GameStop 2007 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
52 Weeks
Ended
February 2,
2008
53 Weeks
Ended
February 3,
2007
52 Weeks
Ended
January 28,
2006
Gross Profit:
New video game hardware ................. $ 108.2 6.5% $ 77.0 7.2% $ 30.9 6.1%
New video game software .................. 581.7 20.8% 427.3 21.2% 266.5 21.4%
Used video game products ................. 772.2 48.7% 651.9 49.5% 383.0 47.4%
Other ................................. 351.6 33.9% 315.2 34.4% 191.6 35.8%
Total ................................ $1,813.7 25.6% $1,471.4 27.7% $872.0 28.2%
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 12 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
intercompany royalty fees, net interest expense and income taxes. Transactions between reportable segments
consist primarily of royalties, management fees, 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 2, 2008
United
States Canada Australia Europe Other Consolidated
Sales............................. $5,438.8 $473.0 $420.8 $761.4 $ — $7,094.0
Depreciation and amortization .......... 100.0 7.9 8.3 14.1 — 130.3
Operating earnings .................. 391.2 35.8 41.8 32.6 — 501.4
Interest income ..................... (21.9) (2.0) (3.2) (12.6) 25.9 (13.8)
Interest expense..................... 61.0 — 0.3 26.2 (25.9) 61.6
Earnings before income tax expense...... 364.9 26.9 35.0 14.3 — 441.1
Income tax expense .................. 129.7 9.6 10.4 3.1 — 152.8
Goodwill.......................... 1,096.6 116.8 147.2 41.8 — 1,402.4
Other long-lived assets ............... 377.5 35.8 34.6 130.8 — 578.7
Total assets ........................ 2,742.0 274.7 251.1 508.1 — 3,775.9
F-32
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)