Electronic Arts Reports Q4 FY12 and FY12 Financial Results

All-Time High Non-GAAP Net Revenue of $4.2 Billion in Fiscal 12

Annual Digital Non-GAAP Revenue — Up 47% to $1.2 Billion

Digital Revenue Driving Margin Expansion

Mass Effect 3 Sales Exceed $200 Million at Retail

FIFA 12 Non-GAAP Digital Revenue Tops $100 Million

Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its fourth fiscal quarter and fiscal year ended March 31, 2012.

"We are proud to report a strong quarter and a fiscal year highlighted with $1.2 billion of digital revenue," said Chief Executive Officer John Riccitiello. "In the coming year, we break away from the pack, with a very different profile than the traditional game companies and capabilities that none of our new digital competitors can match."

"Digital growth drove our margins in fiscal 12 and we project this trend will continue in fiscal 13," said Interim Chief Financial Officer Ken Barker. "We saw more than 20 percent non-GAAP diluted EPS growth in fiscal 12, and are guiding to more than 30 percent growth in fiscal 13 based on the midpoint of our guidance."

Selected Operating Highlights and Metrics:

*On a non-GAAP basis

• Strong results driven by the successful launches of Mass Effect™ 3, FIFA Street 4, SSX™ and Kingdoms of Amalur: Reckoning™.
• FIFA 12 established the best year in franchise history - with downloads and micro-transactions totaling $108 million*. FIFA Ultimate Team — a pure digital companion to recent FIFA titles was the second best-selling EA offering in the UK in fiscal 12.
• Battlefield 3™ had a record year, establishing itself as one of EA's premier game services and in the process successfully took share in the growing First-Person-Shooter market.
• Battlefield 3 players are still deeply engaged — 6.3 million MAUs in March. New content downloads available in May and June.
• Q4 full-game downloads were up 76 percent* year-over-year, contributing $60 million* in the quarter, driven in part by Mass Effect 3 and STAR WARS®: The Old Republic™.
• STAR WARS®: The Old Republic™ active subscribers are 1.3 million. Two new content packs — Legacy and Allies, available in Q1.
• EA's Play4Free brands are generating an average of nearly $2 million* per week. Several more EA brands will be introduced in the Play4Free portal in fiscal 13.
• EA shattered its goal for digital revenue growth — generating more than $1.2 billion* in fiscal 12 for a 47 percent year-over-year growth, and driving operating margin to 10%. Another 40 percent increase in digital non-GAAP revenue and continued operating margin expansion is forecasted for fiscal 13.
• EA's Origin™ platform for games and services has registered 11 million players and generated approximately $150 million* in just ten months. EA's Nucleus database has registered 220 million consumers.
• Casual game leader PopCap™ — acquired by EA in August — is growing on mobile and social platforms with new games like Solitaire Blitz™ and Lucky Gem Casino™. A new version of Bejeweled™ is EA's top grossing game on the Apple® App Store^SM.
• EA repurchased 27.7 million shares for $529 million through March 31, 2012, and as of the call, the $600 million share repurchase program has been completed.
• In fiscal 13, EA will invest $80 million in development of games for Gen4 console systems.

Q4 and Full-Year FY12 Financial Highlights:

For the quarter, non-GAAP net revenue of $977 million was slightly ahead of our guidance of $925 million to $975 million. Non-GAAP diluted earnings per share of $0.17 was in line with our guidance of $0.10 to $0.20. Non-GAAP net revenue in Q4 fiscal 2012 was slightly lower as compared to Q4 fiscal 2011 due to a reduction in the number of package goods titles in the quarter.

(in millions of $ except per share amounts)		Quarter Ended 3/31/12				Quarter Ended 3/31/11
Net Digital Revenue		$419				$211
Net Publishing Packaged Goods and Other Revenue		926				838
Net Distribution Packaged Goods Revenue		23				41
GAAP Total Net Revenue		1,368				1,090
Non-GAAP Net Digital Revenue		$425				$268
Non-GAAP Net Publishing Packaged Goods and Other Revenue		529				686
Non-GAAP Net Distribution Packaged Goods Revenue		23				41
Non-GAAP Total Net Revenue		977				995
GAAP Net Income		400				151
Non-GAAP Net Income		56				83
GAAP Diluted Earnings Per Share		1.20				0.45
Non-GAAP Diluted Earnings Per Share		0.17				0.25
Cash Flow from Operations		287				253

Trailing Twelve Month (TTM) Financial Highlights:
(in millions of $ except per share data)			TTM Ended 3/31/12				TTM Ended 3/31/11
GAAP Net Revenue			$4,143				$3,589
GAAP Net Income (Loss)			76				(276)
GAAP Diluted Earnings (Loss) Per Share			0.23				(0.84)
Non-GAAP Net Revenue			4,186				3,828
Non-GAAP Net Income			284				233
Non-GAAP Diluted Earnings Per Share			0.85				0.70
Cash Flow from Operations			277				320
Q4 FY12 Digital Metrics:
(in millions)			Quarter Ended 3/31/12				Quarter Ended 3/31/11
GAAP Net Mobile Revenue Non-GAAP Net Mobile Revenue			$87 $84				$70 $67
Monthly Active Users (MAU) in Social Games			49				36
Core Registered Users			220				112

Business Outlook as of May 7, 2012

The following forward-looking statements, as well as those made above, reflect expectations as of May 7, 2012. Electronic Arts assumes no obligation to update these statements. Results may be materially different and are affected by many factors, including: product development delays; competition in the industry; the health of the economy in the U.S. and abroad and the related impact on discretionary consumer spending; changes in anticipated costs; the financial impact of acquisitions by EA; the popular appeal of EA's products; EA's effective tax rate; and other factors detailed in this release and in EA's annual and quarterly SEC filings.

Fiscal Year 2013 Expectations — Ending March 31, 2013

• GAAP net revenue is expected to be approximately $4.075 billion.
• Non-GAAP net revenue is expected to be approximately $4.300 billion.
• GAAP loss per share is expected to be approximately ($0.36) to ($0.16).
• Non-GAAP diluted earnings per share is expected to be approximately $1.05 to $1.20.
• For purposes of calculating fiscal year 2013 diluted earnings per share, the Company estimates a share count of 327 million, and 321 million shares for calculating loss per share.
• Expected non-GAAP net income excludes the following from expected GAAP net loss:
  • Non-GAAP net revenue is expected to be approximately $225 million higher than GAAP net revenue due to the impact of the change in deferred net revenue (packaged goods and digital content);
  • Approximately $175 million of estimated stock-based compensation;
  • Approximately $80 million of acquisition-related expenses;
  • Approximately $45 million of restructuring charges;
  • Approximately $20 million from the amortization of debt discount; and
  • Non-GAAP tax expense is expected to be $84 million to $102 million higher than GAAP tax expense.

First Quarter Fiscal Year 2013 Expectations — Ending June 30, 2012

• GAAP net revenue is expected to be approximately $950 million.
• Non-GAAP net revenue is expected to be approximately $500 million.
• GAAP diluted earnings per share is expected to be approximately $0.40 to $0.48.
• Non-GAAP loss per share is expected to be approximately ($0.45) to ($0.40).
• For purposes of calculating first quarter fiscal year 2013 diluted earnings per share, the Company estimates a share count of 322 million, and 318 million shares for calculating loss per share.
• Expected non-GAAP net loss excludes the following from expected GAAP net income:
  • Non-GAAP net revenue is expected to be approximately $450 million lower than GAAP net revenue due to the impact of the change in deferred net revenue (packaged goods and digital content);
  • Approximately $45 million of estimated stock-based compensation;
  • Approximately $20 million of acquisition-related expenses;
  • Approximately $40 million of restructuring charges;
  • Approximately $5 million from the amortization of debt discount; and
  • Non-GAAP tax expense is expected to be $60 million to $66 million lower than GAAP tax expense.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on May 7, 2012 at 2:00 pm PT (5:00 pm ET) to review its results for the fourth quarter ended March 31, 2012 and its outlook for the future. During the course of the call, Electronic Arts may disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number: 773-799-3213 (domestic) or 888-677-1083 (international), using the password "EA" or via webcast at http://ir.ea.com.

EA will also post a slide presentation that accompanies the call at http://ir.ea.com.

A dial-in replay of the conference call will be provided until May 15, 2012 at the following number: 203-369-0099 (domestic) or 866-356-3373 (international). A webcast replay of the conference call will be available for one year at http://ir.ea.com.

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, as applicable in a given reporting period, from the Company's unaudited condensed consolidated statements of operations:

• Acquisition-related expenses
• Amortization of debt discount
• Certain non-recurring litigation expenses
• Change in deferred net revenue (packaged goods and digital content)
• Gain (loss) on strategic investments
• Loss on licensed intellectual property commitment
• Restructuring charges
• Stock-based compensation
• 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:

Acquisition-Related Expenses. GAAP requires expenses to be recognized for various types of events associated with a business acquisition. These events include, expensing acquired intangible assets, including acquired in-process technology, post-closing adjustments associated with changes in the estimated amount of contingent consideration to be paid in an acquisition, and the impairment of accounting goodwill created as a result of an acquisition when future events indicated there has been a decline in its value. 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 including the final amounts paid for contingent consideration) without taking into consideration any allocations made for accounting purposes. Because the final purchase price paid for an acquisition necessarily reflects the accounting value assigned to both contingent consideration and to the intangible assets (including goodwill), when analyzing the operating performance of an acquisition in subsequent periods, the Company's management excludes the GAAP impact of any adjustments to the fair value of these acquisition-related balances to its financial results.

Amortization of Debt Discount on the Convertible Senior Notes. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. Accordingly, for GAAP purposes, we are required to amortize as a debt discount an amount equal to the fair value of the conversion option as interest expense on the Company's $632.5 million of 0.75% convertible senior notes that were issued in a private placement in July 2011 over the term of the notes. Electronic Arts' management will exclude the effect of this amortization when evaluating the Company's operating performance and the performance of its management team during this period and will continue to do so, when it plans, forecasts and analyzes future periods.

Certain non-recurring litigation expenses. During the fourth quarter of fiscal 2012, Electronic Arts recognized a $27 million expense related to a potential settlement of an on-going litigation matter. This significant non-recurring litigation expense is excluded from our non-GAAP financial measures in order to provide comparability between periods. Further, the Company excluded this expense when evaluating its operating performance and the performance of its management team during this period and will continue to do so when it plans, forecasts and analyzes future periods.

Change in Deferred Net Revenue (Packaged Goods and Digital Content). Electronic Arts is not able to objectively determine the fair value of the online service included in certain of its packaged goods and digital content. As a result, the Company recognizes the revenue from the sale of these games and content over the estimated online service period. In other transactions, at the date we sell the software product we have an obligation to provide incremental unspecified digital content in the future without an additional fee. In these cases, we account for the sale of the software product as a multiple element arrangement and recognize the revenue on a straight-line basis over the estimated period of game play. 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 (1) 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 and (2) understanding our operations because all related costs are expensed as incurred instead of deferred and recognized ratably.

Gain (loss) on Strategic Investments. From time to time, the Company makes strategic investments. Electronic Arts' management excludes the impact of any gains (losses) on such investments when evaluating the Company's operating performance, when planning, forecasting and analyzing future periods, and when assessing the performance of its management team. In addition, the Company believes that excluding the impact of such gains (losses) on these investments from its operating results is important to facilitate comparisons to prior periods.

Loss on Licensed Intellectual Property Commitment. During the fourth quarter of fiscal 2009, Electronic Arts amended an agreement with a content licensor. This amendment resulted in the termination of our rights to use the licensor's intellectual property in certain products and we incurred a related estimated loss of $38 million. This significant non-recurring loss is excluded from our non-GAAP financial measures in order to provide comparability between periods. Further, the Company excluded this loss when evaluating its operating performance and the performance of its management team during this period and will continue to do so when it plans, forecasts and analyzes future periods.

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. As such, the Company believes it is appropriate to exclude restructuring charges from its non-GAAP financial measures.

Stock-Based Compensation. 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.

Income Tax Adjustments. The Company uses a fixed, long-term projected tax rate of 28 percent internally to evaluate its operating performance, to forecast, plan and analyze future periods, and to assess the performance of its management team. Accordingly, the Company has applied the same 28 percent tax rate to its non-GAAP financial results.

In the financial tables below, Electronic Arts has provided a reconciliation of the most comparable GAAP financial measure to the historical non-GAAP financial measures used in this press release.

Forward-Looking Statements

Some statements set forth in this release, including the information relating to EA's fiscal 2013 guidance information under the heading "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 preliminary estimates and expectations based on current information and are subject to business and economic 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: sales of the Company's titles; the Company's ability to manage expenses; the competition in the interactive entertainment industry; the effectiveness of the Company's sales and marketing programs; timely development and release of Electronic Arts' products; the Company's ability to realize the anticipated benefits of acquisitions, including the PopCap acquisition; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company's ability to predict consumer preferences among competing platforms; the Company's ability to service and support digital product offerings, including managing online security; general economic conditions; and other factors described in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2011.

These forward-looking statements are current as of May 7, 2012. Electronic Arts assumes no obligation and does not intend to update these forward-looking statements. In addition, the preliminary 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 Annual Report on Form 10-K for the fiscal year ended March 31, 2012. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the fiscal year ended March 31, 2012.

About Electronic Arts

Electronic Arts (NASDAQ:EA) is a global leader in digital interactive entertainment. The Company's game franchises are offered as both packaged goods products and online services delivered through Internet-connected consoles, personal computers, mobile phones and tablets. EA has more than 100 million registered players and operates in 75 countries. In fiscal year 2012, EA posted GAAP net revenue of $4.1 billion. Headquartered in Redwood City, California, EA is recognized for critically acclaimed, high-quality blockbuster franchises such as The Sims™, Madden NFL, FIFA Soccer, Need for Speed™, Battlefield™, and Mass Effect™. More information about EA is available at http://info.ea.com.

For additional information, please contact:

Rob Sison							Jeff Brown
Vice President, Investor Relations							Senior Vice President, Corporate Communications
650-628-7787							650-628-7922
rsison@ea.com							jbrown@ea.com

Origin, SSX, PopCap, Lucky Gem Casino, Bejeweled, Solitaire Blitz, The Sims and Need for Speed are trademarks of Electronic Arts Inc. Mass Effect is a trademark of EA International (Studio and Publishing) Ltd. Battlefield 3 and Battlefield are trademarks of EA Digital Illusions CE AB. LucasArts, the LucasArts logo, and STAR WARS are registered trademarks of Lucasfilm Ltd. © 2011 Lucasfilm Entertainment Company Ltd. or Lucasfilm Ltd. & ® or TM as indicated. All rights reserved. John Madden, NFL and FIFA are the property of their respective owners and used with permission. Apple is a trademark and App Store is a service mark of Apple Inc. All other trademarks are the property of their respective owners.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in millions, except per share data)
			Three Months Ended										Twelve Months Ended
			March 31,										March 31,
			2012					2011					2012					2011
Net revenue			$	1,368				$	1,090				$	4,143				$	3,589
Cost of goods sold				374					328					1,598					1,499
Gross profit				994					762					2,545					2,090
Operating expenses:
Marketing and sales				222					194					853					747
General and administrative				115					75					375					301
Research and development				284					328					1,212					1,153
Acquisition-related contingent consideration				3					8					11					(17	)
Amortization of intangibles				6					13					43					57
Restructuring and other				(1	)				(1	)				16					161
Total operating expenses				629					617					2,510					2,402
Operating income (loss)				365					145					35					(312	)
Gain on strategic investments, net				-					-					-					23
Interest and other income (expense), net				(4	)				4					(17	)				10
Income (loss) before benefit from income taxes				361					149					18					(279	)
Benefit from income taxes				(39	)				(2	)				(58	)				(3	)
Net income (loss)			$	400				$	151				$	76				$	(276	)
Earnings (loss) per share
Basic			$	1.22				$	0.45				$	0.23				$	(0.84	)
Diluted			$	1.20				$	0.45				$	0.23				$	(0.84	)
Number of shares used in computation
Basic				329					333					331					330
Diluted				332					336					336					330
Non-GAAP Results (in millions, except per share data)
The following tables reconcile the Company's net income (loss) and earnings (loss) per share as presented in its Unaudited Condensed Consolidated Statements of Operations and prepared in accordance with Generally Accepted Accounting Principles ("GAAP") to its non-GAAP net income and non-GAAP earnings per share.
			Three Months Ended										Twelve Months Ended
			March 31,										March 31,
			2012					2011					2012					2011
Net income (loss)			$	400				$	151				$	76				$	(276	)
Acquisition-related expenses				36					24					106					52
Amortization of debt discount				5					-					14					-
Certain non-recurring litigation expenses				27					-					27					-
Change in deferred net revenue (packaged goods and digital content)				(391	)				(95	)				43					239
Gain on strategic investments, net				-					-					-					(23	)
Loss on licensed intellectual property commitment (COGS)				-					-					-					(1	)
Restructuring and other				(1	)				(1	)				16					161
Stock-based compensation				41					38					170					174
Income tax adjustments				(61	)				(34	)				(168	)				(93	)
Non-GAAP net income			$	56				$	83				$	284				$	233
Non-GAAP earnings per share
Basic			$	0.17				$	0.25				$	0.86				$	0.71
Diluted			$	0.17				$	0.25				$	0.85				$	0.70
Number of shares used in Non-GAAP computation
Basic				329					333					331					330
Diluted				332					336					336					334

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in millions)
			March 31,					March 31,
			2012					2011 (a)
ASSETS
Current assets:
Cash and cash equivalents			$	1,293				$	1,579
Short-term investments				437					497
Marketable equity securities				119					161
Receivables, net of allowances of $252 and $304, respectively				366					335
Inventories				59					77
Deferred income taxes, net				67					56
Other current assets				268					327
Total current assets				2,609					3,032
Property and equipment, net				568					513
Goodwill				1,718					1,110
Acquisition-related intangibles, net				369					144
Deferred income taxes, net				42					49
Other assets				185					80
TOTAL ASSETS			$	5,491				$	4,928
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable			$	215				$	228
Accrued and other current liabilities				857					768
Deferred net revenue (packaged goods and digital content)				1,048					1,005
Total current liabilities				2,120					2,001
0.75% convertible senior notes due 2016, net				539					-
Income tax obligations				189					192
Deferred income taxes, net				8					37
Other liabilities				177					134
Total liabilities				3,033					2,364
Common stock				3					3
Paid-in capital				2,359					2,495
Accumulated deficit				(77	)				(153	)
Accumulated other comprehensive income				173					219
Total stockholders' equity				2,458					2,564
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	5,491				$	4,928
(a) Derived from audited consolidated financial statements.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in millions)
			Three Months Ended										Twelve Months Ended
			March 31,										March 31,
			2012					2011					2012					2011
OPERATING ACTIVITIES
Net income (loss)			$	400				$	151				$	76				$	(276	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Acquisition-related contingent consideration				3					8					11					(17	)
Depreciation, amortization and accretion, net				68					42					216					180
Net gains on investments and sale of property and equipment				-					(1	)				(12	)				(25	)
Other non-cash restructuring charges				(3	)				-					(6	)				1
Stock-based compensation				41					38					170					176
Change in assets and liabilities:
Receivables, net				162					58					(14	)				(122	)
Inventories				10					29					21					25
Other assets				(20	)				14					(101	)				5
Accounts payable				100					55					(50	)				114
Accrued and other liabilities				(37	)				(38	)				13					(4	)
Deferred income taxes, net				(46	)				(8	)				(90	)				24
Deferred net revenue (packaged goods and digital content)				(391	)				(95	)				43					239
Net cash provided by operating activities				287					253					277					320
INVESTING ACTIVITIES
Capital expenditures				(44	)				(21	)				(172	)				(59	)
Proceeds from sale of property				-					-					26					-
Proceeds from sale of marketable equity securities				-					-					-					132
Proceeds from maturities and sales of short-term investments				63					160					526					442
Purchase of short-term investments				(94	)				(147	)				(468	)				(514	)
Acquisition-related restricted cash				75					-					75					-
Acquisition of subsidiaries, net of cash acquired				-					-					(676	)				(16	)
Net cash used in investing activities				-					(8	)				(689	)				(15	)
FINANCING ACTIVITIES
Proceeds from borrowings on convertible senior notes, net of issuance costs				-					-					617					-
Proceeds from issuance of warrants				-					-					65					-
Purchase of convertible note hedge				-					-					(107	)				-
Proceeds from issuance of common stock				18					17					57					34
Excess tax benefit from stock-based compensation				-					1					4					1
Repurchase and retirement of common stock				(241	)				(58	)				(471	)				(58	)
Acquisition-related contingent consideration payment				(25	)				-					(25	)				-
Net cash provided by (used in) financing activities				(248	)				(40	)				140					(23	)
Effect of foreign exchange on cash and cash equivalents				12					21					(14	)				24
Increase (decrease) in cash and cash equivalents				51					226					(286	)				306
Beginning cash and cash equivalents				1,242					1,353					1,579					1,273
Ending cash and cash equivalents			$	1,293				$	1,579				$	1,293				$	1,579

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in millions, except per share data, SKU count and headcount)
			Q4					Q1					Q2					Q3					Q4					YOY %
			FY11					FY12					FY12					FY12					FY12					Change
QUARTERLY RECONCILIATION OF RESULTS
Net Revenue
GAAP net revenue			$	1,090				$	999				$	715				$	1,061				$	1,368				26	%
Change in deferred net revenue (packaged goods and digital content)				(95	)				(475	)				319					590					(391	)
Non-GAAP net revenue			$	995				$	524				$	1,034				$	1,651				$	977				(2	%)
Gross Profit
GAAP gross profit			$	762				$	759				$	283				$	509				$	994				30	%
Acquisition-related expenses				3					3					8					14					27
Change in deferred net revenue (packaged goods and digital content)				(95	)				(475	)				319					590					(391	)
Stock-based compensation				-					1					-					-					1
Non-GAAP gross profit			$	670				$	288				$	610				$	1,113				$	631				(6	%)
GAAP gross profit % (as a % of GAAP net revenue)				70	%				76	%				40	%				48	%				73	%
Non-GAAP gross profit % (as a % of non-GAAP net revenue)				67	%				55	%				59	%				67	%				65	%
Operating Income (Loss)
GAAP operating income (loss)			$	145				$	227				$	(374	)			$	(183	)			$	365				152	%
Acquisition-related expenses				24					18					38					14					36
Certain non-recurring litigation expenses				-					-					-					-					27
Change in deferred net revenue (packaged goods and digital content)				(95	)				(475	)				319					590					(391	)
Restructuring and other				(1	)				18					(1	)				-					(1	)
Stock-based compensation				38					38					43					48					41
Non-GAAP operating income (loss)			$	111				$	(174	)			$	25				$	469				$	77				(31	%)
GAAP operating income (loss) % (as a % of GAAP net revenue)				13	%				23	%				(52	%)				(17	%)				27	%
Non-GAAP operating income (loss) % (as a % of non-GAAP net revenue)				11	%				(33	%)				2	%				28	%				8	%
Net Income (Loss)
GAAP net income (loss)			$	151				$	221				$	(340	)			$	(205	)			$	400				165	%
Acquisition-related expenses				24					18					38					14					36
Amortization of debt discount				-					-					4					5					5
Certain non-recurring litigation expenses				-					-					-					-					27
Change in deferred net revenue (packaged goods and digital content)				(95	)				(475	)				319					590					(391	)
Restructuring and other				(1	)				18					(1	)				-					(1	)
Stock-based compensation				38					38					43					48					41
Income tax adjustments				(34	)				57					(46	)				(118	)				(61	)
Non-GAAP net income (loss)			$	83				$	(123	)			$	17				$	334				$	56				(33	%)
GAAP net income (loss) % (as a % of GAAP net revenue)				14	%				22	%				(48	%)				(19	%)				29	%
Non-GAAP net income (loss) % (as a % of non-GAAP net revenue)				8	%				(23	%)				2	%				20	%				6	%
Diluted Earnings (Loss) Per Share
GAAP earnings (loss) per share			$	0.45				$	0.66				$	(1.03	)			$	(0.62	)			$	1.20				167	%
Non-GAAP earnings (loss) per share			$	0.25				$	(0.37	)			$	0.05				$	0.99				$	0.17				(32	%)
Number of diluted shares used in computation
GAAP				336					337					331					332					332
Non-GAAP				336					331					337					338					332

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in millions, except per share data, SKU count and headcount)
			Q4				Q1				Q2				Q3				Q4				YOY %
			FY11				FY12				FY12				FY12				FY12				Change
QUARTERLY NET REVENUE PRESENTATIONS - GAAP AND NON-GAAP
Geography Net Revenue
North America			530				501				337				500				653				23	%
Europe			507				438				328				505				627				24	%
Asia			53				60				50				56				88				66	%
Total GAAP Net Revenue			1,090				999				715				1,061				1,368				26	%
North America			(56	)			(240	)			144				310				(188	)
Europe			(45	)			(215	)			174				235				(187	)
Asia			6				(20	)			1				45				(16	)
Change In Deferred Net Revenue (Packaged Goods and Digital Content)			(95	)			(475	)			319				590				(391	)
North America			474				261				481				810				465				(2	%)
Europe			462				223				502				740				440				(5	%)
Asia			59				40				51				101				72				22	%
Total Non-GAAP Net Revenue			995				524				1,034				1,651				977				(2	%)
North America			49	%			50	%			47	%			47	%			48	%
Europe			46	%			44	%			46	%			48	%			46	%
Asia			5	%			6	%			7	%			5	%			6	%
Total GAAP Net Revenue %			100	%			100	%			100	%			100	%			100	%
North America			48	%			50	%			46	%			49	%			48	%
Europe			46	%			42	%			49	%			45	%			45	%
Asia			6	%			8	%			5	%			6	%			7	%
Total Non-GAAP Net Revenue %			100	%			100	%			100	%			100	%			100	%
Net Revenue Composition
Publishing and Other			838				647				450				738				926				11	%
Wireless, Internet-derived, and Advertising (Digital)			211				232				234				274				419				99	%
Distribution			41				120				31				49				23				(44	%)
Total GAAP Net Revenue			1,090				999				715				1,061				1,368				26	%
Publishing and Other			(152	)			(452	)			337				487				(397	)
Wireless, Internet-derived, and Advertising (Digital)			57				(23	)			(18	)			103				6
Change In Deferred Net Revenue (Packaged Goods and Digital Content)			(95	)			(475	)			319				590				(391	)
Publishing and Other			686				195				787				1,225				529				(23	%)
Wireless, Internet-derived, and Advertising (Digital)			268				209				216				377				425				59	%
Distribution			41				120				31				49				23				(44	%)
Total Non-GAAP Net Revenue			995				524				1,034				1,651				977				(2	%)
Publishing and Other			77	%			65	%			63	%			69	%			68	%
Wireless, Internet-derived, and Advertising (Digital)			19	%			23	%			33	%			26	%			30	%
Distribution			4	%			12	%			4	%			5	%			2	%
Total GAAP Net Revenue %			100	%			100	%			100	%			100	%			100	%
Publishing and Other			69	%			37	%			76	%			74	%			54	%
Wireless, Internet-derived, and Advertising (Digital)			27	%			40	%			21	%			23	%			44	%
Distribution			4	%			23	%			3	%			3	%			2	%
Total Non-GAAP Net Revenue %			100	%			100	%			100	%			100	%			100	%

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in millions, except per share data, SKU count and headcount)
			Q4				Q1				Q2				Q3				Q4				YOY %
			FY11				FY12				FY12				FY12				FY12				Change
QUARTERLY NET REVENUE PRESENTATIONS - GAAP AND NON-GAAP
Platform Net Revenue
Xbox 360			336				345				213				331				454				35	%
PLAYSTATION 3			357				308				169				314				432				21	%
Wii			71				42				35				49				20				(72	%)
PlayStation 2			4				3				15				7				3				(25	%)
Total Consoles			768				698				432				701				909				18	%
Mobile			70				57				55				70				87				24	%
PlayStation Handhelds			16				11				17				14				6				(63	%)
Nintendo Handhelds			28				8				7				15				5				(82	%)
Total Mobile and Handhelds			114				76				79				99				98				(14	%)
PC			171				205				178				214				334				95	%
Other			37				20				26				47				27				(27	%)
Total GAAP Net Revenue			1,090				999				715				1,061				1,368				26	%
Xbox 360			(12	)			(193	)			140				174				(128	)
PLAYSTATION 3			(75	)			(197	)			205				179				(210	)
Wii			(44	)			(26	)			(1	)			3				(7	)
Mobile			(3	)			-				-				13				(3	)
PlayStation Handhelds			(6	)			(6	)			-				(2	)			10
Nintendo Handhelds			(6	)			(2	)			-				9				(5	)
PC			51				(51	)			(25	)			214				(48	)
Change in Deferred Net Revenue (Packaged Goods and Digital Content)			(95	)			(475	)			319				590				(391	)
Xbox 360			324				152				353				505				326				1	%
PLAYSTATION 3			282				111				374				493				222				(21	%)
Wii			27				16				34				52				13				(52	%)
PlayStation 2			4				3				15				7				3				(25	%)
Total Consoles			637				282				776				1,057				564				(11	%)
Mobile			67				57				55				83				84				25	%
PlayStation Handhelds			10				5				17				12				16				60	%
Nintendo Handhelds			22				6				7				24				-				(100	%)
Total Mobile and Handhelds			99				68				79				119				100				1	%
PC			222				154				153				428				286				29	%
Other			37				20				26				47				27				(27	%)
Total Non-GAAP Net Revenue			995				524				1,034				1,651				977				(2	%)
Xbox 360			31	%			35	%			30	%			31	%			33	%
PLAYSTATION 3			33	%			31	%			23	%			29	%			32	%
Wii			6	%			4	%			5	%			5	%			1	%
PlayStation 2			-				-				2	%			1	%			-
Total Consoles			70	%			70	%			60	%			66	%			66	%
Mobile			6	%			6	%			8	%			7	%			6	%
PlayStation Handhelds			1	%			1	%			2	%			1	%			1	%
Nintendo Handhelds			3	%			1	%			1	%			1	%			-
Total Mobile and Handhelds			10	%			8	%			11	%			9	%			7	%
PC			16	%			20	%			25	%			20	%			25	%
Other			4	%			2	%			4	%			5	%			2	%
Total GAAP Net Revenue %			100	%			100	%			100	%			100	%			100	%
Xbox 360			33	%			29	%			34	%			31	%			34	%
PLAYSTATION 3			28	%			21	%			36	%			30	%			23	%
Wii			3	%			3	%			4	%			3	%			1	%
PlayStation 2			-				1	%			1	%			-				-
Total Consoles			64	%			54	%			75	%			64	%			58	%
Mobile			7	%			11	%			5	%			5	%			8	%
PlayStation Handhelds			1	%			1	%			2	%			1	%			2	%
Nintendo Handhelds			2	%			1	%			1	%			1	%			-
Total Mobile and Handhelds			10	%			13	%			8	%			7	%			10	%
PC			22	%			29	%			15	%			26	%			29	%
Other			4	%			4	%			2	%			3	%			3	%
Total Non-GAAP Net Revenue %			100	%			100	%			100	%			100	%			100	%

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in millions, except per share data, SKU count and headcount)
			Q4				Q1				Q2				Q3			Q4				YOY %
			FY11				FY12				FY12				FY12			FY12				Change
CASH FLOW DATA
Operating cash flow			253				(274	)			(211	)			475			287				13	%
Operating cash flow - TTM			320				194				117				243			277				(13	%)
Capital expenditures			21				32				52				44			44				110	%
Capital expenditures - TTM			59				80				120				149			172				192	%
BALANCE SHEET DATA
Cash and cash equivalents			1,579				1,173				930				1,242			1,293				(18	%)
Short-term investments			497				503				355				406			437				(12	%)
Marketable equity securities			161				172				214				143			119				(26	%)
Receivables, net			335				30				562				526			366				9	%
Inventories			77				75				90				69			59				(23	%)
Deferred net revenue (packaged goods and digital content)
End of the quarter			1,005				530				849				1,439			1,048
Less: Beginning of the quarter			1,100				1,005				530				849			1,439
Change in deferred net revenue (packaged goods and digital content)			(95	)			(475	)			319				590			(391	)
STOCK-BASED COMPENSATION
Cost of goods sold			-				1				-				-			1
Marketing and sales			5				5				6				7			8
General and administrative			8				9				9				11			7
Research and development			25				23				28				30			25
Total Stock-Based Compensation			38				38				43				48			41
EMPLOYEES			7,645				7,973				8,687				9,043			9,158				20	%

 

Electronic Arts Inc.
Rob Sison, 650-628-7787
Vice President, Investor Relations
rsison@ea.com
Jeff Brown, 650-628-7922
Senior Vice President, Corporate Communications
jbrown@ea.com

 

Source: Electronic Arts Inc.

 

 

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