Electronic Arts 2009 Annual Report Download - page 165

Annual Report
shares of Class B common stock representing a 19 percent equity interest in DICE, and (2) a warrant to acquire
an additional 2,327,602 shares of to-be-issued Class A common stock at an exercise price of SEK 43.23. Prior to
our tender offer in the fourth quarter of fiscal year 2005, we accounted for our Class B common stock investment
in DICE under the equity method of accounting, as prescribed by APB No. 18, as amended. Separately, the
warrant was recognized at a cost of $5 million as of March 31, 2006 and was included in other assets in our
Consolidated Balance Sheets.
On January 27, 2005, we completed a tender offer for 3,235,053 shares of Class A common stock at a price of
SEK 61 per share, representing 32 percent of the outstanding Class A common stock of DICE. During the tender
offer period and through the end of fiscal 2005, we acquired, through open market purchases at an average price
of SEK 60.33, an additional 1,190,658 shares of Class A common stock, representing approximately 12 percent
of the outstanding Class A common stock of DICE. During the first three months and last two weeks of fiscal
year 2006, we acquired through open market purchases at an average price of SEK 63.07, an additional 1,071,152
shares of Class A common stock, representing approximately 10 percent of the outstanding Class A common
stock of DICE. Accordingly, on a cumulative basis as of March 31, 2006, we owned approximately 73 percent of
DICE on an undiluted basis (excluding the warrant discussed above). As a result, we have included the assets,
liabilities and results of operations of DICE in our Consolidated Financial Statements since January 27, 2005.
The percent of DICE stock that we did not own was reflected as minority interest on our Consolidated Financial
Statements from January 27, 2005 until the acquisition date of the remaining minority interest in October 2006.
At the time, DICE’s products were primarily sold through co-publishing agreements with us and our transactions
with DICE were recorded on an arm’s-length basis.
In October 2006, the remaining minority interest in DICE was acquired for a total of $27 million in cash,
including transaction costs. In connection with the acquisition of the remaining minority interest of DICE, the
warrant was reclassified to goodwill for this wholly owned subsidiary.
Except for acquired in-process technology, which is discussed below, acquired finite-lived intangible assets are
being amortized on a straight-line basis over their estimated lives ranging from one to four years. The intangible
assets that make up that amount include:
Gross Carrying
Amount
(in millions)
Weighted-Average
Useful Life
(in years)
Developed and Core Technology ..................................... $3 2
Trade Name ..................................................... 2 4
Total Finite-Lived Intangibles ..................................... $5 3
None of the goodwill recognized upon acquisition is deductible for tax purposes.
The acquired in-process technology was expensed in our Consolidated Statements of Operations upon
consummation of the acquisition, and in each period we increased our ownership percentage.
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