Electronic Arts 2010 Annual Report Download - page 132

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Acquired In-Process Technology
Acquired in-process technology includes the value of products in the development stage that are not considered
to have reached technological feasibility or have an alternative future use. Accordingly, prior to the adoption of
FASB ASC 805, upon consummation of an acquisition, we generally incurred a charge for the related acquired
in-process technology, as reflected in our Consolidated Statements of Operations. See Note 5 of the Notes to
Consolidated Financial Statements included in Item 8 of this report.
Acquired in-process technology charges for fiscal years 2009 and 2008 were as follows (in millions):
March 31,
2009
% of Net
Revenue
March 31,
2008
% of Net
Revenue $ Change % Change
$3 — $138 4% $(135) (98%)
Acquired in-process technology decreased by $135 million, or 98 percent, in fiscal year 2009 as compared to
fiscal year 2008, primarily due to the charge of $138 million related to our acquisition of VGH in fiscal year
2008.
Losses on Strategic Investments, Net
Losses on strategic investments, net for fiscal years 2009 and 2008 were as follows (in millions):
March 31,
2009
% of Net
Revenue
March 31,
2008
% of Net
Revenue $ Change % Change
$(62) (1%) $(118) (3%) $56 (47%)
During the fiscal year ended March 31, 2009, losses on strategic investments, net decreased by $56 million, or 47
percent, as compared to the year ended March 31, 2008. We recognized (1) a $40 million impairment charge on
our investments in Neowiz’s common and preferred shares and (2) a $27 million impairment charge on our
investment in The9 during the fiscal year ended March 31, 2009. These charges were partially offset by a $5
million dividend received from our investment in The9.
During the fiscal year ended March 31, 2008, we recognized (1) an $81 million impairment charge on our
investment in The9 and (2) a $37 million impairment charge on our investments in Neowiz Corporation’s
common and preferred shares.
Interest and Other Income, Net
Interest and other income, net, for fiscal years 2009 and 2008 were as follows (in millions):
March 31,
2009
% of Net
Revenue
March 31,
2008
% of Net
Revenue $ Change % Change
$34 1% $98 3% $(64) (65%)
For fiscal year 2009, interest and other income, net, decreased by $64 million, or 65 percent, as compared to
fiscal year 2008, primarily due to a decrease in interest income resulting from lower yields on our cash, cash
equivalents and short-term investment balances.
Income Taxes
Income tax provision (benefit) for fiscal years 2009 and 2008 were as follows (in millions):
March 31,
2009
Effective
Tax Rate
March 31,
2008
Effective
Tax Rate % Change
$233 27.2% $(53) (10.3%) (540%)
54