Blizzard 2005 Annual Report Download - page 37

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RESULTS OF OPERATIONS—FISCAL YEARS ENDED MARCH 31, 2004 AND 2003
Net฀income฀for฀the฀year฀ended฀March฀31,฀2004฀was฀$77.7฀million฀or฀$0.40฀per฀diluted฀share,฀as฀compared฀to฀$66.2฀million฀or฀$0.32฀per฀diluted฀share฀for฀the฀year฀ended฀
March฀31,฀2003.
Net Revenues
The฀following฀table฀details฀our฀consolidated฀net฀revenues฀by฀business฀segment฀and฀our฀publishing฀net฀revenues฀by฀territory฀for฀the฀years฀ended฀March฀31,฀2004฀and฀2003฀
(in฀thousands):
Year ended March 31, 2004 2003 Increase/(Decrease) Percent Change
Publishing฀net฀revenues
฀ North฀America $ 446,812 $ 432,261 $14,551 3%
฀ Europe 197,300 164,984 32,316 20%
฀ Other 21,620 18,730 2,890 15%
฀ Total฀international 218,920 183,714 35,206 19%
Total฀publishing฀net฀revenues 665,732 615,975 49,757 8%
Distribution฀net฀revenues 281,924 248,141 33,783 14%
Consolidated฀net฀revenues $ 947,656 $ 864,116 $83,540 10%
Consolidated฀net฀revenues฀increased฀10%฀from฀$864.1฀million฀for฀the฀year฀ended฀March฀31,฀2003฀to฀$947.7฀million฀for฀the฀year฀ended฀March฀31,฀2004.฀This฀increase฀was฀
generated฀by฀both฀our฀publishing฀and฀distribution฀businesses.฀The฀increase฀in฀consolidated฀net฀revenues฀was฀driven฀by฀the฀following:
•฀ ฀Strong฀performance฀of฀our฀fiscal฀2004฀third฀quarter฀releases฀of฀
True Crime: Streets of L.A.
฀and฀
Tony Hawk’s Underground
฀for฀the฀PS2,฀Xbox฀and฀GameCube฀and฀
Call of Duty
฀for฀the฀PC.฀
We฀continued฀to฀see฀strong฀sales฀of฀these฀titles฀through฀March฀2004.฀In฀addition,฀we฀had฀strong฀results฀from฀several฀other฀titles฀released฀during฀fiscal฀2004฀including,฀
Return to Castle Wolfenstein, X2: Wolverine’s Revenge, Cabela’s Dangerous Hunts, Cabela’s Deer Hunt 2004 Season,
฀and฀in฀select฀European฀markets,฀
Jedi Knight: Jedi Academy
.฀We฀also฀had฀strong฀catalog฀
sales฀from฀a฀number฀of฀our฀franchises,฀including฀Spider-Man.฀Catalog฀sales฀are฀sales฀of฀titles฀released฀prior฀to฀the฀current฀fiscal฀year.
•฀ ฀Publishing฀console฀net฀revenues฀increased฀by฀9%฀from฀$466.1฀million฀for฀the฀year฀ended฀March฀31,฀2003฀to฀$508.4฀million฀for฀the฀year฀ended฀March฀31,฀2004.฀As฀
expected,฀within฀the฀mix฀of฀specific฀consoles,฀net฀revenues฀from฀the฀sale฀of฀software฀for฀the฀prior฀generation฀console฀hardware฀systems,฀such฀as฀PS1,฀continued฀to฀
decline฀while฀the฀net฀revenues฀from฀the฀sale฀of฀software฀for฀the฀current฀generation฀of฀console฀hardware฀systems฀continued฀to฀grow.
•฀ ฀Net฀revenues฀were฀positively฀impacted฀from฀titles฀selling฀at฀higher฀average฀retail฀prices฀throughout฀fiscal฀2004฀as฀compared฀to฀fiscal฀2003.฀As฀a฀result฀of฀the฀strong฀
performance฀of฀our฀key฀fiscal฀2004฀releases,฀we฀were฀able฀to฀maintain฀the฀original฀price฀points฀for฀those฀titles฀for฀an฀extended฀period฀of฀time.
•฀ ฀International฀net฀revenues฀benefited฀from฀the฀strong฀year-over-year฀strengthening฀of฀the฀Euro฀(“EUR”)฀and฀Great฀British฀Pound฀(“GBP”)฀in฀relation฀to฀the฀U.S.฀dollar.฀
We฀estimate฀that฀foreign฀exchange฀rates฀increased฀reported฀net฀revenues฀by฀approximately฀$52.1฀million.฀Excluding฀the฀impact฀of฀changing฀foreign฀currency฀rates,฀
our฀international฀net฀revenues฀increased฀4%฀year-over-year.
•฀ ฀The฀increase฀in฀publishing฀net฀revenues฀was฀offset฀by฀fewer฀titles฀released฀in฀fiscal฀2004฀as฀compared฀to฀fiscal฀2003.
page 35
Activision, Inc. — 2005 Annual Report