Commitments and Contingencies

Operating Leases

We lease our office facilities under operating lease agreements expiring through April 2026. Certain of these lease agreements have escalating rent payments. We recognize rent expense under such agreements on a straight-line basis over the lease term, and the difference between the rent paid and the straight-line rent is recorded in accrued expenses and other liabilities and other long-term liabilities in the accompanying consolidated balance sheets.

In August 2017, we entered into a seven-year operating lease for approximately 45,831 square feet of office space in Mountain View, California with a total rent obligation and management fees of $32.2 million.

In March 2018, we amended our Mountain View, California lease signed in August 2017 to add a ten-year lease for additional 31,571 square feet of office space for a total rent obligation and management fees of approximately $34.8 million, which are excluded from the table below. In connection with this lease amendment, we issued a letter of credit of $1.5 million.

As of January 31, 2018, the aggregate future minimum payments under non-cancelable operating leases consist of the following (in thousands):



Year Ending January 31,	Operating Leases
2019	$	19,321
2020	18,627
2021	20,083
2022	17,250
2023	13,991
Thereafter	23,727
Total	$	112,999

Rent expense recognized under our operating leases were $11.0 million, $16.6 million and $19.4 million for the years ended January 31, 2016, 2017 and 2018, respectively.

Purchase Obligations

As of January 31, 2017 and 2018, we had $4.1 million and $26.8 million of non-cancelable contractual purchase obligations related to certain software service and other contracts.

Letters of Credit

In connection with the lease executed in August 2017, we issued a letter of credit of $2.6 million. As of January 31, 2017 and 2018, we had letters of credit in the aggregate amount of $7.7 million and $9.6 million, in connection with our facility leases. The letters of credit are collateralized by restricted cash and mature at various dates through August 2026.

Legal Matters

On October 18, 2016, we entered into an agreement with Dell Inc. (Dell), as successor-in-interest to EMC to settle all litigation between EMC and us. The terms of the settlement include a payment to Dell, the dismissal of all litigation between the parties, mutual releases, and a license to the disputed patent. Accordingly, we paid Dell a one-time settlement amount of $30.0 million, and all litigation between EMC and us was dismissed prior to October 31, 2016. We evaluated the settlement as a multiple-element arrangement, which requires us to allocate the one-time payment to the identifiable elements based on their relative fair values. Based on our estimates of fair value, we determined that the sole benefit of the settlement is to avoid further litigation costs with no value attributable to future use or benefit. Accordingly, we recorded the $30.0 million as a legal settlement charge in general and administrative expenses during the three months ended October 31, 2016.

From time to time, we have become involved in claims and other legal matters arising in the normal course of business. We investigate these claims as they arise. Although claims are inherently unpredictable, we currently are not aware of any matters that may have a material adverse effect on our business, financial position, results of operations or cash flows. Accordingly, we have not recorded any material loss contingency on our consolidated balance sheet as of January 31, 2018.

Indemnification

Our arrangements generally include certain provisions for indemnifying customers against liabilities if our products or services infringe a third party’s intellectual property rights. Other guarantees or indemnification arrangements include guarantees of product and service performance and standby letters of credit for lease facilities. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, we have not incurred any material costs as a result of such obligations and have not accrued any liabilities related to such obligations in the consolidated financial statements. In addition, we indemnify our officers, directors and certain key employees while they are serving in good faith in their respective capacities. To date, there have been no claims under any indemnification provisions.