iRobot 2015 Annual Report Download - page 153

iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
70
there were no material accrued interest or penalties. Over the next twelve months, it is reasonably possible that the
Company may recognize approximately $0.2 million of previously net unrecognized tax benefits related to U.S. federal,
state and foreign tax audits and expiration of the statute of limitations. If all of our unrecognized tax benefits as of
January 2, 2016 were to become recognizable in the future, we would record a $2.1 million benefit, inclusive of interest,
to the income tax provision, reflective of federal benefit on state items.
Included in the Company’s state tax credit carryforwards are unrecognized tax benefits related to stock-based
compensation beginning from January 1, 2006 of $0.6 million and $0.5 million as of January 2, 2016 and December 27,
2014, respectively. Included in the Company's state net operating loss carryforwards are unrecognized tax benefits related
to stock-based compensation beginning from January 1, 2006 of $1.0 million and $0.7 million as of January 2, 2016 and
December 27, 2014, respectively. These unrecognized tax benefits will be credited to additional paid-in capital when they
reduce income taxes payable. Therefore, these amounts were not included in the Company’s gross or net deferred tax
assets at January 2, 2016 and December 27, 2014.
The Company follows the with and without approach for direct and indirect effects of windfall tax deductions.
11. Commitments and Contingencies
Legal
From time to time and in the ordinary course of business, the Company is subject to various claims, charges and
litigation. The outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be
disposed of unfavorably to us, which could materially affect the Company's financial condition or results of operations.
Lease Obligations
The Company leases its facilities. Rental expense under operating leases for fiscal 2015, 2014 and 2013 amounted to $4.9
million, $4.8 million, and $5.3 million, respectively. Future minimum rental payments under operating leases were as follows
as of January 2, 2016:
Operating
Leases
2016 $3,856
2017 3,411
2018 2,957
2019 2,925
2020 978
Thereafter
—
Total minimum lease
p
a
y
ments $14,127
Outstanding Purchase Orders
At January 2, 2016, we had outstanding purchase orders aggregating approximately $74.7 million. The purchase orders,
the majority of which are with our contract manufacturers for the purchase of inventory in the normal course of business, are
for manufacturing and non-manufacturing related goods and services, and are generally cancelable without penalty. In
circumstances where we determine that we have financial exposure associated with any of these commitments, we record a
liability in the period in which that exposure is identified.
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. The term of these indemnification agreements is generally perpetual any time after
Form 10-K