Netgear 2011 Annual Report Download - page 58

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Table of Contents
Contractual Obligations and Off-Balance Sheet Arrangements
Contractual Obligations
The following table describes our commitments to settle non-cancelable lease and purchase commitments as of December 31, 2011.
We lease office space, cars and equipment under non-cancelable operating leases with various expiration dates through December 2026.
Rent expense was $7.0 million for the year ended December 31, 2011, $6.4 million for the year ended December 31, 2010, and $6.2 million for
the year ended December 31, 2009. The terms of some of the office leases provide for rental payments on a graduated scale. We recognize rent
expense on a straight-line basis over the lease period, and have accrued for rent expense incurred but not paid. The amounts presented are
consistent with contractual terms and are not expected to differ significantly, unless a substantial change in our headcount needs requires us to
exit an office facility early or expand our occupied space.
We enter into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 50% of the orders are
cancelable by giving notice 46 to 60 days prior to the expected shipment date and 25% of orders are cancelable by giving notice 31 to 45 days
prior to the expected shipment date. Orders are not cancelable within 30 days prior to the expected shipment date. At December 31, 2011, we
had $139.4 million in non-cancelable purchase commitments with suppliers. We expect to sell all products for which we have committed
purchases from suppliers.
As of December 31, 2011 and December 31, 2010, we had $18.7 million and $19.8 million, respectively, of total gross unrecognized tax
benefits and related interest. The timing of any payments that could result from these unrecognized tax benefits will depend upon a number of
factors. Accordingly, the timing of payment cannot be estimated. The possible reduction in liabilities for uncertain tax positions in multiple
jurisdictions in the next 12 months is approximately $1.0 million, excluding the interest, penalties and the effect of any related deferred tax assets
or liabilities.
Off-Balance Sheet Arrangements
As of December 31, 2011, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
Recent Accounting Pronouncements
See Note 1, The Company and Summary of Significant Accounting Policies , in Notes to Consolidated Financial Statements in Item 8 of
Part II of this Annual Report on Form 10-
K, for a full description of recent accounting pronouncements, including the expected dates of adoption
and estimated effects on financial condition and results of operations, which are hereby incorporated by reference.
54
Less Than
1 Year
1-3
Years
3-5
Years
More Than
5 Years
Total
(In thousands)
Operating leases
$
6,349
$
9,753
$
7,539
$
6,071
$
29,712
Purchase obligations
$
139,411
$
—
$
—
$
—
$
139,411
$
145,760
$
9,753
$
7,539
$
6,071
$
169,123