Electronic Arts 2009 Annual Report Download - page 141

Annual Report
As of March 31, 2009 and 2008, our short-term investments were classified as available-for-sale and,
consequently, recorded at fair market value with unrealized gains or losses resulting from changes in fair value
reported as a separate component of accumulated other comprehensive income, net of any tax effects, in
stockholders’ equity. Our portfolio of short-term investments consisted of the following investment categories,
summarized by fair value as of March 31, 2009 and 2008 (in millions):
As of March 31,
2009 2008
U.S. Treasury securities .......................................................... $200 $161
Corporate bonds ................................................................ 131 231
U.S. agency securities ............................................................ 109 266
Commercial paper ............................................................... 79 12
Asset-backed securities ........................................................... 15 64
Total short-term investments ..................................................... $534 $734
Notwithstanding our efforts to manage interest rate risks, there can be no assurance that we will be adequately
protected against risks associated with interest rate fluctuations. At any time, a sharp change in interest rates
could have a significant impact on the fair value of our investment portfolio. The following table presents the
hypothetical changes in fair value in our short-term investment portfolio as of March 31, 2009, arising from
potential changes in interest rates. The modeling technique estimates the change in fair value from immediate
hypothetical parallel shifts in the yield curve of plus or minus 50 basis points (“BPS”), 100 BPS, and 150 BPS.
Valuation of Securities
Given an Interest Rate
Decrease of X Basis Points
Fair Value
as of
March 31,
2009
Valuation of Securities
Given an Interest Rate
Increase of X Basis Points
(In millions) (150 BPS) (100 BPS) (50 BPS) 50 BPS 100 BPS 150 BPS
U.S. Treasury securities ........ $205 $203 $201 $200 $198 $196 $194
Corporate bonds .............. 134 133 132 131 130 129 128
U.S. agency securities ......... 111 110 110 109 109 108 108
Commercial paper ............ 80 80 80 79 79 79 79
Asset-backed securities ........ 15 15 15 15 15 15 15
Total short-term
investments ............. $545 $541 $538 $534 $531 $527 $524
The following table presents the hypothetical changes in fair value in our short-term investment portfolio as of
March 31, 2008, arising from selected potential changes in interest rates.
Valuation of Securities
Given an Interest Rate
Decrease of X Basis Points
Fair Value
as of
March 31,
2008
Valuation of Securities
Given an Interest Rate
Increase of X Basis Points
(In millions) (150 BPS) (100 BPS) (50 BPS) 50 BPS 100 BPS 150 BPS
U.S. agency securities ......... $273 $270 $268 $266 $263 $261 $258
Corporate bonds .............. 235 234 233 231 230 229 227
U.S. Treasury securities ........ 166 164 163 161 160 158 156
Asset-backed securities ........ 64 64 64 64 64 63 63
Commercial paper ............ 12 12 12 12 12 12 12
Total short-term
investments ............. $750 $744 $740 $734 $729 $723 $716
61