Annual report pursuant to Section 13 and 15(d)

Commitments And Contingencies

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Commitments And Contingencies
12 Months Ended
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments And Contingencies
COMMITMENTS AND CONTINGENCIES
Leases—The Company has entered into noncancelable operating leases for some of the facilities including related office equipment located in the U.S. and Europe through 2024. Minimum lease payments under noncancelable operating leases as of December 31, 2016 are as follows (in thousands):  
 
Operating
Leases
Year Ending December 31,
 
2017
$
3,985

2018
3,186

2019
2,996

2020
2,590

2021
2,250

Thereafter
2,838

Total minimum lease payments
$
17,845

 
Rent expense, which is recorded on the straight-line method from commencement over the period of the lease, totaled $5.3 million, $4.4 million and $4.3 million in 2016, 2015, and 2014, respectively.
Purchase commitments—The Company has various purchase obligations for goods or services totaling $48.8 million at December 31, 2016, which are expected to be paid within the next year.
Indemnifications—Under the bylaws, the Company has agreed to indemnify the officers and directors for certain events or occurrences arising as a result of the officer or director serving in such capacity. The Company has a director and officer liability insurance policy that limits the exposure under these indemnifications and enables them to recover a portion of any future loss arising out of them. In addition, the Company entered into indemnification agreements with other parties in the ordinary course of business. The Company has determined that these agreements fall within the scope of ASC 460, Guarantees. In some cases liability insurance is obtained to provide coverage that limits its exposure for these other indemnified matters. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. The Company believes the estimated fair value of these indemnification agreements is minimal and have not recorded a liability for these agreements as of December 31, 2016.
Legal matters—The Company may from time to time become a party to various legal proceedings or claims that arise in the ordinary course of business. The Company does not believe that any current legal or administrative proceedings are likely to have a material effect on business, financial condition, or results of operations.
On January 30, 2017, an alleged class action entitled Badger v. Natus Medical Incorporated, et al., No. 3:17-cv-00458-JSW, was filed in the United States District Court for the Northern District of California against the Company and two of our officers. The suit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for allegedly misleading statements regarding our business (including a contract entered into by a subsidiary of the Company), guidance and financial results. The suit is purportedly brought on behalf of purchasers of our common stock between October 16, 2015 and April 3, 2016, and seeks compensatory damages, fees and costs. The Company believes the claims are without merit and intend to defend them vigorously. Due to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of this manner. The Company is unable at this time to determine whether the outcome of the litigation would have a material impact on results of operations, financial condition or cash flow.