Electronic Arts 2008 Annual Report Download - page 163

of our games, usually in installment payments made upon the completion of specified development milestones.
Contractually, these payments are generally considered advances against subsequent royalties on the sales of
the products. These terms are set forth in written agreements entered into with the independent artists and
third-party developers.
In addition, we have certain celebrity, league and content license contracts that contain minimum guarantee
payments and marketing commitments that may not be dependent on any deliverables. Celebrities and
organizations with whom we have contracts include: FIFA, FIFPRO Foundation, UEFA and FAPL (Football
Association Premier League Limited) (professional soccer); NASCAR (stock car racing); National Basketball
Association (professional basketball); PGA TOUR and Tiger Woods (professional golf); National Hockey
League and NHL Players’ Association (professional hockey); Warner Bros. (Harry Potter and Batman); New
Line Productions and Saul Zaentz Company (The Lord of the Rings); Red Bear Inc. (John Madden); National
Football League Properties and PLAYERS Inc. (professional football); Collegiate Licensing Company (colle-
giate football and basketball); Viacom Consumer Products (The Godfather); ESPN (content in EA SPORTS
TM
games); Twentieth Century Fox Licensing and Merchandising (The Simpsons); and Hasbro, Inc. (a wide array
of Hasbro intellectual properties). These developer and content license commitments represent the sum of
(1) the cash payments due under non-royalty-bearing licenses and services agreements, and (2) the minimum
guaranteed payments and advances against royalties due under royalty-bearing licenses and services agree-
ments, the majority of which are conditional upon performance by the counterparty. These minimum guarantee
payments and any related marketing commitments are included in the table below.
The following table summarizes our minimum contractual obligations and commercial commitments as of
March 31, 2008 (in millions):
Fiscal Year
Ending March 31, Leases
(1)
Developer/
Licensor
Commitments
(2)
Marketing
Letter of Credit,
Bank and
Other Guarantees Total
Contractual Obligations
Commercial
Commitments
2009 ............................ $ 62 $ 176 $ 66 $ 6 $ 310
2010 ............................ 50 183 42 — 275
2011 ............................ 40 298 38 — 376
2012 ............................ 33 147 38 — 218
2013 ............................ 26 134 38 — 198
Thereafter . . ...................... 53 612 155 — 820
Total ........................ $264 $1,550 $377 $ 6 $2,197
(1)
Lease commitments include contractual rental commitments of $13 million under real estate leases for
unutilized office space resulting from our restructuring activities. These amounts, net of estimated future
sub-lease income, were expensed in the periods of the related restructuring and are included in our accrued
and other current liabilities reported on our Consolidated Balance Sheets as of March 31, 2008. See Note 6
of the Notes to Consolidated Financial Statements.
(2)
Developer/licensor commitments include $10 million of commitments to developers or licensors that have
been recorded in current and long-term liabilities and a corresponding amount in current and long-term
assets in our Consolidated Balance Sheets as of March 31, 2008 because payment is not contingent upon
performance by the developer or licensor.
The amounts represented in the table above reflect our minimum cash obligations for the respective fiscal
years, but do not necessarily represent the periods in which they will be expensed in our Consolidated
Financial Statements.
In addition to what is included in the table above, as discussed in Note 10 of the Notes to Consolidated
Financial Statements, we have adopted the provisions of FASB Interpretation (“FIN”) No. 48, “Accounting for
Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109”. As of March 31, 2008, we had
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