Electronic Arts 2011 Annual Report Download - page 174

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Our business is currently organized around three operating labels, EA Games, EA SPORTS and EA Play, as well
as EA Interactive. Our CODM regularly receives separate financial information for distinct businesses within the
EA Interactive organization, including EA Mobile, the combined results of Pogo and Playfish, and Hasbro.
Accordingly, in assessing performance and allocating resources, our CODM reviews the results of our three
Labels, as well as the operating segments in EA Interactive, including EA Mobile, the combined results of Pogo
and Playfish, and Hasbro. Due to their similar economic characteristics, products, and distribution methods, EA
Games, EA SPORTS, EA Play, and Hasbro’s results are aggregated into one Reportable Segment (the “Label
segment”) as shown below. The remaining operating segments’ results are not material for separate disclosure
and are included in the reconciliation of Label segment profit to our consolidated operating loss below. In
addition to assessing performance and allocating resources based on our operating segments as described herein,
to a lesser degree, our CODM also reviews results based on geographic performance.
The following table summarizes the financial performance of the Label segment and a reconciliation of the Label
segment’s profit to our consolidated operating loss for the fiscal years ended March 31, 2011, 2010 and 2009 (in
millions):
Year Ended March 31,
2011 2010 2009
Label segment:
Net revenue before revenue deferral ................................... $3,326 $ 3,692 $ 3,746
Depreciation and amortization ........................................ (42) (53) (67)
Other expenses .................................................... (2,508) (2,929) (3,284)
Label segment profit ................................................. 776 710 395
Reconciliation to consolidated operating loss:
Other:
Revenue deferral .................................................. (2,769) (2,358) (1,077)
Recognition of revenue deferral ....................................... 2,530 1,853 1,203
Other net revenue .................................................. 502 467 340
Depreciation and amortization ........................................ (131) (133) (121)
Other expenses .................................................... (1,220) (1,225) (1,567)
Consolidated operating loss ............................................ $ (312) $ (686) $ (827)
Label segment profit differs from consolidated operating loss primarily due to the exclusion of (1) certain
corporate and other functional costs that are not allocated to the Labels, (2) the deferral of certain net revenue
related to online-enabled packaged goods and digital content (see Note 9 of the Notes to Consolidated Financial
Statements), and (3) the results of EA Mobile, the combined results of Pogo and Playfish, and our Switzerland
distribution revenue that has not been allocated to the Labels. Our CODM reviews assets on a consolidated basis
and not on a segment basis.
98