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38
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in millions)
For the Years Ended December 31,
2013 2012 2011
Cash flows from operating activities:
Net income ..........................................................................................................................................
.
$ 1,010 $ 1,149 $ 1,085
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes ...................................................................................................................
.
161 (10) 75
Provision for inventories ...............................................................................................................
.
33 13 8
Depreciation and amortization ......................................................................................................
.
108 120 148
Loss on disposal of property and equipment ................................................................................
.
— 1 4
Impairment of goodwill (see Note 9) ............................................................................................
.
— — 12
Amortization and write-off of capitalized software development costs and intellectual
property licenses (1) ..................................................................................................................
.
207 208 287
Amortization of debt discount and debt financing costs ..............................................................
.
1 — —
Stock-based compensation expense
(2)
..........................................................................................
.
108 126 103
Excess tax benefits from stock awards ........................................................................................
.
(29) (5) (24)
Changes in operating assets and liabilities:
Accounts receivable, net ...............................................................................................................
.
198 (46) 13
Inventories .....................................................................................................................................
.
6 (75) (42)
Software development and intellectual property licenses.............................................................
.
(268) (301) (254)
Other assets ...................................................................................................................................
.
(67) 88 (67)
Deferred revenues .........................................................................................................................
.
(275) 153 (248)
Accounts payable ..........................................................................................................................
.
7 (54) 31
Accrued expenses and other liabilities ..........................................................................................
.
64 (22) (179)
Net cash provided by operating activities ..........................................................................................
.
1,264 1,345 952
Cash flows from investing activities:
Proceeds from maturities of available-for-sale investments ..............................................................
.
304 444 740
Proceeds from auction rate securities called at par ............................................................................
.
— 10 10
Proceeds from sales of available-for-sale investments ......................................................................
.
98 — —
Purchases of available-for-sale investments ......................................................................................
.
(26) (503) (417)
Payment of contingent consideration .................................................................................................
.
— — (3)
Capital expenditures ...........................................................................................................................
.
(74) (73) (72)
Decrease (increase) in restricted cash ................................................................................................
.
6 (2) 8
Net cash provided by (used in) investing activities ...........................................................................
.
308 (124) 266
Cash flows from financing activities:
Proceeds from issuance of common stock to employees ...................................................................
.
158 33 69
Tax payment related to net share settlements on restricted stock rights ...........................................
.
(49) (16) (15)
Excess tax benefits from stock awards ..............................................................................................
.
29 5 24
Repurchase of common stock .............................................................................................................
.
(5,830) (315) (692)
Dividends paid ....................................................................................................................................
.
(216) (204) (194)
Proceeds from issuance of long-term debt .........................................................................................
.
4,750 — —
Repayment of long-term debt .............................................................................................................
.
(6) — —
Payment of debt discount and financing costs ...................................................................................
.
(59) — —
Net cash used in financing activities ..................................................................................................
.
(1,223) (497) (808)
Effect of foreign exchange rate changes on cash and cash equivalents ..................................................
.
102 70 (57)
Net increase in cash and cash equivalents ...............................................................................................
.
451 794 353
Cash and cash equivalents at beginning of period ...................................................................................
.
3,959 3,165 2,812
Cash and cash equivalents at end of period .............................................................................................
.
$ 4,410 $ 3,959 $ 3,165
(1) Excludes deferral and amortization of stock-based compensation expense.
(2) Includes the net effects of capitalization, deferral, and amortization of stock-based compensation expense.
The accompanying notes are an integral part of these Consolidated Financial Statements.