Barnes and Noble 2000 Annual Report Download - page 50

Income Taxes
The provision for income taxes includes federal, state
and local income taxes currently payable and those
deferred because of temporary differences between the
financial statement and tax bases of assets and liabilities.
The deferred tax assets and liabilities are measured using
the enacted tax rates and laws that are expected to be in
effect when the differences reverse.
Stock Options
The Company accounts for all transactions under which
employees receive shares of stock or other equity
instruments in the Company or the Company incurs
liabilities to employees in amounts based on the price of
its stock in accordance with the provisions of Accounting
Principles Board Opinion No. 25, “Accounting for Stock
Issued to Employees.”
Reclassifications
Certain prior-period amounts have been reclassified
for comparative purposes to conform with the fiscal
2000 presentation.
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 February 3, 2001,
January 29, 2000 and January 30, 1999 contained 53
weeks, 52 weeks and 52 weeks, respectively.
2. RECEIVABLES, NET
Receivables represent customer, bankcard, landlord and
other receivables due within one year as follows:
February 3, January 29,
2001 2000
Trade accounts $ 8,146 9,558
Bankcard receivables 24,000 21,309
Receivables from landlords for
leasehold improvements 18,568 12,807
Other receivables 33,791 14,566
Total receivables, net $ 84,505 58,240
3. DEBT
On November 18, 1997, the Company obtained an
$850,000 five-year senior revolving credit facility (the
Revolving Credit Facility) with a syndicate led by The
Chase Manhattan Bank. The Revolving Credit 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 percent of the unused portion
depending upon certain financial tests. The Revolving
Credit Facility contains covenants, limitations and events
of default typical of credit facilities of this size and nature,
including financial covenants which require the
Company to meet, among other things, cash flow and
interest coverage ratios and which limit capital
expenditures. The Revolving Credit Facility is secured
by the capital stock, accounts receivable and general
intangibles of the Company’s subsidiaries. Net proceeds
from the Revolving Credit Facility are available for
general corporate purposes.
In fiscal 2000, the Company obtained an additional
$100,000 senior unsecured seasonal credit facility
(seasonal credit facility) with a syndicate of banks led by
The Chase Manhattan Bank. The seasonal credit facility,
which matured on January 31, 2001, permitted for
borrowings at an interest rate based on LIBOR. In
addition, the agreement required the Company to pay a
commitment fee of 0.375 percent of the unused portion.
The seasonal credit facility was guaranteed by all
restricted subsidiaries of Barnes & Noble.
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. As of February 3, 2001 and January
29, 2000 the Company had outstanding $55,000 and
$85,000 of swaps, respectively, maturing in 2003. The
Company recorded interest income (expense) associated
with these agreements of $462 and ($470) during fiscal
years 2000 and 1999, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued