Creative 2005 Annual Report Download - page 5

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5
CONSOLIDATED BALANCE SHEET DATA (US$’000):
As of June 30
2005 2004 2003 2002(1) 2001
Cash and cash equivalents $ 187,246 $ 211,077 $ 232,053 $ 166,917 $ 168,157
Working capital 506,527 297,502 209,389 165,945 203,180
Total assets 1,077,474 940,848 646,843 666,378 673,980
Long-term debt, net of
current maturities 209,455 35,614 39,027 16,782 22,560
Shareholders’ equity 581,132 691,497 428,837 423,952 381,886
Notes:
(1) Financial data for fiscal year 2002 includes the results of 3Dlabs Inc., Ltd (“3Dlabs”), which was acquired during fiscal
year 2002, from the date the acquisition was completed.
(2) In fiscal year 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 the following other charges: in fiscal year 2005, a $65.2 million impairment
charge relating to the goodwill and intangible assets of 3Dlabs; in fiscal year 2002, a $26.1 million charge for the write-
off of in-process technology arising from the acquisition of 3Dlabs, and in fiscal year 2001, $22.8 million charges,
which comprised $8.4 million in restructuring charges, $3.2 million in fixed assets impairment write-downs and a $11.2
million write-off of other assets acquired from Aureal Semiconductor, Inc.
(4) As described in Note 10 of “Notes to Consolidated Financial Statements,” Creative was granted a new Pioneer Certificate under
the International Headquarters Award that will expire in March 2010. Under the new Pioneer Certificate, profits arising from
qualifying activities will be exempted from income tax in Singapore, subject to certain conditions. As a result of obtaining the
new Pioneer Certificate, fiscal year 2004 tax write-back includes a $12.3 million reversal of income taxes. The reversal was
related to corporate taxes provided for in full for profits arising from qualifying activities from the commencement date of the
new Pioneer Certificate until the second quarter of fiscal year 2004, based on the standard tax rates of 24.5% for fiscal year
2001 and 22% for fiscal years 2002 and 2003 and 20% for fiscal year 2004. These standard corporate income tax rates
continue to be applicable to profits arising from activities excluded from the new Pioneer Certificate. See Management’s
Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) for further discussion.