2K Sports 2008 Annual Report Download - page 86

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Our 2008 reorganization expense was mainly comprised of costs to close two development studios in the
third quarter of 2008. The studio closures represent the finalization of our 2007 reorganization plan and
included severance costs, relocation expenses, facility related costs (including fixed assets and lease
termination costs) and professional fees.
As of October 31, 2008, our management and business reorganization was substantially complete. The
following table summarizes the activity in accrued business reorganization costs:
Employee Facility related Professional Total business
termination and relocation fees and reorganization and
costs costs other related costs
Costs incurred through October 31, 2007 $10,143 $ 2,947 $ 4,377 $ 17,467
Utilization through October 31, 2007:
Non-Cash (2,065) — — (2,065)
Cash (7,362) (2,350) (4,225) (13,937)
Accrual as of October 31, 2007(a) $ 716 $ 597 $ 152 $ 1,465
Costs incurred for the year ended October 31,
2008 2,028 1,902 548 4,478
Utilization for the year ended October 31,
2008:
Non-Cash — (446) — (446)
Cash (2,509) (1,426) (466) (4,401)
Accrual as of October 31, 2008(a) $ 235 $ 627 $ 234 $ 1,096
Total costs incurred through October 31, 2008 $12,171 $ 4,849 $ 4,925 $ 21,945
(a) Included in accrued expenses and other current liabilities
5. BUSINESS ACQUISITIONS AND CONSOLIDATION
During the three years ended October 31, 2008, we consummated the acquisitions described below, which
largely reflect our strategy to diversify our business by adding experienced development studios,
intellectual properties and talented personnel resources to our existing infrastructure. The acquisitions
were not considered to be material to our consolidated statements of operations, individually or in the
aggregate. The results of operations and financial positions of these acquisitions are included in our
consolidated financial statements from their respective acquisition dates forward and therefore affect
comparability from period to period. During the year ended October 31, 2008, we paid contingent
consideration of $3,375 for our prior year acquisitions.
Capitalized
Software
Cash and Goodwill and
Development Value of Recorded on Identified
Acquisition Advances Stock Acquisition Intangible
Acquired Business Date Paid Issued Date Assets Contingent Consideration
Mad Doc March 2008 $4,715 $ 1,353 $ 4,617 $1,275 Up to $15,000 payable in cash or stock,
Software LLC based on meeting certain employment
provisions and future product sales.
Illusion Softworks December 2007 5,033 27,875 24,901 8,200 Up to $10,000 based on future product
sales.
Firaxis Games, Inc. November 2005 2,942 12,500 11,085 5,644 Up to $11,250 based on future product
sales, of which $6,188 was paid as of
October 31, 2008.
In March 2008, we acquired the assets of Rockstar New England, formerly known as Mad Doc
Software LLC (‘‘Rockstar New England’’), an independent development studio in North America and
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