Activision 2010 Annual Report Download - page 89

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77
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
For the Year Ended December 31, 2010 and 2009
(Amounts in millions)
Year Ended
December 31, 2010 December 31, 2009 $ Increase % Increase
Amount % of Total Amount % of Total (Decrease) (Decrease)
Segment net revenues:
Activision(i) $ 2,769 62 % $ 3,156 74 % $ (387) (12) %
Blizzard(ii) 1,656 37 1,196 28 460 38
Distribution(iii) 378 9 423 10 (45) (11)
Operating segment total 4,803 108 4,775 112 28 1
Reconciliation to consolidated net revenues:
Net effect from deferral of net revenues (356) (8) (497) (12)
Other(iv) --- --- 1 ---
Consolidated net revenues $ 4,447 100 % $ 4,279 100 % 168 4
Segment income from operations:
Activision(i) $ 511 $ 663 (152) (23)
Blizzard(ii) 850 555 295 53
Distribution(iii) 10 16 (6) (38)
Operating segment total 1,371 1,234 137 11
Reconciliation to consolidated operating income (loss):
N
et effect from deferral of net revenues and related cost of sales (319) (383)
Stock-based compensation expense (131) (154)
Restructuring (3) (23)
Amortization of intangible assets and purchase price accounting
related adjustments (123) (259)
Impairment of intangible assets (326) (409)
Integration and transactions costs --- (24)
Other(iv) --- (8)
Consolidated operating income (loss) $ 469 $ (26) $ 495 NM %
Operating margin from total operating segments 29% 26%
(i) Activision Publishing (“Activision”) — publishes interactive entertainment products and contents.
(ii) Blizzard — Blizzard Entertainment, Inc. and its subsidiaries (“Blizzard”) publishes PC games and online subscription-based games in the MMORPG category.
(iii) Activision Blizzard Distribution (“Distribution”) — distributes interactive entertainment software and hardware products.
(iv) Other represents Non-Core activities, which are 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. 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 and consequently,
we are no longer providing separate operating segment disclosure.