Guitar Center 8-K Results of Operations and Financial Condition

Exhibit 99.2

GUITAR CENTER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

	September 30, 2006		December 31, 2005
Assets
Current assets:
Cash and cash equivalents	$	10,211	$	14,529
Accounts receivable, net	43,677		40,844
Merchandise inventories	558,463		445,771
Prepaid expenses and other current assets	21,402		15,533
Deferred income taxes	14,324		13,492
Total current assets	648,077		530,169
Property and equipment, net	186,978		149,209
Goodwill	96,627		85,929
Intangible assets, net	7,535		9,142
Other assets, net	4,014		5,741
Total assets	$	943,231	$	780,190
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	110,937	$	79,497
Accrued expenses and other current liabilities	67,653		106,181
Merchandise advances	20,138		25,127
Borrowings under revolving line of credit	147,440		32,266
Total current liabilities	346,168		243,071
Other long-term liabilities	15,039		11,995
Deferred income taxes	13,113		20,307
Long-term debt	—		100,000
Total liabilities	374,320		375,373
Stockholders’ equity:
Preferred stock	—		—
Common stock	293		261
Additional paid-in capital	450,360		326,755
Retained earnings	118,258		77,801
Total stockholders’ equity	568,911		404,817
Total liabilities and stockholders’ equity	$	943,231	$	780,190

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GUITAR CENTER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

	Three months ended September 30,
	2006		2005
Net sales	$	472,732	$	421,061
Cost of goods sold, buying and occupancy	339,465		297,243
Gross profit	133,267		123,818
Selling, general and administrative expenses	114,022		98,366
Operating income	19,245		25,452
Interest expense, net	2,173		2,021
Gain on sale of property	2,115		—
Income before income taxes	19,187		23,431
Income taxes	7,866		9,022
Net income	$	11,321	$	14,409
Net income per share:
Basic	$	0.39	$	0.55
Diluted	$	0.38	$	0.51
Weighted average shares outstanding:
Basic	28,874		25,975
Diluted	29,924		29,946

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	Nine months ended September 30,
	2006		2005
Net sales	$	1,401,457	$	1,219,743
Cost of goods sold, buying and occupancy	1,000,327		869,413
Gross profit	401,130		350,330
Selling, general and administrative expenses	331,120		275,266
Operating income	70,010		75,064
Interest expense, net	6,399		4,811
Gain on sale of property	2,115		—
Income before income taxes	65,726		70,253
Income taxes	25,269		27,049
Net income	$	40,457	$	43,204
Net income per share:
Basic	$	1.49	$	1.67
Diluted	$	1.41	$	1.52
Weighted average shares outstanding:
Basic	27,119		25,819
Diluted	29,911		29,836

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