http://investor.ea.com/phoenix.zhtml?c=88189&p=irol-newsArti…
Ten Titles Hitting Retail Shelves This Holiday Season
Number One 3rd Party Publisher on Wii Year to Date
REDWOOD CITY, Calif.--(BUSINESS WIRE)--Nov. 1, 2007--Electronic
Arts (NASDAQ:ERTS) today announced preliminary financial results
for its second quarter ended September 30, 2007.
Fiscal Second Quarter Results (comparisons are to the quarter ended
September 30, 2006)
Net revenue for the quarter was $640 million, down 18 percent as
compared with $784 million for the prior year. Beginning in fiscal
2008, EA no longer charges for its service related to certain
online-enabled packaged goods games. As a result, the Company
recognizes revenue from the sale of these games over the estimated
service period. This change resulted in a $296 million sequential
net increase in deferred net revenue as of September 30, 2007,
which will be recognized in future periods.
Sales were driven by Madden NFL 08, FIFA 08, NCAA(R) Football 08,
Tiger Woods PGA TOUR(R) 08 and MySims(TM), each selling over one
million copies.
Gross profit for the quarter was $245 million, down 45 percent
year-over-year. Net loss for the quarter was $195 million as
compared with net income of $22 million for the prior year. Diluted
loss per share was $0.62 as compared with earnings per share of
$0.07 for the prior year.
Non-GAAP diluted earnings per share were $0.27 as compared with
$0.21 for the prior year. (Please see Non-GAAP Financial Measures
and reconciliation information included in this release.)
"Our strategic priorities on quality, innovation and managing cost
are showing progress," said John Riccitiello, Chief Executive
Officer. "Highly accessible new properties like SKATE and MySims
have broken through with consumers and EA SPORTS continues to
deliver great experiences on every platform. We've also announced a
restructuring as part of a plan to better align cost with
revenues."
"We think this will be a great holiday season for consumers," said
Warren Jenson, Chief Financial and Administrative Officer. "We plan
to launch over ten titles including The Simpsons Game, Need for
Speed Pro Street, Hellgate: London, Rock Band, NBA Live 08, SimCity
Societies and Crysis."
Highlights
-- Madden NFL 08 sold 4.5 million copies and was EA's best
performing title in the quarter.
-- FIFA 08 sold 2.9 million copies internationally - with sell
through at retail up double digits year-over-year.
-- MySims, a new owned intellectual property, sold over one million
copies on the Nintendo DS(TM) and Wii.
-- SKATE, a new owned intellectual property with a metacritic
rating of 85, is the highest rated new game in the popular skate
boarding genre.
-- On the Wii(TM) from Nintendo, EA had 12 percent share in North
America and an estimated 13 percent in Europe - making EA the
number one third party publisher on this system year-to-date.
-- Current generation (Xbox 360(TM), PLAYSTATION(R)3 and Wii)
revenue (excluding deferral) was $399 million.
-- EA announced the acquisition of BioWare Corp. and Pandemic
Studios -- leaders in Role Playing, Action and Adventure games.
-- Will Wright, creator of The Sims(TM) and SPORE(TM), was the
recipient of the British Academy of Film and Television Arts
Fellowship - the first interactive entertainment professional to
receive this award.
EA's Reorganization Plan
On October 29, 2007, EA's Board of Directors approved a plan of
reorganization in connection with the reorganization of EA's
business into several divisions, including four new "Labels".
Pursuant to the plan, over the next 24 months, EA anticipates (a)
closing certain facilities, including EA's facility in Chertsey,
England, (b) relocating and/or eliminating certain job positions,
(c) incurring costs in connection with lease and other contract
terminations, and (d) incurring IT and consulting costs to assist
in the reorganization of business support functions. The Company
expects to incur total pre-tax charges of between $90 million and
$110 million, the majority of which will be incurred in fiscal
2008. The Company estimates these actions will result in annual
pre-tax cost savings of approximately $25 million to $30
million.
Business Outlook
The following forward-looking statements, as well as those made
above, reflect expectations as of November 1, 2007. Results may be
materially different and are affected by many factors, such as:
consumer demand for console hardware and the ability of the console
manufacturers to produce an adequate supply of consoles to meet
that demand; consumer demand for games for legacy consoles,
particularly the PlayStation(R)2 computer entertainment system; the
popular appeal of EA's products; development delays on EA's
products; changes in anticipated costs, expected savings and impact
on EA's operations of the Company's reorganization plan; changes in
the timing and anticipated financial impact of the Company's
acquisition of VG Holding Corp. (BioWare Corp. and Pandemic
Studios); changes in foreign exchange rates; the overall global
economy; competition in the industry; EA's effective tax rate and
other factors detailed in this release and in EA's annual and
quarterly SEC filings.
Fiscal Year Expectations - Ending March 31, 2008
-- Net revenue is expected to be between $3.35 and $3.65 billion -
up $150 million from the Company's previous guidance.
-- Net revenue excluding the impact of the change in deferred net
revenue (packaged goods and digital content) is expected to be
between $3.8 and $4.0 billion - up $150 million from the Company's
previous guidance.
-- GAAP diluted loss per share is expected to be between ($1.60)
and ($0.91) - down from the Company's previous guidance of ($0.63)
to ($0.10).
-- Non-GAAP diluted earnings per share are expected to be between
$0.85 and $1.15 - down $0.05 from the Company's previous guidance
due to the dilutive impact of the proposed acquisition of BioWare
Corp. and Pandemic Studios. Expected non-GAAP diluted earnings per
share exclude the following items from expected GAAP diluted loss
per share:
-- $0.86 to $1.10 for the impact of the change in deferred net
revenue (packaged goods and digital content)
-- $0.48 to $0.61 for acquisition-related charges related to the
Company's pending acquisition of BioWare Corp. and Pandemic
Studios
-- $0.39 of estimated stock-based compensation
-- $0.19 to $0.21 of charges related to the reorganization
announced today
-- $0.15 of amortization of intangible assets
-- $0.01 of restructuring charges related to the reorganization and
establishment of an international publishing headquarters in
Geneva.
-- $0.02 related to the difference between diluted and basic share
count
Fiscal Third Quarter Expectations - Ending December 31, 2007
-- Net revenue is expected to be between $1.325 and $1.575
billion.
-- Net revenue excluding the impact of the change in deferred net
revenue (packaged goods and digital content) is expected to be
between $1.625 and $1.8 billion.
-- GAAP diluted earnings (loss) per share are expected to be
between ($0.28) and $0.12.
-- Non-GAAP diluted earnings per share are expected to be between
$0.75 and $0.95. Expected non-GAAP diluted earnings per share
exclude the following items from expected GAAP diluted loss per
share:
-- $0.54 to $0.74 for the impact of the change in deferred net
revenue (packaged goods and digital content)
-- $0.17 to $0.19 of charges related to the reorganization
announced today
-- $0.09 of estimated stock-based compensation
-- $0.03 of amortization of intangible assets
-- $0.02 related to the difference between diluted and basic share
count
Conference Call
Electronic Arts will host a conference call today at 2:00 pm PT
(5:00 pm ET) to review its results for the second quarter fiscal
2008 ended September 30, 2007 and its outlook for the future.
During the course of the call, Electronic Arts may also disclose
material developments affecting its business and/or financial
performance. Listeners may access the conference call live through
the following dial-in number: (877) 723-9518, access code 220497,
or via webcast: http://investor.ea.com.
A dial-in replay of the conference call will be provided until
November 8, 2007 at (719) 457-0820, access code 220497. A webcast
archive of the conference call will be available for one year at
http://investor.ea.com.
Analyst Meeting
Electronic Arts will host an analyst meeting on February 12, 2008
at 9:00 am PT (12:00 pm ET) at its corporate headquarters in
Redwood City, California.
Non-GAAP Financial Measures
To supplement the Company's unaudited condensed consolidated
financial statements presented in accordance with GAAP, Electronic
Arts uses certain non-GAAP measures of financial performance. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation from, as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP, and may be different from non-GAAP financial
measures used by other companies. In addition, these non-GAAP
measures have limitations in that they do not reflect all of the
amounts associated with the Company's results of operations as
determined in accordance with GAAP. The non-GAAP financial measures
used by Electronic Arts include: non-GAAP net revenue, non-GAAP
gross profit, non-GAAP operating income (loss), non-GAAP net income
(loss) and historical and estimated non-GAAP diluted earnings
(loss) per share. These non-GAAP financial measures exclude the
following items from the Company's unaudited condensed consolidated
statements of operations:
-- The impact of the change in deferred net revenue (packaged goods
and digital content)
-- Acquired in-process technology
-- Amortization of intangibles
-- Certain litigation expenses
-- Restructuring charges
-- Stock-based compensation
-- Income tax adjustments (consisting of the income tax effect of
the items listed above and certain one-time income tax
adjustments)
Electronic Arts may consider whether other significant
non-recurring items that arise in the future should also be
excluded in calculating the non-GAAP financial measures it
uses.
Electronic Arts believes that these non-GAAP financial measures,
when taken together with the corresponding GAAP financial measures,
provide meaningful supplemental information regarding the Company's
performance by excluding certain items that may not be indicative
of the Company's core business, operating results or future
outlook. Electronic Arts' management uses, and believes that
investors benefit from referring to, these non-GAAP financial
measures in assessing the Company's operating results both as a
consolidated entity and at the business unit level, as well as when
planning, forecasting and analyzing future periods. These non-GAAP
financial measures also facilitate comparisons of the Company's
performance to prior periods.
In addition to the reasons stated above, which are generally
applicable to each of the items Electronic Arts excludes from its
non-GAAP financial measures, the Company believes it is appropriate
to exclude certain items for the following reasons:
Amortization of Intangibles. When analyzing the operating
performance of an acquired entity, Electronic Arts' management
focuses on the total return provided by the investment (i.e.,
operating profit generated from the acquired entity as compared to
the purchase price paid) without taking into consideration any
allocations made for accounting purposes. Because the purchase
price for an acquisition necessarily reflects the accounting value
assigned to intangible assets (including acquired in-process
technology and goodwill), when analyzing the operating performance
of an acquisition in subsequent periods, the Company's management
excludes the GAAP impact of acquired intangible assets to its
financial results. Electronic Arts believes that such an approach
is useful in understanding the long-term return provided by an
acquisition and that investors benefit from a supplemental non-GAAP
financial measure that excludes the accounting expense associated
with acquired intangible assets.
In addition, in accordance with GAAP, Electronic Arts generally
recognizes expenses for internally-developed intangible assets as
they are incurred, notwithstanding the potential future benefit
such assets may provide. Unlike internally-developed intangible
assets, however, and also in accordance with GAAP, the Company
generally capitalizes the cost of acquired intangible assets and
recognizes that cost as an expense over the useful lives of the
assets acquired (other than goodwill, which is not amortized, and
acquired in-process technology, which is expensed immediately, as
required under GAAP). As a result of their GAAP treatment, there is
an inherent lack of comparability between the financial performance
of internally-developed intangible assets and acquired intangible
assets. Accordingly, Electronic Arts believes it is useful to
provide, as a supplement to its GAAP operating results, a non-GAAP
financial measure that excludes the amortization of acquired
intangibles.
Stock-Based Compensation. Electronic Arts adopted SFAS 123(R),
"Share-Based Payment" beginning in its fiscal year 2007. When
evaluating the performance of its individual business units, the
Company does not consider stock-based compensation charges.
Likewise, the Company's management teams exclude stock-based
compensation expense from their short and long-term operating
plans. In contrast, the Company's management teams are held
accountable for cash-based compensation and such amounts are
included in their operating plans. Further, when considering the
impact of equity award grants, Electronic Arts places a greater
emphasis on overall shareholder dilution rather than the accounting
charges associated with such grants.
Video game platforms have historically had a life cycle of four to
six years, which causes the video game software market to be
cyclical. The Company's management analyzes its business and
operating performance in the context of these business cycles,
comparing Electronic Arts' performance at similar stages of
different cycles. For comparability purposes, Electronic Arts
believes it is useful to provide a non-GAAP financial measure that
excludes stock-based compensation in order to better understand the
long-term performance of its core business.
Restructuring Charges. Although Electronic Arts has engaged in
various restructuring activities in the past, each has been a
discrete, extraordinary event based on a unique set of business
objectives. Each of these restructurings has been unlike its
predecessors in terms of its operational implementation, business
impact and scope. The Company does not engage in restructuring
activities on a regular basis or in the ordinary course of
business. As such, the Company believes it is appropriate to
exclude restructuring charges from its non-GAAP financial
measures.
Change in Deferred Net Revenue (Packaged Goods and Digital
Content). Beginning in fiscal 2008, Electronic Arts is no longer
able to objectively determine the fair value of the online service
included in certain of its packaged goods games and online content.
As a result, the Company recognizes the revenue from the sale of
these games and content over the estimated online service period.
Although Electronic Arts will defer the recognition of a
significant portion of its net revenue as a result of this change,
there will be no adverse impact to its operating cash flow.
Internally, Electronic Arts' management excludes the impact of the
change in deferred net revenue related to packaged goods games and
digital content in its non-GAAP financial measures when evaluating
the Company's operating performance, when planning, forecasting and
analyzing future periods, and when assessing the performance of its
management team. The Company believes that excluding the impact of
the change in deferred net revenue from its operating results is
important to facilitate comparisons to prior periods during which
the Company was able to objectively determine the fair value of the
online service and not delay the recognition of significant amounts
of net revenue related to online-enabled packaged goods.
In the financial tables below, Electronic Arts has provided a
reconciliation of the most comparable GAAP financial measure to
each of the historical non-GAAP financial measures used in this
press release.
Forward-Looking Statements
Some statements set forth in this release, including the estimates
under the headings "Business Outlook" contain forward-looking
statements that are subject to change. Statements including words
such as "anticipate", "believe", "estimate" or "expect" and
statements in the future tense are forward-looking statements.
These forward-looking statements are subject to risks and
uncertainties that could cause actual events or actual future
results to differ materially from the expectations set forth in the
forward-looking statements. Some of the factors which could cause
the Company's results to differ materially from its expectations
include the following: timely development and release of Electronic
Arts' products; competition in the interactive entertainment
industry; the Company's ability to successfully implement its
reorganization plans; the consumer demand for, and the availability
of an adequate supply of console hardware units (including the Xbox
360(TM) video game and entertainment system, the PLAYSTATION(R)3
computer entertainment system and the Wii(TM)); consumer demand for
software for legacy consoles, particularly the PlayStation 2; the
Company's ability to predict consumer preferences among competing
hardware platforms; the Company's ability to realize the
anticipated benefits of its pending acquisition of VG Holding
Corp.; consumer spending trends; the seasonal and cyclical nature
of the interactive game segment; the Company's ability to manage
expenses during fiscal year 2008; the Company's ability to attract
and retain key personnel; changes in the Company's effective tax
rates; adoption of new accounting regulations and standards;
potential regulation of the Company's products in key territories;
developments in the law regarding protection of the Company's
products; fluctuations in foreign exchange rates; the Company's
ability to secure licenses to valuable entertainment properties on
favorable terms; and other factors described in the Company's
Annual Report on Form 10-K for the year ended March 31, 2007 and
Quarterly Report for the quarter ended June 30, 2007. These
forward-looking statements speak only as of November 1, 2007.
Electronic Arts assumes no obligation and does not intend to update
these forward-looking statements, including those made under the
heading "Business Outlook". In addition, the financial results set
forth in this release are estimates based on information currently
available to Electronic Arts. While Electronic Arts believes these
estimates are meaningful, they could differ from the actual amounts
that Electronic Arts ultimately reports in its Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 2007.
Electronic Arts assumes no obligation and does not intend to update
these estimates prior to filing its Form 10-Q for the fiscal
quarter ended September 30, 2007.
About Electronic Arts
Electronic Arts Inc. (EA), headquartered in Redwood City,
California, is the world's leading interactive entertainment
software company. Founded in 1982, the company develops, publishes,
and distributes interactive software worldwide for video game
systems, personal computers, cellular handsets and the Internet.
Electronic Arts markets its products under four brand names: EA
SPORTS(TM), EA(TM), EA SPORTS BIG(TM) and POGO(TM). In fiscal 2007,
EA posted revenue of $3.09 billion and had 24 titles that sold more
than one million copies. EA's homepage and online game site is
www.ea.com. More information about EA's products and full text of
press releases can be found on the Internet at
http://info.ea.com.
EA, EA SPORTS, EA SPORTS BIG, POGO, MySims, Need for Speed,
SimCity, SPORE and The Sims are trademarks or registered trademarks
of Electronic Arts Inc. in the U.S. and/or other countries. Crysis
is a trademark of Crytek. Rock Band is a trademark of Harmonix
Music Systems, Inc., a division of MTV Networks. The Simpsons is a
trademark of Twentieth Century Fox Film Corporation. Hellgate(TM):
London is a trademark and/or registered trademark of Flagship
Studios, Inc. throughout the world. John Madden, NFL, NCAA, Tiger
Woods, PGA TOUR, NBA and FIFA are trademarks or other intellectual
property of their respective owners and used with permission.
"PlayStation" and "PLAYSTATION" are registered trademark of Sony
Computer Entertainment Inc. Xbox and Xbox 360 are trademarks of the
Microsoft group of companies. Nintendo DS and Wii are trademarks of
Nintendo.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in millions, except per share data)
Three Months Ended Six Months Ended
September 30, September 30,
------------------ ------------------
2007 2006 2007 2006
--------- -------- --------- --------
Net revenue $ 640 $ 784 $ 1,035 $ 1,196
Cost of goods sold 395 339 561 506
--------- -------- --------- --------
Gross profit 245 445 474 690
Operating expenses:
Marketing and sales 164 108 246 185
General and administrative 84 72 155 131
Research and development 259 238 508 454
Amortization of intangibles 7 7 14 13
Acquired in-process technology - 2 - 2
Restructuring charges 5 4 7 10
--------- -------- --------- --------
Total operating expenses 519 431 930 795
--------- -------- --------- --------
Operating income (loss) (274) 14 (456) (105)
Interest and other income, net 32 24 58 45
--------- -------- --------- --------
Income (loss) before provision
for (benefit from) income taxes (242) 38 (398) (60)
Provision for (benefit from)
income taxes (47) 16 (70) (1)
--------- -------- --------- --------
Net income (loss) $ (195) $ 22 $ (328) $ (59)
========= ======== ========= ========
Earnings (loss) per share:
Basic $ (0.62) $ 0.07 $ (1.05) $ (0.19)
Diluted $ (0.62) $ 0.07 $ (1.05) $ (0.19)
Shares used in computation:
Basic 313 307 312 306
Diluted 313 315 312 306
Non-GAAP Results (in millions, except per share data)
The following tables reconcile the Company's net income (loss)
and
diluted earnings (loss) per share as presented in its Unaudited
Condensed Consolidated Statements of Operations as prepared in
accordance with Generally Accepted Accounting Principles ("GAAP")
to
its non-GAAP net income and non-GAAP diluted earnings per share.
The
Company's non-GAAP results exclude the following, if any: the
impact
of the change in deferred net revenue (packaged goods and
digital
content), acquisition-related expenses (such as acquired
in-process
technology and amortization of intangibles), certain litigation
expenses, restructuring charges, and stock-based compensation.
In
addition, the Company's non-GAAP results exclude income tax
adjustments consisting of the income tax expense associated with
the
foregoing excluded items and the impact of certain one-time
income
tax adjustments.
Three Months Ended Six Months Ended
September 30, September 30,
------------------ ------------------
2007 2006 2007 2006
--------- -------- --------- --------
Net income (loss) $ (195) $ 22 $ (328) $ (59)
Change in deferred net revenue
(packaged goods and digital
content) (a) 296 332
Acquired in-process technology - 2 - 2
Amortization of intangibles 7 7 14 13
COGS amortization of
intangibles 7 7 14 13
Restructuring charges 5 4 7 10
Stock-based compensation 38 33 67 70
Income tax adjustments (71) (10) (88) (22)
--------- -------- --------- --------
Non-GAAP net income $ 87 $ 65 $ 18 $ 27
========= ======== ========= ========
Non-GAAP diluted earnings per
share $ 0.27 $ 0.21 $ 0.06 $ 0.09
Number of shares used in non-
GAAP diluted earnings per share
computation 320 315 319 314
(a) Effective April 1, 2007, the Company began to exclude the
impact
of the change in deferred net revenue (packaged goods and
digital
content) in its fiscal 2008 non-GAAP financial measures.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in millions)
September 30, March 31,
2007 2007 (a)
------------- -------------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 2,176 $ 2,635
Marketable equity securities 716 341
Receivables, net of allowances of $185
and $214, respectively 424 256
Inventories 103 62
Deferred income taxes, net 174 84
Other current assets 260 219
------------- -------------
Total current assets 3,853 3,597
Property and equipment, net 507 484
Investment in affiliates 33 6
Goodwill 737 734
Other intangibles, net 182 210
Deferred income taxes, net 77 25
Other assets 131 90
------------- -------------
TOTAL ASSETS $ 5,520 $ 5,146
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 224 $ 180
Accrued and other current liabilities 472 814
Deferred net revenue (packaged goods and
digital content) 364 32
------------- -------------
Total current liabilities 1,060 1,026
Income tax obligations 296 -
Deferred income taxes, net 6 8
Other liabilities 87 80
------------- -------------
Total liabilities 1,449 1,114
Stockholders' equity:
Common stock 3 3
Paid-in capital 1,602 1,412
Retained earnings 2,014 2,323
Accumulated other comprehensive income 452 294
------------- -------------
Total stockholders' equity 4,071 4,032
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 5,520 $ 5,146
============= =============
(a) Derived from audited financial statements.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in millions)
Three Months Ended Six Months Ended
September 30, September 30,
------------------ ------------------
2007 2006 2007 2006
--------- -------- --------- --------
OPERATING ACTIVITIES
Net income (loss) $ (195) $ 22 $ (328) $ (59)
Adjustments to reconcile net
income (loss) to net cash used
in operating activities:
Depreciation, amortization
and accretion 37 37 73 72
Stock-based compensation 38 33 67 70
Realized net (gains) losses
on investments and sale of
property and equipment (1) 1 (1) 1
Acquired in-process
technology - 2 - 2
Change in assets and
liabilities:
Receivables, net (294) (222) (156) (63)
Inventories (29) (8) (39) (5)
Other assets (33) 2 (78) 14
Accounts payable 103 85 29 35
Accrued and other
liabilities 49 56 (84) (86)
Deferred income taxes, net (75) (14) (111) (25)
Deferred net revenue
(packaged goods and
digital content) 296 - 332 -
--------- -------- --------- --------
Net cash used in operating
activities (104) (6) (296) (44)
--------- -------- --------- --------
INVESTING ACTIVITIES
Capital expenditures (23) (48) (37) (86)
Purchase of marketable equity
securities and investments in
affiliates - - (277) -
Proceeds from maturities and
sales of short-term
investments 750 484 1,391 680
Purchase of short-term
investments (312) (455) (1,209) (602)
Acquisition of subsidiary, net
of cash acquired - (67) - (67)
--------- -------- --------- --------
Net cash provided by (used in)
investing activities 415 (86) (132) (75)
--------- -------- --------- --------
FINANCING ACTIVITIES
Proceeds from issuance of
common stock 68 48 86 85
Excess tax benefit from stock-
based compensation 23 8 31 12
Repayment of note assumed in
connection with acquisition - - - (14)
--------- -------- --------- --------
Net cash provided by financing
activities 91 56 117 83
--------- -------- --------- --------
Effect of foreign exchange on
cash and cash equivalents 9 - 14 6
--------- -------- --------- --------
Increase (decrease) in cash and
cash equivalents 411 (36) (297) (30)
Beginning cash and cash
equivalents 663 1,248 1,371 1,242
--------- -------- --------- --------
Ending cash and cash equivalents 1,074 1,212 1,074 1,212
Short-term investments 1,102 960 1,102 960
--------- -------- --------- --------
Ending cash, cash equivalents
and short-term investments $ 2,176 $ 2,172 $ 2,176 $ 2,172
========= ======== ========= ========
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business
Metrics
(in millions, except per share data, SKU count and Headcount)
Q2 Q3 Q4 Q1 Q2 YOY %
FY07 FY07 FY07 FY08 FY08 Change
------ ------ -------- -------- -------- -------
CONSOLIDATED
FINANCIAL DATA
Net revenue 784 1,281 613 395 640 (18%)
Net revenue -
trailing twelve
months ("TTM") 3,108 3,119 3,091 3,073 2,929 (6%)
Gross profit 445 811 378 229 245 (45%)
Gross margin - %
of net revenue 57% 63% 62% 58% 38%
Gross profit - TTM 1,855 1,898 1,879 1,863 1,663 (10%)
Gross margin -
TTM % of net
revenue 60% 61% 61% 61% 57%
Operating income
(loss) 14 215 (71) (183) (274) (2057%)
Operating income
(loss) margin -
% of net
revenue 2% 17% (12%) (46%) (43%)
Operating income
(loss) - TTM 267 135 39 (25) (313) (217%)
Operating income
(loss) margin -
TTM % of net
revenue 9% 4% 1% (1%) (11%)
Net income (loss) 22 160 (25) (132) (195) (986%)
Diluted earnings
(loss) per
share $0.07 $0.50 ($0.08) ($0.42) ($0.62) (986%)
Net income - TTM 184 85 76 25 (192) (204%)
Diluted earnings
(loss) per
share - TTM $0.59 $0.26 $0.24 $0.07 ($0.62) (205%)
CASH FLOW DATA
Operating cash
flow (6) 227 214 (192) (104) (1633%)
Operating cash
flow - TTM 571 520 397 243 145 (75%)
Capital
expenditures 48 32 60 14 23 (52%)
Capital
expenditures -
TTM 153 154 178 154 129 (16%)
BALANCE SHEET DATA
Cash, cash
equivalents and
short-term
investments 2,172 2,411 2,635 2,189 2,176 -
Marketable equity
securities 204 235 341 660 716 251%
Receivables, net 267 551 256 123 424 59%
Inventories 67 72 62 74 103 54%
Deferred net
revenue (packaged
goods and digital
content) (a) 32 68 364 N/M
STOCK-BASED
COMPENSATION
Cost of goods sold 1 - 1 - 1
Marketing and
sales 4 5 3 4 5
General and
administrative 9 10 7 8 10
Research and
development 19 20 17 16 22
----------------------------------------
Total Stock-
Based
Compensation 33 35 28 28 38
STOCK-BASED
COMPENSATION - as a
% of Net Revenue
Cost of goods sold - - - - -
Marketing and
sales 1% - 1% 1% 1%
General and
administrative 1% 1% 1% 2% 2%
Research and
development 2% 2% 3% 4% 3%
----------------------------------------
Total Stock-
Based
Compensation 4% 3% 5% 7% 6%
OTHER
Employees 7,517 7,761 7,893 8,101 8,239 10%
Diluted weighted-
average shares 315 319 310 311 313
GEOGRAPHIC NET
REVENUE MIX
North America 512 637 307 163 362 (29%)
International 272 644 306 232 278 2%
Europe 245 583 264 204 246 -
Asia 27 61 42 28 32 19%
----------------------------------------
Net Revenue 784 1,281 613 395 640 (18%)
GEOGRAPHIC NET
REVENUE MIX - as a
% of Net Revenue
North America 65% 50% 50% 41% 57%
International 35% 50% 50% 59% 43%
Europe 31% 45% 43% 52% 38%
Asia 4% 5% 7% 7% 5%
----------------------------------------
Net Revenue 100% 100% 100% 100% 100%
(a) Effective April 1, 2007, the Company began to exclude the
impact
of the change in deferred net revenue (packaged goods and
digital
content) in its fiscal 2008 non-GAAP financial measures.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business
Metrics
(in millions, except per share data, SKU count and Headcount)
Q2 Q3 Q4 Q1 Q2 YOY %
FY07 FY07 FY07 FY08 FY08 Change
------ ------ -------- -------- -------- -------
PLATFORM NET REVENUE
MIX
Xbox 360 166 172 82 47 218 31%
PlayStation 2 269 400 117 61 73 (73%)
Wii - 29 36 29 59 N/M
PLAYSTATION 3 - 41 52 13 17 N/M
Xbox 65 62 7 3 12 (82%)
Nintendo GameCube 14 32 4 1 3 (79%)
----------------------------------------
Total Consoles 514 736 298 154 382 (26%)
PC 86 218 128 89 79 (8%)
Nintendo DS 14 55 27 25 47 236%
Cellular Handsets 35 35 36 33 37 6%
PSP 64 118 39 21 21 (67%)
Game Boy Advance 8 21 3 2 4 (50%)
----------------------------------------
Total Mobility 121 229 105 81 109 (10%)
Co-publishing and
Distribution 39 49 45 39 33 (15%)
Subscription
Services 15 24 24 23 23 53%
Licensing,
Advertising &
Other 9 25 13 9 14 56%
----------------------------------------
Total Internet
Services,
Licensing &
Other 24 49 37 32 37 54%
----------------------------------------
Net Revenue 784 1,281 613 395 640 (18%)
----------------------------------------
PLATFORM NET REVENUE
MIX - as a % of Net
Revenue
Xbox 360 21% 13% 13% 12% 34%
PlayStation 2 35% 31% 19% 16% 11%
Wii - 2% 6% 7% 9%
PLAYSTATION 3 - 3% 9% 3% 3%
Xbox 8% 5% 1% 1% 2%
Nintendo GameCube 2% 3% 1% - 1%
----------------------------------------
Total Consoles 66% 57% 49% 39% 60%
PC 11% 17% 21% 23% 12%
Nintendo DS 2% 4% 5% 6% 7%
Cellular Handsets 4% 3% 6% 8% 6%
PSP 8% 9% 6% 5% 3%
Game Boy Advance 1% 2% - 1% 1%
----------------------------------------
Total Mobility 15% 18% 17% 20% 17%
Co-publishing and
Distribution 5% 4% 7% 10% 5%
Subscription
Services 2% 2% 4% 6% 4%
Licensing,
Advertising &
Other 1% 2% 2% 2% 2%
----------------------------------------
Total Internet
Services,
Licensing &
Other 3% 4% 6% 8% 6%
----------------------------------------
Net Revenue 100% 100% 100% 100% 100%
----------------------------------------
PLATFORM SKU RELEASE
MIX (a)
Xbox 360 7 5 4 2 8 14%
PlayStation 2 8 6 6 1 7 (13%)
Wii - 2 4 2 5 N/M
PLAYSTATION 3 - 4 3 1 7 N/M
Xbox 7 2 - - 2 (71%)
Nintendo GameCube 2 2 - - 1 (50%)
----------------------------------------
Total Consoles 24 21 17 6 30 25%
PC 6 9 6 5 7 17%
Nintendo DS 2 3 2 2 4 100%
PSP 9 5 2 1 3 (67%)
Game Boy Advance 2 3 - - 1 (50%)
----------------------------------------
Total Mobility 13 11 4 3 8 (38%)
----------------------------------------
Total SKUs 43 41 27 14 45 5%
----------------------------------------
(a) Cellular Handsets, Macintosh(R) Computers and iPod(R) are
not
included in SKU count.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Fact Sheet for Q2 Fiscal 2008
Q2 Product Releases Platform (i)
-- FIFA 08 Xbox 360(TM)
-- Madden NFL 08 Xbox 360
-- Medal of Honor Airborne(TM) Xbox 360
-- NASCAR(R) 08 Xbox 360
-- NCAA(R) Football 08 Xbox 360
-- NHL(R) 08 Xbox 360
-- SKATE Xbox 360
-- Tiger Woods PGA TOUR(R) 08 Xbox 360
-- FIFA 08 PlayStation(R)2
-- Madden NFL 08 PlayStation 2
-- NASCAR 08 PlayStation 2
-- NCAA Football 08 PlayStation 2
-- NHL 08 PlayStation 2
-- EA SPORTS(TM) Rugby 08 PlayStation 2
-- Tiger Woods PGA TOUR 08 PlayStation 2
-- Boogie(TM) Wii(TM)
-- FIFA 08 Wii
-- Madden NFL 08 Wii
-- MySims(TM) Wii
-- Tiger Woods PGA TOUR 08 Wii
-- FIFA 08 PLAYSTATION(R)3
-- Madden NFL 08 PLAYSTATION 3
-- NASCAR 08 PLAYSTATION 3
-- NCAA Football 08 PLAYSTATION 3
-- NHL 08 PLAYSTATION 3
-- SKATE PLAYSTATION 3
-- Tiger Woods PGA TOUR 08 PLAYSTATION 3
-- Madden NFL 08 Xbox(R)
-- NCAA Football 08 Xbox
-- Madden NFL 08 Nintendo GameCube(TM)
-- FIFA 08 PC
-- Madden NFL 08 PC
-- Medal of Honor Airborne PC
-- NHL 08 PC
-- EA SPORTS Rugby 08 PC
-- The Sims(TM) 2 Bon Voyage PC
-- Tiger Woods PGA TOUR 08 PC
-- Battlefield 2142(TM) Macintosh(R) Computers
-- Command & Conquer 3 Tiberium Wars(TM) Macintosh
Computers
-- Harry Potter and the Order of the Macintosh Computers
Phoenix(TM)
-- Need for Speed(TM) Carbon Macintosh Computers
-- FIFA 08 Nintendo DS(TM)
-- Madden NFL 08 Nintendo DS
-- MySims Nintendo DS
-- Tiger Woods PGA TOUR 08 Nintendo DS
-- Medal of Honor Airborne Cellular Handsets
-- Burnout(TM) Cellular Handsets
-- SKATE Cellular Handsets
-- The Simpsons(TM) Game Cellular Handsets
-- Madden NFL 08 Cellular Handsets
-- The Sims(TM) Bowling Cellular Handsets
-- Ronaldinho Total Control(TM) Cellular Handsets
-- FIFA 08 PSP(R)
-- Madden NFL 08 PSP
-- Tiger Woods PGA TOUR 08 PSP
-- Harry Potter and the Order of the Phoenix Game Boy(R)
Advance
-- The Sims(TM) Pool iPod(R)
-- The Sims Bowling iPod
Co-publishing, Distribution, and International only (ii)
-- Wing Commander(TM) Arena (iii) Xbox 360
(i) Cellular Handsets, Macintosh Computers and iPod releases are
not
included in SKU count.
(ii) Co-publishing, distribution, and international only are
not
included in SKU count.
(iii) Xbox LIVE(R) Arcade casual game
All trademarks are the property of their respective owners.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Reconciliation of GAAP to Non-GAAP Results
(in millions, except per share data)
The following tables reconcile the Company's net revenue, gross
profit, operating income (loss), net income (loss) and diluted
earnings (loss) per share as presented in its Unaudited
Condensed
Consolidated Statements of Operations as prepared in accordance
with
Generally Accepted Accounting Principles ("GAAP") with its
non-GAAP
net revenue, non-GAAP gross profit, non-GAAP operating income
(loss),
non-GAAP net income (loss), and non-GAAP diluted earnings (loss)
per
share. The Company's non-GAAP net revenue excludes the impact of
the
change in deferred net revenue (packaged goods and digital
content).
The Company's non-GAAP gross profit excludes the impact of the
change
in deferred net revenue (packaged goods and digital content),
COGS
amortization of intangibles, and stock-based compensation. The
Company's non-GAAP operating income (loss), non-GAAP net income
(loss), and non-GAAP diluted earnings (loss) per share exclude
the
impact of the change in deferred net revenue (packaged goods
and
digital content), acquired in-process technology, amortization
of
intangibles, restructuring charges, and stock-based compensation.
In
addition, the Company's non-GAAP net income (loss) and non-GAAP
diluted earnings (loss) per share exclude income tax
adjustments
consisting of the income tax expense associated with the
foregoing
excluded items and the impact of certain one-time income tax
adjustments.
Q2 Q3 Q4 Q1 Q2 YOY %
FY07 FY07 FY07 FY08 FY08 Change
------ ------- --------- --------- ------- -------
QUARTERLY
RECONCILIATION OF
RESULTS
GAAP net revenue $ 784 $1,281 $ 613 $ 395 $ 640 (18%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 296
------ ------- --------- --------- -------
Non-GAAP net
revenue (a) $ 784 $1,281 $ 613 $ 431 $ 936 19%
====== ======= ========= ========= =======
GAAP gross
profit $ 445 $ 811 $ 378 $ 229 $ 245 (45%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 296
COGS
amortization
of
intangibles 7 7 7 7 7
Stock-based
compensation 1 - 1 - 1
------ ------- --------- --------- -------
Non-GAAP gross
profit $ 453 $ 818 $ 386 $ 272 $ 549 21%
====== ======= ========= ========= =======
Non-GAAP gross
margin - % of
non-GAAP net
revenue 58% 64% 63% 63% 59%
GAAP operating
income (loss) $ 14 $ 215 $ (71) $ (183) $ (274) (2057%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 296
Acquired in-
process
technology 2 1 - - -
Amortization
of
intangibles 7 7 7 7 7
COGS
amortization
of
intangibles 7 7 7 7 7
Restructuring
charges 4 2 3 2 5
Stock-based
compensation 33 35 28 28 38
------ ------- --------- --------- -------
Non-GAAP
operating
income (loss) $ 67 $ 267 $ (26) $ (103) $ 79 18%
====== ======= ========= ========= =======
Non-GAAP
operating
income (loss)
margin - % of
non-GAAP net
revenue 9% 21% (4%) (24%) 8%
GAAP net income
(loss) $ 22 $ 160 $ (25) $ (132) $ (195) (986%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 296
Acquired in-
process
technology 2 1 - - -
Amortization
of
intangibles 7 7 7 7 7
COGS
amortization
of
intangibles 7 7 7 7 7
Restructuring
charges 4 2 3 2 5
Stock-based
compensation 33 35 28 28 38
Income tax
adjustments (10) (11) (1) (17) (71)
------ ------- --------- --------- -------
Non-GAAP net
income (loss) $ 65 $ 201 $ 19 $ (69) $ 87 34%
====== ======= ========= ========= =======
Non-GAAP net
income (loss)
margin - % of
non-GAAP net
revenue 8% 16% 3% (16%) 9%
GAAP diluted
earnings (loss)
per share $0.07 $ 0.50 ($0.08) ($0.42) $(0.62) (986%)
Non-GAAP diluted
earnings (loss)
per share $0.21 $ 0.63 $ 0.06 ($0.22) $ 0.27 29%
Shares used in
non-GAAP
diluted
earnings
(loss) per
share
computation 315 319 319 311 320
(a) Effective April 1, 2007, the Company began to exclude the
impact
of the change in deferred net revenue (packaged goods and
digital
content) in its fiscal 2008 non-GAAP financial measures.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Reconciliation of GAAP to Non-GAAP Results
(in millions, except per share data)
The following tables reconcile the Company's net revenue, gross
profit, operating income (loss), net income (loss) and diluted
earnings (loss) per share as presented in its Unaudited
Condensed
Consolidated Statements of Operations as prepared in accordance
with
Generally Accepted Accounting Principles ("GAAP") with its
non-GAAP
net revenue, non-GAAP gross profit, non-GAAP operating income,
non-
GAAP net income, and non-GAAP diluted earnings per share. The
Company's non-GAAP net revenue excludes the impact of the change
in
deferred net revenue (packaged goods and digital content). The
Company's non-GAAP gross profit excludes the impact of the change
in
deferred net revenue (packaged goods and digital content), COGS
amortization of intangibles, and stock-based compensation. The
Company's non-GAAP operating income, non-GAAP net income, and
non-
GAAP diluted earnings per share exclude the impact of the change
in
deferred net revenue (packaged goods and digital content),
acquired
in-process technology, amortization of intangibles, certain
litigation expenses, restructuring charges, and stock-based
compensation. In addition, the Company's non-GAAP net income and
non-
GAAP diluted earnings per share exclude income tax adjustments
consisting of the income tax expense associated with the
foregoing
excluded items and the impact of certain one-time income tax
adjustments.
Q2 Q3 Q4 Q1 Q2 YOY %
FY07 FY07 FY07 FY08 FY08 Change
------- ------- ------- ------- -------- ------
TRAILING TWELVE MONTH
RECONCILIATION OF
RESULTS
GAAP net revenue $3,108 $3,119 $3,091 $3,073 $ 2,929 (6%)
Change in
deferred net
revenue
(packaged goods
and digital
content) (a) 36 332
------- ------- ------- ------- --------
Non-GAAP net
revenue (a) $3,108 $3,119 $3,091 $3,109 $ 3,261 5%
======= ======= ======= ======= ========
GAAP gross profit $1,855 $1,898 $1,879 $1,863 $ 1,663 (10%)
Change in
deferred net
revenue
(packaged goods
and digital
content) (a) 36 332
COGS amortization
of intangibles 19 24 27 28 28
Stock-based
compensation 1 1 2 2 2
------- ------- ------- ------- --------
Non-GAAP gross
profit $1,875 $1,923 $1,908 $1,929 $ 2,025 8%
======= ======= ======= ======= ========
Non-GAAP gross
margin - % of
non-GAAP net
revenue 60% 62% 62% 62% 62%
GAAP operating
income (loss) $ 267 $ 135 $ 39 $ (25) $ (313) (217%)
Change in
deferred net
revenue
(packaged goods
and digital
content) (a) 36 332
Acquired in-
process
technology 9 10 3 3 1
Amortization of
intangibles 18 24 27 28 28
Certain
litigation
expenses (1) (1) - - -
COGS amortization
of intangibles 19 24 27 28 28
Restructuring
charges 36 29 15 11 12
Stock-based
compensation 72 107 133 124 129
------- ------- ------- ------- --------
Non-GAAP operating
income $ 420 $ 328 $ 244 $ 205 $ 217 (48%)
======= ======= ======= ======= ========
Non-GAAP
operating income
margin - % of
non-GAAP net
revenue 14% 11% 8% 7% 7%
GAAP net income
(loss) $ 184 $ 85 $ 76 $ 25 $ (192) (204%)
Change in
deferred net
revenue
(packaged goods
and digital
content) (a) 36 332
Acquired in-
process
technology 9 10 3 3 1
Amortization of
intangibles 18 24 27 28 28
Certain
litigation
expenses (1) (1) - - -
COGS amortization
of intangibles 19 24 27 28 28
Restructuring
charges 36 29 15 11 12
Stock-based
compensation 72 107 133 124 129
Income tax
adjustments 1 (7) (34) (39) (100)
------- ------- ------- ------- --------
Non-GAAP net income $ 338 $ 271 $ 247 $ 216 $ 238 (30%)
======= ======= ======= ======= ========
Non-GAAP net
income margin -
% of non-GAAP
net revenue 11% 9% 8% 7% 7%
GAAP diluted
earnings (loss)
per share $ 0.59 $ 0.26 $ 0.24 $ 0.07 ($0.62) (205%)
Non-GAAP diluted
earnings per share $ 1.09 $ 0.86 $ 0.78 $ 0.68 $ 0.74 (32%)
(a) Effective April 1, 2007, the Company began to exclude the
impact
of the change in deferred net revenue (packaged goods and
digital
content) in its fiscal 2008 non-GAAP financial measures.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Non-GAAP Financial Information and
Non-GAAP
Business Metrics
(in millions, except per share data)
Q2 Q3 Q4 Q1 Q2 YOY %
FY07 FY07 FY07 FY08 FY08 Change
------- ------- -------- --------- ------- ------
CONSOLIDATED NON-
GAAP FINANCIAL
DATA (b)
Non-GAAP net
revenue 784 1,281 613 431 936 19%
Non-GAAP net
revenue - TTM 3,108 3,119 3,091 3,109 3,261 5%
Non-GAAP gross
profit 453 818 386 272 549 21%
Non-GAAP gross
margin - % of
non-GAAP net
revenue 58% 64% 63% 63% 59%
Non-GAAP gross
profit - TTM 1,875 1,923 1,908 1,929 2,025 8%
Non-GAAP gross
margin - TTM %
of non-GAAP
net revenue 60% 62% 62% 62% 62%
Non-GAAP
operating income
(loss) 67 267 (26) (103) 79 18%
Non-GAAP
operating
income (loss)
margin - % of
non-GAAP net
revenue 9% 21% (4%) (24%) 8%
Non-GAAP
operating income
- TTM 420 328 244 205 217 (48%)
Non-GAAP
operating
income margin
- TTM % of
non-GAAP net
revenue 14% 11% 8% 7% 7%
Non-GAAP net
income (loss) 65 201 19 (69) 87 34%
Non-GAAP diluted
earnings (loss)
per share $ 0.21 $ 0.63 $ 0.06 ($0.22) $ 0.27 29%
Non-GAAP net
income - TTM 338 271 247 216 238 (30%)
Non-GAAP
diluted
earnings per
share - TTM $ 1.09 $ 0.86 $ 0.78 $ 0.68 $ 0.74 (32%)
GAAP GEOGRAPHIC NET
REVENUE MIX
North America 512 637 307 163 362 (29%)
International 272 644 306 232 278 2%
Europe 245 583 264 204 246 -
Asia 27 61 42 28 32 19%
------------------------------------------
Net Revenue 784 1,281 613 395 640 (18%)
CHANGE IN DEFERRED
NET REVENUE
(PACKAGED GOODS
AND DIGITAL
CONTENT)
GEOGRAPHIC MIX (a)
North America 8 163
International 28 133
Europe 21 129
Asia 7 4
------------------------------------------
Change In
Deferred Net
Revenue
(Packaged Goods
and Digital
Content) 36 296
NON-GAAP GEOGRAPHIC
NET REVENUE MIX
North America 512 637 307 171 525 3%
International 272 644 306 260 411 51%
Europe 245 583 264 225 375 53%
Asia 27 61 42 35 36 33%
------------------------------------------
Non-GAAP Net
Revenue 784 1,281 613 431 936 19%
NON-GAAP GEOGRAPHIC
NET REVENUE MIX -
as a % of Non-GAAP
Net Revenue
North America 65% 50% 50% 40% 56%
International 35% 50% 50% 60% 44%
Europe 31% 45% 43% 52% 40%
Asia 4% 5% 7% 8% 4%
------------------------------------------
Non-GAAP Net
Revenue 100% 100% 100% 100% 100%
(a) Effective April 1, 2007, the Company began to exclude the
impact
of the change in deferred net revenue (packaged goods and
digital
content) in its fiscal 2008 non-GAAP financial measures.
(b) Refer to Unaudited Reconciliation of GAAP to Non-GAAP
Results.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Non-GAAP Financial Information and
Non-GAAP
Business Metrics
(in millions)
Q2 Q3 Q4 Q1 Q2 YOY %
FY07 FY07 FY07 FY08 FY08 Change
----- ------- ----- ----- ------ ------
PLATFORM NON-GAAP NET REVENUE
MIX
Xbox 360 166 172 82 47 218 31%
PlayStation 2 269 400 117 69 204 (24%)
PLAYSTATION 3 - 41 52 20 98 N/M
Wii - 29 36 29 83 N/M
Xbox 65 62 7 3 12 (82%)
Nintendo GameCube 14 32 4 1 3 (79%)
--------------------------------
Total Consoles 514 736 298 169 618 20%
PC 86 218 128 96 116 35%
Nintendo DS 14 55 27 25 47 236%
PSP 64 118 39 30 43 (33%)
Cellular Handsets 35 35 36 34 37 6%
Game Boy Advance 8 21 3 2 4 (50%)
--------------------------------
Total Mobility 121 229 105 91 131 8%
Co-publishing and
Distribution 39 49 45 39 32 (18%)
Subscription Services 15 24 24 23 23 53%
Licensing, Advertising &
Other 9 25 13 13 16 78%
--------------------------------
Total Internet Services,
Licensing & Other 24 49 37 36 39 63%
--------------------------------
Non-GAAP Net Revenue 784 1,281 613 431 936 19%
--------------------------------
Change in Deferred Net
Revenue (Packaged Goods
and Digital Content) (a)
PlayStation 2 (8) (131)
PLAYSTATION 3 (7) (81)
Wii - (24)
PC (7) (37)
PSP (9) (22)
Cellular Handsets (1) -
Co-publishing and
Distribution - 1
Licensing, Advertising &
Other (4) (2)
--------------------------------
Change in Deferred Net
Revenue (Packaged Goods
and Digital Content) (a) (36) (296)
--------------------------------
GAAP Net Revenue 395 640
--------------------------------
PLATFORM NON-GAAP NET REVENUE
MIX - as a % of Non-GAAP Net
Revenue
Xbox 360 21% 13% 13% 11% 23%
PlayStation 2 35% 31% 19% 16% 22%
PLAYSTATION 3 - 3% 9% 5% 11%
Wii - 2% 6% 7% 9%
Xbox 8% 5% 1% 1% 1%
Nintendo GameCube 2% 3% 1% - -
--------------------------------
Total Consoles 66% 57% 49% 40% 66%
PC 11% 17% 21% 22% 12%
Nintendo DS 2% 4% 5% 6% 5%
PSP 8% 9% 6% 7% 5%
Cellular Handsets 4% 3% 6% 8% 4%
Game Boy Advance 1% 2% - - -
--------------------------------
Total Mobility 15% 18% 17% 21% 14%
Co-publishing and
Distribution 5% 4% 7% 9% 4%
Subscription Services 2% 2% 4% 5% 2%
Licensing, Advertising &
Other 1% 2% 2% 3% 2%
--------------------------------
Total Internet Services,
Licensing & Other 3% 4% 6% 8% 4%
--------------------------------
Non-GAAP Net Revenue 100% 100% 100% 100% 100%
--------------------------------
(a) Effective April 1, 2007, the Company began to exclude the
impact
of the change in deferred net revenue (packaged goods and
digital
content) in its fiscal 2008 non-GAAP financial measures.
CONTACT: Electronic Arts Inc.
Tricia Gugler, 650-628-7327
Director, Investor Relations
Jeff Brown, 650-628-7922
Vice President, Corporate Communications
SOURCE: Electronic Arts Inc.