iRobot 2010 Annual Report Download - page 90

Contractual Obligations
We generally do not enter into binding purchase commitments. Our principal commitments consist of
obligations under our working capital line of credit, leases for office space and minimum contractual obligations
for services. The following table describes our commitments to settle contractual obligations in cash as of January 1,
2011:
Less Than
1 Year
1to3
Years
3to5
Years
More Than
5 Years Total
Payments Due by Period
(In thousands)
Operating leases ................ $2,904 $ 5,112 $4,889 $10,327 $23,232
Minimum contractual payments ..... 577 9,850 — — 10,427
Other obligations ............... 379 314 — — 693
Total......................... $3,860 $15,276 $4,889 $10,327 $34,352
Our minimum contractual payments consist of payments to our provider of direct fulfillment services for direct
to consumer sales of our home robots and payments to a key component supplier for our home robots, which
payments are incurred in the ordinary course of business. Based on historical and current operations, we believe that
we will exceed these minimum contractual obligations in our ordinary course of business. Other obligations consist
of software license and services agreement for our home robots division web support.
Off-Balance Sheet Arrangements
As of January 1, 2011, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of
Regulation S-K.
Recently Issued Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board, or FASB, issued an amendment to the accounting and
disclosure requirements for the consolidation of variable interest entities, or VIEs. The elimination of the concept of
a Qualifying Special Purpose Entity, removes the exception from applying the consolidation guidance within this
amendment. This amendment requires an enterprise to perform a qualitative analysis when determining whether or
not it must consolidate a VIE and requires an enterprise to continuously reassess whether it must consolidate a VIE.
Additionally, this amendment requires enhanced disclosures about an enterprise’s involvement with VIEs and any
significant change in risk exposure due to that involvement, as well as how its involvement with VIEs impacts the
enterprise’s financial statements. Finally, an enterprise will be required to disclose significant judgments and
assumptions used to determine whether or not to consolidate a VIE. This amendment is effective for financial
statements issued for fiscal years beginning after November 15, 2009. The implementation of this amendment did
not impact our consolidated financial statements.
In January 2010, FASB updated the disclosure requirements for fair value measurements. The updated
guidance requires companies to disclose separately the investments that transfer in and out of Levels 1 and 2 and the
reasons for those transfers. Additionally, in the reconciliation for fair value measurements using significant
unobservable inputs (Level 3), companies should present separately information about purchases, sales, issuances
and settlements. We adopted the updated guidance at the beginning of fiscal 2010, except for the disclosures about
purchases, sales, issuances and settlements in the Level 3 reconciliation, which are effective for fiscal years
beginning after December 15, 2010. We will adopt the remaining guidance at the beginning of fiscal 2011. The
adoption of the required guidance did not have an impact on our financial position, results of operations, or
disclosures. We do not expect that the adoption of the remaining guidance will have an impact on our financial
position, results of operations, or disclosures.
From time to time, new accounting pronouncements are issued by FASB that are adopted by us as of the
specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards, which
are not yet effective, will not have a material impact on our consolidated financial statements upon adoption.
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