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Quarterly Results and Seasonality
Similar to many retailers, our business is seasonal. Revenue and earnings are typically greater during the second half of the fiscal year, which includes the holiday selling season. The timing of new store openings, costs associated with acquisitions and development of new businesses, and general economic conditions also may affect our future quarterly results.

The following tables show selected unaudited quarterly operating results for each quarter of fiscal 2003.

($ in millions, except per share amounts)

Quarter		1st	2nd	3rd	4th	Fiscal Year

Fiscal 2003 as revised⁽¹⁾
Revenue		$ 4,202	$ 4,624	$ 5,131	$ 6,989	$ 20,946
Comparable store sales change⁽³⁾		6.5%	2.6%	0.7%	1.2%	2.4%
Gross profit		$ 1,080	$ 1,153	$ 1,250	$ 1,753	$ 5,236
Operating income		129	129	140	612	1,010
Earnings from continuing operations		79	79	86	378	622
Loss from discontinued operations, net of tax		(330)	(17)	(27)	(67)	(441)
Cumulative effect of change in accounting principle		(82)	—	—	—	(82)
Net (loss) earnings		(333)	62	59	311	99
Diluted (loss) earnings per share:
Continuing operations		0.24	0.24	0.27	1.16	1.91
	Discontinued operations	(1.01)	(0.05)	(0.08)	(0.21)	(1.36)
	Cumulative effect of accounting changes	(0.25)	—	—	—	(0.25)
Diluted (loss) earnings per share		(1.02)	0.19	0.18	0.96	0.30

Quarter	1st	2nd	3rd

Fiscal 2003 as previously reported
Revenue	$ 4,586	$ 5,008	$ 5,505
Comparable store sales change⁽³⁾	5.7%	2.0%	(0.4%)
Gross profit	$ 1,065	$ 1,129	$ 1,187
Operating income	115	103	139
Net earnings	70	62	85
Diluted earnings per share	0.22	0.19	0.26

Note: Certain totals may not add due to rounding.
⁽¹⁾ All quarters presented have been revised to reflect the classification of Musicland’s financial results as discontinued
operations. Refer to note 2 in the Notes to Consolidated Financial Statements. First-quarter fiscal 2003 results include an after-tax, non-cash impairment charge of $308 for the full write-off of the goodwill related to our acquisition of Musicland. Fourth-quarter fiscal 2003 includes an after-tax, non-cash impairment charge of $102 related to a reassessment of the carrying value of Musicland’s long-lived assets in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
⁽²⁾ Effective on March 3, 2002, we adopted SFAS No. 142, Goodwill and Other Intangible Assets. During the second
quarter of fiscal 2003, we completed the required goodwill impairment testing and recognized an after-tax, non-cash
impairment charge of $40 that is reflected in our revised fiscal 2003 first-quarter financial results as a cumulative effect of
a change in accounting principle. Also effective on March 3, 2002, we changed our method of accounting for vendor
allowances to reflect the newly adopted accounting principle established in EITF Issue No. 02-16, Accounting by a
Reseller for Cash Consideration Received from a Vendor. The related after-tax, non-cash charge of $42 also is reflected
in our revised fiscal 2003 first-quarter financial results as a cumulative effect of a change in accounting principle. Refer to
note 1 in the Notes to Consolidated Financial Statements.
⁽³⁾ Includes revenue at stores and Internet sites operating for at least 14 full months, as well as remodeled and
expanded locations. Relocated stores are excluded from the comparable store sales calculation until at least 14 full
months after reopening. Acquired stores are included in the comparable store sales calculation beginning with the first
full quarter following the first anniversary of the date of acquisition. The calculation of the comparable store sales
change excludes Musicland revenue, which is included in discontinued operations.
⁽⁴⁾ During the third quarter of fiscal 2002, we acquired the common stock of Future Shop Ltd. Future Shop’s results of
operations were included from the date of acquisition.
⁽⁵⁾ The diluted earnings per share amounts have been revised to reflect a three-for-two stock split effected on May 10, 2002. >>