We restated our previously issued financial statements for the fis- cal years ended October 31, 1999, 2000, 2001 and 2002, the interim quarters of 2002 and the first three quarters of 2003 to reflect our revised revenue recognition policy. Under this policy, we recognize as a reduction of net sales a reserve for estimated future price conces- sions in the period in which the sale is recorded. Measurement of the reserve is based on, among other factors, an historical analysis of price concessions, an assessment of field inventory levels and sell- through for each product, current industry conditions and other factors affecting the estimated timing and amount of concessions manage- ment believes will be granted. We previously recognized price con- cession reserves in the period in which we communicated the price concessions to our customers. We also restated our financial state- ments for the fiscal years ended October 31, 2000 and 2001 to increase our provision for returns at October 31, 2000 by approxi- mately $4.9 million for certain sales transactions primarily to retail cus- tomers in fiscal 2000, and to reflect the fiscal 2001 returns as a reduc- tion of the revised October 31, 2000 reserve for returns rather than the previously reported reduction of sales in fiscal 2001. Additionally, fiscal 2000 and 2001 revenues were restated for approximately $0.2 million to adjust for sales cut-off transactions at the end of fiscal 2000. See Notes 2 and 19 to Consolidated Financial Statements for details relating to the restatement. Our 2002 financial statements have been restated as follows: Restatement of Historical Financial Statements As of October 31, 2002 Balance Sheet Data: As Reported As Restated Accounts receivable, net $107,188 $105,576 Prepaid royalties, current $ 13,723 $ 14,215 Deferred tax asset $ 5,392 $ 6,245 Total current assets $328,632 $328,365 Total assets $491,707 $491,440 Accrued expenses and other  current liabilities $ 49,821 $ 50,698 Income taxes payable $ 1,603 $ 1,357 Total current liabilities $131,179 $131,810 Retained earnings $ 87,804 $ 86,906 Total liabilities and stockholders’ equity $491,707 $491,440 Year Ended October 31, 2001 Statement of Operations Data: As Reported As Restated Net sales $448,801 $451,396 Product costs $283,522 $282,279 Royalties $ 18,573 $ 19,875 Cost of sales $306,264 $306,323 Gross profit $142,537 $145,073 Income from operations $ 25,841 $ 28,377 Loss before benefit for income taxes  and cumulative change in  accounting principle* $ (6,660) $ (4,124) Benefit for income taxes* $ (3,417) $ (2,450) Net loss before cumulative change  in accounting principle $ (3,243) $ (1,674) Cumulative change in accounting principle $ (5,337) $ (5,244) Net loss $ (8,580) $ (6,918) Basic net loss per share $ (0.25) $ (0.20) Diluted net loss per share $ (0.25) $ (0.20) Year Ended October 31, 2002 Statement of Operations Data: As Reported As Restated Net sales $793,976 $794,676 Product costs $410,118 $411,518 Royalties $ 80,774 $ 80,442 Cost of sales $499,016 $500,084 Gross profit $294,960 $294,592 Depreciation and amortization $ 11,187 $ 10,829 Income from operations $122,715 $122,705 Income before provision for income taxes $120,948 $120,938 Provision for income taxes $ 49,383 $ 49,375 Net income $ 71,565 $ 71,563 Basic net income per share $ 1.88 $ 1.88 Diluted net income per share $ 1.81 $ 1.81 * As required by Statement of Financial Accounting Standards No. 145, “Rescis- sion of FASB Statements No. 4, 44 and 64, Amendment to FASB Statement No. 13, and Technical Corrections”, the $1,948 net loss on extinguishment of debt for the year ended October 31, 2001, previously classified as an extraor- dinary item, has been reclassified in the As Reported column as follows: $3,165 of loss on extinguishment to non-operating expenses and $1,217 of tax benefit to benefit for income taxes in the above table. We are a leading global publisher of interactive software games designed for personal computers, video game consoles and handheld platforms manufactured by Sony, Microsoft and Nintendo. We also distribute our products as well as third-party products, hardware and accessories to retail outlets in North America through our Jack of All Games subsidiary, and we have sales, marketing and publishing oper- ations in the United Kingdom, France, Germany, Holland, Austria, Italy, Australia, New Zealand and Canada. 11 Overview All applicable amounts relating to the aforementioned  restatements have been reflected in these consolidated financial statements and notes thereto. Our Consolidated Statement of Operations for the year ended October 31, 2001 has been restated as follows: TAKE-TWO INTERACTIVE SOFTWARE, INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial  Condition and Results of Operations (Dollars in thousands, except per share amounts)