COMMITMENTS AND CONTINGENCIES

6 Months Ended

May 31, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Prepaid Land Lease

In June 2003, we entered into a 51-year lease of the land upon which our corporate headquarters is located. The lease was paid in advance for a total of $28.0 million, but is subject to adjustments every ten years based upon changes in the fair market value of the land. The first adjustment to the rent as a result of the increase in the fair market value since 2003 occurred in April 2014. The total additional lease obligation over the remaining 41-year lease term was $115.9 million. We exercised our prepayment option to settle the entire $115.9 million future lease obligations at a discount and paid $1.4 million and $25.3 million in April 2014 and July 2014, respectively.

The prepaid land lease is being amortized using the straight-line method over the life of the lease.

Commitments

At various locations worldwide, we lease office space and equipment under non-cancelable operating leases with various expiration dates through March 2032. Rental expense was $5.2 million and $3.9 million for the three months ended May 31, 2014 and 2013, respectively, and $9.6 million and $8.1 million for the six months ended May 31, 2014 and 2013, respectively.

As of May 31, 2014, contractual commitments associated with indebtedness, lease obligations (excluding the corporate headquarter land lease, which obligation was settled in its entirety in July 2014), and restructuring were as follows (in thousands):

	Total		Remainder of 2014		2015		2016		2017		2018		Thereafter
Commitments:
Debt principal	$	600,000	$	—	$	—	$	—	$	600,000	$	—	$	—
Debt interest	40,500		6,750		13,500		13,500		6,750		—		—
Operating leases (1)	44,692		5,412		10,321		9,678		8,394		6,161		4,726
Total commitments	$	685,192	$	12,162	$	23,821	$	23,178	$	615,144	$	6,161	$	4,726

(1) Operating leases included future minimum rent payments, net of estimated sublease income of $4.7 million, for facilities that we have vacated pursuant to our restructuring activities, as discussed in Note 7.

Future minimum lease payments under restructured non-cancelable operating leases are included in Accrued Restructuring Costs on our Condensed Consolidated Balance Sheets.

The above commitment table does not include approximately $57.2 million of long-term uncertain income tax liabilities due to the fact that we are unable to reasonably estimate the timing of these potential future payments.

Indemnification

Our software license agreements typically provide for indemnification of customers for intellectual property infringement claims. We also warrant to customers that software products operate substantially in accordance with the software product’s specifications. Historically, we have incurred minimal costs related to product warranties, and, as such, no accruals for warranty costs have been made. In addition, we indemnify our officers and directors under the terms of indemnity agreements entered into with them, as well as pursuant to our certificate of incorporation, bylaws and applicable Delaware law.