Barnes and Noble 2010 Annual Report Download - page 64

equipment, and insurance claim history. GameStop reim-
bursed the Company for these services $128, $62, $162 and
$289 during fiscal 2010, the transition period, fiscal 2008
and 2007, respectively. Although GameStop secured its own
insurance coverage, costs are continuing to be incurred by
the Company on insurance claims which were made under
its programs prior to June 2005 and any such costs appli-
cable to insurance claims against GameStop will be charged
to GameStop at the time incurred.
The Company is provided with national freight distribu-
tion, including trucking services by Argix Direct Inc.
(Argix), a company in which a brother of Leonard and
Stephen Riggio owns a 20% interest, pursuant to a trans-
portation agreement expiring in 2012. The Company
paid Argix $16,536, $3,820, $16,981 and $18,953 for such
services during fiscal 2010, the transition period, fiscal
2008 and 2007, respectively. At the time of the agree-
ment, the cost of freight delivered to the stores by Argix
was comparable to the prices charged by publishers and
the Company’s other third party freight distributors.
However, due to higher contracted fuel surcharge and
transportation costs, Argix’s rates are now higher than
the Company’s other third party freight distributors. As a
result, the Company amended its existing agreement with
Argix effective January 1, 2009. The amendment provides
the Company with a $3,000 annual credit to its freight and
transportation costs for the remaining life of the existing
agreement. Argix provides B&N College with transporta-
tion services under a separate agreement expiring in 2011.
The Company believes that the transportation costs that
B&N College paid to Argix are comparable to the trans-
portation costs charged by third party distributors. B&N
College paid Argix $658 for such services during fiscal 2010
from the date of Acquisition. Argix also leases office and
warehouse space from the Company in Jamesburg, New
Jersey, pursuant to a lease expiring in 2011. The Company
charged Argix $2,646, $736, $2,835 and $2,642, for such
leased space and other operating costs incurred on its
behalf during fiscal 2010, the transition period, fiscal 2008
and 2007, respectively.
The Company uses Source Interlink Companies, Inc.
(Source Interlink) as its primary supplier of music and
DVD/video, as well as magazines and newspapers. Leonard
Riggio is an investor in an investment company that
formerly owned a minority interest in Source Interlink.
In addition, Ronald W. Burkle, who owns a minority
interest in the Company, also owned a minority interest
in Source Interlink through his ownership interests in
AEC Associates, LLC. Pursuant to the confirmation order
of the United States Banckruptcy Court of the District of
Delaware, as of June 19, 2009 (the Discharge Date) the
equity interests held by then owners of Source Interlink
were discharged, cancelled, released and extinguished.
The Company paid Source Interlink $33,959, $91,077,
$395,144 and $438,159 for merchandise purchased at
market prices during fiscal 2010 prior to the Discharge
Date, the transition period, fiscal 2008 and 2007, respec-
tively. Outstanding amounts payable to Source Interlink
for merchandise purchased were $23,081 and $53,217 as of
May 2, 2009 and January 31, 2009, respectively.
The Company uses Digital on Demand as its provider of
music and video database equipment and services. Leonard
Riggio owns a minority interest in Digital on Demand
through the same investment company through which he
owns a minority interest in Source Interlink. The Company
paid Digital on Demand $2,992, $1,960, $4,893 and $4,396
for music and video database equipment and services dur-
ing fiscal 2010, the transition period, fiscal 2008 and 2007,
respectively.
23. DIVIDENDS
During fiscal 2010, the Company paid quarterly cash
dividends of $0.25 per share on June 30, 2009 to stock-
holders of record at the close of business on June 9, 2009,
on September 30, 2009 to stockholders of record at the
close of business on September 9, 2009, on December 31,
2009 to stockholders of record at the close of business on
December 10, 2009 and on March 31, 2010 to stockholders
of record at the close of business on March 10, 2010. The
Company also paid a dividend of $0.25 per share on June
30, 2010 to stockholders of record at the close of business
on June 11, 2010.
During the transition period, the Company paid a dividend
of $0.25 per share on March 31, 2009 to stockholders of
record at the close of business on March 10, 2009.
During fiscal 2008, the Company paid a quarterly cash divi-
dend of $0.15 per share on March 31, 2008 to stockholders
of record at the close of business on March 10, 2008. On
March 20, 2008, the Company announced that its Board of
Directors had authorized an increase to its quarterly cash
dividend from $0.15 to $0.25 per share, commencing with
the dividend to be paid in June 2008. The Company paid
quarterly cash dividends of $0.25 per share on June 30,
2008 to stockholders of record at the close of business on
June 9, 2008, on September 30, 2008 to stockholders of
record at the close of business on September 9, 2008, and
on December 31, 2008 to stockholders of record at the close
of business on December 10, 2008.
62 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued