Electronic Arts 2006 Annual Report Download - page 131

The following table summarizes our minimum contractual obligations and commercial commitments as of
March 31, 2006, and the eÅect we expect them to have on our liquidity and cashÖow in future periods (in
millions):
Commercial
Contractual Obligations Commitments
Developer/ Letter of Credit,
Licensor Other Purchase Bank and Other
Fiscal Year Ending March 31, Leases(1) Commitments(2) Marketing Obligations Guarantees Total
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 36 $ 155 $ 45 $ 7 $ 4 $ 247
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28 144 30 Ì Ì 202
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24 152 31 Ì Ì 207
2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18 140 31 Ì Ì 189
2011 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 275 31 Ì Ì 320
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏ 30 700 186 Ì Ì 916
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $150 $1,566 $354 $ 7 $ 4 $2,081
(1) See discussion on operating leases in the ""OÅ-Balance-Sheet Commitments'' section below for
additional information.
(2) Developer/licensor commitments include $9 million of commitments to developers or licensors that
have been recorded in current and long-term liabilities and a corresponding amount in current and
long-term assets in our Consolidated Balance Sheet as of March 31, 2006 because payment is not
contingent upon performance by the developer or licensor.
The lease commitments disclosed above include contractual rental commitments of $25 million under real
estate leases for unutilized oÇce space resulting from our restructuring activities. These amounts, net of
estimated future sub-lease income, were expensed in the periods of the related restructuring and are
included in our accrued and other current liabilities reported on our Consolidated Balance Sheet as of
March 31, 2006. See Note 6 of the Notes to Consolidated Financial Statements.
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 million 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 $2 million of
Annual Report
the loan and provided Mr. Jenson approximately $1.6 million to oÅset the tax implications of the
forgiveness. As of March 31, 2006, the remaining outstanding loan balance was $2 million, 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 $2 million.
OFF-BALANCE SHEET COMMITMENTS
Lease Commitments and Residual Value Guarantees
We lease certain of our current facilities and equipment under non-cancelable operating lease agreements.
We are required to pay property taxes, insurance and normal maintenance costs for certain of these
facilities and will be required to pay any increases over the base year of these expenses on the remainder
of our facilities.
In February 1995, we entered into a build-to-suit lease (""Phase One Lease'') with a third party for our
headquarters facilities in Redwood City, California (""Phase One Facilities''). The Phase One Facilities
comprise a total of approximately 350,000 square feet and provide space for sales, marketing,
administration and research and development functions. In July 2001, we reÑnanced the Phase One Lease
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