Electronic Arts 2006 Annual Report Download - page 165

The following table summarizes our minimum contractual obligations and commercial commitments as of
March 31, 2006 (in millions):
Commercial
Contractual Obligations Commitments
Developer/ Other Letter of Credit,
Licensor Purchase Bank and
Fiscal Year Ending March 31, Leases Commitments(1) Marketing Obligations Other Guarantees Total
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 36 $ 155 $ 45 $7 $4 $ 247
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28 144 30 Ì Ì 202
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24 152 31 Ì Ì 207
2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18 140 31 Ì Ì 189
2011 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 275 31 Ì Ì 320
ThereafterÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30 700 186 Ì Ì 916
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $150 $1,566 $354 $7 $4 $2,081
(1) 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.
Total rent expense for all operating leases was $59 million, $41 million and $27 million, for the Ñscal years
ended March 31, 2006, 2005 and 2004, respectively.
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.
Litigation
On February 14, 2005, an employment-related class action lawsuit, Hasty v. Electronic Arts Inc., was Ñled
against the company 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
Annual Report
monetary damages, interest and attorneys' fees. On May 16, 2006, the court granted its preliminary
approval of a settlement pursuant to which we agreed to make a lump sum payment of $14.9 million, to
be paid to a third-party administrator, to cover (a) all claims allegedly suÅered by the class members,
(b) plaintiÅs' attorneys' fees, not to exceed 25% of the total settlement amount, (c) plaintiÅs' costs and
expenses, (d) any incentive payments to the named plaintiÅs that may be authorized by the court, and
(e) all costs of administration of the settlement. The hearing for the court to consider its Ñnal approval of
the settlement is set for September 22, 2006.
Each of the shareholder actions we have previously disclosed have been voluntarily dismissed by all
plaintiÅs. The federal securities class action complaint has been dismissed with prejudice, by an order
dated January 26, 2006; the federal derivative action has been dismissed, by an order dated March 10,
2006; and the two state derivative actions have been dismissed, by orders dated May 4, 2006 and May 8,
2006.
In addition, we are subject to other claims and litigation arising in the ordinary course of business. We
believe 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.
93