Blizzard 2008 Annual Report Download - page 43

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29
• All foreign currency hedging transactions are backed, in amount and by maturity, by
an identified economic underlying item.
In addition, Activision Blizzard may hedge foreign currency exposure resulting from
foreign currency denominated financial assets and liabilities, consisting primarily of intercompany
receivables and payables, and earnings.
At December 31, 2008 and December 31, 2007, the net notional amount of outstanding
forward foreign exchange contracts was $126 million and $14 million, respectively. A pre-tax net
unrealized gain of $3 million for the year ended December 31, 2008 and a pre-tax net unrealized
loss of $2 million for the year ended December 31, 2007 resulted from the forward foreign
exchange contracts with Vivendi and were recognized in the Consolidated Statement of
Operations.
CONTROLS AND PROCEDURES
1) Definition and Limitations of Disclosure Controls and Procedures.
Our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act) are designed to reasonably ensure that information required to
be disclosed in our reports filed under the Exchange Act is (i) recorded, processed, summarized,
and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated
and communicated to management, including our principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required disclosures. A control
system, no matter how well designed and operated, can provide only reasonable assurance that it
will detect or uncover failures within the Company to disclose material information otherwise
required to be set forth in our periodic reports. Inherent limitations to any system of disclosure
controls and procedures include, but are not limited to, the possibility of human error and the
circumvention or overriding of such controls by one or more persons. In addition, we have
designed our system of controls based on certain assumptions, which we believe are reasonable,
about the likelihood of future events, and our system of controls may therefore not achieve its
desired objectives under all possible future events.
2) Evaluation of Disclosure Controls and Procedures.
Our management, with the participation of our principal executive officer and principal
financial officer, has evaluated the effectiveness of our disclosure controls and procedures at
December 31, 2008, the end of the period covered by this report. Based on this controls
evaluation, and subject to the limitations described above, the principal executive officer and
principal financial officer concluded that, at December 31, 2008, our disclosure controls and
procedures were effective to provide reasonable assurance that information required to be
disclosed by the Company in the reports that it files or submits under the Exchange Act is
(i) recorded, processed, summarized, and reported on a timely basis, and (ii) accumulated and
communicated to management, including our principal executive officer and principal financial
officer, as appropriate to allow timely decisions regarding required disclosures.
3) Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control
over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the