Barnes and Noble 2015 Annual Report Download - page 51

May 2, 2015 May 3, 2014
Deferred rent $ 94,952 $ 128,280
Microsoft Commercial
Agreement financing
transaction (see Note 11) — 140,714
Tax liabilities and reserves 71,369 51,399
Pension liabilitya (see Note 8) — 11,154
Other 29,981 35,442
Total long-term liabilities $ 196,302 $ 366,989
a Pension liabilities of $14,216 as of May 2, 2015 were reclassified to
short-term as the plan termination is expected to be settled within
12 months.
6. FAIR VALUES OF FINANCIAL INSTRUMENTS
In accordance with ASC , Fair Value Measurements and
Disclosures, the fair value of an asset is considered to be
the price at which the asset could be sold in an orderly
transaction between unrelated knowledgeable and willing
parties. A liability’s fair value is defined as the amount that
would be paid to transfer the liability to a new obligor, not
the amount that would be paid to settle the liability with
the creditor. Assets and liabilities recorded at fair value
are measured using a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value. These
tiers include:
Level  – Observable inputs that reflect quoted prices in
active markets
Level  – Inputs other than quoted prices in active markets
that are either directly or indirectly observable
Level  – Unobservable inputs in which little or no market
data exists, therefore requiring the Company to develop its
own assumptions
The Company’s financial instruments include cash, receiv-
ables, gift cards, accrued liabilities and accounts payable.
The fair values of cash, receivables, accrued liabilities and
accounts payable approximate carrying values because of
the short-term nature of these instruments. The Company
believes that its credit facility approximates fair value since
interest rates are adjusted to reflect current rates.
7. NET EARNINGS (LOSS) PER SHARE
In accordance with ASC --, Share-Based Payment
Arrangements and Participating Securities and the Two-
Class Method, the Company’s unvested restricted shares,
unvested restricted stock units and shares issuable under
the Company’s deferred compensation plan are considered
participating securities. During periods of net income,
the calculation of earnings per share for common stock
are reclassified to exclude the income attributable to the
unvested restricted shares, unvested restricted stock units
and shares issuable under the Company’s deferred com-
pensation plan from the numerator and exclude the dilutive
impact of those shares from the denominator. Diluted
earnings per share for fiscal year  were calculated
using the two-class method for stock options, restricted
stock and restricted stock units and the if-converted
method for the preferred stock.
During periods of net loss, no effect is given to the partici-
pating securities because they do not share in the losses
of the Company. Due to the net loss during fiscal  and
, participating securities in the amounts of ,,
and ,,, respectively, were excluded from the
calculation of loss per share using the two-class method
because the effect would be antidilutive. The Company’s
outstanding dilutive stock options of , and ,, for
fiscal  and , respectively, and accretion/payments
of dividends on preferred shares were also excluded from
the calculation of loss per share using the two-class method
because the effect would be antidilutive.
2015 Annual Report 49