GameStop 2004 Annual Report Download - page 80

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GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
15. Certain Relationships and Related Transactions
The Company operates departments within ten bookstores operated by Barnes & Noble. The Company
pays a license fee to Barnes & Noble in amounts equal to 7.0% of the gross sales of such departments.
Management deems the license fee to be reasonable and based upon terms equivalent to those that would
prevail in an arm's length transaction. During the 52 weeks ended January 29, 2005, January 31, 2004 and
February 1, 2003, these charges amounted to $859, $974 and $1,103, respectively.
The Company participates in Barnes & Noble's worker's compensation, property and general liability
insurance programs. The costs incurred by Barnes & Noble under these programs are allocated to the
Company based upon the Company's total payroll expense, property and equipment, and insurance claim
history. Management deems the allocation methodology to be reasonable. During the 52 weeks ended
January 29, 2005, January 31, 2004 and February 1, 2003, these allocated charges amounted to $2,662, $2,363
and $1,726, respectively. The Company's participation in Barnes & Noble's insurance programs will expire in
Ñscal 2005 and the Company will secure new insurance coverage.
In July 2003, the Company purchased an airplane from a company controlled by a member of the Board
of Directors. The purchase price was $9,500 and was negotiated through an independent third party following
an independent appraisal.
In October 2004, the Board of Directors authorized a repurchase of Class B common stock held by
Barnes & Noble. The Company repurchased 6,107 shares of Class B common stock at a price equal to
$18.26 per share for aggregate consideration before expenses of $111,520. The repurchase price per share was
determined by using a discount of 3.5% on the last reported trade of the Company's Class A common stock on
the New York Stock Exchange prior to the time of the transaction. The Company paid $37,500 in cash and
issued a promissory note in the principal amount of $74,020, which is payable in installments over the next
three years and bears interest at 5.5% per annum, payable when principal installments are due. The Company
made a principal payment of $37,500 on the promissory note in January 2005. Interest expense on the
promissory note for the 52 weeks ended January 29, 2005 totaled $1,271.
16. SigniÑcant Products
The following table sets forth sales (in millions) by signiÑcant product category for the periods indicated:
52 Weeks Ended 52 Weeks Ended 52 Weeks Ended
January 29, 2005 January 31, 2004 February 1, 2003
Percent Percent Percent
Sales of Total Sales of Total Sales of Total
Sales:
New video game hardware ÏÏÏÏ $ 209.2 11.4% $ 198.1 12.6% $ 216.8 16.0%
New video game software ÏÏÏÏÏ 776.7 42.1% 647.9 41.0% 524.7 38.8%
Used video game products ÏÏÏÏ 511.8 27.8% 403.3 25.5% 296.4 21.9%
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 345.1 18.7% 329.5 20.9% 314.9 23.3%
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,842.8 100.0% $1,578.8 100.0% $1,352.8 100.0%
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