Google 2015 Annual Report Download - page 87

Table of Contents Alphabet Inc. and Google Inc.
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As of December 31, 2015, future minimum payments under non-cancelable operating leases, net of sublease
income amounts, were as follows over each of the next five years and thereafter (in millions):
Operating
Leases Sub-lease Income
Net
Operating
Leases
2016 672 26 646
2017 794 13 781
2018 796 4 792
2019 769 3 766
2020 719 3 716
Thereafter 3,706 1 3,705
Total minimum payments $ 7,456 $ 50 $ 7,406
Certain leases have adjustments for market provisions. Amounts in the above table represent our best estimates
of future payments to be made under these leases.
We entered into certain non-cancelable lease agreements with original lease periods expiring between 2021 and
2032 where we are the deemed owner for accounting purposes of new construction projects. Future minimum lease
payments under such leases total approximately $678 million, of which $422 million is included on the Consolidated
Balance Sheet as of December 31, 2015. These amounts are presented as an asset and corresponding non-current
liability, which represents our estimate of construction costs incurred to date. They have been excluded from the table
above.
Rent expense under operating leases, including co-location arrangements, was $465 million, $570 million, and
$734 million in 2013, 2014, and 2015.
Purchase Obligations
As of December 31, 2015, we had $1.7 billion of other non-cancelable contractual obligations, primarily related
to data center operations and facility build-outs, video and other content licensing revenue sharing arrangements, as
well as certain inventory purchase commitments.
Letters of Credit
As of December 31, 2015, we had unused letters of credit for $752 million.
Indemnifications
In the normal course of business, to facilitate transactions in our services and products, we indemnify certain
parties, including advertisers, Google Network Members, and lessors with respect to certain matters. We have agreed
to hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual
property infringement or other claims made against certain parties. Several of these agreements limit the time within
which an indemnification claim can be made and the amount of the claim. In addition, we have entered into
indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations
to our agents.
It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification
agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have
a limited history of prior indemnification claims and the payments we have made under such agreements have not
had a material adverse effect on our results of operations, cash flows, or financial position. However, to the extent that
valid indemnification claims arise in the future, future payments by us could be significant and could have a material
adverse effect on our results of operations or cash flows in a particular period.
As of December 31, 2015, we did not have any material indemnification claims that were probable or reasonably
possible. As part of the sale of Motorola Home and Motorola Mobile businesses, we issued indemnifications for certain
potential liabilities. Please see Note 9 for additional information.
Legal Matters
Antitrust Investigations
On November 30, 2010, the European Commission's (EC) Directorate General for Competition opened an
investigation into various antitrust-related complaints against us. On April 15, 2015, the EC issued a Statement of