Logitech 2011 Annual Report Download - page 165

ANNUAl REPORT
153
Pension and Post-Employment Obligations
At March 31, 2011, we had $30.2 million in liabilities related to our defined benefit pension plans and non-
retirement post-employment benefit obligations, of which $3.6 million is payable in the next 12 months. As specific
payment dates for these obligations are unknown beyond a 12-month period, 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.
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 and original
design manufacturers to certain component suppliers. These guarantees generally have a term of one year and are
automatically extended for one or more 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 the Company’s guarantees similarly
varies. At March 31, 2011, there were no outstanding guaranteed purchase obligations. The maximum potential
future payments for two of the three guarantee arrangements is limited to $30.0 million in total. The third guarantee
is limited to purchases of specified components from the named suppliers. We do not believe, based on historical
experience and information available as of the date of this report, that it is probable that any amounts will be
required to be paid under these guarantee arrangements.
Logitech International S.A., the parent holding company, has guaranteed certain contingent liabilities of various
subsidiaries related to specific transactions occurring in the normal course of business. The maximum amount of
the guarantees was $54.7 million as of March 31, 2011. As of March 31, 2011, $10.3 million was outstanding under
these guarantees. The parent holding company has also guaranteed the purchases of one of its subsidiaries under
three guarantee arrangements. Two of these guarantees do not specify a maximum amount. The third guarantee is
limited to $7.0 million. As of March 31, 2011, $4.9 million was outstanding under these guarantees.
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,
but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees.
In addition, we have entered into indemnification agreements with our officers and directors, and the bylaws of
our subsidiaries contain similar indemnification obligations to our agents. No amounts have been accrued for
indemnification provisions at March 31, 2011. We do not believe, based on historical experience and information
available as of the date of this report, that it is probable that any amounts will be required to be paid under these
indemnification arrangements.
Letters of Credit
We provide various third parties with irrevocable letters of credit in the normal course of business to secure
our 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, 2011, we had $0.7 million of letters of credit in place, of which $0.1 million was outstanding. These
letters of credit relate primarily to equipment purchases by a subsidiary in China, and expire between April and
December 2011.