Avid 2011 Annual Report Download - page 47

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42
For the year ended December 31, 2009, the net cash flow provided by financing activities in 2009 reflected proceeds from the
issuance of stock related to the exercise of stock options and purchases under our employee stock purchase plan, partially offset
by costs associated with tax withholding obligations resulting from the issuance of common stock under employee stock plans
and $0.5 million used to repurchase stock options during the second quarter of 2009.
Fair Value Measurements
We value our cash and investment instruments using quoted market prices, broker or dealer quotations, or alternative pricing
sources with reasonable levels of price transparency. See Note E to our Condensed Consolidated Financial Statements included in
Item 8 of this annual report for disclosure of the fair values and the inputs used to determine the fair values of our financial assets
and financial liabilities.
CONTRACTUAL AND COMMERCIAL OBLIGATIONS
The following table sets forth future payments that we were obligated to make at December 31, 2011 under existing lease
agreements and commitments to purchase inventory and other goods and services (in thousands):
Operating leases
Unconditional purchase obligations
Total
$ 119,171
58,261
$ 177,432
Less than
1 Year
$ 22,312
58,261
$ 80,573
1 – 3 Years
$ 36,754
—
$ 36,754
3 – 5 Years
$ 24,239
—
$ 24,239
After
5 Years
$ 35,866
—
$ 35,866
Other contractual arrangements or unrecognized tax positions that may result in cash payments consisted of the following at
December 31, 2011 (in thousands):
Transactions with recourse
Unrecognized tax positions and related interest
Stand-by letters of credit
Total
$ 409
854
6,897
$ 8,160
Less than
1 Year
$ 409
—
3,244
$ 3,653
1 – 3 Years
$ —
—
1,087
$ 1,087
3 – 5 Years
$ —
—
—
$ —
After
5 Years
$ —
—
2,566
$ 2,566
Other (a)
$ —
854
—
$ 854
(a) At December 31, 2011, liability related to unrecognized tax positions and related interest was $12.9 million, of which
$0.9 million would result in cash payments. We are unable to reasonably estimate the timing of the liability in individual
years due to uncertainties in the timing of the effective settlement of the positions.
Our transactions with recourse are related to lease financing options, which we have historically offered to our customers through
a third-party lessor. This program was terminated by mutual agreement among the parties in late 2008; however, balances
outstanding as of the termination date continue to be collected by the third-party lessors as they become due. During the terms of
these financing arrangements, which were generally for three years, we may remain liable for a portion of the unpaid principal
balance in the event of a default on the lease by the end user, but our liability is limited in the aggregate based on a percentage of
initial amounts funded or, in certain cases, amounts of unpaid balances. At December 31, 2011, our maximum exposure under
these programs was approximately $0.4 million.
We have three letters of credit at a bank that are used as security deposits in connection with our leased Burlington, Massachusetts
headquarters office space. In the event of default on the underlying leases, the landlords would, at December 31, 2011, be eligible
to draw against the letters of credit to a maximum of approximately $2.6 million in the aggregate. The letters of credit are subject
to aggregate reductions of approximately $0.4 million at the end of each of the second, third and fifth years, provided that we are
not in default of the underlying leases and meet certain financial performance conditions. In no case will the letters of credit
amounts be reduced to below $1.3 million in the aggregate throughout the lease periods, all of which extend to May 2020. At
December 31, 2011, we were not in default of any of the underlying leases.
We also have a stand-by letter of credit at a bank that is used as a security deposit in connection with our Daly City, California
office space lease. In the event of a default on this lease, the landlord would be eligible to draw against this letter of credit to a