GameStop 2005 Annual Report Download - page 93

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senior notes, respectively. The changes in the carrying amount of deferred financing fees and intangible assets for
the 52 weeks ended January 29, 2005 and January 28, 2006 were as follows:
Deferred
Financing Fees
Intangible
Assets
(In thousands)
Balance at January 31, 2004 .................................. $ 328 $ —
Addition for revolving credit facility entered into in June 2004......... 670 —
Amortization for the 52 weeks ended January 29, 2005 .............. (432) —
Balance at January 29, 2005 .................................. 566 —
Addition for the acquisition of Electronics Boutique, including senior
notes payable and senior floating rate notes payable issued and
revolving credit facility entered into in October 2005 .............. 19,617 20,731
Write-off of deferred financing fees remaining on June 2004 revolving
credit facility ............................................ (393) —
Amortization for the 52 weeks ended January 28, 2006 .............. (1,229) (251)
Balance at January 28, 2006 .................................. $18,561 $20,480
The gross carrying value and accumulated amortization of deferred financing fees as of January 28, 2006 was
$19,617 and $1,056, respectively. The estimated aggregate amortization expenses for deferred financing fees and
other intangible assets for the next five fiscal years are approximately:
Year Ended
Amortization
of Deferred
Financing Fees
Amortization of
Intangible
Assets
(In thousands)
January 2006 .......................................... $ 3,216 $ 5,150
January 2007 .......................................... 3,216 4,444
January 2008 .......................................... 3,216 3,582
January 2009 .......................................... 3,216 2,689
January 2010 .......................................... 2,986 1,796
$15,850 $17,661
8. Debt
In October 2005, in connection with the merger, the Company entered into a five-year, $400,000 Credit
Agreement (the “Revolver”), including a $50,000 letter of credit sub-limit, secured by the assets of the Company.
The Revolver places certain restrictions on the Company and the borrower subsidiaries, including limitations on
asset sales, additional liens, and the incurrence of additional indebtedness.
The availability under the Revolver is limited to a borrowing base which allows the Company to borrow up to
the lesser of (x) approximately 70% of eligible inventory and (y) 90% of the appraisal value of the inventory, in each
case plus 85% of eligible credit card receivables, net of certain reserves. Letters of credit reduce the amount
available to borrow by their face value. The Company’s ability to pay cash dividends, redeem options, and
repurchase shares is generally prohibited, except that if availability under the Revolver is or will be after any such
payment equal to or greater than 25% of the borrowing base the Company may repurchase its capital stock and pay
cash dividends. In addition, in the event that credit extensions under the Revolver at any time exceed 80% of the
lesser of the total commitment or the borrowing base, the Company will be subject to a fixed charge coverage ratio
covenant of 1.5:1.0.
84
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)