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LiquidityandCapitalResources
SourcesofLiquidity(amountsinmillions)
FortheyearsendedDecember31,
2009
2008
Increase/
(decrease)
2009v2008
Cashandcashequivalents................................................................................................
$2,768
$2,958
$(190)
Shortterminvestments................................................................................................
477
44
433
$3,245
$3,002
$243
Percentageoftotalassets................................................................................................
24%
21%
FortheyearsendedDecember31,
2009
2008
2007
Increase/
(decrease)
2009v2008
Increase/
(decrease)
2008v2007
Cashflowsprovidedbyoperatingactivities.........................
$1,183
$379
$431
$804
$(52)
Cashflowsprovidedby(usedin)investing
activities............................................................................
(443)
1,101
(68)
(1,544)
1,169
Cashflowsprovidedby(usedin)financing
activities............................................................................
(949)
1,488
(371)
(2,437)
1,859
Effectofforeignexchangeratechanges...............................
19
(72)
2
91
(74)
Netincrease(decrease)incashandcash
equivalents................................................................
$(190)
$2,896
$(6)
$(3,086)
$2,902
FortheyearendedDecember31,2009,theprimarydriversofcashflowsprovidedbyoperating
activitiesincludedthecollectionofcustomerreceivablesgeneratedbythesaleofourproductsandour
subscriptionrevenues,partiallyoffsetbypaymentstovendorsforthemanufacture,distributionand
marketingofourproducts,paymentstothirdpartydevelopersandintellectualpropertyholders,tax
liability,andpaymentstoourworkforce.Cashflowsusedininvestingactivitiesreflectthatwepurchased
shortterminvestmentstotaling$425million,madecapitalexpendituresof$69millionprimarilyfor
propertyandequipment,andreceived$44millionuponthematurityofinvestments,themajorityofwhich
largelyconsistedofourU.S.governmentagencysecuritiesduringtheyearendedDecember31,2009.Cash
flowsusedinfinancingactivitiesprimarilyreflectourrepurchaseof101millionsharesofourcommon
stockfor$1.1billionunderthestockrepurchaseprogram,partiallyoffsetby$81millionofproceedsfrom
issuanceofsharesofcommonstocktoemployeespursuanttostockoptionexercises.
Inadditiontocashflowsprovidedbyoperatingactivities,ourprimarysourceofliquiditywas
$3.2billionofcashandcashequivalentsandshortterminvestmentsatDecember31,2009.Withourcash
andcashequivalentsandexpectedcashflowsprovidedbyoperatingactivities,webelievethatwehave
sufficientliquiditytomeetdailyoperationsintheforeseeablefuture.Wealsobelievethatwehave
sufficientworkingcapital(approximately$2.8billionatDecember31,2009),aswellasavailabilityunder
ourcreditfacilities,tofinanceouroperationalrequirementsforatleastthenexttwelvemonths,including
purchasesofinventoryandequipment,thefundingofthedevelopment,production,marketingandsaleof
newproducts,tofinancetheacquisitionofintellectualpropertyrightsforfutureproductsfromthirdparties,
tofundanewstockrepurchaseprogram,andtopaydividendstoourshareholders.
OnApril29,2008,Activision,Inc.enteredintoaseniorunsecuredcreditagreementwithVivendi
(aslender).BorrowingsundertheagreementbecameavailableuponconsummationoftheBusiness
Combination.AtDecember31,2009,thecreditagreementprovidesforarevolvingcreditfacilityofupto
$475million,bearinginterestatLIBORplus1.20%perannum.Anyunusedamountundertherevolving
creditfacilityissubjecttoacommitmentfeeof0.42%perannum.Noborrowingswereoutstandingat
December31,2009.
OnNovember5,2008,weannouncedthatourBoardofDirectorsauthorizedastockrepurchase
programunderwhichwemayrepurchaseupto$1billionworthofourcommonstock.OnJuly31,2009,