Activision 2014 Annual Report Download - page 52

ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES
(Amounts in millions, except earnings per share data)
(a) Reectsthenetchangeindeferredrevenuesandrelatedcostofsales.
(b) Includesexpenserelatedtostock-basedcompensation.
(c) Reectsamortizationofintangibleassetsfrompurchasepriceaccounting.
(d) Reectsfeesandotherexpenses(includinglegalfees,costs,expensesandaccruals)relatedtotherepurchaseof429millionsharesofourcommon
 stockfromVivendi(the“PurchaseTransaction”)completedonOctober11,2013andrelateddebtnancings.
Thecompanycalculatesearningspersharepursuanttothetwo-classmethodwhichrequirestheallocationofnetincomebetweencommonshareholders
andparticipatingsecurityholders.NetincomeattributabletoActivisionBlizzardInc.commonshareholdersusedtocalculatenon-GAAPearningsper
commonshareassumingdilutionwas$602millionand$976millionforthethreemonthsandyearendedDecember31,2013ascomparedtototalnon-
GAAPnetincomeof$621millionand$999millionforthesameperiods,respectively.
Forpurposeofcalculationofearningspershare,wehad,onaweighted-averagebasis,commonsharesoutstandingof745million,participatingsecurities
ofapproximately23million,anddilutivesharesof12millionduringthethreemonthsendedDecember31,2013.
Forpurposeofcalculationofearningspershare,wehad,onaweighted-averagebasis,commonsharesoutstandingof1,024million,participatingsecurities
ofapproximately24million,anddilutivesharesof11millionduringtheyearendedDecember31,2013.
Thepershareadjustmentsarepresentedascalculated,andtheGAAPandnon-GAAPearningspershareinformationisalsopresentedascalculated.
Thesumofthesemeasures,aspresented,maydifferduetotheimpactofrounding.
Less:
Less: Fees and other
Net effect from Less: Less: expenses related to the
deferral of net Stock- Amortization Purchase Transaction
GAAP revenues and related based of intangible and related debt Non-GAAP
Year Ended December 31, 2013 Measurement cost of sales(a) compensation(b) assets(c) nancings(d) Measurement
NetRevenues $ 4,583 $ (241) $ — $ — $ — $ 4,342
CostofSales-ProductCosts  1,053  (10)  —  —  —  1,043
CostofSales-Online  204  —  —  —  —  204
CostofSales-
 SoftwareRoyaltiesandAmortization  187  2  (17)  —  —  172
CostofSales-IntellectualPropertyLicense 87  (4)  —  (23)  —  60
ProductDevelopment  584  —  (33)  —  —  551
SalesandMarketing  606  —  (7)  —  —  599
GeneralandAdministrative  490  —  (53)  —  (79)  358
TotalCostsandExpenses $ 3,211 $ (12) $ (110) $ (23) $ (79) $ 2,987
Less:
Less: Fees and other
Net effect from Less: Less: expenses related to the
deferral of net Stock- Amortization Purchase Transaction
GAAP revenues and related based of intangible and related debt Non-GAAP
Year Ended December 31, 2013 Measurement cost of sales(a) compensation(b) assets(c) nancings(d) Measurement
OperatingIncome $ 1,372 $ (229) $ 110 $ 23 $ 79 $ 1,355
NetIncome  1,010  (150)  71  14  54  999
BasicEarningsperShare  0.96  (0.14)  0.07  0.01  0.05  0.95
DilutedEarningsperShare $ 0.95 $ (0.14) $ 0.07 $ 0.01 $ 0.05 $ 0.94
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES
(Amounts in millions, except earnings per share data)
(a) Reectsthenetchangeindeferredrevenuesandrelatedcostofsales.
(b) Includesexpenserelatedtostock-basedcompensation.
(c) Reectsamortizationofintangibleassetsfrompurchasepriceaccounting.
(d) Reectsfeesandotherexpenses(includinglegalfees,costs,expensesandaccruals)relatedtotherepurchaseof429millionsharesofourcommon
 stockfromVivendi(the“PurchaseTransaction”)completedonOctober11,2013andrelateddebtnancings.
Thecompanycalculatesearningspersharepursuanttothetwo-classmethodwhichrequirestheallocationofnetincomebetweencommonshareholders
andparticipatingsecurityholders.NetincomeattributabletoActivisionBlizzardcommonshareholdersusedtocalculatenon-GAAPearningspercommon
shareassumingdilutionwas$686millionand$1,034millionforthethreemonthsandyearendedDecember31,2014ascomparedtototalnon-GAAPnet
incomeof$698millionand$1,057millionforthesameperiods,respectively.
Forpurposeofcalculationofearningspershare,wehad,onaweighted-averagebasis,commonsharesoutstandingof720million,participatingsecurities
ofapproximately12million,anddilutivesharesof9millionduringthethreemonthsendedDecember31,2014.
Forpurposeofcalculationofearningspershare,wehad,onaweighted-averagebasis,commonsharesoutstandingof716million,participatingsecurities
ofapproximately15million,anddilutivesharesof10millionduringtheyearendedDecember31,2014.
Thepershareadjustmentsarepresentedascalculated,andtheGAAPandnon-GAAPearningspershareinformationisalsopresentedascalculated.
Thesumofthesemeasures,aspresented,maydifferduetotheimpactofrounding.
Less:
Less: Fees and other
Net effect from Less: Less: expenses related to the
deferral of net Stock- Amortization Purchase Transaction
GAAP revenues and related based of intangible and related debt Non-GAAP
Year Ended December 31, 2014 Measurement cost of sales(a) compensation(b) assets(c) nancings(d) Measurement
NetRevenues $ 4,408 $ 405 $ — $ — $ — $ 4,813
CostofSales-ProductCosts  999  29  —  —  —  1,028
CostofSales-Online  232  —  (1)  —  —  231
CostofSales-
 SoftwareRoyaltiesandAmortization  260  161  (17)  —  —  404
CostofSales-IntellectualPropertyLicense 34  —  —  (12)  —  22
ProductDevelopment  571  —  (22)  —  —  549
SalesandMarketing  712  —  (8)  —  —  704
GeneralandAdministrative  417  —  (56)  —  (13)  348
TotalCostsandExpenses $ 3,225 $ 190 $ (104) $ (12) $ (13) $ 3,286
Less:
Less: Fees and other
Net effect from Less: Less: expenses related to the
deferral of net Stock- Amortization Purchase Transaction
GAAP revenues and related based of intangible and related debt Non-GAAP
Year Ended December 31, 2014 Measurement cost of sales(a) compensation(b) assets(c) nancings(d) Measurement
OperatingIncome $ 1,183 $ 215 $ 104 $ 12 $ 13 $ 1,527
NetIncome  835  136  65  8  13  1,057
BasicEarningsperShare  1.14  0.19  0.09  0.01  0.02  1.44
DilutedEarningsperShare $ 1.13 $ 0.18 $ 0.09 $ 0.01 $ 0.02 $ 1.42
8483