Electronic Arts 2007 Annual Report Download - page 156

financial information is available and (2) management of the reporting unit regularly reviews the operating
results of that component. The first step tests for impairment by applying fair value-based tests at the reporting
unit level. The second step (if necessary) measures the amount of impairment by applying fair value-based
tests to individual assets and liabilities within each reporting unit. We completed the first step of the annual
goodwill impairment testing in the fourth quarter of fiscal 2007 and found no indicators of impairment of our
recorded goodwill. We did not recognize an impairment loss on goodwill in fiscal 2007, 2006 or 2005.
Finite-lived intangible assets, net of accumulated amortization, as of March 31, 2007 and 2006, were
$210 million and $232 million, respectively, 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 million (of which $9 million was recognized in cost of goods sold) and $6 million (of which
$3 million was recognized in cost of goods sold), respectively. Finite-lived intangible assets are amortized
using the straight-line method over the lesser of their estimated useful lives or the agreement terms, typically
from two to twelve years. As of March 31, 2007 and 2006, the weighted-average remaining useful life for
finite-lived intangible assets was approximately 6.3 years and 7.2 years, respectively.
Finite-lived intangibles consisted of the following (in millions):
Gross
Carrying
Amount
Accumulated
Amortization Other
Other
Intangibles,
Net
As of March 31, 2007
Developed and Core Technology ...................... $183 $ (62) $ — $121
Carrier Contracts and Related ........................ 85 (19) — 66
Trade Name ..................................... 44 (24) — 20
Subscribers and Other Intangibles ..................... 16 (12) (1) 3
Total ........................................ $328 $(117) $ (1) $210
As of March 31, 2006
Developed and Core Technology ...................... $160 $ (31) $ — $129
Carrier Contracts and Related ........................ 85 (2) — 83
Trade Name ..................................... 36 (21) — 15
Subscribers and Other Intangibles ..................... 15 (9) (1) 5
Total ........................................ $296 $ (63) $ (1) $232
As of March 31, 2007, future amortization of finite-lived intangibles that will be recorded in cost of goods
sold and operating expenses is estimated as follows (in millions):
Fiscal Year Ending March 31,
2008 ........................................................................ $ 52
2009 ........................................................................ 41
2010 ........................................................................ 34
2011 ........................................................................ 29
2012 ........................................................................ 9
Thereafter .................................................................... 45
Total ...................................................................... $210
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