Electronic Arts 2001 Annual Report Download - page 46

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2001 AR
(In thousands, except for per share amounts):
Years Ended March 31, 2000 1999
Net income $ 116,751 $ 72,872
Shares used to compute net income per share:
Weighted-average common shares 125,660 121,495
Dilutive stock equivalents 7,082 5,050
Dilutive potential common shares 132,742 126,545
Net income per share:
Basic $ 0.93 $ 0.60
Diluted $ 0.88 $ 0.58
The Diluted EPS calculation for Class A common stock, presented above, includes the potential dilution from
the conversion of Class B common stock to Class A common stock in the event that the initial public offering for
Class B common stock does not occur. Net loss used for the calculation of Diluted EPS for Class A common stock is
$11,082,000 for the fiscal year ended March 31, 2001. This net loss includes the remaining 15% interest in EA.com,
which is directly attributable to outstanding Class B shares owned by third parties, which would be included in the
Class A common stock EPS calculation in the event that the initial public offering for Class B common stock does
not occur.
Due to the net loss attributable for the twelve months ended March 31, 2001 on a diluted basis to Class A
Stockholders, stock options have been excluded from the Diluted EPS calculation. Had net income been reported
for this period, an additional 5,971,000 shares would have been added to diluted potential common shares for
Class A common stock for the twelve months ended March 31, 2001.
Due to the net loss attributable for the twelve months ended March 31, 2001 on a diluted basis to Class B
Stockholders, stock options have been excluded from the Diluted EPS calculation. Had net income been reported
for this period, an additional 472,000 shares would have been added to diluted potential common shares for Class
B common stock for the twelve months ended March 31, 2001.
Excluded from the above computation of weighted-average shares for Class A diluted EPS for the fiscal years
ended March 31, 2001, 2000 and 1999 were options to purchase 2,705,000, 229,000 and 645,000 shares of common
stock, respectively, as the options’ exercise price was greater than the average market price of the common shares.
For the fiscal year ended March 31, 2001, the weighted-average exercise price of the respective options was $48.63.
Class B common stock, authorized on March 22, 2000, was excluded from the Company’s calculations of basic and
diluted EPS because its impact on the calculations was immaterial for the fiscal year ended March 31, 2000.
(n) Employee Benefits The Company has a 401(k) Plan covering substantially all of its U.S. employees. The 401(k)
Plan permits the Company to make discretionary contributions to employees’ accounts based on the Company’s
financial performance. The Company contributed $1,127,000, $1,799,000 and $2,092,000 to the Plan in fiscal
2001, fiscal 2000 and fiscal 1999, respectively.
(o) Stock-based Compensation The Company accounts for stock-based awards to employees using the intrinsic
value method in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
Employees” (“APB 25”) and Financial Accounting Standards Board issued Interpretation No. 44 “Accounting for
Certain Transactions Involving Stock Compensation (an interpretation of APB Opinion No. 25)” (“FIN 44”). The
Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 123
“Accounting for Stock-Based Compensation” (“SFAS 123”).