GameStop 2009 Annual Report Download - page 41

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(1) Includes the results of operations of EB from October 9, 2005, the day after completion of the EB merger,
through January 28, 2006.
(2) On the first day of the 53 weeks ended February 3, 2007 (“fiscal 2006”), the Company adopted new accounting
guidance on share-based payments, which required companies to expense the estimated fair value of stock options
and similar equity instruments issued to employees in its financial statements. The implementation of the new
accounting guidance affects the comparability of amounts from fiscal periods before fiscal 2006. The amount of
stock-based compensation included was $37.8 million, $35.4 million, $26.9 million and $21.0 million for the
fiscal years 2009, 2008, 2007 and 2006, respectively.
(3) The Company’s results of operations for fiscal 2008, fiscal 2006 and the 52 weeks ended January 28, 2006
(“fiscal 2005”) include expenses believed to be of a one-time or short-term nature associated with the
Micromania acquisition (fiscal 2008) and the EB merger (fiscal 2006 and fiscal 2005), which included
$4.6 million, $6.8 million and $13.6 million, respectively, considered in operating earnings and $7.5 million
included in fiscal 2005 in interest expense. In fiscal 2008, the $4.6 million included $3.5 million related to
foreign currency losses on funds used to purchase Micromania. In fiscal 2006 and fiscal 2005, the $6.8 million
and $13.6 million, respectively, included $1.9 million and $9.0 million in charges associated with assets of the
Company considered to be impaired as a result of the EB merger and $4.9 million and $4.6 million, respectively,
in costs associated with integrating the operations of GameStop and EB. Costs related to the EB merger
included in interest expense in fiscal 2005 include a fee of $7.1 million for an unused bridge financing facility
which the Company obtained as financing insurance in connection with the EB merger.
(4) Weighted average shares outstanding and earnings per common share have been adjusted to reflect the
Conversion and the Stock Split.
(5) Stores are included in our comparable store sales base beginning in the 13th month of operation.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the information contained in our consolidated
financial statements, including the notes thereto. Statements regarding future economic performance, manage-
ment’s plans and objectives, and any statements concerning assumptions related to the foregoing contained in
Management’s Discussion and Analysis of Financial Condition and Results of Operations constitute forward-
looking statements. Certain factors, which may cause actual results to vary materially from these forward-looking
statements, accompany such statements or appear elsewhere in this Form 10-K, including the factors disclosed
under “Item 1A. — Risk Factors.”
General
GameStop Corp. (together with its predecessor companies, “GameStop,” “we,” “us,” “our,” or the “Company”)
is the world’s largest retailer of video game products and PC entertainment software. We sell new and used video
game hardware, video game software and accessories, as well as PC entertainment software and other merchandise.
As of January 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 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 multi-platform video game magazine in the United States based on
circulation.
Our fiscal year is composed of 52 or 53 weeks ending on the Saturday closest to January 31. The fiscal years
ended January 30, 2010 (“fiscal 2009”), January 31, 2009 (“fiscal 2008”) and February 2, 2008 (“fiscal 2007”)
consisted of 52 weeks.
The Company began operations in November 1996. In October 1999, the Company was acquired by, and
became a wholly-owned subsidiary of, Barnes & Noble, Inc. (“Barnes & Noble”). In February 2002, GameStop
completed an initial public offering of its Class A common stock and was a majority-owned subsidiary of Barnes &
Noble until November 2004, when Barnes & Noble distributed its holdings of our common stock to its stockholders.
In October 2005, GameStop acquired the operations of Electronics Boutique Holdings Corp. (“EB”), a 2,300-store
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