LinkedIn 2014 Annual Report Download - page 111

11. Commitments and Contingencies
Aggregate Future Lease Commitments
The Company leases its office facilities and data centers under operating lease agreements, the
longest of which is expected to expire in 2027. The Company’s future minimum payments, which
exclude operating expenses, under non-cancelable operating leases for office facilities and data centers
having initial terms in excess of one year as of December 31, 2014, are as follows (in thousands):
Operating
Year Ending December 31, Leases(1)
2015 ............................................................. $ 114,582
2016 ............................................................. 135,831
2017 ............................................................. 135,716
2018 ............................................................. 133,698
2019 ............................................................. 132,756
Thereafter ......................................................... 790,561
Total minimum lease payments ........................................ $1,443,144
(1) In January 2015, the Company entered into a sublease agreement for several buildings it leases in
Sunnyvale, California, which have total lease commitments, exclusive of lease incentives, of
$230.0 million. Under the sublease agreement, the Company will receive approximately
$215.3 million in sublease income over the next 12 years.
Legal Proceedings
The Company is subject to legal proceedings and litigation arising in the ordinary course of
business, including, but not limited to, certain pending patent and privacy matters, including class
action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Although
occasional adverse decisions or settlements may occur, the Company does not believe that the final
disposition of any of these matters will have a material adverse effect on the business. Certain of these
matters include speculative claims for substantial or indeterminate amounts of damages, and include
claims for injunctive relief. Additionally, the Company’s litigation costs are significant. Other regulatory
matters could result in fines and penalties being assessed against the Company, and it may become
subject to mandatory periodic audits, which would likely increase its regulatory compliance costs.
Adverse results of litigation or regulatory matters could also result in the Company being required to
change its business practices, which could negatively impact its membership and revenue growth.
The Company records a liability when it believes that it is both probable that a loss has been
incurred and the amount can be reasonably estimated. The Company periodically evaluates
developments in its legal matters that could affect the amount of liability that it has previously accrued,
if any, and makes adjustments as appropriate. Significant judgment is required to determine both
likelihood of there being, and the estimated amount of, a loss related to such matters, and the
Company’s judgment may be incorrect. The outcome of any proceeding is not determinable in
advance. Until the final resolution of any such matters that the Company may be required to accrue for,
it may be exposed to loss in excess of the amount accrued, and such amounts could be material.
Indemnifications
In the ordinary course of business, the Company enters into contractual arrangements under which
it agrees to provide indemnification of varying scope and terms to business partners and other parties
with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach
of such agreements and out of intellectual property infringement claims made by third parties. In these
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