5.FINANCING OBLIGATION

In connection with the sale and leaseback of our corporate headquarters facility located in Salt Lake City, Utah, we entered into a 20-year master lease agreement with the purchaser, an unrelated private investment group. The 20-year master lease agreement also contains six five-year renewal options that will allow us to maintain our operations at the current location for up to 50 years. Although the corporate headquarters facility was sold and the Company has no legal ownership of the property, under applicable accounting guidance we were prohibited from recording the transaction as a sale since we have subleased a significant portion of the property that was sold. Accordingly, we account for the sale as a financing transaction, which requires us to continue reporting the corporate headquarters facility as an asset and to record a financing obligation for the sale price.

The financing obligation on our corporate campus was comprised of the following (in thousands):



AUGUST 31,		2016		2015
Financing obligation payable in
monthly installments of $291 at
August 31, 2016, including
principal and interest, with two
percent annual increases
(imputed interest at 7.7%),
through June 2025	$	24,605	$	26,078
Less current portion		(1,662)		(1,473)
Total financing obligation,
less current portion	$	22,943	$	24,605

Future principal maturities of our financing obligation were as follows at August 31, 2016 (in thousands):



YEAR ENDING
AUGUST 31,
2017	$	1,662
2018		1,868
2019		2,092
2020		2,335
2021		2,600
Thereafter		14,048
	$	24,605

Our remaining future minimum payments under the financing obligation in the initial 20-year lease term are as follows (in thousands):



YEAR ENDING
AUGUST 31,
2017	$	3,509
2018		3,579
2019		3,651
2020		3,724
2021		3,798
Thereafter		15,157
Total future minimum financing
obligation payments		33,418
Less interest		(10,125)
Present value of future minimum
financing obligation payments	$	23,293

The $1.3 million difference between the carrying value of the financing obligation and the present value of the future minimum financing obligation payments represents the carrying value of the land sold in the financing transaction, which is not depreciated. At the conclusion of the master lease agreement, the remaining financing obligation and carrying value of the land will be offset and written off of our consolidated financial statements.