Nautilus 2015 Annual Report Download - page 62
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Please find page 62 of the 2015 Nautilus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.(20) COMMITMENTS AND CONTINGENCIES
Operating Leases
We lease property and equipment under non-cancellable operating leases which, in the aggregate, extend through 2025. Many of these leases contain renewal
options and provide for rent escalations and payment of real estate taxes, maintenance, insurance and certain other operating expenses of the properties. Rent
expense under all operating leases was as follows (in thousands):
Year Ended December 31,
2015
2014
2013
Rent expense $ 5,033
$ 3,625
$ 3,473
As of December 31, 2015 , future minimum lease payments under non-cancellable leases, reduced for sublease income, were as follows (in thousands):
2016 $ 5,327
2017 4,439
2018 3,892
2019 3,989
2020 3,894
Thereafter 8,731
$ 30,272
Guarantees, Commitments and Off-Balance Sheet Arrangements
As of December 31, 2015 , we had approximately $0.5 million in letters of credit with certain vendors with expiration dates through April 2016 .
We have long lead times for inventory purchases and, therefore, must secure factory capacity from our vendors in advance. As of December 31, 2015 , we had
approximately $32.0 million in non-cancellable market-based purchase obligations, primarily for inventory purchases expected to be received within the next
twelve months. Purchase obligations can vary from quarter-to-quarter and versus the same period in prior years due to a number of factors, including the amount of
products that are shipped directly to Retail customer warehouses versus through Nautilus warehouses.
In the ordinary course of business, we enter into agreements that require us to indemnify counterparties against third-party claims. These may include: agreements
with vendors and suppliers, under which we may indemnify them against claims arising from use of their products or services; agreements with customers, under
which we may indemnify them against claims arising from their use or sale of our products; real estate and equipment leases, under which we may indemnify
lessors against third-party claims relating to the use of their property; agreements with licensees or licensors, under which we may indemnify the licensee or
licensor against claims arising from their use of our intellectual property or our use of their intellectual property; and agreements with parties to debt arrangements,
under which we 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.
We hold insurance policies that mitigate potential losses arising from certain types of indemnification obligations. Management does not deem these obligations to
be significant to our financial position, results of operations or cash flows and, therefore, no related liabilities were recorded as of December 31, 2015 .
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