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•	Expanded worldwide consumer adoption of Roomba supported by targeted marketing programs similar to the successful programs we introduced in the United States in 2015;

•	Wider geographic distribution of Roomba 980;

•	Building a second material revenue stream, which we expect to do with our wet floor care products; and

•	Regional growth in China, with specific emphasis on further accelerating growth in the e-commerce channel.

•	Strengthen our marketing capabilities globally and accelerate worldwide consumer adoption of Roomba to maintain our market-leading position in robotic vacuum cleaners;

•	Better position ourselves in China to capture an even larger share of the rapidly growing market for robotic floor care;

•	Develop our wet floor care business to generate a material, secondary revenue stream;

•	Scale our infrastructure to support future connected products;

•	Explore, develop and grow adjacent non-floor care home robot products that can generate meaningful diversified revenue streams; and

•	Make continued operational improvements that can reduce product and operating costs.

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•	the Federal Acquisition Regulations and supplemental agency regulations, which comprehensively regulate the formation and administration of, and performance under government contracts;

•	the Truth in Negotiations Act, which requires certification and disclosure of all cost and pricing data in connection with contract negotiations;

•	the Cost Accounting Standards, which impose accounting requirements that govern our right to reimbursement under cost-based government contracts;

•	the Foreign Corrupt Practices Act, which prohibits U.S. companies from providing anything of value to a foreign official to help obtain, retain or direct business, or obtain any unfair advantages;

•	the False Claims Act and the False Statements Act, which, respectively, impose penalties for payments made on the basis of false facts provided to the government, and impose penalties on the basis of false statements, even if they do not result in a payment; and

•	laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.

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•	generate sufficient revenue and gross margin to maintain profitability;

•	acquire and maintain market share in our consumer and defense markets;

•	attract and retain customers of our consumer robots;

•	attract and retain additional engineers and other highly-qualified personnel;

•	expand our product offerings beyond our existing robots; and

•	adapt to new or changing policies and spending priorities of governments and government agencies.

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•	the size, timing and mix of orders from retail stores and international distributors for our home robots;

•	the mix of products that we sell in the period;

•	disruption of supply of our products from our manufacturers;

•	disruptions to our supply chain due to inclement weather, labor disruptions or other factors beyond our control;

•	seasonality in the sales of our products;

•	unanticipated costs incurred in the introduction of new products;

•	costs and availability of labor and raw materials;

•	costs of freight;

•	changes in our rate of returns for our consumer products;

•	our ability to introduce new products and enhancements to our existing products on a timely basis;

•	warranty costs associated with our consumer products;

•	the size and timing of orders from military and other government agencies;

•	the amount of government funding and the political, budgetary and purchasing constraints of our government agency customers; and

•	cancellations, delays or contract amendments by government agency customers.

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•	lack of direct control over production capacity and delivery schedules;

•	lack of direct control over quality assurance, manufacturing yields and production costs;

•	lack of enforceable contractual provisions over the production and costs of consumer products;

•	risk of loss of inventory while in transit;

•	risks associated with international commerce, including unexpected changes in legal and regulatory requirements, changes in tariffs and trade policies, risks associated with the protection of intellectual property and political and economic instability; and

•	our attempts to add additional manufacturing resources may be significantly delayed and thereby create disruptions in production of our products.

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•	terminate contracts for convenience, in whole or in part, at any time and for any reason;

•	reduce or modify contracts or subcontracts if its requirements or budgetary constraints change;

•	cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable;

•	exercise production priorities, which allow it to require that we accept government purchase orders or produce products under its contracts before we produce products under other contracts, which may displace or delay production of more profitable orders;

•	claim certain rights in products provided by us; and

•	control or prohibit the export of certain of our products.

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•	the Federal Acquisition Regulations and supplemental agency regulations, which comprehensively regulate the formation and administration of, and performance under government contracts;

•	the Truth in Negotiations Act, which requires certification and disclosure of all cost and pricing data in connection with contract negotiations;

•	the Cost Accounting Standards, which impose accounting requirements that govern our right to reimbursement under cost-based government contracts;

•	the Foreign Corrupt Practices Act, which prohibits U.S. companies from providing anything of value to a foreign official to help obtain, retain or direct business, or obtain any unfair advantage;

•	the False Claims Act and the False Statements Act, which, respectively, impose penalties for payments made on the basis of false facts provided to the government, and impose penalties on the basis of false statements, even if they do not result in a payment;

•	laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data;

•	Certain contracts from the U.S. federal government may require us to maintain certain certifications including but not limited to AS9100 and CMMI;

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•	Contractor Purchasing Systems review (CPSR) requirements, which evaluate the efficiency and effectiveness with which we spend U.S. Government funds; and

•	The sale of our products in countries outside the United States is regulated by the governments of those countries. While compliance with such regulation will generally be undertaken by our international distributors, we may assist with such compliance and in certain cases may be liable if a distributor fails to comply.

•	costs incurred to combine the operations of businesses we acquire, such as transitional employee expenses and employee retention, redeployment or relocation expenses;

•	impairment of goodwill or intangible assets;

•	amortization of intangible assets acquired;

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•	a reduction in the useful lives of intangible assets acquired;

•	identification of or changes to assumed contingent liabilities, both income tax and non-income tax related after our final determination of the amounts for these contingencies or the conclusion of the measurement period (generally up to one year from the acquisition date), whichever comes first;

•	charges to our operating results to eliminate certain duplicative pre-merger activities, to restructure our operations or to reduce our cost structure;

•	charges to our operating results resulting from expenses incurred to effect the acquisition; and

•	charges to our operating results due to the expensing of certain stock awards assumed in an acquisition.

•	difficulties in staffing, managing and supporting operations in multiple countries;

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•	difficulties in enforcing agreements and collecting receivables through foreign legal systems and other relevant legal issues;

•	fewer legal protections for intellectual property;

•	foreign and U.S. taxation issues, tariffs, and international trade barriers;

•	difficulties in obtaining any necessary governmental authorizations for the export of our products to certain foreign jurisdictions;

•	potential fluctuations in foreign economies;

•	government currency control and restrictions on repatriation of earnings;

•	fluctuations in the value of foreign currencies and interest rates;

•	general economic and political conditions in the markets in which we operate;

•	domestic and international economic or political changes, hostilities and other disruptions in regions where we currently operate or may operate in the future;

•	changes in foreign currency exchange rates;

•	different and changing legal and regulatory requirements in the jurisdictions in which we currently operate or may operate in the future; and

•	outside of the United States, we primarily rely on a network of exclusive distributors, some of whom may be operating without written contracts.

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•	limitations on the removal of directors;

•	a classified board of directors so that not all members of our board are elected at one time;

•	advance notice requirements for stockholder proposals and nominations;

•	the inability of stockholders to act by written consent or to call special meetings;

•	the ability of our board of directors to make, alter or repeal our by-laws; and

•	the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval.

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ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(1)	Consists of shares of our common stock. All repurchases were made in open market transactions and pursuant to our previously-announced stock repurchase program.

(2)	On March 19, 2015, we announced the adoption of our stock repurchase program, which provided that we may purchase up to $50 million of our common stock from May 1, 2015 to April 30, 2016.

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ITEM  7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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•	salaries and related costs for our engineers;

•	costs for high technology components used in product and prototype development;

•	costs of test equipment used during product development; and

•	occupancy and other overhead costs.

•	salaries and related costs for sales and marketing personnel;

•	salaries and related costs for executives and administrative personnel;

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•	advertising, marketing and other brand-building costs;

•	customer service costs;

•	professional services costs;

•	information systems and infrastructure costs;

•	travel and related costs; and

•	occupancy and other overhead costs.

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(1)	Stock-based compensation recorded in fiscal 2015, 2014 and 2013 breaks down by expense classification as follows.

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(1)	Stock-based compensation recorded in fiscal 2015, 2014 and 2013 breaks down by expense classification as follows:

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(*)	Deductions related to allowance for doubtful accounts represent amounts written off against the allowance, less recoveries.

(*)	Deductions related to inventory reserve accounts represent amounts written off against the reserve.

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(1)	The aggregate intrinsic value on the table was calculated based upon the positive difference between the closing market value of the Company’s stock on January 2, 2016 of $35.40 and the exercise price of the underlying option.

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(*)	Warranty usage includes costs incurred for warranty obligations.

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ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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•	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

•	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

•	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

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ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

1.	Financial Statements

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2.	Financial Statement Schedules

3.	Exhibits — See item 15(b) of this report below

(b)	Exhibits

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