GameStop 2009 Annual Report Download - page 56

leaseback transactions and (5) asset sales. Events of default provided for in the Indenture include, among other
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 30, 2010, 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.
In November 2008, in connection with the acquisition of Micromania, the Company entered into a Term Loan
Agreement (the “Term Loan Agreement”) with Bank of America, N.A. and Banc of America Securities LLC. The
Term Loan Agreement provided for term loans (“Term Loans”) in the aggregate of $150.0 million, consisting of a
$50.0 million secured term loan (“Term Loan A”) and a $100.0 million unsecured term loan (“Term Loan B”). The
effective interest rate on Term Loan A was 5.75% per annum and the effective rate on Term Loan B ranged from
5.0% to 5.75% per annum.
In addition to the $150.0 million under the Term Loans, the Company borrowed $275.0 million 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.
As of January 31, 2009 and January 30, 2010, the only long-term debt outstanding was the Senior Notes.
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 388 stores in fiscal 2009. We expect to open approximately 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 and redeemed the $300 million of Senior
Floating Rate Notes and $200 million of Senior Notes under previously announced buybacks authorized by its
Board of Directors. All of the authorized amounts were repurchased or redeemed and the repurchased Notes were
delivered to the Trustee for cancellation. The associated loss on the retirement of debt was $5.3 million, $2.3 million
and $12.6 million for the 52 week periods ended January 30, 2010, January 31, 2009 and February 2, 2008,
respectively, which consisted of the premium paid to retire the Notes and the write-off of the deferred financing fees
and the original issue discount on the Notes.
The changes in the carrying amount of the Senior Notes for the Company for the 52 weeks ended January 31,
2009 and the 52 weeks ended January 30, 2010 were as follows, in millions:
Balance at February 2, 2008 ................................................ $574.5
Repurchase of Senior Notes, net ............................................. (28.8)
Balance at January 31, 2009 ................................................ $545.7
Repurchase of Senior Notes, net ............................................. (98.4)
Balance at January 30, 2010 ................................................ $447.3
In October 2004, GameStop issued a promissory note in favor of Barnes & Noble in the principal amount of
$74.0 million in connection with the repurchase of GameStop’s common stock held by Barnes & Noble. The note
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