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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from   to
Commission File No. 000-17948
ELECTRONIC ARTS INC.
(Exact name of registrant as specified in its charter)
Delaware94-2838567
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
209 Redwood Shores Parkway
94065
Redwood CityCalifornia
(Address of principal executive offices)(Zip Code)
(650) 628-1500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class  Trading SymbolName of Each Exchange on Which Registered
Common Stock, $0.01 par value  EANASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act.   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    No  
As of November 5, 2021, there were 282,808,143 shares of the Registrant’s Common Stock, par value $0.01 per share, outstanding.
1


ELECTRONIC ARTS INC.
FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 2021
Table of Contents
 
  Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 6.

2


PART I – FINANCIAL INFORMATION

Item 1.Condensed Consolidated Financial Statements (Unaudited)

ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except par value data)
September 30, 2021
March 31, 2021 (a)
ASSETS
Current assets:
Cash and cash equivalents$1,630 $5,260 
Short-term investments342 1,106 
Receivables, net 1,031 521 
Other current assets387 326 
Total current assets3,390 7,213 
Property and equipment, net516 491 
Goodwill5,459 2,868 
Acquisition-related intangibles, net1,080 309 
Deferred income taxes, net2,139 2,045 
Other assets435 362 
TOTAL ASSETS$13,019 $13,288 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$136 $96 
Accrued and other current liabilities1,119 1,341 
Deferred net revenue (online-enabled games)1,322 1,527 
Total current liabilities2,577 2,964 
Senior notes, net1,877 1,876 
Income tax obligations318 315 
Deferred income taxes, net68 43 
Other liabilities323 250 
Total liabilities5,163 5,448 
Commitments and contingencies (See Note 12)
Stockholders’ equity:
Common stock, $0.01 par value. 1,000 shares authorized; 284 and 286 shares issued and outstanding, respectively
3 3 
Additional paid-in capital  
Retained earnings7,855 7,887 
Accumulated other comprehensive loss(2)(50)
Total stockholders’ equity7,856 7,840 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$13,019 $13,288 

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited).
(a) Derived from audited Consolidated Financial Statements.
3


ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)Three Months Ended
September 30,
Six Months Ended
September 30,
(In millions, except per share data)2021202020212020
Net revenue$1,826 $1,151 $3,377 $2,610 
Cost of revenue494 286 809 574 
Gross profit1,332 865 2,568 2,036 
Operating expenses:
Research and development553 421 1,068 859 
Marketing and sales233 156 423 277 
General and administrative176 133 345 269 
Amortization of intangibles30 6 70 11 
Total operating expenses992 716 1,906 1,416 
Operating income340 149 662 620 
Interest and other income (expense), net(14)(10)(28)(13)
Income before provision for (benefit from) income taxes326 139 634 607 
Provision for (benefit from) income taxes32 (46)136 57 
Net income$294 $185 $498 $550 
Earnings per share:
Basic$1.03 $0.64 $1.75 $1.90 
Diluted$1.02 $0.63 $1.73 $1.88 
Number of shares used in computation:
Basic285 289 285 289 
Diluted287 293 288 292 

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited).

4


ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)Three Months Ended
September 30,
Six Months Ended
September 30,
(In millions)2021202020212020
Net income$294 $185 $498 $550 
Other comprehensive income (loss), net of tax:
Net gains (losses) on available-for-sale securities (3) 8 
Net gains (losses) on derivative instruments50 (43)56 (80)
Foreign currency translation adjustments(17)9 (8)33 
Total other comprehensive income (loss), net of tax33 (37)48 (39)
Total comprehensive income$327 $148 $546 $511 

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited).
5


ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
 Common Stock
Additional Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (loss)
Total
Stockholders’
Equity
(In millions, except per share data)SharesAmount
Balances as of March 31, 2021
286,465 $3 $ $7,887 $(50)$7,840 
Total comprehensive income— — — 204 15 219 
Stock-based compensation— — 125 — — 125 
Awards assumed upon acquisition — — 23 — — 23 
Issuance of common stock1,209 — (105)— — (105)
Repurchase and retirement of common stock(2,292)— (43)(282)— (325)
Cash dividends declared ($0.17 per common share)
— — — (49)— (49)
Balances as of June 30, 2021285,382 $3 $ $7,760 $(35)$7,728 
Total comprehensive income— — — 294 33 327 
Stock-based compensation— — 149 — — 149 
Issuance of common stock602 — 25 — — 25 
Repurchase and retirement of common stock(2,318)— (174)(151)— (325)
Cash dividends declared ($0.17 per common share)
— — — (48)— (48)
Balances as of September 30, 2021283,666 $3 $ $7,855 $(2)$7,856 
(Unaudited)
 Common Stock
Additional Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (loss)
Total
Stockholders’
Equity
(In millions, except per share data)SharesAmount
Balances as of March 31, 2020
288,413 $3 $ $7,508 $(50)$7,461 
Total comprehensive income— — — 365 (2)363 
Stock-based compensation— — 102 — — 102 
Issuance of common stock1,088 — (66)— — (66)
Repurchase and retirement of common stock(747)— (36)(42)— (78)
Balances as of June 30, 2020288,754 $3 $ $7,831 $(52)$7,782 
Total comprehensive income— — — 185 (37)148 
Stock-based compensation— — 113 — — 113 
Issuance of common stock868 — 32 — — 32 
Repurchase and retirement of common stock —   —  
Balances as of September 30, 2020289,622 $3 $145 $8,016 $(89)$8,075 


See accompanying Notes to Condensed Consolidated Financial Statements (unaudited).

6


ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)Six Months Ended
September 30,
(In millions)20212020
OPERATING ACTIVITIES
Net income$498 $550 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion199 77 
Stock-based compensation274 215 
Change in assets and liabilities:
Receivables, net(446)39 
Other assets(51)(113)
Accounts payable42 106 
Accrued and other liabilities(250)(96)
Deferred income taxes, net(140)(32)
Deferred net revenue (online-enabled games)(205)(307)
Net cash provided by (used in) operating activities(79)439 
INVESTING ACTIVITIES
Capital expenditures(87)(63)
Proceeds from maturities and sales of short-term investments1,128 1,418 
Purchase of short-term investments(369)(1,416)
Acquisitions, net of cash acquired(3,394) 
Net cash used in investing activities(2,722)(61)
FINANCING ACTIVITIES
Proceeds from issuance of common stock41 43 
Cash dividends paid(97) 
Cash paid to taxing authorities for shares withheld from employees(121)(77)
Repurchase and retirement of common stock(650)(78)
Net cash used in financing activities(827)(112)
Effect of foreign exchange on cash and cash equivalents(2)25 
Increase (decrease) in cash and cash equivalents(3,630)291 
Beginning cash and cash equivalents5,260 3,768 
Ending cash and cash equivalents$1,630 $4,059 
Supplemental cash flow information:
Cash paid during the period for income taxes, net$303 $173 
Cash paid during the period for interest28 21 

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited).
7


ELECTRONIC ARTS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(1) DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content and services that can be played and watched on game consoles, PCs, mobile phones and tablets. We believe that the breadth and depth of our portfolio, live services offerings, and our use of multiple business models and distribution channels provide us with strategic advantages. Our foundation is a collection of intellectual property from which we create innovative games and content that enables us to build on-going and meaningful relationships with a community of players, creators and viewers. Our portfolio includes brands that we either wholly own (such as Battlefield, The Sims, Apex Legends, Need for Speed and Plants vs. Zombies) or license from others (such as FIFA, Madden NFL, UFC, NHL, Formula 1 and Star Wars). Through our live services offerings, we offer our players high-quality experiences designed to provide value to players and extend and enhance gameplay. These live services include extra content, subscription offerings and other revenue generated in addition to the sale of our base games and free-to-play games. In addition, we are focused on reaching more players whenever and wherever they want to play. We believe that we can add value to our network by making it easier for players to connect to a world of play by offering choice of business model, distribution channel and device.
Our fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations for the fiscal year ending March 31, 2022 contains 52 weeks and ends on April 2, 2022. Our results of operations for the fiscal year ended March 31, 2021 contained 53 weeks and ended on April 3, 2021. Our results of operations for the three and six months ended September 30, 2021 contained 13 weeks and 26 weeks, respectively, and ended on October 2, 2021. Our results of operations for the three and six months ended September 30, 2020 contained 13 weeks and 27 weeks, respectively, and ended on October 3, 2020. For simplicity of disclosure, all fiscal periods are referred to as ending on a calendar month end.
The Condensed Consolidated Financial Statements are unaudited and reflect all adjustments (consisting only of normal recurring accruals unless otherwise indicated) that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the amounts reported in these Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ materially from those estimates. The results of operations for the current interim periods are not necessarily indicative of results to be expected for the current year or any other period.
These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021, as filed with the United States Securities and Exchange Commission (“SEC”) on May 26, 2021.
Change in Estimated Offering Period
The offering period is the period in which we offer to provide the future update rights and/or online hosting for the game and extra content sold. Because the offering period is not an explicitly defined period, we must make an estimate of the offering
period for the service related performance obligations (i.e., future update rights and online hosting). For sales prior to July 1, 2020, revenues for service related performance obligations were generally recognized over an estimated nine-month period beginning in the month after shipment for games and extra content sold through retail, and an estimated six-month period for digitally-distributed games and extra content beginning in the month of sale. During the three months ended September 30, 2020, we completed our annual evaluation of the Estimated Offering Period and as a result, for sales after July 1, 2020, revenue for service related performance obligations for games and extra content sold through retail is recognized over an estimated ten-month period beginning in the month of sale, and revenue for service related performance obligations for digitally-distributed games and extra content is recognized over an estimated eight-month period beginning in the month of sale. During the three months ended September 30, 2021, this change to our Estimated Offering Period resulted in an increase in net revenue of $125 million and net income of $95 million, and an increase of $0.33 diluted earnings per share. During the six months ended September 30, 2021, this change to our Estimated Offering Period resulted in an increase in net revenue of $102 million and net income of $77 million, and an increase of $0.27 diluted earnings per share.
8


During the three months ended September 30, 2021, we completed our annual evaluation of the Estimated Offering Period. We have noted consumers are playing certain of our Online Hosted Service Games, such as PC and Console Free-to-Play games, for longer periods of time than in prior years as players engage with services we provide that are designed to enhance and extend gameplay, and as such, have concluded that the Estimated Offering Period for such games should be lengthened. As a result, for all new sales after July 1, 2021, the revenue that we recognize for service-related performance obligation related to our PC and Console Free-to-Play games is recognized generally over a twelve-month period. During the three months ended September 30, 2021, this change to our Estimated Offering Period resulted in an estimated decrease in net revenue of $17 million and net income of $13 million, and a decrease of $0.05 diluted earnings per share.
Recently Adopted Accounting Standards
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted ASU 2019-12 in the first quarter of fiscal year 2022. The amendments did not have a material impact on our Condensed Consolidated Financial Statements upon adoption.
The standard clarified and amended existing guidance with respect to transactions in which a taxpayer realizes a step-up in tax basis of goodwill. As we integrate acquired intellectual property into our global operating structure, we may realize a tax basis step-up in goodwill. In such situations, we are required to assess whether the integration relates to the acquisition or is a separate transaction. When the integration is a separate transaction, we may be required to recognize deferred tax assets to the extent the stepped-up tax basis exceeds the associated U.S. GAAP basis. This assessment requires judgment around key indicators such as whether the tax basis step-up was contemplated as part of the original acquisition to which the intellectual property relates, whether the integration results in cash taxes, and whether the integration is achieved through a simple tax election. See Note 10 — Income Taxes for a discussion of the prospective application of this standard to our intra-entity transfer of Codemasters intellectual property (the “Codemasters intra-entity sale”) during the three months ended September 30, 2021.
Other Recently Issued Accounting Standards
In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). The amendments in this update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. This update is effective for us beginning in the first quarter of fiscal year 2024. Early adoption is permitted. We are currently evaluating the timing of adoption and impact of this new standard on our Condensed Consolidated Financial Statements and related disclosures.



9


(2) FAIR VALUE MEASUREMENTS
There are various valuation techniques used to estimate fair value, the primary one being 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 September 30, 2021 and March 31, 2021, 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
September 30, 2021
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
Bank and time deposits$25 $25 $— $— Cash equivalents
Money market funds112 112 — — Cash equivalents
Available-for-sale securities:
Corporate bonds152 — 152 — Short-term investments
U.S. Treasury securities65 65 — — Short-term investments
Commercial paper35 — 35 — Short-term investments
Foreign government securities32 — 32 — Short-term investments
Asset-backed securities40 — 40 — Short-term investments
Certificates of deposit18 — 18 — Short-term investments
Foreign currency derivatives49 — 49 — Other current assets and other assets
Deferred compensation plan assets (a)
23 23 — — Other assets
Total assets at fair value$551 $225 $326 $ 
Liabilities
Foreign currency derivatives$12 $— $12 $— Accrued and other current liabilities and other liabilities
Deferred compensation plan liabilities (a)
23 23 — — Other liabilities
Total liabilities at fair value$35 $23 $12 $ 
10


  Fair Value Measurements at Reporting Date Using 
 
As of
March 31, 2021
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
Bank and time deposits$157 $157 $— $— Cash equivalents
Money market funds2,100 2,100 — — Cash equivalents
Available-for-sale securities:
Corporate bonds380 — 380 — Short-term investments and cash equivalents
U.S. Treasury securities437 437 — — Short-term investments and cash equivalents
U.S. agency securities3 — 3 — Short-term investments
Commercial paper142 — 142 — Short-term investments and cash equivalents
Foreign government securities67 — 67 — Short-term investments
Asset-backed securities112 — 112 — Short-term investments
Certificates of deposit 41 — 41 — Short-term investments
Foreign currency derivatives33 — 33 — Other current assets and other assets
Deferred compensation plan assets (a)
18 18 — — Other assets
Total assets at fair value$3,490 $2,712 $778 $ 
Liabilities
Foreign currency derivatives$40 $— $40 $— Accrued and other current liabilities and other liabilities
Deferred compensation plan liabilities (a)
19 19 — — Other liabilities
Total liabilities at fair value$59 $19 $40 $ 

(a)The Deferred Compensation Plan assets consist of various mutual funds. See Note 15 in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021, for additional information regarding our Deferred Compensation Plan.

11


(3) FINANCIAL INSTRUMENTS
Cash and Cash Equivalents
As of September 30, 2021 and March 31, 2021, our cash and cash equivalents were $1,630 million and $5,260 million, respectively. Cash equivalents were valued using quoted market prices or other readily available market information.
Short-Term Investments
Short-term investments consisted of the following as of September 30, 2021 and March 31, 2021 (in millions):
 
As of September 30, 2021
As of March 31, 2021
 Cost or
Amortized
Cost
Gross UnrealizedFair
Value
Cost or
Amortized
Cost
Gross UnrealizedFair
Value
 GainsLossesGainsLosses
Corporate bonds$152 $ $ $152 $372 $ $ $372 
U.S. Treasury securities65   65 374 1  375 
U.S. agency securities    3   3 
Commercial paper35   35 136   136 
Foreign government securities
32   32 67   67 
Asset-backed securities40   40 112   112 
Certificates of deposit18   18 41   41 
Short-term investments$342 $ $ $342 $1,105 $1 $ $1,106 
The following table summarizes the amortized cost and fair value of our short-term investments, classified by stated maturity as of September 30, 2021 and March 31, 2021 (in millions):
 
As of September 30, 2021
As of March 31, 2021
 Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Short-term investments
Due within 1 year$242 $242 $895 $896 
Due 1 year through 5 years94 94 203 203 
Due after 5 years6 6 7 7 
Short-term investments$342 $342 $1,105 $1,106 

(4) DERIVATIVE FINANCIAL INSTRUMENTS
Assets or liabilities associated with our derivative instruments and hedging activities are recorded at fair value in other current assets/other assets, or accrued and other current liabilities/other liabilities, respectively, on our Condensed Consolidated Balance Sheets. As discussed below, the accounting for gains and losses resulting from changes in fair value depends on the use of the derivative instrument and whether it is designated and qualifies for hedge accounting.
We transact business in various foreign currencies and have significant international sales and expenses denominated in foreign currencies, subjecting us to foreign currency risk. We purchase foreign currency forward contracts, generally with maturities of 18 months or less, to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in certain foreign currencies. Our cash flow risks are primarily related to fluctuations in the Euro, British pound sterling, Canadian dollar, Swedish krona, Australian dollar, Japanese yen, Chinese yuan, South Korean won and Polish zloty. In addition, we utilize foreign currency forward contracts to mitigate foreign currency exchange risk associated with foreign-currency-denominated monetary assets and liabilities, primarily intercompany receivables and payables. The foreign currency forward contracts not designated as hedging instruments generally have a contractual term of approximately three months or less and are transacted near month-end. We do not use foreign currency forward contracts for speculative trading purposes.
12


Cash Flow Hedging Activities
Certain of our forward contracts are designated and qualify as cash flow hedges. To qualify for hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedges and must be highly effective in offsetting changes to future cash flows on hedged transactions. The derivative assets or liabilities associated with our hedging activities are recorded at fair value in other current assets/other assets, or accrued and other current liabilities/other liabilities, respectively, on our Condensed Consolidated Balance Sheets. The gains or losses resulting from changes in the fair value of these hedges is initially reported, net of tax, as a component of accumulated other comprehensive income (loss) in stockholders’ equity. The gains or losses resulting from changes in the fair value of these hedges is subsequently reclassified into net revenue or research and development expenses, as appropriate, in the period when the forecasted transaction is recognized in our Condensed Consolidated Statements of Operations. In the event that the underlying forecasted transactions do not occur, or it becomes remote that they will occur, within the defined hedge period, the gains or losses on the related cash flow hedges are reclassified from accumulated other comprehensive income (loss) to net revenue or research and development expenses, in our Condensed Consolidated Statements of Operations.
Total gross notional amounts and fair values for currency derivatives with cash flow hedge accounting designation are as follows (in millions):
As of September 30, 2021
As of March 31, 2021
Notional AmountFair ValueNotional AmountFair Value
AssetLiabilityAssetLiability
Forward contracts to purchase$264 $2 $3 $370 $14 $1 
Forward contracts to sell$1,649 $38 $4 $1,840 $15 $35 
The effects of cash flow hedge accounting in our Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2021 and 2020 are as follows (in millions):
Three Months Ended September 30,Six Months Ended September 30,
2021202020212020
Net revenueResearch and developmentNet revenueResearch and developmentNet revenueResearch and developmentNet revenueResearch and development
Total amounts presented in our Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded$1,826 $553 $1,151 $421 $3,377 $1,068 $2,610 $859 
Gains (losses) on foreign currency forward contracts designated as cash flow hedges$(18)$4 $1 $ $(37)$12 $12 $(6)
Balance Sheet Hedging Activities
Our foreign currency forward contracts that are not designated as hedging instruments are accounted for as derivatives whereby the fair value of the contracts are reported as other current assets or accrued and other current liabilities on our Condensed Consolidated Balance Sheets, and gains and losses resulting from changes in the fair value are reported in interest and other income (expense), net, in our Condensed Consolidated Statements of Operations. The gains and losses on these foreign currency forward contracts generally offset the gains and losses in the underlying foreign-currency-denominated monetary assets and liabilities, which are also reported in interest and other income (expense), net, in our Condensed Consolidated Statements of Operations.
Total gross notional amounts and fair values for currency derivatives that are not designated as hedging instruments are accounted for as follows (in millions):
As of September 30, 2021
As of March 31, 2021
Notional AmountFair ValueNotional AmountFair Value
AssetLiabilityAssetLiability
Forward contracts to purchase$364 $ $5 $599 $ $4 
Forward contracts to sell$686 $9 $ $450 $4 $ 
13


The effect of foreign currency forward contracts not designated as hedging instruments in our Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2021 and 2020 was as follows (in millions):
 Three Months Ended
September 30,
Six Months Ended
September 30,
 2021202020212020
Interest and other income (expense), net
Total amounts presented in our Condensed Consolidated Statements of Operations in which the effects of balance sheet hedges are recorded$(14)$(10)$(28)$(13)
Gain (losses) on foreign currency forward contracts not designated as hedging instruments$4 $(3)$(3)$(