Salesforce.com 2012 Annual Report Download - page 57

As of January 31, 2012, we have a total of $17.5 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 April 2030.
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, 2012, 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 ........... $ 60,997 $27,585 $ 30,125 $ 3,287 $ 0
Operating lease obligations:
Facilities space ............... 607,738 91,625 148,080 117,718 250,315
Computer equipment and
furniture and fixtures ........ 60,082 32,622 27,460 0 0
Convertible Senior Notes, including
interest ....................... 587,938 4,313 583,625 0 0
Contractual commitments .......... 200 100 100 0 0
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.
In January 2012, we entered into an office lease agreement to lease approximately 400,000 rentable square
feet at 50 Fremont Street, San Francisco, CA. The cost of the lease is approximately $209.0 million over the 18-
year term of the lease. We will take possession of the premises in phases beginning April 1, 2012. Our
commitment is included in the table above.
On June 7, 2011, we entered into a preliminary settlement agreement with respect to a California state wage
and hour lawsuit that had been filed against us early in 2011 in the Superior Court of California, County of San
Francisco. The settlement agreement is subject to approval of the court, which is expected to rule by mid 2012.
Our current estimate of the expense charge for the settlement is approximately $0.04 per diluted share. This
charge is reflected in our financial results for fiscal 2012.
We anticipate making a tax payment of approximately $40.0 million during the first quarter of fiscal 2013 as
a result of the Radian6 transaction. Besides the aforementioned Radian6 tax payment, the timing of tax
settlements are not included in the table above. We are unable to make a reasonable estimate of the timing of
payments in individual years beyond 12 months due to uncertainties in the timing of tax settlements. For further
information, see Note 6 to the notes to consolidated financial statements.
We believe our existing cash, cash equivalents and short-term marketable securities and cash provided by
operating activities will be sufficient to meet our working capital and capital expenditure needs over the next
12 months.
53