Activision 2010 Annual Report Download - page 34

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Cash Flows from Financing Activities
The primary drivers of cash flows used in financing activities have historically related to transactions involving our
common stock, including the issuance of shares of common stock to employees and the public and the purchase of treasury
shares. We have not utilized debt financing as a source of cash flows.
In 2010, cash flows used in financing activities included $959 million used to purchase Activision Blizzard stock
under the stock repurchase programs described above.
Capital Expenditures
We made capital expenditure of $97 million in 2010. In 2011, we anticipate total capital expenditures of
approximately $100 million. Capital expenditures are expected to be primarily for computer hardware and software purchases
and various corporate projects.
Commitments
In the normal course of business, we enter into contractual arrangements with third-parties for non-cancelable
operating lease agreements for our offices, for the development of products, and for the rights to intellectual property (“IP”).
Under these agreements, we commit to provide specified payments to a lessor, developer or intellectual property holder, as
the case may be, based upon contractual arrangements. The payments to third-party developers are generally conditioned
upon the achievement by the developers of contractually specified development milestones. Further, these payments to
third-party developers and intellectual property holders typically are deemed to be advances and are recoupable against future
royalties earned by the developer or intellectual property holder based on the sale of the related game. Additionally, in
connection with certain intellectual property rights acquisitions and development agreements, we commit to spend specified
amounts for marketing support for the related game(s) which is to be developed or in which the intellectual property will be
utilized. Assuming all contractual provisions are met, the total future minimum commitments for these and other contractual
arrangements in place at December 31, 2010 are scheduled to be paid as follows (amounts in millions):
Contractual Obligations(1)
Facility and
equipment leases
Developer
and IP Marketing Total
For the year ending December 31,
2011 ..................................................................................................... 32 90 48 170
2012 ..................................................................................................... 31 69 11 111
2013 ..................................................................................................... 29 49 — 78
2014 ..................................................................................................... 26 15 — 41
2015 ..................................................................................................... 16 — — 16
Thereafter ............................................................................................. 63 — — 63
Total ................................................................................................. 197 223 59 479
(1) We have omitted uncertain income tax liabilities from this table due to the inherent uncertainty regarding the timing
of potential issue resolution. Specifically, either the underlying positions have not been fully enough developed
under audit to quantify at this time or the years relating to the issues for certain jurisdictions are not currently under
audit. At December 31, 2010, we had $132 million of unrecognized tax benefits.
Off-balance Sheet Arrangements
At December 31, 2010 and 2009, Activision Blizzard had no significant relationships with unconsolidated entities or
financial parties, such as entities often referred to as structured finance or special purpose entities, which would have been
established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes,
that have or are reasonably likely to have a material future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operation, liquidity, capital expenditures, or capital resources.
Financial Disclosure
We maintain internal control over financial reporting, which generally includes those controls relating to the
preparation of our financial statements in conformity with accounting principles generally accepted in the United States of
America (“U.S. GAAP”). We also are focused on our “disclosure controls and procedures,” which as defined by the
Securities and Exchange Commission (the “SEC”) are generally those controls and procedures designed to ensure that