Electronic Arts 2014 Annual Report Download - page 125

Annual Report
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, 2014, and the effect we
expect them to have on our liquidity and cash flow in future periods (in millions):
Fiscal Year Ending March 31,
Total 2015 2016 2017 2018 2019 Thereafter
Unrecognized commitments
Developer/licensor commitments ................. $1,301 $132 $288 $212 $129 $ 98 $442
Marketing commitments ........................ 254 48 41 62 24 24 55
Operating leases .............................. 148 46 39 23 17 13 10
0.75% Convertible Senior Notes due 2016 interest(a) .... 12552———
Other purchase obligations ...................... 19 17 2——— —
Total unrecognized commitments ............... 1,734 248 375 299 170 135 507
Recognized commitments
0.75% Convertible Senior Notes due 2016 principal(a) ...633——633—— —
Licensing and lease obligations(b) ................. 59 12 11 34 1 1 —
Total recognized commitments ................. 692 12 11 667 1 1 —
Total Commitments .......................... $2,426 $260 $386 $966 $171 $136 $507
(a) Included in the $12 million coupon interest on the 0.75% Convertible Senior Notes due 2016 is $1 million
of accrued interest recognized as of March 31, 2014. We will be obligated to pay the $632.5 million
principal amount of the 0.75% Convertible Senior Notes due 2016 in cash and any excess conversion value
in shares of our common stock upon redemption of the Notes at maturity on July 15, 2016 or upon earlier
redemption. The $632.5 million principal amount excludes $53 million of unamortized discount of the
liability component. See Note 12 to the Consolidated Financial Statements for additional information
regarding our 0.75% Convertible Senior Notes due 2016.
(b) See Note 8 to the Consolidated Financial Statements for additional information regarding recognized
commitments resulting from our restructuring plans. Lease commitments have not been reduced for
approximately $6 million due in the future from third parties under non-cancelable sub-leases.
The unrecognized 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 recognized and expensed in our
Consolidated Financial Statements. In addition, the amounts in the table above are presented based on the dates
the amounts are contractually due as of March 31, 2014; however, certain payment obligations may be
accelerated depending on the performance of our operating results.
In addition to what is included in the table above, as of March 31, 2014, we had a liability for unrecognized tax
benefits and an accrual for the payment of related interest totaling $188 million, of which we are unable to make
a reasonably reliable estimate of when cash settlement with a taxing authority will occur.
Subsequent to March 31, 2014, we entered into or amended various licensor and lease agreements with third
parties, which contingently commits us to pay an additional approximately $110 million at various dates through
fiscal year 2025.
Also, in addition to what is included in the table above as of March 31, 2014, in connection with our KlickNation
and Chillingo acquisitions, we may be required to pay an additional $10 million of cash consideration based upon
the achievement of certain performance milestones through March 31, 2015. As of March 31, 2014, we have
accrued $4 million of contingent consideration on our Consolidated Balance Sheet representing the estimated fair
value of the contingent consideration.
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