Plantronics 2011 Annual Report Download - page 83

The following is a reconciliation between statutory federal income taxes and the income tax expense from continuing operations
for fiscal years 2011, 2010 and 2009:
(in thousands)
Tax expense at statutory rate
Foreign operations taxed at different rates
State taxes, net of federal benefit
Research and development credit
Other, net
Income tax expense from continuing operations
Fiscal Year Ended March 31,
2011
$ 49,229
(16,308)
2,340
(3,234)
(614)
$ 31,413
2010
$ 35,259
(11,166)
2,091
(1,383)
(514)
$ 24,287
2009
$ 20,272
(4,546)
849
(3,117)
(883)
$ 12,575
The effective tax rate for fiscal years 2011, 2010 and 2009 was 22.3%, 24.1%, and 21.7% respectively. The effective tax rate for
fiscal 2011 is lower than the previous year due primarily to the increased benefit from the U.S. federal research tax credit in fiscal
2011 as the credit was reinstated in December 2010 retroactively to January 1, 2010; the effective tax rate for fiscal 2011 includes
the impacts of credits earned in the fourth quarter of fiscal 2010.
In comparison to fiscal 2009, the increase in the effective tax rate for fiscal 2010 was due primarily to the incremental benefit
associated with the release of a higher amount of tax reserves resulting from the lapse of the statute of limitations in certain
jurisdictions in fiscal 2009. In addition, the effective tax rate for fiscal 2009 included the impact of credits earned in the fourth
quarter of fiscal 2008 because the U.S. federal research tax credit was reinstated in October 2008 retroactively to January 1, 2008.
The 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.
Permanently reinvested foreign earnings were approximately $433.4 million at March 31, 2011. The determination of the tax
liability that would be incurred if these amounts were remitted back to the U.S. is not practical.
Deferred tax assets and liabilities represent the tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting and income tax purposes. Significant components of our deferred tax assets and liabilities as of
March 31, 2011 and 2010 are as follows:
(in thousands)
Accruals and other reserves
Net operating loss carry forward
Stock compensation
Other deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred gains on sales of properties
Purchased intangibles
Unremitted earnings of certain subsidiaries
Fixed asset depreciation
Other deferred tax liabilities
Total deferred tax liabilities
Net deferred tax assets
March 31,
2011
$ 9,850
5,095
5,519
4,417
(5,274)
19,607
(1,954)
(323)
(3,064)
(4,244)
(2,199)
(11,784)
$ 7,823
2010
$ 8,316
2,833
7,946
4,553
(1,399)
22,249
(2,033)
(1,288)
(2,486)
(3,619)
(2,463)
(11,889)
$ 10,360
The Company evaluates its deferred tax assets including a determination of whether a valuation allowance is necessary based
upon its ability to utilize the assets using a more likely than not analysis. Deferred tax assets are only recorded to the extent that
they are realizable based upon past and future income. The Company has a long established earnings history with taxable income
in its carryback years and forecasted future earnings. The Company has concluded that except for the specific items discussed
below, no valuation allowance is required.
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