Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Activision Blizzard Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Accounts payable	324)	285)	295)	292)	253)
Deferred revenues	2,088)	1,118)	1,689)	1,375)	1,493)
Accrued expenses and other liabilities	1,143)	1,008)	1,116)	1,248)	896)
Current liabilities	3,555)	2,411)	3,100)	2,915)	2,642)
Long-term debt, net	3,611)	3,608)	3,605)	2,675)	2,671)
Deferred income taxes, net	158)	506)	418)	505)	18)
Other liabilities	816)	932)	949)	945)	1,147)
Non-current liabilities	4,585)	5,046)	4,972)	4,125)	3,836)
Total liabilities	8,140)	7,457)	8,072)	7,040)	6,478)
Common stock, $0.000001 par value	—)	—)	—)	—)	—)
Additional paid-in capital	12,260)	11,715)	11,531)	11,174)	10,963)
Treasury stock, at cost	(5,563)	(5,563)	(5,563)	(5,563)	(5,563)
Retained earnings	13,171)	12,025)	9,691)	7,813)	6,558)
Accumulated other comprehensive loss	(625)	(578)	(622)	(619)	(601)
Shareholders’ equity	19,243)	17,599)	15,037)	12,805)	11,357)
Total liabilities and shareholders’ equity	27,383)	25,056)	23,109)	19,845)	17,835)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The balance sheet exhibits a consistent expansion in total assets and equity from 2018 through 2022, with total liabilities and shareholders' equity growing from 17,835 million US$ to 27,383 million US$. While total liabilities increased over the five-year period, the growth in shareholders' equity outpaced the growth of debt, suggesting an improving solvency position and a strengthening capital base.

Liability Structure and Trends: Total liabilities rose from 6,478 million US$ in 2018 to 8,140 million US$ in 2022. Current liabilities experienced volatility, reaching a peak of 3,555 million US$ in 2022, driven largely by a significant increase in deferred revenues, which climbed to 2,088 million US$ in the final year. Non-current liabilities peaked in 2021 at 5,046 million US$ before declining to 4,585 million US$ in 2022. This non-current trend was primarily influenced by long-term debt, which increased from 2,671 million US$ in 2018 to a stable plateau of approximately 3,611 million US$ from 2020 onward.
Equity Composition and Growth: Shareholders' equity demonstrated robust and uninterrupted growth, increasing from 11,357 million US$ in 2018 to 19,243 million US$ in 2022. The primary driver of this expansion was retained earnings, which doubled from 6,558 million US$ to 13,171 million US$ over the period, indicating strong cumulative profitability. Additional paid-in capital also saw a steady increase, reaching 12,260 million US$ by 2022. Conversely, treasury stock remained stagnant at 5,563 million US$ throughout the entire period, suggesting a cessation of new share buyback activity during these years.
Financial Leverage and Stability: A downward trend in financial leverage is observed when comparing total liabilities to shareholders' equity. In 2018, the ratio of total liabilities to equity stood at approximately 0.57; by 2022, this ratio decreased to approximately 0.42. This shift indicates that the company became less reliant on borrowed capital and more reliant on internal funding and equity to finance its operations and growth.
Deferred Tax and Other Obligations: Deferred income taxes showed significant fluctuations, increasing from 18 million US$ in 2018 to a peak of 506 million US$ in 2021, before dropping sharply to 158 million US$ in 2022. Other liabilities showed a gradual decline from 1,147 million US$ in 2018 to 816 million US$ in 2022, reflecting a reduction in miscellaneous non-current obligations.

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Activision Blizzard Inc. (NASDAQ:ATVI)

Balance Sheet: Liabilities and Stockholders’ Equity