Logitech 2011 Annual Report Download - page 164

152
Operating Leases
The Company leases facilities under operating leases, certain of which require it to pay property taxes,
insurance and maintenance costs. Operating leases for facilities are generally renewable at the Company’s option
and usually include escalation clauses linked to inflation. The remaining terms on our non-cancelable operating
leases expire in various years through 2028. Our asset retirement obligations on these leases as of March 31, 2011
were $1.6 million.
In May, 2011 we signed a new lease for facilities which will house our Americas operations in Northern
California, replacing our leased facilities in Fremont, California. Our future contractual obligation in connection
with this lease is approximately $35 million.
Purchase Commitments
We expect to continue making capital expenditures in the future to support product development activities
and ongoing and expanded operations. At March 31, 2011, fixed purchase commitments for capital expenditures
amounted to $10.7 million, and primarily relate to commitments for manufacturing equipment and tooling.
We also have commitments for inventory purchases made in the normal course of business to original design
manufacturers, contract manufacturers and other suppliers. At March 31, 2011, fixed purchase commitments for
inventory amounted to $165.3 million, which are expected to be fulfilled by September 2011. We also had other
commitments of $49.8 million for consulting services, marketing arrangements, advertising, outsourced customer
services and other services. Although open purchase commitments are considered enforceable and legally binding,
the terms generally allow us the option to reschedule and adjust our requirements based on business needs prior to
delivery of goods or performance of services.
Income Taxes Payable
At March 31, 2011, we had $132.0 million in non-current income taxes payable, including interest and
penalties, related to our income tax liability for recognized uncertain tax positions. 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. Although we have adequately provided for uncertain tax positions, the provisions on these
positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. We
do not anticipate that this liability will change substantially within the next 12 months.
The Company files Swiss and foreign tax returns. For all these tax returns, the Company is generally not
subject to tax examinations for years prior to 1999. 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. At this time it is not possible to estimate the potential impact that the
examination may have on income tax expense. The Company is also under examination in other tax jurisdictions.
Although timing of the resolution or closure on audits is highly uncertain, the Company does not believe it is
reasonably possible that the unrecognized tax benefits would materially change in the next twelve months.
Obligation for Management Deferred Compensation
At March 31, 2011, we had $13.1 million in liabilities related to a management deferred compensation plan
offered by one of the Company’s subsidiaries. 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. See Note 12 —
Employee Benefit Plans for more information.