Salesforce.com 2016 Annual Report Download - page 110
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Loan Assumed on 50 Fremont
The Company assumed a $200.0 million loan with the acquisition of 50 Fremont (the “Loan”). The Loan
bears an interest rate of 3.75% per annum and is due in June 2023. The Loan initially requires interest only
payments. Beginning in fiscal year 2019, principal and interest payments are required, with the remaining
principal due at maturity. For the fiscal year 2016, total interest expense recognized was $7.3 million. The Loan
can be prepaid at any time subject to a yield maintenance fee. The agreement governing the Loan contains certain
customary affirmative and negative covenants that the Company was in compliance with as of January 31, 2016.
Interest Expense on Convertible Senior Notes, Revolving Credit Facility and Loan Secured by 50 Fremont
The following table sets forth total interest expense recognized related to the Notes, the Term Loan and the
Credit Facility prior to capitalization of interest (in thousands):
Fiscal Year Ended January 31,
2016 2015 2014
Contractual interest expense ................... $11,879 $10,224 $10,195
Amortization of debt issuance costs .............. 4,105 4,622 4,470
Amortization of debt discount .................. 24,504 36,575 46,942
$40,488 $51,421 $61,607
6. Other Balance Sheet Accounts
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
As of
January 31,
2016
January 31,
2015
Prepaid income taxes ........................... $ 22,044 $ 21,514
Customer contract asset ......................... 1,423 16,620
Other taxes receivable ........................... 27,341 27,540
Prepaid expenses and other current assets ........... 199,786 179,352
$250,594 $245,026
Customer contract asset reflects future billings of amounts that are contractually committed by
ExactTarget’s existing customers as of the acquisition date that will be billed in the next 12 months. As the
Company bills these customers this balance will reduce and accounts receivable will increase.
Included in prepaid expenses and other current assets are value-added tax and sales tax receivables
associated with the sale of the Company’s services to third parties. Value-added tax and sales tax receivables
totaled $27.3 million and $27.5 million at January 31, 2016 and 2015, respectively.
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