GameStop 2008 Annual Report Download - page 88

The gross carrying value and accumulated amortization of deferred financing fees as of January 31, 2009 were
$23,857 and $14,937, respectively.
The estimated aggregate amortization expenses for deferred financing fees and other intangible assets for the
next five fiscal years are approximately:
Year Ended
Amortization
of Deferred
Financing Fees
Amortization of
Other Intangible
Assets
(In thousands)
January 2010 ......................................... $2,671 $13,709
January 2011 ......................................... 2,669 11,020
January 2012 ......................................... 2,669 9,235
January 2013 ......................................... 911 8,524
January 2014 ......................................... — 8,221
$8,920 $50,709
8. Debt
In October 2005, in connection with the EB merger, the Company entered into a five-year, $400,000 Credit
Agreement (the “Revolver”), including a $50,000 letter of credit sub-limit, secured by the assets of the Company
and its U.S. subsidiaries. The Revolver places certain restrictions on the Company and its subsidiaries, including
limitations on asset sales, additional liens and the incurrence of additional indebtedness. In April 2007, the
Company amended the Revolver to extend the maturity date from October 11, 2010 to April 25, 2012, reduce the
LIBO interest rate margin, reduce and fix the rate of the unused commitment fee and modify or delete certain other
covenants.
The availability under the Revolver is limited to a borrowing base which allows the Company to borrow up to
the lesser of (x) approximately 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 and
repurchase shares is generally prohibited, except that if availability under the Revolver is, or will be after any such
payment, equal to or greater than 25% of the borrowing base, the Company may repurchase its capital stock and pay
cash dividends. In addition, in the event that credit extensions under the Revolver at any time exceed 80% of the
lesser of the total commitment or the borrowing base, the Company will be subject to a fixed charge coverage ratio
covenant of 1.5:1.0.
The per annum interest rate on the Revolver is variable and, at the Company’s option, is calculated by applying
a margin of (1) 0.0% to 0.25% above the higher of the prime rate of the administrative agent or the federal funds
effective rate plus 0.50% or (2) 1.00% to 1.50% above the LIBO rate. The applicable margin is determined quarterly
as a function of the Company’s consolidated leverage ratio. As of January 31, 2009, the applicable margin was 0.0%
for prime rate loans and 1.00% for LIBO rate loans. In addition, the Company is required to pay a commitment fee
of 0.25% for any unused portion of the total commitment under the Revolver. As of January 31, 2009, there were no
borrowings outstanding under the Revolver and letters of credit outstanding totaled $7,721.
In October 2008, the Company amended the Revolver to permit both the acquisition of Micromania and a
committed $150,000 junior term loan facility (the “Term Loans”). In addition, during any period for which the Term
Loans were outstanding, the amendment increased the applicable margin under the Revolver (i) payable on LIBO
rate loans to a range of 1.5% to 2.0% from the current range of 1.0% to 1.5% and (ii) payable on prime rate loans to a
range of 0.5% to 0.75% from the current range of 0.0% to 0.25%. The margins applicable prior to the entry into the
amendment apply once the Term Loans are no longer outstanding. The Term Loans were outstanding during the
fourth quarter of fiscal 2008.
F-21
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)