Electronic Arts 1999 Annual Report Download - page 39

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NOTE 9: PROPERTY AND EQUIPMENT
Property and equipment at March 31, 1999 and 1998 consisted of:
(In thousands) 1999 1998
Computer equipment $ 127,330 $ 105,183
Buildings 62,413 31,239
Land 50,570 14,885
Office equipment, furniture and fixtures 21,296 18,670
Leasehold improvements 5,749 12,071
Warehouse equipment and other 3,813 4,414
271,171 186,462
Less accumulated depreciation and amortization (89,905) (81,367)
$ 181,266 $ 105,095
Depreciation and amortization expenses associated with property and equipment amounted to $34,581,000, $26,215,000
and $22,332,000, for the fiscal years ended March 31, 1999, 1998 and 1997, respectively.
NOTE 10: ACCRUED LIABILITIES
Accrued liabilities at March 31, 1999 and 1998 consisted of:
(In thousands) 1999 1998
Accrued expenses $ 46,595 $ 25,872
Accrued compensation and benefits 46,541 29,318
Accrued royalties 36,429 36,830
Accrued income taxes 23,724 26,095
Deferred revenue 8,206 2,797
Warranty reserve 7,900 3,462
Deferred income taxes 2,933 1,106
$ 172,328 $ 125,480
NOTE 11: BUSINESS COMBINATIONS AND DIVESTITURE
(a) Westwood Studios
In September 1998, the Company completed the acquisition of Westwood Studios, Inc. and certain assets of the Irvine,
California–based Virgin Studio (collectively “Westwood”) for approximately $122,688,000 in cash, including trans-
action expenses. The adjusted allocation of the excess purchase price over the net tangible liabilities assumed was
$128,573,000 of which, based on management’s estimates prepared in conjunction with a third party valuation consultant,
$41,836,000 was allocated to purchased in-process research and development and $86,737,000 was allocated to other
intangible assets. Amounts allocated to other intangibles include franchise trade names of $32,357,000, existing technology
of $6,510,000, workforces of $1,680,000 and other goodwill of $46,190,000 and are being amortized over lives ranging from
two to twelve years. Purchased in-process research and development includes the value of products in the development
stage that are not considered to have reached technological feasibility or to have alternative future use. Accordingly, this
non-recurring item was expensed in the Consolidated Statement of Income upon consummation of the acquisition.