Electronic Arts 2016 Annual Report Download - page 69

Download and view the complete annual report

Please find page 69 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
APPENDIX A
CALCULATION OF NON-GAAP FINANCIAL MEASURES
Fiscal Year Ended
March 31, 2016
GAAP net revenue ............................................................ $ 4,396
Change in deferred net revenue (online-enabled games) ............................ 170
Non-GAAP net revenue ........................................................ $ 4,566
GAAP gross profit ............................................................ $ 3,042
Acquisition-related expenses ................................................. 47
Change in deferred net revenue (online-enabled games) ............................ 170
Stock-based compensation ................................................... 2
Non-GAAP gross profit ........................................................ $ 3,261
GAAP operating expenses ...................................................... $ 2,144
Acquisition-related expenses ................................................. (7)
Stock-based compensation ................................................... (176)
Non-GAAP operating expenses .................................................. $ 1,961
GAAP net income ............................................................. $ 1,156
Acquisition-related expenses ................................................. 54
Amortization of debt discount and loss on conversion of notes ...................... 27
Change in deferred net revenue (online-enabled games) ............................ 170
Stock-based compensation ................................................... 178
Income tax adjustments ..................................................... (567)
Non-GAAP net income ........................................................ $ 1,018
GAAP diluted earnings per share ................................................ $ 3.50
Non-GAAP diluted earnings per share ........................................... $ 3.14
Number of diluted shares used in computation GAAP .............................. 330
Convertible Note Hedge ..................................................... (6)
Non-GAAP .................................................................. 324
About Non-GAAP Financial Measures
The Company’s management team is evaluated on the basis of non-GAAP financial measures and these measures
also facilitate comparisons of the Company’s performance to prior periods.
The Company’s target and actual non-GAAP financial measures are calculated with reference to the same
adjustments to GAAP financial measures. These adjustments to the GAAP financial measures exclude the
following items (other than shares from the Convertible Bond Hedge, which are included):
• Acquisition-related expenses
• Amortization of debt discount and loss on conversion of notes
• Change in deferred net revenue (online-enabled games)
• Income tax adjustments
• Shares from Convertible Bond Hedge
• Stock-based compensation
We believe it is appropriate to exclude these items for the following reasons:
Acquisition-Related Expenses. GAAP requires expenses to be recognized for various types of events associated
with a business acquisition. These events include expensing acquired intangible assets, including acquired
in-process technology, post-closing adjustments associated with changes in the estimated amount of contingent
A-1