Blizzard 2004 Annual Report Download - page 43

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(In thousands)
For the years ended March 31, 2004 2003 2002
Cash flows from operating activities:
Net income $ 77,715 $ 66,180 $ 52,238
Adjustments to reconcile net income to net cash provided by
operating activities:
Deferred income taxes 15,147 3,355 (23,352)
Depreciation and amortization 10,774 11,880 7,350
Amortization and write-offs of capitalized software
development costs and intellectual property licenses 87,922 100,415 62,456
Tax benefit of stock options and warrants exercised 12,417 23,884 48,513
Change in operating assets and liabilities (net of effects
of acquisitions):
Accounts receivable (42,497) 61,922 (2,010)
Inventories (6,850) 1,159 23,152
Software development and intellectual property licenses (115,202) (151,594) (76,993)
Other assets (5,232) 1,836 (1,753)
Accounts payable 23,005 (19,072) 3,357
Accrued expenses and other liabilities 10,204 (8,990) 18,834
Net cash provided by operating activities 67,403 90,975 111,792
Cash flows from investing activities:
Cash used in business acquisitions (net of cash acquired) (3,480) (21,199) —
Capital expenditures (11,976) (11,877) (9,150)
Purchase of short-term investments (195,587) (408,175) —
Proceeds from sales and maturities of short-term investments 195,874 287,145 —
Other — (995) 449
Net cash used in investing activities (15,169) (155,101) (8,701)
Cash flows from financing activities:
Proceeds from issuance of common stock to employees 26,483 20,547 59,836
Proceeds from issuance of common stock pursuant to warrants — — 1,044
Payment on term loan — — (8,550)
Notes payable, net (2,818) (720) (1,792)
Redemption of convertible subordinated notes — — (62)
Proceeds from issuance of common stock pursuant to underwritten
public offering, net of offering costs — 248,072 —
Purchase of structured stock repurchase transactions (52,621) (110,000) —
Settlement of structured stock repurchase transactions 166,521 — —
Purchase of treasury stock (19,996) (93,809) (74)
Net cash provided by financing activities 117,569 64,090 50,402
Effect of exchange rate changes on cash 11,195 6,583 (36)
Net increase in cash and cash equivalents 180,998 6,547 153,457
Cash and cash equivalents at beginning of period 285,554 279,007 125,550
Cash and cash equivalents at end of period $ 466,552 $ 285,554 $279,007
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flows
Activision, Inc. — 2004 Annual Report
page 46