There are two types of future commitments which do not appear on our balance sheet and are relevant to understanding our financial position:
- Operating leases
- Operating expenditure commitments.
In general, we lease the various office buildings from which we operate, rather than owning those buildings. “Operating leases” refers to those leases.
In addition, we are generally licensed to use software and also lease various items of computer hardware that we use in operating our business, rather than owning the software or computer hardware ourselves. We refer to our commitments to pay software license and equipment lease fees as operating expenditure commitments.
These future commitments represent approximately 8.9% of our expenses.