2K Sports 2004 Annual Report Download - page 66

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Under accounting principles generally accepted in the United States of America, quarterly computations of
earnings per share must stand on their own and, therefore, the sum of basic and diluted EPS numbers for each
of the four quarters of 2004 and 2003 may not equal full year basic and diluted EPS. Basic and diluted EPS
for each quarter of 2004 and 2003 is computed using the weighted average number of shares outstanding
during the quarter, while basic and diluted EPS for the full year is computed using the weighted average
number of shares outstanding during the more extended period of time.
18. CONSOLIDATION OF DISTRIBUTION FACILITIES
In January 2003, based on management’s strategy to consolidate the Company’s distribution business, and
after taking into account the relative cost savings involved, the Company closed its warehouse operations in
Ottawa, Illinois and College Point, New York. Operations at these warehouses ceased by January 31 and the
business conducted there was consolidated with the operations of the Company’s Jack of All Games
distribution facility in Ohio.
As a result of the closures, the Company recorded a charge of $7,028. The charge consisted of: (1) lease
termination costs, representing the fair value of remaining lease payments, net of estimated sublease rent;
(2) disposition of fixed assets, representing the net book value of fixed assets and leasehold improvements;
(3) other exit costs; and (4) an impairment charge with respect to an intangible asset, representing a customer
list relating to the business conducted at the Illinois facility.
These costs are included in general and administrative expense for the year ended October 31, 2003, except
for the intangibles impairment which is included in depreciation and amortization expense, and are
summarized in the table below:
Lease
Termination
Costs
Fixed Asset
Dispositions
Intangibles
Impairments
Other
Exit Costs Total
Provisions during year ended
October 31, 2003 ........................... $ 1,607 $ 999 $ 4,407 $ 15 $ 7,028
Asset write-offs ............................... (65) (999) (4,407) (3) (5,474)
Cash payments ................................ (1,542) — — (12) (1,554)
Remaining Obligations at October 31, 2003 . . $ — $ — $ — $ — $ —
19. SEGMENT INFORMATION
The Company is a publisher and distributor of interactive software games. The Company’s operations
involve similar products and customers worldwide. The products are developed and sold domestically and
internationally. The Company is centrally managed and the chief operating decision makers, the chief
executive and chief operating officers, use consolidated financial information supplemented by sales
information by product category, major product title and platform for making operational decisions and
assessing financial performance. Accordingly, the Company operates in a single segment.
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
17. RESULTS BY QUARTER (UNAUDITED) (Continued)
58