What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-05-12 compared with 2020-05-27 · 559 added, 485 removed, 1143 unchanged (48% of the section changed)

5 unchanged sentences

Based on this evaluation, the CEO and CFO concluded that, as of the end of the period covered by this Annual Report, the Company’s disclosure controls and procedures were effective at a reasonable assurance level.

The Company acquired Streamlabs on October 31, 2019.

Management excluded from its evaluation of the effectiveness of its internal control over financial reporting as of March 31, 2020 the acquired entity’s internal control over financial reporting associated with 4% of total assets and less than 1% of total sales included in the consolidated financial statements as of and for the year ended March 31, 2020.

The Company acquired Mevo on February 17, 2021.

Management excluded from its evaluation of the effectiveness of its internal control over financial reporting as of March 31, 2021 the acquired businesses’ internal controls over financial reporting associated with less than 1% of total assets and less than 1% of total sales included in the consolidated financial statements as of and for the year ended March 31, 2021.

Attached as exhibits to this Annual Report are certifications of the CEO and CFO, which are required in accordance with Rule 13a-14 of the Exchange Act.

5 unchanged sentences

The effectiveness of the Company's internal control over financial reporting as of March 31, 2021 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report, which appears in Item 15.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 62

5 unchanged sentences

These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake.

Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management

Logitech International S.A.

| Fiscal 2021 Form 10-K | 58

override of the controls.

The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

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OTHER INFORMATION

On May 27, 2020, Logitech's Board of Directors designated Prakash Arunkundrum, the Company’s Head of Global Operations, as a member of the Company’s Group Management Team and as an executive officer of the Company.

See Item 1 for background and other information about Mr.

Arunkundrum provided in the section titled "Executive Officers of the Registrant."

In connection with Mr.

Arunkundrum becoming a member of Logitech’s Group Management Team, the Company entered into an Employment Agreement with Mr.

Arunkundrum as of May 27, 2020, providing for a nine-month notice period (other than in the case of termination for cause by the Company), during which Mr.

Arunkundrum could continue his employment with the Company and would continue to receive his standard salary and bonus compensation, equity vesting and other benefits during that continued employment period.

The foregoing summary of the Employment Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the Employment Agreement with Mr.

Arunkundrum, which will be filed with the Company’s Quarterly Report on Form 10-Q for the period ending June 30, 2020.

Arunkundrum will also continue to be entitled to participate in the compensation and benefit programs generally available to Logitech’s executive officers in the United States.

Logitech International S.A.

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Other information required by this Item may be found in the definitive Proxy Statement for the 2021 Annual Meeting of Shareholders and is incorporated herein by reference.

The definitive Proxy Statement will be filed with the Commission within 120 days after our fiscal year end of March 31, 2020 (the Proxy Statement).

The Company's code of ethics policy entitled, "Logitech Code of Conduct" covers members of the Company's board of directors, the principal executive officer, principal financial and accounting officer and other executive officers as well as all other employees.

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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Annual Report on Form 10-K:

(a) The following documents are filed as part of this Annual Report on Form 10-K:

Financial Statements and Supplementary Data

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Notes to Consolidated Financial Statements

Supplementary Data:

Unaudited Quarterly Financial Data

Financial Statement Schedule

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Incorporated by Reference

Agreement and Plan of Merger, dated as of November 10, 2009, as amended by the First Amendment to Agreement and Plan of Merger, entered into as of November 16, 2009, both by and among Logitech Inc., Agora Acquisition Corporation, Lifesize Communications, Inc., Shareholder Representative Services LLC, as stockholder representative, and U.S.

Bank National Association, as escrow agent.

Securities Purchase Agreement, dated as of April 12, 2016, by and among Logitech Europe S.A., JayBird, LLC, the unitholders of JayBird, LLC, and Judd Armstrong (as the sellers' representative)

Asset Purchase Agreement, dated as of July 10, 2017, by and between AG Acquisition Corporation and Logitech Europe S.A.

Amendment No.

1 to Asset Purchase Agreement, dated as of August 11, 2017, by and between AG Acquisition Corporation and Logitech Europe S.A.

Exhibit Form File No.

Filing Date Exhibit No.

2.1 *** Stock Purchase Agreement , dated as of July 30, 2018, by and among Blue Microphones Holding Corporation, Riverside Micro-Cap Fund II, L.P.

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and Logitech Inc.

10-Q 0-29174 10/25/2018 2.1

2.2 *** Agreement and Plan of Merger, dated as of September 26, 2019, by and among Logitech International S.A., Clip Acquisition Sub, Inc., General Workings Inc., and Fortis Advisors LLC

10-Q 0-29174 10/24/2019 2.1

3.1 Articles of Incorporation of Logitech International S.A., as amended

10-Q 0-29174 10/22/2020 3.1

3.2 Organizational Regulations of Logitech International S.A., as amended

10-Q 0-29174 1/21/2021 3.1

4.1 Description of the Registrant's Securities

10.1 ** 1996 Stock Plan, as amended

S-8 333-100854 5/27/2003 4.2

10.2 ** Logitech International S.A.

2006 Stock Incentive Plan, as amended and restated effective September 7, 2016

DEFA14A 0-29174 7/22/2016 App.

10.3 ** Logitech Inc.

Management Deferred Compensation Plan

10-Q 0-29174 11/4/2008 10.1

10.4 ** 1996 Employee Share Purchase Plan (U.S.), as amended and restated

DEFA14A 0-29174 7/23/2013 App.

10.5 ** 2006 Employee Share Purchase Plan (Non-U.S.), as amended and restated

DEFA14A 0-29174 7/23/2013 App.

10.6 ** Form of Director and Officer Indemnification Agreement with Logitech International S.A.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 66

20-F 0-29174 5/21/2003 4.1

10.7 ** Form of Director and Officer Indemnification Agreement with Logitech Inc.

20-F 0-29174 5/21/2003 4.2

10.8 ** Logitech Management Performance Bonus Plan, as amended and restated

Employment agreement dated January 28, 2008 between Logitech Inc.

and Guerrino De Luca

DEFA14A 0-29174 7/23/2013 App.

10.9 ** Representative form of stock option agreement (employees) under the Logitech International S.A.

2006 Stock Incentive Plan

10-Q 0-29174 11/4/2009 10.2

10.10 ** 2012 Stock Inducement Equity Plan

S-8 333-180726 4/13/2012 10.1

10.11 ** Representative form of stock option agreement under the 2012 Stock Inducement Equity Plan

S-8 333-180726 4/13/2012 10.2

10.12 ** Representative form of performance stock option agreement (executives and other employees) under the Logitech International S.A.

2006 Stock Incentive Plan

Representative form of performance restricted stock unit agreement (non-executive employees) under the Logitech International S.A.

2006 Stock Incentive Plan

Representative form of performance share unit agreement (executives and other employees) under the Logitech International S.A.

2006 Stock Incentive Plan for grants starting in April 2013

10-Q 0-29174 2/5/2013 10.2

10.13 ** Employment Agreement between Logitech Inc.

and Bracken Darrell, dated as of December 18, 2015

Employment Agreement between Logitech Inc.

and Vincent Pilette, dated as of December 18, 2015

Series B Preferred Stock Purchase Agreement, dated as of December 28, 2015, by and between Logitech International S.A., Lifesize, Inc., and Investors associated with Redpoint Ventures, Sutter Hill Ventures and Meritech Capital Partners.

Representative form of restricted stock unit agreement (executives and other employees) under the Logitech International S.A.

2006 Stock Incentive Plan

Representative form of performance share unit agreement (executives and other employees) under the Logitech International S.A.

2006 Stock Incentive Plan

10-Q 0-29174 1/22/2016 10.1

Logitech International S.A.

| Fiscal 2021 Form 10-K | 62

10.14 ** Representative form of restricted stock unit agreement (executives and other employees) under the Logitech International S.A.

2006 Stock Incentive Plan

10-K 0-29174 5/26/2017 10.33

10.15 ** Representative form of performance share unit agreement (executives and other employees) under the Logitech International S.A.

2006 Stock Incentive Plan

Logitech International S.A.

| Fiscal 2020 Form 10-K | 67

Representative form of restricted stock unit agreement (non-employee directors) under the Logitech International S.A.

2006 Stock Incentive Plan

10-K 0-29174 5/26/2017 10.34

10.16 ** Letter Agreement, dated as of July 22, 2017, between Logitech Europe S.A.

and Marcel Stolk

10-Q 0-29174 11/1/2017 10.10

10.17 ** Representative form of restricted stock unit agreement (non-executive board members) under the Logitech International S.A.

2006 Stock Incentive Plan

10-Q 0-29174 10/25/2018 10.1

10.18 ** Employment Agreement between Logitech Inc.

and Nathan Olmstead, dated as of July 22, 2019

8-K 0-29174 7/23/2019 10.1

10.19 ** Employment Agreement between Logitech Inc.

and Prakash Arunkundrum, dated as of May 26, 2020

10-Q 0-29174 7/23/2020 10.1

10.20 ** Employment Agreement between Logitech Inc.

and Samantha Harnett, dated as of July 1, 2020

10-Q 0-29174 7/23/2020 10.2

21.1 List of Subsidiaries

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24.1 Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K)

Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.1 Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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XBRL Taxonomy Extension Presentation Linkbase Document

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104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X

_______________________________________________________________________________

Logitech International S.A.

| Fiscal 2021 Form 10-K | 63

* This exhibit is furnished herewith, but not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section.

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** Indicates management compensatory plan, contract or arrangement.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 68

*** Confidential treatment has been requested for certain provisions omitted from this exhibit pursuant to Rule 406 promulgated under the Securities Act of 1933, as amended.

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| Fiscal 2021 Form 10-K | 65

POWER OF ATTORNEY

POWER OF ATTORNEY AND SIGNATURES

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Bracken Darrell and Nate Olmstead, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ WENDY BECKER

Chairperson of the Board

Chairperson of the Board May 12, 2021

/s/ BRACKEN DARRELL

Bracken Darrell

President, Chief Executive Officer and Director

President, Chief Executive Officer and Director May 12, 2021

/s/ NATE OLMSTEAD

Nate Olmstead

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) May 12, 2021

/s/ PATRICK AEBISCHER

Patrick Aebischer

Director May 12, 2021

/s/ EDOUARD BUGNION

Edouard Bugnion

/s/ GUERRINO DE LUCA

Guerrino De Luca

Director May 12, 2021

/s/ Riet Cadonau

Director May 12, 2021

/s/ GUY GECHT

Director May 12, 2021

/s/ DIDIER HIRSCH

Didier Hirsch

Director May 12, 2021

/s/ NEIL HUNT

Director May 12, 2021

/s/ MARJORIE LAO

Director May 12, 2021

/s/ NEELA MONTGOMERY

Neela Montgomery

Director May 12, 2021

/s/ MICHAEL POLK

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Director May 12, 2021

/s/ Deborah Thomas

Deborah Thomas

Director May 12, 2021

Logitech International S.A.

| Fiscal 2021 Form 10-K | 66

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

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Notes to Consolidated Financial Statements

INDEX TO SUPPLEMENTARY DATA

Unaudited Quarterly Financial Data

Logitech International S.A.

5 unchanged sentences

We have audited the accompanying consolidated balance sheets of Logitech International S.A.

and subsidiaries (the Company) as of March 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended March 31, 2020, and the related notes and financial statement schedule (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of March 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended March 31, 2021, and the related notes and financial statement schedule II (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2021 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired General Workings, Inc.

(Streamlabs) on October 31, 2019, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2020, Streamlabs internal control over financial reporting associated with 4% of total assets and less than 1% of total sales included in the consolidated financial statements of the Company as of and for the year ended March 31, 2020.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Streamlabs.

The Company acquired Mevo Inc.

during fiscal year 2021, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2021, Mevo Inc.’s internal control over financial reporting associated with less than 1% of total assets and less than 1% of total sales included in the consolidated financial statements of the Company as of and for the year ended March 31, 2021.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Mevo Inc..

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of April 1, 2019 due to the adoption of the FASB’s Accounting Standards Codification (ASC) Topic 842, Leases, its method of accounting for revenue as of April 1, 2018 due to the adoption of ASC Topic 606, Revenue from Contracts with Customers and its method of accounting for excess tax benefits from share-based payments as of April 1, 2017 due to the adoption of ASC Topic 718, Improvements to Employee Share-Based Payment Accounting .

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of April 1, 2019 due to the adoption of FASB’s Accounting Standards Codification (ASC) Topic 842, Leases.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting included in Item 9A.

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

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Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting

Logitech International S.A.

| Fiscal 2021 Form 10-K | 68

principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

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Assessment of the assumptions underlying the breakage rates for certain Customer Programs

As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded allowances totaling $194,703 thousand as of March 31, 2020 for various cooperative marketing arrangements (marketing development funds and cooperative advertising arrangements), customer incentive and pricing programs, together known as Customer Programs.

The Company estimates the percentage of Customer Programs which will not be claimed or will not be earned by customers, which is commonly referred to as "breakage".

The length of time between when the Company recognizes revenue and when customers make claims under these Customer Programs can be as long as one year.

This requires the Company to use judgment to estimate breakage rates.

We identified the assessment of the assumptions underlying the breakage rates for certain Customer Programs as a critical audit matter.

The determination of the period in which the claims are expected to be submitted by the customers, historical customer claim experience and historical trend of claims submitted after the expected period are considered the significant assumptions around the breakage rates estimate.

The testing of such assumptions required a high degree of auditor judgment due to the inherent uncertainties related to the relevance of historical collection experience to the determination of the breakage rates estimate.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s revenue process, including controls over the significant assumptions identified above.

We assessed the underlying information related to the expected periods that a customer claim will be submitted and the historical claim experience rate for customer incentive and pricing programs and marketing development funds, by analyzing the trend in the customers’ historical claims and accruals information.

In addition, we evaluated the Company’s ability to estimate the breakage rates by comparing the estimated breakage from fiscal 2019 against actual subsequent breakage.

As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded accounts receivable allowances totaling approximately $240.0 million as of March 31, 2021 for various cooperative marketing arrangements (marketing development funds and cooperative advertising arrangements) and customer incentive and pricing programs (collectively, Customer Programs).

The Company estimates the percentage of Customer Programs that will not be claimed or will not be earned by customers, which is commonly referred to as “breakage”.

Breakage reduces the Company’s accruals for certain Customer Programs and it is applied at the time of sale.

The Company uses judgment in assessing the period in which claims are expected to be submitted and the relevance of historical claim experience.

We identified the evaluation of the significant assumptions underlying the breakage rates for certain Customer Programs as a critical audit matter.

The significant assumptions in the breakage rates estimate included:

1) the determination of the period in which the claims are expected to be submitted by the customers, 2) the assessment of the relevance of historical customer claim experience, and 3) the assessment of the relevance of the historical trend of claims submitted after the expected period.

A high degree of auditor judgment was required to evaluate the significant assumptions, due to the inherent uncertainties related to such assumptions as well as recent changes in certain customers’ claim processing behavior in the current economic environment.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 69

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the process to determine the breakage rates estimate.

This included controls related to the Company’s evaluation of the significant assumptions in the breakage rates estimate.

We evaluated the underlying information related to the expected period that a customer claim will be submitted, and assessed the relevance of historical claim experience by analyzing the trend in the customers’ historical claims and accruals information for certain Customer Programs.

We assessed the relevance of the historical trend of claims submitted after the expected period by analyzing the trend of historical claims received after the expected period compared to the total earned amount of each respective period.

In addition, we evaluated the Company’s ability to estimate the breakage rates by comparing the estimated breakage from fiscal 2020 to actual subsequent breakage in fiscal 2021.

Assessment of the accruals for sales returns and certain Customer Programs

As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded accruals of $30,267 thousand for sales returns and $130,220 thousand for Customer Programs as of March 31, 2020.

As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded accrued sales return liabilities of approximately $43.2 million and accrued Customer Program liabilities of approximately $185.4 million as of March 31, 2021.

The Company records these accruals as a reduction of revenue at the time of sale.

The Company estimated these accruals based on historical data or future commitments that are planned and controlled by the Company.

The Company uses judgment in analyzing historical trends, inventories owned by and located at the customers, products sold by the direct customers to end customers or resellers, known product quality issues and other relevant customer and product information, such as stage of product life cycle which are expected to experience unusually high discounting or returns.

The Company uses judgment in analyzing historical trends, inventories owned by and located at the customers, products sold by the direct customers to end customers or resellers, known product quality issues, negotiated terms, and other relevant customer and product information, such as stage of product life-cycle, which are expected to experience unusually high discounting or returns.

We identified the assessment of the accruals for sales returns and certain Customer Programs as a critical audit matter.

Historical experience being predictive of future returns and Customer Programs’ earned amounts is the key assumption used to estimate the accrual for sales returns and Customer Programs.

Historical experience being predictive of future returns and Customer Programs’ earned amounts is the significant assumption used to estimate the accrual for sales returns and Customer Programs.

Due to the inherent uncertainties related to the relevance of the predictive historical experience to the determination of the estimate, the testing required a high degree of auditor judgment.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s accrual process, including controls over the assumption discussed above.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter.

This included controls related to the Company’s assessment of whether historical experience is predictive of future returns and Customer Programs’ earned amounts.

We assessed the historical experience used in estimating the accrual for sales returns and certain Customer Programs using a combination of Company internal historical information of sales, returns and Customer Programs’ earned amounts, third-party contracts, and relevant and reliable third-party channel inventory and sell-through data.

We confirmed selected customer contracts to assess the terms and conditions related to sales returns and certain Customer Programs.

We analyzed channel data trends by product and by region comparing fiscal 2020 quarterly ratios to prior fiscal years.

In addition, we evaluated the Company’s ability to estimate the accruals for sales returns and certain Customer Programs by comparing recorded accruals from fiscal 2019 to actual subsequent returns and Customer Programs’ earned amounts.

Assessment of unrecognized tax benefit resulted from the tax reform in Switzerland

As discussed in Note 7 to the consolidated financial statements, the Company recorded gross unrecognized tax benefits of $71.1 million, excluding associated interest and penalties, for uncertain tax positions taken during fiscal year ended March 31, 2020.

The gross unrecognized tax benefits include an uncertain tax position in Switzerland as a result of the enactment of the Federal Act on Tax Reform and AHV Financing ("TRAF") on March 10, 2020 in the canton of Vaud.

We identified the assessment of the unrecognized tax benefit associated with a tax position taken upon the enactment of TRAF as a critical audit matter.

Complex auditor judgment was required to evaluate the Company’s interpretation and application of TRAF and estimate of the ultimate resolution of the tax position.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company's unrecognized tax benefit determination process, which relates to the interpretation of TRAF and its application in the assessment of the uncertain tax position process.

Since the application of TRAF measures is complex and subject to interpretation, we involved Swiss tax professionals with specialized skills and knowledge, who assisted in:

Evaluating the Company's interpretation of TRAF and its potential impact on the unrecognized tax benefit;

Assessing the Company's determination of its tax positions having more than a 50% likelihood to be sustained upon examination, and

Performing an independent assessment of the Company's uncertain tax position taken upon the enactment of TRAF and comparing the results to the Company's evaluation.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 75

We inspected selected customer contracts to assess the terms and conditions related to sales returns and certain Customer Programs.

We analyzed channel data trends by product and by region comparing fiscal 2021 quarterly channel inventory weeks on-hand and return ratios to prior fiscal years.

In addition, we evaluated the Company’s ability to estimate the accruals for sales returns and certain Customer Programs by comparing recorded accruals from fiscal 2020 to actual subsequent returns and Customer Programs’ earned amounts in fiscal 2021.

We have served as the Company’s auditor since 2014.

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Years Ended March 31,

2021 2020 2019

Net sales $ 5,252,279 $ 2,975,851 $ 2,788,322

Cost of goods sold 2,903,215 1,838,685 1,737,969

Amortization of intangible assets and purchase accounting effect on inventory 13,329 14,785 13,342

Gross profit 2,335,735 1,122,381 1,037,011

Operating expenses:

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Provision for (benefit from) income taxes 200,863 ( 125,397 ) 13,560

Net income $ 947,257 $ 449,723 $ 257,573

Net income per share:

Basic $ 5.62 $ 2.70 $ 1.56

Diluted $ 5.51 $ 2.66 $ 1.52

Weighted average shares used to compute net income per share:

Basic 168,523 166,837 165,609

Diluted 171,775 169,381 168,965

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

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Years Ended March 31,

2021 2020 2019

Net income $ 947,257 $ 449,723 $ 257,573

Other comprehensive income (loss):

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Defined benefit plans:

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

Net loss and prior service costs, net of taxes ( 4,701 ) ( 6,846 ) ( 7,353 )

Reclassification of amortization included in other income (expense), net 1,517 762 ( 181 )

13 unchanged sentences

Accounts receivable, net 612,225 394,743

Inventories 661,116 229,249

Other current assets 135,650 74,920

2 unchanged sentences

Property, plant and equipment, net 114,060 76,119

Goodwill 429,604 400,917

Other intangible assets, net 115,148 126,941

Other assets 324,248 345,019

Total assets $ 4,142,378 $ 2,363,474

Liabilities and Shareholders' Equity

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Registered shares, CHF 0.25 par value:

30,148 30,148

Issued shares— 173,106 at March 31, 2021 and 2020

Additional shares that may be issued out of conditional capitals — 50,000 at March 31, 2021 and March 31, 2020

Additional shares that may be issued out of authorized capital — 34,621 at March 31, 2020 and March 31, 2019

Additional shares that may be issued out of authorized capital — 17,311 at March 31, 2021 and 34,621 at March 31, 2020

Additional paid-in capital 129,519 75,097

Shares in treasury, at cost— 4,799 and 6,210 shares at March 31, 2021 and 2020, respectively

( 279,541 ) ( 185,896 )

Retained earnings 2,490,578 1,690,579

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Years Ended March 31,

2021 2020 2019

Cash flows from operating activities:

Net income $ 947,257 $ 449,723 $ 257,573

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 50,752 42,893 43,471

Amortization of intangible assets 31,818 30,858 24,180

Investment impairment 2,011 — —

Share-based compensation expense 86,019 54,870 50,265

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Gain on sale of investment in a privately held company — ( 39,767 ) —

Other ( 1,784 ) ( 936 ) ( 230 )

Changes in assets and liabilities, net of acquisitions:

Accounts receivable, net ( 201,220 ) ( 15,768 ) ( 58,798 )

Inventories ( 427,501 ) 60,388 ( 21,551 )

Other assets ( 67,708 ) 18,319 ( 8,800 )

Accounts payable 553,960 ( 24,250 ) ( 19,134 )

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Acquisitions, net of cash acquired ( 43,523 ) ( 91,569 ) ( 133,814 )

Proceeds from return of investments

Proceeds from return of strategic investments 2,934 — 124

Purchases of short-term investments — — ( 1,505 )

Sales of short-term investments

Proceeds from sale of property, plant and equipment — 1,037 —

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Purchases of registered shares ( 164,952 ) ( 50,437 ) ( 32,449 )

Payment of contingent consideration for business acquisition

Proceeds from exercises of stock options and purchase rights 43,810 22,241 18,057

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Net cash used in financing activities ( 299,929 ) ( 176,656 ) ( 159,133 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of the period

Cash, cash equivalents and restricted cash at end of the period

Effect of exchange rate changes on cash, cash equivalents ( 3,966 ) ( 7,060 ) ( 10,134 )

Net increase (decrease) in cash, cash equivalents 1,034,761 111,050 ( 37,431 )

Cash, cash equivalents at beginning of the period 715,566 604,516 641,947

Cash, cash equivalents at end of the period $ 1,750,327 $ 715,566 $ 604,516

Supplementary Cash Flow Disclosures:

Non-cash investing activities:

Non-cash investing and financing activities:

Property, plant and equipment purchased during the period and included in period end liability accounts $ 16,819 $ 5,021 $ 3,983

Non-cash contingent consideration for acquisition $ 28,463 $ — $ —

Equity and debt investment in a privately held company $ — $ 42,350 $ —

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(In thousands)

Registered shares

Treasury shares

Registered shares Additional

capital Treasury shares Retained

earnings Accumulated

comprehensive

Shares Amount Shares Amount Total

March 31, 2018 173,106 $ 30,148 $ 47,234 8,527 $ ( 165,686 ) $ 1,232,316 $ ( 93,455 ) $ 1,050,557

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Cash dividends ($ 0.69 per share)

— — — — — ( 113,971 ) — ( 113,971 )

March 31, 2019 173,106 $ 30,148 $ 56,655 7,244 $ ( 169,802 ) $ 1,365,036 $ ( 105,698 ) $ 1,176,339

Cumulative effect of adoption of new accounting standard (Note 2)

Total comprehensive income — — — — — 449,723 ( 14,962 ) 434,761

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Cash dividends ($ 0.74 per share)

— — — — — ( 124,180 ) — ( 124,180 )

March 31, 2020 173,106 $ 30,148 $ 75,097 6,210 $ ( 185,896 ) $ 1,690,579 $ ( 120,660 ) $ 1,489,268

Cumulative effect of adoption of new accounting standard (Note 2) — — — — — ( 553 ) — ( 553 )

Total comprehensive income — — — — — 947,257 11,745 959,002

2 unchanged sentences

Issuance of shares upon vesting of restricted stock units — — ( 53,093 ) ( 1,080 ) 21,011 — — ( 32,082 )

Issuance of shares from contingent consideration — — 18,847 ( 390 ) 9,616 — — 28,463

Share-based compensation — — 85,538 — — — — 85,538

Cash dividends ($ 0.87 per share)

— — — — — ( 146,705 ) — ( 146,705 )

March 31, 2021 173,106 $ 30,148 $ 129,519 4,799 $ ( 279,541 ) $ 2,490,578 $ ( 108,915 ) $ 2,261,789

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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 music, gaming, video and computing, whether it is on a computer, mobile device or in the cloud.

Almost 40 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.

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.

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Business Acquisitions

In October 2019, the Company acquired General Workings, Inc.

During fiscal year 2019, the Company acquired Blue Microphones Holding Corporation.

In February 2021, the Company acquired Mevo Inc.

During fiscal year 2020, the Company acquired General Workings, Inc.

("Streamlabs").

See "Note 3—Business Acquisitions" for more information.

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References to "sales" in the Notes to the consolidated financial statements means net sales, except as otherwise specified.

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| Fiscal 2021 Form 10-K | 76

Note 2— Summary of Significant Accounting Policies

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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 right-of-use assets, valuation of investment in privately held companies classified under Level 3 fair value hierarchy, pension obligations, 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 the fair value of goodwill and intangible assets acquired from business acquisitions, contingent consideration for a business acquisition and periodic reassessment of its fair value, valuation of investment in privately held companies classified under Level 3 fair value hierarchy, pension obligations, accruals for customer incentives, cooperative marketing, and pricing programs ("Customer Programs") and related breakage when appropriate, 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 those estimates.

Risks and Uncertainties

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| Fiscal 2020 Form 10-K | 82

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 adversely affect, the Company's business and operations.

The Company has experienced disruptions and higher costs in manufacturing, supply chain, logistical operations and outsourced services, and shortages of the Company's products in distribution channels.

The full extent of the impact of the COVID-19 pandemic on the Company's business and operational and financial performance and condition is currently 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 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.

We are subject to risks and uncertainties as a result of the novel coronavirus ("COVID-19").

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

During fiscal year 2021, the COVID-19 pandemic had mixed effects on the Company’s results of operations.

While there was high demand for and consumption of certain of our products that led to increased sales and operating income during fiscal year 2021, at the same time the Company experienced disruptions to our supply chain and logistics services, inventory constraints, and increased logistics costs, as it attempted to address the effects of COVID-19.

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, including the sustainability of its effect on trends positive to the Company, 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 availability of vaccines and their global deployment, the development of effective treatments, the imposition of effective public safety and other protective measures and the public's response to such 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.

The functional currency of the Company's operations is primarily the U.S.

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Revenue is recognized when a customer obtains control of promised goods or service in an amount that reflects the transaction price the Company expects to receive in exchange for those goods or services.

Substantially all revenue recognized by the Company relates to the contracts with customers to sell products that allow people to connect through music, gaming, video, computing, and other digital platforms.

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| Fiscal 2021 Form 10-K | 77

Substantially all revenue recognized by the Company relates to the contracts with customers to sell products that allow people to connect through gaming, video, computing, music and other digital platforms.

These products are hardware devices, which may include embedded software that function together, and are considered as one performance obligation.

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The Company’s sales contracts with its customers have a one year or shorter term.

The Company applies the practical expedient of not disclosing the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

The Company elects not disclosing the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

The Company also provides post-contract customer support (“PCS”) for certain products and related software, which includes unspecified software updates and upgrades, bug fixes and maintenance.

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Deferred revenue associated with remaining PCS performance obligation as of March 31, 2021 and March 31, 2020 was not material.

The Company also recognizes revenue from subscription services that provide professional streamers with access to streaming software and tools that represent a single stand-ready performance obligation.

Subscriptions are paid for at the time of or in advance of delivering the services.

The proceeds received in advance from such arrangements is recognized as deferred revenue and then recognized as revenue ratably over the subscription period.

The Company normally requires payment from customers within thirty to sixty days from the invoice date.

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The estimated impact of these programs is recorded as a reduction of transaction price or as an operating expense if the Company receives a distinct good or service from the customer and can reasonably estimate the fair value of that good or service received.

Certain Customer Programs require management to estimate the percentage of those programs which will not be claimed or will not be earned by customers based on historical experience and on the specific terms and conditions of particular programs.

The percentage of these Customer Programs that will not be claimed

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| Fiscal 2020 Form 10-K | 83

or earned is commonly referred to as "breakage".

Customer Programs require management to estimate the percentage of those programs which will not be claimed in the current period or will not be earned by customers, which is commonly referred to as "breakage." Breakage is estimated based on historical claim experience, the period in which customer claims are expected to be submitted, specific terms and conditions with customers and other factors.

The Company accounts for breakage as part of variable consideration, subject to constraint, and records the estimated impact in the same period when revenue is recognized at the expected value.

Significant management judgments and estimates are used to determine the impact of the program and breakage in any accounting period.

Assessing the period in which claims are expected to be submitted and the relevance of the historical claim experience require significant management judgment to estimate the breakage of Customer Programs in any accounting period.

The Company enters into cooperative marketing arrangements with many of its customers and with certain indirect partners, allowing customers to receive a credit equal to a set percentage of their purchases of the Company's products, or a fixed dollar amount for various marketing and incentive programs.

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Cooperative marketing arrangements and customer incentive programs are considered variable consideration, which the Company estimates and records as a reduction to revenue at the time of sale based on negotiated terms, historical experiences, forecasted incentives, anticipated volume of future purchases, and inventory levels in the channel.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 78

The Company has agreements with certain customers that contain terms allowing price protection credits to be issued in the event of a subsequent price reduction.

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Sales taxes and value-added taxes (“VAT”) collected from customers, if applicable, which are remitted to governmental authorities are not included in revenue, and are reflected as a liability on the consolidated balance sheets.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customer (Topic 606)" (ASU 2014-09).

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" (ASU 2014-09).

The Company adopted this standard effective April 1, 2018 using the modified retrospective method applied to those contracts that were not completed as of April 1, 2018.

ASU 2014-09 outlines a new, single,

Logitech International S.A.

| Fiscal 2020 Form 10-K | 84

comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes existing revenue recognition guidance, including industry-specific guidance.

Under the new guidance, recognition of revenue occurs when a customer obtains controls of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The standard requires reporting companies to disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

As a result of the adoption of the new standard, the Company recorded:

a) a reduction to retained earnings as of April 1, 2018, and b) reclassifications of certain allowances for sales returns and certain other Customer Programs from accounts receivable, net to accrued and other current liabilities and other current assets.

The cumulative effect of the changes to the consolidated balance sheet from the adoption of Topic 606 was as follows (in thousands):

March 31, 2018

Effect of Adoption of Topic 606

April 1, 2018

Accounts receivable, net

Other current assets

Accrued and other current liabilities

Retained earnings

The Company recorded a net decrease to retained earnings of $ 10.8 million as of April 1, 2018 due to the cumulative impact of adopting ASU 2014-09.

Shipping and Handling Costs

The Company's shipping and handling costs are included in cost of goods sold in the consolidated statements of operations for all periods presented.

The Company's shipping and handling costs are included in the cost of goods sold in the consolidated statements of operations for all periods presented.

Contract Balances

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The Company records contract liabilities when cash payments are received or due in advance of performance, primarily for implied support and subscriptions.

Contract liabilities are included in accrued and other current liabilities on the consolidated balance sheets.

Contract liabilities are included in accrued and other current liabilities and other non-current liabilities on the consolidated balance sheets.

As of March 31, 2021 and 2020, the Company did not have any material contract liabilities balances or changes.

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The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less.

These costs are included in marketing and selling expenses in the consolidated statements of operations.

These costs are

Logitech International S.A.

| Fiscal 2021 Form 10-K | 79

included in marketing and selling expenses in the consolidated statements of operations.

As of March 31,2021 and March 31, 2020, the Company did not have any material deferred contract costs.

8 unchanged sentences

Cash Equivalents

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| Fiscal 2020 Form 10-K | 85

The Company classifies all highly liquid instruments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents.

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Years Ended March 31,

2021 2020 2019

Customer A 14 % 12 % 13 %

Customer B 13 % 14 % 14 %

The Company had the following customers that individually comprised 10% or more of accounts receivable:

Customer A 12 % 12 %

Customer B 20 % 12 %

Customer C 10 % — %

The Company manages its accounts receivable credit risk through ongoing credit evaluation of its customers' financial conditions.

The Company generally does not require collateral from its customers.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 80

Allowances for Doubtful Accounts

Allowances for doubtful accounts are maintained for estimated losses resulting from the Company's customers' inability to make required payments.

The allowances are based on the Company's regular assessment of the credit-worthiness and financial condition of specific customers, as well as its historical experience with bad debts and customer deductions, receivables aging, current economic trends, geographic or country-specific risks and the financial condition of its distribution channels.

Allowances for doubtful accounts are maintained for expected credit losses resulting from the Company's customers' inability to make required payments.

The allowances are based on the Company's regular assessment of various factors, including the credit-worthiness and financial condition of specific customers, historical experience with bad debts and customer deductions, receivables aging, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers.

Inventories are stated at the lower of cost and net realizable value.

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Such liability is included in accrued and other current liabilities on the consolidated balance sheets.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 86

Property, Plant and Equipment

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Depreciation expense is recognized using the straight-line method.

Plant and buildings are depreciated over estimated useful lives of twenty-five years , equipment over useful lives from three to five years, internal-use software over useful lives from three to ten years, tooling over useful lives from six months to one year , and leasehold improvements over the lesser the term of the lease or ten years.

When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are relieved from the accounts and the net gain or loss is included in operating expenses.

Plant and buildings are depreciated over estimated useful lives of twenty-five years , equipment over useful lives from three to five years , internal-use software over useful lives from three to ten years , tooling over useful lives from six months to one year , and leasehold improvements over the lesser of the term of the lease or ten years .

When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are relieved from the accounts and the net gain or loss is included in cost of goods sold or operating expenses, depending on the nature of the property and equipment.

In February 2016, the FASB issued ASU 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 a 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 determines if an arrangement is a lease or contains a lease at contract inception.

Operating lease 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 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.

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| Fiscal 2021 Form 10-K | 81

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

As most of the leases do not provide an implicit rate, the Company generally uses its 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.

Intangible Assets

The Company's intangible assets principally include goodwill, acquired technology, trademarks, and customer relationships and contracts.

Intangible assets with finite lives, which include acquired technology, trademarks, customer relationships and contracts, and others are carried at cost and amortized using the straight-line method over their useful lives ranging from two to ten years.

Intangible assets with indefinite lives, which include only goodwill, are recorded at cost and evaluated at least annually for impairment.

Intangible assets with indefinite lives, which include only goodwill and i n-process research and development ("IPR&D") , are recorded at cost and evaluated at least annually for impairment.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, such as property and equipment, and finite-lived intangible assets, for impairment whenever events indicate that the carrying amounts might not be recoverable.

Recoverability of property and equipment, and other finite-lived intangible asset is measured by comparing the projected undiscounted net cash flows associated with those assets to their carrying values.

Recoverability of property and equipment and finite-lived intangible assets is measured by comparing the projected undiscounted net cash flows associated with those assets to their carrying values.

If an asset is considered impaired, it is written down to its fair value, which is determined based on the asset's projected discounted cash flows or appraised value, depending on the nature of the asset.

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In reviewing goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (greater than 50%) that the estimated fair value of a reporting unit is less than its carrying amount.

For the year ended March 31, 2020, the Company elected to perform a qualitative assessment and determined that an impairment was not more likely than not and no further analysis was required.

The Company also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test.

The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether the Company chooses to perform the qualitative assessment or proceeds directly to the quantitative impairment test.

The Company operates as one reporting unit.

For the year ended March 31, 2021, the Company elected to perform a qualitative assessment and determined that an impairment was not more likely than not and no further analysis was required.

The Company provides for income taxes using the asset and liability method, which requires that deferred tax assets and liabilities be recognized for the expected future tax consequences of temporary differences resulting from differing treatment of items for tax and financial reporting purposes, and for operating losses and tax credit carryforwards.

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The Company records a valuation allowance to reduce deferred tax assets to amounts management believes are more likely than not to be realized.

The Company's assessment of uncertain tax positions requires that management makes estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters.

In the event that uncertain tax positions are resolved for amounts different than the Company's estimates, or the

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| Fiscal 2021 Form 10-K | 82

In the event that uncertain tax positions are resolved for amounts different than the Company's estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of the related assets and liabilities in the period in which such events occur.

related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of the related assets and liabilities in the period in which such events occur.

Such adjustments may have a material impact on the Company's income tax provision and its results of operations.

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Earnings, gains and losses on trading investments are included in other income (expense), net in the consolidated statements of operations.

The Company also holds non-marketable investments in equity and other securities that are accounted under the equity method, which are classified as other assets.

The Company also holds non-marketable investments in equity and other securities that are accounted for under the equity method, which are classified as other assets.

In addition, the Company has certain investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment.

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The grant date fair value of RSUs which vest upon meeting certain market conditions is estimated using the Monte-Carlo simulation method.

The grant date fair value of time-based and performance-based RSUs is calculated based on the market price on the date of grant, reduced by estimated dividends yield prior to vesting.

The grant date fair value of time-based and performance-based RSUs is calculated based on the market price on the date of grant, reduced by estimated dividend yield prior to vesting.

With respect to awards with service conditions only, compensation expense is recognized ratably over the vesting period of the awards.

For performance-based RSUs, the Company recognizes the estimated expense using a graded-vesting method over requisite service periods of one to three years when the performance condition is determined to be probable.

For performance-based RSUs, the Company recognizes the estimated expense using a graded-vesting method over requisite service periods of three years when the performance condition is determined to be probable.

The performance period and the service period of the market-based grants of the Company are both approximately three years and the estimated expense is recognized ratably over the service period.

In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation (Topic 718)":

Improvements to Employee Share-Based Payment Accounting" (ASU 2016-09).

The Company adopted this standard effective April 1, 2017 using modified retrospective approach.

Under the new standard, the Company accounts for forfeitures as they occur.

The change in accounting for forfeitures resulted in a cumulative-effect adjustment to decrease retained earnings as of April 1, 2017 by $ 3.3 million .

The Company further recognized a

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| Fiscal 2020 Form 10-K | 88

cumulative-effect adjustment to increase retained earnings as of April 1, 2017 by $ 57.2 million upon adoption of the new guidance to account for gross excess tax benefits of $ 75.2 million that were previously not recognized because the related tax deduction had not reduced current income taxes, offset by a valuation allowance of $ 18.0 million to reduce the deferred tax assets to amounts that are more likely than not to be realized.

Product Warranty Accrual

All of the Company's products are covered by warranty to be free from defects in material and workmanship for periods ranging from one year to five years .

All of the Company's products are covered by warranty to be free from defects in material and workmanship for periods ranging from one year to three years .

The warranty period varies by product and by region.

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The Company estimates cost of product warranties at the time the related revenue is recognized based on historical warranty claim rates, historical costs, and knowledge of specific product failures that are outside of the Company's typical experience.

The Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty obligation.

The Company accrues a warranty liability for

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| Fiscal 2021 Form 10-K | 83

estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty obligation.

Each quarter, the Company reevaluates estimates to assess the adequacy of recorded warranty liabilities.

17 unchanged sentences

Gains or losses from changes in the fair value of forward contracts that offset translation losses or gains on foreign currency receivables or payables are recognized immediately and included in other income (expense), net in the consolidated statements of operations.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 89

Restructuring Charges

The Company's restructuring charges consist of employee severance, one-time termination benefits and ongoing benefits related to the reduction of its workforce, lease exit costs, and other costs.

The Company's restructuring charges consist of employee severance, one-time termination benefits and ongoing benefits related to the reduction of its workforce, and other costs.

Liabilities for costs associated with a restructuring activity are measured at fair value and are recognized when the liability is incurred, as opposed to when management commits to a restructuring plan.

1 unchanged sentence

Ongoing benefits are expensed when restructuring activities are probable and the benefit amounts are estimable.

Costs to terminate a lease before the end of its term are recognized when the property is vacated.

Other costs primarily consist of legal, consulting, and other costs related to employee terminations are expensed when incurred.

1 unchanged sentence

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 a right-of-use (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 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 consolidated balance sheet on April 1, 2019.

The difference of $ 6.1 million represented deferred and prepaid rent for leases that existed and reclassified to ROU assets as of the date of adoption.

The adoption of the standard did not have an impact on the Company's 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 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 $ 0.6 million to the Company's consolidated financial statements.

Logitech International S.A.

1 unchanged sentence

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 on the Company's 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.

The adoption of this guidance modified the disclosures included in "Note 5—Employee Benefit Plans" but did not have a material impact on the Company's consolidated financial statements.

Recent Accounting Pronouncements To Be Adopted

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

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Early adoption is permitted.

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.

The Company does not expect the adoption of ASU 2019-12 will have a material impact on its consolidated financial statements and plans to adopt the standard effective April 1, 2021.

Note 3— Business Acquisitions

Fiscal Year 2020 Acquisition

Fiscal Year 2021 Acquisitions

Mevo Acquisition

On February 17, 2021 (the "Mevo Acquisition Date"), the Company acquired all equity interests of Mevo for a total upfront cash consideration of $ 33.2 million (as described in the table below), which included a working capital adjustment, plus additional contingent consideration of up to $ 17.0 million payable in cash only upon the achievement of certain net revenues for the period beginning on December 26, 2020 and ending on December 31, 2021 (the "Mevo Acquisition").

The Mevo Acquisition is complementary to the Company’s PC Webcams portfolio and will better enable us to offer end-to-end solutions for streaming and content creation.

Mevo 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 Mevo Acquisition consists of the following (in thousands):

Consideration

Purchase price (cash)

Fair value of contingent consideration (earn-out)

Fair value of total consideration transferred

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

Estimated Fair Value

Cash and cash equivalents

Accounts receivable

Inventories, net

Other current assets

Fixed assets, net

Other long-term assets

Intangible assets

Other identifiable liabilities assumed, net ( 3,390 )

Net identifiable assets acquired

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 Mevo, and is not deductible for tax purposes.

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

Estimated Useful Life (years)

Developed technology

Customer relationships

Total identifiable intangible assets acquired

Intangible assets acquired as a result of the Mevo 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 $ 0.2 million during the year ended March 31, 2021 is included in "amortization of intangible assets and purchase accounting effect of inventory" in the consolidated statements of operations.

Amortization of the acquired customer relationships and trade name of $ 0.05 million during the year ended March 31, 2021 is included in "Amortization of intangible assets and acquisition-related costs" in the consolidated statements of operations.

Developed technology relates to Mevo’s existing camera hardware with in-app software for live streaming and video conferencing software platform.

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

Customer relationships represent the fair value of the underlying relationships with Mevo customers.

The economic useful life was determined based on the estimated costs to recreate the customer relationships and industry benchmarks.

Trade name relates to the “Mevo” 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.

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The fair value of developed technology 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.

Developed technology was valued using the royalty rate of 10 % and was discounted at a rate of 13 %.

The Company believes the 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 Mevo Acquisition Date.

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

The results of operations for Mevo subsequent to the Mevo Acquisition Date have been included in, but are not material to, the Company's consolidated statements of operations for the year ended March 31, 2021.

Mevo contributed less than 1 % of the Company's net sales for the year.

On January 4, 2021, the Company made an immaterial technology acquisition for a total cash consideration of $ 11.0 million, including $ 3.0 million earn-out payable in cash upon the achievement of two technical development milestones required to be completed for periods ending December 31, 2021 and March 31, 2022, which was accounted for using the acquisition method.

The Company retained 9 % of the total consideration for the purpose of ensuring seller's representations and warranties.

On February 11, 2021, the Company made an immaterial technology acquisition for a total cash consideration of $ 3.5 million, which was accounted for as an asset acquisition.

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

Fiscal Year 2020 Acquisitions

Streamlabs Acquisition

On October 31, 2019 (the "Streamlabs 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").

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

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Contingent consideration (earn-out) $ ( 37 )

Goodwill $ 55,406

Net assets acquired $ 105,682

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 Streamlabs Acquisition Date (Dollars in thousands):

Estimated Useful Life (years)

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

Fair Value Estimated Useful Life (years)

Developed technology $ 21,800 6.0

Customer relationships 6,000 2.0

Trade name 9,200 8.0

Total identifiable intangible assets acquired $ 37,000

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 $ 1.5 million during the year ended March 31, 2020 is included in "amortization of intangible assets and purchase accounting effect of inventory" in the consolidated statements of operations.

Amortization of the acquired customer relationships and trade name of $ 1.7 million during the year ended March 31, 2020 is included in "Amortization of intangible assets and acquisition-related costs" in the consolidated statements of operations.

Amortization of acquired developed technology of $ 3.6 million, and $ 1.5 million during the years ended March 31, 2021 and 2020, respectively, is included in "amortization of intangible assets and purchase accounting effect of inventory" in the consolidated statements of operations.

Amortization of the acquired customer relationships and trade name of $ 4.1 million and $ 1.7 million during the years ended March 31, 2021 and 2020 is included in "Amortization of intangible assets and acquisition-related costs" in the consolidated statements of operations.

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

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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

A royalty rate is applied to the

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discounted to determine the fair value.

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 %.

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

The results of operations for Streamlabs subsequent to the Streamlabs Acquisition Date have been included in, but are not material to, the Company's consolidated statements of operations for the year ended March 31, 2020 .

Streamlabs contributed $ 13.1 million to the net sales for the year ended March 31, 2020 , representing less than 1 % of the Company's net sales for the year.

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.

Fiscal Year 2019 Acquisition

Blue Microphones Acquisition

On August 21, 2018 (the "Blue Microphones Acquisition Date"), the Company acquired all equity interests in Blue Microphones Holding Corporation ("Blue Microphones") for a total consideration of $ 134.8 million in cash (the "Blue Microphones Acquisition"), which included a working capital adjustment and repayment of debt on behalf of Blue Microphones.

Blue Microphones is a leading audio manufacturer that designs and produces microphones, headphones, recording tools, and accessories for audio professionals, musicians and consumers.

The Blue Microphones Acquisition supplements the Company's product portfolio.

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

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

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Estimated Fair Value

Cash and cash equivalents

Accounts receivable

Other current assets

Property, plant and equipment

Intangible assets

Total identifiable assets acquired

Accounts payable

Accrued liabilities

Other long-term liabilities

Net identifiable assets acquired

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 Blue Microphones and is not deductible for tax purposes.

The fair value of the inventory acquired is estimated at its net realizable value, which uses the estimated selling prices, less the cost of disposal and a reasonable profit allowance for the selling efforts.

The difference between the fair value of the inventories and the amount recorded by Blue Microphones immediately before the acquisition is $ 1.8 million , which has been recognized in "amortization of intangibles assets and purchase accounting effect on inventory" in the consolidated statements of operations upon the sale of the acquired inventory.

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

Estimated Useful Life (years)

Developed technology

Customer relationships

Trademark and trade name

Total intangible assets acquired

Intangible assets acquired as a result of the Blue Microphones 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 intangible assets.

Amortization of developed technology of $ 3.6 million , and $ 2.1 million during the years ended March 31, 2020 and 2019, respectively, is included in "amortization of intangible assets and purchase accounting effect of inventory" in the consolidated statements of operations.

Amortization of customer relationships, trademark and trade names of $ 4.3 million and $ 2.5 million during the years ended March 31, 2020 and 2019, respectively, is included in " amortization of intangible assets and acquisition-related costs " in the consolidated statements of operations.

Developed technology relates to existing Blue Microphones products.

The economic useful life was determined based on the technology cycle related to developed technology of existing products, 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 of products to existing customers of Blue Microphones.

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

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Trademark and trade name relates to “Blue Microphones”.

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 values of developed technology and trade name were 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.

The developed technology and trade name were valued using royalty rates of 10 % and 3 % , respectively, and both were discounted at a rate of 11 % .

The fair value of customer relationships 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 customer relationships, which were discounted at a rate of 11 % .

The Company believes the fair value of the intangible assets recorded above approximates the amounts a market participant would pay for these intangible assets as of the Blue Microphones Acquisition Date.

The Company included Blue Microphones' estimated fair value of assets acquired and liabilities assumed in its consolidated balance sheet beginning on the Blue Microphones Acquisition Date.

The results of operations for Blue Microphones subsequent to the Blue Microphones Acquisition Date have been included in, but are not material to, the Company's consolidated statements of operations.

Acquisition-related costs and pro forma results of operations

The Company incurred acquisition-related costs of approximately $ 1.5 million , $ 1.7 million and $ 1.4 million , in aggregate, for the year ended March 31, 2020 , 2019 and 2018, respectively.

The Company incurred acquisition-related costs of approximately $ 0.6 million, $ 1.5 million and $ 1.7 million, in aggregate, for the years ended March 31, 2021 , 2020 and 2019, respectively.

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

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Years Ended March 31,

2021 2020 2019

Net Income $ 947,257 $ 449,723 $ 257,573

Shares used in net income per share computation:

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Net income per share:

Share equivalents attributable to outstanding stock options, restricted stock units ("RSUs") and employee share purchase rights (ESPP) totaling 1.7 million , 1.8 million and 1.1 million , respectively, during fiscal years 2020 , 2019 and 2018 were excluded from the calculation of diluted net income per share because the combined exercise price and average unamortized grant date fair value 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.

The majority of performance-based awards were excluded 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 were the end of the contingency period .

Basic $ 5.62 $ 2.70 $ 1.56

Diluted $ 5.51 $ 2.66 $ 1.52

Share equivalents attributable to outstanding stock options, RSUs and employee share purchase plan ("ESPP") totaling 0.1 million, 1.7 million, and 1.8 million shares, respectively, during fiscal years 2021, 2020 and 2019 were excluded from the calculation of diluted net income per share because the combined exercise price and average unamortized grant date fair value 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.

Except for fiscal year 2021, performance-based awards in the periods presented were excluded 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 were the end of the contingency period .

Note 5— Employee Benefit Plans

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Years Ended March 31,

2021 2020 2019

Cost of goods sold $ 6,438 $ 4,852 $ 3,812

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Total share-based compensation expense, net of income tax benefit $ 66,547 $ 40,761 $ 33,174

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 upon the adoption of ASU 2016-09 on April 1, 2017.

The income tax benefit for the year ended March 31, 2018 was reduced by the income tax provision resulting from the

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remeasurement of applicable deferred tax assets and liabilities due to the enactment of the Tax Act in the United States on December 22, 2017.

See "Note 7 - Income Taxes" for more information.

As of March 31, 2021, 2020 and 2019, the balance of capitalized stock-based compensation included in inventory was $ 1.1 million, $ 0.9 million, and $ 0.9 million, respectively.

The following table summarizes total unamortized share-based compensation expense and the remaining period over which such expense is expected to be recognized, on a weighted-average basis by type of grant (in thousands, except number of months):

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March 31, 2021

Expense Remaining

ESPP $ 2,636 4

Stock Options 2,104 12

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Subject to continued participation in these plans, purchase agreements are automatically executed at the end of each offering period.

An aggregate of 29.0 million shares was reserved for issuance under the 1996 and 2006 ESPP plans.

As of March 31, 2020 , a total of 4.9 million shares was available for new awards under these plans.

An aggregate of 29.0 million shares were reserved for issuance under the 1996 and 2006 ESPP plans.

As of March 31, 2021, a total o f 4.7 million sha res were available for new awards under these plans.

The 2006 Plan provides for the grant to eligible employees and non-employee directors of stock options, stock appreciation rights, restricted stock and RSUs.

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All stock options under this plan have terms not exceeding ten years and are issued at exercise prices not less than the fair market value on the date of grant.

An aggregate of 30.6 million shares was reserved for issuance under the 2006 Plan.

An aggregate of 30.6 million shares were reserved for issuance under the 2006 Plan.

As of March 31, 2021, a total of 7.8 million shares were available for new awards under this plan.

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Time-based RSUs granted to non-executive board members under the 2006 Plan vest on the grant date anniversary, or if earlier and only if the non-executive board member is not re-elected as a director at such annual general meeting, the date of the next annual general meeting following the grant date.

In fiscal years 2020, 2019 and 2018, the Company granted RSUs with both performance and market conditions, which vest at the end of the three -year performance period upon meeting predetermined financial metrics over three years , with the number of shares to be received upon vesting determined based on weighted average constant currency revenue growth rate and the Company's TSR relative to the performance of companies in the NASDAQ-100 Index over the same three years period.

In fiscal years 2021, 2020 and 2019, the Company granted RSUs with both performance and market conditions, which vest at the end of the three-year performance period upon meeting predetermined financial metrics over three years , with the number of shares to be received upon vesting determined based on weighted average constant currency revenue growth rate and the Company's Total Shareholder Return ("TSR") relative to the performance of companies in the Russell 3000 Index for fiscal year 2021 and NASDAQ-100 Index for fiscal years 2020 and 2019 over the same three years period.

The Company presents shares granted and vested at 100 percent of the target of the number of stock units that may potentially vest.

The aggregate fair value of shares that actually vested during the year is based on the actual number of stock units vested during the year based on the achievement of the financial metrics over the performance period.

Under the 2012 Plan, stock options and RSUs may be granted to eligible employees to serve as an inducement to enter into employment with the Company.

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The 2012 Plan has an expiration date of March 28, 2022.

An aggregate of 1.8 million shares was reserved for issuance under the 2012 Plan.

An aggregate of 1.8 million shares were reserved for issuance under the 2012 Plan.

As of March 31, 2021, no shares were available for new awards under this plan.

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Stock Options

Employee Stock Purchase Plans

Years Ended March 31,

Stock Options Employee Stock Purchase Plans

Years Ended March 31, Years Ended March 31,

2021 2020 2019 2021 2020 2019

Dividend yield * * 1.72 % 1.04 % 1.74 % 1.73 %

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* Not applicable as no stock options were granted in the period.

RSUs with Market Conditions

Years Ended March 31,

RSUs with Market Conditions Years Ended March 31,

2021 2020 2019

Dividend yield 1.24 % 1.76 % 1.59 %

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The expected life for stock options is based on historical settlement rates, which the Company believes are most representative of future exercise and post-vesting termination behaviors.

Expected volatility is based on historical volatility using the Company's daily closing prices, or including the volatility of components of the NASDAQ 100 index for market-based RSUs, over the expected life.

Expected volatility is based on historical volatility using the Company's daily closing prices, or including the volatility of components of the NASDAQ 100 index or the Russell 3000 Index for market-based RSUs, over the expected life.

The Company considers the historical price volatility of its shares as most representative of future volatility.

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A summary of the Company's stock option activities under all stock plans for fiscal years 2021, 2020 and 2019 is as follows:

Number of Shares

Weighted-Average Exercise Price

Weighted-Average Remaining Contractual Term

Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term

Aggregate Intrinsic Value

(In thousands)

(In thousands) (Years) (In thousands)

Outstanding, March 31, 2018 2,040

Exercised ( 82 ) $ 1,707

Canceled or expired —

Outstanding, March 31, 2019 2,607

Exercised ( 573 ) $ 19,339

Canceled or expired ( 65 )

Outstanding, March 31, 2020 1,969 $ 22

Exercised ( 1,347 ) $ 17 $ 68,596

Canceled or expired — $ —

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Vested and exercisable, March 31, 2021 330 $ 30 6.3 $ 24,452

As of March 31, 2020 , the exercise price of outstanding options ranged from $ 2 to $ 40 per share option.

As of March 31, 2021, the exercise price of outstanding options ranged fro m $ 8 to $ 41 p er share option.

The tax benefit realized for the tax deduction from options exercised during fiscal years 2021, 2020 and 2019 was $ 0.6 million , $ 0.1 million and $ 0.2 million, respectively.

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A summary of the Company's time-based, market-based and performance-based RSU activities for fiscal years 2021, 2020 and 2019 is as follows:

Number of Shares

Weighted-Average Grant Date Fair Value

Weighted-Average Remaining Vesting Period

(In thousands)

Number of Shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Vesting Period Aggregate

(In thousands) (Years) (In thousands)

Outstanding, March 31, 2018 5,221 $ 20

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Granted—market and performance-based 381 $ 39

Vested ( 2,148 ) $ 89,159

Canceled or expired ( 323 )

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Granted—market and performance-based 365 $ 40

Vested ( 1,705 ) $ 76,389

Canceled or expired ( 561 )

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Granted—market and performance-based 303 $ 67

Vested ( 1,444 ) $ 31 $ 168,816

Canceled or expired ( 213 ) $ 42

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The RSUs outstanding as of March 31, 2021 above include 0.9 million shares with both market-based and performance-based vesting conditions.

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The tax benefit realized for the tax deduction from RSUs that vested during fiscal years 2021, 2020 and 2019 was $ 16.3 million , $ 12.1 million and $ 16.2 million, respectively.

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Each plan's assets and benefit obligations are remeasured as of March 31 each year.

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The net periodic benefit cost of the defined benefit pension plans and the non-retirement post-employment benefit obligations for fiscal years 2021, 2020 and 2019 was as follows (in thousands):

Years Ended March 31,

2021 2020 2019

Service costs $ 12,121 $ 11,008 $ 10,564

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Net actuarial loss recognized 2,144 1,386 450

Settlement — ( 97 ) ( 97 )

Total net periodic benefit cost $ 12,310 $ 10,301 $ 9,608

The components of net periodic benefit cost other than the service costs component are included in the line “other income (expense), net” in the consolidated statements of operations.

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The changes in projected benefit obligations for fiscal years 2021 and 2020 were as follows (in thousands):

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Benefits paid ( 3,947 ) ( 8,778 )

Transfer of prior vested benefits 7,556 5,271

Plan amendment related to statutory change — —

Settlement — ( 941 )

Administrative expense paid ( 130 ) ( 141 )

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Benefits paid

( 3,947 ) ( 8,778 )

Transfer of prior vested benefits 7,556 5,271

Settlement — ( 941 )

Administrative expenses paid ( 130 ) ( 141 )

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Fair value of plan assets, end of the year $ 128,061 $ 98,010

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The Company's investment objectives are to ensure that the assets of its defined benefit plans are invested to provide an optimal rate of investment return on the total investment portfolio, consistent with the assumption of a reasonable risk level, and to ensure that pension funds are available to meet the plans' benefit obligations as they become due.

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The Company also can invest in real estate funds, commodity funds, and hedge funds depending upon economic conditions.

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The following tables present the fair value of the defined benefit pension plan assets by major categories and by levels within the fair value hierarchy as of March 31, 2021 and 2020 (in thousands):

Level 1 Level 2 Total Level 1 Level 2 Total

Cash and cash equivalents $ 21,715 $ — $ 21,715 $ 14,213 $ — $ 14,213

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Swiss real estate funds 20,802 8,341 29,143 16,476 8,168 24,644

Hedge funds — 2,730 2,730 — 1,882 1,882

Other 4,704 298 5,002 2,084 253 2,337

Total fair value of plan assets $ 116,692 $ 11,369 $ 128,061 $ 87,707 $ 10,303 $ 98,010

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Amounts recognized in accumulated other comprehensive loss related to defined benefit pension plans were as follows (in thousands):

2021 2020 2019

Net prior service credits $ 3,263 $ 3,647 $ 3,965

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Accumulated other comprehensive loss ( 24,290 ) ( 19,075 ) ( 13,665 )

Deferred taxes 1,090 ( 941 ) ( 267 )

Accumulated other comprehensive loss, net of tax $ ( 23,200 ) $ ( 20,016 ) $ ( 13,932 )

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The following table presents the amounts included in accumulated other comprehensive loss as of March 31, 2021, which are expected to be recognized as a component of net periodic benefit cost in fiscal year 2022 (in thousands):

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The actuarial assumptions for the defined benefit plans for fiscal years 2021 and 2020 were as follows:

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Years Ended March 31,

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2.25 % - 10.00 %

Cash Balance Interest Credit Rate 0.00 % - 1.75 %

0.00 % - 1.75 %

Periodic Costs:

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0.89 % - 3.00 %

Cash Balance Interest Credit Rate 0.00 % - 1.75 %

1.75 % - 2.00 %

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Years Ending March 31,

2022 $ 10,527

2027-2031 54,209

Total expected benefit payments by the plan $ 106,950

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Years Ended March 31,

2021 2020 2019

Investment income (loss) related to the deferred compensation plan $ 5,916 $ ( 831 ) $ 664

Currency exchange loss, net ( 2,688 ) ( 909 ) ( 3,608 )

Gain on investment, net

Gain (Loss) on investments, net ( 5,910 ) 39,011 816

Other 893 941 1,692

Other income (expense), net $ ( 1,789 ) $ 38,212 $ ( 436 )

Gain on investments, net, represents realized gain (loss) on sales of investments, unrealized gain (loss) from the change in fair value of available-for-sale securities and gain (loss) on equity-method investments during the periods presented.

On March 2, 2020, the Company sold its $ 5.5 million investment in a privately held company for proceeds with a total fair value of $ 45.3 million consisting of cash, a subordinated note and an equity interest in another privately held company.

As a result, the Company recognized a gain of $ 39.8 million related to the sale of this investment.

Refer to “Note 9 - Fair Value Measurement” for details.

The components of net periodic benefit cost other than the service cost component, which is included in "operating expenses" in the consolidated statements of operations, for the years ended March 31, 2020 and 2019 are included in the line “Other” above as a result of adopting ASU 2017-07 effective April 1, 2018.

The impact to the comparative periods was immaterial and therefore the prior period statements of operations were not revised.

Gain (Loss) on investments, net, represents realized gain (loss) on sales of investments, unrealized gain (loss) from the change in fair value of available-for-sale securities and gain (loss) on equity-method investments during the periods presented.

In fiscal year 2021, the loss on investments is mostly related to losses recognized from the Company's equity method investments.

On March 2, 2020, the Company sold its $ 5.5 million investment, in a privately held com pany, f or proceeds with a total fair value of $ 45.3 million consisting of cash, a subordinated note and an equity interest in another privately held company.

As a result, the Company recognized a gain of $ 39.8 million related to the sale of this investment in fiscal year 20 20.

The components of net periodic benefit cost other than the service cost component, which is included in "operating expenses" in the consolidated statements of operations, for the years ended March 31, 2021, 2020 and 2019 are included in the line “Other” above as a result of adopting ASU 2017-07, "Compensation - Retirement Benefits (Topic 715):

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" (ASU 2017-07), effective April 1, 2018.

Logitech International S.A.

5 unchanged sentences

Years Ended March 31,

2021 2020 2019

Swiss $ 984,185 $ 238,303 $ 212,986

Non-Swiss 163,935 86,023 58,147

Income before taxes $ 1,148,120 $ 324,326 $ 271,133

1 unchanged sentence

Years Ended March 31,

2021 2020 2019

Swiss $ 121,199 $ 5,474 $ 1,364

Non-Swiss 45,056 29,078 24,334

Swiss 31,558 ( 153,210 ) —

Non-Swiss 3,050 ( 6,739 ) ( 12,138 )

Provision for (benefit from) income taxes $ 200,863 $ ( 125,397 ) $ 13,560

1 unchanged sentence

Years Ended March 31,

2021 2020 2019

Expected tax provision at statutory income tax rates $ 97,590 $ 27,568 $ 23,046

3 unchanged sentences

Stock-based compensation ( 3,161 ) ( 2,735 ) ( 7,288 )

Deferred tax effects from Tax Act

Deferred tax effects from TRAF 1,944 ( 206,792 ) —

2 unchanged sentences

Unrecognized tax benefits 15,978 64,683 8,269

Other, net ( 973 ) 1,107 ( 1,118 )

Provision for (benefit from) income taxes $ 200,863 $ ( 125,397 ) $ 13,560

3 unchanged sentences

Deferred tax assets:

Net operating loss carryforwards

Tax credit carryforwards

Tax attributes carryforward $ 42,482 $ 73,975

Accruals 79,884 57,923

Depreciation and amortization 1,628 4,831

3 unchanged sentences

Valuation allowance ( 28,926 ) ( 29,171 )

Gross deferred tax assets after valuation allowance

Deferred tax assets after valuation allowance 241,974 269,725

Deferred tax liabilities:

Acquired intangible assets and other ( 32,789 ) ( 31,128 )

Gross deferred tax liabilities

Deferred tax liabilities ( 32,789 ) ( 31,128 )

Deferred tax assets, net $ 209,185 $ 238,597

On May 19, 2019, the Swiss electorate approved 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 as of January 1, 2020.

TRAF specifies mandatory and voluntary provisions that are implemented through the modification of the cantonal tax law.

Major mandatory federal tax provisions include abolishment of preferential cantonal tax regimes, introduction of patent box regime and tax-free step-up of intangible assets, including goodwill created under a privileged tax regime.

The canton of Vaud completed the legislative process to enact TRAF on March 10, 2020 to take effect as of January 1, 2020.

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

The Company reached an agreement with the Vaud Tax Administration that would allow for a tax step-up of goodwill under TRAF to be amortized over ten years beginning on January 1, 2020 as a transition measure.

The Company elected an accounting policy to treat the increase in tax goodwill as a separate unit of account apart from existing goodwill arising from prior business combinations.

As a result, the Company recorded an income tax benefit of $ 151.7 million , net of unrecognized tax benefits to account for the book and tax basis difference of the step-up upon enactment.

The deferred income tax benefit from other temporary differences resulting from the Swiss tax reform, net of three-month amortization of the tax step-up amounted to $ 1.5 million .

The aggregate deferred income tax impact in fiscal year 2020 as a result of the enactment of TRAF was $ 153.2 million .

Included in tax attributes carryforward above are net operating loss and tax credit carryforwards.

The canton of Vaud enacted TRAF, a major reform to better align the Swiss tax system with international tax standards, on March 10, 2020 that took effect as of January 1, 2020.

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

Management regularly assesses the ability to realize deferred tax assets recorded in the Company's entities based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income.

1 unchanged sentence

The Company had a valuation allowance against deferred tax assets of $ 28.9 million at March 31, 2021, compared to $ 29.2 million at March 31, 2020.

The federal valuation allowance against tax credits was reduced from $ 1.9 million as of March 31, 2019 to $ 0.9 million as of March 31, 2020 due to a release of $ 1.0 million from the expiration tax credits.

The Company had a valuation allowance of $ 27.7 million as of March 31, 2020 against deferred tax assets in the state of California, an increase from $ 25.7 million as of March 31, 2019 .

The increase primarily relates to $ 1.3 million from the acquisition of Streamlabs and $ 0.7 million from activities related to deferred tax assets, respectively.

The federal valuation allowance against tax credits in the amount of $ 0.9 million as of March 31, 2020 was released entirely as of March 31, 2021 due to sufficient taxable income available to utilize these credits.

The Company had a valuation allowance of $ 28.5 million as of March 31, 2021 against deferred tax assets in the state of California, an increase from $ 27.7 million as of March 31, 2020 from activities during the year.

The remaining valuation allowance primarily represents $ 0.4 million for various tax attribute carryforwards.

1 unchanged sentence

As of March 31, 2021, the Company had foreign net operating loss and tax credit carryforwards for income tax purposes of $ 173.1 million and $ 67.5 million, respectively.

Unused net operating loss carryforwards will expire at

Logitech International S.A.

| Fiscal 2020 Form 10-K | 106

various dates in fiscal years 2021 to 2039.

Unused net operating loss carryforwards will expire at various dates in fiscal years 2021 to 2039.

Certain net operating loss carryforwards in the United States relate to acquisitions and, as a result, are limited in the amount that can be utilized in any one year.

4 unchanged sentences

The amount of unrecognized deferred income tax liability related to these earnings is estimated to be approximately $ 2.1 million.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 100

The Company follows a two-step approach in recognizing and measuring uncertain tax positions.

4 unchanged sentences

The aggregate changes in gross unrecognized tax benefits in fiscal years 2021, 2020 and 2019 were as follows (in thousands).

Fiscal year 2020 includes gross unrecognized tax benefits recorded as a result of the enactment of TRAF in Switzerland:

March 31, 2018 $ 69,131

11 unchanged sentences

March 31, 2021 $ 163,253

Fiscal year 2020 includes gross unrecognized tax benefits recorded as a result of the enactment of TRAF in Switzerland:

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

6 unchanged sentences

If the examinations are resolved unfavorably, there is a possibility they may have a material negative impact on its results of operations.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 107

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.

During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to chang es in tax law in various jurisdictions, new tax audits and changes in the U.S.

During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, new tax audits and changes in the U.S.

Dollar as compared to other currencies.

11 unchanged sentences

Allowance for pricing programs ( 120,568 ) ( 100,168 )

$ 612,225 $ 394,743

Raw materials $ 146,886 $ 56,052

Finished goods 514,230 173,197

$ 661,116 $ 229,249

Other current assets:

1 unchanged sentence

Prepaid expenses and other assets 67,940 41,304

$ 135,650 $ 74,920

Property, plant and equipment, net:

2 unchanged sentences

Computer equipment 27,869 26,148

Software 56,087 56,091

394,973 333,260

accumulated depreciation and amortization ( 303,460 ) ( 270,387 )

91,513 62,873

Construction-in-process 19,637 10,441

Land 2,910 2,805

$ 114,060 $ 76,119

Other assets:

3 unchanged sentences

Investment in privately held companies 43,402 45,949

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

Refer to Note 2 to the consolidated financial statements for more information.

Other assets 13,980 12,900

$ 324,248 $ 345,019

Logitech International S.A.

2 unchanged sentences

Accrued and other current liabilities:

Accrued customer marketing, pricing and incentive programs $ 185,394 $ 130,220

Accrued personnel expenses 173,360 104,423

Income taxes payable - current 131,408 8,823

Accrued payables - non-inventory 52,392 11,548

VAT payable 50,620 12,757

Accrued sales return liability 43,178 30,267

Accrued customer marketing, pricing and incentive programs

Operating lease liability¹

Warranty accrual 33,228 25,905

Operating lease liability 13,101 10,945

Contingent consideration 6,967 23,284

Other current liabilities 168,969 96,852

$ 858,617 $ 455,024

Other non-current liabilities:

Warranty accrual

Obligation for deferred compensation plan

Employee benefit plan obligation $ 72,321 $ 61,303

Deferred tax liability

Obligation for deferred compensation plan 24,809 20,085

Operating lease liability 21,319 19,536

Warranty accrual 15,604 14,134

Deferred tax liability 1,679 1,931

Other non-current liabilities 3,770 2,285

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

Refer to Note 2 to the consolidated financial statements for more information.

$ 139,502 $ 119,274

Note 9— Fair Value Measurements

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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):

March 31, 2020

March 31, 2019

March 31, 2021 March 31, 2020

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Cash equivalents $ 669,759 $ — $ — $ 564,952 $ — $ —

Trading investments for deferred compensation plan included in other assets:

Cash $ 31 $ — $ — $ 846 $ — $ —

Common stock 1,569 — — — — —

Money market funds 6,734 — — 7,147 — —

Mutual funds 16,475 — — 12,092 — —

Total of trading investments for deferred compensation plan $ 24,809 $ — $ — $ 20,085 $ — $ —

3 unchanged sentences

The following table summarizes the change in the fair value of the Company's contingent consideration balance during fiscal year 2021 (in thousands):

Year Ended March 31,

Year Ended March 31, Year Ended March 31,

Acquisition-related contingent consideration, beginning of the year $ 23,284 $ —

1 unchanged sentence

Change in fair value of contingent consideration 5,716 23,247

Settlement of contingent consideration (2)

Acquisition-related contingent consideration, end of the year $ 6,967 $ 23,284

(1) The fair value of contingent consideration upon acquisition of $ 6.4 million includes the earn-out of $ 3.4 million from the Mevo Acquisition and an earn-out of $ 3.0 million from the other immaterial technology acquisition.

See Contingent Consideration for Business Acquisition section below for details.

(2) As of June 30, 2020, the earn-out period was completed in connection with our acquisition of Streamlabs (discussed below).

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

During the third quarter of fiscal year 2021, the fair value of $ 28.5 million of the contingent consideration was transferred from other current liabilities to equity upon settlement of the contingent consideration through the issuance of shares out of treasury stock.

The remaining amount of $ 0.5 million is held back in escrow for claims made against the escrow and for the payment of taxes.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 104

Trading Investments

2 unchanged sentences

Unrealized trading gains related to trading securities for fiscal years 2021, 2020 and 2019 were not material and are included in other income (expense), net in the consolidated statements of operations.

Contingent Consideration for Business Acquisition

The contingent consideration for business acquisition arising from the Streamlabs Acquisition (see "Note 3 - Business Acquisition" to the 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 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 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 includes significant assumptions and unobservable inputs such as the projected sales of Streamlabs over the earn-out period, risk-free rate, and the net sales volatility.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 111

business acquisition" in the operating expense section in the consolidated statements of operations.

Projected sales are based on the Company's internal projections, including analysis of the target market and historical trend of active subscribers to the Streamlabs platform.

The fair value of the contingent consideration was increased to $ 23.3 million as of March 31, 2020.

The change in fair value of contingent consideration resulted from the growth in Streamlabs’ net sales since its acquisition and revised projected net sales in the remaining earn-out period.

Contingent Consideration for Business Acquisitions

The contingent consideration for business acquisition arising from the Mevo Acquisition (see "Note 3—Business Acquisition" for more information) represents the future potential earn-out payments of up to $ 17.0 million payable in cash only upon the achievement of certain net sales for the period beginning on December 26, 2020 and ending on December 31, 2021.

The fair value of the earn-out as of the Mevo Acquisition Date was $ 3.4 million which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met, times the value of the earn-out payment, and discounted at the risk-free rate.

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

The fair value of the contingent consideration is remeasured at each reporting period based on the inputs on the date of re-measurement, with the change in fair value recognized as "change in fair value of contingent consideration for business acquisition" in the operating expense section in the consolidated statements of operations.

Projected sales are based on the Company's internal projections, including analysis of the target market and historical sales of Mevo products.

For the year ended March 31, 2021, the change in fair value of the contingent consideration related to acquisition was not material.

The contingent consideration for business acquisition arising from the other immaterial technology acquisition represents the future potential earn-out payments of $ 3.0 million payable in cash upon the achievement of two technical development milestones required to be completed for periods ending December 31, 2021 and March 31, 2022.

The fair value of the contingent amount was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt.

On October 31, 2019, the Company acquired all of the equity interests of Streamlabs.

In connection with the acquisition of Streamlabs, the Company agreed to pay a total earn out payment 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 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, times the value of the earn-out payment, and discounted at the risk-free rate.

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

The fair value of the contingent consideration no longer needs to be remeasured after June 30, 2020, as the earn-out period has been completed.

During the third quarter of fiscal year 2021, Logitech issued 390,397 shares out of treasury shares to former security holders of Streamlabs, in satisfaction of payment of the contingent consideration that was earned during the earn-out period of January 1, 2020 through June 30, 2020.

The issuances of such shares were deemed to be exempt from registration under the Securities Act of 1933 (the "Securities Act"), in reliance on Regulation D of the Securities Act as transactions by an issuer not involving a public offering.

Although these estimates are based on management’s best knowledge of current events, the estimates could change significantly from period to period.

2 unchanged sentences

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 $ 40.7 million and $ 42.1 million as of March 31, 2021 and 2020, respectively.

On March 2, 2020, the Company sold its $ 5.5 million investment in a privately held company for total proceeds of $ 45.3 million consisting of (i) $ 3.0 million in cash, of which $ 0.8 million is held in escrow, which is included in other current assets on the Company's consolidated balance sheet, (ii) a 6 % subordinated note with a principal amount of $ 8.4 million due in 5 years together with the interest, at a fair value of $ 7.4 million , and (iii) 33.9 million Series A preferred units and 33.9 million Series B common units in Marlin-SL Topco, LP ("Marlin"), representing an ownership interest of approximately 11.8 % in Marlin, with a face value of $ 33.9 million and a fair value of $ 35.0 million , respectively.

As a result, the Company recorded a gain of $ 39.8 million in the fourth quarter of fiscal year 2020.

The fair value of the investment in the subordinated note and the Company's investment in preferred units of Marlin were determined using the discounted cash flow method ("DCF"), an income approach (Level 3) with an assumed yield of 10.3 % and 12.5 % , respectively.

The fair value of the Company's investment in common units of Marlin was the residual between the calculated value of equity using market approach, and the fair value of the preferred units with a Discount for Lack of Marketability ("DLOM") of 19 % .

Logitech International S.A.

| Fiscal 2021 Form 10-K | 105

On March 2, 2020, the Company sold its $ 5.5 million investment, in a privately held company, for proceeds with a total fair value of $ 45.3 million consisting of cash, a 6 % subordinated note due in 5 years, and a Series A preferred units and Series B common units in Marlin-SL Topco, LP ("Marlin").

As of March 31, 2021, the investment represents an ownership interest of approximately 10.8 % in Marlin.

The Company has evaluated whether Marlin qualifies as a variable interest entity ("VIE") pursuant to the accounting guidance of ASC 810, Consolidations .

3 unchanged sentences

The promissory note is accounted for as a loan receivable and is included in "Other assets" in the consolidated balance sheet.

The Company's maximum exposure to any losses incurred by Marlin is limited to its investment.

For fiscal year 2021, the carrying value of the investment in Marlin was $ 26.7 million.

The Company's investment related to this VIE was not individually significant to the Company's consolidated financial statements.

Unrealized gains (losses) related to Marlin and other equity investments for the fiscal year 2021 were not material and are included in other income (expense), net in the Company's consolidated statements of operations.

There was no impairment of these assets during fiscal years 2021 and 2020.

Assets Measured at Fair Value on a Nonrecurring Basis

2 unchanged sentences

Financial Assets.

The Company has certain investments in equity securities of privately held entities without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment.

The Company has certain investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment.

When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies.

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

The amount of these investments included in other assets as of March 31, 2020 and March 31, 2019 was $ 3.9 million and $ 9.5 million , respectively.

There was no impairment of these assets during fiscal years 2020 and 2019.

The amount of these investments included in other assets was immaterial as of March 31, 2021 and 2020.

During the fiscal year 2021, the Company recorded impairment charges of $ 2.0 million for its non-marketable equity securities which had an initial cost basis of $ 2.0 million as it was determined the carrying value of the investments were not recoverable.

There was no impairment of these assets during fiscal year 2020.

Non-Financial Assets.

Goodwill, intangible assets, and property, plant and equipment, 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

Logitech International S.A.

| Fiscal 2020 Form 10-K | 112

See Note 2 to the consolidated financial statements for additional information about how the Company tests various asset classes for impairment.

2 unchanged sentences

However, the Company presents its derivative assets and derivative liabilities on a gross basis in other current assets or accrued and other current liabilities on the consolidated balance sheets as of March 31, 2021 and 2020.

The fair values of the Company’s derivative instruments were not material as of March 31, 2020 or March 31, 2019 (refer to Note 9 to the consolidated financial statements for more information).

The fair values of the Company’s derivative instruments were not material as of March 31, 2021 or 2020 (refer to Note 9 to the consolidated financial statements for more information).

The following table presents the amounts of gains and losses on the Company's derivative instruments designated as hedging instruments for fiscal years 2021, 2020 and 2019 and their locations on its consolidated statements of operations and consolidated statements of comprehensive income (in thousands):

Logitech International S.A.

| Fiscal 2021 Form 10-K | 106

Gain (Loss) Deferred as

1 unchanged sentence

Accumulated Other

Comprehensive Loss

Amount of Loss (Gain)

Comprehensive Loss Amount of Loss (Gain)

Reclassified from

2 unchanged sentences

to Costs of Goods Sold

2021 2020 2019 2021 2020 2019

Designated as hedging instruments:

Cash flow hedges $ ( 4,071 ) $ 205 $ 1,781 $ 8,043 $ ( 813 ) $ 1,810

Upon adoption of ASU 2017-12, the Company has started presenting the earnings impact from forward points in the same line item that is used to present the earnings impact of the hedged item, i.e.

Upon adoption of ASU 2017-12 "Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities" (ASU 2017-12), the Company has started presenting the earnings impact from forward points in the same line item that is used to present the earnings impact of the hedged item, i.e.

cost of goods sold, for hedging forecasted inventory purchases and such amount is not material for all periods presented.

1 unchanged sentence

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

These hedging contracts mature within four months .

These hedging contracts mature within five months .

Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold.

5 unchanged sentences

The Company estimates that $ 3.7 million of net loss related to its cash flow hedges included in accumulated other comprehensive loss as of March 31, 2021 will be reclassified into earnings within the next twelve months.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 113

Other Derivatives:

The Company also enters into currency forward and swap contracts to reduce the short-term effects of currency fluctuations on certain receivables or payables denominated in currencies other than the functional currencies of its subsidiaries.

These forward and swap contracts generally mature within one month .

These forward and swap contracts generally mature within a month.

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

4 unchanged sentences

Cash flows from these contracts are classified as operating activities in the consolidated statements of cash flows.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 107

Note 11— Goodwill and Other Intangible Assets

7 unchanged sentences

Acquisitions (1)

28,667 57,206

Currency exchange rate impact 20 27

End of the period $ 429,604 $ 400,917

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

(1) Includes goodwill acquired from the Mevo Acquisition and an immaterial technology acquisition in January 2021.

See Note 3 for more information.

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

Gross Carrying Amount

Net Carrying Amount

Gross Carrying Amount

Net Carrying Amount

Gross Carrying Amount Accumulated

Amortization Net Carrying Amount Gross Carrying Amount Accumulated

Amortization Net Carrying Amount

Trademarks and trade names $ 46,070 $ ( 25,153 ) $ 20,917 $ 45,570 $ ( 19,061 ) $ 26,509

1 unchanged sentence

Customer contracts/relationships 91,010 ( 44,261 ) 46,749 90,610 ( 31,859 ) 58,751

In-process R&D 3,526 — 3,526 — — —

$ 275,012 $ ( 159,864 ) $ 115,148 $ 254,987 $ ( 128,046 ) $ 126,941

For fiscal years 2021, 2020 and 2019, amortization expense for intangible assets was, $ 31.8 million , $ 30.9 million and $ 24.2 million, respectively.

The Company expects that annual amortization expense for fiscal years 2022, 2023, 2024, 2025 and 2026 will be $ 31.0 million, $ 24.9 million, $ 21.5 million, $ 17.0 million and $ 9.8 million, respectively, and $ 7.5 million thereafter.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 114

The intangible assets include $ 3.5 million of IPR&D from an immaterial asset acquisition in February 2021.

IPR&D is capitalized at fair value and the amortization commences upon completion of the underlying projects.

Once research and development efforts are completed, the corresponding amount of IPR&D is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life.

As of March 31, 2021, there was no IPR&D amortized.

Note 12— Financing Arrangements

6 unchanged sentences

Changes in the Company's warranty liability for fiscal years 2021 and 2020 were as follows (in thousands):

Logitech International S.A.

| Fiscal 2021 Form 10-K | 108

Years Ended March 31,

1 unchanged sentence

Assumed from business acquisition 231 —

Provision 38,463 34,186

Settlements ( 30,621 ) ( 28,022 )

Currency translation 720 ( 354 )

19 unchanged sentences

The Company's nominal share capital is CHF 43.3 million, consisting of 173,106,620 issued shares with a par value of CHF 0.25 each, of which 4,798,723 were held in treasury shares as of March 31, 2021.

The Company's has reserved conditional capital of 25,000,000 shares for potential issuance on the exercise of rights granted under the Company's employee equity incentive plans and additional conditional capital for financing purposes, representing the issuance of up to 25,000,000 shares to cover any conversion rights under a future

The Company has reserved conditional capital of 25,000,000 shares for potential issuance on the exercise of rights granted under the Company's employee equity incentive plans and additional conditional capital for financing purposes, representing the issuance of up to 25,000,000 shares to cover any conversion rights under a future convertible bond issuance.

At the 2018 Annual General Meeting, the shareholders of the Company authorized the Board of Directors to issue up to an additional 34,621,324 shares of the Company until September 5, 2020, which authority expired on that date.

At the 2020 Annual General Meeting, the shareholders of the Company authorized the Board of Directors to issue up to an additional 17,310,662 shares of the Company until September 9, 2022.

Pursuant to Swiss corporate law, the payment of dividends is limited to certain amounts of unappropriated retained earnings (CHF 1,046.5 million, or $ 1,109.1 million based on the exchange rate at March 31, 2021) and is subject to shareholder approval.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 109

convertible bond issuance.

This conditional capital was created in order to provide financing flexibility for future expansion, investments or acquisitions.

During the 2018 Annual General Meeting, the shareholders of the Company authorized the Board of Directors to issue up to an additional 34,621,324 shares of the Company until September 5, 2020.

Pursuant to Swiss corporate law, the payment of dividends is limited to certain amounts of unappropriated retained earnings (CHF 1,096.3 million , or $ 1,134.9 million based on the exchange rate at March 31, 2020 ) and is subject to shareholder approval.

In May 2020, the Board of Directors recommended that the Company pay cash dividends for fiscal year 2020 of CHF 134.0 million ( $ 138.7 million based on the exchange rate on March 31, 2020).

In April 2021, the Board of Directors recommended that the Company pay cash dividends for fiscal year 2021 of CHF 147.0 million ($ 155.8 million based on the exchange rate on March 31, 2021).

In September 2020, the Company declared and paid cash dividends of CHF 0.79 (USD equivalent of $ 0.87 ) per common share, totaling $ 146.7 million on the Company's outstanding common stock.

8 unchanged sentences

Share Repurchases

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 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 repurchase program, which authorizes the Company to use up to $ 250.0 million to purchase up to 17.3 million of Logitech shares.

This share repurchase program expired in April 2020.

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

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

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 March 31, 2020 , $ 137.4 million is still available for repurchase under the 2017 buyback program.

This share buyback program expired in April 2020.

A summary of the approved and active share buyback program is shown in the following table (in thousands, excluding transaction costs):

Share Buyback Program

(1) The approval of each of the share buyback programs by the Swiss Takeover Board limits the number of shares that the Company may repurchase to no more than 10 % of its authorized share capital and voting rights.

As of March 31, 2021 , $ 85.4 million is still available for repurchase under the 2020 share repurchase program before the Board of Directors' approval of the increase of this program in April 2021.

In April 2021, our Board of Directors approved an increase of $ 750.0 million of the 2020 share repurchase program, to an aggregate amount of $ 1.0 billion.

This increase is subject to approval by the Swiss Takeover Board.

A summary of the approved and active share repurchase program is shown in the following table (in thousands, excluding transaction costs):

Approved Repurchased

Share Repurchase Program Shares (1)

Amounts Shares Amounts

March 2017 17,311 $ 250,000 2,902 $ 112,614

March 2020 17,311 $ 250,000 1,845 $ 164,618

(1) The approval of each of the share repurchase programs by the Swiss Takeover Board limits the number of shares that the Company may repurchase to no more than 10 % of its authorized share capital and voting rights.

Logitech International S.A.

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Accumulated Other Comprehensive Income (Loss)

Adjustment (1)

Gains (Losses)

Adjustment Defined

Plans Deferred

Gains (Losses) Total

March 31, 2020 $ ( 100,418 ) $ ( 20,016 ) $ ( 226 ) $ ( 120,660 )

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March 31, 2021 $ ( 89,461 ) $ ( 23,200 ) $ 3,746 $ ( 108,915 )

_______________________________________

(1) Tax effect was not significant as of March 31, 2020 or 2019 .

There was a $ 1.7 million reclassification of currency translation loss included in other income (expense), net for the year ended March 31, 2021 due to the liquidation of one of the Company's subsidiaries.

There was a $ 0.5 million reclassification of currency translation loss included in other income (expense), net for the year ended March 31, 2019 due to the liquidation of one of the Company's subsidiaries.

Note 15— Segment Information

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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.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 117

Sales by product categories were as follows (in thousands):

Years Ended March 31,

2021 2020 2019

Pointing Devices $ 680,907 $ 544,519 $ 536,890

Keyboards & Combos 784,488 571,720 536,619

PC Webcams 439,865 129,193 121,282

Tablet & Other Accessories 384,301 135,309 128,315

1,239,005 690,174 648,130

Video Collaboration 1,044,935 365,616 259,521

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Audio & Wearables 468,776 273,752 277,429

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

Smart Home 34,394 43,404 49,344

Total Sales $ 5,252,279 $ 2,975,851 $ 2,788,322

(1) Gaming includes streaming services revenue generated by Streamlabs.

(2) Other 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.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 111

Sales by geographic region for fiscal years 2021, 2020 and 2019 (based on the customers' locations) were as follows (in thousands):

Years Ended March 31,

2021 2020 2019

Americas $ 2,206,552 $ 1,286,527 $ 1,190,216

EMEA 1,735,682 941,211 861,731

Asia Pacific 1,310,045 748,113 736,375

Total Sales $ 5,252,279 $ 2,975,851 $ 2,788,322

Revenues from sales to customers in the United States represented 35 %, 36 % and 36 % of sales in fiscal years 2021, 2020 and 2019, respectively.

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

Americas $ 20,810 $ 26,636

EMEA 8,019 5,052

Asia Pacific 85,231 44,431

Total property, plant and equipment $ 114,060 $ 76,119

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Property, plant and equipment, net in Switzerland, the Company's home domicile, were $ 5.7 million and $ 2.3 million as of March 31, 2021 and 2020, respectively.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 118

Note 16— Restructuring

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

The restructuring-related activities for the year ended March 31, 2018 include activities from the restructuring plan implemented in fiscal year 2016.

Logitech International S.A.

| Fiscal 2021 Form 10-K | 112

The following table summarizes restructuring-related activities during fiscal year 2021, 2020 and 2019 (in thousands):

Restructuring - Continuing Operations

Benefits Lease Exit

Accrual balance at March 31, 2018 $ — $ — $ —

Credits, net 11,302 — 11,302

Cash payments ( 6,913 ) — ( 6,913 )

Accrual balance at March 31, 2019 4,389 — 4,389

Charges, net 144 — 144

Cash payments ( 3,852 ) — ( 3,852 )

Accrual balance at March 31, 2020 681 — 681

Cash payments

Charges, net ( 54 ) — ( 54 )

Accrual balance at March 31, 2021 $ 627 $ — $ 627

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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 2 Summary of Significant Accounting Policies) 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 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.

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

Logitech International S.A.

| Fiscal 2020 Form 10-K | 119

The Company's lease arrangements comprise of operating leases with various expiration dates through 48029 .

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.

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

For the year ended March 31, 2020, the total operating lease costs were $ 14.1 million, which included short-term lease costs and sublease income.

Total variable lease costs were immaterial during the year ended March 31, 2020.

The total operating lease costs were $ 15.0 million and $ 14.1 million as of March 31, 2021 and 2020, respectively, and included short-term lease costs and sublease income.

Total variable lease costs were immaterial during the year ended March 31, 2021 and 2020.

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 consolidated statement of operations.

As of March 31, 2020, the weighted-average remaining lease term was 3.8 years, and the weighted-average discount rate was 3.0 % .

For the year ended March 31, 2020, cash paid for amounts included in the measurement of operating lease liabilities was $ 13.6 million, and right-of-use assets obtained in exchange for new operating lease liabilities was $ 6.1 million.

Supplemental cash flow information related to operating leases (in thousands):

Years Ended March 31,

Cash paid for amounts included in the measurement of operating lease liabilities $ 13,865 $ 13,554

ROU assets obtained in the exchange for operating lease liabilities $ 15,659 $ 6,123

Logitech International S.A.

| Fiscal 2021 Form 10-K | 113

Future lease payments included in the measurement of lease liabilities as of March 31, 2021 for the following five fiscal years and thereafter are as follows (in thousands):

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Years Ending March 31,

2022 $ 13,827

Thereafter 2,649

Total lease payments 36,108

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Present value of lease liabilities $ 34,420

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

Note 18— Subsequent Event

In May 2020, the Company's Board of Directors approved the 2020 share buyback program, which authorizes the Company to use up to $ 250.0 million to purchase its own shares following the expiration date of 2017 buyback program.

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

Logitech International S.A.

| Fiscal 2020 Form 10-K | 120

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.

Logitech International S.A.

| Fiscal 2020 Form 10-K | 121

LOGITECH INTERNATIONAL S.A.

SUPPLEMENTARY DATA

QUARTERLY FINANCIAL DATA

The following table contains selected unaudited quarterly financial data for fiscal years 2020 and 2019 (in thousands, except per share amounts):

Year ended March 31, 2020 (1)

Year ended March 31, 2019 (1)

Cost of goods sold

Amortization of intangible assets and purchase accounting effect on inventory

Operating expenses:

Marketing and selling

Research and development

General and administrative

Amortization of intangible assets and acquisition-related costs

Change in fair value of contingent consideration for business acquisition

Restructuring charges (credits), net

Total operating expenses

Operating income

Interest income

Other income (expense), net

Income before income taxes

Provision for (benefit from) income taxes

Net income per share:

Shares used to compute net income per share:

______________________________

(1) Financial results of all the periods in fiscal years 2020 and 2019 included the impact from businesses acquired during the year.

Refer to Note 3 to the consolidated financial statements.

Average lease terms and discount rates were as follows:

Years Ended March 31,

Weighted-average remaining lease terms (in years) 3.8 3.8

Weighted-average discount rate 2.7 % 3.0 %

Logitech International S.A.

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Allowance for doubtful accounts:

2021 $ 1,894 $ ( 533 ) $ ( 200 ) $ 1,161

2020 $ 84 $ 1,607 $ 203 $ 1,894

2019 $ 122 $ 840 $ ( 878 ) $ 84

Allowance for sales returns:

2021 $ 6,599 $ 122,803 $ ( 114,964 ) $ 14,438

2020 $ 6,486 $ 107,980 $ ( 107,868 ) $ 6,599

2019 $ 25,515 $ 94,381 $ ( 113,410 ) $ 6,486

Allowance for cooperative marketing arrangements:

2021 $ 38,794 $ 222,732 $ ( 218,250 ) $ 43,276

2020 $ 35,080 $ 194,730 $ ( 191,015 ) $ 38,794

2019 $ 30,389 $ 176,323 $ ( 171,632 ) $ 35,080

Allowance for customer incentive programs:

2021 $ 55,741 $ 256,755 $ ( 236,296 ) $ 76,200

2020 $ 60,036 $ 248,966 $ ( 253,260 ) $ 55,741

2019 $ 70,592 $ 237,580 $ ( 248,136 ) $ 60,036

Allowance for pricing programs:

2021 $ 100,168 $ 782,734 $ ( 762,334 ) $ 120,568

2020 $ 88,353 $ 570,409 $ ( 558,594 ) $ 100,168

2019 $ 141,369 $ 444,540 $ ( 497,556 ) $ 88,353

Tax valuation allowance:

2021 $ 29,171 $ ( 245 ) $ — $ 28,926

2020 $ 28,375 $ 796 $ — $ 29,171

2019 $ 25,148 $ 3,244 $ ( 17 ) $ 28,375

(1) The amounts for fiscal years 2021, 2020 and 2019 include immaterial impacts from the business acquisitions during the year.

Refer to Note 3 to the consolidated financial statements.

(2) The amounts charged to the Statement of Operations for allowances for various Customer Programs and sales returns in fiscal year 2019 include the impact of $ 105.8 million reduction as a result of the adoption of ASU 2014-09 effective April 1, 2018, of which $ 20.0 million was for allowance for sales returns, $ 3.2 million was for the allowance for cooperative marketing arrangements, $ 18.7 million for allowance for customer incentive programs and $ 63.8 million for allowance for pricing programs.

Refer to Note 2 to the consolidated financial statements.

(3) The amount charged to the Statement of Operations for the tax valuation allowance in fiscal year 2018 primarily includes the impact of $ 18.0 million from the adoption of ASU 2016-09 effective April 1, 2017.

Logitech International S.A.

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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-K

Item 9A. Controls and Procedures