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$ in millions, except per share amounts or as otherwise noted
choose early adoption. We adopted SFAS No. 159 on acquired will be finalized no later than the first quarter of
March 2, 2008, and did not elect the fair value option for fiscal 2009. The premium we paid in excess of the fair
eligible items that existed at the date of adoption. value of the net assets acquired was primarily for the
expected synergies we believe Speakeasy will generate by
In September 2006, the FASB issued SFAS No. 157, Fair providing new technology solutions for our existing and
Value Measurements. SFAS No. 157 defines fair value, future customers, as well as to obtain Speakeasy’s skilled,
establishes a framework for measuring fair value in established workforce. None of the goodwill is deductible
accordance with GAAP and expands disclosures about fair for tax purposes.
value measurements. SFAS No. 157 applies under other
accounting pronouncements that require or permit fair The preliminary purchase price allocation, net of cash
value measurements, the FASB having previously acquired, was as follows:
concluded in those accounting pronouncements that fair
Receivables $ 8
value is the relevant measurement attribute. Accordingly,
Property and equipment 7
SFAS No. 157 does not require any new fair value
Other assets 25
measurement. SFAS No. 157, as originally issued, was
Tradename 6
effective for fiscal years beginning after November 15,
Goodwill 74
2007. However, in December 2007, the FASB issued FASB
Current liabilities (31)
Staff Position FAS157-b, which deferred the effective date
of SFAS No. 157 for one year, as it relates to nonfinancial Total $ 89
assets and liabilities. We will adopt SFAS No. 157 as it
relates to financial assets and liabilities beginning in the Jiangsu Five Star Appliance Co., Ltd.
first quarter of fiscal 2009. We are evaluating the impact
On June 8, 2006, we acquired a 75% interest in Five Star
the adoption of SFAS No. 157 will have on our financial
for $184, which included a working capital injection of
statements and related disclosures, but do not expect SFAS
$122 and transaction costs. Five Star is an appliance and
No. 157 to have a material impact on our consolidated
consumer electronics retailer and had 131 stores located
financial position or results of operations.
in eight of China’s 34 provinces on the date of
acquisition. We made the investment in Five Star to further
2. Acquisitions
our international growth plans, to increase our knowledge
Speakeasy, Inc. of Chinese customers and to obtain an immediate retail
presence in China. We have a contractual commitment to
On May 1, 2007, we acquired Speakeasy for $103 in
acquire the remaining 25% interest within the next several
cash, or $89 net of cash acquired, which included
years, subject to Chinese government approval. The
transaction costs and the repayment of $5 of Speakeasy’s
acquisition was accounted for using the purchase method
debt. We acquired Speakeasy, an independent U.S.
in accordance with SFAS No. 141. Accordingly, we
broadband, voice, data and information technology
recorded the net assets at their estimated fair values, and
services provider, to strengthen our portfolio of technology
included operating results in our International segment
solutions. We accounted for the acquisition using the
from the date of acquisition. We allocated the purchase
purchase method in accordance with SFAS No. 141,
price on a preliminary basis using information then
Business Combinations. Accordingly, we recorded the net
available. The allocation of the purchase price to the
assets at their estimated fair values, and included
assets and liabilities acquired was finalized in the first
operating results in our Domestic segment from the date
quarter of fiscal 2008. There was no significant adjustment
of acquisition. We allocated the purchase price on a
to the preliminary purchase price allocation. None of the
preliminary basis using information then available. The
goodwill is deductible for tax purposes.
allocation of the purchase price to the assets and liabilities
75