Electronic Arts 1999 Annual Report Download - page 20

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Contingency Plans We continue to assess certain of our Year 2000 exposure areas in order to determine what
additional steps beyond those identified by our internal review in the United States are advisable. We are currently develop-
ing a contingency plan for handling Year 2000 problems that are not detected and corrected prior to their occurrence. We
expect this plan will be completed by June 30, 1999. We believe that the systems, which represent the principal exposures,
have been identified, and to the extent necessary, are in the process of being modified to become Year 2000 compliant.
Additionally, we will be conducting tests of our principal business systems to verify that those systems are Year 2000
compliant. Any failure to address any unforeseen Year 2000 issue could adversely affect our business, financial condition
and results of operations.
EURO CONVERSION
On January 1, 1999, eleven of the fifteen member countries of the European Union established fixed conversion rates
between their existing currencies (the “legacy currency”) and the one common legal currency known as the “Euro.” From
January 1, 1999 through June 30, 2002 the countries will be able to use their legacy currencies or the Euro to transact busi-
ness. By July 1, 2002, at the latest, the conversion to the Euro will be complete at which time the legacy currencies will no
longer be legal tender. The conversion to the Euro will eliminate currency exchange rate risk between the member countries.
We do not anticipate any material impact from the Euro conversion on our financial information systems which currently
accommodate multiple currencies. Computer software changes necessary to comply with the Year 2000 issue are generally
compliant to the Euro conversion issue. Due to numerous uncertainties, we cannot reasonably estimate the effect that
the Euro conversion issue will have on our pricing or market strategies, and the impact, if any, it will have on our financial
condition and results of operations.
RISK FACTORS
Our business is subject to many risks and uncertainties which may affect our performance. Some of those risks and
uncertainties are as follows:
• Product development schedules are frequently unreliable and make predicting quarterly results difficult.
• New video game platforms create additional technical and business model uncertainties.
• The business models and technology for e-commerce and online gaming are unproven.
• Our business, our products and our distribution are subject to increasing regulation in key territories.
• Our platform licensors are our chief competitors and frequently control manufacturing of our video game products.
• We face intense competition for talent from highly valued Internet companies.
For a discussion of these and other important risk factors, see the heading “Risk Factors” in our Annual Report on
Form 10-K for the year ended March 31, 1999.