Electronic Arts 2004 Annual Report Download - page 31

Item 2: Properties
We own or lease the following facilities. We believe that suitable additional or substitute space will be
available as needed to accommodate our future needs.
Redwood City, California Headquarters Campus
Our principal administrative, sales and marketing, and support facility is located in Redwood City, California.
This location also includes facilities for research and development.
In February 1995, we entered into a build-to-suit lease with a third party for our headquarters facility in
Redwood City, California, which was reÑnanced with Keybank National Association in July 2001 and expires
in July 2006. We accounted for this arrangement as an operating lease in accordance with Statements of
Financial Accounting Standards (""SFAS'') No. 13, ""Accounting for Leases'', as amended. Existing campus
facilities developed in phase one comprise a total of 350,000 square feet and provide space for sales,
marketing, administration and research and development functions. We have an option to purchase the
property (land and facilities) for a maximum of $145.0 million or, at the end of the lease, to arrange for (i) an
extension of the lease or (ii) sale of the property to a third party while we retain an obligation to the owner for
approximately 90 percent of the diÅerence between the sale price and the guaranteed residual value of up to
$128.9 million if the sales price is less than this amount, subject to certain provisions of the lease.
In December 2000, we entered into a second build-to-suit lease with Keybank National Association for a Ñve-
year term beginning December 2000 to expand our Redwood City, California headquarters facilities and
develop adjacent property adding approximately 310,000 square feet to our campus. Construction was
completed in June 2002. We accounted for this arrangement as an operating lease in accordance with
SFAS No. 13, as amended. The facilities provide space for marketing, sales and research and development.
We have an option to purchase the property for a maximum of $130.0 million or, at the end of the lease, to
arrange for (i) an extension of the lease, or (ii) sale of the property to a third party while we retain an
obligation to the owner for approximately 90 percent of the diÅerence between the sale price and the
guaranteed residual value of up to $118.8 million if the sales price is less than this amount, subject to certain
provisions of the lease.
Louisville, Kentucky Distribution Center
Our North American distribution is supported by a centralized warehouse facility that we lease in Louisville,
Kentucky occupying 250,000 sq. ft.
North American Development Studios
In addition to the product development studio facility located in our Redwood City headquarters campus:
䡵We own a 206,000 sq. ft. product development studio facility in Burnaby, British Columbia, Canada,
䡵We own a 173,500 sq. ft. development facility in Austin, Texas that we are in the process of selling as
part of a restructuring. Please see Note 6 of the Notes to Consolidated Financial Statements,
included in Item 8 hereof, for a discussion of the restructuring charges, and
䡵We lease product development studio facilities in Los Angeles (243,000 sq. ft.), California, Maitland
(92,000 sq. ft.), Florida, Vancouver (65,000 sq. ft.) and Burnaby (20,000 sq. ft.), British Columbia,
Chicago (14,000 sq. ft.), Illinois, Montreal (10,000 sq. ft.), Quebec and Walnut Creek, California.
Our Walnut Creek facility is included in our current restructuring, as discussed in Note 6 of Notes
to Consolidated Financial Statements, included in Item 8 hereof.
European Facilities
We own a 127,000 sq. ft. administrative, sales and development facility in Chertsey, England and a
5,000 sq. ft. development facility in Warrington, England. We also lease sales and administrative space in
Austria, Brazil, the Czech Republic, Denmark, England, Finland, France, Germany, Greece, Hungary, Italy,
the Netherlands, Norway, Poland, Portugal, Spain, Sweden, and Switzerland.
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