Segment Information

6 Months Ended

Sep. 30, 2011

Segment Information [Abstract]

Segment Information

(17) SEGMENT INFORMATION

Our reporting segments are 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.

Prior to the second quarter of fiscal 2012, our business was organized around three labels, EA Games, EA SPORTS and EA Play, as well as EA Interactive ("EAI"). Our CODM regularly received separate financial information for the distinct businesses within the EAI organization. Accordingly, our CODM reviewed the results of the three Labels, as well as the businesses in EAI, including EA Mobile, the combined results of Pogo and Playfish, and Hasbro, in assessing performance and allocating resources amongst these six organizations.

During the second quarter of fiscal 2012, we announced a recommitment of our focus on building our intellectual properties and franchises into businesses connected to the consumer on a year-round basis, growing our digital business and releasing Origin, our online commerce and content delivery system. In connection with this and our acquisition of PopCap, we implemented a number of changes to our management reporting structure, including expanding our three labels to four, with BioWare now considered a label separate from the EA Games Label, and aggregating these four labels into an overall EA Label organization with a President of EA Labels reporting directly to our CODM. In addition, our EAI business now permanently reports directly to our CODM (previously our EAI business reported into our Chief Operating Officer). The President of the EA Labels and the Executive Vice President of EAI are now responsible for allocating resources within their organizations. The CODM currently reviews the disaggregated and aggregated results of the EA Labels and EAI organizations to assess overall performance and allocate resources between these two organizations while to a lesser degree, our CODM also reviews results based on geographic performance and revenue composition. Because the EA Labels and EAI operating segments have similar economic characteristics, products, and distribution methods, they have been aggregated together into the EA Brands reportable segment.

The following table summarizes the financial performance of the EA Brands segment and a reconciliation of the EA Brands segment's profit to our consolidated operating income for the three and six months ended September 30, 2011 and 2010. Prior periods reported below have been restated to reflect our current EA Brands reporting segment structure (in millions):

	Three Months Ended September 30,						Six Months Ended September 30,
	2011			2010			2011			2010
EA Brands segment:
Net revenue before revenue deferral	$	1,012		$	863		$	1,518		$	1,380
Depreciation and amortization		(15	)		(14	)		(30	)		(28	)
Other expenses		(805	)		(680	)		(1,334	)		(1,166	)
EA Brands segment profit		192			169			154			186
Reconciliation to consolidated operating loss:
Other:
Revenue deferral		(800	)		(689	)		(1,050	)		(1,008	)
Recognition of revenue deferral		481			436			1,206			1,031
Other net revenue		22			21			40			43
Depreciation and amortization		(32	)		(29	)		(58	)		(61	)
Acquisition-related contingent consideration		(17	)		28			(19	)		26
Restructuring and other charges		1			(6	)		(17	)		(8	)
Stock-based compensation		(43	)		(43	)		(81	)		(90	)
Other expenses		(178	)		(139	)		(322	)		(273	)
Consolidated operating loss	$	(374	)	$	(252	)	$	(147	)	$	(154	)

EA Brands segment profit differs from consolidated operating loss primarily due to the exclusion of (1) certain corporate and other functional costs that are not allocated to EA Brands, (2) the deferral of certain net revenue related to online-enabled packaged goods and digital content (see Note 10 of the Notes to Condensed Consolidated Financial Statements), and (3) our Switzerland distribution revenue that has not been allocated to EA Brands. Our CODM reviews assets on a consolidated basis and not on a segment basis.

As we continue to evolve our business and more of our products are delivered to consumers digitally via the Internet, management places a greater emphasis and focus on assessing its performance through a review of net revenue by revenue composition rather than net revenue by platform. Information about our total net revenue by revenue composition for the three and six months ended September 30, 2011 and 2010 is presented below (in millions):

	Three Months Ended September 30,				Six months Ended September 30,
	2011		2010		2011		2010
Publishing and other	$	450	$	441	$	1,097	$	1,027
Wireless, Internet-derived, advertising (digital)		234		161		466		337
Distribution		31		29		151		82
Net revenue	$	715	$	631	$	1,714	$	1,446

Information about our operations in North America, Europe and Asia as of and for the three and six months ended September 30, 2011 and 2010 is presented below (in millions):

	Three Months Ended September 30,				Six Months Ended September 30,
	2011		2010		2011		2010
Net revenue from unaffiliated customers
North America	$	337	$	327	$	838	$	778
Europe		328		262		766		579
Asia		50		42		110		89
Total	$	715	$	631	$	1,714	$	1,446
					As of September 30,
					2011		2010
Long-lived assets
North America					$	2,161	$	1,306
Europe						438		431
Asia						49		35
Total					$	2,648	$	1,772

Our direct sales to GameStop Corp. represented approximately 16 percent and 17 percent of total net revenue for the three and six months ended September 30, 2011, respectively. Our direct sales to GameStop Corp. represented approximately 19 percent and 17 percent of total net revenue for the three and six months ended September 30, 2010, respectively. Our direct sales to Wal-Mart Stores Inc. did not exceed 10 percent of total net revenue for the three and six months ended September 30, 2011 and the three months ended September 30, 2010. Our direct sales to Wal-Mart Stores Inc. represented approximately 10 percent of total net revenue for the six months ended September 30, 2010.