Logitech 2010 Annual Report Download - page 217

ANNUAl REPORT
205
The Company provides various third parties with irrevocable letters of credit in the normal course of business
to secure its obligations to pay or perform pursuant to the requirements of an underlying agreement or the provision
of goods and services. These standby letters of credit are cancelable only at the option of the beneficiary who is
authorized to draw drafts on the issuing bank up to the face amount of the standby letter of credit in accordance
with its terms. At March 31, 2010, the Company had $3.4 million of letters of credit in place, of which $0.3 million
was outstanding. These letters of credit relate primarily to equipment purchases by a subsidiary in China, and
expire between April and June 2010. At March 31, 2009, The Company had $0.4 million of letters of credit in place,
with no balance outstanding.
In November 2007, the Company acquired WiLife, Inc., a privately held company offering PC-based
video cameras for self-monitoring a home or a small business. The purchase agreement provides for a possible
performance-based payment, payable in the first calendar quarter of 2011. The performance-based payment is
based on net revenues attributed to WiLife during calendar 2010. No payment is due if the applicable net revenues
total $40.0 million or less. The maximum performance-based payment is $64.0 million. The total performance-
based payment amount, if any, will be recorded in goodwill and will not be known until the end of calendar year
2010. As of March 31, 2010, no amounts were payable towards performance-based payments under the WiLife
acquisition agreement.
The Company is involved in a number of lawsuits and claims relating to commercial matters that arise in
the normal course of business. The Company believes these lawsuits and claims are without merit and intends to
vigorously defend against them. However, there can be no assurances that its defenses will be successful, or that
any judgment or settlement in any of these lawsuits would not have a material adverse impact on the Company’s
business, financial condition, cash flows and results of operations. The Company’s accruals for lawsuits and claims
as of March 31, 2010 were not material.
Note 17 — Interest and Other Income
Interest and other income (expense), net was comprised of the following (in thousands):
Year ended March 31,
2010 2009 2008
Interest income ...................................... $ 2,406 $ 8,648 $ 15,752
Interest expense ..................................... (286)(20)(244)
Interest income, net .................................. $ 2,120 $8,628 $15,508
Foreign currency exchange gains, net . . . . . . . . . . . . . . . . . . . . $ 1,720 $13,680 $10,616
Gain on sale of investments, net ......................... — — 27,761
Insurance investment income (loss) ...................... 1,221 (2,883)710
Write-down of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . (643)(2,727)(79,823)
Other, net .......................................... 841 441 1,362
Other income (expense), net ............................ $3,139 $8,511 $(39,374)
Note 18 — Segment Information
The Company operates in two industry segments, personal peripherals and video conferencing, based on
product markets and internal organizational structure. The personal peripherals segment encompasses the design,
manufacturing and marketing of personal peripherals for personal computers and other digital platforms. The
video conferencing segment consists of the LifeSize division, and encompasses the design, manufacturing and
marketing of high-definition video and audio communication products for the enterprise and small-to-medium
business markets. The video conferencing operating segment does not meet the quantitative thresholds required for
separate disclosure of financial information.