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InconnectionwithouracceptanceoftheUBSofferinNovember2008,resultinginourrightto
requireUBStopurchaseourARSatparvaluebeginningonJune30,2010,wetransferredourinvestments
inARSheldthroughUBSfromavailableforsaletotradingsecurities.Thetransfertotradingsecurities
reflectsmanagement’sintenttoexercisetheRightsduringtheperiodbetweenJune30,2010andJuly3,
2012,whichresultsinthesecuritiesbeingheldforthepurposeofsellingtheminthenearfuture.Priorto
ouragreementwithUBS,ourintentwastoholdtheARSuntilthemarketrecovered.Atthetimeof
transfer,theunrealizedlossonourARSwas$5million.Thisunrealizedlosswasincludedinaccumulated
othercomprehensiveincome(loss).Upontransfertotradingsecurities,weimmediatelyrecognizedin
investmentincome,net,the$5millionunrealizedlossnotpreviouslyrecognizedinearnings.Subsequently,
werecognizedanadditionaldeclineinfairvalueof$2millionforatotalunrealizedlossof$7million,
includedininvestmentandotherincome(loss),net,intheconsolidatedstatementsofoperationsforthe
yearendedDecember31,2008.
7.SoftwareDevelopmentCostsandIntellectualPropertyLicenses
AtDecember31,2009,capitalizedsoftwaredevelopmentcostsincluded$182millionofinternally
developedsoftwarecostsand$52millionofpaymentsmadetothirdpartysoftwaredevelopers.At
December31,2008,capitalizedsoftwaredevelopmentcostsincluded$173millionofinternallydeveloped
softwarecostsand$63millionofpaymentsmadetothirdpartysoftwaredevelopers.Capitalized
intellectualpropertylicenseswere$83millionand$40millionatDecember31,2009andDecember31,
2008,respectively.Amortizationofcapitalizedsoftwaredevelopmentcostsandintellectualproperty
licensesfortheyearsendedDecember31,2009,2008and2007were$314million,$90millionand
$10million,respectively.Writeoffsandimpairmentswere$21million,$89millionand$7millionforthe
yearsendedDecember31,2009,2008and2007,respectively.
8.Restructuring
Wehavesubstantiallycompletedourimplementationofourorganizationalrestructuringplanasa
resultoftheBusinessCombinationdescribedinNote1ofthenotestoconsolidatedfinancialstatements.
Thisorganizationalrestructuringplanincludedtheintegrationofdifferentoperationstostreamlinethe
combinedorganizationofActivisionBlizzard.
Theprimarygoalsoftheorganizationalrestructuringaretorationalizethetitleportfolioand
consolidatecertaincorporatefunctionstorealizesynergiesfromtheBusinessCombination.
Thefollowingtabledetailstheamountofrestructuringreservesincludedinaccruedexpensesand
otherliabilitiesintheconsolidatedbalancesheetsatDecember31,2009and2008(amountsinmillions):
Severance
Facilities
costs
Asset
write
down
Contract
termination
costs
Lossondisposalof
assets/liabilities
Total
BalanceatDecember31,2007................................
$—
$—
$—
$—
$—
$—
Costschargedtoexpense................................................
54
7
26
5
1
93
Costspaidorotherwisesettled................................
(18)
—
—
(3)
—
(21)
Noncashwritedown:
Fixedassetdisposals..................................................
—
—
(5)
—
—
(5)
Impairmentofacquiredtradename...........................
—
—
(5)
—
—
(5)
Impairmentofgoodwill.............................................
—
—
(16)
—
—
(16)
Foreignexchangeandother............................................
1
—
—
(2)
(1)
(2)
BalanceatDecember31,2008................................
37
7
—
—
—
44
Costschargedtoexpense................................................
19
4
—
—
—
23
Costspaidorotherwisesettled................................
(48)
(8)
—
—
—
(56)
Foreignexchangeandother............................................
—
(2)
—
—
—
(2)
BalanceatDecember31,2009................................
$8
$1
$—
$—
$—
$9