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13
Schedules of Reconciliation of Reported Consolidated and Segment Financial Information to Pro Forma Consolidated and
Segment Financial Information for the Year Ended December 31, 2008
For the year ended December 31, 2008, the pro forma consolidated financial information below is comprised of
Activision, Inc.’s financial information for the period January 1, 2008 to July 9, 2008 together with Activision Blizzard’s
reported financial information for the year ended December 31, 2008. Activision, Inc.’s financial information for the three
months ended March 31, 2008 and June 30, 2008 are extracted from the quarterly information which has not been audited.
Activision, Inc.’s financial information from July 1, 2008 to July 9, 2008 has not been audited. In conjunction with the
Business Combination, senior management changed the manner in which they assess the operating performance of, and
allocate resources to, our operating segments during the year ended December 31, 2008.
For the year ended December 31, 2008
Reported Activision, Inc.
Pro forma
adjustments(i)
Pro forma
Activision Blizzard
Consolidated net revenues .................................................... $3,026 $1,310 $— $4,336
Reconciliation to segment net revenues:
Net effect from deferral of net revenues ............................. 713 — — 713
Other(ii) .............................................................................. (17) — — (17)
Total segment net revenues .................................................. $3,722 $1,310 $— $5,032
Segment net revenues
Activision ............................................................................ $2,152 $1,127 $— $3,279
Blizzard ............................................................................... 1,343 — — 1,343
Distribution ......................................................................... 227 183 — 410
Total segment net revenues .................................................. $3,722 $1,310 $— $5,032
Consolidated operating income (loss) .................................. $(233) $85 $(106) $(254)
Reconciliation to segment operating income (loss):
Net effect from deferral of net revenues and related
cost of sales ..................................................................... 496 — — 496
Stock-based compensation expense .................................... 90 32 59 181
Restructuring....................................................................... 93 — — 93
Amortization of intangible assets and purchase price
accounting related adjustments ....................................... 292 — 84 376
Integration and transaction costs ......................................... 29 50 (37) 42
Other(ii) .............................................................................. 266 — — 266
Total segment operating income (loss) from
operations .......................................................................... $1,033 $167 $— $1,200
Segment income from operations
Activision ............................................................................ $307 $162 $— $469
Blizzard ............................................................................... 704 — — 704
Distribution ......................................................................... 22 5 — 27
Total segment income from operations ............................... $1,033 $167 $— $1,200
Consolidated net income (loss) ............................................. $(107) $60 $(64) $(111)
(i) The pro forma adjustments include the increased amortization expense resulting from the application of the purchase
method of accounting ($84 million for the year ended December 31, 2008), elimination of Activision, Inc.’s
historical transaction costs ($37 million for the year ended December 31, 2008), and an increase in stock-based
compensation expense associated with the increase in the fair value of Activision, Inc.’s unvested stock awards at
the closing date of the Business Combination ($59 million for the year ended December 31, 2008). Pro forma
adjustments are shown net of tax using an assumed combined federal and state statutory tax rate of 39.4%.
(ii) Represents Non-Core activities, which are legacy Vivendi Games’ divisions or business units that we have exited,
divested or wound down as part of our restructuring and integration efforts as a result of the Business Combination.
Prior to July 1, 2009, Non-Core activities were managed as a stand-alone operating segment; however, in light of the
minimal activities and insignificance of Non-Core activities, as of that date we ceased their management as a
separate operating segment and consequently, we are no longer providing separate operating segment disclosure and
have reclassified our prior periods’ segment presentation so that it conforms to the current period’s presentation.