Barnes and Noble 1997 Annual Report Download - page 30

provisions of Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees.” Generally, compen-
sation expense is not recognized for stock option grants. The
Company has not adopted the fair value method encouraged, but
not required, by Statement of Financial Accounting Standards
No. 123, “Accounting for Stock-Based Compensation.”
Reporting Period
The Company’s fiscal year is comprised of 52 or 53
weeks, ending on the Saturday closest to the last day of January.
The reporting periods ended January 31, 1998, February 1, 1997
and January 27,1996 contained 52 weeks, 53 weeks and 52
weeks, respectively.
2. RECEIVABLES, NET
Receivables represent customer, bankcard, landlord and
other receivables due within one year as follows:
JANUARY 31, FEBRUARY 1,
1998 1997
Trade accounts $ 6,628 4,790
Bankcard receivables 15,536 12,800
Receivables from landlords
for leasehold improvments 16,715 19,374
Other receivables 4,979 8,594
Total receivables, net $43,858 45,558
3. DEBT
Revolving Credit Facility
On November 18, 1997, the Company obtained an $850,000
senior credit facility (the New Facility) with a syndicate led by
The Chase Manhattan Bank. The New Facility, structured as a
five-year revolving credit, refinanced an existing $450,000 revolv-
ing credit and $100,000 term loan facility (the Old Facility). The
New Facility permits borrowings at various interest rate options
based on the prime rate or London Interbank Offer Rate
(LIBOR) depending upon certain financial tests. In addition, the
agreement requires the Company to pay a commitment fee up to
0.25% of the unused portion depending upon certain financial
tests. The New Facility contains covenants, limitations and events
of default typical of credit facilities of this size and nature, includ-
ing financial covenants which require the Company to meet,
among other things, cash flow and interest coverage ratios and
which limit capital expenditures. The New Facility is secured by
the capital stock, accounts receivable and general intangibles of
the Company’s subsidiaries.
Net proceeds from the New Facility are available for general
corporate purposes and were used to redeem all of the Company’s
outstanding $190,000, 117⁄8% senior subordinated notes on
January 15, 1998. As a result of the refinancings, the Company
recorded an extraordinary charge of $11,499 (net of applicable
taxes) due to the early extinguishment of debt during fiscal 1997.
The extraordinary charge represents the payment of a call
premium associated with the redemption of the senior subordi-
nated notes of $6,656 (net of applicable taxes) and the write-off of
unamortized fees of $4,843 (net of applicable taxes).
The Company from time to time enters into interest rate swap
agreements to manage interest costs and risk associated with
changes in interest rates. These agreements effectively convert
underlying variable-rate debt based on prime rate or LIBOR to
fixed-rate debt through the exchange of fixed and floating interest
payment obligations without the exchange of underlying principal
amounts. During fiscal 1996, the Company entered into interest
rate swap agreements totaling $100,000 with maturities ranging
from 1999 to 2000. As of January 31, 1998 the Company had
outstanding $125,000 of swaps with maturities ranging from 1999
to 2003. The Company recorded interest expense associated with
these agreements of $306 and $365 during fiscal years1997 and
1996, respectively .
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Notes to Consolidated Financial Statements continued