Electronic Arts 2013 Annual Report Download - page 106

Item 1B: Unresolved Staff Comments
None.
Item 2: Properties
We own our 660,000-square-foot Redwood Shores headquarters facilities located in Redwood City, California
which includes a product development studio and administrative and sales functions. We also own a 418,000-
square-foot product development studio facility in Burnaby, Canada. In addition to the properties we own, we
lease approximately 1.2 million square feet in North America and 0.6 million square feet in Europe and Asia at
various research and development, sales and administration and distribution facilities, including leases for our
research and development studios in Los Angeles, California and Orlando, Florida, and our distribution center in
Louisville, Kentucky.
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. For information regarding our lease commitments,
see Note 12 of the Notes to Consolidated Financial Statements, included in Item 8 in this report.
We do not identify or allocate our assets by operating segment. For information on long-lived assets by
geography, see Note 17 of the Notes to Consolidated Financial Statements, included in Item 8 in this report.
Item 3: Legal Proceedings
In June 2008, Geoffrey Pecover filed an antitrust class action in the United States District Court for the Northern
District of California, alleging that EA obtained an illegal monopoly in a discreet antitrust market that consists of
“league-branded football simulation video games” by bidding for, and winning, exclusive licenses with the NFL,
Collegiate Licensing Company and Arena Football League. In December 2010, the district court granted the
plaintiffs’ request to certify a class of plaintiffs consisting of all consumers who purchased EA’s Madden NFL,
NCAA Football or Arena Football video games after 2005. In May 2012, the parties reached a settlement in
principle to resolve all claims related to this action. As a result, we recognized a $27 million accrual for the
fourth quarter of fiscal 2012 associated with the potential settlement. In July 2012, the plaintiffs filed a motion
with the court to approve the settlement. On October 5, 2012, the court granted its preliminary approval of the
settlement and held a hearing to consider the court’s final approval of the settlement for February 7, 2013. As of
the date of this filing, the Court has not issued an order granting its final approval of the settlement, although the
Company expects that the Court will do so.
In March 2011, Robin Antonick filed a complaint in the United States District Court for the Northern District of
California, alleging that he wrote the source code for the original John Madden Football game published by EA
in 1988 and that EA used certain parts of that source code in later editions in the Madden franchise without
compensating him. Mr. Antonick seeks compensatory damages in the amount of almost $6 million, plus
approximately $10 million in prejudgment interest, in addition to punitive damages and disgorgement of profits.
We believe that there is no merit to Mr. Antonick’s claims. We further believe the likelihood of a judgment
against us that includes punitive damages or the disgorgement of profits is very remote. The trial is scheduled to
begin on June 17, 2013.
We are also 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, included in Item 8 in
this report.
Item 4: Mine Safety Disclosures
Not applicable.
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