8x8 2011 Annual Report Download - page 36

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INTEREST INCOME AND OTHER, NET
2011 2010 2009
Interest income and other, net $ 138 $ 53 $ 298 $ 85 160.4% $ (245) -82.2%
Percentage of total revenues 0.2% 0.1% 0.5%
(dollar amounts in thousands)
Years Ended March 31,
2010 to 2011 2009 to 2010
Year-over-Year Change
Our interest income and other, net, primarily consists of interest and investment income earned on our cash, cash equivalents
and investment balances. This item primarily consisted of capital gains distribution and interest income in fiscal 2011, 2010
and 2009.
The increase in other income for fiscal 2011 from fiscal 2010 consists primarily of an increase in capital gain distributions due
on mutual funds purchased in the third quarter of fiscal 2011.
The decrease in other income for fiscal 2010 from fiscal 2009 consists primarily of a reduction in interest and investment
income earned on our cash, cash equivalents and investment balances due to lower interest rates.
INCOME ON CHANGE IN FAIR VALUE OF WARRANT LIABILITY
2011 2010 2009
Income (loss) on change in fair
value of warrant liability $ 167 $ (146) $ 314 $ 313 -214.4% $ (460) -146.5%
Percentage of total revenues 0.2% -0.2% 0.5%
Years Ended March 31,
(dollar amounts in thousands)
Year-over-Year Change
2010 to 2011 2009 to 2010
In connection with the sale of shares of our common stock in fiscal 2005 and 2006, we issued warrants in three different equity
financings. The change in income on change in fair value of the warrant liability for fiscal 2011 compared to fiscal 2010 is due
to the partial exercise and expiration of all remaining warrants in the third quarter of fiscal 2011.
The decrease in the income from change in fair value of warrants in fiscal 2010 from fiscal 2009 occurred because the fair
value of warrants and warrant liability increased due to an increase in our stock price and the expected stock price volatility,
offset by a reduction in the risk free interest rate and contractual life of the warrants, which are the primary assumptions
applied to the Black-Scholes model which we have used to calculate the fair value of the warrants.
PROVISION FOR INCOME TAXES
2011 2010 2009
Provision for income taxes $ 55 $ 3 $ 45 $ 52 1733.3% $ (42) 100.0%
Percentage of total revenues 0.1% 0.0% 0.1%
(dollar amounts in thousands)
Years Ended March 31, Year-over-Year Change
2010 to 2011 2009 to 2010
The effective tax rate for the fiscal year ended March 31, 2011 differed from the statutory federal income tax rate primarily
because we utilized prior net operating losses and available tax credits while we have a valuation allowance against our
deferred tax assets. Therefore, our income tax provision has consisted primarily of minimum and capital state income taxes
and foreign income tax.
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