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2015 ANNUAL REPORT
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Table of contents

  • Page 1
    ® ® 2015BANNUALBREPORT

  • Page 2
    ...$6BBILLIONBOVERBTHEBLASTB5BYEARS FIGURES IN THIS ANNUAL REPORT DO NOT INCLUDE KING UNLESS OTHERWISE INDICATED. Non-GAAP; for a full reconciliation, please see tables at the end of the annual report. Constant FX provides current period results converted into USD using the average exchange rates from...

  • Page 3
    .... 2 King acquisition closed on February 23, 2016. Includes fourth quarter 2015 Activision Blizzard and King MAU. 3Non-GAAP; for a full reconciliation, please see tables at the end of the annual report. 4 Constant FX provides current period results converted into USD using the average exchange rates...

  • Page 4
    2

  • Page 5
    #1 CONSOLE GAME GLOBALLY IN 20151 AND NEXT-GEN LEADER #1 FRANCHISE IN NA 7TH YEAR IN A ROW 2 RECORD FRANCHISE MAU3 AT THE END OF 2015 ® 1 NPD, Gfk Chart-Track, and Activision Blizzard internal estimates. 2 NPD. 3 MAU defined as number of individuals who played a particular game in a given month...

  • Page 6
    ACHIEVED RECORD DIGITAL ATTACH RATES WITH THE TAKEN KING EXPANSION1 OVER 25 MILLION REGISTERED USERS HAVE LOGGED NEARLY 3 BILLION HOURS IN-GAME ® 1 4 Digital attach rate refers to expansion sales as a percentage of full games sold.

  • Page 7
    NEW TELEVISION SERIES, SKYLANDERS ACADEMY, EXPECTED TO LAUNCH IN 2016 LARGEST KIDS CONSOLE FRANCHISE SINCE ITS RELEASE1 #11 CONSOLE FRANCHISE LIFE-TO-DATE1 ® 1 NPD, Gfk Chart-Track, including toys and accessories, in NA & EU. 5

  • Page 8
    #1 SUBSCRIPTION-BASED, MASSIVELY MULTIPLAYER ONLINE ROLE-PLAYING GAME 10 YEARS RUNNING 6TH EXPANSION TO LAUNCH IN SUMMER OF 2016 ® 6

  • Page 9
    MORE THAN 40 MILLION REGISTERED PLAYERS RECORD ENGAGEMENT AT THE END OF 2015 ® 7

  • Page 10
    2015 LAUNCH IN CHINA BROKE PC SALES RECORDS ® 8

  • Page 11
    LAUNCHED FINAL CHAPTER OF STARCRAFT II TRILOGY, LEGACY OF THE VOID, SELLING-THROUGH OVER 1 MILLION COPIES IN THE FIRST 24 HOURS ® 9

  • Page 12
    NUMEROUS AWARDS, INCLUDING BEST COMPETITIVE MULTIPLAYER AND BEST MOBA1 FROM GAME INFORMER ® 1 10 Multiplayer online battle arena.

  • Page 13
    TEAM-BASED SHOOTER COMING TO PC AND CONSOLE THIS SPRING OVER 8 MILLION PEOPLE HAVE SIGNED UP FOR THE BETA ® 11

  • Page 14
    ...CONSECUTIVE QUARTERS1,2 NEARLY 450 MILLION MONTHLY ACTIVE USERS PLAYING 1.4 BILLION GAMES PER DAY2 1 12 2 U.S. rankings for Apple App Store and Google Play Store, per App Annie Intelligence for fourth quarter 2015. King acquisition closed on February 23, 2016. Metrics as of fourth quarter 2015.

  • Page 15
    ..., but this has largely come from non-operational activities, and we intend to return good growth to our operating businesses over the next few years. 13 1 Based on fully diluted shares and participating securities for the quarter ending December 31, 2015. Please note, all figures included in the...

  • Page 16
    ... cost of entry, mobile phones-unlike PCs or game consoles-are much less expensive, easier to use, portable and available in every country in the world. The market for mobile games is more diverse than PCs or consoles; the mobile market is eight times the size it was five years ago and is projected...

  • Page 17
    ...content and services planned to further enhance the player experience. We paid a very reasonable price for King at six times their 2015 adjusted EBITDA, and as a result, with over 500 million users each month, we are now the world's largest gaming network. To understand the scale of this network, on...

  • Page 18
    ... team is led by big talents: a two-time Academy Award-nominated producer, Stacey Sher, and a senior executive of many years at The Walt Disney Company, Nick van Dyk. Today we operate the largest gaming network in the world, with over 500 million users playing our games every month. Our entertainment...

  • Page 19
    ® ® FINANCIALBREVIEW

  • Page 20
    ... 13, 2015, to shareholders of record at the close of business on March 30, 2015. On February 6, 2014, our Board of Directors declared a cash dividend of $0.20 per share, payable on May 14, 2014, to shareholders of record at the close of business on March 19, 2014. On February 7, 2013, our Board of...

  • Page 21
    ... common stock, pursuant to the Stock Purchase Agreement, for a cash payment of $2.34 billion, or $13.60 per share (the "Private Sale"). Robert A. Kotick, our Chief Executive Officer, and Brian G. Kelly, Chairman of our Board of Directors, are affiliates of ASAC II LLC. On May 28, 2014, Vivendi sold...

  • Page 22
    ... all Blizzard games. Blizzard distributes its products and generates revenues worldwide through various means, including: subscriptions; sales of prepaid subscription cards; in-game purchases and services; retail sales of physical "boxed" products; online download sales of PC products; purchases and...

  • Page 23
    ... currency exchange rates and changes in local economies. Management's Overview of Business Trends Digital Revenues We provide our products through both retail and digital distribution channels. Many of our video games that are available through retailers as physical "boxed" software products are...

  • Page 24
    ... value-added services, downloadable content, microtransactions, and products. This definition may differ from that used by our competitors or other companies. According to Activision Blizzard internal estimates, digital gaming revenues for the interactive entertainment industry in 2015, increased by...

  • Page 25
    ... on a number of factors including, but not limited to, title release date, consumer demand, market conditions and shipment schedules. Outlook For 2016, our results will include the operations of King, beginning on February 23, 2016, the date the King Acquisition closed. Our earnings under accounting...

  • Page 26
    ... 2014 2015 2013 Net revenues: Product sales...Subscription, licensing, and other revenues ...Total net revenues ...Costs and expenses: Cost of sales-product costs ...Cost of sales-online ...Cost of sales-software royalties and amortization...Cost of sales-intellectual property licenses ...Product...

  • Page 27
    ... of the change in deferred revenues and related cost of sales with respect to certain of our online-enabled games, stock-based compensation expense, amortization of intangible assets as a result of purchase price accounting, and fees and other expenses (including legal fees, costs, expenses and...

  • Page 28
    ... pack, The Dark Below, in 2014. Blizzard Blizzard's net revenues decreased for 2015, as compared to 2014, primarily due to the timing of game releases; most notably Diablo III: Reaper of Soulsâ„¢, which was released in March 2014 on the PC, Diablo III: Reaper of Souls-Ultimate Evil Editionâ„¢, which...

  • Page 29
    ...-product costs, higher product development costs and higher sales and marketing activities to support a higher number of titles released in 2014. Foreign Exchange Impact Changes in foreign exchange rates had a negative impact of $364 million on Activision Blizzard's segment net revenues for 2015...

  • Page 30
    ... revenues from digital online channels as revenues from digitally distributed subscriptions, licensing royalties, value-added services, downloadable content, microtransactions, and products. Net revenues from Other include revenues from our Media Networks and Studios businesses, along with revenues...

  • Page 31
    ... in the current year, as compared to Skylanders Trap Team, the comparable prior-year title, and from the Diablo franchise due to timing of title releases. This was partially offset by revenues from Guitar Hero Live, which was released in the fourth quarter of 2015, with no comparable release in the...

  • Page 32
    ...North America region increased in 2015 as compared to 2014, primarily due to higher revenues recognized from the Destiny franchise, higher revenues recognized from Hearthstone: Heroes of Warcraft, and revenues recognized from Heroes of the Storm and Guitar Hero Live, which were both released in 2015...

  • Page 33
    ...(4) consolidated net revenues Increase/ (Decrease) 2015 v 2014 Increase/ (Decrease) 2014 v 2013 Platform net revenues: Online(1)...PC ...Next-generation (PS4, Xbox One, Wii U) ...Prior-generation (PS3, Xbox 360, Wii) ...Total Console...Mobile and ancillary(2) ...Total Activision Blizzard ...Other...

  • Page 34
    ... Spider-Manâ„¢ 2 and Transformersâ„¢: Rise of the Dark Spark in the second quarter of 2014; Diablo III: Reaper of Souls-Ultimate Evil Edition and Destiny in the third quarter of 2014, and Call of Duty: Advanced Warfare and Skylanders Trap Team in the fourth quarter of 2014. In 2015, we have released...

  • Page 35
    ... of revenues from Diablo III on PS3 and Xbox 360, which was released in 2013. Costs and Expenses Cost of Sales The following tables detail the components of cost of sales in dollars and as a percentage of total consolidated net revenues for the years ended December 31, 2015, 2014, and 2013 (amounts...

  • Page 36
    ... support the launch of Guitar Hero Live and Heroes of the Storm during the year. The increase was partially offset by lower media spending on the World of Warcraft, Destiny, and Diablo franchises due to the timing of title releases. Sales and marketing expenses increased in 2014, as compared to 2013...

  • Page 37
    ... tax returns for the 2008 through 2011 tax years. During the second quarter of 2015, the Company transitioned the review of its transfer pricing methodology from the advanced pricing agreement review process to the IRS examination team. Their review could result in a different allocation of profits...

  • Page 38
    ... Financial Statements included in this Annual Report. Foreign Exchange Impact Changes in foreign exchange rates had a negative impact of $242 million, a negative impact of $8 million, and a positive impact of $20 million on Activision Blizzard's consolidated operating income in 2015, 2014 and 2013...

  • Page 39
    ... generated by the sale of our products and digital and subscription revenues, partially offset by payments to vendors for the manufacturing, distribution and marketing of our products, payments for customer service support for our players, payments to third-party developers and intellectual property...

  • Page 40
    ... December 31, 2015, to finance our operational and financing requirements for at least the next twelve months, including: purchases of inventory and equipment; the development, production, marketing and sale of new products; provision of customer service for our players; acquisition of intellectual...

  • Page 41
    ...were to be issued upon successful closing to fund the King Acquisition. On February 23, 2016, we successfully completed the King Acquisition and the Tranche A Term Loans funded. The Tranche A Term Loans are scheduled to mature on October 11, 2020 and bear interest, at the Company's option, at either...

  • Page 42
    ... 2, 2016, our Board of Directors declared a cash dividend of $0.26 per common share, payable on May 11, 2016, to shareholders of record at the close of business on March 30, 2016. Capital Expenditures We made capital expenditures of $111 million in 2015, as compared to $107 million in 2014. In 2016...

  • Page 43
    ... in place at December 31, 2015 are scheduled to be paid as follows (amounts in millions): Contractual Obligations(1) Developer Long-term debt Marketing and IP obligations(2) Facility and equipment leases Total For the Year Ending December 31, 2016 ...2017 ...2018 ...2019...2020 ...Thereafter...

  • Page 44
    ... business units prepare quarterly reports regarding their current-quarter operational performance, future trends, subsequent events, internal controls, changes in internal controls and other accounting and disclosure relevant information. These quarterly reports are reviewed by certain key corporate...

  • Page 45
    ... sale of durable virtual goods ratably over the period of time the goods are available to the player, generally the estimated service period of the game. We determine the estimated service period for our games with consideration of various data points, including the weighted-average number of days...

  • Page 46
    ...timing of our revenues for any period if factors or market conditions change or if management makes different judgments or utilizes different estimates in determining the allowances for returns and price protection. For example, a 1% change in our December 31, 2015 allowance for sales returns, price...

  • Page 47
    ... to "Cost of sales-intellectual property licenses" based on the ratio of current revenues for the specific product to total projected revenues for all products in which the licensed property will be utilized. As intellectual property license contracts may extend for multiple years and can be used in...

  • Page 48
    ... an impairment charge to our definite-lived intangible assets as of December 31, 2015, 2014 and 2013. Financial Accounting Standards Board ("FASB") literature related to the accounting for goodwill and other intangibles within ASC Topic 350 provides companies an option to first perform a qualitative...

  • Page 49
    ..., restricted stock awards and performance shares) based on the closing market price of the Company's common stock on the date of grant. Certain restricted stock rights granted to our employees and senior management vest based on the achievement of pre-established performance or market conditions. We...

  • Page 50
    ... impact on our financial statements. Internal-Use Software In April 2015, the FASB issued new guidance related to internal-use software. The new standard relates to a customer's accounting for fees paid in cloud computing arrangements. The amendment provides guidance for customers to determine...

  • Page 51
    Business Combinations In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, providing new guidance related to business combinations. The new standard requires that the cumulative impact of a measurement period adjustment, including the ...

  • Page 52
    ... and interest rates. Foreign Currency Exchange Rate Risk We transact business in many different foreign currencies and may be exposed to financial market risk resulting from fluctuations in foreign currency exchange rates. Revenues and related expenses generated from our international operations are...

  • Page 53
    ... Facilities. We do not currently use derivative financial instruments to manage interest rate risk. As of December 31, 2015, a hypothetical interest rate change on our variable rate debt of one percent (100 basis points) would change interest expense on an annual basis by approximately $19 million...

  • Page 54
    ... in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness, as of December 31, 2015, of our internal control over financial reporting using the...

  • Page 55
    ...material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible...

  • Page 56
    ..., 1,163,179,140 and 1,150,605,926 shares issued at December 31, 2015 and December 31, 2014, respectively...Additional paid-in capital ...Less: Treasury stock, at cost, 428,676,471 shares at December 31, 2015 and December 31, 2014 Retained earnings...Accumulated other comprehensive loss ...Total...

  • Page 57
    ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in millions, except per share data) For the Years Ended December 31, 2015 2014 2013 Net revenues Product sales ...$ Subscription, licensing, and other revenues ...Total net revenues ...Costs and expenses Cost ...

  • Page 58
    ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in millions) For the Years Ended December 31, 2015 2014 2013 Net income ...Other comprehensive income (loss): Foreign currency translation adjustment ...Unrealized losses on forward contracts ...

  • Page 59
    ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the Years Ended December 31, 2015, 2014, and 2013 (Amounts and shares in millions, except per share data) Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Total ...

  • Page 60
    ... discount and debt financing costs ...Stock-based compensation expense(2) ...Excess tax benefits from stock awards ...Changes in operating assets and liabilities: Accounts receivable, net...Inventories ...Software development and intellectual property licenses ...Other assets ...Deferred revenues...

  • Page 61
    ..., ASAC purchased from Vivendi 172 million shares of Activision Blizzard's common stock, pursuant to the Stock Purchase Agreement, for a cash payment of $2.34 billion, or $13.60 per share (the "Private Sale"). Robert A. Kotick, our Chief Executive Officer, and Brian G. Kelly, Chairman of our Board of...

  • Page 62
    ... all Blizzard games. Blizzard distributes its products and generates revenues worldwide through various means, including: subscriptions; sales of prepaid subscription cards; in-game purchases and services; retail sales of physical "boxed" products; online download sales of PC products; purchases and...

  • Page 63
    ... based on quoted market prices for such securities, if available, or is estimated on the basis of quoted market prices of financial instruments with similar characteristics. The Company transacts business in various foreign currencies and has significant international sales and expenses denominated...

  • Page 64
    ... of current revenues to total projected revenues for the specific product, generally resulting in an amortization period of six months or less, or over the estimated useful life, generally approximately one to two years. Intellectual property license costs represent license fees paid to intellectual...

  • Page 65
    ... to "Cost of sales-intellectual property licenses" based on the ratio of current revenues for the specific product to total projected revenues for all products in which the licensed property will be utilized. As intellectual property license contracts may extend for multiple years and can be used in...

  • Page 66
    ... December 31, 2015, 2014, and 2013. Revenue Recognition We recognize revenues when there is persuasive evidence of an arrangement, the product or service has been provided to the customer, the collection of our fees is reasonably assured and the amount of fees to be paid by the customer is fixed or...

  • Page 67
    ... completed, or based on usage by the end user, when we have continuing service obligations. We recognize any upfront licensing fees received over the term of the contracts. With respect to license agreements that provide customers the right to make multiple copies in exchange for guaranteed amounts...

  • Page 68
    ... the average total hours played, the average number of days in which player activity stabilizes, and the weighted-average number of days between players' first purchase date and last date played online. We also consider known online trends and the service periods of our previously released games and...

  • Page 69
    ...Expenses We expense advertising as incurred, except for production costs associated with media advertising, which are deferred and charged to expense when the related advertisement is run for the first time. Advertising expenses for the years ended December 31, 2015, 2014, and 2013 were $523 million...

  • Page 70
    ..., restricted stock awards and performance shares) based on the closing market price of the Company's common stock on the date of grant. Certain restricted stock rights granted to our employees and senior management vest based on the achievement of pre-established performance or market conditions. We...

  • Page 71
    ...: License agreements and other ...Internally-developed franchises ...Developed software ...Total definite-lived intangible assets ...Acquired indefinite-lived intangible assets: Activision trademark ...Acquired trade names ...Total indefinite-lived intangible assets ... 1 - 10 years 11 years 5 years...

  • Page 72
    ... our intangible assets for the years ended December 31, 2015, 2014 and 2013. 8. Goodwill The changes in the carrying amount of goodwill by operating segment for the years ended December 31, 2015 and 2014 are as follows (amounts in millions): Activision Blizzard Other Total Balance at December...

  • Page 73
    ... date (amounts in millions): Fair Value Measurements at December 31, 2015 Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) As of December 31, 2015 Balance Sheet Classification Financial...

  • Page 74
    ...December 31, 2015, and recorded in "Other current assets" in our consolidated balance sheet. At December 31, 2014, outstanding foreign currency forward contracts not designated as hedges were not material. For the years ended December 31, 2015, 2014, and 2013, pre-tax net gains associated with these...

  • Page 75
    ... of a change in control and a ratings downgrade, at a purchase price equal to 101% of principal, plus accrued and unpaid interest. These redemption options are considered clearly and closely related to the Notes and are not accounted for separately upon issuance. Fees associated with the closing of...

  • Page 76
    ...As of December 31, 2015 and 2014, the carrying value of the Term Loan approximates the fair value, based on Level 2 inputs (observable market prices in less than active markets), as the interest rate is variable over the selected interest period and is similar to current rates at which we can borrow...

  • Page 77
    ... of the change in deferred revenues and related cost of sales with respect to certain of our online-enabled games, stock-based compensation expense, amortization of intangible assets as a result of purchase price accounting, and fees and other expenses (including legal fees, costs, expenses and...

  • Page 78
    ...World of Warcraft products, including subscriptions, boxed products, expansion packs, licensing royalties, and value-added services. Revenues from Mobile and ancillary include revenues from handheld, mobile and tablet devices, as well as non-platform specific game related revenues such as standalone...

  • Page 79
    ... Compensation Activision Blizzard Equity Incentive Plans On June 5, 2014, our shareholders approved the Activision Blizzard, Inc. 2014 Incentive Plan (the "2014 Plan") and the 2014 Plan became effective. The 2014 Plan authorizes the Compensation Committee of our Board of Directors to provide stock...

  • Page 80
    ... tables present the weighted-average assumptions and the weighted-average fair value at grant date using the binomial-lattice model: Employee and Director Options For the Years Ended December 31, 2015 2014 2013 Expected life (in years) ...6.26 5.97 6.44 Risk free interest rate ...1.90% 1.82% 1.86...

  • Page 81
    ...trading day of the period and the exercise price, times the number of shares for options where the exercise price is below the closing stock price) that would have been received by the option holders had all option holders exercised their options on that date. This amount changes based on the market...

  • Page 82
    ... of operations for the years ended December 31, 2015, 2014, and 2013 (amounts in millions): For the Years Ended December 31, 2015 2014 2013 Cost of sales-online ...Cost of sales-software royalties and amortization ...Product development ...Sales and marketing ...General and administrative ...Stock...

  • Page 83
    ... at the effective tax rate for each of the years are as follows (amounts in millions): For the Years Ended December 31, 2014 2015 2013 Federal income tax provision at statutory rate ...State taxes, net of federal benefit ...Research and development credits ...Foreign rate differential...Change in...

  • Page 84
    ... December 31, 2015 2014 Deferred tax assets: Allowance for sales returns and price protection...$ 66 Inventory reserve ...11 Accrued expenses ...40 Deferred revenue...288 Tax credit carryforwards ...58 Net operating loss carryforwards ...10 Stock-based compensation ...54 Transaction costs...9 Other...

  • Page 85
    ... tax returns for the 2008 through 2011 tax years. During the second quarter of 2015, the Company transitioned the review of its transfer pricing methodology from the advanced pricing agreement review process to the IRS examination team. Their review could result in a different allocation of profits...

  • Page 86
    ...Stock Purchase Agreement (refer to Note 11 of the Notes to Consolidated Financial Statements for financing details of the Purchase Transaction). The repurchased shares were recorded in "Treasury Stock" in our consolidated balance sheet. Repurchase Programs On February 3, 2015, our Board of Directors...

  • Page 87
    ...May 29, 2015, we made related dividend equivalent payments of $3 million to certain holders of restricted stock rights. On February 6, 2014, our Board of Directors declared a cash dividend of $0.20 per common share, payable on May 14, 2014, to shareholders of record at the close of business on March...

  • Page 88
    ...arrangements in place at December 31, 2015 are scheduled to be paid as follows (amounts in millions): Contractual Obligations(1) Developer and Intellectual Marketing Properties Facility and Equipment Leases Total For the years ending December 31, 2016 ...2017 ...2018 ...2019 ...2020 ...Thereafter...

  • Page 89
    ... 31, 2015, Vivendi sold their remaining shares of our common stock. Transactions with ASAC's Affiliates Pursuant to the Stock Purchase Agreement, the Company and each of Mr. Kotick, the Company's Chief Executive Officer, and Mr. Kelly, the Company's Chairman of the board of directors, entered...

  • Page 90
    ... impact on our financial statements. Internal-Use Software In April 2015, the FASB issued new guidance related to internal-use software. The new standard relates to a customer's accounting for fees paid in cloud computing arrangements. The amendment provides guidance for customers to determine...

  • Page 91
    ...22, 2015, we acquired the business of Major League Gaming, Inc. for an aggregate purchase price of $46 million in cash. MLG is a leader in creating and streaming premium live gaming events, organizing professional competitions and running competitive gaming leagues. MLG's business will operate under...

  • Page 92
    ... entertainment across mobile, console and PC platforms, and positions the company for future growth. The combined company has a world-class interactive entertainment portfolio of top-performing franchises. As the closing of the King Acquisition occurred subsequent to December 31, 2015, our financial...

  • Page 93
    ..., repaid and re-borrowed by the Company and are available for working capital and other general corporate purposes. Up to $50 million of the 2015 Revolving Credit Facility may be used for letters of credit. The 2015 Revolving Credit Facility is scheduled to mature on October 11, 2020. Borrowings...

  • Page 94
    ... ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is quoted on the NASDAQ National Market under the symbol "ATVI." The following table sets forth, for the periods indicated, the high and low reported sale prices for our common stock. At February 22, 2016, there...

  • Page 95
    ...future stock price performance. 100.00 100.56 115.30 152.75 177.73 181.32 Cash Dividends On February 2, 2016, our Board of Directors declared a cash dividend of $0.26 per common share, payable on May 11, 2016, to shareholders of record at the close of business on March 30, 2016. On February 3, 2015...

  • Page 96
    ...Stock Trading Plans The Company's directors and employees may, at a time they are not aware of material non-public information, enter into plans ("Rule 10b5-1 Plans") to purchase or sell shares of our common stock that satisfy the requirements of Exchange Act Rule 10b5-1. Rule 10b5-1 permits trading...

  • Page 97
    ... to product releases; (3) statements of future financial or operating performance; (4) statements relating to the acquisition of King Digital Entertainment plc and expected impact of that transaction, including without limitation, the expected impact on Activision Blizzard's future financial results...

  • Page 98
    ... Ended December 31, 2015 and 2014 (Amounts in millions) Year Ended December 31, 2015 Amount GAAP Net Revenues by Segment/Platform Mix Activision and Blizzard: Online2 PC Next-generation (PS4, Xbox One, Wii U) Prior-generation (PS3, Xbox 360, Wii) Total console 3 December 31, 2014 Amount % of Total1...

  • Page 99
    .... Net revenues from digital online channels represent revenues from digitally distributed subscriptions, licensing royalties, value-added services, downloadable content, micro-transactions, and products. Net revenues from Other include revenues from our Media Networks and Studios businesses, along...

  • Page 100
    ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES FINANCIAL INFORMATION For the Year Ended December 31, 2015 and 2014 (Amounts in millions) Year Ended December 31, 2015 Amount GAAP Net Revenues by Geographic Region North America Europe Asia Pacific Total consolidated GAAP net revenues Change in Deferred ...

  • Page 101
    ... segments managed outside the reportable segments, including our Media Networks, Studios, and Distribution, as well as other unallocated corporate income and expenses. Reflects fees and other expenses related to the Purchase Transaction and the King Acquisition, inclusive of related debt financings...

  • Page 102
    ...0.01 $ 1,466 989 1.34 $ 1.32 eflects the net change in deferred revenues and related cost of sales. ncludes expenses related to stoc -based compensation. eflects amorti ation of intangible assets from purchase price accounting. eflects fees and other expenses related to ac uisitions, including...

  • Page 103
    ...42 eflects the net change in deferred revenues and related cost of sales. ncludes expenses related to stoc -based compensation. 3 eflects amorti ation of intangible assets from purchase price accounting. 4 eflects fees and other expenses (including legal fees, costs, expenses and accruals...

  • Page 104
    ...$ 0.94 eflects the net change in deferred revenues and related cost of sales. ncludes expenses related to stoc -based compensation. 3 eflects amorti ation of intangible assets from purchase price accounting. 4 eflects fees and other expenses (including legal fees, costs, expenses and accruals...

  • Page 105
    ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION (Amounts in millions) Three Months Ended Three Months Ended December 31, 2013 March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Year over Year % Increase (Decrease) Cash Flow Data Operating Cash Flow...

  • Page 106
    ...42 30 28 1 4 5 22 5 2 6 8 $ $ 2 9 8 200 229 95 1,416 9 3 2 9 5 1,552 eflects the net change in deferred revenues and related cost of sales. ncludes expenses related to stoc -based compensation. eflects fees and other expenses related to ac uisitions, including the ing Ac uisition, and...

  • Page 107
    ... LLP Los Angeles, California CORPORATEBB HEADQUARTERS Activision Blizzard, Inc. 3100 Ocean Park Boulevard Santa Monica, CA 90405 (310) 255-2000 NON-INCORPORATION Portions of the Company's 2015 Form 10-K, as filed with the SEC, are included within this Annual Report. Other than these...

  • Page 108
    ACTIVISIONBBLIZZARD,BINC. 3100BOCEANBPARKBBOULEVARD SANTABMONICA,BCALIFORNIAB90405 ACTIVISIONBBLIZZARDBBBBBB2015BANNUALBREPORT ACTIVISIONBLIZZARD.COM