Electronic Arts 2010 Annual Report Download - page 167

Annual Report
(7) RESTRUCTURING CHARGES
Restructuring information as of March 31, 2010 was as follows (in millions):
Fiscal 2010
Restructuring
Fiscal 2009
Restructuring
Fiscal 2008
Reorganization Other Restructurings
Work-
force
Facilities-
related Other
Work-
force
Facilities-
related Other
Work-
force
Facilities-
related Other
Work-
force
Facilities-
related Other Total
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
Charges to operations ....... 62 22 32 1 13 — — 3 7 — — — 140
Charges settled in cash ...... (29) (2) (1) (9) (11) — — — (10) — — — (62)
Charges settled in non-cash . . (25) (9) (24) — (4) — — (3) — — — — (65)
Accrual reclassification ..... — — — — — — — — — — (7) — (7)
Balances as of March 31,
2010 .................... $ 8 $11 $ 7 $— $ 3 $— $— $— $— $— $— $— $ 29
Fiscal 2010 Restructuring
In fiscal year 2010, we announced details of a restructuring plan to narrow our product portfolio to provide
greater focus on titles with higher margin opportunities. Under this plan, we reduced our workforce by
approximately 1,200 employees and have been (1) consolidating or closing various facilities, (2) eliminating
certain titles, and (3) incurring IT and other costs to assist in reorganizing certain activities. The majority of these
actions were completed by March 31, 2010.
Since the inception of the fiscal 2010 restructuring plan through March 31, 2010, we have incurred charges of
$116 million, of which (1) $62 million were for employee-related expenses, (2) $32 million related to intangible
asset impairment costs, abandoned rights to intellectual property, and other costs to assist in the reorganization of
our business support functions, and (3) $22 million related to the closure of certain of our facilities. The $26
million restructuring accrual as of March 31, 2010 related to our fiscal 2010 restructuring is expected to be
settled by September, 2013. In fiscal year 2011, we anticipate incurring between $15 million and $20 million of
restructuring charges related to the fiscal 2010 restructuring.
Overall, including charges incurred through March 31, 2010, we expect to incur total cash and non-cash charges
between $140 million and $145 million by March 31, 2012. These charges consist primarily of (1) employee-
related costs (approximately $65 million), (2) intangible asset impairment costs, abandoned rights to intellectual
property costs, and other costs to assist in the reorganization of our business support functions (approximately
$35 million), (3) facilities exit costs (approximately $25 million), and (4) other reorganizational costs including
IT and consulting costs (approximately $20 million).
Fiscal 2009 Restructuring
In fiscal year 2009, we announced details of a cost reduction plan as a result of our performance combined with
the economic environment. This plan included 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, 2010, we have incurred charges of
$55 million, of which (1) $33 million were for employee-related expenses, (2) $20 million related to the closure
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