GameStop 2008 Annual Report Download - page 83

Download and view the complete annual report

Please find page 83 of the 2008 GameStop annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R)
is effective for the Company on February 1, 2009, and the Company will apply prospectively SFAS 141(R) to all
business combinations subsequent to the effective date.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling
Interests in Consolidated Financial Statements — an amendment of Accounting Research Bulletin No. 51
(“SFAS 160”). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. SFAS 160 also establishes disclosure requirements that
clearly identify and distinguish between the controlling and noncontrolling interests and requires the separate
disclosure of income attributable to controlling and noncontrolling interests. SFAS 160 became effective for the
Company on February 1, 2009. The Company is currently evaluating the impact that the adoption of SFAS 160 will
have on its consolidated financial statements.
2. Acquisitions
On November 17, 2008, GameStop France SAS, a wholly-owned subsidiary of the Company, completed the
acquisition of substantially all of the outstanding capital stock of Micromania for $580,407, net of cash acquired.
Micromania is a leading retailer of video and computer games in France with 332 locations, 328 of which were
operating upon acquisition. The Company funded the transaction with cash on hand, funds drawn against its
existing $400,000 credit agreement (the “Revolver”) totaling $275,000, and term loans totaling $150,000 under a
junior term loan facility (the “Term Loans”). As of January 31, 2009, all of the borrowings against the Revolver and
the Term Loans have been repaid. The purpose of the acquisition was to expand the Company’s presence in Europe.
The impact of the acquisition on the Company’s results of operations, as if the acquisition had been completed as of
the beginning of the periods presented, is not significant.
The consolidated financial statements include the results of Micromania from the date of acquisition and are
reported in the European segment. The purchase price has been allocated based on estimated fair values as of the
acquisition date. The purchase price was allocated as follows as of November 17, 2008:
November 17,
2008
(In thousands)
Current assets ...................................................... $187,877
Property, plant & equipment ............................................ 34,164
Goodwill .......................................................... 413,318
Intangible assets:
Tradename ....................................................... 131,560
Leasehold rights and interests . ........................................ 102,746
Total intangible assets ............................................. 234,306
Other long-term assets ................................................ 7,786
Current liabilities .................................................... (220,237)
Long-term liabilities ................................................. (76,807)
Total purchase price .................................................. $580,407
The purchase price allocation has been prepared on a preliminary basis based on the information that was
available to the Company at the time the consolidated financial statements were prepared, and revisions to the
preliminary purchase price allocation are expected as additional information becomes available.
In determining the purchase price allocation, management considered, among other factors, the Company’s
intention to use the acquired assets. The total weighted-average amortization period for the intangible assets,
F-16
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)