Best Buy 2002 Annual Report Download - page 44

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42 Notes to Consolidated Financial Statements
using the purchase method in accordance with APB
Opinion No. 16, Business Combinations, and No. 17,
Intangible Assets. The allocation of the purchase prices to
the assets and liabilities acquired was finalized in the
fourth quarter of fiscal 2002 and resulted in goodwill of
$395, of which $326 is non-deductible for tax purposes.
The goodwill was being amortized on a straight-line basis
over 20 years and is included in selling, general and
administrative expenses. Goodwill amortization associated
with the acquisitions of Magnolia Hi-Fi and Musicland will
cease at the beginning of fiscal 2003 with the adoption
of SFAS No. 142. Application of the nonamortization
provision of the new standard is expected to result in an
increase in our net earnings of approximately $18 per year.
The following unaudited pro forma data sets forth the
consolidated results of operations as though Musicland
and Future Shop had been acquired as of the beginning
of fiscal 2001:
2002 2001
Revenues $20,392 $18,392
Net earnings 5
7
0428
Basic earnings per share 1.80 1.38
Diluted earnings per share 1.
77
1.34
Pro forma information related to the acquisition of
Magnolia Hi-Fi is not presented, as the operating results
of Magnolia Hi-Fi would not have had a material impact
on our results of operations.
The pro forma results include goodwill amortization of
$16, for Musicland only, and other adjustments, principally
the loss of interest income on cash used to finance the
acquisitions. The pro forma results for fiscal 2001 exclude
costs expected to be incurred in connection with the
integration and transformation of acquired businesses.
The pro forma results are not necessarily indicative of what
actually would have occurred had the acquisitions been
completed as of the beginning of fiscal 2001, nor are
they necessarily indicative of future consolidated results.
$ in millions, except per share amounts