Blizzard 2005 Annual Report Download - page 72

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8. GOODWILL
The฀changes฀in฀the฀carrying฀amount฀of฀goodwill฀were฀as฀follows฀(amounts฀in฀thousands):
Publishing Distribution Total
Balance฀as฀of฀March฀31,฀2003 $ 63,194 $4,825 $ 68,019
Goodwill฀acquired฀during฀the฀year 3,763 — 3,763
Issuance฀of฀contingent฀consideration 3,246 — 3,246
Adjustment—prior฀period฀purchase฀allocation 695 — 695
Effect฀of฀foreign฀currency฀exchange฀rates — 770 770
Balance฀as฀of฀March฀31,฀2004 70,898 5,595 76,493
Goodwill฀acquired฀during฀the฀year 16,194 — 16,194
Issuance฀of฀contingent฀consideration 1,191 — 1,191
Adjustment—prior฀period฀purchase฀allocation (2,384) — (2,384)
Effect฀of฀foreign฀currency฀exchange฀rates — 167 167
Balance as of March 31, 2005 $ 85,899 $5,762 $ 91,661
9. ACCRUED EXPENSES
Accrued฀expenses฀were฀comprised฀of฀the฀following฀(amounts฀in฀thousands):
March 31, 2005 2004
Accrued฀royalties฀payable $ 11,851 $ 7,218
Accrued฀selling฀and฀marketing฀costs 17,521 11,456
Affiliate฀label฀program฀payable 20,605 162
Income฀tax฀payable 3,977 9,897
Accrued฀bonus฀and฀vacation฀pay 18,423 20,042
Other 25,690 14,430
Total $ 98,067 $ 63,205
10. OPERATIONS BY REPORTABLE SEGMENTS AND GEOGRAPHIC AREA
We฀operate฀two฀business฀segments:฀(i)฀publishing฀of฀interactive฀entertainment฀software฀and฀(ii)฀distribution฀of฀interactive฀entertainment฀software฀and฀hardware฀products.
Publishing฀refers฀to฀the฀development,฀marketing฀and฀sale฀of฀products฀directly,฀by฀license฀or฀through฀our฀affiliate฀label฀program฀with฀certain฀third-party฀publishers.฀In฀the฀
United฀States,฀we฀primarily฀sell฀our฀products฀on฀a฀direct฀basis฀to฀mass-market฀retailers,฀consumer฀electronics฀stores,฀discount฀warehouses฀and฀game฀specialty฀stores.฀
We฀conduct฀our฀international฀publishing฀activities฀through฀offices฀in฀the฀UK,฀Germany,฀France,฀Italy,฀Spain,฀the฀Netherlands,฀Australia,฀Sweden,฀Canada฀and฀Japan.฀Our฀
products฀are฀sold฀internationally฀on฀a฀direct-to-retail฀basis฀and฀through฀third-party฀distribution฀and฀licensing฀arrangements฀and฀through฀our฀wholly-owned฀distribution฀
subsidiaries฀located฀in฀the฀UK,฀the฀Netherlands฀and฀Germany.
page 71
Activision, Inc. — 2005 Annual Report