Barnes and Noble 2000 Annual Report Download - page 30

(1) Fiscal 2000 includes the results of operations of Funco,
Inc. from June 14, 2000, the date of acquisition.
(2) In fiscal 2000, the Company acquired a controlling
interest in Calendar Club L.L.C. (Calendar Club);
the Company’s consolidated statement of operations
includes results of operations of Calendar Club for
the full year. Prior to fiscal 2000, the Company
included its equity in the results of operations
of Calendar Club as part of other income (expense).
(3) Fiscal 1999 includes the results of operations of
Babbage’s Etc. LLC from October 28, 1999, the
date of acquisition.
(4) Also includes nine Bookstop and 22 Bookstar
stores as of February 3, 2001.
(5) Also includes eight Doubleday Book Shops, two
Scribner’s Bookstores and four smaller format
bookstores operated under the Barnes & Noble
trade name representing the Company’s original
retail strategy as of February 3, 2001.
(6) Includes 396 FuncoLand stores, 261 Software Etc.
stores, 212 Babbage’s stores, 102 GameStop stores
and seven smaller format stores as of February 3,
2001.
(7) Represents a non-cash charge to operating earnings
to adjust the carrying value of certain assets,
primarily goodwill relating to the purchase of
B. Dalton and other mall bookstore assets.
(8) Interest expense for fiscal 2000, 1999, 1998, 1997
and 1996 is net of interest income of $939, $1,449,
$976, $446 and $2,288, respectively.
(9) 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., which had begun
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 initial public offering (IPO) for the
Barnes & Noble.com business on May 25, 1999,
the Company and Bertelsmann each retained a 40
percent interest in Barnes & Noble.com. Accordingly,
the Company’s share in the net loss of Barnes
& Noble.com for fiscal 1999 was based on a 50
percent equity interest from the beginning of fiscal
1999 through May 25, 1999 and 40 percent through
the end of the fiscal year. In November 2000, Barnes
& Noble.com acquired Fatbrain.com, Inc. (Fatbrain),
the third largest online bookseller. Barnes &
Noble.com issued shares of its common stock to
Fatbrain shareholders. As a result of this merger,
the Company and Bertelsmann each retained an
approximate 36 percent interest in Barnes &
Noble.com. Accordingly, the Company’s share in the
net losses of Barnes & Noble.com for fiscal 2000 was
based on an approximate 40 percent equity interest
from the beginning of fiscal 2000 through November
2000 and approximately 36 percent thereafter.
(10) 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
IPO, 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.
(11) Included in other expense in fiscal 2000 are losses of
$9,730 from the Company’s equity investments.
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 Book Group acquisition
and losses from equity investments of $994.
SELECTED CONSOLIDATED FINANCIAL DATA continued