Plantronics 2011 Annual Report Download - page 45

Our effective tax rate for fiscal years 2011, 2010 and 2009 differs from the statutory rate due to the impact of foreign operations
taxed at different statutory rates, income tax credits, state taxes, and other factors. The future tax rate could be impacted by a shift
in the mix of domestic and foreign income, tax treaties with foreign jurisdictions, changes in tax laws in the U.S. or internationally
or a change in estimate of future taxable income which could result in a valuation allowance being required.
As of March 31, 2011, we had $10.5 million of unrecognized tax benefits compared to $11.2 million as of March 31, 2010 and
$11.1 million as of March 31, 2009. The unrecognized tax benefits as of the end of fiscal 2011 would favorably impact the effective
tax rate in future periods if recognized.
It is our continuing practice to recognize interest and/or penalties related to income tax matters in income tax expense. As of
March 31, 2011 and 2010, we had approximately $1.7 million of accrued interest related to uncertain tax positions, compared to
$1.6 million as of March 31, 2009. No penalties have been accrued.
Although the timing and outcome of income tax audits is highly uncertain, it is possible that certain unrecognized tax benefits
may be reduced as a result of the lapse of the applicable statutes of limitations in federal, state, and foreign jurisdictions within
the next twelve months. Currently, we cannot reasonably estimate the amount of reductions, if any, during the next twelve
months. Any such reduction could be impacted by other changes in unrecognized tax benefits.
We are subject to taxation in various foreign and state jurisdictions as well as in the U.S. We are no longer subject to U.S. federal
tax examinations by tax authorities for years prior to 2008. We are under examination by the California Franchise Tax Board for
our 2007 and 2008 tax years. Foreign income tax matters for material tax jurisdictions have been concluded for tax years prior
to fiscal 2006, except for the United Kingdom which has been concluded for tax years prior to fiscal 2009.
Discontinued Operations
We entered into an Asset Purchase Agreement (“APA”) on October 2, 2009, as subsequently amended, to sell Altec Lansing, our
AEG segment. The sale was completed effective December 1, 2009. All of the revenues in the AEG segment were derived from
sales of Altec Lansing products. All operations of AEG have been classified as discontinued operations in the Consolidated
statement of operations for all periods presented.
The results from discontinued operations in fiscal 2010 include a loss of $0.6 million on sale of Altec Lansing which is calculated
as follows (in thousands):
Proceeds received upon close
Escrow payments received to date
Remaining escrow payments to be received (subsequently received in fiscal 2011)
Payment to purchaser for adjustment for final value of net assets under APA
Total estimated proceeds
Book value of net assets sold
Costs incurred upon closing
Loss on sale of AEG
$ 11,075
2,065
1,625
(3,956)
10,809
(11,057)
(363)
$ (611)
There was no income or loss from discontinued operations for the year ended March 31, 2011. The results from discontinued
operations for the years ended March 31, 2010 and 2009 are as follows:
(in thousands)
Net revenues
Cost of revenues
Operating expenses
Impairment of goodwill and long-lived assets
Restructuring and other related charges
Loss on sale of AEG
Loss from operations of discontinued AEG segment (including loss on sale of AEG)
Tax benefit from discontinued operations
Loss on discontinued operations, net of tax
Year Ended March 31,
2010
$ 64,916
(53,127)
(16,433)
(25,194)
(19)
(611)
(30,468)
(11,393)
$ (19,075)
2009
$ 91,029
(86,932)
(28,144)
(117,464)
(1,122)
—
(142,633)
(32,392)
$ (110,241)
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