Electronic Arts 2009 Annual Report Download - page 98

• Retaining key employees and maintaining the key business and customer relationships of the businesses
we acquire,
• The need to integrate an acquired company’s accounting, management information, human resource and
other administrative systems to permit effective management and timely reporting,
• The possibility that we will not discover important facts during due diligence that could have a material
adverse impact on the value of the businesses we acquire,
• Potential impairment charges incurred to write down the carrying amount of intangible assets generated
as a result of an acquisition,
• Litigation or other claims in connection with, or inheritance of claims or litigation risks as a result of, an
acquisition, including claims from terminated employees, customers or other third parties,
• Significant accounting charges resulting from the completion and integration of a sizeable acquisition and
increased capital expenditures,
• Significant acquisition-related accounting adjustments, particularly relating to an acquired company’s
deferred revenue, that may cause reported revenue and profits of the combined company to be lower than
the sum of their stand-alone revenue and profits,
• The possibility that the combined company would not achieve the expected benefits, including any
anticipated operating and product synergies, of the acquisition as quickly as anticipated,
• The possibility that the costs of, or operational difficulties arising from, an acquisition would be greater
than anticipated,
• To the extent that we engage in strategic transactions outside of the United States, we face additional
risks, including risks related to integration of operations across different cultures and languages, currency
risks and the particular economic, political and regulatory risks associated with specific countries, and
• The possibility that a change of control of a company we acquire triggers a termination of contractual or
intellectual property rights important to the operation of its business.
Future acquisitions and investments could also involve the issuance of our equity and equity-linked securities
(potentially diluting our existing stockholders), the incurrence of debt, contingent liabilities or amortization
expenses, write-offs of goodwill, intangibles, or acquired in-process technology, or other increased cash and
non-cash expenses, such as stock-based compensation. Any of the foregoing factors could harm our financial
condition or prevent us from achieving improvements in our financial condition and operating performance that
could have otherwise been achieved by us on a stand-alone basis. Our stockholders may not have the opportunity
to review, vote on or evaluate future acquisitions or investments.
We may be subject to claims of infringement of third-party intellectual property rights, which could harm
our business.
From time to time, third parties may assert against us alleged patent, copyright, trademark, personal publicity
rights, or other intellectual property rights to technologies, products or delivery/payment methods that are
important to our business. Although we believe that we make reasonable efforts to ensure that our products do
not violate the intellectual property rights of others, it is possible that third parties still may claim infringement.
For example, we may be subject to intellectual property infringement claims from certain individuals and
companies who have acquired patent portfolios for the sole purpose of asserting such claims against other
companies. In addition, many of our products are highly realistic and feature materials that are based on real
world examples, which may be the subject of intellectual property infringement claims of others. From time to
time, we receive communications from third parties regarding such claims. Existing or future infringement
claims against us, whether valid or not, may be time consuming and expensive to defend. Such claims or
litigations could require us to pay damages and other costs, stop selling the affected products, redesign those
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