Barnes and Noble 2005 Annual Report Download - page 19

[MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS continued ]
18 2005 Annual ReportBarnes & Noble, Inc.
believes cash and cash equivalents on hand, cash flows
generated from operating activities, short-term vendor
financing and borrowing capacity under the New
Facility will be sufficient to meet the Company’s
working capital and debt service requirements, and
support the development of its short- and long-term
strategies for at least the next 12 months.
In fiscal 1999, the Board of Directors of the Company
authorized a common stock repurchase program for the
purchase of up to $250.0 million of the Company’s
common stock. The Company completed this $250.0
million repurchase program during the first quarter of
fiscal 2005. On March 24, 2005, the Company’s Board
of Directors authorized an additional share repurchase
program of up to $200.0 million of the Company’s
common stock. The Company completed this $200.0
million repurchase program during the third quarter of
fiscal 2005. On September 15, 2005, the Company’s
Board of Directors authorized a new share repurchase
program of up to $200.0 million of the Company’s
common stock.
Share repurchases under this program may be made
through open market and privately negotiated
transactions from time to time and in such amounts as
management deems appropriate. As of January 28,
2006, the Company repurchased 7,682,700 shares at a
cost of approximately $282.7 million under these
programs in fiscal 2005, bringing the combined total of
repurchases under these programs to 16,690,400 shares
at a cost of approximately $479.0 million. The maximum
dollar value of common shares that may yet be purchased
under the current program is approximately $171.0
million as of January 28, 2006. During the first quarter of
fiscal 2006 (through March 31, 2006), the Company
repurchased 1,602,000 shares at a cost of $68.2 million.
All repurchased shares are held in treasury.
On September 15, 2003, the Company completed its
acquisition of all of Bertelsmann AG’s (Bertelsmann)
interest in barnesandnoble.com inc. (bn.com) and
barnesandnoble.com llc (Barnes & Noble.com). The
purchase price paid by the Company was $165.4 million
(including acquisition related costs) in a combination of
cash and a note, equivalent to $2.80 per share in bn.com
or membership unit in Barnes & Noble.com. The note
issued to Bertelsmann in the amount of $82.0 million
was paid in fiscal 2003. As a result of the acquisition,
the Company increased its economic interest in Barnes
& Noble.com to approximately 75%. On May 27,
2004, the Company completed a merger (the Merger) of
bn.com with a wholly owned subsidiary of the
Company. The purchase price paid by the Company was
$158.8 million (including acquisition related costs).
Under the terms of the Merger, the holders of bn.com’s
outstanding common stock, other than the Company
and its subsidiaries, received $3.05 in cash for each share
that they owned. The Merger was approved by the
shareholders of bn.com at a special meeting held on May
27, 2004. As a result of the Merger, bn.com became a
privately held company, wholly owned by the Company.