Cleveland Clinic Health System Obligated Group - FMSbonds.com

Cleveland Clinic Health SystemNotes to Consolidated Financial Statements (continued)14. Commitments and Contingent Liabilities (continued)In 2003, the System entered into an operating lease agreement for the purpose of leasing agenetics and stem cell research building (Stem Cell Building Lease). Under the terms of theStem Cell Building Lease, the System began to lease the facility upon the issuance of thecertificate of occupancy in December 2004 and is required to lease the facility for twentynineyears. At December 31, 2007, total remaining operating lease payments were $31.4million.In 2006, the System entered into an operating lease agreement totaling $156.9 million for thepurpose of leasing a parking garage and service center building (Service Center Lease),which is under construction at December 31, 2007. Under the terms of the Service CenterLease, the System, upon issuance of a certificate of occupancy, is required to lease thefacility for twenty-one years with an option (by the System) to extend the lease an additionalfive years. The System provides no financing for construction or other guarantees for theService Center Lease project, expected to be completed in 2008.In 2007, the System entered into two operating lease agreements totaling $80.3 million tolease an office complex comprised of four office buildings and a day care center facility,totaling approximately 707,000 square feet. The System will lease the facilities for twentytwoyears. The System is subsequently leasing two of the office buildings and the day carecenter (total of 403,000 square feet) back to the seller through June 30, 2010 with the sellerhaving the option for an additional seven years. In a separate transaction, the Systempurchased the complex’s 53 acres of land for $35.5 million.At December 31, 2007, the System has commitments for construction and other related capitalcontracts of $253.7 million and letters of credit of $1.9 million. Guarantees of mortgage loansmade by banks to certain staff members are $10.1 million at December 31, 2007. In addition, theSystem has remaining commitments to invest approximately $206.8 million in alternative anddirect investments at December 31, 2007. The largest commitment at December 31, 2007, to anyone alternative strategy manager is $20.0 million. These investments will occur over the nextthree to five years. No amounts have been recorded in the consolidated balance sheets for thesecommitments and guarantees.35