Blizzard 2005 Annual Report Download - page 44

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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)
March 31, 2004
% of Consolidated
Net Revenues March 31, 2003
% of Consolidated
Net Revenues Increase/(Decrease) Percent Change
$6,175 —% $8,560 1% $(2,385) (28%)
Investment฀income,฀net฀for฀the฀year฀ended฀March฀31,฀2004฀was฀$6.2฀million฀as฀compared฀to฀$8.6฀million฀for฀the฀year฀ended฀March฀31,฀2003.฀The฀decrease฀was฀primarily฀
due฀to฀interest฀rate฀reductions฀and฀the฀utilization฀of฀excess฀cash฀to฀enter฀into฀structured฀stock฀repurchase฀transactions฀and฀to฀purchase฀treasury฀stock฀during฀the฀year฀
ended฀March฀31,฀2004.฀Premiums฀earned฀on฀structured฀stock฀repurchase฀transactions฀are฀recorded฀in฀additional฀paid-in-capital.
Provision for Income Taxes
(In thousands)
March 31, 2004
% of
Pre-Tax Income March 31, 2003
% of
Pre-Tax Income Increase/(Decrease) Percent Change
$38,277 33% $37,227 36% $1,050 3%
The฀income฀tax฀provision฀of฀$38.3฀million฀for฀the฀year฀ended฀March฀31,฀2004฀reflects฀our฀effective฀income฀tax฀rate฀of฀33%.฀The฀significant฀items฀that฀generated฀the฀
variance฀between฀our฀effective฀rate฀and฀our฀statutory฀rate฀of฀35%฀were฀research฀and฀development฀tax฀credits฀and฀the฀impact฀of฀foreign฀tax฀rate฀differentials,฀partially฀
offset฀by฀an฀increase฀in฀our฀deferred฀tax฀asset฀valuation฀allowance฀and฀state฀taxes.฀The฀realization฀of฀deferred฀tax฀assets฀depends฀primarily฀on฀the฀generation฀of฀future฀
taxable฀income.
page 42
Activision, Inc. — 2005 Annual Report
Management’s Discussion and Analysis of Financial Condition and Results of Operations