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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies

Operating Leases and Other Contractual Commitments
 
For some of our offices and data centers, we have entered into non-cancelable operating lease agreements with various expiration dates. Rent expense associated with office space leases was $34.2 million, $22.0 million and $15.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.
 
Payments for data center square footage as well as data center capacity for certain data centers, are primarily included in cost of revenues. These costs were $17.3 million, $13.7 million and $13.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Future minimum payments under our non-cancelable operating leases and other contractual commitments as of December 31, 2016 are presented in the table below (in thousands):
 
Leases, net of Sublease Income
 
Purchase Obligations (1)
 
Other
 
Total
Years Ending December 31,
 
 
 
 
 
 
 
2017
$
33,855

 
$
17,933

 
$
517

 
$
52,305

2018
35,887

 
13,401

 
517

 
49,805

2019
36,042

 
6,529

 
517

 
43,088

2020
35,197

 
3,950

 
517

 
39,664

2021
34,847

 
2,127

 
517

 
37,491

Thereafter
122,643

 
—

 
1,465

 
124,108

Total
$
298,471

 
$
43,940

 
$
4,050

 
$
346,461


 
(1)
Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center and IT operations. Not included in the table above are certain purchase commitments related to our future Knowledge user conferences. If we were to cancel these agreements as of December 31, 2016, we would have been obligated to pay cancellation penalties of approximately $18.1 million in aggregate.

In November 2012, we entered into a lease agreement for 148,704 square feet of office space located in Santa Clara, California. The lease commenced in April 2013 and has a term of approximately 11 years. Rent is paid on a monthly basis and will increase incrementally over the term of the lease for total minimum lease payments of approximately $48.8 million.

In December 2014, we entered into a lease agreement for 328,867 square feet of space, located in Santa Clara, California. The lease commenced in August 2015 for an initial term of 12 years, with two options to renew the lease for additional terms of five years each. Rent is paid on a monthly basis and will increase incrementally over the term of the lease for total minimum lease payments of approximately $151.1 million.

Subsequent to the year ended December 31, 2016, we entered into certain lease agreements for additional office space. Total future minimum lease payments under these operating leases of approximately $52.1 million in aggregate are not included in the table above. $29.6 million of the $52.1 million relates to an expansion and lease term extension of our existing San Diego office facility.

In addition to the amounts above, the repayment of our 0% convertible senior notes with an aggregate principal amount of $575 million is due on November 1, 2018. Refer to Note 9 for further information regarding our convertible senior notes.

Legal Proceedings
 
From time to time, we are party to litigation and other legal proceedings in the ordinary course of business. While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our financial position, results of operations or cash flows, except as discussed below and for those matters for which we have recorded a loss contingency. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss.

Generally, our subscription agreements require us to defend our customers for third-party intellectual property infringement and other claims. Any adverse determination related to intellectual property claims or other litigation could prevent us from offering our services and adversely affect our financial condition and results of operations.

On February 6, 2014, Hewlett-Packard Company (Hewlett-Packard) filed a lawsuit against us in the U.S. District Court for the Northern District of California. The lawsuit alleged patent infringement and sought damages and an injunction. On or about November 1, 2015, Hewlett Packard Enterprise Company (HPE) separated from Hewlett-Packard as an independent company, and Hewlett-Packard assigned to HPE all right, title, and interest in the eight Hewlett-Packard patents in the lawsuit and HPE was substituted as plaintiff in the litigation. On March 4, 2016, we entered into a confidential settlement agreement resolving the lawsuit with HPE (HPE Settlement). As a result, on March 9, 2016, the lawsuit was dismissed.

BMC Software, Inc. (BMC) filed lawsuits against us in the U.S. District Court for the Eastern District of Texas on September 23, 2014 and February 12, 2016, and in the Dusseldorf (Germany) Regional Court, Patent Division, on March 2, 2016. Each of the lawsuits alleged patent infringement and sought damages and an injunction. On April 8, 2016, we entered into a confidential settlement agreement resolving all the lawsuits with BMC (BMC Settlement). As a result, the second Texas lawsuit was dismissed on April 14, 2016, and each of the initial Texas lawsuit and the German lawsuit was dismissed on April 25, 2016.

These settlements are considered multiple element arrangements for accounting purposes. We evaluated the accounting treatment of these settlements by identifying each element of the arrangements, which included amongst other elements, a release of past infringement claims and a covenant not to sue for a specified term of years. The primary benefit we received from the arrangements was the settlement and termination of all existing litigation, the avoidance of future litigation expenses and the avoidance of future management and customer disruptions. We determined that none of the elements of the settlement agreements have identifiable future benefits that would be capitalized as an asset. Accordingly, we recorded charges for aggregate legal settlements of $270.0 million in our consolidated statement of comprehensive loss for the year ended December 31, 2016. The charge covers the fulfillment by us of all financial obligations under both the BMC Settlement and HPE Settlement with no remaining financial obligations under either settlement.