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REDWOOD CITY, Calif., Feb 02, 2006 (BUSINESS WIRE) -- Electronic Arts (Nasdaq:ERTS) today announced financial results for the fiscal third quarter ended December 31, 2005.
Net revenue was $1.270 billion, down 11 percent as compared with $1.428 billion for the fiscal quarter ended December 31, 2004. Sales were driven by Need for Speed™ Most Wanted, FIFA 06, Harry Potter and the Goblet of Fire™, The Sims™ 2 and Madden NFL 06, each selling over two million copies in the quarter. NBA Live 06, SSX™ On Tour, Tiger PGA TOUR® 06, From Russia with Love™ and Battlefield 2: Modern Combat™ also had strong sales, each selling over one million copies in the quarter.
Net income for the quarter was $259 million as compared with $375 million for the prior year. Diluted earnings per share were $0.83 as compared with $1.18 for the prior year.
Non-GAAP net income for the quarter, excluding certain items, was $268 million as compared with $391 million a year ago. Non-GAAP diluted earnings per share were $0.86 as compared with $1.23 for the prior year. (Please see Non-GAAP Financial Measures and reconciliation information included in this release.)
Trailing twelve month operating cash flow was $733 million as compared with $722 million for the same period a year ago.
"We ended 2005 in a very strong competitive position," said Larry Probst, Chairman and Chief Executive Officer. "We were number one on the PlayStation 2, the Xbox, PSP and PC in both North America and Europe. We also had a successful launch on the Xbox 360 and expect that we will be the number one publisher on this platform in 2006."
"Calendar 2006 will be a year of investment ahead of revenues," said Warren Jenson, Chief Financial and Administrative Officer. "Our resources will be focused on next-generation software and the global expansion of our online and mobile businesses."
Current Highlights (comparisons are to the quarter ended December 31, 2004, unless otherwise stated)
-- Net revenue for the quarter: North America -- down 11 percent to $618 million; Europe -- down 13 percent to $577 million; Asia, including Japan, up 7 percent to $75 million. Reported net revenue decreased by $21 million or one percent due to changes in foreign currency rates.
-- Need for Speed Most Wanted sold over seven million copies in the quarter with over 60 percent sold internationally.
-- EA launched five Xbox 360™ titles in the quarter resulting in 30 percent revenue share in North America and 24 percent in Europe.
-- Six titles reached platinum status in the quarter, bringing EA's total for the calendar year to 27.
-- EA had 22 percent revenue share in North America and 23 percent revenue share in Europe.
-- EA had four of the top 10 titles in North America and six of the top 10 titles in Europe in 2005 - Madden NFL 06 was the #1 title in North America and Need for Speed Most Wanted was the #1 title in Europe.
-- EA signed an agreement with Twentieth Century Fox and Gracie Films to bring The Simpsons to next generation consoles.
-- The Company's exclusive license with Tiger Woods was extended for six years.
-- EA entered into a definitive merger agreement with JAMDAT under which EA will pay $27 per share in cash in exchange for each share of JAMDAT common stock.
Business Outlook
The following forward-looking statements reflect expectations as of February 2, 2006. Results may be materially different and are affected by many factors, such as consumer spending trends, the popular appeal of EA's products, development delays, current-generation and next-generation hardware availability, timely release of next-generation hardware platforms, the seasonal and cyclical nature of the interactive entertainment industry, the overall economy, competition, changes in foreign exchange rates, EA's effective tax rate, and other factors detailed in this release and EA's annual and quarterly SEC filings.
Fiscal Fourth Quarter Expectations -- Ending March 31, 2006
-- Net revenue is expected to be between $550 and $600 million.
-- Non-GAAP diluted earnings per share are expected to be between $0.06 and $0.14.
-- GAAP net loss per share is expected to be between ($0.15) and ($0.23). This range includes $0.17 of estimated acquisition-related charges associated with the likely closing of the JAMDAT transaction, $0.09 related to the possible decision to repatriate up to $500 million in foreign earnings under the American Jobs Creation Act of 2004, and $0.04 of estimated charges related to the reorganization and establishment of an International Publishing headquarters in Geneva and other restructuring activities.
Non-GAAP Financial Measures
Electronic Arts uses non-GAAP measures of operating income, net income and diluted earnings per share. These non-GAAP measures exclude the following items, including any related tax effect, from the Company's statement of operations:
-- Amortization of intangibles
-- Employee stock-based compensation
-- Restructuring and asset impairment charges
-- Acquired in-process technology and other acquisition-related charges
-- Certain non-recurring litigation expenses
-- Other-than-temporary impairment of investments in affiliates
In addition, the Company's non-GAAP results exclude the impact of one-time tax adjustments.
Other significant non-recurring items may occur from time to time that require an adjustment to these non-GAAP measures. When these items occur, the accounting impact will become a reconciling item between the GAAP results and these non-GAAP measures.
The Company believes that excluding these items is useful for illustrating and explaining operating results and comparisons to prior periods. Management considers these non-GAAP measures in its decision-making to facilitate more relevant operating comparisons.
A reconciliation of GAAP operating income to non-GAAP operating income; GAAP net income to non-GAAP net income; and GAAP diluted earnings per share to non-GAAP diluted earnings per share is included as part of the supplemental disclosures to this release.
Conference Call
Electronic Arts will host a conference call on February 2, 2006 at 2:00 pm PT (5:00 pm ET) to review the results for the Company's third quarter ended December 31, 2005 and to discuss its outlook for the future. Listeners may access the conference call live via webcast (http://investor.ea.com). A webcast archive of the conference call will be available for one year at http://investor.ea.com.
Some statements set forth in this release, including the estimates 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 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: sales of the Company's titles during the remainder of fiscal year 2006; consumer spending trends; the seasonal and cyclical nature of the interactive game segment; timely development and release of Electronic Arts' products; competition in the interactive entertainment industry; the Company's ability to manage expenses during fiscal year 2006; the timely release of next-generation hardware; the availability of an adequate supply of current-generation and next-generation hardware units; the Company's ability to predict consumer preferences among competing hardware platforms; the Company's ability to secure licenses to valuable entertainment properties on favorable terms; the Company's ability to attract and retain key personnel; changes in the Company's effective tax rates; adoption of new accounting regulations and standards; potential regulation of the Company's products in key territories; developments in the law regarding protection of the Company's products; fluctuations in foreign exchange rates; and other factors described in the Company's annual report on Form 10-K for the year ended March 31, 2005 and Form 10-Q for the quarter ended September 30, 2005. These forward-looking statements speak only as of February 2, 2006. Electronic Arts does not intend to update these forward-looking statements, including those made under the "Business Outlook" heading.
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,
--------------- ---------------
2005 2004 2005 2004
------- ------- ------- -------
Net revenue $1,270 $1,428 $2,310 $2,575
Cost of goods sold 502 503 937 963
------- ------- ------- -------
Gross profit 768 925 1,373 1,612
Operating expenses:
Marketing and sales 147 133 329 304
General and administrative 58 78 160 155
Research and development 206 185 571 473
Amortization of intangibles 1 1 3 2
Acquired in-process technology - 9 - 9
Restructuring charges 9 - 9 -
------- ------- ------- -------
Total operating expenses 421 406 1,072 943
------- ------- ------- -------
Operating income 347 519 301 669
Interest and other income, net 20 23 49 44
------- ------- ------- -------
Income before provision for income
taxes and minority interest 367 542 350 713
Provision for income taxes 106 167 93 216
------- ------- ------- -------
Income before minority interest 261 375 257 497
Minority interest (2) - (5) -
------- ------- ------- -------
Net income $259 $375 $252 $497
======= ======= ======= =======
Earnings per share:
Basic $0.86 $1.23 $0.83 $1.63
Diluted $0.83 $1.18 $0.80 $1.57
Number of shares used in computation:
Basic 301 306 304 304
Diluted 311 317 315 316
Non-GAAP Results (in millions, except per share data)
The following table shows the Company's non-GAAP results reconciled to
the Generally Accepted Accounting Principles ("GAAP") Condensed
Consolidated Statements of Operations. The Company's non-GAAP results
do not include amortization of intangibles, employee stock-based
compensation, acquired in-process technology, restructuring charges,
asset impairment charges, certain litigation expense and
other-than-temporary impairment of investments in affiliates and their
related income tax effect. In addition, the Company's non-GAAP results
also exclude the impact of one-time income tax adjustments.
Three Months Nine Months
Ended Ended
December 31, December 31,
--------------- ---------------
2005 2004 2005 2004
------- ------- ------- -------
Net income $259 $375 $252 $497
Amortization of intangibles 1 1 3 2
COGS amortization of intangibles 2 2 6 2
Employee stock-based compensation - 4 1 4
Acquired in-process technology - 9 - 9
Restructuring charges 9 - 9 -
Certain litigation expense - - 1 -
Income tax effect on the above items (3) - (5) (1)
Income tax adjustments - - (9) -
------- ------- ------- -------
Non-GAAP net income $268 $391 $258 $513
======= ======= ======= =======
Non-GAAP diluted earnings per share $0.86 $1.23 $0.82 $1.62
Number of shares used in diluted
earnings per share computation 311 317 315 316
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in millions)
December 31, March 31,
2005 2005 (a)
------------ ----------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $2,556 $2,958
Marketable equity securities 167 140
Receivables, net of allowances of $262 million
and $162 million, respectively 567 296
Inventories 76 62
Deferred income taxes 88 86
Other current assets 208 164
------------ ----------
Total current assets 3,662 3,706
Property and equipment, net 375 353
Investment in affiliates 11 10
Goodwill 154 153
Other intangibles, net 28 36
Deferred income taxes 15 19
Other assets 86 93
------------ ----------
Total Assets $4,331 $4,370
============ ==========
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $187 $134
Accrued and other liabilities 760 694
------------ ----------
Total current liabilities 947 828
Other liabilities 30 33
------------ ----------
Total liabilities 977 861
Minority interest 13 11
Stockholders' equity:
Common stock 3 3
Paid-in capital 994 1,434
Retained earnings 2,257 2,005
Accumulated other comprehensive income 87 56
------------ ----------
Total stockholders' equity 3,341 3,498
------------ ----------
Total Liabilities, Minority Interest and
Stockholders' Equity $4,331 $4,370
============ ==========
(a) Derived from audited financial statements.
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in millions)
Three Months Nine Months
Ended Ended
December 31, December 31,
--------------- ---------------
2005 2004 2005 2004
------- ------- ------- -------
OPERATING ACTIVITIES
Net income $259 $375 $252 $497
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 22 20 68 53
Equity in net income of investment
in affiliate - (1) - (1)
Minority interest 2 - 5 -
Realized losses (gains) on
investments and sale of property
and equipment (2) (6) - (10)
Stock-based compensation 1 4 1 4
Tax benefit from exercise of stock
options 25 10 117 35
Acquired in-process technology - 9 - 9
Other operating activities (1) - - -
Change in assets and liabilities:
Receivables, net (223) (518) (243) (687)
Inventories (2) (7) (11) (31)
Other assets (19) (41) (35) (14)
Accounts payable 16 26 50 84
Accrued and other liabilities 200 266 55 221
------- ------- ------- -------
Net cash provided by operating
activities 278 137 259 160
------- ------- ------- -------
INVESTING ACTIVITIES
Capital expenditures (31) (37) (87) (82)
Proceeds from sale of property and
equipment - 1 - 16
Proceeds from sale of marketable
equity securities - - 4 3
Purchase of investment in
affiliates (1) (2) (2) (2)
Proceeds from sale of investment in
affiliate 2 - 2 -
Proceeds from maturities and sales
of short-term investments 627 85 948 897
Purchase of short-term investments (66) (590) (347) (2,248)
Acquisition of subsidiary, net of
cash acquired - (60) (3) (60)
Other investing activities (2) - (2) -
------- ------- ------- -------
Net cash provided by (used in)
investing activities 529 (603) 513 (1,476)
------- ------- ------- -------
FINANCING ACTIVITIES
Proceeds from sale of common stock
through employee stock plans and
other plans 91 61 151 147
Repurchase and retirement of common
stock - (31) (709) (31)
------- ------- ------- -------
Net cash provided by (used in)
financing activities 91 30 (558) 116
------- ------- ------- -------
Effect of foreign exchange on cash and
cash equivalents (11) 13 (22) 13
------- ------- ------- -------
Increase (decrease) in cash and cash
equivalents 887 (423) 192 (1,187)
Beginning cash and cash equivalents 575 1,386 1,270 2,150
------- ------- ------- -------
Ending cash and cash equivalents 1,462 963 1,462 963
Short-term investments 1,094 1,602 1,094 1,602
------- ------- ------- -------
Ending cash, cash equivalents and
short-term investments $2,556 $2,565 $2,556 $2,565
======= ======= ======= =======
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated
Statements of Operations
(in millions, except per share data)
The following tables show the Company's non-GAAP results reconciled to
the Generally Accepted Accounting Principles ("GAAP") Condensed
Consolidated Statements of Operations. The Company's non-GAAP results
do not include amortization of intangibles, employee stock-based
compensation, acquired-in-process technology, restructuring charges,
asset impairment charges, certain litigation expense, and
other-than-temporary impairment of investments in affiliates, and
their related income tax effect. In addition, the Company's non-GAAP
results also exclude the impact of one-time income tax adjustments.
Q3 Q4 Q1 Q2 Q3
FY05 FY05 FY06 FY06 FY06
QUARTERLY RESULTS
Operating Income (loss)
GAAP operating income (loss) $519 $- $(96) $49 $347
Adjustments:
Amortization of intangibles 1 1 1 1 1
COGS amortization of
intangibles 2 2 2 2 2
Employee stock-based
compensation 4 2 - 1 -
Acquired-in-process technology 9 4 1 - -
Restructuring charges - 1 - - 9
Certain litigation expense - 21 - 1 -
------ ------ ------- ------ ------
Total adjustments 16 31 4 5 12
Non-GAAP operating income (loss) $535 $31 $(92) $54 $359
====== ====== ======= ====== ======
Non-GAAP operating income (loss)
margin - % of net revenue 37% 6% (25%) 8% 28%
Net Income (loss)
GAAP net income (loss) $375 $8 $(58) $51 $259
Adjustments:
Amortization of intangibles 1 1 1 1 1
COGS amortization of
intangibles 2 2 2 2 2
Employee stock-based
compensation 4 2 - 1 -
Acquired-in-process technology 9 3 1 - -
Restructuring charges - 1 - - 9
Certain litigation expense - 21 - 1 -
Income tax effect on the above
items - (8) (1) (1) (3)
Income tax adjustments - - - (9) -
------ ------ ------- ------ ------
Total adjustments 16 22 3 (5) 9
Non-GAAP net income (loss) $391 $30 $(55) $46 $268
====== ====== ======= ====== ======
Non-GAAP net income (loss) margin
- % of net revenue 27% 5% (15%) 7% 21%
GAAP diluted earnings (loss) per
share $1.18 $0.02 ($0.19) $0.16 $0.83
Non-GAAP diluted earnings (loss)
per share $1.23 $0.09 ($0.18) $0.15 $0.86
Shares used in diluted earnings
(loss) per share computation 317 322 308 314 311
TRAILING TWELVE MONTH RESULTS
Operating Income
GAAP operating income $763 $669 $548 $472 $300
Adjustments:
Amortization of intangibles 3 3 3 4 4
COGS amortization of
intangibles 2 3 5 7 8
Employee stock-based
compensation 4 6 6 7 3
Acquired-in-process technology 9 14 15 15 5
Restructuring charges 9 1 1 1 10
Certain litigation expense - 21 21 22 22
------ ------ ------- ------ ------
Total adjustments 27 48 51 56 52
Non-GAAP operating income $790 $717 $599 $528 $352
====== ====== ======= ====== ======
Non-GAAP operating income margin
- % of net revenue 25% 23% 20% 17% 12%
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated
Statements of Operations
(in millions, except per share data)
The following tables show the Company's non-GAAP results reconciled to
the Generally Accepted Accounting Principles ("GAAP") Condensed
Consolidated Statements of Operations. The Company's non-GAAP results
do not include amortization of intangibles, employee stock-based
compensation, acquired-in-process technology, restructuring charges,
asset impairment charges, certain litigation expense , and other-than-
temporary impairment of investments in affiliates, and their related
income tax effect. In addition, the Company's non-GAAP results also
exclude the impact of one-time income tax adjustments.
Q3 Q4 Q1 Q2 Q3
FY05 FY05 FY06 FY06 FY06
TRAILING TWELVE MONTH RESULTS
Net Income
GAAP net income $587 $504 $422 $376 $260
Adjustments:
Amortization of intangibles 3 3 4 4 4
COGS amortization of
intangibles 2 3 5 7 8
Employee stock-based
compensation 4 6 6 7 3
Acquired-in-process technology 9 13 14 14 4
Restructuring charges 9 1 1 1 10
Certain litigation expense - 21 21 22 22
Income tax effect on the above
items (4) (8) (9) (10) (13)
Income tax adjustments (20) - - (9) (9)
------ ------ ------- ------ ------
Total adjustments 3 39 42 36 29
Non-GAAP net income $590 $543 $464 $412 $289
====== ====== ======= ====== ======
Non-GAAP net income margin - %
of net revenue 19% 17% 15% 14% 10%
GAAP diluted earnings per share $1.86 $1.59 $1.32 $1.17 $0.82
Non-GAAP diluted earnings per
share $1.87 $1.71 $1.45 $1.29 $0.92
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 %
FY05 FY05 FY06 FY06 FY06 Change
CONSOLIDATED FINANCIAL DATA
Net revenue 1,428 553 365 675 1,270 (11%)
Net revenue - trailing
twelve months ("TTM") 3,174 3,129 3,062 3,021 2,863 (10%)
Gross profit 925 320 214 391 768 (17%)
Gross margin - % of net
revenue 65% 58% 59% 58% 60%
Gross profit - TTM 1,984 1,932 1,891 1,850 1,693 (15%)
Gross margin - TTM % of
net revenue 63% 62% 62% 61% 59%
Operating income (loss) 519 - (96) 49 347 (33%)
Operating income (loss)
margin - % of net
revenue 36% 0% (26%) 7% 27%
Operating income - TTM 763 669 548 472 300 (61%)
Operating income margin
- TTM % of net revenue 24% 21% 18% 16% 10%
Net income (loss) 375 8 (58) 51 259 (31%)
Diluted earnings (loss)
per share $1.18 $0.02 ($0.19) $0.16 $0.83 (30%)
Net income - TTM 587 504 422 376 260 (56%)
Diluted earnings per
share - TTM $1.86 $1.59 $1.32 $1.17 $0.82 (56%)
Non-GAAP operating income
(loss) (a) 535 31 (92) 54 359 (33%)
Non-GAAP operating
income (loss) margin -
% of net revenue 37% 6% (25%) 8% 28%
Non-GAAP operating income
- TTM (a) 790 717 599 528 352 (55%)
Non-GAAP operating
income margin - TTM %
of net revenue 25% 23% 20% 17% 12%
Non-GAAP net income (loss)
(a) 391 30 (55) 46 268 (31%)
Non-GAAP diluted
earnings (loss) per
share (a) $1.23 $0.09 ($0.18) $0.15 $0.86 (30%)
Non-GAAP net income - TTM
(a) 590 543 464 412 289 (51%)
Non-GAAP diluted
earnings per share -
TTM (a) $1.87 $1.71 $1.45 $1.28 $0.92 (51%)
CASH FLOW DATA
Operating cash flow 137 474 (31) 12 278 103%
Operating cash flow - TTM 722 634 669 592 733 2%
Capital expenditures 37 44 33 23 31 (16%)
Capital expenditures - TTM 116 126 133 137 131 13%
BALANCE SHEET DATA
Cash, cash equivalents and
short term investments 2,565 2,958 2,573 2,230 2,556 (0%)
Marketable equity
securities 4 140 176 182 167 N/M
Receivables, net 892 296 167 328 567 (36%)
Inventories 84 62 66 74 76 (10%)
OTHER
Employees 5,669 6,122 6,365 6,608 6,819 20%
Diluted weighted-average
shares 317 322 308 314 311
(a) Please see attached Unaudited Reconciliation of GAAP to Non-GAAP
Condensed Consolidated Statements of Operations.
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 %
FY05 FY05 FY06 FY06 FY06 Change
GEOGRAPHIC REVENUE MIX
North America Revenue 692 288 184 443 618 (11%)
International Revenue 736 265 181 232 652 (11%)
Europe Revenue 666 218 144 191 577 (13%)
Asia Revenue 70 47 37 41 75 7%
------ ------ ------- ------ ------
Net Revenue 1,428 553 365 675 1,270 (11%)
GEOGRAPHIC REVENUE MIX - as
a % of Net Revenue
North America Revenue 48% 52% 50% 66% 49%
International Revenue 52% 48% 50% 34% 51%
Europe Revenue 47% 40% 40% 28% 45%
Asia Revenue 5% 8% 10% 6% 6%
------ ------ ------- ------ ------
Net Revenue 100% 100% 100% 100% 100%
PLATFORM REVENUE MIX
Sony PlayStation 2 661 196 117 304 495 (25%)
Xbox 233 83 44 136 152 (35%)
Xbox 360 - - - - 76 N/M
Nintendo GameCube 109 37 22 27 69 (37%)
Other consoles 6 1 - - 1 (83%)
------ ------ ------- ------ ------
Total Consoles 1,009 317 183 467 793 (21%)
PC 239 85 74 91 148 (38%)
PSP - 18 33 45 120 N/M
Nintendo DS 16 7 12 8 36 125%
Game Boy Advance 39 9 6 7 35 (10%)
Cellular Handsets - - 1 2 1 N/M
------ ------ ------- ------ ------
Total Mobility 55 34 52 62 192 249%
Co-publishing and
Distribution 79 89 30 32 99 25%
Subscription Services 14 16 15 14 16 14%
Licensing, Advertising &
Other 32 12 11 9 22 (31%)
------ ------ ------- ------ ------
Total Internet
Services, Licensing &
Other 46 28 26 23 38 (17%)
------ ------ ------- ------ ------
Net Revenue 1,428 553 365 675 1,270 (11%)
PLATFORM REVENUE MIX - as a
% of Net Revenue
Sony PlayStation 2 46% 36% 32% 45% 39%
Xbox 16% 15% 12% 20% 12%
Xbox 360 0% 0% 0% 0% 6%
Nintendo GameCube 8% 7% 6% 4% 5%
Other consoles 1% 0% 0% 0% 0%
------ ------ ------- ------ ------
Total Consoles 71% 58% 50% 69% 62%
PC 17% 15% 21% 14% 12%
PSP 0% 3% 9% 7% 9%
Nintendo DS 1% 1% 3% 1% 3%
Game Boy Advance 3% 2% 2% 1% 3%
Cellular Handsets 0% 0% 0% 0% 0%
------ ------ ------- ------ ------
Total Mobility 4% 6% 14% 9% 15%
Co-publishing and
Distribution 5% 16% 8% 5% 8%
Subscription Services 1% 3% 4% 2% 1%
Licensing, Advertising &
Other 2% 2% 3% 1% 2%
------ ------ ------- ------ ------
Total Internet
Services, Licensing
& Other 3% 5% 7% 3% 3%
------ ------ ------- ------ ------
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)
Q3 Q4 Q1 Q2 Q3 YOY %
FY05 FY05 FY06 FY06 FY06 Change
Platform SKU Release Mix
Sony PlayStation 2 9 6 3 9 8 (11%)
Xbox 9 6 3 9 8 (11%)
Xbox 360 - - - - 5 N/M
Nintendo GameCube 7 5 2 6 5 (29%)
Other consoles 1 - - - - (100%)
------ ------ ------- ------ ------
Total Consoles 26 17 8 24 26 0%
PC 7 5 2 6 7 0%
PSP - 3 3 3 8 N/M
Nintendo DS 3 - 2 2 5 67%
Game Boy Advance 4 - 1 2 3 (25%)
------ ------ ------- ------ ------
Total Mobility 7 3 6 7 16 129%
------ ------ ------- ------ ------
Total SKUs 40 25 16 37 49 23%
------ ------ ------- ------ ------
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Schedule of Earnings
Adjusted for Stock-Based Compensation
(in millions, except per share data)
Had the Company's stock-based compensation plans been measured on the
estimated fair value at the grant dates in accordance with the
provisions of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," we estimate that our
reported net income and net earnings per share would have been the pro
forma amounts indicated below:
Three Months Ended Nine Months Ended
December 31, December 31,
------------------ -------------------
2005 2004 2005 2004
--------- -------- --------- ---------
Net income - as reported $259 $375 $252 $497
Stock-based compensation (20) (17) (70) (60)
--------- -------- --------- ---------
Net income - pro forma $239 $358 $182 $437
========= ======== ========= =========
Net earnings per share:
As reported - basic $0.86 $1.23 $0.83 $1.63
Pro forma - basic $0.79 $1.17 $0.60 $1.44
As reported - diluted $0.83 $1.18 $0.80 $1.57
Pro forma - diluted $0.77 $1.14 $0.58 $1.39
ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Fact Sheet for Q3 Fiscal 2006
Q3 Product Releases Platform
-- Battlefield 2: Modern Combat(TM) PlayStation(R) 2
-- Harry Potter and the Goblet of Fire(TM) PlayStation 2
-- James Bond 007: From Russia With Love(TM) PlayStation 2
-- NCAA(R) March Madness(R) 06 PlayStation 2
-- Need for Speed(TM) Most Wanted PlayStation 2
-- Need for Speed(TM) Most Wanted Black
Edition PlayStation 2
-- SSX(TM) on Tour PlayStation 2
-- The Sims(TM) 2 PlayStation 2
-- Battlefield 2: Modern Combat Xbox(R)
-- Harry Potter and the Goblet of Fire Xbox
-- James Bond 007: From Russia With Love Xbox
-- NCAA March Madness 06 Xbox
-- Need for Speed Most Wanted Xbox
-- Need for Speed Most Wanted Black Edition Xbox
-- SSX on Tour Xbox
-- The Sims 2 Xbox
-- FIFA 06 XBOX 360(TM)
-- Madden NFL 06 XBOX 360
-- NBA Live 06 XBOX 360
-- Need for Speed Most Wanted XBOX 360
-- Tiger Woods PGA TOUR(R) 06 XBOX 360
-- Harry Potter and the Goblet of Fire Nintendo GameCube(TM)
-- James Bond 007: From Russia With Love Nintendo GameCube
-- Need for Speed Most Wanted Nintendo GameCube
-- SSX on Tour Nintendo GameCube
-- The Sims 2 Nintendo GameCube
-- Battlefield 2: Special Forces(TM) PC
-- Harry Potter and the Goblet of Fire PC
-- Need for Speed Most Wanted PC
-- Need for Speed Most Wanted Black Edition PC
-- The Sims(TM) 2 Holiday Edition PC
-- The Sims(TM) 2 Holiday Party Pack PC
-- The Sims(TM) Complete Collection PC
-- FIFA 06 PSP(TM)
-- Harry Potter and the Goblet of Fire PSP
-- Marvel Nemesis(TM): Rise of the
Imperfects(TM) PSP
-- NBA Live 06 PSP
-- Need for Speed Most Wanted PSP
-- SSX on Tour PSP
-- The Lord of the Rings(TM) Tactics PSP
-- The Sims 2 PSP
-- Harry Potter and the Goblet of Fire Game Boy(R) Advance
-- Need for Speed Most Wanted Game Boy Advance
-- The Sims 2 Game Boy Advance
-- Burnout(TM) Legends Nintendo DS(TM)
-- Harry Potter and the Goblet of Fire Nintendo DS
-- Marvel Nemesis: Rise of the Imperfects Nintendo DS
-- Need for Speed Most Wanted Nintendo DS
-- The Sims 2 Nintendo DS
Co-pub, International only and Others (not in
SKU count)
-- Resident Evil(R) 4 PlayStation 2
-- Resident Evil(R) 4 Premium Edition PlayStation 2
-- Half Life(R) 2 (a) Xbox
-- Black & White(TM) 2 PC
(a) Distribution Deals
All trademarks are the property of their respective owners.
SOURCE: Electronic Arts
Electronic Arts
Tricia Gugler, 650-628-7327 (Investor Relations)
Jeff Brown, 650-628-7922 (Corporate Communications)
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