Electronic Arts 2015 Annual Report Download - page 155

Annual Report
The following table summarizes our minimum contractual obligations as of March 31, 2015 (in millions):
Fiscal Year Ending March 31,
Total 2016 2017 2018 2019 2020 Thereafter
Unrecognized commitments
Developer/licensor commitments ................... $1,584 $192 $256 $271 $231 $209 $425
Marketing commitments .......................... 347 41 64 49 48 48 97
Operating leases ................................. 181 41 32 23 19 17 49
0.75% Convertible Senior Notes due 2016 interest(a) .... 7 5 2——— —
Other purchase obligations ........................ 46 27 12322 —
Total unrecognized commitments ................. 2,165 306 366 346 300 276 571
Recognized commitments
0.75% Convertible Senior Notes due 2016 principal(a) ... 633633———— —
Licensing and lease obligations(b) ................... 162 15 22 23 24 25 53
Total recognized commitments ................... 795 648 22 23 24 25 53
Total Commitments ............................ $2,960 $954 $388 $369 $324 $301 $624
(a) Included in the $7 million coupon interest on the Notes is $1 million of accrued interest recognized as of
March 31, 2015. We will be obligated to pay the $632.5 million principal amount of the Notes 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 conversion. During the fiscal quarter ended March 31, 2015, the Sales Price
Condition was met and as a result, the Notes are currently convertible at the option of the holder though
July 4, 2015. See Note 12 for additional information regarding our Notes.
(b) See Note 8 for additional information regarding recognized commitments resulting from our restructuring
plans. Lease commitments have not been reduced for approximately $3 million due in the future from third
parties under non-cancelable sub-leases. See Note 9 for additional information regarding recognized
obligations from our licensing-related commitments.
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, 2015; however, certain payment obligations may be
accelerated depending on the performance of our operating results. Up to $32 million of the unrecognized
amounts in the table above may be payable, at the licensor’s election, in shares of our common stock, subject to a
$10 million maximum during any fiscal year. The number of shares to be issued will be based on fair market
value at the time of issuance.
In addition to what is included in the table above, as of March 31, 2015, we had a liability for unrecognized tax
benefits and an accrual for the payment of related interest totaling $68 million, of which we are unable to make a
reasonably reliable estimate of when cash settlement with a taxing authority will occur.
Total rent expense for our operating leases was $97 million, $97 million and $94 million for the fiscal years
ended March 31, 2015, 2014 and 2013, respectively.
Legal Proceedings
We are a defendant in several actions that allege we misappropriated the likenesses of various college athletes in
certain of our college-themed sports games. In September 2013, we reached an agreement to settle all actions
brought by college athletes against us. We recognized a $30 million accrual during the three months ended
September 30, 2013 associated with the anticipated settlement. On September 3, 2014, the United States District
Court for the Northern District of California granted preliminary approval of the settlement and set a hearing in
July 2015, to determine whether to grant its final approval of the settlement.
85