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Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
96
For fiscal 2015, there were no options to purchase shares of common stock with exercise prices greater than the average
fair market value of our stock of $79.22 that would have been anti-dilutive.
For fiscal 2014 and 2013, options to purchase shares of common stock with exercise prices greater than the average fair
market value of our stock of $65.93 and $45.08, respectively, were not included in the calculation because the effect would have
been anti-dilutive. The number of shares of common stock under these options was immaterial.
NOTE 15. COMMITMENTS AND CONTINGENCIES
Lease Commitments
We lease certain of our facilities and some of our equipment under non-cancellable operating lease arrangements that expire
at various dates through 2028. We also have one land lease that expires in 2091. Rent expense includes base contractual rent and
variable costs such as building expenses, utilities, taxes, insurance and equipment rental. Rent expense for these leases was
approximately $92.9 million, $111.1 million, and $119.0 million in fiscal 2015, 2014 and 2013. Our sublease income was immaterial
for all periods presented.
We occupy three office buildings in San Jose, California where our corporate headquarters are located. We reference these
office buildings as the Almaden Tower and the East and West Towers. We own the land and the East and West Tower buildings,
and lease the Almaden Tower building. See Note 6 for discussion of our East and West Towers purchase.
The lease agreement for the Almaden Tower is effective through March 2017. We are the investors in the lease receivable
related to the Almaden Tower lease in the amount of $80.4 million, which is recorded as investment in lease receivable on our
Consolidated Balance Sheets. As of November 27, 2015, the carrying value of the lease receivable related to the Almaden Tower
approximated fair value. Under the agreement for the Almaden Tower, we have the option to purchase the building at any time
during the lease term for $103.6 million. If we purchase the building, the investment in the lease receivable may be credited against
the purchase price. The residual value guarantee under the Almaden Tower obligation is $89.4 million.
The Almaden Tower lease is subject to standard covenants including a certain financial ratio that is reported to the lessor
quarterly. As of November 27, 2015, we were in compliance with all of the covenants. In the case of a default, the lessor may
demand we purchase the building for an amount equal to the lease balance, or require that we remarket or relinquish the building.
If we choose to remarket or are required to do so upon relinquishing the building, we are bound to arrange the sale of the building
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 lease receivable. The Almaden Tower lease qualifies for operating
lease accounting treatment and, as such, the building and the related obligation are not included in our Consolidated Balance
Sheets.
Unconditional Purchase Obligations
Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business.