Electronic Arts 2011 Annual Report Download - page 154

The equity included in the consideration above consisted of restricted stock and restricted stock units, using the
quoted market price of our common stock on the date of grant.
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 and is limited to a maximum of $100
million based on tiered revenue targets. The estimated fair value of the contingent consideration arrangement at
the acquisition date was $63 million. We estimated the fair value of the contingent consideration using
probability assessments of expected future cash flows over the period in which the obligation is expected to be
settled, and applied a discount rate that appropriately captures a market participant’s view of the risk associated
with the obligation.
The final allocation of the purchase price was based upon valuations for certain assets and was completed during
the fourth quarter of fiscal year 2010. The following table summarizes the fair values of assets acquired and
liabilities assumed at the date of acquisition (in millions):
Current assets ......................................................................... $ 32
Deferred income taxes, net ............................................................... 20
Property and equipment, net .............................................................. 1
Goodwill ............................................................................. 274
Finite-lived intangibles assets ............................................................. 53
Contingent consideration ................................................................. (63)
Other liabilities ........................................................................ (9)
Total purchase price .................................................................. $308
All of the goodwill was initially assigned to our Playfish operating segment, but subsequently a portion was
re-allocated to other operating segments. None of the goodwill recognized upon acquisition is deductible for tax
purposes. See Note 6 for additional information related to the changes in the carrying amount of goodwill and
Note 17 for segment information.
The results of operations of Playfish and the estimated fair market values of the assets acquired and liabilities
assumed have been included in our Consolidated Financial Statements since the date of acquisition.
Other acquisition-related intangibles acquired in this transaction are finite-lived and are being amortized on a
straight-line basis over their estimated lives ranging from two to five years. The intangible assets as of the date of
the acquisition include:
Gross Carrying
Amount
Weighted-Average
Useful Life
(in millions) (in years)
Registered user base ............................................... $33 2
Developed and core technology ...................................... 13 5
Trade names and trademarks ........................................ 4 5
Other intangibles ................................................. 3 4
Total finite-lived intangibles ...................................... $53 3
Other Fiscal Year 2010 Acquisitions
During the fiscal year ended March 31, 2010, we completed three additional acquisitions that did not have a
significant impact on our Consolidated Financial Statements.
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