Barnes and Noble 2008 Annual Report Download - page 32

5. DEBT
The Company has an $850,000 revolving credit facil-
ity dated as of June 17, 2005, as amended and restated
on August 2, 2006 (Revolving Credit Facility). The
Revolving Credit Facility has a maturity date of July 31,
2011 and may be increased to $1,000,000 under cer-
tain circumstances at the option of the Company. The
Revolving Credit Facility has an applicable margin that
is applied to loans and standby letters of credit ranging
from 0.500% to 1.000% above the stated Eurodollar
rate. A fee is paid on commercial letters of credit rang-
ing from 0.2500% to 0.5000%. In addition, a commit-
ment fee ranging from 0.100% to 0.200% is paid on the
unused portion of the Revolving Credit Facility. In each
case, the applicable rate is based on the Company’s con-
solidated fi xed charge coverage ratio. Proceeds from the
Revolving Credit Facility are used for general corporate
purposes, including seasonal working capital needs.
Selected information related to the Company’s Revolving
Credit Facility:
Fiscal Year 2008 2007 2006
Revolving credit facility
at year end $ — — —
Average balance
outstanding during the year $ 63,871 1,392 23,337
Maximum borrowings
outstanding during the year $ 199,900 37,600 91,800
Weighted average interest
rate during the yeara6.05% 173.16% 15.40%
Interest rate at end of year — — —
a The fi scal 2007 and 2006 interest rates are higher than the fi scal 2008
interest rate due to the lower average borrowings and the fi xed nature
of the amortization of the deferred fi nancing fees and commitment
fees. Excluding the deferred fi nancing fees and the commitment fees
in fi scal 2007 and 2006, the weighted average interest rate was 7.51%
and 7.70%, respectively.
Fees expensed with respect to the unused portion of the
Revolving Credit Facility were $956, $1,034 and $1,275,
during fi scal 2008, 2007 and 2006, respectively.
The Company has no agreements to maintain compen-
sating balances.
6. FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents
reported in the accompanying consolidated balance
sheets approximate fair value due to the short-term
maturities of these assets. The aggregate fair value of
the Revolving Credit Facility approximates its carrying
amount because of its recent and frequent repricing
based upon market conditions.
7. NET EARNINGS PER SHARE
Following is a reconciliation of earnings from continu-
ing operations and weighted average common shares
outstanding for purposes of calculating basic and diluted
earnings per share:
FISCAL YEAR 2008 2007 2006
NUMERATOR:
Earnings from
continuing operations $ 85,426 134,911 149,186
DENOMINATOR:
Basic weighted average
common shares
outstanding 55,207 63,662 65,212
Dilutive effect of stock
awards 2,120 3,388 4,014
Diluted outstanding shares 57,327 67,050 69,226
EARNINGS FROM
CONTINUING OPERATIONS
Basic $ 1.55 2.12 2.29
Diluted $ 1.49 2.01 2.16
8. EMPLOYEES’ RETIREMENT AND DEFINED
CONTRIBUTION PLANS
As of December 31, 1999, substantially all employees
of the Company were covered under a noncontributory
defi ned benefi t pension plan (the Pension Plan). As
of January 1, 2000, the Pension Plan was amended so
that employees no longer earn benefi ts for subsequent
service. Eff ective December 31, 2004, the Barnes &
Noble.com Employees’ Retirement Plan (the B&N.com
Retirement Plan) was merged with the Pension Plan.
Substantially all employees of Barnes & Noble.com were
covered under the B&N.com Retirement Plan. As of July
1, 2000, the B&N.com Retirement Plan was amended so
that employees no longer earn benefi ts for subsequent
service. Subsequent service continues to be the basis for
vesting of benefi ts not yet vested at December 31, 1999
and June 30, 2000 for the Pension Plan and the B&N.
com Retirement Plan, respectively, and the Pension
Plan will continue to hold assets and pay benefi ts. The
actuarial assumptions used to calculate pension costs are
2008 Annual Report 31