GameStop 2006 Annual Report Download - page 99

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The following table sets forth gross profit (in millions) and gross profit percentages by significant product
category for the periods indicated:
Gross
Profit
Gross
Profit
Percent
Gross
Profit
Gross
Profit
Percent
Gross
Profit
Gross
Profit
Percent
53 Weeks
Ended
February 3,
2007
52 Weeks
Ended
January 28,
2006
52 Weeks
Ended
January 29,
2005
Gross Profit:
New video game hardware.......... $ 77.0 7.2% $ 30.9 6.1% $ 8.5 4.1%
New video game software .......... 427.3 21.2% 266.5 21.4% 151.9 19.6%
Used video game products .......... 651.9 49.5% 383.0 47.4% 231.6 45.3%
Other ......................... 315.2 34.4% 191.6 35.8% 117.3 34.0%
Total ........................ $1,471.4 27.7% $872.0 28.2% $509.3 27.6%
17. Segment Information
Following the completion of the mergers, the Company now operates its business in the following segments:
United States, Canada, Australia and Europe. The Company identifies segments based on a combination of geographic
areas and management responsibility. Each of the segments includes significant retail operations with all stores
engaged in the sale of new and used video game systems and software and personal computer entertainment software
and related accessories. Segment results for the United States include retail operations in 50 states, the District of
Columbia, Guam and Puerto Rico, the electronic commerce websites www.gamestop.com and www.ebgames.com
and Game Informer magazine. Segment results for Canada include retail operations in Canada and segment results for
Australia include retail operations in Australia and New Zealand. Segment results for Europe include retail operations
in 11 European countries. Prior to the merger, Historical GameStop had operations in Ireland and the United Kingdom
which were not material. The Company measures segment profit using operating earnings, which is defined as income
from continuing operations before net interest expense and income taxes. Transactions between reportable segments
consist primarily of intersegment loans and related interest.
Information on segments and the reconciliation to earnings before income taxes are as follows (in millions):
Fiscal Year Ended February 3, 2007
United
States Canada Australia Europe Other Consolidated
Sales .......................... $4,269.5 $319.7 $288.1 $441.6 $ — $5,318.9
Depreciation and amortization . . ..... 85.3 6.6 6.3 11.7 — 109.9
Operating earnings ................ 285.4 20.0 27.3 1.0 — 333.7
Interest income .................. (16.8) (0.8) (1.5) (8.5) 16.3 (11.3)
Interest expense .................. 84.3 — 0.1 16.6 (16.3) 84.7
Earnings (loss) before income tax
expense ...................... 211.8 20.9 28.7 (7.1) — 254.3
Income tax expense ............... 78.6 7.4 8.8 1.2 — 96.0
Goodwill ....................... 1,098.1 116.8 147.2 41.8 — 1,403.9
Other long-lived assets ............. 343.2 32.5 25.4 104.2 — 505.3
Total assets ..................... 2,618.9 210.4 210.7 309.6 — 3,349.6
F-31
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)