Blizzard 2009 Annual Report Download - page 80

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68
Thetablebelowsegregatesallassetsandliabilitiesthataremeasuredatfairvalueonanon
recurringbasisduringtheperiodintothemostappropriatelevelwithinthefairvaluehierarchybasedonthe
inputsusedtodeterminethefairvalueatthemeasurementdate(amountsinmillions):
FairValueMeasurementsat
ReportingDateUsing
Quoted
Pricesin
Active
Marketsfor
Identical
Financial
Instruments
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
Asof
December31,
2009
(Level1)
(Level2)
(Level3)
Total
Losses
Nonfinancialassets:
Intangibleassets,net................................................................
$278
$—
$—
$278
$409
Totalnonfinancialassetsatfairvalue................................
$278
$—
$—
$278
$409
Inaccordancewiththeprovisionsoftheimpairmentoflonglivedassetssubsectionsof
ASCSubtopic36010,intangibleassetswithacarryingvalueof$687millionwerewrittendowntotheir
fairvalueof$278million.Thewritedownresultedinimpairmentchargesof$24million,$12million,and
$373millionoflicenseagreements,gameenginesandinternallydevelopedfranchisesintangibleassets,
respectively(seeNote12).Theimpairmentchargeof$409millionisincludedinnetincomefortheyear
endedDecember31,2009.
18.CommitmentsandContingencies
CreditFacilities
AtDecember31,2009and2008,wemaintaineda$30millionand$35millionirrevocable
standbyletterofcredit,respectively.Thestandbyletterofcreditisrequiredbyoneofourinventory
manufacturerstoqualifyforpaymenttermsonourinventorypurchases.Underthetermsofthis
arrangement,wearerequiredtomaintainondepositwiththebankacompensatingbalance,restrictedasto
use,ofnotlessthanthesumoftheavailableamountoftheletterofcreditplustheaggregateamountofany
drawingsundertheletterofcreditthathavebeenhonoredthereunderbutnotreimbursed.Theletterof
creditwasundrawnatDecember31,2009and2008.
AtDecember31,2009and2008,ourpublishingsubsidiarylocatedintheU.K.maintaineda
EUR30million($43million)andEUR25million($35million)irrevocablestandbyletterofcredit,
respectively.Thestandbyletterofcreditisrequiredbyoneofourinventorymanufacturerstoqualifyfor
paymenttermsonourinventorypurchases.Thestandbyletterofcreditdoesnotrequireacompensating
balanceandexpiresinMarch2010.NoamountswereoutstandingatDecember31,2009and2008.
OnApril29,2008,Activision,Inc.enteredintoaseniorunsecuredcreditagreementwithVivendi
(aslender).BorrowingsundertheagreementbecameavailableuponconsummationoftheBusiness
Combination.AtDecember31,2009and2008,thecreditagreementprovidesforarevolvingcreditfacility
ofupto$475million,bearinginterestatLIBORplus1.20%perannum.Anyunusedamountunderthe
revolvingcreditfacilityissubjecttoacommitmentfeeof0.42%perannum.
Therevolvingcreditfacilityissubjecttocustomarynegativecovenants,ineachcasesubjectto
certainexceptionsandqualifications,includinglimitationson:indebtedness;liens;investments,mergers,
consolidationsandacquisitions;transactionswithaffiliates;issuanceofpreferredstockbysubsidiaries;sale
andleasebacktransactions;restrictedpayments;andcertainrestrictionswithrespecttosubsidiaries.The
limitationonindebtednessprovidesthatActivisionBlizzardcannotincurconsolidatedindebtedness,netof
unrestrictedcash,inexcessof$1.5billion,andthatnoadditionalindebtednessmaybeincurredaslongas
theratioofActivisionBlizzard’sconsolidatedindebtedness(includingtheindebtednesstobeincurred)
minustheamountofunrestrictedcashtoActivisionBlizzard’sconsolidatedearningsbeforeinterest,taxes,