Nautilus 2008 Annual Report Download - page 63

Table of Contents
and $5.2 million, respectively. If and when a review of objective evidence indicates that some or all of the Company’s valuation allowances are
no longer appropriate, release of the valuation allowance would be recognized as an income tax benefit to continuing operations during the
period in which such assessment is made.
In addition, the Company’s operations in Switzerland operated under a tax holiday during 2008, which will expire in 2010.
The Company adopted the provisions of FIN 48— Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109,
on January 1, 2007. As a result of the implementation of FIN 48, the Company performed a comprehensive review of its portfolio of uncertain
tax positions in accordance with recognition standards established by FIN 48. In this regard, an uncertain tax position represents the Company’s
expected 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.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits from uncertain tax positions (excluding the impact of
penalties and interest) is as follows:
Included in the liability for unrecognized tax benefits at December 31, 2008 and 2007 respectively, are $2.2 million and $2.2 million of tax
benefits that, if recognized, would affect the effective tax rate. The Company recognizes tax-related interest and penalties as a component of
income tax expense. As of December 31, 2008, the Company recognized a cumulative liability for interest and penalties of $0.6 million. As of
December 31, 2007, the Company recognized a cumulative liability for interests and penalties of $0.8 million.
The Company’s U.S. federal income tax returns for 2005 through 2008 are open to review by the U.S. Internal Revenue Service. The 2004 tax
year was open as of December 31, 2007. The Company
’s U.S. state tax returns are open from 2002 through 2008 depending on each state’s
statute of limitation. In addition, the Company files in numerous foreign jurisdictions with varying statutes of limitation.
As of December 31 2008, the Company believes it is reasonably possible that, within the next 12 months, $0.6 million of previously
unrecognized tax benefits related to domestic filing positions will be recognized, primarily, as reductions in income tax expense, as a result of
the expiration of U.S. statutes of limitation.
11. STOCKHOLDERS’ EQUITY
Common Stock
As of December 31, 2008, the Company had 75.0 million authorized shares of common stock, no par value, of which 30.6 million shares were
issued and outstanding and 2.2 million shares were reserved for future issuance upon exercise of stock options and vesting of restricted stock.
During the year ended December 31, 2007, the Company paid quarterly cash dividends on its common stock of $0.10 per share in each of the
first three calendar
59
(In thousands)
2008
2007
Balance at January 1
$
2,166
$
2,442
Increases due to tax positions taken in previous periods
28
109
Decreases due to tax positions taken in previous periods
(4
)
(33
)
Increases due to tax positions taken in the current period
729
312
Decreases due to settlements with taxing authorities
(63
)
(39
)
Decreases due to lapse of statute of limitations
(691
)
(625
)
Balance at December 31
$
2,165
$
2,166