GameStop (GME) 10-Q 9 Sep 09 2010 Q2 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data	6 Months Ended Aug. 01, 2009	Aug. 28, 2009	Aug. 02, 2008
Document And Company Information [Abstract]
Entity Registrant Name	GameStop Corp.
Entity Central Index Key	0001326380
Document Type	10-Q
Document Period End Date	2009-08-01
Amendment Flag	false
Current Fiscal Year End Date	--01-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			6.2
Entity Common Stock, Shares Outstanding		164,676,215

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Thousands	Aug. 01, 2009	Jan. 31, 2009	Aug. 02, 2008
Current assets:
Cash and cash equivalents	$197,856	$578,141	$539,898
Receivables, net	40,119	65,981	60,966
Merchandise inventories, net	1,099,325	1,075,792	970,057
Deferred income taxes - current	22,137	23,615	26,893
Prepaid taxes	7,140	0	58,689
Prepaid expenses	64,450	59,101	64,048
Other current assets	13,308	15,411	4,422
Total current assets	1,444,335	1,818,041	1,724,973
Property and equipment:
Land	11,590	10,397	12,033
Buildings and leasehold improvements	504,595	454,651	414,896
Fixtures and equipment	675,168	619,845	583,734
Total property and equipment	1,191,353	1,084,893	1,010,663
Less accumulated depreciation and amortization	612,197	535,639	485,665
Net property and equipment	579,156	549,254	524,998
Goodwill, net	1,914,979	1,862,107	1,447,572
Other intangible assets	273,269	247,790	15,405
Deferred taxes	0	0	31,863
Other noncurrent assets	37,198	35,398	27,586
Total noncurrent assets	2,804,602	2,694,549	2,047,424
Total assets	4,248,937	4,512,590	3,772,397
Current liabilities:
Accounts payable	615,364	1,047,963	692,098
Accrued liabilities	480,287	498,253	389,009
Taxes payable	0	16,495	0
Total current liabilities	1,095,651	1,562,711	1,081,107
Senior notes payable, long-term portion, net	495,807	545,712	545,220
Other long-term liabilities	113,493	104,486	82,299
Total long-term liabilities	609,300	650,198	627,519
Total liabilities	1,704,951	2,212,909	1,708,626
Stockholders' equity:
Preferred stock - authorized 5,000 shares; no shares issued or outstanding	0	0	0
Class A common stock - $.001 par value; authorized 300,000 shares; 164,661, 163,843 and 163,653 shares issued and outstanding, respectively	165	164	164
Additional paid-in-capital	1,325,492	1,307,453	1,288,727
Accumulated other comprehensive income (loss)	88,721	(28,426)	33,384
Retained earnings	1,129,608	1,020,490	741,496
Total stockholders' equity	2,543,986	2,299,681	2,063,771
Total liabilities and stockholders' equity	$4,248,937	$4,512,590	$3,772,397

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Share data in Thousands	Aug. 01, 2009	Jan. 31, 2009	Aug. 02, 2008
Preferred stock- shares authorized	5,000	5,000	5,000
Preferred stock- shares issued	0	0	0
Preferred stock- shares outstanding	0	0	0
Common stock- par value	0.001	0.001	0.001
Common stock- shares authorized	300,000	300,000	300,000
Common stock- shares issued	164,661	163,843	163,653
Common stock- shares outstanding	164,661	163,843	163,653

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data	3 Months Ended Aug. 01, 2009	3 Months Ended Aug. 02, 2008	6 Months Ended Aug. 01, 2009	6 Months Ended Aug. 02, 2008
Sales	$1,738,504	$1,804,420	$3,719,257	$3,618,037
Cost of sales	1,243,098	1,320,297	2,681,738	2,660,508
Gross profit	495,406	484,123	1,037,519	957,529
Selling, general and administrative expenses	384,773	347,745	760,605	676,412
Depreciation and amortization	39,677	36,309	77,504	71,145
Operating earnings	70,956	100,069	199,410	209,972
Interest income	(462)	(1,628)	(979)	(6,570)
Interest expense	11,737	10,839	23,935	24,269
Debt extinguishment expense	0	0	2,862	2,331
Earnings before income tax expense	59,681	90,858	173,592	189,942
Income tax expense	20,996	33,695	64,474	70,654
Net earnings	$38,685	$57,163	$109,118	$119,288
Net earnings per common share-basic	0.23	0.35	0.66	0.73
Weighted average shares of common stock-basic	164,636	163,390	164,555	162,607
Net earnings per common share-diluted	0.23	0.34	0.65	0.71
Weighted average shares of common stock-diluted	167,857	168,067	167,915	167,722

2_Condensed Consolidated Statem

Condensed Consolidated Statement of Stockholders Equity (USD $)
In Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total
Beginning Balance, Shares at Jan. 31, 2009	163,843
Beginning Balance at Jan. 31, 2009	$164	$1,307,453	$1,020,490	($28,426)	$2,299,681
Comprehensive income:
Net earnings for the 26 weeks ended August 1, 2009			109,118		109,118
Foreign currency translation				117,147	117,147
Stock-based compensation		15,251			15,251
Exercise of stock options and issuance of shares upon vesting of restricted stock grants (including tax expense of $306)	1	2,788			2,789
Exercise of stock options and issuance of shares upon vesting of restricted stock grants, shares	818
Ending Balance at Aug. 01, 2009	$165	$1,325,492	$1,129,608	$88,721	$2,543,986
Ending Balance, Shares at Aug. 01, 2009	164,661

3_Condensed Consolidated Statem

Condensed Consolidated Statement of Stockholders Equity (Parenthetical) (Additional Paid-in Capital, USD $)
In Thousands	Total
Tax expense for Exercise of stock options and issuance of shares upon vesting of restricted stock grants	$306

4_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands	6 Months Ended Aug. 01, 2009	6 Months Ended Aug. 02, 2008
Cash flows from operating activities:
Net earnings	$109,118	$119,288
Adjustments to reconcile net earnings to net cash flows used in operating activities:
Depreciation and amortization (including amounts in cost of sales)	78,294	71,802
Amortization and retirement of deferred financing fees and issue discounts	2,639	2,051
Stock-based compensation expense	15,251	20,068
Deferred income taxes	(1,532)	(3,235)
Excess tax (benefits) expense realized from exercise of stock-based awards	346	(33,010)
Loss on disposal of property and equipment	3,225	2,634
Changes in other long-term liabilities	8,198	6,152
Change in the value of foreign exchange contracts	14,728	(1,035)
Changes in operating assets and liabilities, net
Receivables, net	28,647	(3,829)
Merchandise inventories	42,566	(152,817)
Prepaid expenses and other current assets	(3,015)	(13,235)
Prepaid income taxes and accrued income taxes payable	(24,666)	(31,693)
Accounts payable and accrued liabilities	(534,604)	(193,340)
Net cash flows used in operating activities	(260,805)	(210,199)
Cash flows from investing activities:
Purchase of property and equipment	(76,878)	(81,540)
Acquisitions, net of cash acquired	(4,667)	(50,299)
Net cash flows used in investing activities	(81,545)	(131,839)
Cash flows from financing activities:
Repurchase of notes payable	(50,765)	(30,000)
Borrowings from the revolver	100,000	0
Repayments of revolver borrowings	(100,000)	0
Issuance of shares relating to stock options	3,096	26,738
Excess tax benefits (expense) realized from exercise of stock-based awards	(346)	33,010
Net change in other noncurrent assets and other intangible assets	(10,417)	(5,219)
Net cash flows provided by (used in) financing activities	(58,432)	24,529
Exchange rate effect on cash and cash equivalents	20,497	(7)
Net decrease in cash and cash equivalents	(380,285)	(317,516)
Cash and cash equivalents at beginning of period	578,141	857,414
Cash and cash equivalents at end of period	$197,856	$539,898

Basis of Presentation

Basis of Presentation
	6 Months Ended Aug. 01, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	1. Basis of Presentation GameStop Corp. (together with its predecessor companies, GameStop, we, our, or the Company), a Delaware corporation, is the worlds largest retailer of video games and entertainment software. The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar and share amounts in the consolidated financial statements and notes to the consolidated financial statements are stated in thousands of U.S.dollars unless otherwise indicated. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting only of normal, recurring adjustments) which are, in the opinion of the Companys management, necessary for a fair presentation of the information for the periods presented. These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and do not include all disclosures required under GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Companys annual report on Form10-K for the 52weeks ended January31, 2009 (fiscal2008). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. Changes in the estimates and assumptions used by management could have significant impact on the Companys financial results. Actual results could differ from those estimates. Due to the seasonal nature of the business, the results of operations for the 26weeks ended August1, 2009 are not indicative of the results to be expected for the 52weeks ending January30, 2010 (fiscal 2009). Certain reclassifications have been made to conform the prior period data to the current interim period presentation. The Company has evaluated subsequent events through September9, 2009, the date of the issuance of the unaudited condensed consolidated financial statements.

New Accounting Pronouncements

New Accounting Pronouncements
	6 Months Ended Aug. 01, 2009 USD / shares
New Accounting Pronouncements [Abstract]
New Accounting Pronouncements	2. New Accounting Pronouncements In May 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No.165, Subsequent Events (SFAS165), which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS165 is effective for fiscal years and interim periods ending after June15, 2009 and is applied prospectively. The Company adopted the new disclosure requirements in the unaudited condensed consolidated financial statements effective August1, 2009. In April 2009, the FASB issued FASB Staff Position No.FAS107-1 and Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair Value of Financial Instruments (FSP107-1). FSP107-1 requires additional disclosures about fair value of financial instruments for interim reporting periods and amends APB Opinion No.28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods for publicly traded companies. FSP107-1 was effective for the Company for the period ended August1, 2009. Effective on February1, 2009, we adopted Statement of Financial Accounting Standards No.161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No.133 (SFAS161). SFAS161 requires certain disclosures about the gains and losses associated with derivative instruments and hedging activities, the location of such gains and losses in the financial statements, and a description of related trading activities and their risks. The Company uses forward exchange contracts, foreign currency options and cross-currency swaps (together, the Foreign Currency Contracts) to manage currency risk primarily related to intercompany loans denominated in non-functional currencies and certain foreign currency assets and liabilities. These Foreign Currency Contracts are not designated as hedges and, therefore, changes in the fair values of these derivatives are recognized in earnings, thereby offsetting the current earnings effect of the re-measurement of related intercompany loans and foreign currency assets and liabilities. 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. The Company manages counterparty risk according to the guidelines and controls established under comprehensive risk management and investment policies. We continuously monitor our counterparty credit risk and utilize a number of different counterparties to minimize our exposure to potential defaults. We do not require collateral under derivative or investment agreements. The fair values of derivative instruments not receiving hedge accounting treatment in the condensed consolidated balance sheets presented herein were as follows: August1, 2009 August2, 2008 January31, 2009 (In thousands) Assets Foreign Currency

Business Combinations and Goodw

Business Combinations and Goodwill
	6 Months Ended Aug. 01, 2009 USD / shares
Business Combinations and Goodwill [Abstract]
Business Combinations and Goodwill	3. Business Combinations and Goodwill On November17, 2008, GameStop France SAS, a wholly-owned subsidiary of the Company, completed the acquisition of substantially all of the outstanding capital stock of Micromania for $580,407, net of cash acquired. Micromania is a leading retailer of video and computer games in France with 348 locations, 328 of which were operating on the date of the acquisition. The purpose of the acquisition was to expand the Companys presence in Europe. The condensed consolidated financial statements include the results of Micromania from the date of acquisition and are reported in the European segment. The purchase price has been allocated based on estimated fair values as of the acquisition date. The purchase price was allocated as follows: November17, 2008 (In thousands) Current assets $ 187,661 Property, plant equipment 34,164 Goodwill 412,325 Intangible assets: Tradename 131,560 Leasehold rights and interests 103,955 Total intangible assets 235,515 Other long-term assets 7,786 Current liabilities (220,237 ) Long-term liabilities (76,807 ) Total purchase price $ 580,407 The purchase price allocation has been prepared on a preliminary basis based on the information that was available to the Company at the time the condensed consolidated financial statements were prepared, and revisions to the preliminary purchase price allocation may result as additional information becomes available. In determining the purchase price allocation, management considered, among other factors, the Companys intention to use the acquired assets. The total weighted-average amortization period for the intangible assets, excluding goodwill and the Micromania tradename, is approximately ten years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized, with no expected residual value. None of the goodwill is deductible for income tax purposes. On April5, 2008, the Company purchased all the outstanding stock of Free Record Shop Norway AS, a Norwegian private limited liability company (FRS), for $21,006, net of cash acquired. An initial payment of $16,995 was made in the first quarter of fiscal 2008, with the remaining balance paid in the second quarter of fiscal 2008. FRS operated 49 record stores in Norway. The Company has converted the FRS stores into video game stores with an inventory assortment similar to its other stores in Norway. The acquisition was accounted for using the purchase method of accounting, with the excess of the purchase price over the net assets acquired, in the amount of $17,981, recorded as goodwill. The Company has included the results of operations of FRS, which were not material, in its financial statements beginning on the closing date of the acquisition on April5, 2008. In 2003, the Company purchased a 51% controlling interest in GameStop Group Limited, which o

Accounting for Stock Based Comp

Accounting for Stock Based Compensation
	6 Months Ended Aug. 01, 2009 USD / shares
Accounting for Stock Based Compensation [Abstract]
Accounting for Stock Based Compensation	4. Accounting for Stock-Based Compensation The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. This valuation model requires the use of subjective assumptions, including expected option life, expected volatility and the expected employee forfeiture rate. The Company uses historical data to estimate the option life and the employee forfeiture rate, and uses historical volatility when estimating the stock price volatility. There were no options to purchase common stock granted during the 13weeks ended August1, 2009 and August2, 2008. The options to purchase common stock granted during the 26weeks ended August1, 2009 and August2, 2008 were 1,419 and 1,362, respectively, with a weighted-average fair value estimated at $9.45 and $15.45 per share, respectively, using the following assumptions: 26 Weeks Ended August1, August2, 2009 2008 Volatility 47.9 % 38.2 % Risk-free interest rate 1.5 % 2.4 % Expected life (years) 3.5 3.5 Expected dividend yield 0 % 0 % In the 13weeks ended August1, 2009 and August2, 2008, the Company included compensation expense relating to stock option grants of $3,030 and $3,998, respectively, in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. In the 26weeks ended August1, 2009 and August2, 2008, the Company included compensation expense relating to stock option grants of $5,442 and $8,818, respectively, in selling, general and administrative expenses. As of August1, 2009, the unrecognized compensation expense related to the unvested portion of our stock options was $19,392 which is expected to be recognized over a weighted average period of 2.0years. The total intrinsic value of options exercised during the 13weeks ended August1, 2009 and August2, 2008 were $529 and $10,584, respectively. The total intrinsic value of options exercised during the 26weeks ended August1, 2009 and August2, 2008 were $2,727 and $83,745, respectively. There were no restricted stock shares granted during the 13weeks ended August1, 2009 and August2, 2008. During the 26weeks ended August1, 2009 and August2, 2008, the Company granted 571shares and 534shares, respectively, of restricted stock. The shares had a fair market value of $26.02 and $49.95 per share, respectively, and vest in equal annual installments over three years. During the 13weeks ended August1, 2009 and August2, 2008, the Company included compensation expense relating to the restricted share grants in the amount of $4,884 and $4,304, respectively, in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. During the 26weeks ended August1, 2009 and August2, 2008, the Company included compensation expense relating to the restricted share grants in the amount of $9,808 and $11,251, respectively, in selling, general and administrative expenses. As of August1, 2009, there was $28,487 of unrecognized compe

Computation of Net Earnings Per

Computation of Net Earnings Per Common Share
	6 Months Ended Aug. 01, 2009 USD / shares
Computation of Net Earnings Per Common Share [Abstract]
Computation of Net Earnings Per Common Share	5. Computation of Net Earnings per Common Share The Company has ClassA common stock outstanding and computes earnings per share in accordance with Statement of Financial Accounting Standards No.128, Earnings per Share. A reconciliation of shares used in calculating basic and diluted net earnings per common share follows: 13 Weeks Ended 26 Weeks Ended August1, August2, August1, August2, 2009 2008 2009 2008 (In thousands, except per share data) Net earnings $ 38,685 $ 57,163 $ 109,118 $ 119,288 Weighted average common shares outstanding 164,636 163,390 164,555 162,607 Dilutive effect of options and restricted shares on common stock 3,221 4,677 3,360 5,115 Common shares and dilutive potential common shares 167,857 168,067 167,915 167,722 Net earnings per common share: Basic $ 0.23 $ 0.35 $ 0.66 $ 0.73 Diluted $ 0.23 $ 0.34 $ 0.65 $ 0.71 The following table contains information on restricted shares and options to purchase shares of ClassA common stock which were excluded from the computation of diluted earnings per share because they were anti-dilutive: Anti- Range of Dilutive Exercise Expiration Shares Prices Dates (In thousands, except per share data) 13 Weeks Ended August1, 2009 3,654 $ 26.02 - 49.95 2010 - 2019 13 Weeks Ended August2, 2008 1,362 $ 49.95 2018

Debt

Debt
	6 Months Ended Aug. 01, 2009 USD / shares
Debt [Abstract]
Debt	6. Debt In October 2005, the Company entered into a five-year, $400,000 Credit Agreement (the Revolver), including a $50,000 letter of credit sub-limit, secured by the assets of the Company and its U.S.subsidiaries. The Revolver places certain restrictions on the Company and its subsidiaries, including limitations on asset sales, additional liens and the incurrence of additional indebtedness. In April 2007, the Company amended the Revolver to extend the maturity date from October11, 2010 to April25, 2012, reduce the LIBO interest rate margin, reduce and fix the rate of the unused commitment fee and modify or delete certain other covenants. The extension of the Revolver to 2012 reduces our exposure to the current tightening in the credit markets. The availability under the Revolver is limited to a borrowing base which allows the Company to borrow up to the lesser of (x)approximately 70% of eligible inventory and (y)90% of the appraisal value of the inventory, in each case plus 85% of eligible credit card receivables, net of certain reserves. Letters of credit reduce the amount available to borrow by their face value. The Companys ability to pay cash dividends, redeem options and repurchase shares is generally prohibited, except that if availability under the Revolver is, or will be after any such payment, equal to or greater than 25% of the borrowing base, the Company may repurchase its capital stock and pay cash dividends. In addition, in the event that credit extensions under the Revolver at any time exceed 80% of the lesser of the total commitment or the borrowing base, the Company will be subject to a fixed charge coverage ratio covenant of 1.5:1.0. The per annum interest rate on the Revolver is variable and, at the Companys option, is calculated by applying a margin of (1)0.0% to 0.25% above the higher of the prime rate of the administrative agent or the federal funds effective rate plus 0.50% or (2)1.00% to 1.50% above the LIBO rate. The applicable margin is determined quarterly as a function of the Companys consolidated leverage ratio. As of August1, 2009, the applicable margin was 0.0% for prime rate loans and 1.00% for LIBO rate loans. In addition, the Company is required to pay a commitment fee of 0.25% for any unused portion of the total commitment under the Revolver. During the 13weeks ended August1, 2009, the Company borrowed and repaid $100,000 under the Revolver. As of August1, 2009, there were no borrowings outstanding under the Revolver and letters of credit outstanding totaled $8,271. In September 2007, the Companys Luxembourg subsidiary entered into a discretionary $20,000 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 will be made available to the Companys 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 August1, 2009, there were $287 of cash overdrafts outstanding under the Line of Cr

Comprehensive Income

Comprehensive Income
	6 Months Ended Aug. 01, 2009 USD / shares
Comprehensive Income [Abstract]
Comprehensive Income	7. Comprehensive Income Comprehensive income is net earnings, plus certain other items that are recorded directly to stockholders equity and consists of the following: 13 Weeks Ended 26 Weeks Ended August1, August2, August1, August2, 2009 2008 2009 2008 (In thousands) Net earnings $ 38,685 $ 57,163 $ 109,118 $ 119,288 Other comprehensive income: Foreign currency translation adjustments 75,124 (1,453 ) 117,147 1,781 Total comprehensive income $ 113,809 $ 55,710 $ 226,265 $ 121,069

Income Taxes

Income Taxes
	6 Months Ended Aug. 01, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	8. Income Taxes The Company and its subsidiaries file income tax returns in the U.S.federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to U.S.federal income tax examination by tax authorities for years before and including the fiscal year ended January31, 2004. The Internal Revenue Service (IRS) completed examination of the Companys U.S.income tax returns for the fiscal years ended January29, 2005 and January28, 2006 during fiscal 2008. The Company did not record any material adjustments to its condensed consolidated financial statements as a result of these audits. Our effective tax rates for the 13weeks ended August1, 2009 and August2, 2008 include $2,423 and $436 of net tax expense, respectively, related to amounts recorded for changes in our uncertain tax positions, including interest and penalties. Our effective tax rates for the 26weeks ended August1, 2009 and August2, 2008 include $6,400 and $493, respectively, of net tax expense related to amounts recorded for changes in our uncertain tax positions, including interest and penalties. The components of the net change in uncertain tax positions were individually insignificant. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions could significantly increase or decrease within the next 12months as a result of settlements of ongoing audits and statutes of limitations expiring. At this time, an estimate of the range of the reasonably possible outcomes cannot be made. The tax provisions for the 13weeks and 26weeks ended August1, 2009 and August2, 2008 are based upon managements estimate of the Companys annualized effective tax rate.

Certain Relationships and Relat

Certain Relationships and Related Transactions
	6 Months Ended Aug. 01, 2009 USD / shares
Certain Relationships and Related Transactions [Abstract]
Certain Relationships and Related Transactions	9. Certain Relationships and Related Transactions The Company operates departments within eight bookstores operated by Barnes Noble, Inc. (Barnes Noble), a related party through a common stockholder who is the Chairman of the Board of Directors of Barnes Noble and a member of the Companys Board of Directors. The Company pays a license fee to Barnes Noble on the gross sales of such departments. The Company deems the license fee to be reasonable and based upon terms equivalent to those that would prevail in an arms length transaction. During the 13weeks ended August1, 2009 and August2, 2008, these charges amounted to $210 and $290, respectively. During the 26weeks ended August1, 2009 and August2, 2008, these charges amounted to $460 and $584, respectively. In May 2005, the Company entered into an arrangement with Barnes Noble under which www.gamestop.com became the exclusive specialty video game retailer listed on www.bn.com, Barnes Nobles e-commerce site. Under the terms of this agreement, the Company pays a fee to Barnes Noble for sales of video game or PC entertainment products sold through www.bn.com. The fee to Barnes Noble was $38 and $72 for the 13weeks ended August1, 2009 and August2, 2008, respectively, and $120 and $143 for the 26weeks ended August1, 2009 and August2, 2008, respectively. Until June 2005, GameStop participated in Barnes Nobles workers compensation, property and general liability insurance programs. The costs incurred by Barnes Noble under these programs were allocated to GameStop based upon total payroll expense, property and equipment, and insurance claim history of GameStop. Although GameStop secured its own insurance coverage, costs will likely continue to be incurred by Barnes Noble on insurance claims which were incurred under its programs prior to June 2005 and any such costs applicable to insurance claims against GameStop will be allocated to the Company. During the 13weeks ended August1, 2009 and August2, 2008, these allocated charges amounted to $43 and $31, respectively. During the 26weeks ended August1, 2009 and August2, 2008, these allocated charges amounted to $105 and $104, respectively.

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Aug. 01, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	10. Commitments and Contingencies On February14, 2005, and as amended, Steve Strickland, as personal representative of the Estate of ArnoldStrickland, deceased, Henry Mealer, as personal representative of the Estate of Ace Mealer, deceased, and Willie Crump, as personal representative of the Estate of James Crump, deceased, filed a wrongful death lawsuit against GameStop, Sony, Take-Two Interactive, Rock Star Games and Wal-Mart (collectively, the Defendants) and Devin Moore, alleging that Defendants actions in designing, manufacturing, marketing and supplying Defendant Moore with violent video games were negligent and contributed to Defendant Moore killing ArnoldStrickland, Ace Mealer and James Crump. Moore was found guilty of capital murder in a criminal trial and was sentenced to death in August 2005. Plaintiffs counsel named an expert, a psychologist who testified at the criminal trial on behalf of the criminal defendant, who plaintiffs indicated would testify that violent video games were a substantial factor in causing the murders. This same testimony from this same expert was excluded in the criminal trial from the same judge hearing this case. The testimony of plaintiffs psychologist expert was heard by the Court on October30, 2008, and the motion to exclude that testimony was argued on December12, 2008. On July30, 2009, the trial court entered its Order granting summary judgment for all defendants, dismissing the case with prejudice on the grounds that plaintiffs experts testimony did not satisfy the Frye standard for expert admissibility. Subsequent to the entry of the Order, the plaintiffs filed a notice of appeal. The Company does not believe there is sufficient information to estimate the amount of the possible loss, if any, resulting from the lawsuit if the plaintiffs appeal is successful. In the ordinary course of the Companys business, the Company is, from time to time, subject to various other legal proceedings. Management does not believe that any such other legal proceedings, individually or in the aggregate, will have a material adverse effect on the Companys financial condition, results of operations or liquidity. In 2003, the Company purchased a 51% controlling interest in GameStop Group Limited, which operates stores in Ireland and the United Kingdom. Under the terms of the purchase agreement, the minority interest owners of the remaining 49% have the ability to require the Company to purchase their remaining shares in incremental percentages at a price to be determined based partially on the Companys price to earnings ratio and GameStop Group Limiteds earnings. Shares representing approximately 16% were purchased in June 2008 for $27,383 and in July 2009 an additional 16% was purchased for $4,667, bringing the Companys total interest in GameStop Group Limited to approximately 84%. The Company already consolidates the results of GameStop Group Limited; therefore, any additional amounts acquired will not have a material effect on the Companys financial statements.

Significant Product Information

Significant Product Information
	6 Months Ended Aug. 01, 2009 USD / shares
Significant Product Information [Abstract]
Significant Product Information	11. Significant Product Information The Company is principally engaged in the sale of new and used video game systems and software, personal computer entertainment software and related accessories. The following table sets forth sales (in millions) by significant product category for the periods indicated: 13 Weeks Ended 26 Weeks Ended August1, August2, August1, August2, 2009 2008 2009 2008 Percent Percent Percent Percent Sales of Total Sales of Total Sales of Total Sales of Total (Unaudited) Sales: New video game hardware $ 301.3 17.3 % $ 379.7 21.0 % $ 697.2 18.7 % $ 718.7 19.9 % New video game software 629.8 36.2 % 705.0 39.1 % 1,400.3 37.7 % 1,497.8 41.4 % Used video game products 560.8 32.3 % 471.5 26.1 % 1,109.3 29.8 % 887.2 24.5 % Other 246.6 14.2 % 248.2 13.8 % 512.5 13.8 % 514.3 14.2 % Total $ 1,738.5 100.0 % $ 1,804.4 100.0 % $ 3,719.3 100.0 % $ 3,618.0 100.0 % Other products include PC entertainment and other software, accessories and magazines. The following table sets forth gross profit (in millions) and gross profit percentages by significant product category for the periods indicated: 13 Weeks Ended 26 Weeks Ended August1, August2, August1, August2, 2009 2008 2009 2008 Gross Gross Gross Gross Gross Profit Gross Profit Gross Profit Gross Profit Profit Percent Profit Percent Profit Percent Profit Percent (Unaudited) Gross Profit: New video game hardware $ 21.6 7.2 % $ 22.6 6.0 % $ 45.7 6.6 % $ 43.0 6.0 % New video game software 133.6 21.2 % 145.3 20.6 % 299.1 21.4 % 301.9 20.2 % Used video game products 256.9 45.8 % 234.1 49.7

Segment Information

Segment Information
	6 Months Ended Aug. 01, 2009 USD / shares
Segment Information [Abstract]
Segment Information	12. Segment Information The Company operates its business in the following segments: United States, Canada, Australia and Europe. Segment results for the United States include retail operations in 50states, the District of Columbia, Guam and Puerto Rico, the electronic commerce Web site www.gamestop.com and Game Informer magazine. Segment results for Canada include retail operations in Canada and segment results for Australia include retail operations in Australia and New Zealand. Segment results for Europe include retail operations in 13 European countries. The fiscal 2009 results of the European segment include Micromanias results. The Company measures segment profit using operating earnings which is defined as income from continuing operations before intercompany royalty fees, net interest expense and income taxes. The basis of segmentation and the measurement of segment profit or loss have not changed since the end of fiscal 2008 and there has been no material change in total assets by segment since January31, 2009. Transactions between reportable segments consist primarily of royalties, management fees, intersegment loans and related interest. Information on segments appears in the following tables. 13 Weeks Ended 26 Weeks Ended August1, August2, August1, August2, 2009 2008 2009 2008 (In thousands) (Unaudited) Sales by operating segment were as follows: United States $ 1,182,177 $ 1,316,912 $ 2,656,935 $ 2,694,043 Canada 90,635 114,725 187,867 243,628 Australia 122,915 147,977 214,517 251,408 Europe 342,777 224,806 659,938 428,958 Total $ 1,738,504 $ 1,804,420 $ 3,719,257 $ 3,618,037 Segment operating earnings (loss) were as follows: United States $ 63,767 $ 82,411 $ 176,313 $ 175,168 Canada 3,399 5,670 8,203 11,472 Australia 8,804 13,733 14,427 21,547 Europe (5,014 ) (1,745 ) 467 1,785 Total $ 70,956 $ 100,069 $ 199,410 $ 209,972

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	6 Months Ended Aug. 01, 2009 USD / shares
Supplemental Cash Flow Information [Abstract]
Supplemental Cash Flow Information	13. Supplemental Cash Flow Information 26 Weeks Ended August1, August2, 2009 2008 (In thousands) (Unaudited) Cash paid during the period for: Interest $ 23,414 $ 25,216 Income taxes $ 81,859 $ 103,571

Consolidating Financial Stateme

Consolidating Financial Statements
	6 Months Ended Aug. 01, 2009 USD / shares
Consolidating Financial Statements [Abstract]
Consolidating Financial Statements	14. Consolidating Financial Statements As described in Note6, on September28, 2005, the Company, along with GameStop, Inc. as co-issuer, completed the offering of the Notes. The direct and indirect U.S.wholly-owned subsidiaries of the Company, excluding GameStop, Inc., as co-issuer, have guaranteed the Notes on a senior unsecured basis with unconditional guarantees. The following condensed consolidating financial statements present the financial position as of August1, 2009, August2, 2008 and January31, 2009 and results of operations for the 13 and 26weeks ended August1, 2009 and August2, 2008 and cash flows for the 26weeks ended August1, 2009 and August2, 2008 of the Companys guarantor and non-guarantor subsidiaries. GameStop Corp. Condensed Consolidating Balance Sheet Issuers and Guarantor Non-Guarantor Subsidiaries Subsidiaries Consolidated August1, August1, August1, 2009 2009 Eliminations 2009 (Amounts in thousands, except per share amounts) (Unaudited) ASSETS: Current assets: Cash and cash equivalents $ 71,110 $ 126,746 $ $ 197,856 Receivables, net 269,377 671,834 (901,092 ) 40,119 Merchandise inventories, net 615,577 483,748 1,099,325 Deferred income taxes current 19,246 2,891 22,137 Prepaid taxes (3,122 ) 10,262 7,140 Prepaid expenses 41,555 22,895 64,450 Other current assets 1,007 12,301 13,308 Total current assets 1,014,750 1,330,677 (901,092 ) 1,444,335 Property and equipment: Land 2,670 8,920 11,590 Buildings and leasehold improvements 292,430 212,165 504,595 Fixtures and equipment 539,222 135,946 675,168 Total property and equipment 834,322 357,031 1,191,353 Less accumulated depreciation and amortization 472,896 139,301 612,197 Net property and equipment 361,426 217,730 579,156 Investment 1,988,773 (1,988,773 ) Goodwill, net 1,096,622 818,357 1,914,979 Other intangible assets 273,269 273,269 Other noncurrent assets 16,272 20,926 37,198

Subsequent Events

Subsequent Events
	6 Months Ended Aug. 01, 2009 USD / shares
Subsequent Events [Abstract]
Subsequent Events	15. Subsequent Events Subsequent to August1, 2009, the Company purchased $17,253 of outstanding Notes under the previously announced buyback.