Blizzard 2010 Annual Report Download - page 60

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through UBS from available-for-sale to trading securities. The transfer to trading securities reflected management’s intent to
exercise the Rights during the period between June 30, 2010 and July 3, 2012, which resulted in the securities being held for
the purpose of selling them in the near future. Prior to our agreement with UBS, our intent was to hold the ARS until the
market recovered. At the time of transfer, the unrealized loss on our ARS was $5 million. This unrealized loss was included
in accumulated other comprehensive income (loss). Upon transfer to trading securities, we immediately recognized in
investment income, net, the $5 million unrealized loss not previously recognized in earnings. Subsequently, we recognized an
additional decline in fair value of $2 million for a total unrealized loss of $7 million, included in investment and other income
(loss), net, in the consolidated statements of operations for the year ended December 31, 2008. In June 2010, we exercised
the Rights, thereby selling the remainder of our ARS held with UBS at par and recognized a gain of $7 million, which was
offset by a loss of $7 million for the change in fair value of the Rights, resulting in no impact to our investment and other
income, net, in the consolidated statement of operations.
7. Software development and intellectual property licenses
The following table summarizes the components of our software development and intellectual property licenses
(amounts in millions):
At
December 31,
2010
At
December 31,
2009
Internally developed software costs ............................................ $142 $182
Payments made to third-party software developers ..................... 60 52
Total software development costs ............................................... $202 $234
Intellectual property licenses ....................................................... $73 $83
Amortization, write-offs and impairments of capitalized software development costs and intellectual property
licenses are comprised of the following (amounts in millions):
For the Years Ended
December 31,
2010 2009 2008
Amortization ............................................................................................ $322 $314 $90
Write-offs and impairments ..................................................................... 63 21 89
8. Restructuring
We have substantially completed our implementation of our organizational restructuring plan as a result of the
Business Combination described in Note 1 of the notes to consolidated financial statements. This organizational restructuring
plan included the integration of different operations to streamline the combined organization of Activision Blizzard.
The primary goals of the organizational restructuring were to rationalize the title portfolio and consolidate certain
corporate functions to realize synergies from the Business Combination.
The following table details the amount of restructuring reserves included in accrued expenses and other liabilities in
the consolidated balance sheets at December 31, 2010 and 2009 (amounts in millions):
Severance
Facilities
costs Total
Balance at December 31, 2008 ............................................... $37 $7 $44
Costs charged to expense ....................................................... 19 4 23
Costs paid or otherwise settled ............................................... (48) (8) (56)
Foreign exchange and other.................................................... — (2) (2)
Balance at December 31, 2009 ............................................... 8 1 9
Costs charged to expense ....................................................... 3 — 3
Costs paid or otherwise settled ............................................... (9) (1) (10)
Balance at December 31, 2010 ............................................... $2 $— $2