GameStop 2014 Annual Report Download - page 22

Technology Brands acquisition activity. In connection with the continued expansion of our Technology Brands business,
Spring Mobile and Simply Mac completed acquisitions of additional AT&T resellers and authorized Apple retailers for total
consideration of $93.3 million ($89.7 million net of cash acquired) in fiscal 2014.
Divestitureactivity. In October 2014, we entered into asale and purchase agreement to transfer certain retail locations and
most of the inventory owned by our Spain subsidiary,GameStop Iberia, to alocal video game specialty retailer.Wemade the
decision to exit these operations, which were part of our Europe segment, due to continued operating losses and limited market
share. As aresultofthe divestiture, we recorded anet pre-taxlossincontinuing operations of $14.8 million during fiscal 2014,
primarily related to inventory write-downs, involuntary termination benefits and lease obligations, of which $7.1 million was
recorded in cost of sales and $7.7 million was recorded in selling, general and administrative expenses in our consolidated statements
of operations.
Return of Capital
In an effort to continue our commitment to drive long-term shareholder value, we have accomplished the following initiatives
in fiscal 2014 and thus far in the 52 weeks ending January 30, 2016 (“fiscal 2015”).
Quarterly cash dividend. In fiscal 2014, we paid dividends of $1.32 per share of ClassACommonStock, totaling approximately
$148.8 million for the year.OnMarch 3, 2015, our Board of Directors authorized an increase in our annual cash dividend from
$1.32 to $1.44 per share of Class ACommonStock, which represents an increase of 9%. Additionally,onMarch 3, 2015, we
declared our first quarterly dividend of fiscal 2015 of $0.36 per share of Class ACommonStock, payable on March 24, 2015 to
stockholders of record on March 17, 2015.
Sharerepurchase activity. In fiscal 2014, we repurchased 8.4 million shares of our Class ACommonStock at an average
price per share of $39.50 for atotal of $333.4 million. On November 11,2014, ourBoard of Directors authorized $500.0 million
of funds to be used to repurchase shares of our Class ACommonStock, replacing the $176.4 million remaining under our previous
authorization. Between February 1and March 19, 2015, we repurchased an additional 0.5 million shares of our Class ACommon
Stock for an average price per share of $38.26.
OurReportable Segments
We operate our business in four VideoGame Brands segments: United States, Canada, Australia and Europe; and aTechnology
Brands segment. The VideoGame Brands segments include 6,206 stores, 4,138 of which are included in the United States segment.
There are 331, 421, and 1,316 stores in the Canadian, Australian and European segments, respectively.Eachofthe VideoGame
Brands segments consists primarily of retail operations, with all stores engaged in the sale of new and pre-owned video game
systems, software and accessories, which we refer to as video game products. Our VideoGame Brands stores sell various types
of digital products, including downloadable content, network points cards, prepaid digital, online timecards and digitally
downloadable software. They may also carry mobile and consumer electronics products, which consist primarily of pre-owned
mobiledevices, tablets and related accessories. Our buy-sell-trade program creates auniquevalue proposition to our customers
by providing them with an opportunity to trade in their pre-owned video game and consumer electronics products for store credits
and apply those credits towards other merchandise, which in turn, increases sales. The products in our VideoGames Brands
segmentsare substantially the same regardless of geographic location, with the primary differences in merchandise carried being
the timing of release of new products in the various geographies, language translations and the timing of roll-outs of newly
developed technology enabling the sale of new digital products. Stores in all VideoGames Brands segments are similar in size at
an average of approximately 1,400 square feet.
Results for the VideoGames Brands United States segment include retail operations in the 50 states, the District of Columbia,
Guam and Puerto Rico; the electronic commerce website www.gamestop.com; Game Informer magazine; and Kongregate, our
leading web and mobile gaming platform. Segment results for Canada include retail and e-commerce operations in stores throughout
Canada and segment results for Australia include retail and e-commerce operations in Australia and New Zealand. Segment results
for Europe include retail store operations in 10 European countries and e-commerce sites in five countries.
Our Technology Brands segment includes our Spring Mobile and Simply Mac businesses. Spring Mobile sells post-paidAT&T
services and wireless products through its 361 AT &T branded stores, as well as related accessories and other consumer electronics
products. Spring Mobile also sells pre-paid AT&T services, wireless devices and related accessories through its 63 Cricket-branded
stores. Simply Mac operates 60 stores which sell Apple products, including desktop computers, laptops, tablets and smart phones
and related accessories and other consumer electronics products. As an authorized Apple reseller,Simply Mac also offers certified
training, warranty and repair services to its customers.
Additional information, including financial information, regarding our reportable segments can be found in “Part II -Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K and in Note 17,
"Segment Information," to our consolidated financial statements.
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