Notice of2023Annual Meeting andProxy Statement Our Purpose and Beliefs
At EA, our Purpose and Beliefs are the foundations of
our shared culture. Our Purpose and Beliefs motivate
us. Unite us. Inspire us.
CREATIVITY
Striving to bring imagination, original
ideas, and excitement to everything
we do.
PIONEERING
Acting with the curiosity and courage
that it takes to experiment, innovate
and lead.
PASSION
We are at our best when we pursue
what we love, and have fun doing it.
DETERMINATION
Bringing focus, drive and conviction to
our actions. Thriving on the journey
and being motivated to achieve
excellence.
LEARNING
Listening, having humility and being
open to new ways of thinking, and
looking with a lens of inclusion.
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 diverse team.
To learn more about our ongoing values.
visit https://www.ea.com/about.
Letter from our CEO and Board Chair
We hope that you and your families are well. Looking over the past year, I am incredibly proud of the
amazing work of our talented teams. With a strong close to fiscal year 2023, we are executing on our core
strategies to capture our biggest opportunities and deliver long-term value. We believe that we are well-
positioned for growth and impact in the years ahead.
FISCAL 2023 HIGHLIGHTS
Against macro uncertainty, we navigated the year with resilience and determination. Across fiscal year
2023, we showed the fundamental strength of our business, delivered for our players, and lived up to the
promise of our values. We generated strong results by delivering high quality games and experiences,
launching seven new releases, and providing over 450 content updates across 51 titles. We delivered
record engagement across some of our biggest franchises; EA SPORTS FIFA 23 became the best-selling
title in franchise history, Madden NFL 23 became the best-selling title in franchise history across console
and PC platforms, and The Sims 4 community grew to more than 70 million players.
FOCUS ON IMPACT
The Board is focused on Electronic Arts’ efforts to create value for stockholders while generating
enduring positive impact across our workplaces and the world around us through the expanding power
of play. We have continued to lead our industry in programs, practices and transparency with respect to
diversity, equity and inclusion. We have made great strides for positive play, inclusion and accessibility
design, making it possible for more people to experience the joy of games. And we have advanced our
environmental sustainability programs and practices. We are deeply committed to furthering this work in
the communities where we live, work and play in the years to come.
OUR NEXT STEPS
This is an exciting time for Electronic Arts. We are leading the future of entertainment in a dynamic industry
that is at an inflection point. Consumption of sports and media is at an all-time high and more people than
ever are choosing interactive experiences as their first-choice entertainment. These transformations
represent immense opportunities for us to do more amazing things for our people and players.
To drive growth in FY24 and beyond, we are focusing on the priorities of building games and experiences
that entertain massive online communities; creating blockbuster interactive storytelling; and amplifying
the power of community in and around our games with social and creator tools. These priorities align our
investments with opportunities to make the biggest impact.
We’re proud of our performance in service of our stockholders, employees, players, and communities. We
thank you for your investment in Electronic Arts.
Sincerely,
ANDREW WILSON
Chief Executive Officer and Board Chair
1
2023 PROXY STATEMENT Notice of Annual Meeting of Stockholders
Date and Time
August 10, 2023 (Thursday)
2:00 pm (Pacific)
Location
Virtually at www.virtualshareholder
meeting.com/EA2023
Who Can Vote
Stockholders as of June 16, 2023
are entitled to vote.
Voting Items
PROPOSALS
1
2
3
4
5
To elect the eight
nominees listed in the
Proxy Statement to
the Board of Directors
to hold office for a
one-year term.
“FOR” each
director
nominee
To conduct an advisory
vote to approve named
executive officer
compensation.
To ratify the
appointment of KPMG
LLP as our independent
registered public
accounting firm for
the fiscal year ending
March 31, 2024.
To conduct an advisory
vote on the frequency
of say-on-pay votes.
To consider and vote
upon one stockholder
proposal, if properly
presented at the
Annual Meeting.
“FOR”
“FOR”
“FOR”
“AGAINST”
Page 64
Page 65
Page 66
Page 67
Page 68
Stockholders will also act on any other matters that may properly come before the meeting. Any action on the items of business described above
may be considered at the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) at the time and on the date specified above or at any time
and date to which the Annual Meeting may be properly adjourned or postponed.
This year, we will hold the Annual Meeting virtually. There will not be a physical location for the Annual Meeting, and you will not be able to attend the
Annual Meeting in person. For more information on how to attend the Annual Meeting, please see page 71 of this Proxy Statement.
Your vote is important. You do not need to attend the Annual Meeting to vote if you have submitted your proxy in advance of the meeting. Whether
or not you plan to attend the Annual Meeting, we encourage you to read this Proxy Statement and submit your proxy or voting instructions as
soon as possible so that your shares may be represented at the Annual Meeting. In the event of a technical malfunction or situation that makes
it advisable to adjourn the Annual Meeting, the chair will convene the meeting at 2:30 p.m. Pacific Time on August 10, 2023 at the Company’s
principal business address solely for the purpose of adjourning the meeting to reconvene at a date, time and location announced by the meeting
chair. If this happens, more information will be provided at https://ir.ea.com.
By Order of the Board of Directors,
JACOB J. SCHATZ
Chief Legal Officer and Corporate Secretary
How to Vote
Online Before the Meeting
Visit www.proxyvote.com
and follow the instructions
provided in the Notice.
Telephone
Follow the instructions
provided on your proxy card
or voting instruction card.
Mail
Submit your proxy by mail
by signing your proxy card,
and mail it in the enclosed,
postage-paid-envelope.
Online at the Meeting
Attend the Annual Meeting virtually at
www.virtualshareholdermeeting.com/
EA2023 and follow the instructions on
the website.
Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholder Meeting to Be Held on August 10, 2023.
Please note that this Proxy Statement, as well as our Annual Report on Form 10-K (the “Annual Report”) for the fiscal year ended March 31,
2023, is available at http://ir.ea.com.
2
Table of Contents
Letter from our CEO and Board Chair
Notice of Annual Meeting of Stockholders
Proxy Highlights
Board of Directors and Corporate Governance
Board Nominees and Structure
Board’s Role and Responsibilities
Board Policies
Director Compensation
Compensation Discussion & Analysis
Executive Summary
Stockholder Engagement
Compensation Principles
Process for Determining Our NEOs’ Compensation
Our NEOs’ Fiscal Year 2023 Compensation
Other Compensation Practices and Policies
Compensation Committee Report on Executive Compensation
Executive Compensation Tables
Outstanding Equity Awards at Fiscal Year 2023 Year-End Table
Potential Payments Upon Termination or Change in Control
Fiscal Year 2023 Pay Ratio
Pay Versus Performance
Equity Compensation Plan Information
Audit Matters
Selection and Engagement of Independent Registered Public Accounting Firm
Fees of Independent Auditors
Pre-approval Procedures
Report of the Audit Committee of the Board of Directors
Stock Ownership Information
Security Ownership of Certain Beneficial Owners and Management
Stock Ownership Requirements
Delinquent Section 16(a) Reports
Insider Trading, Anti-Hedging and Anti-Pledging Policies
Proposals to be Voted on
Proposal 1: Election of Directors
Proposal 2: Advisory Vote to Approve Named Executive
Officer Compensation
Proposal 3: Ratification of the Appointment of KPMG LLP,
Independent Public Registered Accounting Firm
Proposal 4: Advisory Vote on the Frequency of
Say-on-Pay Votes
Proposal 5: Stockholder Proposal on Termination Pay
Other Information
Appendix A: Supplemental Information for CD&A
1
2
4
8
8
18
21
22
25
25
26
29
30
32
44
45
46
49
52
55
56
58
59
59
60
60
61
62
62
63
63
63
64
64
65
66
67
68
71
76
In this Proxy Statement, we make
forward-looking statements regarding
future events or the future financial
performance of the Company. We use
words such as “anticipate,” “believe,”
“expect,” “intend,” “estimate,” “plan,”
“predict,” “seek,” “goal,” “will,” “may,”
“likely,” “should,” “could,” “continue,”
“potential” (and the negative of any
of these terms), “future” and similar
expressions to identify forward-
looking statements. In addition, any
statements that refer to projections
of our future financial performance,
trends in our business, projections of
markets relevant to our business, our
corporate responsibility initiatives
(including environmental, social and
impact matters), uncertain events and
assumptions and other characterizations
of future events or circumstances are
forward-looking statements. These
forward-looking statements are
aspirational, are not guarantees of future
performance and reflect management’s
current expectations. Statements
regarding our corporate responsibility
initiatives may also be based on
standards for measuring progress that
are still developing, internal controls
that are evolving, and on assumptions
that are subject to change in the future;
in the context of this disclosure, they
may also not be considered material for
purposes of reporting with the Securities
and Exchange Commission. Our actual
results could differ materially from
those discussed in the forward-looking
statements. Please refer to the Annual
Report for a discussion of important
factors that could cause actual events
or actual results to differ materially from
those discussed in this Proxy Statement.
These forward-looking statements
speak only as of the date of this Proxy
Statement; we assume no obligation to
revise or update any forward-looking
statement for any reason, except as
required by law.
3
2023 PROXY STATEMENT Proxy Highlights
This summary highlights information contained in this Proxy Statement, and it is qualified in its entirety by the remainder of this Proxy
Statement. You are encouraged to read the entire Proxy Statement carefully before voting. In this Proxy Statement, the terms
“Electronic Arts”, “EA,” “we,” “our” and “the Company” refer to Electronic Arts Inc. This Proxy Statement was first distributed and made
available via the Internet to stockholders on or about June 23, 2023 along with the Electronic Arts Inc. Notice of 2023 Annual Meeting of
Stockholders, Annual Report and form of proxy.
2023 Board Nominees
The following table provides summary information about our director nominees, each of whom is a current director of the Company.
Name
Principal Occupation
Director
Since
Independent
Committee
Memberships
Mr. Kofi A. Bruce
Chief Financial Officer, General Mills, Inc.
2021
A (Chair)
Ms. Rachel A.
Gonzalez
General Counsel, GE Verona
Mr. Jeffrey T.
Huber
Founder & Managing Partner, Triatomic Capital;
Former CEO & Vice Chairman, GRAIL, Inc.
2021
2009
Ms. Talbott Roche
President and Chief Executive Officer, Blackhawk
Network Holdings, Inc.
2016
Mr. Richard A.
Simonson
Managing Partner, Specie Mesa L.L.C.;
Former Chief Financial Officer, Sabre Corporation
2006
Mr. Luis A. Ubiñas
(Lead Independent Director*)
Former President, Ford Foundation,
Former Senior Partner, McKinsey & Company
Ms. Heidi J.
Ueberroth
President, Globicon
2010
2017
Mr. Andrew Wilson
(Chair)
Chief Executive Officer, Electronic Arts Inc.
2013
*
Elected by independent directors.
A: Audit Committee
C: Compensation Committee
NG: Nominating and Governance Committee
NG, C
A
C (Chair)
A
NG (Chair)
C
4
Proxy Highlights
PROxY HIGHLIGHTS
Board Diversity and Refreshment
The Board of Directors routinely assesses its composition and believes stockholder value can be driven by a board with the knowledge and
understanding of the Company’s business from longer-tenured directors balanced with the fresh perspective and ideas provided by the
addition of new members. The Board of Directors believes that complementary and diverse perspectives, through business experience,
diversity of gender, ethnicity, culture and other factors, contribute to the Board of Directors’ effectiveness as a whole. The Nominating
and Governance Committee and the Board of Directors are committed to actively seeking highly qualified women and individuals from
underrepresented communities to include in the pool of potential new directors. When assessing potential new directors, the Nominating
and Governance Committee considers the skills, background and experience of each candidate to evaluate the candidate’s ability to
contribute diverse perspectives to the Board of Directors. The primary consideration is to identify candidates who will best fulfill the Board of
Directors’ and the Company’s needs at the time of the search. Therefore, the Nominating and Governance Committee does not believe it is
appropriate to either nominate or exclude from nomination an individual solely based on gender, ethnicity, race, age, or similar factors.
Director Nominee Tenure
Median Tenure – 8 years
Average Tenure – 8 years
Director Nominee Age
Median Age – 55 years old
Average Age – 56 years old
Director Nominee Diversity
3 female: Ms. Gonzalez, Ms. Ueberroth, and Ms. Roche
2 Hispanic/Latino: Ms. Gonzalez and Mr. Ubiñas
1 African American: Mr. Bruce
Ethnically Diverse
38%
37.5%
37.5%
50%
50%
25%
5 or fewer years - 37.5%
6 – 10 years - 25%
10+ years – 37.5%
55 or younger - 50%
56 – 65 years old – 50%
66 or older – 0
38% Female
Diverse - 63%
63%
Board Diversity Matrix (As of June 23, 2023)
Board Size
Total Number of Directors
Part I: Gender Identity
Directors
Part II: Demographic Background*
African American or Black
Alaskan Native or Native American
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White
* To see our Board Diversity Matrix as of June 24, 2022, please see the proxy statement filed with the SEC on June 24, 2022.
Female
Male
8
3
-
-
-
1
-
2
5
1
-
-
1
-
3
5
2023 PROXY STATEMENT PROxY HIGHLIGHTS
Corporate Governance Highlights and Report
Board Independence
Independent director nominees
7 of 8
Independent Lead Director
Luis A. Ubiñas
100% Independent Board committees
Conflict of Interest Policy
Yes
Yes
Director Elections
Frequency of Board elections
Voting standard for uncontested elections
Stockholder proxy access
All directors
elected annually
Majority of
votes cast
Yes
Board Operations
Number of incumbent directors
that attended at least 75% of all
applicable meetings last year
Board evaluations
Committee evaluations
Director stock ownership requirement
Code of Conduct applies to all
Board members
8 of 8
Annual
Annual
Yes, 5x annual
retainer
Yes
Stockholder Rights
Voting rights for all shares
Voting rights restrictions (e.g., non-voting
shares, golden shares)
Poison pill
Supermajority voting provisions
Right to call special meetings
Stockholder Action by Written Consent
Stockholder access to directors and officers
during annual stockholders’ meeting
Robust stockholder engagement practices
One share,
one vote
None
No
None
Yes, 15%
threshold
Yes, 25%
threshold
Yes
Yes
EA is committed to making a positive impact in our world, and we continue to make progress on our
initiatives supporting our players, our communities, our planet, and our company. Our Board and Board
Committees review the Company’s commitments and progress. See page 20 for more information
about Board and Committee oversight of ESG.
In October 2022, we published our third annual Impact Report, detailing our commitments and progress
in social, environmental, and governance areas that are of interest to our stakeholders. Our disclosures
are created with reference to the Sustainability Accounting Solutions Board (SASB) Materiality Map and
the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD).
ESG Focus
2022
Impact
Report
6
PROxY HIGHLIGHTS
Board Engagement with Stockholders
In fiscal year 2023, we continued our robust stockholder engagement efforts, and the Board of Directors continued its strong track
record of stockholder responsiveness. Leading up to the 2022 annual meeting and then again later in fiscal year 2023, we reached out
to our top stockholders and the proxy advisors to discuss and solicit feedback on various topics, including our executive compensation
program, governance and ESG issues. After considering stockholder feedback, our Board of Directors, examined or enacted additional
enhancements to our compensation programs, governance and ESG efforts.
Stockholder Engagement
After 2022 Annual Meeting
Offered Meetings
Engaged in Discussions
Top 25 Stockholders
of our outstanding common stock
~40%
of our outstanding common stock
What we
discussed
Our Updates
and Actions
Executive
Compensation
■ Feedback on our
Compensation programs
■ Favorable Say-on Pay
voting results
Governance
■ Board and Committee
refreshment
■ Board oversight
■ Stockholder rights
Environmental and
Social Matters
■ Our culture and our talent
■ Diversity, equity and inclusion
efforts
■ Environmental sustainability
progress
Executive Compensation. See pages 46-58.
■ Adopted a Cash Severance Policy for Executive Officers which prohibits the Company from entering
into any arrangement that provides cash severance benefits exceeding 2.99 times the sum of an executive
officer’s base salary plus target bonus opportunity without seeking shareholder ratification.
■ Implemented an enterprise-level scorecard for the strategic and operating objectives that drive
funding of the business performance component of the Company bonus pool.
■ Increased the portion of performance-based equity for our CFO and COO—each of their annual
equity incentive awards will consist of 60% performance-based restricted stock units, consistent with the
award mix put in place for our CEO effective for fiscal year 2022.
For more on our engagement program and changes to our compensation programs, please see the discussion
beginning on page 26 under the heading “Stockholder Engagement” below.
Environmental, Social and Governance
■ Lowered the threshold for stockholders to call a special meeting to 15%.
■ Refreshed our Board committee composition by appointing Ms. Rachel Gonzalez to the Compensation
Committee and appointing Mr. Kofi Bruce as Chair of the Audit Committee.
■ Promoted transparency regarding our workforce representation data by voluntarily disclosing our EEO-1
diversity data; and disclosed attrition data by gender and race/ethnicity in our most recent Impact Report.
■ Maintained base pay equity on the basis of gender globally and on the basis of race/ethnicity in the
United States.
■ Established fiscal year 2023 as our baseline year for Scope 1 and 2 emissions and will disclose additional
Scope 3 categories in our upcoming 2023 Impact Report.
■ Published our first report based on the recommendation of the Task Force on
Climate-related Financial Disclosures.
7
2023 PROXY STATEMENT Board of Directors and
Corporate Governance
Board Nominees and Structure
Each of the following director nominees has been nominated for re-election at the Annual Meeting. As set forth below, we believe each of
these director nominees brings a valuable and unique perspective to the Board of Directors and has the necessary experience, skills and
attributes to serve on the Board of Directors and contribute to its overall effectiveness. The Board of Directors has concluded that each
is qualified to serve as a director based on the experiences, qualifications and attributes set forth below.
Kofi A. Bruce 52 Independent
Chief Financial Officer, General Mills, Inc.
Director since: 2021
Board Committees:
Other Public Company
Directorships:
Directorships in
Past 5 Years:
Diversity:
Audit (Chair)
None
None
Identifies as
African American
Background and Affiliations:
Education:
■ Chief Financial Officer, General Mills, Inc., a global manufacturer
and marketer of branded consumer foods, 2020-present
■ Vice President, Finance (2014-2020) and Corporate Controller
(2017-2019), General Mills, Inc.
Key Qualifications:
■ B.A. in International Relations, Stanford University
■ M.B.A., University of Michigan School of Business (Ross)
Mr. Bruce brings to the Board of Directors extensive financial expertise and risk management experience as a current public company
Chief Financial Officer. Prior to his appointment as Chief Financial Officer, Mr. Bruce had a 20-year career in finance leadership roles,
including Treasury, Accounting and Controllership functions at public companies. In present and prior roles, he gained significant
experience overseeing financial statement preparation, as well as the relationship with internal and external audit functions. In
addition, Mr. Bruce brings to the Board of Directors his experience with operational strategies and risk management associated with
consumer-facing businesses.
8
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Rachel A. Gonzalez 53 Independent
General Counsel of GE Verona
Director since: 2021
Board Committees:
Other Public Company
Directorships:
Nominating and Governance
Compensation
Sabre Corporation
Vacasa, Inc.
Directorships in
Past 5 Years:
Dana Incorporated
Diversity:
Identifies as Female
and Hispanic/Latino
Background and Affiliations:
Education:
■ General Counsel of GE Verona, a global energy company,
■ B.S. degree in Comparative Literature, University of
April 2023-present
California, Berkeley
■ EVP, General Counsel and Corporate Secretary of Starbucks
■ J.D., Boalt Hall School of Law at the University of
Corporation, a global coffeehouse chain, April 2018-April 2022
■ EVP, Chief Administrative Officer and Corporate Secretary of Sabre
Corporation, a global travel technology company, May 2017-April 2018
■ Executive Vice President and General Counsel of Sabre Corporation,
California, Berkeley
September 2014-May 2017
Key Qualifications:
Ms. Gonzalez’s significant operational, regulatory and management experience as General Counsel and Corporate Secretary at GE
Verona, Starbucks and Sabre, as well as during her time as a partner in the corporate group of Morgan, Lewis & Bockius, provides in-depth
experience and perspective with respect to public company corporate governance, risk management, compensation practices, and
ESG matters, as well as responding to evolving stockholder and other stakeholder expectations. In addition, Ms. Gonzalez’s experience at
companies with strong digital marketing and international operations provide valuable insight to the Board of Directors and management
as they execute the Company’s growth strategies.
Jeffrey T. Huber 55 Independent
Founder & Managing Partner, Triatomic Capital
Director since: 2009
Board Committees:
Other Public Company
Directorships:
Directorships in
Past 5 Years:
Audit
Upstart, Inc.
None
Background and Affiliations:
Education:
■ Founder and Managing Partner of Triatomic Capital, an investment
and advisory firm, January 2022–present.
■ Founding CEO and Vice Chairman of GRAIL, Inc., a life sciences
company, 2016-2021
■ Former Senior Vice President, Alphabet Inc., 2003-2016
■ Former Vice President of Architecture and Systems
Development, eBay
Key Qualifications:
■ B.S. degree in Computer Engineering, University of Illinois
■ Master’s degree, Harvard University
Mr. Huber has extensive operational and executive experience at companies that apply rapidly changing technology, including his most
recent experience as the founding CEO and Vice Chairman of GRAIL, Inc. In addition, Mr. Huber’s experience at Alphabet and eBay
provide relevant background and experience, including risk management experience, with respect to consumer online companies that
deploy large-scale technological infrastructure.
9
2023 PROXY STATEMENT BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Talbott Roche 56 Independent
President and Chief Executive Officer, Blackhawk Network Holdings, Inc.
Director since: 2016
Board Committees:
Other Public Company
Directorships:
Directorships in
Past 5 Years:
Diversity:
Compensation (Chair)
None
Blackhawk Network
Holdings, Inc. (formerly
publicly-traded)
Identifies as Female
Background and Affiliations:
Education:
■ President (2010-present) and Chief Executive Officer (2016-present),
Blackhawk Network Holdings, Inc., a leading prepaid payment network
■ Former Branding Consultant and Director, New Business Development,
Landor Associates
■ Director, Blackhawk Network Holdings, Inc. (currently private)
Key Qualifications:
■ B.A. in Economics, Stanford University
Ms. Roche brings to the Board of Directors extensive operational and management experience as well as significant experience in
corporate governance, risk management, compensation program design, and investor engagement as the Chief Executive Officer of a
global organization, including during Blackhawk Network Holdings’ time as a public company. In addition, Ms. Roche’s understanding and
experience with digital commerce, marketing and consumer trends provide the Board of Directors with valuable perspective.
Richard A. Simonson 64 Independent
Managing Partner, Specie Mesa L.L.C.;
Former Chief Financial Officer, Sabre Corporation
Director since: 2006
Board Committees:
Other Public Company
Directorships:
Directorships in
Past 5 Years:
Audit
Couchbase, Inc.
Evercommerce, Inc.
Background and Affiliations:
Education:
■ Managing Partner, Specie Mesa L.L.C., an investment and advisory firm,
2018-present
■ B.S. degree, Colorado School of Mines
■ M.B.A., Wharton School of Business, University of
■ Former Chief Financial Officer (2013-2018) and Senior Adviser
Pennsylvania
(2018-2019), Sabre Corporation, a global travel technology company
■ Former Chief Financial Officer, Nokia Corporation
■ Former Chief Financial Officer, Rearden Commerce
Key Qualifications:
Mr. Simonson brings to the Board of Directors extensive financial expertise, corporate governance and risk management experience as a
former public company Chief Financial Officer. He also has extensive experience with the strategic and operational challenges of leading
global companies, as well as partnering with, and overseeing, relationships with independent public registered accounting firms.
10
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Luis A. Ubiñas (Lead Director) 60 Independent
Former President, Ford Foundation, Former Senior Partner, McKinsey & Company
Director since: 2010
Board
Committees:
Other Public Company
Directorships:
Other
trusteeships:
Directorships in
Past 5 Years:
Diversity:
Nominating and
Governance (Chair)
AT&T Inc.
Tanger Factory Outlet
Centers Inc.
Mercer Funds
Boston Private
Financial Holdings, Inc.
Identifies as
Hispanic/Latino
FirstMark Horizon
Acquisition Corp. (SPAC)
Background and Affiliations:
Education:
■ Former President, Ford Foundation
■ Former Senior Partner, McKinsey & Company
■ Fellow of the American Academy of Arts and Sciences (non-profit)
■ Member of the Council on Foreign Relations
■ B.A. degree, Harvard College
■ M.B.A., Harvard Business School
Key Qualifications:
Mr. Ubiñas has extensive experience in business management, operations, governance, compensation program design and board
functions from his work as an investor and advisor to companies across sectors. In addition, through his prior experience as a Senior
Partner at McKinsey & Company, he has worked with technology, telecommunications and media companies in understanding the
challenges and opportunities presented by digital distribution platforms and applications. Mr. Ubiñas has worked extensively with
companies managing the transition from physical to digital distribution business models. Mr. Ubiñas’ experience at the Ford Foundation as
its President provides unique insight, strategic direction and oversight of the Company’s ESG efforts, including the Company’s inclusion
and diversity practices and programs, as well as its community engagement efforts.
11
2023 PROXY STATEMENT BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Heidi J. Ueberroth 57 Independent
President, Globicon
Director since: 2017
Board Committees:
Other Public Company
Directorships:
Directorships in
Past 5 Years:
Diversity:
Compensation
Stillwater Growth Corp. (SPAC)
Identifies as Female
Background and Affiliations:
Education:
■ President, Globicon, a private investment and advisory firm focused
■ B.A. degree, Vanderbilt University
on the media, sports, entertainment and hospitality industries,
2016–present
■ Co-Chair, Pebble Beach Company (private)
■ Former President, NBA International
■ Former President, Global Marketing Partnerships and International
Business Operations, NBA
Key Qualifications:
Ms. Ueberroth has extensive operational and management experience in the sports, media and entertainment industries, including with
respect to developing consumer products and services in international and emerging markets. During her 19 year career with the NBA,
she oversaw the league’s international expansion and brings deep knowledge of television and digital media distribution, marketing and
branding and strategic direction of a global company. Her active role as the co-chairman of the Pebble Beach Company and her past and
present board service bring experience with respect to compensation program design, investor engagement and ESG initiatives.
Andrew Wilson (Chair) 48
Chief Executive Officer, Electronic Arts Inc.
Director since: 2013
Board Committees:
Other Public Company
Directorships:
None
None
Directorships in
Past 5 Years:
Intel Corporation
Background and Affiliations:
■ Chief Executive Officer, Electronic Arts Inc., 2013-present
■ Chair of the Board, World Surf League (private)
■ Board of Trustees, Paley Center for Media (non-profit)
Key Qualifications:
Mr. Wilson has served as the Company’s Board Chair since 2021, Chief Executive Officer since September 2013 and has been employed
by EA in several roles since 2000. Mr. Wilson has extensive experience and knowledge of the Company and the industry, and we believe
it is crucial to have the perspective of the Company’s Chief Executive Officer represented on the Board of Directors to provide direct
insight into the Company’s day-to-day operations and strategic vision.
12
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Consideration of Director Nominees
In evaluating director nominees to recommend to the Board of Directors, the Nominating and Governance Committee considers many
factors within the context of the characteristics and the needs of the Board of Directors as a whole and EA’s business and strategy at
that time, including the traits discussion on page 5 of this Proxy Statement under the heading “Board Diversity and Refreshment”. While
the specific needs of the Board of Directors may change from time to time, all nominees for director are considered on the basis of the
following minimum qualifications:
■ The highest level of personal and professional ethics and integrity, including a commitment to EA’s purpose and beliefs;
■ Practical wisdom and mature judgment;
■ Broad training and significant leadership experience in business, entertainment, technology, finance, corporate governance, public
interest or other disciplines relevant to EA’s long-term success;
■ The ability to gain an in-depth understanding of EA’s business; and
■ A willingness to represent the best interests of all EA stockholders and objectively appraise management performance.
The Nominating and Governance Committee will evaluate candidates proposed by our stockholders under similar criteria, except that it
also may consider as one of the factors in its evaluation, the amount of EA voting stock held by the stockholder and the length of time the
stockholder has held such stock. A stockholder who wishes to suggest a candidate for the committee’s consideration should send the
candidate’s name and qualifications to our Corporate Secretary.
Director Independence
Our Board of Directors has determined that each of our non-employee directors qualifies as an “independent director” as that term is
used in the Nasdaq Stock Market Rules and that each member of our standing committees is independent in accordance with those
standards. Mr. Wilson, our CEO, does not qualify as independent. The Nasdaq Stock Market Rules have both objective tests and a
subjective test for determining independence. The Board of Directors has not established categorical standards or guidelines to make
these subjective determinations but considers all relevant facts and circumstances.
In addition to the Board-level standards for director independence, the directors who serve on the Nominating and Governance, Audit and
Compensation Committees each satisfy requirements established by the Securities and Exchange Commission (“SEC”) and the Nasdaq
Stock Market to qualify as “independent” for the purposes of membership on those committees.
Board Structure and Operations
Board Meetings
In fiscal year 2023, the Board of Directors met eight times. At regularly scheduled meetings, the independent members of the Board of
Directors meet in executive session separately without management present.
DIRECTOR ATTENDANCE AT ANNUAL MEETING
Our directors are expected to make every effort to attend the Annual Meeting. All of the eight directors who were elected at the 2022
annual meeting attended the 2022 annual meeting.
13
2023 PROXY STATEMENT BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Board of Directors Leadership Structure
The Board of Directors regularly evaluates its leadership structure and discusses Board leadership with stockholders. The Board of
Directors believes that Mr. Wilson serving as Chair and Mr. Ubiñas serving as Lead Independent Director is the appropriate leadership
structure for the Company. A strong and empowered Lead Independent Director provides an essential mechanism for independent
viewpoints and accountability, and we have recently expanded the formal responsibilities of our Lead Independent Director role.
Andrew Wilson
Chief Executive Officer and Board Chair
The Board of Directors believes that Mr. Wilson has invaluable knowledge regarding the Company and the interactive entertainment
industry and is uniquely positioned to lead the Board of Directors in its review of management’s strategic plans. In addition, the
Board of Directors believes that Mr. Wilson’s combined role enables decisive leadership, promotes clear accountability, and
enhances the Company’s ability to communicate its strategy and message clearly and consistently to stockholders, employees and
other stakeholders.
With Mr. Wilson as Chief Executive Officer and Chair, the Board of Directors is focused on practices and programs that promote
and facilitate independent viewpoints and strengthen effective independent oversight of management. These considerations
include a strong and empowered Lead Independent Director, the current membership of the Board of Directors, which has a
balanced mix of shorter tenured and longer tenured directors and representation of diverse perspectives based on background,
including business experience, gender, race, ethnicity, professional skills and experiences, and other factors. The Board of Directors
also maintains strong standing committees, which are entirely composed of independent directors, and have empowered Chairs.
Luis A. Ubiñas
Lead Independent Director
The Board of Directors understands and values the role of independent leadership. Mr. Ubiñas has served as our Lead Independent
Director since 2015, and his current two-year term ends with this Annual Meeting. Mr. Ubiñas was chosen by the independent directors
to serve as Lead Independent Director for an additional two-year term, ending with our 2025 annual meeting, subject to Mr. Ubiñas’
re-election to the Board of Directors. Mr. Ubiñas, the Chair of our Nominating and Governance Committee, has extensive experience
as a public company director and deep knowledge and understanding of governance practices and board functions from his work with
companies across sectors; he also has spoken directly with several of the Company’s largest investors. Mr. Ubiñas plays an important
role in providing institutional knowledge and brings the history of having experienced multiple lifecycles of our businesses. Given
Mr. Ubiñas’ strong qualifications and corporate governance expertise including his experience as our Lead Independent Director, the
Board believes that Mr. Ubiñas’ contributions continue to be of great value to the Board of Directors and to stockholders.
In fiscal year 2022, the Board of Directors reviewed the role of the Lead Independent Director and enhanced those responsibilities to
provide best-in-class mechanisms for independent viewpoints and accountability. Mr. Ubiñas’ key roles and responsibilities are contained
in our Corporate Governance Guidelines which are available on our Investor Relations website at http://ir.ea.com and include:
■ Calling special meetings of the independent directors, as
■ Facilitating discussion among independent directors and
needed;
■ Presiding at meetings of the Board of Directors at which
the Chair is not present, including executive sessions of
the Board of Directors;
■ Approving the agenda for Board of Directors meetings;
■ Consulting with respect to materials provided to directors
in advance and providing feedback to the Chair about the
quality of those materials;
■ Serving as a liaison between the Chair and the other
independent directors;
■ Along with the Chair, jointly determining the timing and
length of meetings of the Board of Directors;
committee chairs and providing feedback and perspective
to the Chair about discussions among the independent
directors;
■ Overseeing the process for the Board of Directors’ annual
self-evaluation along with the Nominating and Governance
Committee;
■ Leading the Board of Directors’ evaluation of the
Chief Executive Officer along with the Nominating and
Governance Committee; and
■ Overseeing the Board of Directors’ stockholder
communication policies and meeting with major
stockholders.
14
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Board Committees
The Board of Directors currently has a standing Audit Committee, Compensation Committee and Nominating and Governance
Committee. Each of these standing committees operates under a written charter adopted by the Board of Directors. These charters are
available in the Investor Relations section of our website at http://ir.ea.com.
All members of these committees are independent directors. During fiscal year 2023, all eight directors attended in 88% or more of the
aggregate of (1) the number of applicable meetings of the Board of Directors and (2) the number of applicable meetings held by each
committee on which such director was a member. The members of our standing committees are set forth below:
Audit Committee
Members
Meetings in
fY 2023:
KOfI A.
BrUCE
(Chair)
JEffrEY t.
HUBEr
rICHArD A.
sIMOnsOn
8
responsibilities of the Audit Committee
■ Assists the Board of Directors in its oversight of the Company’s financial reporting and is directly responsible for the appointment,
compensation and oversight of our independent auditors.
■ Establishes and maintains complaint procedures with respect to internal and external concerns regarding accounting or auditing matters.
■ Oversees tax and treasury policies and practices as well as the Company’s internal audit function.
■ Although the Board of Directors retains ultimate risk management oversight of matters related to privacy and cybersecurity, the
Audit Committee receives quarterly updates from EA’s information security team and reviews the steps taken by management to
monitor and control risks with respect to privacy and cybersecurity issues.
As determined by the Board of Directors, each of the three current Audit Committee members meets the independence requirements
and the financial literacy standards of the Nasdaq Stock Market Rules, as well as the independence requirements of the SEC. The Board
of Directors has determined that each of Mr. Bruce and Mr. Simonson meets the criteria for an “audit committee financial expert” as set
forth in applicable SEC rules. The Audit Committee has the authority to obtain advice and assistance from outside advisors without
seeking approval from the Board of Directors, and the Company will provide appropriate funding for payment of compensation to
advisors engaged by the Audit Committee.
In April 2023, the Board of Directors appointed Kofi A. Bruce as the Chair to the Audit Committee. Mr. Bruce brings valuable perspective as
the current Chief Financial Officer of General Mills Inc., including direct experience overseeing the preparation of financial statements and
managing key financial disciplines, as well as his experience with oversight of internal and external audit functions.
15
2023 PROXY STATEMENT BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Nominating and Governance Committee
Members
LUIs A. UBIÑAs
(Chair)
rACHEL A.
GOnZALEZ
Meetings in
fY 2023:
4
responsibilities of the nominating and Governance Committee
■ Applies the criteria outlined in our Corporate Governance Guidelines to recommend nominees for director and committee
memberships to the Board of Directors.
■ Reviews from time to time the appropriate skills, characteristics and experience required of the Board of Directors as a whole, as well
as its individual members, including such factors as business experience and diversity.
■ Reviews developments in corporate governance and recommends formal governance standards to the Board of Directors.
■ Oversees the CEO’s annual performance review.
■ Manages the process for emergency succession planning in the event the CEO is unable to fulfill the responsibilities of the role, and
also periodically evaluates internal and external CEO candidates for succession planning purposes.
■ Oversees, periodically reviews, and reports to the Board of Directors with respect to ESG performance, disclosures, and
engagement with investors and other key stakeholders.
The Nominating and Governance Committee currently is comprised of two directors, each of whom the Board of Directors determined
meets the independence requirements of the Nasdaq Stock Market Rules.
16
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Compensation Committee
Members
Meetings in
fY 2023:
tALBOtt
rOCHE
(Chair)
rACHEL A.
GOnZALEZ
HEIDI J.
UEBErrOtH
6
responsibilities of the Compensation Committee
■ Sets the overall compensation strategy for the Company.
■ Recommends the compensation of the CEO to the Board of Directors and determines the compensation of our other
executive officers.
■ Oversees the Company’s bonus and equity incentive plans and other benefit plans.
■ Reviews and recommends to the Board of Directors compensation for non-employee directors and reviews and approves
compensation for employees who qualify as a “Related Person” under our Related Person Transaction Policy.
As determined by the Board of Directors, each of the members of the Compensation Committee meets the independence requirements
of the Nasdaq Stock Market Rules and the SEC rules. The Compensation Committee has the authority to engage the services of outside
advisors after first conducting an independence assessment in accordance with applicable laws, regulations and exchange listing standards.
During fiscal year 2022, the Compensation Committee directly engaged Semler Brossy Consulting Group, a national compensation
consulting firm, to advise on executive compensation matters. Please refer to the section titled “The Process for Determining Our NEOs’
Compensation” in the “Compensation Discussion and Analysis” section of this Proxy Statement, for additional information regarding the
role of Semler Brossy in advising the Compensation Committee on our executive compensation program. The Compensation Committee
has reviewed the independence of Semler Brossy and has determined that its engagement does not raise any conflicts of interest.
The Compensation Committee may also delegate any of its authority and duties to subcommittees, individual committee members or
management, as it deems appropriate in accordance with applicable laws, rules and regulations.
In April 2023, the Board of Directors appointed Rachel Gonzalez to the Compensation Committee. Ms. Gonzalez brings to the
Committee her executive experience as the current General Counsel of GE Verona and service on the leadership team of several
global companies in highly competitive markets. These roles have provided Ms. Gonzalez with experience with executive compensation,
compensation plans, public reporting and investor engagement.
For further information about the role of our Compensation Committee and executive officers in recommending the amount or form
of executive compensation, please see “The Process for Determining our NEOs’ Compensation” in the “Compensation Discussion and
Analysis” section of this Proxy Statement.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2023, no member of the Compensation Committee was an employee or current or former officer of EA, nor did any
member of the Compensation Committee have a relationship requiring disclosure by EA under Item 404 of Regulation S-K. No EA officer
serves or has served since the beginning of fiscal year 2023 as a member of the board of directors or the compensation committee of a
company at which a member of EA’s Board of Directors and Compensation Committee is an employee or officer.
Annual Board and Committee Self-Evaluations
Our Board of Directors and each of our committees conducts an annual evaluation, which includes a qualitative assessment by each
director of the performance of the Board of Directors, as a whole, and the committee or committees on which each director serves. The
evaluation is intended to determine whether the Board of Directors and each committee are functioning effectively, and to provide them
with an opportunity to reflect upon and improve processes and effectiveness. Our Lead Independent Director, Mr. Ubiñas, oversees
the process for the Board of Directors’ annual self-evaluation along with the Nominating and Governance Committee. A summary of
the results is presented to the Nominating and Governance Committee and the Board of Directors on an aggregated basis, noting
any themes or common issues.
17
2023 PROXY STATEMENT BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Board’s Role and Responsibilities
Oversight of Business Strategy
The Board’s industry and management expertise is critical in overseeing our business strategy. In a rapidly evolving industry, our Board is an
important resource for thoughtful and candid insights into strategic planning conversations, including product and service development,
operational considerations, emerging industry trends, acquisitions, financial planning, and organizational design.
■ The Board oversees our stockholders’ interest in the long-term health and the overall success of our business and financial strength. This
focus is reflected in the agenda for each Board meeting. The Board reviews our long-term strategy at a dedicated meeting at least annually.
■ At the beginning of each fiscal year, the Board formally reviews and approves our annual financial and operational targets and plans for
achieving those targets. The Board monitors performance against the company’s strategic objectives and financial targets throughout the
year and helps support the integrity of our financial results.
■ The Board critically reviews how we allocate our capital resources, including acquisition activity, significant capital investments, and return
of capital programs. These strategic actions and investments are reviewed and approved by the Board, or a committee, following open and
engaged discussions.
■ At each Board meeting, the Board reviews and discusses with management a set of detailed operating reports, including current financial
performance versus plan. Focused discussions of key business issues, strategic developments and financial considerations are held at each
Board meeting.
■ At each Board meeting, the independent directors meet in executive session. These meetings are led by our Lead Independent Director.
18
BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Oversight of Risk Issues
Board of Directors
Our Board of Directors oversees our risk management processes and procedures as well as material risks to our business. The Board
of Directors exercises this oversight responsibility directly and through its committees. The oversight responsibility of the Board of
Directors and its committees is informed by reports from our management team that provide visibility into our key areas of material
risk. These include broad strategic, operational and financial discussions, as well as more focused discussions on specific topics.
Material business and strategic risks, including succession planning for our CEO and executive officers, are reviewed by the full
Board of Directors. While the Board of Directors has ultimate risk oversight with respect to risks related to privacy and cybersecurity
and receives periodic updates on these risks and mitigation strategies, the Audit Committee also receives quarterly updates from
EA’s information security team that review the steps taken by management to monitor and mitigate these risks.
Audit Committee
■ Risks related to financial reporting, internal controls and procedures, investments, tax and treasury matters and legal compliance.
■ Oversees our enterprise risk management program, which identifies and prioritizes material risks for the Company.
■ Areas of material financial risk, as appropriate.
nominating and
Governance Committee
■ Risks related to director and emergency CEO succession
planning.
■ Risks related to our corporate governance policies and
practices.
■ Risks related to human capital management and culture.
Compensation Committee
■ Reviews compensation-related risks.
■ Risks related to pay equity.
Each of the committees regularly reports to the full Board of Directors on matters relating to the specific areas of risk that each
committee oversees.
Compensation Risk Assessment
As part of their risk oversight efforts, the Compensation Committee evaluates our compensation programs to determine whether the design
and operation of our policies and practices could encourage executives or employees to take excessive or inappropriate risks that would
be reasonably likely to have a material adverse effect on the Company and has concluded that they do not. In making that determination,
the Compensation Committee considered the design, size and scope of our cash and equity incentive programs and program features
that mitigate against potential risks, such as payout caps, clawbacks, the quality and mix of performance-based and “at risk” compensation,
and, with regard to our equity incentive programs, the stock ownership requirements for our executives. The Compensation Committee has
concluded that our compensation policies and practices strike an appropriate balance of risk and reward in relation to our overall business
strategy, and do not create risks that are reasonably likely to have a material adverse effect on the Company. The “Compensation Discussion
and Analysis” section below generally describes the compensation policies and practices applicable to our named executive officers.
19
2023 PROXY STATEMENT BOArD Of DIrECtOrs AnD COrPOrAtE GOvErnAnCE
Oversight of ESG Matters
The Board of Directors oversees ESG matters directly and through its committees.
Human Capital Management
Overall EsG Performance
The Board reviews material human capital management programs,
practices and strategies, including organizational health at least
twice annually.
DEI
The Nominating and Governance Committee reviews our initiatives
related to diversity, equity and inclusion, and will review our goals
and progress towards achieving those goals at least twice annually.
The Nominating and Governance Committee reviews topics such as
our overall ESG performance, disclosures and investor engagement
at least twice annually and surfaces our progress to the Board. These
updates include a review of market developments, frameworks,
evolving stakeholder expectations and EA’s potential responses.
Environmental sustainability
The Nominating and Governance Committee oversees our
commitments to environmental sustainability at least annually.
talent and Culture
The Nominating and Governance Committee reviews efforts to
maintain a safe and healthy culture, including key cultural indicators,
at least twice annually.
Pay Equity
At least annually, the Compensation Committee reviews
our commitments to pay equity.
20
Board of directors and corporate Governance
Board Policies
Related Persons Transactions Policy
Our Board of Directors has adopted a written Related Person Transactions Policy that describes the procedures used to process,
evaluate, and, if necessary, disclose transactions between the Company and its directors, officers, director nominees, greater than 5%
beneficial owners, or an immediate family member of any of the foregoing. We review any transaction or series of transactions which
exceeds $120,000 in a single fiscal year and in which any related person has a direct or indirect interest, as well as any transaction for
which EA’s Global Code of Conduct or Conflict of Interest Policy would require approval of the Board of Directors.
Once a transaction has been identified, the Audit Committee (if the transaction involves an executive officer) or the Nominating
and Governance Committee (if the transaction involves a director) will review the transaction at the next scheduled meeting of such
committee. Transactions involving our CEO will also be reviewed by our Lead Independent Director. Transactions involving employee
compensation will also be submitted to the Compensation Committee for approval. If it is not practicable or desirable to wait until
the next scheduled meeting, the chair of the applicable committee considers the matter and reports back to the relevant committee
at the next scheduled meeting. In determining whether to approve or ratify a transaction, our committees (or the relevant chair of
such committee) consider all of the relevant facts and circumstances available and transactions are approved only if they are in, or
not inconsistent with, the best interests of EA and its stockholders. No member of a committee reviewing a potential related person
transaction may participate in any review, consideration or approval of any transaction if the member or their immediate family member is
the related person.
Related Persons Transactions
Nicholas Bruzzo, the son of our former Chief Experience Officer, and Abby Moss, the daughter of our former Chief Technology Officer
are each employed by the Company. Mr. Bruzzo is employed in our game development studios and Ms. Moss is employed as a software
engineer. The aggregate value of each of Mr. Bruzzo’s and Ms. Moss’ total compensation in fiscal year 2023 (salary, bonus, and the value of
any equity awards granted during fiscal year 2023) was consistent with compensation provided to other EA employees in similar positions
and was less than $200,000. The Audit Committee and the Compensation Committee reviewed and approved Mr. Bruzzo’s and Ms. Moss’
employment and compensation in accordance with our Related Person Transactions Policy.
Global Code of Conduct and Corporate Governance Guidelines
We have adopted a Global Code of Conduct that applies to our directors, and all employees, including our principal executive officer,
principal financial officer, principal accounting officer, and other senior financial officers, as well as Corporate Governance Guidelines. These
documents, along with our organizational documents and committee charters, form the framework of our corporate governance. Our Global
Code of Conduct, Corporate Governance Guidelines and committee charters are available in the Investor Relations section of our website
at http://ir.ea.com. We post amendments to, or waivers from our Global Code of Conduct in the Investor Relations section of our website.
Stockholder Communications with the Board of Directors
EA stockholders may communicate with the Board of Directors as a whole, with a committee of the Board of Directors, or with an individual
director by sending a letter to EA’s Corporate Secretary at Electronic Arts Inc., 209 Redwood Shores Parkway, Redwood City, CA 94065,
or by sending an email to StockholderCommunications@ea.com. Our Corporate Secretary will forward to the Board of Directors all
communications that are appropriate for the Board of Directors’ consideration. For further information regarding the submission of
stockholder communications, please visit the Investor Relations section of our website at http://ir.ea.com.
21
2023 PROXY STATEMENT Board of directors and corporate Governance
Director Compensation
Our Compensation Committee is responsible for reviewing and recommending to our Board of Directors the compensation paid to
our non-employee directors. Their review occurs every two years, with the last review occurring in February 2022, in consultation with
our independent compensation consultant Semler Brossy. Non-employee directors are paid a mix of cash and equity compensation
consisting of (1) an annual board retainer, (2) committee, committee chair, and lead director fees, as applicable, and (3) an annual equity
award, as described below.
Fees Earned in Cash
The table below reflects the annualized components of fees earned in cash for non-employee directors for fiscal year 2023. For more
information regarding the specific compensation received by each non-employee director during fiscal year 2023, see the “Fiscal Year
2023 Director Compensation Table” table below.
Annual Board Retainer
Annual Board Retainer
Committee Fees
Service on the Audit Committee
Service on the Compensation Committee
Service on the Nominating and Governance Committee
Lead Director and Committee Chair Fees
Lead Director*
Chair of the Audit Committee
Chair of the Compensation Committee
Chair of the Nominating and Governance Committee
Amount ($)
60,000
Amount ($)
15,000
12,500
10,000
Amount ($)
50,000
15,000
12,500
10,000
* Effective May 1, 2022, the Lead Director fee was increased to $50,000 (from $25,000) following Semler Brossy’s competitive analysis of our non-employee director
compensation against our compensation peer group to bring this fee in line with the median for our peer group.
Under the terms of our equity incentive plan, non-employee directors may elect to receive all or part of their fees in the form of EA
common stock. As an incentive for our non-employee directors to increase their stock ownership in EA, non-employee directors making
such an election receive vested shares of common stock valued at 110% of the cash compensation they otherwise would have received.
These shares are awarded via the grant and immediate exercise of a stock option having an exercise price equal to the fair market value of
our common stock on the grant date, which is the first trading day of each quarter of the Board year. Ms. Gonzalez, Mr. Huber, Ms. Roche,
Mr. Simonson, and Ms. Ueberroth received all or part of their fees in the form of our common stock during fiscal year 2023.
Equity Compensation
In fiscal year 2023, non-employee directors also received an annual equity award of restricted stock units (“RSUs”) with a grant date fair
value of approximately $260,000. These RSUs were granted upon election or re-election to the Board of Directors at our 2022 annual
meeting. RSUs vest in full on the first anniversary of the grant date (or, if earlier, the date of the next annual meeting of stockholders
following the grant date), subject to the non-employee director’s continuous service as a member of the Board of Directors through such
date. For any director who may have previously elected to defer settlement of RSUs, the receipt of shares underlying vested RSUs may be
deferred until the fifth or tenth anniversary of the original vesting date or the date the director terminates service with the Company.
Other Benefits
Non-employee directors who are not employed with any other company are offered an opportunity to purchase certain EA health, dental
and vision insurance while serving as a director. Participating directors pay 100% of their own insurance premiums. In addition, we offer
non-employee directors the opportunity to receive cybersecurity services to protect their privacy, home networks, and devices, where they
may conduct EA business. The Company is charged an annual fee per participating director; currently, the per person annual fee is less than
$4,000 for these services.
22
Board of directors and corporate Governance
Fiscal Year 2023 Director Compensation Table
The following table shows compensation information for each of our non-employee directors during fiscal year 2023. Mr. Wilson, our CEO,
does not receive any compensation for his service on our Board of Directors.
Name
Kofi a. Bruce
Leonard s. coleman*
rachel Gonzalez
Jeffrey t. Huber
talbott roche
richard a. simonson
Luis a. Ubiñas
Heidi Ueberroth
Fees Earned
or Paid in Cash
($)(1)
75,000
20,625
70,000
75,000
85,000
90,000
136,250
72,500
Stock
Awards
($)(2)
259,879
—
259,879
259,879
259,879
259,879
259,879
259,879
Option
Awards
($)(3)
—
—
7,022
7,445
8,538
8,956
—
7,229
Total
($)
334,879
20,625
336,901
342,324
353,417
358,835
396,129
339,608
* Mr. Coleman retired from the Board of Directors effective August 11, 2022.
(1) As discussed above, non-employee directors may elect to receive all or part of their fees in the form of EA common stock. See footnote 3 for additional information
regarding the number of shares received in lieu of cash compensation by those non-employee directors who made such an election.
(2) Represents the aggregate grant date fair value of the annual RSU award granted to the non-employee directors and is calculated based on a closing price of
$129.68 per share for our common stock on the August 11, 2022 grant date. Grant date fair value is determined for financial statement reporting purposes in
accordance with FASB ASC Topic 718. For additional information regarding the valuation methodology for RSUs, see Note 15 “Stock-Based Compensation and
Employee Benefit Plans,” to the Consolidated Financial Statements in our Annual Report. As of April 1, 2023 (the last day of fiscal year 2023), each of our current
non-employee directors held 2,004 unvested RSUs.
(3) Non-employee directors may elect to receive all or part of their fees in the form of EA common stock, and directors making such an election receive common stock
valued at 110% of the cash compensation they would have otherwise received. These shares are awarded via the grant and immediate exercise of a stock option
having an exercise price equal to the fair market value of our common stock on the grant date. The values represent the premium received for shares in lieu of
compensation. As of April 1, 2023 (the last day of fiscal year 2023), the aggregate number of outstanding and unexercised shares of our common stock subject to
stock options beneficially owned by our non-employee directors was as follows: Mr. Huber - 11,872 and Mr. Ubiñas - 4,872.
23
2023 PROXY STATEMENT Board of directors and corporate Governance
The table below sets forth information on the shares received upon immediate exercise of the option(s) granted to directors who elected
to receive all or part of their fees in the form of EA common stock during fiscal year 2023.
Grant
date
5/2/2022
8/1/2022
11/1/2022
2/1/2023
5/2/2022
8/1/2022
11/1/2022
2/1/2023
5/2/2022
8/1/2022
11/1/2022
2/1/2023
5/2/2022
8/1/2022
11/1/2022
2/1/2023
5/2/2022
8/1/2022
11/1/2022
2/1/2023
Exercise
Price
($)
120.00
130.87
126.27
116.76
120.00
130.87
126.27
116.76
120.00
130.87
126.27
116.76
120.00
130.87
126.27
116.76
120.00
130.87
126.27
116.76
Shares Subject
to Immediately
Exercised Stock
Option Grants
Grant Date
Fair Value
($)
160
147
153
165
172
157
164
176
195
179
185
200
206
189
196
212
166
152
158
171
19,200
19,238
19,319
19,265
77,022
20,640
20,547
20,708
20,550
82,445
23,400
23,426
23,360
23,352
93,538
24,720
24,734
24,749
24,753
98,956
19,920
19,892
19,951
19,966
79,729
Name
rachel Gonzalez
Jeffrey t. Huber
talbott roche
richard a. simonson
Heidi Ueberroth
24
Compensation Discussion & Analysis
For fiscal year 2023, EA’s named executive officers (“NEOs”) were:
■ Andrew Wilson, Chief Executive Officer;
■ Chris Suh, former Chief Financial Officer;
■ Laura Miele, President, EA Entertainment, Technology and Central Development and former Chief Operating Officer;
■ Chris Bruzzo, former Chief Experience Officer;
■ Mala Singh, Chief People Officer; and
■ Kenneth Moss, former Chief Technology Officer.
On June 20, 2023, we announced organization updates with changes to the executive team. Stuart Canfield was appointed Executive
Vice President, Chief Financial Officer, effective June 20, 2023, following the decision by Chris Suh to step down with a departure date
of June 30, 2023. In addition, we announced that Laura Miele has been appointed President of EA Entertainment, Technology and Central
Development, effective June 20, 2023. In this role, she will oversee the development and production of key games and services in the
EA Entertainment portfolio, while continuing to lead central technology and development services to drive execution and operational
efficiencies. The announcement also noted that Chris Bruzzo informed us of his decision to retire with an effective date of June 30,
2023 and he is succeeded by David Tinson as Executive Vice President, Chief Experience Officer. Mr. Moss departed the Company on
September 2, 2022.
Executive Summary
Fiscal Year 2023 Business Highlights
During fiscal year 2023, we continued to deliver award-winning games and services to our players and generated strong financial and
operating results. Hundreds of millions of players around the world came together and connected through our games, live services, and
content. We continued our efforts to build more diverse and inclusive teams and games, support our communities, and ensure that our
workplace culture is one of respect and allyship. We again engaged with our top institutional stockholders to understand their views on
topics such as executive compensation, governance, and ESG issues.
Our executive compensation program is designed to reward our NEOs for the achievement of Company-wide financial, operating, and
strategic objectives and the creation of long-term stockholder value. These measures formed the basis of executive compensation
decisions made by the Compensation Committee and Board of Directors in fiscal year 2023.
Key Highlights for the Fiscal Year
Financial and Operational
Performance
■ Net revenue of $7.426 billion.
■ Net bookings of $7.341 billion.
■ Operating cash flow of $1.550 billion.
■ Diluted earnings per share of $2.88.
■ Record live services and other net revenue of $5.489 billion.
■ Returned $1.295 billion to stockholders through a repurchase of 10.4 million shares.
■ Paid quarterly cash dividends totaling $210 million.
Key Strategic and Operating
Achievements
■ Launched EA SPORTS FIFA 23, the best-selling title in franchise history, as well as the #1-selling
game in Europe for calendar year 2022.
ESG Efforts and
Achievements
■ Launched Madden NFL 23, the best-selling title in franchise history across console and
PC platforms.
■ Launched seven new releases and provided over 450 content updates across 51 titles.
■ Promoted transparency regarding our workforce representation data by voluntarily disclosing
our EEO-1 diversity data; and disclosed attrition data by gender and race/ethnicity in our most
recent Impact Report.
■ Increased the level of underrepresented talent in our workforce, including by sustaining year-over-
year increases of executive talent from underrepresented groups for the third year in a row.
■ Established fiscal year 2023 as our baseline year for Scope 1 and 2 emissions and will disclose
additional Scope 3 categories in our upcoming 2023 Impact Report.
25
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Engagement with
Stockholders
■ Leading up to our 2023 Annual Meeting, we reached out to stockholders collectively holding
approximately 61% of our outstanding stock to understand their views on compensation,
governance and ESG issues. We held engagement meetings with every stockholder who
accepted, totaling 15 meetings with stockholders representing approximately 40% of our
outstanding stock.
■ Discussed the responsive actions we have taken in recent years on compensation and governance
matters, as well as solicited feedback on our current executive compensation program.
Stockholder Engagement
We have a robust year-round stockholder outreach program, with formal engagement efforts occurring in both the summer and winter.
JUNE - AUGUST
Ahead of our annual meeting, we seek to
engage with investors to answer questions and
understand their views on matters relating to
our annual proxy statement
APRIL - MAY
Review feedback from off-season
engagement, and consider any enhancements
to our executive compensation program,
governance structure and ESG programs
SEPTEMBER - FEBRUARY
Review stockholder votes at our most recent
annual meeting, identify potential follow-
up areas, and evaluate our governance and
executive compensation practices
MARCH - MAY
Conduct meetings with stockholders and proxy
advisors to consider any issues raised and to
solicit feedback on governance, executive
compensation, and other topics of interest
2022 Say-on-Pay Vote
At our 2022 Annual Meeting, our advisory say-on-pay proposal received the support of 92% of the votes cast. The Board of Directors and
Compensation Committee believe that this favorable result affirms stockholder support for our executive compensation program and
philosophy following the significant changes we have made following our 2020 and 2021 say-on-pay votes. These changes are described
in detail below and were based on stockholder feedback following extensive outreach and engagement efforts by our Compensation
Committee and our executives. In considering last year’s favorable vote result, the Compensation Committee determined that the
changes made to our executive compensation program are largely supported by our stockholders and should remain in effect.
Stockholder Engagement in Fiscal Year 2023
Our dialogue with stockholders in formal engagements has helped us evolve our executive compensation program. We continued our
investor outreach in fiscal year 2023, contacting our top 25 stockholders in advance of our 2023 Annual Meeting and offering meetings
to discuss our executive compensation program. During these meetings, we discussed the substantial enhancements we made to our
executive compensation program in recent years.
26
Our executive compensation program continues to build on changes made in prior years. Below is a summary of stockholder feedback
provided as it affects our fiscal year 2023 program.
What We Heard from Stockholders
Our Actions
COMPENSAtiON DiSCuSSiON & ANALySiS
Severance/termination Pay
Would like to see limits on severance
payable to senior management
Annual Performance Cash
Bonus Program
Would like to see a more formulaic
approach to the annual bonus payouts
Fiscal year 2023 ESG Goals
Would like ESG goals to feature
more prominently in our
compensation program.
Long-term Equity incentives:
PRSu Program
Some stockholders would like to see
the weighting of long-term equity
incentives to be more heavily weighted
towards PRSUs.
Action:
In August 2022, we adopted a cash severance policy for executive officers following
feedback we received during our stockholder engagement process. The policy prohibits
the Company from entering into any arrangement that provides cash severance benefits
exceeding 2.99 times the sum of an executive officer’s base salary plus target bonus
opportunity without seeking shareholder ratification.
Action:
Beginning with fiscal year 2023, we enhanced the rigor of our Company bonus pool
funding formula:
■ Increased the financial performance weighting of Company bonus pool funding
to 70% for our CEO and 60% for our CFO and COO, with the remaining portion
of Company bonus pool funding based on business performance, including ESG goals
(instead of the 50/50 funding split that applies to all other employees).
■ Implemented an enterprise-level scorecard for the strategic and operating
objectives that drive funding of the business performance component of the Company
bonus pool. The scorecard measured our performance against goals across six key
strategic objectives established for the fiscal year: Strategy; Amazing Content and
Experiences; Social Ecosystems and Creative Autonomy; Aggregation and Distribution;
Talent; and Culture and Work. Each key objective is weighted at 20% of the business
performance component of the Company bonus pool funding formula, except that
Talent and Culture and Work (our ESG goals relating to human capital management
(HCM)) are together weighted at 20%.
Action:
Beginning with fiscal year 2023, ESG goals are included in the enterprise-level scorecard
under our annual performance cash bonus program, and our achievement against them
will impact funding of the business performance component of the Company bonus pool
funding formula. These ESG goals are collectively weighted at 20% of the scorecard, and
relate to talent, culture, and environmental sustainability measures. We continue to consider
other meaningful ways that ESG initiatives and related developments can be tied to our
compensation program.
Action:
Beginning with fiscal year 2023, we increased the portion of performance-based equity
for our CFO and COO—each of their annual equity incentive awards will consist of 60%
performance-based restricted stock units, consistent with the award mix put in place for
our CEO effective for fiscal year 2022.
27
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Pay Practices Implemented Based on Earlier Stockholder Feedback
In addition, we maintain the following pay practices that have been established over the years since our 2020 Annual Meeting.
No Special
Equity Awards
Performance-
Based Long-
term Equity
incentives
(PRSus)
Annual
Performance
Bonus
Stock
Ownership
No granting of any special equity awards to NEOs through at least the end of fiscal year 2026.
■ Inclusion of net bookings and operating income financial performance metrics, in addition to the existing
TSR metric.
■ Three-year cliff vesting on awards.
■ Elimination of the lookback feature from the relative TSR component of legacy PRSUs.
■ Increasing the threshold and adjusting the relative TSR payout scale, with no vesting for performance below the
25th percentile and above median performance required for target payout.
■ Determination that the CEO’s annual equity award will consist of 60% PRSUs.
■ Enhanced disclosure of our program structure, non-financial goals, and how payouts are determined.
■ Capping NEO bonuses at 2x target bonus opportunity.
Increasing stock ownership guidelines, including from 5x to 10x salary for CEO.
Clawback
Expanding our Clawback Policy to cover cash as well as equity incentives.
28
COMPENSAtiON DiSCuSSiON & ANALySiS
Compensation Principles
Philosophy and Objectives
As a global leader in digital interactive entertainment, we believe that the skills, expertise, and experience of our employees, including our
NEOs, are the critical factors that contribute to our overall performance and enhance stockholder value. To drive continued successful
operational and financial performance, we must attract, motivate, reward, and retain top executive talent. The Board of Directors and
the Compensation Committee strive to make executive compensation decisions that follow a competitive pay-for-performance
compensation philosophy that is in the long-term best interests of our stockholders. Accordingly, our executive compensation program is
designed to:
■ Provide highly competitive compensation to attract and retain top executive talent;
■ Create direct alignment with our stockholders by providing equity ownership in the Company;
■ Align pay and performance by creating incentives tied to our business results;
■ Reward and motivate strong individual performance and leadership; and
■ Avoid undue compensation-related risk.
Compensation and Governance Practices
The Compensation Committee regularly reviews our executive compensation program to ensure that we maintain strong governance
standards in our executive compensation program. Below is a summary of our key compensation and governance practices.
What We Do
What We Don’t Do
% Structure executive compensation to link pay
X No “single-trigger” change in control arrangements
X No excise tax gross-ups upon a change in control
X No executive employment contracts (other than as
required by local jurisdictions)
X No repricing of options without stockholder approval
X No hedging or pledging of EA stock
X No payment of dividends or dividend equivalents on
unearned or unvested equity awards
and performance
% Provide a high percentage of variable, at-risk pay;
approximately 94% of our CEO’s and 92% of our other
NEOs’ compensation is variable and at-risk
% Cap performance-based annual bonus and long-term
equity incentive payouts for NEOs
% Prohibit arrangements providing cash severance benefits
that exceed a capped amount
% Require our executives to satisfy robust stock holding
requirements
% Conduct regular stockholder outreach
% Perform an annual risk assessment of our executive
compensation program
% Evaluate our compensation peer group at least annually
% Engage an independent compensation consultant to
advise the Compensation Committee
% Conduct formal executive succession planning
29
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Process for Determining Our NEOs’ Compensation
Participant
Board of Directors
Role in the Executive Compensation Determination Process
■ Approves the target total direct compensation for our CEO, in consultation with the Compensation Committee
and the Compensation Committee’s independent compensation consultant Semler Brossy.
Compensation
Committee
independent
Compensation
Consultant
■ Approves the target total direct compensation for our NEOs (other than our CEO) after receiving input, at
the Compensation Committee’s request, from our CEO, our Chief People Officer, and the Compensation
Committee’s independent compensation consultant.
■ Reviews, approves, and recommends to the Board of Directors, CEO pay.
■ Semler Brossy advises on our executive compensation program and advises on changes to our compensation
program and other executive compensation-related developments and trends, including by conducting a
comprehensive analysis of our executive compensation program using publicly-available information on peer
companies to compare each element of our executive compensation program.
■ Semler Brossy also assisted the Compensation Committee with its review of our non-employee director
compensation in fiscal year 2023.
■ Semler Brossy attended all meetings held by the Compensation Committee.
■ The Compensation Committee has reviewed the independence of Semler Brossy, which provides no services to
the Company other than described above, and determined that Semler Brossy’s engagement did not raise any
conflicts of interest.
Management
■ Our CEO and Chief People Officer assist the Compensation Committee by providing information on corporate
and individual performance, market compensation data and practices, and other executive compensation matters.
■ At the beginning of each fiscal year, our CEO and Chief People Officer review the performance of our other NEOs
for the prior fiscal year and make recommendations to the Compensation Committee regarding the annual base
salary, bonus targets, and annual equity awards for our NEOs (other than with respect to themselves).
Executive Compensation Decision-Making Approach
The Board of Directors and the Compensation Committee believe that executive compensation should be evaluated holistically. They
consider a variety of factors to guide their compensation decision-making process for our NEOs. These include an evaluation of market
trends and the competitive landscape for executive talent, which includes a review of the market practices of our peer group and other
technology companies with which we compete for talent. Use of such comparative market data from the peer group and broader survey
data for technology companies allows us to assess the appropriateness and reasonableness of compensation levels and mix to determine
if our compensation program aligns pay with performance, fairly rewards our executives, and provides adequate retention and incentive
value. In addition, in determining executive compensation, the Board of Directors and Compensation Committee also consider corporate
performance, internal compensation alignment, and factors unique to each NEO, such as individual performance, scope and complexity of
the role, experience, and tenure.
30
COMPENSAtiON DiSCuSSiON & ANALySiS
Compensation Peer Group
Each year, the Compensation Committee, with the independent compensation consultant’s advice and input, reviews and selects a group
of peer companies to use as a reference to better understand the competitive market for executive talent in our industry. As part of this
process, the Compensation Committee engages in a quantitative and qualitative assessment to identify companies that are similar to
us, based on a combination of factors including: size; revenue and market capitalization; business fit; whether they are in relevant industry
pillars or are companies with which we compete for executive talent; and other relevant factors, including the number of current peer
companies that identify EA as a peer. Where some companies may not be similar in size to us based on quantitative factors, they still may
be included in our peer group based on the qualitative factors described above.
For fiscal year 2023, the Compensation Committee approved a peer group of 19 companies based on the factors listed above. As a result
of this review, as compared to the fiscal year 2022 peer group, the Compensation Committee removed Adobe Inc., Salesforce, Inc., and
NVIDIA Corporation due to their outsized market capitalization, and Hasbro, Inc. due to its no longer being deemed a relevant business fit.
To replace these companies and ensure the peer group was of sufficient size, the Compensation Committee added Airbnb, Inc., Block,
Inc., Snap Inc., Synopsys, Inc., and Sirius XM Holdings, Inc., companies that met all or some of the factors described above.
Gaming
Activision Blizzard, Inc.
Consumer-Oriented Technology /
Software
Airbnb, Inc.
Intuit Inc.
Media / Entertainment
Warner Bros. Discovery, Inc.
Take-Two Interactive Software, Inc.
Autodesk, Inc.
ServiceNow, Inc.
IAC/InteractiveCorp
Zynga Inc.
Block, Inc.
Booking Holdings Inc.
eBay, Inc.
Expedia Group, Inc.
Synopsys, Inc.
Workday, Inc.
VMware, Inc.
Netflix, Inc.
Sirius XM Holdings, Inc.
Snap Inc.
Looking ahead to fiscal year 2024:
For fiscal year 2024, the Compensation Committee, in consultation with its independent compensation consultant, reviewed
the factors detailed above to validate current peer companies and identify the appropriate peer group for that year. In
connection with such review, the Compensation Committee approved a peer group for fiscal year 2024 consisting of the
same companies as the fiscal year 2023 peer group, except that Zynga Inc. was removed due to the closing of its acquisition
by Take-Two Interactive Software, Inc. in May 2022, and Activision Blizzard, Inc. will be removed upon the closing of its
acquisition by Microsoft Corporation.
31
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Our NEOs’ Fiscal Year 2023 Compensation
Target Total Direct Compensation for Fiscal Year 2023
Our executive compensation program is designed to motivate and reward performance against our financial and strategic priorities. More
specifically, this approach rewards the achievement of Company-wide financial and business objectives, individual performance, and the
creation of long-term value for stockholders, while also recognizing the dynamic and highly competitive nature of our business and the
market for top executive talent.
For fiscal year 2023, 94% of our CEO’s target total direct compensation opportunity and 92% of the average of our other NEOs’ target
total direct compensation opportunity was at-risk in the form of an annual performance cash bonus opportunity, and long-term equity
awards comprised of PRSUs and RSUs, as set forth below.
CEO
NEOs (Excluding CEO)
17.8% Cash
(Base & Bonus Opportunity)
16.4% Cash
(Base & Bonus Opportunity)
5.9%
49.3%
11.9%
94.1%
At-Risk
(Bonus Opportunity,
RSU & PRSU)
32.9%
8.2%
45.2%
8.1%
91.8%
At-Risk
(Bonus Opportunity,
RSU & PRSU)
38.4%
82.2% Equity
(RSU & PRSU)
Fixed (Base)
Bonus Opportunity
RSU
PRSU
83.6% Equity
(RSU & PRSU)
Our Elements of Pay
The Compensation Committee believes that the target total direct compensation for each NEO should be consistent with market
practices for executive talent, allow us to attract and retain the highest caliber of executive talent in our industry, and reflect each NEO’s
individual experience, responsibilities, and performance. There are three main elements of NEO compensation: (1) annual base salary,
(2) annual performance cash bonuses, and (3) long-term equity incentive awards.
Base Salary
Key purpose and features
■ Serves as a fixed cash component that is market competitive for the role to attract and retain high-performing executives.
■ The following factors are considered when determining NEO salaries: individual performance; the market for similar positions,
including the pay practices for comparable positions at the companies in our peer group; level of responsibilities; complexity of
role; experience; and internal compensation alignment.
32
As part of its May 2022 annual compensation review, the Compensation Committee—or the Board of Directors, in the case of
Mr. Wilson—considered the above factors and determined that there would be no increases in base salaries for our NEOs for fiscal year 2023.
COMPENSAtiON DiSCuSSiON & ANALySiS
Mr. Wilson
Mr. Suh
Ms. Miele
Mr. Bruzzo
Ms. Singh
Mr. Moss
Base Salary for
Fiscal Year 2023 ($)
(Represents 0% Increase
from Fiscal Year 2022)
1,300,000
700,000
800,000
750,000
625,000
750,000
Annual Performance Cash Bonus Awards
Key purpose and features
■ Annual bonus awards are designed to motivate our executives to achieve challenging annual performance goals that are
important to our long-term growth.
■ Capped at 200% of target.
■ Payouts based on (1) Company Performance, which is based on Company financial performance and Company business
performance to balance our annual financial performance with our execution against strategic and operating objectives, and
(2) individual performance.
■ The Company financial performance component of Company Bonus Pool Funding is weighted at 70% for our CEO, 60% for our
CFO and COO, and 50% for our other NEOs, with the Company business performance component weighted at 30%, 40%, and
50%, respectively.
■ A threshold level of Company financial performance must be achieved to fund that portion of the Company bonus pool.
Our NEOs participate in the Executive Bonus Plan, which governs bonuses paid to our Section 16 officers and operates in conjunction with
the EA Bonus Plan, our Company-wide bonus plan. The formula for calculating each payout under the annual performance cash bonus
program for our NEOs is as follows:
BASE
SALARY
X
TARGET
BONUS
PERCENTAGE
(% OF BASE
SALARY)
X
COMPANY PERFORMANCE
(COMPANY BONUS POOL FUNDING)
50-70%
Company Financial
Performance
30-50%
Company Business
Performance
X
INDIVIDUAL
PERFORMANCE
MODIFIER
(IPM)
=
NEO BONUS
PAYOUT
Process to Determine Performance Cash Bonus Awards
In the first quarter of each fiscal year, the Compensation Committee determines the Executive Bonus Plan participants, performance
period, and performance measures. All NEOs at the time were selected to participate in the Executive Bonus Plan for fiscal year 2023.
1
2
3
4
Approve target bonus
percentages and maximum
award amounts
Set performance goals
Determine Company bonus
pool funding
Conduct individual
performance assessments
and determine individual
performance modifiers (IPMs)
Step 1: Approve Target Bonus Percentages and Maximum Award Amounts
APPROVE TARGET BONUS PERCENTAGES
Each fiscal year, the Compensation Committee—or the Board of Directors, in the case of Mr. Wilson—sets the amount of the target annual
performance cash bonus as a percentage of each NEO’s base salary (“target bonus”) based on factors including individual performance,
the market for similar positions, level of responsibilities, complexity of role, pay practices at our peer group for comparable positions,
and internal compensation alignment. As part of its review, the Compensation Committee—or the Board of Directors, in the case of
Mr. Wilson—determined that there would be no increases in the target bonus opportunities for our NEOs for fiscal year 2023.
33
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Fiscal Year 2023 Target Bonus Percentages
Mr. Wilson
Mr. Suh
Ms. Miele
Mr. Bruzzo
Ms. Singh
Mr. Moss(1)
Bonus Eligible Salary
for Fiscal Year 2023
($)
Target Bonus Percentage for
Fiscal Year 2023
(%)
1,300,000
700,000
800,000
750,000
625,000
750,000
200%
100%
110%
100%
90%
100%
(1) Mr. Moss was ineligible for an annual performance cash bonus award because he departed EA in September 2022.
MAXIMUM AWARD AMOUNTS
Our Compensation Committee believes that annual bonus awards should be capped to ensure that we maintain strong governance
standards in our executive compensation program and to mitigate incentives for undue risk taking. Under our Executive Bonus Plan,
bonuses for our NEOs are capped at two times the target bonus opportunity for each NEO.
Our CEO receives no bonus payout if our net income is less than 80% of our fiscal year 2023 financial plan.
Step 2: Set Performance Goals
Each NEO’s annual performance cash bonus award is tied to Company financial performance, as described immediately below. These
goals are set forth in our financial and strategic plan for fiscal year 2023 that our Board of Directors and Compensation Committee
reviewed with management in April 2022 and approved in May 2022. Effective for fiscal year 2023, we enhanced the rigor of our Company
bonus pool funding formula for our CEO, CFO and COO by increasing the financial performance weighting of the Company bonus
pool funding formula to 70%, 60% and 60%, respectively. The Compensation Committee believes that this mixed funding formula is
appropriate because it balances our annual financial performance with our execution against strategic and operating objectives, which
are critical drivers of our long-term success.
COMPANY FINANCIAL PERFORMANCE
For the financial performance component of our fiscal year 2023 Company bonus pool funding, the Compensation Committee approved
the following two equally weighted Company financial performance goals: non-GAAP net revenue and non-GAAP diluted earnings per
share. We believe these objective financial measures serve as clear goals for management to drive top-line growth and profitability with
responsible cost management. A threshold level of performance must be met for each of the relevant metrics in order to fund that
component of the bonus pool.
Fiscal Year 2023 Targets
The fiscal year 2023 non-GAAP net revenue and non-GAAP diluted earnings per share bonus funding targets were each set higher than
our fiscal year 2022 actual performance, as follows: non-GAAP net revenue of $8.150 billion and non-GAAP diluted earnings per
share of $7.97, weighted equally. Bonus pool funding is tied to our achievement of threshold, target, and maximum levels of performance
for the relevant metric, with no funding if the threshold levels of performance are not achieved.
When making compensation decisions for our NEOs, we use non-GAAP financial measures to evaluate the Company’s financial
performance and the performance of our management team against non-GAAP targets. These measures adjust for certain items that
may not be indicative of the Company’s core business, operating results, or future outlook.
For more information regarding our use of non-GAAP financial measures for our compensation programs, please refer to “About Non-
GAAP Financial Measures” in Appendix A below.
COMPANY BUSINESS PERFORMANCE
For the Company business performance component of our bonus pool funding, the Compensation Committee assesses performance
against the Company’s strategic priorities and objectives established for the fiscal year and approved by our Board of Directors.
Beginning in fiscal year 2023, we implemented an enterprise-level scorecard regarding the strategic and operational performance
objectives that drive funding of the Company bonus pool. For fiscal year 2023, the scorecard measures our performance against specific
goals for six key strategic objectives established for the fiscal year. The Compensation Committee reviews Company attainment against
these goals and objectives periodically during the fiscal year. See “Step 3: Determine Company Bonus Pool Funding—Company Business
Performance” below, for more information on these goals and objectives.
34
COMPENSAtiON DiSCuSSiON & ANALySiS
Step 3: Determine Company Bonus Pool Funding
In May 2023, the Compensation Committee approved a bonus pool funding percentage of 87.2% of aggregate NEO target bonuses,
as compared to 126.25% in the prior year. This funding percentage was based on equally weighted funding percentages of 74.4% for
Company financial performance and 100% for Company business performance, as indicated below.
COMPANY FINANCIAL PERFORMANCE
For purposes of measuring attainment against our fiscal year 2023 financial targets for bonus funding, our non-GAAP net revenue was
$7.341 billion and our non-GAAP diluted earnings per share was $7.12. Based on our attainment against our non-GAAP net revenue and
diluted earnings per share targets, the Compensation Committee approved a combined funding percentage of 74.4% of target for the
Company financial performance component with respect to our NEOs.
Threshold
Target
Maximum
Non-GAAP Net Revenue
(in billions)
Actual $7.341
Non-GAAP Diluted EPS
Funding Percentage(1)
$7.335
$8.150
$9.373
Actual $7.12
$6.77
$7.97
$9.96
Actual 74.4%
50%
100%
200%
(1) The funding percentage for achievement between the percentages designated above is interpolated on a straight-line basis.
Appendix A to this Proxy Statement provides a reconciliation between our non-GAAP financial measures and our audited
financial statements.
COMPANY BUSINESS PERFORMANCE
For fiscal year 2023, the Compensation Committee approved a funding percentage of 100% for the business performance component,
as compared to 119.5% in the prior year, based on its evaluation of our achievements against the weighted strategic and operating
objectives highlighted below.
Strategic and
Operating Objectives
Key Measures
Key Performance Highlights
Assessment
20% Strategy
■ Increase engagement score to
■ Achieved multi-point score
■ Slightly Missed Target
Align the Company behind
our strategic pillars, including
portfolio plans, financial
models and clear points of
integration with functional
and franchise strategies
20% Amazing Content &
Experiences
Expand engagement with
players who create, watch and
play within our great games
across HD and Mobile
a designated level
increase and remained one point
shy of goal
■ Develop long-range model to
gain multi-dollar EPS growth
over 3 years
■ Delivered model reflecting
■ Exceeded Target
meaningful EPS growth of 59%
over the specified target
■ Player engagement in HD
■ Achieved specified number of
■ Achieved Target
for a designated number of
session days
session days
■ Progress on tools for our
developers by increasing
overall survey score to a
designed level
■ Strong progress on developer
tools, including delivery of EA
game creation tools strategy
aligned with key studios
stakeholders and strengthening of
key strategic partnerships
■ Achieved Target
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2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Strategic and
Operating Objectives
20% Social Ecosystems &
Creative Autonomy
Invest in product innovations
and platform capabilities
to unlock the power of
social engagement and
player creativity
20% Aggregation & Distribution
Increase our player base
and expand partnerships
through sub distribution and
geographic expansion
10% talent
Attract and retain the talent
we need to power our
business while increasing
diversity representation
across all levels
Key Measures
Key Performance Highlights
Assessment
■ Develop and test creative
autonomy platform (CAP)
capabilities with targeted
number of players
■ Achieved participation by targeted
number of test players, with key
performance indicator targets
successfully met or exceeded in
all areas
■ Achieved Target
■ Launch beta platform for a
■ Achieved by completing
■ Achieved Target
specified title
scheduled delivery of betas
■ Establish baseline measure of
community sense of safety,
inclusion and fairness
■ Created benchmarks for safety,
inclusion, and fairness through
data analysis
■ Achieved Target
■ Increase Mobile DAU’s by
a designated percentage
and grow HD MAU’s by a
designated percentage
■ Surpassed goal by 21% in Mobile
■ Exceeded Target
DAU’s through strong engagement
in mobile; remained shy of goal on
full year HD MAUs
as to Mobile DAU’s;
Missed Target as to
HD MAU’s
■ Increase number of player
■ Surpassed goal through
■ Exceeded Target
accounts to specified target
strong engagement across the
games portfolios
■ Increase EA Play quarterly
active members by a
designated percentage
■ Increased quarterly active
■ Missed Target
members but remained shy of goal
■ Increase players in Asia by a
designated percentage
■ Surpassed goal by 16% through
strong engagement in the region
■ Exceeded Target
■ Employee satisfaction score at
or above a designated level
■ Surpassed goal by 4 points based
on results of employee survey data
■ Exceeded Target
■ Critical talent retention at a
■ Surpassed goal by 8% through
■ Exceeded Target
designated level
■ Increase global
representation of women and
underrepresented groups by
designated percentages
active efforts to retain top talent,
which have resulted in low attrition
■ Achieved targets for women and
certain underrepresented groups
through recruiting and retention
efforts, all the while laying the
groundwork for continued
increases among all groups;
missed one target
■ Slightly Missed Target
10% Culture & Work:
Build a culture of continual
improvement; where
employees know what is
expected, rewarded for their
performance and operate
in a work model that enables
productivity, well-being,
fairness, and equity. Evolve
our organization towards
environmental sustainability
■ Executive-level goal-setting to
drive workplace engagement
■ Future of work arrangements
goal
■ Multi-point increase in work/
life balance score
■ Establish FY23 as baseline
year for Scope 1 and 2
emissions and develop
measurement tools for key
Scope 3 emissions
■ Achieved by executive-level
■ Achieved Target
employees
■ Surpassed goal with 87%
participation by employees
■ Achieved targeted score,
resulting in the highest work/life
balance score to date
■ Successfully established Scope 1
and 2 baseline year by identifying,
describing and quantifying those
emissions; implemented process
to capture additional Scope 3
categories, with their disclosure to
follow in our 2023 Impact Report
■ Exceeded Target
■ Achieved Target
■ Achieved Target
36
COMPENSAtiON DiSCuSSiON & ANALySiS
Step 4: Conduct Individual Performance Assessments and Determine IPMs
Individual performance is a key factor in determining the amount of each NEO’s annual bonus. Each year, the Board of Directors for
Mr. Wilson, and the Compensation Committee, in consultation with Mr. Wilson and our Chief People Officer, for all NEOs except Mr. Wilson,
review and approve the individual performance objectives for the NEOs. Mr. Wilson’s individual performance objectives for fiscal year
2023 are based on non-GAAP financial objectives and strategic and operating objectives. For all other NEOs, the individual objectives
are based on strategic and operating objectives tailored to the functions led by each NEO and aligned to the achievement of our overall
fiscal year 2023 plan approved by the Board of Directors, as well as qualitative factors including leadership and talent development.
At the end of each fiscal year, the Board of Directors for Mr. Wilson, and the Compensation Committee, in consultation with Mr. Wilson and
our Chief People Officer, assess the individual performance of our NEOs and determine each NEO’s individual performance modifier, or
IPM, at a percentage between 0% and 200% (subject to the overall cap of 2x target bonus for the annual cash bonus award). Consistent
with our pay-for-performance philosophy, a higher individual performance assessment would result in a higher IPM, and vice-versa, so that
an executive with a lower assessment could receive less than his or her target bonus. If an executive meets a high level of performance
expectations, he or she would receive an IPM of 100% or greater. To receive an IPM of 200%, the NEO must demonstrate sustained, truly
extraordinary performance, and the Board of Directors and Compensation Committee expect that assigning an IPM at this level would
occur in rare circumstances only.
With the exception of our CEO, the performance assessment for each of our NEOs is based on an assessment of each executive’s
performance, considering his or her overall performance for the year; impact on our business and culture; demonstrated results; the
executive’s strong leadership; and execution of key objectives. No single factor is determinative. For Mr. Wilson, the Board of Directors
considers achievement of the financial and strategic objectives that were established for him for the fiscal year.
Determination of Fiscal Year 2023 Performance Cash Bonus Awards for our NEOs
The key results that influenced the Board of Directors’ decisions regarding Mr. Wilson’s performance are identified below. The Board of
Directors takes a holistic approach to evaluating the achievement of the CEO’s financial and strategic and operating objectives and does
not assign a specific weighting to any one factor within each of these two categories.
In determining the actual performance cash bonus awards for our other NEOs, Mr. Wilson and our Chief People Officer reviewed each
NEO’s achievements against the individual performance objectives for fiscal year 2023 and provided their recommendations to the
Compensation Committee for review and approval. The key results that influenced the Compensation Committee’s decisions regarding
each NEO’s individual performance are listed below.
37
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Mr. Wilson
Chief Executive Officer
individual Performance Modifier
After reviewing his achievements for fiscal year 2023, the Board of Directors approved an IPM of 115% for Mr. Wilson.
Key Highlights for Fiscal year 2023
In May 2023, the Board of Directors considered Mr. Wilson’s performance against the financial and strategic and operating
objectives for fiscal year 2023, as highlighted below.
Non-GAAP Financial Objectives 70%:
Net Revenue (in millions)
Diluted Earnings Per Share(2)
Target
$ 8,150
$ 7.16
Actual(1)
$ 7,341
$ 6.47
(1) Appendix A to this Proxy Statement provides a reconciliation between our non-GAAP financial measures and our audited financial statements.
(2) For purposes of measuring achievement of Mr. Wilson’s diluted earnings per share objective, a share count of 278 million was used.
Strategic Objectives Scorecard 30%:
Under Mr. Wilson’s leadership, the Company executed on key strategic and operating objectives that were established for fiscal
year 2023 under our enterprise-level scorecard, as detailed above in Step 3—Company Business Performance. These objectives
were designed to position Electronic Arts as a leading digital interactive entertainment platform by, among other things,
continuing to grow our player base in targeted ways, deepening player engagement across newer platforms, and strengthening
player networks and communities, all the while executing on greater business and financial strategies. These objectives were
also designed to focus on supporting our employees and creating a positive work environment, as well as to reinforce our
commitment to environmental sustainability.
In addition to these overarching strategic and operating objectives, the Board of Directors considered the following key
individual achievements when evaluating Mr. Wilson’s performance for fiscal year 2023.
Record-breaking Achievements in our top Franchises
Under Mr. Wilson’s leadership, we
■ launched EA SPORTS FIFA 23, the best-selling title in franchise history with the franchise growing net bookings by 10%
year-over-year;
■ launched Madden NFL 23, the best-selling title in franchise history across console and PC platforms; and
■ launched seven new releases and provided over 450 content updates across 51 titles.
Decisive Actions in the Face of Macro uncertainty
Under Mr. Wilson’s leadership, we
■ took deliberate action to reduce our expense base to preserve profitability and undertook restructuring initiatives to focus on
prioritizing investments to the Company’s growth opportunities;
■ adopted a five-year strategic plan focused on delivering long-term growth; and
■ navigated unprecedented industry consolidation by focusing on our key strategies: building games and experiences that
entertain massive online communities; creating blockbuster interactive storytelling; and amplifying the power of community in
and around our games with social and creator tools.
Commitments and Progress Across Our People, Players and Communities
Under Mr. Wilson’s leadership, we
■ strengthened inclusive and accessible player experiences through actions in our largest franchises, including EA SPORTS
FIFA 23, Apex Legends and The Sims 4;
■ grew underrepresented talent in executive (VP+) roles for the third consecutive year; and
■ evolved our leadership team to position EA for continued success, including restructuring the technology organization to
drive further innovation in our games and services.
38
COMPENSAtiON DiSCuSSiON & ANALySiS
Mr. Suh
Chief Financial Officer
Mr. Suh has served as Chief Financial Officer since March 1, 2022 and on June 20, 2023, EA announced Mr. Suh’s decision to step
down to pursue another opportunity with June 30, 2023 as his last day.
individual Performance Modifier
In May 2023, after reviewing his achievements for fiscal year 2023, the Compensation Committee approved an IPM of 110% for
Mr. Suh.
Key Highlights for Fiscal year 2023
Under Mr. Suh’s leadership during fiscal year 2023, the Company:
■ generated net revenue of $7.426 billion, a 6% increase
■ saw growth across EA’s broad portfolio and diverse
over fiscal year 2022;
■ achieved cash flow provided by operations of $1.550
billion, while continuing to efficiently manage our
operating expenses;
business models, including live services, for which we
achieved total net bookings of $7.341 billion for the fiscal
year; and
■ returned over $1.5 billion to stockholders through share
repurchases and quarterly dividends.
Ms. Miele
Chief Operating Officer
On June 20, 2023, EA announced that Ms. Miele has been appointed President, EA Entertainment, Technology and Central
Development, effective June 20, 2023. In this role, she will oversee the development and production of key games and services
in the EA Entertainment portfolio, while continuing to lead central technology and development services to drive execution and
operational efficiencies. Previously, as Chief Operating Officer, Ms. Miele managed company-wide operations.
individual Performance Modifier
In May 2023, after reviewing her achievements for fiscal year 2023, the Compensation Committee approved an IPM of 120.9%
for Ms. Miele.
Key Highlights for Fiscal year 2023
During fiscal year 2023, Ms. Miele:
■ oversaw the delivery of new games, services, and
content, generating platform growth, including:
•
launching 7 major new games during fiscal year 2023
and provided over 450 content updates across 51
titles, including EA SPORTS FIFA 23 (the best-selling
title in franchise history), Madden NFL 23 (the best-
selling title in franchise history on console and PC), F1
22, and Dead Space;
• continuing to grow Apex Legends as one of the most
successful ongoing live services in the industry with an
average of 20 million monthly active users in fiscal
year 2023;
• working toward the full launch of Lord of the Rings:
Heroes of Middle-earth, with a successful early
launch completed in select countries in July 2022;
• developing a deep pipeline of announced and
unannounced projects with our wholly-owned IP,
including Skate, titles in the Marvel universe, and more;
■ led development of the Company’s five-year strategic
plan adopted in the fiscal year; and
■ assumed leadership of and restructured the Company’s
technology organization to accelerate decision-making
and drive further innovation in our games and services.
39
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Mr. Bruzzo
Chief Experience Officer
On June 20, 2023, Mr. Bruzzo announced his retirement from the Company effective June 30, 2023.
Mr. Bruzzo oversees EA’s marketing team, the Worldwide Customer Experience team, and the Positive Play Group as a collection
of functions that create unified and rewarding experiences for our players.
individual Performance Modifier
In May 2023, after reviewing his achievements for fiscal year 2023, the Compensation Committee approved an IPM of 100% for
Mr. Bruzzo.
■ continued to innovate to ensure that the EA online
community is safe, fair and inclusive, with efforts such
as the launch of EA’s anticheat technology for FIFA 23
on PC; and
■ oversaw company and employee giving of $6.8 million
and over 11,000 volunteer hours in social impact
programs.
Key Highlights for Fiscal year 2023
During fiscal year 2023, Mr. Bruzzo:
■ launched successful global marketing campaigns to help
drive sales across EA’s high-quality brands, including EA
SPORTS FIFA 23 and STAR WARS Jedi: Survivor;
■ added six more royalty-free patents to our accessibility
patent pledge, furthering our commitment to making
video games inclusive for everyone;
■ built on our commitment to STEAM education and creating
opportunities for young people in underrepresented
communities through initiatives such as the EA Madden
Scholarship Program, which grants scholarships to students
from historically Black colleges and universities;
Ms. Singh
Chief People Officer
Ms. Singh serves as Chief People Officer, overseeing our People Experience and Real Estate teams. In her role, Ms. Singh focuses
on developing EA’s talent and cultivating the company culture.
individual Performance Modifier
In May 2023, after reviewing her achievements for fiscal year 2023, the Compensation Committee approved an IPM of 122.3%
for Ms. Singh.
Key Highlights for Fiscal year 2023
During fiscal year 2023, Ms. Singh:
■ made gains in employee engagement resulting in high
employee job satisfaction score and record high work/
life balance score;
■ implemented and built on active efforts to retain and
recruit underrepresented talent, resulting in:
• continued increases in the level of underrepresented
talent in our workforce, including year-over-year
increases of executive (VP+) talent from
underrepresented groups for the third year in a row;
implementing and building on programs and initiatives
targeting key groups and traveling to emerging talent
markets;
•
40
■ continued to promote a healthy and respectful
workplace, with three of our Studios winning U.S. Best
Places to Work Awards from an industry publication,
among other media accolades; and
■ led our stockholder governance outreach efforts,
engaging with our stockholders on discussions
regarding executive compensation, human capital
management and other ESG topics.
COMPENSAtiON DiSCuSSiON & ANALySiS
Fiscal Year 2023 Performance Cash Bonus Awards
The Board of Directors for Mr. Wilson, and the Compensation Committee, in consultation with Mr. Wilson and our Chief People Officer, for
all other NEOs, approved actual performance cash bonus payouts for the NEOs for fiscal year 2023, as set forth below.
Mr. Wilson
Mr. Suh(1)
Ms. Miele
Mr. Bruzzo
Ms. Singh
Mr. Moss(2)
Target Annual
Bonus
$ 2,600,000
$ 700,000
$ 880,000
$ 750,000
$
562,500
$ 750,000
Executive
Bonus Pool
Funding
Percentage
82.1%
84.6%
84.6%
87.2%
87.2%
N/A
Individual
Performance
Modifier
Actual Fiscal Year
2023 Performance
Cash Bonus
% Decrease
from Fiscal
Year 2022
115%
110%
120.9%
100%
122.3%
N/A
$ 2,454,790
$ 651,420
$ 900,000
$ 654,000
$ 600,000
$
0
- 46.3%
N/A
- 37.2%
- 46.5%
- 43.3%
N/A
(1) Mr. Suh became our Chief Financial Officer on March 1, 2022, and was ineligible for a fiscal year 2022 performance cash bonus award.
(2) Mr. Moss departed the Company in September 2022, and was ineligible for an annual performance cash bonus award.
Long-Term Equity Incentives
Key purpose and features
■ Long-term equity incentives reward absolute long-term stock price appreciation, promote long-term retention, and provide
incentives based on the attainment of performance objectives that are key indicators of our growth and long-term success
■ Approximately 83% of our NEOs’ aggregate annual target total direct compensation is delivered in the form of long-term
equity incentives, which aligns our NEOs’ interests with those of our stockholders and incentivizes performance that creates
stockholder value
■ Long-term equity incentives consist of performance-based restricted stock units (PRSUs) and time-based restricted stock units
(RSUs). The award mix consists of 60% PRSUs and 40% RSUs for our CEO, CFO and COO, and 50% PRSUs and 50% RSUs for
all other NEOs
■ Fiscal Year 2023 PRSUs incentivizes our NEOs to drive top-line and bottom-line growth, and pays out after the end of a three-
year performance period, based on our three-year relative TSR performance, and our net bookings and operating income
performance measured annually over the three-year performance period
■ Target vesting of relative TSR PRSUs requires above-median performance (at 55th percentile)
■ RSUs vest over a 35-month time-based vesting schedule
Target Value of Fiscal Year 2023 Annual Equity Awards
In May 2022, the Compensation Committee, and the Board of Directors for Mr. Wilson, approved fiscal year 2023 annual equity awards for
our NEOs at the time based on their evaluation of Company performance; each NEO’s role and responsibilities; individual performance;
retention considerations; competitive market practices, including comparative market data; and internal compensation alignment among
our executive officers.
The following table shows the target value of the annual equity awards granted to our NEOs on June 16, 2022, as approved by the
Compensation Committee on May 18, 2022, and the Board of Directors on May 19, 2022, for Mr. Wilson. The values set forth below were
converted into a number of PRSUs or RSUs, as applicable, based on the June 16, 2022 closing price of our common stock of $127.98,
rounded down to the nearest whole unit. The award mix serves to align the interests of our NEOs and our stockholders and to promote
long-term retention of a strong leadership team in an industry and geographic area that is highly competitive for executive talent.
Mr. Wilson
Mr. Suh(1)
Ms. Miele
Mr. Bruzzo(1)
Ms. Singh
Mr. Moss(2)
Target PRSUs
($)
RSUs
($)
10,800,000
7,200,000
4,800,000
3,200,000
6,000,000
4,000,000
3,750,000
3,750,000
2,500,000
2,500,000
3,750,000
3,750,000
(1) None of Mr. Suh’s or Mr. Bruzzo’s fiscal year 2023 PRSUs will vest prior to their departures on June 30, 2023, and all of their unvested PRSUs and RSUs will be forfeited
upon their departures.
(2) None of Mr. Moss’ fiscal year 2023 PRSUs or RSUs vested prior to his departure from EA, and along with all of his other unvested PRSUs and RSUs, were forfeited at
the time of his departure.
41
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Performance-Based Restricted Stock Units
The terms of our fiscal year 2023 PRSU program reflect the changes first made to the PRSU program for the fiscal year 2022 awards, and
include the features described below.
■ Three-year cliff vesting: PRSU awards cliff vest after the end of the three-year performance period to encourage our executives to
focus on long-term stock price performance and to promote long-term retention.
■ Net bookings and operating income metrics, in addition to relative tSR: Net bookings and operating income are key indicators
of our top-line and bottom-line performance and balance growth and investment spending to deliver long-term results and generate
stockholder return. These metrics provide our NEOs and management team with increased control over performance as compared
to relative TSR, and align our long-term incentive program with our broader business strategy, while maintaining strong alignment to
results for our stockholders.
Each tranche of the fiscal year 2023 PRSU award is eligible to vest based on the achievement of the following equally-weighted measures
during the three-year performance period covering fiscal years 2023 through 2025:
(1) Net Bookings PRSUs (1/3): annual net bookings performance for each fiscal year during the three-year performance period;
(2)
Operating Income PRSUs (1/3): annual operating income performance for each fiscal year during the three-year performance
period; and
(3)
Relative TSR PRSUs (1/3): relative TSR performance compared to the Nasdaq-100 Index over the three-year performance period.
Any PRSUs that are earned in accordance with the above will vest on May 20, 2025.
Net Bookings PRSUs and Operating Income PRSUs
The number of Net Bookings PRSUs and Operating Income PRSUs that are earned and eligible to vest will range from 0% to 200% of the
target number of PRSUs for the applicable sub-tranche, in accordance with the payout scale below.
Net Bookings (as a % of Financial Plan(1))
Operating income (as a % of Financial Plan(1))
Payout Percentage(2) (as a % of Target)
Below Threshold
< 90%
< 88%
0%
Threshold
≥ 90%
≥ 88%
50%
Target
≥ 100%
≥ 100%
100%
Maximum
≥ 110%
≥ 112%
200%
(1) Financial Plan is the Company’s Board-approved financial plan for each relevant fiscal year.
(2) The payout percentage is expressed as a % of target for each sub-tranche; the payout percentage for achievement between the percentages designated above
will be interpolated on a straight-line basis.
■ Fiscal year 2023 Performance. Based on achievement of the fiscal year 2023 net bookings and operating income performance
goals relative to target, the payout percentage for these PRSUs will be 50.4% and 0%, respectively. The realized value of these
results was significantly below the intended target value for the performance period. For the number of PRSUs earned based
on fiscal year 2023 performance, see “Executive Compensation Tables—Outstanding Equity Awards at Fiscal Year 2023 Year-End
Table.” These PRSUs will vest on May 20, 2025, subject to the NEO’s continued employment on this date, and will be reflected in the
applicable compensation tables included in our fiscal year 2026 proxy statement.
Net Bookings (in billions)
Non-GAAP Operating income (in billions)
Payout Percentage (as % of target)
Threshold
Target
Maximum
Actual Results
$ 7,335
$2,273
50%
$ 8,150
$ 2,583
100%
$ 8,965
$ 2,893
200%
$ 7,341
$ 2,228
25.2%
■ Earned PRSus under Prior Awards. Each of the net bookings performance goal, the operating income performance goal, and the
actual results indicated above for fiscal year 2023 also apply to the second tranche of the PRSU awards previously granted to our
NEOs for fiscal year 2022 (other than in the case of Mr. Suh, who was hired after they were granted). The values relating to the fiscal
year 2022 PRSU awards will be reflected in the applicable compensation tables included in this proxy statement. The TSR component
of the 2022 PRSU awards will be measured at the end of the three-year performance covering fiscal years 2022 through 2024.
Appendix A to this Proxy Statement provides a reconciliation between our non-GAAP financial measures and our audited financial
statements. For more information regarding our use of non-GAAP financial measures for our compensation programs, please refer to the
information provided under the heading “About Non-GAAP Financial Measures” in Appendix A below.
42
Relative TSR PRSUs
The number of Relative TSR PRSUs that are earned and eligible to vest on May 20, 2025 will range from 0% to 200% of target. Target
vesting of Relative TSR PRSUs is tied to above-median performance compared to the Nasdaq-100 Index. No Relative TSR PRSUs will be
earned if our Relative TSR percentile is below the 25th percentile and payouts are capped at 200% of target, subject to the negative TSR
cap described below.
COMPENSAtiON DiSCuSSiON & ANALySiS
Below Threshold
Threshold
Target
Maximum
Performance
< 25th percentile
25th percentile
55th percentile
90th percentile
Payout(1) (as % of
Target PRSUs)
0%
30%
100%
200%
(1) The payout percentage for performance between the 25th and 90th percentiles will be interpolated on a straight-line basis.
NEGAtiVE tSR CAP. If our TSR is negative on an absolute basis at the end of the three-year performance period, the number of
Relative TSR PRSUs that can be earned is capped at 100% of target, regardless of whether the Company’s Relative TSR percentile is
ranked at or above the 55th percentile at the end of the three-year performance period.
Time-Based Restricted Stock Units
RSUs reward absolute long-term stock price appreciation, promote retention, facilitate stock ownership, and align our NEOs’ interests with
those of our stockholders.
■ RSU awards granted to our NEOs as part of their fiscal year 2023 annual equity awards cliff vest as to 50% of the award eleven months
following the grant date, with 12.5% of the award vesting every six months thereafter until the award is fully vested.
■ 40% of the total target value of the annual equity award for each of our CEO, CFO and COO was made in the form of RSUs, and 50%
of the total target value of each of our other NEOs’ annual equity awards was made in the form of RSUs.
Vesting of Prior Awards with Performance Periods Ending in Fiscal Year 2023
Fiscal Year 2021 PRSU Awards
As described in our fiscal year 2021 proxy statement, under the awards granted in fiscal year 2021, the third and final tranche of PRSUs
were eligible to be earned at the end of fiscal year 2023, and any such earned PRSUs vested in May 2023. Accordingly, the vested PRSUs
will be reflected in the applicable compensation tables included in our fiscal year 2024 proxy statement. Our fiscal year 2021 PRSU awards
are earned and vest based solely on our relative TSR performance, with each award comprised of three tranches. The first, second,
and third tranches of each award are eligible to vest after the conclusion of 12-month, cumulative 24-month and cumulative 36-month
measurement periods, respectively, that correspond to our fiscal year (each, a “Vesting Measurement Period”), based on our relative
TSR percentile over the applicable Vesting Measurement Period. Target vesting is tied to above-median performance compared to the
Nasdaq-100 Index. If our relative TSR percentile is at the 60th percentile at the end of a Vesting Measurement Period, 100% of the target
PRSUs for the applicable tranche will be earned. The percentage of PRSUs earned will be adjusted upward by 3% or downward by 2%
for each percentile above or below the 60th percentile, respectively, with the percentage of PRSUs earned ranging from 0% to 200% of
target, with no PRSUs earned if our relative TSR percentile is below the 11th percentile. The fiscal year 2021 PRSUs originally included a
catch-up feature such that any unearned PRSUs could be earned in subsequent Vesting Measurement Periods based on the improvement
of our relative TSR percentile. However, we eliminated this lookback feature from our equity program beginning with our fiscal year 2022
PRSU awards.
The graphic below illustrates that 16% of target PRSUs for the third tranche of the fiscal year 2021 PRSU awards were earned for
the 36-month measurement period ending April 1, 2023. These PRSUs vested in May 2023, and the realized value of this result was
significantly below the intended target value for the measurement period.
Measurement
Period
Beginning
Average Stock
Price (90 Day
Average)
Ending
Average Stock
Price (90 Day
Average)
EA TSR
Relative TSR
Percentile
Vest Date
Percentage
of Target
PRSUs Vested
May 2023
Fy 2021 Award
(FY 2021 - FY 2023)
Granted June 2020
Tranche Three:
36-month
measurement period
ending April 1, 2023
$117.12
$118.93
1.5%
18th
May 2023
(Third Vesting
Opportunity)
16%
As described in our fiscal year 2022 proxy statement, the third tranche of our fiscal year 2020 and second tranche of our fiscal year 2021
PRSU awards vested in May 2022. Accordingly, those vested PRSUs are reflected in the applicable compensation tables included in this
proxy statement.
43
2023 PROXY STATEMENT COMPENSAtiON DiSCuSSiON & ANALySiS
Benefits and Retirement Plans
We provide a wide array of employee benefit programs to our regular employees, including our NEOs, based upon their country of
employment. In the United States, our employee benefit programs for eligible employees include medical, dental, prescription drug, vision
care, disability insurance, life insurance, accidental death, and dismemberment (“AD&D”) insurance, flexible spending accounts, business
travel accident insurance, an educational reimbursement program, an adoption assistance program, an employee assistance program, an
employee stock purchase plan, paid time off, and relocation assistance.
We offer retirement plans to our employees based upon their country of employment. In the United States, our employees, including our
NEOs, are eligible to participate in a tax-qualified 401(k) plan, with a Company discretionary matching contribution of up to 6% of eligible
compensation. The amount of the total matching contribution is determined based on the Company’s fiscal year performance. We also
maintain a nonqualified deferred compensation plan in which executive-level employees, including our NEOs and our directors, are eligible
to participate. None of our NEOs participated in the deferred compensation plan during fiscal year 2023.
Perquisites and Other Personal Benefits
While our NEOs generally receive the same benefits that are available to our other regular employees, they also receive certain additional
benefits, including access to a Company-paid physical examination program, and greater maximum benefit levels for life insurance, AD&D,
and long-term disability coverage. We consider these benefits to be standard components of a competitive executive compensation
package. Our executives with a ranking of vice president and above and certain worldwide studio organization employees are also
eligible to participate in the EA Executive and Studio Leadership Digital Game Benefit program. Executives with a ranking of vice
president and above also receive unlimited paid-time off days. Company reimbursed or provided air and ground transportation generally
is limited to business travel. We also offer our NEOs the opportunity to receive cybersecurity services to protect their privacy, home
networks, and devices, where they may conduct EA business. Furthermore, because of the visibility of our CEO as the leader of a public,
consumer-facing company, our Board of Directors approved certain security arrangements for Mr. Wilson in November 2022, following
an assessment conducted by an outside security consultant. These arrangements are intended to promote Mr. Wilson’s ability to perform
his job duties by ensuring his personal safety and that of his family. Because these arrangements may be viewed as distinct from business
expenses, the aggregate incremental cost of these services is reflected in the totals in the “All Other Compensation” column of the
Fiscal Year 2023 Summary Compensation Table below. The Compensation Committee will periodically review the nature and cost of this
program in relation to Mr. Wilson’s security risk profile.
Other Compensation Practices and Policies
Cash Severance Policy
On August 31, 2022, our Compensation Committee adopted the Executive Officer Cash Severance Policy, which restricts the Company
from entering into any new employment agreement, severance agreement, or separation agreement with any executive officer—or
establish any new severance plan or policy covering any executive officer—that provides for cash severance benefits exceeding 2.99
times the sum of the executive officer’s base salary plus target annual bonus opportunity, without stockholder ratification of such
arrangement.
Change in Control Arrangements and Severance
Our executives with a ranking of senior vice president and above are eligible to participate in the Electronic Arts Inc. Amended and
Restated Change in Control Severance Plan (the “CIC Plan”). The CIC Plan provides “double-trigger” severance benefits if participants
incur a qualifying termination of employment in connection with a change in control. As part of the plan review, the Compensation
Committee’s independent consultant undertook a market check of the severance benefits and noted that they were in line with the
practices of our peer group. For more information on the CIC Plan, please refer to “Executive Compensation Tables—Potential Payments
Upon Termination or Change in Control” below.
We also maintain a severance plan (the “Severance Plan”) that applies generally to our regular full-time U.S.-based employees. Under the
Severance Plan, eligible employees (including our executive officers) whose employment is involuntarily terminated in connection with
a reduction in force may receive a cash severance payment and premiums for continued health benefits, if such benefits are continued
pursuant to COBRA. Any severance arrangements with our NEOs, whether paid pursuant to the Severance Plan or otherwise, require the
prior approval of the Compensation Committee. In the event of a change in control of the Company, any cash severance payable under
the Severance Plan may be reduced, in whole or in part, by any amount paid under the CIC Plan.
We do not maintain any other severance arrangements with our NEOs. Furthermore, we did not enter into any severance arrangements
with Mr. Moss in connection with his departure from the Company.
Stock Ownership Holding Requirements for Section 16 Officers
Section 16 officers must maintain stock ownership equal to the minimum ownership requirements in our stock ownership guidelines.
Please see “Stock Ownership Information—Stock Ownership Requirements—Section 16 Officers” below for additional information on these
requirements.
44
COMPENSAtiON DiSCuSSiON & ANALySiS
Compensation Recovery (Clawbacks)
We maintain a Clawback Policy that applies to current and former Section 16 officers of the Company. Under the Clawback Policy, if the
Company is required to restate its financial results and the Board of Directors (or a committee thereof) determines that a covered officer
engaged in an act of misconduct that resulted in the restatement, the Board of Directors (or a committee thereof) has the authority to
recoup any excess incentive compensation (including cash and equity incentives) paid to a covered officer during the three years before
the restatement.
In addition, our equity award agreements provide that if an employee engages in fraud or other misconduct that contributes to an
obligation to restate the Company’s financial statements, the Compensation Committee may terminate the equity award and recapture
any equity award proceeds received by the employee within the 12-month period following the public issuance or filing of the financial
statements required to be restated.
We are currently reviewing our Clawback Policy in light of the new listing rules on clawbacks issued by NASDAQ in February 2023 (and most
recently amended in June 2023), which are based on the SEC’s recent clawback rules. We will update our policy, as appropriate, before the
new NASDAQ rules go into effect later in the year.
Risk Considerations
The Compensation Committee considers, in establishing and reviewing our compensation programs, whether the programs encourage
unnecessary or excessive risk taking and has concluded that they do not. See the section of this Proxy Statement entitled “Board’s Role
and Responsibilities–Oversight of Risk Issues—Compensation Risk Assessment” above for an additional discussion of risk considerations.
Impact of Tax Treatment
Section 162(m) of the Internal Revenue Code no longer allows companies to benefit from taking deductions for qualified performance-
based compensation. However, we have not changed our pay-for-performance approach to awarding executive pay. The Compensation
Committee believes it is important to continue to this approach in designing appropriate executive compensation programs that are in
the best interests of the Company and our stockholders.
Section 409A of the Internal Revenue Code imposes additional significant taxes and penalties on the individual if an executive officer,
director, or other service provider is entitled to “deferred compensation” that does not comply with the requirements of Section 409A of
the Internal Revenue Code. We have structured deferred compensation in a manner intended to comply with or be exempt from Section
409A of the Code, and the regulations and other guidance promulgated thereunder. We do not provide any executive officer, including
any NEO, with any excise tax “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the
application of Sections 280G or 4999 of the Internal Revenue Code.
Compensation Committee Report on
Executive Compensation
The following Compensation Committee Report on Executive Compensation shall not be deemed to be “soliciting material” or to be “filed”
with the SEC nor shall this information be incorporated by reference into any future filing under the Securities Act of 1933, as amended
(the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) except to the extent that EA specifically
incorporates it by reference into a filing.
The Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis. Based on its
review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation
Discussion & Analysis be included in this Proxy Statement.
COMPENSAtiON COMMittEE MEMBERS
talbott Roche (Chair)
Rachel Gonzalez
Heidi ueberroth
45
2023 PROXY STATEMENT Executive Compensation Tables
Fiscal Year 2023 Summary Compensation Table
The following table shows information concerning the compensation earned by or awarded to our “Named Executive Officers” or “NEOs”
for fiscal year 2023, and, where applicable, fiscal years 2022 and 2021.
Name and Principal Position
for fiscal Year 2023
Fiscal
Year
Salary
($)
Bonus
($)
Stock
Awards
($)(1)
Non-Equity
Incentive Plan
Compensation
($)(2)
All Other
Compensation
($)(3)
Total
($)
Andrew Wilson
Chief Executive Officer
Chris Suh
2023 1,300,000
— 16,724,254
2,454,790
179,958 20,659,002
2022
2021
1,292,923
1,249,615
— 13,973,702
— 32,870,225
4,571,933
5,000,000
19,981
19,858,539
45,980 39,165,820
Chief Financial Officer
2023
700,000
— 7,164,745
651,420
612,708(4)
9,128,873
2022
51,154 4,000,000(4)
4,153,236
—
2,587
8,206,977
Laura Miele
Chief Operating Officer
Chris Bruzzo
Chief Experience Officer
Mala Singh
Chief People Officer
Kenneth Moss
2023
800,000
2022
2021
793,808
752,928
2023
750,000
2022
2021
744,692
715,716
— 9,091,870
—
—
8,135,896
8,637,819
— 7,146,678
—
6,834,253
— 7,558,024
900,000
1,433,769
1,773,162
654,000
1,222,731
1,420,296
12,025 10,803,895
20,264 10,383,737
19,248
11,183,157
11,782 8,562,460
20,044
8,821,720
18,457
9,712,493
2023
625,000
— 4,704,675
600,000
11,927 5,941,602
Former Chief Technology Officer
2023
331,731
2022
2021
744,692
715,716
— 7,146,678
—
6,834,253
— 7,558,024
—
3,955 7,482,364
1,034,619
1,420,296
20,315
8,633,879
18,905
9,712,941
(1) Represents the aggregate grant date fair value of RSUs and PRSUs calculated according to the assumptions set forth in the Fiscal Year 2023 Grants of Plan-Based
Awards Table. Grant date fair value is determined for financial statement reporting purposes in accordance with FASB ASC Topic 718 and the amounts shown may
not reflect the actual value realized by the recipient. PRSU values are included in this column to the extent that the PRSUs have a grant date under FASB ASC Topic
718 in the fiscal year. For purposes of the PRSUs, the grant date occurs when the applicable performance targets are set, and therefore this column includes the
grant date fair value of 5/9ths of the target value of the fiscal year 2023 PRSUs, of which 3/9ths of the target award is based on a 3-year relative TSR metric target
and 2/9ths of the target award is based on annual operating metric targets for fiscal year 2023.
For RSUs, grant date fair value is calculated using the closing price of our common stock on the grant date. For the portion of fiscal year 2023 PRSUs that vest
based on the achievement of operating metrics, the grant date fair value reported is based upon the closing price of our common stock and the assessed
probability of achievement of the operating metrics, on the grant date. For the 3-year relative TSR portion of fiscal year 2023 PRSUs, the grant date fair value
reported is based upon the probable outcome of such conditions using a Monte-Carlo simulation model. For additional information regarding the valuation
methodology for RSUs and PRSUs, see Note 15, “Stock-Based Compensation and Employee Benefit Plans,” to the Consolidated Financial Statements in our Annual
Report. The PRSUs granted to our NEOs in fiscal year 2023 that vest based on our 3-year relative TSR performance are referred to as “Market-Based Restricted
Stock Units” in Note 15, “Stock-Based Compensation and Employee Benefit Plans,” to the Consolidated Financial Statements in our Annual Report.
The actual vesting of the PRSUs will be between 0% and 200% of the target number of PRSUs granted. The grant date fair value of the PRSUs granted in fiscal
year 2023, assuming the highest level of performance conditions will be achieved, is $19,048,711 for Mr. Wilson, $7,929,722 for Mr. Suh, $10,183,967 for Ms. Miele,
$6,793,472 for Mr. Bruzzo, $4,409,427 for Ms. Singh, and $6,793,472 for Mr. Moss. For additional information regarding the specific terms of the PRSUs granted to our
NEOs in fiscal year 2023, see the “Fiscal Year 2023 Grants of Plan-Based Awards Table” below.
All unvested equity awards held by Messrs. Suh and Bruzzo will be forfeited upon their departures on June 30, 2023, and all unvested equity awards held by Mr. Moss
were forfeited upon his departure on September 2, 2022.
(2) Represents amounts awarded to each NEO under the Executive Bonus Plan. Mr. Moss was ineligible for an annual performance cash bonus award because he
departed EA in September 2022. For additional information about the annual performance cash bonuses paid to our NEOs in fiscal year 2023, see “Our NEOs’
Fiscal Year 2022 Compensation—Annual Performance Cash Bonus Awards” in the “Compensation Discussion and Analysis” above.
46
(3) Details about the amounts in the “All Other Compensation” column for fiscal year 2023 are set forth below. For additional information, see “Benefits and Retirement
Plans” and “Perquisites and Other Personal Benefits” in the “Compensation Discussion and Analysis” above.
ExECutivE CoMpEnSAtion tABLES
Name
Andrew Wilson
Chris Suh
Laura Miele
Chris Bruzzo
Mala Singh
Ken Moss
Insurance
Premiums
($)(A)
401(K) Matching
Contributions ($)
1,270
1,270
1,270
1,270
1,270
635
9,150
13,188
9,150
9,150
9,150
2,804
Other
($)
169,538(b)
598,250(c)
1,605(d)
1,362(d)
1,507(d)
516(d)
Total
($)
179,958
612,708
12,025
11,782
11,927
3,955
(a)
Includes premiums paid on behalf of each NEO under Company sponsored group life insurance, AD&D, and long-term disability programs.
(b) Includes $151,019 in personal security benefits, as well as leadership digital games and in-kind gifts, and $2,105 in tax reimbursements with respect to perquisites or
other personal benefits.
(c)
Includes $541,921 in relocation benefits in connection with Mr. Suh’s relocation to the Redwood City, California area as part of his new hire arrangements,
cybersecurity benefits, leadership digital games and in-kind gifts, and $51,543 in tax reimbursements with respect to perquisites or other personal benefits.
Pursuant to the terms of the Offer Letter between the Company and Mr. Suh, dated January 14, 2022 filed with the SEC on Form 8-K, Mr. Suh is required to repay
$500,000 of his relocation benefits as a result of his departure.
(d) Represents tax reimbursements with respect to perquisites or other personal benefits.
(4) Pursuant to the terms of the Offer Letter between the Company and Mr. Suh, dated January 14, 2022 filed with the SEC on Form 8-K, Mr. Suh is required to repay
$1,342,466 of his sign-on bonus and $500,000 of his relocation benefits as a result of his departure.
47
2023 PROXY STATEMENT
ExECutivE CoMpEnSAtion tABLES
Fiscal Year 2023 Grants of Plan-Based Awards Table
The following table shows information regarding non-equity incentive and equity incentive plan-based awards granted to our NEOs during
fiscal year 2023.
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(2)
Estimated Future Payouts Under
Equity Incentive Plan Awards(3)
Grant
Date(1)
Approval
Date(1)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Name
Andrew Wilson
Annual Bonus
Opportunity
RSUs
Chris Suh
Annual Bonus
Opportunity
FY23 New Hire
PRSUs-OM
RSUs
Laura Miele
Annual Bonus
Opportunity
RSUs
Chris Bruzzo
Annual Bonus
Opportunity
RSUs
Mala Singh
Annual Bonus
Opportunity
RSUs
Kenneth Moss
Annual Bonus
Opportunity
—
— 2,600,000 5,200,000
FY23 PRSUs-rTSR
6/16/2022
5/19/2022
FY23 PRSUs-OM
6/16/2022
5/19/2022
FY22 PRSUs-OM
6/16/2022
5/19/2022
6/16/2022
5/19/2022
—
—
—
—
—
—
—
—
FY23 PRSUs-rTSR
6/16/2022
5/18/2022
FY23 PRSUs-OM
6/16/2022
5/18/2022
—
—
700,000 1,400,000
6/16/2022
5/18/2022
6/16/2022
5/18/2022
—
—
—
—
—
—
—
—
—
—
880,000 1,760,000
FY23 PRSUs-rTSR
6/16/2022
5/18/2022
FY23 PRSUs-OM
6/16/2022
5/18/2022
FY22 PRSUs-OM
6/16/2022
5/18/2022
6/16/2022
5/18/2022
—
—
—
—
—
—
—
—
—
—
750,000 1,500,000
FY23 PRSUs-rTSR
6/16/2022
5/18/2022
FY23 PRSUs-OM
6/16/2022
5/18/2022
FY22 PRSUs-OM
6/16/2022
5/18/2022
6/16/2022
5/18/2022
—
—
—
—
—
—
—
—
—
—
562,500 1,125,000
FY23 PRSUs-rTSR
6/16/2022
5/18/2022
FY23 PRSUs-OM
6/16/2022
5/18/2022
FY22 PRSUs-OM
6/16/2022
5/18/2022
6/16/2022
5/18/2022
—
—
—
—
—
—
—
—
—
—
750,000 1,500,000
FY23 PRSUs-rTSR
6/16/2022
5/18/2022
FY23 PRSUs-OM
6/16/2022
5/18/2022
FY22 PRSUs-OM
6/16/2022
5/18/2022
RSUs
6/16/2022
5/18/2022
—
—
—
—
—
—
—
—
—
8,439
4,688
4,208
—
28,130
18,752
16,830
—
56,260
37,504
33,660
—
—
—
—
—
—
3,750
2,084
12,502
8,334
25,004
16,668
1,346
5,385
10,770
—
—
—
—
—
—
4,688
2,605
1,948
15,628
10,418
7,792
31,256
20,836
15,584
—
—
—
—
—
—
2,930
1,628
1,636
9,767
6,511
6,545
19,534
13,022
13,090
—
—
—
—
—
—
1,953
1,085
974
6,512
4,340
3,896
13,024
8,680
7,792
—
—
2,930
1,628
1,636
—
—
—
9,767
6,511
6,545
—
—
—
19,534
13,022
13,090
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(4) (#)
Grant Date
Fair Value
of Stock
and Option
Awards
($)(5)
—
—
—
—
—
4,970,571
2,399,881
2,153,903
56,258
7,199,899
—
—
—
—
—
2,209,103
1,066,585
689,172
25,003
3,199,884
—
—
—
—
—
2,761,468
1,333,296
997,220
31,254
3,999,887
—
—
—
—
—
1,725,829
833,278
837,629
29,301
3,749,942
—
—
—
—
—
1,150,670
555,433
498,610
19,534
2,499,961
—
—
—
—
—
1,725,829
833,278
837,629
(1)
In accordance with FASB ASC Topic 718, represents the date on which the grant date fair value was established. Each grant was approved by our Compensation
Committee, or the Board of Directors for our CEO, on the corresponding Approval Date next to each Grant Date.
48
—
29,301
3,749,942
ExECutivE CoMpEnSAtion tABLES
(2) The amounts shown represent the target and maximum amount of cash bonus awards provided for under the Executive Bonus Plan for the NEOs. Mr. Moss was
ineligible for an annual performance cash bonus award because he departed EA in September 2022. The target amounts are pre-established as a percentage of
salary and the maximum amounts represent 2x the target amounts, the maximum amount that could be paid to the NEO under the Executive Bonus Plan. For more
information regarding our NEOs’ bonus targets and the actual cash bonus earned by each NEO for fiscal year 2023, see the section titled “Our NEOs’ Fiscal Year
2023 Compensation” in the “Compensation Discussion and Analysis” above.
(3) Represents the threshold, target, and maximum units for PRSUs with a grant date established under FASB ASC Topic 718 in fiscal year 2023. Because the grant date
under FASB ASC Topic 718 occurs when the performance targets are approved, the target number of PRSUs is calculated based on that portion of an award for
which performance targets were set in fiscal 2023 as follows:
Award and Performance Metric
Tranche
FY23 - rTSR (all NEOs)
FY23 - OM (all NEOs)
FY23 - New Hire OM (Mr. Suh)
First
First
First
FY22 - OM (NEOS except Mr. Suh)
Second
Portion of Total Award
with Performance
Targets Set in FY23
3/9ths
2/9ths
2/9ths
2/9ths
For the PRSUs that vest based on annual net bookings and operating income performance, the threshold is calculated assuming threshold performance was
achieved for one of the metrics only. For all PRSUs, the maximum is calculated assuming maximum performance was met for all metrics. For purposes of this table,
PRSUs-rTSR represent PRSUs that vest based on EA’s Relative TSR Percentile measured over a three-year performance period and PRSUs-OM represent PRSUs
that vest based on the attainment of annual operating metric targets during each year of a three-year performance period. If any of these PRSUs become eligible
to vest, they will cliff vest after the end of the applicable three-year performance period (May 20, 2025 for fiscal year 2023 PRSUs and May 16, 2024 for fiscal year
2022 PRSUs), subject to the NEO’s continuous employment on the applicable vest date.
All unvested PRSUs held by Messrs. Suh and Bruzzo will be forfeited upon their departures on June 30, 2023, and all unvested PRSUs held by Mr. Moss were forfeited
upon his departure on September 2, 2022.
For additional information regarding the specific terms of the PRSUs granted in fiscal year 2023, see the sections titled “Our NEOs’ Fiscal Year 2023 Compensation—
Long-Term Equity Incentives” in the “Compensation Discussion and Analysis” above.
(4) Represents awards of RSUs. The RSUs granted to our NEOs other than Mr. Suh and Mr. Moss vested as to 50% of the units on May 16, 2023, with 1/8 of the award
vesting every six months thereafter until the award is fully vested on May 16, 2025, subject to the NEO’s continued employment through each applicable vesting
date. The RSUs granted to Mr. Suh vested as to 33% of the units on May 16, 2023; the remainder of the units will vest in approximately equal increments every six
months thereafter until the award is fully vested on May 16, 2025, subject to Mr. Suh’s continued employment through each applicable vesting date. All unvested
RSUs held by Messrs. Suh and Bruzzo will be forfeited upon their departures on June 30, 2023, and the unvested RSUs held by Mr. Moss were forfeited upon his
departure on September 2, 2022. For additional information regarding the specific terms of the RSUs granted to our NEOs in fiscal year 2023, see the section titled
“Our NEOs’ Fiscal Year 2023 Compensation—Long-Term Equity Incentives” in the “Compensation Discussion and Analysis” above.
(5) Amounts determined pursuant to FASB ASC Topic 718. For grants of RSUs, represents the aggregate grant date fair value of RSUs calculated using the closing
price of our common stock on the grant date. For grants of PRSUs that vest based on the achievement of operating metrics, the grant date fair value reported is
based upon the closing price of our common stock and the assessed probability of achievement of the operating metrics, on the grant date. For grants of PRSUs
that are subject to market conditions related to total stockholder return, the grant date fair value reported is based upon the probable outcome of such conditions
using a Monte-Carlo simulation method. For a more detailed discussion of the valuation methodology and assumptions used to calculate grant date fair value, see
Note 15 “Stock-Based Compensation and Employee Benefit Plans,” to the Consolidated Financial Statements in our Annual Report. The Relative TSR PRSUs granted
to our NEOs in fiscal year 2023 are referred to as “Market-Based Restricted Stock Units” in Note 15 to the Consolidated Financial Statements in our Annual Report.
Outstanding Equity Awards at Fiscal Year 2023
Year-End Table
The following tables show information regarding outstanding stock options, RSUs, and PRSUs held by our NEOs as of the end of fiscal
year 2023.
All outstanding equity awards were granted pursuant to our 2019 Equity Incentive Plan (the “2019 EIP”) and our 2000 Equity Incentive
Plan. The market value of the unvested RSUs and PRSUs is determined by multiplying the number of unvested units by $120.45, the per
share closing price of the Company’s common stock on March 31, 2023, the last trading day of fiscal year 2023.
Name
Chris Bruzzo
Option Awards(1)
Number of Securities
Underlying Unexercised
Options (#)
Exercisable
Unexercisable
Option
Exercise
Price
($)
5,402
—
37.02
Option
Grant Date
9/16/2014
Option
Expiration
Date
9/16/2024
(1) All outstanding options were vested and exercisable as of April 1, 2023, the last day of fiscal year 2023.
49
2023 PROXY STATEMENT
ExECutivE CoMpEnSAtion tABLES
Name
Andrew Wilson
Chris Suh(9)
Laura Miele
Chris Bruzzo(9)
Mala Singh
Ken Moss(11)
Stock Awards
Number of
Shares or
Units of
Stock that
have not
Vested
(#)
Market Value
of Shares or
Units of Stock
that have
not Vested
($)
—
4,688(2)
56,258(3)
—
28,947(5)
18,934(6)
7,635(7)
15,907(8)
—
1,346(2)
16,155(8)
—
2,083(2)
25,003(8)
—
2,604(2)
31,254(3)
—
13,402(5)
13,149(6)
1,696(7)
5,302(8)
—
—
1,627(2)
29,301(3)
—
11,258(5)
11,045(6)
1,484(7)
4,639(8)
—
1,085(2)
19,534(3)
—
6,701(5)
6,574(6)
848(7)
2,651(8)
—
—
564,670
6,776,276
—
3,486,666
2,280,600
919,636
1,915,998
—
162,126
1,945,870
—
250,897
3,011,611
—
313,652
3,764,544
—
1,614,271
1,583,797
204,283
638,626
—
—
195,972
3,529,305
—
1,356,026
1,330,370
178,748
558,768
—
130,688
2,352,870
—
807,135
791,838
102,142
319,313
—
Grant
Date
6/16/2022
6/16/2022
6/16/2022
6/16/2021
6/16/2021
6/16/2021
6/16/2020
6/16/2020
3/16/2022
3/16/2022
3/16/2022
6/16/2022
6/16/2022
6/16/2022
6/16/2022
6/16/2022
6/16/2022
6/16/2021
6/16/2021
6/16/2021
6/16/2020
6/16/2020
11/18/2019
6/16/2022
6/16/2022
6/16/2022
6/16/2021
6/16/2021
6/16/2021
6/16/2020
6/16/2020
6/16/2022
6/16/2022
6/16/2022
6/16/2021
6/16/2021
6/16/2021
6/16/2020
6/16/2020
—
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
that have not
Vested
(#)
28,130(1)
—
—
Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
other Rights
that have not
Vested
($)
3,388,259
—
—
25,246(4)
3,040,881
—
—
—
—
—
—
—
—
8,077(1)
972,875
—
—
—
—
12,502(1)
1,505,866
—
—
—
—
15,628(1)
1,882,393
—
—
—
—
11,687(4)
1,407,699
—
—
—
—
46,001(10)
9,767(1)
—
—
—
—
—
—
5,540,820
1,176,435
—
—
9,817(4)
1,182,458
—
—
—
—
—
—
—
—
6,512(1)
784,370
—
—
—
—
5,843(4)
703,789
—
—
—
—
—
—
—
—
—
—
(1) Represents the PRSUs, assuming target achievement, that vest based on our Relative TSR performance over the three-year performance period covering fiscal
years 2023 through 2025. Any earned PRSUs are eligible to vest on May 20, 2025. For additional information regarding the specific terms of these PRSUs, see
the discussion under the section titled “Our NEOs’ Fiscal Year 2023 Compensation—Long-Term Equity Incentives— Target Value of Fiscal Year 2023 Annual Equity
Awards—Performance-Based Restricted Stock Units” in the “Compensation Discussion and Analysis” above.
50
ExECutivE CoMpEnSAtion tABLES
(2) For the PRSUs that vest based on performance against annual operational metrics, the amount includes only PRSUs relating to the portion of the award for which
the fiscal year 2023 performance targets were approved and reflects the number of PRSUs earned based on performance against the fiscal year 2023 goals. Any
earned PRSUs are eligible to vest on May 20, 2025. The portion of the PRSUs that vest based on net bookings and operating income targets for fiscal years 2024
and 2025 will be disclosed in the compensation tables for the fiscal year in which the related performance targets are approved. For additional information regarding
the specific terms of these PRSUs, see the discussion under the section titled “Our NEOs’ Fiscal Year 2023 Compensation—Long-Term Equity Incentives— Target
Value of Fiscal Year 2023 Annual Equity Awards—Performance-Based Restricted Stock Units” in the “Compensation Discussion and Analysis” above.
(3) Represents an award of RSUs that vested or will vest as to 50% of the units one month prior to the first anniversary of the grant date, with 1/8th of the award vesting
every six months thereafter until the award is fully vested.
(4) Represents the PRSUs, assuming target achievement, that vest based on our Relative TSR performance over the three-year performance period covering fiscal
years 2022 through 2024. Any earned PRSUs are eligible to vest on May 16, 2024.
(5)
For the PRSUs that vest based on performance against annual operational metrics, the amount includes only PRSUs relating to the portion of the award for which
the fiscal year 2022 and fiscal year 2023 performance targets were approved and reflects the number of PRSUs earned based on performance against fiscal year
2022 and fiscal year 2023 goals. Any earned PRSUs are eligible to vest on May 16, 2024. The portion of the PRSUs that vest based on net bookings and operating
income targets for fiscal year 2024 will be disclosed in the compensation tables in next year’s proxy statement. For additional information regarding the specific
terms of these PRSUs, see the discussion under the section titled “Our NEOs’ Fiscal Year 2023 Compensation—Long-Term Equity Incentives— Target Value of Fiscal
Year 2023 Annual Equity Awards—Performance-Based Restricted Stock Units” in the “Compensation Discussion and Analysis” above.
(6) Represents an award of RSUs that vested or will vest as to 1/2 of the units one month prior to the first anniversary of the grant date, with 1/8th of the award vesting
every six months thereafter until the award is fully vested.
(7) Represents the third tranche of PRSUs granted in June 2020 that were earned based on EA’s Relative Nasdaq-100 TSR Percentile for the 36-month measurement
period ending April 1, 2023. The earned PRSUs vested on May 16, 2023. For additional information regarding the specific terms of the PRSUs granted to our NEOs,
including the actual percentage attainment for the PRSUs that were earned at the end of fiscal year 2023 and vested in May 2023, see the discussion under the
section titled “Our NEOs’ Fiscal Year 2023 Compensation—Long-Term Equity Incentives— Target Value of Fiscal Year 2023 Annual Equity Awards—Performance-Based
Restricted Stock Units” in the “Compensation Discussion and Analysis” above.
(8) Represents an award of RSUs that vested or will vest as to 1/3 of the units one month prior to the first anniversary of the grant date, with the remainder of the units
to vest in approximately equal increments every six months thereafter until the award is fully vested.
(9) Messrs. Suh and Bruzzo will forfeit their outstanding stock awards upon their departures from the Company on June 30, 2023.
(10) Represents the second tranche of the November 2019 PRSUs, assuming target achievement, plus outstanding units eligible for catch-up vesting from the first
tranche of the award. Any earned PRSUs are eligible to vest on November 18, 2023, based on EA’s Relative Nasdaq-100 TSR Percentile for the second measurement
period beginning September 29, 2019 and ending September 30, 2023.
(11) Mr. Moss forfeited his outstanding stock awards upon his departure from the Company on September 2, 2022.
Fiscal Year 2023 Option Exercises and Stock Vested Table
The following table shows all stock options exercised and the value realized upon exercise, as well as all RSUs and PRSUs that vested and
the value realized upon vesting, by our NEOs during fiscal year 2023.
Name
Andrew Wilson
Chris Suh
Laura Miele
Chris Bruzzo
Mala Singh
Kenneth Moss
Option Awards
Stock Awards
Number of
Shares
Acquired
on Exercise
(#)
—
—
10,275
4,500
—
Value
Realized
on Exercise
($)(1)
—
—
894,233
456,795
—
122,850
11,388,356
Number of
Shares
Acquired
on Vesting
(#)(2)
Value
Realized
on Vesting
($)(3)
103,330
13,072,226
8,077
899,616
45,929
5,803,743
39,813
5,031,810
23,487
2,968,432
32,537
4,093,353
(1) Mr. Moss departed EA in September 2022 and the options he exercised during the fiscal year were vested options that Mr. Moss had earned over the course of his
EA tenure. The value realized upon the exercise of stock options is calculated by: (a) subtracting the option exercise price from the market value of EA common
stock on the date of exercise to determine the realized value per share, and (b) multiplying the realized value per share by the number of shares of EA common
stock underlying the options exercised.
(2) Represents shares of EA common stock released upon vesting of RSUs and/or PRSUs during fiscal year 2023.
(3) The value realized upon vesting is calculated by multiplying the number of units vested by the closing price of EA common stock on the trading day prior to the
vesting date.
51
2023 PROXY STATEMENT ExECutivE CoMpEnSAtion tABLES
Potential Payments Upon Termination or Change
in Control
Termination of Employment
Our NEOs have not entered into employment agreements with the Company. In connection with a termination of employment, all outstanding
equity awards held by our NEOs will be forfeited unless the applicable NEO’s employment is terminated for reasons due to death, disability, or
in connection with a change in control of the Company.
Treatment of Equity Awards Upon Death or Disability
Time-Based RSUs. Our equity award agreements for all award recipients, including our NEOs, provide that any unvested RSUs will vest in full
on the date of a participant’s death, as long as the participant has been employed by us for at least 12 months prior to the date of death. In
addition, our award agreements provide that if a participant’s employment terminates due to disability, a pro-rata portion of the next tranche
of RSUs scheduled to vest after the termination date will vest as of the date of such termination.
Performance-Based RSUs. The equity award agreements for our PRSUs provide that in the event of an NEO’s death, any unvested
PRSUs as of the date of death will remain eligible to vest on the regularly scheduled vest dates for the applicable award, based on actual
performance, as long as the NEO has been employed by us for at least 12 months prior to the date of death. The same treatment applies
if an NEO terminates employment due to disability, except that the number of unvested PRSUs that remain eligible to vest on the regularly
scheduled vest dates for the applicable award is determined on a pro-rata basis, based on the number of months worked by the NEO
from the beginning of the performance period through the date of termination, divided by the number of months in the applicable
measurement period.
Termination of Employment in Connection with a Change in Control
Electronic Arts Change in Control Severance Plan
Our NEOs participate in the Electronic Arts Inc. Amended and Restated Change in Control Severance Plan (the “CIC Plan”). The CIC Plan is a
“double-trigger” plan, which provides Senior Vice Presidents and above with payments and benefits if their employment is terminated without
“cause” or if they resign for “good reason” (each, as defined in the CIC Plan) during the three-month period preceding or 18-month period
following a change in control of the Company (and the Compensation Committee determines the termination of employment was made in
connection with the change in control) (a “Qualifying Termination”). The CIC Plan payments and benefits include a lump sum cash severance
payment, consisting of 1.5 times (or 2 times for the CEO) the sum of the NEO’s annual base salary, as in effect immediately prior to the date
of termination, and the NEO’s target annual cash bonus opportunity for the year of termination, a payment equal to the applicable monthly
COBRA premium for continued health benefits for 18 months (or 24 months for our CEO), and full vesting of all outstanding and unvested
equity awards, other than performance-based equity awards, the vesting of which is governed by the terms of the applicable equity award
agreements, as described below. As a condition to our NEOs’ right to receive the payments and benefits provided under the CIC Plan, the
NEO is required to execute a release of claims against the Company (unless the requirement is waived) that includes a non-defamation
provision.
The CIC Plan does not provide for any additional payments or benefits (for example, tax gross-ups or reimbursements) in the event that
the payments under the CIC Plan and other arrangements offered by the Company or its affiliates cause an executive officer to owe an
excise tax under Sections 280G and 4999 of the Code (“Section 280G”). However, the CIC Plan provides that if an executive officer would
receive a greater net after-tax benefit by having his or her CIC Plan payments reduced to an amount that would avoid the imposition of the
Section 280G excise tax, then his or her payment will be reduced accordingly.
52
ExECutivE CoMpEnSAtion tABLES
Performance-Based RSUs
Pursuant to the terms of PRSU awards, if a change in control of the Company occurs prior to the expiration of the performance period and the
NEO remains employed by the Company or the Company’s successor entity, the PRSUs may vest on their scheduled vesting date(s) following
the change in control of the Company. The number of outstanding and unvested PRSUs that remain eligible to vest on the applicable vest
dates (or vesting opportunities), which we refer to as “Eligible Units,” will be determined based on actual or target performance, as follows.
FY2021
Relative tSR pRSus
FY2022 and FY2023
Relative tSR pRSus
FY2022
net Bookings and
operating income
pRSus
FY2023
net Bookings and
operating income
pRSus
■ The number of Eligible Units will be based on the Company’s Relative Nasdaq-100 TSR Percentile as of
the effective date of the change in control.
■ If the change in control occurs during the first measurement period of the performance period, the
number of Eligible Units will be based on target performance.
■ If the change in control occurs on or after completion of the first measurement period of the
performance period, the number of Eligible Units will be based on actual performance through the last
business day preceding the change in control.
■ If the change in control occurs during the first measurement period of the performance period, the
number of Eligible Units will be based on target performance.
■ If the change in control occurs on or after completion of the first measurement period of the
performance period, the number of Eligible Units will be equal to actual performance for each
completed measurement period, and target performance for each remaining measurement period.
■ If the change in control occurs during the first measurement period of the performance period, the
number of Eligible Units will be based on target performance.
■ If the change in control occurs on or after completion of the first measurement period of the
performance period, the number of Eligible Units will be equal to actual performance for each
completed measurement period, and the greater of the target and actual level of performance for
each remaining measurement period.
If the employment of the NEO is terminated due to a Qualifying Termination (i.e., a termination without “cause” or a resignation for
“good reason” during the three-month period preceding or 18-month period following a change in control of the Company, and the
Compensation Committee determines the termination of employment was made in connection with the change in control), the Eligible
Units will vest in full upon the date of such Qualifying Termination, subject to the timely execution of a severance agreement and release
of claims against the Company. Any reduction of the recipient’s awards in respect of Section 280G would be applied in the same manner
with respect to the PRSUs as under the CIC Plan.
53
2023 PROXY STATEMENT ExECutivE CoMpEnSAtion tABLES
Estimated Potential Payments Upon Termination
The following table sets forth an estimate of the potential payments and benefits under the terms of our equity award agreements and
the CIC Plan that would be payable to our NEOs assuming they incurred a qualifying termination of employment due to death, disability or
in connection with a change in control, in each case, on April 1, 2023, the last day of fiscal year 2023, other than for Mr. Moss who departed
EA in September 2022 without any severance benefits. For purposes of the estimates below, we used the closing price of our common
stock on March 31, 2023 (the last trading day of fiscal year 2023) of $120.45 per share.
Name
Andrew Wilson
Termination due to Death
Termination due to Disability
Qualifying Termination
Chris Suh(4)
Termination due to Death
Termination due to Disability
Qualifying Termination
Laura Miele
Termination due to Death
Termination due to Disability
Qualifying Termination
Chris Bruzzo(4)
Termination due to Death
Termination due to Disability
Qualifying Termination
Mala Singh
Termination due to Death
Termination due to Disability
Qualifying Termination
Cash
Severance
($)(1)
RSUs
($)(2)
PRSUs
($)(3)
Other
($)
Total
($)
—
—
10,972,875
5,558,888
—(3)
—(3)
—
—
10,972,875
5,558,888
7,800,000
10,972,875
15,744,863
68,376
34,586,114
—
—
4,957,481
1,203,898
—(3)
—(3)
—
—
4,957,481
1,203,898
2,100,000
4,957,481
5,629,953
46,720
12,734,154
—
—
5,986,967
2,794,560
—(3)
—(3)
—
—
5,986,967
2,794,560
2,520,000
5,986,967
9,857,989
46,720
18,411,676
—
—
5,418,443
2,536,195
—(3)
—(3)
—
—
5,418,443
2,536,195
2,250,000
5,418,443
5,623,329
46,192
13,337,964
—
—
3,464,022
1,612,946
—(3)
—(3)
—
—
3,464,022
1,612,946
1,781,250
3,464,022
3,533,642
46,720
8,825,634
(1) Represents the sum of each NEO’s annual base salary as of April 1, 2023, and target cash bonus opportunity for fiscal year 2023, respectively, multiplied by 2 for
Mr. Wilson and by 1.5 for our other NEOs.
(2) Termination due to Death: Represents the value of unvested RSUs that would accelerate and vest in full assuming a termination date of April 1, 2023.
Termination due to Disability: Represents the value of unvested RSUs that would accelerate on a pro-rata basis assuming a termination date of April 1, 2023, based on
the number of months the NEO worked during the 12-month period preceding the next regularly scheduled vest date following the termination date, divided by twelve.
Qualifying Termination: Represents the value of unvested RSUs that would accelerate and vest in full assuming a Qualifying Termination occurred on April 1, 2023.
(3) Termination due to Death: Upon a termination due to death, PRSUs remain eligible to vest on their regularly scheduled vest dates, based on actual performance for
the applicable metric at the end of the applicable measurement periods. For purposes of this table, no value is attributed to outstanding PRSUs which would have
remained eligible to vest based on actual performance at the end of the applicable measurement periods because neither the level of performance that will be
achieved nor the market price of our common stock at the time of vesting could be determined as of April 1, 2023.
Termination due to Disability: Upon a termination due to disability, PRSUs remain eligible to vest on their regularly scheduled vest dates on a pro-rata basis, based
on actual performance at the end of the applicable measurement periods. For purposes of this table, no value is attributed to outstanding PRSUs which would have
remained eligible to vest based on actual performance at the end of the applicable measurement periods because neither the level of performance that will be
achieved nor the market price of our common stock at the time of vesting could be determined as of April 1, 2023.
Qualifying Termination: Represents the estimated value of unvested PRSUs that would accelerate and vest assuming a Qualifying Termination occurred on April 1,
2023, calculated based on the following:
Award Month & Year
Net Bookings and Operating Income PRSUs
Relative TSR PRSUs
June 2022
March 2022
June 2021
■ actual performance for the first tranche
■ target performance for the second and third tranches
■ actual performance for the first and second tranches
■ target performance for the third tranche
actual performance (or based on how the
award was tracking) as of April 1, 2023
June 2020
November 2019
N/A
N/A
(4) Messrs. Suh and Bruzzo will depart EA on June 30, 2023 without any severance benefits.
54
ExECutivE CoMpEnSAtion tABLES
Fiscal Year 2023 Pay Ratio
For fiscal year 2023, the annual total compensation of our median employee was $129,851, and the annual total compensation of
Mr. Wilson, was $20,659,002. The ratio of these amounts is 159 to 1. This ratio is a reasonable estimate calculated in a manner consistent
with Item 402(u) of Regulation S-K under the Exchange Act.
To identify our median employee, we used a consistently applied compensation measure (“CACM”) for all employees on our worldwide
payroll as of March 15, 2023, including full time, part-time, regular, and temporary employees. We changed the median employee
identification date from March 31, the date used in fiscal year 2022, to March 15 as the previous determination date will, at times, fall
outside of the fiscal year.
Our CACM consisted of the following elements of compensation, as obtained from our internal payroll systems:
■ base salary as of March 15, 2023 (annualized for permanent employees on leave of absence or not employed for the full year);
■ discretionary bonuses (performance or other one-time payments) paid to employees in fiscal year 2023;
■ the grant date fair market value of equity awards granted to employees in fiscal year 2023; and
■ exchange rates were applied as of the determination date to convert all non-U.S. currencies into U.S. dollars.
Other than annualizing base salary for permanent employees, we did not make any compensation adjustments whether for cost of living
or otherwise in the identification process.
The median employee’s annual total compensation for fiscal year 2023 was calculated in USD and determined using the same
methodology used to determine Mr. Wilson’s annual total compensation set forth in the “Fiscal Year 2022 Summary Compensation Table.”
SEC regulations permit companies to adopt a variety of methodologies, apply certain exclusions and to make reasonable estimates
and assumptions that reflect their compensation practices and other factors unique to their workforce and business operations when
calculating their pay ratio. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above.
55
2023 PROXY STATEMENT ExECutivE CoMpEnSAtion tABLES
Pay Versus Performance
The disclosures below are pursuant to the recently adopted Pay versus Performance rules under the Dodd–Frank Wall Street Reform
and Consumer Protection Act requiring companies to disclose how NEO compensation relates to the disclosures in the Summary
Compensation Table and to certain financial metrics of that company.
Pay versus Performance Table
The following table provides information regarding the compensation paid to our principal executive officer (or PEO) and non-PEO NEOs
for the fiscal years ended March 31, 2023, 2022, and 2021 and certain measures of Company performance for such periods. We are using
non-GAAP net revenue as the Company Selected Measure.
Summary
Compensation
Table Total
for PEO(1)
($)
Compensation
Actually Paid
to PEO(2)
($)
Average
Summary
Compensation
Table Total
for Non-PEO
NEOs(1)
($)
Average
Compensation
Actually Paid
to Non-PEO
NEOs(2)
($)
Value of Initial Fixed $100
Investment Based on:
Total
Shareholder
Return(3)
($)
Peer Group
Total
Shareholder
Return(4)
($)
Net
Income
(In Millions)
($)
Non-
GAAP Net
Revenue
(In Millions)(5)
($)
(B)
(C)
(D)
(E)
20,659,002
9,942,539
8,383,839
3,432,972
19,858,539
9,862,702
9,279,183
5,423,948
39,165,820
43,921,635
10,591,829
13,798,185
(F)
122
127
135
(G)
166
183
170
(H)
802
789
837
(I)
7,341
7,515
6,190
Year
(A)
2023
2022
2021
(1) The named executive officers for each applicable year are:
Year
2023
2022
2021
PEO
Non-PEO NEOs
Andrew Wilson
Laura Miele, Chris Suh, Chris Bruzzo, Mala Singh, Kenneth Moss. Messrs. Suh and Bruzzo will depart EA on June 30, 2023. Mr. Moss
departed EA on September 2, 2022.
Andrew Wilson
Laura Miele, Chris Suh, Kenneth Moss, Chris Bruzzo, Blake Jorgensen.
Andrew Wilson
Laura Miele, Kenneth Moss, Chris Bruzzo, Blake Jorgensen.
(2) The amounts reported in this column represent “compensation actually paid” to our PEO and other NEOs (on average), as calculated in accordance with Item 402(v)
of Regulation S-K. To determine “compensation actually paid,” the amounts reported in the “Total” column of the Summary Compensation Table for the applicable
year were adjusted as follows:
Summary
Compensation
Table Total
Deduct Summary
Compensation
Table Stock
Awards
Add Year-End
Value of Unvested
Equity Granted in
Year
Add Change
in Value of
Unvested
Awards
Granted in
Prior Years
Add Change
in Value of
Vested Equity
Granted in
Prior Years
$
$
$
$
$
$
20,659,002
8,383,839
19,858,539
9,279,183
39,165,820
10,591,829
$
$
$
$
$
$
16,724,254
7,050,929
13,973,702
6,753,613
32,870,225
8,097,922
$
$
$
$
$
$
11,479,898
$ (5,604,317) $
132,210
4,486,421
$
(2,392,781) $
6,423
12,298,844
$ (9,102,873) $
781,893
6,046,200
28,724,167
7,355,643
$
$
$
(3,281,856) $
134,034
6,251,497
2,956,567
$
$
2,650,376
992,067
$
$
$
$
$
$
Compensation
Actually Paid
9,942,539
3,432,972
9,862,702
5,423,948
43,921,635
13,798,185
Year
2023
2022
2021
Executives
PEO
Non-PEO NEOs*
PEO
Non-PEO NEOs*
PEO
Non-PEO NEOs*
* Presented on an averaged basis
(3) The amounts reported in this column reflect the Company’s cumulative TSR as of March 31 of each year presented, assuming an initial fixed $100 investment on
March 31, 2020.
(4) The peer group used for relative TSR is the RDG Technology Composite Index which is the same peer group the Company uses for its Item 201(e) of Regulation S-K
disclosure, assuming an initial fixed $100 investment on March 31, 2020.
(5) We identified Non-GAAP Net Revenue as our Company-Selected Measure. Additional information regarding use of non-GAAP measures and reconciliations to the
most direct comparable GAAP measures can be found on Appendix A in the proxy statement for the fiscal year to which the non-GAAP measure relates.
56
ExECutivE CoMpEnSAtion tABLES
Relationship between “Compensation Actually Paid” and TSR
n
r
u
t
e
R
r
e
d
o
h
e
r
a
h
S
l
l
a
t
o
T
)
d
e
t
s
e
v
n
i
0
0
1
$
f
o
h
t
w
o
r
G
(
$200
$175
$150
$125
$100
$75
$50
$25
$0
$170
$135
$43.9
$13.8
FY 2021
PEO CAP
Non-PEO Avg CAP
$183
$127
$166
$122
$9.9
$5.4
FY 2022
EA TSR
$9.9
$3.4
FY 2023
RDG Technology Composite Index
Relationship between “Compensation Actually Paid” and Net Income
e
m
o
c
n
I
t
e
N
)
s
n
o
i
l
l
i
m
n
I
(
$1,400
$1,225
$1,050
$875
$700
$525
$350
$175
$0
$837
$43.9
$789
$802
$13.8
$9.9
$5.4
FY 2021
FY 2022
$9.9
$3.4
FY 2023
PEO CAP
Non-PEO Avg CAP
Net Income
Relationship between “Compensation Actually Paid” and Non-GAAP Net Revenue
e
u
n
e
v
e
R
t
e
N
P
A
A
G
-
n
o
N
)
s
n
o
i
l
l
i
m
n
I
(
$12,000
$10,500
$9,000
$7,500
$6,000
$4,500
$3,000
$1,500
$0
$6,190
$43.9
$7,515
$7,341
$13.8
$9.9
$5.4
FY 2021
FY 2022
$9.9
$3.4
FY 2023
PEO CAP
Non-PEO Avg CAP
Non-GAAP Net Revenue
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
C
A
P
(
$
m
i
l
l
i
o
n
s
)
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
C
A
P
(
$
m
i
l
l
i
o
n
s
)
C
A
P
(
$
m
i
l
l
i
o
n
s
)
Most Important Performance Measures
The performance measures identified below represent the measures the Company considers the most important in its executive
compensation program linking pay to performance for fiscal year 2023. The use of each measure is discussed in the Compensation
Discussion and Analysis—Our NEOs’ Fiscal Year 2023 Compensation.
Most Important Performance Measures
Non-GAAP Net Revenue*
Non-GAAP Earnings Per Share*
Non-GAAP Operating Income*
* For more information regarding our use of non-GAAP financial measures for our compensation programs, please refer to the information provided under the
heading “About Non-GAAP Financial Measures” in Appendix A below.
57
2023 PROXY STATEMENT
ExECutivE CoMpEnSAtion tABLES
Equity Compensation Plan Information
The following table shows information, as of April 1, 2023, regarding shares of our common stock authorized for issuance under our 2019
EIP, our 2000 Equity Incentive Plan (which terminated on August 8, 2019) (“2000 EIP”), and our 2000 Employee Stock Purchase Plan, as
amended (“ESPP”).
Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total(4)
Number Of
Securities
to be Issued
Upon Exercise
of Outstanding
Options,
Warrants and
Rights
(A)
8,843,255(1)
–
8,843,255
Weighted-
Average
Exercise Price
of Outstanding
Options,
Warrants
and Rights
(B)
$ 35.17(2)
–
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities Reflected
in Column (A))
(C)
25,216,314(3)
–
25,216,314
(1)
Includes (a) 99,007 shares of common stock issuable upon exercise of outstanding options under the 2000 EIP; (b) 86,740 unvested time-based and performance-
based restricted stock unit awards outstanding under the 2000 EIP; and (c) 8,657,508 unvested time-based and performance-based restricted stock unit awards
outstanding under the 2019 EIP.
(2) Outstanding restricted stock unit awards subject to time-based and/or performance-based vesting do not have an exercise price and therefore are not included in
the calculation of the weighted-average exercise price.
(3) Each full value award granted under the 2019 EIP reduces the number of shares available for issuance under our 2019 EIP by 1.43 shares and each stock option
granted reduces the number of shares available for issuance by 1 share. Thus, if future awards under the 2019 EIP consisted exclusively of full value awards (such as
time-based and performance-based restricted stock units), awards covering a maximum of 21,667,908 shares (or 15,152,383 shares based on the 1.43 reduction for
full-value awards) are available for issuance under the 2019 EIP. There are 3,548,406 shares available for purchase by our employees under the ESPP.
(4) The table does not include information with respect to shares subject to outstanding awards assumed by us in connection with the acquisition of Glu Mobile Inc.
As of April 1, 2023, 125,214 shares of our common stock were issuable upon exercise of outstanding options and the release of restricted stock units assumed in
connection with this acquisition. The weighted average exercise price of such outstanding options was $64.50 per share. Other than the awards we assumed in
connection with this acquisition, no additional equity awards may be granted under any assumed arrangement related to the acquisition.
58
Audit Matters
Selection and Engagement of Independent
Registered Public Accounting Firm
KPMG LLP has audited the financial statements of the Company and its consolidated subsidiaries since fiscal year 1987. The Audit
Committee and the Board of Directors believe that KPMG LLP’s long-term knowledge of EA and its subsidiaries is valuable to the
Company as set forth in more detail below. Representatives from KPMG have direct access to the members of the Audit Committee and
Board of Directors. We expect one or more representatives of KPMG LLP to attend the Annual Meeting in order to respond to appropriate
questions from stockholders and make a statement if they desire to do so.
Services Provided by the Independent Auditor
KPMG LLP audits our consolidated operations and provides statutory audits for legal entities within our international corporate structure.
Having one audit firm with a strong global presence responsible for these audits supports a coordinated approach to address issues
that may impact our businesses across multiple geographies and legal entities. Few audit firms have the knowledge of our sector and
the capability of servicing our global audit requirements. KPMG LLP has the geographical scope that our operations require and the
accounting expertise in the matters relevant to our sector. In addition, KPMG LLP’s experience working with the Company gives them
the institutional knowledge to understand our operations and processes, which we believe helps them address the relevant issues and
improves the quality of the audit.
In appointing KPMG LLP as our independent auditors for fiscal year 2024, the Audit Committee and the Board of Directors have
considered the performance of KPMG LLP in fiscal year 2023, as well as in prior years, and have taken into account the alternative
options available to the Company. The Audit Committee and the Board of Directors have determined that it is in the best interests of the
Company and its stockholders to continue KPMG LLP’s engagement.
We believe the experience and expertise held by the members of the Audit Committee give them the necessary skills to evaluate the
relationship between the Company and its independent auditors and to oversee auditor independence. The Audit Committee periodically
considers whether there should be rotation of our independent external audit firm. The Audit Committee is empowered under its charter
to obtain advice and assistance from outside legal, accounting and other advisors as it deems appropriate.
At each meeting of the Audit Committee, Company management is provided the opportunity to meet in private session with the Audit
Committee to discuss any issues relating to KPMG LLP’s engagement. Similarly, KPMG LLP regularly meets in private session with the
Audit Committee with no members of Company management present.
Audit Partner Rotation
Our KPMG LLP lead audit partner has been working on the Company’s audit since the first quarter of fiscal year 2021. Our KPMG LLP
concurring audit partner has been working on the Company’s audit since the first quarter of fiscal year 2020. Each audit partner may
serve a maximum of five years on the Company’s audit. Candidates are proposed by KPMG LLP based on their expertise and experience
and are vetted by Company management and a recommendation is made to the Audit Committee. The Audit Committee has final
approval of the lead audit partner and the concurring audit partner.
59
2023 PROXY STATEMENT Audit MAtters
Fees of Independent Auditors
The aggregate fees billed for the last two fiscal years for each of the following categories of services are set forth below:
Description of Fees
Audit Fees(1)
Audit-related Fees(2)
Tax Fees(3)
All Other Fees
Total
Year Ended
March 31, 2023
Year Ended
March 31, 2022
$4,908,000
$5,585,000
29,000
139,000
—
80,000
130,000
—
$5,076,000
$5,795,000
(1) Audit Fees: This category includes the annual audit of the Company’s financial statements and internal controls over financial reporting (including quarterly reviews
of financial statements included in the Company’s quarterly reports on Form 10-Q), and services normally provided by the independent auditors in connection with
regulatory filings. This category also includes consultation on matters that arose during, or as a result of the audit or review of financial statements, statutory audits
required for our non-U.S. subsidiaries, and other documents filed with the SEC, and Sarbanes-Oxley Section 404 compliance consultation.
(2) Audit-Related Fees: This category consists of fees for assurance and related services that are reasonably related to the performance of the audit or review of
the Company’s financial statements and are not reported under “Audit Fees.” In both fiscal years 2023 and 2022, these fees were for accounting consultations and
services in the U.S. and in connection with other regulatory filings in our international jurisdictions.
(3) Tax Fees: This category includes compliance services rendered for U.S. and foreign tax compliance and returns, and transfer pricing documentation.
Pre-approval Procedures
The Audit Committee is required to pre-approve the engagement of, and fees incurred by, KPMG LLP to perform audit and other
services for the Company and its subsidiaries. The Company’s procedures for the pre-approval by the Audit Committee of all services
provided by KPMG LLP and the related fees comply with SEC regulations regarding pre-approval of services. Services subject to these
SEC requirements include audit services, audit-related services, tax services and other services. In some cases, pre-approval for a
particular category or group of services and the related fees are provided by the Audit Committee for up to a year, subject to a specific
budget and to regular management reporting. In other cases, the Chair of the Audit Committee has the delegated authority from the
Audit Committee to pre-approve additional services and the related fees up to a specified dollar limit, and such pre-approvals are then
communicated to the full Audit Committee. The Audit Committee reviews quarterly the status of all pre-approved services and the
related fees to date and approves any new services and the related fees to be provided.
In determining whether to grant a pre-approval, the Audit Committee considers the level of non-audit fees incurred to date as a
percentage of the total annual fees paid to KPMG LLP. In addition, the Audit Committee considers additional factors to assess the
potential impact on auditor independence of KPMG LLP performing such services, including whether the services are permitted
under the rules and recommendations of the Public Company Accounting Oversight Board, the American Institute of Certified Public
Accountants, the Nasdaq Stock Market, whether the proposed services are permitted under EA’s policies, and whether the proposed
services are consistent with the principles of the SEC’s auditor independence rules. The Company also annually confirms with each of
its directors and executive officers whether there are any relationships that they are aware of with KPMG LLP that may impact the auditor
independence evaluation. The Audit Committee considered and determined that fees for services other than audit and audit-related
services paid to KPMG LLP during fiscal year 2023 are compatible with maintaining KPMG LLP’s independence.
60
Audit MAtters
Report of the Audit Committee of the Board
of Directors
The following Report of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC nor shall this
information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that
EA specifically incorporates it by reference into a filing.
The Audit Committee of the Board of Directors operates under a written charter, which was most recently amended in May 2018. The
Audit Committee is currently comprised of three non-employee directors, each of whom in the opinion of the Board of Directors meets
the current independence requirements and financial literacy standards of the Nasdaq Stock Market Rules, as well as the independence
requirements of the SEC. During fiscal year 2023, the Audit Committee consisted of Kofi A. Bruce, Jeffrey T. Huber, and Richard A.
Simonson. The Board of Directors has determined that each of Mr. Bruce and Mr. Simonson meets the criteria for an “audit committee
financial expert” as set forth in applicable SEC rules.
The Company’s management is primarily responsible for the preparation, presentation and integrity of the Company’s financial
statements. EA’s independent registered public accounting firm, KPMG LLP (the “independent auditors”), is responsible for performing an
independent audit of the Company’s (1) financial statements and expressing an opinion as to the conformity of the financial statements
with U.S. generally accepted accounting principles, and (2) internal control over financial reporting in accordance with the auditing
standards of the Public Company Accounting Oversight Board (the “PCAOB”) and issuing an opinion thereon.
The Audit Committee assists the Board of Directors in its oversight responsibility with respect to the integrity of EA’s accounting policies,
internal control function and financial reporting processes. The Audit Committee reviews EA’s quarterly and annual financial statements
prior to public earnings releases and submission to the SEC; oversees EA’s internal audit function; consults with the independent auditors
and EA’s internal audit function regarding internal controls and the integrity of the Company’s financial statements; oversees tax and
treasury matters; oversees EA’s enterprise risk management program; assesses the independence of the independent auditors; and is
directly responsible for the appointment, retention, compensation and oversight of the independent auditors. In this context, the Audit
Committee has met and held discussions with members of management, EA’s internal audit function and the independent auditors.
Company management has represented to the Audit Committee that the Company’s consolidated financial statements for the most
recently completed fiscal year were prepared in accordance with accounting principles generally accepted in the United States, and the
Audit Committee has reviewed and discussed the consolidated financial statements with Company management and the independent
auditors. Company management has represented to the Audit Committee that the Company’s internal control over financial reporting
was effective as of the end of the Company’s most recently completed fiscal year, and the Audit Committee has reviewed and discussed
the Company’s internal control over financial reporting with management and the independent auditors. The Audit Committee discussed
with the independent auditors matters required to be discussed by the applicable requirements of the PCAOB and SEC, including the
quality and acceptability of the Company’s financial reporting and internal control processes. The Audit Committee also has discussed
with the Company’s independent auditors the scope and plans for their annual audit and reviewed the results of that audit with
management and the independent auditors.
In addition, the Audit Committee received and reviewed the written disclosures and the letter from the independent auditors required
by the applicable requirements of the PCAOB regarding their communications with the Audit Committee concerning independence and
has discussed with the independent auditors the auditors’ independence from the Company and its management. The Audit Committee
also has considered whether the provision of any non-audit services (as described above under the heading “Audit Matters” — “Fees
of Independent Auditors”) and the employment of former KPMG LLP employees by the Company are compatible with maintaining the
independence of KPMG LLP.
The members of the Audit Committee are not engaged in the practice of auditing or accounting. In performing its functions, the Audit
Committee necessarily relies on the work and assurances of the Company’s management and the independent auditors.
In reliance on the reviews and discussions referred to in this report, and in light of its role and responsibilities, the Audit Committee
recommended to the Board of Directors that the Company’s audited financial statements for fiscal year 2023 be included for filing
with the SEC in the Company’s Annual Report. The Audit Committee also has approved the selection of KPMG LLP as the Company’s
independent auditors for fiscal year 2024.
Audit COMMittee
Kofi A. Bruce (Chair)
richard A. simonson
Jeffrey t. Huber
61
2023 PROXY STATEMENT Stock Ownership Information
Security Ownership of Certain Beneficial
Owners and Management
The following table shows, as of June 16, 2023, the number of shares of our common stock owned by our directors, NEOs, our current
directors and executive officers as a group, and beneficial owners known to us holding more than 5% of our common stock. From time to
time we engage in ordinary course business transactions with other companies in which one or more of our greater-than-5% beneficial
owners may have an investment. As of June 16, 2023, there were 272,116,984 shares of our common stock outstanding. Except as
otherwise indicated, the address for each of our directors and executive officers is c/o Electronic Arts Inc., 209 Redwood Shores Parkway,
Redwood City, CA 94065.
Stockholder Name
the Public investment Fund(4)
Blackrock, inc.(5)
the Vanguard Group inc.(6)
Andrew Wilson(7)
Christopher suh
Laura Miele
Chris Bruzzo
Mala singh(8)
Kenneth Moss
Kofi A. Bruce
rachel A. Gonzalez
Jeffrey t. Huber(9)
talbott roche
richard A. simonson
Luis A. ubiñas
Heidi J. ueberroth
All current executive officers and directors as a group (14) persons(10)
* Less than 1%
Shares
Owned(1)
Right to
Acquire(2)
24,807,932
24,801,166
21,903,490
136,293
9,585
38,586
11,907
31,947
249,555
1,870
2,643
90,825
19,589
58,723
—
5,799
—
—
—
—
—
—
5,402
—
—
2,004
2,004
13,876
2,004
35,038
57,410
8,373
Percent of
Outstanding
Shares(3)
9.12%
9.11%
8.05%
*
*
*
*
*
*
*
*
*
*
*
*
*
430,361
123,210
0.20%
(1) Unless otherwise indicated in the footnotes, includes shares of common stock for which the named person has sole or shared voting and investment power.
This column excludes shares of common stock that may be acquired through stock option exercises, which are included in the column “Right to Acquire.”
(2)
Includes (a) shares of common stock that may be acquired through stock option exercises and releases of RSUs within 60 days of June 16, 2023, (b) in the case of
Mr. Simonson, reflects 35,038 RSUs that have vested but have been deferred, (c) in the case of Mr. Ubiñas, reflects 52,538 RSUs that have vested but have been
deferred and (d) in the case of Ms. Ueberroth, reflects 8,373 RSUs that have vested but have been deferred.
(3) Calculated based on the total number of shares owned plus the number of shares that may be acquired through stock option exercises and the release of vested
RSUs within 60 days of June 16, 2023.
(4) As of December 31, 2022, based on information contained in a report on Schedule 13G/A filed with the SEC on February 14, 2023 as updated by a report on
Schedule 13F filed on May 15, 2023, by The Public Investment Fund, reporting sole voting and dispositive power over 24,807,932 shares of common stock, and shared
voting and dispositive power over no shares. The address for The Public Investment Fund is P.O. Box 6847, Riyadh 11425, Kingdom of Saudi Arabia.
(5) As of December 31, 2022, based on information contained in a report on Schedule 13G/A filed with the SEC on January 27, 2023 by Blackrock, Inc., reporting sole
voting power over 22,334,049 shares of common stock, sole dispositive power over 24,801,166 shares of common stock, and shared voting and dispositive power
over no shares. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
(6) As of December 30, 2022, based on information contained in a report on Schedule 13G/A filed with the SEC on February 9, 2023 by The Vanguard Group, reporting
shared voting power over 376,644 shares of common stock, sole dispositive power over 20,801,654 shares of common stock, shared dispositive power over
1,101,836 shares of common stock, and sole voting power over no shares of common stock. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern,
PA 19355.
(7)
(8)
Includes 87,809 shares of common stock are held by Mr. Wilson’s family trust and 48,484 shares of common stock held in trust for the benefit of Mr. Wilson’s
descendants. Mr. Wilson has investment control over, and pecuniary interest in, shares held in his family trust. Mr. Wilson has investment control over shares held in
trusts for his descendants.
Includes 31,947 shares of common stock are held by Ms. Singh’s family trust. Ms. Singh has investment control over, and pecuniary interest in, shares held in her
family trust.
(9) Includes 304 shares of common stock held directly by Mr. Huber, 67,412 shares of common stock held by Mr. Huber’s family trust and 23,109 shares of common stock
and 11,872 vested options held by trusts over which Mr. Huber maintains investment control and pecuniary interest.
(10) Includes all executive officers and directors of EA as of the date of this filing.
62
stOCK OWnersHiP inFOrMAtiOn
Stock Ownership Requirements
Directors
Each non-employee director is required, within five years of becoming a director, to own a number of shares of EA common stock having
a value of at least five years’ annual retainer for service on our Board of Directors.
Non-employee directors are permitted to include the value of vested, but deferred, RSUs toward their ownership requirement. As of the
end of fiscal year 2023, each of our directors had fulfilled his or her ownership requirements. Mr. Huber is eligible to satisfy his ownership
requirements through holdings of EA common stock through certain trusts over which Mr. Huber maintains investment control and
pecuniary interest.
Section 16 Officers
In accordance with our stock ownership guidelines, Section 16 officers must maintain stock ownership equal to the minimum ownership
requirements listed in the table below. Our CEO is required to own stock with a value equal to ten times his base salary. Each of our NEOs
(other than the CEO) is an Executive Vice President and therefore is required to own stock with a value equal to three times his or her
base salary.
Position
CeO
Stock Ownership Value as a Multiple of Base Salary
10x
executive Vice President
3x
senior Vice President
1x
We test the stock ownership holding requirement on an annual basis, and any Section 16 officer not in compliance with these guidelines
must hold 50% of any net after-tax shares vesting from equity awards until the applicable requirement is met. The Compensation
Committee last reviewed the stock ownership requirements in May 2023. As of that date, each of our executive officers had either met his
or her then-applicable stock ownership holding requirement or had not yet reached the date on which he or she is required to meet his or
her ownership requirements, which is generally 50 months from the date of hire, appointment, or promotion. For promotions, executives
must maintain their prior-level minimum holding requirements during any applicable transition period.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than ten percent of
our ordinary shares to file reports of their beneficial ownership and changes in ownership (Forms 3, 4 and 5, and any amendment thereto)
with the SEC.Based solely on a review of forms filed in the SEC’s EDGAR database and written representations from executive officers
and directors, we believe that during the fiscal year ended April 1, 2023, all required reports were filed on a timely basis.
Insider Trading, Anti-Hedging and
Anti-Pledging Policies
We maintain an insider trading policy designed to promote compliance by our employees and directors with both federal and state
insider trading laws. In addition, our insider trading policy prohibits our directors, executive officers, employees and family members of
any director, executive officer or employee or others living in their respective households, from engaging in any hedging transaction with
the Company’s securities, buying the Company’s securities on margin, or otherwise trading in any derivative of the Company’s securities
(including put and/or call options, swaps, forwards or futures contracts, short sales or collars). Our directors and Section 16 officers also
are prohibited from pledging our stock as collateral for any loan.
63
2023 PROXY STATEMENT
Proposals to be Voted on
PROPOSAL 1
Election of Directors
At the Annual Meeting, stockholders will elect eight directors to hold office for a one-year term until the next annual meeting
(or until their respective successors are appointed). All nominees have consented to serve a one-year term, if elected. For
additional information regarding the nominees and our corporate governance practices, including our director resignation
policies and refreshment practices, please see the sections of this Proxy Statement entitled “Proxy Highlights,” and “Board of
Directors and Corporate Governance.”
The 2023 election of directors will be uncontested. Accordingly, EA’s Amended and Restated Bylaws provide that in an
uncontested election of directors each nominee must receive more votes cast “for” than “against” his or her re-election in order
to be elected or re-elected to the Board of Directors.
The Board of Directors has nominated the following directors to stand for re-election. Each of our director nominees currently
serves on the Board of Directors and was elected to a one-year term at the 2022 annual meeting.
■ Kofi A. Bruce
■ Rachel A. Gonzalez
■ Jeffrey T. Huber
■ Talbott Roche
■ Richard A. Simonson
■ Luis A. Ubiñas
■ Heidi J. Ueberroth
■ Andrew Wilson
The Board of Directors recommends a vote FOR each of the nominees.
64
PrOPOsALs tO Be VOted On
PROPOSAL 2
Advisory Vote to Approve Named Executive
Officer Compensation
In accordance with the SEC’s proxy rules, we seek an advisory, non-binding stockholder vote with respect to the compensation of our
named executive officers for fiscal year 2023. This vote, which is undertaken by us annually, is not intended to address any specific
item of compensation, but rather the overall compensation of our named executive officers and the compensation philosophy,
policies, and practices, as disclosed in this Proxy Statement. Approval of this proposal, commonly known as a “say-on-pay” proposal,
requires the affirmative vote of a majority of the voting shares present at the Annual Meeting in person or by proxy and voting for or
against the proposal. We are asking our stockholders to vote on the following resolution at the Annual Meeting:
“resOLVed, that the Company’s stockholders approve, on a non-binding, advisory basis, the compensation of
the named executive officers for fiscal year 2023, as disclosed in the Compensation discussion and Analysis,
the compensation tables, and the related narrative disclosures in this Proxy statement.”
Our Board of Directors recommends a vote “FOR” this resolution. Our Board of Directors, Compensation Committee and EA
management are committed to maintaining pay-for-performance alignment in our executive compensation program. Our
pay-for-performance approach is designed to reward the achievement of Company-wide financial and business objectives,
individual performance, and the creation of long-term value for stockholders, while also recognizing the dynamic and highly
competitive nature of our business and the market for top executive talent.
At last year’s Annual Meeting, our say-on-pay proposal received the support of 92% of the votes cast. We encourage you to
review carefully the “Compensation Discussion and Analysis” and accompanying compensation tables and narrative discussion for
a more detailed description of our executive compensation program and decisions.
Although the vote is advisory and non-binding, our Board of Directors and Compensation Committee value the opinions of our
stockholders and will consider the outcome of the vote, along with other relevant factors, in evaluating the future compensation
of our named executive officers. We currently intend to hold the next non-binding advisory vote to approve the compensation of
our named executive officers at our 2024 annual meeting.
The Board of Directors recommends a vote FOR the approval of the foregoing resolution.
65
2023 PROXY STATEMENT PrOPOsALs tO Be VOted On
PROPOSAL 3
Ratification of the Appointment of KPMG LLP,
Independent Public Registered Accounting Firm
The Audit Committee has appointed KPMG LLP as the Company’s independent auditors for the fiscal year ending March 31,
2024. Ratification of the appointment of KPMG LLP as our independent auditors is not required by our Amended and Restated
Bylaws or otherwise. The Board of Directors has determined to submit this proposal to the stockholders as a matter of good
corporate practice. Approval of this proposal requires the affirmative vote of a majority of the voting shares present at the
meeting in person or by proxy and voting for or against the proposal. If the stockholders do not ratify the appointment, the
Audit Committee will review its future selection of auditors. Even if the appointment is ratified, the Audit Committee may, in its
discretion, direct the appointment of different independent auditors at any time during the year if it determines that such a
change would be in the best interests of the Company and the stockholders.
The Board of Directors recommends a vote FOR the ratification of KPMG LLP as our independent
auditors for the fiscal year ending March 31, 2024.
66
PrOPOsALs tO Be VOted On
PROPOSAL 4
Advisory Vote on the Frequency of
Say-on-Pay Votes
As described in Proposal 2 above, our stockholders have the opportunity to cast an advisory, non-binding vote on the
compensation of our named executive officers (“say-on-pay vote”).
The SEC rules require us to ask our stockholders (at least once every six years) how often they would like to hold the say-on-pay
vote. The options required by law are every year, every two years, or every three years.
At our 2017 Annual Meeting, our stockholders favored holding the say-on-pay vote every year. Accordingly, we have held it every
year. Now on the sixth anniversary of that result, we are again asking our stockholders how often we should hold the say-on-pay
vote in the next six years. Under this Proposal 4, stockholders may vote to hold it every year (by voting “1 Year”), every two years
(by voting “2 Years”), every three years (by voting “3 Years”), or abstain from voting (by indicating “Abstain”).
The Board of Directors recommends that future advisory votes to approve named executive officer compensation be held
every year.
A majority of the votes cast for one of the options presented by Proposal 4 will determine the stockholders’ preferred frequency
for holding an advisory vote on the compensation of our named executive officers. This means that the option receiving the
greatest number of votes will be considered the preferred frequency of our stockholders.
Although the vote is advisory and non-binding, our Board of Directors and Compensation Committee value the opinions of our
stockholders and will consider the outcome of the vote, along with other relevant factors, when making future decisions regarding
the frequency of conducting a say-on-pay vote.
The Board of Directors recommends a vote for the option of an annual (“1 Year”) advisory vote to
approve named executive officer compensation.
67
2023 PROXY STATEMENT PrOPOsALs tO Be VOted On
PROPOSAL 5
Stockholder Proposal on Termination Pay
The Company has been advised that James McRitchie and Myra K. Young, 9295 Yorkship Court, Elk Grove, CA 95758, the beneficial
owners of 25 shares of EA’s common stock, intend to present the following proposal for consideration at the Annual Meeting.
Proposal 5 – Shareholder Ratification of Termination Pay
Resolved: Shareholders of Electronic Arts Inc. (Company) request the Board seek shareholder approval of any senior manager’s
new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99 times
the sum of the executive’s base salary plus target short-term bonus.
“Severance or termination payments” include cash, equity or other compensation that is paid out or vests due to a senior
executive’s termination for any reason. Payments include those provided under employment agreements, severance plans, and
change-in-control clauses in long-term equity plans, but not life insurance, pension benefits, or deferred compensation earned
and vested prior to termination.
“Estimated total value” includes; lump-sum payments; payments offsetting tax liabilities; perquisites or benefits not vested under
a plan generally available to management employees; post-employment consulting fees or office expense; and equity awards if
vesting is accelerated, or a performance condition waived, due to termination.
The Board shall retain the option to seek shareholder approval after material terms are agreed upon.
Supporting Statement: Generous performance-based pay can be good but shareholder ratification of “golden parachute”
severance packages with a total cost exceeding 2.99 times base salary plus target short-term bonus better aligns management
pay with shareholder interests.
For instance, at one company if the CEO is terminated without cause, whether or not his termination follows a change in control,
he will receive $39 million in termination payments, nearly 7-times his base salary plus short-term bonus.
It is in the best interest of Company shareholders to be protected from such lavish management termination packages.
It is important to have this policy in place so that Company management focuses on improving company performance, instead of
possible business combinations to trigger a golden parachute windfall.
This proposal is more important at our Company because of the tendency to overpay management or provide the wrong
management pay incentives. Pay was rejected by 8% of shares in 2022, 58% in 2021, 74% in 2020, whereas a 5% rejection is more
the norm.
Consider also: Contrary best practice,1 our Company closed polls about fifteen seconds after presentation of the last proposal
at its 2022 annual meeting. If shareholders fail to present their proposals, companies can exclude future proposals for two years.
Our Company treats voting at the meeting as an empty ritual.
1 https://optimizeronline.com/how-and-when-to-properly-open-and-close-the-polls/
Please vote yes:
Shareholder Ratification of Termination Pay – Proposal 5
Enhance Shareholder Value, Vote FOR
68
PrOPOsALs tO Be VOted On
The Company’s Opposition Statement to
Proposal 5
Our Board of Directors recommends a vote “AGAinst” this proposal because it is unnecessary and not in the best interests of
the Company or its stockholders.
This proposal is unnecessary because our cash severance policy already limits cash severance payments to no more
than 2.99 times base salary plus target annual bonus opportunity, and our existing severance benefits are payable
only in very specific situations.
We have an Executive Officer Cash Severance Policy (the “Cash Severance Policy”) that already addresses the proposal’s request
with regard to salary and annual bonus. This policy does not allow the Company to enter into any new employment agreement,
severance agreement, or separation agreement with any executive officer—or establish any new severance plan or policy covering
any executive officer—that provides for cash severance benefits exceeding 2.99 times the sum of the executive officer’s base
salary plus target annual bonus opportunity, without seeing stockholder ratification of such arrangement.
Furthermore, the possibility of receiving severance pay is already very limited because:
■ we do not maintain employment agreements with executive officers that include severance protections;
■ we do not have a practice of paying severance to departing executive officers; and
■ outstanding equity awards held by our executive officers will be forfeited in an ordinary course termination of employment.
We provide certain equity-related benefits in the extraordinary event of death or disability to all employees (not just
executive officers) meeting certain service requirements. These include full vesting of equity awards upon death and pro
rata vesting of awards in the event of disability (in each case, with the vesting of performance-based awards to be based on
actual performance).
As previously discussed, we maintain a Change in Control Severance Plan. Under this plan, benefits are only payable in the event
of a termination of employment without cause or for good reason within a specified period of time before or after a change-in-
control transaction (a “double trigger” termination). A substantial number of public companies and many of our peers provide
double-trigger severance benefits as a standard component of an executive pay package. Moreover, this plan does not otherwise
provide for excise tax gross ups, additional equity grants, or special retirement provisions.
For these reasons, the Board of Directors and Compensation Committee believe that the Cash Severance Policy more
appropriately addresses and limits severance benefits than the far-reaching mandates of the proposal.
The proposal is not in the best interests of stockholders because it could place us at a severe competitive
disadvantage by limiting our ability to attract and retain highly qualified executives.
Our Board of Directors and Compensation Committee also recognize that attracting and retaining talent requires offering
competitive severance benefits upon certain terminations of employment, especially a double-trigger termination in a change
in control. As noted above, many public companies, including our peers, provide double-trigger severance benefits to their
executives. In our experience, executive-level candidates expect these protections as part of their compensation packages, and
we would jeopardize our ability to attract qualified executives if they were not offered. Even if offers of employment contained
severance protections that were contingent upon stockholder approval or ratification, they may be viewed as too uncertain and
would discourage top candidates from accepting.
Furthermore, calling a special meeting of stockholders to obtain prior approval of a severance arrangement that could exceed
the specified cap would be expensive, impractical, and time-consuming. Top candidates—when informed that the terms of
their compensation package first require binding stockholder approval—would be unwilling to sit on the sidelines awaiting such
approval. They may instead seek employment elsewhere, including at one of our competitors who do not face similar restrictions.
In a competitive market where the ability to act quickly on opportunities to attract top-level executive talent is paramount, the
implementation of this proposal would significantly restrict the Company’s agility in hiring.
For these reasons, the proposal would compromise our recruiting efforts and introduce uncertainty and potential delays into
the process. Instead, the Board of Directors and Compensation Committee believe that the Cash Severance Policy is better
suited for the Company to remain competitive for top-performing talent, which would ultimately be in the best interest of our
stockholders.
This proposal is unnecessary because we provide stockholders with a voice on executive pay through our annual
say-on-pay vote and robust stockholder outreach program.
We hold an annual say-on-pay advisory vote giving our stockholders the ability to vote on our executive compensation program
each year. In addition, SEC rules further require separate approval, on an advisory basis, by stockholders of golden parachute
compensation payable to named executive officers in connection with change-in-control transactions. If we were to undergo a
change in control transaction, stockholders would have the opportunity to vote on any golden parachute arrangements with our
executives.
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2023 PROXY STATEMENT PrOPOsALs tO Be VOted On
Supplementing this vote, we have a robust year-round stockholder outreach program. As previously discussed, we have
conducted extensive stockholder engagement to request feedback on our executive compensation program over recent years.
Our adoption of the Cash Severance Policy is a result of such engagement. In fiscal year 2023, we reached out to stockholders
holding approximately 61% of our outstanding common stock to offer meetings, and we held 15 calls to understand their views
on executive compensation, among other issues. Stockholders continued to express appreciation for the substantive changes
we have made to our executive compensation program in recent years, including our adoption of the Cash Severance Policy.
Importantly, on these calls, none of our stockholders raised the topic of our severance practices as an area of concern.
We believe that these avenues of communication, along with the annual say-on-pay votes, are the most streamlined and effective
ways of providing stockholders with a voice on our executive compensation program. Requiring intermittent stockholder approval
of specific elements of compensation would be inefficient, and as discussed above, carries the risk of jeopardizing our ability to
attract and retain highly qualified candidates.
This proposal would unduly restrict the Compensation Committee’s ability to structure compensation programs.
Our Compensation Committee, which is comprised solely of independent directors, is best suited to assess the needs of the
Company, the competition for talent, and other relevant factors in making decisions on our executive compensation program.
However, the proposal would serve to undermine and constrain the Compensation Committee from being able to exercise
its judgment about which forms of compensation best serve the Company and our stockholders. It would further restrict the
Compensation Committee from securing talent, reacting to dynamic market practices, responding to business exigencies, and
otherwise structuring our program in a market-competitive manner. Instead, our Compensation Committee should be afforded
the ability to continue to exercise strong independent leadership and oversight, while maintaining the ability to design and
implement a prudent executive compensation program that is aligned with the interests of our stockholders.
required Vote
Approval of this proposal requires the affirmative vote of a majority of the voting shares present at the meeting or by proxy and
voting for or against the proposal.
The Board of Directors recommends a vote AGAINST the stockholder proposal regarding shareholder
ratification of termination pay.
70
Other Information
Commonly Asked Questions and Answers
1. Why am I receiving these materials and how do I attend the virtual meeting?
You are receiving these materials in connection with the Company’s solicitation of proxies for use at our Annual Meeting, which will take
place virtually at www.virtualshareholdermeeting.com/EA2023 on Thursday, August 10, 2023 at 2:00 p.m. local time. In structuring the
virtual meeting, our goal is to provide stockholders the same opportunity to participate as they would have at an in-person meeting.
This Proxy Statement describes proposals on which you, as a stockholder, are being asked to vote. It also gives you information on the
proposals that will be considered at the Annual Meeting, as well as other information so that you can make an informed decision. As a
stockholder, you are invited to attend the Annual Meeting online and are requested to vote on the items of business described in this
Proxy Statement.
2. How do I attend the virtual meeting?
This year’s Annual Meeting will be accessible only through the Internet. You can participate in the Annual Meeting if you were a stockholder
as of the close of business on the record date, June 16, 2023. To participate in the Annual Meeting, including to vote and ask questions, go
to www.virtualshareholdermeeting.com/EA2023 and log-in using the 16-digit control number on your Notice or proxy card next to the
label “Control Number” for postal mail recipients or within the email for electronic delivery recipients, and follow the instructions on the
website. If your shares are held in street name and your voting instruction form or Notice indicates that you may attend and vote those
shares through the http://www.proxyvote.com website, then you may vote at the Annual Meeting with the 16-digit access code indicated
on that voting instruction form or Notice. Otherwise, stockholders who hold their shares in street name should contact their bank, broker or
other nominee and obtain a “legal proxy” in order to attend and vote at the Annual Meeting.
We encourage you to join 15 minutes before the start time. Stockholders may submit questions online during the Annual Meeting at
www.virtualshareholdermeeting.com/EA2023. A copy of the Annual Meeting rules of conduct will be available online at the Annual
Meeting. The list of registered stockholders as of June 16, 2023 will be available for inspection by stockholders during the meeting
at www.virtualshareholdermeeting.com/EA2023. There will not be a physical location for the Annual Meeting, and you will not be able
to attend the Annual Meeting in person. If you have difficulty accessing or participating in the virtual Annual Meeting, please call the
technical support number that will be posted on the Annual Meeting website log-in page. We will have technicians available to assist you.
3. Why did I receive a Notice in the mail regarding the Internet availability of proxy materials instead of a full set of
proxy materials?
In accordance with rules adopted by the SEC, we may furnish proxy materials, including this Proxy Statement and our Annual Report, to
our stockholders by providing access on the Internet instead of mailing printed copies. Stockholders will receive printed copies of the
proxy materials only if they request them. Instead, the Notice, which was mailed to our stockholders, provides instructions on how to
access and review all the proxy materials on the Internet. The Notice also describes how you may submit your proxy on the Internet. If
you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting those materials
in the Notice or you may contact the Company directly. The Company will provide you without charge, upon request, a paper or
email copy of our proxy materials, including the Company’s Annual Report on Form 10-K (paper copies will be sent by first
class mail). Any such request should be directed as follows: Corporate Secretary, Electronic Arts Inc., 209 Redwood Shores Parkway,
Redwood City, CA 94065 or call (650) 628-1500.
4. How can I get electronic access to the proxy materials?
The Notice or proxy card provides instructions on how to inform us to send future proxy materials to you electronically by email. If
you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those
materials and a link to our proxy website. Your election to receive proxy materials by email will remain in effect until you terminate it. We
encourage you to receive future proxy materials by email. Doing so will allow us to provide you with the information you
need in a timelier manner, will save us the cost of printing and mailing documents to you, and will help reduce paper use.
5. Can I vote my shares by filling out and returning the Notice?
No. However, the Notice provides instructions on how to vote on the Internet or by attending the Annual Meeting virtually at
www.virtualshareholdermeeting.com/EA2023 and following the instructions on the website.
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2023 PROXY STATEMENT OTHer INfOrMATION
6. Who can vote at the Annual Meeting?
Stockholders who owned common stock as of the close of business on June 16, 2023 may attend and vote at the Annual Meeting. If
your shares are registered directly in your name with our transfer agent, Computershare, you are considered, with respect to those
shares, the stockholder of record. As the stockholder of record, you have the right to vote at the Annual Meeting. If your shares are
held in a brokerage account or by another nominee or trustee, you are considered the beneficial owner of shares held in “street name.”
As the beneficial owner, you are also invited to attend the Annual Meeting. As a beneficial owner, you are not the stockholder of record
and, as described in Question 2, may not in certain cases be able to vote these shares at the Annual Meeting unless you obtain a
“legal proxy” from your broker, nominee, or trustee that holds your shares, giving you the right to vote the shares at the meeting. Each
share of common stock is entitled to one vote. There were 272,116,984 shares of common stock outstanding on the record date,
June 16, 2023.
A quorum is required to conduct business at the Annual Meeting. A quorum exists if a majority of EA’s outstanding voting shares, or at
least 136,058,493 shares, as of June 16, 2023 is present or represented by proxies at the Annual Meeting. On June 16, 2023, a total of
272,116,984 shares of common stock were outstanding and entitled to vote.
Shares are counted as present or represented at the Annual Meeting if:
■ They are entitled to vote at the Annual Meeting and are present at the Annual Meeting, or
■ The stockholder has voted on the Internet, by telephone or a properly submitted proxy card prior to 11:59 p.m. Eastern Time on
August 9, 2023.
If a quorum is not present, we may propose to adjourn the Annual Meeting to solicit additional proxies and reconvene the Annual
Meeting at a later date.
7. What am I voting on?
We are asking you to:
■ Elect Kofi A. Bruce, Rachel A. Gonzalez, Jeffrey T. Huber, Talbott Roche, Richard A. Simonson, Luis A. Ubiñas, Heidi J. Ueberroth and
Andrew Wilson to the Board of Directors to hold office for a one-year term (Proposal 1);
■ Cast an advisory vote to approve named executive officer compensation (Proposal 2);
■ Ratify the appointment of KPMG LLP as the Company’s independent public registered accounting firm for the fiscal year ending
March 31, 2024 (Proposal 3);
■ Cast an advisory vote on the frequency of say-on-pay votes (Proposal 4); and
■ Consider and vote upon any stockholder proposal, if properly presented at the Annual Meeting, on termination pay (Proposal 5).
8. How do I vote my shares if I won’t be able to attend the Annual Meeting?
You do not need to attend the Annual Meeting in order to vote. You may, instead, vote on the Internet or by telephone or mail (if
you have received printed proxy materials) prior to 11:59 p.m. Eastern Time on August 9, 2023. By doing so, you are giving a proxy
appointing Andrew Wilson (the Company’s Chief Executive Officer), and Jacob Schatz (the Company’s Chief Legal Officer and
Corporate Secretary) or any of them, each with power of substitution, to vote your shares at the Annual Meeting, or any adjournment
thereof, as you have instructed. If a proposal comes up for a vote at the Annual Meeting for which you have not indicated an
instruction, Mr. Wilson and Mr. Schatz, or any one of them, will vote your shares in the manner recommended by the Board of Directors
and according to their best judgment. Even if you currently plan to attend the Annual Meeting, it is a good idea to vote on the Internet
or, if you received printed proxy materials, by telephone or by completing and returning your proxy card before the meeting date, in
case your plans change.
On the Internet or by Telephone
By Mail
If you have Internet access, you may submit your proxy online by
following the instructions provided in the Notice or, if you receive
printed proxy materials, the proxy card. You may also vote by
telephone by following the instructions provided on your proxy
card or voting instruction card.
If you receive printed proxy materials, you may submit your proxy
by mail by signing your proxy card or, for shares held in street name,
by following the voting instructions included by your broker, trustee
or nominee, and mailing it in the enclosed, postage-paid envelope.
If you provide specific voting instructions, your shares will be voted
as you have instructed.
9. What does it mean if I receive more than one Notice or proxy card?
It means that you have multiple accounts at the transfer agent or with brokers. Please complete and return all proxy cards or follow the
instructions on each proxy card to vote on the Internet or by telephone, to ensure that all your shares are voted.
72
OTHer INfOrMATION
10. I share an address with another stockholder, and we received only one paper copy of the proxy materials. How can I
obtain an additional copy of the proxy materials?
The Company has adopted an SEC-approved procedure called “householding.” Under this procedure, the Company may deliver a
single copy of the Notice or the Annual Report and this Proxy Statement to multiple stockholders who share the same last name and
address and who have consented to householding, unless the Company has received contrary instructions from one or more of those
stockholders. This procedure reduces the environmental impact of the Company’s annual meetings and reduces the Company’s
printing and mailing costs. Stockholders who participate in householding will continue to receive separate proxy cards. Upon written
or oral request, the Company will deliver promptly a separate copy of the Notice, Annual Report and this Proxy Statement to any
stockholder at a shared address to which the Company delivered a single copy of any of these documents.
To receive free of charge a separate copy of the Notice or Annual Report and this Proxy Statement, or separate copies of these
documents in the future, stockholders may write to our Corporate Secretary at 209 Redwood Shores Parkway, Redwood City, CA
94065 or call (650) 628-1500.
If you are receiving more than one copy of the proxy materials at a single address and would like to participate in householding, please
contact the Company using the mailing address or phone number above. Stockholders who hold shares in street name may contact
their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.
11. What if I change my mind after I give my proxy?
You may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting. You may do this by:
■ Sending a signed statement to the Company that the proxy is revoked (you may send such a statement to the Corporate Secretary
at our corporate headquarters address listed above);
■ Signing and returning another proxy with a later date;
■ Voting on the Internet or by telephone at any time prior to 11:59 p.m. Eastern Time on August 9, 2023 (your latest vote is counted); or
■ Voting at the Annual Meeting.
If your shares are held by a broker, bank or other nominee or trustee, you may contact the record holder of your shares directly.
Your proxy will not be revoked if you attend the Annual Meeting but do not vote.
12. Who will count the votes?
A representative of Broadridge Financial Solutions will tabulate the votes and act as the inspector of elections for our Annual Meeting.
13. How are votes counted?
You may vote “for,” “against” or “abstain” with respect to each of the nominees to the Board of Directors and on each of the proposals.
A share voted “abstain” with respect to any proposal is considered present at the Annual Meeting for purposes of establishing a
quorum and entitled to vote with respect to that proposal but is not considered a vote cast with respect to that proposal. Thus,
abstentions will not affect the outcome of Proposals 1, 2, 3, 4 or the stockholder proposal. If you are a registered stockholder and
you sign and return your proxy without voting instructions, your shares will be voted as recommended by the Board of Directors and
according to the best judgment of Mr. Wilson and Mr. Schatz, or any one of them.
14. What is the effect of a “broker non-vote” on the proposals to be voted on at the Annual Meeting?
If your shares are held by a broker, bank or other nominee or trustee and you do not provide your broker, bank or other nominee or
trustee with voting instructions, your shares may constitute “broker non-votes.” Broker non-votes occur on a matter when a broker is
not permitted to vote on that matter (or even when a broker is permitted to vote on that matter but chooses not to do so) without
instructions from the beneficial owners and instructions are not given. Shares that constitute broker non-votes are considered
present for purposes of establishing a quorum and entitled to vote with respect to that proposal but are not considered votes cast
on that proposal. Broker non-votes, if any, will not affect the outcome of Proposals 1, 2, 3, 4 or the stockholder proposal. Even with
respect to routine matters, some brokers are choosing not to exercise discretionary voting authority. As a result, if your shares are held
of record by a bank, broker, or other nominee, we urge you to give instructions to your bank, broker or other nominee as to how you
wish your shares to be voted.
15. How many votes must the nominees receive to be elected as directors?
In an uncontested election, our Amended and Restated Bylaws require each nominee to receive more votes cast “for” than “against”
his or her re-election in order to be re-elected to the Board of Directors. Since we are not aware of any intention by any stockholder to
nominate one or more candidates to compete with the Board of Directors’ nominees for re-election at the Annual Meeting, the 2023
election will be uncontested.
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2023 PROXY STATEMENT OTHer INfOrMATION
In accordance with our Corporate Governance Guidelines, the Board of Directors expects an incumbent director to tender his or
her resignation if he or she fails to receive the required number of votes for re-election in an uncontested election. In such an event,
the Nominating and Governance Committee will act on an expedited basis to determine whether to accept the director’s resignation
and will submit such recommendation for prompt consideration by the Board of Directors. The director whose resignation is under
consideration will abstain from participating in any decision regarding his or her resignation. The Nominating and Governance
Committee and the Board of Directors may consider any factors they deem relevant in deciding whether to recommend and accept, as
applicable, a director’s resignation. The Board of Directors will act on the Nominating and Governance Committee’s recommendation
within 90 days from the date of the certification of election results and will publicly disclose its decision promptly thereafter.
Shares represented by your proxy will be voted by EA’s management “for” the election or re-election of the eight nominees recommended
by EA’s Board of Directors unless you vote against any or all of such nominees or you mark your proxy to “abstain” from so voting.
16. What happens if one or more of the nominees is unable to serve or for good cause will not serve?
If, prior to the Annual Meeting, one or more of the nominees notifies us that he or she is unable to serve, or for good cause will not
serve, as a member of the Board of Directors, the Board of Directors may reduce the number of directors or select a substitute
nominee or substitute nominees, as the case may be. In the latter case, if you have completed and returned your proxy card, Mr. Wilson
and Mr. Schatz, or any of them, may vote for any nominee designated by the incumbent Board of Directors to fill the vacancy. They
cannot vote for more than eight nominees.
17. How many votes are required to approve each of the other proposals?
The advisory vote to approve named executive officer compensation (Proposal 2), the ratification of KPMG LLP as our independent
auditor (Proposal 3), the advisory vote on the frequency of say-on-pay votes (Proposal 4), and the stockholder proposals (Proposal 5)
must receive a “for” vote from a majority of the voting shares present at the Annual Meeting in person or by proxy and voting for
or against these proposals. As advisory votes, the results of voting on Proposal 2, Proposal 4, and the stockholder proposals are
non-binding. Although these votes are non-binding, the Board of Directors and its committees value the opinions of our stockholders
and will consider the outcome of these votes, along with other relevant factors, in evaluating the compensation program for our
named executive officers, the frequency of our say-on-pay votes and evaluating the matters presented by the stockholder proposal.
Shares represented by your proxy will be voted by EA’s management in accordance with the Board of Directors’ recommendation
unless you vote otherwise on your proxy or you mark your proxy to “abstain” from voting. Abstentions and broker non-votes will have no
effect on the outcome of Proposals 2, 3, 4 or the stockholder proposal.
18. What is the deadline to propose matters for consideration at the 2024 annual meeting of stockholders?
Proposals to be considered for inclusion in our proxy materials: No later than the close of business (6:00 p.m. Pacific Time) on
February 23, 2024. All proposals must comply with Rule 14a-8 under the Exchange Act.
Other proposals to be brought at our 2024 annual meeting: No earlier than April 12, 2024 and no later than the close of
business (6:00 p.m. Pacific Time) on May 10, 2024. The submission must include certain information concerning the stockholder and
the proposal, as specified in the Company’s Amended and Restated Bylaws.
19. What is the deadline to nominate individuals for election as directors at the 2024 annual meeting of stockholders?
Director nominations for inclusion in our proxy materials (proxy access nominees): No earlier than March 13, 2024 and
no later than the close of business (6:00 p.m. Pacific Time) on April 12, 2024. The nomination must include certain information
concerning the stockholder or stockholder group and the nominee, as specified in Section 1.6 of the Company’s Amended and
Restated Bylaws.
Director brought pursuant to our advance notice bylaws: No earlier than April 12, 2024 and no later than the close of business
(6:00 p.m.) on May 10, 2024. The nomination must include certain information concerning the stockholder and the nominee, as
specified in Section 1.5 of the Company’s Amended and Restated Bylaws. In addition, shareholders who intend to solicit proxies in
support of director nominees other than the Company’s nominees must comply with the additional requirements of Rule 14a-19(b).
20. Where should I send proposals and director nominations for the 2024 annual meeting of stockholders?
Stockholder proposals and director nominations should be sent in writing to Jacob Schatz, Corporate Secretary at Electronic Arts
Inc., 209 Redwood Shores Parkway, Redwood City, CA 94065.
21. How can I obtain a copy of the Company’s Amended and restated Bylaws?
Our Amended and Restated Bylaws as of the date of this Proxy Statement are included as an exhibit to a Current Report on Form 8-K we
filed with the SEC on August 15, 2022, which you may access through the SEC’s electronic data system called EDGAR at www.sec.gov. You
may also request a copy of our Amended and Restated Bylaws by contacting our Corporate Secretary at the address above.
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OTHer INfOrMATION
22. How can I listen to the live audio webcast of the Annual Meeting?
You can listen to the live audio webcast of the Annual Meeting by going to the Investor Relations section of our website at
http://ir.ea.com. An archived copy of the webcast will also be available on our website for one year following the Annual Meeting.
Please note that participation in the question and answer portion of the Annual Meeting will be limited to those stockholders attending.
23. Where do I find the voting results of the meeting?
We may announce preliminary voting results at the Annual Meeting. We will also publish the final results on Form 8-K, which we will file
with the SEC within four business days after the Annual Meeting. Once filed, you can request a copy of the Form 8-K by contacting
our Investor Relations department at (650) 628-0406. You can also get a copy on the Internet at http://ir.ea.com or through the SEC’s
electronic data system called EDGAR at www.sec.gov.
24. Who will pay for this proxy solicitation?
We will bear the costs of soliciting proxies from our stockholders. These costs include preparing, assembling, printing, mailing and
distributing the notices, proxy statements, proxy cards and annual reports. In addition, some of our officers, directors, employees
and other agents may also solicit proxies personally, by telephone and by electronic and regular mail, and we will pay these costs. EA
will also reimburse brokerage houses and other custodians for their reasonable out-of-pocket expenses for forwarding proxy and
solicitation materials to the beneficial owners of the Company’s common stock.
25. How is the Company’s fiscal year calculated?
The Company’s fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations
for fiscal year 2023 contained 52 weeks and ended on April 1, 2023. For simplicity of disclosure, fiscal year periods are referred to as
ending on a calendar month end, even if the technical end of a fiscal year period was not the last day of a calendar month.
26. Who can I call with any questions about my shares?
If you hold shares in street name, you may contact your broker. If you are a stockholder of record, you may call our transfer agent,
Computershare, at (800) 736-3001 or (781) 575-3100 for international callers or visit their website at www.computershare.com/investor.
Other Business
The Board of Directors does not know of any other matter that will be presented for consideration at the Annual Meeting except as
specified in the notice of the Annual Meeting. If any other matter does properly come before the Annual Meeting, or at any adjournment
or postponement of the Annual Meeting, it is intended that the proxies will be voted in respect thereof in accordance with the judgment
of the persons voting the proxies.
75
2023 PROXY STATEMENT Appendix A:
Supplemental Information for CD&A
The “Compensation Discussion and Analysis” above contains certain non-GAAP financial measures, which are used internally by our
management and Board of Directors in our compensation programs. The table below reconciles these non-GAAP financial measures to
the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (“GAAP”).
Calculation of Non-GAAP Financial Measures for FY23 Results
Fiscal
Year Ended
March 31,
2023
$ 7,426
(85)
$ 7,341
$ 5,634
120
(85)
7
$ 5,676
$ 4,302
(158)
(541)
(155)
$3,448
$ 802
278
(85)
548
102
155
$1,800
$ 2.88
$ 6.47
278
278
(In Millions, Except Earnings Per Share)
GAAP net revenue
Change in deferred net revenue (online-enabled games)
Non-GAAP net revenue
GAAP gross profit
Acquisition-related expenses
Change in deferred net revenue (online-enabled games)
Stock-based compensation
Non-GAAP gross profit
GAAP operating expenses
Acquisition-related expenses
Stock-based compensation
Restructuring and related charges
Non-GAAP operating expenses
GAAP net income
Acquisition-related expenses
Change in deferred net revenue (online-enabled games)
Stock-based compensation
Income tax rate adjustments
Restructuring and related charges
Non-GAAP net income
GAAP diluted earnings per share
Non-GAAP diluted earnings per share
GAAP diluted shares
Non-GAAP diluted shares
76
Calculation of Non-GAAP Financial Measures for Company Bonus Funding and PRSU Attainment
APPeNDIx A: SuPPleMeNTAl INfOrMATION fOr CD&A
(In Millions, Except Earnings Per Share)
GAAP net revenue
Change in deferred net revenue (online-enabled games)
Non-GAAP net revenue
GAAP gross profit
Acquisition-related expenses
Change in deferred net revenue (online-enabled games)
Stock-based compensation
Non-GAAP gross profit
GAAP operating expenses
Acquisition-related expenses
Stock-based compensation
Restructuring and related charges
Non-GAAP operating expenses
Non-GAAP operating income
GAAP net income
Acquisition-related expenses
Change in deferred net revenue (online-enabled games)
Stock-based compensation
Restructuring and related charges
Income tax rate adjustments
Bonus expense, net of tax
Non-GAAP net income
GAAP diluted earnings per share
Non-GAAP diluted earnings per share
GAAP diluted shares
Non-GAAP diluted shares
Fiscal
Year Ended
March 31,
2023
$ 7,426
(85)
$ 7,341
$ 5,634
120
(85)
7
$ 5,676
$4,302
(158)
(541)
(155)
$3,448
$ 2,228
$ 802
278
(85)
548
155
102
180
$ 1,980
$ 2.88
$ 7.12
278
278
About Non-GAAP Financial Measures
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared
in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP
measures with the same names and may differ from non-GAAP financial measures with the same or similar names that are used by other
companies.
We compute non-GAAP financial measures using the same consistent method. We may consider whether other significant items
that arise in the future should be excluded from our non-GAAP financial measures. The Company uses certain non-GAAP financial
measures when establishing performance-based targets. These measures adjust for certain items that may not be indicative of the
Company’s core business, operating results or future outlook. We believe that these non-GAAP financial measures provide meaningful
supplemental information about the Company’s operating results primarily because they exclude amounts that we do not consider part
of ongoing operating results when planning and forecasting for future periods and when assessing the performance of the organization.
When making compensation decisions for our executives, we utilize non-GAAP financial measures to evaluate the Company’s financial
performance and the performance of our management team.
The Company’s target and actual non-GAAP financial measures are calculated with reference to adjustments to GAAP financial measures.
These adjustments exclude the following items, as applicable:
■ Change in deferred net revenue (online-enabled games) and certain acquisition-related impacts
■ Acquisition-related expenses
■ Stock-based compensation
■ Income tax rate adjustments
■ Bonus expense
■ Restructuring and related charges
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2023 PROXY STATEMENT APPeNDIx A: SuPPleMeNTAl INfOrMATION fOr CD&A
We believe it is appropriate to exclude these items for the following reasons:
Change in Deferred Net Revenue (Online-enabled Games) and
Certain Acquisition-Related Impacts
The majority of our games, and related extra-content and services have online connectivity whereby a consumer may be able to download
updates on a when-and-if-available basis (“future update rights”) for use with the offline core game content (“software license”). In
addition, we may also offer a hosted connection for online playability (“online hosting”), that permits consumers to play against each other
without a separate fee. Because the majority of our sales of our online-enabled games include future update rights and/or online hosting
performance obligations, GAAP requires us to allocate a portion or all of the transaction price to these performance obligations which
are recognized ratably over an estimated offering period. Our deferred net revenue balance is increased by the revenue being deferred
for current sales and is reduced by the recognition of revenue from prior sales (this is referred to as the “change in the deferred revenue”
balance). Our management excludes the impact of the net change in deferred net revenue related to online-enabled games in its
non-GAAP financial measures for the reasons stated above and also to facilitate an understanding of our operations because all related
costs of revenue are expensed as.
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, post-closing adjustments associated with changes in the estimated amount of contingent
consideration to be paid in an acquisition, and the impairment of accounting goodwill created as a result of an acquisition and/or
acquired intangible assets when future events indicate there has been a decline in its value. Offsetting these expenses are certain
cost exclusions related to impacts from current year acquisitions activity. When analyzing the operating performance of an acquired
entity, our management focuses on the total return provided by the investment (i.e., operating profit generated from the acquired
entity as compared to the purchase price paid including the final amounts paid for contingent consideration, if any) without taking into
consideration any allocations made for accounting purposes. When analyzing the operating performance of an acquisition in subsequent
periods, our management excludes the GAAP impact of any adjustments to the fair value of these acquisition-related balances to its
financial results.
Stock-Based Compensation
When evaluating the performance of its individual business units, the Company does not consider stock-based compensation charges.
Likewise, the Company’s management teams exclude stock-based compensation expense from their short and long-term operating
plans. In contrast, the Company’s management teams are held accountable for cash-based compensation and such amounts are included
in their operating plans. Further, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder
dilution rather than the accounting charges associated with such grants.
Income Tax Rate Adjustments
The Company uses a fixed, long-term projected tax rate internally to evaluate its operating performance, to forecast, plan and analyze
future periods, and to assess the performance of its management team. Accordingly, the Company applies the same tax rate to its
non-GAAP financial results and generally does not include one-time tax benefits. During fiscal year 2023, the Company applied a tax
rate of 19% to determine the non-GAAP income tax expense.
Bonus Expense
The Company determines the funding for its bonus pool under the EA Bonus Plan based in part on financial performance, which includes a
non-GAAP diluted earnings per share component. The Company excludes bonus expense under the EA Bonus Plan when establishing the
non-GAAP diluted earnings per share target, and measuring performance against that target because its effect on non-GAAP earnings
per share is not indicative of the Company’s financial performance.
Restructuring and Related Charges
Restructuring and related charges are primarily incurred as the Company aligns its structure with growth opportunities. These costs may
include employee-related costs such as severance, asset impairment charges, office space reduction and exit costs including additional
depreciation and amortization when the expected useful life of certain assets have been shortened due to changes in anticipated usage,
and other charges, including contract cancellations. The company excludes these costs as management believes they do not have a
direct correlation to our ongoing or future business operations.
78
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2023
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
OR
For the transition period from to
Commission File No. 000-17948
ELECTRONIC ARTS INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
209 Redwood Shores Parkway
Redwood City California
(Address of principal executive offices)
94-2838567
(I.R.S. Employer
Identification No.)
94065
(Zip Code)
Registrant’s telephone number, including area code:
(650) 628-1500
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common Stock, $0.01 par value
Trading Symbol
EA
Name of Each Exchange on Which Registered
Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
þ Accelerated filer
¨ Non-accelerated filer ¨ Smaller reporting company
Large Accelerated Filer
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
The aggregate market value of the registrant’s common stock, $0.01 par value, held by non-affiliates of the registrant as of September 30, 2022,
the last business day of our second fiscal quarter, was $32,154 million.
¨
As of May 22, 2023, there were 272,712,152 shares of the registrant’s common stock, $0.01 par value, outstanding.
Portions of the registrant’s definitive proxy statement for its 2023 Annual Meeting of Stockholders (the “2023 Proxy”) are incorporated by
reference into Part III hereof. The 2023 Proxy is expected to be filed not later than 120 days after the registrant’s fiscal year end. Except with
respect to information specifically incorporated by reference into this Form 10-K, the 2023 Proxy is not deemed to be filed as part hereof.
Documents Incorporated by Reference
Page
3
8
18
18
18
18
19
20
21
34
36
84
84
85
86
86
86
86
86
86
87
90
ELECTRONIC ARTS INC.
2023 FORM 10-K ANNUAL REPORT
Table of Contents
Item 1 Business
Item 1A Risk Factors
Item 1B Unresolved Staff Comments
Item 2
Item 3
Item 4 Mine Safety Disclosures
Properties
Legal Proceedings
PART I
PART II
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
[Reserved]
Item 6
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A Quantitative and Qualitative Disclosures About Market Risk
Item 8
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A Controls and Procedures
Item 9B Other Information
Financial Statements and Supplementary Data
PART III
Item 10 Directors, Executive Officers and Corporate Governance
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13 Certain Relationships and Related Transactions, and Director Independence
Item 14 Principal Accounting Fees and Services
Item 15 Exhibits and Financial Statements
Exhibit Index
Signatures
PART IV
2
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements. We use words such as “anticipate”, “believe”,
“expect”, “intend”, “estimate”, “plan”, “predict”, “seek”, “goal”, “will”, “may”, “likely”, “should”, “could”,
“continue”, “potential” (and the negative of any of these terms), “future” and similar expressions to identify forward-
looking statements. In addition, any statements that refer to projections of our future financial performance, trends in
our business, projections of markets relevant to our business, uncertain events and assumptions and other
characterizations of future events or circumstances are forward-looking statements. Forward-looking statements consist
of, among other things, statements related to our business, operations and financial results, industry prospects, our
future financial performance, and our business plans and objectives, and may include certain assumptions that underlie
the forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect
management’s current expectations. Our actual results could differ materially from those discussed in the forward-
looking statements. Factors that might cause or contribute to such differences include those discussed in Part I, Item 1A
of this Annual Report under the heading “Risk Factors” beginning on Page 8. We assume no obligation to revise or
update any forward-looking statement for any reason, except as required by law.
Item 1:
Business
Overview
PART I
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content
and services that can be experienced on game consoles, PCs, mobile phones and tablets.
What We Offer
At our core is a portfolio of intellectual property from which we create innovative games and experiences that deliver high-
quality entertainment and drive engagement across our network of hundreds of millions of unique active accounts. Our portfolio
includes brands that we either wholly own (such as Apex Legends, Battlefield, and The Sims) or license from others (such as
Madden NFL, Star Wars, and the 300+ licenses within our global football ecosystem). We are focusing on building games and
experiences that grow the global online communities around our key franchises; reaching more players through connecting
interactive storytelling to key intellectual property; and building re-occurring revenue from our annualized sports franchises,
our console, PC and mobile catalog titles, and our live services. We develop and publish games and services across diverse
genres, such as sports, racing, first-person shooter, action, role-playing and simulation. We believe that our portfolio, talent, live
services offerings, use of multiple business models and distribution channels, and network of hundreds of millions of unique
active accounts provide us with strategic advantages.
Revenue from our global football franchise, which is consistently one of the top franchises in the marketplace and includes the
annualized console, PC and mobile games, as well as FIFA Ultimate Team, is material to our business and will continue to be
so. Starting in fiscal year 2024, our global football franchise will transition to a new EA SPORTS FC brand. Our vision for the
future of interactive football with EA SPORTS FC is to create the largest football club in the world, and we believe this is the
right opportunity for us so that we can continue delivering innovation and growing to connect more fans on a global scale.
Live services net revenue, particularly extra content net revenue, has been material to our business, and we expect it to continue
to be so. Through our live services offerings, we offer our players high-quality experiences designed to provide value to players
and extend and enhance gameplay. These live services include extra content, subscription offerings and other revenue generated
outside of the sale of our base games. Our digital live services and other net revenue represented 74 percent of our total net
revenue during fiscal year 2023. Our most popular live services are the extra content purchased for the Ultimate Team mode
associated with our sports franchises and extra content purchased for our Apex Legends franchise. Ultimate Team allows players
to collect current and former professional players in order to build and compete as a personalized team. Live services net
revenue generated from extra content purchased within Ultimate Team, a substantial portion of which was derived from FIFA
Ultimate Team, and for our Apex Legends franchise, is material to our business.
We believe that we can add value to our network by making it easier for players to connect by offering choices of business
model, distribution channel and device. Our games and services can be experienced on consoles, PCs, mobile phones, tablets,
and reach our players through both digital distribution channels and retail channels. Players can access our games and services
through traditional single-game purchase or through subscription offerings; and certain of our games and services are available
through a “free-to-play” model whereby players download the game for free and engage with services provided on an ongoing
basis. For example, we develop products and services within our global football franchise that allow players to engage through
3
multiple business models, distribution channels and devices, including: (1) our annualized console and PC games and
associated services, which can be purchased through both digital distribution and retail channels and also is available through
subscription services; (2) a mobile free-to-play offering; and (3) a PC free-to-play game available in certain countries.
Digitally, our console games and live services can be purchased through third-party storefronts, such as the digital stores of our
console partners. Our direct sales to Sony and Microsoft represented approximately 32 percent and 16 percent of total net
revenue, respectively, in fiscal year 2023. Our mobile and tablet games and services are available through third-party
application storefronts such as the Apple App Store and Google Play. Our PC games and services can be downloaded directly
through the EA app, EA’s digital storefront, as well as through third-party online download stores, such as Steam. We also
partner with third parties to publish our mobile and PC games and services in certain Asian territories, such as our partnerships
with Tencent Holdings Limited for FIFA Online in China and Nexon Co. Ltd. for FIFA Online in Korea. From time to time,
third parties will publish games and services under a license to certain of our intellectual property assets.
We also offer our EA Play subscription service on consoles and PC. EA Play allows players access to a selection of our console
and PC games and services for a monthly or annual fee. Our packaged goods games are sold directly to mass market retailers,
specialty stores and through distribution arrangements. New distribution methods and business models are expected to continue
to emerge in the future, and we intend to evaluate these opportunities on a case-by-case basis.
We believe that the future of entertainment is interactive and that the consumption of entertainment and sports is deeply social.
We are investing towards a future of accelerated content generation and increased player engagement - with players across our
network using games to stay connected to friends, and to express themselves. While we continue to anchor our business on
delivering amazing content and services to more players, our goal is to build from our core and invest in new areas of
opportunity.
Significant Relationships
Sony & Microsoft. Under the terms of publishing agreements we have entered into with Sony Interactive Entertainment LLC
and its affiliates and with Microsoft Corporation and its affiliates, we are authorized to develop, market, publish, and distribute
disc-based products and services, and we authorize Sony and Microsoft to distribute our digital products and services,
compatible with PlayStation and Xbox consoles, respectively. Under these agreements with Sony and Microsoft, we have the
non-exclusive right to use, for a fixed term and in a designated territory, technology that is owned or licensed by them to
publish our games on their respective consoles. With respect to our digitally-delivered products and services, the console
manufacturers pay us either a wholesale price or a royalty percentage on the revenue they derive from their sales of our
products and services. Our transactions for packaged goods products are made pursuant to individual purchase orders, which
are accepted on a case-by-case basis by Sony or Microsoft (or their designated replicators), as the case may be. For packaged
goods products, we pay the console manufacturers a per-unit royalty for each unit manufactured. Many key commercial terms
of our relationships with Sony and Microsoft — such as manufacturing terms, delivery times, policies and approval conditions
— are determined unilaterally, and are subject to change by the console manufacturers.
The publishing agreements also require us to indemnify the console manufacturers for any loss, liability and expense resulting
from any claim against the console manufacturer regarding our games and services, including any claims for patent, copyright
or trademark infringement brought against the console manufacturer. Each agreement may be terminated by the console
manufacturer if a breach or default by us is not cured after we receive written notice from the console manufacturer, or if we
become insolvent. The console manufacturers are not obligated to enter into license agreements with us for any future consoles,
products or services.
Apple, Google and Other App Stores. We have agreements to distribute our mobile applications and additional content through
distributors such as Apple and Google. Our applications are downloaded for mobile devices from third party application
storefronts. The distributor collects payment from consumers for content purchased within the application or charges consumers
a one-time fee to download the application. Our distribution agreements establish the amounts that are retained by the
distributor and the amounts passed through to us. These arrangements are typically terminable on short notice. The agreements
generally do not obligate the distributors to market or distribute any of our applications. Application storefront policies are
determined unilaterally by the distributors and are subject to change.
Publishing Partners in Asia. We have entered into agreements whereby we partner with certain companies, including Tencent
Holdings Limited, Nexon Co., Ltd and Garena Online Private Limited. or their respective affiliates, pursuant to which these
companies publish our mobile and PC free-to-play games in certain countries, including China, Korea and certain countries in
Southeast Asia. Our players access games from the publishers’ online storefronts and are charged for additional content
4
purchased within our game environment. The agreements generally establish the amounts that are retained by the publisher, and
the amounts passed through to us.
Competition
The market for interactive entertainment is intensely competitive and changes rapidly as new products, business models and
distribution channels are introduced. We also face competition for the right to use certain intellectual property included in our
products. In order to remain successful, we are required to anticipate, sometimes years in advance, the ways in which our
products and services will compete in the market. We face significant competition from companies that focus on developing
games and services available on consoles, PCs and/or mobile devices. In addition, the convergence of the gaming, technology/
internet, social networking and entertainment industries in recent years has brought us into more direct competition with larger,
well-funded technology companies. These companies have strengthened their interactive entertainment capabilities, and we
expect them to continue to do so. Their greater financial and other resources may provide larger budgets to develop and market
tools, technologies, products and services that gain consumer success and shift player time and engagement away from our
products and services. We also continue to expect new entrants to emerge.
More broadly, we compete against providers of different sources of entertainment, such as movies, television, online casual
entertainment and music that our players could enjoy in their free time. Important competitive factors in our industry include
the ability to attract creative and technical talent, game quality and ease of use, innovation, compatibility of products with
certain consoles and other distribution channels, brand recognition, reputation, reliability, security, creativity, price, marketing,
and quality of customer service.
In the past several years, our industry has undergone a period of increased consolidation which increases competitive pressure
on us as interactive entertainment companies grow through acquisition or as larger, well-funded technology companies
strengthen their interactive entertainment capabilities.
Risks related to competitive factors affecting our business are described in Part I, Item 1A, Risk Factors.
Research and Development
Because the industries in which we compete are characterized by rapid technological advances, our ability to compete
successfully is linked to our ability to deliver a flow of competitive products, services and technologies to the marketplace. We
have teams focused on developing new technologies, such as self-learning artificial intelligence for our games, to enhance
existing products and services and to expand the range of our offerings.
Intellectual Property and Technology
To establish and protect our intellectual property, we rely on a combination of copyrights, trademarks, patents, patent
applications, trade secrets, know-how, license agreements, confidentiality provisions and procedures and other contractual
provisions. We actively engage in enforcement and other activities to protect our intellectual property, but the laws of some
countries in which we operate, particularly in Asia, either do not protect our intellectual property to the same extent as the laws
of the United States or are poorly enforced. As our digital business has grown, our games and services increasingly depend on
the reliability, availability and security of our technological infrastructure. Our industry is prone to, and our systems and
networks are subject to actions by malfeasant actors, such as cyber-attacks and other information security incidents, including
ransomware attacks. While we devote financial and operational resources to implement systems, processes and technologies to
guard against cyber events and to help protect our intellectual property, employee and consumer data and information
technology systems against intrusions or other security breaches, we have experienced such events in the past and expect future
events to occur. In addition, we engage in activities designed to limit the impact of abuse of our digital products and services,
including monitoring our games for evidence of exploitation and re-balancing our game environments in the event that such
abuse is discovered.
Governmental Regulation
We are a global company subject to various and complex laws and regulations domestically and internationally, including laws
and regulations related to gaming, user privacy, data collection and retention, consumer protection, protection of minors, online
safety, content, advertising, localization, information security, intellectual property, competition, sanctions, addressing climate
change, taxation, and employment, among others. Many of these laws and regulations are continuously evolving and
developing, and the application to, and impact on, us is uncertain. Certain of our business models are subject to new laws or
regulations or evolving interpretations and application of existing laws and regulations. The growth and development of
5
electronic commerce, virtual items and virtual currency has prompted calls for new laws and regulations and resulted in the
application of existing laws or regulations that have limited or restricted the sale of our products and services in certain
territories.
Seasonality
We have historically experienced the highest percentage of our net bookings in our third fiscal quarter due to seasonal holiday
demand and the launch timing of our games. While we expect this trend to continue in fiscal year 2024, there is no assurance
that it will.
Human Capital
Our ability to attract and retain qualified employees is a critical factor in the successful development of our products and
services. As of March 31, 2023, we employed approximately 13,400 people globally, with 65 percent located internationally.
Our Board and its committees oversee our human capital management programs, practices and strategies and additional
information on how they oversee these matters can be found in our annual Proxy Statement. We’re committed to (1) integrating
diversity, equity and inclusion in our people practices to drive results, (2) a safe, healthy and supportive culture that prioritizes
engagement, listening and action, and (3) inclusive talent practices to support the development of our people and the growth of
our business.
Our most recently published Company-wide gender and racial/ethnic representation, as well as our EEO-1 report (U.S.
government reporting), are available on our website. Our commitments to diversity, equity and inclusion extend to
compensating our employees fairly based on the work that they perform. We consider our pay equity philosophy at each stage
at which compensation decisions are made, including when hiring and promoting employees and through our annual review
cycle. In addition, we annually partner with an independent outside firm to review employees’ pay and promote fairness in our
compensation philosophy and practices.
We are committed to the development and growth of the next generation of diverse talent through community outreach and
STEAM (Science, Technology, Engineering, Arts and Mathematics) education. Substantially all of our hiring includes diverse
candidates in the initial pool, and we go further by setting aspirational targets for the inclusion of candidates from
underrepresented communities at later stages of the recruiting process that we believe can lead to better outcomes. We
consistently hire underrepresented talent above our current representation rates.
We aim to create a work environment and culture in which our people can do their best work. We aim to build a reciprocal
relationship in which we engage, listen, respond, and work together to create a culture that supports our people and delivers on
our business goals. All regular, full-time employees are asked to complete an Engagement Survey twice per year. 77 percent of
employees participated in our most recent Engagement Survey, conducted in December 2022. We also conduct regular manager
surveys. Results of all employee surveys are evaluated and inform opportunities for further improvement in our people
practices.
We invest in developing and retaining employees through access to professional growth resources, skills learning, and other
job-specific and general training. We also build technical onboarding and job-specific programs to help our employees
onboard to technical roles and grow in their specific domains. We maintain resources, programs and services to support
employees' physical, mental, familial and financial health. We offer a wide range of benefits, such as comprehensive health
insurance and time-off and leave programs, including specialized programs around key life events.
We also design ways to collaborate across work models, whether working virtually, on-site, or using a hybrid approach. We
empower leadership to determine the most appropriate workplace strategy for their teams, intended to facilitate productivity and
engagement and deliver on business priorities.
Investor Information
Our website address is www.ea.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on
Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act, as
amended, are available free of charge on the Investor Relations section of our website at http://ir.ea.com as soon as reasonably
practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). The SEC
maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding
6
issuers that file electronically with the SEC. We announce material financial information and business updates through our SEC
filings, press releases, public conference calls and webcasts, the Investor Relations section of our website at http://ir.ea.com, our
blog at https://www.ea.com/news and through our Twitter account @EA. Except as expressly set forth in this Form 10-K
annual report, the contents of our website, 2022 Impact Report and/or social media accounts are not incorporated into, or
otherwise to be regarded as part of this Form 10-K.
Company Information
We were incorporated originally in California in 1982. In September 1991, we were reincorporated under the laws of Delaware.
Our principal executive offices are located at 209 Redwood Shores Parkway, Redwood City, California 94065 and our
telephone number is (650) 628-1500.
Information About Our Executive Officers
The following table sets forth information regarding our executive officers as of May 24, 2023:
Name
Andrew Wilson
Christopher Suh
Laura Miele
Mala Singh
Jacob Schatz
Eric Kelly
Age
48
52
53
52
54
51
Position
Chief Executive Officer, Chair of the Board
Chief Financial Officer
Chief Operating Officer
Chief People Officer
Chief Legal Officer & Corporate Secretary
Senior Vice President, Chief Accounting Officer
Mr. Wilson has served as EA’s Chief Executive Officer and as a director of EA since September 2013 and was appointed Chair
of the Board of Directors in August 2021. Prior to his appointment as our Chief Executive Officer, Mr. Wilson held several
positions within the Company since joining EA in May 2000, including Executive Vice President, EA SPORTS from August
2011 to September 2013. Mr. Wilson also serves as chairman of the board of the privately-held World Surf League and is a
member of the Board of Trustees of the Paley Center for Media. Mr. Wilson has served on the board of directors of Intel
Corporation within the last five years.
Mr. Suh has served as EA's Chief Financial Officer since March 2022. Prior to joining EA, Mr. Suh had a 25-year career at
Microsoft Corporation, a technology company, serving most recently as Corporate Vice President and Chief Financial Officer
of its Cloud & AI division from January 2018 to February 2022 and as General Manager, Investor Relations from January 2013
to January 2018. Mr. Suh received both his MBA and undergraduate degrees from the University of Washington. Mr. Suh also
serves on the Board of Directors of Cardlytics, Inc.
Ms. Miele has served as EA's Chief Operating Officer since October 2021. Ms. Miele joined the Company in March 1996 and
has held several positions at the Company, including Chief Studios Officer from April 2018 to October 2021, Executive Vice
President, Global Publishing from April 2016 to April 2018, and several senior roles in the Company's marketing organization.
Ms. Singh has served as EA's Chief People Officer since October 2016. Ms. Singh was previously employed by EA from 2009
to 2013, serving as Vice President, Human Resources, EA Labels from 2011 to 2013. Prior to rejoining EA, Ms. Singh served
as the Chief People Officer of Minted, LLC from January 2014 to October 2016. Ms. Singh earned both her undergraduate and
graduate degrees from Rutgers University - New Brunswick. Ms. Singh also serves on the Board of Directors of Sovos Brands.
Mr. Schatz, EA’s Chief Legal Officer, has led EA's legal function and served as Corporate Secretary since June 2014. Mr.
Schatz joined EA in 1999, holding several roles within EA's legal department until his appointment as General Counsel in 2014.
Mr. Schatz earned his J.D. from Georgetown University Law Center, and received his undergraduate degree from Pomona
College. Mr. Schatz is a member of the Bar of the State of California and is admitted to practice in the United States Supreme
Court, the Ninth Circuit Court of Appeals and several United States District Courts.
Mr. Kelly has served as EA's Chief Accounting Officer since August 2021. Since joining EA in 2003, Mr. Kelly has held
several positions within EA's finance organization, including Vice President and Worldwide Controller from January 2014 to
August 2021 and finance leadership roles such as CFO of Asia and European Financial Controller. Mr. Kelly holds a B.S. in
Accounting from Villanova University and is a licensed Certified Public Accountant.
7
Item 1A: Risk Factors
Our business is subject to many risks and uncertainties, which may affect our future financial performance. In the past, we have
experienced certain of the events and circumstances described below, which adversely impacted our business and financial
performance. If any of the events or circumstances described below occur, our business or financial performance could be
harmed, our actual results could differ materially from our expectations and the market value of our stock could decline. The
risks and uncertainties discussed below are not the only ones we face. There may be additional risks and uncertainties not
currently known to us or that we currently do not believe could be material that may harm our business or financial
performance.
STRATEGIC RISKS
Our business is intensely competitive. We may not deliver successful and engaging products and services, or consumers
may prefer our competitors’ products or services over our own.
Competition in our business is intense. Many new products and services are regularly introduced, but only a relatively small
number of products and associated services drive significant engagement and account for a significant portion of total revenue.
Our competitors range from established interactive entertainment companies to emerging start-ups. In addition, the gaming,
technology/internet, and entertainment industries have converged in recent years and larger, well-funded technology companies
have strengthened their interactive entertainment capabilities resulting in more direct competition with us. We expect them to
continue to pursue and strengthen these businesses. Their greater financial and other resources may provide larger budgets to
recruit our key creative and technical talent, develop and market products and services that gain consumer success and shift
player time and engagement away from our products and services, or otherwise disrupt our operations. We also expect new
competitors to continue to emerge throughout the world. If our competitors develop more successful and engaging products or
services, offer competitive products or services at lower price points, or if we do not continue to develop consistently high-
quality, well-received and engaging products and services, or if our marketing strategies are not innovative or fail to resonate
with players, particularly during key selling periods, our revenue, margins, and profitability will decline.
We strive to create innovative and high-quality products and services that allow us to grow the global online communities
around our key franchises and reach more players. However, innovative and high-quality titles, even if highly-reviewed, may
not meet our expectations or the expectations of our players. Many financially successful products and services within our
industry are iterations of prior titles with large established consumer bases and significant brand recognition, which makes
competing in certain categories challenging. In addition, products or services of our direct competitors or other entertainment
companies may take a larger portion of consumer spending or time than we anticipate, which could cause our products and
services to underperform relative to our expectations. A significant portion of our revenue historically has been derived from
products and services based on a few popular franchises, and the underperformance of a single major title has had, and could in
the future have, a material adverse impact on our financial results. For example, we have historically derived a significant
portion of our net revenue from sales related to our global football franchise, annualized versions of which are consistently one
of the best-selling games in the marketplace. Any events or circumstances that negatively impact our global football franchise,
including Ultimate Team, such as product or service quality, our transition to a new EA SPORTS FC brand, other products that
take a portion of consumer spending and time, the delay or cancellation of a product or service launch, increased competition
for key licenses, or real or perceived security risks, could negatively impact our financial results to a disproportionate extent.
We may not meet our product and live service development schedules.
Our ability to meet product and live service development schedules is affected by a number of factors both within and outside
our control, including feedback from our players, the creative processes involved, the coordination of large and sometimes
geographically dispersed development teams, evolving work models, the complexity of our products and the platforms for
which they are developed, the need to fine-tune our products prior to their release, and, in certain cases, approvals from third
parties. We have experienced development delays for our products and services in the past which caused us to delay or cancel
release dates. Any failure to meet anticipated production or release schedules likely would result in a delay of revenue and/or
possibly a significant shortfall in our revenue, increase our development and/or marketing expenses, harm our profitability, and
cause our operating results to be materially different than anticipated. If we miss key selling periods for products or services,
including product delays or product cancellations our sales likely will suffer significantly.
Our industry changes rapidly and we may fail to anticipate or successfully implement new or evolving technologies, or
adopt successful business strategies, distribution methods or services.
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Rapid changes in our industry require us to anticipate, sometimes years in advance, the ways in which our business can remain
competitive in the market. We have invested, and in the future may invest, in new business and marketing strategies, tools and
technologies, distribution methods, products, and services. There can be no assurance that these strategic investments will
achieve expected returns. No assurance can be given that the tools and technology we choose to implement, the business and
marketing strategies we choose to adopt and the products, services and platform strategies that we pursue will achieve financial
results that meet or exceed our expectations. We also may miss opportunities or fail to respond quickly enough to industry
change, including the adoption of tools and technology or distribution methods or develop products, services or new ways to
engage with our games that become popular with consumers, which could adversely affect our financial results.
Stakeholders have high expectations for the quality and integrity of our business, culture, products and services and we
may be unsuccessful in meeting these expectations.
Expectations regarding the quality, performance and integrity of our business, brand, reputation, culture, products and services
are high. Players and other stakeholders have sometimes been critical of our industry, brands, products, services, online
communities, business models and/or practices for a wide variety of reasons, including perceptions about gameplay fun,
fairness, game content, features or services, or objections to certain of our practices. These negative responses may not be
foreseeable. We also may not effectively manage our responses because of reasons within or outside of our control. In addition,
we have taken actions, including delaying the release of our games and delaying or discontinuing content, features and services
for our games, after taking into consideration, among other things, feedback from our community or geopolitical events even if
those decisions negatively impacted our operating results in the short term. These actions have had a negative impact on our
financial results and may impact our future development processes. We expect to continue to take actions as appropriate,
including actions that may result in additional expenditures and the loss of revenue.
Certain of our games and features on our platforms support online features that allow players and viewers to communicate with
one another and post content, in real time, that is visible to other players and viewers. From time to time, this “user generated
content” may contain objectionable and offensive content that is distributed and disseminated by third parties and our brands
may be negatively affected by such actions. If we fail to appropriately respond to the dissemination of such content, we may be
subject to lawsuits and governmental regulation, our players may not engage with our products and services and/or may lose
confidence in our brands and our financial results may be adversely affected.
Additionally, our products and services are extremely complex software programs and are difficult to develop and distribute.
We have quality controls in place to detect defects, bugs or other errors in our products and services before they are released.
Nonetheless, these quality controls are subject to human error, overriding, and resource or technical constraints. In addition, the
effectiveness of our quality controls and preventative measures may be negatively affected by the distribution of our workforce
resulting from evolving work models. As such, these quality controls and preventative measures may not be effective in
detecting all defects, bugs or errors in our products and services before they have been released into the marketplace. In such an
event, the technological reliability and stability of our products and services could be below our standards and the standards of
our players and our reputation, brand and sales could be adversely affected. In addition, we could be required to, or may find it
necessary to, offer a refund for the product or service, suspend the availability or sale of the product or service or expend
significant resources to cure the defect, bug or error each of which could significantly harm our business and operating results.
External game developers may not meet product development schedules or otherwise honor their obligations.
We contract with external game developers to develop our games or to publish or distribute their games. While we maintain
contractual protections, we have less control over the product development schedules of games developed by external
developers. We depend on their ability to meet product development schedules which could be negatively affected by, among
other things, distributed workforce models. If we have disputes with external developers or they cannot meet product
development schedules, acquire certain approvals or are otherwise unable or unwilling to honor their obligations to us, we may
delay or cancel previously announced games, alter our launch schedule or experience increased costs and expenses, which could
result in a delay or significant shortfall in anticipated revenue, harm our profitability and reputation, and cause our financial
results to be materially affected.
Our business depends on the success and availability of consoles, platforms and devices developed by third parties and
our ability to develop commercially successful products and services for those consoles, platforms and devices.
The success of our business is driven in part by the commercial success and adequate supply of third-party consoles, platforms
and devices for which we develop our products and services or through which our products and services are distributed. Our
success depends in part on accurately predicting which consoles, platforms and devices will be successful in the marketplace
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and providing engaging and commercially successful games and services for those consoles, platforms and devices. We must
make product development decisions and commit significant resources well in advance of the commercial availability of new
consoles, platforms and devices, and we may incur significant expense to adjust our product portfolio and development efforts
in response to changing consumer preferences. We may enter into certain exclusive licensing arrangements that affect our
ability to deliver or market products or services on certain consoles, platforms or devices. A console, platform or device for
which we are developing products and services may not succeed as expected and we may be unable to fully recover the
investments we have made in developing our products and services; or new consoles, platforms or devices may take market
share away from those for which we have devoted significant resources, causing us to not be able to reach our intended
audience and take advantage of meaningful revenue opportunities.
We may experience declines or fluctuations in the re-occurring portion of our business.
Our business model includes revenue that we deem re-occurring in nature, such as revenue from our live services, annualized
sports franchises (e.g., Madden NFL, global football), and our console, PC and mobile catalog titles (i.e., titles that did not
launch in the current fiscal year). While we have been able to forecast the revenue from these areas of our business with greater
relative confidence than for new games, services and business models, we cannot provide assurances that consumer demand
will remain consistent, including in connection with circumstances outside of our control. Furthermore, we may cease to offer
games and services that we previously had deemed to be re-occurring in nature. Any decline or fluctuation in the re-occurring
portion of our business may have a negative impact on our financial and operating results.
We could fail to successfully adopt new business models.
From time to time we seek to establish and implement new business models. Forecasting the success of any new business
model is inherently uncertain and depends on a number of factors both within and outside of our control. Our actual revenue
and profit for these businesses may be significantly greater or less than our forecasts. In addition, these new business models
could fail, resulting in the loss of our investment in the development and infrastructure needed to support these new business
models, as well as the opportunity cost of diverting management and financial resources away from more successful and
established businesses. While we anticipate growth in this area of our business, consumer demand is difficult to predict. Any
failure to successfully implement new business models could materially impact our financial and operating results.
Acquisitions, investments, divestitures and other strategic transactions could result in operating difficulties and other
negative consequences.
We have made and may continue to make acquisitions or enter into other strategic transactions including (1) acquisitions of
companies, businesses, intellectual properties, and other assets, (2) investments in, or transactions with, strategic partners, and
(3) investments in new businesses as part of our long-term business strategy. These acquisitions and other transactions involve
significant challenges and risks including that the transaction does not advance our business strategy or strategic goals, that we
do not realize a satisfactory return on our investment or cannot realize anticipated tax benefits, that we acquire liabilities and/or
litigation from acquired companies or liabilities and/or litigation results from the transactions, that our due diligence process
does not identify significant issues, liabilities or other challenges, diversion of management’s attention from our other
businesses, and the incurrence of debt, contingent liabilities or amortization expenses, write-offs of goodwill, intangibles, or
acquired in-process technology, or other increased cash and non-cash expenses. In addition, we may not integrate these
businesses successfully or achieve expected synergies.
We may fund strategic transactions with (1) cash, which would reduce cash available for other corporate purposes, (2) debt,
which would increase our interest expense and leverage and/or (3) equity which would dilute current shareholders’ percentage
ownership and also dilute our earnings per share. We also may divest or sell assets or a business and we may have difficulty
selling such assets or business on acceptable terms in a timely manner. This could result in a delay in the achievement of our
strategic objectives, cause us to incur additional expense, or the sale of such assets or business at a price or on terms that are
less favorable than we anticipated.
We may be unable to maintain or acquire licenses to include intellectual property owned by others in our games, or to
maintain or acquire the rights to publish or distribute games developed by others.
Many of our products and services are based on or incorporate intellectual property owned by others. For example, our EA
Sports products include rights licensed from major sports leagues, teams and players’ associations and our Star Wars products
include rights licensed from Disney. Competition for these licenses and rights is intense. If we are unable to maintain these
licenses and rights or obtain additional licenses or rights with significant commercial value, our ability to develop successful
and engaging products and services may be adversely affected and our revenue, profitability and cash flows may decline
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significantly. Other competitors may assume certain licenses and create competing products, impacting our sales. Competition
for these licenses has increased, and may continue to increase, the amounts that we must pay to licensors and developers,
through higher minimum guarantees or royalty rates, which could significantly increase our costs and reduce our profitability.
Our business partners may not honor their obligations to us or their actions may put us at risk.
We rely on various business partners, including platform partners, third-party service providers, vendors, licensing partners,
development partners and licensees. Their actions may put our business and our reputation and brand at risk. In many cases, our
business partners may be given access to sensitive and proprietary information in order to provide services and support, and
they may misappropriate our information and engage in unauthorized use of it. In addition, the failure of these third parties to
provide adequate services and technologies, or the failure of the third parties to adequately maintain or update their services and
technologies, could result in a disruption to our business operations. Further, disruptions in the financial markets, economic
downturns, poor business decisions, or reputational harm may adversely affect our business partners and they may not be able
to continue honoring their obligations to us or we may cease our arrangements with them. Alternative arrangements and
services may not be available to us on commercially reasonable terms or we may experience business interruptions upon a
transition to an alternative partner or vendor.
OPERATIONAL RISKS
Events such as the COVID-19 pandemic and the various responses to it have previously affected and may in the future
affect how we are operating our business.
We are subject to unforeseen events such as the COVID-19 pandemic, which has significantly impacted, and may in the future
impact, our business and results of operations. The COVID-19 pandemic and the various responses to it have affected how we
and our partners are operating our businesses. As we have re-opened our offices, employees are offered more flexibility in the
amount of time they work in an office. Further, the increased availability of hybrid or remote working arrangements has
expanded the pool of companies that can compete for our employees and employment candidates. The long-term effects of the
COVID-19 pandemic on the future of work may present operational challenges and impact our ability to attract and retain
talent, and our teams’ ability to collaborate creatively, each of which may adversely affect our business.
Certain of our development teams have worked for an extended period in a distributed environment, whereas these teams
historically collaborated in-person on the creative and technical process required to develop high-quality products and services
at scale. This has disrupted, and may continue to disrupt, the productivity of our workforce and the creative process to which
our teams are accustomed. Companies in our industry have experienced issues related to game and service quality associated
with the period during which employees primarily worked-from-home, and we have changed the launch date of key products in
part because of challenges associated with a distributed development environment. The longer-term impact to our creative and
technical development processes associated with more distributed work models is unknown and the associated risks, including
with respect to game quality and developmental delays, which may cause us to delay or cancel additional release dates, may be
heightened. If we are not able to respond to and manage the impact of these and other currently unknown impacts related to
events such as the COVID-19 pandemic, our business will be harmed.
Catastrophic events may disrupt our business.
Natural disasters, cyber-incidents, weather events, wildfires, power disruptions, telecommunications failures, pandemics, health
crises and other public health events, failed upgrades of existing systems or migrations to new systems, acts of terrorism or
other events could cause outages, disruptions and/or degradations of our infrastructure (including our or our partners’
information technology and network systems), a failure in our ability to conduct normal business operations, or the closure of
public spaces in which players engage with our games and services all of which could materially impact our reputation and
brand, financial condition and operating result. The health and safety of our employees, players, third-party organizations with
whom we partner, or regulatory agencies on which we rely could be also affected, any of which may prevent us from executing
against our business strategies and/or cause a decrease in consumer demand for our products and services. We recognize the
inherent physical risks associated with climate change. Our business relies on the reliable transmission of energy worldwide and
is susceptible to weather-related events that could stress the power grid. Natural disasters and weather events, such as wildfires
and hurricanes, are increasing in size and scope and certain of our office locations are located in areas that are vulnerable to
these effects. System redundancy may be ineffective, and our disaster recovery and business continuity planning may not be
sufficient for all eventualities. In addition, our corporate headquarters and several of our key studios also are located in
seismically active regions. These catastrophic events could disrupt our business and operations, and/or the businesses and
operations of our partners and may cause us to incur additional costs to maintain or resume operations.
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We have and may continue to experience security breaches and cyber threats.
The integrity of our and our partners’ information technology networks and systems is critical to our ongoing operations,
products, and services. Our industry is prone to, and our systems and networks are subject to actions by malfeasant actors,
which may include individuals or groups, including state-sponsored attackers. These actions include cyber-attacks, including
ransomware, and other information security incidents that seek to exploit, disable, damage, and/or disrupt our networks,
business operations, products and services and supporting technological infrastructure, or gain access to consumer and
employee personal information, our intellectual property and other assets. In addition, our systems and networks could be
harmed or improperly accessed due to error by employees or third parties that are authorized to access these networks and
systems. We also rely on technological infrastructure provided by third-party business partners to support the online
functionality of our products and services, who are also subject to these same cyber risks. Both our partners and we have
expended, and expect to continue to expend, financial and operational resources to guard against cyber risks and to help protect
our data and systems. However, the techniques used by malfeasant actors change frequently, continue to evolve in
sophistication and volume, and often are not detected for long periods of time.
Remote access to our networks and systems, and the networks and systems of our partners, has increased substantially. While
we and our partners have taken steps to secure our networks and systems, these networks and systems may be more vulnerable
to a successful cyber-attack or information security incident in a hybrid working model. The costs to respond to, mitigate, and/
or notify affected parties of cyber-attacks and other security vulnerabilities are significant. It may also be necessary for us to
take additional extraordinary measures and make additional expenditures to take appropriate responsive and preventative steps.
Consequences of such events, responsive measures and preventative measures have included, and could in the future include,
the loss of proprietary and personal data and interruptions or delays in our business operations, exploitation of our data, as well
as loss of player confidence and damage to our brand and reputation, financial expenses and financial loss. In addition, such
events could cause us to be non-compliant with applicable regulations, and subject us to legal claims or penalties under laws
protecting the privacy or security of personal information or proprietary material information. We have experienced such events
in the past and expect future events to occur.
In addition, the virtual economies that we have established in many of our games are subject to abuse, exploitation and other
forms of fraudulent activity that can negatively impact our business. Virtual economies involve the use of virtual currency and/
or virtual assets that can be used or redeemed by a player within a particular game or service. The abuse or exploitation of our
virtual economies have included the illegitimate or unauthorized generation and sale of virtual items, including in black
markets. Our online services have been impacted by in-game exploits and the use of automated or other fraudulent processes
designed to generate virtual items or currency illegitimately or to execute account takeover attacks against our players. We
anticipate such activity to continue. These abuses and exploits, and the steps that we take to address these abuses and exploits
may result in a loss of anticipated revenue, increased costs to protect against or remediate these issues, interfere with players’
enjoyment of a balanced game environment or cause harm to our reputation and brand.
We may experience outages, disruptions or degradations in our services, products and/or technological infrastructure.
The reliable performance of our products and services depends on the continuing operation and availability of our information
technology systems and those of our external service providers, including third-party “cloud” computing services. Our games
and services are complex software products and maintaining the sophisticated internal and external technological infrastructure
required to reliably deliver these games and services is expensive and complicated. The reliable delivery and stability of our
products and services has been, and could in the future be, adversely impacted by outages, disruptions, failures or degradations
in our network and related infrastructure, as well as in the online platforms or services of key business partners that offer,
support or host our products and services. The reliability and stability of our products and services has been affected by events
outside of our control as well as by events within our control, such as the migration of data among data centers and to third-
party hosted environments, the performance of upgrades and maintenance on our systems, and online demand for our products
and services that exceeds the capabilities of our technological infrastructure.
If we or our external business partners were to experience an event that caused a significant system outage, disruption or
degradation or if a transition among data centers or service providers or an upgrade or maintenance session encountered
unexpected interruptions, unforeseen complexity or unplanned disruptions, our products and services may not be available to
consumers or may not be delivered reliably and stably. As a result, our reputation and brand may be harmed, consumer
engagement with our products and services may be reduced, and our revenue and profitability could be negatively impacted.
We do not have redundancy for all our systems, many of our critical applications reside in only one of our data centers, and our
disaster recovery planning may not account for all eventualities.
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As our digital business grows, we will require an increasing amount of internal and external technical infrastructure, including
network capacity and computing power to continue to satisfy the needs of our players. We are investing, and expect to continue
to invest, in our own technology, hardware and software and the technology, hardware and software of external service
providers to support our business. It is possible that we may fail to scale effectively and grow this technical infrastructure to
accommodate increased demands, which may adversely affect the reliable and stable performance of our games and services,
therefore negatively impacting engagement, reputation, brand and revenue growth.
Attracting, managing and retaining our talent is critical to our success.
Our business depends on our ability to attract, train, motivate and retain executive, technical, creative, marketing and other
personnel that are essential to the development, marketing and support of our products and services. The market for highly-
skilled workers and leaders in our industry is extremely competitive, particularly in the geographic locations in which many of
our key personnel are located and has recently intensified further due to industry trends. In addition, our leading position within
the interactive entertainment industry makes us a prime target for recruiting our executives, as well as key creative and
technical talent. If we cannot successfully recruit, train, motivate, attract and retain qualified employees, develop and maintain a
healthy culture, or replace key employees following their departure, our reputation, brand and culture may be negatively
impacted and our business will be impaired. Our global workforce is primarily non-unionized, but we have unions and works
councils outside of the United States. In the U.S., there has been an increase in prominence in certain sectors of workers
exercising their right to form or join a union. If significant employee populations were to unionize, we could experience
operational changes that may materially impact our business.
We rely on the consoles, systems and devices of partners who have significant influence over the products and services
that we offer in the marketplace.
A significant percentage of our digital net revenue is attributable to sales of products and services through our significant
partners, including Sony, Microsoft, Apple and Google. The concentration of a material portion of our digital sales in these
partners exposes us to risks associated with these businesses. Any deterioration in the businesses of our significant partners
could disrupt and harm our business, including by limiting the methods through which our digital products and services are
offered and exposing us to collection risks.
In addition, our license agreements typically provide these partners with significant control over the approval and distribution of
the products and services that we develop for their consoles, systems and devices. For products and services delivered via
digital channels, each respective partner has policies and guidelines that control the promotion and distribution of these titles
and the features and functionalities that we are permitted to offer through the channel. Our partners could choose to exclude our
products and services from, or de-emphasize the promotion of our products and services within, some or all of their distribution
channels in order to promote their own products and services or those of our competitors. In addition, we are dependent on
these partners to invest in, and upgrade, the capabilities of their systems in a manner that corresponds to the preferences of
consumers. Failure by these partners to keep pace with consumer preferences could have an adverse impact on the engagement
with our products and services and our ability to merchandise and commercialize our products and services which could harm
our business and/or financial results.
Moreover, certain significant partners can determine and change unilaterally certain key terms and conditions, including the
ability to change their user and developer policies and guidelines. In many cases these partners also set the rates that we must
pay to provide our games and services through their online channels, and retain flexibility to change their fee structures or adopt
different fee structures for their online channels, which could adversely impact our costs, profitability and margins. These
partners also control the information technology systems through which online sales of our products and service channels are
captured. If our partners establish terms that restrict our offerings, significantly impact the financial terms on which these
products or services are offered to our customers, or their information technology systems experience outages that impact our
players’ ability to access our games or purchase extra content or cause an unanticipated delay in reporting, our business and/or
financial results could be materially affected.
A significant portion of our packaged goods sales are made to a relatively small number of retail and distribution
partners, and these sales may be disrupted.
We derive a significant percentage of our net revenue attributable to sales of our packaged goods products to our top retail and
distribution partners. The concentration of a significant percentage of these sales through a few large partners could lead to a
short-term disruption to our business if certain of these partners significantly reduced their purchases or ceased to offer our
products. The financial position of certain partners has deteriorated and while we maintain protections such as monitoring the
credit extended to these partners, we could be vulnerable to collection risk if one or more of these partners experienced
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continued deterioration of their business or declared bankruptcy. Additionally, receivables from these partners generally
increase in our December fiscal quarter as sales of our products generally increase in anticipation of the holiday season which
exposes us to heightened risk at that time of year. Having a significant portion of our packaged goods sales concentrated in a
few partners could reduce our negotiating leverage with them. If one or more of these partners experience deterioration in their
business or become unable to obtain sufficient financing to maintain their operations, our business could be harmed.
LEGAL AND COMPLIANCE RISKS
Our business is subject to complex and prescriptive regulations regarding consumer protection and data privacy
practices, and could be adversely affected if our consumer protection, data privacy and security practices are not
adequate, or perceived as being inadequate.
We are subject to global data privacy, data protection, security and consumer-protection laws and regulations worldwide. These
laws and regulations are emerging and evolving and the interpretation, application and enforcement of these laws and
regulations often are uncertain, contradictory and changing. The failure to maintain data practices that are compliant with
applicable laws and regulations, or evolving interpretations of applicable laws and regulations, could result in inquiries from
enforcement agencies or direct consumer complaints, resulting in civil or criminal penalties, and could adversely impact our
reputation and brand. In addition, the operational costs of compliance with these regulations is high and will likely continue to
increase. Even if we remain in compliance with applicable laws and regulations, consumer sensitivity to the collection and
processing of their personal information continues to increase. Any real or perceived failures in maintaining acceptable data
privacy practices, including allowing improper or unauthorized access, acquisition or misuse and/or uninformed disclosure of
consumer, employee and other information, or a perception that we do not adequately secure this information or provide
consumers with adequate notice about the information that they authorize us to collect and disclose could result in brand,
reputational, or other harms to the business, result in costly remedial measures, deter current and potential customers from using
our products and services and cause our financial results to be materially affected.
Third party vendors and business partners receive access to certain information that we collect. These vendors and business
partners may not prevent data security breaches with respect to the information we provide them or fully enforce our policies,
contractual obligations and disclosures regarding the collection, use, storage, transfer and retention of personal data. A data
security breach of one of our vendors or business partners could cause reputational and financial harm to them and us,
negatively impact our ability to offer our products and services, and could result in legal liability, costly remedial measures,
governmental and regulatory investigations, harm our profitability, reputation and brand, and/or cause our financial results to be
materially affected.
Government regulations applicable to us may negatively impact our business.
We are a global company subject to various and complex laws and regulations domestically and internationally, including laws
and regulations related to consumer protection, protection of minors, online safety, content, advertising, information security,
intellectual property, competition, sanctions, taxation, and employment, among others. Many of these laws and regulations are
continuously evolving and developing, and the application to, and impact on, us is uncertain. Enforcement of these laws could
harm our business by limiting the products and services we can offer consumers or the manner in which we offer them. The
costs of compliance with these laws may increase in the future as a result of changes in applicable laws or changes to
interpretation. Any failure on our part to comply with these laws or the application of these laws in an unanticipated manner
may harm our business and result in penalties or significant legal liability.
Certain of our business models and features within our games and services are subject to new laws or regulations or evolving
interpretations and application of existing laws and regulations. The growth and development of electronic commerce, virtual
items and virtual currency has prompted calls for new laws and regulations and resulted in the application of existing laws or
regulations that have limited or restricted the sale of our products and services in certain territories. Additionally, in our current
phase of innovation, artificial intelligence capabilities are rapidly advancing, and it is possible that we could become subject to
new regulations, or the interpretation of existing regulations, aimed at how we incorporate artificial intelligence into our games
and development processes, that could negatively impact our operation and results. We are also introducing features into our
games and services that allow players to create and share user-generated content. Such content may be objectionable or
offensive and decrease engagement with our products and services, cause a loss of confidence in our brands and expose us to
liability and regulatory oversight, particularly as applicable global laws and regulations are introduced and evolve. New laws
related to these business models and features or the interpretation or application of current laws could subject us to additional
regulation and oversight, cause us to further limit or restrict the sale of our products and services or otherwise impact our
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products and services, lessen the engagement with, and growth of, profitable business models, and expose us to increased
compliance costs, significant liability, fines, penalties and harm to our reputation and brand.
We are subject to laws in certain foreign countries, and adhere to industry standards in the United States, that mandate rating
requirements or set other restrictions on the advertisement, publication or distribution of interactive entertainment software
based on content. In addition, certain foreign countries allow government censorship of interactive entertainment software
products or require pre-approval processes of uncertain length before our games and services can be offered. Adoption and
enforcement of ratings systems, censorship, restrictions on publication or distribution, and changes to approval processes or the
status of any approvals could harm our business by limiting the products we are able to offer to our consumers. In addition,
compliance with new and possibly inconsistent regulations for different territories could be costly, delay or prevent the release
of our products in those territories.
We may be subject to claims of infringement of third-party intellectual property rights.
From time to time, third parties may claim that we have infringed their intellectual property rights. Although we take steps to
avoid knowingly violating the intellectual property rights of others, it is possible that third parties still may claim infringement.
Existing or future infringement claims against us may be expensive to defend and divert the attention of our employees from
business operations. Such claims or litigation could require us to pay damages and other costs. We also could be required to
stop selling, distributing or supporting products, features or services which incorporate the affected intellectual property rights,
redesign products, features or services to avoid infringement, or obtain a license, all of which could be costly and harm our
business.
In addition, many patents have been issued that may apply to potential new modes of delivering, playing or monetizing
products and services such as those that we produce or would like to offer in the future. We may discover that future
opportunities to provide new and innovative modes of game play and game delivery may be precluded by existing patents that
we are unable to acquire or license on reasonable terms.
From time to time we may become involved in other legal proceedings.
We are currently, and from time to time in the future may become, subject to legal proceedings, claims, litigation and
government investigations or inquiries, which could be expensive, lengthy, disruptive to normal business operations and occupy
a significant amount of our employees’ time and attention. In addition, the outcome of any legal proceedings, claims, litigation,
investigations or inquiries may be difficult to predict and could have a material adverse effect on our business, reputation,
operating results, or financial condition.
Our products and brands are subject to intellectual property infringement, including in jurisdictions that do not
adequately protect our products and intellectual property rights.
We regard our products, brands and intellectual property as proprietary and take measures to protect our assets from
infringement. We are aware that some unauthorized copying of our products and brands occurs, and if a significantly greater
amount were to occur, it could negatively impact our business. Further, our products and services are available worldwide and
the laws of some countries, particularly in Asia, either do not protect our products, brands and intellectual property to the same
extent as the laws of the United States or are poorly enforced. Legal protection of our rights may be ineffective in countries with
weaker intellectual property enforcement mechanisms. In addition, certain third parties have registered our intellectual property
rights without authorization in foreign countries. Successfully registering such intellectual property rights could limit or restrict
our ability to offer products and services based on such rights in those countries. Although we take steps to enforce and police
our rights, our practices and methodologies may not be effective against all eventualities.
FINANCIAL RISKS
Our financial results are subject to currency and interest rate fluctuations.
International sales are a fundamental part of our business. For our fiscal year ended March 31, 2023, international net revenue
comprised 58 percent of our total net revenue, and we expect our international business to continue to account for a significant
portion of our total net revenue. As a result of our international sales, and also the denomination of our foreign investments and
our cash and cash equivalents in foreign currencies, we are exposed to the effects of fluctuations in foreign currency exchange
rates, and volatility in foreign currency exchange rates remains elevated as compared to historic levels. Strengthening of the
U.S. dollar, particularly relative to the Euro and British pound sterling, has a negative impact on our reported international net
revenue but a positive impact on our reported international operating expenses because these amounts are translated at lower
15
rates. We use foreign currency hedging contracts to mitigate some foreign currency risk. However, these activities are limited in
the protection they provide us from foreign currency fluctuations and can themselves result in losses. In addition, interest rate
volatility can decrease the amount of interest earned on our cash, cash equivalents and short-term investment portfolio.
We utilize debt financing and such indebtedness could adversely impact our business and financial condition.
We have senior unsecured notes outstanding, as well as an unsecured revolving credit facility. While the facility is currently
undrawn, we may use the proceeds of any future borrowings for general corporate purposes. We may also enter into other
financial instruments in the future. This indebtedness and any indebtedness that we may incur in the future could affect our
financial condition and future financial results by, among other things, requiring the dedication of a substantial portion of any
cash flow from operations to the repayment of indebtedness and increasing our vulnerability to downturns in our business or
adverse changes in general economic and industry conditions.
The agreements governing our indebtedness impose restrictions on us and require us to maintain compliance with specified
covenants. In particular, the revolving credit facility requires us to maintain compliance with a debt to EBITDA ratio. Our
ability to comply with these covenants may be affected by events beyond our control. If we breach any of these covenants and
do not obtain a waiver from the lenders or noteholders, then, subject to applicable cure periods, our outstanding indebtedness
may be declared immediately due and payable. There can be no assurance that any refinancing or additional financing would be
available on terms that are favorable or acceptable to us, if at all. In addition, changes by any rating agency to our credit rating
may negatively impact the value and liquidity of both our debt and equity securities, as well as the potential costs associated
with any potential refinancing of our indebtedness. Downgrades in our credit rating could also restrict our ability to obtain
additional financing in the future and could affect the terms of any such financing.
Changes in our tax rates or exposure to additional tax liabilities, and changes to tax laws and interpretations of tax laws
could adversely affect our earnings and financial condition.
We are subject to taxes in the United States and in various foreign jurisdictions. Significant judgment is required in determining
our worldwide income tax provision, tax assets, and accruals for other taxes, and the ultimate tax determination is uncertain for
many transactions. Our effective income tax rate is based in part on our corporate operating structure and how we operate our
business and develop, value, and use our intellectual property. Taxing authorities in jurisdictions in which we operate have
challenged and audited, and may continue to, challenge and audit our methodologies for calculating our income taxes, which
could increase our effective income tax rate. In addition, our provision for income taxes is materially affected by our profit
levels, changes in our business, changes in our geographic mix of earnings, changes in the elections we make, changes in our
corporate structure, or changes in applicable accounting rules, as well as other factors.
Changes to enacted U.S. federal, state or international tax laws, as well as changes to interpretations of existing tax laws,
particularly in Switzerland, where our international business is headquartered, and actions we have taken in our business with
respect to such laws, have affected, and could continue to affect, our effective tax rates and cash taxes, and could cause us to
change the way in which we structure our business and result in other costs. In particular, recent changes to tax law and
regulations in the United States and among other countries in the Organization for Economic Co-operation and Development
could materially impact our provision for income taxes and cash taxes. Our effective tax rate also could be adversely affected
by changes in the measurement of our deferred income taxes, including the need for valuation allowances against deferred tax
assets. Our valuation allowances, in turn, are impacted by several factors with respect to our business, industry, and the
macroeconomic environment, including rising interest rates. Significant judgment is involved in determining the amount of
valuation allowances, and actual financial results also may differ materially from our current estimates and could have a
material impact on our assessments.
We are required to pay taxes other than income taxes, such as payroll, sales, use, value-added, net worth, property, transfer, and
goods and services taxes, in both the United States and foreign jurisdictions. Several foreign jurisdictions have introduced new
digital services taxes on revenue of companies that provide certain digital services or expanded their interpretation of existing
tax laws with regard to other non-income taxes. There is limited guidance about the applicability of these new taxes or changing
interpretations to our business and significant uncertainty as to what will be deemed in scope. If these foreign taxes are applied
to us, it could have an adverse and material impact on our business and financial performance.
16
GENERAL RISKS
Our business is subject to economic, market, public health and geopolitical conditions.
Our business is subject to economic, market, public health and geopolitical conditions, which are beyond our control. The
United States and other international economies have experienced cyclical downturns from time to time. Worsening economic
conditions, political instability, and adverse political developments in or around any of the countries in which we do business,
particularly conditions that negatively impact discretionary consumer spending and consumer demand or increase our operating
costs, including conflicts, inflation, slower growth, recession and other macroeconomic conditions have had, and could continue
to have, a material adverse impact on our business and operating results. In addition, relations between the United States and
countries in which we have operations and sales have been impacted by events such as the adoption or expansion of trade
restrictions, including economic sanctions, that have had a negative impact on our financial results and development processes.
We are particularly susceptible to market conditions and risks associated with the entertainment industry, which, in addition to
general macroeconomic downturns, also include the popularity, price and timing of our games, changes in consumer
demographics, the availability and popularity of other forms of entertainment, and critical reviews and public tastes and
preferences, which may change rapidly and cannot necessarily be predicted.
Our stock price has been volatile and may continue to fluctuate significantly.
The market price of our common stock historically has been, and we expect will continue to be, subject to significant
fluctuations. These fluctuations may be due to our operating results or factors specific to our operating results (including those
discussed in the risk factors above), changes in securities analysts’ estimates of our future financial performance, ratings or
recommendations, our results or future financial guidance falling below our expectations and analysts’ and investors’
expectations, the failure of our capital return programs to meet analysts’ and investors’ expectations, the announcement and
integration of any acquisitions we may make, departure of key personnel, cyberattacks, or factors largely outside of our control
including, those affecting interactive gaming, entertainment, and/or technology companies generally, national or international
economic conditions, investor sentiment or other factors related or unrelated to our operating performance. In particular,
economic downturns may contribute to the public stock markets experiencing extreme price and trading volume volatility.
These fluctuations could adversely affect the price of our common stock.
17
Item 1B: Unresolved Staff Comments
None.
Item 2:
Properties
Not applicable.
Item 3:
Legal Proceedings
Refer to Note 14 of the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K
for disclosures regarding our legal proceedings.
Item 4: Mine Safety Disclosures
Not applicable.
18
Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
PART II
Holders
There were approximately 642 holders of record of our common stock as of May 22, 2023. In addition, a significant number of
beneficial owners of our common stock hold their shares in street name. Our common stock is traded on the Nasdaq Global
Select Market under the symbol “EA”.
Dividends
Our quarterly cash dividend was $0.19 per share of common stock in fiscal year 2023. We paid aggregate cash dividends of
$210 million during the fiscal year ended March 31, 2023. We currently expect to continue to pay comparable cash dividends
on a quarterly basis in the future; however, future declarations of dividends and the establishment of future record dates and
payment dates are subject to the final determination of our Board of Directors or a designated Committee of our Board of
Directors.
Issuer Purchases of Equity Securities
In August 2022, our Board of Directors authorized a program to repurchase up to $2.6 billion of our common stock. This stock
repurchase program expires on November 4, 2024. Under this program, we may purchase stock in the open market or through
privately negotiated transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading
plans. The timing and actual amount of the stock repurchases will depend on several factors including price, capital availability,
regulatory requirements, alternative investment opportunities and other market conditions. We are not obligated to repurchase a
specific number of shares under this program and it may be modified, suspended or discontinued at any time. We repurchased
approximately 5.3 million shares for approximately $645 million under this program during the fiscal year ended March 31,
2023. We are actively repurchasing shares under this program.
The following table summarizes the number of shares repurchased in the fourth quarter of the fiscal year ended March 31,
2023:
Fiscal Month
January 1, 2023 - January 28, 2023
January 29, 2023 - February 25, 2023
February 26, 2023 - April 1, 2023
Stock Performance Graph
Total Number of
Shares Purchased
Average Price
Paid per Share
756,877 $
859,389 $
1,158,552 $
2,774,818 $
124.67
115.90
113.11
117.13
Total Number of
Shares Purchased as
part of Publicly
Announced Programs
Maximum Dollar
Value that May
Still Be Purchased
Under the
Programs
(in millions)
756,877 $
859,389 $
1,158,552 $
2,774,818
2,185
2,086
1,955
The following information shall not be deemed to be “filed” with the SEC nor shall this information be incorporated by
reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, as amended, except to the
extent that we specifically incorporate it by reference into a filing.
The following graph shows a five-year comparison of cumulative total returns during the period from March 31, 2018 through
March 31, 2023, for our common stock, the S&P 500 Index (to which EA was added in July 2002), the Nasdaq Composite
Index, and the RDG Technology Composite Index, each of which assumes an initial value of $100. Each measurement point is
as of the end of each fiscal year. The performance of our stock depicted in the following graph is not necessarily indicative of
the future performance of our stock.
19
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Electronic Arts Inc., the S&P 500 Index, the Nasdaq Composite Index,
and the RDG Technology Composite Index
* Based on $100 invested on March 31, 2018 in stock or index, including reinvestment of dividends.
Electronic Arts Inc.
S&P 500 Index
Nasdaq Composite Index
RDG Technology Composite Index
Item 6:
[Reserved]
March 31,
2018
2019
2020
2021
2022
2023
$
100 $
100
100
100
84 $
110
111
113
83 $
102
111
124
112 $
159
193
211
105 $
184
209
227
101
170
181
205
20
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations
OVERVIEW
The following overview is a high-level discussion of our operating results, as well as some of the trends and drivers that affect
our business. Management believes that an understanding of these trends and drivers provides important context for our results
for the fiscal year ended March 31, 2023, as well as our future prospects. This summary is not intended to be exhaustive, nor is
it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Form 10-K, including in the
“Business” section and the “Risk Factors” above, the remainder of “Management’s Discussion and Analysis of Financial
Condition and Results of Operations (“MD&A”)” or the Consolidated Financial Statements and related Notes.
About Electronic Arts
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content
and services that can be experienced on game consoles, PCs, mobile phones and tablets. At our core is a portfolio of intellectual
property from which we create innovative games and experiences that deliver high-quality entertainment and drive engagement
across our network of hundreds of millions of unique active accounts. Our portfolio includes brands that we either wholly own
(such as Apex Legends, Battlefield, and The Sims) or license from others (such as Madden NFL, Star Wars, and the 300+
licenses within our global football ecosystem). Through our live services offerings, we offer our players high-quality
experiences designed to provide value to players, and extend and enhance gameplay. These live services include extra content,
subscription offerings and other revenue generated in addition to the sale of our base games. We are focusing on building
games and experiences that grow the global online communities around our key franchises; reaching more players through
connecting interactive storytelling to key intellectual property; and building re-occurring revenue from our annualized sports
franchises, our console, PC and mobile catalog titles, and our live services.
Financial Results
Our key financial results for our fiscal year ended March 31, 2023 were as follows:
Total net revenue was $7,426 million, up 6 percent year-over-year.
•
Live services and other net revenue was $5,489 million, up 10 percent year-over-year.
•
Gross margin was 75.9 percent, up 2.5 percentage points year-over-year.
•
Operating expenses were $4,302 million, up 7 percent year-over-year.
•
Operating income was $1,332 million, up 18 percent year-over-year.
•
Net income was $802 million, up 2 percent year-over-year.
•
Diluted earnings per share was $2.88, up 4 percent year-over-year.
•
Operating cash flow was $1,550 million, down 18 percent year-over-year.
•
•
Total cash, cash equivalents and short-term investments were $2,767 million.
• We repurchased 10.4 million shares of our common stock for $1,295 million.
• We paid cash dividends of $210 million during the fiscal year ended March 31, 2023.
Trends in Our Business
Live Services Business. We offer our players high-quality experiences designed to provide value to players and to extend and
enhance gameplay. These live services include extra content, subscription offerings and other revenue generated in addition to
the sale of our base games and free-to-play games. Our net revenue attributable to live services and other was $5,489 million,
$4,998 million, and $4,016 million for fiscal years 2023, 2022, and 2021, respectively, and we expect that live services net
revenue will continue to be material to our business. Within live services and other, net revenue attributable to extra content
was $4,277 million, $3,910 million, and $3,068 million for fiscal years 2023, 2022, and 2021, respectively. Extra content net
revenue has increased as more players engage with our games and services, and purchase additional content designed to provide
value to players and extend and enhance gameplay. Our most popular live services are the extra content purchased for the
Ultimate Team mode associated with our sports franchises and extra content purchased for our Apex Legends franchise.
Ultimate Team allows players to collect current and former professional players in order to build and compete as a personalized
team. Live services net revenue generated from extra content purchased within the Ultimate Team mode associated with our
sports franchises, a substantial portion of which was derived from FIFA Ultimate Team, and from our Apex Legends franchise,
is material to our business.
21
Digital Delivery of Games. In our industry, players increasingly purchase games digitally as opposed to purchasing physical
discs. While this trend, as applied to our business, may not be linear due to a mix of products during a fiscal year, consumer
buying patterns and other factors, over time we expect players to purchase an increasingly higher proportion of our games
digitally. As a result, we expect net revenue attributable to digital full game downloads to increase over time and net revenue
attributable to sales of packaged goods to decrease.
Our net revenue attributable to digital full game downloads was $1,262 million, $1,282 million, and $918 million during fiscal
years 2023, 2022, and 2021, respectively; while our net revenue attributable to packaged goods sales was $675 million, $711
million, and $695 million in fiscal year 2023, 2022, and 2021, respectively. In addition, as measured based on total units sold
on Microsoft’s Xbox One and Xbox Series X and Sony’s PlayStation 4 and 5 rather than by net revenue, we estimate that 68
percent, 65 percent, and 62 percent of our total units sold during fiscal years 2023, 2022, and 2021 were sold digitally. Digital
full game units are based on sales information provided by Microsoft and Sony; packaged goods units sold through are
estimated by obtaining data from significant retail partners in North America, Europe and Asia, and applying internal sales
estimates with respect to retail partners from which we do not obtain data. We believe that these percentages are reasonable
estimates of the proportion of our games that are digitally downloaded in relation to our total number of units sold for the
applicable period of measurement.
Increases in consumer adoption of digital purchase of games combined with increases in our live services revenue generally
results in expansion of our gross margin, as costs associated with selling a game digitally is generally less than selling the same
game through traditional retail and distribution channels.
Increased Competition. Competition in our business is intense. Our competitors range from established interactive
entertainment companies to emerging start-ups. In addition, the gaming, technology/internet, and entertainment industries have
converged in recent years and larger, well-funded technology companies have strengthened their interactive entertainment
capabilities resulting in more direct competition with us. Their greater financial or other resources may provide larger budgets
to develop and market tools, technologies, products and services that gain consumer success and shift player time and
engagement away from our products and services. In addition, our leading position within the interactive entertainment industry
makes us a prime target for recruiting our executives, as well as key creative and technical talent, resulting in retention
challenges and increased cost to retain and incentivize our key people.
In the past several years, our industry has undergone a period of increased consolidation which increases competitive pressure
on us as interactive entertainment companies grow through acquisition or as larger, well-funded technology companies
strengthen their interactive entertainment capabilities.
Concentration of Sales Among the Most Popular Games. In all major segments of our industry, we see a large portion of games
sales concentrated on the most popular titles. Similarly, a significant portion of our revenue historically has been derived from
games based on a few popular franchises, several of which we have released on an annual or bi-annual basis. In particular, we
have historically derived a significant portion of our net revenue from our global football franchise, the annualized version of
which is consistently one of the best-selling games in the marketplace. We have invested in over 300 individual partnerships
and licenses to create our global football ecosystem and starting in fiscal year 2024, our global football franchise will transition
to a new EA SPORTS FC brand. Our vision for the future of interactive football with EA SPORTS FC is to create the largest
football club in the world, and we believe this is the right opportunity for us so that we can continue delivering innovation and
growing to connect more fans on a global scale.
Re-occurring Revenue Sources. Our business model includes revenue that we deem re-occurring in nature, such as revenue
from our live services, annualized sports franchises (e.g., global football, Madden NFL), and our console, PC and mobile
catalog titles (i.e., titles that did not launch in the current fiscal year). We have been able to forecast revenue from these areas of
our business with greater relative confidence than for new games, services and business models. As we continue to incorporate
new business models and modalities of play into our games, our goal is to continue to look for opportunities to expand the re-
occurring portion of our business.
Free-to-Play and Free-to-Enter Games. We offer games in some of our largest franchises, including the PC version of our
global football franchise, The Sims 4, and Apex Legends, through business models that allow consumers to access games with
no-upfront cost. These games are then monetized through a live service associated with the game, particularly extra content
sales. These business models are dominant in the mobile gaming industry and are becoming increasingly accepted in the online
PC and console market. We expect to continue offering games through these business models across console, PC and mobile
and expect extra content revenue generated through these business models to continue to be an important part of our business.
22
Restructuring. In March 2023, our Board of Directors approved a restructuring plan (the "2023 Restructuring Plan" or the
“Plan”) focused on prioritizing investments to the Company's growth opportunities and optimizing its real estate portfolio. The
Plan includes actions driven by portfolio rationalization, including intellectual property impairment charges and headcount
reductions, in addition to office space reductions. The actions associated with the Plan are expected to be substantially complete
by September 30, 2023.
Net Bookings. In order to improve transparency into our business, we disclose an operating performance metric, net bookings.
Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net
bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.
The following is a calculation of our total net bookings for the periods presented:
(In millions)
Total net revenue
Change in deferred net revenue (online-enabled games)
Net bookings
Year Ended March 31,
2023
2022
$
$
7,426 $
(85)
7,341 $
6,991
524
7,515
Net bookings were $7,341 million for fiscal year 2023 primarily driven by sales related to our FIFA and Madden franchises,
Apex Legends, and The Sims 4. Net bookings decreased $174 million or 2 percent as compared to fiscal year 2022 primarily due
to the prior year release of Battlefield 2042, and a $244 million impact related to fluctuations in foreign exchange rates, net of
hedging activities, partially offset by strength in our FIFA franchise. Live services and other net bookings were $5,530 million
for fiscal year 2023, and increased $160 million or 3 percent as compared to fiscal year 2022. The increase in live services and
other net bookings was due primarily to strength in our FIFA franchise across all platforms (console, PC, and mobile), and the
addition of Golf Clash. This strength was partially offset by fluctuations in foreign exchange rates, net of hedging activities, and
softness in sales of extra content within the rest of our mobile catalog portfolio. Full game net bookings were $1,811 million for
fiscal year 2023, and decreased $334 million or 16 percent as compared to fiscal year 2022 primarily due to the prior year
releases of Battlefield 2042 and Mass Effect Trilogy Remaster, partially offset by the release of Dead Space Remake and sales
related to our FIFA franchise.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the
United States (“U.S. GAAP”). The preparation of these Consolidated Financial Statements requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, contingent assets and liabilities, and revenue
and expenses during the reporting periods. The policies discussed below are considered by management to be critical because
they are not only important to the portrayal of our financial condition and results of operations, but also because application and
interpretation of these policies requires both management judgment and estimates of matters that are inherently uncertain and
unknown. As a result, actual results may differ materially from our estimates.
Revenue Recognition
We derive revenue principally from sales of our games, and related extra content and services that can be experienced on game
consoles, PCs, mobile phones and tablets. Our product and service offerings include, but are not limited to, the following:
•
•
•
•
•
full games with both online and offline functionality (“Games with Services”), which generally includes (1) the initial
game delivered digitally or via physical disc at the time of sale and typically provide access to offline core game
content (“software license”); (2) updates on a when-and-if-available basis, such as software patches or updates, and/or
additional free content to be delivered in the future (“future update rights”); and (3) a hosted connection for online
playability (“online hosting”);
full games with online-only functionality which require an Internet connection to access all gameplay and functionality
(“Online-Hosted Service Games”);
extra content related to Games with Services and Online-Hosted Service Games which provides access to additional
in-game content;
subscriptions, such as EA Play and EA Play Pro, that generally offer access to a selection of full games, in-game
content, online services and other benefits typically for a recurring monthly or annual fee; and
licensing to third parties to distribute and host our games and content.
23
We evaluate and recognize revenue by:
•
•
•
•
•
identifying the contract(s) with the customer;
identifying the performance obligations in the contract;
determining the transaction price;
allocating the transaction price to performance obligations in the contract; and
recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a
customer (i.e., “transfer of control”).
Certain of our full game and/or extra content are sold to resellers with a contingency that the full game and/or extra content
cannot be resold prior to a specific date (“Street Date Contingency”). We recognize revenue for transactions that have a Street
Date Contingency when the Street Date Contingency is removed and the full game and/or extra content can be resold by the
reseller. For digital full game and/or extra content downloads sold to customers, we recognize revenue when the full game and/
or extra content is made available for download to the customer.
Online-Enabled Games
Games with Services. Our sales of Games with Services are evaluated to determine whether the software license, future update
rights and the online hosting are distinct and separable. Sales of Games with Services are generally determined to have three
distinct performance obligations: software license, future update rights, and the online hosting.
Since we do not sell the performance obligations on a stand-alone basis, we consider market conditions and other observable
inputs to estimate the stand-alone selling price for each performance obligation. For Games with Services, generally 75 percent
of the sales price is allocated to the software license performance obligation and recognized at a point in time when control of
the license has been transferred to the customer. The remaining 25 percent is allocated to the future update rights and the online
hosting performance obligations and recognized ratably as the service is provided (over the Estimated Offering Period).
Online-Hosted Service Games. Sales of our Online-Hosted Service Games are determined to have one distinct performance
obligation: the online hosting. We recognize revenue from these arrangements as the service is provided.
Extra Content. Revenue received from sales of downloadable content are derived primarily from the sale of virtual currencies
and digital in-game content that are designed to extend and enhance players’ game experience. Sales of extra content are
accounted for in a manner consistent with the treatment for our Games with Services and Online-Hosted Service Games as
discussed above, depending upon whether or not the extra content has offline functionality. That is, if the extra content has
offline functionality, then the extra content is accounted for similarly to Games with Services (generally determined to have
three distinct performance obligations: software license, future update rights, and the online hosting). If the extra content does
not have offline functionality, then the extra content is determined to have one distinct performance obligation: the online-
hosted service.
Subscriptions
Sales of our subscriptions are deemed to be one performance obligation and we recognize revenue from these arrangements
ratably over the subscription term as the performance obligation is satisfied.
Licensing Revenue
We utilize third-party licensees to distribute and host our games and content in accordance with license agreements, for which
the licensees typically pay us a fixed minimum guarantee and/or sales-based royalties. These arrangements typically include
multiple performance obligations, such as a time-based license of software and future update rights. We recognize as revenue a
portion of the minimum guarantee when we transfer control of the license of software (generally upon commercial launch) and
the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Any sales-
based royalties are generally recognized as the related sales occur by the licensee.
24
Significant Judgments around Revenue Arrangements
Identifying performance obligations. Performance obligations promised in a contract are identified based on the goods and
services that will be transferred to the customer that are both capable of being distinct, (i.e., the customer can benefit from the
goods or services either on its own or together with other resources that are readily available), and are distinct in the context of
the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes
multiple promises, we must apply judgment to determine whether those promises are separate and distinct performance
obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation.
Determining the transaction price. The transaction price is determined based on the consideration that we will be entitled to
receive in exchange for transferring our goods and services to the customer. Determining the transaction price often requires
judgment, based on an assessment of contractual terms and business practices. It further includes review of variable
consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. In
addition, the transaction price does not include an estimate of the variable consideration related to sales-based royalties. Sales-
based royalties are recognized as the sales occur.
Allocating the transaction price. Allocating the transaction price requires that we determine an estimate of the relative stand-
alone selling price for each distinct performance obligation. Determining the relative stand-alone selling price is inherently
subjective, especially in situations where we do not sell the performance obligation on a stand-alone basis (which occurs in the
majority of our transactions). In those situations, we determine the relative stand-alone selling price based on various
observable inputs using all information that is reasonably available. Examples of observable inputs and information include:
historical internal pricing data, cost plus margin analysis, pre-release versus post-release costs, and pricing data from
competitors to the extent the data is available. The results of our analysis resulted in a specific percentage of the transaction
price being allocated to each performance obligation.
Determining the Estimated Offering Period. The offering period is the period in which we offer to provide the future update
rights and/or online hosting for the game and related extra content sold. Because the offering period is not an explicitly defined
period, we must make an estimate of the offering period for the service-related performance obligations (i.e., future update
rights and online hosting). Determining the Estimated Offering Period is inherently subjective and is subject to regular revision.
Generally, we consider the average period of time customers are online when estimating the offering period. We also consider
the estimated period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the
customer (i.e., time in channel). Based on these two factors, we then consider the method of distribution. For example, games
and extra content sold at retail would have a composite offering period equal to the online gameplay period plus time in channel
as opposed to digitally-distributed games and extra content which are delivered immediately via digital download and therefore,
the offering period is estimated to be only the online gameplay period.
Additionally, we consider results from prior analyses, known and expected online gameplay trends, as well as disclosed service
periods for competitors’ games in determining the Estimated Offering Period for future sales. We believe this provides a
reasonable depiction of the transfer of future update rights and online hosting to our customers, as it is the best representation of
the time period during which our games and extra content are experienced. We recognize revenue for future update rights and
online hosting performance obligations ratably on a straight-line basis over this period as there is a consistent pattern of
delivery for these performance obligations. Revenue for service-related performance obligations for games and extra content
sold through retail is recognized over an estimated ten-month period beginning in the month of sale, revenue for service-related
performance obligations for digitally-distributed games and extra content is recognized over an estimated eight-month period
beginning in the month of sale.
During the three months ended September 30, 2021, we completed our annual evaluation of the Estimated Offering Period and
noted consumers are playing certain of our Online Hosted Service Games, such as PC and console free-to-play games, for
longer periods of time than in previous years. This extended consumer gameplay is due to players engaging with services we
provide that are designed to enhance and extend gameplay, and as such, concluded that the Estimated Offering Period for such
games should be lengthened. As a result, for all new sales after July 1, 2021, the revenue that we recognize for service-related
performance obligations related to our PC and console free-to-play games is recognized generally over a twelve-month period.
The fiscal year 2022 change in Estimated Offering Period did not impact the amount of net bookings or the operating cash
flows that we report. During the fiscal year ended March 31, 2023, this increase to our Estimated Offering Period resulted in
increases in net revenue of $103 million, net income of $79 million, and diluted earnings per share of $0.28. During the fiscal
year ended March 31, 2022, this increase to our Estimated Offering Period resulted in decreases in net revenue of $131 million,
net income of $100 million, and diluted earnings per share of $0.35.
25
Principal Agent Considerations
We evaluate sales to end customers of our full games and related content via third-party storefronts, including digital storefronts
such as Microsoft’s Xbox Store, Sony’s PlayStation Store, Apple App Store, and Google Play Store, in order to determine
whether or not we are acting as the principal in the sale to the end customer, which we consider in determining if revenue
should be reported gross or net of fees retained by the third-party storefront. An entity is the principal if it controls a good or
service before it is transferred to the end customer. Key indicators that we evaluate in determining gross versus net treatment
include but are not limited to the following:
•
•
•
•
the underlying contract terms and conditions between the various parties to the transaction;
which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end
customer;
which party has discretion in establishing the price for the specified good or service; and
which party has inventory risk before the specified good or service has been transferred to the end customer.
Based on an evaluation of the above indicators, except as discussed below, we have determined that generally the third party is
considered the principal to end customers for the sale of our full games and related content. We therefore report revenue related
to these arrangements net of the fees retained by the storefront. However, for sales arrangements via Apple App Store and
Google Play Store, EA is considered the principal to the end customer and thus, we report revenue on a gross basis and mobile
platform fees are reported within cost of revenue.
Income Taxes
We recognize deferred tax assets and liabilities for both (1) the expected impact of differences between the financial statement
amount and the tax basis of assets and liabilities and (2) the expected future tax benefit to be derived from tax losses and tax
credit carryforwards. We do not recognize any deferred taxes related to the U.S. taxes on foreign earnings as we recognize these
taxes as a period cost.
We record a valuation allowance against deferred tax assets when it is considered more likely than not that all or a portion of
our deferred tax assets will not be realized. In making this determination, we are required to give significant weight to evidence
that can be objectively verified. It is generally difficult to conclude that a valuation allowance is not needed when there is
significant negative evidence, such as cumulative losses in recent years. Forecasts of future taxable income are considered to be
less objective than past results. Therefore, cumulative losses weigh heavily in the overall assessment.
In addition to considering forecasts of future taxable income, we are also required to evaluate and quantify other possible
sources of taxable income in order to assess the realization of our deferred tax assets, namely the reversal of existing deferred
tax liabilities, the carryback of losses and credits as allowed under current tax law, and the implementation of tax planning
strategies. Evaluating and quantifying these amounts involves significant judgments. Each source of income must be evaluated
based on all positive and negative evidence and this evaluation may involve assumptions about future activity. Certain taxable
temporary differences that are not expected to reverse during the carry forward periods permitted by tax law cannot be
considered as a source of future taxable income that may be available to realize the benefit of deferred tax assets.
Every quarter, we perform a realizability analysis to evaluate whether it is more likely than not that all or a portion of our
deferred tax assets will not be realized. Our Swiss deferred tax asset realizability analysis relies upon future Swiss taxable
income as the primary source of taxable income but considers all available sources of Swiss income based on the positive and
negative evidence. We give more weight to evidence that can be objectively verified. However, estimating future Swiss taxable
income requires judgment, specifically related to assumptions about expected growth rates of future Swiss taxable income,
which are based primarily on third party market and industry growth data. Actual results that differ materially from those
estimates could have a material impact on our valuation allowance assessment. Swiss interest rates have an impact on the
valuation allowance and are based on published Swiss guidance, which generally occurs in the fourth quarter of our fiscal year.
Any significant changes to such interest rates could result in a material impact to the valuation allowance and to our
Consolidated Financial Statements. We have adjusted our valuation allowance for changes in the published interest rates in the
past and it is probable that we will do so again based on current global interest rate trends. Switzerland has a seven-year
carryforward period and does not permit the carry back of losses. Actions we take in connection with acquisitions could also
impact the utilization of our Swiss deferred tax asset.
As part of the process of preparing our Consolidated Financial Statements, we are required to estimate our income taxes in each
jurisdiction in which we operate prior to the completion and filing of tax returns for such periods. This process requires
26
estimating both our geographic mix of income and our uncertain tax positions in each jurisdiction where we operate. These
estimates require us to make judgments about the likely application of the tax law to our situation, as well as with respect to
other matters, such as anticipating the positions that we will take on tax returns prior to our preparing the returns and the
outcomes of disputes with tax authorities. The ultimate resolution of these issues may take extended periods of time due to
examinations by tax authorities and statutes of limitations. In addition, changes in our business, including acquisitions, changes
in our international corporate structure, changes in the geographic location of business functions or assets, changes in the
geographic mix and amount of income, as well as changes in our agreements with tax authorities, valuation allowances,
applicable accounting rules, applicable tax laws and regulations, rulings and interpretations thereof, developments in tax audit
and other matters, and variations in the estimated and actual level of annual pre-tax income can affect the overall effective tax
rate.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
The information under the subheading “Impact of Recently Issued Accounting Standards” in Note 1 — Description of Business
and Basis of Presentation to the Consolidated Financial Statements in this Form 10-K is incorporated by reference into this
Item 7.
27
RESULTS OF OPERATIONS
Our fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations for
the fiscal year ended March 31, 2023 contained 52 weeks and ended on April 1, 2023. Our results of operations for the fiscal
year ended March 31, 2022 contained 52 weeks and ended on April 2, 2022. For simplicity of disclosure, all fiscal periods are
referred to as ending on a calendar month end.
Net Revenue
Net revenue consists of sales generated from (1) full games sold as digital downloads or as packaged goods and designed for
play on game consoles, PCs and mobile phones and tablets (2) live services associated with these games, such as extra-content,
(3) subscriptions that generally offer access to a selection of full games, in-game content, online services and other benefits, and
(4) licensing our games to third parties to distribute and host our games.
Comparison of Fiscal Year 2023 to Fiscal Year 2022
Net Revenue
Net revenue for fiscal year 2023 was $7,426 million, primarily driven by sales related to FIFA 23, FIFA 22, Apex Legends, The
Sims 4, and Madden NFL 23. Net revenue for fiscal year 2023 increased $435 million, as compared to fiscal year 2022. This
increase was driven by an $868 million increase in net revenue primarily driven by year-over-year growth in the FIFA franchise
and sales of extra content for Apex Legends, and the addition of Golf Clash, partially offset by a $433 million decrease in net
revenue primarily due to the prior year release of Mass Effect Trilogy Remaster, the Star Wars franchise, and The Sims 4.
Net Revenue by Composition
Our net revenue by composition for fiscal years 2023 and 2022 was as follows (in millions):
Net revenue:
Full game downloads
Packaged goods
Full game
Live services and other
Total net revenue
Full Game Net Revenue
2023
2022
$ Change
% Change
Year Ended March 31,
$
$
$
$
1,262 $
1,282 $
675
711
1,937 $
1,993 $
5,489 $
7,426 $
4,998 $
6,991 $
(20)
(36)
(56)
491
435
(2) %
(5) %
(3) %
10 %
6 %
Full game net revenue includes full game downloads and packaged goods. Full game downloads primarily includes revenue
from digital sales of full games on console, PC, mobile phones and tablets. Packaged goods primarily includes revenue from
software that is sold physically through traditional channels such as brick and mortar retailers and certain licensing revenue.
Full game net revenue for fiscal year 2023 was $1,937 million, primarily driven by FIFA 23, Madden NFL 23, Battlefield 2042,
and FIFA 22. Full game net revenue for fiscal year 2023 decreased $56 million, or 3 percent, as compared to fiscal year 2022.
This decrease was primarily due to the prior year releases of Mass Effect Trilogy Remaster and It Takes Two, and The Sims 4,
partially offset by the release of Dead Space Remake and growth in the FIFA franchise.
Live Services and Other Net Revenue
Live services and other net revenue primarily includes revenue from sales of extra content for console, PC, and mobile games,
certain licensing revenue, subscriptions, and advertising.
Live services and other net revenue for fiscal year 2023 was $5,489 million, primarily driven by sales of extra content for FIFA
Ultimate Team, Apex Legends, The Sims 4, and Madden Ultimate Team. Live services and other net revenue for fiscal year
2023 increased $491 million, or 10 percent, as compared to fiscal year 2022. This increase was primarily driven by sales of
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extra content for Apex Legends, extra content and licensing for our FIFA franchise, and the addition of Golf Clash, partially
offset by the Star Wars franchise.
Cost of Revenue
Cost of revenue consists of (1) certain royalty expenses for celebrities, professional sports leagues, movie studios and other
organizations, and independent software developers, (2) mobile platform fees associated with our mobile revenue (for
transactions in which we are acting as the principal in the sale to the end customer), (3) data center, bandwidth and server costs
associated with hosting our online games and websites, (4) inventory costs, including manufacturing royalties, (5) payment
processing fees, (6) amortization and impairment of certain intangible assets, (7) personnel-related costs, and (8) warehousing
and distribution costs.
Cost of revenue for fiscal years 2023 and 2022 was as follows (in millions):
March 31,
2023
% of Net
Revenue
March 31,
2022
% of Net
Revenue
% Change
Change as a % of Net
Revenue
$
1,792
24 % $
1,859
27 %
(4) %
(3) %
Cost of revenue decreased by $67 million during fiscal year 2023, as compared to fiscal year 2022. The decrease was primarily
due to a decrease in inventory costs driven by the prior year releases of Battlefield 2042 and Mass Effect Trilogy Remaster and
the FIFA franchise, and lower royalty costs due to the mix in sales from royalty bearing titles, partially offset by an increase in
platform and hosting fees.
Cost of revenue as a percentage of total net revenue decreased by 3 percent during fiscal year 2023, as compared to fiscal year
2022. This decrease was primarily due to a decrease in inventory costs driven by the prior year releases of Battlefield 2042 and
Mass Effect Trilogy Remaster, lower royalty costs due to the mix in sales form royalty bearing titles, and a decrease in the
proportion of sales derived from packaged goods, partially offset by an increase in platform and hosting fees.
Research and Development
Research and development expenses consist of expenses incurred by our production studios for personnel-related costs, related
overhead costs, external third-party development costs, contracted services, and depreciation. Research and development
expenses for our online products include expenses incurred by our studios consisting of direct development and related
overhead costs in connection with the development and production of our online games. Research and development expenses
also include expenses associated with our digital platform, software licenses and maintenance, and management overhead.
Research and development expenses for fiscal years 2023 and 2022 were as follows (in millions):
March 31,
2023
% of Net
Revenue
March 31,
2022
% of Net
Revenue
$ Change
% Change
$
2,328
31 % $
2,186
31 % $
142
6 %
Research and development expenses increased by $142 million, or 6 percent, in fiscal year 2023, as compared to fiscal year
2022. This increase was primarily due to a net $56 million increase in personnel-related costs primarily resulting from
continued investment in our studios, offset by decreased variable compensation and related costs, a $30 million increase due to
hedging activities, and a $14 million increase in studio related contracted services.
Marketing and Sales
Marketing and sales expenses consist of advertising, marketing and promotional expenses, personnel-related costs, and related
overhead costs, net of qualified advertising cost reimbursements from third parties.
Marketing and sales expenses for fiscal years 2023 and 2022 were as follows (in millions):
March 31,
2023
% of Net
Revenue
March 31,
2022
% of Net
Revenue
$ Change
% Change
$
978
13 % $
961
14 % $
17
2 %
29
Marketing and sales expenses increased by $17 million, or 2 percent, in fiscal year 2023, as compared to fiscal year 2022. This
increase was primarily due to an increase in advertising and promotional spending related to the release of our Apex Legends
Mobile title in the first quarter of fiscal year 2023 and our FIFA franchise, partially offset by a decrease in advertising and
promotional spending primarily related to our mobile portfolio, and Battlefield 2042, Mass Effect Trilogy Remaster and It Takes
Two, which were released in prior fiscal years.
General and Administrative
General and administrative expenses consist of personnel and related expenses of executive and administrative staff, corporate
functions such as finance, legal, human resources, and information technology (“IT”), related overhead costs, fees for
professional services such as legal and accounting, and allowances for doubtful accounts.
General and administrative expenses for fiscal years 2023 and 2022 were as follows (in millions):
March 31,
2023
% of Net
Revenue
March 31,
2022
% of Net
Revenue
$ Change
% Change
$
727
10 % $
673
10 % $
54
8 %
General and administrative expenses increased by $54 million, or 8 percent, in fiscal year 2023, as compared to fiscal year
2022. This increase was primarily due to $44 million of accelerated amortization and depreciation associated with office space
reductions related to our fiscal 2023 Restructuring Plan, a $14 million increase in personnel-related costs primarily resulting
from an increase in headcount, offset by a $36 million decrease in contracted services driven by prior year acquisition-related
transaction and integration costs.
Restructuring
Restructuring expenses for fiscal years 2023 and 2022 were as follows (in millions):
March 31,
2023
% of Net
Revenue
March 31,
2022
% of Net
Revenue
$ Change
% Change
$
111
1 % $
—
— % $
111
— %
Restructuring expenses of $111 million were incurred in fiscal year 2023 related to our fiscal 2023 Restructuring Plan, of
which, $68 million related to impairment charges associated with acquisition-related intangible assets and other charges, and
$43 million related to employee severance and employee-related costs.
Income Taxes
Provision for income taxes for fiscal years 2023 and 2022 was as follows (in millions):
March 31, 2023
Effective Tax Rate
March 31, 2022
Effective Tax Rate
$
524
39.5 % $
292
27.0 %
Our effective tax rate for the fiscal year ended March 31, 2023 was 39.5 percent as compared to 27.0 percent for the same
period in fiscal year 2022.
During the fiscal year ended March 31, 2023, we recognized a $118 million tax charge to increase the valuation allowance on
Swiss deferred tax assets, primarily as a result of an increase in Swiss interest rates. The change in valuation allowance had the
effect of increasing our effective tax rate for the fiscal year ended March 31, 2023 by 8.9 percentage points.
During the fiscal year ended March 31, 2022, we completed intra-entity sales of intellectual property rights related to recent
acquisitions to our U.S. and Swiss intellectual property owners (the “Acquired IP intra-entity sales”). The transactions resulted
in overall taxable gains. Under U.S. GAAP, any profit resulting from the Acquired IP intra-entity sales was eliminated upon
consolidation. However, the transactions resulted in a step-up of the U.S. and Swiss tax-deductible basis in the transferred
intellectual property rights and, accordingly, created a temporary difference between the book basis and the tax basis of such
intellectual property rights. As a result, we recognized a $64 million net tax benefit for the current and deferred tax impacts of
the sales.
30
In addition, during the fiscal year ended March 31, 2022, we recognized a $29 million tax charge to increase the valuation
allowance on Swiss deferred tax assets that are not more likely than not to be realized. The Acquired IP intra-entity sales and
the change in valuation allowance had the effect of reducing our effective tax rate for the fiscal year ended March 31, 2022 by
3.2 percentage points.
Our effective tax rates for future periods will continue to depend on a variety of factors, including changes in our business, such
as acquisitions and intercompany transactions, our corporate structure, the geographic location of business functions or assets,
the geographic mix of income, our agreements with tax authorities, applicable accounting rules, applicable tax laws and
regulations, rulings and interpretations thereof, developments in tax audit and other matters, and variations in our annual pre-tax
income or loss. We anticipate that the impact of excess tax benefits, tax deficiencies, and changes in valuation allowances may
result in significant fluctuations to our effective tax rate in the future.
Comparison of Fiscal Year 2022 to Fiscal Year 2021
For the comparison of fiscal year 2022 to fiscal year 2021, refer to Part II, Item 7 “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of our Annual Report on Form 10-K for our fiscal year ended March 31, 2022,
filed with the SEC on May 25, 2022 under the subheading “Comparison of Fiscal Year 2022 to Fiscal Year 2021.”
LIQUIDITY AND CAPITAL RESOURCES
(In millions)
Cash and cash equivalents
Short-term investments
Total
Percentage of total assets
(In millions)
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Effect of foreign exchange on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
As of March 31,
2023
2022
Increase/(Decrease)
$
$
$
$
2,424
343
2,767
$
$
2,732
330
3,062
21 %
22 %
Year Ended March 31,
2023
2022
1,550
(217)
(1,600)
(41)
(308)
$
$
1,899
(2,804)
(1,620)
(3)
(2,528)
$
$
$
$
(308)
13
(295)
Change
(349)
2,587
20
(38)
2,220
For the comparison of fiscal year 2022 to fiscal year 2021, refer to Part II, Item 7 “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of our Annual Report on Form 10-K for our fiscal year ended March 31, 2022,
filed with the SEC on May 25, 2022 under the subheading “Liquidity and Capital Resources.”
Changes in Cash Flow
Operating Activities. Net cash provided by operating activities decreased by $349 million during fiscal year 2023, as compared
to fiscal year 2022, primarily driven by lower cash receipts and higher personnel-related payments primarily from continued
investment in our studios, partially offset by cash inflows from hedging activities and a decrease in prepayments for contracted
services.
Investing Activities. Net cash used in investing activities decreased by $2,587 million during fiscal year 2023, as compared to
fiscal year 2022, primarily driven by payments of $3,391 million in connection with acquisitions completed in prior year, and a
$149 million decrease in the purchase of short-term investments, partially offset by a $934 million increase in proceeds from
maturities and sales of short-term investments.
Financing Activities. Net cash used in financing activities decreased by $20 million during fiscal year 2023, as compared to
fiscal year 2022, primarily due to a $29 million reduction in cash paid to taxing authorities in connection with withholding taxes
for stock-based compensation, partially offset by a $17 million increase in cash dividend payments.
Short-term Investments
31
Due to our mix of fixed and variable rate securities, our short-term investment portfolio is susceptible to changes in short-term
interest rates. As of March 31, 2023, our short-term investments had gross unrealized losses of $1 million or less than 1 percent
of total short-term investments. From time to time, we may liquidate some or all of our short-term investments to fund
operational needs or other activities, such as capital expenditures, business acquisitions or stock repurchase programs.
Senior Notes
In February 2021, we issued $750 million aggregate principal amount of the 2031 Notes and $750 million aggregate principal
amount of the 2051 Notes. The effective interest rate is 1.98% for the 2031 Notes and 3.04% for the 2051 Notes. Interest is
payable semiannually in arrears, on February 15 and August 15 of each year.
In February 2016, we issued $400 million aggregate principal amount of the 2026 Notes. The effective interest rate is 4.97% for
the 2026 Notes. Interest is payable semiannually in arrears, on March 1 and September 1 of each year.
See Note 12 — Financing Arrangements to the Consolidated Financial Statements in this Form 10-K as it relates to our Senior
Notes, which is incorporated by reference into this Item 7.
Credit Facility
On March 22, 2023, we entered into a $500 million unsecured revolving credit facility (the "Credit Facility") with a syndicate
of banks. The Credit Facility terminates on March 22, 2028 unless the maturity is extended in accordance with its terms. As of
March 31, 2023, no amounts were outstanding. The Credit Facility contains an option to arrange with existing lenders and/or
new lenders to provide up to an aggregate of $500 million in additional commitments for revolving loans. Proceeds of loans
made under the Credit Facility may be used for general corporate purposes. See Note 12 — Financing Arrangements to the
Consolidated Financial Statements in this Form 10-K as it relates to our Credit Facility, which is incorporated by reference into
this Item 7.
Financial Condition
Our material cash requirements, including commitments for capital expenditure, as of March 31, 2023 are set forth in our Note
14 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-K, which is incorporated by
reference into this Item 7. We expect capital expenditures to be approximately $275 million in fiscal year 2024 primarily due to
facility buildouts. We believe that our cash, cash equivalents, short-term investments, cash generated from operations and
available financing facilities will be sufficient to meet these material cash requirements, which include licensing intellectual
property from professional sports organizations and players associations used in our EA SPORTS titles (e.g., the 300+ licenses
within our global football ecosystem, NFL Properties LLC, NFL Players Association and NFL Players Inc.) and third-party
content and celebrities (e.g., Disney Interactive), debt repayment obligations of $1.9 billion, and to fund our operating
requirements for the next 12 months and beyond. Our operating requirements include working capital requirements, capital
expenditures, the remaining portion of our $2.6 billion share repurchase program, quarterly cash dividend, which is currently
$0.19 per share, subject to declaration by our Board of Directors or a designated Committee of the Board of Directors, and
potentially, future acquisitions or strategic investments. We may choose at any time to raise additional capital to repay debt,
strengthen our financial position, facilitate expansion, repurchase our stock, pursue strategic acquisitions and investments, and/
or to take advantage of business opportunities as they arise. There can be no assurance, however, that such additional capital
will be available to us on favorable terms, if at all, or that it will not result in substantial dilution to our existing stockholders.
During fiscal year 2023, we returned $1,505 million to stockholders through our capital return programs, repurchasing 10.4
million shares for approximately $1,295 million and returning $210 million through our quarterly cash dividend program which
was initiated in November 2020.
Our foreign subsidiaries are generally subject to U.S. tax, and to the extent earnings from these subsidiaries can be repatriated
without a material tax cost, such earnings will not be indefinitely reinvested. As of March 31, 2023, approximately $925 million
of our cash and cash equivalents were domiciled in foreign tax jurisdictions. All of our foreign cash is available for repatriation
without a material tax cost.
32
We have a “shelf” registration statement on Form S-3 on file with the SEC. This shelf registration statement, which includes a
base prospectus, allows us at any time to offer any combination of securities described in the prospectus in one or more
offerings. Unless otherwise specified in a prospectus supplement accompanying the base prospectus, we would use the net
proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes,
which may include funding for working capital, financing capital expenditures, research and development, marketing and
distribution efforts, and if opportunities arise, for acquisitions or strategic alliances. Pending such uses, we may invest the net
proceeds in interest-bearing securities. In addition, we may conduct concurrent or other financings at any time.
Our ability to maintain sufficient liquidity could be affected by various risks and uncertainties including, but not limited to,
customer demand and acceptance of our products, our ability to collect our accounts receivable as they become due,
successfully achieving our product release schedules and attaining our forecasted sales objectives, economic conditions in the
United States and abroad, the impact of acquisitions and other strategic transactions in which we may engage, the impact of
competition, the seasonal and cyclical nature of our business and operating results, and the other risks described in the “Risk
Factors” section, included in Part I, Item 1A of this report.
As of March 31, 2023, we did not have any off-balance sheet arrangements.
33
Item 7A: Quantitative and Qualitative Disclosures About Market Risk
MARKET RISK
We are exposed to various market risks, including changes in foreign currency exchange rates, interest rates and market prices,
which have experienced significant volatility. Market risk is the potential loss arising from changes in market rates and market
prices. We employ established policies and practices to manage these risks. Foreign currency forward contracts are used to
hedge anticipated exposures or mitigate some existing exposures subject to foreign exchange risk as discussed below. While we
do not hedge our short-term investment portfolio, we protect our short-term investment portfolio against different market risks,
including interest rate risk as discussed below. Our cash and cash equivalents portfolio consists of highly liquid investments
with insignificant interest rate risk and original or remaining maturities of three months or less at the time of purchase. We do
not enter into derivatives or other financial instruments for speculative trading purposes and do not hedge our market price risk
relating to marketable equity securities, if any.
Foreign Currency Exchange Risk
Foreign Currency Exchange Rates. International sales are a fundamental part of our business, and the strengthening of the U.S.
dollar (particularly relative to the Euro, British pound sterling, Australian dollar, Japanese yen, Chinese yuan, South Korean
won and Polish zloty) has a negative impact on our reported international net revenue, but a positive impact on our reported
international operating expenses (particularly the Swedish krona and the Canadian dollar) because these amounts are translated
at lower rates as compared to periods in which the U.S. dollar is weaker. While we use foreign currency hedging contracts to
mitigate some foreign currency exchange risk, these activities are limited in the protection that they provide us and can
themselves result in losses.
Cash Flow Hedging Activities. We hedge a portion of our foreign currency risk related to forecasted foreign currency-
denominated sales and expense transactions by purchasing foreign currency forward contracts that generally have maturities of
18 months or less. These transactions are designated and qualify as cash flow hedges. Our hedging programs are designed to
reduce, but do not entirely eliminate, the impact of currency exchange rate movements in net revenue and research and
development expenses.
Balance Sheet Hedging Activities. We use foreign currency forward contracts to mitigate foreign currency exchange risk
associated with foreign currency-denominated monetary assets and liabilities, primarily intercompany receivables and payables.
These foreign currency forward contracts generally have a contractual term of three months or less and are transacted near
month-end.
We believe the counterparties to our foreign currency forward contracts are creditworthy multinational commercial banks.
While we believe the risk of counterparty nonperformance is not material, a sustained decline in the financial stability of
financial institutions as a result of disruption in the financial markets could affect our ability to secure creditworthy
counterparties for our foreign currency hedging programs.
Notwithstanding our efforts to mitigate some foreign currency exchange risks, there can be no assurance that our hedging
activities will adequately protect us against the risks associated with foreign currency fluctuations. As of March 31, 2023, a
hypothetical adverse foreign currency exchange rate movement of 10 percent or 20 percent would have resulted in potential
declines in the fair value on our foreign currency forward contracts used in cash flow hedging of $262 million or $523 million,
respectively. As of March 31, 2023, a hypothetical adverse foreign currency exchange rate movement of 10 percent or 20
percent would have resulted in potential losses in the Consolidated Statements of Operations on our foreign currency forward
contracts used in balance sheet hedging of $100 million or $199 million, respectively. This sensitivity analysis assumes an
adverse shift of all foreign currency exchange rates; however, all foreign currency exchange rates do not always move in the
same manner and actual results may differ materially. See Note 5 — Derivative Financial Instruments to the Consolidated
Financial Statements in this Form 10-K as it relates to our derivative financial instruments, which is incorporated by reference
into this Item 7A.
34
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily to our short-term investment portfolio. We manage
our interest rate risk by maintaining an investment portfolio generally consisting of debt instruments of high credit quality and
relatively short maturities. However, because short-term investments mature relatively quickly and, if reinvested, are invested at
the then-current market rates, interest income on a portfolio consisting of short-term investments is subject to market
fluctuations to a greater extent than a portfolio of longer term investments. Additionally, the contractual terms of the
investments do not permit the issuer to call, prepay or otherwise settle the investments at prices less than the stated par value.
Our investments are held for purposes other than trading. We do not use derivative financial instruments in our short-term
investment portfolio.
As of March 31, 2023, our short-term investments were classified as available-for-sale securities and, consequently, were
recorded at fair value with changes in fair value, including unrealized gains and unrealized losses not related to credit losses,
reported as a separate component of accumulated other comprehensive income (loss), net of tax, in stockholders’ equity.
Notwithstanding our efforts to manage interest rate risks, there can be no assurance that we will be adequately protected against
risks associated with interest rate fluctuations. Changes in interest rates affect the fair value of our short-term investment
portfolio. To provide a meaningful assessment of the interest rate risk associated with our short-term investment portfolio, we
performed a sensitivity analysis to determine the impact a change in interest rates would have on the value of the portfolio
assuming a 150 basis point parallel shift in the yield curve. As of March 31, 2023, a hypothetical 150 basis point increase in
interest rates would have resulted in a $3 million, or 1% decrease in the fair market value of our short-term investments.
35
Item 8:
Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Consolidated Financial Statements of Electronic Arts Inc. and Subsidiaries:
Consolidated Balance Sheets as of March 31, 2023 and 2022
Consolidated Statements of Operations for the Years Ended March 31, 2023, 2022 and 2021
Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2023, 2022 and 2021
Consolidated Statements of Stockholders’ Equity for the Years Ended March 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the Years Ended March 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (KPMG LLP, Santa Clara, CA, Auditor Firm ID: 185)
Page
37
38
39
40
41
42
82
36
March 31, 2023
March 31, 2022
2,424 $
343
684
518
3,969
549
5,380
618
2,462
481
13,459 $
99 $
1,285
1,901
3,285
1,880
607
1
393
6,166
—
3
—
7,357
(67)
7,293
13,459 $
2,732
330
650
439
4,151
550
5,387
962
2,243
507
13,800
101
1,388
2,024
3,513
1,878
386
1
397
6,175
—
3
—
7,607
15
7,625
13,800
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except par value data)
ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
Receivables, net
Other current assets
Total current assets
Property and equipment, net
Goodwill
Acquisition-related intangibles, net
Deferred income taxes, net
Other assets
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued and other current liabilities
Deferred net revenue (online-enabled games)
Total current liabilities
Senior notes, net
Income tax obligations
Deferred income taxes, net
Other liabilities
Total liabilities
Commitments and contingencies (See Note 14)
Stockholders’ equity:
$
$
$
Preferred stock, $0.01 par value. 10 shares authorized
Common stock, $0.01 par value. 1,000 shares authorized; 273 and 280 shares
issued and outstanding, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Total stockholders’ equity
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
See accompanying Notes to Consolidated Financial Statements.
37
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Net revenue
Cost of revenue
Gross profit
Operating expenses:
Research and development
Marketing and sales
General and administrative
Amortization and impairment of intangibles
Restructuring (See Note 8)
Total operating expenses
Operating income
Interest and other income (expense), net
Income before provision for income taxes
Provision for income taxes
Net income
Earnings per share:
Basic
Diluted
Number of shares used in computation:
Basic
Diluted
See accompanying Notes to Consolidated Financial Statements.
$
$
$
$
Year Ended March 31,
2023
2022
2021
7,426 $
1,792
5,634
2,328
978
727
158
111
4,302
1,332
(6)
1,326
524
802 $
2.90 $
2.88 $
277
278
6,991 $
1,859
5,132
2,186
961
673
183
—
4,003
1,129
(48)
1,081
292
789 $
2.78 $
2.76 $
284
286
5,629
1,494
4,135
1,778
689
592
30
—
3,089
1,046
(29)
1,017
180
837
2.90
2.87
289
292
38
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
Net income
Other comprehensive income (loss), net of tax:
Net gains (losses) on available-for-sale securities
Net gains (losses) on derivative instruments
Foreign currency translation adjustments
Total other comprehensive income (loss), net of tax
Year Ended March 31,
2023
2022
2021
$
802 $
789 $
2
(34)
(50)
(82)
(3)
76
(8)
65
Total comprehensive income
$
720 $
854 $
837
4
(68)
64
—
837
See accompanying Notes to Consolidated Financial Statements.
39
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except share data in thousands)
Common Stock
Shares
Amount
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
Balances as of March 31, 2020
288,413 $
3 $
— $
7,508 $
(50) $
7,461
Total comprehensive income (loss)
Stock-based compensation
Issuance of common stock
Repurchase and retirement of common
stock
Cash dividends declared ($0.34 per
common share)
—
—
3,685
(5,633)
—
—
—
—
—
—
—
435
(66)
(369)
—
837
—
—
(360)
(98)
—
—
—
—
—
837
435
(66)
(729)
(98)
Balances as of March 31, 2021
286,465 $
3 $
— $
7,887 $
(50) $
7,840
Total comprehensive income (loss)
Stock-based compensation
Awards assumed upon acquisition
Issuance of common stock
Repurchase and retirement of common
stock
Cash dividends declared ($0.68 per
common share)
—
—
—
3,108
(9,522)
—
—
—
—
—
—
—
—
528
23
(127)
(424)
—
789
—
—
—
(876)
(193)
65
—
—
—
—
—
854
528
23
(127)
(1,300)
(193)
Balances as of March 31, 2022
280,051 $
3 $
— $
7,607 $
15 $
7,625
Total comprehensive income (loss)
Stock-based compensation
Issuance of common stock
Repurchase and retirement of common
stock
Cash dividends declared ($0.76 per
common share)
—
—
3,311
(10,448)
—
—
—
—
—
—
—
548
(95)
(453)
—
802
—
—
(842)
(210)
(82)
—
—
—
—
720
548
(95)
(1,295)
(210)
Balances as of March 31, 2023
272,914 $
3 $
— $
7,357 $
(67) $
7,293
See accompanying Notes to Consolidated Financial Statements.
40
Year Ended March 31,
2023
2022
2021
$
802 $
789 $
837
536
548
(34)
(103)
10
134
(221)
(122)
1,550
(207)
395
(405)
—
(217)
—
—
80
(210)
(175)
(1,295)
(1,600)
(41)
(308)
2,732
2,424 $
583 $
56
486
528
(77)
(157)
(7)
169
(329)
497
1,899
(188)
1,329
(554)
(3,391)
(2,804)
—
—
77
(193)
(204)
(1,300)
(1,620)
(3)
(2,528)
5,260
2,732 $
629 $
56 $
(3) $
19 $
181
435
(41)
(70)
18
136
(143)
581
1,934
(124)
3,686
(2,828)
(1,239)
(505)
1,478
(600)
86
(98)
(152)
(729)
(15)
78
1,492
3,768
5,260
340
40
17
ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, accretion and impairment
Stock-based compensation
Change in assets and liabilities:
Receivables, net
Other assets
Accounts payable
Accrued and other liabilities
Deferred income taxes, net
Deferred net revenue (online-enabled games)
Net cash provided by operating activities
INVESTING ACTIVITIES
Capital expenditures
Proceeds from maturities and sales of short-term investments
Purchase of short-term investments
Acquisitions, net of cash acquired
Net cash used in investing activities
FINANCING ACTIVITIES
Proceeds from issuance of senior notes, net of issuance costs
Payment of senior notes
Proceeds from issuance of common stock
Cash dividends paid
Cash paid to taxing authorities for shares withheld from employees
Repurchase and retirement of common stock
Net cash used in financing activities
Effect of foreign exchange on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Beginning cash and cash equivalents
Ending cash and cash equivalents
Supplemental cash flow information:
Cash paid during the year for income taxes, net
Cash paid during the year for interest
Non-cash investing activities:
Change in accrued capital expenditures
$
$
$
See accompanying Notes to Consolidated Financial Statements.
41
ELECTRONIC ARTS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content
and services that can be experienced on game consoles, PCs, mobile phones and tablets. At our core is a portfolio of intellectual
property from which we create innovative games and experiences that deliver high-quality entertainment and drive engagement
across our network of hundreds of millions of unique active accounts. Our portfolio includes brands that we either wholly own
(such as Apex Legends, Battlefield, and The Sims) or license from others (such as Madden NFL, Star Wars, and the 300+
licenses within our global football ecosystem). Through our live services offerings, we offer our players high-quality
experiences designed to provide value to players, and extend and enhance gameplay. These live services include extra content,
subscription offerings and other revenue generated in addition to the sale of our base games. We are focusing on building
games and experiences that grow the global online communities around our key franchises; reaching more players through
connecting interactive storytelling to key intellectual property; and building re-occurring revenue from our annualized sports
franchises, our console, PC and mobile catalog titles, and our live services.
Consolidation
The accompanying Consolidated Financial Statements include the accounts of Electronic Arts Inc. and its wholly-owned
subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.
Fiscal Year
Our fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations for
the fiscal year ended March 31, 2023 contained 52 weeks and ended on April 1, 2023. Our results of operations for the fiscal
years ended March 31, 2022 and 2021 contained 52 and 53 weeks and ended on April 2, 2022 and April 3, 2021, respectively.
For simplicity of disclosure, all fiscal periods are referred to as ending on a calendar month end.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United
States (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in our consolidated
financial statements and the accompanying notes. Such estimates include offering periods for deferred net revenue, sales returns
and allowances, provisions for doubtful accounts, accrued liabilities, relative stand-alone selling price for identified
performance obligations in our revenue transactions, losses on royalty commitments, estimates regarding the recoverability of
prepaid royalties, inventories, long-lived assets, discount rates used in the measurement and recognition of lease liabilities,
assets acquired and liabilities assumed in business combinations, certain estimates related to the measurement and recognition
of costs resulting from our stock-based payment awards, unrecognized tax benefits, deferred income tax assets and associated
valuation allowances, as well as estimates used in our goodwill, intangibles and short-term investment impairment tests. These
estimates require us to make judgments, involve analysis of historical and future trends, can require extended periods of time to
resolve, and are subject to change from period to period. In all cases, actual results could differ materially from our estimates.
42
Recently Adopted Accounting Standards
In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Assets and Contract
Liabilities from Contracts with Customers (Topic 805). The amendments in this update require that an acquirer recognize and
measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. For business
combinations prior to fiscal year 2023, we recorded deferred net revenue related to contracts from acquired entities at fair value
on the date of acquisition. As a result, we did not recognize certain revenues related to these contracts that the acquired entities
would have otherwise recorded as an independent entity. We adopted ASU 2021-08 in the fourth quarter of fiscal year 2023,
and the amendments apply retrospectively to all business combinations with an acquisition date in the fiscal year of adoption.
The adoption did not have an impact on our Consolidated Financial Statements and related disclosures, since we did not have
any acquisitions in fiscal year 2023.
In November 2021, the FASB issued ASU 2021-10, Disclosures by Business Entities about Government Assistance (Topic
832). The amendments in this update establish Topic 832 and require additional disclosures regarding government grants and
money contributions when entities accounted for transactions with a government by analogizing to a grant or contribution
accounting model. We adopted ASU 2021-10 in the first quarter of fiscal year 2023 and elected to apply the amendments
prospectively to all transactions within the scope of the amendment that are reflected in the financial statements at the date of
adoption. The adoption did not have a material impact on our Consolidated Financial Statements and related disclosures.
43
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash, Cash Equivalents, and Short-Term Investments
Cash equivalents consist of highly liquid investments with insignificant interest rate risk and original or remaining maturities of
three months or less at the time of purchase.
Short-term investments consist of debt securities with original or remaining maturities of greater than three months at the time
of purchase and less than a year, and are accounted for as available-for-sale securities and are recorded at fair value. Cash, cash
equivalents and short-term investments are available for use in current operations or other activities such as capital
expenditures, business combinations and share repurchases.
Unrealized gains and losses on our short-term investments are recorded as a component of accumulated other comprehensive
income (loss) in stockholders’ equity, net of tax, until either (1) the security is sold, (2) the security has matured, (3) we
determine that the fair value of the security has declined below its adjusted cost basis and the decline is due to an expected
credit loss, or (4) we intend to, or more likely than not would be required to, sell a security in an unrealized loss position before
the recovery of its amortized cost basis. Realized gains and losses on our short-term investments are calculated based on the
specific identification method and are reclassified from accumulated other comprehensive income (loss) to interest and other
income (expense), net. Determining whether a decline in fair value is due to an expected credit loss requires management
judgment based on the specific facts and circumstances of each security. The ultimate value realized on these securities is
subject to market price volatility until they are sold.
Our short-term investments are evaluated for allowances and impairment quarterly. For investments in an unrealized loss
position, we consider various factors in determining whether we should recognize an allowance for expected credit losses or an
impairment charge, including the credit quality of the issuer, changes to the rating of the security by rating agencies, the extent
to which fair value is less than amortized cost, reason for the decline in value and potential recovery period, the financial
condition and near-term prospects of the investees, our intent to sell and ability to hold the investment for a period of time
sufficient to allow for any anticipated recovery in market value, and any contractual terms impacting the prepayment or
settlement process, among other factors. We recognize an allowance for credit losses, up to the amount of unrealized loss when
appropriate, and write down the amortized cost basis of the investment if we intend to, or it is more likely than not we will be
required to, sell the investment before the recovery of its amortized cost basis. Allowances for credit losses and write-downs are
recognized in our Consolidated Statements of Operations, and unrealized losses not related to credit losses are recognized in
other comprehensive income (loss). Based on our evaluation, we did not recognize an allowance for credit losses, nor did we
recognize any impairments, as of March 31, 2023 and 2022.
Property and Equipment, Net
Property and equipment, net, are stated at cost. Depreciation is calculated using the straight-line method over the following
useful lives:
Buildings
Computer equipment and software
Equipment, furniture and fixtures, and other
Leasehold improvements
20 to 25 years
2 to 6 years
3 to 5 years
Lesser of the lease term or the estimated useful lives of the
improvements, generally 1 to 15 years
We capitalize costs associated with internal-use software development once a project has reached the application development
stage. Such capitalized costs include external direct costs utilized in developing or obtaining the software, and payroll and
payroll-related expenses for employees who are directly associated with the development of the software. Capitalization of such
costs begins when the preliminary project stage is complete and ceases at the point in which the project is substantially
complete and is ready for its intended purpose. Once internal-use software is ready for its intended use, the assets are
depreciated on a straight-line basis over each asset’s estimated useful life, which is generally three years. We also capitalize
costs associated with the purchase of possessable internal-use software licenses. The net book value of capitalized costs
associated with internal-use software was $90 million and $86 million as of March 31, 2023 and 2022, respectively.
44
Acquisition-Related Intangibles and Other Long-Lived Assets
We recognize acquisition-related intangible assets, such as acquired developed and core technology, in connection with
business combinations. We amortize the cost of acquisition-related intangible assets that have finite useful lives generally on a
straight-line basis over the lesser of their estimated useful lives or the agreement terms, currently from two to seven years. We
evaluate acquisition-related intangibles and other long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of
the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset group. This includes
assumptions about future prospects for the business that the asset relates to and typically involves computations of the estimated
future cash flows to be generated by these businesses. Based on these judgments and assumptions, we determine whether we
need to take an impairment charge to reduce the value of the asset stated on our Consolidated Balance Sheets to reflect its
estimated fair value. When we consider such assets to be impaired, the amount of impairment we recognize is measured by the
amount by which the carrying amount of the asset exceeds its fair value.
Goodwill Impairment
In assessing impairment on our goodwill, we first analyze qualitative factors to determine whether it is more likely than not that
the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a
goodwill impairment test. The qualitative factors we assess include long-term prospects of our performance, share price trends
and market capitalization, and Company specific events. If we conclude it is more likely than not that the fair value of a
reporting unit exceeds its carrying amount, we do not need to perform an impairment test. If based on that assessment, we
believe it is more likely than not that the fair value of the reporting unit is less than its carrying value we will measure goodwill
for impairment by applying fair value-based tests at the reporting unit level. Reporting units are determined by the components
of operating segments that constitute a business for which (1) discrete financial information is available, (2) segment
management regularly reviews the operating results of that component, and (3) whether the component has dissimilar economic
characteristics to other components. As of March 31, 2023, we have only one reportable segment, which represents our only
operating segment.
Revenue Recognition
We derive revenue principally from sales of our games, and related extra content and services that can be experienced on game
consoles, PCs, mobile phones and tablets. Our product and service offerings include, but are not limited to, the following:
•
•
•
•
•
full games with both online and offline functionality (“Games with Services”), which generally includes (1) the initial
game delivered digitally or via physical disc at the time of sale and typically provide access to offline core game
content (“software license”); (2) updates on a when-and-if-available basis, such as software patches or updates, and/or
additional free content to be delivered in the future (“future update rights”); and (3) a hosted connection for online
playability (“online hosting”);
full games with online-only functionality which require an Internet connection to access all gameplay and functionality
(“Online-Hosted Service Games”);
extra content related to Games with Services and Online-Hosted Service Games which provides access to additional
in-game content;
subscriptions, such as EA Play and EA Play Pro, that generally offer access to a selection of full games, in-game
content, online services and other benefits typically for a recurring monthly or annual fee; and
licensing to third parties to distribute and host our games and content.
We evaluate and recognize revenue by:
•
•
•
•
•
identifying the contract(s) with the customer;
identifying the performance obligations in the contract;
determining the transaction price;
allocating the transaction price to performance obligations in the contract; and
recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a
customer (i.e., “transfer of control”).
45
Certain of our full game and/or extra content are sold to resellers with a contingency that the full game and/or extra content
cannot be resold prior to a specific date (“Street Date Contingency”). We recognize revenue for transactions that have a Street
Date Contingency when the Street Date Contingency is removed and the full game and/or extra content can be resold by the
reseller. For digital full game and/or extra content downloads sold to customers, we recognize revenue when the full game and/
or extra content is made available for download to the customer.
Online-Enabled Games
Games with Services. Our sales of Games with Services are evaluated to determine whether the software license, future update
rights and the online hosting are distinct and separable. Sales of Games with Services are generally determined to have three
distinct performance obligations: software license, future update rights, and the online hosting.
Since we do not sell the performance obligations on a stand-alone basis, we consider market conditions and other observable
inputs to estimate the stand-alone selling price for each performance obligation. For Games with Services, generally 75 percent
of the sales price is allocated to the software license performance obligation and recognized at a point in time when control of
the license has been transferred to the customer. The remaining 25 percent is allocated to the future update rights and the online
hosting performance obligations and recognized ratably as the service is provided (over the Estimated Offering Period).
Online-Hosted Service Games. Sales of our Online-Hosted Service Games are determined to have one distinct performance
obligation: the online hosting. We recognize revenue from these arrangements as the service is provided.
Extra Content. Revenue received from sales of downloadable content are derived primarily from the sale of virtual currencies
and digital in-game content that are designed to extend and enhance players’ game experience. Sales of extra content are
accounted for in a manner consistent with the treatment for our Games with Services and Online-Hosted Service Games as
discussed above, depending upon whether or not the extra content has offline functionality. That is, if the extra content has
offline functionality, then the extra content is accounted for similarly to Games with Services (generally determined to have
three distinct performance obligations: software license, future update rights, and the online hosting). If the extra content does
not have offline functionality, then the extra content is determined to have one distinct performance obligation: the online-
hosted service.
Subscriptions
Sales of our subscriptions are deemed to be one performance obligation and we recognize revenue from these arrangements
ratably over the subscription term as the performance obligation is satisfied.
Licensing Revenue
We utilize third-party licensees to distribute and host our games and content in accordance with license agreements, for which
the licensees typically pay us a fixed minimum guarantee and/or sales-based royalties. These arrangements typically include
multiple performance obligations, such as a time-based license of software and future update rights. We recognize as revenue a
portion of the minimum guarantee when we transfer control of the license of software (generally upon commercial launch) and
the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Any sales-
based royalties are generally recognized as the related sales occur by the licensee.
Significant Judgments around Revenue Arrangements
Identifying performance obligations. Performance obligations promised in a contract are identified based on the goods and
services that will be transferred to the customer that are both capable of being distinct, (i.e., the customer can benefit from the
goods or services either on its own or together with other resources that are readily available), and are distinct in the context of
the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes
multiple promises, we must apply judgment to determine whether those promises are separate and distinct performance
obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation.
Determining the transaction price. The transaction price is determined based on the consideration that we will be entitled to
receive in exchange for transferring our goods and services to the customer. Determining the transaction price often requires
judgment, based on an assessment of contractual terms and business practices. It further includes review of variable
consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. In
addition, the transaction price does not include an estimate of the variable consideration related to sales-based royalties. Sales-
based royalties are recognized as the sales occur.
46
Allocating the transaction price. Allocating the transaction price requires that we determine an estimate of the relative stand-
alone selling price for each distinct performance obligation. Determining the relative stand-alone selling price is inherently
subjective, especially in situations where we do not sell the performance obligation on a stand-alone basis (which occurs in the
majority of our transactions). In those situations, we determine the relative stand-alone selling price based on various
observable inputs using all information that is reasonably available. Examples of observable inputs and information include:
historical internal pricing data, cost plus margin analysis, pre-release versus post-release costs, and pricing data from
competitors to the extent the data is available. The results of our analysis resulted in a specific percentage of the transaction
price being allocated to each performance obligation.
Determining the Estimated Offering Period. The offering period is the period in which we offer to provide the future update
rights and/or online hosting for the game and related extra content sold. Because the offering period is not an explicitly defined
period, we must make an estimate of the offering period for the service-related performance obligations (i.e., future update
rights and online hosting). Determining the Estimated Offering Period is inherently subjective and is subject to regular revision.
Generally, we consider the average period of time customers are online when estimating the offering period. We also consider
the estimated period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the
customer (i.e., time in channel). Based on these two factors, we then consider the method of distribution. For example, games
and extra content sold at retail would have a composite offering period equal to the online gameplay period plus time in channel
as opposed to digitally-distributed games and extra content which are delivered immediately via digital download and therefore,
the offering period is estimated to be only the online gameplay period.
Additionally, we consider results from prior analyses, known and expected online gameplay trends, as well as disclosed service
periods for competitors’ games in determining the Estimated Offering Period for future sales. We believe this provides a
reasonable depiction of the transfer of future update rights and online hosting to our customers, as it is the best representation of
the time period during which our games and extra content are experienced. We recognize revenue for future update rights and
online hosting performance obligations ratably on a straight-line basis over this period as there is a consistent pattern of
delivery for these performance obligations. Revenue for service-related performance obligations for games and extra content
sold through retail is recognized over an estimated ten-month period beginning in the month of sale, revenue for service-related
performance obligations for digitally-distributed games and extra content is recognized over an estimated eight-month period
beginning in the month of sale.
During the three months ended September 30, 2021, we completed our annual evaluation of the Estimated Offering Period and
noted consumers are playing certain of our Online Hosted Service Games, such as PC and console free-to-play games, for
longer periods of time than in previous years. This extended consumer gameplay is due to players engaging with services we
provide that are designed to enhance and extend gameplay, and as such, concluded that the Estimated Offering Period for such
games should be lengthened. As a result, for all new sales after July 1, 2021, the revenue that we recognize for service-related
performance obligations related to our PC and console free-to-play games is recognized generally over a twelve-month period.
During the fiscal year ended March 31, 2023, this increase to our Estimated Offering Period resulted in increases in net revenue
of $103 million, net income of $79 million, and diluted earnings per share of $0.28. During the fiscal year ended March 31,
2022, this increase to our Estimated Offering Period resulted in decreases in net revenue of $131 million, net income of
$100 million, and diluted earnings per share of $0.35.
Deferred Net Revenue
Because the majority of our sales transactions include future update rights and online hosting performance obligations, which
are subject to deferral and recognized over the Estimated Offering Period, our deferred net revenue balance is material. This
balance increases from period to period by revenue being deferred for current sales with these service obligations and is reduced
by the recognition of revenue from prior sales that were previously deferred. Generally, revenue is recognized as the services
are provided.
Principal Agent Considerations
We evaluate sales to end customers of our full games and related content via third-party storefronts, including digital storefronts
such as Microsoft’s Xbox Store, Sony’s PlayStation Store, Apple App Store, and Google Play Store, in order to determine
whether or not we are acting as the principal in the sale to the end customer, which we consider in determining if revenue
should be reported gross or net of fees retained by the third-party storefront. An entity is the principal if it controls a good or
service before it is transferred to the end customer. Key indicators that we evaluate in determining gross versus net treatment
include but are not limited to the following:
•
the underlying contract terms and conditions between the various parties to the transaction;
47
•
•
•
which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end
customer;
which party has discretion in establishing the price for the specified good or service; and
which party has inventory risk before the specified good or service has been transferred to the end customer.
Based on an evaluation of the above indicators, except as discussed below, we have determined that generally the third party is
considered the principal to end customers for the sale of our full games and related content. We therefore report revenue related
to these arrangements net of the fees retained by the storefront. However, for sales arrangements via Apple App Store and
Google Play Store, EA is considered the principal to the end customer and thus, we report revenue on a gross basis and mobile
platform fees are reported within cost of revenue.
Payment Terms
Substantially all of our transactions have payment terms, whether customary or on an extended basis, of less than one year;
therefore, we generally do not adjust the transaction price for the effects of any potential financing components that may exist.
Sales and Value-Added Taxes
Revenue is recorded net of taxes assessed by governmental authorities that are imposed at the time of the specific revenue-
producing transaction between us and our customer, such as sales and value-added taxes.
Sales Returns and Price Protection Reserves
Sales returns and price protection are considered variable consideration under ASC 606. We reduce revenue for estimated
future returns and price protection which may occur with our distributors and retailers (“channel partners”). Price protection
represents our practice to provide our channel partners with a credit allowance to lower their wholesale price on a particular
game unit that they have not resold to customers. The amount of the price protection for permanent markdowns is the difference
between the old wholesale price and the new reduced wholesale price. Credits are also given for short-term promotions that
temporarily reduce the wholesale price. In certain countries we also have a practice for allowing channel partners to return older
products in the channel in exchange for a credit allowance.
When evaluating the adequacy of sales returns and price protection reserves, we analyze the following: historical credit
allowances, current sell-through of our channel partners’ inventory of our products, current trends in retail and the video game
industry, changes in customer demand, acceptance of our products, and other related factors. In addition, we monitor the
volume of sales to our channel partners and their inventories, as substantial overstocking in the distribution channel could result
in high returns or higher price protection in subsequent periods.
Taxes Collected from Customers and Remitted to Governmental Authorities
Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between
us and our customers are presented on a net basis in our Consolidated Statements of Operations.
Concentration of Credit Risk and Significant Customers
We extend credit to various customers. Collection of trade receivables may be affected by changes in economic or other
industry conditions and may, accordingly, impact our overall credit risk. Although we generally do not require collateral, we
perform ongoing credit evaluations of our customers and maintain reserves for potential credit losses. Invoices are aged based
on contractual terms with our customers. The provision for doubtful accounts is recorded as a charge to general and
administrative expense when a potential loss is identified. Losses are written off against the allowance when the receivable is
determined to be uncollectible. At March 31, 2023, we had two customers who accounted for approximately 32 percent and 30
percent of our consolidated gross receivables, respectively. At March 31, 2022, we had two customers who accounted for
approximately 32 percent and 29 percent of our consolidated gross receivables, respectively.
A majority of our sales are made via digital resellers, channel and platform partners. During the fiscal years 2023, 2022, and
2021, approximately 81 percent, 77 percent, and 78 percent, respectively, of our net revenue was derived from our top ten
customers and/or platform partners.
48
Currently, a majority of our revenue is derived through sales of products and services playable on hardware consoles from Sony
and Microsoft. For the fiscal years ended March 31, 2023, 2022, and 2021, our net revenue for products and services on Sony’s
PlayStation 3, 4 and 5, and Microsoft’s Xbox 360, One and Series X consoles (combined across all six platforms) was
approximately 58 percent, 60 percent, and 64 percent, respectively. These platform partners have significant influence over the
products and services that we offer on their platforms.
Short-term investments are placed with high quality financial institutions or in short-duration, investment-grade securities. We
limit the amount of credit exposure in any one financial institution or type of investment instrument.
Royalties and Licenses
Royalty-based obligations with content licensors and distribution affiliates are either paid in advance and capitalized as prepaid
royalties or are accrued as incurred and subsequently paid. These royalty-based obligations are generally expensed to cost of
revenue at the greater of the contractual rate or an effective royalty rate based on the total projected net revenue for contracts
with guaranteed minimums. Prepayments made to thinly capitalized independent software developers and co-publishing
affiliates are generally made in connection with the development of a particular product, and therefore, we are subject to
development risk prior to the release of the product. Accordingly, payments that are due prior to completion of a product are
generally expensed to research and development over the development period as the services are incurred. Payments due after
completion of the product (primarily royalty-based in nature) are generally expensed as cost of revenue.
Our contracts with some licensors include minimum guaranteed royalty payments, which are initially recorded as an asset and
as a liability at the contractual amount when no performance remains with the licensor. When performance remains with the
licensor, we record guarantee payments as an asset when actually paid and as a liability when incurred, rather than recording the
asset and liability upon execution of the contract.
Each quarter, we also evaluate the expected future realization of our royalty-based assets, as well as any unrecognized
minimum commitments not yet paid to determine amounts we deem unlikely to be realized through future revenue. Any
impairments or losses determined before the launch of a product are generally charged to research and development expense.
Impairments or losses determined post-launch are charged to cost of revenue. We evaluate long-lived royalty-based assets for
impairment using undiscounted cash flows when impairment indicators exist. If an impairment exists, then the related assets are
written down to fair value. Unrecognized minimum royalty-based commitments are accounted for as executory contracts, and
therefore, any losses on these commitments are recognized when the underlying intellectual property is abandoned (i.e., cease
use) or the contractual rights to use the intellectual property are terminated.
Advertising Costs
We generally expense advertising costs as incurred, except for production costs associated with media campaigns, which are
recognized as prepaid assets (to the extent paid in advance) and expensed at the first run of the advertisement. Cooperative
advertising costs are recognized when incurred and are classified as marketing and sales expense if there is a separate
identifiable benefit for which we can reasonably estimate the fair value of the benefit identified. Otherwise, they are classified
as a reduction of revenue and are generally accrued when revenue is recognized. We then reimburse the channel partner when
qualifying claims are submitted.
We are also reimbursed by our vendors for certain advertising costs incurred by us that benefit our vendors. Such amounts are
recognized as a reduction of marketing and sales expense if the advertising (1) is specific to the vendor, (2) represents an
identifiable benefit to us, and (3) represents an incremental cost to us. Otherwise, vendor reimbursements are recognized as a
reduction of the cost incurred with the same vendor. Vendor reimbursements of advertising costs of $37 million, $37 million,
and $22 million reduced marketing and sales expense for the fiscal years ended March 31, 2023, 2022, and 2021, respectively.
For the fiscal years ended March 31, 2023, 2022, and 2021, advertising expense, net of vendor reimbursements, totaled
approximately $348 million, $396 million, and $222 million, respectively.
Software Development Costs
Research and development costs, which consist primarily of software development costs, are expensed as incurred. We are
required to capitalize software development costs incurred for computer software to be sold, leased or otherwise marketed after
technological feasibility of the software is established or for development costs that have alternative future uses. Under our
current practice of developing new games, the technological feasibility of the underlying software is not established until
substantially all product development and testing is complete, which generally includes the development of a working model.
Software development costs that have been capitalized to date have been insignificant.
49
Foreign Currency Translation
Generally, the functional currency for our foreign operating subsidiaries is its local currency. Assets and liabilities of foreign
operations are translated into U.S. dollars using month-end exchange rates, and revenue and expenses are translated into U.S.
dollars using average exchange rates. The effects of foreign currency translation adjustments are included as a component of
accumulated other comprehensive income (loss) in stockholders’ equity.
Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in
currencies other than the functional currency. Net gains (losses) on foreign currency transactions of $31 million, $(22) million,
and $9 million for the fiscal years ended March 31, 2023, 2022, and 2021, respectively, are included in interest and other
income (expense), net, in our Consolidated Statements of Operations. These net gains (losses) on foreign currency transactions
are partially offset by net gains (losses) on our foreign currency forward contracts of $(29) million, $21 million, and $(19)
million for the fiscal years ended March 31, 2023, 2022, and 2021, respectively. See Note 5 for additional information on our
foreign currency forward contracts.
Income Taxes
We recognize deferred tax assets and liabilities for both the expected impact of differences between the financial statement
amount and the tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax losses and tax
credit carryforwards. We do not recognize any deferred taxes related to the U.S. taxes on foreign earnings as we recognize these
taxes as a period cost.
Every quarter, we perform a realizability analysis to evaluate whether it is more likely than not that all or a portion of our
deferred tax assets will not be realized. Our Swiss deferred tax asset realizability analysis relies upon future Swiss taxable
income as the primary source of taxable income but considers all available sources of Swiss income based on the positive and
negative evidence. We give more weight to evidence that can be objectively verified. However, estimating future Swiss taxable
income requires judgment, specifically related to assumptions about expected growth rates of future Swiss taxable income,
which are based primarily on third party market and industry growth data. Actual results that differ materially from those
estimates could have a material impact on our valuation allowance assessment. Although objectively verifiable, Swiss interest
rates have an impact on the valuation allowance and are based on published Swiss guidance. Any significant changes to such
interest rates could result in a material impact to the valuation allowance. Switzerland has a seven-year carryforward period and
does not permit the carry back of losses. Actions we take in connection with acquisitions could also impact the utilization of our
Swiss deferred tax asset.
Share Repurchases
Shares of our common stock repurchased pursuant to our repurchase program, if any, are retired. The purchase price of such
repurchased shares of common stock is recorded as a reduction to additional paid-in capital. If the balance in additional paid-in
capital is exhausted, the excess is recorded as a reduction to retained earnings.
Restructuring
We generally recognize employee severance costs when payments are probable and amounts are estimable or when notification
occurs, depending on the region in which an employee works. Costs related to non-lease contracts without future benefit or
contract termination are recognized at the earlier of the contract termination or the cease-use dates. Other exit-related costs are
recognized as incurred.
50
(3) FAIR VALUE MEASUREMENTS
There are various valuation techniques used to estimate fair value, the primary one being the price that would be received from
selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
When determining fair value, we consider the principal or most advantageous market in which we would transact and consider
assumptions that market participants would use when pricing the asset or liability. We measure certain financial and
nonfinancial assets and liabilities at fair value on a recurring and nonrecurring basis.
Fair Value Hierarchy
The three levels of inputs that may be used to measure fair value are as follows:
•
•
•
Level 1. Quoted prices in active markets for identical assets or liabilities.
Level 2. Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or
liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-
derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with
observable market data for substantially the full term of the assets or liabilities.
Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of
assets or liabilities.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of March 31, 2023 and 2022, our assets and liabilities that were measured and recorded at fair value on a recurring basis
were as follows (in millions):
Fair Value Measurements at Reporting Date Using
Quoted Prices in
Active Markets
for Identical
Financial
Instruments
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
As of
March 31,
2023
Significant
Unobservable
Inputs
(Level 3)
Balance Sheet Classification
Assets
Bank and time deposits
Money market funds
Available-for-sale securities:
Corporate bonds
U.S. Treasury securities
U.S. agency securities
Commercial paper
Foreign government securities
Asset-backed securities
Certificates of deposit
Foreign currency derivatives
Deferred compensation plan assets (a)
Total assets at fair value
Liabilities
Foreign currency derivatives
Deferred compensation plan liabilities (a)
Total liabilities at fair value
$
$
$
$
56 $
956
113
80
28
66
11
37
14
29
23
56 $
956
— $
—
— Cash equivalents
— Cash equivalents
—
80
—
—
—
—
—
—
23
113
—
28
66
11
37
14
29
—
— Short-term investments
— Short-term investments
—
—
Short-term investments and
cash equivalents
Short-term investments and
cash equivalents
— Short-term investments
— Short-term investments
— Short-term investments
—
Other current assets and other
assets
— Other assets
1,413 $
1,115 $
298 $
—
65 $
24
89 $
— $
24
24 $
65 $
—
65 $
—
Accrued and other current
liabilities and other liabilities
— Other liabilities
—
51
Fair Value Measurements at Reporting Date Using
Quoted Prices in
Active Markets
for Identical
Financial
Instruments
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
As of
March 31,
2022
Significant
Unobservable
Inputs
(Level 3)
Balance Sheet Classification
$
55 $
257
116
104
51
17
38
18
63
21
55 $
257
— $
—
— Cash equivalents
— Cash equivalents
—
104
—
—
—
—
—
21
116
—
51
17
38
18
63
—
—
—
—
Short-term investments and
cash equivalents
Short-term investments and
cash equivalents
Short-term investments and
cash equivalents
— Short-term investments
— Short-term investments
— Short-term investments
— Other current assets and other
assets
— Other assets
740 $
437 $
303 $
—
14 $
22
36 $
— $
22
22 $
14 $
—
14 $
—
Accrued and other current
liabilities and other liabilities
— Other liabilities
—
Assets
Bank and time deposits
Money market funds
Available-for-sale securities:
Corporate bonds
U.S. Treasury securities
Commercial paper
Foreign government securities
Asset-backed securities
Certificates of deposit
Foreign currency derivatives
Deferred compensation plan assets (a)
Total assets at fair value
Liabilities
Foreign currency derivatives
Deferred compensation plan liabilities (a)
Total liabilities at fair value
$
$
$
(a) The Deferred Compensation Plan consists of various mutual funds. See Note 15 for additional information regarding our
Deferred Compensation Plan.
52
(4) FINANCIAL INSTRUMENTS
Cash and Cash Equivalents
As of March 31, 2023 and 2022, our cash and cash equivalents were $2,424 million and $2,732 million, respectively. Cash
equivalents were valued using quoted market prices or other readily available market information.
Short-Term Investments
Short-term investments consisted of the following as of March 31, 2023 and 2022 (in millions):
As of March 31, 2023
Gross Unrealized
Cost or
Amortized
Cost
Fair
Value
Cost or
Amortized
Cost
Gains
114 $ — $
Losses
(1) $
113 $
Gains
117 $ — $
Losses
As of March 31, 2022
Gross Unrealized
Corporate bonds
$
U.S. Treasury securities
U.S. agency securities
Commercial paper
Foreign government securities
Asset-backed securities
Certificates of deposit
80
25
63
11
37
14
—
—
—
—
—
—
—
—
—
—
—
—
80
25
63
11
37
14
103
—
39
17
38
18
—
—
—
—
—
—
Fair
Value
(1) $
(1)
116
102
—
—
—
—
—
—
39
17
38
18
Short-term investments
$
344 $ — $
(1) $
343 $
332 $ — $
(2) $
330
The following table summarizes the amortized cost and fair value of our short-term investments, classified by stated maturity as
of March 31, 2023 and 2022 (in millions):
Short-term investments
Due within 1 year
Due 1 year through 5 years
Due after 5 years
Short-term investments
As of March 31, 2023
As of March 31, 2022
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
$
$
267 $
266 $
250 $
72
5
72
5
77
5
344 $
343 $
332 $
249
76
5
330
53
(5) DERIVATIVE FINANCIAL INSTRUMENTS
Assets or liabilities associated with our derivative instruments and hedging activities are recorded at fair value in other current
assets/other assets, or accrued and other current liabilities/other liabilities, respectively, on our Consolidated Balance Sheets. As
discussed below, the accounting for gains and losses resulting from changes in fair value depends on the use of the derivative
instrument and whether it is designated and qualifies for hedge accounting.
We transact business in various foreign currencies and have significant international sales and expenses denominated in foreign
currencies, subjecting us to foreign currency risk. We purchase foreign currency forward contracts, generally with maturities of
18 months or less, to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in
certain foreign currencies. Our cash flow risks are primarily related to fluctuations in the Euro, British pound sterling, Canadian
dollar, Swedish krona, Australian dollar, Japanese yen, Chinese yuan, South Korean won and Polish zloty. In addition, we
utilize foreign currency forward contracts to mitigate foreign currency exchange risk associated with foreign-currency-
denominated monetary assets and liabilities, primarily intercompany receivables and payables. The foreign currency forward
contracts not designated as hedging instruments generally have a contractual term of approximately three months or less and are
transacted near month-end. We do not use foreign currency forward contracts for speculative trading purposes.
Cash Flow Hedging Activities
Certain of our forward contracts are designated and qualify as cash flow hedges. To qualify for hedge accounting treatment, all
hedging relationships are formally documented at the inception of the hedges and must be highly effective in offsetting changes
to future cash flows on hedged transactions. The derivative assets or liabilities associated with our hedging activities are
recorded at fair value in other current assets/other assets, or accrued and other current liabilities/other liabilities, respectively, on
our Consolidated Balance Sheets. The gains or losses resulting from changes in the fair value of these hedges is initially
reported, net of tax, as a component of accumulated other comprehensive income (loss) in stockholders’ equity. The gains or
losses resulting from changes in the fair value of these hedges are subsequently reclassified into net revenue or research and
development expenses, as appropriate, in the period when the forecasted transaction is recognized in our Consolidated
Statements of Operations. In the event that the underlying forecasted transactions do not occur, or it becomes remote that they
will occur within the defined hedge period, the gains or losses on the related cash flow hedges are reclassified from
accumulated other comprehensive income (loss) to net revenue or research and development expenses, in our Consolidated
Statements of Operations.
Total gross notional amounts and fair values for currency derivatives with cash flow hedge accounting designation are as
follows (in millions):
As of March 31, 2023
As of March 31, 2022
Notional
Amount
Fair Value
Asset
Liability
Notional
Amount
Fair Value
Asset
Liability
Forward contracts to purchase
Forward contracts to sell
$
$
371 $
2,255 $
2 $
23 $
9 $
46 $
375 $
1,829 $
4 $
52 $
3
6
The effects of cash flow hedge accounting in our Consolidated Statements of Operations for the fiscal years ended March 31,
2023, 2022 and 2021 are as follows (in millions):
2023
Year Ended March 31,
2022
2021
Net revenue
Research and
development
Net revenue
Research and
development
Net revenue
Research and
development
Total amounts presented in
our Consolidated Statements
of Operations in which the
effects of cash flow hedges are
recorded
Gains (losses) on foreign
currency forward contracts
designated as cash flow
hedges
$
7,426 $
2,328 $
6,991 $
2,186 $
5,629 $
1,778
$
185 $
(18) $
(14) $
12 $
(30) $
4
54
Balance Sheet Hedging Activities
Our foreign currency forward contracts that are not designated as hedging instruments are accounted for as derivatives whereby
the fair value of the contracts are reported as other current assets or accrued and other current liabilities on our Consolidated
Balance Sheets, and gains and losses resulting from changes in the fair value are reported in interest and other income
(expense), net, in our Consolidated Statements of Operations. The gains and losses on these foreign currency forward contracts
generally offset the gains and losses in the underlying foreign-currency-denominated monetary assets and liabilities, which are
also reported in interest and other income (expense), net, in our Consolidated Statements of Operations.
Total gross notional amounts and fair values for currency derivatives that are not designated as hedging instruments are
accounted for as follows (in millions):
As of March 31, 2023
As of March 31, 2022
Notional
Amount
Fair Value
Asset
Liability
Notional
Amount
Fair Value
Asset
Liability
Forward contracts to purchase
Forward contracts to sell
$
$
504 $
587 $
4 $
— $
— $
10 $
496 $
400 $
6 $
1 $
—
5
The effect of foreign currency forward contracts not designated as hedging instruments in our Consolidated Statements of
Operations for the fiscal years ended March 31, 2023, 2022 and 2021, was as follows (in millions):
Total amounts presented in our Consolidated Statements of
Operations in which the effects of balance sheet hedges are
recorded
Gains (losses) on foreign currency forward contracts not
designated as hedging instruments
$
$
Year Ended March 31,
2023
2022
2021
Interest and other income (expense), net
(6) $
(48) $
(29) $
21 $
(29)
(19)
55
(6) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in accumulated other comprehensive income (loss) by component, net of tax, for the fiscal years ended March 31,
2023, 2022 and 2021 are as follows (in millions):
Unrealized Net
Gains (Losses) on
Available-for-Sale
Securities
Unrealized Net
Gains (Losses) on
Derivative
Instruments
Foreign Currency
Translation
Adjustments
Total
Balances as of March 31, 2020
Other comprehensive income (loss) before
reclassifications
Amounts reclassified from accumulated other
comprehensive income (loss)
Total other comprehensive income (loss), net of tax
Balances as of March 31, 2021
Other comprehensive income (loss) before
reclassifications
Amounts reclassified from accumulated other
comprehensive income (loss)
Total other comprehensive income (loss), net of tax
Balances as of March 31, 2022
Other comprehensive income (loss) before
reclassifications
Amounts reclassified from accumulated other
comprehensive income (loss)
Total other comprehensive income (loss), net of tax
$
$
$
(4) $
5
(1)
4
— $
(3)
—
(3)
(3) $
1
1
2
Balances as of March 31, 2023
$
(1) $
39 $
(94)
26
(68)
(29) $
74
2
76
47 $
133
(167)
(34)
13 $
(85) $
64
—
64
(21) $
(8)
—
(8)
(29) $
(50)
—
(50)
(79) $
(50)
(25)
25
—
(50)
63
2
65
15
84
(166)
(82)
(67)
The effects on net income of amounts reclassified from accumulated other comprehensive income (loss) for the fiscal years
ended March 31, 2023, 2022 and 2021 were as follows (in millions):
Statement of Operations Classification
(Gains) losses on available-for-sale securities:
Interest and other income (expense), net
Total, net of tax
(Gains) losses on foreign currency forward contracts designated as cash flow hedges
Net revenue
Research and development
Total, net of tax
Amount Reclassified From Accumulated
Other Comprehensive Income (Loss)
Year Ended March 31,
2023
2022
2021
$
1 $
1
— $
—
(185)
18
(167)
14
(12)
2
(1)
(1)
30
(4)
26
Total net (gain) loss reclassified, net of tax
$
(166) $
2 $
25
56
(7) GOODWILL AND ACQUISITION-RELATED INTANGIBLES, NET
The changes in the carrying amount of goodwill for the fiscal year ended March 31, 2023 are as follows (in millions):
Goodwill
Accumulated impairment
Total
As of
March 31, 2022
$
5,755 $
(368)
5,387 $
$
Activity
Effects of Foreign
Currency
Translation
As of
March 31, 2023
— $
—
— $
(7) $
—
(7) $
5,748
(368)
5,380
The changes in the carrying amount of goodwill for the fiscal year ended March 31, 2022 are as follows (in millions):
Goodwill
Accumulated impairment
Total
As of
March 31, 2021
$
3,236 $
(368)
2,868 $
$
Activity
Effects of Foreign
Currency
Translation
As of
March 31, 2022
2,519 $
—
2,519 $
— $
—
— $
5,755
(368)
5,387
Acquisition-related intangibles consisted of the following (in millions):
As of March 31, 2023
As of March 31, 2022
Gross
Carrying
Amount
Accumulated
Amortization
Acquisition-
Related
Intangibles,
Net
Gross
Carrying
Amount
Accumulated
Amortization
Acquisition-
Related
Intangibles,
Net
Finite-lived acquisition-related intangibles
Developed and core technology
$
1,051 $
(754) $
297 $
1,102 $
(643) $
Trade names and trademarks
Registered user base and other intangibles
Total finite-lived acquisition-related
intangibles
596
56
(285)
(50)
311
6
609
56
(212)
(30)
$
1,703 $
(1,089) $
614 $
1,767 $
(885) $
Indefinite-lived acquisition-related intangibles
In-process research and development
Total acquisition-related intangibles, net
$
$
4 $
— $
4 $
80 $
— $
1,707 $
(1,089) $
618 $
1,847 $
(885) $
459
397
26
882
80
962
Amortization of intangibles, including impairments, for the fiscal years ended March 31, 2023, 2022 and 2021 are classified in
the Consolidated Statements of Operations as follows (in millions):
Cost of revenue
Operating expenses
Restructuring
Total
Year Ended March 31,
2023
2022
2021
120 $
133 $
158
66
183
—
344 $
316 $
4
30
—
34
$
$
During fiscal year 2023, we recorded impairment charges of $106 million for acquisition-related intangible assets, of which $66
million was recorded within restructuring, $28 million was recorded within operating expenses, and $12 million was recorded
within cost of revenue. See Note 8 — Restructuring Activities for additional information on the impairment charge related to our
2023 Restructuring Plan.
During fiscal year 2022, we recorded impairment charges of $45 million for acquisition-related intangible assets, of which
$34 million was recorded within operating expenses and $11 million was recorded within cost of revenue. During fiscal year
2021, there were no impairment charges for acquisition-related intangible assets.
57
Acquisition-related intangible assets are generally amortized using the straight-line method over the lesser of their estimated
useful lives or the agreement terms, currently ranging from 2 to 7 years. As of March 31, 2023 and 2022, the weighted-average
remaining useful life for acquisition-related intangible assets was approximately 4.8 and 5.2 years , respectively.
As of March 31, 2023, future amortization of finite-lived acquisition-related intangibles that will be recorded in the
Consolidated Statements of Operations is estimated as follows (in millions):
Fiscal Year Ending March 31,
2024
2025
2026
2027
2028
Thereafter
Total
$
$
150
122
118
99
96
29
614
58
(8) RESTRUCTURING ACTIVITIES
In fiscal year 2023, we announced a restructuring plan (the “2023 Restructuring Plan” or the “Plan”) focused on prioritizing
investments to our growth opportunities and optimizing our real estate portfolio. The Plan includes actions driven by portfolio
rationalization including headcount reductions, in addition to office space reductions. The actions associated with the Plan are
expected to be substantially completed by September 30, 2023.
Under this plan, we estimate that we will incur approximately $170 million to $200 million in charges, consisting primarily of:
•
•
•
•
A $66 million impairment charge related to an acquisition-related in-process research & development intangible asset
as part of our portfolio rationalization activities;
$55 million to $65 million related to employee severance and employee-related costs;
$45 million to $55 million associated with office space reductions; and
$5 million to $10 million of other charges, including contract cancellations.
Restructuring activities as of the fiscal year ended March 31, 2023 was as follows (in millions):
Charges to operations
Charges settled in cash
Non-cash items
Acquisition-
Related
Intangibles
Impairments and
Other Charges (a)
68
$
$
—
(66)
Liability as of March 31, 2023
$
2
$
Workforce (a)
Office Space
Reductions (b)
Total
43 $
(10)
—
33 $
44 $
—
(44)
— $
155
(10)
(110)
35
(a) Charges are recorded within Restructuring in the Consolidated Statement of Operations.
(b) Charges are recorded within General and administrative expenses in the Consolidated Statement of Operations.
The restructuring liability of $35 million as of March 31, 2023, is included in accrued and other current liabilities on the
Consolidated Balance Sheets. See Note 13 — Leases for additional information on our office space reduction activities, and
remaining lease liabilities associated with those activities continue to be recognized and disclosed in that note.
59
(9) ROYALTIES AND LICENSES
Our royalty expenses consist of payments to (1) content licensors, (2) independent software developers, and (3) co-publishing
and distribution affiliates. Content license royalties consist of payments made to celebrities, professional sports organizations,
movie studios and other organizations for our use of their trademarks, copyrights, personal publicity rights, content and/or other
intellectual property. Royalty payments to independent software developers are payments for the development of intellectual
property related to our games. Co-publishing and distribution royalties are payments made to third parties for the delivery of
products.
During fiscal years 2023, 2022 and 2021, we did not recognize any material losses or impairment charges on royalty-based
commitments.
The current and long-term portions of prepaid royalties and minimum guaranteed royalty-related assets, included in other
current assets and other assets, consisted of (in millions):
Other current assets
Other assets
Royalty-related assets
As of March 31,
2023
2022
$
$
105 $
31
136 $
35
28
63
At any given time, depending on the timing of our payments to our co-publishing and/or distribution affiliates, content
licensors, and/or independent software developers, we classify any recognized unpaid royalty amounts due to these parties as
accrued liabilities. The current and long-term portions of accrued royalties, included in accrued and other current liabilities and
other liabilities, consisted of (in millions):
Accrued and other current liabilities
Other liabilities
Royalty-related liabilities
As of March 31,
2023
2022
$
$
208 $
—
208 $
203
3
206
As of March 31, 2023, we were committed to pay approximately $2,011 million to content licensors, independent software
developers, and co-publishing and/or distribution affiliates, but performance remained with the counterparty (i.e., delivery of
the product or content or other factors) and such commitments were therefore not recorded in our Consolidated Financial
Statements. See Note 14 for further information on our developer and licensor commitments.
60
(10) BALANCE SHEET DETAILS
Property and Equipment, Net
Property and equipment, net, as of March 31, 2023 and 2022 consisted of (in millions):
Computer, equipment and software
Buildings
Leasehold improvements
Equipment, furniture and fixtures, and other
Land
Construction in progress
Less: accumulated depreciation
Property and equipment, net
As of March 31,
2023
2022
$
892 $
369
186
92
66
11
1,616
(1,067)
549 $
$
853
375
202
95
66
30
1,621
(1,071)
550
Depreciation expense associated with property and equipment was $193 million, $162 million and $138 million for the fiscal
years ended March 31, 2023, 2022 and 2021, respectively.
Accrued and Other Current Liabilities
Accrued and other current liabilities as of March 31, 2023 and 2022 consisted of (in millions):
Accrued compensation and benefits
Accrued royalties
Deferred net revenue (other)
Operating lease liabilities (See Note 13)
Other accrued expenses
Sales returns and price protection reserves
Accrued and other current liabilities
As of March 31,
2023
2022
$
436 $
208
103
66
382
90
500
203
156
81
304
144
$
1,285 $
1,388
Deferred net revenue (other) includes the deferral of licensing arrangements, subscription revenue, and other revenue for which
revenue recognition criteria has not been met.
Deferred net revenue
Deferred net revenue as of March 31, 2023 and 2022, consisted of (in millions):
Deferred net revenue (online-enabled games)
Deferred net revenue (other)
Deferred net revenue (noncurrent)
Total deferred net revenue
As of March 31,
2023
2022
$
$
1,901 $
103
67
2,071 $
2,024
156
68
2,248
During the fiscal years ended March 31, 2023 and 2022, we recognized $2,176 million and $1,613 million of revenue,
respectively, that were included in the deferred net revenue balance at the beginning of the period.
61
Remaining Performance Obligations
As of March 31, 2023, revenue allocated to remaining performance obligations consists of our deferred revenue balance of
$2,071 million. These balances exclude any estimates for future variable consideration as we have elected the optional
exemption to exclude sales-based royalty revenue. We expect to recognize substantially all of the current portion of deferred net
revenue as revenue over the next 12 months.
62
(11) INCOME TAXES
The components of our income before provision for income taxes for the fiscal years ended March 31, 2023, 2022 and 2021 are
as follows (in millions):
Domestic
Foreign
Income before provision for income taxes
Year Ended March 31,
2023
2022
2021
$
$
315 $
1,011
204 $
877
1,326 $
1,081 $
299
718
1,017
Provision for income taxes for the fiscal years ended March 31, 2023, 2022 and 2021 consisted of (in millions):
Year Ended March 31, 2023
Federal
State
Foreign
Year Ended March 31, 2022
Federal
State
Foreign
Year Ended March 31, 2021
Federal
State
Foreign
Current
Deferred
Total
$
$
$
$
$
$
570 $
(339) $
92
75
(76)
202
737 $
(213) $
203 $
36
381
620 $
251 $
24
47
322 $
(190) $
(26)
(112)
(328) $
(26) $
(2)
(114)
(142) $
231
16
277
524
13
10
269
292
225
22
(67)
180
The differences between the statutory tax rate and our effective tax rate, expressed as a percentage of income before provision
for income taxes, for the fiscal years ended March 31, 2023, 2022 and 2021 were as follows:
Statutory federal tax expense rate
State taxes, net of federal benefit
Differences between statutory rate and foreign effective tax rate
Excess tax benefit from equity compensation
Research and development credits
Swiss valuation allowance
Acquired IP intra-entity sales
Non-deductible stock-based compensation
Other
Effective tax rate
Year Ended March 31,
2023
2022
2021
21.0 %
1.1 %
7.6 %
(0.3) %
(3.0) %
8.9 %
— %
3.2 %
1.0 %
39.5 %
21.0 %
1.9 %
6.8 %
(1.2) %
(2.8) %
2.7 %
(5.9) %
3.8 %
0.7 %
27.0 %
21.0 %
1.7 %
7.0 %
(2.7) %
(2.4) %
(10.1) %
— %
3.3 %
(0.1) %
17.7 %
During the fiscal year ended March 31, 2023, we recognized a $118 million tax charge to increase the valuation allowance on
Swiss deferred tax assets, primarily as a result of an increase in Swiss interest rates.
During the fiscal year ended March 31, 2022, we completed intra-entity sales of intellectual property rights related to
acquisitions to our U.S. and Swiss intellectual property owners (the “Acquired IP intra-entity sales”). The transactions resulted
in overall taxable gains. Under U.S. GAAP, any profit resulting from the Acquired IP intra-entity sales was eliminated upon
63
consolidation. However, the transactions resulted in a step-up of the U.S. and Swiss tax-deductible basis in the transferred
intellectual property rights and, accordingly, created a temporary difference between the book basis and the tax basis of such
intellectual property rights. As a result, we recognized a $64 million net tax benefit for the current and deferred tax impacts of
the sales.
In addition, during the fiscal year ended March 31, 2022, we recognized a $29 million tax charge to increase the valuation
allowance on Swiss deferred tax assets that are not more likely than not to be realized.
Our effective tax rate and resulting provision for income taxes for the fiscal year ended March 31, 2021 included a $141 million
tax benefit for changes in uncertain tax positions and the valuation allowance related to our Swiss deferred tax assets.
Our foreign subsidiaries are generally subject to U.S. tax, and to the extent earnings from these subsidiaries can be repatriated
without a material tax cost, such earnings will not be indefinitely reinvested. As of March 31, 2023, approximately $925 million
of our cash and cash equivalents were domiciled in foreign tax jurisdictions. All of our foreign cash is available for repatriation
without a material tax cost.
The components of net deferred tax assets, as of March 31, 2023 and 2022 consisted of (in millions):
Deferred tax assets:
Accruals, reserves and other expenses
Tax credit carryforwards
Research and development capitalization
Stock-based compensation
Net operating loss and capital loss carryforwards
Swiss intra-entity tax asset
Total
Valuation allowance
Deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Amortization and depreciation
Other
Total
As of March 31,
2023
2022
$
197 $
218
461
39
371
1,665
2,951
(446)
2,505
(41)
(3)
(44)
185
198
66
43
349
1,782
2,623
(296)
2,327
(79)
(7)
(86)
Deferred tax assets, net of valuation allowance and deferred tax liabilities
$
2,461 $
2,241
As of March 31, 2023, we have net operating loss carry forwards of approximately $2.6 billion of which approximately
$213 million is attributable to various acquired companies. The net operating loss carry forwards include $2.3 billion related to
Switzerland, $99 million related to U.S. federal, and $133 million related to California. Substantially all of these carryforwards,
if not fully realized, will begin to expire in fiscal year 2027. Switzerland has a seven-year carryforward period and does not
permit the carry back of losses. We also have U.S. federal credit carryforwards of $12 million and California credit
carryforwards of $194 million. The California tax credit carryforwards can be carried forward indefinitely.
As of March 31, 2023, we maintained a total valuation allowance of $446 million related to certain U.S. state deferred tax
assets, Swiss deferred tax assets, and foreign capital loss carryovers, due to uncertainty about the future realization of these
assets.
64
The total unrecognized tax benefits as of March 31, 2023, 2022 and 2021 were $867 million, $636 million and $584 million,
respectively. A reconciliation of the beginning and ending balance of unrecognized tax benefits is summarized as follows (in
millions):
Balance as of March 31, 2020
Increases in unrecognized tax benefits related to prior year tax positions
Decreases in unrecognized tax benefits related to prior year tax positions
Increases in unrecognized tax benefits related to current year tax positions
Decreases in unrecognized tax benefits related to settlements with taxing authorities
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations
Changes in unrecognized tax benefits due to foreign currency translation
Balance as of March 31, 2021
Increases in unrecognized tax benefits related to prior year tax positions
Decreases in unrecognized tax benefits related to prior year tax positions
Increases in unrecognized tax benefits related to current year tax positions
Decreases in unrecognized tax benefits related to settlements with taxing authorities
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations
Changes in unrecognized tax benefits due to foreign currency translation
Balance as of March 31, 2022
Increases in unrecognized tax benefits related to current year tax positions
Decreases in unrecognized tax benefits related to settlements with taxing authorities
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations
Changes in unrecognized tax benefits due to foreign currency translation
Balance as of March 31, 2023
$
$
983
12
(444)
55
(2)
(27)
7
584
5
(21)
139
(50)
(18)
(3)
636
245
(2)
(6)
(6)
867
As of March 31, 2023, approximately $395 million of the unrecognized tax benefits would affect our effective tax rate, a
portion of which would be impacted by a valuation allowance.
Interest and penalties related to estimated obligations for tax positions taken in our tax returns are recognized in income tax
expense in our Consolidated Statements of Operations. The combined amount of accrued interest and penalties related to tax
positions taken on our tax returns and included in non-current other liabilities was approximately $54 million as of March 31,
2023 and $36 million as of March 31, 2022.
We file income tax returns in the United States, including various state and local jurisdictions. As of March 31, 2023, our
subsidiaries file tax returns in various foreign jurisdictions, including Switzerland, Canada, Sweden, Italy, France, Germany,
and the United Kingdom. We remain subject to income tax examination by the IRS for fiscal years after 2017. In addition, as of
the period ended March 31, 2023, we remain subject to income tax examination for several other jurisdictions including in
Switzerland for fiscal years after 2013, Canada for fiscal years after 2015, Sweden for fiscal years after 2017, Italy for fiscal
years after 2019, France for fiscal years after 2019, Germany for fiscal years after 2016, and the United Kingdom for fiscal
years after 2021.
We are also currently under income tax examination in the United States for fiscal years 2018 through 2020 and Germany for
fiscal years 2017 through 2019.
The timing and potential resolution of income tax examinations is highly uncertain. While we continue to measure our uncertain
tax positions, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ
materially from the amounts accrued.
65
In fiscal year 2021, the Supreme Court of the United States denied Altera’s appeal of the decision of the Ninth Circuit Court of
Appeals in Altera Corp. v. Commissioner (“the Altera Opinion”), resulting in a partial decrease of our unrecognized tax
benefits. A complete resolution and settlement of the matters underlying the Altera Opinion is reasonably possible within the
next 12 months, which would result in an additional reduction of our gross unrecognized tax benefits. However, it is uncertain
whether a complete resolution and settlement of such matters would also result in resolution of all related and unrelated U.S.
positions for all applicable years. Therefore, it is not possible to provide a range of potential outcomes associated with a
reversal of our gross unrecognized tax benefits for Altera-related uncertain tax positions.
It is also reasonably possible that an additional immaterial reduction of unrecognized tax benefits may occur within the next 12
months, unrelated to the Altera Opinion, a portion of which would impact our effective tax rate. The actual amount could vary
significantly depending on the ultimate timing and nature of any settlements and tax interpretations.
66
(12) FINANCING ARRANGEMENTS
Senior Notes
In February 2021, we issued $750 million aggregate principal amount of 1.85% Senior Notes due February 15, 2031 (the “2031
Notes”) and $750 million aggregate principal amount of 2.95% Senior Notes due February 15, 2051 (the “2051 Notes”). Our
proceeds were $1,478 million, net of discount of $6 million and issuance costs of $16 million. Both the discount and issuance
costs are being amortized to interest expense over the respective terms of the 2031 Notes and the 2051 Notes using the effective
interest rate method. The effective interest rate is 1.98% for the 2031 Notes and 3.04% for the 2051 Notes. Interest is payable
semiannually in arrears, on February 15 and August 15 of each year.
In February 2016, we issued $400 million aggregate principal amount of 4.80% Senior Notes due March 1, 2026 (the “2026
Notes”). Our proceeds were $395 million, net of discount of $1 million and issuance costs of $4 million. Both the discount and
issuance costs are being amortized to interest expense over the term of the 2026 Notes using the effective interest rate method.
The effective interest rate was 4.97%. Interest is payable semiannually in arrears, on March 1 and September 1 of each year.
The carrying and fair values of the Senior Notes are as follows (in millions):
Senior Notes:
4.80% Senior Notes due 2026
1.85% Senior Notes due 2031
2.95% Senior Notes due 2051
Total principal amount
Unaccreted discount
Unamortized debt issuance costs
Net carrying value of Senior Notes
Fair value of Senior Notes (Level 2)
As of
March 31, 2023
As of
March 31, 2022
$
$
$
$
400 $
750
750
1,900 $
(6)
(14)
1,880 $
1,540 $
400
750
750
1,900
(6)
(16)
1,878
1,711
As of March 31, 2023, the remaining life of the 2026 Notes, 2031 Notes and 2051 Notes is approximately 2.9 years, 7.9 years,
and 27.9 years, respectively.
The Senior Notes are senior unsecured obligations and rank equally with all our other existing and future unsubordinated
obligations and any indebtedness that we may incur from time to time under our Credit Facility.
The 2026 Notes, 2031 Notes and 2051 Notes are redeemable at our option at any time prior to December 1, 2025, November
15, 2030, and August 15, 2050, respectively, subject to a make-whole premium. After such dates, we may redeem each such
series of Notes, respectively, at a redemption price equal to 100% of the aggregate principal amount plus accrued and unpaid
interest. In addition, upon the occurrence of a change of control repurchase event, the holders of each such series of Notes may
require us to repurchase all or a portion of these Notes, at a price equal to 101% of their principal amount, plus accrued and
unpaid interest to the date of repurchase. Each such series of Notes also include covenants that limit our ability to incur liens on
assets and to enter into sale and leaseback transactions, subject to certain allowances.
67
Credit Facility
On March 22, 2023, we entered into a $500 million unsecured revolving credit facility (the “Credit Facility") with a syndicate
of banks. The Credit Facility terminates on March 22, 2028 unless the maturity is extended in accordance with its terms. The
Credit Facility contains an option to arrange with existing lenders and/or new lenders to provide up to an aggregate of
$500 million in additional commitments for revolving loans. Proceeds of loans made under the Credit Facility may be used for
general corporate purposes.
The loans denominated in U.S. dollars bear interest, at our option, at the base rate plus an applicable spread or at a forward-
looking term rate based upon the secured overnight financing rate plus a credit spread adjustment of 0.10% per annum (the
“Adjusted Term SOFR Rate”) plus an applicable spread, in each case with such spread based on our debt credit ratings. We are
also obligated to pay other customary fees for a credit facility of this size and type. Interest is due and payable in arrears
quarterly for loans bearing interest at the base rate and at the end of an interest period in the case of loans bearing interest at the
Adjusted Term SOFR Rate. Principal, together with all accrued and unpaid interest, is due and payable on the maturity date, as
such date may be extended in connection with the extension option. We may prepay the loans and terminate the commitments,
in whole or in part, at any time without premium or penalty, subject to certain conditions.
The Credit Facility contains customary affirmative and negative covenants, including covenants that limit or restrict our ability
to, among other things, incur subsidiary indebtedness, grant liens, and dispose of all or substantially all assets, in each case
subject to customary exceptions for a credit facility of this size and type. We are also required to maintain compliance with a
debt to EBITDA ratio. As of March 31, 2023, we were in compliance with the debt to EBITDA ratio.
The Credit Facility contains customary events of default, including among others, non-payment defaults, covenant defaults,
cross-defaults to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults and a change of control
default, in each case, subject to customary exceptions for a credit facility of this size and type. The occurrence of an event of
default could result in the acceleration of the obligations under the Credit Facility and an increase in the applicable interest rate.
As of March 31, 2023, no amounts were outstanding under the Credit Facility. $2 million of debt issuance costs that were paid
in connection with obtaining this credit facility are being amortized to interest expense over the 5-year term of the Credit
Facility.
Interest Expense
The following table summarizes our interest expense recognized for fiscal years 2023, 2022 and 2021 that is included in interest
and other income (expense), net on our Consolidated Statements of Operations (in millions):
Amortization of debt discount
Amortization of debt issuance costs
Coupon interest expense
Total interest expense
Year Ended March 31,
2023
2022
2021
$
$
(1) $
(2)
(55)
(58) $
(1) $
(2)
(55)
(58) $
—
(2)
(43)
(45)
68
(13) LEASES
Our leases primarily consist of facility leases for our offices and development studios, data centers, and server equipment, with
remaining lease terms of up to 15 years. Our lease terms may include options to extend or terminate the lease. When it is
reasonably certain that we will exercise those options, we include them in our measurement of lease payments and lease terms.
Substantially all of our leases are classified as operating leases.
We determine if an arrangement is or contains a lease at contract inception. The contract is or contains a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining if a
contract is or contains a lease, we apply judgment whether the contract provides the right to obtain substantially all of the
economic benefits, the right to direct, or control the use of the identified asset throughout the period of use.
Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the commencement date based on the present value
of future lease payments over the lease term. In determining the present value of the future lease payments, we use our
incremental borrowing rate as none of our leases provide an implicit rate. Our incremental borrowing rate is an assumed rate
based on our credit rating, credit history, current economic environment, and the lease term. Operating lease ROU assets are
further adjusted for any payments made, incentives received, and initial direct costs incurred prior to the commencement date.
Operating lease ROU assets are amortized on a straight-line basis over the lease term and recognized as lease expense within
cost of revenue or operating expenses on our Consolidated Statements of Operations. Operating lease liabilities decrease by
lease payments we make over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance
sheet. When we commit to a plan to abandon an operating lease at a future date, the amortization of the operating lease ROU
asset and depreciation of the associated leasehold improvements are accelerated based on the revised useful life of the operating
lease.
Some of our operating leases contain lease and non-lease components. Non-lease components primarily include fixed payments
for common area maintenance and utilities. We elected to account for lease and non-lease components as a single lease
component. Variable lease and non-lease components are recognized on our Consolidated Statements of Operations as incurred.
The components of lease expenses for the fiscal years ended March 31, 2023, 2022, and 2021 are as follows (in millions):
Operating lease costs
Variable lease costs
Short-term lease costs
Total lease expense
Year Ended March 31,
2023
2022
2021
$
$
138 $
22
7
98 $
21
2
167 $
121 $
87
21
2
110
During the fiscal year ended March 31, 2023, we recorded accelerated amortization of certain ROU Assets of $34 million
within the operating lease costs and accelerated deprecation of property, plant and equipment for $10 million as part of our
2023 Restructuring Plan. See Note 8 — Restructuring Activities for additional information.
Supplemental cash and noncash information related to our operating leases for the fiscal years ended March 31, 2023, 2022, and
2021 are as follows (in millions):
Cash paid for amounts included in the measurement of lease
liability
ROU assets obtained in exchange for new lease obligations
$
$
97 $
97 $
97 $
150 $
85
90
Year Ended March 31,
2023
2022
2021
Weighted average remaining lease term and discount rate at March 31, 2023 and 2022 are as follows:
Lease term
Discount rate
At March 31, 2023
At March 31, 2022
7.5 years
3.3 %
6.8 years
2.5 %
69
Operating lease ROU assets and liabilities recorded on our Consolidated Balance Sheets as of March 31, 2023 and 2022 are as
follows (in millions):
Operating lease ROU assets
Operating lease liabilities
Noncurrent operating lease liabilities
Total operating lease liabilities
$
$
$
As of March 31,
2023
2022
Balance Sheet Classification
276 $
314 Other assets
66 $
277
343 $
81 Accrued and other current liabilities
272 Other liabilities
353
Future minimum lease payments under operating leases as of March 31, 2023 were as follows (in millions):
Fiscal Years Ending March 31,
2024
2025
2026
2027
2028
Thereafter
Total future lease payments
Less imputed interest
Total operating lease liabilities
$
$
73
69
56
41
32
116
387
(44)
343
In addition to the amounts included in the table above, as of March 31, 2023, we have entered into an office lease that has not
yet commenced with aggregate future lease payments of approximately $98 million. This lease is expected to commence in
fiscal year 2024, and will have a lease term of 12 years.
70
(14) COMMITMENTS AND CONTINGENCIES
Development, Celebrity, Professional Sports Organizations and Content Licenses: Payments and Commitments
The products we produce in our studios are designed and created by our employee designers, artists, software programmers and
by non-employee software developers (“independent artists” or “third-party developers”). We typically advance development
funds to the independent artists and third-party developers during development of our games, usually in installment payments
made upon the completion of specified development milestones. Contractually, these payments are generally considered
advances against subsequent royalties on the sales of the products. These terms are set forth in written agreements entered into
with the independent artists and third-party developers.
In addition, we have certain celebrity, professional sports organizations and content license contracts that contain minimum
guarantee payments and marketing commitments to promote the games we publish that may not be dependent on any
deliverables. These developer and content license commitments represent the sum of (1) the cash payments due under non-
royalty-bearing licenses and services agreements and (2) the minimum guaranteed payments and advances against royalties due
under royalty-bearing licenses and services agreements, the majority of which are conditional upon performance by the
counterparty. These minimum guarantee payments and any related marketing commitments are included in the table below.
The following table summarizes our minimum contractual obligations as of March 31, 2023 (in millions):
Total
2024
2025
2026
2027
2028
Thereafter
Fiscal Years Ending March 31,
Unrecognized commitments
Developer/licensor commitments
$
2,011 $
349 $
480 $
434 $
384 $
146 $
Marketing commitments
Senior Notes interest
Operating lease imputed interest
Operating leases not yet commenced
Other purchase obligations
Total unrecognized commitments
Recognized commitments
Senior Notes principal and interest
Operating leases
Transition Tax and other taxes
Total recognized commitments
971
781
44
98
201
4,106
1,906
387
17
2,310
256
49
10
—
130
794
6
73
4
83
245
55
8
3
51
842
—
69
6
75
197
54
7
8
14
714
400
56
7
463
154
36
5
8
4
591
—
41
—
41
67
36
4
8
2
263
—
32
—
32
218
52
551
10
71
—
902
1,500
116
—
1,616
Total Commitments
$
6,416 $
877 $
917 $
1,177 $
632 $
295 $
2,518
The unrecognized amounts represented in the table above reflect our minimum cash obligations for the respective fiscal years,
but do not necessarily represent the periods in which they will be recognized and expensed in our Consolidated Financial
Statements. In addition, the amounts in the table above are presented based on the dates the amounts are contractually due as of
March 31, 2023; however, certain payment obligations may be accelerated depending on the performance of our operating
results.
In addition to the amounts included in the table above, in our Consolidated Balance Sheets as of March 31, 2023, we had a net
liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $594 million, of which we are
unable to make a reasonably reliable estimate of when cash settlement with a taxing authority will occur.
Subsequent to March 31, 2023, we entered into certain agreements with third parties which are not included in the table above,
and contingently commit us to pay an additional $125 million at various dates through fiscal year 2028.
Legal Proceedings
We are subject to claims and litigation arising in the ordinary course of business. We do not believe that any liability from any
reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse
effect on our Consolidated Financial Statements.
71
(15) STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS
Valuation Assumptions
We recognize compensation cost for stock-based awards to employees based on the awards’ estimated grant-date fair value
using a straight-line approach over the service period for which such awards are expected to vest. We account for forfeitures as
they occur.
The estimation of the fair value of market-based restricted stock units, stock options and ESPP purchase rights is affected by
assumptions regarding subjective and complex variables. Generally, our assumptions are based on historical information and
judgment is required to determine if historical trends may be indicators of future outcomes. We estimate the fair value of our
stock-based awards as follows:
•
Restricted Stock Units and Performance-Based Restricted Stock Units. The fair value of restricted stock units and
performance-based restricted stock units (other than market-based restricted stock units) is determined based on the
quoted market price of our common stock on the date of grant.
• Market-Based Restricted Stock Units. Market-based restricted stock units consist of grants of performance-based
restricted stock units to certain members of executive management that vest contingent upon the achievement of pre-
determined market and service conditions (referred to herein as “market-based restricted stock units”). The fair value
of our market-based restricted stock units is estimated using a Monte-Carlo simulation model. Key assumptions for the
Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation
coefficient.
•
Stock Options and Employee Stock Purchase Plan. The fair value of stock options and stock purchase rights granted
pursuant to our equity incentive plans and our 2000 Employee Stock Purchase Plan, as amended (“ESPP”),
respectively, is estimated using the Black-Scholes valuation model based on the multiple-award valuation method. Key
assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term and
expected dividends. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the
expected term of the option. Expected volatility is based on a combination of historical stock price volatility and
implied volatility of publicly-traded options on our common stock. An expected term is estimated based on historical
exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior.
There were an insignificant number of stock options granted during fiscal years 2023, 2022, and 2021.
The estimated assumptions used in the Black-Scholes valuation model to value our ESPP purchase rights were as follows:
Risk-free interest rate
Expected volatility
Weighted-average volatility
Expected term
Expected dividends
2023
3.1 - 5.0%
27 - 31%
29%
6 - 12 months
0.8%
ESPP Purchase Rights
Year Ended March 31,
2022
0.1 - 1.1%
25 - 30%
27%
6 - 12 months
0.6 %
2021
0.1%
32 - 39%
36%
6 - 12 months
0.3 %
The assumptions used in the Monte-Carlo simulation model to value our market-based restricted stock units were as follows:
Risk-free interest rate
Expected volatility
Weighted-average volatility
Expected dividends
Year Ended March 31,
2023
2022
2021
3.3%
33 - 56%
43%
None
0.4 %
24 - 76%
40%
None
0.2%
23 - 63%
37%
None
72
Summary of Plans and Plan Activity
Equity Incentive Plans
We have equity awards outstanding under two incentive plans: our 2019 Equity Incentive Plan (the “2019 Equity Plan”), as
amended, and our 2000 Equity Incentive Plan, as amended (the “2000 Equity Plan”). Our 2019 Equity Plan allows us to grant
options to purchase our common stock and to grant restricted stock, restricted stock units and stock appreciation rights to our
employees, officers, and directors, up to a maximum of 29.5 million shares, plus any shares authorized for grant or subject to
awards under the 2000 Equity Plan that are not delivered to participants for any reason. Pursuant to the 2019 Equity Plan,
incentive stock options may be granted to employees and officers and non-qualified options may be granted to employees,
officers, and directors, at not less than 100 percent of the fair market value on the date of grant.
Approximately 21.7 million options or 15.2 million restricted stock units were available for grant under our 2019 Equity Plan as
of March 31, 2023.
Stock Options
Options granted under the 2019 Equity Plan and the 2000 Equity Plan generally expire ten years from the date of grant. All
outstanding options were fully vested and exercisable as of March 31, 2023.
The following table summarizes our stock option activity for the fiscal year ended March 31, 2023:
Outstanding as of March 31, 2022
Granted
Exercised
Forfeited, cancelled or expired
Outstanding as of March 31, 2023
Vested and expected to vest
Exercisable as of March 31, 2023
Options
(in thousands)
Weighted-
Average
Exercise Prices
39.28
286 $
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic Value
(in millions)
4
123.23
(168)
(1)
121 $
121 $
120 $
40.10
64.95
40.43
40.43
40.25
2.00 $
2.00 $
1.99 $
10
10
10
The aggregate intrinsic value represents the total pre-tax intrinsic value based on our closing stock price as of March 31, 2023,
which would have been received by the option holders had all the option holders exercised their options as of that date. The
total intrinsic values of stock options exercised during fiscal years 2023, 2022, and 2021 were $15 million, $8 million, and $76
million, respectively. We issue new common stock from our authorized shares upon the exercise of stock options.
Restricted Stock Units
We grant restricted stock units under our 2019 Equity Plan to employees worldwide. Restricted stock units are unfunded,
unsecured rights to receive common stock upon the satisfaction of certain vesting criteria. Upon vesting, a number of shares of
common stock equivalent to the number of restricted stock units are typically issued net of required tax withholding
requirements, if any. Restricted stock units are subject to forfeiture and transfer restrictions. Vesting for restricted stock units is
based on the holders’ continued employment with us through each applicable vest date. If the vesting conditions are not met,
unvested restricted stock units will be forfeited. Our restricted stock units generally vest over 35 months to four years.
73
Each restricted stock unit granted reduces the number of shares available for grant by 1.43 shares under our 2019 Equity Plan.
The following table summarizes our restricted stock units activity, excluding performance-based and market-based restricted
stock unit activity which is discussed below, for the fiscal year ended March 31, 2023:
Outstanding as of March 31, 2022
Granted
Vested
Forfeited or cancelled
Outstanding as of March 31, 2023
Restricted
Stock Units
(in thousands)
Weighted-
Average Grant
Date Fair Values
6,682 $
5,391
(3,649)
(922)
7,502 $
129.57
126.41
126.50
131.56
128.54
The grant date fair value of restricted stock units is based on the quoted market price of our common stock on the date of grant.
The weighted-average grant date fair values of restricted stock units granted during fiscal years 2023, 2022, and 2021 were
$126.41, $136.78, and $127.27 respectively. The fair values of restricted stock units that vested during fiscal years 2023, 2022,
and 2021 were $460 million, $457 million, and $420 million, respectively.
Performance-Based Restricted Stock Units
Our performance-based restricted stock units vest upon the achievement of pre-determined performance-based milestones,
including, but not limited to, management reporting milestones of net bookings and operating income metrics, as well as service
conditions. If these performance-based milestones are not met but service conditions are met, the performance-based restricted
stock units will not vest, in which case any compensation expense we have recognized to date will be reversed. Generally, the
measurement periods of our performance-based restricted stock units are 3 to 4 years, with awards vesting after each annual
measurement period or cliff-vesting after the completion of the total aggregate measurement period.
Each quarter, we update our assessment of the probability that the performance milestones will be achieved. We amortize the
fair values of performance-based restricted stock units over the requisite service period. The performance-based restricted stock
units contain threshold, target and maximum milestones for each performance-based milestone. The number of shares of
common stock to be issued at vesting will range from zero to 200 percent of the target number of performance-based restricted
stock units attributable to each performance-based milestone based on the company’s performance as compared to these
threshold, target and maximum performance-based milestones. Each performance-based milestone is weighted evenly and the
number of shares that vest based on each performance-based milestone is independent from the other.
The following table summarizes our performance-based restricted stock unit activity, presented with the maximum number of
shares that could potentially vest, for the fiscal year ended March 31, 2023:
Outstanding as of March 31, 2022
Granted
Vested
Forfeited or cancelled
Outstanding as of March 31, 2023
Performance-
Based Restricted
Stock Units
(in thousands)
Weighted-
Average Grant
Date Fair Value
190 $
509
(73)
(69)
557 $
142.60
127.98
142.60
136.28
130.03
The weighted-average grant date fair values of performance-based restricted stock units granted during fiscal years 2023 and
2022 were $127.98 and $140.48, respectively. The fair values of performance-based restricted stock units that vested during
fiscal years 2023 and 2022 were $9 million and $38 million, respectively. There were no performance-based restricted stock
units granted or vested during fiscal year 2021.
74
Market-Based Restricted Stock Units
Our market-based restricted stock units vest contingent upon the achievement of pre-determined market and service conditions.
If these market conditions are not met but service conditions are met, the market-based restricted stock units will not vest;
however, any compensation expense we have recognized to date will not be reversed. The number of shares of common stock
to be issued at vesting will range from zero to 200 percent of the target number of market-based restricted stock units based on
our total stockholder return (“TSR”) relative to the performance of companies in the Nasdaq-100 Index for each measurement
period, over either a one-year, two-year cumulative and three-year cumulative period, a two-year and four-year cumulative
period or a three-year period.
The following table summarizes our market-based restricted stock unit activity, presented with the maximum number of shares
that could potentially vest, for the year ended March 31, 2023:
Outstanding as of March 31, 2022
Granted
Vested
Forfeited or cancelled
Outstanding as of March 31, 2023
Market-Based
Restricted Stock
Units
(in thousands)
Weighted-
Average Grant
Date Fair Value
1,321 $
178
(95)
(582)
822 $
134.69
176.70
114.97
129.16
149.98
The weighted-average grant date fair values of market-based restricted stock units granted during fiscal years 2023, 2022, and
2021 were $176.70, $170.44, and $145.78, respectively. The fair values of market-based restricted stock units that vested
during fiscal years 2023, 2022, and 2021 were $12 million, $37 million, and $19 million, respectively.
ESPP
Pursuant to our ESPP, eligible employees may authorize payroll deductions of between 2 percent and 10 percent of their
compensation to purchase shares of common stock at 85 percent of the lower of the market price of our common stock on the
date of commencement of the applicable offering period or on the last day of each six-month purchase period.
The following table summarizes our ESPP activity for fiscal years ended March 31, 2023, 2022 and 2021:
Fiscal Year 2021
Fiscal Year 2022
Fiscal Year 2023
Shares Issued
(in millions)
0.7
0.6
0.7
Exercise Prices for
Purchase Rights
$74.70 - $119.37 $
$113.39 - $118.14 $
$96.34 - $111.86 $
Weighted-Average
Fair Values of
Purchase Rights
29.80
35.94
33.91
The fair values were estimated on the date of grant using the Black-Scholes valuation model. We issue new common stock out
of the ESPP’s pool of authorized shares. As of March 31, 2023, 3.5 million shares were available for grant under our ESPP.
75
Stock-Based Compensation Expense
The following table summarizes stock-based compensation expense resulting from stock options, restricted stock units, market-
based restricted stock units, performance-based restricted stock units, and the ESPP purchase rights included in our
Consolidated Statements of Operations (in millions):
Cost of revenue
Research and development
Marketing and sales
General and administrative
Stock-based compensation expense
Year Ended March 31,
2023
2022
2021
7 $
6 $
367
59
115
356
54
112
548 $
528 $
5
285
46
99
435
$
$
During the fiscal years ended March 31, 2023, 2022, and 2021, we recognized $72 million, $68 million, and $56 million,
respectively, of deferred income tax benefit related to our stock-based compensation expense.
As of March 31, 2023, our total unrecognized compensation cost related to stock options, restricted stock units, market-based
restricted stock units, and performance-based restricted stock units was $740 million and is expected to be recognized over a
weighted-average service period of 1.8 years. Of the $740 million of unrecognized compensation cost, $714 million relates to
restricted stock units, $19 million relates to market-based restricted stock units, and $7 million relates to performance-based
restricted stock units.
Deferred Compensation Plan
We have a Deferred Compensation Plan (“DCP”) for the benefit of a select group of management or highly compensated
employees and directors, which is unfunded and intended to be a plan that is not qualified within the meaning of section 401(a)
of the Internal Revenue Code. The DCP permits the deferral of the annual base salary and/or director cash compensation up to a
maximum amount. The deferrals are held in a separate trust, which has been established by us to administer the DCP. The trust
is a grantor trust and the specific terms of the trust agreement provide that the assets of the trust are available to satisfy the
claims of general creditors in the event of our insolvency. The assets held by the trust are classified as trading securities and are
held at fair value on our Consolidated Balance Sheets. The assets and liabilities of the DCP are presented in other assets and
other liabilities on our Consolidated Balance Sheets, respectively, with changes in the fair value of the assets and in the deferred
compensation liability recognized as compensation expense. The estimated fair value of the assets was $23 million and $21
million as of March 31, 2023 and 2022, respectively. As of March 31, 2023 and 2022, $24 million and $22 million were
recorded, respectively, to recognize undistributed deferred compensation due to employees.
401(k) Plan, Registered Retirement Savings Plan and ITP Plan
We have a 401(k) plan covering substantially all of our U.S. employees, a Registered Retirement Savings Plan covering
substantially all of our Canadian employees, and an ITP pension plan covering substantially all our Swedish employees. These
plans may permit us to make discretionary contributions to employees’ accounts based on our financial performance. We
contributed an aggregate of $42 million, $41 million, and $40 million to these plans in fiscal years 2023, 2022, and 2021,
respectively.
Stock Repurchase Program
In May 2018, a Special Committee of our Board of Directors, on behalf of the full Board of Directors, authorized a program to
repurchase up to $2.4 billion of our common stock. We completed repurchases under the May 2018 program in April 2020.
In November 2020, our Board of Directors authorized a program to repurchase up to $2.6 billion of our common stock. We
completed repurchases under the November 2020 program in October 2022.
76
In August 2022, our Board of Directors authorized a program to repurchase up to $2.6 billion of our common stock. This stock
repurchase program expires on November 4, 2024. Under this program, we may purchase stock in the open market or through
privately negotiated transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading
plans. The timing and actual amount of the stock repurchases will depend on several factors including price, capital availability,
regulatory requirements, alternative investment opportunities and other market conditions. We are not obligated to repurchase a
specific number of shares under this program and it may be modified, suspended or discontinued at any time. We are actively
repurchasing shares under this program.
The following table summarizes total shares repurchased during fiscal years 2023, 2022, and 2021:
May 2018 Program
November 2020 Program
August 2022 Program
Total
(In millions)
Shares
Amount
Shares
Amount
Shares
Amount
Shares
Amount
Fiscal Year 2021
Fiscal Year 2022
Fiscal Year 2023
0.7 $
— $
— $
78
—
—
4.9 $
651
9.5 $
1,300
5.1 $
650
— $
— $
—
—
5.6 $
729
9.5 $
1,300
5.3 $
645
10.4 $
1,295
77
(16) INTEREST AND OTHER INCOME (EXPENSE), NET
Interest and other income (expense), net, for the fiscal years ended March 31, 2023, 2022 and 2021 consisted of (in millions):
Interest expense
Interest income
Net gain (loss) on foreign currency transactions
Net gain (loss) on foreign currency forward contracts
Other income (expense), net
Interest and other income (expense), net
$
Year Ended March 31,
2023
2022
2021
(58)
49
31
(29)
1
(6) $
(58)
4
(22)
21
7
(48) $
(45)
24
9
(19)
2
(29)
78
(17) EARNINGS PER SHARE
The following table summarizes the computations of basic earnings per share (“Basic EPS”) and diluted earnings per share
(“Diluted EPS”). Basic EPS is computed as net income divided by the weighted-average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock-based
compensation plans including stock options, restricted stock units, market-based restricted stock units, performance-based
restricted stock units, and ESPP purchase rights using the treasury stock method.
(In millions, except per share amounts)
Net income
Shares used to compute earnings per share:
Year Ended March 31,
2023
2022
2021
$
802 $
789 $
Weighted-average common stock outstanding — basic
Dilutive potential common shares related to stock award plans
Weighted-average common stock outstanding — diluted
277
1
278
284
2
286
Earnings per share:
Basic
Diluted
$
$
2.90 $
2.88 $
2.78 $
2.76 $
837
289
3
292
2.90
2.87
Certain restricted stock units, market-based restricted stock units and performance-based restricted stock units were excluded
from the treasury stock method computation of diluted shares as their inclusion would have had an antidilutive effect. For the
fiscal year ended March 31, 2023, two million such shares were excluded, and for the fiscal years ended March 31, 2022 and
2021, one million and two million such shares were excluded, respectively.
79
(18) SEGMENT AND REVENUE INFORMATION
Our reporting segment is based upon: our internal organizational structure; the manner in which our operations are managed;
the criteria used by our Chief Executive Officer, our Chief Operating Decision Maker (“CODM”), to evaluate segment
performance; the availability of separate financial information; and overall materiality considerations. Our CODM currently
reviews total company operating results to assess overall performance and allocate resources. As of March 31, 2023, we have
only one reportable segment, which represents our only operating segment.
Information about our total net revenue by timing of recognition for the fiscal years ended March 31, 2023, 2022 and 2021 is
presented below (in millions):
Net revenue by timing of recognition
Revenue recognized at a point in time
Revenue recognized over time
Net revenue
Year Ended March 31,
2023
2022
2021
$
$
2,389 $
2,326 $
5,037
4,665
7,426 $
6,991 $
2,006
3,623
5,629
Generally, performance obligations that are recognized upfront upon transfer of control are classified as revenue recognized at a
point in time, while performance obligations that are recognized over either the estimated offering period, contractual term or
subscription period as the services are provided are classified as revenue recognized over time.
Revenue recognized at a point in time includes revenue allocated to the software license performance obligation. This also
includes revenue from the licensing of software to third-parties.
Revenue recognized over time includes service revenue allocated to the future update rights and the online hosting performance
obligations. This also includes service revenue allocated to the future update rights from the licensing of software to third-
parties, online-hosted services such as our Ultimate Team game mode, and subscription services.
Information about our total net revenue by composition for the fiscal years ended March 31, 2023, 2022 and 2021 is presented
below (in millions):
Net revenue by composition
Full game downloads
Packaged goods
Full game
Live services and other
Net revenue
Year Ended March 31,
2023
2022
2021
$
1,262 $
1,282 $
675
1,937
5,489
711
1,993
4,998
$
7,426 $
6,991 $
918
695
1,613
4,016
5,629
Full game net revenue includes full game downloads and packaged goods. Full game downloads primarily includes revenue
from digital sales of full games on console, PC, mobile phones and tablets. Packaged goods primarily includes revenue from
software that is sold physically through traditional channels such as brick and mortar retailers and certain licensing revenue.
Live services and other net revenue primarily includes revenue from sales of extra content for console, PC, and mobile games,
certain licensing revenue, subscriptions, and advertising.
80
Information about our total net revenue by platform for the fiscal years ended March 31, 2023, 2022 and 2021 is presented
below (in millions):
Platform net revenue
Console
PC and other
Mobile
Net revenue
Year Ended March 31,
2023
2022
2021
$
$
4,443 $
4,400 $
1,729
1,254
1,532
1,059
7,426 $
6,991 $
3,716
1,195
718
5,629
Information about our operations in North America and internationally for the fiscal years ended March 31, 2023, 2022 and
2021 is presented below (in millions):
Net revenue from unaffiliated customers
North America
International
Net revenue
Long-lived assets
North America
International
Total
Year Ended March 31,
2023
2022
2021
$
$
3,151 $
3,039 $
4,275
3,952
7,426 $
6,991 $
2,474
3,155
5,629
As of March 31,
2023
2022
$
$
445 $
104
549 $
446
104
550
We attribute net revenue from external customers to individual countries based on the location of the legal entity that sells the
products and/or services. Note that revenue attributed to the legal entity that makes the sale is often not the country where the
consumer resides. For example, revenue generated by our Swiss legal entity includes digital revenue from consumers who
reside outside of Switzerland, including consumers who reside outside of Europe. Revenue generated by our Swiss legal entity
during fiscal years 2023, 2022, and 2021 represents $4,085 million, $3,423 million and $2,731 million or 55 percent, 49 percent
and 49 percent of our total net revenue, respectively. Revenue generated in the United States represents over 99 percent of our
total North America net revenue. There were no other countries with net revenue greater than 10 percent.
In fiscal year 2023, our direct sales to Sony and Microsoft represented approximately 32 percent and 16 percent of total net
revenue, respectively. In fiscal year 2022, our direct sales to Sony and Microsoft represented approximately 33 percent and 16
percent of total net revenue, respectively. In fiscal year 2021, our direct sales to Sony and Microsoft represented approximately
36 percent and 18 percent of total net revenue, respectively.
81
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Electronic Arts Inc.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Electronic Arts Inc. and subsidiaries (the Company) as of
April 1, 2023 and April 2, 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity,
and cash flows for each of the fiscal years in the three fiscal year period ended April 1, 2023, and the related notes (collectively,
the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of April
1, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of April 1, 2023 and April 2, 2022, and the results of its operations and its cash flows for each of
the fiscal years in the three fiscal year period ended April 1, 2023, in conformity with U.S. generally accepted accounting
principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of April 1, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an
opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
82
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the estimated offering period
As discussed in Note 2 to the consolidated financial statements, revenue for transactions that include future update rights and/or
online hosting performance obligations are subject to deferral and recognized over the Estimated Offering Period. Determining
the Estimated Offering Period is inherently subjective because it is not an explicitly defined period. The Company’s
determination of the Estimated Offering Period considers the following factors:
•
•
•
•
the average period of time customers are online
for physical games sold at retail, the period of time between the date a game unit is sold to a reseller and the date the
reseller sells the game unit to the customer
known and expected online gameplay trends
disclosed service periods for competitors’ games.
The Company reported net revenue of $7,426 million for the year-ended April 1, 2023 and deferred net revenue of $2,071
million as of April 1, 2023.
We identified the assessment of the Estimated Offering Period as a critical audit matter. A high degree of audit effort and
subjective and complex auditor judgment was required to evaluate the sufficiency of audit evidence obtained over the Estimated
Offering Period, including whether historical experience and other qualitative factors, such as those described above, are
indicative of the time period during which the Company’s games and extra content are played by its customers.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested
the operating effectiveness of certain internal controls over the Company’s process to determine the Estimated Offering Period,
including controls over the factors noted above and the Company’s review of the Estimated Offering Period concluded for use
in recognizing revenue. We evaluated the model the Company used to develop the Estimated Offering Period against the
accounting requirements and for potential management bias. We computed the average period of time customers are online as
well as the period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the
customer by using the Company’s internal data. We compared the results of these computations against the periods used by the
Company in its Estimated Offering Period model. We obtained disclosed service periods for competitors’ games and compared
them against the data used by the Company. We compared known and expected online gameplay trends used in the
determination of the Estimated Offering Period to historical Company information and publicly available industry information.
We performed a sensitivity analysis over the Company’s Estimated Offering Period to assess the impact of potential changes in
the Estimated Offering Period on revenue. We assessed the sufficiency of evidence obtained related to the Estimated Offering
Period by evaluating the results of the procedures performed.
We have served as the Company’s auditor since 1987.
Santa Clara, California
May 24, 2023
/s/ KPMG LLP
83
Item 9:
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A: Controls and Procedures
Definition and Limitations of Disclosure Controls
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are controls and
other procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange
Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules
and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and
communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure. Our management evaluates these controls and procedures on an ongoing basis.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. These limitations
include the possibility of human error, the circumvention or overriding of the controls and procedures and reasonable resource
constraints. In addition, because we have designed our system of controls based on certain assumptions, which we believe are
reasonable, about the likelihood of future events, our system of controls may not achieve its desired purpose under all possible
future conditions. Accordingly, our disclosure controls and procedures provide reasonable assurance, but not absolute
assurance, of achieving their objectives.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and
procedures, believe that as of the end of the period covered by this report, our disclosure controls and procedures were effective
in providing the requisite reasonable assurance that material information required to be disclosed in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding the required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Our internal control over financial reporting is designed to provide reasonable, but not absolute, assurance regarding the
reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting
principles. There are inherent limitations to the effectiveness of any system of internal control over financial reporting. These
limitations include the possibility of human error, the circumvention or overriding of the system and reasonable resource
constraints. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become
inadequate because of changes in conditions, or that the degree of compliance with our policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of the end of our most recently
completed fiscal year. In making its assessment, management used the criteria set forth in Internal Control-Integrated
Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this
assessment, our management has concluded that, as of the end of our most recently completed fiscal year, our internal control
over financial reporting was effective and provided a reasonable level of assurance.
KPMG LLP, our independent registered public accounting firm, has issued an auditors’ report on the effectiveness of our
internal control over financial reporting. That report appears on Page 82.
Changes in Internal Control over Financial Reporting
There has been no change in our internal controls over financial reporting identified in connection with our evaluation that
occurred during the fiscal quarter ended March 31, 2023 that has materially affected or is reasonably likely to materially affect
our internal control over financial reporting.
84
Item 9B: Other Information
None.
Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
85
Item 10: Directors, Executive Officers and Corporate Governance
PART III
The information required by Item 10, other than the information regarding executive officers, which is included in Part I, Item 1
of this report, is incorporated herein by reference to the information to be included in our 2023 Proxy under the headings
“Proxy Highlights”, “Board of Directors and Corporate Governance” and, as applicable, “Delinquent Section 16(a) Reports.
Item 11: Executive Compensation
The information required by Item 11 is incorporated herein by reference to the information to be included in the 2023 Proxy
under the headings “Director Compensation”, “Compensation Discussion & Analysis” and “Compensation Committee
Interlocks and Insider Participation.”
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 is incorporated herein by reference to the information to be included in the 2023 Proxy
under the headings “Executive Compensation Tables” and “Security Ownership of Certain Beneficial Owners and
Management.”
Item 13: Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 is incorporated herein by reference to the information to be included in the 2023 Proxy
under the headings “Director Independence”, “Related Persons Transaction Policy”, and, as applicable, “Related Person
Transactions.”
Item 14: Principal Accountant Fees and Services
The information required by Item 14 is incorporated herein by reference to the information to be included in Proposal 3 of the
2023 Proxy and under the heading “Audit Matters.”
Item 15: Exhibits and Financial Statements
(a) Documents filed as part of this report
PART IV
1. Financial Statements: See Index to Consolidated Financial Statements under Item 8 on Page 36 of this report.
2. Financial Statement Schedules: The Financial Statement Schedules have been omitted because they are not applicable or are
not required or are not present in material amounts or the information required to be set forth herein is included in the
Consolidated Financial Statements or Notes thereto.
3. Exhibits: The exhibits listed in the accompanying index to exhibits on Page 87 are filed or incorporated by reference as part
of this report.
Item 16: Form 10-K Summary
None.
86
Number
2.01
3.01
3.02
3.03
4.01
4.02
4.03
4.04
4.05
10.04*
10.05*
10.07*
10.08*
10.09*
10.10*
10.11*
ELECTRONIC ARTS INC.
2023 FORM 10-K ANNUAL REPORT
EXHIBIT INDEX
Exhibit Title
Share Purchase Agreement, dated as of June 23, 2021, by and
among Electronic Arts Inc., Pine Interactive Ltd. and WB/TT
Holdings, Inc.
Amended and Restated Certificate of Incorporation
Certificate of Amendment to Amended and Restated
Certificate of Incorporation
Amended and Restated Bylaws
Incorporated by Reference
Form
File No.
Filing Date
Filed
Herewith
8-K
000-17948
6/23/2021
8-K
8-K
000-17948
8/13/2021
000-17948
8/15/2022
8-K
000-17948
8/15/2022
Specimen Certificate of Registrant’s Common Stock
10-Q
000-17948
2/6/2018
Description of Securities
Indenture, dated as of February 24, 2016 by and between
Electronic Arts Inc. and U.S. Bank National Association, as
Trustee
First Supplemental Indenture, dated as of February 24, 2016,
between Electronic Arts Inc. and U.S. Bank National
Association, as Trustee
Second Supplemental Indenture, dated as of February 11,
2021, between Electronic Arts Inc. and U.S. Bank National
Association, as Trustee
8-K
000-17948
2/24/2016
8-K
000-17948
2/24/2016
8-K
000-17948
2/11/2021
10.01*
Form of Indemnity Agreement with Directors
10.02*
Electronic Arts Inc. Executive Bonus Plan
10-K
000-17948
8-K
000-17948
6/4/2004
5/25/2021
10.03*
Electronic Arts Inc. Deferred Compensation Plan
10-Q
000-17948
8/6/2007
Electronic Arts Inc. Amended and Restated Change in
Control Severance Plan
8-K
000-17948
11/19/2021
First Amendment to the Electronic Arts Deferred
Compensation Plan, as amended and restated
10.06*
EA Bonus Plan
Form of Performance-Based Restricted Stock Unit
Agreement
Form of Performance-Based Restricted Stock Unit
Agreement
Form of Performance-Based Restricted Stock Unit
Agreement
10-K
000-17948
5/22/2009
8-K
8-K
000-17948
5/18/2018
000-17948
5/25/2021
10-K
000-17948
5/25/2022
Form of November 2019 Performance-Based Restricted
Stock Unit Agreement
2000 Equity Incentive Plan, as amended, and related
documents
8-K
000-17948
11/12/2019
8-K
000-17948
8/1/2016
10.12*
2000 Employee Stock Purchase Plan, as amended
10-Q
000-17948
2/8/2022
10.13*
Form of Restricted Stock Unit Agreement
10.14*
Form of Restricted Stock Unit Agreement For Non-
Employee Directors
10.15*
Amended and Restated 2019 Equity Incentive Plan
8-K
000-17948
8/15/2022
87
X
X
X
X
Number
10.16*
10.17*
10.18*
10.19*
10.20*
10.21*
10.22**
10.23**
10.24**
10.25**
10.26
21.1
23.1
31.1
31.2
Filed
Herewith
Incorporated by Reference
Exhibit Title
Electronic Arts Inc. Executive Officer Cash Severance Policy
Form
8-K
File No.
000-17948
Filing Date
9/1/2022
Offer Letter for Employment at Electronic Arts Inc. to
Andrew Wilson, dated September 15, 2013
Offer Letter for Employment at Electronic Arts Inc. to
Christopher Suh, dated January 14, 2022
8-K
000-17948
9/17/2013
8-K
000-17948
1/31/2022
Offer Letter for Employment at Electronic Arts Inc. to Ken
Moss, dated June 6, 2014
10-Q
000-17948
8/5/2014
Offer Letter for Employment at Electronic Arts Inc. to Chris
Bruzzo, dated July 21, 2014
10-Q
000-17948
11/4/2014
Offer Letter for Employment at Electronic Arts Inc. to Mala
Singh, dated August 27, 2016
10-Q
000-17948
11/8/2016
10-K
000-17948
5/21/2014
10-Q
000-17948
11/10/2020
10-Q
000-17948
8/8/2018
10-Q
000-17948
11/10/2020
8-K
000-17948
3/22/2023
Durango Publisher License Agreement, dated June 29, 2012,
by and among Electronic Arts Inc., EA International (Studio
& Publishing) Ltd., Microsoft Licensing, GP and Microsoft
Corporation
Xbox Console Publisher License Agreement, dated as of
September 30, 2020, between Microsoft Corporation,
Electronic Arts Inc. and EA Swiss Sàrl
Playstation Global Developer & Publisher Agreement, dated
April 1, 2018, by and among Electronic Arts Inc., EA
International (Studio & Publishing) Ltd., Sony Interactive
Entertainment Inc., Sony Interactive Entertainment LLC, and
Sony Interactive Entertainment Europe Ltd
PlayStation 5 Amendment to the PlayStation Global
Developer and Publisher Agreement, dated as of October 15,
2020, by and among Electronic Arts Inc., EA Swiss Sàrl,
Sony Interactive Entertainment, Inc., Sony Interactive
Entertainment LLC, and Sony Interactive Entertainment
Europe Limited
Credit Agreement, dated March 22, 2023, by and among
Electronic Arts Inc., the lenders from time to time party
thereto, and JPMorgan Chase Bank, N.A., as Administrative
Agent
Subsidiaries of the Registrant
Consent of KPMG LLP, Independent Registered Public
Accounting Firm
Certification of Chief Executive Officer pursuant to Rule
13a-14(a) of the Exchange Act, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Rule
13a-14(a) of the Exchange Act, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Additional exhibits furnished with this report:
32.1
32.2
101.INS†
101.SCH†
Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
Inline XBRL Instance Document
Inline XBRL Taxonomy Extension Schema Document
88
X
X
X
X
X
X
X
X
Number
101.CAL†
Exhibit Title
Inline XBRL Taxonomy Extension Calculation Linkbase
Document
101.DEF†
Inline XBRL Taxonomy Extension Definition Linkbase
Document
101.LAB†
Inline XBRL Taxonomy Extension Label Linkbase
Document
101.PRE†
Inline XBRL Taxonomy Extension Presentation Linkbase
Document
The Cover Page Interactive Data File, formatted in Inline
XBRL (included in Exhibit 101)
104
*
**
Incorporated by Reference
Form
File No.
Filing Date
Filed
Herewith
X
X
X
X
Management contract or compensatory plan or arrangement.
Confidential portions of these documents have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.
89
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
ELECTRONIC ARTS INC.
By:
/s/ Andrew Wilson
Andrew Wilson
Chief Executive Officer
Date: May 24, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities indicated and on the 24th of May, 2023.
Name
/s/ Andrew Wilson
Andrew Wilson
/s/ Chris Suh
Chris Suh
/s/ Eric Kelly
Eric Kelly
Directors:
/s/ Andrew Wilson
Andrew Wilson
/s/ Kofi A. Bruce
Kofi A. Bruce
/s/ Rachel A. Gonzalez
Rachel A. Gonzalez
/s/ Jeffrey T. Huber
Jeffrey T. Huber
/s/ Talbott Roche
Talbott Roche
/s/ Richard A. Simonson
Richard A. Simonson
/s/ Luis A. Ubiñas
Luis A. Ubiñas
/s/ Heidi Ueberroth
Heidi Ueberroth
Title
Chief Executive Officer
Executive Vice President and
Chief Financial Officer
Senior Vice President and
Chief Accounting Officer
Chair of the Board
Director
Director
Director
Director
Director
Director
Director
90
/J
MIX
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