Logitech 2012 Annual Report Download - page 253

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The aggregate changes in gross unrecognized tax benefits in fiscal years 2012, 2011 and 2010 were as follow
(in thousands):
Balance as of March 31, 2009 ......................................................... $ 97,627
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,667)
Decreases in balances related to tax positions taken during prior periods.................... (229)
Increases in balances related to tax positions taken during prior periods .................... 2,690
Increases in balances related to tax positions taken during the current period ................ 17,207
Balance as of March 31, 2010 ......................................................... $113,628
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,760)
Settlements with tax authorities..................................................... (6,290)
Increases in balances related to tax positions taken during the current period ................ 27,550
Balance as of March 31, 2011 ......................................................... $130,128
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,760)
Increases in balances related to tax positions taken during the current period ................ 12,810
Balance as of March 31, 2012 ......................................................... $136,178
The Company recognizes interest and penalties related to unrecognized tax positions in income tax expense.
The Company recognized $1.2 million, $1.3 million and $1.9 million in interest and penalties in income tax expense
during fiscal years 2012, 2011 and 2010. As of March 31, 2012, 2011 and 2010, the Company had approximately
$7.5 million, $8.0 million and $12.5 million of accrued interest and penalties related to uncertain tax positions.
The Company files Swiss and foreign tax returns. For all these tax returns, the Company is generally not
subject to tax examinations for years prior to 1999. The U.S. Internal Revenue Service has completed its field
examinations of tax returns for the Company’s U.S. subsidiary for fiscal years 2006 and 2007, and has issued
NOPAs (notices of proposed adjustment) related to international tax issues for those years. The Company disagrees
with the NOPAs and is contesting through the administrative process for the U.S. Internal Revenue Service claims
regarding 2006 and 2007. The Company believes the outcome of this examination will not have a material adverse
effect on our consolidated operating results.
In addition, the U.S. Internal Revenue Service is in the process of examining the Company’s U.S. subsidiary
for fiscal years 2008 and 2009. The Company is also under examination and has received assessment notices in
other tax jurisdictions. At this time, the Company is not able to estimate the potential impact that these examinations
may have on income tax expense. If the examinations are resolved unfavorably, there is a possibility they may have
a material negative impact on our results of operations.
Although the Company believes it has adequately provided for uncertain tax positions, the provisions on these
positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved.
Although the 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.
Note 6 — Income Taxes (Continued)
ANNUAL REPORT
243