Electronic Arts 2010 Annual Report Download - page 175

Annual Report
In addition, we have certain celebrity, league and content license contracts that contain minimum guarantee
payments and marketing commitments that may not be dependent on any deliverables. Celebrities and
organizations with whom we have contracts include: FIFA, FIFPRO Foundation, FAPL (Football Association
Premier League Limited), and DFL Deutsche Fußball Liga GmbH (German Soccer League) (professional
soccer); National Basketball Association (professional basketball); PGA TOUR and Tiger Woods (professional
golf); National Hockey League and NHL Players’ Association (professional hockey); Warner Bros. (Harry
Potter); National Football League Properties, PLAYERS Inc., and Red Bear Inc. (professional football);
Collegiate Licensing Company (collegiate football and basketball); ESPN (content in EA SPORTS games);
Hasbro, Inc. (most of Hasbro’s toy and game intellectual properties); and the Estate of Robert Ludlum (Robert
Ludlum novels and films). These developer and content license commitments represent the sum of (1) the cash
payments due under non-royalty-bearing licenses and services agreements, and (2) the minimum guaranteed
payments and advances against royalties due under royalty-bearing licenses and services agreements, the
majority of which are conditional upon performance by the counterparty. These minimum guarantee payments
and any related marketing commitments are included in the table below.
The following table summarizes our minimum contractual obligations as of March 31, 2010 (in millions):
Contractual Obligations
Fiscal Year Ending March 31, Leases(a)
Developer/
Licensor
Commitments(b) Marketing
Other
Purchase
Obligations Total
2011 ................................. $ 46 $ 253 $ 91 $ 2 $ 392
2012 ................................. 39 244 53 1 337
2013 ................................. 32 164 47 — 243
2014 ................................. 23 12 27 — 62
2015 ................................. 18 13 15 — 46
Thereafter ............................. 23 607 92 — 722
Total ............................. $181 $1,293 $325 $ 3 $1,802
(a) Lease commitments have not been reduced by minimum sub-lease rentals for unutilized office space
resulting from our reorganization activities of approximately $13 million due in the future under
non-cancelable sub-leases.
(b) Developer/licensor commitments include $13 million of commitments that have been recorded in current
and long-term liabilities and a corresponding amount in current and long-term assets in our Consolidated
Balance Sheet as of March 31, 2010 because payment is not contingent upon performance by the developer
or licensor.
In addition to what is included in the table above as of March 31, 2010, we had a liability for unrecognized tax
benefits and an accrual for the payment of related interest totaling $277 million, of which approximately $35
million is offset by prior cash deposits to tax authorities for issues pending resolution. For the remaining liability,
we are unable to make a reasonably reliable estimate of when cash settlement with a taxing authority will occur.
In addition to what is included in the table above as of March 31, 2010, in connection with our acquisition of
Playfish on November 9, 2009, we may be required to pay additional variable cash consideration that is
contingent upon the achievement of certain performance milestones through December 31, 2011. The additional
consideration is limited to a maximum of $100 million.
The amounts represented in the table above reflect our minimum cash obligations for the respective fiscal years,
but do not necessarily represent the periods in which they will be expensed in our Consolidated Financial
Statements. Included in the amounts above are $5 million in lease commitments for fiscal year 2011, for leases
expiring in less than one year as of March 31, 2010.
Total rent expense for all operating leases was $91 million, $98 million and $94 million, for the fiscal years
ended March 31, 2010, 2009 and 2008, respectively.
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