Barnes and Noble 2011 Annual Report Download - page 36

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(Thousands of dollars, except per share data)
For the 52 weeks ended April 30, 2011 (fi scal 2011), May 1,
2010 (fi scal 2010), the 13 weeks ended May 2, 2009 (transi-
tion period) and the 52 weeks ended January 31, 2009
(fi scal 2008).
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Business
Barnes & Noble, the nation’s largest bookseller,3 is a lead-
ing content, commerce and technology company providing
customers easy and convenient access to books, magazines,
newspapers and other content across its multi-channel
distribution platform. As of April 30, 2011, the Company
operated 1,341 bookstores in 50 states, including 636
bookstores on college campuses, and one of the Web’s
largest eCommerce sites, which includes the development
of digital content products and software. Given the dynamic
nature of the book industry, the challenges faced by
traditional booksellers, and the robust innovation pipeline
fueling new opportunities in hardware, software and con-
tent creation and delivery, Barnes & Noble is utilizing the
strength of its retail footprint to bolster its leadership in
the sale of books and increase sales growth across multiple
channels.
Of the 1,341 bookstores, 705 operate primarily under the
Barnes & Noble Booksellers trade name. B&N College, a
wholly-owned subsidiary of Barnes & Noble, operates 636
college bookstores at colleges and universities across the
United States. barnesandnoble.com llc (Barnes & Noble.
com) encompasses one of the Web’s largest eCommerce
sites, Barnes & Noble eBookstore, Barnes & Noble eReader
software, and the Company’s devices and other hardware
support. Sterling Publishing Co., Inc. (Sterling or Sterling
Publishing), bolsters the Company as a leader in general
trade book publishing.
The Company’s principal business is the sale of trade books
(generally hardcover and paperback consumer titles), mass
market paperbacks (such as mystery, romance, science
fi ction and other popular fi ction), children’s books, eBooks
and other digital content, NOOK (references to NOOK™
include the Company’s NOOK 1st Edition™, NOOK Wi-Fi
1st Edition™, NOOK Color™ and The All-New NOOK™
eBook Reader devices),4 and related accessories, bargain
books, magazines, gifts, café products and services, educa-
tional toys & games, music and movies direct to customers
through its bookstores or on Barnes & Noble.com. The
Acquisition of B&N College (see Note 12) has allowed the
Company to expand into sales of textbooks and course-
related materials, emblematic apparel and gifts, trade
books, school and dorm supplies, and convenience and café
items on college and university campuses. In fi scal 2011,
B&N College began off ering a textbook rental option to its
customers, and expanded its electronic textbooks and other
course materials through a proprietary digital platform
(NOOK Study™). B&N College off ers its customers a full
suite of textbook options – new, used, digital and rental.
Due to the increased focus on the internet and digital busi-
nesses, the Company performed an evaluation on the eff ect
of its impact on the identifi cation of operating segments.
The assessment considered the way the business is man-
aged (focusing on the fi nancial information distributed)
and the manner in which the chief operating decision
maker interacts with other members of management. As a
result of this assessment, the Company has determined that
it has three operating segments: B&N Retail, B&N College
and B&N.com.
Consolidation
The consolidated fi nancial statements include the accounts
of Barnes & Noble, Inc. and its wholly and majority-owned
subsidiaries. Investments in affi liates in which ownership
interests range from 20% to 50%, are accounted for under
the equity method. All signifi cant intercompany accounts
and transactions have been eliminated in consolidation.
Use of Estimates
In preparing fi nancial statements in conformity with
generally accepted accounting principles, the Company is
required to make estimates and assumptions that aff ect the
reported amounts of assets and liabilities and the disclo-
sure of contingent assets and liabilities at the date of the
fi nancial statements and revenues and expenses during
the reporting period. Actual results could diff er from those
estimates.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3 Based upon sales reported in trade publications and public fi lings.
4 Any reference to NOOK™, NOOK 1st Edition™, NOOK Wi-Fi 1st
Edition™, NOOK Color™, and The All-New NOOK™ includes the
trademark symbol (™) even if a superscript “TM” is not included.
34 Barnes & Noble, Inc.