Barnes and Noble 1999 Annual Report Download - page 27

(1) Fiscal 1999 includes the results of operations of Babbage’s
Etc. from October 28, 1999, the date of acquisition.
(2) Restructuring charge includes restructuring and asset
impairment losses recognized upon adoption of Statement
of Financial Accounting Standards No. 121, “Impairment
of Long-Lived Assets and Assets to be Disposed Of.”
(3) Interest expense for fiscal 1999, 1998, 1997, 1996 and 1995
is net of interest income of $1,449, $976, $446, $2,288 and
$2,138, respectively.
(4) On November 12, 1998, the Company and Bertelsmann
AG (Bertelsmann) completed the formation of a limited
liability company to operate the online retail bookselling
operations of the Company’s wholly owned subsidiary,
barnesandnoble.com inc. (Barnes & Noble.com Inc.).
Barnes & Noble.com Inc. began operations in fiscal 1997.
As a result of the formation of barnesandnoble.com llc
(Barnes & Noble.com), the Company began accounting
for its interest in Barnes & Noble.com under the equity
method of accounting as of the beginning of fiscal 1998.
Fiscal 1998 reflects a 100 percent equity interest in Barnes
& Noble.com for the first three quarters ended October 31,
1998 (also the effective date of the limited liability company
agreement), and a 50 percent equity interest beginning on
November 1, 1998 through the end of the fiscal year. As a
result of the Barnes & Noble.com Inc. initial public offering
(IPO) on May 25, 1999, the Company retained a 40 percent
interest in Barnes & Noble.com. Accordingly, fiscal 1999
reflects the Company’s 50 percent interest in the net losses of
Barnes & Noble.com through the date of the IPO and 40
percent thereafter.
(5) As a result of the formation of the limited liability company,
the Company recognized a pre-tax gain during fiscal 1998
in the amount of $126,435, of which $63,759 has been
recognized in earnings based on the $75,000 received
directly from Bertelsmann and $62,676 ($36,351 after
taxes) has been reflected in additional paid-in capital based
on the Company’s share of the incremental equity of the
joint venture resulting from the $150,000 Bertelsmann
contribution. As a result of the Barnes & Noble.com Inc.
IPO, the Company and Bertelsmann each retained a 40
percent interest in Barnes & Noble.com. The Company
recorded an increase in additional paid-in capital of $200,272
($116,158 after taxes) representing the Company’s
incremental share in the equity in Barnes & Noble.com. In
addition, the Company recognized a pre-tax gain of $25,000
in fiscal 1999 as a result of cash received in connection with
the joint venture agreement with Bertelsmann.
(6) Included in other income in fiscal 1999 are pre-tax gains
of $22,356 and $10,975 recognized in connection with the
Company’s investments in NuvoMedia Inc. and Chapters
Inc., respectively, as well as a one-time charge of $5,000
attributable to the termination of the Ingram acquisition
and losses from equity investments of $994.
(7) Reflects a net extraordinary charge during fiscal 1997 due to
the early extinguishment of debt, consisting of: (i) a pre-tax
charge of $11,281 associated with the redemption premium
on the Company’s senior subordinated notes; (ii) the
associated write-off of $8,209 of unamortized deferred
finance costs; and (iii) the related tax benefits of $7,991
on the extraordinary charge.
(8) Also includes 10 Bookstop and 23 Bookstar stores as of
January 29, 2000.
(9) Also includes 10 Doubleday Book Shops, five Scribner’s
Bookstores and five smaller format bookstores operated
under the Barnes & Noble trade name representing the
Company’s original retail strategy as of January 29, 2000.
(10) Includes 265 Software Etc., 216 Babbage’s, 40 GameStop
and five smaller format stores as of January 29, 2000.
(11) Comparable store sales increase (decrease) is calculated on
a 52-week basis, and includes sales of stores that have been
open for 12 months for B. Dalton stores and 15 months
for Barnes & Noble stores (due to the high sales volume
associated with grand openings). Comparable store sales
for fiscal years 1999, 1998 and 1997 include relocated
Barnes & Noble stores and exclude B. Dalton stores which
the Company has closed or has a formal plan to close.
Comparable store sales increase for Babbage’s Etc. is
calculated on a 52-week basis, and includes sales of stores
that have been open for 12 months.
SELECTED CONSOLIDATED FINANCIAL DATA continued
1999 ANNUAL REPORT
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