Logitech 2015 Annual Report Download - page 146

Off-Balance Sheet Arrangements
We have 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 us.
Investment Commitments
During 2015, we entered into a limited partnership agreement with a private investment fund
specialized in early-stage start-up consumer hardware electronics companies and committed a capital
contribution of $4.0 million over the life of the fund. As of March 31, 2015, no capital contribution has been
called by the fund.
Other Contingencies
We are subject to an ongoing formal investigation by the SEC’s Enforcement Division, relating
to certain issues including the accounting for Revue inventory valuation reserves that resulted in the
restatement described in the Fiscal Year 2014 Annual Report on Form 10-K, revision to our consolidated
financial statements concerning warranty accruals and amortization of intangible assets presented in
our Amended Annual Report on Form 10-K/A, filed on August 7, 2013, and our transactions with a
distributor for Fiscal Year 2007 through Fiscal Year 2009. We have entered into an agreement with the
SEC to extend the statute of limitations. We are cooperating with the investigation and recently engaged
in discussions to settle the matter with the SEC, including making offers of monetary amounts for a civil
penalty. In accordance with U.S. GAAP, we have made an accrual in our financial statements. We cannot
predict the timing, range of possible loss or final outcome of this matter.
Guarantees
Logitech Europe S.A. guaranteed payments of third-party contract manufacturers’ purchase
obligations. As of March 31, 2015, the maximum amount of this guarantee was $3.8 million, of which $1.7
million of guaranteed purchase obligations were outstanding.
Indemnifications
We indemnify certain of our suppliers and customers for losses arising from matters such as
intellectual property disputes and product 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. As of March 31, 2015, no amounts have been accrued for indemnification
provisions. We do not believe, based on historical experience and information currently available, that it
is probable that any material amounts will be required to be paid under our indemnification arrangements.
We also indemnify our current and former directors and certain of our current and former officers.
Certain costs incurred for providing such indemnification may be recoverable under various insurance
policies. We are unable to reasonably estimate the maximum amount that could be payable under these
arrangements because these exposures are not capped, the obligations are conditional in nature, and the
facts and circumstances involved in any situation that might arise are variable.
Research and Development
For a discussion of our research and development activities, patents and licenses, please refer
to Item 1, Business, in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and
Exchange Commission and posted to the Company’s Investor Relations website.
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Annual Report Fiscal Year 2015