Activision 2009 Annual Report Download - page 90

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78
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, 2010
Net Revenues
Cost of Sales -
Product Costs
Cost of Sales -
MMORPG
Cost of Sales -
Software Royalties
and Amortization
Cost of Sales -
Intellectual
Property Licenses
Product
Development
Sales and
Marketing
General and
Administrative
Impairment of
Intangible Assets
Total Costs and
Expenses
GAAP Measurement
$
4,447
$
1,350
$
241
$
338
$
197
$
642
$
520
$
364
326
$
3,978
Less: Net effect from deferral in net revenues and related cost of sales
(a)
356
3
-
29
5
-
-
-
-
37
Less: Stock-based compensation (b)
-
-
-
(65)
-
(12)
(8)
(46)
-
(131)
Less: Restructuring (included in general and administrative) (c)
-
-
-
-
-
-
-
(3)
-
(3)
Less: Amortization of intangible assets and purchase price accounting related adjustments
(d)
-
(5)
-
(15)
(102)
-
-
(1)
-
(123)
Less: Impairment of intangible assets
(e)
-
-
-
-
-
-
-
-
(326)
(326)
Non-GAAP Measurement
$
4,803
$
1,348
$
241
$
287
$
100
$
630
$
512
$
314
$
-
$
3,432
Year Ended December 31, 2010
Operating
Income Net Income
Basic Earnings
per Share
Diluted Earnings per
Share
GAAP Measurement $
469
$
418
$
0.34
$
0.33
Less: Net effect from deferral in net revenues and related cost of sales (a)
319
232
0.19
0.19
Less: Stock-based compensation
(b)
131
88
0.07
0.07
Less: Restructuring (included in general and administrative)
(c)
3
2
-
-
Less: Amortization of intangible assets and purchase price accounting related adjustments (d)
123
53
0.04
0.04
Less: Impairment of intangible assets (e)
326
198
0.16
0.16
Non-GAAP Measurement $
1,371
$
991
$
0.81
$
0.79
(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 the Business Combination with Vivendi Games. Restructuring activities includes severance costs, facility exit costs and balance sheet write down and exit costs from the cancellation of projects.
(d) Reflects amortization of intangible assets, and the change in the fair value of assets and liabilities from purchase price accounting related adjustments.
(e) Reflects impairment of intangible assets acquired as a result of purchase price accounting.
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.