LeapFrog 2009 Annual Report Download - page 73
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LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
The components of the provision for (benefit from) income taxes were as follows:
Years Ended December 31,
2009 2008 2007
Current:
Federal ...................................................... $ (367) $ (774) $ —
State ........................................................ 412 83 —
Foreign ...................................................... (260) 1,108 3,198
Total current ............................................. (215) 417 3,198
Deferred:
Federal ...................................................... $ 85 $ 854 $ 411
State ........................................................ 43 43 63
Foreign ...................................................... 411 (874) (2,197)
Total deferred ............................................ 539 23 (1,723)
Non-current
Federal ...................................................... $(7,602) $ 402 $ 346
State ........................................................ (631) 157 519
Foreign ...................................................... 721 875 1,383
Total non-current ......................................... (7,512) 1,434 2,248
Grand total .......................................... $(7,188) $1,874 $ 3,723
The differences between the provision for income taxes and the income tax determined by applying the statutory
federal income tax rate of 35% were as follows:
Years Ended December 31,
2009 2008 2007
Income tax (benefit) at the statutory rate $(3,456) $(23,268) $(34,564)
State income taxes ................................................. (219) 283 582
Foreign operations ................................................. (137) 588 (5,648)
Interest and penalties ............................................... 926 1,288 932
Nondeductible items ................................................ 320 1,534 164
Research and development credits ..................................... (474) (600) (505)
Release of unrecognized tax benefit ................................... (7,804) — —
IRS refunds ....................................................... — (1,918) —
Other ............................................................ (32) 1,965 1,625
Less: valuation allowance ........................................... 3,688 22,002 41,137
Income tax provision (benefit) $(7,188) $ 1,874 $ 3,723
State income tax expense above included a valuation allowance of $1,080, $3,225 and $6,635 for 2009, 2008 and
2007, respectively. State income tax expense also included interest and penalties of $51, $157 and $124 for 2009,
2008 and 2007, respectively. The tax benefit for 2009 includes a $7,804 benefit from the recognition of
previously unrecognized tax benefits including $3,143 of accrued interest, due to expiring statute of limitations.
Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $17,941 at
December 31, 2009. The earnings are considered to be permanently reinvested and, accordingly, no deferred
United States income taxes have been provided thereon. Upon distribution of these earnings in the form of
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