Electronic Arts 2016 Annual Report Download - page 129

Annual Report
Financial Condition
We believe that our cash, cash equivalents, short-term investments, cash generated from operations and available
financing facilities will be sufficient to meet our operating requirements for at least the next 12 months, including
working capital requirements, capital expenditures, debt repayment obligations, and potentially, future
acquisitions, stock repurchases, 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.
As of March 31, 2016, approximately $2 billion of our cash, cash equivalents, and short-term investments were
domiciled in foreign tax jurisdictions. While we have no plans to repatriate these funds to the United States in the
short term, if we choose to do so, we may be required to accrue and pay additional taxes on any portion of the
repatriation where no United States income tax had been previously provided.
In May 2014, a special committee of our Board of Directors, on behalf of the full Board of Directors, authorized
a two-year program to repurchase up to $750 million of our common stock. Since inception, we repurchased
approximately 9.2 million shares for approximately $394 million under this program.
In May 2015, our Board of Directors authorized a program to repurchase up to $1 billion of our common stock.
This stock repurchase program, which expires on May 31, 2017, supersedes and replaces the stock repurchase
authorization approved in May 2014. Under the May 2015 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 any specific number of shares under this program
and it may be modified, suspended or discontinued at any time.
During fiscal year 2016, we repurchased approximately 1.0 million shares for approximately $57 million under
the May 2014 program and we repurchased approximately 6.9 million shares for approximately $461 million
under the May 2015 program. We continue to actively repurchase shares under the May 2015 program.
In February 2016, we announced a new $500 million stock repurchase program. This new program was
incremental to the existing two-year $1 billion stock repurchase program announced in May 2015. We completed
repurchases under the February 2016 program during the quarter ended March 31, 2016. We repurchased
approximately 7.8 million shares for approximately $500 million under this new program.
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, including 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, those related 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, the impact of acquisitions and other strategic transactions in which we may engage, the impact
of competition, economic conditions in the United States and abroad, the seasonal and cyclical nature of our
business and operating results, risks of product returns and the other risks described in the “Risk Factors” section,
included in Part I, Item 1A of this report.
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