Blizzard 2009 Annual Report Download - page 25

Download and view the complete annual report

Please find page 25 of the 2009 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 105

  • 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
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105

13
FortheyearendedDecember31,2007,theproformaActivisionBlizzardfinancialinformationis
comprisedofActivision,Inc.’sfinancialinformationforeachquarterofcalendaryear2007togetherwith
ActivisionBlizzard’sreportedfinancialinformationfortheyearendedDecember31,2007.Weextracted
thefinancialinformationofeachquarterofcalendaryear2007fromActivision,Inc.’squarterly
informationwhichhasnotbeenaudited.
FortheyearendedDecember31,2007
Reported
Activision,Inc.
Proforma
adjustments(i)
Proforma
Activision
Blizzard
Consolidatednetrevenues.....................................................
$1,349
$2,608
$—
$3,957
Reconciliationtosegmentnetrevenues:
Neteffectfromdeferralofnetrevenues...............................
40
—
—
40
Other(ii)................................................................................
(10)
—
—
(10)
Totalsegmentnetrevenues....................................................
$1,379
$2,608
$—
$3,987
Segmentnetrevenues
Activision.............................................................................
$272
$2,200
$—
$2,472
Blizzard................................................................................
1,107
—
—
1,107
Distribution...........................................................................
—
408
—
408
Totalsegmentnetrevenues....................................................
$1,379
$2,608
$—
$3,987
Consolidatedoperatingincome(loss)................................
$179
$396
$(417)
$158
Reconciliationtosegmentoperatingincome(loss):
Neteffectfromdeferralofnetrevenuesandrelated
costofsales................................................................
38
—
—
38
Stockbasedcompensationexpense................................
137
43
45
225
Restructuring........................................................................
(1)
—
—
(1)
Amortizationofintangibleassetsandpurchaseprice
accountingrelatedadjustments.........................................
4
—
376
380
Integrationandtransactioncosts..........................................
—
—
(4)
(4)
Other(ii)................................................................................
198
—
—
198
Totalsegmentincomefromoperations................................
$555
$439
$—
$994
Segmentincome(loss)fromoperations
Activision.............................................................................
$(13)
$424
$—
$411
Blizzard................................................................................
568
—
—
568
Distribution...........................................................................
—
15
—
15
Totalsegmentincomefromoperations................................
$555
$439
$—
$994
Consolidatednetincome........................................................
$227
$286
$(253)
$260
(i) Theproformaadjustmentsincludetheincreasedamortizationexpenseresultingfromthe
applicationofthepurchasemethodofaccounting($84millionand$376millionfortheyears
endedDecember31,2008and2007,respectively),eliminationofActivision,Inc.’shistorical
transactioncosts($37millionand$4millionfortheyearsendedDecember31,2008and2007,
respectively),andanincreaseinstockbasedcompensationexpenseassociatedwiththeincreasein
thefairvalueofActivision,Inc.’sunvestedstockawardsattheclosingdateoftheBusiness
Combination($59millionand$45millionfortheyearsendedDecember31,2008and2007,
respectively).Proformaadjustmentsareshownnetoftaxusinganassumedcombinedfederaland
statestatutorytaxrateof39.4%.
(ii) RepresentsNonCoreactivities,whicharelegacyVivendiGames’divisionsorbusinessunitsthat
wehaveexited,divestedorwounddownaspartofourrestructuringandintegrationeffortsasa
resultoftheBusinessCombination.PriortoJuly1,2009,NonCoreactivitiesweremanagedasa
standaloneoperatingsegment;however,inlightoftheminimalactivitiesandinsignificanceof
NonCoreactivities,asofthatdateweceasedtheirmanagementasaseparateoperatingsegment
andconsequently,wearenolongerprovidingseparateoperatingsegmentdisclosureandhave
reclassifiedourpriorperiods’segmentpresentationsothatitconformstothecurrentperiod’s
presentation.