LOGITECH INTERNATIONAL SA - Shareholder.com

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Table of Contents In addition, the Company is subject to examination by various taxing authorities. We believe we have adequately provided in the financial statements for additional taxes that we estimate may be required to be paid as a result of such examinations. If the payment ultimately proves to be unnecessary, the reversal of the tax liabilities would result in tax benefits being recognized in the period we determine the liabilities are no longer necessary. If a final tax assessment exceeds our estimate of tax liabilities, an additional charge to expense will result. See Note 14 – Income Taxes in the Notes to the Consolidated Financial Statements for further discussion. Valuation of Long-Lived Assets We review long-lived assets, such as investments, property, plant and equipment, and goodwill and other intangible assets for impairment whenever events indicate that the carrying amount of these assets might not be recoverable. Factors considered important which could require us to review an asset for impairment include the following: • significant underperformance relative to historical or projected future operating results; • significant changes in the manner of use of the assets or the strategy for the Company’s overall business; • significant negative industry or economic trends; • significant decline in the Company’s stock price for a sustained period; and • market capitalization relative to net book value. Recoverability of investments, property, plant and equipment, and other intangible assets is measured by comparing the projected undiscounted cash flows the asset is expected to generate with its carrying amount. If an asset is considered impaired, the impairment to be recognized is measured by the excess of the carrying amount of the asset over its fair value. We evaluate goodwill for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable from our estimated future cash flows. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired, and a second test is performed to measure the amount of impairment loss. While the Company has fully integrated all of its acquired companies, it continues to maintain discrete financial information for 3Dconnexion and accordingly determines impairment for the goodwill acquired with the 3Dconnexion acquisition at the entity level. All other acquired goodwill is evaluated for impairment at a total enterprise level. In determining fair value, we consider various factors including estimates of future market growth and trends, forecasted revenue and costs, expected periods over which our assets will be utilized, and other variables. We calculate the Company’s fair value based on the present value of projected cash flows using a discount rate determined by management to be commensurate to the risk inherent in the Company’s current business model. To date, we have not recognized any impairment of goodwill. Logitech bases its fair value estimates on assumptions it believes to be reasonable, but which are inherently uncertain. Recent Accounting Pronouncements In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority and provides guidance on the derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties. FIN 48 also includes guidance concerning accounting for income tax uncertainties in interim periods and increases the level of 37
Table of Contents disclosures associated with any recorded income tax uncertainties. FIN 48 is effective for fiscal years beginning after December 15, 2006 and is required to be adopted by the Company in the first quarter of fiscal year 2008. The cumulative effects, if any, of applying FIN 48 will be recorded as an adjustment to retained earnings as of the beginning of the period of adoption. We are evaluating the financial statement and disclosure impact of adopting FIN 48. In May 2007, the FASB issued FASB Staff Position FIN 48-1, “Definition of ‘Settlement’ in FASB Interpretation No. 48” (“FSP FIN 48-1”). FSP FIN 48-1 provides guidance on how a company should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. FSP FIN 48-1 is effective upon initial adoption of FIN 48, which we will adopt in the first quarter of fiscal year 2008. In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 affects other accounting pronouncements that require or permit fair value measurements where the FASB has previously concluded that fair value is the relevant measurement attribute. SFAS 157 does not require any new fair value measurements, but may change current practice in some instances. SFAS 157 is effective for fiscal years beginning after November 15, 2007. We will adopt SFAS 157 in the first quarter of fiscal year 2009, and we are evaluating the financial statement and disclosure impact. In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FAS 115” (“SFAS 159”). SFAS 159 allows companies to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. Unrealized gains and losses shall be reported on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS 159 also establishes presentation and disclosure requirements. SFAS 159 is effective for fiscal years beginning after November 15, 2007 and is required to be adopted by the Company in the first quarter of fiscal year 2009. SFAS 159 will be applied prospectively. We are currently determining whether fair value accounting is appropriate for any of our eligible items and cannot estimate the financial statement and disclosure impact which SFAS 159 would have, if any. Results of Operations Year Ended March 31, 2007 Compared with Year Ended March 31, 2006 Net Sales Net sales by channel and product family for fiscal years 2007 and 2006 were as follows (in thousands): 38 2007 2006 Change % Net sales by channel: Retail $ 1,844,395 $ 1,588,033 16 % OEM 222,174 208,682 6 % Total net sales $ 2,066,569 $ 1,796,715 15 % Net sales by product family: Retail – Cordless $ 525,885 $ 448,358 17 % Retail – Corded 332,129 314,695 6 % Retail – Video 313,932 273,340 15 % Retail – Audio 404,069 334,496 21 % Retail – Gaming 145,784 136,944 6 % Retail – Remote Controls 91,739 57,227 60 % Retail – Other 30,857 22,973 34 % OEM 222,174 208,682 6 % Total net sales $ 2,066,569 $ 1,796,715 15 %
Page 1 and 2: LOGITECH INTERNATIONAL SA FORM 20-F
Page 3 and 4: Table of Contents Part I TABLE OF C
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Page 7 and 8: Table of Contents The following tab
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Page 25 and 26: Table of Contents enabling a broad
Page 27 and 28: Table of Contents Audio The Company
Page 29 and 30: Table of Contents Customer Service
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Page 43 and 44: Table of Contents The decrease in n
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Page 49 and 50: Table of Contents During fiscal yea
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Page 55 and 56: Table of Contents SWX Swiss Exchang
Page 57 and 58: Table of Contents D. Selling Shareh
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Page 61 and 62: Table of Contents If the U.S. dolla
Page 63 and 64: Table of Contents (d) Changes in In
Page 65 and 66: Table of Contents ITEM 17. FINANCIA
Page 67 and 68: Table of Contents SIGNATURES The re
Page 69 and 70: Table of Contents REPORT OF THE IND
Page 71 and 72: Table of Contents LOGITECH INTERNAT
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Table of Contents LOGITECH INTERNAT
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Table of Contents Note 17 — Inter
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LOGITECH INTERNATIONAL S.A. LIST OF
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CONSENT OF INDEPENDENT REGISTERED P
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REPORT ON CORPORATE GOVERNANCE Logi
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An additional 40 million shares hav
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The Company has not issued non-voti
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Trustees of the Santa Fe Institute,
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is responsible for leading the tran
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(4) Mr. Okamoto will retire from th
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Compensation Committee The Compensa
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the Chairman and the Chief Executiv
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eight years at Weiser Lock, a divis
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During 2007, stock option grants to
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proceedings that may arise by reaso
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5.7 Additional Fees and Remuneratio
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Shareholders is sent and re-opens o
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Independent Registered Public Accou
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LOGITECH INTERNATIONAL S.A. Consoli
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I, Mark J. Hawkins, certify that: C
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LOGITECH INTERNATIONAL SA - Shareholder.com

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