Adaptec 2009 Annual Report Download - page 85

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Annual Report
A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax
benefits is as follows (in millions):
(in millions)
December 27,
2009
December 28,
2008
December 30,
2007
Gross unrecognized tax benefits at beginning of the year ........... $22.9 $ 125.5 $ 92.5
Increases in tax positions for prior years ......................... 3.0 24.2 15.0
Decreases in tax positions for prior years ........................ — — (1.3)
Increases in tax positions for current years ....................... 9.6 — —
Decreases in tax positions for settlement with tax authorities ........ — (114.3) —
Lapse in state limitations ..................................... (0.1) (3.0) (0.7)
Effect of foreign currency gain (loss) on translation ............... 5.1 (9.5) 20.1
Gross unrecognized tax benefits at end of the year ................. $40.5 $ 22.9 $125.6
The total amount of gross unrecognized tax benefits that, if recognized, would affect the effective tax rate
was $40.5 million at December 27, 2009 (2008—$22.9 million). Included in the increases in accruals for
uncertain tax positions in the current year of $12.6 million is $9.6 million related to inter-company sale of assets.
The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income
taxes. At December 27, 2009, the Company had accrued interest and penalties related to unrecognized tax
benefits of $1.6 million (2008—$3.8 million).
The Company and its subsidiaries file income tax returns in the U.S. and in various states, local and foreign
jurisdictions. The 2006 through 2009 tax years generally remain subject to examination by federal and most state
tax authorities. In significant foreign jurisdictions, the 2004 through 2009 tax years generally remain subject to
examination by their respective tax authorities. The Company does not reasonably estimate that the unrecognized
tax benefit will change significantly within the next 12 months.
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