8x8 2012 Annual Report Download - page 58

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Leases
The Company leases its headquarters facility in Sunnyvale, California under an operating lease agreement that expires in
August 2012. The facility leases include rent escalation clauses, and require the Company to pay utilities and normal
maintenance costs.
On April 27, 2012, the Company entered into a seven-year lease for a new primary facility in San Jose, California, with a
scheduled commencement date of August 1, 2012. The lease is an industrial net lease with monthly base rent of $130,821 for
the first 15 months with a 3% increase each year thereafter. .
At March 31, 2012, future minimum annual lease payments under non-cancelable operating leases, net of sublease income,
were as follows (in thousands):
Year Ending March 31,
2013 $ 938
2014 1,578
2015 1,625
2016 1,674
2017 and Thereafte
r
6,422
Total $ 12,237
Rent expense for the years ended March 31, 2012, 2011 and 2010 was $746,000, $608,000 and $632,000, respectively.
Capital Leases
The Company has non-cancelable capital lease agreements for office equipment bearing interest at various rates. At March 31,
2012, future minimum annual lease payments under noncancelable capital leases were as follows (in thousands):
Year ending March 31:
2013 $ 69
2014 32
2015 21
2016 8
Total minimum payments 130
Less: Amount representing interes
t
(10)
120
Less: Short-term portion of capital lease obligations (57)
Long-term portion of capital lease obligations $ 63
Capital leases included in office equipment were $139,000 at March 31, 2012. Total accumulated amortization was $46,000 at
March 31, 2012. Amortization expense for assets recorded under capital leases is included in depreciation expense.
Minimum Third Party Customer Support Commitments
In the third quarter of 2010, the Company amended its contract with one of its third party customer support vendors containing
a minimum monthly commitment of approximately $430,000 effective April 1, 2010. Theagreementrequiresa‐day
noticetoterminate.AtMarch,,thetotalremainingobligationunderthecontractwas$.million.
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