Electronic Arts 2016 Annual Report Download - page 33

Download and view the complete annual report

Please find page 33 of the 2016 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 188

  • 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
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188

Proxy Statement
COMPENSATION DISCUSSION AND ANALYSIS
OVERVIEW
Our Compensation Discussion and Analysis (“CD&A”) describes and discusses the fiscal 2016 compensation
paid to our named executive officers (“NEOs”), and is organized into six sections:
• Executive Summary
• Compensation Principles and Say on Pay Vote
• The Process for Determining Our NEOs’ Compensation
• Our NEOs’ Fiscal 2016 Compensation
• Our Elements of Pay
• Other Compensation Information
EXECUTIVE SUMMARY
Fiscal 2016 Summary of EA’s Business
Fiscal 2016 was a very good year for EA. Our core strategies delivered award-winning games and services to our
players and deep player engagement. This, together with great execution, generated strong financial results for
the Company.
We were the number one publisher on PlayStation®4 and Xbox One consoles and the number four publisher on
mobile in the Western World for calendar year 2015 based on available sources and EA estimates. We
accomplished these results while controlling operating expenses through disciplined cost management. Our
financial results reflect these accomplishments, as we exceeded our net revenue and earnings per share guidance
for fiscal 2016, drove higher gross margins, increased our cash provided by operations and invested in new
products and services for the future. As part of our commitment to return value to our stockholders, we
authorized a new $500 million share repurchase program in February 2016 and completed this program in March
2016. This program was incremental to the two-year $1 billion dollar program authorized in May 2015.
GAAP Financial and Operating Highlights
• We generated $4.40 billion in net revenue and delivered $3.50 in diluted earnings per share.
• Our digital net revenue increased to $2.41 billion in fiscal 2016 and represented 55% of our total net
revenue for fiscal 2016.
• We delivered net income of $1.16 billion and operating cash flow of $1.22 billion, both records for a
fiscal year.
• Operating profit margins were 20.4%.
• Mobile net revenue of $548 million was a record for a fiscal year.
•Madden NFL 16 was the #1 sports title in the U.S. for calendar year 2015.
• We repurchased 15.7 million shares in fiscal 2016 for $1.0 billion.
•Star Wars: Battlefront sold in over 14 million copies in fiscal 2016.
The financial performance, operational achievements and other fiscal year events summarized above provide
context for the compensation decisions made by the Compensation Committee and Board of Directors in fiscal
2016 as we continue to structure our executive compensation program to align with pay-for-performance
considerations. The Company’s executive compensation program is designed to reward our officers for the
achievement of specific Company-wide financial objectives, as well as the creation of long-term stockholder
value.
25