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This excerpt taken from the SLAB 10-Q filed Apr 30, 2009. Operating Leases
In March 2006, the Company entered into an operating lease agreement and a related participation agreement for a facility at 400 W. Cesar Chavez (“400 WCC”) in Austin, Texas for its corporate headquarters. In March 2008, the Company entered into an operating lease agreement and a related participation agreement for a facility at 200 W. Cesar Chavez (“200 WCC”) in Austin, Texas for the expansion of its corporate headquarters. During the terms of the leases, the Company has on-going options to purchase the buildings for purchase prices of approximately $44.3 million for 400 WCC and $50.1 million for 200 WCC. Alternatively, the Company can cause each such property to be sold to third parties provided it is not in default under that property’s lease. The Company is contingently liable on a first dollar loss basis for up to $35.3 million to the extent that the 400 WCC sale proceeds are less than the $44.3 million purchase option and up to $40.0 million to the extent that the 200 WCC sale proceeds are less than the $50.1 million purchase option.
Discontinued Operations Indemnification
In March 2007, the Company sold its Aero® transceiver, AeroFONE™ single-chip phone and power amplifier product lines (the “Aero product lines”) to NXP B.V. and NXP Semiconductors France SAS (collectively “NXP”). In connection with the sale of the Aero product lines, the Company agreed to indemnify NXP with respect to liabilities for certain tax matters. There is no contractual limit on exposure with respect to such matters. As of April 4, 2009, the Company had no material liabilities recorded with respect to this indemnification obligation.
These excerpts taken from the SLAB 10-K filed Feb 11, 2009. Operating Leases The Company leases its facilities under operating lease agreements that expire at various dates through 2019. Some of these arrangements contain renewal options and require the Company to pay taxes, insurance and maintenance costs. F-28
13. Commitments and Contingencies (Continued) Rent expense under operating leases was $3.8 million, $4.6 million and $5.7 million for fiscal 2008, 2007 and 2006, respectively. The minimum annual future rentals under the terms of these leases at January 3, 2009 are as follows (in thousands):
The Company has an accrual of $1.0 million at January 3, 2009 for the present value of estimated future obligations for non-cancelable lease payments (net of estimated sublease income) related to vacating certain leased facilities. See Note 16, Headquarter Relocation Costs, for additional information. Operating Leases The Company leases its facilities under operating lease agreements that expire at various dates through 2019. Some of these F-28
13. Commitments and Contingencies (Continued)
The
The This excerpt taken from the SLAB 10-Q filed Oct 29, 2008. Operating Leases
400 W. Cesar Chavez Building
In March 2006, the Company entered into an operating lease agreement and a related participation agreement for a facility in Austin, Texas for its corporate headquarters. During the term of the lease, the Company has an on-going option to purchase the building for a total purchase price of approximately $44.3 million. Alternatively, the Company can cause the property to be sold to third parties provided it is not in default under the lease. The Company is contingently liable on a first dollar loss basis for the guaranteed residual value associated with this property in the event that the net sale proceeds are less than the original financed cost of the facility up to approximately $35.3 million.
17
Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited)
200 W. Cesar Chavez Building
In March 2008, the Company entered into an operating lease agreement and a related participation agreement for a facility in Austin, Texas for the expansion of its corporate headquarters. The lease has a term of five years. The base rent for the term of the lease is an amount equal to the interest accruing on $50.1 million at 155 basis points over the three-month LIBOR (which would be approximately $13.3 million over the remaining term assuming LIBOR averages 4.33% during such term).
The Company has granted certain rights and remedies to the lessor in the event of certain defaults, including the right to terminate the lease, to bring suit to collect damages, and to compel the Company to purchase the facility. The lease contains other customary representations, warranties, obligations, conditions, indemnification provisions and termination provisions, including covenants that the Company shall maintain unencumbered cash and highly-rated short-term investments of at least $75 million. If the Company’s unencumbered cash and highly-rated short-term investments are less than $150 million, it must also maintain a ratio of funded debt to earnings before interest expense, income taxes, depreciation, amortization, lease expense and other non-cash charges (EBITDAR) over the four prior fiscal quarters of no greater than 2 to 1. As of October 4, 2008, the Company believes it was in compliance with all covenants of the lease.
During the term of the lease, the Company has an on-going option to purchase the building for a total purchase price of approximately $50.1 million. Alternatively, the Company can cause the property to be sold to third parties provided it is not in default under the lease. The Company is contingently liable on a first dollar basis for up to $40.0 million to the extent that the sale proceeds are less than the $50.1 million purchase option. To the extent that the net proceeds generated from the sale of the facility to a third party exceed the purchase option, the Company would have the right to receive substantially all of such excess proceeds if the sale occurs prior to the end of the term of the lease. If the property is sold after the term of the lease, the Company would have the right to recover its $40.0 million guarantee, to the extent such sale proceeds exceed $10.1 million.
In accordance with FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, the Company determined that the fair value associated with the guaranteed residual value was $1.2 million. This amount was recorded in “Other assets, net” and “Long-term obligations and other liabilities” in the Condensed Consolidated Balance Sheets and is being amortized over the term of the lease.
The Company is required to periodically evaluate the expected fair value of the facility at the end of the lease term. If the Company determines that it is estimable and probable that the expected fair value will be less than $50.1 million, it will ratably accrue the loss up to a maximum of approximately $40.0 million over the remaining lease term. As of October 4, 2008, the Company has determined that a loss contingency accrual is not required.
18
Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited)
Interest Rate Swap Agreements
In connection with its headquarters leases, the Company has entered into interest rate swap agreements as a hedge against the variable rent under the leases. Under the terms of the swap agreements, the Company has effectively converted the variable rents to fixed rents through March 2011 for its 400 W. Cesar Chavez building and March 2013 for its 200 W. Cesar Chavez building. See Note 4, Financial Instruments, to the Condensed Consolidated Financial Statements for additional information.
Discontinued Operations Indemnification
In connection with the sale of the Aero product lines, the Company agreed to indemnify NXP with respect to liabilities for certain tax matters. There is no contractual limit on exposure with respect to such matters. As of October 4, 2008, the Company had no material liabilities recorded with respect to this indemnification obligation.
This excerpt taken from the SLAB 10-Q filed Jul 30, 2008. Operating Leases
400 W. Cesar Chavez Building
In March 2006, the Company entered into an operating lease agreement and a related participation agreement for a facility in Austin, Texas for its corporate headquarters. During the term of the lease, the Company has an on-going option to purchase the building for a total purchase price of approximately $44.3 million. Alternatively, the Company can cause the property to be sold to third parties provided it is not in default under the lease. The Company is contingently liable on a first dollar loss basis for the guaranteed residual value associated with this property in the event that the net sale proceeds are less than the original financed cost of the facility up to approximately $35.3 million.
200 W. Cesar Chavez Building
In March 2008, the Company entered into an operating lease agreement and a related participation agreement for a facility in Austin, Texas for the expansion of its corporate headquarters. The lease has a term of five years. The base rent for the term of the lease is an amount equal to the interest accruing on $50.1 million at 155 basis points over the three-month LIBOR (which would be approximately $10.3 million over the remaining term assuming LIBOR averages 2.79% during such term).
The Company has granted certain rights and remedies to the lessor in the event of certain defaults, including the right to terminate the lease, to bring suit to collect damages, and to compel the Company to purchase the facility. The lease contains other customary representations, warranties, obligations, conditions, indemnification provisions and termination provisions, including covenants that the Company shall maintain unencumbered cash and highly-rated short-term investments of at least $75 million. If the Company’s unencumbered cash and highly-rated short-term investments are less than $150 million, it must also maintain a ratio of funded debt to earnings before interest expense, income taxes, depreciation, amortization, lease expense and other non-cash charges (EBITDAR) over the four prior fiscal quarters of no greater than 2 to 1. As of July 5, 2008, the Company believes it was in compliance with all covenants of the lease.
During the term of the lease, the Company has an on-going option to purchase the building for a total purchase price of approximately $50.1 million. Alternatively, the Company can cause the property to be sold to third parties provided it is not in default under the lease. The Company is contingently liable for up to $40.0 million to the extent that the sale proceeds are less than the $50.1 million purchase option. To the extent that the net proceeds generated from the sale of the facility to a third party exceed the purchase option, the Company would have the right to receive substantially all of such excess proceeds if the sale occurs prior to the end of the term of the lease. If the property is sold after the term of the lease, the Company would have the right to recover its $40.0 million guarantee, to the extent such sale proceeds exceed $10.1 million.
15
Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited)
In accordance with FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, the Company determined that the fair value associated with the guaranteed residual value was $1.2 million. The amount was recorded in “Other assets, net” and “Long-term obligations and other liabilities” in the condensed consolidated balance sheets and is being amortized over the term of the lease.
The Company is required to periodically evaluate the expected fair value of the facility at the end of the lease term. If the Company determines that it is estimable and probable that the expected fair value will be less than $50.1 million, it will ratably accrue the loss up to a maximum of approximately $40.0 million over the remaining lease term. As of July 5, 2008, the Company has determined that a loss contingency accrual is not required.
Discontinued Operations Indemnification
In connection with the sale of the Aero product lines, the Company agreed to indemnify NXP with respect to liabilities for certain tax matters. There is no contractual limit on exposure with respect to such matters. As of July 5, 2008, the Company had no material liabilities recorded with respect to this indemnification obligation.
This excerpt taken from the SLAB 10-Q filed Apr 30, 2008. Operating Leases
400 W. Cesar Chavez Building
In March 2006, the Company entered into an operating lease agreement and a related participation agreement for a facility in Austin, Texas for its corporate headquarters. During the term of the lease, the Company has an on-going option to purchase the building for a total purchase price of approximately $44.3 million. Alternatively, the Company can cause the property to be sold to third parties provided it is not in default under the lease. The Company is contingently liable on a first dollar loss basis for the guaranteed residual value associated with this property in the event that the net sale proceeds are less than the original financed cost of the facility up to approximately $35.3 million.
200 W. Cesar Chavez Building
In March 2008, the Company entered into an operating lease agreement and a related participation agreement for a facility in Austin, Texas for the expansion of its corporate headquarters. The lease has a term of five years. The base rent for the term of the lease is an amount equal to the interest accruing on $50.1 million at 155 basis points over the three-month LIBOR (which would be approximately $11.3 million over the five year term assuming LIBOR averages 2.97% during such term).
The Company has granted certain rights and remedies to the lessor in the event of certain defaults, including the right to terminate the lease, to bring suit to collect damages, and to compel the Company to purchase the facility. The lease contains other customary representations, warranties, obligations, conditions, indemnification provisions and termination provisions, including covenants that the Company shall maintain unencumbered cash and highly-rated short-term investments of at least $75 million. If the Company’s unencumbered cash and highly-rated short-term investments is less than $150 million, it must also maintain a ratio of funded debt to earnings before interest expense, income taxes, depreciation, amortization, lease expense and other non-cash charges (EBITDAR) over the four prior fiscal quarters of no greater than 2 to 1. As of April 5, 2008, the Company believes it was in compliance with all covenants of the lease.
14
Silicon Laboratories Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited)
During the term of the lease, the Company has an on-going option to purchase the building for a total purchase price of approximately $50.1 million. Alternatively, the Company can cause the property to be sold to third parties provided it is not in default under the lease. The Company is contingently liable for up to $40.0 million to the extent that the sale proceeds are less than the $50.1 million purchase option. To the extent that the net proceeds generated from the sale of the facility to a third party exceed the purchase option, the Company would have the right to receive substantially all of such excess proceeds if the sale occurs prior to the end of the term of the lease. If the property is sold after the term of the lease, the Company would have the right to recover its $40.0 million guarantee, to the extent such sale proceeds exceed $10.1 million.
In accordance with FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, the Company determined that the fair value associated with the guaranteed residual value was $1.2 million. The amount was recorded in “Other assets, net” and “Long-term obligations and other liabilities” in the condensed consolidated balance sheets and is being amortized over the term of the lease.
The Company is required to periodically evaluate the expected fair value of the facility at the end of the lease term. If the Company determines that it is estimable and probable that the expected fair value will be less than $50.1 million, it will ratably accrue the loss up to a maximum of approximately $40.0 million over the remaining lease term. As of April 5, 2008, the Company has determined that a loss contingency accrual is not required.
Discontinued Operations Indemnification
In connection with the sale of the Aero product lines, the Company agreed to indemnify NXP with respect to liabilities for certain tax matters. There is no contractual limit on exposure with respect to such matters. As of April 5, 2008, the Company had no material liabilities recorded with respect to this indemnification obligation.
These excerpts taken from the SLAB 10-K filed Feb 7, 2008. Operating Leases The Company leases its facilities under operating lease agreements that expire at various dates through 2013. Some of these arrangements contain renewal options and require the Company to pay taxes, insurance and maintenance costs. Rent expense under operating leases was $4.6 million, $5.7 million and $3.4 million for fiscal 2007, 2006 and 2005, respectively. F-24
12. Commitments and Contingencies (Continued) The minimum annual future rentals under the terms of these leases at December 29, 2007 are as follows (in thousands):
The Company has an accrual of $2.6 million at December 29, 2007 for the present value of estimated future obligations for non-cancelable lease payments (net of estimated sublease income) related to vacating certain leased facilities. See Note 15, "Headquarter Relocation Costs," to the Consolidated Financial Statements for additional information. In March 2006, the Company entered into an operating lease agreement and a related participation agreement (collectively, the "lease") for a facility in Austin, Texas for its corporate headquarters. The lease has a term of seven years. The base rent for the term of the lease is an amount equal to the interest accruing on $44.3 million at 110 basis points over the three-month LIBOR (which would be approximately $13.8 million over the remaining term assuming LIBOR averages 4.83% during such term). The Company has granted certain rights and remedies to the lessor in the event of certain defaults, including the right to terminate the lease, to bring suit to collect damages, and to compel the Company to purchase the facility. The lease contains other customary representations, warranties, obligations, conditions, indemnification provisions and termination provisions, including covenants that the Company shall maintain unencumbered cash and highly-rated short-term investments of at least $75 million and a ratio of funded debt to earnings before interest expense, income taxes, depreciation, amortization, lease expense and other non-cash charges (EBITDAR) over the four prior fiscal quarters of no greater than 1.5 to 1. As of December 29, 2007, the Company believes it was in compliance with all covenants of the lease. During the term of the lease, the Company has an on-going option to purchase the building for a total purchase price of approximately $44.3 million. Alternatively, the Company can cause the property to be sold to third parties provided it is not in default under the lease. The Company is contingently liable for the guaranteed residual value associated with this property in the event that the net sale proceeds are less than the original financed cost of the facility up to approximately $35.3 million. To the extent that the net proceeds generated from the sale of the facility to a third party exceed $9.0 million, the Company would have the right to receive (a) substantially all of such excess proceeds if the sale occurs prior to the end of the term or (b) up to approximately $35.3 million of such excess proceeds if the sale occurs after the end of the term. F-25 Silicon Laboratories Inc. 12. Commitments and Contingencies (Continued) In accordance with FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others," the Company determined that the fair value associated with the guaranteed residual value was $1.0 million. The amount was recorded in "Other assets, net" and "Long-term obligations and other liabilities" in the consolidated balance sheets and is being amortized over the term of the lease. The Company is required to periodically evaluate the expected fair value of the facility at the end of the lease term. If the Company determines that it is estimable and probable that the expected fair value will be less than $44.3 million, it will ratably accrue the loss up to a maximum of approximately $35.3 million over the remaining lease term. As of December 29, 2007, the Company has determined that a loss contingency accrual is not required. Operating Leases The Company leases its facilities under operating lease agreements that expire at various dates through 2013. Some of these arrangements contain renewal options Rent F-24
12. Commitments and Contingencies (Continued) The minimum annual future rentals under the terms of these leases at December 29, 2007 are as follows (in thousands):
The In The During F-25 Silicon Laboratories Inc. 12. Commitments and Contingencies (Continued) In The This excerpt taken from the SLAB 10-Q filed Oct 24, 2007. Operating Leases In March 2006, the Company entered into an operating lease agreement and a related participation agreement (collectively, the “lease”) for a facility in Austin, Texas for its corporate headquarters. During the term of the lease, the Company has an on-going option to purchase the building for a total purchase price of approximately $44.3 million. Alternatively, the Company can cause the property to be sold to third parties provided it is not in default under the lease. The Company is contingently liable on a first dollar loss basis for the guaranteed residual value associated with this property in the event that the net sale proceeds are less than the original financed cost of the facility up to approximately $35.3 million.
Discontinued Operations Indemnification In connection with the sale of the Aero product lines, the Company agreed to indemnify NXP with respect to (a) liabilities for breach of the Company’s representations and warranties in the Purchase Agreement, (b) liabilities for breach of the Company’s covenants or agreements pursuant to the Purchase Agreement, (c) liabilities of the Company that were not assumed by NXP and (d) liabilities for certain tax matters. With respect to breaches of representations and warranties, the Company’s maximum potential exposure is limited to $14.3 million (the amount of cash proceeds held in escrow). There is no contractual limit on exposure with respect to the other liabilities. As of September 29, 2007, the Company had no material liabilities recorded under these indemnification obligations.
This excerpt taken from the SLAB 10-K filed Feb 7, 2007. Operating Leases The Company leases its facilities under operating lease agreements that expire at various dates through 2013. Some of these arrangements contain renewal options and require the Company to pay taxes, insurance and maintenance costs. Rent expense under operating leases was $5.8 million, $3.4 million and $3.0 million for fiscal 2006, 2005 and 2004, respectively. F-23 Silicon Laboratories Inc. | EXCERPTS ON THIS PAGE:
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