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ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES
(Amount s in m illions , e xc ept earni ngs pe r sha re da ta)
1eectsthenetchangeindeferredrevenuesandrelatedcostofsales.
2 ncludesexpensesrelatedtostoc-basedcompensation.
3 eectsamortiationofintangibleassetsfrompurchasepriceaccounting.
4 eectsfeesandotherexpensesrelatedtoacuisitions,includingtheingAcuisition,andthedebtnancingsrelatedthereto.
ThepershareadustmentsandtheGAAPandnon-GAAPearningspershareinformationarepresentedascalculated.Thesumofthesemeasures,aspresented,may
differduetotheimpactofrounding.
Thecompanycalculatesearningspersharepursuanttothetwo-classmethodwhichreuirestheallocationofnetincomebetweencommonshareholdersand
participatingsecurityholders.FortheyearendedDecember31,2015,netincomeattributabletoActivisionliard,nc.commonshareholdersusedtocalculate
non-GAAPearningspercommonshare,assumingdilution,was$977million,ascomparedtototalnetincomeof$989million,forthesameperiod.Forpurposesof
calculatingearningspershare,wehad,onaweighted-averagebasis,commonsharesoutstandingof728million,participatingsecuritiesofapproximately8million,
anddilutivesharesof11millionduringtheyearendedDecember31,2015.
Year Ended December 31, 2015
Netevenues $ 4,664 $ (43) $ — $ — $ — $ 4,621
CostofSales-ProductCosts 921 (32) — — — 889
CostofSales-Online 224 — — — — 224
CostofSales-SoftwareoyaltiesandAmortiation 412 (55) (15) — — 342
CostofSales-ntellectualPropertyicenses 28 5 — (11) — 22
ProductDevelopment 646 — (25) — — 621
SalesandMareting 734 — (9)— — 725
GeneralandAdministrative 380 — (43)— (5)332
TotalCostsandExpenses $ 3,345 $ (82) $ (92) $ (11) $ (5) $ 3,155
Year Ended December 31, 2015
Operatingncome $ 1,319 $ 39 $ 92 $ 11 $ 5 $ 1,466
Netncome 892 19 65 8 5 989
asicEarningsperShare 1.21 0.02 0.09 0.01 0.01 1.34
DilutedEarningsperShare $ 1.19 $ 0.02 $ 0.09 $ 0.01 $ 0.01 $ 1.32
Less:
Net effect from
deferral of net
revenues and related
cost of sales 1
Less:
Stock-
based
compensation 2
Less:
Amortization
of intangi ble
assets 3
Less:
Fees and other
exp enses related to
acquisitions 4
GAAP
Measurement
Non-GAAP
Measurement
Less:
Net effect from
deferral of net
revenues and related
cost of sales 1
Less:
Stock-
based
compensation 2
Less:
Amortization
of intangi ble
assets 3
Less:
Fees and other
exp enses related to
acquisitions 4
GAAP
Measurement
Non-GAAP
Measurement
84
10-K Activision_Master_032416_PrinterMarksAdded.pdf 84 3/24/16 11:00 PM