-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wr3SXiB6blsvJ9DYbSXy/ghuQyULPBqMZd2Wit+wxxbHuF6uR0QEiRQXsB8CQ2Po xWzkQNfSKOrI21a5W9YnFQ== 0000950138-05-000083.txt : 20050207 0000950138-05-000083.hdr.sgml : 20050207 20050207160753 ACCESSION NUMBER: 0000950138-05-000083 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050207 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050207 DATE AS OF CHANGE: 20050207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACTIVISION INC /NY CENTRAL INDEX KEY: 0000718877 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 954803544 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15839 FILM NUMBER: 05580636 BUSINESS ADDRESS: STREET 1: 3100 OCEAN PARK BLVD STREET 2: STE 1000 CITY: SANTA MONICA STATE: CA ZIP: 90405 BUSINESS PHONE: 3102552000 MAIL ADDRESS: STREET 1: 11601 WILSHIRE BLVD 3RD FL STREET 2: STE 1000 CITY: LOS ANGELES STATE: CA ZIP: 90025 FORMER COMPANY: FORMER CONFORMED NAME: MEDIAGENIC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ACTIVISION INC DATE OF NAME CHANGE: 19880829 8-K 1 feb_8-k.txt ACTIVIS\2005 FILINGS\FEB 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) February 7, 2005 (February 7, 2005) ------------------------------------ ACTIVISION, INC. - ------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-12699 95-4803544 - ------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 3100 Ocean Park Blvd., Santa Monica, CA 90405 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (310) 255-2000 Registrant's telephone number, including area code - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On February 7, 2005, Activision, Inc. (the "Company") issued a press release announcing its financial results for the fiscal quarter ended December 31, 2004. A copy of the press release is attached hereto as Exhibit 99.1. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. Item 9.01 Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release of the Company, dated February 7, 2005. Use of Non-GAAP Financial Information - ------------------------------------- The Company's press release, and other communications from time to time, include certain non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements. The attached press release utilizes a measure of free cash flow. Free cash flow is defined as operating cash flow less capital expenditures. The Company's management believes that although free cash flow does not represent the amount of money available for the Company's discretionary spending because certain obligations of the Company must be funded out of free cash flow, it nevertheless provides a useful measure of liquidity for assessing the amount of cash available for general corporate and strategic purposes after funding operating activities and capital expenditures, and deferred costs. In addition, return on invested capital, also included in the attached press release, is a non-GAAP financial measure. Management defines "return on invested capital" as net income, less investment income plus tax paid on investment income. Invested capital is calculated as average total assets (over a trailing four-quarter period), less average cash and short term investments (over a trailing four-quarter period), less average non-interest bearing current liabilities (over a trailing four-quarter period). Management believes that return on invested capital is useful because it provides investors with additional useful information for evaluating the efficiency of the Company's capital deployed in its operations. Return on invested capital does not consider whether the business is financed with debt or equity, but rather calculates a return on all capital invested in the business. The non-GAAP financial measures used by the Company in the attached press release may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance or liquidity prepared in accordance with GAAP. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ACTIVISION, INC. By:/s/ Ronald Doornink --------------------- Name: Ronald Doornink Title: President Date: February 7, 2005 3 EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Press Release of Activision, Inc., dated February 7, 2005. 4 EX-99 2 ex99-1.txt EX_99-1 Exhibit 99.1 Contacts: Bill Chardavoyne Chief Financial Officer (310) 255-2229 bchardavoyne@activision.com Kristin Mulvihill Southey Vice President, Investor Relations (310) 255-2635 ksouthey@activision.com Maryanne Lataif Vice President, Corporate Communications (310) 255-2704 mlataif@activision.com FOR IMMEDIATE RELEASE ACTIVISION REPORTS RECORD THIRD QUARTER AND NINE MONTH FISCAL 2005 RESULTS - Q3 Net Revenues Increase 34% Year Over Year -- Largest Quarter in Company's History - - Net Revenues for Nine Months Grow 53% - - Company Increases Net Revenue and E.P.S. Outlook for FY 2005 - - Company Expects Net Revenue, E.P.S. and Operating Margin Growth for FY 2006 - Santa Monica, CA - February 7, 2005 - Activision, Inc. (Nasdaq: ATVI) today announced record financial results for the third quarter and nine months ended December 31, 2004. Net revenues for the third quarter were $680.1 million or 34% higher, as compared to $508.5 million for the third quarter of fiscal year 2004. Net income for the third quarter rose to $97.3 million, a 26% increase, compared with net income of $77.0 million for the previous fiscal third quarter. Diluted earnings per share grew 19% to $0.63 per diluted share, compared to $0.53 per diluted share reported for the prior fiscal third quarter. For the nine-month period ended December 31, 2004, the company announced record net revenues of $1.2 billion, an increase of 53%, as compared to net revenues of $784.8 million reported for the nine-month period last fiscal year. The company also announced record earnings per diluted share for the nine-month period of $0.87, an increase of 78%, as compared to earnings per diluted share of $0.49 for the same period last fiscal year. (more) Activision Reports Record Q3 2005 Earnings Results Activision increased its net revenues and earnings per diluted share outlook for fiscal year 2005 to $1.352 billion in net revenues and earnings per diluted share of $0.87 from the company's prior outlook of $1.265 billion in net revenues and diluted earnings per share of $0.81. The company's revised outlook represents a 43% increase in net revenues and a 61% increase in earnings per diluted share year over year. The company also increased its outlook for the fourth quarter of fiscal year 2005 to $150 million in net revenues from $128 million, despite moving id Software's DOOM 3 for the Xbox and the DOOM 3 PC expansion pack to fiscal 2006. For the fourth quarter, the company expects earnings per diluted share of $0.01. During the quarter, Activision plans to release Spider-Man 2(TM) and Tony Hawk's Underground 2 Remix for the PSP simultaneously with the North American release of the new handheld platform, as well as, three titles from LucasArts Entertainment that will be released in Europe - Star Wars(R) Knights of the Old Republic(R)II: The Sith Lords(TM), Mercenaries(TM) and Star Wars Republic Commando(TM). In addition, Shrek 2(TM) will be the first of the company's fiscal 2005 games to enter Sony Computer Entertainment America's "Greatest Hits," Microsoft's "Platinum Family Hits" and Nintendo of America's "Player's Choice" programs. Robert Kotick, Chairman and CEO of Activision, Inc., commented, "For the first nine months of fiscal year 2005, net revenues have already exceeded net revenues in fiscal 2004, resulting in 13 consecutive years of revenue growth for Activision. We ended the quarter with more than $713 million in cash and short term investments and for the trailing 12 months, our free cash flow was $107 million and return on invested capital was 46%. Our results to date were driven by the release of over 10 one million-unit selling games. Four of these titles sold in excess of two million units. These proven franchises should allow us to continue improving our market position domestically and internationally." Kotick continued, "As we look toward the future, we are very excited about the opportunities ahead. The combination of our product slate, the emerging opportunities created by new hardware technologies and the ever increasing installed base of current console hardware should enable us to continue expanding our net revenues, earnings and operating margin. In fiscal 2006, we will release the strongest game slate in our history which includes new versions of our top-selling fiscal 2005 franchises -- Tony Hawk, Spider-Man, Shrek, Call of Duty, DOOM, and X-Men, as well as games based on True Crime, Fantastic Four, Madagascar, Quake, The Movies, and an original new property from Neversoft, the development team behind the Tony Hawk series." Page 2 Activision Reports Record Q3 2005 Earnings Results Business Highlights Activision's third quarter results were driven by solid performance of its titles across all platforms worldwide. During the quarter, the company had five top 10-best selling games in the U.S., according to NPD -- Call of Duty: Finest Hour(TM), which has established itself as a new console franchise for the company, Tony Hawk's Underground 2, DOOM 3(TM), Rome: Total War(TM) and Spider-Man 2 for the Nintendo DS. Between October and December, Activision released five new games: Tony Hawk's Underground 2, an all-new Tony Hawk experience for PlayStation(R) 2 computer entertainment system, Xbox(R) video game system from Microsoft, Nintendo(R) Game Cube, Nintendo Game Boy(R) Advance and PC; Call of Duty: Finest Hour, a World War II first-person action game for the PlayStation 2 computer entertainment system, Xbox video game system from Microsoft and Nintendo Game Cube; Lemony Snicket's: A Series of Unfortuante Events(TM) for the PlayStation 2 computer entertainment system, Xbox video game system from Microsoft, Nintendo Game Cube, Nintendo Game Boy Advance and PC; Vampire(R): The Masquerade Bloodlines(TM) for the PC and Spider-Man 2 for the Nintendo DS. Other business highlights include: o On January 20, 2005, Activision announced that the company further strengthened its next-generation development capabilities through the acquisition of game developer Vicarious Visions, the creative studio behind the #1 best-selling third-party Nintendo(R) DS title, Spider-Man 2. Vicarious Visions' proven proprietary Alchemy(TM) middleware technology and tools will be combined with Activision's next-generation tools and libraries to further enhance the company's overall development efforts. o For calendar 2004, Activision had a number of top-selling titles: o Spider-Man 2 was the #1 movie-based game in the U.S., according to NPD Funworld. For the calendar year, the Spider-Man franchise sold more than seven million units worldwide. Spider-Man 2 for the Nintendo DS was the #1 best-selling third-party title for the platform in the U.S. for the calendar year, according to NPD Funworld. o Tony Hawk's Underground 2 was the #9 best selling title in the U.S., according to NPD Funworld. The Tony Hawk brand sold more than six million units worldwide in the calendar year. Page 3 Activision Reports Record Q3 2005 Earnings Results o The Call of Duty franchise sold more than four and a half million units worldwide in the calendar year and was the best selling game franchise based on a new intellectual property. o Shrek 2 was the #1 best-selling children's video game in the U.S., according to NPD Funworld. The Shrek 2 franchise sold more than four million units worldwide in the calendar year. o According to NPD Techworld, Activision was the fastest growing top-10 U.S. PC publisher for calendar 2004. The company had a 10% PC market share, the highest in its history, and was the only publisher to have three top-10 games for the year - DOOM 3, Call of Duty(TM) and Rome: Total War. Company Outlook Activision also provided its outlook for fiscal year 2006, which begins in April 2005, of $1.43 billion in net revenues and earnings per diluted share of $0.91. For the first quarter of fiscal year 2006, the company expects net revenues of $215 million and earnings per diluted share of $0.02. Diluted earnings per share does not include the impact of adopting FASB 123(R), which relates to the expensing of stock options and other share-based payments. Non-GAAP Financial Measures The company's press release includes the non-GAAP financial measures of "free cash flow" and "return on invested capital." A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measure appears at the end of this press release. Conference Call Today at 4:30 p.m. EDT, Activision's management will host a conference call and Webcast to discuss its third quarter fiscal year 2005 results and outlook. The company welcomes all members of the financial and media communities to visit the "Investor Relations" area of www.activision.com to listen to the conference call via live Webcast or to listen to the call live by dialing into (913) 981-4910 in the U.S. Page 4 Activision Reports Record Q3 2005 Earnings Results About Activision Headquartered in Santa Monica, California, Activision, Inc. is a leading worldwide developer, publisher and distributor of interactive entertainment and leisure products. Founded in 1979, Activision posted net revenues of $948 million for the fiscal year ended March 31, 2004. Activision maintains operations in the U.S., Canada, the United Kingdom, France, Germany, Italy, Japan, Australia, Scandinavia, Spain and the Netherlands. More information about Activision and its products can be found on the company's World Wide Web site, which is located at www.activision.com. Note: The statements made in this press release that are not historical facts are "forward looking" statements. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. The company cautions readers of this press release that a number of important factors could cause Activision's actual future results to differ materially from those expressed in any such forward-looking statements. Such factors include, without limitation, product delays, retail acceptance of our products, industry competition, rapid changes in technology and industry standards, protection of proprietary rights, maintenance of relationships with key personnel, vendors and third-party developers, international economic and political conditions, integration of recently acquired subsidiaries and identification of suitable future acquisition opportunities. These important factors and other factors that potentially could affect the company's financial results are described in our filings with the Securities and Exchange Commission, including the company's most recent Annual Report on Form 10 K and Quarterly Reports on Form 10-Q. Readers of this press release are referred to such filings. The company may change its intention, belief or expectation, at any time and without notice, based upon any changes in such factors, in the company's assumptions or otherwise. The company undertakes no obligation to release publicly any revisions to its forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. (Tables to Follow) ACTIVISION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except earnings per share data) Nine Months Quarter ended December 31, ended December 31, 2004 2003 2004 2003 ---------- ------------ ----------- ----------- Net revenues $680,094 $508,511 $1,201,996 $784,759 Costs and expenses: Cost of sales - product costs 316,494 235,301 528,759 384,302 Cost of sales - software royalties and amortization 58,200 23,680 116,846 50,575 Cost of sales - intellectual property licenses 22,598 9,464 57,797 27,008 Product development 25,068 50,354 66,054 79,828 Sales and marketing 105,248 58,503 200,216 102,025 General and administrative 15,407 14,248 44,854 35,847 -------- -------- ---------- -------- Total operating expenses 543,015 391,550 1,014,526 679,585 Operating income 137,079 116,961 187,470 105,174 Investment income, net 3,197 1,464 7,954 4,125 Income before provision for income taxes 140,276 118,425 195,424 109,299 Provision for income taxes 43,014 41,444 60,662 38,248 -------- -------- ---------- -------- Net income $97,262 $76,981 $134,762 $71,051 ======== ======== ========== ======== Basic earnings per share $0.70 $0.58 $0.97 $0.54 Weighted average common shares outstanding 139,820 133,145 138,700 132,488 Diluted earnings per share $0.63 $0.53 $0.87 $0.49 Weighted average common shares outstanding assuming dilution 155,592 146,027 154,418 143,679 Share and earnings per share data have been restated to reflect our three-for-two stock split for shareholders of record as of February 23, 2004, paid March 15, 2004. ACTIVISION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, March 31, 2004 2004 ------------- ------------- ASSETS Current assets: Cash, cash equivalents and short-term investments $ 713,180 $ 587,649 Accounts receivable, net 344,894 62,577 Inventories 41,656 26,427 Software development 61,550 58,320 Intellectual property licenses 19,908 32,115 Deferred income taxes 13,689 26,127 Other current assets 17,424 18,660 ------------ ------------- Total current assets 1,212,301 811,875 ============ ============= Software development 13,384 28,386 Intellectual property licenses 11,624 16,380 Property and equipment, net 26,798 25,539 Deferred income taxes - 9,064 Other assets 2,530 1,080 Goodwill 77,992 76,493 ------------ ------------- Total assets $ 1,344,629 968,817 ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 156,376 $ 72,874 Accrued expenses 155,057 63,205 ------------ ------------- Total current liabilities 311,433 136,079 Deferred income taxes 12,712 - ------------ ------------- Total liabilities 324,145 136,079 Shareholders' equity: Common stock - - Additional paid-in capital 803,753 758,626 Retained earnings 343,041 208,279 Treasury stock (144,128) (144,128) Accumulated other comprehensive income 17,818 9,961 ------------ ------------- Total shareholders' equity 1,020,484 832,738 ------------ ------------- Total liabilities and shareholders' equity $ 1,344,629 $ 968,817 ============ =============
ACTIVISION, INC. AND SUBSIDIARIES FINANCIAL INFORMATION For the Quarter and Nine Months Ended December 31, 2004 and 2003 (Amounts in thousands) Percent Increase Quarter Ended (Decrease) December 31, 2004 December 31, 2003 Amount % of Total Amount % of Total Geographic Revenue Mix United States $ 344,342 51% $ 252,114 50% 37% International 335,752 49% 256,397 50% 31% ---------- ---- --------- ---- --- Total net revenues $ 680,094 100% $ 508,511 100% 34% ---------- ---- --------- ---- --- Activity/Platform Mix Publishing: Console $ 382,400 75% $ 304,996 80% 25% Hand-held 63,243 12% 13,367 3% 373% PC 68,410 13% 64,558 17% 6% ---------- ---- --------- ---- --- Total publishing $ 514,053 76% $ 382,921 75% 34% ---------- ---- --------- ---- --- Distribution: Console $ 134,503 81% $ 102,979 82% 31% Hand-held 7,923 5% 6,917 6% 15% PC 23,615 14% 15,694 12% 50% ---------- ---- --------- ---- --- Total distribution $ 166,041 24% $ 125,590 25% 32% ---------- ---- --------- ---- --- Total net revenues $ 680,094 100% $ 508,511 100% 34% ========== ==== ========= ==== === Percent Increase Nine Months Ended (Decrease) December 31, 2004 December 31, 2003 Amount % of Total Amount % of Total Geographic Revenue Mix United States $ 627,238 52% $ 381,303 49% 64% International 574,758 48% 403,456 51% 42% ------------ ---- --------- ---- --- Total net revenues $ 1,201,996 100% $ 784,759 100% 53% ------------ ---- --------- ---- --- Activity/Platform Mix Publishing: Console $ 647,069 69% $ 439,499 77% 47% Hand-held 105,342 11% 22,150 4% 376% PC 189,689 20% 107,473 19% 76% ------------ ---- --------- ---- ---- Total publishing $ 942,100 78% $ 569,122 73% 66% ------------ ---- --------- ---- ---- Distribution: Console $ 203,626 78% $ 171,509 79% 19% Hand-held 15,134 6% 14,559 7% 4% PC 41,136 16% 29,569 14% 39% ------------ ---- --------- ---- ---- Total distribution $ 259,896 22% $ 215,637 27% 21% ------------ ---- --------- ---- ---- Total net revenues $ 1,201,996 100% $ 784,759 100% 53% ============ ==== ========= ==== ====
ACTIVISION, INC. AND SUBSIDIARIES FINANCIAL INFORMATION For the Quarter and Nine Months Ended December 31, 2004 and 2003 Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended December 31, 2004 December 31, 2003 December 31, 2004 December 31, 2003 Publishing Net Revenues PC 13% 17% 20% 19% - ----------------------------------- ----------- ------------ ------------ ------------ Console 75% 80% 69% 77% - ----------------------------------- ----------- ------------ ------------ ------------ PlayStation 2 44% 48% 41% 44% Microsoft Xbox 21% 20% 18% 22% Nintendo GameCube 10% 10% 10% 8% Playstation 0% 2% 0% 3% Hand-held 12% 3% 11% 4% - ----------------------------------- ----------- ------------ ------------ ------------ Game Boy Advance 10% 3% 10% 4% Nintendo Dual Screen 2% 0% 1% 0% - ----------------------------------- ----------- ------------ ------------ ------------ Total publishing net revenues 100% 100% 100% 100% ====================================== =========== ============ ============ ============
ACTIVISION, INC. AND SUBSIDIARIES Non-GAAP Disclosures Free Cash Flow (In thousands) Three Months Three Months Three Months Three Months Ended Ended Ended Ended 12/31/2004 9/30/2004 6/30/2004 3/31/2004 Net Cash Provided by (Used In) Operating Activities $ 85,668 $ 62,846 $ (52,136) $ 21,069 Less: Capital Expenditures $ (3,587) $ (2,562) $ (1,881) $ (2,521) ---------- ---------- --------- -------- Free Cash Flow $ 82,081 $ 60,284 $ (54,017) $ 18,548 Trailing Twelve Month Free Cash Flow $ 106,896 $ 121,998 $ 30,779 $ 55,427
ACTIVISION, INC. AND SUBSIDIARIES Non-GAAP Disclosures Return on Invested Capital (In thousands) Three Months Three Months Three Months Three Months NET OPERATING PROFIT AFTER TAXES Ended Ended Ended Ended 12/31/2004 9/30/2004 6/30/2004 3/31/2004 Net income $ 97,262 $ 25,543 $ 11,957 $ 6,664 Less: Investment income (3,197) (2,645) (2,112) (2,051) Tax effect on Investment income (B) 991 846 697 677 ---------- ----------- --------- -------- Net Operating Profit After Taxes $ 95,056 $ 23,744 $ 10,542 $ 5,290 Trailing Twelve Month Net Operating Profit After Taxes $ 134,632 $ 115,576 $ 80,826 $ 73,630 INVESTED CAPITAL Total assets (A) $1,344,629 $1,104,169 $985,841 $968,817 Less: Cash and short term investments (A) 713,180 606,087 539,146 587,649 Current liabilities (A) 311,433 216,342 132,092 136,079 ---------- ----------- --------- -------- Invested capital $ 320,016 $ 281,740 $314,603 $245,089 Trailing Twelve Month Invested Capital (A) 290,362 272,856 265,585 247,330 Return on Invested Capital 30% 8% 3% 2% Trailing Twelve Month Return on Invested Capital 46% 42% 30% 30% (A) Amounts for the trailing twelve months represent averages of the previous four fiscal quarters (B) Tax effect represents investment income multiplied by our effective tax rate.
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