Electronic Arts 2001 Annual Report Download - page 34

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32
2001 AR
INTEREST RATE RISK Our exposure to market rate risk for changes in interest rates relates primarily to our
investment portfolio. We do not use derivative financial instruments in our investment portfolio. We manage our
interest rate risk by maintaining an investment portfolio primarily consisting of debt instruments of high credit
quality and relatively short average maturities. We also manage our interest rate risk by maintaining sufficient
cash and cash equivalent balances such that we are typically able to hold our investments to maturity. At March
31, 2001, our cash equivalents, short-term and long-term investments included debt securities of $404,696,000.
Notwithstanding our efforts to manage interest rate risks, there can be no assurances that we will be adequately
protected against the risks associated with interest rate fluctuations.
The table below presents the amounts and related weighted average interest rates of our investment portfolio at
March 31, 2001:
(Dollars in thousands)
Average Interest Rate Cost Fair Value
Cash equivalents(1)
Fixed rate 5.16 % $ 91,879 $ 91,879
Variable rate 5.12 % $ 257,737 $ 257,737
Short-term investments(1)(2)
Fixed rate 3.93 % $ 46,346 $ 46,680
Variable rate 0.00 % $ – $ –
Long-term investments(1)
Fixed rate 0.00 % $ – $ –
Variable rate 6.35 % $ 8,400 $ 8,601
(1) See definition in note 1 of the Notes to the Consolidated Financial Statements.
(2) Maturity dates for short-term investments range from 3 months to 16 months.