Barnes and Noble 2008 Annual Report Download - page 41

property and equipment, and insurance claim history.
GameStop reimbursed the Company for these services
$162, $289 and $838 during fi scal 2008, 2007 and 2006,
respectively. Although GameStop secured its own insur-
ance coverage, costs are continuing to be incurred by the
Company on insurance claims which were made under
its programs prior to June 2005 and any such costs
applicable to insurance claims against GameStop will be
charged to GameStop at the time incurred.
The Company is provided with national freight dis-
tribution, including trucking services by Argix Direct
Inc. (Argix), a company in which a brother of Leonard
and Stephen Riggio owns a 20% interest, pursuant
to a transportation agreement expiring in 2012. The
Company paid Argix $16,981, $18,953 and $20,524 for
such services during fi scal years 2008, 2007 and 2006,
respectively. At the time of the agreement, the cost of
freight delivered to the stores by Argix was comparable
to the prices charged by publishers and the Company’s
other third party freight distributors. However, due to
higher contracted fuel surcharge and transportation
costs, Argix’s rates are now higher than the Company’s
other third party freight distributors. As a result, the
Company amended its existing agreement with Argix
eff ective January 1, 2009. The amendment provides the
Company with a $3,000 annual credit to its freight and
transportation costs for the remaining life of the existing
agreement. Argix also leases offi ce and warehouse space
from the Company in Jamesburg, New Jersey, pursuant
to a lease expiring in 2011. The Company charged Argix
$2,835, $2,642 and $2,005 for such leased space and
other operating costs incurred on its behalf during fi scal
2008, 2007 and 2006, respectively.
The Company uses Source Interlink Companies, Inc.
(Source Interlink) as its primary supplier of music
and DVD/video, as well as magazines and newspapers.
Leonard Riggio is an investor in an investment company
that owns a minority interest in Source Interlink. In
addition, Ronald W. Burkle, who owns a minority inter-
est in the Company, also owns a minority interest in
Source Interlink through his ownership interests in AEC
Associates, LLC. The Company paid Source Interlink
$395,144, $438,159 and $442,685 for merchandise
purchased at market prices during fi scal 2008, 2007
and 2006, respectively. Outstanding amounts payable
to Source Interlink for merchandise purchased were
$53,217, $58,822 and $68,048 as of January 31, 2009,
February 2, 2008 and February 3, 2007, respectively.
The Company uses Digital on Demand as its provider
of music and video database equipment and services.
Leonard Riggio owns a minority interest in Digital on
Demand through the same investment company through
which he owns a minority interest in Source Interlink.
The Company paid Digital on Demand $4,893, $4,396
and $4,705 for music and video database equipment and
services during fi scal 2008, 2007 and 2006, respectively.
18. DIVIDENDS
During fi scal 2008, the Company paid a quarterly cash
dividend of $0.15 per share on March 31, 2008 to stock-
holders of record at the close of business on March 10,
2008. On March 20, 2008, the Company announced that
its Board of Directors has authorized an increase to its
quarterly cash dividend from $0.15 to $0.25 per share,
commencing with the dividend to be paid in June 2008.
The Company paid quarterly cash dividends of $0.25
per share on June 30, 2008 to stockholders of record at
the close of business on June 9, 2008, on September 30,
2008 to stockholders of record at the close of busi-
ness on September 9, 2008, and on December 31, 2008
to stockholders of record at the close of business on
December 10, 2008. The Company also paid a dividend
of $0.25 per share on March 31, 2009 to stockholders of
record at the close of business on March 10, 2009.
During fi scal 2007, the Company paid quarterly cash
dividends of $0.15 per share on March 30, 2007 to
stockholders of record at the close of business on March
9, 2007, on June 29, 2007 to stockholders of record at
the close of business on June 8, 2007, on September 28,
2007 to stockholders of record at the close of busi-
ness on September 7, 2007, and on December 28, 2007
to stockholders of record at the close of business on
December 7, 2007.
19. SUBSEQUENT EVENTS
On March 4, 2009, the Company acquired Fictionwise,
a leader in the e-book marketplace, for $15,700 in
cash. The Company plans to use Fictionwise as part of
its overall digital strategy, which includes the expected
launch of an e-Bookstore later this year. In addition to
the purchase price, the Company will make earn out
payments if certain performance targets are met over the
next two years.
40 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued