GameStop 2012 Annual Report Download - page 63

insolvency or receivership events affecting the Company or its subsidiaries, defaults relating to certain other
indebtedness, imposition of certain judgments and mergers or the liquidation of the Company or certain of its
subsidiaries.
During fiscal 2012, the Company borrowed and repaid $81.0 million under the Revolver. During fiscal 2011
and fiscal 2010, the Company borrowed and repaid $35.0 million and $120.0 million, respectively, under the
Credit Agreement. As of February 2, 2013, total availability under the Revolver was $388.7 million, there were
no borrowings outstanding under the Revolver and letters of credit outstanding totaled $9.0 million.
In September 2007, the Company’s Luxembourg subsidiary entered into a discretionary $20.0 million
Uncommitted Line of Credit (the “Line of Credit”) with Bank of America. There is no term associated with the
Line of Credit and Bank of America may withdraw the facility at any time without notice. The Line of Credit is
available to the Company’s foreign subsidiaries for use primarily as a bank overdraft facility for short-term
liquidity needs and for the issuance of bank guarantees and letters of credit to support operations. As of
February 2, 2013, there were cash overdrafts outstanding under the Line of Credit of $3.4 million and bank
guarantees outstanding of $5.0 million.
In September 2005, the Company, along with GameStop, Inc. as co-issuer (together with the Company, the
“Issuers”), completed the offering of $300 million aggregate principal amount of Senior Floating Rate Notes due
2011 (the “Senior Floating Rate Notes”) and $650 million aggregate principal amount of Senior Notes due 2012
(the “Senior Notes” and, together with the Senior Floating Rate Notes, the “Notes”). The Notes were issued
under an indenture, dated September 28, 2005, by and among the Issuers, the subsidiary guarantors party thereto,
and Citibank, N.A., as trustee. In November 2006, Wilmington Trust Company was appointed as the new trustee
for the Notes (the “Trustee”).
The Senior Notes bore interest at 8.0% per annum, were to mature on October 1, 2012 and were priced at
98.688%, resulting in a discount at the time of issue of $8.5 million. The discount was amortized using the
effective interest method. The Issuers paid interest on the Senior Notes semi-annually, in arrears, every April 1
and October 1, to holders of record on the immediately preceding March 15 and September 15. As of January 28,
2012, the Senior Notes had been fully redeemed.
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, as well as the investments we will make in e-commerce, digital and other
strategic initiatives. The Company opened 146 stores in fiscal 2012 and expects to open approximately 65 stores
in fiscal 2013. Capital expenditures for fiscal 2013 are projected to be approximately $135 million, to be used
primarily to fund continued digital initiatives, new store openings and store remodels and invest in distribution
and information systems in support of operations.
Between May 2006 and December 2011, the Company repurchased and redeemed the $300 million of
Senior Floating Rate Notes and the $650 million of Senior Notes under previously announced buybacks
authorized by the Company’s Board of Directors. The repurchased Notes were delivered to the Trustee for
cancellation. The associated loss on the retirement of debt was $1.0 million for the 52 week period ended
January 28, 2012, which consisted of the write-off of the deferred financing fees and the original issue discount
on the Notes. The associated loss on the retirement of debt was $6.0 million for the 52 week period ended
January 29, 2011, 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.
We used cash to expand the Company through acquisitions. During fiscal 2012, fiscal 2011 and fiscal 2010,
the Company used $1.5 million, $30.1 million and $38.1 million, respectively, for acquisitions which were
primarily for the Company’s overall digital growth strategy.
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