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ANDREW WILSON, CEO
SAFE HARBOR STATEMENT
This presentation contains forward-looking statements that are subject to change. Statements including words such as
“anticipate,” "believe,” “estimate” or “expect” and statements in the future tense are forward-looking statements. These forward-
looking statements are preliminary estimates and expectations based on current information and are subject to business and
economic risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations
set forth in the forward-looking statements.
Some of the factors which could cause the Company’s results to differ materially from its expectations include the following:
sales of the Company’s titles; the Company’s ability to manage expenses; the competition in the interactive entertainment
industry; the effectiveness of the Company’s sales and marketing programs; timely development and release of the Company’s
products; the Company’s ability to realize the anticipated benefits of acquisitions; the consumer demand for, and the availability
of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences among competing
platforms; the Company’s ability to service and support digital product offerings, including managing online security; general
economic conditions; and other factors described in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2015.
These forward-looking statements are valid only as of May 17, 2016. Electronic Arts assumes no obligation to update these
forward-looking statements or information.
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A VIEW INTO
ELECTRONIC ARTS
MAY 17, 2016
10 YEARS AGO:
5 YEARS AGO:
TODAY:
Source: EA internal estimates
A RAPIDLY EXPANDING AUDIENCE
2.6BPLAYERS
1.5BPLAYERS
200M
PLAYERS
MORE
PLAYERS
MORE
TIME
MORE
PLATFORMS
MORE
GEOGRAPHIES
MORE
BUSINESS
MODELS
4%
OUR WORLD IS GROWING
2014 - 2017 Global Market Forecast(Consumer Revenue $B, CY)
Source: EA internal estimate,
NPD, App Annie
$75.9B
$85.1B$91.5B
$95.5B $96.6B
Data Notes:
[1] Mobile includes iOS, Google Play, 3rd-party Android app stores, Japan Social, Windows Phone and Feature phones
[2] PC includes PC Premium, PC F2P, Casual and Social and MMO Subs
[3] Console includes packaged goods, full game downloads and DLC from Gen 3/Gen 4 and Wii/Wii U, and PS+/XBL subscription;
EA Access is not included
2018E2016E20152014 2017E
CONSOLIDATION
IS UNDERWAY
TOP TITLES DRIVING
GREATER SHARE
FEWER COMPANIES
DRIVING THOSE
TITLES
OPPORTUNITY FOR
NETWORK MULTIPLIER
7
Digital
$96.6B
$60.6B$71.1B
2018E2017E
$79.0B
$95.5B
$84.6B
$91.5B
2016E
$15.3B $12.5B$14.0B$8.7B
PackagedGoods
$10.9B
$85.1B
$75.9B
$87.9B
20152014Data Notes:
[1] Digital includes full game downloads, extra content, micro transactions, PS+ and Xbox Live Gold Subscription, MMORPG subscription. EA Access
subscription is not included
[2] Platforms include PC, Console, Handheld, and Mobile. Emerging platforms such as OTT, Virtual Reality are not included
Source: EA internal estimate
9%
AND BECOMING MORE DIGITAL
2014 - 2017 Global Market Forecast(Consumer Revenue $B, CY)
GAME GENRES
MORE CONCENTRATED
INDUSTRY
DRIVERS
BRANDS RISING TO
THE TOP
SOCIAL
CONNECTION IS
KEY
DYNAMIC GAMEPLAY
THAT EVOLVES
$4.6B
FY16 NON-GAAP
NET REVENUE
31
GLOBAL LOCATIONS
8,400
PEOPLE WORLDWIDE
ELECTRONIC ARTS TODAY
PIONEERING
Acting with the curiosity and courage that it takes to experiment, innovate
and lead.
LEARNING
Listening, having humility and being open to new ways of
thinking. Challenging ourselves to grow and change as a company.
TEAMWORK
Committed to each other, and to the accountability and integrity
it takes to be a successful global team.
DETERMINATION
Bringing focus, drive and conviction to our actions. Thriving
on the journey, and being motivated to achieve excellence.
CREATIVITY
Striving to bring imagination, original ideas and excitement
to everything we do.
PASSION
We are at our best when we pursue what we love, and have
fun doing it.
WE VALUE
WE EXIST TO
INSPIRE
THE WORLD
TO PLAY
#1 MOST
DOWNLOADED
MOBILE PUBLISHER (CY15)
#1 PUBLISHER
ON HD CONSOLES
(FY16)
WHO WE ARE
300M+
REGISTERED PLAYERS IN
200 COUNTRIES
#1 FREE-TO-PLAY
SPORTS GAME
IN KOREA & CHINA
Source: App AnnieSource: NPD & EA Estimates Source: EA & Partner Estimates
TECHNOLOGY
PLATFORM
CORE
ENGINE
24/7/365
LIVE SERVICES
LEADING
IP PORTFOLIO
WHO WE ARE
PC FREE-TO-PLAYHD MOBILE
2 HOURS/DAY
PLAYED BY
STAR WARS GALAXY OF
HEROES PLAYERS IN FQ4
9.4M
PLAYERS IN BATTLEFIELD
FRANCHISE IN FQ4
1.5B
MATCHES PLAYED
IN FIFA16 IN FQ4
54M
UNIQUE PLAYERS IN EA
SPORTS GAMES IN FY16
PLAYER
ENGAGEMENT
Source: Internal EA metrics
OUR JOURNEY
FY13
NON-GAAP NET REVENUE:
$3,793M
NON-GAAP NET INCOME:
$264M
FREE CASH FLOW:
$218M
FY17E
NON-GAAP NET REVENUE:
$4,900M
NON-GAAP NET INCOME:
$1,117M
FREE CASH FLOW:
~$1,200M
EA GROWTH STRATEGY
CORE PORTFOLIO
PO
RT
FO
LI
O
FY18-20E FY21+EFY17E
FY17
MIRROR’S
EDGE CATALYST
FY17
EA SPORTS
FY17
BATTLEFIELD 1
FY17
TITANFALL 2
FY17
MASS EFFECT
ANDROMEDA
FY17
MOBILE
DIGITAL GROWTH
NEW ENGAGEMENT MODELS
GEOGRAPHIC GROWTH
GR
OW
TH
DR
IV
ER
S
PORTFOLIO GROWTH
EA GROWTH STRATEGY
CORE PORTFOLIO
PO
RT
FO
LI
O
FY18-20E FY21+EFY17E
DIFFERENTIATED FOR GROWTH
DIGITAL
GROWTH
NEW ENGAGEMENT
MODELS
GEOGRAPHIC
GROWTH
PORTFOLIO
GROWTH
GENRES
STUDIOS
PORTFOLIO GROWTH
ROMANIA
PLATFORMS
MOBILE CONSOLE PC
ACTION RPG CASUALSHOOTER PUZZLE SPORTSRACING STRATEGY & SIM
STREAMINGVR
TOP BRANDS
GEOGRAPHIC GROWTH
GLOBAL REACH CULTURALIZATION
& LOCAL FOCUS
PLATFORM
& DIGITAL
EXPERTISE
NEW ENGAGEMENT MODELS
NEW
ENGAGEMENT
MODELS
NEW ENGAGEMENT MODELS
IP PORTFOLIO
DIGITAL GROWTH
DIGITAL GROWTH
HOLIDAY
NFL DRAFT
SUPER BOWL
DA
ILY
AC
TIV
E U
SE
RS
(CO
NS
OL
ES
)
9/2015 10/2015 11/2015 12/2015 1/2016 2/2016 3/2016 4/2016
Source: Internal EA metrics
DIGITAL GROWTH
EA PLAYER
NETWORK
NE
TW
OR
K
DIGITAL GROWTH
NEW ENGAGEMENT MODELS
GEOGRAPHIC GROWTH
GR
OW
TH
DR
IV
ER
S
PORTFOLIO GROWTH
EA GROWTH STRATEGY
CORE PORTFOLIO
PO
RT
FO
LI
O
FY18-20E FY21+EFY17E
THE EA
PLAYER NETWORK
OUR OPPORTUNITY
APPENDIX
NON-GAAP FINANCIAL MEASURES
Electronic Arts uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to beconsidered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may bedifferent from non-GAAP financial measures used by other companies. The non-GAAP financial measures used by Electronic Arts include: non-GAAP netrevenue, non-GAAP gross profit, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share andnon-GAAP diluted shares. These non-GAAP financial measures are adjusted for the items referenced below, as applicable in a given reporting period,from the Company’s financial statements. The adjustments to the non-GAAP financial measures exclude the following items (other than shares from theConvertible Bond Hedge, which are included):
• Acquisition-related expenses
• Amortization of debt discount and loss on conversion of notes
• Certain non-recurring litigation expenses
• Change in deferred net revenue (online-enabled games)
• College football settlement expenses
• Income tax adjustments
• Loss (gain) on strategic investments
• Loss on licensed intellectual property commitment (COGS)
• Restructuring
• Shares from convertible bond hedge
• Stock-based compensation
The Company uses a fixed, long-term projected tax rate internally to evaluate its operating performance, to forecast, plan and analyze future periods, andto assess the performance of its management team. Accordingly, the Company applies the same tax rate to its non-GAAP financial results. During fiscalyear 2016, the Company applied a tax rate of 22 percent to its non-GAAP financial results. For fiscal years 2014 and 2015, a 25 percent tax rate wasapplied, and during fiscal year 2013 and 2012, the Company applied a 28 percent tax rate. Based on a re-evaluation of the Company’s fixed, long-termprojected tax rate, beginning in fiscal year 2017, the Company will apply a tax rate of 21 percent to its non-GAAP financial results.
Electronic Arts believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, providemeaningful supplemental information regarding the Company’s performance by adjusting for certain items that may not be indicative of the Company’score business, operating results or future outlook.
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39
HISTORICAL GAAP FINANCIALS
($ in millions) FY2013 FY2014 FY2015 FY2016
Net Revenue $3,797 $3,575 $4,515 $4,396
% Digital 38% 51% 49% 55%
Gross Margin % 63.4% 62.3% 68.3% 69.2%
Operating Expenses $2,288 $2,195 $2,138 $2,144
Operating Margin % 3.2% 0.9% 21.0% 20.4%
Net Income $98 $8 $875 $1,156
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HISTORICAL GAAP TO NON-GAAP
REVENUE RECONCILIATION
($ in millions) FY2013 FY2014 FY2015 FY2016
PG / Other $2,357 $1,742 $2,316 $1,987
Digital 1,440 1,833 2,199 2,409
GAAP Net Revenue $3,797 $3,575 $4,515 $4,396
Change in Deferred Net Revenue (online-enabled games):
PG / Other ($227) $486 ($227) $48
Digital 223 (40) 31 122
Total Change in Deferred Net
Revenue (online-enabled games):($4) $446 ($196) $170
PG / Other $2,130 $2,228 $2,089 $2,035
Digital 1,663 1,793 2,230 2,531
Non-GAAP Net Revenue $3,793 $4,021 $4,319 $4,566
FY17 Guidance Reconciliation
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The following table provides a reconciliation of the non-GAAP financial measures regarding Electronic Arts’ FY17 guidance to the nearest comparable GAAP financial measures. These are preliminary estimates and expectations based on current information as of May 10, 2016 and are subject to business and economic risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth herein. The reconciliation provided below reflects rounding and other approximations.
In millions, except per share data.
These forward-looking statements are valid as of May 10, 2016 only. Electronic Arts assumes no obligation to update these forward-looking statements.
GAAP
Guidance
Acquisition-
related
expenses
Amortization of
Debt Discount
and Loss on
Conversion of
Notes
Change in
Deferred Net
Revenue (online-
enabled games)
Shares from
Convertible
Bond Hedge
Stock-Based
Compensation
Tax
Adjustments
Non-GAAP
Guidance
Approximate Digital Net Revenue 2,800$ 100 2,900$
Approximate Packaged Goods & Other Net Revenue 1,950$ 50 2,000$
Approximate Net Revenue 4,750$ - - 150 - - - 4,900$
Approximate Gross Margin % 71.0% 0.7% - 0.8% - - - 72.5%
Approximate Operating Expense 2,306$ (6) - - - (200) - 2,100$
Approximate Tax Expense 215$ - - - - - 82 297$
Net Income 809$ 38 2 150 - 200 (82) 1,117$
Earnings Per Share 2.53$ 3.50$
Number of shares used in computation
Diluted 320 - - - (1) - - 319