Google 2008 Annual Report Download - page 104

Google Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At December 31, 2008, future minimum payments under non-cancelable operating leases, along with
sublease income amounts, are as follows over each of the next five years and thereafter (in thousands):
Operating
Leases Sub-lease Income
Net
Operating
Leases
2009 ........................................................... $ 302,403 $ 26,974 $ 275,429
2010 ............................................................ 298,551 24,548 274,003
2011 ............................................................. 277,256 21,388 255,868
2012 ............................................................ 248,582 12,031 236,551
2013 ............................................................ 217,615 6,185 211,430
Thereafter ....................................................... 1,615,563 10,850 1,604,713
Total minimum payments required .................................. $2,959,970 $101,976 $2,857,994
Rent expense under operating leases was $80.7 million, $127.9 million and $215.6 million in 2006, 2007, and
2008.
Guaranteed Minimum Revenue Share Payments
In connection with our AdSense revenue share agreements, we are periodically required to make
non-cancelable guaranteed minimum payments to a small number of our Google Network members over the term
of the respective contracts. Under our contracts, these guaranteed payments may be prorated down based on our
Google Network members not achieving defined performance targets, such as number of advertisements
displayed or search queries. In most cases, certain guaranteed amounts will be adjusted downward if our Google
Network members do not meet their performance targets. In all of these AdSense agreements, if a Google Network
member were unable to perform under the contract, such as being unable to provide search queries, as defined
under the terms of that agreement, then we would not be obligated to make any non-cancelable guaranteed
minimum revenue payments to that member. At December 31, 2008, our aggregate outstanding non-cancelable
guaranteed minimum revenue share commitments totaled $1,030.3 million through 2012 compared to
$1,746.4 million at December 31, 2007.
Purchase Obligations
We had $140.9 million of other non-cancelable contractual obligations and $1.3 billion of open purchase
orders for which we had not received the related services or goods at December 31, 2008. We have the right to
cancel these open purchase orders prior to the date of delivery. The majority of these purchase obligations are
related to data center operations and facility build-outs.
Letters of Credit
At December 31, 2008 and associated with several leased facilities, we had unused letters of credit for
$109.9 million. At December 31, 2008, we were in compliance with our financial covenants under the letters of
credit.
Indemnifications
In the normal course of business to facilitate transactions of our services and products, we indemnify certain
parties, including advertisers, Google Network members and lessors, with respect to certain matters. We have
agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or
out of intellectual property infringement or other claims made against certain parties. These agreements may limit
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