Electronic Arts 2009 Annual Report Download - page 159

Annual Report
The following table summarizes the amortized cost and fair value of our short-term investments, classified by
stated maturity as of March 31, 2009 and 2008 (in millions):
As of March 31, 2009 As of March 31, 2008
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Short-term investments excluding asset-backed securities
Due in 1 year or less ..................................... $245 $245 $163 $164
Due in 1-2 years ........................................ 156 159 254 257
Due in 2-3 years ........................................ 114 115 245 249
Asset-backed securities
Weighted average maturity less than 1 year ................... 15 15 55 56
Weighted average maturity 1-2 years ........................ — — 8 8
Short-term investments ................................. $530 $534 $725 $734
Asset-backed securities are separately disclosed as they are not due at a single maturity date. Our portfolio only
includes asset-backed securities that have weighted-average maturities of three years or less.
Marketable Equity Securities
Our investments in marketable equity securities consist of investments in common stock of publicly traded
companies and are accounted for in accordance with SFAS No. 115.
Marketable equity securities consisted of the following (in millions):
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
As of March 31, 2009 ...................................... $175 $190 $— $365
As of March 31, 2008 ...................................... $232 $501 $ (4) $729
Based on our review, we do not consider the investments with gross unrealized losses to be other-than-
temporarily impaired as of March 31, 2008. We evaluate our investments for impairment quarterly. If we
conclude that an investment is other-than-temporarily impaired, we will recognize an impairment charge in
income at that time.
In May 2007, we entered into a licensing agreement with and made a strategic equity investment in The9
Limited, a leading online game operator in China. We purchased approximately 15 percent of the outstanding
common shares (representing 15 percent of the voting rights at that time) of The9 for approximately $167
million. The licensing agreement gives The9 exclusive publishing rights for EA SPORTS™FIFA Online 2in
mainland China.
In April 2007, we expanded our commercial agreements with, and made strategic equity investments in, Neowiz
Corporation and a related online gaming company, Neowiz Games. We refer to Neowiz Corporation and Neowiz
Games collectively as “Neowiz.” Based in Korea, Neowiz is an online media and gaming company with which
we partnered in 2006 to launch EA SPORTS FIFA Online in Korea. We purchased 15 percent of the then-
outstanding common shares (representing 15 percent of the voting rights at that time) of Neowiz Corporation and
15 percent of the outstanding common shares (representing 15 percent of the voting rights at the time) of Neowiz
Games, for approximately $83 million. As discussed below, we also purchased preferred shares of Neowiz,
which are classified as other assets on our Consolidated Balance Sheets.
In February 2005, we purchased approximately 19.9 percent of the then-outstanding ordinary shares
(representing approximately 18 percent of the voting rights at the time) of Ubisoft Entertainment (“Ubisoft”) for
$91 million. As of March 31, 2009 and 2008, we owned approximately 15 percent of the outstanding shares of
79