16.

Discontinued Operations of Barnes & Noble Education, Inc.

On August 2, 2015, Barnes & Noble completed the spin-off of Barnes & Noble Education, Inc. (Barnes & Noble Education or B&N Education) from Barnes & Noble into an independent public company (the Spin-Off) and distributed, on a pro rata basis, all of the shares of B&N Education common stock to the Company’s stockholders of record as of July 27, 2015. These Barnes & Noble stockholders of record as of July 27, 2015 received a distribution of 0.632 shares of B&N Education common stock for each share of Barnes & Noble common stock held as of the record date. Immediately following the completion of the Spin-Off, the Company’s stockholders owned 100% of the outstanding shares of common stock of B&N Education. Following the Spin-Off, B&N Education operates as an independent public company and as the parent of Barnes & Noble College, trading on New York Stock Exchange under the ticker symbol “BNED”.

In connection with the separation of B&N Education, the Company and B&N Education entered into a Separation and Distribution Agreement on July 14, 2015 and several other ancillary agreements on August 2, 2015. These agreements govern the relationship between the Company and B&N Education after the separation, allocate between the Company and B&N Education various assets, liabilities, rights and obligations following the separation and describe the Company’s future commitments to provide B&N Education with certain transition services.

This Spin-Off is expected to be a non-taxable event for Barnes & Noble and its shareholders, and Barnes & Noble’s U.S. shareholders (other than those subject to special rules) generally will not recognize gain or loss as a result of the distribution of B&N Education shares.

The Company has recognized the separation of B&N Education in accordance with ASC 205-20, Discontinued Operations. As such, the historical results of Barnes & Noble Education have been adjusted to include pre-spin B&N Education results, separation-related costs and investment banking fees (as they directly related to the Spin-Off) and exclude corporate allocations with B&N Retail, and have been classified as discontinued operations.

The following financial information presents the discontinued operations for fiscal 2016:


	Fiscal 2016
Sales	$	238,983
Cost of sales and occupancy		186,697

Gross profit		52,286
Selling and administrative expenses		94,933
Depreciation and amortization		13,100

Operating loss from discontinued operations		(55,747	)
Interest expense, net and amortization of deferred financing fees		3

Loss before income taxes from discontinued operations		(55,750	)
Income tax benefit		(16,604	)

Net loss from discontinued operations	$	(39,146	)