Blizzard 2004 Annual Report Download - page 26

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General and administrative expenses for the year ended March 31, 2004 decreased $1.9 million over the same
period last year, from $46.5 million to $44.6 million. As a percentage of consolidated net revenues, general and
administrative expenses remained constant at 5%. The decrease in absolute dollars was primarily due to:
• Lower bad debt expense of approximately $3.9 million.
• The incurrence in the first quarter of fiscal 2003 of $1.0 million of merger related expenses by our publishing
business.
• An approximate $2.0 million charge incurred in fiscal 2003 by our distribution business for the relocation of our
UK distribution facility.
Partially offset by:
• A $5.2 million year-over-year increase in general and administrative employee related costs in both our publishing
and distribution businesses.
Operating Income
% of % of
March 31, Segment March 31, Segment Increase/ Percent
(In thousands) 2004 Net Revs 2003 Net Revs (Decrease) Change
Publishing $ 93,223 14% $79,139 13% $14,084 18%
Distribution 16,594 6 15,708 6 886 6
Consolidated $109,817 12% $94,847 11% $14,970 16%
Publishing operating income for the year ended March 31, 2004 increased $14.1 million from the same period last
year, from $79.1 million to $93.2 million. International publishing operating income for the year ended March 31,
2004 benefited from the positive impact of the year-over-year strengthening of the EUR and the GBP in relation to
the U.S. dollar. Excluding the impact of changes in foreign currency rates, publishing operating income for the year
ended March 31, 2004 increased approximately $7.8 million from the same period last year. This increase is prima-
rily due to:
• Strong performance in both the domestic and international markets of our fiscal 2004 third quarter title releases.
Partially offset by:
• Increased sales and marketing spending.
• The product development charge recorded in the fiscal 2004 third quarter in connection with the cancellation of
ten products.
Distribution operating income for the year ended March 31, 2004 increased slightly over the same period last year,
from $15.7 million to $16.6 million. Distribution operating income for the year ended March 31, 2004 benefited from
the positive impact of the year-over-year strengthening of the EUR and the GBP in relation to the U.S. dollar. Excluding
the impact of changes in foreign currency rates, distribution operating income for the year ended March 31, 2004 was
down slightly by approximately $0.9 million from the same period last year. This decrease is primarily due to an increase
in general and administrative employee related costs.
Investment Income, Net
(In thousands) % of % of
March 31, Consolidated March 31, Consolidated Increase/ Percent
2004 Net Revenue 2003 Net Revenue (Decrease) Change
$6,175 —% $8,560 1% $(2,385) (28%)
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Activision, Inc. — 2004 Annual Report
page 28