Electronic Arts 2005 Annual Report Download - page 131

A summary of the Criterion assets acquired and liabilities assumed and the preliminary allocation of the
DICE assets acquired and liabilities assumed during the year ended March 31, 2005 is as follows
(in millions):
Criterion DICE Total
Current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 21 $ 35 $ 56
Property and equipment, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 1 2
Long-term deferred tax asset ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 Ì 3
Acquired in-process technology ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 4 13
Stock-based employee compensationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6 Ì 6
Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27 31 58
Finite-lived intangibles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 21 1 22
Liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (20) (9) (29)
Minority interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (11) (11)
Total consideration ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 68 $ 52 $120
Square Co., Ltd.
In May 1998, we completed the formation of two new joint ventures in North America and Japan with
Square Co., Ltd. (""Square''), a leading developer and publisher of entertainment software in Japan. In North
America, the companies formed Square Electronic Arts, LLC (""Square EA''), which had exclusive
publishing rights in North America for future interactive entertainment titles created by Square. Additionally,
we had the exclusive right to distribute in North America products published by this joint venture. We
contributed $3 million and owned a 30 percent minority interest in this joint venture while Square owned
70 percent. This joint venture was accounted for under the equity method. The joint venture agreements with
Square expired as of March 31, 2003. Our distribution of Square products in North America terminated on
June 30, 2003. On May 30, 2003, Square acquired our 30 percent ownership interest in the joint venture for
$8 million and the investment was removed from our Consolidated Balance Sheets.
In Japan, the companies established Electronic Arts Square K.K. (""EA Square KK'') in 1998, which
localized and published in Japan a selection of EA's properties originally created in North America and
Europe, as well as developed and published original video games in Japan. We contributed cash and had a
70 percent majority ownership interest, while Square contributed cash and owned 30 percent. Accordingly, the
Annual Report
assets, liabilities and results of operations for EA Square KK were included in our Consolidated Balance
Sheets and Consolidated Statements of Operations since June 1, 1998, the date of formation. Square's
30 percent interest in EA Square KK was reÖected as ""Minority interest'' on our Consolidated Balance Sheets
as of March 31, 2003, and Consolidated Statements of Operations for the year ended March 31, 2003.
In May 2003, we acquired Square's 30 percent ownership interest in EA Square KK for approximately
$3 million in cash. As a result of the acquisition, EA Square KK has become our wholly owned subsidiary and
has been renamed Electronic Arts K.K. The acquisition was accounted for as a step acquisition purchase and
the excess purchase price over fair value of the net tangible assets acquired, $1 million, was allocated to
goodwill.
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