Electronic Arts 2009 Annual Report Download - page 104
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provide space for research and development functions. Our rental obligation over the initial five-and-a-half year
term of the lease is $15 million.
In July 2003, we entered into a lease agreement with an independent third party (the “Landlord”) for a studio
facility in Los Angeles, California, which commenced in October 2003 and expires in September 2013 with two
five-year options to extend the lease term. Additionally, we have options to purchase the property after five and
ten years based on the fair market value of the property at the date of sale, a right of first offer to purchase the
property upon terms offered by the Landlord, and a right to share in the profits from a sale of the property.
Existing campus facilities comprise a total of 243,000 square feet and provide space for research and
development functions. Our rental obligation under this agreement is $50 million over the initial ten-year term of
the lease. This commitment is offset by expected sublease income of $6 million for a sublease to an affiliate of
the Landlord of 18,000 square feet of the Los Angeles facility, which commenced in October 2003 and expires in
September 2013.
Our North American distribution center is supported by a centralized warehouse facility that we lease in
Louisville, Kentucky, occupying 250,000 square feet.
While we continually evaluate our facility requirements, we believe that suitable additional or substitute space
will be available as needed to accommodate our future needs.
Item 3: 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 position or results of operations.
Item 4: Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of our security holders during the quarter ended March 31, 2009.
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