Electronic Arts 2015 Annual Report Download - page 92

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 1 million square feet in Europe and Asia at
various research and development, sales and administration and distribution facilities, including leases for our
development studios in Orlando, Florida and Stockholm, Sweden.
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 13 of the Notes to Consolidated Financial Statements, included in Item 8 in this report. For information
on long-lived assets by geography, see Note 18 of the Notes to Consolidated Financial Statements, included in
Item 8 in this report.
Item 3: Legal Proceedings
We are a defendant in several actions that allege we misappropriated the likenesses of various college athletes in
certain of our college-themed sports games. In September 2013, we reached an agreement to settle all actions
brought by college athletes against us. We recognized a $30 million accrual during the three months ended
September 30, 2013 associated with the anticipated settlement. On September 3, 2014, the United States District
Court for the Northern District of California granted preliminary approval of the settlement and set a hearing in
July 2015, to determine whether to grant its final approval of the settlement.
On July 29, 2010, Michael Davis, a former NFL running back, filed a putative class action in the United States
District Court for the Northern District of California against the Company, alleging that certain past versions of
Madden NFL included the images of certain retired NFL players without their permission. In March 2012, the
trial court denied the Company’s request to dismiss the complaint on First Amendment grounds. In January 2015,
that trial court decision was affirmed by the Ninth Circuit Court of Appeals and the case was remanded back to
the district court. The Company intends to seek further court review.
On December 17, 2013, a purported shareholder class action lawsuit was filed in the United States District Court
for the Northern District of California against the Company and certain of its officers by an individual purporting
to represent a class of purchasers of EA common stock. A second purported shareholder class action lawsuit
alleging substantially similar claims was subsequently filed in the same court. These lawsuits have been
consolidated into one action. The lawsuits, which assert claims under Section 10(b) and 20(a) of the Securities
Exchange Act of 1934, allege, among other things, that the Company and certain of its officers issued materially
false and misleading statements regarding the rollout of the Company’s Battlefield 4 game. We filed a motion
seeking dismissal of all claims on January 15, 2015 and on April 30, 2015, the court granted our motion to
dismiss with prejudice.
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.
Item 4: Mine Safety Disclosures
Not applicable.
22