Commitments And Contingencies

3 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

(11) COMMITMENTS AND CONTINGENCIES

Development, Celebrity, League and Content Licenses: Payments and Commitments

The products we produce in our studios are designed and created by our employee designers, artists, software programmers and by non-employee software developers (“independent artists” or “third-party developers”). We typically advance development funds to the independent artists and third-party developers during development of our games, usually in installment payments made upon the completion of specified development milestones. Contractually, these payments are generally considered advances against subsequent royalties on the sales of the products. These terms are set forth in written agreements entered into with the independent artists and third-party developers.

In addition, we have certain celebrity, league and content license contracts that contain minimum guarantee payments and marketing commitments that may not be dependent on any deliverables. Celebrities and organizations with whom we have contracts include, but are not limited to: FIFA (Fédération Internationale de Football Association), FIFPRO Foundation, FAPL (Football Association Premier League Limited), DFL Deutsche Fußball Liga E.V. (German Soccer League), and Liga Nacional De Futbol Profesional (professional soccer); National Basketball Association and National Basketball Players Association (professional basketball); National Hockey League and NHL Players’ Association (professional hockey); National Football League Properties and PLAYERS Inc. (professional football); William Morris Endeavor Entertainment LLC (professional mixed martial arts); ESPN (content in EA SPORTS games); Disney Interactive (Star Wars); and Fox Digital Entertainment, Inc. (The Simpsons). These developer and 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 June 30, 2020 (in millions):

			Fiscal Years Ending March 31,
			2021
			(Remaining
	Total		nine mos.)		2022		2023		2024		2025		2026		Thereafter
Unrecognized commitments
Developer/licensor commitments	$	1,840	$	212	$	329	$	305	$	298	$	308	$	261	$	127
Marketing commitments	705		121		136		117		116		105		78		32
Senior Notes interest	124		28		20		19		19		19		19		—
Operating lease imputed interest	19		5		5		3		2		2		1		1
Operating leases not yet commenced (a)	175		—		—		8		12		13		13		129
Other purchase obligations	152		53		65		21		5		4		4		—
Total unrecognized commitments	3,015		419		555		473		452		451		376		289
Recognized commitments
Senior Notes principal and interest	1,014		614		—		—		—		—		400		—
Operating leases	238		58		61		34		30		23		17		15
Transition Tax and other taxes	66		22		24		3		4		6		7		—
Licensing commitments	47		20		27		—		—		—		—		—
Total recognized commitments	1,365		714		112		37		34		29		424		15
Total Commitments	$	4,380	$	1,133	$	667	$	510	$	486	$	480	$	800	$	304

(a)As of June 30, 2020, we have entered into two office leases that have not yet commenced with aggregate future lease payments of approximately $175 million. These office leases are expected to commence in fiscal year 2021 and 2022, and will have lease terms of 15 and 12 years, respectively.

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 Condensed Consolidated Financial Statements. In addition, the amounts in the table above are presented based on the dates the amounts are contractually due as of June 30, 2020; 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 June 30, 2020, we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $291 million, of which we are unable to make a reasonably reliable estimate of when cash settlement with a taxing authority will occur.

Legal Proceedings

We are subject to claims and litigation arising in the ordinary course of business. We do not believe that any liability from any reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse effect on our Condensed Consolidated Financial Statements.