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93
24. Quarterly Financial and Market Information (Unaudited)
Special Note—The consummation of the Business Combination has resulted in financial
information of Activision, Inc. being included from the date of the Business Combination
(i.e. from July 9, 2008 onwards), but not for prior periods.
For the quarters ended
December 31,
2008 September 30,
2008 June 30,
2008 March 31,
2008
(Amounts in millions, except per share data)
Net revenues ......................................................................... $1,639 $711 $352 $324
Cost of sales.......................................................................... 1,211 416 106 106
Operating income (loss)........................................................ (148) (194) 44 65
Net income (loss).................................................................. (72) (108) 29 44
Basic earnings (loss) per share.............................................. (0.05) (0.08) 0.05 0.07
Diluted earnings (loss) per share........................................... (0.05) (0.08) 0.05 0.07
For the quarters ended
December 31,
2007 September 30,
2007 June 30,
2007 March 31,
2007
(Amounts in millions, except per share data)
(as adjusted)
Net revenues............................................................................
.
$453 $326 $308 $262
Cost of sales............................................................................
.
163 88 97 88
Operating income....................................................................
.
45 59 49 26
Net income..............................................................................
.
86 48 41 52
Basic earnings per share..........................................................
.
0.15 0.08 0.07 0.09
Diluted earnings per share.......................................................
.
0.15 0.08 0.07 0.09
25. Recently Issued Accounting Standards
In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations” (“SFAS No. 141(R)”). SFAS No. 141(R) expands the definition of a business
combination and requires acquisitions to be accounted for at fair value. These fair value provisions
will be applied to contingent consideration, in-process research and development and acquisition
contingencies. Purchase accounting adjustments will be reflected during the period in which an
acquisition was originally recorded. Additionally, the new standard requires transaction costs and
restructuring charges to be expensed. Furthermore, to the extent the Company has changes to its
uncertain tax positions associated with any subsidiaries acquired in previous business
combinations for which goodwill exists subsequent to December 31, 2008, such changes to the
uncertain tax positions will be recorded in the Company’s Consolidated Statements of Operations
rather than as a reduction in goodwill, which was the accounting treatment in place prior to the
adoption of SFAS 141(R). SFAS No. 141(R) is effective for the Company for acquisitions closing
during and subsequent to the first quarter of 2009.
In June 2007, the FASB ratified the Emerging Issues Task Force’s (“EITF”) consensus
conclusion on EITF 07-03, “Accounting for Advance Payments for Goods or Services to Be Used
in Future Research and Development.” EITF 07-03 addresses the diversity which exists with