iRobot 2011 Annual Report Download - page 93
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Interest Rate Sensitivity
At December 31, 2011, we had unrestricted cash and cash equivalents of $166.3 million and short term
investments of $17.8 million. The unrestricted cash and cash equivalents are held for working capital purposes.
We do not enter into investments for trading or speculative purposes. Some of the securities in which we invest,
however, may be subject to market risk. This means that a change in prevailing interest rates may cause the fair
market value of the investment to fluctuate. To minimize this risk in the future, we intend to maintain our
portfolio of cash equivalents in a variety of securities, commercial paper, money market funds, debt securities
and certificates of deposit. Due to the short-term nature of these investments, we believe that we do not have any
material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.
As of December 31, 2011, all of our cash and cash equivalents were held in demand deposits and money market
accounts.
Our exposure to market risk also relates to the increase or decrease in the amount of interest expense we
must pay on any outstanding debt instruments, primarily certain borrowings under our working capital line of
credit. The advances under the working capital line of credit bear a variable rate of interest determined as a
function of the LIBOR rate at the time of the borrowing. At December 31, 2011, we had letters of credit
outstanding of $1.7 million under our revolving letter of credit facility.
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