2K Sports 2003 Annual Report Download - page 42

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The following table provides a reconciliation of net income for exclusion of goodwill amortization:
Years Ended October 31,
2003 2002 2001
(Restated) (Restated)
Net income (loss)—as reported $98,118 $71,563 $(6,918)
Add: Goodwill amortization, net of taxes —— 4,116
Net income (loss)—as adjusted 98,118 71,563 (2,802)
Add: Cumulative effect of change in accounting principle, net of taxes —— (5,244)
Income (loss) before cumulative effect of change in accounting principle—as adjusted $98,118 $71,563 $ 2,442
Income (loss) before cumulative effect of change in accounting principle—as reported $98,118 $71,563 $(1,706)
Earnings (loss) per share:
Reported earnings (loss) per share—basic $ 2.34 $ 1.88 $ (0.20)
Add: Goodwill amortization, net of taxes —— 0.12
Adjusted earnings (loss) per share—basic 2.34 1.88 (0.08)
Add: Cumulative effect of change in accounting principle —— (0.15)
Adjusted income (loss) before cumulative effect of change in accounting principle per share—basic $ 2.34 $ 1.88 $ 0.07
Reported income (loss) before cumulative effect of change in accounting principle per share—basic $ 2.27 $ 1.88 $ (0.05)
Reported earnings (loss) per share—diluted $ 2.27 $ 1.81 $ (0.20)
Add: Goodwill amortization, net of taxes —— 0.12
Adjusted earnings (loss) per share—diluted 2.27 1.81 (0.08)
Add: Cumulative effect of change in accounting principle —— (0.15)
Adjusted income (loss) before cumulative effect of change in accounting principle per share—diluted $ 2.27 $ 1.81 $ 0.07
Reported income (loss) before cumulative effect of change in accounting principle per share—diluted $ 2.27 $ 1.81 $ (0.05)
The following table sets forth the components of the intangible assets subject to amortization as of October 31, 2003 and 2002:
As of October 31, 2003 As of October 31, 2002
Gross Gross
Range of Carrying Accumulated Carrying Accumulated
Useful Life Amount Amortization Net Amount Amortization Net
Trademarks 7–10 years $23,667 $ (5,998) $17,669 $23,342 $ (4,515) $18,827
Customer lists and relationships 5–10 years 4,673 (2,733) 1,940 9,081 (2,352) 6,729
Intellectual property 2– 6 years 31,487 (10,907) 20,580 25,771 (2,869) 22,902
Non-competition agreements 3– 6 years 4,838 (2,105) 2,733 4,880 (906) 3,974
Technology 3 years 4,192 (2,278) 1,914 4,640 (1,779) 2,861
$68,857 $(24,021) $44,836 $67,714 $(12,421) $55,293
Amortization expense (including goodwill for 2001) for the years ended October 31, 2003, 2002 and 2001 amounted to $11,600, $9,893 and
$9,309, respectively.
Estimated amortization expense for the fiscal years ending October
31 is as follows:
2004 $16,726
2005 4,657
2006 5,962
2007 2,709
2008 1,628
Total $31,682
The change in goodwill for the fiscal year ended October 31,
2003 is as follows:
Balance October 31, 2002 $61,529
Acquisitions in fiscal 2003
Angel 37,425
Frog City and Cat Daddy 1,267
Adjustments for 2002 acquisition 1,277
Balance October 31, 2003 $101,498
The addition to goodwill in 2002 was the $5,496 related to the
Barking Dog acquisition.
TAKE-TWO INTERACTIVE SOFTWARE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(Dollars in thousands, except per share amounts)
40