Activision Blizzard just released their 2017 investor report, and it paints an interesting picture of the publishing behemoth. For example, the company currently has $4.4 billion in long-term debt outstanding. While that certainly is a lot of money (even to a business as large as Activision), it isn’t uncommon for successful businesses to have long-term debt outstanding. It’s also worth noting that the amount is down from previous years, as the company had $5.9 billion in debt. Still, Activision says that their “debt burden could have important consequences” in the future.
Here’s the relevant portion of Activision’s investor report titled “Our debt could negatively affect our business”:
As of December 31, 2017, the Company had approximately $4.4 billion of long-term debt outstanding. Our debt burden could have important consequences, including: increasing our vulnerability to general adverse economic and industry conditions; limiting our flexibility in planning for, or reacting to, changes in our business and our industry; requiring the dedication of a substantial portion of any cash flow from operations for the payment of principal and interest on our indebtedness, thereby reducing the availability of cash flow to fund our operations, growth strategy, working capital, capital expenditures, future business opportunities, and other general corporate purposes; exposing us to the risk of increased interest rates with respect t...