Barnes and Noble 2015 Annual Report Download - page 29

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Contractual Obligations
The following table sets forth the Company’s contractual obligations as of May ,  (in millions):
Contractual Obligations Payments Due by Period
Total Less Than 1 Year 1-3 Years 3-5 Years
More Than 5
Years
Operating lease obligationsa$ 1,941.4 $ 438.3 $ 721.6 $ 445.7 $ 335.8
Capital lease obligations 0.3 0.2 0.1 — —
Purchase obligationsb146.7 135.1 11.3 0.3 —
Interest obligationsc5.05.0———
Other long-term liabilities reflected on
the Company’s balance sheet under U.S.
GAAPd—————
Total $ 2,093.4 $ 578.6 $ 733.0 $ 446.0 $ 335.8
a Excludes obligations under store leases for insurance, taxes and other maintenance costs, which obligations totaled approximately 14% of the mini-
mum rent payments under those leases.
b Includes hardware and software maintenance contracts and inventory purchase commitments.
c Represents commitment fees related to the Company’s Credit Facility.
d Excludes $18.4 million of unrecognized tax benefits for which the Company cannot make a reasonably reliable estimate of the amount and period of
payment. See Note 9 to the Notes to Consolidated Financial Statements.
See also Note  to the Notes to Consolidated Financial Statements for information concerning the Company’s pension and
postretirement plans.
Off-Balance Sheet Arrangements
As of May , , the Company had no off-balance sheet arrangements as defined in Item  of Regulation S-K.
Impact of Inflation
The Company does not believe that inflation has had a
material effect on its net sales or results of operations.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
See Note  to the Notes to Consolidated Financial
Statements.
CRITICAL ACCOUNTING POLICIES
The “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” section of this
report discusses the Company’s consolidated financial
statements, which have been prepared in accordance with
accounting principles generally accepted in the United
States. The preparation of these financial statements
requires management to make estimates and assumptions
in certain circumstances that affect amounts reported in
the accompanying consolidated financial statements and
related footnotes. In preparing these financial statements,
management has made its best estimates and judgments
with respect to certain amounts included in the financial
statements, giving due consideration to materiality. The
Company does not believe there is a great likelihood that
materially different amounts would be reported related to
the accounting policies described below. However, applica-
tion of these accounting policies involves the exercise of
judgment and use of assumptions as to future uncertain-
ties and, as a result, actual results could differ from these
estimates.
Revenue Recognition
Revenue from sales of the Company’s products is recog-
nized at the time of sale or shipment, other than those
with multiple elements and Free On Board (FOB) destina-
tion point shipping terms. Certain of the Company sales
agreements with its distribution partners contain rights of
inspection or acceptance provisions as is standard in the
Company’s industry. The Company accrues for estimated
sales returns in the period in which the related revenue
is recognized based on historical experience and industry
standards. ECommerce revenue from sales of products
ordered through the Company’s websites is recognized
2015 Annual Report 27