Blizzard 2010 Annual Report Download - page 46

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ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in millions)
For the Years Ended
December 31,
2010 2009 2008
Cash flows from operating activities:
Net income (loss) ................................................................................................................................... $418 $113 $(107)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred income taxes ....................................................................................................................... (278) (256) (430)
Impairment of intangible assets (see Note 12) ................................................................................... 326 409 21
Depreciation and amortization ........................................................................................................... 198 347 385
(Gain) loss on auction rate securities (“ARS”) classified as trading securities .................................. (7) (3) 7
Loss on ARS rights from UBS ........................................................................................................... 7 3 2
Loss on disposal of property and equipment ...................................................................................... 1 2 6
Amortization and write-off of capitalized software development costs and intellectual property
licenses (1) ..................................................................................................................................... 319 281 176
Stock-based compensation expense (2).............................................................................................. 131 156 89
Excess tax benefits from stock option exercises ................................................................................ (22) (79) (21)
Changes in operating assets and liabilities:
Accounts receivable ........................................................................................................................... 76 235 (428)
Inventories ......................................................................................................................................... 124 21 (20)
Software development and intellectual property licenses .................................................................. (313) (308) (181)
Other assets ........................................................................................................................................ 17 (110) (165)
Deferred revenues .............................................................................................................................. 293 503 726
Accounts payable ............................................................................................................................... 70 (18) 86
Accrued expenses and other liabilities ............................................................................................... 16 (113) 233
Net cash provided by operating activities ............................................................................................... 1,376 1,183 379
Cash flows from investing activities:
Proceeds from maturities of investments ................................................................................................ 519 44 —
Proceeds from sale of ARS classified as trading securities .................................................................... 61 — —
Proceeds from sale of available-for-sale investments ............................................................................. — 2 —
Payment of contingent consideration ..................................................................................................... (4) — —
Purchases of available-for-sale investments ........................................................................................... (800) (425) —
Capital expenditures ............................................................................................................................... (97) (69) (46)
Net proceeds from disposal of assets—restructuring (see Note 8) ......................................................... — — 9
Cash acquired through Business Combination, net of cash payments to effect acquisitions .................. — — 1,120
Decrease in restricted cash ..................................................................................................................... 9 5 18
Net cash provided by (used in) investing activities ................................................................................ (312) (443) 1,101
Cash flows from financing activities:
Proceeds from issuance of common stock to employees ........................................................................ 73 81 22
Repurchase of common stock through tender offer ................................................................................ — — (2)
Return of capital to Vivendi ................................................................................................................... — — (79)
Issuance of additional common stock related to the Business Combination........................................... — — 1,731
Repurchase of common stock ................................................................................................................. (959) (1,109) (126)
Settlement of payable to Vivendi ........................................................................................................... — — (79)
Dividends paid ....................................................................................................................................... (189) — —
Excess tax benefits from stock option exercises ..................................................................................... 22 79 21
Net cash provided by (used in) financing activities ................................................................................ (1,053) (949) 1,488
Effect of foreign exchange rate changes on cash and cash equivalents ...................................................... 33 19 (72)
Net increase (decrease) in cash and cash equivalents ................................................................................. 44 (190) 2,896
Cash and cash equivalents at beginning of period ...................................................................................... 2,768 2,958 62
Cash and cash equivalents at end of period ................................................................................................ $2,812 $2,768 $2,958
(1) Excludes deferral and amortization of stock-based compensation expense.
(2) Includes the net effects of capitalization, deferral, and amortization of stock-based compensation expense.
The accompanying notes are an integral part of these Consolidated Financial Statements.