfeitures or account for them as they occur. ASU
2016
-
09
is effective for fiscal years beginning after
December 15, 2016,
and interim periods within those years, with early adoption permitted. The Company adopted ASU
2016
-
09
during the
first
quarter of fiscal
2017.
During the
three
months ended
May 27, 2017,
the Company recognized in income tax expense a discrete tax expense of
$7.6
 million related to tax deficiencies. Additionally, the Company elected to account for forfeitures as an estimate of the number of awards that are expected to vest, which is consistent with its accounting policy prior to adoption of ASU
2016
-
09.
The Company adopted the provisions of ASU
2016
-
09
related to changes in the consolidated statements of cash flows on a retrospective basis. As such, excess tax benefits are now classified as an operating activity in the Company’s Consolidated Statements of Cash Flows instead of as a financing activity. As a result, excess tax benefits of
$1.3
 million for the
three
months ended
May 28, 2016
were reclassified from financing activities to operating activities. ASU
2016
-
09
also requires that the value of shares withheld from employees upon vesting of stock awards in order to satisfy any applicable tax withholding requirements is presented within financing activities in the Company’s Consolidated Statements of Cash Flows, which is consistent with the Company’s historical presentation, and therefore had
no
impact to the Company.
 
In
May 2014,
the Financial Accounting Standards Board (“FASB”) issued ASU
2014
-
09,
Revenue from Contracts with Customers (Topic
606
)
. This guidance requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In
July 2015,
the FASB issued ASU
2015
-
14,
Revenue from Contracts with Customers (Topic
606
): Deferral of the Effective Date
. This guidance deferred the effective date of ASU
2014
-
09
for
one
year from the original effective date. In accordance with the deferral, ASU
2014
-
09
is effective for annual reporting periods beginning after
December 15, 2017,
including interim periods within that reporting period. In
2016,
the FASB issued several amendments to clarify various aspects of the implementation guidance. ASU
2014
-
09
can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company does
not
expect to adopt this ASU until required, and has
not
yet selected the transition method. The Company is in the process of analyzing its revenue streams and quantifying the effects, if any, to the areas discussed above, and currently does
not
expect the adoption of this standard will have a material impact on its consolidated financial position, results of operations, or cash flows.
 
In
February 2016,
the FASB issued ASU
2016
-
02,
Leases (Topic
842
)
. This guidance requires an entity to recognize lease liabilities and a right-of-use asset for all leases on the balance sheet and to disclose key information about the entity's leasing arrangements. ASU
2016
-
02
is effective for annual reporting periods beginning after
December 15, 2018,
including interim periods within that reporting period, with earlier adoption permitted. ASU
2016
-
02
must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures, but expects that it will result in a significant increase in the assets and liabilities recorded on the consolidated balance sheet.
 
In
January 2017,
the FASB issued ASU
2017
-
01,
Business Combinations (Topic
805
): Clarifying the Definition of a Business
. ASU
2017
-
01
requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of identifiable assets, the set of assets would
not
represent a business. Also, in order to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to produce outputs. Under the update, fewer sets of assets are expected to be considered businesses. ASU
2017
-
01
is effective for annual reporting periods beginning after
December 15, 2017,
including interim periods within that reporting period. The adoption of this guidance is
not
expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows.
 
In
January 2017,
the FASB issued ASU
2017
-
04,
Intangibles – Goodwill and Other (Topic
350
): Simplifying the Test for Goodwill Impairment
. ASU
2017
-
04
eliminates the requirement to calculate the implied fair value of goodwill to measure the amount of impairment loss, if any, under the
second
step of the current goodwill impairment test. Under the update, the goodwill impairment loss would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value,
not
to exceed the carrying amount of goodwill. ASU
2017
-
04
is effective for annual reporting periods beginning after
December 15, 2019,
with early adoption permitted. The adoption of this guidance is
not
expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows.
XML 22 R10.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 4 - Fair Value Measurements
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
4
) Fair Value Measurements
 
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., “the exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The hierarchy for inputs used in measuring fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In certain cases, the inputs used to measure fair value
may
fall into different levels of the fair value hierarchy. In such cases, an asset or liability must be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value. The fair value hierarchy is broken down into
three
levels based on the reliability of inputs as follows:
 
• Level
1
– Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does
not
entail a significant degree of judgment.
 
• Level
2
– Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are
not
active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
 
• Level
3
– Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
 
As of
May 27, 2017,
the Company’s financial assets utilizing Level
1
inputs included long term trading investment securities traded on active securities exchanges. The Company did
not
have any financial assets utilizing Level
2
inputs. Financial assets utilizing Level
3
inputs included long term investments in auction rate securities consisting of preferred shares of closed end municipal bond funds (See “Investment Securities,” Note
6
). 
 
Fair Value of Financial Instruments
 
The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, long term debt and certain other liabilities. The Company’s investment securities include auction rate securities, which are stated at their approximate fair value. The book value of the financial instruments, excluding the Company’s long term debt, is representative of their fair values. The fair value of the Company’s long term debt is approximately
$1.407
billion as of
May 27, 2017,
which is based on quoted prices in active markets for identical instruments (i.e., Level
1
valuation), compared to the carrying value of approximately
$1.500
billion.
XML 23 R11.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 5 - Cash and Cash Equivalents
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Cash and Cash Equivalents Disclosure [Text Block]
5
) Cash and Cash Equivalents
 
Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle within
five
business days, of
$100.6
million and
$86.6
million as of
May 27, 2017
and
February 25, 2017,
respectively.
XML 24 R12.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 6 - Investment Securities
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
6
) Investment Securities
 
The Company’s investment securities as of
May 27, 2017
and
February 25, 2017
are as follows:
 
(in millions)   May 27,
2017
  February 25,
2017
Available-for-sale securities:                
Long term   $
19.5
    $
19.3
 
                 
Trading securities:                
Long term    
76.6
     
70.3
 
Total investment securities   $
96.1
    $
89.6
 
 
Auction Rate Securities
 
As of
May 27, 2017
and
February 25, 2017,
the Company’s long term available-for-sale investment securities represented approximately
$20.3
million par value of auction rate securities consisting of preferred shares of closed end municipal bond funds, less temporary valuation adjustments of approximately
$0.8
million and
$1.0
million, respectively. Since these valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive loss, net of a related tax benefit, and did
not
affect the Company’s net earnings.
 
Long Term Trading Investment Securities
 
The Company’s long term trading investment securities, which are provided as investment options to the participants of the nonqualified deferred compensation plan, are stated at fair market value. The values of these trading investment securities included in the table above are approximately
$76.6
million and
$70.3
million as of
May 27, 2017
and
February 25, 2017,
respectively.
XML 25 R13.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 7 - Property and Equipment
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Property, Plant and Equipment Disclosure [Text Block]
7
) Property and Equipment
 
As of
May 27, 2017
and
February 25, 2017,
included in property and equipment, net is accumulated depreciation of approximately
$2.9
billion and
$2.8
billion, respectively.
XML 26 R14.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 8 - Long Term Debt
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Long-term Debt [Text Block]
8
) Long Term Debt
 
Senior Unsecured Notes
 
On
July 17, 2014,
the Company issued
$300
million aggregate principal amount of
3.749%
senior unsecured notes due
August 1, 2024,
$300
million aggregate principal amount of
4.915%
senior unsecured notes due
August 1, 2034
and
$900
million aggregate principal amount of
5.165%
senior unsecured notes due
August 1, 2044 (
collectively, the “Notes”). Interest on the Notes is payable semi-annually on
February 1
and
August 1
of each year.
 
The Notes were issued under an indenture (the “Base Indenture”), as supplemented by a
first
supplemental indenture (together, with the Base Indenture, the “Indenture”), which contains various restrictive covenants, which are subject to important limitations and exceptions that are described in the Indenture. The Company was in compliance with all covenants related to the Notes as of
May 27, 2017.
 
Revolving Credit Agreement
 
The Company has a
$250
million
five
year senior unsecured revolving credit facility agreement (“Revolver”), expiring in
August 2019,
with various lenders. During the
three
months ended
May 27, 2017,
the Company did
not
have any borrowings under the Revolver.
 
The Revolver contains customary affirmative and negative covenants and also requires the Company to maintain a minimum leverage ratio. The Company was in compliance with all covenants related to the Revolver as of
May 27, 2017.
 
Deferred financing costs associated with the Notes and the Revolver of approximately
$10.1
million were capitalized. In the accompanying Consolidated Balance Sheets, the deferred financing costs are included in long term debt, net of amortization, for the Notes and are included in other assets, net of amortization, for the Revolver. These deferred financing costs for the Notes and the Revolver are being amortized over the term of each of the Notes and the term of the Revolver and such amortization is included in interest expense, net in the Consolidated Statements of Earnings. Interest expense related to the Notes and the Revolver, including the commitment fee and the amortization of deferred financing costs, was approximately
$18.2
million and
$18.7
million for the
three
months ended
May 27, 2017
and
May 28, 2016,
respectively.
 
Lines of Credit
 
At
May 27, 2017,
the Company maintained
two
uncommitted lines of credit of
$100
million each, with expiration dates of
August 30, 2017
and
February 25, 2018,
respectively. These uncommitted lines of credit are currently and are expected to be used for letters of credit in the ordinary course of business. During the
first
three
months of fiscal
2017,
the Company did
not
have any direct borrowings under the uncommitted lines of credit. Although
no
assurances can be provided, the Company intends to renew both uncommitted lines of credit before the respective expiration dates.
XML 27 R15.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 9 - Shareholders' Equity
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
9
) Shareholders’ Equity
 
The Company has authorization to make repurchases from time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules and regulations.
 
Between
December 
2004
and
September 2015,
the Company’s Board of Directors authorized, through several share repurchase programs, the repurchase of
$11.950
billion of its shares of common stock. The Company also acquires shares of its common stock to cover employee related taxes withheld on vested restricted stock and performance stock unit awards. In the
first
three
months of fiscal
2017,
the Company repurchased approximately
3.3
million shares of its common stock for a total cost of approximately
$127.3
million, bringing the aggregate total of common stock repurchased to approximately
196.5
million shares for a total cost of approximately
$10.3
billion since the initial authorization in
December 
2004.
The Company has approximately
$1.6
billion remaining of authorized share repurchases as of
May 27, 2017.
 
During fiscal
2016,
the Company’s Board of Directors authorized a quarterly dividend program. Quarterly dividends of
$0.125
per share in each quarter, totaling
$0.50
per share for fiscal
2016
were declared by the Company’s Board of Directors, of which
$0.375
per share was paid in fiscal
2016.
On
April 5, 2017,
the Company’s Board of Directors declared a quarterly dividend of
$0.15
per share to be paid on
July 18, 2017
to shareholders of record at the close of business on
June 16, 2017.
Subsequent to the end of the
first
quarter of fiscal
2017,
on
June 22, 2017,
the Company’s Board of Directors declared a quarterly dividend of
$0.15
per share to be paid on
October 17, 2017
to shareholders of record as of the close of business on
September 15, 2017.
The Company expects to pay quarterly cash dividends on its common stock in the future, subject to the determination by the Board of Directors, based on an evaluation of the Company’s earnings, financial condition and requirements, business conditions and other factors.
 
Cash dividends, if any, are accrued as a liability on the Company’s consolidated balance sheets and recorded as a decrease to additional paid-in capital when declared.
XML 28 R16.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 10 - Stock-based Compensation
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
10
) Stock-Based Compensation
 
The Company measures all employee stock-based compensation awards using a fair value method and records such expense, net of estimated forfeitures, in its consolidated financial statements. Currently, the Company’s stock-based compensation relates to restricted stock awards, stock options and performance stock units. The Company’s restricted stock awards are considered nonvested share awards.
 
Stock-based compensation expense for the
three
months ended
May 27, 2017
and
May 28, 2016
was approximately
$21.5
million (
$12.4
after tax or
$0.09
per diluted share) and
$20.7
million (
$12.9
million after tax or
$0.08
per diluted share), respectively. In addition, the amount of stock-based compensation cost capitalized for both the
three
months ended
May 27, 2017
and
May 28, 2016
was approximately
$0.5
million.
 
Incentive Compensation Plans
 
The Company currently grants awards under the Bed Bath & Beyond
2012
Incentive Compensation Plan (the
“2012
Plan”), which amended and restated the Bed Bath & Beyond
2004
Incentive Compensation Plan (the
“2004
Plan”). The
2012
Plan includes an aggregate of
43.2
million common shares authorized for issuance and the ability to grant incentive stock options. Outstanding awards that were covered by the
2004
Plan continue to be in effect under the
2012
Plan.
 
The
2012
Plan is a flexible compensation plan that enables the Company to offer incentive compensation through stock options (whether nonqualified stock options or incentive stock options), restricted stock awards, stock appreciation rights, performance awards and other stock based awards, including cash awards. Under the
2012
Plan, grants are determined by the Compensation Committee for those awards granted to executive officers and by an appropriate committee for all other awards granted. Awards of stock options and restricted stock generally vest in
five
equal annual installments beginning
one
to
three
years from the date of grant. Awards of performance stock units generally vest over a period of
four
years from the date of grant dependent on the Company’s achievement of performance-based tests and subject, in general, to the executive remaining in the Company’s service on specified vesting dates.
 
The Company generally issues new shares for stock option exercises, restricted stock awards and vesting of performance stock units.
 
Stock Options
 
Stock option grants are issued at fair market value on the date of grant and generally become exercisable in either
three
or
five
equal annual installments beginning
one
year from the date of grant for options issued since
May 10, 2010,
and beginning
one
to
three
years from the date of grant for options issued prior to
May 10, 2010,
in each case, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Option grants expire
eight
years after the date of grant. All option grants are nonqualified. As of
May 27, 2017,
unrecognized compensation expense related to the unvested portion of the Company’s stock options was
$25.0
million, which is expected to be recognized over a weighted average period of
3.7
years.
 
The fair value of the stock options granted was estimated on the date of the grant using a Black-Scholes option-pricing model that uses the assumptions noted in the following table.
 
    Three Months Ended
Black-Scholes Valuation Assumptions  (1)   May 27, 2017   May 28, 2016
         
Weighted Average Expected Life (in years)  (2)    
6.7
     
6.6
 
Weighted Average Expected Volatility  (3)    
26.49
%    
26.96
%
Weighted Average Risk Free Interest Rates  (4)    
2.17
%    
1.46
%
Expected Dividend Yield (5)    
1.60
%    
1.10
%
 
(
1
) Forfeitures are estimated based on historical experience.
(
2
) The expected life of stock options is estimated based on historical experience.
(
3
) Expected volatility is based on the average of historical and implied volatility. The historical volatility is determined by observing actual prices of the Company’s stock over a period commensurate with the expected life of the awards. The implied volatility represents the implied volatility of the Company’s call options, which are actively traded on multiple exchanges, had remaining maturities in excess of
twelve
months, had market prices close to the exercise prices of the employee stock options and were measured on the stock option grant date.
(
4
) Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of the stock options.
(
5
) Expected dividend yield is estimated based on anticipated dividend payouts.
 
Changes in the Company’s stock options for the
three
months ended
May 27, 2017
were as follows:
 
(Shares in thousands)   Number of Stock Options   Weighted Average
Exercise Price
Options outstanding, beginning of period    
3,906
    $
56.48
 
Granted    
694
     
37.50
 
Exercised    
(359
)    
28.33
 
Forfeited or expired    
-
     
-
 
Options outstanding, end of period    
4,241
    $
55.76
 
Options exercisable, end of period    
2,441
    $
60.38
 
 
The weighted average fair value for the stock options granted during the
first
three
months of fiscal
2017
and
2016
was
$9.50
and
$11.87,
respectively. The weighted average remaining contractual term for options outstanding as of
May 27, 2017
was
4.82
years and the aggregate intrinsic value was
$0.
The weighted average remaining contractual term for options exercisable as of
May 27, 2017
was
3.35
years and the aggregate intrinsic value was
$0.
The total intrinsic value for stock options exercised during the
first
three
months of fiscal
2017
and
2016
was
$3.9
and
$8.3
million, respectively.
 
Net cash proceeds from the exercise of stock options for the
first
three
months of fiscal
2017
were
$10.2
and the net associated income tax expense was
$0.2
million.
 
Restricted Stock
 
Restricted stock awards are issued and measured at fair market value on the date of grant and generally become vested in
five
equal annual installments beginning
one
to
three
years from the date of grant, subject, in general, to the recipient remaining in the Company’s service on specified vesting dates. Vesting of restricted stock is based solely on time vesting. As of
May 27, 2017,
unrecognized compensation expense related to the unvested portion of the Company’s restricted stock awards was
$160.8
million, which is expected to be recognized over a weighted average period of
4.9
years.
 
Changes in the Company’s restricted stock for the
three
months ended
May 27, 2017
were as follows:
 
(Shares in thousands)   Number of Restricted
Shares
  Weighted Average
Grant-Date Fair
Value
Unvested restricted stock, beginning of period    
3,492
    $
58.12
 
Granted    
1,118
     
37.59
 
Vested    
(527
)    
60.96
 
Forfeited    
(50
)    
53.16
 
Unvested restricted stock, end of period    
4,033
    $
52.12
 
 
Performance Stock Units
 
Performance stock units (“PSUs”) are issued and measured at fair market value on the date of grant. Vesting of PSUs awarded to certain of the Company’s executives is dependent on the Company’s achievement of a performance-based test during a
one
-year period from the date of grant and during a
three
-year period from the date of grant and, assuming achievement of the performance-based test, time vesting over periods of up to
four
years, subject, in general, to the executive remaining in the Company’s service on specified vesting dates. Performance during the
one
-year period will be based on Earnings Before Interest and Taxes (“EBIT”) margin relative to a peer group of the Company and performance during the
three
-year period will be based on Return on Invested Capital (“ROIC”) or a combination of EBIT margin and ROIC relative to such peer group. The awards based on EBIT margin and ROIC range from a floor of
zero
to a cap of
150%
of target achievement. PSUs are converted into shares of common stock upon payment following vesting. Upon grant of the PSUs, the Company recognizes compensation expense related to these awards based on the assumption that
100%
of the target award will be achieved. The Company evaluates the target assumption on a quarterly basis and adjusts compensation expense related to these awards, as appropriate. As of
May 27, 2017,
unrecognized compensation expense related to the unvested portion of the Company’s performance stock units was
$41.2
million, which is expected to be recognized over a weighted average period of
2.2
years.
 
Changes in the Company’s PSUs for the
three
months ended
May 27, 2017
were as follows:
 
(Shares in thousands)   Number of Performance
Stock Units
  Weighted Average
Grant-Date Fair
Value
Unvested performance stock units, beginning of period    
1,014
    $
55.19
 
Granted    
660
     
37.50
 
Vested    
(322
)    
57.28
 
Forfeited    
-
     
-
 
Unvested performance stock units, end of period    
1,352
    $
46.06
 
XML 29 R17.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 11 - Earnings Per Share
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Earnings Per Share [Text Block]
11
) Earnings per Share
 
The Company presents earnings per share on a basic and diluted basis. Basic earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method.
 
Stock-based awards for the
three
months ended
May 27, 2017
and
May 28, 2016
of approximately
7.2
million and
4.7
million, respectively were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive.
XML 30 R18.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 12 - Supplemental Cash Flow Information
3 Months Ended
May 27, 2017
Notes to Financial Statements  
Cash Flow, Supplemental Disclosures [Text Block]
12
) Supplemental Cash Flow Information
 
The Company paid income taxes of
$8.7
million and
$75.2
million in the
first
three
months of fiscal
2017
and
2016,
respectively. In addition, the Company had interest payments of approximately
$2.2
million in the
first
three
months of fiscal
2017
and
2016.
 
The Company recorded an accrual for capital expenditures of
$34.1
million and
$29.1
million as of
May 27, 2017
and
May 28, 2016,
respectively. In addition, the Company recorded an accrual for dividends payable of
$23.6
million and
$19.4
million as of
May 27, 2017
and
May 26, 2016,
respectively.
XML 31 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 2 - Acquisitions (Tables)
3 Months Ended
May 27, 2017
Notes Tables  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]
(in millions)   As of November 23, 2016
     
Current assets   $
15.1
 
Property and equipment and other non-current assets    
9.3
 
Goodwill    
185.5
 
Intangible assets    
10.4
 
Total assets acquired    
220.3
 
         
Accounts payable and other liabilities    
(30.9
)
         
Total net assets acquired   $
189.4
 
XML 32 R20.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 6 - Investment Securities (Tables)
3 Months Ended
May 27, 2017
Notes Tables  
Marketable Securities [Table Text Block]
(in millions)   May 27,
2017
  February 25,
2017
Available-for-sale securities:                
Long term   $
19.5
    $
19.3
 
                 
Trading securities:                
Long term    
76.6
     
70.3
 
Total investment securities   $
96.1
    $
89.6
 
XML 33 R21.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 10 - Stock-based Compensation (Tables)
3 Months Ended
May 27, 2017
Notes Tables  
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
    Three Months Ended
Black-Scholes Valuation Assumptions  (1)   May 27, 2017   May 28, 2016
         
Weighted Average Expected Life (in years)  (2)    
6.7
     
6.6
 
Weighted Average Expected Volatility  (3)    
26.49
%    
26.96
%
Weighted Average Risk Free Interest Rates  (4)    
2.17
%    
1.46
%
Expected Dividend Yield (5)    
1.60
%    
1.10
%
Share-based Compensation, Stock Options, Activity [Table Text Block]
(Shares in thousands)   Number of Stock Options   Weighted Average
Exercise Price
Options outstanding, beginning of period    
3,906
    $
56.48
 
Granted    
694
     
37.50
 
Exercised    
(359
)    
28.33
 
Forfeited or expired    
-
     
-
 
Options outstanding, end of period    
4,241
    $
55.76
 
Options exercisable, end of period    
2,441
    $
60.38
 
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]
(Shares in thousands)   Number of Restricted
Shares
  Weighted Average
Grant-Date Fair
Value
Unvested restricted stock, beginning of period    
3,492
    $
58.12
 
Granted    
1,118
     
37.59
 
Vested    
(527
)    
60.96
 
Forfeited    
(50
)    
53.16
 
Unvested restricted stock, end of period    
4,033
    $
52.12
 
Share-based Compensation, Performance Shares Award Nonvested Activity [Table Text Block]
(Shares in thousands)   Number of Performance
Stock Units
  Weighted Average
Grant-Date Fair
Value
Unvested performance stock units, beginning of period    
1,014
    $
55.19
 
Granted    
660
     
37.50
 
Vested    
(322
)    
57.28
 
Forfeited    
-
     
-
 
Unvested performance stock units, end of period    
1,352
    $
46.06
 
XML 34 R22.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 1 - Basis of Presentation (Details Textual)
3 Months Ended
May 27, 2017
May 28, 2016
Number of Operating Segments 2  
Product Concentration Risk [Member] | Sales Revenue, Net [Member] | Domestic Merchandise [Member]    
Concentration Risk, Percentage 36.20% 36.60%
Product Concentration Risk [Member] | Sales Revenue, Net [Member] | Home Furnishings [Member]    
Concentration Risk, Percentage 63.80% 63.40%
XML 35 R23.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 2 - Acquisitions (Details Textual) - PersonalizationMall.Com [Member]
$ in Millions
Nov. 23, 2016
USD ($)
Business Combination, Consideration Transferred $ 189.4
Trade Names [Member]  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets $ 10.0
XML 36 R24.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 2 - Acquisitions - Summary of Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Thousands
May 27, 2017
Feb. 25, 2017
Nov. 23, 2016
Goodwill $ 707,643 $ 697,085  
PersonalizationMall.Com [Member]      
Current assets     $ 15,100
Property and equipment and other non-current assets     9,300
Goodwill     185,500
Intangible assets     10,400
Total assets acquired     220,300
Accounts payable and other liabilities     (30,900)
Total net assets acquired     $ 189,400
XML 37 R25.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 3 - Recent Accounting Pronouncements (Details Textual) - USD ($)
$ in Thousands
3 Months Ended
May 27, 2017
May 28, 2016
Income Tax Expense (Benefit) $ 55,148 $ 74,092
Reclassification of Deferred Tax Assets From Other Current Assets to Other Assets [Member] | February 25, 2017 [Member]    
Prior Period Reclassification Adjustment 218,800  
Reclassification of Deferred Tax Liabilities From Deferred Rent and Other Liabilities to Other Assets [Member] | February 25, 2017 [Member]    
Prior Period Reclassification Adjustment 23,400  
Reclassification of Deferred Tax Assets and Liabilities From Other Current and Deferred Rent and Other Liabilities to Other Assets [Member] | February 25, 2017 [Member]    
Prior Period Reclassification Adjustment 195,500  
Accounting Standards Update 2016-09 [Member]    
Income Tax Expense (Benefit) 7,600  
Reclassification of Excess Tax Benefits from Financing to Operating Activities [Member] | Three Months Ended May 28, 2016 [Member]    
Prior Period Reclassification Adjustment $ 1,300  
XML 38 R26.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 4 - Fair Value Measurements (Details Textual)
$ in Millions
May 27, 2017
USD ($)
Long-term Debt, Fair Value $ 1,407
Long-term Debt $ 1,500
XML 39 R27.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 5 - Cash and Cash Equivalents (Details Textual) - USD ($)
$ in Millions
3 Months Ended
May 27, 2017
Feb. 25, 2017
Number of Business Days for Settlement of Credit and Debit Card Receivable 5 days  
Credit and Debit Card Receivables, at Carrying Value $ 100.6 $ 86.6
XML 40 R28.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 6 - Investment Securities (Details Textual) - USD ($)
$ in Millions
May 27, 2017
Feb. 25, 2017
Auction Rate Securities [Member]    
Available-for-sale Securities Temporary Impairment Adjustment Accumulated Other Comprehensive Income (Loss) $ 0.8 $ (1.0)
Available-for-sale Securities, Long-term Investments, Amortized Cost 20.3 20.3
Other Trading Investment Securities [Member]    
Deferred Compensation Plan Assets $ 76.6 $ 70.3
XML 41 R29.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 6 - Investment Securities - Summary of Investment Securities (Details) - USD ($)
$ in Millions
May 27, 2017
Feb. 25, 2017
Available-for-sale securities:    
Long term $ 19.5 $ 19.3
Trading securities:    
Long term 76.6 70.3
Total investment securities $ 96.1 $ 89.6
XML 42 R30.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 7 - Property and Equipment (Details Textual) - USD ($)
$ in Billions
May 27, 2017
Feb. 25, 2017
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment $ 2.9 $ 2.8
XML 43 R31.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 8 - Long Term Debt (Details Textual)
$ in Thousands
3 Months Ended
Aug. 06, 2014
USD ($)
May 27, 2017
USD ($)
May 28, 2016
USD ($)
Jul. 17, 2014
USD ($)
Line of Credit Facility, Number of Uncommitted Lines of Credit Maintained   2    
Uncommitted Line of Credit Expiring August 30, 2017 [Member]        
Line of Credit Facility, Maximum Borrowing Capacity   $ 100,000    
Uncommitted Lines of Credit [Member]        
Proceeds from Lines of Credit   0    
Uncommitted Line of Credit Expiring February 25, 2018 [Member]        
Line of Credit Facility, Maximum Borrowing Capacity   100,000    
Revolver [Member] | Revolving Credit Facility [Member]        
Line of Credit Facility, Maximum Borrowing Capacity $ 250,000      
Debt Instrument, Term 5 years      
Proceeds from Lines of Credit   0    
Senior Unsecured Notes and Revolver [Member]        
Interest Expense   $ 18,200 $ 18,700  
Senior Unsecured Notes and Revolver [Member] | Other Assets [Member]        
Debt Issuance Costs, Gross $ 10,100      
Senior Unsecured Notes [Member] | The 2024 Notes [Member]        
Debt Instrument, Face Amount       $ 300,000
Debt Instrument, Interest Rate, Stated Percentage       3.749%
Senior Unsecured Notes [Member] | The 2034 Notes [Member]        
Debt Instrument, Face Amount       $ 300,000
Debt Instrument, Interest Rate, Stated Percentage       4.915%
Senior Unsecured Notes [Member] | The 2044 Notes [Member]        
Debt Instrument, Face Amount       $ 900,000
Debt Instrument, Interest Rate, Stated Percentage       5.165%
XML 44 R32.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 9 - Shareholders' Equity (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands, shares in Millions
3 Months Ended 12 Months Ended 149 Months Ended
Jun. 22, 2017
Apr. 05, 2017
May 27, 2017
Feb. 25, 2017
Nov. 26, 2016
Aug. 27, 2016
May 28, 2016
Feb. 25, 2017
May 27, 2017
Sep. 30, 2015
Common Stock, Dividends, Per Share, Cash Paid               $ 0.375    
Stock Repurchase Program, Authorized Amount                   $ 11,950,000
Treasury Stock, Shares, Acquired     3.3           196.5  
Payments for Repurchase of Common Stock     $ 127,324       $ 178,124   $ 10,300,000  
Stock Repurchase Program, Remaining Authorized Repurchase Amount     $ 1,600,000           $ 1,600,000  
Common Stock, Dividends, Per Share, Declared   $ 0.15 $ 0.15 $ 0.125 $ 0.125 $ 0.125 $ 0.125 $ 0.50    
Subsequent Event [Member]                    
Common Stock, Dividends, Per Share, Declared $ 0.15                  
XML 45 R33.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 10 - Stock-based Compensation (Details Textual) - USD ($)
$ / shares in Units, shares in Millions
3 Months Ended
May 27, 2017
May 28, 2016
Allocated Share-based Compensation Expense $ 21,500,000 $ 20,700,000
Allocated Share-based Compensation Expense, Net of Tax $ 12,400,000 $ 12,900,000
Stock Based Compensation Expense, Impact On Diluted Earnings Per Share $ 0.09 $ 0.08
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount $ 500,000 $ 500,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term 4 years 299 days  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value $ 0  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term 3 years 127 days  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value $ 0  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value 3,900,000 8,300,000
Proceeds from Stock Options Exercised 10,161,000 $ 19,246,000
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options 200,000  
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options $ 25,000,000  
Performance Shares [Member]    
Share Based Compensation Arrangement By Share Based Payment Award Target Award Percentage 150.00%  
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options $ 41,200,000  
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition 2 years 73 days  
Employee Stock Option [Member]    
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition 3 years 255 days  
Restricted Stock [Member]    
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options $ 160,800,000  
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition 4 years 328 days  
The 2012 Plan [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized 43.2  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value $ 9.50 $ 11.87
The 2012 Plan [Member] | Employee Stock Options and Restricted Stock [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 5 years  
Share Based Compensation Arrangement By Share Based Payment Award Award Requisite Service Period Minimum 1 year  
Share Based Compensation Arrangement By Share Based Payment Award Award Requisite Service Period Maximum 3 years  
The 2012 Plan [Member] | Performance Shares [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 4 years  
The 2012 Plan [Member] | Performance Shares [Member] | Scenario Assumption [Member]    
Share Based Compensation Arrangement By Share Based Payment Award Target Award Percentage 100.00%  
The 2012 Plan [Member] | Performance Shares [Member] | One-year Performance Period Awards [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 4 years  
Share Based Compensation Arrangement By Share Based Payment Award Award Requisite Service Period Minimum 1 year  
Share Based Compensation Arrangement By Share Based Payment Award Award Requisite Service Period Maximum 3 years  
The 2012 Plan [Member] | Performance Shares [Member] | Minimum [Member]    
Share Based Compensation Arrangement By Share Based Payment Award Target Award Percentage 0.00%  
The 2012 Plan [Member] | Employee Stock Option [Member] | Minimum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 3 years  
The 2012 Plan [Member] | Employee Stock Option [Member] | Maximum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 5 years  
The 2012 Plan [Member] | Employee Stock Option Issued Since May 10, 2010 [Member]    
Share Based Compensation Arrangement By Share Based Payment Award Requisite Service Period 1 year  
Share Based Compensation Arrangement By Share Based Payment Award Award Requisite Service Period Minimum 1 year  
Share Based Compensation Arrangement By Share Based Payment Award Award Requisite Service Period Maximum 3 years  
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period 8 years  
The 2012 Plan [Member] | Restricted Stock [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 5 years  
Share Based Compensation Arrangement By Share Based Payment Award Award Requisite Service Period Minimum 1 year  
Share Based Compensation Arrangement By Share Based Payment Award Award Requisite Service Period Maximum 3 years  
XML 46 R34.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 10 - Stock-based Compensation - Assumptions Used to Estimate the Black-scholes Fair Value of Stock Options Granted (Details) - Employee Stock Option [Member]
3 Months Ended
May 27, 2017
May 28, 2016
Weighted Average Expected Life (in years) (Year) [1],[2] 6 years 255 days 6 years 219 days
Weighted Average Expected Volatility [1],[3] 26.49% 26.96%
Weighted Average Risk Free Interest Rates [1],[4] 2.17% 1.46%
Expected Dividend Yield [1],[5] 1.60% 1.10%
[1] Forfeitures are estimated based on historical experience.
[2] The expected life of stock options is estimated based on historical experience.
[3] Expected volatility is based on the average of historical and implied volatility. The historical volatility is determined by observing actual prices of the Company's stock over a period commensurate with the expected life of the awards. The implied volatility represents the implied volatility of the Company's call options, which are actively traded on multiple exchanges, had remaining maturities in excess of twelve months, had market prices close to the exercise prices of the employee stock options and were measured on the stock option grant date.
[4] Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of the stock options.
[5] Expected dividend yield is estimated based on anticipated dividend payouts.
XML 47 R35.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 10 - Stock-based Compensation - Changes in the Company's Stock Options (Details)
shares in Thousands
3 Months Ended
May 27, 2017
$ / shares
shares
Options outstanding, beginning of period (in shares) | shares 3,906
Options outstanding, weighted average exercise price, beginning of period (in dollars per share) | $ / shares $ 56.48
Options granted (in shares) | shares 694
Options granted, weighted average exercise price (in dollars per share) | $ / shares $ 37.50
Options exercised (in shares) | shares (359)
Options exercised, weighted average exercise price (in dollars per share) | $ / shares $ 28.33
Options forfeited or expired (in shares) | shares
Options outstanding, weighted average exercise price, end of period (in dollars per share) | $ / shares $ 55.76
Options exercisable, end of period (in shares) | shares 2,441
Options forfeited or expired, weighted average exercise price (in dollars per share) | $ / shares
Options outstanding, end of period (in shares) | shares 4,241
Options exercisable, weighted average exercise price, end of period (in dollars per share) | $ / shares $ 60.38
XML 48 R36.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 10 - Stock-based Compensation - Changes in the Company's Restricted Stock (Details) - Restricted Stock [Member]
shares in Thousands
3 Months Ended
May 27, 2017
$ / shares
shares
Unvested shares, beginning of period (in shares) | shares 3,492
Unvested shares, weighted average grant date fair value, beginning of period (in dollars per share) | $ / shares $ 58.12
Unvested shares, granted (in shares) | shares 1,118
Unvested shares, weighted average grant date fair value, granted (in dollars per share) | $ / shares $ 37.59
Unvested shares, vested (in shares) | shares (527)
Unvested shares, weighted average grant date fair value, vested (in dollars per share) | $ / shares $ 60.96
Unvested shares, forfeited (in shares) | shares (50)
Unvested shares, weighted average grant date fair value, forfeited (in dollars per share) | $ / shares $ 53.16
Unvested shares, end of period (in shares) | shares 4,033
Unvested shares, weighted average grant date fair value, end of period (in dollars per share) | $ / shares $ 52.12
XML 49 R37.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 10 - Stock-based Compensation - Changes in the Company's Performance Stock Units (Details) - Performance Shares [Member]
shares in Thousands
3 Months Ended
May 27, 2017
$ / shares
shares
Unvested shares, beginning of period (in shares) | shares 1,014
Unvested shares, weighted average grant date fair value, beginning of period (in dollars per share) | $ / shares $ 55.19
Unvested shares, granted (in shares) | shares 660
Unvested shares, weighted average grant date fair value, granted (in dollars per share) | $ / shares $ 37.50
Unvested shares, vested (in shares) | shares (322)
Unvested shares, weighted average grant date fair value, vested (in dollars per share) | $ / shares $ 57.28
Unvested shares, forfeited (in shares) | shares
Unvested shares, weighted average grant date fair value, forfeited (in dollars per share) | $ / shares
Unvested shares, end of period (in shares) | shares 1,352
Unvested shares, weighted average grant date fair value, end of period (in dollars per share) | $ / shares $ 46.06
XML 50 R38.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 11 - Earnings Per Share (Details Textual) - shares
shares in Millions
3 Months Ended
May 27, 2017
May 28, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 7.2 4.7
XML 51 R39.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 12 - Supplemental Cash Flow Information (Details Textual) - USD ($)
$ in Millions
3 Months Ended
May 27, 2017
May 28, 2016
May 26, 2016
Income Taxes Paid $ 8.7 $ 75.2  
Capital Expenditures Incurred but Not yet Paid 34.1 29.1  
Dividends Payable 23.6   $ 19.4
Interest Paid $ 2.2 $ 2.2  
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