Electronic Arts 2016 Annual Report Download - page 165

Annual Report
The following table summarizes our minimum contractual obligations as of March 31, 2016 (in millions):
Fiscal Year Ending March 31,
Total 2017 2018 2019 2020 2021 Thereafter
Unrecognized commitments
Developer/licensor commitments ...................... $1,460 $211 $299 $277 $243 $189 $241
Marketing commitments ............................. 371 61 50 81 64 67 48
Operating leases .................................... 219 36 32 28 27 24 72
0.75% Convertible Senior Notes due 2016 interest(a) ....... 1 1———— —
Senior Notes interest ................................ 300 38 41 41 41 41 98
Other purchase obligations ........................... 81 298765 26
Total unrecognized commitments .................... 2,432 376 430 434 381 326 485
Recognized commitments
0.75% Convertible Senior Notes due 2016 principal and
interest(a) ....................................... 163 163———— —
Senior Notes principal and interest ..................... 1,004 4———600 400
Licensing and lease obligations(b) ...................... 147 22 23 24 25 26 27
Total recognized commitments ...................... 1,314 189 23 24 25 626 427
Total Commitments ............................... $3,746 $565 $453 $458 $406 $952 $912
(a) We will be obligated to pay the remaining $163 million principal amount of the Convertible Notes in cash
and deliver any excess conversion value in shares of our common stock upon redemption of the Convertible
Notes at maturity on July 15, 2016, or upon earlier conversion. See Note 12 for additional information
regarding our Convertible Notes.
(b) Lease commitments have not been reduced for approximately $2 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, 2016; 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, 2016, we had a liability for unrecognized tax
benefits and an accrual for the payment of related interest totaling $80 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 $89 million, $97 million and $97 million for the fiscal years
ended March 31, 2016, 2015 and 2014, respectively.
Legal Proceedings
On July 29, 2010, Michael Davis, a former NFL running back, filed a putative class action in the United States
District Court for the Northern District of California against the Company, alleging that certain past versions of
Madden NFL included the images of certain retired NFL players without their permission. In March 2012, the
trial court denied the Company’s request to dismiss the complaint on First Amendment grounds. In January 2015,
that trial court decision was affirmed by the Ninth Circuit Court of Appeals and the case was remanded back to
the United States District Court for the Northern District of California, where the case is pending.
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