Google 2009 Annual Report Download - page 71

Contractual Obligations as of December 31, 2009
Payments due by period
Total Less than 1 year 1-3 years 3-5 years More than 5 years
(unaudited, in millions)
Operating lease obligations ............................ $2,462.0 $ 283.2 $534.0 $ 413.1 $ 1,231.7
Purchase obligations .................................. 360.7 271.4 72.4 10.2 6.7
Other long-term liabilities reflected on our balance sheet
under GAAP ....................................... 177.4 13.1 134.6 5.6 24.1
Guaranteed minimum revenue share payments ........... 133.3 122.1 11.2 — —
Total contractual obligations ........................... $3,133.4 $689.8 $ 752.2 $428.9 $1,262.5
The above table does not include contingent consideration that may be paid pursuant to asset purchases or
business combinations. It also does not include payments related to toolbar and other product distribution
arrangements as those arrangements do not include guaranteed obligations.
Operating Leases
We have entered into various non-cancelable operating lease agreements for certain of our offices, land, and
data centers throughout the world with original lease periods expiring between 2010 and 2063. We are committed
to pay a portion of the related operating expenses under certain of these lease agreements. These operating
expenses are not included in the table above. Certain of these leases have free or escalating rent payment
provisions. We recognize rent expense under such leases on a straight-line basis over the term of the lease.
Purchase Obligations
Purchase obligations represent non-cancelable contractual obligations at December 31, 2009. In addition, we
had $1.9 billion of open purchase orders for which we have not received the related services or goods at
December 31, 2009. This amount is not included in the above table because we have the right to cancel the
purchase orders prior to the date of delivery. The majority of our non-cancelable contractual obligations are related
to data center operations and facility build-outs.
Other Long-Term Liabilities
Other long-term liabilities consist of cash obligations, primarily the legal settlement with the Authors Guild
and the AAP and milestone and royalty payments owed in connection with certain acquisitions and licensing
agreements.
In addition, we recognized additional long-term taxes payable of $496.5 million in the year ended December 31,
2009 related to tax positions for which the timing of the ultimate resolution is uncertain. At this time, we are unable
to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to
uncertainties in the timing of tax audit outcomes. As a result, this amount is not included in the table above.
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 adjusted downward based
on our Google Network members not achieving defined performance targets, such as number of advertisements
displayed or search queries. We believe the amounts included in the table above represent a reasonable estimate of
the future minimum guaranteed payments. Actual guaranteed payments may differ from the estimates. To date,
the aggregate advertiser fees generated under these AdSense agreements have exceeded the aggregate
guaranteed minimum revenue share payments.
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