Company Generated More Than $1.26 Billion in
Operating Cash Flow in 2013
Board of Directors Authorizes Debt Repayment
of $375 Million
Company Increases Cash Dividend to $0.20 Per
Common Share
Company Announces 2014 Outlook Driven by
Strongest Slate in its History
Activision Blizzard, Inc. (Nasdaq: ATVI) today announced
better-than-expected financial results for the fourth quarter and
calendar year 2013.
Fourth Quarter Calendar Year
Prior (in
millions, except EPS) 2013
Outlook* 2012 2013
2012
GAAP
Net Revenues $ 1,518 $ 1,255
$ 1,768 $ 4,583 $ 4,856
EPS $ 0.22 $
0.05 $ 0.31 $
0.95 $ 1.01
Non-GAAP
Net Revenues $ 2,272 $ 2,215
$ 2,595 $ 4,342 $ 4,987
EPS
$
0.79
$
0.72
$
0.78
$
0.94
$
1.18
*Prior outlook was provided by the company on November 6, 2013
in its earnings release
For calendar year 2013, Activision Blizzard delivered GAAP net
revenues of $4.58 billion, as compared with $4.86 billion for 2012.
On a non-GAAP basis, the company’s net revenues were $4.34 billion,
as compared with $4.99 billion for 2012. For the calendar year
2013, GAAP net revenues from digital channels were $1.56 billion
and represented 34% of the company’s total revenues. On a
non-GAAP-basis, for the calendar year 2013, net revenues from
digital channels were $1.57 billion and represented a record 36% of
the company’s total net revenues.
For calendar year 2013, Activision Blizzard delivered GAAP
earnings per diluted share of $0.95, as compared with $1.01 per
diluted share for 2012. On a non-GAAP basis, the company delivered
earnings per diluted share of $0.94, as compared with $1.18 per
diluted share for 2012.
For the quarter ended December 31, 2013, the company delivered
GAAP net revenues of $1.52 billion, as compared with $1.77 billion
for the fourth quarter of 2012. On a non-GAAP basis, the company’s
net revenues were $2.27 billion, as compared with $2.60 billion for
the fourth quarter of 2012.
For the quarter ended December 31, 2013, Activision Blizzard’s
GAAP earnings per diluted share were $0.22, as compared with
earnings per diluted share of $0.31 for the fourth quarter of 2012.
On a non-GAAP basis, the company’s earnings per diluted share were
a record $0.79, as compared with $0.78 for the fourth quarter of
2012.
The company reports results on both a GAAP and a non-GAAP basis.
Please refer to the tables at the back of this press release for a
reconciliation of the company’s GAAP and non-GAAP results.
Bobby Kotick, Chief Executive Officer, Activision Blizzard,
said, “2013 was a transformational year for Activision Blizzard and
for our industry. Our transaction with Vivendi returned us to
independence and eliminated the challenges and constraints of being
a controlled company. The continued success of our games delivered
better-than-expected financial results, including stronger net
revenues and earnings per share, and over $1.26 billion in
operating cash flow.”
Kotick continued, “As we look to 2014 and beyond, we have the
strongest and most diverse pipeline of games in our history. In
2014, we expect these releases to enable us to grow non-GAAP
revenues year over year and generate record non-GAAP earnings per
share. We expect Bungie’s Destiny™, an innovative
shared-world, first-person action game to be Activision
Publishing’s next billion dollar franchise. Activision Publishing
also has terrific new games planned for the Call of Duty® and
Skylanders™ franchises, and Blizzard Entertainment has an expansion
to the top-selling PC and console game Diablo® III and
another major new release. Also in our pipeline for 2014 and the
next few years are at least three potentially groundbreaking new
free-to-play franchises—Blizzard’s Hearthstone™: Heroes of
Warcraft™ and Heroes of the Storm™, and Activision
Publishing’s Call of Duty Online. We believe these games
have great global potential. Free-to-play as a business model has
now achieved scale, both in the West and in China.
Hearthstone, which released in open beta on PC last month
and which Blizzard Entertainment plans to expand this year to
tablets and smartphones, is already attracting millions of players
with strong engagement and monetization in the West and China,
putting it on track to join World of Warcraft®, Diablo, and
StarCraft® as their fourth mega franchise.”
Kotick added, “Over the last five years, through dividends and
share buybacks, we have returned almost $10 billion dollars to our
shareholders and today we announced an increase to our annual
dividend and repayment of $375 million of debt. As we look to our
newly independent future, we expect to continue to deliver strong
returns to our stakeholders through the development and sale of the
world’s best games, as we have for more than twenty years.”
Selected Business Highlights:
- In North America and Europe combined,
Activision Publishing was the #1 console and handheld publisher for
the calendar year with the #2 and #3 best-selling franchises—Call
of Duty and Skylanders, including toys and accessories.1
- In North America and Europe combined,
for the calendar year, Activision Publishing had four of the top-10
titles overall.1
- For the fourth quarter, in aggregate
across all platforms in the U.S. and Europe combined, Activision
Publishing’s Call of Duty: Ghosts was the #1 best-selling
title in both units and dollars and the #1 best-selling game on
both next-gen platforms in both units and dollars. Additionally,
for the calendar year, Call of Duty: Black Ops II was the #9
best-selling title in both units and dollars.2
- For the calendar year, in North America
and Europe combined, Skylanders Giants™, including toys and
accessories, was the #4 best-selling handheld and console game in
dollars overall and Skylanders SWAP Force™, including toys
and accessories, was the #6 best-selling handheld and console game
in dollars overall.1
- As of December 31, 2013, the Skylanders
franchise has generated, life-to-date, more than $2 billion in
worldwide sales1 and, at the end of the year, Activision had sold
approximately 175 million Skylanders toys worldwide.3
- For the calendar year in North America,
Blizzard Entertainment’s StarCraft® II: Heart of the Swarm®
was the #1 best-selling PC game.⁴
- As of December 31, 2013, Blizzard
Entertainment’s World of Warcraft remains the #1
subscription-based MMORPG, with approximately 7.8 million
subscribers.3
Company Outlook
On January 28, 2014, Activision Publishing released
Onslaught, the first downloadable map pack for Call of
Duty: Ghosts, on both Xbox One, the all-in-one games and
entertainment system from Microsoft, and the Xbox 360 entertainment
system from Microsoft. The company expects to release
Onslaught on other platforms later in the first quarter.
Additionally, on March 25, 2014, Blizzard Entertainment expects
to release Diablo III: Reaper of Souls™, an expansion
to Blizzard’s award-winning action-role-playing game, Diablo
III.
Activision Blizzard’s first quarter and calendar year 2014
outlook is as follows:
GAAP
Non-GAAP (in millions, except
EPS) Outlook Outlook
CY 2014
Net Revenues
$ 4,000 $ 4,600 EPS $ 0.76 $ 1.26 Fully Diluted Shares** 750 750
Q1 2014
Net Revenues $ 885 $ 675 EPS $ 0.15 $ 0.09 Fully Diluted Shares**
745 745
** Fully diluted weighted average shares include
participating securities and dilutive options on a weighted average
basis.
Board Declares Cash Dividend and Debt Repayment
The 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 19, 2014. Additionally, the Board of
Directors approved a repayment of $375 million of the company’s
outstanding Term Loan B.
Conference Call
Today at 4:30 p.m. EST, Activision Blizzard’s management will
host a conference call and Webcast to discuss the company’s results
for the quarter and year ended December 31, 2013 and management’s
outlook for 2014. The company welcomes all members of the financial
and media communities and other interested parties to visit the
“Investor Relations” area of www.activisionblizzard.com to listen
to the conference call via live Webcast or to listen to the call
live by dialing into 877-857-6161 in the U.S. with passcode
2197679.
About Activision Blizzard
Activision Blizzard, Inc. is the world’s largest and most
profitable independent interactive entertainment publishing
company. It develops and publishes some of the most successful and
beloved entertainment franchises in any medium, including Call of
Duty, Skylanders, World of Warcraft, StarCraft and Diablo.
Headquartered in Santa Monica, California, Activision Blizzard
maintains operations throughout the United States, Europe, and
Asia. It develops and publishes games on all leading interactive
platforms and its games are available in most countries around the
world. More information about Activision Blizzard and its products
can be found on the company’s website,
www.activisionblizzard.com.
1 According to The NPD Group, GfK Chart-Track and Activision
Blizzard internal estimates, including toys and accessories2
According to The NPD Group and GfK Chart-Track3 According to
Activision Blizzard internal estimates4 According to The NPD Group,
GfK Chart-Track and Activision Blizzard internal estimates
Subscriber Definition: World of Warcraft subscribers
include individuals who have paid a subscription fee or have an
active prepaid card to play World of Warcraft, as well as those who
have purchased the game and are within their free month of access.
Internet Game Room players who have accessed the game over the last
thirty days are also counted as subscribers. The above definition
excludes all players under free promotional subscriptions, expired
or cancelled subscriptions, and expired prepaid cards. Subscribers
in licensees’ territories are defined along the same rules.
Non-GAAP Financial Measures: As a supplement to our
financial measures presented in accordance with Generally Accepted
Accounting Principles (“GAAP”), Activision Blizzard presents
certain non-GAAP measures of financial performance. These non-GAAP
financial measures are not intended to be considered in isolation
from, as a substitute for, or as more important than, the financial
information prepared and presented in accordance with GAAP. In
addition, these non-GAAP measures have limitations in that they do
not reflect all of the items associated with the company’s results
of operations as determined in accordance with GAAP.
Activision Blizzard provides net revenues, net income (loss),
earnings (loss) per share and operating margin data and guidance
both including (in accordance with GAAP) and excluding (non-GAAP)
certain items. In addition, Activision Blizzard provides EBITDA
(defined as GAAP net income (loss) before interest (income)
expense, income taxes, depreciation and amortization) and adjusted
EBITDA (defined as non-GAAP operating margin (see non-GAAP
financial measure below) before depreciation). The non-GAAP
financial measures exclude the following items, as applicable in
any given reporting period:
- the change in deferred revenues and
related cost of sales with respect to certain of the company’s
online-enabled games;
- expenses related to stock-based
compensation;
- the amortization of intangibles from
purchase price accounting;
- fees and other expenses related to the
acquisition of 429 million shares of our common stock on October
11, 2013 from Vivendi, pursuant to the stock purchase agreement
dated July 25, 2013 and the $4.75 billion debt financings related
thereto; and
- the income tax adjustments associated
with any of the above items.
In the future, Activision Blizzard may also consider whether
other significant non-recurring items should also be excluded in
calculating the non-GAAP financial measures used by the company.
Management believes that the presentation of these non-GAAP
financial measures provides investors with additional useful
information to measure Activision Blizzard’s financial and
operating performance. In particular, the measures facilitate
comparison of operating performance between periods and help
investors to better understand the operating results of Activision
Blizzard by excluding certain items that may not be indicative of
the company’s core business, operating results or future outlook.
Internally, management uses these non-GAAP financial measures in
assessing the company’s operating results, and measuring compliance
with the requirements of the company’s debt financing agreements,
as well as in planning and forecasting.
Activision Blizzard’s non-GAAP financial measures are not based
on a comprehensive set of accounting rules or principles, and the
terms non-GAAP net revenues, non-GAAP net income, non-GAAP earnings
per share, non-GAAP operating margin, and non-GAAP or adjusted
EBITDA do not have a standardized meaning. Therefore, other
companies may use the same or similarly named measures, but exclude
different items, which may not provide investors a comparable view
of Activision Blizzard’s performance in relation to other
companies.
Management compensates for the limitations resulting from the
exclusion of these items by considering the impact of the items
separately and by considering Activision Blizzard’s GAAP, as well
as non-GAAP, results and outlook, and by presenting the most
comparable GAAP measures directly ahead of non-GAAP measures, and
by providing a reconciliation that indicates and describes the
adjustments made.
In addition to the reasons stated above, which are generally
applicable to each of the items Activision Blizzard excludes from
its non-GAAP financial measures, there are additional specific
reasons why the company believes it is appropriate to exclude the
change in deferred revenues and related cost of sales with respect
to certain of the company’s online-enabled games.
Since Activision Blizzard has determined that some of our games’
online functionality represents an essential component of gameplay
and, as a result, a more-than-inconsequential separate deliverable,
we recognize revenues attributed to these game titles over their
estimated service periods, which may range from five months to a
maximum of less than a year. The related cost of sales is deferred
and recognized as the related revenues are recognized. Internally,
management excludes the impact of this change in deferred revenues
and related cost of sales in its non-GAAP financial measures when
evaluating the company’s operating performance, when planning,
forecasting and analyzing future periods, and when assessing the
performance of its management team.
Management believes this is appropriate because doing so enables
an analysis of performance based on the timing of actual
transactions with our customers, which is consistent with the way
the company is measured by investment analysts and industry data
sources. In addition, excluding the change in deferred revenues and
the related cost of sales provides a much more timely indication of
trends in our operating results.
Cautionary Note Regarding Forward-looking Statements:
Information in this press release that involves Activision
Blizzard’s expectations, plans, intentions or strategies regarding
the future, including statements under the heading “Company
Outlook,” are forward-looking statements that are not facts and
involve a number of risks and uncertainties. Activision Blizzard
generally uses words such as “outlook,” “will,” “could,” “should,”
“would,” “might,” “to be,” “plans,” “believes,” “may,” “expects,”
“intends,” “anticipates,” “estimate,” “future,” “plan,”
“positioned,” “potential,” “project,” “remain,” “scheduled,” “set
to,” “subject to,” “upcoming” and similar expressions to identify
forward-looking statements. Factors that could cause Activision
Blizzard’s actual future results to differ materially from those
expressed in the forward-looking statements set forth in this
release include, but are not limited to, sales levels of Activision
Blizzard’s titles, increasing concentration of titles, shifts in
consumer spending trends, the impact of the macroeconomic
environment, Activision Blizzard’s ability to predict consumer
preferences, including interest in specific genres such as
first-person action, “toys to life” and massively multiplayer
online games and preferences among hardware platforms, the seasonal
and cyclical nature of the interactive game market, changing
business models including digital delivery of content, competition,
including from used games and other forms of entertainment,
possible declines in software pricing, product returns and price
protection, product delays, adoption rate and availability of new
hardware (including peripherals) and related software, particularly
during the ongoing console transition, rapid changes in technology
and industry standards, the current regulatory environment,
litigation risks and associated costs, protection of proprietary
rights, maintenance of relationships with key personnel, customers,
financing providers, licensees, licensors, vendors, and third-party
developers, including the ability to attract, retain and develop
key personnel and developers that can create high quality “hit”
titles, counterparty risks relating to customers, licensees,
licensors and manufacturers, domestic and international economic,
financial and political conditions and policies, foreign exchange
rates and tax rates, the identification of suitable future
acquisition opportunities and potential challenges associated with
geographic expansion, capital market risks, the possibility that
expected benefits related to the recently completed transactions
with Vivendi may not materialize as expected, the amount of our
debt and the limitations imposed by the covenants in the agreements
governing our debt, and the other factors identified in the risk
factors section of Activision Blizzard’s most recent annual report
on Form 10-K as amended, and our quarterly report on Form 10-Q for
the quarter ended September 30, 2013. The forward-looking
statements in this release are based upon information available to
Activision Blizzard as of the date of this release, and Activision
Blizzard assumes no obligation to update any such forward-looking
statements.
Although these forward-looking statements are believed to be
true when made, they may ultimately prove to be incorrect. These
statements are not guarantees of the future performance of
Activision Blizzard and are subject to risks, uncertainties and
other factors, some of which are beyond its control and may cause
actual results to differ materially from current expectations.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Amounts in millions, except per share
data)
Three
Months Ended December 31, Year Ended December
31, 2013 2012
2013 2012
Net revenues: Product sales $ 1,152 $ 1,413 $ 3,201 $ 3,620
Subscription, licensing and other revenues 1
366 355
1,382 1,236 Total
net revenues 1,518
1,768 4,583
4,856 Costs and expenses: Cost of sales
- product costs 502 483 1,053 1,116 Cost of sales - online
subscriptions 50 60 204 263 Cost of sales - software royalties and
amortization 72 87 187 194 Cost of sales - intellectual property
licenses 31 52 87 89 Product development 197 222 584 604 Sales and
marketing 239 232 606 578 General and administrative
143 148
490 561
Total costs and expenses 1,234
1,284 3,211
3,405 Operating income 284 484
1,372 1,451 Interest and other investment income (expense), net
(51 ) 3
(53 ) 7
Income before income tax expense 233 487 1,319 1,458 Income tax
expense 59
133 309
309 Net income $ 174
$ 354 $ 1,010
$ 1,149
Basic
earnings per common share 2 $ 0.23 $ 0.31 $ 0.96 $ 1.01 Weighted
average common shares outstanding 745
1,111
1,024 1,112
Diluted earnings per common share 2 $ 0.22 $ 0.31 $
0.95 $ 1.01 Weighted average common shares outstanding assuming
dilution 757
1,115 1,035
1,118
1
Subscription, licensing and other revenues represents revenues from
World of Warcraft subscriptions, Call of Duty Elite memberships,
licensing royalties from our products and franchises, value-added
services, downloadable content, and other miscellaneous revenues. 2
The company calculates earnings per share pursuant to the two-class
method which requires the allocation of net income between common
shareholders and participating security holders. We had, on a
weighted-average basis, participating securities of approximately
23 million and 24 million for the three months and year ended
December 31, 2013, respectively. We had, on a weighted-average
basis, participating securities of approximately 27 million and 24
million for the three months and year ended December 31, 2012,
respectively. Net income attributable to Activision Blizzard Inc.
common shareholders used to calculate earnings per common share
assuming dilution was $168 million and $987 million for the three
months and year ended December 31, 2013 as compared to total net
income of $174 million and $1,010 million for the same periods,
respectively. Net income attributable to Activision Blizzard Inc.
common shareholders used to calculate earnings per common share
assuming dilution was $345 million and $1,125 million for the three
months and year ended December 31, 2012 as compared to total net
income of $354 million and $1,149 million for the same periods,
respectively.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Amounts in millions)
December 31,
December 31,
2013
2012
ASSETS
Current assets:
Cash and cash equivalents $ 4,410 $ 3,959 Short-term investments 33
416 Accounts receivable, net 515 707
Inventories, net
171 209
Software development
367 164 Intellectual property licenses 11 11 Deferred income taxes,
net 321 487 Other current assets 413
321
Total current assets 6,241
6,274
Long-term investments 9 8 Software development 21 129 Intellectual
property licenses --- 30 Property and equipment, net 138 141 Other
assets 35 11 Intangible assets, net 43 68 Trademark and trade names
433 433 Goodwill 7,092
7,106 Total assets
$ 14,012
$ 14,200
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 355 $ 343 Deferred
revenues 1,389 1,657 Accrued expenses and other liabilities 636 652
Current portion of long-term debt 25
---
Total current liabilities 2,405
2,652
Long-term debt, net 4,668 --- Deferred income taxes, net 20 25
Other liabilities 297
206 Total
liabilities 7,390
2,883 Shareholders’
equity: Common stock --- --- Additional paid-in capital 9,682 9,450
Treasury stock (5,814 ) --- Retained earnings 2,686 1,893
Accumulated other comprehensive income (loss)
68
(26 ) Total shareholders’ equity 6,622
11,317
Total liabilities and shareholders’ equity
$ 14,012 $
14,200
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) (Amounts in millions)
Year Ended
December 31, 2013
2012
Cash flows from operating activities: Net
income $ 1,010 $ 1,149 Adjustments to reconcile net income to net
cash provided by operating activities: Deferred income taxes 185
(10 ) Depreciation and amortization 108 120 Loss on disposal of
property and equipment --- 1
Amortization and write-off of capitalized
software development costs and intellectual property licenses
(1)
207 208
Amortization of debt discount and debt
financing costs
1 --- Stock-based compensation expense (2) 108 126 Excess tax
benefits from stock awards (29 ) (5 ) Changes in operating assets
and liabilities: Accounts receivable, net 198 (46 ) Inventories,
net 39 (62 ) Software development and intellectual property
licenses (268 ) (301 ) Other assets (91 ) 88 Deferred revenues (275
) 153 Accounts payable 7 (54 ) Accrued expenses and other
liabilities 64
(22 ) Net cash provided by
operating activities 1,264
1,345
Cash flows from investing activities: Proceeds from
maturities of available-for-sale investments 304 444 Proceeds from
auction rate securities called at par --- 10 Proceeds from sales of
available-for-sale investments 98 --- Purchases of
available-for-sale investments (26 ) (503 ) Capital expenditures
(74 ) (73 ) Decrease (increase) in restricted cash
6
(2 ) Net cash provided by (used in) investing activities
308
(124 ) Cash flows from financing
activities: Proceeds from issuance of common stock to employees 158
33
Tax payment related to net share
settlements on restricted stock rights
(49 ) (16 ) Repurchase of common stock (5,830 ) (315 ) Dividends
paid (216 ) (204 ) Proceeds from issuance of long-term debt 4,750
--- Repayment of long-term debt (6 ) --- Payment of debt discount
and financing costs (59 ) --- Excess tax benefits from stock awards
29
5
Net cash used in financing activities
(1,223 )
(497 ) Effect of foreign exchange rate
changes on cash and cash equivalents
102 70
Net increase in cash and cash
equivalents
451 794 Cash and cash equivalents at beginning of period
3,959
3,165 Cash and cash
equivalents at end of period $ 4,410
$ 3,959
(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.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES SUPPLEMENTAL
FINANCIAL INFORMATION (Amounts in millions)
Three Months Ended Year over Year Three
Months Ended Year over Year December 31, March
31, June 30, September 30, December 31,
% Increase March 31, June 30, September
30, December 31, % Increase 2011
2012 2012 2012 2012 (Decrease)
2013 2013 2013 2013
(Decrease) Cash Flow Data Operating Cash Flow $ 850 $
154 $ 93 $ 122 $ 976 15 % $ 325 $ 109 $ (50 ) $
880
(10 ) % Capital Expenditures 25 8 17 21 27 8 17 19 22 16 (41 )
Non-GAAP Free Cash Flow2 825 146 76 101 949 15 308 90 (72 ) 864 (9
) Operating Cash Flow - TTM1 952 972 1,143 1,219 1,345 41
1,516 1,532 1,360 1,264 (6 ) Capital Expenditures - TTM1 72 76 79
71 73 1 82 84 85 74 1 Non-GAAP Free Cash Flow - TTM1 $ 880 $ 896 $
1,064 $ 1,148 $ 1,272 45 % $ 1,434 $ 1,448 $ 1,275 $ 1,190 (6 ) %
1
TTM represents trailing twelve months.
Operating Cash Flow for the three months ended December 31, 2011,
three months ended September 30, 2011, three months ended June 30,
2011, and three months ended March 31, 2011 was $850 million, $46
million, $(78) million, and $134 million, respectively. Capital
expenditures for the three months ended December 31, 2011, three
months ended September 30, 2011, three months ended June 30, 2011,
and three months ended March 31, 2011 was $25 million, $29 million,
$14 million, and $4 million, respectively.
2
Non-GAAP free cash flow represents operating cash flow minus
capital expenditures (which includes payment for acquisition of
intangible assets).
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP MEASURES
(Amounts in millions, except earnings per share data)
Three Months Ended December 31, 2013
Net Revenues
Cost of Sales -
Product Costs
Cost of Sales -
Online
Subscriptions
Cost of Sales -
Software Royalties
and Amortization
Cost of Sales -
Intellectual
Property Licenses
Product
Development
Sales and
Marketing
General and
Administrative
Total Costs and
Expenses
GAAP Measurement $ 1,518 $ 502 $ 50
$ 72 $ 31 $ 197 $ 239 $ 143
$ 1,234 Less: Net effect from deferral of net
revenues and related cost of sales (a) 754 181 - 64 - - - - 245
Less: Stock-based compensation (b) - - - (7 ) - (10 ) (2 ) (15 )
(34 ) Less: Amortization of intangible assets (c) - - - - (15 ) - -
- (15 ) Less: Fees and other expenses related to the Purchase
Transaction and related debt financings (d) -
- - -
- - -
(18 ) (18 ) Non-GAAP Measurement
$ 2,272 $ 683 $ 50
$ 129 $ 16 $ 187
$ 237 $ 110 $ 1,412
Three Months Ended December 31, 2013
Operating
Income
Net Income
Basic Earnings
per Share
Diluted Earnings
per Share
GAAP Measurement $ 284 $ 174 $ 0.23 $ 0.22 Less: Net effect from
deferral of net revenues and related cost of sales (a) 509 401 0.52
0.51 Less: Stock-based compensation (b) 34 23 0.03 0.03 Less:
Amortization of intangible assets (c) 15 9 0.01 0.01 Less: Fees and
other expenses related to the Purchase Transaction and related debt
financings (d) 18 14
0.02 0.02 Non-GAAP Measurement
$ 860 $ 621 $ 0.81
$ 0.79
Year Ended December 31, 2013
Net Revenues
Cost of Sales -
Product Costs
Cost of Sales -
Online
Subscriptions
Cost of Sales -
Software Royalties
and Amortization
Cost of Sales -
Intellectual
Property Licenses
Product
Development
Sales and
Marketing
General and
Administrative
Total Costs and
Expenses
GAAP Measurement $ 4,583 $ 1,053 $ 204 $ 187 $ 87 $ 584 $ 606 $ 490
$ 3,211 Less: Net effect from deferral of net revenues and related
cost of sales (a) (241 ) (10 ) - 2 (4 ) - - - (12 ) Less:
Stock-based compensation (b) - - - (17 ) - (33 ) (7 ) (53 ) (110 )
Less: Amortization of intangible assets (c) - - - - (23 ) - - - (23
) Less: Fees and other expenses related to the Purchase Transaction
and related debt financings (d) - -
- -
- - -
(79 ) (79 ) Non-GAAP Measurement
$ 4,342 $ 1,043 $ 204
$ 172 $ 60 $ 551 $
599 $ 358 $ 2,987
Year Ended December 31, 2013
Operating
Income
Net Income
Basic Earnings
per Share
Diluted Earnings
per Share
GAAP Measurement $ 1,372 $ 1,010 $ 0.96 $ 0.95 Less: Net effect
from deferral of net revenues and related cost of sales (a) (229 )
(150 ) (0.14 ) (0.14 ) Less: Stock-based compensation (b) 110 71
0.07 0.07 Less: Amortization of intangible assets (c) 23 14 0.01
0.01 Less: Fees and other expenses related to the Purchase
Transaction and related debt financings (d) 79
54 0.05 0.05
Non-GAAP Measurement $ 1,355
$ 999 $ 0.95 $ 0.94
(a) Reflects the net change in deferred revenues and
related cost of sales. (b) Includes expense related to stock-based
compensation. (c) Reflects amortization of intangible assets from
purchase price accounting. (d) Reflects fees and other expenses
related to the repurchase of 429 million shares of our common stock
from Vivendi (the "Purchase Transaction") completed on October 11,
2013 and related debt financings.
The company calculates earnings per share
pursuant to the two-class method which requires the allocation of
net income between common shareholders and participating security
holders. Net income attributable to Activision Blizzard common
shareholders used to calculate non-GAAP earnings per common share
assuming dilution was $602 million and $976 million for the three
months and year ended December 31, 2013 as compared to total
non-GAAP net income of $621 million and $999 million for the same
periods, respectively.
The per share adjustments are presented as calculated, and
the GAAP and non-GAAP earnings per share information is also
presented as calculated. The sum of these measures, as presented,
may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES RECONCILIATION
OF GAAP NET INCOME TO NON-GAAP MEASURES (Amounts in
millions, except earnings per share data)
Three Months Ended December 31, 2012
Net
Revenues
Cost of Sales -
Product Costs
Cost of Sales -
Online
Subscriptions
Cost of Sales -
Software Royalties
and Amortization
Cost of Sales -
Intellectual
Property Licenses
Product
Development
Sales and
Marketing
General and
Administrative
Total Costs and
Expenses
GAAP Measurement $ 1,768 $ 483 $ 60
$ 87 $ 52 $ 222 $ 232 $ 148
$ 1,284 Less: Net effect from deferral of net
revenues and related cost of sales (a) 827 186 - 31 3 - - - 220
Less: Stock-based compensation (b) - - - (3 ) - (6 ) (2 ) (29 ) (40
) Less: Amortization of intangible assets (c) -
- - - (23 )
- - -
(23 ) Non-GAAP Measurement $ 2,595 $
669 $ 60 $ 115 $ 32 $ 216
$ 230 $ 119 $ 1,441
Three Months Ended December 31, 2012
Operating
Income
Net Income
Basic Earnings
per Share
Diluted Earnings
per Share
GAAP Measurement $ 484 $ 354 $ 0.31 $ 0.31 Less: Net effect from
deferral of net revenues and related cost of sales (a) 607 485 0.43
0.42 Less: Stock-based compensation (b) 40 38 0.03 0.03 Less:
Amortization of intangible assets (c) 23 14
0.01 0.01 Non-GAAP Measurement $
1,154 $ 891 $ 0.78 $ 0.78
Year Ended December 31, 2012
Net Revenues
Cost of Sales -
Product Costs
Cost of Sales -
Online
Subscriptions
Cost of Sales -
Software Royalties
and Amortization
Cost of Sales -
Intellectual
Property Licenses
Product
Development
Sales and
Marketing
General and
Administrative
Total Costs and
Expenses
GAAP Measurement $ 4,856 $ 1,116 $ 263 $ 194 $ 89 $ 604 $ 578 $ 561
$ 3,405 Less: Net effect from deferral of net revenues and related
cost of sales (a) 131 - 1 36 3 - - - 40 Less: Stock-based
compensation (b) - - - (9 ) - (20 ) (8 ) (89 ) (126 ) Less:
Amortization of intangible assets (c) - -
- - (30 )
- - -
(30 ) Non-GAAP Measurement $ 4,987 $ 1,116
$ 264 $ 221 $ 62 $ 584
$ 570 $ 472 $ 3,289
Year Ended December 31, 2012
Operating
Income
Net Income
Basic Earnings
per Share
Diluted Earnings
per Share
GAAP Measurement $ 1,451 $ 1,149 $ 1.01 $ 1.01 Less: Net effect
from deferral of net revenues and related cost of sales (a) 91 84
0.07 0.07 Less: Stock-based compensation (b) 126 98 0.09 0.09 Less:
Amortization of intangible assets (c) 30 19
0.02 0.02 Non-GAAP Measurement $
1,698 $ 1,350 $ 1.19 $ 1.18
(a) Reflects the net
change in deferred revenues and related cost of sales. (b) Includes
expense related to stock-based compensation. (c) Reflects
amortization of intangible assets from purchase price accounting.
The company calculates earnings per share
pursuant to the two-class method which requires the allocation of
net income between common shareholders and participating security
holders. Net income attributable to Activision Blizzard Inc. common
shareholders used to calculate non-GAAP earnings per common share
assuming dilution was $870 million and $1,322 million for the three
months and year ended December 31, 2012 as compared to total
non-GAAP net income of $891 million and $1,350 million for the same
periods, respectively.
The per share adjustments are presented as calculated, and
the GAAP and non-GAAP earnings per share information is also
presented as calculated. The sum of these measures, as presented,
may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES FINANCIAL
INFORMATION For the Three Months and Year Ended December 31,
2013 and 2012 (Amounts in millions)
Three Months Ended December 31, 2013
December 31, 2012 $ Increase % Increase
Amount % of Total4
Amount % of Total4
(Decrease) (Decrease) GAAP Net Revenues by
Distribution Channel Retail channels $ 953 63 % $ 1,177 67 % $
(224 ) (19 ) % Digital online channels1 385 25
451 26 (66 ) (15 ) Total Activision and Blizzard
1,338 88 1,628 92 (290 ) (18 ) Distribution 180
12 140 8 40 29 Total
consolidated GAAP net revenues 1,518 100 1,768
100 (250 ) (14 )
Change in Deferred
Revenues2 Retail channels 786 900 Digital online channels1
(32 ) (73 ) Total changes in deferred revenues
754 827
Non-GAAP Net Revenues by
Distribution Channel Retail channels 1,739 77 2,077 80 (338 )
(16 ) Digital online channels1 353 16 378
15 (25 ) (7 ) Total Activision and Blizzard 2,092 92
2,455 95 (363 ) (15 ) Distribution 180 8
140 5 40 29 Total non-GAAP net
revenues3 $ 2,272 100 % $ 2,595 100 % $ (323 ) (12 )
%
Year Ended December 31, 2013
December 31, 2012 $ Increase % Increase
Amount % of Total4
Amount % of Total4
(Decrease) (Decrease) GAAP Net Revenues by
Distribution Channel Retail channels $ 2,701 59 % $ 3,013 62 %
$ (312 ) (10 ) % Digital online channels1 1,559 34
1,537 32 22 1 Total Activision and
Blizzard 4,260 93 4,550 94 (290 ) (6 ) Distribution
323 7 306 6 17 6 Total
consolidated GAAP net revenues 4,583 100 4,856
100 (273 ) (6 )
Change in Deferred
Revenues2 Retail channels (247 ) 69 Digital online channels1
6 62 Total changes in deferred revenues
(241 ) 131
Non-GAAP Net Revenues by
Distribution Channel Retail channels 2,454 57 3,082 62 (628 )
(20 ) Digital online channels1 1,565 36 1,599
32 (34 ) (2 ) Total Activision and Blizzard 4,019 93
4,681 94 (662 ) (14 ) Distribution 323 7
306 6 17 6 Total non-GAAP net revenues3
$ 4,342 100 % $ 4,987 100 % $ (645 ) (13 ) % 1
Net revenues from digital online channels represent revenues from
subscriptions and memberships, licensing royalties, value-added
services, downloadable content, digitally distributed products, and
wireless devices. 2 We provide net revenues including (in
accordance with GAAP) and excluding (non-GAAP) the impact of
changes in deferred revenues. 3 Total non-GAAP net revenues
presented also represents our total operating segment net revenues.
4 The percentages of total are presented as calculated. Therefore
the sum of these percentages, as presented, may differ due to the
impact of rounding.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES FINANCIAL INFORMATION For the Three
Months Ended December 31, 2013 and 2012 (Amounts in millions)
Three Months Ended
December 31, 2013 December 31, 2012
$ Increase % Increase
Amount % of Total8
Amount
% of Total8
(Decrease) (Decrease)
GAAP Net Revenues by Segment/Platform Mix Activision and
Blizzard: Online subscriptions1 $ 198 13 % $ 285 16 % $ (87 ) (31 )
% PC 66 4 205 12 (139 ) (68 ) Sony PlayStation3 236 16 259 15 (23 )
(9 ) Microsoft Xbox4 349 23 314 18 35 11 Nintendo Wii and Wii U
160 11 183 10 (23 ) (13 ) Total
console2 745 49 756 43 (11 ) (1 )
Other7 329 22 382 22 (53 ) (14 ) Total
Activision and Blizzard 1,338 88 1,628 92
(290 ) (18 ) Distribution: Total Distribution
180 12 140 8 40 29 Total consolidated
GAAP net revenues 1,518 100 1,768 100
(250 ) (14 )
Change in Deferred Revenues5 Activision
and Blizzard: Online subscriptions1 3 (8 ) PC 45 (89 ) Sony
PlayStation3 385 441 Microsoft Xbox4 318 467 Nintendo Wii and Wii U
3 16 Total console2 706 924
Other7 --- --- Total changes in
deferred revenues 754 827
Non-GAAP
Net Revenues by Segment/Platform Mix
Activision and Blizzard: Online subscriptions1 201 9 277 11 (76 )
(27 ) PC 111 5 116 4 (5 ) (4 ) Sony PlayStation3 621 27 700 27 (79
) (11 ) Microsoft Xbox4 667 29 781 30 (114 ) (15 ) Nintendo Wii and
Wii U 163 7 199 8 (36 ) (18 ) Total
console2 1,451 64 1,680 65 (229 ) (14 )
Other7 329 14 382 15 (53 ) (14 ) Total
Activision and Blizzard 2,092 92 2,455 95
(363 ) (15 ) Distribution: Total Distribution
180 8 140 5 40 29 Total non-GAAP net
revenues6 $ 2,272 100 % $ 2,595 100 % $ (323 ) (12 ) %
1 Revenues from online subscriptions consists of revenues
from all World of Warcraft products, including subscriptions, boxed
products, expansion packs, licensing royalties, and value-added
services. It also includes revenues from Call of Duty Elite
memberships. 2 Downloadable content and their related revenues are
included in each respective console platforms and total console. 3
Sony PlayStation includes revenues from PlayStation 2, PlayStation
3, and PlayStation 4. 4 Microsoft Xbox includes revenues from Xbox
360 and Xbox One. 5 We provide net revenues including (in
accordance with GAAP) and excluding (non-GAAP) the impact of
changes in deferred net revenues. 6 Total non-GAAP net revenues
presented also represents our total operating segment net revenues.
7 Revenues from other includes revenues from handheld and mobile
devices, as well as non-platform specific game related revenues
such as standalone sales of toys and accessories products from the
Skylanders franchise and other physical merchandise and
accessories. 8 The percentages of total are presented as
calculated. Therefore the sum of these percentages, as presented,
may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES FINANCIAL
INFORMATION For the Year Ended December 31, 2013 and
2012 (Amounts in millions)
Year Ended December 31, 2013
December 31, 2012 $ Increase
% Increase Amount % of
Total8
Amount % of Total8
(Decrease) (Decrease) GAAP Net Revenues by
Segment/Platform Mix Activision and Blizzard: Online
subscriptions1 $ 912 20 % $ 986 20 % $ (74 ) (8 ) % PC 340 7 675 14
(335 ) (50 ) Sony PlayStation3 963 21 876 18 87 10 Microsoft Xbox4
1,198 26 1,019 21 179 18 Nintendo Wii and Wii U 218 5
291 6 (73 ) (25 ) Total console2 2,379
52 2,186 45 193 9 Other7
629 14 703 14 (74 ) (11 ) Total
Activision and Blizzard 4,260 93 4,550
94 (290 ) (6 ) Distribution: Total Distribution
323 7 306 6 17 6 Total
consolidated GAAP net revenues 4,583 100 4,856
100 (273 ) (6 )
Change in Deferred
Revenues5 Activision and Blizzard: Online subscriptions1 (107 )
85 PC (22 ) 37 Sony PlayStation3 (14 ) 30 Microsoft Xbox4 (87 ) (3
) Nintendo Wii and Wii U (10 ) (12 ) Total console2
(111 ) 15 Other7 (1 ) (6 ) Total
changes in deferred revenues (241 ) 131
Non-GAAP Net Revenues by Segment/Platform Mix Activision and
Blizzard: Online subscriptions1 805 19 1,071 21 (266 ) (25 ) PC 318
7 712 14 (394 ) (55 ) Sony PlayStation3 949 22 906 18 43 5
Microsoft Xbox4 1,111 26 1,016 20 95 9 Nintendo Wii and Wii U
208 5 279 6 (71 ) (25 ) Total
console2 2,268 52 2,201 44 67
3 Other7 628 14 697 14
(69 ) (10 ) Total Activision and Blizzard 4,019 93
4,681 94 (662 ) (14 ) Distribution:
Total Distribution 323 7 306 6
17 6 Total non-GAAP net revenues6 $ 4,342 100 % $
4,987 100 % $ (645 ) (13 ) % 1 Revenue from online
subscriptions consists of revenue from all World of Warcraft
products, including subscriptions, boxed products, expansion packs,
licensing royalties, and value-added services. It also includes
revenues from Call of Duty Elite memberships. 2 Downloadable
content and their related revenues are included in each respective
console platforms and total console. 3 Sony PlayStation includes
revenues from PlayStation 2, PlayStation 3, and PlayStation 4. 4
Microsoft Xbox includes revenues from Xbox 360 and Xbox One. 5 We
provide net revenues including (in accordance with GAAP) and
excluding (non-GAAP) the impact of changes in deferred net
revenues. 6 Total non-GAAP net revenues presented also represents
our total operating segment net revenues. 7 Revenue from other
includes revenues from handheld and mobile devices, as well as
non-platform specific game related revenues such as standalone
sales of toys and accessories products from the Skylanders
franchise and other physical merchandise and accessories. 8 The
percentages of total are presented as calculated. Therefore the sum
of these percentages, as presented, may differ due to the impact of
rounding.
ACTIVISION BLIZZARD, INC. AND
SUBSIDIARIES FINANCIAL INFORMATION For the Three
Months and Year Ended December 31, 2013 and 2012 (Amounts in
millions)
Three Months Ended
December 31, 2013 December 31, 2012 $ Increase
% Increase Amount % of Total3
Amount
% of Total3
(Decrease) (Decrease) GAAP Net
Revenues by Geographic Region North America $ 770 51 % $ 869 49
% $ (99 ) (11 ) % Europe 647 43 748 42 (101 ) (14 ) Asia Pacific
101 7 151 9 (50 ) (33 ) Total
consolidated GAAP net revenues 1,518 100 1,768
100 (250 ) (14 )
Change in Deferred Revenues1
North America 457 538 Europe 247 271 Asia Pacific 50
18 Total changes in net revenues 754
827
Non-GAAP Net Revenues by Geographic Region North
America 1,227 54 1,407 54 (180 ) (13 ) Europe 894 39 1,019 39 (125
) (12 ) Asia Pacific 151 7 169 7 (18 )
(11 ) Total non-GAAP net revenues2 $ 2,272 100 % $ 2,595 100
% $ (323 ) (12 ) %
Year Ended
December 31, 2013 December 31, 2012 $ Increase
% Increase Amount % of Total3
Amount % of Total3
(Decrease)
(Decrease) GAAP Net Revenues by Geographic Region
North America $ 2,414 53 % $ 2,436 50 % $ (22 ) (1 ) % Europe 1,826
40 1,968 41 (142 ) (7 ) Asia Pacific 343 7
452 9 (109 ) (24 ) Total consolidated GAAP net
revenues 4,583 100 4,856 100
(273 ) (6 )
Change in Deferred Revenues1 North
America (108 ) 78 Europe (107 ) 28 Asia Pacific (26 )
25 Total changes in net revenues (241 ) 131
Non-GAAP Net Revenues by Geographic Region North America
2,306 53 2,514 50 (208 ) (8 ) Europe 1,719 40 1,996 40 (277 ) (14 )
Asia Pacific 317 7 477 10 (160 ) (34 )
Total non-GAAP net revenues2 $ 4,342 100 % $ 4,987 100 % $
(645 ) (13 ) % 1 We provide net revenues including (in
accordance with GAAP) and excluding (non-GAAP) the impact of
changes in deferred revenues. 2 Total non-GAAP net revenues
presented also represents our total operating segment net revenues.
3 The percentages of total are presented as calculated. Therefore
the sum of these percentages, as presented, may differ due to the
impact of rounding.
ACTIVISION BLIZZARD,
INC. AND SUBSIDIARIES SEGMENT INFORMATION For the
Three Months and Year Ended December 31, 2013 and 2012 (Amounts
in millions)
Three Months Ended December 31, 2013 December 31,
2012 $ Increase % Increase Amount % of
Total5 Amount % of Total5
(Decrease) (Decrease) Segment net revenues:
Activision1 $ 1,805
79
% $ 2,145
83
% $ (340 ) (16 ) % Blizzard2 287
13
310
12
(23 ) (7 ) Distribution3 180
8
140
5
40 29 Operating segment total 2,272
100
%
2,595
100
%
(323 ) (12 )
Reconciliation to consolidated net
revenues: Net effect from deferral of net revenues (754
)
(827 )
Consolidated net revenues $ 1,518
$ 1,768
$ (250 ) (14 ) %
Segment income from operations:
Activision1 $ 758 $ 1,055 $ (297 ) (28 ) % Blizzard2 93 88 5 6
Distribution3 9 11 (2 ) (18 )
Operating segment total 860 1,154 (294 ) (25 )
Reconciliation to consolidated
operating income and consolidated income before income tax
expense:
Net effect from deferral of net revenues and related cost of sales
(509 ) (607 ) Stock-based compensation expense (34 ) (40 )
Amortization of intangible assets (15 ) (23 ) Fees and other
expenses related to the Purchase Transaction and related debt
financings4 (18 ) --- Consolidated operating
income 284 484 (200 ) (41 ) Interest and other investment income
(expense), net (51 ) 3 Consolidated income
before income tax expense $ 233 $ 487 $ (254 ) (52 )
% Operating margin from total operating segments 37.9 % 44.5
%
Year Ended December 31, 2013
December 31, 2012 $ Increase % Increase
Amount % of Total5 Amount % of
Total5 (Decrease) (Decrease) Segment
net revenues: Activision1 $ 2,895
67
%
$ 3,072
62
% $ (177 ) (6 ) % Blizzard2 1,124
26
1,609
32
(485 ) (30 ) Distribution3 323 7 306
6 17 6 Operating segment total 4,342
100
%
4,987
100
%
(645 ) (13 )
Reconciliation to consolidated net
revenues: Net effect from deferral of net revenues 241
(131 )
Consolidated net revenues $ 4,583
$ 4,856
$ (273 ) (6 ) %
Segment income from operations:
Activision1 $ 971 $ 970 $ 1 - % Blizzard2 376 717 (341 ) (48 )
Distribution3 8 11 (3 ) (27 )
Operating segment total 1,355 1,698 (343 ) (20 )
Reconciliation to consolidated
operating income and consolidated income before income tax
expense:
Net effect from deferral of net revenues and related cost of sales
229 (91 ) Stock-based compensation expense (110 ) (126 )
Amortization of intangible assets (23 ) (30 ) Fees and other
expenses related to the Purchase Transaction and related debt
financings4 (79 ) --- Consolidated operating
income 1,372 1,451 (79 ) (5 ) Interest and other investment income
(expense), net (53 ) 7 Consolidated income
before income tax expense $ 1,319 $ 1,458 $ (139 )
(10 ) % Operating margin from total operating segments 31.2
% 34.0 % 1 Activision Publishing (“Activision”) — publishes
interactive entertainment products and contents. 2 Blizzard —
Blizzard Entertainment, Inc. and its subsidiaries (“Blizzard”)
publishes PC games and online subscription-based games in the
MMORPG category. 3 Activision Blizzard Distribution
(“Distribution”) — distributes interactive entertainment software
and hardware products. 4 Reflects fees and other expenses related
to the repurchase of 429 million shares of our common stock from
Vivendi (the "Purchase Transaction") completed on October 11, 2013
and related debt financings. 5 The percentages of total are
presented as calculated. Therefore the sum of these percentages, as
presented, may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES For the
Trailing Twelve Months Ending December 31, 2013 EBITDA and
Adjusted EBITDA (Amounts in millions)
Trailing Twelve
Months Ending March 31, 2013 June 30, 2013
September 30, 2013 December 31, 2013 December 31,
2013 GAAP Net Income (Loss) $ 456
$
324
$ 56
$ 174
$ 1,010 Interest (Income) /
Expense, net (2 ) --- 4 52 52 Provision (Benefit) for income taxes
133 106 10 59 309 Depreciation and amortization 24
23 21 40 108
EBITDA 611 453 91 325
1,479 Deferral of net revenues and related cost of
sales (a) (369 ) (338 ) (32 ) 509 (229 ) Stock-based compensation
expense (b) 26 24 25 34 110 Fees and other expenses related to the
Purchase Transaction and related debt financings (c) ---
--- 62 18 79
Adjusted EBITDA $ 268 $
139 $ 146 $ 886
$ 1,439 (a) Reflects the net change in
deferred net revenues and related cost of sales. (b) Includes
expense related to stock-based compensation. (c)
Reflects fees and other expenses related
to the repurchase of 429 million shares of our common stock from
Vivendi (the "Purchase Transaction") completed on October 11, 2013
and related debt financings.
Trailing twelve months amounts are
presented as calculated. Therefore, the sum of the four quarters,
as presented, may differ due to the impact of rounding.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
Outlook for the Quarter Ending March 31, 2014 and Year
Ending December 31, 2014 GAAP to Non-GAAP Reconciliation
(Amounts in millions, except per share data)
Outlook for
Outlook for Three Months Ending Year
Ending March 31, 2014 December 31,
2014 Net Revenues (GAAP) $
885 $
4,000
Excluding the
impact of:
Change in deferred net revenues (a) (210 )
600
Net Revenues (Non-GAAP) $ 675 $
4,600 Earnings Per Diluted Share (GAAP)
$
0.15
$
0.76
Excluding the
impact of:
Net effect from deferral in net revenues and related cost of sales
(b)
(0.10
) 0.37 Stock-based compensation (c) 0.03
0.11
Amortization of intangible assets (d) -
0.01
Earnings Per Diluted Share
(Non-GAAP) $ 0.09 $ 1.26
(a) Reflects the net change in deferred net revenues.
(b) Reflects the net change in deferred net revenues and related
cost of sales. (c) Reflects expense related to stock-based
compensation. (d) Reflects amortization of intangible assets from
purchase price accounting.
The per share adjustments are presented as
calculated, and the GAAP and non-GAAP earnings (loss) per share
information is also presented as calculated. The sum of these
measures, as presented, may differ due to the impact of
rounding.
Activision Blizzard, Inc.Kristin Southey,
310-255-2635SVP, Investor Relations and
Treasuryksouthey@activision.comorMaryanne
Lataif, 310-255-2704SVP, Corporate
Communicationsmlataif@activision.com
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