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Annual
Report
Credit Facility
On August 30, 2012, we entered into a $500 million senior unsecured revolving credit facility with a syndicate of
banks. The credit facility terminates on February 29, 2016 and contains an option to arrange with existing lenders
and/or new lenders for them to provide up to an aggregate of $250 million in additional commitments for
revolving loans. Proceeds of loans made under the credit facility may be used for general corporate purposes.
The loans bear interest, at our option, at the base rate plus an applicable spread or an adjusted LIBOR rate plus an
applicable spread, in each case with such spread being determined based on our consolidated leverage ratio for
the preceding fiscal quarter. We are also obligated to pay other customary fees for a credit facility of this size and
type. Interest is due and payable in arrears quarterly for loans bearing interest at the base rate and at the end of an
interest period (or at each three month interval in the case of loans with interest periods greater than three
months) in the case of loans bearing interest at the adjusted LIBOR rate. Principal, together with all accrued and
unpaid interest, is due and payable on February 29, 2016.
The credit agreement contains customary affirmative and negative covenants, including covenants that limit or
restrict our ability to, among other things, incur subsidiary indebtedness, grant liens, dispose of all or
substantially all assets and pay dividends or make distributions, in each case subject to customary exceptions for
a credit facility of this size and type. We are also required to maintain compliance with a capitalization ratio and
maintain a minimum level of total liquidity and a minimum level of domestic liquidity.
The credit agreement contains customary events of default, including among others, non-payment defaults,
covenant defaults, bankruptcy and insolvency defaults and a change of control default, in each case, subject to
customary exceptions for a credit facility of this size and type. The occurrence of an event of default could result
in the acceleration of the obligations under the credit agreement, an obligation by any guarantors to repay the
obligations in full and an increase in the applicable interest rate.
As of March 31, 2013, no amounts were outstanding under the credit facility. During the three months ended
September 30, 2012, we paid $2 million of debt issuance costs in connection with obtaining this credit
facility. These costs are deferred and are being amortized to interest expense over the 3.5 years term of the credit
facility.
The following table summarizes our interest expense recognized for fiscal years 2013, 2012, and 2011 that is
included in interest and other income (expense), net on our Consolidated Statements of Operations (in millions):
Year Ended March 31,
2013
2012
2011
Amortization of debt discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(20)
$(14)
$--
Amortization of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)
(2)
--
Coupon interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)
(3)
--
Other interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
(1)
(1)
Total interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(29)
$(20)
$ (1)
(12) COMMITMENTS AND CONTINGENCIES
Lease Commitments
As of March 31, 2013, we leased certain of our current facilities, furniture and equipment under non-cancelable
operating lease agreements. We were required to pay property taxes, insurance and normal maintenance costs for
certain of these facilities and any increases over the base year of these expenses on the remainder of our facilities.
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
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