Guarantees And Indemnification Obligations

3 Months Ended

Mar. 29, 2020

Guarantees And Indemnification Obligations [Abstract]

Guarantees And Indemnification Obligations

) Guarantees and Indemnification Obligations

As permitted under Delaware law, we have agreements whereby we indemnify certain of our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited. However, we have directors’ and officers’ liability

insurance policies that insure us with respect to certain events covered under the policies and should enable us to recover a portion of any future amounts paid under the indemnification agreements. We have no liabilities recorded from those agreements as of March 29, 2020.

We record provisions for the estimated cost of product warranties, primarily from historical information, at the time product revenue is recognized. We also record provisions with respect to any significant individual warranty issues as they arise. While we engage in extensive product quality programs and processes, our warranty obligation is affected by product failure rates, utilization levels, material usage, service delivery costs incurred in correcting a product failure, and supplier warranties on parts delivered to us. Should actual product failure rates, utilization levels, material usage, service delivery costs or supplier warranties on parts differ from our estimates, revisions to the estimated warranty liability would be required.

The following table sets forth information related to our product warranty reserves for the three months ended March 29, 2020 (in thousands):

Balance beginning December 31, 2019	$	1,642
Provisions	368
Claims settled	(682		)
Currency translation adjustment	(29		)
Balance ending March 29, 2020	$	1,299

Warranty obligations were $1.6 million as of December 31, 2019 and $1.3 million as of March 29, 2020, reflecting a decrease in the reserve for the three months ended March 29, 2020, as new provisions were more than offset by net claims settled.