Electronic Arts 2006 Annual Report Download - page 152

stated par value of the security. Accordingly, we do not consider these investments to be other-than-
temporarily impaired as of March 31, 2006.
Gross unrealized gains in short-term investments were less than $1 million as of March 31, 2006 and 2005.
Realized losses of $9 million were recognized from the sale of short-term investments for the year ended
March 31, 2006. No material gains or losses were recognized from the sale of short-term investments for
the years ended March 31, 2005 and 2004.
The following table summarizes the amortized cost and fair value of our short-term investments, classiÑed
by stated maturity as of March 31, 2006 (in millions):
Amortized Fair
Cost Value
Due in 1 year or less ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 510 $ 506
Due in 1-2 years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 245 243
Due in 2-3 years ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 282 281
Short-term investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,037 $1,030
(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, 2006ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $91 $69 $Ì $160
As of March 31, 2005ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $93 $47 $Ì $140
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 $91 million. As the fair value of
our marketable equity securities exceed the cost basis of those investments as of March 31, 2006, we do
not consider these investments to be other-than-temporarily impaired. During Ñscal 2005, no other-than-
temporary impairment charges were recognized. During Ñscal 2004, we recognized a $1 million other-than-
temporary impairment charge to write-down certain investments to their fair market value.
Realized gains from the sale of marketable equity securities were $1 million and $2 million for the years
ended March 31, 2006 and 2005, respectively. 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, 2006 and 2005, the total investment in aÇliates reÖected on our Consolidated Balance
Sheets was $11 million and $10 million, respectively.
Our 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. Prior to
April 2005, the warrant was accounted for as a derivative under SFAS No. 133. The warrant was amended
in April 2005, such that only subscriptions of 500,000 or more could be exercised. Due to the limited
trading volume of DICE's common stock, there is no market mechanism for settlement and the warrant is
no longer readily convertible to cash and is therefore currently accounted for under the cost method as
prescribed by APB No. 18. As of March 31, 2006, the cost basis of the warrant was $5 million.
For cost method investments we estimated that the fair value exceeded the cost basis of those investments.
Accordingly, we do not consider these investments to be other-than-temporarily impaired as of March 31,
2006. During Ñscal 2006, 2005 and 2004, no other-than-temporary impairments in investments in aÇliates
were recognized.
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