Electronic Arts 2009 Annual Report Download - page 168

(7) RESTRUCTURING CHARGES
Restructuring information was as follows (in millions):
Fiscal 2009 Restructuring Fiscal 2008 Reorganization Other Restructurings
TotalWorkforce
Facilities-
related Other Workforce
Facilities-
related Other Workforce
Facilities-
related Other
Balances as of March 31, 2006 . . . $ — $— $— $ — $ — $ — $ 4 $15 $ 2 $ 21
Charges to operations ........ — — — — — — 10 1 4 15
Charges settled in cash ....... — — — — — — (14) (7) (5) (26)
Balances as of March 31, 2007 . . . — — — — — — — 9 1 10
Charges to operations ........ — — — 12 58 27 6 — — 103
Charges settled in cash ....... — — — (11) (3) (22) (6) — (1) (43)
Charges settled in non-cash . . . — — — — (55) (1) — — — (56)
Balances as of March 31, 2008 . . . — — — 1 — 4 — 9 — 14
Charges to operations ........ 32 7 2 — 22 12 4 1 — 80
Charges settled in cash ....... (24) (1) — (1) — (13) (4) (3) — (46)
Charges settled in non-cash . . . — (1) (2) — (22) — — — — (25)
Balances as of March 31, 2009 . . . $ 8 $ 5 $— $ — $ — $ 3 $ — $ 7 $— $ 23
Fiscal 2009 Restructuring
In fiscal year 2009, we announced details of a cost reduction plan as a result of our performance combined with
the current economic environment. This plan includes a narrowing of our product portfolio, a reduction in our
worldwide workforce of approximately 11 percent, or 1,100 employees, the closure of 10 facilities, and
reductions in other variable costs and capital expenditures.
Since the inception of the fiscal 2009 restructuring plan through March 31, 2009, we have incurred charges of
approximately $41 million, of which (1) $32 million were for employee-related expenses, (2) $7 million related
to the closure of certain of our facilities, and (3) $2 million related to asset impairments. The restructuring
accrual of $13 million as of March 31, 2009 related to our fiscal 2009 restructuring is expected to be settled by
September 2016. This accrual is included in other accrued expenses presented in Note 9 of the Notes to
Consolidated Financial Statements.
In fiscal year 2010, we anticipate incurring between $15 million and $20 million of restructuring charges related
to the fiscal 2009 restructuring. Overall, including charges incurred through March 31, 2009, we expect to incur
cash and non-cash charges between $55 million and $60 million by March 2010. These charges will consist
primarily of employee-related costs (approximately $35 million), facility exit costs (approximately $25 million),
as well as other costs including asset impairment costs (approximately $5 million).
Fiscal 2008 Reorganization
In June 2007, we announced a plan to reorganize our business into several new divisions including, at the time
four new “Labels”: EA SPORTS™, EA Games, EA Casual Entertainment and The Sims in order to streamline
decision-making, improve global focus, and speed new ideas to market. In October 2007, our Board of Directors
approved a plan of reorganization (“fiscal 2008 reorganization plan”) in connection with the reorganization of
our business into four new Labels. During fiscal year 2009, we consolidated and reorganized two of our Labels.
As a result, we have three Labels, EA SPORTS, EA Games and EA Play, as well as a new organization, EA
Interactive, which reports into our Publishing business. Each Label, as well as EA Interactive, operates with
dedicated studio and product marketing teams focused on consumer-driven priorities.
Since the inception of the fiscal 2008 reorganization plan through March 31, 2009, we have incurred charges of
approximately $131 million, of which (1) $12 million were for employee-related expenses, (2) $80 million
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