Electronic Arts 2007 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    Stockholder Letter ELECTRONIC ARTS INC. Stockholder Letter

  • Page 3
    ... Sims - created in Redwood Shores, California, this team delivered new games and content for the world's most popular PC franchise, crossed onto new platforms including mobile phones and is developing original titles for the Wii and Nintendo DS (NDS) handheld system. • Madden NFL - developed by EA...

  • Page 4
    .... Overall, EA's business reflects a good balance between the present and future - we continue to generate industry-leading revenue from our traditional business while our investments incubate and contribute new sources of revenue, including mobile games and online advertising. Our net revenue was...

  • Page 5
    ... of our own creative people, licensed properties from other media like sports and movies, and publishing and distribution partnerships with independent developers. Our teams have created a fantastic legacy of wholly-owned blockbuster franchises like The Sims, Need for Speed, Battlefield, Burnout and...

  • Page 6
    ... the sports experience with new content, new services and online integration. EA CASUAL ENTERTAINMENT - This label will foster games made for non-traditional EA consumers - young people, older people and women and girls. It will include the casual offerings on our Pogo.com site, our mobile division...

  • Page 7
    ... of our company. Sincerely, John S. Riccitiello Chief Executive Officer This Letter to Stockholders, as well as the discussion under the headings "Business" and "Management's Discussion and Analysis" included in our Annual Report on Form 10-K for the year ended March 31, 2007, as well as the...

  • Page 8
    Proxy Statement ELECTRONIC ARTS INC. Notice of 2007 Annual Meeting and Proxy Statement

  • Page 9
    ... shares via the Internet or a toll-free telephone number. Instructions for using these services are provided on your proxy card. I look forward to seeing you at the meeting. Sincerely, Proxy Statement John S. Riccitiello Chief Executive Officer WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING...

  • Page 10
    Notice of 2007 Annual Meeting of Stockholders DATE: TIME: PLACE: July 26, 2007 2:00 p.m. ELECTRONIC ARTS' HEADQUARTERS Building 250* 209 Redwood Shores Parkway Redwood City, CA 94065 * Please note: Building 250 is located on the headquarters campus at 250 Shoreline Drive MATTERS TO BE VOTED UPON: 1....

  • Page 11
    ... 2000 EMPLOYEE STOCK PURCHASE PLAN ...PROPOSAL 4 - APPROVAL OF THE ELECTRONIC ARTS INC. EXECUTIVE BONUS PLAN...PROPOSAL 5 - RATIFICATION OF THE APPOINTMENT OF KPMG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ...REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS ...PRINCIPAL STOCKHOLDERS...

  • Page 12
    ... as EA's next annual report and proxy statement are available on the Internet, and you can easily submit your stockholder votes online. Electronic delivery can also help reduce the number of bulky documents in your personal files and eliminate duplicate mailings. To sign up for electronic delivery...

  • Page 13
    ...it. If you have questions about electronic delivery, please contact our Investor Relations department at 650-628-7352. COMMONLY ASKED QUESTIONS AND ANSWERS Why am I receiving this proxy statement and proxy card? This proxy statement describes proposals on which you, as a stockholder, are being asked...

  • Page 14
    ...any stockholder who wants to vote at the meeting. However, if you hold your shares in street name, you must obtain a proxy from the institution that holds your shares in order to vote at the meeting. What does it mean if I receive more than one proxy card? It means that you have multiple accounts at...

  • Page 15
    ... of the votes cast, meaning that the persons receiving the highest number of "for" votes, up to the total number of directors to be elected at the Annual Meeting, will be elected. In accordance with our Corporate Governance Guidelines, the Board expects an incumbent director to tender his or her...

  • Page 16
    ... public reference room. You can also get a copy on the Internet at http://investor.ea.com or through the SEC's electronic data system called EDGAR at www.sec.gov. Why are you amending the Equity Plan? We are proposing to amend the Equity Plan to increase by 9 million shares the number of shares...

  • Page 17
    ...of the Electronic Arts Inc. Executive Bonus Plan below. Who will pay for this proxy solicitation? We will bear the costs of soliciting proxies from our stockholders. These costs include preparing, assembling, printing, mailing and distributing the proxy statements, proxy cards and annual reports. If...

  • Page 18
    ... a process led by Lawrence F. Probst III, our Chairman of the Board and former Chief Executive Officer, and Gary M. Kusin, our Lead Director. At the time of Mr. Riccitiello's appointment to the Board, the authorized size of our Board was temporarily increased from nine to ten directors. In May 2007...

  • Page 19
    .../Nets. Mr. Coleman was President of The National League of Professional Baseball Clubs from 1994 to 1999, having previously served since 1992 as Executive Director, Market Development of Major League Baseball. Mr. Coleman serves on the Board of Directors of the following public companies: Avis...

  • Page 20
    ...provider of integrated business, technology and process solutions, and Chief Executive Officer of Wipro Technologies, Wipro's global information technology, product engineering, and business process services segments. From January 1996 to July 1999, Mr. Paul was General Manager of Global CT Business...

  • Page 21
    ...the University of California, Berkeley. Richard A. Simonson Director since 2006 Mr. Simonson, age 47, has served as Executive Vice President and Chief Financial Officer of Nokia Corporation, a manufacturer of mobile devices and a leader in mobile network equipment, solutions and services, since 2004...

  • Page 22
    ... Report of the Audit Committee of the Board of Directors below. Compensation Committee The Compensation Committee is responsible for setting the overall compensation strategy for the Company, for determining the compensation of the CEO (via recommendation to the Board) and other executive officers...

  • Page 23
    ... Report on Executive Compensation below. Nominating and Governance Committee The Nominating and Governance Committee is responsible for recommending to the Board nominees for election to the Board of Directors, for appointing directors to Board Committees, and for reviewing developments in corporate...

  • Page 24
    ...so by writing to EA's Corporate Secretary at 209 Redwood Shores Parkway, Redwood City, CA 94065, Attn: Director Nominations. To be considered by the Nominating and Governance Committee in connection with EA's annual meeting of stockholders, recommendations must be submitted in writing to EA not less...

  • Page 25
    ... a committee of the Board, or with an individual director by sending a letter to EA's Corporate Secretary at Electronic Arts Inc., 209 Redwood Shores Parkway, Redwood City, CA 94065, or by sending an email to [email protected]. All stockholder communications received will be handled...

  • Page 26
    ... initially elected at the 2006 Annual Meeting, was granted an option to purchase 25,000 shares. All stock options were granted on July 27, 2006, the date of the directors' re-election to the Board, at an exercise price of $46.84 per share. In February 2007, each non-employee director was granted 700...

  • Page 27
    ... used to calculate the fair value of EA's stock options, see note 12, "StockBased Compensation and Employee Benefit Plans", of the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2007. In fiscal 2007, each non-employee director, other...

  • Page 28
    ... to stand for re-election at the 2006 Annual Meeting of Stockholders and therefore only served on the Board for a portion of fiscal 2007 (April 2, 2006 through July 27, 2006). Mr. Simonson elected to receive 30% of his compensation as cash and the remainder as shares of EA common stock. (7) 17

  • Page 29
    ... equity compensation helps encourage a long-term view in an industry that is subject to lengthy business cycles. Equity incentives such as stock options and restricted stock units also play an important role in our recruitment and retention strategies, as the competition for creative and technical...

  • Page 30
    ... by executive officers and other employees are discretionary and are therefore not determinable at this time. Required Vote and Board of Directors' Recommendation Approval of this proposal requires the affirmative vote of a majority of the voting shares present at the meeting in person or by proxy...

  • Page 31
    ... was approved by the stockholders on July 27, 2000, provides our employees with a convenient means of purchasing equity in the Company through payroll deductions. It also provides an incentive for continued employment. Since its adoption, 6,800,000 shares of common stock have been reserved for...

  • Page 32
    ... Annual Meeting. Stockholder approval of the Executive Bonus Plan will allow bonuses paid under it to be considered "performance-based compensation" within the meaning of Section 162(m) of the Code and therefore fully deductible by Electronic Arts for federal income tax purposes. The Board believes...

  • Page 33
    ... presented in any Electronic Arts press release or Form 8-K filing relating to an earnings announcement; asset write-downs; litigation or claim judgments or settlements; the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results; accruals for...

  • Page 34
    ... Officers in fiscal 2007. Though no participants have been definitively identified as of the filing of this proxy statement, our Compensation Committee intends to choose participants in the Executive Bonus Plan and set their bonus amounts in the near future. Required Vote and Board of Directors...

  • Page 35
    ... of EA and its subsidiaries is valuable to the Company. Representatives of KPMG LLP have direct access to members of the Audit Committee and the Board. Representatives of KPMG LLP will attend the Annual Meeting in order to respond to appropriate questions from stockholders, and may make a statement...

  • Page 36
    ...compliance and returns, and transfer pricing documentation, as well as planning and advice which consists primarily of technical tax consulting. Other: In fiscal 2007, this category included accounting due diligence related to potential business combinations. No products or services were provided in...

  • Page 37
    ... light of its role and responsibilities, the Audit Committee recommended to the Board of Directors that the audited financial statements of the Company as of and for each of the last three years ended March 31, 2007 be included for filing with the SEC in the Company's Annual Report on Form 10-K for...

  • Page 38
    ... shares of our common stock outstanding. Except as otherwise indicated, the address for each of our directors and executive officers is c/o Electronic Arts Inc., 209 Redwood Shores Parkway, Redwood City, CA 94065. Shares Owned(1)(2) Right to Acquire(3) Percent of Outstanding Shares(4) Stockholder...

  • Page 39
    ...of common stock held by VPL Investments, of which Mr. Lee is the sole shareholder, and 12,803 shares held by Briel Investments, of which Mr. Lee is the sole shareholder. Mr. Lasky ceased serving as an executive officer of EA on April 2, 2007. Includes all executive officers and directors of EA as of...

  • Page 40
    ...equity grants to employees below the Senior Vice President level, up to an annual grant limit of stock options to purchase 30,000 shares or 10,000 restricted stock units ("RSU Awards"), using vesting schedules previously approved by the Compensation Committee. The Management Committee reports on its...

  • Page 41
    ... the Board of Directors). Role of Company Management in Establishing Executive Compensation Certain of our executives are involved in the development and recommendation of executive compensation levels to the Committee and/or the Board. Our Executive Vice President of Human Resources is responsible...

  • Page 42
    ... Named Executive Officers, received a salary increase during the Committee's May 2007 compensation review. Employee salary increases, including those for executives, were pro-rated to account for the additional time between the last annual review on February 15, 2006 and the new annual review date...

  • Page 43
    ... business cycles. Equity incentives such as stock options and restricted stock units also play an important role in our recruitment and retention strategies, as the competition for creative and technical talent and leadership in our industry is intense. Historically, the Compensation Committee...

  • Page 44
    ... cash bonus awards, and reviewed and approved annual equity compensation grants at its February 2006 meeting. In an effort to retain and motivate a select group of key employees, including certain executive officers, in June 2006, our Compensation Committee approved the Retention Award Program...

  • Page 45
    ...as Chief Executive Officer. Warren C. Jenson - Chief Financial and Administrative Officer In February 2006, the Compensation Committee reviewed and approved the following compensation actions for Mr. Jenson: • A merit salary increase of 3.5% to $569,400 • A stock option to purchase 52,500 shares...

  • Page 46
    ... - Executive Vice President, General Manager, International Publishing In February 2006, the Compensation Committee reviewed and approved the following compensation actions for Dr. Florin: • A merit salary increase of 3.5% to 325,663 British pounds • A stock option to purchase 35,000 shares...

  • Page 47
    ...50% of the shares on the third anniversary In September 2006, Mr. Lasky was promoted to Executive Vice President of EA Mobile. In connection with his promotion, the Compensation Committee reviewed and approved the following compensation actions for Mr. Lasky: • A promotional salary increase of $25...

  • Page 48
    ... 2004, the Board of Directors implemented EA stock ownership requirements for all Section 16 executive officers. These ownership requirements are based on multiples of the executive's base pay, ranging from one to six times the executive's annual salary depending on the executive's level within...

  • Page 49
    ...'s cash compensation and the cash payments he received for cancelled shares of JAMDAT restricted stock that would have vested during fiscal 2007. Pursuant to recent guidance from the Internal Revenue Service, Mr. Jenson, our Chief Financial Officer, is not considered to be a covered employee for...

  • Page 50
    ... C. JENSON ...Executive Vice President, Chief Financial and Administrative Officer V. PAUL LEE ...President, Worldwide Studios GERHARD FLORIN ...Executive Vice President and General Manager, International Publishing MITCH LASKY ...Executive Vice President, EA Mobile(9) (1) (2) . 2007 738,462 993...

  • Page 51
    ... and assumptions used to calculate the fair value of EA's stock options, see note 12, "Stock-Based Compensation and Employee Benefit Plans", of the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2007. For additional information regarding the...

  • Page 52
    ... information regarding the valuation methodology used by EA, see note 12, "Stock-Based Compensation and Employee Benefit Plans", of the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2007. Restricted stock unit vests as to 25% of the shares...

  • Page 53
    ...Executive Officers as of the end of fiscal 2007. Option Awards Number of Securities Underlying Unexercised Options (#)(1) Exercisable Number of Securities Underlying Unexercised Options (#)(1) Unexercisable Stock Awards Market Number of Value of Shares or Shares...2015 3/1/2016 9/24/2008 8/13/2009 9/29...

  • Page 54
    ... the number of unvested restricted stock units by $50.36, the closing price of EA's common stock on March 30, 2007, the last trading day of our fiscal year. Granted pursuant to EA's 1991 Stock Option Plan. Option vests and becomes exercisable as to 2% of the original grant each month until...

  • Page 55
    ... 2007. Shares of EA common stock, net of shares withheld for tax purposes, are issued upon vesting of restricted stock units. The value realized upon vesting of restricted stock units is calculated by multiplying the number of restricted stock units vested by the closing price of EA common stock...

  • Page 56
    ... Plan. (4) Proxy Statement (5) See also Note 12 to the Consolidated Financial Statements included in EA's Annual Report on Form 10-K for the period ended March 31, 2007 for additional information about these plans. OTHER INFORMATION RELATED PERSON TRANSACTIONS POLICY Our Board of Directors has...

  • Page 57
    ...a member of the board of directors or the compensation committee of a company at which a member of EA's Compensation Committee is an employee or officer. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires EA's directors and executive...

  • Page 58
    ... principal executive office no later than February 21, 2008. Stockholders who otherwise wish to present a proposal at the 2008 Annual Meeting of Stockholders must deliver written notice of the proposal to our Corporate Secretary c/o Electronic Arts Inc., 209 Redwood Shores Parkway, Redwood City, CA...

  • Page 59
    ...at any adjournment or postponement of the Annual Meeting, it is intended that the proxies will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. By Order of the Board of Directors, Stephen G. Bené Senior Vice President, General Counsel and Secretary 48

  • Page 60
    ...of the net settlement of a stock option or stock appreciation right; (y) shares that are used to pay the exercise price or withholding taxes related to an award granted under the Equity Plan; and (z) shares that are repurchased by us with the proceeds of a stock option exercise. The number of shares...

  • Page 61
    ... than 110% of the fair market value of a share of common stock at the time the incentive stock option is granted. The exercise price of options and purchase price of shares granted under the Equity Plan may be paid as approved by the Compensation Committee at the time of grant: (a) in cash (by check...

  • Page 62
    ... is an award which provides the holder with the right to receive the appreciation in value of a set number of shares of company stock over a set period of time. A SAR is similar to an option in that the holder benefits from any increases in stock price above the exercise price set forth in the award...

  • Page 63
    ...margin; (e) net income; (f) earnings per share; (g) total stockholder return; (h) the Company's stock price; (i) growth in stockholder value relative to a pre-determined index; (j) return on equity; (k) return on invested capital; (l) operating cash flow; (m) free cash flow; (n) economic value added...

  • Page 64
    ... for certain items, increasing that income by certain tax preference items (including the difference between the fair market value of the ISO Shares on the date of exercise and the exercise price) and reducing this amount by the applicable exemption amount. The exemption amount for 2007 is $45,000...

  • Page 65
    ... taxable income at the time a nonqualified stock option ("NQSO") is granted or vests provided the exercise price is no less than the fair market value of the underlying shares on the grant date. Upon exercise of a vested NQSO, the participant will include in income as compensation an amount equal to...

  • Page 66
    ...of the Company's authorized common stock have been reserved for issuance under the Equity Plan. Proposed Amendments to the Equity Plan At the 2007 Annual Meeting, stockholders will be asked to approve amendments to the Equity Plan as follows: • Increase the number of shares authorized and reserved...

  • Page 67
    ... the purchase price were determined by using 85% of the fair market value of a share of the Company's common stock on the Offering Date or (b) the maximum number of shares set by the Board. In addition, no employee may purchase shares at a rate that, when aggregated with all other rights to purchase...

  • Page 68
    ... fair market value of the shares on the Purchase Date. The fair market value of the common stock on a given date is the closing price of the common stock on the immediately preceding business day as quoted on the NASDAQ Global Select Market. Purchase of Stock. The number of whole shares an employee...

  • Page 69
    ...Plan. Proposed Amendment of the 2000 Employee Stock Purchase Plan Proxy Statement At the 2007 Annual Meeting, stockholders will be asked to approve an amendment to the Purchase Plan to increase by 1,500,000 the number of shares of the Company's common stock reserved for issuance under the Purchase...

  • Page 70
    ... C ELECTRONIC ARTS INC. EXECUTIVE BONUS PLAN Adopted by the Board of Directors May 29, 2007 Effective April 1, 2007 1. Purpose. The purpose of this Plan is to provide certain employees of the Company and its subsidiaries with incentive compensation based upon the level of achievement of financial...

  • Page 71
    ... of research and development milestones, improvements in productivity, attainment of objective operating goals and employee metrics. (m) "Performance Period" means any Fiscal Year or such other period as determined by the Committee. (n) "Plan" means this Electronic Arts Inc. Executive Bonus...

  • Page 72
    ...as reflected in any Electronic Arts press release and Form 8-K filing relating to an earnings announcement, (C) asset write-downs, (D) litigation or claim judgments or settlements, (E) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results...

  • Page 73
    ... employ of the Company or any of its Affiliates, and the right of the Company and any such Affiliate to dismiss such Participant or to terminate any arrangement pursuant to which any such Participant provides services to the Company, with or without cause, is specifically reserved. No person shall...

  • Page 74
    ELECTRONIC ARTS INC. 2007 Annual Report on Form 10-K Annual Report

  • Page 75
    ... Shores Parkway Redwood City, California (Address of principal executive offices) 94065 (Zip Code) Registrant's telephone number, including area code: (650) 628-1500 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, $0.01 par value Name of Each Exchange...

  • Page 76
    ...III Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters...Certain Relationships and Related Transactions, and Director Independence ...Principal Accounting Fees and Services...

  • Page 77
    ...», and Annual Report • Online (over the Internet and other proprietary online networks). We also sell advertising in many of our games and on our websites. We refer to consoles, PCs, mobile platforms and online collectively as "platforms". In fiscal 2007, we developed or published products for...

  • Page 78
    ... 2006. In fiscal 2007, we released over 190,000 stock keeping units, or SKUs (a version of a title designed for play on a particular platform), for cellular handsets. Co-publishing, Distribution and Third Party Development Through our EA Partners group, we team with other game development companies...

  • Page 79
    ...), electronics specialty stores (such as Best Buy) or game software specialty stores (such as GameStop). Many of our PC products can also be purchased over the Internet through digital download. We generated approximately 95 percent of our North American packaged goods net revenue from direct sales...

  • Page 80
    ... us. The wireless distribution of our games eliminates traditional publishing complexities, including physical production, packaging, shipping, inventory management and return processing. Our customers may also purchase and download games directly from our website. Many of our games are designed to...

  • Page 81
    ... in-game content, access to distribution channels, effectiveness of marketing and price. In addition to competing for product sales, we face heavy competition from other software game companies and large media companies to obtain license agreements granting us the right to use intellectual property...

  • Page 82
    ... of our products is dependent on our ability to continue to obtain the intellectual property rights from the owners of these rights at reasonable rates. Our products are susceptible to unauthorized copying. We typically distribute our PC products using copy protection technology that we license from...

  • Page 83
    .... Under the terms of agreements we have entered into with Microsoft Corporation and its affiliates, we are authorized to develop and distribute DVD-based software products and online content compatible with the Xbox and Xbox 360. Nintendo. Under the terms of agreements we have entered into with...

  • Page 84
    ..., Business and Legal Affairs Executive Vice President, General Manager, The Sims Franchise Executive Vice President, Human Resources Senior Vice President, Chief Accounting Officer Senior Vice President, General Counsel and Corporate Secretary Senior Vice President and General Manager, EA Mobile...

  • Page 85
    ... of Distinctive Software Inc. until it was acquired by Electronic Arts in 1991. Mr. Lee holds a Bachelor of Commerce degree from the University of British Columbia and is a Chartered Financial Analyst. Dr. Florin has served as Executive Vice President, General Manager, International Publishing since...

  • Page 86
    ...2003, and Vice President, General Manager of EA Tiburon from April 1998 to July 2002. Mr. Schappert founded Tiburon Entertainment in 1994, which was acquired by Electronic Arts in 1998. Investor Information We file various reports with, or furnish them to, the Securities and Exchange Commission (the...

  • Page 87
    ... of a related movie or the beginning of a sports season or major sporting event. If we miss these key selling periods for any reason, including product delays or delayed introduction of a new platform for which we have developed products, our sales will suffer disproportionately. 13 Annual Report

  • Page 88
    ...revenue generated from our products and services to fall below expectations. If our competitors develop more successful products or services, offer competitive products or services at lower price points or based on payment models perceived as offering a better value proposition (such as pay-for-play...

  • Page 89
    ... titles and our revenue, profitability and cash flows will decline. Competition for these licenses may make them more expensive and increase our costs. Many of our products are based on or incorporate intellectual property owned by others. For example, our EA SPORTS products include rights licensed...

  • Page 90
    ... are accessible through the use of in-game cheat codes or other technological means that are intended to enhance the gameplay experience. However, in several recent cases, hidden content or features have been found to be included in other publishers' products by an employee who was not authorized to...

  • Page 91
    ... option contracts to hedge foreign currency forecasted transactions (primarily related to a portion of the revenue and expenses denominated in foreign currency generated by our operational subsidiaries), our results of operations, including our reported net revenue and net income, and financial...

  • Page 92
    ... effective in the first quarter of fiscal 2008. This impact could be material and our future effective tax rates could be more volatile. We are also required to pay taxes other than income taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes, in both the...

  • Page 93
    ... strategic transactions, including (i) acquisitions of companies, businesses, intellectual properties, and other assets, (ii) minority investments in strategic partners, and (iii) investments in new interactive entertainment businesses (for example, online and mobile games). Any of these strategic...

  • Page 94
    ... expenses, write-offs of goodwill, intangibles, or acquired in-process technology, or other increased expenses, any of which could harm our financial condition. Our stockholders may not have the opportunity to review, vote on or evaluate future acquisitions or investments. Our products are subject...

  • Page 95
    ... 2000 to expand our Redwood City, California headquarters facilities and develop adjacent property ("Phase Two Facilities"). Construction of the Phase Two Facilities was completed in June 2002. The Phase Two Facilities comprise a total of approximately 310,000 square feet and provide space for sales...

  • Page 96
    ...a total of approximately 65,000 square feet and provides space for research and development functions. Our rental obligation under this agreement is approximately $16 million over the initial ten-year term of the lease. Our North American distribution is supported by a centralized warehouse facility...

  • Page 97
    Item 3: Legal Proceedings On September 14, 2006, we received an informal inquiry from the Securities and Exchange Commission requesting certain documents and information relating to our stock option grant practices from January 1, 1997 through the date of the letter. We have cooperated to date with ...

  • Page 98
    ... Market Information Our common stock is traded on the NASDAQ Global Select Market under the symbol "ERTS". The following table sets forth the quarterly high and low sales price per share of our common stock from April 1, 2005 through March 31, 2007. Prices High Low Fiscal Year Ended March 31, 2006...

  • Page 99
    ...3/04 3/05 3/06 3/07 Annual Report Electronic Arts Inc. NASDAQ Composite S & P 500 RDG Technology Composite * $100 invested on 3/31/02 in stock or index-including reinvestment of dividends. Fiscal year ending March 31. March 31, 2002 2003 2004 2005 2006 2007 Electronic Arts Inc. NASDAQ Composite...

  • Page 100
    ...YEAR CONSOLIDATED FINANCIAL DATA (In millions, except per share data) STATEMENTS OF OPERATIONS DATA 2007(a) Year Ended March 31, 2006 2005 2004 2003 Net revenue ...Cost of goods sold ...Gross profit ...Operating expenses: Marketing and sales ...General and administrative ...Research and development...

  • Page 101
    ... Accordingly, in fiscal 2007, we recognized stock-based compensation expense of $133 million, pre-tax, and $107 million, net of tax. See Note 12 of the Notes to Consolidated Financial Statements for a detailed functional line-item breakdown of our stock-based compensation expense. Annual Report 27

  • Page 102
    ... Financial Statements and related notes. About Electronic Arts We develop, market, publish and distribute interactive software games that are playable by consumers on video game consoles (such as the Sony PlayStation 2 and PLAYSTATION 3, Microsoft Xbox 360 and Nintendo Wii), personal computers...

  • Page 103
    ... titles while at the same time spending more for the new generation of platforms and technology. As a result of these factors, we expect research and development expenses to increase in fiscal 2008. Investment in Online. Today, we generate net revenue from a variety of online products and services...

  • Page 104
    ... access and the integration of network connectivity into new generation game consoles are expected to increase demand for games with online-enabled features. To address this demand, many of our software products are developed with the ability to be connected to and played via the Internet. In order...

  • Page 105
    ..., and it is our objective to continue to develop, many of our hit titles to become franchise titles that can be regularly iterated. Increasing Licensing Costs. We generate a significant portion of our net revenue and operating income from games based on licensed content, such as FIFA Soccer. We have...

  • Page 106
    ..., or changes to the elements in a software arrangement, could cause a material increase or decrease in the amount of revenue that we report in a particular period. For example, some of our packaged goods products are sold with online services. Prior to, and through fiscal 2007, we had been able to...

  • Page 107
    ... publicity rights, content and/or other intellectual property. Royalty payments to independent software developers are payments for the development of intellectual property related to our games. Copublishing and distribution royalties are payments made to third parties for the delivery of product...

  • Page 108
    ... about the future value of the asset by evaluating future business prospects and estimated cash flows. Our future net cash flows are primarily dependent on the sale of products for play on proprietary video game consoles, handheld game players, PCs, and cellular handsets ("platforms"). The sales of...

  • Page 109
    ... 31, 2006. We recognized $6 million of stock-based compensation related to stock options assumed in connection with our acquisition of Criterion Software Group Ltd. and non-employee stock options and warrants during the fiscal year ended March 31, 2005. For options and ESPP, we use the Black-Scholes...

  • Page 110
    ...requisite service period; however, we continue to value our stock options based on the multiple-award valuation method. Prior to fiscal 2007, we accounted for stock-based awards to employees using the intrinsic value method in accordance with Accounting Principles Board No. 25, "Accounting for Stock...

  • Page 111
    ... revenue. These increases were partially offset by a $79 million decrease in frontline(b) net revenue. (a) Annual Report We refer to "catalog net revenue" as net revenue derived from an EA Studio SKU (a version of a title designed for play on a particular platform) for consoles, PC, PSP, Nintendo...

  • Page 112
    ... 2-related net revenue to continue to decline in fiscal 2008 as consumers increasingly migrate to new platforms, we publish fewer titles (as compared to fiscal 2007) and we defer a greater percentage of our net revenue due to the change in our online-enabled packaged goods business model. Xbox 360...

  • Page 113
    ... during the three months ended December 31, 2006. Net revenue from sales of titles for the Wii was $65 million for fiscal 2007, driven by sales of Need for Speed Carbon, Madden NFL 07, and Tiger Woods PGA» TOUR 07. We expect net revenue from sales of titles for the Wii to increase as the installed...

  • Page 114
    ... related revenue is recognized. Cost of goods sold for our online products consists primarily of data center and bandwidth costs associated with hosting our web sites, credit card fees and royalties for use of third-party properties. Cost of goods sold for our web site advertising business primarily...

  • Page 115
    ... the development and production of our online games. Research and development expenses also include expenses associated with the development of web site content, network infrastructure direct expenses, software licenses and maintenance, and network and management overhead. Research and development...

  • Page 116
    ...increase in absolute dollars in fiscal 2008 primarily to support our development of titles for the new generation of consoles. Amortization of Intangibles Amortization of intangibles for fiscal years 2007 and 2006 were as follows (in millions): March 31, 2007 % of Net Revenue March 31, 2006 % of Net...

  • Page 117
    ...due to a number of factors, including certain non-deductible stock based compensation expenses related to SFAS No. 123(R) and additional charges resulting from certain non-deductible acquisition-related costs during the fourth quarter of fiscal 2007. For fiscal 2006, our effective income tax rate is...

  • Page 118
    ...cost of goods sold and direct marketing and selling costs related to certain onlineenabled packaged goods for which a portion of the corresponding net revenue will be deferred and not recognized until fiscal 2009, and (2) an increase in our research and development expense. Comparison of Fiscal 2006...

  • Page 119
    ... Legends on the PSP in fiscal 2006. Europe For fiscal 2006, net revenue in Europe was $1,174 million, driven primarily by sales of Need for Speed Most Wanted, FIFA 06, The Sims 2, Harry Potter and the Goblet of Fire, as well as sales of titles for the PSP and Xbox 360 which were both introduced in...

  • Page 120
    ... Consoles ...PC ...Mobility PSP ...Nintendo DS ...Game Boy Advance and Game Boy Color ...Cellular Handsets ...Total Mobility ...Co-publishing and Distribution ...Internet Services, Licensing and Other Subscription Services ...Licensing, Advertising and Other ...Total Internet Services, Licensing...

  • Page 121
    ...our PC product line. Prior to consolidating DICE's financial results, we classified revenue from the Battlefield franchise as co-publishing and distribution revenue. Mobile Platforms Net revenue from mobile products - consisting of packaged goods games for handheld systems and downloadable games for...

  • Page 122
    ... subscription services increased from $55 million in fiscal 2005 to $61 million in fiscal 2006. The increase in net revenue was primarily due to an increase in the number of paying subscribers to Club PogoTM, partially offset by a decrease in net revenue from Ultima Online. Licensing, Advertising...

  • Page 123
    ...-related expenses due to an increase in headcount costs as well as an increase in professional and contracted services to support our business. Research and Development Research and development expenses for fiscal years 2006 and 2005 were as follows (in millions): March 31, 2006 % of Net Revenue...

  • Page 124
    ...in research and development expenses as we increased our internal development efforts and invested in next-generation tools, technologies and titles, while at the same time we continued to support current-generation product development. Impact of Recently Issued Accounting Standards In February 2006...

  • Page 125
    ... prioritizes the information used to develop those assumptions. Fair value measurements would be separately disclosed by level within the fair value hierarchy. The provisions of SFAS No. 157 are effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim...

  • Page 126
    ...07-03, "Accounting for Advance Payments for Goods or Services to Be Used in Future Research and Development" and the FASB ratified the tentative conclusion. The FASB exposed the EITF tentative conclusion for public comment. The comment period was expected to end in May 2007. EITF 07-03 addresses the...

  • Page 127
    ... 31, 2007 and 2006, respectively. The increase in our accounts receivable balance was primarily due to a higher percentage of net revenue recognized in the last month of our fourth quarter of fiscal 2007 as compared to the fourth quarter of fiscal 2006. Reserves for sales returns, pricing allowances...

  • Page 128
    ... registration statement for general corporate purposes, including for working capital, financing capital expenditures, research and development, marketing and distribution efforts and, if opportunities arise, for acquisitions or strategic alliances. Pending such uses, we may invest the net proceeds...

  • Page 129
    ... and Content Licenses: Payments and Commitments The products we produce in our studios are designed and created by our employee designers, artists, software programmers and by non-employee software developers ("independent artists" or "third-party developers"). We typically advance development funds...

  • Page 130
    ... current liabilities reported on our Consolidated Balance Sheets as of March 31, 2007. See Note 6 of the Notes to Consolidated Financial Statements. Related Person Transaction On June 24, 2002, we hired Warren C. Jenson as our Executive Vice President, Chief Financial and Administrative Officer and...

  • Page 131
    ... March 31, 2007. Financial Covenants Requirement Actual as of March 1, 2007 Consolidated Net Worth (in millions) ...Fixed Charge Coverage Ratio ...Total Consolidated Debt to Capital ...Quick Ratio - Q1 & Q2 ...Q3 & Q4 ... equal to or greater equal to or greater equal to or less equal to or greater...

  • Page 132
    ... an online media and gaming company with which we partnered in 2006 to launch EA Sports FIFA Online in Korea. Legal Proceedings On September 14, 2006, we received an informal inquiry from the Securities and Exchange Commission requesting certain documents and information relating to our stock option...

  • Page 133
    ... in fair value, if any, is reported in each period in interest and other income, net, in our Consolidated Statements of Operations. Our hedging programs reduce, but do not entirely eliminate, the impact of currency exchange rate movements in revenue and operating expenses. As of March 31, 2007, we...

  • Page 134
    ...The value of our equity investments in publicly traded companies are subject to market price volatility. As of March 31, 2007 and 2006, our marketable equity securities were classified as available-for-sale and, consequently, were recorded in our Consolidated Balance Sheets at fair market value with...

  • Page 135
    ... Percentage Decrease in Each Stock's Market Price (75%) (50%) (25%) Fair Value as of March 31, 2006 Valuation of Securities Given an X Percentage Increase in Each Stock's Market Price 25% 50% 75% (In millions) Marketable equity securities... $40 $80 $120 $160 $200 $240 $280 Annual Report 61

  • Page 136
    ... Financial Statements ...Reports of Independent Registered Public Accounting Firm ...Financial Statement Schedule: The following financial statement schedule of Electronic Arts Inc. and Subsidiaries for the years ended March 31, 2007, 2006 and 2005 is filed as part of this report and should be read...

  • Page 137
    ... 392 11 647 232 - 92 $4,386 March 31, 2007 March 31, 2006 LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ...Accrued and other current liabilities ...Deferred net revenue - packaged goods and digital content Total current liabilities ... Annual Report...

  • Page 138
    ... per share data) Year Ended March 31, 2007 2006 2005 Net revenue ...$3,091 Cost of goods sold ...1,212 Gross profit ...Operating expenses: Marketing and sales ...General and administrative ...Research and development ...Amortization of intangibles ...Acquired in-process technology ...Restructuring...

  • Page 139
    ... ...Issuance of common stock ...Repurchase and retirement of common stock ...Stock-based compensation ...Tax benefit from exercise of stock options Assumption of stock options in connection with acquisition ... Annual Report . . (12,621 Balances as of March 31, 2006 ...304,994 Cumulative effect...

  • Page 140
    ...of stock options ...Acquired in-process technology ...Change in assets and liabilities: Receivables, net ...Inventories ...Other assets ...Accounts payable ...Accrued and other liabilities ...Deferred income taxes, net ...Deferred net revenue - packaged goods and digital content ...Net cash provided...

  • Page 141
    ... attempt to create software game "franchises" that allow us to publish new titles on a recurring basis that are based on the same property. Examples of this franchise approach are the annual iterations of our sports-based products (e.g., Madden NFL Football, NCAA» Football and FIFA Soccer), wholly...

  • Page 142
    ... original or remaining maturities of greater than three months at the time of purchase. The short-term investments are available for use in current operations or other activities such as capital expenditures and business acquisitions. As of March 31, 2007 and March 31, 2006, short-term investments...

  • Page 143
    ... in order to recognize revenue. • Delivery. Delivery is considered to occur when a product is shipped and the risk of loss and rewards of ownership have been transferred to the customer. For online game services, delivery is considered to occur as the service is provided. For online services...

  • Page 144
    ... pay on an annual basis or a month-to-month basis and prepaid subscription revenue, including revenue collected from credit card sales, is recognized ratably over the period for which the services are provided. Software Licenses: We license software rights to manufacturers of products in related...

  • Page 145
    ... that time. Changes to our underlying stock price, our assumptions used in the Black-Scholes option valuation calculation and our forfeiture rate, as well as future grants of equity, could significantly impact compensation expense to be recognized in fiscal 2008 and future periods. 71 Annual Report

  • Page 146
    ... of all relevant information. The second step is a measurement process whereby a tax position that meets the more-likely-than-not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. FIN No. 48 also requires new tabular reconciliation of...

  • Page 147
    ... Financial Statements. In March 2007, the EITF issued a tentative conclusion on EITF 07-03, "Accounting for Advance Payments for Goods or Services to Be Used in Future Research and Development" and the FASB ratified the tentative conclusion. The FASB exposed the EITF tentative conclusion for public...

  • Page 148
    ...-term Investments Cash, cash equivalents and short-term investments consisted of the following as of March 31, 2007 and 2006 (in millions): Cost or Amortized Cost As of March 31, 2007 Gross Gross Unrealized Unrealized Gains Losses Fair Value Cash and cash equivalents: Cash ...Money market funds...

  • Page 149
    ..., the length of time that the security has been in a loss position, our intentions with respect to the selling or holding of such security as well as any contractual terms impacting the prepayment or settlement process. Based on our review, we do not consider the investments listed above to be...

  • Page 150
    ... of investments in common stock of publicly traded companies. On February 3, 2005, we purchased approximately 19.9 percent of the then outstanding ordinary shares (representing 18.4 percent of the voting rights at the time) of Ubisoft Entertainment ("Ubisoft") for $91 million. At March 31, 2007, we...

  • Page 151
    ... within 12 months. The following table summarizes the activity in accumulated other comprehensive income, net of related taxes, with regard to the changes in fair value of derivative instruments, for fiscal 2007 and 2006 (in millions): Year Ended March 31, 2007 2006 Beginning balance of unrealized...

  • Page 152
    ... The percent of DICE stock that we did not own was reflected as minority interest on our Consolidated Financial Statements from January 27, 2005 until the acquisition date of the remaining minority interest in October 2006. DICE's products were primarily sold through co-publishing agreements with us...

  • Page 153
    ...Inc. On July 24, 2006, we acquired all outstanding shares of Mythic Entertainment, Inc. for an aggregate purchase price of $76 million in cash, including transaction costs. Based in Fairfax, Virginia, Mythic is a developer and publisher of massively multiplayer online role-playing games. The results...

  • Page 154
    ... a global publisher of wireless games and other wireless entertainment applications. We paid $27 per share in cash in exchange for each share of JAMDAT common stock and assumed outstanding stock options and restricted stock units under certain JAMDAT equity plans for an aggregate purchase price of...

  • Page 155
    ...-process technology which was expensed in our Consolidated Statement of Operations upon consummation of the acquisition, the acquired finite-lived intangible assets are being amortized on a straight-line basis over estimated lives ranging from two to four years. Annual Report Stock-based employee...

  • Page 156
    ..., and include costs for obtaining (1) developed technologies, (2) carrier contracts and related, (3) trade names, and (4) subscribers and other intangibles. Amortization of intangibles for fiscal 2007, 2006 and 2005 was $54 million (of which $27 million was recognized in cost of goods sold), $16...

  • Page 157
    ... consoles, online and mobile platforms. As of March 31, 2006, this accrual was included in other accrued expenses presented in Note 8 of the Notes to Consolidated Financial Statements. As of March 31, 2007, all $10 million had been paid out in cash under the restructuring plan. 83 Annual Report

  • Page 158
    ... publicity rights, content and/or other intellectual property. Royalty payments to independent software developers are payments for the development of intellectual property related to our games. Copublishing and distribution royalties are payments made to third parties for the delivery of product...

  • Page 159
    ...2007 2006 Raw materials and work in process ...$ Finished goods (including manufacturing royalties) ...Inventories ...$ A significant amount of our inventory balance relates to our distribution business in Switzerland. 1 61 62 $ 1 60 Annual Report $ 61 (b) Property and Equipment, Net Property...

  • Page 160
    ... Deferred net revenue, packaged goods and digital content, includes the deferral of the fair value of the online service related to sales of certain online-enabled packaged goods and PC digital downloads and revenue from sales of certain incremental content related to our core subscription services...

  • Page 161
    ...as of March 31, 2007. Financial Covenants Requirement Actual as of March 31, 2007 Annual Report Consolidated Net Worth (in millions) ...Fixed Charge Coverage Ratio ...Total Consolidated Debt to Capital ...Quick Ratio - Q1 & Q2 ...Q3 & Q4 ... equal to or greater equal to or greater equal to or less...

  • Page 162
    ... and Content Licenses: Payments and Commitments The products we produce in our studios are designed and created by our employee designers, artists, software programmers and by non-employee software developers ("independent artists" or "third-party developers"). We typically advance development funds...

  • Page 163
    ... an online media and gaming company with which we partnered in 2006 to launch EA Sports FIFA Online in Korea. Legal proceedings On September 14, 2006, we received an informal inquiry from the Securities and Exchange Commission requesting certain documents and information relating to our stock option...

  • Page 164
    ... administrative or investigative proceeding in which the directors are sued or charged as a result of their service as members of our Board of Directors. (10) INCOME TAXES Our pretax income from operations for the fiscal years ended March 31, 2007, 2006 and 2005 consisted of the following components...

  • Page 165
    ... For fiscal 2007, our effective income tax rate was higher than the U.S. statutory rate of 35.0 percent due to a number of factors, including certain non-deductible acquisition-related costs, tax expense from integration restructurings, and certain non-deductible stock based compensation related to...

  • Page 166
    ...million related to this repatriation. (11) STOCKHOLDERS' EQUITY (a) Preferred Stock As of March 31, 2007 and 2006, we had 10,000,000 shares of preferred stock authorized but unissued. The rights, preferences, and restrictions of the preferred stock may be designated by our Board of Directors without...

  • Page 167
    ... our core console and PC business. As a result, we eliminated dual class reporting starting in fiscal 2004. The majority of outstanding Class B options and warrants not directly held by us were acquired or converted to common stock and warrants. At our Annual Meeting of Stockholders, held on July 29...

  • Page 168
    ...purchase rights granted pursuant to our employee stock purchase plan is determined using the Black-Scholes valuation model, which was the same model we previously used for the pro forma information required under SFAS No. 123. The determination of fair value is affected by our stock price as well as...

  • Page 169
    ...2007 2006 2005 Cost of goods sold ...Marketing and sales ...General and administrative ...Research and development ... ... $ 2 17 37 77 133 (26) $107 $- - 1 2 3 (1) $ 2 $- - - 6 6 (2) $ 4 Stock-based compensation expense ...Benefit from income taxes...Stock-based compensation expense, net of tax...

  • Page 170
    ... the total pre-tax intrinsic value based on our closing stock price as of March 31, 2007 which would have been received by the option holders had all option holders exercised their options as of that date. We issue new common stock from our authorized shares upon the exercise of stock options. The...

  • Page 171
    ...for the fiscal year ended March 31, 2007: Restricted Stock Rights (In thousands) WeightedAverage Grant Date Fair Value Annual Report Balance as of March 31, 2006 ...Activity for the fiscal year ended March 31, 2007: Granted ...Exchange Program (granted) ...Vested ...Forfeited ... ... 655 1,362 445...

  • Page 172
    ... August 16, 2006 and were still employed on the date on which the tendered options were cancelled and restricted stock rights were granted except (1) our "named executive officers" identified in our 2006 Annual Proxy Statement, (2) members of our Board of Directors, and (3) employees who resided in...

  • Page 173
    ... and net income per share would have been the pro forma amounts indicated below. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following weighted-average assumptions were used for grants made under our stock-based compensation...

  • Page 174
    ...31, 2006 ...Other comprehensive income ...Balances as of March 31, 2007 ... $ 20 10 30 (10) 20 23 $ 43 $ - 26 26 37 63 188 $251 $ 20 36 56 27 83 211 $294 The change in unrealized gains (losses) on investments is shown net of taxes of less than $1 million in fiscal 2007, $0 in fiscal 2006, and...

  • Page 175
    ...effect...Increase in net income ... $13 (3) $10 $- - $- $10 (2) $ 8 $3 (1) $2 Business Tax Expense Adjustment We adjusted the beginning retained earnings balance for fiscal 2007 related to the correction of our historical accounting of certain business tax expenses. Our internal review indicated...

  • Page 176
    ... fiscal 2007, 2006 and 2005, the weighted-average exercise price of these options was $55.84, $63.34 and $63.63 per share, respectively. (17) RELATED PERSON TRANSACTION On June 24, 2002, we hired Warren C. Jenson as our Executive Vice President, Chief Financial and Administrative Officer and agreed...

  • Page 177
    ... Publishing segment profit differs from consolidated operating income primarily due to the exclusion of substantially all of our research and development expense as well as certain corporate functional costs that are not allocated to the publishing organizations. Our Chief Executive Officer reviews...

  • Page 178
    ... ...Nintendo DS ...Game Boy Advance and Game Boy Color ...Total Mobility ...Co-publishing and Distribution...Internet Services, Licensing and Other Subscription Services ...Licensing, Advertising and Other ...Total Internet Services, Licensing and Other ... Total Net Revenue ...$3,091 Information...

  • Page 179
    ... FINANCIAL AND MARKET INFORMATION (UNAUDITED) (In millions, except per share data) Fiscal 2007 Consolidated Net revenue ...Gross profit ...Operating income (loss) ...Net income (loss) ...Common Stock Net income (loss) per share - basic ...Net income (loss) per share - diluted ...Common stock price...

  • Page 180
    ...REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders Electronic Arts Inc.: We have audited the accompanying consolidated balance sheets of Electronic Arts Inc. and subsidiaries (Electronic Arts Inc.) as of March 31, 2007 and April 1, 2006, and the related consolidated statements...

  • Page 181
    ... of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Electronic Arts Inc. and subsidiaries as of March 31, 2007 and April 1, 2006, and the related consolidated statements of operations, stockholders' equity and comprehensive income, and cash flows for...

  • Page 182
    ... disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial and...

  • Page 183
    ... of our internal control over financial reporting. During fiscal 2007, there were no significant changes in our internal controls or, to our knowledge, in other factors that could significantly affect our disclosure controls and procedures. Item 9B: None. Other Information Annual Report 109

  • Page 184
    ... Proxy Statement for our 2007 Annual Meeting of Stockholders (the "Proxy Statement") other than the information regarding (a) executive officers, and (b) our Global Code of Conduct (which includes code of ethics provisions applicable to our directors, principal executive officer, principal financial...

  • Page 185
    ... Realty Corporation, dated April 1, 1999.(12) Option agreement, agreement of purchase and sale, and escrow instructions for Zones 2 and 4, Electronic Arts Business Park, Redwood Shores California, dated April 5, 1999.(12) Licensed Publisher Agreement by and between EA and Sony Computer Entertainment...

  • Page 186
    ... Employment at Electronic Arts Inc. to Gabrielle Toledano, dated February 6, 2006.(*) (24) Second Omnibus Amendment (2001 Transaction), dated as of May 26, 2006, among Electronic Arts Redwood LLC, as Lessee, Electronic Arts Inc., as Guarantor, SELCO Service Corporation (doing business in California...

  • Page 187
    ...of 2002. 32.2 Certification of Executive Vice President, Chief Financial and Administrative Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Additional exhibits furnished with this report: 10.48 Annual Report * Management contract or compensatory plan or arrangement. ** Portions...

  • Page 188
    ...(23) Incorporated by reference to exhibits filed with Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 2005. (24) Incorporated by reference to exhibits filed with Registrant's Annual Report on Form 10-K for the year ended March 31, 2006. (25) Incorporated by reference to...

  • Page 189
    ... 115 Chief Executive Officer Executive Vice President, Chief Financial and Administrative Officer Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) Annual Report Chairman of the Board Director Director Director Director Director Director Director Director Director

  • Page 190
    ... SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS Years Ended March 31, 2007, 2006 and 2005 (In millions) Balance at Beginning of Period Charged to Costs and Expenses Charged (credited) to Other Accounts(1) Balance at End of Period Allowance for Doubtful Accounts, Price Protection and Returns...

  • Page 191
    ELECTRONIC ARTS INC. 2007 FORM 10-K ANNUAL REPORT EXHIBIT INDEX Exhibit Number Exhibit Title 21.01 23.01 31.1 31.2 Subsidiaries of the Registrant. Consent of KPMG LLP, Independent Registered Public Accounting Firm. Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange...

  • Page 192
    ... by contacting: Investor Relations Electronic Arts Inc. 209 Redwood Shores Parkway Redwood City, CA 94065 (650) 628-7352 ANNUAL MEETING The Company's Annual Meeting of Stockholders is scheduled to be held on July 26, 2007 at 2:00 P.M. at the Company's headquarters: Electronic Arts Inc. 209 Redwood...

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