Circuit City 2008 Annual Report Download - page 26

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Table of Contents
to the requisite service having been rendered. The guidance in this FSP applies to the calculation of Earnings Per Share (“EPS”)
under Statement
128 for share-based payment awards with rights to dividends or dividend equivalents. Unvested share-based payment awards that contain non-
forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the
computation of EPS pursuant to the two-class method. This FSP is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those years. All prior-period EPS data presented shall be adjusted retrospectively (including
interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of this FSP. The Company does
not expect the adoption of this FSP to have a material impact on its consolidated financial statements.
In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which replaces FASB Statement 141. SFAS No.141R retains
the requirement that the acquisition method of accounting be used for business combinations. The objective of SFAS No. 141R is to improve the
relevance, representational faithfulness and comparability that reporting entities provide in their financial reports about business combinations
and their effects. SFAS No. 141R establishes principles and requirements for how an acquirer 1) recognizes and measures identifiable assets
acquired, the liabilities assumed and any non-controlling interest in the acquiree, 2) recognizes and measures the goodwill acquired in the
combination or a gain from a bargain purchase and 3) determines what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No. 141R is effective for annual periods beginning after
December 15, 2008 and will be applied prospectively for all business combinations entered into after the date of adoption. The impact of SFAS
No. 141R will depend on the nature and terms of any future business combinations, if any.
In December 2007, the FASB issued SFAS No. 160, “Accounting and Reporting of Non-controlling Interest”. The objective of SFAS No. 160 is
to improve the relevance, comparability and transparency of the financial information that reporting entities provide related to non-controlling
interests, sometimes referred to as minority interests. SFAS No. 160 requires, among other things, that non-controlling interests be shown
separately in the consolidated entity’s equity section of the balance sheet. SFAS No. 160 also establishes accounting and reporting standards
for ownership interest in subsidiaries held by parties other than the parent, for presentation of amounts of consolidated net income attributable to
the parent and the non-controlling interest, for consistency in accounting for changes in a parent’s ownership interest when the parent retains a
controlling interest, for the valuation of retained non-
controlling equity interests when a subsidiary is deconsolidated and for providing sufficient
disclosure that identifies and distinguishes the interests of the parent and the interests of the non-controlling owners. SFAS No. 160 is effective
beginning January 1, 2009. The Company does not expect the adoption of SFAS No.160 to have a material impact on its consolidated financial
statements.
Highlights from 2008
The discussion of our results of operations and financial condition that follows will provide information that will assist in understanding our
financial statements and information about how certain accounting principles and estimates affect the consolidated financial statements. This
discussion should be read in conjunction with the consolidated financial statements included herein.
•
Sales increase of 9% in 2008 over 2007
•
CompUSA.com and CompUSA retail contributed $226.3 million in sales
•
Movements in exchange rates positively impacted European and Canadian sales by approximately $13 million and $5 million,
respectively
•
Revenue growth slowed in the second half of 2008
24