Activision 2012 Annual Report Download - page 66

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48
6. Software development and intellectual property licenses
The following table summarizes the components of our software development and intellectual property licenses (amounts in millions):
At
December 31,
2012
At
December 31,
2011
Internally developed software costs .........................................................................
$159
$115
Payments made to third-party software developers .................................................
134
84
Total software development costs ............................................................................
$293
$199
Intellectual property licenses ....................................................................................
$41
$34
Amortization, write-offs and impairments of capitalized software development costs and intellectual property licenses are comprised
of the following (amounts in millions):
For the Years Ended
December 31,
2012
2011
2010
Amortization ............................................................................................................................
$205
$258
$322
Write-offs and impairments .....................................................................................................
12
60
63
7. Restructuring
On February 3, 2011, the Board of Directors of the Company authorized a restructuring plan (the “2011 Restructuring”) involving a
focus on the development and publication of a reduced slate of titles on a going-forward basis. The 2011 Restructuring included the
discontinuation of the development of music-based games, the closure of the related business unit and the cancellation of other titles then in
production, along with a related reduction in studio headcount and corporate overhead.
The following table details the amount of the 2011 Restructuring reserves included in “Accrued Expenses and Other Liabilities” in the
consolidated balance sheet at December 31, 2012 and 2011 (amounts in millions):
Severance
Facilities
costs
Contract
termination
costs
Total
Balance at January 1, 2011 ......................................................
$—
$—
$—
$—
Costs charged to expense ..........................................................
20
4
1
25
Costs paid or otherwise settled .................................................
(16)
(1)
(1)
(18)
Balance at December 31, 2011 .................................................
$4
$3
$—
$7
Costs paid or otherwise settled .................................................
(4)
—
—
(4)
Balance at December 31, 2012 .................................................
$—
$3
$—
$3
The 2011 Restructuring charges for the year ended December 31, 2011 was $25 million. These charges, as well as the 2011
Restructuring reserve balances at December 31, 2012 and 2011, were recorded within our Activision segment. We completed the 2011
Restructuring as of December 31, 2011 and we do not expect to incur significant additional restructuring expenses relating thereto.
We have also completed our implementation of our organizational restructuring plan as a result of the Business Combination. There
were minimal cash payments and additional charges in our consolidated statement of operations for the year ended December 31, 2011 relating to
that restructuring and we do not expect to incur additional restructuring expenses relating thereto.