Segment Information

6 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information

(16) SEGMENT INFORMATION

Our reporting segment is based upon: our internal organizational structure; the manner in which our operations are managed; the criteria used by our Chief Executive Officer, our Chief Operating Decision Maker (“CODM”), to evaluate segment performance; the availability of separate financial information; and overall materiality considerations.

Our business is organized around our five labels, EA Games, EA SPORTS, Maxis, PopCap and All Play. Our CODM regularly reviews the aggregated results of the five labels to assess overall performance and allocate resources. All five of the labels comprise our operating segment (the “EA Labels” segment) as shown below. To a lesser degree, our CODM also reviews results based on geographic performance.

The following table summarizes the financial performance of the EA Labels segment and a reconciliation of the EA Labels segment’s income to our consolidated operating loss for the three and six months ended September 30, 2013 and 2012 (in millions):

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
EA Labels segment:
Net revenue before revenue deferral	$	1,023		$	1,059		$	1,505		$	1,526
Depreciation and amortization	(10		)	(13		)	(23		)	(29		)
Other expenses	(702		)	(792		)	(1,144		)	(1,253		)
EA Labels segment profit	311			254			338			244
Reconciliation to consolidated operating loss:
Other:
Revenue deferral	(879		)	(880		)	(1,234		)	(1,195		)
Recognition of revenue deferral	534			511			1,343			1,290
Other net revenue	17			21			30			45
Depreciation and amortization	(40		)	(37		)	(76		)	(71		)
Acquisition-related contingent consideration	44			—			37			20
Restructuring and other charges	2			2			1			(25		)
Stock-based compensation	(38		)	(44		)	(71		)	(83		)
Other expenses	(203		)	(191		)	(387		)	(374		)
Consolidated operating loss	$	(252	)	$	(364	)	$	(19	)	$	(149	)

EA Labels segment profit differs from consolidated operating income primarily due to the exclusion of (1) certain corporate and other functional costs that are not allocated to EA Labels, (2) the deferral of certain net revenue related to online-enabled games (see Note 10 for additional information regarding deferred net revenue (online-enabled games)), and (3) our Switzerland distribution revenue and expenses that is not allocated to EA Labels. Our CODM reviews assets on a consolidated basis and not on a segment basis.

Information about our total net revenue by revenue composition for the three and six months ended September 30, 2013 and 2012 is presented below (in millions):

	Three Months Ended September 30,				Six Months Ended September 30,
	2013		2012		2013		2012
Publishing and other	$	223	$	365	$	675	$	957
Wireless, Internet-derived, advertising (digital)	450		324		932		666
Distribution	22		22		37		43
Net revenue	$	695	$	711	$	1,644	$	1,666

Information about our operations in North America and internationally as of and for the three and six months ended September 30, 2013 and 2012 is presented below (in millions): 

	Three Months Ended September 30,				Six Months Ended September 30,
	2013		2012		2013		2012
Net revenue from unaffiliated customers
North America	$	303	$	329	$	698	$	779
International	392		382		946		887
Net revenue	$	695	$	711	$	1,644	$	1,666

	As of September 30,
	2013		2012
Long-lived assets
North America	$	1,981	$	2,109
International	493		509
Total	$	2,474	$	2,618

We attribute net revenue from external customers to individual countries based on the location of the legal entity that sells the products and/or services. Note that revenue attributed to the legal entity that makes the sale is often not the country where the consumer resides. For example, revenue generated in Switzerland includes revenue derived from Internet game downloads by consumers who reside outside of Switzerland, and some of these consumers reside outside of Europe. Revenue generated in Switzerland during the three and six months ended September 30, 2013 represented $136 million and $539 million, or 20 percent and 33 percent, of our total net revenue, respectively. Revenue generated in Switzerland during the three and six months ended September 30, 2012 represented $92 million and $365 million, or 13 percent and 22 percent, of our total net revenue, respectively. Revenue generated in the United States represents over 99 percent of our total North America net revenue. There were no other countries with net revenue greater than 10 percent.

Our direct sales to GameStop Corp. represented approximately 16 percent and 12 percent of total net revenue during the three and six months ended September 30, 2013, respectively. Our direct sales to GameStop Corp. represented approximately 17 percent and 15 percent of total net revenue for the three and six months ended September 30, 2012, respectively.