2K Sports 2003 Annual Report Download - page 46

17. COMPREHENSIVE INCOME
The components of and changes in accumulated other comprehensive income (loss) are:
Foreign Currency Net Unrealized Accumulated Other
Translation Gain (Loss) on Comprehensive
Adjustments Investments Income (Loss)
Balance at November 1, 2000 $ (9,841) $(2,831) $(12,672)
Comprehensive income changes during the year, net of taxes of $1,832 (767) 2,987 2,220
Balance at October 31, 2001 (10,608) 156 (10,452)
Comprehensive income changes during the year, net of taxes of $87 5,553 (142) 5,411
Balance at October 31, 2002 (5,055) 14 (5,041)
Comprehensive income changes during the year, net of taxes of $9 4,119 (14) 4,105
Balance at October 31, 2003 $ (936) $ — $ (936)
The taxes in the above table relate to the changes in the net unrealized gain (loss) on investments. The foreign currency adjustments are not
adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.
selling net appreciated assets of the Company to the extent required
to generate sufficient taxable income prior to the expiration of these
benefits. At October 31, 2003, based on management’s future plans,
this strategy was no longer viable, and accordingly a valuation
allowance has been recorded for this asset as it is more likely than not
that the deferred tax asset related to these carryforwards will not be
realized. At October 31, 2003, the Company had foreign net operat-
ing losses of $9,800 expiring between 2005 and 2010 and state net
operating losses of $41,700 expiring between 2021 and 2023. Limita-
tions on the utilization of these losses may apply, and accordingly val-
uation allowances have been recorded for these assets.
The total amount of undistributed earnings of foreign subsidiaries
was approximately $60,700 and $41,900 for the years ended October
31, 2003 and 2002, respectively. It is the Company’s intention to rein-
vest undistributed earnings of its foreign subsidiaries and thereby
indefinitely postpone their remittance. Accordingly, no provision has
been made for foreign withholding taxes or United States income tax-
es which may become payable if undistributed earnings of foreign
subsidiaries were paid as dividends to the Company.
16. STOCKHOLDERS’ EQUITY
In July 2001, the Company issued 1,300,000 shares of common
stock in a private placement to institutional investors and received
proceeds of $20,892, net of $1,400 of selling commissions and offer-
ing expenses.
In February 2001, certain stockholders of the Company exchanged
and surrendered for cancellation 564,212 shares of the Company’s
common stock (valued at $7,310) for shares of Gameplay having an
equal value.
In February 2002, the Company issued 20,000 shares of restricted
common stock to a former employee in connection with a separation
agreement.
In January 2003, the Board of Directors authorized a stock repur-
chase program under which the Company may repurchase up to
$25,000 of its common stock from time to time in the open market or
in privately negotiated transactions. The Company has not repur-
chased any shares under this program.
In November 2003, at a special meeting, the Company’s stock-
holders voted to amend the certificate of incorporation to increase
the Company’s authorized shares of common stock from 50,000,000
to 100,000,000.
TAKE-TWO INTERACTIVE SOFTWARE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(Dollars in thousands, except per share amounts)
44
18. INCENTIVE PLANS
Incentive Stock Plan
The Incentive Stock Plan (“Incentive Plan”), adopted by the Board
of Directors on June 12, 2003, allows the granting of restricted stock,
deferred stock and other stock-based awards of the Company’s com-
mon stock to directors, officers and other employees of the Company.
A maximum of 500,000 shares are available for distribution under the
Incentive Plan. As of October 31, 2003, 285,000 shares of restricted
common stock have been granted under the Incentive Plan. The cost
of the restricted shares granted is expensed over the vesting period.
The Incentive Plan is administered by the Compensation Committee
of the Board of Directors.
Stock Option Plans
In June 2002, the stockholders of the Company approved the
Company’s 2002 Stock Option Plan, as previously adopted by the
Company’s Board of Directors (the “2002 Plan”), pursuant to which
officers, directors, employees and consultants of the Company may
receive stock options to purchase up to an aggregate of 3,000,000
shares of common stock. In April 2003, the stockholders approved an
increase in the aggregate amount of shares to 4,000,000 shares.
In January 1997, the stockholders of the Company approved the
Company’s 1997 Stock Option Plan, as amended, as previously
adopted by the Company’s Board of Directors (the “1997 Plan”), pur-
suant to which officers, directors, employees and consultants of the
Company may receive options to purchase up to an aggregate of
6,500,000 shares of the Company’s common stock.