Guarantees

12 Months Ended

Dec. 26, 2020

Product Warranties

Activity related to product warranty was as follows (in thousands):


	December 26, 2020		December 28, 2019
Beginning balance	$	43,348	$	41,021
Charges to operations	23,973		23,874
Utilization	(31,462)		(25,070)
Change in estimate(1)	4,849		3,523
Balance at the end of the period	$	40,708	$	43,348

(1)The Company records product warranty liabilities based on the latest quality and cost information available as of the date the revenue is recorded. The changes in estimate shown here are due to changes in overall actual failure rates, the mix of new versus used units related to replacement of failed units, and changes in the estimated cost of repair and product recalls. During the year ended December 26, 2020, the Company recorded $5.0 million in product warranty cost as a result of revising estimated failure rates and repair cost data for certain products. As the Company's products mature over time, failure rates and repair costs associated with such products generally decline leading to favorable changes in warranty reserves.

Letters of Credit and Bank Guarantees

The Company had $28.9 million of standby letters of credit, bank guarantees and surety bonds outstanding as of December 26, 2020. These consisted of $19.5 million related to customer performance guarantees, $0.3 million of value-added tax and customs' licenses, $4.0 million related to property leases, $4.4 million related to Coriant pre-acquisition restructuring plans, $0.6 million related to credit cards and $0.1 million for other liabilities. Of the $19.5 million related to customer performance guarantees, approximately $2.8 million was used to secure Surety Bonds in the aggregate of $5.5 million.

Of the aforementioned standby letters of credit and bank guarantees outstanding, $11.5 million was backed by cash collateral from a third-party institution, and the Company accrues 2.25% annual fee and 0.13% annual fronting fee on the average LOC balances outstanding on the cash collateral.

The Company had $27.9 million of standby letters of credit and bank guarantees outstanding as of December 28, 2019. These consisted of $14.2 million related to customer performance guarantees, $0.4 million of value-added tax and customs' licenses, $5.9 million related to property leases, $6.8 million related to Coriant pre-acquisition restructuring plans, $0.5 million related to credit cards and $0.1 million for other liabilities.

As of December 26, 2020 and December 28, 2019, the Company had a Credit Facility, which included a $50.0 million letter of credit sub-facility, pursuant to which letters of credit in the amount of $11.5 million and $4.1 million had been issued and outstanding for both periods, respectively. Approximately $169.5 million and $180.9 million of assets of certain Company subsidiaries have been pledged to secure this Credit Facility and other obligations as of December 26, 2020 and December 28, 2019, respectively.