Activision 2008 Annual Report Download - page 36

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22
Liquidity and Capital Resources
Sources of Liquidity (amounts in millions)
For the years ended December 31,
2008 2007 2006
Increase/
(decrease)
2008 v
2007
Increase/
(decrease)
2007 v
2006
Cash and cash equivalents................................................
.
$2,958 $62 $68 $2,896 $(6)
Short-term investments.....................................................
.
44 3 2 41 1
$3,002 $65 $70 $2,937 $(5)
Percentage of total assets..................................................
.
20%7%9%
For the years ended December 31,
2008 2007 2006
Increase/
(decrease)
2008 v
2007
Increase/
(decrease)
2007 v
2006
(as
adjusted)
Cash flows provided by operating activities ................ $379 $431 $233 $(52) $198
Cash flows provided by (used in) investing activities.. 1,101 (68) (124) 1,169 56
Cash flows provided by (used in) financing activities . 1,488 (371) (77) 1,859 (294)
Effect of foreign exchange rate changes ...................... (72) 2 4 (74) (2)
Net increase (decrease) in cash and cash equivalents... $2,896 $(6) $36 $2,902 $(42)
In addition to cash flows provided by operating activities, our primary source of liquidity
was $3 billion of cash and cash equivalents at December 31, 2008. Through the Business
Combination, Activision, Inc.’s cash and cash equivalents of approximately $1.1 billion became
part of Activision Blizzard’s balances and we received $1.7 billion of cash from Vivendi in
exchange for issuance of shares of our common stock. With our liquid investment portfolio and
expected cash flows provided by operating activities, we believe that we have sufficient liquidity
to meet daily operations in the foreseeable future. We also believe that we have sufficient working
capital (approximately $3 billion at December 31, 2008), as well as availability under our credit
facilities, to finance our operational requirements for at least the next twelve months, including
purchases of inventory and equipment, the funding of the development, production, marketing and
sale of new products, to finance the acquisition of intellectual property rights for future products
from third parties, the restructuring activities, and to fund the stock repurchase program we
announced on November 5, 2008.
On November 5, 2008, we announced that our Board of Directors authorized a stock
repurchase program under which we may repurchase up to $1 billion of our common stock. Under
this program, we may repurchase our common stock from time to time on the open market or in
private transactions, including structured or accelerated transactions. We will determine the timing
and amount of repurchases based on our evaluation of market conditions and other factors. The
repurchase program may be suspended or discontinued by the Company at any time. We
purchased 13 million shares for $126 million in the fourth quarter of 2008, leaving approximately
$874 million available for purchases under the program at December 31, 2008.