Yahoo 2009 Annual Report Download - page 58

Contractual obligations and commitments
The following table presents certain payments due under contractual obligations with minimum firm
commitments as of December 31, 2009 (in millions):
Payments Due by Period
Total
Due in
2010
Due in
2011-2012
Due in
2013-2014 Thereafter
Operating lease obligations(1) .......................... $ 827 $161 $252 $182 $232
Capital lease obligation(2) ............................. 76 7 14 16 39
Affiliate commitments(3) .............................. 143 120 23 — —
Non-cancelable obligations(4) .......................... 169 76 65 19 9
FIN 48 obligations including interest and penalties(5) ....... 488 54 — — 434
Total contractual obligations ...................... $1,703 $418 $354 $217 $714
(1) We have entered into various non-cancelable operating lease agreements for our offices throughout the U.S.
and internationally with original lease periods up to 23 years, expiring between 2010 and 2027. See
Note 13—“Commitments and Contingencies” in the Notes to the consolidated financial statements for
additional information.
(2) During the year ended December 31, 2008, we entered into an 11 year lease agreement for a data center in the
western U.S. Of the total expected minimum lease commitment of $105 million, $21 million was classified as
an operating lease for real estate and $84 million was classified as a capital lease for equipment.
(3) We are obligated to make minimum payments under contracts to provide sponsored search and/or display
advertising services to our Affiliates, which represent TAC.
(4) We are obligated to make payments under various arrangements with vendors and other business partners,
principally for marketing, bandwidth, and content arrangements.
(5) As of December 31, 2009, unrecognized tax benefits and potential interest and penalties resulted in accrued
liabilities of $488 million, of which $54 million is classified as accrued expenses and other current liabilities
and $434 million is classified as deferred and other long-term tax liabilities, net on our consolidated balance
sheets. As of December 31, 2009, the settlement period for the $434 million long-term income tax liabilities
cannot be determined; however, the liabilities are not expected to become due within the next twelve months.
Intellectual Property Rights. We are committed to make certain payments under various intellectual property
arrangements of up to $44 million through 2023.
Other Commitments. In the ordinary course of business, we may provide indemnifications of varying scope and
terms to customers, vendors, lessors, joint venture and business partners, purchasers of assets or subsidiaries, and
other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of
agreements or representations and warranties made by us, services to be provided by us, intellectual property
infringement claims made by third parties or, with respect to the sale of assets or a subsidiary, matters related to
our conduct of the business and tax matters prior to the sale. In addition, we have entered into indemnification
agreements with our directors and certain of our officers that will require us, among other things, to indemnify
them against certain liabilities that may arise by reason of their status or service as directors or officers. We have
also agreed to indemnify certain former officers, directors, and employees of acquired companies in connection
with the acquisition of such companies. We maintain director and officer insurance, which may cover certain
liabilities arising from our obligation to indemnify our directors and officers, and former directors and officers of
acquired companies, in certain circumstances. It is not possible to determine the aggregate maximum potential
loss under these indemnification agreements due to the limited history of prior indemnification claims and the
unique facts and circumstances involved in each particular agreement. Such indemnification agreements might
not be subject to maximum loss clauses. Historically, we have not incurred material costs as a result of
obligations under these agreements and we have not accrued any liabilities related to such indemnification
obligations in our consolidated financial statements.
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