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REDWOOD CITY, Calif.--(BUSINESS WIRE)--Jan. 31, 2008--Electronic Arts (NASDAQ:ERTS) today announced preliminary financial results for its fiscal third quarter ended December 31, 2007.
Fiscal Third Quarter Results (comparisons are to the quarter ended December 31, 2006)
Net revenue for the third quarter was $1.503 billion, up 17 percent as compared with $1.281 billion 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 $231 million sequential net increase in deferred net revenue as of December 31, 2007, which will be recognized in future periods.
Sales were driven by Need for Speed™ Pro Street, FIFA 08, Rock Band™, The Simpsons™ Game, Madden NFL 08, The Sims™ 2 Castaway, and NBA LIVE 08.
Gross profit for the quarter was $721 million, down 11 percent year-over-year. Net loss for the quarter was $33 million as compared with net income of $160 million for the prior year. Diluted loss per share was $0.10 as compared with diluted earnings per share of $0.50 for the prior year.
Non-GAAP net income was $290 million as compared with $201 million a year ago. Non-GAAP diluted earnings per share were $0.90 as compared with $0.63 for the prior year. (Please see Non-GAAP Financial Measures and reconciliation information included in this release.)
"This was a record revenue quarter for EA and the single biggest revenue quarter for any third party publisher in our industry," said John Riccitiello, Chief Executive Officer. "While we are disappointed that two titles slipped out of the March quarter, Burnout Paradise is off to a terrific start and we are looking forward to the upcoming launches of Army of Two and FIFA Street 3."
"Our holiday quarter was solid, with non-GAAP earnings up 43 percent," said Warren Jenson, Chief Financial and Administrative Officer. "For fiscal 2008, we tightened our top-line range toward the high end of our previous guidance, but given that two high-margin titles are now shipping in fiscal 2009, we tightened our bottom-line range toward the lower end of our previous guidance."
Highlights (comparisons are to the quarter ended December 31, 2006)
-- EA Partners posted its strongest quarterly performance ever driven
by Rock Band, Half Life® 2 Orange Box, Crysis® and
Hellgate™: London.
-- Need for Speed Pro Street sold over 5.5 million copies in the
quarter -- over 65 percent internationally.
-- FIFA 08 sold over 4.5 million copies in the quarter and is EA's
top-selling title year-to-date.
-- The critically-acclaimed Rock Band had a strong North American
launch on the Xbox 360™, PLAYSTATION®3 and PlayStation 2 --
selling 1.5 million copies.
-- The Simpsons Game sold 4.0 million copies in the quarter and was
the highest rated entertainment-based game in 2007.
-- In calendar year 2007, EA was the number one global publisher
across all platforms with 18 percent share in North America and 19
percent in Europe.
-- On the Wii™, EA was the number one third-party publisher in
calendar 2007 in Europe with 15 percent share -- up 11 points from
a year ago; in North America, EA had 12 percent share -- up three
points from a year ago.
-- EA closed the acquisition of BioWare Corp. and Pandemic Studios in
January 2008, adding strong development talent and ten new
franchises.
Business Outlook
The following forward-looking statements, as well as those made above, reflect expectations as of January 31, 2008. Results may be materially different and are affected by many factors, including: development delays on EA's products; competition in the industry; changes in anticipated costs, expected savings and impact on EA's operations of the Company's reorganization plan; 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®2; the financial impact of the Company's acquisition of VG Holding Corp. (BioWare Corp. and Pandemic Studios); the popular appeal of EA's products; changes in foreign exchange rates; the overall global economy; EA's effective tax rate; and other factors detailed in this release and in EA's annual and quarterly SEC filings.
Fiscal Fourth Quarter Expectations - Ending March 31, 2008
-- Net revenue is expected to be between $925 million and $1.05
billion.
-- Net revenue excluding the impact of the change in deferred net
revenue (packaged goods and digital content) is expected to be
between $775 and $850 million.
-- GAAP diluted loss per share is expected to be between ($0.52) and
($0.33).
-- Non-GAAP diluted earnings per share are expected to be between a
loss per share of ($0.03) and earnings per share of $0.02.
Expected non-GAAP diluted earnings (loss) per share exclude the
following items from expected GAAP diluted loss per share:
-- ($0.52) to ($0.38) for the impact of the change in deferred net
revenue (packaged goods and digital content)
-- $0.65 for acquisition-related charges
-- $0.14 of estimated stock-based compensation
-- $0.05 of amortization of intangible assets
-- $0.03 of restructuring charges
The Company expects Battlefield: Bad Company™ and Mercenaries 2: World in Flames™ to ship in fiscal 2009.
Fiscal Year Expectations - Ending March 31, 2008
-- Net revenue is expected to be between $3.462 and $3.587 billion -
as compared to Company's previous guidance of $3.35 to $3.65
billion.
-- Net revenue excluding the impact of the change in deferred net
revenue (packaged goods and digital content) is expected to be
between $3.875 and $3.95 billion -- as compared to the Company's
previous guidance of $3.8 and $4.0 billion.
-- GAAP diluted loss per share is expected to be between ($1.67) and
($1.48) - as compared to the Company's previous guidance of GAAP
diluted loss per share of ($1.60) and ($0.91).
-- Non-GAAP diluted earnings per share are expected to be between
$0.93 and $0.98 - as compared to the Company's previous guidance
of $0.85 to $1.15. Expected non-GAAP diluted earnings per share
exclude the following items from expected GAAP diluted loss per
share:
-- $0.92 to $1.06 for the impact of the change in deferred net
revenue (packaged goods and digital content)
-- $0.65 for acquisition-related charges
-- $0.41 of estimated stock-based compensation
-- $0.27 of restructuring charges
-- $0.15 of amortization of intangible assets
-- $0.04 of losses on strategic investments
-- $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 third quarter of fiscal 2008 ended December 31, 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) 723-9523, access code 220497, or via webcast: http://investor.ea.com.
A dial-in replay of the conference call will be provided until February 7, 2008 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 8:00 am PT (11:00 am ET) at its corporate headquarters in Redwood City, California. Listeners may access the analyst meeting via webcast: http://investor.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 from the Company's unaudited condensed consolidated statements of operations:
-- Change in deferred net revenue (packaged goods and digital content)
-- Acquisition-related charges
-- Amortization of intangibles
-- Certain litigation expenses
-- Losses on strategic investments
-- 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®, "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™ video game and entertainment system, the PLAYSTATION®3 computer entertainment system and the Wii™); 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 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 the remainder of fiscal year 2008 and beyond; the Company's ability to attract and retain key personnel; changes in the Company's effective tax rates; losses on strategic investments; 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 September 30, 2007. These forward-looking statements speak only as of January 31, 2008. 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 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 Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 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 December 31, 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™, EA™, EA SPORTS BIG™ and POGO™. 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, Need for Speed, The Sims, FaceBreaker and Burnout are trademarks or registered trademarks of Electronic Arts Inc. in the U.S. and/or other countries. Battlefield: Bad Company is a trademark of EA Digital Illusions CE AB. Mercenaries™ and Mercenaries 2: World in Flames™ are trademarks and/or registered trademarks of Pandemic Studios, LLC. Crysis is a trademark of Crytek. Half-Life is a trademark or registered trademark of Valve Corporation in the U.S. and/or other countries. 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™: London is a trademark and/or registered trademark of Flagship Studios, Inc. throughout the world. John Madden, NFL, NBA and FIFA are trademarks or other intellectual property of their respective owners and used with permission. "PlayStation" and "PLAYSTATION" are registered trademarks of Sony Computer Entertainment Inc. Xbox and Xbox 360 are trademarks of the Microsoft group of companies. Wii is a trademark of Nintendo.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in millions, except per share data)
Three Months Nine Months
Ended Ended
December 31, December 31,
-------------------------------
2007 2006 2007 2006
------- ------- ------- -------
Net revenue $1,503 $1,281 $2,537 $2,478
Cost of goods sold 782 470 1,342 977
------- ------- ------- -------
Gross profit 721 811 1,195 1,501
Operating expenses:
Marketing and sales 213 165 459 350
General and administrative 95 91 250 222
Research and development 321 330 829 783
Amortization of intangibles 7 7 21 20
Acquired in-process technology - 1 - 3
Restructuring charges 78 2 85 12
------- ------- ------- -------
Total operating expenses 714 596 1,644 1,390
------- ------- ------- -------
Operating income (loss) 7 215 (449) 111
Interest and other income, net 20 25 78 69
------- ------- ------- -------
Income (loss) before provision for
(benefit from) income taxes and
minority interest 27 240 (371) 180
Provision for (benefit from)
income taxes 60 84 (10) 83
------- ------- ------- -------
Income (loss) before minority
interest (33) 156 (361) 97
Minority interest - 4 - 4
------- ------- ------- -------
Net income (loss) $ (33) $ 160 $ (361) $ 101
======= ======= ======= =======
Earnings (loss) per share:
Basic $(0.10) $ 0.52 $(1.15) $ 0.33
Diluted $(0.10) $ 0.50 $(1.15) $ 0.32
Number of shares used in
computation:
Basic 315 309 313 307
Diluted 315 319 313 316
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, losses on strategic investments,
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 Nine Months
Ended Ended
December 31, December 31,
-------------------------------
2007 2006 2007 2006
------- ------- ------- -------
Net income (loss) $ (33) $ 160 $ (361) $ 101
Change in deferred net revenue
(packaged goods and digital
content) (a) 231 563
Acquired in-process technology - 1 - 3
Amortization of intangibles 7 7 21 20
COGS amortization of intangibles 6 7 20 20
Losses on strategic investments 12 - 12 -
Restructuring charges 78 2 85 12
Stock-based compensation 38 35 105 105
Income tax adjustments (49) (11) (137) (33)
------- ------- ------- -------
Non-GAAP net income $ 290 $ 201 $ 308 $ 228
======= ======= ======= =======
Non-GAAP diluted earnings per
share $ 0.90 $ 0.63 $ 0.96 $ 0.72
Shares used in non-GAAP diluted
earnings per share computation 323 319 320 316
(a) Prior to fiscal 2008, the change in deferred net revenue (packaged
goods and digital content) did not have a material impact on the
Company's net revenue. Accordingly, the Company has not revised
its fiscal 2007 non-GAAP financial measures to exclude the impact
of the change in deferred net revenue (packaged goods and digital
content).
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in millions)
December 31, March 31,
2007 2007 (a)
------------ -----------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 2,583 $ 2,635
Marketable equity securities 837 341
Receivables, net of allowances of $259 and
$214, respectively 830 256
Inventories 178 62
Deferred income taxes, net 122 84
Other current assets 347 219
------------ -----------
Total current assets 4,897 3,597
Property and equipment, net 393 484
Investment in affiliates 29 6
Goodwill 737 734
Other intangibles, net 170 210
Deferred income taxes, net 89 25
Other assets 130 90
------------ -----------
TOTAL ASSETS $ 6,445 $ 5,146
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 371 $ 180
Accrued and other current liabilities 782 814
Deferred net revenue (packaged goods and
digital content) 595 32
------------ -----------
Total current liabilities 1,748 1,026
Income tax obligations 301 -
Deferred income taxes, net 8 8
Other liabilities 85 80
------------ -----------
Total liabilities 2,142 1,114
Stockholders' equity:
Common stock 3 3
Paid-in capital 1,726 1,412
Retained earnings 1,981 2,323
Accumulated other comprehensive income 593 294
------------ -----------
Total stockholders' equity 4,303 4,032
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,445 $ 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 Nine Months Ended
December 31, December 31,
------------------------------------
2007 2006 2007 2006
--------- -------- -------- --------
OPERATING ACTIVITIES
Net income (loss) $ (33) $ 160 $ (361) $ 101
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation, amortization and
accretion 42 38 115 110
Stock-based compensation 38 35 105 105
Minority interest - (4) - (4)
Non-cash restructuring charges 42 - 42 -
Net losses on investments and
sale of property and
equipment 9 - 8 1
Acquired in-process technology - 1 - 3
Change in assets and
liabilities:
Receivables, net (383) (275) (539) (338)
Inventories (69) (2) (108) (7)
Other assets 22 49 (56) 63
Accounts payable 140 (34) 169 1
Accrued and other
liabilities 267 249 183 160
Deferred income taxes, net 43 (11) (68) (35)
Deferred net revenue
(packaged goods and digital
content) 231 21 563 23
--------- -------- -------- --------
Net cash provided by operating
activities 349 227 53 183
--------- -------- -------- --------
INVESTING ACTIVITIES
Capital expenditures (25) (32) (62) (118)
Purchase of marketable equity
securities and investments in
affiliates - - (277) (1)
Proceeds from maturities and
sales of short-term
investments 587 231 1,978 911
Purchase of short-term
investments (179) (485) (1,388) (1,086)
Loan advance (30) - (30) -
Acquisition of subsidiaries,
net of cash acquired - (27) - (94)
--------- -------- -------- --------
Net cash provided by (used in)
investing activities 353 (313) 221 (388)
--------- -------- -------- --------
FINANCING ACTIVITIES
Proceeds from issuance of
common stock 74 48 160 133
Excess tax benefit from stock-
based compensation 14 15 45 27
Repayment of note assumed in
connection with acquisition - - - (14)
--------- -------- -------- --------
Net cash provided by financing
activities 88 63 205 146
--------- -------- -------- --------
Effect of foreign exchange on
cash and cash equivalents 14 10 28 16
--------- -------- -------- --------
Increase (decrease) in cash and
cash equivalents 804 (13) 507 (43)
Beginning cash and cash
equivalents 1,074 1,212 1,371 1,242
--------- -------- -------- --------
Ending cash and cash equivalents 1,878 1,199 1,878 1,199
Short-term investments 705 1,212 705 1,212
--------- -------- -------- --------
Ending cash, cash equivalents and
short-term investments $ 2,583 $ 2,411 $ 2,583 $ 2,411
========= ======== ======== ========
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in millions, except per share data, SKU count and Headcount)
Q3 Q4 Q1 Q2 Q3 YOY %
FY07 FY07 FY08 FY08 FY08 Change
------- --------- --------- -------- -------- ------
CONSOLIDATED
FINANCIAL DATA
Net revenue 1,281 613 395 640 1,503 17%
Net revenue -
trailing
twelve months
("TTM") 3,119 3,091 3,073 2,929 3,151 1%
Gross profit 811 378 229 245 721 (11%)
Gross margin
- % of net
revenue 63% 62% 58% 38% 48%
Gross profit -
TTM 1,898 1,879 1,863 1,663 1,573 (17%)
Gross margin
- TTM % of
net revenue 61% 61% 61% 57% 50%
Operating
income (loss) 215 (71) (183) (274) 7 (97%)
Operating
income
(loss)
margin - %
of net
revenue 17% (12%) (46%) (43%) -
Operating
income (loss)
- TTM 135 39 (25) (313) (521) (486%)
Operating
income
(loss)
margin - TTM
% of net
revenue 4% 1% (1%) (11%) (17%)
Net income
(loss) 160 (25) (132) (195) (33) (121%)
Diluted
earnings
(loss) per
share $0.50 ($0.08) ($0.42) ($0.62) ($0.10) (120%)
Net income
(loss) - TTM 85 76 25 (192) (385) (553%)
Diluted
earnings
(loss) per
share - TTM $0.26 $0.24 $0.07 ($0.62) ($1.22) (570%)
CASH FLOW DATA
Operating cash
flow 227 214 (192) (104) 349 54%
Operating cash
flow - TTM 520 397 243 145 267 (49%)
Capital
expenditures 32 60 14 23 25 (22%)
Capital
expenditures -
TTM 154 178 154 129 122 (21%)
BALANCE SHEET
DATA
Cash, cash
equivalents
and short-term
investments 2,411 2,635 2,189 2,176 2,583 7%
Marketable
equity
securities 235 341 660 716 837 256%
Receivables,
net 551 256 123 424 830 51%
Inventories 72 62 74 103 178 147%
Deferred net
revenue
(packaged
goods and
digital
content) (a):
End of the
quarter 32 68 364 595
Less:
Beginning of
the quarter - 32 68 364
------- --------- --------- -------- --------
Change in
deferred
net
revenue
(packaged
goods and
digital
content) 32 36 296 231
STOCK-BASED
COMPENSATION
Cost of goods
sold - 1 - 1 1
Marketing and
sales 5 3 4 5 5
General and
administrative 10 7 8 10 11
Research and
development 20 17 16 22 21
------- --------- --------- -------- --------
Total Stock-
Based
Compensation 35 28 28 38 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% 2% 2% 1%
Research and
development 2% 3% 4% 3% 1%
------- --------- --------- -------- --------
Total Stock-
Based
Compensation 3% 5% 7% 6% 3%
OTHER
Employees 7,761 7,893 8,101 8,239 8,165 5%
Diluted
weighted-
average shares 319 310 311 313 315
GEOGRAPHIC NET
REVENUE MIX
North America 637 307 163 362 768 21%
International 644 306 232 278 735 14%
Europe 583 264 204 246 668 15%
Asia 61 42 28 32 67 10%
------- --------- --------- -------- --------
Net Revenue 1,281 613 395 640 1,503 17%
GEOGRAPHIC NET
REVENUE MIX - as
a % of Net
Revenue
North America 50% 50% 41% 57% 51%
International 50% 50% 59% 43% 49%
Europe 45% 43% 52% 38% 44%
Asia 5% 7% 7% 5% 5%
------- --------- --------- -------- --------
Net Revenue 100% 100% 100% 100% 100%
(a) Prior to fiscal 2008, the change in deferred net revenue (packaged
goods and digital content) did not have a material impact on the
Company's net revenue. Accordingly, the Company has not revised its
fiscal 2007 non-GAAP financial measures to exclude the impact of the
change in deferred net revenue (packaged goods and digital content).
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in millions, except per share data, SKU count and Headcount)
Q3 Q4 Q1 Q2 Q3 YOY %
FY07 FY07 FY08 FY08 FY08 Change
------- --------- --------- -------- -------- ------
PLATFORM NET
REVENUE MIX
PlayStation 2 400 117 61 73 301 (25%)
Xbox 360 172 82 47 218 196 14%
Wii 29 36 29 59 139 379%
PLAYSTATION 3 41 52 13 17 102 149%
Xbox 62 7 3 12 3 (95%)
Nintendo
GameCube 32 4 1 3 1 (97%)
------- --------- --------- -------- --------
Total
Consoles 736 298 154 382 742 1%
PC 218 128 89 79 148 (32%)
Nintendo DS 55 27 25 47 122 122%
PSP 118 39 21 21 74 (37%)
Cellular
Handsets 35 36 33 37 38 9%
Game Boy
Advance 21 3 2 4 2 (90%)
------- --------- --------- -------- --------
Total
Mobility 229 105 81 109 236 3%
Co-publishing
and
Distribution 49 45 39 33 320 553%
Licensing,
Advertising &
Other 25 13 9 14 34 36%
Subscription
Services 24 24 23 23 23 (4%)
------- --------- --------- -------- --------
Total
Internet
Services,
Licensing &
Other 49 37 32 37 57 16%
------- --------- --------- -------- --------
Net Revenue 1,281 613 395 640 1,503 17%
------- --------- --------- -------- --------
PLATFORM NET
REVENUE MIX - as
a % of Net
Revenue
PlayStation 2 31% 19% 16% 11% 20%
Xbox 360 13% 13% 12% 34% 13%
Wii 2% 6% 7% 9% 9%
PLAYSTATION 3 3% 9% 3% 3% 7%
Xbox 5% 1% 1% 2% -
Nintendo
GameCube 3% 1% - 1% -
------- --------- --------- -------- --------
Total
Consoles 57% 49% 39% 60% 49%
PC 17% 21% 23% 12% 10%
Nintendo DS 4% 5% 6% 7% 8%
PSP 9% 6% 5% 3% 5%
Cellular
Handsets 3% 6% 8% 6% 3%
Game Boy
Advance 2% - 1% 1% -
------- --------- --------- -------- --------
Total
Mobility 18% 17% 20% 17% 16%
Co-publishing
and
Distribution 4% 7% 10% 5% 21%
Licensing,
Advertising &
Other 2% 2% 2% 2% 2%
Subscription
Services 2% 4% 6% 4% 2%
------- --------- --------- -------- --------
Total
Internet
Services,
Licensing &
Other 4% 6% 8% 6% 4%
------- --------- --------- -------- --------
Net Revenue 100% 100% 100% 100% 100%
------- --------- --------- -------- --------
PLATFORM SKU
RELEASE MIX (a)
PlayStation 2 6 6 1 7 7 17%
Xbox 360 5 4 2 8 5 -
Wii 2 4 2 5 7 250%
PLAYSTATION 3 4 3 1 7 5 25%
Xbox 2 - - 2 - (100%)
Nintendo
GameCube 2 - - 1 - (100%)
------- --------- --------- -------- --------
Total
Consoles 21 17 6 30 24 14%
PC 9 6 5 7 4 (56%)
Nintendo DS 3 2 2 4 5 67%
PSP 5 2 1 3 4 (20%)
Game Boy
Advance 3 - - 1 - (100%)
------- --------- --------- -------- --------
Total
Mobility 11 4 3 8 9 (18%)
------- --------- --------- -------- --------
Total SKUs 41 27 14 45 37 (10%)
------- --------- --------- -------- --------
(a) Cellular Handsets, Mac(R), iPod(R) nano, and iPod(R) classic are
not included in SKU count.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Fact Sheet for Q3 Fiscal 2008
Q3 Product Releases Platform (i)
-- Boogie(TM) PlayStation(R)2
-- Madden NFL 08 en Espanol PlayStation 2
-- NBA LIVE 08 PlayStation 2
-- NCAA(R) March Madness(R) 08 PlayStation 2
-- Need For Speed(TM) ProStreet PlayStation 2
-- The Sims(TM) 2 Castaway PlayStation 2
-- The Simpsons(TM) Game PlayStation 2
-- Madden NFL 08 en Espanol Xbox 360(TM)
-- NBA LIVE 08 Xbox 360
-- NCAA March Madness 08 Xbox 360
-- Need For Speed ProStreet Xbox 360
-- The Simpsons Game Xbox 360
-- Medal of Honor Heroes(TM) 2 Wii(TM)
-- NBA LIVE 08 Wii
-- Need For Speed ProStreet Wii
-- EA Playground(TM) Wii
-- Smarty Pants(TM) Wii
-- The Sims 2 Castaway Wii
-- The Simpsons Game Wii
-- Medal of Honor Airborne(TM) PLAYSTATION(R)3
-- NBA LIVE 08 PLAYSTATION 3
-- NCAA March Madness 08 PLAYSTATION 3
-- Need For Speed ProStreet PLAYSTATION 3
-- The Simpsons Game PLAYSTATION 3
-- NBA LIVE 08 PC
-- Need For Speed ProStreet PC
-- SimCity(TM) Societies PC
-- The Sims(TM) 2 Teen Style Stuff PC
-- Madden NFL 08 Mac(R)
-- The Sims(TM) 2 Bon Voyage Mac
-- Tiger Woods PGA TOUR(R) 08 Mac
-- Boogie Nintendo DS(TM)
-- Need For Speed ProStreet Nintendo DS
-- EA Playground Nintendo DS
-- The Sims 2 Castaway Nintendo DS
-- The Simpsons Game Nintendo DS
-- Medal of Honor Heroes 2 PSP(R)
-- NBA LIVE 08 PSP
-- The Sims 2 Castaway PSP
-- The Simpsons Game PSP
-- The Sims(TM) DJ Cellular Handsets
-- Need For Speed ProStreet Cellular Handsets
-- BlastDown(TM) Cellular Handsets
-- Block'd Cellular Handsets
-- SimCity Societies Cellular Handsets
-- Harry Potter(TM) Mastering Magic Cellular Handsets
-- NBA LIVE 08 Cellular Handsets
-- ESPN(R) Darts Cellular Handsets
-- Dakar Rally 2008 Cellular Handsets
-- Orcs & Elves II(TM) Cellular Handsets
-- EA SPORTS(TM) FIFA Soccer 08 Cellular Handsets
-- LEGO Escape Cellular Handsets
-- Asterix: The Official Mobile Game of
the Movie Cellular Handsets
-- The Sims(TM) Bowling iPod(R) nano/iPod(R)
classic
-- The Sims(TM) Pool iPod nano/iPod classic
-- Tetris(R) iPod nano/iPod classic
-- EA(TM) Sudoku iPod nano/iPod classic
Co-publishing, Distribution, and
International only (ii)
-- Rock Band(TM) PlayStation 2
-- Half-Life(R) 2: Orange Box Xbox 360
-- Rock Band Xbox 360
-- Half-Life 2: Orange Box PLAYSTATION 3
-- Rock Band PLAYSTATION 3
-- Crysis(R) PC
-- Crysis(R) Collector's Edition PC
-- EA SPORTS(TM) Gameshow PC
-- FIFA Manager 08 PC
-- Half-Life 2: Orange Box PC
-- Hellgate(TM): London PC
-- Hellgate(TM): London Collector's
Edition PC
-- Rail Simulator(R) PC
-- Orcs & Elves(R) Nintendo DS
(i) Cellular Handsets, Mac(R), iPod(R) nano, and iPod(R) classic
releases are not included in SKU count.
(ii) Co-publishing, Distribution, and International only are not
included in SKU count.
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 losses on strategic
investments and 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.
Q3 Q4 Q1 Q2 Q3 YOY %
FY07 FY07 FY08 FY08 FY08 Change
------- --------- --------- -------- -------- ------
QUARTERLY
RECONCILIATION
OF RESULTS
GAAP net
revenue $1,281 $ 613 $ 395 $ 640 $ 1,503 17%
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 296 231
------- --------- --------- -------- --------
Non-GAAP net
revenue (a) $1,281 $ 613 $ 431 $ 936 $ 1,734 35%
======= ========= ========= ======== ========
GAAP gross
profit $ 811 $ 378 $ 229 $ 245 $ 721 (11%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 296 231
COGS
amortization
of
intangibles 7 7 7 7 6
Stock-based
compensation - 1 - 1 1
------- --------- --------- -------- --------
Non-GAAP gross
profit $ 818 $ 386 $ 272 $ 549 $ 959 17%
======= ========= ========= ======== ========
Non-GAAP
gross margin
- % of non-
GAAP net
revenue 64% 63% 63% 59% 55%
GAAP operating
income (loss) $ 215 $ (71) $ (183) $ (274) $ 7 (97%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 296 231
Acquired in-
process
technology 1 - - - -
Amortization
of
intangibles 7 7 7 7 7
COGS
amortization
of
intangibles 7 7 7 7 6
Restructuring
charges 2 3 2 5 78
Stock-based
compensation 35 28 28 38 38
------- --------- --------- -------- --------
Non-GAAP
operating
income (loss) $ 267 $ (26) $ (103) $ 79 $ 367 37%
======= ========= ========= ======== ========
Non-GAAP
operating
income
(loss)
margin - %
of non-GAAP
net revenue 21% (4%) (24%) 8% 21%
GAAP net income
(loss) $ 160 $ (25) $ (132) $ (195) $ (33) (121%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 296 231
Acquired in-
process
technology 1 - - - -
Amortization
of
intangibles 7 7 7 7 7
COGS
amortization
of
intangibles 7 7 7 7 6
Losses on
strategic
investments - - - - 12
Restructuring
charges 2 3 2 5 78
Stock-based
compensation 35 28 28 38 38
Income tax
adjustments (11) (1) (17) (71) (49)
------- --------- --------- -------- --------
Non-GAAP net
income (loss) $ 201 $ 19 $ (69) $ 87 $ 290 44%
======= ========= ========= ======== ========
Non-GAAP net
income
(loss)
margin - %
of non-GAAP
net revenue 16% 3% (16%) 9% 17%
GAAP diluted
earnings
(loss) per
share $0.50 ($0.08) ($0.42) ($0.62) ($0.10) (120%)
Non-GAAP
diluted
earnings
(loss) per
share $0.63 $0.06 ($0.22) $0.27 $0.90 43%
Shares used
in non-GAAP
diluted
earnings
(loss) per
share
computation 319 319 311 320 323
(a) Prior to fiscal 2008, the change in deferred net revenue (packaged
goods and digital content) did not have a material impact on the
Company's net revenue. Accordingly, the Company has not revised its
fiscal 2007 non-GAAP financial measures to exclude the impact of the
change in deferred net revenue (packaged goods and digital content).
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 losses on strategic
investments and 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.
Q3 Q4 Q1 Q2 Q3 YOY %
FY07 FY07 FY08 FY08 FY08 Change
------- --------- --------- -------- -------- ------
TRAILING TWELVE
MONTH
RECONCILIATION
OF RESULTS
GAAP net
revenue $3,119 $ 3,091 $ 3,073 $ 2,929 $ 3,151 1%
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 332 563
------- --------- --------- -------- --------
Non-GAAP net
revenue (a) $3,119 $ 3,091 $ 3,109 $ 3,261 $ 3,714 19%
======= ========= ========= ======== ========
GAAP gross
profit $1,898 $ 1,879 $ 1,863 $ 1,663 $ 1,573 (17%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 332 563
COGS
amortization
of
intangibles 24 27 28 28 27
Stock-based
compensation 1 2 2 2 3
------- --------- --------- -------- --------
Non-GAAP gross
profit $1,923 $ 1,908 $ 1,929 $ 2,025 $ 2,166 13%
======= ========= ========= ======== ========
Non-GAAP
gross margin
- % of non-
GAAP net
revenue 62% 62% 62% 62% 58%
GAAP operating
income (loss) $ 135 $ 39 $ (25) $ (313) $ (521) (486%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 332 563
Acquired in-
process
technology 10 3 3 1 -
Amortization
of
intangibles 24 27 28 28 28
Certain
litigation
expenses (1) - - - -
COGS
amortization
of
intangibles 24 27 28 28 27
Restructuring
charges 29 15 11 12 88
Stock-based
compensation 107 133 124 129 132
------- --------- --------- -------- --------
Non-GAAP
operating
income $ 328 $ 244 $ 205 $ 217 $ 317 (3%)
======= ========= ========= ======== ========
Non-GAAP
operating
income
margin - %
of non-GAAP
net revenue 11% 8% 7% 7% 9%
GAAP net income
(loss) $ 85 $ 76 $ 25 $ (192) $ (385) (553%)
Change in
deferred net
revenue
(packaged
goods and
digital
content) (a) 36 332 563
Acquired in-
process
technology 10 3 3 1 -
Amortization
of
intangibles 24 27 28 28 28
Certain
litigation
expenses (1) - - - -
COGS
amortization
of
intangibles 24 27 28 28 27
Losses on
strategic
investments - - - - 12
Restructuring
charges 29 15 11 12 88
Stock-based
compensation 107 133 124 129 132
Income tax
adjustments (7) (34) (39) (100) (138)
------- --------- --------- -------- --------
Non-GAAP net
income $ 271 $ 247 $ 216 $ 238 $ 327 21%
======= ========= ========= ======== ========
Non-GAAP net
income
margin - %
of non-GAAP
net revenue 9% 8% 7% 7% 9%
GAAP diluted
earnings
(loss) per
share $0.26 $0.24 $0.07 ($0.62) ($1.22) (569%)
Non-GAAP
diluted
earnings per
share $0.86 $0.78 $0.68 $0.74 $1.01 17%
(a) Prior to fiscal 2008, the change in deferred net revenue (packaged
goods and digital content) did not have a material impact on the
Company's net revenue. Accordingly, the Company has not revised its
fiscal 2007 non-GAAP financial measures to exclude the impact of the
change in deferred net revenue (packaged goods and digital content).
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Non-GAAP Financial Information and Non-GAAP
Business Metrics
(in millions, except per share data)
Q3 Q4 Q1 Q2 Q3 YOY %
FY07 FY07 FY08 FY08 FY08 Change
------- --------- --------- -------- -------- ------
CONSOLIDATED NON-
GAAP FINANCIAL
DATA (b)
Non-GAAP net
revenue 1,281 613 431 936 1,734 35%
Non-GAAP net
revenue - TTM 3,119 3,091 3,109 3,261 3,714 19%
Non-GAAP gross
profit 818 386 272 549 959 17%
Non-GAAP
gross
margin - %
of non-GAAP
net revenue 64% 63% 63% 59% 55%
Non-GAAP gross
profit - TTM 1,923 1,908 1,929 2,025 2,166 13%
Non-GAAP
gross
margin -
TTM % of
non-GAAP
net revenue 62% 62% 62% 62% 58%
Non-GAAP
operating
income (loss) 267 (26) (103) 79 367 37%
Non-GAAP
operating
income
(loss)
margin - %
of non-GAAP
net revenue 21% (4%) (24%) 8% 21%
Non-GAAP
operating
income - TTM 328 244 205 217 317 (3%)
Non-GAAP
operating
income
margin -
TTM % of
non-GAAP
net revenue 11% 8% 7% 7% 9%
Non-GAAP net
income (loss) 201 19 (69) 87 290 44%
Non-GAAP
diluted
earnings
(loss) per
share $0.63 $0.06 ($0.22) $0.27 $0.90 43%
Non-GAAP net
income - TTM 271 247 216 238 327 21%
Non-GAAP
diluted
earnings
per share -
TTM $0.86 $0.78 $0.68 $0.74 $1.01 17%
GEOGRAPHIC NET
REVENUE MIX -
GAAP to Non-GAAP
Reconciliation
GAAP
North America 637 307 163 362 768 21%
International 644 306 232 278 735 14%
Europe 583 264 204 246 668 15%
Asia 61 42 28 32 67 10%
------- --------- --------- -------- --------
Net Revenue 1,281 613 395 640 1,503 17%
Change In
Deferred Net
Revenue
(Packaged Goods
and Digital
Content)
Geographic Mix
(a)
North America 8 163 93
International 28 133 138
Europe 21 129 124
Asia 7 4 14
------- --------- --------- -------- --------
Change In
Deferred Net
Revenue
(Packaged
Goods and
Digital
Content) 36 296 231
Non-GAAP
North America 637 307 171 525 861 35%
International 644 306 260 411 873 36%
Europe 583 264 225 375 792 36%
Asia 61 42 35 36 81 33%
------- --------- --------- -------- --------
Non-GAAP Net
Revenue 1,281 613 431 936 1,734 35%
NON-GAAP
GEOGRAPHIC NET
REVENUE MIX - as
a % of Non-GAAP
Net Revenue
North America 50% 50% 40% 56% 50%
International 50% 50% 60% 44% 50%
Europe 45% 43% 52% 40% 45%
Asia 5% 7% 8% 4% 5%
------- --------- --------- -------- --------
Non-GAAP Net
Revenue 100% 100% 100% 100% 100%
(a) Prior to fiscal 2008, the change in deferred net revenue (packaged
goods and digital content) did not have a material impact on the
Company's net revenue. Accordingly, the Company has not revised its
fiscal 2007 non-GAAP financial measures to exclude the impact of the
change in deferred net revenue (packaged goods and digital content).
(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)
Q3 Q4 Q1 Q2 Q3 YOY %
FY07 FY07 FY08 FY08 FY08 Change
------- --------- --------- -------- -------- ------
PLATFORM NON-GAAP
NET REVENUE MIX
PlayStation 2 400 117 69 204 324 (19%)
PLAYSTATION 3 41 52 20 98 196 378%
Xbox 360 172 82 47 218 196 14%
Wii 29 36 29 83 156 438%
Xbox 62 7 3 12 3 (95%)
Nintendo
GameCube 32 4 1 3 1 (97%)
------- --------- --------- -------- --------
Total
Consoles 736 298 169 618 876 19%
PC 218 128 96 116 153 (30%)
Nintendo DS 55 27 25 47 122 122%
PSP 118 39 30 43 111 (6%)
Cellular
Handsets 35 36 34 37 38 9%
Game Boy
Advance 21 3 2 4 2 (90%)
------- --------- --------- -------- --------
Total
Mobility 229 105 91 131 273 19%
Co-publishing
and
Distribution 49 45 39 32 372 659%
Subscription
Services 24 24 23 23 23 (4%)
Licensing,
Advertising &
Other 25 13 13 16 37 48%
------- --------- --------- -------- --------
Total
Internet
Services,
Licensing &
Other 49 37 36 39 60 22%
------- --------- --------- -------- --------
Non-GAAP
Net
Revenue 1,281 613 431 936 1,734 35%
------- --------- --------- -------- --------
Change in
Deferred Net
Revenue
(Packaged
Goods and
Digital
Content)(a)
PlayStation 2 (8) (131) (23)
PLAYSTATION 3 (7) (81) (94)
Wii - (24) (17)
PC (7) (37) (5)
PSP (9) (22) (37)
Cellular
Handsets (1) - -
Co-publishing
and
Distribution - 1 (52)
Licensing,
Advertising &
Other (4) (2) (3)
------- --------- --------- -------- --------
Change in
Deferred Net
Revenue
(Packaged
Goods and
Digital
Content) (a) (36) (296) (231)
------- --------- --------- -------- --------
GAAP Net
Revenue 395 640 1,503
------- --------- --------- -------- --------
PLATFORM NON-GAAP
NET REVENUE MIX
- as a % of Non-
GAAP Net Revenue
PlayStation 2 31% 19% 16% 22% 19%
PLAYSTATION 3 3% 9% 5% 11% 11%
Xbox 360 13% 13% 11% 23% 11%
Wii 2% 6% 7% 9% 9%
Xbox 5% 1% 1% 1% -
Nintendo
GameCube 3% 1% - - -
------- --------- --------- -------- --------
Total
Consoles 57% 49% 40% 66% 50%
PC 17% 21% 22% 12% 9%
Nintendo DS 4% 5% 6% 5% 7%
PSP 9% 6% 7% 5% 7%
Cellular
Handsets 3% 6% 8% 4% 2%
Game Boy
Advance 2% - - - -
------- --------- --------- -------- --------
Total
Mobility 18% 17% 21% 14% 16%
Co-publishing
and
Distribution 4% 7% 9% 4% 22%
Subscription
Services 2% 4% 5% 2% 1%
Licensing,
Advertising &
Other 2% 2% 3% 2% 2%
------- --------- --------- -------- --------
Total
Internet
Services,
Licensing &
Other 4% 6% 8% 4% 3%
------- --------- --------- -------- --------
Non-GAAP Net
Revenue 100% 100% 100% 100% 100%
------- --------- --------- -------- --------
(a) Prior to fiscal 2008, the change in deferred net revenue (packaged
goods and digital content) did not have a material impact on the
Company's net revenue. Accordingly, the Company has not revised its
fiscal 2007 non-GAAP financial measures to exclude the impact of the
change in deferred net revenue (packaged goods and digital content).
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.
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