Presentation Transcript

1. Presentation by: Briana Schiller, Sam Hock, Florentine Roth, Jamie Devera, Jake Lee, And Spencer DaHL
2. COMPANY SUMMARYHeadquartered in Santa Monica, CA, Activision Blizzard, Inc. is a worldwide online, PC, console, handheld and mobile game publisher.It is the “largest, most profitable pure-play interactive entertainment software publisher in the world with leading market positions across every major category of the rapidly growing interactive entertainment software industry.”(source: Activision Investor Annual report 2011)
3. Products Activision Blizzard's portfolio includes best-selling video games such as: Call of Duty® Spider-Man™ X-Men™ James Bond™ TRANSFORMERS™ Guitar Hero leading franchises such as: Spyro™ StarCraft® Diablo® Warcraft® franchises including the global #1 subscription-based massively multi-player online role-playing game: World of Warcraft®
4. Accomplishments fourteen#1-selling games multiple Game of the Year awards Multiple PlayStation Choice awards online-gaming service Battle.net®, is one of the largest in the world, with millions of active players two top-10 PC games in North America and Europe with StarCraft II: Wings of Liberty® and World of Warcraft: Cataclysm®
5. Call of Duty®: Modern Warfare® 3 the biggest entertainment launch of all time the third consecutive year a Call of Duty title has set the record It generated $1 billion in sales in only 16 days, to become the best-selling video game in a single year
6. Black Ops II Delivers More Than $500 Million In First 24 Hours "With first day sales of over half a billion dollars worldwide, we believe Call of Duty is the biggest entertainment launch of the year for the fourth year in a row," said Bobby Kotick, CEO, Activision Blizzard, Inc.  "Life-to-date sales for the Call of Duty franchise have exceeded worldwide theatrical box office receipts for "Harry Potter" and "Star Wars," the two most successful movie franchises of all time.”
7. Important Milestones Activision Publishing’s largest new IP launch ever. #1 subscription Based Massively Multiplayer Online Roleplaying Game of 12/31/11. One of the fastest growing Premium online services ever created. Record breaking 6.8 million copies sold. Most influential real time strategy game of the past 2 decades.
8. Activision Blizzard Ranks #8 in Fortune’s World’s Most Admired Companies 2012 for the Computer and Software Industry. (EA ranks at #10)
9. source: Activision Investor Annual report 2011
10. COMPANY SUBSIDIARIES 3 segments: Activision Publishing, Inc. (Activision) and its subsidiaries engaged in publishing interactive entertainment software products and downloadable content Blizzard Entertainment, Inc. (Blizzard) and its subsidiaries engaged in publishing real-time strategy, role-playing PC games and online subscription-based games in the multiplayer online role-playing game (MMORPG) category Activision Blizzard Distribution engaged in distributing interactive entertainment software and hardware products (Distribution)
11. Senior Corporate Management Eric Hirshberg CEO, Activision Publishing Robert A. Kotick CEO, Activision Blizzard Michael Morhaime CEO, Blizzard Entertainment Michael J. Griffith Vice Chairman, Activision Blizzard Brian Hodous CCO, Activision Blizzard Thomas Tippl COO, Activision Blizzard Dennis Durkin CFO, Activision Blizzard
12. Liquidity Ratios
13. Efficiency Ratios
14. Leverage Ratios
15. Profit Ratios
16. “Over the past 20 years, we have doubled our revenues every four to five years and we have steadily increased our operating margins” Operating Profit Margin
17. Market Ratios
18. Commitment to Shareholders The only Western independent interactive entertainment publisher to offer a cash dividend, which was increased by 9% to $0.18 per share From 2008 to 2011, returns of $3.1 billion to shareholders in the form of dividends and share repurchases Record earnings per share performance in 2011
19. Effective Tax Rate Why are our effective tax rates so much lower than the U.S. statutory tax rate of 35% ? Earnings taxed at lower rates in foreign jurisdictions Recognition of federal and California research and development credits The federal domestic production deduction For 2010, a favorable impact from discrete items recognized in connection with the filing of our 2010 tax returns *Amounts in millions
20. Statement of Cash Flows Causes for discrepancy between NI ($1,085 million) and CFFO ($952 million): Depreciation and amortization (+) Amortization and write-off of capitalized software development costs and intellectual property licenses (+) Stock-based compensation expense (+) Software development and intellectual property licenses (-) Deferred revenues (-)
21. Statement of cash flows cont. CFFO Larger in 2011-2010 increased proceeds from the maturity of investments decreased purchases of short-term investments and lower capital expenditures proceeds from the maturity of investments: $740 million(mainly U.S. treasury and other government agency securities) the purchase of short-term investments: $417 million capital expenditures$- $72 million (primarily related to property and equipment) Financing Activities: issuance of shares of common stock to employees payment of dividends the repurchase of our common stock we have not utilized debt financing as a source of cash flows
22. “We rely on third parties to develop some of our software products” (pg.23) “Our business is highly dependent on… videogame Platforms “ (pg.23) Variations in Ratios Performance 2011 dip in liquidity ratios Product development costs increased because of low capitalization of cost related to future titles Fewer titles 12 vs. 16 in 2009 Poor economic environment Increased sales and marketing expenses due to investment to support launches of Skylanders: Spyro’s Adventures, Call of Duty: MW3 & Call of Duty Elite 2011 spike in debt ratios is inversely related to liquidity ratios and has same explanation Long average collection period “We perform ongoing credit evaluations of our customers and maintain allowances for potential credit losses.” (pg. 37) Our largest account for net receivables account is Wal-Mart (proven record of payment) Company Risks
23. Employee Compensation & Benefits Source: Indeed.com MEDICAL, dental, vision insurance Home, auto and Life insurance Disability plans 401 K College savings plans…. with significant tax advantages! Parental leave Tuition reimbursement program Gym membership discounts And, most importantly…. DISCOUNTED ACTIVISION BLIZZARD GAMES AND PRODUCTS!!!
24. Overview Record E.P.S of $0.93 P.E ratio of 12 CFFO: $952 million Dividends of $0.18 Four top gaming franchises: wow, Diablo, Starcraft, & skylander Current Ratio: 2.1 Large Domestic & foreign market Net income of $1.1 billion fourteen#1-selling games Strong Future!
25. CNN Money Forecast for Activision Blizzard, Inc.
26. REFERENCES http://www.activisionblizzard.com/corp/b/aboutUs/ourCompany.html http://www.reuters.com/finance/stocks/companyProfile?symbol=ATVI.O http://investor.activision.com/releasedetail.cfm?ReleaseID=721903 http://us.blizzard.com/en-us/company/about/faq.html http://www.activision.com/ROOT/en_US/web/AboutActivision/seniorManagement/about_us.html http://www.wowwiki.com/WoW_population_by_country http://www.glassdoor.com/Overview/Working-at-Blizzard-Entertainment-EI_IE24858.11,33.htm http://money.cnn.com/magazines/fortune/most-admired/2012/industries/6.html http://money.cnn.com/quote/quote.html?symb=ATVI http://files.shareholder.com/downloads/ACTI/2188110442x0x564196/DAD3CBE4-2B7B-4DBF-B5FF-328F598E2E63/Activision_Blizzard_2011AR_FINAL.pdf http://www.gurufocus.com/news/152045/activision-blizzard-inc-reports-operating-results-10q http://www.indeed.com/cmp/Blizzard-Entertainment/reviews
27. source: Activision Investor Annual report 2011
28. 2011-2012Competitor Comparison: Activision Blizzard vs. EA, THQ, Take-Two, andOracle Source: Google Finance
29. Televised Star Craft Tournaments in Korea Majority of official World Cyber Games titles are made by Activision/Blizzard