Logitech 2014 Annual Report Download - page 188

Other Contingencies:
As previously announced, some of the issues reviewed by the Audit Committee are also the subject of an
ongoing formal investigation by the SEC, including the accounting for Revue inventory valuation reserves that
resulted in the restatement, revision to the Company’s financial statements concerning warranty accruals and
amortization of intangible assets presented in our Form 10-K/A, filed on August 7,2013, and the Company’s
transactions with a distributor for Fiscal Year 2007 through Fiscal Year 2009. The Company is cooperating with
the SEC in its ongoing investigation. The Company has entered into an agreement with the SEC to extend the
statute of limitations. The Company cannot predict the outcome of the investigation at this time and potential fines
or penalties, if any, that may arise from the investigation are currently not estimable.
Guarantees
Logitech International S.A., the parent holding company, has issued several parent guarantees on behalf of its
subsidiaries. The maximum potential future payment under the guarantee arrangements is limited to $80.0 million.
As of March 31, 2014, there were no purchase obligations outstanding for which the parent holding company was
required to guarantee payment.
Logitech Europe S.A., a subsidiary of the parent holding company, has guaranteed the purchase obligations of
another Logitech subsidiary under a guarantee agreement. This guarantee does not specify a maximum amount. As
of March 31, 2014, the amount of purchase obligations outstanding under this guarantee was immaterial. In addition,
Logitech Europe S.A. also guaranteed payments of a third-party contract manufacturer’s purchase obligations. As
of March 31, 2014, the maximum amount of this guarantee was $3.5 million, of which $2.3 million of guaranteed
purchase obligations were outstanding.
Indemnifications
We indemnify certain of our suppliers and customers for losses arising from matters such as intellectual
property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies,
but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees.
As of March 31, 2014, no amounts have been accrued for indemnification provisions. We do not believe, based
on historical experience and information currently available, that it is probable that any material amounts will be
required to be paid under our indemnification arrangements.
We also indemnify our current and former directors and certain of our current and former officers. Certain
costs incurred for providing such indemnification may be recoverable under various insurance policies. We are
unable to reasonably estimate the maximum amount that could be payable under these arrangements because these
exposures are not capped, the obligations are conditional in nature, and the facts and circumstances involved in any
situation that might arise are variable.
Research and Development
For a discussion of the Company’s research and development activities, patents and licenses, please refer to
Item 1, Business.
172