Barnes and Noble 2004 Annual Report Download - page 7

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[LETTER TO OUR SHAREHOLDERS continued ]
Our balance sheet remains strong. We generated free cash flow of approximately $350 million
during the fiscal year. Our liquidity position is solid, with a debt-to-equity ratio of 0.21 to 1. At
year-end, our revolving credit facility had no outstanding balance; the only debt on the
company’s books was a $245 million term loan. In fact, the company had a cash position, net
of debt, of $291 million at the end of the year.
During 2004, we redeemed $300 million in convertible notes, resulting in a reduction of
approximately nine million dilutive shares. We also distributed more than $500 million of
GameStop stock to Barnes & Noble shareholders through the tax-free spin-off. In addition, in
March 2005, our Board of Directors authorized a new share repurchase program of up to $200
million of common shares. This new share repurchase program follows the company’s previous
$250 million share repurchase program, which was recently completed in full.
Looking ahead, we will continue to nurture our multi-channel strategy by making it easier for
customers to shop with us, whether they visit our stores or shop from their desktops, laptops
and handhelds. We plan to open 30 to 40 stores this year, a comfortable pace enabling us to both
upgrade existing locations that are near the end of their leases, open in new communities, and
enter new markets. This year, we will open a new store in Morgantown, West Virginia, giving
Barnes & Noble stores a presence in all 50 states.
We remain focused on delivering exceptional value to our shareholders consistently over time.
Over the last five years, our stock price increased 63 percent and our total return to shareholders
was 130 percent.
As always, we are grateful to our shareholders for their continued support, and to our
booksellers, whose commitment to providing extraordinary service to our customers continues
to set Barnes & Noble apart.
Sincerely,
Leonard Riggio
Chairman
[LETTER TO OUR SHAREHOLDERS continued ]
5
2004 Annual Report Barnes & Noble, Inc.