Plantronics 2011 Annual Report Download - page 74

As a result of these restructuring actions, the Company recorded approximately $1.9 million and $11.0 million of Restructuring
and other related charges during the years ended March 31, 2010 and 2009, respectively, consisting of severance and benefits
along with facilities and equipment charges. In addition, during the year ended March 31, 2010, the Company recorded non-cash
charges of $5.2 million for accelerated depreciation related to the building and equipment associated with manufacturing operations
which is included in Cost of revenues. There were no charges during the year ended March 31, 2011; however, in the third quarter
of fiscal 2011, the Company completed the sale of its Suzhou facility, which was classified as Assets held for sale, resulting in an
immaterial net gain which was recorded in Restructuring and other related charges.
As of March 31, 2011, the Company has recorded a total of $17.7 million of costs related to these actions, which includes $11.2
million of severance and benefits and $6.9 million in non-cash charges related to accelerated depreciation charges, the write-off
of facilities and equipment and impairment loss on Assets held for sale, offset in part by a $0.4 million net gain on the final sale
of the Suzhou facility. All of these costs and the gain on sale were recorded in Restructuring and other related charges, with the
exception of $5.2 million of accelerated depreciation which was recorded in Cost of revenues. All the costs related to these actions
have been paid as of March 31, 2011.
11. COMMITMENTS AND CONTINGENCIES
MINIMUM FUTURE RENTAL PAYMENTS. The Company leases certain equipment and facilities under operating leases
expiring in various years through fiscal 2017. Minimum future rental payments under non-cancelable operating leases having
remaining terms in excess of one year as of March 31, 2011 are as follows:
Fiscal Year Ending March 31,
2012
2013
2014
2015
2016
Thereafter
Total minimum future rental payments
(in thousands)
$ 4,340
3,936
3,431
1,407
711
87
$ 13,912
Total consolidated rent expense for operating leases included in both continuing and discontinued operations was approximately
$5.6 million, $6.0 million, and $6.9 million in fiscal 2011, 2010 and 2009, respectively.
EXISTENCE OF RENEWAL OPTIONS. Certain operating leases provide for renewal options for periods from one to three
years. In the normal course of business, operating leases are generally renewed or replaced by other leases.
INDEMNIFICATIONS. Under the terms of the Asset Purchase Agreement, dated October 2, 2009, a First Amendment to the
Asset Purchase Agreement, dated November 30, 2009, a Side Letter to the Asset Purchase Agreement, dated January 8, 2010, and
a second Side Letter to the Asset Purchase Agreement, dated February 15, 2010 (collectively, the “Purchase Agreement”) to sell
Altec Lansing, the Company’s AEG segment, the Company made representations and warranties to the purchaser about the
condition of AEG, including matters relating to intellectual property, employee matters and environmental laws. No
indemnification costs have been recorded as of March 31, 2011 or March 31, 2010.
OTHER GUARANTEES AND OBLIGATIONS. As is customary in the Company’s industry, as provided for in local law in the
U.S. and other jurisdictions, Plantronics’ standard contracts provide remedies to its customers, such as defense, settlement, or
payment of judgment for intellectual property claims related to the use of its products. From time to time, the Company indemnifies
customers against combinations of loss, expense, or liability arising from various trigger events relating to the sale and use of its
products and services. In addition, Plantronics also provides protection to customers against claims related to undiscovered
liabilities, additional product liability, or environmental obligations. In the Company’s experience, claims made under these
indemnifications are rare and the associated estimated fair value of the liability is not material.
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