Salesforce.com 2008 Annual Report Download - page 54

Table of Contents
Our cash, cash equivalents and marketable securities are comprised of corporate notes and obligations, U.S. agency obligations, time deposits, money
market mutual funds, asset-backed securities and an investment in The Reserve Primary Fund ("The Reserve Fund"), a money market mutual fund that
suspended redemptions and is in the process of being liquidated.
As of January 31, 2009 our investment portfolio included $19.5 million invested in The Reserve Fund with an estimated fair value of $18.3 million.
During the year ended January 31, 2009 we recorded a $1.2 million loss related to this decline in fair value that is considered other-than-temporary. While we
believe we have the rights to the recovery of the entire $19.5 million investment, we cannot predict the ultimate amount that we will receive. Therefore, we
have recorded the aforementioned other-than-temporary loss. Subsequent to January 31, 2009 we received an additional $6.1 million redemption from The
Reserve Fund.
As of January 31, 2009, we have a total of $8.3 million in letters of credit outstanding in favor of our landlords for office space in San Francisco,
California, New York City, Singapore, Sweden and Switzerland. To date, no amounts have been drawn against the letters of credit, which renew annually and
mature at various dates through December 2016.
We do not have any special purpose entities, and other than operating leases for office space and computer equipment, we do not engage in off-balance
sheet financing arrangements. Additionally, we currently do not have a bank line of credit.
Our principal commitments consist of obligations under leases for office space and co-location facilities for data center capacity and the development
and test data center, and computer equipment and furniture and fixtures. At January 31, 2009, the future non-cancelable minimum payments under these
commitments were as follows:
Payments Due by Period
Contractual Obligations Total
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
(in thousands)
Capital lease obligations $ 6,444 $ 2,394 $ 4,050 $ — $ —
Operating lease obligations:
Facilities space 257,245 49,502 81,204 67,025 59,514
Computer equipment and furniture and fixtures 55,391 31,001 24,390 — —
Contractual commitments $ 1,526 1,234 292 — —
Our lease agreements provide us with the option to renew. Our future operating lease obligations would change if we exercised these options and if we
entered into additional operating lease agreements as we expand our operations.
Purchase orders are not included in the table above. Our purchase orders represent authorizations to purchase rather than binding agreements. The
contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding and that specify all significant
terms, including: fixed or minimum services to be used; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
Obligations under contracts that we can cancel without a significant penalty are not included in the table above.
We adopted Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes, ("FIN 48") on February 1, 2007. 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. For further information, see Note 7 to the notes to consolidated financial statements.
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