Blizzard 2009 Annual Report Download - page 30

Download and view the complete annual report

Please find page 30 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

18
• IncreasednumberoftitlesandskuspublishedbyActivisionBlizzardascomparedtoVivendi
Games.
GeneralandAdministrative(amountsinmillions)
Year
ended
December31,
2009
%of
total
consolidated
netrevs.
Year
ended
December31,
2008
%of
total
consolidated
netrevs.
Year
ended
December31,
2007
%of
total
consolidated
netrevs.
Increase/
(decrease)
2009v
2008
Increase/
(decrease)
2008v
2007
Generaland
administrative........
$395
9%
$271
9%
$166
12%
$124
$105
ForyearendedDecember31,2009,generalandadministrativeexpenseincreasedascomparedto
2008primarilydueto:
• PostBusinessCombinationgeneralandadministrativeexpensesof$114millionfrom
businessespreviouslyoperatedbyActivision,Inc.,forthesixmonthperiodendedJune30,
2009wereincludedin2009,butnotin2008;
• Increasesinstockbasedcompensationexpense;and
• Foreignexchangelossesfromrevaluationofourtransactionexposures.
Thesefactorswerepartiallyoffsetbythecostcontainmentstrategyweimplementedandsynergies
resultingfromourrestructuringeffortsfromtheBusinessCombinationincludingthecompletewinddown
ofourNonCoreoperations.
FortheyearendedDecember31,2008,generalandadministrativecostsincreasedinabsolute
amountanddecreasedaspercentageofconsolidatednetrevenuesascomparedto2007.Theincreasewas
primarilyduetotheconsummationoftheBusinessCombination,whichresultedingeneraland
administrativeexpensesfromActivision,Inc.ofapproximately$125million,(includingintegrationand
transactionexpensesof$29million)beingincludedfromthedateoftheBusinessCombination,butnotin
2007.Theincreasewaspartiallyoffsetbyreducedsalaryandbenefitcostsasaresultoftheimplementation
ofourorganizationalrestructuring.
ImpairmentofIntangibleAssets(amountsinmillions)
Year
ended
December31,
2009
%of
total
consolidated
netrevs.
Year
ended
December31,
2008
%of
total
consolidated
netrevs.
Year
ended
December31,
2007
%of
total
consolidated
netrevs.
Increase/
(decrease)
2009v
2008
Increase/
(decrease)
2008v
2007
Impairmentof
intangible
assets......................
$409
10%
$—
—%
$—
—%
$409
$—
Inthefourthquarterof2009,withthefranchiseandindustryresultsoftheholidayseason,our
outlookfortheconsoleplatformswassignificantlyrevised.Withthecontinuedeconomicdownturnwithin
ourindustryin2009andthechangeinthebuyinghabitsofcasualconsumers,wereassessedouroverall
expectations.Weconsideredtheseeconomicchangesduringour2010planningprocessconductedduring
themonthsofNovemberandDecember,whichresultedinastrategychangetofocusonfewertitlereleases
inthecasualandmusicgenres.Asaresult,weupdatedourfutureprojectedrevenuestreamsforthe
franchisesinthecasualgamesandmusicgenres.Weperformedrecoverabilityand,whereapplicable,
impairmenttestsontherelatedintangibleassetsinaccordancewithASCSubtopic36010.Basedonthe
analysisperformed,werecordedimpairmentchargesof$24million,$12millionand$373millionto
licenseagreements,gameenginesandinternallydevelopedfranchisesintangibleassets,respectivelyforthe
yearendedDecember31,2009withinourActivisionsegment.SeeNote12oftheNotestoConsolidated
FinancialStatementsincludedinthisAnnualReportforadditionalinformationregardingthedetermination
oftheimpairmentchargesrecordedfortheyearendedDecember31,2009.