COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is 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, the Company does 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 2036. 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 2017		Fiscal year 2018		Fiscal year 2019		Fiscal year 2020		Fiscal year 2021		Thereafter
Contractual Obligations	(in thousands)
Operating lease obligations (1)	$	53,568	$	8,778	$	6,827	$	5,106	$	4,907	$	4,409	$	23,541
Short-term debt obligations (2)	250,000		250,000		—		—		—		—		—
Long-term debt obligations (3)	1,000,000		—		—		500,000		—		—		500,000
Interest payments associated with debt obligations (4)	147,388		33,699		29,375		21,736		16,875		16,875		28,828
Capital equipment and inventory related purchase obligations (5)	725,987		100,875		87,760		75,285		74,467		62,958		324,642
Total	$	2,176,943	$	393,352	$	123,962	$	602,127	$	96,249	$	84,242	$	877,011

(1) The Company leases some facilities under non-cancelable operating lease agreements that expire at various dates through 2030.

(2) Short-term debt represents amounts primarily due for the Company's short-term credit agreement.

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

(4) Interest payments calculated based on contractual payment requirements under the debt agreements.

(5) 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. Additionally, in 2016 the Company entered into a long term supply agreement with the semiconductor foundry TowerJazz to supply finished wafers on existing Maxim processes and products which contains minimum purchase requirements.

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

Rental expense amounted to approximately $10.0 million, $9.0 million, and $10.8 million in fiscal years 2016, 2015 and 2014, 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 changes in the Company's aggregate product warranty liabilities for the fiscal years ended June 25, 2016 and June 27, 2015 were as follows:



	June 25, 2016			June 27, 2015
	(in thousands)
Product warranty liability at beginning of the year	$	13,436		$	21,296
Accruals	3,518			1,665
Payments	(9,300		)	(8,686		)
Changes in estimate	952			(839		)
Product warranty liability at ending of the year	$	8,606		$	13,436
Current portion	8,606			9,136
Non-current portion	$	—		4,300