Activision Blizzard Announces Transformative Purchase of Shares from Vivendi and New Capital Structure
Company to Buy Back Approximately 429 Million Shares from
Investor Group Led By CEO
New Capital Structure Expected to Drive Meaningful Earnings-Per-Share Accretion
Activision Blizzard Reports Preliminary Second Quarter Results
Following the completion of the transaction,
A special committee of independent directors was formed to represent the Company in negotiating and evaluating the transactions.
Please see the Company's Current Report on Form 8-K being filed with the
Activision Blizzard's financial advisor on the transaction is
Preliminary Second Quarter Results and Full-Year Outlook
For the second quarter,
For the quarter,
The Company raised its full-year 2013 GAAP net revenue outlook to
Conference Call and Webcast Information
For those unable to listen to the live conference call, an audio replay
of the call will be available through
About
¹According to
²According to
Subscriber Definition: World of Warcraft subscribers
include individuals who have paid a subscription fee or have an active
prepaid card to play World of Warcraft, as well as those who have
purchased the game and are within their free month of access.
Non-GAAP Financial Measures
As a supplement to our financial measures presented in accordance with
Generally Accepted Accounting Principles ("GAAP"),
- the change in deferred net revenue and related cost of sales with respect to certain of the company's online-enabled games;
- expenses related to stock-based compensation;
- the amortization of intangibles from purchase price accounting;
- fees and other expenses related to the transaction; and
- the income tax adjustments associated with any of the above items.
In the future,
Activision Blizzard's non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles, and the terms non-GAAP net revenues, non-GAAP net income, non-GAAP earnings per share, and non-GAAP operating margin do not have a standardized meaning. Therefore, other companies may use the same or similarly named measures, but exclude different items, which may not provide investors a comparable view of Activision Blizzard's performance in relation to other companies.
Management compensates for the limitations resulting from the exclusion of these items by considering the impact of the items separately and by considering Activision Blizzard's GAAP, as well as non-GAAP, results and outlook, and by presenting the most comparable GAAP measures directly ahead of non-GAAP measures, and by providing a reconciliation that indicates and describes the adjustments made.
In addition to the reasons stated above, which are generally applicable
to each of the items
Since
Management believes this is appropriate because doing so enables an analysis of performance based on the timing of actual transactions with our customers, which is consistent with the way the company is measured by investment analysts and industry data sources. In addition, excluding the change in deferred net revenue and the related cost of sales provides a much more timely indication of trends in our operating results.
Cautionary Note Regarding Forward-looking Statements:
Information in this press release that involves Activision Blizzard's
expectations, plans, intentions or strategies regarding the future,
including, but not limited to, statements about (1) projections of
revenues, expenses, income or loss, earnings or loss per share, cash
flow or other financial items; (2) statements of our plans and
objectives; (3) statements of future financial or operating performance;
and (4) statements about the completion, timing, financing and impact of
the transactions described herein are forward-looking statements that
are not facts and involve a number of risks and uncertainties.
Forward looking statements are subject to business and economic risk,
reflect management's current expectations, estimates and projections
about our business, and are inherently uncertain and difficult to
predict. Factors that could cause Activision Blizzard's actual future
results to differ materially from those expressed in the forward-looking
statements set forth in this release include, but are not limited to,
sales levels of Activision Blizzard's titles, increasing concentration
of titles, shifts in consumer spending trends, the impact of the current
macroeconomic environment, Activision Blizzard's ability to predict
consumer preferences, including interest in specific genres such as
first-person action and massively multiplayer online games and
preferences among competing hardware platforms, the seasonal and
cyclical nature of the interactive game market, changing business models
including digital delivery of content, competition, including from used
games and other forms of entertainment, possible declines in software
pricing, product returns and price protection, product delays, adoption
rate and availability of new hardware (including peripherals) and
related software, particularly during the expected console transition,
rapid changes in technology and industry standards, the current
regulatory environment, litigation risks and associated costs,
protection of proprietary rights, maintenance of relationships with key
personnel, customers, licensees, licensors, vendors, and third-party
developers, including the ability to attract, retain and develop key
personnel and developers that can create high quality "hit" titles,
counterparty risks relating to customers, licensees, licensors and
manufacturers, domestic and international economic, financial and
political conditions and policies, foreign exchange rates and tax rates,
and the identification of suitable future acquisition opportunities and
potential challenges associated with geographic expansion, capital
market risks, the possibility that expected benefits related to the
transactions may not materialize as expected, the transactions not being
timely completed, if completed at all, and the other factors identified
in the risk factors section of Activision Blizzard's most recent annual
report on Form 10-K, as amended. The forward-looking statements in this
release are based upon information available to
Although these forward-looking statements are believed to be true when
made, they may ultimately prove to be incorrect. These statements are
not guarantees of the future performance of
Tables to Follow:
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Preliminary Results For the Quarter Ended |
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| GAAP to Non-GAAP Reconciliation | ||
| (Amounts in millions, except per share data) | ||
| Quarter Ended | ||
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|
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| (Preliminary results) | ||
| Net Revenues (GAAP) | $ | 1,050 |
|
Excluding the impact of: |
||
| Change in deferred net revenues | (a) | (442) |
| Non-GAAP Net Revenues | $ | 608 |
| Earnings Per Diluted Share (GAAP) | $ | 0.28 |
|
Excluding the impact of: |
||
| Net effect from deferral in net revenues and related cost of sales | (b) | (0.22) |
| Stock-based compensation | (c) | 0.01 |
| Amortization of intangible assets | (d) | - |
| Non-GAAP Earnings Per Diluted Shares | $ | 0.08 |
| (a) Reflects the net change in deferred net revenues. | ||
| (b) Reflects the net change in deferred net revenues and related cost of sales. | ||
| (c) Reflects expenses related to stock-based compensation. | ||
| (d) Reflects amortization of intangible assets from purchase price accounting. | ||
| The per share adjustments are presented as calculated, and the GAAP and non-GAAP earnings (loss) | ||
| per share information is also presented as calculated. The sum of these measures, as presented, | ||
| may differ due to the impact of rounding. | ||
|
Preliminary results are based on information known to the Company as
of |
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results will be announced on |
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For the Year Ending |
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| GAAP to Non-GAAP Reconciliation | ||||||
| (Amounts in millions, except per share data) | ||||||
| Outlook for | Outlook for | Outlook for | ||||
| Year Ending | Year Ending | Year Ending | ||||
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| Pre-transaction | Post-transaction | Post-transaction | ||||
| Pro-forma basis* | Pro-forma basis* | |||||
| Low end of range | High end of range | |||||
| Net Revenues (GAAP) | $ | 4,310 | $ | 4,310 | $ | 4,310 |
|
Excluding the impact of: |
||||||
| Change in deferred net revenues | (a) | (60) | (60) | (60) | ||
| Non-GAAP Net Revenues | $ | 4,250 | $ | 4,250 | $ | 4,250 |
| Earnings Per Diluted Share (GAAP) | $ | 0.77 | $ | 0.91 | $ | 0.99 |
|
Excluding the impact of: |
||||||
| Net effect from deferral in net revenues and related cost of sales | (b) | (0.03) | (0.05) | (0.05) | ||
| Stock-based compensation | (c) | 0.07 | 0.11 | 0.11 | ||
| Amortization of intangible assets | (d) | 0.01 | 0.02 | 0.02 | ||
| Fees and other expenses related to the transaction | (e) | - | 0.02 | 0.02 | ||
| Non-GAAP Earnings Per Diluted Shares | $ | 0.82 | $ | 1.01 | $ | 1.09 |
| (a) Reflects the net change in deferred net revenues. | ||||||
| (b) Reflects the net change in deferred net revenues and related cost of sales. | ||||||
| (c) Reflects expenses related to stock-based compensation. | ||||||
| (d) Reflects amortization of intangible assets from purchase price accounting. | ||||||
| (e) Reflects fees and other expenses related to the transaction. | ||||||
|
The per share adjustments are presented as calculated, and the GAAP and non-GAAP earnings (loss) per share information is also presented as calculated. The sum of these measures, as presented, may differ due to the impact of rounding. |
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* Pro-forma assumes the transactions and their related financial
impacts (including interest expenses from debt, and associated fees
and expenses, and lower share count as of result of the repurchases)
commences |
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Activision Blizzard Investor Relations:
Sr. Vice President, IR and Treasurer
ksouthey@activision.com
or
SVP,
Corporate Communications
mlataif@activision.com
or
Sard
Verbinnen & Co
212-687-8080/310-201-2040
Source:
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