Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 28, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Activision Blizzard, Inc. | |
Entity Central Index Key | 718,877 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
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 | 729,020,389 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 4,416 | $ 4,848 |
Short-term investments | 105 | 10 |
Accounts receivable, net of allowances of $157 and $383, at June 30, 2015 and December 31, 2014, respectively | 201 | 659 |
Inventories, net | 117 | 123 |
Software development | 338 | 452 |
Intellectual property licenses | 26 | 5 |
Deferred income taxes, net | 346 | 368 |
Other current assets | 502 | 444 |
Total current assets | 6,051 | 6,909 |
Long-term investments | 9 | 9 |
Software development | 80 | 20 |
Intellectual property licenses | 0 | 18 |
Property and equipment, net | 179 | 157 |
Other assets | 153 | 85 |
Intangible assets, net | 26 | 29 |
Trademark and trade names | 433 | 433 |
Goodwill | 7,084 | 7,086 |
Total assets | 14,015 | 14,746 |
Current liabilities: | ||
Accounts payable | 198 | 325 |
Deferred revenues | 837 | 1,797 |
Accrued expenses and other liabilities | 510 | 592 |
Total current liabilities | 1,545 | 2,714 |
Long-term debt, net | 4,077 | 4,324 |
Deferred income taxes, net | 126 | 114 |
Other liabilities | 466 | 361 |
Total liabilities | $ 6,214 | $ 7,513 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity: | ||
Common stock, $0.000001 par value, 2,400,000,000 shares authorized, 1,157,546,478 and 1,150,605,926 shares issued at June 30, 2015 and December 31, 2014, respectively | $ 0 | $ 0 |
Additional paid-in capital | 10,163 | 9,924 |
Less: Treasury stock, at cost, 428,676,471 shares at June 30, 2015 and December 31, 2014 | (5,627) | (5,762) |
Retained earnings | 3,810 | 3,374 |
Accumulated other comprehensive loss | (545) | (303) |
Total shareholders' equity | 7,801 | 7,233 |
Total liabilities and shareholders' equity | $ 14,015 | $ 14,746 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 157 | $ 383 |
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 2,400,000,000 | 2,400,000,000 |
Common stock, shares issued | 1,157,546,478 | 1,150,605,926 |
Treasury stock, shares | 428,676,471 | 428,676,471 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net revenues | ||||
Product sales | $ 528 | $ 587 | $ 1,311 | $ 1,357 |
Subscription, licensing and other revenues | 516 | 383 | 1,011 | 724 |
Total net revenues | 1,044 | 970 | 2,322 | 2,081 |
Costs and expenses | ||||
Cost of sales - product costs | 156 | 187 | 364 | 412 |
Cost of sales - online | 53 | 56 | 106 | 115 |
Cost of sales - software royalties and amortization | 85 | 46 | 233 | 102 |
Cost of sales - intellectual property licenses | 3 | 11 | 7 | 13 |
Product development | 149 | 112 | 294 | 255 |
Sales and marketing | 164 | 141 | 256 | 245 |
General and administrative | 102 | 107 | 188 | 202 |
Total costs and expenses | 712 | 660 | 1,448 | 1,344 |
Operating income | 332 | 310 | 874 | 737 |
Interest and other expense, net | 50 | 50 | 100 | 101 |
Income before income tax expense | 282 | 260 | 774 | 636 |
Income tax expense | 70 | 56 | 168 | 139 |
Net income | $ 212 | $ 204 | $ 606 | $ 497 |
Earnings per common share | ||||
Basic (in dollars per share) | $ 0.29 | $ 0.28 | $ 0.82 | $ 0.68 |
Diluted (in dollars per share) | $ 0.29 | $ 0.28 | $ 0.81 | $ 0.67 |
Weighted-average number of shares outstanding | ||||
Basic (in shares) | 727 | 716 | 725 | 712 |
Diluted (in shares) | 735 | 725 | 734 | 723 |
Dividends per common share (in dollars per share) | $ 0 | $ 0 | $ 0.23 | $ 0.20 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 212 | $ 204 | $ 606 | $ 497 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 85 | (19) | (245) | (24) |
Unrealized gains (losses) on forward contracts designated as hedges, net of deferred income taxes of $0 million for the periods ended June 30, 2015 and 2014 | (8) | 0 | 6 | 0 |
Unrealized losses on investments, net of deferred income taxes of $0 million for the periods ended June 30, 2015 and 2014 | (3) | 0 | (3) | 0 |
Total other comprehensive income (loss) | 74 | (19) | (242) | (24) |
Comprehensive income | $ 286 | $ 185 | $ 364 | $ 473 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Deferred income taxes on gross unrealized appreciation (depreciation) on forward contracts designated as hedges | $ 0 | $ 0 | $ 0 | $ 0 |
Deferred income taxes on gross unrealized appreciation (depreciation) on investments | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | ||
Cash flows from operating activities: | |||
Net income | $ 606 | $ 497 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred income taxes | 20 | (21) | |
Provision for inventories | 12 | 20 | |
Depreciation and amortization | 40 | 38 | |
Amortization of capitalized software development costs and intellectual property licenses | [1] | 225 | 97 |
Amortization of debt discount and debt financing costs | 4 | 3 | |
Stock-based compensation expense | [2] | 43 | 52 |
Excess tax benefits from stock awards | (23) | (23) | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 445 | 402 | |
Inventories | (9) | 1 | |
Software development and intellectual property licenses | (171) | (161) | |
Other assets | 166 | 182 | |
Deferred revenues | (903) | (622) | |
Accounts payable | (122) | (190) | |
Accrued expenses and other liabilities | 11 | (33) | |
Net cash provided by operating activities | 344 | 242 | |
Cash flows from investing activities: | |||
Proceeds from maturities of available-for-sale investments | 0 | 21 | |
Purchases of available-for-sale investments | (100) | 0 | |
Capital expenditures | (49) | (62) | |
Decrease in restricted cash | 5 | 7 | |
Net cash used in investing activities | (144) | (34) | |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock to employees | 61 | 137 | |
Tax payment related to net share settlements on restricted stock rights | (24) | (34) | |
Excess tax benefits from stock awards | 23 | 23 | |
Dividends paid | (170) | (147) | |
Repayment of long-term debt | (250) | (375) | |
Net cash used in financing activities | (360) | (396) | |
Effect of foreign exchange rate changes on cash and cash equivalents | (272) | (23) | |
Net decrease in cash and cash equivalents | (432) | (211) | |
Cash and cash equivalents at beginning of period | 4,848 | 4,410 | |
Cash and cash equivalents at end of period | $ 4,416 | $ 4,199 | |
[1] | Excludes deferral and amortization of stock-based compensation expense. | ||
[2] | Includes the net effects of capitalization, deferral, and amortization of stock-based compensation expense. |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - 6 months ended Jun. 30, 2015 - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2014 | $ 7,233 | $ 0 | $ (5,762) | $ 9,924 | $ 3,374 | $ (303) |
Balance (in shares) at Dec. 31, 2014 | 1,151 | (429) | ||||
Components of comprehensive income: | ||||||
Net income | 606 | 606 | ||||
Other comprehensive income (loss) | (242) | (242) | ||||
Issuance of common stock pursuant to employee stock options | 61 | 61 | ||||
Issuance of common stock pursuant to employee stock options (in shares) | 5 | |||||
Issuance of common stock pursuant to restricted stock rights (in shares) | 3 | |||||
Restricted stock surrendered for employees’ tax liability | (24) | (24) | ||||
Restricted stock surrendered for employees' tax liability (in shares) | (1) | |||||
Tax benefit associated with employee stock awards | 22 | 22 | ||||
Stock-based compensation expense related to employee stock options and restricted stock rights | 45 | 45 | ||||
Dividends ($0.23 per common share) | (170) | (170) | ||||
Indemnity on tax attributes assumed in connection with the Purchase Transaction (see Note 9) | 68 | $ 68 | ||||
Shareholder lawsuit settlement in connection with the Purchase Transaction (see Note 12) | 202 | 67 | 135 | |||
Balance at Jun. 30, 2015 | $ 7,801 | $ 0 | $ (5,627) | $ 10,163 | $ 3,810 | $ (545) |
Balance (in shares) at Jun. 30, 2015 | 729 | 1,158 | (429) |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per common share (in dollars per share) | $ 0 | $ 0 | $ 0.23 | $ 0.20 |
Description of Business and Bas
Description of Business and Basis of Consolidation and Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Consolidation and Presentation | Description of Business and Basis of Consolidation and Presentation Activision Blizzard, Inc. (“Activision Blizzard”) 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 currently offer games for video game consoles, personal computers (“PC”), and handheld, mobile and tablet devices. We maintain significant operations in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), France, Germany, Ireland, Italy, Sweden, Spain, the Netherlands, Australia, South Korea and China. The Business Combination and Share Repurchase Activision Blizzard is the result of the 2008 business combination (“Business Combination”) by and among the Company (then known as 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. As a result of the consummation of the Business Combination, Activision, Inc. was renamed Activision Blizzard, Inc. and Vivendi became a majority shareholder of Activision. On October 11, 2013, we repurchased approximately 429 million shares of our common stock, pursuant to a stock purchase agreement (the “Stock Purchase Agreement”) we entered into 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 (together with ASAC, the “ASAC Entities”). 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 approximately 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 our common stock, pursuant to the Stock Purchase Agreement, for a cash payment of $2.34 billion , or $13.60 per share (the “Private Sale”). Robert A. Kotick, our Chief Executive Officer, and Brian G. Kelly, Chairman of our Board of Directors, are affiliates of ASAC II LLC. Refer to Note 6 of the Notes to Condensed Consolidated Financial Statements for information regarding the financing of the Purchase Transaction. On May 28, 2014, Vivendi sold approximately 41 million shares, or approximately 50% of its then-current holdings, of our common stock in a registered public offering. Vivendi received proceeds of approximately $850 million from that sale; the Company did not receive any proceeds. As of June 30, 2015 , we had approximately 729 million shares of common stock issued and outstanding. At that date: (i) Vivendi held 41 million shares, or approximately 6% of the outstanding shares of our common stock; (ii) ASAC held 172 million shares, or approximately 24% of the outstanding shares of our common stock; and (iii) our other stockholders held approximately 70% of the outstanding shares of our common stock. The common stock of Activision Blizzard is traded on The NASDAQ Stock Market under the ticker symbol “ATVI.” Operating Segments Based upon our organizational structure, we conduct our business through three operating segments as follows: (i) Activision Publishing, Inc. Activision Publishing, Inc. (“Activision”) is a leading global developer and publisher of interactive software products and content. Activision delivers content to a broad range of gamers, ranging from children to adults, and from core gamers to mass-market consumers to “value” buyers seeking budget-priced software, in a variety of geographies. Activision develops games based on internally-developed properties, including games in the Call of Duty®, Skylanders® and Guitar Hero® franchises, and to a lesser extent, based on licensed intellectual properties. Additionally, we have established a long-term alliance with Bungie to publish its game universe, Destiny . Activision sells games through both retail and digital online channels. Activision currently offers games that operate on the Microsoft Corporation (“Microsoft”) Xbox One (“Xbox One”) and Xbox 360 (“Xbox 360”), Nintendo Co. Ltd. (“Nintendo”) Wii U (“Wii U”) and Wii (“Wii”), and Sony Computer Entertainment, Inc. (“Sony”) PlayStation 4 (“PS4”) and PlayStation 3 (“PS3”) console systems (Xbox One, Wii U, and PS4 are collectively referred to as “next-generation”; Xbox 360, Wii, and PS3 are collectively referred to as “prior-generation”); the PC; the Nintendo 3DS, Nintendo Dual Screen, and Sony PlayStation Vita handheld game systems; and mobile and tablet devices. (ii) Blizzard Entertainment, Inc. Blizzard Entertainment, Inc. (“Blizzard”) is a leader in the subscription-based massively multi-player online role-playing game category in terms of both subscriber base and revenues generated through its 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, console, mobile and tablet platforms, including games in the multiple-award winning Diablo®, StarCraft®, and Hearthstone®: Heroes of Warcraft™ franchises. 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 in-game purchases and services; retail sales of physical “boxed” products; online download sales of PC products; purchases and downloads via third-party console, mobile and tablet platforms; and licensing of software to third-party or related-party companies that distribute World of Warcraft, Diablo, StarCraft and Hearthstone: Heroes of Warcraft products. In addition, Blizzard is the creator of Heroes of the Storm™ , a free-to-play online hero brawler released on June 2, 2015. (iii) Activision Blizzard Distribution Activision Blizzard Distribution (“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 The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting. Accordingly, certain notes or other information that are normally required by 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, 2014. 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. 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. Actual results could differ from these estimates and assumptions. The accompanying condensed consolidated financial statements include the accounts and operations of the Company. All intercompany accounts and transactions have been eliminated. 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. Supplemental Cash Flow Information: Non-cash investing activities As of June 30, 2015 and 2014, the Company had accrued capital expenditures of $ 18 million and $ 8 million , respectively, recorded within "Accounts Payable" and "Accrued expenses and other liabilities." |
Inventories, Net
Inventories, Net | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net Our inventories, net consist of the following (amounts in millions): At June 30, 2015 At December 31, 2014 Finished goods $ 72 $ 112 Purchased parts and components 45 11 Inventories, net 117 123 Inventory reserves were $52 million at June 30, 2015 and December 31, 2014 . |
Software Development Costs and
Software Development Costs and Intellectual Property Licenses | 6 Months Ended |
Jun. 30, 2015 | |
Software Development Costs and Intellectual Property Licenses | |
Software Development Costs and Intellectual Property Licenses | 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 June 30, 2015 At December 31, 2014 Internally-developed software costs $ 259 $ 262 Payments made to third-party software developers 159 210 Total software development costs $ 418 $ 472 Intellectual property licenses $ 26 $ 23 Amortization of capitalized software development costs and intellectual property licenses was the following (amounts in millions): 23 For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Amortization of capitalized software development costs and intellectual property licenses $ 85 $ 50 $ 232 $ 108 |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net Intangible assets, net consist of the following (amounts in millions): At June 30, 2015 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: License agreements and other 3 - 10 years $ 98 $ (92 ) $ 6 Internally-developed franchises 11 - 12 years 309 (289 ) 20 Total definite-lived intangible assets $ 407 $ (381 ) $ 26 Acquired indefinite-lived intangible assets: Activision trademark Indefinite 386 Acquired trade names Indefinite 47 Total indefinite-lived intangible assets $ 433 At December 31, 2014 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: License agreements and other 3 - 10 years $ 98 $ (92 ) $ 6 Internally-developed franchises 11 - 12 years 309 (286 ) 23 Total definite-lived intangible assets $ 407 $ (378 ) $ 29 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 $2 million and $3 million for the three and six months ended June 30, 2015, respectively. Amortization expense of intangible assets was $1 million and $3 million for the three and six months ended June 30, 2014, respectively. At June 30, 2015 , future amortization of definite-lived intangible assets is estimated as follows (amounts in millions): 2015 (remaining six months) $ 8 2016 8 2017 5 2018 3 2019 2 Total $ 26 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements 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. Fair Value Measurements on a Recurring Basis 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 June 30, 2015 Using As of June 30, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance Sheet Classification Financial Assets: Recurring fair value measurements: Money market funds $ 4,274 $ 4,274 $ — $ — Cash and cash equivalents Foreign government treasury bills 34 34 — — Cash and cash equivalents U.S. treasuries and government agency securities 100 100 — — Short-term investments Foreign currency forward contracts designated as hedges 6 — 6 — Other current assets Auction rate securities (“ARS”) 9 — — 9 Long-term investments Total recurring fair value measurements $ 4,423 $ 4,408 $ 6 $ 9 Fair Value Measurements at December 31, 2014 Using As of December 31, 2014 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Balance Sheet Classification Recurring fair value measurements: Money market funds $ 4,475 $ 4,475 $ — $ — Cash and cash equivalents Foreign government treasury bills 40 40 — — Cash and cash equivalents ARS 9 — — 9 Long-term investments Total recurring fair value measurements $ 4,524 $ 4,515 $ — $ 9 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 June 30, 2015 and 2014 , respectively: Level 3 ARS (a) Total financial assets at fair value Balance at December 31, 2014 $ 9 $ 9 Total unrealized gains included in other comprehensive income — — Balance at June 30, 2015 $ 9 $ 9 Level 3 ARS (a) Total financial assets at fair value Balance at December 31, 2013 $ 9 $ 9 Total unrealized gains included in other comprehensive income — — Balance at June 30, 2014 $ 9 $ 9 __________________________ (a) Fair value measurements have been estimated using an income-approach model. 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 June 30, 2015 , 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 The Company transacts business in various foreign currencies and has significant international sales and expenses denominated in foreign currencies, subjecting us to foreign currency risk. In addition, the Company transacts intercompany business in various foreign currencies other than its functional currency, subjecting us to variability in the functional currency-equivalent cash flows. To mitigate our foreign currency risk resulting from our foreign currency-denominated monetary assets, liabilities and earnings and our foreign currency risk related to functional currency-equivalent cash flows resulting from our intercompany transactions, we periodically enter into currency derivative contracts, principally forward contracts with maturities of generally less than one year . We report the fair value of these contracts within “Other current assets” or “Other current liabilities” in our condensed consolidated balance sheets based on the prevailing exchange rates of the various hedged currencies as of the end of the relevant period. We do not hold or purchase any foreign currency forward contracts for trading or speculative purposes. Foreign Currency Forward Contracts Not Designated as Hedges For foreign currency forward contracts entered into to mitigate risk from foreign currency-denominated monetary assets, liabilities, and earnings that are not designated as hedging instruments in accordance with FASB Accounting Standards Codification (“ASC”) Topic 815, changes in the estimated fair value of these derivatives are recorded within “General and administrative expenses” and “Interest and other expense, net” in our condensed consolidated statements of operations, depending on the nature of the underlying transactions. At June 30, 2015 there were no outstanding foreign currency forward contracts not designated as hedges. At December 31, 2014 , there was one outstanding foreign currency forward contract not designated as a hedge; the notional amount of that foreign currency forward contract was $11 million and the fair value was not material. For the three and six months ended June 30, 2015 and 2014 , pre-tax net losses related to these forward contracts were not material. Foreign Currency Forward Contracts Designated as Hedges For foreign currency forward contracts entered into to hedge forecasted intercompany cash flows that are subject to foreign currency risk and which we designated as cash flow hedges in accordance with ASC Topic 815, we assess the effectiveness of these cash flow hedges at inception and on an ongoing basis to determine if the hedges are effective at providing offsetting changes in cash flows of the hedged items. We record the effective portion of changes in the estimated fair value of these derivatives in “Accumulated other comprehensive income (loss)” and subsequently reclassify the related amount of accumulated other comprehensive income (loss) to earnings within “General and administrative expense” when the hedged item impacts earnings. We measure hedge ineffectiveness, if any, and if it is determined that a derivative has ceased to be a highly effective hedge, we will discontinue hedge accounting for the derivative. The gross notional amount of all outstanding foreign currency forward contracts designated as cash flow hedges was approximately $150 million at June 30, 2015 and $119 million at June 30, 2014 . At December 31, 2014 , there were no outstanding foreign currency forward contracts designated as cash flow hedges. During the three and six months ended June 30, 2015 and 2014 , there was no ineffectiveness relating to these hedges. The net unrealized gains of approximately $6 million related to these contracts at June 30, 2015 are expected to be reclassified into earnings within the next twelve months. 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 six months ended June 30, 2015 and 2014 , there were no impairment charges related to assets that are measured on a non-recurring basis. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt The proceeds from the credit facilities and the unsecured senior notes, as described below, were used to fund the Purchase Transaction disclosed in Note 1 of the Notes to Condensed Consolidated Financial Statements. 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 maturing in October 2020 (the “Term Loan”), and a $250 million secured revolving credit facility maturing in October 2018 (the “Revolver” and, together with the Term Loan, the “Credit Facilities”). 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. To date, we have not drawn on the Revolver and there were no letters of credit issued and outstanding under the Revolver at either June 30, 2015 or December 31, 2014 . Borrowings under the Term Loan and the Revolver bear interest, payable on a quarterly basis, 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% . At June 30, 2015 , the Credit Facilities bore interest at 3.25% . In certain circumstances, our applicable interest rate under the Credit Facilities will 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. Commitment fees are recorded within “Interest and other expense, net” on the condensed consolidated statement of operations. We are also required to pay customary letter of credit fees, if any, and agency fees. The terms of the Credit Agreement require quarterly principal repayments of 0.25% of the Term Loan’s original principal amount, with the balance due on the maturity date. On February 11, 2014, we made a voluntary repayment of $375 million on our Term Loan. This repayment satisfied the required quarterly principal repayments for the entire term of the Credit Agreement. On February 11, 2015, we made an additional voluntary repayment of $250 million on our Term Loan. The Credit Facilities are guaranteed by certain of the Company’s U.S. subsidiaries, whose assets represent approximately 69% of our consolidated assets. 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 debt holders described below, to accelerate the repayment of such obligations. The Company was in compliance with the terms of the Credit Facilities as of June 30, 2015 . 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. 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 above. The Notes are guaranteed on a senior basis by certain of our U.S. subsidiaries. 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. 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 June 30, 2015 . Interest on the Notes is payable semi-annually in arrears on March 15 and September 15 of each year. As of June 30, 2015 and December 31, 2014 , we had interest payable of $38 million related to the 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. Fees associated with the closing of the Term Loan and the Notes are recorded as debt discount, which reduce the carrying value of the Term Loan and the Notes. The debt discount is amortized over the respective terms of the Term Loan and the Notes. Amortization expense related to the debt discount is recorded within “Interest and other expense, net” in our condensed consolidated statement of operations. A summary of our debt is as follows (amounts in millions): At June 30, 2015 Gross Carrying Amount Unamortized Discount Net Carrying Amount Term Loan $ 1,869 $ (9 ) $ 1,860 2021 Notes 1,500 (22 ) 1,478 2023 Notes 750 (11 ) 739 Total long-term debt $ 4,119 $ (42 ) $ 4,077 At December 31, 2014 Gross Carrying Amount Unamortized Discount Net Carrying Amount Term Loan $ 2,119 $ (10 ) $ 2,109 2021 Notes 1,500 (23 ) 1,477 2023 Notes 750 (12 ) 738 Total long-term debt $ 4,369 $ (45 ) $ 4,324 For the three and six months ended June 30, 2015, interest expense was $48 million and $97 million, respectively, amortization of the debt discount for the Credit Facilities and Notes was $2 million and $3 million, respectively, and commitment fees for the Revolver were not material. For the three and six months ended June 30, 2014, interest expense was $50 million and $101 million, respectively, amortization of the debt discount for the Credit Facilities and Notes was $2 million and $3 million, respectively, and commitment fees for the Revolver were not material. As of June 30, 2015 , the scheduled maturities and contractual principal repayments of our debt for each of the five succeeding years are as follows (amounts in millions): For the year ending December 31, 2015 (remaining six months) $ — 2016 — 2017 — 2018 — 2019 — Thereafter 4,119 Total $ 4,119 As of June 30, 2015 and December 31, 2014 , the carrying value of the Term Loan approximates the fair value, based on Level 2 inputs (observable market prices in less than active markets), as the interest rate is variable over the selected interest period and is similar to current rates at which we can borrow funds. Based on Level 2 inputs, the fair values of the 2021 Notes and 2023 Notes were $1,575 million and $814 million , respectively, as of June 30, 2015 and $1,586 million and $810 million , respectively, as of December 31, 2014 . Deferred Financing Costs Costs incurred to obtain our long-term debt are recorded as deferred financing costs within “Other assets — non-current” in our condensed consolidated balance sheets and are amortized over the terms of the respective debt agreements using a straight-line basis for costs related to the Revolver and the interest earned method for costs related to the Term Loan and Notes. Amortization expense related to the deferred financing costs is recorded within “Interest and other investment income (expense), net” in our condensed consolidated statements of operations. For the three and six months ended June 30, 2015 and 2014, this amount was not material. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) at June 30, 2015 and 2014 , were as follows (amounts in millions): For the Six Months Ended June 30, 2015 Foreign currency translation adjustments Unrealized gain (loss) on forward contracts Unrealized gain (loss) on available-for-sale securities Total Balance at December 31, 2014 $ (304 ) $ — $ 1 $ (303 ) Other comprehensive income (loss) before reclassifications (245 ) 8 (3 ) (240 ) Amounts reclassified from accumulated other comprehensive income (loss) — (2 ) — (2 ) Balance at June 30, 2015 $ (549 ) $ 6 $ (2 ) $ (545 ) For the Six Months Ended June 30, 2014 Foreign currency translation adjustments Unrealized gain on forward contracts Unrealized gain on available-for-sale securities Total Balance at December 31, 2013 $ 67 $ — $ 1 $ 68 Other comprehensive income (loss) before reclassifications (24 ) — — (24 ) Balance at June 30, 2014 $ 43 $ — $ 1 $ 44 Income taxes were not provided for foreign currency translation items as these are considered indefinite investments in non-U.S. subsidiaries. |
Operating Segments and Geograph
Operating Segments and Geographic Region | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Operating Segments and Geographic Region | 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 fees and other expenses (including legal fees, costs, expenses and accruals) 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 six months ended June 30, 2015 and 2014 are presented below (amounts in millions): Three Months Ended June 30, 2015 2014 2015 2014 Net revenues Income (loss) from operations before income tax expense Activision $ 313 $ 252 $ 57 $ (31 ) Blizzard 385 340 117 145 Distribution 61 66 (1 ) (1 ) Operating segments total 759 658 173 113 Reconciliation to consolidated net revenues / consolidated income before income tax expense: Net effect from deferral of net revenues and related cost of sales 285 312 181 220 Stock-based compensation expense — — (21 ) (22 ) Amortization of intangible assets — — (1 ) (1 ) Consolidated net revenues / operating income $ 1,044 $ 970 $ 332 $ 310 Interest and other expense, net 50 50 Consolidated income before income tax expense $ 282 $ 260 Six Months Ended June 30, 2015 2014 2015 2014 Net revenues Income (loss) from operations before income tax expense Activision $ 616 $ 489 $ 121 $ (29 ) Blizzard 737 801 256 383 Distribution 109 140 (1 ) (1 ) Operating segments total 1,462 1,430 376 353 Reconciliation to consolidated net revenues / consolidated income before income tax expense: Net effect from deferral of net revenues and related cost of sales 860 651 545 440 Stock-based compensation expense — — (44 ) (53 ) Amortization of intangible assets — — (3 ) (3 ) Consolidated net revenues / operating income $ 2,322 $ 2,081 $ 874 $ 737 Interest and other expense, net 100 101 Consolidated income before income tax expense $ 774 $ 636 Geographic information presented below for the three and six months ended June 30, 2015 and 2014 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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net revenues by geographic region: North America $ 551 $ 471 $ 1,255 $ 1,035 Europe 388 395 852 856 Asia Pacific 105 104 215 190 Total consolidated net revenues $ 1,044 $ 970 $ 2,322 $ 2,081 The Company’s net revenues in the U.S. were 50% and 46% of consolidated net revenues for the three months ended June 30, 2015 and 2014 , respectively. The Company’s net revenues in the U.K. were 14% of consolidated net revenues for the three months ended both June 30, 2015 and 2014 . The Company’s net revenues in France were 10% and 16% of consolidated net revenues for the three months ended June 30, 2015 and 2014 , respectively. No other country’s net revenues exceeded 10% of consolidated net revenues. The Company’s net revenues in the U.S. were 52% and 47% of consolidated net revenues for the six months ended June 30, 2015 and 2014 , respectively. The Company’s net revenues in the U.K. were 13% and 14% of consolidated net revenues for the six months ended June 30, 2015 and 2014 , respectively. The Company’s net revenues in France were 8% and 15% of consolidated net revenues for the six months ended June 30, 2015 and 2014 , respectively. No other country’s net revenues exceeded 10% of consolidated net revenues. Net revenues by platform were as follows (amounts in millions): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net revenues by platform: Console $ 559 $ 479 $ 1,317 $ 1,134 Online 1 221 195 492 395 PC 149 182 263 281 Mobile and other 2 54 48 141 131 Total Activision Blizzard net revenues 983 904 2,213 1,941 Distribution 61 66 109 140 Total consolidated net revenues $ 1,044 $ 970 $ 2,322 $ 2,081 1 Revenues from online consist of revenues from all World of Warcraft products, including subscriptions, boxed products, expansion packs, licensing royalties, and value-added services. 2 Revenues from mobile and other include revenues from handheld, mobile and tablet 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 June 30, 2015 and December 31, 2014 were as follows (amounts in millions): At June 30, 2015 At December 31, 2014 Long-lived assets 1 by geographic region: North America $ 145 $ 122 Europe 26 29 Asia Pacific 8 6 Total long-lived assets by geographic region $ 179 $ 157 1 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company accounts for its provision for income taxes in accordance with ASC 740, Income Taxes , which requires an estimate of the annual effective tax rate for the full year to be applied to the 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 could fluctuate significantly from quarter to quarter based on recurring and nonrecurring factors including, but not limited to: variations in the estimated and actual level of pre-tax income or loss by jurisdiction; changes in the mix of income by tax jurisdiction (as taxes are levied at relatively lower statutory rates in foreign regions and relatively higher statutory rates in the U.S.); changes in enacted tax laws and regulations, rulings and interpretations thereof, including with respect to tax credits, state and local income taxes; developments in tax audits and other matters; and certain nondeductible expenses. 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 $70 million for the three months ended June 30, 2015 reflects an effective tax rate of 25% , which is higher than the effective tax rate of 22% for the three months ended June 30, 2014 . This increase is primarily due to an increase in the estimated annual effective tax rate due to the projected mix of earnings in different jurisdictions taxed at different rates. The income tax expense of $168 million for the six months ended June 30, 2015 reflects an effective tax rate of 22% , which is comparable to the effective tax rate of 22% for the six months ended June 30, 2014 . The effective tax rates of 25% and 22% for the three and six months ended June 30, 2015 , respectively, differed from the U.S. statutory rate of 35% , primarily due to the tax benefit from foreign earnings taxed at relatively lower statutory rates, recognition of California research and development credits, and the federal domestic production deductions, offset by increases to the Company’s reserve for uncertain tax positions. The overall effective income tax rate for the year could be different from the effective tax rate for the three and six months ended June 30, 2015 and will be dependent, in part, on our profitability for the remainder of the year, as well as the other factors described above. The Internal Revenue Service (“IRS”) is currently examining Activision Blizzard’s federal tax returns for the 2008 through 2011 tax years. During the three months ended June 30, 2015, the Company transitioned the review of its transfer pricing methodology from the advanced pricing agreement review process to the IRS examination team. Their review could result in a different allocation of profits and losses under the Company’s transfer pricing agreements. Such allocation could have a positive or negative impact on our provision for uncertain tax positions for the period in which such a determination is reached and the relevant periods thereafter. In addition, Vivendi Games’ tax return for the 2008 tax year is under examination by the Internal Revenue Service and several state taxing authorities. 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. The final resolution of the Company’s global tax disputes is uncertain. There is significant judgment required in the analysis of disputes, including the probability determination and estimation of the potential exposure. Based on current information, in the opinion of the Company’s management, the ultimate resolution of these matters are not expected to 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. In connection with the Purchase Transaction, we assumed certain tax attributes of New VH, generally consisting of New VH’s net operating loss (“NOL”) carryforwards of approximately $760 million , which represent a potential future tax benefit of approximately $266 million . The utilization of such NOL carryforwards will be subject to certain annual limitations and will begin to expire in 2021. The Company also obtained indemnification from Vivendi against losses attributable to 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 the benefit from these tax attributes did not meet the “more-likely-than-not” standard. For the six months ended June 30, 2015 , we utilized $194 million of the NOL, which resulted in a tax benefit of $68 million , and a corresponding reserve was established as the position did not meet the “more-likely-than-not” standard. As of June 30, 2015 , an indemnification asset of $136 million has been recorded in “Other Assets”, and, correspondingly, the same amount has been recorded as a reduction to the consideration paid for the shares repurchased in “Treasury Stock” (see Note 1 of the Notes to Condensed Consolidated Financial Statements for details about the share repurchase). |
Computation of Basic_Diluted Ea
Computation of Basic/Diluted Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic/Diluted Earnings Per Common Share | 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): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Consolidated net income $ 212 $ 204 $ 606 $ 497 Less: Distributed earnings to unvested stock-based awards that participate in earnings — — (4 ) (5 ) Less: Undistributed earnings allocated to unvested stock-based awards that participate in earnings (2 ) (4 ) (5 ) (8 ) Numerator for basic and diluted earnings per common share — income available to common shareholders $ 210 $ 200 $ 597 $ 484 Denominator: Denominator for basic earnings per common share - weighted-average common shares outstanding 727 716 725 712 Effect of potential dilutive common shares under the treasury stock method: Employee stock options and awards 8 9 9 11 Denominator for diluted earnings per common share - weighted-average common shares outstanding plus dilutive common shares under the treasury stock method 735 725 734 723 Basic earnings per common share $ 0.29 $ 0.28 $ 0.82 $ 0.68 Diluted earnings per common share $ 0.29 $ 0.28 $ 0.81 $ 0.67 Certain of our unvested restricted stock rights (including certain restricted stock units, restricted stock awards and performance shares) met the definition of participating securities based on their rights to dividends or dividend equivalents. Therefore, we are required to use the two-class method in our computation of basic and diluted earnings per common share. For the three and six months ended June 30, 2015, on a weighted-average basis, we had outstanding unvested restricted stock rights with respect to 9 million and 10 million shares of common stock, respectively, that are participating in earnings. For the three and six months ended June 30, 2014, on a weighted-average basis, we had outstanding unvested restricted stock rights with respect to 16 million shares of common stock that are participating in earnings. Certain of our employee-related restricted stock rights are contingently issuable upon the satisfaction of pre-defined performance measures. These shares are included in the weighted-average dilutive common shares only if the performance measures are met as of the end of the reporting period. Approximately 3 million shares are not included in the computation of diluted earnings per share for the three and six months ended June 30, 2015 as their respective performance measures had not yet been met. Approximately 3 million shares are not included in the computation of diluted earnings per share for the three and six months ended June 30, 2014 as their respective performance measures had not yet been met. Potential common shares are not included in the denominator of the diluted earnings per common share calculation when the inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded. Therefore, options to acquire 1 million and 6 million shares of common stock were not included in the calculation of diluted earnings per common share for the three and six months ended June 30, 2015, respectively, and options to acquire 2 million and 3 million shares of common stock were not included in the calculation of diluted earnings per common share for the three and six months ended June 30, 2014, respectively, as the effect of their inclusion would be anti-dilutive. |
Capital Transactions
Capital Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Capital Transactions | Capital Transactions Repurchase Program On February 3, 2015, our Board of Directors authorized a stock repurchase program under which we may repurchase up to $750 million of our common stock during the two-year period from February 9, 2015 through February 8, 2017. As of June 30, 2015 , we have not repurchased any shares under this program. Dividends On February 3, 2015, our Board of Directors declared a cash dividend of $0.23 per common share, payable on May 13, 2015, to shareholders of record at the close of business on March 30, 2015. On May 13, 2015, we made an aggregate cash dividend payment of $167 million to such shareholders, and on May 29, 2015, we made related dividend equivalent payments of $3 million to certain holders of restricted stock rights. On February 6, 2014, our Board of Directors declared a cash dividend of $0.20 per common share, payable on May 14, 2014, to shareholders of record at the close of business on March 19, 2014. On May 14, 2014, we made an aggregate cash dividend payment of $143 million to such shareholders, and on May 30, 2014, we made related dividend equivalent payments of $4 million to certain holders of restricted stock rights. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings We are subject to various legal proceedings and claims. SEC regulations govern disclosure of legal proceedings in periodic reports and 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 of 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, profitability, cash flows or liquidity. Purchase Transaction Matters In prior periods, the Company reported on litigation related to the Purchase Transaction. During the period ended June 30, 2015, the cases were resolved and dismissed with prejudice. As part of the resolution of the claims, we received a settlement payment of $202 million in July 2015 from Vivendi, ASAC, and our insurers. We recorded the settlement within “Shareholders’ equity” with the receivable in “Other current assets” in our condensed consolidated balance sheet as of June 30, 2015. Other Matters 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 | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transactions with Vivendi and Its Affiliates As part of the Business Combination in 2008, 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 them. We are also party to a number of agreements with subsidiaries and other affiliates of Vivendi, including music licensing and distribution arrangements and promotional arrangements, 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 consolidated financial statements as a whole. As discussed in Note 1 of the Notes to Condensed Consolidated Financial Statements, on May 28, 2014 Vivendi sold 41 million shares, reducing its ownership interest below 10%, and is no longer considered a related party. Transactions with ASAC’s Affiliates Pursuant to the Stock Purchase Agreement, the Company and each of Mr. Kotick, the Company’s Chief Executive Officer, and Mr. Kelly, the Company’s Chairman of the board of directors, entered into waiver and acknowledgment letters (together, the “Waivers”), which provide, among other things, (i) that the Purchase Transaction, Private Sale, any public offerings by Vivendi and restructurings by Vivendi and its subsidiaries contemplated by the Stock Purchase Agreement and other transaction documents, shall not (or shall be deemed not to) constitute a “change in control” (or similar term) under their respective employment arrangements, including their employment agreements with the Company, the Company’s 2008 Incentive Plan or any award agreements in respect of awards granted thereunder, or any Other Benefit Plans and Arrangements (as defined in the Waivers), (ii) (A) that the shares of our common stock acquired by ASAC and held or controlled by the ASAC Investors (as defined in the Waivers) in connection with the Transactions (as defined in the Waivers) will not be included in or count toward, (B) that the ASAC Investors will not be deemed to be a group for purposes of, and (C) any changes in the composition in the Board of Directors of the Company, in connection with or during the one-year period following the consummation of the Transactions will not contribute towards, a determination that a “change in control” or similar term has occurred with respect to Messrs. Kotick and Kelly’s employment arrangements with the Company, and (iii) for the waiver by Messrs. Kotick and Kelly of their rights to change in control payments or benefits under their employment agreements with the Company, the Company’s 2008 Incentive Plan or any award agreements in respect of awards granted thereunder, and any Other Benefit Plans and Arrangements (in each case, with respect to all current and future grants, awards, benefits or entitlements) in connection with or as a consequence of the Transactions. Also pursuant to the Stock Purchase Agreement, on October 11, 2013, we, ASAC and, for the limited purposes set forth therein, Messrs. Kotick and Kelly entered into the Stockholders Agreement. The Stockholders Agreement contains various agreements among the parties regarding voting rights, transfer rights, and a standstill agreement, among other things. In connection with the settlement of the litigation related to the Purchase Transaction, the parties to the Stockholders Agreement amended that agreement on May 28, 2015. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Jun. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements Revenue recognition In May 2014, the FASB issued new accounting guidance related to revenue recognition. The new standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective beginning January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are evaluating the adoption method as well as the impact of this new accounting guidance on our financial statements. Stock-based compensation In June 2014, the FASB issued new guidance related to stock compensation. The new standard requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The new standard is effective for fiscal years beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. Early adoption is permitted. The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements. Consolidations In February 2015, the FASB issued new guidance related to consolidations. The new standard amends certain requirements for determining whether a variable interest entity must be consolidated. The new standard is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. We are evaluating the impact, if any, of adopting this new accounting guidance on our financial statements. Debt Issuance Costs In April 2015, the FASB issued new guidance related to the presentation of debt issuance costs in financial statements. The new standard requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2015. The new guidance will be applied retrospectively to each prior period presented. The adoption of this guidance will not have a material impact on our financial statements. Internal-Use Software In April 2015, the FASB issued new guidance related to internal-use software. The new standard relates to a customer’s accounting for fees paid in cloud computing arrangements. The amendment provides guidance for customers to determine whether such arrangements include software licenses. If a cloud arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new standard is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. We are evaluating the impact, if any, of adopting this new accounting guidance on our financial statements. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Our inventories, net consist of the following (amounts in millions): At June 30, 2015 At December 31, 2014 Finished goods $ 72 $ 112 Purchased parts and components 45 11 Inventories, net 117 123 |
Software Development and Intell
Software Development and Intellectual Property Licenses (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Software Development Costs and Intellectual Property Licenses | |
Summarizes the components of 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 June 30, 2015 At December 31, 2014 Internally-developed software costs $ 259 $ 262 Payments made to third-party software developers 159 210 Total software development costs $ 418 $ 472 Intellectual property licenses $ 26 $ 23 |
Amortization of software development costs and intellectual property licenses | Amortization of capitalized software development costs and intellectual property licenses was the following (amounts in millions): 23 For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Amortization of capitalized software development costs and intellectual property licenses $ 85 $ 50 $ 232 $ 108 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of finite lived and indefinite lived intangible assets by major class | Intangible assets, net consist of the following (amounts in millions): At June 30, 2015 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: License agreements and other 3 - 10 years $ 98 $ (92 ) $ 6 Internally-developed franchises 11 - 12 years 309 (289 ) 20 Total definite-lived intangible assets $ 407 $ (381 ) $ 26 Acquired indefinite-lived intangible assets: Activision trademark Indefinite 386 Acquired trade names Indefinite 47 Total indefinite-lived intangible assets $ 433 At December 31, 2014 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: License agreements and other 3 - 10 years $ 98 $ (92 ) $ 6 Internally-developed franchises 11 - 12 years 309 (286 ) 23 Total definite-lived intangible assets $ 407 $ (378 ) $ 29 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 | At June 30, 2015 , future amortization of definite-lived intangible assets is estimated as follows (amounts in millions): 2015 (remaining six months) $ 8 2016 8 2017 5 2018 3 2019 2 Total $ 26 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair value, assets measured on a recurring and/or non-recurring basis | 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 June 30, 2015 Using As of June 30, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance Sheet Classification Financial Assets: Recurring fair value measurements: Money market funds $ 4,274 $ 4,274 $ — $ — Cash and cash equivalents Foreign government treasury bills 34 34 — — Cash and cash equivalents U.S. treasuries and government agency securities 100 100 — — Short-term investments Foreign currency forward contracts designated as hedges 6 — 6 — Other current assets Auction rate securities (“ARS”) 9 — — 9 Long-term investments Total recurring fair value measurements $ 4,423 $ 4,408 $ 6 $ 9 Fair Value Measurements at December 31, 2014 Using As of December 31, 2014 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Balance Sheet Classification Recurring fair value measurements: Money market funds $ 4,475 $ 4,475 $ — $ — Cash and cash equivalents Foreign government treasury bills 40 40 — — Cash and cash equivalents ARS 9 — — 9 Long-term investments Total recurring fair value measurements $ 4,524 $ 4,515 $ — $ 9 |
Fair value, assets classified as level 3 reconciliation | 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 June 30, 2015 and 2014 , respectively: Level 3 ARS (a) Total financial assets at fair value Balance at December 31, 2014 $ 9 $ 9 Total unrealized gains included in other comprehensive income — — Balance at June 30, 2015 $ 9 $ 9 Level 3 ARS (a) Total financial assets at fair value Balance at December 31, 2013 $ 9 $ 9 Total unrealized gains included in other comprehensive income — — Balance at June 30, 2014 $ 9 $ 9 __________________________ (a) Fair value measurements have been estimated using an income-approach model. 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 June 30, 2015 , 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. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of debt | A summary of our debt is as follows (amounts in millions): At June 30, 2015 Gross Carrying Amount Unamortized Discount Net Carrying Amount Term Loan $ 1,869 $ (9 ) $ 1,860 2021 Notes 1,500 (22 ) 1,478 2023 Notes 750 (11 ) 739 Total long-term debt $ 4,119 $ (42 ) $ 4,077 At December 31, 2014 Gross Carrying Amount Unamortized Discount Net Carrying Amount Term Loan $ 2,119 $ (10 ) $ 2,109 2021 Notes 1,500 (23 ) 1,477 2023 Notes 750 (12 ) 738 Total long-term debt $ 4,369 $ (45 ) $ 4,324 |
Schedule of maturities of debt | As of June 30, 2015 , the scheduled maturities and contractual principal repayments of our debt for each of the five succeeding years are as follows (amounts in millions): For the year ending December 31, 2015 (remaining six months) $ — 2016 — 2017 — 2018 — 2019 — Thereafter 4,119 Total $ 4,119 |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The components of accumulated other comprehensive income (loss) at June 30, 2015 and 2014 , were as follows (amounts in millions): For the Six Months Ended June 30, 2015 Foreign currency translation adjustments Unrealized gain (loss) on forward contracts Unrealized gain (loss) on available-for-sale securities Total Balance at December 31, 2014 $ (304 ) $ — $ 1 $ (303 ) Other comprehensive income (loss) before reclassifications (245 ) 8 (3 ) (240 ) Amounts reclassified from accumulated other comprehensive income (loss) — (2 ) — (2 ) Balance at June 30, 2015 $ (549 ) $ 6 $ (2 ) $ (545 ) For the Six Months Ended June 30, 2014 Foreign currency translation adjustments Unrealized gain on forward contracts Unrealized gain on available-for-sale securities Total Balance at December 31, 2013 $ 67 $ — $ 1 $ 68 Other comprehensive income (loss) before reclassifications (24 ) — — (24 ) Balance at June 30, 2014 $ 43 $ — $ 1 $ 44 |
Operating Segments and Geogra30
Operating Segments and Geographic Region (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of 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 | 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 six months ended June 30, 2015 and 2014 are presented below (amounts in millions): Three Months Ended June 30, 2015 2014 2015 2014 Net revenues Income (loss) from operations before income tax expense Activision $ 313 $ 252 $ 57 $ (31 ) Blizzard 385 340 117 145 Distribution 61 66 (1 ) (1 ) Operating segments total 759 658 173 113 Reconciliation to consolidated net revenues / consolidated income before income tax expense: Net effect from deferral of net revenues and related cost of sales 285 312 181 220 Stock-based compensation expense — — (21 ) (22 ) Amortization of intangible assets — — (1 ) (1 ) Consolidated net revenues / operating income $ 1,044 $ 970 $ 332 $ 310 Interest and other expense, net 50 50 Consolidated income before income tax expense $ 282 $ 260 Six Months Ended June 30, 2015 2014 2015 2014 Net revenues Income (loss) from operations before income tax expense Activision $ 616 $ 489 $ 121 $ (29 ) Blizzard 737 801 256 383 Distribution 109 140 (1 ) (1 ) Operating segments total 1,462 1,430 376 353 Reconciliation to consolidated net revenues / consolidated income before income tax expense: Net effect from deferral of net revenues and related cost of sales 860 651 545 440 Stock-based compensation expense — — (44 ) (53 ) Amortization of intangible assets — — (3 ) (3 ) Consolidated net revenues / operating income $ 2,322 $ 2,081 $ 874 $ 737 Interest and other expense, net 100 101 Consolidated income before income tax expense $ 774 $ 636 |
Schedule of net revenues from external customers by geographic region | Geographic information presented below for the three and six months ended June 30, 2015 and 2014 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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net revenues by geographic region: North America $ 551 $ 471 $ 1,255 $ 1,035 Europe 388 395 852 856 Asia Pacific 105 104 215 190 Total consolidated net revenues $ 1,044 $ 970 $ 2,322 $ 2,081 |
Schedule of net revenues by platform | Net revenues by platform were as follows (amounts in millions): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net revenues by platform: Console $ 559 $ 479 $ 1,317 $ 1,134 Online 1 221 195 492 395 PC 149 182 263 281 Mobile and other 2 54 48 141 131 Total Activision Blizzard net revenues 983 904 2,213 1,941 Distribution 61 66 109 140 Total consolidated net revenues $ 1,044 $ 970 $ 2,322 $ 2,081 1 Revenues from online consist of revenues from all World of Warcraft products, including subscriptions, boxed products, expansion packs, licensing royalties, and value-added services. 2 Revenues from mobile and other include revenues from handheld, mobile and tablet 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 | Long-lived assets by geographic region at June 30, 2015 and December 31, 2014 were as follows (amounts in millions): At June 30, 2015 At December 31, 2014 Long-lived assets 1 by geographic region: North America $ 145 $ 122 Europe 26 29 Asia Pacific 8 6 Total long-lived assets by geographic region $ 179 $ 157 1 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. |
Computation of Basic_Diluted 31
Computation of Basic/Diluted Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of computation of earnings per share | The following table sets forth the computation of basic and diluted earnings per common share (amounts in millions, except per share data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Consolidated net income $ 212 $ 204 $ 606 $ 497 Less: Distributed earnings to unvested stock-based awards that participate in earnings — — (4 ) (5 ) Less: Undistributed earnings allocated to unvested stock-based awards that participate in earnings (2 ) (4 ) (5 ) (8 ) Numerator for basic and diluted earnings per common share — income available to common shareholders $ 210 $ 200 $ 597 $ 484 Denominator: Denominator for basic earnings per common share - weighted-average common shares outstanding 727 716 725 712 Effect of potential dilutive common shares under the treasury stock method: Employee stock options and awards 8 9 9 11 Denominator for diluted earnings per common share - weighted-average common shares outstanding plus dilutive common shares under the treasury stock method 735 725 734 723 Basic earnings per common share $ 0.29 $ 0.28 $ 0.82 $ 0.68 Diluted earnings per common share $ 0.29 $ 0.28 $ 0.81 $ 0.67 |
Description of Business and B32
Description of Business and Basis of Consolidation and Presentation (Details) $ / shares in Units, shares in Millions, $ in Millions | May. 28, 2014USD ($)shares | Oct. 11, 2013USD ($)$ / sharesshares | Jun. 30, 2015segmentshares |
Stock Purchase Agreement [Line Items] | |||
Treasury Stock, Acquired, Shares | 429 | ||
Common Stock Outstanding | 729 | ||
Number of Operating Segments | segment | 3 | ||
Activision Blizzard | |||
Stock Purchase Agreement [Line Items] | |||
Treasury Stock, Acquired, Shares | 429 | ||
Treasury Stock, Acquired, Value | $ | $ 5,830 | ||
Treasury Stock, Price Per Share | $ / shares | $ 13.60 | ||
Public | |||
Stock Purchase Agreement [Line Items] | |||
Percent of Activision Blizzard common stock owned by a specific shareholder | 70.00% | ||
Vivendi | |||
Stock Purchase Agreement [Line Items] | |||
Stock Sold by Vivendi, Shares | 41 | ||
Stock Sold by Vivendi, Percent of Holdings | 50.00% | ||
Stock Sold By Vivendi, Value of Proceeds | $ | $ 850 | ||
Shares of Activision Blizzard common stock owned by a specific shareholder | 41 | ||
Percent of Activision Blizzard common stock owned by a specific shareholder | 6.00% | ||
ASAC | |||
Stock Purchase Agreement [Line Items] | |||
Stock Purchased By ASAC, Shares | 172 | ||
Stock Purchased By ASAC, Value | $ | $ 2,340 | ||
Stock Purchased By ASAC, Price Per Share | $ / shares | $ 13.60 | ||
Shares of Activision Blizzard common stock owned by a specific shareholder | 172 | ||
Percent of Activision Blizzard common stock owned by a specific shareholder | 24.00% |
Description of Business and B33
Description of Business and Basis of Consolidation and Presentation Capital Expenditures Incurred But Not Yet Paid (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Supplemental Cash Flow Information: Non-cash investing activities [Abstract] | ||
Capital expenditures | $ 18 | $ 8 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 72 | $ 112 |
Purchased parts and components | 45 | 11 |
Inventories, net | 117 | 123 |
Inventory reserves | $ 52 | $ 52 |
Software Development Costs an35
Software Development Costs and Intellectual Property Licenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Software development and intellectual property licenses: | |||||
Internally-developed software costs | $ 259 | $ 259 | $ 262 | ||
Payments made to third-party software developers | 159 | 159 | 210 | ||
Total software development costs | 418 | 418 | 472 | ||
Intellectual property licenses | 26 | 26 | $ 23 | ||
Amortization: | |||||
Amortization of capitalized software development costs and intellectual property licenses | $ 85 | $ 50 | $ 232 | $ 108 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Amortization expense disclosure | |||||
Amortization expense | $ 2 | $ 1 | $ 3 | $ 3 | |
Indefinite Lived Intangible Assets | |||||
Net carrying amount, indefinite-lived intangible assets | 433 | 433 | $ 433 | ||
Finite-Lived Intangible Assets | |||||
Gross carrying amount, definite-lived intangible assets | 407 | 407 | 407 | ||
Accumulated amortization, definite-lived intangible assets | (381) | (381) | (378) | ||
Net carrying amount, definite-lived intangible assets | 26 | 26 | 29 | ||
Activision trademark | |||||
Indefinite Lived Intangible Assets | |||||
Net carrying amount, indefinite-lived intangible assets | 386 | 386 | 386 | ||
License agreements and other | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount, definite-lived intangible assets | 98 | 98 | 98 | ||
Accumulated amortization, definite-lived intangible assets | (92) | (92) | (92) | ||
Net carrying amount, definite-lived intangible assets | 6 | $ 6 | $ 6 | ||
License agreements and other | Maximum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 10 years | 10 years | |||
License agreements and other | Minimum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 3 years | 3 years | |||
Internally developed franchises | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount, definite-lived intangible assets | 309 | $ 309 | $ 309 | ||
Accumulated amortization, definite-lived intangible assets | (289) | (289) | (286) | ||
Net carrying amount, definite-lived intangible assets | 20 | $ 20 | $ 23 | ||
Internally developed franchises | Maximum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 12 years | 12 years | |||
Internally developed franchises | Minimum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 11 years | 11 years | |||
Acquired trade names | |||||
Indefinite Lived Intangible Assets | |||||
Net carrying amount, indefinite-lived intangible assets | $ 47 | $ 47 | $ 47 |
Intangible Assets, Net Intangib
Intangible Assets, Net Intangible Assets, Net (Details 2) (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Definite-lived intangible assets, future amortization expense disclosure | ||
2015 (remaining six months) | $ 8 | |
2,016 | 8 | |
2,017 | 5 | |
2,018 | 3 | |
2,019 | 2 | |
Net carrying amount, definite-lived intangible assets | $ 26 | $ 29 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | $ 4,423 | $ 4,524 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 4,274 | 4,475 |
Foreign government treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 34 | 40 |
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 | 100 | |
Foreign currency forward contracts designated as hedges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 6 | |
ARS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 9 | 9 |
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 | 4,408 | 4,515 |
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 | 4,274 | 4,475 |
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 | 34 | 40 |
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 | 100 | |
Fair value measurements using quoted prices in active markets for identical assets (Level 1) | Foreign currency forward contracts designated as hedges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 0 | |
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 | 6 | 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 | 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 | |
Fair value measurements using significant other observable inputs (Level 2) | Foreign currency forward contracts designated as hedges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 6 | |
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 | 9 |
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 | 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 | |
Fair value measurements using significant unobservable inputs (Level 3) | Foreign currency forward contracts designated as hedges | ||
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 | $ 9 |
Fair Value Measurements (Deta39
Fair Value Measurements (Details 2) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Fair Value Assets Measured on Recurring Basis Unobservable Input Reconciliation Asset | ||
Level 3 measurement reconciliation, recurring basis, fair value assets beginning balance | $ 9 | $ 9 |
Total unrealized gains included in other comprehensive income | 0 | 0 |
Level 3 measurement reconciliation, recurring basis, fair value assets ending balance | $ 9 | 9 |
Maximum | ||
Fair Value Assets Measured on Recurring Basis Unobservable Input Reconciliation Asset | ||
Percentage of assets measured on recurring basis at fair value using significant unobservable inputs | 1.00% | |
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 | $ 9 | 9 |
Total unrealized gains included in other comprehensive income | 0 | 0 |
Level 3 measurement reconciliation, recurring basis, fair value assets ending balance | $ 9 | $ 9 |
Fair Value Measurements (Deta40
Fair Value Measurements (Details 3) - Foreign exchange contract | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($)derivative | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)derivative | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($)derivative | |
Derivatives, Fair Value [Line Items] | |||||
Maximum length of time over which our foreign currency forward contracts mature | 1 year | ||||
Not Designated as Hedges | |||||
Derivatives, Fair Value [Line Items] | |||||
Number of derivatives | derivative | 0 | 0 | 1 | ||
Notional amount of foreign currency derivatives | $ 11,000,000 | ||||
Fair Value, Assets, Not Designated As Hedges | $ 0 | ||||
Pre-tax net gain (loss) on foreign currency contracts | $ 0 | $ 0 | $ 0 | $ 0 | |
Designated as Hedges | |||||
Derivatives, Fair Value [Line Items] | |||||
Number of derivatives | derivative | 0 | ||||
Notional amount of foreign currency derivatives | 150,000,000 | 119,000,000 | 150,000,000 | 119,000,000 | |
Net unrealized gains to be reclassified into earnings within the next twelve months | 6,000,000 | ||||
Ineffective portion relating to these hedges | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Deta41
Fair Value Measurements (Details 4) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment charges - nonrecurring | $ 0 | $ 0 | $ 0 | $ 0 |
Debt - Credit Facilities (Detai
Debt - Credit Facilities (Details) - USD ($) | Feb. 11, 2015 | Feb. 11, 2014 | Oct. 11, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Line of Credit Facility [Line Items] | ||||||
Repayments of long-term debt | $ 250,000,000 | $ 375,000,000 | ||||
Term Loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 2,500,000,000 | |||||
LIBOR floor rate | 0.75% | |||||
Required quarterly payments, percentage of original principal | 0.25% | |||||
Repayments of long-term debt | $ 250,000,000 | $ 375,000,000 | ||||
Revolver | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 250,000,000 | |||||
Amount of letters of credit that can be issued under the Revolver | $ 50,000,000 | |||||
Amount drawn on the Revolver | 0 | $ 0 | ||||
Letters of credit issued under the revolver | $ 0 | $ 0 | ||||
Percentage of Revolver outstanding which triggers certain financial covenants | 15.00% | |||||
Credit Facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable rate at end of period | 3.25% | |||||
Percentage of consolidated total assets pledged as collateral | 69.00% | |||||
Prime Rate | Credit Facilities | Base Rate Loans | ||||||
Line of Credit Facility [Line Items] | ||||||
Description of variable rate basis | Prime rate as designated by the administrative agent | |||||
Federal Funds Effective Rate | Credit Facilities | Base Rate Loans | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable margin (as a percent) | 0.50% | |||||
Description of variable rate basis | Federal funds rate | |||||
LIBOR Rate | Credit Facilities | Base Rate Loans | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable margin (as a percent) | 1.00% | |||||
Description of variable rate basis | LIBOR rate for one month | |||||
LIBOR Rate | Credit Facilities | LIBOR Rate Loans | ||||||
Line of Credit Facility [Line Items] | ||||||
Description of variable rate basis | LIBOR |
Debt - Unsecured Senior Notes a
Debt - Unsecured Senior Notes and Deferred Financing Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Sep. 19, 2013 | |
Debt Instrument [Line Items] | ||||||
Gross carrying amount | $ 4,119 | $ 4,119 | $ 4,369 | |||
Maximum percentage of outstanding Notes that can be redeemed with net cash proceeds from one or more qualified equity offerings | 35.00% | 35.00% | ||||
Percentage of principal repayable to option holders upon certain criteria | 101.00% | 101.00% | ||||
Interest expense | $ 48 | $ 50 | $ 97 | $ 101 | ||
Amortization of the debt discount | 2 | 2 | 3 | 3 | ||
Amortization expense of deferred financing costs | 0 | 0 | 0 | 0 | ||
Revolver | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee, amount | 0 | $ 0 | 0 | $ 0 | ||
2021 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Gross carrying amount | 1,500 | 1,500 | 1,500 | $ 1,500 | ||
Interest rate | 5.625% | |||||
2023 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Gross carrying amount | 750 | 750 | 750 | $ 750 | ||
Interest rate | 6.125% | |||||
Unsecured Notes | ||||||
Debt Instrument [Line Items] | ||||||
Interest payable | 38 | 38 | 38 | |||
Fair value measurements using significant other observable inputs (Level 2) | 2021 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Fair value of Notes | 1,575 | 1,575 | 1,586 | |||
Fair value measurements using significant other observable inputs (Level 2) | 2023 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Fair value of Notes | $ 814 | $ 814 | $ 810 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 19, 2013 |
Debt Instrument [Line Items] | |||
Gross Carrying Amount | $ 4,119 | $ 4,369 | |
Unamortized Discount | (42) | (45) | |
Net Carrying Amount | 4,077 | 4,324 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Gross Carrying Amount | 1,869 | 2,119 | |
Unamortized Discount | (9) | (10) | |
Net Carrying Amount | 1,860 | 2,109 | |
2021 Notes | |||
Debt Instrument [Line Items] | |||
Gross Carrying Amount | 1,500 | 1,500 | $ 1,500 |
Unamortized Discount | (22) | (23) | |
Net Carrying Amount | 1,478 | 1,477 | |
2023 Notes | |||
Debt Instrument [Line Items] | |||
Gross Carrying Amount | 750 | 750 | $ 750 |
Unamortized Discount | (11) | (12) | |
Net Carrying Amount | $ 739 | $ 738 |
Debt - Schedule of Maturities (
Debt - Schedule of Maturities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Maturities of Long-term Debt [Abstract] | ||
2015 (remaining six months) | $ 0 | |
2,016 | 0 | |
2,017 | 0 | |
2,018 | 0 | |
2,019 | 0 | |
Thereafter | 4,119 | |
Total | $ 4,119 | $ 4,369 |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive income (loss), balance at beginning of period | $ (303) | $ 68 |
Other comprehensive income (loss) before reclassifications | (240) | (24) |
Amounts reclassified from accumulated other comprehensive income (loss) | (2) | |
Accumulated other comprehensive income (loss), balance at end of period | (545) | 44 |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive income (loss), balance at beginning of period | (304) | 67 |
Other comprehensive income (loss) before reclassifications | (245) | (24) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | |
Accumulated other comprehensive income (loss), balance at end of period | (549) | 43 |
Unrealized gain (loss) on forward contracts | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive income (loss), balance at beginning of period | 0 | 0 |
Other comprehensive income (loss) before reclassifications | 8 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | (2) | |
Accumulated other comprehensive income (loss), balance at end of period | 6 | 0 |
Unrealized gain (loss) on available-for-sale securities | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive income (loss), balance at beginning of period | 1 | 1 |
Other comprehensive income (loss) before reclassifications | (3) | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | |
Accumulated other comprehensive income (loss), balance at end of period | $ (2) | $ 1 |
Operating Segments and Geogra47
Operating Segments and Geographic Region (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting [Abstract] | |||||
Number of Operating Segments | segment | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Net revenues | $ 1,044 | $ 970 | $ 2,322 | $ 2,081 | |
Income from operations | 332 | 310 | 874 | 737 | |
Amortization of intangible assets | (2) | (1) | (3) | (3) | |
Interest and other expense, net | 50 | 50 | 100 | 101 | |
Income before income tax expense | 282 | 260 | 774 | 636 | |
Long-lived assets | 179 | 179 | $ 157 | ||
Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 759 | 658 | 1,462 | 1,430 | |
Income from operations | 173 | 113 | 376 | 353 | |
Long-lived assets | 179 | 179 | 157 | ||
Operating segments | Total platform | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 983 | 904 | 2,213 | 1,941 | |
Operating segments | Console | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 559 | 479 | 1,317 | 1,134 | |
Operating segments | Online | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 221 | 195 | 492 | 395 | |
Operating segments | PC | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 149 | 182 | 263 | 281 | |
Operating segments | Mobile and Other | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 54 | 48 | 141 | 131 | |
Operating segments | North America | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 551 | 471 | 1,255 | 1,035 | |
Long-lived assets | 145 | 145 | 122 | ||
Operating segments | Europe | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 388 | 395 | 852 | 856 | |
Long-lived assets | 26 | 26 | 29 | ||
Operating segments | Asia Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 105 | 104 | 215 | 190 | |
Long-lived assets | 8 | 8 | $ 6 | ||
Operating segments | Activision | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 313 | 252 | 616 | 489 | |
Income from operations | 57 | (31) | 121 | (29) | |
Operating segments | Blizzard | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 385 | 340 | 737 | 801 | |
Income from operations | 117 | 145 | 256 | 383 | |
Operating segments | Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 61 | 66 | 109 | 140 | |
Income from operations | (1) | (1) | (1) | (1) | |
Reconciliation items | |||||
Segment Reporting Information [Line Items] | |||||
Net effect from changes in the deferral of net revenues | 285 | 312 | 860 | 651 | |
Net effect from changes in the deferral of net revenues and related cost of sales | 181 | 220 | 545 | 440 | |
Stock-based compensation expense | (21) | (22) | (44) | (53) | |
Amortization of intangible assets | $ (1) | $ (1) | $ (3) | $ (3) | |
Geographic Concentration Risk | Revenues | US | |||||
Segment Reporting Information [Line Items] | |||||
Revenues as a percentage of consolidated net revenues | 50.00% | 46.00% | 52.00% | 47.00% | |
Geographic Concentration Risk | Revenues | UK | |||||
Segment Reporting Information [Line Items] | |||||
Revenues as a percentage of consolidated net revenues | 14.00% | 14.00% | 13.00% | 14.00% | |
Geographic Concentration Risk | Revenues | France | |||||
Segment Reporting Information [Line Items] | |||||
Revenues as a percentage of consolidated net revenues | 10.00% | 16.00% | 8.00% | 15.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 70 | $ 56 | $ 168 | $ 139 |
Effective tax rate (in percent) | 25.00% | 22.00% | 22.00% | 22.00% |
Statutory income tax rate (in percent) | 35.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Millions | Oct. 11, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Income Tax [Line Items] | |||||
Potential Future Tax Benefit | $ (70) | $ (56) | $ (168) | $ (139) | |
Adjustments To Treasury Shares Related To Repurchases Of Stock | 68 | ||||
New VH | |||||
Income Tax [Line Items] | |||||
Net Operating Loss Carryforwards | $ 760 | ||||
Net Operating Loss Carryforward Indemnification Amount Obtained | 200 | ||||
Net operating loss utilized - New VH NOL | 194 | ||||
Indemnification asset recorded in other assets | 136 | 136 | |||
Indemnification asset recorded in treasury stock | $ 136 | $ 136 | |||
Expected | New VH | |||||
Income Tax [Line Items] | |||||
Potential Future Tax Benefit | $ 266 |
Computation of Basic_Diluted 50
Computation of Basic/Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Numerator: | ||||
Consolidated net income | $ 212 | $ 204 | $ 606 | $ 497 |
Less: Distributed earnings to unvested stock-based awards that participate in earnings | 0 | 0 | (4) | (5) |
Less: Undistributed earnings allocated to unvested stock-based awards that participate in earnings | (2) | (4) | (5) | (8) |
Numerator for basic and diluted earnings per common share — income available to common shareholders | $ 210 | $ 200 | $ 597 | $ 484 |
Denominator: | ||||
Denominator for basic earnings per common share - weighted-average common shares outstanding (in shares) | 727 | 716 | 725 | 712 |
Effect of potential dilutive common shares under the treasury stock method: | ||||
Employee stock options and awards (in shares) | 8 | 9 | 9 | 11 |
Denominator for diluted earnings per common share - weighted-average common shares outstanding plus dilutive common shares under treasury stock method (in shares) | 735 | 725 | 734 | 723 |
Basic earnings per common share (in dollars per share) | $ 0.29 | $ 0.28 | $ 0.82 | $ 0.68 |
Diluted earnings per common share (in dollars per share) | $ 0.29 | $ 0.28 | $ 0.81 | $ 0.67 |
Common stock weighted-average shares, unvested restricted stock rights (in shares) | 9 | 16 | 10 | 16 |
Performance shares not included in the computation of EPS | 3 | 3 | 3 | 3 |
Options | ||||
Antidilutive [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 1 | 2 | 6 | 3 |
Capital Transactions (Details)
Capital Transactions (Details) - USD ($) | Oct. 11, 2013 | Jun. 30, 2015 | Feb. 03, 2015 |
Share Repurchase Program [Line Items] | |||
Shares of common stock repurchased | 429,000,000 | ||
2015 Share Repurchase Program | |||
Share Repurchase Program [Line Items] | |||
Stock repurchase program, dollar amount authorized | $ 750,000,000 | ||
Shares of common stock repurchased | 0 | ||
Cost of common stock repurchased under the stock repurchase program | $ 0 |
Capital Transactions (Details 2
Capital Transactions (Details 2) - USD ($) $ / shares in Units, $ in Millions | May. 29, 2015 | May. 13, 2015 | May. 30, 2014 | May. 14, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Dividends | ||||||||
Dividends per common share (in dollars per share) | $ 0 | $ 0 | $ 0.23 | $ 0.20 | ||||
Dividends paid | $ 167 | $ 143 | $ 170 | $ 147 | ||||
Dividend equivalent payment | $ 3 | $ 4 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
Jul. 31, 2015 | Jun. 30, 2015 | |
Loss Contingencies [Line Items] | ||
Shareholder lawsuit settlement in connection with the Purchase Transaction (see Note 12) | $ 202 | |
PacchiaCase [Member] | Future Payment [Member] | ||
Loss Contingencies [Line Items] | ||
Shareholder lawsuit settlement in connection with the Purchase Transaction (see Note 12) | 202 | |
Other Current Assets [Member] | PacchiaCase [Member] | Future Payment [Member] | ||
Loss Contingencies [Line Items] | ||
Payments from settlement fund | $ 202 | |
Subsequent Event [Member] | PacchiaCase [Member] | ||
Loss Contingencies [Line Items] | ||
Payments from settlement fund | $ 202 |
Related Party Transactions (Det
Related Party Transactions (Details) shares in Millions | May. 28, 2014shares |
Vivendi Games | |
Stock Purchase Agreement [Line Items] | |
Stock Sold by Vivendi, Shares | 41 |