EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

ELECTRONIC ARTS REPORTS FISCAL THIRD QUARTER RESULTS

Number One Revenue Share on the PlayStation 2, Xbox, PSP System and PC in 2005

EA to Acquire JAMDAT Mobile, Inc.

 

REDWOOD CITY, CA – February 2, 2006 – 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.

 

1


    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.

 

2


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 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.

 

For additional information, please contact:

 

Tricia Gugler   Jeff Brown
Director, Investor Relations   Vice President, Corporate Communications
650-628-7327   650-628-7922

 

3


ELECTRONIC ARTS INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(in millions, except per share data)

 

     Three Months Ended
December 31,


   Nine Months Ended
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 Ended
December 31,


   Nine Months Ended
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,
2005


   March 31,
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 Ended
December 31,


    Nine Months Ended
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
FY05


    Q4
FY05


    Q1
FY06


    Q2
FY06


    Q3
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
FY05


    Q4
FY05


    Q1
FY06


    Q2
FY06


    Q3
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
FY05


    Q4
FY05


    Q1
FY06


    Q2
FY06


    Q3
FY06


    YOY %
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
FY05


    Q4
FY05


    Q1
FY06


    Q2
FY06


    Q3
FY06


    YOY %
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
FY05


   Q4
FY05


   Q1
FY06


   Q2
FY06


   Q3
FY06


   YOY %
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
December 31,


    Nine Months Ended
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

   PlayStation® 2

•      Harry Potter and the Goblet of Fire

   PlayStation 2

•      James Bond 007: From Russia With Love

   PlayStation 2

•      NCAA® March Madness® 06

   PlayStation 2

•      Need for Speed Most Wanted

   PlayStation 2

•      Need for Speed Most Wanted Black Edition

   PlayStation 2

•      SSX on Tour

   PlayStation 2

•      The Sims 2

   PlayStation 2

•      Battlefield 2: Modern Combat

   Xbox®

•      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

•      Madden NFL 06

   XBOX 360

•      NBA Live 06

   XBOX 360

•      Need for Speed Most Wanted

   XBOX 360

•      Tiger Woods PGA TOUR® 06

   XBOX 360

•      Harry Potter and the Goblet of Fire

   Nintendo GameCube

•      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

   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 2 Holiday Edition

   PC

•      The Sims 2 Holiday Party Pack

   PC

•      The Sims Complete Collection

   PC

•      FIFA 06

   PSP

•      Harry Potter and the Goblet of Fire

   PSP

•      Marvel Nemesis: Rise of the Imperfects

   PSP

•      NBA Live 06

   PSP

•      Need for Speed Most Wanted

   PSP

•      SSX on Tour

   PSP

•      The Lord of the Rings Tactics

   PSP

•      The Sims 2

   PSP

•      Harry Potter and the Goblet of Fire

   Game Boy® Advance

•      Need for Speed Most Wanted

   Game Boy Advance

•      The Sims 2

   Game Boy Advance

•      Burnout Legends

   Nintendo DS

•      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® 4

   PlayStation 2

•      Resident Evil® 4 Premium Edition

   PlayStation 2

•      Half Life® 2**

   Xbox

•      Black & White 2

   PC

 


** Distribution Deals

 

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