Activision 2011 Annual Report Download - page 61

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The following table illustrates the gross unrealized losses on available-for-sale securities, the fair value of those
securities, aggregated by investment categories, and the length of time that they have been in a continuous unrealized loss
position at December 31, 2011 and 2010 (amounts in millions):
Less than 12 months 12 months or more Total
At December 31, 2011
Unrealized
losses
Fair
Value
Unrealized
losses
Fair
Value
Unrealized
losses
Fair
Value
Taxable auction rate securities .
.
$— $— $(1) $16 $(1) $16
Less than 12 months 12 months or more Total
At December 31, 2010
Unrealized
losses
Fair
Value
Unrealized
losses
Fair
Value
Unrealized
losses
Fair
Value
Taxable auction rate securities .
.
$— $— $(4) $23 $(4) $23
The total unrealized loss of $1 million at December 31, 2011 is due to failed auctions of taxable ARS held through
Morgan Stanley Smith Barney LLC, which is 51% owned by Morgan Stanley and 49% owned by Citigroup, Inc. The ARS were
held directly through a wholly owned subsidiary of Citigroup, Inc. until the Morgan Stanley Smith Barney LLC joint-venture
closed in the second quarter 2009. The majority of our investments in ARS are all backed by higher education student loans.
Based upon our analysis of the available-for-sale investments with unrealized losses, we have concluded that the
gross unrealized losses of $1 million at December 31, 2011 were temporary in nature. We do not intend to sell the investment
securities that are in an unrealized loss position and do not consider that it is more-likely-than-not that we will be required to sell
the investment securities before recovery of their amortized cost basis, which may be maturity. We have not identified any issues
related to the ultimate repayment of principal as a result of credit concerns on these securities. However, facts and circumstances
may change which could result in a decline in fair value considered to be other-than-temporary in the future.
The following table summarizes the contractually stated maturities of our short- and long-term investments classified
as available-for-sale at December 31, 2011 (amounts in millions):
At December 31, 2011
Amortized
cost
Fair
Value
U.S. government agency securities due in 1 year or less ..................................
.
$344 $344
Due after ten years .............................................................................................
.
17 16
$361 $360
6. Software development and intellectual property licenses
The following table summarizes the components of our software development and intellectual property licenses
(amounts in millions):
At
December 31,
2011
At
December 31,
2010
Internally developed software costs ...................................................
.
$115 $142
Payments made to third-party software developers ...........................
.
84 60
Total software development costs ......................................................
.
$199 $202
Intellectual property licenses ..............................................................
.
$34 $73
Amortization, write-offs and impairments of capitalized software development costs and intellectual property licenses
are comprised of the following (amounts in millions):
For the Years Ended
December 31,
2011 2010 2009
Amortization ........................................................................................................
.
$258 $319 $314
Write-offs and impairments .................................................................................
.
60 66 21
45