Shutterfly 2010 Annual Report Download - page 83

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SHUTTERFLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of the net deferred tax assets as of December 31, 2009 and 2008 are as follows (in thousands):
As of January 1, 2009, the Company had $1,766,000 of unrecognized tax benefits. As of December 31, 2009, the Company booked an
additional $551,000 for unrecognized tax benefits for fiscal 2009. A reconciliation of the beginning and ending amounts of unrecognized
income tax benefits during the twelve month periods ended December 31, 2009, 2008 and 2007 is as follows (in thousands):
Although timing of the resolution or closure on audits is highly uncertain, the Company does not believe it is reasonably possible that the
unrecognized tax benefits would materially change in the next twelve months.
The amount of unrecognized tax benefits, if recognized, would
affect the effective tax rate.
As of December 31, 2009, the Company is subject to taxation in the United States, California, and fourteen other jurisdictions in the United
States.
Note 10 — Employee Benefit Plan
In 2000, the Company established a 401(k) plan under the provisions of which eligible employees may contribute an amount up to 50% of
their compensation on a pre-tax basis, subject to IRS limitations. The Company matches employees’ contributions at the discretion of the Board.
In 2009 and 2008, there were no discretionary contributions.
December 31,
2009
2008
Deferred tax assets:
Net operating loss carryforwards
$
1,837
$
1,240
Reserves and other tax benefits
6,909
4,701
Tax credits
4,508
4,499
Depreciation and amortization
2,897
2,612
Other
766
408
Deferred tax assets
16,917
13,460
Deferred tax liabilities:
Deferred tax liabilities
—
—
Net deferred tax assets
$
16,917
$
13,460
2009
2008
2007
Balance of unrecognized tax benefits at January 1
$
1,766
$
756
$
1,200
Additions for tax positions of prior years
-
455
-
Additions for tax positions related to current year
551
555
259
Reductions for tax positions of prior years
(138
)
-
(607
)
Settlement of franchise tax audit
-
-
(96
)
Balance of unrecognized tax benefits at December 31
$
2,179
$
1,766
$
756
79