Rosetta Stone 2015 Annual Report Download - page 97
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Table of Contents
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):
Balance at January 1,
$ 446
$ 143
Increases for tax positions taken during prior years
—
322
Settlements with tax authorities
(446)
—
Reductions for tax positions taken during prior years
—
(2)
Lapse of statute of limitations
—
(17)
Balance at December 31,
$ —
$ 446
The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. The Company's tax years 2010 and forward are subject to
examination by the tax authorities. The Company was under audit by the Internal Revenue Service for tax years 2009 to 2012. During 2015, the U.S. audit for
tax years 2009 through 2012 concluded and resulted in the Company recording a $0.1 million tax benefit. The previously recorded $0.4 million of
unrecognized tax benefits were settled as a result of the concluded IRS audit. During the year ended December 31, 2015, the Company recorded a net
decrease of $0.4 million of additional unrecognized tax benefits related to tax credits claimed in a prior period. As of December 31, 2015 and 2014, the
Company had zero and $0.4 million of unrecognized tax benefits, respectively. Any liabilities for unrecognized tax benefits were netted against "Income Tax
Receivable." The Company does not expect that the amounts of unrecognized tax benefits will change significantly within the next twelve months.
The Company had an accumulated consolidated deficit related to its foreign subsidiaries of $34.4 million at December 31, 2015 and aggregate 2015
losses before income tax related to its foreign subsidiaries of approximately $4.2 million. The Company has certain foreign subsidiaries with aggregate
undistributed earnings of $11.6 million at December 31, 2015. The foreign subsidiaries with aggregate undistributed earnings are considered indefinitely
reinvested as of December 31, 2015. As a result of the multitude of scenarios in which the earnings could be repatriated, if desired, and the complexity of
associated calculations, it is not practicable to estimate the amount of additional tax that might be payable on the undistributed foreign earnings.
The Company made income tax payments of $1.4 million, $1.7 million, and $3.3 million, in 2015, 2014 and 2013, respectively.
Operating Leases
The Company leases copiers, parking spaces, buildings, a warehouse, and office space under operating lease and site license arrangements, some of
which contain renewal options. Building, warehouse and office space leases range from 7 months to 74 months. Certain leases also include lease renewal
options.
F-41