Netgear 2013 Annual Report Download - page 55

Table of Contents
acquisitions and the price of our common stock. During the year ended December 31, 2013, we repurchased and retired 2.0 million shares or $63.1
million of common stock under this authorization and we did not repurchase any shares during the years ended December 31, 2012 or 2011 .
We also repurchased approximately 14,000 shares, or $0.5 million
of common stock under a repurchase program to help administratively facilitate
the withholding and subsequent remittance of personal income and payroll taxes for individuals receiving RSUs during the year ended
December 31,
2013 . Similarly, during the years ended December 31, 2012 and December 31, 2011 , we repurchased approximately 22,000 shares and 25,000
shares,
respectively, or $0.9 million and $0.9 million
of common stock, respectively, under the same program to help facilitate tax withholding for RSUs. These
shares were retired upon repurchase.
Based on our current plans and market conditions, we believe that our existing cash, cash equivalents and short-
term investments will be sufficient
to satisfy our anticipated cash requirements for the foreseeable future. However, we cannot be certain that our planned levels of revenue, costs and
expenses will be achieved. If our operating results fail to meet our expectations or if we fail to manage our inventory, accounts receivable or other assets,
we could be required to seek additional funding through public or private financings or other arrangements. In addition, as we continue to expand our
product offerings, channels and geographic presence, we may require additional working capital. In such event, adequate funds may not be available
when needed or may not be available on favorable or commercially acceptable terms, which could have a negative effect on our business and results of
operations.
Backlog
As of December 31, 2013
, we had a backlog of approximately $139.4 million, compared to approximately $104.6 million as of December 31,
2012
, primarily due to product demand required in the future. Our backlog consists of products for which customer purchase orders have been received
and that are scheduled or in the process of being scheduled for shipment. While we expect to fulfill the order backlog within the current year, most
orders are subject to rescheduling or cancellation with little or no penalties. Because of the possibility of customer changes in product scheduling or
order cancellation, our backlog as of any particular date may not be an indicator of net sales for any succeeding period.
Contractual Obligations and Off-Balance Sheet Arrangements
Contractual Obligations
The following table describes our commitments to settle non-cancelable lease and purchase commitments as of December 31, 2013 (in thousands).
We lease office space, cars and equipment under non-
cancelable operating leases with various expiration dates through December 2026. Rent
expense in the years ended December 31, 2013 , 2012 , and 2011 was $9.9 million , $7.6 million and $7.0 million
, respectively. The terms of some of
the office leases provide for rental payments on a graduated scale. We recognize rent expense on a straight-
line basis over the lease period, and have
accrued for rent expense incurred but not paid. The amounts presented are consistent with contractual terms and are not expected to differ significantly,
unless a substantial change in our headcount needs requires us to exit an office facility early or expand our occupied space.
We enter into various inventory-
related purchase agreements with suppliers. Generally, under these agreements, 50% of the orders are cancelable
by giving notice 46 to 60 days prior to the expected shipment date and 25% of orders are cancelable by giving notice 31 to 45 days prior to the expected
shipment date. Orders are not cancelable within 30 days prior to the expected shipment date. At December 31, 2013 , we had $187.3 million in non-
cancelable purchase commitments with suppliers. We expect to sell all products for which we have committed purchases from suppliers.
As of December 31, 2013 and December 31, 2012
, we had $14.6 million and $13.8 million, respectively, of total gross unrecognized tax benefits
and related interest. The timing of any payments that could result from these unrecognized tax benefits will depend upon a number of factors. The
unrecognized tax benefits have been excluded from the contractual obligations table
52
Less Than 1-3 3-5 More Than
1 Year Years Years 5 Years Total
Operating leases
$
2,987
$
15,248
$
9,726
$
5,988
$
33,949
Purchase obligations
187,348
— — —
187,348
$
190,335
$
15,248
$
9,726
$
5,988
$
221,297