COMMITMENTS AND CONTINGENCIES

The following table summarizes our future principal contractual obligations as of March 31, 2015 (in thousands):



	Total		2015 (remainder)		2016		2017		2018		2019		Thereafter
Operating lease commitments	$	40,130	$	9,560	$	9,453	$	7,252	$	6,506	$	4,567	$	2,792
Less: Sublease rental income	224		224		—		—		—		—		—
Operating lease commitments—net	39,906		9,336		9,453		7,252		6,506		4,567		2,792
Inventory purchase commitments	67,715		67,715		—		—		—		—		—
Other contractual commitments and open purchase orders	28,108		26,020		1,518		570		—		—		—
Total	$	135,729	$	103,071	$	10,971	$	7,822	$	6,506	$	4,567	$	2,792

Operating Leases—We lease certain facilities under various non-cancelable operating leases, which expire through 2024. In addition to the amounts above, certain leases require us to pay variable costs such as taxes, maintenance, insurance, and asset retirement obligations. The terms of certain operating leases also provide for renewal options and escalation clauses. Rent expense was $3.1 million and $2.7 million during the three months ended March 31, 2015 and 2014, respectively. Rent expense is recognized using the straight-line method over the term of the lease.

Contract Manufacturer and Other Commitments—Our independent contract manufacturers procure components and build our products based on our forecasts. These forecasts are based on estimates of future demand for our products, which are in turn based on historical trends and analysis, adjusted for overall market conditions. In order to reduce manufacturing lead times and plan for adequate component supply, we may issue purchase orders to some of our independent contract manufacturers which may not be cancelable. As of March 31, 2015, we had $67.7 million of open purchase orders with our independent contract manufacturers.

In addition to commitments with contract manufacturers, we have other contractual commitments and open purchase orders in the ordinary course of business for which we have not received goods or services. As of March 31, 2015, we had $28.1 million in other contractual commitments and open purchase orders.

Warranties—Accrued warranty activities are summarized as follows (in thousands):



	Three Months Ended
	March 31, 2015			March 31, 2014
Accrued warranty balance—beginning of the period	$	4,269		$	3,037
Warranty costs incurred	(1,095		)	(756		)
Provision for warranty for the period	945			837
Adjustment related to pre-existing warranties	222			(313		)
Accrued warranty balance—end of the period	$	4,341		$	2,805

Litigation—We are involved in disputes, litigation, and other legal actions. For lawsuits where we are the defendant, we are in the process of defending these litigation matters, and while there can be no assurances and the outcome of these matters is currently not determinable, we currently believe that there are no existing claims or proceedings that are likely to have a material adverse effect on our financial position. There are many uncertainties associated with any litigation and these actions or other third-party claims against us may cause us to incur costly litigation or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require us to make royalty payments, which could adversely affect our gross margins in future periods. If any of those events were to occur, our business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, if any, which could result in the need to adjust the liability and record additional expenses. We have not recorded any significant accrual for loss contingencies associated with such legal proceedings; determined that an unfavorable outcome is probable or reasonably possible; or determined that the amount or range of any possible loss is reasonably estimable.

Indemnification—Under the indemnification provisions of our standard sales contracts, we agree to defend our customers against third-party claims asserting various allegations such as damage resulting from product defects and infringement of certain intellectual property rights, which may include patents, copyrights, trademarks, or trade secrets, and to pay judgments entered on such claims. Our exposure under these indemnification provisions is generally limited by the terms of our contracts to certain defined limits, such as the total amount paid by our customer under the agreement. However, certain agreements include covenants and indemnification provisions including and beyond indemnification for third-party claims of intellectual property infringement and that could potentially expose us to losses in excess of the amount received under the agreement and, in some instances, to potential liability that is not contractually limited. To date, there have been no awards under such indemnification provisions.