Adobe 2012 Annual Report Download - page 115

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$126.8 million and $89.4 million, respectively. If we purchase the properties, the investments in the lease receivables may be
credited against the purchase price.
These two leases are both subject to standard covenants including certain financial ratios that are reported to the lessors
quarterly. In August 2009, we were required to obtain a standby letter of credit for approximately $16.6 million which enabled
us to secure a lower interest rate and reduce the number of covenants. As defined in the lease agreement, the standby letter of
credit primarily represents the lease investment equity balance which is callable in the event of default. As of November 30, 2012,
we were in compliance with all of the covenants. In the case of a default, the lessor may demand we purchase the buildings for
an amount equal to the lease balance, or require that we remarket or relinquish the buildings. If we choose to remarket or are
required to do so upon relinquishing the buildings, we are bound to arrange the sale of the buildings to an unrelated party and
will be required to pay the lessor any shortfall between the net remarketing proceeds and the lease balance, up to the residual
value guarantee amount less our investment in the lease receivables. Both leases qualify for operating lease accounting treatment
and, as such, the buildings and the related obligations are not included in our Consolidated Balance Sheets.
See Note 16 for discussion of our capital lease obligation.
Unconditional Purchase Obligations
Our purchase obligations consist of agreements to purchase goods and services entered in the ordinary course of business.
The following table summarizes our non-cancellable unconditional purchase obligations, operating leases and capital leases
for each of the next five years and thereafter as of November 30, 2012 (in thousands):
Operating Leases Capital Leases
Fiscal Year Purchase Obligations
Future
Minimum
Lease
Payments
Future
Minimum
Sublease
Income
Future
Minimum
Lease
Payments
2013.......................................................... $ 256,353 $ 48,562 $ 1,236 $ 11,411
2014.......................................................... 22,334 42,843 511 1,773
2015.......................................................... 24,190 31,156 505 —
2016.......................................................... 23,925 25,833 430 —
2017.......................................................... 3,361 21,726 396 —
Thereafter ................................................. 12,004 80,235 1,184 —
Total....................................................... $ 342,167 $ 250,355 $ 4,262 $ 13,184
Less: interest............................................. (341)
Total....................................................... $ 12,843
The table above includes operating lease commitments related to our restructured facilities. See Note 10 for information
regarding our restructuring charges.
Guarantees
The lease agreements for our corporate headquarters provide for residual value guarantees as noted above. The fair value
of a residual value guarantee in lease agreements entered into after December 31, 2002, must be recognized as a liability on our
Consolidated Balance Sheets. As such, we recognized $5.2 million and $3.0 million in liabilities, related to the extended East
and West Towers and Almaden Tower leases, respectively. These liabilities were recorded in other long-term liabilities with the
offsetting entry recorded as prepaid rent in other assets. The balance was amortized to our Consolidated Statements of Income
over the life of the original leases. As of November 30, 2012 there was no remaining balance of the unamortized portion of the
fair value of the residual value guarantees, for either lease, remaining on our Consolidated Balance Sheets.
Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)