Logitech 2007 Annual Report Download - page 102

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Purchase Obligations
Purchase obligations represent an estimate of all open purchase orders and contractual obligations for capital
and other expenditures, for which the goods or services are not yet received. We had purchase obligations for
manufacturing equipment, tooling and leasehold improvements of $21.4 million as of March 31, 2007. We also
had other commitments of $28.3 million for consulting, information technology services, marketing
arrangements and advertising. Although open purchase orders are considered enforceable and legally binding, the
terms generally allow the Company the option to reschedule and adjust our requirements based on business needs
prior to delivery of goods or performance of services.
Off-Balance Sheet Arrangements
The Company has not entered into any transactions with unconsolidated entities whereby we have financial
guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose
us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an
unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company.
Guarantees
The Company has guaranteed the purchase obligations of some of its contract manufacturers to certain
component suppliers. These guarantees have a term of one year and are automatically extended for one or more
additional years as long as a liability exists. The amount of the purchase obligations of these manufacturers varies
over time, and therefore the amounts subject to Logitech’s guarantees similarly varies. At March 31, 2007, the
amount of these outstanding guaranteed purchase obligations was approximately $3.1 million. We do not believe,
based on historical experience and information currently available, that it is probable that any amounts will be
required to be paid under these guarantee arrangements.
Indemnifications
The Company indemnifies certain of its suppliers and customers for losses arising from matters such as
intellectual property rights and safety defects, subject to certain restrictions. The scope of these indemnities
varies and may include indemnification for damages and expenses, including reasonable attorneys’ fees. No
amounts have been accrued for indemnification provisions as of March 31, 2007. We do not believe, based on
historical experience and information currently available, that it is probable that any amounts will be required to
be paid under these indemnification arrangements.
Research and Development
For a discussion of the Company’s research and development activities, patents and licenses, please refer to
Item 4B “Business Overview.”
Trend Information
For a discussion of significant trends in the Company’s financial condition and results of operations, please
refer to Item 5 “Results of Operations” and “Liquidity and Capital Resources.”
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
Information concerning Directors and Senior Management of Logitech appears in Section 3 “The Board of
Directors” and Section 4 “Senior Management” in Exhibit 15.1 to the Form 20-F and is incorporated herein by
reference.
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