Commitments And Contingencies

9 Months Ended

Aug. 31, 2011

Commitments And Contingencies

Commitments And Contingencies

9. COMMITMENTS AND CONTINGENCIES

Letters of Credit

In connection with the mortgage note payable described in Note 8 above, we entered into an irrevocable letter of credit in the amount of $13.0 million; additionally, in connection with two separate revenue transactions denominated in foreign currencies, we entered into separate irrevocable letters of credit in the amounts of approximately $1.1 million and approximately $0.5 million; see Note 8 for further details. The letter of credit is collateralized by the $20.0 million revolving line of credit described above in Note 8 and automatically renews for successive one-year periods until the mortgage note payable has been satisfied in full. As of August 31, 2011, we were in compliance with all covenants under the revolving line of credit.

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 market condition. Should it become necessary, we have the option to prepay any rent increases due as a result of a change in fair market value. This prepaid land lease is being amortized using the straight-line method over the life of the lease; the portion to be amortized over the next twelve months is included in Prepaid Expenses and Other Current Assets, and the remainder is included in Other Assets on our Condensed Consolidated Balance Sheets.

Operating Commitments

At various locations worldwide, we lease office space and equipment under non-cancelable operating leases with various expiration dates through May 2019. Rental expense was $3.7 million and $2.6 million for the three month periods ended August 31, 2011 and 2010, respectively, and $10.5 million and $8.0 million for the nine month periods ended August 31, 2011 and 2010, respectively.

As of August 31, 2011, contractual commitments associated with indebtedness, lease obligations and restructuring were as follows (in thousands):

	Total			Remainder of 2011			2012			2013			2014		2015		Thereafter
Operating commitments:
Debt principal	$	38,687		$	579		$	2,397		$	35,711		$	—	$	—	$	—
Debt interest		3,848			529			2,036			1,283			—		—		—
Operating leases		34,177			2,708			9,832			7,452			5,482		3,245		5,458
Total operating commitments		76,712			3,816			14,265			44,446			5,482		3,245		5,458
Restructuring-related commitments:
Gross lease obligations		905			127			673			105			—		—		—
Committed sublease income		(523	)		(91	)		(365	)		(67	)		—		—		—
Net restructuring-related commitment		382			36			308			38			—		—		—
Total commitments	$	77,094		$	3,852		$	14,573		$	44,484		$	5,482	$	3,245	$	5,458

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 $16.6 million of long-term income tax liabilities recorded in accounting for uncertainty in income taxes 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.