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Activision Blizzard (ATVI)
Q4 2010 Earnings Call
February 09, 2011 4:30 pm ET
Michael Morhaime - Chief Executive Officer of Blizzard Entertainment and President Blizzard Entertainment
Thomas Tippl - Chief Operating Officer and Chief Financial Officer
Robert Kotick - Chief Executive Officer, President and Director
Kristin Southey -
Eric Hirshberg - Chief Executive Officer of Publishing Unit
Eric Handler - MKM Partners LLC
Douglas Creutz - Cowen and Company, LLC
Edward Williams - BMO Capital Markets U.S.
John Taylor - Arcadia
Collis Boyce - Morgan Stanley
Jeetil Patel - Deutsche Bank AG
Previous Statements by ATVI
» Activision Blizzard CEO Discusses Q3 2010 Results - Earnings Call Transcript
» Activision Blizzard Q2 2010 Earnings Call Transcript
» Activision Blizzard Q1 2010 Earnings Call Transcript
Good afternoon, and thank you for joining us today for Activision Blizzard's Fourth Quarter and 2010 Conference Call. With me today are Bobby Kotick, CEO of Activision Blizzard; Thomas Tippl, COO and CFO of Activision Blizzard; Eric Hirshberg; CEO of Activision Publishing; and Mike Morhaime, CEO of Blizzard Entertainment.
I would like to remind everyone that during this call, we will be making statements that are not historical facts. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. As indicated in the slide that is showing, a number of important factors could cause the company's actual future results and other future circumstances to differ materially from how they're described in any forward-looking statement. Such factors include, without limitation, sales levels; increasing concentration of titles; shifts in consumer spending trends; current macroeconomic and industry conditions, and conditions within the video game industry, or our ability to predict consumer preferences in our competing genres and hardware platforms; the seasonal and cyclical nature of our industry; changing business models, including digital and used games; competition; possible declines in pricing and product returns; price reception; product delays; adoption rate and availability of new hardware and related software; rapid changes in technology and industry standards; litigation and associated costs; protection of proprietary rights; maintenance of key relationships, including the ability to attract, retain and develop key personnel and developers that can create high-quality hit titles; counterparty risk; economic, financial and political conditions and policies; foreign exchange and tax rates; identification of acquisition opportunities; and potential changes associated with geographic expansion.
These important factors and other factors that potentially could affect the company's financial results are described in the company's annual report on Form 10-K for the period ending December 31, '09, and in the company's other SEC filings. The company may change its intentions, beliefs or expectations made at anytime and without notice, based upon any changes in such factors in the company's assumptions or otherwise. The company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after today, February 9, 2011, or to reflect the occurrence of unanticipated events.
I would also like to note that certain numbers we will be presenting today will be made on a non-GAAP basis, excluding the impact of change in deferred net revenues and related cost of sales, with respect to certain of our online-enabled games, expenses related to share-based payments, the operating results of products and operations from the historical events in gaming businesses that the company has exited or substantially wound down, costs related to the business consummation between Activision and Vivendi Games, the amortization of intangibles and impairment of intangible assets and the associated tax benefits.
Please refer to our earnings release, which is posted at www.activisionblizzard.com for full GAAP to non-GAAP reconciliation and further explanations. We have also, for the first time, included in the release, a statement of cash flows and a schedule that breaks out revenues by distribution channel, including Digital. Finally, there is a PowerPoint overview which you can access with the webcast and which will be posted to the website following the call.
And now, I would like to introduce our CEO, Bobby Kotick.
Thank you, Kristin, and thank you for joining us today, as we report the results of another extraordinarily successful year for our audiences and shareholders.
Activision Blizzard delivered another quarter and calendar year of better-than-expected financial results. For the year, we grew revenues, increased non-GAAP EPS by 15% to a new record and generated operating cash flow of $1.4 billion. This continued strong performance is only possible because of the thousands of extremely talented employees around the world, who continue to set the standard for innovation and execution, as we remain the world's most successful interactive entertainment company.
I want to highlight a few of the many successes we've had this year in 2010. We again succeeded in managing the largest launch of an entertainment property of all time, and we were once again the number one independent digital publisher and provider in interactive entertainment. We were also number one, again, in retail sales for the industry across North America and Europe, and we are very appreciative of the commitments our retail partners make and the support they continue to provide.
And we, of course, shattered launch records and grew the online audiences for Call of Duty, World of Warcraft and StarCraft beyond even our own expectations. We also continue to manage our capital with focus and discipline. Despite significant investment for our future, including new platforms, infrastructure and service capabilities, we returned $1.2 billion in value to our shareholders through our buyback and became the first independent game company ever to issue a dividend. Today, I'm happy to announce that our Board has authorized another repurchase program of $1.5 billion and confirmed our second-ever dividend with an increase of 10%.