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15.ComputationofEarnings(Loss)PerBasic/DilutedCommonShare
Thefollowingtablesetsforththecomputationofbasicanddilutedearnings(loss)percommon
share(amountsinmillions,exceptpersharedata):
FortheYearsended
December31,
2009
2008
2007
Numerator:
Consolidatednetincome(loss)................................................................................................
$113
$(107)
$227
Netincomeallocatedtounvestedsharebasedawardsthatparticipatein
earnings...............................................................................................................................
(1)
—
—
Numeratorforbasicanddilutedearningspercommonshare—income(loss)
availabletocommonshareholders.......................................................................................
$112
$(107)
$227
Denominator:
Denominatorforbasicearningspercommonshare—weightedaverage
commonsharesoutstanding................................................................................................
1,283
946
591
Effectofpotentialdilutivecommonsharesundertreasurystockmethod:
Employeestockoptions................................................................................................
28
—
—
Denominatorfordilutedearningspercommonshare—weightedaverage
commonsharesoutstandingpluspotentialdilutiveeffectofemployeestock
options................................................................................................................................
1,311
946
591
Basicearnings(loss)percommonshare................................................................
$0.09
$(0.11)
$0.38
Dilutedearnings(loss)percommonshare................................................................
$0.09
$(0.11)
$0.38
Ourunvestedrestrictedstockrights(includingrestrictedstockunits,restrictedstockawards,and
performanceshares)areconsideredparticipatingsecuritiessincethesesecuritieshavenonforfeitablerights
todividendsordividendequivalentsduringthecontractualperiodoftheaward.Sincetheunvested
restrictedstockrightsareconsideredparticipatingsecurities,wearerequiredtousethetwoclassmethodin
ourcomputationofbasicanddilutednetearningspercommonshare.FortheyearendedDecember31,
2009,wehadoutstandingunvestedrestrictedstockrightswithrespectto10millionsharesofcommon
stockonaweightedaveragebasis.
Accordingtothetermsofourrestrictedstockplans,ourunvestedrestrictedstockrightsdonot
participatewithcommonstockinundistributedlosses.Therefore,thetwoclassmethodinourcomputation
ofbasicanddilutednetearningspercommonsharefortheyearendedDecember31,2008doesnotapply
astherewerelossesduringthisperiod.
InJuly2008,theBoardofDirectorsapprovedatwoforonesplitofouroutstandingcommon
stockeffectedintheformofastockdividend(“thesplit”).ThesplitwaspaidSeptember5,2008to
shareholdersofrecordasofAugust25,2008.Theparvalueofourcommonstockwasmaintainedatthe
presplitamountof$.000001pershare.TheconsolidatedfinancialstatementsandNotesthereto,including
allshareandpersharedata,havebeenrestatedasifthesplithadoccurredasoftheearliestperiod
presented.
OnJuly9,2008,VivendiobtainedcontrolofActivision,Inc.throughacquisitionofthemajority
oftheoutstandingcommonstockofActivision,Inc.Foraccountingpurposes,VivendiGamesisdeemedto
betheacquirer(asthetransactionwasa“reverseacquisition”—seeNote1ofthenotestoconsolidated
financialstatements).Assuch,thehistoricalfinancialstatementspriortoJuly10,2008,arethoseof
VivendiGames.Further,earningspercommonshareforperiodspriortotheBusinessCombinationare
retrospectivelyadjustedtoreflectthenumberofsplitadjustedsharesreceivedbyVivendi,theformer
parentofVivendiGames.
Potentialcommonsharesarenotincludedinthedenominatorofthedilutedearningspercommon
sharecalculationwheninclusionofsuchshareswouldbeantidilutive.Therefore,optionstoacquire
20millionand40millionsharesofcommonstockwerenotincludedinthecalculationofdilutedearnings
percommonsharefortheyearsendedDecember31,2009and2008,respectively,astheeffectoftheir
inclusionwouldbeantidilutive.