Yahoo 2008 Annual Report Download - page 106

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
Many of the Company’s leases contain one or more of the following options which the Company can exercise at
the end of the initial lease term: (a) renewal of the lease for a defined number of years at the then fair market
rental rate or at a slight discount to the fair market rental rate; (b) purchase of the property at the then fair market
value; or (c) right of first offer to lease additional space that becomes available.
Gross and net lease commitments as of December 31, 2008 can be summarized as follows (in millions):
Gross Operating
Lease Commitments
Sublease
Income
Net Operating
Lease Commitments
Years ending December 31,
2009 ............................................... $149 $ (3) $146
2010 ............................................... 128 (2) 126
2011 ............................................... 107 (2) 105
2012 ............................................... 94 (1) 93
2013 ............................................... 84 — 84
Due after 5 years ..................................... 299 — 299
Total gross and net lease commitments .................... $861 $ (8) $853
Capital Lease
Commitment
Years ending December 31,
2009 ........................................................................... $ 7
2010 ........................................................................... 7
2011 ........................................................................... 7
2012 ........................................................................... 7
2013 ........................................................................... 8
Due after 5 years .................................................................. 46
Gross lease commitment ............................................................ $82
Less: interest ..................................................................... (39)
Net lease commitment included in capital lease and other long-term liabilities ................. $43
Affiliate Commitments. In connection with contracts to provide advertising services to Affiliates, the Company is
obligated to make payments, which represent TAC, to its Affiliates. As of December 31, 2008, these
commitments totaled $360 million, of which $142 million will be payable in 2009, $157 million will be payable
in 2010, and $61 million will be payable in 2011.
Non-cancelable Obligations. The Company is obligated to make payments under various non-cancelable
arrangements with vendors and other business partners, principally for marketing, bandwidth, co-location, and
content arrangements. As of December 31, 2008, these commitments totaled $178 million, of which $92 million
will be payable in 2009, $43 million will be payable in 2010, $24 million will be payable in 2011, $9 million will
be payable in 2012, $6 million will be payable in 2013, and $4 million thereafter.
Intellectual Property Rights. The Company is committed to make certain payments under various intellectual
property arrangements of up to $52 million through 2023.
Other Commitments. In the ordinary course of business, the Company may provide indemnifications of varying
scope and terms to customers, vendors, lessors, joint ventures and business partners, purchasers of assets or
100