GameStop 2004 Annual Report Download - page 40

Seasonality
Our business, like that of many retailers, is seasonal, with the major portion of sales and operating proÑt
realized during the fourth quarter which includes the holiday selling season. Results for any quarter are not
necessarily indicative of the results that may be achieved for a full Ñscal year. Quarterly results may Öuctuate
materially depending upon, among other factors, the timing of new product introductions and new store
openings, sales contributed by new stores, increases or decreases in comparable store sales, adverse weather
conditions, shifts in the timing of certain holidays or promotions and changes in our merchandise mix.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Exposure
We do not use derivative Ñnancial instruments to hedge interest rate exposure. We limit our interest rate
risks by investing our excess cash balances in short-term, highly-liquid instruments with an original maturity
of three months or less. We do not expect any material losses from our invested cash balances, and we believe
that our interest rate exposure is modest.
Foreign Exchange Exposure
We do not believe we have material foreign currency exposure, because only a very immaterial portion of
our business is transacted in other than United States currency. The Company historically has not entered into
hedging transactions with respect to its foreign currency, but may do so in the future.
Item 8. Financial Statements and Supplementary Data
See Item 15(a)(1) and (2) of this Form 10-K/A.
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
As of the end of the period covered by this report, the Company's management conducted an evaluation,
under the supervision and with the participation of the principal executive oÇcer and principal Ñnancial
oÇcer, of the Company's disclosure controls and procedures (as deÑned in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act). Based on this evaluation, the principal executive oÇcer and principal Ñnancial
oÇcer concluded that, as of the end of the period covered by this report, the Company's disclosure controls
and procedures are eÅective. Notwithstanding the foregoing, 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.
(b) Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over Ñnancial
reporting, as such term is deÑned in Exchange Act Rules 13a-15(f). Under the supervision and with the
participation of our management, including our principal executive oÇcer and principal Ñnancial oÇcer, we
conducted an evaluation of the eÅectiveness of our internal control over Ñnancial reporting based on the
framework in Internal Control Ì Integrated Framework issued by the Committee of Sponsoring Organiza-
tions of the Treadway Commission. Based on our evaluation under the framework in Internal Control Ì
Integrated Framework, our management concluded that our internal control over Ñnancial reporting was
eÅective as of January 29, 2005. Our management's assessment of the eÅectiveness of our internal control over
Ñnancial reporting as of January 29, 2005 has been audited by BDO Seidman, LLP, an independent registered
public accounting Ñrm, as stated in their report which is included herein.
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