Segment Information

9 Months Ended

Dec. 31, 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 year 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 year 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 reported directly to our CODM (previously our EAI business reported into our Chief Operating Officer). Through the third quarter of fiscal year 2012, the President of the EA Labels and the Executive Vice President of EAI are were responsible for allocating resources within their organizations. The CODM 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 revenue performance. 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 nine months ended December 31, 2011 and 2010. Prior periods reported below have been restated to reflect our current EA Brands reporting segment structure (in millions):

	Three Months Ended December 31,						Nine Months Ended December 31,
	2011			2010			2011			2010
EA Brands segment:
Net revenue before revenue deferral	$	1,613		$	1,358		$	3,131		$	2,746
Depreciation and amortization		(13	)		(14	)		(43	)		(42	)
Other expenses		(957	)		(940	)		(2,291	)		(2,124	)
EA Brands segment profit		643			404			797			580
Reconciliation to consolidated operating loss:
Other:
Revenue deferral		(1,370	)		(995	)		(2,420	)		(2,003	)
Recognition of revenue deferral		780			638			1,986			1,669
Other net revenue		38			52			78			87
Depreciation and amortization		(35	)		(29	)		(93	)		(90	)
Acquisition-related contingent consideration		11			(1	)		(8	)		25
Restructuring and other charges		-			(154	)		(17	)		(162	)
Stock-based compensation		(48	)		(46	)		(129	)		(136	)
Other expenses		(202	)		(172	)		(524	)		(427	)
Consolidated operating loss	$	(183	)	$	(303	)	$	(330	)	$	(457	)

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 for additional information regarding deferred net revenue (packaged goods and digital content)), and (3) our Switzerland distribution revenue and expenses that is not 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 nine months ended December 31, 2011 and 2010 is presented below (in millions):

	Three Months Ended December 31,				Nine Months Ended December 31,
	2011		2010		2011		2010
Publishing and other	$	738	$	767	$	1,835	$	1,794
Wireless, Internet-derived, advertising (digital)		274		195		740		532
Distribution		49		91		200		173
Net revenue	$	1,061	$	1,053	$	2,775	$	2,499

Information about our operations in North America, Europe and Asia as of and for the three and nine months ended December 31, 2011 and 2010 is presented below (in millions):

	Three Months Ended December 31,				Nine Months Ended December 31,
	2011		2010		2011		2010
Net revenue from unaffiliated customers
North America	$	500	$	528	$	1,338	$	1,306
Europe		505		477		1,271		1,056
Asia		56		48		166		137
Net revenue	$	1,061	$	1,053	$	2,775	$	2,499

	As of December 31,
	2011		2010
Long-lived assets
North America	$	2,179	$	1,286
Europe		438		449
Asia		48		34
Total	$	2,665	$	1,769

Our direct sales to GameStop Corp. represented approximately 14 percent and 15 percent of total net revenue for the three and nine months ended December 31, 2011, respectively. Our direct sales to GameStop Corp. represented approximately 14 percent and 15 percent of total net revenue for the three and nine months ended December 31, 2010, respectively. Our direct sales to Wal-Mart Stores Inc. did not exceed 10 percent of total net revenue for the three and nine months ended December 31, 2011. Our direct sales to Wal-Mart Stores Inc. represented approximately 10 percent of total net revenue for the three and nine months ended December 31, 2010.