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obligations related to the settlement of RSUs in connection with our IPO, with interest payable on the borrowed
amounts set at LIBOR plus 1.0% and an additional 0.25% payable on drawn balances outstanding from and after
the 180th day of borrowing. Under the terms of the agreement, we are obligated to pay a commitment fee of
0.10% per annum on the daily undrawn balance from and after the 90th day following the date we entered into
the bridge facility.
In October 2012, we amended and restated our bridge credit facility, and converted it into a three-year
unsecured term loan facility (Amended and Restated Term Loan) that allows us to borrow up to $1.5 billion to
fund tax withholding and remittance obligations related to the settlement of RSUs in connection with our IPO
with interest payable on the borrowed amounts set at LIBOR plus 1.0%, as well as an annual commitment fee of
0.10% on the daily undrawn balance of the facility. We paid origination fees at closing of the Amended and
Restated Term Loan, which fees are being amortized over the term of the facility. On October 25, 2012, we fully
drew down the $1.5 billion available on the Amended and Restated Term Loan to fund a portion of the
withholding tax liability that arise due to the vesting and settlement of RSUs in October and November 2012. We
paid an additional upfront fee of 0.15% of the $1.5 billion drawn down on the funding date, which fee is being
amortized over the remaining term of the facility. The amount outstanding under this facility will become due
and payable on October 25, 2015. As of December 31, 2012, we were in compliance with the covenants in the
Amended and Restated Term Loan.
In connection with the draw down of the Amended and Restated Term Loan, we entered into an interest rate
swap agreement with an effective date of October 25, 2012. The notional amount of the interest rate swap
agreement is $1.5 billion and the agreement converts the one-month LIBOR rate on the corresponding notional
amount of debt to a fixed interest rate of 1.46% to hedge our exposure to interest rate fluctuation. This interest
rate swap has a maturity date of October 25, 2015. We have designated the interest rate swap agreement as a
qualifying hedging instrument and accounted for it as a cash flow hedge.
As of December 31, 2012 the change in fair value of this interest rate swap agreement, net of tax was $2
million and is recognized in AOCI with the corresponding fair value of $4 million included in other liabilities on
our consolidated balance sheet. For the year ended December 31, 2012, the amount of loss in other
comprehensive income reclassified to interest expense was not significant. There were no realized gains or losses
on derivative other than those related to the periodic settlement of the interest rate swap.
We estimate that $3 million of derivative losses included in AOCI will be reclassified into earnings within
the next 12 months. This amount has been calculated based on the variable interest rate assumptions used in the
fair value calculation of the interest rate swap agreement as of December 31, 2012.
Note 10. Commitments and Contingencies
Commitments
Leases
We entered into various capital lease arrangements to obtain property and equipment for our operations.
Additionally, on occasion we have purchased property and equipment for which we have subsequently obtained
capital financing under sale-leaseback transactions. These agreements are typically for three years except for
building leases which are for 15 years, with interest rates ranging from 1% to 13%. The leases are secured by the
underlying leased buildings, leasehold improvements, and equipment. We have also entered into various non-
cancelable operating lease agreements for certain of our offices, equipment, land and data centers with original
lease periods expiring between now and 2027. We are committed to pay a portion of the related actual operating
expenses under certain of these lease agreements. Certain of these arrangements have free rent periods or
escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line
basis.
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