Barnes and Noble 2010 Annual Report Download - page 55

15. CHANGES IN INTANGIBLE ASSETS AND GOODWILL
As of May 1, 2010
Amortizable
intangible assets
Useful
Life
Gross
Carrying
Amount
Accumulated
Amortization Total
Customer
relationships 5-25 $ 257,410 $ (7,151) $ 250,259
Author contracts 10 18,461 (13,358) 5,103
Technology 5-10 5,850 (842) 5,008
Distribution
contracts 10 8,325 (3,677) 4,648
Other 3-10 4,519 (3,477) 1,042
$ 294,565 (28,505) $ 266,060
Unamortizable
intangible assets
Trade name $ 293,400
Copyrights 166
Publishing
contracts 21,336
$ 314,902
All amortizable intangible assets are being amortized over
their useful life on a straight-line basis, except for the cus-
tomer relationships related to the Fictionwise acquisition
that are being amortized on an accelerated basis.
Aggregate Amortization Expense:
For the 52 weeks ended May 1, 2010 $ 11,350
For the 13 weeks ended May 2, 2009 $ 752
For the 52 weeks ended January 31, 2009 $ 4,563
For the 52 weeks ended February 2, 2008 $ 3,202
Estimated Amortization Expense:
(12 months ending on or about April 30)
2011 $ 14,488
2012 $ 14,106
2013 $ 13,776
2014 $ 13,062
2015 $ 11,286
The changes in the carrying amount of goodwill by segment
for fiscal 2010 are as follows:
B&N Retail
Segment
B&N College
Segment
Total
Company
Balance as of January 31, 2009 $ 240,008 — $ 240,008
Fictionwise acquisition
(See Note 6) 15,941 — 15,941
Benefit of excess tax
amortizationa (1,107) — (1,107)
Balance as of May 2, 2009 $ 254,842 — $ 254,842
B&N College acquisition
(See Note 4) — 274,070 274,070
Tikatok acquisition
(See Note 5) 1,947 — 1,947
Fictionwise purchase
accounting adjustments
(See Note 6) 2,110 — 2,110
Benefit of excess tax
amortizationa(4,428) — (4,428)
Balance as of May 1, 2010 $ 254,471 274,070 $ 528,541
a The tax basis of goodwill arising from an acquisition during the 52
weeks ended January 29, 2005 exceeded the related basis for financial
reporting purposes by approximately $96,576. In accordance with ASC
740-10-30, Accounting for Income Taxes, the Company is recognizing
the tax benefits of amortizing such excess as a reduction of goodwill as
it is realized on the Company’s income tax return.
16. NONCONTROLLING INTEREST
Sterling Publishing has entered into a joint venture in
Begin Smart LLC, acquiring a 50% interest to develop, sell,
and distribute books for infants, toddlers, and children
under the brand name BEGIN SMART™. In fiscal 2008,
the Company determined that Begin Smart LLC should
be consolidated under the provisions of ASC 810-10,
Consolidation of Variable Interest and Special Purpose Entities
and, accordingly, the results of operations for the period
subsequent to the acquisition are included in the consoli-
dated financial statements. The operating results of Begin
Smart LLC are immaterial to the Company.
In accordance with ASC 810-10-45, Noncontrolling Interest
in Consolidated Financial Statements, an amendment of ARB
No. , the Company identifies the 50% outside interest in
Begin Smart LLC as noncontrolling interests and classi-
fies it as a component of equity within the consolidated
balance sheets. The Company has retroactively applied the
provisions in ASC 810-10-45 to the financial information
presented for fiscal 2008 and 2007. As of May 1, 2010, May
2, 2009 and January 31, 2009, noncontrolling interests of
$1,550, $1,582 and $1,612, respectively, have been classi-
fied as a component of equity in the consolidated balance
2010 Annual Report 53