Avid 2014 Annual Report Download - page 55

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CONTRACTUAL AND COMMERCIAL OBLIGATIONS
The following table sets forth future payments that we were obligated to make at December 31, 2014 under existing lease
agreements and commitments to purchase inventory and other goods and services (in thousands):
Total Less than
1 Year 1 – 3 Years 3 – 5 Years After 5 Years
Operating leases $ 69,666 $ 14,964 $ 25,149 $ 19,425 $ 10,128
Unconditional purchase obligations (a) 22,538 22,538 — — —
$ 92,204 $ 37,502 $ 25,149 $ 19,425 $ 10,128
(a) At December 31, 2014, we had entered into purchase commitments for certain inventory and other goods and services used in our
normal operations. The purchase commitments covered by these agreements are generally for a period of less than one year.
Other contractual arrangements or unrecognized tax positions that may result in cash payments consisted of the following at
December 31, 2014 (in thousands):
Total Less than
1 Year 1 – 3 Years 3 – 5 Years After 5 Years
Unrecognized tax positions and related interest $ 812 $ — $ 812 $ — $ —
Stand-by letters of credit 3,888 1,322 — 2,566 —
$ 4,700 $ 1,322 $ 812 $ 2,566 $ —
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, 2014, be eligible
to draw against the letters of credit to a maximum of $2.6 million in the aggregate. The letters of credit are subject to aggregate
reductions 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 $1.2 million in the aggregate throughout the lease periods, all of which
extend to May 2020.
In addition, we have letters of credit totaling $1.3 million that support our ongoing operations. These letters of credit have various
terms and expire during 2015 and beyond, while some of the letters of credit may automatically renew based on the terms of the
underlying agreements.
We operate our business globally and, consequently, our results from operations are exposed to movements in foreign currency
exchange rates. We enter into foreign currency contracts, which generally have one-month maturities, to reduce exposures
associated with the foreign exchange risks of certain forecasted third-party and intercompany receivables, payables and cash
balances. At December 31, 2014, we had foreign currency contracts outstanding with an aggregate notional value of $25.4
million, denominated in the euro, British pound, Japanese yen, Danish krone, Canadian dollar and Singapore dollar, as a hedge
against forecasted foreign currency denominated receivables, payables and cash balances.
OFF-BALANCE SHEET ARRANGEMENTS
Other than operating leases, we do not engage in off-balance sheet financing arrangements or have any variable-interest entities.
At December 31, 2014, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
RECENT ACCOUNTING PRONOUNCEMENTS
Recent Accounting Pronouncements To Be Adopted
On May 28, 2014, the Financial Accounting Standards Board, or the FASB, and the International Accounting Standards Board, or
the IASB, issued substantially converged final standards on revenue recognition. FASB Accounting Standards Update, or ASU,
No. 2014-09, Revenue from Contracts with Customers (Topic 606), was issued in three parts: (a) Section A, “Summary and