🔝 Combien ça coute – Copeaux 10-K et formulaire NOBLE INC: 28 avril

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ÉTATS-UNIS

Securities and Exchange Commission

Washington, D.C. 20549

FORMULAIRE
K-10

RAPPORT ANNUEL CONFORMÉMENT À L'ARTICLE 13 OU À L'ARTICLE 15 D) DE LA SECURITIES ACT 1934

L'exercice terminé le 28 avril 2018

OU

RAPPORT INTERMÉDIAIRE VISÉ À L'ARTICLE 13 OU À LA SECTION D (D) DE LA SECURITIES EXCHANGE ACT OF 1934

Pour la période de transition
à lui

Dossier de la Commission N ° 1-12302

Barnes & Noble, Inc.

(Le nom exact du déclarant selon la Charte)

Delaware 06-1196501

(État ou autre juridiction)

entreprise ou organisation)

(I. R. employeur

Numéro d'identification.)

122 Fifth Avenue, New York, NY 10011
(Adresse des principaux bureaux exécutifs) (Zip)

Numéro de téléphone du titulaire, y compris l'indicatif régional: (212)
633-3300

Titres enregistrés en vertu de l'article 12 (b) de la Loi:

Adresse de la classe

Le nom de la bourse sur laquelle
inscrit

Actions ordinaires à 0,001 $ par action

Bourse de New York

Titres enregistrés en vertu de l'article 12 g) de la loi: aucun

Cochez si l’inscrit est un émetteur expérimenté bien connu au sens de la règle 405 des titres.
Loi. Oui ☐ non ☒

Cochez si le titulaire est coché
aucun rapport n'est requis en vertu de l'article 13 ou de l'article 15 d) de la loi. Oui ☐ non ☒

À l'aide d'une coche, indiquez si le déclarant (1) a soumis tous les rapports devant être déposés au cours des 12 derniers mois en vertu de l'article 13 ou de l'article 15 (d) du Securities Exchange Act 1934 (ou
le délai plus court dans lequel le déclarant était tenu de soumettre ces rapports) et (2) il a été soumis à de telles obligations de notification au cours des 90 derniers jours. Oui ☒ Non ☐

Utilisez une coche pour indiquer si le titulaire a soumis et publié sur le site Web de l'entreprise tous interactifs
La soumission et la publication du dossier sont obligatoires en vertu de la règle 405 du règlement d'exécution STREET (§ 232 405 du présent chapitre) au cours des 12 derniers mois (ou aussi court que le déclarant a été requis)
soumettre et soumettre ces fichiers). Oui ☒ Non ☐

chèque
désignation si la divulgation des auteurs de l'infraction conformément à l'article 405 du règlement (CE) no 405/2004 S-R (L'article 229 405 de ce chapitre) n'est pas répertorié ici et, à la connaissance des déclarants, il ne sera pas inclus,
dans la procuration finale ou les déclarations d’information, conformément à la partie III du présent formulaire. section avec référence K-10 ou toute modification du formulaire 10 mar ☐

Utilisez une coche pour indiquer que le déclarant est à accélération élevée, accélérée, un
pas accéléré gestionnaire de fichiers, une petite entreprise déclarante ou une entreprise en croissance émergente. Voir la définition de «grand accélérateur», «accélérateur», «petite entreprise déclarante».
et «société de croissance émergente» dans Rule 12b-2 Loi sur la Bourse.

Grand accélérateur accéléré ☐ Filer accéléré ☒ Filer non accéléré ☐ Petite entreprise déclarante ☐
(Ne vérifiez pas que
petits rapports
entreprise)
Entreprise en croissance ☐

Pour une entreprise en croissance émergente, cochez cette case si le déclarant a décidé de ne pas utiliser la transition prolongée
la période de conformité avec les normes de comptabilité financière nouvelles ou révisées exigées par l'article 13 (a) de la Loi sur l'échange. ☐

Utilisez une coche pour indiquer si le déclarant est une société écran (comme défini dans la règle 3) 12b-2 la bourse
Loi). Oui ☐ non ☒

Vote et valeur marchande globale
sans droit de vote stock non associé la personne inscrite était d'environ 428 729 814 $ sur la base du cours de clôture de 7,25 $ par action ordinaire
La Bourse de New York le 28 octobre 2017.

72 793 646 actions ordinaires à 0,001 $ par action au 31 mai 2018,
les actions en circulation étaient 140 840 actions restreintes non administrées avec droit de vote détenues par les membres du conseil d'administration et les employés de la société.

DOCUMENTS DE RÉFÉRENCE

Des parties de la procuration du déclarant à l'assemblée générale annuelle de 2018 sont incorporées par renvoi à l'annexe III. Région.

La partie du rapport annuel du déclarant pour l'exercice clos le 28 avril 2018 a été intégrée comme référence à l'annexe II. Et le IV. Région.


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DÉCLARATIONS PRÉVISIONNELLES

Ceci est le rapport annuel sur le formulaire K-10 contient des déclarations prospectives (au sens du rapport)
(Article 27A du Securities Act de 1933, tel que modifié, et article 21E du Securities Exchange Act de 1934, tel que modifié), et informations relatives à Barnes and Noble,
Hypothèses et informations actuellement disponibles auprès de la direction de Barnes & Noble et Barnes & Noble. Dans cette communication, les mots "anticiper", "croire", "estimer" sont des mots
"Waiting", "Intends", "Plan", "Will", "Forecasts", "Forecasts" et similaires tels qu'ils s'appliquent à Barnes and Noble ou à la direction de Barnes & Noble,
identifier les déclarations prospectives.

Ces déclarations reflètent la position actuelle de Barnes & Noble au
événements futurs dont l'issue est soumise à certains risques, y compris, mais sans s'y limiter, l'environnement économique général et les habitudes de dépenses des consommateurs, la baisse de la demande des consommateurs pour les produits Barnes & Noble, la faible croissance ou le déclin
les ventes et le bénéfice net en raison de divers facteurs, y compris les fermetures de magasins, les coûts supérieurs ou supérieurs aux prévisions, y compris les fermetures d'entreprises, les délocalisations, l'occupation (y compris dans le cadre des renouvellements de baux) et les coûts de main-d'œuvre,
les effets de la concurrence, le risque d'accès insuffisant au financement pour mener à bien les futures initiatives commerciales, les risques liés à la protection des données et à la sécurité de l'information, les risques liés à la chaîne d'approvisionnement de Barnes & Noble, notamment:
retards et perturbations potentiels, et augmentation des frais d'expédition, divers risques associés aux activités numériques, y compris la perte potentielle de clients, la perte de ventes de contenu numérique, les risques et les coûts associés aux efforts continus
rationaliser les activités numériques, les risques associés au commerce électronique, y compris la perte potentielle de clients du commerce électronique et la baisse des ventes du commerce électronique, le risque que les prévisions financières et opérationnelles et les prévisions ne se matérialisent pas,
se conformer aux initiatives de Barnes & Noble, y compris, mais sans s'y limiter, les nouveaux concepts commerciaux et initiatives de commerce électronique, les résultats ou effets négatifs inattendus d'un litige et la violation potentielle de Barnes & Noble
propriété intellectuelle de tiers et de tiers détenus par Barnes & Noble, et d'autres facteurs, y compris ceux énoncés à la section 1A. («Facteurs de risque») et Barnes &
Autres soumissions ultérieures de Noble à la Securities and Exchange Commission (SEC).

Si vous en êtes un
la plupart de ces risques ou incertitudes se matérialisent, ou si les hypothèses sous-jacentes s'avèrent incorrectes, les résultats réels ou les résultats réels peuvent différer sensiblement de ceux attendus, estimés, estimés, attendus, planifiés ou planifiés. plus tard
Les déclarations prospectives écrites et orales attribuables à Barnes & Noble ou aux personnes agissant en son nom sont expressément traitées comme une mesure de précaution expresse dans cet article. Barnes & Noble ne prend aucun engagement
l'obligation de mettre à jour ou d'examiner publiquement tout énoncé prospectif, que ce soit à la suite de nouvelles informations, d'événements futurs ou autrement après la date du formulaire 10 mar

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PARTIE I

général

Barnes & Noble, Inc. (Barnes & Noble ou Company), l'une des plus grandes librairies du pays,1 offre aux clients une expérience unique grâce à ses canaux multicanaux
plate-forme de distribution. Au 28 avril 2018, la société exploite 630 librairies dans 50 États, gère un site de commerce électronique, a développé des produits de lecture numérique et exploite NOOK, l'une des plus grandes librairies numériques. C'est Barnes & Noble
tirant parti de son empreinte commerciale, se connectant à ses activités en ligne et numériques, il offre à ses clients une expérience omnicanal et remplit son engagement à offrir n'importe quel livre à tout moment, n'importe où, dans n'importe quel format.

Barnes & Noble Retail (B&N Retail) exploite 630 librairies de vente au détail, principalement
Barnes et libraires nobles® est un nom commercial et inclut le site de commerce électronique de l'entreprise. B&N Retail
comprend Sterling Publishing Co., Inc. (Sterling ou Sterling Publishing), éditeur commercial général. Le segment NOOK représente l'activité numérique de l'entreprise proposant des livres et des magazines numériques à la vente et à la consommation
en ligne, NOOK®
2 scanners, comarqué ZUG® tablettes et logiciels de lecture pour iOS, Android et Windows. 28 avril 2018 Employé de l'entreprise
environ 23 000 employés (8 000 à temps plein et 15 000 à temps partiel).

L'entreprise
l'activité principale est la vente de livres commerciaux (généralement des titres à couverture rigide et de poche), des rachats sur le marché de masse (tels que mystère, romance, science-fiction et autres fictions populaires), des livres pour enfants, des livres électroniques et d'autres contenus numériques, NOOK.®
et accessoires connexes, livres bon marché, magazines, cadeaux, produits et services de café, jouets éducatifs et
jeux, musique et films directement aux clients dans les librairies ou sur www.barnesandnoble.com. L'entreprise propose à ses clients une option de manuel complet (neuf, d'occasion, numérique et emprunté).

Barnes & Noble a enregistré une baisse de ses ventes, principalement en raison d'une baisse des ventes. L'entreprise a pu le faire
il a compensé une partie de la baisse du trafic grâce aux efforts visant à augmenter la conversion grâce à un engagement accru des clients. De plus, l'entreprise a pu atténuer l'impact d'une baisse des ventes sur les niveaux de profit en réduisant les coûts. Jusqu'au
La société estime avoir perdu sa part en raison de ses récentes ventes et voit des opportunités dans un secteur plus stable.

Afin d'améliorer sa performance, la Société a lancé une étape stratégique. Le plan stratégique à long terme de la société se concentre sur le renforcement des activités principales en augmentant la valeur client
proposition; l'amélioration de la rentabilité grâce à un programme agressif de gestion des coûts utilisé pour financer les initiatives de croissance; accélérer la mise en œuvre par la simplification; et l'innovation future qui met l'entreprise en position
croissance à long terme.

Pour renforcer son cœur de métier, l'entreprise améliore cette proposition de valeur client
un mélange de marchandises, améliorant votre expérience d'achat globale, ajoutant de la valeur à votre programme d'adhésion et améliorant les capacités omnicanales. L'entreprise exploite la puissance de la marque Barnes & Noble, elle le sait
libraires, une vaste sélection de livres et une empreinte commerciale pour attirer les clients sur tous les canaux et augmenter les ventes.

1 Basé sur les ventes rapportées dans les publications commerciales et les annonces publiques.
2

Toute référence à un
ZUG® contenir le NOOK de l'entreprise® Tablette, Samsung Galaxy Tab® la
ZUG®.
Samsung Galaxy Tab® S2 NOOK®. Samsung Galaxy Tab® NOOK® et NOOK
luminescence
TM 3 outils, qui comprennent tous un
symbole de la marque (®
ou ™, le cas échéant), même s'il ne contient pas de marque.

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Les initiatives de vente sont conçues pour augmenter l'impact des activités promotionnelles,
rétrécir la gamme de produits, améliorer la productivité des SKU, améliorer les processus de gestion des stocks, tester les modifications apportées aux agencements de magasins existants et remercier les unités commerciales individuelles du magasin. De plus, la Société a créé une nouvelle entreprise
une équipe de développement qui présente de nouvelles catégories d'entreprises qui complètent les entreprises existantes. La société estime qu’il est possible d’accroître la transformation grâce à l’engagement accru des clients, à la navigation et
découverte dans toute l'entreprise, y compris une organisation du livre conviviale et intuitive, et des étiquettes améliorées pour une navigation plus facile dans et entre les départements.

en stock les événements augmentent également le trafic, renforçant la position de Barnes & Noble, où
les clients peuvent se rencontrer, parcourir et découvrir. La société utilise également les médias sociaux, où les libraires communiquent des événements, des promotions et des offres de nouveaux produits avec les clients localement pour augmenter le trafic.

Le programme d'adhésion de la Société fournit des informations et des informations précieuses à la Société au sein de sa clientèle, lui permettant de:
pour mieux comprendre et vendre à nos clients. Les membres sont plus productifs que pas membres, car ils dépensent plus et visitent plus souvent. L'entreprise continue de tester des programmes pour augmenter les ventes des membres et des membres
pas membres, augmenter l'adhésion, améliorer la perception des prix et améliorer la proposition de valeur globale du client.

La Société se concentre sur la simplification dans toute l'organisation pour créer de l'efficacité et investir des ressources pour soutenir la croissance des ventes. La Société s'est également engagée à faire évoluer les coûts de manière appropriée
structure. Chez B&N Retail, la société introduit un nouveau modèle d'effectif pour ses magasins, ce qui a entraîné la cessation de certaines situations commerciales. Le nouveau modèle permet aux magasins de définir les employés selon les besoins de l'entreprise,
augmente la productivité de l'entreprise et rationalise les opérations commerciales. Chez NOOK, la société a quitté non-core les entreprises externalisées et certaines fonctions. NOOK devrait continuer
recalibrage sa structure de coûts est proportionnelle aux ventes, réduisant encore les pertes.

En plus des initiatives axées sur la croissance des ventes par le biais de sa base commerciale existante, la Société propose des innovations pour l'avenir et
devrait ouvrir des magasins prototypes plus petits et nouvellement conçus plus tard cette année, ce qui, selon lui, pourrait stimuler la croissance des ventes à l'avenir. La société a créé un processus de pipeline Test & Learn grâce auquel elle a effectué un certain nombre de nouveaux tests
initiatives visant à améliorer les performances futures.

L'entreprise a été fondée en 1986 au Delaware.

segments

L'entreprise
Identifier ses segments opérationnels en fonction de la manière dont l'entreprise est gérée (en se concentrant sur l'information financière distribuée) et de la manière dont le principal décideur opérationnel interagit avec les autres dirigeants et prend des décisions
sur l'allocation des ressources. Les deux secteurs opérationnels de la société sont B&N Retail et NOOK.

B&N Retail

Ce segment comprend 630 librairies au 28 avril 2018, principalement sous Barnes & Noble
Le nom commercial des libraires. Ces magasins Barnes & Noble offrent généralement un titre commercial complet, un café et des cours pour mineurs, des jouets et des jeux, des DVD, de la musique et du vinyle, des cadeaux, des magazines, des articles moins chers.
produits et un NOOK séparé® région. Les magasins ont également un calendrier des événements en cours, y compris les auteurs
apparitions et activités pour enfants. Le segment B&N Retail comprend également le site Web de commerce électronique de la société (www.barnesandnoble.com) et les activités d'édition de Sterling Publishing.

La taille des magasins Barnes & Noble varie de 3 000 à 60 000 pieds carrés, selon la taille du marché, et la taille moyenne des entreprises
taille 26 000 pieds carrés. Au cours de l'exercice 2018, l'entreprise disposera d'env. Diminution de 135 000 m² de la surface commerciale de Barnes & Noble, portant la surface totale à 16,6 millions de m², en baisse de 0,8% net
2017e

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La Société estime qu'il s'agit d'un élément clé contribuant au succès de B&N Retail
en ligne:

Proximité avec les clients. La stratégie de la société consistait à accroître sa part du marché du livre de consommation,
et d'augmenter la taille du marché grâce à une stratégie de regroupement des marchés. Au 28 avril 2018, Barnes & Noble comptera 161 magasins dans 210 marchés désignés. Sur les 161 marchés sur 68, la société
une boutique Barnes & Noble. La Société estime que la proximité des librairies avec les clients renforce sa position sur le marché et ajoute de la valeur à sa marque. La plupart des magasins Barnes & Noble sont situés dans des zones très fréquentées
un accès pratique aux principales autoroutes commerciales et un grand parking. La plupart des magasins proposent des horaires d'achat plus longs sept jours par semaine.

Beaucoup d'adresses. Tous les magasins Barnes & Noble proposent une authentique sélection de livres, de 19 000 à 143 000 titres. La gamme complète d'adresses est diversifiée et diversifiée
reflète les intérêts locaux, les titres régionaux et le travail des auteurs. Les meilleures ventes représentent généralement environ 4 à 6% des ventes des magasins Barnes & Noble. Il complète ce vaste
localement Tous les magasins Barnes & Noble permettent aux clients d'accéder aux millions de livres disponibles aux acheteurs en ligne sur www.barnesandnoble.com et offrent la possibilité de soumettre le livre.
expédié au magasin ou directement au client. De plus, le site Web permet aux clients d'acheter plus de trois millions de livres, journaux et magazines. La société estime qu’elle dispose d’un vaste choix, y compris de nombreux autres difficile à trouver construit des titres, augmente la fidélité des clients.

Planification d'entreprise et humeur. De nombreux magasins Barnes & Noble créent une atmosphère confortable avec un grand espace public, un
un café servant des sandwichs, des jus et des pâtisseries, y compris des toilettes publiques. Les cafés, pour lesquels Starbucks Corporation est le seul fournisseur de produits à base de café, renforcent l'image des magasins en tant que réunion communautaire
lieu. En outre, la société continuera d'étendre et de lancer de nouvelles gammes de produits, telles que des cadeaux pour les propriétaires et le programme de formation B&N, fournissant des outils pédagogiques aux enseignants, aux bibliothécaires et aux parents. Ces offres et services sont là
contribué à la mise en place d'une institution à proximité de nombreux commerces.

ZUG® Démonstrations. La société a utilisé les librairies traditionnelles pour promouvoir NOOK® dans les librairies. Les clients peuvent voir, ressentir et expérimenter avec NOOK®, parlez à des libraires avertis et pariez pré- et après-vente
service client dans les librairies de l'entreprise. L'entreprise propose NOOK® les propriétaires sont libres NOOK® assistance dans toutes les librairies de détail, et gratuit Wi-Fi
connectivité pour profiter de Read in Store ™ pour lire NOOK
Books ™ gratuitement dans le magasin. Ces appareils reconnus qui sont amusants, facile à utiliser et une expérience de lecture immersive, y compris NOOK® Tablette, Samsung Galaxy Tab®
NOOK®, Samsung Galaxy Tab® S2 NOOK®, Samsung Galaxy Tab® NOOK® et les appareils NOOK GlowLight ™ 3. la
ZUG® les actifs ont ouvert de nouveaux marchés
ZUG®– accessoires connexes tels que les étagères, les couvercles, les lampes et autres articles.

Jouets éducatifs & Jeux. Barnes et le Département des jouets et jeux éducatifs
Noble offre aux parents et aux donateurs le meilleur programme d'études en classe au monde, unique au monde. Avec une sélection pédagogique exceptionnelle, les clients peuvent compter sur Barnes & Noble pour les jeux les plus recherchés
saisons. Que vos clients naviguent sur Science & Tech, Arts & Crafts ou Kids Games & Puzzles, il y a toujours quelque chose de nouveau à découvrir. Chez Barnes & Noble, les clients peuvent acheter de trois manières différentes:
par marque, catégorie et âge. Avec l'introduction de marques performantes telles que LEGO, Playmobil et Fisher-Price, ainsi que des personnages préférés tels que Thomas the Tank Engine, Hatchimals, Paw Patrol et LOL Dolls, l'entreprise est devenue une destination pour les enfants.
et les taxes sur les cadeaux dans tout le pays.

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Jeux, puzzles, tendance & Collections. Barnes &
Noble continue de se concentrer sur les jeux et les puzzles, avec une segmentation des ventes réfléchie et délibérée. Puzzles, jeux familiaux, jeux de stratégie, jeux de société, jeux de cartes et esprit, jeux de mémoire et de logique,
Barnes & Noble propose des produits de jeu qui permettent aux clients de s'immerger dans le jeu dynamique. Dans le monde en constante évolution de la culture pop, Barnes & Noble est fier d'offrir des produits tendance à ses fans
à travers une collection inspirée des produits de divertissement les plus en vogue présentant les dernières tendances du monde entier et les franchises de livres les plus acclamées de l'entreprise.

Musique et films & Départements TV. Il y a de la musique et de la musique dans de nombreux magasins Barnes & Noble
Services de cinéma et de télévision proposant des CD, des vinyles, des DVD et Blu Ray disques. Ces classes ont une taille d'environ 300 à 8 000 pieds carrés et ont généralement environ 10 000 inventaires
titres. La société possède des DVD et des DVD Blu Ray La sélection se concentre sur les films actuels et classiques, les documentaires, les titres de fitness et d'entraînement, les séries et films télévisés britanniques ainsi que les films étrangers. Sélection de musique
adapté aux besoins des clients de l'entreprise, en se concentrant sur la musique classique, le jazz, la pop rock et les airs de spectacle. La société propose également une large sélection de titres en vinyle disponibles dans tous les magasins ainsi que des tourne-disques.

Prix ​​réduits. Les magasins Barnes & Noble utilisent une stratégie de réduction agressive à l'échelle nationale et proposent des offres spéciales
promotions tout au long de l'année. Le programme d'adhésion Barnes & Noble offre aux membres des remises plus importantes et d'autres avantages sur les produits et services, ainsi que des offres et promotions exclusives par e-mail ou par courrier direct. L'entreprise
Www.barnesandnoble.com utilise également un modèle compétitif qui comprend l'adhésion et pas membres et permet à l'entreprise d'offrir une meilleure valeur
clients. Le programme Barnes & Noble Kids Club offre aux participants des récompenses gratuites et des offres spéciales et invite les enfants à célébrer leur anniversaire dans les librairies de détail.

Développement des entreprises communautaires. Divers événements nationaux et locaux ont lieu dans les librairies de vente au détail de l'entreprise
les nombreux produits et services qu'elle propose. Chaque magasin planifie son propre calendrier d'événements communautaires, y compris des apparitions d'auteurs, des histoires pour enfants, de la poésie et des groupes de discussion sur les livres. De plus, la société exploite plusieurs hôtes
des campagnes sur le thème national autour de sujets ou de publics tels que le National Book Club, Summer Reading, Favorite Teacher Essay Contest, Teacher Evaluation Days et le Holiday Book Drive annuel, qui fournit des livres pour les enfants vulnérables
collectivités desservies par des magasins. Ces campagnes augmentent le trafic et les ventes et renforcent encore Barnes & Noble en tant que centre communautaire.

Grâce au programme Bookfair, l'entreprise offre des écoles et des opportunités de collecte de fonds locales à but non lucratif les organismes artistiques et d'alphabétisation;
Programme d'emballage-cadeau des Fêtes qui permet à but non lucratif pour gagner en visibilité et collecter des fonds tout en emballant des cadeaux dans les magasins. La société estime qu'elle a des programmes de développement des affaires communautaires
encourager la fidélité des clients, stimuler les ventes et le trafic vers votre entreprise, et fournir une publicité et des médias positifs.

Ventes et marketing. L'entreprise doit avoir une stratégie marketing pour les activités de Barnes & Noble
une librairie communautaire authentique avec une large sélection de titres, y compris une grande sélection de petits éditeurs indépendants et la presse universitaire. Chaque magasin Barnes & Noble en a un
une large sélection de livres de 19 000 à 143 000 titres uniques, dont environ 24 000 titres sont partagés par pratiquement tous les magasins. Chaque grand magasin a été conçu pour refléter le style de vie et l'intérêt des consommateurs de la région.

La fiche produit, la base de données brevetée de gestion des stocks de l'entreprise, contient environ 19,6 millions d'adresses. Comprend
compte environ 7,2 millions d'adresses actives et fournit une plage d'adresses complète pour tous les magasins. En améliorant le système de remplissage de fret existant de la société, le Product Master vous permet d'atteindre un niveau supérieur de la société en stock positions et une meilleure productivité au niveau de la librairie grâce à l'efficacité de l'inclusion, des services de paiement et du traitement des remboursements. Il complète ce vaste localement
Tous les magasins Barnes & Noble permettent aux clients d'accéder aux millions de livres disponibles aux acheteurs en ligne sur www.barnesandnoble.com, avec la possibilité d'envoyer le livre au magasin ou de l'expédier directement à l'acheteur.

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La Société a une stratégie de marketing e-commerce multicanal
installe divers programmes de vente et activités promotionnelles pour générer du trafic vers vos magasins et votre site Web. Le programme de commerce électronique se concentre sur le site Web de l'entreprise, www.barnesandnoble.com. Le site Web sert à la fois
société directement à la maison ainsi qu'un important canal de diffusion et support publicitaire pour la marque Barnes & Noble. Par exemple,
www.barnesandnoble.com Web Store Searcher atteint des millions de visites de clients chaque année avec des heures d'ouverture, des instructions, des informations sur les événements de copyright et plus encore en stock activités. De même, dans
Boutiques Barnes and Noble, NOOK® les clients ont un accès gratuit Wi-Fi
connectivité, profitez de la fonction Read In Store ™ et parcourez gratuitement de nombreux livres complets.

La société a introduit un
nombre de nouveaux services de site Web pour améliorer l'expérience globale des utilisateurs. BN.com est un élément important de la stratégie multicanal de l'entreprise et estime que la plateforme lui permettra de devenir plus compétitive à long terme.
marché.

Barnes & Noble MasterCard est un autre exemple d'initiative multicanal®, un co-marque une carte de crédit émise par Barclaycard. Les membres de la carte gagnent 5%
achats dans n'importe quel magasin Barnes & Noble ou en ligne sur www.barnesandnoble.com. Gagnez des points pour chaque dollar que vous dépensez sur des achats où MasterCard est acceptée (sauf les achats Barnes et Noble); quand ils ont atteint 2500 points,
ils recherchent automatiquement une carte-cadeau Barnes & Noble de 25 $. Les clients peuvent s'inscrire dans n'importe quel magasin B&N ou en ligne sur BN.com. Une fois approuvé, vous recevrez un crédit de découvert de 5% avec votre nouveau compte lorsque vous achetez B&N, comme
et une carte-cadeau Barnes & Noble de 25 $ après avoir utilisé votre compte pour la première fois.

La Société considère son site Internet
il complète vos librairies à bien des égards. Non seulement il sert d'outil de marketing, mais il offre à ses clients des alternatives d'achat pratiques.

Emplacements et propriétés de stockage. L'équipe immobilière expérimentée de la société sélectionne les emplacements des nouveaux magasins Barnes & Noble après un examen complet des données démographiques et d'autres informations
a piaci potenciállal, a könyvesbolt láthatóságával és elérhetőségével, a rendelkezésre álló parkolással, a környező vállalkozásokkal, a kompatibilis közeli bérlőkkel, a versennyel és a többi Barnes & Noble üzlet helyével kapcsolatos információk. A legtöbb üzlet Szlovéniában található
jól látható területek a fő forgalmi folyosókkal szomszédos sztriptíz bevásárlóközpontokban, szabadon álló épületekben és regionális bevásárlóközpontokban. Az ingatlanszemélyzet továbbra is a lízing újratárgyalására koncentrál, amint lejár.

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Tartalomjegyzék

A B&N Retail szegmens elsősorban 630 könyvesbolttal rendelkezik 2018. április 28-án
a Barnes & Noble Booksellers márkanév alatt. Az alábbiakban felsoroljuk az egyes államokban található Barnes & Noble üzletek számát 2018. április 28-ig:

ÁLLAPOT

SZÁM

üzletek

ÁLLAPOT

SZÁM

üzletek

Alabama 7 Montana 4
Alaszka 2 Nebraska 4
Arizona 15 Nevada 4
Arkansas 5 New Hampshire 4
Californie 69 New Jersey 23
Colorado 15 Új-Mexikó 3
Connecticut 12 New York 38
Delaware 2 Észak-Karolina 21
Florida 39 Észak-Dakota 3
Grúzia 19 Ohio 18
Hawaii 2 Oklahoma 5
Idaho 3 Oregon 7
Illinois 26 Pennsylvania 26
Indiana 12 Rhode Island 3
Iowa 7 dél Karolina 10
Kansas 4 South Dakota 1
Kentucky 7 Tennessee 8
Louisiana 7 Texas 52
Maine 1 Utah 10
Maryland 11 Vermont 1
Massachusetts 17 Virginia 25
Michigan 18 Washington 17
Minnesota 16 Nyugat-Virginia 1
Mississippi 3 Wisconsin 11
Missouri 11 Wyoming 1

Sterling Publishing

A Sterling Publishing a nem fikció kereskedelmi címek. Az 1949-ben alapított Sterling széles skáláját publikálja
nem fikció illusztrált könyvek és készletek különféle lenyomatokkal, olyan kategóriákban, mint egészség és wellness, zene és népkultúra, étel és bor, kézművesség, rejtvények és
játékok, történelem és aktuális események, valamint egy nagy gyerek vonal. A Sterlingnek szilárd háttérlistával és robosztus értékű kiadói programjával kb. 15 000 nyomtatott könyv és e-könyv címelapja van. Ezen kívül Sterling
mintegy 1300 címet terjeszt az ügyfélkiadók nevében.

Tevékenységek

A Társaság menedzsment csapatokat korszerűsített kiskereskedelmi üzleteiben, ideértve az ingatlan-, árukereskedelmi és üzletviteli üzleteket is.
A terepi menedzsment magában foglalja a regionális alelnököket és a kerületi vezetőket, akik több üzlethelyet felügyelnek.

A fiskális időszakban
2018-ban a Társaság új munkaerő-modellt vezet be kiskereskedelmi üzleteiben, amelynek eredményeként bizonyos üzlethelyzetek megszűntek. Az új modell lehetővé teszi az üzletek számára, hogy az alkalmazottak igényeinek megfelelően felfelé vagy lefelé igazítsák az üzletet, növeljék az üzletek termelékenységét
és korszerűsíti az áruházműveleteket.

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Tartalomjegyzék

A Barnes & Noble menedzsment csapatot tapasztalt menedzsment vezet mindkettőben
hagyományos termékvonalak és a digitális e-kereskedelem területén. A Barnes & Noble vezetõi csapat magasan képzett szakembereket foglalkoztat, mind média, mind ellátási lánc menedzsment ismeretekkel. Ez a kombináció biztosítja a pozitív vásárlót
tapasztalat, függetlenül attól, hogy az ügyfél a fizikai vagy a digitális terméket preferálja-e.

Minden Barnes és nemes
Az áruház általában üzletvezetőt, egy asszisztens üzletvezetőt, két értékesítési és készletgazdálkodót, egy kávézóvezetőt és átlagosan 27 könyvkereskedőt alkalmaz (teljes munkaidőben és részmunkaidőben kombinálva). Számos Barnes és Noble üzlet szintén foglalkoztat
teljes munkaidős közösségi üzleti fejlesztési menedzser. A nagy könyvkereskedői bázis tapasztalt alkalmazottakat kínál a társaság számára az új vezetői pozíciók betöltésére a társaság Barnes & Noble üzleteiben. A Társaság arra számít, hogy a
az üzletek üzemeltetéséhez szükséges személyzet jelentős része továbbra is a meglévő tevékenységeiből fog származni.

Field management for all of the Company’s bookstores, including regional vice presidents, district managers and store managers, participate in an annual incentive program tied to store sales and
profit goals (for regional vice presidents) as well as execution of certain retail initiatives. The Company believes that the compensation of its field management is competitive with that offered by other specialty retailers of comparable size.

Barnes & Noble has in-store training programs providing specific information
needed for success at each level, beginning with the entry-level positions of bookseller. District managers participate in annual training and merchandising conferences. Store managers are generally responsible for training other booksellers and
employees in accordance with detailed procedures and guidelines prescribed by the Company utilizing a blended learning approach, including on-the-job training,
eLearning, facilitator-led training and training aids available at each bookstore.

Purchasing

Barnes & Noble’s buyers negotiate costs on select items, marketing funds, promotional discounts,
cooperative advertising and showroom allowances with publishers and other suppliers for www.barnesandnoble.com and all of the Company’s bookstores. The Company has buyers who specialize in customizing inventory for bookselling in stores and
online. Store inventories are further customized by store managers, who may respond to local demand by purchasing a limited amount of fast-selling titles through a nationwide wholesaling network, including the Company’s distribution centers.

The Company’s B&N Retail segment purchases physical books on a regular basis from over 400 publishers and nearly 40
wholesalers or distributors. Purchases from the top five suppliers (including publishers, wholesalers and distributors) accounted for approximately 67% of the B&N Retail’s book purchases during fiscal 2018, and no single supplier accounted
for more than 27% of B&N Retail’s book purchases during this period. Consistent with industry practice, a substantial majority of the physical book purchases are returnable for full credit, a practice which substantially reduces the
Company’s risk of inventory obsolescence.

Publishers periodically offer their excess inventory in the form of remainder
books to book retailers and wholesalers through an auction process, which generally favors booksellers such as the Company, who are able to buy substantial quantities. These books are generally purchased in large quantities at favorable prices and
are then sold to consumers at significant discounts off publishers’ list prices.

Distribution

The Company has invested significant capital in its systems and technology by building new platforms, implementing new software
applications and building and maintaining efficient distribution centers. This investment has enabled the Company to source a majority of its inventory through its own

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distribution centers, resulting in direct buying from vendors rather than wholesalers. Using the Company’s own distribution centers rather than wholesalers lowers distribution costs per
unit, increases inventory turns, and improves product margins. The Company’s distribution centers’ 3-prong strategy of (1) accelerating speed to market, (2) improving order quality (on-time, complete and damage free) and (3) reducing costs has improved just-in-time deliveries to stores as well as deliveries to
the Company’s customers on orders placed via the Barnes & Noble website and through the Company’s in-store order network.

As of April 28, 2018, the Company has approximately 1,745,000 square feet of distribution center capacity. The Company has an
approximately 1,145,000 square foot distribution center in Monroe Township, New Jersey, which ships merchandise to stores throughout the country and to online customers. The Company also has an approximately 600,000 square foot distribution center
in Reno, Nevada, which is used to facilitate distribution to stores and online customers in the western United States.

Information
Technologies

The Company has focused a majority of its information technology resources on strategically positioning
and implementing systems to support store operations, online technology requirements, merchandising, distribution, marketing and finance.

BookMaster, the Company’s proprietary bookstore inventory management system, integrates point-of-sale features with a
proprietary data warehouse-based replenishment system. BookMaster enhances communications and real-time access to the Company’s network of bookstores, distribution centers and wholesalers. The Company continues to implement systems to improve
efficiencies in back office processing in the human resources, finance and merchandising areas.

The Company plans to continue
to invest in technologies that will enable it to offer its customers the more convenient and user-friendly online shopping experience. B&N Retail has licensed existing commercial technology when available and has focused its internal development
efforts on those proprietary systems necessary to provide the highest level of service to its customers. The overall mix of technologies and applications allows the Company to support a distributed, scalable and secure eCommerce environment.

The Company uses Intel®-based server technology in a fully redundant configuration to power its current website, which is hosted in two Company-owned locations. Each of these sites has
sufficient capacity to independently support the volume of traffic directed toward the Company’s website during peak periods. Both hosting locations are configured with redundant power, Internet telecommunications capacity and cooling to
significantly reduce its exposure to downtime and service outages. Additionally, the Company believes its technology investments are scalable to meet the future growth demands of the business.

Competition

la
book business is highly competitive in every channel in which the Company operates. The Company competes with mass merchandisers, such as Costco, Target and Wal-Mart. The Company faces competition from many
online distributors, notably Amazon.com. The Company also competes with other large bookstores, including Books-A-Million, and smaller format bookstores, including new
Amazon retail stores and independent store operators. In addition, the Company faces competition from digital distributors, such as Amazon.com and Apple, including through digital books or “eBooks” and eBook readers. The B&N Retail
business’s stores also compete with specialty retail stores that offer books in particular subject areas, variety discounters, drug stores, warehouse clubs, mail-order clubs and other retailers offering books, music, toys, games, gifts and
other products in its market segments.

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The music and movie businesses are also highly competitive and the Company faces competition
from mass merchants, discounters and electronic distribution. The store experience is geared towards the Company’s customer base, including a strong Blu-ray presence as well as a tailored, returnable
product assortment.

Seasonality

The B&N Retail business, like that of many retailers, is seasonal, with the major portion of sales and operating income typically realized during its third fiscal quarter, which includes the holiday
selling season.

Employees

The Company cultivates a culture of outgoing, helpful and knowledgeable employees. As of April 28, 2018, the B&N Retail segment had approximately 23,000 employees (8,000 full-time and 15,000
part-time employees). The B&N Retail segment’s employees are not represented by unions.

NOOK

This segment represents 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 and sales of NOOK®
devices and accessories to B&N Retail. The underlying strategy of the NOOK business is to offer customers any
digital book, newspaper or magazine, anytime, on any device. The Company remains committed to delivering to customers the best digital bookstore experience, providing easy access to Barnes & Noble’s expansive digital collection of over
three million eBooks, digital magazines and newspapers, while rationalizing its existing cost structure. As part of this commitment, the Company partners with Samsung to develop co-branded NOOK® tablets that feature the award-winning Barnes & Noble digital reading experience, while continuing to
develop and offer its own black-and-white

NOOK® eReaders and NOOK® Tablet.

Barnes & Noble’s NOOK digital bookstore and Reading Apps™ provide customers the ability to
purchase and read their digital content and access their Lifetime Library on a wide range of digital platforms, including Windows PCs and tablets, iPad™, iPhone®
, Android™ smartphones and tablets, PC and Mac®.
Barnes & Noble has implemented innovative features on its digital platform to ensure that customers can access their NOOK content from almost all of today’s most popular devices.

NOOK currently sells a number of different devices to satisfy customers’ digital needs, including the NOOK® Tablet, Samsung Galaxy Tab® A NOOK®, Samsung Galaxy Tab® S2 NOOK®, Samsung Galaxy Tab® E NOOK® and NOOK GlowLight™ 3 devices. These devices provide customers access to the millions of books and magazines in the NOOK Store and through Google Play, Android
apps and games, songs, movies and TV shows, plus popular Google services like the Chrome™ browser, Gmail™, YouTube™, Google Search™ and Google Maps™. NOOK GlowLight™ 3 provides customers a simple, easy to use,
intuitive eReader on an E-Ink display that replicates the experience of reading from physical paper and provides access to the Company’s digital content store. The free NOOK support in any of the B&N
Retail bookstores provides customers the ability to interact with a knowledgeable bookseller to receive pre- and post-customer sales support. The bookstores also provide free
Wi-Fi connectivity for NOOK®
devices and Read In Store™ access, which allows customers to read
NOOK Books™ for free within the store. NOOK®
devices also allow for digital lending of a wide selection of books through its LendMe® technology.

Operations

la
digital products group has knowledgeable product development and operational management teams in the areas of reading software, digital content retailing and mobile device development. Digital product management oversees product concept,
software development, engineering, and user

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experience. Operational management has historically overseen demand planning, strategic sourcing, manufacturing, return and refurbishment of hardware. The Company expects that digital
product management’s role will continue to focus on eReading devices and reading platforms, while also shifting to the management of third-party partner relationships, such as NOOK’s partnership with Samsung and Bahwan CyberTek (BCT), a
global software products and services company, in which the Company outsourced certain NOOK functions, including cloud management and development support for NOOK® software.

Purchasing/Distribution

NOOK acquires the rights to distribute digital content from publishers and distributes the
content on www.barnesandnoble.com, NOOK® devices and other eBookstore platforms. Certain digital content is
distributed under an agency pricing model, in which the publishers set fixed prices for eBooks and NOOK receives a fixed commission on content sold through the eBookstore. The majority of the Company’s eBooks sold are under the agency
model.

NOOK utilizes the Company’s purchasing power and its distribution centers to synergistically facilitate the
purchasing and shipping of devices and accessories.

Competition

The eReader and tablet businesses are highly competitive. NOOK competes primarily on price, device functionality, consumer appeal and
availability of digital content. The importance of price varies depending on the competitor, with some of NOOK’s competitors engaging in significant discounting and other promotional activities. NOOK competes with many online digital
businesses, notably Amazon.com and Apple. Some of the Company’s competitors have substantially greater financial and other resources and may have different business strategies than NOOK does.

Seasonality

la
NOOK business, like that of many technology companies, is impacted by the launch of new products and the promotional efforts to support those new products, as well as the traditional retail holiday selling seasonality.

Employees

As of
April 28, 2018, NOOK had 57 employees (combination of full-time and part-time). NOOK employees are not represented by unions, and the Company believes that its relationship with its employees is generally excellent.

Trademarks and Service Marks

The trademarks and service marks owned by the Company and its subsidiaries include, but are not limited to, B&N®, Barnes & Noble®.
Barnes & Noble.com®, barnesandnoble.com®, Barnes & Noble
Booksellers®, Barnsie®, Noble®, Espari®, Discover Great New Writers®, NOOK®, NOOK Color®, NOOK Tablet®, Reader’s Tablet®, NOOK
Simple Touch®, GlowLight®, NOOK GlowLight™, The Simple Touch
Reader®, NOOK Press®, NOOK Books®, NOOK
Book Enhanced®, NOOK Developer®, The NOOK Book Store®, NOOK
Newsstand®, NOOK Newspaper®, NOOK Kids®, Read In Store®, NOOK Friends®, LendMe®, NOOK Boutique®, NOOK Study®, ArticleView®, Daily Shelf®, Read To Me®, Punctuate!®, Wobblio®, Get Pop-Cultured®.
B-Fest®, B&N Readouts®, SparkNotes®, Borders®, Borders
Books & Music®, and Waldenbooks®, some of which are registered or pending with the United States Patent and Trademark Office.

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The Company regards its trademarks, service marks, copyrights, patents, domain names, trade
dress, trade secrets, proprietary technology and similar intellectual property as important to its operations, and it relies on trademark, copyright and patent law, domain name regulations, trade secret protection and confidentiality or license
agreements to protect its proprietary rights. The Company has registered, or applied for the registration of, a number of domain names, trademarks, service marks, patents, and copyrights by U.S. and foreign governmental authorities. Additionally,
the Company has filed U.S. and international patent applications covering certain of its proprietary technology. The Company renews its registrations, which vary in duration, as it deems appropriate from time to time.

The Company has licensed in the past, and expects that it may license in the future, certain of its proprietary rights to third parties.
Some of the Company’s products are designed to include intellectual property licensed or otherwise obtained from third parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of the Company’s
products and business methods, the Company believes, based upon past experience and industry practice, such licenses generally could be obtained on commercially reasonable terms; however, there is no guarantee such licenses could be obtained at all.

Available Information

The Company files annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, proxy statements and other information with the SEC. Any materials filed by the Company with the SEC may be read and copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549.
Information on the operation of the SEC’s Public Reference Room is available by calling the SEC at 1-800-SEC-0330. The SEC
maintains a website that contains annual, quarterly and current reports, proxy statements and other information that issuers (including the Company) file electronically with the SEC. The Internet address of the SEC’s website is
https://www.sec.gov.

The Company makes available on its corporate website at www.barnesandnobleinc.com under
“Investor Relations” – “SEC Filings,” free of charge, all its SEC filings as soon as reasonably practicable after the Company electronically files such material with or furnishes such materials to the SEC.

The Company has adopted Corporate Governance Guidelines, a Code of Business Conduct and Ethics and written charters for the
Company’s Audit Committee, Compensation Committee and Corporate Governance & Nominating Committee. Each of the foregoing is available on the Company’s website at www.barnesandnobleinc.com under “Investor
Relations” – “Corporate Governance” and in print to any stockholder who requests it, in writing to the Company’s Corporate Secretary, Barnes & Noble, Inc., 122 Fifth Avenue, New York, New York 10011. In accordance
with SEC rules, the Company intends to disclose any amendment (other than any technical, administrative, or other non-substantive amendment) to either of the above codes, or any waiver of any provision thereof
with respect to any of the executive officers, on the Company’s website within four business days following such amendment or waiver.

The following risk factors and other information included in this Annual Report on
Form 10-K should be carefully considered. The risks and uncertainties described below are not the only ones faced by the Company. Additional risks and uncertainties not presently known or that are
currently deemed immaterial also may impair the Company’s business operations. If any of the following risks occur, the Company’s business, financial condition, operating results and cash flows could be materially adversely affected.

Unless otherwise specified or the context otherwise requires, references below to (1) “the Company”
refer to Barnes & Noble, Inc. and its subsidiaries, (2) “Retail business” refer to the Company’s business included in the Retail segment, and (3) “Digital business” refer to the Company’s business included
in the NOOK segment, including the sales of digital content, devices and accessories.

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Intense competition, including from the Internet and other retail sources, may adversely affect the
Company’s businesses.

The book business is highly competitive in every channel in which the Company operates. la
Company competes with mass merchandisers, such as Costco, Target and Wal-Mart. The Company faces competition from many online distributors, notably Amazon.com. The Company also competes with other large
bookstores, including Books-A-Million, and smaller format bookstores, including new Amazon retail stores and independent store operators. In addition, the Company faces
competition from digital distributors, such as Amazon.com and Apple, including through digital books or “eBooks” and eBook readers. The Retail business’s stores also compete with specialty retail stores that offer books in particular
subject areas, variety discounters, drug stores, warehouse clubs, mail-order clubs and other retailers offering books, music, toys, games, gifts and other products in its market segments.

Some of the Company’s competitors may have greater financial and other resources and different business strategies than the Company
does. New and enhanced technologies, including new digital technologies and new web services technologies, may increase the Company’s competition. Competition may also intensify as the Company’s competitors enter into business combinations
or alliances or established companies in other market segments expand into its market segments. Increased competition may reduce the Company’s sales and profits.

The Retail business’s stores compete primarily on the quality of the shopping and store experience and the price and availability of products. The importance of price varies depending on the
competitor, with some of the Retail business’s competitors engaging in significant discounting and other promotional activities.

Because of shifting consumer preferences and demographic shifts, coupled with the maturity of the market for traditional retail stores, the
Company’s sales or net income may decline unless it successfully implements its business strategies.

la
Company’s primary business is its operation of the Retail business’s stores across the United States, and it derived a substantial majority of its sales and profits from the Retail business’s stores in its most recent fiscal year.
Continued increases in consumer spending via the Internet may significantly affect its ability to generate sales in the Retail business’s stores. Management’s strategies are subject to the risks described herein and elsewhere, and may be
subject to other risks that have not yet been identified, and management cannot make assurances that its business strategies will be successful.

The Company’s businesses are dependent on the overall economic environment and consumer spending patterns.

A deterioration of the current economic environment could have a material adverse effect on the Company’s financial condition and operating results, as well as the Company’s ability to fund its
growth or its strategic business initiatives.

The Retail and Digital businesses’ sales are primarily dependent upon
discretionary consumer spending, which is affected by the overall economic environment, consumer confidence and other factors beyond the Company’s control. In addition, the Retail and Digital businesses’ sales are dependent in part on the
strength of new release products, which are controlled by publishers and other suppliers.

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If the Retail business is unable to renew or enter into new leases on favorable terms, or at all, its
sales and earnings may decline.

Substantially all of the Retail business’s stores are located in leased premises.
The Retail business’s profitability depends in part on its ability to continue to optimize its store lease portfolio as to the number of retail stores, store locations and lease terms and conditions. Its ability to do so depends on, among other
things, general economic and business conditions and general real estate development conditions, which are beyond its control. The Retail business has 321 leases up for renewal by April 30, 2021. If the cost of leasing existing retail stores
increases, the Retail business may not be able to maintain its existing store locations as leases expire. In addition, the Retail business may not be able to enter into new leases on acceptable terms, or at all, or it may not be able to locate
suitable alternative sites or additional sites for new retail stores in a timely manner. The Retail business’s sales and earnings may decline if it fails to maintain existing store locations, enter into new leases, renew leases or relocate to
alternative sites, in each case on attractive terms.

In addition to the bookstores, the Company leases two distribution
centers for its B&N Retail operations: one in Monroe Township, New Jersey and the other in Reno, Nevada. The Retail business’s profitability depends in part on its ability to continue to optimize its distribution centers. Its ability to do
so depends on, among other things, general economic and business conditions and general real estate development conditions, which are beyond its control. Both distribution centers’ leases are up for renewal in 2020. If the cost of leasing these
distribution centers increases, the Retail business may not be able to maintain its existing distribution centers as leases expire. In addition, the Retail business may not be able to enter into new leases on acceptable terms, or at all, or it may
not be able to locate suitable alternative sites or in a timely manner. The Retail business’s earnings may decline if it fails to maintain existing distribution centers, enter into new leases, renew leases or relocate to alternative sites, in
each case on attractive terms.

The Company is dependent upon access to capital, including bank credit facilities and short-term vendor
financing, for its liquidity needs.

The Company must have sufficient sources of liquidity to fund its working capital
requirements and indebtedness. The Company believes that the combination of its cash and cash equivalents on hand, cash flow received from operations, funds available under the Company’s credit facility and short-term vendor financing will be
sufficient to meet the Company’s normal working capital and debt service requirements for at least the next twelve months. If these sources of liquidity do not satisfy the Company’s requirements, the Company may need to seek additional
financing. The future availability of financing will depend on a variety of factors, such as economic and market conditions, the availability of credit and the Company’s credit rating, as well as the Company’s reputation with potential
lenders. These factors could materially adversely affect the Company’s ability to fund its working capital requirements, costs of borrowing, and the Company’s financial position and results of operations would be adversely impacted.

The Company’s expansion into new products, services and technologies subjects it to additional business, legal, financial and
competitive risks.

The Company may require additional capital in the future to sustain or grow
the Company’s business. The Company’s gross profits and margins in its newer activities may be lower than in its traditional activities, and it may not be successful enough in these newer activities to recoup its investments in them. In
addition, the Company may have limited or no experience in its newer products and services, and its customers may not adopt its new product or service offerings, which include digital, web services and electronic devices, including but not limited
to its NOOK® eBook readers and tablets, as well as new gift products and educational toys and games products.
Some of these offerings may present new and difficult technological challenges, and the Company may be subject to claims or recalls if customers of these offerings experience service disruptions or failures or other quality issues. If any of these
were to occur, it could damage the Company’s reputation, limit its growth and negatively affect its operating results.

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The complexity of the Company’s businesses could place a significant strain on its management,
operations, performance and resources.

The complexity of the Company’s businesses could place a significant
strain on its management, operations, technical performance, financial resources, and internal financial control and reporting functions. The Company operates two different businesses: the Retail business and the Digital business. There can be
no assurance that the Company will be able to manage the complexity of its businesses effectively. The Company’s current and planned personnel, systems, procedures and controls may not be adequate to support and effectively manage its future
operations, especially as it employs personnel in multiple geographic locations. The Company may not be able to hire, train, retain, motivate and manage the required personnel, which may limit its growth. If any of these were to occur, it could
damage the Company’s reputation, limit growth, negatively affect operating results and harm its business.

The Company faces the
risk of disruption of supplier relationships and/or supply chain and/or inventory surplus.

The products that the
Company sells originate from a wide variety of domestic and international vendors. During fiscal 2018, the Retail business’s five largest suppliers accounted for approximately 67% of the dollar value of merchandise purchased. While the
Company believes that its relationships with its suppliers are strong, suppliers may modify the terms of these relationships due to general economic conditions or otherwise. The Company does not have long-term arrangements with most of its suppliers
to guarantee availability of merchandise, content, components or services, particular payment terms or the extension of credit limits. If the Company’s current suppliers were to stop selling merchandise, content, components or services to it on
acceptable terms, including as a result of one or more supplier bankruptcies due to poor economic conditions, the Company may be unable to procure the same merchandise, content, components or services from other suppliers in a timely and efficient
manner and on acceptable terms, or at all.

The Retail business is dependent on the continued supply of trade books. la
publishing industry generally has suffered recently due to, among other things, changing consumer preferences and the economic climate. A significant disruption in this industry generally could adversely impact the Company’s business. la
significant unfavorable change in the Company’s relationships with key suppliers could materially adversely affect its sales and profits. In addition, any significant change in the payment terms that the Company has with its key suppliers,
including payment terms, return policies, the discount or margin on products or changes to the distribution model could adversely affect its financial condition and liquidity.

The Company has arrangements with third-party manufacturers with respect to digital devices. These manufacturers procure and assemble unfinished parts and components from third-party suppliers based on
forecasts provided by the Company. Given production lead times, commitments may be made far in advance of finished product delivery. In addition, certain of our merchandise, including electronic readers, are sourced, directly or indirectly, from
outside the United States, including, without limitation, from suppliers in China. Political or financial instability, merchandise quality issues, product safety concerns, trade restrictions, work stoppages, tariffs, foreign currency exchange rates,
transportation capacity and costs, inflation, civil unrest, natural disasters, outbreaks of pandemics and other factors relating to foreign trade are beyond our control and could disrupt our supply of foreign-sourced merchandise and/or adversely
affect our results of operations.

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The Company’s relationship with strategic partners could have adverse impacts on the Company and
its business.

The Company relies on third parties to provide certain services for its business. The Company’s
business may be adversely impacted if such third parties fail to meet their obligations or to provide high levels of service to the Company’s customers. Further, the Company could be subject to claims as a result of the activities,
products or services provided by these third-party service providers even though the Company was not directly involved in the circumstances leading to those claims. These claims could include, among other things, claims by the Company’s
customers and claims relating to data security. Even if these claims do not result in liability to the Company, defending and investigating these claims could be expensive and time-consuming, divert personnel and other resources from the
Company’s business and result in adverse publicity that could harm the Company’s business.

The Company’s businesses rely
on certain key personnel.

Management believes that the Company’s continued success will depend to a significant
extent upon the efforts and abilities of certain key personnel of the Company. The loss of the services of any of these key personnel could have a material adverse effect on the Company. The Company does not maintain “key man” life
insurance on any of its officers or other employees.

The Company’s businesses are seasonal and the Company’s results of
operations may fluctuate from quarter to quarter, which could affect the Company’s business, financial condition and results of operations.

The Company’s results of operations may fluctuate from quarter to quarter depending upon several factors, some of which are beyond its control. These factors include the timing of new product
releases, weather, the level of success of the Company’s product releases, the timing of store openings and closings, shifts in the timing of certain promotions and the effect of impairments on the Company’s assets. These and other factors
could affect the Company’s business, financial condition and results of operations, and this makes the prediction of the Company’s financial results on a quarterly basis difficult. The Company’s quarterly financial results have been
and may in the future be below the expectations of public market analysts and investors.

The Company’s sales are
generally highest in the third fiscal quarter and lowest in the second and fourth fiscal quarters. Operating results in the Company’s businesses depend significantly upon the holiday selling season in the third fiscal quarter.

Less than satisfactory net sales during the Company’s peak fiscal quarter could have a material adverse effect on its financial
condition or operating results for the year, and the Company’s results of operations from those quarters may not be sufficient to cover any losses, which may be incurred in the other fiscal quarters of the year.

The Company may not be able to adequately protect its intellectual property rights or may be accused of infringing upon intellectual property
rights of third parties.

The Company regards its trademarks, service marks, copyrights, patents, trade dress, trade
secrets, proprietary technology and similar intellectual property as important to its success, and it relies on trademark, copyright and patent law, domain name regulations, trade secret protection and confidentiality or license agreements to
protect its proprietary rights. Laws and regulations may not adequately protect its trademarks and similar proprietary rights. The Company may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or
diminish the value of its trademarks and other proprietary rights.

The Company may not be able to discover or determine the
extent of any unauthorized use of its proprietary rights. The protection of the Company’s intellectual property may require the expenditure of significant financial and managerial resources. Moreover, the steps it takes to protect its
intellectual property may not adequately protect its rights or prevent third parties from infringing or misappropriating its proprietary rights. The Company also cannot be certain that others will not independently develop or otherwise acquire
equivalent or superior technology or other intellectual property rights.

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Other parties also may claim that the Company infringes their proprietary
rights. Because of the changes in Internet commerce, the electronic reader and digital content business, current extensive patent coverage, and the rapid rate of issuance of new patents, it is possible that certain components of our products
and business methods may unknowingly infringe existing patents or intellectual property rights of others. Because the Company’s products include complex technology, much of which is acquired from suppliers through the purchase of components or
licensing of software, the Company and its suppliers and customers are and have been involved in or have been impacted by assertions, including both requests for licenses and litigation, regarding patent and other intellectual property rights. la
Company has been and is currently subject to, and expects to continue to be subject to, claims and legal proceedings regarding alleged infringement by it of the intellectual property rights of third parties. Such claims, whether or not meritorious,
may result in the expenditure of significant financial and managerial resources, injunctions against the Company prohibiting the Company from marketing or selling certain products or the payment of damages. The Company may need to obtain licenses
from third parties who allege that it has infringed their rights, but such licenses may not be available on terms acceptable to the Company, or at all. In addition, the Company may not be able to obtain or utilize on terms that are favorable to it,
or at all, licenses or other rights with respect to intellectual property it does not own in providing services to other businesses and individuals under commercial agreements. These risks have been amplified by the increase in third parties whose
primary business appears to be to assert such claims. If any infringement or other intellectual property claim made against the Company by any third-party is successful, if the Company is required to indemnify a customer with respect to a claim
against the customer, or if the Company is unable to develop non-infringing technology or license the proprietary rights on commercially reasonable terms and conditions, the Company’s business, operating
results, and financial condition could be materially and adversely affected.

The Company’s digital
content offerings, including NOOK®, depend in part on effective digital rights management technology to control
access to digital content. If the digital rights management technology that it uses is compromised or otherwise malfunctions, the Company could be subject to claims, and content providers may be unwilling to include their content in its service.

The Company faces data security risks with respect to personal information.

The Company’s business involves the receipt, storage, processing and transmission of personal information about customers and
employees. Personal information about customers is obtained in connection with the Company’s membership programs, eCommerce operations, digital media businesses, as well as through retail transactions in stores operated by the Company. la
Company’s online operations and the Digital business depend upon the secure transmission of confidential information over public networks, including information permitting cashless payments. We may share such information with vendors and third
parties that assist with certain aspects of our business.

The Company’s handling and use of personal information is
regulated at the international, federal and state levels. Privacy and information security laws, regulations, and standards, such as the Payment Card Industry Data Security Standard, change from time to time, and compliance with them may result in
cost increases due to necessary systems changes and the development of new processes and may be difficult to achieve. If the Company fails to comply with these laws, regulations and standards, it could be subjected to legal risk. Also, hardware,
software or applications developed or procured internally or from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. In addition, even if the Company fully complies
with all laws, regulations, and standards and even though the Company has taken significant steps to protect personal information, the Company could experience a data security breach, and its reputation could be damaged, possibly resulting in lost
future sales or decreased usage of credit and debit card products. Because the techniques used to

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obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, the Company may be unable to anticipate
these techniques or to implement adequate preventative measures. A party that is able to circumvent the Company’s security measures could misappropriate the Company’s or its users’ proprietary information and cause interruption in its
operations. Any compromise of the Company’s data security could result in a violation of applicable privacy and other laws or standards, significant legal and financial exposure beyond the scope or limits of insurance coverage, increased
operating costs associated with remediation, negative publicity, equipment acquisitions or disposal and added personnel, and a loss of confidence in its security measures, which could harm the business or investor confidence. Data security breaches
may also result from non-technical means, for example, actions by an employee.

la
Company has suffered data security breaches in the past, including the Company’s discovery in 2012 that PIN pads in certain of its stores had been tampered with to allow criminal access to card data and PIN numbers on credit and debit cards
swiped through the terminals. This matter has given rise to putative class action litigation, including ongoing class action litigation, on behalf of customers, banks, or other card issuers, and inquiries from federal and state government agencies.
It is possible that additional litigation arising out of this matter may be filed on behalf of customers, banks, payment card companies or stockholders seeking damages allegedly arising out of this incident and other related relief. In addition,
payment card companies and associations may impose fines by reason of the tampering and federal and state enforcement authorities may impose penalties or other remedies against the Company. At this point the Company is unable to predict the
developments in, outcome of, and economic and other consequences of pending or future litigation or government inquiries related to this matter.

The concentration of the Company’s capital stock ownership with certain executive officers, directors and their affiliates limits its stockholders’ ability to influence corporate matters
and may involve other risks.

Leonard Riggio, the Company’s Founder and Chairman, is currently the beneficial
owner of an aggregate of approximately 19.3% of the Company’s outstanding capital stock as of April 28, 2018.

cette
concentrated control may limit the ability of the Company’s other stockholders to influence corporate matters and, as a result, the Company may take certain actions, with which its other stockholders do not agree. In addition, there may be
risks related to the relationships Leonard Riggio and other members of the Riggio family have with the various entities with which the Company has related party transactions.

Changes in sales and other tax collection regulations or inability of the Company to utilize tax credits or assets, could harm the Company’s businesses or financial performance.

The Retail business and the Digital business collected sales tax on the majority of the products and services that
they sold in their respective prior fiscal years that were subject to sales tax, and they generally have continued the same policies for sales tax within the current fiscal year. While management believes that the financial statements included
elsewhere herein reflect management’s best current estimate of any potential additional sales tax liability based on current discussions with taxing authorities, there can be no assurance that the outcome of any discussions with any taxing
authority will not result in the payment of sales taxes for prior periods or otherwise, or that the amount of any such payments will not be materially in excess of any liability currently recorded. In the future, the Company’s businesses may be
subject to claims for not collecting sales tax on the products and services it currently sells for which sales tax is not collected. There is a risk that existing tax credits and tax assets may not be utilized or may expire.

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la Spin-Off of Barnes & Noble Education could result
in significant tax liability to the Company and its stockholders.

la Spin-Off
was conditioned on the Company’s receipt of written opinions from Cravath, Swaine & Moore LLP and KPMG LLP to the effect that the Spin-Off would qualify for non-recognition of gain and loss to
the Company and its stockholders, which were received. These opinions do not address any U.S. state or local or foreign tax consequences of the Spin-Off. These opinions assume that the Spin-Off will be completed according to the terms of the Separation Agreement and rely on the facts as stated in the Separation Agreement, the Tax Matters Agreement, the other ancillary agreements, the prospectus
for the Spin-Off and a number of other documents. In addition, these opinions are based on certain representations as to factual matters from, and certain covenants by, the Company and Barnes & Noble
Education. The opinions cannot be relied on if any of the assumptions, representations or covenants are incorrect, incomplete or inaccurate or are violated in any material respect. The opinions are not binding on the Internal Revenue Service (IRS)
or the courts, and we cannot assure you that the IRS or a court will not take a contrary position. If the Spin-Off were determined not to qualify for non-recognition Ils le font, jusqu'à
gain and loss, U.S. holders could be subject to tax. In this case, each U.S. holder who receives the Barnes & Noble Education Common Stock in the Spin-Off would generally be treated as receiving a
distribution in an amount equal to the fair market value of Barnes & Noble Education common stock received, which would generally result in (i) a taxable dividend to the U.S. holder to the extent of that U.S. holder’s pro rata
share of the Company’s current and accumulated earnings and profits; (ii) a reduction in the U.S. holder’s basis (but not below zero) in the Company’s common stock to the extent the amount received exceeds the stockholder’s
share of the Company’s earnings and profits; and (iii) a taxable gain from the exchange of the Company’s common stock to the extent the amount received exceeds the sum of the U.S. holder’s share of the Company’s earnings and
profits and the U.S. holder’s basis in its common stock.

If the Spin-Off were
determined not to qualify for non-recognition of gain and loss, then the Company would recognize gain in an amount up to the fair market value of the Barnes & Noble Education stock held by the Company
immediately before the Spin-Off.

The Company’s classified Board of Directors and other
anti-takeover defenses could deter acquisition proposals and make it difficult for a third-party to acquire control of the Company. This could have a negative effect on the price of the Company’s common stock.

Pursuant to the stockholder proposal that was approved at the Company’s 2017 annual meeting of stockholders, the declassification of
the Company’s Board of Directors will be phased in, such that the Class II directors will stand for election for a one-year term at the 2018 annual meeting of stockholders, the Class III
directors and the Class II directors will stand for election for a one-year term at the 2019 annual meeting of stockholders, and all directors will stand for election for
one-year terms at the 2020 annual meeting of stockholders and at each annual meeting of stockholders thereafter. Until declassification is complete, the Company’s classified Board of Directors could serve
as an anti-takeover defense. The Company also has other anti-takeover defenses in its certificate of incorporation and by-laws. Each of the Company’s defenses could discourage potential acquisition
proposals and could delay or prevent a change in control of the Company. These deterrents could adversely affect the price of the Company’s common stock and make it difficult to remove or replace members of the Board of Directors or management
of the Company. The Company’s previous shareholder rights plan expired on November 17, 2012 and was not replaced. The Board may, subject to its fiduciary duties under applicable law, choose to implement a shareholder rights plan in the
future.

The Company’s businesses could be impacted by changes in international, federal, state or local laws, rules or
regulations.

The Company is subject to general business regulations and laws relating to all aspects of its business,
including regulations and laws relating to the Internet, online commerce, digital content and products as well as its other lines of business (including governmental investigations and litigation relating to the agency pricing model for digital
content distribution). Existing and future laws and regulations and their application and/or enforcement may impede the growth of the Internet, digital content distribution or other online services and impact digital content pricing, including
requiring modifications or elimination of related pricing models, including the agency pricing model. Changes in international, federal, state or local laws, rules or regulations, including, but not limited to, laws, rules or regulations related to
employment,

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wages, data privacy, information security, intellectual property, taxes, products, product safety, health and safety, imports and exports, anti-corruption, and anti-competition could diminish the
demand for the Company’s products and services, increase the Company’s costs of doing business, decrease the Company’s margins or otherwise materially adversely impact the Company’s business.

The Company faces additional operating risks through the operation of the Digital business and as an Internet retailer.

The Company faces risks related to the operation of the Digital business. The Digital business’s content sales
decreased during fiscal 2018 and may continue to decline in the future, which could affect the Company’s results of operations and liquidity. Also, the sales of digital devices and accessories declined during fiscal 2018, and there is no
guarantee that the possible introduction of future NOOK® digital devices will increase future sales of digital
devices or content or the earnings of the Digital business. NOOK® competes primarily with other tablets and
eBook readers on functionality, consumer appeal, availability of digital content and price. The previously announced efforts to rationalize the costs associated with the Digital business also may not be successful, which may adversely impact the
Company’s results of operations. The Digital business faces certain risks associated with its business, including protection of digital rights and uncertainties relating to the regulation of digital content.

Business risks related to the Company’s online business include risks associated with the need to keep pace with rapid technological
change, risks associated with the adoption of new products or platforms. Internet security risks, risks of system failure or inadequacy, supply chain risks, government regulation and legal uncertainties with respect to the Internet, risks related to
data privacy and collection of sales or other taxes by one or more states or foreign jurisdictions. If any of these risks materializes, it could have an adverse effect on the Company’s business.

The Company depends on component and product manufacturing provided by third parties, many of whom are located outside of the U.S.

NOOK® and other Company products are manufactured by third-party manufacturers, many of which are located outside the United States. While the Company’s arrangements
with these manufacturers may lower costs, they also reduce its direct control over production. It is uncertain what effect such diminished control will have on the quality or quantity of products or services, or the Company’s flexibility to
respond to changing conditions. Although arrangements with such manufacturers may contain provisions for warranty expense reimbursement, if reimbursement from such manufacturers is unenforceable or insufficient, the Company may remain responsible to
the consumer for warranty service in the event of product defects. Any unanticipated product defect or warranty liability, whether pursuant to arrangements with contract manufacturers or otherwise, could materially adversely affect the
Company’s reputation, financial condition and operating results.

The Company, including the Digital business, may be
unable to obtain a sufficient supply of components and parts that are free of minerals mined from the Democratic Republic of Congo and adjoining countries (DRC), which could result in a shortage of such components and parts or reputational damages
if the Company is unable to certify that its products are free of such minerals. The Company filed its Conflict Minerals Report for the calendar year 2017 with the SEC on May 31, 2018.

The Company relies on third-party digital content and applications, which may not be available to the Company on commercially reasonable terms or at all.

The Company contracts with certain third parties to offer their digital content, including on NOOK® and through its eBookstore. Its licensing arrangements with these third parties do not guarantee the continuation or
renewal of these arrangements on reasonable terms, if at all. Some third-party content providers currently or in the future may offer competing products and services, and could take action to

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make it more difficult or impossible for the Company to license their content in the future. Other content owners, providers or distributors may seek to limit the Company’s access to, or
increase the total cost of, such content. If the Company is unable to offer a wide variety of content at reasonable prices with acceptable usage rules, its financial condition and operating results may be materially adversely affected.

The Company’s businesses could be adversely impacted if it is unsuccessful in making and integrating acquisitions it has made or may decide to
pursue.

To enhance the Company’s efforts to grow and compete, from time to time it has engaged in acquisitions
and entered into joint ventures, and it may engage in acquisitions or enter into joint ventures in the future. Any future acquisitions are subject to the Company’s ability to identify attractive opportunities and to negotiate favorable terms
for them. Accordingly, the Company cannot make assurances that future acquisitions will be completed, or that if completed, they will be successful. These transactions may create risks such as: (1) disruption of the Company’s ongoing
business, including loss of management focus on existing businesses; (2) the dilution of the equity interest of the Company’s stockholders; (3) problems retaining key personnel; (4) increased debt to finance any transaction and
additional operating losses, debt and expenses of the businesses the Company acquires; (5) the difficulty of integrating a new company’s accounting, financial reporting, management, information, human resources and other administrative
systems to permit effective management, and the lack of control if such integration is delayed or not implemented; (6) the difficulty of implementing at acquired companies the controls, procedures and policies appropriate for a larger public
company; and (7) potential unknown liabilities associated with an acquired company. In addition, valuations supporting the Company’s acquisitions could change rapidly given the current global economic climate. The Company could
determine that such valuations have experienced impairments or other-than-temporary declines in fair value, which could adversely impact its financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

All but one of the active Barnes & Noble stores are leased. The leases typically provide for an initial term of 10 or 15 years
with one or more renewal options. Most stores are currently in renewal periods. The terms of the Barnes & Noble store leases for its 629 leased stores open as of April 28, 2018 expire as follows:

Lease Terms to Expire During

(12 months ending on or about April 30)

Number of
Stores(a)

2019

89

2020

142

2021

90

2022

126

2023

93

2024 and later

87

(a)

Two Barnes & Noble stores are under
month-to-month leases.

In
addition to the bookstores, the Company leases two distribution centers for its B&N Retail operations: one in Monroe Township, New Jersey and the other in Reno, Nevada, both under leases expiring in 2020. The Company’s B&N Retail
distribution centers total 1,745,000 square feet.

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The Company’s principal administrative facilities are situated in New York, New York,
and are covered by two leases: 184,000 square feet lease and 9,500 square feet lease, both expiring in 2023.

The Company
leases two additional locations in New York, New York for office space: approximately 40,000 square feet lease for eCommerce and NOOK administrative offices and approximately 40,000 square feet lease for Sterling Publishing administrative offices,
both expiring in 2020.

The Company also leases approximately 79,000 square feet of office space in Westbury, New York under a
lease expiring in 2022 and approximately 56,000 square feet of office space in Santa Clara, California under a lease expiring in 2019.

ITEM 3. LEGAL PROCEEDINGS

The information included in the Company’s Annual Report to Shareholders for the fiscal year ended April 28, 2018 included as
Exhibit 13.1 to this Annual Report on Form 10-K (the Annual Report) under the section entitled “Notes to Consolidated Financial Statements, Note 15. Legal Proceedings” is incorporated herein by
reference.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Price Range of Common Stock

The Company’s common stock is
traded on the New York Stock Exchange (NYSE) under the symbol “BKS”. The following table sets forth, for the quarterly periods indicated, the high and low sales prices of the common stock on the NYSE Composite Tape:

Fiscal 2018 Fiscal 2017
High Low High Low

First Quarter

$ 8.70 $ 6.25 $ 13.31 $ 10.25

Second Quarter

8.30 6.60 13.63 10.15

Third Quarter

8.00 4.83 13.20 9.40

Fourth Quarter

5.80 4.10 10.95 8.45

Approximate Number of Holders of Common Equity

Title of Class

Approximate
Number
Ils le font, jusqu'à

Record Holders as of
May 31, 2018

Common stock, $0.001 par value

1,648

Dividends

The Company paid dividends to common stockholders in the amount of $43.6 million and $43.9 million during fiscal 2018 and fiscal 2017, respectively.

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The following table provides information with respect to purchases by the Company of shares
of its common stock during the fourth quarter of fiscal 2018:

Period

Total
Number of
Shares
Purchased
Average
Price Paid
per Share
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans
ou
Programs
Approximate
Dollar Value of
Shares That
May Yet Be
Purchased
Under the Plans
ou
Programs

January 28, 2018 – February 24, 2018

$ 0 $ 50,000,000

February 25, 2018 – March 31, 2018

$ 0 $ 50,000,000

April 1, 2018 – April 28, 2018

$ 0 $ 50,000,000

Total

$ 0

On October 20, 2015, the Company’s Board of Directors authorized a stock repurchase program
(prior repurchase plan) of up to $50.0 million of its common shares. During fiscal 2016, the Company repurchased 2,763,142 shares at a cost of $26.7 million under the prior repurchase plan. During fiscal 2017, the Company repurchased
2,019,798 shares at a cost of $23.3 million under the prior repurchase plan. On March 15, 2017, subsequent to completing the prior repurchase plan, the Company’s Board of Directors authorized a new stock repurchase program of up to
$50.0 million of its common shares. Stock repurchases under this program may be made through open market and privately negotiated transactions from time to time and in such amounts as management deems appropriate. The new stock repurchase
program has no expiration date and may be suspended or discontinued at any time. The Company’s repurchase plan is intended to comply with the requirements of Rule 10b-18 under the Securities Exchange Act
of 1934, as amended. The Company did not repurchase shares under this plan in fiscal 2018 and fiscal 2017. The Company has remaining capacity of $50.0 million under the new repurchase program as of April 28, 2018.

As of April 28, 2018, the Company has repurchased 39,584,907 shares at a cost of approximately $1.09 billion since the
inception of the Company’s stock repurchase programs. The repurchased shares are held in treasury.

ITEM 6. SELECTED FINANCIAL DATA

The information included in the Annual Report under the section entitled “Selected Consolidated Financial Data” is incorporated herein by reference.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information included in the Annual Report under the section entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” is incorporated herein by reference.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company limits its interest rate risks by investing certain of its excess cash balances in
short-term, highly-liquid instruments with an original maturity of one year or less. The Company does not expect any material losses from its invested cash balances and
the Company believes that its interest rate exposure is modest. As of April 28, 2018, the Company’s cash and cash equivalents totaled approximately $10.8 million. A 50 basis point increase in annual interest rates would have
increased the Company’s interest income by $0.0 million in fiscal 2018. Conversely, a 50 basis point decrease in annual interest rates would have reduced interest income by $0.0 million in fiscal 2018.

Additionally, the Company may from time to time borrow money under its credit facility at various interest rate options based on the Base
Rate or LIBO Rate (each term as defined in the amended and restated credit agreement described in the Annual Report under the section titled “Notes to Consolidated Financial Statements”) depending upon certain financial tests. Accordingly,
the Company may be exposed to interest rate risk on borrowings under its credit facility. The Company had borrowings under its credit facility of $158.7 million at April 28, 2018 and $64.9 million at April 29, 2017. A 50 basis
point increase in annual interest rates would have increased the Company’s interest expense by $0.7 million in fiscal 2018. Conversely, a 50 basis point decrease in annual interest rates would have reduced interest expense by
$0.7 million in fiscal 2018.

The Company does not have any material foreign currency exposure as nearly all of its
business is transacted in United States currency.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information included in the Annual Report under the sections entitled: “Consolidated Statements of Operations,” “Consolidated Statements of Comprehensive Income (Loss),”
“Consolidated Balance Sheets,” “Consolidated Statements of Changes in Shareholders’ Equity,” “Consolidated Statements of Cash Flows” and “Notes to Consolidated Financial Statements” are incorporated
herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a)
Evaluation of Disclosure Controls and Procedures

The management of the Company established and maintains disclosure
controls and procedures that are designed to ensure that material information relating to the Company and its subsidiaries required to be disclosed in the reports that are filed or submitted under the Exchange Act are recorded, processed,
summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosures. As of the end of the period covered by this report, the Company’s management conducted an evaluation (as required under Rules
13a-15(b) et 15d-15(b) under the Exchange Act), under the supervision and with the participation of the principal executive officer and principal financial officer, of
the Company’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) et 15d-15(e) under the Exchange Act). A control system, no
matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic
reports.

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Based on management’s evaluation, the principal executive officer and principal
financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.

(b) Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal
control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officers, and effected by the board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; et
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the
Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (2013 framework). Based upon the Company’s evaluation under this framework, management concluded that the Company’s internal control over financial reporting was effective as of April 28, 2018.

The effectiveness of internal control over financial reporting was audited by Ernst & Young LLP, an independent registered
public accounting firm, as stated in their report included elsewhere herein.

(c) Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the most recent quarter
ended April 28, 2018 that have materially affected, or are reasonably likely to affect, internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.


PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information with respect to directors, executive officers, the code of ethics and corporate governance of the Company is incorporated herein by reference to the Company’s definitive Proxy
Statement relating to the Company’s 2018 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the Company’s fiscal year ended April 28, 2018 (the Proxy Statement).

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The information with respect to compliance with Section 16(a) of the Exchange Act is
incorporated herein by reference to the Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

The information with respect to executive compensation is incorporated herein by reference to the Proxy Statement.

The information with respect to compensation of directors is incorporated herein by reference to the Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

The following table sets forth equity compensation plan information as of April 28, 2018:

Plan Category

Number of
securities to be
issued upon exercise
of outstanding
options,
warrants
and rights
Weighted-average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available
for future issuance
under equity
compensation
plans
(excluding securities
in column (a))
(a) (b) (c)

Equity compensation plans approved by security holders

175,169 9.95 5,689,643

Equity compensation plans not approved by security holders

Total

175,169 9.95 5,689,643

The information with respect to security ownership of certain beneficial owners and management is
incorporated herein by reference to the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information with respect to certain relationships and related transactions and director independence is incorporated herein by
reference to the Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information with respect to principal accountant fees and services is incorporated herein by reference to the Proxy Statement.

28


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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1.    Consolidated Financial Statements:

(i) “The Report of Independent Registered Public Accountants” included in the Annual Report is incorporated herein by reference.

(ii) The information included in the Annual Report under the sections entitled “Consolidated Statements of Operations,” “Consolidated Statements of
Comprehensive Income (Loss),” “Consolidated Balance Sheets,” “Consolidated Statements of Changes in Shareholders’ Equity,” “Consolidated Statements of Cash Flows” and “Notes to Consolidated Financial
Statements” are incorporated herein by reference.

Valuation and
Qualifying Accounts.

For the 52 week period ended April 28, 2018, the 52 week period ended April 29, 2017 and the
52 week period ended April 30, 2016 (in thousands):

Balance at
beginning
of period
Charge
(recovery) to
costs and
expenses
Write-offs Balance at end
of period

Allowance for Doubtful Accounts

April 28, 2018

$ 3,831 $ (392 ) $ (2,487 ) $ 952

April 29, 2017

$ 4,571 $ 464 $ (1,204 ) $ 3,831

April 30, 2016

$ 3,721 $ 1,377 $ (527 ) $ 4,571
Balance at
beginning
of period
Addition
Charged to
Costs
Deductions Balance at
end of
period

Sales Returns Reserves

April 28, 2018

$ 6,145 $ 16,385 $ (16,314 ) $ 6,216

April 29, 2017

$ 5,940 $ 18,558 $ (18,353 ) $ 6,145

April 30, 2016

$ 4,623 $ 17,380 $ (16,063 ) $ 5,940

29


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(b) The following are filed as Exhibits to this form:

Exhibit No.

Leírás

2.1 Stock Purchase Agreement dated as of August 
7, 2009 among the Company, Leonard Riggio and Louise Riggio. (8)
2.2 Separation and Distribution Agreement, dated as of July 14, 2015, between Barnes 
& Noble, Inc. and Barnes & Noble Education, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K dated July 14, 2015). (24)
3.1 Amended and Restated Certificate of Incorporation of the Company, as amended. (36)
3.2 Amended and Restated By-laws of the Company. (36)
3.3 Form of Certificate of Designation, dated as of November 17, 2009. (9)
4.1 Specimen Common Stock Certificate. (1)(P)
10.1 The Company’s Amended and Restated 1996 Incentive Plan. (2)
10.2 The Company’s 2004 Executive Performance Plan. (3)
10.3 The Company’s 2004 Incentive Plan. (3)
10.4 Form of Option Award Agreement of the Company. (4)
10.5 Form of Restricted Stock Award Agreement of the Company. (4)
10.6 Amendment to the Company’s 2004 Incentive Plan. (5)
10.7 Amendment to the Company’s Amended and Restated 1996 Incentive Plan. (5)

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Exhibit No.

Leírás

10.14 Form of Performance Unit Award Agreement pursuant to the Company’s 2009 Incentive Plan. (11)
10.15 Form of Indemnification Agreement between the Company and Company’s directors and officers, dated
 January 5, 2011. (12)
10.16 Investment Agreement between the Company, Morrison Investment Holdings, Inc. and Microsoft Corporation,
 dated April 27, 2012. (13)
10.17 The Company’s Amended and Restated 2009 Incentive Plan. (14)
10.18 Commercial Agreement dated as of April 27, 2012, between Barnes 
& Noble, Inc. and Microsoft Corporation. (16)
10.19 Confidential Settlement and Patent License Agreement dated as of April 
27, 2012, among Barnes & Noble, Inc., barnesandnoble.com llc, Microsoft Corporation and Microsoft Licensing GP. (16)
10.20 Form of Option Award Agreement pursuant to the Company’s Amended and Restated 2009 Incentive
 Plan. (15)
10.21 Form of Restricted Stock Award Agreement pursuant to the Company’s Amended and Restated 2009
 Incentive Plan. (15)
10.22 Form of Restricted Stock Unit Award Agreement pursuant to the Company’s Amended and Restated
 2009 Incentive Plan. (15)

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Exhibit No.

Leírás

10.23 Employment Agreement dated December 23, 2013 between Barnes 
& Noble, Inc. and Allen W. Lindstrom. (18)
10.24 Amendment No. 1 to the Commercial Agreement, dated as of October 
4, 2012, between Barnes & Noble, Inc. and Microsoft Corporation. (19)
10.25 Amendment No. 2 to the Commercial Agreement, dated as of March 
10, 2014, between Barnes & Noble, Inc. and Microsoft Corporation. (19)
10.26 Commercial Agreement, dated June 
4, 2014, between Samsung Electronics America, Inc. and barnesandnoble.com llc. (20)
10.27 Assignment of lease agreement, dated June 
5, 2014, between barnesandnoble.com llc and Google, Inc. (20)
10.28 Commercial Agreement Amendment and Termination Agreement and Patent Agreement Amendment, dated December 4,
 2014, between Microsoft Corporation and Barnes & Noble, Inc. (21)
10.29 Commercial Agreement Amendment and Termination Agreement and Patent Agreement Amendment between Microsoft
Corporation, Barnes & Noble, Inc., NOOK Media LLC, barnesandnoble.com llc and Microsoft Licensing GP, dated December 3, 2014. (22)
10.30 First Amendment to the Commercial Agreement, dated March 
7, 2015, made by and between NOOK DIGITAL, LLC f/k/a barnesandnoble.com llc, and SAMSUNG ELECTRONICS AMERICA, INC. (23)

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Exhibit No.

Leírás

10.31 Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans notice given to directors
 and executive officers, dated July 23, 2015. (25)
10.32 Transition Services Agreement, dated as of August 2, 2015, between Barnes 
& Noble, Inc. and Barnes & Noble Education, Inc. (26)
10.33 Tax Matters Agreement, dated as of August 2, 2015, between Barnes 
& Noble, Inc. and Barnes & Noble Education, Inc. (26)
10.34 Employee Matters Agreement, dated as of August 2, 2015, between Barnes 
& Noble, Inc. and Barnes & Noble Education, Inc. (26)
10.35 Trademark License Agreement, dated as of August 2, 2015, between Barnes 
& Noble, Inc. and Barnes & Noble Education, Inc. (26)
10.36 Credit Agreement, dated as of August 3, 2015, by and among Barnes 
& Noble, Inc., as borrower, the lenders party thereto, Bank of America, N.A., as administrative agent, and the other agents party thereto. (26)
10.37 Completion of Spin-Off of Barnes 
& Noble Education, dated August 6, 2015. (27)
10.38 Stock Repurchase Program dated December 7, 2015. (28)
10.39 Agreement with Bahwan CyberTek, dated April 7, 2016. (29)
10.40 Second Amendment to the Commercial Agreement, dated May 
18, 2016, made by and between NOOK DIGITAL, LLC f/k/a barnesandnoble.com llc, and SAMSUNG ELECTRONICS AMERICA, INC. (30)
10.41 Restricted Stock Unit Award Agreement pursuant to the Company’s Amended and Restated
 2009 Incentive Plan. (31)
10.42 Performance-Based Stock Unit Award Agreement pursuant to the Company’s 2009 Incentive
 Plan. (31)
10.43 Form of Restricted Stock Unit Award Certificate. (31)
10.44 Form of Performance-Based Stock Unit Award Certificate. (31)
10.45 Letter to David Deason regarding terms and conditions of employment, dated February 11,
 2014. (31)

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Exhibit No.

Leírás

10.46 Retention Bonus Agreement, dated March 
4, 2014, between the Company and David Deason. (31)
10.47 Offer of Employment to Frederic Argir, dated June 12, 2015. (31)
10.48 Agreement Regarding Certain Terms and Conditions of Employment, dated June 
25, 2015, between the Company and Frederic Argir. (31)
10.49 First Amendment to Credit Agreement, dated as of September 
30, 2016, by and among Barnes & Noble, Inc., as borrower, the other borrowers, guarantors and lenders party thereto from time to time, Bank of America, N.A., as administrative agent, and the other agents party thereto. (32)
10.50 Employment Agreement between the Company and Demos Parneros, dated November 
21, 2016. (33)
10.51 Amendment to Employment Agreement between the Company and Demos Parneros, dated April 
27, 2017. (34)
10.52 Retention Bonus Agreement, dated February 
7, 2014, between the Company and Mary Amicucci. (35)
10.53 Offer of Employment to Mary Amicucci dated January 7, 2016. (35)
10.54 Barnes 
& Noble, Inc. 2017 Incentive Compensation Plan, Vice President, Merchandising. (35)
10.55 Consulting Agreement, dated July 
18, 2017, between the Company and David Deason. (35)
10.56 Form of Performance-Based Stock Unit Award Agreement pursuant to the Company’s Amended &
 Restated 2009 Incentive Plan. (35)
10.57 General Release and Waiver Agreement with Mary Amicuccis. (37)
13.1 The sections of the Company’s Annual Report entitled: “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis
 of Financial Condition and Results of Operations,” “Consolidated Statements of Operations,” “Consolidated Statements of Comprehensive Income (Loss),” “Consolidated Balance Sheets,” “Consolidated Statements of
Changes in Shareholders’ Equity,” “Consolidated Statements of Cash Flows,” “Notes to Consolidated Financial Statements” and “The Report of Independent Registered Public Accounting Firm.” (38)
14.1 Code of Business Conduct and Ethics. (38)
16.1 Letter re change in certifying accountant. (17)
21.1 List of Significant Subsidiaries. (38)
23.1 Consent of Ernst & Young, LLP. (38)
31.1 Certification by the Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a),
under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (38)

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Exhibit No.

Leírás

(6) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on December 19, 2008.
(7) Previously filed as an exhibit to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 16, 2009.
(8) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on August 10, 2009.
(9) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on November 18, 2009.
(10) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on May 13, 2010.
(11) Previously filed as an exhibit to the Company’s Form 10-Q for the fiscal quarter ended July 31, 2010.
(12) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on January 10, 2011.
(13) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on April 30, 2012.
(14) Previously filed as an exhibit to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on July 23,
2012.

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Exhibit No.

Leírás

(15) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on September 12, 2012.
(16) Previously filed as an exhibit to the Company’s Form 8-K/A filed with the SEC on October 2, 2012.
(17) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on October 19, 2012.
(18) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on December 24, 2013.
(19) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on March 13, 2014.
(20) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on June 5, 2014.
(21) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on December 4, 2014.
(22) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on February 17, 2015.
(23) Previously filed as an exhibit to the Company’s Form 10-Q filed with the SEC on March 10, 2015.

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Exhibit No.

Leírás

(24) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on July 14, 2015.
(25) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on July 27, 2015.
(26) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on August 3, 2015.
(27) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on August 6, 2015.
(28) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on December 7, 2015.
(29) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on April 7, 2016.
(30) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on May 18, 2016.
(31) Previously filed as an exhibit to the Company’s Form 10-K filed with the SEC on June 23, 2016.
(32) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on October 6, 2016.
(33) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on November 21, 2016.
(34) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on April 27, 2017.
(35) Previously filed as an exhibit to the Company’s Form 10-Q filed with the SEC on September 7, 2017.
(36) Previously filed as an exhibit to the Company’s Form 10-Q filed with the SEC on November 30, 2017.
(37) Previously filed as an exhibit to the Company’s Form 8-K filed with the SEC on September 29, 2017.
(38) Filed herewith.
(P) Paper filing.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

BARNES & NOBLE, INC.

(Registrant)

Által:

/s/ Demos Parneros

Demos Parneros
Chief Executive Officer
June 21, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name

Title

Date

/s/ Leonard Riggio

Chairman of the Board June 21, 2018
Leonard Riggio

/s/ Demos Parneros

Chief Executive Officer and Director June 21, 2018
Demos Parneros (principal executive officer)

/s/ Allen W. Lindstrom

Pénzügyi vezető June 21, 2018
Allen W. Lindstrom (principal financial officer)

/s/ Peter M. Herpich

Vice President and Corporate Controller June 21, 2018
Peter M. Herpich (principal accounting officer)

/s/ George Campbell, Jr.

Director June 21, 2018
George Campbell, Jr.

/s/ Mark D. Carleton

Director June 21, 2018
Mark D. Carleton

/s/ Scott S. Cowen

Director June 21, 2018
Scott S. Cowen

/s/ Al Ferrara

Director June 21, 2018
Al Ferrara

/s/ William T. Dillard II

Director June 21, 2018
William T. Dillard II

/s/ Paul Guenther

Director June 21, 2018
Paul Guenther

/s/ Patricia L. Higgins

Director June 21, 2018
Patricia L. Higgins

/s/ Kimberley A. Van Der Zon

Director June 21, 2018
Kimberley A. Van Der Zon

40

Exhibit 13.1

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial
data of Barnes & Noble, Inc. and its subsidiaries (collectively, the Company) set forth on the following pages should be read in conjunction with the consolidated financial statements and notes included elsewhere in this report. la
Company’s fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. The Statement of Operations Data for the 52 weeks ended April 28, 2018 (fiscal 2018), 52 weeks ended April 29, 2017 (fiscal
2017) and 52 weeks ended April 30, 2016 (fiscal 2016), and the Balance Sheet Data as of April 28, 2018 and April 29, 2017 are derived from, and are incorporated by reference to, audited consolidated financial statements which are
included elsewhere in this report. The Statement of Operations Data for the 52 weeks ended May 2, 2015 (fiscal 2015) and 53 weeks ended May 3, 2014 (fiscal 2014), the Balance Sheet Data as of April 30, 2016, May 2, 2015 and
May 3, 2014 are derived from audited consolidated financial statements not included elsewhere in this report.

Fiscal Year

(In thousands, except per share data)

Fiscal
2018
Fiscal
2017
Fiscal
2016
Fiscal
2015
Fiscal
2014

STATEMENT OF OPERATIONS DATA:

Sales

Barnes & Noble Retail

$ 3,575,614 3,784,655 4,028,614 4,108,243 4,295,140

NOOK

111,487 146,514 191,520 263,833 505,862

Elimination (a)

(24,821 ) (36,611 ) (56,290 ) (74,968 ) (167,657 )

Total sales

3,662,280 3,894,558 4,163,844 4,297,108 4,633,345

Cost of sales and occupancy

2,551,077 2,682,356 2,836,547 2,871,184 3,214,396

Gross profit

1,111,203 1,212,202 1,327,297 1,425,924 1,418,949

Selling and administrative expenses

999,109 1,040,007 1,176,778 1,192,065 1,287,163

Depreciation and amortization

106,340 117,887 135,863 143,665 168,793

Goodwill impairment

133,612 _—

Operating income (loss)

(127,858 ) 54,308 14,656 90,194 (37,007 )

Interest expense, net and amortization of deferred financing fees (b)

9,837 7,509 8,770 17,678 29,122

Income (loss) before taxes

(137,695 ) 46,799 5,886 72,516 (66,129 )

Income tax provision (benefit)

(12,215 ) 24,776 (8,814 ) 39,644 13,011

Net income (loss) from continuing operations

(125,480 ) 22,023 14,700 32,872 (79,140 )

Net income (loss) from discontinued operations

(39,146 ) 3,724 31,872

Net income (loss)

$ (125,480 ) 22,023 (24,446 ) 36,596 (47,268 )

Basic income (loss) per common share:

Income (loss) from continuing operations

$ (1.73 ) 0.30 0.05 0.15 (1.67 )

Income (loss) from discontinued operations

(0.54 ) 0.06 0.54

Basic income (loss) per common share

$ (1.73 ) 0.30 (0.49 ) 0.21 (1.12 )

Diluted income (loss) per common share:

Income (loss) from continuing operations

$ (1.73 ) 0.30 0.05 0.15 (1.67 )

Income (loss) from discontinued operations

(0.54 ) 0.06 0.54

Diluted income (loss) per common share

$ (1.73 ) 0.30 (0.49 ) 0.21 (1.12 )

Weighted average common shares outstanding:

Basic

72,588 72,188 72,410 60,842 58,971

Diluted

72,588 72,328 72,542 60,928 58,971

Dividends declared per common share

$ 0.60 0.60 0.60

F-1


(In thousands of dollars, except per share data)

Fiscal
2018
Fiscal
2017
Fiscal
2016
Fiscal
2015
Fiscal
2014

OTHER OPERATING DATA:

Number of Barnes & Noble Retail stores

630 633 640 648 661

Comparable sales increase (decrease):

Barnes & Noble Retail store sales (c)

(5.4 )% (6.3 )% 0.0 % (1.9 )% (5.8 )%

Capital expenditures

$ 87,651 96,258 94,274 94,805 96,728

BALANCE SHEET DATA:

Total assets – continuing operations

$ 1,749,568 1,932,921 2,012,782 2,045,104 2,270,649

Total assets – discontinued operations

$ 1,067,327 1,122,071

Total liabilities – continuing operations

$ 1,337,585 1,358,610 1,409,272 1,347,384 1,798,649

Total liabilities – discontinued operations

$ 379,630 357,180

Long-term debt

$ 158,700 64,900 47,200

Shareholders’ equity

$ 411,983 574,311 603,510 1,189,358 658,696

(a) Represents sales from NOOK to B&N Retail on a sell-through basis.

(b) Amounts for fiscal 2018, fiscal 2017, fiscal 2016, fiscal 2015 and fiscal 2014 are net of interest income of $0, $0, $0, $58 and $190, respectively.

(c) Comparable store sales increase (decrease) is calculated on a 52-week basis, including sales from stores that have been open for
at least 15 months and all eReader device revenue deferred in accordance with Accounting Standards Codification 605-25, Revenue Recognition, Multiple-Element Arrangements, and does not include
sales from closed or relocated stores.

F-2


MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Barnes & Noble, Inc.’s (Barnes & Noble or the Company) fiscal year is comprised of 52 or 53 weeks,
ending on the Saturday closest to the last day of April. As used in this section, “fiscal 2018” represents the 52 weeks ended April 28, 2018, “fiscal 2017” represents the 52 weeks ended April 29, 2017 and “fiscal
2016” represents the 52 weeks ended April 30, 2016.

General

Barnes & Noble, Inc., one of the nation’s largest booksellers,1 provides customers a unique experience across its multi-channel distribution platform. As of April 28, 2018, the
Company operates 630 bookstores in 50 states, maintains an eCommerce site, develops digital reading products and operates NOOK, one of the largest digital bookstores. Barnes & Noble is utilizing the strength of its retail footprint in
combination with its online and digital businesses to provide an omni-channel experience for its customers, fulfilling its commitment to offer customers any book, anytime, anywhere and in any format.

Barnes & Noble Retail (B&N Retail) operates 630 retail bookstores, primarily under the
Barnes & Noble Booksellers® trade name, and includes the Company’s eCommerce site. B&N Retail
also includes Sterling Publishing Co., Inc. (Sterling or Sterling Publishing), a leader in general trade book publishing. The NOOK segment represents the Company’s digital business, offering digital books and magazines for sale and consumption
online, NOOK®
2 reading devices, co-branded NOOK® tablets and reading software for iOS, Android and Windows. As of April 28, 2018, the Company employed
approximately 23,000 employees (8,000 full-time and 15,000 part-time employees).

The Company’s
principal business is the sale of trade books (generally, hardcover and paperback titles), mass market paperbacks (such as mystery, romance, science fiction and other popular fiction), children’s books, eBooks and other digital content, NOOK®
and related accessories, bargain books, magazines, gifts, café products and services, educational toys &
games, music and movies direct to customers through its bookstores or on www.barnesandnoble.com. The Company offers its customers a full suite of textbook options (new, used, digital and rental).

Segments

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 and makes decisions
on the allocation of resources. The Company’s two operating segments are B&N Retail and NOOK.

B&N Retail

This segment includes 630 bookstores as of April 28, 2018, primarily under the Barnes & Noble
Booksellers trade name. These Barnes & Noble stores generally offer a comprehensive trade book title base, a café, and departments dedicated to Juvenile, Toys & Games, DVDs, Music & Vinyl, Gift, Magazine, Bargain
products and a dedicated NOOK® area. The stores also offer a calendar of ongoing events, including author
appearances and children’s activities. The B&N Retail segment also includes the Company’s eCommerce website, www.barnesandnoble.com, and its publishing operation, Sterling Publishing.

1 Based upon sales reported in trade publications and public filings.
2

Any references to
NOOK® include the Company’s NOOK® Tablet, Samsung Galaxy Tab® la
NOOK®.
Samsung Galaxy Tab® S2 NOOK®. Samsung Galaxy Tab® E NOOK® and NOOK
GlowLight
TM 3 devices, each of which includes the
trademark symbol (®
or ™, as applicable) even if a trademark symbol is not included.

F-3


Barnes & Noble stores range in size from 3,000 to 60,000 square feet depending upon
market size, with an overall average store size of 26,000 square feet. In fiscal 2018, the Company reduced the Barnes & Noble store base by approximately 135,000 square feet, bringing the total square footage to 16.6 million square
feet, a net reduction of 0.8% from fiscal 2017.

Each Barnes & Noble store features an authoritative selection of
books, ranging from 19,000 to 143,000 titles. The comprehensive title selection is diverse and reflects local interests and regional titles and authors’ works. Bestsellers typically represent between approximately 4% and 6% of Barnes &
Noble store sales. Product Master, the Company’s proprietary inventory management database, has approximately 19.6 million titles. It includes approximately 7.2 million active titles and provides each store with comprehensive title
selections. By enhancing the Company’s existing merchandise replenishment systems, Product Master allows the Company to achieve higher in-stock positions and better productivity at the bookstore level
through efficiencies in receiving, cashiering and returns processing. Complementing this extensive on-site selection, all Barnes & Noble stores provide customers with access to the millions of books
available to online shoppers at www.barnesandnoble.com by offering an option to have the book sent to the store or shipped directly to the customer.

Sterling Publishing

Sterling Publishing is a
leading publisher of non-fiction trade titles. Founded in 1949, Sterling publishes a wide range of non-fiction and illustrated books and kits across a variety of
imprints, in categories such as health & wellness, music & popular culture, food & wine, crafts, puzzles & games and history & current affairs, as well as a large children’s line. Sterling, with a
solid backlist and robust value publishing program, has a title base of approximately 15,000 print books and eBooks. In addition, Sterling also distributes approximately 1,300 titles on behalf of client publishers.

NOOK

This segment represents 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 and sales of NOOK®
devices and accessories to B&N Retail. The underlying strategy of the NOOK business is to offer customers any
digital book, newspaper or magazine, anytime, on any device. The Company remains committed to delivering to customers the best digital bookstore experience, providing easy access to Barnes & Noble’s expansive digital collection of over
three million eBooks, digital magazines and newspapers, while rationalizing its existing cost structure. As part of this commitment, the Company partners with Samsung to develop co-branded NOOK® tablets that feature the award-winning Barnes & Noble digital reading experience, while continuing to
develop and offer its own black-and-white

NOOK® eReaders and NOOK® Tablet.

F-4


Results of Operations

Fiscal Year

Fiscal 2018 Fiscal 2017 Fiscal 2016

Sales (in thousands)

$ 3,662,280 3,894,558 4,163,844

Net Income (Loss) From Continuing Operations (in thousands)

$ (125,480 ) 22,023 14,700

Net Loss From Discontinued Operations (in thousands)

$ (39,146 )

Net Income (Loss) (in thousands)

$ (125,480 ) 22,023 (24,446 )

Diluted Income (Loss) Per Common Share From Continuing Operations

$ (1.73 ) 0.30 0.05

Diluted Loss Per Common Share From Discontinued Operations

$ (0.54 )

Diluted Income (Loss) Per Common Share

$ (1.73 ) $ 0.30 $ (0.49 )

Comparable Sales Increase (Decrease)

Barnes & Noble Retail store sales (a)

(5.4 )% (6.3 )% 0.0 %

Stores Opened

Barnes & Noble Retail stores

3 3 0

Stores Closed

Barnes & Noble Retail stores

6 10 8

Number of Stores Open at Year End

Barnes & Noble Retail stores

630 633 640

Square Feet of Selling Space at Year End (in millions)

Barnes & Noble Retail stores

16.6 16.7 16.9

(a) Comparable store sales increase (decrease) is calculated on a 52-week basis, including sales from stores that have been open for
at least 15 months and all eReader device revenue deferred in accordance with Accounting Standards Codification (ASC) 605-25, Revenue Recognition, Multiple-Element Arrangements, and does not
include sales from closed or relocated stores.

The following table sets forth, for the periods indicated, the
percentage relationship that certain items bear to total sales of the Company:

Fiscal Year

Fiscal 2018 Fiscal 2017 Fiscal 2016

Sales

100.0 % 100.0 % 100.0 %

Cost of sales and occupancy

69.7 68.9 68.1

Gross profit

30.3 31.1 31.9

Selling and administrative expenses

27.3 26.7 28.3

Depreciation and amortization

2.9 3.0 3.3

Goodwill impairment

3.6 0.0 0.0

Operating income (loss)

(3.5 ) 1.4 0.4

Interest expense, net and amortization of deferred financing fees

0.3 0.2 0.2

Income (loss) before taxes

(3.8 ) 1.2 0.1

Income tax provision (benefit)

(0.3 ) 0.6 (0.2 )

Net income (loss) from continuing operations

(3.4 ) 0.6 0.4

Net loss from discontinued operations

(0.9 )

Net income (loss)

(3.4 )% 0.6 % (0.6 )%

F-5


Business Overview

Barnes & Noble has been experiencing declining sales trends primarily due to lower store traffic. The Company has been able to
offset some of the traffic decline through its efforts to increase conversion through higher customer engagement. Additionally, the Company has been able to partially mitigate the impact of the sales decline on profit levels through cost reductions.
While the Company believes it has lost share on its recent sales performance, it sees opportunities in an industry that has become more stable.

To improve its performance, the Company has initiated a strategic turnaround plan, focused on strengthening the core business by enhancing the customer value proposition; improving profitability through
an aggressive expense management program, which will be used to fund growth initiatives; accelerating execution through simplification; and innovating for the future, which will position the Company for long-term growth.

To strengthen its core business, the Company is enhancing this customer value proposition by improving its merchandise mix, enhancing the
overall shopping experience, increasing the value of its Membership Program and improving its omni-channel capabilities. The Company will leverage the strength of its Barnes & Noble brand, knowledgeable booksellers, vast book selection and
retail footprint to attract customers and grow sales.

Merchandising initiatives are focused on increasing the impact of
promotional activities, narrowing product assortments, improving SKU productivity, improving inventory management processes, testing changes to existing store layouts and remerchandising select business units in stores. Additionally, the Company has
created a new business development team, which will introduce new business categories that are complementary to its existing businesses. The Company believes there is opportunity to increase conversion through higher customer engagement and by
improving navigation and discovery throughout the store, including a customer friendly and more intuitive organization of books and improved signage for easier browsing within and across sections.

In-store events also drive traffic, reinforcing Barnes & Noble as a destination where
customers can meet, browse and discover. The Company is also utilizing social media, where booksellers communicate events, promotions and new product offerings with customers at the local level in order to drive traffic.

The Company’s Membership Program provides the Company with valuable data and insights into its customer base, enabling the Company
to better understand and market to its customers. Members are more productive than non-members, as they spend more and visit more often. The Company continues to test programs to grow sales to both members and
non-members, increase membership, improve price perception and enhance its overall customer value proposition.

The Company is focused on simplification throughout its organization to create efficiencies and reinvest resources to support sales growth. The Company is also committed to right sizing its cost
structure. At B&N Retail, the Company has implemented a new labor model for its stores, which allows Store Managers to adjust staff up or down based on the needs of the business, increase store productivity and streamline store operations. cette
action resulted in the elimination of certain store positions. At NOOK, the Company exited non-core businesses and outsourced certain functions. NOOK expects to continue to
re-calibrate its cost structure commensurate with sales.

F-6


In addition to initiatives focused on growing sales through its existing store base, the
Company is innovating for the future and is expecting to open smaller, newly designed prototype stores later this year, which it believes could foster sales growth in the future. The Company has also created a Test & Learn pipeline process,
through which it is testing a number of new initiatives to improve future performance.

52 Weeks Ended April 28, 2018 Compared with 52
Weeks Ended April 29, 2017

The following tables summarize the Company’s results of operations for the 52 weeks ended
April 28, 2018 and 52 weeks ended April 29, 2017.

Sales

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
%
Total
April 29,
2017
%
Total

B&N Retail

$ 3,575,614 97.6 % $ 3,784,655 97.2 %

NOOK

111,487 3.0 % 146,514 3.8 %

Elimination

(24,821 ) (0.7 )% (36,611 ) (0.9 )%

Total Sales

$ 3,662,280 100.0 % $ 3,894,558 100.0 %

The Company’s sales decreased $232.3 million, or 6.0%, during fiscal 2018 to $3.662 billion from
$3.895 billion during fiscal 2017. The changes by segment are as follows:

B&N Retail sales decreased $209.0 million, or 5.5%, to $3.576 billion from $3.785 billion during the same period one year ago, and
accounted for 97.6% of total Company sales. Comparable store sales decreased $172.4 million, or 5.4%, as compared to the prior year on lower store traffic and comparisons to the prior year release of Harry Potter and the Cursed Child.
Closed stores decreased sales by $31.3 million, while new stores increased sales by $11.2 million. Online sales decreased $29.5 million, or 9.6%, on lower conversion rates, which were impacted by reduced promotional activity and
comparisons to the prior year eBook settlement. B&N Retail also includes third-party sales of Sterling Publishing Co., Inc., which increased by $3.8 million, or 10.6%, versus the prior year. Gift card breakage increased $8.4 million as
redemptions continue to run lower than historical patterns.

Of the $172.4 million
decrease in comparable store sales, book categories decreased sales by $83.0 million, or 4.0%, due primarily to declines in Juvenile, Trade and Bargain titles, while non-book categories decreased sales by
$77.0 million, or 7.0%, primarily on Gift, Music and DVD, partially offset by increases in Toys & Games. Comparable sales of NOOK® products at B&N Retail stores decreased $12.4 million, or 33.6%, primarily on lower device unit volume and lower average selling prices.

NOOK sales decreased $35.0 million, or 23.9%, to $111.5 million from $146.5 million during the same period one year ago, and accounted
for 3.0% of total Company sales. Digital content sales decreased $21.4 million, or 20.1%, compared to the prior year primarily on lower unit sales. Device and accessories sales decreased $13.6 million, or 34.0%, primarily on lower average
selling prices and lower unit sales.

Elimination sales, which represent sales from NOOK to B&N Retail on a sell-through basis, decreased $11.8 million, or 32.2%, versus the prior
year. NOOK sales, net of elimination, accounted for 2.4% of total Company sales.

F-7


In fiscal 2018, the Company opened three and closed six Barnes & Noble stores, bringing its total
number of B&N Retail stores to 630, with 16.6 million square feet, in the 50 states.

Cost of Sales and Occupancy

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
% Sales April 29,
2017
% Sales

B&N Retail

$ 2,521,419 70.5 % $ 2,636,113 69.7 %

NOOK

54,479 48.9 % 82,854 56.6 %

Elimination

(24,821 ) (22.3 )% (36,611 ) (25.0 )%

Total Cost of Sales and

Occupancy

$ 2,551,077 69.7 % $ 2,682,356 68.9 %

The Company’s cost of sales and occupancy includes costs such as merchandise costs, distribution center costs
(including payroll, freight, supplies and other operating expenses), rental expense, common area maintenance and real estate taxes, partially offset by landlord tenant allowances amortized over the life of the lease.

Cost of sales and occupancy decreased $131.3 million, or 4.9%, to $2.551 billion in fiscal 2018 from $2.682 billion in fiscal 2017. Cost
of sales and occupancy increased as a percentage of sales to 69.7% in fiscal 2018 from 68.9% in fiscal 2017. The changes by segment are as follows:

B&N Retail cost of sales and occupancy increased as a percentage of sales to 70.5% from 69.7%, or 85 basis points, during the same period one year
ago primarily due to occupancy deleverage (60 basis points) and higher markdowns to clear non-returnable merchandise (30 basis points). The remaining variance was attributable to sales mix and the general
timing of expenses.

NOOK cost of sales and occupancy decreased as a percentage of sales to 48.9% from 56.6% during the same period one year ago primarily on lower
occupancy and sales mix.

Gross Profit

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
% Sales April 29,
2017
% Sales

B&N Retail

$ 1,054,195 29.5 % $ 1,148,542 30.3 %

NOOK

57,008 65.8 % 63,660 57.9 %

Total Gross Profit

$ 1,111,203 30.3 % $ 1,212,202 31.1 %

The Company’s consolidated gross profit decreased $101.0 million, or 8.3%, to $1.111 billion in fiscal
2018 from $1.212 billion in fiscal 2017. This change was due to the matters discussed above.

F-8


Selling and Administrative Expenses

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
% Sales April 29,
2017
% Sales

B&N Retail

$ 945,643 26.4 % $ 959,002 25.3 %

NOOK

53,466 61.7 % 81,005 73.7 %

Total Selling and Administrative

Expenses

$ 999,109 27.3 % $ 1,040,007 26.7 %

Selling and administrative expenses decreased $40.9 million, or 3.9%, to $999.1 million in fiscal 2018 from
$1.040 billion in fiscal 2017. Selling and administrative expenses increased as a percentage of sales to 27.3% in fiscal 2018 from 26.7% in fiscal 2017. The changes by segment are as follows:

B&N Retail selling and administrative expenses decreased $13.4 million as compared to prior year, while increasing 110 basis points as a
percentage of sales to 26.4% from 25.3% for the year. The current year included severance costs of $16.2 million (45 basis points). The Company implemented a new labor model for its stores, resulting in the elimination of certain store
positions. Unfavorable variances to the prior year also included higher store payroll (25 basis points on store sales) as sales deleverage and wage increases outpaced productivity gains, higher employee benefit costs (20 basis points) on increased
medical claims and strategic consulting costs (20 basis points). The remaining variance was attributable to sales deleverage and the general timing of expenses.

NOOK selling and administrative expenses decreased $27.5 million as compared to the prior year, decreasing as a percentage of sales to 61.7% from
73.7% during the same period a year ago. The prior year included severance and transitional costs of $10.7 million related to the outsourcing of certain services and the closure of NOOK’s California and Taiwan offices. Excluding these
costs, the decrease in dollars was primarily attributable to continued cost rationalization efforts, as well as lower variable costs on the sales decline. The current year also includes a favorable expense impact from a channel partner settlement.

Goodwill Impairment

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
% Sales April 29,
2017
% Sales

B&N Retail

$ 133,612 3.7 % $ 0.0 %

NOOK

0.0 % 0.0 %

Total Goodwill Impairment

$ 133,612 3.6 % $ 0.0 %

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying consolidated balance
sheets. ASC 350-30, Goodwill and Other Intangible Assets, requires that goodwill and other unamortizable intangible assets be tested for impairment at least annually or earlier if there are impairment
indicators.

In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (ASU) 2017-04, Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment (ASU 2017-04). which simplifies the subsequent measurement of goodwill by removing the
requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment.

F-9


Following the announcement on January 4, 2018 of the Company’s holiday sales results and its
revised outlook, the market price of the Company’s common stock sharply declined. Due to these new impairment indicators, the Company performed an interim goodwill impairment test as of December 30, 2017. As a result of this interim
testing, the Company recognized an impairment of its B&N Retail reporting unit goodwill of $133.6 million during the third quarter of fiscal 2018.

Depreciation and Amortization

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
% Sales April 29,
2017
% Sales

B&N Retail

$ 94,334 2.6 % $ 98,877 2.6 %

NOOK

12,006 13.9 % 19,010 17.3 %

Total Depreciation and Amortization

$ 106,340 2.9 % $ 117,887 3.0 %

Depreciation and amortization decreased $11.5 million, or 9.8%, to $106.3 million in fiscal 2018 from
$117.9 million in fiscal 2017. This decrease was primarily attributable to fully depreciated assets, partially offset by additional capital expenditures.

Operating Income (Loss)

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
% Sales April 29,
2017
% Sales

B&N Retail

$ (119,394 ) (3.3 )% $ 90,663 2.4 %

NOOK

(8,464 ) (9.8 )% (36,355 ) (33.1 )%

Total Operating Income (Loss)

$ (127,858 ) (3.5 )% $ 54,308 1.4 %

The Company’s consolidated operating income decreased $182.2 million, or 335.4%, to an operating loss of
$127.9 million in fiscal 2018 from an operating income of $54.3 million in fiscal 2017. This change was due to the matters discussed above.

Interest Expense, Net and Amortization of Deferred Financing Fees

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28, 2018 April 29, 2017 % of Change

Interest Expense, Net and Amortization of Deferred Financing Fees

$ 9,837 $ 7,509 31.0 %

Net interest expense and amortization of deferred financing fees increased $2.3 million, or 31.0%, to
$9.8 million in fiscal 2018 from $7.5 million in fiscal 2017 primarily on higher average borrowings.

F-10


Income Tax Provision (Benefit)

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
Effective
Rate
April 29,
2017
Effective
Rate

Income Tax Provision (Benefit)

$ (12,215 ) 8.9 % $ 24,776 52.9 %

The Company recorded an income tax benefit of $12.2 million in fiscal 2018 compared with an income tax provision of
$24.8 million in fiscal 2017. The Company’s effective tax rate was 8.9% and 52.9% in fiscal 2018 and fiscal 2017, respectively. The Company’s effective tax rate differs from the statutory rate due to the impact of the remeasurement of
deferred taxes resulting from the Tax Cuts and Jobs Act, the impact of return to provision adjustments, the establishment of valuation allowance on definite lived NOLs, and state tax provision, net of federal benefit. The prior year rate was
impacted primarily by changes in uncertain tax positions and changes in deferred taxes and payables.

In accordance with accounting principles
generally accepted in the United States (GAAP) rules on accounting for income taxes, the Company evaluates the realizability of its deferred tax assets at each reporting date. The Company records a valuation allowance when it determines that it is
more likely than not that all or a portion of a particular deferred tax asset will not be realized. As part of this evaluation, the Company reviews all evidence, both positive and negative, to determine if a valuation allowance is needed. la
Company’s review of positive evidence included the review of historic profitability, projected profitability, feasible tax planning strategies that may be implemented and the reversal of temporary items. The Company determined that there was
sufficient negative evidence to establish valuation allowances against certain deferred tax assets, totaling $36.7 million. The Company will monitor the need for additional valuation allowances at each quarter in the future and adjust the
valuation allowance as necessary.

Net Income (Loss)

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 28,
2018
Diluted
EPS
April 29,
2017
Diluted
EPS

Net Income (Loss)

$ (125,480 ) $ (1.73 ) $ 22,023 $ 0.30

As a result of the factors discussed above, the Company reported a consolidated net loss of $125.5 million (or $1.73
per diluted share) during fiscal 2018, compared with consolidated net income of $22.0 million (or $0.30 per diluted share) during fiscal 2017.

F-11


52 Weeks Ended April 29, 2017 Compared with 52 Weeks Ended April 30, 2016

The following tables summarize the Company’s results of operations for the 52 weeks ended April 29, 2017 and 52 weeks ended April 30, 2016.

Sales

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
% Total April 30,
2016
% Total

B&N Retail

$ 3,784,655 97.2 % $ 4,028,614 96.8 %

NOOK

146,514 3.8 % 191,520 4.6 %

Elimination

(36,611 ) (0.9 )% (56,290 ) (1.4 )%

Total Sales

$ 3,894,558 100.0 % $ 4,163,844 100.0 %

The Company’s sales decreased $269.3 million, or 6.5%, during fiscal 2017 to $3.895 billion from
$4.164 billion during fiscal 2016. The changes by segment are as follows:

B&N Retail sales decreased $244.0 million, or 6.1%, to $3.785 billion from $4.029 billion during the same period one year ago, and
accounted for 97.2% of total Company sales. Comparable store sales decreased $216.5 million, or 6.3%, as compared to the prior year. Closed stores decreased sales by $46.7 million. B&N Retail also includes third-party sales of Sterling
Publishing Co., Inc., which decreased by $13.4 million, or 27.3%, versus the prior year on lower coloring book sales. Online sales increased $10.8 million, or 3.7%, versus the prior year period on benefits from an eBook settlement, site
improvements and increased promotional activity. New stores increased sales by $7.7 million. Gift card breakage increased $6.5 million as redemptions continue to run lower than historical patterns.

Of the $216.5 million decrease in comparable store sales, core comparable store sales, which exclude sales of
NOOK® products, decreased $194.2 million, or 5.7%, as compared to the prior year due in large part to lower
traffic, comparisons to last year’s coloring book and artist supplies phenomenon and the challenging retail environment. Book categories decreased sales by $134.5 million, or 6.0%, on lower sales of Trade, Bargain (primarily coloring
books) and Juvenile titles, while non-book core categories decreased sales by $59.7 million, or 5.1%, on declines in the DVD, Café, Newsstand and Gift businesses. Comparable sales of NOOK® products at B&N Retail stores decreased $22.3 million, or 37.5%, primarily on lower device unit volume and
lower average selling prices.

NOOK sales decreased $45.0 million, or 23.5%, to $146.5 million from $191.5 million during the same period one year ago, and accounted
for 3.8% of total Company sales. Digital content sales decreased $23.6 million, or 18.1%, compared to prior year on lower unit sales, partially offset by higher average selling prices. Current year content volume benefited from an eBook
settlement. Device and accessories sales decreased $21.4 million, or 34.9%, primarily on lower unit sales and lower average selling prices.

Elimination sales, which represent sales from NOOK to B&N Retail on a sell-through basis, decreased $19.7 million, or 35.0%, versus the prior
year. NOOK sales, net of elimination, accounted for 2.8% of total Company sales.

F-12


In fiscal 2017, the Company opened three and closed ten Barnes & Noble stores, bringing its total
number of B&N Retail stores to 633, with 16.7 million square feet, in the 50 states.

Cost of Sales and Occupancy

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
% Sales April 30,
2016
% Sales

B&N Retail

$ 2,636,113 69.7 % $ 2,770,209 68.8 %

NOOK

82,854 56.6 % 122,628 64.0 %

Elimination

(36,611 ) (25.0 )% (56,290 ) (29.4 )%

Total Cost of Sales and Occupancy

$ 2,682,356 68.9 % $ 2,836,547 68.1 %

The Company’s cost of sales and occupancy includes costs such as merchandise costs, distribution center costs
(including payroll, freight, supplies and other operating expenses), rental expense, common area maintenance and real estate taxes, partially offset by landlord tenant allowances amortized over the life of the lease.

Cost of sales and occupancy decreased $154.2 million, or 5.4%, to $2.682 billion in fiscal 2017 from $2.837 billion in fiscal 2016. Cost
of sales and occupancy increased as a percentage of sales to 68.9% in fiscal 2017 from 68.1% in fiscal 2016. The changes by segment are as follows:

B&N Retail cost of sales and occupancy increased as a percentage of sales to 69.7% from 68.8%, or 90 basis points, during the same period one year
ago primarily on occupancy deleverage (60 basis points), higher markdowns (50 basis points) from promotional activity, including Harry Potter and the Cursed Child, as well as markdowns to clear
non-returnable merchandise resulting from the holiday sales shortfall. The remaining variance included product mix, sales deleverage and general timing differences.

NOOK cost of sales and occupancy decreased as a percentage of sales to 56.6% from 64.0% during the same period one year ago. This decrease was
primarily due to sales mix, improved device margins and a favorable channel partner settlement.

Gross Profit

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
% Sales April 30,
2016
% Sales

B&N Retail

$ 1,148,542 30.3 % $ 1,258,405 31.2 %

NOOK

63,660 57.9 % 68,892 50.9 %

Total Gross Profit

$ 1,212,202 31.1 % $ 1,327,297 31.9 %

The Company’s consolidated gross profit decreased $115.1 million, or 8.7%, to $1.212 billion in fiscal
2017 from $1.327 billion in fiscal 2016. This decrease was due to the matters discussed above.

F-13


Selling and Administrative Expenses

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
% Sales April 30,
2016
% Sales

B&N Retail

$ 959,002 25.3 % $ 1,043,221 25.9 %

NOOK

81,005 73.7 % 133,557 98.8 %

Total Selling and Administrative Expenses

$ 1,040,007 26.7 % $ 1,176,778 28.3 %

Selling and administrative expenses decreased $136.8 million, or 11.6%, to $1.040 billion in fiscal 2017 from
$1.177 billion in fiscal 2016. Selling and administrative expenses decreased as a percentage of sales to 26.7% in fiscal 2017 from 28.3% in fiscal 2016. The changes by segment are as follows:

B&N Retail selling and administrative expenses decreased $84.2 million as compared to prior year, decreasing 60 basis points as a percentage
of sales to 25.3% from 25.9% for the year. Favorable variances to the prior year include lower pension expense (60 basis points) on the prior year pension settlement charge, lower holiday advertising (45 basis points) and lower website expenses (25
basis points) as the prior year included investments to stabilize the site and improve traffic and customer experience. The prior year also included a net CEO separation-related severance charge of $10.5 million (25 basis points). Unfavorable
variances to the prior year include higher store payroll (65 basis points on store sales) as sales deleverage and wage increases offset productivity gains, higher non-CEO severance costs (25 basis points)
primarily resulting from a cost reduction program and a severance charge (net of reversal of expense relating to equity awards) of $3.0 million resulting from the current year CEO departure (10 basis points). The remaining variance included the
general timing of expenses.

NOOK selling and administrative expenses decreased $52.6 million as compared to the prior year, decreasing as a percentage of sales to 73.7% from
98.8% during the same period a year ago. Current year expenses include severance and transitional costs of $10.7 million related to the outsourcing of certain services and the closure of its California and Taiwan offices. Excluding these costs,
the decrease in dollars was primarily attributable to continued cost rationalization efforts, including lower compensation, as well as lower variable costs on the sales decline.

Depreciation and Amortization

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
% Sales April 30,
2016
% Sales

B&N Retail

$ 98,877 2.6 % $ 101,888 2,5 %

NOOK

19,010 17.3 % 33,975 25.1 %

Total Depreciation and Amortization

$ 117,887 3.0 % $ 135,863 3.3 %

Depreciation and amortization decreased $18.0 million, or 13.2%, to $117.9 million in fiscal 2017 from
$135.9 million in fiscal 2016. This decrease was primarily attributable to fully depreciated assets, partially offset by additional capital expenditures.

F-14


Operating Income (Loss)

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
% Sales April 30,
2016
% Sales

B&N Retail

$ 90,663 2.4 % $ 113,296 2.8 %

NOOK

(36,355 ) (33.1 )% (98,640 ) (72.9 )%

Total Operating Income

$ 54,308 1.4 % $ 14,656 0.4 %

The Company’s consolidated operating income increased $39.7 million, or 270.6%, to an operating income of
$54.3 million in fiscal 2017 from an operating income of $14.7 million in fiscal 2016. This increase was due to the matters discussed above.

Interest Expense, Net and Amortization of Deferred Financing Fees

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
April 30,
2016
% of Change

Interest Expense, Net and Amortization of Deferred Financing Fees

$ 7,509 $ 8,770 (14.4 )%

Net interest expense and amortization of deferred financing fees decreased $1.3 million, or 14.4%, to
$7.5 million in fiscal 2017 from $8.8 million in fiscal 2016. This decrease was primarily due to lower deferred financing fees in conjunction with the refinancing of the credit facility in August 2015.

Income Tax Provision (Benefit)

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
Effective
Rate
April 30,
2016
Effective
Rate

Income Tax Provision (Benefit)

$ 24,776 52.9 % $ (8,814 ) (149.7 )%

The Company recorded an income tax provision of $24.8 million in fiscal 2017 compared with an income tax benefit of
$8.8 million in fiscal 2016. The Company’s effective tax rate was 52.9% and (149.7)% in fiscal 2017 and fiscal 2016, respectively. The Company’s effective tax rate differs from the statutory rate due to the impact of permanent items
such as meals and entertainment, non-deductible executive compensation, tax credits, changes in uncertain tax positions and the impact of return to provision adjustments and state tax provision, net of federal
benefit. The Company continues to maintain a valuation allowance against certain state items. The prior year rate was impacted by uncertain tax positions, finalization of the federal income tax audit covering the 2008 through 2012 tax years, the
closure of many state taxing jurisdiction statutes, the impact of new legislation enacted by Congress permanently reinstating the research and development credit and the impact of filing the income tax returns.

F-15


In accordance with United States GAAP rules on accounting for income taxes, the Company evaluates the
realizability of its deferred tax assets at each reporting date. The Company records a valuation allowance when it determines that it is more likely than not that all or a portion of a particular deferred tax asset will not be realized. As part of
this evaluation, the Company reviews all evidence, both positive and negative, to determine if a valuation allowance is needed. The Company’s review of positive evidence included the review of historic profitability, projected profitability,
feasible tax planning strategies that may be implemented and the reversal of temporary items. The Company determined that there was sufficient negative evidence to establish valuation allowances against certain deferred tax assets, totaling
$7.6 million. The Company will monitor the need for additional valuation allowances at each quarter in the future and adjust the valuation allowance as necessary.

Net Income from Continuing Operations

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
Diluted EPS April 30,
2016
Diluted EPS

Net Income from Continuing

Operations

$ 22,023 $ 0.30 $ 14,700 $ 0.05

As a result of the factors discussed above, the Company reported a consolidated net income from continuing operations of
$22.0 million (or $0.30 per diluted share) during fiscal 2017, compared with consolidated net income from continuing operations of $14.7 million (or $0.05 per diluted share) during fiscal 2016.

Net Loss from Discontinued Operations

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
Diluted EPS April 30,
2016
Diluted EPS

Net Loss from Discontinued Operations

$ $ $ (39,146 ) $ (0.54 )

The Company has recognized the separation of Barnes & Noble Education, Inc. (B&N Education) (the Spin-Off) in accordance with ASC 205-20, Discontinued Operations. As such, the historical results of B&N Education have been classified as discontinued operations.
See Note 16 to the Consolidated Financial Statements for a further discussion on the separation of B&N Education.

Discontinued operations
for fiscal 2016 primarily consisted of pre-spin B&N Education results, investment banking fees (as they directly related to the Spin-Off) and separation-related
costs, and excluded corporate allocation adjustments with B&N Retail.

Net Income (Loss)

52 Weeks Ended 52 Weeks Ended

Dollars in thousands

April 29,
2017
Diluted EPS April 30,
2016
Diluted EPS

Net Income (Loss)

$ 22,023 $ 0.30 $ (24,446 ) $ (0.49 )

As a result of the factors discussed above, the Company reported a consolidated net income of $22.0 million (or
$0.30 per diluted share) during fiscal 2017, compared with consolidated net loss of $24.4 million (or $0.49 per diluted share) during fiscal 2016.

F-16


Seasonality

The B&N Retail business, like that of many retailers, is seasonal, with the major portion of sales and operating income typically realized during its third fiscal quarter, which includes the holiday
selling season.

The NOOK business, like that of many technology companies, is impacted by the launch of new products and the
promotional efforts to support those new products, as well as the traditional retail holiday selling seasonality.

Liquidity and Capital
Resources

The primary sources of the Company’s cash are net cash flows from operating activities, funds available
under its credit facility and short-term vendor financing.

Cash Flows

The Company’s cash and cash equivalents were $10.8 million as of April 28, 2018, compared with $12.0 million as of
April 29, 2017. The decrease in cash and cash equivalents of $1.2 million versus the prior year period was due to the earnings decline, changes in working capital and cash flows as outlined below.

Net cash flows provided by operating activities for fiscal 2018 were $37.1 million, as compared to net cash flows provided by
operating activities of $146.8 million for fiscal 2017. The unfavorable year-over-year comparison was primarily attributable to changes in working capital and the earnings decline.

Net cash flows used in investing activities for fiscal 2018 were $87.7 million, as compared to net cash flows used in investing
activities of $96.3 million for fiscal 2017. The Company’s investing activities primarily consisted of capital expenditures for the maintenance of existing stores, merchandising initiatives, new store construction and enhancements to
systems and the website.

Net cash flows provided by financing activities for fiscal 2018 were $49.3 million, as compared
to net cash flows used in financing activities of $52.4 million for fiscal 2017. The Company’s financing activities during fiscal 2018 consisted primarily of net proceeds on its credit facility, offset by common dividends. Financing
activities during fiscal 2017 consisted primarily of common dividends and share repurchases, partially offset by net proceeds on its credit facility.

Over the past 12 months, the Company has returned $43.6 million in cash to its shareholders through dividends.

Additional year-over-year balance sheet changes include the following:

Receivables, net decreased $2.7 million, or 4.1%, to $64.6 million as of April 28, 2018, compared to $67.3 million as of
April 29, 2017.

Merchandise inventories, net increased $11.3 million, or 1.2%, to $958.2 million as of April 28, 2018, compared to $946.9 million
as of April 29, 2017 due in part to the timing of merchandise returns.

F-17


Prepaid expenses and other current assets decreased $36.7 million, or 36.0%, to $65.2 million as of April 28, 2018, compared to
$101.8 million as of April 29, 2017, primarily related to income taxes.

Property and equipment, net decreased $20.6 million, or 7.5%, to $255.5 million as of April 28, 2018, compared to $276.1 million as
of April 29, 2017, as depreciation outpaced capital expenditures.

Goodwill decreased $135.8 million, or 65.5%, to $71.6 million as of April 28, 2018, compared to $207.4 million as of April 29,
2017, due to a $133.6 million impairment charge recorded during the third quarter of fiscal 2018.

Intangible assets, net decreased $0.6 million, or 0.2%, to $309.6 million as of April 28, 2018, compared to $310.2 million as of
April 29, 2017, on additional amortization.

Other non-current assets increased $2.9 million, or 26.1%, to $14.1 million as of April 28,
2018, compared to $11.2 million as of April 29, 2017, primarily related to income taxes, partially offset by amortization of deferred financing fees.

Accounts payable decreased $14.8 million, or 3.1%, to $458.9 million as of April 28, 2018, compared to $473.7 million as of
April 29, 2017. Accounts payable represented 47.9% and 50.0% of merchandise inventories as of April 28, 2018 and April 29, 2017, respectively. This ratio is subject to changes in product mix and the timing of purchases, payments and
returns.

Accrued liabilities decreased $22.9 million, or 8.1%, to $260.2 million as of April 28, 2018, compared to $283.2 million as of
April 29, 2017. Accrued liabilities include deferred income, compensation, occupancy related, legal and other selling and administrative miscellaneous accruals.

Gift card liabilities decreased $28.0 million, or 8.0%, to $323.5 million as of April 28, 2018, compared to $351.4 million as of
April 29, 2017. The Company estimates the portion of the gift card liability for which the likelihood of redemption is remote based upon the Company’s historical redemption patterns. The Company recognized gift card breakage of
$43.9 million and $35.5 million during fiscal 2018 and fiscal 2017, respectively. Gift card breakage increased over last year as redemptions continue to run lower than historical patterns. Additional breakage may be required if gift card
redemptions continue to run lower than historical patterns.

Deferred taxes decreased $34.1 million, or 39.6%, to $52.0 million as of April 28, 2018, compared to $86.1 million as of
April 29, 2017 due to the remeasurement of deferred taxes as a result of the Tax Cuts and Jobs Act and the deferred tax impact of the goodwill impairment charge, partially offset by the valuation allowance recorded.

Other long-term liabilities decreased $15.0 million, or 15.1%, to $84.3 million as of April 28, 2018, compared to $99.3 million as
of April 29, 2017, primarily due to lower deferred rent.

The Company has
arrangements with third-party manufacturers to produce certain NOOK® products. These manufacturers procure and
assemble unfinished parts and components from third-party suppliers based on forecasts provided by the Company. Given production lead times, commitments are generally made far in advance of finished product delivery. Based on current purchase
commitments and product development plans, the Company did not record any provision for purchase commitments. Future charges may be required based on changes in forecasted sales or strategic direction.

Capital Structure

Credit Facility

On August 3, 2015, the Company and certain of its subsidiaries entered into a credit agreement (Credit Agreement)
with Bank of America, N.A., as administrative agent, collateral agent and swing line lender, and the other lenders from time to time party thereto, under which the lenders committed to provide a five-year asset-backed revolving credit facility in an
aggregate committed principal amount of up to $700.0 million (Revolving Credit Facility). On September 30, 2016, the Company amended the

F-18


Credit Agreement to provide for a new “first-in, last-out” revolving credit facility (the FILO Credit
Facility and, together with the Revolving Credit Facility, the Credit Facility) in an aggregate principal amount of up to $50.0 million, which supplements availability under the Revolving Credit Facility. The Company generally must draw down
the FILO Credit Facility before making any borrowings under the Revolving Credit Facility.

Merrill Lynch, Pierce,
Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Wells Fargo Bank, N.A. and SunTrust Robinson Humphrey, Inc. are the joint lead arrangers for the Credit Facility. The Credit Facility replaced the prior credit facility. Proceeds from
the Credit Facility are used for general corporate purposes, including seasonal working capital needs.

The Company and
certain of its subsidiaries are permitted to borrow under the Credit Facility. The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility (collectively, the
Loan Parties), but excluding the equity interests in the Company and its subsidiaries, intellectual property, equipment and certain other property. Borrowings under the Credit Facility are limited to a specified percentage of eligible collateral.
The Company has the option to request an increase in commitments under the Credit Facility of up to $250.0 million, subject to certain restrictions.

The Credit Facility allows the Company to declare and pay up to $70.0 million in dividends annually to its stockholders without compliance with any availability or ratio-based limitations.

Interest under the Revolving Credit Facility accrues, at the election of the Company, at a LIBOR or alternate base rate,
plus, in each case, an applicable interest rate margin, which is determined by reference to the level of excess availability under the Revolving Credit Facility. Through the end of the fiscal quarter during which the closing of the Revolving Credit
Facility occurred, loans under the Revolving Credit Facility bore interest at LIBOR plus 1.750% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 0.750% per annum, in the alternative, and thereafter the interest rate
began to fluctuate between LIBOR plus 2.000% per annum and LIBOR plus 1.500% per annum (or between the alternate base rate plus 1.000% per annum and the alternate base rate plus 0.500% per annum), based upon the average daily availability under the
Revolving Credit Facility for the immediately preceding fiscal quarter. Interest under the FILO Credit Facility accrues, at the election of the Company, at a LIBOR or alternate base rate, plus, in each case, an applicable interest rate margin, which
is also determined by reference to the level of excess availability under the Revolving Credit Facility. Loans under the FILO Credit Facility bear interest at 1.000% per annum more than loans under the Revolving Credit Facility.

The Credit Agreement contains customary negative covenants, which limit the Company’s ability to incur additional indebtedness,
create liens, make investments, make restricted payments or specified payments and merge or acquire assets, among other things. In addition, if excess availability under the Credit Facility were to fall below certain specified levels, certain
additional covenants (including fixed charge coverage ratio requirements) would be triggered, and the lenders would assume dominion and control over the Loan Parties’ cash.

The Credit Agreement contains customary events of default, including payment defaults, material breaches of representations and
warranties, covenant defaults, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The Credit
Agreement also contains customary affirmative covenants and representations and warranties.

F-19


The following table presents selected information related to the Company’s credit
facilities (in thousands):

Fiscal
2018
Fiscal
2017
Fiscal
2016

Credit facility at period end

$ 158,700 64,900 47,200

Average balance outstanding during the period

$ 141,478 96,297 66,948

Maximum borrowings outstanding during the period

$ 287,933 285,278 293,200

Weighted average interest rate during the period (a)

5.55 % 5.77 % 8.21 %

Interest rate at end of period

3.92 % 3.73 % 2.69 %

(a) Includes commitment fees.

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Company wrote off $0.5 million of deferred financing fees related to the prior credit facility during fiscal 2016 and the remaining unamortized deferred financing fees of $3.5 million were deferred and are being amortized over the
five-year term of the Credit Facility. The Company also incurred $5.7 million of fees to secure the Credit Facility, which are being amortized over the five-year term accordingly. During fiscal 2017, the Company incurred $0.5 million of
fees to secure the FILO Credit Facility, which are being amortized over the same term as the Credit Facility.

Fees expensed
with respect to the unused portion of the credit facilities were $2.2 million, $2.2 million and $2.8 million during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

The Company had $158.7 million and $64.9 million of outstanding debt under the Credit Facility as of April 28, 2018 and
April 29, 2017, respectively. The Company had $34.2 million and $38.8 million of outstanding letters of credit under the Credit Facility as of April 28, 2018 and April 29, 2017, respectively.

The Company has no agreements to maintain compensating balances.

Capital Investment

The Company’s investing activities consist
principally of capital expenditures for the maintenance of existing stores, merchandising initiatives, new store construction and enhancements to systems and the website. Capital expenditures totaled $87.7 million, $96.3 million and
$94.3 million during fiscal 2018, fiscal 2017 and fiscal 2016, respectively. Fiscal 2019 capital expenditure levels are expected to be approximately $100.0 million, although commitment to many such expenditures has not yet been made.
Capital expenditures planned for fiscal 2019 primarily include new store development, merchandising initiatives, maintenance of existing stores, enhancements to systems and the website.

Based upon the Company’s current operating levels and capital expenditures for fiscal 2019, management believes cash and cash
equivalents on hand, funds available under its credit facility and short-term vendor financing will be sufficient to meet the Company’s normal working capital and debt service requirements for at least the next 12 months. The Company regularly
evaluates its capital structure and conditions in the financing markets to ensure it maintains adequate flexibility to successfully execute its business plan.

F-20


On October 20, 2015, the Company’s Board of Directors authorized a stock
repurchase program (prior repurchase plan) of up to $50.0 million of its common shares. During fiscal 2016, the Company repurchased 2,763,142 shares at a cost of $26.7 million under the prior repurchase plan. During fiscal 2017, the
Company repurchased 2,019,798 shares at a cost of $23.3 million under the prior repurchase plan. On March 15, 2017, subsequent to completing the prior repurchase plan, the Company’s Board of Directors authorized a new stock repurchase
program of up to $50.0 million of its common shares. Stock repurchases under this program may be made through open market and privately negotiated transactions from time to time and in such amounts as management deems appropriate. The new stock
repurchase program has no expiration date and may be suspended or discontinued at any time. The Company’s repurchase plan is intended to comply with the requirements of Rule 10b-18 under the Securities
Exchange Act of 1934. The Company did not repurchase shares under this plan in fiscal 2018 and fiscal 2017. The Company has remaining capacity of $50.0 million under the new repurchase program as of April 28, 2018.

As of April 28, 2018, the Company has repurchased 39,584,907 shares at a cost of approximately $1.1 billion since the inception
of the Company’s stock repurchase programs. The repurchased shares are held in treasury.

Contractual Obligations

The following table sets forth the Company’s contractual obligations as of April 28, 2018 (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 obligations (a)

$ 1,112.5 $ 316.3 $ 467.6 $ 240.1 $ 88.5

Purchase obligations (b)

72.6 56.9 15.7

Interest obligations (c)

7.8 3.3 4.5

Other long-term liabilities reflected on the Company’s balance sheet under U.S. GAAP (d)

Total

$ 1,192.9 $ 376.5 $ 487.8 $ 240.1 $ 88.5

(a) Excludes obligations under store leases for insurance, taxes and other maintenance costs, which totaled approximately 21.1% of the minimum 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 $6.8 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 8 to the Notes to Consolidated Financial
Statements for information concerning the Company’s pension and postretirement plans.

Off-Balance Sheet Arrangements

As of April 28, 2018, the Company had no off-balance sheet arrangements as defined in Item 303 of Regulation S-K.

F-21


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 18 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, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates.

Revenue Recognition

Revenue from sales of the Company’s products is recognized at the time of sale or shipment, other than those with multiple elements and Free On Board (FOB) destination point shipping terms. la
Company accrues for estimated sales returns in the period in which the related revenue is recognized based on historical experience. ECommerce revenue from sales of products ordered through the Company’s websites is recognized upon estimated
delivery and receipt of the shipment by its customers. Freight costs are included within the Company’s cost of sales and occupancy. Sales taxes collected from retail customers are excluded from reported revenues. All of the Company’s sales
are recognized as revenue on a “net” basis, including sales in connection with any periodic promotions offered to customers. The Company does not treat any promotional offers as expenses.

In accordance with ASC 605-25, Revenue Recognition, Multiple-Element
Arrangements,
and ASU 2009-13 et 2009-14, for multiple-element arrangements that involve tangible products that contain software that is essential to the tangible
product’s functionality, undelivered software elements that relate to the tangible product’s essential software and other separable elements, the Company allocates revenue to all deliverables using the relative selling-price method. Under
this method, revenue is allocated at the time of sale to all deliverables based on their relative selling price using a specific hierarchy. The hierarchy is as follows: vendor-specific objective evidence, third-party evidence of selling price, or
best estimate of selling price. NOOK® device revenue is recognized at the segment point of sale.

The Company includes post-service customer support (PCS) in the form of software updates and potential increased
functionality on a when-and-if-available basis with the purchase of a NOOK® from the Company. Using the relative selling-price method described above, the Company allocates revenue based on the best estimate of selling price for the
deliverables as no vendor-specific objective evidence or

F-22


third-party evidence exists for any of the elements. Revenue allocated to
NOOK® and the software essential to its functionality is recognized at the time of sale, provided all other
conditions for revenue recognition are met. Revenue allocated to the PCS is deferred and recognized on a straight-line basis over the 2-year estimated life of a NOOK® eszköz.

The average percentage of a NOOK®’s sales price that is
deferred for undelivered items and recognized over its 2-year estimated life ranges between 0% and 5%, depending on the type of device sold. The amount of
NOOK®-related deferred revenue as of April 28, 2018 and April 29, 2017 was $0.1 million and
$0.2 million, respectively. These amounts are classified on the Company’s balance sheet in accrued liabilities for the portion that is subject to deferral for one year or less and other long-term liabilities for the portion that is subject
to deferral for more than one year.

The Company also pays certain vendors who distributed NOOK® a commission on the content sales sold through that device. The Company accounts for these transactions as a
reduction in the sales price of the NOOK® based on historical trends of content sales and a liability is
established for the estimated commission expected to be paid over the life of the product. The Company recognizes revenue of the content at the point of sale of the content. The Company records revenue from sales of digital content, sales of
third-party extended warranties, service contracts and other products, for which the Company is not obligated to perform, and for which the Company does not meet the criteria for gross revenue recognition under ASC 605-45-45, Reporting Revenue Gross as a Principal versus Net as an Agent, on a net basis. All other revenue is recognized on a gross basis.

The Company rents physical textbooks. Revenue from the rental of physical textbooks is deferred and recognized over the rental period
commencing at point of sale. The Company offers a buyout option to allow the purchase of a rented book at the end of the semester. The Company records the buyout purchase when the customer exercises and pays the buyout option price. In
these instances, the Company would accelerate any remaining deferred rental revenue at the point of sale.

NOOK acquires the rights to distribute digital content from publishers and distributes the content on
www.barnesandnoble.com, NOOK® devices and other eBookstore platforms. Certain digital content is distributed
under an agency pricing model, in which the publishers set prices for eBooks and NOOK receives a commission on content sold through the eBookstore. The majority of the Company’s eBooks sold are under the agency model.

The Barnes & Noble Membership Program offers members greater discounts and other benefits for products and services, as well as
exclusive offers and promotions via email or direct mail, for an annual fee of $25.00, which is non-refundable after the first 30 days. Revenue is recognized over the 12-month period based upon historical spending patterns for Barnes & Noble members.

Merchandise
Inventories

Merchandise inventories, except NOOK merchandise inventories, are stated at the lower of cost or market. coût
is determined primarily by the retail inventory method under the first-in, first-out (FIFO) basis. NOOK merchandise inventories are recorded based on the average cost
method and are valued at the lower of cost and net realizable value.

Market is determined based on the estimated net
realizable value, which is generally the selling price. Reserves for non-returnable inventory are based on the Company’s history of liquidating non-returnable
inventory. The Company does not believe there is a reasonable likelihood that there will be a

F-23


material change in the future estimates or assumptions used to calculate the non-returnable inventory reserve. However, if assumptions based on the
Company’s history of liquidating non-returnable inventory are incorrect, it may be exposed to losses or gains that could be material. A 10% change in actual
non-returnable inventory reserve would have affected pre-tax earnings by approximately $4.4 million in fiscal 2018.

The Company also estimates and accrues shortage for the period between the last physical count of inventory and the balance sheet date.
Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends. The Company does not believe there is a reasonable likelihood that there will be a material
change in the future estimates or assumptions used to calculate shortage rates. However, if the Company’s estimates regarding shortage rates are incorrect, it may be exposed to losses or gains that could be material. A 10 basis point change in
actual shortage rates would have affected pre-tax earnings by approximately $0.7 million in fiscal 2018.

Internal-Use Software and Website Development Costs

Direct costs incurred
to develop software for internal use and website development costs are capitalized and amortized over an estimated useful life of three to seven years. During fiscal 2018 and fiscal 2017, the Company capitalized costs, primarily related to labor,
consulting, hardware and software, of $17.6 million and $18.5 million, respectively. Amortization of previously capitalized amounts was $21.8 million, $23.6 million and $30.5 million for fiscal 2018, fiscal 2017 and fiscal
2016, respectively. Costs related to the design or maintenance of internal-use software and website development are expensed as incurred.

Research and Development Costs for Software Products

The Company follows
the guidance in ASC 985-20, Cost of Software to be Sold, Leased or Marketed, regarding research and development costs for software products to be sold, leased, or otherwise marketed. Capitalization of
software development costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. A certain amount of judgment and estimation is required to assess when technological feasibility is
established, as well as for the ongoing assessment of the recoverability of capitalized costs. The Company’s products reach technological feasibility shortly before the products are released and, therefore, research and development costs are
generally expensed as incurred.

Property and Equipment and Other Long-Lived Assets

The Company’s long-lived assets include property and equipment and amortizable intangibles. At April 28, 2018, the Company had
$255.5 million of property and equipment, net of accumulated depreciation, and $0.4 million of amortizable intangible assets, net of amortization, accounting for approximately 14.6% of the Company’s total assets. The Company reviews
its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and considers market participants in accordance with ASC
360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. The Company evaluates its stores’ long-lived assets and its other long-lived assets for impairment at the individual
Barnes & Noble store level and at the reporting unit level, respectively, which is the lowest level at which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, the Company will first compare
the carrying amount of the assets to the individual store’s estimated future undiscounted cash flows. If the estimated future cash flows are less than the carrying amount of the

F-24


assets, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the assets to the individual store’s fair value based on its estimated
discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value. Impairment losses included in selling and administrative expenses related to amortizable assets
totaled $1.8 million, $0.3 million and $0.2 million during fiscal 2018, fiscal 2017 and fiscal 2016, respectively. The Company does not believe there is a reasonable likelihood that there will be a material change in the estimates or
assumptions used to calculate long-lived asset impairment losses. However, if the Company is subject to further risk of impairment if comparable store sales continue to decline, the Company’s cost reduction plans do not materialize, the assumed
long-term discount rate increases or in general the Company does not achieve its forecasted strategic turnaround plan. A 10% decrease in the Company’s estimated discounted cash flows would not have resulted in a material impairment charge on
the Company’s results of operations in fiscal 2018.

Goodwill and Unamortizable Intangible Assets

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying consolidated balance sheets.

At April 28, 2018, the Company had $71.6 million of goodwill (on its Retail reporting unit) and $309.3 million
of unamortizable intangible assets (those with an indefinite useful life), accounting for approximately 21.8% of the Company’s total assets. ASC 350-30, Goodwill and Other Intangible Assets (ASC 350-30), requires that goodwill and other unamortizable intangible assets no longer be amortized, but instead be tested for impairment at least annually or earlier if there are impairment indicators.

In January 2017, the FASB issued ASU 2017-04, which simplifies the subsequent measurement of
goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, goodwill impairment is measured as the difference between the fair value of the
reporting unit and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax-deductible goodwill when measuring goodwill impairment loss. This standard
is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019, with early adoption permitted for impairment tests performed after January 1, 2017. The Company has early adopted ASU 2017-04 on October 29, 2017, the first day of the third quarter of fiscal 2018.

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Company compares the fair value of a reporting unit and the carrying value of the reporting unit to measure goodwill impairment loss as required by ASU 2017-04. Fair value was determined using the combination
of a discounted cash flow method (income approach) and the guideline public company method (market comparable approach), weighted equally in determining the fair value of the Company. The market comparable approach estimates fair value using market
multiples of various financial measures compared to a set of comparable public companies. In performing the valuations, significant assumptions utilized include unobservable Level 3 inputs including cash flows and long-term growth rates
reflective of management’s forecasted outlook, and discount rates inclusive of risk adjustments consistent with current market conditions. Discount rates are based on the development of a weighted average cost of capital using guideline public
company data, factoring in current market data and any company specific risk factors.

F-25


The Company completed its annual goodwill impairment test as of the first day of the third
quarter of fiscal 2018 (October 29, 2017). The fair value of the B&N Retail reporting unit had been in excess of carrying value as of the first day of the third quarter of fiscal 2017 (October 30, 2016) and fiscal 2018 (October 29, 2017) based
on the annual goodwill impairment test performed as of those dates. In addition, no impairment indicators had arisen after that test to signal that an interim impairment test should be performed prior to the next annual test. Although no impairment
resulted from the Company’s next annual goodwill impairment test as of October 29, 2017, the fair value of the B&N Retail reporting unit (for which $207.4 million of goodwill was allocated as of such date) only exceeded its
carrying value by approximately $26.8 million or 5%.

Subsequent to the annual goodwill impairment test as of
October 29, 2017, sales trends unexpectedly softened during the holiday selling season. Given these lower than expected sales results, the Company revised its forecasted outlook. Following the announcement on January 4, 2018 of the
Company’s holiday sales results and its revised outlook, the market price of the Company’s common stock sharply declined. Due to these new impairment indicators, the Company performed an interim goodwill impairment test as of
December 30, 2017. As a result of this interim testing, the Company recognized an impairment of its B&N Retail reporting unit goodwill of $133.6 million. While the Company has initiated a strategic turnaround plan focused on
stabilizing sales, improving productivity and reducing expenses, achievement of its long-term goals requires a significant multi-year transformation. The interim test incorporated revised discounted cash flow projections given the Company’s
holiday sales performance and the early stage of its turnaround efforts. The fair value of the B&N Retail reporting unit had declined from the prior test primarily as a result of the revised forecast and an increased discount rate to account for
risk in the Company’s plan. The goodwill of the B&N Retail reporting unit is subject to further risk of impairment if B&N Retail comparable store sales continue to decline, the Company’s cost reduction plans do not materialize,
store closings accelerate, the assumed long-term discount rate increases or in general the Company does not achieve its forecasted strategic turnaround plan. A 50 basis point decline in its expected long-term growth rates would result in an
approximate $10.1 million incremental goodwill impairment charge, or a 100 basis point increase in the Company’s discount rate would result in an approximate $23.5 million incremental goodwill impairment charge. There were no
indicators of impairment identified subsequent to the December 30, 2017 impairment test.

There were no impairment losses
related to goodwill during fiscal 2017 and fiscal 2016.

In addition to goodwill, the Company tests unamortizable intangible
assets by comparing the fair value and the carrying value of such assets. The Company also completed its annual impairment tests for its other unamortizable intangible assets by comparing the estimated fair value to the carrying value of such
assets. Based on the results of the Company’s tests, it recorded impairment losses included in selling and administrative expenses related to unamortizable intangible assets totaled $0, $0 and $3.8 million during fiscal 2018, fiscal 2017
and fiscal 2016, respectively.

With regard to valuing its trade name, the Company uses the relief from royalty method (income
approach). The estimated fair value of the Company’s trade name exceeded its carrying value by approximately $17.1 million, or 5%, as of October 29, 2017. Based on the impairment indicators noted above, the Company performed an
interim impairment test of its trade name as of December 30, 2017 and the estimated fair value exceeded its carrying value by approximately $23.5 million, or 8%, as of that date. Significant assumptions used to determine fair value under
the relief from royalty method include future trends in sales, a royalty rate and an appropriate discount rate inclusive of risk adjustments consistent with market conditions and company specific risk factors. The fair value of the Company’s
trade name had declined from the prior year primarily as a result of declining sales and an increased discount rate to account for risk in the Company’s revised forecast. Although the Company determined that no impairment charge was necessary,
the Company’s trade name is at risk of impairment if B&N Retail comparable store sales continue to decline, forecasted sales expectations are not met, store closings

F-26


accelerate, the assumed long-term discount rate increases, or in general the Company does not achieve its forecasted strategic turnaround plan. For example, an 800 basis point decline in expected
sales would result in an approximate $1.9 million trade name impairment charge or a 200 basis point increase in the Company’s discount rate would result in an approximate $29.3 million trade name impairment charge. There were no
indicators of impairment identified subsequent to the December 30, 2017 impairment test.

The fair value of the
Company’s publishing contracts was determined using the discounted cash flow method (income approach). Based on this test, the estimated fair value of the Company’s publishing contracts exceeded its carrying value by approximately
$4.2 million or 26%. The Company’s publishing contracts are subject to risk of impairment if forecasted sales expectations are not met, the assumed long-term discount rate increases, or in general the Company does not achieve its
forecasted strategic turnaround. Such publishing contracts were tested for impairment and the Company determined that no impairment charge was necessary for fiscal 2018 and fiscal 2017. During fiscal 2016, the Company impaired one of its publishing
contracts due to a significant drop in business with that publisher, driven by lower title offerings, product quality and the loss of a distribution partner. As a result, the Company recorded an impairment charge of $3.8 million in selling and
administrative expenses. The publishing contracts include the value of long-standing relationships with authors, agents and publishers established upon the Company’s acquisition of Sterling in 2003. Given Sterling’s strong history of
maintaining such relationships, the Company believes they produce value indefinitely without an identifiable remaining useful life.

A 10% decrease in the Company’s estimated discounted cash flows would have no impact on the Company’s evaluation of publishing contracts in fiscal 2018.

Gift Cards

The Company sells gift cards, which can be used in its stores, on www.barnesandnoble.com, on NOOK® devices and at B&N Education stores. The Company does not charge administrative or dormancy fees on gift cards and gift cards have no expiration dates. Upon the
purchase of a gift card, a liability is established for its cash value. Revenue associated with gift cards is deferred until redemption of the gift card. Gift cards redeemed at B&N Education are funded by the gift card liability at the Company.
Over time, a portion of the gift cards issued is typically not redeemed. The Company estimates the portion of the gift card liability for which the likelihood of redemption is remote based upon the Company’s historical redemption patterns. la
Company records this amount in revenue on a straight-line basis over a 12-month period beginning in the 13
th month after the month the gift card was originally sold. Additional breakage may be required if gift card redemptions
continue to run lower than historical patterns.

The Company recognized gift card breakage of $43.9 million,
$35.5 million and $29.1 million during fiscal 2018, fiscal 2017 and fiscal 2016, respectively. The Company had gift card liabilities of $323.5 million and $351.4 million as of April 28, 2018 and April 29, 2017,
respectively. Gift card breakage increased over last year as redemptions continue to run lower than historical patterns. If estimates regarding the Company’s history of gift card breakage are incorrect, it may be exposed to losses or gains that
could be material. A 25 basis point change in the Company’s gift card breakage rate at April 28, 2018 would have affected pre-tax earnings by approximately $11.7 million in fiscal 2018.

F-27


Income Taxes

Judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. In the ordinary course of business, tax issues may arise where the ultimate
outcome is uncertain. Additionally, the Company’s tax returns are subject to audit by various tax authorities. Consequently, changes in the Company’s estimates for contingent tax liabilities may materially impact the Company’s results
of operations or financial position. A 1% variance in the Company’s effective tax rate would have affected the Company’s results of operations in fiscal 2018 by $1.4 million.

Disclosure Regarding Forward-Looking Statements

This report contains
certain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) and information relating to Barnes & Noble that
are based on the beliefs of the management of Barnes & Noble as well as assumptions made by and information currently available to the management of Barnes & Noble. When used in this communication, the words “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “plan,” “will,” “forecasts,” “projections,” and similar expressions, as they relate to Barnes & Noble or the
management of Barnes & Noble, identify forward-looking statements.

Such statements reflect the current views of
Barnes & Noble with respect to future events, the outcome of which is subject to certain risks, including, among others, the general economic environment and consumer spending patterns, decreased consumer demand for Barnes &
Noble’s products, low growth or declining sales and net income due to various factors, including store closings, higher-than-anticipated or increasing costs, including with respect to store closings, relocation, occupancy (including in
connection with lease renewals) and labor costs, the effects of competition, the risk of insufficient access to financing to implement future business initiatives, risks associated with data privacy and information security, risks associated with
Barnes & Noble’s supply chain, including possible delays and disruptions and increases in shipping rates, various risks associated with the digital business, including the possible loss of customers, declines in digital content sales,
risks and costs associated with ongoing efforts to rationalize the digital business, risks associated with the eCommerce business, including the possible loss of eCommerce customers and declines in eCommerce sales, the risk that financial and
operational forecasts and projections are not achieved, the performance of Barnes & Noble’s initiatives including but not limited to new store concepts and eCommerce initiatives, unanticipated adverse litigation results or effects,
potential infringement of Barnes & Noble’s intellectual property by third parties or by Barnes & Noble of the intellectual property of third parties, and other factors, including those factors discussed in detail in Item 1A,
“Risk Factors,” and in Barnes & Noble’s other filings made hereafter from time to time with the SEC.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to Barnes & Noble or persons acting on its behalf
are expressly qualified in their entirety by the cautionary statements in this paragraph. Barnes & Noble undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise after the date of this Annual Report.

F-28


CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Fiscal 2018 Fiscal 2017 Fiscal 2016

Sales

$ 3,662,280 $ 3,894,558 $ 4,163,844

Cost of sales and occupancy

2,551,077 2,682,356 2,836,547

Gross profit

1,111,203 1,212,202 1,327,297

Selling and administrative expenses

999,109 1,040,007 1,176,778

Depreciation and amortization

106,340 117,887 135,863

Goodwill impairment

133,612

Operating income (loss)

(127,858 ) 54,308 14,656

Interest expense, net and amortization of deferred financing fees

9,837 7,509 8,770

Income (loss) before income taxes

(137,695 ) 46,799 5,886

Income tax provision (benefit)

(12,215 ) 24,776 (8,814 )

Net income (loss) from continuing operations

$ (125,480 ) $ 22,023 $ 14,700

Net loss from discontinued operations

(39,146 )

Net income (loss)

$ (125,480 ) $ 22,023 $ (24,446 )

Basic income (loss) per common share:

Income (loss) from continuing operations

$ (1.73 ) $ 0.30 $ 0.05

Loss from discontinued operations

(0.54 )

Basic income (loss) per common share

$ (1.73 ) $ 0.30 $ (0.49 )

Diluted income (loss) per common share:

Income (loss) from continuing operations

$ (1.73 ) $ 0.30 $ 0.05

Loss from discontinued operations

(0.54 )

Diluted income (loss) per common share

$ (1.73 ) $ 0.30 $ (0.49 )

Weighted average common shares outstanding:

Basic

72,588 72,188 72,410

Diluted

Dividends declared per common share

$

72,588

0.60

$

72,328

0.60

$

72,542

0.60

See accompanying notes to consolidated financial statements.

F-29


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

Fiscal 2018 Fiscal 2017 Fiscal 2016

Net income (loss)

$ (125,480 ) $ 22,023 $ (24,446 )

Other comprehensive income (loss), net of tax:

(Increase) decrease in minimum pension/post-retirement liability (net of deferred tax benefit (expense) of $15, $(107) and
$(2,188), respectively)

(39 ) 164 3,662

Pension reclassification (net of deferred tax expense of $0, $0 and $7,780, respectively) (see Note 8)

13,022

Total comprehensive income (loss)

$ (125,519 ) $ 22,187 $ (7,762 )

See accompanying notes to consolidated financial statements.

F-30


CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

April 28, 2018 April 29, 2017

ASSETS

Current assets:

Cash and cash equivalents

$ 10,769 $ 11,993

Receivables, net

64,562 67,294

Merchandise inventories, net

958,196 946,909

Prepaid expenses and other current assets

65,153 101,816

Total current assets

1,098,680 1,128,012

Property and equipment:

Land and land improvements

2,541 2,541

Buildings and leasehold improvements

1,080,952 1,072,007

Fixtures and equipment

1,523,485 1,608,433

2,606,978 2,682,981

Less accumulated depreciation and amortization

2,351,454 2,406,859

Net property and equipment

255,524 276,122

Goodwill

71,593 207,381

Intangible assets, net

309,649 310,205

Other non-current assets

14,122 11,201

Total assets

$ 1,749,568 $ 1,932,921

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$ 458,896 $ 473,686

Accrued liabilities

260,209 283,157

Gift card liabilities

323,465 351,424

Total current liabilities

1,042,570 1,108,267

Long-term debt

158,700 64,900

Deferred taxes

52,044 86,132

Other long-term liabilities

84,271 99,311

Shareholders’ equity:

Common stock; $0.001 par value; 300,000 shares authorized; 112,238 and 111,933 shares issued, respectively

112 112

Additional paid-in capital

1,749,555 1,741,380

Accumulated other comprehensive income

276 315

Retained earnings

(216,236 ) (46,425 )

Treasury stock, at cost, 39,585 and 39,497 shares, respectively

(1,121,724 ) (1,121,071 )

Total shareholders’ equity

411,983 574,311

Commitments and contingencies

Total liabilities and shareholders’ equity

$ 1,749,568 $ 1,932,921

See accompanying notes to consolidated financial statements.

F-31


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands)

Common
Stock
Additional
Paid-In
Capital
Accumlated
Other
Comprehensive
Gains (Losses)
Retained
Earnings
Treasury
Stock at Cost
Total

Balance at May 2, 2015

$ 98 1,927,997 (16,533 ) 357,512 (1,079,716 ) $ 1,189,358

Net loss

(24,446 ) (24,446 )

Minimum pension liability, net of tax

3,662 3,662

Pension reclassification (see Note 8)

13,022 13,022

Exercise of 111 common stock options

2 1,301 1,303

Stock options and restricted stock tax benefits

1,094 1,094

Stock-based compensation expense

14,889 14,889

Accretive dividend on preferred stockholders and membership interests

(4,204 ) (4,204 )

Inducement fee paid upon conversion of Series J preferred stock

(3,657 ) (3,657 )

Cash dividends declared

(46,056 ) (46,056 )

Accrued dividends for long-term incentive awards

(451 ) (451 )

Purchase of treasury stock related to stock-based compensation, 337 shares

(4,004 ) (4,004 )

Treasury stock repurchase plan, 2,763 shares

(26,718 ) (26,718 )

Dividend to preferred shareholders paid in shares

1,783 (1,783 )

Common shares issued upon conversion of Series J preferred stock

12 200,250 200,262

Cash settlement of equity award

(8,022 ) (8,022 )

Separation of B&N Education, Inc.

(401,258 ) (301,264 ) (702,522 )

Balance at April 30, 2016

$ 112 1,738,034 151 (24,349 ) (1,110,438 ) $ 603,510

See accompanying notes to consolidated financial statements.

F-32


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED)

(In thousands)

Common
Stock
Additional
Paid-In
Capital
Accumlated
Other
Comprehensive
Gains (Losses)
Retained
Earnings
Treasury
Stock at Cost
Total

Balance at April 30, 2016

$ 112 1,738,034 151 (24,349 ) (1,110,438 ) $ 603,510

Net income

22,023 22,023

Postretirement plan liability, net of tax

164 164

Exercise of 31 common stock options

312 312

Stock options and restricted stock tax benefit

1,110 1,110

Stock-based compensation expense

6,299 6,299

Cash dividends declared

(43,887 ) (43,887 )

Accrued dividends for long-term incentive awards

(212 ) (212 )

Purchase of treasury stock related to stock-based compensation, 248 shares

(2,694 ) (2,694 )

Treasury stock repurchase plan, 2,020 shares

(23,281 ) (23,281 )

Distribution of Rabbi Trust shares (see Note 3)

(15,342 ) 15,342

Tax benefit from distribution of Rabbi Trust

10,967 10,967

Balance at April 29, 2017

$ 112 1,741,380 315 (46,425 ) (1,121,071 ) $ 574,311

Adoption of ASU 2016-09 (see Note 1)

1,310 155 1,465

Net loss

(125,480 ) (125,480 )

Postretirement plan liability, net of tax

(39 ) (39 )

Stock-based compensation expense

6,865 6,865

Cash dividends declared

(43,638 ) (43,638 )

Accrued dividends for long-term incentive awards

(848 ) (848 )

Purchase of treasury stock related to stock-based compensation, 88 shares

(653 ) (653 )

Balance at April 28, 2018

$ 112 1,749,555 276 (216,236 ) (1,121,724 ) $ 411,983

See accompanying notes to consolidated financial statements.

F-33


CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Year Fiscal
2018
Fiscal
2017
Fiscal
2016

(In thousands)

Cash flows from operating activities:

Net income (loss)

$ (125,480 ) $ 22,023 $ (24,446 )

Net loss from discontinued operations

(39,146 )

Net income (loss) from continuing operations

$ (125,480 ) $ 22,023 $ 14,700

Adjustments to reconcile net income (loss) to net cash flows from operating activities:

Depreciation and amortization (including amortization of deferred financing fees)

108,293 119,837 139,138

Stock-based compensation expense

6,865 6,299 14,201

Impairment charges

135,435 349 3,991

Deferred taxes

(30,865 ) 28,534 34,604

Loss on disposal of property and equipment

730 1,262 2,428

Net decrease in other long-term liabilities

(15,094 ) (14,602 ) (48,025 )

Pension contributions

(12,707 )

Pension reclassification

20,802

Net (increase) decrease in other non-current assets

(4,962 ) 872 (3,405 )

Changes in operating assets and liabilities, net

(37,816 ) (17,752 ) 31,798

Net cash flows provided by operating activities

$ 37,106 $ 146,822 $ 197,525

Cash flows from investing activities:

Purchases of property and equipment

(87,651 ) (96,258 ) (94,274 )

Net cash flows used in investing activities

$ (87,651 ) $ (96,258 ) $ (94,274 )

Cash flows from financing activities:

Proceeds from credit facility

1,173,317 1,140,178 929,500

Payments on credit facility

(1,079,517 ) (1,122,478 ) (882,300 )

Cash dividends paid

(43,638 ) (43,887 ) (46,056 )

Treasury stock repurchase plan

(23,281 ) (26,718 )

Purchase of treasury stock related to stock-based compensation

(653 ) (2,694 ) (4,004 )

Payment of credit facility related fees

(474 ) (5,701 )

Proceeds from exercise of common stock options

312 1,303

Cash dividends paid for long-term incentive awards

(188 ) (85 )

Cash settlement of equity award

(8,022 )

Cash dividends paid to preferred shareholders

(3,941 )

Inducement fee paid upon conversion of Series J preferred stock

(3,657 )

Net cash flows provided by (used in) financing activities

$ 49,321 $ (52,409 ) $ (49,596 )

Cash flows from discontinued operations:

Operating cash flows

(86,384 )

Investing cash flows

(11,764 )

Financing cash flows (including cash at date of Spin-Off)

(16,029 )

Net cash flows used in discontinued operations

$ $ $ (114,177 )

Net decrease in cash and cash equivalents

(1,224 ) (1,845 ) (60,522 )

Cash and cash equivalents at beginning of period

11,993 13,838 74,360

Cash and cash equivalents at end of period

$ 10,769 $ 11,993 $ 13,838

Changes in operating assets and liabilities, net:

Receivables, net

$ 2,732 $ 57,623 $ (64,652 )

Merchandise inventories, net

(11,287 ) (13,186 ) 62,015

Prepaid expenses and other current assets

37,096 4,096 (11,947 )

Accounts payable, accrued liabilities and gift card liabilities

(66,357 ) (66,285 ) 46,382

Changes in operating assets and liabilities, net

$ (37,816 ) $ (17,752 ) $ 31,798

See accompanying notes to consolidated financial statements.

F-34


CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Fiscal Year Fiscal
2018
Fiscal
2017
Fiscal
2016

(In thousands)

Supplemental cash flow information

Cash paid during the period for:

Interest

$ 7,611 $ 5,487 $ 12,217

Income taxes (net of refunds)

$ (3,145 ) $ (16,859 ) $ 16,107

Non-cash financing activity:

Accrued dividends for long-term incentive awards

$ 1,237 $ 577 $ 451

Dividends to preferred stockholders paid in shares

$ $ $ 1,783

Issuance of common stock upon conversion of Series J preferred stock

$ $ $ 200,262

See accompanying notes to consolidated financial statements.

F-35


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of dollars, except per share data)

For the 52 weeks ended April 28, 2018 (fiscal
2018), 52 weeks ended April 29, 2017 (fiscal 2017) and 52 weeks ended April 30, 2016 (fiscal 2016).

premier Summary of Significant Accounting Policies

Business

Barnes & Noble, Inc. (Barnes & Noble or the Company), one of the nation’s largest booksellers,3 provides customers a unique experience across its multi-channel
distribution platform. As of April 28, 2018, the Company operates 630 bookstores in 50 states, maintains an eCommerce site, develops digital reading products and operates NOOK, one of the largest digital bookstores. Barnes & Noble is
utilizing the strength of its retail footprint in combination with its online and digital businesses to provide an omni-channel experience for its customers, fulfilling its commitment to offer customers any book, anytime, anywhere and in any format.

Barnes & Noble Retail (B&N Retail) operates 630 retail bookstores, primarily under the
Barnes & Noble Booksellers® trade name, and includes the Company’s eCommerce site. B&N Retail
also includes Sterling Publishing Co., Inc. (Sterling or Sterling Publishing), a leader in general trade book publishing. The NOOK segment represents the Company’s digital business, offering digital books and magazines for sale and consumption
online, NOOK®
4 reading devices, co-branded NOOK® tablets and reading software for iOS, Android and Windows.

The Company’s principal business is the sale of trade books (generally, hardcover and paperback titles), mass
market paperbacks (such as mystery, romance, science fiction and other popular fiction), children’s books, eBooks and other digital content, NOOK® and related accessories, bargain books, magazines, gifts, café products and services, educational toys & games, music and movies direct to customers
through its bookstores or on www.barnesandnoble.com. 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, and makes decisions on the allocation of resources. The Company’s two operating segments are B&N Retail and NOOK.

Consolidation

The consolidated financial statements include the accounts
of Barnes & Noble, Inc. and its wholly and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

3 Based upon sales reported in trade publications and public filings.
4

Any references to
NOOK® include the Company’s NOOK® Tablet, Samsung Galaxy Tab® la
NOOK®.
Samsung Galaxy Tab® S2 NOOK®. Samsung Galaxy Tab® E NOOK® and NOOK
GlowLight
TM 3 devices, each of which includes the
trademark symbol (®
or ™, as applicable) even if a trademark symbol is not included.

F-36


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 disclosure 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.

Merchandise Inventories

Merchandise inventories, except NOOK merchandise inventories, are stated at the lower of cost or market. Cost is determined primarily by the retail inventory method under the first-in, first-out (FIFO) basis. NOOK merchandise inventories are recorded based on the average cost method and are valued at the lower of cost and net realizable value.

Market is determined based on the estimated net realizable value, which is generally the selling price. Reserves for non-returnable inventory are based on the Company’s history of liquidating non-returnable inventory.

The Company also estimates and accrues shortage for the period between the last physical count of inventory and the balance sheet date.
Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends.

Property and Equipment and Other Long-Lived Assets

Property and equipment
are carried at cost, less accumulated depreciation and amortization. For financial reporting purposes, depreciation is computed using the straight-line method over estimated useful lives. Maintenance and repairs are expensed as incurred, while major
maintenance and remodeling costs are capitalized if they extend the useful life of the asset. Leasehold improvements are capitalized and amortized over the shorter of their estimated useful lives or the terms of the respective leases. Fixtures and
equipment are capitalized and amortized over the shorter of their estimated useful lives or 10 years. Capitalized lease acquisition costs are being amortized over the lease terms of the underlying leases. System costs are capitalized and included in
property and equipment. These costs are depreciated over their estimated useful lives from the date the systems become operational. The Company had $255,524 and $276,122 of property and equipment, net of accumulated depreciation, at April 28,
2018 and April 29, 2017, respectively, and $105,696, $117,105 and $134,850 of depreciation expense for fiscal 2018, fiscal 2017 and fiscal 2016, respectively. Capitalized software costs of $72,462 and $75,893 for fiscal 2018 and fiscal 2017,
respectively, are included in property and equipment.

The Company reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and considers market participants in accordance with ASC 360-10, Accounting for the Impairment or
Disposal of Long-Lived Assets
(ASC 360-10). The Company evaluates its stores’ long-lived assets and its other long-lived assets for impairment at the individual Barnes & Noble store level and
at the reporting unit level, respectively, which is the lowest level at which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, the Company will first compare the carrying amount of the assets to
the individual store’s estimated future undiscounted cash flows. If the estimated future cash flows are less than the carrying amount of the assets, an impairment loss calculation is prepared. The impairment loss calculation compares the
carrying amount of the assets to the individual store’s fair value based on its estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value.
Impairment losses included in selling and administrative expenses related to amortizable assets totaled $1,823, $349 and $150 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

F-37


Goodwill and Unamortizable Intangible Assets

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying consolidated balance sheets.

At April 28, 2018, the Company had $71,593 of goodwill (on its Retail reporting unit) and $309,294 of unamortizable
intangible assets (those with an indefinite useful life), accounting for approximately 21.8% of the Company’s total assets. ASC 350-30 requires that goodwill and other unamortizable intangible assets no
longer be amortized, but instead be tested for impairment at least annually or earlier if there are impairment indicators.

In
January 2017, the FASB issued ASU 2017-04, which simplifies the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair
value of goodwill to measure impairment. Instead, goodwill impairment is measured as the difference between the fair value of the reporting unit and the carrying value of the reporting unit. The standard also clarifies the treatment of the income
tax effect of tax-deductible goodwill when measuring goodwill impairment loss. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15,
2019, with early adoption permitted for impairment tests performed after January 1, 2017. The Company has early adopted ASU 2017-04 on October 29, 2017, the first day of the third quarter of fiscal
2018.

The Company compares the fair value of a reporting unit and the carrying value of the reporting unit to measure
goodwill impairment loss as required by ASU 2017-04. Fair value was determined using the combination of a discounted cash flow method (income approach) and the guideline public company method (market
comparable approach), weighted equally in determining the fair value of the reporting units. The market comparable approach estimates fair value using market multiples of various financial measures compared to a set of comparable public companies.
In performing the valuations, significant assumptions utilized include unobservable Level 3 inputs including cash flows and long-term growth rates reflective of management’s forecasted outlook, and discount rates inclusive of risk
adjustments consistent with current market conditions. Discount rates are based on the development of a weighted average cost of capital using guideline public company data, factoring in current market data and any company specific risk factors.

The Company completed its annual goodwill impairment test as of the first day of the third quarter of fiscal 2018 (October
29, 2017). The fair value of the B&N Retail reporting unit had been in excess of carrying value as of the first day of the third quarter of fiscal 2017 (October 30, 2016) and fiscal 2018 (October 29, 2017) based on the annual goodwill impairment
test performed as of those dates. In addition, no impairment indicators had arisen after that test to signal that an interim impairment test should be performed prior to the next annual test. Although no impairment resulted from the Company’s
next annual goodwill impairment test as of October 29, 2017, the fair value of the B&N Retail reporting unit (for which $207,381 of goodwill was allocated as of such date) only exceeded its carrying value by approximately $26,800 or 5%.

Subsequent to the annual goodwill impairment test as of October 29, 2017, sales trends unexpectedly softened during the
holiday selling season. Given these lower than expected sales results, the Company revised its forecasted outlook. Following the announcement on January 4, 2018 of the Company’s holiday sales results and its revised outlook, the market
price of the Company’s common stock sharply declined. Due to these new impairment indicators, the Company performed an interim goodwill impairment test as of December 30, 2017. As a result of this interim testing, the Company recognized an
impairment of its B&N Retail reporting unit goodwill of $133,612. While the

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Company has initiated a strategic turnaround plan focused on stabilizing sales, improving productivity and reducing expenses, achievement of its long-term goals requires a significant multi-year
transformation. The interim test incorporated revised discounted cash flow projections given the Company’s holiday sales performance and the early stage of its turnaround efforts. The fair value of the B&N Retail reporting unit had declined
from the prior test primarily as a result of the revised forecast and an increased discount rate to account for risk in the Company’s plan. The goodwill of the B&N Retail reporting unit is subject to further risk of impairment if B&N
Retail comparable store sales continue to decline, the Company’s cost reduction plans do not materialize, store closings accelerate, the assumed long-term discount rate increases or in general the Company does not achieve its forecasted
strategic turnaround plan. There were no indicators of impairment identified subsequent to the December 30, 2017 impairment test.

There were no impairment losses related to goodwill during fiscal 2017 and fiscal 2016.

In addition to goodwill, the Company tests unamortizable intangible assets by comparing the fair value and the carrying value of such assets. The Company also completed its annual impairment tests for its
other unamortizable intangible assets by comparing the estimated fair value to the carrying value of such assets. Based on the results of the Company’s tests, it recorded impairment losses included in selling and administrative expenses related
to unamortizable intangible assets totaling $0, $0 and $3,840 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

With regard to valuing its trade name, the Company uses the relief from royalty method (income approach). The estimated fair value of the
Company’s trade name exceeded its carrying value by approximately $17,100, or 5%, as of October 29, 2017. Based on the impairment indicators noted above, the Company performed an interim impairment test of its trade name as of
December 30, 2017 and the estimated fair value exceeded its carrying value by approximately $23,500, or 8%, as of that date. Significant assumptions used to determine fair value under the relief from royalty method include future trends in
sales, a royalty rate and an appropriate discount rate inclusive of risk adjustments consistent with market conditions and company specific risk factors. The fair value of the Company’s trade name had declined from the prior year primarily as a
result of declining sales and an increased discount rate to account for risk in the Company’s revised forecast. Although the Company determined that no impairment charge was necessary, the Company’s trade name is at risk of impairment if
B&N Retail comparable store sales continue to decline, forecasted sales expectations are not met, store closings accelerate, the assumed long-term discount rate increases, or in general the Company does not achieve its forecasted strategic
turnaround plan. There were no indicators of impairment identified subsequent to the December 30, 2017 impairment test.

The fair value of the Company’s publishing contracts was determined using the discounted cash flow method (income approach). Based
on this test, the estimated fair value of the Company’s publishing contracts exceeded its carrying value by approximately $4,200, or 26%. The Company’s publishing contracts are subject to risk of impairment if forecasted sales expectations
are not met, the assumed long-term discount rate increases, or in general the Company does not achieve its forecasted strategic turnaround. Such publishing contracts were tested for impairment and the Company determined that no impairment charge was
necessary for fiscal 2018 and fiscal 2017. During fiscal 2016, the Company impaired one of its publishing contracts due to a significant drop in business with that publisher, driven by lower title offerings, product quality and the loss of a
distribution partner. As a result, the Company recorded an impairment charge of $3,840 in selling and administrative expenses. The publishing contracts include the value of long-standing relationships with authors, agents and publishers established
upon the Company’s acquisition of Sterling in 2003. Given Sterling’s strong history of maintaining such relationships, the Company believes they produce value indefinitely without an identifiable remaining useful life.

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Deferred Charges

Costs incurred to obtain long-term financing are amortized over the terms of the respective debt agreements using the straight-line method, which approximates the effective interest method. Unamortized
costs included in other non-current assets as of April 28, 2018 and April 29, 2017 were $4,393 and $6,346, respectively. Amortization expense included in interest and amortization of deferred
financing fees was $1,953, $1,950 and $3,276 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

Revenue Recognition

Revenue from sales of the Company’s products is recognized at the time of sale or shipment, other than those with
multiple elements and Free On Board (FOB) destination point shipping terms. The Company accrues for estimated sales returns in the period in which the related revenue is recognized based on historical experience. ECommerce revenue from sales of
products ordered through the Company’s websites is recognized upon estimated delivery and receipt of the shipment by its customers. Freight costs are included within the Company’s cost of sales and occupancy. Sales taxes collected from
retail customers are excluded from reported revenues. All of the Company’s sales are recognized as revenue on a “net” basis, including sales in connection with any periodic promotions offered to customers. The Company does not treat
any promotional offers as expenses.

In accordance with ASC
605-25, Revenue Recognition, Multiple-Element Arrangements, and Accounting Standards Updates (ASU) 2009-13 et 2009-14,
for multiple-element arrangements that involve tangible products that contain software that is essential to the tangible product’s functionality, undelivered software elements that relate to the tangible product’s essential software and
other separable elements, the Company allocates revenue to all deliverables using the relative selling-price method. Under this method, revenue is allocated at the time of sale to all deliverables based on their relative selling price using a
specific hierarchy. The hierarchy is as follows: vendor-specific objective evidence, third-party evidence of selling price, or best estimate of selling price. NOOK® device revenue is recognized at the segment point of sale.

The Company includes post-service customer support (PCS) in the form of software updates and potential increased functionality on a when-and-if-available basis with the purchase of a NOOK® from
the Company. Using the relative selling-price method described above, the Company allocates revenue based on the best estimate of selling price for the deliverables as no vendor-specific objective evidence or third-party evidence exists for any of
the elements. Revenue allocated to NOOK® and the software essential to its functionality is recognized at the
time of sale, provided all other conditions for revenue recognition are met. Revenue allocated to the PCS is deferred and recognized on a straight-line basis over the 2-year estimated life of a NOOK®
eszköz.

The average percentage of a NOOK®’s sales price that is
deferred for undelivered items and recognized over its 2-year estimated life ranges between 0% and 5%, depending on the type of device sold. The amount of
NOOK®-related deferred revenue as of April 28, 2018 and April 29, 2017 was $61 and $226, respectively.
These amounts are classified on the Company’s balance sheet in accrued liabilities for the portion that is subject to deferral for one year or less and other long-term liabilities for the portion that is subject to deferral for more than one
year.

The Company also pays certain vendors who distributed NOOK® a commission on the content sales sold through that device. The Company accounts for these transactions as a
reduction in the sales price of the NOOK® based on historical trends of content sales and a liability is
established for the estimated commission expected to be paid over the life of the product. The Company recognizes

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revenue of the content at the point of sale of the content. The Company records revenue from sales of digital content, sales of third-party extended warranties, service contracts and other
products, for which the Company is not obligated to perform, and for which the Company does not meet the criteria for gross revenue recognition under ASC 605-45-45,
Reporting Revenue Gross as a Principal versus Net as an Agent, on a net basis. All other revenue is recognized on a gross basis.

The Company rents physical textbooks. Revenue from the rental of physical textbooks is deferred and recognized over the rental period commencing at point of sale. The Company offers a buyout option to
allow the purchase of a rented book at the end of the semester. The Company records the buyout purchase when the customer exercises and pays the buyout option price. In these instances, the Company would accelerate any remaining deferred
rental revenue at the point of sale.

NOOK acquires the rights to distribute digital content from
publishers and distributes the content on www.barnesandnoble.com, NOOK® devices and other eBookstore platforms.
Certain digital content is distributed under an agency pricing model, in which the publishers set prices for eBooks and NOOK receives a commission on content sold through the eBookstore. The majority of the Company’s eBooks sold are under the
agency model.

The Barnes & Noble Membership Program offers members greater discounts and other benefits for products
and services, as well as exclusive offers and promotions via email or direct mail, for an annual fee of $25.00, which is non-refundable after the first 30 days. Revenue
is recognized over the 12-month period based upon historical spending patterns for Barnes & Noble members.

Research and Development Costs for Software Products

The Company follows
the guidance in ASC 985-20, Cost of Software to Be Sold, Leased or Marketed, regarding research and development costs for software products to be sold, leased, or otherwise marketed. Capitalization of
software development costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. A certain amount of judgment and estimation is required to assess when technological feasibility is
established, as well as the ongoing assessment of the recoverability of capitalized costs. The Company’s products reach technological feasibility shortly before the products are released and, therefore, research and development costs are
generally expensed as incurred.

Internal-Use Software and Website Development Costs

Direct costs incurred to develop software for internal use and website development costs are capitalized and amortized over an estimated
useful life of three to seven years. During fiscal 2018 and fiscal 2017, the Company capitalized costs, primarily related to labor, consulting, hardware and software, of $17,572 and $18,450, respectively. Amortization of previously capitalized
amounts was $21,807, $23,584 and $30,461 for fiscal 2018, fiscal 2017 and fiscal 2016, respectively. Costs related to the design or maintenance of internal-use software and website development are expensed as incurred.

Advertising Costs

la
costs of advertising are expensed as incurred during the year pursuant to ASC 720-35, Advertising Costs. Advertising costs charged to selling and administrative expenses were $27,553, $36,420 and
$53,569 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

The Company receives payments and credits from vendors
pursuant to co-operative advertising and other programs, including payments for product placement in stores, catalogs and online. In accordance with ASC 605-50-25-10, Customer’s Accounting for Certain Consideration Received from a Vendor, the Company classifies certain
co-op advertising received as a reduction in costs of sales and occupancy. Allowances received from vendors exceeded gross advertising costs in each of the fiscal years noted above.

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Closed Store Expenses

When the Company closes or relocates a store, the Company charges unrecoverable costs to expense. Such costs include the net book value of abandoned fixtures and leasehold improvements and, when a store
is closed prior to the expiration of the lease, a provision for future lease obligations, net of expected sublease recoveries. Costs associated with store closings of $474, $1,434 and $744 during fiscal 2018, fiscal 2017 and fiscal 2016,
respectively, are included in selling and administrative expenses in the accompanying consolidated statements of operations.

Net Earnings
(Loss) per Share

In accordance with ASC
260-10-45, Share-Based Payment Arrangements and Participating Securities and the Two-Class Method, unvested share-based
payment awards that contain rights to receive non-forfeitable dividends are considered participating securities. The Company’s unvested restricted shares and unvested restricted stock units granted prior
to July 15, 2015 and shares issuable under the Company’s deferred compensation plan were considered participating securities. Cash dividends to restricted stock units and performance-based stock units granted on or after July 15, 2015
are not distributed until and except to the extent that the restricted stock units vest, and in the case of performance-based stock units, until and except to the extent that the performance metrics are achieved or are otherwise deemed satisfied.
Stock options do not receive cash dividends. As such, these awards are not considered participating securities.

Basic
earnings per common share is calculated by dividing the net income, adjusted for preferred dividends and income allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted net
income per common share reflects the dilution that would occur if any potentially dilutive instruments were exercised or converted into common shares. The dilutive effect of participating securities is calculated using the more dilutive of the
treasury stock method or two-class method. Other potentially dilutive securities include preferred stock, stock options, restricted stock units granted after July 15, 2015, and performance-based
stock units and are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods. See Note 7 to the Consolidated Financial Statements for further information regarding the calculation of basic
and diluted earnings (loss) per common share.

Income Taxes

The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax bases of assets
and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. The Company regularly reviews its deferred tax assets for recoverability and
establishes a valuation allowance, if determined to be necessary. The Company establishes a reserve for uncertain tax positions. If the Company considers that a tax position is more likely than not of being sustained upon audit, based solely on the
technical merits of the position, it recognizes the tax benefit. The Company measures the tax benefit by determining the largest amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by
the appropriate taxing authority that has full knowledge of all relevant information. A reserve for an uncertain income tax position will be recognized if it has less than a 50% likelihood of being sustained. The tax positions are analyzed
periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments for those positions. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.

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Gift Cards

The Company sells gift cards, which can be used in its stores, on www.barnesandnoble.com, on NOOK® devices and at B&N Education stores. The Company does not charge administrative or dormancy fees on gift cards
and gift cards have no expiration dates. Upon the purchase of a gift card, a liability is established for its cash value. Revenue associated with gift cards is deferred until redemption of the gift card. Gift cards redeemed at B&N Education are
funded by the gift card liability at the Company. Over time, a portion of the gift cards issued is typically not redeemed. The Company estimates the portion of the gift card liability for which the likelihood of redemption is remote based upon the
Company’s historical redemption patterns. The Company records this amount in revenue on a straight-line basis over a 12-month period beginning in the 13
th month after the month the gift card was originally sold. Additional
breakage may be required if gift card redemptions continue to run lower than historical patterns.

The Company recognized gift
card breakage of $43,922, $35,524 and $29,074 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively. The Company had gift card liabilities of $323,465 and $351,424 as of April 28, 2018 and April 29, 2017, respectively.

Accounts Receivable

Accounts receivable, as presented on the Company’s Consolidated Balance Sheets, is net of allowances. An allowance for doubtful
accounts is determined through an analysis of the aging of accounts receivable and assessments of collectability based on historic trends, the financial condition of the Company’s customers and an evaluation of economic conditions. The Company
writes off uncollectible trade receivables once collection efforts have been exhausted. Costs associated with allowable customer markdowns and operational chargebacks, net of the expected recoveries, are part of the provision for allowances included
in accounts receivable. These provisions result from seasonal negotiations, as well as historic deduction trends net of expected recoveries, and the evaluation of current market conditions.

Reclassifications

Certain prior period amounts have been reclassified for
comparative purposes to conform with the fiscal 2018 presentation.

Recent Accounting Pronouncements

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive
Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
, which allows for an optional reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects as a
result of the newly enacted federal corporate income tax rate under the Tax Cuts and Jobs Act. This guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. Two transition methods
are available: at the beginning of the period of adoption, or retrospective to each period in which the income tax effects of the Tax Cuts and Jobs Act related to items remaining in accumulated other comprehensive income are recognized. The Company
is evaluating the effect this ASU will have on its consolidated financial statements and related disclosures.

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In January 2017, the FASB issued ASU
2017-04. la standard simplifies the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to
measure impairment. Instead, goodwill impairment is measured as the difference between the fair value of the reporting unit and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax-deductible goodwill when measuring goodwill impairment loss. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019, with early
adoption permitted for impairment tests performed after January 1, 2017. The Company has early adopted ASU 2017-04 on October 29, 2017, the first day of the third quarter of fiscal 2018.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) –
Classification of Certain Cash Receipts and Cash Payments
(ASU 2016-15). This update clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including debt
prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and distributions from certain equity method investees. The new standard is effective for fiscal years,
and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. ASU 2016-15 is effective for the Company beginning April 29, 2018 under a retrospective
approach. The Company does not expect adoption will have a material impact on its consolidated statement of cash flows.

In
March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting (ASU
2016-09). ASU 2016-09 includes provisions to simplify certain aspects related to the accounting for share-based awards and the related financial statement presentation.
ASU 2016-09 provides for changes to accounting for stock compensation, including: 1) excess tax benefits and tax deficiencies related to share based payment awards to be recognized as income tax benefit or
expense when the awards vest or are settled (previously such amounts were recognized in additional paid-in capital); entities must apply the new guidance on accounting for excess tax benefits and tax
deficiencies prospectively, except for excess tax benefits that were identified from previous transactions that had not been previously recognized because the related tax deduction did not reduce income taxes payable; entities must use a modified
retrospective transition method to recognize such excess tax benefits as a credit to retained earnings; any deferred tax assets recorded in connection with the modified retrospective recognition of excess tax benefits must be assessed for
realizability, and, if necessary, a valuation allowance must be recognized through a cumulative-effect adjustment to retained earnings; 2) excess tax benefits will be classified as an operating activity in the statement of cash flows; 3) the option
to elect to estimate forfeitures or account for them when they occur; 4) classification of cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity in the statements of cash flows; and 5)
eliminating the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable.

la
Company adopted ASU 2016-09 during the first quarter ended July 29, 2017. Accordingly, the primary effects of the adoption are as follows: 1) excess tax expense of $915 was recorded during fiscal 2018
related to the prospective application of excess tax benefits and tax deficiencies related to stock-based compensation settlements; 2) using a modified retrospective application, the Company recorded unrecognized excess tax benefits of $1,235 as a
cumulative-effect adjustment, which increased retained earnings, and reduced deferred taxes by the same; 3) using a modified retrospective application, the Company has elected to recognize forfeitures as they occur and recorded a $1,310 increase to
additional paid-in capital, a $1,079 reduction to retained earnings, and a $231 reduction to deferred taxes to reflect the incremental stock-based compensation expense, net of the related tax impacts, that
would have been recognized in prior years under the modified guidance; and 4) $1,579 and $1,838 in excess tax benefits from stock-based compensation was reclassified from cash flows from financing activities to cash flows from operating activities
for fiscal 2017 and fiscal 2016, respectively, in the Consolidated Statements of Cash Flows.

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In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842) (ASU 2016-02), in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases
classified as operating leases under previous Generally Accepted Accounting Principles. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 requires
expanded disclosures about the nature and terms of lease agreements and is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. A modified
retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company plans to adopt ASU
2016-02 effective April 28, 2019. The Company remains on schedule and has implemented key system functionality to enable the preparation of restated financial information. The Company is currently
evaluating the provisions of this standard and assessing its existing lease portfolio in order to determine the impact on its accounting systems, processes and internal controls over financial reporting. The Company expects the adoption of this
standard will result in a significant increase to its long-term assets and liabilities on its consolidated balance sheet. However, the Company does not expect adoption will have a material impact on its consolidated statement of operations and cash
flows.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of
Inventory
(ASU 2015-11), modifying the accounting for inventory. Under ASU 2015-11, the measurement principle for inventory will change from lower of cost or market
value to lower of cost and net realizable value. ASU 2015-11 defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion,
disposal, and transportation. ASU 2015-11 is applicable to inventory that is accounted for under the first-in, first-out method
and is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2015-11 effective
April 30, 2017. The majority of the Company’s merchandise inventories are valued using the retail inventory method, which is outside the scope of ASU 2015-11. The remaining inventory of the
Company’s merchandise inventories are valued at the lower of cost and net realizable value using the average cost method. The Company applied the amendments in this update prospectively to the measurement of inventory after the date of adoption
with no material impact to the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which was further amended in 2015 and 2016 (Topic 606). The standard provides companies with a single model for use in accounting for revenue arising from
contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as
opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. Topic 606 was effective for the Company on April 29, 2018. The guidance permits companies to either apply the requirements
retrospectively to all prior periods presented (full retrospective method), or apply the requirements in the year of adoption, through a cumulative adjustment (modified retrospective method). The Company will adopt Topic 606 in the first quarter of
fiscal 2019 using the modified retrospective method. The new standard primarily impacts the Company’s accounting for gift card breakage. Under Topic 606, the Company will recognize gift card breakage proportionately as redemptions occur. la
changes in accounting policies related to the adoption of Topic 606 will result in a cumulative adjustment net of income taxes to increase retained earnings of approximately $65,000 to $80,000. The Company is in the process of implementing changes
to its processes, controls and systems in support of the adoption of this ASU.

F-45


Reporting Period

The Company’s fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. The reporting periods ended April 28, 2018, April 29, 2017 and
April 30, 2016 each contained 52 weeks.

Tovább
August 3, 2015, the Company and certain of its subsidiaries entered into a credit agreement (Credit Agreement) with Bank of America, N.A., as administrative agent, collateral agent and swing line lender, and the other lenders from time to time
party thereto, under which the lenders committed to provide a five-year asset-backed revolving credit facility in an aggregate committed principal amount of up to $700,000 (Revolving Credit Facility). On September 30, 2016, the Company amended
the Credit Agreement to provide for a new “first-in, last-out” revolving credit facility (the FILO Credit Facility and, together with the Revolving Credit
Facility, the Credit Facility) in an aggregate principal amount of up to $50,000, which supplements availability under the Revolving Credit Facility. The Company generally must draw down the FILO Credit Facility before making any borrowings under
the Revolving Credit Facility.

Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Wells
Fargo Bank, N.A. and SunTrust Robinson Humphrey, Inc. are the joint lead arrangers for the Credit Facility. The Credit Facility replaced the prior credit facility. Proceeds from the Credit Facility are used for general corporate purposes, including
seasonal working capital needs.

The Company and certain of its subsidiaries are permitted to borrow under the Credit
Facility. The Credit Facility is secured by substantially all of the inventory, accounts receivable and related assets of the borrowers under the Credit Facility (collectively, the Loan Parties), but excluding the equity interests in the Company and
its subsidiaries, intellectual property, equipment and certain other property. Borrowings under the Credit Facility are limited to a specified percentage of eligible collateral. The Company has the option to request an increase in commitments under
the Credit Facility of up to $250,000, subject to certain restrictions.

The Credit Facility allows the Company to declare and
pay up to $70,000 in dividends annually to its stockholders without compliance with any availability or ratio-based limitations.

Interest under the Revolving Credit Facility accrues, at the election of the Company, at a LIBOR or alternate base rate, plus, in each case, an applicable interest rate margin, which is determined by
reference to the level of excess availability under the Revolving Credit Facility. Through the end of the fiscal quarter during which the closing of the Revolving Credit Facility occurred, loans under the Revolving Credit Facility bore interest at
LIBOR plus 1.750% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 0.750% per annum, in the alternative, and thereafter the interest rate began to fluctuate between LIBOR plus 2.000% per annum and LIBOR plus 1.500% per
annum (or between the alternate base rate plus 1.000% per annum and the alternate base rate plus 0.500% per annum), based upon the average daily availability under the Revolving Credit Facility for the immediately preceding fiscal quarter. Interest
under the FILO Credit Facility accrues, at the election of the Company, at a LIBOR or alternate base rate, plus, in each case, an applicable interest rate margin, which is also determined by reference to the level of excess availability under the
Revolving Credit Facility. Loans under the FILO Credit Facility bear interest at 1.000% per annum more than loans under the Revolving Credit Facility.

F-46


The Credit Agreement contains customary negative covenants, which limit the Company’s
ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets, among other things. In addition, if excess availability under the Credit Facility were to fall
below certain specified levels, certain additional covenants (including fixed charge coverage ratio requirements) would be triggered, and the lenders would assume dominion and control over the Loan Parties’ cash.

The Credit Agreement contains customary events of default, including payment defaults, material breaches of representations and
warranties, covenant defaults, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The Credit
Agreement also contains customary affirmative covenants and representations and warranties.

The Company wrote off $460 of
deferred financing fees related to the prior credit facility during fiscal 2016 and the remaining unamortized deferred financing fees of $3,542 were deferred and are being amortized over the five-year term of the Credit Facility. The Company also
incurred $5,701 of fees to secure the Credit Facility, which are being amortized over the five-year term accordingly. During fiscal 2017, the Company incurred $474 of fees to secure the FILO Credit Facility, which are being amortized over the same
term as the Credit Facility.

The Company had $158,700 and $64,900 of outstanding debt under the Credit Facility as of
April 28, 2018 and April 29, 2017, respectively. The Company had $34,213 and $38,833 of outstanding letters of credit under its Credit Facility as of April 28, 2018 and April 29, 2017, respectively.

The following table presents selected information related to the Company’s credit facilities:

Fiscal
2018
Fiscal
2017
Fiscal
2016

Credit facility at period end

$ 158,700 64,900 47,200

Average balance outstanding during the period

$ 141,478 96,297 66,948

Maximum borrowings outstanding during the period

$ 287,933 285,278 293,200

Weighted average interest rate during the period (a)

5.55 % 5.77 % 8.21 %

Interest rate at end of period

3.92 % 3.73 % 2.69 %

(a) Includes commitment fees.

Fees
expensed with respect to the unused portion of the credit facilities were $2,235, $2,235 and $2,781 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

The Company has no agreements to maintain compensating balances.

3. Stock-Based Compensation

The Company maintains one active share-based incentive plan: the Amended and Restated 2009 Incentive Plan. Prior to June 2, 2009, the
Company issued restricted stock and stock options under the 1996 and 2004 Incentive Plans. On June 2, 2009, the Company’s shareholders approved the 2009 Incentive Plan. Under the 2009 Incentive Plan, the Company has issued restricted stock
units, restricted stock and stock options. On September 11, 2012, the Company’s shareholders approved the Amended and Restated 2009 Incentive Plan. Under the Amended and Restated 2009 Incentive Plan, the Company has issued
performance-based stock units, restricted stock units, restricted stock and stock options. At April 28, 2018, there were approximately 5,689,643 shares of common stock available for future grants under the Amended and Restated 2009 Incentive Plan.

F-47


A restricted stock award is an award of common stock that is subject to certain restrictions
during a specified period. Restricted stock awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the
restricted shares vest. Shares of unvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon and are considered to be currently issued and outstanding. The Company’s
restricted stock awards vest over a period of one to four years. The Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, straight-line over the period during
which the restrictions lapse. For these purposes, the fair market value of the restricted stock is determined based on the closing price of the Company’s common stock on the grant date.

A restricted stock unit is a grant valued in terms of the Company’s common stock, but no stock is issued at the time of grant. la
restricted stock units may be redeemed for one share of common stock each once vested. Restricted stock units are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer
the units except in very limited circumstances and with the consent of the compensation committee. Shares of unvested restricted stock units have no voting rights but are entitled to receive dividends and other distributions thereon. Cash dividends
to restricted stock units granted on or after July 15, 2015 are not distributed until the restricted stock units vest. The Company’s restricted stock units vest over a period of one to four years. The Company expenses the cost of the
restricted stock units, which is determined to be the fair market value of the shares at the date of grant, straight-line over the period during which the restrictions lapse. For these purposes, the fair market value of the restricted stock unit is
determined based on the closing price of the Company’s common stock on the grant date.

A performance-based stock unit is
a grant valued in terms of the Company’s common stock, but no stock is issued at the time of grant. Each performance-based stock unit may be redeemed for one share of common stock once vested. In general, upon the achievement of a minimum
threshold, 50% to 150% of these awards vest at the end of a three year performance period from the date of grant based upon achievement of the performance goal specified in the performance-based stock unit agreement. Performance-based stock units
are generally subject to forfeiture if employment terminates prior to the settlement of the award. The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee. Shares of unvested
performance-based stock units have no voting rights but are entitled to receive dividends and other distributions thereon. Cash dividends to performance-based stock units are not distributed until the award is settled. The Company expenses the cost
of the performance-based stock units, which is determined to be the fair market value of the shares at the date of grant, ratably over the requisite service period, based on the probability of achieving the performance goal, with changes in
expectations recognized as an adjustment to earnings in the period of the change. If the performance goal is not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.

The Company uses the Black-Scholes option-pricing model to value the Company’s stock options for each stock option award. Using this
option-pricing model, the fair value of each stock option award is estimated on the date of grant. The fair value of the Company’s stock option awards, which are generally subject to pro-rata vesting
annually over four years, is expensed on a straight-line basis over the vesting period of the stock options. The expected volatility assumption is based on traded options volatility of the Company’s stock over a term equal to the expected
term of the option granted. The expected term of stock option awards granted is derived from historical exercise experience under the Company’s stock option plans and represents the period of time that stock option awards granted are expected
to be outstanding. The expected term assumption incorporates the contractual term of an option grant, which is ten years, as well as the vesting period of an award, which is generally pro-rata vesting annually
over four years. The risk-free interest rate is based on the implied yield on a U.S. Treasury constant maturity with a remaining term equal to the expected term of the option granted.

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No stock options were granted during fiscal 2018, fiscal 2017 or fiscal 2016.

The Company recognizes stock-based compensation costs on a straight-line basis over the requisite service period of the award and
recognizes forfeitures as they occur.

In September 2003, Leonard Riggio, the Company’s Executive Chairman, exercised
1,318,750 stock options by tendering in payment of the exercise price of the stock options 606,277 shares that he held in the Company’s stock. Mr. Riggio elected to defer receipt of the balance of the shares (712,473) due from the exercise
pursuant to the Company’s Executive Deferred Compensation Plan (Plan). In accordance therewith, the Company established a rabbi trust (Rabbi Trust) under the Plan for the benefit of Mr. Riggio, which holds 712,473 shares of the
Company’s common stock. The shares held by the Rabbi Trust were treated as treasury stock. Due to the deferred compensation arrangement, these shares were included in the denominator of the earnings per share calculation in accordance with ASC
260, Earnings Per Share, when the impact was not antidilutive.

On March 15, 2017, the Board of Directors of the
Company approved the termination of the Plan and the Rabbi Trust. As part of the termination of the Plan, all amounts deferred under the Plan and held in the Rabbi Trust were distributed in March 2017 to Mr. Riggio, who was the sole
participant in the Plan.

Stock-Based Compensation Activity

The following table presents a summary of the Company’s stock option activity:

Number of Shares
(in thousands)
Weighted
Average
Gyakorlat
prix
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value (in
thousands)

Balance, May 2, 2015

455 $ 16.62 6.27 years $ 3,114

Granted

0.00 (a)

Exercised

(111 ) 11.71 (a)

Forfeited

(239 ) 10.89 (a)

Adjustment due to the Spin-Off of B&N Education

219

Balance, April 30, 2016

324 $ 11.29 5.09 years $ 516

Granted

0.00

Exercised

(31 ) 9.91

Forfeited

(38 ) 21.14

Balance, April 29, 2017

255 $ 9.99 4.62 years $ 11

Granted

0.00

Exercised

0.00

Forfeited

(79 ) 10.08

Balance, April 28, 2018

176 $ 9.95 3.63 years $ 0

Vested and expected to vest in the future at April 28, 2018

176 $ 9.95 3.63 years $ 0

Exercisable at April 28, 2018

176 $ 9.95 3.63 years $ 0

Available for grant at April 28, 2018

5,690

(a)

Weighted average exercise price is calculated using exercise price prior to
la Spin-Off and after the Spin-Off.

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The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the related fiscal year and the exercise price, multiplied by the related in-the-money options) that would have been received by the option holders had they exercised their options at the end of the fiscal year. This amount changes based on the
market value of the Company’s common stock. Total intrinsic value of options exercised for fiscal 2018, fiscal 2017 and fiscal 2016 (based on the difference between the Company’s stock price on the exercise date and the respective exercise
price, multiplied by the number of options exercised) was $0, $99 and $546, respectively.

As of April 28, 2018, there
was no unrecognized compensation expense related to unvested stock options granted under the Company’s share-based compensation plans.

The following table presents a summary of the Company’s restricted stock activity:

Number of Shares
(in thousands)
Weighted
Average Grant
Date Fair Value

Balance, May 2, 2015

43 $ 22.24

Granted

64 13.04

Vested

(43 ) 22.24

Forfeited

0.00

Balance, April 30, 2016

64 $ 13.04

Granted

77 10.95

Vested

(64 ) 13.04

Forfeited

0.00

Balance, April 29, 2017

77 $ 10.95

Granted

141 7.10

Vested

(77 ) 10.95

Forfeited

0.00

Balance, April 28, 2018

141 $ 7.10

Total fair value of shares of restricted stock that vested during fiscal 2018, fiscal 2017 and fiscal
2016 was $548, $680 and $637, respectively. As of April 28, 2018, there was $333 of unrecognized stock-based compensation expense related to non-vested restricted stock awards. That cost is expected to be
recognized over a weighted average period of 0.40 years.

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The following table presents a summary of the Company’s restricted stock unit activity:

Number of Shares
(in thousands)
Weighted
Average Grant
Date Fair Value

Balance, May 2, 2015

2,055 $ 15.62

Granted

692 18.82 (a)

Vested

(1,312 ) 10.68 (a)

Forfeited

(1,054 ) 10.74 (a)

Adjustment due to the Spin-Off of B&N Education

1,057

Balance, April 30, 2016

1,438 $ 13.76

Granted

547 12.42

Vested

(609 ) 11.75

Forfeited

(826 ) 14.22

Balance, April 29, 2017

550 $ 13.96

Granted

813 7.17

Vested

(228 ) 14.10

Forfeited

(99 ) 11.39

Balance, April 28, 2018

1,036 $ 8.85

(a)

Weighted average grant date fair value is calculated using the grant price
prior to the Spin-Off and after the Spin-Off.

Total fair value of shares of restricted stock units that vested during fiscal 2018, fiscal 2017 and fiscal 2016 were $1,694, $6,612 and $18,047, respectively. As of April 28, 2018, there was $5,685
of unrecognized stock-based compensation expense related to non-vested restricted stock units. That cost is expected to be recognized over a weighted average period of 1.93 years.

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The following table presents a summary of the Company’s performance-based stock unit
activity:

Number of Shares
(in thousands)
Weighted
Average Grant
Date Fair Value

Balance, May 2, 2015

$ 0.00

Granted

110 28.08 (a)

Vested

0.00 (a)

Forfeited

(17 ) 18.46 (a)

Adjustment due to the Spin-Off of B&N Education

58

Balance, April 30, 2016

151 $ 18.41

Granted

507 12.48

Vested

0.00

Forfeited

(238 ) 13.55

Balance, April 29, 2017

420 $ 14.00

Granted

706 7.35

Vested

0.00

Forfeited

(117 ) 12.01

Balance, April 28, 2018

1,009 $ 9.58

(a)

Weighted average grant date fair value is calculated using the grant price
prior to the Spin-Off and after the Spin-Off.

There were no vesting of performance-based stock units during fiscal 2018, fiscal 2017 and fiscal 2016. As of April 28, 2018, there was $4,069 of unrecognized stock-based compensation expense related
à lui non-vested performance-based stock units. That cost is expected to be recognized over a weighted average period of 1.80 years.

For fiscal 2018, fiscal 2017 and fiscal 2016, stock-based compensation expense of $6,865, $6,299 and $14,201, respectively, is included in selling and administrative expenses.

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Receivables represent customer, private and public institutional and government billings, credit/debit card, advertising, landlord and
other receivables due within one year as follows:

April 28,
2018
April 29,
2017

Trade accounts

$ 19,446 $ 16,189

Credit/debit card receivables

22,564 25,136

eBook settlement receivable (see Note 21)

452 2,478

Other receivables

22,100 23,491

Total receivables, net

$ 64,562 $ 67,294

5. Other Long-Term Liabilities

Other long-term liabilities consist primarily of deferred rent, long-term insurance liabilities, asset retirement obligations and tax liabilities and reserves. The Company provides for minimum rent
expense over the lease terms (including the build-out period) on a straight-line basis. The excess of such rent expense over actual lease payments (net of tenant allowances) is classified as deferred
rent. Other long-term liabilities also include store closing expenses, long-term deferred revenues and a health care and life insurance plan for certain retired employees. The Company had the following other long-term liabilities at
April 28, 2018 and April 29, 2017:

April 28,
2018
April 29,
2017

Deferred rent

$ 50,720 $ 59,142

Insurance liabilities

12,589 14,225

Asset retirement obligations

11,629 11,482

Tax liabilities and reserves

5,124 8,711

Other

4,209 5,751

Total other long-term liabilities

$ 84,271 $ 99,311

6. Fair Values of Financial Instruments

In accordance with ASC 820, Fair Value Measurements and Disclosures (ASC 820), 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 1 – Observable inputs that reflect quoted prices in active markets
Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3 – Unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own assumptions

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The Company’s financial instruments include cash, receivables, gift cards, accrued
liabilities, accounts payable and its credit facility. The fair values of cash, receivables, gift cards, 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.

The Company
compares the fair value of a reporting unit and the carrying value of the reporting unit to measure goodwill impairment loss as required by ASU 2017-04. During fiscal 2018, the Company recognized an impairment
of its B&N Retail reporting unit goodwill of $133,612 as a result of lower than expected holiday season sales, which resulted in a revised forecast outlook and lower market price of the Company’s common stock. Fair value was determined
using the combination of a discounted cash flow method (income approach) and the guideline public company method (market comparable approach), weighted equally in determining the fair value of the Company. The market comparable approach estimates
fair value using market multiples of various financial measures compared to a set of comparable public companies. In performing the valuations, significant assumptions utilized include unobservable Level 3 inputs including cash flows and
long-term growth rates reflective of management’s forecasted outlook, and discount rates inclusive of risk adjustments consistent with current market conditions. Discount rates are based on the development of a weighted average cost of capital
using guideline public company data, factoring in current market data and any company specific risk factors. See Note 1 for further discussion on goodwill impairment.

During fiscal 2018, the Company impaired long-lived asset at B&N Retail stores due to lower than expected holiday season. As a result, the Company recorded an impairment charge of $1,823 in selling
and administrative expenses. In determining whether the carrying value of long-lived assets is less than its estimated fair value, a discounted cash flow approach to value was used, which was based on Level 3 inputs as defined by ASC 820.

During fiscal 2016, the Company impaired one of its publishing contracts due to a significant drop in business with that
publisher, driven by lower title offerings, product quality and the loss of a distribution partner. As a result, the Company recorded an impairment charge of $3,840 in selling and administrative expenses. In determining whether the carrying value of
unamortizable intangible assets is less than its estimated fair value, a discounted cash flow approach to value was used, which was based on Level 3 inputs as defined by ASC 820.

7. Net Earnings (Loss) per Share

In accordance with ASC 260-10-45, Share-Based Payment Arrangements and Participating Securities and the Two-Class Method, unvested share-based payment awards that contain rights to receive non-forfeitable dividends are considered participating securities. The Company’s
unvested restricted shares and unvested restricted stock units granted prior to July 15, 2015 and shares issuable under the Company’s deferred compensation plan were considered participating securities. Cash dividends to restricted stock
units and performance-based stock units granted on or after July 15, 2015 are not distributed until and except to the extent that the restricted stock units vest, and in the case of performance-based stock units, until and except to the extent
that the performance metrics are achieved or are otherwise deemed satisfied. Stock options do not receive cash dividends. As such, these awards are not considered participating securities.

Basic earnings per common share are calculated by dividing the net income, adjusted for preferred dividends and income allocated to
participating securities, by the weighted average number of common shares outstanding during the period. Diluted net income per common share reflects the dilution that would occur if any potentially dilutive instruments were exercised or converted
into common shares. The dilutive effect of participating securities is calculated using the more dilutive of the treasury stock method or two-class method. Other potentially dilutive securities include
preferred stock, stock options, restricted stock units granted after July 15, 2015, and performance-based stock units and are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods.

F-54


During periods of net loss, no effect is given to the participating securities because they
do not share in the losses of the Company. Due to the net loss during fiscal 2018 and fiscal 2016, participating securities in the amounts of 127,509 and 2,163,190, 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 non-participating securities consisting of dilutive stock options and restricted
stock units of 38,584, 140,341 and 129,450 for fiscal 2018, fiscal 2017 and fiscal 2016, respectively, and accretion/payments of dividends on preferred shares in fiscal 2006 were also excluded from the calculation of loss per share using the two-class method because the effect would be antidilutive.

The following is a
reconciliation of the Company’s basic and diluted income (loss) per share calculation:

Fiscal
2018
Fiscal
2017
Fiscal
2016

Numerator for basic income (loss) per share:

Net income (loss) from continuing operations

$ (125,480 ) 22,023 14,700

Inducement fee paid upon conversion of Series J preferred stock

(3,657 )

Preferred stock dividends paid in shares

(1,783 )

Accretion of dividends on preferred stock

(4,204 )

Less allocation of dividends to participating securities

(80 ) (576 ) (1,219 )

Net income (loss) from continuing operations available to common shareholders

(125,560 ) 21,447 3,837

Net loss from discontinued operations available to common shareholders

(39,146 )

Net income (loss) available to common shareholders

$ (125,560 ) 21,447 (35,309 )

Numerator for diluted income (loss) per share:

Net income (loss) from continuing operations available to common shareholders

$ (125,560 ) 21,447 3,837

Accretion of dividends on preferred stock (a)

Allocation of undistributed earnings to participating securities

Less diluted allocation of undistributed earnings to participating securities

Net income (loss) from continuing operations available to common shareholders

(125,560 ) 21,447 3,837

Net loss from discontinued operations available to common shareholders

(39,146 )

Net income (loss) available to common shareholders

$ (125,560 ) 21,447 (35,309 )

Denominator for basic income (loss) per share:

Basic weighted average common shares

72,588 72,188 72,410

Denominator for diluted income (loss) per share:

Basic weighted average shares

72,588 72,188 72,410

Average dilutive options

63 118

Average dilutive non-participating securities

77 14

Diluted weighted average common shares

72,588 72,328 72,542

Basic income (loss) per common share:

Income (loss) from continuing operations

$ (1.73 ) 0.30 0.05

Loss from discontinued operations

(0.54 )

Basic income (loss) per common share

$ (1.73 ) 0.30 (0.49 )

Diluted income (loss) per common share:

Income (loss) from continuing operations

$ (1.73 ) 0.30 0.05

Loss from discontinued operations

(0.54 )

Diluted income (loss) per common share

$ (1.73 ) 0.30 (0.49 )

(a)

Although the Company was in a net income position during fiscal 2016, the dilutive effect of the Company’s convertible preferred shares was
excluded from the calculation of income per share using the two-class method because the effect would be antidilutive.

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8. Pension and Other Postretirement Benefit Plans

The Company previously maintained a non-contributory defined benefit pension plan (the Pension Plan). On June 18, 2014, the Company’s Board of Directors
approved a resolution to terminate the Pension Plan. The Pension Plan termination was effective November 1, 2014 and the accrued benefit for active participants was vested as of such date.

In fiscal 2016, there was a final Pension Plan termination lump-sum opportunity offered to 2,300
active and terminated vested participants at the final Pension Plan termination distribution date. As a result, lump-sum payments of approximately $18,100 were distributed in March 2016 to about 1,800
participants who elected to receive an immediate distribution of their benefit as part of the plan termination lump-sum window. Benefits for the remaining plan population were transferred to Massachusetts
Mutual Life Insurance Company for an annuity purchase premium of $34,300. Further, in October 2016, a payment was made by the Company to the Pension Benefit Guaranty Corporation to transfer the liability for benefits payable to 28 missing
participants. A final distribution of remaining assets from the trust was made on November 8, 2016.

Pension expense was
$3, $276 and $25,330 for fiscal 2018, fiscal 2017 and fiscal 2016, respectively. For fiscal 2016, regular annual expense was $4,433, with pension settlement charge of $20,897 from the plan liquidation, for a total pension expense for fiscal 2016 of
$25,330.

The Company maintains a defined contribution plan (the Savings Plan) for the benefit of substantially all employees.
Total Company contributions charged to employee benefit expenses for the Savings Plan were $11,275, $11,815 and $12,251 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

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Income
(loss) before income taxes for fiscal 2018, fiscal 2017 and fiscal 2016 are as follows:

Fiscal 2018 Fiscal 2017 Fiscal 2016

Domestic operations

$ (137,693 ) 47,127 6,827

Foreign operations

(2 ) (328 ) (941 )

Total income (loss) before taxes

(137,695 ) 46,799 5,886

Income tax provisions (benefits) for fiscal 2018, fiscal 2017 and fiscal 2016 are as follows:

Fiscal 2018 Fiscal 2017 Fiscal 2016

Current:

Federal

$ 19,990 3,722 (47,053 )

State

(1,340 ) (7,480 ) 3,908

Foreign

(273 )

Total current

18,650 (3,758 ) (43,418 )

Deferred:

Federal

(52,831 ) 25,724 21,570

State

21,966 2,810 13,018

Foreign

16

Total deferred

(30,865 ) 28,534 34,604

Total

$ (12,215 ) 24,776 (8,814 )

Reconciliation between the effective income tax rate and the federal statutory income tax rate is as
follows:

Fiscal 2018 Fiscal 2017 Fiscal 2016

Federal statutory income tax rate

30.3 % 35.0 % 35.0 %

State income taxes, net of federal income tax benefit

3.0 10.0 8.3

Changes to unrecognized tax benefits

1.8 (5.9 ) (111.3 )

Excess executive compensation

(0.1 ) 0.3 8.0

Meals and entertainment disallowance

(0.2 ) 0.5 5.1

Tax credits

0.6 (76.3 )

Changes in valuation allowance

(26.7 ) (1.2 ) 108.6

Changes in deferred taxes and payables

(3.7 ) 7.0 (134.8 )

Amounts not deductible for tax

0.1 1.9

State law changes

1.5 3.1 4.7

Impact of Tax Cuts and Jobs Act

4.1

Goodwill impairment

(1.8 )

Other, net

2.2 3.0

Effective income tax rate

8.9 % 52.9 % (149.7 )%

The Company recorded an income tax benefit of $12,215 in fiscal 2018 compared with an income tax
provision of $24,776 and income tax benefit of $8,814 in fiscal 2017 and fiscal 2016, respectively. The current federal tax expense of $19,990 is primarily due to certain reclassifications recorded as a result of the Company changing its tax year
during fiscal 2018, with a corresponding deferred tax benefit. The net impact of the tax year-end change on total tax expense was nominal. The Company’s effective tax rate was 8.9%, 52.9% and (149.7)% in fiscal 2018, fiscal 2017 and fiscal
2016, respectively. The primary drivers of the effective tax rate in fiscal 2018 include the impact of remeasurement of deferred taxes as a result of the Tax Cuts and Jobs Act, changes in

F-57


deferred taxes and payables and the establishment of valuation allowance against federal and certain state net operating losses. Due to the change in the federal tax rate from 35% to 21%, fiscal
year filers are required to use a blended rate for their fiscal year that includes the date of enactment. Accordingly, the federal statutory rate for the Company is 30.3% for fiscal 2018.

The primary drivers of the effective tax rate in fiscal 2017 included changes in uncertain tax positions and changes in deferred taxes
and payables. In fiscal 2016, as shown above in the changes in deferred taxes and payables, changes to unrecognized tax benefits and changes in valuation allowance, certain adjustments to earnings were recorded to correct immaterial errors
attributable to prior fiscal years. The Company has evaluated the effects of these errors, both qualitatively and quantitatively, and concluded that the correction of these errors in prior period amounts was not material to fiscal 2016 or any
previously reported periods, including quarterly reporting.

Effects of the Tax Cuts and Jobs Act

New tax legislation, commonly referred to as the Tax Cuts and Jobs Act or Tax Reform, was enacted on December 22, 2017. Certain
aspects of the new law, including the federal corporate tax rate change, had an impact recorded in the Company’s financial statements.

Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allows registrants to record provisional amounts during a one year “measurement
period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its
accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information
becomes available, prepared or analyzed.

SAB 118 summarizes a three-step process to be applied at each reporting period to
account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not
complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the Tax Cuts and Jobs Act.

Items for which a reasonable estimate was determined include the impact of the change in the corporate tax rate from 35% to 21% and the
changes to the non-deductible executive compensation provisions. The Company recorded a benefit of $27,128 on the remeasurement of its deferred tax assets and liabilities during fiscal 2018. During fiscal
2018, the Company also recorded a net tax detriment as a result of the changes to the non-deductible executive compensation provisions. As the Company awaits further guidance regarding the transition rules,
the tax impact recorded during fiscal 2018 represents a provisional amount based on the guidance that is available. As no additional guidance on the transition rules has been released, the amount recorded remains provisional.

Other significant provisions that did not have an impact on the fiscal 2018 provision but may impact the Company’s income taxes for
future fiscal years include: limitation on the current deductibility of net interest expense in excess of 30% of adjusted taxable income, a limitation of net operating losses generated after fiscal 2018 to 80% of taxable income, and entertainment
and other expense deduction limitation.

The Company continues to not be subject to any transition tax as there are no untaxed
foreign earnings.

F-58


The Company accounts for income taxes using the asset and liability method. Deferred taxes
are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards. At April 28, 2018 and April 29, 2017, the significant components of the
Company’s deferred taxes consisted of the following:

April 28, 2018 April 29, 2017

Deferred tax assets:

Accrued liabilities

$ 70,891 $ 110,029

Insurance liability

4,830 7,973

Loss and credit carryovers

43,704 31,221

Lease transactions

93 7,131

Pension and post-retirement healthcare

340 581

Stock-based compensation

2,237 3,182

Other

1,542 1,379

Gross deferred tax assets

123,637 161,496

Valuation allowance

(45,861 ) (7,644 )

Net deferred tax assets

77,776 153,852

Deferred tax liabilities:

Prepaid expenses

(2,779 ) (4,670 )

Goodwill and intangible asset amortization

(65,910 ) (140,270 )

Inventory

(1,440 ) (2,608 )

Investment in Barnes & Noble.com

(53,304 ) (78,756 )

Depreciation

(6,387 ) (13,680 )

Gross deferred tax liabilities

(129,820 ) (239,984 )

Net deferred tax liabilities

$ (52,044 ) $ (86,132 )

The change in deferred tax asset balance during fiscal 2018 is primarily due to the reduction of the
corporate tax rate from 35% to 21% under the Tax Cuts and Jobs Act.

In assessing the realizability of the deferred tax
assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. In evaluating the Company’s ability to utilize its deferred tax assets, it considered all available evidence, both
positive and negative, in determining future taxable income on a jurisdiction by jurisdiction basis. The Company has recorded a valuation allowance of $45,861 and $7,644 at April 28, 2018 and April 29, 2017, respectively. The increase in the
valuation allowance during fiscal 2018 is due principally to additional allowance being established against any non-indefinite lived net operating losses.

At April 28, 2018, the Company had federal net operating loss carryforwards (NOLs) of approximately $128,414 and state net operating
loss carryforwards of $212,192 that are available to offset taxable income in its respective taxing jurisdictions. The federal net operating losses begin to expire in 2019 through 2024. The utilization of $54,880 of the federal NOLs are subject to
IRC Section 382 and are limited to approximately $6,653 on an annual basis. NOLs not used during a particular period may be carried forward to future years, though not beyond the expiration years. Additionally, the Company had
approximately $73,533 and $211,356 of federal and state NOLs, respectively, that have no annual limitation. The Company had state tax credits totaling $10,168, which have an indefinite life.

As of April 28, 2018, the Company had $6,849 of unrecognized tax benefits, all of which, if recognized, would affect the
Company’s effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal 2018, fiscal 2017 and fiscal 2016 is as follows:

F-59


Balance at May 2, 2015

$ 18,382

Additions for tax positions of the current period

238

Additions for tax positions of prior periods

7,433

Reductions due to settlements

(5,980 )

Reductions for tax positions of prior periods

(5,501 )

Balance at April 30, 2016

$ 14,572

Additions for tax positions of the current period

337

Additions for tax positions of prior periods

1,644

Reductions due to settlements

Reductions for tax positions of prior periods

(7,134 )

Balance at April 29, 2017

$ 9,419

Additions for tax positions of the current period

Additions for tax positions of prior periods

Reductions due to settlements

(22 )

Reductions for tax positions of prior periods

(2,548 )

Balance at April 28, 2018

$ 6,849

The Company’s policy is to recognize interest and penalties related to income tax matters in income
tax expense. The Company recorded net interest and penalties (benefit) expense of approximately $587, $(2,860), and $(7,774) during fiscal 2018, fiscal 2017 and fiscal 2016, respectively. As of April 28, 2018 and April 29, 2017, the
Company had net accrued interest and penalties of $974 and $1,561 respectively.

The amount of unrecognized tax benefits
decreased primarily due to the expiration of various state statutes. Further, we believe that it is reasonably possible that the total amount of unrecognized tax benefits at April 28, 2018 could decrease by approximately $1,162 within the next
12 months as a result of settlement of certain tax audits or lapses of statutes of limitations, which could impact the effective tax rate.

The Company is subject to U.S. federal income tax as well as income tax in jurisdictions of each state having an income tax. The tax years that remain subject to examination are primarily from fiscal 2014
and forward.

10. Intangible Assets and Goodwill

Amortizable intangible assets

Useful
Life
As of April 28, 2018
Gross Carrying
Amount
Accumulated
Amortization
Total

Technológia

5-10 $ 10,710 $ (10,404 ) $ 306

Other

3-10 6,546 (6,497 ) 49

$ 17,256 $ (16,901 ) $ 355