What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-07-23 compared with 2020-01-23 · 131 added, 300 removed, 336 unchanged (56% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

Cost of goods sold

5 unchanged sentences

Amortization of intangible assets and acquisition-related costs

Change in fair value of contingent consideration for business acquisition

Restructuring charges (credits), net

2 unchanged sentences

Interest income

Other income (expense), net

Other income, net

Income before income taxes

7 unchanged sentences

Three Months Ended

Nine Months Ended

Other comprehensive income (loss):

Currency translation gain (loss), net of taxes

Reclassification of currency translation gain included in other income (expense), net

Currency translation loss, net of taxes

Defined benefit plans:

Net gain (loss) and prior service costs, net of taxes

Amortization included in other income (expense), net

Amortization included in other income, net

Hedging gain (loss):

Deferred hedging gain (loss), net of taxes

Reclassification of hedging (gain) loss included in cost of goods sold

Total other comprehensive loss

Deferred hedging loss, net of taxes

Reclassification of hedging loss included in cost of goods sold

Total other comprehensive income (loss)

Total comprehensive income

3 unchanged sentences

(In thousands, except per share amounts)

December 31, 2019

June 30, 2020

March 31, 2020

19 unchanged sentences

Registered shares, CHF 0.25 par value:

Issued shares — 173,106 at December 31 and March 31, 2019

Additional shares that may be issued out of conditional capital — 50,000 at December 31 and March 31, 2019

Additional shares that may be issued out of authorized capital — 34,621 at December 31 and March 31, 2019

Issued shares — 173,106 at June 30 and March 31, 2020

Additional shares that may be issued out of conditional capitals — 50,000 at June 30 and March 31, 2020

Additional shares that may be issued out of authorized capitals — 34,621 at June 30 and March 31, 2020

Additional paid-in capital

Shares in treasury, at cost — 5,901 at December 31, 2019 and 7,244 at March 31, 2019

Shares in treasury, at cost — 4,689 at June 30, 2020 and 6,210 at March 31, 2020

Retained earnings

6 unchanged sentences

(In thousands)

Nine Months Ended

Three Months Ended

Cash flows from operating activities:

1 unchanged sentence

Amortization of intangible assets

Loss (gain) on investments

Gain on investments

Share-based compensation expense

Deferred income taxes

Change in fair value of contingent consideration for business acquisition

Changes in assets and liabilities, net of acquisitions:

6 unchanged sentences

Investment in privately held companies

Acquisitions, net of cash acquired

Proceeds from the sale of property, plant and equipment

Purchases of short-term investments

Purchases of trading investments

2 unchanged sentences

Cash flows from financing activities:

Payment of cash dividends

Purchases of registered shares

13 unchanged sentences

(In thousands)

Three Months Ended December 31, 2018

Additional Paid-in Capital

4 unchanged sentences

Retained Earnings

September 30, 2018

Total comprehensive income

Purchases of registered shares

Sales of shares upon exercise of stock options and purchase rights

Issuance of shares upon vesting of restricted stock units

Share-based compensation

December 31, 2018

Nine Months Ended December 31, 2018

Additional Paid-in Capital

Accumulated Other Comprehensive Loss

Total Shareholders’ Equity

Registered Shares

Treasury Shares

Retained Earnings

March 31, 2019

Cumulative effect of adoption of new accounting standard

Total comprehensive income

3 unchanged sentences

Share-based compensation

Cash dividends ($0.69 per share)

December 31, 2018

Three Months Ended December 31, 2019

Additional Paid-in Capital

Accumulated Other Comprehensive Loss

Total Shareholders’ Equity

Registered Shares

Treasury Shares

Retained Earnings

September 30, 2019

Total comprehensive income

Sales of shares upon exercise of stock options and purchase rights

Issuance of shares upon vesting of restricted stock units

Share-based compensation

December 31, 2019

Nine Months Ended December 31, 2019

June 30, 2019

Additional Paid-in Capital

6 unchanged sentences

Total comprehensive income

Purchases of registered shares

Cumulative effect of adoption of new accounting standard (Note 1)

Sales of shares upon exercise of stock options and purchase rights

1 unchanged sentence

Share-based compensation

Cash dividends ($0.74 per share)

December 31, 2019

June 30, 2020

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

Note 1 — The Company and Summary of Significant Accounting Policies and Estimates

Logitech International S.A, together with its consolidated subsidiaries, ("Logitech" or the "Company") designs, manufactures and markets products that help connect people to digital and cloud experiences.

More than 35 years ago, Logitech created products to improve experiences around the personal PC platform, and today it is a multi-brand, multi-category company designing products that enable better experiences consuming, sharing and creating any digital content such as music, gaming, video and computing, whether it is on a computer, mobile device or in the cloud.

Logitech International S.A, together with its consolidated subsidiaries, (Logitech or the Company) designs, manufactures and markets products that have an everyday place in people's lives, connecting them to the digital experiences they care about.

More than 35 years ago, Logitech created products to improve experiences around the personal PC platform, and today it is a multi-brand, multi-category company designing products that enable better experiences consuming, sharing and creating any digital content such as computing, gaming, video and music, whether it is on a computer, mobile device or in the cloud.

The Company sells its products to a broad network of domestic and international customers, including direct sales to retailers and e-tailers and indirect sales through distributors.

5 unchanged sentences

are listed on both the SIX Swiss Exchange under the trading symbol LOGN and the Nasdaq Global Select Market under the trading symbol LOGI.

Business Acquisition

On October 31, 2019, the Company acquired General Workings, Inc.

See "Note 2 - Business Acquisition" for more information.

Basis of Presentation

4 unchanged sentences

In the opinion of management, these condensed consolidated financial statements include all adjustments, consisting of only normal and recurring adjustments, necessary and in all material aspects, for a fair statement of the results of operations, comprehensive income, financial position, cash flows and changes in shareholders' equity for the periods presented.

Operating results for the three and nine months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2020, or any future periods.

Operating results for the three months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2021, or any future periods.

Changes in Significant Accounting Policies

Other than the recent accounting pronouncements adopted and discussed below under Recent Accounting Pronouncements Adopted and Summary of Significant Accounting Policies , there have been no changes in the Company’s significant accounting policies during the nine months ended December 31, 2019 compared with the significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended March 31, 2019 .

Other than the recent accounting pronouncements adopted and discussed below under Recent Accounting Pronouncements Adopted and Summary of Significant Accounting Policies , there have been no material changes in the Company’s significant accounting policies during the three months ended June 30, 2020 compared with the significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended March 31, 2020 .

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements.

Management bases its estimates on historical experience and various other assumptions believed to be reasonable.

Significant estimates and assumptions made by management involve the fair value of goodwill, intangible assets acquired from business acquisitions, contingent consideration for a business acquisition and periodic reassessment of its fair value, valuation of operating right-of-use assets, warranty liabilities, accruals for customer incentives, cooperative marketing, and pricing programs (Customer Programs) and related breakage when appropriate, accrued sales return liability, allowance for doubtful accounts, inventory valuation, share-based compensation expense, uncertain tax positions, and valuation allowances for deferred tax assets.

Significant estimates and assumptions made by management involve fair value of goodwill and intangible assets acquired from business acquisitions, valuation of right-of-use assets, valuation of investment in privately held companies classified under Level 3 of the fair value hierarchy, pensions obligations, warranty liabilities, accruals for customer incentives, cooperative marketing, and pricing programs (Customer Programs) and related breakage when appropriate, accrued sales return liability, inventory valuation, share-based compensation expense, uncertain tax positions, and valuation allowances for deferred tax assets.

Although these estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results could differ materially from these estimates.

Risks and Uncertainties

We are subject to risks and uncertainties as a result of the novel coronavirus (COVID-19) and the measures taken by many countries in response have contributed to a general slowdown in the global economy and adversely affected, and could in the future continue to adversely affect, the Company's business and operations.

Capital markets and economies worldwide have also been negatively impacted by COVID-19 and it is still unclear how lasting and deep the economic impacts will be.

During the three months ended June 30, 2020, as well as in the fourth quarter of fiscal year 2020, the COVID-19 pandemic had mixed effects on the Company’s results of operations, and it may continue to have mixed or adverse effects.

While there was high demand and consumption of certain of our products that led to increased sales and operating income during the fourth quarter of fiscal year 2020 and the first quarter of fiscal year 2021, at the same time the Company experienced disruptions to supply chain and logistics services, inventory constraints and increased logistics costs.

The ongoing and full extent of the impact of the COVID-19 pandemic on the Company's business and operational and financial performance and condition is uncertain and will depend on many factors outside the Company's control, including but not limited to the timing, extent, duration and effects of the virus and any of its mutations, the development and availability of effective treatments and vaccines, the imposition of effective public safety and other protective measures, the impact of COVID-19 on the global economy and demand for the Company's products and services.

Should the COVID-19 pandemic or global economic slowdown not improve or worsen, or if the Company's attempt to mitigate its impact on its operations and costs is not successful, the Company's business, results of operations, financial condition and prospects may be adversely affected.

Recent Accounting Pronouncements Adopted

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2016-02, "Leases (Topic 842)" (ASU 2016-02 or Topic 842), which requires a lessee to recognize right-of-use (ROU) assets and lease liabilities arising from operating and financing leases with terms longer than 12 months on the consolidated balance sheets and to disclose key information about leasing arrangements.

The Company adopted the new standard effective April 1, 2019 and recorded an ROU asset and lease liability related to its operating leases.

The Company used the modified retrospective approach with the effective date as the date of initial application.

Accordingly, the Company applied the new lease standard prospectively to leases existing or commencing on or after April 1, 2019.

Prior period balances and disclosures have not been restated.

The Company elected the package of transitional practical expedients, which among other provisions, allows the Company to not reassess under the new standard the Company's prior conclusions about lease identification, lease classification and initial direct cost, for any existing leases on the adoption date.

In addition, for operating leases, the Company elected to account for lease and non-lease components as a single lease component.

The Company also made an accounting policy election to not recognize lease liabilities and ROU assets on its condensed consolidated balance sheet for leases that, at the lease commencement date, have a lease term of 12 months or less.

Adoption of the standard resulted in the recognition of $ 31.3 million of ROU assets and $ 37.4 million of lease liabilities related to the Company's leases on its condensed consolidated balance sheet on April 1, 2019.

The difference of $ 6.1 million represented deferred rent for leases that existed as of the date of adoption, which decreased the opening balance of ROU assets.

In addition, the prepaid rent balance as of the date of adoption increased the opening balance of ROU assets.

The deferred rent and prepaid rent balances were derecognized as of the date of adoption and no adjustment was made to retained earnings.

The adoption of the standard did not have an impact on the Company's condensed consolidated statement of operations, comprehensive income, changes in shareholders' equity or cash flows.

In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" (ASU 2018-15), which clarifies that implementation costs incurred by customers in cloud computing arrangements are deferred if they would be capitalized by customers in software licensing arrangements under the internal-use software guidance.

ASU 2018-15 is effective for annual and interim periods in fiscal years beginning after December 15, 2019, with early adoption permitted.

Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively.

The Company adopted this standard effective April 1, 2019 using a prospective adoption method.

The adoption of ASU 2018-15 did not have a material impact on the Company's condensed consolidated financial statements.

Recent Accounting Pronouncements to be Adopted

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326):

1 unchanged sentence

The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

Early adoption is permitted.

The Company does not expect the adoption of ASU 2016-13 will have a material impact on its consolidated financial statements and plans to adopt the standard effective April 1, 2020.

The Company adopted this standard effective April 1, 2020, using a modified retrospective approach.

Upon adoption, the Company updated its credit loss models to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost, including accounts receivable.

The cumulative effect adjustment from adoption was not material to the Company's condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements" (ASU 2018-13), which aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing fair value measurement disclosures.

ASU 2018-13 is effective for annual and interim periods in fiscal years beginning after December 15, 2019.

Early adoption is permitted.

Retrospective adoption is required, except for certain disclosures which will be required to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption.

The Company does not expect the adoption of ASU 2018-13 will have a material impact on its consolidated financial statements and plans to adopt the standard effective April 1, 2020.

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements" (ASU 2018-13), which eliminates, adds and modifies certain disclosure requirements for fair value measurements, including eliminating the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and requiring the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.

Some of these disclosure changes must be applied prospectively while others retrospectively depending on requirement.

The Company adopted this standard effective April 1, 2020.

The adoption of ASU 2018-13 did not have a material impact to the Company's condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefits Plans - General (Subtopic 715-20):

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans" (ASU 2018-14), which aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing defined benefit plan disclosures.

ASU 2018-14 is effective for annual periods in fiscal years ending after December 15, 2020.

Retrospective adoption is required and early adoption is permitted.

The Company does not expect the adoption of ASU 2018-14 will have a material impact on its consolidated financial statements and plans to adopt the standard effective April 1, 2020.

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans" (ASU 2018-14), which requires that the Company remove various disclosures that no longer are considered cost-beneficial, namely amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year.

Further, ASU 2018-14 requires disclosure or clarification of the reasons for significant gains or losses related to changes in the benefit obligation for the period.

The Company adopted this standard effective April 1, 2020 using a retrospective approach and the updated disclosures will be included in the Company's Form 10-K for the fiscal year ending March 31, 2021.

The adoption of ASU 2018-14 did not have an impact on the Company's condensed consolidated financial statements.

Recent Accounting Pronouncements To Be Adopted

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740):

4 unchanged sentences

The Company is currently assessing the impact of ASU 2019-12 on its consolidated financial statements and plans to adopt the standard effective April 1, 2021.

Note 2 — Business Acquisitions

On October 31, 2019 (the "Acquisition Date"), the Company acquired all equity interests of General Workings, Inc.

(" Streamlabs ") for a total consideration of $ 105.7 million (as described in the table below), which included a working capital adjustment, plus additional contingent consideration of $ 29.0 million payable in stock only upon the achievement of certain net revenues for the period beginning on January 1, 2020 and ending on June 30, 2020 (the " Streamlabs Acquisition").

Streamlabs is a leading provider of software and tools for professional streamers.

The Streamlabs Acquisition will be complementary to the Company's existing gaming portfolio.

Streamlabs met the definition of a business, and therefore the acquisition is accounted for using the acquisition method.

The fair value of consideration transferred for the Streamlabs Acquisition consists of the following (in thousands):

Purchase price (cash)

Fair value of contingent consideration (earn-out)

Fair value of total consideration transferred

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the Acquisition Date (in thousands):

Estimated Fair Value

Cash and cash equivalents

Intangible assets

Other identifiable liabilities assumed, net

Net identifiable assets acquired

Contingent consideration (earn-out)

Net assets acquired

Goodwill related to the acquisition is primarily attributable to opportunities and economies of scale from combining the operations and technologies of Logitech and Streamlabs, and is not deductible for tax purposes.

The following table summarizes the preliminary estimated fair values and estimated useful lives of the components of identifiable intangible assets acquired as of the Acquisition Date (Dollars in thousands):

Preliminary Fair Value

Estimated Useful Life (years)

Developed technology

Customer relationships

Total identifiable intangible assets acquired

Intangible assets acquired as a result of the Streamlabs Acquisition are being amortized over their estimated useful lives using the straight-line method of amortization, which materially approximates the distribution of the economic value of the identified intangible assets.

Amortization of acquired developed technology of $ 0.6 million during the three months ended December 31, 2019 is included in amortization of intangible assets and purchase accounting effect of inventory in the condensed consolidated statements of operations.

Amortization of the acquired customer relationships and trade name of $ 0.7 million during the three months ended December 31, 2019 is included in amortization of intangible assets and acquisition-related costs in the condensed consolidated statements of operations.

Developed technology relates to the software platform which existing Streamlabs services is provided on.

The economic useful life was determined based on the technology cycle related to developed technology of the software platform, as well as the cash flows anticipated over the forecasted periods.

Customer relationships represent the fair value of future projected revenue that will be derived from sales to existing customers of Streamlabs .

The economic useful life was determined based on historical customer turnover rates and industry benchmarks.

Trade name relates to the “ Streamlabs ” trade name.

The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecasted periods.

The fair value of developed technology was estimated using the excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows.

To reflect the fact that certain other assets contributed to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the developed technology, which were discounted at a rate of 25 % .

The fair value of trade name was estimated using the relief-from-royalty method, an income approach (Level 3), which estimates the cost savings that accrue to the owner of the intangible assets that would otherwise be payable as royalties or license fees on revenues earned through the use of the asset.

A royalty rate is applied to the projected revenues associated with the intangible assets to determine the amount of savings, which is then

discounted to determine the fair value.

Trade name was valued using royalty rate of 5 % and was discounted at a rate of 25 % .

The fair value of customer relationships was estimated primarily using the with and without scenario, a discounted cash flow method (Level 3).

Under this method, the Company calculated the present value of the after-tax cash flows expected to be generated by the business with and without the customer relationships using a discount rate of 20 % .

The without scenario incorporates lost revenue and lost profits over the period necessary to retain the asset.

The Company believes the preliminary fair values of acquired intangible assets recorded above represents their fair values and approximates the amounts a market participant would pay for these intangible assets as of the Acquisition Date.

The fair value of identifiable intangible assets acquired was based on estimates and assumptions made by management at the time of the acquisition.

As additional information becomes available, such as finalization of the estimated fair value of the tangible assets acquired and liabilities assumed, and working capital adjustments that may affect the total consideration transferred, the Company may revise its preliminary estimates of fair values during the remainder of the measurement period (which will not exceed 12 months from the Acquisition Date).

Any such revisions or changes may be material as the Company finalizes the fair values of the tangible and intangible assets acquired and liabilities assumed.

The Company incurred acquisition-related costs for the Streamlabs Acquisition of approximately $ 0.8 million and $ 1.4 million during the three and nine months ended December 31, 2019 , respectively.

The acquisition-related costs are included in amortization of intangible assets and acquisition-related costs in the condensed consolidated statements of operations.

The Company included Streamlabs ' estimated fair value of assets acquired and liabilities assumed in its condensed consolidated financial statements beginning on the Acquisition Date.

The results of operations for Streamlabs subsequent to the Acquisition Date have been included in, but are not material to, the Company's condensed consolidated statements of operations for the three and nine months ended December 31, 2019 .

Pro forma results of operations for the Streamlabs Acquisition have not been presented because they are not material to the condensed consolidated statements of operations for the three and nine months ended December 31, 2019 .

Streamlabs contributed $ 4.1 million to the net sales for the three and nine months ended December 31, 2019 , representing less than one percent of the Company's net sales for each of the respective periods.

On October 31, 2019, the Company also made an immaterial technology acquisition for a total cash consideration of $ 3.6 million , which was accounted for using the acquisition method.

The Company retained 10 % of the total consideration for the purpose of ensuring seller's representations and warranties.

Note 2 — Net Income Per Share

The following table summarizes the computations of basic and diluted net income per share for the three and nine months ended December 31, 2019 and 2018 (in thousands, except per share amounts):

The following table summarizes the computations of basic and diluted net income per share for the three months ended June 30, 2020 and June 30, 2019 (in thousands, except per share amounts):

Three Months Ended

Nine Months Ended

Shares used in net income per share computation:

3 unchanged sentences

Net income per share:

Share equivalents attributable to outstanding stock options, restricted stock units ("RSUs"), performance stock units ("PSUs") and employee share purchase plan (ESPP) rights totaling 1.8 million and 1.3 million for the three months ended December 31, 2019 and 2018, respectively, and 1.8 million and 1.2 million for the nine months ended December 31, 2019 and 2018, respectively, were excluded from the calculation of diluted net income per share because the combined exercise price and average unamortized grant date fair value upon exercise of these options and ESPP rights or vesting of RSUs were greater than the average market price of the Company's shares during the periods presented herein, and therefore their inclusion would have been anti-dilutive.

The majority of performance-based awards were not included because all necessary conditions have not been satisfied by the end of the respective period, and those shares were not issuable if the end of the reporting period was the end of the contingency period.

Share equivalents attributable to outstanding stock options, restricted stock units ("RSUs") and employee share purchase rights (ESPP) totaling 1.4 million and 2.0 million for the three months ended June 30, 2020 and 2019 , respectively, were excluded from the calculation of diluted net income per share because the combined exercise price and average unamortized grant date fair value upon exercise of these options and ESPP or vesting of RSUs were greater than the average market price of the Company's shares during the periods presented herein, and therefore their inclusion would have been anti-dilutive.

Note 3 — Employee Benefit Plans

Employee Share Purchase Plans and Stock Incentive Plans

As of December 31, 2019 , the Company offers the 2006 Employee Share Purchase Plan (Non-U.S.), as amended and restated (2006 ESPP), the 1996 Employee Share Purchase Plan (U.S.), as amended and restated (1996 ESPP), the 2006 Stock Incentive Plan, as amended and restated (2006 Plan), and the 2012 Stock Inducement Equity Plan (2012 Plan).

The following table summarizes the share-based compensation expense and total income tax benefit recognized for share-based awards for the three and nine months ended December 31, 2019 and 2018 (in thousands):

As of June 30, 2020 , the Company offers the 2006 Employee Share Purchase Plan, as amended and restated (Non-U.S.) (2006 ESPP), the 1996 Employee Share Purchase Plan (U.S.), as amended and restated (1996 ESPP), the 2006 Stock Incentive Plan, as amended and restated (2006 Plan), and the 2012 Stock Inducement Equity Plan (2012 Plan).

The following table summarizes the share-based compensation expense and total income tax benefit recognized for share-based awards for the three months ended June 30, 2020 and 2019 (in thousands):

Three Months Ended

Nine Months Ended

Cost of goods sold

6 unchanged sentences

The income tax benefit in the respective period primarily consists of tax benefit related to the share-based compensation expense for the period and direct tax benefit realized, including net excess tax benefits recognized from share-based awards vested or exercised during the period.

As of December 31, 2019 and 2018 , the balance of capitalized share-based compensation included in inventory was $ 0.9 million and $ 0.8 million , respectively.

As of June 30, 2020 and 2019 , the balance of capitalized share-based compensation included in inventory was $ 0.9 million and $ 0.9 million , respectively.

Defined Benefit Plans

2 unchanged sentences

The Company’s practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations.

The costs recorded of $ 2.3 million and $ 2.2 million for the three months ended December 31, 2019 and 2018 , respectively, and $ 7.1 million and $ 6.7 million for the nine months ended December 31, 2019 and 2018 , respectively, were primarily related to service costs.

The costs recorded of $ 2.7 million and $ 2.4 million for the three months ended June 30, 2020 and 2019 , respectively, were primarily related to service costs.

Note 4 — Income Taxes

1 unchanged sentence

Further, a portion of the Company’s income before taxes and the provision for (benefit from) income taxes are generated outside of Switzerland.

The income tax provision for the three months ended December 31, 2019 was $ 14.5 million based on an effective income tax rate of 11.0 % of pre-tax income, compared to an income tax provision of $ 9.3 million based on an effective income tax rate of 7.6 % of pre-tax income for the three months ended December 31, 2018 .

income tax provision for the nine months ended December 31, 2019 was $ 18.4 million based on an effective income tax rate of 7.2 % of pre-tax income, compared to an income tax provision of $ 10.3 million based on an effective income tax rate of 4.6 % of pre-tax income for the nine months ended December 31, 2018 .

On May 19, 2019, the Swiss electorate approved the Federal Act on Tax Reform and AHV Financing ("TRAF"), a major reform to better align the Swiss tax system with international tax standards.

The legislation was subsequently published in the federal register on August 6, 2019 to take effect on January 1, 2020.

As of December 31, 2019, TRAF has not been enacted in all cantons, including the canton of Vaud, as the cantonal legislative procedures are in process.

The Company anticipates TRAF to take effect as of January 1, 2020 when enactment occurs in the canton of Vaud.

The change in the effective income tax rate for the three and nine months ended December 31, 2019 , compared to the same periods ended December 31, 2018 , was primarily due to the mix of income and losses in the various tax jurisdictions in which the Company operates and the transitional income tax impact in Switzerland.

The Company has benefited from a longstanding tax ruling from the canton of Vaud through December 31, 2019.

The transitional income tax impact represents income tax provision at the current full statutory income tax rate of 13.67 % without taking account of other elements of the tax reform yet to be enacted.

Furthermore, there was a discrete tax benefit of $ 1.7 million from adjusting deferred tax assets and liabilities in Switzerland in the nine months ended December 31, 2019.

There were discrete tax benefits of $ 6.0 million and $ 2.7 million from the recognition of net excess tax benefits in the United States and reversal of uncertain tax positions from the expiration of statutes of limitations, respectively, in the nine-month period ended December 31, 2019 , compared with $ 9.5 million and $ 2.3 million , respectively, in the nine-month period ended December 31, 2018 .

As of December 31, 2019 and March 31, 2019 , the total amount of unrecognized tax benefits due to uncertain tax positions was $ 85.0 million and $ 76.5 million , respectively, all of which would affect the effective income tax rate if recognized.

As of December 31, 2019 and March 31, 2019 , the Company had $ 38.2 million and $ 36.4 million , respectively, in non-current income taxes payable including interest and penalties, related to the Company's income tax liability for uncertain tax positions.

The Company recognizes interest and penalties related to unrecognized tax positions in income tax provision.

As of December 31, 2019 and March 31, 2019 , the Company had $ 2.7 million and $ 2.5 million , respectively, of accrued interest and penalties related to uncertain tax positions.

Although the Company has adequately provided for uncertain tax positions, the provisions on these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved.

The canton of Vaud enacted the Federal Act on Tax Reform and AHV Financing ("TRAF"), a major reform to better align the Swiss tax system with international tax standards on March 10, 2020 to take effect as of January 1, 2020.

The longstanding tax ruling from the canton of Vaud was applicable through December 31, 2019.

The income tax provision for the three months ended June 30, 2020 was $ 14.0 million based on an effective income tax rate of 16.3 % of pre-tax income, compared to an income tax provision of $ 6.5 million based on an effective income tax rate of 12.6 % of pre-tax income for the three months ended June 30, 2019 .

The change in the effective income tax rate for the three months ended June 30, 2020 , compared to the same period ended June 30, 2019 , was primarily due to the mix of income and losses in the various tax jurisdictions which the Company operates.

The Swiss income tax provision in each period represents the income tax provision at the full statutory income tax rate of 13.63 % .

In the three months ended June 30, 2019 when TRAF was yet to be enacted at the federal and cantonal levels, the transition income tax provision was quantified at the full statutory income tax rate of 13.63 % because at the time the canton of Vaud permitted the application of the longstanding tax ruling only through March 31, 2019.

There were discrete tax benefits of $ 5.0 million and $ 1.0 million from the recognition of excess tax benefits in the United States and reversal of uncertain tax positions from the expiration of statutes of limitations, respectively, in the three-month period ended June 30, 2020 , compared with $ 5.8 million and $ 1.2 million , respectively, in the three-month period ended June 30, 2019 .

As of June 30, 2020 and March 31, 2020 , the total amount of unrecognized tax benefits due to uncertain tax positions was $ 144.2 million and $ 140.8 million , respectively, all of which would affect the effective income tax rate if recognized.

As of June 30, 2020 and March 31, 2020 , the Company had $ 44.3 million and $ 40.8 million , respectively, in non-current income taxes payable including interest and penalties, related to the Company's income tax liability for uncertain tax positions.

The Company recognizes interest and penalties related to unrecognized tax positions in the income tax provision.

As of June 30, 2020 and March 31, 2020 , the Company had $ 4.7 million and $ 4.5 million , respectively, of accrued interest and penalties related to uncertain tax positions in non-current income taxes payable.

Although the Company has adequately provided for uncertain tax positions, the provisions related to these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved.

During fiscal year 2021, the Company continues to review its tax positions and provide for or reverse unrecognized tax benefits as they arise.

3 unchanged sentences

Note 5 — Balance Sheet Components

The following table presents the components of certain balance sheet asset amounts as of December 31 and March 31 , 2019 (in thousands):

December 31, 2019

The following table presents the components of certain balance sheet asset amounts as of June 30 and March 31 , 2020 (in thousands):

June 30, 2020

March 31, 2020

19 unchanged sentences

Investments in privately held companies

(1) Increase of balances was due to the adoption of Topic 842.

Refer to Note 1 to the condensed consolidated financial statements for more information.

The following table presents the components of certain balance sheet liability amounts as of December 31 and March 31, 2019 (in thousands):

December 31, 2019

The following table presents the components of certain balance sheet liability amounts as of June 30 and March 31, 2020 (in thousands):

June 30, 2020

March 31, 2020

5 unchanged sentences

Warranty accrual

Income taxes payable

Contingent consideration

Other current liabilities

2 unchanged sentences

Obligation for deferred compensation plan

Employee benefit plan obligation

Employee benefit plan obligations

Operating lease liability

1 unchanged sentence

Other non-current liabilities

(1) Increase of balances was due to the adoption of Topic 842.

Refer to Note 1 to the condensed consolidated financial statements for more information.

Note 6 — Fair Value Measurements

10 unchanged sentences

The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis, excluding assets related to the Company’s defined benefit pension plans, classified by the level within the fair value hierarchy (in thousands):

December 31, 2019

June 30, 2020

March 31, 2020

5 unchanged sentences

included in other current assets

Contingent consideration for business acquisition included in accrued and other current liabilities (Note 2)

Contingent consideration for business acquisition included in accrued and other current liabilities

Currency exchange derivative liabilities

included in accrued and other current liabilities

The following table summarizes the change in the fair value of the Company's contingent consideration balance during the three months ended June 30, 2020 (in thousands):

Three Months Ended

Beginning of the period

Change in fair value of contingent consideration

End of the period (1)

(1) As of June 30, 2020 , the earn-out period is complete.

The earn-out payment of $ 29.0 million is based on the actual net sales of Streamlabs services and no longer subject to fair value measurement and was accordingly transferred out of Level 3.

The expected earn-out payment is included in the accrued and other current liabilities of the unaudited condensed consolidated balance sheet.

Investment Securities

The marketable securities for the Company's deferred compensation plan were recorded at a fair value of $ 23.8 million and $ 20.4 million as of December 31, 2019 and March 31, 2019 , respectively, based on quoted market prices.

The marketable securities for the Company's deferred compensation plan were recorded at a fair value of $ 22.9 million and $ 20.1 million , as of June 30, 2020 and March 31, 2020 , respectively, based on quoted market prices.

Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy.

Unrealized gains (losses) related to trading securities for the three and nine months ended December 31, 2019 and 2018 were not material and are included in other income (expense), net in the Company's condensed consolidated statements of operations.

Unrealized gains (losses) related to trading securities for the three months ended June 30, 2020 and 2019 were not material and are included in other income, net in the Company's condensed consolidated statements of operations.

Contingent Consideration for Business Acquisition

The contingent consideration for business acquisition arising from the Streamlabs Acquisition (see "Note 2 - Business Acquisition" to the condensed consolidated financial statements for more information) represents the future potential earn-out payments of $ 29.0 million payable in stock only upon the achievement of net revenues for the period beginning on January 1, 2020 and ending on June 30, 2020.

The fair value of the earn-out as of the Acquisition Date was $ 0.04 million which was determined by using a Black-Scholes-Merton option-pricing valuation model that includes significant assumptions and unobservable inputs such as the projected revenues of Streamlabs over the earn-out period and the probability of the earn-out threshold being met.

Actual results that differ from the assumptions used and any changes to the significant assumptions and unobservable inputs used could have a material impact on future results of operations.

Actual payment of contingent consideration in the future could be different from the current fair value of the contingent consideration.

The fair value of the contingent consideration is remeasured at each reporting period based on the inputs on the date of remeasurement.

The fair value of the earn-out was $ 0.04 million as of December 31, 2019 .

On October 31, 2019 (the "Streamlabs Acquisition Date"), the Company acquired all of the equity interests of General Workings, Inc.

("Streamlabs").

The contingent consideration for business acquisition arising from the Streamlabs Acquisition represents the future potential earn-out payments of $ 29.0 million payable in stock only upon the achievement of certain net sales for the period beginning on January 1, 2020 and ending on June 30, 2020.

The fair value of the earn-out as of the Streamlabs Acquisition Date was $ 0.04 million , and increased to $ 23.3 million as of March 31, 2020, which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met and times the value of the earn-out payment, and discounted at

the risk-free rate.

The valuation included significant assumptions and unobservable inputs such as the projected sales of Streamlabs over the earn-out period, the risk-free rate, and the net sales volatility.

The fair value was increased by $ 5.7 million to $ 29.0 million as of June 30, 2020 , based on actual sales.

The stock payout is expected to be $ 29.0 million .

The fair value of the contingent consideration no longer needs to be remeasured at each reporting period, as the earn-out period has been completed.

Equity Method Investments

The Company has certain non-marketable investments included in other assets in the Company's condensed consolidated balance sheets that are accounted for under the equity method of accounting, with a carrying value of $ 7.0 million and $ 6.6 million as of December 31, 2019 and March 31, 2019 , respectively.

The Company has certain non-marketable investments included in other assets that are accounted for under the equity method of accounting, with a carrying value of $ 42.3 million and $ 42.1 million as of June 30, 2020 and March 31, 2020 , respectively.

Assets Measured at Fair Value on a Nonrecurring Basis

3 unchanged sentences

The carrying value is also adjusted for observable price changes with a same or similar security from the same issuer.

The amount of these investments included in other assets as of December 31, 2019 and March 31, 2019 was $ 9.5 million .

There was no impairment of these assets during the three and nine months ended December 31, 2019 or 2018 .

The amount of these investments included in other assets as of June 30, 2020 and March 31, 2020 was $ 3.9 million .

There was no impairment of these assets during the three months ended June 30, 2020 or 2019 .

Non-Financial Assets.

The Company’s non-financial assets, such as intangible assets and property, plant and equipment, are recorded at fair value only upon initial recognition or if an impairment is recognized.

There was no impairment of these assets during the three and nine months ended December 31, 2019 or 2018 .

Goodwill, intangible assets, property, plant and equipment, and notes receivable, are not required to be measured at fair value on a recurring basis.

However, if certain triggering events occur (or tested at least annually for goodwill) such that a non-financial instrument is required to be evaluated for impairment and an impairment is recorded to reduce the non-financial instrument's carrying value to the fair value as a result of such triggering events, the non-financial assets and liabilities are measured at fair value for the period such triggering events occur.

There was no impairment of these assets during the three months ended June 30, 2020 or 2019 .

Note 7 — Derivative Financial Instruments

Under certain agreements with the respective counterparties to the Company’s derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same type with a single net amount payable by one party to the other.

However, the Company presents its derivative assets and derivative liabilities on a gross basis on the condensed consolidated balance sheets as of December 31, 2019 and March 31, 2019 .

The fair value of the Company’s derivative instruments was not material as of December 31, 2019 or March 31, 2019 .

However, the Company presents its derivative assets and derivative liabilities on a gross basis on the condensed consolidated balance sheets as of June 30, 2020 and March 31, 2020 .

The fair value of the Company’s derivative instruments was not material as of June 30, 2020 or March 31, 2020 .

The amount of gain (loss) recognized on derivatives not designated as hedging instruments was not material in all periods presented herein.

The following table presents the amounts of gains (losses) on the Company’s derivative instruments designated as hedging instruments and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income for the three and nine months ended December 31, 2019 and 2018 (in thousands):

The following table presents the amounts of gains (losses) on the Company’s derivative instruments designated as hedging instruments and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income for the three months ended June 30, 2020 and 2019 (in thousands):

Three Months Ended

6 unchanged sentences

Cash flow hedges

Nine Months Ended

Amount of Gain (Loss)

Deferred as a Component of Accumulated

Other Comprehensive Loss

Amount of Loss (Gain)

Reclassified from Accumulated Other Comprehensive Loss to

Costs of Goods Sold

Cash Flow Hedges

The Company enters into cash flow hedge contracts to protect against exchange rate exposure of forecasted inventory purchases.

2 unchanged sentences

Cash flows from such hedges are classified as operating activities in the condensed consolidated statements of cash flows.

Hedging relationships are discontinued when the hedging contract is no longer eligible for hedge accounting, or is sold, terminated or exercised, or when the Company removes hedge designation for the contract.

Hedging relationships are discontinued when hedging contract is no longer eligible for hedge accounting, or is sold, terminated or exercised, or when Company removes hedge designation for the contract.

Gains and losses in the fair value of the effective portion of the discontinued hedges continue to be reported in accumulated other comprehensive loss until the hedged inventory purchases are sold, unless it is probable that the forecasted inventory purchases will not occur by the end of the originally specified time period or within an additional two -month period of time thereafter.

In all periods presented herein, there have been no forecasted inventory purchases that were probable to not occur by the end of the originally specified time period or within an additional two-month period of time thereafter.

The notional amounts of foreign currency exchange forward contracts outstanding related to forecasted inventory purchases were $ 69.5 million as of December 31, 2019 and $ 41.4 million as of March 31, 2019 .

The Company had $ 0.7 million of net losses related to its cash flow hedges included in accumulated other comprehensive loss as of December 31, 2019 which will be reclassified into earnings within the next 12 months.

The notional amounts of foreign currency exchange forward contracts outstanding related to forecasted inventory purchases were $ 93.1 million as of June 30, 2020 and $ 48.0 million as of March 31, 2020 .

The Company had $ 2.9 million of net losses related to its cash flow hedges included in accumulated other comprehensive loss as of June 30, 2020 which will be reclassified into earnings within the next 12 months.

Other Derivatives

2 unchanged sentences

The primary risk managed by using forward and swap contracts is the currency exchange rate risk.

The gains or losses on these contracts are recognized in other income (expense), net in the condensed consolidated statements of operations based on the changes in fair value.

The notional amounts of these contracts outstanding as of December 31, 2019 and March 31, 2019 were $ 71.0 million and $ 50.4 million , respectively.

Open forward and swap contracts outstanding as of December 31, 2019 and March 31, 2019 consisted of contracts in Mexican Pesos, Japanese Yen, Canadian Dollars, Taiwan New Dollars and Australian Dollars to be settled at future dates at pre-determined exchange rates.

The gains or losses on these contracts are recognized in other income, net in the condensed consolidated statements of operations based on the changes in fair value.

The notional amounts of these contracts outstanding as of June 30, 2020 and March 31, 2020 were $ 73.3 million and $ 64.7 million , respectively.

Open forward and swap contracts outstanding as of June 30, 2020 and March 31, 2020 consisted of contracts in Mexican Pesos, Japanese Yen, Canadian Dollars, Taiwan New Dollars and Australian Dollars to be settled at future dates at pre-determined exchange rates.

The fair value of all foreign currency exchange forward and swap contracts is determined based on observable market transactions of spot currency rates and forward rates.

1 unchanged sentence

Note 8 — Goodwill and Other Intangible Assets

The Company conducts its impairment analysis of goodwill annually at December 31 and as necessary, if changes in facts and circumstances indicate that it is more likely than not that the fair value of the Company’s sole reporting unit may be less than its carrying amount.

The Company conducted its annual impairment analysis of goodwill as of December 31, 2019 by performing a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting unit exceeds its carrying amount.

In assessing the qualitative factors, the Company considered the impact of change in industry and competitive environment, growth in the Company's market capitalization and budgeted-to-actual revenue performance for the last twelve months.

The following table summarizes the activities in the Company’s goodwill balance during the nine months ended December 31, 2019 (in thousands):

The Company conducts its impairment analysis of goodwill annually at December 31 and as necessary, if changes in facts and circumstances indicate that it is more likely than not that the fair value of the Company’s reporting unit may be less than its carrying amount.

There have been no events or circumstances during the three months ended June 30, 2020 that have required the Company to perform an interim assessment of goodwill.

The following table summarizes the activities in the Company’s goodwill balance during the three months ended June 30, 2020 (in thousands):

As of March 31, 2020

Acquisitions (1)

Currency translation

As of December 31, 2019

(1) Includes goodwill acquired from the Streamlabs Acquisition and the immaterial technology acquisition in October 2019.

See Note 2 for more information.

As of June 30, 2020

The Company's acquired intangible assets subject to amortization were as follows (in thousands):

December 31, 2019

June 30, 2020

March 31, 2020

7 unchanged sentences

Note 9 — Financing Arrangements

The Company had several uncommitted, unsecured bank lines of credit aggregating $ 78.4 million as of December 31, 2019 .

The Company had several uncommitted, unsecured bank lines of credit aggregating $ 81.9 million as of June 30, 2020 .

There are no financial covenants under these lines of credit with which the Company must comply.

As of December 31, 2019 , the Company had outstanding bank guarantees of $ 17.1 million under these lines of credit.

There was no borrowing outstanding under these lines of credit as of December 31, 2019 or March 31, 2019 .

As of June 30, 2020 , the Company had outstanding bank guarantees of $ 28.5 million under these lines of credit.

There was no borrowing outstanding under these lines of credit as of June 30, 2020 or March 31, 2020 .

Note 10 — Commitments and Contingencies

Product Warranties

Changes in the Company’s warranty liability for the three and nine months ended December 31, 2019 and 2018 were as follows (in thousands):

Changes in the Company’s warranty liability for the three months ended June 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

Nine Months Ended

Beginning of the period

Assumed from business acquisition

Currency translation

3 unchanged sentences

The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees.

As of December 31, 2019 , no amounts have been accrued for these indemnification provisions.

As of June 30, 2020 , no amounts have been accrued for these indemnification provisions.

The Company does 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 its indemnification arrangements.

12 unchanged sentences

Share Repurchase Program

In March 2017, the Company's Board of Directors approved the 2017 share buyback program, which authorizes the Company to use up to $ 250.0 million to purchase up to 17.3 million shares of its own shares.

The Company's share buyback program is expected to remain in effect for a period of three years .

In March 2017, the Company's Board of Directors approved the 2017 share buyback program, which authorized the Company to use up to $ 250.0 million to purchase up to 17.3 million shares of its own shares.

This share buyback program expired in April 2020.

The Company did not repurchase any of its registered shares during the three months ended June 30, 2020.

In May 2020, the Company's Board of Directors approved the 2020 share buyback program, which authorized the Company to use up to $ 250.0 million to purchase up to 17.3 million of its own shares.

The new program will, upon implementation, replace the Company’s prior 2017 share buyback program.

The Company's share buyback program is expected to remain in effect for a period of three years from its implementation.

Shares may be repurchased from time to time on the open market, through block trades or otherwise.

Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors.

As of December 31, 2019 , $ 172.4 million is still available for repurchase under the 2017 buyback program.

During the nine months ended December 31, 2019 , the Company declared and paid cash dividends of CHF 0.73 (USD equivalent of $ 0.74 ) per share, totaling $ 124.2 million on the Company's outstanding shares.

During the nine months ended December 31, 2018 , the Company declared and paid cash dividends of CHF 0.67 (USD equivalent of $ 0.69 ) per share, totaling $ 114.0 million on the Company's outstanding shares.

Any future dividends will be subject to approval of the Company's shareholders.

Accumulated Other Comprehensive Income (Loss)

1 unchanged sentence

Accumulated Other Comprehensive Income (Loss)

Adjustment (1)

Deferred Hedging Losses

1 unchanged sentence

Other comprehensive income (loss)

December 31, 2019

(1) Tax effect was not significant as of December 31 or March 31, 2019 .

June 30, 2020

Note 12 — Segment Information

3 unchanged sentences

These operating performance measures do not include restructuring charges (credits), net, share-based compensation expense, amortization of intangible assets, charges from the purchase accounting effect on inventory, acquisition-related costs or change in fair value of contingent consideration from business acquisition.

Sales by product categories and sales channels, excluding intercompany transactions, for the three and nine months ended December 31, 2019 and 2018 were as follows (in thousands):

Sales by product categories and sales channels, excluding intercompany transactions, for the three months ended June 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

Nine Months Ended

Pointing Devices

5 unchanged sentences

(1) Other category includes products that the Company currently intends to phase out, or has already phased out, because they are no longer strategic to the Company's business.

Sales by geographic region (based on the customers’ locations) for the three and nine months ended December 31, 2019 and 2018 were as follows (in thousands):

Sales by geographic region (based on the customers’ locations) for the three months ended June 30, 2020 and 2019 were as follows (in thousands):

Three Months Ended

Nine Months Ended

Sales are attributed to countries on the basis of the customers’ locations.

The United States and Germany each represented more than 10% of the total consolidated sales for each of the periods presented herein.

China represented more than 10% of the total consolidated sales for the nine months ended December 31, 2019 and 2018.

The United States, Germany, and China each represented more than 10% of the total consolidated sales for each of the periods presented herein.

No other countries represented 10% or more of the Company’s total consolidated sales for the periods presented herein.

Switzerland, the Company’s home domicile, represented 4 % of the Company's total consolidated sales for the three and nine months ended December 31, 2019 , respectively, and represented 3 % of the Company's total consolidated sales for the three and nine months ended December 31, 2018 , respectively.

Two customers of the Company each represented more than 10% of the total consolidated gross sales for each of the periods presented herein.

Switzerland, the Company’s home domicile, represented 2 % of the Company's total consolidated sales for the three months ended June 30, 2020 and represented 3 % of the Company's total consolidated sales for the three months ended June 30, 2019.

Two customers of the Company each represented more than 10% of the total consolidated sales for each of the periods presented herein.

Property, plant and equipment, net by geographic region were as follows (in thousands):

December 31, 2019

June 30, 2020

March 31, 2020

Total property, plant and equipment, net

Property, plant and equipment, net in the United States and China were $ 26.7 million and $ 37.0 million , respectively, as of December 31, 2019 , and $ 29.8 million and $ 36.4 million , respectively, as of March 31, 2019 .

No other countries represented 10% or more of the Company’s total consolidated property, plant and equipment, net as of December 31, 2019 and March 31, 2019 .

Property, plant and equipment, net in Switzerland, the Company’s home domicile, were $ 1.6 million and $ 1.7 million as of December 31, 2019 and March 31, 2019 , respectively.

Note 14 — Restructuring

During the first quarter of fiscal year 2019, the Company implemented a restructuring plan to streamline and realign the Company's overall organizational structure and reallocate resources to support long-term growth opportunities.

In July 2018, the Company's Board of Directors approved additional costs under this restructuring plan, totaling pre-tax charges of approximately $ 10.0 million to $ 15.0 million , of which $ 11.4 million has been recognized cumulatively as of December 31, 2019 .

The total charges consisted of cash severance and other personnel costs and are presented as restructuring charges (credit), net in the condensed consolidated statements of operations, and the accrual balances are presented in accrued and other current liabilities in the condensed consolidated balance sheets.

During the first quarter of fiscal year 2020, the Company had substantially completed this restructuring plan.

The following table summarizes restructuring-related activities during the three and nine months ended December 31, 2019 (in thousands):

Accrual balance at March 31, 2019

Cash payments

Accrual balance at June 30, 2019

Cash payments

Accrual balance at September 30, 2019

Cash payments

Accrual balance at December 31, 2019

Note 15 — Leases

The Company is a lessee in several noncancellable operating leases, primarily real estate facilities for office space and for transportation and office equipment.

The Company accounts for leases in accordance with Topic 842 (see Note 1) and determines if an arrangement is a lease or contains a lease at contract inception.

ROU assets are included in other assets, short-term lease liabilities are included in accrued and other current liabilities, and long-term lease liabilities are included in other non-current liabilities on the Company's unaudited condensed consolidated balance sheet.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

For the Company's operating leases, the Company accounts for the lease and non-lease components as a single lease component.

Lease expense is recognized on a straight-line basis over the lease term.

For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at lease commencement date.

Topic 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, its incremental borrowing rate.

As the rate implicit in the lease is not readily determinable for the Company's operating leases, the Company generally uses an incremental borrowing rate as the discount rate for the lease.

The Company's incremental borrowing rate is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.

Because the Company does not generally borrow in a collateralized basis, it uses its understanding of what its collateralized credit rating would be as an input to deriving an appropriate incremental borrowing rate.

The operating lease right-of-use asset includes any lease payments made and excludes lease incentives.

The Company's lease arrangements comprise of operating leases with various expiration dates through June 30, 2031 .

The lease term for all of the Company’s leases includes the noncancellable period of the lease.

Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into our determination of the duration of the lease arrangement.

The Company's leases do not contain any material residual value guarantees.

For the three and nine months ended December 31, 2019 , the total operating lease costs were $ 3.4 million and $ 10.3 million, respectively, which included short-term lease costs and sublease income.

Total variable lease costs were immaterial during the three and nine months ended December 31, 2019 .

The total operating and variable lease costs were included in cost of goods sold, marketing and selling, research and development, and general and administrative in the Company's unaudited condensed consolidated statement of operations.

As of December 31, 2019 , the weighted-average remaining lease term was 3.9 years , and the weighted-average discount rate was 2.9 % .

For the three and nine months ended December 31, 2019 , cash paid for amounts included in the measurement of operating lease liabilities was $ 3.5 million and $ 9.9 million, respectively, and right-of-use assets obtained in exchange for new operating lease liabilities was $ 0.1 million and $ 5.0 million, respectively.

Future lease payments included in the measurement of lease liabilities as of December 31, 2019 for the following five fiscal years and thereafter are as follows (in thousands):

Operating Lease

Remaining 2020

Total lease payments

Less interest

Present value of lease liabilities

Future minimum lease payments, as defined under the previous lease accounting guidance of ASC Topic 840 under our non-cancelable operating leases as of March 31, 2019 were as follows (in thousands):

Years Ending March 31,

Operating Lease

Total lease payments

Property, plant and equipment, net in the United States and China were $ 24.1 million and $ 41.5 million , respectively, as of June 30, 2020 , and $ 26.5 million and $ 36.6 million , respectively, as of March 31, 2020 .

No other countries represented 10% or more of the Company’s total consolidated property, plant and equipment, net as of June 30, 2020 or March 31, 2020 .

Property, plant and equipment, net in Switzerland, the Company’s home domicile, were $ 2.7 million and $ 2.3 million as of June 30, 2020 and March 31, 2020 , respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements