Radio Shack 2011 Annual Report Download - page 68

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these earnings were not material to the financial
statements.
A reconciliation of the consolidated liability for gross
unrecognized income tax benefits (excluding interest) from
January 1, 2009, to December 31, 2011, is as follows:
(In millions) 2011 2010 2009
Balance at beginning of year $ 25.9
$ 26.5
$ 38.1
Increases related to
prior period tax positions 1.8
-- --
Decreases related to
prior period tax positions (0.4)
(0.4)
(5.5)
Increases related to
current period tax positions
1.8
1.7 1.9
Settlements (0.6)
(1.1)
(7.2)
Lapse in applicable
statute of limitations (1.2)
(0.8)
(0.8)
Balance at end of year $ 27.3
$ 25.9 $ 26.5
The amount of net unrecognized tax benefits that, if
recognized, would affect the effective tax rate as of
December 31, 2011, was $21.1 million.
We recognize accrued interest and penalties associated
with uncertain tax positions as part of the tax provision. As
of December 31, 2011 and 2010, we had $12.4 million and
$10.8 million, respectively, of accrued interest expense
associated with uncertain tax positions. Income tax
expense included interest associated with uncertain tax
positions of $2.7 million, $1.7 million, and $3.6 million, in
2011, 2010, and 2009, respectively.
We expect approximately $3.4 million of changes in
unrecognized tax benefit liabilities over the next twelve
months and this amount is classified in other current
liabilities on the Consolidated Balance Sheets at December
31, 2011. The remaining amount of our unrecognized tax
benefit liabilities are classified in other non-current
liabilities.
RadioShack Corporation and its U.S. subsidiaries join in the
filing of a U.S. federal consolidated income tax return. The
U.S. federal statute of limitations is closed for all years prior
to 2004. Foreign and U.S. state jurisdictions have statutes
of limitations generally ranging from 3 to 5 years. Our tax
returns are currently under examination in various federal,
state and foreign jurisdictions. While one or more of these
examinations may be concluded within the next twelve
months, we do not expect this to have a significant effect on
our results of operations or financial position. Our effective
tax rate for future periods may be affected by the settlement
of tax controversies or by the expiration of the statute of
limitations for periods for which a liability has been
established.
NOTE 10 – NET INCOME PER SHARE
Basic net income per share is computed based only on the
weighted average number of common shares outstanding
for each period presented. Diluted net income per share
reflects the potential dilution that would have occurred if
securities or other contracts to issue common stock were
exercised, converted, or resulted in the issuance of
common stock that would have then shared in the earnings
of the entity.
The following table reconciles the numerator and
denominator used in the basic and diluted net income per
share calculations for the years presented:
(In millions) 2011 2010 2009
Numerator:
Income from continuing
operations $ 67.1 $ 190.7 $ 196.5
Discontinued operations,
net of taxes 5.1 15.4 8.5
Net income $ 72.2 $ 206.1 $ 205.0
Denominator:
Weighted-average
common shares
outstanding
102.5
120.5
125.4
Dilutive effect of
stock-based awards 0.8 2.2 0.7
Weighted average shares
for diluted net income
per share
103.3
122.7
126.1
The following table includes common stock equivalents that
were not included in the calculation of diluted net income
per share for the periods presented:
(In millions) 2011 2010 2009
Employee stock options
(1)
6.3 1.8 4.6
Warrants to purchase
common stock (1) 15.8 15.5 15.5
Convertible debt
Instruments (2) 15.8 15.5 15.5
(1)
These common stock equivalents were excluded because their exercise
prices ($35.88, $36.60, and $36.60 per share for the warrants in 2011,
2010, and 2009, respectively) exceeded the average market price of our
common stock during these periods, and the effect of their inclusion
would be antidilutive. These securities could be dilutive in future periods.
(2)
These common stock equivalents were excluded because the
conversion price ($23.77, $24.25, and $24.25 per share in 2011, 2010,
and 2009, respectively) exceeded the average market price of our
common stock during these periods, and the effect of their inclusion
would be antidilutive. These securities could be dilutive in future periods.