Electronic Arts 2012 Annual Report Download - page 135

Annual Report
General and Administrative
General and administrative expenses for fiscal years 2011 and 2010 were as follows (in millions):
March 31,
2011
% of Net
Revenue
March 31,
2010
% of Net
Revenue $ Change % Change
$301 8% $320 9% $(19) (6%)
General and administrative expenses decreased by $19 million, or 6 percent, in fiscal year 2011, as compared to
fiscal year 2010 primarily due to (1) a $25 million decrease in facilities-related expenses, primarily as a result of
the $14 million loss on our lease obligation related to our Redwood Shores headquarters facilities in fiscal year
2010 and (2) an $18 million decrease in contracted services due to costs related to the support of business
development projects in the prior year. These decreases were partially offset by (1) a $13 million increase in
additional personnel-related costs, (2) a $12 million increase in incentive-based compensation expense, and (3) a
$7 million increase in stock-based compensation expense.
Acquisition-Related Contingent Consideration
Acquisition-related contingent consideration related to Playfish decreased $19 million for the fiscal year 2011 as
compared to the fiscal year 2010, resulting from a revision in our estimate of the expected future cash flows over
the period in which the contingent obligation is expected to be settled.
Restructuring and Other Charges
Restructuring and other charges for fiscal years 2011 and 2010 were as follows (in millions):
March 31,
2011
% of Net
Revenue
March 31,
2010
% of Net
Revenue $ Change % Change
$161 4% $140 4% $21 15%
Fiscal 2011 Restructuring
In fiscal year 2011, we announced a plan focused on the restructuring of certain licensing and developer
agreements in an effort to improve the long-term profitability of our packaged goods business. Under this plan,
we amended certain licensing and developer agreements. To a much lesser extent, as part of this restructuring we
had workforce reductions and facilities closures through March 31, 2011. Substantially all of these exit activities
were completed by March 31, 2011.
During fiscal year 2011, we incurred charges of $148 million, consisting of (1) $104 million related to the
amendment of certain licensing agreements and other intangible asset impairment costs, (2) $31 million related to
the amendment of certain developer agreements, and (3) $13 million in employee-related expenses.
Fiscal 2010 Restructuring
In connection with our fiscal 2010 restructuring plan, during fiscal year 2011, we incurred $13 million of
restructuring charges primarily due to costs to assist in the reorganization of our business support functions.
During fiscal year 2010, we incurred $116 million of restructuring charges 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 costs to assist in the reorganization of our business support functions, and (3) $22
million related to the closure of certain of our facilities.
Other Restructuring and Reorganization
In connection with our fiscal 2009 restructuring plan and fiscal 2008 reorganization plan, during fiscal year 2010,
we incurred $14 million and $10 million of charges, respectively, primarily for facilities-related expenses under
the fiscal 2009 plan and contracted services costs to assist in the reorganization of our business support functions
under the fiscal 2008 plan.
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