Electronic Arts 2005 Annual Report Download - page 140

Employees'' in California as exempt employees and seeks injunctive relief, unspeciÑed monetary damages,
interest and attorneys' fees. The complaint was Ñrst amended on or about November 30, 2004 to add two
former employees as named-plaintiÅs, and amended again on or about January 5, 2005 to add another former
employee as a named-plaintiÅ. The allegations in the complaint were not materially changed by the
amendments.
On February 14, 2005, a second employment-related class action lawsuit, Hasty v. Electronic Arts Inc., was
Ñled against us in Superior Court in San Mateo, California. The complaint alleges that we improperly
classiÑed ""Engineers'' in California as exempt employees and seeks injunctive relief, unspeciÑed monetary
damages, interest and attorneys' fees. On or about March 16, 2005, we received a Ñrst amended complaint,
which contains the same material allegations as the original complaint. We answered the Ñrst amended
complaint on April 20, 2005.
On March 24, 2005, a purported class action lawsuit was Ñled against us and certain of our oÇcers and
directors. The complaint, which asserts claims under Section 10(b) and 20(a) of the Securities Exchange Act
of 1934 based on allegedly false and misleading statements, was Ñled in the United States District Court,
Northern District of California, by an individual purporting to represent a class of purchasers of EA common
stock. Additional purported class action lawsuits have been Ñled in the same court by other individuals
asserting the same claims against us. We have not yet responded to any of the complaints. In addition, on
April 12, 2005, a shareholder derivative action was Ñled against certain of our oÇcers and directors. This suit
asserts claims based on substantially the same factual allegations set forth in the federal class action lawsuits.
The complaint was Ñled in San Mateo Superior Court. On April 13, 2005, a second shareholder derivative
action was Ñled in San Mateo Superior Court based on the same claims as the Ñrst complaint. On May 16,
2005, a shareholder derivative action based on substantially the same allegations was Ñled in the United States
District Court, Northern District of California. We have not responded to the shareholder derivative
complaints.
In addition, we are subject to other claims and litigation arising in the ordinary course of business. Our
management considers that any liability from any reasonably foreseeable disposition of such other claims and
litigation, individually or in the aggregate, would not have a material adverse eÅect on our consolidated
Ñnancial position or results of operations.
Director Indemnity Agreements
We have entered into indemniÑcation agreements with the members of our Board of Directors to indemnify
them to the extent permitted by law against any and all liabilities, costs, expenses, amounts paid in settlement
and damages incurred by the directors as a result of any lawsuit, or any judicial, administrative or investigative
proceeding in which the directors are sued as a result of their service as members of our Board of Directors.
(10) INCOME TAXES
Our pretax income from operations for the Ñscal years ended March 31, 2005, 2004 and 2003 consisted of the
following components (in millions):
Year Ended March 31,
2005 2004 2003
DomesticÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $386 $490 $222
Foreign ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 339 307 239
Income before provision for income taxes and minority interest ÏÏÏÏÏÏÏÏÏÏÏÏÏ $725 $797 $461
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