Logitech 2014 Annual Report Download - page 285

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12 — Commitments and Contingencies (Continued)
Changes in the Company’s warranty liability for fiscal years 2014 and 2013 were as follows (in thousands):
Years Ended March 31,
2014 2013
As revised
Beginning of the period........................................... $ 21,442 $ 26,618
Provision.................................................... 15,817 12,879
Settlements .................................................. (15,206) (15,728)
Adjustment(1) ................................................ 2,327 (2,327)
End of the period ................................................ $ 24,380 $ 21,442
(1) During fiscal year 2014, the warranty liability allocated to the Company’s Remotes product category was
reclassified from liabilities held for sale.
Deferred Services Revenue
The Company’s video conferencing reporting unit offers maintenance contracts for sale of the majority of
its products which allow for customers to receive service and support in addition to the expiration of the product
warranty contractual term. The Company also provides installation services to its customer under contractual
arrangements. The Company recognizes these contracts over the life of the service period.
Change in the Company’s deferred services revenue during fiscal years 2014 and 2013 were as follows (in
thousands):
Years Ended March 31,
2014 2013
Beginning of the period........................................... $ 29,327 $ 24,568
Extended warranties issued ..................................... 33,007 34,069
Amortization................................................. (32,174) (29,310)
End of the period ................................................ $ 30,160 $ 29,327
The cost of providing these services for fiscal years 2014 and 2013 was $7.8 million and $8.5 million,
respectively.
Purchase Commitments
As of March 31, 2014, the Company had the following outstanding purchase commitments:
Inventory commitments........................................... $102,760
Operating expenses .............................................. 45,969
Capital commitments............................................. 12,994
Total purchase commitments .................................... $161,723
Commitments for inventory purchases are made in the normal course of business to original design
manufacturers, contract manufacturers and other suppliers and are expected to be fulfilled by June 30, 2014.
Operating expense commitments are for consulting services, marketing arrangements, advertising, outsourced
customer services, information technology maintenance and support services, and other services. Fixed purchase
commitments for capital expenditures primarily related to commitments for computer hardware and leasehold
ANNUAl REPORT
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