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[NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS continued ]
42
2003 Annual ReportBarnes & Noble, Inc.
15. CHANGES IN INTANGIBLE ASSETS AND GOODWILL
The following intangible assets were acquired by the
Company primarily in connection with the purchase of
Sterling Publishing in the fourth quarter of fiscal 2002
and the purchase of Bertelsmann’s interest in Barnes &
Noble.com in fiscal 2003:
As of January 31, 2004
Gross
Carrying Accumulated
Amount Amortization Total
Amortizable intangible assets $ 23,288 (3,132) $ 20,156
Unamortizable intangible assets 74,418 -- 74,418
$ 97,706 (3,132) $ 94,574
Amortizable intangible assets consist primarily of author
contracts which are being amortized on a straight-line
basis over a period of 10 years. Unamortizable
intangible assets consist primarily of a trade name.
Aggregate Amortization Expense:
For the 52 weeks ended January 31, 2004 $ 3,132
Estimated Amortization Expense:
(12 months ending on or about January 31)
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,684
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,322
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,991
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,899
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,849
The changes in the carrying amount of goodwill for the
52 weeks ended January 31, 2004 are as follows:
Video Game Book
Operating Operating
Segment Segment Total
Balance as of February 1, 2003 $ 317,957 72,439 $390,396
Goodwill acquired
(See footnotes 8 and 9) 2,869 102,075 (a) 104,944
Acquisition of minority interest 12,642 -- 12,642
Acquisition adjustment -- 1,262 1,262
Balance as of January 31, 2004 $ 333,468 175,776 $509,244
(a) Relates primarily to the acquisition of an approximate
37 percent economic interest in Barnes & Noble.com
and is based on a preliminary assessment that is subject
to revision as more detailed analysis is completed.
During the first quarter of fiscal 2003, the purchase
price related to the acquisition of Sterling Publishing
was allocated based on the valuation performed by an
independent firm. As a result, $48,176 was reallocated
from goodwill to the intangible assets noted above
retroactive to February 1, 2003.
16. SHAREHOLDERS’ EQUITY
In fiscal 1999, the Board of Directors authorized a
common stock repurchase program for the purchase of
up to $250,000 of the Company’s common shares. As
of January 31, 2004, the Company has repurchased
8,807,700 shares at a cost of approximately $189,661
under this program. The repurchased shares are held in
treasury.
Each share of the Company’s Common Stock also
entitles the holder to the right (the Right) to purchase
one four-hundredth of a share of the Company’s Series
H Preferred Stock for $225. The Right is only
exercisable if a person or group acquires 15 percent or
more of the Company’s outstanding Common Stock or
announces a tender offer or exchange offer, the
consummation of which would result in such person or
group owning 15 percent or more of the Company’s
outstanding Common Stock.