Blizzard 2009 Annual Report Download - page 94
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2009and2008,respectively,resultedfromtheforeignexchangecontractsandswapswithVivendiand
wererecognizedintheconsolidatedstatementsofoperations.
Tomitigateourriskfromforeigncurrencyfluctuationsweenterintocurrencyderivatives
contracts,principallycurrencyforwardsandswaps,withVivendi,generallywithmaturitiesoftwelve
monthsorless.Weexpecttocontinuetouseeconomichedgeprogramsinthefutureandmayuse,in
additiontocurrencyforwardsandswaps,otherfinancialderivativeinstrumentssuchascurrencyoptionsto
reduceforeignexchangerisksifitisdeterminedthatsuchhedgingactivitiesareappropriate.Wedonot
holdorpurchaseanyderivativescontractsfortradingorspeculativepurposes.Thefollowingprocedures
aredesignedtoprohibitspeculativetransactions:
• VivendiisthecounterpartyforforeigncurrencytransactionswithinActivisionBlizzard,
unlessregulatory,operational,orotherconsiderationsrequireotherwise;and
• Allforeigncurrencyhedgingtransactionsarebacked,inamountandbymaturity,byan
identifiedunderlyingeconomicexposure.
PriortotheBusinessCombination,Vivendimaintainedacentralizedcashmanagementpoolfrom
whichVivendiGamesborrowedandloanedcashonadailybasis.Netcashtransfers,underthecash
poolingagreement,wereincludedinowner’sequityaspartofnettransferstoVivendi.Vivendicharged
VivendiGamesinterestonthecumulativenetcashtransfersandsuchchargesareincludedininvestment
income(loss),netintheaccompanyingconsolidatedstatementsofoperations.Netinterestearnedfrom
VivendifortheyearendedDecember31,2008was$4million.Netinterestexpensefortheyearended
December31,2007was$3million.
Inaddition,inaccordancewiththetermsoftheBusinessCombinationAgreement,in2008
VivendiGamessettleditspayabletoVivendiS.A.anddistributeditsexcesscashonhandasdefinedinthe
BusinessCombinationAgreementimmediatelypriortothecloseofthetransaction,resultingincash
paymentsof$79milliontosettleitspayableand$79milliontodistributeitsexcesscashtoVivendi.
Others
ActivisionBlizzardhasenteredintovarioustransactionsandagreements,includingcash
managementservices,investoragreement,creditfacilitiesarrangementandmusicroyaltyagreementswith
Vivendianditssubsidiariesandaffiliates.Noneoftheseservices,transactionsandagreementswith
Vivendianditssubsidiariesandaffiliatesismaterialeitherindividuallyorintheaggregatetothe
consolidatedfinancialstatementsasawhole.
FortheyearsendedDecember31,2008and2007,royaltyexpensesrelatedtopropertieslicensed
fromUniversalEntertainmentofapproximately$2millionand$1million,respectivelywererecognized.
Royaltiesareincludedintheaccompanyingconsolidatedstatementsofoperationsascostofsales—
softwareroyaltiesandamortization.RoyaltyamountsduetoUniversalEntertainmentarenotmaterial.
24.RecentlyIssuedAccountingStandards
InJune2009,theFASBissuedanamendmenttotheaccountinganddisclosurerequirementsfor
theconsolidationofvariableinterestentities(VIEs),whichamendstheevaluationcriteriatoidentifythe
primarybeneficiaryofavariableinterestentity.Additionally,thisamendmentrequiresongoing
reassessmentsofwhetheranenterpriseistheprimarybeneficiaryofthevariableinterestentity.This
amendmentiseffectiveforfinancialstatementsissuedforfiscalyearsbeginningafterNovember15,2009.
TheadoptionofthisFASBamendmentdoesnothavematerialimpactonourconsolidatedfinancial
statements.
InOctober2009,theFASBissuedanupdatetoRevenueRecognition—MultipleDeliverable
RevenueArrangements.Thisupdateestablishestheaccountingandreportingguidanceforarrangements
includingmultiplerevenuegeneratingactivities.Thisupdateprovidesamendmentstothecriteriafor
separatingdeliverables,measuringandallocatingarrangementconsiderationtooneormoreunitsof