GameStop 2008 Annual Report Download - page 56

things, failure to pay interest or principal on the Notes, other breaches of covenants in the Indenture, and certain
events of bankruptcy and insolvency. As of January 31, 2009, the Company was in compliance with all covenants
associated with the Revolver and the Indenture.
Under certain conditions, the Issuers may on any one or more occasions prior to maturity redeem up to 100% of
the aggregate principal amount of Senior Notes issued under the Indenture at redemption prices at or in excess of
100% of the principal amount thereof plus accrued and unpaid interest, if any, to the redemption date. The
circumstances which would limit the percentage of the Notes which may be redeemed or which would require the
Company to pay a premium in excess of 100% of the principal amount are defined in the Indenture. Upon a Change
of Control (as defined in the Indenture), the Issuers are required to offer to purchase all of the Notes then outstanding
at 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase. The Issuers
may acquire Senior Notes by means other than redemption, whether by tender offer, open market purchases,
negotiated transactions or otherwise, in accordance with applicable securities laws, so long as such acquisitions do
not otherwise violate the terms of the Indenture.
Uses of Capital
Our future capital requirements will depend on the number of new stores we open and the timing of those
openings within a given fiscal year. We opened 674 stores in fiscal 2008 and purchased 328 stores through our
acquisition of Micromania. We expect to open approximately 400 stores in fiscal 2009. Capital expenditures for
fiscal 2009 are projected to be approximately $170 million, to be used primarily to fund new store openings and
invest in distribution and information systems in support of operations.
In May 2006, the Company announced that its Board of Directors authorized the buyback of up to an aggregate
of $100 million of its Senior Floating Rate Notes and Senior Notes. As of February 3, 2007, the Company had
repurchased the maximum authorized amount, having acquired $50 million of its Senior Notes and $50 million of
its Senior Floating Rate Notes, and delivered the Notes to the Trustee for cancellation. The associated loss on the
retirement of this debt was $6.1 million for the 53 week period ended February 3, 2007, which consists of the
premium paid to retire the Notes and the recognition 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. As of August 4, 2007,
the Company had repurchased the maximum authorized amount, having acquired $20 million of its Senior Notes
and $130 million of its Senior Floating Rate Notes, and delivered the Notes to the Trustee for cancellation. The
associated loss on the retirement of this debt was $8.8 million for the 52 week period ended February 2, 2008, which
consists of the premium paid to retire the Notes and the recognition of the deferred financing fees and the original
issue discount on the Notes.
On June 28, 2007, the Company announced that its Board of Directors authorized the redemption of the
remaining $120 million of Senior Floating Rate Notes outstanding. The Company redeemed the Senior Floating
Rate Notes on October 1, 2007 at the redemption price specified by the Senior Floating Rate Notes of 102.00%, plus
all accrued and unpaid interest through the redemption date. The Company incurred a one-time pre-tax charge of
$3.8 million associated with the redemption, which represents a $2.4 million redemption premium and $1.4 million
to recognize unamortized deferred financing costs for the 52 week period ended February 2, 2008.
On February 7, 2008, the Company announced that its Board of Directors authorized the buyback of up to an
aggregate of an additional $130 million of its Senior Notes. The timing and amount of the repurchases will be
determined by the Company’s management based on their evaluation of market conditions and other factors. In
addition, the repurchases may be suspended or discontinued at any time. As of January 31, 2009, the Company had
repurchased $30 million of its Senior Notes pursuant to this new authorization and delivered the Senior Notes to the
Trustee for cancellation. The associated loss on retirement of debt is $2.3 million, which consists of the premium
paid to retire the Senior Notes and the write-off of the deferred financing fees and the original issue discount on the
Senior Notes for the 52 week period ended January 31, 2009.
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