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in-process research and development and $37,797,000 was allocated to other intangible assets. Amounts
allocated to other intangibles include goodwill of $16,927,000, existing technology of $12,505,000, and
other intangibles of $8,365,000.The allocation of intangible assets is being amortized on a straight-line
basis over lives ranging from three to seven years.
Purchased in-process research and development includes the value of products in the development stage
that are not considered to have reached technological feasibility or to have alternative future use. Accord-
ingly, this non-recurring item was expensed in the Consolidated Statement of Operations upon consummation
of the acquisition.The non-recurring charge for in-process research and development increased diluted loss
per share by approximately $0.01 and $0.07 in the fiscal year 2001 for Class A and Class B, respectively.
Pogo had various projects in progress at the time of the acquisition. As of the acquisition date, costs to
complete Pogo projects acquired were expected to be approximately $1,200,000 in future periods. During
fiscal 2002, all of these development projects were completed and launched on Pogo gamesites. In con-
junction with the acquisition of Pogo, the Company accrued approximately $100,000 related to direct
transaction costs and other related costs.
The purchase price for the Pogo transaction was allocated to assets acquired and liabilities assumed as
set forth below (in thousands):
Current assets $3,048
Fixed assets 4,998
Other long-term assets 1,969
In-process technology 2,719
Goodwill and other intangibles 37,797
Liabilities (7,198)
Total cash paid $43,333
The following table reflects unaudited pro forma combined results of operations of the Company and Pogo
on the basis that the acquisition had taken place on April 1, 1999 (in thousands, except per share data):
AS REPORTED PRO FORMA
FISCAL YEAR ENDED MARCH 31, 2001
Net revenues $ 1,322,273 $ 1,336,654
Class A common stock:
Net income (loss):
Basic $ 11,944 $ 475
Diluted $ (11,082) $ (26,292)
Net income (loss) per share:
Basic $ 0.09 $ 0.00
Diluted $ (0.08) $ (0.20)
Number of shares used in computation:
Basic 131,404 131,404
Diluted 132,056 132,056
Class B common stock:
Net loss, net of retained interest in EA.com $ (23,026) $ (26,767)
Net loss per share:
Basic $ (3.83) $ (4.45)
Diluted $ (3.83) $ (4.45)
Number of shares used in computation:
Basic 6,015 6,015
Diluted 6,015 6,015
FISCAL YEAR ENDED MARCH 31, 2000
Net revenues $ 1,420,011 $ 1,422,340
Net income $ 116,751 $ 107,285
Net income per share:
Basic $ 0.93 $ 0.85
Diluted $ 0.88 $ 0.81
Number of shares used in computation:
Basic 125,660 125,660
Diluted 132,742 132,742
In management’s opinion, the unaudited pro forma combined results of operations are not indicative of the
actual results that would have occurred had the acquisition been consummated at the beginning of fiscal 2000
or of future operations of the combined companies under the ownership and management of the Company.
EA 2002 AR 59