Electronic Arts 2000 Annual Report Download - page 20

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EA Core Adjustments and
Year Ended March 31, 1999 (excl. EA.com) EA.com Eliminations Electronic Arts
Net revenues from unaffiliated customers $ 1,204,689 $ 17,174 $ – $ 1,221,863
Group sales 985 – (985)(a) –
Total net revenues 1,205,674 17,174 (985) 1,221,863
Cost of goods sold from unaffiliated customers 624,252 3,571 – 627,823
Group cost of goods sold – 985 (985) –
Total cost of goods sold 624,252 4,556 (985) 627,823
Gross profit 581,422 12,618 – 594,040
Operating expenses:
Marketing and sales 161,029 2,378 – 163,407
General and administrative 74,995 1,224 – 76,219
Research and development 181,245 8,050 9,846(b) 199,141
Network development and support – 9,846 (9,846) –
Charge for acquired in-process technology 44,115 – – 44,115
Amortization of intangibles 5,880 – – 5,880
Total operating expenses 467,264 21,498 – 488,762
Operating income (loss) 114,158 (8,880) – 105,278
Interest and other income, net 13,180 – – 13,180
Income (loss) before provision for income
taxes and minority interest 127,338 (8,880) – 118,458
Provision for income taxes 45,414 – – 45,414
Income (loss) before minority interest 81,924 (8,880) – 73,044
Minority interest in consolidated joint venture (172) – – (172)
Net income (loss) $ 81,752 $ (8,880) $ – $ 72,872
(a) REPRESENTS ELIMINATION OF INTERCOMPANY SALES OF ELECTRONIC ARTS PACKAGED GOODS PRODUCTS TO EA.COM; AND REPRESENTS ELIMINATION OF ROYALTIES PAID TO ELECTRONIC ARTS BY EA.COM FOR
INTELLECTUAL PROPERTY RIGHTS.
(b) REPRESENTS RECLASSIFICATION OF NETWORK DEVELOPMENT AND SUPPORT TO RESEARCH AND DEVELOPMENT.
The increase in net revenues for EA.com for fiscal 2000 as compared to fiscal 1999 was attributable to the following:
•Higher online revenues from increased subscriptions to
Ultima Online.
•Higher internet-based e-Commerce revenues.
•Partially offset by lower
Ultima Online
packaged product revenues due to the decrease in the average selling price.
MD&A
18