Electronic Arts 2009 Annual Report Download - page 162

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option contracts designated as hedging instruments under SFAS No. 133. Additionally, we had an
immaterial amount in losses recognized (ineffective portion) in interest and other income, net, on our
Consolidated Statements of Operations.
Balance Sheet Hedging Activities
Our foreign currency forward contracts are not designated as hedging instruments under SFAS No. 133.
Accordingly, any gains or losses resulting from changes in the fair value of the forward contracts are reported in
interest and other income, net, in our Consolidated Statements of Operations. The gains and losses on these
forward contracts generally offset the gains and losses associated with the underlying foreign-currency-
denominated assets and liabilities, which are also reported in interest and other income, net, in our Consolidated
Statements of Operations. As of March 31, 2009, we had foreign currency forward contracts to purchase and sell
approximately $63 million in foreign currencies. Of this amount, $53 million represented contracts to sell foreign
currencies in exchange for U.S. dollars, $7 million to purchase foreign currencies in exchange for U.S. dollars
and $3 million to sell foreign currencies in exchange for British pounds sterling. The fair value of our forward
contracts was immaterial as of March 31, 2009.
The effect of derivative instruments on our Consolidated Statements of Operations for the three months ended
March 31, 2009, was as follows (in millions):
Location of Gain
Recognized in Income on
Derivative
Amount of Gain
Recognized in Income
on Derivative
Foreign currency forward contracts not designated as
hedging instruments under SFAS No. 133 ............ Interest and other income, net $15
(5) BUSINESS COMBINATIONS
ThreeSF, Inc., Hands-On Mobile Inc. and Other Fiscal 2009 Acquisitions
In May 2008, we acquired ThreeSF, Inc. Based in San Francisco, California, ThreeSF’s Rupture service is an
online social network for gamers. Separately, in May 2008, we acquired certain assets of Hands-On Mobile Inc.
and its affiliates relating to its Korean Mobile games business based in Seoul, Korea. These business
combinations were completed for total cash consideration of approximately $45 million, including transaction
costs. During the three months ended December 31, 2008, we completed two additional acquisitions for total
cash consideration of approximately $18 million, including transaction costs. These acquisitions were not
material to our Consolidated Balance Sheets and Statements of Operations. The results of operations and the
estimated fair value of the acquired assets and assumed liabilities have been included in our Consolidated
Financial Statements since the date of the acquisitions. See Note 6 for information regarding goodwill and other
intangible assets.
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