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Fair Value Measurements at Reporting
Date Using
As of
March 31,
2012
Quoted Prices
in Active
Markets for
Identical
Financial
Instruments
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
(Level 1)
(Level 2)
(Level 3)
Balance Sheet Classification
Assets
Money market funds . . . . . . . . . . . . . . .
$ 490
$490
$ --
$ --
Cash equivalents
Available-for-sale securities:
U.S. Treasury securities . . . . . . . . . .
170
170
--
--
Short-term investments and
cash equivalents
Corporate bonds . . . . . . . . . . . . . . . .
150
--
150
--
Short-term investments
Marketable equity securities . . . . . . .
119
119
--
--
Marketable equity securities
U.S. agency securities . . . . . . . . . . . .
116
--
116
--
Short-term investments
Commercial paper . . . . . . . . . . . . . . .
16
--
16
--
Short-term investments and
cash equivalents
Deferred compensation plan assets
(a)
. . .
11
11
--
--
Other assets
Foreign currency derivatives . . . . . . . . .
2
--
2
--
Other current assets
Total assets at fair value . . . . . . . . . .
$1,074
$790
$284
$ --
Liability
Contingent consideration
(b)
. . . . . . . . . .
$ 112
$ --
$ --
$112
Accrued and other current
liabilities and other liabilities
Total liability at fair value . . . . . . . . .
$ 112
$ --
$ --
$112
Fair Value Measurements Using
Significant Unobservable Inputs (Level 3)
Contingent
Consideration
Balance as of March 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 51
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100
Change in fair value
(c)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Payments
(d)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(25)
Reclassification
(e)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(25)
Balance as of March 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$112
(a)
The deferred compensation plan assets consist of various mutual funds.
(b)
The contingent consideration as of March 31, 2013 and 2012 represents the estimated fair value of the
additional variable cash consideration payable primarily in connection with our acquisitions of PopCap
Games, Inc. ("PopCap"), KlickNation Corporation ("KlickNation"), and Chillingo Limited ("Chillingo")
that is contingent upon the achievement of certain performance milestones. We estimated the fair value of
the acquisition-related contingent consideration payable using probability-weighted discounted cash flow
models, and applied a discount rate that appropriately captures a market participant's view of the risk
associated with the obligations. During fiscal year 2013, the discount rate used had a weighted average of
13 percent. During fiscal year 2012, the discount rate used had a weighted average of 12 percent. The
significant unobservable input used in the fair value measurement of the acquisition-related contingent
consideration payable is forecasted earnings. Significant changes in forecasted earnings would result in a
significantly higher or lower fair value measurement. At March 31, 2013 and 2012, the fair market value of
acquisition-related contingent consideration totaled $43 million and $112 million, respectively, compared to
a maximum potential payout of $566 million and $572 million, respectively.
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