Electronic Arts 2008 Annual Report Download - page 127

Other current assets
Other current assets increased to $290 million as of March 31, 2008, from $219 million as of March 31, 2007,
primarily due to the reclassification as an asset held for sale of our facility in Chertsey, England from property
and equipment, net, to other current assets.
Other assets
Other assets increased to $157 million as of March 31, 2008, from $96 million as of March 31, 2007,
primarily due to (1) $19 million higher prepaid royalties, (2) higher other investments of $15 million
substantially resulting from our purchase of Neowiz preferred stock, and (3) $13 million of prepaid taxes
reclassified from current assets.
Accounts payable
Accounts payable increased to $229 million as of March 31, 2008, from $180 million as of March 31, 2007,
primarily due to higher inventory purchases related to Rock Band.
Accrued and other current liabilities
Our accrued and other liabilities decreased to $683 million as of March 31, 2008 from $814 million as of
March 31, 2007. The decrease was primarily due to (1) $273 million of current income taxes accrued being
reclassified to non-current tax obligations as a result of our adoption of FIN No. 48 (see Note 10 of the Notes
to Consolidated Financial Statements), and (2) a decrease of $32 million in accrued incentive-based
compensation. These decreases were partially offset by an increase of $106 million in royalties payable
primarily due to Rock Band.
Deferred income taxes, net
Our net deferred income tax asset position increased by $197 million as of March 31, 2008 as compared to
March 31, 2007 primarily due to increases of (1) $76 million in deferred taxes related to current year tax
provision, (2) $53 million in deferred taxes related to our acquisition of VGH, (3) $43 million in deferred tax
assets related to our adoption of FIN No. 48 and current year activities, and (4) $25 million in deferred tax
assets related to stock-based compensation.
Financial Condition
We believe that cash, cash equivalents, short-term investments, marketable equity securities, cash generated
from operations and available financing facilities will be sufficient to meet our operating requirements for at
least the next twelve months, including working capital requirements, capital expenditures and, potentially,
future acquisitions or strategic investments. We may choose at any time to raise additional capital to strengthen
our financial position, facilitate expansion, pursue strategic acquisitions and investments or to take advantage
of business opportunities as they arise. There can be no assurance, however, that such additional capital will
be available to us on favorable terms, if at all, or that it will not result in substantial dilution to our existing
stockholders.
On March 13, 2008, we commenced an unsolicited $26.00 per share cash tender offer for all of the outstanding
shares of Take-Two Interactive Software, Inc., a Delaware corporation (“Take-Two”), for a total purchase price
of approximately $2.1 billion. On April 18, 2008, we adjusted the purchase price in the cash tender offer to
$25.74 per share following the approval by Take-Two stockholders of amendments to Take-Two’s Incentive
Stock Plan, which would permit the issuance of additional shares of restricted stock to ZelnickMedia
Corporation pursuant to its management agreement with Take-Two. The total aggregate purchase price for
Take-Two did not change as a result of the adjustment to the per share purchase price in the tender offer. On
May 9, 2008, we received a commitment from certain financial institutions to provide us with up to $1.0 billion
of senior unsecured term loan financing at any time until January 9, 2009, to be used to provide a portion of
the funds for the offer and/or merger. We will be required to repay any funds we borrow under the term loan
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