GameStop (GME) 10-Q 9 Dec 09 2010 Q3 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data	9 Months Ended Oct. 31, 2009	Nov. 27, 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	2009-10-31
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		164,767,330

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Thousands	Oct. 31, 2009	Jan. 31, 2009	Nov. 01, 2008
Current assets:
Cash and cash equivalents	$292,027	$578,141	$478,056
Receivables, net	52,543	65,981	50,730
Merchandise inventories, net	1,733,962	1,075,792	1,424,249
Deferred income taxes - current	24,503	23,615	29,200
Prepaid taxes	13,073	0	68,222
Prepaid expenses	61,514	59,101	56,759
Other current assets	16,472	15,411	45,690
Total current assets	2,194,094	1,818,041	2,152,906
Property and equipment:
Land	11,819	10,397	10,229
Buildings and leasehold improvements	516,492	454,651	404,660
Fixtures and equipment	692,660	619,845	590,565
Total property and equipment	1,220,971	1,084,893	1,005,454
Less accumulated depreciation and amortization	629,276	535,639	502,348
Net property and equipment	591,695	549,254	503,106
Goodwill, net	1,931,672	1,862,107	1,443,782
Other intangible assets	279,567	247,790	13,388
Deferred taxes	0	0	28,681
Other noncurrent assets	38,980	35,398	21,838
Total noncurrent assets	2,841,914	2,694,549	2,010,795
Total assets	5,036,008	4,512,590	4,163,701
Current liabilities:
Accounts payable	1,328,041	1,047,963	1,102,639
Accrued liabilities	510,296	498,253	366,147
Taxes payable	0	16,495	0
Total current liabilities	1,838,337	1,562,711	1,468,786
Senior notes payable, long-term portion, net	447,121	545,712	545,462
Other long-term liabilities	111,127	104,486	85,273
Total long-term liabilities	558,248	650,198	630,735
Total liabilities	2,396,585	2,212,909	2,099,521
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; 164,752, 163,776 and 163,843 shares issued and outstanding, respectively	165	164	164
Additional paid-in-capital	1,334,481	1,307,453	1,299,721
Accumulated other comprehensive income (loss)	122,944	(28,426)	(23,870)
Retained earnings	1,181,833	1,020,490	788,165
Total stockholders' equity	2,639,423	2,299,681	2,064,180
Total liabilities and stockholders' equity	$5,036,008	$4,512,590	$4,163,701

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Share data in Thousands	Oct. 31, 2009	Jan. 31, 2009	Nov. 01, 2008
Stockholders' equity:
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	164,752	163,843	163,776
Common stock- shares outstanding	164,752	163,843	163,776

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data	3 Months Ended Oct. 31, 2009	3 Months Ended Nov. 01, 2008	9 Months Ended Oct. 31, 2009	9 Months Ended Nov. 01, 2008
Sales	$1,834,727	$1,695,746	$5,553,984	$5,313,783
Cost of sales	1,311,643	1,222,317	3,993,381	3,882,825
Gross profit	523,084	473,429	1,560,603	1,430,958
Selling, general and administrative expenses	391,210	335,722	1,151,815	1,012,134
Depreciation and amortization	41,605	35,767	119,109	106,912
Merger-related expenses	0	16,605	0	16,605
Operating earnings	90,269	85,335	289,679	295,307
Interest income	(480)	(3,672)	(1,459)	(10,242)
Interest expense	10,946	12,479	34,881	36,748
Debt extinguishment expense	2,461	0	5,323	2,331
Earnings before income tax expense	77,342	76,528	250,934	266,470
Income tax expense	25,117	29,859	89,591	100,513
Net earnings	$52,225	$46,669	$161,343	$165,957
Net earnings per common share-basic	0.32	0.29	0.98	1.02
Weighted average shares of common stock-basic	164,702	163,736	164,604	162,983
Net earnings per common share-diluted	0.31	0.28	0.96	0.99
Weighted average shares of common stock-diluted	168,113	167,995	167,981	167,813

2_Condensed Consolidated Statem

Condensed Consolidated Statement of Stockholders Equity (Unaudited) (USD $)
In Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	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 39 weeks ended October 31, 2009			161,343		161,343
Foreign currency translation				151,370	151,370
Stock-based compensation		23,226			23,226
Exercise of stock options and issuance of shares upon vesting of restricted stock grants (including tax expense of $405)	1	3,802			3,803
Exercise of stock options and issuance of shares upon vesting of restricted stock grants, shares	909
Ending Balance at Oct. 31, 2009	$165	$1,334,481	$1,181,833	$122,944	$2,639,423
Ending Balance, Shares at Oct. 31, 2009	164,752

3_Condensed Consolidated Statem

Condensed Consolidated Statement of Stockholders Equity (Parenthetical) (Unaudited) (USD $)
In Thousands	Additional Paid-in Capital	Total
Tax expense for Exercise of stock options and issuance of shares upon vesting of restricted stock grants	$405	$405

4_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	9 Months Ended Oct. 31, 2009	9 Months Ended Nov. 01, 2008
Cash flows from operating activities:
Net earnings	$161,343	$165,957
Adjustments to reconcile net earnings to net cash flows used in operating activities:
Depreciation and amortization (including amounts in cost of sales)	120,315	107,913
Amortization and retirement of deferred financing fees and issue discounts	4,176	2,814
Stock-based compensation expense	23,226	28,433
Deferred income taxes	(5,325)	(8,285)
Excess tax (benefits) expense realized from exercise of stock-based awards	453	(33,925)
Loss on disposal of property and equipment	4,713	3,960
Changes in other long-term liabilities	6,524	10,612
Change in the value of foreign exchange contracts	2,835	(22,027)
Changes in operating assets and liabilities, net
Receivables, net	17,012	2,736
Merchandise inventories	(578,288)	(688,441)
Prepaid expenses and other current assets	478	(14,364)
Prepaid income taxes and accrued income taxes payable	(30,159)	(39,359)
Accounts payable and accrued liabilities	198,848	280,391
Net cash flows used in operating activities	(73,849)	(203,585)
Cash flows from investing activities:
Purchase of property and equipment	(122,122)	(132,758)
Acquisitions, net of cash acquired	(5,208)	(50,800)
Other	13,823	(2,429)
Net cash flows used in investing activities	(141,153)	(181,129)
Cash flows from financing activities:
Repurchase of notes payable	(100,000)	(30,000)
Borrowings from the revolver	115,000	0
Repayments of revolver borrowings	(115,000)	0
Issuance of shares relating to stock options	4,208	28,432
Excess tax benefits (expense) realized from exercise of stock-based awards	(453)	33,925
Other	(57)	(1,500)
Net cash flows provided by (used in) financing activities	(96,302)	30,857
Exchange rate effect on cash and cash equivalents	25,190	(25,501)
Net decrease in cash and cash equivalents	(286,114)	(379,358)
Cash and cash equivalents at beginning of period	578,141	857,414
Cash and cash equivalents at end of period	$292,027	$478,056

Basis of Presentation

Basis of Presentation
	9 Months Ended Oct. 31, 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 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 interim 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 the instructions to Quarterly Report on Form10-Q and Article10 of RegulationS-X. Accordingly, they do not include all disclosures required under GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the Companys annual report on Form10-K for the 52weeks ended January31, 2009 (fiscal 2008). 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 39weeks ended October31, 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 evaluated subsequent events through the time of filing this Quarterly Report on Form10-Q on December9, 2009. No significant events occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on our condensed consolidated financial statements.

New Accounting Pronouncements

New Accounting Pronouncements
	9 Months Ended Oct. 31, 2009 USD / shares
New Accounting Pronouncements [Abstract]
New Accounting Pronouncements	2. New Accounting Pronouncements In June 2009, the Financial Accounting Standards Board (FASB) codified accounting literature into a single source of authoritative principles, except for certain authoritative rules and interpretive releases issued by the Securities and Exchange Commission (SEC) which are also sources of authoritative GAAP for SEC registrants, which became effective for our Company in August 2009. Since the codification did not alter existing U.S.GAAP, it did not have an impact on our condensed consolidated financial statements. All references to pre-codified U.S.GAAP have been removed from this Form10-Q. In May 2009, the FASB issued new accounting and disclosure guidance for recognized and non-recognized subsequent events that occur after the balance sheet date but before financial statements are issued. The new guidance also requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The new guidance was effective for our Company beginning with our Quarterly Report on Form10-Q for the period ended August1, 2009, and is being applied prospectively. This change in accounting policy had no impact on our consolidated financial statements. In April 2009, the FASB issued updated accounting guidance that requires disclosures about fair value of financial instruments for interim reporting periods and requires those disclosures in summarized financial information for publicly traded companies at interim reporting periods. The updated accounting guidance was effective for the Company for the period ended August1, 2009. See Note4. In March 2008, the FASB amended existing disclosure requirements related to derivative and hedging activities, which became effective for the Company on February1, 2009 and is being applied prospectively. As a result of the amended disclosure requirements, the Company is required to provide expanded qualitative and quantitative disclosures about derivatives and hedging activities in each interim and annual period. The adoption of the new disclosure requirements had no impact on our consolidated financial statements. In December 2007, the FASB amended its guidance on accounting for business combinations. The new accounting guidance amends the principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. It also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. The new accounting guidance for business combinations was effective for our Company on February1, 2009, and we will apply it prospectively to all business combinations subsequent to the effective date. The adoption of this new accounting policy did not have a significant impact on our consolidated financial statements and the impact that its adoption will have on our consolidated financial statements in future periods will depend on the nature and size of business combinations completed subsequent to the date of adopt

Business Combinations and Goodw

Business Combinations and Goodwill
	9 Months Ended Oct. 31, 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 361 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 In determining the preliminary purchase price allocation, management considered, among other factors, the Companys intention to use the acquired assets. Revisions to the preliminary purchase price allocation may result as additional information becomes available. 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. The acquisition of Micromania is an important part of the Companys European and overall growth strategy and gave the Company an immediate entrance into the second largest video game market in Europe. The amount the Company paid in excess of the fair value of the net assets acquired was primarily for (i)the expected future cash flows derived from the existing business and its infrastructure, (ii)the geographical benefits from adding stores in a new large growing market without cannibalizing existing sales, (iii)expanding the Companys expertise in the European video game market as a whole, and (iv)increasing the Companys impact on the European market, including increasing its purchasing power. 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. 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

Fair Value Measurements and Fin

Fair Value Measurements and Financial Instruments
	9 Months Ended Oct. 31, 2009 USD / shares
Fair Value Measurements and Financial Instruments [Abstract]
Fair Value Measurements and Financial Instruments	4. Fair Value Measurements and Financial Instruments The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value accounting guidance applies to our forward exchange contracts, foreign currency options and cross-currency swaps (together, the Foreign Currency Contracts), Company-owned life insurance policies with a cash surrender value and certain nonqualified deferred compensation liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition. Fair value accounting guidance requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Level1 inputs are quoted prices in active markets for identical assets or liabilities. Level2 inputs are observable inputs other than quoted prices included within Level1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants. We value our Foreign Currency Contracts, Company-owned life insurance policies with cash surrender values and certain nonqualified deferred compensation liabilities based on Level2 inputs using quotations provided by major market news services, such as Bloomberg and The Wall Street Journal, and industry-standard models that consider various assumptions, including quoted forward prices, time value, volatility factors, and contractual prices for the underlying instruments, as well as other relevant economic measures. When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence. The following table provides the fair value of our assets and liabilities measured on a recurring basis and recorded on our condensed consolidated balance sheets: October31, 2009 November1, 2008 January31, 2009 Level 2 Level 2 Level 2 (In thousands) Assets Foreign Currency Contracts $ 12,648 $ 42,862 $ 12,104 Company-owned life insurance 2,530 2,408 2,134 Total assets $ 15,178 $ 45,270 $ 14,238 Liabilities Foreign Currency Contracts $ 28,461 $ 12,418 $ 11,766 Nonqualified deferred compensation 1,008 1,019 905 Total liabilities $ 29,469 $ 13,437 $ 12,671 The Company uses 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 For

Accounting for Stock-Based Comp

Accounting for Stock-Based Compensation
	9 Months Ended Oct. 31, 2009 USD / shares
Accounting for Stock-Based Compensation [Abstract]
Accounting for Stock-Based Compensation	5. 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 October31, 2009 and November1, 2008. The options to purchase common stock granted during the 39weeks ended October31, 2009 and November1, 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: 39 Weeks Ended October31, November1, 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 October31, 2009 and November1, 2008, the Company included compensation expense relating to stock option grants of $3,030 and $3,916, respectively, in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. In the 39weeks ended October31, 2009 and November1, 2008, the Company included compensation expense relating to stock option grants of $8,472 and $12,733, respectively, in selling, general and administrative expenses. As of October31, 2009, the unrecognized compensation expense related to the unvested portion of our stock options was $16,362, which is expected to be recognized over a weighted average period of 1.8years. The total intrinsic values of options exercised during the 13 weeks ended October31, 2009 and November1, 2008 were $648 and $3,236, respectively. The total intrinsic values of options exercised during the 39weeks ended October31, 2009 and November1, 2008 were $3,375 and $86,981, respectively. During the 13weeks ended October31, 2009 and November1, 2008, the Company granted 43shares and 67shares, respectively, of restricted stock which had a fair market value of $23.43 and $43.24 per share, respectively. The restricted shares vest in equal annual installments over three years. During the 39weeks ended October31, 2009 and November1, 2008, the Company granted 614shares and 602shares, respectively, of restricted stock which had a weighted-average fair market value of $25.84 and $49.20 per share, respectively. The restricted shares vest in equal annual installments over three years. During the 13weeks ended October31, 2009 and November1, 2008, the Company included compensation expense relating to the restricted share grants in the amount of $4,946 and $4,449, respectively, in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. During the 39weeks ended October31, 2009 and

Computation of Net Earnings per

Computation of Net Earnings per Common Share
	9 Months Ended Oct. 31, 2009 USD / shares
Computation of Net Earnings per Common Share [Abstract]
Computation of Net Earnings per Common Share	6. Computation of Net Earnings per Common Share The Company has ClassA common stock outstanding. A reconciliation of shares used in calculating basic and diluted net earnings per common share follows: 13 Weeks Ended 39 Weeks Ended October31, November1, October31, November1, 2009 2008 2009 2008 (In thousands, except per share data) Net earnings $ 52,225 $ 46,669 $ 161,343 $ 165,957 Weighted average common shares outstanding 164,702 163,736 164,604 162,983 Dilutive effect of options and restricted shares on common stock 3,411 4,259 3,377 4,830 Common shares and dilutive potential common shares 168,113 167,995 167,981 167,813 Net earnings per common share: Basic $ 0.32 $ 0.29 $ 0.98 $ 1.02 Diluted $ 0.31 $ 0.28 $ 0.96 $ 0.99 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 October31, 2009 3,641 $ 26.02 - 49.95 2010 - 2019 13 Weeks Ended November1, 2008 1,342 $ 49.95 2010 - 2018

Debt

Debt
	9 Months Ended Oct. 31, 2009 USD / shares
Debt [Abstract]
Debt	7. 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 October31, 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 39weeks ended October31, 2009, the Company borrowed and repaid $115,000 under the Revolver. As of October31, 2009, there were no borrowings outstanding under the Revolver and letters of credit outstanding totaled $8,546. 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 October31, 2009, there were no cash overdrafts outstanding under the Line of Cr

Comprehensive Income

Comprehensive Income (loss)
	9 Months Ended Oct. 31, 2009 USD / shares
Comprehensive Income (loss) [Abstract]
Comprehensive Income (loss)	8. Comprehensive income (loss) Comprehensive income (loss) is net earnings, plus certain other items that are recorded directly to stockholders equity and consists of the following: 13 Weeks Ended 39 Weeks Ended October31, November1, October31, November1, 2009 2008 2009 2008 (In thousands) Net earnings $ 52,225 $ 46,669 $ 161,343 $ 165,957 Other comprehensive income: Foreign currency translation adjustments 34,223 (57,254 ) 151,370 (55,473 ) Total comprehensive income (loss) $ 86,448 $ (10,585 ) $ 312,713 $ 110,484

Income Taxes

Income Taxes
	9 Months Ended Oct. 31, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	9. 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 currently under examination by the Internal Revenue Service for the Companys U.S.income tax returns for the fiscal years ended February3, 2007 and February2, 2008. The Company does not expect any material adjustments to its condensed consolidated financial statements as a result of these audits. Our effective tax rates for the 13weeks ended October31, 2009 and November1, 2008 include $251 of net tax benefit and $1,317 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 39weeks ended October31, 2009 and November1, 2008 include $6,149 and $1,811, 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 39weeks ended October31, 2009 and November1, 2008 are based upon managements estimate of the Companys annualized effective tax rate.

Certain Relationships and Relat

Certain Relationships and Related Transactions
	9 Months Ended Oct. 31, 2009 USD / shares
Certain Relationships and Related Transactions [Abstract]
Certain Relationships and Related Transactions	10. 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 October31, 2009 and November1, 2008, these charges amounted to $227 and $262, respectively. During the 39weeks ended October31, 2009 and November1, 2008, these charges amounted to $688 and $846, 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 $40 and $70 for the 13weeks ended October31, 2009 and November1, 2008, respectively, and $160 and $213 for the 39weeks ended October31, 2009 and November1, 2008, respectively. Until June 2005, the Company participated in Barnes Nobles workers compensation, property and general liability insurance programs. The costs incurred by Barnes Noble under these programs were allocated to the Company based upon total payroll expense, property and equipment, and insurance claim history of the Company. Although the Company 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 the Company will be allocated to the Company. During the 13weeks ended October31, 2009 and November1, 2008, these charges amounted to $25 and $16, respectively. During the 39weeks ended October31, 2009 and November1, 2008, these charges amounted to $130 and $120, respectively.

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Oct. 31, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	11. Commitments and Contingencies On February14, 2005, and as amended, Steve Strickland, as personal representative of the Estate of Arnold Strickland, 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 Arnold Strickland, 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.

Significant Product Information

Significant Product Information
	9 Months Ended Oct. 31, 2009 USD / shares
Significant Product Information [Abstract]
Significant Product Information	12. Significant Product Information The Company is principally engaged in the sale of new and used video game systems and software, PC entertainment software and related accessories. The following table sets forth sales (in millions) by significant product category for the periods indicated: 13 Weeks Ended 39 Weeks Ended October31, November1, October31, November1, 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 $ 321.4 17.5 % $ 328.4 19.3 % $ 1,018.6 18.3 % $ 1,047.1 19.7 % New video game software 769.4 41.9 % 703.3 41.5 % 2,169.7 39.1 % 2,201.1 41.4 % Used video game products 507.7 27.7 % 425.1 25.1 % 1,617.0 29.1 % 1,312.4 24.7 % Other 236.2 12.9 % 238.9 14.1 % 748.7 13.5 % 753.2 14.2 % Total $ 1,834.7 100.0 % $ 1,695.7 100.0 % $ 5,554.0 100.0 % $ 5,313.8 100.0 % 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 39 Weeks Ended October31, November1, October31, November1, 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 $ 26.8 8.3 % $ 25.4 7.7 % $ 72.6 7.1 % $ 68.4 6.5 % New video game software 173.8 22.6 % 158.5 22.5 % 472.8 21.8 % 460.4 20.9 % Used video game products 240.0 47.3 % 204.8 4

Segment Information

Segment Information
	9 Months Ended Oct. 31, 2009 USD / shares
Segment Information [Abstract]
Segment Information	13. 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 before merger-related expenses, 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 39 Weeks Ended October31, November1, October31, November1, 2009 2008 2009 2008 (In thousands) (Unaudited) Sales by operating segment were as follows: United States $ 1,200,873 $ 1,278,351 $ 3,857,808 $ 3,972,394 Canada 115,399 116,125 303,266 359,753 Australia 114,190 97,906 328,707 349,314 Europe 404,265 203,364 1,064,203 632,322 Total $ 1,834,727 $ 1,695,746 $ 5,553,984 $ 5,313,783 Segment operating earnings excluding merger-related expenses were as follows: United States $ 69,014 $ 86,260 $ 245,327 $ 261,428 Canada 7,801 7,377 16,004 18,849 Australia 6,629 6,898 21,056 28,445 Europe 6,825 1,405 7,292 3,190 Total $ 90,269 $ 101,940 $ 289,679 $ 311,912

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	9 Months Ended Oct. 31, 2009 USD / shares
Supplemental Cash Flow Information [Abstract]
Supplemental Cash Flow Information	14. Supplemental Cash Flow Information 39 Weeks Ended October31, November1, 2009 2008 (In thousands) (Unaudited) Cash paid during the period for: Interest $ 43,793 $ 43,892 Income taxes $ 119,886 $ 143,877

Consolidating Financial Stateme

Consolidating Financial Statements
	9 Months Ended Oct. 31, 2009 USD / shares
Consolidating Financial Statements [Abstract]
Consolidating Financial Statements	15. Consolidating Financial Statements As described in Note7, 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 of the Companys guarantor and non-guarantor subsidiaries as of October31, 2009, November1, 2008 and January31, 2009 and results of operations for the 13 and 39weeks ended October31, 2009 and November1, 2008 and cash flows for the 39weeks ended October31, 2009 and November1, 2008. GameStop Corp. Condensed Consolidating Balance Sheet Issuers and Guarantor Non-Guarantor Subsidiaries Subsidiaries Consolidated October31, October31, October31, 2009 2009 Eliminations 2009 (Amounts in thousands, except per share amounts) (Unaudited) ASSETS: Current assets: Cash and cash equivalents $ 151,629 $ 140,398 $ $ 292,027 Receivables, net 241,452 683,089 (871,998 ) 52,543 Merchandise inventories, net 1,049,944 684,018 1,733,962 Deferred income taxes current 21,645 2,858 24,503 Prepaid taxes (3,654 ) 16,727 13,073 Prepaid expenses 39,866 21,648 61,514 Other current assets 1,398 15,074 16,472 Total current assets 1,502,280 1,563,812 (871,998 ) 2,194,094 Property and equipment: Land 2,670 9,149 11,819 Buildings and leasehold improvements 290,335 226,157 516,492 Fixtures and equipment 548,581 144,079 692,660 Total property and equipment 841,586 379,385 1,220,971 Less accumulated depreciation and amortization 472,216 157,060 629,276 Net property and equipment 369,370 222,325 591,695 Investment 2,032,792 (2,032,792 ) Goodwill, net 1,096,622 835,050 1,931,672 Other intangible assets 4,345 275,222 279,567 Other noncurrent assets 10,058 28,922