Activision 2010 Annual Report Download - page 48

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We maintain significant operations in the United States, Canada, the United Kingdom (“U.K.”), France, Germany,
Ireland, Italy, Spain, Australia, Sweden, South Korea, China and the Netherlands.
Activision Blizzard’s Non-Core Exit Operations
Activision Blizzard’s non-core exit operations (“Other” or “Non-Core”) represent legacy Vivendi Games’ divisions
or business units that we have exited, divested or wound down as part of our restructuring and integration efforts as a result
of the Business Combination described above, but that do not meet the criteria for separate reporting of discontinued
operations. Prior to July 1, 2009, Non-Core activities were managed as a stand-alone operating segment; however, in light of
the minimal activities and insignificance of Non-Core activities, as of that date we ceased their management as a separate
operating segment. Consequently, we are no longer providing separate operating segment disclosure and have reclassified our
prior periods’ segment presentation so that it conforms to the current period’s presentation.
2. Summary of significant accounting policies
Basis of Consolidation and Presentation
The accompanying consolidated financial statements include the accounts and operations of the Company. All
intercompany accounts and transactions have been eliminated. The consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of
the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from these
estimates and assumptions.
Certain reclassifications have been made to prior year amounts to conform to the current period presentation.
The Company considers events or transactions that occur after the balance sheet date, but before the financial
statements are issued, to provide additional evidence relative to certain estimates or to identify matters that require additional
disclosures.
Cash, Cash Equivalents and Investment Securities
We consider all money market funds and highly liquid investments with maturities of three months or less when
purchased to be cash equivalents.
Investments designated as available-for-sale securities are carried at fair value based on quoted market prices or
estimated based on quoted market prices of financial instruments with similar characteristics. Unrealized gains and losses of
the Company’s available-for-sale securities are excluded from earnings and reported as a component of other comprehensive
income (loss), when credit losses are not expected and the Company does not intend, or it is more likely than not that the
Company will not be required, to sell the security prior to recovery of the security’s amortized cost basis.
In general, investments with original maturities greater than 90 days and remaining maturities of less than one year
are classified as short-term investments. In addition, investments with maturities beyond one year may be classified as short-
term based on their highly liquid nature and because such investments represent the investment of cash that is available for
current operations.
The specific identification method is used to determine the cost of securities disposed of with realized gains and
losses reflected in investment and other income, net in the consolidated statements of operations.
The Company’s investments include auction rate securities (“ARS”). These ARS are variable rate bonds tied to
short-term interest rates with long-term maturities. ARS have interest rates which reset through a modified Dutch auction at
predetermined short-term intervals, typically every 7, 28, or 35 days. Interest on ARS is generally paid at the end of each
auction process and is based upon the interest rate determined for the prior auction. The majority of our ARS are AAA/Aaa
rated, and are typically collateralized by student loans guaranteed by the U.S. government under the Federal Family
Education Loan Program or backed by monoline bond insurance companies.