Guitar Center 8-K Results of Operations and Financial Condition

Exhibit 99.2

Guitar Center, Inc. and subsidiaries

Consolidated Balance Sheets

(In thousands, except per share amounts)

(Unaudited)

	December 31, 2004		December 31, 2003
Assets
Current assets:
Cash and cash equivalents	$	60,453	$	5,350
Investments in marketable securities	3,810		—
Accounts receivable, net	27,627		23,814
Merchandise inventories	314,961		288,873
Prepaid expenses and deposits	13,367		11,543
Deferred income taxes	5,552		5,631
Total current assets	425,770		335,211
Property and equipment, net	97,349		93,347
Investments in marketable securities, long-term	16,997		—
Goodwill	26,474		25,995
Deposits and other assets, net	8,003		6,318
	$	574,593	$	460,871
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	49,771	$	47,778
Accrued expenses and other current liabilities	83,606		71,616
Merchandise advances	22,534		17,104
Total current liabilities	155,911		136,498
Other long-term liabilities	6,943		5,982
Deferred income taxes	5,057		4,220
Long-term debt	100,000		100,000
Total liabilities	267,991		246,700
Stockholders’ equity:
Preferred Stock; authorized 5,000 shares at December 31, 2004 and December 31, 2003, none issued and outstanding	—		—
Common Stock, $0.01 par value, authorized 55,000 shares, issued and outstanding 25,359 at December 31, 2004 and 23,998 at December 31, 2003	254		240
Additional paid in capital	305,305		276,233
Retained earnings	1,123		(62,302		)
Total stockholders’ equity	306,682		214,171
	$	574,593	$	460,871

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Guitar Center, Inc. and subsidiaries

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

	Year ended December 31,
	2004		2003
Net sales	$	1,513,172	$	1,275,059
Cost of goods sold, buying and occupancy	1,087,899		931,014
Gross profit	425,273		344,045
Selling, general and administrative expenses	317,585		271,996
Operating income	107,688		72,049
Interest expense, net	5,390		12,540
Income before income taxes	102,298		59,509
Income taxes	38,873		22,649
Net income	$	63,425	$	36,860
Net income per share:
Basic	$	2.55	$	1.59
Diluted	$	2.36	$	1.50
Weighted average shares outstanding:
Basic	24,856		23,255
Diluted	27,530		24,561

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	Three months ended December 31,
	2004		2003
Net sales	$	468,938	$	395,805
Cost of goods sold, buying and occupancy	330,502		281,817
Gross profit	138,436		113,988
Selling, general and administrative expenses	93,439		80,150
Operating income	44,997		33,838
Interest expense, net	1,308		2,110
Income before income taxes	43,689		31,728
Income taxes	16,599		12,076
Net income	$	27,090	$	19,652
Net income per share:
Basic	$	1.07	$	0.83
Diluted	$	0.95	$	0.78
Weighted average shares outstanding:
Basic	25,326		23,789
Diluted	29,400		25,172

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