GameStop 2007 Annual Report Download

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2007 annual report
annual report
2007

Table of contents

  • Page 1
    annual report 2007

  • Page 2
    ... $1.00 $0.81 $1.75 800 STORE COUNT GAMESTOP INTERNATIONAL STORE GROWTH $0.53 $0.53 $0.50 $2003 2004 2005 2006 2007 177 2006 AUSTRALIA/ NZ 219 2007 EUROPE BEST INVESTMENTS AS REPORTED BY FORTUNE MAGAZINE*** 2007 STOCK APPRECIATION RANK 1 2 3 4 5 6 7 8 9 10 COMPANY MOSAIC AK STEEL HOLDING...

  • Page 3
    ... and guides what we do at every level, strengthening the GameStop brand experience for our customers and growing value for all of our stakeholders. bettyshock "There's something to be said when you go into the back of the store and see drawings and hand-written signs that say "Power to the Players...

  • Page 4

  • Page 5
    ... opportunities to accelerate our growth in this rapidly growing industry. As a result, GameStop had one of our best years ever! Our overall financial performance, comparable store growth, and worldwide expansion have solidified GameStop as the world's largest video game and entertainment retailer...

  • Page 6
    ...the merger with EB Games in October of 2005, we anticipate having only $450 million outstanding by the end of this year. • Recognized Performance. In April 2007, we were recognized as the 426th largest publicly traded company in America by Fortune magazine and then in December, GameStop was added...

  • Page 7
    ... base is growing everywhere we do business. An Increased Emphasis on Value. The benefits to the GameStop customer of being able to trade used product for new essentially creates a currency that makes new games a great buy. There is no question that our value proposition will play particularly well...

  • Page 8
    ...expanding number of software and accessory options. It is not just the Xbox 360, but the pro or elite unit? The PS3 - the 40 gig or 80 gig model? The Wii - do you need the remote, the Nunchuck, the Zapper? Which portable should I buy, the Nintendo DS or the Sony PSP? Even after 8 years in the market...

  • Page 9

  • Page 10

  • Page 11
    ... games. Conducted in partnership with the Entertainment Software Ratings Board (ESRB), "Respect the Ratings" draws upon online and in-store channels to communicate ratings information every adult should know. A key component of the campaign is a useful "Parents Center" at www.RespectTheRatings.com...

  • Page 12
    ... STORE COUNT Australia, 250 New Zealand, 30 "My daughter's friends think I have the coolest job in the world..." jimkirk j W Who I am: Managing Director for GameStop's European operations (Memmingen, Germany) What I've learned from GameStop: My college-age daughter wasn't excited about gaming...

  • Page 13
    ...-old boys. They are W professional, adult males with successful careers, families with children, nice homes, great cars, designer clothing and the p latest electronics. They see movies and listen to music. They have a rich, full lifestyle that happens to include video games. And l thanks to the Wii...

  • Page 14

  • Page 15
    ... of the registrant was approximately $6,288,000,000, based upon the closing market prices of $39.55 per share of Class A Common Stock on the New York Stock Exchange as of August 3, 2007. Number of shares of $.001 par value Class A Common Stock outstanding as of March 24, 2008: 161,708,708 DOCUMENTS...

  • Page 16
    ..., Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...Certain Relationships and Related Transactions, and Director Independence ...Principal Accountant Fees and Services ... 21...

  • Page 17
    ... as PC entertainment software, and related accessories and other merchandise. As of February 2, 2008, we operated 5,264 stores in the United States, Australia, Canada and Europe, primarily under the names GameStop and EB Games. We also operate the electronic commerce websites www.gamestop.com and...

  • Page 18
    ... various market research firms, management estimates that the combined market for video game products and PC entertainment software exceeded $36 billion in 2007 in the countries in which we operate. According to NPD Group, Inc., a market research firm ("the NPD Group"), the electronic game industry...

  • Page 19
    ... and PC entertainment software totaled approximately $15.6 billion in Europe in 2007. The NPD Group has reported that video game retail sales in Canada were approximately $1.5 billion in 2007. According to the independent market research group GfK, the Australian market for video game products was...

  • Page 20
    ...-oriented customer who wants a wide selection of value-priced used video game products. Our stores offer the opportunity to trade in used video game products in exchange for store credits applicable to future purchases, which, in turn, drives more sales. Enhancing our Image as a Destination Location...

  • Page 21
    ... GameStop loyalty card, which is obtained as a bonus with a paid subscription to our Game Informer magazine, offers customers discounts on selected merchandise in our stores. Our websites allow our customers to buy games on-line and to learn about the latest video game products and PC entertainment...

  • Page 22
    ... electronic commerce websites www.gamestop.com and www.ebgames.com and Game Informer magazine. Segment results for Canada include retail operations in stores throughout Canada and segment results for Australia include retail operations in Australia and New Zealand. Segment results for Europe include...

  • Page 23
    ...which average approximately 1,500 square feet, carry a balanced mix of new and used video game products and PC entertainment software. Our stores are generally located in high-traffic "power strip centers," local neighborhood strip centers, high-traffic shopping malls and pedestrian areas, primarily...

  • Page 24
    ... within malls and strip centers. Locations. The table below sets forth the number of our stores located in the U.S., Canada, Europe and Australia as of February 2, 2008: United States Number of Stores Alabama ...Alaska ...Arizona ...Arkansas ...California ...Colorado ...Connecticut ...Delaware...

  • Page 25
    ......South Dakota ...Tennessee ...Texas ...Utah ...Vermont ...Virginia ...Washington...West Virginia ...Wisconsin ...Wyoming ... ... 8 175 46 30 199 45 14 62 4 81 355 28 7 130 74 25 47 7 4,061 Number of Stores Sub-total for United States...International Canada ...Australia...New Zealand ...Sub-total...

  • Page 26
    ... where the majority of subscriptions and sales are generated. E-Commerce We operate electronic commerce websites at www.gamestop.com and www.ebgames.com that allow our customers to buy video game products and other merchandise on-line. The sites also offer customers information and content about...

  • Page 27
    ... environment via a secure, virtual private network. Regional communication links exist to each of our distribution centers and offices in international locations with connectivity to our U.S. data center as required by our international, distributed applications. Our in-store point-of-sale system...

  • Page 28
    ...PC software specialty stores located in malls and other locations; toy retail chains; mail-order businesses; catalogs; direct sales by software publishers; and online retailers and game rental companies. In addition, video games are available for sale and rental from many video stores, such as Movie...

  • Page 29
    ... information about issuers, like GameStop, who file electronically with the SEC. The address of that site is http://www.sec.gov. In addition to copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, the Company's Code...

  • Page 30
    ... in malls and other locations, such as Game Group and Media Markt; toy retail chains; mail-order businesses; catalogs; direct sales by software publishers; and online retailers and game rental companies. In addition, video games are available for sale and rental from many video stores, such as Movie...

  • Page 31
    ... locate alternative sites or find additional sites for new store expansion. The ability to download video games and play video games on the Internet could lower our sales. While it is currently only possible to download a limited amount of video game content to the next generation video game systems...

  • Page 32
    ...new stores into our existing operations; and • the ability to increase sales at new store locations. Our growth will also depend on our ability to process increased merchandise volume resulting from new store openings through our inventory management systems and distribution facilities in a timely...

  • Page 33
    ... results of operations. In order to comply with the New York Stock Exchange listing standards and rules adopted by the SEC or other regulatory bodies, we may be required to increase our expenditures and hire additional personnel and additional outside legal, accounting and advisory services, all of...

  • Page 34
    ... upon software publishers to develop popular game and entertainment titles for video game systems and PCs. If our financial condition or operating results materially deteriorate, our relations with our creditors, including holders of our senior notes, the lenders under our senior credit facility...

  • Page 35
    ... Company owns a 510,000 square foot facility in Grapevine, Texas, which houses our corporate headquarters and certain of our distribution operations. In May 2006, we purchased an additional 65,000 square foot building at the Grapevine, Texas location which is currently being used in our refurbishing...

  • Page 36
    ...submitted to a vote of security holders during the 13 weeks ended February 2, 2008. PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Price Range of Common Stock The Company's Class A common stock is traded on the NYSE under...

  • Page 37
    ...33.90 The high and low sales prices of the Class B shares do not include the effects of the February 7, 2007 conversion of all outstanding Class B common shares into Class A common shares on a one-for-one basis (the "Conversion") or the Stock Split. Approximate Number of Holders of Common Equity As...

  • Page 38
    ... Authorized for Issuance under Equity Compensation Plans Information for our equity compensation plans in effect as of February 2, 2008 is as follows: Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance...

  • Page 39
    ... Operating Data: Number of stores by segment United States...4,061 3,799 3,624 1,801 1,498 Canada ...287 267 261 - - Australia ...280 219 177 - - Europe ...636 493 428 25 16 Total ...5,264 4,778 4,490 1,826 1,514 Comparable store sales increase (decrease)(6) ...24.7% 11.9% (1.4)% 1.7% 0.8% Inventory...

  • Page 40
    ... entertainment software and related accessories and other merchandise. As of February 2, 2008, we operated 5,264 stores, in the United States, Australia, Canada and Europe, primarily under the names GameStop and EB Games. We also operate electronic commerce websites under the names www.gamestop.com...

  • Page 41
    ... on the closing price of $10.81 of Historical GameStop's common stock on April 15, 2005, the last trading day before the date the mergers were announced). In addition, approximately $993.3 million in cash was paid in consideration for (i) all outstanding common stock of EB, based upon the pro-ration...

  • Page 42
    ... its current cost is added to the existing cost of product on-hand and this amount is re-averaged over the cumulative units. Used video game products traded in by customers are recorded as inventory at the amount of the store credit given to the customer. In valuing inventory, management is required...

  • Page 43
    ... 142"). Subsequent to the mergers, the Company determined that it has four reporting units, the United States, Australia, Canada and Europe, based upon the similar economic characteristics of operations and separate management within those regions. The Company employed the services of an independent...

  • Page 44
    ... countries, our global tax rate is derived from a combination of applicable tax rates in the various jurisdictions in which we operate. We base our estimate of an annual effective tax rate at any given point in time on a calculated mix of the tax rates applicable to our company and to estimates...

  • Page 45
    ... provisions to all of its income tax positions at the required effective date of February 4, 2007, resulting in a $16.7 million cumulative effect decrease to retained earnings and a $7.9 million increase in prepaid taxes. For additional information related to the Company's adoption of FIN 48, see...

  • Page 46
    ... related software and accessories, including several strong video game titles, such as Halo 3 and Guitar Hero III. Stores are included in our comparable store sales base beginning in the thirteenth month of operation. The comparable store sales increase of 24.7% was calculated by using the 52 weeks...

  • Page 47
    ... strong sales of new video game hardware and software. Sales of other product categories, including PC entertainment and other software and accessories, magazines and trading cards, grew 13.2%, or $121.0 million, from fiscal 2006 to fiscal 2007, primarily due to the increase in store count and the...

  • Page 48
    ...game product sales also grew due to the mergers, the 53rd week of sales in fiscal 2006 and the increase in store count, with an increase in sales of $508.0 million, or 62.9%, from fiscal 2005. Sales of other product categories, including PC entertainment and other software and accessories, magazines...

  • Page 49
    .... Segment Information The Company operates its business in the following segments: United States, Canada, Australia and Europe. We identified these segments based on a combination of geographic areas, the methods with which we analyze performance and the division of management responsibility. Each...

  • Page 50
    ... States include retail operations in 50 states, the District of Columbia, Puerto Rico and Guam, the electronic commerce websites www.gamestop.com and www.ebgames.com and Game Informer magazine. As of February 2, 2008, the United States segment included 4,061 GameStop stores, compared to 3,799 stores...

  • Page 51
    ... units, including the Nintendo Wii and the Sony PlayStation 3 and their related software and accessories, as well as Microsoft's Xbox 360 hardware, software and accessories, particularly new software sales of Halo 3 and Guitar Hero III released in fiscal 2007. Segment operating income for the 52...

  • Page 52
    ... expenditures were primarily used to open 586 stores in the United States and internationally and to invest in information systems, which were offset by $1.1 million of cash received related to the finalization of the purchase price of Game Brands Inc. which was acquired during the fourth quarter...

  • Page 53
    ... headquarters and distribution center facility in Grapevine, Texas. The remaining $101.0 million in capital expenditures was used to open new stores, remodel existing stores and invest in information and distribution systems in support of the integration of the operations of EB and GameStop. Cash...

  • Page 54
    ... the United States in reliance upon Regulation S under the Securities Act. In April 2006, the Company filed a registration statement on Form S-4 in order to register new notes (the "New Notes") with the same terms and conditions as the Notes in order to facilitate an exchange of the New Notes for...

  • Page 55
    ... of the deferred financing fees and the original issue discount on the Notes. On February 9, 2007, the Company announced that its Board of Directors authorized the buyback of up to an aggregate of an additional $150 million of its Senior Notes and Senior Floating Rate Notes. The timing and amount of...

  • Page 56
    .... In addition to minimum rentals, the operating leases generally require the Company to pay all insurance, taxes and other maintenance costs and may provide for percentage rentals. Percentage rentals are based on sales performance in excess of specified minimums at various stores. Leases with step...

  • Page 57
    ...www.gamestop.com became the exclusive specialty video game retailer listed on www.bn.com, Barnes & Noble's e-commerce site. Under the terms of this agreement, the Company pays a fee to Barnes & Noble for sales of video game or PC entertainment products sold through www.bn.com. The fee paid to Barnes...

  • Page 58
    ... 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...

  • Page 59
    ... 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 financial reporting, as such term is defined in Exchange Act Rules...

  • Page 60
    ... of the Code of Ethics on the Company's website (www.gamestop.com) within five business days following such amendment or waiver. Item 11. Item 12. Item 13. Item 14. Executive Compensation* Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters* Certain...

  • Page 61
    ... sales returns and allowances as amounts are considered to be immaterial. All other schedules are omitted because they are not applicable. (b) Exhibits The following exhibits are filed as part of this Form 10-K: Exhibit Number Description 2.1 3.1 3.2 4.1 4.2 4.3 Agreement and Plan of Merger...

  • Page 62
    ... Plan.(9) Amended and Restated Supplemental Compensation Plan.(10) Form of Option Agreement.(11) Form of Restricted Share Agreement.(12) Stock Purchase Agreement, dated as of October 1, 2004, by and among GameStop Holdings Corp. (f/k/a GameStop Corp.), B&N GameStop Holding Corp. and Barnes & Noble...

  • Page 63
    ... Employment Agreement, dated as of April 3, 2006, between GameStop Corp. and David W. Carlson.(18) Computation of Ratio of Earnings to Fixed Charges. Code of Ethics for Senior Financial Officers.(19) Subsidiaries. Consent of BDO Seidman, LLP. Certification of Chief Executive Officer pursuant to Rule...

  • Page 64
    .... (15) Incorporated by reference to the Registrant's Form 8-K filed with the Securities and Exchange Commission on April 26, 2007. (16) Incorporated by reference to GameStop Holdings Corp.'s Form 8-K filed with the Securities and Exchange Commission on April 15, 2005. (17) Incorporated by reference...

  • Page 65
    ... duly authorized. GAMESTOP CORP. By: /s/ R. RICHARD FONTAINE R. Richard Fontaine Chairman of the Board and Chief Executive Officer Date: April 2, 2008 Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on behalf of...

  • Page 66
    Name Capacity Date /s/ GERALD R. SZCZEPANSKI Gerald R. Szczepanski /s/ EDWARD A. VOLKWEIN Edward A. Volkwein LAWRENCE S. ZILAVY Lawrence S. Zilavy Director April 2, 2008 Director April 2, 2008 /s/ Director April 2, 2008 51

  • Page 67
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  • Page 68
    ... FINANCIAL STATEMENTS Page GameStop Corp. Consolidated Financial Statements: Reports of Independent Registered Public Accounting Firm ...Consolidated Financial Statements: Balance Sheets ...Statements of Operations ...Statements of Stockholders' Equity ...Statements of Cash Flows ...Notes to...

  • Page 69
    ... Public Accounting Firm Board of Directors and Stockholders GameStop Corp. Grapevine, Texas We have audited the accompanying consolidated balance sheets of GameStop Corp. as of February 2, 2008 and February 3, 2007 and the related consolidated statements of operations, stockholders' equity, and cash...

  • Page 70
    ...standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of GameStop Corp. as of February 2, 2008 and February 3, 2007, and the related consolidated statements of operations, stockholders' equity, and cash flows for the 52 week period ended February...

  • Page 71
    ...' EQUITY Current liabilities: Accounts payable ...$ 844,376 Accrued liabilities ...409,878 Note payable, current portion ...- Taxes payable ...6,303 Total current liabilities ...1,260,557 Senior notes payable, long-term portion, net ...574,473 Senior floating rate notes payable, long-term...

  • Page 72
    ... 52 Weeks Ended Ended Ended January 28, February 3, February 2, 2006 2007 2008 (In thousands, except per share data) Sales ...$7,093,962 Cost of sales ...5,280,255 Gross profit ...Selling, general and administrative expenses ...Depreciation and amortization ...Merger-related expenses ...Operating...

  • Page 73
    ... for the 52 weeks ended January 28, 2006 ...Foreign currency translation ...Total comprehensive income ...Elimination of treasury stock ...Issuance of stock to Electronics Boutique stockholders ...Stock-based compensation ...Exercise of employee stock options (including tax benefit of $12,308...

  • Page 74
    ...of cash acquired ...Sale of assets held for sale ...Net cash flows used in investing activities ...Cash flows from financing activities: Issuance of senior notes payable relating to Electronics Boutique merger, net of discount ...Issuance of senior floating rate notes payable relating to Electronics...

  • Page 75
    ... the world's largest retailer of new and used video game systems and software and personal computer entertainment software and related accessories primarily through its GameStop and EB Games trade names, websites (www.gamestop.com and www.ebgames.com) and Game Informer magazine. The Company's stores...

  • Page 76
    ... its current cost is added to the existing cost of product on-hand and this amount is re-averaged over the cumulative units. Used video game products traded in by customers are recorded as inventory at the amount of the store credit given to the customer. In valuing inventory, management is required...

  • Page 77
    ... Revenue from the sales of the Company's products is recognized at the time of sale. The sales of used video game products are recorded at the retail price charged to the customer. Sales returns (which are not significant) are recognized at the time returns are made. Subscription and advertising...

  • Page 78
    ... the 52 weeks ended January 28, 2006 were $26,243, $16,043 and $12,448, respectively. During fiscal 2007, the Company launched a new marketing campaign for television, radio and print to promote the GameStop brand and its brand tagline, "Power to the Players." Income Taxes The Company accounts for...

  • Page 79
    ..., Electronics Boutique routinely used forward exchange contracts and cross-currency swaps to manage currency risk and had a number of open positions designated as hedge transactions as of the merger date. The Company discontinued hedge accounting treatment for all derivative instruments acquired in...

  • Page 80
    ... prospective method, such benefits are presented as a use of cash in the operating section and a source of cash in the financing section of the Statement of Cash Flows. Note 13 provides additional information regarding the Company's stock option plan. The following table illustrates the effect on...

  • Page 81
    ...to the timing of the mergers, were Sony, Microsoft and Electronic Arts, Inc. which accounted for 18%, 13% and 11%, respectively, of the Company's new product purchases. Reclassifications Certain reclassifications have been made to conform the prior period data to the current year presentation. Stock...

  • Page 82
    ... at the close of business on February 20, 2007, paid on March 16, 2007 (the "Stock Split"). The effect of the Conversion and the Stock Split has been retroactively applied to all periods presented in the consolidated financial statements and notes thereto. New Accounting Pronouncements In March...

  • Page 83
    ... (based on the closing price of $10.81 per share of Historical GameStop's Class A common stock on April 15, 2005, the last trading day before the date the merger was announced). In addition, approximately $993,254 in cash was paid in consideration for (i) all outstanding common stock of EB, and (ii...

  • Page 84
    ... vendor marketing programs generally cover a period from a few days up to a few weeks and include items such as product catalog advertising, in-store display promotions, Internet advertising, co-op print advertising, product training and promotion at the Company's annual store managers conference...

  • Page 85
    ... receivables include receivables from Game Informer magazine advertising customers, receivables from landlords for tenant allowances and receivables from vendors for merchandise returns, vendor marketing allowances and various other programs. An allowance for doubtful accounts has been recorded to...

  • Page 86
    ...Company's business segments for the 53 weeks ended February 3, 2007 and the 52 weeks ended February 2, 2008 were as follows: United States Canada Australia (In thousands) Europe Total Balance at January 28, 2006 ...Additional cost relating to the acquisition of Electronics Boutique ...Cost relating...

  • Page 87
    ... 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...

  • Page 88
    ... the United States in reliance upon Regulation S under the Securities Act. In April 2006, the Company filed a registration statement on Form S-4 in order to register new notes (the "New Notes") with the same terms and conditions as the Notes in order to facilitate an exchange of the New Notes for...

  • Page 89
    ...-off of the deferred financing fees and the original issue discount on the Notes. On February 9, 2007, the Company announced that its Board of Directors authorized the buyback of up to an aggregate of an additional $150,000 of its Senior Notes and Senior Floating Rate Notes. The timing and amount of...

  • Page 90
    ... 2034 with various renewal options for additional periods. The agreements, which have been classified as operating leases, generally provide for minimum and, in some cases, percentage rentals and require the Company to pay all insurance, taxes and other maintenance costs. Leases with step rent...

  • Page 91
    ...entered their appearance for plaintiffs and a new scheduling order is expected to be entered by the Court, which we believe will set a new Frye hearing date, a new close of discovery date and a new trial date. The Company does not believe there is sufficient information to estimate the amount of the...

  • Page 92
    ... acquired will not have a material effect on the Company's financial statements. 12. Income Taxes The provision for income tax consisted of the following: 52 Weeks Ended February 2, 2008 53 Weeks Ended February 3, 2007 (In thousands) 52 Weeks Ended January 28, 2006 Current tax expense (benefit...

  • Page 93
    ...37.0% The Company's effective tax rate decreased from 37.8% in the 53 weeks ended February 3, 2007 to 34.6% in the 52 weeks ended February 2, 2008 primarily due to the release of valuation allowances on foreign net operating losses and the recognition of foreign tax credits not previously benefited...

  • Page 94
    ... the effective tax rate was $20,552. A reconciliation of the changes in the gross balances of unrecognized tax benefits during fiscal 2007 follows: February 2, 2008 (In thousands) Beginning balance of unrecognized tax benefits ...Increases related to current period tax positions...Decreases related...

  • Page 95
    ...) 13. Stock Incentive Plan Effective June 2007, the Company's stockholders voted to amend the Amended and Restated 2001 Incentive Plan of Historical GameStop (the "Incentive Plan") to provide for issuance under the Incentive Plan of the Company's Class A common stock. The Incentive Plan provides...

  • Page 96
    ... price of $49.95 per share were granted under the Incentive Plan. The options vest in equal installments over three years and expire in February 2018. Restricted Stock Awards The Company grants restricted stock awards to certain of its employees, officers and non-employee directors. Restricted stock...

  • Page 97
    ... 53 weeks ended February 3, 2007 and the 52 weeks ended January 28, 2006, were $2,235, $1,992 and $1,333, respectively. 15. Certain Relationships and Related Transactions The Company operates departments within nine bookstores operated by Barnes & Noble, a stockholder of Historical GameStop until...

  • Page 98
    ... www.gamestop.com is the exclusive specialty video game retailer listed on www.bn.com, Barnes & Noble's e-commerce site. Under the terms of this agreement, the Company pays a fee to Barnes & Noble for sales of video game or PC entertainment products sold through www.bn.com. For the 52 weeks ended...

  • Page 99
    ... 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...

  • Page 100
    ... into Class A common shares on a one-for-one basis. In addition, on February 9, 2007, the Board of Directors of the Company authorized a two-for-one stock split, effected by a one-for-one stock dividend to stockholders of record at the close of business on February 20, 2007, paid on March 16...

  • Page 101
    ...'s then current exercise price, a number of the acquiring company's common shares having a market value at that time of twice the exercise price of the Right. Furthermore, at any time after a person or group acquires 15% or more of the voting power of the outstanding common stock of the Company but...

  • Page 102
    ... present the financial position as of February 2, 2008 and February 3, 2007 and results of operations and cash flows for the fiscal years ended February 2, 2008, February 3, 2007 and January 28, 2006 of the Company's guarantor and non-guarantor subsidiaries. GAMESTOP CORP. CONSOLIDATING BALANCE...

  • Page 103
    ... Consolidated February 3, 2007 (Amounts in thousands, except per share amounts) ASSETS: Current assets: Cash and cash equivalents ...Receivables, net ...Merchandise inventories, net ...Prepaid expenses and other current assets Prepaid taxes ...Deferred taxes ...Total current assets ...Property...

  • Page 104
    ...) For the 53 Weeks Ended February 3, 2007 Consolidated February 3, 2007 Sales ...$4,269,484 Cost of sales ...3,063,450 Gross profit ...Selling, general and administrative expenses ...Depreciation and amortization ...Merger-related expenses ...Operating earnings ...Interest income ...Interest...

  • Page 105
    ... of sales ...1,927,765 Gross profit ...Selling, general and administrative expenses ...Depreciation and amortization ...Merger-related expenses ...Operating earnings ...Interest income ...Interest expense ...Merger-related interest expense ...Earnings before income tax expense ...Income tax expense...

  • Page 106
    ...stock from Barnes & Noble ...Issuance of shares relating to stock options ...Excess tax benefits realized from exercise of stock-based awards ...Net increase in other noncurrent assets and deferred financing fees ...Net cash flows used in financing activities ...Exchange rate effect on cash and cash...

  • Page 107
    ...Barnes & Noble ...Repayment of other debt ...Issuance of shares relating to stock options ...Excess tax benefits realized from exercise of stock-based awards . . Net increase in other noncurrent assets and deferred financing fees ...Net cash flows used in financing activities ...Exchange rate effect...

  • Page 108
    ... of cash acquired ...Net cash flows provided by (used in) investing activities ...Cash flows from financing activities: Issuance of senior notes payable relating to Electronics Boutique merger, net of discount ...Issuance of senior floating rate notes payable relating to Electronics Boutique merger...

  • Page 109
    ...in Norway and also operates office and warehouse facilities in Oslo, Norway. During fiscal 2008, the Company intends to convert these stores into video game stores with an inventory assortment similar to its other stores in Norway. The Company will include the results of operations of FRS, which are...

  • Page 110
    ... Plan.(9) Amended and Restated Supplemental Compensation Plan.(10) Form of Option Agreement.(11) Form of Restricted Share Agreement.(12) Stock Purchase Agreement, dated as of October 1, 2004, by and among GameStop Holdings Corp. (f/k/a GameStop Corp.), B&N GameStop Holding Corp. and Barnes & Noble...

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    ... Employment Agreement, dated as of April 3, 2006, between GameStop Corp. and David W. Carlson.(18) Computation of Ratio of Earnings to Fixed Charges. Code of Ethics for Senior Financial Officers.(19) Subsidiaries. Consent of BDO Seidman, LLP. Certification of Chief Executive Officer pursuant to Rule...

  • Page 112
    .... (15) Incorporated by reference to the Registrant's Form 8-K filed with the Securities and Exchange Commission on April 26, 2007. (16) Incorporated by reference to GameStop Holdings Corp.'s Form 8-K filed with the Securities and Exchange Commission on April 15, 2005. (17) Incorporated by reference...

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    ...fiscal 2007 has been filed pursuant to NYSE Section 303A 12(c). GameStop, EB Games, Electronics Boutique, Game Informer Magazine and Respect the Ratings are trademarks of GameStop, Inc. Products named in these pages are trade names or trademarks of their respective companies. "Power to the Players...

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