Yahoo 2010 Annual Report Download - page 54

Contractual obligations and commitments
The following table presents certain payments due under contractual obligations with minimum firm
commitments as of December 31, 2010 (in millions):
Payments Due by Period
Total
Due in
2011
Due in
2012-2013
Due in
2014-2015 Thereafter
Operating lease obligations(1) ......................... $ 641 $165 $247 $159 $ 70
Capital lease obligation(2) ............................ 68 7 15 16 30
Affiliate commitments(3) ............................. 95 86 9 — —
Non-cancelable obligations(4) ......................... 191 95 67 7 22
Uncertain tax positions, including interest and penalties(5) . . 420 112 — — 308
Total contractual obligations ...................... $1,415 $465 $338 $182 $430
(1) We have entered into various non-cancelable operating lease agreements for our offices throughout the
Americas, EMEA, and Asia Pacific regions with original lease periods up to 13 years, expiring between 2010
and 2019. See Note 12—“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, 2010, unrecognized tax benefits and potential interest and penalties resulted in accrued
liabilities of $420 million, of which $112 million is classified as accrued expenses and other current liabilities
and $308 million is classified as deferred and other long-term tax liabilities, net on our consolidated balance
sheets. As of December 31, 2010, the settlement period for the $308 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 $37 million through 2023.
Other Commitments and Off-Balance Sheet Arrangements. 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 condensed consolidated financial statements.
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