Barnes and Noble 2013 Annual Report Download - page 37

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(Thousands of dollars, except per share data)
For the 52 weeks ended April 27, 2013 (fiscal 2013), April
28, 2012 (fiscal 2012) and April 30, 2011 (fiscal 2011).
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Business
Barnes & Noble, one of the nation’s largest booksellers,3
is a leading 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 27, 2013, the
Company operated 1,361 bookstores in 50 states, including
686 bookstores on college campuses, one of the Web’s larg-
est eCommerce sites and develops digital content products
and software. Given the dynamic nature of the book indus-
try, the challenges faced by traditional booksellers, and
the robust innovation pipeline fueling new opportunities
in hardware, software and content creation and delivery,
Barnes & Noble is utilizing the strength of its retail foot-
print to bolster its leadership and fuel sales growth across
multiple channels.
Of the 1,361 bookstores, 675 operate primarily under the
Barnes & Noble Booksellers® trade name. Barnes & Noble
College Booksellers, LLC (B&N College) operates 686
college bookstores at colleges and universities across the
United States. Barnes & Noble Retail (B&N Retail) oper-
ates the 675 retail bookstores. B&N Retail also includes the
Company’s eCommerce site, and Sterling Publishing Co.,
Inc. (Sterling or Sterling Publishing), a leader in general
trade book publishing. The NOOK segment includes the
Company’s digital business, including the development and
support of the Company’s NOOK® product offerings. The
digital business includes digital content such as eBooks,
digital newsstand, apps, movies and sales of NOOK®
devices and accessories to third party distribution partners,
B&N Retail and B&N College.
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
fiction and other popular fiction), children’s books, eBooks
and other digital content, textbooks and course-related
materials, NOOK®4 and related accessories, bargain books,
magazines, gifts, emblematic apparel and gifts, school and
dorm supplies, café products and services, educational toys
& games, music and movies direct to customers through its
bookstores or on barnesandnoble.com. The Company also
offers a textbook rental option to its customers, electronic
textbooks and other course materials through a proprietary
digital platform (NOOK Study™). The Company offers
its customers a full suite of textbook options—new, used,
digital and rental.
The Company identifies its operating segments based on
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 Company has three operating segments:
B&N Retail, B&N College and NOOK.
Consolidation
The consolidated financial statements include the accounts
of Barnes & Noble, Inc. and its wholly and majority-owned
subsidiaries. Investments in affiliates in which ownership
interests range from 20% to 50%, are accounted for under
the equity method. All significant intercompany accounts
and transactions have been eliminated in consolidation.
Use of Estimates
In preparing financial statements in conformity with
generally accepted accounting principles, the Company is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclo-
sure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents
The Company considers all short-term, highly liquid
instruments purchased with an original maturity of three
months or less to be cash equivalents.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3Based upon sales reported in trade publications and public filings.
4Any reference to NOOK® include the Company’s NOOK 1st Edition™,
NOOK Wi-Fi 1st Edition™, NOOK Color™, NOOK Simple Touch™, NOOK
Tablet™, NOOK Simple Touch with GlowLight™, NOOK® HD and
NOOK® HD+ eReader devices, and each of which include the trademark
symbol (® or ™, as applicable) even if a trademark symbol is not
included.
2013 Annual Report 35