Activision 2013 Annual Report Download - page 41

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In addition to paying interest on outstanding principal balances under the Credit Facilities, we are required to pay the
lenders a commitment fee on unused commitments under the Revolver. We are also required to pay customary letter of credit
fees and agency fees.
We are required to make quarterly principal repayments of 0.25% of the Term Loan’s original principal amount, with
the balance due on the maturity date. Amounts borrowed under the Term Loan and repaid may not be re-borrowed.
On January 29, 2014, the Board of Directors authorized a $375 million repayment of our Term Loan. Accordingly,
we made this repayment on February 11, 2014. The repayment reduces the Term Loan’s outstanding principal balance from
$2.494 billion to $2.119 billion and is expected to reduce our contractual interest payments by approximately $10 million
annually, based on the interest rate of 3.25% at December 31, 2013. The repayment also satisfies the required quarterly principal
repayments (which total $25 million annually) through the maturity of the Term Loan.
Agreements governing our indebtedness, including the indenture governing the Notes and the Credit Agreement
impose operating and financial restrictions on our activities under certain conditions. These restrictions require us to comply
with or maintain certain financial tests and ratios. In addition, the indenture and the Credit Agreement limit or prohibit our
ability to, among other things: incur additional debt or make additional guarantees; pay distributions or dividends and repurchase
stock; make other restricted payments, including without limitation, certain restricted investments; create liens; enter into
agreements that restrict dividends from subsidiaries; engage in transactions with affiliates; and enter into mergers, consolidations
or sales of substantially all of our assets.
In addition, if, in the future, we borrow under the Revolver, as described in Note 12 of the Notes to Consolidated
Financial Statements included in this Annual Report, we may be required, during certain periods where outstanding revolving
loans exceed a certain threshold, to maintain a maximum senior secured net leverage ratio calculated pursuant to a financial
maintenance covenant under the Credit Agreement.
As of December 31, 2013, (i) we had 704 million shares of our common stock issued and outstanding, approximately
64% of which was held by the public, (ii) Vivendi held 83 million shares, or approximately 12% of the outstanding shares of our
common stock, and (iii) ASAC held 172 million shares, or approximately 24% of the outstanding shares of our common stock.
Based on cash and short-term investments of $4.44 billion, and outstanding debts of $4.74 billion of debt at
December 31, 2013, the Company’s net debt was $0.3 billion, where net debt is calculated as the total debt, less cash and
short-term investments.
On February 6, 2014, our Board of Directors declared a cash dividend of $0.20 per common share, payable on
May 14, 2014, to shareholders of record at the close of business on March 19, 2014.
Capital Expenditures
We made capital expenditures of $74 million in 2013, as compared to $73 million in 2012. In 2014, we anticipate
total capital expenditures of approximately $100 million. Capital expenditures are expected to be primarily for computer
hardware and software purchases.
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. 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, 2013 are scheduled to be paid as follows (amounts in millions):