Activision 2012 Annual Report Download - page 69

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At December 31, 2012, future amortization of definite-lived intangible assets is estimated as follows (amounts in millions):
2013 ........................................................................................................................................................................
$24
2014 ........................................................................................................................................................................
20
2015 ........................................................................................................................................................................
10
2016 ........................................................................................................................................................................
6
2017 ........................................................................................................................................................................
4
Thereafter ................................................................................................................................................................
4
Total ........................................................................................................................................................................
$68
We did not record any impairment charges against our intangible assets for the year ended December 31, 2012 and 2011.
In 2010, we considered the continued economic downturn within our industry and the change in the buying habits of casual consumers
while planning for 2011 during the fourth quarter of 2010. This resulted in a significant revision of our outlook for retail sales of software and a
strategy change to, among other things, focus on fewer title releases in the casual genre and discontinue the development of music-based titles. As
we considered this change in strategy to be an indicator of a potential impairment of our intangible assets, we updated our future projected
revenue streams for certain franchises in the casual games and music genres. We performed recoverability tests and, where applicable, measured
the impairment of the related intangible assets in accordance with ASC Subtopic 360-10. This resulted in impairment charges of $67 million,
$9 million and $250 million to license agreements, game engines and internally developed franchises intangible assets, respectively, recorded
within our Activision segment for the year ended December 31, 2010.
12. Current Accrued Expenses and Other Liabilities, and Other Current Assets
Included in “Current accrued expenses and other liabilities” of our consolidated balance sheets are accrued payroll related costs of
$280 million and $363 million at December 31, 2012 and 2011, respectively.
Included in “Other current assets” of our consolidated balance sheets are deferred cost of sales—product costs of $245 million and
$246 million at December 31, 2012 and 2011, respectively.
13. Operating Segments and Geographic Region
Our operating segments are consistent with our internal organizational structure, the manner in which our operations are reviewed and
managed by our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), the manner in which we assess operating
performance and allocate resources, and the availability of separate financial information. Currently, we operate under three operating segments:
Activision, Blizzard and Distribution (see Note 1 of the Notes to the Consolidated Financial Statements). We do not aggregate operating
segments.
The CODM reviews segment performance exclusive of the impact of the change in deferred net revenues and related cost of sales with respect to
certain of our online-enabled games, stock-based compensation expense, restructuring expense, amortization of intangible assets, and impairment
of intangible assets and goodwill. The CODM does not review any information regarding total assets on an operating segment basis and,
accordingly, no disclosure is made. Information on the operating segments and reconciliations of total net revenues and total segment operating
income to consolidated net revenues from external customers and consolidated income before income tax expense for the years ended
December 31, 2012, 2011, and 2010 are presented below (amounts in millions):