Salesforce.com 2011 Annual Report Download - page 57

Net cash provided by financing activities was $14.1 million during fiscal 2011 and $637.2 million during
the same period a year ago. Net cash provided by financing activities during fiscal 2011 consisted primarily of
$160.4 million of proceeds from the exercise of employee stock options and $36.0 million of excess tax benefits
from employee stock plans, offset by the $172.0 million in purchases of Salesforce Japan shares held by others
and $10.4 million of principal payments on capital leases.
In January 2010, we issued $575.0 million of 0.75% convertible senior notes due January 15, 2015 (the
“Notes”) and concurrently entered into convertible notes hedges (the “Note Hedges”) and separate warrant
transactions (the “Warrants”). The Notes will mature on January 15, 2015, unless earlier converted. As of
January 31, 2011, the Notes have not been repurchased or converted. We also have not received any shares under
the Note Hedges or delivered cash or shares under the Warrants.
For 20 trading days during the 30 consecutive trading days ended January 31, 2011, our common stock
traded at a price exceeding 130% of the conversion price of $85.36 per share applicable to the Notes.
Accordingly, the Notes are convertible at the holders’ option for the quarter ending April 30, 2011. Upon
conversion of any Notes, we will deliver cash up to the principal amount of the Notes and, with respect to any
excess conversion value greater than the principal amount of the Notes, shares of our common stock, cash, or a
combination of both. Therefore, for the quarter ending April 30, 2011, the Notes will be reclassified to a current
liability on our consolidated balance sheet so long as the Notes are convertible.
Our cash, cash equivalents and marketable securities are comprised primarily of corporate notes and
obligations, U.S. agency obligations, U.S. treasury securities, mortgage backed securities, collateralized mortgage
obligations, time deposits, money market mutual funds, government obligations and municipal securities.
As of January 31, 2011, we have a total of $8.9 million in letters of credit outstanding in favor of certain
landlords for office space. To date, no amounts have been drawn against the letters of credit, which renew
annually and mature at various dates through September 2021.
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 our development and test data center, and computer equipment and furniture and
fixtures. At January 31, 2011, the future non-cancelable minimum payments under these commitments were as
follows:
(In thousands)
Contractual Obligations
Payments Due by Period
Total
Less than
1 Year
1-3
Years 3-5 Years
More than
5 Years
Capital lease obligations ........... $ 18,637 $10,830 $ 7,807 $ 0 $ 0
Operating lease obligations:
Facilities space ............... 436,944 75,166 150,438 91,549 119,791
Computer equipment and
furniture and fixtures ........ 62,340 32,177 30,163 0 0
Convertible Senior Notes, including
interest ....................... 592,251 4,313 8,625 579,313 0
Contractual commitments .......... 1,603 3 1,600 0 0
As of February 1, 2011 the Notes are convertible at the option of the noteholder. For 20 trading days during
the 30 consecutive trading days ended January 31, 2011, our common stock traded at a price exceeding 130% of
the conversion price of $85.36 per share applicable to the Notes. Accordingly, the Notes are convertible at the
holders’ option for the quarter ending April 30, 2011. Upon conversion of any Notes, we will deliver cash up to
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