Electronic Arts 2005 Annual Report Download - page 102

The following table summarizes our minimum contractual obligations and commercial commitments as of
March 31, 2005, and the eÅect we expect them to have on our liquidity and cash Öow in future periods (in
millions):
Contractual Obligations Commercial Commitments
Developer/ Letters
Fiscal Year Licensor Bank and of
Ended March 31, Leases(1) Commitments(2) Marketing Other Guarantees Credit Total
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 30 $ 134 $ 33 $4 $1 $ 202
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24 131 34 Ì Ì 189
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20 128 30 Ì Ì 178
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15 136 30 Ì Ì 181
2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12 124 31 Ì Ì 167
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35 830 197 Ì Ì 1,062
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $136 $1,483 $355 $4 $1 $1,979
(1) See discussion on operating leases in the ""OÅ-Balance Sheet Commitments'' section herein and Note 9 of
the Notes to Consolidated Financial Statements, included in Item 8 of this report, for additional
information.
(2) Developer/licensor commitments include $50 million of commitments to developers or licensors that have
been included in both current and long-term assets and liabilities in our Consolidated Balance Sheets as of
March 31, 2005 because the developer or licensor does not have any performance obligations to us. In
addition, our developer/licensor and marketing commitments increased signiÑcantly in the latter half of
Ñscal 2005 primarily as a result of agreements we renewed with the National Football League and
PLAYERS Inc., as well as an exclusive, long-term agreement we entered into with ESPN Inc. (""ESPN'')
for the development and integrated marketing of ESPN content in EA SPORTS games beginning in
calendar 2006. While our commitments with ESPN are not contractually due until Ñscal 2011 and beyond
and are presented as such in the table above, we anticipate paying these commitments earlier as we publish
titles associated with the agreement.
The lease commitments disclosed above exclude commitments included in our restructuring activities for
contractual rental commitments of $23 million under real estate leases for unutilized oÇce space, oÅset by
$13 million of estimated future sub-lease income. These amounts were expensed in the periods of the related
restructuring and are included in our accrued and other liabilities reported on our Consolidated Balance
Sheets as of March 31, 2005. See Note 6 of the Notes to Consolidated Financial Statements, included in
Item 8 of this report, for additional information.
Transactions with Related Parties
On June 24, 2002, we hired Warren Jenson as our Chief Financial and Administrative OÇcer and agreed to
loan him $4,000,000, to be forgiven over four years based on his continuing employment. The loan does not
bear interest. On June 24, 2004, pursuant to the terms of the loan agreement, we forgave two million dollars of
the loan and provided Mr. Jenson approximately $1.6 million to oÅset the tax implications of the forgiveness.
As of March 31, 2005, the remaining outstanding loan balance was $2,000,000, which will be forgiven on
June 24, 2006, provided that Mr. Jenson has not voluntarily resigned his employment with us or been
terminated for cause prior to that time. No additional funds will be provided to oÅset the tax implications of
the forgiveness of the remaining two million dollars.
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