Logitech 2012 Annual Report Download - page 262

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Rent expense was $23.5 million, $19.8 million and $16.3 million for the years ended March 31, 2012, 2011
and 2010. The increase in future minimum annual rentals as of March 31, 2012 compared with $72.6 million as of
March 31, 2011 was due to approximately $35 million related to new facilities for our Americas operations in Northern
California, and approximately $13 million for an expansion of our LifeSize headquarters in Austin, Texas.
In connection with its leased facilities, the Company has recognized a liability for asset retirement obligations
representing the present value of estimated remediation costs to be incurred at lease expiration. The following table
describes changes to the Company’s asset retirement obligation liability for the years ended March 31, 2012 and
2011 (in thousands):
March 31,
2012 2011
Asset retirement obligation, beginning of year......................... $1,636 $1,374
Liabilities incurred............................................ 66 275
Liabilities settled ............................................. (85) (120)
Accretion expense ............................................ 92 71
Revisions ................................................... 218 —
Foreign currency translation .................................... (9) 36
Asset retirement obligation, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,918 $1,636
Product Warranties
Certain of the Company’s products are covered by warranty to be free from defects in material and workmanship
for periods ranging from one year to five years. At the time of sale, the Company accrues a warranty liability for
estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty
obligation. The Company’s estimate of costs to fulfill its warranty obligations is based on historical experience
and expectations of future conditions. When the Company experiences changes in warranty claim activity or costs
associated with fulfilling those claims, the warranty liability is adjusted accordingly. Changes in the Company’s
warranty liability for the years ended March 31, 2012 and 2011 were as follows (in thousands):
March 31,
2012 2011
Warranty liability, beginning of year ................................ $ 4,970 $ 3,002
Provision for warranties issued during the year ..................... 19,280 18,666
Settlements made during the year, net of adjustments ................ (19,066) (16,698)
Warranty liability, end of year...................................... $ 5,184 $ 4,970
Purchase Commitments
At March 31, 2012, the Company had the following outstanding purchase commitments:
March 31, 2012
Inventory purchases ............................................. $140,549
Operating expenses ............................................. 48,886
Capital expenditures ............................................. 19,554
Total purchase commitments ................ $ 208,989
Note 11 — Commitments and Contingencies (Continued)
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