Barnes and Noble 2012 Annual Report Download - page 60

Prior to the Acquisition, the Company licensed the “Barnes
& Noble” name under a royalty-free license agreement
dated February , , as amended, from B&N College.
Barnes & Noble.com licensed the “Barnes & Noble” name
under a royalty-free license agreement, dated October ,
, as amended, between Barnes & Noble.com and B&N
College (the License Agreement). Pursuant to the License
Agreement, Barnes & Noble.com had been granted an
exclusive license to use the “Barnes & Noble” name and
trademark in perpetuity for the purpose of selling books
over the Internet (excluding sales of college textbooks).
Under a separate agreement dated as of January , 
(the Textbook License Agreement), between Barnes &
Noble.com, B&N College and Textbooks.com, Barnes &
Noble.com was granted the right to sell college textbooks
over the Internet using the “Barnes & Noble” name.
Pursuant to the Textbook License Agreement, Barnes
& Noble.com paid Textbooks.com a royalty on revenues
(net of product returns, applicable sales tax and exclud-
ing shipping and handling) realized by Barnes & Noble.
com from the sale of books designated as textbooks.
Royalty expense was , during fi scal  prior to
the Acquisition, under the terms of the Textbook License
Agreement. During fi scal , subsequent to the closing of
the Acquisition, Textbooks.com paid  to B&N College
for funds that were received by Textbooks.com and were
earned by B&N College. In connection with the closing of
the Acquisition, the Company terminated the Textbook
License Agreement and as a result no longer pays a royalty
with respect to online textbook sales.
In fi scal , the Company entered into an Aircraft Time
Sharing Agreement with LR Enterprises Management LLC
(LR Enterprises), which is owned by Leonard Riggio and
Louise Riggio, pursuant to which LR Enterprises granted
the Company the right to use a jet aircraft owned by it on a
time-sharing basis in accordance with, and subject to the
reimbursement of certain operating costs and expenses
as provided in, the Federal Aviation Regulations (FAR).
Such operating costs were ,,  and  during
fi scal , fi scal  and fi scal , respectively. LR
Enterprises is solely responsible for the physical and tech-
nical operation of the aircraft, aircraft maintenance and
the cost of maintaining aircraft liability insurance, other
than insurance obtained for the specifi c fl ight as requested
by the Company, as provided in the FAR. Prior to the
Acquisition, the Company used a jet aircraft owned by B&N
College and paid for the costs and expenses of operating the
aircraft based upon the Company’s usage. Such costs which
included fuel, insurance and other costs were  during
fi scal  prior to the Acquisition, and were included in
the accompanying consolidated statements of operations.
The Company has leases for two locations for its corporate
offi ces with related parties: the fi rst location is leased from
an entity in which Leonard Riggio has a majority interest
and expires in ; the second location is leased from
an entity in which Leonard Riggio has a minority interest
and expires in . The space was rented at an aggregate
annual rent including real estate taxes of approximately
,, , and , during fi scal , fi scal 
and fi scal , respectively.
The Company leases one of its B&N College stores from a
partnership owned by Leonard and Stephen Riggio, pursu-
ant to a lease expiring in . Rent of ,  and 
was paid during fi scal , fi scal  and fi scal  from
the date of the Acquisition, respectively.
The Company leases an offi ce/warehouse from a partner-
ship in which Leonard Riggio has a  interest, pursuant
to a lease expiring in . The space was rented at an
annual rent of ,  and  during fi scal , fi scal
 and fi scal , respectively. Net of subtenant income,
the Company paid ,  and  during fi scal ,
fi scal  and fi scal , respectively.
Prior to the Acquisition, the Company leased retail space
in a building in which B&N College subleased space from
the Company, pursuant to a sublease expiring in .
Pursuant to such sublease, the Company charged B&N
College  for such subleased space and other operating
costs incurred on its behalf during fi scal year  prior
to the Acquisition. The amount paid by B&N College to the
Company exceeded the cost per square foot paid by the
Company to its unaffi liated third-party landlord.
Prior to the Acquisition, the Company reimbursed B&N
College certain operating costs B&N College incurred on
the Company’s behalf. These charges were  during fi scal
 prior to the Acquisition. Prior to the Acquisition,
B&N College purchased inventory, at cost plus an incre-
mental fee, of , from the Company during fi scal
 prior to the Acquisition. Also prior to the Acquisition,
B&N College reimbursed the Company , for fi scal
year  prior to the Acquisition for capital expenditures,
business insurance and other operating costs incurred on
its behalf.
58 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued