Fair Value Measurements

9 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

(3) FAIR VALUE MEASUREMENTS

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability. We measure certain financial and nonfinancial assets and liabilities at fair value on a recurring and nonrecurring basis.

Fair Value Hierarchy

The three levels of inputs that may be used to measure fair value are as follows:

• Level 1. Quoted prices in active markets for identical assets or liabilities.
• Level 2. Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model- derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities.
• Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of December 31, 2011 and March 31, 2011, our assets and liabilities that were measured and recorded at fair value on a recurring basis were as follows (in millions):

Fair Value Measurements at Reporting Date Using
	As of December 31, 2011		Quoted Prices in Active Markets for Identical Financial Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Balance Sheet Classification
			(Level 1)		(Level 2)		(Level 3)
Assets
Money market funds	$	398	$	398	$	-	$	-	Cash equivalents
Available-for-sale securities:
Corporate bonds		151		-		151		-	Short-term investments
Marketable equity securities		143		143		-		-	Marketable equity securities
U.S. Treasury securities		138		138		-		-	Short-term investments and cash equivalents
U.S. agency securities		125		-		125		-	Short-term investments and cash equivalents
Commercial paper		18		-		18		-	Short-term investments and cash equivalents
Deferred compensation plan assets (a)		11		11		-		-	Other assets
Foreign currency derivatives		3		-		3		-	Other current assets
Total assets at fair value	$	987	$	690	$	297	$	-
Liabilities
Contingent consideration (b)	$	159	$	-	$	-	$	159	Accrued and other current liabilities and other liabilities
Total liabilities at fair value	$	159	$	-	$	-	$	159

	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)		8
Balance as of December 31, 2011	$	159

	As of March 31, 2011		(Level 1)		(Level 2)		(Level 3)		Balance Sheet Classification
Assets
Money market funds	$	774	$	774	$	-	$	-	Cash equivalents
Available-for-sale securities:
Corporate bonds		253		-		253		-	Short-term investments
Marketable equity securities		161		161		-		-	Marketable equity securities
U.S. Treasury securities		129		129		-		-	Short-term investments and cash equivalents
U.S. agency securities		102		-		102		-	Short-term investments
Commercial paper		31		-		31		-	Short-term investments and cash equivalents
Deferred compensation plan assets (a)		12		12		-		-	Other assets
Total assets at fair value	$	1,462	$	1,076	$	386	$	-
Liabilities
Contingent consideration (b)	$	51	$	-	$	-	$	51	Accrued and other current liabilities and other liabilities
Total liabilities at fair value	$	51	$	-	$	-	$	51

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Contingent Consideration
Balance as of March 31, 2010	$	65
Additions		3
Change in fair value (c)		(17	)
Balance as of March 31, 2011	$	51

^(a) The deferred compensation plan assets consist of various mutual funds.

^(b) The contingent consideration as of December 31, 2011 represents the estimated fair value of the additional variable cash consideration payable primarily in connection with our acquisitions of PopCap Games, Inc. ("PopCap"), Playfish Limited ("Playfish"), KlickNation Corporation ("KlickNation"), and Chillingo Limited ("Chillingo") that is contingent upon the achievement of certain performance milestones. The contingent consideration as of March 31, 2011 represents the estimated fair value of the additional variable cash consideration payable primarily in connection with our acquisitions of Playfish and Chillingo that is contingent upon the achievement of certain performance milestones. We estimated the fair value using expected future cash flows over the period in which the obligations are expected to be settled, and applied a discount rate that appropriately captures a market participant's view of the risk associated with the obligations. In connection with the acquisition of PopCap during the second quarter of fiscal year 2012, we recognized an additional $95 million of contingent consideration. See Note 6 for additional information related to the PopCap contingent consideration and final allocation of purchase price.

^(c) The change in fair value is reported as acquisition-related contingent consideration in our Condensed Consolidated Statements of Operations.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

There were no material impairment charges for assets and liabilities measured at fair value on a nonrecurring basis in periods subsequent to initial recognition during the three and nine months ended December 31, 2011 and 2010.