Best Buy 2006 Annual Report Download - page 106

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$ in millions, except per share amounts
92
14. Supplementary Financial Information (unaudited)
The following tables show selected unaudited quarterly operating results for each quarter of fiscal 2006 and2005.
Quarter 1st 2nd 3rd 4th
Fiscal
Year
Fiscal 2006(1)
Revenue $ 6,118 $ 6,702 $ 7,335 $10,693 $ 3 0,848
Comparable store sales % change(3) 4.4% 3.5% 3.3% 7.3% 4.9%
Gross profit $ 1,558 $ 1,711 $ 1,788 $ 2,669 $ 7,726
Operating income 239 261 189
955 1,644
Earnings from continuing operations 170188 138
644 1,140
Gain on disposal of discontinued operations(4) — — — — —
Net earnings 170 188 138 644 1,140
Diluted earnings per share:
Continuing operations 0.34 0.37 0.28 1.29 2.27
Discontinued operations — — — — —
Diluted earnings per share 0.340.37 0.28 1.29 2.27
Quarter 1st 2nd 3rd 4th(5)
Fiscal
Year
Fiscal 2005(2)
Revenue $ 5,479 $ 6,080 $ 6,647 $ 9,227 $ 27,433
Comparable store sales % change(3) 8.3% 4.3% 3.2% 2.8% 4.3%
Gross profit $ 1,311 $ 1,470 $ 1,543 $ 2,171 $ 6,495
Operating income 184 242 233 783 1,442
Earnings from continuing operations 114150 148 522 934
Gain on disposal of discontinued operations(4) — — —50 50
Net earnings 114 150 148 572 984
Diluted earnings per share:
Continuing operations 0.23 0.30 0.30 1.03 1.86
Discontinued operations — — — 0.10 0.10
Diluted earnings per share 0.230.30 0.30 1.13 1.96
Note: Certain totals may not add due to rounding.
(1)In the first quarter of fiscal 2006, we early-adopted the fair value recognition provisions of SFASNo. 123(R), requiring us to recognize
expense related to the fair value of our stock-based compensation awards. We elected the modified prospective transition method as
permitted by SFAS No. 123(R) and, accordingly, financial results for fiscal years prior to 2006 have not been restated. Stock-based
compensation expense for fiscal year 2006 was $132 ($87 net of tax). Stock-based compensation expense recognized in our financial
results for fiscal year 2005 was not significant.
(2)All quarters presented reflect the classification of Musicland’s financial results as discontinued operations. Refer to Note 2,
Discontinued Operations.
(3)Comprised of revenue at stores and Web sites operating for at least 14 full months, as well as remodeled and expanded locations.
Relocated stores are excludedfrom the comparable store sales calculation until at least 14 full months after reopening. The
calculation of the comparable store sales percentage change excludes the impact of fluctuations in foreign currency exchangerates.
(4)The fourth quarter of fiscal 2005 includes a tax benefit of $50 due to the favorable resolution of outstanding tax matters.
(5)During the fourth quarter of fiscal2005 we established a sales return liability which reduced gross profit by $15 pre-tax ($10 net of
tax, or $0.02 per diluted share). Additionally, following a review of our lease accounting practices, we recorded a cumulative charge
of $36pre-tax ($23 net of tax, or $0.05 per diluted share) to correct our accounting for certain operating lease matters. Of the $36
pre-tax charge, $15 was recorded as a charge to SG&A, while the remaining $21 was recorded as a chargeto interest expense.