Electronic Arts 2004 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2004 Electronic Arts annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 119

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119

business had occurred at the beginning of each of the periods presented (in thousands, except per share
data):
Year Ended March 31,
2003 2002
Net income:
As reported ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $317,097 $101,509
Pro forma ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $317,097 $101,509
Earnings per share:
As reported ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1.17 $ 0.45
Pro forma ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1.12 $ 0.37
Number of shares used in computation:
As reported ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 281,978 273,665
Add: conversion of AOL and News Corp Class BÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,028 1,368
Pro forma ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 283,006 275,033
All restructuring charges recorded prior to December 31, 2002 were recorded in accordance with Emerging
Issues Task Force (""EITF'') No. 94-3, ""Liability Recognition for Certain Employee Termination BeneÑts
and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring)'', EITF No. 95-3,
""Recognition of Liabilities in Connection with a Purchase Business Combination'', and StaÅ Accounting
Bulletin (""SAB'') No. 100, ""Restructuring and Impairment Charges''. All restructuring charges recorded
subsequent to December 31, 2002 were recorded in accordance with SFAS No. 146, ""Accounting for Costs
Associated with Exit or Disposal Activities''. Adjustments to the restructuring reserves will be made in future
periods, if necessary, based upon the then-current events and circumstances.
For further discussion on our restructurings and asset impairment charges, please see Note 6 in our
Consolidated Financial Statements, included in item 8 hereof.
Interest and Other Income, Net
Interest and other income, net, for Ñscal years 2004 and 2003 (in thousands):
March 31, % of Net March 31, % of Net
2004 Revenue 2003 Revenue $ Change % Change
$20,963 0.7% $5,222 0.2% $15,741 301.4%
Interest and other income, net, in Ñscal 2004 increased from Ñscal 2003 primarily due to:
䡵Interest income increased $7.9 million in Ñscal 2004 as a result of higher average cash balances in
the current year.
䡵During the year ended March 31, 2003, we recorded $10.6 million for an other-than-temporary
impairment of investments in aÇliates, oÅset by income of $5.5 million recorded from our equity
investment in Square EA, LLC.
Income Taxes
Income taxes for Ñscal years 2004 and 2003 (in thousands):
March 31, EÅective March 31, EÅective
2004 Tax Rate 2003 Tax Rate % Change
$219,268 27.5% $143,049 31.0% 53.3%
Our eÅective income tax rate reÖects tax beneÑts derived from signiÑcant operations outside the U.S., which
are generally taxed at rates lower than the U.S. statutory rate of 35 percent. The eÅective income tax rate was
27.5 percent for Ñscal 2004 and 31.0 percent for Ñscal 2003. The reduced eÅective income tax rate in Ñscal
33