Barnes and Noble 2007 Annual Report Download - page 37

FISCAL YEAR
2008 $ 360,775
2009 336,339
2010 305,325
2011 253,083
2012 203,851
After 2012 633,195
$ 2,092,568
The Company provides for minimum rent expense over
the lease terms (including the build-out period) on a
straight-line basis. The excess of such rent expense
over actual lease payments (net of tenant allowances) is
refl ected primarily in other long-term liabilities in the
accompanying balance sheets.
The Company leases one of its distribution facilities
located in South Brunswick, New Jersey from the New
Jersey Economic Development Authority (NJEDA) under
the terms of an operating lease expiring in June .
Under the terms of this lease, the Company provides a
residual value guarantee to the NJEDA, in an amount not
to exceed ,, relating to the fair market value of this
distribution facility calculated at the conclusion of the
lease term.
SEGMENT REPORTING 14.
The Company has determined that it has one operat-
ing segment: bookselling. This evaluation was made in
accordance with SFAS , “Disclosures about Segments
of an Enterprise and Related Information,” and took into
account the Company’s determination that it operates
in one business segment was based on application of
the criteria in paragraph  of SFAS . The Company’s
evaluation includes the identifi cation of operating seg-
ments by considering the way the business is managed
(focusing on the fi nancial information distributed) and
the manner in which the chief operating decision maker
interacts with other members of management. The
bookselling segment has as its principal business the
sale of trade books, mass market paperbacks, children’s
books, bargain books, magazines, music, movies,
calendars, games and gift items directly to customers.
Most of these products are sourced by third parties while
some are sourced through the Company’s own publish-
ing activities. These product sales collectively account
for substantially all of the Company’s sales. Operating
segments for the Company have not been aggregated.
LEGAL PROCEEDINGS 15.
The Company is involved in a variety of claims, suits,
investigations and proceedings that arise from time to
time in the ordinary course of its business, including
actions with respect to contracts, intellectual prop-
erty (IP), taxation, employment, benefi ts, securities,
personal injuries and other matters. The results of
these proceedings in the ordinary course of business
are not expected to have a material adverse eff ect on the
Company’s consolidated fi nancial position or results of
operations.
The following is a discussion of the material legal mat-
ters involving the Company.
In re Barnes & Noble, Inc. Derivative Litigation
In July and August , four putative stockholder
derivative actions were fi led in New York County
Supreme Court against certain members of the
Company’s Board of Directors and certain current
and former executive offi cers of the Company, alleg-
ing breach of fi duciary duty and unjust enrichment in
connection with the grant of certain stock options to
certain executive offi cers and directors of the Company.
These actions were subsequently consolidated under
the caption In re Barnes & Noble, Inc. Derivative Litigation
(the State Derivative Action). The Company is named as
a nominal defendant only. The consolidated complaint
sought on behalf of the Company unspecifi ed money
damages, disgorgement of any proceeds from the exer-
cise of the options that are the subject of the action (and
any subsequent sale of the underlying stock), rescission
of any unexercised stock options, other equitable relief,
and costs and disbursements, including attorneys’ fees.
The Company fi led a motion to dismiss the consolidated
complaint. On May , , the court heard argument
on the Company’s motion. The motion was voluntarily
withdrawn, subject to the right of re-fi ling, to permit the
parties to pursue eff orts to resolve the dispute amicably
without the need for any decision on the motion.
In September , three putative stockholder deriva-
tive actions were fi led in the United States District
Court for the Southern District of New York naming
the directors of the Company and certain current and
former executive offi cers as defendants and alleging that
the defendants backdated certain stock option grants to
executive offi cers and caused the Company to fi le false or
misleading fi nancial disclosures and proxy statements.
FISCAL YEAR
2008 $ 360,775
2009 336,339
2010 305,325
2011 253,083
2012 203,851
After 2012 633,195
$ 2,092,568
The Company provides for minimum rent expense over
the lease terms (including the build-out period) on a
straight-line basis. The excess of such rent expense
over actual lease payments (net of tenant allowances) is
reflected primarily in other long-term liabilities in the
accompanying balance sheets.
The Company leases one of its distribution facilities
located in South Brunswick, New Jersey from the New
Jersey Economic Development Authority (NJEDA) under
the terms of an operating lease expiring in June .
Under the terms of this lease, the Company provides a
residual value guarantee to the NJEDA, in an amount not
to exceed ,, relating to the fair market value of this
distribution facility calculated at the conclusion of the
lease term.
SEGMENT REPORTING 14.
The Company has determined that it has one operating
segment: bookselling. This evaluation was made in
accordance with SFAS , “Disclosures about Segments
of an Enterprise and Related Information,” and took into
account the Company’s determination that it operates
in one business segment was based on application of
the criteria in paragraph  of SFAS . The Company’s
evaluation includes the identification of operating seg-
ments by considering the way the business is managed
(focusing on the financial information distributed) and
the manner in which the chief operating decision maker
interacts with other members of management. The
bookselling segment has as its principal business the
sale of trade books, mass market paperbacks, children’s
books, bargain books, magazines, music, movies,
calendars, games and gift items directly to customers.
Most of these products are sourced by third parties while
some are sourced through the Company’s own publish-
ing activities. These product sales collectively account
for substantially all of the Company’s sales. Operating
segments for the Company have not been aggregated.
LEGAL PROCEEDINGS 15.
The Company is involved in a variety of claims, suits,
investigations and proceedings that arise from time to
time in the ordinary course of its business, including
actions with respect to contracts, intellectual property (IP),
taxation, employment, benefits, securities, personal
injuries and other matters. The results of these proceed-
ings in the ordinary course of business are not expected
to have a material adverse effect on the Company’s
consolidated financial position or results of operations.
The following is a discussion of the material legal
matters involving the Company.
In re Barnes & Noble, Inc. Derivative Litigation
In July and August , four putative stockholder
derivative actions were filed in New York County
Supreme Court against certain members of the
Company’s Board of Directors and certain current
and former executive officers of the Company, alleg-
ing breach of fiduciary duty and unjust enrichment in
connection with the grant of certain stock options to
certain executive officers and directors of the Company.
These actions were subsequently consolidated under
the caption In re Barnes & Noble, Inc. Derivative Litigation
(the State Derivative Action). The Company is named as
a nominal defendant only. The consolidated complaint
sought on behalf of the Company unspecified money
damages, disgorgement of any proceeds from the exer-
cise of the options that are the subject of the action (and
any subsequent sale of the underlying stock), rescission
of any unexercised stock options, other equitable relief,
and costs and disbursements, including attorneys’ fees.
The Company filed a motion to dismiss the consolidated
complaint. On May , , the court heard argument
on the Company’s motion. The motion was voluntarily
withdrawn, subject to the right of re-filing, to permit the
parties to pursue efforts to resolve the dispute amicably
without the need for any decision on the motion.
In September , three putative stockholder deriva-
tive actions were filed in the United States District
Court for the Southern District of New York naming
the directors of the Company and certain current and
former executive officers as defendants and alleging that
the defendants backdated certain stock option grants to
executive officers and caused the Company to file false or
misleading financial disclosures and proxy statements.
These actions were subsequently consolidated under the
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200 Annual Report7