Salesforce.com 2014 Annual Report Download - page 109

but not paid. Of the total operating lease commitment balance of $1.4 billion, approximately $1.3 billion is
related to facilities space. The remaining commitment amount is related to computer equipment, other leases,
data center capacity and our development and test data center.
Rent expense for fiscal 2014, 2013 and 2012 was $123.6 million, $88.3 million and $70.3 million,
respectively.
11. Employee Benefit Plan
The Company has a 401(k) plan covering all eligible employees in the United States. Since January 1, 2006,
the Company has been contributing to the plan. Total Company contributions during fiscal 2014, 2013 and 2012,
were $27.9 million, $22.1 million and $15.7 million, respectively.
12. Legal Proceedings and Claims
In the ordinary course of business, the Company is involved in various legal proceedings and claims related
to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and
securities, labor and employment, wage and hour, and other claims. The Company has been, and may in the
future be, put on notice and/or sued by third parties for alleged infringement of their proprietary rights, including
patent infringement.
In general, the resolution of a legal matter could prevent the Company from offering its service to others,
could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely
affect the Company’s operating results.
The Company makes a provision for a liability relating to legal matters when it is both probable that a
liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed
at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice
of legal counsel and other information and events pertaining to a particular matter. In management’s opinion,
resolution of all current matters is not expected to have a material adverse impact on the Company’s consolidated
results of operations, cash flows or financial position. However, depending on the nature and timing of any such
dispute, an unfavorable resolution of a matter could materially affect the Company’s future results of operations
or cash flows, or both, of a particular quarter.
13. Related-Party Transactions
In January 1999, the salesforce.com/foundation, also referred to as the Foundation, a non-profit public
charity, was chartered to build philanthropic programs that are focused on youth and technology. The Company’s
chairman is the chairman of the Foundation. The Company’s chairman, two of the Company’s employees and
one of the Company’s board members hold four of the Foundation’s ten board seats. The Company does not
control the Foundation’s activities, and accordingly, the Company does not consolidate the Foundation’s
statement of activities with its financial results.
Since the Foundation’s inception, the Company has provided at no charge certain resources to Foundation
employees such as office space. The value of these items was approximately $997,000 for fiscal 2014.
Additionally, the Company has donated subscriptions to the Company’s service to other qualified non-profit
organizations. The Company also allows an affiliate of the Foundation to resell the Company’s service to non-
profit organizations. The Company does not charge the affiliate for these subscriptions, so any revenue from
subscriptions provided to non-profit organizations is retained by the Foundation to fund its charitable work. The
value of the subscriptions was approximately $15.1 million for fiscal 2014. The Company plans to continue these
programs.
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