Activision 2008 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2008 Activision annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

57
Goodwill arises from the Business Combination due to the acquired work force of
Activision, Inc., and the expected synergies from the Business Combination. The following table
presents the gross and net balances, and accumulated amortization of the components of our
amortizable intangible assets acquired in the Business Combination at December 31, 2008
(amounts in millions):
Gross
carrying
amount Accumulated
amortization
Net
carrying
amount
License agreements................................
.
$207 $(12) $195
Developed software ...............................
.
68 (56) 12
Game engines.........................................
.
128 (42) 86
Internally developed franchises .............
.
1,124 (145) 979
Retail customer relationships.................
.
40 (40) —
Favorable leases.....................................
.
5(1)4
Distribution agreements.........................
.
17 (5) 12
Total...................................................
.
$1,589 $(301) $1,288
Amortization of intangibles and goodwill are not tax deductible. The estimated future
amortization expense of our purchased finite-lived intangible assets acquired is as follows
(amounts in millions):
Years ending
December 31, Amount
2009 .....................................................................................................
.
$307
2010 .....................................................................................................
.
204
2011 .....................................................................................................
.
141
2012 .....................................................................................................
.
118
2013 .....................................................................................................
.
103
Thereafter.............................................................................................
.
415
The following table summarizes unaudited pro forma financial information assuming the
Business Combination had occurred at the beginning of the periods presented. This pro forma
financial information is for informational purposes only and does not reflect any operating
efficiencies or inefficiencies which may result from the Business Combination and therefore is not
necessarily indicative of results that would have been achieved had the businesses been combined
during the periods presented (amounts in millions, except per share data):
For the years
ended
December 31,
2008 2007
Pro forma net revenues.......................................................
.
$4,337 $3,957
Pro forma net income (loss)................................................
.
(112) 260
Pro forma net income (loss) per share
- basic..................................................................................
.
(0.08) 0.20
- diluted...............................................................................
.
(0.08) 0.19