GameStop 2009 Annual Report Download

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Table of contents

  • Page 1

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  • Page 3
    In 2009, GameStop continued its commitment to the Make-A-Wish Foundation®. Featured on the cover, Make-A-Wish® kid Jonathan, age 10. Internationally, we have donated more than $1 million to our charities of choice to assist youth, like Make-A-Wish® kid Caleb, age 4.

  • Page 4

  • Page 5
    ... YEAR EVER in fiscal year 2009. In spite of the weak worldwide economic environment, we saw global market share growth as new software sales increased 1.2%, proving once again that the great entertainment value and exceptional service GameStop delivers resonates with our customers. Even though the...

  • Page 6
    ... retirement and merger-related costs of $.02 per share. Our unique Buy-Sell-Trade business model has huge benefits. The model brings customers into our stores and provides us with an impressive inventory of pre-owned merchandise we can sell. We returned over $1 billion to customers in 2009, and our...

  • Page 7
    ... of industries, with his most recent position as part of the senior management team for Ticketmaster North America. Shawn works closely with GameStop's California-based Digital Ventures group to maximize the company's online retail and digital aggregation business. Key to this strategy will be...

  • Page 8
    ... evolves. In 2009, we opened approximately 400 new stores worldwide, and we plan to mirror that number in 2010. Our real estate strategy focuses on quality locations with ï¬,exible lease terms that help us gain market share. In addition, our real estate gurus are experts at saving money when they...

  • Page 9
    ...of the media or method. We will continue to be THE video game retail destination of choice by offering customers access to games through doors, e-commerce and digital distribution. Our commitment to unmatched service, selection and value remains steadfast. The entire GameStop team strives to deliver...

  • Page 10
    ... annually work with local and regional non-profit organizations that share the common denominator of assisting youth by contributing both time and funding. In parallel, we are a proud partner with the Entertainment Software Rating Board (ESRB) in North America and Pan-European Game Information...

  • Page 11

  • Page 12
    ... increasing desire for video games outside the U.S. In 2010, the company plans to open more than 400 stores worldwide to advance our position as the world's largest video game and entertainment software retailer. NORTH AMERICA STORE COUNT United States 4,429 Canada 337 EUROPE STORE COUNT France 368...

  • Page 13

  • Page 14
    FORM 10 - K

  • Page 15
    ... executive offices) 76051 (Zip Code) Registrant's telephone number, including area code: (817) 424-2000 Securities registered pursuant to Section 12(b) of the Act: (Title of Class) (Name of Exchange on Which Registered) Class A Common Stock, $.001 par value per share New York Stock Exchange...

  • Page 16
    .... PART III Directors, 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...

  • Page 17
    ... 30, 2010, we operated 6,450 stores in the United States, Australia, Canada and Europe, primarily under the names GameStop and EB Games. We also operate electronic commerce Web sites, including www.gamestop.com, and publish Game Informer, the industry's largest multi-platform video game magazine in...

  • Page 18
    ...economic conditions affecting the electronic game industry, the retail industry and the banking and financial services market; • alternate sources of distribution of video game software; • the competitive environment in the electronic game industry; • our ability to open and operate new stores...

  • Page 19
    ...market for used video game hardware and software has developed. Based on reports published by NPD Group, we believe that, as of December 2009, the installed base of video game hardware systems in the United States, based on original sales, totaled over 220 million units of handheld and console video...

  • Page 20
    ...and marketing efficiencies. Our branding strategy is further supported by the GameStop "Edge" loyalty card and our Web site. The "Edge" 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 Web...

  • Page 21
    ... the "hottest" technology immediately on the day of release and the value-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...

  • Page 22
    ...new and used video game products, PC entertainment software, and related products, such as trading cards and strategy guides. Our in-store inventory generally consists of a constantly changing selection of over 4,500 SKUs. We have buying groups in each of our segments that negotiate terms, discounts...

  • Page 23
    ...Video Game Products. We believe we are the largest retailer of used video games in the world. We provide our customers with an opportunity to trade in their used video game products in our stores in exchange for store credits which can be applied towards the purchase of other products, primarily new...

  • Page 24
    ... sets forth the number of our stores located in the U.S., Canada, Europe and Australia as of January 30, 2010: United States Number of Stores Alabama ...Alaska ...Arizona ...Arkansas ...California ...Colorado ...Connecticut ...Delaware ...District of Columbia ...Florida ...Georgia ...Guam ...Hawaii...

  • Page 25
    ... reviews of new title releases, tips and secrets about existing games and news regarding current developments in the electronic game industry. Versions of the magazine are sold through subscription and through displays in our stores throughout most of the world. Game Informer is the twelfth largest...

  • Page 26
    ... merchandise online. The sites also offer customers information and content about available games, release dates for upcoming games, and access to store information, such as location and product availability. In 2005, we entered into an arrangement with Barnes & Noble under which www.gamestop.com...

  • Page 27
    ... distribution centers as the distribution volume, number of stores supported and returns on such investments permit. Management Information Systems. Our proprietary inventory management systems and point-of-sale technology show daily sales and in-store stock by title by store. Our systems use this...

  • Page 28
    ... electronics stores; other video game and PC software specialty stores; 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. Video...

  • Page 29
    ... agreements, while none of our U.S. employees are represented by a labor union or are members of a collective bargaining unit. Available Information We make available on our corporate Web site (www.gamestopcorp.com), under "Investor Relations - SEC Filings," free of charge, our annual reports...

  • Page 30
    ..., such as Game Group, Carrefour 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 Gallery and...

  • Page 31
    ...and profitability. Our international operations expose us to numerous risks. We have international retail operations in Australia, Canada and Europe. Because release schedules for hardware and software introduction in these markets often differ from release schedules in the United States, the timing...

  • Page 32
    ...our control. These factors include: • the timing and allocations of new product releases; • the timing of new store openings; • shifts in the timing of certain promotions; and • changes in foreign currency exchange rates. These and other factors could affect our business, financial condition...

  • Page 33
    ... off-site, third-party operated distribution centers with which we work. The third-party distribution centers pick up products from our suppliers, repackage the products for each of our stores and ship those products to our stores by package carriers. We use inventory replenishment systems to track...

  • Page 34
    ... our prices or increase spending; • our ability to open and operate new stores; • our ability to attract and retain qualified personnel; and • our dependence upon software publishers to develop popular game and entertainment titles for video game systems and PCs. If our financial condition or...

  • Page 35
    ... payments or redeem or repurchase capital stock; • engage in mergers, acquisitions and other business combinations; • prepay, redeem or purchase certain indebtedness; • amend or otherwise alter the terms of our organizational documents and our indebtedness, including the senior notes; • sell...

  • Page 36
    ..., 2010, the Company owned or leased office and distribution facilities, with lease expiration dates ranging from 2010 to 2019 and an average remaining lease life of approximately four years, in the following locations: Location Square Footage Owned or Leased Use United States Grapevine, Texas, USA...

  • Page 37
    ... on the Company's financial condition, results of operations or liquidity. Item 4. Reserved 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...

  • Page 38
    ... Condition and Results of Operations" in this Form 10-K. Issuer Purchases of Equity Securities Purchases by the Company of its equity securities during the fourth quarter of the fiscal year ended January 30, 2010 were as follows: (a) Total Number of Shares Purchased (b) Average Price Paid per Share...

  • Page 39
    ... 29, 2010 (the last trading date of fiscal 2009) with the cumulative total return on the Standard & Poor's 500 Stock Index (the "S&P 500") and the Dow Jones Retailers, Other Specialty Industry Group Index (the "Dow Jones Specialty Retailers Index") over the same period. Total return values were...

  • Page 40
    ... 2009 2008 2007 2006(1) (In thousands, except per share data and statistical data) Statement of Operations Data: Sales ...$9,077,997 Cost of sales ...6,643,345 Gross profit ...Selling, general and administrative expenses(2) ...Depreciation and amortization ...Merger-related expenses(3) ...Operating...

  • Page 41
    ... United States, Australia, Canada and Europe, primarily under the names GameStop and EB Games. We also operate electronic commerce Web sites under the names www.gamestop.com, www.ebgames.com.au, www.gamestop.ca, www.gamestop.it, and www.micromania.fr and publish Game Informer, the industry's largest...

  • Page 42
    .... Revenue Recognition. Revenue from the sales of the Company's products is recognized at the time of sale and is stated net of sales discounts. 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...

  • Page 43
    ... average cost method, as new product is received from vendors, 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...

  • Page 44
    ...than the current market rent at stores acquired as part of the Micromania acquisition or the EB merger. Favorable leasehold interests are amortized on a straight-line basis over their remaining lease term with no expected residual value. For additional information related to the Company's intangible...

  • Page 45
    ... 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 of the amount of income to be derived in any given jurisdiction. We file our tax returns based on our understanding of the appropriate tax rules and regulations...

  • Page 46
    ... 30, 2010 52 Weeks Ended January 31, 2009 52 Weeks Ended February 2, 2008 Statement of Operations Data: Sales ...Cost of sales ...Gross profit ...Selling, general and administrative expenses ...Depreciation and amortization ...Merger-related expenses ...Operating earnings ...Interest expense, net...

  • Page 47
    ...sales at the new and acquired stores added since fiscal 2008. As a percentage of sales, used video game product sales increased from 23.0% to 26.4%, primarily due to the continued expansion of the installed base of new video game consoles and the availability of used hardware and software from those...

  • Page 48
    ... 1,588 stores opened since February 3, 2007 of approximately $698.2 million and the acquisition of Micromania, offset by decreases related to changes in foreign exchange rates of $71.6 million. The comparable store sales increase was driven by strong sales of new and used video game software which...

  • Page 49
    ... availability of used hardware and software from those consoles. Sales of other product categories, including PC entertainment and other software and accessories, magazines and trading cards, grew 18.9%, or $196.4 million, from fiscal 2007 to fiscal 2008, primarily due to the increase in store count...

  • Page 50
    ... all stores engaged in the sale of new and used video game systems, software and accessories which we refer to as video game products and PC entertainment software and related accessories. These products are substantially the same regardless of geographic location, with the primary differences in...

  • Page 51
    ... States include retail operations in 50 states, the District of Columbia, Puerto Rico and Guam, the electronic commerce Web site www.gamestop.com and Game Informer Magazine. As of January 30, 2010, the United States segment included 4,429 GameStop stores, compared to 4,331 stores on January 31, 2009...

  • Page 52
    ... for the 52 weeks ended January 31, 2009 increased by 35.5% compared to the 52 weeks ended February 2, 2008, driven by strong sales of new video game software and used video game products and their related accessories, as well as the leveraging of selling, general and administrative expenses. 37

  • Page 53
    ... the 58 stores opened since February 3, 2007. As of January 31, 2009, the Canadian segment had 325 stores compared to 287 stores as of February 2, 2008. The increase in sales at existing stores was driven by strong sales of new video game software related to the continued expansion of the installed...

  • Page 54
    ... fiscal 2009, the Company used $178.9 million for capital expenditures primarily to open 388 new stores and to invest in information systems. In addition, the Company used $8.4 million on acquisitions. During fiscal 2008, the Company used $580.4 million, net of cash acquired, to purchase Micromania...

  • Page 55
    ...approximates market value, and consist primarily of time deposits with highly rated commercial banks and money market investment funds holding direct U.S. Treasury obligations. In October 2005, in connection with the EB merger, the Company entered into a five-year, $400 million Credit Agreement (the...

  • Page 56
    ... 400 stores in fiscal 2010. Capital expenditures for fiscal 2010 are projected to be approximately $215 million, to be used primarily to fund new store openings and invest in distribution and information systems in support of operations. Between May 2006 and September 2009, the Company repurchased...

  • Page 57
    ... video game stores with an inventory assortment similar to its other stores in Norway. In 2003, the Company purchased a 51% controlling interest in GameStop Group Limited which operates stores in Ireland and the United Kingdom. Under the terms of the purchase agreement, the minority interest owners...

  • Page 58
    ... related to unrecognized tax benefits would be partially offset by reductions in payments in other jurisdictions. In 2003, the Company purchased a 51% controlling interest in GameStop Group Limited, which operates stores in Ireland and the United Kingdom. Under the terms of the purchase agreement...

  • Page 59
    ... with Barnes & Noble under which 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...

  • Page 60
    ... in selling, general and administrative expenses related to the trading of derivative instruments. The aggregate fair value of the Foreign Currency Contracts as of January 30, 2010 was a net asset of $11.1 million as measured by observable inputs obtained from market news reporting services, such...

  • Page 61
    ... an independent registered public accounting firm, as stated in their report which is included in this Form 10-K. (c) Changes in Internal Control Over Financial Reporting The Company completed the acquisition of Micromania on November 17, 2008 and the results of operations of Micromania are included...

  • Page 62
    ... of the executive officers listed in the paragraph above, on the Company's Web site (www.gamestop.com) within four 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...

  • Page 63
    ... Bank of New York, as Rights Agent.(3) Form of Indenture.(6) Insurance Agreement, dated as of January 1, 2002, between Barnes & Noble, Inc. and GameStop Holdings Corp. (f/k/a GameStop Corp.).(7) Operating Agreement, dated as of January 1, 2002, between Barnes & Noble, Inc. and GameStop Holdings Corp...

  • Page 64
    ... Issuing Banks, Bank of America, N.A., as Administrative Agent and Collateral Agent, Citicorp North America, Inc., as Syndication Agent, and GE Business Financial Services, Inc., as Documentation Agent.(14) Term Loan Agreement, dated November 12, 2008, by and among GameStop Corp. (f/k/a GSC Holdings...

  • Page 65
    ....(15) Amended and Restated Executive Employment Agreement, dated December 31, 2008, between GameStop Corp. and J. Paul Raines.(15) Computation of Ratio of Earnings to Fixed Charges. Code of Ethics for Senior Financial and Executive Officers (17). Code of Standards, Ethics and Conduct. Subsidiaries...

  • Page 66
    ... 18, 2008. (15) Incorporated by reference to the Registrant's Form 8-K filed with the Securities and Exchange Commission on January 7, 2009. (16) Incorporated by reference to Appendix A to the Registrant's Proxy Statement for 2009 Annual Meeting of Stockholders filed with the Securities and Exchange...

  • Page 67
    ... the undersigned, thereunto duly authorized. GAMESTOP CORP. By: /s/ DANIEL A. DEMATTEO Daniel A. DeMatteo Chief Executive Officer Date: March 30, 2010 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 the...

  • Page 68
    Name Capacity Date /s/ GERALD R. SZCZEPANSKI Gerald R. Szczepanski Director March 30, 2010 /s/ EDWARD A. VOLKWEIN Edward A. Volkwein /s/ LAWRENCE S. ZILAVY Lawrence S. Zilavy Director March 30, 2010 Director March 30, 2010 53

  • Page 69
    INDEX TO CONSOLIDATED 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 Changes in Equity ...Statements of Cash Flows ...

  • Page 70
    ... 2007 the Company changed its method of accounting for uncertainty in income taxes. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), GameStop Corp.'s internal control over financial reporting as of January 30, 2010, based on...

  • Page 71
    ... material respects, effective internal control over financial reporting as of January 30, 2010, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of GameStop Corp. as of...

  • Page 72
    ... payable, long-term portion, net ...447,343 Deferred taxes ...25,466 Other long-term liabilities ...103,831 Total long-term liabilities ...576,640 Total liabilities ...2,232,316 Commitments and contingencies (Notes 10 and 11) Stockholders' equity: Preferred stock - authorized 5,000 shares; no shares...

  • Page 73
    ... January 31, January 30, 2008 2009 2010 (In thousands, except per share data) Sales ...$9,077,997 Cost of sales ...6,643,345 Gross profit ...Selling, general and administrative expenses ...Depreciation and amortization ...Merger-related expenses ...Operating earnings ...Interest income ...Interest...

  • Page 74
    ...,446 Balance at February 2, 2008 ...161,007 Comprehensive income: Net income for the 52 weeks ended January 31, 2009 ...- Foreign currency translation ...- Total comprehensive income ...Stock-based compensation ...Exercise of employee stock options and issuance of shares upon vesting of restricted...

  • Page 75
    ... ...Borrowings for acquisition ...Repayments of acquisition borrowings ...Issuance of shares relating to stock options ...Excess tax benefits (expense) realized from exercise of stock-based awards...Other ...Net cash flows provided by (used in) financing activities ...Exchange rate effect on cash...

  • Page 76
    ...," or the "Company") is the world's largest retailer of video game systems and software and PC entertainment software and related accessories primarily through its GameStop and EB Games stores. We also operate electronic commerce Web sites www.gamestop.com, www.ebgames.com.au, www.gamestop.ca, www...

  • Page 77
    ... average cost method, as new product is received from vendors, 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...

  • Page 78
    ... market rent at stores acquired as part of the Micromania acquisition or the EB merger. Favorable leasehold interests are amortized on a straight-line basis over their remaining lease term with no expected residual value. Note 8 provides additional information related to the Company's intangible...

  • Page 79
    .... 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 Income tax expense includes United States, state, local and international income taxes, plus a provision...

  • Page 80
    ... loss in the 52 weeks ended January 31, 2009 included a $3,545 net loss related to the change in foreign exchange rates related to the funding of the Micromania acquisition recorded in merger-related expenses. The Company uses forward exchange contracts, foreign currency options and cross-currency...

  • Page 81
    ... guarantees relating to international store leases totaling $15,982 as of January 30, 2010 and $12,930 as of January 31, 2009. Vendor Concentration The Company's largest vendors worldwide are Nintendo, Sony Computer Entertainment, Microsoft, Electronic Arts, Inc. and Activision, which accounted for...

  • Page 82
    ... of cash acquired. Micromania is a leading retailer of video and computer games in France with 368 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...

  • Page 83
    ... assets. Merger-related expenses totaling $4,593 shown in the fiscal 2008 statements of operations include a net loss related to the change in foreign exchange rates related to the funding of the Micromania acquisition and other costs considered to be of a one-time or short-term nature which...

  • Page 84
    ... Medial Limited, an online video game developer and operator, as part of the Company's overall digital growth strategy. The acquisition in the amount of $3,790 was accounted for using the acquisition method of accounting, with the excess of the purchase price over the net assets acquired, in the...

  • Page 85
    ...2011 - 2019 2010 - 2018 - The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value accounting guidance applies to our forward exchange contracts...

  • Page 86
    ... of $643,490 and a net notional value of $356,561. For the 52 weeks ended January 30, 2010, the Company recognized gains of $8,683 in selling, general and administrative expenses related to the trading of derivative instruments. As of January 31, 2009, the Company had a series of Forward Currency...

  • Page 87
    ... January 30, January 31, 2010 2009 (In thousands) Customer liabilities ...Deferred revenue ...Accrued rent...Accrued interest ...Employee compensation and related taxes ...Other taxes ...Settlement of treasury share purchases ...Other accrued liabilities ...Total accrued liabilities ... $199,175...

  • Page 88
    ... amount of goodwill for the Company's business segments for the 52 weeks ended January 31, 2009 and the 52 weeks ended January 30, 2010 were as follows: United States Canada Australia (In thousands) Europe Total Balance at February 2, 2008 ...Goodwill acquired, net ...Foreign currency translation...

  • Page 89
    ...February 2, 2008 ...Addition for revolving credit facility amendment ...Addition for term loan facility fee ...Write-off of deferred financing fees remaining on repurchased senior notes (see Note 9) ...Addition of non-compete agreement ...Addition of tradename from Micromania acquisition ...Addition...

  • Page 90
    ...-term liquidity needs and for the issuance of bank guarantees and letters of credit to support operations. As of January 30, 2010, there were no cash overdrafts outstanding under the Line of Credit and bank guarantees outstanding totaled $15,983. In September 2005, the Company, along with GameStop...

  • Page 91
    ... Term Loans, the Company borrowed $275,000 under the Revolver to complete the acquisition of Micromania in November 2008. As of January 31, 2009, the Revolver and the Term Loans were repaid in full. In October 2004, GameStop issued a promissory note in favor of Barnes & Noble, Inc. ("Barnes & Noble...

  • Page 92
    ...rental expenses under operating leases were as follows: 52 Weeks Ended January 30, 2010 52 Weeks Ended January 31, 2009 (In thousands) 52 Weeks Ended February 2, 2008 Minimum ...Percentage rentals... $354,310 22,580 $376,890 $303,727 22,927 $326,654 $255,259 19,968 $275,227 Future minimum annual...

  • Page 93
    ... on the Company's financial condition, results of operations or liquidity. In 2003, the Company purchased a 51% controlling interest in GameStop Group Limited, which operates stores in Ireland and the United Kingdom. Under the terms of the purchase agreement, the minority interest owners have the...

  • Page 94
    ..., 2010, primarily due to audit settlements and statute expirations. The Company's effective tax rate increased from 34.6% in the 52 weeks ended February 2, 2008 to 37.2% in the 52 weeks ended January 31, 2009, primarily due to expenses related to the mergers and acquisitions and associated corporate...

  • Page 95
    ... file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Internal Revenue Service ("IRS") commenced an examination of the Company's U.S. income tax returns for the fiscal years ended on February 3, 2007 and February 2, 2008 during fiscal 2009...

  • Page 96
    ... fair value of each option is recognized as compensation expense on a straight-line basis between the grant date and the date the options become fully vested. During the 52 weeks ended January 30, 2010, January 31, 2009 and February 2, 2008, the Company included compensation expense relating to the...

  • Page 97
    ... ended January 30, 2010, January 31, 2009 and February 2, 2008, the Company included compensation expense relating to the grant of these restricted shares in the amounts of $26,309, $19,931 and $11,108, respectively, in selling, general and administrative expenses in the accompanying consolidated...

  • Page 98
    ... & 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 January 30, 2010, January 31, 2009 and February 2, 2008, the fee to Barnes & Noble totaled $374...

  • Page 99
    ... 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 Web site www.gamestop.com and Game...

  • Page 100
    ... States Fiscal Year Ended January 31, 2009 Canada Australia Europe Other Consolidated Sales ...Depreciation and amortization ...Operating earnings ...Interest income ...Interest expense ...Earnings before income tax expense ...Income tax expense ...Goodwill ...Other long-lived assets ...Total...

  • Page 101
    ... 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 prior to the acquisition...

  • Page 102
    ... at the end of fiscal 2009 and have been reported in accrued liabilities. Since the end of fiscal 2009, the Company has purchased an additional 6,527.7 shares for an average price per share of $19.03. 20. Consolidating Financial Statements In order to finance the EB merger, as described in Note...

  • Page 103
    ... present the financial position as of January 30, 2010 and January 31, 2009 and results of operations and cash flows for the fiscal years ended January 30, 2010, January 31, 2009 and February 2, 2008 of the Company's guarantor and non-guarantor subsidiaries. GAMESTOP CORP. CONSOLIDATING BALANCE...

  • Page 104
    ... Senior notes payable, long-term portion, net ...545,712 - Deferred taxes ...7,523 - Other long-term liabilities ...40,931 56,032 Total long-term liabilities ...594,166 56,032 Total liabilities ...2,319,182 701,626 Stockholders' equity: Preferred stock - authorized 5,000 shares; no shares issued or...

  • Page 105
    ... Weeks Ended January 31, 2009 Sales ...Cost of sales ...Gross profit ...Selling, general and administrative expenses ...Depreciation and amortization ...Merger-related expenses ...Operating earnings ...Interest income ...Interest expense ...Debt extinguishment expense ...Earnings before income tax...

  • Page 106
    ... Weeks Ended February 2, 2008 Consolidated February 2, 2008 Sales ...Cost of sales ...Gross profit ...Selling, general and administrative expenses ...Depreciation and amortization ...Operating earnings ...Interest income ...Interest expense ...Debt extinguishment expense ...Earnings before income...

  • Page 107
    ... the revolver ...Repayment of revolver borrowings ...Issuance of shares relating to stock options ...Excess tax benefits (expense) realized from exercise of stock-based awards ...Other ...Net cash flows used in financing activities ...Exchange rate effect on cash and cash equivalents ...Net increase...

  • Page 108
    ... flows provided by (used in) operating activities: Depreciation and amortization (including amounts in cost of sales) ...104,880 Provision for inventory reserves ...34,854 Amortization and retirement of deferred financing fees and issue discounts...3,735 Stock-based compensation expense ...35,354...

  • Page 109
    ... flows from financing activities: Repurchase of notes payable ...Repayments of acquisition borrowings ...Issuance of shares relating to stock options ...Excess tax benefits realized from exercise of stockbased awards ...Other ...Net cash flows used in financing activities ...Exchange rate effect on...

  • Page 110
    ... the third quarter of the fiscal year ended January 31, 2009 include merger-related expenses of $16,605 associated with the change in foreign exchange rates related to the funding of the Micromania acquisition. (5) The results of operations for the fourth quarter of the fiscal year ended January 31...

  • Page 111
    ... Bank of New York, as Rights Agent.(3) Form of Indenture.(6) Insurance Agreement, dated as of January 1, 2002, between Barnes & Noble, Inc. and GameStop Holdings Corp. (f/k/a GameStop Corp.).(7) Operating Agreement, dated as of January 1, 2002, between Barnes & Noble, Inc. and GameStop Holdings Corp...

  • Page 112
    ... Banks, Bank of America, N.A., as Administrative Agent and Collateral Agent, Citicorp North America, Inc., as Syndication Agent, and GE Business Financial Services, Inc., as Documentation Agent.(14) 10.16 Term Loan Agreement, dated November 12, 2008, by and among GameStop Corp. (f/k/a GSC Holdings...

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    .... (8) Incorporated by reference to Appendix A to the Registrant's Proxy Statement for 2008 Annual Meeting of Stockholders filed with the Securities and Exchange Commission on May 23, 2008. (9) Incorporated by reference to GameStop Holdings Corp.'s Form 10-K for the fiscal year ended January 29, 2005...

  • Page 114
    ...Cathy R. Smith served as Chief Financial Officer. GameStop, EB Games, Electronics Boutique, Game Informer magazine, Micromania and Respect the Ratings are trademarks of GameStop, Inc. Products and characters named in these pages are trade names or trademarks of their respective companies. "Power to...

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