Plantronics 2007 Annual Report Download - page 61

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part ii
57A R 2 0 0 7
CONTRACTUAL OBLIGATIONS
The following table summarizes the contractual obligations that we were reasonably likely to incur as of
March 31, 2007 and the effect that such obligations are expected to have on our liquidity and cash flows
in future periods.
Payments Due by Period
($ in thousands) Total Fiscal
2008 Fiscal
2009 Fiscal
2010 Fiscal
2011 Fiscal
2012 Thereafter
Operating leases $15,410 $4,344 $3,720 $2,283 $1,149 $ 913 $3,001
Unconditional purchase
obligations 3,011 3,011 — — — — —
Total contractual cash
obligations $18,421 $7,355 $3,720 $2,283 $1,149 $ 913 $3,001
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s discussion and analysis of financial condition and results of operations are based upon
Plantronics’ 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 management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an ongoing basis, we base estimates and judgments on historical
experience and on various other factors that Plantronics’ management believes to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of
assets and liabilities. Management believes the following critical accounting policies, among others, affect
its more significant judgments and estimates used in the preparation of its consolidated financial
statements. Actual results may differ from those estimates under different assumptions or conditions.
We believe our most critical accounting policies and estimates include the following:
• Revenue Recognition
• Allowance for Doubtful Accounts
• Excess and Obsolete Inventory
• Warranty
• Goodwill and Intangibles
• Income Taxes
• Stock-Based Compensation Expense
Revenue Recognition
Revenue from sales of products to customers is recognized when the following criteria have been met:
• Title and risk of ownership are transferred to customers;
• Persuasive evidence of an arrangement exists;
• The price to the buyer is fixed or determinable; and
• Collection is reasonably assured.