XML 57 R17.htm IDEA: XBRL DOCUMENT v2.4.0.8
Operating Segments and Geographic Region
 6 Months Ended
Jun. 30, 2014
Operating Segments and Geographic Region  
Operating Segments and Geographic Region

9.       Operating Segments and Geographic Region

 

Our operating segments are consistent with our internal organizational structure, the manner in which our operations are reviewed and managed by our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), the manner in which we assess operating performance and allocate resources, and the availability of separate financial information. Currently, we conduct our business through three operating segments: Activision, Blizzard and Distribution (see Note 1 of the Notes to Condensed Consolidated Financial Statements). We do not aggregate operating segments.

The CODM reviews segment performance exclusive of the impact of the change in deferred revenues and related cost of sales with respect to certain of our online-enabled games, stock-based compensation expense, restructuring expense, amortization of intangible assets as a result of purchase price accounting, impairment of goodwill and intangible assets, and expenses related to the Purchase Transaction and related debt financings. The CODM does not review any information regarding total assets on an operating segment basis, and accordingly, no disclosure is made with respect thereto. Information on the operating segments and reconciliations of total net revenues and total segment operating income to consolidated net revenues from external customers and consolidated income before income tax expense for the three and six months ended June 30, 2014 and 2013 are presented below (amounts in millions):

    Three Months Ended June 30,
    2014 2013 2014 2013
          Income (loss) from operations
    Net revenues before income tax expense
 Activision  $ 252 $ 347 $(31) $ 60
 Blizzard    340   224   145   60
 Distribution    66   37  (1)  (1)
 Operating segments total    658   608   113   119
               
Reconciliation to consolidated net revenues /            
consolidated income before income tax            
expense:            
 Net effect from deferral of net revenues and            
  related cost of sales   312   442   220   338
 Stock-based compensation expense   ---  ---  (22)   (24)
 Amortization of intangible assets  ---  ---  (1)   (3)
Consolidated net revenues / operating income  $ 970 $ 1,050   310   430
 Interest and other investment income (expense), net        (50)  ---
Consolidated income before income tax expense       $ 260 $ 430
               
               
    Six Months Ended June 30,
    2014 2013 2014 2013
               
          Income (loss) from operations
  Net revenuesbefore income tax expense
 Activision  $ 489 $ 771 $ (29) $ 173
 Blizzard    801   554   383   194
 Distribution    140   88   (1)   (1)
 Operating segments total    1,430   1,413   353   366
               
Reconciliation to consolidated net revenues /            
consolidated income before income tax            
expense:            
 Net effect from deferral of net revenues and            
  related cost of sales    651   962   440   707
 Stock-based compensation expense   ---  ---   (53)   (50)
 Amortization of intangible assets  ---  ---   (3)   (6)
Consolidated net revenues / operating income  $ 2,081 $ 2,375 $ 737 $ 1,017
 Interest and other investment income (expense), net        (101)  3
Consolidated income before income tax expense       $ 636 $ 1,020

Geographic information presented below for the three and six months ended June 30, 2014 and 2013 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,
   2014 2013 2014 2013
Net revenues by geographic region:            
 North America  $ 471 $ 562 $1,035 $1,300
 Europe    395   402  856  889
 Asia Pacific    104   86  190  186
Total consolidated net revenues  $ 970 $ 1,050 $ 2,081 $ 2,375

The Company's net revenues in the U.S. were 46%, and 51% of consolidated net revenues for the three months ended June 30, 2014 and 2013, respectively.  The Company's net revenues in the U.K. were 14% and 12% of consolidated net revenues for the three months ended June 30, 2014 and 2013, respectively. The Company's net revenues in France were 16% and 13% of consolidated net revenues for the three months ended June 30, 2014 and 2013, respectively.  No other country's net revenues exceeded 10% of consolidated net revenues.

 

The Company's net revenues in the U.S. were 47%, and 52% of consolidated net revenues for the six months ended June 30, 2014 and 2013, respectively.  The Company's net revenues in the U.K. were 14% and 12% of consolidated net revenues for the six months ended June 30, 2014 and 2013, respectively. The Company's net revenues in France were 15% and 12% of consolidated net revenues for the six months ended June 30, 2014 and 2013, 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,
  2014 2013 2014 2013
Net revenues by platform:           
 Console $479 $590 $1,134 $1,339
 Online (1) 195  233  395  508
 PC  182  100  281  195
 Mobile and other (2) 48  90  131  245
Total Activision Blizzard net revenues  904  1,013  1,941  2,287
Distribution  66  37  140  88
Total consolidated net revenues $970 $1,050 $2,081 $2,375

(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 and mobile devices, as well as non-platform specific game related revenues, such as standalone sales of toys and accessories products from the Skylanders franchise and other physical merchandise and accessories.

Long-lived assets by geographic region at June 30, 2014 and December 31, 2013 were as follows (amounts in millions):

   At June 30, At December 31,
   2014 2013
Long-lived assets* by geographic region:      
 North America  $ 120 $ 102
 Europe    34   29
 Asia Pacific    8   7
Total long-lived assets by geographic region $ 162 $ 138

*The only long-lived assets that we classify by region are our long-term tangible fixed assets, which only include property, plant and equipment assets; all other long-term assets are not allocated by location.

 

We did not have any single external customers that accounted for 10% or more of consolidated net revenues for the three and six months ended June 30, 2014 and 2013.