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(18) SEGMENT INFORMATION
Statement of Financial Accounting Standards No. 131 (“SFAS 131”),
“Disclosures About Segments of an
Enterprise and Related Information”
,establishes standards for the reporting by public business enterprises
of information about product lines, geographic areas and major customers.The method for determining
what information to report is based on the way that management organizes the operating segments within
the Company for making operational decisions and assessments of financial performance.
The Company’s chief operating decision maker is considered to be the Company’s Chief Executive Offi-
cer (“CEO”).The CEO reviews financial information presented on a consolidated basis accompanied by
disaggregated information about revenues by geographic region and by product lines for purposes of making
operating decisions and assessing financial performance.
The Company operates in two principal business segments globally:
|•••»EA Core business segment: creation, marketing and distribution of entertainment software.
|•••»EA.com business segment: creation, marketing and distribution of entertainment software which can be
played or sold online, ongoing management of subscriptions of online games and website advertising.
Please see the discussion regarding segment reporting in the MD&A.
Information about Electronic Arts business segments is presented below for the fiscal years ended March
31, 2002, 2001 and 2000 (in thousands):
EA CORE ADJUSTMENTS
(EXCLUDING AND ELECTRONIC
YEAR ENDED MARCH 31, 2002 EA.COM) EA.COM ELIMINATIONS ARTS
Net revenues from
unaffiliated customers $1,647,502 $ 77,173 $ — $ 1,724,675
Group sales 4,016 — (4,016)(a) —
Total net revenues 1,651,518 77,173 (4,016) 1,724,675
Cost of goods sold from
unaffiliated customers 794,738 12,873 — 807,611
Group cost of goods sold —4,016 (4,016)(a) —
Total cost of goods sold 794,738 16,889 (4,016) 807,611
Gross profit 856,780 60,284 — 917,064
Operating expenses:
Marketing and sales 202,749 20,496 17,864(c) 241,109
General and administrative 96,919 10,140 — 107,059
Research and development 257,762 59,892 70,082(b) 387,736
Network development and support —59,483 (59,483)(b) —
Customer relationship management —10,599 (10,599)(b) —
Carriage fee —17,864 (17,864)(c) —
Amortization of intangibles 12,888 12,530 — 25,418
Restructuring and asset
impairment charges —20,303 — 20,303
Total operating expenses 570,318 211,307 — 781,625
Operating income (loss) 286,462 (151,023) — 135,439
Interest and other
income (expense), net 13,472 (624) — 12,848
Income (loss) before provision
for income taxes and
minority interest 299,934 (151,647) — 148,287
Provision for income taxes 45,969 — — 45,969
Income (loss) before
minority interest 253,965 (151,647) — 102,318
Minority interest in
consolidated joint venture (809) — — (809)
Net income (loss) before retained
interest in EA.com $253,156 $ (151,647) $ — $ 101,509
Interest income $16,641 $ 50 $ — $ 16,691
Depreciation and amortization 51,673 59,228 — 110,901
Identifiable assets 1,529,422 169,952 — 1,699,374
Capital expenditures 38,406 13,112 — 51,518
EA 2002 AR
64