Barnes and Noble 2010 Annual Report Download - page 36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands of dollars, except per share data)
For the 52 weeks ended May 1, 2010 (fiscal 2010), the 13
weeks ended May 2, 2009 (transition period), the 52 weeks
ended January 31, 2009 (fiscal 2008) and the 52 weeks
ended February 2, 2008 (fiscal 2007).
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Business
Barnes & Noble, Inc. (Barnes & Noble or the Company), the
nation’s largest bookseller2, is a leading content, commerce
and technology company that provides customers easy
and convenient access to books, magazines, newspapers
and other content across its multi-channel distribution
platform. As of May 1, 2010, the Company operated 1,357
bookstores in 50 states, including 637 bookstores on
college campuses and one of the Web’s largest eCommerce
sites, which includes the development of digital content,
products and software. Given the dynamic nature of the
book industry, the challenges faced by traditional book-
sellers, and the robust innovation pipeline fueling new
opportunities in hardware, software and content creation
and delivery, Barnes & Noble is utilizing the strength of
its retail footprint to bolster its leadership and fuel sales
growth across multiple channels.
Of the 1,357 bookstores, 720 operate primarily under the
Barnes & Noble Booksellers trade name (eight of which
were opened during the 52 weeks ended May 1, 2010 (fiscal
2010)). Barnes & Noble College Booksellers, LLC (B&N
College), a wholly-owned subsidiary of Barnes & Noble,
operates 637 college bookstores serving students and
faculty members at colleges and universities across the
United States. barnesandnoble.com llc (Barnes & Noble.
com) encompasses one of the Web’s largest eCommerce
sites, Barnes & Noble eBookstore, Barnes & Noble eReader
software, and the Company’s devices and other hardware
support. Through Sterling Publishing Co., Inc. (Sterling
or Sterling Publishing), the Company is a leading general
trade book publisher.
The Company’s principal business is the sale of trade
books (generally hardcover and paperback consumer titles,
excluding educational textbooks and specialized religious
titles), mass market paperbacks (such as mystery, romance,
science fiction and other popular fiction), children’s books,
eBooks and other digital content, eReaders and related
accessories, bargain books, magazines, gifts, café prod-
ucts and services, music and movies direct to customers
through its bookstores or on Barnes & Noble.com.
As a result of the acquisition of B&N College (the
Acquisition), the Company sells textbooks and course-
related materials, emblematic apparel and gifts, trade
books, school and dorm supplies, and convenience and café
items on college and university campuses. B&N College’s
sales account for approximately 14% of the Company’s
fiscal 2010 sales. B&N College sales are from the September
30, 2009 Acquisition date. On a full year basis the Company
expects B&N College to represent approximately 25% of
total Company sales.
Consolidation
The consolidated financial statements include the accounts
of Barnes & Noble, Inc. and its wholly and majority-owned
subsidiaries. Investments in affiliates in which ownership
interests range from 20% to 50%, are accounted for under
the equity method. All significant intercompany accounts
and transactions have been eliminated in consolida-
tion. The Company consolidates a variable interest entity
in which the Company absorbs a majority of the entity’s
expected losses, receives a majority of the entity’s expected
residual returns, or both, as a result of ownership.
The Company performed an evaluation on the effect of the
Acquisition on the identification of its operating segments,
considering the way the business is managed (focusing
on the financial information distributed) and the man-
ner in which its chief operating decision maker interacts
with other members of management. As a result of this
assessment, the Company has determined that it now has
two operating segments: B&N Retail and B&N College. The
Company will continue to evaluate the effect of its recent
change in management structure on the identification of
operating segments and reporting units in future filings.
Use of Estimates
In preparing financial statements in conformity with
generally accepted accounting principles, the Company is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclo-
sure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
 Based upon sales reported in trade publications and public filings.
34 Barnes & Noble, Inc.