Electronic Arts 2004 Annual Report Download - page 85

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The following table presents comparative information showing the eÅects that non-amortization of goodwill
would have had on the Consolidated Statements of Operations for Ñscal 2002 (in thousands, except per share
amounts):
As of March 31, 2002
Class A Class B
Class A Common Common
Common Stock Ì Stock Ì Basic
Stock Ì Basic Diluted and Diluted
Reported net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $124,256 $101,509 $(22,747)
Goodwill amortization, net of tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,204 9,056 852
Adjusted net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $132,460 $110,565 $(21,895)
Reported earnings (loss) per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.45 $ 0.35 $ (3.77)
Goodwill amortization, net of tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.03 0.04 0.14
Adjusted earnings (loss) per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.48 $ 0.39 $ (3.63)
During Ñscal 2004, we recorded an additional $1.2 million of goodwill as a result of our acquisition of Square
Co., Ltd.'s 30 percent interest in Electronic Arts Square K.K. See Note 4 of the Notes to Consolidated
Financial Statements for further discussion on this joint venture termination. Additionally, we recorded an
additional $3.0 million of goodwill in Ñscal 2004 as a result of our acquisition of Studio 33 (UK) Limited and
NuFX, Inc. Goodwill information is as follows (in thousands):
EÅects of
Foreign
As of Goodwill Currency As of
March 31, 2003 Acquired Translation March 31, 2004
Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $86,031 $4,161 $1,785 $91,977
EÅects of
Foreign
As of Goodwill Currency As of
March 31, 2002 Acquired Translation March 31, 2003
Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $69,050 $16,139 $842 $86,031
Finite-lived intangible assets net of accumulated amortization as of March 31, 2004 and 2003, of $18.5 million
and $21.3 million, respectively, include costs for obtaining tradenames. Amortization of intangibles for the
Ñscal years ended March 31, 2004, 2003 and 2002 was $2.7 million, $7.5 million and $12.3 million,
respectively. Finite-lived intangible assets are amortized using the straight-line method over the lesser of their
estimated useful lives or the agreement terms, typically from two to twelve years. As of March 31, 2004 and
March 31, 2003, the weighted-average remaining useful life for Ñnite-lived intangible assets was
approximately 7.5 years and 8.5 years, respectively.
When indicators are present and circumstances warrant, we perform impairment tests under SFAS No. 144 to
evaluate the recoverability of our long-lived assets and remaining Ñnite-lived identiÑable intangibles utilized
in our business. This test was performed in the fourth quarter of Ñscal 2003 in conjunction with the overall
valuation of the EA.com legal entity and our Class B common stock and resulted in an impairment of
$12.4 million. Please see Note 6 to Consolidated Financial Statements.
70