Electronic Arts 2009 Annual Report Download - page 136

League Properties and PLAYERS Inc. (professional football); Collegiate Licensing Company (collegiate football
and basketball); Viacom Consumer Products (The Godfather); ESPN (content in EA SPORTS games); Twentieth
Century Fox Licensing and Merchandising (The Simpsons), Hasbro, Inc. (a wide array of Hasbro intellectual
properties), and the Estate of Robert Ludlum (Robert Ludlum novels and films). 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 agreements, 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. During the fiscal year 2009, we declined to exercise our option to invest in the Arena Football
League.
The following table summarizes our minimum contractual obligations and commercial commitments as of
March 31, 2009, and the effect we expect them to have on our liquidity and cash flow in future periods (in
millions):
Contractual Obligations
Commercial
Commitments
TotalFiscal Year Ending March 31, Leases(a)
Developer/
Licensor
Commitments(b) Marketing
Letter of Credit,
Bank and Other
Guarantees
2010 .................................... $ 50 $ 270 $ 92 $ 3 $ 415
2011 .................................... 39 263 54 — 356
2012 .................................... 29 182 42 — 253
2013 .................................... 21 152 42 — 215
2014 .................................... 27 13 24 — 64
Thereafter ................................ 20 622 131 — 773
Total .................................. $186 $1,502 $385 $ 3 $2,076
(a) See discussion on operating leases in the “Off-Balance Sheet Commitments” section below for additional
information. Lease commitments include contractual rental commitments of $7 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, 2009.
(b) Developer/licensor commitments include $37 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, 2009 because payment is not contingent upon
performance by the developer or licensor.
The amounts represented in the table above reflect our minimal 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 11 of the Notes to Consolidated Financial
Statements, we have adopted the provisions of FIN No. 48. As of March 31, 2009, we had a liability for
unrecognized tax benefits and an accrual for the payment of related interest totaling $324 million, of which
approximately $56 million is offset by prior cash deposits to tax authorities for issues pending resolution. For the
remaining liability, we are unable to make a reasonably reliable estimate of when cash settlement with a taxing
authority will occur.
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