Memorex 2011 Annual Report Download - page 36

strategic acquisitions, any amounts associated with organic investment opportunities and any amounts associated with the
repurchase of common stock under the authorization discussed above. We expect that cash and cash equivalents, together
with cash flow from operations and availability of borrowings under our current sources of financing, will provide liquidity
sufficient to meet these needs and for our operations.
Off-Balance Sheet Arrangements
Other than the operating lease commitments discussed in Note 15 to the Consolidated Financial Statements, we are not
using off-balance sheet arrangements, including special purpose entities.
Summary of Contractual Obligations
Payments Due by Period
Total
Less Than
1 Year 1-3 Years 3-5 Years
More Than
5 Years
(In millions)
Operating lease obligations ................................ $ 17.9 $ 7.8 $ 8.7 $1.3 $ 0.1
Purchase obligations(1) ................................... 218.8 211.0 6.2 1.6 —
Litigation settlements ..................................... 18.5 18.5 — — —
Other liabilities(2) ........................................ 39.8 — — — 39.8
Total ............................................... $295.0 $237.3 $14.9 $2.9 $39.9
(1) The majority of the purchase obligations consist of 90-day rolling estimates. In most cases, we provide suppliers with a
three to six month rolling forecast of our demand. The forecasted amounts are generally not binding on us. However, it
may take up to 60 days from the purchase order issuance to receipt, depending on supplier and inbound lead time.
Effective December 8, 2009, we began an agreement with a third party to outsource certain aspects of our information
technology support. While the agreement is cancelable at any time with certain cash penalties, our obligation through
the expected termination date of January 2016 is included above.
(2) Timing of payments for the vast majority of other liabilities cannot be reasonably determined and, as such, have been
included in the “More Than 5 Years” category. This amount includes $17.6 million of reserves for uncertain tax positions
including accrued interest and penalties and the long-term fair value of contingent consideration related to acquisitions
of $9.9 million.
The table above does not include payments for non-contributory defined benefit pension plans. It is our general practice,
at a minimum, to fund amounts sufficient to meet the requirements set forth in applicable benefits laws and local tax laws.
From time to time, we contribute additional amounts, as we deem appropriate. We expect to contribute approximately
$7 million to $10 million to our pension plans in 2012 and have $29.3 million recorded in other liabilities related to pension
plans as of December 31, 2011.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial
Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenue, expenses and related disclosures of contingent assets and liabilities. On an on-going
basis, we evaluate our estimates to ensure they are consistent with historical experience and the various assumptions that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions and could materially impact our results of operations.
We believe the following critical accounting policies are affected by significant judgments and estimates used in the
preparation of our Consolidated Financial Statements:
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