Barnes and Noble 2013 Annual Report Download - page 64

Booksellers entered into an agreement with MBS Direct,
a division of MBS, pursuant to which the marketplace
program on the Barnes & Noble.com website was made
available on the MBS Direct website. The Company receives
a fee from third party sellers for sales of marketplace items
sold on the MBS Direct website and, upon receipt of such
fee, remits a separate fee to MBS Direct for those sales.
There have been no commissions paid to MBS Direct dur-
ing fiscal 2013. Total outstanding amounts payable to MBS
and MBS Direct for all arrangements net of any amounts
due were $24,860 and $24,025 for fiscal 2013 and fiscal
2012, respectively.
In fiscal 2010, the Company’s wholly owned subsidiary
Barnes & Noble Bookquest LLC (Bookquest) entered into
an agreement with TXTB.com LLC (TXTB), a subsidiary
of MBS, pursuant to which the marketplace program on
the Barnes & Noble.com website was made available on
the TXTB website. In fiscal 2012, Bookquest was merged
into Barnes & Noble.com. Barnes & Noble.com receives a
fee from third party sellers for sales of marketplace items
and, upon receipt of such fee, Barnes & Noble.com remits
a separate fee to TXTB for any marketplace items sold on
the TXTB website. Total commissions paid to TXTB were
$302, $559 and $775 during fiscal 2013, fiscal 2012 and
fiscal 2011, respectively. Outstanding amounts payable to
TXTB were $3, $6 and $8 for fiscal 2013, fiscal 2012 and
fiscal 2011, respectively. In fiscal 2011, Barnes & Noble.com
entered into an agreement with TXTB pursuant to which
Barnes & Noble.com became the exclusive provider of trade
books to TXTB customers through www.textbooks.com.
TXTB receives a commission from Barnes & Noble.com on
each purchase by a TXTB customer. Total commissions paid
to TXTB were $78, $148 and $0 during fiscal 2013, 2012 and
fiscal 2011, respectively. Outstanding amounts payable to
TXTB under this agreement were $1, $1 and $4 for fiscal
2013, fiscal 2012 and fiscal 2011.
In fiscal 2010, 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 $159, $1,015 and $932 during
fiscal 2013, fiscal 2012 and fiscal 2011, 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 specific flight as requested by
the Company, as provided in the FAR.
The Company has leases for two locations for its corporate
offices with related parties: the first location is leased from
an entity in which Leonard Riggio has a majority interest
and expires in 2013; the second location is leased from
an entity in which Leonard Riggio has a minority interest
and expires in 2016. The space was rented at an aggregate
annual rent including real estate taxes of approximately
$5,098, $4,843 and $4,868 during fiscal 2013, fiscal 2012
and fiscal 2011, respectively. The Company leases one
of its B&N College stores from a partnership owned by
Leonard and Stephen Riggio, pursuant to a lease expir-
ing in 2014. Rent of $862, $862 and $862 was paid during
fiscal 2013, fiscal 2012 and fiscal 2011, respectively. The
Company leases an office/warehouse from a partnership
in which Leonard Riggio has a 50% interest, pursuant to a
lease expiring in 2023. The space was rented at an annual
rent of $707, $759 and $763 during fiscal 2013, fiscal 2012
and fiscal 2011, respectively. Net of subtenant income, the
Company paid $275, $376 and $246 during fiscal 2013,
fiscal 2012 and fiscal 2011, respectively.
GameStop Corp. (GameStop), a company in which Leonard
Riggio was a five percent beneficial shareholder until
October 14, 2010 and a member of the Board of Directors
until 2011, operates departments within some of the
Company’s bookstores. GameStop pays a license fee to the
Company in an amount equal to 7% of the gross sales of
such departments, which totaled $989 during fiscal 2011.
GameStop sold new and used video games and consoles on
the Barnes & Noble.com website up until May 1, 2011, when
the agreement between GameStop and Barnes & Noble.com
terminated. Barnes & Noble.com received a commission on
sales made by GameStop. For fiscal 2011, the commission
earned by Barnes & Noble.com was $356. Until June 2005,
GameStop participated in the Company’s workers’ compen-
sation, property and general liability insurance programs.
The costs incurred by the Company under these programs
were allocated to GameStop based upon GameStop’s total
payroll expense, property and equipment, and insur-
ance claim history. GameStop reimbursed the Company
for these services for $51 during fiscal 2011. Although
GameStop secured its own insurance 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.
62 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued