Electronic Arts 2012 Annual Report Download - page 184

The following table summarizes stock-based compensation expense resulting from stock options, restricted stock,
restricted stock units and the ESPP included in our Consolidated Statements of Operations (in millions):
Year Ended March 31,
2012 2011 2010
Cost of revenue ..................................................... $ 2 $ 2 $ 2
Marketing and sales ................................................. 26 21 16
General and administrative ............................................ 36 40 33
Research and development ............................................ 106 111 110
Restructuring and other charges ........................................ — 2 26
Stock-based compensation expense ................................... $170 $176 $187
During the fiscal years ended March 31, 2012, 2011 and 2010, we did not recognize any provision for or benefit
from income taxes related to our stock-based compensation expense.
As of March 31, 2012, our total unrecognized compensation cost related to stock options was $12 million and is
expected to be recognized over a weighted-average service period of 2.0 years. As of March 31, 2012, our total
unrecognized compensation cost related to restricted stock and restricted stock units (collectively referred to as
“restricted stock rights”) was $293 million and is expected to be recognized over a weighted-average service
period of 2.0 years. During the fiscal year ended March 31, 2012, we determined that the performance criteria for
certain performance-based restricted stock units was improbable of achievement and accordingly reversed stock-
based compensation expense of $7 million previously recognized within our Consolidated Statement of
Operations. As the criteria for these certain performance-based restricted stock was improbable of achievement,
the related unrecognized compensation cost is excluded from the total unrecognized compensation cost related to
restricted stock rights as of March 31, 2012.
For fiscal year ended March 31, 2012, we recognized $3 million of tax benefits from the exercise of stock
options, net of $1 million of deferred tax write-offs; of this amount $4 million of excess tax benefit related to
stock-based compensation was reported in the financing activities on our Consolidated Statements of Cash
Flows. For the fiscal year ended March 31, 2011, we recognized $2 million of tax expense from the exercise of
stock options, net of $3 million of deferred tax write-offs; of this amount $1 million of excess tax benefit related
to stock-based compensation was reported in the financing activities on our Consolidated Statements of Cash
Flows. For the fiscal year ended March 31, 2010, we recognized $14 million of tax benefits from the exercise of
stock options for which we did not have any deferred tax asset write-offs; all of which represented excess tax
benefits related to stock-based compensation and was reported in financing activities.
Summary of Plans and Plan Activity
Equity Incentive Plans
Our 2000 Equity Incentive Plan (the “Equity Plan”) allows us to grant options to purchase our common stock and
to grant restricted stock, restricted stock units and stock appreciation rights to our employees, officers and
directors. Pursuant to the Equity Plan, incentive stock options may be granted to employees and officers and
non-qualified options may be granted to employees, officers and directors, at not less than 100 percent of the fair
market value on the date of grant.
We also have options outstanding that were granted under the VG Holding Corp. 2005 Stock Incentive Plan (the
“VGH 2005 Plan”), which we assumed in connection with our acquisition of VGH.
In connection with our acquisition of VGH, we also established the 2007 Electronic Arts VGH Acquisition
Inducement Award Plan (the “VGH Inducement Plan”), which allowed us to grant restricted stock units to
service providers, who were employees of VGH or a subsidiary of VGH immediately prior to the consummation
of the acquisition and who became employees of EA following the acquisition. The restricted stock units granted
under the VGH Inducement Plan vest pursuant to either (1) time-based vesting schedules over a period of up to
100