DTSI » Topics » Note 9-Commitments and Contingencies

These excerpts taken from the DTSI 10-K filed Mar 6, 2009.

Note 11—Commitments and Contingencies

        Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2029. Some leases contain renewal options and escalation clauses including increases in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income, are as follows:

Years Ending December 31,
   
 

2009

  $ 1,176  

2010

    303  

2011

    175  

2012

    172  

2013

    171  

2014 and thereafter

    1,845  
       

  $ 3,842  
       

        Rent expense amounted to $958, $1,046 and $1,145 for the years ended December 31, 2006, 2007 and 2008, respectively.

        The above table does not include contingent consideration that may be paid pursuant to the business acquisition from Neural. Any amount payable pursuant to this contingent consideration provision will be reflected as a liability as it becomes fixed and determinable over the next five years. For additional information regarding this commitment, see Footnote 10 of the consolidated financial statements, "Business Combination."

        During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company's customers in connection with the sale of its products and the licensing of its technology, indemnities for liabilities associated with the infringement of other parties' technology based upon the Company's products and technology, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance

78


Table of Contents


DTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except per share data)

Note 11—Commitments and Contingencies (Continued)


sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable.

        In the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently available, the outcome of any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.

Note 11—Commitments and Contingencies

        Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2029. Some leases contain renewal options and escalation clauses including increases in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income, are as follows:

Years Ending December 31,
   
 

2009

  $ 1,176  

2010

    303  

2011

    175  

2012

    172  

2013

    171  

2014 and thereafter

    1,845  
       

  $ 3,842  
       

        Rent expense amounted to $958, $1,046 and $1,145 for the years ended December 31, 2006, 2007 and 2008, respectively.

        The above table does not include contingent consideration that may be paid pursuant to the business acquisition from Neural. Any amount payable pursuant to this contingent consideration provision will be reflected as a liability as it becomes fixed and determinable over the next five years. For additional information regarding this commitment, see Footnote 10 of the consolidated financial statements, "Business Combination."

        During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company's customers in connection with the sale of its products and the licensing of its technology, indemnities for liabilities associated with the infringement of other parties' technology based upon the Company's products and technology, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance

78


Table of Contents


DTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except per share data)

Note 11—Commitments and Contingencies (Continued)


sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable.

        In the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently available, the outcome of any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.

Note 11—Commitments and Contingencies




        Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2029. Some leases contain renewal options and escalation
clauses including increases in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income,
are as follows:
















































































Years Ending December 31,



  
 

2009

 $1,176 

2010

  303 

2011

  175 

2012

  172 

2013

  171 

2014 and thereafter

  1,845 
    

 $3,842 
    




        Rent
expense amounted to $958, $1,046 and $1,145 for the years ended December 31, 2006, 2007 and 2008, respectively.



        The
above table does not include contingent consideration that may be paid pursuant to the business acquisition from Neural. Any amount payable pursuant to this contingent consideration
provision will be reflected as a liability as it becomes fixed and determinable over the next five years. For additional information regarding this commitment, see Footnote 10 of the consolidated
financial statements, "Business Combination."



        During
its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain
transactions. Those indemnities include intellectual property indemnities to the Company's customers in connection with the sale of its products and the licensing of its technology, indemnities for
liabilities associated with the infringement of other parties' technology based upon the Company's products and technology, and indemnities to directors and officers of the Company to the maximum
extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities,
commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make
any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance



78









HREF="#bg73701a_main_toc">Table of Contents





DTS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



(Amounts in thousands, except per share data)



Note 11—Commitments and Contingencies (Continued)






sheets.
The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable.



        In
the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently
available, the outcome of any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.



Note 11—Commitments and Contingencies




        Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2029. Some leases contain renewal options and escalation
clauses including increases in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income,
are as follows:
















































































Years Ending December 31,



  
 

2009

 $1,176 

2010

  303 

2011

  175 

2012

  172 

2013

  171 

2014 and thereafter

  1,845 
    

 $3,842 
    




        Rent
expense amounted to $958, $1,046 and $1,145 for the years ended December 31, 2006, 2007 and 2008, respectively.



        The
above table does not include contingent consideration that may be paid pursuant to the business acquisition from Neural. Any amount payable pursuant to this contingent consideration
provision will be reflected as a liability as it becomes fixed and determinable over the next five years. For additional information regarding this commitment, see Footnote 10 of the consolidated
financial statements, "Business Combination."



        During
its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain
transactions. Those indemnities include intellectual property indemnities to the Company's customers in connection with the sale of its products and the licensing of its technology, indemnities for
liabilities associated with the infringement of other parties' technology based upon the Company's products and technology, and indemnities to directors and officers of the Company to the maximum
extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities,
commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make
any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance



78









HREF="#bg73701a_main_toc">Table of Contents





DTS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



(Amounts in thousands, except per share data)



Note 11—Commitments and Contingencies (Continued)






sheets.
The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable.



        In
the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently
available, the outcome of any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.



These excerpts taken from the DTSI 10-K filed Mar 3, 2008.

Note 9—Commitments and Contingencies

        Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2012. Some leases contain renewal options and escalation clauses including

70


DTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except per share data)

Note 9—Commitments and Contingencies (Continued)


increases in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income, for continuing and discontinued operations are as follows:

Years Ending December 31,

   
2008   $ 826
2009     187
2010     69
2011     1
2012     1
2013 and thereafter    
   
    $ 1,084
   

        Rent expense amounted to $816, $958 and $1,046 for the years ended December 31, 2005, 2006 and 2007, respectively.

        During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company's customers in connection with the sale of its products and the licensing of its technology, indemnities for liabilities associated with the infringement of other parties' technology based upon the Company's products and technology, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable.

        In the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently available, any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.

71


DTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Amounts in thousands, except per share data)

Note 9—Commitments and Contingencies



        Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2012. Some leases contain renewal
options and escalation clauses including



70








DTS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



(Amounts in thousands, except per share data)



Note 9—Commitments and Contingencies (Continued)






increases
in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income, for continuing and
discontinued operations are as follows:






























































Years Ending December 31,

  
2008 $826
2009  187
2010  69
2011  1
2012  1
2013 and thereafter  
  
  $1,084
  




        Rent
expense amounted to $816, $958 and $1,046 for the years ended December 31, 2005, 2006 and 2007, respectively.



        During
its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain
transactions. Those indemnities include intellectual property indemnities to the Company's customers in connection with the sale of its products and the licensing of its technology, indemnities for
liabilities associated with the infringement of other parties' technology based upon the Company's products and technology, and indemnities to directors and officers of the Company to the maximum
extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities,
commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make
any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance sheets. The Company does, however, accrue for losses for any known
contingent liability, including those that may arise from indemnification provisions, when future payment is probable.



        In
the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently
available, any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.



71








DTS, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



(Amounts in thousands, except per share data)




This excerpt taken from the DTSI 10-K filed Mar 16, 2007.

Note 13—Commitments and Contingencies

Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2015. Some leases contain renewal options and escalation clauses including increases in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income, are as follows:

Years Ending December 31,

 

 

 

 

 

2007

 

$

1,092

 

2008

 

921

 

2009

 

367

 

2010

 

284

 

2011

 

240

 

2012 and thereafter

 

565

 

 

 

$

3,469

 

 

Rent expense, net of sublease income, amounted to $883, $1,379 and $1,718 for the years ended December 31, 2004, 2005 and 2006, respectively.

Under the terms of the acquisition of QDesign Corporation, the Company has contingently committed to pay a maximum of $150 during 2007 as compensation expense if certain criteria are met. For additional information regarding this commitment, see Footnote 12 of the consolidated financial statements, “Business Combinations.”

In 2005, the Company entered into an agreement for the purchase and implementation of a new enterprise resource planning system, or ERP, for approximately $747, which was due in two equal

86




DTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Amounts in thousands, except per share data)

installments over two years. The Company has a commitment to pay the second installment of $373 during 2007.

The Company also enters into contracts with manufacturers to provide certain manufacturing services. If the Company were to have terminated these contracts at December 31, 2006, it would have to make payments of approximately $2,576.

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company’s customers in connection with the sale of its products and the licensing of its technology, indemnities for liabilities associated with the infringement of other parties’ technology based upon the Company’s products and technology, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable.

In the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently available, any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.

This excerpt taken from the DTSI 10-K filed Mar 16, 2006.
Note 11—Commitments and Contingencies

Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2015. Some leases contain renewal options and escalation clauses including increases in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income are as follows:

Years Ending December 31,

 

 

 

 

 

2006

 

$

942

 

2007

 

730

 

2008

 

373

 

2009

 

318

 

2010

 

249

 

2011 and thereafter

 

632

 

 

 

$

3,244

 

 

Rent expense, net of sublease income amounted to $485, $883 and $1,379 for the years ended December 31, 2003, 2004 and 2005, respectively.

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company’s customers in connection with the sale of its products and the licensing of its technology, indemnities for liabilities associated with the infringement of other parties’ technology based upon the Company’s products and technology, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in

87




DTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Amounts in thousands, except share and per share data)

Note 11—Commitments and Contingencies (Continued)

certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable.

In the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently available, any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.

This excerpt taken from the DTSI 10-K filed Mar 16, 2005.

Note 10—Commitments and Contingencies

Warehouse, office facilities and certain office equipment are leased under operating leases expiring in various years through 2007. Some leases contain renewal options and escalation clauses including increases

74




DIGITAL THEATER SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Amounts in thousands, except share and per share data)

Note 10—Commitments and Contingencies (Continued)

in annual rents based upon increases in the consumer price index. Minimum future rental payments under non-cancelable operating leases, net of sublease income are as follows:

Years Ending December 31,

 

 

 

 

 

2005

 

$

903

 

2006

 

750

 

2007

 

559

 

2008

 

333

 

2009

 

292

 

2010 and thereafter

 

870

 

 

 

$

3,707

 

 

Rent expense, net of sublease income amounted to $525, $485 and $883 for the years ended December 31, 2002, 2003 and 2004, respectively.

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company’s customers in connection with the sale of its products and the licensing of its technology, indemnities for liabilities associated with the infringement of other parties’ technology based upon the Company’s products and technology, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make any payments and has not recorded any liability for these indemnities, commitments and guarantees in the accompanying balance sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable.

In March 2005, in connection with the U.S. Internal Revenue Service’s (“ IRS”) regular examination of the Company’s tax return for the year ended December 31, 2002, the IRS proposed adjustments related to certain items included in its return. The Company does not agree with the proposed adjustments and intends to appeal these adjustments. If the IRS prevails in its position, the Company’s federal income tax due for 2002 would increase by approximately $1.9 million, plus interest. The IRS could make similar claims for years subsequent to 2002 in future audits.

Although the final resolution of the adjustments is uncertain, based on currently available information, the Company believes that the ultimate outcome will not have a material adverse effect on the Company’s financial position, cash flows or overall trends in the results of operations. There is the possibility of a material adverse impact on the results of operations in the period in which the matter is ultimately resolved, if it is resolved unfavorably, or in the period in which an unfavorable outcome becomes probable and reasonably estimable.

75




DIGITAL THEATER SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Amounts in thousands, except share and per share data)

Note 10—Commitments and Contingencies (Continued)

In connection with the Company’s enforcement activities relating to its intellectual property rights and to stop unauthorized use of its technology and trademarks, the Company terminated its license agreement to Sunplus Technology Co., Ltd. (“Sunplus”). In response, Sunplus filed suit against the Company alleging breach of contract arising from the Company’s termination of their license agreement. The Company has prevailed on several preliminary motions by Sunplus seeking to enjoin the Company from terminating the license agreement. The Company has filed a cross-complaint seeking a judicial declaration that the Company properly terminated the license agreement and to recover damages arising from Sunplus’ breach of the agreement. The Company believes Sunplus’ claim is without merit and intends to vigorously defend the case.

In the normal course of business, the Company is subject to certain claims and litigation, including unasserted claims. The Company is of the opinion that, based on information presently available, any such legal matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company.

As stated in Note 22, the Company has agreed to invest $3,500 in the business of LDI on or prior to June 30, 2005 to enable LDI to make certain capital expenditures and, if and to the extent LDI meets specified gross profit milestones, to invest up to an additional $1,500 through the end of 2006.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki