Creative 2003 Annual Report Download - page 6

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CONSOLIDATED BALANCE SHEET DATA (US$’000):
As of June 30
2003 2002(1) 2001 2000 1999
Cash and cash equivalents $ 232,053 $ 166,917 $ 168,157 $ 285,757 $ 318,990
Working capital 209,389 165,945 203,180 331,414 400,998
Total assets 646,843 666,378 673,980 1,176,459 805,689
Long-term debt, net of
current maturities 39,027 16,782 22,560 27,051 28,642
Shareholders’ equity 428,837 423,952 381,886 778,638 560,261
Notes:
(1) Financial data for fiscal 2002 includes the results of 3Dlabs Inc., Ltd (“3Dlabs”), see Note 16 of “Notes to Consolidated
Financial Statements,” acquired during fiscal 2002, from the date the acquisition was completed.
(2) In fiscal 2002, Creative adopted Emerging Issues Task Force (“EITF”) Issue No. 01-9, “Accounting for Consideration
Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products).” As a result, certain consideration
paid to distributors and resellers of its products has been reclassified as a revenue offset rather than as selling, general
and administrative expense. Prior years’ financial statements have been reclassified to conform to this presentation.
(3) Included in the results of operations are other charges of: $26.1 million in fiscal 2002 for write-off of in-process
technology arising from the acquisition of 3Dlabs, see Note 16 of “Notes to Consolidated Financial Statements;”
$22.8 million in fiscal 2001 which comprised $8.4 million restructuring charges, $3.2 million fixed assets impairment
write-downs and $11.2 million write-off of other assets acquired from Aureal Semiconductor, Inc. (“Aureal”), see
Note 13 of “Notes to Consolidated Financial Statements;” and in fiscal 2000, the $20.0 million charge relates to the
settlement of all outstanding litigation claims between Aureal and Creative.
(4) As described in Note 10 of “Notes to Consolidated Financial Statements,” Creative was granted a Pioneer Certificate
in 1990 under which income classified as pioneer status income is exempt from tax in Singapore, subject to certain
conditions. The Pioneer Certificate expired in March 2000. Such status had the effect of reducing Creative’s
provision for income taxes by approximately $15.4 million and $26.4 million, or $0.18 and $0.29 per share, for
fiscal 2000 and 1999. The corporate income tax rate in Singapore, which would otherwise be applicable, would have
been 25.5% for fiscal year 2000 and 26% for fiscal year 1999.
Creative has applied for a separate and new Pioneer Certificate. If Creative is awarded this new Pioneer Certificate,
profits under the new Pioneer Certificate will be exempted from tax in Singapore. For fiscal 2000 (covering period
from April 1, 2000 to June 30, 2000), 2001, 2002 and 2003, corporate tax was provided for in full based on the
standard tax rates of 25.5% and 24.5% for fiscal 2000 and 2001 respectively and 22.0% for 2002 and 2003 as the
terms and agreements of the new Pioneer Certificate is currently still under negotiation as at to date. When
awarded, the new Pioneer Certificate is expected to result in the reduction of Creative’s provision for income taxes,
subject to the terms and agreement by the Singapore Comptroller of Income Tax. See Management’s Discussion and
Analysis of Financial Condition and Results of Operations (“MD&A”) for further discussion.