Activision 2013 Annual Report Download - page 42

23
Contractual Obligations(1)
Facility and
equipment
leases
Developer
and IP Marketing
Debt and
Interest(2) Total
For the Year Ending December 31,
2014 ....................................................................................... $ 34 $ 145 $ 74 $ 238 $ 491
2015 ....................................................................................... 31 16 8 238 293
2016 ....................................................................................... 27 2 1 238 268
2017 ....................................................................................... 26 2 1 237 266
2018 ....................................................................................... 25 — — 236 261
Thereafter .............................................................................. 46 2 — 5,246 5,294
Total .................................................................................. $ 189 $ 167 $ 84 $ 6,433 $ 6,873
(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 developed enough 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, 2013, we had $294 million of unrecognized tax benefits, of which $271 million was included in
“Other Liabilities” and $23 million was included in “Accrued Expenses and Other Liabilities” in the consolidated
balance sheet.
(2) Debt and interest represent our obligations related to the contractual principal repayments and interest payments
under the Term Loan and the Notes as of December 31, 2013. There was no outstanding balance under our Revolver
as of December 31, 2013. The Notes are subject to fixed interest rates and we have calculated the interest obligation
based on the applicable rates and payment dates for the Notes. The Term Loan bears a variable interest rate and
interest is payable on a quarterly basis, along with required quarterly principal repayments of 0.25% of the original
principal amount. We have calculated the expected interest obligation based on the outstanding principal balance and
interest rate applicable at December 31, 2013. Refer to Note 12 of the Notes to Consolidated Financial Statements
included in this Annual Report for additional information on our debt obligations. On February 11, 2014, we made a
voluntary repayment of $375 million to the Term Loan. The repayment satisfies the required quarterly principal
repayment. The contractual principal repayments of our debt, as shown in table above, are reduced by $25 million for
each of the years ended December 31, 2014 through 2018 and by $250 million thereafter. Further, the repayment is
expected to reduce contractual interest payments by approximately $10 million annually for each of the years ended
December 31, 2014 through 2018 and by approximately $14 million thereafter based on the interest rate of 3.25% at
December 31, 2013.
Off-balance Sheet Arrangements
At December 31, 2013 and December 31, 2012, Activision Blizzard had no significant relationships with
unconsolidated entities or financial parties, often referred to as “structured finance” or “special purpose” entities, 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 financial and
non-financial information required to be disclosed in our reports filed with the SEC is reported within the time periods specified
in the SEC’s rules and forms, and that such information is communicated to management, including our principal executive and
financial officers, as appropriate, to allow timely decisions regarding required disclosure.
Our Disclosure Committee, which operates under the Board-approved Disclosure Committee Charter and Disclosure
Controls & Procedures Policy, includes senior management representatives and assists executive management in its oversight of