Blizzard 2005 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2005 Blizzard annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

for฀revolving฀loans฀up฀to฀EUR฀0.5฀million฀($0.6฀million)฀as฀of฀both฀March฀31,฀2005฀and฀2004,฀bore฀interest฀at฀a฀Eurocurrency฀rate฀plus฀2.5%,฀is฀collateralized฀by฀certain฀of฀
the฀subsidiary’s฀property฀and฀equipment฀and฀has฀no฀expiration฀date.฀No฀borrowings฀were฀outstanding฀against฀the฀German฀Facility฀as฀of฀March฀31,฀2005฀or฀2004.
Developer and Intellectual Property Contracts
In฀the฀normal฀course฀of฀business฀we฀enter฀into฀contractual฀arrangements฀with฀third-parties฀for฀the฀development฀of฀products,฀as฀well฀as฀for฀the฀rights฀to฀intellectual฀property.฀
Under฀these฀agreements,฀we฀commit฀to฀provide฀specified฀payments฀to฀a฀developer,฀or฀intellectual฀property฀holder,฀based฀upon฀contractual฀arrangements.฀Typically,฀the฀
payments฀ to฀ third-party฀ developers฀ are฀ conditioned฀upon฀ the฀ achievement฀by฀ the฀ developers฀of฀ contractually฀ specified฀ development฀ milestones.฀ These฀ payments฀ to฀
third-party฀developers฀and฀intellectual฀property฀holders฀typically฀are฀deemed฀to฀be฀advances฀and฀are฀recoupable฀against฀future฀royalties฀earned฀by฀the฀developer฀or฀intel-
lectual฀property฀holder฀based฀on฀the฀sale฀of฀the฀related฀game.฀Assuming฀all฀contractual฀provisions฀are฀met,฀the฀total฀future฀minimum฀contract฀commitment฀for฀contracts฀
in฀place฀as฀of฀March฀31,฀2005฀is฀approximately฀$62.2฀million,฀which฀is฀scheduled฀to฀be฀paid฀as฀follows฀(amounts฀in฀thousands):
Year ended March 31,
2006 $ 45,557
2007 7,975
2008 5,775
2009 2,900
Total $ 62,207
Marketing Commitments
In฀connection฀with฀certain฀intellectual฀property฀right฀acquisitions฀and฀development฀agreements,฀we฀will฀commit฀to฀spend฀specified฀amounts฀for฀marketing฀support฀for฀
the฀related฀game(s)฀which฀is฀to฀be฀developed฀or฀in฀which฀the฀intellectual฀property฀will฀be฀utilized.฀Assuming฀all฀contractual฀provisions฀are฀met,฀the฀total฀future฀minimum฀
marketing฀commitment฀for฀contracts฀in฀place฀as฀of฀March฀31,฀2005฀is฀approximately฀$28.8฀million,฀which฀is฀scheduled฀to฀be฀paid฀as฀follows฀(amounts฀in฀thousands):
Year ended March 31,
2006 $ 18,759
2007 2,500
2008 7,500
Total $ 28,759
page 78
Activision, Inc. — 2005 Annual Report
Notes to Consolidated Financial Statements