TeleNav 2015 Annual Report Download - page 67

Table of Contents
York, New York; Atlanta, Georgia; San Francisco, California; Berlin, Germany; Tokyo, Japan; Shanghai, China; Xi’an, China; and Cluj,
Romania.
The following table summarizes our outstanding noncancelable contractual obligations as of June 30, 2015 :
At June 30, 2015 , we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $5.4 million .
Due to uncertainties related to these tax matters, we are unable to make a reasonably reliable estimate of when cash settlements with the taxing
authority will occur.
Warranties and indemnifications
Our agreements with our customers generally include certain provisions for indemnifying them against liabilities if our navigation services
or products infringe a third party’s intellectual property rights or for other specified reasons. We have in the past received indemnification
requests or notices of their intent to seek indemnification in the future from our customers with respect to litigation in which our customers have
been named as defendants. See Part I, Item 3, “Legal Proceedings.” As it relates to past indemnification requests or notices, in certain situations
we have agreed to defend or indemnify our customers for the indemnity demands. For those notices where we have not agreed to provide
indemnity or defense to date, or future demands for indemnity, we may in the future agree to defend and indemnify our customers, irrespective
of whether we believe that we have an obligation to indemnify them or whether we believe our navigation services and products infringe the
asserted intellectual property rights. Alternatively, we may reject certain of our customers’ indemnity demands, including the outstanding
demands, which may lead to disputes with our customers, negatively impact our relationships with them or result in litigation against us. Our
customers may also claim that any rejection of their indemnity demands constitutes a material breach of our agreements with them, allowing
them to terminate such agreements. If, as a result of indemnity demands, we make substantial payments, our relationships with our customers are
negatively impacted, or any of our customer agreements is terminated, our business, operating results and financial condition could be materially
harmed. As of June 30, 2015 , any costs in connection with such indemnity demands which are probable and estimable have been recorded in
our consolidated financial statements.
We have agreed to indemnify our directors, officers and certain other employees for certain events or occurrences, subject to certain limits,
while such persons are or were serving at our request in such capacity. We may terminate the indemnification agreements with these persons
upon the termination of their services with us, but termination will not affect claims for indemnification related to events occurring prior to the
effective date of termination. The maximum amount of potential future indemnification is unlimited. We have a director and officer insurance
policy that limits our potential exposure. We believe the fair value of these indemnification agreements is minimal. We have not recorded any
liabilities for these agreements as of June 30, 2015 .
Off-balance sheet arrangements
During fiscal 2015 , 2014 and 2013 , we did not have any relationships with unconsolidated entities or financial partnerships, such as
structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements
or other contractually narrow or limited purposes.
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Payments due by period
Total
Less than
1 Year
1-3 Years 3-5 Years
More than
5 Years
(in thousands)
Operating lease obligations(1)
$
23,764
$
6,508
$
9,581
$
7,675
$
—
Purchase obligations(2)
2,089
1,812
277
—
—
Total contractual obligations
$
25,853
$
8,320
$
9,858
$
7,675
$
—
(1)
Consists of contractual obligations for office space under noncancelable operating leases, net of sublease income.
(2) Consists of minimum noncancelable financial commitments primarily related to fees owed to certain third party content providers,
regardless of usage level.