Barnes and Noble 2001 Annual Report Download - page 37

the amount of approximately $131,400, has been
re c o r ded as goodwill and is being amortized using the
straight-line method over an estimated useful life of 30
years. The pro forma effect assuming the acquisition of
Funco, Inc. at the beginning of fiscal 2000 is not material.
T h r ough a corporate re s t ructuring, Babbage’s Etc. became
a wholly owned subsidiary of Funco, Inc. and the name
of Funco, Inc. was changed to GameStop, Inc.
On Febru a r y 19, 2002, the Company successfully completed
an initial public offering for its GameStop subsidiary, raising
$250,000 in cash for Barnes & Noble, Inc. and $98,000 in
net proceeds for GameStop. Barnes & Noble has re t a i n e d
an approximate 63 percent interest in GameStop.
12. SEGMENT INFO R M AT I O N
The Company operates under two strategic groups that
o f fer diff e r ent products. These groups have been aggre g a t e d
into two re p o r table operating segments: bookstores and
video-game and entert a i n m e n t - s o f t w a r e stores.
B o o k s to re s
This segment includes 591 bookstores under the Barn e s
& Noble Booksellers, Bookstop and Bookstar names
which generally offer a comprehensive title base, a café,
a children’s section, a music department, a magazine
section and a calendar of ongoing events, including author
appearances and children’s activities. This segment also
includes 305 small format mall-based stores under the
B. Dalton Bookseller, Doubleday Book Shops and
Scribner’s Bookstore trade names. Additionally, this
segment includes the operations of Calendar Club, the
C o m p a n y ’s majority-owned subsidiary. Calendar Club is
an operator of seasonal calendar kiosks. The bookstore
segment employs a merchandising strategy that targ e t s
the “Middle American” consumer book market.
Video-Game and Ente rt a i n m e n t - S o ft wa re Sto re s
This segment includes 432 Video Game & Entert a i n m e n t
S o f t w a re stores under the Babbage’s and Software Etc.
names, 606 stores operated under the GameStop and
FuncoLand names, a Web site (gamestop.com) and
Game Informer magazine. The principal products of
these stores are comprised of video-game hard w a re and
s o f t w a r e and PC-entertainment software. The Company’s
consolidated financial statements reflect the results of
B a b b a g e ’s Etc. from October 1999 and Funco, Inc. fro m
June 2000, the respective dates of acquisition.
The accounting policies of the segments are the same as
those described in the summary of significant accounting
policies. Segment operating profit includes corporate
expenses in each operating segment. Barnes & Noble
evaluates the performance of its segments and allocates
resources to them based on operating profit.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S c o n t i n u e d
2 0 0 1 A n n u a l R e p o r t ■B a r n e s & N o b l e , I n c .
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Summarized financial information concerning the Company’s reportable segments is presented below:
Sales Depreciation and Amortization
Fiscal Year 2001 2000 1999 2001 2000 1999
Bookstores $ 3 ,74 8,992 3 , 61 8, 24 0 3 , 2 62,295 $ 1 1 7,529 1 22 ,563 1 0 8 , 6 9 1
Video Game & Ente rtainment Soft wa re sto re s 1 ,1 2 1 ,398 7 57, 5 6 4 223 ,74 8 3 0 , 2 97 2 2,1 97 3 , 61 3
Total $ 4,870,390 4,375,804 3,486,043 $ 147,826 144 ,76 0 1 1 2,304
Operating Profit Equity Investment in Barnes & Noble.com
Fiscal Year 2001 2000 1999 2001 2000 1999
Bookstores * $ 2 1 1 ,70 0 1 2 7, 8 1 2 2 1 6 , 678 $ 4 8 , 2 1 7 136,595 2 4 0 , 5 3 1
Operating margin 5.65% 3.53% 6.64%
Video Game & Ente rtainment Soft wa re sto re s 3 4 , 0 8 7 6 , 0 14 15,432 -- -- --
Operating margin 3.04% 0.79% 6.90%
Total $ 24 5 ,7 8 7 1 3 3 , 8 2 6 23 2 ,1 1 0 $ 4 8 , 2 1 7 136,595 2 4 0 , 5 3 1
*Fiscal 2001 operating profit is net of legal settlement expense of $4,500. Fiscal 2001 operating profit excluding the legal settlement
expense would have been $216,200. Fiscal 2000 operating profit is net of a non-cash impairment charge of $106,833. Fiscal 2000
operating profit excluding the non-cash impairment charge would have been $234,645.