Barnes and Noble 2010 Annual Report Download - page 25

Contractual Obligations
The following table sets forth the Company’s contractual obligations as of May 1, 2010 (in millions):
Contractual Obligations Payments Due by Period
Total
Less Than
1 Year 1-3 Years 3-5 Years
More Than 5
Years
Long-term debt $ 260.4 $ — $ — $ 260.4 $ —
Capital lease
obligations 6.0 1.7 3.0 1.3 —
Operating lease obligationsa2,299.4 439.9 711.4 506.8 641.3
Purchase obligations 38.9 25.4 12.8 0.7 —
Interest obligationsb105.7 35.5 45.5 24.7 —
Short-term note payable 100.0 100.0———
Other long-term liabilities reflected on the
Company’s balance sheet under GAAPc 150.0 — — 150.0 —
Total $ 2,960.4 $ 602.5 $ 772.7 $ 943.9 $ 641.3
a Excludes obligations under store leases for insurance, taxes and other maintenance costs, which obligations totaled approximately 15% of the mini-
mum rent payments under those leases.
b Represents commitment fees related to the Company’s Credit Facility, as well as interest obligations on the Seller Notes issued in connection with the
Acquisition.
c Excludes $15.3 million of unrecognized tax benefits for which the Company cannot make a reasonably reliable estimate of the amount and period of
payment. See Note 13 to the Notes to Consolidated Financial Statements.
See also Note 12 to the Notes to Consolidated Financial Statements for information concerning the Company’s Pension and
Postretirement Plans.
Off-Balance Sheet Arrangements
As of May 1, 2010, the Company had no off-balance sheet
arrangements as defined in Item 303 of Regulation S-K.
Impact of Inflation
The Company does not believe that inflation has had a
material effect on its net sales or results of operations.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
See Note 22 to the Notes to Consolidated Financial
Statements.
CRITICAL ACCOUNTING POLICIES
The “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” section of this
report discusses the Company’s consolidated financial
statements, which have been prepared in accordance with
accounting principles generally accepted in the United
States. The preparation of these financial statements
requires management to make estimates and assumptions
in certain circumstances that affect amounts reported in
the accompanying consolidated financial statements and
related footnotes. In preparing these financial statements,
management has made its best estimates and judgments
with respect to certain amounts included in the financial
statements, giving due consideration to materiality. The
Company does not believe there is a great likelihood that
materially different amounts would be reported related to
the accounting policies described below. However, applica-
tion of these accounting policies involves the exercise of
judgment and use of assumptions as to future uncertain-
ties and, as a result, actual results could differ from these
estimates.
Merchandise Inventories
Merchandise inventories are stated at the lower of cost or
market. Cost is determined primarily by the retail inven-
tory method under both the first-in, first-out (FIFO) basis
and the last-in, first-out (LIFO) basis. The Company uses
the retail inventory method for 98% of the Company’s
merchandise inventories. As of May 1, 2010, May 2, 2009
and January 31, 2009, 87%, 100% and 100%, respectively,
of the Company’s inventory on the retail inventory method
was valued under the FIFO basis. B&N College’s textbook
and trade book inventories are valued using the LIFO
method, where the related reserve was not material to the
recorded amount of the Company’s inventories or results of
operations.
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