Nautilus 2007 Annual Report Download - page 55

Table of Contents
treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring
income tax expense for financial reporting purposes. As a result of this review, the Company adjusted the estimated value of its uncertain tax
positions by recognizing additional liabilities totaling $1.3 million through a charge to retained earnings. Upon the adoption of FIN 48, the
estimated value of the Company’s uncertain tax positions was a liability of $3.2 million resulting from unrecognized tax benefits, including
penalties and interest of $0.8 million.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (which does not include penalties and interest) is as
follows:
As of December 31, 2007, the estimated value of the Company’s uncertain tax positions was a liability of $3.0 million resulting from
unrecognized tax benefits, including $0.4 million for the payment of tax-related interest and $0.4 million for tax-related penalties. The Company
recognizes accrued interest and penalties related to uncertain tax positions in federal, state, and foreign income tax expense. If the Company’s
positions are sustained by the taxing authority in favor of the Company, approximately $2.4 million would reduce the Company’s effective tax
rate.
The Company’s federal income tax returns for 2004 through 2007 are open tax years. The Company’s state tax returns are open from 2001
through 2007 depending on each state’s statute of limitation. In addition, the Company files in numerous foreign jurisdictions with varying
statutes of limitation.
The Company believes it is reasonably possible that, within the next 12 months, $1.0 million of previously unrecognized tax benefits related to
domestic filing positions, of which $0.7 million would reduce the Company’s effective tax rate, will be recorded primarily as a result of the
expiration of state statutes of limitation.
10. STOCKHOLDERS’ EQUITY
Common Stock
As of December 31, 2007, the Company had 75.0 million authorized shares of common stock, no par value, of which 31.6 million were issued
and outstanding, and 3.1 million shares were reserved for future issuance upon exercise of stock options and issuance of restricted stock, and
payment of awards under share-based compensation plans. During fiscal 2007, the Company paid quarterly cash dividends on its common stock
of $0.10 per share in each of the first three calendar quarters. The dividend was suspended in the fourth quarter of 2007.
In March 2005, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s common stock in open-
market transactions at times and in such amounts as management deems appropriate depending on market conditions and other factors. The
authorization expires on March 31, 2008 unless extended by the Board of Directors. The repurchase program does not obligate the Company to
acquire any specific number of shares or acquire shares over any specified period of time. No shares of common stock were repurchased during
the year ended December 31, 2007. During the year ended December 31, 2006, the
52
(In thousands)
Balance at January 1, 2007
$
2,442
Increases due to tax positions taken in previous periods
109
Decreases due to tax positions taken in previous periods
(33
)
Increases due to tax positions taken in the current period
312
Decreases due to settlements with taxing authorities
(39
)
Decreases due to lapse of statute of limitations
(625
)
Balance at December 31, 2007
$
2,166