Barnes and Noble 2010 Annual Report Download - page 45

The following audited condensed financial informa-
tion of B&N College since the date of the Acquisition
on September 30, 2009 was included in the Company’s
consolidated results of operations for the 52 weeks ended
May 1, 2010:
52 weeks ended May 1, 2010
Sales $ 836,458
Net loss $ 3,344
The following unaudited pro forma condensed financial
information assumes that the Acquisition was accounted
for using the acquisition method of accounting for business
combinations in accordance with ASC 805 and represents
a pro forma presentation based upon available information
of the combining companies giving effect to the Acquisition
as if it had occurred on May 4, 2008, the first date of B&N
College’s prior fiscal year, with adjustments for amortiza-
tion expense of intangible assets, depreciation expense
for the fair value of property and equipment above its
book value, termination or changes in certain compensa-
tion arrangements, termination of textbook royalties,
non-operating expenses not acquired in the Acquisition,
interest expense and income tax expense:
52 weeks
ended
May 1, 2010
13 weeks
ended
May 2, 2009
52 weeks
ended
January 31,
2009
Sales $ 6,786,661 $1,302,769 $ 6,907,179
Net income (loss)
from continuing
operations attributable to
Barnes & Noble, Inc. $ 53,514 $ (27,730) $ 96,554
Income (loss) from continuing
operations attributable to
Barnes & Noble, Inc. per
common share
Basic $ 0.93 $ (0.52) $ 1.52
Diluted $ 0.92 $ (0.52) $ 1.48
The unaudited pro forma condensed financial informa-
tion is based on the assumptions and adjustments which
give effect to events that are: (i) directly attributable to
the Acquisition; (ii) expected to have a continuing impact;
and (iii) factually supportable. The unaudited pro forma
condensed financial information is presented for infor-
mational purposes only and is not necessarily indicative of
the operating results that would have been achieved had the
Acquisition been consummated as of the dates indicated or
of the results that may be obtained in the future.
In accordance with ASC 280, Disclosures about Segments of
an Enterprise and Related Information, the Company per-
formed an evaluation on the effect of the Acquisition on the
identification of operating segments, considering the way
the business is managed (focusing on the financial infor-
mation distributed) and the manner in which the 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. See Note 20 for more detail
on segment information.
5. TIKATOK ACQUISITION
On September 24, 2009, the Company acquired the assets
of Tikatok Inc. (Tikatok) for $2,305 in cash. Tikatok is
an online platform where parents and their children
and others can write, illustrate, and publish stories into
hardcover and paperback books. On its website, Tikatok
makes available, among other things, its patent-pending
StorySparks™ system, which helps to walk children
through the process of creating and writing stories and
expands the Company’s reach to additional parents, educa-
tors and librarians. In addition to the closing purchase
price, the Company has made and may make bonus and/or
earn out payments if certain performance targets are met
over the next four years.
The Tikatok acquisition was accounted for as a business
purchase pursuant to ASC 805. In accordance with ASC
805-20, the purchase price has been allocated to assets
based on their estimated fair value at the acquisition
date. The following table represents the allocation of the
purchase price to the acquired net assets and resulting
adjustment to goodwill:
Cash Paid $ 2,305
Allocation of purchase price
Current assets $ 46
Trade name 70
Technology 240
Non-current assets 2
Goodwill 1,947
Total assets acquired $ 2,305
Liabilities assumed —
$ 2,305
2010 Annual Report 43