Electronic Arts 2007 Annual Report Download - page 152

(4) BUSINESS COMBINATIONS
Digital Illusions C.E.
The following table summarizes the estimated fair values of the remaining minority interest acquired for the
fiscal year ended March 31, 2007 and the fair values of assets acquired and liabilities assumed for the fiscal
years ended March 31, 2006 and 2005, in connection with the acquisition of DICE (in millions):
2007 2006 2005 Total
Year Ended March 31,
Current assets.................................................. $— $— $35 $35
Property and equipment, net ....................................... — 1 1 2
Acquired in-process technology..................................... 1 — 4 5
Goodwill ..................................................... 19 5 31 55
Finite-lived intangibles ........................................... 3 1 1 5
Liabilities..................................................... — — (9) (9)
Minority interest. . . ............................................. 8 3 (11) —
Total consideration ............................................ $31 $10 $52 $93
Based in Sweden, DICE develops games for PCs and video game consoles. In 2003 we acquired (1) approx-
imately 1,911,403 shares of Class B common stock representing a 19 percent equity interest in DICE, and (2) a
warrant to acquire an additional 2,327,602 shares of to-be-issued Class A common stock at an exercise price
of SEK 43.23. Prior to our tender offer in the fourth quarter of fiscal 2005, we accounted for our Class B
common stock investment in DICE under the equity method of accounting, as prescribed by APB No. 18,
“The Equity Method of Accounting for Investments in Common Stock”. Separately, the warrant was recognized
at a cost of $5 million as of March 31, 2006 and was included in investments in affiliates in our Consolidated
Balance Sheets.
On January 27, 2005, we completed a tender offer by acquiring 3,235,053 shares of Class A common stock at
a price of SEK 61 per share, representing 32 percent of the outstanding Class A common stock of DICE.
During the tender offer period and through the end of fiscal 2005, we acquired, through open market purchases
at an average price of SEK 60.33, an additional 1,190,658 shares of Class A common stock, representing
approximately 12 percent of the outstanding Class A common stock of DICE. During the first three months
and last two weeks of fiscal 2006, we acquired, through open market purchases at an average price of SEK
63.07, an additional 1,071,152 shares of Class A common stock, representing approximately 10 percent of the
outstanding Class A common stock of DICE. Accordingly, on a cumulative basis as of March 31, 2006, we
owned approximately 73 percent of DICE on an undiluted basis (excluding the warrant discussed above). As a
result, we have included the assets, liabilities and results of operations of DICE in our Consolidated Financial
Statements since January 27, 2005. 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 and our transactions with DICE were recorded on an arm’s-length basis.
In October 2006, the remaining minority interest in DICE was acquired for a total of $27 million in cash,
including transaction costs. In connection with the acquisition of the remaining minority interest of DICE, the
warrant was reclassified to goodwill for this wholly owned subsidiary.
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