Electronic Arts 2007 Annual Report Download - page 126

beginning prior to the effective date, except as permitted with early adoption. We are evaluating if we will
adopt SFAS No. 159 and what impact the adoption will have on our Consolidated Financial Statements if we
adopt. If we adopt SFAS No. 159, it may have a material impact on our Consolidated Financial Statements.
In March 2007, the Emerging Issues Task Force (“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
comment. The comment period was expected to end in May 2007. EITF 07-03 addresses the diversity which
exists with respect to the accounting for the non-refundable portion of a payment made by a research and
development entity for future research and development activities. Under this tentative conclusion, an entity
would defer and capitalize non-refundable advance payments made for research and development activities
until the related goods are delivered or the related services are performed. If a final consensus is reached on
this tentative conclusion, EITF 07-03 would be effective for interim or annual reporting periods in fiscal years
beginning after December 15, 2007. We do not expect the adoption of EITF 07-03 to have a material impact
on our Consolidated Financial Statements if ratified by the FASB as currently proposed.
LIQUIDITY AND CAPITAL RESOURCES
(In millions)
March 31,
2007
March 31,
2006 Increase
Year Ended
Cash and cash equivalents ..................................... $1,371 $1,242 $ 129
Short-term investments ....................................... 1,264 1,030 234
Marketable equity securities ................................... 341 160 181
Total. . ................................................. $2,976 $2,432 $ 544
Percentage of total assets ................................... 58% 55%
(In millions)
March 31,
2007
March 31,
2006
Increase /
(Decrease)
Year Ended
Cash provided by operating activities ............................ $ 397 $ 596 $(199)
Cash used in investing activities ................................ (487) (108) (379)
Cash provided by (used in) financing activities ..................... 190 (503) 693
Effect of foreign exchange on cash and cash equivalents .............. 29 (13) 42
Net increase (decrease) in cash and cash equivalents ............... $ 129 $ (28) $ 157
Changes in Cash Flow
During fiscal 2007, we generated $397 million of cash from operating activities as compared to $596 million
for fiscal 2006. The decrease in cash generated from operating activities was primarily due to the timing of
the collection of our receivables as a result of collecting a greater amount of our receivables during fiscal 2006
as compared to fiscal 2007. We expect cash from operating activities to increase in fiscal 2008.
For fiscal 2007, we generated $1,315 million of cash proceeds from maturities and sales of short-term
investments and $168 million in proceeds from sales of common stock through our stock-based compensation
plans. Our primary use of cash in non-operating activities consisted of (1) $1,522 million used to purchase
short-term investments, (2) $178 million in capital expenditures primarily related to investments in our
worldwide development tools, technologies and equipment and expansions of our Vancouver and United
Kingdom studios, as well as (3) $103 million primarily for the acquisitions of Mythic and the remaining
minority interest in DICE. During fiscal 2008, we anticipate making continued capital investments in our
studios, investments in the new generation of consoles, online infrastructure and mobile platforms. In addition,
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