Blizzard 2011 Annual Report Download - page 87

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ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES
(Amounts in millions, except earnings per share data)
Year Ended December 31, 2011 Net Revenues Cost of Sales -
Product Costs
Cost of Sales -
Online
Subscriptions
Cost of Sales -
Software Royalties
and Amortization
Cost of Sales -
Intellectual
Property Licenses Product
Development Sales and
Marketing General and
Administrative Restructuring Total Costs
and Expenses
GAAP Measurement $ 4,755 $ 1,134 $ 238 $ 218 $ 165 $ 646 $ 545 $ 456 $ 25 $ 3,427
Less: Net effect from deferral in net revenues and related cost of sales (a) (266) (11) - (48) (24) - - - - (83)
Less: Stock-based compensation (b) - - - (10) - (40) (6) (47) - (103)
Less: Restructuring (c) - - - - - - - (1) (25) (26)
Less: Amortization of intangible assets (d) - (2) - (1) (69) - - - - (72)
Less: Impairment of goodwill (e) - - - - - - - (12) - (12)
N
on-GAAP Measurement $ 4,489 $ 1,121 $ 238 $ 159 $ 72 $ 606 $ 539 $ 396 $ - $ 3,131
Year Ended December 31, 2011 Operating
Income Net Income Basic Earnings
(Loss) per Share Diluted Earnings
(Loss) per Share
GAAP Measurement $ 1,328 $ 1,085 $ 0.93 $ 0.92
Less: Net effect from deferral in net revenues and related cost of sales (a) (183) (151) (0.13) (0.13)
Less: Stock-based compensation (b) 103 76 0.07 0.06
Less: Restructuring (c) 26 19 0.02 0.02
Less: Amortization of intangible assets (d) 72 46 0.04 0.04
Less: Impairment of goodwill (e) 12 12 0.01 0.01
N
on-GAAP Measurement $ 1,358 $ 1,087 $ 0.93 $ 0.93
(a) Reflects the net change in deferred net revenues and related cost of sales.
(b) Includes expense related to stock-based compensation.
(c) Reflects restructuring related to our Activision Publishing operations.
(d) Reflects amortization of intangible assets.
(e) Reflects impairment of goodwill.
The company calculates earnings per share pursuant to the two-class method which requires the allocation of net income between common shareholders and participating security holders. Net income attributable to Activision Blizzard Inc.
common shareholders used to calculate non-GAAP earnings per common share assuming dilution was $1,071 million for the year ended December 31, 2011 as compared to the total non-GAAP net
income of $1,087 million for the same period.
The per share adjustments are presented as calculated, and the GAAP and non-GAAP earnings per share information is also presented as calculated. The sum of these measures, as presented, may differ due to the impact of rounding.
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