GameStop 2011 Annual Report Download - page 35

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system. These continued uncertainties could further disrupt European and global economic conditions.
Unfavorable economic conditions could negatively impact consumer demand for our products. These factors
could have an adverse effect on our business, results of operations and financial condition.
We are also subject to risks that our operations outside the United States could be conducted by our
employees, contractors, representatives or agents in ways that violate the Foreign Corrupt Practices Act or other
similar anti-bribery laws. While we have policies and procedures intended to ensure compliance with these laws,
our employees, contractors, representatives and agents may take actions that violate our policies. Moreover, it
may be more difficult to oversee the conduct of any such persons who are not our employees, potentially
exposing us to greater risk from their actions. Any violations of those laws by any of those persons could have a
negative impact on our business.
There may be possible changes in our global tax rate.
As a result of our operations in many foreign countries, our global tax rate is derived from a combination of
applicable tax rates in the various jurisdictions in which we operate. Depending upon the sources of our income,
any agreements we may have with taxing authorities in various jurisdictions and the tax filing positions we take
in various jurisdictions, our overall tax rate may be higher than other companies or higher than our tax rates have
been in the past. We base our estimate 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. A change in the mix of our business from year to year and from country to country, changes in
rules related to accounting for income taxes, changes in tax laws in any of the multiple jurisdictions in which we
operate or adverse outcomes from the tax audits that regularly are in process in any jurisdiction in which we
operate could result in an unfavorable change in our overall tax rate, which could have a material adverse effect
on our business and results of our operations.
If we are unable to renew or enter into new leases on favorable terms, our revenue growth may decline.
All of our retail stores are located in leased premises. If the cost of leasing existing stores increases, we
cannot assure you that we will be able to maintain our existing store locations as leases expire. In addition, we
may not be able to enter into new leases on favorable terms or at all, or we may not be able to locate suitable
alternative sites or additional sites for new store expansion in a timely manner. Our revenues and earnings may
decline if we fail to maintain existing store locations, enter into new leases, locate alternative sites or find
additional sites for new store expansion.
Restrictions on our ability to take trade-ins of and sell used video game products or used mobile devices
could negatively affect our financial condition and results of operations.
Our financial results depend on our ability to take trade-ins of, and sell, used video game products and used
mobile devices within our stores. Actions by manufacturers or publishers of video game products or mobile
devices or governmental authorities to limit our ability to take trade-ins or sell used video game products or
mobile devices could have a negative impact on our sales and earnings.
If we fail to keep pace with changing industry technology, we will be at a competitive disadvantage.
The interactive entertainment industry is characterized by swiftly changing technology, evolving industry
standards, frequent new and enhanced product introductions and product obsolescence. Video games are now
played on a wide variety of products, including mobile phones, tablets, social networking Web sites and other
devices. In order to continue to compete effectively in the video game industry, we need to respond quickly to
technological changes and to understand their impact on our customers’ preferences. It may take significant time
and resources to respond to these technological changes. If we fail to keep pace with these changes, our business
may suffer.
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