Blizzard 2003 Annual Report Download - page 23

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buying patterns and our product release schedule focusing on those patterns. Net revenues typically are
significantly higher during the fourth calendar quarter, primarily due to the increased demand for con-
sumer software during the year-end holiday buying season. Accordingly, we believe that period-to-period
comparisons of our operating results are not necessarily meaningful and should not be relied upon as
indications of future performance.
The following table is a comparative breakdown of our quarterly results for the immediately preceding
eight quarters (amounts in thousands, except per share data):
Restated(1)
Quarter March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30,
ended 2003(2) 2002 2002 2002 2002 2001 2001 2001
Net revenues $125,001 $378,685 $169,172 $191,258 $164,912 $371,341 $139,604 $110,577
Operating
income (loss) (14,444) 66,761 11,334 31,196 16,862 61,801 3,144 (1,235)
Net income
(loss) (7,957) 44,347 9,086 20,704 10,884 39,110 2,215 29
Basic earnings
(loss) per
share (0.08) 0.44 0.09 0.23 0.13 0.50 0.03 0.00
Diluted
earnings
(loss) per
share (0.08) 0.42 0.08 0.21 0.12 0.44 0.03 0.00
(1) Consolidated financial information has been restated for the effect of our three-for-two stock split effected in the form of a 50% stock divi-
dend to shareholders of record as of May 16, 2003, payable June 6, 2003.
(2) See Note 1, “Summary of Significant Accounting Policies—Software Development Costs and Intellectual Property Licenses” of the Notes to
the Consolidated Financial Statements included elsewhere in this Annual Report.
Liquidity and Capital Resources
As of March 31, 2003, our primary source of liquidity is comprised of $285.6 million of cash and cash
equivalents and $121.4 million of short-term investments. We believe that we have sufficient working cap-
ital ($422.5 million at March 31, 2003), as well as proceeds available from our international credit facilities
(described below), to finance our operational requirements for at least the next twelve months, including
purchases of inventory and equipment, the funding of the development, production, marketing and sale
of new products and the acquisition of intellectual property rights for future products from third parties.
We actively manage our capital structure and balance sheet as a component of our overall business strat-
egy. When we determine that market conditions are appropriate, we may seek to achieve long-term value
for the shareholders through, among other things, new debt or equity financings or refinancings, share
repurchases and other transactions involving our equity or debt securities.
Cash Flows. Our cash and cash equivalents were $285.6 million at March 31, 2003 compared to $279.0 mil-
lion at March 31, 2002. Activity in cash and cash equivalents for the year ended March 31, 2003 included
$91.0 million and $64.1 million provided by operating and financing activities, respectively, offset by
$155.1 million utilized in investing activities. The principal components comprising cash flows from oper-
ating activities included favorable operating results, tax benefits from stock option and warrant exercises
and decreases in accounts receivable, partially offset by the timing of payments on accounts payable and
our continued investment in software development and intellectual property licenses. We spent approxi-
mately $151.6 million and $77.0 million in the year ended March 31, 2003 and 2002, respectively, in con-
nection with the acquisition of publishing or distribution rights for products being developed by third
parties, the execution of new license agreements granting us long-term rights to intellectual property of
Activision 2003