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CHANGING THE GAME
2013 ANNUAL REPORT

Table of contents

  • Page 1
    2013 ANNUAL REPORT C H A N G I N G T H E G A M E

  • Page 2
    ... hardware market share of any console launch in history. In addition, we completed two acquisitions that provide strong entry points into new areas of technology retail. As we enter 2014, the re-energized video game category and our new businesses provide us with solid growth opportunities in gaming...

  • Page 3
    ... expenses, as well as changes in management estimates. STORE COUNT INTERNATIONAL FREE CASH FLOW* DIGITAL RECEIPTS 2,208 2,177 2,180 2,134 2,500 2,000 1,500 1,000 500 $500 $600 10 11 12 13 $632.6 $459.0 $470.3 $329.8 $600 $800 $724.4 $629.6 $453.4 $288.6 $400 $400 $300 STORE COUNT UNITED...

  • Page 4
    ...for their new consoles with the more than $1 billion of trade credits we provided through our video game and consumer electronics buy-sell-trade model. We continued driving positive customer experiences in both our physical and virtual storefronts by delivering the highest service, greatest product...

  • Page 5
    ...class pre-paid wireless experience without annual contracts. We currently operate 31 Cricket Wireless stores in the Seattle, Cleveland, Los Angeles and Dallas markets. Finally, during 2013, we completed the acquisition of Simply Mac, the largest certified specialist of Apple's full line of products...

  • Page 6
    ... market share during the launch. | We attained this position in the marketplace by utilizing our pre-order sales, highly knowledgeable store associates, PowerUp Rewards database, dynamic midnight launch events and our unique trade programs around the world to dominate the largest video game console...

  • Page 7
    ... play as they download, purchase content using the mobile companion app and with "Remote Play" on the PS4 and PlayStation®Vita, they can enjoy their games anywhere there is an internet connection. The release of the Xbox One and PS4 has been the biggest generational shift in console technology in...

  • Page 8
    ... best value on new and pre-owned consoles, games, accessories and consumer electronics. 76% of trades were applied towards the purchase of new products in 2013. $2,200 $2,000 10 11 12 13 Sales in millions We returned more than $1 billion to customers through our buy-sell-trade program in 2013. 6

  • Page 9
    ... buy-sell-trade business. The ability to receive video games and consoles that a customer brings in for trade, repair them and return them to the consumer market is something no other retailer can do as well as GameStop. | In addition, our largest state-of-the-art facility in Grapevine, Texas also...

  • Page 10
    ... since launch, our PowerUp Rewards loyalty program is now 34 million members strong globally. By engaging this enthusiastic gamer community, we are able to increase brand loyalty, acquire new customers, successfully launch new business initiatives and drive market share growth. The consumer data...

  • Page 11
    ... Wallet, and launching PowerUp Rewards in five new countries. GameStop's international digital business grew 47% in 2013. GameStop operates 6,675 stores in 15 countries worldwide, making us the world's largest specialty retailer of video games. We also command leading market share in 12 of the...

  • Page 12
    ... month. GameStop's mobile site, offering customer ease and convenience, experienced 76% growth in traf c and 62% in revenue in 2013. Our web-in-store service guarantees every game is in stock by giving customers the choice to order any product online while in a store and have it shipped directly...

  • Page 13
    ...to drive market share gains. The PS4 launch drove a significant increase in the sale of PlayStation Plus with 3.4 times more purchases of the subscription service since launch than the entire amount sold prior to launch. Kongregate, our online and mobile game developer continued its growth streak...

  • Page 14
    ... eered at 21 different Ronald McDonald House se locations across the U.S. ® GameStop continued its valued partnership with the Entertainment Software Rating Board (ESRB). We are committed to upholding the Respect the Ratings campaign to ensure we sell age-appropriate games to our customers. 12

  • Page 15
    ... U.S. wireless and $208 billion global consumer electronics markets. | Investing in these opportunities provides GameStop new ways to deliver sustainable revenue growth and gives our investors long-term earnings potential as we build a portfolio of technology brands that complement our core business...

  • Page 16
    This Page Intentionally Left Blank

  • Page 17
    ... closing market price of $50.39 per share of Class A Common Stock on the New York Stock Exchange as of August 3, 2013. (For purposes of this calculation all of the registrant's directors and officers are deemed affiliates of the registrant.) Number of shares of $.001 par value Class A Common Stock...

  • Page 18
    ... Staff Comments...Item 2. Properties ...Item 3. Legal Proceedings...Item 4. Mine Safety Disclosures ...PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities...Item 6. Selected Financial Data ...Item 7. Management's Discussion...

  • Page 19
    ... and digital video game software, video game accessories, as well as new and pre-owned mobile and consumer electronics products and other merchandise. As of February 1, 2014, GameStop's retail network and family of brands include 6,675 company-operated stores in the United States, Australia, Canada...

  • Page 20
    ... electronics products. Aio Wireless is a new AT&T brand offering pre-paid wireless services, devices and related accessories. We have opened 31 Aio Wireless stores in recent months in a few key markets throughout the United States. AT&T recently acquired Leap Wireless, the operator of Cricket...

  • Page 21
    ... $13 billion market in the United States in 2013, consisting of new physical video game products, excluding sales of pre-owned video game products. In addition, content in digital format (full game and add-on content downloads, subscriptions, mobile games and social network games) was approximately...

  • Page 22
    ... or other retailers seek to reduce excess or slow-moving inventory. As we look to grow our market share and overall position in the video game industry, we have begun to expand our pre-owned category to include value video game products that typically include non-new release software purchased at...

  • Page 23
    ... 5-10% annually in the next five years. • • Business and Growth Strategy Our goal is to continue to be the world's largest multichannel retailer of new and pre-owned and value video game products and to strategically expand our Simply Mac, Spring Mobile and Aio Wireless businesses. We plan to...

  • Page 24
    ...launch of next-generation consoles and software to drive close-out availability and trade-ins of older video game products, thereby expanding our supply of pre-owned and value video game products. Expand our Digital Growth Strategy to Protect and Expand our Market Leadership Position. We expect that...

  • Page 25
    ... our customers the opportunity to pre-order products in our stores or through our Web sites prior to their release. Investing in our Information Systems and Distribution Capabilities. We employ sophisticated and fully-integrated inventory management, store-level point-of-sale and financial systems...

  • Page 26
    ...downloadable software and subscription, time and points cards, which do not involve physical product. Our product offerings consist of new and preowned video game products, and related products, such as video game accessories, headsets and strategy guides, as well as new and pre-owned mobile devices...

  • Page 27
    ...system allows us to actively manage the pricing and product availability of our pre-owned and value video game products across our store base and to reallocate our inventory as necessary. Our trade-in program also allows us to be one of the only suppliers of previous generation platforms and related...

  • Page 28
    ... the number and locations of our stores included in the Video Game Brands segments in the U.S., Canada, Europe and Australia and our Technology Brands segment as of February 1, 2014: Number of Stores United States Video Game Brands Alabama ...Alaska...Arizona ...Arkansas ...California...Colorado...

  • Page 29
    United States Video Game Brands Number of Stores Utah ...Vermont...Virginia...Washington...West Virginia...Wisconsin ...Wyoming...Total Stores - United States Video Game Brands... 28 5 137 78 31 60 8 4,249 12

  • Page 30
    ...Canada ...Total Stores - Canada Video Game Brands...Australia...New Zealand...Total Stores - Australia Video Game Brands...Austria...Denmark ...Finland ...France ...Germany ...Ireland ...Italy ...Norway ...Spain ...Sweden...Switzerland ...Total Stores - Europe Video Game Brands...Total International...

  • Page 31
    ...to earn unique video game related rewards not available through any other retailer. Vendors also participate in these programs to increase the sales of their individual products. Our PowerUp Rewards program in the United States gives our customers the ability to sign up for a free or paid membership...

  • Page 32
    ... e-commerce sites. The DLC typically available today consists of add-on content developed by publishers for existing games. 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...

  • Page 33
    ... strategies and in-stock inventory positions. In addition, this electronic communication allows title selection in each store to be continuously updated and tailored to reflect the tastes and buying patterns of the store's local market. These communications also give field management access...

  • Page 34
    ... and their distribution channels, including Verizon, Sprint and T-Mobile. Our Simply Mac stores compete with Apple, including on-line and corporate owned Apple stores, mass-market retailers as noted above, and other authorized Apple resellers. Aio Wireless stores compete with the pre-paid and post...

  • Page 35
    ..., evolving industry standards, frequent new and enhanced product introductions, rapidly changing consumer preferences 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...

  • Page 36
    ... historical levels, our sales and earnings could be negatively impacted. The manufacturers of video game hardware and software have typically provided retailers with significant marketing and merchandising support for their products. Additionally, AT&T and Apple provide our Technology Brands stores...

  • Page 37
    ... products available to us, which could lower our sales 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...

  • Page 38
    ... 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 pre-owned video game products or pre-owned mobile devices could...

  • Page 39
    ... growth strategy depends in part upon opening new stores and operating them profitably. We opened 109 Video Game Brands stores and opened or acquired 218 Technology Brands stores in fiscal 2013, which is inclusive of the stores we acquired as a result of the Simply Mac and Spring Mobile acquisitions...

  • Page 40
    ... through any increased expenses through higher prices. Environmental legislation or other regulatory changes could impose unexpected costs or impact us more directly than other companies due to our operations as a global retailer. Specifically, environmental legislation or international agreements...

  • Page 41
    ... governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. If we were to borrow against our senior credit facility, a significant increase in interest rates could have an adverse effect on our financial position and results...

  • Page 42
    ...leases and transfer enough of the sales to other nearby stores to improve, if not at least maintain, profitability. We expect to open or acquire approximately 350 - 450 new stores in fiscal 2014, including 40 - 50 Video Game Brands stores and 300 - 400 Technology Brands stores. We also plan to close...

  • Page 43
    ... Leased Use United States Grapevine, Texas, USA...Grapevine, Texas, USA...Louisville, Kentucky, USA...Minneapolis, Minnesota, USA ...Salt Lake City, Utah ...San Francisco, California, USA...Denver, Colorado, USA...West Chester, Pennsylvania, USA...Greenwood Village, Colorado, USA...Canada Brampton...

  • Page 44
    PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Price Range of Common Stock Our Class A Common Stock is traded on the New York Stock Exchange ("NYSE") under the symbol "GME." The following table sets forth, for the periods...

  • Page 45
    ... purchases of our equity securities during the fourth quarter of the fiscal year ended February 1, 2014 were as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value...

  • Page 46
    ... Issuance under Equity Compensation Plans For information regarding securities authorized for issuance under equity compensation plans, refer to "Part III -Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters." Item 6. Selected Financial Data The...

  • Page 47
    ... Dividends per common share ...$ Weighted average common shares outstanding -basic ...Weighted average common shares outstanding -diluted ...Store Operating Data: Number of stores by segment United States ...Canada...Australia ...Europe ...Technology Brands...Total...Comparable store sales increase...

  • Page 48
    ...co.uk and www.micromania.fr. The network also includes: www.kongregate.com, a leading browser-based game site; Game Informer magazine, the leading multi-platform video game publication; a digital PC distribution platform available at www.gamestop.com/pcgames; iOS and Android mobile applications; and...

  • Page 49
    ... expand the number of Spring Mobile and Simply Mac stores which we operate in future years. We also expect to expand our pre-paid stores with AT&T under either the Aio Wireless brand or the Cricket brand following AT&T's acquisition of Leap Wireless. Critical Accounting Policies and Use of Estimates...

  • Page 50
    ... vendors, its current cost is added to the existing cost of product on-hand and this amount is re-averaged over the cumulative units. Pre-owned video game products traded in by customers are recorded as inventory at the amount of the store credit given to the customer. In valuing inventory, we are...

  • Page 51
    ... ads on our digital Web sites and are amortized on a straight-line basis over 10 years. Favorable leasehold interests represent the value of the contractual monthly rental payments that are less than the current market rent at stores acquired as part of the Micromania acquisition or the EB merger...

  • Page 52
    ...have the effect of either increasing or decreasing the reserve through the current period provision by an amount estimated to cover the cost of all points previously earned but not yet redeemed by loyalty program members as of the end of the reporting period. Lease Accounting. We lease retail stores...

  • Page 53
    ... by check and credit cards in cost of sales, rather than selling, general and administrative expenses, in the statement of operations. As a result of these classifications, our gross margins are not comparable to those retailers that include purchasing, receiving and distribution costs in cost of...

  • Page 54
    ..., PlayStation Plus and Nintendo network points and subscription cards, other prepaid digital currencies and time cards, Kongregate, Game Informer digital subscriptions and PC digital downloads; Mobile and Consumer Electronics, which includes revenues from selling new and pre-owned mobile devices and...

  • Page 55
    ... Profit Percent 52 Weeks Ended January 28, 2012 Gross Profit Gross Profit Percent Gross Profit: New video game hardware...$ New video game software...Pre-owned and value video game products...Video game accessories ...Digital ...Mobile and consumer electronics ...Other ...Total ...$ Fiscal 2013...

  • Page 56
    ...net of the cost of free or discounted products for our loyalty programs, in the amount of $42.5 million. Gross profit as a percentage of sales on new video game hardware increased from 7.6% in fiscal 2012 to 10.2% in fiscal 2013 due to the mix of next generation consoles at a higher margin rate, the...

  • Page 57
    ... the 53rd week in fiscal 2012. The decrease in comparable store sales was primarily due to decreases in new video game hardware sales, new video game software sales, pre-owned and value video game products sales and video game accessories sales offset partially by an increase in digital, mobile and...

  • Page 58
    ... the timing of the release of new products or technologies in the various segments. Stores in all Video Game Brands segments are similar in size at an average of approximately 1,400 square feet. The Technology Brands segment offers wireless services, devices and related accessories and sells Apple...

  • Page 59
    ... charges reported in operating earnings by operating segment, in U.S. dollars were as follows (in millions): 52 Weeks Ended February 1, 2014 53 Weeks Ended February 2, 2013 52 Weeks Ended January 28, 2012 Video Game Brands: United States...Canada ...Australia...Europe...Technology Brands...Total...

  • Page 60
    ...the 53rd week of fiscal 2012. The increase in sales at existing stores was due to new video game console and title releases. The segment operating profit for fiscal 2013 was $37.5 million compared to an operating loss of $71.6 million for fiscal 2012. The increase in operating earnings was primarily...

  • Page 61
    ... for the 53rd week in fiscal 2012. The decrease in pre-owned and value video game product sales was primarily due to a decrease in store traffic related to the lack of new release video game titles in fiscal 2012 when compared to fiscal 2011 and the late stages of the console cycle, offset partially...

  • Page 62
    ... video game titles and the late stages of the console cycle. The decrease in pre-owned and value video game product sales is due primarily to a decrease in store traffic related to lower sales of new release video game titles and the late stages of the console cycle. The increase in digital, mobile...

  • Page 63
    ... by working capital of $176.9 million, primarily driven by a change in the timing of payments of accounts payable, partially offset by higher inventory purchases in fiscal 2013. The higher inventory purchases in fiscal 2013 were primarily due to purchases to support the launch of new consoles. 46

  • Page 64
    ...the acquisition of Spring Mobile and Simply Mac. During fiscal 2012, we used $139.6 million for capital expenditures primarily to invest in information systems, distribution center capacity and e-commerce, digital and loyalty program initiatives and to open 146 stores in the U.S. and internationally...

  • Page 65
    ... 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. We opened or acquired 327 stores in fiscal 2013, which includes the stores acquired in connection with the Spring Mobile and Simply Mac acquisitions...

  • Page 66
    ... payments related to unrecognized tax benefits would be partially offset by reductions in payments in other jurisdictions. See Note 13 to our consolidated financial statements for further information regarding our uncertain tax positions. We lease retail stores, warehouse facilities, office space...

  • Page 67
    ... full fiscal year. Quarterly results may fluctuate materially depending upon, among other factors, the timing of new product introductions and new store openings, sales contributed by new stores, increases or decreases in comparable store sales, the nature and timing of acquisitions, adverse weather...

  • Page 68
    ..., our management concluded that our internal control over financial reporting was effective at the reasonable assurance level as of February 1, 2014. During the fourth quarter of fiscal 2013, we completed our acquisitions of Spring Mobile and the remaining equity ownership of Simply Mac that we...

  • Page 69
    ..., management excluded from its assessment the internal control over financial reporting at Spring Communications, Inc. ("Spring Mobile") and Simply Mac, Inc. ("Simply Mac"), which ownership interests were acquired on November 3, 2013 and November 7, 2013, respectively, and whose financial statements...

  • Page 70
    Item 9B. Other Information None. 53

  • Page 71
    ...finance or accounting role. We have also adopted a Code of Standards, Ethics and Conduct applicable to all of our management-level employees. Each of the Code of Ethics and Code of Standards, Ethics and Conduct are available on our website at www.gamestop.com. In accordance with SEC rules, we intend...

  • Page 72
    ... Beginning of Period Charged to Costs and Expenses DeductionsWrite-Offs Net of Recoveries Balance at End of Period Inventory Reserve, deducted from asset accounts 52 Weeks Ended February 1, 2014...53 Weeks Ended February 2, 2013...52 Weeks Ended January 28, 2012... $ 83.8 67.7 69.5 $ 40.6 43...

  • Page 73
    ... duly caused this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. GAMESTOP CORP. By: /s/ J. PAUL RAINES J. Paul Raines Chief Executive Officer and Director Date: April 2, 2014 Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has...

  • Page 74
    ... 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 Comprehensive Income...Statements of Changes in Equity ...Statements...

  • Page 75
    ...balance sheet of GameStop Corp. (the "Company") as of February 1, 2014, and the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for the 52 week period ended February 1, 2014. Our audit also included the financial statement schedule listed in the...

  • Page 76
    ... in all material respects, the financial position of GameStop Corp. at February 2, 2013 and the results of its operations and its cash flows for the 53 week period ended February 2, 2013 and the 52 week period ended January 28, 2012, in conformity with accounting principles generally accepted in the...

  • Page 77
    ..., 115.3 and 118.2 shares outstanding, respectively ...Additional paid-in-capital ...Accumulated other comprehensive income ...Retained earnings ...Total stockholders' equity...Total liabilities and stockholders' equity...$ See accompanying notes to consolidated financial statements. F-4 783.9 861...

  • Page 78
    GAMESTOP CORP. CONSOLIDATED STATEMENTS OF OPERATIONS 52 Weeks Ended February 1, 2014 53 Weeks Ended February 2, 2013 52 Weeks Ended January 28, 2012 (In millions, except per share data) Net sales ...$ Cost of sales ...Gross profit ...Selling, general and administrative expenses ...Depreciation and...

  • Page 79
    GAMESTOP CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) 52 Weeks Ended February 1, 2014 53 Weeks Ended February 2, 2013 (In millions) 52 Weeks Ended January 28, 2012 Net income (loss) ...$ Other comprehensive income (loss): Foreign currency translation adjustments ...Total ...

  • Page 80
    ... tax benefit of $2.1) ...Balance at January 28, 2012...Purchase of subsidiary shares from noncontrolling interest...Net loss for the 53 weeks ended February 2, 2013...Foreign currency translation...Dividends(1)...Stock-based compensation ...Repurchases of common stock ...Exercise of employee stock...

  • Page 81
    ...: Purchase of property and equipment...Acquisitions, net of cash acquired ...Other ...Net cash flows used in investing activities ...Cash flows from financing activities: Repayment of acquisition-related debt ...Repurchase of notes payable...Repurchase of common shares...Dividends paid ...Borrowings...

  • Page 82
    ...Micromania stores. We sell mobile and consumer electronics primarily through our Spring Mobile and Simply Mac stores. Our stores, which totaled 6,675 at February 1, 2014, are located in major regional shopping malls and strip centers. We also operate electronic commerce Web sites at www.gamestop.com...

  • Page 83
    ... vendors, its current cost is added to the existing cost of product on-hand and this amount is re-averaged over the cumulative units. Pre-owned video game products traded in by customers are recorded as inventory at the amount of the store credit given to the customer. In valuing inventory, we are...

  • Page 84
    ... units exceeded their carrying values by more than 20% and the calculated fair value of our Europe reporting unit exceeded its carrying value by more than 10%. For fiscal 2013, there was a $10.2 million goodwill write-off in the United States Video Game Brands segment as a result of abandoning...

  • Page 85
    .... The sales of pre-owned video game products are recorded at the retail price charged to the customer. Advertising revenues for Game Informer are recorded upon release of magazines for sale to consumers. Subscription revenues for our PowerUp Rewards loyalty program and magazines are recognized on...

  • Page 86
    ...2, 2013 and the 52 weeks ended January 28, 2012 were $57.8 million, $63.9 million and $65.0 million, respectively. Loyalty Expenses The PowerUp Rewards loyalty program, introduced in May 2010, allows enrolled members to earn points on purchases that can be redeemed for rewards that include discounts...

  • Page 87
    ... the financial statements as either a reduction to a deferred tax asset or separately as a liability depending on the existence, availability and/or use of an operating loss carryforward, a similar tax loss, or a tax credit carryforward. This ASU will be effective for us beginning the first quarter...

  • Page 88
    ... book value of assets recorded for that store. A summary of our asset impairment charges, by reportable segment, for the 53 weeks ended February 2, 2013 is as follows: United States Video Game Brands Canada Video Game Brands Australia Video Game Brands (In millions) Europe Video Game Brands Total...

  • Page 89
    ...interest in Simply Mac for a purchase price of $9.5 million. Spring Mobile -- In November 2013, we purchased Spring Communications, Inc. ("Spring Mobile"), a wireless retailer, for a purchase price of $62.6 million. As shown in the table below, the liabilities assumed in the acquisition included $34...

  • Page 90
    ...in the video game retail marketplace. The operating results of Simply Mac and Spring Mobile have been included in our consolidated financial statements beginning on the respective closing dates of each acquisition and are reported in our Technology Brands segment. The pro forma effect assuming these...

  • Page 91
    ... of diluted earnings per share if their effect would be antidilutive. A reconciliation of shares used in calculating basic and diluted net income (loss) per common share is as follows: 52 Weeks Ended February 1, 2014 53 Weeks Ended February 2, 2013 52 Weeks Ended January 28, 2012 (In millions...

  • Page 92
    ... ...Total... $ (20.3) $ 23.6 3.3 (19.8) $ 22.3 2.5 13.5 (14.1) (0.6) $ $ $ We do not use derivative financial instruments for trading or speculative purposes. We are exposed to counterparty credit risk on all of our derivative financial instruments and cash equivalent investments. We manage...

  • Page 93
    ... with the Spring Mobile and Simply Mac acquisitions in the fourth quarter of 2013. The fair value measurements were primarily based on significant unobservable inputs (Level 3) developed using company-specific information. See Note 3 for further information associated with the values recorded in...

  • Page 94
    ... projected annual business plans, long-term business strategies, comparable store sales, store count, gross margins, operating expenses, working capital needs, capital expenditures and long-term growth rates, all considered in light of current and anticipated economic factors. Discount rates used in...

  • Page 95
    ... trade name from another company. The basis for future cash flow projections is internal revenue forecasts, which we believe represent reasonable market participant assumptions, to which the selected royalty rate is applied. These future cash flows are discounted using the applicable discount rate...

  • Page 96
    ...90% of the appraisal value of the inventory, in each case plus 90% of eligible credit card receivables, net of certain reserves. Letters of credit reduce the amount available to borrow by their face value. Our ability to pay cash dividends, redeem options and repurchase shares is generally permitted...

  • Page 97
    ... various stores and are accounted for in the period in which the amount of percentage rentals can be accurately estimated. Approximate rental expenses under operating leases were as follows: 52 Weeks Ended February 1, 2014 53 Weeks Ended February 2, 2013 (In millions) 52 Weeks Ended January 28, 2012...

  • Page 98
    ... (58.2) 224.9 $ The components of earnings (loss) before income tax expense consisted of the following: 52 Weeks Ended February 1, 2014 53 Weeks Ended February 2, 2013 (In millions) 52 Weeks Ended January 28, 2012 United States ...International ...Total... $ $ 491.6 77.2 568.8 $ $ 547.2 $ (592...

  • Page 99
    ...tax asset: Inventory obsolescence reserve...Deferred rents ...Stock-based compensation ...Net operating losses ...Customer liabilities ...Property and equipment ...Foreign tax credit carryover ...Other...Total deferred tax assets ...Valuation allowance...Total deferred tax assets, net...Deferred tax...

  • Page 100
    ... issued under the 2001 Incentive Plan. Stock Options We record stock-based compensation expense in earnings based on the grant-date fair value of options granted. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. This valuation model...

  • Page 101
    ... 2014 Volatility...Risk-free interest rate ...Expected life (years)...Expected dividend yield ... 46.4% 1.0% 5.6 4.3% In addition to recognizing the estimated fair value of stock-based compensation in earnings over the required service period, we are also required to present tax benefits received...

  • Page 102
    ... per common share with fair value being determined by the quoted market price of our common stock on the date of grant. Of these shares, 783 thousand shares of restricted stock were granted under the 2011 Incentive Plan, which vest in equal annual installments over three years. At the same time, an...

  • Page 103
    ..., PlayStation Plus and Nintendo network points and subscription cards, other prepaid digital currencies and time cards, Kongregate, Game Informer digital subscriptions and PC digital downloads; Mobile and Consumer Electronics, which includes revenues from selling new and pre-owned mobile devices and...

  • Page 104
    ... Gross Profit Gross Profit Percent 52 Weeks Ended January 28, 2012 Gross Profit Gross Profit Percent Gross Profit: New video game hardware...$ New video game software...Pre-owned and value video game products...Video game accessories ...Digital ...Mobile and consumer electronics ...Other ...Total...

  • Page 105
    ... includes significant retail operations with all Video Game Brands stores engaged in the sale of new and pre-owned video game systems and software and related accessories and Technology Brand stores engaged in the sale of consumer electronics and wireless products and services. Segment results...

  • Page 106
    ... 28, 2012 United States Canada Australia Europe Technology Brands Consolidated Net sales...Segment operating earnings ...Interest income ...Interest expense ...Debt extinguishment expense...Earnings before income taxes...Other Information: Goodwill ...Other long-lived assets ...Total assets...

  • Page 107
    ... current exercise price, a number of shares of common stock having a market value of twice the exercise price of the Right. In addition, if we are acquired in a merger or other business combination transaction or 50% or more of our consolidated assets or earning power are sold at any time after the...

  • Page 108
    ...with changes in accounting estimates primarily related to our loyalty programs and other customer liabilities. (3) Basic net income (loss) per common share and diluted net income (loss) per common share are calculated based on net income (loss) attributable to GameStop Corp. for the quarter. The sum...

  • Page 109
    ... Credit Agreement, dated as of January 4, 2011, among GameStop Corp., as Lead Borrower for: GameStop Corp., GameStop, Inc., Sunrise Publications, Inc., Electronics Boutique Holdings Corp., ELBO Inc., EB International Holdings, Inc., Kongregate Inc., GameStop Texas Ltd., Marketing Control Services...

  • Page 110
    ...Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (20) Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (20) Certification of...

  • Page 111
    ... the Securities and Exchange Commission on June 27, 2013. (11) 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. (12) Incorporated by reference to GameStop Holdings...

  • Page 112
    ...EB Games, Electronics Boutique, Game Informer magazine, Micromania, Kongregate.com, Spring Mobile, Simply Mac, Spawn Labs, PowerUp Rewards 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...

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