Electronic Arts 2010 Annual Report Download - page 83

Annual Report
The amounts of net revenue and long-lived assets attributable to each of our geographic regions for each of the
last three fiscal years are set forth in Note 17 of the Notes to Consolidated Financial Statements, included in
Item 8 of this report.
In fiscal years 2010 and 2009, no titles accounted for 10 percent or more of our total net revenue. In fiscal year
2008, sales of Rock Band, distributed for three platforms, represented approximately 10 percent of our total net
revenue.
We were initially incorporated in California in 1982. In September 1991, we reincorporated under the laws of
Delaware. Our principal executive offices are located at 209 Redwood Shores Parkway, Redwood City,
California 94065 and our telephone number is [phone].
Significant Business Developments in Fiscal 2010
Acquisition of Playfish Limited
On November 9, 2009, we acquired all of the outstanding shares of Playfish Limited (“Playfish™”) for an
aggregate purchase price of approximately $308 million in cash and equity. In addition, we may be required to
pay additional variable cash consideration that is contingent upon the achievement of certain performance
milestones through December 31, 2011. This additional consideration is limited to a maximum of $100 million.
Playfish is a developer of free-to-play social games that can be played on social networking platforms and
generates revenue through sales of digital content and Internet-based advertising.
Fiscal 2010 Restructuring Plan
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.
Employee Stock Option Exchange Program
On October 21, 2009, we launched a voluntary Employee Stock Option Exchange Program (“Exchange
Program”) to permit our eligible employees to exchange outstanding eligible options for a lesser number of
restricted stock units, shares of restricted stock (in Canada only), or new options (in China only) to be granted
under our 2000 Equity Incentive Plan (the “Equity Plan”). The Exchange Program offer period began on
October 21, 2009 and ended on November 18, 2009.
Options eligible for the Exchange Program were those options granted prior to October 21, 2008, that had an
exercise price per share greater than $28.18, which was the 52-week high trading price of our common stock
measured as of the start date of the Exchange Program, as reported on the NASDAQ Global Select Market.
The Exchange Program resulted in options to purchase approximately 16,561,000 shares of our common stock
being exchanged for restricted stock units to acquire approximately 4,996,000 shares, approximately 923,000
shares of restricted stock awards and new options to purchase approximately 18,000 shares.
Redwood Shores Headquarters Facilities Purchase
On July 13, 2009, we purchased our Redwood Shores headquarters facilities concurrent with the expiration and
extinguishment of the lessor’s financing agreements. These facilities were subject to lease obligations to
non-affiliated parties, which expired in July 2009, and had previously been accounted for as operating leases. The
total amount paid under the terms of the leases was $247 million, of which $233 million related to the purchase
5