Property and Equipment

6 Months Ended

Jun. 30, 2011

Property and Equipment

Property and Equipment

2. Property and Equipment

On March 11, 2011, we completed the purchase of real property comprising approximately 184,000 square feet of land, which includes 82,000 square feet of office space located at 1940 East Mariposa Avenue, El Segundo, California, which will be our new corporate headquarters. Our plan is to move into this building from our current headquarters located in Torrance, California in early fall of 2011 before the expiration of the Torrance lease. The total purchase price was $9.6 million. Based on the proportionate appraised values, we allocated $7.4 million of the purchase price to land and $2.2 million to building. We expect to make certain improvements on the property for an expected cost of up to $4.5 million. Depreciation on the building will begin when the improvements are completed and the building is placed into service, which is currently expected to be in the second half of 2011. In June 2011, we entered into a credit agreement to finance the purchase and improvement of this real property. The credit agreement provides a commitment for a loan up to $10.9 million of which there was $7.2 million outstanding at a June 30, 2011. See Note 5 below for more information.