Logitech 2011 Annual Report Download - page 163

ANNUAl REPORT
151
On October 12, 2010, the legislature of the U.S. state of California enacted a fiscal budget bill which extended
the suspension of net operating losses for tax years beginning on or after January 1, 2008 through January 1, 2012.
The legislation also affects the methodology used by corporate taxpayers to apportion income to California and
modifies the large corporate underpayment penalty effective for our fiscal years ending March 31, 2011 and 2012.
Although the Company has significant operations in California, we believe these changes will not have a material
impact on our results of operations, cash flows or financial condition.
During the third quarter of fiscal year 2011, the U.S. Internal Revenue Service expanded its examination of
the Company’s U.S. subsidiary to include fiscal years 2008 and 2009 in addition to fiscal years 2006 and 2007. The
Company is also under examination in other tax jurisdictions. As of March 31, 2011, we are not able to estimate the
potential future liability, if any, which may result from these examinations.
Other contractual obligations and commitments of the Company which require cash are described in the
following sections.
Over the past several years, we have been able to generate positive cash flow from our operating activities,
including cash from operations of $156.6 million in fiscal year 2011. We believe that our cash and cash equivalents,
cash flow generated from operations, and available borrowings under our bank lines of credit will be sufficient to
fund our operations for the foreseeable future.
Contractual Obligations and Commitments
As of March 31, 2011, the Company’s outstanding contractual obligations and commitments included:
(i) facilities leased under operating lease commitments, (ii) purchase commitments and obligations, (iii) long-term
liabilities for income taxes payable, and (iv) defined benefit pension plan and non-retirement post-employment
benefit obligations. The following summarizes our contractual obligations and commitments at March 31, 2011
(in thousands):
Payments Due by Period
Total Less than 1 year 1-3 years 4-5 years More than 5 years
Operating leases ................................. $72,591 $18,023 $25,469 $14,832 $14,267
Purchase commitments — inventory ................. 165,286 165,286 — — —
Purchase obligations — capital expenditures . . . . . . . . . . 10,724 10,724 — — —
Purchase obligations — operating expenses . . . . . . . . . . . 49,839 49,839
Income taxes payable — non-current(1) ............... 131,968
Obligation for management deferred compensation(1) .... 13,076
Pension and post-employment obligations(1). . . . . . . . . . . . 26,645
Other long-term liabilities(2) ........................ 14,146 — — — —
Total contractual obligations and commitments . . . . . . . . $484,275 $243,872 $25,469 $14,832 $14,267
(1) As specific payment dates for these obligations are unknown, the related balances have not been reflected in
the “Payments Due by Period” section of the table.
(2) Other long-term liabilities at March 31, 2011 included $4.3 million of royalties payable, $5.6 million in
deferred service revenue, and $4.2 million related to various other obligations. As specific payment dates for
these obligations are unknown, the related balances have not been reflected in the “Payments Due by Period”
section of the table.