Electronic Arts 2005 Annual Report Download - page 128

In accordance with EITF No. 03-1, the table above summarizes the fair value and gross unrealized losses of
our short-term investments, aggregated by investment category and by the length of time that individual
securities have been in a continuous unrealized loss position as of March 31, 2005. The gross unrealized losses
in each of these investment categories were primarily caused by interest rate changes. However, the
contractual terms of these securities do not permit the issuer to call, prepay or otherwise settle the securities at
prices less than the stated par value of the security. Accordingly, we do not consider these investments to be
other-than-temporarily impaired as of March 31, 2005.
Gross unrealized gains in short-term investments were less than $1 million as of March 31, 2005. Gross
unrealized gains and gross unrealized losses in short-term investments were both less than $1 million as of
March 31, 2004. No material gains or losses were recognized from the sale of short-term investments for the
years ended March 31, 2005, 2004 and 2003, respectively.
The following table summarizes the amortized cost and fair value of our short-term investments, classiÑed by
stated maturity as of March 31, 2005 (in millions):
Amortized Fair
Cost Value
Due in 1 year or less ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 698 $ 692
Due in 1-2 years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 799 787
Due in 2-3 years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 213 209
Short-term investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,710 $1,688
(c) Marketable Equity Securities
Marketable equity securities consisted of the following (in millions):
Gross Gross
Unrealized Unrealized
Cost Gains Losses Fair Value
As of March 31, 2005ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $93 $47 $Ì $140
As of March 31, 2004ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1 $Ì $Ì $ 1
Our investments in marketable equity securities consist of investments in common stock of publicly traded
companies. On February 3, 2005, we purchased approximately 19.9 percent of the outstanding ordinary shares
(18.4 percent of the voting rights) of Ubisoft Entertainment for $90 million. As the fair value of our
marketable equity securities exceed the cost basis of those investments as of March 31, 2005, we do not
consider these investments to be other-than-temporarily impaired. During Ñscal 2004, we recognized a
$1 million other-than-temporary impairment charge to write-down certain investments to their fair market
value. During Ñscal 2005 and 2003, no other-than-temporary impairment charges were recognized.
The sale of marketable equity securities resulted in gains of $2 million for both years ended March 31, 2005
and 2003. No material gains or losses were recognized from the sale of marketable equity securities for the
year ended March 31, 2004.
(d) Investments in AÇliates
As of March 31, 2005, investments in aÇliates included a warrant to acquire 2,327,602 additional shares of
Digital Illusions, C.E. (""DICE'') common stock. See Note 4 of the Notes to Consolidated Financial
Statements. The warrant is accounted for as a derivative instrument and is recorded at fair market value in
accordance with SFAS No. 133, ""Accounting for Derivative Instruments and Hedging Activities'', as amended,
with gains and losses resulting from changes in fair market value recorded in interest and other income, net in
the Consolidated Statements of Operations. As of March 31, 2005, the fair value of the warrant was
$5 million.
For cost method investments with an aggregate cost of $3 million, we estimated that the fair value exceeded
the cost basis of those investments. For the remaining $2 million, no adverse events or other impairment
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