Summary Analysis –
Activision Blizzard, Inc.
A financial analysis of the developer, publisher, and
distributor of video games for the years 2006-2010
5/7/2012
Northeastern State University – Broken Arrow
Financial Statement Analysis
John Henry Engelman
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Executive Summary
This summary analysis was prepared by me, John Engelman, for my Financial Statement Analysis class
taught by Dr. Jeb Briley. For this assignment, I was tasked with researching a publicly traded company of
my choice and analyzing their most recent financial statements and other related information so I could
use the analytical methods I learned in the class to form an opinion about their business. Video games
are a form of entertainment that I’m passionate about and it’s a business I’d like to learn more about
therefore I chose Activision Blizzard, a worldwide developer, publisher, and distributor of video games.
Through my research of their financials, important ratios, required regulatory documents, and
information relating to their competitors and industry I learned a great deal about them. Throughout
every one of their financial statements, one thing was very apparent: the contrast between the years
2006-2007 and 2008-2010. In 2008, Activision merged with Vivendi Games. The merger was treated as a
reverse acquisition meaning the smaller company (Vivendi Games) took over the larger company and
the previous year’s financials were those of the smaller company, which created an obvious distortion of
the financial statements.
All of Activision Blizzard’s financial statements and the ratio reports came from Capital IQ’s Compustat
program. Another major source of information for this summary analysis came from annual reports that
the Securities Exchange Commission requires publicly traded companies to release: 10-Ks. Because the
most recent information from Compustat was for the years 2006-2010, that’s the years I covered.
However, the 10-K for the year ending December 31, 2011 is available and I occasionally referenced it.
Activision Blizzard – Background Information
Activision Blizzard is one of the world’s largest video game publishers, releasing games for personal
computers, home consoles, handheld gaming systems, and mobile platforms such as smartphones. The
company is the result of a 2008 merger between two separate entities: Activision and Vivendi Games.
Activision was originally incorporated in California in 1979. At that time, the Atari 2600 was the leading
video game platform and games released for it were solely developed by Atari. A problem concerning
Atari’s video game developers was the lack of recognition they received for their work. Fed up with their
situation, a handful of Atari developers formed Activision and accordingly, the first third-party developer
of video games. (Classic Gaming Expo…) Since the company’s founding in 1979, Activision has grown to
be one of the world’s largest publishers of video games as well as a source of some of the industry’s
most recognizable franchises such as the Call of Duty and Guitar Hero series of games. The company is
also very astute at obtaining the rights to produce video games based on well-known properties such as
James Bond, Transformers, and Marvel Entertainment’s stable of superheroes.
Vivendi Games was (and now Activision Blizzard is) a large subsidiary of the French mass media and
telecommunications company Vivendi. Even though the merger was between Activision and Vivendi
Games, Blizzard Entertainment (a developer within Vivendi Games) is the partial namesake of the
company, and for good reason.
Page 2 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Activision Blizzard – Background Information - Continued
Established in 1994, Blizzard Entertainment is known for developing some of the world’s most popular
video games. The company’s history is full of revered video games, but these days it’s known for
Warcraft, StarCraft, and Diablo. Blizzard currently operates World of Warcraft, a massively multiplayer
online role-playing game that is the world’s largest, with 12 million subscribers as of October 7, 2010.
(World of Warcraft…) StarCraft and Diablo also have worldwide appeal. StarCraft II: Wings of Liberty is
one of the company’s newer products and its brand of competitive multiplayer is so popular in South
Korea, it’s essentially its national pastime. (StarCraft II…)
Management’s Discussion and Analysis of Financial Conditions and
Results of Operations (See 10-K, Item 7, In Part)
Selected Highlights
In the Management’s Discussion and Analysis section of Activision Blizzard’s 10-K for the fiscal year
ended December 31, 2010, they break the company down into three operating segments: Activision
Publishing, Inc., Blizzard Entertainment, Inc., and Activision Blizzard Distribution (a segment consisting of
European operations that provide warehousing, logistical, and sales distribution services to the company
as well as other third-party publishers). (2010 10-K, 39)
According to a bevy of qualified sources, Activision Blizzard was the #1 publisher of video games in North
America and Europe in 2010. Not only that, but Call of Duty: Black Ops was the best selling video game
of the year achieving more than $1 billion in retail sales worldwide. (2010 10-K, 41)
In their industry there’s a concentration of revenues associated with a small portion of titles, accordingly
62% of the company’s net revenues came from the Call of Duty and World of Warcraft franchises. (2010
10-K, 43) They believe this trend will continue in the future and they’re correct. Looking at their most
recent 10-K (for the year ended December 31, 2011), three key franchises make up 73% of the
company’s consolidated net revenues in 2011: Call of Duty, World of Warcraft, and Skylanders. (2011
10-K, 44) If the company doesn’t maintain a delicate balance of satisfying consumers with quality
products while not over saturating the market, this could be problematic.
As the industry integrates online functionality and interconnectivity more and more, the company is
beginning to emphasize the distribution of its products digitally. They stated that their revenues from
digital sales increased in 2010 compared to 2009, but they didn’t specify by how much. (2010 10-K, 42)
In the following year’s 10-K though, they stated that digital sales represented 32% of total revenues in
2010, and 34% in 2011 and they believed this would continue to be the case. (2011 10-K, 43)
Note: Item 7 of Activision Blizzard’s 2010 10-K is approximately 32 pages. This section of the 10-K has
insight from the management of the company and is frequently referenced in this summary analysis. I’d
suggest examining it before and after reading this summary analysis to get a solid understanding of the
company.
Page 3 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Vertical Common-Size Income Statement (Exhibit 1)
This financial statement shows that 2008 was a rough year for Activision Blizzard. The company’s
expenses were a larger portion of sales compared to the other years analyzed. Cost of goods sold was
48% of sales, administrative expense was 43% of sales, and depreciation, depletion, and amortization
was 13% of sales ultimately leaving the company with an operating profit that was -4% of sales. This was
also the only year that the company had a negative net income, -4% of sales. Then again, this was the
year of the merger.
In the past two years the company has improved their business, although they’re not reaching the highs
that Vivendi Games did in 2006 and 2007. Gross profit has risen 12% since 2008 and operating profit has
grown 22% since 2008 which is a positive indicator. These margins seem very good. 52% of sales was the
lowest gross profit ever was and it looks like they’ll hover around 60% of sales. It’s the same story with
their operating profit. The year of the merger was their worst-performing year but since then, it’s grown
and it looks like it could hit 20% of sales in 2011.
In each of the five years examined, the company’s special items were negative although it was only from
2008-2010 that these figures were a material portion of sales. After the merger, the company had
restructuring costs: $93 million in 2008 and $23 million in 2009 although there were no related costs in
2010. (2010 10-K, F-3)
The company received tax benefits in each year analyzed except for 2010, where their taxes were 2% of
sales. The benefit they received in 2006-2009 remained around 3% of sales. In 2008 and 2009 they
generated a negative pretax income but in 2009, their tax benefit reversed this situation and they
reported positive income before extraordinary items and discontinued operations.
Adjusted net income has went from -4% of sales in 2008 to 9% of sales in 2010. Like with the rest of this
financial statement, the company was at their peak in 2006 and 2007 with an adjusted net income of
14% of sales and 18% of sales respectively. Of course, it was actually a different company then and a
smaller one at that.
I was interested to see what the company’s net income was in 2011 and what portion of total sales it
would end up being although their financial statements weren’t available through Compustat. They
were available through their 10-K for the year ending December 31, 2011 though. Although they’re
probably slightly different from the financials found in Compustat, percentages remained the same: net
income was 2.6% and 9.4% of total sales for 2009 and 2010 respectively. In 2011 the company reported
net income of $1.085 billion and total net revenues of $4.755 billion, which after doing the simple math,
net income came out to be 23% of total sales. It really grew! (2011 10-K, F-3)
In general I noticed a few overall trends that affected nearly every one of the company’s line items.
Times were tough in 2008 thanks to the economic crisis that began in late 2007. The company’s costs
rose and their profits fell, culminating in a negative net income. They’ve been on the rebound since then
with shrinking expenses and rising profits. However, much of trends discussed can be the effect of the
2008 merger, especially the growth seen post-2008.
Page 4 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
EXHIBIT 1
VERTICAL COMMON-SIZE INCOME STATEMENT
Sales
Cost of Goods Sold
Gross Profit
Selling, General, &
Administrative Expense
Operating Income Before Deprec
Depreciation, Depletion, &
Amortization
Operating Profit
Interest Expense
Non-Operating Income/Expense
Special Items
Pretax Income
Total Income Taxes
Income Before Extraordinary
Items & Noncontrolling Interests
Noncontrolling Interest - Inc Acc
Income Before Extraordinary
Items & Discontinued Operations
Preferred Dividends
Available for Common
Savings Due to Common
Stock Equivalents
Adjusted Available for Common
Extraordinary Items
Discontinued Operations
Adjusted Net Income
Income to Company Incl. Extraordinary
Items & Disc Ops
Dec10
Dec09
Dec08
Dec07
Dec06
100.00%
100.00%
100.00%
100.00%
100.00%
36.11%
38.47%
48.05%
24.79%
31.58%
-----------------------------------------------------------------------------------------63.89%
61.53%
51.95%
72.21%
68.42%
34.43%
26.04%
42.90%
51.25%
51.33%
-----------------------------------------------------------------------------------------29.64%
25.50%
9.06%
20.96%
17.09%
11.69%
15.45%
12.72%
5.29%
4.63%
-----------------------------------------------------------------------------------------17.95%
10.05%
-3.67%
15.73%
12.46%
0.11%
0.09%
0.10%
0.21%
1.78%
0.63%
0.51%
1.62%
-0.15%
0.17%
-7.40%
-10.66%
-4.03%
0.06%
-0.43%
-----------------------------------------------------------------------------------------11.06%
-0.19%
-6.18%
15.43%
10.42%
1.66%
-2.83%
-2.64%
-2.61%
-3.27%
-----------------------------------------------------------------------------------------9.40%
2.64%
-----------------------------------------------------------------------------------------9.40%
2.64%
-3.54%
18.04%
13.69%
-----------------------------------------------------------------------------------------9.40%
2.64%
-3.54%
18.04%
13.69%
-0.09%
-0.02%
-----------------------------------------------------------------------------------------9.31%
2.62%
-3.54%
18.04%
13.69%
-----------------------------------------------------------------------------------------9.31%
2.62%
-3.54%
18.04%
13.69%
9.40%
2.64%
-
-
-
Page 5 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Horizontal Common-Size Statement of Income (Exhibit 2)
Looking at the horizontal common-size income statement for Activision Blizzard I’m a little overwhelmed
by the percent changes every line item has gone through from 2006-2010. Sales have more than
quadrupled since 2006. They slightly grew in 2007 (37%) but grew at a much quicker pace in 2008 and
2009 (160% and 123% respectively) before slowing down in 2010 with growth of only 17%.
Cost of goods sold follows a similar trend. It slightly rose from 2006-2007 (21%) and then shot up in the
following years. It peaked in 2009 when it was 512% higher compared to 2006. In 2010 it dropped 12%.
Gross profit follows a similar course, quadrupling in the years analyzed. This increase from 2008 on is
probably due to the merger of Vivendi Games and Activision that created Activision Blizzard. It’s
disclosed in the company’s 10-K that the merger was treated as a reverse acquisition and as such the
financial statements prior to 2008 are Vivendi’s.
Selling, general, and administrative expenses have grown 300% since 2006, but after 2008, they grew at
a slower pace and even decreased in 2010 (4%). Management explained this decrease in the
Management’s Discussion and Analysis section of their 10-K as a result of favorable foreign exchange
effects and lower stock-based compensation expense. (2010 10-K, 59-60) Depreciation, depletion, and
amortization in 2010 were 1,104% higher than it was in 2006, down from a peak of 1,404% in 2009.
Coupled with the beneficial tax effect the company saw from 2006-2009, I wonder if they sped up their
depreciation for tax purposes.
Intangibles grew to $9m from 2007-2008 (nearly 3,000%) and has since dropped by $1.2m. Also in their
10-K, they specifically bring up the impairment of intangible assets on page 60. Special items represent a
large expense for the company, coming in as big losses from 2008 on (-$122m to -$456m). In fact in
2009 special items were 10,400% higher than they were in 2006. I believe this expense is where the
impairment of intangibles appeared.
The company received beneficial tax effects every year except for 2010. This benefit stems from the
company’s expense related to the impairment of its intangible assets according to page 61 of the 10-K.
Plus in 2008 and 2009, the company generated a loss from operations. As mentioned in my analysis of
the vertical common-size income statement, this benefit actually reversed the company’s negative
pretax income in 2009.
As was the case with the vertical common-size analysis of the income statement, Activision Blizzard had
a definite trend across the five years analyzed. They grew their adjusted net income from 2006 – 2007
before recording a loss in 2008. Afterwards, they continued the growth that was evidenced by nearly
every line item. In the years analyzed the company has two distinct periods: the pre-merger years of
2006 and 2007 and the post-merger years of 2008-2010. As I just stated, nearly every line item of the
income statement grew from 2008 on and I think a lot of this is attributable to the merger.
Page 6 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
EXHIBIT 2
HORIZONTAL COMMON-SIZE INCOME STATEMENT
Sales
Cost of Goods Sold
Gross Profit
Selling, General, &
Administrative Expense
Operating Income Before Deprec.
Depreciation, Depletion, &
Amortization
Operating Profit
Interest Expense
Non-Operating Income/Expense
Special Items
Pretax Income
Total Income Taxes
Income Before Extraordinary
Items & Noncontrolling Interests
Noncontrolling Interest - Inc Acc
Income Before Extraordinary
Items & Discontinued Operations
Preferred Dividends
Available for Common
Savings Due to Common
Stock Equivalents
Adjusted Available for Common
Extraordinary Items
Discontinued Operations
Adjusted Net Income
Income to Company Incl. Extrordinary
Items & Disc Ops
Dec10
Dec09
Dec08
Dec07
Dec06
436.98%
420.48%
297.35%
137.12%
100.00%
499.77%
512.22%
452.47%
120.67%
100.00%
-----------------------------------------------------------------------------------------408.01%
378.14%
225.76%
144.71%
100.00%
291.54%
295.18%
248.47%
136.89%
100.00%
-----------------------------------------------------------------------------------------757.85%
627.33%
157.55%
168.21%
100.00%
1104.32%
1403.75%
817.62%
154.97%
100.00%
-----------------------------------------------------------------------------------------629.22%
339.05%
-87.52%
173.12%
100.00%
27.62%
22.10%
16.57%
16.35%
100.00%
1653.87%
1299.47%
2894.27%
-124.99%
100.00%
7506.27%
10403.83%
2783.48%
-19.71%
100.00%
-----------------------------------------------------------------------------------------464.00%
-7.54%
-176.36%
203.09%
100.00%
-222.58%
363.95%
240.63%
109.35%
100.00%
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------300.11%
81.13%
-76.82%
180.71%
100.00%
-----------------------------------------------------------------------------------------300.11%
81.13%
-76.82%
180.71%
100.00%
-----------------------------------------------------------------------------------------297.24%
80.41%
-76.82%
180.71%
100.00%
-----------------------------------------------------------------------------------------297.24%
80.41%
-76.82%
180.71%
100.00%
-
-
-
-
-
Page 7 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Vertical Common-Size Balance Sheet (Exhibit 3)
Analyzing the vertical common-size balance sheet, it’s easy to see the two periods of Activision Blizzard:
the pre-merger Vivendi Games years and the post-merger Activision Blizzard years. Post-merger, the
company’s cash and equivalents makes up a larger part of total assets: 20%-26% compared to 7%-8%.
This tells me that Activision had much more cash and equivalents compared to Vivendi Games. Looking
at the actual balance sheet I can see that the balance in this account ballooned from $65 million - $3.5
billion.
Net receivables were a large portion of Vivendi Games’ total assets: 18%-26% compared to 5%-8% postmerger. I believe this implies that Blizzard Entertainment, and World of Warcraft in particular, was a
major source of income for Vivendi Games. WoW is a subscription-based video game and revenues
generated from it come in at varying rates. Property, plant, and equipment were also a large chunk of
Vivendi Games’ total assets, but not Activision Blizzard’s: 30%-35% pre-merger, 3%-4% post-merger.
Like cash, intangibles were an asset that grew as a percent of total sales post-merger. The company
breaks down what intangibles are comprised of in note 12 to their consolidated financial statements.
(2010 10-K, F-29) Of the $1.3 billion gross total intangibles (excluding goodwill), about $1 billion is
derived from license agreements, internally developed franchises, and trademarks. However, nearly half
of total intangibles were amortized and impaired to the net carrying amount of intangibles (excluding
goodwill): $600 million. These calculations ignored goodwill, which according to the consolidated
balance sheet located on page F-2 on the company’s 10-K totaled $7.1 billion. From 2008-2010,
intangibles have remained around 60% of total assets.
Examining the company’s liabilities and equity, three things stick out to me. Firstly, the company has no
long-term debt. The company has apparently financed itself mostly through operations and equity; after
all, since 2008 they’ve been sitting on $3 billion - $3.5 billion of cash and equivalents.
Secondly, Vivendi Games’ accrued expenses in 2007 and 2008 were 34% and 42% of their total liabilities
and equity respectively. This amount shrunk after to the merger to 3%-4 but the monetary amounts are
in the same ballpark ($275 million - $380 million pre-merger and $463 - $536 post-merger), but now the
company is much larger.
The last thing that sticks out to me are the negative amounts in retained earnings from 2006-2009; they
were the result of accumulated deficits but the account turned positive in 2010. (2010 10-K, F-2) This
makes me believe that Vivendi Games had accumulated deficits for at least 2006-2007 and possibly
before then; the balance in this account was -70% of total liabilities and stockholder’s equity in 2006 but
dropped to -34% in 2007 so this was possibly larger in 2005.
As was the case with my analysis of the income statements, these financials tell the tale of two
companies: Activision Blizzard pre-merger and post-merger. Post-merger the company is a much larger
entity and this will be made clearer in the following analysis of their horizontal common-size balance
sheet.
Page 8 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
EXHIBIT 3
VERTICAL COMMON-SIZE BALANCE SHEET
Dec10
ASSETS
Cash & Equivalents
Net Receivables
Inventories
Prepaid Expenses
Other Current Assets
Total Current Assets
Gross Plant,Property & Equipment
Accumulated Depreciation
Net Plant,Property & Equipment
Investments at Equity
Other Investments
Intangibles
Deferred Charges
Other Assets
TOTAL ASSETS
LIABILITIES
Long Term Debt Due In One Year
Notes Payable
Accounts Payable
Taxes Payable
Accrued Expenses
Other Current Liabilities
Total Current Liabilities
Long Term Debt
Deferred Taxes
Investment Tax Credit
Other Liabilities
TOTAL LIABILITIES
Redeemable Noncontrolling Interest
EQUITY
Total Preferred Stock
Common Stock
Capital Surplus
Retained Earnings
Less: Treasury Stock
Common Equity
STOCKHOLDERS' EQUITY - TOTAL
TOTAL LIABILITIES & EQUITY
Dec09
Dec08
Dec07
Dec06
26.17%
23.61%
20.42%
6.90%
8.25%
4.77%
5.38%
8.23%
18.28%
25.58%
0.84%
1.75%
1.78%
2.37%
3.39%
8.39%
8.03%
6.95%
19.17%
14.72%
------------------ ------------------ ------------------ ------------------ -----------------40.17%
38.78%
37.38%
46.71%
51.93%
3.82%
3.18%
2.69%
35.19%
30.44%
2.56%
2.18%
1.68%
20.94%
16.38%
------------------ ------------------ ------------------ ------------------ -----------------1.26%
1.00%
0.01%
14.25%
14.07%
0.17%
0.17%
0.53%
58.24%
59.98%
60.87%
35.70%
33.19%
0.16%
0.07%
0.20%
3.35%
0.81%
------------------ ------------------ ------------------ ------------------ -----------------100.00%
100.00%
100.00%
100.00%
100.00%
2.71%
2.20%
3.78%
5.41%
7.38%
0.71%
0.93%
4.00%
3.37%
3.35%
42.15%
33.37%
14.27%
12.68%
7.73%
15.16%
14.16%
------------------ ------------------ ------------------ ------------------ -----------------21.68%
18.24%
15.78%
62.71%
54.92%
0.84%
1.97%
4.18%
2.16%
1.37%
1.52%
1.63%
7.99%
0.90%
------------------ ------------------ ------------------ ------------------ -----------------23.89%
21.73%
21.59%
70.70%
57.97%
92.15%
90.06%
82.78%
62.85%
109.99%
0.33%
-2.80%
-3.52%
-33.55%
-67.97%
16.37%
8.99%
0.86%
------------------ ------------------ ------------------ ------------------ -----------------76.11%
78.27%
78.41%
29.30%
42.03%
------------------ ------------------ ------------------ ------------------ -----------------76.11%
78.27%
78.41%
29.30%
42.03%
100.00%
100.00%
100.00%
100.00%
100.00%
Page 9 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Horizontal Common-Size Balance sheet (Exhibit 4)
The final common-size statement I looked at was the horizontal common-size balance sheet; this
statement more than any other amplifies the pre-merger and post-merger status of Activision Blizzard.
During the Vivendi Games years (2006 and 2007) there’s not much to bring up because the post-merger
years featured a lot of expansion of account balances. Still there are two figures that really stick out in
these two years. They are the 450% growth of other assets and the 980% growth of other liabilities,
both from 2006-2007.
The 450% growth in other assets resulted in a balance of $30 million, basically the same as it was in
2008. I wasn’t able to determine what this account consisted of in 2007 because the 2006-2007 financial
statements are those of Vivendi Games and locating French financials is difficult. However, sourcing
Activision Blizzard’s 10-K from 2008 yielded results for contents of the account during that year;
considering the balance remained the same, perhaps the contents did as well. I couldn’t determine
wholly what the account consisted of, I was able to learn that $10 million of it was put options from UBS
and another $5 million of foreign currency derivatives. (2008 10-K, F-42) The 980% growth of other
liabilities resulted in the account having a balance of $72 million. I believe most of this growth is from
non-current income tax liabilities, that was the case for $81 million in 2008. (2008 10-K, F-40)
The post-merger years solidify the fact that Activision was much larger than Vivendi Games.
Activision Blizzard is sitting on a lot of cash. At the end of 2010, the balance in the cash and equivalents
account was 5,200% higher than it was in 2010! I don’t think the $3.5 billion of cash the company is
sitting on is too exorbitant either. Idle cash could be invested in short-term instruments to earn a minor
return, and with the amount they have, the return might not be insignificant, which is what they’re
doing. Of the $3.5 billion, $2.2 billion of it was in money market funds. (2010 10-K, F-22) But, the
company is much larger now and cash only makes up 25% of their assets.
Intangibles grew by 3,000% after merger, signifying that Activision relied more on the properties of
others for a source of income. Of the nineteen games the company published in 2010 and chose to
highlight in the MD&A section of the 10-K, eleven of them were based off of other properties such as
James Bond, Transformers, and Cabela’s. (2010 10-K, 41)
The company’s other current liabilities and other liabilities accounts grew to be 1,600% and 2,500%
higher in 2010 than their respective balances in 2006. As was the case with Vivendi Games’ growth in
other liabilities by 980% from 2006-2007, much of the growth in this account was from non-current
income tax liabilities. (2010 10-K, F-38) As for other current liabilities, after taking a look at their
consolidated balance sheet for 2010 included with that year’s 10-K, I’m able to pinpoint that much of
this account is deferred revenues. (2010 10-K, F-2)
Simply because Activision Blizzard is a much larger company than Vivendi Games was, the horizontal
common-size balance sheet can be effectively divided in two between 2007 and 2008. With the
exception of the $1.7 billion of deferred revenues, none of the growth I saw led me to dire conclusions.
Page 10 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
EXHIBIT 4
HORIZONTAL COMMON-SIZE BALANCE SHEET
Dec10
ASSETS
Cash & Equivalents
Net Receivables
Inventories
Prepaid Expenses
Other Current Assets
Total Current Assets
Gross Plant,Property & Equipment
Accumulated Depreciation
Net Plant,Property & Equipment
Investments at Equity
Other Investments
Intangibles
Deferred Charges
Other Assets
TOTAL ASSETS
LIABILITIES
Long Term Debt Due In One Year
Notes Payable
Accounts Payable
Taxes Payable
Accrued Expenses
Other Current Liabilities
Total Current Liabilities
Long Term Debt
Deferred Taxes
Investment Tax Credit
Other Liabilities
TOTAL LIABILITIES
Redeemable Noncontrolling Interest
EQUITY
Total Preferred Stock
Common Stock
Capital Surplus
Retained Earnings
Less: Treasury Stock
Common Equity
STOCKHOLDERS' EQUITY - TOTAL
TOTAL LIABILITIES & EQUITY
Dec09
Dec08
Dec07
Dec06
5161.18%
4774.24%
4416.72%
91.57%
100.00%
303.52%
350.47%
573.84%
78.23%
100.00%
401.23%
863.37%
938.60%
76.52%
100.00%
927.53%
910.22%
841.78%
142.66%
100.00%
------------------ ------------------ ------------------ ------------------ -----------------1258.08%
1244.99%
1283.78%
98.49%
100.00%
204.04%
174.15%
157.81%
126.57%
100.00%
254.12%
221.52%
182.99%
140.04%
100.00%
------------------ ------------------ ------------------ ------------------ -----------------145.74%
119.01%
128.49%
110.90%
100.00%
2853.69%
3012.67%
3270.70%
117.77%
100.00%
314.37%
134.73%
449.10%
452.43%
100.00%
------------------ ------------------ ------------------ ------------------ -----------------1626.38%
1667.14%
1783.49%
109.50%
100.00%
596.43%
496.20%
911.90%
80.24%
100.00%
194.84%
168.30%
178.85%
138.28%
100.00%
1639.30%
1492.77%
974.33%
117.23%
100.00%
------------------ ------------------ ------------------ ------------------ -----------------642.21%
553.84%
512.53%
125.05%
100.00%
628.75%
1515.75%
3452.53%
100.00%
2494.92%
2833.90%
3240.68%
977.38%
100.00%
------------------ ------------------ ------------------ ------------------ -----------------670.31%
624.89%
664.24%
133.55%
100.00%
1362.46%
1365.00%
1342.28%
62.57%
100.00%
68.72%
92.28%
54.05%
100.00%
------------------ ------------------ ------------------ ------------------ -----------------2945.08%
3104.70%
3327.25%
76.34%
100.00%
------------------ ------------------ ------------------ ------------------ -----------------1626.38%
1667.14%
1783.49%
109.50%
100.00%
Page 11 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Five-Year Ratio Comparison (Exhibit 5)
Liquidity
Even with all of the cash that Activision Blizzard has, the current and quick ratios have been declining
since 2008. I chalk this decline up to the declining balance in net receivables as well as the growth of the
other current liabilities account which contains deferred revenues. Because these ratios are declining, so
too is the company’s working capital per share. On the upside, their cash flow per share has risen from
$0.21 per share in 2008 to $0.79 per share in 2010.
Compared with 2008, the company is taking more time to turnover inventory: 35 days compared to 40
days in 2010, but they’re doing better than they were in 2009 when it took them 55 days. Similarly,
yearly inventory turnover stagnated in 2009 compared to 2008 and 2010 figures. On the flip side, the
company is turning over its receivables more in 2010 than they were in 2008: 6.5 times compared to 4.5
times. Accordingly, it’s taking them less time to collect receivables: 56 days in 2010 compared to 82 days
in 2008. As these ratios go, so too does the operating cycle; the improvement in the receivables ratios
outweighed the decline in inventory ratios and the operating cycle was 95 days in 2010 compared to 117
days in 2008.
Activision Blizzard’s liquidity is good, but some important ratios are trending downwards. Even with all
the cash they have, their current and quick ratios declined. Their inventory and receivables turnover
ratios improved, but the balances in these accounts fell; it’s easy to turnover product when there’s less
of it. Still, they have plenty of cash and liquidity shouldn’t be a concern but I’d keep my eye on their
growing current liabilities.
Long-Term Debt-Paying Ability
Because Activision Blizzard has no long-term debt, the related ratios aren’t worth mentioning with the
exception of the interest coverage ratio. The company has had interest expense each year ($3 million $5 million from 2008-2010 but most notably Vivendi Games’ interest expense of $18 million in 2006)
and the company has the money to cover these, but they didn’t generate pretax income in 2008 and
2009. The before tax and after tax variations of this ratio were both positive in 2010 though.
Profitability
Post-merger, the total asset turnover for Activision Blizzard has remained around 0.3 times per year, but
this is down compared to Vivendi Games’ 1.62 times per year in 2007. The current company probably
isn’t as nimble as Vivendi Games was plus they’re now sitting on about thirteen times the assets.
Since the merger, each of the operating, pretax profit, and net profit margins are up. As I mentioned in
my analysis of their vertical common-size income statement, the company has held their costs flat or
even decreased them while their sales rose.
Vivendi Games had really strong return ratios (return on assets, equity, and investments) ranging from
28%-95% in 2007 and these declined after the merger. Since then though, Activision Blizzard has
brought these up from the 2008 negatives to 3%-4%.
Page 12 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Five-Year Ratio Comparison (Exhibit 5) - Continued
Profitability - Continued
Overall, Activision Blizzard’s profitability ratios are very good. Most of them are on the rise. The total
asset turnover ratio is the only one I have an issue with, but its low primarily because of the amount of
cash the company is holding.
EXHIBIT 5
FIVE-YEAR RATIO COMPARISON
LIQUIDITY
Current Ratio
Quick Ratio
Working Capital per Share
Cash Flow per Share
Inventory Turnover
Inventory Turnover
Receivables Turnover
Receivables Turnover
Operating Cycle
LONG-TERM DEBT-PAYING ABILITY
Interest Coverage Before Tax
Interest Coverage After Tax
Long-Term Debt/Common Equity
Long-Term Debt/Stockholder's Equity
Total Debt/Invested Capital
Total Debt/Total Assets
PROFITABILITY
Total Asset Turnover
Sales/Fixed Assets
Sales/Stockholder's Equity
Operating Margin Before Depreciation
Operating Margin After Depreciation
Pretax Profit Margin
Net Profit Margin
Return on Assets
Return on Equity
Return on Investment
Return on Average Assets
Return on Average Equity
Return on Average Investment
DIVIDENDS
Dividend Payout
Dividend Yield
Units
N/A
N/A
$
$
Times per Year
Days
Times per Year
Days
Days
Dec10
1.85
1.43
2.09
0.79
9.10
39.56
6.45
55.82
95.38
Dec09
2.13
1.59
2.26
0.62
6.54
55.01
4.39
81.99
136.99
Dec08
2.37
1.82
2.42
0.21
10.26
35.08
4.40
81.79
116.87
Dec07
Dec06
0.74
0.95
0.40
0.62
(72,236.49) (12,310.00)
162,334.99
93,184.00
15.74
N/A
22.87
N/A
7.43
N/A
48.48
N/A
71.35
N/A
Times per Year
Times per Year
%
%
%
%
99.40
84.60
-
(1.00)
29.25
-
(61.33)
(34.67)
-
73.75
86.03
-
6.86
8.70
-
Times per Year
Times per Year
Times per Year
%
%
%
%
%
%
%
%
%
%
0.33
26.31
0.44
29.64
17.94
11.06
9.40
3.12
4.10
4.10
3.08
3.99
3.99
0.30
31.01
0.40
25.50
10.05
(0.19)
2.64
0.82
1.05
1.05
0.79
1.01
1.01
0.39
20.31
0.26
9.05
(3.67)
(6.18)
(3.54)
(0.73)
(0.93)
(0.93)
(1.37)
(1.81)
(1.81)
1.62
10.85
5.28
20.96
15.73
15.43
18.04
27.89
95.16
95.16
29.15
82.40
82.40
N/A
8.78
2.94
17.09
12.46
10.42
13.69
16.90
40.20
40.20
N/A
N/A
N/A
%
%
45.65
1.21
-
-
-
-
Page 13 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Ratio Comparison with Selected Competitors and Industry (Exhibit 6)
Selected Competitors
The two competitors I picked to compare with Activision Blizzard are Electronic Arts and Take-Two
Interactive Software. Electronic Arts was founded in 1982 and like Activision Blizzard, is a global
developer, publisher, and distributor of video games. These two companies often have titles that
compete directly with each other’s key franchises and anyone familiar with the industry will tell you
they’re analogous companies. With assets totaling $5 billion they appear much smaller than Activision
Blizzard who has assets of $13 billion, but their revenue is similar: $4.5 billion for Activision Blizzard and
$3.6 billion for Electronic Arts.
Take-Two Interactive Software is also a global developer, publisher, and distributor of video games. They
also have many titles that compete directly with Activision Blizzard’s and Electronic Arts’, but their bread
winner is the Grand Theft Auto series. They are the smallest of the three companies with assets totaling
$970 million and revenue of $1.1 billion.
I pulled the ratio reports for Electronic Arts, Take-Two Interactive Software, and their industry from
Capital IQ’s Compustat program and where noted, sourced information from the companies’ respective
10-Ks.
Liquidity
One of my sticking points about Activision Blizzard’s liquidity in the previous five-year ratio comparison
was their declining current and quick ratios. However, they’re beating the industry and Electronic Arts.
Take-Two is faring better here, but they’re a smaller company. Activision Blizzard nearly has better cash
flow per share than Take-Two ($0.79-$0.84) but their working capital per share is lower than their
competitors and industry.
The portion of Activision Blizzard’s liquidity I liked best was their upward trending receivables turnover
and operating cycle. Compared to their competitors and industry though, they don’t look so hot. Their
receivables turnover is close to Take-Two’s and the industry’s, but Electronic Arts is mopping the floor
with ratios double Activision Blizzard’s. Their operating cycle is twice as long EA’s and 15 days longer
than that of the industry. Lastly, their inventory turnover was on the rise from 2008-2010, a negative,
and the industry and their competitors are faring better here as well.
Of the four sources of data, Activision Blizzard’s liquidity is usually on the bottom. They’re sitting on $3.5
billion of cash and equivalents so I’m sure liquidity isn’t the biggest problem for them, but they need to
improve their inventory and receivables turnover.
Page 14 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Ratio Comparison with Selected Competitors and Industry (Exhibit 6) Continued
Long-Term Debt-Paying Ability
Here’s one area that didn’t require a lot of discussion in the five-year ratio comparison section and it
won’t require a lot of discussion now. Activision Blizzard and Electronic Arts don’t have any long-term
debt in their capital structure, or at least an insignificant portion. Take-Two does, although not a lot.
11% of their assets were financed through debt and it was worth 17% of their total equity. In general,
the industry doesn’t appear to use much debt. 1% of the industry’s assets were financed through debt.
Profitability
The two stars of profitability are Activision Blizzard and Take-Two. Activision Blizzard’s operating, pretax
profit, and net profit margins easily topped everyone, including the industry. Electronic Arts generated a
loss from operations for the fiscal year ended March 31, 2011 so they’re automatically excluded from
this discussion as well as any discussion regarding return ratios. The industry had an operating margin
(after depreciation) of 7% and a net profit margin of 0.3%; Activision Blizzard on the other hand and an
operating margin (after depreciation) of 18% and a net profit margin of 9%. The closest Take-Two came
to touching any of these margin ratios was their 5% net profit margin.
As for the rest of the profitability ratios, Take-Two had the best results. The industry had low return
ratios: return on assets was 0.18% and the return on equity and investment was 0.26%. Activision
Blizzard did well with these: 3.12% and 4.1% respectively. Take-Two’s returns were better though: 5.54%
for return on assets, 8.74% for return on equity, and 7.45% for return on investment.
Activision Blizzard’s total asset turnover remained flat from 2008-2010, but I thought this was low.
Comparing this ratio to the industry proves it, although the industry wasn’t much higher: 0.33 times per
year compared to 0.52 times per year. Electronic Arts had a better total asset turnover of 0.75 times per
year while Take-Two had the best by turning their assets over 1.15 times per year. Activision Blizzard has
a lot of cash and equivalents and intangibles “weighing” down their assets though.
The profitability ratios were divided among Activision Blizzard and Take-Two. Overall though, most of
Activision Blizzard’s ratios were beating the industry. They had good margins and their returns were
always positive. And yet, Take-Two did a better job of using their assets.
Dividends
The dividends ratios, like the long-term debt-paying, are hardly worth bringing up, even less so than
those. But Activision Blizzard did pay a dividend on April 2 and October 22, 2010. For 2010, Activision
Blizzard’s dividend payout ratio was 45% while the industry’s was 9%; the 45% means that percentage of
current earnings per share was paid as a cash dividend. Electronic Arts did not pay any dividends and
neither did Take-Two. Neither anticipate paying them in the near future either. (EA 2011 10-K, 25; TTWO
2011 10-K, 25)
Page 15 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
EXHIBIT 6
RATIO COMPARISON WITH SELECTED COMPETITORS AND
INDUSTRY
LIQUIDITY
Current Ratio
Quick Ratio
Working Capital per Share
Cash Flow per Share
Inventory Turnover
Inventory Turnover
Receivables Turnover
Receivables Turnover
Operating Cycle
LONG-TERM DEBT-PAYING ABILITY
Interest Coverage Before Tax
Interest Coverage After Tax
Long-Term Debt/Common Equity
Long-Term Debt/Stockholder's Equity
Total Debt/Invested Capital
Total Debt/Total Assets
PROFITABILITY
Total Asset Turnover
Sales/Fixed Assets
Sales/Stockholder's Equity
Operating Margin Before Depreciation
Operating Margin After Depreciation
Pretax Profit Margin
Net Profit Margin
Return on Assets
Return on Equity
Return on Investment
Return on Average Assets
Return on Average Equity
Return on Average Investment
DIVIDENDS
Dividend Payout
Dividend Yield
Units
N/A
N/A
$
$
Times per Year
Days
Times per Year
Days
Days
Activision Blizzard Electronic Arts
Dec10
Mar11
1.85
1.52
1.43
1.29
2.09
3.10
0.79
(0.31)
9.10
15.63
39.56
23.04
6.45
13.27
55.82
27.13
95.38
50.17
Take-Two
Mar11
2.45
1.67
3.90
0.84
11.56
31.14
8.02
44.90
76.04
Industry
Dec10
1.70
1.31
2.16
0.19
11.35
31.71
7.56
47.64
79.35
Times per Year
Times per Year
%
%
%
%
99.40
84.60
-
-
5.17
4.53
17.43
17.43
14.84
11.04
23.08
5.27
1.52
1.52
1.53
1.05
Times per Year
Times per Year
Times per Year
%
%
%
%
%
%
%
%
%
%
0.33
26.31
0.44
29.64
17.94
11.06
9.40
3.12
4.10
4.10
3.08
3.99
3.99
0.75
7.00
1.40
0.14
(4.68)
(7.77)
(7.69)
(5.60)
(10.76)
(10.76)
(5.77)
(10.43)
(10.43)
1.15
57.91
1.85
8.38
6.72
5.60
4.73
5.54
8.74
7.45
5.43
9.60
7.87
0.52
12.44
0.78
13.10
6.69
1.75
0.34
0.18
0.26
0.26
0.18
0.26
0.25
%
%
45.65
1.21
-
-
9.48
N/A
Page 16 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Summary
Among the video game companies in the United States, Activision Blizzard is the largest. This is a recent
development thanks to the merger of Activision and Vivendi Games in 2008. (2010 10-K, 41) Through
this report I’ve learned the company is sitting on a lot of cash and even though their liquidity ratios
aren’t great, they’re fine in this area. That they appear to use no long-term debt can be a positive and a
negative. It’s good that they’re not burdened by debt payments, especially in the wake of the economic
crisis, but it could be a cheaper form of financing for them. Yet, because they don’t currently use it, they
have nowhere to go but up in this regard. They seem to be a very profitable company too. They beat
their competitors and even the industry when it came to profit margins, and their returns weren’t
shabby either.
Looking at them from a business perspective, Activision Blizzard seems like a safe company for the next
few years. They’ve sorted out their post-merger growing pains and their business looks to have
improved each year from 2008 on. They’re the largest company in their industry and they have a
number of franchises that are incredibly popular. Speaking of which, looking at the company from a fan
and devoted watcher of the industry, it’s easy to feel more wary of them.
They rely very heavily on a few franchises and from 2006-2010, Guitar Hero was one of them. This was
an incredibly successful franchise, but Activision Blizzard saturated the market with releases in 2009 and
decided to drastically slowdown releases in the franchise. (Pereira, Chris) Currently, their Call of Duty
franchise is the most popular game series ever, but if the company doesn’t properly manage it, that
honey hole could dry up. But they’ve potentially found another goldmine in Skylanders: Spyro’s
Adventure. As long as they continue developing quality products and maintain their strong financials,
Activision Blizzard is a recommendable company to invest in.
Activision Blizzard 2010
Following the works cited page are a number of Activision Blizzard financial statements that were
sourced from Capital IQ’s Compustat program. Not included are the notes to these financial statements.
They can be found in the company’s 10-K which is most easily found through the SEC’s EDGAR database.
Page 17 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
Works Cited
"Activision Blizzard 10-K - 2008." Www.sec.gov. Securities and Exchange Commission, 27 Feb. 2009.
Web. 22 Apr. 2012.
<http://www.sec.gov/Archives/edgar/data/718877/000104746909002015/a2190811z10k.htm>.
"Activision Blizzard 10-K - 2010." Www.sec.gov. Securities and Exchange Commission, 25 Feb. 2011.
Web. 15 Apr. 2012.
<http://www.sec.gov/Archives/edgar/data/718877/000104746911001413/a2202068z10k.htm>.
"Activision Blizzard 10-K - 2011." Www.sec.gov. Securities and Exchange Commission, 28 Feb. 2012.
Web. 15 Apr. 2012.
<http://www.sec.gov/Archives/edgar/data/718877/000104746912001775/a2207405z10k.htm>.
"Classic Gaming Expo Distinguished Guest: Alan Miller." Cgexpo.com. Classic Gaming Expo. Web. 22 Apr.
2012. <http://www.cgexpo.com/bios/amiller.htm>.
"Electronic Arts 10-K - 2011." Www.sec.gov. Securities and Exchange Commission, 24 May 2011. Web.
22 Apr. 2012.
<http://www.sec.gov/Archives/edgar/data/712515/000119312511149262/d10k.htm>.
Pereira, Chris. "Activision to Release Far Fewer Guitar Hero Games in 2010." 1Up.com. 1UP, 10 Feb.
2010. Web. 07 May 2012. <http://www.1up.com/news/activision-release-guitar-hero-games>.
Page 18 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
"StarCraft II Shakes Up S. Korea's `National Sport'" Cnn.com. Cable News Network, 27 July 2010. Web. 22
Apr. 2012. <http://articles.cnn.com/2010-07-27/tech/south.korea.starcraft_1_starcraft-iigaming-market-internet-cafes?_s=PM:TECH>.
"Take-Two Interactive Software 10-K - 2011." Www.sec.gov. Securities and Exchange Commission, 25
May 2011. Web. 22 Apr. 2012.
<http://www.sec.gov/Archives/edgar/data/946581/000104746911005488/a2204277z10k.htm>.
"World of Warcraft Subscriber Bases Reaches 12 Million Worldwide." Us.blizzard.com. Blizzard
Entertainment. Web. 22 Apr. 2012. <http://us.blizzard.com/enus/company/press/pressreleases.html?id=2847881>.
Page 19 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
EXHIBIT 7
ANNUAL INCOME STATEMENT
($ MILLIONS)
Sales
Cost of Goods Sold
Gross Profit
Selling, General, &
Administrative Expense
Operating Income Before Deprec.
Depreciation, Depletion, &
Amortization
Operating Profit
Interest Expense
Non-Operating Income/Expense
Special Items
Pretax Income
Total Income Taxes
Income Before Extraordinary Items
& Noncontrolling Interests
Noncontrolling Interest - Inc Acc
Income Before Extraordinary
Items & Discontinued Operations
Preferred Dividends
Available for Common
Savings Due to Common
Stock Equivalents
Adjusted Available for Common
Extraordinary Items
Discontinued Operations
Adjusted Net Income
Income to Company Incl. Extrordinary
Items & Disc Ops
Dec10
Dec09
Dec08
Dec07
Dec06
4,447.00
4,279.00
3,026.00
1,395.42
1,017.66
1,606.00
1,646.00
1,454.00
387.79
321.35
------------------------------------------------------------------------------------------2,841.00
2,633.00
1,572.00
1,007.63
696.31
1,523.00
1,542.00
1,298.00
715.10
522.40
------------------------------------------------------------------------------------------1,318.00
1,091.00
274.00
292.53
173.91
520.00
661.00
385.00
72.97
47.09
------------------------------------------------------------------------------------------798.00
430.00
(111.00)
219.56
126.82
5.00
4.00
3.00
2.96
18.10
28.00
22.00
49.00
(2.12)
1.69
(329.00)
(456.00)
(122.00)
0.86
(4.38)
------------------------------------------------------------------------------------------492.00
(8.00)
(187.00)
215.35
106.03
74.00
(121.00)
(80.00)
(36.35)
(33.25)
------------------------------------------------------------------------------------------418.00
113.00
------------------------------------------------------------------------------------------418.00
113.00
(107.00)
251.70
139.28
------------------------------------------------------------------------------------------418.00
113.00
(107.00)
251.70
139.28
(4.00)
(1.00)
------------------------------------------------------------------------------------------414.00
112.00
(107.00)
251.70
139.28
------------------------------------------------------------------------------------------414.00
112.00
(107.00)
251.70
139.28
418.00
113.00
-
-
-
Page 20 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
EXHIBIT 8
ANNUAL BALANCE SHEET
($ MILLIONS)
ASSETS
Cash & Equivalents
Net Receivables
Inventories
Prepaid Expenses
Other Current Assets
Total Current Assets
Gross Plant,Property & Equipment
Accumulated Depreciation
Net Plant,Property & Equipment
Investments at Equity
Other Investments
Intangibles
Deferred Charges
Other Assets
TOTAL ASSETS
LIABILITIES
Long Term Debt Due In One Year
Notes Payable
Accounts Payable
Taxes Payable
Accrued Expenses
Other Current Liabilities
Total Current Liabilities
Long Term Debt
Deferred Taxes
Investment Tax Credit
Other Liabilities
TOTAL LIABILITIES
EQUITY
Total Preferred Stock
Common Stock
Capital Surplus
Retained Earnings
Less: Treasury Stock
Common Equity
TOTAL LIABILITIES & EQUITY
Dec10
Dec09
Dec08
Dec07
Dec06
3,508.00
3,245.00
3,002.00
62.24
67.97
640.00
739.00
1,210.00
164.95
210.86
112.00
241.00
262.00
21.36
27.91
1,125.00
1,104.00
1,021.00
173.03
121.29
-----------------------------------------------------------------------------------------5,385.00
5,329.00
5,495.00
421.58
428.03
512.00
437.00
396.00
317.62
250.94
343.00
299.00
247.00
189.02
134.98
-----------------------------------------------------------------------------------------169.00
138.00
149.00
128.60
115.96
23.00
23.00
78.00
7,808.00
8,243.00
8,949.00
322.22
273.61
21.00
9.00
30.00
30.22
6.68
-----------------------------------------------------------------------------------------13,406.00
13,742.00
14,701.00
902.62
824.28
363.00
302.00
555.00
48.83
60.86
95.00
136.00
536.00
463.00
492.00
380.41
275.10
1,913.00
1,742.00
1,137.00
136.80
116.70
-----------------------------------------------------------------------------------------2,907.00
2,507.00
2,320.00
566.05
452.65
112.00
270.00
615.00
17.81
184.00
209.00
239.00
72.08
7.38
-----------------------------------------------------------------------------------------3,203.00
2,986.00
3,174.00
638.14
477.84
12,353.00
12,376.00
12,170.00
567.29
906.67
44.00
(385.00)
(517.00)
(302.81)
(560.22)
2,194.00
1,235.00
126.00
-----------------------------------------------------------------------------------------10,203.00
10,756.00
11,527.00
264.49
346.44
-----------------------------------------------------------------------------------------13,406.00
13,742.00
14,701.00
902.62
824.28
Page 21 of 22
Financial Statement Analysis Summary Analysis – Activision Blizzard, Inc.
John Engelman
EXHIBIT 9
ANNUAL CASH STATEMENT BY ACTIVITY
($ MILLIONS)
OPERATIONS
Income Before Extraordinary Items
Depreciation and Amortization
Extraordinary Items and
Discontinued Operations
Deferred Taxes
Equity in Earnings
Sale of Property, Plant, and Equipment
and Sale of Investments
Funds from Operations - Other
Funds from Operations - Total
Working Capital Changes - Other - Inc (Dec)
Cash Dividends
INVESTMENTS
Capital Expenditures
Sale of Property, Plant, and Equipment
Acquisitions
Increase in Investments
Sale of Investments
FINANCING
Current Debt - Changes
Issuance of Long-Term Debt
Long-Term Debt - Reduction
Purchase of Common and Preferred Stock
Sale of Common and Preferred Stock
Excess Tax Benefit from Stock Options
OTHER ACTIVITIES
Uses of Funds - Other
Sources of Funds - Other
Cash and Equivalents - Changes
Dec10
418.00
520.00
-
Dec09
113.00
347.00
-
Dec08
(107.00)
385.00
-
Dec07
251.70
72.97
-
Dec06
139.28
47.09
-
(278.00)
-
(256.00)
-
(432.00)
-
1.00
432.00
N/A
N/A
189.00
2.00
767.00
N/A
N/A
-
1.00
279.00
N/A
N/A
-
1.07
(61.35)
N/A
N/A
-
0.96
(38.12)
N/A
N/A
-
97.00
4.00
-
69.00
46.00
46.00
(1,120.00)
-
68.33
-
96.47
25.39
-
959.00
73.00
22.00
1,109.00
81.00
79.00
207.00
1,753.00
21.00
-
0.08
-
N/A
N/A
44.00
N/A
N/A
(190.00)
N/A
N/A
2,896.00
-
-
N/A
N/A
(5.73)
N/A
N/A
35.53
Page 22 of 22