Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 30, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Activision Blizzard, Inc. | ' |
Entity Central Index Key | '0000718877 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 695,432,548 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $4,444,000,000 | $3,959,000,000 |
Cash in escrow | 2,282,000,000 | 0 |
Short-term investments | 95,000,000 | 416,000,000 |
Accounts receivable, net of allowances of $193 and $332 at September 30, 2013 and December 31, 2012, respectively | 205,000,000 | 707,000,000 |
Inventories, net | 313,000,000 | 209,000,000 |
Software development | 347,000,000 | 164,000,000 |
Intellectual property licenses | 12,000,000 | 11,000,000 |
Deferred income taxes, net | 341,000,000 | 487,000,000 |
Other current assets | 212,000,000 | 321,000,000 |
Total current assets | 8,251,000,000 | 6,274,000,000 |
Long-term investments | 9,000,000 | 8,000,000 |
Software development | 54,000,000 | 129,000,000 |
Intellectual property licenses | 0 | 30,000,000 |
Property and equipment, net | 139,000,000 | 141,000,000 |
Other assets | 18,000,000 | 11,000,000 |
Intangible assets, net | 58,000,000 | 68,000,000 |
Trademark and trade names | 433,000,000 | 433,000,000 |
Goodwill | 7,098,000,000 | 7,106,000,000 |
Total assets | 16,060,000,000 | 14,200,000,000 |
Current liabilities: | ' | ' |
Accounts payable | 286,000,000 | 343,000,000 |
Deferred revenues | 641,000,000 | 1,657,000,000 |
Accrued expenses and other liabilities | 506,000,000 | 652,000,000 |
Total current liabilities | 1,433,000,000 | 2,652,000,000 |
Long-term debt, net | 2,211,000,000 | 0 |
Deferred income taxes, net | 71,000,000 | 25,000,000 |
Other liabilities | 206,000,000 | 206,000,000 |
Total liabilities | 3,921,000,000 | 2,883,000,000 |
Commitments and contingencies (Note 13) | ' | ' |
Shareholders' equity: | ' | ' |
Common stock, $.000001 par value per share, 2,400,000,000 shares authorized, 1,123,569,395 and 1,111,606,087 shares issued at September 30, 2013 and December 31, 2012, respectively | 0 | 0 |
Additional paid-in capital | 9,608,000,000 | 9,450,000,000 |
Retained earnings | 2,513,000,000 | 1,893,000,000 |
Accumulated other comprehensive income (loss) | 18,000,000 | -26,000,000 |
Total shareholders' equity | 12,139,000,000 | 11,317,000,000 |
Total liabilities and shareholders' equity | $16,060,000,000 | $14,200,000,000 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowances | $193 | $332 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 2,400,000,000 | 2,400,000,000 |
Common stock, shares issued | 1,123,569,395 | 1,111,606,087 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net revenues | ' | ' | ' | ' |
Product sales | $332 | $536 | $2,049 | $2,208 |
Subscription, licensing, and other revenues | 359 | 305 | 1,016 | 880 |
Total net revenues | 691 | 841 | 3,065 | 3,088 |
Costs and expenses | ' | ' | ' | ' |
Cost of sales-product costs | 111 | 146 | 551 | 633 |
Cost of sales-online subscriptions | 43 | 62 | 154 | 201 |
Cost of sales-software royalties and amortization | 16 | 19 | 116 | 107 |
Cost of sales-intellectual property licenses | 5 | 10 | 56 | 37 |
Product development | 140 | 125 | 387 | 384 |
Sales and marketing | 144 | 131 | 367 | 346 |
General and administrative | 162 | 121 | 347 | 413 |
Total costs and expenses | 621 | 614 | 1,978 | 2,121 |
Operating income | 70 | 227 | 1,087 | 967 |
Interest and other investment income (expense), net | -4 | 1 | -1 | 4 |
Income before income tax expense | 66 | 228 | 1,086 | 971 |
Income tax expense | 10 | 2 | 249 | 176 |
Net income | $56 | $226 | $837 | $795 |
Earnings per common share | ' | ' | ' | ' |
Basic (in dollars per share) | $0.05 | $0.20 | $0.73 | $0.70 |
Diluted (in dollars per share) | $0.05 | $0.20 | $0.73 | $0.70 |
Weighted-average number of shares outstanding | ' | ' | ' | ' |
Basic (in shares) | 1,122 | 1,109 | 1,118 | 1,113 |
Diluted (in shares) | 1,134 | 1,114 | 1,127 | 1,118 |
Dividends per common share (in dollars per share) | $0 | $0 | $0.19 | $0.18 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net income | $56 | $226 | $837 | $795 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustment | 80 | 49 | 43 | -3 |
Unrealized gains on investments, net of deferred income taxes of $0 million for the periods ended September 30, 2013 and $1 million for the periods ended September 30, 2012 | 0 | 1 | 1 | 1 |
Other comprehensive income (loss) | 80 | 50 | 44 | -2 |
Comprehensive Income | 136 | 276 | 881 | 793 |
Deferred income taxes on gross unrealized appreciation (depreciation) on investments | $0 | $1 | $0 | $1 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income | $837,000,000 | $795,000,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Deferred income taxes | 203,000,000 | 20,000,000 |
Depreciation and amortization | 68,000,000 | 69,000,000 |
Amortization and write-off of capitalized software development costs and intellectual property licenses | 140,000,000 | 123,000,000 |
Stock-based compensation expense | 76,000,000 | 83,000,000 |
Excess tax benefits from stock awards | -14,000,000 | -4,000,000 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable, net | 498,000,000 | 450,000,000 |
Inventories, net | -103,000,000 | -145,000,000 |
Software development and intellectual property licenses | -212,000,000 | -218,000,000 |
Other assets | 99,000,000 | 228,000,000 |
Deferred revenues | -1,008,000,000 | -639,000,000 |
Accounts payable | -56,000,000 | -141,000,000 |
Accrued expenses and other liabilities | -144,000,000 | -252,000,000 |
Net cash provided by operating activities | 384,000,000 | 369,000,000 |
Cash flows from investing activities: | ' | ' |
Proceeds from maturities of available-for-sale-investments | 295,000,000 | 305,000,000 |
Proceeds from sale of available-for-sale investments | 60,000,000 | 0 |
Purchases of available-for-sale investments | -26,000,000 | -382,000,000 |
Capital expenditures | -58,000,000 | -46,000,000 |
Decrease (increase) in restricted cash | -9,000,000 | -22,000,000 |
Deposit in escrow | -71,000,000 | 0 |
Net cash provided by (used in) investing activities | 191,000,000 | -145,000,000 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of common stock to employees | 92,000,000 | 30,000,000 |
Tax payment related to net share settlements of restricted stock rights | -19,000,000 | -5,000,000 |
Repurchase of common stock | 0 | -315,000,000 |
Excess tax benefits from stock awards | 14,000,000 | 4,000,000 |
Dividends paid | -216,000,000 | -204,000,000 |
Net cash provided by (used in) financing activities | -129,000,000 | -490,000,000 |
Effect of foreign exchange rate changes on cash and cash equivalents | 39,000,000 | 10,000,000 |
Net increase (decrease) in cash and cash equivalents | 485,000,000 | -256,000,000 |
Cash and cash equivalents at beginning of period | 3,959,000,000 | 3,165,000,000 |
Cash and cash equivalents at end of period | $4,444,000,000 | $2,909,000,000 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) |
In Millions, unless otherwise specified | |||||
Balance at Dec. 31, 2012 | $11,317 | $0 | $9,450 | $1,893 | ($26) |
Balance (in shares) at Dec. 31, 2012 | ' | 1,112 | ' | ' | ' |
Components of comprehensive income (loss): | ' | ' | ' | ' | ' |
Net income | 837 | ' | ' | 837 | ' |
Other comprehensive income (loss) | 44 | ' | ' | ' | 44 |
Issuance of common stock pursuant to employee stock options | 92 | 0 | 92 | ' | ' |
Issuance of common stock pursuant to employee stock options (in shares) | ' | 9 | ' | ' | ' |
Issuance of common stock pursuant to restricted stock rights (in shares) | ' | 4 | ' | ' | ' |
Issuance of common stock pursuant to restricted stocks rights | 0 | 0 | 0 | ' | ' |
Restricted stock surrendered for employees' tax liability | -19 | 0 | -19 | ' | ' |
Restricted stock surrendered for employees' tax liability (in shares) | ' | -1 | ' | ' | ' |
Stock-based compensation expense related to employee stock options and restricted stock rights | 82 | ' | 82 | ' | ' |
Tax benefit associated with employee stock awards | 3 | ' | 3 | ' | ' |
Dividends ($0.19 per common share) (See Note 12) | -217 | ' | ' | -217 | ' |
Balance at Sep. 30, 2013 | $12,139 | $0 | $9,608 | $2,513 | $18 |
Balance (in shares) at Sep. 30, 2013 | ' | 1,124 | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME4
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | ' | ' | ' | ' |
Dividends per common share (in dollars per share) | $0 | $0 | $0.19 | $0.18 |
Description_of_Business_and_Ba
Description of Business and Basis of Consolidation and Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Description of Business and Basis of Consolidation and Presentation | ' |
Description of business and basis of consolidation and presentation | ' |
1. Description of business and basis of consolidation and presentation | |
Description of Business | |
Activision Blizzard, Inc. is a leading global developer and publisher of interactive entertainment. The terms “Activision Blizzard,” the “Company,” “we,” “us,” and “our” are used to refer collectively to Activision Blizzard, Inc. and its subsidiaries. We publish online, personal computer (“PC”), video game console, handheld, mobile and tablet games. We maintain significant operations in the United States, Canada, the United Kingdom, France, Germany, Ireland, Italy, Sweden, Spain, the Netherlands, Australia, South Korea and China. | |
Activision Blizzard is the result of the 2008 business combination (“Business Combination”) by and among Activision, Inc., Sego Merger Corporation, a wholly-owned subsidiary of Activision, Inc., Vivendi S.A. (“Vivendi”), VGAC LLC, a wholly-owned subsidiary of Vivendi, and Vivendi Games, Inc. (“Vivendi Games”), a wholly-owned subsidiary of VGAC LLC. In connection with the consummation of the Business Combination, Activision, Inc. was renamed Activision Blizzard, Inc. The common stock of Activision Blizzard is traded on The NASDAQ Stock Market under the ticker symbol “ATVI.” | |
On October 11, 2013, we repurchased 429 million shares of our common stock, pursuant to the stock purchase agreement (the “Stock Purchase Agreement”) we entered into on July 25, 2013 with Vivendi and ASAC II LP (“ASAC”), an exempted limited partnership established under the laws of the Cayman Islands, acting by its general partner, ASAC II LLC. Pursuant to the terms of the Stock Purchase Agreement, we acquired all of the capital stock of Amber Holding Subsidiary Co., a Delaware corporation and wholly-owned subsidiary of Vivendi (“New VH”), which was the direct owner of 429 million shares of our common stock, for a cash payment of $5.83 billion, or $13.60 per share, before taking into account the benefit to the Company of certain tax attributes of New VH assumed in the transaction (collectively, the “Purchase Transaction”). Immediately following the completion of the Purchase Transaction, ASAC purchased from Vivendi 172 million shares of the Company'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”). Refer to Note 16 of the Notes to Condensed Consolidated Financial Statements for further information regarding the Purchase Transaction and Private Sale. | |
At September 30, 2013, Vivendi owned approximately 61% of our outstanding common stock. As a result of the Purchase Transaction and the Private Sale, Vivendi's ownership was reduced to approximately 12% of our outstanding common stock as of October 11, 2013. | |
Based upon our organizational structure, we conduct our business through three operating segments as follows: | |
Activision Publishing, Inc. | |
Activision Publishing, Inc. (“Activision”) is a leading international developer and publisher of interactive software products and content, including games from the Call of Duty® and Skylanders® franchises. Activision develops games primarily based on internally-developed properties, as well as some licensed intellectual properties. We sell games through both retail channels and digital downloads. Activision currently offers games that operate on the Sony Computer Entertainment, Inc. (“Sony”) PlayStation 3 (“PS3”), Nintendo Co. Ltd. (“Nintendo”) Wii (“Wii”) and Nintendo Wii U (“Wii U”), and Microsoft Corporation (“Microsoft”) Xbox 360 (“Xbox 360”) console systems; the Nintendo Dual Screen (“DS”) and Nintendo 3DS (“3DS”) handheld game systems; the PC; and other handheld and mobile devices. We are investing in, developing, and planning to release games for Sony's and Microsoft's next-generation console systems, the PlayStation 4 (“PS4”) and Xbox One (“Xbox One”), respectively. | |
Blizzard Entertainment, Inc. | |
Blizzard Entertainment, Inc. (“Blizzard”) is a leader in the subscription-based massively multi-player online role-playing game (“MMORPG”) category in terms of both subscriber base and revenues generated through the World of Warcraft® franchise, which it develops, hosts and supports. Blizzard also develops, markets and sells role-playing action and strategy games for the PC and iPad, including games in the multiple-award winning Diablo® and StarCraft® franchises. Blizzard has adapted Diablo III for certain current- and next-generation console platforms and released Diablo III for the PS3 and Xbox 360 in September 2013. In addition, Blizzard maintains a proprietary online-game related service, Battle.net®. Blizzard distributes its products and generates revenues worldwide through various means, including: subscriptions; sales of prepaid subscription cards; value-added services such as realm transfers, faction changes, and other character customizations within the World of Warcraft gameplay; retail sales of physical “boxed” products; online download sales of PC products; and licensing of software to third-party or related-party companies that distribute World of Warcraft, Diablo III, and StarCraft II products. | |
Activision Blizzard Distribution | |
Activision Blizzard's distribution segment (“Distribution”) consists of operations in Europe that provide warehousing, logistical and sales distribution services to third-party publishers of interactive entertainment software, our own publishing operations, and manufacturers of interactive entertainment hardware. | |
Basis of Consolidation and Presentation | |
Activision Blizzard prepared the accompanying unaudited condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission for interim reporting. As permitted under those rules and regulations, certain notes or other information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted if they substantially duplicate the disclosures contained in the annual audited consolidated financial statements. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012, as amended. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair statement of our financial position and results of operations in accordance with U.S. GAAP have been included in the accompanying unaudited condensed consolidated financial statements. | |
The accompanying condensed consolidated financial statements include the accounts and operations of the Company. All intercompany accounts and transactions have been eliminated. The condensed consolidated financial statements have been prepared in conformity with U.S. GAAP. The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and assumptions. | |
Certain reclassifications have been made to prior period amounts to conform to the current period presentation. | |
The Company considers events or transactions that occur after the balance sheet date, but before the financial statements are issued, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures. | |
Results of Adjustments | |
During the six months ended June 30, 2013, we identified through our internal processes that, in previous years, we erroneously under-accrued for certain indirect taxes for two countries in our Europe region. We performed an evaluation under SEC Staff Accounting Bulletin No. 108 and concluded the effect of this error was immaterial to prior years' financial statements as well as the projected full-year 2013 financial statements. As such, during the six months ended June 30, 2013, we recorded an adjustment in our condensed consolidated statements of operations which reduced “Total net revenues” by $8 million, “Interest and other investment income (expense), net” by $1 million, “Income before income tax expense” by $9 million, and “Net income” by $7 million. This adjustment reduced net revenues and income from operations before income tax expense by $8 million and $9 million, respectively, in each of our Blizzard segment, Europe region, and online subscriptions platform, as presented in Note 9 of the Notes to Condensed Consolidated Financial Statements. The adjustment increased “Accrued expenses and other liabilities” on our condensed consolidated balance sheet by $9 million and represents a correction of an error. Operating cash flows will be impacted by $9 million in the period we settle the liability. The adjustment related to prior periods' net income as follows: (i) approximately $1 million for the quarter ended March 31, 2013; (ii) approximately $1 million for each quarter of 2012 (totaling approximately $4 million for the year ended December 31, 2012); (iii) approximately $2 million for the year ended December 31, 2011; and (iv) less than $1 million for the year ended December 31, 2010. Earnings per basic and diluted share were affected by less than $0.01 as a result of recording this adjustment. | |
During the six months ended June 30, 2012, we identified through our internal processes that, in previous years, we erroneously over-recognized revenues for a country in our Europe region. We performed an evaluation under SEC Staff Accounting Bulletin No. 108 and concluded the effect of this error was immaterial to prior years' financial statements as well as the projected full-year 2012 financial statements. As such, during the six months ended June 30, 2012, we recorded an adjustment in our condensed consolidated statements of operations which reduced “Total net revenues” by $11 million and “Net income” by $8 million. This adjustment reduced net revenues and income from operations before income tax expense by $11 million in each of our Blizzard segment, Europe region, and online subscriptions platform, as presented in Note 9 of the Notes to Condensed Consolidated Financial Statements. The adjustment increased “Deferred revenues” on our condensed consolidated balance sheet by $11 million and represents a correction of an error. There was no impact to operating cash flows. The adjustment related to prior periods' net income as follows: (i) approximately $1 million for the quarter ended March 31, 2012; (ii) less than $1 million for each quarter of 2011 (totaling approximately $3 million for the year ended December 31, 2011); (iii) approximately $2 million for the year ended December 31, 2010; and (iv) approximately $3 million for periods prior to the year ended December 31, 2010. Earnings per basic and diluted share were affected by less than $0.01 as a result of recording this adjustment. |
Inventories_Net
Inventories, Net | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventories, Net | ' | ||||||||
Inventories, net | ' | ||||||||
2. Inventories, net | |||||||||
Our inventories, net consist of the following (amounts in millions): | |||||||||
At September 30, 2013 | At December 31, 2012 | ||||||||
Finished goods | $ | 201 | $ | 151 | |||||
Purchased parts and components | 112 | 58 | |||||||
Inventories, net | $ | 313 | $ | 209 |
Software_Development_and_Intel
Software Development and Intellectual Property Licenses | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Software Development Costs and Intellectual Property Licenses | ' | ||||||||||||||
Software Development Costs and Intellectual Property Licenses | ' | ||||||||||||||
3. Software development and intellectual property licenses | |||||||||||||||
The following table summarizes the components of our capitalized software development costs and intellectual property licenses (amounts in millions): | |||||||||||||||
At | At | ||||||||||||||
September 30, | December 31, | ||||||||||||||
2013 | 2012 | ||||||||||||||
Internally developed software costs | $ | 200 | $ | 159 | |||||||||||
Payments made to third-party software developers | 201 | 134 | |||||||||||||
Total software development costs | $ | 401 | $ | 293 | |||||||||||
Intellectual property licenses | $ | 12 | $ | 41 | |||||||||||
Amortization, write-offs and impairments of capitalized software development costs and intellectual property licenses are comprised of the following (amounts in millions): | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Amortization of capitalized software development | |||||||||||||||
costs and intellectual property licenses | $ | 15 | $ | 22 | $ | 123 | $ | 121 | |||||||
Write-offs and impairments | --- | --- | 26 | 8 |
Intangible_Assets_Net
Intangible Assets, Net | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Intangible Assets, Net | ' | |||||||||||||
Intangible Assets, Net | ' | |||||||||||||
4. Intangible assets, net | ||||||||||||||
Intangible assets, net consist of the following (amounts in millions): | ||||||||||||||
At September 30, 2013 | ||||||||||||||
Estimated | Gross | |||||||||||||
useful | carrying | Accumulated | Net carrying | |||||||||||
lives | amount | amortization | amount | |||||||||||
Acquired definite-lived intangible assets: | ||||||||||||||
License agreements and other | 3 - 10 years | $ | 98 | $ | -89 | $ | 9 | |||||||
Internally-developed franchises | 11 - 12 years | 309 | -260 | 49 | ||||||||||
Total definite-lived intangible assets | $ | 407 | $ | -349 | $ | 58 | ||||||||
Acquired indefinite-lived intangible assets: | ||||||||||||||
Activision trademark | Indefinite | 386 | ||||||||||||
Acquired trade names | Indefinite | 47 | ||||||||||||
Total indefinite-lived intangible assets | $ | 433 | ||||||||||||
At December 31, 2012 | ||||||||||||||
Estimated | Gross | |||||||||||||
useful | carrying | Accumulated | Net carrying | |||||||||||
lives | amount | amortization | amount | |||||||||||
Acquired definite-lived intangible assets: | ||||||||||||||
License agreements and other | 3 - 10 years | $ | 98 | $ | -88 | $ | 10 | |||||||
Internally-developed franchises | 11 - 12 years | 309 | -251 | 58 | ||||||||||
Total definite-lived intangible assets | $ | 407 | $ | -339 | $ | 68 | ||||||||
Acquired indefinite-lived intangible assets: | ||||||||||||||
Activision trademark | Indefinite | 386 | ||||||||||||
Acquired trade names | Indefinite | 47 | ||||||||||||
Total indefinite-lived intangible assets | $ | 433 | ||||||||||||
Amortization expense of intangible assets was $3 million and $9 million for the three and nine months ended September 30, 2013, respectively. Amortization expense of intangible assets was $3 million and $7 million for the three and nine months ended September 30, 2012, respectively. | ||||||||||||||
At September 30, 2013, future amortization of definite-lived intangible assets is estimated as follows (amounts in millions): | ||||||||||||||
2013 (remaining three months) | $ | 18 | ||||||||||||
2014 | 18 | |||||||||||||
2015 | 10 | |||||||||||||
2016 | 5 | |||||||||||||
2017 | 3 | |||||||||||||
Thereafter | 4 | |||||||||||||
Total | $ | 58 |
Goodwill
Goodwill | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Goodwill: | ' | |||||||||||||
Goodwill | ' | |||||||||||||
5. Goodwill | ||||||||||||||
The changes in the carrying amount of goodwill by operating segment for the nine months ended September 30, 2013 are as follows (amounts in millions): | ||||||||||||||
Activision | Blizzard | Total | ||||||||||||
Balance at December 31, 2012 | $ | 6,928 | $ | 178 | $ | 7,106 | ||||||||
Tax benefit credited to goodwill | -8 | --- | -8 | |||||||||||
Balance at September 30, 2013 | $ | 6,920 | $ | 178 | $ | 7,098 | ||||||||
The tax benefit credited to goodwill represents the tax deduction resulting from the exercise of stock options that were outstanding and vested at the consummation of the Business Combination and included in the purchase price of the Company, to the extent that the tax deduction did not exceed the fair value of those options. Conversely, to the extent that the tax deduction did exceed the fair value of those options, the tax benefit is credited to additional paid-in capital. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
6. Fair value measurements | ||||||||||||||||
Fair Value Measurements on a Recurring Basis | ||||||||||||||||
Financial Accounting Standards Board (“FASB”) literature regarding fair value measurements for financial and non-financial assets and liabilities establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.” The three levels of inputs used to measure fair value are as follows: | ||||||||||||||||
Level 1—Quoted prices in active markets for identical assets or liabilities; | ||||||||||||||||
Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data; and | ||||||||||||||||
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. | ||||||||||||||||
The table below segregates all financial assets that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date (amounts in millions): | ||||||||||||||||
Fair Value Measurements at | ||||||||||||||||
September 30, 2013 Using | ||||||||||||||||
Quoted | ||||||||||||||||
Prices in | ||||||||||||||||
Active | Significant | |||||||||||||||
Markets for | Other | Significant | ||||||||||||||
As of | Identical | Observable | Unobservable | |||||||||||||
September 30, | Assets | Inputs | Inputs | Balance Sheet | ||||||||||||
2013 | (Level 1) | (Level 2) | (Level 3) | Classification | ||||||||||||
Recurring fair value measurements: | ||||||||||||||||
Money market funds | $ | 4,174 | $ | 4,174 | $ | --- | $ | --- | Cash and cash equivalents | |||||||
Foreign government treasury bills | 32 | 32 | --- | --- | Cash and cash equivalents | |||||||||||
U.S. treasuries and government agency securities | 68 | 68 | --- | --- | Short-term investments | |||||||||||
Auction rate securities ("ARS") | 9 | --- | --- | 9 | Long-term investments | |||||||||||
Total recurring fair value measurements | $ | 4,283 | $ | 4,274 | $ | --- | $ | 9 | ||||||||
Fair Value Measurements at | ||||||||||||||||
December 31, 2012 Using | ||||||||||||||||
Quoted | ||||||||||||||||
Prices in | ||||||||||||||||
Active | Significant | |||||||||||||||
Markets for | Other | Significant | ||||||||||||||
As of | Identical | Observable | Unobservable | |||||||||||||
December 31, | Assets | Inputs | Inputs | Balance Sheet | ||||||||||||
2012 | (Level 1) | (Level 2) | (Level 3) | Classification | ||||||||||||
Recurring fair value measurements: | ||||||||||||||||
Money market funds | $ | 3,511 | $ | 3,511 | $ | --- | $ | --- | Cash and cash equivalents | |||||||
U.S. treasuries and government agency securities | 387 | 387 | --- | --- | Short-term investments | |||||||||||
Corporate bonds | 11 | 11 | --- | --- | Short-term investments | |||||||||||
ARS | 8 | --- | --- | 8 | Long-term investments | |||||||||||
Total recurring fair value measurements | $ | 3,917 | $ | 3,909 | $ | --- | $ | 8 | ||||||||
The following tables provide a reconciliation of the beginning and ending balances of our financial assets classified as Level 3 by major categories (amounts in millions) at September 30, 2013 and 2012, respectively: | ||||||||||||||||
Level 3 | ||||||||||||||||
Total | ||||||||||||||||
financial | ||||||||||||||||
assets at | ||||||||||||||||
ARS | fair | |||||||||||||||
(a) | value | |||||||||||||||
Balance at December 31, 2012 | $ | 8 | $ | 8 | ||||||||||||
Total unrealized gains included in other | ||||||||||||||||
comprehensive income | 1 | 1 | ||||||||||||||
Balance at September 30, 2013 | $ | 9 | $ | 9 | ||||||||||||
Level 3 | ||||||||||||||||
Total | ||||||||||||||||
financial | ||||||||||||||||
assets at | ||||||||||||||||
ARS | fair | |||||||||||||||
(a) | value | |||||||||||||||
Balance at December 31, 2011 | $ | 16 | $ | 16 | ||||||||||||
Total unrealized gains included in other | ||||||||||||||||
comprehensive income | 3 | 3 | ||||||||||||||
Balance at September 30, 2012 | $ | 19 | $ | 19 | ||||||||||||
(a) Fair value measurements have been estimated using an income-approach model (specifically, discounted cash-flow analysis). When estimating the fair value, we consider both observable market data and non-observable factors, including credit quality, duration, insurance wraps, collateral composition, maximum rate formulas, comparable trading instruments, and the likelihood of redemption. Significant assumptions used in the analysis include estimates for interest rates, spreads, cash flow timing and amounts, and holding periods of the securities. At September 30, 2013, assets measured at fair value using significant unobservable inputs (Level 3), all of which were ARS, represent less than 1% of our financial assets measured at fair value on a recurring basis. | ||||||||||||||||
Foreign Currency Forward Contracts Not Designated as Hedges | ||||||||||||||||
We transact business in various currencies other than the U.S. dollar and have significant international sales and expenses denominated in currencies other than the U.S. dollar, subjecting us to currency exchange rate risks. To mitigate our risk from foreign currency fluctuations we periodically enter into currency derivative contracts, principally forward contracts with maturities of twelve months or less. All foreign currency contracts are backed, in amount and by maturity, by an identified economic underlying item. In recent years, Vivendi has been our principal counterparty for our currency derivative contracts, but in connection with the Purchase Transaction described in Note 1 of the Notes to Condensed Consolidated Financial Statements, we terminated our cash management services agreement with Vivendi as of October 31, 2013. Further, we have not had any outstanding currency derivative contracts with Vivendi as counterparty since July 3, 2013. If we enter into similar contracts in the future, we expect that the counterparties for any such transactions will be large and reputable commercial or investment banks. We did not have any foreign currency contracts at September 30, 2013. The gross notional amount of outstanding foreign currency contracts was $355 million at December 31, 2012. The fair value of foreign currency contracts is estimated based on the prevailing exchange rates of the various hedged currencies as of the end of the relevant period and was not material as of December 31, 2012. | ||||||||||||||||
We do not hold or purchase any foreign currency contracts for trading or speculative purposes and we do not designate these contracts as hedging instruments. Accordingly, we report the fair value of these contracts within “Other current assets” or “Other current liabilities” in our condensed consolidated balance sheet and the changes in fair value within “General and administrative expense” and “Interest and other investment income (expense), net” in our condensed consolidated statement of operations. For the three and nine months ended September 30, 2013, pre-tax unrealized and realized net gains and losses were not material. For the three and nine months ended September 30, 2012, we recognized pre-tax unrealized net gains of $4 million and $3 million respectively, and a pre-tax realized net loss of $1 million and pre-tax realized net gain of $1 million, respectively. | ||||||||||||||||
Fair Value Measurements on a Non-Recurring Basis | ||||||||||||||||
We measure the fair value of certain assets on a non-recurring basis, generally annually or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. For the three and nine months ended September 30, 2013 and 2012, there were no impairment charges related to assets that are measured on a non-recurring basis. |
Debt
Debt | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Debt Disclosure | ' | ||||||||||
Debt Disclosure | ' | ||||||||||
7. Debt | |||||||||||
Unsecured Senior Notes | |||||||||||
On September 19, 2013, we issued, at par, $1.5 billion of 5.625% unsecured senior notes due September 2021 (the “2021 Notes”) and $750 million of 6.125% unsecured senior notes due September 2023 (the “2023 Notes” and, together with the 2021 Notes, the “Notes”) in a private offering to qualified institutional buyers made in accordance with Rule 144A under the Securities Act of 1933, as amended. Total net proceeds from the issuance of the Notes were $2,211 million, net of the $39 million of fees we paid in connection with their issuance. As described below, upon issuance, the net proceeds from the Notes were deposited into an escrow account. The proceeds were subsequently released from escrow on October 11, 2013 to fund the Purchase Transaction, as described in Note 1 of the Notes to Condensed Consolidated Financial Statements. For further details regarding the completion of the Purchase Transaction, see Note 16 of the Notes to Condensed Consolidated Financial Statements. | |||||||||||
The Notes are general senior obligations of the Company and rank pari passu in right of payment to all of the Company's existing and future senior indebtedness, including the Credit Facilities described under Note 16, “Subsequent Events” below. The Notes are guaranteed on a senior basis by certain of our U.S. subsidiaries (the “Guarantors”). The Notes and related guarantees are not secured and are effectively subordinated to any of the Company's existing and future indebtedness that is secured, including the Credit Facilities described under Note 16, “Subsequent Events” below. The Notes contain customary covenants that place restrictions in certain circumstances on, among other things, the incurrence of debt, granting of liens, payment of dividends, sales of assets and mergers and acquisitions. The Company was in compliance with the terms of the Notes as of September 30, 2013. | |||||||||||
Interest on the Notes is payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2014. As of September 30, 2013, we had interest payable of $3 million related to the 2021 Notes and $1 million related to the 2023 Notes recorded within “Accrued expenses and other liabilities” in our condensed consolidated balance sheet. | |||||||||||
We may redeem the 2021 Notes on or after September 15, 2016 and the 2023 Notes on or after September 15, 2018, in whole or in part on any one or more occasions, at specified redemption prices, plus accrued and unpaid interest. At any time prior to September 15, 2016, with respect to the 2021 Notes, and at any time prior to September 15, 2018, with respect to the 2023 Notes, we may also redeem some or all of the Notes by paying a “make-whole premium”, plus accrued and unpaid interest. Upon the occurrence of one or more qualified equity offerings, we may also redeem up to 35% of the aggregate principal amount of each of the 2021 Notes and 2023 Notes outstanding with the net cash proceeds from such offerings. The Notes are repayable, in whole or in part and at the option of the holders, upon the occurrence 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. | |||||||||||
For the three and nine months ended September 30, 2013, we recorded $39 million of fees as debt discount, which reduced the carrying value of the Notes. The debt discount will be amortized over the respective terms of the Notes and the amortization expense is recorded within “Interest and other investment income (expense), net” in our condensed consolidated statement of operations. | |||||||||||
A summary of our debt is as follows (amounts in millions): | |||||||||||
30-Sep-13 | |||||||||||
Gross Carrying | Unamortized | Net Carrying | |||||||||
Amount | Discount | Amount | |||||||||
2021 Notes | $ | 1,500 | $ | -26 | $ | 1,474 | |||||
2023 Notes | 750 | -13 | 737 | ||||||||
Total long-term debt | $ | 2,250 | $ | -39 | $ | 2,211 | |||||
For the three and nine months ended September 30, 2013, interest expense was $4 million and amortization of the debt discount was immaterial. | |||||||||||
As of September 30, 2013, the scheduled maturities of our debt for each of the five succeeding years are as follows (amounts in millions): | |||||||||||
For the year ending December 31, | |||||||||||
2013 (remaining three months) | $ | --- | |||||||||
2014 | --- | ||||||||||
2015 | --- | ||||||||||
2016 | --- | ||||||||||
2017 | --- | ||||||||||
Thereafter | 2,250 | ||||||||||
Total | $ | 2,250 | |||||||||
As of September 30, 2013, the fair values of our 2021 Notes and 2023 Notes, based on Level 2 inputs, was $1,500 million and $750 million, respectively. | |||||||||||
Supplemental Cash Flow Information | |||||||||||
Because the consummation of the transactions contemplated by the Stock Purchase Agreement was enjoined, as described in Note 13 of the Notes to Condensed Consolidated Financial Statements, in accordance with the offering memorandum and purchase agreements for the Notes, the proceeds from the issuance of the Notes were required to be deposited into and held in an escrow account until the earlier of (i) the completion of the Purchase Transaction, (ii) the termination of the Stock Purchase Agreement, and (iii) December 18, 2013. The escrow account was required to be funded with the full redemption value of the Notes, along with interest payable through December 18, 2013. At September 30, 2013, none of the events had occurred and accordingly, we have accounted for the net proceeds from the issuance of the Notes of $2,211 million as a non-cash financing activity in our condensed consolidated statement of cash flows. We have accounted for the deposit of $71 million into the interest-bearing escrow account, which consists of interest that would be owed on the Notes through December 18, 2013 and the difference between the redemption value of and the net proceeds received from the Notes, as an investing activity in our condensed consolidated statement of cash flows. At September 30, 2013, we recorded the balance of the escrow account as “Cash in escrow” in our condensed consolidated balance sheet. On October 11, 2013, the funds were released from the escrow account and used to fund the Purchase Transaction. | |||||||||||
Deferred Financing Costs | |||||||||||
Costs incurred to obtain our long-term debt are amortized over the terms of the respective debt agreements using the interest method. At September 30, 2013, we recorded $7 million of deferred financing costs related to the Notes within “Other assets – non-current” in our condensed consolidated balance sheet. Amortization expense related to the deferred financing costs for each of the three and nine months ended September 30, 2013, was immaterial and is recorded within “Interest and other investment income (expense), net” in our condensed consolidated statement of operations. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Accumulated Other Comprehensive Income (Loss). | ' | |||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||
8. Accumulated other comprehensive income (loss) | ||||||||||||
The components of accumulated other comprehensive income (loss) at September 30, 2013 and 2012, were as follows (amounts in millions): | ||||||||||||
For the nine months ended September 30, 2013 | ||||||||||||
Foreign currency | Unrealized gain | |||||||||||
translation | on available-for- | |||||||||||
adjustments | sale securities | Total | ||||||||||
Balance at December 31, 2012 | $ | -26 | $ | --- | $ | -26 | ||||||
Other comprehensive income (loss) | ||||||||||||
before reclassifications | 43 | 1 | 44 | |||||||||
Amounts reclassified from accumulated | ||||||||||||
other comprehensive income (loss) | --- | --- | --- | |||||||||
Balance at September 30, 2013 | $ | 17 | $ | 1 | $ | 18 | ||||||
For the nine months ended September 30, 2012 | ||||||||||||
Foreign currency | Unrealized gain | |||||||||||
translation | on available-for- | |||||||||||
adjustments | sale securities | Total | ||||||||||
Balance at December 31, 2011 | $ | -72 | $ | --- | $ | -72 | ||||||
Other comprehensive income (loss) | ||||||||||||
before reclassifications | -3 | 1 | -2 | |||||||||
Amounts reclassified from accumulated | ||||||||||||
other comprehensive income (loss) | --- | --- | --- | |||||||||
Balance at September 30, 2012 | $ | -75 | $ | 1 | $ | -74 | ||||||
Income taxes were not provided for foreign currency translation items as these are considered indefinite investments in non-U.S. subsidiaries. |
Operating_Segments_and_Geograp
Operating Segments and Geographic Region | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Operating Segments and Geographic Region | ' | ||||||||||||||
Operating Segments and Geographic Region | ' | ||||||||||||||
9. Operating segments and geographic region | |||||||||||||||
Our operating segments are consistent with our internal organizational structure, the manner in which our operations are reviewed and managed by our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), the manner in which we assess operating performance and allocate resources, and the availability of separate financial information. Currently, we conduct our business through three operating segments: Activision, Blizzard and Distribution (see Note 1 of the Notes to Condensed Consolidated Financial Statements). We do not aggregate operating segments. | |||||||||||||||
The CODM reviews segment performance exclusive of the impact 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 expenses related to the Purchase Transaction and related debt financings. The CODM does not review any information regarding total assets on an operating segment basis, and accordingly, no disclosure is made with respect thereto. Information on the operating segments and reconciliations of total net revenues and total segment operating income to consolidated net revenues from external customers and consolidated income before income tax expense for the three and nine months ended September 30, 2013 and 2012 are presented below (amounts in millions): | |||||||||||||||
Three months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Income (loss) from operations | |||||||||||||||
Net revenues | before income tax expense | ||||||||||||||
Activision | $ | 319 | $ | 283 | $ | 41 | $ | -14 | |||||||
Blizzard | 282 | 414 | 88 | 168 | |||||||||||
Distribution | 56 | 54 | -1 | --- | |||||||||||
Operating segments total | 657 | 751 | 128 | 154 | |||||||||||
Reconciliation to consolidated net revenues / | |||||||||||||||
consolidated income before income tax | |||||||||||||||
expense: | |||||||||||||||
Net effect from deferral of net revenues and | |||||||||||||||
related cost of sales | 34 | 90 | 32 | 110 | |||||||||||
Stock-based compensation expense | --- | --- | -25 | -34 | |||||||||||
Amortization of intangible assets | --- | --- | -3 | -3 | |||||||||||
Fees and other expenses related to the Purchase | |||||||||||||||
Transaction and related debt financings | --- | --- | -62 | --- | |||||||||||
Consolidated net revenues / operating income | $ | 691 | $ | 841 | 70 | 227 | |||||||||
Interest and other investment income (expense), net | -4 | 1 | |||||||||||||
Consolidated income before income tax expense | $ | 66 | $ | 228 | |||||||||||
Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Income (loss) from operations | |||||||||||||||
Net revenues | before income tax expense | ||||||||||||||
Activision | $ | 1,090 | $ | 928 | $ | 214 | $ | -84 | |||||||
Blizzard | 837 | 1,299 | 282 | 629 | |||||||||||
Distribution | 143 | 166 | -1 | --- | |||||||||||
Operating segments total | 2,070 | 2,393 | 495 | 545 | |||||||||||
Reconciliation to consolidated net revenues / | |||||||||||||||
consolidated income before income tax | |||||||||||||||
expense: | |||||||||||||||
Net effect from deferral of net revenues and | |||||||||||||||
related cost of sales | 995 | 695 | 738 | 514 | |||||||||||
Stock-based compensation expense | --- | --- | -76 | -85 | |||||||||||
Amortization of intangible assets | --- | --- | -8 | -7 | |||||||||||
Fees and other expenses related to the Purchase | |||||||||||||||
Transaction and related debt financings | --- | --- | -62 | --- | |||||||||||
Consolidated net revenues / operating income | $ | 3,065 | $ | 3,088 | $ | 1,087 | $ | 967 | |||||||
Interest and other investment income (expense), net | -1 | 4 | |||||||||||||
Consolidated income before income tax expense | $ | 1,086 | $ | 971 | |||||||||||
Geographic information for the three and nine months ended September 30, 2013 and 2012 is based on the location of the selling entity. Net revenues from external customers by geographic region were as follows (amounts in millions): | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net revenues by geographic region: | |||||||||||||||
North America | $ | 344 | $ | 403 | $ | 1,643 | $ | 1,567 | |||||||
Europe | 290 | 333 | 1,180 | 1,220 | |||||||||||
Asia Pacific | 57 | 105 | 242 | 301 | |||||||||||
Total consolidated net revenues | $ | 691 | $ | 841 | $ | 3,065 | $ | 3,088 | |||||||
Net revenues by platform were as follows (amounts in millions): | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net revenues by platform: | |||||||||||||||
Console | $ | 296 | $ | 227 | $ | 1,634 | $ | 1,430 | |||||||
Online subscriptions1 | 205 | 226 | 714 | 701 | |||||||||||
Other2 | 55 | 62 | 300 | 320 | |||||||||||
PC | 79 | 272 | 274 | 471 | |||||||||||
Total platform net revenues | 635 | 787 | 2,922 | 2,922 | |||||||||||
Distribution | 56 | 54 | 143 | 166 | |||||||||||
Total consolidated net revenues | $ | 691 | $ | 841 | $ | 3,065 | $ | 3,088 | |||||||
(1) Revenues from online subscriptions consist of revenues from all World of Warcraft products, including subscriptions, boxed products, expansion packs, licensing royalties, value-added services, and revenues from Call of Duty Elite memberships. | |||||||||||||||
(2) Revenues from other include 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. | |||||||||||||||
Long-lived assets by geographic region at September 30, 2013 and December 31, 2012 were as follows (amounts in millions): | |||||||||||||||
At September 30, 2013 | At December 31, 2012 | ||||||||||||||
Long-lived assets* by geographic region: | |||||||||||||||
North America | $ | 101 | $ | 90 | |||||||||||
Europe | 31 | 40 | |||||||||||||
Asia Pacific | 7 | 11 | |||||||||||||
Total long-lived assets by geographic region | $ | 139 | $ | 141 | |||||||||||
*The only long-lived assets that we classify by region are our long-term tangible fixed assets, which only include property, plant and equipment assets; all other long-term assets are not allocated by location. | |||||||||||||||
We did not have any single external customer that accounted for 10% or more of consolidated net revenues for the three and nine months ended September 30, 2013 and 2012. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes | ' |
Income Taxes | ' |
10. Income taxes | |
The Company accounts for its provision for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires an estimate of the annual effective tax rate for the full year to be applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The provision for income taxes represents federal, foreign, state and local income taxes. Our effective tax rate differs from the statutory U.S. income tax rate due to the effect of state and local income taxes, tax rates in foreign jurisdictions and certain nondeductible expenses. Our effective tax rate will change from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, the geographical mix of earnings, changes in projected results for various jurisdictions, enacted tax legislation, including certain business tax credits, state and local income taxes, tax audit settlements, and the interaction of various global tax strategies. Changes in judgment from the evaluation of new information resulting in the recognition, derecognition or remeasurement of a tax position taken in a prior annual period are recognized separately in the quarter of the change. | |
The income tax expense of $10 million for the three months ended September 30, 2013 reflected an effective tax rate of 15.2%, which is higher than the effective tax rate of 0.8% for the three months ended September 30, 2012. This increase is primarily due to the tax benefit resulting from a federal income tax settlement recorded in the third quarter of 2012 and a decrease in the proportionate amount of earnings in the current year in foreign jurisdictions with relatively lower statutory rates, as compared to domestic earnings with relatively higher statutory rates. | |
The effective tax rate of 15.2% for the three months ended September 30, 2013 differed from the U.S. statutory rate of 35.0%, primarily due to the increase in the proportionate amount of foreign earnings at relatively lower statutory rates, as compared to domestic earnings at relatively higher statutory rates, the reduction in the projected U.S. pre-tax income attributable to costs associated with the Purchase Transaction and interest expense for the related debt financings, the recognition of federal and California research and development (“R&D”) credits, the federal domestic production deduction and favorable return to provision adjustments, offset by increases to the company's reserve for uncertain tax positions. The favorable return to provision adjustments included a $9 million correction of an error in our deferred taxes related to prior periods, which is not material to either the forecasted fiscal 2013 results or any of the impacted prior periods. | |
Our tax expense of $249 million for the nine months ended September 30, 2013 reflected an effective tax rate of 22.9% compared to an effective tax rate of 18.1% for the nine months ended September 30, 2012. This increase is primarily due to the tax benefit resulting from a federal income tax settlement recorded in the third quarter of 2012, an increase in the proportionate amount of domestic earnings in the current year at relatively higher statutory rates, as compared to foreign earnings at relatively lower statutory rates, and increases to the company's reserve for uncertain tax positions recorded in the third quarter of 2013. However, the impact of these increases was partially offset by favorable return to provision adjustments recorded in the third quarter of 2013 and the recognition of the retroactive reinstatement of the federal R&D tax credit for the tax year ended December 31, 2012, which was enacted in the first quarter of 2013, for which we recorded a benefit of $12 million as a discrete item in the first quarter of 2013. | |
The overall effective income tax rate for the year could be different from the effective tax rate for the three and nine months ended September 30, 2013 and will be dependent, in part, on our profitability for the remainder of the year. In addition, our effective income tax rates for the remainder of 2013 and future periods will depend on a variety of factors, such as changes in the mix of income by tax jurisdiction, applicable accounting rules, applicable tax laws and regulations, rulings and interpretations thereof, developments in tax audits and other matters, and variations in the estimated and actual level of annual pre-tax income or loss. Further, the effective tax rate could fluctuate significantly on a quarterly basis and could be adversely affected by the extent that income (loss) before income tax expenses (benefit) is lower than anticipated in foreign regions, where taxes are levied at relatively lower statutory rates, and/or higher than anticipated in the United States, where taxes are levied at relatively higher statutory rates. | |
The Internal Revenue Service is currently examining Activision Blizzard's federal tax returns for the 2008 and 2009 tax years and Vivendi Games' tax returns for the 2005 through 2008 tax years. While Vivendi Games' results for the period January 1, 2008 through July 9, 2008 are included in the consolidated federal and certain foreign, state and local income tax returns filed by Vivendi or its affiliates, Vivendi Games' results for the period July 10, 2008 through December 31, 2008 are included in the consolidated federal and certain foreign, state and local income tax returns filed by Activision Blizzard. Additionally, the Company has several state and non-U.S. audits pending. Although the final resolution of the Company's global tax disputes is uncertain, based on current information, in the opinion of the Company's management, the ultimate resolution of these matters will not have a material adverse effect on the Company's consolidated financial position, liquidity or results of operations. However, an unfavorable resolution of the Company's global tax disputes could have a material adverse effect on our business and results of operations in the period in which the matters are ultimately resolved. |
Computation_of_BasicDiluted_Ea
Computation of Basic/Diluted Earnings Per Common Share | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Computation of Basic/Diluted Earnings Per Common Share | ' | |||||||||||||||
Computation of basic/diluted earnings per common share | ' | |||||||||||||||
11. Computation of basic/diluted earnings per common share | ||||||||||||||||
The following table sets forth the computation of basic and diluted earnings per common share (amounts in millions, except per share data): | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
Consolidated net income | $ | 56 | $ | 226 | $ | 837 | $ | 795 | ||||||||
Less: Distributed earnings to unvested | ||||||||||||||||
stock-based awards that participate | ||||||||||||||||
in earnings | --- | --- | -4 | -4 | ||||||||||||
Less: Undistributed earnings allocated to | ||||||||||||||||
unvested stock-based awards that | ||||||||||||||||
participate in earnings | -1 | -5 | -14 | -12 | ||||||||||||
Numerator for basic and diluted earnings per | ||||||||||||||||
common share - net income available to | ||||||||||||||||
common shareholders | 55 | 221 | 819 | 779 | ||||||||||||
Denominator: | ||||||||||||||||
Denominator for basic earnings per common | ||||||||||||||||
share - weighted-average common | ||||||||||||||||
shares outstanding | 1,122 | 1,109 | 1,118 | 1,113 | ||||||||||||
Effect of potential dilutive common shares | ||||||||||||||||
under the treasury stock method: | ||||||||||||||||
Employee stock options | 12 | 5 | 9 | 5 | ||||||||||||
Denominator for diluted earnings per | ||||||||||||||||
common share - weighted-average | ||||||||||||||||
common shares outstanding plus | ||||||||||||||||
dilutive effect of employee stock | ||||||||||||||||
options | 1,134 | 1,114 | 1,127 | 1,118 | ||||||||||||
Basic earnings per common share | $ | 0.05 | $ | 0.2 | $ | 0.73 | $ | 0.7 | ||||||||
Diluted earnings per common share | $ | 0.05 | $ | 0.2 | $ | 0.73 | $ | 0.7 | ||||||||
Our unvested restricted stock rights, which consist of restricted stock units, restricted stock awards, and performance shares, are considered participating securities, as they generally have non-forfeitable rights to dividends or dividend equivalents during the contractual period of the award. As such, we are required to use the two-class method in our computation of basic and diluted earnings per common share. For the three and nine months ended September 30, 2013, we had outstanding unvested restricted stock rights with respect to 24 million and 25 million shares of common stock on a weighted-average basis, respectively. For the three and nine months ended September 30, 2012, we had outstanding unvested restricted stock rights with respect to 27 million and 23 million shares of common stock on a weighted-average basis, respectively. | ||||||||||||||||
Potential common shares are not included in the denominator of the diluted earnings per common share calculation when inclusion of such shares would be anti-dilutive. Therefore, options to acquire 2 million and 8 million shares of common stock were not included in the calculation of diluted earnings per common share for the three and nine months ended September 30, 2013, respectively, and options to acquire 24 million and 20 million shares of common stock were not included in the calculation of diluted earnings per common share for the three and nine months ended September 30, 2012, respectively. | ||||||||||||||||
Refer to Notes 12 and 16 of the Notes to Condensed Consolidated Financial Statements for information on our issued and outstanding common stock after the completion of the Purchase Transaction. |
Capital_Transactions
Capital Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Capital Transactions | ' |
Capital Transactions | ' |
12. Capital transactions | |
Stock Purchase Agreement | |
As described in Note 1 of the Notes to Condensed Consolidated Financial Statements, on October 11, 2013, we completed the Purchase Transaction, repurchasing 429 million shares of our common stock for a cash payment of $5.83 billion, pursuant to the terms of the Stock Purchase Agreement (refer to Note 16 of the Notes to Condensed Consolidated Financial Statements for details of the Purchase Transaction). | |
Repurchase Program | |
On February 2, 2012, our Board of Directors authorized a stock repurchase program under which we were authorized to repurchase up to $1 billion of our common stock, on terms and conditions to be determined by the Company, during the period between April 1, 2012 and March 31, 2013. There were no repurchases pursuant to this stock repurchase program during the nine months ended September 30, 2013. For the nine months ended September 30, 2012, we repurchased 4 million shares of our common stock for an aggregate purchase price of $54 million pursuant to this stock repurchase program. | |
On February 3, 2011, our Board of Directors authorized a stock repurchase program under which we were authorized to repurchase up to $1.5 billion of our common stock, on terms and conditions to be determined by the Company, until March 31, 2012. For the nine months ended September 30, 2012, we repurchased 22 million shares of our common stock for an aggregate purchase price of $261 million pursuant to this stock repurchase program. | |
Dividend | |
On February 7, 2013, our Board of Directors declared a cash dividend of $0.19 per common share payable on May 15, 2013 to shareholders of record at the close of business on March 20, 2013. On May 15, 2013, we made an aggregate cash dividend payment of $212 million to such shareholders, and on May 31, 2013, we made related dividend equivalent payments of $4 million to the holders of restricted stock rights. | |
On February 9, 2012, our Board of Directors declared a cash dividend of $0.18 per common share to be paid on May 16, 2012 to shareholders of record at the close of business on March 21, 2012. On May 16, 2012, we made an aggregate cash dividend payment of $201 million to such shareholders, and on June 1, 2012, we made related dividend equivalent payments of $3 million to the holders of restricted stock rights. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure | ' |
Commitments and Contingencies | ' |
13. Commitments and contingencies | |
At September 30, 2013, except as disclosed below and in Note 7 of the Notes to Condensed Consolidated Financial Statements, we did not have any significant changes to our commitments since December 31, 2012. See Note 17 of the Notes to Consolidated Financial Statements included in Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2012, as amended, for more information regarding our commitments. | |
Legal Proceedings | |
We are subject to various legal proceedings and claims. FASB ASC Topic 450 governs the disclosure of loss contingencies and accrual of loss contingencies in respect of litigation and other claims. We record an accrual for a potential loss when it is probable that a loss will occur and the amount of the loss can be reasonably estimated. When the reasonable estimate of the potential loss is within a range of amounts, the minimum of the range of potential loss is accrued, unless a higher amount within the range is a better estimate than any other amount within the range. Moreover, even if an accrual is not required, we provide additional disclosure related to litigation and other claims when it is reasonably possible (i.e., more than remote) that the outcomes of such litigation and other claims include potential material adverse impacts on us. | |
The outcomes of legal proceedings and other claims are subject to significant uncertainties, many of which are outside our control. There is significant judgment required in the analysis of these matters, including the probability determination and whether a potential exposure can be reasonably estimated. In making these determinations, we, in consultation with outside counsel, examine the relevant facts and circumstances on a quarterly basis assuming, as applicable, a combination of settlement and litigated outcomes and strategies. Moreover, legal matters are inherently unpredictable and the timing of development of factors on which reasonable judgments and estimates can be based can be slow. As such, there can be no assurance that the final outcome of any legal matter will not materially and adversely affect our business, financial condition, results of operations, or liquidity. | |
On August 1, 2013, a purported shareholder of the Company filed a shareholder derivative action in the Superior Court of the State of California, County of Los Angeles, captioned Miller v. Kotick, et al., No. BC517086. The complaint names our Board of Directors and Vivendi as defendants, and the Company as a nominal defendant. The complaint alleges that our Board of Directors committed breaches of fiduciary duties, waste of corporate assets and unjust enrichment in connection with Vivendi's sale of its stake in the Company and that Vivendi also breached its fiduciary duties. The plaintiff further alleges that demand by it on our Board of Directors to institute action would be futile because a majority of our Board of Directors is not independent and a majority of the individual defendants face a substantial likelihood of liability for approving the transactions contemplated by the Stock Purchase Agreement. The complaint seeks, among other things, damages sustained by the Company, rescission of the transactions contemplated by the Stock Purchase Agreement, an order restricting our Chief Executive Officer and our Chairman from purchasing additional shares of our common stock and an order directing us to take necessary actions to improve and reform our corporate governance and internal procedures to comply with applicable law, including ordering a shareholder vote on certain amendments to our by-laws or charter that would require half of our Board of Directors to be independent of Messrs. Kotick and Kelly and Vivendi and a proposal to appoint a new independent Chairman of the Board of Directors. The Company's response to the Miller complaint is due on November 18, 2013. | |
In addition, on August 14, 2013, we received a letter dated August 9, 2013 from a shareholder seeking, pursuant to Section 220 of the Delaware General Corporation Law, to inspect the books and records of the Company to ascertain whether the Stock Purchase Transaction and Private Sale were in the best interests of the Company. In response to that request, we provided the stockholder with certain materials under a confidentiality agreement. On September 11, 2013, a complaint was filed under seal by the same stockholder in the Court of Chancery of the State of Delaware in an action captioned Pacchia v. Kotick et al., C.A. No. 8884-VCL. A public version of that complaint was filed on September 16, 2013. The allegations in the complaint were substantially similar to the allegations in the above referenced matter filed on August 1, 2013. On October 25, 2013, Pacchia filed an amended complaint under seal. The amended complaint added claims on behalf of an alleged class of Activision stockholders other than the Company's Chief Executive Officer and Chairman, Vivendi, ASAC, investors in ASAC and other stockholders affiliated with the investors of ASAC. The added class claims are for breach of fiduciary duty against the Company's Chief Executive Officer and Chairman, the Vivendi affiliated directors, the members of the special committee of the Board formed in connection with the Company's consideration of the transactions with Vivendi and ASAC, and Vivendi, as well as aiding and abetting a breach of fiduciary duty against ASAC. The amended complaint removed the derivative claims for waste of corporate assets and disgorgement but continued to allege derivative claims for breach of fiduciary duties. The amended complaint seeks, among other things, certification of a class, damages, reformation of the Private Sale, and disgorgement of any alleged profits received by the Company's Chief Executive Officer, Chairman and ASAC. On October 29, 2013, Pacchia filed a motion to consolidate the Pacchia case with the Hayes case described below. On November 2, 2013, the Court of Chancery consolidated the Pacchia and Hayes cases and ordered the plaintiffs to file supplemental papers related to determining lead plaintiff and lead counsel no later than November 8, 2013. | |
Also, on September 11, 2013, another stockholder of the Company filed a putative class action and stockholder derivative action in the Court of Chancery of the State of Delaware, captioned Hayes v. Activision Blizzard, Inc., et al., No. 8885-VCL. The complaint names our Board of Directors, Vivendi, New VH, ASAC, the General Partner of ASAC, Davis Selected Advisers, L.P. (“Davis”) and Fidelity Management & Research Co. (“FMR”) as defendants, and the Company as a nominal defendant. The complaint alleges that the defendants violated certain provisions of our Amended and Restated Certificate of Incorporation by failing to submit the matters contemplated by the Stock Purchase Agreement for approval by a majority of our stockholders (other than Vivendi and its controlled affiliates); that our Board of Directors committed breaches of their fiduciary duties in approving the Stock Purchase Agreement; that Vivendi violated fiduciary duties owed to other stockholders of the Company in entering into the Stock Purchase Agreement; that our Chief Executive Officer and our Chairman usurped a corporate opportunity from the Company; that our Board of Directors and Vivendi have engaged in actions to entrench our Board of Directors and officers in their offices; that the ASAC Entities, Davis and FMR aided and abetted breaches of fiduciary duties by the Board of Directors and Vivendi; and that our Chief Executive Officer and our Chairman, the ASAC Entities, Davis and FMR will be unjustly enriched through the Private Sale. The complaint seeks, among other things, the rescission of the Private Sale; an order requiring the transfer to the Company of all or part of the shares that are the subject of the Private Sale; an order implementing measures to eliminate or mitigate the alleged entrenching effects of the Private Sale; an order requiring our Chief Executive Officer and our Chairman, the ASAC Entities, Davis and FMR to disgorge to the Company the amounts by which they have allegedly been unjustly enriched; and alleged damages sustained by the class and the Company. In addition, the stockholder sought a temporary restraining order preventing the defendants from consummating the transactions contemplated by the Stock Purchase Agreement without stockholder approval. Following a hearing on the motion for a temporary restraining order, on September 18, 2013, the Court of Chancery issued a preliminary injunction order, enjoining the consummation of the transactions contemplated by the Stock Purchase Agreement pending (a) the issuance of a final decision after a trial on the merits; (b) receipt of a favorable Activision Blizzard stockholder vote on the transactions contemplated by the Stock Purchase Agreement under Section 9.1(b) of our Amended and Restated Certificate of Incorporation or (c) modification of such preliminary injunction order by the Court of Chancery or the Delaware Supreme Court. On September 20, 2013, the Court of Chancery certified its order issuing the preliminary injunction for interlocutory appeal to the Delaware Supreme Court. The defendants moved the Delaware Supreme Court to accept and hear the appeal on an expedited basis. On September 23, 2013, the Delaware Supreme Court accepted the appeal of the Court of Chancery's decision and granted the defendant's motion to hear the appeal on an expedited basis. Following a hearing on October 10, 2013, the Delaware Supreme Court reversed the Court of Chancery's order issuing a preliminary injunction, and determined that the Stock Purchase Agreement was not a merger, business combination or similar transaction that would require a vote of Activision's unaffiliated stockholders under the charter. | |
On October 29, 2013, an amended complaint was filed. It added factual allegations but no new claims or relief. Also on October 29, 2013, Hayes filed a motion to consolidate the Hayes case with the Pacchia case. As noted above, on November 2, 2013, the Court of Chancery consolidated the Pacchia and Hayes cases and ordered the plaintiffs to file supplemental papers related to determining lead plaintiff and lead counsel no later than November 8, 2013. | |
Further, on September 18, 2013, the Company received a letter from another purported stockholder of the Company seeking, pursuant to Section 220 of the Delaware General Corporation Law, to inspect the books and records of the Company to investigate potential wrongdoing or mismanagement in connection with the approval of the Stock Purchase Agreement. | |
We believe that the defendants have meritorious defenses and intend to defend each of these lawsuits vigorously. However, these lawsuits and any other lawsuits are subject to inherent uncertainties and the actual outcome and costs will depend upon many unknown factors. The outcome of litigation is necessarily uncertain, and the Company could be forced to expend significant resources in the defense of these lawsuits and may not prevail. | |
The Company also may be subject to additional claims in connection with the Stock Purchase Transaction and Private Sale. Monitoring and defending against legal actions is time consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. In addition, the Company may incur substantial legal fees and costs in connection with litigation and, although coverage may be available under relevant insurance policies, coverage could be denied or prove to be insufficient. Under our Amended and Restated Certificate of Incorporation and the indemnification agreements that the Company has entered into with our officers and directors, the Company may be required in certain circumstances to indemnify and advance expenses to them in connection with their participation in proceedings arising out of their service to us. There can be no assurance that any of these payments will not be material. | |
The Company is not currently able to estimate the possible cost to us from these lawsuits and related indemnification obligations, as they are in the early stages and it cannot be determined how long it may take to resolve these matters or the possible amount of any damages that the Company may be required to pay. Moreover, the Company cannot be certain what the impact on our operations or financial position will be if any of the purported stockholder plaintiffs are successful in having the Stock Purchase Transaction and Private Sale rescinded. The Company has not established any reserves for any potential liability relating to these lawsuits. It is possible that the Company could, in the future, establish reserves, incur judgments or enter into settlements of claims for monetary damages. A decision adverse to the Company on these actions could result in the rescission of the Stock Purchase Transaction and Private Sale or the payment of substantial damages and could have a material adverse effect on our business, reputation, financial condition, results of operations, profitability, cash flows or liquidity. | |
In addition, we are party to routine claims, suits, investigations, audits and other proceedings arising from the ordinary course of business, including with respect to intellectual property rights, contractual claims, labor and employment matters, regulatory matters, tax matters, unclaimed property matters, compliance matters, and collection matters. In the opinion of management, after consultation with legal counsel, such routine claims and lawsuits are not significant and we do not expect them to have a material adverse effect on our business, financial condition, results of operations, or liquidity. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
14. Related party transactions | |
As part of the Business Combination, we entered into various transactions and agreements, including cash management services agreements, a tax sharing agreement and an investor agreement with Vivendi and its subsidiaries. In connection with the consummation of the Purchase Transaction, we terminated the cash management arrangements with Vivendi and amended our investor agreement with Vivendi. We are also party to music royalty and music distribution agreements with subsidiaries and other affiliates of Vivendi, none of which were impacted by the Purchase Transaction. None of these services, transactions and agreements with Vivendi and its affiliates were material, either individually or in the aggregate, to the condensed consolidated financial statements as a whole. |
Recently_Issued_Accounting_Pro
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2013 | |
Recently Issued Accounting Standards | ' |
Recently Issued Accounting Standards | ' |
15. Recently issued accounting pronouncements | |
Indefinite-lived intangible assets impairment | |
In July 2012, the FASB issued an update to the authoritative guidance related to testing indefinite-lived intangible assets for impairment. This update gives an entity the option to first consider certain qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. This update is effective for the indefinite-lived intangible asset impairment test performed for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements. | |
Balance sheet offsetting disclosures | |
In December 2011, the FASB issued authoritative guidance on the disclosure of financial instruments and derivative instruments that are either offset or subject to an enforceable master netting arrangement or similar agreement and should be applied retrospectively for all comparative periods presented for annual periods beginning on or after January 1, 2013 and interim periods within those annual periods. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements. | |
Reclassification of accumulated other comprehensive loss | |
In February 2013, the FASB issued an accounting standards update requiring new disclosures about reclassifications from accumulated other comprehensive loss to net income. These disclosures may be presented on the face of the statements or in the notes to the consolidated financial statements. This update is effective for fiscal years beginning after December 15, 2012. We adopted this guidance and provided the required disclosures in Note 8 of the Notes to Condensed Consolidated Financial Statements. | |
Accounting for cumulative translation adjustments | |
In February 2013, the FASB issued an update to the authoritative guidance related to the release of cumulative translation adjustments into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a foreign entity. This update will be effective for fiscal years beginning after December 15, 2013. We are currently evaluating the impact on our condensed consolidated financial statements from the adoption of this guidance. | |
Presentation of unrecognized tax benefits | |
In July 2013, the FASB issued an update to the authoritative guidance related to the presentation of an unrecognized tax benefit in the financial statements. The update will require entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss or other tax credit carryforwards when settlement in this manner is available under the tax laws. This update is effective for fiscal years beginning after December 15, 2013. We are currently evaluating the impact on our condensed consolidated financial statements from the adoption of this guidance. |
Subsequent_events
Subsequent events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent events | ' |
Subsequent events | ' |
16. Subsequent events | |
Purchase Transaction and Private Sale | |
On October 11, 2013, we completed the Purchase Transaction described in Note 1 of the Notes to Condensed Consolidated Financial Statements, resulting in the repurchase of 429 million shares of our common stock for a cash payment of $5.83 billion, or $13.60 per share, before taking into account the benefit to the Company of certain tax attributes of New VH assumed in the transaction. The Purchase Transaction was funded with a combination of $1.2 billion cash on hand, $2.5 billion from the bank financing described below, and $2.25 billion from the Notes. The repurchased shares will be recorded as “Treasury Stock” in our condensed consolidated balance sheet. | |
Pursuant to the Stock Purchase Agreement, immediately following the completion of the Purchase Transaction, ASAC completed the Private Sale, purchasing 172 million shares of the Company's common stock from Vivendi for a cash payment of $2.34 billion. Robert A. Kotick, our Chief Executive Officer, and Brian G. Kelly, the Chairman of our Board of Directors, are affiliates of ASAC II LLC. Concurrently with the signing of the Stock Purchase Agreement, Mr. Kotick and Mr. Kelly each entered into waiver and acknowledgement letters with us, which provide, among other things, for the waiver by Mr. Kotick and Mr. Kelly of their rights to any change in control payments or benefits under their employment agreements with us, our 2008 Incentive Plan, any award agreements in respect to awards granted thereunder, or any other benefit plans and arrangements, in each case in connection with or as a consequence of the transactions contemplated by the Stock Purchase Agreement. | |
As a result of the Purchase Transaction and the Private Sale, (i) we have 695 million shares of common stock issued and outstanding as of October 11, 2013, approximately 63% of which is held by the public, (ii) Vivendi holds 83 million shares, or approximately 12% of the outstanding shares of our common stock, and (iii) ASAC holds 172 million shares, or approximately 24.7% of the outstanding shares of our common stock. | |
In connection with the Purchase Transaction, we assumed certain tax attributes of New VH, which generally consist of New VH's net operating loss (“NOL”) carryforwards of approximately $676 million, which represent a potential future tax benefit of approximately $245 million. The Company also obtained indemnification from Vivendi against losses attributable to the potential nonexistence or the disallowance of claimed utilization of such NOL carryforwards of up to $200 million in unrealized tax benefits in the aggregate, limited to taxable years ending on or prior to December 31, 2016. No benefit for these tax attributes or indemnification was recorded upon the close of the Purchase Transaction as it is not more-likely-than-not that the tax position is realizable. | |
Financing Credit Facilities | |
On October 11, 2013, in connection and simultaneously with the Purchase Transaction, we entered into a credit agreement (the “Credit Agreement”) for a $2.5 billion secured term loan facility (the “Term Loan”), maturing in October 2020, and a $250 million secured revolving credit facility (the “Revolver” and, together with the Term Loan, the “Credit Facilities”), maturing in October 2018. A portion of the Revolver can be used to issue letters of credit of up to $50 million, subject to the availability of the Revolver. The proceeds of the Term Loan were used to fund the Purchase Transaction and related fees and expenses, and we did not draw on the Revolver. | |
Borrowings under the Term Loan and the Revolver bear interest at an annual rate equal to an applicable margin plus, at our option, (A) a base rate determined by reference to the highest of (a) the interest rate in effect determined by the administrative agent as its “prime rate,” (b) the federal funds rate plus 0.5% and (c) the London InterBank Offered Rate (“LIBOR”) rate for an interest period of one month plus 1.00%, or (B) LIBOR. LIBOR borrowings under the Term Loan will be subject to a LIBOR floor of 0.75%. In certain circumstances, our applicable interest rate under the Credit Facilities would increase. | |
In addition to paying interest on outstanding principal balances under the Credit Facilities, we are required to pay the lenders a commitment fee on unused commitments under the Revolver. We are also required to pay customary letter of credit fees and agency fees. | |
Commencing on December 31, 2013, we are required to make quarterly principal repayments of 0.25% of the Term Loan's original principal amount, with the balance due on the maturity date. Amounts borrowed under the Term Loan and repaid may not be re-borrowed. | |
The Credit Facilities are guaranteed by certain of the Company's U.S. subsidiaries. The Company and the Guarantors also granted a security interest in substantially all of their U.S. assets, as security for the obligations under the Credit Agreement. The Credit Agreement contains customary covenants that place restrictions in certain circumstances on, among other things, the incurrence of debt, granting of liens, payment of dividends, sales of assets and mergers and acquisitions. If our obligations under the Revolver exceed 15% of the total facility amount as of the end of any fiscal quarter (subject to certain exclusions for letters of credit), we are also subject to certain financial covenants. A violation of any of these covenants could result in an event of default under the Credit Agreement. Upon the occurrence of such event of default or certain other customary events of default, payment of any outstanding amounts under the Credit Agreement may be accelerated, and the lenders' commitments to extend credit under the Credit Agreement may be terminated. In addition, an event of default under the Credit Agreement could, under certain circumstances, permit the holders of other outstanding unsecured debt (including the Notes described in Note 7 of the Notes to Condensed Consolidated Financial Statements) to accelerate the repayment of such obligations. |
Inventories_Net_Tables
Inventories, Net (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventories, Net | ' | ||||||||
Schedule of inventories | ' | ||||||||
At September 30, 2013 | At December 31, 2012 | ||||||||
Finished goods | $ | 201 | $ | 151 | |||||
Purchased parts and components | 112 | 58 | |||||||
Inventories, net | $ | 313 | $ | 209 |
Recovered_Sheet1
Software development and intellectual property licenses (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Software Development Costs and Intellectual Property Licenses | ' | ||||||||||||||
Summarizes the components of software development and intellectual property licenses | ' | ||||||||||||||
At | At | ||||||||||||||
September 30, | December 31, | ||||||||||||||
2013 | 2012 | ||||||||||||||
Internally developed software costs | $ | 200 | $ | 159 | |||||||||||
Payments made to third-party software developers | 201 | 134 | |||||||||||||
Total software development costs | $ | 401 | $ | 293 | |||||||||||
Intellectual property licenses | $ | 12 | $ | 41 | |||||||||||
Amortization, write-offs and impairments | ' | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Amortization of capitalized software development | |||||||||||||||
costs and intellectual property licenses | $ | 15 | $ | 22 | $ | 123 | $ | 121 | |||||||
Write-offs and impairments | --- | --- | 26 | 8 |
Intangible_Assets_Net_Tables
Intangible Assets, Net (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Intangible Assets, Net | ' | |||||||||||||
Schedule of finite lived and indefinite lived intangible assets by major class | ' | |||||||||||||
At September 30, 2013 | ||||||||||||||
Estimated | Gross | |||||||||||||
useful | carrying | Accumulated | Net carrying | |||||||||||
lives | amount | amortization | amount | |||||||||||
Acquired definite-lived intangible assets: | ||||||||||||||
License agreements and other | 3 - 10 years | $ | 98 | $ | -89 | $ | 9 | |||||||
Internally-developed franchises | 11 - 12 years | 309 | -260 | 49 | ||||||||||
Total definite-lived intangible assets | $ | 407 | $ | -349 | $ | 58 | ||||||||
Acquired indefinite-lived intangible assets: | ||||||||||||||
Activision trademark | Indefinite | 386 | ||||||||||||
Acquired trade names | Indefinite | 47 | ||||||||||||
Total indefinite-lived intangible assets | $ | 433 | ||||||||||||
At December 31, 2012 | ||||||||||||||
Estimated | Gross | |||||||||||||
useful | carrying | Accumulated | Net carrying | |||||||||||
lives | amount | amortization | amount | |||||||||||
Acquired definite-lived intangible assets: | ||||||||||||||
License agreements and other | 3 - 10 years | $ | 98 | $ | -88 | $ | 10 | |||||||
Internally-developed franchises | 11 - 12 years | 309 | -251 | 58 | ||||||||||
Total definite-lived intangible assets | $ | 407 | $ | -339 | $ | 68 | ||||||||
Acquired indefinite-lived intangible assets: | ||||||||||||||
Activision trademark | Indefinite | 386 | ||||||||||||
Acquired trade names | Indefinite | 47 | ||||||||||||
Total indefinite-lived intangible assets | $ | 433 | ||||||||||||
Schedule of finite lived intangible assets, future amortization expense | ' | |||||||||||||
2013 (remaining three months) | $ | 18 | ||||||||||||
2014 | 18 | |||||||||||||
2015 | 10 | |||||||||||||
2016 | 5 | |||||||||||||
2017 | 3 | |||||||||||||
Thereafter | 4 | |||||||||||||
Total | $ | 58 |
Goodwill_Tables
Goodwill (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Goodwill: | ' | |||||||||||||
Changes in the carrying amount of goodwill by operating segments | ' | |||||||||||||
Activision | Blizzard | Total | ||||||||||||
Balance at December 31, 2012 | $ | 6,928 | $ | 178 | $ | 7,106 | ||||||||
Tax benefit credited to goodwill | -8 | --- | -8 | |||||||||||
Balance at September 30, 2013 | $ | 6,920 | $ | 178 | $ | 7,098 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
Fair value, assets measured on a recurring and/or non-recurring basis | ' | |||||||||||||||
Fair Value Measurements at | ||||||||||||||||
September 30, 2013 Using | ||||||||||||||||
Quoted | ||||||||||||||||
Prices in | ||||||||||||||||
Active | Significant | |||||||||||||||
Markets for | Other | Significant | ||||||||||||||
As of | Identical | Observable | Unobservable | |||||||||||||
September 30, | Assets | Inputs | Inputs | Balance Sheet | ||||||||||||
2013 | (Level 1) | (Level 2) | (Level 3) | Classification | ||||||||||||
Recurring fair value measurements: | ||||||||||||||||
Money market funds | $ | 4,174 | $ | 4,174 | $ | --- | $ | --- | Cash and cash equivalents | |||||||
Foreign government treasury bills | 32 | 32 | --- | --- | Cash and cash equivalents | |||||||||||
U.S. treasuries and government agency securities | 68 | 68 | --- | --- | Short-term investments | |||||||||||
Auction rate securities ("ARS") | 9 | --- | --- | 9 | Long-term investments | |||||||||||
Total recurring fair value measurements | $ | 4,283 | $ | 4,274 | $ | --- | $ | 9 | ||||||||
Fair Value Measurements at | ||||||||||||||||
December 31, 2012 Using | ||||||||||||||||
Quoted | ||||||||||||||||
Prices in | ||||||||||||||||
Active | Significant | |||||||||||||||
Markets for | Other | Significant | ||||||||||||||
As of | Identical | Observable | Unobservable | |||||||||||||
December 31, | Assets | Inputs | Inputs | Balance Sheet | ||||||||||||
2012 | (Level 1) | (Level 2) | (Level 3) | Classification | ||||||||||||
Recurring fair value measurements: | ||||||||||||||||
Money market funds | $ | 3,511 | $ | 3,511 | $ | --- | $ | --- | Cash and cash equivalents | |||||||
U.S. treasuries and government agency securities | 387 | 387 | --- | --- | Short-term investments | |||||||||||
Corporate bonds | 11 | 11 | --- | --- | Short-term investments | |||||||||||
ARS | 8 | --- | --- | 8 | Long-term investments | |||||||||||
Total recurring fair value measurements | $ | 3,917 | $ | 3,909 | $ | --- | $ | 8 | ||||||||
Fair value, assets classified as level 3 reconciliation | ' | |||||||||||||||
Level 3 | ||||||||||||||||
Total | ||||||||||||||||
financial | ||||||||||||||||
assets at | ||||||||||||||||
ARS | fair | |||||||||||||||
(a) | value | |||||||||||||||
Balance at December 31, 2012 | $ | 8 | $ | 8 | ||||||||||||
Total unrealized gains included in other | ||||||||||||||||
comprehensive income | 1 | 1 | ||||||||||||||
Balance at September 30, 2013 | $ | 9 | $ | 9 | ||||||||||||
Level 3 | ||||||||||||||||
Total | ||||||||||||||||
financial | ||||||||||||||||
assets at | ||||||||||||||||
ARS | fair | |||||||||||||||
(a) | value | |||||||||||||||
Balance at December 31, 2011 | $ | 16 | $ | 16 | ||||||||||||
Total unrealized gains included in other | ||||||||||||||||
comprehensive income | 3 | 3 | ||||||||||||||
Balance at September 30, 2012 | $ | 19 | $ | 19 |
Debt_Tables
Debt (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Debt Disclosure | ' | ||||||||||
Summary of debt | ' | ||||||||||
30-Sep-13 | |||||||||||
Gross Carrying | Unamortized | Net Carrying | |||||||||
Amount | Discount | Amount | |||||||||
2021 Notes | $ | 1,500 | $ | -26 | $ | 1,474 | |||||
2023 Notes | 750 | -13 | 737 | ||||||||
Total long-term debt | $ | 2,250 | $ | -39 | $ | 2,211 | |||||
Schedule of maturities of debt | ' | ||||||||||
For the year ending December 31, | |||||||||||
2013 (remaining three months) | $ | --- | |||||||||
2014 | --- | ||||||||||
2015 | --- | ||||||||||
2016 | --- | ||||||||||
2017 | --- | ||||||||||
Thereafter | 2,250 | ||||||||||
Total | $ | 2,250 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Accumulated Other Comprehensive Income (Loss). | ' | |||||||||||
Schedule of accumulated other comprehensive income (loss) | ' | |||||||||||
For the nine months ended September 30, 2013 | ||||||||||||
Foreign currency | Unrealized gain | |||||||||||
translation | on available-for- | |||||||||||
adjustments | sale securities | Total | ||||||||||
Balance at December 31, 2012 | $ | -26 | $ | --- | $ | -26 | ||||||
Other comprehensive income (loss) | ||||||||||||
before reclassifications | 43 | 1 | 44 | |||||||||
Amounts reclassified from accumulated | ||||||||||||
other comprehensive income (loss) | --- | --- | --- | |||||||||
Balance at September 30, 2013 | $ | 17 | $ | 1 | $ | 18 | ||||||
For the nine months ended September 30, 2012 | ||||||||||||
Foreign currency | Unrealized gain | |||||||||||
translation | on available-for- | |||||||||||
adjustments | sale securities | Total | ||||||||||
Balance at December 31, 2011 | $ | -72 | $ | --- | $ | -72 | ||||||
Other comprehensive income (loss) | ||||||||||||
before reclassifications | -3 | 1 | -2 | |||||||||
Amounts reclassified from accumulated | ||||||||||||
other comprehensive income (loss) | --- | --- | --- | |||||||||
Balance at September 30, 2012 | $ | -75 | $ | 1 | $ | -74 |
Operating_Segments_and_Geograp1
Operating Segments and Geographic Region (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Operating Segments and Geographic Region | ' | ||||||||||||||
Segment reporting information | ' | ||||||||||||||
Three months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Income (loss) from operations | |||||||||||||||
Net revenues | before income tax expense | ||||||||||||||
Activision | $ | 319 | $ | 283 | $ | 41 | $ | -14 | |||||||
Blizzard | 282 | 414 | 88 | 168 | |||||||||||
Distribution | 56 | 54 | -1 | --- | |||||||||||
Operating segments total | 657 | 751 | 128 | 154 | |||||||||||
Reconciliation to consolidated net revenues / | |||||||||||||||
consolidated income before income tax | |||||||||||||||
expense: | |||||||||||||||
Net effect from deferral of net revenues and | |||||||||||||||
related cost of sales | 34 | 90 | 32 | 110 | |||||||||||
Stock-based compensation expense | --- | --- | -25 | -34 | |||||||||||
Amortization of intangible assets | --- | --- | -3 | -3 | |||||||||||
Fees and other expenses related to the Purchase | |||||||||||||||
Transaction and related debt financings | --- | --- | -62 | --- | |||||||||||
Consolidated net revenues / operating income | $ | 691 | $ | 841 | 70 | 227 | |||||||||
Interest and other investment income (expense), net | -4 | 1 | |||||||||||||
Consolidated income before income tax expense | $ | 66 | $ | 228 | |||||||||||
Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Income (loss) from operations | |||||||||||||||
Net revenues | before income tax expense | ||||||||||||||
Activision | $ | 1,090 | $ | 928 | $ | 214 | $ | -84 | |||||||
Blizzard | 837 | 1,299 | 282 | 629 | |||||||||||
Distribution | 143 | 166 | -1 | --- | |||||||||||
Operating segments total | 2,070 | 2,393 | 495 | 545 | |||||||||||
Reconciliation to consolidated net revenues / | |||||||||||||||
consolidated income before income tax | |||||||||||||||
expense: | |||||||||||||||
Net effect from deferral of net revenues and | |||||||||||||||
related cost of sales | 995 | 695 | 738 | 514 | |||||||||||
Stock-based compensation expense | --- | --- | -76 | -85 | |||||||||||
Amortization of intangible assets | --- | --- | -8 | -7 | |||||||||||
Fees and other expenses related to the Purchase | |||||||||||||||
Transaction and related debt financings | --- | --- | -62 | --- | |||||||||||
Consolidated net revenues / operating income | $ | 3,065 | $ | 3,088 | $ | 1,087 | $ | 967 | |||||||
Interest and other investment income (expense), net | -1 | 4 | |||||||||||||
Consolidated income before income tax expense | $ | 1,086 | $ | 971 | |||||||||||
Revenues by geographic region | ' | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net revenues by geographic region: | |||||||||||||||
North America | $ | 344 | $ | 403 | $ | 1,643 | $ | 1,567 | |||||||
Europe | 290 | 333 | 1,180 | 1,220 | |||||||||||
Asia Pacific | 57 | 105 | 242 | 301 | |||||||||||
Total consolidated net revenues | $ | 691 | $ | 841 | $ | 3,065 | $ | 3,088 | |||||||
Revenues by platform | ' | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net revenues by platform: | |||||||||||||||
Console | $ | 296 | $ | 227 | $ | 1,634 | $ | 1,430 | |||||||
Online subscriptions1 | 205 | 226 | 714 | 701 | |||||||||||
Other2 | 55 | 62 | 300 | 320 | |||||||||||
PC | 79 | 272 | 274 | 471 | |||||||||||
Total platform net revenues | 635 | 787 | 2,922 | 2,922 | |||||||||||
Distribution | 56 | 54 | 143 | 166 | |||||||||||
Total consolidated net revenues | $ | 691 | $ | 841 | $ | 3,065 | $ | 3,088 | |||||||
Long-lived assets by geographic region | ' | ||||||||||||||
At September 30, 2013 | At December 31, 2012 | ||||||||||||||
Long-lived assets* by geographic region: | |||||||||||||||
North America | $ | 101 | $ | 90 | |||||||||||
Europe | 31 | 40 | |||||||||||||
Asia Pacific | 7 | 11 | |||||||||||||
Total long-lived assets by geographic region | $ | 139 | $ | 141 |
Computation_of_BasicDiluted_Ea1
Computation of Basic/Diluted Earnings Per Common Share (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Computation of Basic/Diluted Earnings Per Common Share | ' | |||||||||||||||
Schedule of computation of earnings per share | ' | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
Consolidated net income | $ | 56 | $ | 226 | $ | 837 | $ | 795 | ||||||||
Less: Distributed earnings to unvested | ||||||||||||||||
stock-based awards that participate | ||||||||||||||||
in earnings | --- | --- | -4 | -4 | ||||||||||||
Less: Undistributed earnings allocated to | ||||||||||||||||
unvested stock-based awards that | ||||||||||||||||
participate in earnings | -1 | -5 | -14 | -12 | ||||||||||||
Numerator for basic and diluted earnings per | ||||||||||||||||
common share - net income available to | ||||||||||||||||
common shareholders | 55 | 221 | 819 | 779 | ||||||||||||
Denominator: | ||||||||||||||||
Denominator for basic earnings per common | ||||||||||||||||
share - weighted-average common | ||||||||||||||||
shares outstanding | 1,122 | 1,109 | 1,118 | 1,113 | ||||||||||||
Effect of potential dilutive common shares | ||||||||||||||||
under the treasury stock method: | ||||||||||||||||
Employee stock options | 12 | 5 | 9 | 5 | ||||||||||||
Denominator for diluted earnings per | ||||||||||||||||
common share - weighted-average | ||||||||||||||||
common shares outstanding plus | ||||||||||||||||
dilutive effect of employee stock | ||||||||||||||||
options | 1,134 | 1,114 | 1,127 | 1,118 | ||||||||||||
Basic earnings per common share | $ | 0.05 | $ | 0.2 | $ | 0.73 | $ | 0.7 | ||||||||
Diluted earnings per common share | $ | 0.05 | $ | 0.2 | $ | 0.73 | $ | 0.7 |
Description_of_Business_and_Ba1
Description of Business and Basis of Consolidation and Presentation (Details) (Subsequent Events, USD $) | 0 Months Ended |
In Billions, except Share data in Millions, unless otherwise specified | Oct. 11, 2013 |
ASAC | ' |
Stock Purchase Agreement | ' |
Stock Purchased By ASAC, Shares | 172 |
Stock Purchased By ASAC, Value | $2.34 |
Stock Purchased By ASAC, Price Per Share | $13.60 |
Activision Blizzard | ' |
Stock Purchase Agreement | ' |
Treasury Stock, Shares, Acquired | 429 |
Treasury Stock, Acquired, Value | $5.83 |
Treasury Stock, Price Per Share | $13.60 |
Description_of_Business_and_Ba2
Description of Business and Basis of Consolidation and Presentation (Details 2) (USD $) | 9 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | ||||||||||||||||||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 11, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Jun. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Jun. 30, 2012 | Jun. 30, 2012 | Jun. 30, 2012 |
segments | Vivendi | Vivendi | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2013 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | 2012 Results of Adjustments | |
Subsequent Events | Online subscriptions | Europe | Blizzard | Online subscriptions | Europe | Blizzard | |||||||||||||||||||||
Description of Business and Basis of Consolidation and Presentation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percent of Activision Blizzard common stock owned by a specific shareholder | ' | 61.00% | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of operating segments | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Correction of Error - Net Revenues | ' | ' | ' | ' | ' | ' | ' | ' | $8 | ' | ' | ' | $8 | $8 | $8 | ' | ' | ' | ' | ' | $11 | ' | ' | ' | $11 | $11 | $11 |
Correction of Error - Investment and Other Income (Expense) | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Correction of Error - Income Before Income Tax Expense | ' | ' | ' | ' | ' | ' | ' | ' | 9 | ' | ' | ' | 9 | 9 | 9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11 | 11 | 11 |
Correction of Error - Net Income | ' | ' | ' | ' | ' | ' | ' | ' | 7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' |
Correction of Error - Accrued Expenses and Other Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | 9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Correction of Error - Deferred Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11 | ' | ' | ' | ' | ' | ' |
Correction of Error - Operating Cash Flows | ' | ' | ' | ' | ' | ' | ' | ' | -9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Correction of Error - Quarterly Effect | ' | ' | ' | $1 | $1 | $1 | $1 | $1 | ' | $4 | $2 | $1 | ' | ' | ' | $1 | $1 | $1 | $1 | $1 | ' | $3 | $2 | $3 | ' | ' | ' |
Correction of Error - Basic and Diluted EPS | ' | ' | ' | ' | ' | ' | ' | ' | ($0.01) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($0.01) | ' | ' | ' | ' | ' | ' |
Inventories_Net_Details
Inventories, Net (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Inventories, Net | ' | ' |
Finished goods | $201 | $151 |
Purchased parts and components | 112 | 58 |
Inventories, net | $313 | $209 |
Software_Development_and_Intel1
Software Development and Intellectual Property Licenses (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Software development and intellectual property licenses: | ' | ' | ' | ' | ' |
Internally developed software costs | $200,000,000 | ' | $200,000,000 | ' | $159,000,000 |
Payments made to third-party software developers | 201,000,000 | ' | 201,000,000 | ' | 134,000,000 |
Total software development costs | 401,000,000 | ' | 401,000,000 | ' | 293,000,000 |
Intellectual property licenses | 12,000,000 | ' | 12,000,000 | ' | 41,000,000 |
Amortization, write-offs and impairments: | ' | ' | ' | ' | ' |
Amortization of capitalized software development costs and intellectual property licenses | 15,000,000 | 22,000,000 | 123,000,000 | 121,000,000 | ' |
Write-offs and impairments | $0 | $0 | $26,000,000 | $8,000,000 | ' |
Intangible_Assets_Net_Details
Intangible Assets, Net (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
License agreements and other | License agreements and other | License agreements and other | License agreements and other | License agreements and other | License agreements and other | Internally developed franchises | Internally developed franchises | Internally developed franchises | Internally developed franchises | Internally developed franchises | Internally developed franchises | Activision trademark | Activision trademark | Acquired trade names | Acquired trade names | ||||||
Maximum | Maximum | Minimum | Minimum | Maximum | Maximum | Minimum | Minimum | ||||||||||||||
Amortization expense disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense | $3 | $3 | $9 | $7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful life | ' | ' | ' | ' | ' | ' | ' | '10 years | '10 years | '3 years | '3 years | ' | ' | '12 years | '12 years | '11 years | '11 years | ' | ' | ' | ' |
Gross carrying amount, definite-lived intangible assets | 407 | ' | 407 | ' | 407 | 98 | 98 | ' | ' | ' | ' | 309 | 309 | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated amortization, definite-lived intangible assets | -349 | ' | -349 | ' | -339 | -89 | -88 | ' | ' | ' | ' | -260 | -251 | ' | ' | ' | ' | ' | ' | ' | ' |
Net carrying amount, definite-lived intangible assets | 58 | ' | 58 | ' | 68 | 9 | 10 | ' | ' | ' | ' | 49 | 58 | ' | ' | ' | ' | ' | ' | ' | ' |
Indefinite Lived Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net carrying amount, indefinite-lived intangible assets | $433 | ' | $433 | ' | $433 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $386 | $386 | $47 | $47 |
Intangible_Assets_Net_Details_
Intangible Assets, Net (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Definite-lived intangible assets, future amortization expense disclosure | ' | ' |
2013 (remaining three months) | $18 | ' |
2014 | 18 | ' |
2015 | 10 | ' |
2016 | 5 | ' |
2017 | 3 | ' |
Thereafter | 4 | ' |
Total | $58 | $68 |
Goodwill_Details
Goodwill (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Changes in carrying amount of goodwill | ' |
Goodwill, balance at beginning of period | $7,106,000,000 |
Tax benefit credited to goodwill | -8,000,000 |
Goodwill, balance at end of period | 7,098,000,000 |
Activision | ' |
Changes in carrying amount of goodwill | ' |
Goodwill, balance at beginning of period | 6,928,000,000 |
Tax benefit credited to goodwill | -8,000,000 |
Goodwill, balance at end of period | 6,920,000,000 |
Blizzard | ' |
Changes in carrying amount of goodwill | ' |
Goodwill, balance at beginning of period | 178,000,000 |
Tax benefit credited to goodwill | 0 |
Goodwill, balance at end of period | $178,000,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Fair value measurements using quoted prices in active markets for identical assets (Level 1) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | $4,274,000,000 | $3,909,000,000 |
Fair value measurements using quoted prices in active markets for identical assets (Level 1) | Money market funds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 4,174,000,000 | 3,511,000,000 |
Fair value measurements using quoted prices in active markets for identical assets (Level 1) | Foreign government treasury bills | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 32,000,000 | ' |
Fair value measurements using quoted prices in active markets for identical assets (Level 1) | U.S. treasuries and government agency securities | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 68,000,000 | 387,000,000 |
Fair value measurements using quoted prices in active markets for identical assets (Level 1) | Corporate bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | ' | 11,000,000 |
Fair value measurements using quoted prices in active markets for identical assets (Level 1) | ARS | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | 0 |
Fair value measurements using significant other observable inputs (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | 0 |
Fair value measurements using significant other observable inputs (Level 2) | Money market funds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | 0 |
Fair value measurements using significant other observable inputs (Level 2) | Foreign government treasury bills | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | ' |
Fair value measurements using significant other observable inputs (Level 2) | U.S. treasuries and government agency securities | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | 0 |
Fair value measurements using significant other observable inputs (Level 2) | Corporate bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | ' | 0 |
Fair value measurements using significant other observable inputs (Level 2) | ARS | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | 0 |
Fair value measurements using significant unobservable inputs (Level 3) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 9,000,000 | 8,000,000 |
Fair value measurements using significant unobservable inputs (Level 3) | Money market funds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | 0 |
Fair value measurements using significant unobservable inputs (Level 3) | Foreign government treasury bills | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | ' |
Fair value measurements using significant unobservable inputs (Level 3) | U.S. treasuries and government agency securities | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 0 | 0 |
Fair value measurements using significant unobservable inputs (Level 3) | Corporate bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | ' | 0 |
Fair value measurements using significant unobservable inputs (Level 3) | ARS | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 9,000,000 | 8,000,000 |
Fair value | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 4,283,000,000 | 3,917,000,000 |
Fair value | Money market funds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 4,174,000,000 | 3,511,000,000 |
Fair value | Foreign government treasury bills | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 32,000,000 | ' |
Fair value | U.S. treasuries and government agency securities | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | 68,000,000 | 387,000,000 |
Fair value | Corporate bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | ' | 11,000,000 |
Fair value | ARS | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total assets at fair value | $9,000,000 | $8,000,000 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Fair Value Assets Measured on Recurring Basis Unobservable Input Reconciliation Asset | ' | ' |
Level 3 measurement reconciliation, recurring basis, fair value assets beginning balance | $8 | $16 |
Total unrealized gains included in other comprehensive income | 1 | 3 |
Level 3 measurement reconciliation, recurring basis, fair value assets ending balance | 9 | 19 |
Percentage of assets measured on recurring basis at fair value using significant unobservable inputs | 0.20% | ' |
Auction rate securities | ' | ' |
Fair Value Assets Measured on Recurring Basis Unobservable Input Reconciliation Asset | ' | ' |
Level 3 measurement reconciliation, recurring basis, fair value assets beginning balance | 8 | 16 |
Total unrealized gains included in other comprehensive income | 1 | 3 |
Level 3 measurement reconciliation, recurring basis, fair value assets ending balance | $9 | $19 |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' |
Impairment charges - nonrecurring | $0 | $0 | $0 | $0 | ' |
Notional amount of foreign currency derivatives | 0 | ' | 0 | ' | 355,000,000 |
Realized | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' |
Net gain (loss) on foreign currency contracts | ' | -1,000,000 | ' | 1,000,000 | ' |
Unrealized | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' |
Net gain (loss) on foreign currency contracts | ' | $4,000,000 | ' | $3,000,000 | ' |
Debt_Details
Debt (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Debt Instrument | ' | ' |
Interest expense | $4 | $4 |
Debt_Details_2
Debt (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Long-term Debt | ' | ' | ' | ' | ' |
Gross Carrying Amount | ' | $2,250,000,000 | $2,250,000,000 | ' | ' |
Unamortized Discount | ' | -39,000,000 | -39,000,000 | ' | ' |
Net Carrying Amount | ' | 2,211,000,000 | 2,211,000,000 | ' | 0 |
Maturites of Debt | ' | ' | ' | ' | ' |
2013 (remaining three months) | ' | 0 | 0 | ' | ' |
2014 | ' | 0 | 0 | ' | ' |
2015 | ' | 0 | 0 | ' | ' |
2016 | ' | 0 | 0 | ' | ' |
2017 | ' | 0 | 0 | ' | ' |
Thereafter | ' | 2,250,000,000 | 2,250,000,000 | ' | ' |
Total | ' | 2,250,000,000 | 2,250,000,000 | ' | ' |
Deferred Financing Costs | ' | ' | ' | ' | ' |
Deferred Financing Costs | ' | 7,000,000 | 7,000,000 | ' | ' |
Proceeds From Issuance of Unsecured Notes | 2,211,000,000 | ' | ' | ' | ' |
Fees paid | 39,000,000 | 39,000,000 | 39,000,000 | ' | ' |
Deposit in escrow | ' | ' | -71,000,000 | 0 | ' |
Percentage of principal repayable to option holders upon certain criteria | ' | 101.00% | 101.00% | ' | ' |
Maximum percentage of outstanding Notes that can be redeemed with net cash proceeds from one or more qualified equity offerings | ' | 35.00% | 35.00% | ' | ' |
2021 Notes | ' | ' | ' | ' | ' |
Long-term Debt | ' | ' | ' | ' | ' |
Gross Carrying Amount | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | ' | ' |
Unamortized Discount | ' | -26,000,000 | -26,000,000 | ' | ' |
Net Carrying Amount | ' | 1,474,000,000 | 1,474,000,000 | ' | ' |
Maturites of Debt | ' | ' | ' | ' | ' |
Total | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | ' | ' |
Interest payable | ' | 3,000,000 | 3,000,000 | ' | ' |
Deferred Financing Costs | ' | ' | ' | ' | ' |
Interest rate | 5.63% | ' | ' | ' | ' |
2021 Notes | Fair value measurements using significant other observable inputs (Level 2) | ' | ' | ' | ' | ' |
Deferred Financing Costs | ' | ' | ' | ' | ' |
Fair Value of Notes | ' | 1,500,000,000 | 1,500,000,000 | ' | ' |
2023 Notes | ' | ' | ' | ' | ' |
Long-term Debt | ' | ' | ' | ' | ' |
Gross Carrying Amount | 750,000,000 | 750,000,000 | 750,000,000 | ' | ' |
Unamortized Discount | ' | -13,000,000 | -13,000,000 | ' | ' |
Net Carrying Amount | ' | 737,000,000 | 737,000,000 | ' | ' |
Maturites of Debt | ' | ' | ' | ' | ' |
Total | 750,000,000 | 750,000,000 | 750,000,000 | ' | ' |
Interest payable | ' | 1,000,000 | 1,000,000 | ' | ' |
Deferred Financing Costs | ' | ' | ' | ' | ' |
Interest rate | 6.13% | ' | ' | ' | ' |
2023 Notes | Fair value measurements using significant other observable inputs (Level 2) | ' | ' | ' | ' | ' |
Deferred Financing Costs | ' | ' | ' | ' | ' |
Fair Value of Notes | ' | $750,000,000 | $750,000,000 | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Accumulated other comprehensive income (loss) [Line Items] | ' | ' |
Accumulated other comprehensive income (loss), balance at beginning of period | ($26,000,000) | ($72,000,000) |
Other comprehensive income (loss) before reclassifications | 44,000,000 | -2,000,000 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Accumulated other comprehensive income (loss), balance at end of period | 18,000,000 | -74,000,000 |
Foreign currency translation adjustment | ' | ' |
Accumulated other comprehensive income (loss) [Line Items] | ' | ' |
Accumulated other comprehensive income (loss), balance at beginning of period | -26,000,000 | -72,000,000 |
Other comprehensive income (loss) before reclassifications | 43,000,000 | -3,000,000 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Accumulated other comprehensive income (loss), balance at end of period | 17,000,000 | -75,000,000 |
Unrealized gain on available-for-sale securities | ' | ' |
Accumulated other comprehensive income (loss) [Line Items] | ' | ' |
Accumulated other comprehensive income (loss), balance at beginning of period | 0 | 0 |
Other comprehensive income (loss) before reclassifications | 1,000,000 | 1,000,000 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Accumulated other comprehensive income (loss), balance at end of period | $1,000,000 | $1,000,000 |
Operating_Segments_and_Geograp2
Operating Segments and Geographic Region (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Operating Segments and Geographic Region | ' | ' | ' | ' | ' |
Number of operating segments | ' | ' | 3 | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | $691 | $841 | $3,065 | $3,088 | ' |
Net effect from changes in the deferral of net revenues | 34 | 90 | 995 | 695 | ' |
Number of concentration risk customers | 0 | 0 | 0 | 0 | ' |
Total platform | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 635 | 787 | 2,922 | 2,922 | ' |
Console | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 296 | 227 | 1,634 | 1,430 | ' |
Online subscriptions | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 205 | 226 | 714 | 701 | ' |
Other | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 55 | 62 | 300 | 320 | ' |
PC | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 79 | 272 | 274 | 471 | ' |
Total geographic region | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 691 | 841 | 3,065 | 3,088 | ' |
Total geographic area long-lived assets | 139 | ' | 139 | ' | 141 |
North America | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 344 | 403 | 1,643 | 1,567 | ' |
Total geographic area long-lived assets | 101 | ' | 101 | ' | 90 |
Europe | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 290 | 333 | 1,180 | 1,220 | ' |
Total geographic area long-lived assets | 31 | ' | 31 | ' | 40 |
Asia Pacific | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 57 | 105 | 242 | 301 | ' |
Total geographic area long-lived assets | 7 | ' | 7 | ' | 11 |
Operating segments total | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 657 | 751 | 2,070 | 2,393 | ' |
Activision | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 319 | 283 | 1,090 | 928 | ' |
Blizzard | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | 282 | 414 | 837 | 1,299 | ' |
Distribution | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Consolidated net revenues | $56 | $54 | $143 | $166 | ' |
Operating_Segments_and_Geograp3
Operating Segments and Geographic Region (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' | ' | ' |
Income (loss) from operations | $70,000,000 | $227,000,000 | $1,087,000,000 | $967,000,000 |
Net effect from changes in the deferral of net revenues and related cost of sales | 32,000,000 | 110,000,000 | 738,000,000 | 514,000,000 |
Stock-based compensation expense | -25,000,000 | -34,000,000 | -76,000,000 | -85,000,000 |
Amortization of intangible assets | -3,000,000 | -3,000,000 | -8,000,000 | -7,000,000 |
Fees and other expenses related to the Purchase Transaction and related debt financings | -62,000,000 | 0 | -62,000,000 | 0 |
Interest and other investment income (expense), net | -4,000,000 | 1,000,000 | -1,000,000 | 4,000,000 |
Consolidated income (loss) before income tax expense | 66,000,000 | 228,000,000 | 1,086,000,000 | 971,000,000 |
Operating segments total | ' | ' | ' | ' |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' | ' | ' |
Income (loss) from operations | 128,000,000 | 154,000,000 | 495,000,000 | 545,000,000 |
Activision | ' | ' | ' | ' |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' | ' | ' |
Income (loss) from operations | 41,000,000 | -14,000,000 | 214,000,000 | -84,000,000 |
Blizzard | ' | ' | ' | ' |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' | ' | ' |
Income (loss) from operations | 88,000,000 | 168,000,000 | 282,000,000 | 629,000,000 |
Distribution | ' | ' | ' | ' |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ' | ' | ' | ' |
Income (loss) from operations | ($1,000,000) | $0 | ($1,000,000) | $0 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Taxes | ' | ' | ' | ' | ' |
Income tax expense | $10 | ' | $2 | $249 | $176 |
Effective tax rate (in percent) | 15.20% | ' | 0.80% | 22.90% | 18.10% |
Statutory income tax rate (in percent) | 35.00% | ' | ' | ' | ' |
Research and development tax credit | ' | 12 | ' | ' | ' |
Correction of Error - Deferred Taxes | ($9) | ' | ' | ' | ' |
Computation_of_BasicDiluted_Ea2
Computation of Basic/Diluted Earnings Per Common Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: | ' | ' | ' | ' |
Consolidated net income (loss) | $56,000,000 | $226,000,000 | $837,000,000 | $795,000,000 |
Less: Distributed earnings to unvested share-based awards that participate in earnings | 0 | 0 | -4,000,000 | -4,000,000 |
Less: Undistributed earnings allocated to unvested share-based awards that participate in earnings | -1,000,000 | -5,000,000 | -14,000,000 | -12,000,000 |
Numerator for basic earnings per common share-income (loss) available to common shareholders | $55,000,000 | $221,000,000 | $819,000,000 | $779,000,000 |
Denominator: | ' | ' | ' | ' |
Denominator for basic earnings per common share - weighted-average common shares outstanding (in shares) | 1,122 | 1,109 | 1,118 | 1,113 |
Effect of potential dilutive common shares under the treasury stock method: | ' | ' | ' | ' |
Employee stock options (in shares) | 12 | 5 | 9 | 5 |
Denominator for diluted earnings per common share - weighted-average common shares outstanding plus dilutive effect of employee stock options (in shares) | 1,134 | 1,114 | 1,127 | 1,118 |
Basic earnings per common share (in dollars per share) | $0.05 | $0.20 | $0.73 | $0.70 |
Diluted earnings per common share (in dollars per share) | $0.05 | $0.20 | $0.73 | $0.70 |
Common stock weighted-average shares, unvested restricted stock rights (in shares) | 24 | 27 | 25 | 23 |
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 2 | 24 | 8 | 20 |
Capital_Transactions_Details
Capital Transactions (Details) (Subsequent Events, Activision Blizzard, USD $) | 0 Months Ended |
In Billions, except Share data in Millions, unless otherwise specified | Oct. 11, 2013 |
Subsequent Events | Activision Blizzard | ' |
Subsequent Events - Related Party Transactions | ' |
Treasury Stock, Acquired, Shares | 429 |
Treasury Stock, Acquired, Value | $5.83 |
Capital_Transactions_Details_2
Capital Transactions (Details 2) (USD $) | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |
Feb. 03, 2011 | Sep. 30, 2012 | Feb. 02, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Share Repurchase Program | Share Repurchase Program | New Share Repurchase Program | New Share Repurchase Program | New Share Repurchase Program | |
Share Repurchase Program [Line Items] | ' | ' | ' | ' | ' |
Stock repurchase program, dollar amount authorized | $1,500,000,000 | ' | $1,000,000,000 | ' | ' |
Cost of common stock repurchased and retired under the stock repurchase program | ' | $261,000,000 | ' | $0 | $54,000,000 |
Shares of common stock repurchased and retired | ' | 22,000,000 | ' | 0 | 4,000,000 |
Capital_Transactions_Details_3
Capital Transactions (Details 3) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||||
In Millions, except Per Share data, unless otherwise specified | 31-May-13 | 15-May-13 | Jun. 01, 2012 | 16-May-12 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Dividends | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends per common share (in dollars per share) | ' | ' | ' | ' | $0 | $0 | $0.19 | $0.18 |
Cash dividend payment | ' | $212 | ' | $201 | ' | ' | $216 | $204 |
Dividend equivalent payment | $4 | ' | $3 | ' | ' | ' | ' | ' |
Subsequent_events_Details
Subsequent events (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 11, 2013 | Sep. 30, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 |
Facilities | Vivendi | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | Subsequent Events | ||||||
LIBOR Rate | Facilities | Facilities | Facilities | Term Loan | Term Loan | Revolver | Purchase Transaction | Vivendi | ASAC | Activision Blizzard | Public | Expected | ||||||||
LIBOR Rate Loans | Prime Rate | Federal Funds Effective Rate | LIBOR Rate | LIBOR Rate | ||||||||||||||||
Base Rate Loans | Base Rate Loans | Base Rate Loans | LIBOR Rate Loans | |||||||||||||||||
Subsequent Events - Purchase Transaction and Private Sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury Stock, Acquired, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 429 | ' | ' |
Treasury Stock, Acquired, Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5,830,000,000 | ' | ' |
Treasury Stock, Price Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $13.60 | ' | ' |
Cash Payments for Repurchase of Common Stock | ' | ' | ' | 0 | 315,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000,000 | ' | ' | ' | ' | ' |
Common Stock Outstanding | ' | ' | ' | ' | ' | ' | ' | 695 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of Activision Blizzard common stock owned by a specific shareholder | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 83 | 172 | ' | ' | ' |
Percent of Activision Blizzard common stock owned by a specific shareholder | ' | ' | ' | ' | ' | ' | 61.00% | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | 24.70% | ' | 63.00% | ' |
Stock Purchased By ASAC, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 172 | ' | ' | ' |
Stock Purchased By ASAC, Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,340,000,000 | ' | ' | ' |
Net Operating Loss Carryforwards | ' | ' | ' | ' | ' | ' | ' | 676,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potential Future Tax Benefit | ' | 10,000,000 | 2,000,000 | 249,000,000 | 176,000,000 | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -245,000,000 |
Net Operating Loss Carryforward Indemnification Amount Obtained | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000,000 |
Proceeds From Issuance of Secured Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000,000 | ' | ' | ' | ' | ' |
Proceeds From Issuance of Unsecured Notes | 2,211,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,250,000,000 | ' | ' | ' | ' | ' |
Proceeds From Lines of Credit | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subsequent Events - Financing Facilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000,000 | ' | 250,000,000 | ' | ' | ' | ' | ' | ' |
Maximum letter of credit that can be issued under the Revolver | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000,000 | ' | ' | ' | ' | ' | ' |
Percentage of Revolver outstanding which triggers certain financial covenants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' | ' |
Applicable margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of required quarterly payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' |
Description of variable rate basis | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | 'Prime rate as designated by the administrative agent | 'Federal funds rate | 'LIBOR rate for one month | ' | ' | ' | ' | ' | ' | ' | ' | ' |
LIBOR floor rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.75% | ' | ' | ' | ' | ' | ' | ' |