EMC 2002 Annual Report Download - page 27

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Table of Contents
Off-Balance Sheet Arrangements, Contractual Obligations and Contingent Liabilities and Commitments
Contractual Obligations
We have various contractual obligations impacting our liquidity. The following represents our contractual obligations as of December 31, 2002:
Payments Due by Period
Total Less than 1 year 1-3 years 4-5 years After 5 years
Capital leases $ 8.3 $ 7.3 $ 1.0 $ — $ —
Operating leases 545.1 186.3 192.7 87.6 78.5
Other long-term obligations, including notes payable and current portion of long-term obligations 185.6 128.2 12.3 1.6 43.5
Purchase orders 830.8 775.9 54.9 — —
Total $1,569.8 $ 1,097.7 $ 260.9 $ 89.2 $ 122.0
Our operating leases are primarily for office space around the world. We believe leasing such space is more cost-effective than purchasing real estate.
The other long-term obligations, including notes payable and the current portion of long-term obligations, consist primarily of $151.9 of obligations
associated with the Data General pension and post-retirement medical and life insurance plans. The purchase orders are for manufacturing and non-
manufacturing related goods and services. While the purchase orders are generally cancelable without penalty, certain vendor agreements provide for
percentage-based cancellation fees or minimum restocking charges based on the nature of the product or service.
Off-Balance Sheet Arrangements, Contingent Liabilities and Commitments
Guarantees and Indemnification Obligations
EMC's subsidiaries have entered into arrangements with financial institutions to provide guarantees for rent, taxes, insurance, leases, performance
bonds, bid bonds and customs duties aggregating $38.0 as of December 31, 2002. The guarantees vary in length of time. In connection with these
arrangements, we have agreed to guarantee substantially all of the guarantees provided by these financial institutions. We have also agreed to guarantee our
Brazilian subsidiary's $50.0 line of credit.
We enter into agreements in the ordinary course of business with, among others, customers, resellers, OEMs, systems integrators and distributors. Most
of these agreements require us to indemnify the other party against third party claims alleging that an EMC product infringes a patent or copyright. Certain of
these agreements require us to indemnify the other party against certain claims relating to property damage, personal injury or acts or omissions of EMC, its
employees, agents or representatives. In addition, from time to time we have made certain guarantees regarding the performance of our systems to our
customers.
We have agreements with certain vendors, financial institutions, lessors and service providers pursuant to which we have agreed to indemnify the other
party for certain matters, such as acts and omissions of EMC, its employees, agents or representatives.
We have procurement or license agreements with respect to technology that is used in EMC products and agreements in which we obtain rights to a
product from an OEM. Under certain of these agreements, we have agreed to indemnify the supplier for certain claims that may be brought against such party
with respect to EMC's acts or omissions relating to the supplied products or technologies.
We have agreements with each of our directors and executive officers to indemnify such director or executive officer, to the extent legally permissible,
against all liabilities reasonably incurred in connection with
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