2K Sports 2004 Annual Report Download - page 58

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The change in intangibles for the years ended October 31, 2004 and 2003 is as follows:
2004 2003
Balance, November 1 ............................................. $68,820 $67,714
Acquisitions ...................................................... 14,364 4,720
Other purchases of intangibles .................................... 894 8,685
Impairment charges ............................................... (717) (12,299)
Balance, October 31 .............................................. $83,361 $68,820
Amortization expense for the years ended October 31, 2004, 2003 and 2002 is as follows:
Years Ended October 31,
2004 2003 2002
Included in:
Cost of sales — product costs ...................................... $18,870 $ 2,940 $4,059
Depreciation and amortization ...................................... 4,403 8,660 5,834
Total amortization expense ....................................... $23,273 $11,600 $9,893
Estimated amortization expense for the years ending October 31, is as follows:
2005 ............................................................... $11,374
2006 ............................................................... 10,371
2007 ............................................................... 5,872
2008 ............................................................... 4,464
2009 ............................................................... 2,846
Total ............................................................... $34,927
The change in goodwill for the years ended October 31, 2004 and 2003 is as follows:
2004 2003
Balance, November 1 ............................................. $101,498 $ 61,529
Acquisitions:
Angel .......................................................... — 37,425
TDK ........................................................... 17,079 —
Indie ........................................................... 11,593 —
Other ........................................................... 5,307 1,267
Adjustments to acquisitions in prior periods ...................... — 1,277
Balance, October 31 .............................................. $135,477 $101,498
9. LINES OF CREDIT
In December 1999, the Company entered into a credit agreement, as amended and restated in August 2002,
with a group of lenders led by Bank of America, N.A., as agent. The agreement provides for borrowings of up
to $40,000 through the expiration of the line of credit on August 28, 2005. Generally, advances under the line
of credit are based on a borrowing formula equal to 75% of eligible accounts receivable plus 35% of eligible
inventory. Interest accrues on such advances at the bank’s prime rate plus 0.25% to 1.25%, or at LIBOR plus
2.25% to 2.75% depending on the Company’s consolidated leverage ratio (as defined). The Company is
required to pay a commitment fee to the bank equal to 0.5% of the unused loan balance. Borrowings under
the line of credit are collateralized by the Company’s accounts receivable, inventory, equipment, general
intangibles, securities and other personal property, including the capital stock of the Company’s domestic
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
8. GOODWILL AND INTANGIBLE ASSETS, NET (Continued)
50