Balance Sheet Components

12 Months Ended

Dec. 31, 2011

4. Balance Sheet Components

Selected balance sheet components of Holdings and Guitar Center consisted of the following (in thousands):

	December 31,

	2011		2010
Merchandise inventories:
Major goods	$	337,537	$	300,966
Band instruments		76,188		77,374
Accessories		110,740		101,334
Vintage instruments		13,635		15,720
Used major goods		15,366		12,591

		553,466		507,985
Less inventory reserves		5,506		6,120

	$	547,960	$	501,865

Major goods include stringed merchandise, percussion, keyboards, live-sound/DJ and recording equipment. Band instruments include horns, flutes, brass and woodwind instruments. Accessories are comprised of accessories to major goods and band instruments, apparel, cables and books.

	December 31,

	2011		2010
Property and equipment:
Land	$	20,940	$	21,940
Buildings		11,969		17,834
Furniture and fixtures		41,535		38,696
Transportation equipment		2,659		13,036
Computer equipment		139,788		118,359
Leasehold improvements		182,369		167,949
Construction in progress		4,600		23,487

		403,860		401,301
Less accumulated depreciation and amortization		194,763		173,077

	$	209,097	$	228,224

As of December 31, 2011and 2010, $2.6 million of computer equipment was under a capital lease. Accumulated depreciation on capitalized lease assets was $1.8 million as of December 31, 2011 and $1.2 million as of December 31, 2010.

Holdings

	December 31,

	2011		2010
Accrued expenses and other current liabilities:
Wages, salaries and benefits	$	34,973	$	29,798
Accrued interest		26,500		26,102
Sales tax payable		13,708		14,994
Unearned revenue		9,252		9,671
Accrued advertising		6,165		8,334
Accrued insurance		6,109		5,383
Provision for sales returns		4,319		3,837
Accrued fixed assets		3,819		3,356
Accrued freight		3,441		3,258
Accrued warranty obligation		2,480		5,024
Accrued professional fees		2,151		1,869
Accrued real estate tax		2,044		2,037
Income taxes payable		1,548		—
Accrued utilities		1,065		1,010
Other		11,213		11,117

	$	128,787	$	125,790

Guitar Center

	December 31,

	2011		2010
Accrued expenses and other current liabilities:
Income taxes payable	$	61,266	$	53,740
Wages, salaries and benefits		34,973		29,798
Sales tax payable		13,708		14,994
Accrued interest		9,924		9,527
Unearned revenue		9,252		9,671
Accrued advertising		6,165		8,334
Accrued insurance		6,109		5,383
Provision for sales returns		4,319		3,837
Accrued fixed assets		3,819		3,356
Accrued freight		3,441		3,258
Accrued warranty obligation		2,480		5,024
Accrued professional fees		2,151		1,869
Accrued real estate tax		2,044		2,037
Accrued utilities		1,065		1,010
Other		11,213		11,117

	$	171,929	$	162,955