Barnes and Noble 2003 Annual Report Download - page 34

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In fiscal 2002, the Company acquired Sterling Publishing, one of the top 25 publishers in the nation and the industry’s
leading publisher of how-to books. The acquisition was accounted for by the purchase method of accounting and,
accordingly, the results of operations for the period subsequent to the acquisition are included in the consolidated
financial statements. The excess of purchase price over the fair value of the net assets acquired has been recorded as
goodwill and other intangible assets and will be tested annually for impairment in accordance with SFAS No. 142. The
pro forma effect assuming the acquisition of Sterling Publishing at the beginning of fiscal 2002 is not material.
A summary of the components of net periodic cost for the Pension Plan and the Postretirement Plan follows:
Pension Plan Postretirement Plan
Fiscal Year 2003 2002 2001 2003 2002 2001
Service cost $ -- -- -- -- -- --
Interest cost 2,028 1,951 1,869 282 251 175
Expected return on plan assets ( 2,187 ) ( 2,726 ) ( 3,030 ) -- -- --
Net amortization and deferral 1,159 536 43 51 6 (73 )
Net periodic expense (income) 1,000 ( 239 ) (1,118 ) 333 257 102
FAS 88 curtailment income (a) -- -- 831 -- -- --
Total expense (income) $ 1,000 (239 ) ( 287 ) 333 257 102
(a) Settlements in the form of lump sum cash payments were made in fiscal 2001 to plan participants in exchange for their rights to
receive specified pension benefits.
Total Company contributions charged to employee benefit expenses for the Savings Plans were $7,433, $6,709 and
$5,929 during fiscal 2003, 2002 and 2001, respectively.
Weighted-average actuarial assumptions used in determining the net periodic costs of the Pension Plan and the
Postretirement Plan are as follows:
Pension Plan Postretirement Plan
Fiscal Year 2003 2002 2001 2003 2002 2001
Discount rate 6.3% 6.5% 7.3% 6.5% 7.3% 7.3%
Expected return on plan assets 8.8% 9.0% 9.5% -- -- --
10. EMPLOYEES’ RETIREMENT AND DEFINED CONTRIBUTION PLANS
As of December 31, 1999, substantially all employees of the Company were covered under a noncontributory defined benefit
pension plan (the Pension Plan). As of January 1, 2000, the Pension Plan was amended so that employees no longer earn
benefits for subsequent service. Subsequent service continues to be the basis for vesting of benefits not yet vested at December
31, 1999 and the Pension Plan will continue to hold assets and pay benefits.
The Company maintains defined contribution plans (the Savings Plans) for the benefit of substantially all employees.
In addition, the Company provides certain health care and life insurance benefits (the Postretirement Plan) to retired
employees, limited to those receiving benefits or retired as of April 1, 1993.
[NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS continued ]
33
2003 Annual Report Barnes & Noble, Inc.