iRobot 2008 Annual Report Download - page 127

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Lease Obligations
The Company leases its facilities. Rental expense under operating leases for fiscal 2008, 2007 and 2006
amounted to $3.8 million, $2.1 million, and $2.1 million, respectively. The Company recorded $0.7 million of
expense in the fiscal year ended December 27, 2008 for remaining lease commitments, net of estimated sublease
income, at its former corporate headquarters in Burlington, MA. Future minimum rental payments under operating
leases were as follows as of December 27, 2008:
Operating
Leases
2009 ................................................................ $ 2,625
2010 ................................................................ 2,414
2011 ................................................................ 2,306
2012 ................................................................ 2,254
2013 ................................................................ 2,087
Thereafter ............................................................ 12,698
Total minimum lease payments .......................................... $24,384
Guarantees and Indemnification Obligations
The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to
these agreements, the Company indemnifies and agrees to reimburse the indemnified party for losses incurred by
the indemnified party, generally the Company’s customers, in connection with any patent, copyright, trade secret or
other proprietary right infringement claim by any third party with respect to the Company’s software. The term of
these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum
potential amount of future payments the Company could be required to make under these indemnification
agreements is unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to
these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is
minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 27, 2008 and
December 29, 2007, respectively.
Warranty
The Company provides warranties on most products and has established a reserve for warranty based on
identified warranty costs. The reserve is included as part of accrued expenses (Note 5) in the accompanying balance
sheets.
Activity related to the warranty accrual was as follows:
December 27,
2008 December 29,
2007 December 30,
2006
Fiscal Year Ended
(In thousands)
Balance at beginning of period.................... $2,491 $ 2,462 $ 2,031
Provision.................................... 7,728 6,649 5,971
Warranty usage(*) ............................. (4,839) (6,620) (5,540)
Balance at end of period ........................ $5,380 $ 2,491 $ 2,462
(*) Warranty usage includes the pro rata expiration of product warranties not utilized.
79
iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Form 10-K