Nautilus 2012 Annual Report Download - page 56

Table of Contents
As of December 31, 2012 , future minimum lease payments under non-
cancelable operating leases, reduced for sublease income, were as follows
(in thousands):
Guarantees, Commitments and Off-Balance Sheet Arrangements
As of December 31, 2012 and 2011 , the Company had approximately $1.0 million and $3.0 million , respectively, in standby letters of credit
with certain vendors with expiration dates through November 2013 .
The Company has long lead times for inventory purchases and, therefore, must secure factory capacity from its vendors in advance. As of
December 31, 2012 , the Company had approximately $1.3 million in non-cancelable market-based purchase obligations, all of which were for
inventory purchases expected to be received in 2013.
In the ordinary course of business, the Company enters into agreements that require it to indemnify counterparties against third-party claims.
These may include: agreements with vendors and suppliers, under which the Company may indemnify them against claims arising from use of
their products or services; agreements with customers, under which the Company may indemnify them against claims arising from their use or
sale of the Company's products; real estate and equipment leases, under which the Company may indemnify lessors against third-party claims
relating to the use of their property; agreements with licensees or licensors, under which the Company may indemnify the licensee or licensor
against claims arising from their use of the Company's intellectual property or the Company's use of their intellectual property; and agreements
with parties to debt arrangements, under which the Company may indemnify them against claims relating to their participation in the
transactions.
The nature and terms of these indemnification obligations vary from contract to contract, and generally a maximum obligation is not stated
within the agreements. The Company holds insurance policies that mitigate potential losses arising from certain types of indemnification
obligations. Management does not deem these obligations to be significant to the Company's financial position, results of operations or cash
flows and, therefore, no related liabilities were recorded as of December 31, 2012 .
Guarantees, Commitments and Contingencies of Discontinued Operation
The Company retained certain warranty obligations in connection with its discontinued Commercial operation and remains contingently liable
for certain product warranty obligations which were assumed by buyers of its Commercial business product lines to the extent a buyer fails to
fulfill its assumed obligations. Uncertainties exist with respect to these warranty obligations, as units previously sold to customers approach end-
of-life and settlements are reached with certain customers in connection with the Company's exit from its discontinued Commercial operation.
As of December 31, 2012 , the Company's warranty liability included $0.4 million for estimated future warranty costs of its discontinued
Commercial operation.
Legal Matters
The Company is party to various legal proceedings arising from normal course business activities. In addition, the Company's tax filings are
subject to audit by authorities in the jurisdictions where it conducts business, which may result in assessments of additional taxes. Management
believes it has adequately provided for obligations that would result from these legal and tax proceedings. Management believes that the ultimate
resolution of these matters will not have a material effect on the Company's financial position, results of operations or cash flows.
50
2013
$
3,369
2014
3,268
2015
3,169
2016
3,209
2017
2,170
Thereafter
1,650
Total minimum non-cancelable lease payments, net
$
16,835