COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We are party or subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business, including proceedings and claims that relate to intellectual property matters. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized or reserved, if any.

Commitments

The Company leases certain of its facilities under various operating leases that expire at various dates through June 2025. The lease agreements generally include renewal provisions and require the Company to pay property taxes, insurance, and maintenance costs.

Future annual minimum payments for all commitments are as follows:



	Payment due by period
	Total		Fiscal year 2015		Fiscal year 2016		Fiscal year 2017		Fiscal year 2018		Fiscal year 2019		Thereafter
Contractual Obligations	(in thousands)
Operating lease obligations (1)	$	35,051	$	10,593	$	8,462	$	7,361	$	5,012	$	1,528	$	2,096
Software license	4,038		4,038		—		—		—		—		—
Long-term debt obligations (2)	1,001,398		372		1,026		—		—		500,000		500,000
Interest payments associated with long-term debt obligations (3)	201,842		29,397		29,381		29,375		29,375		21,736		62,578
Capital equipment and inventory related purchase obligations (4)	21,740		3,111		2,739		2,749		2,795		2,843		7,503

Total	$	1,264,069	$	47,511	$	41,608	$	39,485	$	37,182	$	526,107	$	572,177

(1) The Company leases some facilities under non-cancelable operating lease agreements that expire at various dates through 2025.

(2) Long-term debt represents amounts primarily due for the Company's long-term notes.

(3) Interest payments associated with the Company's long-term notes.

(4) Capital equipment purchase obligations represent commitments for purchase of property, plant and equipment. The Company orders some materials and supplies in advance or with minimum purchase quantities. The Company is obligated to pay for the materials and supplies when received.

Purchase orders for the purchase of the majority of our raw materials and other goods and services are not included in the table. Our purchase orders generally allow for cancellation without significant penalties. We do not have significant agreements for the purchase of raw materials or other goods specifying minimum quantities or set prices that exceed our expected short-term requirements.

Rental expense amounted to approximately $10.8 million, $9.5 million, and $17.4 million in fiscal years 2014, 2013 and 2012, respectively.

Indemnification

The Company indemnifies certain customers, distributors, suppliers and subcontractors for attorney fees and damages and costs awarded against such parties in certain circumstances in which the Company's products are alleged to infringe third party intellectual property rights, including patents, registered trademarks or copyrights. The terms of the Company's indemnification obligations are generally perpetual from the effective date of the agreement. In certain cases, there are limits on and exceptions to the Company's potential liability for indemnification relating to intellectual property infringement claims.

Pursuant to the Company's charter documents and separate written indemnification agreements, the Company has certain indemnification obligations to its current officers, employees and directors, as well as certain former officers and directors.

Product Warranty

The Company generally warrants its products for one year from the date of shipment against defects in materials, workmanship and material non-conformance to the Company’s specifications. The general warranty policy provides for the repair or replacement of defective products or a credit to the customer’s account. In addition, the Company may consider its relationship with the customer when reviewing product claims. In limited circumstances and for strategic customers in certain unique industries and applications, our product warranty may extend for up to five years, and may also include financial responsibility, such as the payment of monetary compensation to reimburse a customer for its financial losses above and beyond repairing or replacing the product or crediting the customer’s account should the product not meet the Company’s specifications and losses and/or damages results from the defective product. The Company’s results of operations for the year ended June 28, 2014 include a charge of $19.8 million primarily related to a product claim with a major customer. This charge includes product replacement and the cost to remove and install replacement product. Additionally, the Company assumed $15.4 million of warranty claims from Volterra in connection with the Company’s acquisition of Volterra on October 1, 2013.

Accruals are based on specifically identified claims and on the estimated, undiscounted cost of incurred-but-not-reported claims. If there is a material increase in the rate of customer claims compared with our historical experience or if the Company's estimates of probable losses relating to specifically identified warranty exposures require revision, the Company may record a charge against future cost of sales. Product warranty liability is included within the balance sheet captions “Accrued expenses” and “Other liabilities” in the accompanying Consolidated Balance Sheets.

The changes in the Company's aggregate product warranty liabilities for the fiscal year ended June 28, 2014 were as follows:



	June 28, 2014
	(in thousands)
Product warranty liability at June 29, 2013	$	3,075
Accruals assumed from acquisition	15,443
Accruals for warranties	19,818
Payments	(16,189		)
Changes in estimate	(851		)
Product warranty liability at June 28, 2014	$	21,296

Current portion at June 28, 2014	12,696
Non-current portion June 28, 2014	$	8,600