Activision 2013 Annual Report Download - page 85

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For the Years Ended December 31,
2013 2012 2011
Numerator:
Consolidated net income ......................................................................................................... $ 1,010 $ 1,149 $ 1,085
Less: Distributed earnings to unvested stock-based awards that participate in
earnings ......................................................................................................................... (5) (4) (3)
Less: Undistributed earnings allocated to unvested stock-based awards that
participate in earnings ................................................................................................... (18) (20) (13)
Numerator for basic and diluted earnings per common share—income available to
common shareholders ........................................................................................................ $ 987
$ 1,125 $ 1,069
Denominator:
Denominator for basic earnings per common share—weighted-average common shares
outstanding ......................................................................................................................... 1,024 1,112 1,148
Effect of potential dilutive common shares under the treasury stock method: Employee
stock options ...................................................................................................................... 11 6 8
Denominator for diluted earnings per common share—weighted-average common
shares outstanding plus dilutive effect of employee stock options .............................. 1,035 1,118 1,156
Basic earnings per common share ............................................................................................... $ 0.96
$ 1.01 $ 0.93
Diluted earnings per common share ............................................................................................ $ 0.95
$ 1.01 $ 0.92
Our unvested restricted stock rights (including restricted stock units, restricted stock awards, and performance shares)
met the definition of participating securities based on their respective rights to dividends or dividend equivalents. Therefore, we
are required to use the two-class method in our computation of basic and diluted earnings per common share. For the years
ended December 31, 2013 and 2012, we had outstanding unvested restricted stock rights with respect to 24 million shares of
common stock on a weighted-average basis.
Potential common shares are not included in the denominator of the diluted earnings per common share calculation
when the inclusion of such shares would be anti-dilutive. Therefore, options to acquire 5 million, 25 million, and 25 million
shares of common stock were not included in the calculation of diluted earnings per common share for the years ended
December 31, 2013, 2012, and 2011, respectively, as the effect of their inclusion would be anti-dilutive.
20. Capital Transactions
Stock Purchase Agreement
As described in Note 1 of the Notes to Consolidated Financial Statements, on October 11, 2013, we completed the
Purchase Transaction, repurchasing approximately 429 million shares of our common stock for a cash payment of $5.83 billion,
pursuant to the terms of the Stock Purchase Agreement (refer to Note 12 of the Notes to Consolidated Financial Statements for
financing details of the Purchase Transaction). The repurchased shares were recorded in “Treasury Stock” in our consolidated
balance sheet.
Repurchase Program
On February 2, 2012, our Board of Directors authorized a stock repurchase program under which we were authorized
to repurchase up to $1 billion of our common stock. During the year ended December 31, 2013, there were no repurchases
pursuant to this stock repurchase program. During the year ended December 31, 2012, we repurchased 4 million shares of our
common stock for $54 million pursuant to this stock repurchase program. The 2012 stock repurchase program expired on
March 31, 2013.
On February 3, 2011, our Board of Directors authorized a stock repurchase program under which we were authorized
to repurchase up to $1.5 billion of our common stock. During the year ended December 31, 2012, we repurchased 22 million
shares of our common stock for $261 million pursuant to this stock repurchase plan. During the year ended December 31, 2011,
we repurchased 59 million shares of our common stock for $670 million pursuant to this stock repurchase program. The 2011
stock repurchase program expired on March 31, 2012.
On February 10, 2010, our Board of Directors authorized a stock repurchase program under which we were
authorized to repurchase up to $1 billion of our common stock. In January 2011, we settled a $22 million purchase of 2 million
shares of our common stock that we had agreed to repurchase in December 2010 pursuant to this stock repurchase program. The
2010 stock repurchase program expired on December 31, 2010.