Barnes and Noble 2006 Annual Report Download - page 5

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We closed the year with our strongest balance sheet ever, generating  million in free cash fl ow. At year-end, after
paying out approximately  million in dividends, we had  million in cash on hand and no outstanding debt. We
continue to believe that a sound balance sheet is a key strategic advantage in an increasingly competitive marketplace.
For the year ahead, we look forward to the Harry Potter season this summer (we call it “Christmas in July”), because
it raises the profi le of bookstores and generates excitement and good morale all around. We are also pleased with the
line-up of new titles for the fall, and hope for a repeat of the pre-election year political stir, which has historically
delivered increased traffi c to our stores. Nevertheless, as previously announced, we believe  will be challenging
in terms of comparable-store sales and earnings.
Although some in the investor community and the press prefer to describe our industry as a series of “bookstore wars,”
we do not especially see our role as warriors. Rather, we believe our mission is to be the best booksellers we can be
and to focus on better serving our tens of millions of customers, thereby adding value to our important marketplace.
Our profi ts come from executing our contract with the readers who enter our stores by delivering great service, a great
online experience, and unmatched title selection and merchandising, not from being obsessed with the aff airs of our
many competitors.
On behalf of all of our dedicated booksellers, we thank our shareholders for allowing us the privilege and the joy of
being the best and most profi table booksellers in all the world.
Sincerely,
Chairman
2006 Annual Report 3